Prestige Brands Holdings, Inc. Reports Record First Quarter Fiscal 2016 Revenues Up 31.9% to $192.1 Million & Free Cash Flow Up 46.5% to $42.7 Million

Prestige Brands Holdings, Inc. (NYSE-PBH) today announced results for the first quarter of fiscal year 2016, which ended June 30, 2015, and reconfirmed the outlook for the fiscal year previously provided for revenues, adjusted earnings per share, and free cash flow.

Key first quarter highlights include:

• Revenues increased 31.9% to a record $192.1 million
• Free cash flow increased 46.5% to $42.7 million
• Organic sales growth of 3.7%, excluding the impact of foreign currency fluctuations
• Adjusted earnings per share increased 26.8% to $0.52

First Fiscal Quarter Ended June 30, 2015

Revenues for the first quarter of fiscal 2016 were $192.1 million, an increase of 31.9% over the prior year comparable quarter’s revenues of $145.7 million. These results reflect strong consumption levels across the Company’s core over-the-counter healthcare brands (OTC), our growing international business, as well as the acquisitions of Insight Pharmaceuticals (Insight) and Hydralyte. Organic sales growth for the quarter was 3.7%, excluding the impact of foreign currency fluctuations.

Reported net income for the first quarter of fiscal 2016 totaled $26.2 million, or $0.49 per diluted share, an increase of 56.4% over the prior year comparable quarter’s results of $16.7 million, or $0.32 per diluted share. Adjusted net income for the first quarter of fiscal 2016 was $27.4 million, or $0.52 per diluted share, an increase of 27.4% over the prior year comparable period's adjusted net income of $21.5 million, or $0.41 per diluted share.

Free Cash Flow & Balance Sheet

The Company's free cash flow for the quarter ended June 30, 2015 was $42.7 million compared to the prior year comparable quarter’s free cash flow of $29.2 million, an increase of 46.5%. Adjusted EBITDA for the first quarter of fiscal 2016 was $69.6 million, an increase of 36.4% over the prior year comparable quarter’s adjusted EBITDA of $51.0 million.

The Company's net debt at June 30, 2015 was approximately $1.5 billion, reflecting net debt repayments of approximately $45.0 million during the first fiscal quarter. The Company also completed the previously announced refinancing of its term loan to more favorable rates during the first fiscal quarter. At June 30, 2015, the Company's covenant-defined leverage ratio was approximately 5.1.

Segment Review

Revenues for the North American OTC Healthcare segment were $155.7 million for the first quarter of fiscal 2016, 40.9% higher than the prior year comparable quarter's revenues of $110.4 million. Revenues for the International OTC Healthcare segment were $14.2 million, 3.5% higher than $13.7 million reported in the prior year's comparable period. Revenues for both the North American OTC Healthcare segment and the International OTC Healthcare segment were impacted by increased consumption levels and the acquisitions of Insight and Hydralyte. Revenues for the Household Cleaning segment were $22.3 million for the first quarter of fiscal 2016, an increase of 3.4% over the prior year comparable quarter's revenues of $21.5 million.

Commentary & Outlook

“We are very pleased with our first quarter results, highlighted by record revenues driven by strong organic growth of 3.7%, excluding the impact of foreign currency fluctuations, and solid performance of our Insight and Hydralyte acquisitions,” said Ron Lombardi, President and CEO.

“With first quarter results under our belt, strong consumption trends across many of our key brands, and a growing international business, we believe the Company is on track to achieve our previously provided outlook. For the full fiscal year 2016, we are reconfirming our revenue growth projection to be in the range of 10% to 12%, including the estimated impact of foreign currency fluctuations. We continue to anticipate revenue growth for the first half of the fiscal year of 20% to 23% and 1.5% to 2% for the second half as we annualize the Insight and Hydralyte acquisitions which closed during the first half of fiscal 2015,” he said.

“In addition, we continue to expect fiscal 2016 adjusted earnings per share in the range of $2.05-$2.10,” Mr. Lombardi stated. “Our industry-leading free cash flow is expected to be very strong for the fiscal year with free cash flow estimated to be $175 million or more, which will enable the Company to continue to rapidly de-lever, build M&A capacity, and to continue to invest in building our brands.”

Q1 Conference Call & Accompanying Slide Presentation

The Company will host a conference call to review its first quarter results on August 6, 2015 at 8:30 am EDT. The toll-free dial-in numbers are 877-703-6109 within North America and 857-244-7308 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 Investor Relations page of the Company's website at 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 19469360.

Non-GAAP Financial Information

In addition to financial results reported in accordance with generally accepted accounting principles (GAAP), we have provided certain non-GAAP financial information in this release to aid investors in understanding the Company's performance. Each non-GAAP financial measure is defined and reconciled to its most closely related GAAP financial measure in the “About Non-GAAP Financial Measures” section at the end of this earnings release.

About Prestige Brands Holdings, Inc.

The Company markets and distributes brand name over-the-counter healthcare and household cleaning products throughout the U.S., Canada, and Australia and in certain other international markets. Core brands include Monistat® women’s health products, Nix® lice treatment, Chloraseptic® sore throat treatments, Clear Eyes® eye care products, Compound W® wart treatments, The Doctor's® NightGuard® dental protector, Little Remedies® pediatric products, Efferdent® denture care products, Luden's® throat drops, Dramamine® motion sickness treatment, BC® and Goody's® pain relievers, Beano® gas prevention, Debrox® earwax remover, and Gaviscon® antacid in Canada. Visit the Company's website at www.prestigebrands.com.

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," “strategy,” "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. The "forward-looking statements" include, without limitation, statements regarding the Company's expectations regarding future operating results including revenues, adjusted earnings per share and free cash flow, the strength of consumption of the Company's products, the growth of the Company's international business and the Company's expectations of rapid de-levering, building M&A capacity and investing in brand building. These statements are based on management's estimates and assumptions with respect to future events and financial performance and are believed to be reasonable, though are inherently uncertain and difficult to predict. Actual results could differ materially from those expected as a result of a variety of factors, including the impact of our advertising and promotional initiatives, the severity of the cold and flu season, general economic and business conditions, fluctuating foreign exchange rates, consumer trends, competition in our industry, the ability of our third party manufacturers and suppliers to meet demand for our products, and introductions of new products. A discussion of other factors that could cause results to vary is included in the Company's Annual Report on Form 10-K for the year ended March 31, 2015 and other periodic reports filed with the Securities and Exchange Commission.

About Non-GAAP Financial Measures

We define Non-GAAP Organic Revenues as Total Revenues excluding revenues associated with products acquired or divested in the periods presented. We define Non-GAAP Organic Revenues on a Constant Currency basis as Total Revenues excluding acquisitions and divestitures and the impact of current year foreign exchange rates on total revenues. We define Non-GAAP Adjusted EBITDA as earnings before interest expense (income), income taxes, depreciation and amortization, certain other legal and professional fees, other acquisition-related costs, and costs associated with our CEO transition. Non- GAAP Adjusted EBITDA Margin is calculated as Non-GAAP Adjusted EBITDA divided by GAAP Total Revenues. We define Non-GAAP Adjusted Gross Margin as Gross Profit before inventory step up charges, and certain other acquisition and integration-related costs. Non-GAAP Adjusted Gross Margin percentage is calculated based on Non-GAAP Adjusted Gross Margin divided by GAAP Total Revenues. We define Non-GAAP Adjusted General and Administrative expenses as General and Administrative expenses minus certain other legal and professional fees, acquisition and other integration costs, and costs associated with our CEO transition. Non-GAAP Adjusted General and Administrative expense percentage is calculated based on Non-GAAP Adjusted General and Administrative expense divided by GAAP Total Revenues. We define Non-GAAP Adjusted Net Income as Net Income before inventory step-up charges, certain other legal and professional fees, other acquisition and integration-related costs, costs associated with our CEO transition, the applicable tax impacts associated with these items and the tax impacts of state tax rate adjustments and other non-deductible items. Non-GAAP Adjusted EPS is calculated based on Non-GAAP Adjusted Net Income, divided by the weighted average number of common and potential common shares outstanding during the period. We define Non-GAAP Free Cash Flow as net cash provided by operating activities less cash paid for capital expenditures. Non-GAAP Organic Revenues, Non-GAAP Organic Revenues on a Constant Currency basis, Non-GAAP Adjusted EBITDA, Non-GAAP Adjusted EBITDA Margin, Non-GAAP Adjusted Gross Margin, Non-GAAP Adjusted Gross Margin percentage, Non-GAAP Adjusted General and Administrative Expense, Non-GAAP Adjusted General and Administrative Expense percentage, Non-GAAP Adjusted Net Income, Non-GAAP Adjusted EPS, and Non-GAAP Free Cash Flow may not be comparable to similarly titled measures reported by other companies.

We are presenting Non-GAAP Organic Revenues, Non-GAAP Organic Revenues on a Constant Currency basis, Non-GAAP Adjusted EBITDA, Non-GAAP Adjusted EBITDA Margin, Non-GAAP Adjusted Gross Margin, Non-GAAP Adjusted Gross Margin percentage, Non-GAAP Adjusted General and Administrative Expense, Non-GAAP Adjusted General and Administrative Expense percentage, Non- GAAP Adjusted Net Income, Non-GAAP Adjusted EPS, and Non-GAAP Free Cash Flow, because they provide additional ways to view our operation when considered with both our GAAP results and the reconciliation to net income and net cash provided by operating activities, respectively, which we believe provides a more complete understanding of our business than could be obtained absent this disclosure. Each of Non-GAAP Organic Revenues, Non-GAAP Organic Revenues on a Constant Currency basis, Non-GAAP Adjusted EBITDA, Non-GAAP Adjusted EBITDA Margin, Non-GAAP Adjusted Gross Margin, Non-GAAP Adjusted Gross Margin percentage, Non-GAAP Adjusted General and Administrative Expense, Non-GAAP Adjusted General and Administrative Expense percentage, Non-GAAP Adjusted Net Income, Non-GAAP Adjusted EPS, 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 shareholder value; and (iii) we use Non-GAAP Organic Revenues, Non-GAAP Organic Revenues on a Constant Currency basis, Non-GAAP Adjusted EBITDA, Non-GAAP Adjusted EBITDA Margin, Non-GAAP Adjusted Gross Margin, Non-GAAP Adjusted Gross Margin percentage, Non-GAAP Adjusted General and Administrative Expense, Non-GAAP Adjusted General and Administrative Expense percentage, Non-GAAP Adjusted Net Income, Non-GAAP Adjusted EPS, and Non-GAAP Free Cash Flow 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 Organic Revenues, Non-GAAP Organic Revenues on a Constant Currency basis, Non-GAAP Adjusted EBITDA, Non-GAAP Adjusted EBITDA Margin, Non-GAAP Adjusted Gross Margin, Non-GAAP Adjusted Gross Margin percentage, Non-GAAP Adjusted General and Administrative Expense, Non-GAAP Adjusted General and Administrative Expense percentage, Non-GAAP Adjusted Net Income, Non-GAAP Adjusted EPS, and Non-GAAP Free Cash Flow have limitations, and you should not consider these measures in isolation from or as an alternative to GAAP measures such as Total Revenues, General and Administrative expense, Operating income, 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 Organic Revenues, Non-GAAP Organic Revenues on a Constant Currency basis, Non-GAAP Adjusted EBITDA, Non-GAAP Adjusted EBITDA Margin, Non-GAAP Adjusted Gross Margin, Non-GAAP Adjusted Gross Margin percentage, Non-GAAP Adjusted General and Administrative Expense, Non-GAAP Adjusted General and Administrative Expense percentage, Non-GAAP Adjusted Net Income, Non-GAAP Adjusted EPS, Non-GAAP Free Cash Flow, all of which are non-GAAP financial measures, to GAAP Gross Profit, GAAP General and Administrative expense, GAAP Net Income, GAAP Diluted EPS and GAAP Net cash provided by operating activities, our most directly comparable financial measures presented in accordance with GAAP.

Reconciliation of GAAP Gross Profit to Non-GAAP Adjusted Gross Margin and related Adjusted Gross Margin percentage:

(1) Inventory step-up charges and other costs relate to our International OTC Healthcare segment

Reconciliation of GAAP General and Administrative Expense to Non-GAAP Adjusted General and Administrative Expense and related Non-GAAP Adjusted General and Administrative Expense percentage:

Reconciliation of GAAP Net Income to Non-GAAP Adjusted EBITDA and related Non-GAAP Adjusted EBITDA Margin:

Reconciliation of GAAP Net Income to Non-GAAP Adjusted Net Income and related Adjusted Earnings Per Share:

Reconciliation of GAAP Net Income to Non-GAAP Free Cash Flow:

Outlook for Fiscal Year 2016:

Reconciliation of Projected GAAP EPS to Projected Non-GAAP Adjusted EPS:

Reconciliation of Projected GAAP Net cash provided by operating activities to Projected Non-GAAP Free Cash Flow:

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