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Prestige Consumer Healthcare Inc. Reports Fiscal 2021 Fourth Quarter and Record Full-Year Results

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  • Company Exceeds Full Year 2021 Guidance for Revenue, Adjusted EPS and Free Cash Flow

  • Revenue was $237.8 Million in Q4 and $943.4 in Full-Year Fiscal 2021

  • Record Diluted EPS of $3.25 for Full-Year Fiscal 2021

  • Net Cash Provided by Operating Activities for Fiscal 2021 of $235.6 million and Record Adjusted Free Cash Flow of $213.4 Million in Full-Year Fiscal 2021

  • Provides Full-Year Fiscal 2022 Outlook for Revenue and Earnings Per Share of $957 to $962 Million and $3.58 or More, Respectively

TARRYTOWN, N.Y., May 06, 2021 (GLOBE NEWSWIRE) -- Prestige Consumer Healthcare Inc. (NYSE:PBH) today reported financial results for its fourth quarter and fiscal year ended March 31, 2021.

“We exceeded full year 2021 guidance by generating solid earnings and cash flow growth along with market share gains. This performance is a testament to our proven business strategy and the benefits of our leading and diverse portfolio of brands, especially against the backdrop of the unique pandemic business environment that disrupted several of our categories in fiscal 2021. We expect our business attributes to continue to create value in the upcoming fiscal year as we anticipate returning to sales growth and continue to leverage our strong free cash flow to execute our capital allocation strategy,” said Ron Lombardi, Chief Executive Officer of Prestige Consumer Healthcare.

Fourth Fiscal Quarter Ended March 31, 2021

Reported revenues in the fourth quarter of fiscal 2021 decreased 5.4% to $237.8 million versus $251.2 million in the fourth quarter of fiscal 2020. Revenues decreased 6.6% excluding the impact of foreign currency. The revenue performance for the quarter was driven by strong performance across the majority of the Company’s key brands versus their respective categories, but was more than offset by reduced consumption for certain brands where the category has been disrupted by the COVID-19 virus, including the comparison against a sharp rise in consumption during the fourth quarter fiscal 2020 as consumers “stocked up” on products as a result of the COVID-19 virus.

Reported net income for the fourth quarter of fiscal 2021 totaled $35.5 million, compared to the prior year quarter’s net income of $37.0 million. Non-GAAP adjusted net income of $39.9 million in the fourth quarter fiscal 2021 compared to the prior year quarter’s adjusted net income of $41.9 million. Diluted earnings per share of $0.70 for the fourth quarter of fiscal 2021 compared to $0.73 in the prior year comparable period. Non-GAAP adjusted earnings per share were $0.79 per share for fourth quarter fiscal 2021, compared to $0.82 per share in fourth quarter fiscal 2020.

The adjustment of net income in the fourth quarter fiscal 2021 includes a loss on extinguishment of debt and the related income tax effects. Adjustments to net income in the fourth quarter of fiscal 2020 included costs associated with a new logistics provider and location and the related income tax effects of the adjustment.

Fiscal Year Ended March 31, 2021

Reported revenues for fiscal 2021 totaled $943.4 million, a decrease of 2.0%, compared to revenues of $963.0 million in fiscal 2020. The revenue performance for fiscal 2021 was driven by solid consumption across the majority of the Company’s portfolio and a benefit associated with higher retailer order patterns to refill customer’s supply chains, offset by reduced consumption for certain brands where the category has been impacted by the COVID-19 virus.

Reported net income for fiscal 2021 totaled $164.7 million versus the prior year net income of $142.3 million. Non-GAAP adjusted net income for fiscal 2021 was $164.0 million, versus the prior year adjusted net income of $151.3 million. Diluted earnings per share were $3.25 for fiscal 2021 compared to $2.78 per share in the prior year. Non-GAAP adjusted earnings per share were $3.24 per share for fiscal 2021 compared to $2.96 in the prior fiscal year.

The adjustments to net income in fiscal 2021 related to the final regulations issued during the second fiscal quarter for certain tax elements imposed under the domestic Tax Cuts and Jobs Act, which resulted in a one-time discrete benefit associated with the utilization of foreign tax credits, as well as a loss on extinguishment of debt and the related income tax effects of the adjustments.

Adjustments to net income in fiscal 2020 included costs associated with a new logistics provider and location as well as a loss on extinguishment of debt, and the related income tax effects of each adjustment.

Free Cash Flow and Balance Sheet

The Company's net cash provided by operating activities for fourth quarter fiscal 2021 was $59.1 million, compared to $56.1 million during the prior year comparable period. Non-GAAP adjusted free cash flow in the fourth quarter of fiscal 2021 was $54.2 million compared to $52.5 million in the prior year. The Company's net cash provided by operating activities for fiscal 2021 was $235.6 million, an increase compared to $217.1 million during the prior year. Non-GAAP adjusted free cash flow in fiscal 2021 was $213.4 million compared to $206.8 million in the prior year. The change in free cash flow versus the prior year was attributable to higher operating income and lower interest costs.

The Company's net debt position as of March 31, 2021 was approximately $1.5 billion and the Company's covenant-defined leverage ratio was 4.2x. During the fourth quarter the Company reduced debt outstanding by $65 million and repurchased approximately $2 million in stock as authorized in the Company’s share repurchase program. For the full year, the Company repurchased approximately $12 million in stock as authorized in the Company’s share repurchase program. On March 1st, 2021 the Company issued $600 million of new senior notes which replaced the same principal of senior notes previously due in fiscal 2024. The new notes extend the maturity of the amount to April 1, 2031 with over $15 million in annual interest savings.

Segment Review

North American OTC Healthcare: Segment revenues of $211.5 million for the fourth quarter of fiscal 2021 compared to the prior year comparable quarter's revenues of $219.8 million. The fourth quarter fiscal 2021 revenue performance was driven by strong performance across a majority of the Company’s key brands versus their respective categories, but was more than offset by reduced consumption for certain brands where the category has been disrupted by the COVID-19 virus and the comparison against a sharp rise in consumption during the year earlier as consumers “stocked up” on products as a result of the COVID-19 virus.

For fiscal year 2021, reported revenues for the North American OTC Healthcare segment of $849.3 million compared to $859.4 million in the prior fiscal year. The modest decrease in revenue versus the prior year comparable period benefited from an increase in consumption levels for the majority of the Company’s core brand portfolio as well as a benefit in the first quarter 2021 associated with higher retailer order patterns to refill customer’s supply chains, offset primarily by a reduction in consumption for certain brands where the category consumption levels have been impacted by the COVID-19 virus.

International OTC Healthcare: Segment fiscal fourth quarter 2021 revenues totaled $26.3 million, compared to $31.4 million reported in the prior year comparable period. The revenue decrease versus the prior year related primarily to the comparison against a sharp rise in consumption during the fourth quarter fiscal 2020 as consumers “stocked up” on certain products such as Hydralyte as a result of the COVID-19 virus, partially offset by a foreign currency benefit of approximately $3 million.

For fiscal year 2021, reported revenues for the International OTC Healthcare segment were $94.0 million versus the prior year revenues of $103.6 million, driven by reduced consumption for certain brands impacted by the COVID-19 virus, such as Hydralyte as well as a foreign currency benefit of approximately $4 million.

Commentary and Outlook for Fiscal 2022

Ron Lombardi, Chief Executive Officer, stated, “A year ago, we entered fiscal 2021 with a backdrop of uncertainty prevalent across the economy due to many factors resulting from COVID-19. Our time-tested business attributes and strategy worked to our favor: leading #1 market share brand positions, agile marketing ability, a diversified brand portfolio, and a robust eCommerce strategy, among many others – all helping to generate continued market share gains. This enabled solid fiscal year financial results and we expect to benefit once again from these attributes in fiscal 2022 and beyond.”

He continued, “In fiscal 2022, we expect organic growth to track in-line with our long-term expectations for our leading brand portfolio, except for certain COVID-disrupted categories, where we anticipate stable performance versus FY21 levels. Meanwhile, we anticipate our solid financial profile to enable cash flow growth in fiscal ’22 and strong low-double-digit earnings growth. This financial outlook will continue to fuel our disciplined capital allocation strategy of continued debt reduction, enabling us to focus on long-term top- and bottom-line growth prospects,” Mr. Lombardi concluded.

Fiscal 2022 Full-Year Outlook

Revenue

$957 to 962 million

Organic Growth

1.5% to 2.0%

Adjusted E.P.S.

$3.58 or more

Free Cash Flow

$225 million or more

Fiscal Fourth Quarter and Full-Year 2021 Conference Call, Accompanying Slide Presentation and Replay

The Company will host a conference call to review its fourth quarter and full-year results today, May 6, 2021 at 8:30 a.m. ET. The toll-free dial-in numbers are 844-233-9440 for the U.S. & Canada and 574-990-1016 internationally. The conference ID number is 5996287. The Company provides 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 the Company's website at www.prestigeconsumerhealthcare.com. The slide presentation can be accessed from the Investor Relations page of the website by clicking on Webcasts and Presentations.

Telephonic replays will be available for approximately one week following the completion of the call and can be accessed at 855-859-2056 within North America and at 404-537-3406 from outside North America. The conference ID is 5996287.

Non-GAAP and Other Financial Information

In addition to financial results reported in accordance with generally accepted accounting principles (GAAP), we have provided certain non-GAAP financial information in this release 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.

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 "guidance," "strategy," "outlook," "projection," "may," "will," "would," "expect," "anticipate," "believe”, "enables," 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 the Company's future operating results including revenues, organic growth, adjusted earnings per share, and free cash flow, the Company’s ability to execute on its capital allocation strategy and reduce debt, and the Company’s ability to create long-term value for stakeholders. 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 impact of the COVID-19 pandemic and business and economic conditions, consumer trends, the impact of the Company’s advertising and promotional and new product development initiatives, customer inventory management initiatives, fluctuating foreign exchange rates, competitive pressures, and the ability of the Company’s third party manufacturers and logistics providers and suppliers to meet demand for its products and to reduce costs. A discussion of other factors that could cause results to vary is included in the Company's Annual Report on Form 10-K for the year ended March 31, 2020 and other periodic reports filed with the Securities and Exchange Commission.

About Prestige Consumer Healthcare Inc.
Prestige Consumer Healthcare markets, sells, manufactures and distributes consumer healthcare products to retail outlets throughout the U.S. and Canada, Australia, and in certain other international markets. The Company’s diverse portfolio of brands include Monistat® and Summer’s Eve® women's health products, BC® and Goody's® pain relievers, Clear Eyes® eye care products, DenTek® specialty oral care products, Dramamine® motion sickness treatments, Fleet® enemas and glycerin suppositories, Chloraseptic® and Luden's® sore throat treatments and drops, Compound W® wart treatments, Little Remedies® pediatric over-the-counter products, Boudreaux’s Butt Paste® diaper rash ointments, Nix® lice treatment, Debrox® earwax remover, Gaviscon® antacid in Canada, and Hydralyte® rehydration products and the Fess® line of nasal and sinus care products in Australia. Visit the Company's website at www.prestigeconsumerhealthcare.com.

Prestige Consumer Healthcare Inc.
Consolidated Statement of Income and Comprehensive Income
(Unaudited)

Three Months Ended March 31,

Year
Ended March 31,

(In thousands, except per share data)

2021

2020

2021

2020

Total Revenues

237,761

251,235

943,365

963,010

Cost of Sales

Cost of sales excluding depreciation

99,047

106,236

389,670

406,554

Cost of sales depreciation

1,658

1,089

6,223

4,233

Cost of sales

100,705

107,325

395,893

410,787

Gross profit

137,056

143,910

547,472

552,223

Operating Expenses

Advertising and marketing

36,417

40,167

140,589

147,194

General and administrative

23,823

23,584

85,540

89,112

Depreciation and amortization

5,879

6,242

23,941

24,762

Total operating expenses

66,119

69,993

250,070

261,068

Operating income

70,937

73,917

297,402

291,155

Other (income) expense

Interest expense, net

18,983

22,452

82,328

96,224

Loss on extinguishment of debt

12,327

12,327

2,155

Other (income) expense, net

(746

)

930

(1,366

)

1,625

Total other expense, net

30,564

23,382

93,289

100,004

Income before income taxes

40,373

50,535

204,113

191,151

Provision for income taxes

4,859

13,489

39,431

48,870

Net income

$

35,514

$

37,046

$

164,682

$

142,281

Earnings per share:

Basic

$

0.71

$

0.74

$

3.28

$

2.81

Diluted

$

0.70

$

0.73

$

3.25

$

2.78

Weighted average shares outstanding:

Basic

50,031

50,367

50,210

50,723

Diluted

50,512

50,878

50,605

51,140

Comprehensive income, net of tax:

Currency translation adjustments

(2,106

)

(12,052

)

20,333

(12,363

)

Unrealized gain (loss) on interest rate swaps

698

(4,864

)

3,045

(4,864

)

Unrecognized net (loss) gain on pension plans

(1,162

)

(1,187

)

1,172

(1,187

)

Net gain on pension distribution reclassified to net income

(190

)

Total other comprehensive (loss) income

(2,570

)

(18,103

)

24,360

(18,414

)

Comprehensive income

$

32,944

$

18,943

$

189,042

$

123,867


Prestige Consumer Healthcare Inc.
Consolidated Balance Sheet
(Unaudited)

(In thousands)

March 31,

2021

2020

Assets

Current assets

Cash and cash equivalents

$

32,302

$

94,760

Accounts receivable, net of allowance of $16,457 and $20,194, respectively

114,671

150,517

Inventories

114,959

116,026

Prepaid expenses and other current assets

7,903

4,351

Total current assets

269,835

365,654

Property, plant and equipment, net

70,059

55,988

Operating lease right-of-use assets

23,722

28,888

Finance lease right-of-use assets, net

8,986

5,842

Goodwill

578,079

575,179

Intangible assets, net

2,475,729

2,479,391

Other long-term assets

2,863

2,963

Total Assets

$

3,429,273

$

3,513,905

Liabilities and Stockholders' Equity

Current liabilities

Accounts payable

$

45,978

$

62,375

Accrued interest payable

6,312

9,911

Operating lease liabilities, current portion

5,858

5,612

Finance lease liabilities, current portion

2,588

1,220

Other accrued liabilities

61,402

70,763

Total current liabilities

122,138

149,881

Long-term debt, net

1,479,653

1,730,300

Deferred income tax liabilities

434,050

407,812

Long-term operating lease liabilities, net of current portion

19,706

24,877

Long-term finance lease liabilities, net of current portion

6,816

4,626

Other long-term liabilities

8,612

25,438

Total Liabilities

2,070,975

2,342,934

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 – 53,999 shares at March 31, 2021 and 53,805 shares at March 31, 2020

540

538

Additional paid-in capital

499,508

488,116

Treasury stock, at cost – 4,088 shares at March 31, 2021 and 3,719 at March 31, 2020

(130,732

)

(117,623

)

Accumulated other comprehensive loss, net of tax

(19,801

)

(44,161

)

Retained earnings

1,008,783

844,101

Total Stockholders' Equity

1,358,298

1,170,971

Total Liabilities and Stockholders' Equity

$

3,429,273

$

3,513,905


Prestige Consumer Healthcare Inc.
Consolidated Statement of Cash Flows
(Unaudited)

Year Ended March 31,

(In thousands)

2021

2020

Operating Activities

Net income

$

164,682

$

142,281

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

30,164

28,995

Loss on sale or disposal of property and equipment

220

713

Deferred income taxes

18,628

13,852

Amortization of debt origination costs

4,979

3,812

Stock-based compensation costs

8,543

7,644

Loss on extinguishment of debt

12,327

2,155

Non-cash operating lease cost

7,082

8,786

Impairment loss

2,434

Other

(7,854

)

84

Changes in operating assets and liabilities:

Accounts receivable

36,872

(2,849

)

Inventories

2,972

2,930

Prepaid expenses and other current assets

(3,227

)

687

Accounts payable

(17,342

)

6,210

Accrued liabilities

(14,912

)

12,096

Operating lease liabilities

(6,718

)

(8,824

)

Other

(3,243

)

(1,448

)

Net cash provided by operating activities

235,607

217,124

Investing Activities

Purchases of property, plant and equipment

(22,243

)

(14,560

)

Escrow receipt

750

Acquisition of tradename

(2,760

)

Net cash used in investing activities

(22,243

)

(16,570

)

Financing Activities

Proceeds from issuance of senior notes

600,000

400,000

Repayment of senior notes

(600,000

)

(400,000

)

Term Loan repayments

(195,000

)

(48,000

)

Borrowings under revolving credit agreement

15,000

100,000

Repayments under revolving credit agreement

(70,000

)

(120,000

)

Payment of debt costs

(17,718

)

(6,584

)

Payments of finance leases

(1,443

)

(476

)

Proceeds from exercise of stock options

2,851

1,324

Fair value of shares surrendered as payment of tax withholding

(1,242

)

(974

)

Repurchase of common stock

(11,867

)

(56,721

)

Net cash used in financing activities

(279,419

)

(131,431

)

Effects of exchange rate changes on cash and cash equivalents

3,597

(1,893

)

(Decrease) increase in cash and cash equivalents

(62,458

)

67,230

Cash and cash equivalents - beginning of year

94,760

27,530

Cash and cash equivalents - end of year

$

32,302

$

94,760

Interest paid

$

80,290

$

92,166

Income taxes paid

$

34,381

$

30,602


Prestige Consumer Healthcare Inc.
Consolidated Statement of Income
Business Segments
(Unaudited)

Three Months Ended March 31, 2021

(In thousands)

North American OTC
Healthcare

International OTC
Healthcare

Consolidated

Total segment revenues*

$

211,468

$

26,293

$

237,761

Cost of sales

91,321

9,384

100,705

Gross profit

120,147

16,909

137,056

Advertising and marketing

31,304

5,113

36,417

Contribution margin

$

88,843

$

11,796

100,639

Other operating expenses

29,702

Operating income

$

70,937

*Intersegment revenues of $0.8 million were eliminated from the North American OTC Healthcare segment.

Year Ended March 31, 2021

(In thousands)

North American OTC
Healthcare

International OTC
Healthcare

Consolidated

Total segment revenues*

$

849,319

$

94,046

$

943,365

Cost of sales

359,100

36,793

395,893

Gross profit

490,219

57,253

547,472

Advertising and marketing

122,857

17,732

140,589

Contribution margin

$

367,362

$

39,521

406,883

Other operating expenses

109,481

Operating income

$

297,402

*Intersegment revenues of $3.2 million were eliminated from the North American OTC Healthcare segment.

Three Months Ended March 31, 2020

(In thousands)

North American OTC
Healthcare

International OTC
Healthcare

Consolidated

Total segment revenues*

$

219,814

$

31,421

$

251,235

Cost of sales

96,454

10,871

107,325

Gross profit

123,360

20,550

143,910

Advertising and marketing

33,338

6,829

40,167

Contribution margin

$

90,022

$

13,721

103,743

Other operating expenses

29,826

Operating income

$

73,917

*Intersegment revenues of $1.4 million were eliminated from the North American OTC Healthcare segment.

Year Ended March 31, 2020

(In thousands)

North American OTC
Healthcare

International OTC
Healthcare

Consolidated

Total segment revenues*

$

859,368

$

103,642

$

963,010

Cost of sales

372,133

38,654

410,787

Gross profit

487,235

64,988

552,223

Advertising and marketing

127,972

19,222

147,194

Contribution margin

$

359,263

$

45,766

405,029

Other operating expenses

113,874

Operating income

$

291,155

* Intersegment revenues of $3.5 million were eliminated from the North American OTC Healthcare segment.

About Non-GAAP Financial Measures

In addition to financial results reported in accordance with GAAP, we disclose certain Non-GAAP financial measures ("NGFMs"), including, but not limited to, Non-GAAP Organic Revenues, Non-GAAP Organic Revenue Change Percentage, Non-GAAP Adjusted Gross Margin, Non-GAAP Adjusted Gross Margin Percentage, Non-GAAP EBITDA, Non-GAAP EBITDA Margin, Non-GAAP Adjusted EBITDA, Non-GAAP Adjusted EBITDA Margin, Non-GAAP Adjusted Net Income, Non-GAAP Adjusted EPS, Non-GAAP Free Cash Flow, Non-GAAP Adjusted Free Cash Flow and Net Debt. We use these NGFMs internally, along with GAAP information, in evaluating our operating performance and in making financial and operational decisions. We believe that the presentation of these NGFMs provides investors with greater transparency, and provides a more complete understanding of our business than could be obtained absent these disclosures, because the supplemental data relating to our financial condition and results of operations provides additional ways to view our operation when considered with both our GAAP results and the reconciliations below. In addition, we believe that the presentation of each of these NGFMs is useful to investors for period-to-period comparisons of results in assessing shareholder value, and we use these NGFMs internally to evaluate the performance of our personnel and also to evaluate our operating performance and compare our performance to that of our competitors.

These NGFMs are not in accordance with GAAP, should not be considered as a measure of profitability or liquidity, and may not be directly comparable to similarly titled NGFMs reported by other companies. These NGFMs have limitations and they should not be considered in isolation from or as an alternative to their most closely related GAAP measures reconciled below. Investors should not rely on any single financial measure when evaluating our business. We recommend investors review the GAAP financial measures included in this earnings release. When viewed in conjunction with our GAAP results and the reconciliations below, we believe these NGFMs provide greater transparency and a more complete understanding of factors affecting our business than GAAP measures alone.

NGFMs Defined

We define our NGFMs presented herein as follows:

  • Non-GAAP Organic Revenues: GAAP Total Revenues excluding impact of foreign currency exchange rates in the periods presented.

  • Non-GAAP Organic Revenue Change Percentage: Calculated as the change in Non-GAAP Organic Revenues from prior year divided by prior year Non-GAAP Organic Revenues.

  • Non-GAAP Adjusted Gross Margin: GAAP Gross Profit minus certain transition and other costs associated with new warehouse.

  • Non-GAAP Adjusted Gross Margin Percentage: Calculated as Non-GAAP Adjusted Gross Margin divided by GAAP Total Revenues.

  • Non-GAAP EBITDA: GAAP Net Income before interest expense, net, income taxes provision, and depreciation and amortization.

  • Non-GAAP EBITDA Margin: Calculated as Non-GAAP EBITDA divided by GAAP Total Revenues.

  • Non-GAAP Adjusted EBITDA: Non-GAAP EBITDA less certain transition and other costs associated with new warehouse, loss on disposal of assets and loss on extinguishment of debt.

  • Non-GAAP Adjusted EBITDA Margin: Calculated as Non-GAAP Adjusted EBITDA divided by GAAP Total Revenues.

  • Non-GAAP Adjusted Net Income: GAAP Net Income before certain transition and other costs associated with new warehouse, loss on disposal of assets, loss on extinguishment of debt, tax impact of adjustments, and normalized tax rate adjustment.

  • Non-GAAP Adjusted EPS: Calculated as Non-GAAP Adjusted Net Income, divided by the weighted average number of common and potential common shares outstanding during the period.

  • Non-GAAP Free Cash Flow: GAAP Net cash provided by operating activities less cash paid for capital expenditures.

  • Non-GAAP Adjusted Free Cash Flow: Non-GAAP Free Cash Flow plus cash payments made for transition and other costs associated with new warehouse.

  • Net Debt: Calculated as total principal amount of debt outstanding ($1,495,000 at March 31, 2021 and $1,745,000 at March 31, 2020) less cash and cash equivalents ($32,302 at March 31, 2021 and $94,760 at March 31, 2020). Amounts in thousands.

The following tables set forth the reconciliations of each of our NGFMs to their most directly comparable financial measures presented in accordance with GAAP.

Reconciliation of GAAP Total Revenues to Non-GAAP Organic Revenues and related Non-GAAP Organic Revenue Change percentage:

Three Months Ended
March 31,

Year Ended
March 31,

2021

2020

2021

2020

(In thousands)

GAAP Total Revenues

$

237,761

$

251,235

$

943,365

$

963,010

Revenue Change

(5.4

)%

(2.0

)%

Adjustments:

Impact of foreign currency exchange rates

3,404

3,796

Total adjustments

3,404

3,796

Non-GAAP Organic Revenues

$

237,761

$

254,639

$

943,365

$

966,806

Non-GAAP Organic Revenue Change

(6.6

)%

(2.4

)%


Reconciliation of GAAP Gross Profit to Non-GAAP Adjusted Gross Margin and related Non-GAAP Adjusted Gross Margin percentage:

Three Months Ended
March 31,

Year Ended
March 31,

2021

2020

2021

2020

(In thousands)

GAAP Total Revenues

$

237,761

$

251,235

$

943,365

$

963,010

GAAP Gross Profit

$

137,056

$

143,910

$

547,472

$

552,223

GAAP Gross Profit as a Percentage of GAAP Total Revenue

57.6

%

57.3

%

58.0

%

57.3

%

Adjustments:

Transition and other costs associated with new warehouse(1)

5,208

9,170

Total adjustments

5,208

9,170

Non-GAAP Adjusted Gross Margin

$

137,056

$

149,118

$

547,472

$

561,393

Non-GAAP Adjusted Gross Margin as a Percentage of GAAP Total Revenues

57.6

%

59.4

%

58.0

%

58.3

%

(1) Items related to new warehouse represent costs to transition to the new warehouse and duplicate costs incurred during the transition.



Reconciliation of GAAP Net Income to Non-GAAP EBITDA and related Non-GAAP EBITDA Margin, Non-GAAP Adjusted EBITDA and related Non-GAAP Adjusted EBITDA Margin:

Three Months Ended
March 31,

Year Ended
March 31,

2021

2020

2021

2020

(In thousands)

GAAP Net Income

$

35,514

$

37,046

$

164,682

$

142,281

Interest expense, net

18,983

22,452

82,328

96,224

Provision for income taxes

4,859

13,489

39,431

48,870

Depreciation and amortization

7,537

7,331

30,164

28,995

Non-GAAP EBITDA

66,893

80,318

316,605

316,370

Non-GAAP EBITDA Margin

28.1

%

32.0

%

33.6

%

32.9

%

Adjustments:

Transition and other costs associated with new warehouse in Cost of Goods Sold(1)

5,208

9,170

Loss on disposal of assets

382

382

Loss on extinguishment of debt

12,327

12,327

2,155

Total adjustments

12,327

5,590

12,327

11,707

Non-GAAP Adjusted EBITDA

$

79,220

$

85,908

$

328,932

$

328,077

Non-GAAP Adjusted EBITDA Margin

33.3

%

34.2

%

34.9

%

34.1

%

(1) Items related to new warehouse represent costs to transition to the new warehouse and duplicate costs incurred during the transition.


Reconciliation of GAAP Net Income and GAAP Diluted Earnings Per Share to Non-GAAP Adjusted Net Income and related Non-GAAP Adjusted Earnings Per Share:

Three Months Ended March 31,

Year Ended March 31,

2021

2021
Adjusted
EPS

2020

2020
Adjusted
EPS

2021

2021
Adjusted
EPS

2020

2020
Adjusted
EPS

(In thousands, except per share data)

GAAP Net Income and Diluted EPS

$

35,514

$

0.70

$

37,046

$

0.73

$

164,682

$

3.25

$

142,281

$

2.78

Adjustments:

Transition and other costs associated with new warehouse in Cost of Goods Sold(1)

5,208

0.10

9,170

0.18

Loss on disposal of assets

382

0.01

382

0.01

Loss on extinguishment of debt

12,327

0.24

12,327

0.24

2,155

0.04

Tax impact of adjustments(2)

(2,986

)

(0.06

)

(1,420

)

(0.03

)

(2,986

)

(0.06

)

(2,974

)

(0.06

)

Normalized tax rate adjustment(3)

(4,919

)

(0.10

)

653

0.01

(10,025

)

(0.20

)

318

0.01

Total adjustments

4,422

0.09

4,823

0.09

(684

)

(0.01

)

9,051

0.18

Non-GAAP Adjusted Net Income and Adjusted EPS

$

39,936

$

0.79

$

41,869

$

0.82

$

163,998

$

3.24

$

151,332

$

2.96

Note: Amounts may not add due to rounding.
(1) Items related to new warehouse represent costs to transition to the new warehouse and duplicate costs incurred during the transition.
(2) The income tax adjustments are determined using applicable rates in the taxing jurisdictions in which the above adjustments relate and includes both current and deferred income tax expense (benefit) based on the specific nature of the specific Non-GAAP performance measure.
(3) Income tax adjustment to adjust for discrete income tax items.


Reconciliation of GAAP Net Income to Non-GAAP Free Cash Flow and Non-GAAP Adjusted Free Cash Flow:

Three Months Ended
March 31,

Year Ended
March 31,

2021

2020

2021

2020

(In thousands)

GAAP Net Income

$

35,514

$

37,046

$

164,682

$

142,281

Adjustments:

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

29,904

20,056

76,523

66,041

Changes in operating assets and liabilities as shown in the Statement of Cash Flows

(6,331

)

(976

)

(5,598

)

8,802

Total adjustments

23,573

19,080

70,925

74,843

GAAP Net cash provided by operating activities

59,087

56,126

235,607

217,124

Purchases of property and equipment

(4,896

)

(5,505

)

(22,243

)

(14,560

)

Non-GAAP Free Cash Flow

54,191

50,621

213,364

202,564

Transition and other payments associated with new warehouse(1)

1,876

4,203

Non-GAAP Adjusted Free Cash Flow

$

54,191

$

52,497

$

213,364

$

206,767

(1) Payments related to new warehouse represent costs to transition to the new warehouse and duplicate costs incurred during the transition.


Outlook for Fiscal Year 2022:

Reconciliation of Projected GAAP Net cash provided by operating activities to Projected Non-GAAP Free Cash Flow:

(In millions)

Projected FY'22 GAAP Net cash provided by operating activities

$

240

Additions to property and equipment for cash

(15

)

Projected Non-GAAP Free Cash Flow

$

225

CONTACT: Investor Relations Contact Phil Terpolilli, CFA, 914-524-6819 irinquiries@prestigebrands.com