For personal use only FY25 : RESULTS PRESENTATION | August 29 2025 N B C U N I V E R S A L M E D I A P A R T N E R S H I P & F Y 2 0 R E S U L T S P R E S E N T A T I O N │ A U G U S T 2 0 2 0 FY25 RESULTS PRESENTATION AUG 2025 IMPORTANT NOTICE AND DISCLAIMER This document and any oral presentation accompanying it has been prepared in good faith, however, no express or implied representation or warranty is given as to the accuracy or completeness of the information in this document, in any accompanying pres ...

Group 1 - Premium Brands (TSX: PBH:CA) is a Canadian and U.S. food producer, marketer, and distributor that is showing signs of stability in its stock performance after a period of fluctuation [1] - The company is experiencing steady organic growth, indicating a positive trend in its operational performance [1]

Financial Data and Key Metrics Changes - Q1 sales were approximately $250 million, which was below the forecast of $258 million to $260 million, representing a year-over-year decline largely due to supply chain issues in eye care [6][12] - Gross margin expanded by 150 basis points to 56.2%, attributed to ongoing cost savings efforts [8][12] - Diluted EPS was $0.95, up approximately 6% compared to the adjusted prior year, despite the sales miss [9][16] - Free cash flow reached a quarterly record of $78 million, enabling capital deployment to enhance shareholder value [9][17] Business Line Data and Key Metrics Changes - North America segment revenues decreased by 8.4%, while International segment revenues increased by 7.1% year-over-year [13] - The International segment experienced organic sales growth of 7%, driven by broad-based sales growth [14] Market Data and Key Metrics Changes - The company anticipates a full-year revenue of $1.1 billion to $1.115 billion, with organic revenue expected to decline approximately 1.5% to 3% [22] - For Q2, revenues are expected to be approximately $256 million to $259 million, down year-over-year due to supply chain timing and lower retail order patterns [22] Company Strategy and Development Direction - The company announced the acquisition of Pillar Five to secure and expand long-term supply for eye care products, which is expected to improve supply stability in the second half of the year [11][19] - The company maintains confidence in its diverse consumer healthcare portfolio and long-term growth opportunities despite the disappointing start to the year [21] Management Comments on Operating Environment and Future Outlook - Management highlighted heightened business environment uncertainty due to supply chain constraints, high inflation, and geopolitical events [5] - The company expects significant improvement in Clear Eye shipments in the second half of the year, with a focus on recovering lost sales in FY 2027 and beyond [22][29] Other Important Information - The anticipated cost of tariffs for the full year is approximately $5 million, which the company expects to offset through strategic actions [15] - The acquisition of Pillar Five is expected to be funded from cash on hand and will have a minimal impact on the P&L, being approximately neutral to EPS on a normalized basis [19][63] Q&A Session Summary Question: Change in retail order patterns and inventory destocking - Management noted increased order volatility from retailers in July, which is expected to significantly impact Q2 but anticipates a return to normalized order trends in the second half [25][26] Question: Confidence in Clear Eyes supply normalizing - Management expressed confidence in supply normalizing in the back half of the year, with expectations of recovering lost sales in FY 2027 and beyond [29][30] Question: Impact of bringing eye care manufacturing in-house on margins - Management does not expect any meaningful movement in gross margin as a result of the acquisition of Pillar Five, indicating it will be largely neutral to the P&L [37][38] Question: Inventory levels and destocking expectations - Management does not see any meaningful ramp-up of inventory among their largest customers, indicating that inventory levels are not inflated [45][46] Question: Performance of the women's health business - Management remains optimistic about the continued recovery of the Summer's Eve brand, expecting positive performance for the remainder of the year [48] Question: Sustaining international growth - Management is confident in sustaining international growth, expecting a slight softening compared to the first quarter but still in line with long-term growth algorithms [70]

Financial Data and Key Metrics Changes - Q1 sales were approximately $250 million, which was below the forecast of $258 million to $260 million, representing a year-over-year decline largely due to supply chain issues and lower sales in eye care [5][10] - Gross margin expanded by 150 basis points to 56.2%, attributed to cost savings efforts [6][12] - Diluted EPS was $0.95, up approximately 6% from the adjusted prior year, despite the sales miss [7][14] - Free cash flow reached a record $78 million, enabling capital deployment for shareholder value enhancement [7][15] Business Line Data and Key Metrics Changes - North America segment revenues decreased by 8.4%, while International segment revenues increased by 7.1% year-over-year [11][12] - The eye care segment faced significant supply constraints, impacting sales, while other segments like Dramamine and Fleet showed healthy consumption trends [6][12] Market Data and Key Metrics Changes - The International segment experienced organic sales growth of 7%, driven by broad-based sales growth [12] - E-commerce channel saw double-digit year-over-year consumption growth, indicating a long-term trend towards higher online purchasing [12] Company Strategy and Development Direction - The company announced the acquisition of Pillar Five to secure and expand long-term supply for eye care products, which is expected to improve supply stability in the second half of the year [9][17] - The company anticipates revenues for fiscal 2026 to be between $1.1 billion and $1.115 billion, with organic revenue expected to decline approximately 1.5% to 3% [20] Management's Comments on Operating Environment and Future Outlook - Management expressed disappointment in the start of the year but remains confident in the long-term growth opportunities of their consumer healthcare portfolio [19] - The company expects significant improvement in Clear Eye shipments in the second half of the year, despite current supply chain challenges [20][29] Other Important Information - The company maintained a leverage ratio of approximately 2.4 times and repurchased over 400,000 shares in Q1 [7][15] - The anticipated cost of tariffs for the full year is approximately $5 million, which the company expects to offset through strategic actions [13] Q&A Session Summary Question: Change in retail order patterns and inventory destocking - Management noted increased order volatility from retailers in July, disconnected from consistent consumption levels, impacting Q2 significantly [23][24] Question: Confidence in supply normalizing for Clear Eyes - Management expressed confidence in supply normalizing in the back half of the year, with new suppliers and a high-speed line expected to contribute [26][29] Question: Impact of bringing eye care manufacturing in-house on margins - Management indicated no meaningful movement in gross margin as a result of bringing manufacturing in-house, expecting it to be largely neutral to the P&L [36][39] Question: Outlook for cough and cold season - Management maintained the initial guidance for a modest decline in the cough and cold category, too early to tell at this point [42] Question: Inventory levels within segments - Management reported no meaningful ramp-up of inventory, indicating that current order patterns are disconnected from consumption [44] Question: Performance of Summer's Eve brand - Management expressed confidence in the continued positive momentum of the Summer's Eve brand for the remainder of the year [46] Question: International segment growth sustainability - Management expects to sustain international growth, projecting a long-term algorithm of over 5% for the segment [68]

Q1 FY26 Performance - Revenue reached $249.5 million, a 6.6% decrease compared to the previous year[18, 22] - Organic revenue declined by 6.4% year-over-year, primarily due to Clear Eyes supply constraints[17, 24] - Diluted EPS increased by 5.6% to $0.95 compared to the adjusted prior year[11, 17, 18, 22] - Free cash flow was solid at $78 million[11] Financial Metrics - Gross margin improved to 56.2%[11, 22, 24] - EBITDA remained relatively flat at $79.6 million[17, 18, 22] - EBITDA margin increased to 31.9%[22, 24] - A&M expenses accounted for 14.0% of revenue[22, 24] - G&A expenses represented 11.4% of revenue[22, 24] Strategic Initiatives and Outlook - The company entered into an agreement to acquire Pillar5 Pharma for approximately $100 million[11, 25] - The company repurchased approximately 400,000 shares for $35 million[25] - Full-year revenue is projected to be between $1.1 billion and $1.115 billion[28] - Full-year free cash flow is expected to be $245 million or more[28]

Company Performance - Prestige Consumer Healthcare reported quarterly earnings of $0.95 per share, missing the Zacks Consensus Estimate of $1.01 per share, representing an earnings surprise of -5.94% [1] - The company posted revenues of $249.53 million for the quarter ended June 2025, missing the Zacks Consensus Estimate by 4.73%, compared to year-ago revenues of $267.14 million [2] - Over the last four quarters, the company has surpassed consensus EPS estimates two times and topped consensus revenue estimates three times [2] Stock Outlook - Prestige Consumer Healthcare shares have lost about 3.8% since the beginning of the year, while the S&P 500 has gained 7.9% [3] - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] - The current consensus EPS estimate for the coming quarter is $1.19 on revenues of $290.86 million, and for the current fiscal year, it is $4.76 on revenues of $1.15 billion [7] Industry Context - The Medical - Products industry, to which Prestige Consumer Healthcare belongs, is currently in the bottom 37% of over 250 Zacks industries, indicating potential challenges ahead [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact the stock's performance [5] - The unfavorable trend in estimate revisions prior to the earnings release has resulted in a Zacks Rank 4 (Sell) for the stock, suggesting expected underperformance in the near future [6]

PART I. FINANCIAL INFORMATION This section presents the company's unaudited condensed consolidated financial statements and related notes for the quarter [Item 1. Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for Prestige Consumer Healthcare Inc., including statements of income and comprehensive income, balance sheets, statements of changes in stockholders' equity, and cash flows for the three months ended June 30, 2025 and 2024, along with detailed notes explaining the company's business, accounting policies, and specific financial line items [Condensed Consolidated Statements of Income and Comprehensive Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income%20and%20Comprehensive%20Income) This statement details the company's financial performance, including revenues, expenses, and net income, for the reporting period | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change (YoY) | % Change (YoY) | | :-------------------- | :------------------------------- | :------------------------------- | :----------- | :-------------- | | Net sales | $249,278 | $266,835 | $(17,557) | -6.6% | | Total revenues | $249,530 | $267,142 | $(17,612) | -6.6% | | Gross profit | $140,331 | $146,022 | $(5,691) | -3.9% | | Operating income | $71,756 | $72,046 | $(290) | -0.4% | | Net income | $47,466 | $49,068 | $(1,602) | -3.3% | | Basic EPS | $0.96 | $0.98 | $(0.02) | -2.0% | | Diluted EPS | $0.95 | $0.98 | $(0.03) | -3.1% | | Comprehensive income | $52,870 | $52,228 | $642 | 1.2% | [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This statement presents the company's financial position, including assets, liabilities, and equity, at specific points in time | Metric (in thousands) | June 30, 2025 | March 31, 2025 | Change (QoQ) | % Change (QoQ) | | :-------------------- | :------------ | :------------- | :----------- | :------------- | | Cash and cash equivalents | $139,502 | $97,884 | $41,618 | 42.5% | | Total current assets | $480,518 | $448,328 | $32,190 | 7.2% | | Total Assets | $3,431,625 | $3,402,218 | $29,407 | 0.9% | | Total current liabilities | $109,668 | $106,623 | $3,045 | 2.9% | | Total Liabilities | $1,576,143 | $1,567,321 | $8,822 | 0.6% | | Total Stockholders' Equity | $1,855,482 | $1,834,897 | $20,585 | 1.1% | [Condensed Consolidated Statements of Changes in Stockholders' Equity](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20Equity) This statement outlines changes in the company's equity accounts, including net income, stock-based compensation, and share repurchases | Item (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :------------------ | :------------------------------- | :------------------------------- | | Stock-based compensation | $3,682 | $3,425 | | Exercise of stock options | $3,155 | $1,975 | | Treasury share repurchases | $(39,122) | $(31,945) | | Net income | $47,466 | $49,068 | | Comprehensive income | $5,404 | $3,160 | | Total Stockholders' Equity (End of Period) | $1,855,482 | $1,680,767 | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This statement summarizes the cash inflows and outflows from operating, investing, and financing activities for the period | Cash Flow Activity (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change (YoY) | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------- | | Net cash provided by operating activities | $79,013 | $54,776 | $24,237 | | Net cash (used in) investing activities | $(1,938) | $(2,130) | $192 | | Net cash (used in) financing activities | $(36,282) | $(65,522) | $29,240 | | Effects of exchange rate changes on cash and cash equivalents | $825 | $663 | $162 | | Increase (Decrease) in cash and cash equivalents | $41,618 | $(12,213) | $53,831 | | Cash and cash equivalents - end of period | $139,502 | $34,256 | $105,246 | [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures supporting the condensed consolidated financial statements [Note 1. Business and Basis of Presentation](index=10&type=section&id=Note%201.%20Business%20and%20Basis%20of%20Presentation) This note describes the company's business, its accounting policies, and the basis for preparing the financial statements - Prestige Consumer Healthcare Inc. develops, manufactures, markets, sells, and distributes over-the-counter (OTC) health and personal care products in North America, Australia, and other international markets[20](index=20&type=chunk) - The company faces economic uncertainty due to evolving fiscal policy, global supply chain constraints, interest rate changes, high inflation, geopolitical events, and tariffs, which could impact product demand, supply, and costs[21](index=21&type=chunk)[22](index=22&type=chunk) - The unaudited Condensed Consolidated Financial Statements are prepared in accordance with GAAP for interim financial reporting and include normal recurring adjustments[23](index=23&type=chunk) - Management's significant estimates include valuation of intangible assets, stock-based compensation, fair value of debt, sales returns, trade promotional allowances, inventory obsolescence, and income taxes[24](index=24&type=chunk) - The company is evaluating the impact of new FASB ASUs 2024-03 (Expense Disaggregation Disclosures) and 2023-09 (Improvements to Income Tax Disclosures) on its financial statements, effective for annual periods beginning after December 15, 2026, and December 15, 2024, respectively[25](index=25&type=chunk)[26](index=26&type=chunk)[27](index=27&type=chunk) [Note 2. Inventories](index=11&type=section&id=Note%202.%20Inventories) This note details the composition and valuation methods for the company's inventory assets | Components of Inventories (in thousands) | June 30, 2025 | March 31, 2025 | | :-------------------------------------- | :------------ | :------------- | | Packaging and raw materials | $19,158 | $26,562 | | Work in process | $2,382 | $2,880 | | Finished goods | $131,586 | $118,267 | | **Total Inventories** | **$153,126** | **$147,709** | - Inventories are carried at the lower of cost or net realizable value, with a reduction for obsolete and slow-moving inventory of **$5.6 million** at June 30, 2025, up from **$4.0 million** at March 31, 2025[28](index=28&type=chunk) [Note 3. Goodwill](index=11&type=section&id=Note%203.%20Goodwill) This note provides information on the company's goodwill balance and any impairment assessments | Goodwill (in thousands) | North American OTC Healthcare | International OTC Healthcare | Consolidated | | :---------------------- | :---------------------------- | :--------------------------- | :----------- | | Balance - March 31, 2025 | $498,936 | $28,489 | $527,425 | | Effects of foreign currency exchange rates | — | $889 | $889 | | Balance - June 30, 2025 | $498,936 | $29,378 | $528,314 | - No goodwill impairment charge was taken as of February 28, 2025, and no events indicating potential impairment were identified as of June 30, 2025[29](index=29&type=chunk)[30](index=30&type=chunk) [Note 4. Intangible Assets, net](index=12&type=section&id=Note%204.%20Intangible%20Assets%2C%20net) This note details the company's intangible assets, including trademarks, and their amortization | Intangible Assets (in thousands) | Indefinite-Lived Trademarks | Finite-Lived Trademarks and Customer Relationships | Totals | | :------------------------------- | :-------------------------- | :----------------------------------------------- | :----- | | Balance — March 31, 2025 | $2,136,986 | $158,364 | $2,295,350 | | Effects of foreign currency exchange rates | $3,197 | $752 | $3,949 | | Amortization | — | $(4,470) | $(4,470) | | Balance — June 30, 2025 | $2,140,183 | $154,646 | $2,294,829 | - Amortization expense was **$4.5 million** for the three months ended June 30, 2025, down from **$5.0 million** in the prior year[31](index=31&type=chunk) - No impairment charge was taken for intangible assets as of February 28, 2025, and no events indicating potential impairment were identified as of June 30, 2025[32](index=32&type=chunk) [Note 5. Leases](index=12&type=section&id=Note%205.%20Leases) This note outlines the company's lease arrangements, including lease costs and liabilities | Lease Cost (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :------------------------ | :------------------------------- | :------------------------------- | | Finance lease cost | $1,180 | $674 | | Operating lease cost | $1,938 | $1,704 | | Short term lease cost | $34 | $32 | | Variable lease cost | $4,826 | $16,423 | | **Total net lease cost** | **$7,978** | **$18,833** | | Lease Liabilities (in thousands) | Operating Leases | Finance Leases | Total | | :------------------------------- | :--------------- | :------------- | :---- | | Total present value of lease payments | $27,469 | $22,506 | $49,975 | - Weighted average remaining lease terms are **4.55 years** for operating leases and **7.87 years** for finance leases, with weighted average discount rates of **6.57%** and **6.32%**, respectively, as of June 30, 2025[34](index=34&type=chunk) [Note 6. Other Accrued Liabilities](index=13&type=section&id=Note%206.%20Other%20Accrued%20Liabilities) This note provides a breakdown of the company's various accrued liabilities | Other Accrued Liabilities (in thousands) | June 30, 2025 | March 31, 2025 | | :--------------------------------------- | :------------ | :------------- | | Accrued marketing costs | $32,731 | $26,324 | | Accrued compensation costs | $5,798 | $14,205 | | Income taxes payable | $5,452 | $830 | | **Total Other Accrued Liabilities** | **$63,782** | **$63,458** | [Note 7. Long-Term Debt](index=14&type=section&id=Note%207.%20Long-Term%20Debt) This note details the company's long-term debt obligations, including senior notes and credit facilities | Long-Term Debt (in thousands) | June 30, 2025 | March 31, 2025 | | :---------------------------- | :------------ | :------------- | | 2021 Senior Notes (3.750%, due April 1, 2031) | $600,000 | $600,000 | | 2019 Senior Notes (5.125%, due January 15, 2028) | $400,000 | $400,000 | | **Long-term debt, net** | **$992,749** | **$992,357** | - As of June 30, 2025, the company had no outstanding balance on its **$173.2 million** asset-based revolving credit facility[36](index=36&type=chunk) | Year Ending March 31, | Amount (in thousands) | | :-------------------- | :-------------------- | | 2028 | $400,000 | | Thereafter | $600,000 | | **Total** | **$1,000,000** | [Note 8. Fair Value Measurements](index=14&type=section&id=Note%208.%20Fair%20Value%20Measurements) This note describes the fair value measurements of the company's financial instruments - The fair values of cash, accounts receivable, accounts payable, and other current liabilities approximate their carrying amounts due to short maturities[38](index=38&type=chunk) - The 2021 Senior Notes and 2019 Senior Notes are measured in Level 2 of the fair value hierarchy, based on market values for similar instruments[40](index=40&type=chunk)[41](index=41&type=chunk) | Debt Instrument (in thousands) | June 30, 2025 Carrying Value | June 30, 2025 Fair Value | March 31, 2025 Carrying Value | March 31, 2025 Fair Value | | :----------------------------- | :----------------------------- | :----------------------- | :---------------------------- | :------------------------ | | 2019 Senior Notes | $400,000 | $397,500 | $400,000 | $392,000 | | 2021 Senior Notes | $600,000 | $553,500 | $600,000 | $537,750 | [Note 9. Stockholders' Equity](index=15&type=section&id=Note%209.%20Stockholders'%20Equity) This note provides details on the company's common stock, share repurchase programs, and equity changes - The company is authorized to issue **250.0 million** shares of common stock and **5.0 million** shares of preferred stock[43](index=43&type=chunk) - No dividends have been declared or paid on common stock through June 30, 2025[44](index=44&type=chunk) - The Board authorized a **$300.0 million** share repurchase program on May 6, 2024, with **$213.7 million** remaining as of June 30, 2025[45](index=45&type=chunk) | Share Repurchases | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :---------------- | :------------------------------- | :------------------------------- | | Employee restricted stock awards (shares) | 48,680 | 82,673 | | Employee restricted stock awards (amount) | $4.1 million | $5.8 million | | Share repurchase program (shares) | 410,446 | 401,111 | | Share repurchase program (amount) | $34.8 million | $26.0 million | [Note 10. Accumulated Other Comprehensive Loss](index=16&type=section&id=Note%2010.%20Accumulated%20Other%20Comprehensive%20Loss) This note details the components of the company's accumulated other comprehensive loss | Components of Accumulated Other Comprehensive Loss (in thousands) | June 30, 2025 | March 31, 2025 | | :-------------------------------------------------------------- | :------------ | :------------- | | Cumulative translation adjustment | $(32,899) | $(38,303) | | Unrecognized net gain on pension plans, net of tax | $644 | $644 | | **Accumulated other comprehensive loss, net of tax** | **$(32,255)** | **$(37,659)** | - No amounts were reclassified from accumulated other comprehensive loss into earnings during the periods presented[47](index=47&type=chunk) [Note 11. Earnings Per Share](index=16&type=section&id=Note%2011.%20Earnings%20Per%20Share) This note presents the calculation of basic and diluted earnings per share | EPS Metric (in thousands, except per share data) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :----------------------------------------------- | :------------------------------- | :------------------------------- | | Net income | $47,466 | $49,068 | | Denominator for basic EPS (weighted average shares) | 49,475 | 49,886 | | Basic earnings per share | $0.96 | $0.98 | | Diluted earnings per share | $0.95 | $0.98 | - Approximately **0.1 million** and **0.3 million** shares were excluded from diluted EPS calculation for the three months ended June 30, 2025 and 2024, respectively, due to their anti-dilutive effect[48](index=48&type=chunk) [Note 12. Stock-Based Compensation](index=16&type=section&id=Note%2012.%20Stock-Based%20Compensation) This note describes the company's stock-based compensation plans and related expenses - The company operates under the 2005 Long-Term Equity Incentive Plan and the 2020 Long-Term Incentive Plan, with **1.4 million** shares available for issuance under the 2020 Plan as of June 30, 2025[49](index=49&type=chunk)[50](index=50&type=chunk)[51](index=51&type=chunk) | Stock-Based Compensation (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :-------------------------------------- | :------------------------------- | :------------------------------- | | Pre-tax stock-based compensation costs | $3,682 | $3,425 | | Income tax benefit recognized | $465 | $438 | | Total fair value of options and RSUs vested | $9,036 | $11,150 | | Cash received from exercise of stock options | $3,155 | $1,975 | - Unrecognized compensation costs for unvested stock options were **$4.6 million** and for unvested RSUs/PSUs were **$18.0 million** as of June 30, 2025, both expected to be recognized over a weighted average period of **2.4 years**[52](index=52&type=chunk) | RSU Activity (in thousands) | Unvested at March 31, 2025 | Granted | Vested | Forfeited | Unvested at June 30, 2025 | | :-------------------------- | :------------------------- | :------ | :----- | :-------- | :------------------------ | | Shares | 402.2 | 114.9 | (109.2) | (21.2) | 386.7 | | Weighted Average Grant-Date Fair Value | $63.20 | $82.98 | $56.85 | $61.03 | $70.99 | | Option Activity (in thousands) | Outstanding at March 31, 2025 | Granted | Exercised | Forfeited | Outstanding at June 30, 2025 | | :----------------------------- | :---------------------------- | :------ | :-------- | :-------- | :--------------------------- | | Shares | 518.7 | 104.7 | (52.7) | (5.1) | 565.6 | | Weighted Average Exercise Price | $52.22 | $82.98 | $59.84 | $74.48 | $57.00 | [Note 13. Income Taxes](index=18&type=section&id=Note%2013.%20Income%20Taxes) This note details the company's income tax provision and effective tax rate - The effective tax rate increased to **23.2%** for the three months ended June 30, 2025, from **16.0%** in the prior year, primarily due to a discrete item in the prior year related to the release of a reserve for uncertain tax positions[56](index=56&type=chunk) - The global minimum tax proposed by the OECD is not expected to have a material impact on the company's Consolidated Financial Statements[55](index=55&type=chunk) [Note 14. Commitments and Contingencies](index=19&type=section&id=Note%2014.%20Commitments%20and%20Contingencies) This note outlines the company's legal commitments and potential contingent liabilities - The company is involved in routine legal matters and claims incidental to its business, with assessments re-evaluated each reporting period[57](index=57&type=chunk) - Management believes the resolution of these matters, considering reserves, will not be material to the financial condition or results of operations[57](index=57&type=chunk) [Note 15. Concentrations of Risk](index=19&type=section&id=Note%2015.%20Concentrations%20of%20Risk) This note identifies significant concentrations of risk related to customers, brands, and suppliers - Revenues are concentrated in OTC Healthcare, with approximately **40%** derived from the top five selling brands for the three months ended June 30, 2025 and 2024[58](index=58&type=chunk) | Customer | % of Gross Revenues (Q2 2025) | % of Gross Revenues (Q2 2024) | | :------- | :---------------------------- | :---------------------------- | | Walmart | 22% | 20% | | Amazon | 12% | 13% | - The company relies on a single primary distribution center in Clayton, Indiana, and a third-party manufacturer for approximately **23%** of gross revenues, posing supply chain and operational risks[59](index=59&type=chunk)[60](index=60&type=chunk) [Note 16. Business Segments](index=20&type=section&id=Note%2016.%20Business%20Segments) This note provides financial information for the company's reportable business segments - The company operates in two reportable segments: North American OTC Healthcare and International OTC Healthcare, with contribution margin as the primary performance measure[61](index=61&type=chunk) | Segment Performance (in thousands) | Q2 2025 Revenues | Q2 2025 Gross Profit | Q2 2025 Contribution Margin | Q2 2024 Revenues | Q2 2024 Gross Profit | Q2 2024 Contribution Margin | | :--------------------------------- | :--------------- | :------------------- | :-------------------------- | :--------------- | :------------------- | :-------------------------- | | North American OTC Healthcare | $212,578 | $120,400 | $91,446 | $232,316 | $126,757 | $93,004 | | International OTC Healthcare | $36,952 | $19,931 | $13,948 | $34,826 | $19,265 | $13,653 | | **Consolidated** | **$249,530** | **$140,331** | **$105,394** | **$267,142** | **$146,022** | **$106,657** | | Product Group Revenues (in thousands) | Q2 2025 Consolidated | Q2 2024 Consolidated | | :------------------------------------ | :------------------- | :------------------- | | Analgesics | $28,932 | $28,293 | | Cough & Cold | $19,007 | $20,697 | | Women's Health | $56,758 | $54,578 | | Gastrointestinal | $57,784 | $58,015 | | Eye & Ear Care | $32,308 | $48,130 | | Dermatologicals | $30,109 | $33,355 | | Oral Care | $21,702 | $20,774 | | Other OTC | $2,930 | $3,300 | | **Total segment revenues** | **$249,530** | **$267,142** | [Note 17. Subsequent Events](index=21&type=section&id=Note%2017.%20Subsequent%20Events) This note discloses significant events that occurred after the reporting period - The One Big Beautiful Bill Act (OBBBA) was enacted on July 4, 2025, making permanent key elements of the Tax Cuts and Jobs Act; the company is evaluating its impact on financial statements[67](index=67&type=chunk) - Independent directors received grants of **2,094 RSUs** on August 5, 2025, vesting one year after receipt[68](index=68&type=chunk) - The company entered into a definitive agreement to acquire Pillar5 Pharma Inc., a sterile ophthalmic manufacturer and current Clear Eyes supplier, for approximately **$100.0 million**, expected to close in Q3 fiscal 2026[69](index=69&type=chunk)[70](index=70&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=23&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial performance and condition for the three months ended June 30, 2025, compared to the prior year. It covers overall business strategy, the impact of the economic environment, detailed analysis of revenues, gross profit, contribution margin by segment, operating expenses, interest, income taxes, and a review of liquidity and capital resources [General](index=23&type=section&id=General) This section outlines the company's business model and strategic growth initiatives - Prestige Consumer Healthcare Inc. develops, manufactures, markets, sells, and distributes well-recognized, brand name, over-the-counter (OTC) health and personal care products in North America and international markets[73](index=73&type=chunk) - The company's growth strategy involves organic development through new product lines, brand extensions, and advertising, as well as acquisitions of non-core consumer health and personal care brands to reinvigorate their performance[74](index=74&type=chunk) [Economic Environment](index=23&type=section&id=Economic%20Environment) This section discusses the impact of current economic conditions on the company's operations and financial performance - Economic uncertainty, including fiscal policy, supply chain constraints, interest rates, inflation, and geopolitical events, continues to create volatility, impacting prices, supply, and demand for products[75](index=75&type=chunk) - The volatile environment has led to labor and raw material shortages, shipping delays, and increased input costs, particularly affecting eye care products, which negatively impacted results of operations[76](index=76&type=chunk) [Global Minimum Tax](index=23&type=section&id=Global%20Minimum%20Tax) This section addresses the potential implications of the OECD's global minimum tax on the company's financial statements - The global minimum tax rate of **15%** proposed by the OECD is not expected to have a material impact on the company's Consolidated Financial Statements, but potential tax increases are being monitored as legislation becomes effective in more countries[78](index=78&type=chunk) [Results of Operations](index=25&type=section&id=Results%20of%20Operations) This section analyzes the company's financial performance, including revenues, gross profit, and operating expenses [Total Segment Revenues](index=25&type=section&id=Total%20Segment%20Revenues) This section provides an overview of the company's total revenue performance across all segments - Total revenues for the three months ended June 30, 2025, decreased by **$17.6 million**, or **6.6%**, to **$249.5 million** compared to the same period in 2024[80](index=80&type=chunk) [North American OTC Healthcare Segment (Revenue)](index=25&type=section&id=North%20American%20OTC%20Healthcare%20Segment%20(Revenue)) This section details revenue performance for the North American OTC Healthcare segment - North American OTC Healthcare segment revenues decreased by **$19.7 million**, or **8.5%**, primarily due to reduced sales in Eye & Ear Care (down **35.9%** due to supply limitations for Clear Eyes) and Dermatologicals (down **11.9%**)[81](index=81&type=chunk)[80](index=80&type=chunk) [International OTC Healthcare Segment (Revenue)](index=25&type=section&id=International%20OTC%20Healthcare%20Segment%20(Revenue)) This section details revenue performance for the International OTC Healthcare segment - International OTC Healthcare segment revenues increased by **$2.1 million**, or **6.1%**, driven by higher sales in Women's Health (up **25.2%**) and Dermatologicals (up **28.8%**)[82](index=82&type=chunk)[80](index=80&type=chunk) [Gross Profit](index=26&type=section&id=Gross%20Profit) This section analyzes the company's consolidated gross profit and margin changes - Consolidated gross profit decreased by **$5.7 million**, or **3.9%**, but increased as a percentage of total revenues to **56.2%** (from **54.7%** in Q2 2024) due to favorable product mix and lower air freight costs[84](index=84&type=chunk) [North American OTC Healthcare Segment (Gross Profit)](index=26&type=section&id=North%20American%20OTC%20Healthcare%20Segment%20(Gross%20Profit)) This section details gross profit performance for the North American OTC Healthcare segment - North American OTC Healthcare gross profit decreased by **$6.4 million**, or **5.0%**, but its gross profit margin increased to **56.6%** (from **54.6%** in Q2 2024) primarily due to lower air freight expenses[85](index=85&type=chunk) [International OTC Healthcare Segment (Gross Profit)](index=26&type=section&id=International%20OTC%20Healthcare%20Segment%20(Gross%20Profit)) This section details gross profit performance for the International OTC Healthcare segment - International OTC Healthcare gross profit increased by **$0.7 million**, or **3.5%**, but its gross profit margin decreased to **53.9%** (from **55.3%** in Q2 2024) mainly due to increased inflation costs[86](index=86&type=chunk) [Contribution Margin](index=26&type=section&id=Contribution%20Margin) This section analyzes the company's consolidated contribution margin and its percentage of total revenues - Consolidated contribution margin decreased by **$1.3 million**, or **1.2%**, but increased as a percentage of total revenues to **42.2%** (from **39.9%** in Q2 2024)[88](index=88&type=chunk) [North American OTC Healthcare Segment (Contribution Margin)](index=26&type=section&id=North%20American%20OTC%20Healthcare%20Segment%20(Contribution%20Margin)) This section details contribution margin performance for the North American OTC Healthcare segment - North American OTC Healthcare contribution margin decreased by **$1.6 million**, or **1.7%**, but its margin percentage increased to **43.0%** (from **40.0%** in Q2 2024) due to higher gross profit margin and decreased advertising and marketing spend[89](index=89&type=chunk) [International OTC Healthcare Segment (Contribution Margin)](index=26&type=section&id=International%20OTC%20Healthcare%20Segment%20(Contribution%20Margin)) This section details contribution margin performance for the International OTC Healthcare segment - International OTC Healthcare contribution margin increased by **$0.3 million**, or **2.2%**, but its margin percentage decreased to **37.7%** (from **39.2%** in Q2 2024) due to a decrease in gross profit margin[90](index=90&type=chunk) [General and Administrative](index=27&type=section&id=General%20and%20Administrative) This section analyzes changes in general and administrative expenses - General and administrative expenses decreased by **$0.4 million** to **$28.5 million**, driven by lower legal expenses partially offset by increased compensation costs[91](index=91&type=chunk) [Depreciation and Amortization](index=27&type=section&id=Depreciation%20and%20Amortization) This section details the company's depreciation and amortization expenses - Depreciation and amortization expenses decreased to **$5.2 million** (from **$5.7 million** in Q2 2024) due to impairment charges on finite-lived brands and certain intangible assets becoming fully amortized in fiscal 2025[92](index=92&type=chunk) [Interest Expense, Net](index=27&type=section&id=Interest%20Expense%2C%20Net) This section analyzes the company's net interest expense and its drivers - Net interest expense decreased to **$10.2 million** (from **$13.1 million** in Q2 2024), reflecting a decrease in average indebtedness to **$1.0 billion** (from **$1.1 billion**) and a lower average cost of borrowing of **4.5%** (from **4.8%**)[93](index=93&type=chunk) [Income Taxes](index=27&type=section&id=Income%20Taxes) This section details the company's income tax provision and effective tax rate - The provision for income taxes increased to **$14.3 million** (from **$9.3 million** in Q2 2024), with the effective tax rate rising to **23.2%** (from **16.0%**) primarily due to a prior-year discrete item related to the release of a reserve for uncertain tax positions[94](index=94&type=chunk) [Liquidity and Capital Resources](index=27&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's cash flow, debt, and ability to meet financial obligations - The company's primary cash source is operations, supplemented by debt facilities for acquisitions, and expects to finance operations with cash flow and existing credit facilities for the foreseeable future[95](index=95&type=chunk) - Cash and cash equivalents increased by **$41.6 million** to **$139.5 million** as of June 30, 2025, from **$97.9 million** at March 31, 2025[96](index=96&type=chunk) [Operating Activities](index=27&type=section&id=Operating%20Activities) This section details cash flows generated from the company's primary business operations - Net cash provided by operating activities increased by **$24.2 million** to **$79.0 million**, driven by timing of working capital and increased net income before non-cash items[97](index=97&type=chunk) [Investing Activities](index=27&type=section&id=Investing%20Activities) This section details cash flows related to the company's investment activities - Net cash used in investing activities slightly decreased to **$1.9 million** (from **$2.1 million** in Q2 2024)[98](index=98&type=chunk) [Financing Activities](index=28&type=section&id=Financing%20Activities) This section details cash flows related to the company's debt and equity financing activities - Net cash used in financing activities decreased by **$29.2 million** to **$36.3 million**, primarily due to a **$35.0 million** decrease in debt repayments, partially offset by an **$8.8 million** increase in common stock repurchases[100](index=100&type=chunk) [Capital Resources](index=28&type=section&id=Capital%20Resources) This section outlines the company's available capital, including debt facilities - As of June 30, 2025, total outstanding indebtedness was **$1.0 billion**, consisting of **$400.0 million** in 2019 Senior Notes (5.125%, due 2028) and **$600.0 million** in 2021 Senior Notes (3.750%, due 2031)[101](index=101&type=chunk)[106](index=106&type=chunk) - The company had a borrowing capacity of **$173.2 million** on its 2012 ABL Revolver with no outstanding balance as of June 30, 2025[101](index=101&type=chunk) [Covenants](index=28&type=section&id=Covenants) This section confirms the company's compliance with debt covenants - The company was in compliance with all applicable financial and restrictive covenants under its debt facilities as of June 30, 2025, including maintaining a fixed charge ratio greater than **1.0 to 1.0**[103](index=103&type=chunk) [Critical Accounting Policies and Estimates](index=28&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section addresses the company's key accounting policies and significant management estimates - There were no material changes to the company's critical accounting policies during the three months ended June 30, 2025[104](index=104&type=chunk) [Recent Accounting Pronouncements](index=28&type=section&id=Recent%20Accounting%20Pronouncements) This section discusses the impact of newly issued accounting standards on the company - A description of recently issued accounting pronouncements is included in Note 1 to the unaudited Condensed Consolidated Financial Statements[107](index=107&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=32&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section details the company's exposure to market risks, specifically interest rate risk and foreign currency exchange rate risk, and provides a sensitivity analysis for the latter [Interest Rate Risk](index=32&type=section&id=Interest%20Rate%20Risk) This section assesses the company's exposure to fluctuations in interest rates - As of June 30, 2025, none of the company's debt carried a variable rate of interest, as the 2012 ABL Revolver had a zero balance[113](index=113&type=chunk) [Foreign Currency Exchange Rate Risk](index=32&type=section&id=Foreign%20Currency%20Exchange%20Rate%20Risk) This section assesses the company's exposure to fluctuations in foreign currency exchange rates - Approximately **14.5%** of gross revenues for the three months ended June 30, 2025, were denominated in non-U.S. Dollar currencies, primarily Canadian and Australian Dollars[114](index=114&type=chunk) - A hypothetical **10.0%** adverse change in foreign currency exchange rates would result in a less than **5.0%** impact on pre-tax income, approximately **$0.8 million**, for the three months ended June 30, 2025[115](index=115&type=chunk) [Item 4. Controls and Procedures](index=32&type=section&id=Item%204.%20Controls%20and%20Procedures) This section confirms the effectiveness of the company's disclosure controls and procedures and reports no material changes in internal control over financial reporting during the quarter [Disclosure Controls and Procedures](index=32&type=section&id=Disclosure%20Controls%20and%20Procedures) This section confirms the effectiveness of the company's disclosure controls and procedures - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of June 30, 2025[116](index=116&type=chunk) [Changes in Internal Control over Financial Reporting](index=32&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) This section reports on any material changes in the company's internal control over financial reporting - There were no material changes in internal control over financial reporting during the quarter ended June 30, 2025[117](index=117&type=chunk) PART II. OTHER INFORMATION This section covers risk factors, equity sales, stockholder meeting results, and exhibits for the reporting period [Item 1A. Risk Factors](index=32&type=section&id=Item%201A.%20Risk%20Factors) This section refers readers to the risk factors discussed in the company's Annual Report on Form 10-K, noting no material changes in the period covered by this quarterly report, but emphasizing potential quarterly fluctuations and the impact of unforeseen risks - No material changes to the risk factors discussed in the Annual Report on Form 10-K for the fiscal year ended March 31, 2025, were identified in this quarterly report[118](index=118&type=chunk) - Quarterly operating results and revenues may fluctuate, and future results may fall below expectations, potentially impacting the market price of securities[119](index=119&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=33&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the company's share repurchase activities during the quarter, including repurchases under its publicly announced program and those related to employee restricted stock awards | Period | Total Number of Shares Purchased | Average Price Paid per Share | Shares Purchased as Part of Publicly Announced Plans or Programs | Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs | | :---------------------- | :------------------------------- | :--------------------------- | :--------------------------------------------------------------- | :--------------------------------------------------------------------------------------- | | April 1 to April 30, 2025 | 89,875 | $81.19 | 89,875 | $241,194 | | May 1 to May 31, 2025 | 246,844 | $85.44 | 198,220 | $224,152 | | June 1 to June 30, 2025 | 122,407 | $85.30 | 122,351 | $213,716 | | **Total** | **459,126** | | **410,446** | | - Of the total shares repurchased, **410,446 shares** were under the **$300.0 million** share repurchase program, and **48,680 shares** were for tax withholding related to employee restricted stock awards[120](index=120&type=chunk) [Item 5. Other Information](index=33&type=section&id=Item%205.%20Other%20Information) This section reports the results of the 2025 Annual Meeting of Stockholders, including the election of directors, approval of executive compensation, and ratification of the independent registered public accounting firm - At the 2025 Annual Meeting of Stockholders on August 5, 2025, seven directors were elected, executive compensation was approved in a non-binding resolution, and PricewaterhouseCoopers LLP was ratified as the independent registered public accounting firm[121](index=121&type=chunk)[122](index=122&type=chunk)[123](index=123&type=chunk) [Item 6. Exhibits](index=34&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed as part of the Form 10-Q, including corporate governance documents, certifications, and XBRL-related files - Exhibits include amendments to the Certificate of Incorporation and Bylaws, certifications from the Principal Executive and Financial Officers (31.1, 31.2, 32.1, 32.2), and Inline XBRL documents (101.INS, 101.SCH, 101.CAL, 101.DEF, 101.LAB, 101.PRE, 104)[125](index=125&type=chunk) [CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS](index=30&type=section&id=CAUTIONARY%20STATEMENT%20REGARDING%20FORWARD-LOOKING%20STATEMENTS) This statement highlights risks and uncertainties that could cause actual results to differ materially from forward-looking projections - This section contains forward-looking statements subject to risks and uncertainties that could cause actual results to differ materially, and the company does not intend to update them[108](index=108&type=chunk)[109](index=109&type=chunk) - Key risks include disruptions in supply, dependence on third-party manufacturers, rising input costs, regulatory actions, competition, limited success of new products, customer dependence, acquisition challenges, and general economic conditions[110](index=110&type=chunk) - Additional risks cover financial factors (interest rates, currency), distribution disruptions, changes in trade laws, product liability, intellectual property, IT system threats, dependence on key personnel, litigation costs, indebtedness, and tax law changes[110](index=110&type=chunk)[112](index=112&type=chunk) [SIGNATURES](index=35&type=section&id=SIGNATURES) This section formally attests to the accuracy and completeness of the report by the company's authorized financial officer - The report was signed on August 7, 2025, by Christine Sacco, Chief Financial Officer & Chief Operating Officer, on behalf of Prestige Consumer Healthcare Inc[127](index=127&type=chunk)[128](index=128&type=chunk)[129](index=129&type=chunk)

[Fiscal 2026 First Quarter Financial Highlights](index=1&type=section&id=Fiscal%202026%20First%20Quarter%20Financial%20Highlights) [Executive Summary](index=1&type=section&id=1.1%20Executive%20Summary) Prestige Consumer Healthcare Inc. reported mixed Q1 FY26 results, with international growth and improved gross margin offset by Clear Eyes supply constraints, leading to a revenue decline and a revised full-year outlook - The company experienced momentum in **international segment growth**, year-over-year improvement in **gross margin**, and solid quarterly **free cash flow**[2](index=2&type=chunk) - Positives were offset by **Clear Eyes supply constraints**, resulting in **lower-than-expected shipments**[2](index=2&type=chunk)[3](index=3&type=chunk) - The company announced an agreement to **acquire Pillar5 Pharma**, a current eye care supplier, to **improve eye care supply** in the second half of fiscal 2026[2](index=2&type=chunk)[7](index=7&type=chunk) - Fiscal 2026 **revenue outlook was revised to $1,100 to $1,115 million**, and **Diluted EPS outlook to $4.50 to $4.58**[7](index=7&type=chunk) [Key Financial Results (Q1 FY26 vs Q1 FY25)](index=1&type=section&id=1.2%20Key%20Financial%20Results%20(Q1%20FY26%20vs%20Q1%20FY25)) Q1 FY26 reported revenues decreased by **6.6% to $249.5 million** due to Clear Eyes supply issues, while net income slightly declined and diluted EPS increased by **5.6%** (based on adjusted EPS from table) | Metric | Q1 FY26 (Millions) | Q1 FY25 (Millions) | Change (%) | | :------------------- | :----------------- | :----------------- | :--------- | | Reported Revenues | $249.5 | $267.1 | -6.6% | | Net Income | $47.5 | $49.1 | -3.3% | | Diluted EPS | $0.95 | $0.98 | -3.1% | | Adjusted Diluted EPS | $0.95 | $0.90 | +5.6% | - The **revenue decline** was driven by **limited ability to supply demand for Clear Eyes** and an expected headwind from accelerated order timing in Q4 of the prior year[3](index=3&type=chunk) [Free Cash Flow and Balance Sheet](index=1&type=section&id=1.3%20Free%20Cash%20Flow%20and%20Balance%20Sheet) Q1 FY26 saw strong cash generation with a **44.2% increase** in operating cash flow and **45.9% increase** in non-GAAP free cash flow, maintaining stable net debt and a **2.4x** leverage ratio | Metric | Q1 FY26 (Millions) | Q1 FY25 (Millions) | Change (YoY) | | :-------------------------------------- | :----------------- | :----------------- | :----------- | | Net cash provided by operating activities | $79.0 | $54.8 | +44.2% | | Non-GAAP Free Cash Flow | $78.2 | $53.6 | +45.9% | - The **material increase in free cash flow** was attributable to the **timing of working capital** and **lower interest expense**[6](index=6&type=chunk) | Metric | As of June 30, 2025 (Millions) | | :---------------------- | :----------------------------- | | Net Debt | ~$0.9 | | Covenant-defined Leverage Ratio | 2.4x | [Segment Performance Review](index=2&type=section&id=Segment%20Performance%20Review) [North American OTC Healthcare](index=2&type=section&id=2.1%20North%20American%20OTC%20Healthcare) North American OTC Healthcare segment revenue decreased by **8.5%** in Q1 FY26, primarily due to limited Clear Eyes supply and accelerated orders in the prior year | Metric | Q1 FY26 (Millions) | Q1 FY25 (Millions) | Change (%) | | :--------------- | :----------------- | :----------------- | :--------- | | Segment Revenues | $212.6 | $232.3 | -8.5% | - The **revenue decrease** was primarily attributable to **lower Eye & Ear Care category sales**, driven by **limited ability to supply demand for Clear Eyes** and the expected headwind associated with accelerated order timing in Q4 of the prior year[9](index=9&type=chunk) [International OTC Healthcare](index=2&type=section&id=2.2%20International%20OTC%20Healthcare) International OTC Healthcare segment revenues grew strongly by **6.1%** in Q1 FY26, driven by broad-based growth across various geographies | Metric | Q1 FY26 (Millions) | Q1 FY25 (Millions) | Change (%) | | :--------------- | :----------------- | :----------------- | :--------- | | Segment Revenues | $37.0 | $34.8 | +6.1% | - The revenue performance was driven by **broad-based growth across geographies**[10](index=10&type=chunk) [Strategic Initiatives and Outlook](index=2&type=section&id=Strategic%20Initiatives%20and%20Outlook) [Acquisition of Pillar5 Pharma](index=2&type=section&id=3.1%20Acquisition%20of%20Pillar5%20Pharma) Prestige Consumer Healthcare Inc. will acquire Pillar5 Pharma, a key Clear Eyes supplier, to expand eye care production capacity and secure supply, with the transaction expected to be EPS-neutral and close in Q3 FY26 - The Company has entered into a definitive agreement to **acquire Pillar5 Pharma Inc.**, a **leading sterile ophthalmic manufacturer** and **current Clear Eyes supplier**[11](index=11&type=chunk) - The acquisition is part of a long-term strategy to **expand eye care production capacity**, **secure near-term supply**, and **build long-term supply chain capacity for Clear Eyes**[11](index=11&type=chunk)[13](index=13&type=chunk) - The transaction is expected to be **approximately neutral to EPS** and is anticipated to **close in the third quarter of fiscal 2026**[11](index=11&type=chunk) [Updated Fiscal 2026 Outlook](index=2&type=section&id=3.2%20Updated%20Fiscal%202026%20Outlook) The company revised its FY26 outlook, lowering revenue and diluted EPS due to eye care supply shortfalls, but maintained its free cash flow forecast of **$245 million or more** - The revised outlook primarily reflects **supply chain shortfalls in eye care** expected to persist in the first half of fiscal 2026[14](index=14&type=chunk) | Metric | Initial Fiscal 2026 Outlook | Current Fiscal 2026 Outlook | | :-------------------- | :-------------------------- | :-------------------------- | | Revenue | $1,140 to $1,155 million | $1,100 to $1,115 million | | Organic Revenue Growth | Approximately 1% to 2% | Approximate 1.5% to 3.0% decrease | | Diluted E.P.S. | $4.70 to $4.82 | $4.50 to $4.58 | | Free Cash Flow | $245 million or more | $245 million or more | - The company still anticipates **year-over-year growth** from an **acceleration of supply in eye care in the second half**, thanks to its multi-year strategy to enhance long-term capacity[14](index=14&type=chunk) [Company Information](index=3&type=section&id=Company%20Information) [About Prestige Consumer Healthcare Inc.](index=4&type=section&id=4.1%20About%20Prestige%20Consumer%20Healthcare%20Inc.) Prestige Consumer Healthcare is a leading consumer healthcare products company with a diverse brand portfolio sold across the U.S., Canada, Australia, and other international markets - Prestige Consumer Healthcare is a **leading consumer healthcare products company** with **sales throughout the U.S. and Canada, Australia, and in certain other international markets**[22](index=22&type=chunk) - The company's **diverse portfolio** includes brands such as **Monistat®, Summer's Eve®, BC®, Goody's®, Clear Eyes®, TheraTears®, DenTek®, Dramamine®, Fleet®, Chloraseptic®, Luden's®, Compound W®, Little Remedies®, Boudreaux's Butt Paste®, Nix®, Debrox®, Gaviscon®, Hydralyte®, and Fess®**[22](index=22&type=chunk) [Conference Call Details](index=3&type=section&id=4.2%20Conference%20Call%20Details) A conference call was held on August 7, 2025, to discuss Q1 FY26 results, with access via live webcast, slide presentation, and archived replay on the Investor Relations page - A conference call to review Q1 FY26 results was held on **August 7, 2025, at 8:30 a.m. ET**[17](index=17&type=chunk) - Access to the **live internet webcast**, accompanying **slide presentation**, and an **archived replay** is available on the **Investor Relations page** of the Company's website[17](index=17&type=chunk)[18](index=18&type=chunk) [Forward-Looking Statements](index=3&type=section&id=4.3%20Forward-Looking%20Statements) This news release contains forward-looking statements based on management's estimates, subject to inherent uncertainties and risks that could cause actual results to differ materially - The news release contains **forward-looking statements** regarding **future operating results**, including **revenues, organic growth, diluted EPS, and free cash flow**, as well as the impact of the **Pillar5 acquisition** and the company's ability to **enhance shareholder value**[20](index=20&type=chunk) - These statements are based on **management's estimates and assumptions** and are **inherently uncertain and difficult to predict**[20](index=20&type=chunk) - Actual results could **differ materially** due to factors such as **business and economic conditions, consumer trends, competitive pressures, the ability to meet Pillar5 closing conditions, and supply chain capabilities**[20](index=20&type=chunk)[21](index=21&type=chunk) [Financial Statements (Unaudited)](index=5&type=section&id=Financial%20Statements%20(Unaudited)) [Condensed Consolidated Statements of Income and Comprehensive Income](index=5&type=section&id=5.1%20Condensed%20Consolidated%20Statements%20of%20Income%20and%20Comprehensive%20Income) | (In thousands, except per share data) | 2025 | 2024 | | :------------------------------------ | :---------- | :---------- | | Total Revenues | $249,530 | $267,142 | | Cost of sales | 109,199 | 121,120 | | Gross profit | 140,331 | 146,022 | | Total operating expenses | 68,575 | 73,976 | | Operating income | 71,756 | 72,046 | | Total other expense, net | 9,979 | 13,633 | | Income before income taxes | 61,777 | 58,413 | | Provision for income taxes | 14,311 | 9,345 | | Net income | $47,466 | $49,068 | | Diluted EPS | $0.95 | $0.98 | | Comprehensive income | $52,870 | $52,228 | [Condensed Consolidated Balance Sheets](index=6&type=section&id=5.2%20Condensed%20Consolidated%20Balance%20Sheets) | (In thousands) | June 30, 2025 | March 31, 2025 | | :------------------------------------ | :------------ | :------------- | | Cash and cash equivalents | $139,502 | $97,884 | | Total current assets | 480,518 | 448,328 | | Property, plant and equipment, net | 73,786 | 74,548 | | Goodwill | 528,314 | 527,425 | | Intangible assets, net | 2,294,829 | 2,295,350 | | Total Assets | $3,431,625 | $3,402,218 | | Total current liabilities | 109,668 | 106,623 | | Long-term debt, net | 992,749 | 992,357 | | Total Liabilities | 1,576,143 | 1,567,321 | | Total Stockholders' Equity | 1,855,482 | 1,834,897 | | Total Liabilities and Stockholders' Equity | $3,431,625 | $3,402,218 | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=5.3%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) | (In thousands) | 2025 | 2024 | | :---------------------------------------- | :---------- | :---------- | | Net cash provided by operating activities | $79,013 | $54,776 | | Net cash used in investing activities | (1,938) | (2,130) | | Net cash used in financing activities | (36,282) | (65,522) | | Increase in cash and cash equivalents | 41,618 | (12,213) | | Cash and cash equivalents - end of period | $139,502 | $34,256 | [Condensed Consolidated Statements of Income - Business Segments](index=8&type=section&id=5.4%20Condensed%20Consolidated%20Statements%20of%20Income%20-%20Business%20Segments) | (In thousands) | North American OTC Healthcare (2025) | International OTC Healthcare (2025) | Consolidated (2025) | | :-------------------- | :----------------------------------- | :---------------------------------- | :------------------ | | Total segment revenues | $212,578 | $36,952 | $249,530 | | Cost of sales | 92,178 | 17,021 | 109,199 | | Gross profit | 120,400 | 19,931 | 140,331 | | Advertising and marketing | 28,954 | 5,983 | 34,937 | | Contribution margin | $91,446 | $13,948 | $105,394 | | (In thousands) | North American OTC Healthcare (2024) | International OTC Healthcare (2024) | Consolidated (2024) | | :-------------------- | :----------------------------------- | :---------------------------------- | :------------------ | | Total segment revenues | $232,316 | $34,826 | $267,142 | | Cost of sales | 105,559 | 15,561 | 121,120 | | Gross profit | 126,757 | 19,265 | 146,022 | | Advertising and marketing | 33,753 | 5,612 | 39,365 | | Contribution margin | $93,004 | $13,653 | $106,657 | [Non-GAAP Financial Measures](index=9&type=section&id=Non-GAAP%20Financial%20Measures) [About Non-GAAP Financial Measures](index=9&type=section&id=6.1%20About%20Non-GAAP%20Financial%20Measures) The company provides Non-GAAP financial measures (NGFMs) for greater transparency and performance understanding, used internally but not as alternatives to GAAP measures - NGFMs are provided to **aid investors** in understanding the Company's performance and offer **greater transparency**[32](index=32&type=chunk) - NGFMs are used internally for **evaluating operating performance**, making **financial and operational decisions**, and **assessing shareholder value**[32](index=32&type=chunk) - NGFMs are **not in accordance with GAAP**, should **not be considered a measure of profitability or liquidity**, and may **not be directly comparable** to similarly titled NGFMs reported by other companies[33](index=33&type=chunk) [Reconciliation of Non-GAAP Measures](index=10&type=section&id=6.2%20Reconciliation%20of%20Non-GAAP%20Measures) Reconciliation of GAAP Total Revenues to Non-GAAP Organic Revenues | (In thousands) | 2025 | 2024 | | :-------------------------- | :---------- | :---------- | | GAAP Total Revenues | $249,530 | $267,142 | | Revenue Change | (6.6)% | | | Impact of foreign currency exchange rates | — | (670) | | Non-GAAP Organic Revenues | $249,530 | $266,472 | | Non-GAAP Organic Revenue Change | (6.4)% | | Reconciliation of GAAP Net Income to Non-GAAP EBITDA | (In thousands) | 2025 | 2024 | | :-------------------------- | :---------- | :---------- | | GAAP Net Income | $47,466 | $49,068 | | Interest expense, net | 10,203 | 13,137 | | Provision for income taxes | 14,311 | 9,345 | | Depreciation and amortization | 7,666 | 8,124 | | Non-GAAP EBITDA | $79,646 | $79,674 | | Non-GAAP EBITDA Margin | 31.9 % | 29.8 % | Reconciliation of GAAP Net Income and Diluted EPS to Non-GAAP Adjusted Net Income and Diluted EPS | (In thousands, except per share data) | 2025 Net Income | 2025 Diluted EPS | 2024 Net Income | 2024 Diluted EPS | | :------------------------------------ | :-------------- | :--------------- | :-------------- | :--------------- | | GAAP Net Income and Diluted EPS | $47,466 | $0.95 | $49,068 | $0.98 | | Normalized tax rate adjustment | — | — | (4,030) | (0.08) | | Non-GAAP Adjusted Net Income and Adjusted Diluted EPS | $47,466 | $0.95 | $45,038 | $0.90 | Reconciliation of GAAP Net Income to Non-GAAP Free Cash Flow | (In thousands) | 2025 | 2024 | | :---------------------------------------- | :---------- | :---------- | | GAAP Net cash provided by operating activities | $79,013 | $54,776 | | Purchases of property and equipment | (838) | (1,152) | | Non-GAAP Free Cash Flow | $78,175 | $53,624 | Outlook for Fiscal Year 2026: Reconciliation of Projected GAAP Net cash provided by operating activities to Projected Non-GAAP Free Cash Flow | (In millions) | Amount | | :------------------------------------------------ | :----- | | Projected FY'26 GAAP Net cash provided by operating activities | $255 | | Additions to property and equipment for cash | (10) | | Projected FY'26 Non-GAAP Free Cash Flow | $245 |

Core Insights - Prestige Consumer Healthcare Inc. reported a revenue of $249.5 million for the first quarter of fiscal 2026, a decrease of 6.6% from $267.1 million in the same period last year, primarily due to supply constraints in the Clear Eyes product line [3][10] - The company announced an acquisition of Pillar5 Pharma to enhance its eye care production capacity, which is expected to be neutral to earnings per share (EPS) and close in the third quarter of fiscal 2026 [10][11] - The updated fiscal 2026 revenue outlook is revised to $1,100 to $1,115 million, with diluted EPS expected to be between $4.50 and $4.58 [14][16] Financial Performance - Reported net income for the first quarter of fiscal 2026 was $47.5 million, down from $49.1 million in the prior year, with diluted EPS of $0.95 compared to $0.98 in the same period last year [4][10] - Free cash flow for the first quarter increased to $78.2 million from $53.6 million in the prior year, attributed to improved working capital timing and lower interest expenses [6][10] - The company's net cash provided by operating activities was $79.0 million, compared to $54.8 million in the prior year [6][10] Segment Performance - North American OTC Healthcare segment revenues decreased to $212.6 million from $232.3 million year-over-year, primarily due to lower sales in the Eye & Ear Care category [8][29] - International OTC Healthcare segment revenues increased by 6.1% to $37.0 million, driven by broad-based growth across various geographies [9][29] Strategic Initiatives - The acquisition of Pillar5 Pharma is part of a long-term strategy to secure supply and enhance production capacity for eye care products, addressing current supply chain challenges [10][13] - The company aims to leverage its diverse portfolio and strong financial profile to drive long-term shareholder value [2][14]

Core Viewpoint - Prestige Consumer Healthcare Inc. is set to release its fiscal 2026 first quarter earnings on August 7, 2025, before market opening, followed by a conference call at 8:30 a.m. ET to discuss the results [1]. Group 1 - The earnings release will be available on the company's Investor Relations page [2]. - Participants can join the conference call via phone by registering to receive dial-in details and a unique pin, with a recommendation to join 10 minutes early [2]. - A replay of the conference call will be accessible for approximately one week after the live event on the Investor Relations page [3]. Group 2 - Prestige Consumer Healthcare Inc. markets, sells, manufactures, and distributes a variety of consumer healthcare products across the U.S., Canada, Australia, and other international markets [4]. - The company's product portfolio includes brands such as Monistat, Summer's Eve, BC, Goody's, Clear Eyes, TheraTears®, DenTek, Dramamine, Fleet, Chloraseptic, Luden's, Compound W, Little Remedies, Boudreaux's Butt Paste, Nix, Debrox, Gaviscon, and Hydralyte [4].