Company: PBH
Filing Date: 2025-05-09
Form Type: 10-K
Source: 0001295947-25-000017
Chunk: 27

Company: Prestige Consumer Healthcare Inc.
Filing Date: 2025-05-09
Form: 10-K
Item: Item 1A
Chunk 27
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 calculation of consumption levels may not accurately reflect actual retail consumption given limitations of tracked data, and consumption levels could significantly differ from reported revenues.    

Product liability claims and product recalls and related negative publicity could adversely affect our sales and operating results.

We are dependent on consumers’ perception of the safety and quality of our products.  Negative consumer perception may arise from product liability claims and product recalls, regardless of whether such claims or recalls involve us or our products.  The mere publication of information asserting concerns about the safety of our products or the ingredients used in our products could have a material adverse effect on our business and results of operations.  We believe our products are safe and effective when used in accordance with label directions.  However, adverse publicity about ingredients used in our products may discourage consumers from buying our products containing those ingredients, which would have an adverse impact on our sales. 

From time to time we are subject to various product liability claims.  Claims could be based on allegations that, among other things, our products contain contaminants, include inadequate instructions or warnings regarding their use, or include inadequate warnings concerning side effects and interactions with other substances. For example, we previously acquired a low sales volume talcum-based product as part of a larger acquisition, which was subsequently discontinued in 2017.  The product has been identified in a small number of lawsuits along with other talcum-based products and their manufacturers alleging contamination of the products. To date, most claims against our discontinued product have been voluntarily dismissed and none have resulted in a material loss to the Company. Whether or not successful, product liability claims could result in negative publicity that could adversely affect the reputation of our brands and our sales and financial condition.  Additionally, we may be required to pay for losses or injuries purportedly caused by our products, which could negatively impact our financial condition.  

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We could also be required for a variety of reasons to initiate product recalls, which we have done on several occasions.  Any product recalls could have a material adverse effect on our business, financial condition and results of operations. 

Although we have supply and manufacturing agreements with certain of our third-party manufacturers, which explicitly outline the allocation of product liability risk with respect to the products these manufacturers produce, some of our other products are manufactured on a purchase order basis.  To the extent we rely on purchase orders to govern our commercial relationships with suppliers, we have not specifically negotiated the allocation of risk for product liability obligations.  Instead, we typically rely on implied warranties from the suppliers with respect to these products.