FY12-Q3 Earnings Release Exhibit

Irvington, NY, February 9, 2012-Prestige Brands Holdings, Inc. (NYSE-PBH) today announced results for the fiscal 2012 third quarter ended December 31, 2011, including net revenues of $106.3 million, an increase of 17.3% over the prior year's comparable quarter of $90.6 million. Net revenues for the nine month period of fiscal 2012 were $307.1 million, an increase of 27.9% over the prior year's comparable period of $240.1 million. This growth is largely driven by the fiscal 2011 acquisitions of Blacksmith Brands and Dramamine®, and the growth of the Company's legacy core Over-The-Counter (OTC) products. Net revenues for the Company's legacy core OTC brands were 3.2% and 5.7% higher than the prior year's comparable quarter and nine month periods, respectively, representing the sixth consecutive quarter of organic growth, excluding acquisitions.

Operating income for the third quarter of fiscal 2012 was $23.6 million, 81.4% higher than the prior year's comparable quarter of $13.0 million. Operating income for the first nine months of fiscal 2012 was $80.3 million, 39.5% higher than the prior year's comparable period of $57.5 million. These increases include the impact of the acquisitions completed in fiscal 2011, as well as expenses related to the acquisition of the brands from GSK.

The current fiscal nine month period included the net impact of the $3.0 million of GSK acquisition-related costs, which was largely offset by a net gain associated with a legal settlement, and other net costs totaling approximately $2.9 million. The prior year's fiscal nine month period included the net impact of the $8.2 million Blacksmith acquisition-related costs. Excluding the impact of these charges, income from continuing operations for the first nine months of fiscal 2012 would have been $37.3 million, 20.7% higher than the prior year's comparable quarter of $30.9 million.

Reported net income for the third quarter of fiscal 2012 was $9.5 million, or $0.19 per diluted share, 336.6% higher than the prior year's comparable quarter of $2.2 million, or $0.04 per diluted share. Excluding the costs mentioned above in each of the respective periods, net income for the current third fiscal quarter would have been $12.5 million, or EPS of $0.25, compared to $10.3 million in the prior year's comparable quarter, or EPS of $0.21.

Reported net income for the first nine months of fiscal 2012 was $37.2 million, or 63.2% higher than the prior year's comparable period of $22.8 million. Excluding the amounts mentioned above in each of the respective periods, net income would have been $37.3 million for the first nine months of fiscal 2012, compared to $30.9 million in the prior fiscal year period. Excluding the costs referenced above, earnings per diluted share would have been $0.74 for the first nine months of fiscal 2012 compared to $0.62 in the prior year's nine month period, an increase of 19.4%.

On January 31, 2012, the Company completed the acquisition of fifteen of the seventeen OTC brands it agreed to purchase from GlaxoSmithKline(GSK), previously announced on December 20, 2011. The acquisition of the remaining two brands from GSK is expected to be completed during the first half of the year. The purchase price for the acquisition (inclusive of inventory) was $615 million, subject to a customary post-closing inventory adjustment. On January 31, 2012, to fund the acquisition, the Company completed the financing of additional bond and bank debt of $250 million and $660 million, respectively, the repayment of existing senior secured credit facilities and the payment of related transaction expenses. The acquisition of the GSK brands is the largest in the Company's history and a major step toward its commitment to its long-term OTC strategy.

Matthew M. Mannelly, CEO, commented, “We are pleased with our third quarter results, which reflect the successful execution of our stated strategy of core OTC growth combined with value-added acquisitions. We registered strong growth from our nine core OTC brands, resulting in solid market share gains across these categories. Both the Little Remedies® brand and the PediaCare® brand, which we acquired last year, experienced impressive revenue and share gains for both the quarter and the nine month year over year periods, despite a very soft cough/cold season. In addition, our diversified portfolio of OTC brands and platforms helped offset the headwinds of a tough cough/cold season," he said.

for Prestige, adding two new platforms and four new core brands to our business. They are well-aligned with our operating model, requiring limited incremental overhead, and are highly cash generative. We are confident we can rapidly transition these brands into our portfolio based on our track record of successful integration of previous acquisitions. Prestige's industry-leading Free Cash Flow will help us rapidly delever," he said.

Net revenues for the OTC Healthcare segment in the third quarter of fiscal 2012 were $84.9 million, or 25.9% higher than the prior year third quarter of $67.5 million. The revenue increase in the OTC Healthcare segment was led by strong sales of Little Remedies®, and The Doctor's®. In the third quarter of fiscal 2012, the five legacy core OTC brands increased 3.2% compared to the same period in the prior year and represents the sixth consecutive quarter of organic revenue increases for the Company's five legacy core OTC brands.

Net revenues for the OTC Healthcare segment in the nine month period of fiscal 2012 were $235.3 million, or 44.3% higher than the prior year's comparable period of $163.0 million. The increase in revenues is primarily due to revenues from the acquired Blacksmith brands and Dramamine®, and also to higher revenues from our five legacy core OTC brands, which benefited from increased advertising and promotional expenditures.

Net revenues for the Household Cleaning segment were $21.3 million for the third quarter of fiscal 2012, 7.8% lower than the prior year's comparable quarter of $23.1 million. Net revenues for the Household Cleaning segment were $71.8 million for the first nine months of fiscal 2012, 6.9% lower than the prior year's comparable nine month period of $77.1 million. This segment continues to be impacted by a difficult retail environment for household cleaning products. For both the third fiscal quarter and the nine month periods, lower sales of Comet® cleanser were partially offset by increased demand for Spic and Span®.

Free Cash Flow is a "non-GAAP financial measure" and is presented here because management believes it is a commonly used measure of liquidity, indicative of cash available for debt repayment and acquisitions. Non-GAAP Free Cash Flow is defined and reconciled to GAAP Net Cash Provided by Operating Activities in the section entitled, “About Non-GAAP Financial Measures” below. The Company's Free Cash Flow for the third fiscal quarter ended December 31, 2011 was $14.5 million, a decrease of $4.2 million over the prior year's comparable quarter Free Cash Flow of $18.7 million. The Company's Free Cash Flow for the nine month period of fiscal 2012 was $47.6 million, a decrease of $13.6 million over the prior year comparable nine month period's Free Cash Flow of $61.2 million. The decrease in Free Cash Flow is primarily due to higher working capital usage, largely offset by the increased company performance primarily resulting from the acquisitions of Blacksmith Brands and Dramamine® as well as the growth of the legacy core OTC brands.

The Company will host a conference call to review its third quarter results on February 9, 2012 at 8:30 am EST. The toll-free dial-in numbers are 866-700-7477 within North America and 617-213-8840 outside of North America. The conference pass code is "prestige". The Company will provide a live internet webcast, a slide presentation to accompany the call, as well as an archived replay, all of which can be accessed from the Company's Investor Relations page of http://prestigebrands.com. The slide presentation can be accessed just before the call from the Investor Relations page of the website by clicking on Webcasts and Presentations. Telephonic replays will be available for two weeks following the completion of the call and can be accessed at 888-286-8010 within North America and at 617-801-6888 from outside North America. The pass code is 71452751.

The Company markets and distributes brand name over-the-counter and household cleaning products throughout the U.S., Canada, and certain international markets. Core brands now include Chloraseptic® sore throat treatments, Clear Eyes® eye care products, Compound W® wart treatments, The Doctor's® NightGuard® dental protector, the Little Remedies® and PediaCare® lines of pediatric over-the-counter products, Efferdent® denture care products, Luden's® throat drops, Dramamine® motion sickness treatment, BC® and Goody's® analgesics, Gaviscon® antacid and Beano® gas treatment.

This news release contains "forward-looking statements" within the meaning of the federal securities laws that are intended to qualify for the Safe Harbor from liability established by the Private Securities Litigation Reform Act of 1995. "Forward-looking statements" generally can be identified by the use of forward-looking terminology such as "assumptions," "target," "guidance," "outlook," "plans," "projection," "may," "will," "would," "expect," "intend," "estimate," "anticipate," "believe, "potential," or "continue" (or the negative or other derivatives of each of these terms) or similar terminology. Forward-looking statements in this news release include, without limitation, statements regarding the impact of the acquired GSK brands on our operating results and financial condition, our ability to integrate and develop the brands that we acquired during fiscal year 2011 and 2012, A&P spending, and our outlook and plans for the markets in which we compete, including the severity of the cough/cold season. These statements are based on management's estimates and assumptions with respect to future events and financial performance and are believed to be reasonable, although they are inherently uncertain and difficult to predict. Actual results could differ materially from those expected as a result of a variety of factors. A discussion of factors that could cause results to vary is included in the Company's Annual Report on Form 10-K and other periodic reports filed with the Securities and Exchange Commission.



	Three Months Ended December 31,					Nine Months Ended December 31,
(In thousands, except per share data)	2011			2010		2011			2010
Revenues
Net sales	$	105,799		$	90,077	$	304,678		$	238,086
Other revenues	451			531		2,411			2,061
Total revenues	106,250			90,608		307,089			240,147

Cost of Sales
Cost of sales (exclusive of depreciation shown below)	51,128			46,596		148,193			115,574
Gross profit	55,122			44,012		158,896			124,573

Operating Expenses
Advertising and promotion	15,274			13,049		38,580			28,775
General and administrative	13,655			15,426		32,366			30,941
Depreciation and amortization	2,563			2,513		7,683			7,336
Total operating expenses	31,492			30,988		78,629			67,052

Operating income	23,630			13,024		80,267			57,521

Other (income) expense
Interest income	(1		)	—		(4		)	—
Interest expense	8,117			7,674		24,977			18,508
Gain on settlement	—			—		(5,063		)	—
Loss on extinguishment of debt	—			—		—			300
Total other expense	8,116			7,674		19,910			18,808

Income from continuing operations before income taxes	15,514			5,350		60,357			38,713
Provision for income taxes	6,004			3,204		23,130			15,948
Income from continuing operations	9,510			2,146		37,227			22,765

Discontinued Operations
Income from discontinued operations, net of income tax	—			32		—			591
Loss on sale of discontinued operations, net of income tax	—			—		—			(550		)
Net income	$	9,510		$	2,178	$	37,227		$	22,806

Basic earnings per share:
Income from continuing operations	$	0.19		$	0.04	$	0.74		$	0.46
Income from discontinued operations and loss on sale of discontinued operations	—			—		—			—
Net income	$	0.19		$	0.04	$	0.74		$	0.46

Diluted earnings per share:
Income from continuing operations	$	0.19		$	0.04	$	0.73		$	0.45
Income from discontinued operations and loss on sale of discontinued operations	—			—		—			—
Net income	$	0.19		$	0.04	$	0.73		$	0.45

Weighted average shares outstanding:
Basic	50,307			50,085		50,256			50,059
Diluted	50,684			50,533		50,667			50,260



(In thousands) Assets	December 31, 2011			March 31, 2011
Current assets
Cash and cash equivalents	$	4,439		$	13,334
Accounts receivable, net	50,163			44,393
Inventories	43,579			39,751
Deferred income tax assets	5,540			5,292
Prepaid expenses and other current assets	2,162			4,812
Total current assets	105,883			107,582

Property and equipment, net	1,238			1,444
Goodwill	153,696			154,896
Intangible assets, net	779,242			786,361
Other long-term assets	5,788			6,635

Total Assets	$	1,045,847		$	1,056,918

Liabilities and Stockholders' Equity
Current liabilities
Accounts payable	$	23,977		$	21,615
Accrued interest payable	5,181			10,313
Other accrued liabilities	23,905			22,280
Total current liabilities	53,063			54,208

Long-term debt
Principal amount	434,000			492,000
Less unamortized discount	(4,368		)	(5,055		)
Long-term debt, net of unamortized discount	429,632			486,945

Deferred income tax liabilities	161,502			153,933

Total Liabilities	644,197			695,086


Stockholders' Equity
Preferred stock - $0.01 par value
Authorized - 5,000 shares
Issued and outstanding - None	—			—
Common stock - $0.01 par value
Authorized - 250,000 shares
Issued - 50,433 shares at December 31, 2011 and 50,276 shares at March 31, 2011	504			503
Additional paid-in capital	390,863			387,932
Treasury stock, at cost - 181 shares at December 31, 2011 and 160 shares at March 31, 2011	(687		)	(416		)
Accumulated other comprehensive loss, net of tax	(70		)	—
Retained earnings (accumulated deficit)	11,040			(26,187		)
Total Stockholders' Equity	401,650			361,832

Total Liabilities and Stockholders' Equity	$	1,045,847		$	1,056,918



	Nine Months Ended December 31,
(In thousands)	2011			2010
Operating Activities
Net income	$	37,227		$	22,806
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	7,683			7,565
Loss on sale of discontinued operations	—			890
Deferred income taxes	7,321			5,591
Amortization of deferred financing costs	847			767
Stock-based compensation costs	2,360			2,751
Loss on extinguishment of debt	—			300
Amortization of debt discount	687			480
Loss on disposal of equipment	—			131
Changes in operating assets and liabilities
Accounts receivable	(5,816		)	7,330
Inventories	(3,850		)	2,814
Inventories held for sale	—			1,114
Prepaid expenses and other current assets	2,650			3,166
Accounts payable	2,392			(1,054		)
Accrued liabilities	(3,508		)	7,008
Net cash provided by operating activities	47,993			61,659

Investing Activities
Purchases of equipment	(358		)	(405		)
Proceeds from sale of discontinued operations	—			4,122
Acquisition of Blacksmith, net of cash acquired	—			(202,044		)
Proceeds from escrow of Blacksmith acquisition	1,200			—
Net cash provided by (used in) investing activities	842			(198,327		)

Financing Activities
Proceeds from issuance of Senior Notes	—			100,250
Proceeds from issuance of Senior Term Loan	—			112,936
Payment of deferred financing costs	—			(648		)
Repayment of long-term debt	(58,000		)	(33,587		)
Proceeds from exercise of stock options	572			150
Shares surrendered as payment of tax withholding	(271		)	(264		)
Net cash (used in) provided by financing activities	(57,699		)	178,837

Effects of exchange rate changes on cash and cash equivalents	(31		)	—
(Decrease) increase in cash and cash equivalents	(8,895		)	42,169
Cash and cash equivalents - beginning of period	13,334			41,097

Cash and cash equivalents - end of period	$	4,439		$	83,266

Interest paid	$	28,503		$	13,354
Income taxes paid	$	12,699		$	4,096



	Three Months Ended December 31, 2011
	OTC Healthcare		Household Cleaning		Consolidated
(In thousands)
Net sales	$	84,711	$	21,088	$	105,799
Other revenues	195		256		451
Total revenues	84,906		21,344		106,250
Cost of sales	35,329		15,799		51,128
Gross profit	49,577		5,545		55,122
Advertising and promotion	14,170		1,104		15,274
Contribution margin	$	35,407	$	4,441	39,848
Other operating expenses					16,218
Operating income					23,630
Other expense					8,116
Provision for income taxes					6,004
Income from continuing operations					9,510
Income from discontinued operations, net of income tax					—
Loss on sale of discontinued operations, net of income tax					—
Net income					$	9,510



	Three Months Ended December 31, 2010
	OTC Healthcare		Household Cleaning		Consolidated
(In thousands)
Net sales	$	67,287	$	22,790	$	90,077
Other revenues	173		358		531
Total revenues	67,460		23,148		90,608
Cost of sales	30,827		15,769		46,596
Gross profit	36,633		7,379		44,012
Advertising and promotion	11,842		1,207		13,049
Contribution margin	$	24,791	$	6,172	30,963
Other operating expenses					17,939
Operating income					13,024
Other expense					7,674
Provision for income taxes					3,204
Income from continuing operations					2,146
Income from discontinued operations, net of income tax					32
Loss on sale of discontinued operations, net of income tax					—
Net income					$	2,178



	Nine Months Ended December 31, 2011
	OTC Healthcare		Household Cleaning		Consolidated
(In thousands)
Net sales	$	234,712	$	69,966	$	304,678
Other revenues	552		1,859		2,411
Total revenues	235,264		71,825		307,089
Cost of sales	97,198		50,995		148,193
Gross profit	138,066		20,830		158,896
Advertising and promotion	34,746		3,834		38,580
Contribution margin	$	103,320	$	16,996	120,316
Other operating expenses					40,049
Operating income					80,267
Other expense					19,910
Provision for income taxes					23,130
Income from continuing operations					37,227
Income from discontinued operations, net of income tax					—
Loss on sale of discontinued operations, net of income tax					—
Net income					$	37,227



	Nine Months Ended December 31, 2010
	OTC Healthcare		Household Cleaning		Consolidated
(In thousands)
Net sales	$	162,652	$	75,434	$	238,086
Other revenues	368		1,693		2,061
Total revenues	163,020		77,127		240,147
Cost of sales	64,477		51,097		115,574
Gross profit	98,543		26,030		124,573
Advertising and promotion	23,918		4,857		28,775
Contribution margin	$	74,625	$	21,173	95,798
Other operating expenses					38,277
Operating income					57,521
Other expense					18,808
Provision for income taxes					15,948
Income from continuing operations					22,765
Income from discontinued operations, net of income tax					591
Loss on sale of discontinued operations, net of income tax					(550		)
Net income					$	22,806

We define Non-GAAP EBITDA as earnings before interest expense (income), income taxes, depreciation and amortization, income or loss from discontinued operations or the sale thereof and Non-GAAP Adjusted EBITDA as earnings before interest expense (income), income taxes, depreciation and amortization, income or loss from discontinued operations and the sale thereof, gain on settlement, certain other legal and professional fees and acquisition-related costs. We define Non-GAAP Adjusted Income from Continuing Operations as Income from Continuing Operations before incremental interest expense to finance future acquisitions, gain on settlement, certain other legal and professional fees, acquisition-related costs, the applicable tax impacts associated with these items and the tax impacts of state tax rate adjustments and other non-deductible items. We define Non-GAAP Adjusted Net Income as Net Income before gain on settlement, certain other legal and professional fees, acquisition-related costs, income or loss from discontinued operations and the sale thereof, loss on extinguishment of debt, the applicable tax impacts associated with these items and the tax impacts of state tax rate adjustments and other non-deductible items. We define Non-GAAP Free Cash Flow as net cash provided by operating activities less cash paid for capital expenditures. Non-GAAP EBITDA, Non-GAAP Adjusted EBITDA, Non-GAAP Adjusted Net Income and Non-GAAP Free Cash Flow may not be comparable to similarly titled measures reported by other companies.

We are presenting Non-GAAP EBITDA, Non-GAAP Adjusted EBITDA, Non-GAAP Adjusted Income from Continuing Operations, Non-GAAP Adjusted Net Income and Non-GAAP Free Cash Flow because they provide a additional ways to view our operations, when considered with both our GAAP results and the reconciliation to net income and net cash provided by operating activities, respectively, which we believe provide a more complete understanding of our business than could be obtained absent this disclosure. Each of Non-GAAP EBITDA, Non-GAAP Adjusted EBITDA, Non-GAAP Adjusted Income from Continuing Operations, Non-GAAP Adjusted Net Income and Non-GAAP Free Cash Flow is presented solely as a supplemental disclosure because: (i) we believe it is a useful tool for investors to assess the operating performance of the business without the effect of these items; (ii) we believe that investors will find this data useful in assessing our ability to pursue acquisitions or service or incur indebtedness; and (iii) we use Non-GAAP EBITDA/Non-GAAP Adjusted EBITDA and Non-GAAP Adjusted Net Income internally to evaluate the performance of our personnel and also as a benchmark to evaluate our operating performance or compare our performance to that of our competitors. The use of Non-GAAP EBITDA, Non-GAAP Adjusted EBITDA, Non-GAAP Adjusted Income from Continuing Operations, Non-GAAP Adjusted Net Income and Non-GAAP Free Cash Flow has limitations and you should not consider these measures in isolation from or as an alternative to GAAP measures such as operating income, income from continuing operations, net income, and net cash flow provided by operating activities, or cash flow statement data prepared in accordance with GAAP, or as a measure of profitability or liquidity.

The following tables set forth the reconciliation of Non-GAAP EBITDA, Non-GAAP Adjusted EBITDA, Non-GAAP Adjusted Income from Continuing Operations, Non-GAAP Adjusted Net Income and Non-GAAP Free Cash Flow, all of which are non-GAAP financial measures, to GAAP net income and GAAP net cash provided by operating activities, respectively, our most directly comparable financial measures presented in accordance with GAAP.



	Three Months Ended December 31,
	2011		2010
(In thousands)
GAAP Net Income	$	9,510	$	2,178
Income from discontinued operations	—		(32		)
Interest Expense, net	8,116		7,674
Income tax provision	6,004		3,204
Depreciation and amortization	2,563		2,513
Non-GAAP EBITDA:	26,193		15,537
Adjustments:
Inventory step-up charges associated with acquisitions	—		3,544
Legal and professional fees associated with acquisitions	4,890		6,927
Total adjustments	4,890		10,471
Non-GAAP Adjusted EBITDA	$	31,083	$	26,008



	Nine Months Ended December 31,
	2011			2010
(In thousands)
GAAP Net Income	$	37,227		$	22,806
Income from discontinued operations	—			(591		)
Loss on sale of discontinued operations	—			550
Interest Expense, net	24,973			18,508
Income tax provision	23,130			15,948
Depreciation and amortization	7,683			7,336
Non-GAAP EBITDA:	93,013			64,557
Adjustments:
Gain on settlement	(5,063		)	—
Inventory step-up charges associated with acquisitions	—			3,544
Legal and professional fees associated with acquisitions	5,665			6,927
Loss on extinguishment of debt	—			300
Total adjustments	602			10,771
Non-GAAP Adjusted EBITDA	$	93,615		$	75,328



	Three Months Ended December 31,
	2011			2010
(In thousands)
GAAP Income from Continuing Operations	$	9,510		$	2,146
Adjustments:
Incremental interest expense to finance Dramamine	—			800
Inventory step-up charges associated with acquisitions	—			3,544
Acquisition related costs	4,890			6,927
Tax impact of adjustments	(1,892		)	(3,119		)
Total adjustments	2,998			8,152
Non-GAAP Adjusted Income from Continuing Operations	$	12,508		$	10,298



	Nine Months Ended December 31,
	2011			2010
(In thousands)
GAAP Income from Continuing Operations	$	37,227		$	22,765
Adjustments:
Incremental interest expense to finance Dramamine	—			800
Inventory step-up charges associated with acquisitions	—			3,544
Gain on settlement	(5,063		)	—
Acquisition related costs	5,665			6,927
Tax impact of adjustments	(275		)	(3,119		)
Tax impact of state rate adjustments and other non-deductible items	(237		)	—
Total adjustments	90			8,152
Non-GAAP Adjusted Income from Continuing Operations	$	37,317		$	30,917



	Three Months Ended December 31,
	2011			2011 Diluted EPS			2010			2010 Diluted EPS
(In thousands)
GAAP Net Income	$	9,510		$	0.19		$	2,178		$	0.04
Adjustments:
Income from discontinued operations	—			—			(32		)	—
Incremental interest expense to finance Dramamine	—			—			800			0.02
Inventory step-up charge associated with acquisitions	—			—			3,544			0.07
Legal and professional fees associated with acquisitions	4,890			0.10			6,927			0.14
Tax impact of adjustments	(1,892		)	(0.04		)	(3,119		)	(0.06		)
Total adjustments	2,998			0.06			8,120			0.17
Non-GAAP Adjusted Net Income and Adjusted EPS	$	12,508		$	0.25		$	10,298		$	0.21



	Nine Months Ended December 31,
	2011			2011 Diluted EPS			2010			2010 Diluted EPS
(In thousands)
GAAP Net Income	$	37,227		$	0.73		$	22,806		$	0.45
Adjustments:
Income from discontinued operations	—			—			(591		)	(0.01		)
Loss on sale of discontinued operations	—			—			550			0.01
Gain on settlement	(5,063		)	(0.10		)	—			—
Incremental interest expense to finance Dramamine	—			—			800			0.02
Inventory step-up charge associated with acquisitions	—			—			3,544			0.07
Legal and professional fees associated with acquisitions	5,665			0.11			6,927			0.14
Tax impact of adjustments	(275		)	—			(3,119		)	(0.06		)
Tax impact of state rate adjustments and other non-deductible items	(237		)	—			—			—
Total adjustments	90			0.01			8,111			0.17
Non-GAAP Adjusted Net Income and Adjusted EPS	$	37,317		$	0.74		$	30,917		$	0.62



	Three Months Ended December 31,
	2011			2010
(In thousands)
GAAP Net cash provided by operating activities	$	14,527		$	18,842
Additions to property and equipment for cash	(51		)	(151		)
Non-GAAP Free Cash Flow	$	14,476		$	18,691