Prestige Consumer Healthcare Inc. · NYSE:PBH
Prestige Consumer Healthcare — Prestige Brands Holdings — Q2 FY2017 Earnings Presentation
26 slides from Prestige Consumer Healthcare's earnings presentation, Nov 3, 2016
Slide 1: Review of Second Quarter FY 17 Results
—,_ 7. PrestigeBrands Review of Second Quarter FY 17 Results November 3, 2016
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, expansion of mar
Slide 3: Agenda for Today's Discussion
Agenda for Today's Discussion I. Performance Highlights II. Financial Oueruiew Ill. FY 17 Outloo� and the Road Ahead Second �u arter FY 17 Results 3
Slide 4: I. Performance Highlights
I. Performance Highlights Dramamine· Co 41BM#@R+ Cli!Gr eyes® MONISTAT� � (§$1,ffl Debrox�
Slide 5: Invest for Growth portfolio definition
* Invest for Growth portfolio comprised of Core OTC brands and International; reported on a constant currency basis. Core OTC brands reflect: Monistat (after Q2 FY 16), BC/Goody’s, Clear Eyes, Dramamine, Debrox, Chloraseptic, Luden’s, Little Remedies, Compound W, Nix (after Q2 FY 16), Beano, Efferde
Slide 6: Q2 performance highlights
Q2 Revenue of $215.1 million, up 4.4% versus PY Q2 — Organic growth of (0.6%)(1) on a constant currency basis as top 5 retailers reduced inventory levels in the quarter — Revenue growth of +0.9%(1) for Invest for Growth* portfolio — DenTek contributed $17.2 million of revenue during the quarter, c
Slide 7: Invest for Growth portfolio revenue growth
Invest for Growth portfolio is comprised of Core OTC brands and International; reported on a costant currency basis. (See slide 5 for additional details.)*
Slide 8: Consumption and organic revenue growth
Source: Data reflects retail dollar sales percentage growth versus prior period for consumption growth and organic revenue growth. FY 15 and FY 16 data shown as previously presented for Core OTC. Q1 and Q2 FY 17 data for Invest for Growth portfolio comprised of Core OTC brands and International. (Se
Slide 9: Shipments lagging consumption at top retailers
Shipments to five largest mass and drug accounts have lagged consumption over the last six quarters as retailers continue to manage inventory levels In Q2 FY 17 alone, consumption in these accounts outpaced shipments by over $8.2 million Adjusted for this difference, organic revenue growth for
Slide 10: Invest for Growth strategy
Expand Domestic And Int’l Distribution Develop Alternate Channels and E-commerce Increase Shelf Presence in UK and Germany Use Digital To Drive Brand Awareness Target High Value Consumers Leverage Scale to Drive Efficiencies Dental Professional Marketing Secure the Hygienist Recommendation
Slide 11: Nix brand example
Source: IRI MULO period ending 10-2-16. Expanding Product Offerings: New Nix Ultra kills a resistant form of Lice called “Super Lice” Innovative Marketing: Nix partnered with Google and IRI to develop the first ever Lice Tracker. Now consumers and Healthcare Professionals can get real-time infor
Slide 12: II. Financial Overview
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Slide 13: Solid overall financial performance in the quarter
Solid overall financial performance in the quarter − Revenue of $215.1 million, an increase of 4.4% − Adjusted EPS of $0.63(2), up 5.0% − Adjusted Free Cash Flow of $49.4 million(2), an increase of 6.9% $215.1 $78.1 $49.4 $206.1 $75.6 $46.2 Total Revenue Adjusted EBITDA Adjusted EPS Adjusted Free
Slide 14: Q2 FY17 income statement summary
Revenue growth of +4.4% – Organic growth of (0.6%) excluding the impact of Fx(1) – DenTek contributed $17.2 million of revenue during the quarter Gross Margin of 57.6% A&P 13.3% of Revenue, $0.7 million more than Q2 FY 16 Adjusted EBITDA Margin of 36.3%(2) Adjusted Net Income +6.2%(2) over
Slide 15: Net debt, leverage and free cash flow
Net Debt at 9/30/16 of $1,472 million comprised of: – Cash on hand of $30 million – $752 million of term loan and revolver – $750 million of bonds Leverage ratio(3) of 4.5x – Leverage below prior year level of 5.0x, including acquisition of DenTek in Q4 FY 16 Dollar values in millions. * 1H FY 1
Slide 16: III. FY 17 Outlook and the Road Ahead
Ill. FY 17 Outlook and the Road Ahead Dramamine· Co 41BM#@R+ Cli!Gr eyes® MONISTAT� � (§$1,ffl Go!'!1f.!-'!!ne Debrox· Ca re na
Slide 17: FY17 outlook
Revenue growth of +4% to +6% — 1H +5.0% to +7.0% — 2H +2.5% to +4.5% — Organic growth of +1.5% to +2.0% Revenue growth of +4.5% to +6.0% — 1H Actual +6.6% — No change — Continuing to expect organic growth of 1.5% to 2.0% in 2H Adjusted EPS +6% to +9% ($2.30 to $2.36)(5) No change Adjusted
Slide 18: Investment highlights and road ahead
Portfolio of recognizable brands in attractive consumer health industry Established expertise in brand- building and product innovation Demonstrated ability to gain market share long-term Target revenue contribution from Core OTC and International brands from ~80% to ~85% Strong and consis
Slide 19: Second Quarter FY 17 Results
Care Second Qu arter FY 17 Results �,.
Slide 20: Footnotes
(1) Organic Revenue Growth on a constant currency basis is a Non-GAAP financial measure and is reconciled to its most closely related GAAP financial measure in our earnings release in the “About Non-GAAP Financial Measures” section. (2) Adjusted G&A, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted
Slide 21: Organic revenue reconciliation
Three Months Ended Sept. 30, Six Months Ended Sept. 30, 2016 2015 2016 2015 (In Thousands) GAAP Total Revenues $ 215,052 $ 206,065 $ 424,627 $ 398,197 Adjustments: DenTek revenues (17,214) - (33,841) - Revenues associated with divested brands - (6,922) - (6,922) Total adjustments (17,214) (6,922) (3
Slide 22: Adjusted G&A reconciliation
Three Months Ended Sept. 30, Six Months Ended Sept. 30, 2016 2015 2016 2015 (In Thousands) GAAP General and Administrative Expense $ 18,795 $ 16,462 $ 38,252 $ 34,051 Adjustments: Costs Associated with CEO transition - - - 1,406 Legal and professional fees associated with acquisitions and divestitur
Slide 23: Adjusted EBITDA reconciliation
Three Months Ended Sept. 30, Six Months Ended Sept. 30, 2016 2015 2016 2015 (In Thousands) GAAP Net (Loss) Income $ 32,195 $ 31,803 $ 26,664 $ 57,976 Interest expense, net 20,830 20,667 41,957 42,551 (Benefit) provision for income taxes 18,033 17,428 14,651 31,425 Depreciation and amortization 6,016
Slide 24: Adjusted net income and EPS reconciliation
Three Months Ended Sept. 30, Six Months Ended Sept. 30, 2016 2015 2016 2015 Net Income EPS Net Income EPS Net Income EPS Net Income EPS (In Thousands) GAAP Net Income $ 32,195 $ 0.60 $ 31,803 $ 0.60 $ 26,664 $ 0.50 $ 57,976 $ 1.09 Adjustments: Costs associated with CEO transition - - - - - - 1,406 0
Slide 25: Adjusted free cash flow reconciliation
Three Months Ended Sept. 30, Six Months Ended Sept. 30, 2016 2015 2016 2015 (In Thousands) GAAP Net (Loss) Income $ 32,195 $ 31,803 $ 26,664 $ 57,976 Adjustments: Adjustments to reconcile net (loss) income to net cash provided by operating activities as shown in the Statement of Cash Flows 9,592 20,
Slide 26: 2017 projected EPS and free cash flow reconciliation
2017 Projected EPS Low High Projected FY'17 GAAP EPS $ 1.55 $ 1.61 Adjustments: Costs associated with DenTek integration 0.08 0.08 Loss on sale of assets 0.67 0.67 Total Adjustments 0.75 0.75 Projected Non-GAAP Adjusted EPS $ 2.30 $ 2.36 2017 Projected Free Cash Flow (In millions) Projected FY'17 GA
Prestige Brands Holdings — Q2 FY2017 Earnings Presentation on 6ix