Prestige eyes further acquisitions after Akorn deal

Prestige eyes further acquisitions after Akorn deal
Prestige Consumer Healthcare’s annual e-commerce sales are more than USD100 million, says chief executive officer Ron Lombardi

7 February 2022 - Deborah Wilkes

  • Prestige Consumer Healthcare reports sales up by 14.9%
  • Organic sales growth was 8.8%
  • US company will give “thoughtful consideration” to acquisition opportunities

Prestige Consumer Healthcare would give “thoughtful consideration” to acquisition opportunities as they popped up, said chief executive officer Ron Lombardi, as the recent purchase of TheraTears helped lift sales by 14.9% to USD274 million in the three months ended 31 December 2021.

The company announced in May 2021 that it was acquiring a portfolio of OTC brands from Akorn, including TheraTears eyecare products, for USD230 million in cash (click here to read the News story).

Excluding both a contribution of USD13.7 million from the Akorn brands and the impact of currency translations, organic growth was 8.8%.

Commenting on the financial results, Lombardi highlighted the “higher-than-anticipated rebound in certain COVID-impacted areas such as cough and cold”. “Record international revenues led by Australia” were also mentioned by Lombardi, as well as “strong overall consumer healthcare demand domestically” at the US-based company.

Prestige’s “proven business strategy and execution”, said Lombardi, had continued to deliver in the “ongoing volatile environment resulting from COVID-19”.

Sales by region

Prestige's North American OTC Healthcare business reported sales up by 14.4% to USD241 million in the quarter. The business accounted for 87.8% of Prestige's total sales (see Figure 1 below).

Figure 1: Worldwide sales at Prestige Consumer Healthcare in the three months ended 31 December 2021, broken down by business. Change in sales is as reported and compared to same period a year earlier (Source – Prestige/OTCToolbox)

 

Meanwhile, the International OTC Healthcare business reported sales up by 19.3% to USD33.6 million, accounting for 12.2% of the company's total sales.

Prestige said the international rise had been driven primarily by an “increase in consumer activity in Australia, which drove a sharp rise in demand for Hydralyte and other COVID-19 impacted brands”.

Discussing e-commerce, chief financial officer Christine Sacco said Prestige continued to experience year-on-year double-digit consumption growth in the e-commerce channel.

Lombardi said Prestige’s annual e-commerce sales were more than USD100 million.

Price increases

Commenting on price increases, Sacco said Prestige had taken pricing actions or initiated further pricing actions across the vast majority of its portfolio and would continue to do so as necessary to offset inflationary headwinds.

Lombardi pointed out that Prestige, like other companies, was experiencing headwinds associated with supply chain constraints and inflationary pressures. Prestige was well-positioned to navigate the dynamic environment as the diversification of its supplier base meant it could adjust to a volatile supply environment, he said.

Prestige’s adjusted Earnings Before Interest, Taxes, Depreciation and Amortisation (EBITDA) were up by 11.1% to USD90.5 million in the three months, giving a margin of 33.0%.

The three months ended 31 December 2021 was the third quarter of Prestige’s financial year.

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