Prestige Consumer Healthcare Inc. (PBH) Cash Flow Statement

The consistent OCF/NI ratio above 1.0 suggests that reported earnings are well-backed by cash generation, with non-cash charges like D&A and SBC adding back to cash flow. The 2026Q4 dip to 0.79x appears to be a working capital timing issue, as the subsequent quarter rebounded to 2.43x, reflecting the lumpy nature of trade promotions and retailer payments.

The FCF margin has remained consistently above 20% in most quarters, far exceeding the peer average of around 10-15%, indicating that PBH's asset-light model converts revenue into cash efficiently. The 2027Q1 FCF of $67.1M, despite a 25.2% margin, suggests that the company can sustain cash generation even as top-line growth stalls, though investors should monitor whether this is driven by cost cuts rather than organic demand.

With CapEx/Revenue consistently below 2%, PBH's capital requirements are minimal, allowing nearly all operating cash flow to convert to FCF. This low capital intensity is a key differentiator versus peers like Perrigo, which carries higher manufacturing assets, and supports the company's ability to service debt or fund acquisitions without straining cash flow.

The quarterly WC changes are highly variable, with negative changes in six of ten quarters, suggesting that PBH often benefits from favorable payment terms or inventory management. The 2027Q1 positive $23.1M change likely reflects a build-up in receivables or inventory, which may reverse in subsequent quarters, but the overall pattern does not indicate a structural issue with collections or payables.

The $1.0B acquisition in 2027Q1 is a significant deployment of cash, likely funded by debt or existing cash reserves, and represents a strategic bet on brand expansion. Buybacks have been sporadic and small, averaging under $20M per quarter, suggesting management prefers to reinvest in the portfolio rather than return capital to shareholders, which may be a response to the persistent revenue decline.

The cumulative OCF/NI ratio of 1.34x indicates that PBH's earnings are not only fully cash-backed but also benefit from non-cash charges and working capital tailwinds. This divergence suggests that the market's focus on GAAP earnings may understate the company's true cash generation, which is critical for servicing debt and funding future acquisitions.