UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)



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

For the quarterly period ended September 30, ~~2017~~2018



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

For the transition period from ____ to _____

Commission File Number: 001-32433

PRESTIGE ~~BRANDS HOLDINGS,~~CONSUMER HEALTHCARE INC.

(Exact ~~name~~Name of Registrant as ~~specified~~Specified in ~~its charter)~~Its Charter)



Delaware		20-1297589
(State or ~~other jurisdiction~~Other Jurisdiction of ~~incorporation~~Incorporation or ~~organization)~~Organization)		(I.R.S. Employer Identification No.)

660 White Plains Road

Tarrytown, New York 10591

(Address of ~~principal executive offices)~~Principal Executive Offices) (Zip Code)

(914) 524-6800

(Registrant's ~~telephone number, including area code)~~Telephone Number, Including Area Code)

Prestige Brands Holdings, Inc.

(Former ~~name, former address~~Name, Former Address and ~~former fiscal year,~~Former Fiscal Year, if ~~changed since last report)~~Changed Since Last Report)

Indicate by check mark whether the ~~registrant~~registrant: (1) has 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 registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.



Large accelerated filer	x		Accelerated filer	o
Non-accelerated filer	o	~~(Do not check if a smaller reporting company)~~	Smaller reporting company	o
			Emerging growth company	o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o No x

As of October ~~27, 2017,~~26, 2018, there were ~~53,038,866~~51,737,977 shares of common stock outstanding.

Prestige ~~Brands Holdings,~~Consumer Healthcare Inc.

Form 10-Q

Index



PART I.	FINANCIAL INFORMATION

Item 1.	Financial Statements
	Condensed Consolidated Statements of Income and Comprehensive Income for the three and six months ended September 30, ~~2017~~2018 and ~~2016~~2017 (unaudited)	2
	Condensed Consolidated Balance Sheets as of September 30, ~~2017 (unaudited)~~2018 and March 31, ~~2017~~2018 (unaudited)	3
	Condensed Consolidated Statements of Cash Flows for the six months ended September 30, ~~2017~~2018 and ~~2016~~2017 (unaudited)	4
	Notes to Condensed Consolidated Financial Statements (unaudited)	5

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	22

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	3933

Item 4.	Controls and Procedures	3933

PART II.	OTHER INFORMATION

Item 1A.	Risk Factors	4034

Item 2.5.	~~Unregistered Sales of Equity Securities and Use of Proceeds~~Other Information	4134

Item 6.	Exhibits	4135

	Signatures	4236

Trademarks and Trade Names

Trademarks and trade names used in this Quarterly Report on Form 10-Q are the property of Prestige ~~Brands Holdings,~~Consumer Healthcare Inc. or its subsidiaries, as the case may be. We have italicized our trademarks or trade names when they appear in this Quarterly Report on Form 10-Q.


PART II.	FINANCIAL INFORMATION


ITEM 1.	FINANCIAL STATEMENTS

Prestige ~~Brands Holdings,~~Consumer Healthcare Inc.

Condensed Consolidated Statements of Income and Comprehensive Income

(Unaudited)


	Three Months Ended September 30,						Six Months Ended September 30,						Three Months Ended September 30,						Six Months Ended September 30,
(In thousands, except per share data)	2017			2016			2017			2016			2018			2017			2018			2017
Revenues
Net sales	$	257,930		$	215,017		$	514,417		$	423,787		$	239,354		$	257,930		$	493,308		$	514,417
Other revenues	96			35			182			840			3			96			29			182
Total revenues	258,026			215,052			514,599			424,627			239,357			258,026			493,337			514,599

Cost of Sales
Cost of sales excluding depreciation	112,580			91,087			224,337			179,071			100,647			112,580			212,716			224,337
Cost of sales depreciation	1,348			—			2,688			—			1,238			1,348			2,526			2,688
Cost of sales	113,928			91,087			227,025			179,071			101,885			113,928			215,242			227,025
Gross profit	144,098			123,965			287,574			245,556			137,472			144,098			278,095			287,574

Operating Expenses
Advertising and promotion	39,188			28,592			76,132			56,227			37,042			39,188			74,153			76,132
General and administrative	21,567			18,795			41,903			38,252			24,034			21,999			47,975			42,409
Depreciation and amortization	7,186			6,016			14,353			12,848			6,756			7,186			13,840			14,353
(Gain) loss on divestitures	—			(496		)	—			54,957
Gain on divestiture													(1,284		)	—			(1,284		)	—
Total operating expenses	67,941			52,907			132,388			162,284			66,548			68,373			134,684			132,894
Operating income	76,157			71,058			155,186			83,272			70,924			75,725			143,411			154,680

Other (income) expense
Interest income	(85		)	(46		)	(154		)	(103		)	(33		)	(85		)	(133		)	(154		)
Interest expense	26,921			20,876			53,331			42,060			27,103			26,921			53,143			53,331
Other expense (income), net													335			(432		)	422			(506		)
Total other expense	26,836			20,830			53,177			41,957			27,405			26,404			53,432			52,671
Income before income taxes	49,321			50,228			102,009			41,315			43,519			49,321			89,979			102,009
Provision for income taxes	18,616			18,033			37,545			14,651			12,678			18,616			24,672			37,545
Net income	$	30,705		$	32,195		$	64,464		$	26,664		$	30,841		$	30,705		$	65,307		$	64,464

Earnings per share:
Basic	$	0.58		$	0.61		$	1.21		$	0.50		$	0.59		$	0.58		$	1.25		$	1.21
Diluted	$	0.57		$	0.60		$	1.20		$	0.50		$	0.59		$	0.57		$	1.24		$	1.20

Weighted average shares outstanding:
Basic	53,098			52,993			53,068			52,941			51,841			53,098			52,238			53,068
Diluted	53,539			53,345			53,524			53,329			52,153			53,539			52,545			53,524

Comprehensive income (loss), net of tax:
Comprehensive income, net of tax:
Currency translation adjustments	2,716			2,703			3,835			(3,121		)	(2,145		)	2,716			(5,119		)	3,835
Unrecognized net gain on pension plans	—			—			1			—			—			—			—			1
Total other comprehensive income (loss)	2,716			2,703			3,836			(3,121		)
Total other comprehensive (loss) income													(2,145		)	2,716			(5,119		)	3,836
Comprehensive income	$	33,421		$	34,898		$	68,300		$	23,543		$	28,696		$	33,421		$	60,188		$	68,300

See accompanying notes.

Prestige ~~Brands Holdings,~~Consumer Healthcare Inc.

Condensed Consolidated Balance Sheets

(Unaudited)


(In thousands)	September 30, 2017			March 31, 2017			September 30, 2018			March 31, 2018
	(Unaudited)
Assets
Current assets
Cash and cash equivalents	$	42,977		$	41,855		$	36,910		$	32,548
Accounts receivable, net of allowance of $14,393 and $13,010, respectively	145,422			136,742
Accounts receivable, net of allowance of $14,433 and $12,734, respectively							153,849			140,881
Inventories	119,484			115,609			113,569			118,547
Deferred income tax assets							—			26
Prepaid expenses and other current assets	23,189			40,228			10,172			11,475
Total current assets	331,072			334,434			314,500			303,477

Property, plant and equipment, net	49,570			50,595			52,321			52,552
Goodwill	620,388			615,252			612,444			620,098
Intangible assets, net	2,894,140			2,903,613			2,715,070			2,780,916
Other long-term assets	7,023			7,454			3,360			3,569
Total Assets	$	3,902,193		$	3,911,348		$	3,697,695		$	3,760,612

Liabilities and Stockholders' Equity
Current liabilities
Accounts payable	$	79,258		$	70,218		$	66,251		$	61,390
Accrued interest payable	8,333			8,130			9,665			9,708
Other accrued liabilities	73,131			83,661			70,057			52,101
Total current liabilities	160,722			162,009			145,973			123,199

Long-term debt
Principal amount	2,117,000			2,222,000
Less unamortized debt costs	(24,912		)	(28,268		)
Long-term debt, net	2,092,088			2,193,732			1,895,835			1,992,952

Deferred income tax liabilities	731,684			715,086			440,853			442,518
Other long-term liabilities	21,733			17,972			21,796			23,333
Total Liabilities	3,006,227			3,088,799			2,504,457			2,582,002

Commitments and Contingencies — Note 16

Stockholders' Equity
Preferred stock - $0.01 par value
Authorized - 5,000 shares
Issued and outstanding - None	—			—			—			—
Common stock - $0.01 par value
Authorized - 250,000 shares
Issued - 53,392 shares at September 30, 2017 and 53,287 shares at March 31, 2017	534			533
Issued - 53,609 shares at September 30, 2018 and 53,396 shares at March 31, 2018							536			534
Additional paid-in capital	464,446			458,255			474,137			468,783
Treasury stock, at cost - 353 shares at September 30, 2017 and 332 shares at March 31, 2017	(7,669		)	(6,594		)
Treasury stock, at cost - 1,871 shares at September 30, 2018 and 353 shares at March 31, 2018							(59,928		)	(7,669		)
Accumulated other comprehensive loss, net of tax	(22,516		)	(26,352		)	(24,434		)	(19,315		)
Retained earnings	461,171			396,707			802,927			736,277
Total Stockholders' Equity	895,966			822,549			1,193,238			1,178,610
Total Liabilities and Stockholders' Equity	$	3,902,193		$	3,911,348		$	3,697,695		$	3,760,612

See accompanying notes.

Prestige ~~Brands Holdings,~~Consumer Healthcare Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)


	Six Months Ended September 30,						Six Months Ended September 30,
(In thousands)	2017			2016			2018			2017
Operating Activities
Net income	$	64,464		$	26,664		$	65,307		$	64,464
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	17,041			12,848			16,366			17,041
Loss on divestitures	—			54,957
Loss on disposals of property and equipment	1,461			155
Gain on divestiture							(1,284		)	—
Loss on disposal of property and equipment							37			1,461
Deferred income taxes	16,321			(10,602		)	339			16,321
Amortization of debt origination costs	3,494			5,097			3,021			3,494
Excess tax benefits from share-based awards	470			800			—			470
Stock-based compensation costs	4,726			3,933			4,328			4,726
Changes in operating assets and liabilities, net of effects from acquisitions:
Other							247			—
Changes in operating assets and liabilities:
Accounts receivable	(9,345		)	356			(7,718		)	(9,345		)
Inventories	(3,409		)	(10,663		)	(4,145		)	(3,409		)
Prepaid expenses and other current assets	17,123			10,112			1,302			17,123
Accounts payable	8,008			820			4,187			8,008
Accrued liabilities	(11,869		)	6,605			14,339			(11,869		)
Noncurrent assets and liabilities	55			—
Other							(1,219		)	55
Net cash provided by operating activities	108,540			101,082			95,107			108,540

Investing Activities
Purchases of property, plant and equipment	(4,785		)	(1,404		)	(5,074		)	(4,785		)
Acquisition of Fleet escrow payment	970			—
Proceeds from the sales of property, plant and equipment	—			75
Proceeds from sales of intangible assets	—			52,353
Net cash (used in) provided by investing activities	(3,815		)	51,024
Acquisition of Fleet escrow receipt							—			970
Proceeds from divestiture							65,912			—
Net cash provided by (used in) investing activities							60,838			(3,815		)

Financing Activities
Term loan repayments	(105,000		)	(130,500		)	(100,000		)	(105,000		)
Borrowings under revolving credit agreement	—			20,000			30,000			—
Repayments under revolving credit agreement	—			(40,000		)	(30,000		)	—
Payments of debt origination costs	—			(9		)
Proceeds from exercise of stock options	1,466			3,423			1,028			1,466
Fair value of shares surrendered as payment of tax withholding	(1,075		)	(1,395		)	(2,281		)	(1,075		)
Repurchase of common stock							(49,978		)	—
Net cash used in financing activities	(104,609		)	(148,481		)	(151,231		)	(104,609		)

Effects of exchange rate changes on cash and cash equivalents	1,006			(397		)	(352		)	1,006
Increase in cash and cash equivalents	1,122			3,228			4,362			1,122
Cash and cash equivalents - beginning of period	41,855			27,230			32,548			41,855
Cash and cash equivalents - end of period	$	42,977		$	30,458		$	36,910		$	42,977

Interest paid	$	49,404		$	37,259		$	49,147		$	49,404
Income taxes paid	$	9,037		$	6,743		$	2,444		$	9,037

See accompanying notes.

Prestige ~~Brands Holdings,~~Consumer Healthcare Inc.

Notes to Condensed Consolidated Financial Statements (unaudited)

1. Business and Basis of Presentation

Nature of Business

Prestige ~~Brands Holdings,~~Consumer Healthcare Inc. (referred to herein as the “Company” or “we,” which reference shall, unless the context requires otherwise, be deemed to refer to Prestige ~~Brands Holdings,~~Consumer Healthcare Inc. and all of its direct and indirect 100% owned subsidiaries on a consolidated basis) is engaged in the development, manufacturing, marketing, sales and distribution of over-the-counter (“OTC”) healthcare and household cleaning products (prior to the sale of our Household Cleaning segment, as discussed in Note 3) to mass merchandisers and drug, food, dollar, convenience and club stores and e-commerce channels in North America (the United States and Canada), and in Australia and certain other international markets. Prestige ~~Brands Holdings,~~Consumer Healthcare Inc. is a holding company with no operations and is also the parent guarantor of the senior credit facility and the senior notes described in Note 8.

Basis of Presentation

The unaudited Condensed Consolidated Financial Statements presented herein have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial reporting and 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 GAAP for complete financial statements. All significant intercompany transactions and balances have been eliminated in consolidation. In the opinion of management, these Condensed Consolidated Financial Statements include all adjustments, consisting of normal recurring adjustments, that are considered necessary for a fair statement of our consolidated financial position, results of operations and cash flows for the interim periods presented. Our fiscal year ends on March 31^st of each year. References in these Condensed Consolidated Financial Statements or related notes to a year (e.g., ~~“2018”~~“2019”) mean our fiscal year ending or ended on March 31^st of that year. Operating results for the three and six months ended September 30, ~~2017~~2018 are not necessarily indicative of results that may be expected for the fiscal year ending March 31, ~~2018~~2019. These unaudited Condensed Consolidated Financial Statements and related notes should be read in conjunction with our audited Consolidated Financial Statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended March 31, ~~2017.~~2018.

Use of Estimates

Reclassification

In accordance with Accounting Standards Update ~~(“ASU”~~("ASU") ~~2016-09,~~ ~~Compensation - Stock Compensation (Topic 718)~~,2017-07, we have reclassified ~~cash flows on our Condensed Consolidated Statements of Cash Flows~~net periodic benefit costs related to ~~excess tax benefits~~our pension plans from ~~a financing activity~~general and administrative expense to ~~an operating activity for all periods presented.~~other (income) expense. The impact of ~~the~~this reclassification on our ~~Financial Statements~~financial statements was ~~not material.~~

~~Revenue Recognition~~

Revenues are recognized when the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the selling price is fixed or determinable, (iii) the product has been shipped and the customer takes ownership and assumes the risk of loss, and (iv) collection of the resulting receivable is reasonably assured. We have determined that these criteria are met and the transfer of the risk of loss generally occurs when the product is received by the customer, and, accordingly, we recognize revenue at that time. Provisions are 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. 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 allowances for new distribution, including slotting fees, and cooperative advertising. Estimates of the costs of these promotional programs are based on (i) historical sales experience, (ii) the current promotional offering, (iii) forecasted data, (iv) current market conditions, and (v) communication with customer purchasing/marketing personnel. We recognize the cost of such sales incentives by recording an estimate of such cost as a reduction of revenue, at the later of (a) the date the related revenue is recognized, or (b) the date when a particular sales incentive is offered. At the completion of a promotional program, the estimated amounts are adjusted to actual results.

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 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 our product offerings, and (vi) the impact of changes in product formulation, packaging and advertising.

~~Cost of Sales~~

Cost of sales includes product costs, warehousing costs, inbound and outbound shipping costs, and handling and storage costs. Warehousing, shipping and handling and storage costs were $15.1 million and $28.6 million for the three and six months ended September 30, 2017, respectively, and $10.9 million and $21.4 million for the three and six months ended September 30, 2016, respectively.

~~Advertising and Promotion Costs~~

Advertising and promotion costs are expensed as incurred. Allowances for distribution costs associated with products, including slotting fees, are recognized as a reduction of sales. Under these slotting fee distribution arrangements, the retailers allow our products to be placed on the stores' shelves in exchange for such fees.less than $1.0 million.

Recently Adopted Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board ("FASB") issued ASU 2014-09, Revenue from Contracts with Customers - Topic 606, including new FASB Accounting Standards Codification ("ASC") 606, which supersedes the revenue recognition requirements in FASB ASC 605. Along with amendments issued in 2015 and 2016, the new guidance eliminates industry-specific revenue recognition guidance under current GAAP and replaces it with a principle-based approach for determining revenue. The core principle of the new guidance is that an entity should recognize revenue for the transfer of goods and services equal to an amount it expects to be entitled to receive for those goods and services. The new standard also requires additional disclosures regarding the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts. The new guidance permits two methods of adoption: retrospectively to each prior reporting period presented (full retrospective method), or retrospectively by recognizing the cumulative effect of initially applying the guidance to all contracts existing at the date of initial application (the modified retrospective method). The ASU, as amended, is effective for annual reporting periods beginning after December 15, 2017. We adopted this guidance effective April 1, 2018 using the modified retrospective transition method and applied it to contracts that were not completed at the adoption date. See Note 2 for our revenue recognition policy.

The effects of this recently adopted accounting pronouncement to our consolidated balance sheet as of April 1, 2018 are as follows:



(In thousands)	Balance March 31, 2018		New Revenue Standard Adjustment			Balance April 1, 2018
Accounts receivable, net	$	140,881	$	5,438		$	146,319
Inventories	118,547		(1,768		)	116,779
Other accrued liabilities	52,101		1,925			54,026
Deferred income tax liabilities	442,518		401			442,919
Retained earnings	736,277		1,344			737,621

In March ~~2016,~~2017, the FASB issued ASU ~~2016-09,~~2017-07, Compensation - ~~Stock Compensation~~Retirement Benefits (Topic ~~718)~~715): ~~Improvements~~Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost, which changes the presentation of net periodic benefit cost related to ~~Employee Share-Based Payment Accounting~~employer sponsored defined benefit plans and other postretirement benefits. Under this ASU, service cost should be included in the same income statement line item as other compensation costs arising from services rendered during the period, while other components of net periodic benefit pension cost should be presented separately outside of operating income. Additionally, only service costs may be capitalized in assets. Entities should apply the guidance on the presentation of the components of net periodic benefit cost in the income statement retrospectively. The guidance limiting the capitalization of net periodic benefit cost in assets to the service cost component should be applied prospectively. The standard is effective for annual reporting periods beginning after December 15, 2017. The adoption of this standard in the first quarter of 2019 required us to reclassify certain pension costs out of operating income and did not have a material impact on our consolidated financial statements.

In March 2018, the FASB issued ASU 2018-05, Income Taxes (Topic 740). The amendments in this update ~~involve several aspects of accounting for share-based payment transactions, including~~reflect the income tax ~~consequences, classification~~accounting implications of ~~awards~~the Tax Cuts and ~~classification~~Jobs Act ("Tax Act"). See Note 14 for a discussion of the Tax Act, which was signed into law on December 22, 2017, and the ~~statement~~impact it has had, and may have, on our business and financial results.

In February 2018, the FASB issued ASU 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of ~~cash flows. For public business entities, the~~Certain Tax Effects from Accumulated Other Comprehensive Income. The amendments in this update ~~were~~allow a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Act. See Note 14 for a discussion of the Tax Act, which was signed into law on December 22, 2017, and the impact it has had, and may have, on our business and financial results. The amendments in this update are effective for ~~annual periods~~all entities for fiscal years beginning after December 15, ~~2016,~~2018, and interim periods within those ~~annual periods.~~fiscal years. We have early adopted ASU ~~2016-09 effective April 1, 2017,~~2018-02, and the adoption did not have a material impact on our ~~Financial Statements.~~

~~In July 2015, the FASB issued ASU 2015-11,~~ ~~Simplifying the Measurement of Inventory~~. The amendments in this update more closely align the measurement of inventory in GAAP with the measurement of inventory in International Financial Reporting Standards, under which an entity should measure inventory at the lower of cost or net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. For public business entities, the amendments are effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. ~~Our adoption of ASU 2015-11, effective April 1, 2017, did not have a material impact on our Financial Statements.~~

~~Recently Issued Accounting Pronouncements~~

~~In January 2017, the FASB issued ASU 2017-04,~~ ~~Intangibles - Goodwill and Other (Topic 350)~~. The amendments in this update simplify the test for goodwill impairment by eliminating Step 2 from the impairment test, which required the entity to perform procedures to determine the fair value at the impairment testing date of its assets and liabilities following the procedure that would be required in determining fair value of assets acquired and liabilities assumed in a business combination. The amendments in this update are effective for public companies for annual or any interim goodwill impairments tests in fiscal years beginning after December 15, 2019. We are evaluating the impact of adopting this guidance on our Financial Statements and whether to early adopt this ASU.consolidated financial statements.

In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805); Clarifying the Definition of a Business. The amendments in this update clarify the definition of a business to help companies evaluate whether transactions should be accounted for as acquisitions or disposals of assets or businesses. The amendments in this update are effective for public companies for annual periods beginning after December 15, 2017, including interim periods within those periods. We ~~are evaluating~~adopted this standard effective April 1, 2018, and the adoption did not have a material impact ~~of adopting this guidance~~ on our ~~Financial Statements.~~consolidated financial statements.

In August 2016, the FASB issued ASU 2016-15, Classification of Certain Cash Receipts and Cash Payments. The amendments in this update provide clarification and guidance on eight cash flow classification issues. For public ~~business entities,~~companies, the amendments in this update are effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. We adopted this standard effective April 1, 2018, and the adoption did not have a material impact on our consolidated financial statements.

Recently Issued Accounting Pronouncements

In August 2018, the FASB issued ASU 2018-14, Compensation - Retirement Benefits - Defined Benefit Plans - General (Topic 715-20): Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans. The amendments in this update modify the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans and are effective for public companies for fiscal years ending after December 15, 2020. We do not expect the adoption of ~~ASU 2016-15 is not expected~~this standard to have a material impact on our financial statements.

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement. The amendments in this update modify the disclosure requirements in Topic 820 and are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. We do not expect the adoption of this standard to have a material impact on our financial statements.

In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350). The amendments in this update simplify the test for goodwill impairment by eliminating Step 2 from the impairment test, which required the entity to perform

procedures to determine the fair value at the impairment testing date of its assets and liabilities following the procedure that would be required in determining fair value of assets acquired and liabilities assumed in a business combination. The amendments in this update are effective for public companies for annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. We are evaluating the impact of adopting this guidance on our consolidated financial statements and whether to early adopt this ASU.

In June 2016, the FASB issued ASU 2016-13, Financial ~~Statements.~~Instruments - Credit Losses (Topic 326) - Measurement of Credit Losses on Financial Instruments. The amendments in this update provide financial statement users with more useful information about expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. The amendments to this update are effective for us for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. We are currently evaluating the impact of adopting this guidance on our consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02, Leases. The amendments in this update include a new FASB ~~Accounting Standards Codification ("ASC")~~ASC Topic 842, which supersedes Topic 840. The core principle of Topic 842 is that a lessee should recognize the assets and liabilities that arise from leases. For public ~~business entities,~~companies, the amendments in this update are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early application is permitted for all entities as of the beginning of interim or annual reporting periods. In July 2018, further guidance on this topic was issued with ASU 2018-10, Codification Improvements to Topic 842, Leases, which affects narrow aspects of the guidance in ASU 2016-02, and with ASU 2018-11, Leases (Topic 842): Targeted Improvements, which provides an additional transition method to adopt the new lease standard as well as a practical expedient. The required effective dates for the amendments issued in July 2018 are the same as those for Topic 842. We plan to adopt the standard on April 1, 2019. We are in the process of aggregating and evaluating our lease arrangements. Adoption of this standard will result in a material increase in lease-related assets and liabilities recognized on our Consolidated Balance Sheet, but we are unable to quantify the impact ~~of adopting~~at this ~~guidance on our Financial Statements.~~time.

2. Revenue Recognition

Nature of Goods and Services

~~In May 2014, the FASB issued ASU 2014-09,~~ ~~Revenue from Contracts with Customers - Topic 606~~, including new FASB ASC 606, which supersedes the revenue recognition requirements in FASB ASC 605. The new guidance will eliminate industry-specific revenue recognition guidance under current GAAP and replace it with a principle-based approach for determining revenue recognition. This ASU primarily states that an entity shouldWe recognize revenue from product sales. We primarily ship finished goods to ~~depict~~our customers and operate in three segments: North American OTC Healthcare, International OTC Healthcare, and Household Cleaning (this segment was sold on July 2, 2018). The segments are based on differences in the ~~transfer~~nature of products and geographical area. The North America and International OTC Healthcare segments market a variety of personal care and over-the-counter products in the following product groups: Analgesics, Cough & Cold, Women's Health, Gastrointestinal, Eye & Ear Care, Dermatologicals, and Oral Care. Prior to its sale, the Household Cleaning segment focused on the sale of cleaning products. Our products are distinct and separately identifiable on customer contracts or invoices, with each product sale representing a separate performance obligation.

We sell consumer products under a variety of brands through a broad distribution platform that includes mass merchandisers and drug, food, dollar, convenience and club stores and e-commerce channels, all of which sell our products to consumers.

See Note 18 for disaggregated revenue information.

Satisfaction of Performance Obligations

Revenue is recognized when control of a promised ~~goods or services~~good is transferred to ~~customers~~a customer, in an amount that reflects the consideration ~~to which the entity expects~~that we expect to be entitled to receive in exchange for ~~those~~that good. This occurs either when finished goods ~~and services.~~are transferred to a common carrier for delivery to the customer or when product is picked up by the customer or the customer’s carrier. This ~~ASU will also require additional disclosures regarding~~represents a change in the ~~nature, amount,~~ timing ~~and uncertainty~~ of revenue ~~and cash flows arising from customer contracts. In August 2015,~~recognition for some sales. Refer to the FASB issued ASU 2015-14, which deferred the effective date of ASU 2014-09 from annual and interim periods beginning after December 15, 2016 to annual and interim periods beginning after December 15, 2017. Earlier application is permitted only as of annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. With the issuance of ASU 2016-08table above in March 2016, the FASB clarified the implementation guidance on principals versus agent considerations in FASB ASC 606. In April 2016, the FASB issued ASU 2016-10, which clarified implementation guidance on identifying performance obligations and licensing in FASB ASC 606. Certain narrow aspectsNote 1 for disclosure of the ~~guidance~~adoption date impacts.

Once a product has transferred to the common carrier or been picked up by the customer, the customer is able to direct the use of, and obtain substantially all of the remaining benefits from, the product. It is at this point that we have a right to payment and the customer has legal title.

Variable Consideration

Provisions for certain rebates, customer promotional programs, product returns, and discounts to customers are accounted for as variable consideration and recorded as a reduction in ~~FASB ASC 606 were amended~~sales.

We record an estimate of future product returns concurrent with ~~the issuances of ASU 2016-12 in May 2016 and ASU 2016-20 in December 2016. We expect to adopt this guidance when effective~~recording sales, which is made using the ~~modified retrospective transition method. We have made substantial progress~~most likely amount method which incorporates (i) historical return rates, (ii) current economic trends, (iii) changes in ~~completing~~customer demand, (iv) product

acceptance, (v) seasonality of our ~~review of~~product offerings, and (vi) the impact of ~~this guidance. Our implementation approach includes performing~~changes in product formulation, packaging and advertising.

We participate in the promotional programs of our customers to enhance the sale of our products. 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 allowances for new distribution, including slotting fees, and cooperative advertising. The costs of such activities are recorded as a ~~detailed study~~reduction to revenue when the related sale takes place. Estimates of the ~~various types~~costs of ~~agreements that~~these promotional programs are derived using the most likely amount method, which incorporates (i) historical sales experience, (ii) the current promotional 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.

Practical Expedients

Due to the nature (short duration) of our contracts with customers, we apply the practical expedient related to remaining performance obligations disclosure. Remaining performance obligations relate to contracts with a duration of less than one year, in which we have ~~with~~the right to invoice the customer at the time the performance obligation is satisfied for the amount of revenue recognized at that time. Accordingly, we have elected the practical expedient available under ASC 606 not to disclose remaining performance obligations for our ~~customers~~contracts. The period between when control of the promised products transfers to the customer and ~~assessing conformance of our current accounting practices with~~when the ~~new standard.~~ ~~We currently~~customer pays for the products is one year or less. As such, we do not ~~expect this new guidance to have~~adjust product consideration for the effects of a ~~material impact on our Financial Statements, revenue recognition practices,~~significant financing component. The amortization period of any asset resulting from incremental costs of obtaining a contract would be one year or ~~our internal controls. We continue to monitor additional amendments, clarifications and interpretations issued by the FASB that may affect our current conclusions.~~less.

2.~~Acquisitions~~We expense incremental direct costs of obtaining a contract (broker commissions) when the related sale takes place.

~~Acquisition~~We account for shipping and handling costs as fulfillment activities and therefore recognize them upon shipment of ~~Fleet~~

~~On January 26, 2017, the Company completed the acquisition of C.B. Fleet Company, Inc. ("Fleet~~") pursuant to the Agreement and Plan of Merger, dated as of December 22, 2016, for $823.7 million plus cash on hand at closing and subject to certain adjustments related to net working capital. The purchase price was funded by available cash on hand, additional borrowings under our asset-based revolving credit facility, and a new $740.0 million senior secured incremental term loan. As a result of the merger, we acquired multiple women's health, gastrointestinal and dermatological care OTC brands, including ~~Summer’s Eve~~, ~~Fleet, and~~ ~~Boudreaux's Butt Paste, as well as a “mix and fill” manufacturing facility in Lynchburg, Virginia. The financial results from the~~ ~~Fleet~~ ~~acquisition are included in the Company's North American and International OTC Healthcare segments.~~goods.

The ~~acquisition was accounted for in accordance with Business Combinations topic~~impact of ~~the FASB~~adopting ASC ~~805, which requires that the total cost~~606 on our Condensed Consolidated Statements of ~~an acquisition be allocated to the tangible~~Income and ~~intangible assets acquired and liabilities assumed based upon their respective fair values at the date of acquisition.~~

~~We prepared an analysis of the fair values of the assets acquired and liabilities assumed~~Comprehensive Income is as ~~of the date of acquisition. The following table summarizes our allocation of the assets acquired and liabilities assumed as of the January 26, 2017 acquisition date.~~

follows:

(In thousands) January 26, 2017
Cash $ 19,884
Accounts receivable 25,293
Inventories 20,812
Prepaid expenses and other current assets
17,024
Property, plant and equipment 38,661
Goodwill 273,058
Intangible assets 747,600
Other long-term assets 1,137
Total assets acquired 1,143,469

Accounts payable 10,412
Accrued expenses 22,895
Deferred income taxes - long term 261,555
Other long term liabilities 24,884
Total liabilities assumed 319,746
Total purchase price $ 823,723

Based on this preliminary analysis, we allocated $648.7 million to non-amortizable intangible assets and $98.9 million to amortizable intangible assets. We are amortizing the purchased amortizable intangible assets on a straight-line basis over an estimated weighted average useful life of 18.7 years.

We recorded goodwill of $273.1 million based on the amount by which the purchase price exceeded the fair value of the net assets acquired. The goodwill is a result of acquiring and retaining workforces and expected synergies from integrating ~~Fleet's~~ ~~operations into the Company's. Goodwill is not deductible for income tax purposes.~~

~~The following table provides our unaudited pro forma revenues, net income and net income per basic and diluted common share had the results of~~ ~~Fleet's~~ ~~operations been included in our operations commencing on April 1, 2016, based on available information related to~~ ~~Fleet's~~ ~~operations. This pro forma information is not necessarily indicative either of the combined results of operations that actually would have been realized by us had the~~ ~~Fleet~~ ~~acquisition been consummated at the beginning of the period for which the pro forma information is presented, or of future results.~~

Three Months Ended Six Months Ended

September 30, 2016 September 30, 2016
(In thousands, except per share data) (Unaudited)
Revenues $ 265,967
$ 526,743
Net income $ 32,358
$ 26,428

Earnings per share:

Basic EPS $ 0.61
$ 0.50
Diluted EPS $ 0.61
$ 0.50



	Three Months Ended September 30, 2018							Six Months Ended September 30, 2018
(In thousands)	As Reported		Impact of Change			Without Adoption of ASC 606		As Reported		Impact of Change			Without Adoption of ASC 606
Total revenues	$	239,357	$	(16,165	)	$	223,192	$	493,337	$	(22,110	)	$	471,227
Cost of sales	$	101,885	$	(6,204	)	$	95,681	$	215,242	$	(8,396	)	$	206,846
Total operating expenses	$	66,548	$	(440	)	$	66,108	$	134,684	$	(579	)	$	134,105
Income before income taxes	$	43,519	$	(9,521	)	$	33,998	$	89,979	$	(13,135	)	$	76,844
Provision for income taxes	$	12,678	$	(2,771	)	$	9,907	$	24,672	$	(3,752	)	$	20,920
Net income	$	30,841	$	(6,750	)	$	24,091	$	65,307	$	(9,383	)	$	55,924

3. ~~Divestitures and Sale of License Rights~~Divestiture

~~Divestitures~~

On July ~~7, 2016,~~2, 2018, we ~~completed~~sold the ~~sale~~Comet®, Spic and Span®, Chore Boy®, Chlorinol® and Cinch® brands, as well as associated inventory. These brands represented our Household Cleaning segment.

As a result of ~~the~~ ~~Pediacare, New Skin~~ ~~and~~ ~~Fiber Choice~~ ~~brands for $40.0~~this transaction, we received proceeds of approximately $65.9 million ~~plus the cost of inventory. During the six months ended September 30, 2016, we~~and recorded a pre-tax ~~loss~~gain on sale of ~~$56.2~~$1.3 million. The net proceeds were used to repay debt.

~~Concurrent with~~The following table sets forth the ~~completion~~components of the ~~sale of these brands, we entered into a transitional services agreement with~~assets sold and the buyer, whereby we agreed to provide the buyer with various services, including marketing, operations, finance and other services, from the date of the acquisition through January 7, 2017. We also entered into an option agreement with the buyer to purchase ~~Dermoplast~~ at a specified earnings multiple, as defined in the option agreement. The buyer paid a $1.25 million deposit for this option in September 2016 and later notified us of its election to exercise the option. The sale was completed in December 2016.

~~Sale of license rights~~

Historically, we received royalty income from the licensing of the names of certain of our brands in geographic areas or markets in which we do not directly compete. We have had royalty agreements for our ~~Comet~~ brand for several years, which included options on behalf of the licensee to purchase license rights in certain geographic areas and markets in perpetuity. In December 2014, we amended these agreements and we sold rights to use of the ~~Comet~~ brand in certain Eastern European countries to a third-party licensee in exchange for $10.0 million as a partial early buyout of the license. The amended agreement provided that we would continue to receive royalty payments of $1.0 million per quarter for the remaining geographic areas and also granted the licensee an option to acquire the license rights in the remaining geographic areas any time after June 30, 2016. In July 2016, the licensee elected to exercise its option. In August 2016, we received $11.0 million for the purchase of the remaining license rights and, as a result, we recorded a pre-tax gain ~~of $1.2 million and reduced our indefinite-lived trademarks by $9.0 million. Furthermore,~~recognized on the ~~licensee was no longer required to make additional royalty payments to us, and as a result, our future royalty income was reduced accordingly.~~sale in July 2018:



(In thousands)	July 2, 2018
Components of assets sold:
Inventory	$	6,644
Property, plant and equipment, net	653
Goodwill	6,245
Intangible assets, net	49,315
Assets sold	62,857
Total purchase price received	65,912
	(3,055		)
Costs to sell	1,771
Pre-tax gain on divestiture	$	(1,284	)

4. Inventories

Inventories consist of the following:


(In thousands)	September 30, 2017		March 31, 2017		September 30, 2018		March 31, 2018
Components of Inventories
Packaging and raw materials	$	10,770	$	9,984	$	13,704	$	13,112
Work in process	210		369		237		157
Finished goods	108,504		105,256		99,628		105,278
Inventories	$	119,484	$	115,609	$	113,569	$	118,547

Inventories are carried and depicted above at the lower of cost or net realizable value, which includes a reduction in inventory values of ~~$4.2~~$3.3 million and ~~$6.6~~$4.2 million at September 30, ~~2017~~2018 and March 31, ~~2017,~~2018, respectively, related to obsolete and slow-moving inventory.

5. Goodwill

A reconciliation of the activity affecting goodwill by operating segment is as follows:

(In thousands)
North American OTC
Healthcare

International OTC
Healthcare

Household
Cleaning
Consolidated
Balance — March 31, 2017 $ 576,453
$ 32,554
$ 6,245
$ 615,252
Adjustments ^(a)
4,481
—
—
4,481
Effects of foreign currency exchange rates —
655
—
655
Balance — September 30, 2017 $ 580,934
$ 33,209
$ 6,245
$ 620,388

~~(a) Amount relates to a measurement period adjustment recorded during the three months ended September 30, 2017, associated with our~~ ~~Fleet~~ ~~acquisition.~~



(In thousands)		North American OTC Healthcare			International OTC Healthcare			Household Cleaning			Consolidated
Balance - March 31, 2018
	Goodwill	$	711,104		$	32,919		$	71,405		$	815,428
	Accumulated impairment loss	(130,170		)	—			(65,160		)	(195,330		)
Balance - March 31, 2018		580,934			32,919			6,245			620,098
	2019 Reductions	—			—			(6,245		)	(6,245		)
	Effects of foreign currency exchange rates	—			(1,409		)	—			(1,409		)
Balance - September 30, 2018
	Goodwill	711,104			31,510			65,160			807,774
	Accumulated impairment loss	(130,170		)	—			(65,160		)	(195,330		)
Balance - September 30, 2018		$	580,934		$	31,510		$	—		$	612,444

As discussed in Note 3, on July 2, ~~on January 26, 2017,~~2018, we ~~completed the acquisition of~~ ~~Fleet. In connection with this acquisition,~~sold our Household Cleaning segment. As a result, we ~~recorded~~decreased goodwill ~~of $273.1 million based on the amount~~ by ~~which the purchase price exceeded the fair value of the net assets acquired.~~$6.2 million.

Under accounting guidelines, goodwill is not amortized, but must be tested for impairment annually, or more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of the reporting unit below the carrying amount.

On an annual basis during the fourth quarter of each fiscal year, or more frequently if conditions indicate that the carrying value of the asset may not be recoverable, management performs a review of the values assigned to goodwill and tests for impairment. At February 28, ~~2017,~~2018, during our annual test for goodwill impairment, there were no indicators of impairment under the analysis. Accordingly, no impairment charge was recorded in fiscal ~~2017.~~2018. We utilize the discounted cash flow method to estimate the fair value of our reporting units as part of the goodwill impairment test. We also considered our market capitalization at February 28, ~~2017,~~2018, which was the date of our annual review, as compared to the aggregate fair values of our reporting units, to assess the reasonableness of our estimates pursuant to the discounted cash flow methodology. The estimates and assumptions made in assessing the fair value of our reporting units and the valuation of the underlying assets and liabilities are inherently subject to significant uncertainties. Consequently, changing rates of interest and inflation, declining sales or margins, ~~increases in~~increasing competition, changing consumer preferences, technical advances, or reductions in advertising and promotion may require an impairment charge to be recorded in the future. As of September 30, ~~2017,~~2018, no events have occurred that would indicate potential impairment of goodwill.

6. Intangible Assets, net

A reconciliation of the activity affecting intangible assets, net is as follows:


(In thousands)	Indefinite Lived Trademarks		Finite Lived Trademarks and Customer Relationships		Totals		Indefinite- Lived Trademarks			Finite-Lived Trademarks and Customer Relationships			Totals
Gross Carrying Amounts
Balance — March 31, 2017	$	2,589,155	$	441,801	$	3,030,956
Balance — March 31, 2018							$	2,490,303		$	441,314		$	2,931,617
Reductions							(30,562		)	(34,889		)	(65,451		)
Effects of foreign currency exchange rates	2,068		156		2,224		(5,117		)	(287		)	(5,404		)
Balance — September 30, 2017	2,591,223		441,957		3,033,180
Balance — September 30, 2018							2,454,624			406,138			2,860,762

Accumulated Amortization
Balance — March 31, 2017	—		127,343		127,343
Balance — March 31, 2018							—			150,701			150,701
Additions	—		11,683		11,683		—			11,181			11,181
Reductions							—			(16,136		)	(16,136		)
Effects of foreign currency exchange rates	—		14		14		—			(54		)	(54		)
Balance — September 30, 2017	—		139,040		139,040
Balance — September 30, 2018							—			145,692			145,692

Intangible assets, net — September 30, 2017	$	2,591,223	$	302,917	$	2,894,140
Intangible assets, net — September 30, 2018							$	2,454,624		$	260,446		$	2,715,070

As discussed in Note 3, on July 2, 2018, we sold our Household Cleaning segment. As a result, we decreased our indefinite-lived intangibles by $30.5 million and our net finite-lived trademarks by $18.8 million.

Amortization expense was $5.4 million and $11.2 million for the three and six months ended September 30, 2018, respectively, and $5.8 million and $11.7 million for the three and six months ended September 30, 2017, respectively. Based on ~~January 26, 2017, we completed the acquisition of~~ ~~Fleet. In connection with this acquisition, we allocated $747.6 million to~~our amortizable intangible assets ~~based on our analysis.~~as of September 30, 2018, amortization expense is expected to be approximately $10.7 million for the remainder of fiscal 2019, $21.5 million in fiscal 2020, $21.0 million in fiscal 2021 and $20.6 million in each of fiscal 2022, 2023 and 2024.

Under accounting guidelines, indefinite-lived assets are not amortized, but must be tested for impairment annually, or more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of the asset below the carrying amount. The date of our annual impairment review was February 28, 2018, and we recorded impairment charges in our March 31, 2018 financial statements. Additionally, at each reporting period, an evaluation must be made to determine whether events and circumstances continue to support an indefinite useful life. Intangible assets with finite lives are amortized over their respective estimated useful lives and are also tested for impairment whenever events or changes in circumstances indicate that the carrying value of the asset may not be recoverable and exceeds its fair value.

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

We utilize the excess earnings method to estimate the fair value of our individual indefinite-lived intangible assets. ~~We also considered our market capitalization at February 28, 2017, which was~~The discount rate utilized in the ~~date of our annual impairment review. The estimates~~analyses, as well as future cash flows, may be influenced by such factors as changes in interest rates and assumptions made in assessing the fair value of our reporting units and the valuation of the underlying assets and liabilities are inherently subject to significant uncertainties. Consequently, changing rates of ~~interest and inflation,~~inflation. Additionally, should the related fair values of intangible assets be adversely affected as a result of declining sales or

margins ~~increases in~~caused by competition, changing consumer preferences, ~~technical~~technological advances or reductions in advertising and ~~promotion~~promotional expenses, we may ~~require an~~be required to record impairment ~~charge to be recorded~~charges in the future.

As of September 30, ~~2017,~~2018, no events have occurred that would indicate further potential impairment of intangible assets.

7. Other Accrued Liabilities

Other accrued liabilities consist of the following:


(In thousands)	September 30, 2017		March 31, 2017		September 30, 2018		March 31, 2018
Accrued marketing costs	$	30,021	$	29,384	$	28,457	$	21,473
Accrued compensation costs	8,782		15,535		6,523		10,591
Accrued broker commissions	1,179		1,782		2,113		1,487
Income taxes payable	3,005		3,840		12,735		1,901
Accrued professional fees	2,662		2,412		3,877		2,244
Accrued production costs	5,215		4,580		6,388		7,392
Income tax related payable	13,921		19,000
Other accrued liabilities	8,346		7,128		9,964		7,013
	$	73,131	$	83,661	$	70,057	$	52,101

8. Long-Term Debt

At September 30, ~~2017,~~2018, we had ~~$90.0~~$75.0 million outstanding on the asset-based revolving credit facility entered into January 31, 2012, as amended (the "2012 ABL Revolver") and an additional borrowing capacity of $85.0 million.

Long-term debt consists of the following, as of the dates indicated:


(In thousands, except percentages)	September 30, 2017			March 31, 2017			September 30, 2018			March 31, 2018
2016 Senior Notes bearing interest at 6.375%, with interest payable on March 1 and September 1 of each year. The 2016 Senior Notes mature on March 1, 2024.	$	350,000		$	350,000		$	600,000		$	600,000
2013 Senior Notes bearing interest at 5.375%, with interest payable on June 15 and December 15 of each year. The 2013 Senior Notes mature on December 15, 2021.	400,000			400,000			400,000			400,000
2012 Term B-4 Loans bearing interest at our option at either LIBOR plus a margin of 2.75%, with a LIBOR floor of 0.75%, or a base rate plus a margin (with a margin step-down to 2.50%) due on January 26, 2024.	1,277,000			1,382,000
2012 ABL Revolver bearing interest at our option at either a base rate plus applicable margin or LIBOR plus applicable margin. Any unpaid balance is due on January 26, 2022.	90,000			90,000
Total long-term debt (including current portion)	2,117,000			2,222,000
Current portion of long-term debt	—			—
2012 Term B-5 Loans bearing interest at the Borrower's option at either LIBOR plus a margin of 2.00%, with a LIBOR floor of 0.00%, or an alternate base rate plus a margin of 1.00%, with a floor of 1.00%, due on January 26, 2024.							838,000			938,000
2012 ABL Revolver bearing interest at the Borrower's option at either a base rate plus applicable margin or LIBOR plus applicable margin. Any unpaid balance is due on January 26, 2022.							75,000			75,000
Long-term debt	2,117,000			2,222,000			1,913,000			2,013,000
Less: unamortized debt costs	(24,912		)	(28,268		)	(17,165		)	(20,048		)
Long-term debt, net	$	2,092,088		$	2,193,732		$	1,895,835		$	1,992,952

As of September 30, ~~2017,~~2018, aggregate future principal payments required in accordance with the terms of the 2012 Term ~~B-4~~B-5 Loans, 2012 ABL Revolver and the indentures governing the 6.375% senior unsecured notes due 2024 (the "2016 Senior Notes") and the 5.375% senior unsecured notes due 2021 (the "2013 Senior Notes") are as follows:


(In thousands)	(In thousands)			(In thousands)
Year Ending March 31,	Year Ending March 31,	Amount		Year Ending March 31,	Amount
2018 (remaining six months ending March 31, 2018)		$	—
2019		—
2019 (remaining six months ending March 31, 2019)				2019 (remaining six months ending March 31, 2019)	$	—
2020	2020	—			—
2021	2021	—			—
2022	2022	490,000			475,000
2023					—
Thereafter	Thereafter	1,627,000		Thereafter	1,438,000
		$	2,117,000		$	1,913,000

9. Fair Value Measurements

For certain of our financial instruments, including cash, accounts receivable, accounts payable and other current liabilities, the carrying amounts approximate their respective fair values due to the relatively short maturity of these amounts.

FASB ASC 820, Fair Value Measurements, requires fair value to be determined based on the exchange price that would be received for an asset or paid to transfer a liability in the principal or most advantageous market assuming an orderly transaction between market participants. ASC 820 established market (observable inputs) as the preferred source of fair value, to be followed by ~~the Company's~~our assumptions of fair value based on hypothetical transactions (unobservable inputs) in the absence of observable market inputs. Based upon the above, the following fair value hierarchy was created:

Level 1 - Quoted market prices for identical instruments in active markets;

Level 2 - Quoted prices for similar instruments in active markets, as well as quoted prices for identical or similar instruments in markets that are not considered active; and

Level 3 - Unobservable inputs developed by ~~the Company~~us using estimates and assumptions reflective of those that would be utilized by a market participant.

The market values have been determined based on market values for similar instruments adjusted for certain factors. As such, the 2016 Senior Notes, the 2013 Senior Notes, the 2012 Term ~~B-4~~B-5 Loans, and the 2012 ABL Revolver are measured in Level 2 of the above ~~hierarchy (see~~hierarchy. See summary below detailing the carrying amounts and estimated fair values of these borrowings at September 30, ~~2017~~2018 and March 31, ~~2017).~~2018.


	September 30, 2017				March 31, 2017				September 30, 2018				March 31, 2018
(In thousands)	Carrying Value		Fair Value		Carrying Value		Fair Value		Carrying Value		Fair Value		Carrying Value		Fair Value
2016 Senior Notes	$	350,000	$	375,375	$	350,000	$	367,500	$	600,000	$	606,000	$	600,000	$	610,500
2013 Senior Notes	400,000		412,000		400,000		409,000		400,000		400,000		400,000		402,000
2012 Term B-4 Loans	1,277,000		1,283,385		1,382,000		1,395,820
2012 Term B-5 Loans									838,000		838,000		938,000		939,173
2012 ABL Revolver	90,000		90,000		90,000		90,000		75,000		75,000		75,000		75,000

At September 30, ~~2017~~2018 and March 31, ~~2017,~~2018, we did not have any assets or liabilities measured in Level 1 or 3.

~~In accordance with ASU 2015-07,~~ ~~Fair Value Measurement (Topic 820): Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent), investments that are measured at fair value using net asset value ("NAV") per share as a practical expedient have not been classified in the fair value hierarchy.~~

10. Stockholders' Equity

~~The Company is~~We are 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 outstanding stock having priority rights as to dividends. No dividends have been declared or paid on ~~the Company's~~our common stock through September 30, ~~2017~~2018.

During the three months ended September 30, 2018, we made no repurchases of common stock. During the three months ended September 30, 2017, ~~and 2016,~~ we repurchased 933 shares ~~and 0 shares, respectively,~~ of ~~restricted~~ common stock from our employees pursuant to the provisions of various employee restricted stock awards. The repurchases for the three months ended September 30, 2017 were at an average price of $51.60. During the six months ended September 30, ~~2017~~2018 and ~~2016,~~2017, we repurchased ~~20,549~~68,939 shares and ~~24,988~~20,549 shares, respectively, of ~~restricted~~ common stock from our employees pursuant to the provisions of various employee restricted stock awards. The repurchases for the six months ended September 30, ~~2017~~2018 and ~~2016~~2017 were at an average price of ~~$52.33~~$33.09 and ~~$55.82,~~$52.33, respectively. All of the repurchased shares have been recorded as treasury stock.

During the six months ended September 30, 2018, we repurchased 1,449,750 shares of our common stock in conjunction with our share repurchase program. The repurchases were at an average price of $34.47 per share, totaled $50.0 million, and have been recorded as treasury stock.

11. Accumulated Other Comprehensive Loss

~~The table below presents accumulated~~Accumulated other comprehensive loss ~~(“AOCI”), which affects equity and results from recognized transactions and other economic events, other than transactions with owners in their capacity as owners.~~

~~AOCI~~ consisted of the following at September 30, ~~2017~~2018 and March 31, ~~2017~~2018:


	September 30,			March 31,
(In thousands)	2017			2017			September 30, 2018			March 31, 2018
Components of Accumulated Other Comprehensive Loss
Cumulative translation adjustment	$	(22,265	)	$	(26,100	)	$	(25,517	)	$	(20,398	)
Unrecognized net loss on pension plans	(251		)	(252		)
Unrecognized net gain on pension plans							1,083			1,083
Accumulated other comprehensive loss, net of tax	$	(22,516	)	$	(26,352	)	$	(24,434	)	$	(19,315	)

As of September 30, ~~2017~~2018 and March 31, ~~2017,~~2018, no amounts were reclassified from accumulated other comprehensive income into earnings.

12. Earnings Per Share

Basic earnings per share is computed based on income available to common stockholders and the weighted-average number of shares of common stock outstanding during the period. Diluted earnings per share is computed based on income available to common stockholders and the weighted-average number of shares of common stock outstanding plus the effect of potentially dilutive common shares outstanding during the period using the treasury stock method, which includes stock options and restricted stock ~~units.~~units ("RSUs"). Potential common shares, composed of the incremental common shares issuable upon the exercise of outstanding stock options and nonvested RSUs, are included in the diluted earnings per share calculation to the extent that they are dilutive. In loss periods, the assumed exercise of in-the-money stock options and restricted stock units has an anti-dilutive effect, and therefore these instruments are excluded from the computation of diluted earnings per share.

The following table sets forth the computation of basic and diluted earnings per share:


	Three Months Ended September 30,				Six Months Ended September 30,				Three Months Ended September 30,				Six Months Ended September 30,
(In thousands, except per share data)	2017		2016		2017		2016		2018		2017		2018		2017
Numerator
Net income	$	30,705	$	32,195	$	64,464	$	26,664	$	30,841	$	30,705	$	65,307	$	64,464

Denominator
Denominator for basic earnings per share — weighted average shares outstanding	53,098		52,993		53,068		52,941		51,841		53,098		52,238		53,068
Dilutive effect of unvested restricted stock units and options issued to employees and directors	441		352		456		388
Dilutive effect of nonvested restricted stock units and options issued to employees and directors									312		441		307		456
Denominator for diluted earnings per share	53,539		53,345		53,524		53,329		52,153		53,539		52,545		53,524

Earnings per Common Share:
Basic net earnings per share	$	0.58	$	0.61	$	1.21	$	0.50
Basic earnings per share									$	0.59	$	0.58	$	1.25	$	1.21

Diluted net earnings per share	$	0.57	$	0.60	$	1.20	$	0.50
Diluted earnings per share									$	0.59	$	0.57	$	1.24	$	1.20

For the three months ended September 30, ~~2017~~2018 and ~~2016,~~2017, there were ~~0.4~~0.7 million and ~~0.2~~0.4 million shares, respectively, attributable to outstanding stock-based awards that were excluded from the calculation of diluted earnings per share because their inclusion would have been anti-dilutive. For the six months ended September 30, ~~2017~~2018 and ~~2016,~~2017, there were ~~0.4~~0.5 million and ~~0.2~~0.4 million shares, respectively, attributable to outstanding stock-based awards that were excluded from the calculation of diluted earnings per share because their inclusion would have been anti-dilutive.

13. Share-Based Compensation

In connection with our initial public offering, the Board of Directors adopted the 2005 Long-Term Equity Incentive Plan (the “Plan”), which provides for grants of up to a maximum of 5.0 million shares of restricted stock, stock options, ~~restricted stock units ("RSUs")~~RSUs and other equity-based awards. In June 2014, the Board of Directors approved, and in July 2014, our stockholders ratified, an increase of an additional 1.8 million shares of our common stock for issuance under the Plan, ~~increased~~an increase of the maximum number of shares subject to stock options that may be awarded to any one participant under the Plan during any fiscal 12-month period from 1.0 million to 2.5 million shares, and ~~extended~~an extension of the term of the Plan by ten years, to February 2025. 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.

During the three and six months ended September 30, 2018, pre-tax share-based compensation costs charged against income were $2.7 million and $4.3 million, respectively, and the related income tax benefit recognized was $0.5 million and $0.8 million, respectively. During the three and six months ended September 30, 2017, pre-tax share-based compensation costs charged against income were $3.0 million and $4.7 million, respectively, and the related income tax benefit recognized was $1.0 million and $1.5 million, respectively. During the three and six months ended September 30, 2016, pre-tax share-based compensation costs charged against income were $2.0 million and $3.9 million, respectively, and the related income tax benefit recognized was $0.5 million and $1.2 million, respectively.

At September 30, ~~2017,~~2018, there were ~~$10.7~~$9.4 million of unrecognized compensation costs related to ~~unvested~~nonvested share-based compensation arrangements under the Plan, based on management's estimate of the shares that will ultimately vest. We expect to recognize such costs over a weighted-average period of 1.0 year. The total fair value of options and ~~restricted stock units~~RSUs vested during the six months ended September 30, 2018 and 2017 ~~and 2016~~ was ~~$6.7~~$11.9 million and ~~$6.0~~$6.7 million, respectively. For the six months ended September 30, ~~2017~~2018 and ~~2016,~~2017, we received cash from the exercise of stock options of ~~$1.5~~$1.0 million and ~~$3.4~~$1.5 million, respectively. For the six months ended September 30, ~~2017~~2018 and ~~2016,~~2017, we realized $1.2 million and ~~$1.7~~$1.2 million, respectively, in tax benefits from the tax deductions resulting from ~~restricted stock~~RSU issuances and stock option exercises. At September 30, ~~2017,~~2018, there were ~~2.2~~1.8 million shares available for issuance under the Plan.

On May ~~8, 2017,~~7, 2018, the Compensation and Talent Management Committee of our Board of Directors granted ~~35,593~~103,406 performance stock units, ~~54,773~~100,399 RSUs and stock options to acquire ~~182,823~~294,484 shares of our common stock to certain executive officers and

employees under the Plan. The stock options were granted at an exercise price of ~~$56.11~~$29.46 per share, which was equal to the closing price for our common stock on the date of the grant.

~~Pursuant to the Plan, each~~Each of the independent members of the Board of Directors received a grant under the Plan of ~~2,564~~3,779 RSUs on August 1, 2017. The RSUs are fully vested upon receipt of the award and will be settled by delivery to the director of one share of common stock of the Company for each vested RSU promptly following the earliest of the director's (i) death, (ii) disability or (iii) the six-month anniversary of the date on which the director's Board membership ceases for reasons other than death or disability.July 31, 2018.

~~Restricted~~Restricted Stock Units

RSUs granted to employees under the Plan generally vest in three years, primarily upon the attainment of certain time vesting thresholds, and, in the case of performance share units, may also be contingent on the attainment of certain performance goals of the Company, including revenue and earnings before income taxes, depreciation and amortization targets. The RSUs provide for accelerated vesting if there is a change of control, as defined in the Plan. The RSUs granted to employees generally vest either ratably over three years or in their entirety on the three-year anniversary of the date of the grant. Upon vesting, the units will be settled in shares of our common stock. Termination of employment prior to vesting will result in forfeiture of the RSUs, unless otherwise accelerated by the Compensation and Talent Management Committee or, in the case of RSUs granted in May 2017 and 2018, subject to pro-rata vesting in the event of death, disability or retirement. The RSUs granted to directors vest ~~either in their entirety one year after the date of grant so long as membership on the Board of Directors continues through the vesting date, or~~ immediately upon grant, and will be settled by delivery to the director of one share of our common stock ~~of the Company~~ for each vested RSU promptly following the earliest of the director's (i) death, (ii) disability or (iii) the six-month anniversary of the date on which the director's Board membership ceases for reasons other than death or disability.

The fair value of the RSUs is determined using the closing price of our common stock on the date of the grant. ~~The weighted-average grant-date fair value of RSUs granted during the six months ended~~ ~~September 30, 2017~~ ~~and~~ ~~2016~~ ~~was $55.61 and $55.65, respectively.~~

A summary of the ~~Company's~~ RSUs granted under the Plan is presented below:


RSUs	Shares (in thousands)		Weighted- Average Grant-Date Fair Value		Shares (in thousands)		Weighted- Average Grant-Date Fair Value
Six months ended September 30, 2016
Vested and nonvested at March 31, 2016	467.8		$	35.22
Granted	65.8		55.65
Vested and issued	(92.7	)	28.47
Forfeited	(91.0	)	41.69
Vested and nonvested at September 30, 2016	349.9		39.16
Vested at September 30, 2016	63.4		20.12

Six months ended September 30, 2017
Six Months Ended September 30, 2017
Vested and nonvested at March 31, 2017	350.1		$	39.29	350.1		$	39.29
Granted	105.8		55.61		105.8		55.61
Vested and issued	(53.3	)	34.30		(53.3	)	34.30
Forfeited	(6.7	)	49.30		(6.7	)	49.30
Vested and nonvested at September 30, 2017	395.9		44.15		395.9		44.15
Vested at September 30, 2017	90.5		29.88		90.5		29.88

Six Months Ended September 30, 2018
Vested and nonvested at March 31, 2018					393.5		$	44.13
Granted					226.4		30.09
Vested and issued					(175.8	)	43.05
Forfeited					(31.1	)	48.32
Vested and nonvested at September 30, 2018					413.0		36.58
Vested at September 30, 2018					113.2		31.05

Options

The Plan provides that the exercise price of options granted shall be no less than the fair market value of ~~the Company's~~our common stock on the date the options are granted. Options granted have a term of no greater than ten years from the date of grant and vest in accordance with a schedule determined at the time the option is granted, generally three to five years. The option awards provide for accelerated vesting in the event of a change in control, as defined in the Plan. Except in the case of death, disability or retirement, termination of employment prior to vesting will result in forfeiture of the ~~unvested~~nonvested stock options. Vested stock options will remain exercisable by the employee after termination of employment, subject to the terms in the Plan.

The fair value of each option award is estimated on the date of grant using the Black-Scholes Option Pricing Model that uses the assumptions noted in the table below. Expected volatilities are based on the historical volatility of our common stock and other factors, including the historical volatilities of comparable companies. We use appropriate historical data, as well as current data, to estimate option exercise and employee termination behaviors. Employees that are expected to exhibit similar exercise or termination behaviors are grouped together for the purposes of valuation. The expected terms of the options granted are derived

from our historical experience, management's estimates, and consideration of information derived from the public filings of companies similar to us, and represent the period of time that options granted are expected to be outstanding. The risk-free rate represents the yield on U.S. Treasury bonds with a maturity equal to the expected term of the granted options.

The weighted-average grant-date fair values of the options granted during the six months ended September 30, 2018 and 2017 were $10.22 and ~~2016 were~~ $21.20, ~~and $21.87,~~ respectively.


	Six months ended September 30,						Six Months Ended September 30,
	2017			2016			2018			2017
Expected volatility	35.2		%	37.8		%	29.6		%	35.2		%
Expected dividends	$	—		$	—		$	—		$	—
Expected term in years	6.0			6.0			6.0			6.0
Risk-free rate	2.2		%	1.7		%	2.9		%	2.2		%

A summary of option activity under the Plan is as follows:


Options	Shares (in thousands)		Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (years)	Aggregate Intrinsic Value (in thousands)		Shares (in thousands)		Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (years)	Aggregate Intrinsic Value (in thousands)
Six months ended September 30, 2016
Outstanding at March 31, 2016	727.7		$	30.70
Granted	250.6		56.17
Exercised	(107.1	)	31.97
Forfeited or expired	(90.7	)	42.56
Outstanding at September 30, 2016	780.5		37.33		7.5	$	10,326
Exercisable at September 30, 2016	383.7		25.61		6.5	$	8,693

Six months ended September 30, 2017
Six Months Ended September 30, 2017
Outstanding at March 31, 2017	772.3		$	37.70				772.3		$	37.70
Granted	182.8		56.11					182.8		56.11
Exercised	(51.0	)	28.76					(51.0	)	28.76
Forfeited or expired	(19.0	)	47.57					(19.0	)	47.57
Outstanding at September 30, 2017	885.1		41.80		7.5	$	9,768	885.1		41.80		7.5	$	9,768
Exercisable at September 30, 2017	498.4		32.34		6.3	$	9,305	498.4		32.34		6.3	$	9,305

Six Months Ended September 30, 2018
Outstanding at March 31, 2018								873.2		$	41.79
Granted								294.5		29.46
Exercised								(37.2	)	27.60
Forfeited or expired								(125.4	)	47.16
Outstanding at September 30, 2018								1,005.1		38.03		7.3	$	6,271
Exercisable at September 30, 2018								555.2		37.08		6.4	$	3,890

The aggregate intrinsic value of options exercised induring the six months ended September 30, ~~2017~~2018 was ~~$1.2~~$0.3 million.

14. Income Taxes

On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Act. The Tax Act represents significant U.S. federal tax reform legislation that includes a permanent reduction to the U.S. federal corporate income tax rate. The permanent reduction to the federal corporate income tax rate resulted in a one-time gain of $267.0 million related to the value of our deferred tax liabilities and a gain of $3.2 million related to the lower blended tax rate on our earnings, in the year ended March 31, 2018, resulting in a net gain of $270.2 million. Additionally, the Tax Act subjects certain of our cumulative foreign earnings and profits to U.S. income taxes through a deemed repatriation, which resulted in a charge of $1.9 million in the year ended March 31, 2018.

The changes included in the Tax Act are broad and complex. The final transition impacts of the Tax Act may differ from the above estimates, possibly materially, due to, among other things, changes in interpretations of the Tax Act, any legislative action to address questions that arise because of the Tax Act, any changes in accounting standards for income taxes or related interpretations in response to the Tax Act, or any updates or changes to estimates we have utilized to calculate the transition impacts, including impacts from changes to current year earnings estimates and foreign exchange rates of foreign subsidiaries. The U.S. Securities and Exchange Commission ("SEC") has issued rules that allow for a measurement period of up to one year after the enactment

date of the Tax Act to finalize the recording of the related tax impacts. We currently anticipate finalizing and recording any resulting adjustment by the end of the measurement period.

Income taxes are recorded in our quarterly financial statements based on our estimated annual effective income tax rate, subject to adjustments for discrete events, should they occur. The effective rates used in the calculation of income taxes were ~~37.7%~~29.1% and ~~35.9%~~37.7% for the three months ended September 30, ~~2017~~2018 and ~~2016,~~2017, respectively. The effective rates used in the calculation of income taxes were ~~36.8%~~27.4% and ~~35.5%~~36.8% for the six months ended September 30, ~~2017~~2018 and ~~2016,~~2017, respectively. The ~~increase~~decreases in the effective tax ~~rate~~rates for the three and six months ended September 30, ~~2017 was~~2018 versus the respective prior year periods were primarily ~~due~~related to ~~state tax increases that occurred during~~ the ~~period.~~Tax Act.

The balance in our uncertain tax liability was ~~$8.1~~$10.8 million at September 30, ~~2017~~2018 and ~~$3.7 million~~at March 31, ~~2017. The increase in our uncertain tax liability was related to a measurement period adjustment associated with our~~ ~~Fleet~~ ~~acquisition.~~2018. We recognize interest and penalties related to uncertain tax positions as a component of income tax expense. We did not incur any material interest or penalties related to income taxes in any of the periods presented.

15. Employee Retirement Plans

The primary components of Net Periodic Benefits consist of the following:


							Three Months Ended September 30,						Six Months Ended September 30,
(In thousands)	Three Months Ended September 30, 2017			Six Months Ended September 30, 2017			2018			2017			2018			2017
Interest cost	$	634		$	1,263		$	610		$	634		1,220			$	1,263
Expected return on assets	(725		)	(1,451		)	(768		)	(725		)	(1,536		)	(1,451		)
Net periodic benefit cost (income)	$	(91	)	$	(188	)
Net periodic benefit income							$	(158	)	$	(91	)	$	(316	)	$	(188	)

During the six months ended September 30, ~~2017, the Company~~2018, we contributed $0.2 million to our non-qualified defined benefit plan and ~~made no contributions~~$1.0 million to the qualified defined benefit plan. During the remainder of fiscal ~~2018,~~2019, we expect to contribute an additional $0.2 million to ~~the~~our non-qualified plan and make no contributions to the qualified plan.

16. Commitments and Contingencies

We are involved from time to time in legal matters and other claims incidental to our business. We review outstanding claims and proceedings internally and with external counsel as necessary to assess the probability and amount of a potential loss. These assessments are re-evaluated at each reporting period 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 GAAP 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). We believe the resolution of routine legal matters and other claims incidental to our business, taking our reserves into account, will not have a material adverse effect on our business, financial condition, or results of operations.

~~Purchase Commitments~~

~~We have supply agreements for the manufacture of some of our products. The following table shows the minimum amounts that we are committed to pay under these agreements:~~

(In thousands)
Year Ending March 31, Amount
2018 (Remaining six months ending March 31, 2018) $ 2,836
2019 9,082
2020 9,859
2021 9,300
2022 9,300
Thereafter 2,300
$ 42,677

17. Concentrations of Risk

Our revenues are concentrated in the areas of OTC Healthcare and Household Cleaning ~~products.~~products (prior to the sale of our Household Cleaning segment, as discussed in Note 3). We sell our products to mass merchandisers and drug, food, dollar, convenience and club ~~stores.~~stores and e-commerce channels. During the three and six months ended September 30, 2018, approximately 44.7% and 43.5%, respectively, of our gross revenues were derived from our five top selling brands. During the three and six months ended September 30, 2017, approximately 40.8% and 42.0%, respectively, of our ~~total revenues were derived from our five top selling brands. During the three and six months ended September 30, 2016, approximately 41.6% and 42.0%, respectively, of our total~~gross revenues were derived from our five top selling brands. Two customers, Walmart and Walgreens, accounted for more than 10% of our gross revenues for ~~each~~certain periods presented. Walmart accounted for approximately 23.6% and 24.1%, respectively, of our gross revenues for the ~~periods presented.~~three and six months ended September 30, 2018. Walgreens accounted for approximately 10.0% and 9.3%, respectively, of our gross revenues for the three and six months ended September 30, 2018. Walmart accounted for approximately 25.3% and 25.4%, respectively, of our gross revenues for the three and six months ended September 30, 2017. Walgreens accounted for approximately 8.7% and 8.9%, respectively, of our gross revenues for the three and six months ended September 30, 2017. ~~Walmart accounted for approximately 21.1% and 20.9%, respectively, of our~~The gross revenues for the three and six months ended September 30, 2016. Walgreens accounted for approximately 10.7% and 10.5%, respectively, of gross revenues for the three and six months ended September 30, 2016. At September 30, 2017, approximately 24.9% and 8.3% of accounts receivable were owed by Walmart and Walgreens ~~respectively.~~are included in our North American OTC Healthcare segment and Household Cleaning segment (prior to the sale of our Household Cleaning segment on July 2, 2018).

~~We manage~~

Our product distribution in the ~~continental~~ United States is managed by a third party through ~~a third-party~~one primary distribution center innear St. Louis, ~~Missouri.~~Missouri, and we operate one manufacturing facility located in Lynchburg, Virginia. A serious disruption, ~~such as an~~caused by performance or contractual issues with the third party distribution manager or by earthquake, ~~tornado,~~ flood, or fire, ~~to the main distribution center~~ could damage our ~~inventories and could~~inventory and/or materially impair our ability to distribute our products to customers in a timely manner or at a reasonable cost. Any disruption as a result of third party performance at our distribution center could result in increased costs, expense, shipping times, customer fees and penalties. In addition, any serious disruption to our Lynchburg manufacturing facility could materially impair our ability to manufacture many of our products, which would also limit our ability to provide products to customers in a timely manner or at a reasonable cost. We could also incur significantly higher costs and experience longer lead times ~~associated with the distribution of our products to our customers during the time that it takes us~~should we be required to reopen or replace our primary distribution ~~center.~~center, the third party distribution manager or the manufacturing facility. As a result, any ~~such~~serious disruption could have a material adverse effect on our business, ~~sales~~financial condition and ~~profitability.~~results of operations.

At September 30, 2018, we had relationships with 110 third-party manufacturers. Of those, we had long-term contracts with 34 manufacturers that produced items that accounted for approximately 60.0% of gross sales for the six months ended September 30, 2018. At September 30, 2017, we had relationships with 110 third-party manufacturers. Of those, we had long-term contracts with 45 manufacturers that produced items that accounted for approximately 79.5% of gross sales for the six months ended September 30, 2017. At September 30, 2016, we had relationships with 116 third-party manufacturers. Of those, we had long-term contracts with 49 manufacturers that produced items that accounted for approximately 78.8% of gross sales for the six months ended September 30, 2016. The fact that we do not have long-term contracts with certain manufacturers means that they could cease manufacturing our products at any time and for any reason or initiate arbitrary and costly price increases, which could have a material adverse effect on our business and results of operations. Although we are in the process of negotiating long-term contracts with certain key manufacturers, we may not be able to reach a timely agreement, which could have a material adverse effect on our business and results of operations.

18. Business Segments

Segment information has been prepared in accordance with the Segment Reporting topic of the FASB ASC 280. Our current reportable segments consist of (i) North American OTC Healthcare and (ii) International OTC ~~Healthcare and (iii)~~Healthcare. We sold our Household ~~Cleaning.~~Cleaning segment on July 2, 2018; see Note 3 for further information. We evaluate the performance of our operating segments and allocate resources to these segments based primarily on contribution margin, which we define as gross profit less advertising and promotional expenses.

The tables below summarize information about our reportable segments.

Three Months Ended September 30, 2017
(In thousands) North American OTC
Healthcare
International OTC
Healthcare
Household
Cleaning
Consolidated
Total segment revenues* $ 215,302

$ 20,957

$ 21,767

$ 258,026
Cost of sales 87,184

9,296

17,448

113,928
Gross profit 128,118

11,661

4,319

144,098
Advertising and promotion 35,064

3,593

531

39,188
Contribution margin $ 93,054

$ 8,068

$ 3,788

104,910
Other operating expenses

28,753
Operating income

76,157
Other expense

26,836
Income before income taxes

49,321
Provision for income taxes

18,616
Net income

$ 30,705



	Three Months Ended September 30, 2018
(In thousands)	North American OTC Healthcare		International OTC Healthcare		Household Cleaning		Consolidated
Total segment revenues*	$	215,950	$	23,407	$	—	$	239,357
Cost of sales	92,007		9,878		—		101,885
Gross profit	123,943		13,529		—		137,472
Advertising and promotion	33,325		3,717		—		37,042
Contribution margin	$	90,618	$	9,812	$	—	100,430
Other operating expenses							29,506
Operating income							70,924
Other expense							27,405
Income before income taxes							43,519
Provision for income taxes							12,678
Net income							$	30,841

* Intersegment revenues of $1.6 million were eliminated from the North American OTC Healthcare segment.



	Six Months Ended September 30, 2018
(In thousands)	North American OTC Healthcare		International OTC Healthcare		Household Cleaning		Consolidated
Total segment revenues*	$	430,725	$	42,801	$	19,811	$	493,337
Cost of sales	181,160		17,494		16,588		215,242
Gross profit	249,565		25,307		3,223		278,095
Advertising and promotion	66,583		7,140		430		74,153
Contribution margin	$	182,982	$	18,167	$	2,793	203,942
Other operating expenses							60,531
Operating income							143,411
Other expense							53,432
Income before income taxes							89,979
Provision for income taxes							24,672
Net income							$	65,307

* Intersegment revenues of $4.3 million were eliminated from the North American OTC Healthcare segment.



	Three Months Ended September 30, 2017
(In thousands)	North American OTC Healthcare		International OTC Healthcare		Household Cleaning		Consolidated
Total segment revenues*	$	215,302	$	20,957	$	21,767	$	258,026
Cost of sales	87,184		9,296		17,448		113,928
Gross profit	128,118		11,661		4,319		144,098
Advertising and promotion	35,064		3,593		531		39,188
Contribution margin	$	93,054	$	8,068	$	3,788	104,910
Other operating expenses							29,185
Operating income							75,725
Other expense							26,404
Income before income taxes							49,321
Provision for income taxes							18,616
Net income							$	30,705

* Intersegment revenues of $2.3 million were eliminated from the North ~~America~~American OTC Healthcare segment.

Six Months Ended September 30, 2017
(In thousands) North American OTC
Healthcare International OTC
Healthcare
Household
Cleaning
Consolidated
Total segment revenues* $ 431,117

$ 41,855

$ 41,627

$ 514,599
Cost of sales 173,685

19,246

34,094

227,025
Gross profit 257,432

22,609

7,533

287,574
Advertising and promotion 67,872

7,283

977

76,132
Contribution margin $ 189,560

$ 15,326

$ 6,556

211,442
Other operating expenses

56,256
Operating income

155,186
Other expense

53,177
Income before income taxes

102,009
Provision for income taxes

37,545
Net income

$ 64,464



	Six Months Ended September 30, 2017
(In thousands)	North American OTC Healthcare		International OTC Healthcare		Household Cleaning		Consolidated
Total segment revenues*	$	431,117	$	41,855	$	41,627	$	514,599
Cost of sales	173,685		19,246		34,094		227,025
Gross profit	257,432		22,609		7,533		287,574
Advertising and promotion	67,872		7,283		977		76,132
Contribution margin	$	189,560	$	15,326	$	6,556	211,442
Other operating expenses							56,762
Operating income							154,680
Other expense							52,671
Income before income taxes							102,009
Provision for income taxes							37,545
Net income							$	64,464

* Intersegment revenues of $3.7 million were eliminated from the North American OTC Healthcare segment.

Three Months Ended September 30, 2016
(In thousands) North American OTC
Healthcare
International OTC
Healthcare
Household
Cleaning
Consolidated
Total segment revenues* $ 172,447

$ 18,804

$ 23,801

$ 215,052
Cost of sales 65,402

7,096

18,589

91,087
Gross profit 107,045

11,708

5,212

123,965
Advertising and promotion 24,811

3,244

537

28,592
Contribution margin $ 82,234

$ 8,464

$ 4,675

95,373
Other operating expenses**

24,315
Operating income

71,058
Other expense

20,830
Income before income taxes

50,228
Provision for income taxes

18,033
Net income

$ 32,195

* Intersegment revenues of $0.1 million were eliminated from the North American OTC Healthcare segment.

**Other operating expenses for the three months ended September 30, 2016 includes a pre-tax loss on sale of assets of $0.7 million related to ~~Pediacare~~, ~~New Skin,~~ ~~and~~ ~~Fiber Choice~~ ~~and a pre-tax gain on sale of assets of $1.2 million associated with the sale of license rights in certain geographic areas pertaining to~~ ~~Comet. The assets and corresponding contribution margin associated with the pre-tax loss on sale of assets related to~~ ~~Pediacare~~, ~~New Skin,~~ ~~and~~ ~~Fiber Choice~~ ~~are included within the North American OTC Healthcare segment, while the pre-tax gain on sale of license rights related to~~ ~~Comet~~ ~~are included in the Household Cleaning segment.~~

Six Months Ended September 30, 2016
(In thousands) North American OTC
Healthcare International OTC
Healthcare
Household
Cleaning
Consolidated
Total segment revenues* $ 344,527

$ 34,608

$ 45,492

$ 424,627
Cost of sales 129,636

14,044

35,391

179,071
Gross profit 214,891

20,564

10,101

245,556
Advertising and promotion 49,851

5,368

1,008

56,227
Contribution margin $ 165,040

$ 15,196

$ 9,093

189,329
Other operating expenses**

106,057
Operating income

83,272
Other expense

41,957
Income before income taxes

41,315
Provision for income taxes

14,651
Net income

$ 26,664

* Intersegment revenues of $1.4 million were eliminated from the North American OTC Healthcare segment.

**Other operating expenses for the six months ended September 30, 2016 includes a pre-tax loss on sale of assets of $56.2 million related to ~~Pediacare~~, ~~New Skin,~~ ~~and~~ ~~Fiber Choice~~ ~~and a pre-tax gain on sale of assets of $1.2 million associated with the sale of license rights in certain geographic areas pertaining to~~ ~~Comet. The assets and corresponding contribution margin associated with the pre-tax loss on sale of assets related to~~ ~~Pediacare~~, ~~New Skin,~~ ~~and~~ ~~Fiber Choice~~ ~~are included within the North American OTC Healthcare segment, while the pre-tax gain on sale of license rights related to~~ ~~Comet~~ ~~are included in the Household Cleaning segment.~~

The tables below summarize information about our segment revenues from similar product groups.



	Three Months Ended September 30, 2018
(In thousands)	North American OTC Healthcare		International OTC Healthcare		Household Cleaning		Consolidated
Analgesics	$	28,638	$	125	$	—	$	28,763
Cough & Cold	20,492		5,734		—		26,226
Women's Health	61,614		3,270		—		64,884
Gastrointestinal	30,529		7,950		—		38,479
Eye & Ear Care	24,845		2,995		—		27,840
Dermatologicals	25,338		605		—		25,943
Oral Care	23,142		2,727		—		25,869
Other OTC	1,352		1		—		1,353
Household Cleaning	—		—		—		—
Total segment revenues	$	215,950	$	23,407	$	—	$	239,357



	Six Months Ended September 30, 2018
(In thousands)	North American OTC Healthcare		International OTC Healthcare		Household Cleaning		Consolidated
Analgesics	$	56,896	$	282	$	—	$	57,178
Cough & Cold	36,706		10,905		—		47,611
Women's Health	125,091		5,527		—		130,618
Gastrointestinal	63,328		13,940		—		77,268
Eye & Ear Care	50,317		5,614		—		55,931
Dermatologicals	50,460		1,137		—		51,597
Oral Care	45,339		5,394		—		50,733
Other OTC	2,588		2		—		2,590
Household Cleaning	—		—		19,811		19,811
Total segment revenues	$	430,725	$	42,801	$	19,811	$	493,337



	Three Months Ended September 30, 2017
(In thousands)	North American OTC Healthcare		International OTC Healthcare		Household Cleaning		Consolidated
Analgesics	$	29,348	$	40	$	—	$	29,388
Cough & Cold	21,567		4,659		—		26,226
Women's Health	61,436		1,906		—		63,342
Gastrointestinal	28,323		8,139		—		36,462
Eye & Ear Care	22,535		2,590		—		25,125
Dermatologicals	25,821		524		—		26,345
Oral Care	24,990		3,097		—		28,087
Other OTC	1,282		2		—		1,284
Household Cleaning	—		—		21,767		21,767
Total segment revenues	$	215,302	$	20,957	$	21,767	$	258,026



	Six Months Ended September 30, 2017
(In thousands)	North American OTC Healthcare		International OTC Healthcare		Household Cleaning		Consolidated
Analgesics	$	58,638	$	549	$	—	$	59,187
Cough & Cold	38,977		9,272		—		48,249
Women's Health	124,581		5,500		—		130,081
Gastrointestinal	58,753		13,872		—		72,625
Eye & Ear Care	47,806		5,645		—		53,451
Dermatologicals	49,952		1,025		—		50,977
Oral Care	49,882		5,989		—		55,871
Other OTC	2,528		3		—		2,531
Household Cleaning	—		—		41,627		41,627
Total segment revenues	$	431,117	$	41,855	$	41,627	$	514,599

Our total segment revenues by geographic area are as follows:

Three Months Ended September 30, 2016
(In thousands) North American OTC
Healthcare International OTC
Healthcare Household
Cleaning Consolidated
Analgesics $ 29,993
$ 544
$ —
$ 30,537
Cough & Cold 21,106
5,160
—
26,266
Women's Health 33,268
635
—
33,903
Gastrointestinal 16,280
6,088
—
22,368
Eye & Ear Care 22,934
2,989
—
25,923
Dermatologicals 22,952
567
—
23,519
Oral Care 24,368
2,820
—
27,188
Other OTC 1,546
1
—
1,547
Household Cleaning —
—
23,801
23,801
Total segment revenues $ 172,447
$ 18,804
$ 23,801
$ 215,052



	Three Months Ended September 30,				Six Months Ended September 30,
	2018		2017		2018		2017
United States	$	203,763	$	225,351	$	427,240	$	450,345
Rest of world	35,594		32,675		66,097		64,254
Total	$	239,357	$	258,026	$	493,337	$	514,599

Six Months Ended September 30, 2016
(In thousands) North American OTC
Healthcare International OTC
Healthcare Household
Cleaning Consolidated
Analgesics $ 58,119
$ 1,071
$ —
$ 59,190
Cough & Cold 39,073
9,552
—
48,625
Women's Health 66,155
1,571
—
67,726
Gastrointestinal 35,386
10,344
—
45,730
Eye & Ear Care 48,941
5,785
—
54,726
Dermatologicals 45,650
1,238
—
46,888
Oral Care 48,179
5,037
—
53,216
Other OTC 3,024
10
—
3,034
Household Cleaning —
—
45,492
45,492
Total segment revenues $ 344,527
$ 34,608
$ 45,492
$ 424,627

During the three months ended September 30, 2017 and 2016, approximately 87.3% and 85.8%, respectively, of our total segment revenues were from customers in the United States. During the six months ended September 30, 2017 and 2016, approximately 87.5% and 86.7%, respectively, of our total segment revenues were from customers in the United States. Other than the United States, no individual geographical area accounted for more than 10% of net sales in any of the periods presented. During the three months ended September 30, 2017, our Canada and Australia sales accounted for approximately 4.5% and 4.5%, respectively, of our total segment revenues, while during the three months ended September 30, 2016, our Canada and Australia sales accounted for approximately 5.4% and 5.9%, respectively, of our total segment revenues. During the six months ended September 30, 2017, our Canada and Australia sales accounted for approximately 4.2% and 4.3%, respectively, of our total segment revenues, while during the six months ended September 30, 2016, our Canada and Australia sales accounted for approximately 5.1% and 5.5%, respectively, of our total segment revenues.

At September 30, 2017 and March 31, 2017, approximately 96.4% of our consolidated goodwill and intangible assets were located in the United States and approximately 3.6% were located in Australia, the United Kingdom and Singapore. TheseOur consolidated goodwill and intangible assets have been allocated to the reportable segments as follows:


September 30, 2017 (In thousands)	North American OTC Healthcare		International OTC Healthcare		Household Cleaning		Consolidated
September 30, 2018									North American OTC Healthcare		International OTC Healthcare		Household Cleaning		Consolidated
(In thousands)
Goodwill	$	580,934	$	33,209	$	6,245	$	620,388	$	580,934	$	31,510	$	—	$	612,444

Intangible assets
Indefinite-lived	2,404,336		85,626		101,261		2,591,223		2,375,737		78,887		—		2,454,624
Finite-lived, net	276,512		6,343		20,062		302,917		254,876		5,570		—		260,446
Intangible assets, net	2,680,848		91,969		121,323		2,894,140		2,630,613		84,457		—		2,715,070
Total	$	3,261,782	$	125,178	$	127,568	$	3,514,528	$	3,211,547	$	115,967	$	—	$	3,327,514


March 31, 2017 (In thousands)	North American OTC Healthcare		International OTC Healthcare		Household Cleaning		Consolidated
March 31, 2018									North American OTC Healthcare		International OTC Healthcare		Household Cleaning		Consolidated
(In thousands)
Goodwill	$	576,453	$	32,554	$	6,245	$	615,252	$	580,934	$	32,919	$	6,245	$	620,098

Intangible assets
Indefinite-lived	2,404,336		83,558		101,261		2,589,155		2,375,736		84,006		30,561		2,490,303
Finite-lived, net	287,056		6,468		20,934		314,458		265,356		6,068		19,189		290,613
Intangible assets, net	2,691,392		90,026		122,195		2,903,613		2,641,092		90,074		49,750		2,780,916
Total	$	3,267,845	$	122,580	$	128,440	$	3,518,865	$	3,222,026	$	122,993	$	55,995	$	3,401,014


ITEM 2.	MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion of our financial condition and results of operations should be read together with the Condensed Consolidated Financial Statements and the related notes included in this Quarterly Report on Form 10-Q, as well as our Annual Report on Form 10-K for the fiscal year ended March 31, ~~2017~~2018. This discussion and analysis may contain forward-looking statements that involve certain risks, assumptions and uncertainties. Future results could differ materially from the discussion that follows for many reasons, including the factors described in Part I, Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended March 31, ~~2017~~2018 and in future reports filed with the U.S. Securities and Exchange Commission ~~(the "SEC"~~("SEC").

See also “Cautionary Statement Regarding Forward-Looking Statements” on page 3832 of this Quarterly Report on Form 10-Q.

Unless otherwise indicated by the context, all references in this Quarterly Report on Form 10-Q to “we,” “us,” “our,” the “Company” or “Prestige” refer to Prestige Consumer Healthcare Inc. and our subsidiaries. Similarly, reference to a year (e.g., “2019”) refers to our fiscal year ended March 31 of that year.

General

We are engaged in the development, manufacturing, marketing, sales and distribution of well-recognized, brand name over-the-counter ("OTC") healthcare and household cleaning products (prior to the sale of our Household Cleaning segment on July 2, 2018) to mass merchandisers and drug, food, dollar, convenience, and club stores and e-commerce channels in North America (the United States and Canada) and in Australia and certain other international markets. We use the strength of our brands, our established retail distribution network, a low-cost operating model and our experienced management team to our competitive advantage.

We have grown our brand portfolio both organically and through acquisitions. We develop our existing brands by investing in new product lines, brand extensions and strong advertising support. Acquisitions of OTC brands have also been an important part of our growth strategy. We have acquired strong and well-recognized brands from consumer products and pharmaceutical ~~and~~companies, as well as private equity ~~companies.~~firms. While many of these brands have long histories of brand development and investment, we believe that, at the time we acquired them, most were considered “non-core” by their previous owners. As a result, these acquired brands did not benefit from adequate management focus and marketing support during the period prior to their acquisition, which created opportunities for us to reinvigorate these brands and improve their performance post-acquisition. After adding a core brand to our portfolio, we seek to increase its sales, market share and distribution in both existing and new channels through our established retail distribution network. We pursue this growth through increased spending on advertising and promotional support, new sales and marketing strategies, improved packaging and formulations, and innovative development of brand extensions.

~~Acquisitions~~Divestiture

On July 2, 2018, we entered into an Asset Purchase Agreement with KIK International LLC, pursuant to which we sold certain assets, including certain intellectual property rights, associated with our Household Cleaning segment. The assets sold represent our Household Cleaning segment. We received proceeds of $65.9 million and used the net proceeds to repay long-term debt in July 2018. As a condition of the agreement, we entered into a Transitional Services Agreement on July 2, 2018, under which we will provide certain services to KIK International LLC related to the transition of the business for a specified period of time.

~~Acquisition of Fleet~~Tax Reform

On ~~January 26,~~December 22, 2017, the ~~Company completed~~U.S. government enacted comprehensive tax legislation commonly referred to as the ~~acquisition of C.B. Fleet Company, Inc.~~Tax Cuts and Jobs Act ("~~Fleet~~"Tax Act") ~~pursuant~~. The Tax Act represents significant U.S. federal tax reform legislation that includes a permanent reduction to the ~~Agreement and Plan~~U.S. federal corporate income tax rate. The permanent reduction to the federal corporate income tax rate resulted in a one-time gain of ~~Merger, dated as of December 22, 2016, for $823.7~~$267.0 million ~~plus cash on hand at closing and subject to certain adjustments~~ related to ~~net working capital. The purchase price was funded by available cash on hand, additional borrowings under~~the value of our ~~asset-based revolving credit facility,~~deferred tax liabilities and a ~~new $740.0~~gain of $3.2 million ~~senior secured incremental term loan. As~~related to the lower blended tax rate on our earnings, in the year ended March 31, 2018, resulting in a ~~result~~net gain of $270.2 million. Additionally, the ~~merger, we acquired multiple women's health, gastrointestinal~~Tax Act subjects certain of our cumulative foreign earnings and ~~dermatological care OTC brands, including~~ ~~Summer’s Eve~~, ~~Fleet, and~~ ~~Boudreaux's Butt Paste, as well as~~profits to U.S. income taxes through a ~~“mix and fill” manufacturing facility~~deemed repatriation, which resulted in ~~Lynchburg, Virginia.~~ a charge of $1.9 million in the year ended March 31, 2018.

The ~~financial results from the~~ ~~Fleet~~ ~~acquisition are~~changes included in the ~~Company's North American~~Tax Act are broad and ~~International OTC Healthcare segments.~~

complex. The ~~acquisition was accounted for in accordance with Business Combinations topic~~final transition impacts of the ~~Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 805, which requires~~Tax Act may differ from the above estimates, possibly materially, due to, among other things, changes in interpretations of the Tax Act, any legislative action to address questions that arise because of the ~~total cost of an acquisition be allocated~~Tax Act, any changes in accounting standards for income taxes or related interpretations in response to the ~~tangible~~Tax Act, or any updates or changes to estimates the Company has utilized to calculate the transition impacts, including impacts from changes to current year earnings estimates and ~~intangible assets acquired and liabilities assumed based upon their respective fair values at the date~~foreign exchange rates of ~~acquisition.~~foreign subsidiaries. The SEC

~~The following table provides our unaudited pro forma revenues, net income and net income per basic and diluted common share had~~has issued rules that allow for a measurement period of up to one year after the ~~results of~~ ~~Fleet's~~ ~~operations been included in our operations commencing on April 1, 2016, based on available information related to~~ ~~Fleet's~~ ~~operations. This pro forma information is not necessarily indicative either of the combined results of operations that actually would have been realized by us had the~~ ~~Fleet~~ ~~acquisition been consummated at the beginning of the period for which the pro forma information is presented, or of future results.~~

~~Divestitures and Sale of License Rights~~

~~On July 7, 2016, we completed the sale of the~~ ~~Pediacare, New Skin~~ ~~and~~ ~~Fiber Choice~~ ~~brands for $40.0 million plus the cost of inventory. During the six months ended September 30, 2016, we recorded a pre-tax loss on sale of $56.2 million.~~

Concurrent with the completion of the sale of these brands, we entered into a transitional services agreement with the buyer, whereby we agreed to provide the buyer with various services, including marketing, operations, finance and other services, from theenactment date of the ~~acquisition through January 7, 2017. We also entered into an option agreement with~~Tax Act to finalize the ~~buyer to purchase~~ ~~Dermoplast~~ ~~at a specified earnings multiple, as defined in~~recording of the ~~option agreement. The buyer paid a $1.25 million deposit for this option in September 2016 and later notified us of its election to exercise the option. The sale was completed in December 2016.~~related tax impacts.

Historically, we received royalty income from the licensing of the names of certain of our brands in geographic areas or markets in which we do not directly compete. We have had royalty agreements for our ~~Comet~~ brand for several years, which included options on behalf of the licensee to purchase license rights in certain geographic areas and markets in perpetuity. In December 2014, we amended these agreements and we sold rights to use of the ~~Comet~~ brand in certain Eastern European countries to a third-party licensee in exchange for $10.0 million as a partial early buyout of the license. The amended agreement provided that we would continue to receive royalty payments of $1.0 million per quarter for the remaining geographic areas and also granted the licensee an option to acquire the license rights in the remaining geographic areas any time after June 30, 2016. In July 2016, the licensee elected to exercise its option. In August 2016, we received $11.0 million for the purchase of the remaining license rights and, as a result, we recorded a pre-tax gain of $1.2 million and reduced our indefinite-lived trademarks by $9.0 million. Furthermore, the licensee was no longer required to make additional royalty payments to us, and as a result, our future royalty income was reduced accordingly.

Results of Operations

Three Months Ended September 30, ~~2017~~2018 compared to the Three Months Ended September 30, ~~2016~~2017

Total Segment Revenues

The following table represents total revenue by segment, including product groups, for the three months ended September 30, ~~2017~~2018 and ~~2016.~~

2017.


	Three Months Ended September 30,											Three Months Ended September 30,
							Increase (Decrease)											Increase (Decrease)
(In thousands)	2017		%	2016		%	Amount			%		2018		%	2017		%	Amount			%
North American OTC Healthcare	North American OTC Healthcare											North American OTC Healthcare
Analgesics	$	29,348	11.4	$	29,993	13.9	$	(645	)	(2.2	)	$	28,638	12.0	$	29,348	11.4	$	(710	)	(2.4	)
Cough & Cold	21,567		8.4	21,106		9.8	461			2.2		20,492		8.5	21,567		8.4	(1,075		)	(5.0	)
Women's Health	61,436		23.8	33,268		15.5	28,168			84.7		61,614		25.7	61,436		23.8	178			0.3
Gastrointestinal	28,323		11.0	16,280		7.6	12,043			74.0		30,529		12.7	28,323		11.0	2,206			7.8
Eye & Ear Care	22,535		8.7	22,934		10.7	(399		)	(1.7	)	24,845		10.4	22,535		8.7	2,310			10.3
Dermatologicals	25,821		10.0	22,952		10.7	2,869			12.5		25,338		10.6	25,821		10.0	(483		)	(1.9	)
Oral Care	24,990		9.7	24,368		11.3	622			2.6		23,142		9.7	24,990		9.7	(1,848		)	(7.4	)
Other OTC	1,282		0.5	1,546		0.7	(264		)	(17.1	)	1,352		0.6	1,282		0.5	70			5.5
Total North American OTC Healthcare	215,302		83.5	172,447		80.2	42,855			24.9		215,950		90.2	215,302		83.5	648			0.3

International OTC Healthcare	International OTC Healthcare											International OTC Healthcare
Analgesics	40		—	544		0.2	(504		)	(92.6	)	125		0.1	40		—	85			212.5
Cough & Cold	4,659		1.8	5,160		2.4	(501		)	(9.7	)	5,734		2.4	4,659		1.8	1,075			23.1
Women's Health	1,906		0.7	635		0.3	1,271			200.2		3,270		1.4	1,906		0.7	1,364			71.6
Gastrointestinal	8,139		3.2	6,088		2.8	2,051			33.7		7,950		3.2	8,139		3.2	(189		)	(2.3	)
Eye & Ear Care	2,590		1.0	2,989		1.4	(399		)	(13.3	)	2,995		1.3	2,590		1.0	405			15.6
Dermatologicals	524		0.2	567		0.3	(43		)	(7.6	)	605		0.3	524		0.2	81			15.5
Oral Care	3,097		1.2	2,820		1.3	277			9.8		2,727		1.1	3,097		1.2	(370		)	(11.9	)
Other OTC	2		—	1		—	1			100.0		1		—	2		—	(1		)	(50.0	)
Total International OTC Healthcare	20,957		8.1	18,804		8.7	2,153			11.4		23,407		9.8	20,957		8.1	2,450			11.7

Total OTC Healthcare	236,259		91.6	191,251		88.9	45,008			23.5		239,357		100.0	236,259		91.6	3,098			1.3
Household Cleaning	21,767		8.4	23,801		11.1	(2,034		)	(8.5	)	—		—	21,767		8.4	(21,767		)	(100.0	)
Total Consolidated	$	258,026	100.0	$	215,052	100.0	$	42,974		20.0		$	239,357	100.0	$	258,026	100.0	$	(18,669	)	(7.2	)

Total segment revenues for the three months ended September 30, ~~2017~~2018 were ~~$258.0~~$239.4 million, ~~an increase~~a decrease of ~~$43.0~~$18.7 million, or ~~20.0%~~7.2%, versus the three months ended September 30, ~~2016.~~2017. The ~~$43.0~~$18.7 million ~~increase~~decrease was primarily related to ~~an increase in~~ the ~~North American OTC Healthcare~~sale of our Household Cleaning segment ~~which accounted for $42.9 million, and the International OTC Healthcare segment, which accounted for $2.2 million, largely due to the acquisition of~~ ~~Fleet. The~~ ~~Fleet~~ brands, acquired in January 2017, accounted for $51.7 million of revenues in the North American OTC Healthcare and International OTC Healthcare segments not included in the comparable period in the prior year. The increase attributable to ~~Fleet~~ revenues was partially offset by a decrease of $5.9 million resulting from the divestiture of certain non-core brands. Excluding the impact of the acquisition and divestitures, total segment revenues decreased by $2.8 million.on July 2, 2018.

North American OTC Healthcare Segment

Revenues for the North American OTC Healthcare segment ~~increased $42.9~~were relatively flat, increasing $0.6 million, or ~~24.9%~~0.3%, during the three months ended September 30, ~~2017~~2018 versus the three months ended September 30, ~~2016. The $42.9 million increase was primarily attributable to the acquisition of~~ ~~Fleet,~~ ~~which accounted for $48.9 million of revenues. Excluding the revenue increase contributed by~~ ~~Fleet~~, and the reduction of $5.8 million in revenues resulting from the divestiture of certain non-core brands, revenues decreased by $0.2 million due to increased in transit shipments at the end of September 2017.

International OTC Healthcare Segment

Revenues for the International OTC Healthcare segment increased ~~$2.2~~$2.5 million, or ~~11.4%, during three months ended September 30, 2017 versus the three months ended September 30, 2016. The $2.2 million increase was primarily attributable to the acquisition of~~ ~~Fleet,~~ ~~whichaccounted for $2.8 million of revenues. Excluding the revenue increase contributed by~~ ~~Fleet, and the reduction of $0.1 million in revenues resulting from the divestiture of certain non-core brands, revenues decreased by $0.5 million.~~

~~Household Cleaning Segment~~

~~Revenues for the Household Cleaning segment decreased by $2.0 million, or 8.5%~~11.7%, during the three months ended September 30, ~~2017~~2018 versus the three months ended September 30, ~~2016. This decrease~~2017. The increase was primarily attributable to ~~decreased sales related to the~~ ~~Comet~~ ~~brand.~~timing of distributor orders.

~~Cost of Sales~~

~~The following table presents our cost of sales and cost of sales as a percentage of total segment revenues, by segment for each of the periods presented.~~

Three Months Ended September 30,
(In thousands) Increase (Decrease)
Cost of Sales 2017 % 2016 % Amount %
North American OTC Healthcare $ 87,184
40.5 $ 65,402
37.9 $ 21,782
33.3
International OTC Healthcare 9,296
44.4 7,096
37.7 2,200
31.0
Household Cleaning 17,448
80.2 18,589
78.1 (1,141 ) (6.1 )
$ 113,928
44.2 $ 91,087
42.4 $ 22,841
25.1

Cost of sales increased $22.8 million, or 25.1%, during the three months ended September 30, 2017 versus the three months ended September 30, 2016. This increase was largely due to an increase in the North American OTC Healthcare segment. As a percentage of total revenues, cost of sales increased to 44.2% during the three months ended September 30, 2017 from 42.4% during the three months ended September 30, 2016.

~~North American OTC Healthcare Segment~~

Cost of sales for the North American OTC Healthcare segment increased $21.8 million, or 33.3%, during the three months ended September 30, 2017 versus the three months ended September 30, 2016. As a percentage of the North American OTC Healthcare revenues, cost of sales increased to 40.5% during the three months ended September 30, 2017 from 37.9% during the three months ended September 30, 2016. The increase to cost of sales, and cost of sales as a percentage of North American OTC Healthcare revenues, was primarily attributable to the inclusion of ~~Fleet~~.

~~International OTC Healthcare Segment~~

Cost of sales for the International OTC Healthcare segment increased $2.2 million, or 31.0%, during the three months ended September 30, 2017 versus the three months ended September 30, 2016. As a percentage of the International OTC Healthcare revenues, cost of sales increased to 44.4% during the three months ended September 30, 2017 from 37.7% during the three months ended September 30, 2016. The increase to cost of sales, and cost of sales as a percentage of International OTC Healthcare revenues, was primarily attributable to the inclusion of ~~Fleet~~.

Household Cleaning Segment

~~Cost~~Due to the sale of ~~sales for the~~our Household Cleaning segment ~~decreased $1.1 million, or 6.1%, during~~on July 2, 2018, there were no related revenues for the three months ended September 30, 2017 versus the three months ended September 30, 2016. As a percentage of Household Cleaning revenues, cost of sales increased to 80.2% during the three months ended September 30, 2017 from 78.1% during the three months ended September 30, 2016. This increase in cost of sales as a percentage of revenues was primarily attributable to the impact of product mix within the segment.current period.

Gross Profit

The following table presents our gross profit and gross profit as a percentage of total segment revenues, by segment for each of the periods presented.



	Three Months Ended September 30,
(In thousands)							Increase (Decrease)
Gross Profit	2018		%	2017		%	Amount			%
North American OTC Healthcare	$	123,943	57.4	$	128,118	59.5	$	(4,175	)	(3.3	)
International OTC Healthcare	13,529		57.8	11,661		55.6	1,868			16.0
Household Cleaning	—		—	4,319		19.8	(4,319		)	(100.0	)
	$	137,472	57.4	$	144,098	55.8	$	(6,626	)	(4.6	)

Three Months Ended September 30,
(In thousands) Increase (Decrease)
Gross Profit 2017 % 2016 % Amount %
North American OTC Healthcare $ 128,118
59.5 $ 107,045
62.1 $ 21,073
19.7
International OTC Healthcare 11,661
55.6 11,708
62.3 (47 ) (0.4 )
Household Cleaning 4,319
19.8 5,212
21.9 (893 ) (17.1 )
$ 144,098
55.8 $ 123,965
57.6 $ 20,133
16.2

Gross profit for the three months ended September 30, ~~2017 increased $20.1~~2018 decreased $6.6 million, or ~~16.2%~~4.6%, when compared with the three months ended September 30, ~~2016.~~2017. The decrease in gross profit was primarily due to the sale of our Household Cleaning segment and decreases in gross profit within the North American OTC Healthcare segment. As a percentage of total revenues, gross profit ~~decreased~~increased to 57.4% during the three months ended September 30, 2018, compared to 55.8% during the three months ended September 30, ~~2017 from 57.6% during the three months ended September 30, 2016.~~2017. The ~~decrease~~increase in gross profit as a percentage of revenues was primarily ~~the~~a result of lower gross margins associated with ~~the acquired~~ ~~Fleet~~ ~~brands.~~our divested Household Cleaning segment.

North American OTC Healthcare Segment

Gross profit for the North American OTC Healthcare segment ~~increased $21.1~~decreased $4.2 million, or ~~19.7%~~3.3%, during the three months ended September 30, ~~2017~~2018 versus the three months ended September 30, ~~2016. The increase to gross profit was primarily attributable to the acquisition of~~ ~~Fleet~~.2017. As a percentage of North American OTC Healthcare revenues, gross profit decreased to 57.4% during the three months ended September 30, 2018 from 59.5% during the three months ended September 30, 2017, ~~from 62.1% during the three months ended September 30, 2016~~ primarily due to higher distribution costs and increased costs related to the ~~acquisition of~~ ~~Fleet, which has lower gross margins.~~BC and Goody's packaging change.

International OTC Healthcare Segment

Gross profit for the International OTC Healthcare segment ~~remained consistent at $11.7~~increased $1.9 million, or 16.0%, during the three months ended September 30, ~~2017 and~~2018 versus the three months ended September 30, ~~2016.~~2017. As a percentage of International OTC Healthcare revenues, gross profit ~~decreased~~increased to 57.8% during the three months ended September 30, 2018 from 55.6% during the three months ended September 30, 2017, ~~from 62.3% during the three months ended September 30, 2016,~~ primarily ~~attributable~~due to ~~the acquisition of~~ ~~Fleet, which has lower gross margins.~~product mix.

Household Cleaning Segment

Gross profit for the Household Cleaning segment decreased $0.9 million, or 17.1%, during the three months ended September 30, 2017 versus the three months ended September 30, 2016. As a percentage of Household Cleaning revenue, gross profit decreased to 19.8% during the three months ended September 30, 2017 from 21.9% during the three months ended September 30, 2016. The decrease in gross profit as a percentage of revenues was primarily attributable to the impact of product mix within the segment.

~~Contribution Margin~~

~~Contribution margin is our segment measure of profitability. It is defined as gross profit less advertising and promotional expenses.~~

~~The following table presents our contribution margin and contribution margin as a percentage of total segment revenues, by segment for each of the periods presented.~~

Three Months Ended September 30,
(In thousands) Increase (Decrease)
Contribution Margin 2017 % 2016 % Amount %
North American OTC Healthcare $ 93,054
43.2 $ 82,234
47.7 $ 10,820
13.2
International OTC Healthcare 8,068
38.5 8,464
45.0 (396 ) (4.7 )
Household Cleaning 3,788
17.4 4,675
19.6 (887 ) (19.0 )
$ 104,910
40.7 $ 95,373
44.3 $ 9,537
10.0

~~North American OTC Healthcare Segment~~

Contribution margin for the North American OTC Healthcare segment increased $10.8 million, or 13.2%, during the three months ended September 30, 2017 versus the three months ended September 30, 2016. The contribution margin increase was primarily the result of higher sales volume and gross profit, partially offset by higher advertising and promotion expenses, all attributable to the ~~Fleet~~ acquisition. As a percentage of North American OTC Healthcare revenues, contribution margin decreased to 43.2% during the three months ended September 30, 2017 from 47.7% during the three months ended September 30, 2016. The contribution margin decrease as a percentage of revenues was primarily due to the gross profit decrease as a percentage of revenues in the North American OTC Healthcare segment discussed above.

~~International OTC Healthcare Segment~~

Contribution margin for the International OTC Healthcare segment decreased $0.4 million, or 4.7%, during the three months ended September 30, 2017 versus the three months ended September 30, 2016. As a percentage of International OTC Healthcare revenues, contribution margin decreased to 38.5% during the three months ended September 30, 2017 from 45.0% during the three months ended September 30, 2016. The contribution margin decrease as a percentage of revenues was primarily due to the gross profit decrease as a percentage of revenues in the International OTC Healthcare segment discussed above.

~~Household Cleaning Segment~~

Contribution margin for the Household Cleaning segment decreased $0.9 million, or 19.0%, during the three months ended September 30, 2017 versus the three months ended September 30, 2016. As a percentage of Household Cleaning revenues, contribution margin decreased to 17.4% during the three months ended September 30, 2017 from 19.6% during the three months ended September 30, 2016. The contribution margin decrease as a percentage of revenues was primarily due to the gross profit decrease as a percentage of revenues in the Household Cleaning segment discussed above.

~~General and Administrative~~

General and administrative expenses were $21.6 million for the three months ended September 30, 2017 versus $18.8 million for the three months ended September 30, 2016. The increase in general and administrative expenses was primarily due to an increase in compensation costs associated with the acquisition of ~~Fleet~~.

~~Depreciation and Amortization~~

Depreciation and amortization expense was $7.2 million and $6.0 million for the three months ended September 30, 2017 and 2016, respectively. The increase in depreciation and amortization expense was primarily due to higher amortization expense during the current year period as a result of the ~~Fleet~~ ~~acquisition.~~

~~(Gain) Loss on Sale of Assets~~

~~We recorded a net gain on sales of assets of $0.5 million for the three months ended September 30, 2016, which relates to two separate transactions. On July 7, 2016, the Company completed the sale of~~ ~~Pedicare, New Skin~~ ~~and~~ ~~Fiber Choice~~, which were non-core OTC brands and were reported under the North American OTC Healthcare segment in the Cough & Cold, Dermatologicals and Gastrointestinal product groups, respectively. As a result, we recorded a preliminary pre-tax loss on sale of assets of $55.5 million in the first quarter of fiscal 2017 and increased the loss by $0.7 million during the three months ended September 30, 2016. The increase in loss recorded in the three months ended September 30, 2016 was more than offset by a pre-tax gain of $1.2 million relatedDue to the sale of ~~a royalty license for~~ our ~~Comet brand in certain geographic areas.~~

~~Interest Expense~~

Net interest expense was $26.8 million during the three months ended September 30, 2017 versus $20.8 million during the three months ended September 30, 2016. The increase in net interest expense was primarily attributable to higher borrowings due to the ~~Fleet~~ acquisition. The average indebtedness increased to $2.2 billion during the three months ended September 30, 2017 from $1.5 billion during the three months ended September 30, 2016. The average cost of borrowing decreased to 5.0% for the three months ended September 30, 2017 from 5.5% for the three months ended September 30, 2016.

~~Income Taxes~~

The provision for income taxes during the three months ended September 30, 2017 was $18.6 million versus $18.0 million during the three months ended September 30, 2016. The effective tax rate during the three months ended September 30, 2017 was 37.7% versus 35.9% during the three months ended September 30, 2016. The increase in the effective tax rate for the three months ended September 30, 2017 was primarily due to state tax rate increases. The estimated effective tax rate for the remaining six months of the fiscal year ending March 31, 2018 is expected to be approximately 36.5%, excluding discrete items that may occur.

~~Results of Operations~~

~~Six Months Ended September 30, 2017 compared to the Six Months Ended September 30, 2016~~

~~Total Segment Revenues~~

~~The following table represents total revenue by segment, including product groups, for the six months ended September 30, 2017 and 2016.~~

Six Months Ended September 30,
Increase (Decrease)
(In thousands) 2017 % 2016 % Amount %
North American OTC Healthcare
Analgesics $ 58,638
11.4 $ 58,119
13.7 $ 519
0.9
Cough & Cold 38,977
7.5 39,073
9.2 (96 ) (0.2 )
Women's Health 124,581
24.2 66,155
15.6 58,426
88.3
Gastrointestinal 58,753
11.4 35,386
8.3 23,367
66.0
Eye & Ear Care 47,806
9.3 48,941
11.5 (1,135 ) (2.3 )
Dermatologicals 49,952
9.7 45,650
10.8 4,302
9.4
Oral Care 49,882
9.7 48,179
11.3 1,703
3.5
Other OTC 2,528
0.5 3,024
0.7 (496 ) (16.4 )
Total North American OTC Healthcare 431,117
83.7 344,527
81.1 86,590
25.1

International OTC Healthcare
Analgesics 549
0.1 1,071
0.3 (522 ) (48.7 )
Cough & Cold 9,272
1.8 9,552
2.2 (280 ) (2.9 )
Women's Health 5,500
1.1 1,571
0.4 3,929
250.1
Gastrointestinal 13,872
2.7 10,344
2.4 3,528
34.1
Eye & Ear Care 5,645
1.1 5,785
1.4 (140 ) (2.4 )
Dermatologicals 1,025
0.2 1,238
0.3 (213 ) (17.2 )
Oral Care 5,989
1.2 5,037
1.2 952
18.9
Other OTC 3
— 10
— (7 ) (70.0 )
Total International OTC Healthcare 41,855
8.2 34,608
8.2 7,247
20.9

Total OTC Healthcare 472,972
91.9 379,135
89.3 93,837
24.8
Household Cleaning 41,627
8.1 45,492
10.7 (3,865 ) (8.5 )
Total Consolidated $ 514,599
100.0 $ 424,627
100.0 $ 89,972
21.2

Total segment revenues for the six months ended September 30, 2017 were $514.6 million, an increase of $90.0 million, or 21.2%, versus the six months ended September 30, 2016. The $90.0 million increase was primarily related to an increase in the North American OTC Healthcare segment, which accounted for $86.6 million, and the International OTC Healthcare segment, which accounted for $7.2 million, largely due to the acquisition of ~~Fleet. The~~ ~~Fleet~~ brands, acquired in January 2017, accounted for $106.5 million of revenues in the North American OTC Healthcare and International OTC Healthcare segments not included in the comparable period in the prior year. The increase attributable to ~~Fleet~~ revenues was partially offset by a decrease of $17.0 million resulting from the divestiture of certain non-core brands. Excluding the impact of acquisition and divestitures, total segment revenues increased by $0.5 million.

~~North American OTC Healthcare Segment~~

Revenues for the North American OTC Healthcare segment increased $86.6 million, or 25.1%, during the six months ended September 30, 2017 versus the six months ended September 30, 2016. The $86.6 million increase was primarily attributable to the acquisition of ~~Fleet,~~ ~~which accounted for $99.5 million of revenues. Excluding the revenue increase contributed by~~ ~~Fleet, and the reduction of $16.0 million in revenues resulting from the divestiture of certain non-core brands, revenues increased by $3.1 million.~~

~~International OTC Healthcare Segment~~

Revenues for the International OTC Healthcare segment increased $7.2 million, or 20.9%, during six months ended September 30, 2017 versus the six months ended September 30, 2016. The $7.2 million increase was primarily attributable to the acquisition of ~~Fleet,~~ ~~whichaccounted for $7.0 million of revenues. Excluding the revenue increase contributed by~~ ~~Fleet, and the reduction of $0.2 million in revenues resulting from the divestiture of certain non-core brands, revenues increased by $0.4 million.~~

~~Household Cleaning Segment~~

~~Revenues for the~~ Household Cleaning segment ~~decreased by $3.9 million, or 8.5%, during the six months ended September 30, 2017 versus the six months ended September 30, 2016. This decrease~~on July 2, 2018, there was ~~primarily attributable to decreased royalties as a result of the sale of royalty rights~~no related ~~to the~~ ~~Comet~~ ~~brand in certain geographic regions, which was completed in July 2016.~~

~~Cost of Sales~~

~~The following table presents our cost of sales and cost of sales as a percentage of total segment revenues, by segment for each of the periods presented.~~

Six Months Ended September 30,
(In thousands) Increase (Decrease)
Cost of Sales 2017 % 2016 % Amount %
North American OTC Healthcare $ 173,685
40.3 $ 129,636
37.6 $ 44,049
34.0
International OTC Healthcare 19,246
46.0 14,044
40.6 5,202
37.0
Household Cleaning 34,094
81.9 35,391
77.8 (1,297 ) (3.7 )
$ 227,025
44.1 $ 179,071
42.2 $ 47,954
26.8

Cost of sales increased $48.0 million, or 26.8%, during the six months ended September 30, 2017 versus the six months ended September 30, 2016. This increase was largely due to an increase in the North American OTC Healthcare segment. As a percentage of total revenues, cost of sales increased to 44.1% during the six months ended September 30, 2017 from 42.2% during the six months ended September 30, 2016.

~~North American OTC Healthcare Segment~~

Cost of sales for the North American OTC Healthcare segment increased $44.0 million, or 34.0%, during the six months ended September 30, 2017 versus the six months ended September 30, 2016. As a percentage of the North American OTC Healthcare revenues, cost of sales increased to 40.3% during the six months ended September 30, 2017 from 37.6% during the six months ended September 30, 2016. The increase to cost of sales, and cost of sales as a percentage of North American OTC Healthcare revenues, was primarily attributable to the inclusion of ~~Fleet~~.

~~International OTC Healthcare Segment~~

Cost of sales for the International OTC Healthcare segment increased $5.2 million, or 37.0%, during the six months ended September 30, 2017 versus the six months ended September 30, 2016. As a percentage of the International OTC Healthcare revenues, cost of sales increased to 46.0% during the six months ended September 30, 2017 from 40.6% during the six months ended September 30, 2016. The increase to cost of sales, and cost of sales as a percentage of International OTC Healthcare revenues, was primarily attributable to the inclusion of ~~Fleet~~.

~~Household Cleaning Segment~~

Cost of sales for the Household Cleaning segment decreased $1.3 million, or 3.7%, during the six months ended September 30, 2017 versus the six months ended September 30, 2016. As a percentage of Household Cleaning revenues, cost of sales increased to 81.9% during the six months ended September 30, 2017 from 77.8% during the six months ended September 30, 2016. This increase in cost of sales as a percentage of revenues was primarily attributable to reduced royalties as a result of the sale of royalty rights related to the ~~Comet~~ ~~brand in certain geographic regions, which was completed in July 2016.~~

~~Gross Profit~~

~~The following table presents our~~ gross ~~profit and gross profit as a percentage of total segment revenues, by segment for each of the periods presented.~~

Six Months Ended September 30,
(In thousands) Increase (Decrease)
Gross Profit 2017 % 2016 % Amount %
North American OTC Healthcare $ 257,432
59.7 $ 214,891
62.4 $ 42,541
19.8
International OTC Healthcare 22,609
54.0 20,564
59.4 2,045
9.9
Household Cleaning 7,533
18.1 10,101
22.2 (2,568 ) (25.4 )
$ 287,574
55.9 $ 245,556
57.8 $ 42,018
17.1

~~Gross~~ profit for the six months ended September 30, 2017 increased $42.0 million, or 17.1%, when compared with the six months ended September 30, 2016. As a percentage of total revenues, gross profit decreased to 55.9% during the six months ended September 30, 2017 from 57.8% during the six months ended September 30, 2016. The decrease in gross profit as a percentage of revenues was primarily the result of lower gross margins associated with the acquired ~~Fleet~~ ~~brands.~~

~~North American OTC Healthcare Segment~~

Gross profit for the North American OTC Healthcare segment increased $42.5 million, or 19.8%, during the six months ended September 30, 2017 versus the six months ended September 30, 2016. The increase to gross profit was primarily attributable to the acquisition of ~~Fleet~~. As a percentage of North American OTC Healthcare revenues, gross profit decreased to 59.7% during the six months ended September 30, 2017 from 62.4% during the six months ended September 30, 2016, primarily due to the acquisition of ~~Fleet, which has lower gross margins.~~

~~International OTC Healthcare Segment~~

Gross profit for the International OTC Healthcare segment increased $2.0 million, or 9.9%, during the six months ended September 30, 2017 versus the six months ended September 30, 2016. The increase to gross profit was primarily attributable to the acquisition of ~~Fleet~~. As a percentage of International OTC Healthcare revenues, gross profit decreased to 54.0% during the six months ended September 30, 2017 from 59.4% during the six months ended September 30, 2016, primarily due to the acquisition of ~~Fleet, which has lower gross margins.~~

~~Household Cleaning Segment~~

Gross profit for the Household Cleaning segment decreased $2.6 million, or 25.4%, during the six months ended September 30, 2017 versus the six months ended September 30, 2016. As a percentage of Household Cleaning revenue, gross profit decreased to 18.1% during the six months ended September 30, 2017 from 22.2% during the six months ended September 30, 2016. The decrease in gross profit as a percentage of revenues was primarily attributable to the reduced royalties as a result of the sale of royalty rights related to the ~~Comet~~ ~~brand in certain geographic regions.~~current period.

Contribution Margin

Contribution margin is our segment measure of profitability. It is defined as gross profit less advertising and promotional expenses.

The following table presents our contribution margin and contribution margin as a percentage of total segment revenues, by segment for each of the periods presented.

Six Months Ended September 30,
(In thousands) Increase (Decrease)
Contribution Margin 2017 % 2016 % Amount %
North American OTC Healthcare $ 189,560
44.0 $ 165,040
47.9 $ 24,520
14.9
International OTC Healthcare 15,326
36.6 15,196
43.9 130
0.9
Household Cleaning 6,556
15.7 9,093
20.0 (2,537 ) (27.9 )
$ 211,442
41.1 $ 189,329
44.6 $ 22,113
11.7



	Three Months Ended September 30,
(In thousands)							Increase (Decrease)
Contribution Margin	2018		%	2017		%	Amount			%
North American OTC Healthcare	$	90,618	42.0	$	93,054	43.2	$	(2,436	)	(2.6	)
International OTC Healthcare	9,812		41.9	8,068		38.5	1,744			21.6
Household Cleaning	—		—	3,788		17.4	(3,788		)	(100.0	)
	$	100,430	42.0	$	104,910	40.7	$	(4,480	)	(4.3	)

North American OTC Healthcare Segment

Contribution margin for the North American OTC Healthcare segment ~~increased $24.5~~decreased $2.4 million, or ~~14.9%~~2.6%, during the ~~six~~three months ended September 30, ~~2017~~2018 versus the ~~six~~three months ended September 30, ~~2016. The contribution margin increase was primarily the result of higher sales volume and gross profit, partially offset by higher advertising and promotion expenses, all attributable to the~~ ~~Fleet~~ ~~acquisition.~~2017. As a percentage of North American OTC Healthcare revenues, contribution margin decreased to ~~44.0%~~42.0% during the ~~six~~three months ended September 30, ~~2017~~2018 from ~~47.9%~~43.2% during the ~~six~~

three months ended September 30, ~~2016.~~2017. The contribution margin decrease as a percentage of revenues was primarily due to the gross profit decrease as a percentage of revenues in the North American OTC Healthcare segment discussed above.

International OTC Healthcare Segment

Contribution margin for the International OTC Healthcare segment increased ~~$0.1~~$1.7 million, or ~~0.9%~~21.6%, during the ~~six~~three months ended September 30, ~~2017~~2018 versus the ~~six~~three months ended September 30, ~~2016.~~2017. As a percentage of International OTC Healthcare revenues, contribution margin increased to 41.9% during the three months ended September 30, 2018 from 38.5% during the three months ended September 30, 2017. The contribution margin increase as a percentage of revenues was primarily due to the gross profit increase as a percentage of revenues in the International OTC Healthcare segment discussed above.

Household Cleaning Segment

Due to the sale of our Household Cleaning segment on July 2, 2018, there was no related contribution margin for the current period.

General and Administrative

General and administrative expenses were $24.0 million for the three months ended September 30, 2018 versus $22.0 million for the three months ended September 30, 2017. The increase in general and administrative expenses was primarily due to costs associated with the sale of the Household Cleaning segment.

Depreciation and Amortization

Depreciation and amortization expenses were $6.8 million for the three months ended September 30, 2018 versus $7.2 million for the three months ended September 30, 2017. The decrease in depreciation and amortization expenses was primarily due to the sale of our Household Cleaning segment.

Interest Expense

Interest expense was $27.1 million during the three months ended September 30, 2018, versus $26.9 million during the three months ended September 30, 2017. The average indebtedness decreased to ~~36.6%~~$2.0 billion during the three months ended September 30, 2018 from $2.2 billion during the three months ended September 30, 2017. The average cost of borrowing increased to 5.5% for the three months ended September 30, 2018 from 5.0% from the three months ended September 30, 2017.

Income Taxes

The provision for income taxes during the three months ended September 30, 2018 was $12.7 million versus $18.6 million during the three months ended September 30, 2017. The effective tax rate during the three months ended September 30, 2018 was 29.1% versus 37.7% during the three months ended September 30, 2017. The decrease in the effective tax rate for the three months ended September 30, 2018 was primarily due to a reduction in the corporate tax rate as a result of the Tax Act.

Results of Operations Six Months Ended September 30, 2018 compared to the Six Months Ended September 30, 2017

Total Segment Revenues

The following table represents total revenue by segment, including product groups, for the six months ended September 30, 2018 and 2017.



	Six Months Ended September 30,
							Increase (Decrease)
(In thousands)	2018		%	2017		%	Amount			%
North American OTC Healthcare
Analgesics	$	56,896	11.5	$	58,638	11.4	$	(1,742	)	(3.0	)
Cough & Cold	36,706		7.4	38,977		7.5	(2,271		)	(5.8	)
Women's Health	125,091		25.4	124,581		24.2	510			0.4
Gastrointestinal	63,328		12.8	58,753		11.4	4,575			7.8
Eye & Ear Care	50,317		10.2	47,806		9.3	2,511			5.3
Dermatologicals	50,460		10.2	49,952		9.7	508			1.0
Oral Care	45,339		9.3	49,882		9.7	(4,543		)	(9.1	)
Other OTC	2,588		0.5	2,528		0.5	60			2.4
Total North American OTC Healthcare	430,725		87.3	431,117		83.7	(392		)	(0.1	)

International OTC Healthcare
Analgesics	282		0.1	549		0.1	(267		)	(48.6	)
Cough & Cold	10,905		2.2	9,272		1.8	1,633			17.6
Women's Health	5,527		1.1	5,500		1.1	27			0.5
Gastrointestinal	13,940		2.8	13,872		2.7	68			0.5
Eye & Ear Care	5,614		1.1	5,645		1.1	(31		)	(0.5	)
Dermatologicals	1,137		0.3	1,025		0.2	112			10.9
Oral Care	5,394		1.1	5,989		1.2	(595		)	(9.9	)
Other OTC	2		—	3		—	(1		)	(33.3	)
Total International OTC Healthcare	42,801		8.7	41,855		8.2	946			2.3

Total OTC Healthcare	473,526		96.0	472,972		91.9	554			0.1
Household Cleaning	19,811		4.0	41,627		8.1	(21,816		)	(52.4	)
Total Consolidated	$	493,337	100.0	$	514,599	100.0	$	(21,262	)	(4.1	)

Total segment revenues for the six months ended September 30, 2018 were $493.3 million, a decrease of $21.3 million, or 4.1%, versus the six months ended September 30, 2017. The $21.3 million decrease was primarily related to the sale of our Household Cleaning segment on July 2, 2018.

North American OTC Healthcare Segment

Revenues for the North American OTC Healthcare segment were relatively flat, decreasing $0.4 million, or 0.1%, during the six months ended September 30, 2018 versus the six months ended September 30, 2017.

International OTC Healthcare Segment

Revenues for the International OTC Healthcare segment were relatively flat, increasing $0.9 million, or 2.3%, during the six months ended September 30, 2018 versus the six months ended September 30, 2017.

Household Cleaning Segment

Revenues for the Household Cleaning segment decreased $21.8 million, or 52.4%, during the six months ended September 30, 2018 versus the six months ended September 30, 2017. The decrease was attributable to the sale of our Household Cleaning segment on July 2, 2018.

Gross Profit

The following table presents our gross profit and gross profit as a percentage of total segment revenues, by segment for each of the periods presented.



	Six Months Ended September 30,
(In thousands)							Increase (Decrease)
Gross Profit	2018		%	2017		%	Amount			%
North American OTC Healthcare	$	249,565	57.9	$	257,432	59.7	$	(7,867	)	(3.1	)
International OTC Healthcare	25,307		59.1	22,609		54.0	2,698			11.9
Household Cleaning	3,223		16.3	7,533		18.1	(4,310		)	(57.2	)
	$	278,095	56.4	$	287,574	55.9	$	(9,479	)	(3.3	)

Gross profit for the six months ended September 30, 2018 decreased $9.5 million, or 3.3%, when compared with the six months ended September 30, 2017. The decrease in gross profit was primarily due to decreases in gross profit within the North American OTC Healthcare segment and the sale of our Household Cleaning segment. As a percentage of total revenues, gross profit increased to 56.4% during the six months ended September 30, 2018, from 55.9% during the six months ended September 30, 2017. The increase in gross profit as a percentage of revenues was primarily a result of lower gross margins associated with our divested Household Cleaning segment.

North American OTC Healthcare Segment

Gross profit for the North American OTC Healthcare segment decreased $7.9 million, or 3.1%, during the six months ended September 30, 2018 versus the six months ended September 30, 2017. As a percentage of North American OTC Healthcare revenues, gross profit decreased to 57.9% during the six months ended September 30, 2018 from 59.7% during the six months ended September 30, 2017, ~~from 43.9%~~primarily due to higher distribution costs and increased costs related to the BC and Goody's packaging change.

International OTC Healthcare Segment

Gross profit for the International OTC Healthcare segment increased $2.7 million, or 11.9%, during the six months ended September 30, ~~2016.~~2018 versus the six months ended September 30, 2017. As a percentage of International OTC Healthcare revenues, gross profit increased to 59.1% during the six months ended September 30, 2018 from 54.0% during the six months ended September 30, 2017, primarily due to product mix.

Household Cleaning Segment

Gross profit for the Household Cleaning segment decreased $4.3 million, or 57.2%, during the six months ended September 30, 2018 versus the six months ended September 30, 2017. The decrease was attributable to the sale of our Household Cleaning segment on July 2, 2018.

Contribution Margin

Contribution margin is our segment measure of profitability. It is defined as gross profit less advertising and promotional expenses.

The following table presents our contribution margin and contribution margin as a percentage of total segment revenues, by segment for each of the periods presented.



	Six Months Ended September 30,
(In thousands)							Increase (Decrease)
Contribution Margin	2018		%	2017		%	Amount			%
North American OTC Healthcare	$	182,982	42.5	$	189,560	44.0	$	(6,578	)	(3.5	)
International OTC Healthcare	18,167		42.4	15,326		36.6	2,841			18.5
Household Cleaning	2,793		14.1	6,556		15.7	(3,763		)	(57.4	)
	$	203,942	41.3	$	211,442	41.1	$	(7,500	)	(3.5	)

North American OTC Healthcare Segment

Contribution margin for the North American OTC Healthcare segment decreased $6.6 million, or 3.5%, during the six months ended September 30, 2018 versus the six months ended September 30, 2017. As a percentage of North American OTC Healthcare revenues, contribution margin decreased to 42.5% during the six months ended September 30, 2018 from 44.0% during the six months ended September 30, 2017. The contribution margin decrease as a percentage of revenues was primarily due to the gross profit decrease as a percentage of revenues in the North American OTC Healthcare segment discussed above.

International OTC Healthcare Segment

Contribution margin for the International OTC Healthcare segment increased $2.8 million, or 18.5%, during the six months ended September 30, 2018 versus the six months ended September 30, 2017. As a percentage of International OTC Healthcare revenues, contribution margin increased to 42.4% during the six months ended September 30, 2018 from 36.6% during the six months ended September 30, 2017. The contribution margin increase as a percentage of revenues was primarily due to the gross profit increase as a percentage of revenues in the International OTC Healthcare segment discussed above.

Household Cleaning Segment

Contribution margin for the Household Cleaning segment decreased ~~$2.5~~$3.8 million, or ~~27.9%~~57.4%, during the six months ended September 30, ~~2017~~2018 versus the six months ended September 30, 2016. As a percentage of Household Cleaning revenues, contribution margin decreased to 15.7% during the six months ended September 30, 2017 from 20.0% during the six months ended September 30, 2016.2017. The ~~contribution margin~~ decrease ~~as a percentage of revenues~~ was ~~primarily due~~attributable to the ~~gross profit decrease as a percentage~~sale of ~~revenues in the~~our Household Cleaning segment ~~discussed above.~~on July 2, 2018.

General and Administrative

General and administrative expenses were ~~$41.9~~$48.0 million for the six months ended September 30, ~~2017~~2018 versus ~~$38.3~~$42.4 million for the six months ended September 30, ~~2016.~~2017. The increase in general and administrative expenses was primarily due to ~~an increase in compensation~~ costs associated with the ~~acquisition~~sale of ~~Fleet~~.the Household Cleaning segment, as well as increased information technology and legal costs.

Depreciation and Amortization

Depreciation and amortization ~~expense was $14.4 million and $12.8~~expenses were $13.8 million for the six months ended September 30, ~~2017~~2018 and ~~2016, respectively. The increase in depreciation and amortization expense was primarily due to higher amortization expense during the current year period as a result of the~~ ~~Fleet~~ ~~acquisition.~~

~~(Gain) Loss on Sale of Assets~~

~~We recorded a net loss on sales of assets of $55.0~~$14.4 million for the six months ended September 30, ~~2016, which relates~~2017. The decrease in depreciation and amortization expenses was primarily due to ~~two separate transactions. On July 7, 2016, the Company completed~~ the sale of ~~Pediacare~~, ~~New Skin~~ ~~and~~ ~~Fiber Choice,~~ which were non-core OTC brands and were reported under the North American OTC Healthcare segment in the Cough & Cold, Dermatologicals and Gastrointestinal product groups, respectively. As a result, we recorded a pre-tax loss on sale of these assets of $56.2 million for the six months ended September 30, 2016. This loss was slightly reduced by a pre-tax gain of $1.2 million on the sale of a royalty license for our ~~Comet~~ ~~brand in certain geographic areas.~~Household Cleaning segment.

Interest Expense

~~Net interest~~Interest expense was ~~$53.2~~$53.1 million during the six months ended September 30, ~~2017~~2018, versus ~~$42.0~~$53.3 million during the six months ended September 30, ~~2016. The increase in net interest expense was primarily attributable to higher borrowings due to the~~ ~~Fleet~~ ~~acquisition.~~2017. The average indebtedness ~~increased~~decreased to $2.0 billion during the six months ended September 30, 2018 from $2.2 billion during the six months ended September 30, ~~2017 from $1.6 billion during the six months ended September 30, 2016.~~2017. The average cost of borrowing ~~decreased~~increased to ~~4.9%~~5.3% for the six months ended September 30, ~~2017~~2018 from ~~5.4%~~4.9% from the six months ended September 30, ~~2016.~~2017.

Income Taxes

The provision for income taxes during the six months ended September 30, ~~2017~~2018 was ~~$37.5~~$24.7 million versus ~~$14.7~~$37.5 million during the six months ended September 30, ~~2016.~~2017. The effective tax rate during the six months ended September 30, ~~2017~~2018 was ~~36.8%~~27.4% versus ~~35.5%~~36.8% during the six months ended September 30, ~~2016.~~2017. The ~~increase~~decrease in the effective tax rate for the six months ended September 30, ~~2017~~2018 was primarily due to ~~state~~a reduction in the corporate tax rate ~~increases. The estimated effective tax rate for the remaining six months~~as a result of the ~~fiscal year ending March 31, 2018 is expected to be approximately 36.5%, excluding discrete items that may occur.~~Tax Act.

Liquidity and Capital Resources

Liquidity

Our primary source of cash comes from our cash flow from operations. In the past, we have supplemented this source of cash with various debt facilities, primarily in connection with acquisitions. We have financed our operations, and expect to continue to finance our operations over the next twelve months, with a combination of funds generated from operations and borrowings. Our principal uses of cash are for operating expenses, debt service, share repurchase and acquisitions. Based on our current levels of operations and anticipated growth, excluding acquisitions, we believe that our cash generated from operations and our existing credit facilities will be adequate to finance our working capital and capital expenditures through the next twelve ~~months, although no assurance can be given in this regard.~~months.

As of September 30, 2018, we had cash and cash equivalents of $36.9 million, an increase of $4.4 million from March 31, 2018. The following table summarizes ~~our cash provided by (used in) operating activities, investing activities and financing activities as reported in our condensed consolidated statements of cash flows in~~ the ~~accompanying Condensed Consolidated Financial Statements.~~change:


	Six Months Ended September 30,						Six Months Ended September 30,
(In thousands)	2017			2016			2018			2017			$ Change
Cash provided by (used in):
Operating Activities	$	108,540		$	101,082		$	95,107		$	108,540		$	(13,433	)
Investing Activities	(3,815		)	51,024			60,838			(3,815		)	64,653
Financing Activities	(104,609		)	(148,481		)	(151,231		)	(104,609		)	(46,622		)
Effects of exchange rate changes on cash and cash equivalents							(352		)	1,006			(1,358		)
Net change in cash and cash equivalents							$	4,362		$	1,122		$	3,240

Operating Activities

Net cash provided by operating activities was $95.1 million for the six months ended September 30, 2018 compared to $108.5 million for the six months ended September 30, ~~2017 compared~~2017. The $13.4 million decrease was primarily due to ~~$101.1~~the sale of our Household Cleaning segment.

Investing Activities

Net cash provided by investing activities was $60.8 million for the six months ended September 30, ~~2016. The $7.5 million increase was primarily due~~2018 compared to ~~an increase in net income before non-cash items, partly offset by increased working capital.~~

~~Investing Activities~~

~~Net~~a use of cash ~~used in investing activities was~~of $3.8 million for the six months ended September 30, ~~2017 compared to net cash provided by investing activities of $51.0 million for the six months ended September 30, 2016.~~2017. The change was ~~primarily~~ due to proceeds from the divestiture of ~~$52.4 million received~~our Household Cleaning segment in the ~~prior period for the sale of intangible assets.~~current period.

Financing Activities

Net cash used in financing activities was $151.2 million for the six months ended September 30, 2018 compared to $104.6 million for the six months ended September 30, ~~2017 compared to $148.5 million for the six months ended September 30, 2016.~~2017. The change was primarily due to ~~higher debt repayments~~the repurchase of shares of our common stock in conjunction with our share repurchase program in the ~~prior year.~~current period.

Capital Resources

~~2012 Term Loan and 2012 ABL Revolver:~~

On January 31, 2012, Prestige Brands, Inc. (the "Borrower") entered into a new senior secured credit facility, which originally consisted of (i) a $660.0 million term loan facility (the “2012 Term Loan”) with a 7-year maturity and (ii) a $50.0 million asset-based revolving credit facility (the “2012 ABL Revolver”) with a 5-year maturity. The 2012 Term Loan was issued with an original issue discount of 1.5% of the principal amount thereof, resulting in net proceeds to the Borrower of $650.1 million. In connection with these loan facilities, we incurred $20.6 million of costs, which were capitalized as deferred financing costs and are being amortized over the terms of the facilities. The 2012 Term Loan is unconditionally guaranteed by Prestige Brands Holdings, Inc. and certain of its domestic 100% owned subsidiaries, other than the Borrower. 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 or to make payments to the Borrower or the Company.

On February 21, 2013, we entered into Amendment No. 1 ("Term Loan Amendment No. 1") to the 2012 Term Loan. Term Loan Amendment No. 1 provided for the refinancing of all of the Borrower's existing Term B Loans with new Term B-1 Loans (the "Term B-1 Loans"). The interest rate on the Term B-1 Loans under Term Loan Amendment No. 1 was based, at our option, on a LIBOR rate plus a margin of 2.75% per annum, with a LIBOR floor of 1.00%, or an alternate base rate, with a floor of 2.00%, plus a margin. In addition, Term Loan Amendment No. 1 provided the Borrower with certain additional capacity to prepay subordinated debt, the then-outstanding 8.125% senior unsecured notes due 2020 and certain other unsecured indebtedness permitted to be incurred under the credit agreement governing the 2012 Term Loan and 2012 ABL Revolver.

On September 3, 2014, we entered into Amendment No. 2 ("Term Loan Amendment No. 2") to the 2012 Term Loan. Term Loan Amendment No. 2 provided for (i) the creation of a new class of Term B-2 Loans under the 2012 Term Loan (the "Term B-2 Loans") in an aggregate principal amount of $720.0 million, (ii) increased flexibility under the credit agreement governing the 2012 Term Loan and 2012 ABL Revolver, including additional investment, restricted payment and debt incurrence flexibility and financial maintenance covenant relief, and (iii) an interest rate on (x) the Term B-1 Loans that was based, at our option, on a LIBOR rate plus a margin of 3.125% per annum, with a LIBOR floor of 1.00%, or an alternate base rate, with a floor of 2.00%, plus a margin, and (y) the Term B-2 Loans that was based, at our option, on a LIBOR rate plus a margin of 3.50% per annum, with a LIBOR floor of 1.00%, or an alternate base rate, with a floor of 2.00%, plus a margin (with a margin step-down to 3.25% per annum, based upon achievement of a specified secured net leverage ratio).

Also on September 3, 2014, we entered into Amendment No. 3 ("ABL Amendment No. 3") to the 2012 ABL Revolver. ABL Amendment No. 3 provided for (i) a $40.0 million increase in revolving commitments under the 2012 ABL Revolver and (ii) increased flexibility under the credit agreement governing the 2012 Term Loan and 2012 ABL Revolver, including additional investment, restricted payment and debt incurrence flexibility. Borrowings under the 2012 ABL Revolver, as amended, bear interest at a rate per annum equal to an applicable margin, plus, at our option, either (i) a base rate determined by reference to the highest of (a) the Federal Funds rate plus 0.50%, (b) the prime rate of Citibank, N.A., and (c) the LIBOR rate determined by reference to the cost of funds for U.S. dollar deposits for an interest period of one month, adjusted for certain additional costs, plus 1.00% or (ii) a LIBOR rate determined by reference to the costs of funds for U.S. dollar deposits for the interest period relevant to such borrowing, adjusted for certain additional costs. The applicable margin for borrowings under the 2012 ABL Revolver may be increased to 2.00% or 2.25% for LIBOR borrowings and 1.00% or 1.25% for base-rate borrowings, depending on average excess availability under the 2012 ABL Revolver during the prior fiscal quarter. In addition to paying interest on outstanding principal under the 2012 ABL Revolver, we are required to pay a commitment fee to the lenders under the 2012 ABL Revolver in respect of the unutilized commitments thereunder. The initial commitment fee rate is 0.50% per annum. The commitment fee rate will be reduced to 0.375% per annum at any time when the average daily unused commitments for the prior quarter is less than a percentage of total commitments by an amount set forth in the credit agreement covering the 2012 ABL Revolver. We may voluntarily repay outstanding loans under the 2012 ABL Revolver at any time without a premium or penalty.

On May 8, 2015, we entered into Amendment No. 3 ("Term Loan Amendment No. 3") to the 2012 Term Loan. Term Loan Amendment No. 3 provided for (i) the creation of a new class of Term B-3 Loans under the 2012 Term Loan (the "Term B-3 Loans") in an aggregate principal amount of $852.5 million, which combined the outstanding balances of the Term B-1 Loans of $207.5 million and the Term B-2 Loans of $645.0 million, and (ii) increased flexibility under the credit agreement governing the 2012 Term Loan and 2012 ABL Revolver, including additional investment, restricted payment, and debt incurrence flexibility and financial maintenance covenant relief.

On June 9, 2015, we entered into Amendment No. 4 (“ABL Amendment No. 4”) to the 2012 ABL Revolver. ABL Amendment No. 4 provided for (i) a $35.0 million increase in the accordion feature under the 2012 ABL Revolver, (ii) increased flexibility under the credit agreement governing the 2012 Term Loan and 2012 ABL Revolver, including additional investment, restricted payment, and debt incurrence flexibility and financial maintenance covenant relief, and (iii) extended the maturity date of the 2012 ABL Revolver to June 9, 2020.

~~In connection with acquisition of DenTek Holdings, Inc. ("DenTek~~") on February 5, 2016, we entered into Amendment No. 5 (“ABL Amendment No. 5”) to the 2012 ABL Revolver. ABL Amendment No. 5 temporarily suspended certain financial and related reporting covenants in the 2012 ABL Revolver until the earliest of (i) the date that was 60 calendar days following February 4, 2016, (ii) the date upon which certain of ~~DenTek’s~~ ~~assets were included in the Company’s borrowing base under the 2012 ABL Revolver and (iii) the date upon which the Company received net proceeds from an offering of debt securities.~~

~~In connection with the~~ ~~Fleet~~ acquisition, on January 26, 2017, we entered into Amendment No. 4 ("Term Loan Amendment No. 4") to the 2012 Term Loan. Term Loan Amendment No. 4 provided for (i) the refinancing of all of our outstanding term loans and the creation of a new class of Term B-4 Loans under the 2012 Term Loan (the "Term B-4 Loans") in an aggregate principal amount of $1,427.0 million and (ii) increased flexibility under the credit agreement governing the 2012 Term Loan and the 2012 ABL Revolver, including additional investment, restricted payment, and debt incurrence flexibility and financial maintenance covenant relief. In addition, Citibank, N.A. was succeeded by Barclays Bank PLC as administrative agent under the 2012 Term Loan. The Term B-4 loans mature on January 26, 2024.

The 2012 Term Loan, as amended, bears interest at a rate that is based, at our option, on a LIBOR rate plus a margin of 2.75% per annum, with a LIBOR floor of 0.75%, or an alternative base rate plus a margin (with a margin step-down to 2.50% per annum based upon achievement of a specified first lien net leverage ratio). For the six months ended September 30, 2017, the average interest rate on the 2012 Term Loan was 4.4%.

Also on January 26, 2017, we entered into Amendment No. 6 ("ABL Amendment No. 6") to the 2012 ABL Revolver. ABL Amendment No. 6 provided for (i) a $40.0 million increase in revolving commitments under the 2012 ABL Revolver, (ii) an extension of the maturity date of revolving commitments to January 26, 2022, and (iii) increased flexibility under the credit agreement governing the 2012 Term Loan and the 2012 ABL Revolver, including additional investment, restricted payment and debt incurrence flexibility consistent with Term Loan Amendment No. 4. We may voluntarily repay outstanding loans under the 2012 ABL Revolver at any time without a premium or penalty. For the six months ended September 30, 2017, the average interest rate on the amounts borrowed under the 2012 ABL Revolver was 2.5%.

~~We used the proceeds from the Term B-4 Loans and borrowings under the 2012 ABL Revolver to finance the acquisition of~~ ~~Fleet, to refinance our outstanding term loans, and to pay fees and expenses incurred in connection with the~~ ~~Fleet~~ ~~acquisition.~~

~~2013 Senior Notes:~~

On December 17, 2013, the Borrower issued $400.0 million of senior unsecured notes, with an interest rate of 5.375% and a maturity date of December 15, 2021 (the "2013 Senior Notes"). The 2013 Senior Notes are guaranteed by Prestige Brands Holdings, Inc. and certain of its 100% domestic owned subsidiaries, other than the Borrower. 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 or to make payments to the Borrower or the Company. In connection with the 2013 Senior Notes offering, we incurred $7.2 million of costs, which were capitalized as deferred financing costs and are being amortized over the term of the 2013 Senior Notes.

~~2016 Senior Notes:~~

On February 19, 2016, the Borrower completed the sale of $350.0 million aggregate principal amount of 6.375% senior notes due 2024 (the “2016 Senior Notes”), pursuant to a purchase agreement, dated February 16, 2016, among the Borrower, the guarantors party thereto and the initial purchasers party thereto. The 2016 Senior Notes are guaranteed by Prestige Brands Holdings, Inc. and certain of its domestic 100% owned subsidiaries, other than the Borrower. 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 or to make payments to the Borrower or the Company. In connection with the 2016 Senior Notes offering, we incurred $5.5 million of costs, which were capitalized as deferred financing costs and are being amortized over the term of the 2016 Senior Notes.

The 2016 Senior Notes were issued pursuant to an indenture, dated February 19, 2016 (the “Indenture”). The Indenture provides, among other things, that interest will be payable on the 2016 Senior Notes on March 1 and September 1 of each year, beginning on September 1, 2016, until their maturity date of March 1, 2024. The 2016 Senior Notes are senior unsecured obligations of the Borrower.

~~Redemptions and Restrictions:~~

At any time prior to December 15, 2016, we had the option to redeem the 2013 Senior Notes in whole or in part at a redemption price equal to 100% of the principal amount of notes redeemed, plus an applicable "make-whole premium" calculated as set forth in the indenture governing the 2013 Senior Notes, together with accrued and unpaid interest, if any, to the date of redemption. On or after December 15, 2016, we have the option to redeem some or all of the 2013 Senior Notes at redemption prices set forth in the indenture governing the 2013 Senior Notes. In addition, at any time prior to December 15, 2016, we had the option to redeem up to 35% of the aggregate principal amount of the 2013 Senior Notes at a redemption price equal to 105.375% of the principal amount thereof, plus accrued and unpaid interest, if any, to the redemption date, with the net cash proceeds of certain equity offerings, provided that certain conditions were met. Subject to certain limitations, in the event of a change of control (as defined in the indenture governing the 2013 Senior Notes), the Borrower will be required to make an offer to purchase the 2013 Senior Notes at a price equal to 101% of the aggregate principal amount of the 2013 Senior Notes repurchased, plus accrued and unpaid interest, if any, to the date of repurchase.

We have the option to redeem all or a portion of the 2016 Senior Notes at any time on or after March 1, 2019 at the redemption prices set forth in the Indenture, plus accrued and unpaid interest, if any. We may also redeem all or any portion of the 2016 Senior Notes at any time prior to March 1, 2019, at a price equal to 100% of the aggregate principal amount of the notes redeemed, plus a "make-whole premium" calculated as set forth in the Indenture, and accrued and unpaid interest, if any, to the date of redemption. In addition, before March 1, 2019, we may redeem up to 40% of the aggregate principal amount of the 2016 Senior Notes with the net proceeds of certain equity offerings at the redemption price set forth in the Indenture, provided that certain conditions are met. Subject to certain limitations, in the event of a change of control (as defined in the Indenture), we will be required to make an offer to purchase the 2016 Senior Notes at a price equal to 101% of the aggregate principal amount of the notes repurchased, plus accrued and unpaid interest, if any, to the date of repurchase.

The credit agreement governing the 2012 Term Loan and the 2012 ABL Revolver and the indentures governing the 2013 Senior Notes and the 2016 Senior Notes contain cross-default provisions, whereby a default pursuant to the terms and conditions of certain indebtedness will cause a default on the remaining indebtedness under the credit agreement governing the 2012 Term Loan and the 2012 ABL Revolver and the indentures governing the 2013 Senior Notes and the 2016 Senior Notes.

As of September 30, ~~2017,~~2018, we had an aggregate of ~~$2,117.0 million~~$1.9 billion of outstanding indebtedness, which consisted of the following:

$400.0 million of 5.375% 2013 Senior Notes, ~~due~~which mature on December 15, 2021;

$~~350.0~~600.0 million of 6.375% 2016 Senior Notes, ~~due~~which mature on March 1, 2024;

$~~1,277.0~~838.0 million of borrowings under the 2012 Term ~~B-4 Loans;~~B-5 Loans due January 26, 2024; and

$~~90.0~~75.0 million of borrowings under the 2012 ABL ~~Revolver.~~Revolver due January 26, 2022.

As of September 30, ~~2017,~~2018, we had $85.0 million of an additional borrowing capacity under the 2012 ABL Revolver.

AsDuring the years ended March 31, 2018 and 2017, we ~~deem appropriate,~~made voluntary principal payments against outstanding indebtedness of $444.0 million and $175.5 million, respectively, under the 2012 Term Loan. During the six months ended September 30, 2018, we ~~may from time~~made voluntary principal payments of $100.0 million under the 2012 Term Loan. Under the Term Loan Amendment No. 5, we are required to ~~time utilize derivative financial instruments~~make quarterly payments each equal to ~~mitigate~~0.25% of the ~~impact~~aggregate principal amount, which, as of ~~changing interest rates associated with our long-term debt obligations or other derivative financial instruments. While~~September 30, 2018, was $838.0 million. Since we have ~~utilized derivative financial instruments in~~made optional payments that exceed a significant portion of our required quarterly payments, we will not be required to make another payment on the ~~past, we did not have any significant derivative financial instruments outstanding at either September 30, 2017 or~~2012 Term Loan until the fiscal year ending March 31, 2017 or during any of the periods presented. We have not entered into derivative financial instruments for trading purposes; all of our derivatives have been over-the-counter instruments with liquid markets. 2022.

Maturities:



(In thousands)
Year Ending March 31,	Amount
2019 (remaining nine months ending March 31, 2019)	$	—
2020	—
2021	—
2022	475,000
2023	—
Thereafter	1,438,000
	$	1,913,000

Covenants:

Our debt facilities contain various financial covenants, including provisions that require us to maintain certain leverage, interest coverage and fixed charge ratios. The credit agreement governing the 2012 Term Loan and the 2012 ABL Revolver and the indentures governing the 2013 Senior Notes and 2016 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 our 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 ~~7.50~~6.75 to 1.0 for the quarter ended September 30, ~~2017~~2018 (defined as, with certain adjustments, the ratio of our consolidated total net debt as of the last day of the fiscal quarter to our trailing twelve month consolidated net income before interest, taxes, depreciation, amortization, non-cash charges and certain other items (“EBITDA”)). Our leverage ratio requirement decreases ~~over time~~ to ~~7.25~~6.50 to ~~1.0~~1.00 on ~~March 31, 2018 and .25 to 1.0 per quarter until~~ December 31, 2018 and ~~6.50 to 1.0~~remains at that level thereafter;

Have an interest coverage ratio of greater than ~~2.00~~2.25 to 1.0 for the quarter ended September 30, ~~2017~~2018 and thereafter (defined as, with certain adjustments, the ratio of our consolidated EBITDA to our trailing twelve month consolidated cash interest expense)~~. Our interest coverage requirement increases over time to 2.25 to 1.0 on March 31, 2018 and remains level thereafter;~~; and

Have a fixed charge ratio of greater than 1.0 to 1.0 for the quarter ended September 30, ~~2017~~2018 (defined as, with certain adjustments, the ratio of our consolidated EBITDA minus capital expenditures to our trailing twelve month consolidated interest paid, taxes paid and other specified payments). Our fixed charge requirement remains level throughout the term of the credit agreement.

At September 30, ~~2017,~~2018, we were in compliance with the applicable financial and restrictive covenants under the 2012 Term Loan and the 2012 ABL Revolver and the indentures governing the 2013 Senior Notes and the 2016 Senior Notes. Additionally, management anticipates that in the normal course of operations, we will be in compliance with the financial and restrictive covenants during the remainder of ~~2018. During~~2019.

As we deem appropriate, we may from time to time utilize derivative financial instruments to mitigate the ~~years ended~~impact of changing interest rates associated with our long-term debt obligations or other derivative financial instruments. While we have utilized derivative financial instruments in the past, we did not have any significant derivative financial instruments outstanding at either September 30, 2018 or March 31, ~~2017 and 2016, we made voluntary principal payments against outstanding indebtedness of $175.5 million and $60.0 million, respectively, under the 2012 Term Loan. During the first half of~~ 2018 ~~we made voluntary principal payments of $105.0 million under the 2012 Term Loan. Under the Term Loan Amendment No. 4, we are required to make quarterly payments each equal to 0.25%~~or during any of the ~~aggregate principal amount of $1,427.0 million. Since we~~periods presented. We have ~~made optional payments that exceeded a significant portion~~not entered into derivative financial instruments for trading purposes; all of our ~~required quarterly payments, we will not be required to make another payment on the 2012 Term Loan until the fiscal year ending March 31, 2024.~~derivatives have been over-the-counter instruments with liquid markets.

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 and financial condition. Although we do not believe that inflation has had a material impact on our financial condition or results of operations for the three and six months ended September 30, 2017, a high rate of inflation in the future could have a material adverse effect on our financial condition or results of operations. Volatility in crude oil prices may have an adverse impact on transportation costs, as well as certain petroleum based raw materials and packaging material. Although we make 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 or other raw materials used in our products may have an adverse effect on our operating results.

Critical Accounting Policies and Estimates

The preparation of financial statements in conformity with GAAP 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 our knowledge of current events and actions that we may undertake in the future, actual results could differ from those estimates. A summary of our critical accounting policies is presented in our Annual Report on Form 10-K for the fiscal year ended March 31, ~~2017.~~2018. There were no material changes to our critical accounting policies during the six months ended September 30, ~~2017.~~2018, except as described in Note 2 of this Quarterly Report on Form 10-Q.

Recent Accounting Pronouncements

A description of recently issued and recently adopted accounting pronouncements is included in the notes to the unaudited Condensed Consolidated Financial Statements ~~included elsewhere~~ in Part I, Item I, Note 1 of this Quarterly Report on Form 10-Q.

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.

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 intend 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.

These forward-looking statements generally can be identified by the use of words or phrases such as “believe,” “anticipate,” “expect,” “estimate,” “project,” "intend," "strategy," "goal," "future," "seek," "may," "should," "would," "will," or other similar words and phrases. Forward-looking statements are based on current expectations and assumptions that are subject to a number of risks and uncertainties that could cause actual results to differ materially from those anticipated, including, without limitation:

The high level of competition in our industry and markets;

Our inability to increase organic growth via new product introductions, line extensions, increased spending on advertising and promotional support, and other new sales and marketing strategies;

Our dependence on a limited number of customers for a large portion of our sales;

Our inability to successfully identify, negotiate, complete and integrate suitable acquisition candidates and to obtain necessary financing;

Our inability to invest successfully in research and ~~development;~~development to develop new products;

Changes in inventory management practices by retailers;

Our inability to grow our international sales;

General economic conditions affecting sales of our products and their respective markets;

Economic factors, such as increases in interest rates and currency exchange rate fluctuations;

Business, regulatory and other conditions affecting retailers;

Changing consumer trends, additional store brand or branded competition or other pricing pressures which may cause us to lower our prices;

Our dependence on third-party manufacturers to produce many of the products we sell;

Our dependence on a third party logistics provider to distribute our products to customers;

Price increases for raw materials, labor, energy and transportation costs, and for other input costs;

Disruptions in our distribution center or manufacturing facility;

Acquisitions, dispositions or other strategic transactions diverting managerial resources, the incurrence of additional liabilities or problems associated with integration of those businesses and facilities;

Actions of government agencies in connection with our products, advertising or regulatory matters governing our industry;

Product liability claims, product recalls and related negative publicity;

Our inability to protect our intellectual property rights;

Our dependence on third parties for intellectual property relating to some of the products we sell;

Our inability to protect our internal information technology systems;

Our dependence on third party information technology service providers and their ability to protect against security threats and disruptions;

Our assets being comprised virtually entirely of goodwill and intangibles and possible changes in their value based on adverse operating results;

Our dependence on key personnel;

Shortages of supply of sourced goods or interruptions in the distribution or manufacturing of our products;

The costs associated with any claims in litigation or arbitration and any adverse judgments rendered in such litigation or arbitration;

Our level of indebtedness and possible inability to service our debt;

Our ~~ability~~inability to obtain additional financing; ~~and~~

The restrictions imposed by our financing agreements on our ~~operations.~~operations; and

Changes in federal and state tax laws, including the recently enacted Tax Cuts and Jobs Act.

For more information, see Part I, Item 1A., "Risk Factors" in our Annual Report on Form 10-K for the fiscal year ended March 31, ~~2017.~~

2018.


ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rate Risk

We are exposed to changes in interest rates because our 2012 Term Loan and 2012 ABL Revolver are variable rate ~~debt.~~debt instruments. Interest rate changes generally do not significantly affect the market value of the 2012 Term Loan and the 2012 ABL Revolver but do affect the amount of our interest payments and, therefore, our future earnings and cash flows, assuming other factors are held constant. At September 30, ~~2017,~~2018, we had variable rate debt of approximately ~~$1,367.0~~$913.0 million.

Holding other variables constant, including levels of indebtedness, a 1.0% increase in interest rates on our variable rate debt would have an adverse impact on pre-tax earnings and cash flows for the three and six months ended September 30, ~~2017~~2018 of approximately ~~$3.5~~$2.4 million and ~~$7.2~~$5.0 million, respectively.

Foreign Currency Exchange Rate Risk

During the three and six months ended September 30, ~~2017,~~2018, approximately ~~10.7%~~12.1% and ~~10.2%~~10.5%, respectively, of our revenues were denominated in currencies other than the U.S. Dollar. During the three and six months ended September 30, ~~2016,~~2017, approximately ~~13.6%~~10.7% and ~~12.5%~~10.2%, respectively, of our revenues were denominated in currencies other than the U.S. Dollar. As such, we are exposed to transactions that are sensitive to foreign currency exchange rates, including insignificant foreign currency forward exchange agreements. These transactions are primarily with respect to the Canadian and Australian Dollar.

We performed a sensitivity analysis with respect to exchange rates for the three and six months ended September 30, 2018 and 2017. Holding all other variables constant, and assuming a hypothetical 10.0% adverse change in foreign currency exchange rates, this analysis resulted in a less than 5.0% impact on pre-tax income of approximately $0.9 million for the three months ended September 30, 2018 and approximately $1.9 million for the six months ended September 30, 2018. It represented a less than 5% impact on pre-tax income of approximately $1.2 million for the three months ended September 30, 2017 and approximately $2.1 million for the six months ended September 30, 2017.


ITEM 4.	CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

The Company's management, with the participation of its Chief Executive Officer and 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 (the “Exchange Act”), as of September 30, ~~2017~~2018. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, as of September 30, ~~2017~~2018, the Company's disclosure controls and procedures were effective to ensure that 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 SEC's rules and forms and that such information is accumulated and communicated to the Company's management, including the Company's Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

~~We have excluded~~ ~~Fleet~~ ~~from~~There was no change in our ~~assessment of~~ internal control over financial reporting ~~as of September 30, 2017, because (i)~~ ~~Fleet~~ ~~was acquired by us in~~that occurred during the ~~fourth~~ quarter ~~of 2017 and (ii)~~ ~~Fleet~~ is a wholly-owned subsidiary whose total assets represent approximately 3.6% of the related condensed consolidated financial statement assets as of September 30, 2017 and whose total revenue represent approximately 20.2% and 20.8%, respectively, of the related condensed consolidated financial statement revenue for the three and six months ended September 30, ~~2017. We are currently in the process of evaluating and integrating~~ ~~Fleet's~~ historical internal control over financial reporting structure with ours. Other than the changes noted above, there have been no changes during the three and six months ended September 30, 2017 in the Company’s internal control over financial reporting, as defined in Rule 13a-15(f) of the Exchange Act,2018 that ~~have~~has materially affected, or ~~are~~is reasonably likely to materially affect, ~~the Company’s~~our internal control over financial reporting.


PART II.	OTHER INFORMATION

ITEM 1A. RISK FACTORS

You should carefully consider the risk factors discussed in Part I, Item 1A. "Risk Factors" in our Annual Report on Form 10-K for the year ended March 31, ~~2017,~~2018, which could materially affect our business, financial condition or future results of operations. The ~~risks~~risk factors described in our Annual Report on Form 10-K have not materially changed in the period covered by this Quarterly Report on Form 10-Q, and such risks are not the only risks facing us. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and results of operations.

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 market price of our outstanding securities could be adversely impacted.

ITEM 5. OTHER INFORMATION

On October 29, 2018, the Company's Board of Directors approved an amendment to the Company's Amended and Restated Bylaws, which Amended and Restated Bylaws were originally approved effective as of August 17, 2018, to add a forum selection bylaw, re-insert the process for stockholders to act by written consent and other clarifying changes.

A copy of the Company's Amended and Restated Bylaws, as amended, is filed as Exhibit 3.2 to this Quarterly Report on Form 10-Q and is incorporated herein by reference.

In October 2017, the Company adopted the Prestige Consumer Healthcare Inc. Executive Severance Plan (formerly known as the Prestige Brands Holdings, Inc. Executive Severance Plan (as amended from time to time since then, the “Plan”)). On October 29, 2018, the Company approved certain amendments to the Plan in order to continue the evolution of the Company’s compensation programs started last year by eliminating employment agreements; and ensure the retention of critical personnel in a change-in-control event.

The Plan is open to participants designated by the Compensation and Talent Management Committee of the Company’s Board of Directors as either a Tier 1 participant (which presently includes only the Company’s Chief Executive Officer) or as a Tier 2 participant (which presently includes, among others, each of the Company’s currently employed “named executive officers”) and provides generally for the payment of severance benefits in the event of termination of employment by the Company without “cause” or resignation by the participant for “good reason,” each as defined in the Plan (each, a “Qualified Termination”).

Prior to the amendments, the Plan provided the following benefits, regardless whether the Qualified Termination occurred before or after a change in control of the Company, in any event subject to a release of claims and compliance with certain noncompetition and other restrictive covenants: (i) cash severance in a multiple (1.5 in the case of Tier 1 participants and 1.0 for Tier 2 participants) of base salary plus target annual bonus, in each case payable in installments over the 12 months following termination, (ii) certain continued medical benefits for 12 months, and (iii) a pro-rata annual incentive based on actual performance payable at the time any annual bonus is paid to continuing employees. As amended, the severance benefits provided in respect of a Qualified Termination occurring before a change in control of the Company have not changed, but the Plan now provides that, if the Qualified Termination occurs upon or within the 24-month period following a change in control, (i) the severance multiple is 2.5 for Tier 1 participants and 2.0 for Tier 2 participants and payment is made in a lump-sum rather than installments, (ii) the continued medical benefit period is extended to 18 months, (iii) the pro-rata annual incentive is paid upon termination based upon the greater of target or then-actual performance, and (iv) up to 18 months of outplacement assistance will be provided, all still subject to a release of claims and compliance with the noncompetition and other restrictive covenants. The definitions of cause and good reason were modified in certain respects to provide additional protection to participants, particularly following a change in control.

The Plan continues to provide that, in the event that payments made by the Company to a participant would be subject to the “golden parachute” excise tax under the Internal Revenue Code, such payments will be reduced so that no excise tax is payable if the net after-tax amount of the reduced payments provides a greater benefit to the participant. The Plan does not provide for any excise tax “gross-up” payment.

Certain other immaterial and conforming changes were made to the Plan.


~~Item 2.~~	~~Unregistered Sales of Equity Securities and Use of Proceeds~~

~~ISSUER PURCHASES OF EQUITY SECURITIES (a)~~The foregoing description of the Plan does not purport to be complete and is qualified in its entirety by reference to the full text of the Plan as amended, a copy of which is attached hereto as Exhibit 10.1 and incorporated herein by reference.

Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs
July 1 to July 31, 2017 —
—
n/a n/a
August 1 to August 31, 2017 933
$ 51.60
n/a n/a
September 1 to September 30, 2017 —
—
n/a n/a
Total 933
n/a n/a

(a) These purchases were made pursuant to our 2005 Long-Term Equity Incentive Plan, which allows for the indirect purchase of shares through a net-settlement feature upon the vesting of shares in order to satisfy minimum statutory tax-withholding requirements.

ITEM 6. EXHIBITS

See Exhibit Index immediately following the signature page.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the ~~Registrant~~registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



		PRESTIGE ~~BRANDS HOLDINGS,~~CONSUMER HEALTHCARE INC.


Date:	November ~~2, 2017~~1, 2018	By:	/s/ Christine Sacco
			Christine Sacco
			Chief Financial Officer
			(Principal Financial Officer and Duly Authorized Officer)

Exhibit Index




3.1			Amendment to Amended and Restated Certificate of Incorporation of Prestige Brands Holdings, Inc., effective August 17, 2018 (filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on August 2, 2018). *

3.2			Amended and Restated Bylaws of Prestige Consumer Healthcare Inc., as amended, effective October 29, 2018.

10.1			~~Second amendment to Lease between GHP 660~~Amended and Restated Executive Severance Plan adopted as of October 29, 2018.

10.2			Asset Purchase Agreement, dated July 2, 2018, by and among KIK International LLC, ~~successor-in-interest to RA 660 White Plains Road, LLC,~~Prestige Brands International, Inc., The Spic and Span Company, Medtech Holdings, Inc. (as guarantor only) and Prestige Brands Holdings, Inc.~~, dated~~ (filed as ~~of September 13, 2017.~~Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q filed with the SEC on August 2, 2018). *

31.1			Certification of Principal Executive Officer of Prestige ~~Brands Holdings,~~Consumer Healthcare Inc. pursuant to Rule 13a-14(a) of the Securities Exchange Act of ~~1934.~~1934.

31.2			Certification of Principal Financial Officer of Prestige ~~Brands Holdings,~~Consumer Healthcare Inc. pursuant to Rule 13a-14(a) of the Securities Exchange Act of ~~1934.~~1934.

32.1			Certification of Principal Executive Officer of Prestige ~~Brands Holdings,~~Consumer Healthcare Inc. pursuant to Rule 13a-14(b) and Section 1350 of Chapter 63 of Title 18 of the United States ~~Code.~~Code.

32.2			Certification of Principal Financial Officer of Prestige ~~Brands Holdings,~~Consumer Healthcare Inc. pursuant to Rule 13a-14(b) and Section 1350 of Chapter 63 of Title 18 of the United States ~~Code.~~Code.
* Incorporated herein by reference.

101.INS**			XBRL Instance Document
101.SCH**			XBRL Taxonomy Extension Schema Document
101.CAL**			XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF**			XBRL Taxonomy Extension Definition Linkbase Document
101.LAB**			XBRL Taxonomy Extension Label Linkbase Document
101.PRE**			XBRL Taxonomy Extension Presentation Linkbase Document

** XBRL information is furnished and not filed for purposes of Section 11 and 12 of the Securities Act of 1933 and Section 18 of the Securities Exchange Act of 1934, and is not subject to liability under those sections, is not part of any registration statement, prospectus or other document to which it relates and is not incorporated or deemed to be incorporated by reference into any registration statement, prospectus or other document.

- ~~43-~~37-



(In thousands)	January 26, 2017
Cash	$	19,884
Accounts receivable	25,293
Inventories	20,812
Prepaid expenses and other current assets	17,024
Property, plant and equipment	38,661
Goodwill	273,058
Intangible assets	747,600
Other long-term assets	1,137
Total assets acquired	1,143,469

Accounts payable	10,412
Accrued expenses	22,895
Deferred income taxes - long term	261,555
Other long term liabilities	24,884
Total liabilities assumed	319,746
Total purchase price	$	823,723



	Three Months Ended		Six Months Ended
	September 30, 2016		September 30, 2016
(In thousands, except per share data)	(Unaudited)
Revenues	$	265,967	$	526,743
Net income	$	32,358	$	26,428

Earnings per share:
Basic EPS	$	0.61	$	0.50
Diluted EPS	$	0.61	$	0.50



	Three Months Ended September 30, 2016
(In thousands)	North American OTC Healthcare		International OTC Healthcare		Household Cleaning		Consolidated
Total segment revenues*	$	172,447	$	18,804	$	23,801	$	215,052
Cost of sales	65,402		7,096		18,589		91,087
Gross profit	107,045		11,708		5,212		123,965
Advertising and promotion	24,811		3,244		537		28,592
Contribution margin	$	82,234	$	8,464	$	4,675	95,373
Other operating expenses**							24,315
Operating income							71,058
Other expense							20,830
Income before income taxes							50,228
Provision for income taxes							18,033
Net income							$	32,195



Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs
July 1 to July 31, 2017	—	—		n/a	n/a
August 1 to August 31, 2017	933	$	51.60	n/a	n/a
September 1 to September 30, 2017	—	—		n/a	n/a
Total	933			n/a	n/a