EX-99.1 2 exhibit991fy13-q3earningsr.htm PRESS RELEASE Exhibit 99.1 FY13-Q3 Earnings Release Exhibit


Exhibit 99.1


Prestige Brands Holdings, Inc. Reports 50.8% Revenue Increase & Record Earnings for Third Quarter of Fiscal 2013; Year-To-Date Revenues Increase 52.8%

Full Year F'13 EPS Guidance Increased


Tarrytown, NY-(Business Wire) February 7, 2013-Prestige Brands Holdings, Inc. today announced results for the third fiscal quarter ended December 31, 2012, including revenues of $160.2 million, an increase of 50.8% over the prior year comparable period's revenues of $106.3 million. Revenues for the nine month period ended December 31, 2012 totaled $469.1 million, an increase of 52.8% over the prior year nine month period's revenues of $307.1 million. The third quarter and year-to-date growth was driven by the Company's core over-the-counter (OTC) Healthcare brands and revenue from the Company's acquisition of a portfolio of 17 OTC brands from GlaxoSmithKline (GSK), which was completed on January 31, 2012.

In addition to financial results reported in accordance with generally accepted accounting principles (GAAP), we have provided certain non-GAAP financial information to aid investors in understanding the Company's performance. Each non-GAAP financial measure is defined and reconciled to its most closely related GAAP financial measure in the “About Non-GAAP Financial Measures” section at the end of this earnings release.

Reported net income for the third fiscal quarter was $12.3 million, or $0.24 per diluted share, versus $9.5 million, or $0.19 per diluted share, in the prior year comparable period, an increase of 28.9% in reported net income and 26.3% in diluted earnings per share. Adjusted net income and adjusted earnings per share for the third fiscal quarter increased 53.9% and 48.0%, respectively to $19.3 million, or $0.37 per diluted share, for the quarter ended December 31, 2012 compared to $12.5 million, or $0.25 per diluted share, in the prior year comparable period. The fiscal third quarter's adjusted net income excludes integration and transition expenses related to the brands acquired from GSK totaling $2.3 million net of taxes, or $0.04 per diluted share. In addition, this adjustment included increased non-cash amortization of deferred financing costs of $4.7 million net of taxes, or $0.09 per diluted share, related to the Company's accelerated reduction in its term loan, including payments of $82.5 million during the quarter. The prior year third quarter's adjusted net income excluded the net impact of $3.0 million of costs related to the brands acquired from GSK.






Reported net income for the first nine months of fiscal 2013 was $46.2 million, or 24.0% higher than the prior year comparable period's results of $37.2 million. For the first nine months of fiscal 2013, adjusted net income increased 56.8% to $58.5 million, or $1.14 per diluted share, a $21.2 million increase, compared to $37.3 million, or $0.74 per diluted share, in the prior year's comparable period. The current year's adjusted net income for the nine month period excludes expenses related to integration and transition expenses of the brands acquired from GSK and other costs totaling $7.6 million net of taxes, or $0.15 per diluted share, as well as increased non-cash amortization of deferred financing costs of $4.7 million net of taxes, or $.09 per diluted share. The prior year's comparable nine month period excluded the impact of $3.0 million of costs primarily related to the brands acquired from GSK, which was largely offset by a net gain associated with a legal settlement, and other net costs totaling approximately $2.9 million, or a net impact of $0.01 per diluted share.

Reported gross profit for the third fiscal quarter was $85.0 million, an increase of $29.9 million, or 54.2%, over the prior year's comparable quarter of $55.1 million. Adjusted gross margin for the third fiscal quarter was $88.8 million and 55.4% of revenues, in line with expectations, reflecting the seasonal impact of cough/cold products' promotional and merchandising activity during the quarter. This compares to $55.1 million and 51.9% of revenues in the prior year's comparable period. The current year period excludes integration and transition costs of $3.8 million related to the brands acquired from GSK. The year-over-year increase in adjusted gross margin is primarily a result of the increase in revenues and the impact of the GSK acquired brands.

Revenue Review

Revenues for the OTC Healthcare segment were $139.0 million, 63.7% higher than the prior year's third quarter results of $84.9 million. The increase in revenues in the OTC segment was a result of the increased marketing and advertising support behind the Company's core OTC brands. Among the brands which reported consumption gains were BC® and Goody's®, PediaCare®, Dramamine®, The Doctors®, Little Remedies®, Clear Eyes® and Chloraseptic®. For the nine month period, net revenues for the OTC segment were $403.2 million, 71.4% higher than the prior year comparable period's results of $235.3 million. Revenues for the Household Cleaning segment, which represents approximately 13% of corporate revenues and 7% of brand contribution, were $21.2 million for the third fiscal quarter, approximately even with the prior year comparable period's results of $21.3 million. Year-to-date revenues for the Household Cleaning segment were $65.9 million, an 8.2% decrease over the prior year comparable nine month period's results of $71.8 million.






Commentary and Outlook

“The health of our core OTC brands, well-executed advertising and promotional initiatives, and the strength of our balance sheet all contributed to the success of our third quarter and nine month results,” said Matthew M. Mannelly, CEO. “We delivered record third quarter revenues, backed by solid performance in our core OTC brands. Cash flow from operations was a record $40.5 million this quarter, resulting from strong brand sales to retailers and excellent consumer takeaway in the marketplace. Our industry-leading and consistent cash flow from operations combined with a solid balance sheet helped us de-lever substantially in the third quarter, paying debt down by $82.5 million and continuing to build acquisition capacity,” he said. “Our strong year-to-date performance gives us confidence to increase both our earnings guidance as well as our guidance for cash provided by operating activities for the full fiscal year. We are raising our Adjusted EPS guidance for fiscal 2013 to $1.45-$1.48 per share from $1.37-$1.42. Cash flow from operations, which reached a record $100.9 million year-to-date, is now projected to be approximately $120-$125 million, up from the previously announced $110 million.”

“In addition, the Company plans to refinance its existing term loans to the more favorable interest rates now available to enhance our already solid balance sheet and financial profile,” Mr. Mannelly said. “The transaction is expected to close by mid February assuming current market conditions prevail.”

Free Cash Flow and Debt Reduction
The Company's record free cash flow for the third fiscal quarter ended December 31, 2012 was $36.8 million, an increase of $22.3 million over the prior year comparable period's free cash flow of $14.5 million. For the nine month period ended December 31, 2012, free cash flow totaled $92.0 million compared to $47.6 million in the prior year's comparable period. On a per share basis, free cash flow for the nine month period ended December 31, 2012 translates to $1.79 per share and an estimated $2.15-$2.24 per share for the full fiscal year.

The Company's net debt at December 31, 2012 was $997.1 million, reflecting a reduction of a total of $63.9 million during the quarter. This consisted of approximately $42 million of cash flow from operations and approximately $22 million of proceeds realized from the previously announced divestiture of Phazyme® gas treatment, a non-core OTC product acquired as part of the GSK brands acquisition. At December 31, 2012, the Company's covenant-defined leverage ratio was approximately 4.35, down from approximately 5.25 at the time of the closing on the acquisition of the GSK brands on January 31, 2012.






Q3 Conference Call & Accompanying Slide Presentation
The Company will host a conference call to review its third quarter results on February 7, 2013 at 8:30 am EDT. The toll-free dial-in numbers are 866-578-5788 within North America and 617-213-8057 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 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 31315331.

About Prestige Brands Holdings, Inc.
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 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® pain relievers, Beano® gas prevention, Debrox® earwax remover, and Gaviscon® antacid in Canada.

Note Regarding Forward-Looking Statements
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. The "forward-looking statements" include, without limitation, statements regarding our outlook and expected financial results, including earnings per share, cash flow from operations and free cash flow, our plans to refinance our term loans to lower interest rates and our acquisition capacity. These statements are based on management's estimates and assumptions with respect to future events and financial performance and are believed to be reasonable, though are inherently uncertain and difficult to predict. Actual results could





differ materially from those expected as a result of a variety of factors, including the progress of the GSK intergation, the impact of our advertising and promotional initiatives, the severity of the cough and cold season and changes in interest rates available in the market. A discussion of other 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.
Contact: Dean Siegal
914-524-6819








Prestige Brands Holdings, Inc.
Consolidated Statements of Income and Comprehensive Income
(Unaudited)
 
 
Three Months Ended December 31,
 
Nine Months Ended December 31,
(In thousands, except per share data)
 
2012
 
2011
 
2012
 
2011
Revenues
 
 
 
 
 
 
 
 
Net sales
 
$
159,492

 
$
105,799

 
$
466,735

 
$
304,678

Other revenues
 
740

 
451

 
2,349

 
2,411

Total revenues
 
160,232

 
106,250

 
469,084

 
307,089

 
 
 
 
 
 
 
 
 
Cost of Sales
 
 

 
 

 
 

 
 

Cost of sales (exclusive of depreciation shown below)
 
75,235

 
51,128

 
209,938

 
148,193

Gross profit
 
84,997

 
55,122

 
259,146

 
158,896

 
 
 
 
 
 
 
 
 
Operating Expenses
 
 

 
 

 
 

 
 

Advertising and promotion
 
23,538

 
15,274

 
67,371

 
38,580

General and administrative
 
11,378

 
13,655

 
40,114

 
32,366

Depreciation and amortization
 
3,359

 
2,563

 
9,950

 
7,683

Total operating expenses
 
38,275

 
31,492

 
117,435

 
78,629

Operating income
 
46,722

 
23,630

 
141,711

 
80,267

 
 
 
 
 
 
 
 
 
Other (income) expense
 
 

 
 

 
 

 
 

Interest income
 
(4
)
 
(1
)
 
(9
)
 
(4
)
Interest expense
 
26,665

 
8,117

 
66,178

 
24,977

Gain on settlement
 

 

 

 
(5,063
)
Total other expense
 
26,661

 
8,116

 
66,169

 
19,910

Income before income taxes
 
20,061

 
15,514

 
75,542

 
60,357

Provision for income taxes
 
7,804

 
6,004

 
29,386

 
23,130

Net income
 
$
12,257

 
$
9,510

 
$
46,156

 
$
37,227

 
 
 
 
 
 
 
 
 
Earnings per share:
 
 

 
 

 
 

 
 

Basic
 
$
0.24

 
$
0.19

 
$
0.91

 
$
0.74

Diluted
 
$
0.24

 
$
0.19

 
$
0.90

 
$
0.73

 
 
 
 
 
 
 
 
 
Weighted average shares outstanding:
 
 

 
 

 
 

 
 

Basic
 
50,686

 
50,307

 
50,465

 
50,256

Diluted
 
51,523

 
50,684

 
51,285

 
50,667

 
 
 
 
 
 
 
 
 
Comprehensive income, net of tax:
 
 
 
 
 
 
 
 
Currency translation adjustments
 
(1
)
 
(18
)
 
23

 
(70
)
Total other comprehensive income (loss)
 
(1
)
 
(18
)
 
23

 
(70
)
Comprehensive income
 
$
12,256

 
$
9,492

 
$
46,179

 
$
37,157












Prestige Brands Holdings, Inc.
Consolidated Balance Sheets
(Unaudited)

(In thousands)
Assets
December 31,
2012
 
March 31,
2012
Current assets
 
 
 
Cash and cash equivalents
$
10,431

 
$
19,015

Accounts receivable, net
73,752

 
60,228

Inventories
54,250

 
51,113

Deferred income tax assets
6,594

 
5,283

Prepaid expenses and other current assets
6,195

 
11,396

Total current assets
151,222

 
147,035

 
 
 
 
Property and equipment, net
9,190

 
1,304

Goodwill
167,546

 
173,702

Intangible assets, net
1,375,938

 
1,400,522

Other long-term assets
27,493

 
35,713

Total Assets
$
1,731,389

 
$
1,758,276

 
 
 
 
Liabilities and Stockholders' Equity
 

 
 

Current liabilities
 

 
 

Accounts payable
$
40,858

 
$
26,726

Accrued interest payable
13,620

 
13,889

Other accrued liabilities
34,272

 
23,308

Total current liabilities
88,750

 
63,923

 
 
 
 
Long-term debt
 
 
 
Principal amount
1,007,500

 
1,135,000

Less unamortized discount
(7,200
)
 
(11,092
)
Long-term debt, net of unamortized discount
1,000,300

 
1,123,908

 
 
 
 
Deferred income tax liabilities
185,007

 
167,717

Total Liabilities
1,274,057

 
1,355,548

 
 
 
 
 
 
 
 
Stockholders' Equity
 

 
 

Preferred stock - $0.01 par value
 

 
 

Authorized - 5,000 shares
 

 
 

Issued and outstanding - None

 

Preferred share rights
283

 
283

Common stock - $0.01 par value
 

 
 

Authorized - 250,000 shares
 

 
 

Issued - 51,201 shares at December 31, 2012 and 50,466 shares at March 31, 2012
512

 
505

Additional paid-in capital
400,316

 
391,898

Treasury stock, at cost - 181 shares at December 31, 2012 and March 31, 2012
(687
)
 
(687
)
Accumulated other comprehensive income (loss), net of tax
10

 
(13
)
Retained earnings
56,898

 
10,742

Total Stockholders' Equity
457,332

 
402,728

Total Liabilities and Stockholders' Equity
$
1,731,389

 
$
1,758,276












Prestige Brands Holdings, Inc.
Consolidated Statements of Cash Flows
(Unaudited)
 
Nine Months Ended December 31,
(In thousands)
2012
 
2011
Operating Activities
 
 
 
Net income
$
46,156

 
$
37,227

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
Depreciation and amortization
9,950

 
7,683

Deferred income taxes
15,979

 
7,321

Amortization of deferred financing costs
8,220

 
847

Stock-based compensation costs
2,965

 
2,360

Amortization of debt discount
3,892

 
687

Lease termination costs
975

 

Loss on disposal of equipment
51

 

Changes in operating assets and liabilities, net of effects of acquisitions
 
 
 
Accounts receivable
(13,518
)
 
(5,816
)
Inventories
(3,351
)
 
(3,850
)
Prepaid expenses and other current assets
5,801

 
2,650

Accounts payable
14,125

 
2,392

Accrued liabilities
9,631

 
(3,508
)
Net cash provided by operating activities
100,876

 
47,993

 
 
 
 
Investing Activities
 

 
 

Purchases of property and equipment
(8,922
)
 
(358
)
Proceeds from escrow of Blacksmith acquisition

 
1,200

Proceeds from the sale of property and equipment
15

 

Proceeds from the sale of the Phazyme brand
21,700

 

Acquisition of brands from GSK purchase price adjustments
(226
)
 

Net cash provided by investing activities
12,567

 
842

 
 
 
 
Financing Activities
 

 
 

Repayments of long-term debt
(167,500
)
 
(58,000
)
Repayments under revolving credit agreement
(8,000
)
 

Borrowings under revolving credit agreement
48,000

 

Proceeds from exercise of stock options
5,460

 
572

Shares surrendered as payment of tax withholding

 
(271
)
Net cash used in financing activities
(122,040
)
 
(57,699
)
 
 
 
 
Effects of exchange rate changes on cash and cash equivalents
13

 
(31
)
Decrease in cash and cash equivalents
(8,584
)
 
(8,895
)
Cash and cash equivalents - beginning of period
19,015

 
13,334

Cash and cash equivalents - end of period
$
10,431

 
$
4,439

 
 
 
 
Interest paid
$
54,149

 
$
28,503

Income taxes paid
$
7,183

 
$
12,699






Prestige Brands Holdings, Inc.
Consolidated Statements of Income
Business Segments
(Unaudited)

 
Three Months Ended December 31, 2012
 
Nine Months Ended December 31, 2012
 
OTC
Healthcare
 
Household
Cleaning
 
Consolidated
 
OTC
Healthcare
 
Household
Cleaning
 
Consolidated
(In thousands)
 
 
 
 
 
 
 
 
 
 
 
Net sales
$
138,858

 
$
20,634

 
$
159,492

 
$
402,633

 
$
64,102

 
$
466,735

Other revenues
175

 
565

 
740

 
520

 
1,829

 
2,349

Total revenues
139,033

 
21,199

 
160,232

 
403,153

 
65,931

 
469,084

Cost of sales
59,381

 
15,854

 
75,235

 
160,249

 
49,689

 
209,938

Gross profit
79,652

 
5,345

 
84,997

 
242,904

 
16,242

 
259,146

Advertising and promotion
22,410

 
1,128

 
23,538

 
62,309

 
5,062

 
67,371

Contribution margin
$
57,242

 
$
4,217

 
61,459

 
$
180,595

 
$
11,180

 
191,775

Other operating expenses
 

 
 

 
14,737

 
 
 
 
 
50,064

Operating income
 

 
 

 
46,722

 
 
 
 
 
141,711

Other expense
 

 
 

 
26,661

 
 
 
 
 
66,169

Income before income taxes
 
 
 
 
20,061

 
 
 
 
 
75,542

Provision for income taxes
 

 
 

 
7,804

 
 
 
 
 
29,386

Net income
 

 
 

 
$
12,257

 
 
 
 
 
$
46,156



 
Three Months Ended December 31, 2011
 
Nine Months Ended December 31, 2011
 
OTC
Healthcare
 
Household
Cleaning
 
Consolidated
 
OTC
Healthcare
 
Household
Cleaning
 
Consolidated
(In thousands)
 
 
 
 
 
 
 
 
 
 
 
Net sales
$
84,711

 
$
21,088

 
$
105,799

 
$
234,712

 
$
69,966

 
$
304,678

Other revenues
195

 
256

 
451

 
552

 
1,859

 
2,411

Total revenues
84,906

 
21,344

 
106,250

 
235,264

 
71,825

 
307,089

Cost of sales
35,329

 
15,799

 
51,128

 
97,198

 
50,995

 
148,193

Gross profit
49,577

 
5,545

 
55,122

 
138,066

 
20,830

 
158,896

Advertising and promotion
14,170

 
1,104

 
15,274

 
34,746

 
3,834

 
38,580

Contribution margin
$
35,407

 
$
4,441

 
39,848

 
$
103,320

 
$
16,996

 
120,316

Other operating expenses
 

 
 

 
16,218

 
 
 
 
 
40,049

Operating income
 

 
 

 
23,630

 
 
 
 
 
80,267

Other expense
 

 
 

 
8,116

 
 
 
 
 
19,910

Income before income taxes
 
 
 
 
15,514

 
 
 
 
 
60,357

Provision for income taxes
 

 
 

 
6,004

 
 
 
 
 
23,130

Net income
 

 
 

 
$
9,510

 
 
 
 
 
$
37,227








About Non-GAAP Financial Measures
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, loss on extinguishment of debt, certain other legal and professional fees and acquisition-related costs. We define Non-GAAP Adjusted Gross Margin as Gross Profit before certain acquisition and integration-related costs. We define Non-GAAP Adjusted Operating Income as Operating Income before certain other legal and professional fees, acquisition and integration-related costs. We define Non-GAAP Adjusted Net Income as Net Income before gain on settlement, loss on extinguishment of debt, certain other legal and professional fees, acquisition and integration-related costs, income or loss from discontinued operations and the sale thereof, the applicable tax impacts associated with these items and the tax impacts of state tax rate adjustments and other non-deductible items. Non-GAAP Adjusted EPS is calculated based on Non-GAAP Adjusted Net Income, divided by the weighted average number of common and potential common shares outstanding during the period. We define Non-GAAP Free Cash Flow as Net cash provided by operating activities less cash paid for capital expenditures. Non-GAAP Free Cash Flow per Share is calculated based on Non-GAAP Free Cash Flow, divided by the weighted average number of common and potential common shares outstanding during the period. Non-GAAP EBITDA, Non-GAAP Adjusted EBITDA, Non-GAAP Adjusted Operating Income, Non-GAAP Adjusted Net Income, Non-GAAP Adjusted EPS, Non-GAAP Free Cash Flow and Non-GAAP Free Cash Flow per Share 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 Gross Margin, Non-GAAP Adjusted Operating Income, Non-GAAP Adjusted Net Income, Non-GAAP Adjusted EPS, Non-GAAP Free Cash Flow and Non-GAAP Free Cash Flow per Share because they provide 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. Additionally, we believe that Free Cash Flow and Free Cash Flow per Share are commonly used measures of liquidity and are indicative of cash available for debt repayment and acquisitions. Each of Non-GAAP EBITDA, Non-GAAP Adjusted EBITDA, Non-GAAP Adjusted Gross Margin, Non-GAAP Adjusted Operating Income, Non-GAAP Adjusted Net Income, Non-GAAP Adjusted EPS, Non-GAAP Free Cash Flow and Non-GAAP Free Cash Flow per Share 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 to service or incur indebtedness; and (iii) we use Non-GAAP EBITDA, Non-GAAP Adjusted EBITDA, Non-GAAP Adjusted Gross Margin, Non-GAAP Adjusted Operating Income, Non-GAAP Adjusted Net Income and Non-GAAP Adjusted EPS 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 Gross Margin, Non-GAAP Adjusted Operating Income, Non-GAAP Adjusted Net Income, Non-GAAP Adjusted EPS, Non-GAAP Free Cash Flow and Non-GAAP Free Cash Flow per Share has limitations and you should not consider these measures in isolation from or as an alternative to GAAP measures such as Operating income, 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 Gross Margin, Non-GAAP Adjusted Operating Income, Non-GAAP Adjusted Net Income, Non-GAAP Adjusted EPS, Non-GAAP Free Cash Flow and Non-GAAP Free Cash Flow per Share, all of which are non-GAAP financial measures, to GAAP Gross Profit, GAAP Operating Income, GAAP Net Income, GAAP Diluted EPS and GAAP Net cash provided by operating activities, our most directly comparable financial measures presented in accordance with GAAP.

Reconciliation of GAAP Gross Margin to Non-GAAP Adjusted Gross Margin:
 
Three Months Ended December 31,
 
Nine Months Ended December 31,
 
2012
 
2011
 
2012
 
2011
(In thousands)
 
 
 
 
 
 
 
GAAP Total Revenues
$
160,232

 
$
106,250

 
$
469,084

 
$
307,089

Adjustments:
 
 
 
 
 
 
 
Additional slotting costs associated with GSK

 

 
411

 

Total adjustments

 

 
411

 

Non-GAAP Adjusted Total Revenues
$
160,232

 
$
106,250

 
$
469,495

 
$
307,089

 
 
 
 
 
 
 
 
GAAP Gross Profit
$
84,997

 
$
55,122

 
$
259,146

 
$
158,896

Adjustments:
 
 
 
 
 
 
 
Additional slotting costs associated with GSK

 

 
411

 

Inventory step-up charge associated with acquisitions

 

 
23

 

Additional product testing costs associated with GSK

 

 
220

 

Additional supplier transition costs associated with GSK
3,765

 

 
5,426

 

Total adjustments
3,765

 

 
6,080

 

Non-GAAP Adjusted Gross Margin
$
88,762

 
$
55,122

 
$
265,226

 
$
158,896

Non-GAAP Adjusted Gross Margin %
55.4
%
 
51.9
%
 
56.5
%
 
51.7
%


Reconciliation of GAAP Operating Income to Non-GAAP Adjusted Operating Income:
 
Three Months Ended December 31,
 
Nine Months Ended December 31,
 
2012
 
2011
 
2012
 
2011
(In thousands)
 
 
 
 
 
 
 
GAAP Operating Income
$
46,722

 
$
23,630

 
$
141,711

 
$
80,267

Adjustments:
 
 
 
 
 
 
 
Additional slotting costs associated with GSK

 

 
411

 

Inventory step-up charge associated with acquisitions

 

 
23

 

Additional product testing costs associated with GSK

 

 
220

 

Additional supplier transition costs associated with GSK
3,765

 

 
5,426

 

Legal and professional fees associated with acquisitions

 
4,890

 
98

 
5,665

Unsolicited proposal costs

 

 
534

 

Transition and integration costs associated with GSK

 

 
5,811

 

Total adjustments
3,765

 
4,890

 
12,523

 
5,665

Non-GAAP Adjusted Operating Income
$
50,487

 
$
28,520

 
$
154,234

 
$
85,932







Reconciliation of GAAP Net Income to Non-GAAP Adjusted EBITDA:
 
Three Months Ended December 31,
 
Nine Months Ended December 31,
 
2012
 
2011
 
2012
 
2011
(In thousands)
 
 
 
 
 
 
 
GAAP Net Income
$
12,257

 
$
9,510

 
$
46,156

 
$
37,227

Interest expense, net
26,661

 
8,116

 
66,169

 
24,973

Income tax provision
7,804

 
6,004

 
29,386

 
23,130

Depreciation and amortization
3,359

 
2,563

 
9,950

 
7,683

Non-GAAP EBITDA:
50,081

 
26,193

 
151,661

 
93,013

Adjustments:
 
 
 
 
 
 
 
Gain on settlement

 

 

 
(5,063
)
Additional slotting costs associated with GSK

 

 
411

 

Inventory step-up charge associated with acquisitions

 

 
23

 

Additional product testing costs associated with GSK

 

 
220

 

Additional supplier transition costs associated with GSK
3,765

 

 
5,426

 

Legal and professional fees associated with acquisitions

 
4,890

 
98

 
5,665

Unsolicited proposal costs

 

 
534

 

Transition and integration costs associated with GSK

 

 
5,811

 

Total adjustments
3,765

 
4,890

 
12,523

 
602

Non-GAAP Adjusted EBITDA
$
53,846

 
$
31,083

 
$
164,184

 
$
93,615



Reconciliation of GAAP Net Income to Non-GAAP Adjusted Net Income and related Adjusted Earnings Per Share:
 
Three Months Ended December 31,
 
Nine Months Ended December 31,
 
2012
2012 Adjusted EPS
 
2011
2011 Adjusted EPS
 
2012
2012 Adjusted EPS
 
2011
2011 Adjusted EPS
(In thousands)
 
 
 
 
 
 
 
 
 
 
 
GAAP Net Income
$
12,257

$
0.24

 
$
9,510

$
0.19

 
$
46,156

$
0.90

 
$
37,227

$
0.73

Adjustments:
 
 
 
 
 
 
 
 
 
 
 
Gain on settlement


 


 


 
(5,063
)
(0.10
)
Additional slotting costs associated with GSK


 


 
411

0.01

 


Inventory step-up charge associated with acquisitions


 


 
23


 


Additional product testing costs associated with GSK


 


 
220


 


Additional supplier transition costs associated with GSK
3,765

0.07

 


 
5,426

0.11

 


Legal and professional fees associated with acquisitions


 
4,890

0.10

 
98


 
5,665

0.11

Unsolicited proposal costs


 


 
534

0.01

 


Transition and integration costs associated with GSK


 


 
5,811

0.11

 


Accelerated amortization of debt discount and issue costs
7,746

0.15

 


 
7,746

0.15

 


Tax impact of adjustments
(4,513
)
(0.09
)
 
(1,892
)
(0.04
)
 
(7,920
)
(0.15
)
 
(275
)

Tax impact of state rate adjustments and other non-deductible items


 


 


 
(237
)

Total adjustments
6,998

0.13

 
2,998

0.06

 
12,349

0.24

 
90

0.01

Non-GAAP Adjusted Net Income and Adjusted EPS
$
19,255

$
0.37

 
$
12,508

$
0.25

 
$
58,505

$
1.14

 
$
37,317

$
0.74








Reconciliation of GAAP Net Cash Provided by Operating Activities to Non-GAAP Free Cash Flow:
 
Three Months Ended December 31,
 
Nine Months Ended December 31,
 
2012
 
2011
 
2012
 
2011
(In thousands)
 
 
 
 
 
 
 
GAAP Net cash provided by operating activities
$
40,502

 
$
14,527

 
$
100,876

 
$
47,993

Additions to property and equipment for cash
(3,656
)
 
(51
)
 
(8,922
)
 
(358
)
Non-GAAP Free Cash Flow
$
36,846

 
$
14,476

 
$
91,954

 
$
47,635

 
 
 
 
 
 
 
 
Non-GAAP Free Cash Flow per Share
$
0.72

 
$
0.29

 
$
1.79

 
$
0.94



Reconciliation of GAAP Net Cash Provided by Operating Activities to Non-GAAP Free Cash Flow and Non-GAAP Free Cash Flow per Share:
 
Three Months Ended December 31,
 
Nine Months Ended December 31,
 
2012
2012 Free Cash Flow per Share
 
2011
2011 Free Cash Flow per Share
 
2012
2012 Free Cash Flow per Share
 
2011
2011 Free Cash Flow per Share
(In thousands)
 
 
 
 
 
 
 
 
 
 
 
GAAP Net Income
$
12,257

$
0.24

 
$
9,510

$
0.19

 
$
46,156

$
0.90

 
$
37,227

$
0.73

Adjustments:
 
 
 
 
 
 
 
 
 
 
 
Adjustments to reconcile net income to net cash provided by operating activities as shown in the Statement of Cash Flows
17,179

0.33

 
5,136

0.10

 
42,032

0.82

 
18,898

0.38

Changes in operating assets and liabilities, net of effects from acquisitions as shown in the Statement of Cash Flows
11,066

0.22

 
(119
)

 
12,688

0.25

 
(8,132
)
(0.16
)
Total adjustments
28,245

0.55

 
5,017

0.10

 
54,720

1.07

 
10,766

0.22

GAAP Net cash provided by operating activities
$
40,502

$
0.79

 
$
14,527

$
0.29

 
$
100,876

$
1.97

 
$
47,993

$
0.95

Additions to property and equipment for cash
$
(3,656
)
$
(0.07
)
 
$
(51
)
$

 
$
(8,922
)
$
(0.18
)
 
$
(358
)
$
(0.01
)
Non-GAAP Free Cash Flow per Share
$
36,846

$
0.72

 
$
14,476

$
0.29

 
$
91,954

$
1.79

 
$
47,635

$
0.94