Company: PBH
Filing Date: 2025-05-09
Form Type: 10-K
Source: 0001295947-25-000017
Chunk: 71

Company: Prestige Consumer Healthcare Inc.
Filing Date: 2025-05-09
Form: 10-K
Item: Item 7
Chunk 71
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 by brand;

•Analyzes industry trends and projects brand growth rates;

•Prepares annual sales forecasts;

•Evaluates advertising effectiveness;

•Analyzes gross margins;

•Reviews contractual benefits or limitations;

•Monitors competitors’ advertising spend and product innovation;

•Prepares projections to measure brand viability over the estimated useful life of the intangible asset; and

•Considers the regulatory environment, as well as industry litigation.

As a result of our annual impairment test at February 28, 2023, the fair values of three of our indefinite-lived intangible assets, Summer’s Eve, DenTek and TheraTears, did not exceed the carrying values and, as such, impairment charges totaling $298.7 million were recorded.  The impairment charges were primarily a result of an overall increase in the discount rate used to value the brands, as well as in the case of Summer’s Eve, our reassessment of the long-term sales projections of this brand during our annual planning cycle.   The indefinite-lived intangible assets impaired are all part of our North American OTC Healthcare segment.

At February 29, 2024, in conjunction with the annual test for impairment of intangible assets, the estimated fair value exceeded the carrying value for all indefinite-lived intangible assets and accordingly, no impairment charge was taken.

As part of our annual impairment test conducted on February 28, 2025, we recognized impairment charges totaling $6.6 million.  These charges pertain to non-strategic indefinite-lived intangible assets, reflecting a deliberate shift in sales toward other strategic brands within our portfolio.  Of the $6.6 million impairment charge, $4.1 million was associated with our North American OTC Healthcare segment, while $2.4 million impacted our International OTC Healthcare segment.

Additionally, our analysis as of February 28, 2025 confirmed that all other indefinite-lived intangible assets had a fair value exceeding their carrying value by at least 10%.

We performed a sensitivity analysis of our weighted average cost of capital, and we determined that a 50-basis point increase in the weighted average cost of capital used to value all of our indefinite-lived intangible assets would have resulted in an additional impairment charge of $1.4 million.  Additionally, a 50-basis point decrease in the terminal growth rate used for each of our indefinite-lived intangible assets would have resulted in an additional impairment charge of $1.9 million.

Finite-Lived Intangible