Company: PBH
Filing Date: 2025-05-09
Form Type: 10-K
Source: 0001295947-25-000017
Chunk: 7

Company: Prestige Consumer Healthcare Inc.
Filing Date: 2025-05-09
Form: 10-K
Item: Item 1
Chunk 7
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 2024 and 2023.  During 2025, 2024 and 2023, this manufacturer accounted for approximately 21%, 20% and 20%, respectively, of our gross revenues, while we accounted for a significant portion of their gross revenues over that time period.  No other single third-party supplier produces products that account for 10% or more of our gross revenues.  Our long-term supply and manufacturing agreements explicitly outline the manufacturers’ obligations and product specifications with respect to the brand or brands being produced, including allocation of product liability risk.  Pursuant to the terms of these agreements, the purchase price of products is subject to change due to fluctuations in input costs such as raw material, packaging components and labor costs.

Some of our other products are manufactured on a purchase order basis, which is generally based on batch sizes and results in no long-term obligations or commitments.  As a result, these manufacturers could cease manufacturing our products at any time and for any reason or initiate arbitrary and costly price increases.  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.    To the extent we rely on purchase orders, rather than supply and manufacturing agreements, to govern our commercial relationships with suppliers, we typically rely on implied warranties with respect to the products manufactured, and we do not have specifically negotiated allocation of risk with these third-party manufacturers.  With regard to our products both manufactured under long-term agreements and purchase orders, in periods of high inflation we have experienced and may continue to experience frequent increases in prices of products due to fluctuations in input costs such as raw material, packaging components and labor costs.

In addition to relying on contract manufacturers, we operate a manufacturing facility in Lynchburg, Virginia, which manufactures products representing approximately 15% of our gross revenues. 

We believe that most of the raw materials and packaging components used to produce our products at our manufacturing facilities and at our third-party manufacturing facilities are generally available through multiple sources acquired on both a contract and purchase order basis but are also subject to inflationary pressure, production delays and shortages from time to time. 

Warehousing and Distribution

We manage product distribution in the continental United States through one facility, which is owned and operated by a third-party provider, since fiscal 2020.  This facility provides warehouse services including storage, handling and shipping, as well as transportation services, with respect to our full line of products, including (i) complete management services, (ii