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Prestige Brands Holdings Inc. Reports Operating Results (10-Q)

November 06, 2009 | About:
10qk

10qk

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Prestige Brands Holdings Inc. (PBH) filed Quarterly Report for the period ended 2009-09-30.

Prestige Brands Holdings is a marketer and distributor of brand name over- the-counter drug personal care and household cleaning products sold throughout the United States and Canada. Key brands include Compound W wart remover Chloraseptic sore-throat relief products New-Skin liquid bandage Clear eyes and Murine eye and ear care products Little Remedies pediatric over-the-counter healthcare products Cutex nail polish remover Comet and Spic & Span household cleaner and several other well-recognized brands. Prestige Brands Holdings Inc. has a market cap of $372.6 million; its shares were traded at around $7.46 with a P/E ratio of 10.9 and P/S ratio of 1.2.

Highlight of Business Operations:

The total purchase price for the assets was $9 million, subject to adjustments for inventory, as defined, with $8 million received upon closing, and the remaining $1 million to be paid on the first anniversary of the closing.

Revenues for the three month period ended September 30, 2009 were $84.2 million, a decrease of $1.4 million, or 1.6%, versus the three month period ended September 30, 2008. Revenues for both the Over-the-Counter and Personal Care segments increased versus the comparable period in the prior year. Revenues for the Household Cleaning segment declined during the period. Revenues from customers outside of North America, which represent 5.2% of total revenues, increased by $1.7 million or 64.5% during 2009 compared to 2008 due to timing of eye care shipments to our Australian distributor and stronger sales of Chloraseptic in the United Kingdom.

Contribution Margin, defined as gross profit less advertising and promotional expenses, for the three month period ended September 30, 2009 increased $3.0 million, or 9.4%, versus the three month period ended September 30, 2008. The contribution margin increase was the result of a $3.8 million, or 27.8%, decrease in advertising and promotional spending, partially offset by the decrease in gross profit as previously discussed. The decrease in advertising and promotional spending was primarily attributable to decreases in media support and market research expenditures in the Over-the-Counter and Household Segments.

General and administrative expenses were $10.5 million for the three month period ended September 30, 2009 versus $9.4 million for the three month period ended September 30, 2008. The increase in expense was due to a $2.5 million net charge associated with the reduction in workforce and the CEO change, partially offset by favorable currency translation costs and a reduction in legal expenses.

Depreciation and amortization expense was $2.8 million for the three month period ended September 30, 2009 versus $2.3 million the three month period ended September 30, 2008. Amortization was impacted 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 to operations 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 $533,000 for the period.

Revenues for the six month period ended September 30, 2009 were $155.2 million, a decrease of $1.3 million, or 0.9%, versus the six month period ended September 30, 2008. Revenues for both the Over-the-Counter 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 4.2% of total revenues, increased by $727,000 or 12.7% during 2009 versus 2008.

Read the The complete ReportPBH is in the portfolios of Donald Yacktman of Yacktman Asset Management Co..

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