# Prestige Consumer Healthcare Inc.: Form 10-Q for the period ended Dec 31, 2024

- Company: [Prestige Consumer Healthcare Inc.](/companies/pbh.md) (CIK 1295947)
- Form: 10-Q
- Filed: 2025-02-06
- Accepted by EDGAR: Feb 6, 2025, 06:08 ET
- Period: 2024-12-31
- Accession: 0001295947-25-000009
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1295947/000129594725000009/pbh-20241231.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1295947/000129594725000009/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2024-12-31.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2024-10-01 to 2024-12-31 | $290.3m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Revenue | 9 months, 2024-04-01 to 2024-12-31 | $841.2m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Cost of revenue | 3 months, 2024-10-01 to 2024-12-31 | $129.3m | us-gaap:CostOfRevenue |
| Cost of revenue | 9 months, 2024-04-01 to 2024-12-31 | $376.8m | us-gaap:CostOfRevenue |
| Gross profit | 3 months, 2024-10-01 to 2024-12-31 | $161.0m | us-gaap:GrossProfit |
| Gross profit | 9 months, 2024-04-01 to 2024-12-31 | $464.5m | us-gaap:GrossProfit |
| Operating income | 3 months, 2024-10-01 to 2024-12-31 | $92.0m | us-gaap:OperatingIncomeLoss |
| Operating income | 9 months, 2024-04-01 to 2024-12-31 | $248.3m | us-gaap:OperatingIncomeLoss |
| Income tax | 3 months, 2024-10-01 to 2024-12-31 | $19.1m | us-gaap:IncomeTaxExpenseBenefit |
| Income tax | 9 months, 2024-04-01 to 2024-12-31 | $45.8m | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2024-10-01 to 2024-12-31 | $61.0m | us-gaap:NetIncomeLoss |
| Net income | 9 months, 2024-04-01 to 2024-12-31 | $164.5m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2024-10-01 to 2024-12-31 | $1.22 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 9 months, 2024-04-01 to 2024-12-31 | $3.28 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2024-10-01 to 2024-12-31 | $1.23 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 9 months, 2024-04-01 to 2024-12-31 | $3.31 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2024-10-01 to 2024-12-31 | 49,993,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 9 months, 2024-04-01 to 2024-12-31 | 50,085,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 9 months, 2024-04-01 to 2024-12-31 | $189.7m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 9 months, 2024-04-01 to 2024-12-31 | $4.7m | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Share repurchases | 9 months, 2024-04-01 to 2024-12-31 | $40.2m | us-gaap:PaymentsForRepurchaseOfCommonStock |
| Cash and equivalents | at 2024-12-31 | $50.9m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2024-12-31 | $377.2m | us-gaap:AssetsCurrent |
| Total assets | at 2024-12-31 | $3.33bn | us-gaap:Assets |
| Current liabilities | at 2024-12-31 | $102.5m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2024-12-31 | $1.54bn | us-gaap:Liabilities |
| Long-term debt | at 2024-12-31 | $1.00bn | us-gaap:LongTermDebtNoncurrent |
| Shareholders' equity | at 2024-12-31 | $1.79bn | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 33,745 characters.

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, 2024. 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, 2024 and in future reports filed with the U.S. Securities and Exchange Commission ("SEC").

See also “Cautionary Statement Regarding Forward-Looking Statements” on page 32 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., 2025) refers 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.

### Economic Environment

There has been economic uncertainty in the United States and globally due to several factors, including global supply chain constraints, changes in interest rates, a high inflationary environment, geopolitical events and evolving U.S. and international 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 end customers, including a shift in many markets to purchasing our products online.

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 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 negatively impacted our results of operations, and we expect further shortages may 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 and liquidity will depend on future developments, which are highly uncertain and cannot be predicted, including global supply chain constraints, inflation, global conflicts and trade actions/disputes, and the potential for further outbreaks of severe illnesses. 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.

### Global Minimum Tax

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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 legislation incorporating the agreed upon global minimum tax effective in 2024. 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.

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### Results of Operations

### Three Months Ended December 31, 2024 compared to the Three Months Ended December 31, 2023

### Total Segment Revenues

The following table represents total revenue by segment, including product groups, for the three months ended December 31, 2024 and 2023.

|  | Three Months Ended December 31, |  | Increase (Decrease) |
| --- | ---: | ---: | ---: |
| **(In thousands)** | **2024%** | **2023%** | **Amount%** |
| **North American OTC Healthcare** |  |  |  |
| Analgesics | $29,314 10.1 | $28,680 10.1 | $634 2.2 |
| Cough & Cold | 22,984 7.9 | 27,359 9.7 | (4,375) (16.0) |
| Women's Health | 53,686 18.6 | 53,076 18.9 | 610 1.1 |
| Gastrointestinal | 42,521 14.6 | 38,919 13.7 | 3,602 9.3 |
| Eye & Ear Care | 38,895 13.4 | 38,503 13.6 | 392 1.0 |
| Dermatologicals | 28,546 9.8 | 26,603 9.4 | 1,943 7.3 |
| Oral Care | 19,869 6.8 | 20,362 7.2 | (493) (2.4) |
| Other OTC | 3,119 1.1 | 3,063 1.1 | 56 1.8 |
| Total North American OTC Healthcare | 238,934 82.3 | 236,565 83.7 | 2,369 1.0 |
| **International OTC Healthcare** |  |  |  |
| Analgesics | $1,668 0.6 | $1,586 0.6 | 82 5.2 |
| Cough & Cold | 6,347 2.2 | 5,814 2.1 | 533 9.2 |
| Women's Health | 4,439 1.5 | 5,190 1.8 | (751) (14.5) |
| Gastrointestinal | 26,469 9.2 | 22,707 8.0 | 3,762 16.6 |
| Eye & Ear Care | 6,783 2.3 | 6,569 2.3 | 214 3.3 |
| Dermatologicals | 2,109 0.7 | 1,165 0.4 | 944 81.0 |
| Oral Care | 3,211 1.1 | 3,100 1.1 | 111 3.6 |
| Other OTC | 357 0.1 | 45 — | 312 693.3 |
| Total International OTC Healthcare | 51,383 17.7 | 46,176 16.3 | 5,207 11.3 |
| Total Consolidated | $290,317 100.0 | $282,741 100.0 | $7,576 2.7 |

Total revenues for the three months ended December 31, 2024 were $290.3 million, an increase of $7.6 million, or 2.7%, versus the three months ended December 31, 2023.

### North American OTC Healthcare Segment

Revenues for the North American OTC Healthcare segment increased $2.4 million, or 1.0%, during the three months ended December 31, 2024 versus the three months ended December 31, 2023. The $2.4 million increase was primarily attributable to an increase in sales in the Gastrointestinal and Dermatologicals categories, partly offset by a decrease in sales in the Cough & Cold category.

### International OTC Healthcare Segment

Revenues for the International OTC Healthcare segment increased $5.2 million, or 11.3%, during the three months ended December 31, 2024 versus the three months ended December 31, 2023. The $5.2 million increase was primarily attributable to an increase in sales in the Gastrointestinal 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.

*(In thousands)*

|  | Three Months Ended December 31, |  | Increase (Decrease) |
| --- | ---: | ---: | ---: |
| **Gross Profit** | **2024%** | **2023%** | **Amount%** |
| North American OTC Healthcare | $130,867 54.8 | $130,475 55.2 | $392 0.3 |
| International OTC Healthcare | 30,182 58.7 | 27,463 59.5 | 2,719 9.9 |
|  | $161,049 55.5 | $157,938 55.9 | $3,111 2.0 |

Gross profit for the three months ended December 31, 2024 increased $3.1 million, or 2.0%, when compared with the three months ended December 31, 2023. As a percentage of total revenues, gross profit decreased to 55.5% during the three months ended December 31, 2024 from 55.9% during the three months ended December 31, 2023, primarily due to increased supply chain costs.

### North American OTC Healthcare Segment

Gross profit for the North American OTC Healthcare segment increased $0.4 million, or 0.3%, during the three months ended December 31, 2024 versus the three months ended December 31, 2023. As a percentage of North American OTC Healthcare revenues, gross profit decreased to 54.8% during the three months ended December 31, 2024 from 55.2% during the three months ended December 31, 2023, primarily due to increased supply chain costs, partly offset by pricing actions.

### International OTC Healthcare Segment

Gross profit for the International OTC Healthcare segment increased $2.7 million, or 9.9%, during the three months ended December 31, 2024 versus the three months ended December 31, 2023. As a percentage of International OTC Healthcare revenues, gross profit decreased to 58.7% during the three months ended December 31, 2024 from 59.5% during the three months ended December 31, 2023, primarily due to 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.

*(In thousands)*

|  | Three Months Ended December 31, |  | Increase (Decrease) |
| --- | ---: | ---: | ---: |
| **Contribution Margin** | **2024%** | **2023%** | **Amount%** |
| North American OTC Healthcare | $99,872 41.8 | $96,558 40.8 | $3,314 3.4 |
| International OTC Healthcare | 23,232 45.2 | 21,914 47.5 | 1,318 6.0 |
|  | $123,104 42.4 | $118,472 41.9 | $4,632 3.9 |

### North American OTC Healthcare Segment

Contribution margin for the North American OTC Healthcare segment increased $3.3 million, or 3.4%, during the three months ended December 31, 2024 versus the three months ended December 31, 2023. As a percentage of North American OTC Healthcare revenues, contribution margin increased to 41.8% during the three months ended December 31, 2024 from 40.8% during the three months ended December 31, 2023. The contribution margin increase as a percentage of revenues was primarily due to a decrease in advertising and marketing spend.

### International OTC Healthcare Segment

Contribution margin for the International OTC Healthcare segment increased $1.3 million, or 6.0%, during the three months ended December 31, 2024 versus the three months ended December 31, 2023. As a percentage of International OTC Healthcare revenues, contribution margin decreased to 45.2% during the three months ended December 31, 2024 from 47.5% during the three months ended December 31, 2023. The contribution margin decrease as a percentage of revenues was primarily due to the increase in advertising and marketing spend as well as the decrease in gross profit margin noted above.

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### General and Administrative

General and administrative expenses were $26.2 million for the three months ended December 31, 2024 and $26.0 million for the three months ended December 31, 2023.

### Depreciation and Amortization

Depreciation and amortization expenses were $5.0 million for the three months ended December 31, 2024 and $5.6 million for the three months ended December 31, 2023. The decrease in depreciation and amortization expenses was primarily due to certain intangible assets being fully depreciated during fiscal 2025.

### Interest Expense, Net

Interest expense, net was $11.5 million during the three months ended December 31, 2024 versus $16.6 million during the three months ended December 31, 2023. The average indebtedness decreased to $1.0 billion during the three months ended December 31, 2024 from $1.3 billion during the three months ended December 31, 2023. The average cost of borrowing decreased to 4.6% for the three months ended December 31, 2024 from 5.4% for the three months ended December 31, 2023.

### Income Taxes

The provision for income taxes during the three months ended December 31, 2024 was $19.1 million versus $16.5 million during the three months ended December 31, 2023. The effective tax rate during the three months ended December 31, 2024 was 23.9% versus 23.8% during the three months ended December 31, 2023.

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### Results of Operations

### Nine Months Ended December 31, 2024 compared to the Nine Months Ended December 31, 2023

### Total Segment Revenues

The following table represents total revenue by segment, including product groups, for the nine months ended December 31, 2024 and 2023.

|  | Nine Months Ended December 31, |  | Increase (Decrease) |
| --- | ---: | ---: | ---: |
| **(In thousands)** | **2024%** | **2023%** | **Amount%** |
| **North American OTC Healthcare** |  |  |  |
| Analgesics | $83,472 9.9 | $85,838 10.1 | $(2,366) (2.8) |
| Cough & Cold | 60,999 7.3 | 73,703 8.7 | (12,704) (17.2) |
| Women's Health | 158,490 18.8 | 163,031 19.3 | (4,541) (2.8) |
| Gastrointestinal | 128,719 15.3 | 122,303 14.4 | 6,416 5.2 |
| Eye & Ear Care | 118,354 14.1 | 117,719 13.9 | 635 0.5 |
| Dermatologicals | 93,789 11.1 | 94,299 11.1 | (510) (0.5) |
| Oral Care | 58,241 6.9 | 61,400 7.2 | (3,159) (5.1) |
| Other OTC | 8,997 1.1 | 8,838 1.0 | 159 1.8 |
| Total North American OTC Healthcare | 711,061 84.5 | 727,131 85.7 | (16,070) (2.2) |
| **International OTC Healthcare** |  |  |  |
| Analgesics | $4,025 0.5 | $3,814 0.4 | 211 5.5 |
| Cough & Cold | 18,304 2.2 | 19,129 2.3 | (825) (4.3) |
| Women's Health | 14,560 1.7 | 17,218 2.0 | (2,658) (15.4) |
| Gastrointestinal | 58,347 6.9 | 49,678 5.9 | 8,669 17.5 |
| Eye & Ear Care | 18,240 2.2 | 17,715 2.1 | 525 3.0 |
| Dermatologicals | 6,076 0.7 | 3,972 0.5 | 2,104 53.0 |
| Oral Care | 9,696 1.2 | 9,591 1.1 | 105 1.1 |
| Other OTC | 935 0.1 | 118 — | 817 692.4 |
| Total International OTC Healthcare | 130,183 15.5 | 121,235 14.3 | 8,948 7.4 |
| Total Consolidated | $841,244 100.0 | $848,366 100.0 | $(7,122) (0.8) |

Total revenues for the nine months ended December 31, 2024 were $841.2 million, a decrease of $7.1 million, or 0.8%, versus the nine months ended December 31, 2023.

### North American OTC Healthcare Segment

Revenues for the North American OTC Healthcare segment decreased $16.1 million, or 2.2%, during the nine months ended December 31, 2024 versus the nine months ended December 31, 2023. The $16.1 million decrease was primarily attributable to a decrease in sales in the Cough & Cold, Women's Health, and Oral Care categories, partly offset by an increase in sales in the Gastrointestinal category.

### International OTC Healthcare Segment

Revenues for the International OTC Healthcare segment increased $8.9 million, or 7.4%, during the nine months ended December 31, 2024 versus the nine months ended December 31, 2023. The $8.9 million increase was mainly attributable to an increase in sales in the Gastrointestinal and Dermatologicals categories, partly offset by a decrease 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.

*(In thousands)*

|  | Nine Months Ended December 31, |  | Increase (Decrease) |
| --- | ---: | ---: | ---: |
| **Gross Profit** | **2024%** | **2023%** | **Amount%** |
| North American OTC Healthcare | $389,653 54.8 | $403,499 55.5 | $(13,846) (3.4) |
| International OTC Healthcare | 74,800 57.5 | 69,132 57.0 | 5,668 8.2 |
|  | $464,453 55.2 | $472,631 55.7 | $(8,178) (1.7) |

Gross profit for the nine months ended December 31, 2024 decreased $8.2 million, or 1.7%, when compared with the nine months ended December 31, 2023. As a percentage of total revenues, gross profit decreased to 55.2% during the nine months ended December 31, 2024 from 55.7% during the nine months ended December 31, 2023, primarily due to the decrease in revenue and increased supply chain costs.

### North American OTC Healthcare Segment

Gross profit for the North American OTC Healthcare segment decreased $13.8 million, or 3.4%, during the nine months ended December 31, 2024 versus the nine months ended December 31, 2023. As a percentage of North American OTC Healthcare revenues, gross profit decreased to 54.8% during the nine months ended December 31, 2024 from 55.5% during the nine months ended December 31, 2023, primarily due to the decrease in revenue and increased supply chain costs, partly offset by pricing actions.

### International OTC Healthcare Segment

Gross profit for the International OTC Healthcare segment increased $5.7 million, or 8.2%, during the nine months ended December 31, 2024 versus the nine months ended December 31, 2023. As a percentage of International OTC Healthcare revenues, gross profit increased to 57.5% during the nine months ended December 31, 2024 from 57.0% during the nine months ended December 31, 2023, primarily due to 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.

*(In thousands)*

|  | Nine Months Ended December 31, |  | Increase (Decrease) |
| --- | ---: | ---: | ---: |
| **Contribution Margin** | **2024%** | **2023%** | **Amount%** |
| North American OTC Healthcare | $290,016 40.8 | $302,792 41.6 | $(12,776) (4.2) |
| International OTC Healthcare | 55,718 42.8 | 54,040 44.6 | 1,678 3.1 |
|  | $345,734 41.1 | $356,832 42.1 | $(11,098) (3.1) |

### North American OTC Healthcare Segment

Contribution margin for the North American OTC Healthcare segment for the nine months ended December 31, 2024 decreased $12.8 million, or 4.2%, when compared with the nine months ended December 31, 2023. As a percentage of North American OTC Healthcare revenues, contribution margin decreased to 40.8% during the nine months ended December 31, 2024 from 41.6% during the nine months ended December 31, 2023, primarily due to the decrease in gross profit margin noted above.

### International OTC Healthcare Segment

Contribution margin for the International OTC Healthcare segment increased $1.7 million, or 3.1%, during the nine months ended December 31, 2024 versus the nine months ended December 31, 2023. As a percentage of International OTC Healthcare revenues, contribution margin decreased to 42.8% during the nine months ended December 31, 2024 from 44.6% during the nine months ended December 31, 2023. The contribution margin decrease as a percentage of revenues was primarily due to an increase in advertising and marketing spend during the nine months ended December 31, 2024.

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### General and Administrative

General and administrative expenses were $81.2 million for the nine months ended December 31, 2024 and $79.7 million for the nine months ended December 31, 2023. General and administrative expenses increased $1.5 million due to an increase in compensation costs and professional fees, partly offset by a decrease in information technology costs.

### Depreciation and Amortization

Depreciation and amortization expenses were $16.2 million for the nine months ended December 31, 2024 and $16.9 million for the nine months ended December 31, 2023. The decrease in depreciation and amortization expenses was primarily due to certain intangible assets being fully amortized during the nine months ended December 31, 2024.

### Interest Expense, Net

Interest expense, net was $36.9 million during the nine months ended December 31, 2024 versus $51.9 million during the nine months ended December 31, 2023. The average indebtedness decreased to $1.1 billion during the nine months ended December 31, 2024 from $1.3 billion during the nine months ended December 31, 2023. The average cost of borrowing decreased to 4.7% for the nine months ended December 31, 2024 compared to 5.4% for the nine months ended December 31, 2023.

### Income Taxes

The provision for income taxes during the nine months ended December 31, 2024 was $45.8 million versus $48.8 million during the nine months ended December 31, 2023. The effective tax rate during the nine months ended December 31, 2024 was 21.8% versus 23.4% during the nine months ended December 31, 2023. The decrease in the effective tax rate for the nine months ended December 31, 2024 compared to the nine months ended December 31, 2023 was due to discrete items primarily pertaining to the release of a reserve for uncertain tax positions due to the statute of limitations expiring.

### 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 for the next twelve months and the foreseeable future, with a combination of funds generated from operations and borrowings. Our principal uses of cash are for operating expenses, debt service, share repurchases, capital expenditures, 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. See "Economic Environment" above.

As of December 31, 2024, we had cash and cash equivalents of $50.9 million, an increase of $4.4 million from March 31, 2024. The following table summarizes the change:

*(In thousands)*

| Cash provided by (used in): | Nine Months Ended December 31, 2024 | 2023 | $ Change |
| --- | ---: | ---: | ---: |
| Operating Activities | $189,667 | $182,019 | $7,648 |
| Investing Activities | (13,973) | (5,107) | (8,866) |
| Financing Activities | (170,587) | (172,571) | 1,984 |
| Effects of exchange rate changes on cash and cash equivalents | (702) | 785 | (1,487) |
| Net change in cash and cash equivalents | $4,405 | $5,126 | $(721) |

### Operating Activities

Net cash provided by operating activities was $189.7 million for the nine months ended December 31, 2024, compared to $182.0 million for the nine months ended December 31, 2023. The $7.6 million increase was due to decreased working capital and increased net income, partly offset by a decrease in non-cash operating activities.

### Investing Activities

Net cash used in investing activities was $14.0 million for the nine months ended December 31, 2024, compared to $5.1 million for the nine months ended December 31, 2023. The increase in cash used for investing activities of $8.9 million was primarily attributable to the acquisition of *Hydralyte* intellectual property of $8.3 million and changes in a short-term loan receivable of $2.3 million, partly offset by a decrease in capital expenditures of $1.7 million.

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### Financing Activities

Net cash used in financing activities was $170.6 million for the nine months ended December 31, 2024, compared to $172.6 million for the nine months ended December 31, 2023. The $2.0 million decrease in cash used in financing activities was primarily due to a decrease in term loan repayments and payments of debt costs of $15.8 million and an increase in the proceeds from the exercise of stock options of $1.5 million, partly offset by an increase in the purchase of shares of our common stock of $15.2 million.

### Capital Resources

As of December 31, 2024, we had an aggregate of $1.0 billion of outstanding indebtedness, which consisted of the following:

- $400.0 million of 5.125% 2019 senior unsecured notes, which mature on January 15, 2028 (the "2019 Senior Notes"); and
- $600.0 million of 3.750% 2021 senior unsecured notes, which mature on April 1, 2031 (the "2021 Senior Notes").

As of December 31, 2024, we had no outstanding balance on our asset-based revolving credit facility originally entered into on January 31, 2012 (the "2012 ABL Revolver”) and a borrowing capacity of $163.8 million.

During the three months ended December 31, 2024, we repaid the balance of our 2012 Term B-5 Loans under the term loan due 2028 originally entered into on January 31, 2012.

### Maturities:

*(In thousands)*

| Year Ending March 31, | Amount |
| --- | ---: |
| 2025 (remaining three months ending March 31, 2025) | $— |
| 2026 | — |
| 2027 | — |
| 2028 | 400,000 |
| 2029 | — |
| Thereafter | 600,000 |
|  | $1,000,000 |

### Covenants:

Our debt facilities contain various financial covenants, including provisions that require us to maintain certain fixed charge ratios. The credit agreement governing the 2012 ABL Revolver and the indentures governing the 2021 Senior Notes and 2019 Senior Notes contain provisions that accelerate our indebtedness on certain changes in control and restrict us from undertaking specified corporate actions, including asset dispositions, acquisitions, payments of dividends and other specified payments, repurchasing our equity securities in the public markets, incurrence of indebtedness, creation of liens, making loans and investments and transactions with affiliates. Specifically, we must:

- Have a fixed charge ratio of greater than 1.0 to 1.0 for the quarter ended December 31, 2024 (defined as, with certain adjustments, the ratio of our consolidated EBITDA minus capital expenditures to our trailing twelve month consolidated interest paid, taxes paid and other specified payments). Our fixed charge requirement remains level throughout the term of the debt facilities.

At December 31, 2024, we were in compliance with the applicable financial and restrictive covenants under the 2012 ABL Revolver and the indentures governing the 2021 Senior Notes and the 2019 Senior Notes. Management anticipates that in the normal course of operations, we will be in compliance with the financial and restrictive covenants during the next twelve months.

### Critical Accounting Policies and Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Although these estimates are based on our knowledge of current events and actions that we may undertake in the future, actual results could differ from those

-30- estimates. A summary of our critical accounting policies is presented in our Annual Report on Form 10-K for the fiscal year ended March 31, 2024. There were no material changes to our critical accounting policies during the nine months ended December 31, 2024.

### Recent Accounting Pronouncements

A description of recently issued accounting pronouncements is included in the notes to the unaudited Condensed Consolidated Financial Statements in Part I, Item I, Note 1 of this Quarterly Report on Form 10-Q.

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### CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (the “PSLRA”), including, without limitation, information within Management's Discussion and Analysis of Financial Condition and Results of Operations. The following cautionary statements are being made pursuant to the provisions of the PSLRA and with the intention of obtaining the benefits of the “safe harbor” provisions of the PSLRA.

Forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q. Except as required under federal securities laws and the rules and regulations of the SEC, we do not intend to update any forward-looking statements to reflect events or circumstances arising after the date of this Quarterly Report on Form 10-Q, whether as a result of new information, future events or otherwise. As a result of the risks and uncertainties described below, readers are cautioned not to place undue reliance on forward-looking statements included in this Quarterly Report on Form 10-Q or that may be made elsewhere from time to time by, or on behalf of, us. All forward-looking statements attributable to us are expressly qualified by these cautionary statements.

These forward-looking statements generally can be identified by the use of words or phrases such as “believe,” “anticipate,” “expect,” “estimate,” "plan," “project,” "intend," "strategy," "goal," "objective," "future," "seek," "may," "might," "should," "would," "will," "will be," or other similar words and phrases. Forward-looking statements are based on current expectations and assumptions that are subject to a number of risks and uncertainties that could cause actual results to differ materially from those anticipated, including, without limitation:

- Disruptions of supply of sourced goods or components;
- Our dependence on third-party manufacturers to produce many of the products we sell and our ability to transfer production to our own facilities or other third-party suppliers;
- Price increases for raw materials, labor, energy and transportation costs, and for other input costs;
- Actions of government agencies in connection with our and our suppliers’ manufacturing plants, products, advertising or regulatory matters;
- The impact of geopolitical events and severe illness outbreaks on global economic conditions, consumer demand, retailer product availability, and business operations including manufacturing, supply chain and distribution;
- The high level of competition in our industry and markets;
- The level of success of new product introductions, line extensions, increased spending on advertising and marketing support, and other new sales and marketing strategies;
- Our dependence on a limited number of customers for a large portion of our sales;
- Our inability to successfully identify, negotiate, complete and integrate suitable acquisition candidates and to obtain necessary financing;
- Changes by retailers in inventory management practices, delivery requirements, and demands for marketing and promotional spending in order to retain or increase shelf space or online share;
- Our inability to grow our international sales;
- General economic conditions and incidence levels affecting sales of our products and their respective markets;
- Financial factors, such as increases in interest rates and currency exchange rate fluctuations;
- Changing consumer trends, additional store brand or branded competition, accelerating shifts to online shopping or pricing pressures;
- Our dependence on third-party logistics providers to distribute our products to customers;
- Disruptions in our distribution center or manufacturing facilities;
- Potential changes in export/import and trade laws, regulations and policies including any increased trade restrictions or tariffs;
- Acquisitions, dispositions or other strategic transactions diverting managerial resources and creating additional liabilities;
- Product liability claims, product recalls and related negative publicity;
- Our inability to protect our intellectual property rights;
- Our dependence on third parties for intellectual property relating to some of the products we sell;
- Our inability to protect our information technology systems from threats or disruptions;
- Our dependence on third-party information technology service providers and their ability to protect against security threats and disruptions;
- Our assets being comprised virtually entirely of goodwill and intangibles and possible changes in their value based on adverse operating results and/or changes in the discount rate used to value our brands;
- Our dependence on key personnel;

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- The costs associated with any claims in litigation or arbitration and any adverse judgments rendered in such litigation or arbitration;
- Our level of indebtedness and possible inability to service our debt or to obtain additional financing;
- The restrictions imposed by our financing agreements on our operations; and
- Changes in federal, state and other geographic tax laws.

For more information, see Part I, Item 1A. "Risk Factors" in our Annual Report on Form 10-K for the fiscal year ended March 31, 2024.

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## Market risk

As filed, 1,474 characters.

### Interest Rate Risk

Our 2012 ABL Revolver is variable rate debt. At December 31, 2024 the 2012 ABL Revolver had a zero balance and therefore none of our debt carried a variable rate of interest at December 31, 2024.

### Foreign Currency Exchange Rate Risk

During the three and nine months ended December 31, 2024, approximately 18.2% and 15.8%, respectively, of our gross revenues were denominated in currencies other than the U.S. Dollar. During the three and nine months ended December 31, 2023, approximately 17.0% and 14.1%, respectively, of our gross revenues were denominated in currencies other than the U.S. Dollar. As such, we are exposed to transactions that are sensitive to foreign currency exchange rates. These transactions are primarily with respect to the Canadian and Australian Dollars.

We performed a sensitivity analysis with respect to exchange rates for the three and nine months ended December 31, 2024 and 2023. Holding all other variables constant, and assuming a hypothetical 10.0% adverse change in foreign currency exchange rates, this analysis resulted in a less than 5.0% impact on pre-tax income of approximately $3.9 million for the three months ended December 31, 2024 and approximately $8.0 million for the nine months ended December 31, 2024. It represented a less than 5.0% impact on pre-tax income of approximately $2.7 million for the three months ended December 31, 2023 and $6.8 million for the nine months ended December 31, 2023.

## Controls and procedures

As filed, 1,319 characters.

### Disclosure Controls and Procedures

The Company's management, with the participation of its Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the Company's disclosure controls and procedures, as defined in Rule 13a–15(e) of the Securities Exchange Act of 1934 (the “Exchange Act”), as of December 31, 2024. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, as of December 31, 2024, the Company's disclosure controls and procedures were effective to ensure that information required to be disclosed by the Company in the reports the Company files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms and that such information is accumulated and communicated to the Company's management, including the Company's Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

### Changes in Internal Control over Financial Reporting

There was no change in our internal control over financial reporting that occurred during the quarter ended December 31, 2024 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

## Risk factors

As filed, 1,154 characters.

You should carefully consider the risk factors discussed in Part I, Item 1A. "Risk Factors" in our Annual Report on Form 10-K for the year ended March 31, 2024, which could materially affect our business, financial condition or results of operations. The risk factors described in our Annual Report on Form 10-K have not materially changed in the period covered by this Quarterly Report on Form 10-Q, but such risks are not the only risks facing us. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and results of operations.

Our quarterly operating results and revenues may fluctuate as a result of any of these or other factors. Accordingly, results for any one quarter are not necessarily indicative of results to be expected for any other quarter or for any year, and revenues for any particular future period may decrease. In the future, operating results may fall below the expectations of securities analysts and investors. In that event, the market price of our outstanding securities could be adversely impacted.

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Filed Feb 6, 2025.
Source: SEC EDGAR, the filing index for accession 0001295947-25-000009. Last ingested by Listed: Nov 5, 2026, 11:26 ET. No prices; not investment advice.