Company: PBH
Filing Date: 2025-05-09
Form Type: 10-K
Source: 0001295947-25-000017
Chunk: 89

Company: Prestige Consumer Healthcare Inc.
Filing Date: 2025-05-09
Form: 10-K
Item: Item 8
Chunk 89
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 Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. 

Indefinite-Lived Tradename Impairment Assessments – Summer’s Eve and Monistat

As described in Notes 1 and 6 to the consolidated financial statements, the Company’s consolidated indefinite-lived tradenames, net balance was $2,137 million as of March 31, 2025, of which a portion relates to the carrying values for Summer’s Eve and Monistat indefinite-lived tradenames. Indefinite-lived intangible assets are tested for impairment at the individual asset level at least annually in the fourth fiscal quarter of each year, or more frequently if events or changes in circumstances indicate that the asset may be impaired. An impairment loss is recognized if the carrying amount of the asset exceeds its fair value. Management utilized the excess earnings method to estimate the fair value of individual indefinite-lived intangible assets. The assumptions subject to significant uncertainties include the discount rate, as well as future sales, gross margins, and advertising and marketing expenses.

The principal considerations for our determination that performing procedures relating to the indefinite-lived tradename impairment assessments of the Summer’s Eve and Monistat tradenames is a critical audit matter are (i) the significant judgment by management when developing the fair value of the Summer’s Eve and Monistat indefinite-lived tradenames; (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to the discount rate, future sales, gross margins, and advertising and marketing expenses; and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness