Prestige Brands Holdings, Inc. (PBH) has reported a 13.02 percent rise in profit for the quarter ended Dec. 31, 2016. The company has earned $31.64 million, or $0.59 a share in the quarter, compared with $28 million, or $0.53 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $32.58 million, or $0.61 a share compared with $28.35 million or $0.53 a share, a year ago.
Revenue during the quarter grew 8.28 percent to $216.76 million from $200.20 million in the previous year period. Gross margin for the quarter contracted 88 basis points over the previous year period to 57.46 percent. Total expenses were 68.04 percent of quarterly revenues, down from 68.71 percent for the same period last year. This has led to an improvement of 67 basis points in operating margin to 31.96 percent.
Operating income for the quarter was $69.29 million, compared with $62.64 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $74.92 million compared with $69.73 million in the prior year period. At the same time, adjusted EBITDA margin contracted 27 basis points in the quarter to 34.56 percent from 34.83 percent in the last year period.
"We are very pleased with our overall results of the third fiscal quarter, which include strong revenue, strong earnings per share and free cash flow," said Ron Lombardi, chief executive officer. "Third quarter fiscal 2017 was eventful for the Company, as we divested multiple non-core brands and announced the acquisition of C.B. Fleet Company." Mr. Lombardi continued, "These strategic moves completed over the last 12 months shift our portfolio favorably toward our stated long-term organic sales growth objectives."
For financial year 2017, Prestige Brands Holdings, Inc. projects revenue to grow in the range of 4.50 percent to 6 percent. The company forecasts diluted earnings per share to be in the range of $1.55 to $1.61. It forecasts diluted earnings per share to be in the range of $2.30 to $2.36 on adjusted basis.
Operating cash flow improves marginally
Prestige Brands Holdings, Inc. has generated cash of $140.35 million from operating activities during the nine month period, up 2.86 percent or $3.90 million, when compared with the last year period.
Cash flow from investing activities was $110.29 million for the nine month period, up 2,087.78 percent or $105.24 million, when compared with the last year period. It has incurred net capital expenditure of $1.85 million on net basis during the nine month period, down 15.76 percent or $0.35 million from year ago period.
The company has spent $212.70 million cash to carry out financing activities during the nine month period as against cash outgo of $113.50 million in the last year period.
Cash and cash equivalents stood at $63.29 million as on Dec. 31, 2016, up 29.23 percent or $14.32 million from $48.97 million on Dec. 31, 2015.
Working capital increases
Prestige Brands Holdings, Inc. has recorded an increase in the working capital over the last year. It stood at $158.89 million as at Dec. 31, 2016, up 12.34 percent or $17.45 million from $141.43 million on Dec. 31, 2015. Current ratio was at 2.20 as on Dec. 31, 2016, down from 2.63 on Dec. 31, 2015.
Cash conversion cycle (CCC) has decreased to 48 days for the quarter from 89 days for the last year period. Days sales outstanding were almost stable at 42 days for the quarter, when compared with the last year period.
Days inventory outstanding has decreased to 50 days for the quarter compared with 87 days for the previous year period. At the same time, days payable outstanding went up to 43 days for the quarter from 39 for the same period last year.
Debt comes down marginally
Prestige Brands Holdings, Inc. has recorded a decline in total debt over the last one year. It stood at $1,415.58 million as on Dec. 31, 2016, down 2.17 percent or $31.45 million from $1,447.03 million on Dec. 31, 2015. Prestige Brands Holdings, Inc. has recorded a decline in long-term debt over the last one year. It stood at $1,415.58 million as on Dec. 31, 2016, down 2.17 percent or $31.45 million from $1,447.03 million on Dec. 31, 2015. Total debt was 50.36 percent of total assets as on Dec. 31, 2016, compared with 54.79 percent on Dec. 31, 2015. Debt to equity ratio was at 1.77 as on Dec. 31, 2016, down from 2.01 as on Dec. 31, 2015. Interest coverage ratio improved to 3.73 for the quarter from 3.21 for the same period last year.
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