Prestige Consumer Healthcare Inc.
For the period ended Jun 30, 2026. Filed Aug 6, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2026 · Filed Aug 6, 2026
PBH$42.98-3.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-12-31; filed 2026-02-05.
0001295947-26-000008
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-06.
0001295947-26-000042
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 127 previous paragraphs and 108 current paragraphs.
69 unchanged; 19 reworded; 20 added; 35 removed; 4 previous and 0 current paragraphs rearranged.
Tables are not compared: 8 previous and 5 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (20)
Current report
Acquisitions
Current report
Acquisition of the OTC Wellness Business
Current report
On June 12, 2026, we completed the acquisition of Breathe Right and certain other brands (the "OTC Wellness Business"), from Foundation Consumer Brands, LLC and certain of its affiliates for a purchase price of $1,045.0 million in cash (the "Breathe Right Acquisition"). In connection with this acquisition, we entered into a Term Loan Credit Agreement on June 12, 2026 (the "Term Loan Credit Agreement") providing for term loans in the amount of $1,045.0 million, the proceeds of which were used to, along with cash on hand, finance the Breathe Right Acquisition and fees and expenses incurred in connection with the closing of the Term Loan Credit Agreement and the Breathe Right Acquisition. As a result of this acquisition, we acquired certain assets primarily related to a portfolio of over-the-counter consumer health products.
Current report
The results of the OTC Wellness Business have been included in our consolidated financial statements from the acquisition date. Unaudited pro forma financial information giving effect to the acquisition as if it had occurred at the beginning of fiscal 2026 is included in Note 2., Acquisitions.
Current report
Manufacturing
Current report
Certain of our third-party manufacturers have experienced, and may continue to experience, difficulty meeting demand, which has contributed to shortages of certain products, particularly sterile eye care products, as a result of manufacturing improvement initiatives, heightened regulatory scrutiny and evolving regulatory expectations. Recently, all of our sterile eye care manufacturing sites, including those operated by certain third-party manufacturers, have undergone inspections by health authorities, and we and our third-party manufacturers are actively engaging with those authorities and implementing responsive actions intended to strengthen quality systems, improve production consistency and support more reliable supply over time. These activities may result in periods of manufacturing variability, reduced capacity, production delays or product shortages if related remediation, qualification, validation or regulatory readiness activities take longer than expected. These shortages have negatively impacted our results of operations, and further shortages may continue to have a negative impact on sales of our eye care products. We believe these ongoing investments and engagement with health authorities will better position us and our third-party manufacturers to improve supply reliability and support recovery in affected product categories over the long-term.
Current report
Income Taxes
Current report
In connection with the acquisition of the OTC Wellness Business, the Company established a new product category, Wellness, Sleep & Other, and renamed certain existing product categories. As a result, certain brands were reclassified among product categories. Prior period amounts have been reclassified to conform to the current period presentation.
Current report
Revenues for the North American OTC Healthcare segment increased $13.6 million, or 6.4%, during the three months ended June 30, 2026 versus the three months ended June 30, 2025. The $13.6 million increase was primarily attributable to an increase in sales in the Wellness, Sleep & Other, Gastrointestinal, Dermatological, and Cough, Cold & Allergy categories, partly offset by a decrease in the Women's Health category. The increase in the Wellness, Sleep & Other category was primarily attributable to the acquisition of the OTC Wellness Business, particularly the Breathe Right brand, as well as an increase in third party sales made by our manufacturing facilities.
Current report
Revenues for the International OTC Healthcare segment increased $2.6 million, or 6.9%, during the three months ended June 30, 2026 versus the three months ended June 30, 2025. The $2.6 million increase was mainly attributable to an increase in sales in the Wellness, Sleep & Other, and Gastrointestinal categories, partly offset by a decrease in sales in the Pain Relief category.
Current report
Gross profit for the three months ended June 30, 2026 decreased $4.1 million, or 3.0%, when compared with the three months ended June 30, 2025. As a percentage of total revenues, gross profit decreased to 51.3% during the three months ended June 30, 2026 from 56.2% during the three months ended June 30, 2025, primarily due to costs associated with improving and optimizing the acquired Pillar5 facility for increases in long-term capacity, and amortization of inventory fair value step-up related to the acquisition of the OTC Wellness Business.
Current report
Gross profit for the North American OTC Healthcare segment decreased $4.5 million, or 3.7%, during the three months ended June 30, 2026 versus the three months ended June 30, 2025. As a percentage of North American OTC Healthcare revenues, gross profit decreased to 51.3% during the three months ended June 30, 2026 from 56.6% during the three months ended June 30, 2025, primarily due to costs associated with improving and optimizing the acquired Pillar5 facility for increases in long-term capacity and amortization of inventory fair value step-up related to the acquisition of the OTC Wellness Business.
Current report
Gross profit for the International OTC Healthcare segment increased $0.3 million, or 1.6%, during the three months ended June 30, 2026 versus the three months ended June 30, 2025. As a percentage of International OTC Healthcare revenues, gross profit decreased to 51.3% during the three months ended June 30, 2026 from 53.9% during the three months ended June 30, 2025, primarily due to unfavorable mix.
Current report
Contribution margin for the North American OTC Healthcare segment for the three months ended June 30, 2026 decreased $4.4 million, or 4.8%, when compared with the three months ended June 30, 2025. As a percentage of North American OTC Healthcare revenues, contribution margin decreased to 38.5% during the three months ended June 30, 2026 from 43.0% during the three months ended June 30, 2025, primarily due to the decrease in gross profit margin noted above.
Current report
Depreciation and amortization expenses were $5.7 million for the three months ended June 30, 2026 and $5.2 million for the three months ended June 30, 2025. The increase in depreciation and amortization expenses was attributable to an increase in amortization expense due to the addition of certain brands in conjunction with the OTC Wellness Business acquisition.
Current report
Income Taxes
Current report
• $1,045.0 million of borrowings under our Term Loan Credit Agreement, due June 12, 2033; and
Current report
On June 12, 2026, we entered into Amendment No. 10 (the "ABL Amendment") to our 2012 ABL Revolver. The ABL Amendment provides for (i) an increase in the aggregate revolving commitment of the 2012 ABL Revolver from $200.0 million to $225.0 million and (ii) an extended maturity date of the 2012 ABL Revolver to June 12, 2031.
Current report
Subsequent to June 30, 2026, we issued $400.0 million aggregate principal amount of 6.25% senior notes due in 2034 (the "2026 Senior Notes") and used the net proceeds from the offering, together with cash on hand, to redeem all $400.0 million of the 2019 Senior Notes and to pay related expenses. See Note 18., Subsequent Events, to the Condensed Consolidated Financial Statements for additional information.
Current report
•Cybersecurity incidents and other disruptions to our information technology systems, or those of our customers, suppliers or other third parties;
Removed paragraphs (35)
Previous report
Acquisition
Previous report
Revenues for the North American OTC Healthcare segment decreased $3.2 million, or 1.4%, during the three months ended December 31, 2025 versus the three months ended December 31, 2024. The $3.2 million decrease was primarily attributable to a decrease in sales in the Eye & Ear Care, Analgesics and Women's Health categories, partly offset by an increase in sales in the Oral Care and Gastrointestinal categories.
Previous report
Revenues for the International OTC Healthcare segment decreased $3.6 million, or 7.1%, during the three months ended December 31, 2025 versus the three months ended December 31, 2024. The $3.6 million decrease was primarily attributable to a decrease in sales in the Eye & Ear Care category, partly offset by an increase in sales in the Women's Health category.
Previous report
Gross profit for the three months ended December 31, 2025 decreased $3.7 million, or 2.3%, when compared with the three months ended December 31, 2024. As a percentage of total revenues, gross profit remained constant.
Previous report
Gross profit for the North American OTC Healthcare segment decreased $0.2 million, or 0.1%, during the three months ended December 31, 2025 versus the three months ended December 31, 2024. As a percentage of North American OTC Healthcare revenues, gross profit increased to 55.5% during the three months ended December 31, 2025 from 54.8% during the three months ended December 31, 2024, primarily due to a more favorable product mix.
Previous report
Gross profit for the International OTC Healthcare segment decreased $3.5 million, or 11.6%, during the three months ended December 31, 2025 versus the three months ended December 31, 2024. As a percentage of International OTC Healthcare revenues, gross profit decreased to 55.9% during the three months ended December 31, 2025 from 58.7% during the three months ended December 31, 2024, primarily due to increased inflation costs and product mix.
Previous report
Contribution margin for the North American OTC Healthcare segment decreased $1.9 million, or 1.9%, during the three months ended December 31, 2025 versus the three months ended December 31, 2024. As a percentage of North American OTC Healthcare revenues, contribution margin decreased to 41.6% during the three months ended December 31, 2025 from 41.8% during the three months ended December 31, 2024. The contribution margin decrease as a percentage of revenues was primarily due to an increase in advertising and marketing spend during the quarter attributable to timing.
Previous report
Contribution margin for the International OTC Healthcare segment decreased $3.9 million, or 16.9%, during the three months ended December 31, 2025 versus the three months ended December 31, 2024. As a percentage of International OTC Healthcare revenues, contribution margin decreased to 40.4% during the three months ended December 31, 2025 from 45.2% during the three months ended December 31, 2024. The contribution margin decrease as a percentage of revenues was primarily due to the decrease in gross profit margin above.
Previous report
Depreciation and amortization expenses were $5.1 million for the three months ended December 31, 2025 and $5.0 million for the three months ended December 31, 2024.
Previous report
Other Expense, Net
Previous report
During the three months ended December 31, 2025, we wrote off a supplier loan of $10.3 million, previously included in Accounts receivable, net.
Previous report
Results of Operations
Previous report
Nine Months Ended December 31, 2025 compared to the Nine Months Ended December 31, 2024
Previous report
Total Segment Revenues
Previous report
Total revenues for the nine months ended December 31, 2025 were $807.1 million, a decrease of $34.2 million, or 4.1%, versus the nine months ended December 31, 2024.
Previous report
Revenues for the North American OTC Healthcare segment decreased $32.0 million, or 4.5%, during the nine months ended December 31, 2025 versus the nine months ended December 31, 2024. The $32.0 million decrease was primarily attributable to a decrease in sales in the Eye & Ear Care category, due to limited ability to supply demand for Clear Eyes.
Previous report
Revenues for the International OTC Healthcare segment decreased $2.1 million, or 1.6%, during the nine months ended December 31, 2025 versus the nine months ended December 31, 2024. The $2.1 million decrease was mainly attributable to a decrease in sales in the Eye & Ear Care, partly offset by an increase in sales in the Women's Health category.
Previous report
Gross Profit
Previous report
Gross profit for the nine months ended December 31, 2025 decreased $15.2 million, or 3.3%, when compared with the nine months ended December 31, 2024. As a percentage of total revenues, gross profit increased to 55.7% during the nine months ended December 31, 2025 from 55.2% during the nine months ended December 31, 2024, primarily due to favorable product mix.
Previous report
Gross profit for the North American OTC Healthcare segment decreased $10.2 million, or 2.6%, during the nine months ended December 31, 2025 versus the nine months ended December 31, 2024. As a percentage of North American OTC Healthcare revenues, gross profit increased to 55.9% during the nine months ended December 31, 2025 from 54.8% during the nine months ended December 31, 2024, primarily due to favorable product mix.
Previous report
Gross profit for the International OTC Healthcare segment decreased $5.0 million, or 6.7%, during the nine months ended December 31, 2025 versus the nine months ended December 31, 2024. As a percentage of International OTC Healthcare revenues, gross profit decreased to 54.5% during the nine months ended December 31, 2025 from 57.5% during the nine months ended December 31, 2024, primarily due to increased inflation costs and product mix.
Previous report
Contribution Margin
Previous report
Contribution margin for the North American OTC Healthcare segment for the nine months ended December 31, 2025 decreased $4.2 million, or 1.4%, when compared with the nine months ended December 31, 2024. As a percentage of North American OTC Healthcare revenues, contribution margin increased to 42.1% during the nine months ended December 31, 2025 from 40.8% during the nine months ended December 31, 2024, primarily due to the increase in gross profit margin above and a decrease in advertising and marketing spend.
Previous report
General and Administrative
Previous report
General and administrative expenses were $86.2 million for the nine months ended December 31, 2025 and $81.2 million for the nine months ended December 31, 2024. The $5.0 million increase in general and administrative expenses was primarily due to an increase in our allowance for doubtful accounts pertaining to one specific customer and increases in compensation and acquisition related costs.
Previous report
Depreciation and Amortization
Previous report
Depreciation and amortization expenses were $15.5 million for the nine months ended December 31, 2025 and $16.2 million for the nine months ended December 31, 2024. The decrease in depreciation and amortization expenses was primarily due to a decrease in amortization expense due to impairment charges taken on certain finite-lived brands in fiscal 2025, as well as certain intangible assets being fully amortized during fiscal 2025.
Previous report
Interest Expense, Net
Previous report
Interest expense, net was $30.9 million during the nine months ended December 31, 2025 versus $36.9 million during the nine months ended December 31, 2024. The average indebtedness during the nine months ended December 31, 2025 decreased to $1.0 billion from $1.1 billion during the nine months ended December 31, 2024. The average cost of borrowing decreased to 4.5% for the nine months ended December 31, 2025, compared to 4.7% for the nine months ended December 31, 2024.
Previous report
Other Expense, Net
Previous report
During the nine months ended December 31, 2025, we wrote off a supplier loan of $10.3 million, previously included in Accounts receivable, net.
Previous report
The provision for income taxes during the nine months ended December 31, 2025 was $56.4 million versus $45.8 million during the nine months ended December 31, 2024. The effective tax rate during the nine months ended December 31, 2025 was 29.2% versus 21.8% during the nine months ended December 31, 2024. The increase in the effective tax rate for the nine months ended December 31, 2025, compared to the nine months ended December 31, 2024, was primarily due to establishing a taxable presence in a new state.
Previous report
At December 31, 2025, we had a $40.0 million balance outstanding on the 2012 ABL Revolver, which we drew during the quarter to partially fund our acquisition of Pillar5, as discussed above. At December 31, 2025, we had a borrowing capacity of $146.4 million.
Previous report
•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 report
•Our dependence on third-party information technology service providers and their ability to protect against security threats and disruptions;
Reworded paragraphs (19)
Previous wording
The details of this acquisition are included in the notes to the unaudited Condensed Consolidated Financial Statements in Part I, Item I, Note 2 of this Quarterly Report on Form 10-Q.
Current wording
The details of the OTC Wellness Business and Pillar5 acquisitions are included in the notes to the unaudited Condensed Consolidated Financial Statements in Part I, Item I, Note 2., Acquisitions, of this Quarterly Report on Form 10-Q.
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 have negatively impacted our results of operations, and we expect further shortages will continue to 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.
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. 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
On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the United States. The OBBBA makes permanent key elements of the Tax Cuts and Jobs Act, including 100% bonus depreciation, domestic research cost expensing, and the business interest expense limitation. We are continuing to assess its impact and do not expect the OBBBA to have a material impact on our estimated annual effective tax rate.
Current wording
On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the United States. The OBBBA makes permanent key elements of the Tax Cuts and Jobs Act, including 100% bonus depreciation, domestic research cost expensing, and the business interest expense limitation. We evaluated the provisions of the OBBBA and determined that there was no material impact on our estimated annual effective tax rate.
Previous wording
Total revenues for the three months ended December 31, 2025 were $283.4 million, a decrease of $6.9 million, or 2.4%, versus the three months ended December 31, 2024.
Current wording
Total revenues for the three months ended June 30, 2026 were $265.7 million, an increase of $16.2 million, or 6.5%, versus the three months ended June 30, 2025.
Previous wording
Contribution margin for the International OTC Healthcare segment decreased $6.0 million, or 10.7%, during the nine months ended December 31, 2025 versus the nine months ended December 31, 2024. As a percentage of International OTC Healthcare revenues, contribution margin decreased to 38.9% during the nine months ended December 31, 2025 from 42.8% during the nine months ended December 31, 2024. The contribution margin decrease as a percentage of revenues during the nine months ended December 31, 2025 was primarily due to the decrease in gross profit margin above.
Current wording
Contribution margin for the International OTC Healthcare segment increased $0.6 million, or 4.0%, during the three months ended June 30, 2026 versus the three months ended June 30, 2025. As a percentage of International OTC Healthcare revenues, contribution margin decreased to 36.7% during the three months ended June 30, 2026 from 37.7% during the three months ended June 30, 2025. The contribution margin decrease as a percentage of revenues during the three months ended June 30, 2026 was primarily due to the decrease in gross profit margin noted above.
Previous wording
General and administrative expenses were $29.7 million for the three months ended December 31, 2025 and $26.2 million for the three months ended December 31, 2024. The $3.5 million increase in general and administrative expenses was primarily due to an increase in our allowance for doubtful accounts pertaining to one specific customer.
Current wording
General and administrative expenses were $43.3 million for the three months ended June 30, 2026 and $28.5 million for the three months ended June 30, 2025. The $14.8 million increase in general and administrative expenses was primarily due to increases in acquisition-related costs.
Previous wording
Interest expense, net was $10.7 million during the three months ended December 31, 2025 versus $11.5 million during the three months ended December 31, 2024. The average indebtedness remained constant at $1.0 billion during the three months ended December 31, 2025 and the three months ended December 31, 2024. The average cost of borrowing decreased to 4.5% for the three months ended December 31, 2025 from 4.6% for the three months ended December 31, 2024.
Current wording
Interest expense, net was $13.9 million during the three months ended June 30, 2026 versus $10.2 million during the three months ended June 30, 2025. The average indebtedness during the three months ended June 30, 2026 increased to $2.0 billion from $1.0 billion during the three months ended June 30, 2025. The increase in average indebtedness is due to the result of borrowings under the new Term Loan Credit Agreement used to fund our acquisition of the OTC Wellness Business. The average cost of borrowing increased to 5.1% for the three months ended June 30, 2026, compared to 4.5% for the three months ended June 30, 2025. The increase in the average costs of borrowing is primarily attributed to the amount outstanding under the new Term Loan Credit Agreement.
Previous wording
The provision for income taxes during the three months ended December 31, 2025 was $15.1 million versus $19.1 million during the three months ended December 31, 2024. The effective tax rate during the three months ended December 31, 2025 was 24.5% versus 23.9% during the three months ended December 31, 2024. The increase in the effective tax rate for the three months ended December 31, 2025, compared to the three months ended December 31, 2024, was primarily due to establishing a taxable presence in a new state.
Current wording
The provision for income taxes during the three months ended June 30, 2026 was $9.4 million versus $14.3 million during the three months ended June 30, 2025. The effective tax rate during the three months ended June 30, 2026 was 24.3% versus 23.2% during the three months ended June 30, 2025. The increase in the effective tax rate for the three months ended June 30, 2026, compared to the three months ended June 30, 2025, was primarily due to stock-based compensation and state tax changes.
Previous wording
As of December 31, 2025, we had cash and cash equivalents of $62.4 million, a decrease of $35.5 million from March 31, 2025. The following table summarizes the change:
Current wording
As of June 30, 2026, we had cash and cash equivalents of $89.1 million, an increase of $25.3 million from March 31, 2026. The following table summarizes the change:
Previous wording
Net cash provided by operating activities was $214.8 million for the nine months ended December 31, 2025, compared to $189.7 million for the nine months ended December 31, 2024. The $25.1 million increase was primarily due to the timing of working capital.
Current wording
Net cash provided by operating activities was $70.8 million for the three months ended June 30, 2026, compared to $79.0 million for the three months ended June 30, 2025. The $8.2 million decrease was primarily due to a decrease in net income before non-cash items, partly offset by favorable working capital.
Previous wording
Net cash used in investing activities was $133.4 million for the nine months ended December 31, 2025, compared to $14.0 million for the nine months ended December 31, 2024. The $119.5 million increase in net cash used in investing activities was primarily due to acquisitions during the current year.
Current wording
Net cash used in investing activities was $1,063.7 million for the three months ended June 30, 2026, compared to $1.9 million for the three months ended June 30, 2025. The $1,061.8 million increase in net cash used in investing activities was primarily due to acquisitions during the current quarter.
Previous wording
Net cash used in financing activities was $118.0 million for the nine months ended December 31, 2025, compared to $170.6 million for the nine months ended December 31, 2024. The $52.6 million decrease in cash used in financing activities was primarily due to a decrease in net debt repayments of $175.0 million, partly offset by an increase in the repurchase of shares of our common stock in conjunction with our share repurchase program of $115.4 million.
Current wording
Net cash provided by financing activities was $1,018.5 million for the three months ended June 30, 2026, compared to net cash used in financing activities of $36.3 million for the three months ended June 30, 2025. The $1,054.7 million increase in cash provided by financing activities was primarily due to the proceeds from the issuance of term loans of $1,045.0 million under the Term Loan Credit Agreement and a decrease in the repurchase of shares of our common stock in conjunction with our share repurchase program of $34.8 million, partly offset by the payment of debt issuance costs of $22.5 million.
Previous wording
As of December 31, 2025, we had an aggregate of $1.0 billion of outstanding indebtedness, which consisted of the following:
Current wording
As of June 30, 2026, we had an aggregate of $2.0 billion of outstanding indebtedness, which consisted of the following:
Previous wording
•$40.0 million of borrowings under our asset-based revolving credit facility originally entered into on January 31, 2012 (the "2012 ABL Revolver") due December 8, 2028.
Current wording
At June 30, 2026, we had no balance outstanding on our asset-based revolving credit facility originally entered into on January 31, 2012 (the "2012 ABL Revolver"), and we had a borrowing capacity of $193.5 million.
Previous wording
Our debt facilities contain various financial covenants, including provisions that require us to maintain certain fixed charge ratios. The credit agreement governing the 2012 ABL Revolver and the indentures governing the 2021 Senior Notes and 2019 Senior Notes contain provisions that accelerate our indebtedness on certain changes in control and restrict us from undertaking specified corporate actions, including asset dispositions, acquisitions, payments of dividends and other specified payments, repurchasing our equity securities in the public markets, incurrence of indebtedness, creation of liens, making loans and investments and transactions with affiliates. Specifically, we must:
Current wording
The Term Loan Credit Agreement, the credit agreement governing the 2012 ABL Revolver, and the indentures governing the 2021 Senior Notes and 2019 Senior Notes (and 2026 Senior Notes) contain customary provisions that accelerate our indebtedness on certain changes in control and restrict us from undertaking specified corporate actions, including asset dispositions, acquisitions, payments of dividends and other specified payments, repurchasing our equity securities in the public markets, incurrence of indebtedness, creation of liens, making loans and investments and transactions with affiliates.
Previous wording
•Have a fixed charge ratio of greater than 1.0 to 1.0 for the quarter ended December 31, 2025 (defined as, with certain adjustments, the ratio of our consolidated EBITDA minus capital expenditures to our trailing twelve month consolidated interest paid, taxes paid and other specified payments). Our fixed charge requirement remains level throughout the term of the debt facilities.
Current wording
In addition, the credit agreement governing the 2012 ABL Revolver includes a fixed charge coverage ratio that requires we maintain a ratio of no less than 1.0 to 1.0 (defined as, with certain adjustments, the ratio of our consolidated EBITDA minus capital expenditures to our trailing twelve month consolidated interest paid, taxes paid and other specified payments) when availability under the 2012 ABL Revolver remains below a certain level.
Previous wording
At December 31, 2025, we were in compliance with the applicable financial and restrictive covenants under the 2012 ABL Revolver and the indentures governing the 2021 Senior Notes and the 2019 Senior Notes. Management anticipates that in the normal course of operations, we will be in compliance with the financial and restrictive covenants during the next twelve months.
Current wording
At June 30, 2026, we were in compliance with the applicable covenants under the Term Loan Credit Agreement, the credit agreement governing the 2012 ABL Revolver and the indentures governing the 2021 Senior Notes and the 2019 Senior Notes. Management anticipates that in the normal course of operations, we will be in compliance with the applicable covenants during the next twelve months.
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 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 nine months ended December 31, 2025.
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, 2026. There were no material changes to our critical accounting policies during the three months ended June 30, 2026.
Previous wording
A description of recently issued accounting pronouncements is included in the notes to the unaudited Condensed Consolidated Financial Statements in Part I, Item I, Note 1 of this Quarterly Report on Form 10-Q.
Current wording
A description of recently issued accounting pronouncements is included in the notes to the unaudited Condensed Consolidated Financial Statements in Part I, Item I, Note 1., Business and Basis of Presentation, of this Quarterly Report on Form 10-Q.
Rearranged previous paragraphs (4)
Previous report — wording carried elsewhere
The following table represents total revenue by segment, including product groups, for the nine months ended December 31, 2025 and 2024.
Previous report — wording carried elsewhere
The following table presents our gross profit and gross profit as a percentage of total segment revenues, by segment for each of the periods presented.
Previous report — wording carried elsewhere
Contribution margin is our segment measure of profitability. It is defined as gross profit less advertising and marketing expenses.
Previous report — wording carried elsewhere
The following table presents our contribution margin and contribution margin as a percentage of total segment revenues, by segment for each of the periods presented.