UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~June~~September 30, 2021


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

PRESTIGE CONSUMER HEALTHCARE INC.

(Exact Name of Registrant as Specified in Its Charter)


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)


Securities registered pursuant to Section 12(b) of the Act:
Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, par value $0.01 per share	PBH	New York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer

☒

Accelerated Filer

☐

Non-Accelerated Filer

☐

Smaller Reporting Company

☐

Emerging Growth Company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

As of ~~July 30,~~October 29, 2021, there were ~~50,059,989~~50,104,161 shares of common stock outstanding.

Prestige Consumer Healthcare Inc.

Form 10-Q

Index


PART I.	FINANCIAL INFORMATION

Item 1.	Financial Statements
	Condensed Consolidated Statements of Income and Comprehensive Income for the three and six months ended ~~June~~September 30, 2021 and 2020 (unaudited)	2
	Condensed Consolidated Balance Sheets as of ~~June~~September 30, 2021 and March 31, 2021 (unaudited)	3
	Condensed Consolidated Statements of Changes in Stockholders' Equity for the three and six months ended ~~June~~September 30, 2021 and 2020 (unaudited)	4
	Condensed Consolidated Statements of Cash Flows for the ~~three~~six months ended ~~June~~September 30, 2021 and 2020 (unaudited)	56
	Notes to Condensed Consolidated Financial Statements (unaudited)	67

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	2125

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	3137

Item 4.	Controls and Procedures	3137

PART II.	OTHER INFORMATION

Item 1A.	Risk Factors	32

~~Item 2.~~	~~Issuer Purchases of Equity Securities~~	32

~~Item 5.~~	~~Other Information~~	3238

Item 6.	Exhibits	3439

	Signatures	3540

Trademarks and Trade Names

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

-1-

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Prestige Consumer Healthcare Inc.

Condensed Consolidated Statements of Income and Comprehensive Income

(Unaudited)


		Three Months Ended June 30,			Three Months Ended September 30,						Six Months Ended September 30,
(In thousands, except per share data)	(In thousands, except per share data)		2021			2020		(In thousands, except per share data)	2021		2020		2021		2020
Revenues	Revenues							Revenues
Net sales	Net sales		$	269,172		$	229,384	Net sales	$	276,217	$	237,409	$	545,389	$	466,793
Other revenues	Other revenues		9			10		Other revenues	8		13		17		23
Total revenues	Total revenues		269,181			229,394		Total revenues	276,225		237,422		545,406		466,816

Cost of Sales	Cost of Sales							Cost of Sales
Cost of sales excluding depreciation	Cost of sales excluding depreciation		108,335			94,124		Cost of sales excluding depreciation	116,722		98,239		225,057		192,363
Cost of sales depreciation	Cost of sales depreciation		1,834			1,402		Cost of sales depreciation	1,791		1,522		3,625		2,924
Cost of sales	Cost of sales		110,169			95,526		Cost of sales	118,513		99,761		228,682		195,287
Gross profit	Gross profit		159,012			133,868		Gross profit	157,712		137,661		316,724		271,529

Operating Expenses	Operating Expenses							Operating Expenses
Advertising and marketing	Advertising and marketing		39,439			27,750		Advertising and marketing	40,730		38,341		80,169		66,091
General and administrative	General and administrative		22,471			19,934		General and administrative	32,252		20,388		54,723		40,322
Depreciation and amortization	Depreciation and amortization		5,760			6,065		Depreciation and amortization	6,172		6,029		11,932		12,094

Total operating expenses	Total operating expenses		67,670			53,749		Total operating expenses	79,154		64,758		146,824		118,507
Operating income	Operating income		91,342			80,119		Operating income	78,558		72,903		169,900		153,022

Other (income) expense
Other expense (income)								Other expense (income)

Interest expense, net	Interest expense, net		15,077			21,941		Interest expense, net	16,313		21,266		31,390		43,207

Other (income) expense, net			(105)			10
Loss on extinguishment of debt								Loss on extinguishment of debt	2,122		—		2,122		—
Other expense (income), net								Other expense (income), net	493		(259)		388		(249)
Total other expense, net	Total other expense, net		14,972			21,951		Total other expense, net	18,928		21,007		33,900		42,958
Income before income taxes	Income before income taxes		76,370			58,168		Income before income taxes	59,630		51,896		136,000		110,064
Provision for income taxes	Provision for income taxes		18,615			14,462		Provision for income taxes	14,305		7,307		32,920		21,769

Net income	Net income		$	57,755		$	43,706	Net income	$	45,325	$	44,589	$	103,080	$	88,295

Earnings per share:	Earnings per share:							Earnings per share:
Basic	Basic		$	1.15		$	0.87	Basic	$	0.90	$	0.89	$	2.05	$	1.76
Diluted	Diluted		$	1.14		$	0.86	Diluted	$	0.89	$	0.88	$	2.03	$	1.74

Weighted average shares outstanding:	Weighted average shares outstanding:							Weighted average shares outstanding:
Basic	Basic		50,139			50,264		Basic	50,232		50,330		50,186		50,297
Diluted	Diluted		50,671			50,808		Diluted	50,791		50,661		50,731		50,672

Comprehensive income (loss), net of tax:
Comprehensive income, net of tax:								Comprehensive income, net of tax:
Currency translation adjustments	Currency translation adjustments		(1,492)			10,590		Currency translation adjustments	(4,197)		3,665		(5,689)		14,255
Unrealized gain on interest rate swaps	Unrealized gain on interest rate swaps		520			309		Unrealized gain on interest rate swaps	550		985		1,070		1,294

Total other comprehensive (loss) income	Total other comprehensive (loss) income		(972)			10,899		Total other comprehensive (loss) income	(3,647)		4,650		(4,619)		15,549
Comprehensive income	Comprehensive income		$	56,783		$	54,605	Comprehensive income	$	41,678	$	49,239	$	98,461	$	103,844

See accompanying notes.

-2-

Prestige Consumer Healthcare Inc.

Condensed Consolidated Balance Sheets

(Unaudited)


(In thousands)	(In thousands)	June 30, 2021		March 31, 2021		(In thousands)	September 30, 2021		March 31, 2021

Assets	Assets					Assets
Current assets	Current assets					Current assets
Cash and cash equivalents	Cash and cash equivalents	$	163,624	$	32,302	Cash and cash equivalents	$	42,818	$	32,302
Accounts receivable, net of allowance of $14,659 and $16,457, respectively		130,346		114,671
Accounts receivable, net of allowance of $18,919 and $16,457, respectively						Accounts receivable, net of allowance of $18,919 and $16,457, respectively	146,553		114,671
Inventories	Inventories	105,546		114,959		Inventories	107,918		114,959

Prepaid expenses and other current assets	Prepaid expenses and other current assets	9,008		7,903		Prepaid expenses and other current assets	7,521		7,903

Total current assets	Total current assets	408,524		269,835		Total current assets	304,810		269,835

Property, plant and equipment, net	Property, plant and equipment, net	69,825		70,059		Property, plant and equipment, net	70,021		70,059
Operating lease right-of-use assets	Operating lease right-of-use assets	22,345		23,722		Operating lease right-of-use assets	22,005		23,722
Finance lease right-of-use assets, net	Finance lease right-of-use assets, net	8,344		8,986		Finance lease right-of-use assets, net	7,702		8,986
Goodwill	Goodwill	577,840		578,079		Goodwill	578,797		578,079
Intangible assets, net	Intangible assets, net	2,469,714		2,475,729		Intangible assets, net	2,689,920		2,475,729
Other long-term assets	Other long-term assets	2,522		2,863		Other long-term assets	2,563		2,863

Total Assets	Total Assets	$	3,559,114	$	3,429,273	Total Assets	$	3,675,818	$	3,429,273

Liabilities and Stockholders' Equity	Liabilities and Stockholders' Equity					Liabilities and Stockholders' Equity
Current liabilities	Current liabilities					Current liabilities

Current portion of long-term debt						Current portion of long-term debt	$	6,000	$	—
Accounts payable	Accounts payable	$	30,963	$	45,978	Accounts payable	38,047		45,978
Accrued interest payable	Accrued interest payable	17,067		6,312		Accrued interest payable	17,531		6,312
Operating lease liabilities, current portion	Operating lease liabilities, current portion	5,974		5,858		Operating lease liabilities, current portion	6,085		5,858
Finance lease liabilities, current portion	Finance lease liabilities, current portion	2,607		2,588		Finance lease liabilities, current portion	2,627		2,588
Other accrued liabilities	Other accrued liabilities	68,435		61,402		Other accrued liabilities	78,650		61,402

Total current liabilities	Total current liabilities	125,046		122,138		Total current liabilities	148,940		122,138

Long-term debt, net	Long-term debt, net	1,545,352		1,479,653		Long-term debt, net	1,592,981		1,479,653

Deferred income tax liabilities	Deferred income tax liabilities	439,428		434,050		Deferred income tax liabilities	440,275		434,050
Long-term operating lease liabilities, net of current portion	Long-term operating lease liabilities, net of current portion	18,329		19,706		Long-term operating lease liabilities, net of current portion	17,993		19,706
Long-term finance lease liabilities, net of current portion	Long-term finance lease liabilities, net of current portion	6,157		6,816		Long-term finance lease liabilities, net of current portion	5,493		6,816
Other long-term liabilities	Other long-term liabilities	8,555		8,612		Other long-term liabilities	8,489		8,612
Total Liabilities	Total Liabilities	2,142,867		2,070,975		Total Liabilities	2,214,171		2,070,975

Commitments and Contingencies — Note 16		0		0
Commitments and Contingencies — Note 17						Commitments and Contingencies — Note 17	0		0

Stockholders' Equity	Stockholders' Equity					Stockholders' Equity
Preferred stock - $0.01 par value	Preferred stock - $0.01 par value					Preferred stock - $0.01 par value
Authorized - 5,000 shares	Authorized - 5,000 shares					Authorized - 5,000 shares
Issued and outstanding - NaN		0		0
Issued and outstanding - None						Issued and outstanding - None	—		—
Common stock - $0.01 par value	Common stock - $0.01 par value					Common stock - $0.01 par value
Authorized - 250,000 shares	Authorized - 250,000 shares					Authorized - 250,000 shares
Issued - 54,211 shares at June 30, 2021 and 53,999 shares at March 31, 2021		542		540
Issued - 54,247 shares at September 30, 2021 and 53,999 shares at March 31, 2021						Issued - 54,247 shares at September 30, 2021 and 53,999 shares at March 31, 2021	542		540
Additional paid-in capital	Additional paid-in capital	503,588		499,508		Additional paid-in capital	507,310		499,508
Treasury stock, at cost - 4,151 shares at June 30, 2021 and 4,088 shares at March 31, 2021		(133,648)		(130,732)
Treasury stock, at cost - 4,151 shares at September 30, 2021 and 4,088 shares at March 31, 2021						Treasury stock, at cost - 4,151 shares at September 30, 2021 and 4,088 shares at March 31, 2021	(133,648)		(130,732)
Accumulated other comprehensive loss, net of tax	Accumulated other comprehensive loss, net of tax	(20,773)		(19,801)		Accumulated other comprehensive loss, net of tax	(24,420)		(19,801)
Retained earnings	Retained earnings	1,066,538		1,008,783		Retained earnings	1,111,863		1,008,783
Total Stockholders' Equity	Total Stockholders' Equity	1,416,247		1,358,298		Total Stockholders' Equity	1,461,647		1,358,298
Total Liabilities and Stockholders' Equity	Total Liabilities and Stockholders' Equity	$	3,559,114	$	3,429,273	Total Liabilities and Stockholders' Equity	$	3,675,818	$	3,429,273

See accompanying notes.

-3-

Prestige Consumer Healthcare Inc.

Condensed Consolidated Statements of Changes in Stockholders' Equity

(Unaudited)


		Three Months Ended June 30, 2021																					Three Months Ended September 30, 2021
		Common Stock			Additional Paid-in Capital				Treasury Stock						Accumulated Other Comprehensive Loss					Retained Earnings				Totals				Common Stock						Additional Paid-in Capital				Treasury Stock							Accumulated Other Comprehensive (Loss)					Retained Earnings		Totals
(In thousands)	(In thousands)	Shares	Par Value				Shares			Amount									Totals			Shares					Par Value			Additional Paid-in Capital		Shares					Amount			Accumulated Other Comprehensive (Loss)							Retained Earnings
Balances at March 31, 2021		53,999	$	540			$	499,508		4,088			$	(130,732)			$	(19,801)								$	1,008,783	$	1,358,298
Balances at June 30, 2021																											Balances at June 30, 2021	54,211				$	542		$	503,588			4,151				$	(133,648)				$	(20,773)			$	1,066,538	$	1,416,247

Stock-based compensation	Stock-based compensation	—	—		1,878				—		—				—					—				1,878			Stock-based compensation	—			—			3,219				—			—				—					—		3,219
Exercise of stock options	Exercise of stock options	68	—		2,204				—		—				—					—				2,204			Exercise of stock options	20			—			503				—			—				—					—		503

Issuance of shares related to restricted stock	Issuance of shares related to restricted stock	144	2		(2)				—		—				—					—				0			Issuance of shares related to restricted stock	16			—			—				—			—				—					—		—
Treasury share repurchases		—	—		—				63		(2,916)				—					—				(2,916)

Net income	Net income	—	—		—				—		—				—					57,755				57,755			Net income	—			—			—				—			—				—					45,325		45,325

Comprehensive loss	Comprehensive loss	—	—		—				—		—				(972)					—				(972)			Comprehensive loss	—			—			—				—			—				(3,647)					—		(3,647)

Balances at June 30, 2021		54,211	$	542	$	503,588			4,151		$	(133,648)			$	(20,773)				$	1,066,538			$	1,416,247
Balances at September 30, 2021																											Balances at September 30, 2021	54,247			$	542		$	507,310			4,151			$	(133,648)			$	(24,420)				$	1,111,863	$	1,461,647


		Three Months Ended June 30, 2020																					Three Months Ended September 30, 2020
		Common Stock			Additional Paid-in Capital				Treasury Stock						Accumulated Other Comprehensive Income (Loss)					Retained Earnings				Totals				Common Stock						Additional Paid-in Capital				Treasury Stock							Accumulated Other Comprehensive Income (Loss)					Retained Earnings		Totals
(In thousands)	(In thousands)	Shares	Par Value				Shares			Amount									Totals			Shares					Par Value			Additional Paid-in Capital		Shares					Amount			Accumulated Other Comprehensive Income (Loss)							Retained Earnings
Balances at March 31, 2020		53,805	$	538			$	488,116		3,719			$	(117,623)			$	(44,161)								$	844,101	$	1,170,971
Balances at June 30, 2020																											Balances at June 30, 2020	53,939				$	539		$	490,795			3,750				$	(118,865)				$	(33,262)			$	887,807	$	1,227,014

Stock-based compensation	Stock-based compensation	—	—		1,464				—		—				—					—				1,464			Stock-based compensation	—			—			2,892				—			—				—					—		2,892
Exercise of stock options	Exercise of stock options	60	—		1,216				—		—				—					—				1,216			Exercise of stock options	2			—			69				—			—				—					—		69

Issuance of shares related to restricted stock		74	1		(1)				—		—				—					—				0

Treasury share repurchases	Treasury share repurchases	—	—		—				31		(1,242)				—					—				(1,242)			Treasury share repurchases	—			—			—				29			(997)				—					—		(997)

Net income	Net income	—	—		—				—		—				—					43,706				43,706			Net income	—			—			—				—			—				—					44,589		44,589

Comprehensive income	Comprehensive income	—	—		—				—		—				10,899					—				10,899			Comprehensive income	—			—			—				—			—				4,650					—		4,650

Balances at June 30, 2020		53,939	$	539	$	490,795			3,750		$	(118,865)			$	(33,262)				$	887,807			$	1,227,014
Balances at September 30, 2020																											Balances at September 30, 2020	53,941			$	539		$	493,756			3,779			$	(119,862)			$	(28,612)				$	932,396	$	1,278,217

-4-


	Six Months Ended September 30, 2021
	Common Stock			Additional Paid-in Capital		Treasury Stock			Accumulated Other Comprehensive Loss		Retained Earnings		Totals
(In thousands)	Shares	Par Value				Shares	Amount
Balances at March 31, 2021	53,999	$	540	$	499,508	4,088	$	(130,732)	$	(19,801)	$	1,008,783	$	1,358,298

Stock-based compensation	—	—		5,097		—	—		—		—		5,097
Exercise of stock options	88	—		2,707		—	—		—		—		2,707

Issuance of shares related to restricted stock	160	2		(2)		—	—		—		—		—
Treasury share repurchases	—	—		—		63	(2,916)		—		—		(2,916)




Net income	—	—		—		—	—		—		103,080		103,080


Comprehensive loss	—	—		—		—	—		(4,619)		—		(4,619)

Balances at September 30, 2021	54,247	$	542	$	507,310	4,151	$	(133,648)	$	(24,420)	$	1,111,863	$	1,461,647


	Six Months Ended September 30, 2020
	Common Stock			Additional Paid-in Capital		Treasury Stock			Accumulated Other Comprehensive Income (Loss)		Retained Earnings		Totals
(In thousands)	Shares	Par Value				Shares	Amount
Balances at March 31, 2020	53,805	$	538	$	488,116	3,719	$	(117,623)	$	(44,161)	$	844,101	$	1,170,971


Stock-based compensation	—	—		4,356		—	—		—		—		4,356
Exercise of stock options	62	—		1,285		—	—		—		—		1,285

Issuance of shares related to restricted stock	74	1		(1)		—	—		—		—		—
Treasury share repurchases	—	—		—		60	(2,239)		—		—		(2,239)


Net income	—	—		—		—	—		—		88,295		88,295


Comprehensive income	—	—		—		—	—		15,549		—		15,549

Balances at September 30, 2020	53,941	$	539	$	493,756	3,779	$	(119,862)	$	(28,612)	$	932,396	$	1,278,217

See accompanying notes.

~~-4-~~-5-

Prestige Consumer Healthcare Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)


		Three Months Ended June 30,					Six Months Ended September 30,
(In thousands)	(In thousands)	2021		2020		(In thousands)	2021		2020
Operating Activities	Operating Activities					Operating Activities
Net income	Net income	$	57,755	$	43,706	Net income	$	103,080	$	88,295
Adjustments to reconcile net income to net cash provided by operating activities:	Adjustments to reconcile net income to net cash provided by operating activities:					Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	Depreciation and amortization	7,594		7,467		Depreciation and amortization	15,557		15,018

Loss on disposal of property and equipment	Loss on disposal of property and equipment	26		42		Loss on disposal of property and equipment	27		131
Deferred income taxes	Deferred income taxes	5,876		6,147		Deferred income taxes	7,639		3,656
Amortization of debt origination costs	Amortization of debt origination costs	759		1,400		Amortization of debt origination costs	1,435		2,918

Stock-based compensation costs	Stock-based compensation costs	1,878		1,464		Stock-based compensation costs	5,097		4,356

Loss on extinguishment of debt						Loss on extinguishment of debt	2,122		—

Non-cash operating lease cost	Non-cash operating lease cost	1,691		1,831		Non-cash operating lease cost	3,351		3,587
Other	Other	0		50		Other	—		109

Changes in operating assets and liabilities:
Changes in operating assets and liabilities, net of effects from acquisition:						Changes in operating assets and liabilities, net of effects from acquisition:
Accounts receivable	Accounts receivable	(15,879)		39,734		Accounts receivable	(34,322)		29,358
Inventories	Inventories	9,384		51		Inventories	12,978		3,213
Prepaid expenses and other current assets	Prepaid expenses and other current assets	(1,049)		(4,019)		Prepaid expenses and other current assets	473		(2,476)
Accounts payable	Accounts payable	(15,551)		(32,386)		Accounts payable	(8,275)		(9,183)
Accrued liabilities	Accrued liabilities	18,439		11,588		Accrued liabilities	24,570		(8,125)
Operating lease liabilities	Operating lease liabilities	(1,578)		(1,812)		Operating lease liabilities	(3,150)		(3,446)

Other	Other	(40)		(109)		Other	(83)		(118)
Net cash provided by operating activities	Net cash provided by operating activities	69,305		75,154		Net cash provided by operating activities	130,499		127,293

Investing Activities	Investing Activities					Investing Activities
Purchases of property, plant and equipment	Purchases of property, plant and equipment	(1,500)		(2,553)		Purchases of property, plant and equipment	(4,252)		(11,619)

Acquisition of Akorn						Acquisition of Akorn	(228,914)		—

Other	Other	177		0		Other	177		—
Net cash used in investing activities	Net cash used in investing activities	(1,323)		(2,553)		Net cash used in investing activities	(232,989)		(11,619)

Financing Activities	Financing Activities					Financing Activities

Term loan repayments	Term loan repayments	(20,000)		(56,000)		Term loan repayments	(495,000)		(130,000)
Proceeds from refinancing of Term Loan						Proceeds from refinancing of Term Loan	597,000		—
Borrowings under revolving credit agreement	Borrowings under revolving credit agreement	85,000		0		Borrowings under revolving credit agreement	85,000		—
Repayments under revolving credit agreement	Repayments under revolving credit agreement	0		(55,000)		Repayments under revolving credit agreement	(65,000)		(55,000)

Payments of debt costs						Payments of debt costs	(6,111)		—
Payments of finance leases	Payments of finance leases	(638)		(336)		Payments of finance leases	(1,496)		(712)
Proceeds from exercise of stock options	Proceeds from exercise of stock options	2,204		1,216		Proceeds from exercise of stock options	2,707		1,285

Fair value of shares surrendered as payment of tax withholding	Fair value of shares surrendered as payment of tax withholding	(2,916)		(1,242)		Fair value of shares surrendered as payment of tax withholding	(2,916)		(1,242)

Repurchase of common stock						Repurchase of common stock	—		(997)
Net cash provided by (used in) financing activities	Net cash provided by (used in) financing activities	63,650		(111,362)		Net cash provided by (used in) financing activities	114,184		(186,666)

Effects of exchange rate changes on cash and cash equivalents	Effects of exchange rate changes on cash and cash equivalents	(310)		1,942		Effects of exchange rate changes on cash and cash equivalents	(1,178)		2,835
Increase (decrease) in cash and cash equivalents	Increase (decrease) in cash and cash equivalents	131,322		(36,819)		Increase (decrease) in cash and cash equivalents	10,516		(68,157)
Cash and cash equivalents - beginning of period	Cash and cash equivalents - beginning of period	32,302		94,760		Cash and cash equivalents - beginning of period	32,302		94,760
Cash and cash equivalents - end of period	Cash and cash equivalents - end of period	$	163,624	$	57,941	Cash and cash equivalents - end of period	$	42,818	$	26,603

Interest paid	Interest paid	$	3,389	$	5,571	Interest paid	$	18,481	$	42,423
Income taxes paid	Income taxes paid	$	2,388	$	2,182	Income taxes paid	$	21,141	$	18,818

See accompanying notes.

~~-5-~~-6-

Prestige Consumer Healthcare Inc.

Notes to Condensed Consolidated Financial Statements (unaudited)

1. Business and Basis of Presentation

Nature of Business

Prestige Consumer Healthcare Inc. (referred to herein as the “Company” or “we,” which reference shall, unless the context requires otherwise, be deemed to refer to Prestige Consumer Healthcare Inc. and all of its direct and indirect 100% owned subsidiaries on a consolidated basis) is engaged in the development, manufacturing, marketing, sales and distribution of over-the-counter (“OTC”) healthcare products to mass merchandisers, drug, food, dollar, convenience and club stores and e-commerce channels in North America (the United States and Canada), and in Australia and certain other international markets. Prestige Consumer Healthcare Inc. is a holding company with no operations and is also the parent guarantor of the senior credit facility and the senior notes described in Note 78 to these Condensed Consolidated Financial Statements.

Economic Environment Since the Coronavirus Outbreak

In ~~January~~March 2020, the World Health Organization ("WHO") ~~announced~~declared a global ~~health crisis~~pandemic due to a new strain of coronavirus ("COVID-19"). ~~In March 2020, the WHO classified the COVID-19 outbreak as a pandemic. This~~The pandemic has caused significant volatility in the United States and global economies. We expect economic conditions will continue to be highly volatile and uncertain and could affect demand for our products and put pressure on prices.We experienced a temporary but significant decline in consumer consumption of our brands in the first quarter of fiscal 2021, followed by more stable consumption and customer orders over the remainder of the year. Generally, throughout the pandemic some categories were positively impacted (for instance, Women’s Health, Oral Care and Dermatological) and some categories negatively impacted (for instance, Cough & Cold and Gastrointestinal).The positively impacted categories benefited from the consumer shift to over-the-counter healthcare products as consumers increased their focus on hygiene and self-care at home related to COVID-19.The declining categories were impacted by reduced incidence levels and usage rates due to shelter-at-home restrictions and limited travel-related activity. In the first ~~quarter~~half of fiscal 2022, we experienced solid consumer consumption and share gains across most of our brand portfolio. Our business also benefited from a significant increase in demand in certain travel-related categories and channels and, to a lesser extent, the Cough & Cold category, previously impacted by the COVID-19 virus.

We have continued to see changes in the purchasing patterns of our consumers, including the frequency of visits by consumers to retailers and a shift in many markets to purchasing our products online.Although we have not experienced a material disruption to our overall supply chain to date, ~~the environment remains uncertain.~~we may experience delays and backorders for certain ingredients and products, difficulty scheduling shipping for our products, as well as price increases from certain of our suppliers for both shipping and product costs. In addition, labor shortages have begun to impact our manufacturing operations and may impact our ability to supply certain products to our customers. To date, the pandemic has not had a material negative impact on our operations, supply chain, overall demand for most of our products or resulting aggregate sales and earnings, and, as such, it has also not negatively impacted our liquidity position.We continue to generate operating cash flows to meet our short-term liquidity needs.These circumstances could change, however, in this dynamic, unprecedented environment.If the outbreak continues to spread or labor shortage issues otherwise worsen, it may materially affect our operations and those of third parties on which we rely, including causing disruptions in the supply and distribution of our products. We may need to limit operations and may experience material limitations in employee and other labor resources.The extent to which COVID-19 ~~impacts~~and related economic conditions impact our results and liquidity will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of COVID-19, and the actions to contain COVID-19 or treat its impact, among others. ~~We do not yet know the full extent of its impacts on our business or the global economy. However, these~~These effects could have a material, adverse impact on our business, liquidity, capital resources, and results of operations and those of the third parties on which we rely.

Basis of Presentation

The unaudited Condensed Consolidated Financial Statements presented herein have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial reporting and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. All significant intercompany transactions and balances have been eliminated in consolidation. In the opinion of management, these Condensed Consolidated Financial Statements include all adjustments, consisting of normal recurring adjustments, that are considered necessary for a fair statement of our consolidated financial position, results of operations and cash flows for the interim periods presented. Our fiscal year ends on March 31st of each year. References in these Condensed Consolidated Financial Statements or related notes to a year (e.g., 2022) mean our fiscal year ending or ended on March 31st of that year. Operating results for the ~~three~~six months ended ~~June~~September 30, 2021 are not necessarily indicative of results that may be expected for the fiscal year ending March 31, 2022. These unaudited Condensed Consolidated Financial Statements and related notes should be read in conjunction with our audited

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Consolidated Financial Statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended March 31, 2021.

Use of Estimates

~~-6-~~

based on our knowledge of current events and actions that we may undertake in the future, actual results could differ from those estimates. Our most significant estimates include those made in connection with the valuation of intangible assets, stock-based compensation, fair value of debt, sales returns and allowances, trade promotional allowances, inventory obsolescence, and accounting for income taxes and related uncertain tax positions.

Recently Adopted Accounting Pronouncements

In December 2019, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. The amendments in this update eliminate the need for an organization to analyze whether certain exceptions apply for tax purposes. It also simplifies GAAP for certain taxes. The amendments in these updates are effective for us for fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. We adopted this standard effective April 1, 2021, and the adoption of this standard did not have a material impact on our Consolidated Financial Statements.

Recently Issued Accounting Pronouncements

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. ~~The amendments in this update are elective~~This ASU provides optional expedient and ~~apply~~exceptions for applying generally accepted accounting principles to ~~all entities that have~~ contracts, hedging relationships, and other transactions ~~that reference LIBOR or another~~affected by reference rate ~~expected~~reform if certain criteria are met. In response to ~~be discontinued.~~the concerns about structural risks of interbank offered rates (“IBORs”) and, particularly, the risk of cessation of the London Interbank Offered Rate (“LIBOR”), regulators in several jurisdictions around the world have undertaken reference rate reform initiatives to identify alternative reference rates that are more observable or transaction based and less susceptible to manipulation. The ~~amendments in this update provide temporary~~ASU provides companies with optional guidance to ease the potential accounting burden ~~in accounting for~~associated with transitioning away from reference ~~rate reform. An entity may elect~~rates that are expected to ~~apply the amendments prospectively through December 31, 2022.~~be discontinued. In January 2021, the FASB issued ASU 2021-01, ~~Reference Rate Reform (Topic 848): Scope~~which adds implementation guidance to clarify ~~that~~ certain optional expedients ~~and exceptions~~ in Topic ~~848 for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition to new reference rates.~~848. The ~~amendments in this update are effective immediately for entities that elect to apply the optional guidance in~~ ~~Topic 848~~.ASUs can be adopted no later than December 31, 2022 with early adoption permitted. We are currently evaluating the ~~impact~~effect of adopting this ~~guidance on our Consolidated Financial Statements.~~new accounting guidance.

2.Acquisition

On July 1, 2021, we completed the acquisition of the consumer health business assets from Akorn Operating Company LLC ("Akorn") pursuant to an Asset Purchase Agreement, dated May 27, 2021 (the "Purchase Agreement"), for a purchase price of $228.9 million in cash, subject to certain closing adjustments specified in the Purchase Agreement. As a result of the purchase, we acquired TheraTears and certain other over-the-counter consumer brands. The financial results from this acquisition are included in our North American OTC Healthcare segment. The purchase price was funded by a combination of available cash on hand, additional borrowings under the 2012 ABL Revolver and the net proceeds from the refinancing of our term loan entered into on January 31, 2012 (the "2012 Term Loan") (see Note 8).

The acquisition was accounted for as a business combination. During the three months ended September 30, 2021, we incurred acquisition-related costs of $5.1 million which are included in General and administrative expense. In connection with the acquisition, we also entered into a supply arrangement with Akorn for a term of three years with optional renewals at prevailing market rates.

We prepared an analysis of the fair values of the assets acquired and liabilities assumed as of the date of acquisition. These purchase price allocations are preliminary as we are in the process of finalizing the valuation. The following table summarizes our preliminary allocation of the assets acquired and liabilities assumed as of the July 1, 2021 acquisition date.

-8-


(In thousands)
	July 1, 2021


Inventories	$	6,432


Goodwill	1,758
Intangible assets	228,970

Total assets acquired	237,160

Accounts payable	591
Reserves for sales allowances and cash discounts	2,227
Other accrued liabilities	5,428


Total liabilities assumed	8,246
Total purchase price	$	228,914

Based on this preliminary analysis, we allocated $204.1 million to non-amortizable intangible assets and $24.9 million to amortizable intangible assets. The non-amortizable intangible assets are classified as trademarks and, of the amortizable intangible assets, $19.6 million are classified as customer relationships and $5.3 million are classified as trademarks. We are amortizing the purchased amortizable intangible assets on a straight-line basis over an estimated weighted average useful life of 12.5 years (see Note 5).

We recorded goodwill of $1.8 million based on the amount by which the purchase price exceeded the preliminary estimate of the fair value of the net assets acquired (see Note 4). Goodwill is deductible and is being amortized for income tax purposes.

The financial impact of this acquisition was not material to our Consolidated Financial Statements, and, therefore, we have not presented pro forma results of operations for the acquisition.

3. Inventories

Inventories consist of the following:


(In thousands)	(In thousands)	June 30, 2021		March 31, 2021		(In thousands)	September 30, 2021		March 31, 2021
Components of Inventories	Components of Inventories					Components of Inventories
Packaging and raw materials	Packaging and raw materials	$	9,480	$	8,463	Packaging and raw materials	$	11,333	$	8,463
Work in process	Work in process	326		326		Work in process	344		326
Finished goods	Finished goods	95,740		106,170		Finished goods	96,241		106,170

Inventories	Inventories	$	105,546	$	114,959	Inventories	$	107,918	$	114,959

Inventories are carried and depicted above at the lower of cost or net realizable value, which includes a reduction in inventory values of ~~$6.0~~$5.1 million and $4.0 million at ~~June~~September 30, 2021 and March 31, 2021, respectively, related to obsolete and slow-moving inventory.

~~-7-~~-9-

3.4. Goodwill

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


(In thousands)	(In thousands)		North American OTC Healthcare		International OTC Healthcare		Consolidated		(In thousands)		North American OTC Healthcare		International OTC Healthcare		Consolidated
Balance - March 31, 2021	Balance - March 31, 2021								Balance - March 31, 2021
		Goodwill	$	710,354	$	32,683	$	743,037		Goodwill	$	710,354	$	32,683	$	743,037
		Accumulated impairment loss	(163,711)		(1,247)		(164,958)			Accumulated impairment loss	(163,711)		(1,247)		(164,958)
Balance - March 31, 2021	Balance - March 31, 2021		546,643		31,436		578,079		Balance - March 31, 2021		546,643		31,436		578,079
										2022 Additions	1,758		—		1,758

		Effects of foreign currency exchange rates	0		(239)		(239)			Effects of foreign currency exchange rates	—		(1,040)		(1,040)
Balance - June 30, 2021
Balance - September 30, 2021									Balance - September 30, 2021
		Goodwill	710,354		32,444		742,798			Goodwill	712,112		31,643		743,755
		Accumulated impairment loss	(163,711)		(1,247)		(164,958)			Accumulated impairment loss	(163,711)		(1,247)		(164,958)
Balance - June 30, 2021			$	546,643	$	31,197	$	577,840
Balance - September 30, 2021									Balance - September 30, 2021		$	548,401	$	30,396	$	578,797

As discussed in Note 2, on July 1, 2021, we completed the acquisition of Akorn. In connection with this acquisition, we recorded goodwill of $1.8 million based on the amount by which the purchase price exceeded the preliminary estimate of the fair value of the net assets acquired.

On an annual basis during the fourth quarter of each fiscal year, or more frequently if conditions indicate that the carrying value of the asset may not be recoverable, management performs a review of the values assigned to goodwill and tests for impairment. We utilize the discounted cash flow method to estimate the fair value of our reporting units as part of the goodwill impairment test. We also considered our market capitalization at February 28, 2021, which was the date of our annual review, as compared to the aggregate fair values of our reporting units, to assess the reasonableness of our estimates pursuant to the discounted cash flow methodology. The estimates and assumptions made in assessing the fair value of our reporting units and the valuation of the underlying assets and liabilities are inherently subject to significant uncertainties related to future sales, gross margins, and advertising and marketing expenses, which can be impacted by increases in competition, changing consumer preferences, technical advances, or the potential impacts of COVID-19. The discount rate assumption may be influenced by such factors as changes in interest rates and rates of inflation, which can have an impact on the determination of fair value. If these assumptions are adversely affected, we may be required to record impairment charges in the future. We continuously monitor events that could trigger an interim impairment analysis, which included the impact of COVID-19 for the period ended ~~June~~September 30, 2021.

As of ~~June~~September 30, 2021, we determined no events have occurred that would indicate potential impairment of goodwill.

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4.5. Intangible Assets, net

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


(In thousands)	(In thousands)	Indefinite- Lived Trademarks		Finite-Lived Trademarks and Customer Relationships		Totals		(In thousands)	Indefinite- Lived Trademarks		Finite-Lived Trademarks and Customer Relationships		Totals
Gross Carrying Amounts	Gross Carrying Amounts							Gross Carrying Amounts
Balance — March 31, 2021	Balance — March 31, 2021	$	2,281,988	$	389,347	$	2,671,335	Balance — March 31, 2021	$	2,281,988	$	389,347	$	2,671,335

Additions								Additions	204,100		24,870		228,970

Effects of foreign currency exchange rates	Effects of foreign currency exchange rates	(1,143)		(24)		(1,167)		Effects of foreign currency exchange rates	(4,498)		(139)		(4,637)
Balance — June 30, 2021		2,280,845		389,323		2,670,168
Balance — September 30, 2021								Balance — September 30, 2021	2,481,590		414,078		2,895,668

Accumulated Amortization	Accumulated Amortization							Accumulated Amortization
Balance — March 31, 2021	Balance — March 31, 2021	—		195,606		195,606		Balance — March 31, 2021	—		195,606		195,606

Additions	Additions	—		4,867		4,867		Additions	—		10,228		10,228

Effects of foreign currency exchange rates	Effects of foreign currency exchange rates	—		(19)		(19)		Effects of foreign currency exchange rates	—		(86)		(86)
Balance — June 30, 2021		—		200,454		200,454
Balance — September 30, 2021								Balance — September 30, 2021	—		205,748		205,748

Intangible assets, net - June 30, 2021		$	2,280,845	$	188,869	$	2,469,714
Intangible assets, net - September 30, 2021								Intangible assets, net - September 30, 2021	$	2,481,590	$	208,330	$	2,689,920

Amortization expense was ~~$4.9~~$5.3 million and $10.2 million for the three and six months ended ~~June~~September 30, 2021, respectively, and ~~June~~$4.9 million and $9.8 million for the three and six months ended September 30, ~~2020.~~2020, respectively.

~~-8-~~

As discussed in Note 2, on July 1, 2021, we completed the acquisition of Akorn. In connection with this acquisition, we allocated $229.0 million to intangible assets based on our preliminary analysis.

Finite-lived intangible assets are expected to be amortized over their estimated useful life, which ranges from a period of 10 to 30 years, and the estimated amortization expense for each of the five succeeding years and the periods thereafter is as follows (in thousands):


(In thousands)	(In thousands)			(In thousands)
Year Ending March 31,	Year Ending March 31,	Amount		Year Ending March 31,	Amount
2022 (remaining nine months ended March 31, 2022)		$	14,599
2022 (remaining six months ended March 31, 2022)				2022 (remaining six months ended March 31, 2022)	$	10,721
2023	2023	19,465		2023	21,413
2024	2024	19,441		2024	21,379
2025	2025	17,398		2025	19,287
2026	2026	15,126		2026	16,904
Thereafter	Thereafter	102,840		Thereafter	118,626
		$	188,869		$	208,330

Under accounting guidelines, indefinite-lived assets are not amortized, but must be tested for impairment annually, or more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of the asset below the carrying amount. On February 28, 2021, the date of our annual impairment review, there were no indicators of impairment as a result of the analysis and, accordingly, 0no additional impairment charge was taken on our March 31, 2021 financial statements. Additionally, at each reporting period, an evaluation must be made to determine whether events and circumstances continue to support an indefinite useful life. Intangible assets with finite lives are amortized over their respective estimated useful lives and are also tested for impairment whenever events or changes in circumstances indicate that the carrying value of the asset may not be recoverable and exceeds its fair value.

We utilize the excess earnings method to estimate the fair value of our individual indefinite-lived intangible assets. The assumptions subject to significant uncertainties include the discount rate utilized in the analyses, as well as future sales, gross margins, and advertising and marketing expenses. The discount rate assumption may be influenced by such factors as changes

-11-

in interest rates and rates of inflation, which can have an impact on the determination of fair value. Additionally, should the related fair values of intangible assets be adversely affected as a result of declining sales or margins caused by competition, changing consumer needs or preferences, technological advances, changes in advertising and marketing expenses, or the potential impacts of COVID-19, we may be required to record impairment charges in the future.

As of ~~June~~September 30, 2021, no events have occurred that would indicate potential impairment of intangible assets.

5.6. Leases

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

The components of lease expense for the three and six months ended ~~June~~September 30, 2021 and 2020 were as follows:


		Three Months Ended June 30,					Three Months Ended September 30,				Six Months Ended September 30,
(In thousands)	(In thousands)		2021		2020			(In thousands)	2021		2020		2021		2020
Finance lease cost:	Finance lease cost:							Finance lease cost:
Amortization of right-of-use assets	Amortization of right-of-use assets		$	642	$	325		Amortization of right-of-use assets	$	642	$	443	$	1,284	$	768
Interest on lease liabilities	Interest on lease liabilities		66		50			Interest on lease liabilities	63		59		129		109
Operating lease cost	Operating lease cost		1,687		1,697			Operating lease cost	1,683		1,692		3,370		3,389
Short term lease cost	Short term lease cost		22		23			Short term lease cost	24		22		46		45
Variable lease cost	Variable lease cost		11,651		11,707			Variable lease cost	11,998		12,303		23,649		24,010
Sublease income	Sublease income		0		(54)			Sublease income	—		(55)		—		(109)
Total net lease cost	Total net lease cost		$	14,068	$	13,748		Total net lease cost	$	14,410	$	14,464	$	28,478	$	28,212

~~-9-~~

As of ~~June~~September 30, 2021, the maturities of lease liabilities were as follows:


(In thousands)	(In thousands)							(In thousands)
Year Ending March 31,	Year Ending March 31,	Operating Leases		Finance Lease		Total		Year Ending March 31,	Operating Leases		Finance Lease		Total
2022 (Remaining nine months ending March 31, 2022)		$	5,453	$	2,119	$	7,572
2022 (Remaining six months ending March 31, 2022)								2022 (Remaining six months ending March 31, 2022)	$	3,673	$	1,413	$	5,086
2023	2023	6,377		2,826		9,203		2023	6,211		2,826		9,037
2024	2024	6,335		2,826		9,161		2024	6,416		2,826		9,242
2025	2025	4,137		1,413		5,550		2025	4,220		1,412		5,632
2026	2026	1,815		0		1,815		2026	1,898		—		1,898
Thereafter	Thereafter	3,164		0		3,164		Thereafter	3,608		—		3,608
Total undiscounted lease payments	Total undiscounted lease payments	27,281		9,184		36,465		Total undiscounted lease payments	26,026		8,477		34,503
Less amount of lease payments representing interest	Less amount of lease payments representing interest	(2,978)		(420)		(3,398)		Less amount of lease payments representing interest	(1,948)		(357)		(2,305)
Total present value of lease payments	Total present value of lease payments	$	24,303	$	8,764	$	33,067	Total present value of lease payments	$	24,078	$	8,120	$	32,198

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


		~~June~~September 30, 2021
Weighted average remaining lease term (years)
	Operating leases	~~4.45~~4.41
	Finance leases	~~3.25~~3.00
Weighted average discount rate
	Operating leases	~~5.26~~3.00	%
	Finance leases	2.98	%

-12-

7. Other Accrued Liabilities

Other accrued liabilities consist of the following:


(In thousands)	(In thousands)	June 30, 2021		March 31, 2021		(In thousands)	September 30, 2021		March 31, 2021
Accrued marketing costs	Accrued marketing costs	$	38,885	$	29,955	Accrued marketing costs	$	44,603	$	29,955
Accrued compensation costs	Accrued compensation costs	7,107		14,074		Accrued compensation costs	11,638		14,074
Accrued broker commissions	Accrued broker commissions	749		1,023		Accrued broker commissions	943		1,023
Income taxes payable	Income taxes payable	7,772		1,652		Income taxes payable	1,551		1,652
Accrued professional fees	Accrued professional fees	4,523		4,472		Accrued professional fees	4,743		4,472

Accrued production costs	Accrued production costs	3,415		2,882		Accrued production costs	3,790		2,882

Accrued sales tax	Accrued sales tax	1,692		2,368		Accrued sales tax	977		2,368
Other accrued liabilities	Other accrued liabilities	4,292		4,976		Other accrued liabilities	10,405		4,976
		$	68,435	$	61,402		$	78,650	$	61,402

~~-10-~~

7.8. Long-Term Debt

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


(In thousands, except percentages)	(In thousands, except percentages)	June 30, 2021		March 31, 2021		(In thousands, except percentages)	September 30, 2021		March 31, 2021

2021 Senior Notes bearing interest at 3.750%, with interest payable on April 1 and October 1 of each year. The 2021 Senior Notes mature on April 1, 2031.	2021 Senior Notes bearing interest at 3.750%, with interest payable on April 1 and October 1 of each year. The 2021 Senior Notes mature on April 1, 2031.	600,000		600,000		2021 Senior Notes bearing interest at 3.750%, with interest payable on April 1 and October 1 of each year. The 2021 Senior Notes mature on April 1, 2031.	$	600,000	$	600,000
2019 Senior Notes bearing interest at 5.125%, with interest payable on January 15 and July 15 of each year. The 2019 Senior Notes mature on January 15, 2028.	2019 Senior Notes bearing interest at 5.125%, with interest payable on January 15 and July 15 of each year. The 2019 Senior Notes mature on January 15, 2028.	400,000		400,000		2019 Senior Notes bearing interest at 5.125%, with interest payable on January 15 and July 15 of each year. The 2019 Senior Notes mature on January 15, 2028.	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 base rate floor of 1.00%, due on January 26, 2024.		475,000		495,000
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% per annum, with a base rate floor of 1.00%, due on January 24, 2024.						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% per annum, with a base rate floor of 1.00%, due on January 24, 2024.	—		495,000
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 0.50%, or an alternate base rate plus a margin of 1.00% per annum, due on July 1, 2028.						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 0.50%, or an alternate base rate plus a margin of 1.00% per annum, due on July 1, 2028.	600,000		—
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 December 11, 2024.	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 December 11, 2024.	85,000		0		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 December 11, 2024.	20,000		—

Total long-term debt (including current portion)						Total long-term debt (including current portion)	1,620,000		1,495,000
Current portion of long-term debt						Current portion of long-term debt	6,000		—
Long-term debt	Long-term debt	1,560,000		1,495,000		Long-term debt	1,614,000		1,495,000
Less: unamortized debt costs	Less: unamortized debt costs	(14,648)		(15,347)		Less: unamortized debt costs	(21,019)		(15,347)

Long-term debt, net	Long-term debt, net	$	1,545,352	$	1,479,653	Long-term debt, net	$	1,592,981	$	1,479,653

At ~~June~~September 30, 2021, we had ~~$85.0~~$20.0 million outstanding on the asset-based revolving credit facility entered into January 31, 2012, as amended (the "2012 ABL Revolver"), and a borrowing capacity of ~~$57.1~~$104.6 million.

~~See Note 19 - Subsequent Events.~~On July 1, 2021, we entered into Amendment No. 6 ("Term Loan Amendment No. 6") to the 2012 Term Loan. Term Loan Amendment No. 6 provides for (i) the refinancing of our outstanding term loans and the creation of a new class of Term B-5 Loans under the credit agreement governing the 2012 Term Loan in an aggregate principal amount of $600.0 million, (ii) increased flexibility under the credit agreement and (iii) an interest rate on the Term B-5 Loans that is based, at the Borrower's option, on a LIBOR rate plus a margin of 2.00% per annum, with a LIBOR floor of 0.50%, or an alternative base rate plus a margin of 1.00% per annum. In addition, Term Loan Amendment No. 6 provides for an extension of the maturity date to July 1, 2028. Under Term Loan Amendment No. 6, we are required to make quarterly payments each equal to 0.25% of the aggregate principal amount. During the three months ended September 30, 2021, we recorded a loss on extinguishment of debt of $2.1 million to write off a portion of new and old debt costs relating to this refinancing.

The net proceeds from the new class of Term B-5 Loans were used to refinance our outstanding term loans, finance the acquisition of Akorn and pay fees and expenses incurred in connection with these transactions (see Note 2).

-13-

Interest Rate Swaps:

We currently have an interest rate swap to hedge a total of $200.0 million of our variable interest debt (see Note 910 for further details).

As of ~~June~~September 30, 2021, aggregate future principal payments required in accordance with the terms of the 2012 Term B-5 Loans, 2012 ABL Revolver and the indentures governing the senior unsecured notes due 2031 (the "2021 Senior Notes") and the senior unsecured notes due 2028 (the "2019 Senior Notes") are as follows:


(In thousands)	(In thousands)			(In thousands)
Year Ending March 31,	Year Ending March 31,	Amount		Year Ending March 31,	Amount
2022 (remaining nine months ending March 31, 2022)		$	0
2022 (remaining six months ending March 31, 2022)				2022 (remaining six months ending March 31, 2022)	$	3,000
2023	2023	0		2023	6,000
2024	2024	475,000		2024	6,000
2025	2025	85,000		2025	26,000
2026	2026	0		2026	6,000
Thereafter	Thereafter	1,000,000		Thereafter	1,573,000
		$	1,560,000		$	1,620,000

8.9. Fair Value Measurements

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

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

~~-11-~~

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

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

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

The market values have been determined based on market values for similar instruments adjusted for certain factors. As such, the 2021 Senior Notes, the 2019 Senior Notes, the 2012 Term B-5 Loans, and the 2012 ABL Revolver and our interest rate swaps are measured in Level 2 of the above hierarchy. The summary below details the carrying amounts and estimated fair values of these instruments at ~~June~~September 30, 2021 and March 31, 2021.


		June 30, 2021				March 31, 2021					September 30, 2021				March 31, 2021
(In thousands)	(In thousands)	Carrying Value		Fair Value		Carrying Value		Fair Value		(In thousands)	Carrying Value		Fair Value		Carrying Value		Fair Value
2021 Senior Notes	2021 Senior Notes	$	600,000	$	579,000	$	600,000	$	570,000	2021 Senior Notes	$	600,000	$	577,500	$	600,000	$	570,000

2019 Senior Notes	2019 Senior Notes	400,000		421,000		400,000		417,000		2019 Senior Notes	400,000		416,000		400,000		417,000
2012 Term B-5 Loans		475,000		475,000		495,000		493,763
2012 Term B-5 Loans, Amendment No. 5										2012 Term B-5 Loans, Amendment No. 5	—		—		495,000		493,763
2012 Term B-5 Loans, Amendment No. 6										2012 Term B-5 Loans, Amendment No. 6	600,000		599,250		—		—
2012 ABL Revolver	2012 ABL Revolver	85,000		85,000		0		0		2012 ABL Revolver	20,000		20,000		—		—
Interest rate swaps	Interest rate swaps	1,688		1,688		2,363		2,363		Interest rate swaps	973		973		2,363		2,363

At ~~June~~September 30, 2021 and March 31, 2021, we did not have any assets or liabilities measured in Level 1 or 3.

9.10. Derivative Instruments

Changes in interest rates expose us to risks. To help us manage these risks, in January 2020 we entered into 2 interest rate swaps to hedge a total of $400.0 million of our variable interest debt. NaN swap settled on January 31, 2021 and, as of ~~June~~

-14-

September 30, 2021, one interest rate swap to hedge $200.0 million remained outstanding. The fair value of this interest rate swap is reflected in our Consolidated Balance Sheets in other accrued liabilities. We do not use derivatives for trading purposes.

The following tables summarize the fair values of our derivative instrument as of the end of the periods shown:


		June 30, 2021									September 30, 2021
(In thousands)	(In thousands)	Hedge Type	Final Settlement Date	Notional Amount		Other Accrued Liabilities		Other Long-Term Liabilities		(In thousands)	Hedge Type	Final Settlement Date	Notional Amount		Other Accrued Liabilities		Other Long-Term Liabilities

Interest rate swap	Interest rate swap	Cash flow	1/31/2022	$	200,000	(1,688)		0		Interest rate swap	Cash flow	1/31/2022	$	200,000	$	(973)	$	—
Total fair value	Total fair value					$	(1,688)	$	0	Total fair value					$	(973)	$	—


		March 31, 2021									March 31, 2021
(In thousands)	(In thousands)	Hedge Type	Final Settlement Date	Notional Amount		Other Accrued Liabilities		Other Long-Term Liabilities		(In thousands)	Hedge Type	Final Settlement Date	Notional Amount		Other Accrued Liabilities		Other Long-Term Liabilities

Interest rate swap	Interest rate swap	Cash flow	1/31/2022	$	200,000	(2,363)		0		Interest rate swap	Cash flow	1/31/2022	$	200,000	$	(2,363)	$	—
Total fair value	Total fair value					$	(2,363)	$	0	Total fair value					$	(2,363)	$	—

The following table summarizes our interest rate swaps, net of tax, for the periods shown:


			Three Months Ended June 30,						Three Months Ended September 30,			Six Months Ended September 30,
(In thousands)	(In thousands)	Location		2021		2020		(In thousands)	Location	2021		2020		2021		2020
Gain Recognized in Other Comprehensive Loss (effective portion)	Gain Recognized in Other Comprehensive Loss (effective portion)	Other comprehensive income (loss)		$	520	$	309	Gain Recognized in Other Comprehensive Loss (effective portion)	Other comprehensive income (loss)	$	550	$	985	$	1,070	$	1,294
Loss Reclassified from Accumulated Other Comprehensive Loss into Income	Loss Reclassified from Accumulated Other Comprehensive Loss into Income	Interest expense		$	(718)	$	(1,026)	Loss Reclassified from Accumulated Other Comprehensive Loss into Income	Interest expense	$	(732)	$	(1,396)	$	(1,450)	$	(2,422)

We expect pre-tax losses of ~~$1.7~~$1.0 million associated with interest rate swaps, currently reported in accumulated other comprehensive loss, to be reclassified into ~~income~~expense over the next twelve months. The amount ultimately realized, however, will differ as interest rates change and the underlying contracts settle.

~~-12-~~

Counterparty Credit Risk:

Interest rate swaps expose us to counterparty credit risk for non-performance. We manage our exposure to counterparty credit risk by only dealing with counterparties who are substantial international financial institutions with significant experience using such derivative instruments.

~~10.~~11. Stockholders' Equity

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

Each share of common stock has the right to 1 vote on all matters submitted to a vote of stockholders. The holders of common stock are also entitled to receive dividends whenever funds are legally available and when declared by the Board of Directors, subject to prior rights of holders of all classes of outstanding stock having priority rights as to dividends. ~~NaN~~No dividends have been declared or paid on our common stock through ~~June~~September 30, 2021.

During the ~~three~~six months ended ~~June~~September 30, 2021 and the three and six months ended September 30, 2020, we repurchased shares of our common stock ~~pursuant to the provisions of the various employee restricted stock awards~~ and recorded them as treasury stock. Our share repurchases consisted of the following:

Three Months Ended June 30,
2021 2020
Number of shares 63,314 31,117
Average price per share $46.04 $39.91
Total amount repurchased $2.9 million $1.2 million

-15-


	Three Months Ended September 30,				Six Months Ended September 30,
	2021		2020		2021		2020
Shares repurchased pursuant to the provisions of the various employee restricted stock awards:
Number of shares	—		—		63,314		31,117
Average price per share	$	—	$	—	$46.04		$39.91
Total amount repurchased	$	—	$	—	$2.9 million		$1.2 million

Shares repurchased in conjunction with our share repurchase program:
Number of shares	—		28,865		—		28,865
Average price per share	$	—	$34.55		$	—	$34.55
Total amount repurchased	$	—	$1.0 million		$	—	$1.0 million

~~11.~~12. Accumulated Other Comprehensive Loss

Accumulated other comprehensive loss consisted of the following at ~~June~~September 30, 2021 and March 31, 2021:


(In thousands)	(In thousands)	June 30, 2021		March 31, 2021		(In thousands)	September 30, 2021		March 31, 2021
Components of Accumulated Other Comprehensive Loss	Components of Accumulated Other Comprehensive Loss					Components of Accumulated Other Comprehensive Loss
Cumulative translation adjustment	Cumulative translation adjustment	$	(20,400)	$	(18,908)	Cumulative translation adjustment	$	(24,597)	$	(18,908)
Unrealized loss on interest rate swaps, net of tax of $388 and $543, respectively		(1,299)		(1,819)
Unrealized loss on interest rate swaps, net of tax of $224 and $543, respectively						Unrealized loss on interest rate swaps, net of tax of $224 and $543, respectively	(749)		(1,819)
Unrecognized net gain (loss) on pension plans, net of tax of $(276) and $(276), respectively	Unrecognized net gain (loss) on pension plans, net of tax of $(276) and $(276), respectively	926		926		Unrecognized net gain (loss) on pension plans, net of tax of $(276) and $(276), respectively	926		926
Accumulated other comprehensive loss, net of tax	Accumulated other comprehensive loss, net of tax	$	(20,773)	$	(19,801)	Accumulated other comprehensive loss, net of tax	$	(24,420)	$	(19,801)

As of ~~June~~September 30, 2021 and March 31, 2021, 0no amounts were reclassified from accumulated other comprehensive loss into earnings.

~~12.~~13. Earnings Per Share

Basic earnings per share is computed based on income available to common stockholders and the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share is computed based on income available to common stockholders and the weighted average number of shares of common stock outstanding plus the effect of potentially dilutive common shares outstanding during the period using the treasury stock method, which includes stock options, ~~and~~ restricted stock units ("RSUs") and performance stock units ("PSUs"). Potential common shares, composed of the incremental common shares issuable upon the exercise of outstanding stock options and unvested RSUs, are included in the diluted earnings per share calculation to the extent that they are dilutive. In loss periods, the assumed exercise of in-the-money stock options and RSUs has an anti-dilutive effect, and therefore these instruments are excluded from the computation of diluted earnings per share.

~~-13-~~-16-

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


		Three Months Ended June 30,					Three Months Ended September 30,				Six Months Ended September 30,
(In thousands, except per share data)	(In thousands, except per share data)		2021		2020			(In thousands, except per share data)	2021		2020		2021		2020
Numerator	Numerator							Numerator
Net income	Net income		$	57,755	$	43,706		Net income	$	45,325	$	44,589	$	103,080	$	88,295

Denominator	Denominator							Denominator
Denominator for basic earnings per share — weighted average shares outstanding	Denominator for basic earnings per share — weighted average shares outstanding		50,139		50,264			Denominator for basic earnings per share — weighted average shares outstanding	50,232		50,330		50,186		50,297
Dilutive effect of unvested restricted stock units and options issued to employees and directors	Dilutive effect of unvested restricted stock units and options issued to employees and directors		532		544			Dilutive effect of unvested restricted stock units and options issued to employees and directors	559		331		545		375
Denominator for diluted earnings per share	Denominator for diluted earnings per share		50,671		50,808			Denominator for diluted earnings per share	50,791		50,661		50,731		50,672

Earnings per Common Share:	Earnings per Common Share:							Earnings per Common Share:
Basic earnings per share	Basic earnings per share		$	1.15	$	0.87		Basic earnings per share	$	0.90	$	0.89	$	2.05	$	1.76

Diluted earnings per share	Diluted earnings per share		$	1.14	$	0.86		Diluted earnings per share	$	0.89	$	0.88	$	2.03	$	1.74

For the three months ended ~~June~~September 30, 2021 and 2020, there were ~~0.5~~0.4 million and 0.6 million shares, respectively, attributable to outstanding stock-based awards that were excluded from the calculation of diluted earnings per share because their inclusion would have been anti-dilutive. For the six months ended September 30, 2021 and 2020, there were 0.4 million and 0.6 million shares, respectively, attributable to outstanding stock-based awards that were excluded from the calculation of diluted earnings per share because their inclusion would have been anti-dilutive.

~~13.~~14. Share-Based Compensation

In connection with our initial public offering, the Board of Directors adopted the 2005 Long-Term Equity Incentive Plan (the “2005 Plan”), which provided for grants of up to a maximum of 5.0 million shares of restricted stock, stock options, RSUs and other equity-based awards. In June 2014, the Board of Directors approved, and in July 2014, our stockholders ratified, an increase of an additional 1.8 million shares of our common stock for issuance under the 2005 Plan, an increase of the maximum number of shares subject to stock options that could be awarded to any one participant under the 2005 Plan during any fiscal 12-month period from 1.0 million to 2.5 million shares, and an extension of the term of the 2005 Plan by ten years, to February 2025. Directors, officers and other employees of the Company and its subsidiaries, as well as others performing services for the Company, were eligible for grants under the 2005 Plan.

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

-17-

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


		Three Months Ended June 30,					Three Months Ended September 30,				Six Months Ended September 30,
(In thousands)	(In thousands)		2021		2020			(In thousands)	2021		2020		2021		2020
Pre-tax share-based compensation costs charged against income	Pre-tax share-based compensation costs charged against income		$	1,878	$	1,464		Pre-tax share-based compensation costs charged against income	$	3,219	$	2,892	$	5,097	$	4,356
Income tax benefit recognized on compensation costs	Income tax benefit recognized on compensation costs		$	143	$	112		Income tax benefit recognized on compensation costs	$	369	$	451	$	512	$	563
Total fair value of options and RSUs vested during the period	Total fair value of options and RSUs vested during the period		$	7,006	$	5,781		Total fair value of options and RSUs vested during the period	$	937	$	1,015	$	7,943	$	6,796
Cash received from the exercise of stock options	Cash received from the exercise of stock options		$	2,204	$	1,216		Cash received from the exercise of stock options	$	503	$	69	$	2,707	$	1,285
Tax benefits realized from tax deductions resulting from RSU issuances and stock option exercises	Tax benefits realized from tax deductions resulting from RSU issuances and stock option exercises		$	1,721	$	944		Tax benefits realized from tax deductions resulting from RSU issuances and stock option exercises	$	350	$	4	$	2,071	$	948

At ~~June~~September 30, 2021, there were ~~$13.1~~$4.0 million of unrecognized compensation costs related to unvested ~~share-based compensation arrangements~~stock options under the 2005 Plan and the 2020 Plan, ~~based on management's~~excluding an estimate ~~of the shares that will ultimately vest.~~for forfeitures which may occur. We expect to recognize such costs over a weighted average period of ~~1.1~~2.2 years. At ~~June~~September 30, 2021, there were $11.2 million of unrecognized compensation costs related to unvested RSUs and PSUs under the 2005 Plan and the 2020 Plan, excluding an estimate for forfeitures which may occur. We expect to recognize such costs over a weighted average period of 2.0 years.

At September 30, 2021, there were 2.5 million shares available for issuance under the 2020 Plan.

~~-14-~~

On May 3, 2021, the Compensation and Talent Management Committee (the "Committee") of our Board of Directors granted 77,345 ~~performance stock units,~~PSUs, 73,108 RSUs, and stock options to acquire 222,660 shares of our common stock under the 2020 Plan to certain executive officers and employees. The stock options were granted at an exercise price of $44.33 per share, which was equal to the closing price for our common stock on the date of the grant.

A newly appointed independent member of the Board of Directors received a grant under the 2020 Plan of 1,636 RSUs on May 3, 2021. Each of the independent members of the Board of Directors received a grant of 2,808 RSUs on August 3, 2021 under the 2020 Plan. The RSUs are fully vested upon receipt of the award and will be settled by delivery to each director of one share of our common stock for each vested RSU promptly following the earliest of (i) such director's death, (ii) such director's separation from service or (iii) a change in control of the Company.

Restricted Stock Units

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

RSUs

Shares
(in thousands)
Weighted
Average
Grant-Date
Fair Value
Three Months Ended June 30, 2020
Vested and unvested at March 31, 2020 512.1 $ 32.49
Granted 153.6 39.98
Vested and issued (74.0) 44.38
Forfeited (4.7) 56.11
Vested and unvested at June 30, 2020 587.0 32.76
Vested at June 30, 2020 124.2 30.54

Three Months Ended June 30, 2021
Vested and unvested at March 31, 2021 607.4 $ 33.02
Granted 152.1 44.33
Vested and issued (144.5) 30.57
Forfeited (23.1) 30.17
Vested and unvested at June 30, 2021 591.9 36.64
Vested at June 30, 2021 151.3 32.03


RSUs	Shares (in thousands)	Weighted Average Grant-Date Fair Value
Six Months Ended September 30, 2020
Unvested at March 31, 2020	387.9	$	33.11
Granted	179.7	40.22
Vested	(100.2)	42.94
Forfeited	(4.7)	56.11
Unvested at September 30, 2020	462.7	33.51
Vested at September 30, 2020	150.4	31.98

Six Months Ended September 30, 2021
Unvested at March 31, 2021	457.0	$	33.52
Granted	170.8	45.32
Vested	(162.3)	32.99
Forfeited	(24.6)	30.54
Unvested at September 30, 2021	440.9	38.45
Vested at September 30, 2021	152.3	33.92

-18-

Options

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


		Three Months Ended June 30,						Six Months Ended September 30,
		2021			2020			2021		2020
Expected volatility	Expected volatility	31.2% - 31.9%			32.1% - 32.2%		Expected volatility	31.1% - 31.9%		32.1% - 32.2%
Expected dividends	Expected dividends	$	0		$	0	Expected dividends	$	—	$	—
Expected term in years	Expected term in years	6.0 to 7.0			6.0 to 7.0		Expected term in years	6.0 to 7.0		6.0 to 7.0
Risk-free rate	Risk-free rate	1.3		%	0.5%		Risk-free rate	1.0% to 1.3%		0.5%
Weighted average grant date fair value of options granted	Weighted average grant date fair value of options granted	$	14.77		$	12.91	Weighted average grant date fair value of options granted	$	14.87	$	12.91

~~-15-~~

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

Options

Shares
(in thousands)
Weighted
Average
Exercise
Price Weighted
Average
Remaining
Contractual
Term (years) Aggregate
Intrinsic
Value
(in thousands)
Three Months Ended June 30, 2020
Outstanding at March 31, 2020 1,020.2 $ 35.90
Granted 249.9 39.98
Exercised (60.5) 20.10
Forfeited or expired 0 0
Outstanding at June 30, 2020 1,209.6 37.53 7.3 $ 5,770
Vested at June 30, 2020 701.5 39.36 5.9 $ 3,874
Three Months Ended June 30, 2021
Outstanding at March 31, 2021 1,114.9 $ 37.92
Granted 222.7 44.33
Exercised (67.9) 32.49
Forfeited or expired (17.6) 46.09
Outstanding at June 30, 2021 1,252.1 39.24 6.9 $ 17,068
Vested at June 30, 2021 779.5 38.72 5.6 $ 11,399


Options	Shares (in thousands)	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (years)	Aggregate Intrinsic Value (in thousands)
Six Months Ended September 30, 2020
Outstanding at March 31, 2020	1,020.2	$	35.90
Granted	249.9	39.98
Exercised	(62.8)	20.46
Forfeited	—	—
Expired	—	—
Outstanding at September 30, 2020	1,207.3	37.55		7.0	$	5,032
Vested at September 30, 2020	699.1	39.39		5.6	$	3,430

Six Months Ended September 30, 2021
Outstanding at March 31, 2021	1,114.9	$	37.92
Granted	234.2	44.74
Exercised	(87.6)	30.91
Forfeited	(13.7)	37.83
Expired	(8.5)	56.63
Outstanding at September 30, 2021	1,239.3	39.58		6.7	$	20,593
Vested at September 30, 2021	759.7	39.06		5.3	$	13,060

The aggregate intrinsic value of options exercised during the ~~three~~six months ended ~~June~~September 30, 2021 was ~~$1.1~~$1.8 million.

~~14.~~15. Income Taxes

Income taxes are recorded in our quarterly financial statements based on our estimated annual effective income tax rate, subject to adjustments for discrete events, should they occur. The effective tax rates used in the calculation of income taxes were ~~24.4%~~24.0% and ~~24.9%~~14.1% for the three months ended ~~June~~September 30, 2021 and 2020, respectively. The ~~decrease~~effective tax rates used in the calculation of income taxes were 24.2% and 19.8% for the six months ended September 30, 2021 and 2020, respectively. The lower effective tax ~~rate for~~rates in the three and six months ended ~~June~~September 30, ~~2021 versus~~2020 were primarily due to final Global Intangible Low-Taxed Income regulations issued in July 2020, which resulted in the ~~prior year period was based~~release of the valuation allowance on ~~our estimated annual effective income~~foreign tax ~~rate, which fluctuates based on the mix~~credit carryforwards of ~~earnings from our U.S. and foreign jurisdictions, and discrete items pertaining to share-based compensation.~~$5.1 million.

~~15.~~

-19-

16. Employee Retirement Plans

The primary components of Net Periodic Benefits consist of the following:


		Three Months Ended June 30,					Three Months Ended September 30,				Six Months Ended September 30,
(In thousands)	(In thousands)		2021		2020			(In thousands)	2021		2020		2021		2020
Interest cost	Interest cost		$	278	$	525		Interest cost	$	278	$	525	$	556	$	1,050
Expected return on assets	Expected return on assets		(290)		(647)			Expected return on assets	(290)		(647)		(580)		(1,294)
Net periodic benefit income	Net periodic benefit income		$	(12)	$	(122)		Net periodic benefit income	$	(12)	$	(122)	$	(24)	$	(244)

During the ~~three~~six months ended ~~June~~September 30, 2021, we contributed ~~$0.1~~$0.2 million to our non-qualified defined benefit plan and 0no contributions to the qualified defined benefit plan. During the remainder of fiscal 2022, we expect to contribute an additional ~~$0.3~~$0.2 million to our non-qualified plan and to make no contributions to the qualified plan.

During the fourth quarter of 2021, we adopted a plan termination date of April 30, 2021 for our U.S. qualified defined benefit pension plan (the "Plan") and began the Plan termination process. Pension obligations related to the Plan of $52.1 million are expected to be distributed through a combination of lump sum payments to eligible Plan participants who elect such payments and through the purchase of annuity contracts to the remaining participants. The benefit obligation for the Plan as of March 31, 2021 was therefore determined on a plan termination basis for which it is assumed that a portion of eligible active and deferred vested participants will elect lump sum payments. The Plan likely has sufficient assets to satisfy all transaction obligations. No distributions have been made as of ~~June~~September 30, 2021 related to the termination. The transaction is expected to close in the first quarter of fiscal 2023.

~~-16-~~

~~16.~~17. Commitments and Contingencies

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

~~17.~~18. Concentrations of Risk

Our revenues are concentrated in the area of OTC Healthcare. We sell our products to mass merchandisers, drug, food, dollar, convenience and club stores and e-commerce channels. During the three and six months ended ~~June~~September 30, 2021, approximately 41.3% and 43.3%, respectively, of our gross revenues were derived from our five top selling brands. During the three and six months ended September 30, 2020, approximately ~~45.5%~~45.8% and ~~48.0%~~46.2%, respectively, of our gross revenues were derived from our five top selling brands. One customer, Walmart, accounted for more than 10% of our gross revenues for each of the periods presented. Walmart accounted for approximately ~~20.5%~~22.7% and ~~22.0%~~21.2%, respectively, of our gross revenues for the three and six months ended ~~June~~September 30, ~~2021 and 2020. Another customer, Walgreens,~~2021. Walmart accounted for ~~10.6%~~approximately 22.5% and 22.3%, respectively, of our gross revenues for the ~~first quarter of fiscal 2022. An additional customer, Amazon, accounted for 13.3% of our gross revenues for the first quarter of the prior fiscal year.~~three and six months ended September 30, 2020.

Our product distribution in the United States is managed by a third party through one primary distribution center in Clayton, Indiana. In addition, we operate one manufacturing facility for certain of our products located in Lynchburg, Virginia. A natural disaster, such as tornado, earthquake, flood, or fire, could damage our inventory and/or materially impair our ability to distribute our products to customers in a timely manner or at a reasonable cost. In addition, a serious disruption caused by performance or contractual issues with our third-party distribution manager or COVID-19 or other public health emergencies could also materially impact our product distribution. Any disruption as a result of third-party performance at our distribution center could result in increased costs, expense and/or shipping times, and could cause us to incur customer fees and penalties. In addition, any serious disruption to our Lynchburg manufacturing facility could materially impair our ability to manufacture many of the products associated with our acquisition of C.B. Fleet Company, Inc. ("Fleet"), which would also limit our ability to provide those products to customers in a timely manner or at a reasonable cost. We could also incur significantly higher costs and experience longer lead times if we need to replace our distribution center, the third-party distribution manager or the

-20-

manufacturing facility. As a result, any serious disruption could have a material adverse effect on our business, financial condition and results of operations.

At ~~June~~September 30, 2021, we had relationships with ~~118~~121 third-party manufacturers. Of those, we had long-term contracts with 1819 manufacturers that produced items that accounted for approximately ~~69.8%~~68.1% of gross sales for the ~~three~~six months ended ~~June~~September 30, 2021. At ~~June~~September 30, 2020, we had relationships with 113 third-party manufacturers. Of those, we had long-term contracts with 19 manufacturers that produced items that accounted for approximately ~~60.6%~~65.4% of gross sales for the ~~three~~six months ended ~~June~~September 30, 2020. The fact that we do not have long-term contracts with certain manufacturers means that they could cease manufacturing our products at any time and for any reason or initiate arbitrary and costly price increases, which could have a material adverse effect on our business and results of operations. Although we are continually in the process of negotiating long-term contracts with certain key manufacturers, we may not be able to reach a timely agreement, which could have a material adverse effect on our business and results of operations.

~~-17-~~

~~18.~~19. Business Segments

Segment information has been prepared in accordance with the Segment Reporting topic of the FASB ASC 280. Our current reportable segments consist of (i) North American OTC Healthcare and (ii) International OTC Healthcare. We evaluate the performance of our operating segments and allocate resources to these segments based primarily on contribution margin, which we define as gross profit less advertising and marketing expenses.

The tables below summarize information about our reportable segments.

Three Months Ended June 30, 2021
(In thousands) North American OTC
Healthcare International OTC
Healthcare Consolidated
Total segment revenues* $ 242,393 $ 26,788 $ 269,181
Cost of sales 99,404 10,765 110,169
Gross profit 142,989 16,023 159,012
Advertising and marketing 35,230 4,209 39,439
Contribution margin $ 107,759 $ 11,814 119,573
Other operating expenses 28,231
Operating income $ 91,342
* Intersegment revenues of $1.0 million were eliminated from the North American OTC Healthcare segment.


		Three Months Ended June 30, 2020				Three Months Ended September 30, 2021
(In thousands)	(In thousands)	North American OTC Healthcare		International OTC Healthcare			Consolidated		(In thousands)	North American OTC Healthcare		International OTC Healthcare		Consolidated
Total segment revenues*	Total segment revenues*	$	210,658	$	18,736		$	229,394	Total segment revenues*	$	251,728	$	24,497	$	276,225
Cost of sales	Cost of sales	87,827		7,699			95,526		Cost of sales	108,623		9,890		118,513
Gross profit	Gross profit	122,831		11,037			133,868		Gross profit	143,105		14,607		157,712
Advertising and marketing	Advertising and marketing	24,680		3,070			27,750		Advertising and marketing	36,493		4,237		40,730
Contribution margin	Contribution margin	$	98,151	$	7,967		106,118		Contribution margin	$	106,612	$	10,370	116,982
Other operating expenses	Other operating expenses						25,999		Other operating expenses					38,424
Operating income	Operating income						$	80,119	Operating income					$	78,558
* Intersegment revenues of $1.0 million were eliminated from the North American OTC Healthcare segment.
* Intersegment revenues of $0.7 million were eliminated from the North American OTC Healthcare segment.									* Intersegment revenues of $0.7 million were eliminated from the North American OTC Healthcare segment.


	Six Months Ended September 30, 2021
(In thousands)	North American OTC Healthcare		International OTC Healthcare		Consolidated
Total segment revenues*	$	494,121	$	51,285	$	545,406
Cost of sales	208,027		20,655		228,682
Gross profit	286,094		30,630		316,724
Advertising and marketing	71,723		8,446		80,169
Contribution margin	$	214,371	$	22,184	236,555
Other operating expenses					66,655
Operating income					$	169,900
* Intersegment revenues of $1.7 million were eliminated from the North American OTC Healthcare segment.

~~-18-~~

-21-


	Three Months Ended September 30, 2020
(In thousands)	North American OTC Healthcare		International OTC Healthcare		Consolidated
Total segment revenues*	$	216,575	$	20,847	$	237,422
Cost of sales	91,069		8,692		99,761
Gross profit	125,506		12,155		137,661
Advertising and marketing	34,014		4,327		38,341
Contribution margin	$	91,492	$	7,828	99,320
Other operating expenses					26,417
Operating income					$	72,903
* Intersegment revenues of $0.6 million were eliminated from the North American OTC Healthcare segment.


	Six Months Ended September 30, 2020
(In thousands)	North American OTC Healthcare		International OTC Healthcare		Consolidated
Total segment revenues*	$	427,233	$	39,583	$	466,816
Cost of sales	178,896		16,391		195,287
Gross profit	248,337		23,192		271,529
Advertising and marketing	58,694		7,397		66,091
Contribution margin	$	189,643	$	15,795	205,438
Other operating expenses					52,416
Operating income					$	153,022
* Intersegment revenues of $1.6 million were eliminated from the North American OTC Healthcare segment.

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


	Three Months Ended September 30, 2021
(In thousands)	North American OTC Healthcare		International OTC Healthcare		Consolidated
Analgesics	$	29,943	$	396	$	30,339
Cough & Cold	23,022		5,006		28,028
Women's Health	65,020		3,345		68,365
Gastrointestinal	37,964		8,641		46,605
Eye & Ear Care	37,818		2,988		40,806
Dermatologicals	32,365		839		33,204
Oral Care	22,893		3,278		26,171
Other OTC	2,703		4		2,707

Total segment revenues	$	251,728	$	24,497	$	276,225

Three Months Ended June 30, 2021
(In thousands) North American OTC
Healthcare International OTC
Healthcare Consolidated
Analgesics $ 32,821 $ 406 $ 33,227
Cough & Cold 14,045 4,847 18,892
Women's Health 63,248 3,944 67,192
Gastrointestinal 42,366 10,204 52,570
Eye & Ear Care 35,987 3,458 39,445
Dermatologicals 31,150 939 32,089
Oral Care 20,967 2,989 23,956
Other OTC 1,809 1 1,810
Total segment revenues $ 242,393 $ 26,788 $ 269,181

Three Months Ended June 30, 2020
(In thousands) North American OTC
Healthcare International OTC
Healthcare Consolidated
Analgesics $ 27,867 $ 274 $ 28,141
Cough & Cold 13,438 3,902 17,340
Women's Health 65,410 2,431 67,841
Gastrointestinal 30,050 5,705 35,755
Eye & Ear Care 22,852 2,545 25,397
Dermatologicals 27,620 699 28,319
Oral Care 22,166 3,179 25,345
Other OTC 1,255 1 1,256
Total segment revenues $ 210,658 $ 18,736 $ 229,394

-22-


	Six Months Ended September 30, 2021
(In thousands)	North American OTC Healthcare		International OTC Healthcare		Consolidated
Analgesics	$	62,764	$	802	$	63,566
Cough & Cold	37,067		9,853		46,920
Women's Health	128,268		7,289		135,557
Gastrointestinal	80,330		18,845		99,175
Eye & Ear Care	73,805		6,446		80,251
Dermatologicals	63,515		1,778		65,293
Oral Care	43,860		6,267		50,127
Other OTC	4,512		5		4,517

Total segment revenues	$	494,121	$	51,285	$	545,406


	Three Months Ended September 30, 2020
(In thousands)	North American OTC Healthcare		International OTC Healthcare		Consolidated
Analgesics	$	30,623	$	267	$	30,890
Cough & Cold	14,796		3,086		17,882
Women's Health	61,492		4,106		65,598
Gastrointestinal	31,718		6,379		38,097
Eye & Ear Care	26,767		3,037		29,804
Dermatologicals	27,875		836		28,711
Oral Care	21,944		3,134		25,078
Other OTC	1,360		2		1,362

Total segment revenues	$	216,575	$	20,847	$	237,422


	Six Months Ended September 30, 2020
(In thousands)	North American OTC Healthcare		International OTC Healthcare		Consolidated
Analgesics	$	58,490	$	541	$	59,031
Cough & Cold	28,234		6,988		35,222
Women's Health	126,902		6,537		133,439
Gastrointestinal	61,768		12,084		73,852
Eye & Ear Care	49,619		5,582		55,201
Dermatologicals	55,495		1,535		57,030
Oral Care	44,110		6,313		50,423
Other OTC	2,615		3		2,618

Total segment revenues	$	427,233	$	39,583	$	466,816

Our total segment revenues by geographic area are as follows:


		Three Months Ended June 30,			Three Months Ended September 30,						Six Months Ended September 30,
			2021			2020			2021		2020		2021		2020
United States	United States		$	226,667		$	199,346	United States	$	236,151	$	203,289	$	462,818	$	402,635
Rest of world	Rest of world		42,514			30,048		Rest of world	40,074		34,133		82,588		64,181
Total	Total		$	269,181		$	229,394	Total	$	276,225	$	237,422	$	545,406	$	466,816

-23-

Our consolidated goodwill and intangible assets have been allocated to the reportable segments as follows:
June 30, 2021 North American OTC
Healthcare International OTC
Healthcare Consolidated
(In thousands)
Goodwill $ 546,643 $ 31,197 $ 577,840
Intangible assets
Indefinite-lived 2,195,617 85,228 2,280,845
Finite-lived, net 185,677 3,192 188,869
Intangible assets, net 2,381,294 88,420 2,469,714
Total $ 2,927,937 $ 119,617 $ 3,047,554

~~-19-~~


September 30, 2021	North American OTC Healthcare		International OTC Healthcare		Consolidated
(In thousands)
Goodwill	$	548,401	$	30,396	$	578,797

Intangible assets
Indefinite-lived	2,399,717		81,873		2,481,590
Finite-lived, net	205,267		3,063		208,330
Intangible assets, net	2,604,984		84,936		2,689,920
Total	$	3,153,385	$	115,332	$	3,268,717


March 31, 2021	North American OTC Healthcare		International OTC Healthcare		Consolidated
(In thousands)
Goodwill	$	546,643	$	31,436	$	578,079

Intangible assets
Indefinite-lived	2,195,617		86,371		2,281,988
Finite-lived, net	190,462		3,279		193,741
Intangible assets, net	2,386,079		89,650		2,475,729
Total	$	2,932,722	$	121,086	$	3,053,808

~~19. Subsequent Events~~

~~Director Equity Grants~~

Pursuant to the 2020 Plan, each of the independent members of the Board of Directors received a grant of 2,808 RSUs on August 3, 2021. The RSUs are fully vested upon receipt of the award and will be settled by delivery to each director of 1 share of our common stock for each vested RSU promptly following the earliest of (i) such director's death, (ii) such director's separation from service or (iii) a change in control of the Company.

~~Acquisition~~

On July 1, 2021, we completed the previously announced acquisition of the Consumer Health business assets from Akorn Operating Company LLC pursuant to an Asset Purchase Agreement, dated May 27, 2021 (the "Purchase Agreement"), for a purchase price of $230.0 million in cash, subject to certain closing adjustments specified in the Purchase Agreement. As a result of the purchase, we acquired ~~TheraTears~~ and certain other over-the-counter consumer brands. The purchase price was funded by a combination of available cash on hand, additional borrowings under the 2012 ABL Revolver and the net proceeds from the refinancing of our term loan entered into on January 31, 2012 (the "2012 Term Loan") (see below).

The acquisition will be accounted for as a business combination. We have begun the process to determine the purchase price allocation for the assets and liabilities including estimating the fair values of intangible and tangible assets. These estimates have not been completed due to the timing and complexity of obtaining information and calculating such amounts.

~~Term Loan Refinancing~~

On July 1, 2021, we entered into Amendment No. 6 ("Term Loan Amendment No. 6") to the 2012 Term Loan. Term Loan Amendment No. 6 provides for (i) the refinancing of our outstanding term loans and the creation of a new class of Term B-5 Loans under the credit agreement governing the 2012 Term Loan in an aggregate principal amount of $600.0 million, (ii) increased flexibility under the credit agreement and (iii) an interest rate on the Term B-5 Loans that is based, at the Borrower's option, on a LIBOR rate plus a margin of 2.00% per annum, with a LIBOR floor of 0.50%, or an alternative base rate plus a margin of 1.00% per annum. In addition, Term Loan Amendment No. 6 provides for an extension of the maturity date to July 1, 2028. Under the Term Loan Amendment No. 6, we are required to make quarterly payments each equal to 0.25% of the aggregate principal amount.

The net proceeds from the Term B-5 Loans were used to refinance our outstanding term loans and finance the acquisition of the Akorn Consumer Health business and to pay fees and expenses incurred in connection with these transactions.

~~-20-~~-24-

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion of our financial condition and results of operations should be read together with the Condensed Consolidated Financial Statements and the related notes included in this Quarterly Report on Form 10-Q, as well as our Annual Report on Form 10-K for the fiscal year ended March 31, 2021. This discussion and analysis may contain forward-looking statements that involve certain risks, assumptions and uncertainties. Future results could differ materially from the discussion that follows for many reasons, including the factors described in Part I, Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended March 31, 2021 and in future reports filed with the U.S. Securities and Exchange Commission ("SEC").


See also “Cautionary Statement Regarding Forward-Looking Statements” on page 2935 of this Quarterly Report on Form 10-Q.

Unless otherwise indicated by the context, all references in this Quarterly Report on Form 10-Q to “we,” “us,” “our,” the “Company” or “Prestige” refer to Prestige Consumer Healthcare Inc. and our subsidiaries. Similarly, reference to a year (e.g., 2022) refers to our fiscal year ended March 31 of that year.

General

We are engaged in the development, manufacturing, marketing, sales and distribution of well-recognized, brand name, over-the-counter ("OTC") healthcare products to mass merchandisers, drug, food, dollar, convenience, and club stores and e-commerce channels in North America (the United States and Canada) and in Australia and certain other international markets. We use the strength of our brands, our established retail distribution network, a low-cost operating model and our experienced management team to our competitive advantage.

We have grown our brand portfolio both organically and through acquisitions. We develop our existing brands by investing in new product lines, brand extensions and strong advertising support. Acquisitions of OTC brands have also been an important part of our growth strategy. We have acquired strong and well-recognized brands from consumer products and pharmaceutical companies, as well as private equity firms. While many of these brands have long histories of brand development and investment, we believe that, at the time we acquired them, most were considered “non-core” by their previous owners. As a result, these acquired brands did not benefit from adequate management focus and marketing support during the period prior to their acquisition, which created opportunities for us to reinvigorate these brands and improve their performance post-acquisition. After adding a core brand to our portfolio, we seek to increase its sales, market share and distribution in both existing and new channels through our established retail distribution network. We pursue this growth through increased spending on advertising and marketing support, new sales and marketing strategies, improved packaging and formulations, and innovative development of brand extensions.

Acquisitions

Acquisition of Akorn

On July 1, 2021, we completed the acquisition of the consumer health business assets from Akorn Operating Company LLC ("Akorn") pursuant to an Asset Purchase Agreement, dated May 27, 2021 (the "Purchase Agreement"), for a purchase price of $228.9 million in cash, subject to certain closing adjustments specified in the Purchase Agreement. As a result of the purchase, we acquired TheraTears and certain other over-the-counter consumer brands. The financial results from this acquisition are included in our North American OTC Healthcare segment. The purchase price was funded by a combination of available cash on hand, additional borrowings under our asset-based revolving credit facility entered into on January 31, 2011, as amended (the "2012 ABL Revolver") and the net proceeds from the refinancing of our term loan entered into on January 31, 2012 (the "2012 Term Loan").

-25-


(In thousands)
	July 1, 2021


Inventories	$	6,432


Goodwill	1,758
Intangible assets	228,970

Total assets acquired	237,160

Accounts payable	591
Reserves for sales allowances and cash discounts	2,227
Other accrued liabilities	5,428


Total liabilities assumed	8,246
Total purchase price	$	228,914

We recorded goodwill of $1.8 million based on the amount by which the purchase price exceeded the preliminary estimate of the fair value of the net assets acquired.

Economic Environment Since the Coronavirus Outbreak

~~-21-~~

limitations in employee and other labor resources.The extent to which COVID-19 ~~impacts~~and related economic conditions impact our results and liquidity will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of COVID-19, and the actions to contain COVID-19 or treat its impact, among others. ~~We do not yet know the full extent of its impacts on our business or the global economy. However, these~~These effects could have a material, adverse impact on our business, liquidity, capital resources, and results of operations and those of the third parties on which we rely.

~~-22-~~-26-

Results of Operations

Three Months Ended ~~June~~September 30, 2021 compared to ~~the~~ Three Months Ended ~~June~~September 30, 2020

Total Segment Revenues

The following table represents total revenue by segment, including product groups, for the three months ended ~~June~~September 30, 2021 and 2020.

Three Months Ended June 30,
Increase (Decrease)
(In thousands) 2021 % 2020 % Amount %
North American OTC Healthcare
Analgesics $ 32,821 12.2 $ 27,867 12.1 $ 4,954 17.8
Cough & Cold 14,045 5.2 13,438 5.9 607 4.5
Women's Health 63,248 23.4 65,410 28.5 (2,162) (3.3)
Gastrointestinal 42,366 15.7 30,050 13.1 12,316 41.0
Eye & Ear Care 35,987 13.4 22,852 10.0 13,135 57.5
Dermatologicals 31,150 11.6 27,620 12.0 3,530 12.8
Oral Care 20,967 7.8 22,166 9.7 (1,199) (5.4)
Other OTC 1,809 0.7 1,255 0.5 554 44.1
Total North American OTC Healthcare 242,393 90.0 210,658 91.8 31,735 15.1
International OTC Healthcare
Analgesics 406 0.2 274 0.1 132 48.2
Cough & Cold 4,847 1.8 3,902 1.7 945 24.2
Women's Health 3,944 1.5 2,431 1.1 1,513 62.2
Gastrointestinal 10,204 3.8 5,705 2.5 4,499 78.9
Eye & Ear Care 3,458 1.3 2,545 1.1 913 35.9
Dermatologicals 939 0.3 699 0.3 240 34.3
Oral Care 2,989 1.1 3,179 1.4 (190) (6.0)
Other OTC 1 — 1 — — —
Total International OTC Healthcare 26,788 10.0 18,736 8.2 8,052 43.0
Total Consolidated $ 269,181 100.0 $ 229,394 100.0 $ 39,787 17.3


	Three Months Ended September 30,
							Increase (Decrease)
(In thousands)	2021		%	2020		%	Amount		%
North American OTC Healthcare
Analgesics	$	29,943	10.8	$	30,623	12.9	$	(680)	(2.2)
Cough & Cold	23,022		8.3	14,796		6.2	8,226		55.6
Women's Health	65,020		23.6	61,492		25.9	3,528		5.7
Gastrointestinal	37,964		13.7	31,718		13.4	6,246		19.7
Eye & Ear Care	37,818		13.7	26,767		11.3	11,051		41.3
Dermatologicals	32,365		11.7	27,875		11.7	4,490		16.1
Oral Care	22,893		8.3	21,944		9.2	949		4.3
Other OTC	2,703		1.0	1,360		0.6	1,343		98.8
Total North American OTC Healthcare	251,728		91.1	216,575		91.2	35,153		16.2

International OTC Healthcare
Analgesics	396		0.1	267		0.1	129		48.3
Cough & Cold	5,006		1.9	3,086		1.3	1,920		62.2
Women's Health	3,345		1.2	4,106		1.7	(761)		(18.5)
Gastrointestinal	8,641		3.1	6,379		2.7	2,262		35.5
Eye & Ear Care	2,988		1.1	3,037		1.3	(49)		(1.6)
Dermatologicals	839		0.3	836		0.4	3		0.4
Oral Care	3,278		1.2	3,134		1.3	144		4.6
Other OTC	4		—	2		—	2		100.0
Total International OTC Healthcare	24,497		8.9	20,847		8.8	3,650		17.5



Total Consolidated	$	276,225	100.0	$	237,422	100.0	$	38,803	16.3

Total ~~segment~~ revenues for the three months ended ~~June~~September 30, 2021 were ~~$269.2~~$276.2 million, an increase of ~~$39.8~~$38.8 million, or ~~17.3%~~16.3%, versus the three months ended ~~June~~September 30, 2020.

North American OTC Healthcare Segment

Revenues for the North American OTC Healthcare segment increased ~~$31.7~~$35.2 million, or ~~15.1%~~16.2%, during the three months ended ~~June~~September 30, 2021 versus the three months ended ~~June~~September 30, 2020. The three months ended ~~June~~September 30, 2021 were primarily positively impacted by the Eye & Ear Care, Cough and Cold, and Gastrointestinal categories and certain other categories. The ~~positively impacted~~increase in the Eye & Ear Care category was mainly attributable to the addition of the TheraTears brand, acquired in conjunction with the Akorn acquisition. Certain categories and channels benefited from increased consumer travel as a result of easing COVID-19 ~~restrictions.~~restrictions which were negatively impacted in the prior year.

International OTC Healthcare Segment

Revenues for the International OTC Healthcare segment increased ~~$8.1~~$3.7 million, or ~~43.0%~~17.5%, during the three months ended ~~June~~September 30, 2021 versus the three months ended ~~June~~September 30, 2020. The ~~$8.1~~$3.7 million increase was attributable to increased sales in our Australian subsidiary primarily related to an increase in sales of Hydralyte as a result of easing COVID-19 restrictions.

~~-23-~~-27-

Gross Profit

The following table presents our gross profit and gross profit as a percentage of total segment revenues, by segment for each of the periods presented.

Three Months Ended June 30,
(In thousands) Increase (Decrease)
Gross Profit 2021 % 2020 % Amount %
North American OTC Healthcare $ 142,989 59.0 $ 122,831 58.3 $ 20,158 16.4
International OTC Healthcare 16,023 59.8 11,037 58.9 4,986 45.2
$ 159,012 59.1 $ 133,868 58.4 $ 25,144 18.8


	Three Months Ended September 30,
(In thousands)							Increase (Decrease)
Gross Profit	2021		%	2020		%	Amount		%
North American OTC Healthcare	$	143,105	56.8	$	125,506	58.0	$	17,599	14.0
International OTC Healthcare	14,607		59.6	12,155		58.3	2,452		20.2

	$	157,712	57.1	$	137,661	58.0	$	20,051	14.6

Gross profit for the three months ended ~~June~~September 30, 2021 increased ~~$25.1~~$20.1 million, or ~~18.8%~~14.6%, when compared with the three months ended ~~June~~September 30, 2020. As a percentage of total revenues, gross profit ~~increased~~decreased to ~~59.1%~~57.1% during the three months ended ~~June~~September 30, 2021, from ~~58.4%~~58.0% during the three months ended ~~June~~September 30, 2020. The ~~increase~~decrease in gross profit as a percentage of revenues was primarily a result of ~~product mix.~~increased supply chain costs and charges related to the inventory valuation of the acquired Akorn brands in fiscal 2022 of $1.6 million.

North American OTC Healthcare Segment

Gross profit for the North American OTC Healthcare segment increased ~~$20.2~~$17.6 million, or ~~16.4%~~14.0%, during the three months ended ~~June~~September 30, 2021 versus the three months ended ~~June~~September 30, 2020. As a percentage of North American OTC Healthcare revenues, gross profit ~~increased~~decreased to ~~59.0%~~56.8% during the three months ended ~~June~~September 30, 2021 from ~~58.3%~~58.0% during the three months ended ~~June~~September 30, 2020, primarily due to ~~product mix.~~increased supply chain costs and charges related to the inventory valuation of the acquired Akorn brands in fiscal 2022 of $1.6 million.

International OTC Healthcare Segment

Gross profit for the International OTC Healthcare segment increased ~~$5.0~~$2.5 million, or ~~45.2%~~20.2%, during the three months ended ~~June~~September 30, 2021, versus the three months ended ~~June~~September 30, 2020. As a percentage of International OTC Healthcare revenues, gross profit increased to ~~59.8%~~59.6% during the three months ended ~~June~~September 30, 2021 from ~~58.9%~~58.3% during the three months ended ~~June~~September 30, 2020, primarily due to product mix.

Contribution Margin

Contribution margin is our segment measure of profitability. It is defined as gross profit less advertising and marketing expenses.

The following table presents our contribution margin and contribution margin as a percentage of total segment revenues, by segment for each of the periods presented.

Three Months Ended June 30,
(In thousands) Increase (Decrease)
Contribution Margin 2021 % 2020 % Amount %
North American OTC Healthcare $ 107,759 44.5 $ 98,151 46.6 $ 9,608 9.8
International OTC Healthcare 11,814 44.1 7,967 42.5 3,847 48.3
$ 119,573 44.4 $ 106,118 46.3 $ 13,455 12.7


	Three Months Ended September 30,
(In thousands)							Increase (Decrease)
Contribution Margin	2021		%	2020		%	Amount		%
North American OTC Healthcare	$	106,612	42.4	$	91,492	42.2	$	15,120	16.5
International OTC Healthcare	10,370		42.3	7,828		37.5	2,542		32.5

	$	116,982	42.4	$	99,320	41.8	$	17,662	17.8

North American OTC Healthcare Segment

Contribution margin for the North American OTC Healthcare segment increased $15.1 million, or 16.5%, during the three months ended September 30, 2021 versus the three months ended September 30, 2020. As a percentage of North American OTC Healthcare revenues, contribution margin increased to 42.4% during the three months ended September 30, 2021 from 42.2% during the three months ended September 30, 2020. The contribution margin increase as a percentage of revenues was primarily due to a decrease in the second quarter of fiscal 2022 in advertising and marketing spend as a percentage of revenues, reflecting spend efficiencies and reductions across brands/categories driven by consumer behavior, partly offset by the decrease in gross profit noted above.

International OTC Healthcare Segment

Contribution margin for the International OTC Healthcare segment increased $2.5 million, or 32.5%, during the three months ended September 30, 2021 versus the three months ended September 30, 2020. As a percentage of International OTC

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Healthcare revenues, contribution margin increased to 42.3% during the three months ended September 30, 2021 from 37.5% during the three months ended September 30, 2020. The contribution margin increase as a percentage of revenues was primarily due to the increase in gross profit noted above as well as a decrease in the second quarter of fiscal 2022 advertising and marketing spend as a percentage of revenues.

General and Administrative

General and administrative expenses were $32.3 million for the three months ended September 30, 2021 and $20.4 million for the three months ended September 30, 2020. The increase in general and administrative expenses was primarily due to costs related to the acquisition of Akorn of $5.1 million as well as an increase in compensation costs and professional fees.

Depreciation and Amortization

Depreciation and amortization expenses were $6.2 million for the three months ended September 30, 2021 and $6.0 million for the three months ended September 30, 2020. The increase in depreciation and amortization expenses was attributable to an increase in amortization expense due to the addition of brands purchased in conjunction with the Akorn acquisition, partly offset by certain assets being fully depreciated subsequent to the second quarter of fiscal 2021.

Interest Expense, Net

Interest expense, net was $16.3 million during the three months ended September 30, 2021, versus $21.3 million during the three months ended September 30, 2020. The average indebtedness was $1.6 billion during the three months ended September 30, 2021 and 2020. The average cost of borrowing decreased to 3.9% for the three months ended September 30, 2021 from 5.2% for the three months ended September 30, 2020.

Loss on Extinguishment of Debt

During the three months ended September 30, 2021, we recorded a loss on extinguishment of debt of $2.1 million related to the amendment of our 2012 Term Loan on July 1, 2021.

Income Taxes

The provision for income taxes during the three months ended September 30, 2021 was $14.3 million versus $7.3 million during the three months ended September 30, 2020. The effective tax rate during the three months ended September 30, 2021 was 24.0% versus 14.1% during the three months ended September 30, 2020. The lower effective tax rate in the three months ended September 30, 2020 was primarily due to the final Global Intangible Low-Taxed Income (“GILTI”) regulations issued in July 2020, which resulted in the release of the valuation allowance on foreign tax credit carryforwards.

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Results of Operations

Six Months Ended September 30, 2021 compared to the Six Months Ended September 30, 2020

Total Segment Revenues

The following table represents total revenue by segment, including product groups, for the six months ended September 30, 2021 and 2020.


	Six Months Ended September 30,
							Increase (Decrease)
(In thousands)	2021		%	2020		%	Amount		%
North American OTC Healthcare
Analgesics	$	62,764	11.5	$	58,490	12.5	$	4,274	7.3
Cough & Cold	37,067		6.8	28,234		6.0	8,833		31.3
Women's Health	128,268		23.6	126,902		27.3	1,366		1.1
Gastrointestinal	80,330		14.7	61,768		13.2	18,562		30.1
Eye & Ear Care	73,805		13.5	49,619		10.6	24,186		48.7
Dermatologicals	63,515		11.7	55,495		11.9	8,020		14.5
Oral Care	43,860		8.0	44,110		9.4	(250)		(0.6)
Other OTC	4,512		0.8	2,615		0.6	1,897		72.5
Total North American OTC Healthcare	494,121		90.6	427,233		91.5	66,888		15.7

International OTC Healthcare
Analgesics	802		0.1	541		0.1	261		48.2
Cough & Cold	9,853		1.8	6,988		1.5	2,865		41.0
Women's Health	7,289		1.4	6,537		1.4	752		11.5
Gastrointestinal	18,845		3.5	12,084		2.6	6,761		56.0
Eye & Ear Care	6,446		1.2	5,582		1.2	864		15.5
Dermatologicals	1,778		0.3	1,535		0.3	243		15.8
Oral Care	6,267		1.1	6,313		1.4	(46)		(0.7)
Other OTC	5		—	3		—	2		66.7
Total International OTC Healthcare	51,285		9.4	39,583		8.5	11,702		29.6



Total Consolidated	$	545,406	100.0	$	466,816	100.0	$	78,590	16.8

Total revenues for the six months ended September 30, 2021 were $545.4 million, an increase of $78.6 million, or 16.8%, versus the six months ended September 30, 2020.

North American OTC Healthcare Segment

Revenues for the North American OTC Healthcare segment increased $66.9 million, or 15.7%, during the six months ended September 30, 2021 versus the six months ended September 30, 2020. The six months ended September 30, 2021 were primarily positively impacted by the Eye & Ear Care, Gastrointestinal and Cough & Cold categories and certain other categories. The positively impacted categories benefited from increased consumer travel as a result of easing COVID-19 restrictions as well as the newly acquired TheraTears brand (included in the Eye & Ear Care category) as part of the Akorn acquisition.

International OTC Healthcare Segment

Revenues for the International OTC Healthcare segment increased $11.7 million, or 29.6%, during the six months ended September 30, 2021 versus the six months ended September 30, 2020. The $11.7 million increase was attributable to increased sales in our Australian subsidiary primarily related to an increase in sales of Hydralyte as a result of easing COVID-19 restrictions.

-30-

Gross Profit

The following table presents our gross profit and gross profit as a percentage of total segment revenues, by segment for each of the periods presented.


	Six Months Ended September 30,
(In thousands)							Increase (Decrease)
Gross Profit	2021		%	2020		%	Amount		%
North American OTC Healthcare	$	286,094	57.9	$	248,337	58.1	$	37,757	15.2
International OTC Healthcare	30,630		59.7	23,192		58.6	7,438		32.1

	$	316,724	58.1	$	271,529	58.2	$	45,195	16.6

Gross profit for the six months ended September 30, 2021 increased $45.2 million, or 16.6%, when compared with the six months ended September 30, 2020. As a percentage of total revenues, gross profit decreased to 58.1% during the six months ended September 30, 2021, from 58.2% during the six months ended September 30, 2020, primarily due to charges related to the inventory valuation of the acquired Akorn brands in fiscal 2022 of $1.6 million.

North American OTC Healthcare Segment

Gross profit for the North American OTC Healthcare segment increased $37.8 million, or 15.2%, during the six months ended September 30, 2021 versus the six months ended September 30, 2020. As a percentage of North American OTC Healthcare revenues, gross profit decreased to 57.9% during the six months ended September 30, 2021 from 58.1% during the six months ended September 30, 2020 primarily due to charges related to the inventory valuation of the acquired Akorn brands in fiscal 2022 of $1.6 million.

International OTC Healthcare Segment

Gross profit for the International OTC Healthcare segment increased $7.4 million, or 32.1%, during the six months ended September 30, 2021 versus the six months ended September 30, 2020. As a percentage of International OTC Healthcare revenues, gross profit increased to 59.7% during the six months ended September 30, 2021 from 58.6% during the six months ended September 30, 2020, primarily due to product mix.

Contribution Margin

Contribution margin is our segment measure of profitability. It is defined as gross profit less advertising and marketing expenses.

The following table presents our contribution margin and contribution margin as a percentage of total segment revenues, by segment for each of the periods presented.


	Six Months Ended September 30,
(In thousands)							Increase (Decrease)
Contribution Margin	2021		%	2020		%	Amount		%
North American OTC Healthcare	$	214,371	43.4	$	189,643	44.4	$	24,728	13.0
International OTC Healthcare	22,184		43.3	15,795		39.9	6,389		40.4

	$	236,555	43.4	$	205,438	44.0	$	31,117	15.1

North American OTC Healthcare Segment

Contribution margin for the North American OTC Healthcare segment increased ~~$9.6~~$24.7 million, or ~~9.8%~~13.0%, during the ~~three~~six months ended ~~June~~September 30, 2021 versus the ~~three~~six months ended ~~June~~September 30, 2020. As a percentage of North American OTC Healthcare revenues, contribution margin decreased to ~~44.5%~~43.4% during the ~~three~~six months ended ~~June~~September 30, 2021 from ~~46.6%~~44.4% during the ~~three~~six months ended ~~June~~September 30, 2020. The contribution margin decrease as a percentage of revenues was primarily due to an increase in advertising and marketing expenses ~~partly offset by~~as well as the ~~increase~~decrease in gross profit margin noted above.

International OTC Healthcare Segment

Contribution margin for the International OTC Healthcare segment increased ~~$3.8~~$6.4 million, or ~~48.3%~~40.4%, during the ~~three~~six months ended ~~June~~September 30, 2021 versus the ~~three~~six months ended ~~June~~September 30, 2020. As a percentage of International OTC Healthcare revenues, contribution margin increased to ~~44.1%~~43.3% during the ~~three~~six months ended ~~June~~September 30, 2021 from ~~42.5%~~39.9% during the ~~three~~six months ended ~~June~~September 30, 2020. The contribution margin increase as a percentage of revenues was primarily due to the increase in gross profit noted ~~above.~~above as well as a decrease in advertising and marketing expenses as a percentage of revenues.

~~-24-~~-31-

General and Administrative

General and administrative expenses were ~~$22.5~~$54.7 million for the ~~three~~six months ended ~~June~~September 30, 2021 and ~~$19.9~~$40.3 million for the ~~three~~six months ended ~~June~~September 30, 2020. The increase in general and administrative expenses was primarily due to costs related to the acquisition of Akorn of $5.1 million as well as an increase in compensation ~~costs.~~costs and professional fees.

Depreciation and Amortization

Depreciation and amortization expenses were ~~$5.8~~$11.9 million for the ~~three~~six months ended ~~June~~September 30, 2021 and ~~$6.1~~$12.1 million for the ~~three~~six months ended ~~June~~September 30, 2020. The decrease in depreciation and amortization expenses was ~~primarily~~ due to certain assets being fully depreciated subsequent to the ~~first~~second quarter of fiscal ~~2021.~~2021, partly offset by an increase in amortization expense due to the addition of brands purchased in conjunction with the Akorn acquisition.

Interest Expense, Net

Interest expense, net was ~~$15.1~~$31.4 million during the ~~three~~six months ended ~~June~~September 30, 2021 versus ~~$21.9~~$43.2 million during the ~~three~~six months ended ~~June~~September 30, 2020. The average indebtedness decreased to ~~$1.5~~$1.6 billion during the ~~three~~six months ended ~~June~~September 30, 2021 from $1.7 billion during the ~~three~~six months ended ~~June~~September 30, 2020. The average cost of borrowing decreased to 4.0% for the ~~three~~six months ended ~~June~~September 30, 2021 from 5.1% for the ~~three~~six months ended ~~June~~September 30, 2020.

Loss on Extinguishment of Debt

During the six months ended September 30, 2021, we recorded a loss on extinguishment of debt of $2.1 million related to the amendment of our 2012 Term Loan on July 1, 2021.

Income Taxes

The provision for income taxes during the ~~three~~six months ended ~~June~~September 30, 2021 was ~~$18.6~~$32.9 million versus ~~$14.5~~$21.8 million during the ~~three~~six months ended ~~June~~September 30, 2020. The effective tax rate during the ~~three~~six months ended ~~June~~September 30, 2021 was ~~24.4%~~24.2% versus ~~24.9%~~19.8% during the ~~three~~six months ended ~~June~~September 30, 2020. The ~~decrease in the~~lower effective tax rate ~~for~~in the ~~three~~six months ended ~~June~~September 30, ~~2021~~2020 was ~~based~~primarily due to the final GILTI regulations issued in July 2020, which resulted in the release of the valuation allowance on ~~our estimated annual effective income~~foreign tax ~~rate, which fluctuates based on the mix of earnings from our U.S. and foreign jurisdictions, and discrete items pertaining to share-based compensation.~~credit carryforwards.

Liquidity and Capital Resources

Liquidity

Our primary source of cash comes from our cash flow from operations. In the past, we have supplemented this source of cash with various debt facilities, primarily in connection with acquisitions. We have financed our operations, and expect to continue to finance our operations for the next twelve months and the foreseeable future, with a combination of funds generated from operations and borrowings. Our principal uses of cash are for operating expenses, debt service, share repurchases, capital expenditures, and acquisitions. Based on our current levels of operations and anticipated growth, excluding acquisitions, we believe that our cash generated from operations and our existing credit facilities will be adequate to finance our working capital and capital expenditures through the next twelve months. See "Coronavirus Outbreak" above.

As of ~~June~~September 30, 2021, we had cash and cash equivalents of ~~$163.6~~$42.8 million, an increase of ~~$131.3~~$10.5 million from March 31, 2021. The following table summarizes the change:


		Three Months Ended June 30,							Six Months Ended September 30,
(In thousands)	(In thousands)	2021		2020		$ Change		(In thousands)	2021		2020		$ Change
Cash provided by (used in):	Cash provided by (used in):							Cash provided by (used in):
Operating Activities	Operating Activities	$	69,305	$	75,154	$	(5,849)	Operating Activities	$	130,499	$	127,293	$	3,206
Investing Activities	Investing Activities	(1,323)		(2,553)		1,230		Investing Activities	(232,989)		(11,619)		(221,370)
Financing Activities	Financing Activities	63,650		(111,362)		175,012		Financing Activities	114,184		(186,666)		300,850
Effects of exchange rate changes on cash and cash equivalents	Effects of exchange rate changes on cash and cash equivalents	(310)		1,942		(2,252)		Effects of exchange rate changes on cash and cash equivalents	(1,178)		2,835		(4,013)
Net change in cash and cash equivalents	Net change in cash and cash equivalents	$	131,322	$	(36,819)	$	168,141	Net change in cash and cash equivalents	$	10,516	$	(68,157)	$	78,673

Operating Activities

Net cash provided by operating activities was ~~$69.3~~$130.5 million for the ~~three~~six months ended ~~June~~September 30, 2021, compared to ~~$75.2~~$127.3 million for the ~~three~~six months ended ~~June~~September 30, 2020. The ~~$5.8~~$3.2 million ~~decrease~~increase was due to ~~increased working capital, partly offset by~~ an increase in net income after non-cash ~~items.~~items, partly offset by increased working capital.

-32-

Investing Activities

Net cash used in investing activities was ~~$1.3~~$233.0 million for the ~~three~~six months ended ~~June~~September 30, 2021, compared to ~~$2.6~~$11.6 million for the ~~three~~six months ended ~~June~~September 30, 2020. The ~~decrease~~increase was primarily due to the purchase of Akorn in the current period of $228.9 million, partly offset by a decrease in capital expenditures in the current period.

~~-25-~~

Financing Activities

Net cash provided by financing activities was ~~$63.7~~$114.2 million for the ~~three~~six months ended ~~June~~September 30, 2021, compared to net cash used of ~~$111.4~~$186.7 million for the ~~three~~six months ended ~~June~~September 30, 2020. This change was primarily due to ~~reduced repayments~~the proceeds from the refinancing of ~~debt~~our 2012 Term Loan of ~~$91.0~~$597.0 million (see Capital Resources below) and increased borrowings of $85.0 million under our 2012 ABL Revolver, partly offset by increased repayments of $365.0 million on our 2012 Term Loan and $10.0 million on our 2012 ABL Revolver, as well as the payment of debt costs of $6.1 million in the ~~three months ended June 30, 2021. The Company borrowed $85.0 million under its revolving credit agreement in June 2021 in anticipation~~current period related to the refinancing of ~~the acquisition completed on July 1, 2021; see Capital Resources below.~~our 2012 Term Loan.

Capital Resources

As of ~~June~~September 30, 2021, we had an aggregate of $1.6 billion of outstanding indebtedness, which consisted of the following:

•$400.0 million of 5.125% 2019 Senior Notes, which mature on January 15, 2028;

•$600.0 million of 3.750% 2021 Senior Notes, which mature on April 1, 2031;

•$~~475.0~~600.0 million of borrowings under the 2012 Term B-5 Loans due ~~January 26, 2024;~~July 1, 2028; and

•$~~85.0~~20.0 million of borrowings under the 2012 ABL Revolver due December 11, 2024.

As of ~~June~~September 30, 2021, we had ~~$85.0~~$20.0 million outstanding on our 2012 ABL Revolver and a borrowing capacity of ~~$57.1~~$104.6 million.

During the years ended March 31, 2021 and 2020, under the 2012 Term Loan, we made voluntary principal payments against outstanding indebtedness of $195.0 million and $48.0 million, respectively. During the three months ended June 30, 2021, we made voluntary principal payments against outstanding indebtedness of $20.0 million under the 2012 Term Loan. Under the 2012 Term Loan (as amended), we are required to make quarterly payments each equal to 0.25% of the aggregate principal amount, which, as of June 30, 2021, was $475.0 million. Since we have made optional payments this year and in prior years that exceed a significant portion of our required quarterly payments, we will not be required to make another payment on the 2012 Term Loan until maturity on January 26, 2024. See ~~Term Loan Refinancing~~ ~~below.~~

~~Acquisition~~

On July 1, 2021, we completed the acquisition of the Consumer Health business assets from Akorn Operating Company LLC pursuant to an Asset Purchase Agreement (the "Purchase Agreement"), for a purchase price of $230.0 million in cash, subject to certain closing adjustments specified in the Purchase Agreement. As a result of the purchase, we acquired ~~TheraTears~~ and certain other over-the-counter consumer brands. The purchase price was funded by a combination of available cash on hand, additional borrowings under our 2012 ABL Revolver and the net proceeds from the refinancing of our term loan entered into on January 31, 2012 (the "2012 Term Loan") (see below).

Term Loan Refinancing

On July 1, 2021, we entered into Amendment No. 6 ("Term Loan Amendment No. 6") to the 2012 Term Loan. Term Loan Amendment No. 6 provides for (i) the refinancing of our outstanding term loans and the creation of a new class of Term B-5 Loans under the credit agreement governing the 2012 Term Loan in an aggregate principal amount of $600.0 million, (ii) increased flexibility under the credit agreement and (iii) an interest rate on the Term B-5 Loans that is based, at the Borrower's option, on a LIBOR rate plus a margin of 2.00% per annum, with a LIBOR floor of 0.50%, or an alternative base rate plus a margin of 1.00% per annum. In addition, Term Loan Amendment No. 6 provides for an extension of the maturity date to July 1, 2028. Under ~~the~~ Term Loan Amendment No. 6, we are required to make quarterly payments each equal to 0.25% of the aggregate principal amount.

~~-26-~~

Maturities:


(In thousands)	(In thousands)			(In thousands)
Year Ending March 31,	Year Ending March 31,	Amount		Year Ending March 31,	Amount
2022 (remaining nine months ending March 31, 2022)		$	—
2022 (remaining six months ending March 31, 2022)				2022 (remaining six months ending March 31, 2022)	$	3,000
2023	2023	—		2023	6,000
2024	2024	475,000		2024	6,000
2025	2025	85,000		2025	26,000
2026	2026	—		2026	6,000
Thereafter	Thereafter	1,000,000		Thereafter	1,573,000
		$	1,560,000		$	1,620,000

Covenants:

Our debt facilities contain various financial covenants, including provisions that require us to maintain certain leverage, interest coverage and fixed charge ratios. The credit agreement governing the 2012 Term Loan and the 2012 ABL Revolver and the indentures governing the 2021 Senior Notes and 2019 Senior Notes contain provisions that accelerate our indebtedness on certain changes in control and restrict us from undertaking specified corporate actions, including asset dispositions, acquisitions, payments of dividends and other specified payments, repurchasing our equity securities in the public markets, incurrence of indebtedness, creation of liens, making loans and investments and transactions with affiliates. Specifically, we must:

-33-

•Have a leverage ratio of less than 6.50 to 1.0 for the quarter ended ~~June~~September 30, 2021 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 ~~June~~September 30, 2021 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 ~~June~~September 30, 2021 (defined as, with certain adjustments, the ratio of our consolidated EBITDA minus capital expenditures to our trailing twelve month consolidated interest paid, taxes paid and other specified payments). Our fixed charge requirement remains level throughout the term of the debt facilities.

At ~~June~~September 30, 2021, we were in compliance with the applicable financial and restrictive covenants under the 2012 Term Loan and the 2012 ABL Revolver and the indentures governing the 2021 Senior Notes and the 2019 Senior Notes. Additionally, management anticipates that in the normal course of operations, we will be in compliance with the financial and restrictive covenants during the next twelve months.

Interest Rate Swaps:

We have one interest rate swap to hedge a total of $200.0 million of our variable interest debt.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements or financing activities with special-purpose entities.

Critical Accounting Policies and Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Although these estimates are based on our knowledge of current events and actions that we may undertake in the future, actual results could differ from those estimates. A summary of our critical accounting policies is presented in our Annual Report on Form 10-K for the fiscal year ended March 31, 2021. There were no material changes to our critical accounting policies during the ~~three~~six months ended ~~June~~September 30, 2021.

Recent Accounting Pronouncements

~~-27-~~

A description of recently issued and recently adopted accounting pronouncements is included in the notes to the unaudited Condensed Consolidated Financial Statements in Part I, Item I, Note 1 of this Quarterly Report on Form 10-Q.

~~-28-~~-34-

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (the “PSLRA”), including, without limitation, information within Management's Discussion and Analysis of Financial Condition and Results of Operations. The following cautionary statements are being made pursuant to the provisions of the PSLRA and with the intention of obtaining the benefits of the “safe harbor” provisions of the PSLRA.

Forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q. Except as required under federal securities laws and the rules and regulations of the SEC, we do not intend to update any forward-looking statements to reflect events or circumstances arising after the date of this Quarterly Report on Form 10-Q, whether as a result of new information, future events or otherwise. As a result of these risks and uncertainties, readers are cautioned not to place undue reliance on forward-looking statements included in this Quarterly Report on Form 10-Q or that may be made elsewhere from time to time by, or on behalf of, us. All forward-looking statements attributable to us are expressly qualified by these cautionary statements.

These forward-looking statements generally can be identified by the use of words or phrases such as “believe,” “anticipate,” “expect,” “estimate,” “project,” "intend," "strategy," "goal," "future," "seek," "may," "should," "would," "will," or other similar words and phrases. Forward-looking statements are based on current expectations and assumptions that are subject to a number of risks and uncertainties that could cause actual results to differ materially from those anticipated, including, without limitation:

•The impact of the COVID-19 pandemic or other disease outbreaks on global economic conditions, consumer demand, retailer product availability, and business operations including manufacturing, supply chain and distribution;

•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 marketing 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;

•Changes by retailers in inventory management practices, delivery requirements, and demands for marketing and promotional spending in order to retain or increase shelf space or online share;

•Our inability to grow our international sales;

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

•Financial factors, such as increases in interest rates and currency exchange rate fluctuations;

•Changing consumer trends, additional store brand or branded competition, accelerating shifts to online shopping or pricing pressures;

•Our dependence on third-party manufacturers to produce many of the products we sell and our ability to transfer production to our own facilities or other third-party suppliers;

•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;

•Shortages of supply of sourced goods;

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

•Acquisitions, dispositions or other strategic transactions diverting managerial resources, and creating additional liabilities;

•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 information technology systems from threats or disruptions;

•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 and/or changes in the discount rate used to value our brands;

•Our dependence on key personnel;

•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 or to obtain additional financing;

~~-29-~~-35-

•The restrictions imposed by our financing agreements on our operations; and

•Changes in federal, state and other geographic tax laws.

For more information, see Part I, Item 1A. "Risk Factors" in our Annual Report on Form 10-K for the fiscal year ended March 31, 2021.

~~-30-~~-36-

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rate Risk

We are exposed to changes in interest rates because our 2012 Term Loan and 2012 ABL Revolver are variable rate debt. To manage this risk, we use an interest rate swap to hedge a total of~~$200.0~~ $200.0 million of this variable rate debt. At ~~June~~September 30, 2021, approximately ~~$360.0~~$420.0 million of our debt carries a variable rate of interest.

Holding other variables constant, including levels of indebtedness, a 1.0% increase in interest rates on our variable rate debt would have an adverse impact on pre-tax earnings and cash flows for the three and six months ended ~~June~~September 30, 2021 of approximately ~~$0.7 million.~~$1.1 million and $1.8 million, respectively.

Foreign Currency Exchange Rate Risk

During the three and six months ended ~~June~~September 30, 2021, approximately 11.8% and 12.1%, respectively, of our gross revenues were denominated in currencies other than the U.S. Dollar. During the three and six months ended September 30, 2020, approximately ~~12.4%~~11.3% and ~~10.0%~~10.7%, respectively, of our gross revenues were denominated in currencies other than the U.S. Dollar. As such, we are exposed to transactions that are sensitive to foreign currency exchange rates. These transactions are primarily with respect to the Canadian and Australian Dollars.

We performed a sensitivity analysis with respect to exchange rates for the three and six months ended ~~June~~September 30, 2021 and 2020. Holding all other variables constant, and assuming a hypothetical 10.0% adverse change in foreign currency exchange rates, this analysis resulted in a less than 5.0% impact on pre-tax income of approximately ~~$1.6~~$1.8 million for the three months ended ~~June~~September 30, 2021 and approximately $3.4 million for the six months ended September 30, 2021. It represented a less than 5% impact on pre-tax income of approximately $1.0 million for the three months ended ~~June~~September 30, 2020 and approximately $2.0 million for the six months ended September 30, 2020.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

The Company's management, with the participation of its Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the Company's disclosure controls and procedures, as defined in Rule 13a–15(e) of the Securities Exchange Act of 1934 (the “Exchange Act”), as of ~~June~~September 30, 2021. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, as of ~~June~~September 30, 2021, the Company's disclosure controls and procedures were effective to ensure that information required to be disclosed by the Company in the reports the Company files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms and that such information is accumulated and communicated to the Company's management, including the Company's Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

There was no change in our internal control over financial reporting that occurred during the quarter ended ~~June~~September 30, 2021 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

~~-31-~~-37-

PART II. OTHER INFORMATION

ITEM 1A. RISK FACTORS

You should carefully consider the risk factors discussed in Part I, Item 1A. "Risk Factors" in our Annual Report on Form 10-K for the year ended March 31, 2021, which could materially affect our business, financial condition or results of operations. The risk factors described in our Annual Report on Form 10-K have not materially changed in the period covered by this Quarterly Report on Form 10-Q, but such risks are not the only risks facing us. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and results of operations.

Our quarterly operating results and revenues may fluctuate as a result of any of these or other factors. Accordingly, results for any one quarter are not necessarily indicative of results to be expected for any other quarter or for any year, and revenues for any particular future period may decrease. In the future, operating results may fall below the expectations of securities analysts and investors. In that event, the market price of our outstanding securities could be adversely impacted.

~~ITEM 2. ISSUER PURCHASES OF EQUITY SECURITIES~~

Period Total Number of Shares Purchased (a) Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs
April 1 to April 30, 2021 — $ — — $ —
May 1 to May 31, 2021 63,314 $ 46.04 — $ —
June 1 to June 30, 2021 — $ — — $ —
Total 63,314 —

(a) These repurchases were made pursuant to our 2005 Long-Term Equity Incentive Plan, which allows for the indirect purchase of shares through a net-settlement feature upon the vesting of shares in order to satisfy minimum statutory tax-withholding requirements.

~~ITEM 5. OTHER INFORMATION~~

~~Submission of Matters to a Vote of Security Holders.~~

~~The 2021 Annual Meeting of Stockholders of the Company was held on August 3, 2021. The stockholders of the Company voted upon three proposals at the Annual Meeting, with the following results:~~

~~Item 1 – Election of seven directors nominated by the Board of Directors to serve until the 2022 Annual Meeting of Stockholders.~~

Director Nominee For Withheld Broker Non-Votes
Ronald M. Lombardi 45,636,393 1,647,650 523,795
John E. Byom 45,785,876 1,497,978 523,984
Celeste A. Clark 46,788,211 495,643 523,984
Christopher J. Coughlin 46,409,825 874,029 523,984
Sheila A. Hopkins 46,410,634 873,220 523,984
Natale S. Ricciardi 46,409,937 873,917 523,984
Dawn M. Zier 42,904,140 4,379,714 523,984

~~-32-~~

~~Item 2 – Ratification of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for the fiscal year ending March 31, 2022.~~

For Against Abstentions
46,618,697 1,180,446 8,695

~~Item 3 – Non-binding resolution to approve the compensation of the Company’s named executive officers as disclosed in the Company’s proxy statement.~~

For Against Abstentions Broker Non-Votes
46,498,416 728,489 56,948 523,985

~~-33-~~-38-

ITEM 6. EXHIBITS



3.1						Amended and Restated Certificate of Incorporation of Prestige Consumer Healthcare Inc. (filed as Exhibit 3.1 to the Company's Form S-1/A filed with the SEC on February 8, 2005).*

3.1.1						Amendment to Amended and Restated Certificate of Incorporation of Prestige Consumer Healthcare Inc. (filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on August 2, 2018).*

3.2						Amended and Restated Bylaws of Prestige Consumer Healthcare Inc., as amended, effective October 29, 2018 (filed as Exhibit 3.2 to the Company's Quarterly Report on Form 10-Q filed with the SEC on February 7, 2019).*

~~2.1~~						~~Asset Purchase Agreement, dated~~ M ~~ay 27, 2021, by and between Medtech Products Inc. and Akorn Operating Company.~~ †

10.1						Amendment No. 6 to the Term Loan Credit Agreement, dated as of July 1, 2021, among Prestige Consumer Healthcare Inc., Prestige Brands, Inc., the other guarantors from time to time party thereto, each lender from time to time party thereto and Barclays Bank PLC (as successor in interest to Citibank, N.A.), as administrative agent (filed as Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the SEC on July 1, 2021). *

31.1						Certification of Principal Executive Officer of Prestige Consumer Healthcare Inc. pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934.

31.2						Certification of Principal Financial Officer of Prestige Consumer Healthcare Inc. pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934.

32.1						Certification of Principal Executive Officer of Prestige Consumer Healthcare Inc. pursuant to Rule 13a-14(b) and Section 1350 of Chapter 63 of Title 18 of the United States Code.

32.2						Certification of Principal Financial Officer of Prestige Consumer Healthcare Inc. pursuant to Rule 13a-14(b) and Section 1350 of Chapter 63 of Title 18 of the United States Code.

*						Incorporated herein by reference.
†						Certain portions of this exhibit have been omitted pursuant to Item 601(b)(2) of Regulation S-K.

101.INS						XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL 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

~~-34-~~-39-

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

PRESTIGE CONSUMER HEALTHCARE INC.

Date:

~~August 5,~~November 4, 2021

By:

/s/ Christine Sacco

Christine Sacco

Chief Financial Officer

(Principal Financial Officer and Duly Authorized Officer)

~~-35-~~-40-


Period	Total Number of Shares Purchased (a)	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs
April 1 to April 30, 2021	—	$	—	—	$	—
May 1 to May 31, 2021	63,314	$	46.04	—	$	—
June 1 to June 30, 2021	—	$	—	—	$	—
Total	63,314			—


Director Nominee	For	Withheld	Broker Non-Votes
Ronald M. Lombardi	45,636,393	1,647,650	523,795
John E. Byom	45,785,876	1,497,978	523,984
Celeste A. Clark	46,788,211	495,643	523,984
Christopher J. Coughlin	46,409,825	874,029	523,984
Sheila A. Hopkins	46,410,634	873,220	523,984
Natale S. Ricciardi	46,409,937	873,917	523,984
Dawn M. Zier	42,904,140	4,379,714	523,984


For	Against	Abstentions	Broker Non-Votes
46,498,416	728,489	56,948	523,985