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Concentrations of Risk
3 Months Ended
Jun. 30, 2024
Risks and Uncertainties [Abstract]  
Concentrations of Risk Concentrations of Risk
Our revenues are concentrated in the area of OTC Healthcare. We sell our products to mass merchandisers, drug, food, dollar, convenience and club stores and e-commerce channels. During the three months ended June 30, 2024 and 2023, approximately 40% and 41%, respectively, of our gross revenues were derived from our five top selling brands. Walmart accounted for
approximately 20% and 21%, respectively, of our gross revenues for the three months ended June 30, 2024 and 2023. Amazon accounted for approximately 13% and 11%, respectively, of gross revenues for the three months ended June 30, 2024 and 2023.

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

At June 30, 2024, we had relationships with 113 third-party manufacturers.  Of those, we had long-term contracts with 29 manufacturers that produced items that accounted for approximately 78% of gross sales for the three months ended June 30, 2024. At June 30, 2023, we had relationships with 135 third-party manufacturers.  Of those, we had long-term contracts with 27 manufacturers that produced items that accounted for approximately 75% of gross sales for the three months ended June 30, 2023. One of our suppliers, a privately owned pharmaceutical manufacturer with whom we have a long-term supply agreement, produced products that accounted for more than 10% of our gross revenues for the three months ended June 30, 2024 and 2023. At June 30, 2024, this manufacturer accounted for approximately 23% of our gross revenues, while we accounted for a significant portion of their gross revenues over that time period. At June 30, 2023, this manufacturer accounted for approximately 22% of our gross revenues, while we accounted for a significant portion of their gross revenues over that time period. No other single third-party supplier produces products that account for 10% or more of our gross revenues. 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 continually 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.