[ X ]
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
For the quarterly period ended September 30, 2018
|
OR
|
[ ]
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
For the transition period from ____ to _____
|
Commission File Number: 001-32433
|
Delaware
|
|
20-1297589
|
(State or Other Jurisdiction of
Incorporation or Organization)
|
|
(I.R.S. Employer Identification No.)
|
660 White Plains Road
Tarrytown, New York 10591
|
(Address of Principal Executive Offices) (Zip Code)
|
|
(914) 524-6800
|
(Registrant's Telephone Number, Including Area Code)
|
|
Prestige Brands Holdings, Inc.
|
(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)
|
Large accelerated filer
|
x
|
|
|
Accelerated filer
|
o
|
Non-accelerated filer
|
o
|
|
|
Smaller reporting company
|
o
|
|
|
|
|
Emerging growth company
|
o
|
PART I.
|
FINANCIAL INFORMATION
|
|
|
|
|
Item 1.
|
Financial Statements
|
|
|
Condensed Consolidated Statements of Income and Comprehensive Income for the three and six months ended September 30, 2018 and 2017 (unaudited)
|
|
|
Condensed Consolidated Balance Sheets as of September 30, 2018 and March 31, 2018 (unaudited)
|
|
|
Condensed Consolidated Statements of Cash Flows for the six months ended September 30, 2018 and 2017 (unaudited)
|
|
|
Notes to Condensed Consolidated Financial Statements (unaudited)
|
|
|
|
|
Item 2.
|
Management's Discussion and Analysis of Financial Condition and Results of Operations
|
|
|
|
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
|
|
|
|
Item 4.
|
Controls and Procedures
|
|
|
|
|
PART II.
|
OTHER INFORMATION
|
|
|
|
|
Item 1A.
|
Risk Factors
|
|
|
|
|
Item 5.
|
Other Information
|
|
|
|
|
Item 6.
|
Exhibits
|
|
|
|
|
|
Signatures
|
|
|
|
|
PART I.
|
FINANCIAL INFORMATION
|
ITEM 1.
|
FINANCIAL STATEMENTS
|
|
Three Months Ended September 30,
|
|
Six Months Ended September 30,
|
||||||||||||
(In thousands, except per share data)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Revenues
|
|
|
|
|
|
|
|
||||||||
Net sales
|
$
|
239,354
|
|
|
$
|
257,930
|
|
|
$
|
493,308
|
|
|
$
|
514,417
|
|
Other revenues
|
3
|
|
|
96
|
|
|
29
|
|
|
182
|
|
||||
Total revenues
|
239,357
|
|
|
258,026
|
|
|
493,337
|
|
|
514,599
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||||
Cost of Sales
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cost of sales excluding depreciation
|
100,647
|
|
|
112,580
|
|
|
212,716
|
|
|
224,337
|
|
||||
Cost of sales depreciation
|
1,238
|
|
|
1,348
|
|
|
2,526
|
|
|
2,688
|
|
||||
Cost of sales
|
101,885
|
|
|
113,928
|
|
|
215,242
|
|
|
227,025
|
|
||||
Gross profit
|
137,472
|
|
|
144,098
|
|
|
278,095
|
|
|
287,574
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||||
Operating Expenses
|
|
|
|
|
|
|
|
|
|
|
|
||||
Advertising and promotion
|
37,042
|
|
|
39,188
|
|
|
74,153
|
|
|
76,132
|
|
||||
General and administrative
|
24,034
|
|
|
21,999
|
|
|
47,975
|
|
|
42,409
|
|
||||
Depreciation and amortization
|
6,756
|
|
|
7,186
|
|
|
13,840
|
|
|
14,353
|
|
||||
Gain on divestiture
|
(1,284
|
)
|
|
—
|
|
|
(1,284
|
)
|
|
—
|
|
||||
Total operating expenses
|
66,548
|
|
|
68,373
|
|
|
134,684
|
|
|
132,894
|
|
||||
Operating income
|
70,924
|
|
|
75,725
|
|
|
143,411
|
|
|
154,680
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Other (income) expense
|
|
|
|
|
|
|
|
|
|
||||||
Interest income
|
(33
|
)
|
|
(85
|
)
|
|
(133
|
)
|
|
(154
|
)
|
||||
Interest expense
|
27,103
|
|
|
26,921
|
|
|
53,143
|
|
|
53,331
|
|
||||
Other expense (income), net
|
335
|
|
|
(432
|
)
|
|
422
|
|
|
(506
|
)
|
||||
Total other expense
|
27,405
|
|
|
26,404
|
|
|
53,432
|
|
|
52,671
|
|
||||
Income before income taxes
|
43,519
|
|
|
49,321
|
|
|
89,979
|
|
|
102,009
|
|
||||
Provision for income taxes
|
12,678
|
|
|
18,616
|
|
|
24,672
|
|
|
37,545
|
|
||||
Net income
|
$
|
30,841
|
|
|
$
|
30,705
|
|
|
$
|
65,307
|
|
|
$
|
64,464
|
|
|
|
|
|
|
|
|
|
||||||||
Earnings per share:
|
|
|
|
|
|
|
|
|
|
||||||
Basic
|
$
|
0.59
|
|
|
$
|
0.58
|
|
|
$
|
1.25
|
|
|
$
|
1.21
|
|
Diluted
|
$
|
0.59
|
|
|
$
|
0.57
|
|
|
$
|
1.24
|
|
|
$
|
1.20
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
|
|
||||||
Basic
|
51,841
|
|
|
53,098
|
|
|
52,238
|
|
|
53,068
|
|
||||
Diluted
|
52,153
|
|
|
53,539
|
|
|
52,545
|
|
|
53,524
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Comprehensive income, net of tax:
|
|
|
|
|
|
|
|
||||||||
Currency translation adjustments
|
(2,145
|
)
|
|
2,716
|
|
|
(5,119
|
)
|
|
3,835
|
|
||||
Unrecognized net gain on pension plans
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||
Total other comprehensive (loss) income
|
(2,145
|
)
|
|
2,716
|
|
|
(5,119
|
)
|
|
3,836
|
|
||||
Comprehensive income
|
$
|
28,696
|
|
|
$
|
33,421
|
|
|
$
|
60,188
|
|
|
$
|
68,300
|
|
(In thousands)
|
September 30, 2018
|
|
March 31, 2018
|
||||
|
|
|
|
||||
Assets
|
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
36,910
|
|
|
$
|
32,548
|
|
Accounts receivable, net of allowance of $14,433 and $12,734, respectively
|
153,849
|
|
|
140,881
|
|
||
Inventories
|
113,569
|
|
|
118,547
|
|
||
Deferred income tax assets
|
—
|
|
|
26
|
|
||
Prepaid expenses and other current assets
|
10,172
|
|
|
11,475
|
|
||
Total current assets
|
314,500
|
|
|
303,477
|
|
||
|
|
|
|
||||
Property, plant and equipment, net
|
52,321
|
|
|
52,552
|
|
||
Goodwill
|
612,444
|
|
|
620,098
|
|
||
Intangible assets, net
|
2,715,070
|
|
|
2,780,916
|
|
||
Other long-term assets
|
3,360
|
|
|
3,569
|
|
||
Total Assets
|
$
|
3,697,695
|
|
|
$
|
3,760,612
|
|
|
|
|
|
||||
Liabilities and Stockholders' Equity
|
|
|
|
|
|
||
Current liabilities
|
|
|
|
|
|
||
Accounts payable
|
$
|
66,251
|
|
|
$
|
61,390
|
|
Accrued interest payable
|
9,665
|
|
|
9,708
|
|
||
Other accrued liabilities
|
70,057
|
|
|
52,101
|
|
||
Total current liabilities
|
145,973
|
|
|
123,199
|
|
||
|
|
|
|
||||
Long-term debt, net
|
1,895,835
|
|
|
1,992,952
|
|
||
Deferred income tax liabilities
|
440,853
|
|
|
442,518
|
|
||
Other long-term liabilities
|
21,796
|
|
|
23,333
|
|
||
Total Liabilities
|
2,504,457
|
|
|
2,582,002
|
|
||
|
|
|
|
||||
Commitments and Contingencies — Note 16
|
|
|
|
|
|
||
|
|
|
|
||||
Stockholders' Equity
|
|
|
|
|
|
||
Preferred stock - $0.01 par value
|
|
|
|
|
|
||
Authorized - 5,000 shares
|
|
|
|
|
|
||
Issued and outstanding - None
|
—
|
|
|
—
|
|
||
Common stock - $0.01 par value
|
|
|
|
|
|
||
Authorized - 250,000 shares
|
|
|
|
|
|
||
Issued - 53,609 shares at September 30, 2018 and 53,396 shares at March 31, 2018
|
536
|
|
|
534
|
|
||
Additional paid-in capital
|
474,137
|
|
|
468,783
|
|
||
Treasury stock, at cost - 1,871 shares at September 30, 2018 and 353 shares at March 31, 2018
|
(59,928
|
)
|
|
(7,669
|
)
|
||
Accumulated other comprehensive loss, net of tax
|
(24,434
|
)
|
|
(19,315
|
)
|
||
Retained earnings
|
802,927
|
|
|
736,277
|
|
||
Total Stockholders' Equity
|
1,193,238
|
|
|
1,178,610
|
|
||
Total Liabilities and Stockholders' Equity
|
$
|
3,697,695
|
|
|
$
|
3,760,612
|
|
|
Six Months Ended September 30,
|
||||||
(In thousands)
|
2018
|
|
2017
|
||||
Operating Activities
|
|
|
|
||||
Net income
|
$
|
65,307
|
|
|
$
|
64,464
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|||
Depreciation and amortization
|
16,366
|
|
|
17,041
|
|
||
Gain on divestiture
|
(1,284
|
)
|
|
—
|
|
||
Loss on disposal of property and equipment
|
37
|
|
|
1,461
|
|
||
Deferred income taxes
|
339
|
|
|
16,321
|
|
||
Amortization of debt origination costs
|
3,021
|
|
|
3,494
|
|
||
Excess tax benefits from share-based awards
|
—
|
|
|
470
|
|
||
Stock-based compensation costs
|
4,328
|
|
|
4,726
|
|
||
Other
|
247
|
|
|
—
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
|
|||
Accounts receivable
|
(7,718
|
)
|
|
(9,345
|
)
|
||
Inventories
|
(4,145
|
)
|
|
(3,409
|
)
|
||
Prepaid expenses and other current assets
|
1,302
|
|
|
17,123
|
|
||
Accounts payable
|
4,187
|
|
|
8,008
|
|
||
Accrued liabilities
|
14,339
|
|
|
(11,869
|
)
|
||
Other
|
(1,219
|
)
|
|
55
|
|
||
Net cash provided by operating activities
|
95,107
|
|
|
108,540
|
|
||
|
|
|
|
||||
Investing Activities
|
|
|
|
|
|
||
Purchases of property, plant and equipment
|
(5,074
|
)
|
|
(4,785
|
)
|
||
Acquisition of Fleet escrow receipt
|
—
|
|
|
970
|
|
||
Proceeds from divestiture
|
65,912
|
|
|
—
|
|
||
Net cash provided by (used in) investing activities
|
60,838
|
|
|
(3,815
|
)
|
||
|
|
|
|
||||
Financing Activities
|
|
|
|
|
|
||
Term loan repayments
|
(100,000
|
)
|
|
(105,000
|
)
|
||
Borrowings under revolving credit agreement
|
30,000
|
|
|
—
|
|
||
Repayments under revolving credit agreement
|
(30,000
|
)
|
|
—
|
|
||
Proceeds from exercise of stock options
|
1,028
|
|
|
1,466
|
|
||
Fair value of shares surrendered as payment of tax withholding
|
(2,281
|
)
|
|
(1,075
|
)
|
||
Repurchase of common stock
|
(49,978
|
)
|
|
—
|
|
||
Net cash used in financing activities
|
(151,231
|
)
|
|
(104,609
|
)
|
||
|
|
|
|
||||
Effects of exchange rate changes on cash and cash equivalents
|
(352
|
)
|
|
1,006
|
|
||
Increase in cash and cash equivalents
|
4,362
|
|
|
1,122
|
|
||
Cash and cash equivalents - beginning of period
|
32,548
|
|
|
41,855
|
|
||
Cash and cash equivalents - end of period
|
$
|
36,910
|
|
|
$
|
42,977
|
|
|
|
|
|
||||
Interest paid
|
$
|
49,147
|
|
|
$
|
49,404
|
|
Income taxes paid
|
$
|
2,444
|
|
|
$
|
9,037
|
|
(In thousands)
|
Balance
March 31, 2018
|
|
New Revenue Standard Adjustment
|
|
Balance
April 1, 2018
|
||||||
Accounts receivable, net
|
$
|
140,881
|
|
|
$
|
5,438
|
|
|
$
|
146,319
|
|
Inventories
|
118,547
|
|
|
(1,768
|
)
|
|
116,779
|
|
|||
Other accrued liabilities
|
52,101
|
|
|
1,925
|
|
|
54,026
|
|
|||
Deferred income tax liabilities
|
442,518
|
|
|
401
|
|
|
442,919
|
|
|||
Retained earnings
|
736,277
|
|
|
1,344
|
|
|
737,621
|
|
|
Three Months Ended September 30, 2018
|
|
Six Months Ended September 30, 2018
|
||||||||||||||||||||
(In thousands)
|
As Reported
|
|
Impact of Change
|
|
Without Adoption of ASC 606
|
|
As Reported
|
|
Impact of Change
|
|
Without Adoption of ASC 606
|
||||||||||||
Total revenues
|
$
|
239,357
|
|
|
$
|
(16,165
|
)
|
|
$
|
223,192
|
|
|
$
|
493,337
|
|
|
$
|
(22,110
|
)
|
|
$
|
471,227
|
|
Cost of sales
|
$
|
101,885
|
|
|
$
|
(6,204
|
)
|
|
$
|
95,681
|
|
|
$
|
215,242
|
|
|
$
|
(8,396
|
)
|
|
$
|
206,846
|
|
Total operating expenses
|
$
|
66,548
|
|
|
$
|
(440
|
)
|
|
$
|
66,108
|
|
|
$
|
134,684
|
|
|
$
|
(579
|
)
|
|
$
|
134,105
|
|
Income before income taxes
|
$
|
43,519
|
|
|
$
|
(9,521
|
)
|
|
$
|
33,998
|
|
|
$
|
89,979
|
|
|
$
|
(13,135
|
)
|
|
$
|
76,844
|
|
Provision for income taxes
|
$
|
12,678
|
|
|
$
|
(2,771
|
)
|
|
$
|
9,907
|
|
|
$
|
24,672
|
|
|
$
|
(3,752
|
)
|
|
$
|
20,920
|
|
Net income
|
$
|
30,841
|
|
|
$
|
(6,750
|
)
|
|
$
|
24,091
|
|
|
$
|
65,307
|
|
|
$
|
(9,383
|
)
|
|
$
|
55,924
|
|
(In thousands)
|
July 2, 2018
|
||
Components of assets sold:
|
|
||
Inventory
|
$
|
6,644
|
|
Property, plant and equipment, net
|
653
|
|
|
Goodwill
|
6,245
|
|
|
Intangible assets, net
|
49,315
|
|
|
Assets sold
|
62,857
|
|
|
Total purchase price received
|
65,912
|
|
|
|
(3,055
|
)
|
|
Costs to sell
|
1,771
|
|
|
Pre-tax gain on divestiture
|
$
|
(1,284
|
)
|
(In thousands)
|
September 30, 2018
|
|
March 31, 2018
|
||||
Components of Inventories
|
|
|
|
||||
Packaging and raw materials
|
$
|
13,704
|
|
|
$
|
13,112
|
|
Work in process
|
237
|
|
|
157
|
|
||
Finished goods
|
99,628
|
|
|
105,278
|
|
||
Inventories
|
$
|
113,569
|
|
|
$
|
118,547
|
|
(In thousands)
|
North American OTC
Healthcare |
|
International OTC
Healthcare |
|
Household
Cleaning |
|
Consolidated
|
|||||||||
Balance - March 31, 2018
|
|
|
|
|
|
|
|
|
||||||||
|
Goodwill
|
$
|
711,104
|
|
|
$
|
32,919
|
|
|
$
|
71,405
|
|
|
$
|
815,428
|
|
|
Accumulated impairment loss
|
(130,170
|
)
|
|
—
|
|
|
(65,160
|
)
|
|
(195,330
|
)
|
||||
Balance - March 31, 2018
|
580,934
|
|
|
32,919
|
|
|
6,245
|
|
|
620,098
|
|
|||||
|
2019 Reductions
|
—
|
|
|
—
|
|
|
(6,245
|
)
|
|
(6,245
|
)
|
||||
|
Effects of foreign currency exchange rates
|
—
|
|
|
(1,409
|
)
|
|
—
|
|
|
(1,409
|
)
|
||||
Balance - September 30, 2018
|
|
|
|
|
|
|
|
|||||||||
|
Goodwill
|
711,104
|
|
|
31,510
|
|
|
65,160
|
|
|
807,774
|
|
||||
|
Accumulated impairment loss
|
(130,170
|
)
|
|
—
|
|
|
(65,160
|
)
|
|
(195,330
|
)
|
||||
Balance - September 30, 2018
|
$
|
580,934
|
|
|
$
|
31,510
|
|
|
$
|
—
|
|
|
$
|
612,444
|
|
(In thousands)
|
Indefinite-
Lived
Trademarks
|
|
Finite-Lived
Trademarks and Customer Relationships |
|
Totals
|
||||||
Gross Carrying Amounts
|
|
|
|
|
|
||||||
Balance — March 31, 2018
|
$
|
2,490,303
|
|
|
$
|
441,314
|
|
|
$
|
2,931,617
|
|
Reductions
|
(30,562
|
)
|
|
(34,889
|
)
|
|
(65,451
|
)
|
|||
Effects of foreign currency exchange rates
|
(5,117
|
)
|
|
(287
|
)
|
|
(5,404
|
)
|
|||
Balance — September 30, 2018
|
2,454,624
|
|
|
406,138
|
|
|
2,860,762
|
|
|||
|
|
|
|
|
|
|
|
|
|||
Accumulated Amortization
|
|
|
|
|
|
|
|
|
|||
Balance — March 31, 2018
|
—
|
|
|
150,701
|
|
|
150,701
|
|
|||
Additions
|
—
|
|
|
11,181
|
|
|
11,181
|
|
|||
Reductions
|
—
|
|
|
(16,136
|
)
|
|
(16,136
|
)
|
|||
Effects of foreign currency exchange rates
|
—
|
|
|
(54
|
)
|
|
(54
|
)
|
|||
Balance — September 30, 2018
|
—
|
|
|
145,692
|
|
|
145,692
|
|
|||
|
|
|
|
|
|
||||||
Intangible assets, net — September 30, 2018
|
$
|
2,454,624
|
|
|
$
|
260,446
|
|
|
$
|
2,715,070
|
|
(In thousands)
|
September 30, 2018
|
|
March 31, 2018
|
||||
Accrued marketing costs
|
$
|
28,457
|
|
|
$
|
21,473
|
|
Accrued compensation costs
|
6,523
|
|
|
10,591
|
|
||
Accrued broker commissions
|
2,113
|
|
|
1,487
|
|
||
Income taxes payable
|
12,735
|
|
|
1,901
|
|
||
Accrued professional fees
|
3,877
|
|
|
2,244
|
|
||
Accrued production costs
|
6,388
|
|
|
7,392
|
|
||
Other accrued liabilities
|
9,964
|
|
|
7,013
|
|
||
|
$
|
70,057
|
|
|
$
|
52,101
|
|
(In thousands, except percentages)
|
|
September 30, 2018
|
|
March 31, 2018
|
||||
2016 Senior Notes bearing interest at 6.375%, with interest payable on March 1 and September 1 of each year. The 2016 Senior Notes mature on March 1, 2024.
|
|
$
|
600,000
|
|
|
$
|
600,000
|
|
2013 Senior Notes bearing interest at 5.375%, with interest payable on June 15 and December 15 of each year. The 2013 Senior Notes mature on December 15, 2021.
|
|
400,000
|
|
|
400,000
|
|
||
2012 Term B-5 Loans bearing interest at the Borrower's option at either LIBOR plus a margin of 2.00%, with a LIBOR floor of 0.00%, or an alternate base rate plus a margin of 1.00%, with a floor of 1.00%, due on January 26, 2024.
|
|
838,000
|
|
|
938,000
|
|
||
2012 ABL Revolver bearing interest at the Borrower's option at either a base rate plus applicable margin or LIBOR plus applicable margin. Any unpaid balance is due on January 26, 2022.
|
|
75,000
|
|
|
75,000
|
|
||
Long-term debt
|
|
1,913,000
|
|
|
2,013,000
|
|
||
Less: unamortized debt costs
|
|
(17,165
|
)
|
|
(20,048
|
)
|
||
Long-term debt, net
|
|
$
|
1,895,835
|
|
|
$
|
1,992,952
|
|
|
|
September 30, 2018
|
|
March 31, 2018
|
||||||||||||
(In thousands)
|
|
Carrying Value
|
|
Fair Value
|
|
Carrying Value
|
|
Fair Value
|
||||||||
2016 Senior Notes
|
|
$
|
600,000
|
|
|
$
|
606,000
|
|
|
$
|
600,000
|
|
|
$
|
610,500
|
|
2013 Senior Notes
|
|
400,000
|
|
|
400,000
|
|
|
400,000
|
|
|
402,000
|
|
||||
2012 Term B-5 Loans
|
|
838,000
|
|
|
838,000
|
|
|
938,000
|
|
|
939,173
|
|
||||
2012 ABL Revolver
|
|
75,000
|
|
|
75,000
|
|
|
75,000
|
|
|
75,000
|
|
(In thousands)
|
September 30, 2018
|
|
March 31, 2018
|
||||
Components of Accumulated Other Comprehensive Loss
|
|
|
|
||||
Cumulative translation adjustment
|
$
|
(25,517
|
)
|
|
$
|
(20,398
|
)
|
Unrecognized net gain on pension plans
|
1,083
|
|
|
1,083
|
|
||
Accumulated other comprehensive loss, net of tax
|
$
|
(24,434
|
)
|
|
$
|
(19,315
|
)
|
|
|
Three Months Ended September 30,
|
|
Six Months Ended September 30,
|
||||||||||||
(In thousands, except per share data)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Numerator
|
|
|
|
|
|
|
|
|
||||||||
Net income
|
|
$
|
30,841
|
|
|
$
|
30,705
|
|
|
$
|
65,307
|
|
|
$
|
64,464
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Denominator
|
|
|
|
|
|
|
|
|
|
|
||||||
Denominator for basic earnings per share — weighted average shares outstanding
|
|
51,841
|
|
|
53,098
|
|
|
52,238
|
|
|
53,068
|
|
||||
Dilutive effect of nonvested restricted stock units and options issued to employees and directors
|
|
312
|
|
|
441
|
|
|
307
|
|
|
456
|
|
||||
Denominator for diluted earnings per share
|
|
52,153
|
|
|
53,539
|
|
|
52,545
|
|
|
53,524
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||||
Earnings per Common Share:
|
|
|
|
|
|
|
|
|
|
|
||||||
Basic earnings per share
|
|
$
|
0.59
|
|
|
$
|
0.58
|
|
|
$
|
1.25
|
|
|
$
|
1.21
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Diluted earnings per share
|
|
$
|
0.59
|
|
|
$
|
0.57
|
|
|
$
|
1.24
|
|
|
$
|
1.20
|
|
RSUs
|
|
Shares
(in thousands)
|
|
Weighted-
Average
Grant-Date
Fair Value
|
|||
Six Months Ended September 30, 2017
|
|
|
|
|
|||
Vested and nonvested at March 31, 2017
|
|
350.1
|
|
|
$
|
39.29
|
|
Granted
|
|
105.8
|
|
|
55.61
|
|
|
Vested and issued
|
|
(53.3
|
)
|
|
34.30
|
|
|
Forfeited
|
|
(6.7
|
)
|
|
49.30
|
|
|
Vested and nonvested at September 30, 2017
|
|
395.9
|
|
|
44.15
|
|
|
Vested at September 30, 2017
|
|
90.5
|
|
|
29.88
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended September 30, 2018
|
|
|
|
|
|||
Vested and nonvested at March 31, 2018
|
|
393.5
|
|
|
$
|
44.13
|
|
Granted
|
|
226.4
|
|
|
30.09
|
|
|
Vested and issued
|
|
(175.8
|
)
|
|
43.05
|
|
|
Forfeited
|
|
(31.1
|
)
|
|
48.32
|
|
|
Vested and nonvested at September 30, 2018
|
|
413.0
|
|
|
36.58
|
|
|
Vested at September 30, 2018
|
|
113.2
|
|
|
31.05
|
|
|
|
Six Months Ended September 30,
|
||||||
|
|
2018
|
|
2017
|
||||
Expected volatility
|
|
29.6
|
%
|
|
35.2
|
%
|
||
Expected dividends
|
|
$
|
—
|
|
|
$
|
—
|
|
Expected term in years
|
|
6.0
|
|
|
6.0
|
|
||
Risk-free rate
|
|
2.9
|
%
|
|
2.2
|
%
|
Options
|
|
Shares
(in thousands)
|
|
Weighted-
Average
Exercise
Price
|
|
Weighted-
Average
Remaining
Contractual
Term (years)
|
|
Aggregate
Intrinsic
Value
(in thousands)
|
|||||
Six Months Ended September 30, 2017
|
|
|
|
|
|
|
|
|
|||||
Outstanding at March 31, 2017
|
|
772.3
|
|
|
$
|
37.70
|
|
|
|
|
|
||
Granted
|
|
182.8
|
|
|
56.11
|
|
|
|
|
|
|||
Exercised
|
|
(51.0
|
)
|
|
28.76
|
|
|
|
|
|
|||
Forfeited or expired
|
|
(19.0
|
)
|
|
47.57
|
|
|
|
|
|
|||
Outstanding at September 30, 2017
|
|
885.1
|
|
|
41.80
|
|
|
7.5
|
|
$
|
9,768
|
|
|
Exercisable at September 30, 2017
|
|
498.4
|
|
|
32.34
|
|
|
6.3
|
|
$
|
9,305
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Six Months Ended September 30, 2018
|
|
|
|
|
|
|
|
|
|
|
|
||
Outstanding at March 31, 2018
|
|
873.2
|
|
|
$
|
41.79
|
|
|
|
|
|
||
Granted
|
|
294.5
|
|
|
29.46
|
|
|
|
|
|
|||
Exercised
|
|
(37.2
|
)
|
|
27.60
|
|
|
|
|
|
|||
Forfeited or expired
|
|
(125.4
|
)
|
|
47.16
|
|
|
|
|
|
|||
Outstanding at September 30, 2018
|
|
1,005.1
|
|
|
38.03
|
|
|
7.3
|
|
$
|
6,271
|
|
|
Exercisable at September 30, 2018
|
|
555.2
|
|
|
37.08
|
|
|
6.4
|
|
$
|
3,890
|
|
|
|
Three Months Ended September 30,
|
|
Six Months Ended September 30,
|
||||||||||||
(In thousands)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Interest cost
|
|
$
|
610
|
|
|
$
|
634
|
|
|
1,220
|
|
|
$
|
1,263
|
|
|
Expected return on assets
|
|
(768
|
)
|
|
(725
|
)
|
|
(1,536
|
)
|
|
(1,451
|
)
|
||||
Net periodic benefit income
|
|
$
|
(158
|
)
|
|
$
|
(91
|
)
|
|
$
|
(316
|
)
|
|
$
|
(188
|
)
|
|
Three Months Ended September 30, 2018
|
||||||||||||||
(In thousands)
|
North American OTC
Healthcare |
|
International OTC
Healthcare |
|
Household
Cleaning |
|
Consolidated
|
||||||||
Total segment revenues*
|
$
|
215,950
|
|
|
$
|
23,407
|
|
|
$
|
—
|
|
|
$
|
239,357
|
|
Cost of sales
|
92,007
|
|
|
9,878
|
|
|
—
|
|
|
101,885
|
|
||||
Gross profit
|
123,943
|
|
|
13,529
|
|
|
—
|
|
|
137,472
|
|
||||
Advertising and promotion
|
33,325
|
|
|
3,717
|
|
|
—
|
|
|
37,042
|
|
||||
Contribution margin
|
$
|
90,618
|
|
|
$
|
9,812
|
|
|
$
|
—
|
|
|
100,430
|
|
|
Other operating expenses
|
|
|
|
|
|
|
|
|
29,506
|
|
|||||
Operating income
|
|
|
|
|
|
|
|
|
70,924
|
|
|||||
Other expense
|
|
|
|
|
|
|
|
|
27,405
|
|
|||||
Income before income taxes
|
|
|
|
|
|
|
|
|
43,519
|
|
|||||
Provision for income taxes
|
|
|
|
|
|
|
|
|
12,678
|
|
|||||
Net income
|
|
|
|
|
|
|
|
|
$
|
30,841
|
|
|
Six Months Ended September 30, 2018
|
||||||||||||||
(In thousands)
|
North American OTC
Healthcare |
|
International OTC
Healthcare |
|
Household
Cleaning
|
|
Consolidated
|
||||||||
Total segment revenues*
|
$
|
430,725
|
|
|
$
|
42,801
|
|
|
$
|
19,811
|
|
|
$
|
493,337
|
|
Cost of sales
|
181,160
|
|
|
17,494
|
|
|
16,588
|
|
|
215,242
|
|
||||
Gross profit
|
249,565
|
|
|
25,307
|
|
|
3,223
|
|
|
278,095
|
|
||||
Advertising and promotion
|
66,583
|
|
|
7,140
|
|
|
430
|
|
|
74,153
|
|
||||
Contribution margin
|
$
|
182,982
|
|
|
$
|
18,167
|
|
|
$
|
2,793
|
|
|
203,942
|
|
|
Other operating expenses
|
|
|
|
|
|
|
|
|
|
60,531
|
|
||||
Operating income
|
|
|
|
|
|
|
|
|
|
143,411
|
|
||||
Other expense
|
|
|
|
|
|
|
|
|
|
53,432
|
|
||||
Income before income taxes
|
|
|
|
|
|
|
|
|
|
89,979
|
|
||||
Provision for income taxes
|
|
|
|
|
|
|
|
|
|
24,672
|
|
||||
Net income
|
|
|
|
|
|
|
|
|
|
$
|
65,307
|
|
|
Three Months Ended September 30, 2017
|
||||||||||||||
(In thousands)
|
North American OTC
Healthcare |
|
International OTC
Healthcare |
|
Household
Cleaning |
|
Consolidated
|
||||||||
Total segment revenues*
|
$
|
215,302
|
|
|
$
|
20,957
|
|
|
$
|
21,767
|
|
|
$
|
258,026
|
|
Cost of sales
|
87,184
|
|
|
9,296
|
|
|
17,448
|
|
|
113,928
|
|
||||
Gross profit
|
128,118
|
|
|
11,661
|
|
|
4,319
|
|
|
144,098
|
|
||||
Advertising and promotion
|
35,064
|
|
|
3,593
|
|
|
531
|
|
|
39,188
|
|
||||
Contribution margin
|
$
|
93,054
|
|
|
$
|
8,068
|
|
|
$
|
3,788
|
|
|
104,910
|
|
|
Other operating expenses
|
|
|
|
|
|
|
|
|
29,185
|
|
|||||
Operating income
|
|
|
|
|
|
|
|
|
75,725
|
|
|||||
Other expense
|
|
|
|
|
|
|
|
|
26,404
|
|
|||||
Income before income taxes
|
|
|
|
|
|
|
|
|
49,321
|
|
|||||
Provision for income taxes
|
|
|
|
|
|
|
|
|
18,616
|
|
|||||
Net income
|
|
|
|
|
|
|
|
|
$
|
30,705
|
|
|
Six Months Ended September 30, 2017
|
||||||||||||||
(In thousands)
|
North American OTC
Healthcare |
|
International OTC
Healthcare |
|
Household
Cleaning
|
|
Consolidated
|
||||||||
Total segment revenues*
|
$
|
431,117
|
|
|
$
|
41,855
|
|
|
$
|
41,627
|
|
|
$
|
514,599
|
|
Cost of sales
|
173,685
|
|
|
19,246
|
|
|
34,094
|
|
|
227,025
|
|
||||
Gross profit
|
257,432
|
|
|
22,609
|
|
|
7,533
|
|
|
287,574
|
|
||||
Advertising and promotion
|
67,872
|
|
|
7,283
|
|
|
977
|
|
|
76,132
|
|
||||
Contribution margin
|
$
|
189,560
|
|
|
$
|
15,326
|
|
|
$
|
6,556
|
|
|
211,442
|
|
|
Other operating expenses
|
|
|
|
|
|
|
|
|
56,762
|
|
|||||
Operating income
|
|
|
|
|
|
|
|
|
154,680
|
|
|||||
Other expense
|
|
|
|
|
|
|
|
|
52,671
|
|
|||||
Income before income taxes
|
|
|
|
|
|
|
|
|
102,009
|
|
|||||
Provision for income taxes
|
|
|
|
|
|
|
|
|
37,545
|
|
|||||
Net income
|
|
|
|
|
|
|
|
|
$
|
64,464
|
|
|
Three Months Ended September 30, 2018
|
||||||||||||||
(In thousands)
|
North American OTC
Healthcare |
|
International OTC
Healthcare |
|
Household
Cleaning |
|
Consolidated
|
||||||||
Analgesics
|
$
|
28,638
|
|
|
$
|
125
|
|
|
$
|
—
|
|
|
$
|
28,763
|
|
Cough & Cold
|
20,492
|
|
|
5,734
|
|
|
—
|
|
|
26,226
|
|
||||
Women's Health
|
61,614
|
|
|
3,270
|
|
|
—
|
|
|
64,884
|
|
||||
Gastrointestinal
|
30,529
|
|
|
7,950
|
|
|
—
|
|
|
38,479
|
|
||||
Eye & Ear Care
|
24,845
|
|
|
2,995
|
|
|
—
|
|
|
27,840
|
|
||||
Dermatologicals
|
25,338
|
|
|
605
|
|
|
—
|
|
|
25,943
|
|
||||
Oral Care
|
23,142
|
|
|
2,727
|
|
|
—
|
|
|
25,869
|
|
||||
Other OTC
|
1,352
|
|
|
1
|
|
|
—
|
|
|
1,353
|
|
||||
Household Cleaning
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total segment revenues
|
$
|
215,950
|
|
|
$
|
23,407
|
|
|
$
|
—
|
|
|
$
|
239,357
|
|
|
Six Months Ended September 30, 2018
|
||||||||||||||
(In thousands)
|
North American OTC
Healthcare |
|
International OTC
Healthcare |
|
Household
Cleaning |
|
Consolidated
|
||||||||
Analgesics
|
$
|
56,896
|
|
|
$
|
282
|
|
|
$
|
—
|
|
|
$
|
57,178
|
|
Cough & Cold
|
36,706
|
|
|
10,905
|
|
|
—
|
|
|
47,611
|
|
||||
Women's Health
|
125,091
|
|
|
5,527
|
|
|
—
|
|
|
130,618
|
|
||||
Gastrointestinal
|
63,328
|
|
|
13,940
|
|
|
—
|
|
|
77,268
|
|
||||
Eye & Ear Care
|
50,317
|
|
|
5,614
|
|
|
—
|
|
|
55,931
|
|
||||
Dermatologicals
|
50,460
|
|
|
1,137
|
|
|
—
|
|
|
51,597
|
|
||||
Oral Care
|
45,339
|
|
|
5,394
|
|
|
—
|
|
|
50,733
|
|
||||
Other OTC
|
2,588
|
|
|
2
|
|
|
—
|
|
|
2,590
|
|
||||
Household Cleaning
|
—
|
|
|
—
|
|
|
19,811
|
|
|
19,811
|
|
||||
Total segment revenues
|
$
|
430,725
|
|
|
$
|
42,801
|
|
|
$
|
19,811
|
|
|
$
|
493,337
|
|
|
Three Months Ended September 30, 2017
|
||||||||||||||
(In thousands)
|
North American OTC
Healthcare |
|
International OTC
Healthcare |
|
Household
Cleaning |
|
Consolidated
|
||||||||
Analgesics
|
$
|
29,348
|
|
|
$
|
40
|
|
|
$
|
—
|
|
|
$
|
29,388
|
|
Cough & Cold
|
21,567
|
|
|
4,659
|
|
|
—
|
|
|
26,226
|
|
||||
Women's Health
|
61,436
|
|
|
1,906
|
|
|
—
|
|
|
63,342
|
|
||||
Gastrointestinal
|
28,323
|
|
|
8,139
|
|
|
—
|
|
|
36,462
|
|
||||
Eye & Ear Care
|
22,535
|
|
|
2,590
|
|
|
—
|
|
|
25,125
|
|
||||
Dermatologicals
|
25,821
|
|
|
524
|
|
|
—
|
|
|
26,345
|
|
||||
Oral Care
|
24,990
|
|
|
3,097
|
|
|
—
|
|
|
28,087
|
|
||||
Other OTC
|
1,282
|
|
|
2
|
|
|
—
|
|
|
1,284
|
|
||||
Household Cleaning
|
—
|
|
|
—
|
|
|
21,767
|
|
|
21,767
|
|
||||
Total segment revenues
|
$
|
215,302
|
|
|
$
|
20,957
|
|
|
$
|
21,767
|
|
|
$
|
258,026
|
|
|
Six Months Ended September 30, 2017
|
||||||||||||||
(In thousands)
|
North American OTC
Healthcare |
|
International OTC
Healthcare |
|
Household
Cleaning |
|
Consolidated
|
||||||||
Analgesics
|
$
|
58,638
|
|
|
$
|
549
|
|
|
$
|
—
|
|
|
$
|
59,187
|
|
Cough & Cold
|
38,977
|
|
|
9,272
|
|
|
—
|
|
|
48,249
|
|
||||
Women's Health
|
124,581
|
|
|
5,500
|
|
|
—
|
|
|
130,081
|
|
||||
Gastrointestinal
|
58,753
|
|
|
13,872
|
|
|
—
|
|
|
72,625
|
|
||||
Eye & Ear Care
|
47,806
|
|
|
5,645
|
|
|
—
|
|
|
53,451
|
|
||||
Dermatologicals
|
49,952
|
|
|
1,025
|
|
|
—
|
|
|
50,977
|
|
||||
Oral Care
|
49,882
|
|
|
5,989
|
|
|
—
|
|
|
55,871
|
|
||||
Other OTC
|
2,528
|
|
|
3
|
|
|
—
|
|
|
2,531
|
|
||||
Household Cleaning
|
—
|
|
|
—
|
|
|
41,627
|
|
|
41,627
|
|
||||
Total segment revenues
|
$
|
431,117
|
|
|
$
|
41,855
|
|
|
$
|
41,627
|
|
|
$
|
514,599
|
|
|
Three Months Ended September 30,
|
|
Six Months Ended September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
United States
|
$
|
203,763
|
|
|
$
|
225,351
|
|
|
$
|
427,240
|
|
|
$
|
450,345
|
|
Rest of world
|
35,594
|
|
|
32,675
|
|
|
66,097
|
|
|
64,254
|
|
||||
Total
|
$
|
239,357
|
|
|
$
|
258,026
|
|
|
$
|
493,337
|
|
|
$
|
514,599
|
|
September 30, 2018
|
North American OTC
Healthcare |
|
International OTC
Healthcare |
|
Household
Cleaning |
|
Consolidated
|
||||||||
(In thousands)
|
|
|
|
|
|
|
|
||||||||
Goodwill
|
$
|
580,934
|
|
|
$
|
31,510
|
|
|
$
|
—
|
|
|
$
|
612,444
|
|
|
|
|
|
|
|
|
|
||||||||
Intangible assets
|
|
|
|
|
|
|
|
|
|||||||
Indefinite-lived
|
2,375,737
|
|
|
78,887
|
|
|
—
|
|
|
2,454,624
|
|
||||
Finite-lived, net
|
254,876
|
|
|
5,570
|
|
|
—
|
|
|
260,446
|
|
||||
Intangible assets, net
|
2,630,613
|
|
|
84,457
|
|
|
—
|
|
|
2,715,070
|
|
||||
Total
|
$
|
3,211,547
|
|
|
$
|
115,967
|
|
|
$
|
—
|
|
|
$
|
3,327,514
|
|
March 31, 2018
|
North American OTC
Healthcare |
|
International OTC
Healthcare |
|
Household
Cleaning |
|
Consolidated
|
||||||||
(In thousands)
|
|
|
|
|
|
|
|
||||||||
Goodwill
|
$
|
580,934
|
|
|
$
|
32,919
|
|
|
$
|
6,245
|
|
|
$
|
620,098
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Intangible assets
|
|
|
|
|
|
|
|
|
|
|
|||||
Indefinite-lived
|
2,375,736
|
|
|
84,006
|
|
|
30,561
|
|
|
2,490,303
|
|
||||
Finite-lived, net
|
265,356
|
|
|
6,068
|
|
|
19,189
|
|
|
290,613
|
|
||||
Intangible assets, net
|
2,641,092
|
|
|
90,074
|
|
|
49,750
|
|
|
2,780,916
|
|
||||
Total
|
$
|
3,222,026
|
|
|
$
|
122,993
|
|
|
$
|
55,995
|
|
|
$
|
3,401,014
|
|
ITEM 2.
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
See also “Cautionary Statement Regarding Forward-Looking Statements” on page
32
of this Quarterly Report on Form 10-Q.
|
|
Three Months Ended September 30,
|
|||||||||||||||||
|
|
|
|
|
|
|
|
|
Increase (Decrease)
|
|||||||||
(In thousands)
|
2018
|
|
%
|
|
2017
|
|
%
|
|
Amount
|
|
%
|
|||||||
North American OTC Healthcare
|
|
|
|
|
|
|
|
|
|
|
||||||||
Analgesics
|
$
|
28,638
|
|
|
12.0
|
|
$
|
29,348
|
|
|
11.4
|
|
$
|
(710
|
)
|
|
(2.4
|
)
|
Cough & Cold
|
20,492
|
|
|
8.5
|
|
21,567
|
|
|
8.4
|
|
(1,075
|
)
|
|
(5.0
|
)
|
|||
Women's Health
|
61,614
|
|
|
25.7
|
|
61,436
|
|
|
23.8
|
|
178
|
|
|
0.3
|
|
|||
Gastrointestinal
|
30,529
|
|
|
12.7
|
|
28,323
|
|
|
11.0
|
|
2,206
|
|
|
7.8
|
|
|||
Eye & Ear Care
|
24,845
|
|
|
10.4
|
|
22,535
|
|
|
8.7
|
|
2,310
|
|
|
10.3
|
|
|||
Dermatologicals
|
25,338
|
|
|
10.6
|
|
25,821
|
|
|
10.0
|
|
(483
|
)
|
|
(1.9
|
)
|
|||
Oral Care
|
23,142
|
|
|
9.7
|
|
24,990
|
|
|
9.7
|
|
(1,848
|
)
|
|
(7.4
|
)
|
|||
Other OTC
|
1,352
|
|
|
0.6
|
|
1,282
|
|
|
0.5
|
|
70
|
|
|
5.5
|
|
|||
Total North American OTC Healthcare
|
215,950
|
|
|
90.2
|
|
215,302
|
|
|
83.5
|
|
648
|
|
|
0.3
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
International OTC Healthcare
|
|
|
|
|
|
|
|
|
|
|
||||||||
Analgesics
|
125
|
|
|
0.1
|
|
40
|
|
|
—
|
|
85
|
|
|
212.5
|
|
|||
Cough & Cold
|
5,734
|
|
|
2.4
|
|
4,659
|
|
|
1.8
|
|
1,075
|
|
|
23.1
|
|
|||
Women's Health
|
3,270
|
|
|
1.4
|
|
1,906
|
|
|
0.7
|
|
1,364
|
|
|
71.6
|
|
|||
Gastrointestinal
|
7,950
|
|
|
3.2
|
|
8,139
|
|
|
3.2
|
|
(189
|
)
|
|
(2.3
|
)
|
|||
Eye & Ear Care
|
2,995
|
|
|
1.3
|
|
2,590
|
|
|
1.0
|
|
405
|
|
|
15.6
|
|
|||
Dermatologicals
|
605
|
|
|
0.3
|
|
524
|
|
|
0.2
|
|
81
|
|
|
15.5
|
|
|||
Oral Care
|
2,727
|
|
|
1.1
|
|
3,097
|
|
|
1.2
|
|
(370
|
)
|
|
(11.9
|
)
|
|||
Other OTC
|
1
|
|
|
—
|
|
2
|
|
|
—
|
|
(1
|
)
|
|
(50.0
|
)
|
|||
Total International OTC Healthcare
|
23,407
|
|
|
9.8
|
|
20,957
|
|
|
8.1
|
|
2,450
|
|
|
11.7
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Total OTC Healthcare
|
239,357
|
|
|
100.0
|
|
236,259
|
|
|
91.6
|
|
3,098
|
|
|
1.3
|
|
|||
Household Cleaning
|
—
|
|
|
—
|
|
21,767
|
|
|
8.4
|
|
(21,767
|
)
|
|
(100.0
|
)
|
|||
Total Consolidated
|
$
|
239,357
|
|
|
100.0
|
|
$
|
258,026
|
|
|
100.0
|
|
$
|
(18,669
|
)
|
|
(7.2
|
)
|
|
Three Months Ended September 30,
|
|||||||||||||||||
(In thousands)
|
|
|
|
|
|
|
|
|
Increase (Decrease)
|
|||||||||
Gross Profit
|
2018
|
|
%
|
|
2017
|
|
%
|
|
Amount
|
|
%
|
|||||||
North American OTC Healthcare
|
$
|
123,943
|
|
|
57.4
|
|
$
|
128,118
|
|
|
59.5
|
|
$
|
(4,175
|
)
|
|
(3.3
|
)
|
International OTC Healthcare
|
13,529
|
|
|
57.8
|
|
11,661
|
|
|
55.6
|
|
1,868
|
|
|
16.0
|
|
|||
Household Cleaning
|
—
|
|
|
—
|
|
4,319
|
|
|
19.8
|
|
(4,319
|
)
|
|
(100.0
|
)
|
|||
|
$
|
137,472
|
|
|
57.4
|
|
$
|
144,098
|
|
|
55.8
|
|
$
|
(6,626
|
)
|
|
(4.6
|
)
|
|
Three Months Ended September 30,
|
|||||||||||||||||
(In thousands)
|
|
|
|
|
|
|
|
|
Increase (Decrease)
|
|||||||||
Contribution Margin
|
2018
|
|
%
|
|
2017
|
|
%
|
|
Amount
|
|
%
|
|||||||
North American OTC Healthcare
|
$
|
90,618
|
|
|
42.0
|
|
$
|
93,054
|
|
|
43.2
|
|
$
|
(2,436
|
)
|
|
(2.6
|
)
|
International OTC Healthcare
|
9,812
|
|
|
41.9
|
|
8,068
|
|
|
38.5
|
|
1,744
|
|
|
21.6
|
|
|||
Household Cleaning
|
—
|
|
|
—
|
|
3,788
|
|
|
17.4
|
|
(3,788
|
)
|
|
(100.0
|
)
|
|||
|
$
|
100,430
|
|
|
42.0
|
|
$
|
104,910
|
|
|
40.7
|
|
$
|
(4,480
|
)
|
|
(4.3
|
)
|
|
Six Months Ended September 30,
|
|||||||||||||||||
|
|
|
|
|
|
|
|
|
Increase (Decrease)
|
|||||||||
(In thousands)
|
2018
|
|
%
|
|
2017
|
|
%
|
|
Amount
|
|
%
|
|||||||
North American OTC Healthcare
|
|
|
|
|
|
|
|
|
|
|
||||||||
Analgesics
|
$
|
56,896
|
|
|
11.5
|
|
$
|
58,638
|
|
|
11.4
|
|
$
|
(1,742
|
)
|
|
(3.0
|
)
|
Cough & Cold
|
36,706
|
|
|
7.4
|
|
38,977
|
|
|
7.5
|
|
(2,271
|
)
|
|
(5.8
|
)
|
|||
Women's Health
|
125,091
|
|
|
25.4
|
|
124,581
|
|
|
24.2
|
|
510
|
|
|
0.4
|
|
|||
Gastrointestinal
|
63,328
|
|
|
12.8
|
|
58,753
|
|
|
11.4
|
|
4,575
|
|
|
7.8
|
|
|||
Eye & Ear Care
|
50,317
|
|
|
10.2
|
|
47,806
|
|
|
9.3
|
|
2,511
|
|
|
5.3
|
|
|||
Dermatologicals
|
50,460
|
|
|
10.2
|
|
49,952
|
|
|
9.7
|
|
508
|
|
|
1.0
|
|
|||
Oral Care
|
45,339
|
|
|
9.3
|
|
49,882
|
|
|
9.7
|
|
(4,543
|
)
|
|
(9.1
|
)
|
|||
Other OTC
|
2,588
|
|
|
0.5
|
|
2,528
|
|
|
0.5
|
|
60
|
|
|
2.4
|
|
|||
Total North American OTC Healthcare
|
430,725
|
|
|
87.3
|
|
431,117
|
|
|
83.7
|
|
(392
|
)
|
|
(0.1
|
)
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
International OTC Healthcare
|
|
|
|
|
|
|
|
|
|
|
||||||||
Analgesics
|
282
|
|
|
0.1
|
|
549
|
|
|
0.1
|
|
(267
|
)
|
|
(48.6
|
)
|
|||
Cough & Cold
|
10,905
|
|
|
2.2
|
|
9,272
|
|
|
1.8
|
|
1,633
|
|
|
17.6
|
|
|||
Women's Health
|
5,527
|
|
|
1.1
|
|
5,500
|
|
|
1.1
|
|
27
|
|
|
0.5
|
|
|||
Gastrointestinal
|
13,940
|
|
|
2.8
|
|
13,872
|
|
|
2.7
|
|
68
|
|
|
0.5
|
|
|||
Eye & Ear Care
|
5,614
|
|
|
1.1
|
|
5,645
|
|
|
1.1
|
|
(31
|
)
|
|
(0.5
|
)
|
|||
Dermatologicals
|
1,137
|
|
|
0.3
|
|
1,025
|
|
|
0.2
|
|
112
|
|
|
10.9
|
|
|||
Oral Care
|
5,394
|
|
|
1.1
|
|
5,989
|
|
|
1.2
|
|
(595
|
)
|
|
(9.9
|
)
|
|||
Other OTC
|
2
|
|
|
—
|
|
3
|
|
|
—
|
|
(1
|
)
|
|
(33.3
|
)
|
|||
Total International OTC Healthcare
|
42,801
|
|
|
8.7
|
|
41,855
|
|
|
8.2
|
|
946
|
|
|
2.3
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Total OTC Healthcare
|
473,526
|
|
|
96.0
|
|
472,972
|
|
|
91.9
|
|
554
|
|
|
0.1
|
|
|||
Household Cleaning
|
19,811
|
|
|
4.0
|
|
41,627
|
|
|
8.1
|
|
(21,816
|
)
|
|
(52.4
|
)
|
|||
Total Consolidated
|
$
|
493,337
|
|
|
100.0
|
|
$
|
514,599
|
|
|
100.0
|
|
$
|
(21,262
|
)
|
|
(4.1
|
)
|
|
Six Months Ended September 30,
|
|||||||||||||||||
(In thousands)
|
|
|
|
|
|
|
|
|
Increase (Decrease)
|
|||||||||
Gross Profit
|
2018
|
|
%
|
|
2017
|
|
%
|
|
Amount
|
|
%
|
|||||||
North American OTC Healthcare
|
$
|
249,565
|
|
|
57.9
|
|
$
|
257,432
|
|
|
59.7
|
|
$
|
(7,867
|
)
|
|
(3.1
|
)
|
International OTC Healthcare
|
25,307
|
|
|
59.1
|
|
22,609
|
|
|
54.0
|
|
2,698
|
|
|
11.9
|
|
|||
Household Cleaning
|
3,223
|
|
|
16.3
|
|
7,533
|
|
|
18.1
|
|
(4,310
|
)
|
|
(57.2
|
)
|
|||
|
$
|
278,095
|
|
|
56.4
|
|
$
|
287,574
|
|
|
55.9
|
|
$
|
(9,479
|
)
|
|
(3.3
|
)
|
|
Six Months Ended September 30,
|
|||||||||||||||||
(In thousands)
|
|
|
|
|
|
|
|
|
Increase (Decrease)
|
|||||||||
Contribution Margin
|
2018
|
|
%
|
|
2017
|
|
%
|
|
Amount
|
|
%
|
|||||||
North American OTC Healthcare
|
$
|
182,982
|
|
|
42.5
|
|
$
|
189,560
|
|
|
44.0
|
|
$
|
(6,578
|
)
|
|
(3.5
|
)
|
International OTC Healthcare
|
18,167
|
|
|
42.4
|
|
15,326
|
|
|
36.6
|
|
2,841
|
|
|
18.5
|
|
|||
Household Cleaning
|
2,793
|
|
|
14.1
|
|
6,556
|
|
|
15.7
|
|
(3,763
|
)
|
|
(57.4
|
)
|
|||
|
$
|
203,942
|
|
|
41.3
|
|
$
|
211,442
|
|
|
41.1
|
|
$
|
(7,500
|
)
|
|
(3.5
|
)
|
|
Six Months Ended September 30,
|
||||||||||
(In thousands)
|
2018
|
|
2017
|
|
$ Change
|
||||||
Cash provided by (used in):
|
|
|
|
|
|
||||||
Operating Activities
|
$
|
95,107
|
|
|
$
|
108,540
|
|
|
$
|
(13,433
|
)
|
Investing Activities
|
60,838
|
|
|
(3,815
|
)
|
|
64,653
|
|
|||
Financing Activities
|
(151,231
|
)
|
|
(104,609
|
)
|
|
(46,622
|
)
|
|||
Effects of exchange rate changes on cash and cash equivalents
|
(352
|
)
|
|
1,006
|
|
|
(1,358
|
)
|
|||
Net change in cash and cash equivalents
|
$
|
4,362
|
|
|
$
|
1,122
|
|
|
$
|
3,240
|
|
•
|
$400.0 million
of 5.375% 2013 Senior Notes, which mature on December 15, 2021;
|
•
|
$600.0 million
of 6.375% 2016 Senior Notes, which mature on March 1, 2024;
|
•
|
$838.0 million
of borrowings under the 2012 Term B-5 Loans due January 26, 2024; and
|
•
|
$75.0 million
of borrowings under the 2012 ABL Revolver due January 26, 2022.
|
(In thousands)
|
|
|||
Year Ending March 31,
|
Amount
|
|||
2019 (remaining nine months ending March 31, 2019)
|
$
|
—
|
|
|
2020
|
|
—
|
|
|
2021
|
|
—
|
|
|
2022
|
|
475,000
|
|
|
2023
|
|
—
|
|
|
Thereafter
|
1,438,000
|
|
||
|
$
|
1,913,000
|
|
•
|
Have a leverage ratio of less than
6.75 to 1.0
for the quarter ended
September 30, 2018
(defined as, with certain adjustments, the ratio of our consolidated total net debt as of the last day of the fiscal quarter to our trailing twelve month consolidated net income before interest, taxes, depreciation, amortization, non-cash charges and certain other items (“EBITDA”)). Our leverage ratio requirement decreases to 6.50 to 1.00 on December 31, 2018 and remains at that level thereafter;
|
•
|
Have an interest coverage ratio of greater than
2.25 to 1.0
for the quarter ended
September 30, 2018
and thereafter (defined as, with certain adjustments, the ratio of our consolidated EBITDA to our trailing twelve month consolidated cash interest expense); and
|
•
|
Have a fixed charge ratio of greater than
1.0 to 1.0
for the quarter ended
September 30, 2018
(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 credit agreement.
|
•
|
The high level of competition in our industry and markets;
|
•
|
Our inability to increase organic growth via new product introductions, line extensions, increased spending on advertising and promotional support, and other new sales and marketing strategies;
|
•
|
Our dependence on a limited number of customers for a large portion of our sales;
|
•
|
Our inability to successfully identify, negotiate, complete and integrate suitable acquisition candidates and to obtain necessary financing;
|
•
|
Our inability to invest successfully in research and development to develop new products;
|
•
|
Changes in inventory management practices by retailers;
|
•
|
Our inability to grow our international sales;
|
•
|
General economic conditions affecting sales of our products and their respective markets;
|
•
|
Economic factors, such as increases in interest rates and currency exchange rate fluctuations;
|
•
|
Business, regulatory and other conditions affecting retailers;
|
•
|
Changing consumer trends, additional store brand or branded competition or other pricing pressures which may cause us to lower our prices;
|
•
|
Our dependence on third-party manufacturers to produce many of the products we sell;
|
•
|
Our dependence on a third party logistics provider to distribute our products to customers;
|
•
|
Price increases for raw materials, labor, energy and transportation costs, and for other input costs;
|
•
|
Disruptions in our distribution center or manufacturing facility;
|
•
|
Acquisitions, dispositions or other strategic transactions diverting managerial resources, the incurrence of additional liabilities or problems associated with integration of those businesses and facilities;
|
•
|
Actions of government agencies in connection with our products, advertising or regulatory matters governing our industry;
|
•
|
Product liability claims, product recalls and related negative publicity;
|
•
|
Our inability to protect our intellectual property rights;
|
•
|
Our dependence on third parties for intellectual property relating to some of the products we sell;
|
•
|
Our inability to protect our internal information technology systems;
|
•
|
Our dependence on third party information technology service providers and their ability to protect against security threats and disruptions;
|
•
|
Our assets being comprised virtually entirely of goodwill and intangibles and possible changes in their value based on adverse operating results;
|
•
|
Our dependence on key personnel;
|
•
|
Shortages of supply of sourced goods or interruptions in the distribution or manufacturing of our products;
|
•
|
The costs associated with any claims in litigation or arbitration and any adverse judgments rendered in such litigation or arbitration;
|
•
|
Our level of indebtedness and possible inability to service our debt;
|
•
|
Our inability to obtain additional financing;
|
•
|
The restrictions imposed by our financing agreements on our operations; and
|
•
|
Changes in federal and state tax laws, including the recently enacted Tax Cuts and Jobs Act.
|
ITEM 3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
ITEM 4.
|
CONTROLS AND PROCEDURES
|
PART II.
|
OTHER INFORMATION
|
|
|
PRESTIGE CONSUMER HEALTHCARE INC.
|
|
|
|
|
|
|
|
|
|
|
|
|
Date:
|
November 1, 2018
|
By:
|
/s/ Christine Sacco
|
|
|
|
|
Christine Sacco
|
|
|
|
|
Chief Financial Officer
|
|
|
|
|
(Principal Financial Officer and Duly Authorized Officer)
|
|
|
|
|
|
|
** XBRL information is furnished and not filed for purposes of Section 11 and 12 of the Securities Act of 1933 and Section 18 of the Securities Exchange Act of 1934, and is not subject to liability under those sections, is not part of any registration statement, prospectus or other document to which it relates and is not incorporated or deemed to be incorporated by reference into any registration statement, prospectus or other document.
|
(i)
|
Any willful act by the Participant involving fraud and any breach by the Participant of applicable regulations of competent authorities in relation to trading or dealing with stocks, securities, investments, regulation of the Company’s business and the like;
|
(ii)
|
Attendance at work under the influence of drugs or alcohol or otherwise being found in possession of any prohibited drug or substance, possession of which would amount to a criminal offense;
|
(iii)
|
The Participant’s personal dishonesty or willful misconduct, in each case in connection with his employment by the Company;
|
(iv)
|
Breach of fiduciary duty or breach of the duty of loyalty to the Company;
|
(v)
|
Assault or other act of violence against any employee of the Company or other person during the course of his employment;
|
(vi)
|
The Participant’s conviction of, or entry of a plea of guilty or
nolo contendere
or no contest with respect to: (a) any felony (including pleading guilty or
nolo contendere
to a felony or lesser charge with results from plea bargaining), whether or not such felony, crime or lesser offense is connected with the business of the Company, or (b) any crime connected with the business of the Company;
|
(vii)
|
Intentional breach by the Participant of the Protective Covenants (as defined herein);
|
(viii)
|
The Participant’s violation of the Company’s policy against harassment, its equal employment opportunity policy, or the Company’s code of business conduct, or a material violation of any other policy or procedure of the Company; or
|
(ix)
|
The willful continued failure of the Participant to perform substantially the Participant’s duties with the Company (other than any such failure resulting from incapacity due to Disability) if not cured within 30 days after a written demand for substantial performance is delivered to the Participant by the Board (or, in the case of Tier 2 Participants before a Change in Control, the Company’s Chief Executive Officer) that specifically identifies the manner in which the Board or the Chief Executive Officer, as applicable, believes that the Participant has not substantially performed the Participant’s duties. For clarity, the failure of
|
(i)
|
if any “person” or “group” as those terms are used in Sections 13(d) and 14(d) of the Exchange Act or any successors thereto, other than an Exempt Person, is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act or any successor thereto), directly or indirectly, of securities of the Company representing 50% or more of the combined voting power of the Company’s then outstanding securities; or
|
(ii)
|
during any period of two consecutive years, individuals who at the beginning of such period constitute the Board and any new directors (other than a director whose initial assumption of office is in connection with an actual or threatened election contest, including but not limited to a consent solicitation, relating to the election of directors of the Company) whose election by the Board or nomination for election by the Company’s stockholders was approved by at least two-thirds of the directors then still in office who either were directors at the beginning of the period or whose election was previously so approved, cease for any reason to constitute a majority thereof; or
|
(iii)
|
consummation of a merger or consolidation of the Company with any other corporation, other than a merger or consolidation (A) which would result in all or a portion of the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than 50% of the combined voting power of the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation or (B) where the individuals who comprise the Board immediately prior thereto constitute immediately thereafter at least a majority of the board of directors of the Company, the entity surviving such merger or consolidation or, if the Company or the entity surviving such merger is then a Subsidiary, the ultimate Parent thereof; or
|
(iv)
|
consummation of a plan of complete liquidation of the Company or a sale or disposition by the Company of all or substantially all the Company’s assets, other than a sale to an Exempt Person.
|
(i)
|
Other than his removal for Cause, a material diminution in the Participant’s authority, duties or responsibilities; but excluding, for this purpose an isolated, insubstantial and inadvertent action not taken in bad faith and which is remedied by the Company promptly after receipt of notice thereof given by the Participant;
|
(ii)
|
A material reduction by the Company in the Participant’s Annual Base Salary as in effect from time to time;
|
(iii)
|
A material reduction by the Company in the Participant’s Target Annual Incentive unless, before a Change in Control, such reduction is a part of
|
(iv)
|
After a Change in Control, a material reduction in the Participant’s long-term incentive opportunity;
|
(v)
|
The Company’s requiring the Participant, without his consent, to be based at any office or location more than fifty (50) miles from the Company’s current headquarters in Tarrytown, New York;
provided
,
however
, that Good Reason shall not include any relocation that results in the Participant’s principal office being closer to the Participant’s then-principal residence;
|
(vi)
|
A material breach by the Company, any Subsidiary or any Affiliate of any material written agreement between the Participant and the Company or such Subsidiary or Affiliate; or
|
(vii)
|
The Company’s breach of Section 13(a) hereof.
|
(i)
|
Accrued Benefits
. The Company shall pay or provide to the Participant the sum of: (A) the Participant’s Annual Base Salary earned through the Date of Termination, to the extent not previously paid; (B) any Annual Incentive payable for services rendered in the fiscal year preceding the fiscal year in which the Date of Termination occurs that has not been paid on or prior to the Date of Termination based on actual performance against the target levels; (C) any accrued but unused vacation time in accordance with Company policy; and (D) reimbursement for any unreimbursed business expenses incurred through the Date of Termination in accordance with Company policy (the sum of the amounts described in clauses (A) through (D) shall be referred to as the “
Accrued Benefits
”). The Accrued Benefits shall be paid in a single lump sum within sixty (60) calendar days after the Date of Termination or such earlier date as may be required by the applicable Company plan or policy or by applicable law.
|
(ii)
|
Severance Payments
. The Company shall pay to the Participant an amount equal to the Severance Amount. The Severance Amount shall be subject to applicable withholding and shall be payable:
|
(A)
|
In respect of any Qualified Termination that occurs before or more than twenty-four (24) months following a Change in Control, during the Severance Payment Period in approximately equal installments in accordance with the Company regular payroll practices, commencing with the Company’s first regular payroll that occurs after the sixtieth (60th) day (but in any event not more than seventy-four (74) days) following the Date of Termination; provided that the first such payment shall consist of all amounts payable to the Participant pursuant to this Section 4(a)(ii) between the Date of Termination and the payment date; and
|
(B)
|
In respect of any Qualified Termination that occurs upon or after but not more than twenty-four (24) months following a Change in Control, in a single lump sum within sixty (60) calendar days after the Date of Termination.
|
(iii)
|
COBRA Payments
. If the Participant elects to continue participation in any group medical, dental, vision and/or prescription drug plan benefits to which the Participant and/or the Participant’s eligible dependents would be entitled under Section 4980B of the Code (COBRA), then the Company shall pay to the Participant an amount (the “
COBRA Payments
”) equal to the excess of (x) the COBRA cost of such coverage for each month during the Severance Payment Period over (y) the amount that the Participant would have had to pay for such coverage if
|
(iv)
|
Pro-Rated Annual Incentive
. The Company shall pay to the Participant a pro-rata portion of the Participant’s Annual Incentive for the year in which his Date of Termination occurs. Such amount shall be subject to applicable withholding and shall be payable:
|
(A)
|
In respect of any Qualified Termination that occurs before or more than twenty-four (24) months following a Change in Control, in the amount that would otherwise be paid if his employment had not terminated based on the actual results for such year at the same time that Annual Incentives for such year are paid to other senior executives of the Company and no later than two and one-half months after the year of the Qualified Termination; and
|
(B)
|
In respect of any Qualified Termination that occurs upon or after but not more than twenty-four (24) months following a Change in Control, in a single lump sum within sixty (60) calendar days after the Date of Termination equal to his Target Annual Incentive (or, if greater, the Annual Incentive that would have been payable at the actual level of performance through the Date of Termination);
|
(v)
|
Outplacement Services
. In respect of any Qualified Termination that occurs upon or after but not more than twenty-four (24) months following a Change in Control, outplacement services suitable to Participant’s position until the earlier of (A) the end of the Severance Payment Period and (B) the Participant’s acceptance of an offer of full-time employment from a subsequent employer.
|
(vi)
|
Other Benefits
. To the extent not previously paid or provided, the Company shall pay or provide, or cause to be paid or provided, to the Participant (or his beneficiary or estate) any other amounts or benefits required to be paid or provided or which the Participant is eligible to receive under any plan, program, policy or practice or contract or agreement of the Company (such other amounts and benefits shall be hereinafter referred to as the “
Other Benefits
”) in accordance with the terms and normal procedures of each such plan, program, policy or practice or contract or agreement, based on accrued and vested benefits through the Date of Termination.
|
(i)
|
The Participant acknowledges and agrees that any and all Confidential Information and Protected Works, and all Intellectual Property Rights therein, are the sole and exclusive property of the Company, and that no compensation in addition to the Participant’s base salary is due to the Participant for development, assignment or transfer of Protected Works. The Participant acknowledges and agrees that all Works related to or useful in the business of the Company, whether created within or without the Company’s facilities and before, during or after normal business hours, are specifically intended to be “works made for hire” by the Participant created within the scope of employment with the Company, and constitute Protected Works. The Participant hereby waives any and all moral rights he may have to the Works in the United States and all other countries, including, without limitation, any rights the Participant may have under 17 U.S.C. § 106A.
|
(ii)
|
The Participant will promptly and fully disclose in writing to the Company the existence of any Protected Works and maintain adequate written records of all Protected Works, which records remain the exclusive property of the Company.
|
(iii)
|
The Participant hereby assigns and transfers, and agrees to assign and transfer, all of his rights, title and interest, as and when those rights arise, in any and all Protected Works, including all Intellectual Property Rights
|
(iv)
|
The Participant will, during and after his employment, communicate to the Company any facts known to him regarding the Protected Works and, at the Company’s request, testify in any legal proceedings, sign all lawful papers, make all rightful oaths, execute and deliver all transfers, assignments, instruments and papers (including, without limitation, applications for registration, divisionals, continuations, continuations-in-part, foreign counterparts, or reissue applications) and take such further
|
(i)
|
The Participant understands and acknowledges that his violation of this Section 7 or any section or subsection thereof would cause irreparable harm to Company, and the Company shall be entitled to, in
|
(ii)
|
The Participant acknowledges and agrees that each of the Protective Covenants is reasonable and valid in time and scope and in all other respects. The Company and the Participant agree that it is their intention that the Protective Covenants be enforced in accordance with their terms to the maximum extent permitted by law. Each of the Protective Covenants shall be considered and construed as a separate and independent covenant. Should any part or provision of any of the Protective Covenants be held invalid, void, or unenforceable, such invalidity, voidness, or unenforceability shall not render invalid, void, or unenforceable any other part or provision of this Plan or such Protective Covenant. If any of the provisions of the Protective Covenants should ever be held by a court of competent jurisdiction to exceed the scope permitted by the applicable law, such provision or provisions shall be automatically modified to such lesser scope as such court may deem just and proper for the reasonable protection of the Company’s legitimate business interests and may be enforced by the Company to that extent in the manner described above and all other provisions of this Plan shall be valid and enforceable.
|
(i)
|
General
. This Plan shall be interpreted and administered in a manner so that any amount or benefit payable hereunder shall be paid or provided in a manner that is either exempt from or compliant with the requirements Section 409A of the Code and applicable Internal Revenue Service guidance and Treasury Regulations issued thereunder. Nevertheless, the tax treatment of the benefits provided under this Plan is not warranted or guaranteed. Neither the Company nor Parent nor any of their respective directors, officers, employees or advisers shall be held liable for any taxes, interest, penalties or other monetary amounts owed by any Participant as a result of the application of Section 409A of the Code.
|
(ii)
|
Definitional Restrictions
. Notwithstanding anything in this Plan to the contrary, to the extent that any amount or benefit that would constitute Non-Exempt Deferred Compensation would otherwise be payable or distributable hereunder by reason of a Participant’s termination of employment, such Non-Exempt Deferred Compensation will not be payable or distributable to the Participant by reason of such circumstance unless the circumstances giving rise to such termination of employment meet any description or definition of “separation from service” in Section 409A of the Code and applicable regulations (without giving effect to any elective provisions that may be available under such definition). If this provision prevents the payment or distribution of any Non-Exempt
|
(iii)
|
Treatment of Installment Payments
. Each payment under Section 4(a)(ii), (iii) and (iv) of this Plan, as applicable, including, without limitation, each installment payment, shall be considered a separate payment, as described in Treas. Reg. Section 1.409A-2(b)(2), for purposes of Section 409A of the Code.
|
(iv)
|
Timing of Release of Claims
. Whenever in this Plan a payment or benefit is conditioned on the Participant’s execution of a Release, such Release must be executed and all revocation periods shall have expired within sixty (60) days after the Date of Termination; failing which such payment or benefit shall be forfeited. If such payment or benefit constitutes Non-Exempt Deferred Compensation then, to the extent required to avoid imposition of any tax under Section 409A of the Code, if the timing of execution of the Release affects whether the payment or benefit would commence or be made in the calendar year of the Date of Termination or a subsequent year, the payment or benefit shall commence or be made in the subsequent year.
|
(v)
|
Timing of Reimbursements and In-Kind Benefits
. If the Participant is entitled to be paid or reimbursed for any taxable expenses under this Plan, and such payments or reimbursements are includible in the Participant’s federal gross taxable income, the amount of such expenses reimbursable in any one calendar year shall not affect the amount reimbursable in any other calendar year, and the reimbursement of an eligible expense must be made no later than December 31 of the year after the year in which the expense was incurred. No right of the Participant to reimbursement of expenses under the Plan shall be subject to liquidation or exchange for another benefit.
|
(vi)
|
Permitted Acceleration
. The Company shall have the sole authority to make any accelerated distribution permissible under Treas. Reg. Section 1.409A-3(j)(4) to a Participant of deferred amounts, provided that such distribution meets the requirements of Treas. Reg. Section 1.409A-3(j)(4).
|
(vii)
|
Six-Month Delay in Certain Circumstances
. Notwithstanding anything in the Plan to the contrary, if any amount or benefit that would constitute Non-Exempt Deferred Compensation would otherwise be payable or distributable under this Plan by reason of a Participant’s separation from service during a period in which the Participant is a Specified Employee (as defined below), then, subject to any permissible acceleration of payment by the Committee under Treas. Reg. Section 1.409A-3(j)(4)(ii) (domestic relations order), (j)(4)(iii) (conflicts of interest), or (j)(4)(vi) (payment of employment taxes): (i) the amount of such Non-Exempt Deferred Compensation that would otherwise be payable during the six-
|
(viii)
|
Coordination of Benefits
. Notwithstanding anything in the Plan to the contrary, if any severance payable under a plan or agreement covering a Participant as of the date such Participant becomes eligible to participate in this Plan constitutes deferred compensation under Section 409A of the Code, then to the extent required to avoid accelerated taxation and/or tax penalties under Section 409A of the Code, the portion of the benefits payable hereunder equal to such other amount shall instead be provided in the form set forth in such other plan or agreement. Further, to the extent, if any, that provisions of this Plan affect the time or form of payment of any amount which constitutes deferred compensation under Section 409A of the Code, then to the extent required to avoid accelerated taxation and/or tax penalties under Section 409A of the Code, if the Change in Control does not constitute a change in control event under Section 409A of the Code, the time and form (but not the amount) of payment shall be the time and form that would have been applicable in absence of a Change in Control.
|
(i)
|
Notwithstanding anything in this the Plan to the contrary, in the event it shall be determined that any payment or distribution by the Company to or for the benefit of the Participant (whether paid or payable or distributed or distributable pursuant to the terms of this the Plan or otherwise) (such benefits, payments or distributions are hereinafter referred to as “
Payments
”) would, if paid, be subject to the excise tax imposed by Section 4999 of the Code (the “
Excise Tax
”), then, prior to the making of any Payments to the Participant, a calculation shall be made comparing (i) the net after-tax benefit to the Participant of the Payments after payment by the Participant of the Excise Tax, to (ii) the net after-tax benefit to the Participant if the Payments had been limited to the extent necessary to avoid being subject to the Excise Tax. If the amount calculated under (i) above is less than the amount calculated under (ii) above, then the Payments shall be limited to the extent necessary to avoid being subject to the Excise Tax (the “
Reduced Amount
”). The reduction of the Payments due hereunder, if applicable, shall be made by first reducing cash Payments and then, to the extent necessary, reducing those Payments having the next highest ratio of Parachute Value to actual present value of such Payments as of the date
|
(ii)
|
All determinations required to be made under this Section 9(b), including whether an Excise Tax would otherwise be imposed, whether the Payments shall be reduced, the amount of the Reduced Amount, and the assumptions to be utilized in arriving at such determinations, shall be made by a nationally recognized accounting firm or compensation consulting firm mutually acceptable to the Company and the Participant (the “
Determination Firm
”) which shall provide detailed supporting calculations both to the Company and the Participant within 15 business days after the receipt of notice from the Participant that a Payment is due to be made, or such earlier time as is requested by the Company. All fees and expenses of the Determination Firm shall be borne solely by the Company. Any determination by the Determination Firm shall be binding upon the Company and the Participant. As a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Determination Firm hereunder, it is possible that Payments which the Participant was entitled to, but did not receive pursuant to Section 9(b)(i), could have been made without the imposition of the Excise Tax (“
Underpayment
”), consistent with the calculations required to be made hereunder. In such event, the Determination Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to or for the benefit of the Participant but no later than March 15 of the year after the year in which the Underpayment is determined to exist, which is when the legally binding right to such Underpayment arises.
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Prestige Consumer Healthcare Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date:
|
November 1, 2018
|
/s/ Ronald M. Lombardi
|
|
|
|
Ronald M. Lombardi
|
|
|
|
Chief Executive Officer
|
|
|
|
(Principal Executive Officer)
|
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Prestige Consumer Healthcare Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date:
|
November 1, 2018
|
/s/ Christine Sacco
|
|
|
|
Christine Sacco
|
|
|
|
Chief Financial Officer
|
|
|
|
(Principal Financial Officer)
|
|
|
|
/s/ Ronald M. Lombardi
|
|
|
|
Name: Ronald M. Lombardi
|
|
|
|
Title:
Chief Executive Officer
|
|
|
|
(Principal Executive Officer)
|
|
|
|
Date: November 1, 2018
|
|
|
|
/s/ Christine Sacco
|
|
|
|
Name: Christine Sacco
|
|
|
|
Title:
Chief Financial Officer
|
|
|
|
(Principal Financial Officer)
|
|
|
|
Date: November 1, 2018
|
|