Prestige Consumer Healthcare Inc.

TRADEMARKS AND TRADENAMES

Trademarks and tradenames used in this Quarterly Report on Form 10-Q are the property of Prestige Consumer Healthcare Inc. or its subsidiaries, as the case may be. We have italicized our trademarks and tradenames when they appear in this Quarterly Report on Form 10-Q.

PART I. FINANCIAL INFORMATION

Condensed Consolidated Statements of Income and Comprehensive Income

Condensed Consolidated Balance Sheets

Condensed Consolidated Statements of Changes in Stockholders' Equity

Condensed Consolidated Statements of Cash Flows

Notes to Condensed Consolidated Financial Statements (unaudited)

1. Business and Basis of Presentation

Nature of Business

Prestige Consumer Healthcare Inc. (referred to herein as the “Company” or “we,” which reference shall, unless the context requires otherwise, be deemed to refer to Prestige Consumer Healthcare Inc. and all of its direct and indirect 100% owned subsidiaries on a consolidated basis) is engaged in the development, manufacturing, marketing, sales and distribution of over-the-counter (“OTC”) health and personal care products to mass merchandisers, drug, food, dollar, convenience and club stores and e-commerce channels in North America (the United States and Canada) and in Australia and certain other international markets. Prestige Consumer Healthcare Inc. is a holding company with no operations and is also the parent guarantor of the senior credit facility and the senior notes described in Note 8. Long-Term Debt, to these Condensed Consolidated Financial Statements.

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 trade restrictions and 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 consumers, including a shift in many markets to purchasing our products online, and have and may continue to see changes in retailer purchasing patterns due to these consumer patterns and 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 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.

Basis of Presentation

The unaudited Condensed Consolidated Financial Statements presented herein have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial reporting and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. All significant intercompany transactions and balances have been eliminated in consolidation. In the opinion of management, these Condensed Consolidated Financial Statements include all adjustments, consisting of normal recurring adjustments, that are considered necessary for a fair statement of our consolidated financial position, results of operations and cash flows for the interim periods presented. Our fiscal year ends on March 31st of each year. References in these Condensed Consolidated Financial Statements or related notes to a year (e.g., 2027) mean our fiscal year ending or ended on March 31st of that year. Operating results for the six months ended September 30, 2026 are not necessarily indicative of results that may be expected for the fiscal year ending March 31, 2027. These unaudited Condensed Consolidated Financial Statements and related notes should be read in conjunction with our audited Consolidated Financial Statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended March 31, 2026.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Although these estimates are based on our knowledge of current events and actions that we may undertake in the future, actual results could differ from those estimates. Our most significant estimates include those made in connection with the valuation of intangible assets, stock-based compensation, fair value of debt, sales returns and allowances, trade promotional allowances, inventory obsolescence, and accounting for income taxes and related uncertain tax positions.

Recently Adopted Accounting Pronouncements

In December 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The amendments in this update require that entities disclose, on an annual basis, specific categories in the rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold. The amendments in this update also require disclosure, on an annual basis, of income taxes paid, disaggregated by federal, state and foreign taxes and disaggregated by individual jurisdictions in which income taxes paid are equal to or greater than 5% of total income taxes paid. In addition, the amendments in this update also require that income before income taxes be disaggregated between domestic and foreign and income tax expense be disaggregated by federal, state and foreign. This ASU is effective for annual periods beginning after December 15, 2024. We adopted this standard prospectively for our fiscal year ended March 31, 2026. The adoption of this ASU is reflected in our income tax disclosures in Note 14. Income Taxes.

Recently Issued Accounting Pronouncements

In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. This ASU requires entities to disclose, in the notes to financial statements, specified information about certain costs and expenses at each interim and annual reporting period. Required disclosures include, among other things, the amount of purchases of inventory, employee compensation, depreciation, and intangible asset amortization. In addition, entities will be required to disclose the total amount of selling expenses and, in annual reporting periods, their definition of selling expenses. This ASU is effective for entities for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. We are currently evaluating the impact that this ASU may have on our Consolidated Financial Statement disclosures.

2. Acquisitions

LaCorium Health

On July 1, 2026, we completed the previously announced acquisition of 100% of the outstanding equity interests of LaCorium Health Australia Pty Limited, Stantail Trading Pty Limited, Stantail International Pty Limited, Brands Worldwide Holdings I.P. Pty Limited, and Laderma Holdings Pty Limited, each an Australian company (collectively, “LaCorium Health”), for $152.1 million in cash. The acquisition aligns with our long-term strategy of expanding our portfolio of leading over-the-counter healthcare brands. LaCorium Health is primarily a leader in Australian therapeutic skin care products sold under the Dermal Therapy brand, and also sells the Flexitol brand in international markets outside of Australia. In conjunction with this acquisition, we borrowed an additional $95.0 million under our new term loan credit agreement (see Note 8. Long-Term Debt). We used the proceeds from this loan and cash on hand to finance this transaction.

This acquisition was accounted for in accordance with the Business Combinations topic of the FASB Accounting Standards Codification ("ASC") 805, which requires that the total cost of an acquisition be allocated to the tangible and intangible assets acquired and liabilities assumed based upon their respective fair values at the date of acquisition.

We prepared a preliminary analysis of the fair values of the assets acquired and liabilities assumed as of the acquisition date. The following table summarizes our preliminary allocation of the fair value of assets acquired and liabilities assumed as of July 1, 2026. This allocation is provisional and reflects the information available to management as of the reporting date. The final allocation may differ materially from the amounts presented below as we complete our valuation procedures, obtain additional information about the acquired business, and finalize the assessment of identifiable assets, working capital balances and tax-related items.

The preliminary fair values of acquired tradenames and customer relationships were valued using income-based valuation methods. Acquired tradenames were valued using the excess earnings method, while customer relationships were valued using a distributor method. Significant assumptions utilized in these valuations include projected revenues, profitability, customer attrition rates, discount rates, long-term growth expectations and estimated useful lives. The valuation of acquired assets and the related assumptions remain subject to refinement as additional information becomes available during the measurement period.

Based on this preliminary analysis, we allocated $107.1 million to indefinite-lived intangible assets and $14.0 million to amortizable intangible assets. The amortizable intangible assets consist of a finite-lived tradename of approximately $4.4 million, which is being amortized over an estimated useful life of 20 years, and customer relationships of approximately $9.6 million, which are being amortized over an estimated weighted-average useful life of 17.9 years. The amortizable intangible assets are being amortized on a straight-line basis.

We recorded goodwill of $54.7 million based on the amount by which the purchase price exceeded the preliminary fair value of the net assets acquired. The goodwill is a result of acquiring and retaining workforces and expected synergies from integrating LaCorium Health's operations into the Company's. Goodwill is not deductible for income tax purposes.

The pro forma effect of this acquisition on revenues and earnings was not material. Results are included in the Company’s International Dermatologicals, International Pain Relief and North America Dermatologicals categories.

The OTC Wellness Business

On June 12, 2026, we completed the acquisition of Breathe Right and certain other brands (the "OTC Wellness Business") for a purchase price of $1,044.9 million in cash, which was funded through a new term loan credit agreement (see Note 8. Long-Term Debt). The acquisition aligns with our long-term strategy of expanding our portfolio of leading over-the-counter healthcare brands and enhances our position in the wellness and sleep categories. Control of the OTC Wellness Business was obtained through the acquisition of the assets and contractual rights associated with the acquired brands pursuant to the purchase agreement effective June 12, 2026. The transaction provides us with the ability to direct the use of and obtain substantially all of the economic benefits from the acquired business.

This acquisition was accounted for in accordance with the Business Combinations topic of the FASB ASC 805, which requires that the total cost of an acquisition be allocated to the tangible and intangible assets acquired and liabilities assumed based upon their respective fair values at the date of acquisition. In addition to the acquired inventory, tradenames and customer relationships, we acquired certain contractual rights and arrangements necessary to continue the marketing, sale and distribution of products, including contract manufacturing agreements that facilitate their continued production.

We prepared a preliminary analysis of the fair values of the assets acquired as of the acquisition date. The following table summarizes our preliminary allocation of the fair value of assets acquired as of June 12, 2026. Based on our analysis of the acquired assets, contractual agreements and transition services associated with the transaction, no liabilities were identified for recognition as part of this acquisition. During the three months ended September 30, 2026, we recorded measurement period adjustments to the provisional fair values of certain assets acquired in connection with the OTC Wellness Business. These adjustments were based on new information obtained about facts and circumstances that existed as of the acquisition date. The net impact of these changes was recorded as an adjustment to goodwill. This allocation continues to be provisional and reflects the information available to management as of the reporting date. The final allocation may differ materially from the amounts presented below as management continues to evaluate the fair values of acquired inventories and identifiable intangible assets, as well as certain contractual and other acquisition-related matters.

The preliminary fair values of acquired tradenames and customer relationships were valued using income-based valuation methods. Acquired tradenames were valued using the excess earnings method, while customer relationships were valued using a distributor method. Significant assumptions utilized in these valuations include projected revenues, profitability, customer attrition rates, discount rates, long-term growth expectations and estimated useful lives. The valuation of acquired assets and the related assumptions remain subject to refinement as additional information becomes available during the measurement period.

Based on this preliminary analysis, we allocated $691.4 million to indefinite-lived intangible assets and $257.0 million to amortizable intangible assets. The amortizable intangible assets consist of finite-lived tradenames of approximately $183.8 million, which are being amortized over an estimated weighted average useful life of 19.1 years, and customer relationships of approximately $73.2 million, which are being amortized over an estimated weighted average useful life of 18.2 years. The amortizable intangible assets are being amortized on a straight-line basis and have an estimated weighted-average useful life of 18.8 years.

We recorded goodwill of $65.2 million based on the amount by which the purchase price exceeded the preliminary fair value of

the net assets acquired. The goodwill is a result of expected synergies from integrating the OTC Wellness Business operations into the Company's. Goodwill is deductible for income tax purposes.

The operating results of the OTC Wellness Business have been included in our Consolidated Financial Statements beginning June 12, 2026. Revenues of the acquired OTC Wellness Business since the date of the acquisition through September 30, 2026 were $62.0 million, of which $50.4 million was included in our North American OTC Healthcare segment (primarily in our Wellness, Sleep & Other and Cough, Cold & Allergy categories) and $11.6 million was included in our International OTC Healthcare segment (primarily in our Wellness, Sleep & Other category).

The following table provides our unaudited pro forma revenues and net income had the results of the OTC Wellness Business's operations been included in our operations commencing on April 1, 2025, based on available information relating to the OTC Wellness Business's operations. This pro forma information is presented for illustrative purposes only and is not necessarily indicative of the results of operations that would have been realized had the OTC Wellness Business acquisition and related financing transactions occurred at the beginning of the periods presented, nor is it indicative of future results. The pro forma results do not reflect any anticipated operating synergies, cost savings or other integration benefits that may result from the acquisition.

The financial information for the periods presented includes pro forma adjustments for incremental amortization associated with acquired intangible assets, incremental interest expense associated with acquisition financing, acquisition-related transaction costs and the impact of inventory fair value adjustments. Material nonrecurring adjustments included in the pro forma information consisted of approximately $14.3 million of inventory fair value step-up recognized in cost of sales and $11.0 million of acquisition-related transaction costs recognized in general and administrative expenses, each as if incurred on April 1, 2025.

Pillar5

On December 18, 2025, we completed the acquisition of Pillar5 Pharma, Inc. ("Pillar5") for a purchase price of $109.9 million in cash, which was funded through a combination of cash on hand and our existing asset-based revolving credit facility.

Based in Arnprior Ontario, Canada, Pillar5 is a leading sterile ophthalmic manufacturer and one of our Clear Eyes suppliers.

This acquisition was accounted for in accordance with the Business Combinations topic of the FASB ASC 805, which requires that the total cost of an acquisition be allocated to the tangible and intangible assets acquired and liabilities assumed based upon their respective fair values at the date of acquisition.

We prepared a preliminary analysis of the fair values of the assets acquired and liabilities assumed as of the acquisition date. The following table summarizes our preliminary allocation of the fair value of assets acquired and liabilities assumed as of December 18, 2025. During the three months ended March 31, 2026 and June 30, 2026, we recorded measurement period adjustments to the provisional fair values of certain assets acquired and liabilities assumed in connection with the Pillar5 acquisition. These adjustments were based on new information obtained about facts and circumstances that existed as of the acquisition date. The net impact of these changes was recorded as an adjustment to goodwill. This allocation continues to be provisional and reflects the information available to management as of the reporting date. The final allocation may differ materially from the amounts presented below as we complete our valuation procedures, primarily related to finalizing our assessment of identifiable assets.

We recorded goodwill of $58.1 million based on the amount by which the purchase price exceeded the preliminary fair value of the net assets acquired. The goodwill is a result of acquiring and retaining workforces and expected synergies from integrating Pillar5's operations into the Company's. Goodwill is not deductible for income tax purposes.

3. Inventories

Inventories consist of the following:

Inventories are carried and depicted above at the lower of cost or net realizable value, which includes a reduction in inventory values of $12.5 million at September 30, 2026 and $6.6 million at March 31, 2026 related to obsolete and slow-moving inventory.

4. Goodwill

A reconciliation of the activity affecting goodwill by operating segment is as follows:

(a)As discussed in Note 2. Acquisitions, on June 12, 2026, we acquired the OTC Wellness Business, and, in connection with this acquisition, we preliminarily allocated $65.2 million to goodwill, reflecting the amount by which the purchase price exceeded the preliminary estimate of the fair value of the net assets acquired. As also discussed in Note 2. Acquisitions, on July 1, 2026, we acquired LaCorium Health, and, in connection with this acquisition, we preliminarily allocated $54.7 million to goodwill, reflecting the amount by which the purchase price exceeded the preliminary estimate of the fair value of the net assets acquired.

(b)As discussed in Note 2. Acquisitions, on December 18, 2025, we acquired Pillar5, one of our Clear Eyes suppliers. This amount reflects measurement period adjustments to the provisional fair values of certain assets acquired during the period.

At February 28, 2026, the date of our annual impairment review, the estimated fair value exceeded the carrying value for all reporting units and, accordingly, no impairment charge was taken. The estimates and assumptions made in assessing the fair value of our reporting units and the valuation of the underlying assets and liabilities are inherently subject to significant uncertainties related to future sales, gross margins, and advertising and marketing expenses, which can be impacted by increases in competition, changing consumer preferences, technical advances, supply chain constraints, labor shortages, and inflation. The discount rate assumption may be influenced by such factors as changes in interest rates and rates of inflation, which can have an impact on the determination of fair value. If these assumptions are adversely affected, we may be required to record impairment charges in the future. As of September 30, 2026, we determined no events have occurred that would indicate potential impairment of goodwill.

5. Intangible Assets, net

A reconciliation of the activity affecting intangible assets, net is as follows:

(a) On June 12, 2026, we completed the acquisition of the OTC Wellness Business. In connection with this acquisition, we allocated $948.4 million to intangible assets. On July 1, 2026, we completed the acquisition of LaCorium Health. In connection with this acquisition, we allocated $121.0 million to intangible assets. See Note 2. Acquisitions.

Amortization expense was $7.9 million and $12.8 million for the three and six months ended September 30, 2026, respectively, and $4.5 million and $8.9 million for the three and six months ended September 30, 2025, respectively.

Finite-lived intangible assets are expected to be amortized over their estimated useful life, which ranges from a period of 10 to 24 years, and the estimated amortization expense for each of the five succeeding years and the periods thereafter is as follows:

At February 28, 2026, the date of our annual impairment review, the estimated fair value exceeded the carrying value for all intangible assets, and accordingly, no impairment charge was taken. The assumptions subject to significant uncertainties in the impairment analysis include the discount rate utilized in the analysis, as well as future sales, gross margins, and advertising and marketing expenses. The discount rate assumption may be influenced by such factors as changes in interest rates and rates of inflation, which can have an impact on the determination of fair value. Additionally, should the related fair values of intangible assets be adversely affected as a result of declining sales or margins caused by competition, changing consumer needs or preferences, technological advances, changes in advertising and marketing expenses, supply chain constraints, labor shortages, or inflation, we may be required to record impairment charges in the future. As of September 30, 2026, no events have occurred that would indicate potential impairment of intangible assets.

6. Leases

We lease real estate and equipment for use in our operations.

The components of lease expense for the three and six months ended September 30, 2026 and 2025 were as follows:

As of September 30, 2026, the maturities of lease liabilities were as follows:

The weighted average remaining lease term and weighted average discount rate were as follows:

7. Other Accrued Liabilities

Other accrued liabilities consist of the following:

8. Long-Term Debt

Long-term debt consists of the following, as of the dates indicated:

On July 15, 2026, Prestige Brands, Inc. issued $400.0 million aggregate principal amount of 6.25% senior unsecured notes due in 2034 (the "2026 Senior Notes") pursuant to an indenture, dated July 15, 2026 (the “Indenture”), among Prestige Brands, the guarantors party thereto (including the Company) and U.S. Bank Trust Company, National Association, as trustee. The Indenture provides, among other things, that interest will be payable on the 2026 Senior Notes on January 15 and July 15 of each year, beginning on January 15, 2027, until their maturity date of July 15, 2034. We used the net proceeds from the 2026 Senior Notes, together with cash on hand, to redeem all $400.0 million of our outstanding 5.125% senior unsecured notes due in 2028 (the "2019 Senior Notes"), and to pay related expenses. During the three months ended September 30, 2026, we recorded a loss on extinguishment of debt of $1.4 million to write off the debt costs related to our 2019 Senior Notes.

On June 12, 2026, in conjunction with the acquisition of the OTC Wellness Business, we entered into a Term Loan Credit Agreement (the "Term Loan Credit Agreement") providing for a $1,045.0 million term loan with aseven-year maturity and paid $21.6 million in debt issuance costs. The Term Loan Credit Agreement requires us to make quarterly amortization payments of 0.25% of the aggregate principal amount. The Term Loan Credit Agreement also permits a second draw of up to $95.0 million that could be used for the acquisition of LaCorium Health, which we announced on May 13, 2026. On July 1, 2026, we borrowed the additional $95.0 million to fund the acquisition of LaCorium Health (see Note 2. Acquisitions). During the three months ended September 30, 2026, we made voluntary repayments of $30.0 million against the outstanding balance under the Term Loan Credit Agreement. Since we have made optional payments, we will not be required to make another payment on the Term Loan Credit Agreement until March 31, 2029.

Also on June 12, 2026, we entered into Amendment No. 10 (the "ABL Amendment") to our credit agreement governing the asset-based revolving credit facility originally entered into on January 31, 2012 (the "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.

At September 30, 2026, we hadno balance outstanding on our 2012 ABL Revolver, and we had a borrowing capacity of $202.4 million.

As of September 30, 2026, aggregate future principal payments required in accordance with the terms of the Term Loan Credit Agreement, the 2012 ABL Revolver, and the indentures governing the senior unsecured notes due 2031 (the "2021 Senior Notes") and the 2026 Senior Notes are as follows:

9. Fair Value Measurements

For certain of our financial instruments, including cash, accounts receivable, accounts payable and other current liabilities, the carrying amounts approximate their respective fair values due to the relatively short maturity of these amounts.

FASB ASC 820, Fair Value Measurements, requires fair value to be determined based on the exchange price that would be received for an asset or paid to transfer a liability in the principal or most advantageous market assuming an orderly transaction between market participants. ASC 820 established market (observable inputs) as the preferred source of fair value, to be followed by our assumptions of fair value based on hypothetical transactions (unobservable inputs) in the absence of observable market inputs. Based upon the above, the following fair value hierarchy was created:

Level 1 - Quoted market prices for identical instruments in active markets;

Level 2 - Quoted prices for similar instruments in active markets, as well as quoted prices for identical or similar instruments in markets that are not considered active; and

Level 3 - Unobservable inputs developed by us using estimates and assumptions reflective of those that would be utilized by a market participant.

The market values have been determined based on market values for similar instruments adjusted for certain factors. As such, the 2026 Senior Notes, the 2021 Senior Notes, the 2019 Senior Notes, and the Term Loan Credit Agreement are measured in Level 2 of the above hierarchy. The summary below details the carrying amounts and estimated fair values of these instruments at September 30, 2026 and March 31, 2026.

At September 30, 2026 and March 31, 2026, we did not have any assets or liabilities measured in Level 1 or 3.

10. Stockholders' Equity

We are authorized to issue 250.0 million shares of common stock, $0.01 par value per share, and 5.0 million shares of preferred stock, $0.01 par value per share. The Board of Directors may direct the issuance of the undesignated preferred stock in one or more series and determine preferences, privileges and restrictions thereof.

Each share of common stock has the right toone vote on all matters submitted to a vote of stockholders. The holders of common stock are also entitled to receive dividends whenever funds are legally available and when declared by the Board of Directors, subject to rights of holders of all classes of outstanding stock having priority rights as to dividends. No dividends have been declared or paid on our common stock through September 30, 2026.

On May 6, 2024, the Company's Board of Directors authorized the repurchase of up to $300.0 million of the Company's issued and outstanding common stock. Under the authorization, the Company may purchase common stock utilizing open market transactions, transactions structured through investment banking institutions, in privately-negotiated transactions, by direct purchases of common stock or a combination of the foregoing in compliance with the applicable rules and regulations of the U.S. Securities and Exchange Commission. At September 30, 2026, there was $92.2 million remaining to be purchased under the repurchase program.

During the three and six months ended September 30, 2026 and 2025, we repurchased shares of our common stock and recorded them as treasury stock. Our share repurchases consisted of the following:

11. Accumulated Other Comprehensive Loss

Accumulated other comprehensive loss consisted of the following at September 30, 2026 and March 31, 2026:

As of September 30, 2026 and March 31, 2026, no amounts were reclassified from accumulated other comprehensive loss into earnings.

12. Earnings Per Share

The following table sets forth the computation of basic and diluted earnings per share:

For the three months ended September 30, 2026 and 2025, there were 0.6 million and 0.3 million shares, respectively, attributable to outstanding stock-based awards that were excluded from the calculation of diluted earnings per share because their inclusion would have been anti-dilutive. For the six months ended September 30, 2026 and 2025, there were 0.7 million and 0.2 million shares, respectively, attributable to outstanding stock-based awards that were excluded from the calculation of diluted earnings per share because their inclusion would have been anti-dilutive.

13. Stock-Based Compensation

In connection with our initial public offering, the Board of Directors adopted the 2005 Long-Term Equity Incentive Plan (the “2005 Plan”), which provided for grants of up to a maximum of 5.0 million shares of restricted stock, stock options, restricted stock units ("RSUs") and other equity-based awards. In June 2014, the Board of Directors approved, and in July 2014, our stockholders ratified, an increase of an additional 1.8 million shares of our common stock for issuance under the 2005 Plan, among other changes.

On June 23, 2020, the Board of Directors adopted the Prestige Consumer Healthcare Inc. 2020 Long-Term Incentive Plan (the “2020 Plan”). The 2020 Plan became effective on August 4, 2020, upon the approval of the 2020 Plan by our stockholders. On June 23, 2020, a total of 2,827,210 shares were available for issuance under the 2020 Plan (comprised of 2,000,000 new shares plus 827,210 shares that were unissued under the 2005 Plan). Since the 2020 Plan became effective, all equity awards have been made from the 2020 Plan, and the Company will not grant any additional awards under the 2005 Plan.

At September 30, 2026, there were 1.1 million shares available for issuance under the 2020 Plan.

The following table provides information regarding our stock-based compensation:

At September 30, 2026, there were $4.1 million of unrecognized compensation costs related to unvested stock options under the 2020 Plan, excluding an estimate for forfeitures which may occur. We expect to recognize such costs over a weighted average period of 2.2 years. At September 30, 2026, there were $17.3 million of unrecognized compensation costs related to unvested RSUs and performance stock units ("PSUs") under the 2020 Plan, excluding an estimate for forfeitures which may occur. We expect to recognize such costs over a weighted average period of 2.1 years.

Restricted Stock Units

The fair value of the RSUs is determined using the closing price of our common stock on the date of the grant. A summary of the RSUs granted under the 2005 Plan and the 2020 Plan is presented below:

Options

The fair value of each option award is estimated on the date of grant using the Black-Scholes Option Pricing Model that uses the assumptions presented below:

A summary of option activity under the 2005 Plan and the 2020 Plan is as follows:

The aggregate intrinsic value of options exercised during the six months ended September 30, 2026 was $0.02 million.

14. Income Taxes

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.

Income taxes are recorded in our quarterly financial statements based on our estimated annual effective income tax rate, subject to adjustments for discrete events, should they occur. The effective tax rates used in the calculation of income taxes were 46.7% and 38.9% for the three months ended September 30, 2026 and 2025, respectively. The effective tax rates used in the calculation of income taxes were 36.7% and 31.5% for the six months ended September 30, 2026 and 2025, respectively. The increase in the effective tax rate for the three and six months ended September 30, 2026, compared to the three and six months ended September 30, 2025 was primarily due to the establishment of a valuation allowance against deferred tax assets.

15. Commitments and Contingencies

We are involved from time to time in routine legal matters and other claims incidental to our business. We review outstanding claims and proceedings internally and with external counsel as necessary to assess probability and amount of potential loss. These assessments are re-evaluated at each reporting period and as new information becomes available to determine whether a reserve should be established or if any existing reserve should be adjusted. The actual cost of resolving a claim or proceeding ultimately may be substantially different than the amount of the recorded reserve. In addition, because it is not permissible under GAAP to establish a litigation reserve until the loss is both probable and estimable, in some cases there may be insufficient time to establish a reserve prior to the actual incurrence of the loss (upon verdict and judgment at trial, for example, or in the case of a quickly negotiated settlement). We believe the resolution of routine legal matters and other claims incidental to our business, taking our reserves into account, will not be material to our financial condition or results of operations.

16. Concentrations of Risk

Our revenues are concentrated in the area of OTC Healthcare. We sell our products to mass merchandisers, drug, food, dollar, convenience and club stores and e-commerce channels. During each of the three and six months ended September 30, 2026, approximately 38% and 36%, respectively, of our gross revenues were derived from our five top selling brands. During each of the three and six months ended September 30, 2025, approximately 37% and 38%, respectively, of our gross revenues were derived from our five top selling brands. Walmart accounted for approximately 20% of our gross revenues for the three and six months ended September 30, 2026. Walmart accounted for approximately 20% and 21% of our gross revenues for the three and six months ended September 30, 2025, respectively. Amazon accounted for approximately 12% and 14% of our gross revenues for the three and six months ended September 30, 2026, respectively. Amazon accounted for approximately 13% and 12% of our gross revenues for the three and six months ended September 30, 2025, respectively.

Our product distribution in the United States is managed by a third party throughone primary distribution center in Indiana. We operate a mix and fill manufacturing facility in Virginia, a powder manufacturing facility in Victoria, Australia, and a sterile ophthalmic manufacturing facility in Ontario, Canada. 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, equipment failures, 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 the manufacturing facilities. As a result, any serious disruption could have a material adverse effect on our business, financial condition and results of operations.

At September 30, 2026, we had relationships with 96 third-party manufacturers. Of those, we had long-term contracts with 21 manufacturers that produced items that accounted for approximately 62% of externally produced gross sales for the six months ended September 30, 2026. At September 30, 2025, we had relationships with 101 third-party manufacturers. Of those, we had long-term contracts with 17 manufacturers that produced items that accounted for approximately 57% of externally produced gross sales for the six months ended September 30, 2025. One of our suppliers, a privately owned pharmaceutical manufacturer with whom we have a long-term supply agreement, produced products that accounted for approximately 19% of our gross revenues for the six months ended September 30, 2026 and 22% of gross revenues for the six months ended September 30, 2025, while we accounted for a significant portion of their gross revenues over both those time periods. 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 means that they could cease manufacturing our products at any time and for any reason or initiate arbitrary and 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, which could have a material adverse effect on our business and results of operations.

17. Business Segments

Segment information has been prepared in accordance with the Segment Reporting topic of FASB ASC 280. Our reportable segments consist of (i) North American OTC Healthcare and (ii) International OTC Healthcare. The primary measure used by our chief operating decision maker ("CODM") to evaluate the performance of our operating segments and allocate resources to these segments is contribution margin, which we define as gross profit less advertising and marketing expenses. Information regarding total assets by operating segment is not provided to our CODM. Our CODM is our Chief Executive Officer.

The tables below summarize information about our reportable segments.

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.

The tables below summarize information about our segment revenues from similar product groups.