XML 39 R24.htm IDEA: XBRL DOCUMENT v3.8.0.1
Concentrations of Risk
12 Months Ended
Mar. 31, 2018
Risks and Uncertainties [Abstract]  
Concentrations of Risk
Concentrations of Risk

Our revenues are concentrated in the areas of OTC Healthcare and Household Cleaning products.  We sell our products to mass merchandisers and drug, food, dollar, convenience, and club stores.  During 2018, 2017, and 2016, approximately 41.2%, 40.0%, and 41.9%, respectively, of our gross revenues were derived from our five top selling brands.  One customer, Walmart, accounted for more than 10% of our gross revenues for each of the periods presented. During 2018, 2017, and 2016, Walmart accounted for approximately 23.8%, 21.1%, and 20.2%, respectively, of our gross revenues. At March 31, 2018, approximately 26.1% of our accounts receivable were owed by Walmart.

We manage product distribution in the continental United States through a third-party distribution center in St. Louis, Missouri.  A serious disruption, such as an earthquake, tornado, flood or fire, to the main distribution center could damage our inventories and could materially impair our ability to distribute our products to customers in a timely manner or at a reasonable cost.  We could 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 to reopen or replace our distribution center.  As a result, any such disruption could have a material adverse effect on our business, sales and profitability.

At March 31, 2018, we had relationships with 116 third-party manufacturers.  Of those, we had long-term contracts with 46 manufacturers that produced items that accounted for approximately 73.6% of our gross sales for 2018, compared to 47 manufacturers with long-term contracts that accounted for approximately 78.4% of gross sales in 2017.  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 from 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.