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

Company: Prestige Consumer Healthcare Inc.
Filing Date: 2025-05-09
Form: 10-K
Item: Item 1A
Chunk 25
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 include reductions in the amount of inventory they carry and related reductions in retail space and may continue such efforts in the future. 

In addition, our business is based primarily upon individual sales orders.  We typically do not enter into long-term contracts with our customers.  Accordingly, our customers could cease buying products or reduce the number of items they buy from us at any time and for any reason.  The fact that we do not have long-term contracts with our customers means that we have no recourse in the event a customer no longer wants to purchase products from us or reduces the number of items purchased.  If a significant number of our smaller customers, or any of our significant customers, elect not to purchase products from us or materially reduce the quantity of products they purchase from us, our financial condition and results of operations could be materially adversely affected.

Disruption in our third-party distribution center or our manufacturing facilities may prevent us from meeting customer demand, and our sales and financial condition may materially suffer as a result.

Our product distribution in the United States is managed by a third-party through one primary distribution center in Clayton, Indiana.  We also operate a manufacturing facility in Lynchburg, Virginia, which manufactures products representing approximately 15% of our gross revenues.  A natural disaster, such as tornado, earthquake, flood, or fire at our distribution center or our own or a third-party manufacturing facility could damage our inventory and/or materially impair our ability to distribute our products to customers in a timely manner or at a reasonable cost.  In addition, a serious disruption caused by performance or contractual issues with our third-party distribution manager, or labor shortages or contagious disease outbreaks or other public health emergencies at our distribution center or manufacturing facilities could also materially impact our product distribution. Any disruption could result in increased costs, expense and/or shipping times, and could harm our reputation and cause us to incur customer fees and penalties.  We could also incur significantly higher costs and experience longer lead times should we be required to replace our distribution center, the third-party distribution manager or our manufacturing facilities.  As a result, any serious disruption could have a material adverse effect on our business, financial condition and results of operations.

Any future outbreak of other highly infectious diseases or public health emergencies could have a material adverse impact on our results of operations and financial condition. 

Our sales are impacted by consumer spending levels, the availability of our products at retail stores or for online purchase and our ability to manufacture and distribute products to our customers and consumers in an effective and efficient manner. Our sales are also