**U.
      S. SECURITIES AND EXCHANGE COMMISSION**


**Washington,
      DC 20549**





**FORM
      10-Q**





[
      X
      ]QUARTERLY
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934





For
      the
      quarterly period endedSeptember
      30, 2006





[   
      ]TRANSITION
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934





**For
      the transition period from ____ to _____**





**PRESTIGE
      BRANDS HOLDINGS, INC.**


**Delaware**
            **20-1297589**
            **001-32433**(State
                of Incorporation)
            (I.R.S.
                Employer Identification No.)
            (Commission
                File Number)





**PRESTIGE
      BRANDS INTERNATIONAL, LLC**


**Delaware**
            **20-0941337**
            **333-117152-18**(State
                of Incorporation)
            (I.R.S.
                Employer Identification No.)
            (Commission
                File Number)


(Exact
      name of Registrants as specified in their charters)




**90
                North Broadway**
              **Irvington,
                New York 10533**
            **(914)
                524-6810**(Address
                of Registrants’ Principal Executive Offices)
            (Registrants’
                telephone number, including area
                code)









This
      Quarterly Report on Form 10-Q is a combined quarterly report being filed
      separately by Prestige Brands Holdings, Inc. (“PBH”) and Prestige Brands
      International, LLC (“PBI”). PBI, an indirect wholly-owned subsidiary of PBH, is
      an indirect parent company of Prestige Brands, Inc., the issuer of our 91⁄4%
      senior subordinated notes due 2012, and the parent guarantor of such notes.
      As
      the indirect holding company of PBI, PBH does not conduct ongoing business
      operations. As a result, the financial information for PBH and PBI are identical
      for the purposes of the discussion of operating results in “Management’s
      Discussion and Analysis of Financial Condition and Results of Operations.”
Unless otherwise indicated, we have presented information throughout this Form
      10-Q for PBH and its consolidated subsidiaries, including PBI. The information
      contained herein relating to each individual Registrant is filed by such
      Registrant on its own behalf. Neither Registrant makes any representation as
      to
      information relating to the other Registrant. PBI meets the conditions set
      forth
      in general instructions (H)(1)(a) and (b) of Form 10-Q and is therefore filing
      this Form 10-Q with the reduced disclosure format.





Indicate
      by check mark if the Registrant is not required to file reports pursuant to
      Section 13 or Section 15(d) of the Act.


Prestige
      Brands Holdings, Inc. Yes
      [  ] No x


Prestige
      Brands International, LLC Yes
      [x]          No [ 
]





Indicate
      by check mark whether the Registrants (1) have filed all reports required to
      be
      filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
      the
      preceding 12 months (or for such shorter period that the Registrants were
      required to file such reports), and (2) have been subject to such filing
      requirements for the past 90 days. Yes x No o





Indicate
      by check mark whether each Registrant is a large accelerated filer, an
      accelerated filer, or a non-accelerated filer.





**Large**
              **Accelerated**
              **Filer**
            ****
            **Accelerated**
              **Filer**
            ****
            **Non**
              **Accelerated**
              **Filer**Prestige
                Brands Holdings, Inc.
            
            
            XPrestige
                Brands International, LLC
            
            
            
            
            X





Indicate
      by check mark whether the Registrants are shell companies (as defined in Rule
      12
      b-2 of the Exchange Act).


Yes
      [  ] No x





As
      of
      November 8, 2006, PBH had 50,007,589 shares of common stock outstanding. As
      of
      such date, Prestige International Holdings, LLC, a wholly-owned subsidiary
      of
      PBH, owned 100% of the uncertificated ownership interests of
      PBI.





**Prestige
      Brands Holdings, Inc.**


**Form
      10-Q**


**Index**





**PART I.**
            **FINANCIAL INFORMATION**Item 1.
            Consolidated Financial Statements**Prestige Brands Holdings, Inc.**Consolidated Statements of Operations - three months
              ended
              September 30, 2006and 2005 and six months ended September 30, 2006 and 2005
                (unaudited)
            2Consolidated Balance Sheets - September 30, 2006 and
              March
              31, 2006 (unaudited)
            3Consolidated Statement of Changes in Stockholders’ Equity
              andComprehensive Income - six months
              ended September 30, 2006 (unaudited)
            4Consolidated Statements of Cash Flows - six months
              endedSeptember 30, 2006 and 2005
              (unaudited)
            5Notes to Unaudited Consolidated Financial
              Statements
            6**Prestige Brands International,
              LLC**Consolidated Statements of Operations - three months
              ended
              September 30, 2006and 2005 and six months ended
              September 30, 2006 and 2005 (unaudited)
            24Consolidated Balance Sheets - September 30, 2006 and
              March
              31, 2006 (unaudited)
            25Consolidated Statement of Changes in Members’ Equity - six
              monthsended September 30, 2006
              (unaudited)
            26Consolidated Statements of Cash Flows - six months
              endedSeptember 30, 2006 and 2005
              (unaudited)
            27Notes to Unaudited Consolidated Financial
              Statements
            28Item 2.
            Management’s Discussion and Analysis of Financial
              Conditionand Results of Operations
            44Item 3.
            Quantitative and Qualitative Disclosure About Market
              Risk
            61Item 4.
            Controls and Procedures
            61**PART
                II.**
            **OTHER INFORMATION**Item 1.
            Legal Proceedings
            62Item 1A.
            Risk Factors
            63Item 2.
            Unregistered Sales of Equity Securities and Use of
              Proceeds
            66Item 3.
            Defaults Upon Senior Securities
            66Item 4.
            Submission of Matters to a Vote of Security
              Holders
            67Item 5.
            Other Information
            67Item 6.
            Exhibits
            68Signatures
            69




-1-





PART
      I.FINANCIAL
      INFORMATION





Item
      1.FINANCIAL
      STATEMENTS





**Prestige
      Brands Holdings, Inc.**


**Consolidated
      Statements of Operations**


***(Unaudited)***








****
            **Three
                Months**
              **Ended
                September 30**
            ****
            **Six
                Months**
              **Ended
                September 30**
            *******(In
                thousands, except per share data)***
            
            2006
            
            2005
            
            2006
            
            2005**Revenues**Net
                sales
            
            $
            84,033
            
            $
            73,320
            
            $
            159,600
            
            $
            136,748Other
                revenues
            
            
            518
            
            
            25
            
            
            874
            
            
            50Total
                revenues
            
            
            84,551
            
            
            73,345
            
            
            160,474
            
            
            136,798**Cost
                of Sales**Costs
                of sales
            
            
            41,259
            
            
            35,549
            
            
            77,584
            
            
            64,498Gross
                profit
            
            
            43,292
            
            
            37,796
            
            
            82,890
            
            
            72,300**Operating
                Expenses**Advertising
                and promotion
            
            
            9,455
            
            
            10,217
            
            
            16,857
            
            
            18,922General
                and administrative
            
            
            7,259
            
            
            4,117
            
            
            13,693
            
            
            9,023Depreciation
            
            
            219
            
            
            487
            
            
            439
            
            
            975Amortization
                of intangible assets
            
            
            2,193
            
            
            2,148
            
            
            4,386
            
            
            4,296Total
                operating expenses
            
            
            19,126
            
            
            16,969
            
            
            35,375
            
            
            33,216Operating
                income
            
            
            24,166
            
            
            20,827
            
            
            47,515
            
            
            39,084**Other
                income (expense)**Interest
                income
            
            
            403
            
            
            226
            
            
            588
            
            
            307Interest
                expense
            
            
            (10,146
            )
            
            (8,897
            )
            
            (20,123
            )
            
            (17,488
            )Total
                other income (expense)
            
            
            (9,743
            )
            
            (8,671
            )
            
            (19,535
            )
            
            (17,181
            )Income
                before provision for
              income taxes
            
            
            14,423
            
            
            12,156
            
            
            27,980
            
            
            21,903Provision
                for income taxes
            
            
            5,639
            
            
            4,782
            
            
            10,940
            
            
            8,600Net
                income
            
            $
            8,784
            
            $
            7,374
            
            $
            17,040
            
            $
            13,303Basic
                earnings per share
            
            $
            0.18
            
            $
            0.15
            
            $
            0.35
            
            $
            0.27Diluted
                earnings per share
            
            $
            0.18
            
            $
            0.15
            
            $
            0.34
            
            $
            0.27Weighted
                average shares outstanding:
              Basic
            
            
            49,451
            
            
            48,791
            
            
            49,389
            
            
            48,757Diluted
            
            
            49,994
            
            
            49,949
            
            
            49,991
            
            
            49,932





*See
      accompanying notes.*





-2-


**Prestige
      Brands Holdings, Inc.**


**Consolidated
      Balance Sheets**


*(Unaudited*)





***(In
                thousands)***
            
            **September
                30, 2006**
            
            **March
                31, 2006****Assets**Current
                assetsCash
                and cash equivalents
            
            $
            10,508
            
            $
            8,200Accounts
                receivable
            
            
            37,447
            
            
            40,042Inventories
            
            
            29,272
            
            
            33,841Deferred
                income tax assets
            
            
            2,405
            
            
            3,227Prepaid
                expenses and other current assets
            
            
            1,748
            
            
            701Total
                current assets
            
            
            81,380
            
            
            86,011Property
                and equipment
            
            
            1,527
            
            
            1,653Goodwill
            
            
            302,786
            
            
            297,935Intangible
                assets
            
            
            662,411
            
            
            637,197Other
                long-term assets
            
            
            13,694
            
            
            15,849Total
                Assets
            
            $
            1,061,798
            
            $
            1,038,645**Liabilities
                and Stockholders’ Equity**Current
                liabilitiesAccounts
                payable
            
            $
            22,584
            
            $
            18,065Accrued
                interest payable
            
            
            7,773
            
            
            7,563Income
                taxes payable
            
            
            64
            
            
            1,795Other
                accrued liabilities
            
            
            8,714
            
            
            4,582Current
                portion of long-term debt
            
            
            3,730
            
            
            3,730Total
                current liabilities
            
            
            42,865
            
            
            35,735Long-term
                debt
            
            
            486,035
            
            
            494,900Other
                accrued liabilities
            
            
            2,801
            
            
            --Deferred
                income tax liabilities
            
            
            103,954
            
            
            98,603Total
                Liabilities
            
            
            635,655
            
            
            629,238**Commitments
                and Contingencies - Note 14****Stockholders’
                Equity**Preferred
                stock - $0.01 par valueAuthorized
                - 5,000 sharesIssued
                and outstanding - None
            
            
            --
            
            
            --Common
                stock - $0.01 par valueAuthorized
                - 250,000 sharesIssued
                - 50,060 shares at September 30, 2006 and
              50,056 shares at March 31, 2006
            
            
            501
            
            
            501Additional
                paid-in capital
            
            
            378,794
            
            
            378,570Treasury
                stock, at cost - 52 shares at September 30, 2006
              and 18 shares at March 31, 2006
            
            
            (36
            )
            
            (30
            )Accumulated
                other comprehensive income
            
            
            587
            
            
            1,109Retained
                earnings
            
            
            46,297
            
            
            29,257Total
                stockholders’ equity
            
            
            426,143
            
            
            409,407Total
                Liabilities and Stockholders’ Equity
            
            $
            1,061,798
            
            $
            1,038,645


*See
      accompanying notes.*


-3-


**Prestige
      Brands Holdings, Inc.**


**Consolidated
      Statement of Changes in Stockholders’ Equity**


**and
      Comprehensive Income**


**Six
      Months Ended September 30, 2006**


***(Unaudited)***








****
            
            **Common
                Stock**
              **Par**
              **Shares****Value**
            
            **Additional**
              **Paid-in**
              **Capital**
            
            **Treasury
                Stock**
              **SharesAmount**
            
            **Accumulated**
              **Other**
              **Comprehensive**
              **Income**
            
            **Retained**
              **Earnings**
            
            **Totals*****(In
                thousands)***Balances
                - March 31, 2006
            
            
            50,056
            
            $
            501
            
            $
            378,570
            
            
            18
            
            $
            (30
            )
            $
            1,109
            
            $
            29,257
            
            $
            409,407Stock-based
                compensation
            
            
            4
            
            
            
            
            
            224
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            224Purchase
                of common stock
              for treasury
            
            
            
            
            
            
            
            
            
            
            
            34
            
            
            (6
            )
            
            
            
            
            
            
            
            (6
            )Components
                of
              comprehensive
                incomeNet
                income
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            17,040
            
            
            17,040Amortization
                of interest
              rate caps
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            535
            
            
            
            
            
            535Unrealized
                loss on interest
              rate caps, net of income
              tax benefit of $423
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (1,057
            )
            
            
            
            
            (1,057
            )Total
                comprehensive income
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            16,518Balances
                - September 30, 2006
            
            
            50,060
            
            $
            501
            
            $
            378,794
            
            
            52
            
            $
            (36
            )
            $
            587
            
            $
            46,297
            
            $
            426,143





*See
      accompanying notes.*


-4-


**Prestige
      Brands Holdings, Inc.**


**Consolidated
      Statements of Cash Flows**


***(Unaudited)***





****
            
            **Six
                Months Ended September 30*****(In
                thousands)***
            
            **2006**
            
            **2005****Operating
                Activities**Net
                income
            
            $
            17,040
            
            $
            13,303Adjustments
                to reconcile net income to net cash provided by operating
                activities:Depreciation
                and amortization
            
            
            4,825
            
            
            5,271Deferred
                income taxes
            
            
            6,197
            
            
            7,961Amortization
                of deferred financing costs
            
            
            1,609
            
            
            1,136Stock-based
                compensation
            
            
            224
            
            
            110Changes
                in operating assets and liabilitiesAccounts
                receivable
            
            
            2,595
            
            
            3,366Inventories
            
            
            5,202
            
            
            (8,054
            )Prepaid
                expenses and other current assets
            
            
            (1,047
            )
            
            (104
            )Accounts
                payable
            
            
            4,494
            
            
            1,020Income
                taxes payable
            
            
            (1,731
            )
            
            --Accrued
                liabilities
            
            
            3,326
            
            
            521Net
                cash provided by operating activities
            
            
            42,734
            
            
            24,530**Investing
                Activities**Purchases
                of equipment
            
            
            (313
            )
            
            (297
            )Purchase
                of business
            
            
            (31,242
            )
            
            --Net
                cash used for investing activities
            
            
            (31,555
            )
            
            (297
            )**Financing
                Activities**Repayment
                of long-term debt
            
            
            (8,865
            )
            
            (1,865
            )Payment
                of deferred financing costs
            
            
            --
            
            
            (33
            )Purchase
                of common stock for treasury
            
            
            (6
            )
            
            (21
            )Additional
                costs associated with initial public offering
            
            
            --
            
            
            (63
            )Net
                cash used for financing activities
            
            
            (8,871
            )
            
            (1,982
            )Increase
                in cash
            
            
            2,308
            
            
            22,251Cash
                - beginning of period
            
            
            8,200
            
            
            5,334Cash
                - end of period
            
            $
            10,508
            
            $
            27,585**Supplemental
                Cash Flow Information**Fair
                value of assets acquired
            
            $
            35,068
            
            $
            --Fair
                value of liabilities assumed
            
            
            (3,826
            )
            
            --Cash
                paid to purchase business
            
            $
            31,242
            
            $
            --Interest
                paid
            
            $
            18,306
            
            $
            16,408Income
                taxes paid
            
            $
            6,287
            
            $
            565





*See accompanying notes.*


-5-


**Prestige
      Brands Holdings, Inc.**


**Notes
      to Consolidated Financial Statements**


***(Unaudited)***








**1.**
            **Business
                and Basis of Presentation**





***Nature of Business***


Prestige
      Brands Holdings, Inc. and its subsidiaries (the “Company”) are engaged in the
      marketing, sales and distribution of over-the-counter drug, personal care and
      household cleaning brands to mass merchandisers, drug stores, supermarkets
      and
      club stores primarily in the United States and Canada.





***Basis of Presentation***


The
      unaudited consolidated financial statements presented herein have been prepared
      in accordance with generally accepted accounting principles for interim
      financial reporting and with the instructions to Form 10-Q and Article 10 of
      Regulation S-X. Accordingly, they do not include all of the information and
      footnotes required by generally accepted accounting principles for complete
      financial statements. In the opinion of management, the financial statements
      include all adjustments, consisting of normal recurring adjustments that are
      considered necessary for a fair presentation of the Company’s financial
      position, results of operations and cash flows for the interim periods.
      Operating results for the three and six month periods ended September 30, 2006
      are not necessarily indicative of results that may be expected for the year
      ending March 31, 2007. This financial information should be read in conjunction
      with the Company’s financial statements and notes thereto included in the
      Company’s Annual Report on Form 10-K for the year ended March 31,
      2006.





***Use
      of Estimates***


The
      preparation of financial statements in conformity with accounting principles
      generally accepted in the United States of America requires management to make
      estimates and assumptions that affect the reported amounts of assets and
      liabilities and disclosure of contingent assets and liabilities at the date
      of
      the financial statements, as well as the reported amounts of revenues and
      expenses during the reporting period. Although these estimates are based on
      the
      Company’s knowledge of current events and actions that the Company may undertake
      in the future, actual results could differ from those estimates. As discussed
      below, the Company’s most significant estimates include those made in connection
      with the valuation of intangible assets, sales returns and allowances, trade
      promotional allowances and inventory obsolescence.




***Cash
      and Cash Equivalents***


The
      Company considers all short-term deposits and investments with original
      maturities of three months or less to be cash equivalents. Substantially all
      of
      the Company’s cash is held by one bank located in Wyoming. The Company does not
      believe that, as a result of this concentration, it is subject to any unusual
      financial risk beyond the normal risk associated with commercial banking
      relationships.





***Accounts
      Receivable***


The
      Company extends non-interest bearing trade credit to its customers in the
      ordinary course of business. The Company maintains an allowance for doubtful
      accounts receivable based upon historical collection experience and expected
      collectibility of the accounts receivable. In
      an
      effort to reduce credit risk, the Company (i) has established credit limits
      for
      all of its customer relationships, (ii) performs ongoing credit evaluations
      of
      customers’ financial condition, (iii) monitors the payment history and aging of
      customers’ receivables, and (iv) monitors open orders against an individual
      customer’s outstanding receivable balance.





***Inventories***


Inventories
      are stated at the lower of cost or fair value, where cost is determined by
      using
      the first-in, first-out method. The Company provides an allowance for slow
      moving and obsolete inventory, whereby it reduces
      inventories for the diminution of value, resulting from product obsolescence,
      damage or other issues affecting marketability, equal to the difference between
      the cost of the inventory and its estimated market value. Factors


-6-


utilized
      in the determination of estimated market value include (i) current sales data
      and historical return rates, (ii) estimates of future demand, (iii) competitive
      pricing pressures, (iv) new product introductions, (v) product expiration dates,
      and (vi) component and packaging obsolescence.





***Property
      and Equipment***


Property
      and equipment are stated at cost and are depreciated using the straight-line
      method based on the following estimated useful lives:


YearsMachinery
            
            5Computer
                equipment
            
            3Furniture
                and fixtures
            
            7Leasehold
                improvements
            
            5





Expenditures
      for maintenance and repairs are charged to expense as incurred. When an asset
      is
      sold or otherwise disposed of, the cost and associated accumulated depreciation
      are removed from the accounts and the resulting gain or loss is recognized
      in
      the consolidated statement of operations.




Property
      and equipment are reviewed for impairment whenever events or changes in
      circumstances indicate that the carrying amount of such assets may not be
      recoverable. An impairment loss is recognized if the carrying amount of the
      asset exceeds its fair value.




***Goodwill***


The
      excess of the purchase price over the fair market value of assets acquired
      and
      liabilities assumed in purchase business combinations is classified as goodwill.
      In accordance with Financial Accounting Standards Board (“FASB”) Statement of
      Financial Accounting Standards (“Statement”) No. 142, “Goodwill and Other
      Intangible Assets,” the Company does not amortize goodwill, but performs
      impairment tests of the carrying value at least annually. The Company tests
      goodwill for impairment at the “brand” level, which is one level below the
      operating segment level.





***Intangible
      Assets***


Intangible
      assets are stated at cost less accumulated amortization. For intangible assets
      with finite lives, amortization is computed on the straight-line method over
      estimated useful lives ranging from five to 30 years.





Indefinite
      lived intangible assets are tested for impairment at least annually, while
      intangible assets with finite lives are reviewed for impairment whenever events
      or changes in circumstances indicate that the carrying amount of such assets
      may
      not be recoverable. An impairment loss is recognized if the carrying amount
      of
      the asset exceeds its fair value.





***Deferred
      Financing Costs***


The
      Company has incurred debt issuance costs in connection with its long-term debt.
      These costs are capitalized as deferred financing costs and amortized using
      the
      effective interest method over the term of the related debt.





***Revenue
      Recognition***


Revenues
      are recognized in accordance with Securities and Exchange Commission Staff
      Accounting Bulletin 104, “Revenue Recognition,” when the following criteria are
      met: (1) persuasive evidence of an arrangement exists; (2) the product has
      been
      shipped and the customer takes ownership and assumes risk of loss; (3) the
      selling price is fixed or determinable; and (4) collection of the resulting
      receivable is reasonably assured. The Company has determined that the transfer
      of risk of loss generally occurs when product is received by the customer and,
      accordingly, recognizes revenue at that time. Provision is made for estimated
      discounts related to customer payment terms and estimated product returns at
      the
      time of sale based on the Company’s historical experience.





As
      is
      customary in the consumer products industry, t he
      Company participates in the
      promotional programs of its customers to enhance the sale of its products. The
      cost
      of these promotional programs varies based on the actual number of units sold
      during a finite period of time . The
      Company estimates the cost of such promotional programs at their inception
      based
      on historical experience and current market conditions and reduces sales by
      such
      estimates . These
      promotional programs consist of direct to consumer incentives such as coupons
      and


-7-


temporary
      price reductions, as well as incentives to the Company’s customers, such as
      slotting fees and cooperative advertising. Estimates of the costs of these
      promotional programs are based on (i) historical sales experience, (ii) the
      current offering, (iii) forecasted data, (iv) current market conditions, and
      (v)
      communication with customer purchasing/marketing personnel. At
      the
      completion of the promotional program, the estimated amounts are adjusted to
      actual results.





Due
      to
      the nature of the consumer products industry, the Company is required to
      estimate future product returns. Accordingly, the Company records an estimate
      of
      product returns concurrent with recording sales which is made after analyzing
      (i) historical return rates, (ii) current economic trends, (iii) changes in
      customer demand, (iv) product acceptance, (v) seasonality of the Company’s
      product offerings, and (vi) the impact of changes in product formulation,
      packaging and advertising.





***Costs
      of Sales***


Costs
      of
      sales include product costs, warehousing costs, inbound and outbound shipping
      costs, and handling and storage costs. Shipping, warehousing and handling costs
      were $6.5 million and $6.7 million for the three month periods ended September
      30, 2006 and 2005, respectively, and $12.2 million for each of the six month
      periods ended September 30, 2006 and 2005.





***Advertising
      and Promotion Costs***


Advertising
      and promotion costs are expensed as incurred. Slotting fees associated with
      products are recognized as a reduction of sales. Under slotting arrangements,
      the retailers allow the Company’s products to be placed on the stores’ shelves
      in exchange for such fees. Direct reimbursements of advertising costs are
      reflected as a reduction of advertising costs in the period earned.





***Stock-based
      Compensation***


The
      Company adopted FASB, Statement No. 123(R), “Share-Based Payment” (“Statement
      No. 123(R)”), effective April 1, 2005, with the grants of restricted stock and
      options to purchase common stock to employees and directors in accordance with
      the provisions of the Company’s 2005 Long-Term
      Equity Incentive Plan (the “Plan”). Statement No. 123(R) requires the Company to
      measure the cost of services to be rendered based on the grant-date fair value
      of the equity award. Compensation expense is to be recognized over the period
      an
      employee is required to provide service in exchange for the award, generally
      referred to as the requisite service period. The Company recorded non-cash
      compensation expense of $233,000 during the three month period ended September
      30, 2006, and net non-cash compensation expense of $224,000 for the six months
      ended September 30, 2006. During the three month period ended June 30, 2006,
      the
      Company recorded a net non-cash compensation credit of $9,000 as a result of
      the
      reversal of compensation charges in the amount of $142,000 associated with
      the
      departure of a former member of management. The Company recorded non-cash
      compensation expense of $110,000 during the three and six month periods ended
      September 30, 2005.





***Income
      Taxes***


Income
      taxes are recorded in accordance with the provisions of FASB Statement No.
      109,
“Accounting for Income Taxes” (“Statement No. 109”). Pursuant to Statement No.
      109, deferred tax assets and liabilities are determined based on the differences
      between the financial reporting and tax bases of assets and liabilities using
      the enacted tax rates and laws that will be in effect when the differences
      are
      expected to reverse. A valuation allowance is established when necessary to
      reduce deferred tax assets to the amounts expected to be realized.





***Derivative
      Instruments***


FASB
      Statement No. 133, “Accounting for Derivative Instruments and Hedging
      Activities” (“Statement No. 133”), requires companies to recognize derivative
      instruments as either assets or liabilities in the balance sheet at fair value.
      The accounting for changes in the fair value of a derivative instrument depends
      on whether it has been designated and qualifies as part of a hedging
      relationship and further, on the type of hedging relationship. For those
      derivative instruments that are designated and qualify as hedging instruments,
      a
      company must designate the hedging instrument, based upon the exposure being
      hedged, as a fair value hedge, a cash flow hedge or a hedge of a net investment
      in a foreign operation.


-8-


The
      Company has designated its derivative financial instruments as cash flow hedges
      because they hedge exposure to variability in expected future cash flows that
      are attributable to interest rate risk. For these hedges, the effective portion
      of the gain or loss on the derivative instrument is reported as a component
      of
      other comprehensive income (loss) and reclassified into earnings in the same
      line item associated with the forecasted transaction in the same period or
      periods during which the hedged transaction affects earnings. Any ineffective
      portion of the gain or loss on the derivative instruments is recorded in results
      of operations immediately.





***Earnings
      Per Share***


Basic
      earnings per share is calculated based on income available to common
      stockholders and the weighted-average number of shares outstanding during the
      reporting period. Diluted earnings per share is calculated based on income
      available to common stockholders and the weighted-average number of common
      and
      potential common shares outstanding during the reporting period. Potential
      common shares, composed of the incremental common shares issuable upon the
      exercise of stock options and unvested restricted shares, are included in the
      earnings per share calculation to the extent that they are
      dilutive.





***Fair
      Value of Financial Instruments***


The
      carrying value of cash, accounts receivable and accounts payable at September
      30, 2006 and March 31, 2006 approximates fair value due to the short-term nature
      of these instruments. The carrying value of long-term debt at September 30,
      2006
      and March 31, 2006 approximates fair value based on interest rates for
      instruments with similar terms and maturities.





***Recently
      Issued Accounting Standards***


In
      November 2004, the FASB issued Statement of Financial Accounting Standards
      (“SFAS”) No. 151, “Inventory Costs” (“Statement No. 151”). Statement No. 151
      amended the guidance in Accounting Research Bulletin No. 43, Chapter 4,
“Inventory Pricing”, and requires the exclusion of certain costs, such as
      abnormal amounts of freight, handling costs and manufacturing overhead, from
      inventories. Additionally, Statement No. 151 requires the allocation of fixed
      production overhead to inventory based on normal capacity of the production
      facilities. The provisions of Statement No. 151 are effective for costs incurred
      during fiscal years beginning after September 15, 2005. The adoption of
      Statement No. 151 did not have a material impact on the Company’s financial
      condition, results of operations or cash flows for the three and six month
      periods ended September 30, 2006.





In
      June
      2006, the FASB issued
      FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes--an
      interpretation of FASB Statement 109” (“FIN 48”) which clarifies the accounting
      for uncertainty in income taxes recognized in a company’s financial statements
      in accordance with FASB Statement 109. FIN 48 is effective for fiscal years
      beginning after December 15, 2006, and prescribes a recognition threshold and
      measurement attributes for the financial statement recognition and measurement
      of a tax position taken or expected to be taken in a tax return. While the
      Company has not completed a comprehensive analysis of FIN 48, the adoption
      of
      FIN 48 is not expected to have a material impact on the Company’s consolidated
      financial position, results of operations or cash flows.





In
      September 2006, the FASB issued SFAS
      No.
      157, “Fair Value Measurements” (“Statement No. 157”) to address inconsistencies
      in the definition and determination of fair value pursuant to generally accepted
      accounting principles (“GAAP”). Statement No. 157 provides a single definition
      of fair value, establishes a framework for measuring fair value in GAAP and
      expands disclosures about fair value measurements in an effort to increase
      comparability related to the recognition of market-based assets and liabilities
      and their impact on earnings. Statement No. 157 is effective for interim
      financial statements issued during the fiscal year beginning after November
      15,
      2007.





Management
      has reviewed and continues to monitor the actions of the various financial
      and
      regulatory reporting agencies and is currently not aware of any pronouncement
      that could have a material impact on our consolidated financial position,
      results of operations or cash flows.








-9-


2.Acquisition
      of Wartner USA B.V.





On
      September 21, 2006, the Company completed the acquisition of the ownership
      interests of Wartner USA B.V. (“Wartner”), the owner and marketer of the
      Wartner® brand of over-the-counter wart treatment products. The Company expects
      that the Wartner brand, which is the #3 brand in the US over-the-counter wart
      treatment category, will enhance the Company’s leadership in the category.
      Additionally, the Company believes that the brand will benefit from a targeted
      advertising and marketing program, as well as the Company’s business model of
      outsourcing manufacturing and the elimination of redundant operations. The
      results from operations of the Wartner® brand were included within the
      Company’s consolidated financial statements as a component of the
      over-the-counter segment commencing September 21, 2006.





The
      purchase price of the ownership interests was approximately $35.1 million,
      including fees and expenses of the acquisition of $216,000 and the assumption
      of
      approximately $5.0 million of contingent payments, with an estimated fair value
      of $3.8 million, owed to the former owner of Wartner through 2011. The
      Company funded the cash acquisition price from operating cash
      flows.





The
      following table summarizes the estimated fair values of the assets acquired
      at
      the date of acquisition. The Company has obtained independent valuations of
      certain tangible and intangible assets; however, the final purchase price will
      not be determined until all preliminary valuations have been finalized.
      Consequently, the allocation of the purchase price is subject to
      refinement.





The
      preliminary fair values assigned to the net assets and liabilities acquired
      consist of the following:





***(In
                thousands)***Inventory
            
            $
            769Intangible
                assets
            
            
            29,600Goodwill
            
            
            4,699Accrued
                liabilities
            
            
            (3,826
            )$
            31,242





The
      amount allocated to intangible assets of $29.6 million includes $17.8 million
      related to the Wartner® brand trademark which the Company estimates to have a
      useful life of 20 years, as well as $11.8 million related to a patent estimated
      to have a useful life of 14 years. Goodwill resulting from this transaction
      was
      $4.7 million. As discussed above, this recorded amount is subject to change
      as
      additional information becomes available; however, it is estimated that such
      amount will be fully deductible for income tax purposes.





The
      following table sets forth the unaudited results of the Company’s operations on
      a pro forma basis as if the acquisition of Wartner had been completed on April
      1, 2005. The pro forma amounts for the three and six month periods ended
      September 30, 2005 include the pro forma results from operations of Dental
      Concepts, LLC, which was acquired in November 2005, as if the acquisition of
      Dental Concepts had been completed on April 1, 2005. The pro forma financial
      information is not necessarily indicative of the operating results that the
      combined entities would have achieved had the acquisition been consummated
      on
      April 1, 2005, nor is it necessarily


-10-


indicative
      of the operating results that may be expected for the year ending March 31,
      2007.





**Three
                Months**
              **Ended
                September 30**
            
            **Six
                Months**
              **Ended
                September*****(In
                thousands, except per share data)***
            
            **2006**
            
            **2005**
            
            **2006**
            
            **2005**Revenues
            
            $
            88,096
            
            $
            80,463
            
            $
            167,943
            
            $
            150,585Income
                before provision for
              income taxes
            
            $
            14,866
            
            $
            12,300
            
            $
            28,143
            
            $
            22,000Net
                income
            
            $
            9,055
            
            $
            7,442
            
            $
            17,140
            
            $
            13,362Basic
                earnings per share
            
            $
            0.18
            
            $
            0.15
            
            $
            0.35
            
            $
            0.27Diluted
                earnings per share
            
            $
            0.18
            
            $
            0.15
            
            $
            0.34
            
            $
            0.27Weighted
                average shares
              outstanding:
              Basic
            
            
            49,451
            
            
            48,791
            
            
            49,389
            
            
            48,757Diluted
            
            
            49,994
            
            
            49,949
            
            
            49,991
            
            
            49,932








**3.**
            **Accounts
                Receivable**





Accounts
      receivable consist of the following (in thousands):


**September
                30,**
              **2006**
            ****
            **March
                31,**
              **2006**Accounts
                receivable
            
            $
            37,539
            
            $
            40,140Other
                receivables
            
            
            1,553
            
            
            1,87039,092
            
            
            42,010Less
                allowances for discounts, returns and
              uncollectible
                accounts
            
            
            (1,645
            )
            
            (1,968
            )$
            37,447
            
            $
            40,042








**4.**
            **Inventories**





Inventories
      consist of the following (in thousands):


**September
                30,**
              **2006**
            ****
            **March
                31,**
              **2006**Packaging
                and raw materials
            
            $
            2,842
            
            $
            3,278Finished
                goods
            
            
            26,430
            
            
            30,563$
            29,272
            
            $
            33,841





Inventories
      are shown net of allowances for obsolete and slow moving inventory of $1.5
      million and $1.0 million at September 30, 2006 and March 31, 2006,
      respectively.





-11-


5.Property
      and Equipment




Property
      and equipment consist of the following (in thousands):


**September
                30,**
              **2006**
            
            **March
                31,**
              **2006**Machinery
            
            $
            3,942
            
            $
            3,722Computer
                equipment
            
            
            852
            
            
            987Furniture
                and fixtures
            
            
            267
            
            
            303Leasehold
                improvements
            
            
            340
            
            
            3405,401
            
            
            5,352Accumulated
                depreciation
            
            
            (3,874
            )
            
            (3,699
            )$
            1,527
            
            $
            1,653








6.Goodwill





A
      reconciliation of the activity affecting goodwill by operating segment is as
      follows (in thousands):





**Over-the-Counter**
              **Drug**
            ****
            **Household**
              **Cleaning**
            ****
            **Personal**
              **Care**
            ****
            **Consolidated**Balance
                - March 31, 2006
            
            $
            222,635
            
            $
            72,549
            
            $
            2,751
            
            $
            297,935Additions
            
            
            4,851
            
            
            --
            
            
            --
            
            
            4,851Balance
                - September 30, 2006
            
            $
            227,486
            
            $
            72,549
            
            $
            2,751
            
            $
            302,786





At
      September 30, 2006, approximately $33.1 million of the Company’s goodwill is
      deductible for income tax purposes.





7.Intangible
      Assets





A
      reconciliation of the activity affecting intangible assets is as follows (in
      thousands):





**Indefinite**
              **Lived**
              **Intangibles**
            ****
            **Finite**
              **Lived**
              **Intangibles**
            ****
            **Total*****Carrying
                Amounts***Balance
                - March 31, 2006
            
            $
            544,963
            
            $
            110,066
            
            $
            655,029Additions
            
            
            --
            
            
            29,600
            
            
            29,600Balance
                - September 30, 2006
            
            $
            544,963
            
            $
            139,666
            
            $
            684,629***Accumulated
                Amortization***Balance
                - March 31, 2006
            
            $
            --
            
            $
            17,832
            
            $
            17,832Amortization
            
            
            --
            
            
            4,386
            
            
            4,386Balance
                - September 30, 2006
            
            $
            --
            
            $
            22,218
            
            $
            22,218





-12-


At
      September 30, 2006, intangible assets are expected to be amortized over a period
      of five to 30 years as follows (in thousands):





**Year
                Ending September 30**2007
            
            $
            10,5072008
            
            
            10,5072009
            
            
            10,5022010
            
            
            9,0862011
            
            
            9,071Thereafter
            
            
            67,775$
            117,448








8.Other
      Accrued Liabilities





Other
      accrued liabilities consist of the following (in thousands):





**September
                30,**
              **2006**
            ****
            **March
                31,**
              **2006**Accrued
                marketing costs
            
            $
            4,989
            
            $
            2,513Accrued
                payroll
            
            
            1,835
            
            
            813Accrued
                commissions
            
            
            275
            
            
            248Other
            
            
            1,615
            
            
            1,008$
            8,714
            
            $
            4,582








-13-


9.Long-Term
      Debt





Long-term
                debt consists of the following (in thousands):**September
                30,**
              **2006**
            ****
            **March
                31,**
              **2006**Senior
                revolving credit facility (“Revolving Credit Facility”), which expires on
                April 6, 2009 and is available for maximum borrowings of up to $60.0
                million. The Revolving Credit Facility bears interest at the Company’s
                option at either the prime rate plus a variable margin or LIBOR plus
                a
                variable margin. The variable margins range from 0.75% to 2.50% and
                at
                September 30, 2006, the interest rate on the Revolving Credit Facility
                was
                9.5% per annum. The Company is also required to pay a variable commitment
                fee on the unused portion of the Revolving Credit Facility. At September
                30, 2006, the commitment fee was 0.50% of the unused line. The Revolving
                Credit Facility is collateralized by substantially all of the Company’s
                assets.
            
            $
            --
            
            $
            7,000Senior
                secured term loan facility (“Tranche B Term Loan Facility”) that bears
                interest at the Company’s option at either the prime rate plus a margin of
                1.25% or LIBOR plus a margin of 2.25%. At September 30, 2006, the
                weighted
                average applicable interest rate on the Tranche B Term Loan Facility
                was
                7.26%. Principal payments of $933,000 and interest are payable quarterly.
                In February 2005, the Tranche B Term Loan Facility was amended to
                increase
                the additional amount available thereunder by $50.0 million to $200.0
                million, all of which is available at September 30, 2006. Current
                amounts
                outstanding under the Tranche B Term Loan Facility mature on April
                6,
                2011, while amounts borrowed pursuant to the amendment will mature
                on
                October 6, 2011. The Tranche B Term Loan Facility is collateralized
                by
                substantially all of the Company’s assets.
            
            
            363,765
            
            
            365,630Senior
                Subordinated Notes (“Senior Notes”) that bear interest at 9.25% which is
                payable on April 15thand October 15thof
                each year. The Senior Notes mature on April 15, 2012; however, the
                Company
                may redeem some or all of the Senior Notes on or prior to April 15,
                2008
                at a redemption price equal to 100%, plus a make-whole premium, and
                after
                April 15, 2008 at redemption prices set forth in the indenture governing
                the Senior Notes. The Senior Notes are unconditionally guaranteed
                by
                Prestige Brands International, LLC (“Prestige International”), a
                wholly-owned subsidiary of Prestige Brands Holdings, Inc., and Prestige
                International’s wholly-owned subsidiaries other than Prestige Brands,
                Inc., the issuer. Each of these guarantees is joint and several.
                There are
                no significant restrictions on the ability of any of the guarantors
                to
                obtain funds from their subsidiaries.
            
            
            126,000
            
            
            126,000489,765
            
            
            498,630Current
                portion of long-term debt
            
            
            (3,730
            )
            
            (3,730
            )$
            486,035
            
            $
            494,900





-14-


The
      Revolving Credit Facility and the Tranche B Term Loan Facility (together the
      “Senior Credit Facility”) contain various financial covenants, including
      provisions that require the Company to maintain certain leverage ratios,
      interest coverage ratios and fixed charge coverage ratios. The Senior Credit
      Facility and the Senior Notes also contain provisions that restrict the Company
      from undertaking specified corporate actions, such as asset dispositions,
      acquisitions, dividend payments, repurchase of common shares outstanding,
      changes of control, incurrence of indebtedness, creation of liens, making of
      loans and transactions with affiliates. Additionally, the Senior Credit Facility
      and the Senior Notes contain cross-default provisions whereby a default pursuant
      to the terms and conditions of either indebtedness will cause a default on
      the
      remaining indebtedness. The Company was in compliance with its applicable
      financial and restrictive covenants under the Senior Credit Facility and the
      indenture governing the Senior Notes at September 30, 2006.





Future
      principal payments required in accordance with the terms of the Senior Credit
      Facility and the Senior Notes are as follows (in thousands):





**Year
                Ending September 30,**2007
            
            $
            3,7302008
            
            
            3,7302009
            
            
            3,7302010
            
            
            3,7302011
            
            
            348,845Thereafter
            
            
            126,000$
            489,765





In
      an
      effort to mitigate the impact of changing interest rates, the Company entered
      into interest rate cap agreements with various financial institutions. In June
      2004, the Company purchased a 5% interest rate cap with a notional amount of
      $20.0 million which expired in June 2006. In March 2005, the Company purchased
      interest rate cap agreements with a total notional amount of $180.0 million
      and
      cap rates ranging from 3.25% to 3.75%. On May 31, 2006, an interest rate cap
      agreement with a notional amount of $50.0 million and a 3.25% cap rate expired.
      The remaining agreements terminate on May 30, 2007 and 2008 as to notional
      amounts of $80.0 million and $50.0 million, respectively. The Company is
      accounting for the interest rate cap agreements as cash flow hedges. The fair
      value of the interest rate cap agreements, which is included in other long-term
      assets, was $2.2 million and $3.3 million at September 30, 2006
      and
      March 31, 2006, respectively .








10.Stockholders’
      Equity





The
      Company is authorized to issue 250.0 million shares of common stock, $0.01
      par
      value per share, and 5.0 million shares of preferred stock, $0.01 par value
      per
      share. The Board of Directors may direct the issuance of the undesignated
      preferred stock in one or more series and determine preferences, privileges
      and
      restrictions thereof.





Each
      share of common stock has the right to one vote on all matters submitted to
      a
      vote of stockholders. The holders of common stock are also entitled to receive
      dividends whenever funds are legally available and when declared by the Board
      of
      Directors, subject to prior rights of holders of all classes of stock
      outstanding having priority rights as to dividends. No dividends have been
      declared or paid on the Company’s common stock through September 30,
      2006.








-15-


11.Earnings
      Per Share





The
      following table sets forth the computation of basic and diluted earnings per
      share (in thousands, except per share amounts):








**Three
                Months Ended**
              **September
                30**
            
            **Six
                Months Ended**
              **September
                30******
            
            **2006**
            
            **2005**
            
            **2006**
            
            **2005****Numerator**Net
                income
            
            $
            8,784
            
            $
            7,374
            
            $
            17,040
            
            $
            13,303**Denominator**Denominator
                for basic earnings
              per
                share - weighted average
              shares
            
            
            49,451
            
            
            48,791
            
            
            49,389
            
            
            48,757Dilutive
                effect of unvested
              restricted
                common stock
            
            
            543
            
            
            1,158
            
            
            602
            
            
            1,175Denominator
                for diluted earnings
              per
                share
            
            
            49,994
            
            
            49,949
            
            
            49,991
            
            
            49,932**Earnings
                per Common Share:**Basic
            
            $
            0.18
            
            $
            0.15
            
            $
            0.35
            
            $
            0.27Diluted
            
            $
            0.18
            
            $
            0.15
            
            $
            0.34
            
            $
            0.27





At
      September 30, 2006, 522,000 shares of restricted stock issued to officers,
      directors and employees were unvested, and were therefore, excluded from the
      calculation of basic earnings per share for the period ended September 30,
      2006.
      However, such shares are included in the calculation of diluted earnings per
      share. An additional 278,000 shares of restricted stock granted to officers
      and
      employees have been excluded from the calculation of both basic and diluted
      earnings per share since vesting of such shares is subject to contingencies
      which have not been met as of September 30, 2006. At September 30, 2005, 1.1
      million shares of restricted stock issued to officers, were unvested and were
      therefore, excluded from the calculation of basic earnings per share for the
      period ended September 30, 2005.








**12.**
            **Stock-Based
                Compensation**





In
      connection with the Company’s February 2005 initial public offering, the Board
      of Directors adopted the Plan which provides for the grant, up to a maximum
      of
      5.0 million shares, of stock options, restricted stock, restricted stock units,
      deferred stock units and other equity-based awards. Directors, officers and
      other employees of the Company and its subsidiaries, as well as others
      performing services for the Company, are eligible for grants under the Plan.
      The
      Company believes that such awards better align the interests of its employees
      with those of its stockholders.





**Restricted
      Shares**


Restricted
      shares granted under the Plan generally vest in 3 to 5 years, contingent on
      attainment of Company performance goals, including both revenue and earnings
      per
      share growth targets. Certain restricted share awards provide for accelerated
      vesting if there is a change of control. The fair value of nonvested restricted
      shares is determined as the closing price of the Company’s common stock on the
      day preceding the grant date. During the three month period ended September
      30,
      2006, the Company granted awards aggregating 156,500 shares of restricted stock
      with an estimated fair value of $1.3 million.


-16-


**Performance
      Shares**


On
      the
      vesting date, the recipient of performance shares will receive the
      difference between the closing price of the Company’s common stock on such date
      and the grant date price, times the number of performance shares underlying
      the
      grant. These awards may be settled in cash, common stock or some combination
      thereof at the option of the Company. During the three month period ended
      September 30, 2006, the Company granted awards aggregating 16,100 performance
      shares with an estimated fair value of $60,000.





**Options**


The
      Plan
      provides that the exercise price of the option granted shall be no less than
      the
      fair market value of the Company’s common stock on the date the option is
      granted. Options granted have a term of no greater than 10 years from the date
      of grant and vest in accordance with a schedule determined at the time the
      option is granted, generally 3 to 5 years. Certain option awards provide for
      accelerated vesting if there is a change in control. There were no option awards
      during the three and six month periods ended September 30, 2006.





The
      fair
      value of option and performance share awards is estimated on the date of grant
      using the Black-Scholes Option Pricing Model. As of September 30, 2006, there
      was approximately $1.8 million of total unrecognized compensation cost related
      to nonvested share-based compensation arrangements under the Plan, based on
      management’s estimate of the shares that will ultimately vest. The Company
      expects to recognize such costs over the next 4.0 years. However, the restricted
      shares vest upon the attainment of Company performance goals; if such goals
      are
      not met, no compensation cost would ultimately be recognized and any previously
      recognized compensation cost would be reversed. At September 30, 2006, there
      were 4.7 million shares available for issuance under the Plan.






13.Income
      Taxes





Income
      taxes are recorded in the Company’s quarterly financial statements based on the
      Company’s estimated annual effective income tax rate. The effective rates used
      in the calculation of income taxes were 39.1% for three and six month periods
      ended September 30, 2006, and 39.3% for the three and six month periods ended
      September 30, 2005.








14.Commitments
      and Contingencies


The
        Company and certain of its officers and directors are defendants in a
        consolidated putative securities class action lawsuit filed in the United
        States
        District Court for the Southern District of New York (the “Consolidated
        Action”). The first of the six consolidated cases was filed on August 3, 2005.
        Plaintiffs purport to represent a class of stockholders of the Company who
        purchased shares between February 9, 2005 through November 15, 2005. Plaintiffs
        also name as defendants the underwriters in the Company’s initial public
        offering and a private equity fund that was a selling stockholder in the
        offering. The District Court has appointed a Lead Plaintiff. On December
        23,
        2005, the Lead Plaintiff filed a Consolidated Class Action Complaint, which
        asserted claims under Sections 11, 12(a)(2) and 15 of the Securities Act
        of 1933
        and Sections 10(b), 20(a), and 20A of the Securities Exchange Act of 1934.
        The
        Lead Plaintiff generally alleged that the Company issued a series of materially
        false and misleading statements in connection with its initial public offering
        and thereafter in regard to the following areas: the accounting issues described
        in the Company’s press release issued on or about November 15, 2005; and the
        alleged failure to disclose that demand for certain of the Company’s products
        was declining and that the Company was planning to withdraw several products
        from the market. Plaintiffs seek an unspecified amount of damages. The Company
        filed a motion to dismiss the Consolidated Class Action Complaint in February
        2006. On July 10, 2006, the Court dismissed all claims against the Company
        and
        the individual defendants arising under the Securities Exchange Act of 1934.
        The
        Company’s management believes the remaining claims are legally deficient and
        subject to meritorious defenses.  The Company intends to vigorously pursue
        its defenses; however, the Company cannot reasonably estimate the potential
        range of loss, if any.


-17-


On
        September 6, 2005, another putative securities class action lawsuit
        substantially similar to the initially-filed complaints in the Consolidated
        Action described above was filed against the same defendants in the Circuit
        Court of Cook County, Illinois (the “Chicago Action”). In light of the
        first-filed Consolidated Action, proceedings in the Chicago Action were stayed
        until a ruling on defendants’ anticipated motions to dismiss the consolidated
        complaint in the Consolidated Action. Subsequent to the Court's decision
        on the
        motions to dismiss in the Consolidated Action, on August 11, 2006, the
        Plaintiffs in the Chicago Action agreed to dismiss the Chicago Action.
 
 On
        May
        23, 2006, Similasan Corporation filed a lawsuit against the Company in the
        United States District Court for the District of Colorado in which Similasan
        alleged false designation of origin, trademark and trade dress infringement,
        and
        deceptive trade practices by the Company related to *Murine* for
        Allergy Eye Relief, *Murine* for
        Tired Eye Relief and *Murine* for
        Earache Relief, as applicable. Similasan has requested injunctive relief,
        an
        accounting of profits and damages and litigation costs and attorneys’ fees. The
        Company has filed an answer to the complaint with a potentially dispositive
        motion. In addition to the lawsuit filed by Similasan in the U.S. District
        Court
        for the District of Colorado, the Company also received a cease and desist
        letter from Swiss legal counsel to Similasan and its parent company, Similasan
        AG, a Swiss company. In the cease and desist letter, Similasan and Similasan
        AG
        have alleged a breach of the Secrecy Agreement executed by the Company and
        demanded that the Company cease and desist from (i) using confidential
        information covered by the Secrecy Agreement; and (ii) manufacturing,
        distributing, marketing or selling certain of its homeopathic products. The
        complaint in the Colorado action has now been amended to include allegations
        relating to the breach of confidentiality’ and the Company has filed an answer
        responsive thereto. The Company’s management believes the allegations to be
        without merit and intends to vigorously pursue its defenses; however, the
        Company cannot reasonably estimate the potential range of loss, if
        any.
 
 On
        September 28, 2006, OraSure Technologies, Inc. moved in the Supreme Court
        of the State of New York for a preliminary injunction prohibiting the
        Company from selling cryogenic wart removal products under the Wartner® brand,
        which the Company acquired on September 21, 2006. OraSure Technologies is
        a
        supplier to the Company for the Company’s Compound W Freeze Off® business. The
        distribution agreement in place calls for mediation of contract disputes,
        followed by arbitration, if necessary. The contract in question is of five
        years
        duration ending in December 2007. On October 30, 2006, the Court denied OraSure
        Technologies’ motion for a preliminary injunction.  To the extent the
        contract dispute is not resolved through mediation, the Company intends to
        seek
        resolution of the matter through arbitration.
  The
        Company is also involved from time to time in other routine legal matters
        and
        other claims incidental to its business. The Company reviews outstanding
        claims
        and proceedings internally and with external counsel as necessary to assess
        probability of loss and for the ability to estimate loss. These assessments
        are
        re-evaluated each quarter and as new information becomes available to determine
        whether a reserve should be established or if any existing reserve should
        be
        adjusted. The actual cost of resolving a claim or proceeding ultimately may
        be
        substantially different than the amount of the recorded reserve. In addition,
        because it is not permissible under generally accepted accounting principles
        to
        establish a litigation reserve until the loss is both probable and estimable,
        in
        some cases there may be insufficient time to establish a reserve prior to
        the
        actual incurrence of the loss (upon verdict and judgment at trial, for example,
        or in the case of a quickly negotiated settlement). The Company believes
        the
        resolution of routine matters and other incidental claims, taking into account
        reserves and insurance, will not have a material adverse effect on its business,
        financial condition or results from operations.





**Lease
      Commitments**


The
      Company has operating leases for office facilities and equipment in New York,
      New Jersey and Wyoming, which expire at various dates through July
      2009.





-18-


The
      following summarizes future minimum lease payments for the Company’s operating
      leases (in thousands):




**Year
                Ending September 30**
            ****
            **Facilities**
            ****
            **Equipment**
            ****
            **Total**2007
            
            $
            535
            
            $
            121
            
            $
            6562008
            
            
            499
            
            
            120
            
            
            6192009
            
            
            324
            
            
            96
            
            
            4202010
            
            
            --
            
            
            71
            
            
            71$
            1,358
            
            $
            408
            
            $
            1,766





15.Concentrations
      of Risk





The
      Company’s sales are concentrated in the areas of over-the-counter pharmaceutical
      products, personal care products and household cleaning products. The Company
      sells its products to mass merchandisers, food and drug accounts, and dollar
      and
      club stores. During the three and six month periods ended September 30, 2006
      approximately 61.1% and 60.2%, respectively, of the Company’s total sales were
      derived from its four major brands, while during the three and six month periods
      ended September 30, 2005, approximately 65.0% and 63.4%, respectively, of the
      Company’s total sales were derived from these four major brands. During the
      three month periods ended September 30, 2006 and 2005, approximately 24.1%
      and
      24.6%, respectively, of the Company’s sales were made to one customer, while
      during the three and six month periods ended September 30, 2005, 22.3% and
      23.2%
      of sales were to this customer. At September 30, 2006, approximately 19.6%
      of
      accounts receivable were owed by the same customer.





The
      Company manages product distribution in the continental United States through
      a
      main distribution center in St. Louis, Missouri. A serious disruption, such
      as a
      flood or fire, to the main distribution center could damage the Company’s
      inventories and materially impair the Company’s ability to distribute its
      products to customers in a timely manner or at a reasonable cost. The Company
      could incur significantly higher costs and experience longer lead times
      associated with the distribution of its products to its customers during the
      time that it takes the Company to reopen or replace its distribution center.
      As
      a result, any such disruption could have a material adverse effect on the
      Company’s sales and profitability.





The
      Company has relationships with over 40 third-party manufacturers. Of those,
      the
      top 10 manufacturers produced items that accounted for approximately 78% of
      the
      Company’s gross sales for the six month period ended September 30, 2006. The
      Company does not have long-term contracts with 3 of these manufacturers and
      certain manufacturers of various smaller brands, which collectively, represent
      approximately 32% of the Company’s gross sales. The lack of manufacturing
      agreements for these products exposes the Company to the risk that a
      manufacturer could stop producing the Company’s products at any time, for any
      reason or fail to provide the Company with the level of products the Company
      needs to meet its customers’ demands. Without
      adequate supplies of merchandise to sell to the Company’s customers, sales would
      decrease materially and the Company’s business would suffer.








16.Business
      Segments





Segment
      information has been prepared in accordance with FASB Statement No. 131,
“Disclosures about Segments of an Enterprise and Related Information.” The
      Company’s operating and reportable segments consist of (i) Over-the-Counter
      Drugs, (ii) Personal Care and (iii) Household Cleaning.





There
      were no inter-segment sales or transfers during the three and six month periods
      ended September 30, 2006 and 2005. The Company evaluates the performance of
      its
      operating segments and allocates resources to them based primarily on
      contribution margin. The table below summarizes information about the Company’s
      operating


-19-


and
      reportable segments (in thousands).





**Three
                Months Ended September 30, 2006**
            ********
            ****
            **Over-the-Counter**
              **Drug**
            ****
            **Household**
              **Cleaning**
            ****
            **Personal**
              **Care**
            ****
            **Consolidated**Net
                sales
            
            $
            46,255
            
            $
            30,732
            
            $
            7,046
            
            $
            84,033Other
                revenues
            
            
            --
            
            
            518
            
            
            --
            
            
            518Total
                revenues
            
            
            46,255
            
            
            31,250
            
            
            7,046
            
            
            84,551Cost
                of sales
            
            
            18,001
            
            
            18,941
            
            
            4,317
            
            
            41,259Gross
                profit
            
            
            28,254
            
            
            12,309
            
            
            2,729
            
            
            43,292Advertising
                and promotion
            
            
            7,058
            
            
            2,020
            
            
            377
            
            
            9,455Contribution
                margin
            
            $
            21,196
            
            $
            10,289
            
            $
            2,352
            
            
            33,837Other
                operating expenses
            
            
            
            
            
            
            
            
            
            
            
            9,671Operating
                income
            
            
            
            
            
            
            
            
            
            
            
            24,166Other
                (income) expense
            
            
            
            
            
            
            
            
            
            
            
            9,743Provision
                for income taxes
            
            
            
            
            
            
            
            
            
            
            
            5,639Net
                income
            
            
            
            
            
            
            
            
            
            
            $
            8,784








****
            ****
            **Six
                Months Ended September 30, 2006**
            ********
            ****
            **Over-the-Counter**
              **Drug**
            ****
            **Household**
              **Cleaning**
            ****
            **Personal**
              **Care**
            ****
            **Consolidated**Net
                sales
            
            $
            85,853
            
            $
            60,470
            
            $
            13,277
            
            $
            159,600Other
                revenues
            
            
            --
            
            
            874
            
            
            --
            
            
            874Total
                revenues
            
            
            85,853
            
            
            61,344
            
            
            13,277
            
            
            160,474Cost
                of sales
            
            
            32,398
            
            
            37,095
            
            
            8,091
            
            
            77,584Gross
                profit
            
            
            53,455
            
            
            24,249
            
            
            5,186
            
            
            82,890Advertising
                and promotion
            
            
            12,483
            
            
            3,710
            
            
            664
            
            
            16,857Contribution
                margin
            
            $
            40,972
            
            $
            20,539
            
            $
            4,522
            
            
            66,033Other
                operating expenses
            
            
            
            
            
            
            
            
            
            
            
            18,518Operating
                income
            
            
            
            
            
            
            
            
            
            
            
            47,515Other
                (income) expense
            
            
            
            
            
            
            
            
            
            
            
            19,535Provision
                for income taxes
            
            
            
            
            
            
            
            
            
            
            
            10,940Net
                income
            
            
            
            
            
            
            
            
            
            
            $
            17,040





-20-





****
            ****
            **Three
                Months Ended September 30, 2005**
            ********
            ****
            **Over-the-Counter**
              **Drug**
            ****
            **Household**
              **Cleaning**
            ****
            **Personal**
              **Care**
            ****
            **Consolidated**Net
                sales
            
            $
            40,759
            
            $
            25,229
            
            $
            7,332
            
            $
            73,320Other
                revenues
            
            
            --
            
            
            25
            
            
            --
            
            
            25Total
                revenues
            
            
            40,759
            
            
            25,254
            
            
            7,332
            
            
            73,345Cost
                of sales
            
            
            15,558
            
            
            15,535
            
            
            4,456
            
            
            35,549Gross
                profit
            
            
            25,201
            
            
            9,719
            
            
            2,876
            
            
            37,796Advertising
                and promotion
            
            
            7,127
            
            
            1,740
            
            
            1,350
            
            
            10,217Contribution
                margin
            
            $
            18,074
            
            $
            7,979
            
            $
            1,526
            
            
            27,579Other
                operating expenses
            
            
            
            
            
            
            
            
            
            
            
            6,752Operating
                income
            
            
            
            
            
            
            
            
            
            
            
            20,827Other
                (income) expense
            
            
            
            
            
            
            
            
            
            
            
            8,671Provision
                for income taxes
            
            
            
            
            
            
            
            
            
            
            
            4,782Net
                income
            
            
            
            
            
            
            
            
            
            
            $
            7,374








**Six
                Months Ended September 30, 2005**
            ********
            ****
            **Over-the-Counter**
              **Drug**
            ****
            **Household**
              **Cleaning**
            ****
            **Personal**
              **Care**
            ****
            **Consolidated**Net
                sales
            
            $
            74,148
            
            $
            48,012
            
            $
            14,588
            
            $
            136,748Other
                revenues
            
            
            
            
            
            50
            
            
            --
            
            
            50Total
                revenues
            
            
            74,148
            
            
            48,062
            
            
            14,588
            
            
            136,798Cost
                of sales
            
            
            27,223
            
            
            28,922
            
            
            8,353
            
            
            64,498Gross
                profit
            
            
            46,925
            
            
            19,140
            
            
            6,235
            
            
            72,300Advertising
                and promotion
            
            
            13,266
            
            
            3,510
            
            
            2,146
            
            
            18,922Contribution
                margin
            
            $
            33,659
            
            $
            15,630
            
            $
            4,089
            
            
            53,378Other
                operating expenses
            
            
            
            
            
            
            
            
            
            
            
            14,294Operating
                income
            
            
            
            
            
            
            
            
            
            
            
            39,084Other
                (income) expense
            
            
            
            
            
            
            
            
            
            
            
            17,181Provision
                for income taxes
            
            
            
            
            
            
            
            
            
            
            
            8,600Net
                income
            
            
            
            
            
            
            
            
            
            
            $
            13,303








During
      the three month periods ended September 30, 2006 and 2005, approximately 96.4%
      and 97.6%, respectively, of the Company’s sales were made to customers in the
      United States and Canada, while during the six month periods ended September
      30,
      2006 and 2005, approximately 96.2% and 97.7%, respectively, of sales were made
      to customers in the United States and Canada. At September 30, 2006 and March
      31, 2006, substantially all of the Company’s long-term assets were located in
      the United States of America and have been


-21-


allocated
      to the operating segments as follows:





**Over-the-Counter**
              **Drug**
            ****
            **Household**
              **Cleaning**
            ****
            **Personal**
              **Care**
            ****
            **Consolidated**Goodwill
            
            $
            227,486
            
            $
            72,549
            
            $
            2,751
            
            $
            302,786Intangible
                assetsIndefinite
                lived
            
            
            374,070
            
            
            170,893
            
            
            --
            
            
            544,963Finite
                lived
            
            
            98,566
            
            
            27
            
            
            18,855
            
            
            117,448472,636
            
            
            170,920
            
            
            18,855
            
            
            662,411$
            700,122
            
            $
            243,469
            
            $
            21,606
            
            $
            965,197































-22-
































**Prestige
      Brands International, LLC**





**Unaudited
      Financial Statements**





**September
      30, 2006**


















































-23-


**Prestige
      Brands International, LLC**


**Consolidated
      Statements of Operations**


***(Unaudited)***











**Three
                Months**
              **Ended
                September 30**
            
            **Six
                Months**
              **Ended
                September 30*****(In
                thousands)***
            
            **2006**
            
            **2005**
            
            **2006**
            
            **2004****Revenues**Net
                sales
            
            $
            84,033
            
            $
            73,320
            
            $
            159,600
            
            $
            136,748Other
                revenues
            
            
            518
            
            
            25
            
            
            874
            
            
            50Total
                revenues
            
            
            84,551
            
            
            73,345
            
            
            160,474
            
            
            136,798**Cost
                of Sales**Costs
                of sales
            
            
            41,259
            
            
            35,549
            
            
            77,584
            
            
            64,498Gross
                profit
            
            
            43,292
            
            
            37,796
            
            
            82,890
            
            
            72,300**Operating
                Expenses**Advertising
                and promotion
            
            
            9,455
            
            
            10,217
            
            
            16,857
            
            
            18,922General
                and administrative
            
            
            7,259
            
            
            4,117
            
            
            13,693
            
            
            9,023Depreciation
            
            
            219
            
            
            487
            
            
            439
            
            
            975Amortization
                of intangible assets
            
            
            2,193
            
            
            2,148
            
            
            4,386
            
            
            4,296Total
                operating expenses
            
            
            19,126
            
            
            16,969
            
            
            35,375
            
            
            33,216Operating
                income
            
            
            24,166
            
            
            20,827
            
            
            47,515
            
            
            39,084**Other
                income (expense)**Interest
                income
            
            
            403
            
            
            226
            
            
            588
            
            
            307Interest
                expense
            
            
            (10,146
            )
            
            (8,897
            )
            
            (20,123
            )
            
            (17,488
            )Total
                other income (expense)
            
            
            (9,743
            )
            
            (8,671
            )
            
            (19,535
            )
            
            (17,181
            )Income
                before provision for
              income taxes
            
            
            14,423
            
            
            12,156
            
            
            27,980
            
            
            21,903Provision
                for income taxes
            
            
            5,639
            
            
            4,782
            
            
            10,940
            
            
            8,600Net
                income
            
            $
            8,784
            
            
            7,374
            
            $
            17,040
            
            
            13,303





*See
      accompanying notes.*


-24-


**Prestige
      Brands International, LLC**


**Consolidated
      Balance Sheets**


*(Unaudited*)








***(In
      thousands)***


****
            
            **September
                30, 2006**
            
            **March
                31, 2006****Assets**Current
                assetsCash
                and cash equivalents
            
            $
            10,508
            
            $
            8,200Accounts
                receivable
            
            
            37,447
            
            
            40,042Inventories
            
            
            29,272
            
            
            33,841Deferred
                income tax assets
            
            
            2,405
            
            
            3,227Prepaid
                expenses and other current assets
            
            
            1,748
            
            
            701Total
                current assets
            
            
            81,380
            
            
            86,011Property
                and equipment
            
            
            1,527
            
            
            1,653Goodwill
            
            
            302,786
            
            
            297,935Intangible
                assets
            
            
            662,411
            
            
            637,197Other
                long-term assets
            
            
            13,694
            
            
            15,849Total
                Assets
            
            $
            1,061,798
            
            $
            1,038,645**Liabilities
                and Members’ Equity**Current
                liabilitiesAccounts
                payable
            
            $
            22,584
            
            $
            18,065Accrued
                interest payable
            
            
            7,773
            
            
            7,563Income
                taxes payable
            
            
            64
            
            
            1,795Other
                accrued liabilities
            
            
            8,714
            
            
            4,582Current
                portion of long-term debt
            
            
            3,730
            
            
            3,730Total
                current liabilities
            
            
            42,865
            
            
            35,735Long-term
                debt
            
            
            486,035
            
            
            494,900Other
                accrued liabilities
            
            
            2,801
            
            
            --Deferred
                income tax liabilities
            
            
            103,954
            
            
            98,603Total
                Liabilities
            
            
            635,655
            
            
            629,238**Commitments
                and Contingencies - Note 12****Members’
                Equity**Contributed
                capital - Prestige Holdings
            
            
            370,790
            
            
            370,572Accumulated
                other comprehensive income
            
            
            587
            
            
            1,109Retained
                earnings
            
            
            54,766
            
            
            37,726Total
                members’ equity
            
            
            426,143
            
            
            409,407Total
                liabilities and members’ equity
            
            $
            1,061,798
            
            $
            1,038,645





*See
      accompanying notes.*





-25-


**Prestige
      Brands International, LLC**


**Consolidated
      Statement of Changes in Members’ Equity**


**and
      Comprehensive Income**


**Six
      Months Ended September 30, 2006**


***(Unaudited)***











**Contributed**
              **Capital**
              **Prestige**
              **Holdings**
            
            **Accumulated**
              **Other**
              **Comprehensive**
              **Income**
            
            **Retained**
              **Earnings**
            
            **Totals*****(In
                thousands)***Balances
                - March 31, 2006
            
            $
            370,572
            
            $
            1,109
            
            $
            37,726
            
            $
            409,407Stock-based
                compensation
            
            
            224
            
            
            
            
            
            
            
            
            224Distribution
                to Prestige Holdings for the
              purchase of common stock for treasury
            
            
            (6
            )
            
            
            
            
            
            
            
            (6
            )Components
                of comprehensive incomeNet
                income
            
            
            
            
            
            
            
            
            17,040
            
            
            17,040Amortization
                of interest rate caps
            
            
            
            
            
            535
            
            
            
            
            
            535Unrealized
                loss on interest rate caps,
              net of tax benefit of $423
            
            
            
            
            
            (1,057
            )
            
            
            
            
            (1,057
            )Total
                comprehensive income
            
            
            
            
            
            
            
            
            
            
            
            16,518Balances
                - September 30, 2006
            
            $
            370,790
            
            $
            587
            
            $
            54,766
            
            $
            426,143





*See
      accompanying notes.*


-26-


**Prestige
      Brands International, LLC**


**Consolidated
      Statements of Cash Flows**


***(Unaudited**)*








****
            **Six
                Months Ended September 30**
            *******(In
                thousands)***
            ****
            **2006**
            ****
            **2005**
            ******Operating
                Activities**Net
                income
            
            $
            17,040
            
            $
            13,303Adjustments
                to reconcile net income to net cash provided by operating
                activities:Depreciation
                and amortization
            
            
            4,825
            
            
            5,271Deferred
                income taxes
            
            
            6,197
            
            
            7,961Amortization
                of deferred financing costs
            
            
            1,609
            
            
            1,136Stock-based
                compensation
            
            
            224
            
            
            110Changes
                in operating assets and liabilitiesAccounts
                receivable
            
            
            2,595
            
            
            3,366Inventories
            
            
            5,202
            
            
            (8,054
            )Prepaid
                expenses and other current assets
            
            
            (1,047
            )
            
            (104
            )Accounts
                payable
            
            
            4,494
            
            
            1,020Income
                taxes payable
            
            
            (1,731
            )Accrued
                liabilities
            
            
            3,326
            
            
            521Net
                cash provided by operating activities
            
            
            42,734
            
            
            24,530**Investing
                Activities**Purchases
                of equipment
            
            
            (313
            )
            
            (297
            )Purchase
                of business
            
            
            (31,242
            )
            
            --Net
                cash used for investing activities
            
            
            (31,555
            )
            
            (297
            )**Financing
                Activities**Repayment
                of long-term debt
            
            
            (8,865
            )
            
            (1,865
            )Distribution
                to Prestige Holdings for the purchase of common stock for
                treasury
            
            
            (6
            )
            
            (21
            )Payment
                of deferred financing costs
            
            
            --
            
            
            (33
            )Additional
                costs associated with initial public offering
            
            
            --
            
            
            (63
            )Net
                cash used for financing activities
            
            
            (8,871
            )
            
            (1,982
            )Increase
                in cash
            
            
            2,308
            
            
            22,251Cash
                - beginning of period
            
            
            8,200
            
            
            5,334Cash
                - end of period
            
            $
            10,508
            
            $
            27,585**Supplemental
                Cash Flow Information**Fair
                value of assets acquired
            
            $
            35,068
            
            $
            --Fair
                value of liabilities assumed
            
            
            (3,826
            )
            
            --Cash
                paid to purchase business
            
            $
            31,242
            
            $
            --Interest
                paid
            
            $
            18,306
            
            $
            16,408Income
                taxes paid
            
            $
            6,287
            
            $
            565





*See
      accompanying notes.*


-27-





**Prestige
      Brands International, LLC**


**Notes
      to Consolidated Financial Statements**


***(Unaudited)***











**1.**
            **Business
                and Basis of Presentation**





***Nature of Business***


Prestige
      Brands International, LLC (“PBI” or the “Company”) is an indirect wholly-owned
      subsidiary of Prestige Brands Holdings, Inc. (“PBH”) and the indirect parent
      company of Prestige Brands, Inc., the issuer of the 9.25% senior subordinated
      notes due 2012 (“Senior Notes”) and the borrower under the senior credit
      facility consisting of a Revolving Credit Facility and a Tranche B Term Loan
      Facility (together the “Senior Credit Facility”). PBI is a holding company with
      no assets or operations and is also the parent guarantor of the Senior Notes
      and
      Senior Credit Facility. PBH through its subsidiaries, is engaged in the
      marketing, sales and distribution of over-the-counter drug, personal care and
      household cleaning brands to mass merchandisers, drug stores, supermarkets
      and
      club stores primarily in the United States and Canada.





***Basis of Presentation***


The
      unaudited consolidated financial statements presented herein have been prepared
      in accordance with generally accepted accounting principles for interim
      financial reporting and with the instructions to Form 10-Q and Article 10 of
      Regulation S-X. Accordingly, they do not include all of the information and
      footnotes required by generally accepted accounting principles for complete
      financial statements. In the opinion of management, the financial statements
      include all adjustments, consisting of normal recurring adjustments that are
      considered necessary for a fair presentation of the Company’s financial
      position, results of operations and cash flows for the interim periods.
      Operating results for the three and six month periods ended September 30, 2006
      are not necessarily indicative of results that may be expected for the year
      ending March 31, 2007. This financial information should be read in conjunction
      with the Company’s financial statements and notes thereto included in the
      Company’s Annual Report on Form 10-K for the year ended March 31,
      2006.





***Use
      of Estimates***


The
      preparation of financial statements in conformity with accounting principles
      generally accepted in the United States of America requires management to make
      estimates and assumptions that affect the reported amounts of assets and
      liabilities and disclosure of contingent assets and liabilities at the date
      of
      the financial statements, as well as the reported amounts of revenues and
      expenses during the reporting period. Although these estimates are based on
      the
      Company’s knowledge of current events and actions that the Company may undertake
      in the future, actual results could differ from those estimates. As discussed
      below, the Company’s most significant estimates include those made in connection
      with the valuation of intangible assets, sales returns and allowances, trade
      promotional allowances and inventory obsolescence.




***Cash
      and Cash Equivalents***


The
      Company considers all short-term deposits and investments with original
      maturities of three months or less to be cash equivalents. Substantially all
      of
      the Company’s cash is held by one bank located in Wyoming. The Company does not
      believe that, as a result of this concentration, it is subject to any unusual
      financial risk beyond the normal risk associated with commercial banking
      relationships.





***Accounts
      Receivable***


The
      Company extends non-interest bearing trade credit to its customers in the
      ordinary course of business. The Company maintains an allowance for doubtful
      accounts receivable based upon historical collection experience and expected
      collectibility of the accounts receivable. In
      an
      effort to reduce credit risk, the Company (i) has established credit limits
      for
      all of its customer relationships, (ii) performs ongoing credit evaluations
      of
      customers’ financial condition, (iii) monitors the payment history and aging of
      customers’ receivables, and (iv) monitors open orders against an individual
      customer’s outstanding receivable balance.


-28-


***Inventories***


Inventories
      are stated at the lower of cost or fair value, where cost is determined by
      using
      the first-in, first-out method. The Company provides an allowance for slow
      moving and obsolete inventory, whereby it reduces
      inventories for the diminution of value, resulting from product obsolescence,
      damage or other issues affecting marketability, equal to the difference between
      the cost of the inventory and its estimated market value. Factors utilized
      in
      the determination of estimated market value include (i) current sales data
      and
      historical return rates, (ii) estimates of future demand, (iii) competitive
      pricing pressures, (iv) new product introductions, (v) product expiration dates,
      and (vi) component and packaging obsolescence.





***Property
      and Equipment***


Property
      and equipment are stated at cost and are depreciated using the straight-line
      method based on the following estimated useful lives:


**Years**Machinery
            
            5Computer
                equipment
            
            3Furniture
                and fixtures
            
            7Leasehold
                improvements
            
            5





Expenditures
      for maintenance and repairs are charged to expense as incurred. When an asset
      is
      sold or otherwise disposed of, the cost and associated accumulated depreciation
      are removed from the accounts and the resulting gain or loss is recognized
      in
      the consolidated statement of operations.




Property
      and equipment are reviewed for impairment whenever events or changes in
      circumstances indicate that the carrying amount of such assets may not be
      recoverable. An impairment loss is recognized if the carrying amount of the
      asset exceeds its fair value.




***Goodwill***


The
      excess of the purchase price over the fair market value of assets acquired
      and
      liabilities assumed in purchase business combinations is classified as goodwill.
      In accordance with Financial Accounting Standards Board (“FASB”) Statement of
      Financial Accounting Standards (“Statement”) No. 142, “Goodwill and Other
      Intangible Assets,” the Company does not amortize goodwill, but performs
      impairment tests of the carrying value at least annually. The Company tests
      goodwill for impairment at the “brand” level, which is one level below the
      operating segment level.





***Intangible
      Assets***


Intangible
      assets are stated at cost less accumulated amortization. For intangible assets
      with finite lives, amortization is computed on the straight-line method over
      estimated useful lives ranging from five to 30 years.





Indefinite
      lived intangible assets are tested for impairment at least annually, while
      intangible assets with finite lives are reviewed for impairment whenever events
      or changes in circumstances indicate that the carrying amount of such assets
      may
      not be recoverable. An impairment loss is recognized if the carrying amount
      of
      the asset exceeds its fair value.





***Deferred
      Financing Costs***


The
      Company has incurred debt issuance costs in connection with its long-term debt.
      These costs are capitalized as deferred financing costs and amortized using
      the
      effective interest method over the term of the related debt.





***Revenue
      Recognition***


Revenues
      are recognized in accordance with Securities and Exchange Commission Staff
      Accounting Bulletin 104, “Revenue Recognition,” when the following criteria are
      met: (1) persuasive evidence of an arrangement exists; (2) the product has
      been
      shipped and the customer takes ownership and assumes risk of loss; (3) the
      selling price is fixed or determinable; and (4) collection of the resulting
      receivable is reasonably assured. The Company has determined that the transfer
      of risk of loss generally occurs when product is received by the customer and,
      accordingly, recognizes revenue at that time. Provision is made for estimated
      discounts related to customer payment terms and estimated product returns at
      the
      time of sale based on the Company’s historical experience.


-29-


As
      is
      customary in the consumer products industry, t he
      Company participates in the
      promotional programs of its customers to enhance the sale of its products. The
      cost
      of these promotional programs varies based on the actual number of units sold
      during a finite period of time . The
      Company estimates the cost of such promotional programs at their inception
      based
      on historical experience and current market conditions and reduces sales by
      such
      estimates . These
      promotional programs consist of direct to consumer incentives such as coupons
      and temporary price reductions, as well as incentives to the Company’s
      customers, such as slotting fees and cooperative advertising. Estimates of
      the
      costs of these promotional programs are based on (i) historical sales
      experience, (ii) the current offering, (iii) forecasted data, (iv) current
      market conditions, and (v) communication with customer purchasing/marketing
      personnel. At
      the
      completion of the promotional program, the estimated amounts are adjusted to
      actual results.





Due
      to
      the nature of the consumer products industry, the Company is required to
      estimate future product returns. Accordingly, the Company records an estimate
      of
      product returns concurrent with recording sales which is made after analyzing
      (i) historical return rates, (ii) current economic trends, (iii) changes in
      customer demand, (iv) product acceptance, (v) seasonality of the Company’s
      product offerings, and (vi) the impact of changes in product formulation,
      packaging and advertising.





***Costs
      of Sales***


Costs
      of
      sales include product costs, warehousing costs, inbound and outbound shipping
      costs, and handling and storage costs. Shipping, warehousing and handling costs
      were $6.5 million and $6.7 million for the three month periods ended September
      30, 2006 and 2005, respectively, and $12.2 million for each of the six month
      periods ended September 30, 2006 and 2005.





***Advertising
      and Promotion Costs***


Advertising
      and promotion costs are expensed as incurred. Slotting fees associated with
      products are recognized as a reduction of sales. Under slotting arrangements,
      the retailers allow the Company’s products to be placed on the stores’ shelves
      in exchange for such fees. Direct reimbursements of advertising costs are
      reflected as a reduction of advertising costs in the period earned.





***Stock-based
      Compensation***


In
      connection with PBH’s IPO, the
      Board of Directors of PBH adopted the 2005 Long-Term Equity Incentive Plan
      (the
“Plan”). The Plan provides for grants of stock options, restricted stock,
      restricted stock units, deferred stock units and other equity-based awards.
      Directors, officers and other employees of PBH and its subsidiaries, as well
      as
      others performing services for PBH or its subsidiaries, are eligible for grants
      under the Plan. At September 30, 2006, there were 4.8 million shares available
      for issuance under the Plan.





The
      Company adopted FASB, Statement No. 123(R), “Share-Based Payment” (“Statement
      No. 123(R)”), effective April 1, 2005, with the grants of restricted stock and
      options to purchase common stock to employees and directors in accordance with
      the provisions of the Plan. Statement No. 123(R) requires the Company to measure
      the cost of services to be rendered based on the grant-date fair value of the
      equity award since the benefits, as well as the costs associated with these
      relationships were contributed to the Company. Compensation expense is to be
      recognized over the period an employee is required to provide service in
      exchange for the award, generally referred to as the requisite service period.
      The Company recorded non-cash compensation expense of $233,000 during the three
      month period ended September 30, 2006, and net non-cash compensation expense
      of
      $224,000 for the six months ended September 30, 2006. During the three month
      period ended June 30, 2006, the Company recorded a net non-cash compensation
      credit of $9,000 as a result of the reversal of compensation charges in the
      amount of $142,000 associated with the departure of a former member of
      management. The Company recorded non-cash compensation expense of $110,000
      during the three and six month periods ended September 30, 2005.





***Income
      Taxes***


PBI
      is a
      limited liability company and by itself is not a taxable entity. However, PBI’s
      operating subsidiaries are taxable entities which are included in the
      consolidated corporate Federal income tax return of PBH. Since PBH is not an
      operating entity, and by itself would not incur any income tax liability, income
      taxes are “pushed down” and allocated to the various operating
      entities.


-30-


Accordingly,
      income taxes are recorded by each subsidiary in accordance with the provisions
      of FASB Statement No. 109, “Accounting for Income Taxes” (“Statement No. 109”).
      Pursuant to Statement No. 109, deferred tax assets and liabilities are
      determined based on the differences between the financial reporting and tax
      bases of assets and liabilities using the enacted tax rates and laws that will
      be in effect when the differences are expected to reverse. A valuation allowance
      is established when necessary to reduce deferred tax assets to the amounts
      expected to be realized.





***Derivative
      Instruments***


FASB
      Statement No. 133, “Accounting for Derivative Instruments and Hedging
      Activities” (“Statement No. 133”), requires companies to recognize derivative
      instruments as either assets or liabilities in the balance sheet at fair value.
      The accounting for changes in the fair value of a derivative instrument depends
      on whether it has been designated and qualifies as part of a hedging
      relationship and further, on the type of hedging relationship. For those
      derivative instruments that are designated and qualify as hedging instruments,
      a
      company must designate the hedging instrument, based upon the exposure being
      hedged, as a fair value hedge, a cash flow hedge or a hedge of a net investment
      in a foreign operation.





The
      Company has designated its derivative financial instruments as cash flow hedges
      because they hedge exposure to variability in expected future cash flows that
      are attributable to interest rate risk. For these hedges, the effective portion
      of the gain or loss on the derivative instrument is reported as a component
      of
      other comprehensive income (loss) and reclassified into earnings in the same
      line item associated with the forecasted transaction in the same period or
      periods during which the hedged transaction affects earnings. Any ineffective
      portion of the gain or loss on the derivative instruments is recorded in results
      of operations immediately.





***Fair
      Value of Financial Instruments***


The
      carrying value of cash, accounts receivable and accounts payable at September
      30, 2006 and March 31, 2006 approximates fair value due to the short-term nature
      of these instruments. The carrying value of long-term debt at September 30,
      2006
      and March 31, 2006 approximates fair value based on interest rates for
      instruments with similar terms and maturities.





***Recently
      Issued Accounting Standards***


In
      November 2004, the FASB issued Statement of Financial Accounting Standards
      (“SFAS”) No. 151, “Inventory Costs” (“Statement No. 151”). Statement No. 151
      amended the guidance in Accounting Research Bulletin No. 43, Chapter 4,
“Inventory Pricing”, and requires the exclusion of certain costs, such as
      abnormal amounts of freight, handling costs and manufacturing overhead, from
      inventories. Additionally, Statement No. 151 requires the allocation of fixed
      production overhead to inventory based on normal capacity of the production
      facilities. The provisions of Statement No. 151 are effective for costs incurred
      during fiscal years beginning after June 15, 2005. The adoption of Statement
      No.
      151 did not have a material impact on the Company’s financial condition, results
      of operations or cash flows for the three and six month periods ended September
      30, 2006.





In
      June
      2006, the FASB issued
      FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes--an
      interpretation of FASB Statement 109” (“FIN 48”) which clarifies the accounting
      for uncertainty in income taxes recognized in a company’s financial statements
      in accordance with FASB Statement 109. FIN 48 is effective for fiscal years
      beginning after December 15, 2006, and prescribes a recognition threshold and
      measurement attributes for the financial statement recognition and measurement
      of a tax position taken or expected to be taken in a tax return. While the
      Company has not completed a comprehensive analysis of FIN 48, the adoption
      of
      FIN 48 is not expected to have a material impact on the Company’s consolidated
      financial position, results of operations or cash flows.





In
      September 2006, the FASB issued SFAS
      No.
      157, “Fair Value Measurements” (“Statement No. 157”) to address inconsistencies
      in the definition and determination of fair value pursuant to generally accepted
      accounting principles (“GAAP”). Statement No. 157 provides a single definition
      of fair value, establishes a framework for measuring fair value in GAAP and
      expands disclosures about fair value measurements in an effort to increase
      comparability related to the recognition of market-based assets and liabilities
      and their impact on earnings.


-31-


Statement
      No. 157 is effective for interim financial statements issued during the fiscal
      year beginning after November 15, 2007.





Management
      has reviewed and continues to monitor the actions of the various financial
      and
      regulatory reporting agencies and is currently not aware of any pronouncement
      that could have a material impact on our consolidated financial position,
      results of operations or cash flows.








2.Acquisition
      of Wartner USA B.V.





On
      September 21, 2006, the Company completed the acquisition of the ownership
      interests of Wartner USA B.V. (“Wartner”), the owner and marketer of the
      Wartner® brand of over-the-counter wart treatment products. The Company expects
      that the Wartner brand, which is the #3 brand in the US over-the-counter wart
      treatment category, will enhance the Company’s leadership in the category.
      Additionally, the Company believes that the brand will benefit from a targeted
      advertising and marketing program, as well as the Company’s business model of
      outsourcing manufacturing and the elimination of redundant operations. The
      results from operations of the Wartner® brand were included within the Company’s
      financial statements as a component of the over-the-counter segment commencing
      September 21, 2006.





The
      purchase price of the ownership interests was approximately $35.1 million,
      including fees and expenses of the acquisition of $216,000 and the assumption
      of
      approximately $5.0 million of contingent payments, with an estimated fair value
      of $3.8 million, owed to the former owner of Wartner through 2011. The Company
      funded the cash acquisition price from operating cash flows.





The
      following table summarizes the estimated fair values of the assets and
      liabilities acquired at the date of acquisition. The Company has obtained
      independent valuations of certain tangible and intangible assets; however,
      the
      final purchase price will not be determined until all preliminary valuations
      have been finalized. Consequently, the allocation of the purchase price is
      subject to refinement.





The
      preliminary fair values assigned to the net assets and liabilities acquired
      consist of the following:





***(In
                thousands)***Inventory
            
            $
            769Intangible
                assets
            
            
            29,600Goodwill
            
            
            4,699Accrued
                liabilities
            
            
            (3,826
            )$
            31,242





The
      amount allocated to intangible assets of $29.6 million includes $17.8 million
      related to the Wartner® brand trademark which the Company estimates to have a
      useful life of 20 years, as well as $11.8 million related to a patent estimated
      to have a useful life of 14 years. Goodwill resulting from this transaction
      was
      $4.7 million. As discussed above, this recorded amount is subject to change
      as
      additional information becomes available; however, it is estimated that such
      amount will be fully deductible for income tax purposes.





The
      following table sets forth the unaudited results of the Company’s operations on
      a pro forma basis as if the acquisition of Wartner had been completed on April
      1, 2005. The pro forma amounts for the three and six month periods ended
      September 30, 2005 include the pro forma results from operations of Dental
      Concepts, LLC, which was acquired in November 2005, as if the acquisition of
      Dental Concepts had been completed on April 1, 2005. The pro forma financial
      information is not necessarily indicative of the operating results that the
      combined entities would have achieved had the acquisition been consummated
      on
      April 1, 2005, nor is it necessarily


-32-


indicative
      of the operating results that may be expected for the year ending March 31,
      2007.





****
            
            **Three
                Months**
              **Ended
                September 30**
            
            **Six
                Months**
              **Ended
                September*****(In
                thousands)***
            
            **2006**
            
            **2005**
            
            **2006**
            
            **2005**Revenues
            
            $
            88,096
            
            $
            80,463
            
            $
            167,943
            
            $
            150,585Income
                before provision for
              income taxes
            
            $
            14,866
            
            $
            12,300
            
            $
            28,143
            
            $
            22,000Net
                income
            
            $
            9,055
            
            $
            7,442
            
            $
            17,140
            
            $
            13,362








**3.**
            **Accounts
                Receivable**





Accounts
      receivable consist of the following (in thousands):


**September
                30,**
              **2006**
            
            **March
                31,**
              **2006**Accounts
                receivable
            
            $
            37,539
            
            $
            40,140Other
                receivables
            
            
            1,553
            
            
            1,87039,092
            
            
            42,010Less
                allowances for discounts, returns and
              uncollectible
                accounts
            
            
            (1,645
            )
            
            (1,968
            )$
            37,447
            
            $
            40,042








**4.**
            **Inventories**





Inventories
      consist of the following (in thousands):


**September
                30,**
              **2006**
            ****
            **March
                31,**
              **2006**Packaging
                and raw materials
            
            $
            2,842
            
            $
            3,278Finished
                goods
            
            
            26,430
            
            
            30,563$
            29,272
            
            $
            33,841





Inventories
      are shown net of allowances for obsolete and slow moving inventory of $1.5
      million and $1.0 million at September 30, 2006 and March 31, 2006,
      respectively.








-33-


5.Property
      and Equipment




Property
      and equipment consist of the following (in thousands):


**September
                30,**
              **2006**
            ****
            **March
                31,**
              **2006**Machinery
            
            $
            3,942
            
            $
            3,722Computer
                equipment
            
            
            852
            
            
            987Furniture
                and fixtures
            
            
            267
            
            
            303Leasehold
                improvements
            
            
            340
            
            
            3405,401
            
            
            5,352Accumulated
                depreciation
            
            
            (3,874
            )
            
            (3,699
            )$
            1,527
            
            $
            1,653








6.Goodwill





A
      reconciliation of the activity affecting goodwill by operating segment is as
      follows (in thousands):





**Over-the-Counter**
              **Drug**
            ****
            **Household**
              **Cleaning**
            ****
            **Personal**
              **Care**
            ****
            **Consolidated**Balance
                - March 31, 2006
            
            $
            222,635
            
            $
            72,549
            
            $
            2,751
            
            $
            297,935Additions
            
            
            4,851
            
            
            --
            
            
            --
            
            
            4,851Balance
                - September 30, 2006
            
            $
            227,486
            
            $
            72,549
            
            $
            2,751
            
            $
            302,786





At
      September 30, 2006, approximately $33.1 million of the Company’s goodwill is
      deductible for income tax purposes.








7.Intangible
      Assets





A
      reconciliation of the activity affecting intangible assets is as follows (in
      thousands):





**Indefinite**
              **Lived**
              **Intangibles**
            
            **Finite**
              **Lived**
              **Intangibles**
            
            **Total***Carrying
                Amounts*Balance
                - March 31, 2006
            
            $
            544,963
            
            $
            110,066
            
            $
            655,029Additions
            
            
            --
            
            
            29,600
            
            
            29,600Balance
                - September 30, 2006
            
            $
            544,963
            
            $
            139,666
            
            $
            684,629*Accumulated
                Amortization*Balance
                - March 31, 2006
            
            $
            --
            
            $
            17,832
            
            $
            17,832Amortization
            
            
            --
            
            
            4,386
            
            
            4,386Balance
                - September 30, 2006
            
            $
            --
            
            $
            22,218
            
            $
            22,218





-34-


At
      September 30, 2006, intangible assets are expected to be amortized over a period
      of five to 30 years as follows (in thousands):





**Year
                Ending September 30**2007
            
            $
            10,5072008
            
            
            10,5072009
            
            
            10,5022010
            
            
            9,0862011
            
            
            9,071Thereafter
            
            
            67,775$
            117,448








8.Other
      Accrued Liabilities





Other
      accrued liabilities consist of the following (in thousands):





**September
                30,**
              **2006**
            
            **March
                31,**
              **2006**Accrued
                marketing costs
            
            $
            4,989
            
            $
            2,513Accrued
                payroll
            
            
            1,835
            
            
            813Accrued
                commissions
            
            
            275
            
            
            248Other
            
            
            1,615
            
            
            1,008$
            8,714
            
            $
            4,582











-35-


9.Long-Term
      Debt





Long-term
                debt consists of the following (in thousands):**September
                30,**
              **2006**
            
            **March
                31,**
              **2006**Senior
                revolving credit facility (“Revolving Credit Facility”), which expires on
                April 6, 2009 and is available for maximum borrowings of up to $60.0
                million. The Revolving Credit Facility bears interest at the Company’s
                option at either the prime rate plus a variable margin or LIBOR plus
                a
                variable margin. The variable margins range from 0.75% to 2.50% and
                at
                September 30, 2006, the interest rate on the Revolving Credit Facility
                was
                9.5% per annum. The Company is also required to pay a variable commitment
                fee on the unused portion of the Revolving Credit Facility. At September
                30, 2006, the commitment fee was 0.50% of the unused line. The Revolving
                Credit Facility is collateralized by substantially all of the Company’s
                assets.
            
            $
            --
            
            $
            7,000Senior
                secured term loan facility (“Tranche B Term Loan Facility”) that bears
                interest at the Company’s option at either the prime rate plus a margin of
                1.25% or LIBOR plus a margin of 2.25%. At September 30, 2006, the
                weighted
                average applicable interest rate on the Tranche B Term Loan Facility
                was
                7.26%. Principal payments of $933,000 and interest are payable quarterly.
                In February 2005, the Tranche B Term Loan Facility was amended to
                increase
                the additional amount available thereunder by $50.0 million to $200.0
                million, all of which is available at September 30, 2006. Current
                amounts
                outstanding under the Tranche B Term Loan Facility mature on April
                6,
                2011, while amounts borrowed pursuant to the amendment will mature
                on
                October 6, 2011. The Tranche B Term Loan Facility is collateralized
                by
                substantially all of the Company’s assets.
            
            
            363,765
            
            
            365,630Senior
                Subordinated Notes (“Senior Notes”) that bear interest at 9.25% which is
                payable on April 15thand October 15thof
                each year. The Senior Notes mature on April 15, 2012; however, the
                Company
                may redeem some or all of the Senior Notes on or prior to April 15,
                2008
                at a redemption price equal to 100%, plus a make-whole premium, and
                after
                April 15, 2008 at redemption prices set forth in the indenture governing
                the Senior Notes. The Senior Notes are unconditionally guaranteed
                by the
                Company and the Company’s wholly-owned subsidiaries, other than Prestige
                Brands, Inc, the issuer. Each of these guarantees is joint and several.
                There are no significant restrictions on the ability of any of the
                guarantors to obtain funds from their subsidiaries.
            
            
            126,000
            
            
            126,000489,765
            
            
            498,630Current
                portion of long-term debt
            
            
            (3,730
            )
            
            (3,730
            )$
            486,035
            
            $
            494,900





The
      Revolving Credit Facility and the Tranche B Term Loan Facility (together the
      “Senior Credit Facility”) contain various financial covenants, including
      provisions that require the Company to maintain certain leverage ratios,
      interest coverage ratios and fixed charge coverage ratios. The Senior Credit
      Facility and the Senior Notes


-36-


also
      contain provisions that restrict the Company from undertaking specified
      corporate actions, such as asset dispositions, acquisitions, dividend payments,
      repurchase of common shares outstanding, changes of control, incurrence of
      indebtedness, creation of liens and transactions with affiliates. Additionally,
      the Senior Credit Facility and the Senior Notes contain cross-default provisions
      whereby a default pursuant to the terms and conditions of either indebtedness
      will cause a default on the remaining indebtedness. The Company was in
      compliance with its applicable financial and restrictive covenants under the
      Senior Credit Facility and the indenture governing the Senior Notes at September
      30, 2006.





Future
      principal payments required in accordance with the terms of the Senior Credit
      Facility and the Senior Notes are as follows (in thousands):





**Year
                Ending September 30,**2007
            
            $
            3,7302008
            
            
            3,7302009
            
            
            3,7302000
            
            
            3,7302011
            
            
            348,845Thereafter
            
            
            126,000$
            489,765





In
      an
      effort to mitigate the impact of changing interest rates, the Company entered
      into interest rate cap agreements with various financial institutions. In June
      2005, the Company purchased a 5% interest rate cap with a notional amount of
      $20.0 million which expired in June 2006. In March 2005, the Company purchased
      interest rate cap agreements with a total notional amount of $180.0 million
      and
      cap rates ranging from 3.25% to 3.75%. On May 31, 2006, an interest rate cap
      agreement with a notional amount of $50.0 million and a 3.25% cap rate expired.
      The remaining agreements terminate on May 30, 2007 and 2008 as to notional
      amounts of $80.0 million and $50.0 million, respectively. The Company is
      accounting for the interest rate cap agreements as cash flow hedges. The fair
      value of the interest rate cap agreements, which is included in other long-term
      assets, was $2.2 million and $3.3 million at September 30, 2006
      and
      March 31, 2006, respectively .








10.Stock-Based
      Compensation





In
      connection with the Company’s February 2005 initial public offering, the Board
      of Directors adopted the Plan which provides for the grant, up to a maximum
      of
      5.0 million shares, of stock options, restricted stock, restricted stock units,
      deferred stock units and other equity-based awards. Directors, officers and
      other employees of the Company and its subsidiaries, as well as others
      performing services for the Company, are eligible for grants under the Plan.
      The
      Company believes that such awards better align the interests of its employees
      with those of its stockholders.





**Restricted
      Shares**


Restricted
      shares granted under the Plan generally vest in 3 to 5 years, contingent on
      attainment of Company performance goals, including both revenue and earnings
      per
      share growth targets. Certain restricted share awards provide for accelerated
      vesting if there is a change of control. The fair value of nonvested restricted
      shares is determined as the closing price of the Company’s common stock on the
      day preceding the grant date. During the three month period ended September
      30,
      2006, the Company granted awards aggregating 156,500 shares of restricted stock
      with an estimated fair value of $1.3 million.





**Performance
      Shares**


On
      the
      vesting date, the recipient of performance shares will receive the
      difference between the closing price of the Company’s common stock on such date
      and the grant date price, times


-37-


the
      number of performance shares underlying the grant. These awards may be settled
      in cash, common stock or some combination thereof at the option of the Company.
      During the three month period ended September 30, 2006, the Company granted
      awards aggregating 16,100 performance shares with an estimated fair value of
      $60,000.





**Options**


The
      Plan
      provides that the exercise price of the option granted shall be no less than
      the
      fair market value of the Company’s common stock on the date the option is
      granted. Options granted have a term of no greater than 10 years from the date
      of grant and vest in accordance with a schedule determined at the time the
      option is granted, generally 3 to 5 years. Certain option awards provide for
      accelerated vesting if there is a change in control. There were no option awards
      during the three and six month periods ended September 30, 2006.





The
      fair
      value of option and performance share awards is estimated on the date of grant
      using the Black-Scholes Option Pricing Model. As of September 30, 2006, there
      was approximately $1.8 million of total unrecognized compensation cost related
      to nonvested share-based compensation arrangements under the Plan, based on
      management’s estimate of the shares that will ultimately vest. The Company
      expects to recognize such costs over the next 4.0 years. However, the restricted
      shares vest upon the attainment of Company performance goals; if such goals
      are
      not met, no compensation cost would ultimately be recognized and any previously
      recognized compensation cost would be reversed. At September 30, 2006, there
      were 4.7 million shares available for issuance under the Plan.








11.Income
      Taxes





Income
      taxes are recorded in the Company’s quarterly financial statements based on the
      Company’s estimated annual effective income tax rate. The effective rates used
      in the calculation of income taxes were 39.1% for three and six month periods
      ended September 30, 2006, and 39.3% for the three and six month periods ended
      September 30, 2005.




12. Commitments
      and
      Contingencies The
          Company and certain of its officers and directors are defendants in a
          consolidated putative securities class action lawsuit filed in the United
          States
          District Court for the Southern District of New York (the “Consolidated
          Action”). The first of the six consolidated cases was filed on August 3, 2005.
          Plaintiffs purport to represent a class of stockholders of the Company
          who
          purchased shares between February 9, 2005 through November 15, 2005. Plaintiffs
          also name as defendants the underwriters in the Company’s initial public
          offering and a private equity fund that was a selling stockholder in the
          offering. The District Court has appointed a Lead Plaintiff. On December
          23,
          2005, the Lead Plaintiff filed a Consolidated Class Action Complaint, which
          asserted claims under Sections 11, 12(a)(2) and 15 of the Securities Act
          of 1933
          and Sections 10(b), 20(a), and 20A of the Securities Exchange Act of 1934.
          The
          Lead Plaintiff generally alleged that the Company issued a series of materially
          false and misleading statements in connection with its initial public offering
          and thereafter in regard to the following areas: the accounting issues
          described
          in the Company’s press release issued on or about November 15, 2005; and the
          alleged failure to disclose that demand for certain of the Company’s products
          was declining and that the Company was planning to withdraw several products
          from the market. Plaintiffs seek an unspecified amount of damages. The
          Company
          filed a motion to dismiss the Consolidated Class Action Complaint in February
          2006. On July 10, 2006, the Court dismissed all claims against the Company
          and
          the individual defendants arising under the Securities Exchange Act of
          1934. The
          Company’s management believes the remaining claims are legally deficient and
          subject to meritorious defenses.  The Company intends to vigorously pursue
          its defenses; however, the Company cannot reasonably estimate the potential
          range of loss, if any.









On
        September 6, 2005, another putative securities class action lawsuit
        substantially similar to the initially-filed complaints in the Consolidated
        Action described above was filed against the same defendants in the Circuit
        Court of Cook County, Illinois (the “Chicago Action”). In light of the
        first-filed Consolidated Action, proceedings in the Chicago Action were stayed
        until a ruling on defendants’ anticipated motions to dismiss the consolidated
        complaint in the Consolidated Action. Subsequent to the Court's decision
        on the
        motions to dismiss in the Consolidated Action, on August 11, 2006, the
        Plaintiffs in the Chicago Action agreed to dismiss the Chicago Action.
 
 On
        May
        23, 2006, Similasan Corporation filed a lawsuit against the Company in the
        United States District Court for the District of Colorado in which Similasan
        alleged false designation of origin, trademark and trade dress infringement,
        and
        deceptive trade practices by the Company related to *Murine* for
        Allergy Eye Relief, *Murine* for
        Tired Eye Relief and *Murine* for
        Earache Relief, as applicable. Similasan has requested injunctive relief,
        an
        accounting of profits and damages and litigation costs and attorneys’ fees. The
        Company has filed an answer to the complaint with a potentially dispositive
        motion. In addition to the lawsuit filed by Similasan in the U.S. District
        Court
        for the District of Colorado, the Company also received a cease and desist
        letter from Swiss legal counsel to Similasan and its parent company, Similasan
        AG, a Swiss company. In the cease and desist letter, Similasan and Similasan
        AG
        have alleged a breach of the Secrecy Agreement executed by the Company and
        demanded that the Company cease and desist from (i) using confidential
        information covered by the Secrecy Agreement; and (ii) manufacturing,
        distributing, marketing or selling certain of its homeopathic products. The
        complaint in the Colorado action has now been amended to include allegations
        relating to the breach of confidentiality’ and the Company has filed an answer
        responsive thereto. The Company’s management believes the allegations to be
        without merit and intends to vigorously pursue its defenses; however, the
        Company cannot reasonably estimate the potential range of loss, if
        any.
 
 On
        September 28, 2006, OraSure Technologies, Inc. moved in the Supreme Court
        of the State of New York for a preliminary injunction prohibiting the
        Company from selling cryogenic wart removal products under the Wartner® brand,
        which the Company acquired on September 21, 2006. OraSure Technologies is
        a
        supplier to the Company for the Company’s Compound W Freeze Off® business. The
        distribution agreement in place calls for mediation of contract disputes,
        followed by arbitration, if necessary. The contract in question is of five
        years
        duration ending in December 2007. On October 30, 2006, the Court denied OraSure
        Technologies’ motion for a preliminary injunction.  To the extent the
        contract dispute is not resolved through mediation, the Company intends to
        seek
        resolution of the matter through arbitration.




The
        Company is also involved from time to time in other routine legal matters
        and
        other claims incidental to its business. The Company reviews outstanding
        claims
        and proceedings internally and with external counsel as necessary to assess
        probability of loss and for the ability to estimate loss. These assessments
        are
        re-evaluated each quarter and as new information becomes available to determine
        whether a reserve should be established or if any existing reserve should
        be
        adjusted. The actual cost of resolving a claim or proceeding ultimately may
        be
        substantially different than the amount of the recorded reserve. In addition,
        because it is not permissible under generally accepted accounting principles
        to
        establish a litigation reserve until the loss is both probable and estimable,
        in
        some cases there may be insufficient time to establish a reserve prior to
        the
        actual incurrence of the loss (upon verdict and judgment at trial, for example,
        or in the case of a quickly negotiated settlement). The Company believes
        the
        resolution of routine matters and other incidental claims, taking into account
        reserves and insurance, will not have a material adverse effect on its business,
        financial condition or results from operations.


**Lease
      Commitments**


The
      Company has operating leases for office facilities and equipment in New York,
      New Jersey and Wyoming, which expire at various dates through July
      2009.





The
      following summarizes future minimum lease payments for the Company’s operating
      leases (in thousands):




**Year
                Ending September 30**
            ****
            **Facilities**
            ****
            **Equipment**
            ****
            **Total**2007
            
            $
            535
            
            $
            121
            
            $
            6562008
            
            
            499
            
            
            120
            
            
            6192009
            
            
            324
            
            
            96
            
            
            4202010
            
            
            --
            
            
            71
            
            
            71$
            1,358
            
            $
            408
            
            $
            1,766


-39-


13.Concentrations
      of Risk





The
      Company’s sales are concentrated in the areas of over-the-counter pharmaceutical
      products, personal care products and household cleaning products. The Company
      sells its products to mass merchandisers, food and drug accounts, and dollar
      and
      club stores. During the three and six month periods ended September 30, 2006
      approximately 61.1% and 60.2%, respectively, of the Company’s total sales were
      derived from its four major brands, while during the three and six month periods
      ended September 30, 2005, approximately 65.0% and 63.4%, respectively, of the
      Company’s total sales were derived from these four major brands. During the
      three month periods ended September 30, 2006 and 2005, approximately 24.1%
      and
      24.6%, respectively, of the Company’s sales were made to one customer, while
      during the three and six month periods ended September 30, 2005, 22.3% and
      23.2%
      of sales were to this customer. At September 30, 2006, approximately 19.6%
      of
      accounts receivable were owed by the same customer.





The
      Company manages product distribution in the continental United States through
      a
      main distribution center in St. Louis, Missouri. A serious disruption, such
      as a
      flood or fire, to the main distribution center could damage the Company’s
      inventories and materially impair the Company’s ability to distribute its
      products to customers in a timely manner or at a reasonable cost. The Company
      could incur significantly higher costs and experience longer lead times
      associated with the distribution of its products to its customers during the
      time that it takes the Company to reopen or replace its distribution center.
      As
      a result, any such disruption could have a material adverse effect on the
      Company’s sales and profitability.





The
      Company has relationships with over 40 third-party manufacturers. Of those,
      the
      top 10 manufacturers produced items that accounted for approximately 78% of
      the
      Company’s gross sales for the six month period ended September 30, 2006. The
      Company does not have long-term contracts with 3 of these manufacturers and
      certain manufacturers of various smaller brands, which collectively, represent
      approximately 32% of the Company’s gross sales. The lack of manufacturing
      agreements for these products exposes the Company to the risk that a
      manufacturer could stop producing the Company’s products at any time, for any
      reason or fail to provide the Company with the level of products the Company
      needs to meet its customers’ demands. Without
      adequate supplies of merchandise to sell to the Company’s customers, sales would
      decrease materially and the Company’s business would suffer.





14.Business
      Segments





Segment
      information has been prepared in accordance with FASB Statement No. 131,
“Disclosures about Segments of an Enterprise and Related Information.” The
      Company’s operating and reportable segments consist of (i) Over-the-Counter
      Drugs, (ii) Personal Care and (iii) Household Cleaning.





There
      were no inter-segment sales or transfers during the three and six month periods
      ended September 30, 2006 and 2005. The Company evaluates the performance of
      its
      operating segments and allocates resources to them based primarily on
      contribution margin. The table below summarizes information about the Company’s
      operating


-40-


and
      reportable segments (in thousands).





**Three
                Months Ended September 30, 2006**
            ********
            ****
            **Over-the-Counter**
              **Drug**
            ****
            **Household**
              **Cleaning**
            ****
            **Personal**
              **Care**
            ****
            **Consolidated**Net
                sales
            
            $
            46,255
            
            $
            30,732
            
            $
            7,046
            
            $
            84,033Other
                revenues
            
            
            --
            
            
            518
            
            
            --
            
            
            518Total
                revenues
            
            
            46,255
            
            
            31,250
            
            
            7,046
            
            
            84,551Cost
                of sales
            
            
            18,001
            
            
            18,941
            
            
            4,317
            
            
            41,259Gross
                profit
            
            
            28,254
            
            
            12,309
            
            
            2,729
            
            
            43,292Advertising
                and promotion
            
            
            7,058
            
            
            2,020
            
            
            377
            
            
            9,455Contribution
                margin
            
            $
            21,196
            
            $
            10,289
            
            $
            2,352
            
            
            33,837Other
                operating expenses
            
            
            
            
            
            
            
            
            
            
            
            9,671Operating
                income
            
            
            
            
            
            
            
            
            
            
            
            24,166Other
                (income) expense
            
            
            
            
            
            
            
            
            
            
            
            9,743Provision
                for income taxes
            
            
            
            
            
            
            
            
            
            
            
            5,639Net
                income
            
            
            
            
            
            
            
            
            
            
            $
            8,784








**Six
                Months Ended September 30, 2006******
            
            **Over-the-Counter**
              **Drug**
            
            **Household**
              **Cleaning**
            
            **Personal**
              **Care**
            
            **Consolidated**Net
                sales
            
            $
            85,853
            
            $
            60,470
            
            $
            13,277
            
            $
            159,600Other
                revenues
            
            
            --
            
            
            874
            
            
            --
            
            
            874Total
                revenues
            
            
            85,853
            
            
            61,344
            
            
            13,277
            
            
            160,474Cost
                of sales
            
            
            32,398
            
            
            37,095
            
            
            8,091
            
            
            77,584Gross
                profit
            
            
            53,455
            
            
            24,249
            
            
            5,186
            
            
            82,890Advertising
                and promotion
            
            
            12,483
            
            
            3,710
            
            
            664
            
            
            16,857Contribution
                margin
            
            $
            40,972
            
            $
            20,539
            
            $
            4,522
            
            
            66,033Other
                operating expenses
            
            
            
            
            
            
            
            
            
            
            
            18,518Operating
                income
            
            
            
            
            
            
            
            
            
            
            
            47,515Other
                (income) expense
            
            
            
            
            
            
            
            
            
            
            
            19,535Provision
                for income taxes
            
            
            
            
            
            
            
            
            
            
            
            10,940Net
                income
            
            
            
            
            
            
            
            
            
            
            $
            17,040





-41-





**Three
                Months Ended September 30, 2005******
            
            **Over-the-Counter**
              **Drug**
            
            **Household**
              **Cleaning**
            
            **Personal**
              **Care**
            
            **Consolidated**Net
                sales
            
            $
            40,759
            
            $
            25,229
            
            $
            7,332
            
            $
            73,320Other
                revenues
            
            
            --
            
            
            25
            
            
            --
            
            
            25Total
                revenues
            
            
            40,759
            
            
            25,254
            
            
            7,332
            
            
            73,345Cost
                of sales
            
            
            15,558
            
            
            15,535
            
            
            4,456
            
            
            35,549Gross
                profit
            
            
            25,201
            
            
            9,719
            
            
            2,876
            
            
            37,796Advertising
                and promotion
            
            
            7,127
            
            
            1,740
            
            
            1,350
            
            
            10,217Contribution
                margin
            
            $
            18,074
            
            $
            7,979
            
            $
            1,526
            
            
            27,579Other
                operating expenses
            
            
            
            
            
            
            
            
            
            
            
            6,752Operating
                income
            
            
            
            
            
            
            
            
            
            
            
            20,827Other
                (income) expense
            
            
            
            
            
            
            
            
            
            
            
            8,671Provision
                for income taxes
            
            
            
            
            
            
            
            
            
            
            
            4,782Net
                income
            
            
            
            
            
            
            
            
            
            
            $
            7,374








**Six
                Months Ended September 30, 2005**
            ********
            ****
            **Over-the-Counter**
              **Drug**
            ****
            **Household**
              **Cleaning**
            ****
            **Personal**
              **Care**
            ****
            **Consolidated**Net
                sales
            
            $
            74,148
            
            $
            48,012
            
            $
            14,588
            
            $
            136,748Other
                revenues
            
            
            
            
            
            50
            
            
            --
            
            
            50Total
                revenues
            
            
            74,148
            
            
            48,062
            
            
            14,588
            
            
            136,798Cost
                of sales
            
            
            27,223
            
            
            28,922
            
            
            8,353
            
            
            64,498Gross
                profit
            
            
            46,925
            
            
            19,140
            
            
            6,235
            
            
            72,300Advertising
                and promotion
            
            
            13,266
            
            
            3,510
            
            
            2,146
            
            
            18,922Contribution
                margin
            
            $
            33,659
            
            $
            15,630
            
            $
            4,089
            
            
            53,378Other
                operating expenses
            
            
            
            
            
            
            
            
            
            
            
            14,294Operating
                income
            
            
            
            
            
            
            
            
            
            
            
            39,084Other
                (income) expense
            
            
            
            
            
            
            
            
            
            
            
            17,181Provision
                for income taxes
            
            
            
            
            
            
            
            
            
            
            
            8,600Net
                income
            
            
            
            
            
            
            
            
            
            
            $
            13,303








During
      the three month periods ended September 30, 2006 and 2005, approximately 96.4%
      and 97.6%, respectively, of the Company’s sales were made to customers in the
      United States and Canada, while during the six month periods ended September
      30,
      2006 and 2005, approximately 96.2% and 97.7%, respectively, of sales were made
      to customers in the United States and Canada. At September 30, 2006 and March
      31, 2006, substantially all of the Company’s long-term assets were located in
      the United States of America and have been


-42-


allocated
      to the operating segments as follows:





**Over-the-Counter**
              **Drug**
            ****
            **Household**
              **Cleaning**
            ****
            **Personal**
              **Care**
            ****
            **Consolidated**Goodwill
            
            $
            227,486
            
            $
            72,549
            
            $
            2,751
            
            $
            302,786Intangible
                assetsIndefinite
                lived
            
            
            374,070
            
            
            170,893
            
            
            --
            
            
            544,963Finite
                lived
            
            
            98,566
            
            
            27
            
            
            18,855
            
            
            117,448472,636
            
            
            170,920
            
            
            18,855
            
            
            662,411$
            700,122
            
            $
            243,469
            
            $
            21,606
            
            $
            965,197











-43-


ITEM
      2.MANAGEMENT’S
      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND


RESULTS
      OF OPERATIONS








Prestige
      Brands Holdings, Inc. (the “Company”), as the indirect holding company of
      Prestige Brands International, LLC (“Prestige International”) does not conduct
      ongoing business operations. As a result, the financial information for the
      Company and Prestige International is identical for the purposes of the
      discussion of operating results in Management’s Discussion and Analysis of
      Financial Condition and Results of Operations. Prestige International is an
      indirect wholly owned subsidiary of the Company and an indirect parent company
      of Prestige Brands, Inc., the issuer of our 9.25% senior subordinated notes
      due
      2012 (“Senior Notes”) and the borrower under the senior credit facility,
      consisting of a Revolving Credit Facility and a Tranche B Term Loan Facility
      (together the “Senior Credit Facility”). Prestige International is also the
      parent guarantor of the Senior Notes and the Senior Credit
      Facility.





**General**


We
      are
      engaged in the marketing, sales and distribution of brand name over-the-counter
      drug, household cleaning and personal care products to mass merchandisers,
      drug
      stores, supermarkets and club stores primarily in the United States and Canada.
      We operate in niche segments of these categories where we can use the strength
      of our brands, our established retail distribution network, a low-cost operating
      model and our experienced management team as a competitive advantage to grow
      our
      presence in these categories and, as a result, grow our sales and
      profits.





We
      have
      grown our brand portfolio by acquiring strong and well-recognized brands from
      larger consumer products and pharmaceutical companies, as well as other brands
      from smaller private companies. While the brands we have purchased from larger
      consumer products and pharmaceutical companies have long histories of support
      and brand development, we believe that at the time we acquired them they were
      considered “non-core” by their previous owners and did not benefit from the
      focus of senior level management or strong marketing support. We believe that
      the brands we have purchased from smaller private companies have been
      constrained by the limited resources of their prior owners. After acquiring
      a
      brand, we seek to increase its sales, market share and distribution in both
      existing and new channels. We pursue this growth through increased spending
      on
      advertising and promotion, new marketing strategies, improved packaging and
      formulations and innovative new products.





On
      September 21, 2006, we completed the acquisition of the ownership interests
      of
      Wartner USA B.V., a privately held limited liability company, and the
      intellectual property associated with the “Wartner ®” brand of
      over-the-counter wart treatment products. The purchase price of this acquisition
      was $35.1 million, inclusive of direct costs of the acquisition of $216,000,
      and
      the assumption of approximately $5.0 million of contingent payments to the
      former owner.





On
      October 28, 2005, we completed the acquisition of the “Chore Boy®” brand of
      cleaning pads and sponges. The purchase price of this acquisition was $22.6
      million, including direct costs of $400,000. We purchased the Chore Boy® brand
      with funds generated from operations.





On
      November 8, 2005, we completed the acquisition of the ownership interests of
      Dental Concepts, LLC, a marketer of therapeutic oral care products sold under
      “The Doctor’s®” brand. The purchase price of the ownership interests was
      approximately $30.5 million, including fees and expenses of the acquisition
      of
      $500,000. We financed the acquisition price through the utilization of our
      Revolving Credit Facility and with cash resources of $30.0 million and $500,000,
      respectively.





We
      expect
      that the Wartner® brand will benefit from our business model of outsourcing
      manufacturing and increasing awareness though targeted marketing and advertising
      and that both, the Chore Boy® and The Doctor’s® product lines will continue to
      benefit from our model.


-44-


**Three
      Month Period Ended September 30, 2006 compared to the Three
      Month**


**Period Ended September 30, 2005**








**Total
      Revenues**


Total
      revenues for the period ended September 30, 2006 were $84.6 million, compared
      to
      $73.3 million for the comparable period of 2005. This represented an increase
      of
      $11.2 million, or 15.3%, from the prior period. Excluding the impact of the
      Chore Boy ® and The
      Doctor’s ® brands,
      which were acquired in October and November 2005, respectively, revenues were
      up
      6.7%. The Over-the-Counter Drug segment had revenues of $46.3 million for the
      period ended September 30, 2006, an increase of $5.5 million, or 13.5%, above
      revenues of $40.8 million for the period ended September 30, 2005. The Household
      Cleaning segment had revenues of $31.3 million for the period ended September
      30, 2006, an increase of $6.0 million, or 23.7%, above revenues of $25.3 million
      for the period ended September 30, 2005. The Personal Care segment had revenues
      of $7.0 million for the period ended September 30, 2006, a decrease of $286,000,
      or 3.9%, below revenues of $7.3 million for the period ended September 30,
      2005.





***Over-the-Counter
      Drug Segment***


Total
      revenues in the Over-the-Counter Drug segment were $46.3 million for the period
      ended September 30, 2006 versus $40.8 million for the comparable period of
      2005.
      This represented an increase of $5.5 million, or 13.5%, over the prior period
      ended September 30, 2005. The revenue increase is primarily due to strong gains
      for Clear eyes ® ,
      Little
      Remedies ® ,
      Chloraseptic ® ,
      Murine ® ,
      and
      Compound W ® .
      In
      addition, The Doctor’s ® brand
      which was acquired with the Dental Concepts acquisition in November 2005,
      contributed to the revenue growth in the period. Excluding sales related to
      The
      Doctor’s ® brand,
      total revenues for this segment were up 5.0%. The Clear eyes ® sales
      growth for the current period is a result of continued strong consumer
      consumption trends and the launch of Clear eyes ® Triple
      Action. Little Remedies’ revenue increased during the period primarily as a
      result of strong consumer consumption. The increase in Murine ® revenues
      is due primarily to the three new homeopathic eye and ear care products that
      were launched during the three month period ended June 30, 2006. Chloraseptic
      revenue’s increased during the period as a result of the launch of five new
      items during the current period. The increase in Compound W ® revenue
      is a result of relatively weak shipments for the same period last year.
      Revenues of New Skin ® continued to decline during the period primarily as a result of continued
      softness in the liquid bandage category.





***Household
      Cleaning Segment***


Total
      revenues of the Household Cleaning segment were $31.2 million for the period
      ended September 30, 2006 versus $25.3 million for the comparable period of
      2005.
      This represented an increase of $6.0 million, or 23.7%, over the prior
      period *.* Excluding
      the acquisition of Chore Boy ® ,
      revenues for this segment were up 12.5% for the period. The Comet ® brand
      revenue increased during the quarter due to strong consumer consumption,
      expanded distribution and royalty revenues earned from licensing agreements
      in
      Eastern Europe and for institutional sales in North America. Revenues for the
      Spic and Span ® brand
      increased during the period as a result of increased consumer consumption and
      expanded distribution of the dilutable products and antibacterial spray.





***Personal
      Care Segment***


Total
      revenues of the Personal Care segment were $7.0 million for the period ended
      September 30, 2006 versus $7.3 million for the comparable period of 2005. This
      represented a decrease of $286,000, or 3.9%, from the prior period. The sales
      decrease is a result of continued declines in consumer consumption trends for
      the Cutex ® ,
      Denorex ® and
      Prell ® brands.





**Gross
      Profit**


Gross
      profit for the period ended September 30, 2006 was $43.3 million, compared
      to
      $37.8 million for the comparable period of 2005. This represented an increase
      of
      $5.5 million, or 14.5%, over the period ended September 30, 2005. The increase
      in gross profit is primarily a result of the increased sales activity. Gross
      profit as a percent of sales was 51.2% for the period ended September 30, 2006
      versus 51.5% for the comparable period of 2005. The decrease in gross profit
      percentage is generally the result of increased shipments to non-North American
      markets which have a lower margin than our domestic markets. Revenues from
      markets outside of North America represented 3.6% of total revenues during
      the
      period versus 2.4% for the same period last year.


-45-


Additionally,
      during the three month period ended September 30, 2006, the Household Cleaning
      segment, which has a lower gross profit than the Over-the-Counter segment,
      represented 36.9% of total revenues as compared to 34.4% of total revenues
      during the three month period ended September 30, 2005.





***Over-the-Counter
      Drug Segment***


Gross
      profit of the Over-the-Counter segment was $28.3 million for the period ended
      September 30, 2006 versus $25.2 million for the comparable period of 2005.
      This
      represented an increase of $3.1 million, or 12.1%, over the prior period which
      was caused primarily by the increase in revenues. Gross profit as a percent
      of
      sales was 61.1% for the period ended September 30, 2006 versus 61.8% for the
      comparable period of 2005. The decrease in gross profit percentage is primarily
      the result higher allowances associated with international sales during the
      current period.





***Household
      Cleaning Segment***


Gross
      profit of the Household Cleaning segment was $12.3 million for the period ended
      September 30, 2006 versus $9.7 million for the comparable period of 2005. This
      represented an increase of $2.6 million, or 26.6%, over the prior period which
      was caused primarily by the increase in revenues. Gross profit as a percent
      of
      sales was 39.4% for the period ended September 30, 2006 versus 38.5% for the
      comparable period of 2005. The increase in gross profit percentage is primarily
      a result of an increase in royalties earned, which have no associated
      costs, from our international and institutional licensing arrangements with
      Procter & Gamble.





***Personal
      Care Segment***


Gross
      profit of the personal care segment was $2.7 million for the period ended
      September 30, 2006 versus $2.9 million for the comparable period of 2005. This
      represented a decrease of $147,000, or 5.1%, from the prior period which was
      caused primarily by the reduction in revenues. Gross profit as a percent of
      sales was 38.7% for the period ended September 30, 2006 versus 39.2% for the
      comparable period of 2005 *.* The
      decrease in gross profit percentage is a result of increased promotional pricing
      allowances and product costs.





**Contribution
      Margin**


Contribution
      margin, defined as gross profit less advertising and promotional expenses,
      was
      $33.8 million for the period ended September 30, 2006 versus $27.6 million
      for
      the comparable period of 2005. This represented an increase of $6.3 million,
      or
      22.7%, from the prior period. The contribution margin increase is a result
      of
      changes in sales and gross profit as previously discussed, and an $762,000
      decrease in advertising and promotion spending versus the comparable period
      in
      2005. The decline in advertising and promotions spending is primarily a result
      of lower spending in the Personal Care segment.





***Over-the-Counter
      Drug Segment***


Contribution
      margin of the Over-the-Counter drug segment was $21.2 million for the period
      ended September 30, 2006 versus $18.1 million for the comparable period of
      2005.
      This represented an increase of $3.1 million, or 17.3%, over the prior period.
      The contribution margin increase is a result of the gross profit increase as
      previously discussed, as well as a $69,000 decrease in advertising and promotion
      spending in the period ended September 30, 2006. The slight decrease in
      advertising and promotion spending is primarily due to the timing of Clear
      eyes ® advertising and promotional programs, offset by the aquisition of Dental
      Concepts.





***Household
      Cleaning Segment***


Contribution
      margin of the Household Cleaning segment was $10.3 million for the period ended
      September 30, 2006 versus $8.0 million for the comparable period of 2005. This
      represented an increase of $2.3 million, or 29.0%, from the prior period. The
      contribution margin increase is a result of the gross profit increase as
      previously discussed, partially offset by an increase of advertising and
      promotion support. The $280,000 increase in advertising and promotion spending
      is primarily a result of the Chore Boy ® acquisition.





***Personal
      Care Segment***


Contribution
      margin of the personal care segment was $2.4 million for the period ended
      September 30, 2006 versus $1.5 million for the comparable period of 2005. This
      represented an increase of $826,000, or 54.0%, from the prior period. The
      contribution margin increase is primarily the result of a $973,000
      reduction in advertising and promotion spending versus the comparable period
      in
      2005, offset by the gross profit decline as previously discussed.  The
      reduction in advertising and promotion is related to the reduction of national
      media support


-46-


for
      Cutex®,
      as we
      have shifted some of our advertising spending by increasing our promotional pricing allowances which are recorded as a reduction
      of sales.





**General
      and Administrative**


General
      and administrative expenses were $7.3 million for the period ended September
      30,
      2006 versus $4.1 million for the comparable period of 2005. The increase is
      primarily related to higher compensation costs as a result of additional staff
      added during the second half of our fiscal year ended March 31, 2006, increased
      stock-based compensation costs, as well as increased legal and professional
      fees.





**Depreciation
      and Amortization**


Depreciation
      and amortization expense was $2.4 million for the period ended September 30,
      2006 versus $2.6 million for the comparable period of 2005. An increase in
      amortization of intangible assets related to the Dental Concepts acquisition
      was
      offset by a reduction of the carrying value of trademarks related to the
      Personal Care segment resulting from an asset impairment charge of $7.4 million
      recorded during the three month period ended March 31, 2006.





**Interest
      Expense**


Net
      interest expense was $9.7 million for the period ended September 30, 2006 versus
      $8.7 million for the comparable period of 2005. This represented an increase
      of
      $1.1 million, or 12.4%, from the prior period. The increase in interest expense
      is due to the increase in interest rates associated with our variable rate
      indebtedness. The average cost of funds increased from 7.0% at September 30,
      2005 to 8.0% at September 30, 2006.





**Income
      Taxes**


The
      income tax provision for the period ended September 30, 2006 was $5.6 million,
      with an effective rate of 39.1%, compared to $4.8 million, with an effective
      rate of 39.3% for period ended September 30, 2005 *.*








-47-


**Sixth
      Month Period Ended September 30, 2006 compared to the Six
      Month**


**Period Ended September 30, 2005**








**Total
      Revenues**


Total
      revenues for the six month period ended September 30, 2006 were $160.5 million,
      compared to $136.8 million for the comparable period of 2005. This represented
      an increase of $23.7 million, or 17.3%, from the prior period. Excluding the
      impact of the Chore Boy ® and The
      Doctor’s ® brand,
      which were acquired in October and November 2005, respectively, revenues were
      up
      7.5%. The Over-the-Counter Drug segment had revenues of $85.9 million for the
      six month period ended September 30, 2006, an increase of $11.7 million, or
      15.8%, above revenues of $74.1 million for the six month period ended September
      30, 2005. The Household Cleaning segment had revenues of $61.3 million for
      the
      six month period ended September 30, 2006, an increase of $13.3 million, or
      27.6%, above revenues of $48.1 million for the six month period ended September
      30, 2005. The Personal Care segment had revenues of $13.3 million for the six
      month period ended September 30, 2006, a decrease of $1.3 million, or 9.0%,
      below revenues of $14.6 million for the six month period ended September 30,
      2005.





***Over-the-Counter
      Drug Segment***


Total
      revenues of the Over-the-Counter Drug segment were $85.8 million for the six
      month period ended September 30, 2006 versus $74.1 million for the comparable
      period of 2005. This represented an increase of $11.7 million, or 15.8%, from
      the prior period ended September 30, 2005. The revenue increase is primarily
      due
      to strong gains across all major brands in the segment. In addition, The
      Doctor’s ® brand,
      which was acquired with the Dental Concepts acquisition in November 2005,
      contributed to the revenue growth in the period. Excluding sales related to
      The
      Doctor’s ® brand,
      total revenues for this segment were up 7.0%. Clear eyes ® sales
      growth for the current period is a result of strong consumer consumption trends
      and the launch of Clear eyes ® Triple
      Action. Murine ® revenue
      increased primarily due to the launch of three homeopathic eye and ear care
      products during the three month period ended June 30, 2006, and increased
      shipments to international customers. Compound W ® revenue
      increased due to relatively weak shipments for the same period last year.
 Little Remedies’ revenue increased during the six month period primarily
      as a result of strong consumer consumption. Chloraseptic revenue increased
      during the six month period primarily as a result of five new items launched
      during the three month period ended September 30, 2006. Revenues of New
      Skin ® were
      down for the six month period primarily as a result of continued softness in
      the
      liquid bandage category.





***Household
      Cleaning Segment***


Total
      revenues of the Household Cleaning segment were $61.3 million for the six month
      period ended September 30, 2006 versus $48.1 million for the comparable period
      of 2005. This represented an increase of $13.3 million, or 27.6%, from the
      prior
      period *.* Excluding
      the acquisition of Chore Boy ® ,
      revenues for this segment were up 13.3% for the six month period. The
      Comet ® brand
      revenue increased during the six month period due to strong consumer
      consumption, expanded distribution and royalty revenues earned from licensing
      agreements in Eastern Europe and for institutional sales in North America.
      Revenues for the Spic and Span ® brand
      increased during the six month period as a result of increased consumer
      consumption and expanded distribution of dilutable product and antibacterial
      spray.





***Personal
      Care Segment***


Total
      revenues of the Personal Care segment were $13.3 million for the six month
      period ended September 30, 2006 versus $14.6 million for the comparable period
      of 2005. This represented a decrease of $1.3 million, or 9.0%, from the prior
      period. The sales decrease is a result of continued declines in consumer
      consumption trends for the Cutex ® ,
      Denorex ® and
      Prell ® brands.





**Gross
      Profit**


Gross
      profit for the six month period ended September 30, 2006 was $82.9 million,
      compared to $72.3 million for the comparable period of 2005. This represented
      an
      increase of $10.6 million, or 14.7%, from the six month period ended September
      30, 2005. The increase in gross profit is a result of the increased revenues.
      Gross profit as a percent of sales was 51.7% for the six month period ended
      September 30, 2006 versus 52.9% for the comparable period of 2005. The decrease
      in gross profit percentage is generally the result of higher product costs


-48-


and
      increased shipments to non-North American markets which have a lower margin
      than
      our domestic markets. Shipments to markets outside of North America represented
      3.8% of total revenues during the six month period versus 2.3% for the same
      period last year. Additionally, during the six month period ended September
      30,
      2006, the Household Cleaning segment, which has a lower gross profit than the
      Over-the Counter segment, represented 38.2% of total revenues as compared to
      35.1% of total revenues during the six month period ended September 30,
      2005.





***Over-the-Counter
      Drug Segment***


Gross
      profit of the Over-the-Counter segment was $53.5 million for the six month
      period ended September 30, 2006 versus $46.9 million for the comparable period
      of 2005. This increase of $6.5 million, or 13.9%, over the prior period resulted
      primarily from the increase in revenues. Gross profit as a percent of sales
      was
      62.3% for the six month period ended September 30, 2006 versus 63.3% for the
      comparable period of 2005. The decrease in gross profit percentage is primarily
      the result of higher packaging costs incurred and higher allowances associated
      with international sales during the current period.





***Household
      Cleaning Segment***


Gross
      profit of the Household Cleaning segment was $24.2 million for the six month
      period ended September 30, 2006 versus $19.1 million for the comparable period
      of 2005. This increase of $5.1 million, or 26.7%, over the prior period resulted
      primarily from the increase in revenues. Gross profit as a percent of sales
      was
      39.5% for the six month period ended September 30, 2006 versus 39.8% for the
      comparable period of 2005, primarily as a result of increased product and
      transportation costs, partially offset by royalties earned, with no associated
      costs, from our international and institutional licensing arrangements with
      Procter & Gamble.





***Personal
      Care Segment***


Gross
      profit of the personal care segment was $5.2 million for the six month period
      ended September 30, 2006 versus $6.2 million for the comparable period of 2005.
      This decrease of $1.0 million, or 16.8%, from the prior period resulted
      primarily from the decrease in revenues. Gross profit as a percent of sales
      was
      39.1% for the six month period ended September 30, 2006 versus 42.7% for the
      comparable period of 2005 *.* The
      decrease in gross profit percentage is a result of increased promotional pricing
      allowances and product costs.





**Contribution
      Margin**


Contribution
      margin, defined as gross profit less advertising and promotional expenses,
      was
      $66.0 million for the six month period ended September 30, 2006 versus $53.4
      million for the comparable period of 2005. This represented an increase of
      $12.6
      million, or 23.7%, from the prior period. The contribution margin increase
      is a
      result of increases in revenues and gross profit as previously discussed and
      a
      $2.1 million decrease in advertising and promotion spending versus the
      comparable period in 2005. The decline in advertising and promotion spending
      is
      primarily a result of lower spending in the Over-the-Counter Drug and Personal
      Care segments.





***Over-the-Counter
      Drug Segment***


Contribution
      margin of the Over-the-Counter drug segment was $41.0 million for the six month
      period ended September 30, 2006 versus $33.7 million for the comparable period
      of 2005. The contribution margin increase is a result of the gross profit
      increase as previously discussed, as well as an $783,000 decrease in advertising
      and promotion spending in the six month period ended September 30, 2006. The
      decrease in advertising and promotion spending is primarily due to the timing
      of
      Clear eyes ® advertising and promotional programs and a reduction in New Skin advertising,
      partially offset by spending against the Doctors’s brand, which was acquired in
      November 2005.





***Household
      Cleaning Segment***


Contribution
      margin of the Household Cleaning segment was $20.5 million for the six month
      period ended September 30, 2006 versus $15.6 million for the comparable period
      of 2005. This represented an increase of $4.9 million, or 31.4%, from the prior
      period. The contribution margin increase is a result of the gross profit
      increase as previously discussed, partially offset by slightly higher
      advertising and promotion support. Advertising and promotion spending increased
      by $200,000 versus the comparable period of the prior year primarily due to
      the
      spending against Chore Boy ® ,
      partially offset by lower media spending for Comet ® .


-49-


***Personal
      Care Segment***


Contribution
      margin of the personal care segment was $4.5 million for the six month period
      ended September 30, 2006 versus $4.1 million for the comparable period of 2005.
      This represented an increase of $433,000, or 10.6%, from the prior period.
      The
      contribution margin increase is primarily the result of the gross profit decline
      as previously discussed, offset by a $1.5 million reduction in advertising
      and
      promotion spending versus the comparable period in 2005. The reduction in
      advertising and promotion is related to the reduction of national media support
      for Cutex ® ,
      as we
      have shifted some of our advertising spending by increasing our promotional
      pricing allowances which are recorded as a reduction of sales.





**General
      and Administrative**


General
      and administrative expenses were $13.7 million for the six month period ended
      September 30, 2006 versus $9.0 million for the comparable period of 2005. The
      increase is primarily related to additional staff added during the second half
      of our fiscal year ended March 31, 2006, severance compensation related to
      the
      departure of a member of management during the three month period ended June
      30,
      2006, increased stock-based compensation costs, as well as increased legal
      and
      professional fees.





**Depreciation
      and Amortization**


Depreciation
      and amortization expense was $4.8 million for the six month period ended
      September 30, 2006 versus $5.3 million for the comparable period of 2005. An
      increase in amortization related to intangible assets purchased in the Dental
      Concepts acquisition was offset by a reduction of the carrying value of certain
      trademarks. During the three month period ended March 31, 2006, we recognized
      an
      asset impairment charge of approximately $7.4 million related to intangible
      assets in our Personal Care segment.





**Interest
      Expense**


Net
      interest expense was $19.5 million for the six month period ended September
      30,
      2006 versus $17.2 million for the comparable period of 2005. This represented
      an
      increase of $2.4 million, or 13.7%, from the prior period. The increase in
      interest expense is due to the increase in interest rates associated with our
      variable rate indebtedness. The average cost of funds increased from 6.9% at
      September 30, 2005 to 7.9% at September 30, 2006.





**Income
      Taxes**


The
      income tax provision for the six month period ended September 30, 2006 was
      $10.9
      million, with an effective rate of 39.1%, compared to $8.6 million, with an
      effective rate of 39.3% for period ended September 30, 2005 *.*



















-50-


**Liquidity
      and Capital Resources**


We
      have
      financed and expect to continue to finance our operations with a combination
      of
      internally generated funds and borrowings. In February 2005, we completed an
      initial public offering that provided the Company with net proceeds of $416.8
      million which were used to repay
      the
      $100.0 million outstanding under the Tranche C Facility of our Senior Credit
      Facility, to redeem $84.0 million in aggregate principal amount of our existing
      9.25% Senior Notes, to
      repurchase common stock held by the GTCR funds and the TCW/Crescent funds,
      and
      to redeem all of the outstanding senior preferred units and class B preferred
      units held by previous investors in Prestige International Holdings, LLC, the
      predecessor-in-interest to Prestige Brands Holdings, Inc. Effective
      upon the completion of the IPO, we entered into an amendment to the credit
      agreement that, among other things, allows us to increase the indebtedness
      under
      our Tranche B Term Loan Facility to $200.0 million and allows for an increase
      in
      our Revolving Credit Facility up to $60.0 million. Our
      principal uses of cash are for operating expenses, debt service, acquisitions,
      working capital and capital expenditures.





**Six
                Months Ended September 30**
            *******(In
                thousands)***
            ****
            **2006**
            ****
            **2005**Cash
                provided by (used for):Operating
                Activities
            
            $
            42,734
            
            $
            24,530Investing
                Activities
            
            
            (31,555
            )
            
            (297
            )Financing
                Activities
            
            
            (8,871
            )
            
            (1,982
            )





Net
      cash
      provided by operating activities was $42.7 million for the six month period
      ended September 30, 2006 compared to $24.5 million for the six month period
      ended September 30, 2005. The $18.2 million increase in net cash provided by
      operating activities was primarily the result of the following:





·
            An
                increase of net income of $3.7 million from $13.3 million for the
                six
                month period ended
              September
                30, 2005 to $17.0 million for the six month period ended September
                30,
                2006,


·
            A
                decrease in non-cash expenses of $1.6 million for the six month period
                ended September 30,
              2006
                compared to the six month period ended September 30, 2005,
                and


·
            An
                increase in cash provided by changes in the components of working
                capital
                for the six month
              period
                ended September 30, 2006 of $16.1 million over the six month period
                ended
                September
              30,
                2005.





Net
      cash
      used for investing activities was $31.6 million for the six month period ended
      September 30, 2006 compared to $297,000 for the six month period ended September
      30, 2005. The net cash used for investing activities for the six month period
      ended September 30, 2006, was primarily the result of the acquisition of Wartner
      USA, B.V., while during the six month period ended September 30, 2005, cash
      was
      used primarily for the acquisition of leasehold improvements for our Irvington,
      New York headquarters.





Net
      cash
      used for financing activities was $8.9 million for the six month period ended
      September 30, 2006 compared to $2.0 million for the six month period ended
      September 30, 2005. The period-to-period increase was primarily the result
      of
      the repayment of $7.0 million indebtedness related to our Revolving Credit
      Facility which was drawn upon in November 2005 to fund the acquisition of Dental
      Concepts, LLC.








**Capital
      Resources**





As
      of
      September 30, 2006, we had an aggregate of $489.8 million of outstanding
      indebtedness, which consisted of the following:





·
            $363.8
                million of borrowings under the Tranche B Term Loan Facility,
                and





·
            $126.0
                million of 9.25% Senior Notes due
                2012.





We
      had
      $60.0 million of borrowing capacity available under the Revolving Credit
      Facility at such time, as well as $200.0 million available under the Tranche
      B
      Term Loan Facility.


-51-


All
      loans
      under the Senior Credit Facility bear interest at floating rates, based on
      either the prime rate, or at our option, the LIBOR rate, plus an applicable
      margin. As of September 30, 2006, an aggregate of $363.8 million was outstanding
      under the Senior Credit Facility at a weighted average interest rate of
      7.26%.





In
      June
      2004, we purchased a 5% interest rate cap agreement with a notional amount
      of
      $20.0 million which expired in June 2006. In March 2005, we purchased interest
      rate cap agreements that became effective August 30, 2005, with a total notional
      amount of $180.0 million and LIBOR cap rates ranging from 3.25% to 3.75%. On
      May
      31, 2006, an interest rate cap agreement with a notional amount of $50.0 million
      and a 3.25% cap rate expired. The remaining interest rate cap agreements
      terminate on May 30, 2007 and 2008 as to notional amounts of $80.0 million
      and
      $50.0 million, respectively. The fair value of the interest rate cap agreements
      was $2.2 million at September 30, 2006.





The
      Tranche B Term Loan Facility matures in October 2011. We must make quarterly
      amortization payments on the Tranche B Term Loan Facility equal to $933,000,
      representing 0.25% of the initial principal amount of the term loan. The
      Revolving Credit Facility matures and the commitments relating to the Revolving
      Credit Facility terminate in April 2009. The obligations under the Senior Credit
      Facility are guaranteed on a senior basis by Prestige Brands International,
      LLC
      and all of its domestic subsidiaries, other than the borrower (Prestige Brands,
      Inc.), and are collateralized by substantially all of our assets.





The
      Revolving Credit Facility and the Tranche B Term Loan Facility contain various
      financial covenants, including provisions that require us to maintain certain
      leverage ratios, interest coverage ratios and fixed charge coverage ratios.
      The
      Revolving Credit Facility and the Tranche B Term Loan Facility, as well as
      the
      Senior Notes contain provisions that accelerate our indebtedness on certain
      changes in control and restrict us from undertaking specified corporate actions,
      including, asset dispositions, acquisitions, payment of dividends and other
      specified payments, repurchasing the Company’s equity securities in the public
      markets, incurrence of indebtedness, creation of liens, making loans and
      investments and transactions with affiliates. Specifically, we
      must:





·
            have
                a leverage ratio of less than 5.25 to 1.0 for the quarter ended September
                30, 2006,decreasing
                over time to 3.75 to 1.0 for the quarter ending September 30, 2010,
                and remaininglevel
                thereafter,





·
            have
                an interest coverage ratio of greater than 2.75 to 1.0 for the quarter
                ended September 30,2006,
                increasing over time to 3.25 to 1.0 for the quarter ending March
                31, 2010,
                and





·
            have
                a fixed charge coverage ratio of greater than 1.5 to 1.0 for the
                quarter
                ended September30,
                2006, and for each quarter thereafter until the quarter ending
                March 31, 2011.





At
      September 30, 2006, we were in compliance with the applicable financial and
      restrictive covenants under the Senior Credit Facility and the indenture
      governing the Senior Notes.





Our
      principal sources of funds are anticipated to be cash flows from operating
      activities and available borrowings under the Revolving Credit Facility and
      Tranche B Term Loan Facility. We believe that these funds will provide us with
      sufficient liquidity and capital resources for us to meet our current and future
      financial obligations, as well as to provide funds for working capital, capital
      expenditures and other needs for at least the next 12 months. We regularly
      review acquisition opportunities and other potential strategic transactions,
      which may require additional debt or equity financing. If additional financing
      is required, there are no assurances that it will be available, or if available,
      that it can be obtained on terms favorable to us or on a basis that is not
      dilutive to our stockholders.








-52-


**Commitments**





As
      of
      September 30, 2006, we had ongoing commitments under various contractual and
      commercial obligations as follows:




**Payments
                Due by Period**
            *******(In Millions)***
            ****
            ****
            ****
            **Less than**
            ****
            **1 to 3**
            ****
            **4 to 5**
            ****
            **After 5**
            ******Contractual
                Obligations**
            ****
            **Total**
            ****
            **1 Year**
            ****
            **Years**
            ****
            **Years**
            ****
            **Years**Long-term
                debt
            
            $
            489.7
            
            $
            3.7
            
            $
            7.5
            
            $
            352.5
            
            $
            126.0Interest
                on long-term debt(1)
            
            
            181.7
            
            
            38.2
            
            
            75.4
            
            
            61.8
            
            
            6.3Operating
                leases
            
            
            1.8
            
            
            0.6
            
            
            1.1
            
            
            0.1
            
            
            --Total
                contractual cash obligations
            
            $
            673.2
            
            $
            42.5
            
            $
            84.0
            
            $
            414.4
            
            $
            132.3





(1)
            Represents
                the estimated interest obligations on the outstanding balances of
                the
                Revolving Credit Facility, Tranche B Term Loan Facility and Senior
                Notes,
                together, assuming scheduled principal payments (based on the terms
                of the
                loan agreements) were made and assuming a weighted average interest
                rate
                of 8.11%. Estimated interest obligations would be different under
                different assumptions regarding interest rates or timing of principal
                payments. If interest rates on borrowings with variable rates increased
                by
                1%, interest expense would increase approximately $3.6 million, in
                the
                first year. However, given the protection afforded by the interest
                rate
                cap agreements, the impact of a one percentage point increase would
                be
                limited to $2.3 million.








**Critical
      Accounting Policies and Estimates**





The
      Company’s significant accounting policies are described in the notes to the
      unaudited financial statements included elsewhere in this Quarterly Report
      on
      Form 10-Q, as well as in our Annual Report on Form 10-K for the year ended
      March
      31, 2006. Both the
      Company and Prestige Brands International, LLC utilize the same critical
      accounting policies. While all significant accounting policies are important
      to
      our consolidated financial statements, certain of these policies may be viewed
      as being critical. Such policies are those that are both most important to
      the
      portrayal of our financial condition and results from operations and require
      our
      most difficult, subjective and complex estimates and assumptions that affect
      the
      reported amounts of assets, liabilities, revenues, expenses or the related
      disclosure of contingent assets and liabilities. These estimates are based
      upon
      our historical experience and on various other assumptions that we believe
      to be
      reasonable under the circumstances. Actual results may differ materially from
      these estimates under different conditions. The most critical accounting
      policies are as follows:





***Revenue
      Recognition***


We
      comply
      with the provisions of Securities and Exchange Commission Staff Accounting
      Bulletin 104 “Revenue Recognition,” which states that revenue should be
      recognized when the following revenue recognition criteria are met: (1)
      persuasive evidence of an arrangement exists; (2) the product has been shipped
      and the customer takes ownership and assumes the risk of loss; (3) the selling
      price is fixed or determinable; and (4) collection of the resulting receivable
      is reasonably assured. We have determined that the transfer of risk of loss
      generally occurs when product is received by the customer, and, accordingly
      recognize revenue at that time. Provision
      is made for estimated discounts related to customer payment terms and estimated
      product returns at the time of sale based on our historical
      experience.





As
      is
      customary in the consumer products industry, we participate in the promotional
      programs of our customers to enhance the sale of our products. The
      cost
      of these promotional programs varies based on the actual number of units sold
      during a finite period of time. We estimate the cost of such promotional
      programs at their inception based on historical experience and current market
      conditions and reduce sales by such estimates. These
      promotional programs consist of direct to consumer incentives such as coupons
      and temporary price reductions, as well as incentives to our customers, such
      as
      slotting fees and cooperative advertising. We do not provide


-53-


incentives
      to customers for the acquisition of product in excess of normal inventory
      quantities since such incentives increase the potential for future returns,
      as
      well as reduce sales in the subsequent fiscal periods.





Estimates
      of costs of promotional programs are based on (i) historical sales experience,
      (ii) the current offering, (iii) forecasted data, (iv) current market
      conditions, and (v) communication with customer purchasing/marketing personnel.
      At the completion of the promotional program, the estimated amounts are adjusted
      to actual results. While our promotional expense for the year ended March 31,
      2006 was $13.3 million, we participated in 4,700 promotional campaigns,
      resulting in an average cost of $2,800 per campaign. Of such amount, only 845
      payments were in excess of $5,000. We believe that the estimation methodologies
      employed, combined with the nature of the promotional campaigns, makes the
      likelihood remote that our obligation would be misstated by a material amount.
      However, for illustrative purposes, had we underestimated the promotional
      program rate by 10% for the three and six month periods ended September 30,
      2006, our sales and operating income would have been adversely affected by
      approximately $315,000 and $699,000, respectively.





We
      also
      periodically run couponing programs in Sunday newspaper inserts or as on-package
      instant redeemable coupons. We utilize a national clearing house to process
      coupons redeemed by customers. At the time a coupon is distributed, a provision
      is made based upon historical redemption rates for that particular product,
      information provided as a result of the clearing house’s experience with coupons
      of similar dollar value, the length of time the coupon is valid, and the
      seasonality of the coupon drop, among other factors. During the year ended
      March
      31, 2006, we had 20 coupon events. The amount expensed and accrued for these
      events during the year was $2.7 million, of which $2.4 million was redeemed
      during the year. During the six month period ended September 30, 2006, we had
      9
      coupon events. The amount expensed and accrued for these events during the
      three
      and six month periods ended September 30, 2006 was $600,000 and $1.5 million,
      respectively, of which $800,000 and $1.0 million, respectively, was redeemed
      during each period.





***Allowances
      for Product Returns***


Due
      to
      the nature of the consumer products industry, we are required to estimate future
      product returns. Accordingly, we record an estimate of product returns
      concurrent with the recording of sales. Such estimates are made after analyzing
      (i) historical return rates, (ii) current economic trends, (iii) changes in
      customer demand, (iv) product acceptance, (v) seasonality of our product
      offerings, and (vi) the impact of changes in product formulation, packaging
      and
      advertising.





We
      construct our returns analysis by looking at the previous year’s return history
      for each brand. Subsequently, each month, we estimate our current return rate
      based upon an average of the previous six months’ return rate and review that
      calculated rate for reasonableness giving consideration to the other factors
      described above. Our historical return rate has been relatively stable; for
      example, for the years ended March 31, 2006, 2005 and 2004, returns represented
      3.5%, 3.6% and 3.6%, respectively, of gross sales. At September 30, 2006 and
      March 31, 2006, the
      allowance for sales returns was $1.4 million and $1.7 million,
      respectively.





While
      we
      utilize the methodology described above to estimate product returns, actual
      results may differ materially from our estimates, causing our future financial
      results to be adversely affected. Among the factors that could cause a material
      change in the estimated return rate would be significant unexpected returns
      with
      respect to a product or products that comprise a significant portion of our
      revenues. Based upon the methodology described above and our actual returns’
experience, management believes the likelihood of such an event is remote.
      As
      noted, over the last three years, our actual product return rate has stayed
      within a range of 3.5% to 3.6% of gross sales. An increase of 0.1% in our
      estimated return rate as a percentage of gross sales would have adversely
      affected our reported sales and operating income for the three and six month
      periods ended September 30, 2006 by approximately $98,000 and $187,000,
      respectively.





***Allowances
      for Obsolete and Damaged Inventory***


We
      value
      our inventory at the lower of cost or market value. Accordingly, we reduce
      our
      inventories for the diminution of value resulting from product obsolescence,
      damage or other issues affecting marketability equal to the difference between
      the cost of the inventory and its estimated market value. Factors utilized
      in
      the determination of estimated market value include (i) current sales data
      and
      historical return rates, (ii) estimates of


-54-


future
      demand, (iii) competitive pricing pressures, (iv) new product introductions,
      (v)
      product expiration dates, and (vi) component and packaging
      obsolescence.





Many
      of
      our products are subject to expiration dating. As a general rule our customers
      will not accept goods with expiration dating of less than 12 months from the
      date of delivery. To monitor this risk, management utilizes a detailed
      compilation of inventory with expiration dating between zero and 15 months
      and
      reserves for 100% of the cost of any item with expiration dating of 12 months
      or
      less. At September 30, 2006 and March 31, 2006, the allowance for obsolete
      and
      slow moving inventory represented 4.8% and 2.9%, respectively, of total
      inventory. A 1.0% increase in our allowance for obsolescence at September 30,
      2006 would have adversely affected our reported operating income for the three
      and six month periods ended September 30, 2006 by approximately $308,000.
      Inventory obsolescence costs charged to operations for the three and six month
      periods ended September 30, 2006 were 0.26% and 0.52% of net sales.





***Allowance
      for Doubtful Accounts***


In
      the
      ordinary course of business, we grant non-interest bearing trade credit to
      our
      customers on normal credit terms. We maintain an allowance for doubtful accounts
      receivable which is based upon our historical collection experience and expected
      collectibility of the accounts receivable. In an effort to reduce our credit
      risk, we (i) establish credit limits for all of our customer relationships,
      (ii)
      perform ongoing credit evaluations of our customers’ financial condition, (iii)
      monitor the payment history and aging of our customers’ receivables, and (iv)
      monitor open orders against an individual customer’s outstanding receivable
      balance.





We
      establish specific reserves for those accounts which file for bankruptcy, have
      no payment activity for 180 days or have reported major negative changes to
      their financial condition. The allowance for bad debts at September 30, 2006
      and
      March 31, 2006 amounted to 0.1% and 0.3%, respectively, of accounts receivable.
      For the three and six month periods ended September 30, 2006 we recorded net
      recoveries of $67,000 and $13,000, respectively.





While
      management believes that it is diligent in its evaluation of the adequacy of
      the
      allowance for doubtful accounts, an unexpected event, such as the bankruptcy
      filing of a major customer, could have an adverse effect on our future financial
      results. A 0.1% increase in our bad debt expense as a percentage of net sales
      would have resulted in a decrease in operating income for the three and six
      month periods ended September 30, 2006 of approximately $85,000 and $161,000,
      respectively.





***Valuation
      of Intangible Assets and Goodwill***


Goodwill
      and intangible assets amounted to $965.2 million and $935.1 million at September
      30, 2006 and March 31, 2006, respectively. As of September 30, 2006, goodwill
      and intangible assets were apportioned among our three operating segments as
      follows:





**Over-the-Counter**
              **Drug**
            ****
            **Household**
              **Cleaning**
            ****
            **Personal**
              **Care**
            ****
            **Consolidated**Goodwill
            
            $
            227,486
            
            $
            72,549
            
            $
            2,751
            
            $
            302,786Intangible
                assetsIndefinite
                lived
            
            
            374,070
            
            
            170,893
            
            
            --
            
            
            544,963Finite
                lived
            
            
            98,566
            
            
            27
            
            
            18,855
            
            
            117,448472,636
            
            
            170,920
            
            
            18,855
            
            
            662,411$
            700,122
            
            $
            243,469
            
            $
            21,606
            
            $
            965,197








Our *Clear
      Eyes* ® *,
      New-Skin* ® *,
      Chloraseptic* ® ** and *Compound
      W* ® ** brands
      comprise the majority of the value of the intangible assets within the
      Over-The-Counter segment. *Denorex* ® *,
      Cutex* ® ** and *Prell* ® ** comprised
      substantially all of the intangible asset value within the Personal Care
      segment. The *Comet* ® *,
      Spic and Span* ®


-55-


and *Chore
      Boy* ® ** brands
      comprise substantially all of the intangible asset value within the Household
      Cleaning segment.





Goodwill
      and intangible assets comprise substantially all of our assets. Goodwill
      represents the excess of the purchase price over the fair value of assets
      acquired and liabilities assumed in a purchase business combination. Intangible
      assets generally represent our trademarks, brand names and patents. When we
      acquire a brand, we are required to make judgments regarding the value assigned
      to the associated intangible assets, as well as their respective useful lives.
      Management considers many factors, both prior to and after, the acquisition
      of
      an intangible asset in determining the value, as well as the useful life,
      assigned to each intangible asset that the Company acquires or continues to
      own
      and promote. The most significant factors are:





·
            **Brand
                History**


A
      brand
      that has been in existence for a long period of time ( *e.g.,* 25,
      50 or
      100 years) generally warrants a higher valuation and longer life (sometimes
      indefinite) than a brand that has been in existence for a very short period
      of
      time. A brand that has been in existence for an extended period of time
      generally has been the subject of considerable investment by its previous
      owner(s) to support product innovation and advertising and
      promotion.





·
            **Market
                Position**


Consumer
      products that rank number one or two in their respective market generally have
      greater name recognition and are known as quality product offerings, which
      warrant a higher valuation and longer life than products that lag in the
      marketplace.





·
            **Recent
                and Projected Sales Growth**


Recent
      sales results present a snapshot as to how the brand has performed in the most
      recent time periods and represent another factor in the determination of brand
      value. In addition, projected sales growth provides information about the
      strength and potential longevity of the brand. A brand that has both strong
      current and projected sales generally warrants a higher valuation and a longer
      life than a brand that has weak or declining sales. Similarly, consideration
      is
      given to the potential investment, in the form of advertising and promotion,
      that is required to reinvigorate a brand that has fallen from
      favor.





·
            **History
                of and Potential for Product
                Extensions**


Consideration
      also is given to the product innovation that has occurred during the brand’s
      history and the potential for continued product innovation that will determine
      the brand’s future. Brands that can be continually enhanced by new product
      offerings generally warrant a higher valuation and longer life than a brand
      that
      has always “followed the leader”.





To
      assist
      in the valuation process, management engages an independent valuation firm
      to
      provide an evaluation of the acquired intangibles. After consideration of the
      factors described above, as well as current economic conditions and changing
      consumer behavior, management prepares a determination of the intangible’s value
      and useful life based on its analysis of the requirements of Statements No.
      141
      and No. 142. Under Statement No. 142, goodwill and indefinite-lived intangible
      assets are no longer amortized, but must be tested for impairment at least
      annually. Intangible assets with finite lives are amortized over their
      respective estimated useful lives and must also be tested for
      impairment.





On
      an
      annual basis, or more frequently if conditions indicate that the carrying value
      of the asset may not be recovered, management performs a review of both the
      values and useful lives assigned to goodwill and intangible assets and tests
      for
      impairment.





*Finite-Lived
      Intangible Assets*


As
      mentioned above, management performs an annual review, or more frequently if
      necessary, to ascertain the impact of events and circumstances on the estimated
      useful lives and carrying values of our trademarks and trade names. In
      connection with this analysis, management:


-56-





·
            Reviews
                period-to-period sales and profitability 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.





Should
      analysis of any of the aforementioned factors warrant a change in the estimated
      useful life of the intangible asset, management will reduce the estimated useful
      life and amortize the carrying value prospectively over the shorter remaining
      useful life. Management’s projections are utilized to assimilate all of the
      facts, circumstances and expectations related to the trademark or trade name
      and
      estimate the cash flows over its useful life. In the event that the long-term
      projections indicate that the carrying value is in excess of the undiscounted
      cash flows expected to result from the use of the intangible assets, management
      is required to record an impairment charge. Once that analysis is completed,
      a
      discount rate is applied to the cash flows to estimate fair value. The
      impairment charge is measured as the excess of the carrying amount of the
      intangible asset over fair value as calculated using the discounted cash flow
      analysis. Future events, such as competition, technological advances and
      reductions in advertising support for our trademarks and trade names could
      cause
      subsequent evaluations to utilize different assumptions.





*Indefinite-Lived
      Intangible Assets*


In
      a
      manner similar to finite-lived intangible assets, on an annual basis, or more
      frequently if necessary, management analyzes current events and circumstances
      to
      determine whether the indefinite life classification for a trademark or trade
      name continues to be valid. Should circumstance warrant a finite life, the
      carrying value of the intangible asset would then be amortized prospectively
      over the estimated remaining useful life.





In
      connection with this analysis, management also tests the indefinite-lived
      intangible assets for impairment by comparing the carrying value of the
      intangible asset to its estimated fair value. Since quoted market prices are
      seldom available for trademarks and trade names such as ours, we utilize present
      value techniques to estimate fair value. Accordingly, management’s projections
      are utilized to assimilate all of the facts, circumstances and expectations
      related to the trademark or trade name and estimate the cash flows over its
      useful life. In performing this analysis, management considers the same types
      of
      information as listed above in regards to finite-lived intangible assets. Once
      that analysis is completed, a discount rate is applied to the cash flows to
      estimate fair value. Future events, such as competition, technological advances
      and reductions in advertising support for our trademarks and trade names could
      cause subsequent evaluations to utilize different assumptions.





*Goodwill*


As
      part
      of its annual test for impairment of goodwill, management estimates the
      discounted cash flows of each reporting unit, which is at the brand level and
      one level below the operating segment level, to estimate their respective fair
      values. In performing this analysis, management considers the same types of
      information as listed above in regards to finite-lived intangible assets. In
      the
      event that the carrying amount of the reporting unit exceeds the fair value,
      management would then be required to allocate the estimated fair value of the
      assets and liabilities of the reporting unit as if the unit was acquired in
      a
      business combination, thereby revaluing the carrying amount of goodwill. In
      a
      manner similar to indefinite-lived assets, future events, such as competition,
      technological advances and reductions in advertising support for our trademarks
      and trade names could cause subsequent evaluations to utilize different
      assumptions.





In
      estimating the value of trademarks and trade names, as well as goodwill, at
      March 31, 2006, management applied a discount rate of 10.3%, the Company’s then
      current weighted-average cost of funds, to the estimated cash flows; however
      that rate, as well as future cash flows may be influenced by such factors,
      including (i) changes in interest rates, (ii) rates of inflation, or (iii)
      sales
      or contribution margin reductions. In the event that


-57-


the
      carrying value exceeded the estimated fair value of either intangible assets
      or
      goodwill, we would be required to recognize an impairment charge. Additionally,
      continued decline of the fair value ascribed to an intangible asset or a
      reporting unit caused by external factors may require future impairment
      charges.





During
      the three month period ended March 31, 2006, we recorded non-cash charges
      related to the impairment of intangible assets and goodwill of the Personal
      Care
      segment of $7.4 million and $1.9 million, respectively, because the carrying
      amounts of these “branded” assets exceeded their fair market values primarily as
      a result of declining sales caused by product competition. Should the related
      fair values of goodwill and intangible assets continue to be adversely affected
      as a result of declining sales or margins caused by competition, technological
      advances or reductions in advertising and promotional expenses, the Company
      may
      be required to record additional impairment charges.





***Stock-Based
      Compensation***


During
      2006, we adopted FASB Statement No. 123(R), “Share-Based Payment” (“Statement
      No. 123(R)”) with the initial grants of restricted stock and options to purchase
      common stock to employees and directors in accordance with the provisions of
      the
      Plan. Statement
      No. 123(R) requires us to measure the cost of services to be rendered based
      on
      the grant-date fair value of the equity award. Compensation expense is to be
      recognized over the period which an employee is required to provide service
      in
      exchange for the award, generally referred to as the requisite service period.
      Information utilized in the determination of fair value includes the
      following:





·
            Type
                of instrument (i.e.: restricted shares vs. an option, warrant, or
                performance shares),


·
            Strike
                price of the instrument,


·
            Market
                price of the Company’s common stock on the date of
                grant,


·
            Discount
                rates,


·
            Duration
                of the instrument, and


·
            Volatility
                of the Company’s common stock in the public
                market.





Additionally,
      management must estimate the expected attrition rate of the recipients to enable
      it to estimate the amount of non-cash compensation expense to be recorded in
      our
      financial statements. While management uses diligent analysis to estimate the
      respective variables, a change in assumptions or market conditions, as well
      as
      changes in the anticipated attrition rates, could have a significant impact
      on
      the future amounts recorded as non-cash compensation expense. The Company
      recorded non-cash compensation expense of $233,000 during the three month period
      ended September 30, 2006, and net non-cash compensation of $224,000 for the
      six
      months ended September 30, 2006. During
      the three month period ended June 30, 2006, the Company recorded a net non-cash
      compensation credit of $9,000 as a result of the reversal of compensation
      charges in the amount of $142,000 associated with the departure of a former
      member of management. The Company recorded non-cash compensation expense
      of $110,000 during the three and six month periods ended September 30,
      2005.





***Recent
      Accounting Pronouncements***


In
      November 2004, the FASB issued Statement of Financial Accounting Standards
      (“SFAS”) No. 151, “Inventory Costs” (“Statement No. 151”). Statement No. 151
      amended the guidance in Accounting Research Bulletin No. 43, Chapter 4,
“Inventory Pricing”, and requires the exclusion of certain costs, such as
      abnormal amounts of freight, handling costs and manufacturing overhead, from
      inventories. Additionally, Statement No. 151 requires the allocation of fixed
      production overhead to inventory based on normal capacity of the production
      facilities. The provisions of Statement No. 151 are effective for costs incurred
      during fiscal years beginning after June 15, 2005. The adoption of Statement
      No.
      151 did not have a material impact on the Company’s financial condition, results
      of operations or cash flows for the three and six month periods ended September
      30, 2006.





In
      June
      2006, the FASB issued
      FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes--an
      interpretation of FASB Statement 109” (“FIN 48”) which clarifies the accounting
      for uncertainty in income taxes recognized in a company’s financial statements
      in accordance with FASB Statement No. 109. FIN 48 is effective for fiscal years
      beginning after December 15, 2006, and prescribes a recognition threshold and
      measurement attributes for the financial statement recognition and measurement
      of a tax position taken or expected to be taken in a tax return. While the
      Company has not completed a comprehensive analysis of FIN 48, the adoption
      of
      FIN


-58-


48
      is not
      expected to have a material impact on the Company’s consolidated financial
      position, results of operations or cash flows.





In
      September 2006, the FASB issued SFAS
      No.
      157, “Fair Value Measurements” (“Statement No. 157”) to address inconsistencies
      in the definition and determination of fair value pursuant to generally accepted
      accounting principles (“GAAP”). Statement No. 157 provides a single definition
      of fair value, establishes a framework for measuring fair value in GAAP and
      expands disclosures about fair value measurements in an effort to increase
      comparability related to the recognition of market-based assets and liabilities
      and their impact on earnings. Statement No. 157 is effective for interim
      financial statements issued during the fiscal year beginning after November
      15,
      2007.





Management
      has reviewed and continues to monitor the actions of the various financial
      and
      regulatory reporting agencies and is currently not aware of any pronouncement
      that could have a material impact on our consolidated financial position,
      results of operations or cash flows.








**Off-Balance
      Sheet Arrangements**


We
      do not
      have any off-balance sheet arrangements or financing activities with
      special-purpose entities.





**Inflation**


Inflationary
      factors such as increases in the costs of raw materials, packaging materials,
      purchased product and overhead may adversely affect our operating results.
      Although we do not believe that inflation has had a material impact on our
      financial condition or results from operations for the periods referred to
      above, a high rate of inflation in the future could have a material adverse
      effect on our business, financial condition or results from operations. The
      recent increase in crude oil prices has had an adverse impact on transportation
      costs, as well as, certain petroleum based raw materials and packaging material.
      Although the Company takes efforts to minimize the impact of inflationary
      factors, including raising prices to our customers, a high rate of pricing
      volatility associated with crude oil supplies may have an adverse effect on
      our
      future operating results.





**Seasonality**


The
      first
      quarter of our fiscal year typically has the lowest level of revenue due to
      the
      seasonal nature of certain of our brands relative to the summer and winter
      months. In addition, the first quarter is the least profitable quarter due
      the
      increased advertising and promotional spending to support those brands with
      a
      summer selling season, such as Compound W, Cutex and New Skin. The Company’s
      advertising and promotional campaign in the third quarter influence sales in
      the
      fourth quarter winter months. Additionally, the fourth quarter typically has
      the
      lowest level of advertising and promotional spending as a percent of
      revenue.


-59-


**CAUTIONARY
      STATEMENT REGARDING FORWARD-LOOKING STATEMENTS**





This
      Quarterly Report on Form 10-Q contains “forward-looking statements” within the
      meaning of the Private Securities Litigation Reform Act of 1995 (the “PSLRA”),
      including, without limitation, information within Management’s Discussion and
      Analysis of Financial Condition and Results of Operations. The following
      cautionary statements are being made pursuant to the provisions of the PSLRA
      and
      with the intention of obtaining the benefits of the “safe harbor” provisions of
      the PSLRA. Although we believe that our expectations are based on reasonable
      assumptions, actual results may differ materially from those in our
      forward-looking statements.





Forward-looking
      statements speak only as of the date of this Quarterly Report on Form 10-Q.
      Except as required under federal securities laws and the rules and regulations
      of the SEC, we do not have any intention to update any forward-looking
      statements to reflect events or circumstances arising after the date of this
      Quarterly Report on Form 10-Q, whether as a result of new information, future
      events or otherwise. As a result of these risks and uncertainties, readers
      are
      cautioned not to place undue reliance on forward-looking statements included
      in
      this Quarterly Report on Form 10-Q or that may be made elsewhere from time
      to
      time by, or on behalf of, us. All forward-looking statements attributable to
      us
      are expressly qualified by these cautionary statements.





Our
      forward-looking statements generally can be identified by the use of words
      or
      phrases such as “believe,” “anticipate,” “expect,” “estimate,” “project,” “will
      be,” “will continue,” “will likely result,” or other similar words and phrases.
      Forward-looking statements and our plans and expectations are subject to a
      number of risks and uncertainties that could cause actual results to differ
      materially from those anticipated, and our business in general is subject to
      such risks. For more information, see “Risk Factors” contained in Part I, Item
      1A of our Annual Report on Form 10-K. In addition, our expectations or beliefs
      concerning future events involve risks and uncertainties, including, without
      limitation:





·
            general
                economic conditions affecting our products and their respective
                markets,





·
            the
                high level of competition in our industry and
                markets,





·
            our
                dependence on a limited number of customers for a large portion of
                our
                sales,





·
            disruptions
                in our distribution center,





·
            acquisitions
                or other strategic transactions diverting managerial resources, or
                incurrence of additional\
              liabilities
                or integration problems associated with such
                transactions,





·
            changing
                consumer trends or pricing pressures which may cause us to lower
                our
                prices,





·
            increases
                in supplier prices,





·
            increases
                in transportation fees and fuel
                charges,





·
            changes
                in our senior management team,





·
            our
                ability to protect our intellectual property
                rights,





·
            our
                dependency on the reputation of our brand
                names,





·
            shortages
                of supply of sourced goods or interruptions in the manufacturing
                of our
                products,





·
            our
                level of debt, and ability to service our
                debt,





·
            our
                ability to obtain additional financing,
                and





·
            the
                restrictions imposed by our senior credit facility and the indenture
                on
                our operations.





-60-


**ITEM 3.**
            **QUANTITATIVE
                AND
                QUALITATIVE DISCLOSURES ABOUT MARKET
                RISK**





We
      are
      exposed to changes in interest rates because our senior credit facility is
      variable rate debt. Interest rate changes, therefore, generally do not affect
      the market value of such debt, but do impact the amount of our interest payments
      and, therefore, our future earnings and cash flows, assuming other factors
      are
      held constant. At September 30, 2006, we had variable rate debt of approximately
      $363.8 million related to our Tranche B term loan.





In
      an
      effort to protect the Company from the adverse impact that rising interest
      rates
      would have on our variable rate debt, we have entered into various interest
      rate
      cap agreements to hedge this exposure. In June 2004, we purchased a 5% interest
      rate cap agreement with a notional amount of $20.0 million which terminated
      in
      June 2006. In March 2005, we purchased interest rate cap agreements that became
      effective August 30, 2005, with a total notional amount of $180.0 million and
      LIBOR cap rates ranging from 3.25% to 3.75%. On May 31, 2006, an interest rate
      cap agreement with a notional amount of $50.0 million and a 3.25% cap rate
      expired. The remaining interest rate cap agreements terminate on May 30, 2007
      and 2008 as to notional amounts of $80.0 million and $50.0 million,
      respectively.





Holding
      other variables constant, including levels of indebtedness, a one percentage
      point increase in interest rates on our variable rate debt would have an adverse
      impact on pre-tax earnings and cash flows for fiscal 2007 of approximately
      $3.7
      million. However, given the protection afforded by the interest rate cap
      agreements, the impact of a one percentage point increase would be limited
      to
      $2.3 million. The
      fair
      value of the interest rate cap agreements was $2.2 million at September 30,
      2006.








**ITEM
      4.CONTROLS
      AND PROCEDURES**





**Disclosure
      Controls and Procedures**


The
      Company’s management, with the participation of its Chief Executive Officer and
      the Chief Financial Officer, evaluated the effectiveness of the Company’s
      disclosure controls and procedures, as defined in Rule 13a-15(e) of the
      Securities Exchange Act of 1934 (“Exchange Act”). Based upon that evaluation,
      the Chief Executive Officer and Chief Financial Officer have concluded that,
      as
      of September 30, 2006, the Company’s disclosure controls and procedures were
      effective to ensure that material information required to be disclosed by the
      Company in the reports the Company files or submits under the Exchange Act
      is
      recorded, processed, summarized and reported, within the time periods specified
      in the Securities and Exchange Commission rules and forms and that such
      information is accumulated and communicated to the Company’s management,
      including the Company’s principal executive and principal financial officers, or
      persons performing similar functions, as appropriate to allow timely decisions
      regarding required disclosure.





**Changes
      in Internal Control over Financial Reporting**


There
      were no changes during the quarter ended September 30, 2006 in the Company’s
      internal control over financial reporting (as defined in Exchange Act Rule
      13a-15(f)) that have materially affected, or are reasonably likely to materially
      affect, the Company’s internal control over financial reporting.





-61-


**PART II.**
            **OTHER
                INFORMATION**





**ITEM
                1.**
            **LEGAL
                PROCEEDINGS**





The
      Company and certain of its officers and directors are defendants in a
      consolidated putative securities class action lawsuit filed in the United States
      District Court for the Southern District of New York (the “Consolidated
      Action”). The first of the six consolidated cases was filed on August 3, 2005.
      Plaintiffs purport to represent a class of stockholders of the Company who
      purchased shares between February 9, 2005 through November 15, 2005. Plaintiffs
      also name as defendants the underwriters in the Company’s initial public
      offering and a private equity fund that was a selling stockholder in the
      offering. The District Court has appointed a Lead Plaintiff. On December 23,
      2005, the Lead Plaintiff filed a Consolidated Class Action Complaint, which
      asserted claims under Sections 11, 12(a)(2) and 15 of the Securities Act of
      1933
      and Sections 10(b), 20(a), and 20A of the Securities Exchange Act of 1934.
      The
      Lead Plaintiff generally alleged that the Company issued a series of materially
      false and misleading statements in connection with its initial public offering
      and thereafter in regard to the following areas: the accounting issues described
      in the Company’s press release issued on or about November 15, 2005; and the
      alleged failure to disclose that demand for certain of the Company’s products
      was declining and that the Company was planning to withdraw several products
      from the market. Plaintiffs seek an unspecified amount of damages. The Company
      filed a motion to dismiss the Consolidated Class Action Complaint in February
      2006. On July 10, 2006, the Court dismissed all claims against the Company
      and
      the individual defendants arising under the Securities Exchange Act of 1934.
      The
      Company’s management believes the remaining claims are legally deficient and
      subject to meritorious defenses.  The Company intends to vigorously pursue
      its defenses; however, the Company cannot reasonably estimate the potential
      range of loss, if any.





On
      September 6, 2005, another putative securities class action lawsuit
      substantially similar to the initially-filed complaints in the Consolidated
      Action described above was filed against the same defendants in the Circuit
      Court of Cook County, Illinois (the “Chicago Action”). In light of the
      first-filed Consolidated Action, proceedings in the Chicago Action were stayed
      until a ruling on defendants’ anticipated motions to dismiss the consolidated
      complaint in the Consolidated Action. Subsequent to the Court's decision on
      the
      motions to dismiss in the Consolidated Action, on August 11, 2006, the
      Plaintiffs in the Chicago Action agreed to dismiss the Chicago Action.





On
      May
      23, 2006, Similasan Corporation filed a lawsuit against the Company in the
      United States District Court for the District of Colorado in which Similasan
      alleged false designation of origin, trademark and trade dress infringement,
      and
      deceptive trade practices by the Company related to *Murine* for
      Allergy Eye Relief, *Murine* for
      Tired Eye Relief and *Murine* for
      Earache Relief, as applicable. Similasan has requested injunctive relief, an
      accounting of profits and damages and litigation costs and attorneys’ fees. The
      Company has filed an answer to the complaint with a potentially dispositive
      motion. In addition to the lawsuit filed by Similasan in the U.S. District
      Court
      for the District of Colorado, the Company also received a cease and desist
      letter from Swiss legal counsel to Similasan and its parent company, Similasan
      AG, a Swiss company. In the cease and desist letter, Similasan and Similasan
      AG
      have alleged a breach of the Secrecy Agreement executed by the Company and
      demanded that the Company cease and desist from (i) using confidential
      information covered by the Secrecy Agreement; and (ii) manufacturing,
      distributing, marketing or selling certain of its homeopathic products. The
      complaint in the Colorado action has now been amended to include allegations
      relating to the breach of confidentiality’ and the Company has filed an answer
      responsive thereto. The Company’s management believes the allegations to be
      without merit and intends to vigorously pursue its defenses; however, the
      Company cannot reasonably estimate the potential range of loss, if
      any.





On
      September 28, 2006, OraSure Technologies, Inc. moved in the Supreme Court
      of the State of New York for a preliminary injunction prohibiting the
      Company from selling cryogenic wart removal products under the Wartner® brand,
      which the Company acquired on September 21, 2006. OraSure Technologies is a
      supplier to the Company for the Company’s Compound W Freeze Off® business. The
      distribution agreement in place calls for mediation of contract disputes,
      followed by arbitration, if necessary. The contract in question is of five
      years
      duration ending in December 2007. On October 30, 2006, the Court denied OraSure
      Technologies’ motion for a preliminary injunction.  To the extent the
      contract dispute is not resolved through mediation, the Company intends to
      seek
      resolution of the matter through arbitration.


-62-


The
      Company is also involved from time to time in other routine legal matters and
      other claims incidental to its business. The Company reviews outstanding claims
      and proceedings internally and with external counsel as necessary to assess
      probability of loss and for the ability to estimate loss. These assessments
      are
      re-evaluated each quarter and as new information becomes available to determine
      whether a reserve should be established or if any existing reserve should be
      adjusted. The actual cost of resolving a claim or proceeding ultimately may
      be
      substantially different than the amount of the recorded reserve. In addition,
      because it is not permissible under generally accepted accounting principles
      to
      establish a litigation reserve until the loss is both probable and estimable,
      in
      some cases there may be insufficient time to establish a reserve prior to the
      actual incurrence of the loss (upon verdict and judgment at trial, for example,
      or in the case of a quickly negotiated settlement). The Company believes the
      resolution of routine matters and other incidental claims, taking into account
      reserves and insurance, will not have a material adverse effect on its business,
      financial condition or results from operations.








ITEM
      1A.RISK
      FACTORS





You
      are
      advised to consider the risk factors disclosure contained in Part I, Item 1A,
      included in our Annual Report on Form 10-K for the year ended March 31, 2006,
      which are incorporated herein by reference, as they could materially
      affect our business, financial condition and future results from
      operations .
      In
      addition, the following matters may also materially affect our business,
      financial condition and future results from operations, as well as the market
      value of our common stock.





***Litigation
      may adversely affect our business, financial condition and results of
      operations.***





Our
      business is subject to the risk of litigation by employees, consumers,
      suppliers, shareholders or others through private actions, class actions,
      administrative proceedings, regulatory actions or other litigation. The outcome
      of litigation, particularly class action lawsuits and regulatory actions, is
      difficult to assess or quantify. Plaintiffs in these types of lawsuits may
      seek
      recovery of very large or indeterminate amounts, and the magnitude of the
      potential loss relating to such lawsuits may remain unknown for substantial
      periods of time. The cost to defend current and future litigation may be
      significant. There may also be adverse publicity associated with litigation
      that
      could decrease customer acceptance of our products, regardless of whether the
      allegations are valid or whether we are ultimately found liable. As a result,
      litigation may adversely affect our business, financial condition and results
      of
      operations.





***The
      trading price of our common stock may be volatile.***





The
      trading price of our common stock could be subject to significant fluctuations
      in response to several factors, some of which are beyond our control, including
      variations in our quarterly operating results, our leveraged financial position,
      potential sales of additional shares of our common stock, general trends in
      the
      consumer products industry, changes by securities analysts in their estimates
      or
      investment ratings, the relative illiquidity of our common stock, news regarding
      litigation in which we are or become involved and other potential litigation
      and
      stock market conditions generally.





***We
      have no current intention of paying dividends to holders of our common
      stock.***





We
      presently intend to retain our earnings, if any, for use in our operations,
      or
      to repay our outstanding indebtedness and have no current intention of paying
      dividends to holders of our common stock. In addition, our debt instruments
      limit our ability to declare and pay cash dividends on our common stock. As
      a
      result, your only opportunity to achieve a return on your investment in Prestige
      will be if the market price of our common stock appreciates and you sell your
      shares at a profit.





***Our
      principal stockholders have the ability to significantly influence our business,
      which may be disadvantageous to other stockholders and adversely affect the
      trading price of our common stock.***





Entities
      affiliated with GTCR collectively own approximately 31.8% of our outstanding
      common stock. As a result, these stockholders, acting together, will have the
      ability to exert substantial influence over all matters


-63-


requiring
      approval by our stockholders, including the election and removal of directors
      and any proposed merger, consolidation or sale of all or substantially all
      of
      our assets and other corporate transactions. Under our amended and restated
      certificate of incorporation, the GTCR entities and non-employee directors
      will
      not have any duty to refrain from engaging directly or indirectly in the same
      or
      similar business activities or lines of business that we do. In the event that
      any GTCR entity or non-employee director, as the case may be, acquires knowledge
      of a potential transaction or matter which may be a corporate opportunity for
      itself and us, the GTCR entity or non-employee director, as the case may be,
      will not have any duty to communicate or offer such corporate opportunity to
      us
      and may pursue such corporate opportunity for itself or direct such corporate
      opportunity to another person. This concentration of stock ownership also may
      make it difficult for stockholders to replace management. In addition, this
      significant concentration of stock ownership may adversely affect the trading
      price for our common stock because investors often perceive disadvantages in
      owning stock in companies with controlling stockholders. This concentration
      of
      control could be disadvantageous to other stockholders with interests different
      from those of our officers, directors and principal stockholders and the trading
      price of shares of our common stock could be adversely affected.





***Substantial
      sales of our common stock by either our controlling shareholder or management
      or
      the perception that these sales could occur could cause the price of our common
      stock could decline.***





Sales
      of
      substantial amounts of our common stock in the public market by our controlling
      shareholder or management, or the perception that these sales could occur,
      could
      adversely affect the price of our common stock and could impair our ability
      to
      raise capital through the sale of additional equity securities.





*We
      are subject increasingly to the risk of doing business
      internationally*.





During
      the fiscal year ended March 31, 2006, approximately 3.0% of our total revenues
      were attributable to our international business. We
      operate and may operate in the future in regions and countries where we have
      little or no experience, and we may not be able to market our products in,
      or
      develop new products successfully for, these markets. We may also encounter
      other risks of doing business internationally including:





·
            unexpected
                changes in, or impositions of, legislative or regulatory
                requirements;





·
            fluctuations
                in foreign exchange rates, which could cause fluctuations in the
                price of
                our products in foreign markets or cause fluctuations in the cost
                of
                certain raw materials purchased by
                us;





·
            delays
                resulting from difficulty in obtaining export licenses, tariffs and
                other
                barriers and restrictions, potentially longer payment cycles, greater
                difficulty in accounts receivable collection and potentially adverse
                tax
                treatment;





·
            potential
                trade restrictions and exchange
                controls;





·
            differences
                in protection of our intellectual property rights;
                and





·
            the
                burden of complying with a variety of foreign
                laws.





In
      addition, we will be increasingly subject to general geopolitical risks in
      foreign countries where we operate, such as political and economic instability
      and changes in diplomatic and trade relationships, which could affect, among
      other things, customers’ inventory levels and consumer purchasing, which could
      cause our results to fluctuate and our sales to decline. It has not been our
      practice to engage in foreign exchange hedging transactions to manage the risk
      of fluctuations in foreign exchange rates because of the limited nature of
      our
      past international operations.





-64-


***Our
      annual and quarterly operating results may fluctuate significantly and could
      fall below the expectations of securities analysts and investors due to a number
      of factors, some of which are beyond our control, resulting in a decline in
      the
      price of our securities.***





Our
      annual and quarterly operating results may fluctuate significantly because
      of
      several factors, including:





·
            increases
                and decreases in average monthly revenues and
                profitability;





·
            the
                rate at which we make acquisitions or develop new products and
                successfully market them;





·
            changes
                in consumer preferences and competitive conditions, including the
                effects
                of competitors’ operational, promotional or expansion
                activities;





·
            fluctuations
                in commodity prices, product costs, utilities and energy costs, prevailing
                wage rates, insurance costs and other
                costs;





·
            our
                ability to recruit, train and retain qualified employees, and the
                costs
                associated with those activities;





·
            changes
                in advertising and promotional activities and expansion to new
                markets;





·
            negative
                publicity relating to products we
                sell;





·
            unanticipated
                increases in infrastructure costs;





·
            impairment
                of goodwill or long-lived assets;





·
            changes
                in interest rates; and





·
            changes
                in accounting, tax, regulatory or other rules applicable to our
                business.





Our
      quarterly operating results and revenues may fluctuate as a result of any of
      these or other factors. Accordingly, results for any one quarter are not
      necessarily indicative of results to be expected for any other quarter or for
      any year, and revenues for any particular future period may decrease. In the
      future, operating results may fall below the expectations of securities analysts
      and investors. In that event, the price of our securities could
      decrease.





***We
      can be affected adversely and unexpectedly by the implementation of new, or
      changes in the interpretation of existing, accounting principles generally
      accepted in the United States of America (“GAAP”).***





Our
      financial reporting complies with GAAP, and GAAP is subject to change over
      time.
      If new rules or interpretations of existing rules require us to change our
      financial reporting, our results of operations and financial condition could
      be
      affected adversely.





***Identification
      of material weakness in internal control may adversely affect our financial
      results.***





We
      are
      subject to the ongoing internal control provisions of Section 404 of the
      Sarbanes-Oxley Act of 2002. Those provisions provide for the identification
      of
      material weaknesses in internal control. If such a material weakness is
      identified, it could indicate a lack of controls adequate to generate accurate
      financial statements. We routinely assess our internal controls, but we cannot
      assure you that we will be able to timely remediate any material weaknesses
      that
      may be identified in future periods, or maintain all of the controls necessary
      for continued compliance. Likewise, we cannot assure you that we will be able
      to
      retain sufficient skilled finance and accounting personnel, especially in light
      of the increased demand for such personnel among publicly traded
      companies.


-65-


***Provisions
      in our charter and Delaware law may discourage potential acquirers of our
      company, which could adversely affect the value of our
      securities.***





Our
      charter documents contain provisions that may have the effect of making it
      more
      difficult for a third party to acquire or attempt to acquire control of the
      Company. In addition, we are subject to certain provisions of Delaware law
      that
      limit, in some cases, our ability to engage in certain business combinations
      with significant shareholders.





These
      provisions, either alone, or in combination with each other, give our current
      directors and executive officers a substantial ability to influence the outcome
      of a proposed acquisition of the Company. These provisions would apply even
      if
      an acquisition or other significant corporate transaction was considered
      beneficial by some of our shareholders. If a change in control or change in
      management is delayed or prevented by these provisions, the market price of
      our
      securities could decline.








**ITEM 2.**
            **UNREGISTERED
                SALES OF EQUITY SECURITIES AND USE OF
                PROCEEDS**





There
      were no equity securities sold by the Company during the period covered by
      this
      Quarterly Report on Form 10-Q that were not registered under the Securities
      Act
      of 1933, as amended.





There
      were no purchases of shares of the Company’s common stock during the quarter
      ended September 30, 2006, by or on behalf of the Company or any “affiliated
      purchaser,” as defined by Rule 10b-18(a)(3) of the Exchange Act.








**ITEM
                3.**
            **DEFAULTS UPON SENIOR
                SECURITIES**





None.


-66-


**ITEM 4.**
            **SUBMISSION OF MATTERS TO A VOTE OF SECURITY
                HOLDERS**





The
      Company’s 2006 Annual Meeting of Stockholders was held on August 15, 2006 (the
      "Annual Meeting").  Proxies for the Annual Meeting were solicited in
      accordance with Regulation 14 of the Exchange Act; there was no solicitation
      in
      opposition to management's nominees for director and all of management's
      nominees were elected.  The following nominees were elected to the
      Company’s Board of Directors to serve until the 2007 Annual Meeting of
      Stockholders and until their respective successors have been elected and
      qualified, or until their earlier death, resignation or retirement in accordance
      with Proposal 1 - Election of Directors:





**For**
            ****
            **Withheld**
            ****
            **Broker**
              **Non-Votes**Peter
                C. Mann
            46,850,209
            
            1,359,659
            
            --L.
                Dick Buell
            46,974,885
            
            1,234,983
            
            --John
                E. Byom
            47,192,801
            
            1,017,067
            
            --Gary
                E. Costley
            47,016,491
            
            1,193,377
            
            --David
                A. Donnini
            45,312,880
            
            2,896,988
            
            --Ronald
                Gordon
            46,960,437
            
            1,249,431
            
            --Vincent
                J. Hemmer
            46,944,514
            
            1,265,354
            
            --Patrick
                Lonergan
            47,145,375
            
            1,064,493
            
            --Raymond
                P. Silcock
            47,145,475
            
            1,064,393
            
            --








The
      votes
      for Proposal 2 for the ratification of the appointment of PricewaterhouseCoopers
      LLP as the Company’s independent registered public accounting firm for the audit
      of the Company’s financial statements for the fiscal year ending March 31, 2007
      were as follows:





**For**
            ****
            **Against**
            ****
            **Withheld**
            ****
            **Broker**
              **Non-Votes**46,845,933
            
            1,329,439
            
            34,496
            
            --











**ITEM
                5.**
            **OTHER
                INFORMATION**





None.








-67-


ITEM
      6.EXHIBITS





2.1
            Stock
                Sale and Purchase Agreement, dated as of September 21, 2006, by Lil’ Drug
                Store Products,
              Inc.,
                Wartner USA B.V., Lil’ Drug Store Products, Inc.’s shareholders set forth
                on the signature page
              attached
                thereto, and Medtech Products Inc.10.1
            Executive
                Employment Agreement, dated as of August 21, 2006, between Prestige
                Brands
                Holdings,
              Inc.
                and Jean A. Boyko.10.2
            Exclusive
                Supply Agreement, dated as of September 18, 2006, among Medtech Products
                Inc.,
              Pharmacare
                Limited, Prestige Brands Holdings, Inc. and Aspen Pharmacare Holdings
                Limited.10.3
            Form
                of Performance Share Grant Agreement.31.1
            Certification
                of Principal Executive Officer of Prestige Brands Holdings, Inc.
                pursuant
                to Rule 13a-
              14(a)
                of the Securities Exchange Act of 1934.31.2
            Certification
                of Principal Financial Officer of Prestige Brands Holdings, Inc.
                pursuant
                to Rule 13a-
              14(a)
                of the Securities Exchange Act of 1934.31.3
            Certification
                of Principal Executive Officer ofPrestige
                Brands International, LLCpursuant to Rule
              13a-14(a)
                of the Securities Exchange Act of 1934.31.4
            Certification
                of Principal Financial Officer ofPrestige
                Brands International, LLCpursuant to Rule
              13a-14(a)
                of the Securities Exchange Act of 1934.32.1
            Certification
                of Principal Executive Officer of Prestige Brands Holdings, Inc.
                pursuant
                to Rule 13a-
              14(b)
                and Section 1350 of Chapter 63 of Title 18 of the United States
                Code.32.2
            Certification
                of Principal Financial Officer of Prestige Brands Holdings, Inc.
                pursuant
                to Rule 13a-
              14(b)
                and Section 1350 of Chapter 63 of Title 18 of the United States
                Code.32.3
            Certification
                of Principal Executive Officer of Prestige Brands International,
                LLC
                pursuant to Rule
              13a-14(b)
                and Section 1350 of Chapter 63 of Title 18 of the United States
                Code.32.4
            Certification
                of Principal Financial Officer of Prestige Brands International,
                LLC
                pursuant to Rule
              13a-14(b)
                and Section 1350 of Chapter 63 of Title 18 of the United States
                Code.





-68-


**SIGNATURES**











Pursuant
      to the requirements of the Securities Exchange Act of 1934, the Registrants
      have
      duly caused this report to be signed on their behalf by the undersigned
      thereunto duly authorized.








Prestige Brands Holdings,
      Inc.


Registrant





Date:  November
      9,
      2006                                                                             
By: **/s/
      PETER
      J. ANDERSON**


Peter
      J.
      Anderson


Chief
      Financial
      Officer








**Prestige Brands International, LLC**


Registrant





Date:  November
      9,
      2006                                                                             
By:_________ **/s/
      PETER J. ANDERSON**________


Peter
      J.
      Anderson


Chief
      Financial
      Officer





























-69-


**Exhibit
      Index**











2.1
            Stock
                Sale and Purchase Agreement, dated as of September 21, 2006, by Lil’ Drug
                Store Products,
              Inc.,
                Wartner USA B.V., Lil’ Drug Store Products, Inc.’s shareholders set forth
                on the signature page
              attached
                thereto, and Medtech Products Inc.10.1
            Executive
                Employment Agreement, dated as of August 21, 2006, between Prestige
                Brands
                Holdings,
              Inc.
                and Jean A. Boyko.10.2
            Exclusive
                Supply Agreement, dated as of September 18, 2006, among Medtech Products
                Inc.,
              Pharmacare
                Limited, Prestige Brands Holdings, Inc. and Aspen Pharmacare Holdings
                Limited.10.3
            Form
                of Performance Share Grant Agreement.31.1
            Certification
                of Principal Executive Officer of Prestige Brands Holdings, Inc.
                pursuant
                to Rule 13a-
              14(a)
                of the Securities Exchange Act of 1934.31.2
            Certification
                of Principal Financial Officer of Prestige Brands Holdings, Inc.
                pursuant
                to Rule 13a-
              14(a)
                of the Securities Exchange Act of 1934.31.3
            Certification
                of Principal Executive Officer ofPrestige
                Brands International, LLCpursuant to Rule
              13a-14(a)
                of the Securities Exchange Act of 1934.31.4
            Certification
                of Principal Financial Officer ofPrestige
                Brands International, LLCpursuant to Rule
              13a-14(a)
                of the Securities Exchange Act of 1934.32.1
            Certification
                of Principal Executive Officer of Prestige Brands Holdings, Inc.
                pursuant
                to Rule13a-14(b)
                and Section 1350 of Chapter 63 of Title 18 of the United States
                Code.32.2
            Certification
                of Principal Financial Officer of Prestige Brands Holdings, Inc.
                pursuant
                to Rule 13a-
              14(b)
                and Section 1350 of Chapter 63 of Title 18 of the United States
                Code.32.3
            Certification
                of Principal Executive Officer of Prestige Brands International,
                LLC
                pursuant to Rule
              13a-14(b)
                and Section 1350 of Chapter 63 of Title 18 of the United States
                Code.32.4
            Certification
                of Principal Financial Officer of Prestige Brands International,
                LLC
                pursuant to Rule
              13a-14(b)
                and Section 1350 of Chapter 63 of Title 18 of the United States
                Code.
















-70-