Prestige Consumer Healthcare Inc. · NYSE:PBH
Prestige Consumer Healthcare — Prestige Brands Holdings — Q2 FY2018 Earnings Presentation
26 slides from Prestige Consumer Healthcare's earnings presentation, Nov 2, 2017
Slide 1: Review of Second Quarter FY 18 Results
Exhibit 99.2 —,_ = PrestigeBrands Review of Second Quarter FY 18 Results November 2, 2017
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
Oe Agenda for Today's Discussion |. Performance Highlights ll. Financial Overview Ill. FY 18 Outlook and the Road Ahead
Slide 4: I. Performance Highlights
I. Performance Highlights uimmers Eve ~~ Dramami Len : fi @ IF
Slide 5: Solid Consumption Trends in Second Quarter FY 18
Solid Consumption Trends in Second Quarter FY 18 Ne rae ae Second Quarter FY 18 Results PrestigeBrands_ ;
Slide 6: Q2 Revenue of $258.0 million, up 20.0%
Q2 Revenue of $258.0 million, up 20.0% versus PY Q2 Revenue decline of 0.3%(1) pro forma for the Fleet acquisition – Revenue impacted by ~$8 million from timing of customer deliveries at quarter-end – Expect delivery patterns to normalize over the next few months Organic Revenue growth met exp
Slide 7: Strong Financial Performance in First Half FY 18
Strong Financial Performance in First Half FY 18 Revenue of $514.6 million, up 21.2% versus 1H FY 17 Revenue increase of 1.2%‘) pro forma for Fleet; ~3% normalized for shipment timing Adjusted EPS of $1.27"), up 4.1% versus 1H FY 17 Adjusted Free Cash Flow of $111.4 million), up 11.0% versus 1H FY 1
Slide 8: Shipments in Transit
Shipments in Transit ($MM) Comments Timing of customer deliveries impacted by increased transit times in September vs prior quarters – Revenue is recognized upon delivery to a customer Q2 Revenue growth pro forma for Fleet would have been approximately 3% with $8MM adjustment for normalized ship
Slide 9: Category Leading, Trusted Brands
Category Leading, Trusted Brands On Trend & Innovative Retail Traffic Driver E-Commerce Brand of Choice #1 share brands represent ~60% of sales Brands drive long-term category growth Consumer driven innovation Aligned with macro- Health & Wellness trend Need-based products sought by consum
Slide 10: Strong Innovation Pipeline
Strong Innovation Pipeline Ongoing brand initiatives driven by consumer insights Simply launched spring 2017; largely incremental to brand and category Appealing to younger, millennial consumers Significant Runway for Growth 2017 Target Household penetration long-term opportunity Many non-
Slide 11: II. Financial Overview
ll. Financial Overview uimmer'’s Eve’ Clear eyes.
Slide 12: Overall financial performance impacted by timing of deliveries
Overall financial performance in Q2 and 1H FY 18 impacted by timing of deliveries − Q2 Revenue of $258.0 million, an increase of 20.0% vs prior year − Q2 Adjusted EBITDA(3) of $86.5 million, an increase of 10.7% vs prior year − Q2 Adjusted EPS of $0.61(3), a decrease of 3.2% vs prior year, and 1H
Slide 13: Q2 FY 18 income statement summary
Q2 FY 18 Q2 FY 17 % Chg Q2 FY 18 Q2 FY 17 % Chg Total Revenue 258.0$ 215.1$ 20.0% 514.6$ 424.6$ 21.2% Adjusted Gross Margin 145.2 124.0 17.2% 291.3 245.6 18.6% % Margin 56.3% 57.6% 56.6% 57.8% Adjusted A&P 39.4 28.6 37.9% 76.3 56.2 35.7% % Total Revenue 15.3% 13.3% 14.8% 13.2% Adjusted G&A 20.7 17.3
Slide 14: Net debt, leverage and free cash flow
Net Debt(3) at September 30 of $2,074 million comprised of: – Cash on hand of $43 million – $1,367 million of term loan and revolver – $750 million of bonds Leverage ratio(4) of 5.5x as of Q2 and expect approximately 5.0x at the end of FY 18 Industry leading FCF conversion of 164% in 1H FY 18
Slide 15: III. FY 18 Outlook and the Road Ahead
Ill. FY 18 Outlook and the Road Ahead E| Suinmers Eve Dramamine’ enick —~ ag ; a LEfferdent, ear | Goodsys im Chloraséptic 125.) = Hydraly MONISTAT |G
Slide 16: FY 18 outlook
Continued solid consumption trends in our largest and category leading brands Continue to gain share across portfolio A focus on winning with the consumer continues positions us for long-term growth despite continued headwinds at retail Revenue growth of +18% to +20% ($1,040 to $1,060 millio
Slide 17: Second Quarter FY 18 Results
Sn Second Quarter FY 18 Results PrestigeBrands 17
Slide 18: Footnotes and non-GAAP definitions
(1) Organic Revenue Growth and Proforma Revenue Growth are Non-GAAP financial measures and are reconciled to the most closely related GAAP financial measure in the attached Reconciliation Schedules and / or our earnings release in the “About Non-GAAP Financial Measures” section. (2) Total company co
Slide 19: Organic and pro forma revenue reconciliation
Three Months Ended Sept. 30, Six Months Ended Sept. 30, 2017 2016 2017 2016 (In Thousands) GAAP Total Revenues 258,026$ 215,052$ 514,599$ 424,627$ Revenue Growth 20.0% 21.2% Adjustments: Revenue associated with acquisitions (51,662) - (106,549) - Revenues associated with divested brands - (5,945) -
Slide 20: Adjusted gross margin reconciliation
Three Months Ended Sept. 30, Six Months Ended Sept. 30, 2017 2016 2017 2016 (In Thousands) GAAP Total Revenues 258,026$ 215,052$ 514,599$ 424,627$ GAAP Gross Profit 144,098$ 123,965$ 287,574$ 245,556$ Adjustments: Integration, transition and other costs associated with acquisitions 1,143 - 3,719 - T
Slide 21: Adjusted advertising and promotion reconciliation
Three Months Ended Sept. 30, Six Months Ended Sept. 30, 2017 2016 2017 2016 (In Thousands) GAAP Advertising and Promotion Expense 39,188$ 28,592$ 76,132$ 56,227$ GAAP Advertising and Promotion Expense as a Percentage of GAAP Total Revenue 15.2% 13.3% 14.8% 13.2% Adjustments: Integration, transition
Slide 22: Adjusted G&A reconciliation
Three Months Ended Sept. 30, Six Months Ended Sept. 30, 2017 2016 2017 2016 (In Thousands) GAAP General and Administrative Expense 21,567$ 18,795$ 41,903$ 38,252$ GAAP General and Administrative Expense as a Percentage of GAAP Total Revenue 8.4% 8.7% 8.1% 9.0% Adjustments: Integration, transition an
Slide 23: EBITDA reconciliation
Three Months Ended Sept. 30, Six Months Ended Sept. 30, 2017 2016 2017 2016 (In Thousands) GAAP Net Income 30,705$ 32,195$ 64,464$ 26,664$ Interest expense, net 26,836 20,830 53,177 41,957 Provision for income taxes 18,616 18,033 37,545 14,651 Depreciation and amortization 8,534 6,016 17,041 12,848
Slide 24: Adjusted EPS reconciliation
Three Months Ended Sept. 30, Six Months Ended Sept. 30, 2017 2016 2017 2016 Net Income EPS Net Income EPS Net Income EPS Net Income EPS (In Thousands, except per share data) GAAP Net Income 30,705$ 0.57$ 32,195$ 0.60$ 64,464$ 1.20$ 26,664$ 0.50$ Adjustments: Integration, transition and other costs a
Slide 25: Adjusted free cash flow reconciliation
Three Months Ended Sept. 30, Six Months Ended Sept. 30, 2017 2016 2017 2016 (In Thousands) GAAP Net Income 30,705$ 32,195$ 64,464$ 26,664$ Adjustments: Adjustments to reconcile net income to net cash provided by operating activities as shown in the Statement of Cash Flows 21,530 9,842 43,513 67,188
Slide 26: 2018 projected EPS and free cash flow reconciliation
2018 Projected EPS Low High Projected FY'18 GAAP EPS 2.51$ 2.61$ Adjustments: Costs associated with Fleet integration 0.07 0.07 Total Adjustments 0.07 0.07 Projected Non-GAAP Adjusted EPS 2.58$ 2.68$ 2018 Projected Free Cash Flow (In millions) Projected FY'18 GAAP Net Cash provided by operating acti
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