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Prestige Brands Holdings Inc. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: February 9, 2010 03:16PM
Prestige Brands Holdings Inc. (PBH) filed Quarterly Report for the period ended 2009-12-31.
Highlight of Business Operations:
The total purchase price for the assets was $9 million, subject to adjustments for inventory, with $8 million received upon closing, and the remaining $1 million to be paid on the first anniversary of the closing.
Revenues for 2009 were $75.4 million, a decrease of $2.5 million, or 3.2%, versus 2008. Revenues for all segments decreased versus the comparable period in the prior year. Revenues from customers outside of North America, which represent 4.5% of total revenues, increased by $347,000 or 11.5% during 2009 compared to 2008 due to stronger shipments of eye care product to our Australian distributor.
Depreciation and amortization expense was $2.6 million for 2009 versus $2.3 million for 2008. Amortization was affected by the transfer of two trademarks in the Household Cleaning segment and one trademark in the Over-the-Counter segment, aggregating $45.6 million, from indefinite-lived status to intangibles with finite lives. Commencing April 1, 2009, these intangibles are being amortized over a 20 year estimated useful life. This increase in amortization expense was partially offset by a reduction in amortization resulting from a trademark that became fully amortized at March 31, 2009, resulting in a net increase in depreciation and amortization expense of $285,000 for the period.
Net interest expense was $5.6 million during 2009 versus $7.1 million during 2008. The reduction in interest expense was primarily the result of a lower level of indebtedness combined with a reduction of variable interest rates on our senior debt. The average cost of funds decreased from 7.4% for 2008 to 6.8% for 2009 while the average indebtedness decreased from $384.9 million during 2008 to $328.8 million during 2009.
The provision for income taxes during 2009 was $7.8 million versus $4.7 million during 2008. The effective tax rate during 2009 was 43.0% versus 37.9% during 2008. The increase in the effective rate was a result of a $930,000 non-cash charge to deferred tax liability as a result of increasing the company s future effective tax rate from 37.9% to 38.3%. The increase in tax rate is a result of the divestiture of the shampoo business which increases the overall effective state tax rate on continuing operations. The new effective rate is applicable for tax years beginning after March 31, 2010.
Revenues for 2009 were $230.6 million, a decrease of $3.9 million, or 1.6%, versus 2008. Revenues for both the Over-the-Counter Healthcare and Personal Care segments increased versus the comparable period. Revenues for the Household Cleaning segment declined during the period. Revenues from customers outside of North America, which represent 4.3% of total revenues, increased by $1.1 million or 12.2% during 2009 versus 2008.