Part I Business Prestige Consumer Healthcare Inc. develops and distributes OTC health and personal care products globally, primarily through North American and International segments - The company operates in two reportable segments: North American OTC Healthcare and International OTC Healthcare20 Net Revenues by Segment (Fiscal Years 2023-2025) | Segment | 2025 | 2024 | 2023 | | :--- | :--- | :--- | :--- | | North American OTC Healthcare | 84.4% | 85.2% | 86.3% | | International OTC Healthcare | 15.6% | 14.8% | 13.7% | | Total | 100.0% | 100.0% | 100.0% | - Major brands accounted for approximately 83.0% of total revenues in fiscal 2025, with 1 market position brands contributing 61.5% of total revenues, up from 58.6% in 20242529 - The company's growth strategy includes pursuing strategic acquisitions, developing new products, investing in marketing, and growing its international business, which accounted for 15.6% of total revenues in FY2025323536 - Walmart and Amazon are major customers, accounting for approximately 19% and 14% of gross revenues in FY2025, respectively44 - The company primarily outsources manufacturing to 98 third-party manufacturers, with one key supplier producing about 21% of gross revenues in FY2025, and its own facility producing about 15%4749 - As of March 31, 2025, the company had approximately 600 global employees, with 82% in the United States79 Risk Factors The company faces significant risks from third-party manufacturing dependence, intense competition, customer concentration, regulatory changes, cybersecurity threats, and substantial financial leverage - Third-Party Manufacturer Dependence: The company relies on a limited number of third-party manufacturers, with one supplier accounting for 21% of gross revenues in FY2025, leading to product shortages, particularly for eye care products888992 - Competition: The OTC market is highly competitive, facing pressure from larger competitors with greater resources and lower-priced store brand products98102 - Customer Concentration: A large portion of revenue comes from a few customers, notably Walmart (19%) and Amazon (14%) in FY2025, posing a material risk if these relationships change103 - Acquisition & Product Development Risks: Failure to successfully identify, integrate, or finance acquisitions could hinder growth and lead to asset impairments due to unrealized synergies116117121 - Regulatory & International Risks: Operations are subject to extensive regulation by agencies like the FDA and FTC, with non-compliance potentially leading to penalties, recalls, or manufacturing suspensions, and increased FDA inspection activity exacerbating supply chain issues125126128 - Intellectual Property & Cybersecurity Risks: The business depends on protecting its trademarks and patents, and a majority of assets consist of goodwill and intangible assets, which are subject to impairment risk132137 - The company relies on IT systems and faces risks from cyber-attacks, data breaches, and the evolving use of AI, for which an internal AI policy is in place138144145 - Financing Risks: As of March 31, 2025, total indebtedness was approximately $1.0 billion, requiring a substantial portion of cash flow for service and subject to restrictive covenants limiting operational flexibility147148150 Unresolved Staff Comments The company reports that it has no unresolved staff comments from the Securities and Exchange Commission - None167 Cybersecurity The company implements a cybersecurity risk management program based on the NIST framework, overseen by leadership and the Audit Committee, with no material incidents identified - The cybersecurity program is designed based on the NIST Cybersecurity Framework and includes an Incident Response Plan (IRP)168170 - Governance involves the VP of IT/CISO and CFO & COO managing risks, with the Audit Committee providing oversight and reviewing the IT security program at least annually169174175 - Risk management activities include annual internal vulnerability scans, external penetration tests, regular employee training, and a third-party risk management process171 - The company has not identified any cybersecurity threats or incidents that have materially affected or are reasonably likely to materially affect its business, operations, or financial condition172 Properties The company's principal properties include a leased corporate headquarters, a primary U.S. warehouse, and two owned manufacturing facilities in Virginia and Australia - The company leases its corporate headquarters in Tarrytown, New York, with the lease expiring on December 31, 2027177 - It owns an office and manufacturing facility in Lynchburg, Virginia, and another manufacturing facility in Victoria, Australia178 - A primary warehouse in Clayton, Indiana, is leased on the company's behalf by logistics provider GEODIS, with the lease expiring on February 28, 2030177 Legal Proceedings The company is involved in routine legal matters, with management expecting no material adverse effect on its business or financial condition - The company is involved in routine legal matters from time to time, but does not expect their resolution to have a material adverse effect on the business180 Mine Safety Disclosures This item is not applicable to the company - None181 Part II Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The company's common stock trades on NYSE under 'PBH', with no expected dividends, and it repurchased $11.7 million in shares, outperforming peer indexes over five years - The company's common stock is listed on the NYSE under the symbol 'PBH'183 - The company does not expect to pay cash dividends on its common stock in the foreseeable future184 Issuer Purchases of Equity Securities (Quarter Ended March 31, 2025) | Period | Total Number of Shares Purchased | Average Price Paid per Share | Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plan ($) | | :--- | :--- | :--- | :--- | | Jan 1 - Jan 31, 2025 | 38,216 | $74.43 | 256,959 | | Feb 1 - Feb 28, 2025 | 33,783 | $85.40 | 254,074 | | Mar 1 - Mar 31, 2025 | 65,725 | $84.94 | 248,491 | | Total | 137,724 | | | Stock Performance Comparison (Value of $100 Invested on March 31, 2020) | Company/Index | March 31, 2020 | March 31, 2025 | | :--- | :--- | :--- | | Prestige Consumer Healthcare Inc. | $100.00 | $234.29 | | Russell 2000 Index | $100.00 | $186.46 | | S&P SmallCap 600 Index | $100.00 | $201.95 | | New Peer Group Index | $100.00 | $164.93 | (Reserved) This item is reserved and contains no information Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses financial performance, noting a 1.1% revenue increase to $1.138 billion, improved gross margin, $12.5 million impairment, and strong operating cash flow used for debt reduction Critical Accounting Estimates Critical accounting estimates include revenue recognition, goodwill and intangible asset valuation (resulting in $12.5 million impairment in FY2025), and stock-based compensation - Revenue recognition requires significant estimates for variable consideration, including rebates, promotional programs, and product returns, based on historical data and market conditions199200201 Goodwill and Intangible Assets (March 31, 2025) | (In thousands) | North American OTC Healthcare | International OTC Healthcare | Consolidated | | :--- | :--- | :--- | :--- | | Goodwill | $498,936 | $28,489 | $527,425 | | Intangible assets, net | $2,209,986 | $85,364 | $2,295,350 | | Total | $2,708,922 | $113,853 | $2,822,775 | - The top five brands (Monistat, BC/Goody's, Summer's Eve, TheraTears, and Fleet) comprise 58.6% of the total intangible asset value as of March 31, 2025203 - In fiscal 2025, the company recognized impairment charges of $12.5 million ($6.6 million for indefinite-lived and $5.9 million for finite-lived assets) related to non-strategic brands221229248 - In fiscal 2023, the company recorded significant impairment charges of $48.8 million for goodwill and $321.4 million for tradenames ($298.7 million indefinite-lived and $22.7 million finite-lived), primarily due to increased discount rates and reassessed long-term sales projections213219227 Results of Operations (2025 vs 2024) Total revenues increased 1.1% to $1.138 billion in FY2025, driven by International OTC growth, with gross profit up 1.6% and net income rising to $214.6 million Total Revenue by Segment (FY2025 vs FY2024) | (In thousands) | 2025 | 2024 | Increase (Decrease) Amount | Increase (Decrease) % | | :--- | :--- | :--- | :--- | :--- | | North American OTC Healthcare | $960,010 | $958,260 | $1,750 | 0.2% | | International OTC Healthcare | $177,752 | $167,097 | $10,655 | 6.4% | | Total Consolidated | $1,137,762 | $1,125,357 | $12,405 | 1.1% | - Gross profit increased by 1.6% to $634.5 million in FY2025, with the gross margin expanding to 55.8% from 55.5% in FY2024, primarily due to higher revenue and lower freight costs in North America239 - A tradename impairment charge of $12.5 million was recorded in FY2025, related to non-strategic brands248 - Net interest expense decreased to $47.6 million in FY2025 from $67.2 million in FY2024, driven by a lower average debt balance249 - The effective tax rate was 24.5% in FY2025, slightly up from 24.2% in FY2024, due to the mix of earnings in U.S. and foreign jurisdictions250 Liquidity and Capital Resources Operating cash flow was $251.5 million in FY2025, primarily used for $182.1 million in debt repayments and share repurchases, reducing total debt to $1.0 billion Summary of Cash Flows (In thousands) | | Year Ended March 31, 2025 | Year Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $251,515 | $248,926 | | Net cash used in investing activities | $(17,452) | $(20,111) | | Net cash used in financing activities | $(182,075) | $(241,015) | | Net change in cash and cash equivalents | $51,415 | $(12,020) | - Net cash from operating activities increased by $2.6 million in FY2025 due to higher net income before non-cash items, partly offset by increased working capital254 - Net cash used in financing activities decreased by $58.9 million in FY2025, primarily due to a $90.0 million decrease in debt repayments, partially offset by a $26.5 million increase in share repurchases257 Contractual Obligations as of March 31, 2025 (In millions) | Contractual Obligations | Total | Less than 1 Year | 1 to 3 Years | 4 to 5 Years | After 5 Years | | :--- | :--- | :--- | :--- | :--- | :--- | | Long-term debt | $1,000.0 | $— | $400.0 | $— | $600.0 | | Interest on long-term debt | $195.7 | $43.7 | $84.0 | $45.5 | $22.5 | | Purchase obligations | $230.2 | $212.2 | $12.8 | $5.0 | $0.2 | | Leases (Operating & Finance) | $51.9 | $8.4 | $17.4 | $15.7 | $10.4 | | Total | $1,477.8 | $264.3 | $514.2 | $66.2 | $633.1 | Quantitative and Qualitative Disclosures About Market Risk The company faces market risks from foreign currency fluctuations, with a hypothetical 10% adverse change impacting pre-tax income by $10.6 million in FY2025, while interest rate risk is mitigated by fixed-rate debt - The company has no variable rate debt outstanding as of March 31, 2025, mitigating immediate interest rate risk281 - The company is exposed to foreign currency exchange rate risk, primarily from the Canadian and Australian Dollar, with approximately 15.7% of net revenues denominated in foreign currencies in FY2025282 - A sensitivity analysis showed that a hypothetical 10% adverse change in foreign currency exchange rates would have resulted in a $10.6 million impact on pre-tax income for the year ended March 31, 2025283 Financial Statements and Supplementary Data This section presents audited consolidated financial statements, an unqualified auditor's opinion, and highlights critical audit matters regarding tradename and goodwill impairment assessments - Management concluded that the company's internal control over financial reporting was effective as of March 31, 2025, based on the COSO 2013 framework291292 - The independent auditor, PricewaterhouseCoopers LLP, issued an unqualified opinion on the consolidated financial statements and the effectiveness of internal control over financial reporting296 - Critical Audit Matters identified by the auditor were: (1) Indefinite-Lived Tradename Impairment Assessments for Summer's Eve and Monistat, and (2) Goodwill Impairment Assessment for the North American Women's Health Reporting Unit, due to significant management judgment in estimating fair values303306 Consolidated Statement of Income (Loss) Highlights (In thousands) | | 2025 | 2024 | 2023 | | :--- | :--- | :--- | :--- | | Total revenues | $1,137,762 | $1,125,357 | $1,127,725 | | Gross profit | $634,463 | $624,448 | $625,294 | | Operating income (loss) | $336,775 | $342,429 | $(22,415) | | Net income (loss) | $214,605 | $209,339 | $(82,306) | | Diluted EPS | $4.29 | $4.17 | $(1.65) | Consolidated Balance Sheet Highlights (In thousands) | | March 31, 2025 | March 31, 2024 | | :--- | :--- | :--- | | Total current assets | $448,328 | $375,043 | | Goodwill | $527,425 | $527,733 | | Intangible assets, net | $2,295,350 | $2,320,583 | | Total Assets | $3,402,218 | $3,318,417 | | Total current liabilities | $106,623 | $117,048 | | Long-term debt, net | $992,357 | $1,125,804 | | Total Liabilities | $1,567,321 | $1,663,333 | | Total Stockholders' Equity | $1,834,897 | $1,655,084 | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure The company reports that there have been no changes in or disagreements with its accountants on any matter of accounting principles or practices, or financial statement disclosure - None456 Controls and Procedures Management concluded that disclosure controls and internal control over financial reporting were effective as of March 31, 2025, with no material changes - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of March 31, 2025456 - There were no changes in internal control over financial reporting during the quarter ended March 31, 2025, that materially affected, or are reasonably likely to materially affect, internal controls458 Other Information No director or officer adopted or terminated a Rule 10b5-1 trading arrangement during the fourth quarter of fiscal 2025 - No director or officer adopted or terminated a Rule 10b5-1 trading arrangement during the fourth quarter of fiscal 2025459 Disclosure Regarding Foreign Jurisdictions That Prevent Inspections This item is not applicable to the company - Not applicable460 Part III Directors, Executive Officers and Corporate Governance Information on directors, executive officers, and corporate governance is incorporated by reference from the 2025 Definitive Proxy Statement - Information required for this item is incorporated by reference from the Company's 2025 Proxy Statement under the headings 'Election of Directors,' 'Executive Compensation and Other Matters,' 'Delinquent Section 16(a) Reports,' and 'Governance of the Company'462 Executive Compensation Details concerning executive compensation are incorporated by reference from the 2025 Definitive Proxy Statement - Information required for this item is incorporated by reference from the Company's 2025 Proxy Statement under headings including 'Executive Compensation and Other Matters,' 'Compensation Discussion and Analysis,' and 'Compensation and Talent Management Committee Report'463 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters Information on security ownership and equity compensation plans is incorporated by reference from the 2025 Definitive Proxy Statement - Information required for this item is incorporated by reference from the Company's 2025 Proxy Statement under the headings 'Security Ownership of Certain Beneficial Owners and Management' and 'Securities Authorized for Issuance Under Equity Compensation Plans'464 Certain Relationships and Related Transactions, and Director Independence Information on related party transactions and director independence is incorporated by reference from the 2025 Definitive Proxy Statement - Information required for this item is incorporated by reference from the Company's 2025 Proxy Statement under the headings 'Certain Relationships and Related Transactions,' 'Election of Directors,' and 'Governance of the Company'465 Principal Accounting Fees and Services Information on principal accounting fees and services is incorporated by reference from the 2025 Definitive Proxy Statement - Information required for this item is incorporated by reference from the Company's 2025 Proxy Statement under the heading 'Ratification of Appointment of the Independent Registered Public Accounting Firm'466 Part IV Exhibits and Financial Statement Schedules This section lists all financial statements, schedules, and exhibits filed as part of the Form 10-K, including consolidated financials and officer certifications - This item lists the financial statements and schedules included in the filing, which are located in Part II, Item 8468 - The Exhibit Index lists key documents filed with the report, including credit agreements, indentures for senior notes, long-term incentive plans, and officer certifications (302 and 906)471472473 Form 10-K Summary The company has not provided a summary for its Form 10-K - None474
Prestige sumer Healthcare (PBH) - 2025 Q4 - Annual Report