Prestige Consumer Healthcare : Fiscal 25 Annual Report
PBH
Published on 07/04/2025 at 07:30
2025
Annual Report
Prestige Consumer Healthcare Inc. markets, sells, manufactures and distributes consumer healthcare products to retail outlets in the U.S., Canada, Australia and certain other international markets. We are a company of brand builders. We have grown organically and by acquiring well-recognized leading brands in niche categories. Our management provides our brands with the marketing expertise and investment necessary to grow the brands' market position, expand its distribution and successfully launch line extensions and new products, with the goal of continually enhancing consumer satisfaction.
2025
At Prestige Consumer Healthcare, we focus on brand-building and product innovation in niche consumer healthcare categories to better improve the lives of our consumers. For generations, our trusted brands have helped consumers
care for themselves and their loved ones. It is our mission to preserve this trust by continuing to provide products with their needs in mind.
Consistent Long-Term Revenue Performance
Revenues of
$1,138 M
a 3.4% CAGR over the last five years
Stable Organic Revenue Growth*
1.2%
organic growth vs. 2024, including strong International segment growth
Record Profitability
Adjusted EPS* of
$4.52
up 7.3% vs. 2024
Disciplined Capital Allocation
2.4x
leverage at year-end, enabling further future capital deployment flexibility
A STRONG PORTFOLIO
Category percentage of FY25 revenues
9%
COUGH & COLD
10%
ANALGESICS
11%
DERMATOLOGICALS
9%
ORAL CARE 23%
GASTROINTESTINAL
21%
WOMEN'S HEALTH
16%
EYE & EAR CARE
Note: Numbers are approximate, Other OTC (1% of sales) not shown
FINANCIAL HIGHLIGHTS
Fiscal Year Ended March 31,
(in thousands,
except per share amounts)
2025
2024
2023
2022
2021
Net Revenues
$ 1,137,762
$ 1,125,357
$ 1,127,725
$ 1,086,812
$943,365
Adjusted EBITDA*
$ 374,460
$ 373,860
$ 378,091
$ 367,653
$328,932
Net Income (Loss)
$ 214,605
$ 209,339
$ (82,306)
$ 205,381
$164,682
Adjusted Net Income*
$ 226,346
$ 211,322
$ 211,974
$ 206,310
$163,998
Earnings (Loss) Per Share-Diluted
$ 4.29
$ 4.17
$ (1.63)
$ 4.04
$ 3.25
Adjusted Earnings Per Share-Diluted
$ 4.52
$ 4.21
$ 4.21
$ 4.06
$ 3.24
Weighted Average Shares Outstanding-Diluted
50,080
50,178
50,384
50,842
50,605
Net Cash Provided by Operating Activities
$ 251,515
$ 248,926
$ 229,716
$ 259,922
$235,607
Capital Expenditures
$ (8,224)
$ 9,550
$ 7,784
$ 9,642
$ 22,243
Free Cash Flow**
$ 243,291
$ 239,376
$ 221,932
$ 250,280
$213,364
Adjusted Free Cash Flow**
$ 243,291
$ 239,376
$ 221,932
$ 253,745
$213,364
Adjusted Free Cash Flow as a Percentage of Net Revenues
21.4%
21.3%
19.7%
23.3%
22.6%
TOTAL REVENUES
(in millions)
ADJUSTED EARNINGS PER SHARE-DILUTED*
ADJUSTED FREE CASH FLOW**
(in millions)
$943.4
$1,086.8 $1,127.7 $1,125.4 $1,137.8
$3.24
$4.06
$4.21 $4.21 $4.52
$213.4
$253.7
$221.9 $239.4 $243.3
2021
2022
2023
2024
2025
2021
2022
2023
2024
2025
2021
2022
2023
2024
2025
* Organic revenue growth, adjusted net income, adjusted earnings per share, and adjusted EBITDA are non-GAAP financial measures and are reconciled to the reported GAAP figures in Exhibit 99.1 and 99.2 accompanying our earnings release filed with the Securities and Exchange Commission on May 8, 2025.
** Free cash flow and adjusted free cash flow are non-GAAP financial measures. Management believes free cash flow is a commonly used measure of liquidity, indicative of cash available for capital allocation. Free cash flow and adjusted free cash flow are reconciled to GAAP Net Cash provided by operating activities in Exhibit 99.1 and 99.2 accompanying our earnings release filed with the Securities and Exchange Commission on May 8, 2025.
Management believes that these measures provide additional ways to view our operations and a more complete understanding of our business than could be obtained absent this disclosure, when considered with both our GAAP results and our reconciliation therewith.
Prestige Consumer Healthcare Inc. 2025 Annual Report 1
FELLOW
Fiscal 2025 delivered exceptional performance in our 20th year as a public company, with record revenues, record adjusted earnings per share, and strong free cash flow growth achieved thanks to our business strategy and the unique attributes of our portfolio. These results are a continuation of our long-term track record of consistent revenue
and earnings growth from our diverse portfolio of brands and channels.
Executing this strategy is a Prestige organization that continues to operate at the highest level of excellence thanks to our guiding principles
of Leadership, Trust, Change, and Execution. These business principles and traits have us well positioned to deliver consistent and stable results over time, even against the backdrop of today's volatile business environment.
2 2025 Annual Report Prestige Consumer Healthcare Inc.
Letter to Our Shareholders
Delivering Solid Results in Fiscal 2025
For fiscal 2025, we delivered strong financial performance across each of the key components of our three-pillar strategy.
Investing for Growth with Proven Brand-Building Playbook
We generated 1.1% reported net sales growth, or 1.2% on an organic basis. This stable low-single-digit growth rate is a testament to our long-term focus on investing in the marketing and innovation for each of our iconic brands.
In the U.S. and Canada, the benefits of having a diverse portfolio helped drive slight growth for our North America segment. As anticipated, we faced the effects of supply chain challenges in eye care, but having a wide-ranging portfolio and being agile marketers enabled us to refocus marketing efforts in other categories to add incremental growth. Beyond executing our proven marketing strategies, we simultaneously advanced product innovation and expanded channel partnerships to drive further growth.
For innovation, we continue to operate with a multi-year pipeline of new product development concepts to ensure we generate new SKUs that match the needs of consumers with the goal of growing categories over time. These innovations are designed to satisfy key consumer interests, such as a new flavor, adding an efficacious ingredient, or a new communicated healthcare benefit related to our products.
We are constantly striving to enhance our channels in order to offer our diverse portfolio of brands to our consumers where and when they shop. We seek to build on our successful marketing efforts by ensuring our products are widely available wherever consumers shop, then further focusing our investments around the channels that are most important to consumers. In this regard, our long-term investments in eCommerce
continue to pay off as consumers shift into this convenient shopping option. We do this by maintaining individual brand content and marketing strategies that are designed to both enhance the overall consumer experience and help drive traffic and conversion of new users.
In our International segment, we experienced solid growth in excess of 5% thanks to strong performance in Australia, including the Hydralyte brand which continues to grow household penetration and overall usage. Hydralyte continues to be a growth opportunity for our business, and during the year we acquired the rights to further geographies globally to further enhance the long-term runway for success.
New products, including many recent launches shown here, are an integral part of our long-term brand-building strategy.
Letter to Our Shareholders
Superior Business Attributes Drive Strong Free Cash Flow
We delivered stable adjusted EBITDA margin* of approximately 33% and strong adjusted EPS* growth of over 7% resulting in adjusted EPS of $4.52. This translated into strong free cash flow of approximately $243 million.
Our strong financial performance reflects the structural advantages of our OTC healthcare focus. Our products deliver strong margins due to three key factors: the essential nature of health-focused categories, consumers' prioritization of trusted brands for health needs, and regulatory barriers that limit competitive pressures.
By design, our business model has a high percentage of externally manufactured product, which helps result in higher free cash flow thanks to low capital expenditure needs of less than 2% of sales annually.
These attributes, along with our disciplined focus around stable profitability, enables superior and sustainable free cash flow that supports reinvestment in marketing and innovation as well as our capital deployment strategy.
Efficient Platform Enables Capital Allocation Optionality
We deployed capital in multiple ways in fiscal 2025 thanks to this leading cash flow profile and modest leverage. We achieved a 2.4x leverage ratio at year end, the lowest year-end leverage in the company's history, and reduced our term loan balance to zero. Our steady cash generation coupled with low leverage allowed us to deploy the capital in various areas including over $50 million in share repurchases, the acquisition of the rights to additional Hydralyte territories, and increasing cash on hand to pursue future strategic acquisition opportunities.
Letter to Our Shareholders
Consistent, Steady Long-Term Performance
Our solid results are just the latest reiteration of consistent annual sales and earnings per share growth. When managing the day-to-day and quarter-to-quarter near-term challenges of marketing, manufacturing, and distributing a large range of consumer healthcare brands, it's important to be reminded of the long-term trend-line.
Over the last five years, we've achieved a compound annual growth rate of over 3% for revenue and approximately 9% for adjusted earnings per share, which aligns with our expectations for long-term low-single-digit organic sales growth and mid- to high-single digit earnings growth.
This steady performance trend is the result of our long-term investments and execution behind a time-tested strategy and unique business attributes. This has allowed us to perform well when faced with various business challenges, like tight supply chains, COVID-19, and inflation.
20 Years Strong: Positioned for Long-term Success
This year marks 20 years as a public company. Guided by our core principles of Leadership, Trust, Change and Execution we have transformed our portfolio from its humble beginnings in 2005 into a diversified consumer healthcare leader through our disciplined three-pillar strategy: investing for organic growth, delivering industry-leading and consistent free cash flow, and driving shareholder returns through disciplined capital deployment including M&A.
The result is a business that is almost unrecognizable from its beginnings. Today we maintain over 20 wide-ranging iconic consumer healthcare brands generating over $1.1 billion in revenue, with hard-working
laser-focused employees across global sites. This success validates our strategic approach and reinforces our confidence in our business model.
REVENUE
+3.4%
5-Yr CAGR
ADJUSTED DILUTED EPS1
+8.8%
5-Yr CAGR
REVENUE
EMPLOYEES
In millions
$1,138
600+
$715
$303
187
75
2005
2015
2025
2005
2015
2025
Over 20 years Prestige has grown from a small local business to over $1 billion in revenue in iconic consumer health brands and with employees in sites globally.
1 Adjusted Earnings Per Share is a non-GAAP financial measures and reconciled to the reported GAAP figures in Exhibit 99.1 and 99.2 accompanying our earnings releases filed with the Securities and Exchange Commission on and May 7, 2020 and May 8, 2025.
Letter to Our Shareholders
Prestige began trading in March 2005 under the symbol "PBH".
Photos provided via NYSE.
As we begin fiscal 2026, market conditions remain fast-changing and hard to predict, but we believe our proven business attributes and strategy positions us well for long-term success. Our broad portfolio of needs-based brands, diverse and mostly domestic supply base, and focus around cost savings leaves us well positioned to navigate the current environment, in certain ways similar to the one we managed through during COVID-19.
Furthermore, we have confidence in our financial profile. Our leverage position is the strongest in the company's history, achieving 2.4x at year-end and below our less than 3.0x long-term operating target. Coupled with anticipated strong free cash flow, we foresee ample financial flexibility for cash deployment in multiple ways that will unlock shareholder value and help us be best-in-class at navigating a volatile environment.
We remain confident in the big picture - that our business attributes support our proven formula of solid organic growth, leading free cash flow generation, and a proven capital deployment strategy. We are excited about the ongoing evolution of our business and the ability to continue creating value for you, our shareholders. On behalf of our management team and board of directors, I thank you for your confidence in Prestige and look forward to updating you on our business throughout the year.
Ron Lombardi
Chair, President and Chief Executive Officer
Letter to Our Shareholders
Prestige Consumer Healthcare's Board of Directors, management and employees all recognize the responsibility that comes with selling trusted consumer healthcare brands, and the importance of integrating corporate responsibility into our
operations and culture for the benefit of future generations. We are committed to building environmental sustainability, social responsibility, and effective corporate governance into all aspects of our business. We view this as sound business strategy that drives resiliency and long-term value creation for the benefit of all stakeholders, including our consumers, customers, employees, investors, suppliers, regulators and the communities in which we live and operate.
Our 2024 sustainability report is available on our website, https://www.prestigebrands.com/about-us/corporate-responsibility. Our approach to Corporate Responsibility is based on credible frameworks and standards that create a foundation for identifying material topics, understanding our risks and opportunities, and informing our strategy.
Our People
Our people are critical to our company's success. We trust them every day to maintain safety and performance excellence, uphold integrity in manufacturing and marketing, and adhere to our company's four
guiding principles.
Our Community & Consumers
Prestige's commitment to responsible corporate citizenship extends beyond our employees and into the lives of our communities and consumers.
Our Planet & Partners
In line with our goal to continuously innovate and provide quality products to our consumers, we aim to assess, reduce, and report on our environmental impacts.
CORPORATE
DIRECTORS
Ronald M. Lombardi
Chair, President and Chief Executive Officer Prestige Consumer Healthcare Inc.
John E. Byom
Chief Executive Officer
Classic Provisions, Inc. (Retired)
Celeste A. Clark, Ph.D. Senior Vice President Kellogg Company (Retired)
James C. D'Arecca
Executive Vice President, CFO Haemonetics Corporation
Sheila A. Hopkins
President, Global Vision Care and Executive Vice President of Bausch + Lomb (Retired)
John F. Kelly
Vice President, Quality Operations and Environment, Health & Safety
Pfizer Inc. (Retired)
Dawn M. Zier
Board Chair of The Hain Celestial Group, Inc. President and Chief Operating Officer
Tivity Health, Inc. (Retired)
EXECUTIVES
Ronald M. Lombardi
Chair, President and Chief Executive Officer Prestige Consumer Healthcare Inc.
Christine Sacco
Chief Financial Officer and Chief Operating Officer
William P'Pool
Senior Vice President, General Counsel and Corporate Secretary
Adel Mekhail
Executive Vice President-Sales and Marketing
Jeff Zerillo
Senior Vice President-Operations
Jeff Thompson
Vice President-Manufacturing and Operations
(Mark One)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549 FORM 10-K
☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended March 31, 2025
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number: 001-32433
PRESTIGE CONSUMER HEALTHCARE INC.
(Exact name of registrant as specified in its charter)
Delaware 20-1297589
(State or other jurisdiction of incorporation or organization)
660 White Plains Road Tarrytown, New York 10591
(Address of principal executive offices) (Zip Code)
(914) 524-6800
(Registrant's telephone number, including area code)
(I.R.S. Employer Identification No.)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common stock, par value $0.01 per share
PBH
New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer
☒
Accelerated filer
☐
Non-accelerated filer
☐
Smaller reporting company
☐
Emerging growth company
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.
☒
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to § 240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒
The aggregate market value of voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant's most recently completed second fiscal quarter ended September 30, 2024 was $3,532.2 million.
As of May 1, 2025, the registrant had 49,414,707 shares of common stock outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant's Definitive Proxy Statement for the 2025 Annual Meeting of Stockholders (the "2025 Proxy Statement") are incorporated by reference into Part III of this Annual Report on Form 10-K to the extent described herein.
TABLE OF CONTENTS
Page
Part I
Item 1.
Business
2
Item 1A.
Risk Factors
13
Item 1B.
Unresolved Staff Comments
25
Item 1C.
Cybersecurity
25
Item 2.
Properties
27
Item 3.
Legal Proceedings
27
Item 4.
Mine Safety Disclosures
27
Part II
Item 5.
Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
28
Item 6.
(Reserved)
31
Item 7.
Management's Discussion and Analysis of Financial Condition and Results of Operations
31
Item 7A.
Quantitative and Qualitative Disclosures About Market Risk
43
Item 8.
Financial Statements and Supplementary Data
44
Item 9.
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
82
Item 9A.
Controls and Procedures
82
Item 9B.
Other Information
82
Item 9C.
Disclosure Regarding Foreign Jurisdictions That Prevent Inspections
82
Part III
Item 10.
Directors, Executive Officers and Corporate Governance
83
Item 11.
Executive Compensation
83
Item 12.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
83
Item 13.
Certain Relationships and Related Transactions, and Director Independence
83
Item 14.
Principal Accounting Fees and Services
83
Part IV
Item 15.
Exhibits and Financial Statement Schedules
84
Item 16.
Form 10-K Summary
87
TRADEMARKS AND TRADENAMES
Trademarks and tradenames used in this Annual Report on Form 10-K are the property of Prestige Consumer Healthcare Inc. or its subsidiaries, as the case may be. We have italicized our trademarks or tradenames when they appear in this Annual Report on Form 10-K.
Part I.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This Annual Report on Form 10-K 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 Annual Report on Form 10-K. 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 Annual Report on Form 10-K, 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 Annual Report on Form 10-K 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," 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, if necessary due to a disruption, 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;
Regulatory or enforcement actions of government agencies in connection with our and our suppliers' manufacturing plants, products and advertising;
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, including additional store brand or branded competition;
Limited success of new product introductions, line extensions, advertising and marketing support and other 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;
Limited growth of our international sales, including as a result of export or import restrictions or tariffs;
General economic conditions, changing consumer trends, 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;
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 and change in priorities of the U.S. Presidential administration;
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 or disruptions to the information technology systems of our customers or suppliers;
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;
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 any 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.
ITEM 1. BUSINESS
Overview
Unless otherwise indicated by the context, all references in this Annual Report on Form 10-K to "we," "us," "our," the "Company" or "Prestige" refer to Prestige Consumer Healthcare Inc. and our subsidiaries. Prior to August 17, 2018, the Company's name was Prestige Brands Holdings, Inc. Reference to a year (e.g., "2025") refers to our fiscal year ended March 31 of that year.
We formed as a Delaware corporation in 1996 and 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, 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. Our ultimate success is dependent on several factors, including our ability to:
Develop and execute effective sales, advertising and marketing programs to maintain or grow our market share versus competitors over time;
Establish and maintain our internal and third-party manufacturing and distribution relationships to fulfill customer demands;
Develop innovative new products;
Continue to grow our presence in the United States and international markets through acquisitions and organic growth; and
Allocate capital effectively.
We have grown our product portfolio both organically and through acquisitions. We develop our existing brands by investing in new product lines, brand extensions and strong advertising support. Acquisitions of consumer health and personal care brands have also been an important part of our growth strategy. We pursue this growth following an acquisition through spending on advertising and marketing support, new sales and marketing strategies, improved packaging and formulations and innovative development of brand extensions.
We conduct our operations in two reportable segments: North American OTC Healthcare and International OTC Healthcare.
Our business, business model, competitive strengths and growth strategy face various risks that are described in Part I, Item 1A. "Risk Factors" of this Annual Report on Form 10-K.
The following summarizes the percent of our net revenues by segment during each of the past three fiscal years:
March 31,
2025
2024
2023
Segment:
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 %
For additional information concerning our business segments, please refer to Part II, Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations" and Note 18 to the Consolidated Financial Statements included elsewhere in this Annual Report on Form 10-K.
Major Brands and Market Position
Our major brands, set forth in the table below, have strong levels of consumer awareness and retail distribution across all major channels. These brands accounted for approximately 83.0%, 83.3% and 81.9% of our total revenues for 2025, 2024, and 2023, respectively.
Major Brands Product Group North American OTC Healthcare: (3)
Market
Position (1)Market Segment (2)Brand Information
BC and Goody's
Analgesics
#1
Analgesic Powders
Founded over 90 years ago, the BC and Goody's brands feature over-the-counter, fast-acting pain relief powder
Boudreaux's
Dermatologicals
#3
Baby Ointments
Products include various diaper rash treatments
Butt Paste
and skin protectants manufactured with high-
quality ingredients
Chloraseptic
Cough & Cold
#1
Sore Throat Liquids
Products include sprays and lozenges to relieve
and Lozenges
sore throats and mouth pain
(Medicated)
Clear Eyes
Eye & Ear Care
#2
Redness Relief
Effective line of eye drops that provide soothing
comfort and multi-symptom relief from redness,
dryness and itchiness
Compound W
Dermatologicals
#1
Wart Removal
Provides safe and effective at-home removal of
common and plantar warts
Debrox
Eye & Ear Care
#1
Ear Wax Removal
Provides a safe and gentle way to remove excess
ear wax or water from ear canal
DenTek
Oral Care
#4
PEG Oral Care
Products include dental guards, floss picks,
interdental brushes, dental repair and kits and
tongue cleaners
Dramamine
Gastrointestinal
#1
Motion Sickness
Includes original, less drowsy, non-drowsy and
Relief
kids formulas
Fleet
Gastrointestinal
#1
Adult Enemas and
Founded in 1869, products include enemas and
Suppositories
other laxative products
Gaviscon
Gastrointestinal
#1
Upset Stomach
Creates a protective foam barrier to help block
Remedies
stomach acid from splashing up into the
esophagus
Luden's
Cough & Cold
#3
Cough Drops
Cough drop brand that is over 130 years old and
(Non-Medicated)
includes a variety of flavors
Monistat
Women's Health
#1
Vaginal Anti-Fungal
Provides fast relief for yeast infections and is
available in several different doses
Nix
Dermatologicals
#1
Lice and Parasite
Effective and safe lice and super lice treatments
Treatments
Summer's Eve
Women's Health
#1
Feminine Hygiene
Offers a variety of feminine care products
including washes, cloths and sprays
TheraTears
Eye & Ear Care
#3
Dry Eye Relief
Doctor created and recommended brand for dry
eye relief
International OTC Healthcare:
Fess
Cough & Cold
#1
Nasal Saline Sprays
Helps relieve nasal and sinus congestion due to
and Washes
allergy, hay fever, colds and flu
Hydralyte
Gastrointestinal
#1
Oral Rehydration
Relieves symptoms of dehydration and helps
replace water and electrolytes lost due to
vomiting, diarrhea, heavy sweating, vigorous
exercise and occasional hangovers
We have prepared the information included in this Annual Report on Form 10-K with regard to the market position for our brands based in part on data generated by Information Resources, Inc. ("IRI"), for the 52-week period ended March 23, 2025. International information was derived from several sources. Fess and Hydralyte data are for the Australian market.
"Market segment" is defined by us and is either a standard IRI category or a segment within a standard IRI category and is based on our product offerings and the categories in which we compete.
Some brands in the North American OTC Healthcare segment are also sold in the International OTC Healthcare segment.
Our products are sold through multiple channels, including mass merchandisers, drug, food, dollar, convenience, club and ecommerce stores, which reduces our exposure to any single distribution channel.
Market Position
During 2025, approximately 61.5% of our total revenues were from major brands with a number one market position, compared with approximately 58.6% and 58.1% of total revenues during 2024 and 2023, respectively. In 2025, these brands included BC and Goody's, Chloraseptic, Compound W, Debrox, Dramamine, Fess, Fleet, Gaviscon, Hydralyte, Monistat, Nix and Summer's Eve.
Competitive Strengths and Growth Strategy
We believe that our product portfolio is positioned for long-term growth based on the following factors:
Diversified Portfolio of Well-Recognized and Established Consumer Brands
We own and market a diverse portfolio of well-recognized consumer brands, some of which were established over 100 years ago. Our diverse portfolio of products provides us with multiple sources of growth and minimizes our reliance on any one product or category. We provide significant marketing support to our portfolio, which is designed to enhance our sales growth and our long-term profitability across our major brands and other significant brands.
Strong Competitor in Attractive Categories
We compete in product categories that address recurring consumer needs. We believe we are well positioned in these categories due to the long history and consumer awareness of our brands, our strong market positions and our low-cost operating model. The markets in which we sell our products, however, are highly competitive and include numerous national and global manufacturers, distributors, marketers and retailers.
Proven Ability to Develop and Introduce New Products
We focus our marketing and product development efforts on the identification of under-served consumer needs, the design of products that directly address those needs and the ability to extend our highly recognizable brand names to other products. One of our strategies is to broaden the categories in which we participate and increase our market share within those categories through ongoing product innovation. As an example of this philosophy, in 2025, we launched a number of new products, including Summer's Eve Whole Body Deodorant Creams in three fragrances, Goody's Plus - Headache Pain + Mental Alertness and Dramamine Advanced Herbals For Kids. In 2024, we launched Summer's Eve Ultimate Odor Protection line, Monistat's Maintain Boric Acid Suppositories, Clear Eyes Nighttime Restoring Drops and Dentek Gum Health Advanced Cleaning kit. While there is always a risk that sales of our existing products may be reduced by our new product introductions, our goal is to grow the overall sales of our brands.
Investments in Advertising and Marketing
We invest in advertising and marketing to drive the growth of our brands. Our marketing strategy is focused primarily on consumer-oriented initiatives that target consumers via mass media, digital marketing, in-store programming and coupons. While the absolute level of marketing expenditures differs by brand and category, we have often increased the amount of investment in our brands after acquiring them.
Increasing Distribution Across Multiple Channels
Our broad distribution base attempts to ensure that our products are well positioned across all available channels and that we are able to participate in changing consumer retail trends. In an effort to ensure continued sales growth, we continue to focus on expanding our strategy of direct sales while reducing our reliance on brokers for our customers.
Pursuing Strategic Acquisitions
Acquisitions are a part of our overall strategy for growing revenue. We have a history of growth through acquisitions. In 2025, we acquired additional rights to Hydralyte intellectual property in all remaining jurisdictions with the exception of the United States. In 2022, we acquired the consumer health business assets from Akorn Operating Company LLC. While we believe that there will continue to be a pipeline of acquisition candidates for us to investigate, the strategic fit, availability of capital and relative cost are of the utmost importance in our decision to pursue such opportunities. We believe our business model allows us to integrate acquisitions in an efficient manner, while also providing opportunities to realize significant cost savings.
Growing Our International Business
International sales beyond the borders of North America represented 15.6%, 14.8% and 13.7% of total revenues in 2025, 2024, and 2023, respectively. We have designed and developed both products and packaging for specific international markets and expect that our international revenues as a proportion of our total revenues will continue to grow over the long-term.
We seek to expand the number of brands sold through our existing international distribution network and continue to identify additional distribution partners for further expansion of our brands into other international markets.
Efficient Operating Model
To gain operating efficiencies, we oversee the production planning and quality control aspects of the manufacturing, warehousing and distribution of our products, while we primarily outsource the operating elements of these functions to well-established third-party providers. This approach allows us to benefit from their core competencies and maintain a highly variable cost structure with low overhead, limited working capital requirements and minimal investment in capital expenditures.
Management Team with Proven Ability to Acquire, Integrate and Grow Brands
Our business has grown through acquisition and expansion of the many brands we have purchased as a result of the efforts of our experienced management team. Our management team has significant experience in consumer product marketing, sales, legal and regulatory compliance, product development and customer service. We rely on experienced personnel to bear the substantial responsibility of brand management and to effectuate our growth strategy.
Marketing and Sales
Our marketing objective is to increase sales and market share by developing innovative new products and line extensions and executing creative and cost-effective advertising and marketing programs. Our marketing strategy is further developed by the acquisition and renovation of established consumer brands that possess what we believe to be significant brand value and unrealized potential and to grow categories with existing brands where we have leading market positions. Our brand-building process involves the evaluation of the existing brand name, the development and introduction of innovative new products and the execution of marketing support programs. Brand priorities will vary from year-to-year. Recognizing that financial resources are limited, we allocate our resources to focus on our strategic brands with the most impactful, consumer-relevant initiatives that we believe have the greatest opportunities for growth and financial success.
Customers
Our senior management team and dedicated sales force strive to maintain long-standing relationships with our top customers. We also contract with third-party sales management enterprises that interface directly with many of our remaining customers and report directly to members of our sales management team. In an effort to ensure continued sales growth, we continue to focus on expanding our reliance on direct sales while reducing our reliance on brokers.
We enjoy broad distribution across each of the major retail channels, including mass merchandisers, drug, food, dollar, convenience, club stores and e-commerce channels. The following table sets forth the percentage of gross revenues for our
U.S. customers across our six major distribution channels during each of the past three years ended March 31:
Percentage of Gross Revenues (1)
Channel of Distribution
2025
2024
2023
Mass
34.2
34.6
33.6
Drug
20.7
22.8
25.6
Food
12.9
12.9
14.3
Dollar
6.0
6.6
6.5
Convenience
3.1
3.2
3.4
Club
1.0
1.2
1.3
Other (2)
22.1
18.7
15.3
Includes estimates for some of our wholesale customers that service more than one distribution channel
Includes e-commerce retailers such as Amazon
Due to the diversity of our product lines, we believe that each of these channels is important to our business, and we continue to seek opportunities for growth in each channel.
We believe that our emphasis on strong customer relationships, speed and flexibility and leading sales technology capabilities, combined with consistent marketing support programs and ongoing product innovation, will continue to maximize our competitiveness in the increasingly complex retail environment.
During 2025, 2024 and 2023, Walmart accounted for approximately 19%, 20% and 20%, respectively, of our gross revenues. During 2025 and 2024, Amazon accounted for approximately 14% and 11%, respectively, of our gross revenues. We expect that for future periods, our top ten customers, including Walmart and Amazon, will in the aggregate continue to account for a large portion of our sales.
Outsourcing and Manufacturing
In order to maximize our competitiveness and efficiently allocate our resources, third-party manufacturers fulfill most of our manufacturing needs. We have found that contract manufacturing often maximizes our flexibility and responsiveness to industry and consumer trends while minimizing the need for capital expenditures. We select contract manufacturers based on their core competencies and our perception of the best overall value, including factors such as (i) depth of services, (ii) professionalism and integrity of the management team, (iii) manufacturing agility, quality and capacity, (iv) regulatory compliance and (v) competitive pricing. We require each of our suppliers, most of whom are based in the United States and Canada, to comply with our Supplier Code of Conduct, which sets forth the basic and minimal expectations that all suppliers must meet in order to do business with us. We also conduct thorough reviews of each potential manufacturer's facilities, quality standards, capacity and financial stability. We generally purchase only finished products from our manufacturers.
Our primary contract manufacturers provide comprehensive services from product development through the manufacturing of finished goods. This approach results in minimal capital expenditures and maximizes our cash flow, which allows us to reinvest to support our marketing initiatives, fund brand acquisitions and repay outstanding indebtedness.
At March 31, 2025, we had relationships with 98 third-party manufacturers. Of those, we had long-term contracts with 16 manufacturers that produced items that accounted for approximately 58% of gross sales for 2025, compared to 26 manufacturers with long-term contracts that accounted for approximately 72% of gross sales in 2024. One of our suppliers, a privately owned pharmaceutical manufacturer with whom we have a long-term supply agreement, produced products that accounted for more than 10% of our gross revenues during 2025, 2024 and 2023. During 2025, 2024 and 2023, this manufacturer accounted for approximately 21%, 20% and 20%, respectively, of our gross revenues, while we accounted for a significant portion of their gross revenues over that time period. No other single third-party supplier produces products that account for 10% or more of our gross revenues. Our long-term supply and manufacturing agreements explicitly outline the manufacturers' obligations and product specifications with respect to the brand or brands being produced, including allocation of product liability risk. Pursuant to the terms of these agreements, the purchase price of products is subject to change due to fluctuations in input costs such as raw material, packaging components and labor costs.
Some of our other products are manufactured on a purchase order basis, which is generally based on batch sizes and results in no long-term obligations or commitments. As a result, these manufacturers could cease manufacturing our products at any time and for any reason or initiate arbitrary and costly price increases. Although we are continually in the process of negotiating long-term contracts with certain key manufacturers, we may not be able to reach a timely agreement. To the extent we rely on purchase orders, rather than supply and manufacturing agreements, to govern our commercial relationships with suppliers, we typically rely on implied warranties with respect to the products manufactured, and we do not have specifically negotiated allocation of risk with these third-party manufacturers. With regard to our products both manufactured under long-term agreements and purchase orders, in periods of high inflation we have experienced and may continue to experience frequent increases in prices of products due to fluctuations in input costs such as raw material, packaging components and labor costs.
In addition to relying on contract manufacturers, we operate a manufacturing facility in Lynchburg, Virginia, which manufactures products representing approximately 15% of our gross revenues.
We believe that most of the raw materials and packaging components used to produce our products at our manufacturing facilities and at our third-party manufacturing facilities are generally available through multiple sources acquired on both a contract and purchase order basis but are also subject to inflationary pressure, production delays and shortages from time to time.
Warehousing and Distribution
We manage product distribution in the continental United States through one facility, which is owned and operated by a third-party provider, since fiscal 2020. This facility provides warehouse services including storage, handling and shipping, as well as transportation services, with respect to our full line of products, including (i) complete management services, (ii) carrier claims administration, (iii) proof of delivery, (iv) procurement, (v) report generation and (vi) freight payment services.
Competition
The business of selling brand name consumer products in the OTC health and personal care market is highly competitive. This market includes numerous national and global manufacturers, distributors, marketers and retailers that actively compete for consumers' business both in the United States and abroad. In addition, like most companies that market products in this category, we are experiencing continued competition from "private label" products introduced by major retail chains. While we believe that our branded products provide superior quality and benefits, we are unable to predict the extent to which consumers will purchase "private label" products as an alternative to branded products, although we expect that this could increase during an economic downturn or periods of high inflation.
Our branded competitors include, among others, AbbVie Inc., Alcon, Bausch + Lomb, Bayer AG, Combe, Compass Diversified, Haleon plc, Kenvue, Mondelez International, Reckitt Benckiser Group plc, Sanofi, Scholl's Wellness Company, Sunstar Group, The Procter & Gamble Company and Unilever.
We compete on the basis of numerous factors, including brand recognition, product quality, performance, value to customers, price and product availability at the retail and e-commerce level. Advertising, marketing, merchandising and packaging, the timing of new product introductions and line extensions also have a significant impact on customers' buying decisions and, as a result, on our sales. The structure and quality of our sales force, as well as sell-through of our products, affect in-store and online positioning, wall display space and inventory levels for retail sale. Our markets are also highly sensitive to the introduction of new products, which may rapidly capture a significant share of the market.
Many of the competitors noted above are larger and have substantially greater research and development and financial resources than we do, and may therefore have the ability to spend more aggressively and consistently on research and development, advertising and marketing, and may be able to respond more effectively to changing business and economic conditions. See "Competitive Strengths and Growth Strategy" above for additional information regarding our competitive strengths and Part I, Item 1A. "Risk Factors" below for additional information regarding competition in our industry.
Regulation
Product Regulation
The formulation, manufacturing, packaging, labeling, distribution, importation, sale and storage of our products are subject to extensive regulation by various U.S. federal agencies, (including the U.S. Food and Drug Administration ("FDA"), the Federal Trade Commission ("FTC"), the Consumer Product Safety Commission ("CPSC") and the Environmental Protection Agency ("EPA")) and various agencies of the states, localities and foreign countries in which our products are manufactured, marketed, distributed and sold. Our Regulatory and Quality team is guided by a senior member of management and staffed by individuals with appropriate quality and regulatory experience. Our Regulatory, Quality and Operations teams work closely with our third-party manufacturers and our own manufacturing operations on quality-related matters. We monitor our own manufacturing operations and our third-party manufacturers' compliance with FDA and relevant foreign regulations and perform periodic audits to ensure compliance. This internal audit process is designed to ensure that our manufacturing processes and products are of high quality and in compliance with known regulatory and quality requirements. If the FDA or a foreign governmental authority chooses to inspect a particular third-party manufacturing facility, we require the third-party manufacturer to notify us immediately and update us on the progress of the inspection as it proceeds. If we or our manufacturers fail to comply with applicable regulations, we could be issued a list of deficiencies, which could lead to significant claims or penalties or require us
to recall or discontinue the sale and/or manufacturing of the non-compliant products.
Most of our U.S. OTC drug products are regulated pursuant to the FDA's monograph system, initially established in 1972. The monograph system establishes conditions, such as active ingredients, uses or indications, doses, routes of administration, labeling and testing, under which certain broad categories of U.S. OTC drug products are generally recognized as safe and effective for their intended use. The Coronavirus Aid, Relief, and Economic Security ("CARES") Act, signed into law on March 27, 2020, and the Over-the-Counter Monograph Safety, Innovation, and Reform Act have revised this OTC monograph framework. Products that comply with monograph requirements do not require pre-market approval from the FDA. OTC drug products fall under the requirements of the Federal Food Drug and Cosmetic Act ("FDC Act"), as amended by the CARES Act,
which includes the Over-the-Counter Monograph Safety, Innovation, and Reform Act. These new authorities authorize FDA to add, remove or change monographs, and therefore, OTC monograph requirements are expected to be delineated further by the FDA in the next few years.
Certain of our U.S. OTC drug products require the submission of a New Drug Application ("NDA") or Abbreviated New Drug Application ("ANDA"). These specific OTC drug products cannot be marketed until FDA approves the NDA or ANDA, and,
after approval, are manufactured and labeled in accordance with an FDA-approved submission. These products are subject to reporting requirements as set forth in FDA regulations.
Certain of our U.S. OTC Healthcare products are medical devices regulated by the FDA through one of three classes of medical devices: Class I devices are low risk devices, Class II devices are intermediate risk devices and Class III are high risk devices. The class of the device determines, among other things, the type of pre-market submission/application required by FDA to market the device, and this system may involve pre-market clearance or approval. During the review process, the FDA makes an affirmative determination as to the safety and efficacy of the device, as well as the sufficiency of the label indications, directions, cautions and warnings for the medical device in question.
Certain of our products are considered cosmetics regulated by the FDA through the FDC Act and the Fair Packaging and Labeling Act. The FDA does not require pre-market clearance for cosmetics, but manufacturers must ensure the products are not adulterated or misbranded. Furthermore, Congress passed the Modernization of Cosmetics Regulation Act of 2022 ("MoCRA") in December 2023, which expands FDA authority to regulate cosmetics. MoCRA provides new FDA authorities related to records access, mandatory recalls, adverse event reporting, facility registration, product listing and safety substantiation of products.
In accordance with the FDC Act and FDA regulations, we and our third-party manufacturers of U.S. products must also comply with the FDA's current Good Manufacturing Practices ("cGMPs"). The FDA inspects our facilities and those of our third-party manufacturers periodically to determine that both we and our third-party manufacturers are complying with cGMPs. Even where we are not performing manufacturing activities in our own facilities, cGMP requirements include oversight responsibilities over contract manufacturers.
Our dietary supplement products are governed by the Dietary Supplement Health and Education Act of 1994 ("DSHEA"), which defines and regulates dietary supplements. Under DSHEA, FDA published a final rule that requires persons who manufacture, package, label or hold a dietary supplement to establish and follow cGMPs.
A number of our products are also regulated by the CPSC under the Federal Hazardous Substances Act ("FHSA"), the Poison Prevention Packaging Act of 1970 (the "PPPA") and the Consumer Products Safety Improvement Act of 2008 ("CPSIA"). In addition, a small number of our products that are subject to regulation under the PPPA can only be legally marketed if they are dispensed in child-resistant packaging or labeled for use in households where there are no children. The CPSIA requires us to make available to our customers certificates stating that we are in compliance with any applicable regulation administered by the CPSC.
A few of our products are considered pesticides under the Federal Insecticide, Fungicide, and Rodenticide Act ("FIFRA"). Generally speaking, any substance intended for preventing, destroying, repelling, or mitigating any pest is considered to be a pesticide under FIFRA. Pesticides under FIFRA are required to be registered with the EPA and contain certain disclosures on the product labels. In addition, the contract manufacturers from which we source these products must be registered with the EPA. Our EPA registered products are also subject to state regulations and the rules and regulations of the various jurisdictions where these products are sold. We have a single product that is considered a minimum risk pesticide that is exempt from EPA registration, and it is only required to be registered with the states and Washington D.C.
Our Australian, Canadian and other international businesses are also subject to product regulations by local regulatory authorities in the various countries where these businesses operate, including regulations regarding manufacturing, labeling, marketing, distribution, sale and storage. In Australia, the Therapeutic Goods Administration ("TGA") regulates OTC medicines to ensure their safety, quality, and efficacy. OTC medicines are evaluated before they are sold to the public, and they must be registered on the Australian Register of Therapeutic Goods ("ARTG") before being sold.
Environmental, Health and Safety Regulations
Our operations are subject to U.S. federal, state and local and foreign laws, rules and regulations relating to environmental concerns, including air emissions, wastewater discharges, solid and hazardous waste management activities and the safety of our employees. We endeavor to take actions necessary to comply with such regulations, including periodic environmental and health and safety audits of our facilities. The audits, conducted by independent firms with expertise in environmental, health and safety compliance, include site visits as well as a review of documentary information, to determine compliance with such
U.S. federal, state and local and foreign laws, rules and regulations. We seek to ensure responsible sourcing of our products and to improve our suppliers' environmental, labor, health and safety and ethical practices through our Supplier Code of Conduct. We seek to minimize our resource footprint at our locations with a focus on managing waste, water and energy consumption.
Other Regulations
We are also subject to a variety of other regulations in the U.S. and various foreign markets, including regulations pertaining to import/export, antitrust and pharmacovigilance issues. To the extent we decide to commence or expand operations in additional countries, we may be required to obtain an approval, license or certification from the country's ministry of health or comparable agency. We must also comply with product labeling and packaging regulations that may vary from country to country. In addition, we are subject to FTC and state regulations, as well as foreign regulations, relating to our product claims and advertising.
Impact of Regulations
Compliance with these various regulations has an impact on capital expenditures, earnings and our competitive position. Government regulations in both our U.S. and international markets can delay or prevent the introduction of some of our products. Our failure to comply with these regulations can also result in recalls or a product being removed from sale in a particular market, either temporarily or permanently. The adoption of new regulations or changes in the interpretation of existing governmental regulation has and in the future could also require reformulation of certain products to meet new standards, recalls or discontinuance of certain products not able to be reformulated, additional record-keeping requirements, increased documentation of the properties of certain products, additional or different labeling, additional scientific substantiation, expanded adverse event reporting or other new requirements. Those changes have and will continue to require capital investments in facilities and equipment to meet the requirements and require us to incur additional compliance costs, as well as additional product development, material and production costs. If we fail to comply with these regulations, we could be subject to enforcement actions and the imposition of penalties.
Intellectual Property
We own a number of trademark registrations and applications in the United States, Canada and other foreign countries. The following are some of the most significant registered trademarks we own in the United States and/or Canada: BC, Boudreaux's Butt Paste, Chloraseptic, Clear Eyes, Compound W, Debrox, DenTek, Dramamine, Fleet, Gaviscon, Goody's, Luden's, Monistat, Nix, Summer's Eve and TheraTears.
Our trademarks and tradenames are how we convey that the products we sell are "brand name" products. Our ownership of these trademarks and tradenames is very important to our business, as it allows us to compete based on the value and goodwill associated with these marks. Additionally, we own or license patents on innovative and proprietary technology. The patents evidence the unique nature of our products, provide us with exclusivity and afford us protection from the encroachment of others. None of the patents that we own or license, however, is material to us on a consolidated basis. Enforcing our rights, or the rights of any of our licensors, represented by these trademarks, tradenames and patents is critical to our business and may require significant expense. If we are not able to effectively enforce our rights, others may be able to dilute our trademarks, tradenames and patents and diminish the value associated with our brands and technologies.
While our trademarks and tradenames generally have indefinite lives if well maintained, our patents have defined lives expiring between 2025 and 2046. We do not own all of the intellectual property rights applicable to our products. In those cases where our third-party manufacturers own patents that protect our products, we are dependent on them as a source of supply for our products. In addition, we rely on our suppliers for their enforcement of their intellectual property rights against infringing products.
Seasonality
Our business is generally not seasonal due to our well-diversified portfolio of brands. Advertising and marketing spending to support brands can be high during a specific season, such as summer selling for Clear Eyes and Compound W and the early winter to influence sales of Chloraseptic, Little Remedies and Luden's. Given our agility in advertising and marketing support and product diversity, the quarterly timing of this advertising and marketing support and impact to earnings is difficult to predict.
Economic Environment
There has been economic uncertainty in the United States and globally due to several factors, including evolving fiscal policy, global supply chain constraints, changes in interest rates, a high inflationary environment, geopolitical events and evolving U.S. and international 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, and could see changes in retailer purchasing patterns due to the uncertain economic environment.
The volatile environment has impacted the supply of labor and raw materials and exacerbated rising input costs. We have and may continue to experience shortages, delays and backorders for certain ingredients and products, difficulty scheduling
shipping for our products, as well as price increases from many of our suppliers for both shipping and product costs. Certain of 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, tariffs, 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.
Human Capital Management
Our Culture
Our mission is to deliver high-quality consumer health and personal care products that improve and enrich the lives of our consumers. Our Company culture is founded on the principles of Leadership, Trust, Change and Execution. Of those principles, Trust is among the most important: trust in the safety and performance of our products, the integrity of our manufacturing and marketing processes, the character of our people and the benefits to our consumers and society. We also reward employees who take ownership and embody our principle of Leadership with projects that positively impact our business, community and stakeholders.
We take pride in the wide range of backgrounds, races, nationalities, personalities, ideas and talents that make up our organization. We continue to build on our long commitment of equal employment opportunity and anti-discrimination by supporting a culture where no employee is excluded based on race, age, gender identification, sexual orientation or other traits and employees are rewarded based on merit and skill. We are committed to providing a workplace where diverse attitudes, skills and talents are welcomed and celebrated. We strive to create and sustain an environment where all employees are valued, heard and inspired to achieve their full potential. We continually review our Company employee hiring, development and workplace practices to help us adhere to these principles.
We also believe in working productively with one another and with our stakeholders to ensure long-term success. Some of the ways we encourage this is by:
Recruiting: With employees across the U.S. and the world, we understand the importance of hiring the best available and qualified personnel without regard to age, gender, race, gender identification, and sexual orientation, and/or other traits and use advancement practices that support talent development at all levels of the organization.
Monitoring: We have a strict Code of Conduct and Ethics that fosters a work environment that is free from intimidation, harassment and violence. Our team employs a process to investigate and resolve any potential conduct or ethics concern. We use a third-party reporting avenue for employees to exercise any such concern with anonymity and confidentiality. Raising a concern honestly or participating in an investigation cannot be the basis for any adverse employment action, including termination, suspension, loss of benefits, threats, harassment or discrimination.
Our Employees
As of March 31, 2025, we had approximately 600 global employees. Approximately 82% of our workforce operates in the United States, 16% in Australia and Asia and 2% in Europe. 59% of our employees are salaried and 41% are paid hourly wages. We employ only a few part-time employees. Our workforce is 55% female and 45% male. None of our employees are a party to a collective bargaining agreement. Management believes that our relations with employees are good.
Strategic Development and Empowerment
We encourage all employees to achieve their full potential by participating in our mentorship opportunities, career development programs and Company-provided learning tools. We provide development opportunities to our employees worldwide. We employ a performance management process under which all employees receive reviews that not only assess performance but also identify specific developmental opportunities and learning goals for the individual. By empowering our employees to develop and enhance their skills through enterprise-wide tools, videos and coursework that focus on continuous learning and professional and personal development, we encourage all of our employees to reach their full potential, which in turn helps our organization succeed.
Health and Safety
We are committed to providing a safe work environment for our employees and require employees to share this concern by abiding to rigorous safety measures. To enable this and assure that the message of health, safety and well-being are part of our
work culture, we conduct regular training programs at our production facilities. We seek to comply with all U.S. federal, state and/or local occupational safety and health standards and report our safety records in accordance with the Occupational Safety and Health Administration ("OSHA"). We also seek to comply with the applicable safety and health standards in all other countries in which we have employees, including Australia, the United Kingdom and Singapore.
Our Community
We seek to be a responsible corporate citizen, and we resolve to live by our principles as we continue to grow our global business. We seek out opportunities to be active members of our communities to enhance the lives of our neighbors and consumers. We encourage employees to become involved in their respective communities, and we enable office locations the freedom to develop programs that are appropriate to their community needs. For example, our corporate headquarters office location traditionally has an annual "Day of Giving" where employees spend a day giving back to the nearby communities, while other office locations support their communities through various volunteerism events.
Further information surrounding our Company's human capital development and sustainability efforts are available on our Company's website at https://www.prestigebrands.com/about-us/corporate-responsibility.
Available Information
Our Internet address is https://www.prestigebrands.com. We make available free of charge on or through our Internet website our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports, as well as the Proxy Statement for our annual stockholders' meetings, as soon as reasonably practicable after we electronically file such material with, or furnish it to, the Securities and Exchange Commission (the "SEC"). Information on our Internet website does not constitute a part of this Annual Report on Form 10-K and is not incorporated herein by reference, including through any general statement incorporating by reference this Annual Report on Form 10-K into any filing under the Securities Act of 1933, as amended (the "Securities Act"), or under the Securities Exchange Act of 1934, as amended (the "Exchange Act").
We have adopted a Code of Conduct and Ethics Policy, Code of Ethics for Senior Financial Employees, Policy and Procedures for Complaints Regarding Accounting, Internal Controls and Auditing Matters, Corporate Governance Guidelines and Charters for our Audit, Compensation and Nominating and Corporate Governance Committees, as well as a Related Persons Transaction Policy, Stock Ownership Guidelines and a Clawback Policy. We will provide to any person without charge, upon request, a copy of the foregoing materials. Any requests for these documents from us should be made in writing to:
Prestige Consumer Healthcare Inc. 660 White Plains Road
Tarrytown, New York 10591 Attention: Corporate Secretary
We also make copies of the following policies available on our Internet site at https://ir.prestigebrands.com/corporate-governance/documents:
Corporate Governance Guidelines
Supplier Code of Conduct
Related Persons Transaction Policy
Code of Conduct and Ethics
Code of Ethics for Senior Financial Employees
Clawback Policy
Insider Trading Policy
We intend to disclose future amendments to these documents, policies and guidelines and any waivers of these documents, policies and guidelines, on our Internet website and/or through the filing of a Current Report on Form 8-K with the SEC, to the extent required under the Exchange Act.
ITEM 1A. RISK FACTORS
Risks Related to our Business and Industry
We primarily depend on third-party manufacturers to produce the products we sell. If these third-party manufacturers are unable to produce our products in sufficient quantities to meet customer demand, our business and results of operations may be materially adversely impacted. In addition, if we are unable to maintain these manufacturing relationships or are unable to successfully transfer manufacturing to another third-party or our own manufacturing facility, we may be unable to meet customer demand, and our business and sales could suffer.
Many of our products are produced by a limited number of third-party manufacturers. Our ability to retain our current manufacturing relationships or engage in and successfully transition to new relationships or to our own manufacturing facility is critical to our ability to deliver quality products to our customers in a timely manner. Certain of the Company's 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 in the fourth quarter of fiscal 2024 and fiscal 2025, and we expect further shortages may have a negative impact on our sales. In some cases, we have identified additional third-party manufacturing to supply us with quantities of the product for which we are experiencing shortages, but these additions may not manufacture product in time to fully supplement the long-term forecasted demand.
In the event that our primary third-party manufacturers are unable or unwilling to ship products to us in a timely manner, we would have to rely on secondary manufacturing relationships or, to the extent unavailable, identify and qualify new manufacturing relationships. Because of the unique manufacturing requirements of certain products, the Company may be unable to timely identify or qualify new suppliers or at the quantities, quality and price levels needed. In addition, identifying alternative manufacturers without adequate lead times may involve additional manufacturing expense or delay in production. In some instances, we may seek to transfer the manufacture of certain products to our own facilities, which may result in additional manufacturing expense, delay in production, additional regulatory requirements and other disruptions to our business. In general, the consequences of not securing adequate, high quality and timely supplies of merchandise has negatively impacted inventory levels, which has adversely impacted our sales, could damage our reputation and result in lost customers, and could have a material adverse effect on our financial condition and results of operations if such shortages continue.
Certain of our manufacturers who produce products for us have experienced cash flow shortages, and we have provided both prepayments and short term loans to these suppliers to ensure continuous supply. Most recently, we extended short term loans to a supplier that produces cough/cold and ear care products, which total $7.8 million in the aggregate as of March 31, 2025, to support their continued operation. If they or any other suppliers cease operations or are otherwise unable to continue to supply products to us, or to repay their indebtedness, our results of operations and financial condition would be adversely impacted.
At March 31, 2025, we had relationships with 98 third-party manufacturers. Of those, we had long-term contracts with 16 manufacturers that produced items that accounted for approximately 58% of gross sales for 2025, compared to 26 manufacturers with long-term contracts that accounted for approximately 72% of gross sales in 2024. One of our suppliers, a privately owned pharmaceutical manufacturer with whom we have a long-term supply agreement, produced products that accounted for more than 10% of our gross revenues during 2025, 2024 and 2023. During 2025, 2024 and 2023, this manufacturer accounted for approximately 21%, 20% and 20%, respectively, of our gross revenues while we accounted for a significant portion of their gross revenues over that time period. No other single third-party supplier produces products that account for 10% or more of our gross revenues. The fact that we do not have long-term contracts with certain manufacturers also means that they could cease manufacturing our products at any time and for any reason or initiate costly price increases,
which could have a material adverse effect on our business and results of operations. Although we are continually in the process of negotiating long-term contracts with certain key manufacturers, we may not be able to reach a timely agreement on acceptable terms, which could have a material adverse effect on our business and results of operations. In addition, even if we do enter into long-term contracts with certain manufacturers, our manufacturers may increase prices under the terms of our existing contracts if they experience increases in input costs, which could have a material adverse impact on our results of operations and financial condition.
Price increases for raw materials, packaging, labor, energy and transportation costs, and other manufacturer, logistics provider or distributor demands, could continue to have an adverse impact on our margins.
The costs to manufacture and distribute our products are subject to fluctuation based on a variety of factors. Volatility and increases in commodity raw material (e.g. resins) and packaging component prices, labor, energy and transportation costs, and
other input costs, including as a result of supply chain issues, shortages or tariffs, could significantly affect our profit margin and could have a material adverse impact on our financial condition and results of operations if our raw material suppliers, third-party manufacturers, logistics providers or distributors pass along those costs to us. Certain product categories have been impacted by higher inflation due to, among other things, the continuing impacts of labor shortages, global supply chain disruptions and the uncertain economic and geopolitical environment, including tariffs, which has negatively impacted our gross margin. Although the impact of these increased costs has not had a material adverse effect on our results of operations or financial condition to date, further input cost increases could have such a material impact.
In this economic environment, the manufacturers we use have increased, and may continue to increase, the cost to us of many of the products we purchase, which has impacted and could continue to adversely affect our margins in the event we are unable to pass along these increased costs to our customers or identify and qualify new manufacturers. If we are unable to increase the price for our products to our customers or achieve cost savings in a rising cost environment, any such cost increases would likely further reduce our gross margins and could have a material adverse effect on our financial condition and results of operations. If we increase the price of our products in order to maintain our current gross margins for our products, the increase may adversely affect demand for, and sales of, our products, which could have a material adverse effect on our financial condition and results of operations. We believe that certain of our products could have difficulty absorbing further near-term price increases without potentially impacting market share, which would have a related adverse impact on our revenues.
Volatility in or worsening of economic conditions from high inflation, economic policy, tariffs, increased unemployment, geopolitical conflicts, public health issues and other factors beyond our control could reduce consumer spending, which could adversely impact demand for our products and our results of operations and financial condition.
Our financial performance depends on the stability of conditions that impact consumer spending. Adverse conditions or volatility in financial markets or the economy, including high interest rates, inflation from rising costs, tariffs, unemployment, bank failures, reductions in government assistance and the lack of consumer financing, could adversely impact consumer confidence and reduce disposable income, resulting in reduced consumer spending on our products. Existing volatility in the global economy, including from supply chain issues and rising costs, has not materially impacted consumer spending on our products, but further worsening of these conditions could have a material adverse impact on our results of operations and financial condition.
The high level of competition in our industry, much of which comes from competitors with greater resources, could adversely affect our business, financial condition and results of operations.
The business of selling brand name consumer products in the OTC health and personal care market is highly competitive. This market includes numerous manufacturers, distributors, marketers and retailers that actively compete for consumers' business both in the United States and abroad. Many of these competitors are larger and have substantially greater resources than we do, and they may therefore have the ability to spend more aggressively on research and development and advertising and marketing, and may be able to respond more effectively to changing business and economic conditions, including in connection with inflation or recessionary conditions.
Certain of our product lines that account for a large percentage of our sales have a smaller market share relative to our competitors. In some cases, we may have a number one market position but still have a relatively small share of the overall market. Alternatively, we may hold a number two market position but have a substantially smaller share of the market versus the number one competitor. See "Part I, Item 1. Business - Major Brands" of this Annual Report on Form 10-K for information regarding market share.
We compete for consumers' attention based on a number of factors, including brand recognition, product quality, performance, value to consumers, price and product availability at the retail level. Advertising, marketing, merchandising and packaging and the timing of new product introductions and line extensions also have a significant impact on consumer buying decisions and, as a result, on our market share and our sales. Our markets are highly sensitive to the introduction of new products, which may rapidly capture a significant share of the market. New product innovations by our competitors, or our failure to develop new products, the failure of a new product launch by the Company, or the obsolescence of one or more of our products, could have a material adverse effect on our business, financial condition and results of operations. If our advertising, marketing and promotional programs are not effective, our sales may decline.
The structure and quality of our sales force, as well as sell-through of our products, affect in-store and our e-commerce product position, wall display space and inventory levels for retail sale. If we are unable to maintain our current distribution network, product offerings for retail sale, inventory levels and in-store and online positioning of our products, our sales and operating results could be adversely affected.
In addition, competitors may attempt to gain market share by offering products at prices at or below those typically offered by us. The introduction or expansion of store brand products that compete with our products at a lower price point has and could impact our sales and results of operations. This could be exacerbated by rising costs, including tariffs, and other economic conditions that shift consumer demand to lower-priced products, as well as supply chain issues that result in reduced availability for our products. Competitive pricing may require us to reduce prices, which may result in lost revenue or a reduction of our profit margins. Future price adjustments by our competitors or our inability to react with price adjustments of our own could result in a loss of market share, which could have a material adverse effect on our financial condition and results of operations.
We depend on a limited number of customers with whom we have no long-term agreements for a large portion of our gross revenues, and the loss of one or more of these customers or changes in their strategies and policies could reduce our gross revenues and have a material adverse effect on our financial condition and results of operations.
During 2025, Walmart and Amazon, which accounted for approximately 19% and 14%, respectively, of our gross revenues, were our only customers that accounted for more than 10% of our gross revenues. We expect that for future periods, our top ten customers, including Walmart and Amazon, in the aggregate, will continue to account for a large and potentially increasing portion of our sales. Many of our customers have sought to obtain lower pricing, better terms, additional trade spend, more strict logistics requirements or other changes to the customer-supplier relationship. If we are unable to effectively respond to the demands of our customers, these customers could reduce their purchases of our products and increase their purchases of products from competitors. Reductions in inventory by our customers, the loss of one or more of our top customers, including as a result of consolidation in the retail industry, or any significant decrease in sales to these customers based on changes in their strategies or policies, such as a reduction in the number of brands they carry, the amount of shelf space or positioning they dedicate to store brand products or to our particular products, or a significant reduction in our online positioning, could reduce our sales and have a material adverse effect on our financial condition and results of operations. In addition, many retailers have implemented inventory management strategies that include reductions in the amount of inventory they carry and related reductions in retail space and may continue such efforts in the future.
In addition, our business is based primarily upon individual sales orders. We typically do not enter into long-term contracts with our customers. Accordingly, our customers could cease buying products or reduce the number of items they buy from us at any time and for any reason. The fact that we do not have long-term contracts with our customers means that we have no recourse in the event a customer no longer wants to purchase products from us or reduces the number of items purchased. If a significant number of our smaller customers, or any of our significant customers, elect not to purchase products from us or materially reduce the quantity of products they purchase from us, our financial condition and results of operations could be materially adversely affected.
Disruption in our third-party distribution center or our manufacturing facilities may prevent us from meeting customer demand, and our sales and financial condition may materially suffer as a result.
Our product distribution in the United States is managed by a third-party through one primary distribution center in Clayton, Indiana. We also operate a manufacturing facility in Lynchburg, Virginia, which manufactures products representing approximately 15% of our gross revenues. A natural disaster, such as tornado, earthquake, flood, or fire at our distribution center or our own or a third-party manufacturing facility could damage our inventory and/or materially impair our ability to distribute our products to customers in a timely manner or at a reasonable cost. In addition, a serious disruption caused by performance or contractual issues with our third-party distribution manager, or labor shortages or contagious disease outbreaks or other public health emergencies at our distribution center or manufacturing facilities could also materially impact our product distribution. Any disruption could result in increased costs, expense and/or shipping times, and could harm our reputation and cause us to incur customer fees and penalties. We could also incur significantly higher costs and experience longer lead times should we be required to replace our distribution center, the third-party distribution manager or our manufacturing facilities. As a result, any serious disruption could have a material adverse effect on our business, financial condition and results of operations.
Any future outbreak of other highly infectious diseases or public health emergencies could have a material adverse impact on our results of operations and financial condition.
Our sales are impacted by consumer spending levels, the availability of our products at retail stores or for online purchase and our ability to manufacture and distribute products to our customers and consumers in an effective and efficient manner. Our sales are also impacted by demand for our products depending on consumers' activities, lifestyles and financial resources.
We could experience adverse impacts from public health emergencies in a number of ways, including, but not limited to, the following:
Disclaimer
Prestige Consumer Healthcare Inc. published this content on July 04, 2025, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on July 04, 2025 at 11:29 UTC.