Business Segments |
Business Segments
Segment information has been prepared in accordance with Segment Reporting topic of the FASB ASC 280 and includes certain information that our chief operating decision maker, the Company's Chief Executive Officer, reviews, including contribution margin, which is a non-GAAP financial measure. Contribution margin is defined as gross profit less advertising and promotional expenses. Our general and administrative expenses and other corporate-level activity is not allocated to our segments, including costs of: employee-related costs; legal; finance; information technology; corporate development; legal settlements; depreciation and amortization; and facility and insurance costs. Our current operating and reportable segments consist of (i) OTC Healthcare and (ii) Household Cleaning.
There were no inter-segment sales or transfers during any of the periods presented. We evaluate the performance of our operating segments and allocate resources to them based primarily on contribution margin.
The table below summarizes information about our operating and reportable segments. | | | | | | | | | | | | | | | | Year Ended March 31, 2014 | | | OTC Healthcare | | Household Cleaning | | Consolidated | (In thousands) | | | | | | | Net sales | | $ | 513,056 |
| | $ | 83,898 |
| | $ | 596,954 |
| Other revenues | | 791 |
| | 4,136 |
| | 4,927 |
| Total revenues | | 513,847 |
| | 88,034 |
| | 601,881 |
| Cost of sales | | 197,442 |
| | 64,388 |
| | 261,830 |
| Gross profit | | 316,405 |
| | 23,646 |
| | 340,051 |
| Advertising and promotion | | 86,578 |
| | 2,890 |
| | 89,468 |
| Contribution margin | | $ | 229,827 |
| | $ | 20,756 |
| | 250,583 |
| Other operating expenses | | |
| | |
| | 61,967 |
| Operating income | | |
| | |
| | 188,616 |
| Other expense | | |
| | |
| | 86,868 |
| Income before income taxes | | | | | | 101,748 |
| Provision for income taxes | | |
| | |
| | 29,133 |
| Net income | | | | | | $ | 72,615 |
|
| | | | | | | | | | | | | | | | Year Ended March 31, 2013 | | | OTC Healthcare | | Household Cleaning | | Consolidated | (In thousands) | | | | | | | Net sales | | $ | 536,247 |
| | $ | 84,147 |
| | $ | 620,394 |
| Other revenues | | 684 |
| | 2,519 |
| | 3,203 |
| Total revenues | | 536,931 |
| | 86,666 |
| | 623,597 |
| Cost of sales | | 211,654 |
| | 64,727 |
| | 276,381 |
| Gross profit | | 325,277 |
| | 21,939 |
| | 347,216 |
| Advertising and promotion | | 84,537 |
| | 6,093 |
| | 90,630 |
| Contribution margin | | $ | 240,740 |
| | $ | 15,846 |
| | 256,586 |
| Other operating expenses | | |
| | |
| | 64,702 |
| Operating income | | |
| | |
| | 191,884 |
| Other expense | | |
| | |
| | 85,850 |
| Income before income taxes | | | | | | 106,034 |
| Provision for income taxes | | |
| | |
| | 40,529 |
| Net income | | |
| | |
| | $ | 65,505 |
|
| | | | | | | | | | | | | | | | Year Ended March 31, 2012 | | | OTC Healthcare | | Household Cleaning | | Consolidated | (In thousands) | | | | | | | Net sales | | $ | 344,282 |
| | $ | 93,556 |
| | $ | 437,838 |
| Other revenues | | 719 |
| | 2,528 |
| | 3,247 |
| Total revenues | | 345,001 |
| | 96,084 |
| | 441,085 |
| Cost of sales | | 143,151 |
| | 70,550 |
| | 213,701 |
| Gross profit | | 201,850 |
| | 25,534 |
| | 227,384 |
| Advertising and promotion | | 51,895 |
| | 5,232 |
| | 57,127 |
| Contribution margin | | $ | 149,955 |
| | $ | 20,302 |
| | 170,257 |
| Other operating expenses | | |
| | |
| | 67,434 |
| Operating income | | |
| | |
| | 102,823 |
| Other expense | | |
| | |
| | 41,666 |
| Income before income taxes | | | | | | 61,157 |
| Provision for income taxes | | |
| | |
| | 23,945 |
| Net income | | |
| | |
| | $ | 37,212 |
|
| | | | | | | | | | | | | | Year Ended March 31, | (In thousands) | | 2014 |
| 2013 |
| 2012 |
| Analgesics | | $ | 110,604 |
| $ | 108,144 |
| $ | 18,930 |
| Cough & Cold | | 115,241 |
| 126,974 |
| 116,669 |
| Gastrointestinal | | 83,971 |
| 97,940 |
| 29,489 |
| Eye & Ear Care | | 86,390 |
| 86,380 |
| 74,363 |
| Dermatologicals | | 52,363 |
| 52,401 |
| 52,592 |
| Oral Care | | 48,774 |
| 49,617 |
| 46,551 |
| Other OTC | | 16,504 |
| 15,475 |
| 6,407 |
| Total OTC Healthcare Segment | | 513,847 |
| 536,931 |
| 345,001 |
| Household Cleaning Segment | | 88,034 |
| 86,666 |
| 96,084 |
| Consolidated Net Revenues | | $ | 601,881 |
| $ | 623,597 |
| $ | 441,085 |
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During 2014, 2013, and 2012, approximately 86.9%, 89.9%, and 90.2%, respectively of our sales were made to 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. Sales to Canada accounted for 7.7%, 7.4%, and 6.3% of our total revenues for 2014, 2013, and 2012, respectively. At March 31, 2014, substantially all of our long-term assets were located in the United States of America and have been allocated to the operating segments as follows:
| | | | | | | | | | | | | | (In thousands) | | OTC Healthcare | | Household Cleaning | | Consolidated | Goodwill | | $ | 183,522 |
| | $ | 7,389 |
| | $ | 190,911 |
| | | | | | | | Intangible assets | | | | | | | Indefinite-lived | | 1,154,058 |
| | 119,820 |
| | 1,273,878 |
| Finite-lived | | 94,772 |
| | 26,167 |
| | 120,939 |
| | | 1,248,830 |
| | 145,987 |
| | 1,394,817 |
| | | | | | | | | | $ | 1,432,352 |
| | $ | 153,376 |
| | $ | 1,585,728 |
|
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