Prestige Consumer Healthcare Inc. · NYSE:PBH
Prestige Consumer Healthcare — Prestige Brands Holdings — Q4 FY2018 Earnings Presentation
35 slides from Prestige Consumer Healthcare's earnings presentation, May 10, 2018
Slide 1: Review of Fourth Quarter and FY 18 Results
Exhibit 99.2 — es PrestigeBrands Review of Fourth Quarter and FY 18 Results May 10, 2018
Slide 2: Forward-looking statements
This presentation contains certain “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995, such as statements regarding the Company’s expected financial performance, including revenue growth, adjusted EPS, and adjusted free cash flow; the Company’s ex
Slide 3: Agenda for Today's Discussion
Agenda for Today's Discussion |. Performance Highlights Il, FY 18 Year in Review lll. Financial Overview IV. FY 19 Outlook Fourth Quarter FY 18 Results
Slide 4: I. Performance Highlights
|. Performance Highlights —Fleet Summers&ve Dramamine Od Efferdent Clear Goodys carp Ema Hydralyie MONISTAT [imeem
Slide 5: Q4 Performance Highlights
Q4 Revenue of $256.0 million, up 6.4% versus PY Q4 Revenue increase of 2.4%(1) pro forma for the Fleet acquisition Solid international performance at Care Pharma Adjusted Gross Margin of 55.2%(3), up +0.6% pts. versus Q3 FY 18 — Beginning to realize improvement in freight and warehouse costs
Slide 6: Strong Financial Performance in FY
Strong Financial Performance in FY 18 Revenue of $1,041 up 18.0% versus FY 17 Solid consumption th of 1.7%" pro form for the acqui Adjusted EPS of $2.58), up 8.9% versus FY 17 Continued to manage capital structure through re-financing and debt paydown Adjusted Free Cash Flow of $208 million'?), up 5
Slide 7: II. FY 18 Year in Review
Il. FY 18 Year in Review —Fleet Summers&ve Dramamine a terion am ele BC 22225) Hydralyie MONISTAT [imeem
Slide 8: Remain Well Positioned for Long-Term Shareholder Value Creation
FY 18 Year in Review suntnieetnesnenseesneeetintatl Remain Well Positioned for Long-Term Shareholder Value Creation Ee eer Results PrestigeBrands +
Slide 9: 52 Weeks Consumption: Core Brands vs Category
L-52 Weeks Consumption(2) L-52 Weeks Consumption(2)* +1.3% +1.0% 3.4% 2.1% 2.1% 1.1% Category Core Brands Category * IRI MULO Data as of March 25, 2018; Core Categories include those pertaining to PBH’s core brands (SE, Monistat, BC / Goody’s, Clear Eyes, DenTek, Dramamine, Beano, Fleet, Boudreaux’s
Slide 10: Continued Innovation to Grow the Brand and the Category
Purchased two iconic brands Continued Innovation to Grow the Brand and the Category in 2012 100+ year heritage in Southeast Expanded brand building investments Only powdered analgesic brands Expanded distribution Brand extensions into cough/cold with BC Sinus Launch Significant support
Slide 11: Feminine Hygiene Consumption
L-52 Weeks Consumption(2) +1.7x 6.1% 3.6% Feminine Hygiene Category
Slide 12: Need-based brands with #1 share
+1.2% #1 share brands represent ~60% of sales 2.9% Need-based products sought by consumers 1.7% Aligned with macro-Health & Wellness trend with innovation driven by consumer insights New products that enhance efficacy and consumer (2) experience Consumption Revenue
Slide 13: Warehouse and freight cost progress
Transitioned away from high-cost temporary work force April 1 Timing of customer deliveries led to a meaningful increase in average in-transit times in September Expanded carrier capacity and negotiated carrier rates in FY 18 18 FY Q2 Incremental warehouse and freight costs have moderated an
Slide 14: Free cash flow and leverage
$197 $208 $215 + $165 $185 $127 $131 $67 FY 12 FY 13 FY 14 FY 15 FY 16 FY 17 FY 18 FY19 ~5.2x ~5.7x ~5.2x ~5.0x ~4.3x ~4.3x ~5.0x ~4.7x FY 12 FY 13 FY 14 FY 15* FY 16 FY 17 FY 18 FY19 Dollar values in millions. * Peak leverage of 5.75x at close of the Insight Acquisition in September 2014
Slide 15: Long-term growth CAGRs
15.5% CAGR 17.6% CAGR $1,041 $355 $806 $289 $597 $204 $438 $134 FY 12 FY 14 FY 16 FY 18 FY 12 FY 14 FY 16 FY 18 20.8% CAGR 17.3% CAGR $2.58 $185 $208 $2.17 $131 $1.53 $67 $0.99 FY 12 FY 14 FY 16 FY 18 FY 12 FY 14 FY 16 FY 18 Dollar values in millions, except Adjusted EPS.
Slide 16: III. Financial Overview
lll. Financial Ouerview —Fleet Summers&ve Dramamine a terion am ele BC 22225) Hydralyie MONISTAT [imeem
Slide 17: Solid overall financial performance in Q4 and FY
Solid overall financial performance in Q4 and FY 18 − Q4 Revenue of $256.0 million, an increase of 6.4% − FY 18 Adjusted EBITDA(3) of $355.4 million − Q4 Adjusted EPS of $0.62(3), up 14.8% vs prior year, and FY 18 Adjusted EPS of $2.58(3), up 8.9% vs prior year Q4 FY 18 Q4 FY 17 FY 18 FY 17 6.4% 1
Slide 18: Income statement summary
Q4 FY 18 Q4 FY 17 % Chg FY18 FY17 % Chg Revenue growth of +18.0% Total Revenue $ 256.0 $ 240.7 6.4% $ 1,041.2 $ 882.1 18.0% (1) *(3) – Revenue growth of 1.7% pro forma for Adjusted Gross Margin 141.3 133.2 6.0% 580.2 503.3 15.3% the Fleet acquisition % Margin 55.2% 55.4% 55.7% 57.1% (3) (3) Adju
Slide 19: Adjusted Free Cash Flow and net debt
Net Debt in March of $1,980 million; leverage ratio (4) Q4 FY 18 Q4 FY 17 of 5.2x at end of FY 18 5.7% Total debt reduction of $64 million in Q4 and $209 $208.1 million in FY 18 $196.9 – Includes repatriation of cash from Australia in Q4 10.7% Re-financed portion of Term Loan with Senior Notes
Slide 20: Strategically Prioritize Free Cash Flow to Enhance Value
Strategically Prioritize Free Cash Flow to Enhance Value Capital Allocation DE, ee ST Fourth Quarter FY 18 Results PrestigeBrands 20
Slide 21: IV. FY 19 Outlook
IV. FY 19 Outlook Hydralyie MONISTAT [imme er a
Slide 22: FY 19 Outlook
Continue to gain market share with consumers and grow categories with retailers Prestige’s portfolio of need-based brands continues to be well positioned for future long-term growth, despite macro headwinds at retail Revenue growth of +0.5% to +1.5% ($1,046 to $1,056 million) – Expect consumpt
Slide 23: Continuing Our Long-Term Value Creation Strategy
Continuing Our Long-Term Value Creation Strategy Upside Potential LL Shareholder Value Enhancement ———— 7 nn ry vs nesvits PrestigeBrands 2; Long-Term E.P.S. Growth
Slide 24: Daman bear a
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Slide 25: Non-GAAP footnotes
(1) Organic Revenue Growth and Proforma Revenue Growth are Non-GAAP financial measures and are reconciled to the most closely related GAAP financial measure in the attached Reconciliation Schedules and / or our earnings release in the “About Non-GAAP Financial Measures” section. (2) Total company co
Slide 26: Organic and proforma revenue reconciliation
Three Months Ended Mar. 31, Year Ended Mar. 31, 2018 2017 2018 2017 (In Thousands) GAAP Total Revenues $ 255,965 $ 240,670 $ 1,041,179 $ 882,060 Revenue Growth 6.4% 18.0% Adjustments: Revenue associated with acquisitions (14,699) - (175,391) - Revenues associated with divested brands - (116) - (23,0
Slide 27: Gross profit and A&P reconciliation
Three Months Ended Mar. 31, Year Ended Mar. 31, Three Months Ended Mar. 31, Year Ended Mar. 31, 2018 2017 2018 2017 2018 2017 2018 2017 (In Thousands) (In Thousands) GAAP Total Revenues $ 255,965 $ 240,670 $ 1,041,179 $ 882,060 GAAP Advertising and Promotion Expense $ 35,319 $ 41,450 $ 147,286 $ 128
Slide 28: G&A reconciliation
Three Months Ended Mar. 31, Year Ended Mar. 31, 2018 2017 2018 2017 (In Thousands) GAAP General and Administrative Expense $ 21,891 $ 28,760 $ 85,001 $ 89,143 GAAP General and Administrative Expense as a Percentage of GAAP Total Revenue 8.6% 11.9% 8.2% 10.1% Adjustments: Integration, transition and
Slide 29: EBITDA reconciliation
Three Months Ended Mar. 31, Year Ended Mar. 31, 2018 2017 2018 2017 (In Thousands) GAAP Net Income (Loss) $ (39,687) $ 11,090 $ 339,570 $ 69,395 Interest expense, net 26,838 32,832 105,879 93,343 Provision (benefit) for income taxes (12,875) 7,712 (232,484) 41,455 Depreciation and amortization 8,045
Slide 30: Historical EBITDA reconciliation
2012 2013 2014 2015 2016 2017 2018 GAAP Net Income (Loss) $ 37,212 $ 65,505 $ 72,615 $ 78,260 $ 99,907 $ 69,395 $ 339,570 Interest Expense, net 41,320 84,407 68,582 81,234 85,160 93,343 105,879 Provision (benefit) for income taxes 23,945 40,529 29,133 49,198 57,278 41,455 (232,484) Depreciation and
Slide 31: Adjusted EPS reconciliation
Three Months Ended Mar. 31, Year Ended Mar. 31, 2018 2017 2018 2017 Net Net Net Income EPS Income EPS Net Income EPS Income EPS (In Thousands, except per share data) GAAP Net Income (Loss) $ (39,687) $ (0.74) $ 11,090 $ 0.21 $ 339,570 $ 6.34 $ 69,395 $ 1.30 Adjustments: Inventory step-up charges and
Slide 32: Historical Adjusted EPS reconciliation
2012 2013 2014 2015 2016 2017 2018 Net Net Net Net Net Net Net Income EPS Income EPS Income EPS Income EPS Income EPS Income EPS Income EPS GAAP Net Income $ 37,212 $0.73 $ 65,505 $ 1.27 $ 72,615 $ 1.39 $ 78,260 $ 1.49 $ 99,907 $ 1.88 $ 69,395 $ 1.30 $ 339,570 $ 6.34 Adjustments Additional expense a
Slide 33: Free cash flow reconciliation
Three Months Ended Mar. 31, Year Ended Mar. 31, 2018 2017 2018 2017 (In Thousands) GAAP Net Income (Loss) $ (39,687) $ 11,090 $ 339,570 $ 69,395 Adjustments: Adjustments to reconcile net income (loss) to net cash provided by operating activities as shown in the Statement of Cash Flows 103,215 21,447
Slide 34: Historical free cash flow reconciliation
2012 2013 2014 2015 2016 2017 2018 GAAP Net Income $ 37,212 $ 65,505 $ 72,615 $ 78,260 $ 99,907 $ 69,395 $ 339,570 Adjustments Adjustments to reconcile net income to net cash provided by operating activities as shown in the statement of cash flows 35,674 59,497 52,562 65,998 98,181 92,613 (113,698)
Slide 35: 2019 Projected Free Cash Flow
2019 Projected Free Cash Flow (In millions) Projected FY'19 GAAP Net cash provided by operating activities $ 228 Additions to property and equipment for cash (13) Projected Non-GAAP Free Cash Flow $ 215
Prestige Brands Holdings — Q4 FY2018 Earnings Presentation on 6ix