Concentrations of Risk

12 Months Ended

Mar. 31, 2016

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, food and drug stores, and dollar and club stores.  During 2016, 2015, and 2014, approximately 41.9%, 38.2%, and 38.3%, 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 2016, 2015, and 2014, Walmart accounted for approximately 20.2%, 18.1%, and 19.5%, respectively, of our gross revenues.  Our next largest customer accounted for approximately 9.6% of our gross revenues during 2016. At March 31, 2016, approximately 24.7% and 10.4% of accounts receivable were owed by Walmart and Walgreens, respectively.

We manage product distribution in the continental United States through a third-party distribution center in St. Louis, Missouri.  A serious disruption, such as a 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, 2016, we had relationships with 119 third-party manufacturers.  Of those, we had long-term contracts with 55 manufacturers that produced items that accounted for approximately 79.9% of our gross sales for 2016, compared to 44 manufacturers with long-term contracts that accounted for approximately 82.9% of gross sales in 2015.  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 agreement which could have a material adverse effect on our business.