Prestige sumer Healthcare (PBH) - 2024 Q4 - Annual Results

Executive Summary CEO Commentary FY24 delivered stable earnings and cash flow, despite Q4 supply chain pressures in eye care, with solid long-term fundamentals - Fiscal Year 2024 delivered stable earnings and cash flow, supported by a leading brand portfolio and proven business strategy[3] - Fourth quarter performance was negatively affected by accelerated supply chain pressures, mainly in eye care products, limiting the ability to meet retailer order demand[3] - Long-term business fundamentals are solid, with strong consumption exceeding long-term expectations and robust cash flow providing options for shareholder value creation[3] Key Highlights (Q4 & FY24) The company reported Q4 and FY24 revenues, reduced leverage to 2.8x, authorized a $300 million share repurchase, and provided an initial FY25 outlook Key Financial Metrics | Metric | Q4 FY24 | FY24 | | :------------------------------------------------ | :------ | :--------- | | Revenue | $277.0 Million | $1,125.4 Million | | Leverage Ratio (Year-End) | - | 2.8x | | Share Repurchase Program Authorization | - | $300 Million | | Initial FY25 Organic Revenue Growth Outlook | - | ~1% | | Initial FY25 EPS Outlook | - | $4.40 to $4.46 | - Solid consumption trends in Q4 were offset by near-term supply chain constraints[8] Financial Performance - Fourth Fiscal Quarter Ended March 31, 2024 Revenue Analysis (Q4) Q4 FY24 revenues decreased by 2.9% to $277.0 million, primarily due to supply chain issues and private label exit, partially offset by International OTC growth Q4 Revenue Performance | Metric | Q4 FY24 (Millions) | Q4 FY23 (Millions) | Change (%) | | :-------------------------------- | :----------------- | :----------------- | :--------- | | Reported Revenues | $277.0 | $285.9 | -3.1% | | Revenues (Excl. FX Impact) | - | - | -2.9% | - Revenue decline attributed to inability to supply customer orders late in the quarter (certain brands), strategic exit of private label revenues, and lower Women's Health category sales[4] - Growth in the International OTC segment partially offset the overall revenue decline[4] Net Income and EPS Analysis (Q4) Q4 FY24 reported net income was $49.5 million, a significant improvement from prior year's loss due to no impairment charges; non-GAAP adjusted net income and EPS slightly decreased Q4 Net Income and EPS | Metric | Q4 FY24 | Q4 FY23 | Change | | :-------------------------- | :------ | :-------- | :----- | | Reported Net Income | $49.5M | $(240.6)M | Up | | Diluted EPS | $0.98 | $(4.83) | Up | | Non-GAAP Adjusted Net Income | $51.4M | $53.7M | Down | | Non-GAAP Adjusted Diluted EPS | $1.02 | $1.07 | Down | Adjustments to Net Income (Q4) Q4 FY24 and FY23 net income adjustments included tax rate adjustments; Q4 FY23 notably included non-cash tradename and goodwill impairments - Q4 FY24 and Q4 FY23 net income adjustments included tax rate adjustments for discrete items[6] - Q4 FY23 adjustments notably included non-cash tradename impairments (DenTek, Summer's Eve, TheraTears) and goodwill impairments, primarily due to higher discount rate assumptions[6] Financial Performance - Fiscal Year Ended March 31, 2024 Revenue Analysis (FY24) FY24 revenues were $1,125.4 million, a slight decrease but 0.2% increase excluding FX, driven by International OTC and North American OTC growth, offset by category declines and private label exit FY24 Revenue Performance | Metric | FY24 (Millions) | FY23 (Millions) | Change (%) | | :-------------------------------- | :---------------- | :---------------- | :--------- | | Reported Revenues | $1,125.4 | $1,127.7 | -0.2% | | Revenues (Excl. FX Impact) | - | - | +0.2% | - Revenue performance was driven by strong International OTC segment and North American Eye & Ear Care, GI, and Dermatological category sales[9] - Offset by lower sales in Women's Health, Cough & Cold, and Analgesic categories, and the strategic exit of private label revenues[9] Net Income and EPS Analysis (FY24) FY24 reported net income was $209.3 million, a significant turnaround from prior year's loss; diluted EPS was $4.17, while non-GAAP adjusted net income and EPS remained stable FY24 Net Income and EPS | Metric | FY24 | FY23 | Change | | :-------------------------- | :------- | :-------- | :----- | | Reported Net Income | $209.3M | $(82.3)M | Up | | Diluted EPS | $4.17 | $(1.65) | Up | | Non-GAAP Adjusted Net Income | $211.3M | $212.0M | Stable | | Non-GAAP Adjusted Diluted EPS | $4.21 | $4.21 | Stable | Adjustments to Net Income (FY24) FY24 and FY23 net income adjustments included normalized tax rate adjustments; FY23 notably included non-cash tradename and goodwill impairments - FY24 and FY23 net income adjustments included normalized tax rate adjustments for discrete items[11] - FY23 adjustments included non-cash tradename impairments (DenTek, Summer's Eve, TheraTears) and goodwill impairments, along with associated tax adjustments[11] Free Cash Flow and Balance Sheet Cash Flow Performance Net cash from operating activities and non-GAAP free cash flow both increased for Q4 FY24 and the full fiscal year 2024 Cash Flow Summary | Metric | Q4 FY24 (Millions) | Q4 FY23 (Millions) | FY24 (Millions) | FY23 (Millions) | | :-------------------------------- | :----------------- | :----------------- | :-------------- | :-------------- | | Net Cash Provided by Operating Activities | $66.9 | $59.0 | $248.9 | $229.7 | | Non-GAAP Free Cash Flow | $63.8 | $56.4 | $239.4 | $221.9 | Debt and Leverage Ratio Net debt was ~$1.1 billion as of March 31, 2024, with a leverage ratio of 2.8x, below the 3x long-term goal, enhancing capital allocation flexibility Debt and Leverage | Metric | As of March 31, 2024 | | :-------------------- | :------------------- | | Net Debt Position | ~$1.1 Billion | | Covenant-Defined Leverage Ratio | 2.8x | - The leverage ratio of 2.8x is below the stated long-term goal of 3x, enabling maximized capital allocation optionality[15] Share Repurchase Program Authorization A new $300.0 million share repurchase program was authorized on May 6, 2024, aiming to maximize shareholder value and preserve financial flexibility - Board of Directors authorized a new share repurchase program of up to $300.0 million of common stock on May 6, 2024[14] - The program's goal is to maximize shareholder value while preserving financial flexibility for debt reduction or strategic acquisitions[15] Segment Review North American OTC Healthcare North American OTC Healthcare revenues decreased in Q4 FY24 and FY24, primarily due to supply constraints, Women's Health decline, and private label exit, partially offset by growth in other categories North American OTC Healthcare Segment Revenues | Metric | Q4 FY24 (Millions) | Q4 FY23 (Millions) | FY24 (Millions) | FY23 (Millions) | | :-------------------- | :----------------- | :----------------- | :-------------- | :-------------- | | Segment Revenues | $231.1 | $242.3 | $958.3 | $973.8 | - Q4 revenue decline driven by