Prestige Consumer Healthcare Inc.

Previous wording

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.

Current wording

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.

Previous wording

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.

Current wording

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 of operations and liquidity will depend on future developments, which are highly uncertain and cannot be predicted, including global supply chain constraints, inflation, tariffs, global conflicts and trade actions/disputes. These effects could have a material adverse impact on our business, liquidity, capital resources and results of operations and those of the third parties on which we rely.

Previous wording

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.

Current wording

Numerous countries have agreed to a statement in support of the Organization for Economic Cooperation and Development ("OECD") model rules that propose a global minimum tax rate of 15%. Certain countries have enacted, or are in the process of enacting, legislation to address the global minimum tax. This legislation has not and is not expected to have a material impact on our Consolidated Financial Statements. As legislation becomes effective in more countries in which we do business, our taxes could increase and negatively impact our provision for income taxes. We continue to monitor pending legislation and implementation by countries and to evaluate the potential impact on our business in future periods.

Previous wording

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.

Current wording

Total revenues for the three months ended June 30, 2025 were $249.5 million, a decrease of $17.6 million, or 6.6%, versus the three months ended June 30, 2024.

Previous wording

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.

Current wording

Revenues for the International OTC Healthcare segment increased $2.1 million, or 6.1%, during the three months ended June 30, 2025 versus the three months ended June 30, 2024. The $2.1 million increase was mainly attributable to increases in sales in the Women's Health and Dermatologicals categories.

Previous wording

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.

Current wording

Gross profit for the three months ended June 30, 2025 decreased $5.7 million, or 3.9%, when compared with the three months ended June 30, 2024. As a percentage of total revenues, gross profit increased to 56.2% during the three months ended June 30, 2025 from 54.7% during the three months ended June 30, 2024, primarily due to favorable product mix and lower air freight.

Previous wording

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.

Current wording

Contribution margin for the North American OTC Healthcare segment for the three months ended June 30, 2025 decreased $1.6 million, or 1.7%, when compared with the three months ended June 30, 2024. As a percentage of North American OTC Healthcare revenues, contribution margin increased to 43.0% during the three months ended June 30, 2025 from 40.0% during the three months ended June 30, 2024, primarily due to the increase in gross profit margin above and a decrease in advertising and marketing spend during the quarter attributable to timing.

Previous wording

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.

Current wording

Contribution margin for the International OTC Healthcare segment increased $0.3 million, or 2.2%, during the three months ended June 30, 2025 versus the three months ended June 30, 2024. As a percentage of International OTC Healthcare revenues, contribution margin decreased to 37.7% during the three months ended June 30, 2025 from 39.2% during the three months ended June 30, 2024. The contribution margin decrease as a percentage of revenues during the three months ended June 30, 2025 was primarily due to the decrease in gross profit margin above.

Previous wording

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.

Current wording

General and administrative expenses were $28.5 million for the three months ended June 30, 2025 and $28.9 million for the three months ended June 30, 2024. General and administrative expenses decreased $0.4 million due to a decrease in legal expense, partially offset by an increase in compensation costs.

Previous wording

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.

Current wording

Depreciation and amortization expenses were $5.2 million for the three months ended June 30, 2025 and $5.7 million for the three months ended June 30, 2024. The decrease in depreciation and amortization expenses was primarily due to a decrease in amortization expense due to impairment charges taken on finite-lived brands in fiscal 2025 as well as certain intangible assets being fully amortized during fiscal 2025.

Previous wording

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.

Current wording

Interest expense, net was $10.2 million during the three months ended June 30, 2025 versus $13.1 million during the three months ended June 30, 2024. The average indebtedness during the three months ended June 30, 2025 decreased to $1.0 billion from $1.1 billion during the three months ended June 30, 2024. The average cost of borrowing decreased to 4.5% for the three months ended June 30, 2025 compared to 4.8% for the three months ended June 30, 2024.

Previous wording

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.

Current wording

The provision for income taxes during the three months ended June 30, 2025 was $14.3 million versus $9.3 million during the three months ended June 30, 2024. The effective tax rate during the three months ended June 30, 2025 was 23.2% versus 16.0% during the three months ended June 30, 2024. The increase in the effective tax rate for the three months ended June 30, 2025 compared to the three months ended June 30, 2024 was primarily due to discrete items in the prior year pertaining to the release of a reserve for uncertain tax positions due to the statute of limitations expiring.

Previous wording

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:

Current wording

As of June 30, 2025, we had cash and cash equivalents of $139.5 million, an increase of $41.6 million from March 31, 2025. The following table summarizes the change:

Previous wording

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.

Current wording

Net cash provided by operating activities was $79.0 million for the three months ended June 30, 2025, compared to $54.8 million for the three months ended June 30, 2024. The $24.2 million increase was due to the timing of working capital and increased net income before non-cash items.

Previous wording

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.

Current wording

Net cash used in investing activities was $1.9 million for the three months ended June 30, 2025, compared to $2.1 million for the three months ended June 30, 2024.

Previous wording

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.

Current wording

Net cash used in financing activities was $36.3 million for the three months ended June 30, 2025, compared to $65.5 million for the three months ended June 30, 2024. The $29.2 million decrease in cash used in financing activities was primarily due to a decrease in debt repayments of $35.0 million, partly offset by an increase in the repurchase of shares of our common stock in conjunction with our share repurchase program of $8.8 million.

Previous wording

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.

Current wording

As of June 30, 2025, 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 $173.2 million.

Previous wording

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

Current wording

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 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, 2025. There were no material changes to our critical accounting policies during the three months ended June 30, 2025.

Previous wording

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:

Current wording

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:

Previous wording

•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;

Current wording

•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;

Previous wording

•Actions of government agencies in connection with our and our suppliers’ manufacturing plants, products, advertising or regulatory matters;

Current wording

•Regulatory or enforcement actions of government agencies in connection with our and our suppliers' manufacturing plants, products and advertising;

Previous wording

•The high level of competition in our industry and markets;

Current wording

•The high level of competition in our industry and markets, including additional store brand or branded competition;

Previous wording

•The level of success of new product introductions, line extensions, increased spending on advertising and marketing support, and other new sales and marketing strategies;

Current wording

•Limited success of new product introductions, line extensions, advertising and marketing support and other sales and marketing strategies;

Previous wording

•General economic conditions and incidence levels affecting sales of our products and their respective markets;

Current wording

•General economic conditions, changing consumer trends, and incidence levels affecting sales of our products and their respective markets;

Previous wording

•Potential changes in export/import and trade laws, regulations and policies including any increased trade restrictions or tariffs;

Current wording

•Potential changes in export/import and trade laws, regulations and policies, including any increased trade restrictions or tariffs and changes in priorities of the current U.S. administration;

Previous wording

•Our inability to protect our information technology systems from threats or disruptions;

Current wording

•Our inability to protect our information technology systems from threats or disruptions or disruptions to the information technology systems of our customers or suppliers;

Previous wording

•Our level of indebtedness and possible inability to service our debt or to obtain additional financing;

Current wording

•Our level of indebtedness and any inability to service our debt or to obtain additional financing;