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OFFON

PRESTIGE CONSUMER HEALTHCARE INC.

(PBH)
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PRESTIGE CONSUMER HEALTHCARE : MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (form 10-Q)

08/05/2021 | 06:21am EDT
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 29 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.

Coronavirus Outbreak
In January 2020, the World Health Organization ("WHO") announced a global health
crisis due to a new strain of coronavirus ("COVID-19"). In March 2020, the WHO
classified the COVID-19 outbreak as a pandemic. This 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 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 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. To date, the pandemic has not had a material negative impact on our
operations, 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 in this dynamic, unprecedented
environment. If the outbreak continues to spread, 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
                                      -21-
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limitations in employee resources. The extent to which COVID-19 impacts 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 effects could have
a material, adverse impact on our liquidity, capital resources, and results of
operations and those of the third parties on which we rely.


                                      -22-
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Results of Operations

Three Months Ended June 30, 2021 compared to the Three Months Ended June 30,
2020
Total Segment Revenues

The following table represents total revenue by segment, including product groups, for the three months ended June 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


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


North American OTC Healthcare Segment
Revenues for the North American OTC Healthcare segment increased $31.7 million,
or 15.1%, during the three months ended June 30, 2021 versus the three months
ended June 30, 2020. The three months ended June 30, 2021 were primarily
positively impacted by the Eye & Ear Care and Gastrointestinal categories and
certain other categories. The positively impacted categories benefited from
increased consumer travel as a result of easing COVID-19 restrictions.

International OTC Healthcare Segment
Revenues for the International OTC Healthcare segment increased $8.1 million, or
43.0%, during the three months ended June 30, 2021 versus the three months ended
June 30, 2020. The $8.1 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-
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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



Gross profit for the three months ended June 30, 2021 increased $25.1 million,
or 18.8%, when compared with the three months ended June 30, 2020. As a
percentage of total revenues, gross profit increased to 59.1% during the three
months ended June 30, 2021, from 58.4% during the three months ended June 30,
2020. The increase in gross profit as a percentage of revenues was primarily a
result of product mix.
North American OTC Healthcare Segment
Gross profit for the North American OTC Healthcare segment increased $20.2
million, or 16.4%, during the three months ended June 30, 2021, versus the three
months ended June 30, 2020. As a percentage of North American OTC Healthcare
revenues, gross profit increased to 59.0% during the three months ended June 30,
2021 from 58.3% during the three months ended June 30, 2020, primarily due to
product mix.

International OTC Healthcare Segment
Gross profit for the International OTC Healthcare segment increased $5.0
million, or 45.2%, during the three months ended June 30, 2021, versus the three
months ended June 30, 2020. As a percentage of International OTC Healthcare
revenues, gross profit increased to 59.8% during the three months ended June 30,
2021 from 58.9% during the three months ended June 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



North American OTC Healthcare Segment
Contribution margin for the North American OTC Healthcare segment increased $9.6
million, or 9.8%, during the three months ended June 30, 2021 versus the three
months ended June 30, 2020. As a percentage of North American OTC Healthcare
revenues, contribution margin decreased to 44.5% during the three months ended
June 30, 2021 from 46.6% during the three months ended June 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 the increase in
gross profit noted above.

International OTC Healthcare Segment
Contribution margin for the International OTC Healthcare segment increased $3.8
million, or 48.3%, during the three months ended June 30, 2021 versus the three
months ended June 30, 2020. As a percentage of International OTC Healthcare
revenues, contribution margin increased to 44.1% during the three months ended
June 30, 2021 from 42.5% during the three months ended June 30, 2020. The
contribution margin increase as a percentage of revenues was primarily due to
the increase in gross profit noted above.
                                      -24-
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General and Administrative
General and administrative expenses were $22.5 million for the three months
ended June 30, 2021 and $19.9 million for the three months ended June 30, 2020.
The increase in general and administrative expenses was primarily due to an
increase in compensation costs.

Depreciation and Amortization
Depreciation and amortization expenses were $5.8 million for the three months
ended June 30, 2021 and $6.1 million for the three months ended June 30, 2020.
The decrease in depreciation and amortization expenses was primarily due to
certain assets being fully depreciated subsequent to the first quarter of fiscal
2021.

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

Income Taxes
The provision for income taxes during the three months ended June 30, 2021 was
$18.6 million versus $14.5 million during the three months ended June 30,
2020. The effective tax rate during the three months ended June 30, 2021 was
24.4% versus 24.9% during the three months ended June 30, 2020. The decrease in
the effective tax rate for the three months ended June 30, 2021 was based on our
estimated annual effective income 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.

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 30, 2021, we had cash and cash equivalents of $163.6 million, an
increase of $131.3 million from March 31, 2021. The following table summarizes
the change:
                                                                       Three Months Ended June 30,
(In thousands)                                                  2021               2020             $ Change
Cash provided by (used in):
Operating Activities                                        $  69,305$  75,154$  (5,849)
Investing Activities                                           (1,323)            (2,553)             1,230
Financing Activities                                           63,650           (111,362)           175,012
Effects of exchange rate changes on cash and cash
equivalents                                                      (310)             1,942             (2,252)
Net change in cash and cash equivalents                     $ 131,322

$ (36,819)$ 168,141




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

Investing Activities
Net cash used in investing activities was $1.3 million for the three months
ended June 30, 2021, compared to $2.6 million for the three months ended
June 30, 2020. The decrease was due to a decrease in capital expenditures in the
current period.

                                      -25-
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Financing Activities
Net cash provided by financing activities was $63.7 million for the three months
ended June 30, 2021, compared to net cash used of $111.4 million for the three
months ended June 30, 2020. This change was primarily due to reduced repayments
of debt of $91.0 million and increased borrowings of $85.0 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 of the acquisition
completed on July 1, 2021; see Capital Resources below.

Capital Resources

As of June 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 million of borrowings under the 2012 Term B-5 Loans due January 26,
2024; and
•$85.0 million of borrowings under the 2012 ABL Revolver due December 11, 2024.

As of June 30, 2021, we had $85.0 million outstanding on 2012 ABL Revolver and a borrowing capacity of $57.1 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).

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.

                                      -26-
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Maturities:

(In thousands)
Year Ending March 31,                                        Amount
2022 (remaining nine months ending March 31, 2022)        $         -
2023                                                                -
2024                                                          475,000
2025                                                           85,000
2026                                                                -
Thereafter                                                  1,000,000
                                                          $ 1,560,000



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:

•Have a leverage ratio of less than 6.50 to 1.0 for the quarter ended June 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 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 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 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 months ended June 30, 2021.

Recent Accounting Pronouncements

                                      -27-
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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-
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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-
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•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-

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