[ X ]
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
For the quarterly period ended December 31, 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)
|
|
(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 nine months ended December 31, 2018 and 2017 (unaudited)
|
|
|
Condensed Consolidated Balance Sheets as of December 31, 2018 and March 31, 2018 (unaudited)
|
|
|
Condensed Consolidated Statements of Cash Flows for the nine months ended December 31, 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 6.
|
Exhibits
|
|
|
|
|
|
Signatures
|
|
|
|
|
PART I.
|
FINANCIAL INFORMATION
|
ITEM 1.
|
FINANCIAL STATEMENTS
|
|
Three Months Ended December 31,
|
|
Nine Months Ended December 31,
|
||||||||||||
(In thousands, except per share data)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Revenues
|
|
|
|
|
|
|
|
||||||||
Net sales
|
$
|
241,411
|
|
|
$
|
270,522
|
|
|
$
|
734,719
|
|
|
$
|
784,939
|
|
Other revenues
|
3
|
|
|
93
|
|
|
32
|
|
|
275
|
|
||||
Total revenues
|
241,414
|
|
|
270,615
|
|
|
734,751
|
|
|
785,214
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||||
Cost of Sales
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cost of sales excluding depreciation
|
100,997
|
|
|
121,730
|
|
|
313,713
|
|
|
346,067
|
|
||||
Cost of sales depreciation
|
1,182
|
|
|
1,211
|
|
|
3,708
|
|
|
3,899
|
|
||||
Cost of sales
|
102,179
|
|
|
122,941
|
|
|
317,421
|
|
|
349,966
|
|
||||
Gross profit
|
139,235
|
|
|
147,674
|
|
|
417,330
|
|
|
435,248
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||||
Operating Expenses
|
|
|
|
|
|
|
|
|
|
|
|
||||
Advertising and promotion
|
34,504
|
|
|
35,835
|
|
|
108,657
|
|
|
111,967
|
|
||||
General and administrative
|
20,485
|
|
|
20,820
|
|
|
68,460
|
|
|
63,229
|
|
||||
Depreciation and amortization
|
6,705
|
|
|
7,129
|
|
|
20,545
|
|
|
21,482
|
|
||||
Gain on divestiture
|
—
|
|
|
—
|
|
|
(1,284
|
)
|
|
—
|
|
||||
Total operating expenses
|
61,694
|
|
|
63,784
|
|
|
196,378
|
|
|
196,678
|
|
||||
Operating income
|
77,541
|
|
|
83,890
|
|
|
220,952
|
|
|
238,570
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Other (income) expense
|
|
|
|
|
|
|
|
|
|
||||||
Interest income
|
(39
|
)
|
|
(119
|
)
|
|
(172
|
)
|
|
(273
|
)
|
||||
Interest expense
|
26,366
|
|
|
25,983
|
|
|
79,509
|
|
|
79,314
|
|
||||
Other expense (income), net
|
218
|
|
|
387
|
|
|
640
|
|
|
(119
|
)
|
||||
Total other expense
|
26,545
|
|
|
26,251
|
|
|
79,977
|
|
|
78,922
|
|
||||
Income before income taxes
|
50,996
|
|
|
57,639
|
|
|
140,975
|
|
|
159,648
|
|
||||
Provision (benefit) for income taxes
|
12,829
|
|
|
(257,154
|
)
|
|
37,501
|
|
|
(219,609
|
)
|
||||
Net income
|
$
|
38,167
|
|
|
$
|
314,793
|
|
|
$
|
103,474
|
|
|
$
|
379,257
|
|
|
|
|
|
|
|
|
|
||||||||
Earnings per share:
|
|
|
|
|
|
|
|
|
|
||||||
Basic
|
$
|
0.74
|
|
|
$
|
5.93
|
|
|
$
|
1.99
|
|
|
$
|
7.14
|
|
Diluted
|
$
|
0.73
|
|
|
$
|
5.88
|
|
|
$
|
1.97
|
|
|
$
|
7.08
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
|
|
||||||
Basic
|
51,881
|
|
|
53,129
|
|
|
52,119
|
|
|
53,089
|
|
||||
Diluted
|
52,202
|
|
|
53,543
|
|
|
52,431
|
|
|
53,531
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Comprehensive income, net of tax:
|
|
|
|
|
|
|
|
||||||||
Currency translation adjustments
|
(2,020
|
)
|
|
4,492
|
|
|
(7,139
|
)
|
|
8,327
|
|
||||
Unrecognized net gain on pension plans
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||
Total other comprehensive (loss) income
|
(2,020
|
)
|
|
4,492
|
|
|
(7,139
|
)
|
|
8,328
|
|
||||
Comprehensive income
|
$
|
36,147
|
|
|
$
|
319,285
|
|
|
$
|
96,335
|
|
|
$
|
387,585
|
|
(In thousands)
|
December 31, 2018
|
|
March 31, 2018
|
||||
|
|
|
|
||||
Assets
|
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
24,672
|
|
|
$
|
32,548
|
|
Accounts receivable, net of allowance of $13,444 and $12,734, respectively
|
140,584
|
|
|
140,881
|
|
||
Inventories
|
120,368
|
|
|
118,547
|
|
||
Prepaid expenses and other current assets
|
7,553
|
|
|
11,501
|
|
||
Total current assets
|
293,177
|
|
|
303,477
|
|
||
|
|
|
|
||||
Property, plant and equipment, net
|
51,567
|
|
|
52,552
|
|
||
Goodwill
|
611,956
|
|
|
620,098
|
|
||
Intangible assets, net
|
2,707,825
|
|
|
2,780,916
|
|
||
Other long-term assets
|
3,557
|
|
|
3,569
|
|
||
Total Assets
|
$
|
3,668,082
|
|
|
$
|
3,760,612
|
|
|
|
|
|
||||
Liabilities and Stockholders' Equity
|
|
|
|
|
|
||
Current liabilities
|
|
|
|
|
|
||
Accounts payable
|
$
|
48,988
|
|
|
$
|
61,390
|
|
Accrued interest payable
|
13,646
|
|
|
9,708
|
|
||
Other accrued liabilities
|
66,182
|
|
|
52,101
|
|
||
Total current liabilities
|
128,816
|
|
|
123,199
|
|
||
|
|
|
|
||||
Long-term debt, net
|
1,842,288
|
|
|
1,992,952
|
|
||
Deferred income tax liabilities
|
443,587
|
|
|
442,518
|
|
||
Other long-term liabilities
|
20,271
|
|
|
23,333
|
|
||
Total Liabilities
|
2,434,962
|
|
|
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 - 53,670 shares at December 31, 2018 and 53,396 shares at March 31, 2018
|
536
|
|
|
534
|
|
||
Additional paid-in capital
|
477,872
|
|
|
468,783
|
|
||
Treasury stock, at cost - 1,871 shares at December 31, 2018 and 353 shares at March 31, 2018
|
(59,928
|
)
|
|
(7,669
|
)
|
||
Accumulated other comprehensive loss, net of tax
|
(26,454
|
)
|
|
(19,315
|
)
|
||
Retained earnings
|
841,094
|
|
|
736,277
|
|
||
Total Stockholders' Equity
|
1,233,120
|
|
|
1,178,610
|
|
||
Total Liabilities and Stockholders' Equity
|
$
|
3,668,082
|
|
|
$
|
3,760,612
|
|
|
Nine Months Ended December 31,
|
||||||
(In thousands)
|
2018
|
|
2017
|
||||
Operating Activities
|
|
|
|
||||
Net income
|
$
|
103,474
|
|
|
$
|
379,257
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|||
Depreciation and amortization
|
24,253
|
|
|
25,381
|
|
||
Gain on divestiture
|
(1,284
|
)
|
|
—
|
|
||
Loss on disposal of property and equipment
|
197
|
|
|
1,510
|
|
||
Deferred income taxes
|
3,309
|
|
|
(256,850
|
)
|
||
Amortization of debt origination costs
|
4,543
|
|
|
4,746
|
|
||
Excess tax benefits from share-based awards
|
—
|
|
|
470
|
|
||
Stock-based compensation costs
|
6,160
|
|
|
6,912
|
|
||
Write-off of indemnification asset
|
—
|
|
|
704
|
|
||
Other
|
247
|
|
|
—
|
|
||
Lease termination costs
|
—
|
|
|
214
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
|
|||
Accounts receivable
|
5,398
|
|
|
(14,073
|
)
|
||
Inventories
|
(11,081
|
)
|
|
1,167
|
|
||
Prepaid expenses and other current assets
|
4,073
|
|
|
18,935
|
|
||
Accounts payable
|
(12,787
|
)
|
|
(11,036
|
)
|
||
Accrued liabilities
|
13,260
|
|
|
(1,033
|
)
|
||
Pension and deferred compensation contribution
|
—
|
|
|
(329
|
)
|
||
Other
|
(1,325
|
)
|
|
(303
|
)
|
||
Net cash provided by operating activities
|
138,437
|
|
|
155,672
|
|
||
|
|
|
|
||||
Investing Activities
|
|
|
|
|
|
||
Purchases of property, plant and equipment
|
(7,139
|
)
|
|
(9,656
|
)
|
||
Acquisition of Fleet escrow receipt
|
—
|
|
|
970
|
|
||
Proceeds from divestiture
|
65,912
|
|
|
—
|
|
||
Net cash provided by (used in) investing activities
|
58,773
|
|
|
(8,686
|
)
|
||
|
|
|
|
||||
Financing Activities
|
|
|
|
|
|
||
Term loan repayments
|
(155,000
|
)
|
|
(125,000
|
)
|
||
Borrowings under revolving credit agreement
|
45,000
|
|
|
20,000
|
|
||
Repayments under revolving credit agreement
|
(45,000
|
)
|
|
(40,000
|
)
|
||
Proceeds from exercise of stock options
|
2,931
|
|
|
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
|
(204,328
|
)
|
|
(144,609
|
)
|
||
|
|
|
|
||||
Effects of exchange rate changes on cash and cash equivalents
|
(758
|
)
|
|
1,144
|
|
||
(Decrease) increase in cash and cash equivalents
|
(7,876
|
)
|
|
3,521
|
|
||
Cash and cash equivalents - beginning of period
|
32,548
|
|
|
41,855
|
|
||
Cash and cash equivalents - end of period
|
$
|
24,672
|
|
|
$
|
45,376
|
|
|
|
|
|
||||
Interest paid
|
$
|
69,955
|
|
|
$
|
73,779
|
|
Income taxes paid
|
$
|
19,070
|
|
|
$
|
16,861
|
|
(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
|
|
|
1,926
|
|
|
54,027
|
|
|||
Deferred income tax liabilities
|
442,518
|
|
|
401
|
|
|
442,919
|
|
|||
Retained earnings
|
736,277
|
|
|
1,343
|
|
|
737,620
|
|
|
Three Months Ended December 31, 2018
|
|
Nine Months Ended December 31, 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
|
$
|
241,414
|
|
|
$
|
13,618
|
|
|
$
|
255,032
|
|
|
$
|
734,751
|
|
|
$
|
(8,492
|
)
|
|
$
|
726,259
|
|
Cost of sales
|
$
|
102,179
|
|
|
$
|
5,140
|
|
|
$
|
107,319
|
|
|
$
|
317,421
|
|
|
$
|
(3,256
|
)
|
|
$
|
314,165
|
|
Total operating expenses
|
$
|
61,694
|
|
|
$
|
391
|
|
|
$
|
62,085
|
|
|
$
|
196,378
|
|
|
$
|
(188
|
)
|
|
$
|
196,190
|
|
Income before income taxes
|
$
|
50,996
|
|
|
$
|
8,087
|
|
|
$
|
59,083
|
|
|
$
|
140,975
|
|
|
$
|
(5,048
|
)
|
|
$
|
135,927
|
|
Provision (benefit) for income taxes
|
$
|
12,829
|
|
|
$
|
2,038
|
|
|
$
|
14,867
|
|
|
$
|
37,501
|
|
|
$
|
(1,714
|
)
|
|
$
|
35,787
|
|
Net income
|
$
|
38,167
|
|
|
$
|
6,049
|
|
|
$
|
44,216
|
|
|
$
|
103,474
|
|
|
$
|
(3,334
|
)
|
|
$
|
100,140
|
|
(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)
|
December 31, 2018
|
|
March 31, 2018
|
||||
Components of Inventories
|
|
|
|
||||
Packaging and raw materials
|
$
|
16,834
|
|
|
$
|
13,112
|
|
Work in process
|
307
|
|
|
157
|
|
||
Finished goods
|
103,227
|
|
|
105,278
|
|
||
Inventories
|
$
|
120,368
|
|
|
$
|
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:
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Goodwill
|
—
|
|
|
—
|
|
|
(71,405
|
)
|
|
(71,405
|
)
|
||||
|
Accumulated impairment loss
|
—
|
|
|
—
|
|
|
65,160
|
|
|
65,160
|
|
||||
|
Effects of foreign currency exchange rates
|
—
|
|
|
(1,897
|
)
|
|
—
|
|
|
(1,897
|
)
|
||||
Balance - December 31, 2018
|
|
|
|
|
|
|
|
|||||||||
|
Goodwill
|
711,104
|
|
|
31,022
|
|
|
—
|
|
|
742,126
|
|
||||
|
Accumulated impairment loss
|
(130,170
|
)
|
|
—
|
|
|
—
|
|
|
(130,170
|
)
|
||||
Balance - December 31, 2018
|
$
|
580,934
|
|
|
$
|
31,022
|
|
|
$
|
—
|
|
|
$
|
611,956
|
|
|
|
|
|
|
|
|
|
|
|
(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
|
(6,921
|
)
|
|
(383
|
)
|
|
(7,304
|
)
|
|||
Balance — December 31, 2018
|
2,452,820
|
|
|
406,042
|
|
|
2,858,862
|
|
|||
|
|
|
|
|
|
|
|
|
|||
Accumulated Amortization
|
|
|
|
|
|
|
|
|
|||
Balance — March 31, 2018
|
—
|
|
|
150,701
|
|
|
150,701
|
|
|||
Additions
|
—
|
|
|
16,548
|
|
|
16,548
|
|
|||
Reductions
|
—
|
|
|
(16,136
|
)
|
|
(16,136
|
)
|
|||
Effects of foreign currency exchange rates
|
—
|
|
|
(76
|
)
|
|
(76
|
)
|
|||
Balance — December 31, 2018
|
—
|
|
|
151,037
|
|
|
151,037
|
|
|||
|
|
|
|
|
|
||||||
Intangible assets, net — December 31, 2018
|
$
|
2,452,820
|
|
|
$
|
255,005
|
|
|
$
|
2,707,825
|
|
(In thousands)
|
December 31, 2018
|
|
March 31, 2018
|
||||
Accrued marketing costs
|
$
|
31,084
|
|
|
$
|
21,473
|
|
Accrued compensation costs
|
8,844
|
|
|
10,591
|
|
||
Accrued broker commissions
|
2,009
|
|
|
1,487
|
|
||
Income taxes payable
|
6,218
|
|
|
1,901
|
|
||
Accrued professional fees
|
1,820
|
|
|
2,244
|
|
||
Accrued production costs
|
5,503
|
|
|
7,392
|
|
||
Other accrued liabilities
|
10,704
|
|
|
7,013
|
|
||
|
$
|
66,182
|
|
|
$
|
52,101
|
|
(In thousands, except percentages)
|
|
December 31, 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.
|
|
783,000
|
|
|
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
|
|
1,858,000
|
|
|
2,013,000
|
|
||
Less: unamortized debt costs
|
|
(15,712
|
)
|
|
(20,048
|
)
|
||
Long-term debt, net
|
|
$
|
1,842,288
|
|
|
$
|
1,992,952
|
|
|
|
December 31, 2018
|
|
March 31, 2018
|
||||||||||||
(In thousands)
|
|
Carrying Value
|
|
Fair Value
|
|
Carrying Value
|
|
Fair Value
|
||||||||
2016 Senior Notes
|
|
$
|
600,000
|
|
|
$
|
582,000
|
|
|
$
|
600,000
|
|
|
$
|
610,500
|
|
2013 Senior Notes
|
|
400,000
|
|
|
391,000
|
|
|
400,000
|
|
|
402,000
|
|
||||
2012 Term B-5 Loans
|
|
783,000
|
|
|
749,723
|
|
|
938,000
|
|
|
939,173
|
|
||||
2012 ABL Revolver
|
|
75,000
|
|
|
75,000
|
|
|
75,000
|
|
|
75,000
|
|
(In thousands)
|
December 31, 2018
|
|
March 31, 2018
|
||||
Components of Accumulated Other Comprehensive Loss
|
|
|
|
||||
Cumulative translation adjustment
|
$
|
(27,537
|
)
|
|
$
|
(20,398
|
)
|
Unrecognized net gain on pension plans
|
1,083
|
|
|
1,083
|
|
||
Accumulated other comprehensive loss, net of tax
|
$
|
(26,454
|
)
|
|
$
|
(19,315
|
)
|
|
|
Three Months Ended December 31,
|
|
Nine Months Ended December 31,
|
||||||||||||
(In thousands, except per share data)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Numerator
|
|
|
|
|
|
|
|
|
||||||||
Net income
|
|
$
|
38,167
|
|
|
$
|
314,793
|
|
|
$
|
103,474
|
|
|
$
|
379,257
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Denominator
|
|
|
|
|
|
|
|
|
|
|
||||||
Denominator for basic earnings per share — weighted average shares outstanding
|
|
51,881
|
|
|
53,129
|
|
|
52,119
|
|
|
53,089
|
|
||||
Dilutive effect of nonvested restricted stock units and options issued to employees and directors
|
|
321
|
|
|
414
|
|
|
312
|
|
|
442
|
|
||||
Denominator for diluted earnings per share
|
|
52,202
|
|
|
53,543
|
|
|
52,431
|
|
|
53,531
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||||
Earnings per Common Share:
|
|
|
|
|
|
|
|
|
|
|
||||||
Basic earnings per share
|
|
$
|
0.74
|
|
|
$
|
5.93
|
|
|
$
|
1.99
|
|
|
$
|
7.14
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Diluted earnings per share
|
|
$
|
0.73
|
|
|
$
|
5.88
|
|
|
$
|
1.97
|
|
|
$
|
7.08
|
|
RSUs
|
|
Shares
(in thousands)
|
|
Weighted
Average
Grant-Date
Fair Value
|
|||
Nine Months Ended December 31, 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
|
|
(8.8
|
)
|
|
48.49
|
|
|
Vested and nonvested at December 31, 2017
|
|
393.8
|
|
|
44.14
|
|
|
Vested at December 31, 2017
|
|
90.5
|
|
|
29.88
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended December 31, 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 December 31, 2018
|
|
413.0
|
|
|
36.58
|
|
|
Vested at December 31, 2018
|
|
113.2
|
|
|
31.05
|
|
|
|
Nine Months Ended December 31,
|
||||||
|
|
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)
|
|||||
Nine Months Ended December 31, 2017
|
|
|
|
|
|
|
|
|
|||||
Outstanding at March 31, 2017
|
|
772.3
|
|
|
$
|
37.70
|
|
|
|
|
|
||
Granted
|
|
182.8
|
|
|
56.11
|
|
|
|
|
|
|||
Exercised
|
|
(51.0
|
)
|
|
28.76
|
|
|
|
|
|
|||
Forfeited or expired
|
|
(22.1
|
)
|
|
48.15
|
|
|
|
|
|
|||
Outstanding at December 31, 2017
|
|
882.0
|
|
|
41.77
|
|
|
7.2
|
|
$
|
7,019
|
|
|
Exercisable at December 31, 2017
|
|
502.9
|
|
|
32.50
|
|
|
6.1
|
|
$
|
6,884
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Nine Months Ended December 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
||
Outstanding at March 31, 2018
|
|
873.2
|
|
|
$
|
41.79
|
|
|
|
|
|
||
Granted
|
|
294.5
|
|
|
29.46
|
|
|
|
|
|
|||
Exercised
|
|
(97.7
|
)
|
|
30.02
|
|
|
|
|
|
|||
Forfeited or expired
|
|
(125.4
|
)
|
|
47.16
|
|
|
|
|
|
|||
Outstanding at December 31, 2018
|
|
944.6
|
|
|
38.45
|
|
|
7.2
|
|
$
|
2,477
|
|
|
Exercisable at December 31, 2018
|
|
499.4
|
|
|
37.87
|
|
|
5.8
|
|
$
|
2,076
|
|
|
|
Three Months Ended December 31,
|
|
Nine Months Ended December 31,
|
||||||||||||
(In thousands)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Interest cost
|
|
$
|
599
|
|
|
$
|
631
|
|
|
$
|
1,819
|
|
|
$
|
1,894
|
|
Expected return on assets
|
|
(767
|
)
|
|
(725
|
)
|
|
(2,303
|
)
|
|
(2,176
|
)
|
||||
Net periodic benefit income
|
|
$
|
(168
|
)
|
|
$
|
(94
|
)
|
|
$
|
(484
|
)
|
|
$
|
(282
|
)
|
|
Three Months Ended December 31, 2018
|
||||||||||||||
(In thousands)
|
North American OTC
Healthcare |
|
International OTC
Healthcare |
|
Household
Cleaning |
|
Consolidated
|
||||||||
Total segment revenues*
|
$
|
216,776
|
|
|
$
|
24,638
|
|
|
$
|
—
|
|
|
$
|
241,414
|
|
Cost of sales
|
91,594
|
|
|
10,585
|
|
|
—
|
|
|
102,179
|
|
||||
Gross profit
|
125,182
|
|
|
14,053
|
|
|
—
|
|
|
139,235
|
|
||||
Advertising and promotion
|
30,316
|
|
|
4,188
|
|
|
—
|
|
|
34,504
|
|
||||
Contribution margin
|
$
|
94,866
|
|
|
$
|
9,865
|
|
|
$
|
—
|
|
|
104,731
|
|
|
Other operating expenses
|
|
|
|
|
|
|
|
|
27,190
|
|
|||||
Operating income
|
|
|
|
|
|
|
|
|
77,541
|
|
|||||
Other expense
|
|
|
|
|
|
|
|
|
26,545
|
|
|||||
Income before income taxes
|
|
|
|
|
|
|
|
|
50,996
|
|
|||||
Provision for income taxes
|
|
|
|
|
|
|
|
|
12,829
|
|
|||||
Net income
|
|
|
|
|
|
|
|
|
$
|
38,167
|
|
|
Nine Months Ended December 31, 2018
|
||||||||||||||
(In thousands)
|
North American OTC
Healthcare |
|
International OTC
Healthcare |
|
Household
Cleaning
|
|
Consolidated
|
||||||||
Total segment revenues*
|
$
|
647,501
|
|
|
$
|
67,439
|
|
|
$
|
19,811
|
|
|
$
|
734,751
|
|
Cost of sales
|
272,754
|
|
|
28,079
|
|
|
16,588
|
|
|
317,421
|
|
||||
Gross profit
|
374,747
|
|
|
39,360
|
|
|
3,223
|
|
|
417,330
|
|
||||
Advertising and promotion
|
96,899
|
|
|
11,328
|
|
|
430
|
|
|
108,657
|
|
||||
Contribution margin
|
$
|
277,848
|
|
|
$
|
28,032
|
|
|
$
|
2,793
|
|
|
308,673
|
|
|
Other operating expenses
|
|
|
|
|
|
|
|
|
|
87,721
|
|
||||
Operating income
|
|
|
|
|
|
|
|
|
|
220,952
|
|
||||
Other expense
|
|
|
|
|
|
|
|
|
|
79,977
|
|
||||
Income before income taxes
|
|
|
|
|
|
|
|
|
|
140,975
|
|
||||
Provision for income taxes
|
|
|
|
|
|
|
|
|
|
37,501
|
|
||||
Net income
|
|
|
|
|
|
|
|
|
|
$
|
103,474
|
|
|
Three Months Ended December 31, 2017
|
||||||||||||||
(In thousands)
|
North American OTC
Healthcare |
|
International OTC
Healthcare |
|
Household
Cleaning |
|
Consolidated
|
||||||||
Total segment revenues*
|
$
|
225,695
|
|
|
$
|
25,717
|
|
|
$
|
19,203
|
|
|
$
|
270,615
|
|
Cost of sales
|
95,164
|
|
|
10,511
|
|
|
17,266
|
|
|
122,941
|
|
||||
Gross profit
|
130,531
|
|
|
15,206
|
|
|
1,937
|
|
|
147,674
|
|
||||
Advertising and promotion
|
30,794
|
|
|
4,544
|
|
|
497
|
|
|
35,835
|
|
||||
Contribution margin
|
$
|
99,737
|
|
|
$
|
10,662
|
|
|
$
|
1,440
|
|
|
111,839
|
|
|
Other operating expenses
|
|
|
|
|
|
|
|
|
27,949
|
|
|||||
Operating income
|
|
|
|
|
|
|
|
|
83,890
|
|
|||||
Other expense
|
|
|
|
|
|
|
|
|
26,251
|
|
|||||
Income before income taxes
|
|
|
|
|
|
|
|
|
57,639
|
|
|||||
Benefit for income taxes
|
|
|
|
|
|
|
|
|
(257,154
|
)
|
|||||
Net income
|
|
|
|
|
|
|
|
|
$
|
314,793
|
|
|
Nine Months Ended December 31, 2017
|
||||||||||||||
(In thousands)
|
North American OTC
Healthcare |
|
International OTC
Healthcare |
|
Household
Cleaning
|
|
Consolidated
|
||||||||
Total segment revenues*
|
$
|
656,812
|
|
|
$
|
67,572
|
|
|
$
|
60,830
|
|
|
$
|
785,214
|
|
Cost of sales
|
268,849
|
|
|
29,757
|
|
|
51,360
|
|
|
349,966
|
|
||||
Gross profit
|
387,963
|
|
|
37,815
|
|
|
9,470
|
|
|
435,248
|
|
||||
Advertising and promotion
|
98,666
|
|
|
11,827
|
|
|
1,474
|
|
|
111,967
|
|
||||
Contribution margin
|
$
|
289,297
|
|
|
$
|
25,988
|
|
|
$
|
7,996
|
|
|
323,281
|
|
|
Other operating expenses
|
|
|
|
|
|
|
|
|
84,711
|
|
|||||
Operating income
|
|
|
|
|
|
|
|
|
238,570
|
|
|||||
Other expense
|
|
|
|
|
|
|
|
|
78,922
|
|
|||||
Income before income taxes
|
|
|
|
|
|
|
|
|
159,648
|
|
|||||
Benefit for income taxes
|
|
|
|
|
|
|
|
|
(219,609
|
)
|
|||||
Net income
|
|
|
|
|
|
|
|
|
$
|
379,257
|
|
|
Three Months Ended December 31, 2018
|
||||||||||||||
(In thousands)
|
North American OTC
Healthcare |
|
International OTC
Healthcare |
|
Household
Cleaning |
|
Consolidated
|
||||||||
Analgesics
|
$
|
29,325
|
|
|
$
|
136
|
|
|
$
|
—
|
|
|
$
|
29,461
|
|
Cough & Cold
|
27,137
|
|
|
4,584
|
|
|
—
|
|
|
31,721
|
|
||||
Women's Health
|
60,946
|
|
|
3,306
|
|
|
—
|
|
|
64,252
|
|
||||
Gastrointestinal
|
30,737
|
|
|
10,321
|
|
|
—
|
|
|
41,058
|
|
||||
Eye & Ear Care
|
23,352
|
|
|
3,164
|
|
|
—
|
|
|
26,516
|
|
||||
Dermatologicals
|
21,508
|
|
|
470
|
|
|
—
|
|
|
21,978
|
|
||||
Oral Care
|
22,177
|
|
|
2,656
|
|
|
—
|
|
|
24,833
|
|
||||
Other OTC
|
1,594
|
|
|
1
|
|
|
—
|
|
|
1,595
|
|
||||
Household Cleaning
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total segment revenues
|
$
|
216,776
|
|
|
$
|
24,638
|
|
|
$
|
—
|
|
|
$
|
241,414
|
|
|
Nine Months Ended December 31, 2018
|
||||||||||||||
(In thousands)
|
North American OTC
Healthcare |
|
International OTC
Healthcare |
|
Household
Cleaning |
|
Consolidated
|
||||||||
Analgesics
|
$
|
86,221
|
|
|
$
|
418
|
|
|
$
|
—
|
|
|
$
|
86,639
|
|
Cough & Cold
|
63,843
|
|
|
15,489
|
|
|
—
|
|
|
79,332
|
|
||||
Women's Health
|
186,037
|
|
|
8,833
|
|
|
—
|
|
|
194,870
|
|
||||
Gastrointestinal
|
94,065
|
|
|
24,261
|
|
|
—
|
|
|
118,326
|
|
||||
Eye & Ear Care
|
73,669
|
|
|
8,778
|
|
|
—
|
|
|
82,447
|
|
||||
Dermatologicals
|
71,968
|
|
|
1,607
|
|
|
—
|
|
|
73,575
|
|
||||
Oral Care
|
67,516
|
|
|
8,050
|
|
|
—
|
|
|
75,566
|
|
||||
Other OTC
|
4,182
|
|
|
3
|
|
|
—
|
|
|
4,185
|
|
||||
Household Cleaning
|
—
|
|
|
—
|
|
|
19,811
|
|
|
19,811
|
|
||||
Total segment revenues
|
$
|
647,501
|
|
|
$
|
67,439
|
|
|
$
|
19,811
|
|
|
$
|
734,751
|
|
|
Three Months Ended December 31, 2017
|
||||||||||||||
(In thousands)
|
North American OTC
Healthcare |
|
International OTC
Healthcare |
|
Household
Cleaning |
|
Consolidated
|
||||||||
Analgesics
|
$
|
31,293
|
|
|
$
|
160
|
|
|
$
|
—
|
|
|
$
|
31,453
|
|
Cough & Cold
|
28,761
|
|
|
4,331
|
|
|
—
|
|
|
33,092
|
|
||||
Women's Health
|
63,107
|
|
|
2,940
|
|
|
—
|
|
|
66,047
|
|
||||
Gastrointestinal
|
29,392
|
|
|
11,251
|
|
|
—
|
|
|
40,643
|
|
||||
Eye & Ear Care
|
21,631
|
|
|
3,205
|
|
|
—
|
|
|
24,836
|
|
||||
Dermatologicals
|
22,736
|
|
|
562
|
|
|
—
|
|
|
23,298
|
|
||||
Oral Care
|
27,144
|
|
|
3,267
|
|
|
—
|
|
|
30,411
|
|
||||
Other OTC
|
1,631
|
|
|
1
|
|
|
—
|
|
|
1,632
|
|
||||
Household Cleaning
|
—
|
|
|
—
|
|
|
19,203
|
|
|
19,203
|
|
||||
Total segment revenues
|
$
|
225,695
|
|
|
$
|
25,717
|
|
|
$
|
19,203
|
|
|
$
|
270,615
|
|
|
Nine Months Ended December 31, 2017
|
||||||||||||||
(In thousands)
|
North American OTC
Healthcare |
|
International OTC
Healthcare |
|
Household
Cleaning |
|
Consolidated
|
||||||||
Analgesics
|
$
|
89,931
|
|
|
$
|
709
|
|
|
$
|
—
|
|
|
$
|
90,640
|
|
Cough & Cold
|
67,738
|
|
|
13,603
|
|
|
—
|
|
|
81,341
|
|
||||
Women's Health
|
187,688
|
|
|
8,440
|
|
|
—
|
|
|
196,128
|
|
||||
Gastrointestinal
|
88,145
|
|
|
25,123
|
|
|
—
|
|
|
113,268
|
|
||||
Eye & Ear Care
|
69,437
|
|
|
8,850
|
|
|
—
|
|
|
78,287
|
|
||||
Dermatologicals
|
72,688
|
|
|
1,587
|
|
|
—
|
|
|
74,275
|
|
||||
Oral Care
|
77,026
|
|
|
9,256
|
|
|
—
|
|
|
86,282
|
|
||||
Other OTC
|
4,159
|
|
|
4
|
|
|
—
|
|
|
4,163
|
|
||||
Household Cleaning
|
—
|
|
|
—
|
|
|
60,830
|
|
|
60,830
|
|
||||
Total segment revenues
|
$
|
656,812
|
|
|
$
|
67,572
|
|
|
$
|
60,830
|
|
|
$
|
785,214
|
|
|
Three Months Ended December 31,
|
|
Nine Months Ended December 31,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
United States
|
$
|
204,943
|
|
|
$
|
232,583
|
|
|
$
|
632,183
|
|
|
$
|
682,928
|
|
Rest of world
|
36,471
|
|
|
38,032
|
|
|
102,568
|
|
|
102,286
|
|
||||
Total
|
$
|
241,414
|
|
|
$
|
270,615
|
|
|
$
|
734,751
|
|
|
$
|
785,214
|
|
December 31, 2018
|
North American OTC
Healthcare |
|
International OTC
Healthcare |
|
Household
Cleaning |
|
Consolidated
|
||||||||
(In thousands)
|
|
|
|
|
|
|
|
||||||||
Goodwill
|
$
|
580,934
|
|
|
$
|
31,022
|
|
|
$
|
—
|
|
|
$
|
611,956
|
|
|
|
|
|
|
|
|
|
||||||||
Intangible assets
|
|
|
|
|
|
|
|
|
|||||||
Indefinite-lived
|
2,375,735
|
|
|
77,085
|
|
|
—
|
|
|
2,452,820
|
|
||||
Finite-lived, net
|
249,637
|
|
|
5,368
|
|
|
—
|
|
|
255,005
|
|
||||
Intangible assets, net
|
2,625,372
|
|
|
82,453
|
|
|
—
|
|
|
2,707,825
|
|
||||
Total
|
$
|
3,206,306
|
|
|
$
|
113,475
|
|
|
$
|
—
|
|
|
$
|
3,319,781
|
|
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 December 31,
|
|||||||||||||||||
|
|
|
|
|
|
|
|
|
Increase (Decrease)
|
|||||||||
(In thousands)
|
2018
|
|
%
|
|
2017
|
|
%
|
|
Amount
|
|
%
|
|||||||
North American OTC Healthcare
|
|
|
|
|
|
|
|
|
|
|
||||||||
Analgesics
|
$
|
29,325
|
|
|
12.1
|
|
$
|
31,293
|
|
|
11.6
|
|
$
|
(1,968
|
)
|
|
(6.3
|
)
|
Cough & Cold
|
27,137
|
|
|
11.2
|
|
28,761
|
|
|
10.6
|
|
(1,624
|
)
|
|
(5.6
|
)
|
|||
Women's Health
|
60,946
|
|
|
25.2
|
|
63,107
|
|
|
23.3
|
|
(2,161
|
)
|
|
(3.4
|
)
|
|||
Gastrointestinal
|
30,737
|
|
|
12.7
|
|
29,392
|
|
|
10.9
|
|
1,345
|
|
|
4.6
|
|
|||
Eye & Ear Care
|
23,352
|
|
|
9.7
|
|
21,631
|
|
|
8.0
|
|
1,721
|
|
|
8.0
|
|
|||
Dermatologicals
|
21,508
|
|
|
8.9
|
|
22,736
|
|
|
8.4
|
|
(1,228
|
)
|
|
(5.4
|
)
|
|||
Oral Care
|
22,177
|
|
|
9.2
|
|
27,144
|
|
|
10.0
|
|
(4,967
|
)
|
|
(18.3
|
)
|
|||
Other OTC
|
1,594
|
|
|
0.7
|
|
1,631
|
|
|
0.6
|
|
(37
|
)
|
|
(2.3
|
)
|
|||
Total North American OTC Healthcare
|
216,776
|
|
|
89.8
|
|
225,695
|
|
|
83.4
|
|
(8,919
|
)
|
|
(4.0
|
)
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
International OTC Healthcare
|
|
|
|
|
|
|
|
|
|
|
||||||||
Analgesics
|
136
|
|
|
0.1
|
|
160
|
|
|
0.1
|
|
(24
|
)
|
|
(15.0
|
)
|
|||
Cough & Cold
|
4,584
|
|
|
1.9
|
|
4,331
|
|
|
1.6
|
|
253
|
|
|
5.8
|
|
|||
Women's Health
|
3,306
|
|
|
1.4
|
|
2,940
|
|
|
1.1
|
|
366
|
|
|
12.4
|
|
|||
Gastrointestinal
|
10,321
|
|
|
4.3
|
|
11,251
|
|
|
4.1
|
|
(930
|
)
|
|
(8.3
|
)
|
|||
Eye & Ear Care
|
3,164
|
|
|
1.3
|
|
3,205
|
|
|
1.2
|
|
(41
|
)
|
|
(1.3
|
)
|
|||
Dermatologicals
|
470
|
|
|
0.2
|
|
562
|
|
|
0.2
|
|
(92
|
)
|
|
(16.4
|
)
|
|||
Oral Care
|
2,656
|
|
|
1.1
|
|
3,267
|
|
|
1.2
|
|
(611
|
)
|
|
(18.7
|
)
|
|||
Other OTC
|
1
|
|
|
—
|
|
1
|
|
|
—
|
|
—
|
|
|
—
|
|
|||
Total International OTC Healthcare
|
24,638
|
|
|
10.2
|
|
25,717
|
|
|
9.5
|
|
(1,079
|
)
|
|
(4.2
|
)
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Total OTC Healthcare
|
241,414
|
|
|
100.0
|
|
251,412
|
|
|
92.9
|
|
(9,998
|
)
|
|
(4.0
|
)
|
|||
Household Cleaning
|
—
|
|
|
—
|
|
19,203
|
|
|
7.1
|
|
(19,203
|
)
|
|
(100.0
|
)
|
|||
Total Consolidated
|
$
|
241,414
|
|
|
100.0
|
|
$
|
270,615
|
|
|
100.0
|
|
$
|
(29,201
|
)
|
|
(10.8
|
)
|
|
Three Months Ended December 31,
|
|||||||||||||||||
(In thousands)
|
|
|
|
|
|
|
|
|
Increase (Decrease)
|
|||||||||
Gross Profit
|
2018
|
|
%
|
|
2017
|
|
%
|
|
Amount
|
|
%
|
|||||||
North American OTC Healthcare
|
$
|
125,182
|
|
|
57.7
|
|
$
|
130,531
|
|
|
57.8
|
|
$
|
(5,349
|
)
|
|
(4.1
|
)
|
International OTC Healthcare
|
14,053
|
|
|
57.0
|
|
15,206
|
|
|
59.1
|
|
(1,153
|
)
|
|
(7.6
|
)
|
|||
Household Cleaning
|
—
|
|
|
—
|
|
1,937
|
|
|
10.1
|
|
(1,937
|
)
|
|
(100.0
|
)
|
|||
|
$
|
139,235
|
|
|
57.7
|
|
$
|
147,674
|
|
|
54.6
|
|
$
|
(8,439
|
)
|
|
(5.7
|
)
|
|
Three Months Ended December 31,
|
|||||||||||||||||
(In thousands)
|
|
|
|
|
|
|
|
|
Increase (Decrease)
|
|||||||||
Contribution Margin
|
2018
|
|
%
|
|
2017
|
|
%
|
|
Amount
|
|
%
|
|||||||
North American OTC Healthcare
|
$
|
94,866
|
|
|
43.8
|
|
$
|
99,737
|
|
|
44.2
|
|
$
|
(4,871
|
)
|
|
(4.9
|
)
|
International OTC Healthcare
|
9,865
|
|
|
40.0
|
|
10,662
|
|
|
41.5
|
|
(797
|
)
|
|
(7.5
|
)
|
|||
Household Cleaning
|
—
|
|
|
—
|
|
1,440
|
|
|
7.5
|
|
(1,440
|
)
|
|
(100.0
|
)
|
|||
|
$
|
104,731
|
|
|
43.4
|
|
$
|
111,839
|
|
|
41.3
|
|
$
|
(7,108
|
)
|
|
(6.4
|
)
|
|
Nine Months Ended December 31,
|
|||||||||||||||||
|
|
|
|
|
|
|
|
|
Increase (Decrease)
|
|||||||||
(In thousands)
|
2018
|
|
%
|
|
2017
|
|
%
|
|
Amount
|
|
%
|
|||||||
North American OTC Healthcare
|
|
|
|
|
|
|
|
|
|
|
||||||||
Analgesics
|
$
|
86,221
|
|
|
11.7
|
|
$
|
89,931
|
|
|
11.5
|
|
$
|
(3,710
|
)
|
|
(4.1
|
)
|
Cough & Cold
|
63,843
|
|
|
8.7
|
|
67,738
|
|
|
8.6
|
|
(3,895
|
)
|
|
(5.8
|
)
|
|||
Women's Health
|
186,037
|
|
|
25.3
|
|
187,688
|
|
|
23.9
|
|
(1,651
|
)
|
|
(0.9
|
)
|
|||
Gastrointestinal
|
94,065
|
|
|
12.8
|
|
88,145
|
|
|
11.2
|
|
5,920
|
|
|
6.7
|
|
|||
Eye & Ear Care
|
73,669
|
|
|
10.0
|
|
69,437
|
|
|
8.9
|
|
4,232
|
|
|
6.1
|
|
|||
Dermatologicals
|
71,968
|
|
|
9.8
|
|
72,688
|
|
|
9.3
|
|
(720
|
)
|
|
(1.0
|
)
|
|||
Oral Care
|
67,516
|
|
|
9.2
|
|
77,026
|
|
|
9.8
|
|
(9,510
|
)
|
|
(12.3
|
)
|
|||
Other OTC
|
4,182
|
|
|
0.6
|
|
4,159
|
|
|
0.5
|
|
23
|
|
|
0.6
|
|
|||
Total North American OTC Healthcare
|
647,501
|
|
|
88.1
|
|
656,812
|
|
|
83.7
|
|
(9,311
|
)
|
|
(1.4
|
)
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
International OTC Healthcare
|
|
|
|
|
|
|
|
|
|
|
||||||||
Analgesics
|
418
|
|
|
0.1
|
|
709
|
|
|
0.1
|
|
(291
|
)
|
|
(41.0
|
)
|
|||
Cough & Cold
|
15,489
|
|
|
2.1
|
|
13,603
|
|
|
1.7
|
|
1,886
|
|
|
13.9
|
|
|||
Women's Health
|
8,833
|
|
|
1.2
|
|
8,440
|
|
|
1.1
|
|
393
|
|
|
4.7
|
|
|||
Gastrointestinal
|
24,261
|
|
|
3.3
|
|
25,123
|
|
|
3.2
|
|
(862
|
)
|
|
(3.4
|
)
|
|||
Eye & Ear Care
|
8,778
|
|
|
1.2
|
|
8,850
|
|
|
1.1
|
|
(72
|
)
|
|
(0.8
|
)
|
|||
Dermatologicals
|
1,607
|
|
|
0.2
|
|
1,587
|
|
|
0.2
|
|
20
|
|
|
1.3
|
|
|||
Oral Care
|
8,050
|
|
|
1.1
|
|
9,256
|
|
|
1.2
|
|
(1,206
|
)
|
|
(13.0
|
)
|
|||
Other OTC
|
3
|
|
|
—
|
|
4
|
|
|
—
|
|
(1
|
)
|
|
(25.0
|
)
|
|||
Total International OTC Healthcare
|
67,439
|
|
|
9.2
|
|
67,572
|
|
|
8.6
|
|
(133
|
)
|
|
(0.2
|
)
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Total OTC Healthcare
|
714,940
|
|
|
97.3
|
|
724,384
|
|
|
92.3
|
|
(9,444
|
)
|
|
(1.3
|
)
|
|||
Household Cleaning
|
19,811
|
|
|
2.7
|
|
60,830
|
|
|
7.7
|
|
(41,019
|
)
|
|
(67.4
|
)
|
|||
Total Consolidated
|
$
|
734,751
|
|
|
100.0
|
|
$
|
785,214
|
|
|
100.0
|
|
$
|
(50,463
|
)
|
|
(6.4
|
)
|
|
Nine Months Ended December 31,
|
|||||||||||||||||
(In thousands)
|
|
|
|
|
|
|
|
|
Increase (Decrease)
|
|||||||||
Gross Profit
|
2018
|
|
%
|
|
2017
|
|
%
|
|
Amount
|
|
%
|
|||||||
North American OTC Healthcare
|
$
|
374,747
|
|
|
57.9
|
|
$
|
387,963
|
|
|
59.1
|
|
$
|
(13,216
|
)
|
|
(3.4
|
)
|
International OTC Healthcare
|
39,360
|
|
|
58.4
|
|
37,815
|
|
|
56.0
|
|
1,545
|
|
|
4.1
|
|
|||
Household Cleaning
|
3,223
|
|
|
16.3
|
|
9,470
|
|
|
15.6
|
|
(6,247
|
)
|
|
(66.0
|
)
|
|||
|
$
|
417,330
|
|
|
56.8
|
|
$
|
435,248
|
|
|
55.4
|
|
$
|
(17,918
|
)
|
|
(4.1
|
)
|
|
Nine Months Ended December 31,
|
|||||||||||||||||
(In thousands)
|
|
|
|
|
|
|
|
|
Increase (Decrease)
|
|||||||||
Contribution Margin
|
2018
|
|
%
|
|
2017
|
|
%
|
|
Amount
|
|
%
|
|||||||
North American OTC Healthcare
|
$
|
277,848
|
|
|
42.9
|
|
$
|
289,297
|
|
|
44.0
|
|
$
|
(11,449
|
)
|
|
(4.0
|
)
|
International OTC Healthcare
|
28,032
|
|
|
41.6
|
|
25,988
|
|
|
38.5
|
|
2,044
|
|
|
7.9
|
|
|||
Household Cleaning
|
2,793
|
|
|
14.1
|
|
7,996
|
|
|
13.1
|
|
(5,203
|
)
|
|
(65.1
|
)
|
|||
|
$
|
308,673
|
|
|
42.0
|
|
$
|
323,281
|
|
|
41.2
|
|
$
|
(14,608
|
)
|
|
(4.5
|
)
|
|
Nine Months Ended December 31,
|
||||||||||
(In thousands)
|
2018
|
|
2017
|
|
$ Change
|
||||||
Cash provided by (used in):
|
|
|
|
|
|
||||||
Operating Activities
|
$
|
138,437
|
|
|
$
|
155,672
|
|
|
$
|
(17,235
|
)
|
Investing Activities
|
58,773
|
|
|
(8,686
|
)
|
|
67,459
|
|
|||
Financing Activities
|
(204,328
|
)
|
|
(144,609
|
)
|
|
(59,719
|
)
|
|||
Effects of exchange rate changes on cash and cash equivalents
|
(758
|
)
|
|
1,144
|
|
|
(1,902
|
)
|
|||
Net change in cash and cash equivalents
|
$
|
(7,876
|
)
|
|
$
|
3,521
|
|
|
$
|
(11,397
|
)
|
•
|
$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;
|
•
|
$783.0 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 three months ending March 31, 2019)
|
$
|
—
|
|
|
2020
|
|
—
|
|
|
2021
|
|
—
|
|
|
2022
|
|
475,000
|
|
|
2023
|
|
—
|
|
|
Thereafter
|
1,383,000
|
|
||
|
$
|
1,858,000
|
|
•
|
Have a leverage ratio of less than
6.50 to 1.0
for the quarter ended
December 31, 2018
and thereafter (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”));
|
•
|
Have an interest coverage ratio of greater than
2.25 to 1.0
for the quarter ended
December 31, 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
December 31, 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:
|
February 7, 2019
|
By:
|
/s/ Christine Sacco
|
|
|
|
|
Christine Sacco
|
|
|
|
|
Chief Financial Officer
|
|
|
|
|
(Principal Financial Officer and Duly Authorized Officer)
|
|
|
|
|
|
|
|
|
|
|
3.1
|
|
|
|
|
|
|
|
3.1.1
|
|
|
|
|
|
|
|
3.2
|
|
|
|
|
|
|
|
10.1
|
|
|
|
|
|
|
|
31.1
|
|
|
|
|
|
|
|
31.2
|
|
|
|
|
|
|
|
32.1
|
|
|
|
|
|
|
|
32.2
|
|
|
|
* Incorporated herein by reference.
|
|||
|
|
|
|
101.INS**
|
|
|
XBRL Instance Document
|
101.SCH**
|
|
|
XBRL Taxonomy Extension Schema Document
|
101.CAL**
|
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
101.DEF**
|
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
101.LAB**
|
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
101.PRE**
|
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
** 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.
|
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:
|
February 7, 2019
|
/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
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d.
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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
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5.
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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):
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a.
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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
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b.
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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.
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Date:
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February 7, 2019
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/s/ Christine Sacco
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Christine Sacco
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Chief Financial Officer
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(Principal Financial Officer)
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|
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/s/ Ronald M. Lombardi
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Name: Ronald M. Lombardi
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Title:
Chief Executive Officer
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|
|
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(Principal Executive Officer)
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|
|
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Date: February 7, 2019
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|
|
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/s/ Christine Sacco
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|
|
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Name: Christine Sacco
|
|
|
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Title:
Chief Financial Officer
|
|
|
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(Principal Financial Officer)
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|
|
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Date: February 7, 2019
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