Prestige Consumer Healthcare Inc. (PBH)
SIC breadcrumb: Manufacturing > Chemicals And Allied Products > SIC 2834 Pharmaceutical Preparations
SEC company page: https://www.sec.gov/edgar/browse/?CIK=1295947. Latest filing source: 0001295947-26-000016.
Selected Fundamentals
| Metric | Value | Unit | FY | Filed |
|---|---|---|---|---|
| Revenue | 1,088,705,000 | USD | 2026 | 2026-05-14 |
| Net income | 190,301,000 | USD | 2026 | 2026-05-14 |
| Assets | 3,494,313,000 | USD | 2026 | 2026-05-14 |
Financials
Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-05-14. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001295947.json. Derived margins are computed from the extracted annual SEC facts.
| Metric | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | 2026 |
|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | 882,060,000 | 1,041,179,000 | 975,777,000 | 963,010,000 | 943,365,000 | 1,086,812,000 | 1,127,725,000 | 1,125,357,000 | 1,137,762,000 | 1,088,705,000 |
| Net income | 69,395,000 | 339,570,000 | -35,800,000 | 142,281,000 | 164,682,000 | 205,381,000 | -82,306,000 | 209,339,000 | 214,605,000 | 190,301,000 |
| Operating income | 205,643,000 | 215,474,000 | 67,503,000 | 291,155,000 | 297,402,000 | 329,919,000 | -22,415,000 | 342,429,000 | 336,775,000 | 309,409,000 |
| Gross profit | 500,286,000 | 576,505,000 | 555,576,000 | 552,223,000 | 547,472,000 | 620,646,000 | 625,294,000 | 624,448,000 | 634,463,000 | 595,578,000 |
| Diluted EPS | 1.30 | 6.34 | -0.69 | 2.78 | 3.25 | 4.04 | -1.65 | 4.17 | 4.29 | 3.91 |
| Assets | 3,911,348,000 | 3,760,612,000 | 3,441,036,000 | 3,513,905,000 | 3,429,273,000 | 3,670,681,000 | 3,353,729,000 | 3,318,417,000 | 3,402,218,000 | 3,494,313,000 |
| Liabilities | 3,088,799,000 | 2,582,002,000 | 2,345,205,000 | 2,342,934,000 | 2,070,975,000 | 2,093,070,000 | 1,906,645,000 | 1,663,333,000 | 1,567,321,000 | 1,606,797,000 |
| Stockholders' equity | 822,549,000 | 1,178,610,000 | 1,095,831,000 | 1,170,971,000 | 1,358,298,000 | 1,577,611,000 | 1,447,084,000 | 1,655,084,000 | 1,834,897,000 | 1,887,516,000 |
| Cash and cash equivalents | 41,855,000 | 32,548,000 | 27,530,000 | 94,760,000 | 32,302,000 | 27,185,000 | 58,489,000 | 46,469,000 | 97,884,000 | 63,868,000 |
| Net margin | 7.87% | 32.61% | -3.67% | 14.77% | 17.46% | 18.90% | -7.30% | 18.60% | 18.86% | 17.48% |
| Operating margin | 23.31% | 20.70% | 6.92% | 30.23% | 31.53% | 30.36% | -1.99% | 30.43% | 29.60% | 28.42% |
Financial Charts
Quarterly
Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-05-14. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001295947.json.
| Quarter | End Date | Revenue | Net Income | Diluted EPS | Method |
|---|---|---|---|---|---|
| 2023-Q1 | 2022-06-30 | 1.09 | reported discrete quarter | ||
| 2023-Q2 | 2022-09-30 | 1.02 | reported discrete quarter | ||
| 2023-Q3 | 2022-12-31 | 1.04 | reported discrete quarter | ||
| 2024-Q1 | 2023-06-30 | 279,309,000 | 53,276,000 | 1.06 | reported discrete quarter |
| 2024-Q2 | 2023-09-30 | 286,316,000 | 53,559,000 | 1.07 | reported discrete quarter |
| 2024-Q3 | 2023-12-31 | 282,741,000 | 53,046,000 | 1.06 | reported discrete quarter |
| 2024-Q4 | 2024-03-31 | 276,991,000 | 49,458,000 | derived Q4 = FY annual - nine-month YTD | |
| 2025-Q1 | 2024-06-30 | 267,142,000 | 49,068,000 | 0.98 | reported discrete quarter |
| 2025-Q2 | 2024-09-30 | 283,785,000 | 54,377,000 | 1.09 | reported discrete quarter |
| 2025-Q3 | 2024-12-31 | 290,317,000 | 61,032,000 | 1.22 | reported discrete quarter |
| 2025-Q4 | 2025-03-31 | 296,518,000 | 50,128,000 | derived Q4 = FY annual - nine-month YTD | |
| 2026-Q1 | 2025-06-30 | 249,530,000 | 47,466,000 | 0.95 | reported discrete quarter |
| 2026-Q2 | 2025-09-30 | 274,114,000 | 42,211,000 | 0.86 | reported discrete quarter |
| 2026-Q3 | 2025-12-31 | 283,444,000 | 46,696,000 | 0.97 | reported discrete quarter |
| 2026-Q4 | 2026-03-31 | 281,617,000 | 53,928,000 | derived Q4 = FY annual - nine-month YTD |
Quarterly Charts
Macro Cross-References
- CPIAUCSL - Consumer Price Index for All Urban Consumers: All Items in U.S. City Average
- UNRATE - Unemployment Rate
- FEDFUNDS - Federal Funds Effective Rate
- CES0500000003 - Average Hourly Earnings of All Employees, Total Private
- DFEDTARU - Federal Funds Target Range - Upper Limit
- DFEDTARL - Federal Funds Target Range - Lower Limit
- DGS3MO - Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity
- DGS2 - Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity
- DGS10 - Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
- DGS30 - Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity
- T10Y2Y - 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity
- CPILFESL - Consumer Price Index for All Urban Consumers: All Items Less Food and Energy
- CPIUFDSL - Consumer Price Index for All Urban Consumers: Food
- CPIENGSL - Consumer Price Index for All Urban Consumers: Energy
- CUSR0000SAH1 - Consumer Price Index for All Urban Consumers: Shelter
- PCEPI - Personal Consumption Expenditures: Chain-type Price Index
- PCEPILFE - Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index
- PPIACO - Producer Price Index by Commodity: All Commodities
- T10YIE - 10-Year Breakeven Inflation Rate
- U6RATE - Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons
- PAYEMS - All Employees, Total Nonfarm
- CIVPART - Labor Force Participation Rate
- EMRATIO - Employment-Population Ratio
- UNEMPLOY - Unemployed
- CE16OV - Employment Level
- ICSA - Initial Claims
- JTSJOL - Job Openings: Total Nonfarm
- JTSQUR - Quits: Total Nonfarm
- GDPC1 - Real Gross Domestic Product
- A191RL1Q225SBEA - Real Gross Domestic Product: Percent Change from Preceding Period
- INDPRO - Industrial Production: Total Index
- TCU - Capacity Utilization: Total Index
- HOUST - New Privately-Owned Housing Units Started: Total Units
- PERMIT - New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units
- RSAFS - Advance Retail Sales: Retail Trade
- PCE - Personal Consumption Expenditures
- DSPIC96 - Real Disposable Personal Income
- PSAVERT - Personal Saving Rate
- M2SL - M2
- BOPGSTB - U.S. International Trade in Goods and Services: Balance
- MSPUS - Median Sales Price of Houses Sold for the United States
- HSN1F - New One Family Houses Sold: United States
- RHORUSQ156N - Homeownership Rate in the United States
- TTLCONS - Total Construction Spending: Total Construction in the United States
- RRVRUSQ156N - Rental Vacancy Rate in the United States
- TOTALSL - Total Consumer Credit Owned and Securitized
- REVOLSL - Revolving Consumer Credit Owned and Securitized
- DRCCLACBS - Delinquency Rate on Credit Card Loans, All Commercial Banks
- GDP - Gross Domestic Product
- GPDI - Gross Private Domestic Investment
- GCE - Government Consumption Expenditures and Gross Investment
- PCEC - Personal Consumption Expenditures
- NETEXP - Net Exports of Goods and Services
- GFDEBTN - Federal Debt: Total Public Debt
- GFDEGDQ188S - Federal Debt: Total Public Debt as Percent of Gross Domestic Product
- FYFSD - Federal Surplus or Deficit
- FGRECPT - Federal Government Current Receipts
- FGEXPND - Federal Government: Current Expenditures
- MANEMP - All Employees, Manufacturing
- USCONS - All Employees, Construction
- USTRADE - All Employees, Retail Trade
- USFIRE - All Employees, Financial Activities
- USGOVT - All Employees, Government
- AWHAETP - Average Weekly Hours of All Employees, Total Private
- DGORDER - Manufacturers' New Orders: Durable Goods
- NEWORDER - Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft
- BUSINV - Total Business Inventories
- EXPGS - Exports of Goods and Services
- IMPGS - Imports of Goods and Services
- IR - Import Price Index (End Use): All Commodities
- PPIFIS - Producer Price Index by Commodity: Final Demand
Latest quarter (10-Q)
Latest 10-Q source: 0001295947-26-000008.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion of our financial condition and results of operations should be read together with the Condensed Consolidated Financial Statements and the related notes included in this Quarterly Report on Form 10-Q, as well as our Annual Report on Form 10-K for the fiscal year ended March 31, 2025. This discussion and analysis may contain forward-looking statements that involve certain risks, assumptions and uncertainties. Future results could differ materially from the discussion that follows for many reasons, including the factors described in Part I, Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended March 31, 2025 and in future reports filed with the U.S. Securities and Exchange Commission ("SEC").
See also “Cautionary Statement Regarding Forward-Looking Statements” on page 33 of this Quarterly Report on Form 10-Q.
Unless otherwise indicated by the context, all references in this Quarterly Report on Form 10-Q to “we,” “us,” “our,” the “Company” or “Prestige” refer to Prestige Consumer Healthcare Inc. and our subsidiaries. Similarly, references to a year (e.g., 2026) refer to our fiscal year ended March 31 of that year.
General
We are engaged in the development, manufacturing, marketing, sales and distribution of well-recognized, brand name, over-the-counter ("OTC") health and personal care products to mass merchandisers, drug, food, dollar, convenience and club stores and e-commerce channels in North America (the United States and Canada) and in Australia and certain other international markets. We use the strength of our brands, our established retail distribution network, a low-cost operating model and our experienced management team to our competitive advantage.
We have grown our brand portfolio both organically and through acquisitions. We develop our existing brands by investing in new product lines, brand extensions and strong advertising support. Acquisitions of consumer health and personal care brands have also been an important part of our growth strategy. We have acquired well-recognized brands from consumer products and pharmaceutical companies and private equity firms. While many of these brands have long histories of brand development and investment, we believe that, at the time we acquired them, most were considered “non-core” by their previous owners. As a result, these acquired brands did not benefit from adequate management focus and marketing support during the period prior to their acquisition, which created opportunities for us to reinvigorate these brands and improve their performance post-acquisition. After adding a core brand to our portfolio, we seek to increase its sales, market share and distribution in both existing and new channels through our established retail distribution network. We pursue this growth through increased spending on advertising and marketing support, new sales and marketing strategies, improved packaging and formulations, and innovative development of brand extensions.
Acquisition
Acquisition of Pillar5
On December 18, 2025, we completed the acquisition of Pillar5 Pharma, Inc. ("Pillar5"), which was funded through a combination of cash on hand and our existing asset-based revolving credit facility.
Based in Ontario, Canada, Pillar5 is a leading sterile ophthalmic manufacturer and one of our current Clear Eyes suppliers.
The pro-forma effect of this acquisition on revenues and earnings was not material.
The details of this acquisition are included in the notes to the unaudited Condensed Consolidated Financial Statements in Part I, Item I, Note 2 of this Quarterly Report on Form 10-Q.
Economic Environment
There has been economic uncertainty in the United States and globally due to several factors, including evolving fiscal policy, global supply chain constraints, changes in interest rates, a high inflationary environment, geopolitical events and evolving U.S. and international trade restrictions and tariffs. We expect economic conditions will continue to be highly volatile and uncertain, put pressure on prices and supply, and could affect demand for our products. We have continued to see changes in the purchasing patterns of our consumers, including a shift in many markets to purchasing our products online, and have and may continue to see changes in retailer purchasing patterns due to these consumer patterns and the uncertain economic environment.
The volatile environment has impacted the supply of labor and raw materials and exacerbated rising input costs. We have and may continue to experience shortages, delays and backorders for certain ingredients and products, difficulty scheduling shipping for our products, as well as price increases from many of our suppliers for both shipping and product costs. Certain of
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our third-party manufacturers are currently having, and have had in the past, difficulty meeting demand, which is and has caused shortages of our products, particularly eye care products. These shortages have negatively impacted our results of operations, and we expect further shortages will continue to have a negative impact on our sales. If conditions cause further disruption in the global supply chain, the availability of labor and materials or otherwise further increase costs, it may materially affect our operations and those of third parties on which we rely, including causing material disruptions in the supply and distribution of our products. The extent to which these conditions impact our results of operations and liquidity will depend on future developments, which are highly uncertain and cannot be predicted, including global supply chain constraints, inflation, tariffs, global conflicts and trade actions/disputes. These effects could have a material adverse impact on our business, liquidity, capital resources and results of operations and those of the third parties on which we rely.
Income Taxes
Numerous countries have agreed to a statement in support of the Organization for Economic Cooperation and Development ("OECD") model rules that propose a global minimum tax rate of 15%. Certain countries have enacted, or are in the process of enacting, legislation to address the global minimum tax. This legislation has not and is not expected to have a material impact on our Consolidated Financial Statements. As legislation becomes effective in more countries in which we do business, our taxes could increase and negatively impact our provision for income taxes. We continue to monitor pending legislation and implementation by countries and to evaluate the potential impact on our business in future periods.
On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the United States. The OBBBA makes permanent key elements of the Tax Cuts and Jobs Act, including 100% bonus depreciation, domestic research cost expensing, and the business interest expense limitation. We are continuing to assess its impact and do not expect the OBBBA to have a material impact on our estimated annual effective tax rate.
24
Results of Operations
Three Months Ended December 31, 2025 compared to the Three Months Ended December 31, 2024
Total Segment Revenues
The following table represents total revenue by segment, including product groups, for the three months ended December 31, 2025 and 2024.
Three Months Ended December 31,
Increase (Decrease)
(In thousands)
2025
%
2024
%
Amount
%
North American OTC Healthcare
Analgesics
$
26,735
9.4
$
29,314
10.1
$
(2,579)
(8.8)
Cough & Cold
22,992
8.1
22,984
7.9
8
—
Women's Health
51,817
18.3
53,686
18.6
(1,869)
(3.5)
Gastrointestinal
44,237
15.7
42,521
14.6
1,716
4.0
Eye & Ear Care
35,214
12.4
38,895
13.4
(3,681)
(9.5)
Dermatologicals
27,580
9.7
28,546
9.8
(966)
(3.4)
Oral Care
23,501
8.3
19,869
6.8
3,632
18.3
Other OTC
3,621
1.3
3,119
1.1
502
16.1
Total North American OTC Healthcare
235,697
83.2
238,934
82.3
(3,237)
(1.4)
International OTC Healthcare
Analgesics
$
1,298
0.5
$
1,668
0.6
(370)
(22.2)
Cough & Cold
6,335
2.2
6,347
2.2
(12)
(0.2)
Women's Health
5,948
2.1
4,439
1.5
1,509
34.0
Gastrointestinal
25,217
8.9
26,469
9.2
(1,252)
(4.7)
Eye & Ear Care
3,386
1.2
6,783
2.3
(3,397)
(50.1)
Dermatologicals
2,058
0.7
2,109
0.7
(51)
(2.4)
Oral Care
3,083
1.1
3,211
1.1
(128)
(4.0)
Other OTC
422
0.1
357
0.1
65
18.2
Total International OTC Healthcare
47,747
16.8
51,383
17.7
(3,636)
(7.1)
Total Consolidated
$
283,444
100.0
$
290,317
100.0
$
(6,873)
(2.4)
Total revenues for the three months ended December 31, 2025 were $283.4 million, a decrease of $6.9 million, or 2.4%, versus the three months ended December 31, 2024.
North American OTC Healthcare Segment
Revenues for the North American OTC Healthcare segment decreased $3.2 million, or 1.4%, during the three months ended December 31, 2025 versus the three months ended December 31, 2024. The $3.2 million decrease was primarily attributable to a decrease in sales in the Eye & Ear Care, Analgesics and Women's Health categories, partly offset by an increase in sales in the Oral Care and Gastrointestinal categories.
International OTC Healthcare Segment
Revenues for the International OTC Healthcare segment decreased $3.6 million, or 7.1%, during the three months ended December 31, 2025 versus the three months ended December 31, 2024. The $3.6 million decrease was primarily attributable to a decrease in sales in the Eye & Ear Care category, partly offset by an increase in sales in the Women's Health category.
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Gross Profit
The following table presents our gross profit and gross profit as a percentage of total segment revenues, by segment for each of the periods presented.
Three Months Ended December 31,
(In thousands)
Increase (Decrease)
Gross Profit
2025
%
2024
%
Amount
%
North American OTC Healthcare
$
130,695
55.5
$
130,867
54.8
$
(172)
(0.1)
International OTC Healthcare
26,674
55.9
30,182
58.7
(3,508)
(11.6)
$
157,369
55.5
$
161,049
55.5
$
(3,680)
(2.3)
Gross profit for the three months ended December 31, 2025 decreased $3.7 million, or 2.3%, when compared with the three months ended December 31, 2024. As a percentage of total revenues, gross profit remained constant.
North American OTC Healthcare Segment
Gross profit for the North American OTC Healthcare segment decreased $0.2 million, or 0.1%, during the three months ended December 31, 2025 versus the three months ended December 31, 2024. As a percentage of North American OTC Healthcare revenues, gross profit increased to 55.5% during the three months ended December 31, 2025 from 54.8% during the three months ended December 31, 2024, primarily due to a more favorable product mix.
International OTC Healthcare Segment
Gross profit for the International OTC Healthcare segment decreased $3.5 million, or 11.6%, during the three months ended December 31, 2025 versus the three months ended December 31, 2024. As a percentage of International OTC Healthcare revenues, gross profit decreased to 55.9% during the three months ended December 31, 2025 from 58.7% during the three months ended December 31, 2024, primarily due to increased inflation costs and product mix.
Contribution Margin
Contribution margin is our segment measure of profitability. It is defined as gross profit less advertising and marketing expenses.
The following table presents our contribution margin and contribution margin as a percentage of total segment revenues, by segment for each of the periods presented.
Three Months Ended December 31,
(In thousands)
Increase (Decrease)
Contribution Margin
2025
%
2024
%
Amount
%
North American OTC Healthcare
$
98,009
41.
[Excerpt truncated for page length; source filing is linked above.]
Latest 10-K MD&A
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion of our financial condition and results of operations should be read together with the Consolidated Financial Statements and related notes included elsewhere in this Annual Report on Form 10-K. This discussion and analysis may contain forward-looking statements that involve certain risks, assumptions and uncertainties that could cause actual results to differ materially from those implied or described by the forward-looking statements. Future results could differ materially from the discussion that follows for many reasons, including the factors described in Part I, Item 1A. “Risk Factors” in this Annual Report on Form 10-K, as well as those described in future reports filed with the SEC.
General
We are engaged in the development, manufacturing, marketing, sales and distribution of well-recognized, brand name OTC health and personal care products to mass merchandisers, drug/drug wholesale, food, dollar, convenience and club stores and e-commerce channels in North America (the United States and Canada) and in Australia and certain other international markets. We use the strength of our brands, our established retail distribution network, a low-cost operating model and our experienced management team to create our competitive advantage.
We have grown our product portfolio both organically and through acquisitions. We develop our existing brands by investing in new product lines, brand extensions and strong advertising support. Acquisitions of consumer health and personal care brands have also been an important part of our growth strategy. We have acquired well-recognized brands from consumer products and pharmaceutical companies and private equity firms. While certain of these brands have long histories of brand development and investment, we believe that, at the time we acquired them, many were considered “non-strategic” by their previous owners. As a result, these acquired brands did not benefit from adequate management focus and marketing support during the period prior to their acquisition, which created opportunities for us to reinvigorate these brands and improve their performance post-acquisition. After adding a brand to our portfolio, we seek to increase its sales, market share and distribution in both existing and new channels through our established retail distribution network. We pursue this growth through increased spending on advertising and marketing support, new sales and marketing strategies, improved packaging and formulations and innovative development of brand extensions.
Acquisitions
Acquisition of Pillar5
On December 18, 2025, we completed the acquisition of Pillar5, which was funded through a combination of cash on hand and our existing asset-based revolving credit facility.
Based in Arnprior Ontario, Canada, Pillar5 is a leading sterile ophthalmic manufacturer and one of our current Clear Eyes suppliers.
The pro-forma effect of this acquisition on revenues and earnings was not material.
The details of this acquisition are included in the notes to the Consolidated Financial Statements in Part II, Item 8, Note 2 of this Annual Report on Form 10-K.
Pending Acquisition of Foundation Consumer Brands Product Portfolio
On March 19, 2026, we entered into a definitive agreement to acquire certain assets and assume certain liabilities primarily related to a portfolio of over-the-counter consumer health products, including Breathe Right® and certain other brands from Foundation Consumer Brands, LLC. We anticipate the transaction to close in the first half of fiscal 2027.
Economic Environment
There has been economic uncertainty in the United States and globally due to several factors, including evolving fiscal policy, global supply chain constraints, changes in interest rates, a high inflationary environment, geopolitical events, including conflicts in the Middle East, and evolving U.S. and international trade restrictions and tariffs. We expect economic conditions will continue to be highly volatile and uncertain, put pressure on prices and supply, and could affect demand for our products. We have continued to see changes in the purchasing patterns of our consumers, including a shift in many markets to purchasing our products online, and have and may continue to see changes in retailer purchasing patterns due to these consumer patterns and the volatile economic environment.
34
The volatile environment has impacted the supply of labor and raw materials and exacerbated rising input costs. We have and may continue to experience shortages, delays and backorders for certain ingredients and products, difficulty scheduling shipping for our products, as well as price increases from many of our suppliers for both shipping and product costs. We and our manufacturers are currently having, and have had in the past, difficulty meeting demand, which is and has caused shortages of some of our products, particularly eye care products. These shortages have negatively impacted our results of operations, and we expect further shortages will continue to have a negative impact on our sales. If conditions cause further disruption in the global supply chain, the availability of labor and materials or otherwise further increase costs, it may materially affect our operations and those of third parties on which we rely, including causing material disruptions in the supply and distribution of our products. The extent to which these conditions impact our results of operations and liquidity will depend on future developments, which are highly uncertain and cannot be predicted, including global supply chain constraints, inflation, tariffs, global conflicts and trade actions/disputes. These effects could have a material adverse impact on our business, liquidity, capital resources and results of operations and those of the third parties on which we rely.
Critical Accounting Estimates
Our significant accounting policies are described in the notes to the Consolidated Financial Statements included elsewhere in this Annual Report on Form 10-K. While all significant accounting policies are important to our Consolidated Financial Statements, certain of these policies may be viewed as being critical. Such policies are those that are both most important to the portrayal of our financial condition and results of operations and require our most difficult, subjective and complex estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses or the related disclosure of contingent assets and liabilities. These estimates are based on our historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ materially from these estimates. The following are our most critical accounting estimates:
Revenue Recognition, Customer Programs and Variable Consideration
Revenue is recognized when control of a promised good is transferred to a customer, in an amount that reflects the consideration that we expect to be entitled to receive in exchange for that good. This occurs either when finished goods are transferred to a common carrier for delivery to the customer or when product is picked up by the customer or the customer’s carrier.
Once a product has transferred to the common carrier or been picked up by the customer, the customer is able to direct the use of, and obtain substantially all of the remaining benefits from, the product. It is at this point that we have a right to payment and the customer has legal title.
Provisions for certain rebates, customer promotional programs, product returns and discounts to customers are accounted for as variable consideration and recorded as a reduction in sales.
We record an estimate of future product returns, chargebacks and logistics deductions concurrent with recording sales, which is made using the most likely amount method that incorporates (i) historical return rates, (ii) current economic trends, (iii) changes in customer demand, (iv) product acceptance, (v) seasonality of our product offerings and (vi) the impact of changes in product formulation, packaging and advertising.
We participate in the promotional programs of our customers to enhance the sale of our products. These promotional programs consist of direct-to-consumer incentives, such as coupons and temporary price reductions, as well as incentives to our customers, such as allowances for new distribution including slotting fees, and cooperative advertising. The costs of such activities are recorded as a reduction to revenue when the related sale takes place. Estimates of the costs of these promotional programs are derived using the most likely amount method, which incorporates (i) historical sales experience, (ii) the current promotional offering, (iii) forecasted data, (iv) current market conditions and (v) communication with customer purchasing/marketing personnel. At the completion of the promotional program, the estimated amounts are adjusted to actual results.
Goodwill and Intangible Assets
At March 31, 2026 and 2025, goodwill and intangible assets were apportioned among similar product groups within our operating segments as follows:
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March 31, 2026
(In thousands)
North American OTC
Healthcare
International OTC
Healthcare
Consolidated
Goodwill
$
550,987
$
30,122
$
581,109
Intangible assets
Indefinite-lived
2,068,752
74,923
2,143,675
Finite-lived
138,903
17,027
155,930
Intangible assets, net
2,207,655
91,950
2,299,605
Total
$
2,758,642
$
122,072
$
2,880,714
March 31, 2025
(In thousands)
North American OTC
Healthcare
International OTC
Healthcare
Consolidated
Goodwill
$
498,936
$
28,489
$
527,425
Intangible assets
Indefinite-lived
2,068,752
68,234
2,136,986
Finite-lived
141,234
17,130
158,364
Intangible assets, net
2,209,986
85,364
2,295,350
Total
$
2,708,922
$
113,853
$
2,822,775
At March 31, 2026, the brands with the highest carrying value were Monistat, BC/Goody's, Summer's Eve, TheraTears and Fleet, comprising approximately 59% of our total intangible assets value.
Goodwill and intangible assets comprise the majority of all of our assets. Goodwill represents the excess of the purchase price over the fair value of assets acquired and liabilities assumed in a business combination. Intangible assets generally represent our tradenames, brand names and patents. When we acquire a brand, we are required to make judgments regarding the value assigned to the associated intangible assets, as well as their respective useful lives. Management considers many factors both prior to and after the acquisition of an intangible asset in determining the value, as well as the useful life, assigned to each intangible asset that we acquire or continue to own and promote.
The most significant factors are:
•Brand History
A brand that has been in existence for a long period of time (e.g., 25, 50 or 100 years) generally warrants a higher valuation and longer life (sometimes indefinite) than a brand that has been in existence for a very short period of time. A brand that has been in existence for an extended period of time generally has been the subject of considerable investment by its previous owner(s) to support product innovation and advertising and marketing.
•Market Position
Consumer products that rank number one or two in their respective market generally have greater name recognition and are known as quality product offerings, which warrant a higher valuation and longer life than products that lag in the marketplace.
•Recent and Projected Sales Growth
Recent sales results present a snapshot as to how the brand has performed in the most recent time periods and represent another factor in the determination of brand value. In addition, projected sales growth provides information about the
36
strength and potential longevity of the brand. A brand that has both strong current and projected sales generally warrants a higher valuation and a longer life than a brand that has weak or declining sales. Similarly, consideration is given to the potential investment, in the form of advertising and marketing, required to reinvigorate a brand that has fallen from favor.
•History of and Potential for Product Extensions
Consideration is given to the product innovation that has occurred during the brand’s history and the potential for continued product innovation that will determine the brand’s future. Brands that can be continually enhanced by new product offerings generally warrant a higher valuation and longer life than a brand that has always “followed the leader.”
After consideration of the factors described above, as well as current economic conditions and changing consumer behavior, management prepares a determination of an intangible asset’s value and useful life based on its analysis. Under accounting guidelines, goodwill is not amortized and must be tested for impairment annually, or more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of the reporting unit below the carrying amount. In a similar manner, indefinite-lived assets are not amortized. They are also subject to an annual impairment test or more frequently if events or changes in circumstances indicate that the asset may be impaired. Additionally, at each reporting period an evaluation must be made to determine whether events and circumstances continue to support an indefinite useful life. Intangible assets with finite lives are amortized over their respective estimated useful lives and must also be tested for impairment whenever events or changes in circumstances indicate that the carrying value of the asset may not be recoverable and exceeds its fair value.
On an annual basis, during the fourth fiscal quarter, concurrent with our annual strategic planning process, or more frequently if conditions indicate that the carrying value of the asset may not be recovered, management performs a review of both the values and, if applicable, useful lives assigned to intangible assets and tests for impairment.
We report goodwill and indefinite-lived intangible assets in two reportable segments: North American OTC Healthcare and International OTC Healthcare. We identify our reporting units in accordance with the FASB ASC Subtopic 280. The carrying value and fair value for intangible assets and goodwill for a reporting unit are calculated based on key assumptions and valuation methodologies. As a result, any material changes to these assumptions could require us to record additional impairment in the future.
We have experienced declines in revenues and profitability of certain brands in the North American OTC Healthcare segment, as discussed in "Results of Operations" below. Sustained or significant future declines in revenue, profitability, other adverse changes in expected operating results and/or unfavorable changes in other economic factors used to estimate fair values of certain brands could indicate that fair value no longer exceeds carrying value, in which case additional non-cash impairment charges may be recorded in future periods.
Goodwill
Goodwill is tested for impairment annually and whenever events and circumstances indicate that impairment may have occurred. As of February 28, 2026 (our annual impairment review date), we had 13 reporting units with goodwill. As part of our annual test for impairment of goodwill, management estimates the discounted cash flows of each reporting unit to estimate their respective fair values. In addition, we considered our market capitalization at February 28, 2026, as compared to the aggregate fair values of our reporting units, to assess the reasonableness of our estimates pursuant to the discounted cash flow methodology. An impairment charge is then recognized for the amount by which the carrying amount exceeds the reporting unit's fair value. In performing the discounted cash flow analysis, management considers current information and assumptions regarding future sales, gross margins and advertising and marketing expenses; the discount rate utilized in the analysis, as well as future cash flows, may be influenced by such factors as changes in interest rates and rates of inflation. Future events, such as competition, changing consumer needs, technological advances and changes in advertising support for our trademarks and tradenames, could cause subsequent evaluations to utilize different assumptions. Additionally, should the related fair value of goodwill be adversely affected as a result of declining sales or margins caused by competition, changing consumer needs or preferences, technological advances or changes in advertising and marketing expenses, we may be required to record additional impairment charges in the future.
At February 29, 2024, February 28, 2025 and February 28, 2026, in conjunction with the annual tests for goodwill impairment, which coincided with our annual strategic planning process, the estimated fair value exceeded the carrying value for all reporting units and accordingly, no impairment charge was taken in either period.
37
Our analysis at February 28, 2026 determined that all reporting units had a fair value that exceeded their carrying value by at least 10%. We performed a sensitivity analysis on our weighted average cost of capital, and we determined that a 50-basis point increase in the weighted average cost of capital would not have resulted in any of our reporting units' fair value being less than their carrying value. Additionally, a 50-basis point decrease in the terminal growth rate used for each reporting unit would not have resulted in any of our reporting units' fair value being less than their carrying value.
Indefinite-Lived Intangible Assets
Indefinite-lived intangibles are tested for impairment annually and whenever events and circumstances indicate that impairment may have occurred. We utilize the excess earnings method to estimate the fair value of our individual indefinite-lived intangible assets. The discount rate utilized in the analysis, as well as future cash flows, may be influenced by such factors as changes in interest rates and rates of inflation.
At each reporting period, management analyzes current events and circumstances to determine whether the indefinite life classification for a trademark or tradename continues to be valid. If circumstances warrant a change to a finite life, the carrying value of the intangible asset would then be amortized prospectively over the estimated remaining useful life.
Management tests the indefinite-lived intangible assets for impairment by comparing the carrying value of the intangible asset to its estimated fair value. Since quoted market prices are seldom available for trademarks and tradenames such as ours, we utilize present value techniques to estimate fair value. Accordingly, management’s projections are utilized to assimilate all of the facts, circumstances and expectations related to the trademark or tradename and estimate the cash flows over its useful life. In a manner similar to goodwill, future events, such as competition, technological advances and changes in advertising support for our trademarks and tradenames, could cause subsequent evaluations to utilize different assumptions. Once that analysis is completed, a discount rate is applied to the cash flows to estimate fair value. In connection with this analysis, management:
•Reviews period-to-period sales and profitability by brand;
•Analyzes industry trends and projects brand growth rates;
•Prepares annual sales forecasts;
•Evaluates advertising effectiveness;
•Analyzes gross margins;
•Reviews contractual benefits or limitations;
•Monitors competitors’ advertising spend and product innovation;
•Prepares projections to measure brand viability over the estimated useful life of the intangible asset; and
•Considers the regulatory environment, as well as industry litigation.
At February 29, 2024, in conjunction with the annual test for impairment of intangible assets, the estimated fair value exceeded the carrying value for all indefinite-lived intangible assets and accordingly, no impairment charge was taken.
As part of our annual impairment test conducted on February 28, 2025, we recognized impairment charges totaling $6.6 million. These charges pertain to non-strategic indefinite-lived intangible assets, reflecting a deliberate shift in sales toward other strategic brands within our portfolio. Of the $6.6 million impairment charge, $4.1 million was associated with our North American OTC Healthcare segment, while $2.4 million impacted our International OTC Healthcare segment.
At February 28, 2026, in conjunction with the annual test for impairment of intangible assets, the estimated fair value exceeded the carrying value for all indefinite-lived intangible assets and accordingly, no impairment charge was taken.
Our analysis as of February 28, 2026 confirmed that all indefinite-lived intangible assets had a fair value exceeding their carrying value by at least 10%, with the exception of Monistat within our North American Women's Health reporting unit. We performed a sensitivity analysis of our weighted average cost of capital, and we determined that a 50-basis point increase in the weighted average cost of capital used to value all of our indefinite-lived intangible assets would have resulted in an impairment charge of $16.6 million. Additionally, a 50-basis point decrease in the terminal growth rate used for each of our indefinite-lived intangible assets would not have resulted in any of our indefinite-lived intangible assets' fair value being less than their carrying value.
Finite-Lived Intangible Assets
On an annual basis, or when events or changes in circumstances indicate the carrying value of the assets may not be recoverable, management performs a review similar to indefinite-lived intangible assets to ascertain the impact of events and circumstances on the estimated useful lives and carrying values of our trademarks and tradenames.
38
If the analysis warrants a change in the estimated useful life of the intangible asset, management will reduce the estimated useful life and amortize the carrying value prospectively over the shorter remaining useful life. Management’s projections are utilized to assimilate all of the facts, circumstances and expectations related to the trademark or tradename and estimate the cash flows over its useful life. Future events, such as competition, technological advances and changes in advertising support for our trademarks and tradenames, could cause subsequent evaluations to utilize different assumptions. In the event that the long-term projections indicate that the carrying value is in excess of the undiscounted cash flows expected to result from the use of the intangible assets, management is required to record an impairment charge. The impairment charge is measured as the excess of the carrying amount of the intangible asset over its fair value.
At February 29, 2024, in conjunction with the annual test for impairment of finite-lived intangible assets, there were no indicators of impairment under the analysis and accordingly, no impairment charge was taken.
Our analysis at February 28, 2025 concluded that the fair value of several non-strategic finite-lived intangible assets did not exceed their carrying values, and as such, impairment charges of $5.9 million were recorded. These charges relate to non-strategic finite-lived intangible assets, driven by a deliberate shift in sales toward other strategic brands within our portfolio. The impairments were predominantly associated with our North American OTC Healthcare segment.
At February 28, 2026, in conjunction with the annual test for impairment of finite-lived intangible assets, there were no indicators of impairment under the analysis and accordingly, no impairment charge was taken.
Stock-Based Compensation
The Compensation and Equity topic of the FASB ASC 718 requires us to measure the cost of services to be rendered based on the grant-date fair value of the equity award. For most of our awards, compensation expense is to be recognized over the period during which an employee is required to provide service in exchange for the award, generally referred to as the requisite service period. We also grant performance stock units, which are contingent on the attainment of certain goals of the Company. Information utilized in the determination of fair value includes the following:
•Type of instrument (i.e., restricted shares, stock options or performance shares);
•Strike price of the instrument;
•Market price of our common stock on the date of grant;
•Discount rates;
•Duration of the instrument; and
•Volatility of our common stock in the public market.
Additionally, management must estimate the expected attrition rate of the recipients to enable it to estimate the amount of non-cash compensation expense to be recorded in our financial statements. While management prepares various analyses to estimate the respective variables, a change in assumptions or market conditions, as well as changes in the anticipated or actual attrition rates, could have a significant impact on the future amounts recorded as non-cash compensation expense.
Recent Accounting Pronouncements
A description of recently issued and adopted accounting pronouncements is included in the notes to the Consolidated Financial Statements in Item 8, Note 1 of this Annual Report.
39
Results of Operations
2026 compared to 2025
Total Segment Revenues
The following table represents total revenue by segment, including product groups, for each of the fiscal years ended March 31, 2026 and 2025.
Increase (Decrease)
(In thousands)
2026
%
2025
%
Amount
%
North American OTC Healthcare
Analgesics
$
108,300
9.9
$
112,173
9.9
$
(3,873)
(3.5)
Cough & Cold
76,878
7.1
82,533
7.3
(5,655)
(6.9)
Women's Health
205,053
18.8
216,335
18.9
(11,282)
(5.2)
Gastrointestinal
179,300
16.5
174,891
15.4
4,409
2.5
Eye & Ear Care
126,132
11.6
158,858
14.0
(32,726)
(20.6)
Dermatologicals
116,618
10.7
120,770
10.6
(4,152)
(3.4)
Oral Care
86,958
8.0
81,868
7.2
5,090
6.2
Other OTC
14,337
1.3
12,582
1.1
1,755
13.9
Total North American OTC Healthcare
913,576
83.9
960,010
84.4
(46,434)
(4.8)
International OTC Healthcare
Analgesics
5,636
0.5
5,524
0.5
112
2.0
Cough & Cold
25,031
2.3
23,681
2.1
1,350
5.7
Women's Health
22,712
2.1
20,496
1.8
2,216
10.8
Gastrointestinal
80,488
7.5
81,052
7.1
(564)
(0.7)
Eye & Ear Care
16,807
1.5
24,464
2.2
(7,657)
(31.3)
Dermatologicals
9,313
0.9
8,177
0.7
1,136
13.9
Oral Care
14,093
1.3
13,162
1.2
931
7.1
Other OTC
1,049
—
1,196
—
(147)
(12.3)
Total International OTC Healthcare
175,129
16.1
177,752
15.6
(2,623)
(1.5)
Total Consolidated
$
1,088,705
100.0
$
1,137,762
100.0
$
(49,057)
(4.3)
Total segment revenues for 2026 were $1,088.7 million, a decrease of $49.1 million, or 4.3%, versus 2025.
North American OTC Healthcare Segment
Revenues for the North American OTC Healthcare segment decreased $46.4 million, or 4.8%, during 2026 versus 2025. The $46.4 million decrease was primarily attributable to a decrease in sales in the Eye & Ear Care category, due to a limited ability to supply demand for Clear Eyes.
International OTC Healthcare Segment
Revenues for the International OTC Healthcare segment decreased $2.6 million, or 1.5%, during 2026 versus 2025. The $2.6 million decrease was mainly attributable to a decrease in sales in the Eye & Ear Care category, partly offset by an increase in sales in the Women's Health and Cough & Cold categories.
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Gross Profit
The following table represents our gross profit and gross profit as a percentage of total segment revenues, by segment for each of the fiscal years ended March 31, 2026 and 2025.
(In thousands)
Increase (Decrease)
Gross Profit
2026
%
2025
%
Amount
%
North American OTC Healthcare
$
500,877
54.8
$
531,139
55.3
$
(30,262)
(5.7)
International OTC Healthcare
94,701
54.1
103,324
58.1
(8,623)
(8.3)
$
595,578
54.7
$
634,463
55.8
$
(38,885)
(6.1)
Gross profit for 2026 decreased $38.9 million, or 6.1%, versus 2025. As a percentage of total revenues, gross profit decreased to 54.7% in 2026 from 55.8% in 2025, primarily due to the decrease in revenue and costs related to the acquisition of our Canadian manufacturing facility.
North American OTC Healthcare Segment
Gross profit for the North American OTC Healthcare segment decreased $30.3 million, or 5.7%, during 2026 versus 2025. As a percentage of North American OTC Healthcare revenues, gross profit decreased to 54.8% during 2026 from 55.3% during 2025, primarily due to the decrease in revenue and costs related to the acquisition of our Canadian manufacturing facility.
International OTC Healthcare Segment
Gross profit for the International OTC Healthcare segment decreased $8.6 million, or 8.3%, during 2026 versus 2025. As a percentage of International OTC Healthcare revenues, gross profit decreased to 54.1% during 2026 from 58.1% during 2025, primarily due to increased inflation as well as channel and product mix.
Contribution Margin
Contribution margin is our segment measure of profitability. It is defined as gross profit less advertising and marketing expenses.
The following table represents our contribution margin and contribution margin as a percentage of total segment revenues, by segment for each of the fiscal years ended March 31, 2026 and 2025.
(In thousands)
Increase (Decrease)
Contribution Margin
2026
%
2025
%
Amount
%
North American OTC Healthcare
$
380,030
41.6
$
401,708
41.8
$
(21,678)
(5.4)
International OTC Healthcare
66,766
38.1
77,032
43.3
(10,266)
(13.3)
$
446,796
41.0
$
478,740
42.1
$
(31,944)
(6.7)
North American OTC Healthcare Segment
Contribution margin for the North American OTC Healthcare segment decreased $21.7 million, or 5.4%, during 2026 versus 2025. As a percentage of North American OTC Healthcare revenues, contribution margin for the North American OTC Healthcare segment decreased to 41.6% during 2026 from 41.8% during 2025. The contribution margin decrease as a percentage of revenue was primarily due to the decrease in gross profit margin above, partly offset by a decrease in advertising and marketing spend.
International OTC Healthcare Segment
Contribution margin for the International OTC Healthcare segment decreased $10.3 million, or 13.3%, during 2026 versus 2025. As a percentage of International OTC Healthcare revenues, contribution margin for the International OTC Healthcare segment decreased to 38.1% during 2026 from 43.3% during 2025. The contribution margin decrease as a percentage of revenues was primarily due to the decrease in gross profit margin noted above.
General and Administrative
General and administrative expenses were $116.4 million for 2026 versus $108.2 million for 2025. The increase in general and administrative expenses was primarily due to increases in compensation-related expenses, acquisition-related costs and an increase in our allowance for doubtful accounts pertaining to one specific customer.
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Depreciation and Amortization
Depreciation and amortization expense was $20.9 million for 2026 versus $21.3 million for 2025. The decrease in depreciation and amortization expenses was primarily related to a decrease in amortization expense due to impairment charges taken on certain finite-lived brands in fiscal 2025, as well as certain intangible assets being fully amortized during 2025.
Other Expense, Net
During fiscal 2026, we wrote off a supplier loan of $10.3 million, previously included in Accounts receivable, net.
Tradename Impairment
In 2025, our annual impairment test resulted in total impairment charges of $12.5 million. This included $6.6 million related to non-strategic indefinite-lived intangible assets and $5.9 million related to non-strategic finite-lived assets. The impairments primarily reflected the deliberate shift in sales toward other strategic brands within our portfolio. Of the total charges, $10.0 million pertains to our North American OTC Healthcare segment, while $2.5 million related to our International OTC Healthcare segment.
Interest Expense, Net
Interest expense, net was $42.3 million during 2026 versus $47.6 million during 2025. The average cost of borrowing decreased to 4.5% for 2026 from 4.7% for 2025. The average indebtedness decreased to $1.0 billion during 2026 from $1.1 billion in 2025.
Income Taxes
The provision for income taxes during 2026 was $67.2 million versus $69.6 million in 2025. The effective tax rate on income before income taxes was 26.1% during 2026 versus 24.5% during 2025. The increase in the effective tax rate in 2026 compared to 2025 was primarily due to the mix of earnings in the U.S. and foreign jurisdictions and establishing a taxable presence in a new state.
Results of Operations
2025 compared to 2024
For a discussion of fiscal 2025 compared to 2024, please refer to Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations in our 2025 Annual Report on Form 10-K, filed with the SEC on May 9, 2025.
Liquidity and Capital Resources
Liquidity
Our primary source of cash comes from our cash flow from operations. In the past, we have supplemented this source of cash with various debt facilities, primarily in connection with acquisitions. We have financed our operations, and expect to continue to finance our operations over the next twelve months, with a combination of funds generated from operations and borrowings. In connection with the recently announced expected acquisition of a portfolio of brands, including Breathe Right®, we expect to fund the transaction through a combination of a new term loan facility and cash on hand. Our principal uses of cash are for operating expenses, debt service, capital expenditures, share repurchases and acquisitions. Based on our current levels of operations and anticipated growth, excluding acquisitions, we believe that our cash generated from operations and our existing credit facilities will be adequate to finance our working capital and capital expenditures through the next twelve months, although no assurance can be given in this regard. See "Economic Environment" above with respect to current uncertainties facing us from a liquidity perspective.
Year Ended March 31,
$ Change
(In thousands)
2026
2025
2024
2026 vs. 2025
2025 vs. 2024
Net cash provided by (used in):
Operating activities
$
257,627
$
251,515
$
248,926
$
6,112
$
2,589
Investing activities
(136,841)
(17,452)
(20,111)
(119,389)
2,659
Financing activities
(156,062)
(182,075)
(241,015)
26,013
58,940
Effects of exchange rate changes on cash and cash equivalents
1,260
(573)
180
1,833
(753)
Net change in cash and cash equivalents
$
(34,016)
$
51,415
$
(12,020)
$
(85,431)
$
63,435
42
2026 compared to 2025
Operating Activities
Net cash provided by operating activities was $257.6 million for 2026, compared to $251.5 million for 2025. The $6.1 million increase in net cash provided by operating activities was due to the timing of working capital, partially offset by a decrease in net income before non-cash items.
Investing Activities
Net cash used in investing activities was $136.8 million for 2026, compared to $17.5 million for 2025. The increase of $119.4 million in net cash used in investing activities was primarily due to acquisitions during the current year.
Financing Activities
Net cash used in financing activities was $156.1 million for 2026, compared to $182.1 million for 2025. The decrease of $26.0 million in net cash used in financing activities was primarily due to a decrease in net debt repayments of $138.0 million, partly offset by an increase in the repurchase of shares of our common stock in conjunction with our share repurchase program of $104.8 million and a decrease in proceeds from the exercise of stock options of $10.5 million.
2025 compared to 2024
Operating Activities
Net cash provided by operating activities was $251.5 million for 2025, compared to $248.9 million for 2024. The $2.6 million increase in net cash provided by operating activities was due to an increase in net income before non-cash items, partly offset by increased working capital.
Investing Activities
Net cash used in investing activities was $17.5 million for 2025, compared to $20.1 million for 2024. The decrease of $2.7 million in net cash used in investing activities was primarily due to a decrease in capital expenditures of $1.3 million and changes in a short-term loan receivable of $1.2 million.
Financing Activities
Net cash used in financing activities was $182.1 million for 2025, compared to $241.0 million for 2024. The decrease of $58.9 million was primarily due to a decrease in debt repayments of $90.0 million, partly offset by an increase in the repurchase of shares of our common stock in conjunction with our share repurchase program of $26.5 million and a decrease in proceeds from the exercise of stock options of $3.3 million.
Capital Resources
2012 Term Loan and 2012 ABL Revolver:
On January 31, 2012, Prestige Brands, Inc. (the “Borrower") entered into a senior secured credit facility, which originally consisted of (i) a $660.0 million term loan with a 7-year maturity (the "2012 Term Loan") and (ii) a $50.0 million asset-based revolving line of credit with a 5-year maturity (the "2012 ABL Revolver"). In subsequent years, we have utilized portions of our accordion feature to increase the amount of our borrowing capacity under the 2012 ABL Revolver to the current amount of $200.0 million, reduced our borrowing rate on the 2012 ABL Revolver and made several other changes to the 2012 ABL Revolver. We have also amended the 2012 Term Loan several times.
On June 12, 2023, we entered Amendment No. 7 to the 2012 Term Loan ("Term Loan Amendment No. 7"), effective July 1, 2023. Term Loan Amendment No. 7 provided for the replacement of LIBOR with SOFR as our reference rate for the 2012 Term Loan.
On April 4, 2023, we entered into Amendment No. 8 ("ABL Amendment No. 8") to the 2012 ABL Revolver. ABL Amendment No. 8 provides for the replacement of LIBOR with SOFR as our reference rate for the 2012 ABL Revolver.
On December 8, 2023, we entered into Amendment No. 9 ("ABL Amendment No. 9") to the 2012 ABL Revolver. ABL Amendment No. 9 provides for (i) an increase in the aggregate revolving commitment of the facility from $175.0 million to $200.0 million, (ii) an extension of the maturity date of the 2012 ABL Revolver to December 8, 2028 and (iii) increased flexibility under the credit agreement governing the 2012 ABL Revolver, including increased flexibility related to restricted payments, debt incurrence and borrowing base calculations. There were no changes to interest terms as a result of this amendment.
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2019 Senior Notes:
On December 2, 2019, the Borrower issued $400.0 million aggregate principal amount of 5.125% senior notes due January 15, 2028 (the "2019 Senior Notes"), pursuant to an indenture dated December 2, 2019, among the Borrower, the guarantors party thereto (including the Company) and U.S. Bank National Association, as trustee. We used the net proceeds from the 2019 Senior Notes, together with cash on hand, to redeem all $400.0 million of our then-outstanding senior notes issued on December 17, 2013 that were due in 2021, and to pay related fees and expenses.
2021 Senior Notes:
On March 1, 2021, the Borrower issued $600.0 million aggregate principal amount of 3.750% senior notes due April 1, 2031 (the "2021 Senior Notes"), pursuant to an indenture dated March 1, 2021, among the Borrower, the guarantors party thereto (including the Company) and U.S. Bank National Association, as trustee. We used the net proceeds from the 2021 Senior Notes to redeem all $600.0 million of our then-outstanding 2016 senior notes issued on February 19, 2016 and March 21, 2018, which were due in 2024, and to pay related fees and expenses.
Interest, Redemptions and Restrictions:
During fiscal 2025, we repaid the balance of our 2012 Term Loan and terminated all related commitments. For the year ended March 31, 2025, during the period it was outstanding, the average interest rate on the 2012 Term Loan was 7.1%. For the year ended March 31, 2026, the average interest rate on amounts borrowed under the 2012 ABL Revolver was 3.9%. There were no borrowings under the 2012 ABL Revolver at any time during 2025.
We have the option to redeem all or a portion of the 2019 Senior Notes at any time on or after January 15, 2023 at the redemption prices set forth in the indenture governing the 2019 Senior Notes, plus accrued and unpaid interest, if any. Subject to certain limitations, in the event of a change of control (as defined in the indenture governing the 2019 Senior Notes), the Borrower will be required to make an offer to purchase the 2019 Senior Notes at a price equal to 101% of the aggregate principal amount of the notes repurchased, plus accrued and unpaid interest, if any, to the date of repurchase.
We have the option to redeem all or a portion of the 2021 Senior Notes at any time on or after April 1, 2026 at the redemption prices set forth in the indenture governing the 2021 Senior Notes, plus accrued and unpaid interest, if any. Subject to certain limitations, in the event of a change of control (as defined in the indenture governing the 2021 Senior Notes), the Borrower will be required to make an offer to purchase the 2021 Senior Notes at a price equal to 101% of the aggregate principal amount of the notes repurchased, plus accrued and unpaid interest, if any, to the date of repurchase.
The credit agreement governing the 2012 ABL Revolver and the indentures governing the 2021 Senior Notes and the 2019 Senior Notes contain provisions that restrict us from undertaking specified corporate actions, such as asset dispositions, acquisitions, dividend payments, repurchases of common shares outstanding, changes of control, incurrences of indebtedness, issuance of equity, creation of liens, making of loans and transactions with affiliates. Additionally, the credit agreement governing the 2012 ABL Revolver and the indentures governing the 2021 Senior Notes and the 2019 Senior Notes contain cross-default provisions, whereby a default pursuant to the terms and conditions of certain indebtedness will cause a default on the remaining indebtedness under the credit agreement governing the 2012 ABL Revolver and the indentures governing the 2021 Senior Notes and the 2019 Senior Notes.
As of March 31, 2026, we had an aggregate of $1.0 billion of outstanding indebtedness, which consisted of the following:
•$400.0 million of 5.125% 2019 Senior Notes due January 15, 2028; and
•$600.0 million of 3.750% 2021 Senior Notes due April 1, 2031.
As of March 31, 2026, we had no balance outstanding on the 2012 ABL Revolver and a borrowing capacity of $182.9 million.
Debt Covenants
Our debt facilities contain various financial covenants, including provisions that require us to maintain certain fixed charge ratios. Specifically, we must:
•Have a fixed charge ratio of greater than 1.0 to 1.0 (defined as, with certain adjustments, the ratio of our consolidated EBITDA minus capital expenditures to our trailing twelve months consolidated interest paid, taxes paid and other specified payments). Our fixed charge requirement remains level throughout the term of the credit agreement.
44
At March 31, 2026, we were in compliance with the applicable financial and restrictive covenants under the credit agreement governing the 2012 ABL Revolver and the indentures governing the 2021 Senior Notes and the 2019 Senior Notes. Additionally, management anticipates that in the normal course of operations, we will continue to be in compliance with the financial and restrictive covenants during fiscal 2027.
Commitments
Ongoing commitments under various contractual and commercial obligations have not materially changed since our 2025 Annual Report on Form 10-K.
We do not have any off-balance sheet arrangements or financing activities with special-purpose entities.
Inflation
Inflationary factors such as increases in the costs of raw materials, packaging materials, purchased product, labor costs, transportation costs, tariffs and overhead may adversely affect our operating results and financial condition. Although we do not believe that inflation has had a material impact on our financial condition or results of operations for the three most recent fiscal years, supply and labor disruptions may have an inflationary impact on our costs and a high rate of inflation in the future could have a material adverse effect on our financial condition and results of operations. More volatility in crude oil prices may have an adverse impact on transportation costs, as well as certain petroleum based raw materials and packaging material. Although we make efforts to minimize the impact of inflationary factors, including by raising prices to our customers, a high rate of pricing volatility associated with crude oil supplies or other raw materials used in our products may have an adverse effect on our operating results.