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 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, 2021, there were 50,059,989 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 months ended June 30, 2021 and 2020 (unaudited)	2
	Condensed Consolidated Balance Sheets as of June 30, 2021 and March 31, 2021 (unaudited)	3
	Condensed Consolidated Statements of Changes in Stockholders' Equity for the three months ended June 30, 2021 and 2020 (unaudited)	4
	Condensed Consolidated Statements of Cash Flows for the three months ended June 30, 2021 and 2020 (unaudited)	5
	Notes to Condensed Consolidated Financial Statements (unaudited)	6
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	21
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	31
Item 4.	Controls and Procedures	31
PART II.	OTHER INFORMATION
Item 1A.	Risk Factors	32
Item 2.	Issuer Purchases of Equity Securities	32
Item 5.	Other Information	32
Item 6.	Exhibits	34
	Signatures	35

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.

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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,
(In thousands, except per share data)	2021		2020
Revenues
Net sales	$	269,172	$	229,384
Other revenues	9		10
Total revenues	269,181		229,394
Cost of Sales
Cost of sales excluding depreciation	108,335		94,124
Cost of sales depreciation	1,834		1,402
Cost of sales	110,169		95,526
Gross profit	159,012		133,868
Operating Expenses
Advertising and marketing	39,439		27,750
General and administrative	22,471		19,934
Depreciation and amortization	5,760		6,065
Total operating expenses	67,670		53,749
Operating income	91,342		80,119
Other (income) expense
Interest expense, net	15,077		21,941
Other (income) expense, net	(105)		10
Total other expense, net	14,972		21,951
Income before income taxes	76,370		58,168
Provision for income taxes	18,615		14,462
Net income	$	57,755	$	43,706
Earnings per share:
Basic	$	1.15	$	0.87
Diluted	$	1.14	$	0.86
Weighted average shares outstanding:
Basic	50,139		50,264
Diluted	50,671		50,808
Comprehensive income (loss), net of tax:
Currency translation adjustments	(1,492)		10,590
Unrealized gain on interest rate swaps	520		309
Total other comprehensive (loss) income	(972)		10,899
Comprehensive income	$	56,783	$	54,605

See accompanying notes.

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Prestige Consumer Healthcare Inc.

Condensed Consolidated Balance Sheets

(Unaudited)

(In thousands)	June 30, 2021		March 31, 2021
Assets
Current assets
Cash and cash equivalents	$	163,624	$	32,302
Accounts receivable, net of allowance of $14,659 and $16,457, respectively	130,346		114,671
Inventories	105,546		114,959
Prepaid expenses and other current assets	9,008		7,903
Total current assets	408,524		269,835
Property, plant and equipment, net	69,825		70,059
Operating lease right-of-use assets	22,345		23,722
Finance lease right-of-use assets, net	8,344		8,986
Goodwill	577,840		578,079
Intangible assets, net	2,469,714		2,475,729
Other long-term assets	2,522		2,863
Total Assets	$	3,559,114	$	3,429,273
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable	$	30,963	$	45,978
Accrued interest payable	17,067		6,312
Operating lease liabilities, current portion	5,974		5,858
Finance lease liabilities, current portion	2,607		2,588
Other accrued liabilities	68,435		61,402
Total current liabilities	125,046		122,138
Long-term debt, net	1,545,352		1,479,653
Deferred income tax liabilities	439,428		434,050
Long-term operating lease liabilities, net of current portion	18,329		19,706
Long-term finance lease liabilities, net of current portion	6,157		6,816
Other long-term liabilities	8,555		8,612
Total Liabilities	2,142,867		2,070,975
Commitments and Contingencies — Note 16
Stockholders' Equity
Preferred stock - $0.01 par value
Authorized - 5,000 shares
Issued and outstanding - None	—		—
Common stock - $0.01 par value
Authorized - 250,000 shares
Issued - 54,211 shares at June 30, 2021 and 53,999 shares at March 31, 2021	542		540
Additional paid-in capital	503,588		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)
Accumulated other comprehensive loss, net of tax	(20,773)		(19,801)
Retained earnings	1,066,538		1,008,783
Total Stockholders' Equity	1,416,247		1,358,298
Total Liabilities and Stockholders' Equity	$	3,559,114	$	3,429,273

 See accompanying notes.

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Prestige Consumer Healthcare Inc.

Condensed Consolidated Statements of Changes in Stockholders' Equity

(Unaudited)

	Three Months Ended June 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	—	—		1,878		—	—		—		—		1,878
Exercise of stock options	68	—		2,204		—	—		—		—		2,204
Issuance of shares related to restricted stock	144	2		(2)		—	—		—		—		—
Treasury share repurchases	—	—		—		63	(2,916)		—		—		(2,916)
Net income	—	—		—		—	—		—		57,755		57,755
Comprehensive loss	—	—		—		—	—		(972)		—		(972)
Balances at June 30, 2021	54,211	$	542	$	503,588	4,151	$	(133,648)	$	(20,773)	$	1,066,538	$	1,416,247

	Three Months Ended June 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	—	—		1,464		—	—		—		—		1,464
Exercise of stock options	60	—		1,216		—	—		—		—		1,216
Issuance of shares related to restricted stock	74	1		(1)		—	—		—		—		—
Treasury share repurchases	—	—		—		31	(1,242)		—		—		(1,242)
Net income	—	—		—		—	—		—		43,706		43,706
Comprehensive income	—	—		—		—	—		10,899		—		10,899
Balances at June 30, 2020	53,939	$	539	$	490,795	3,750	$	(118,865)	$	(33,262)	$	887,807	$	1,227,014

See accompanying notes.

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Prestige Consumer Healthcare Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

	Three Months Ended June 30,
(In thousands)	2021		2020
Operating Activities
Net income	$	57,755	$	43,706
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	7,594		7,467
Loss on disposal of property and equipment	26		42
Deferred income taxes	5,876		6,147
Amortization of debt origination costs	759		1,400
Stock-based compensation costs	1,878		1,464
Non-cash operating lease cost	1,691		1,831
Other	—		50
Changes in operating assets and liabilities:
Accounts receivable	(15,879)		39,734
Inventories	9,384		51
Prepaid expenses and other current assets	(1,049)		(4,019)
Accounts payable	(15,551)		(32,386)
Accrued liabilities	18,439		11,588
Operating lease liabilities	(1,578)		(1,812)
Other	(40)		(109)
Net cash provided by operating activities	69,305		75,154
Investing Activities
Purchases of property, plant and equipment	(1,500)		(2,553)
Other	177		—
Net cash used in investing activities	(1,323)		(2,553)
Financing Activities
Term loan repayments	(20,000)		(56,000)
Borrowings under revolving credit agreement	85,000		—
Repayments under revolving credit agreement	—		(55,000)
Payments of finance leases	(638)		(336)
Proceeds from exercise of stock options	2,204		1,216
Fair value of shares surrendered as payment of tax withholding	(2,916)		(1,242)
Net cash provided by (used in) financing activities	63,650		(111,362)
Effects of exchange rate changes on cash and cash equivalents	(310)		1,942
Increase (decrease) in cash and cash equivalents	131,322		(36,819)
Cash and cash equivalents - beginning of period	32,302		94,760
Cash and cash equivalents - end of period	$	163,624	$	57,941
Interest paid	$	3,389	$	5,571
Income taxes paid	$	2,388	$	2,182

See accompanying notes.

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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 7 to these Condensed Consolidated Financial Statements.

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 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.

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 months ended June 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 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

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

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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 and apply to all entities that have contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued. The amendments in this update provide temporary optional guidance to ease the potential burden in accounting for reference rate reform. An entity may elect to apply the amendments prospectively through December 31, 2022. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope 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. The amendments in this update are effective immediately for entities that elect to apply the optional guidance in Topic 848. We are currently evaluating the impact of adopting this guidance on our Consolidated Financial Statements.

2.     Inventories

Inventories consist of the following:

(In thousands)	June 30, 2021		March 31, 2021
Components of Inventories
Packaging and raw materials	$	9,480	$	8,463
Work in process	326		326
Finished goods	95,740		106,170
Inventories	$	105,546	$	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 million and $4.0 million at June 30, 2021 and March 31, 2021, respectively, related to obsolete and slow-moving inventory.

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3.    Goodwill

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

(In thousands)		North American OTC Healthcare		International OTC Healthcare		Consolidated
Balance - March 31, 2021
	Goodwill	$	710,354	$	32,683	$	743,037
	Accumulated impairment loss	(163,711)		(1,247)		(164,958)
Balance - March 31, 2021		546,643		31,436		578,079
	Effects of foreign currency exchange rates	—		(239)		(239)
Balance - June 30, 2021
	Goodwill	710,354		32,444		742,798
	Accumulated impairment loss	(163,711)		(1,247)		(164,958)
Balance - June 30, 2021		$	546,643	$	31,197	$	577,840

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 30, 2021.

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

4.    Intangible Assets, net

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

(In thousands)	Indefinite- Lived Trademarks		Finite-Lived Trademarks and Customer Relationships		Totals
Gross Carrying Amounts
Balance — March 31, 2021	$	2,281,988	$	389,347	$	2,671,335
Effects of foreign currency exchange rates	(1,143)		(24)		(1,167)
Balance — June 30, 2021	2,280,845		389,323		2,670,168
Accumulated Amortization
Balance — March 31, 2021	—		195,606		195,606
Additions	—		4,867		4,867
Effects of foreign currency exchange rates	—		(19)		(19)
Balance — June 30, 2021	—		200,454		200,454
Intangible assets, net - June 30, 2021	$	2,280,845	$	188,869	$	2,469,714

Amortization expense was $4.9 million for the three months ended June 30, 2021, and June 30, 2020.  

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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)
Year Ending March 31,	Amount
2022 (remaining nine months ended March 31, 2022)	$	14,599
2023	19,465
2024	19,441
2025	17,398
2026	15,126
Thereafter	102,840
	$	188,869

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

5.    Leases

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

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

	Three Months Ended June 30,
(In thousands)	2021		2020
Finance lease cost:
Amortization of right-of-use assets	$	642	$	325
Interest on lease liabilities	66		50
Operating lease cost	1,687		1,697
Short term lease cost	22		23
Variable lease cost	11,651		11,707
Sublease income	—		(54)
Total net lease cost	$	14,068	$	13,748

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

(In thousands)
Year Ending March 31,	Operating Leases		Finance Lease		Total
2022 (Remaining nine months ending March 31, 2022)	$	5,453	$	2,119	$	7,572
2023	6,377		2,826		9,203
2024	6,335		2,826		9,161
2025	4,137		1,413		5,550
2026	1,815		—		1,815
Thereafter	3,164		—		3,164
Total undiscounted lease payments	27,281		9,184		36,465
Less amount of lease payments representing interest	(2,978)		(420)		(3,398)
Total present value of lease payments	$	24,303	$	8,764	$	33,067

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

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

6.    Other Accrued Liabilities

Other accrued liabilities consist of the following:

(In thousands)	June 30, 2021		March 31, 2021
Accrued marketing costs	$	38,885	$	29,955
Accrued compensation costs	7,107		14,074
Accrued broker commissions	749		1,023
Income taxes payable	7,772		1,652
Accrued professional fees	4,523		4,472
Accrued production costs	3,415		2,882
Accrued sales tax	1,692		2,368
Other accrued liabilities	4,292		4,976
	$	68,435	$	61,402

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7.    Long-Term Debt

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

(In thousands, except percentages)	June 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.	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.	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 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		—
Long-term debt	1,560,000		1,495,000
Less: unamortized debt costs	(14,648)		(15,347)
Long-term debt, net	$	1,545,352	$	1,479,653

At June 30, 2021, we had $85.0 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 million.

See Note 19 - Subsequent Events.

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 9 for further details).

As of June 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)
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

8.    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:

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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 30, 2021 and March 31, 2021.

	June 30, 2021				March 31, 2021
(In thousands)	Carrying Value		Fair Value		Carrying Value		Fair Value
2021 Senior Notes	$	600,000	$	579,000	$	600,000	$	570,000
2019 Senior Notes	400,000		421,000		400,000		417,000
2012 Term B-5 Loans	475,000		475,000		495,000		493,763
2012 ABL Revolver	85,000		85,000		—		—
Interest rate swaps	1,688		1,688		2,363		2,363

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

9.    Derivative Instruments

Changes in interest rates expose us to risks. To help us manage these risks, in January 2020 we entered into two interest rate swaps to hedge a total of $400.0 million of our variable interest debt. One swap settled on January 31, 2021 and, as of June 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
(In thousands)	Hedge Type	Final Settlement Date	Notional Amount		Other Accrued Liabilities		Other Long-Term Liabilities
Interest rate swap	Cash flow	1/31/2022	$	200,000	(1,688)		—
Total fair value					$	(1,688)	$	—

	March 31, 2021
(In thousands)	Hedge Type	Final Settlement Date	Notional Amount		Other Accrued Liabilities		Other Long-Term Liabilities
Interest rate swap	Cash flow	1/31/2022	$	200,000	(2,363)		—
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,
(In thousands)	Location	2021		2020
Gain Recognized in Other Comprehensive Loss (effective portion)	Other comprehensive income (loss)	$	520	$	309
Loss Reclassified from Accumulated Other Comprehensive Loss into Income	Interest expense	$	(718)	$	(1,026)

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

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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.    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 one 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.  No dividends have been declared or paid on our common stock through June 30, 2021.

During the three months ended June 30, 2021 and 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

11.    Accumulated Other Comprehensive Loss

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

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

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

12.    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"). 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.

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

	Three Months Ended June 30,
(In thousands, except per share data)	2021		2020
Numerator
Net income	$	57,755	$	43,706
Denominator
Denominator for basic earnings per share — weighted average shares outstanding	50,139		50,264
Dilutive effect of unvested restricted stock units and options issued to employees and directors	532		544
Denominator for diluted earnings per share	50,671		50,808
Earnings per Common Share:
Basic earnings per share	$	1.15	$	0.87
Diluted earnings per share	$	1.14	$	0.86

For the three months ended June 30, 2021 and 2020, there were 0.5 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.    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.

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

	Three Months Ended June 30,
(In thousands)	2021		2020
Pre-tax share-based compensation costs charged against income	$	1,878	$	1,464
Income tax benefit recognized on compensation costs	$	143	$	112
Total fair value of options and RSUs vested during the period	$	7,006	$	5,781
Cash received from the exercise of stock options	$	2,204	$	1,216
Tax benefits realized from tax deductions resulting from RSU issuances and stock option exercises	$	1,721	$	944

At June 30, 2021, there were $13.1 million of unrecognized compensation costs related to unvested share-based compensation arrangements under the 2005 Plan and the 2020 Plan, based on management's estimate of the shares that will ultimately vest.  We expect to recognize such costs over a weighted average period of 1.1 years. At June 30, 2021, there were 2.5 million shares available for issuance under the 2020 Plan.

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On May 3, 2021, the Compensation and Talent Management Committee (the "Committee") of our Board of Directors granted 77,345 performance stock units, 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.

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

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: