Prestige Brands Holdings, Inc. Reports Fiscal 2012 Third Quarter Sales Increase Of 17.3%; Operating Income Up 81.4%; Acquisition Of 15 OTC Brands From GSK Completed

Prestige Brands Holdings, Inc. (NYSE: PBH) today announced results for the fiscal 2012 third quarter ended December 31, 2011, including net revenues of $106.3 million, an increase of 17.3% over the prior year's comparable quarter of $90.6 million. Net revenues for the nine month period of fiscal 2012 were $307.1 million, an increase of 27.9% over the prior year's comparable period of $240.1 million. This growth is largely driven by the fiscal 2011 acquisitions of Blacksmith Brands and Dramamine®, and the growth of the Company's legacy core Over-The-Counter (OTC) products. Net revenues for the Company's legacy core OTC brands were 3.2% and 5.7% higher than the prior year’s comparable quarter and nine month periods, respectively, representing the sixth consecutive quarter of organic growth, excluding acquisitions.

Operating income for the third quarter of fiscal 2012 was $23.6 million, 81.4% higher than the prior year's comparable quarter of $13.0 million. Operating income for the first nine months of fiscal 2012 was $80.3 million, 39.5% higher than the prior year's comparable period of $57.5 million. These increases include the impact of the acquisitions completed in fiscal 2011, as well as expenses related to the acquisition of the brands from GSK.

Income from continuing operations for the third quarter of fiscal 2012 was $9.5 million, compared to $2.1 million in the prior year's comparable quarter. The current and prior year's fiscal third quarters were impacted by acquisition-related costs of $3.0 million and $8.2 million, respectively, net of tax of $1.9 million and $3.1 million, respectively. Excluding the impact of these charges, income from continuing operations for the third quarter of fiscal 2012 would have been $12.5 million, 21.5% higher than the prior year's comparable quarter of $10.3 million. Income from continuing operations for the first nine months of fiscal 2012 was $37.2 million, 63.5% higher than the prior year's comparable period of $22.8 million.

The current fiscal nine month period included the net impact of the $3.0 million of GSK acquisition-related costs, which was largely offset by a net gain associated with a legal settlement, and other net costs totaling approximately $2.9 million. The prior year's fiscal nine month period included the net impact of the $8.2 million Blacksmith acquisition-related costs. Excluding the impact of these charges, income from continuing operations for the first nine months of fiscal 2012 would have been $37.3 million, 20.7% higher than the prior year's comparable quarter of $30.9 million.

Reported net income for the third quarter of fiscal 2012 was $9.5 million, or $0.19 per diluted share, 336.6% higher than the prior year's comparable quarter of $2.2 million, or $0.04 per diluted share. Excluding the costs mentioned above in each of the respective periods, net income for the current third fiscal quarter would have been $12.5 million, or EPS of $0.25, compared to $10.3 million in the prior year's comparable quarter, or EPS of $0.21.

Reported net income for the first nine months of fiscal 2012 was $37.2 million, or 63.2% higher than the prior year's comparable period of $22.8 million. Excluding the amounts mentioned above in each of the respective periods, net income would have been $37.3 million for the first nine months of fiscal 2012, compared to $30.9 million in the prior fiscal year period. Excluding the costs referenced above, earnings per diluted share would have been $0.74 for the first nine months of fiscal 2012 compared to $0.62 in the prior year's nine month period, an increase of 19.4%.

Subsequent To The Close of the Quarter

On January 31, 2012, the Company completed the acquisition of fifteen of the seventeen OTC brands it agreed to purchase from GlaxoSmithKline(GSK), previously announced on December 20, 2011. The acquisition of the remaining two brands from GSK is expected to be completed during the first half of the year. The purchase price for the acquisition (inclusive of inventory) was $615 million, subject to a customary post-closing inventory adjustment. On January 31, 2012, to fund the acquisition, the Company completed the financing of additional bond and bank debt of $250 million and $660 million, respectively, the repayment of existing senior secured credit facilities and the payment of related transaction expenses. The acquisition of the GSK brands is the largest in the Company's history and a major step toward its commitment to its long-term OTC strategy.

Commentary and Outlook

Matthew M. Mannelly, CEO, commented, “We are pleased with our third quarter results, which reflect the successful execution of our stated strategy of core OTC growth combined with value-added acquisitions. We registered strong growth from our nine core OTC brands, resulting in solid market share gains across these categories. Both the Little Remedies® brand and the PediaCare® brand, which we acquired last year, experienced impressive revenue and share gains for both the quarter and the nine month year over year periods, despite a very soft cough/cold season. In addition, our diversified portfolio of OTC brands and platforms helped offset the headwinds of a tough cough/cold season," he said.

“Our disciplined approach to creating shareholder value continues to strategically transform the Company. The purchase of the seventeen well-known consumer brands from GSK represents the largest acquisition in our history. The brands are an excellent strategic and operational fit for Prestige, adding two new platforms and four new core brands to our business. They are well-aligned with our operating model, requiring limited incremental overhead, and are highly cash generative. We are confident we can rapidly transition these brands into our portfolio based on our track record of successful integration of previous acquisitions. Prestige's industry-leading Free Cash Flow will help us rapidly delever," he said.

"Our outlook for Q4 is one of cautious optimism given the challenging economic and retail environment, as well as the overall incident level of the cough/cold season to date. The GSK acquisition is expected to add approximately $30 million to our fourth quarter revenue and be neutral to EPS, excluding transaction-related and integration costs," he said.

Results by Segment

OTC Healthcare

Net revenues for the OTC Healthcare segment in the third quarter of fiscal 2012 were $84.9 million, or 25.9% higher than the prior year third quarter of $67.5 million. The revenue increase in the OTC Healthcare segment was led by strong sales of Little Remedies®, and The Doctor's®. In the third quarter of fiscal 2012, the five legacy core OTC brands increased 3.2% compared to the same period in the prior year and represents the sixth consecutive quarter of organic revenue increases for the Company's five legacy core OTC brands.

Net revenues for the OTC Healthcare segment in the nine month period of fiscal 2012 were $235.3 million, or 44.3% higher than the prior year's comparable period of $163.0 million. The increase in revenues is primarily due to revenues from the acquired Blacksmith brands and Dramamine®, and also to higher revenues from our five legacy core OTC brands, which benefited from increased advertising and promotional expenditures.

Household Cleaning

Net revenues for the Household Cleaning segment were $21.3 million for the third quarter of fiscal 2012, 7.8% lower than the prior year's comparable quarter of $23.1 million. Net revenues for the Household Cleaning segment were $71.8 million for the first nine months of fiscal 2012, 6.9% lower than the prior year's comparable nine month period of $77.1 million. This segment continues to be impacted by a difficult retail environment for household cleaning products. For both the third fiscal quarter and the nine month periods, lower sales of Comet® cleanser were partially offset by increased demand for Spic and Span®.

Free Cash Flow and Debt

Free Cash Flow is a "non-GAAP financial measure" and is presented here because management believes it is a commonly used measure of liquidity, indicative of cash available for debt repayment and acquisitions. Non-GAAP Free Cash Flow is defined and reconciled to GAAP Net Cash Provided by Operating Activities in the section entitled, “About Non-GAAP Financial Measures” below. The Company's Free Cash Flow for the third fiscal quarter ended December 31, 2011 was $14.5 million, a decrease of $4.2 million over the prior year's comparable quarter Free Cash Flow of $18.7 million. The Company's Free Cash Flow for the nine month period of fiscal 2012 was $47.6 million, a decrease of $13.6 million over the prior year comparable nine month period's Free Cash Flow of $61.2 million. The decrease in Free Cash Flow is primarily due to higher working capital usage, largely offset by the increased company performance primarily resulting from the acquisitions of Blacksmith Brands and Dramamine® as well as the growth of the legacy core OTC brands.

Total indebtedness at December 31, 2011 was $434.0 million, reflecting debt repayments of $58.0 million in the nine month period of the current fiscal year. At December 31, 2011, we had $40.0 million available for borrowing under our revolving credit facility and $4.4 million of cash on hand.

Conference Call and Accompanying Slide Presentation

The Company will host a conference call to review its third quarter results on February 9, 2012 at 8:30 am EST. The toll-free dial-in numbers are 866-700-7477 within North America and 617-213-8840 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 Company's 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 71452751.

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 now 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® analgesics, Gaviscon® antacid and Beano® gas treatment.

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. Forward-looking statements in this news release include, without limitation, statements regarding the impact of the acquired GSK brands on our operating results and financial condition, our ability to integrate and develop the brands that we acquired during fiscal year 2011 and 2012, A&P spending, and our outlook and plans for the markets in which we compete, including the severity of the cough/cold season. These statements are based on management's estimates and assumptions with respect to future events and financial performance and are believed to be reasonable, although they are inherently uncertain and difficult to predict. Actual results could differ materially from those expected as a result of a variety of factors. A discussion of 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.
   

Prestige Brands Holdings, Inc.

Consolidated Statements of Operations

(Unaudited)
 

Three Months EndedDecember 31,

Nine Months EndedDecember 31,
(In thousands, except per share data) 2011   2010 2011   2010
Revenues
Net sales $ 105,799 $ 90,077 $ 304,678 $ 238,086
Other revenues 451   531   2,411   2,061  
Total revenues 106,250 90,608 307,089 240,147
 
Cost of Sales
Cost of sales (exclusive of
depreciation shown below) 51,128   46,596   148,193   115,574  
Gross profit 55,122   44,012   158,896   124,573  
 
Operating Expenses
Advertising and promotion 15,274 13,049 38,580 28,775
General and administrative 13,655 15,426 32,366 30,941
Depreciation and amortization 2,563   2,513   7,683   7,336  
Total operating expenses 31,492   30,988   78,629   67,052  
 
Operating income 23,630   13,024   80,267   57,521  
 
Other (income) expense
Interest income (1 ) (4 )
Interest expense 8,117 7,674 24,977 18,508
Gain on settlement (5,063 )
Loss on extinguishment of debt       300  
Total other expense 8,116   7,674   19,910   18,808  
 
Income from continuing
operations before income taxes 15,514 5,350 60,357 38,713
Provision for income taxes 6,004   3,204   23,130   15,948  
Income from continuing operations 9,510 2,146 37,227 22,765
 
Discontinued Operations
Income from discontinued
operations, net of income tax 32 591
Loss on sale of discontinued
operations, net of income tax       (550 )
Net income $ 9,510   $ 2,178   $ 37,227   $ 22,806  
 
Basic earnings per share:
Income from continuing operations $ 0.19 $ 0.04 $ 0.74 $ 0.46
Income from discontinued
operations and loss on sale of
discontinued operations        
Net income $ 0.19   $ 0.04   $ 0.74   $ 0.46  
 
Diluted earnings per share:
Income from continuing operations $ 0.19 $ 0.04 $ 0.73 $ 0.45
Income from discontinued
operations and loss on sale of
discontinued operations        
Net income $ 0.19   $ 0.04   $ 0.73   $ 0.45  
 
Weighted average shares outstanding:
Basic 50,307   50,085   50,256   50,059  
Diluted 50,684   50,533   50,667   50,260  
   

Prestige Brands Holdings, Inc.

Consolidated Balance Sheets

(Unaudited)
 
(In thousands) December 31, March 31,
Assets 2011 2011
Current assets
Cash and cash equivalents $ 4,439 $ 13,334
Accounts receivable, net 50,163 44,393
Inventories 43,579 39,751
Deferred income tax assets 5,540 5,292
Prepaid expenses and other current assets 2,162   4,812  
Total current assets 105,883 107,582
 
Property and equipment, net 1,238 1,444
Goodwill 153,696 154,896
Intangible assets, net 779,242 786,361
Other long-term assets 5,788 6,635
   
Total Assets $ 1,045,847   $ 1,056,918  
 
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable $ 23,977 $ 21,615
Accrued interest payable 5,181 10,313
Other accrued liabilities 23,905   22,280  
Total current liabilities 53,063   54,208  
 
Long-term debt
Principal amount 434,000 492,000
Less unamortized discount (4,368 ) (5,055 )
Long-term debt, net of unamortized discount 429,632   486,945  
 
Deferred income tax liabilities 161,502   153,933  
 
Total Liabilities 644,197   695,086  
 
 
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 - 50,433 shares at December 31, 2011 and 50,276 shares at March 31, 2011 504 503
Additional paid-in capital 390,863 387,932
Treasury stock, at cost - 181 shares at December 31, 2011 and 160
shares at March 31, 2011 (687 ) (416 )
Accumulated other comprehensive loss, net of tax (70 )
Retained earnings (accumulated deficit) 11,040   (26,187 )
Total Stockholders' Equity 401,650   361,832  
 
Total Liabilities and Stockholders' Equity $ 1,045,847   $ 1,056,918  
 

Prestige Brands Holdings, Inc.

Consolidated Statements of Cash Flows

(Unaudited)
 
Nine Months Ended December 31,
(In thousands) 2011   2010
Operating Activities
Net income $ 37,227 $ 22,806
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 7,683 7,565
Loss on sale of discontinued operations 890
Deferred income taxes 7,321 5,591
Amortization of deferred financing costs 847 767
Stock-based compensation costs 2,360 2,751
Loss on extinguishment of debt 300
Amortization of debt discount 687 480
Loss on disposal of equipment 131
Changes in operating assets and liabilities
Accounts receivable (5,816 ) 7,330
Inventories (3,850 ) 2,814
Inventories held for sale 1,114
Prepaid expenses and other current assets 2,650 3,166
Accounts payable 2,392 (1,054 )
Accrued liabilities (3,508 ) 7,008  
Net cash provided by operating activities 47,993   61,659  
 
Investing Activities
Purchases of equipment (358 ) (405 )
Proceeds from sale of discontinued operations 4,122
Acquisition of Blacksmith, net of cash acquired (202,044 )
Proceeds from escrow of Blacksmith acquisition 1,200    
Net cash provided by (used in) investing activities 842   (198,327 )
 
Financing Activities
Proceeds from issuance of Senior Notes 100,250
Proceeds from issuance of Senior Term Loan 112,936
Payment of deferred financing costs (648 )
Repayment of long-term debt (58,000 ) (33,587 )
Proceeds from exercise of stock options 572 150
Shares surrendered as payment of tax withholding (271 ) (264 )
Net cash (used in) provided by financing activities (57,699 ) 178,837  
 
Effects of exchange rate changes on cash and cash equivalents (31 )
(Decrease) increase in cash and cash equivalents (8,895 ) 42,169
Cash and cash equivalents - beginning of period 13,334   41,097  
 
Cash and cash equivalents - end of period $ 4,439   $ 83,266  
 
Interest paid $ 28,503   $ 13,354  
Income taxes paid $ 12,699   $ 4,096  
 

Prestige Brands Holdings, Inc.

Consolidated Statements of Operations

Business Segments

(Unaudited)
 
Three Months Ended December 31, 2011
OTC

Healthcare
  Household

Cleaning
  Consolidated
(In thousands)
Net sales $ 84,711 $ 21,088 $ 105,799
Other revenues 195   256   451
Total revenues 84,906 21,344 106,250
Cost of sales 35,329   15,799   51,128
Gross profit 49,577 5,545 55,122
Advertising and promotion 14,170   1,104   15,274
Contribution margin $ 35,407   $ 4,441   39,848
Other operating expenses 16,218
Operating income 23,630
Other expense 8,116
Provision for income taxes 6,004
Income from continuing operations 9,510
Income from discontinued operations, net of income tax
Loss on sale of discontinued operations, net of income tax
Net income $ 9,510
  Three Months Ended December 31, 2010
OTC

Healthcare
  Household

Cleaning
  Consolidated
(In thousands)
Net sales $ 67,287 $ 22,790 $ 90,077
Other revenues 173   358   531
Total revenues 67,460 23,148 90,608
Cost of sales 30,827   15,769   46,596
Gross profit 36,633 7,379 44,012
Advertising and promotion 11,842   1,207   13,049
Contribution margin $ 24,791   $ 6,172   30,963
Other operating expenses 17,939
Operating income 13,024
Other expense 7,674
Provision for income taxes 3,204
Income from continuing operations 2,146
Income from discontinued operations, net of income tax 32
Loss on sale of discontinued operations, net of income tax
Net income $ 2,178
  Nine Months Ended December 31, 2011
OTC

Healthcare
  Household

Cleaning
  Consolidated
(In thousands)
Net sales $ 234,712 $ 69,966 $ 304,678
Other revenues 552   1,859   2,411
Total revenues 235,264 71,825 307,089
Cost of sales 97,198   50,995   148,193
Gross profit 138,066 20,830 158,896
Advertising and promotion 34,746   3,834   38,580
Contribution margin $ 103,320   $ 16,996   120,316
Other operating expenses 40,049
Operating income 80,267
Other expense 19,910
Provision for income taxes 23,130
Income from continuing operations 37,227
Income from discontinued operations, net of income tax
Loss on sale of discontinued operations, net of income tax
Net income $ 37,227
  Nine Months Ended December 31, 2010
OTC

Healthcare
  Household

Cleaning
  Consolidated
(In thousands)
Net sales $ 162,652 $ 75,434 $ 238,086
Other revenues 368   1,693   2,061  
Total revenues 163,020 77,127 240,147
Cost of sales 64,477   51,097   115,574  
Gross profit 98,543 26,030 124,573
Advertising and promotion 23,918   4,857   28,775  
Contribution margin $ 74,625   $ 21,173   95,798
Other operating expenses 38,277  
Operating income 57,521
Other expense 18,808
Provision for income taxes 15,948  
Income from continuing operations 22,765
Income from discontinued operations, net of income tax 591
Loss on sale of discontinued operations, net of income tax (550 )
Net income $ 22,806  

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, certain other legal and professional fees and acquisition-related costs. We define Non-GAAP Adjusted Income from Continuing Operations as Income from Continuing Operations before incremental interest expense to finance future acquisitions, gain on settlement, certain other legal and professional fees, acquisition-related costs, the applicable tax impacts associated with these items and the tax impacts of state tax rate adjustments and other non-deductible items. We define Non-GAAP Adjusted Net Income as Net Income before gain on settlement, certain other legal and professional fees, acquisition-related costs, income or loss from discontinued operations and the sale thereof, loss on extinguishment of debt, the applicable tax impacts associated with these items and the tax impacts of state tax rate adjustments and other non-deductible items. We define Non-GAAP Free Cash Flow as net cash provided by operating activities less cash paid for capital expenditures. Non-GAAP EBITDA, Non-GAAP Adjusted EBITDA, Non-GAAP Adjusted Net Income and Non-GAAP Free Cash Flow 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 Income from Continuing Operations, Non-GAAP Adjusted Net Income and Non-GAAP Free Cash Flow because they provide a 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. Each of Non-GAAP EBITDA, Non-GAAP Adjusted EBITDA, Non-GAAP Adjusted Income from Continuing Operations, Non-GAAP Adjusted Net Income and Non-GAAP Free Cash Flow 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 service or incur indebtedness; and (iii) we use Non-GAAP EBITDA/Non-GAAP Adjusted EBITDA and Non-GAAP Adjusted Net Income 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 Income from Continuing Operations, Non-GAAP Adjusted Net Income and Non-GAAP Free Cash Flow has limitations and you should not consider these measures in isolation from or as an alternative to GAAP measures such as operating income, income from continuing operations, 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 Income from Continuing Operations, Non-GAAP Adjusted Net Income and Non-GAAP Free Cash Flow, all of which are non-GAAP financial measures, to GAAP net income and GAAP net cash provided by operating activities, respectively, our most directly comparable financial measures presented in accordance with GAAP.

Reconciliation of GAAP Net Income to Non-GAAP Adjusted EBITDA:

  Three Months Ended December 31,
2011       2010
(In thousands)
GAAP Net Income $ 9,510 $ 2,178
Income from discontinued operations (32 )
Interest Expense, net 8,116 7,674
Income tax provision 6,004 3,204
Depreciation and amortization 2,563   2,513  
Non-GAAP EBITDA: 26,193   15,537  

Adjustments:
Inventory step-up charges associated with acquisitions 3,544
Legal and professional fees associated with acquisitions 4,890   6,927  
Total adjustments 4,890   10,471  
Non-GAAP Adjusted EBITDA $ 31,083   $ 26,008  
  Nine Months Ended December 31,
2011       2010
(In thousands)
GAAP Net Income $ 37,227 $ 22,806
Income from discontinued operations (591 )
Loss on sale of discontinued operations 550
Interest Expense, net 24,973 18,508
Income tax provision 23,130 15,948
Depreciation and amortization 7,683   7,336  
Non-GAAP EBITDA: 93,013   64,557  

Adjustments:
Gain on settlement (5,063 )
Inventory step-up charges associated with acquisitions 3,544
Legal and professional fees associated with acquisitions 5,665 6,927
Loss on extinguishment of debt   300  
Total adjustments 602   10,771  
Non-GAAP Adjusted EBITDA $ 93,615   $ 75,328  

Reconciliation of GAAP Income from Continuing Operations to Non-GAAP Adjusted Income from Continuing Operations:
  Three Months Ended December 31,
2011       2010
(In thousands)
GAAP Income from Continuing Operations $ 9,510 $ 2,146

Adjustments:
Incremental interest expense to finance Dramamine 800
Inventory step-up charges associated with acquisitions 3,544
Acquisition related costs 4,890 6,927
Tax impact of adjustments (1,892 ) (3,119 )
Total adjustments 2,998   8,152  
Non-GAAP Adjusted Income from Continuing Operations $ 12,508   $ 10,298  
  Nine Months Ended December 31,
2011       2010
(In thousands)
GAAP Income from Continuing Operations $ 37,227 $ 22,765

Adjustments:
Incremental interest expense to finance Dramamine 800
Inventory step-up charges associated with acquisitions 3,544
Gain on settlement (5,063 )
Acquisition related costs 5,665 6,927
Tax impact of adjustments (275 ) (3,119 )
Tax impact of state rate adjustments and other non-deductible items (237 )  
Total adjustments 90   8,152  
Non-GAAP Adjusted Income from Continuing Operations $ 37,317   $ 30,917  

Reconciliation of GAAP Net Income to Non-GAAP Adjusted Net Income and related Diluted Earnings Per Share:
  Three Months Ended December 31,
2011  

2011DilutedEPS
  2010  

2010DilutedEPS
(In thousands)      
GAAP Net Income $ 9,510     $ 0.19   $ 2,178     $ 0.04  

Adjustments:
Income from discontinued operations (32 )
Incremental interest expense to finance Dramamine 800 0.02
Inventory step-up charge associated with acquisitions 3,544 0.07
Legal and professional fees associated with acquisitions 4,890 0.10 6,927 0.14
Tax impact of adjustments (1,892 )   (0.04 ) (3,119 )   (0.06 )
Total adjustments 2,998     0.06   8,120     0.17  
Non-GAAP Adjusted Net Income and Adjusted EPS $ 12,508     $ 0.25   $ 10,298     $ 0.21  
  Nine Months Ended December 31,
2011  

2011DilutedEPS
  2010  

2010DilutedEPS
(In thousands)    
GAAP Net Income $ 37,227     $ 0.73   $ 22,806     $ 0.45  

Adjustments:
Income from discontinued operations (591 ) (0.01 )
Loss on sale of discontinued operations 550 0.01
Gain on settlement (5,063 ) (0.10 )
Incremental interest expense to finance Dramamine 800 0.02
Inventory step-up charge associated with acquisitions 3,544 0.07
Legal and professional fees associated with acquisitions 5,665 0.11 6,927 0.14
Tax impact of adjustments (275 ) (3,119 ) (0.06 )
Tax impact of state rate adjustments and other non-deductible items (237 )          
Total adjustments 90     0.01   8,111     0.17  
Non-GAAP Adjusted Net Income and Adjusted EPS $ 37,317     $ 0.74   $ 30,917     $ 0.62  

Reconciliation of GAAP Net Cash Provided by Operating Activities to Non-GAAP Free Cash Flow:
  Three Months Ended December 31,
2011       2010
(In thousands)      
GAAP Net cash provided by operating activities $ 14,527 $ 18,842
Additions to property and equipment for cash (51 ) (151 )
Non-GAAP Free Cash Flow $ 14,476   $ 18,691  
  Nine Months Ended December 31,
2011       2010
(In thousands)      
GAAP Net cash provided by operating activities $ 47,993 $ 61,659
Additions to property and equipment for cash (358 ) (405 )
Non-GAAP Free Cash Flow $ 47,635   $ 61,254  

Copyright Business Wire 2010

More from Press Releases

NFL Pushes for Regulation Following Supreme Court's Sports Gambling Ruling

NFL Pushes for Regulation Following Supreme Court's Sports Gambling Ruling

21st Century Fox Scoops Up Local News Stations

21st Century Fox Scoops Up Local News Stations

Walmart CEO: 'We Are Transforming Globally' With Flipkart

Walmart CEO: 'We Are Transforming Globally' With Flipkart

Three-Part FREE Webinar Series

Three-Part FREE Webinar Series

March 24 Full-Day Course Offering: Professional Approach to Trading SPX

March 24 Full-Day Course Offering: Professional Approach to Trading SPX