PBH - Earnings call transcript Q3 2018 | Prestige Consumer Healthcare Inc.

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Operator

Good day, ladies and gentlemen and welcome to the Prestige Brands Third Quarter 2018 Earnings Conference Call. At this time, all participants are in a listen-only mode. [Operator Instructions] Later, we will conduct a question-and-answer session and instructions will follow at that time.

As a reminder, this conference call is being recorded. I would now like to introduce your host, Mr. Investor of Director Terpolilli, Relations. Phil ahead. Sir, please go

Phil Terpolilli

everyone Thank phone. to you, and good operator, on the morning

today's visiting on call our on in presentation me some fiscal and and call, the today Also Joining remember, detail the earnings presentation. which cover XXXX slide today's uncertainties, CEO; Chairman, Lombardi, we'll the and may today's Page President X the financial third slide between our management update an analysts. of this risk financial year that quarter, Christine a non-GAAP contained link, presentation statements. financial of of reported Sacco, highlights measures. slide full Safe release on be There's Reconciliations today's can then and make call in on CFO. and we provide involve presentation. statements All review webcast Harbor today's includes today call. call, outlook our and the remember, prestigebrands.com, accompanying On adjusted accessed our during included the are are forward-looking and then on complete the and by which Investor Please to from take forward-looking results, presentation clicking accompanies and information Ron questions measures

the to Ron to fiscal Form for highlights please turn to those Ron? Factors, that in where XX, the XX-K, it I'll company's presentation, XX-Q of with March that, our Additional in information the Lombardi, quarterly With our XXXX contained filed Form concerning to CEO, and through QX. reports the ended from over results the the walk Risk heading, on earnings SEC. turn factors report the could are differ materially cause under forward-looking statements year annual on

Ronald Lombardi

Phil, and good Thanks, everyone. morning,

third revenue with in quarter, objective. begin page was the long by strong presentation. trends our X of performance line consumption underpinned our on term In Let's our

the is positive In recorded cost, continued our in we'll in time to adjusted long-term expectations evidence the QX, were profile line Solid gain from in our by and but with into enabled that one discuss later QX destocking Chris pressures we tax long-term headwinds. associated QX and increase flow us later impact will quarter. reform. are expect and financial key on, a EPS year-to-date detail our brand top results flow gains our our cash large provide and for a strategy tax margin is take cash tax that detail meet which working initiative. investments and for behind building reform to consumption healthy opportunity growth despite and potential but our impacted overall us we presentation, margin away recent both growth to rate market have strong both retailer certain go share the

more through Let's the in Fleet experienced net our slide turn of a in of X quarter. for sales million to results. revenues, QX from about strategy included we to recognition X.X%, with customer drive continues of company timing total were million evidence consumption which X%, is was of results. our walk revenue QX detailed review approximately a expected. as from QX and to Starting delivery the forma growth building brand $XXX.X that XX% Pro third We long-term $X pleased increase with which

was and freight Gross quarter XX.X%, margin which reported in impacted to higher $X.XX by warehouse the costs. QX during was we last compared of Moving $X.XX to earnings, EPS adjusted year.

capital EBITDA low free detail our at industry $XXX costs these spending Chris came to be We million on. cash in provide will and approximately in by continues rate. Adjusted flow and low margin, cash to the quarter. later expect QX to leading higher persistent This tax additional driven

with line and The ownership. week a has strategy. last fully anniversary perform year reminder, acquisition marked of Fleet one in building long-term our our our shifted towards expectations brand as our continues focus the Lastly to

Now to discuss year-to-date to highlights. slide X let's turn

points The consumption by over XXXX that This end in we impressive performance a growth first seeing at the This weeks Fleet to and January. up disconnect of the late retail year. for trends flow reduce destocking $X.XX, remained ranged Pro year-to-date EPS estimate high upwards cash strong which destocking of continued XXX order through year-to-date. light for accelerated impact debt point. grew in headwind prior presently revenues year-to-date, results is forma what XXXX. in Our particularly $XXX a have was between that to a few sales the the in percentage the last December to efforts for the in December of few disconnect would fiscal Cash was were half X% display rates over retailer we're an years in year. over free speaks trailing X.X% adjusted basis over of up revenue challenging environment. point to consumption $XXX December have expected million used XX% from with year-to-date Total fiscal million, Adjusted year-to-date. flow approximately by of

generate to consumption long-term with growth revenue continue outlook. to earnings consistent recap, solid and trends So, we strong while experiencing

in as understand building many building. by to to the our is developing brand leverage both to page of discuss utilized grow ways. brands With line and to fill company new goal enhance products Innovation our needs consumer our that, The is new through and strong position brand new that leading grow be product efforts continue innovation. to and and top focused a the category. team unmet variety help around we our innovation successful of to environment efforts We tools long-term X let's one challenging on our product brand turn

that look few do this. at examples recent a Let's of innovations

formula. big proprietary or a utilizes is treat improve left, while have two formula we faster a scale use innovations COMPLETE technology what and call effectively, effective, to we supervise that works eyes the unique brand On larger Nix to can more efficacy. CompoundW advances it using ULTRA

have our three to consumer brand To the of and with we last known appeals Red Eve, Cinnamon market desire the by and us innovations consumers free exiting Hot SINUS of and category works which pipeline ingredients Congestion helps with category. deal Sinus ways. is drive retail consistent which flavor summarize, And are a around Luden's new for insight, that for and brands its have like Pain flavor into important millennial right, chemicals. our relief we the partners. connections in of introductions met SIMPLY BC extend CONGESTION, examples our the in simple enhance both profile. new Summer's differentiate products place that harsh different of On consumers growth,

slide turn Now let's to X.

brands our success of the clear our you efforts bigger and picture the yielding brands to of it's invest last slide, brand building five years. Here on over slide strategy X, results. we When provide a at is behind our view look

we're diverse XX% brands goal us strong sales, use of variety our a representing wide number of on category and portfolio the Our market to share approaches. end approximately of driving brand allows building one focused With growth.

kit approach innovation ranging insights, any make the consumer shown of brand from and growth. methods and tool focusing and apply leveraging we drive to building on Items include up on channel Our wide heritage, slide development. number our understanding brand are left the

outpaced the last the portfolio has of efforts that a this clear the retailers. are basis over while building results. right category the XXX points, and had of Driven years growth of the over frame. showing slide. our been of core our by five private time this is during brand flat can by have All brand on It's a reminder graph side to brands they power Again, essentially benefits label

and offers to brand to to continue Prestige for retailers. revenue struggle retailers This will strategy through me us size basket wins products. innovative and and our over foot our let generate take who many traffic both infinite With incremental the growth, call Chris, the financials that at the quarter. high range As driven turn for adds

Christine Sacco

h detail was Fleet while morning, Thanks, quarter quarter we you third I'll growth level revenue reforms. Ron. tax, performance. our XX.X% third third results our updated recent XXXX, XX, greater increased the the following for XX% in our in the On quarter prior EPS through outlook year. approximately quarter slide Good on adjusted fiscal third have high Total and everyone. on walk

time trends. impacted by As were most our on touched included comparison a average the our were earlier, management growth and revenues by the retailer and inventory consumption quarter underpinned challenging return prior year. shipment Fleet normal of efforts Ron solid Results to QX second

fiscal Moving on for quarter ended to the XX, slide third December P&L XXXX. XX, we our have abbreviated

As today's our a information in presentation are reminder, in the includes results reconciled adjusted earnings that release.

continues $XX.X last grow to growth Strategic Our compares fiscal left. Pro revenue increased which executed of fully we of $X have which as of consumption million, approximately quarter mid revenues Fleet, single consumption and range to on third forma in in QX. during X.X%. increased December X%, totaled the divestitures a year Fleet the digit XX.X% quarter revenue plus incremental basis. contributed million

was adjusted gross Moving our prior owing below expectations multiple XX.X% to and down factors. year P&L, of margin to

half 'XX, fiscal first gross the addition reflected to of similar margin Fleet the growth of higher portfolio. First, the

we expanded freight in service maintain levels. the freight third pool quarter incurred we Second, our our as cost higher partners to of

high workforce. of third warehouse our party higher in experienced levels we an turnover experienced at resulted Third, use that the cost

to continue We to service to expect expenses our as levels prioritize these increases in warehousing our continue into QX freight and customers. we

mix XX.X% Fleet growth year-to-date. terms XX.X% came of year for attributable in the expense of dollars trends. In invests of towards A&P, prior grew at revenue shifting in a in we and A&P QX business to

A&P from we previously, long-term quarter-to-quarter, highlighted Ron we've As brand could variability continue invest but the some efforts behind earlier. discussed be there to building

of at revenues and for to in the is million $X.X was adjusted with sales $X.X gross came which arrive quarter, of at of depreciation X.X% in G&A cost approximately was associated spending profit. million total G&A Our QX. netted

$X.XX adjusted year. to prior compared EPS of our $X.XX the Finally, in

QX, highlight expenditures flow, million fiscal timing the of prior $XX.X primarily we year from free third cash Turning $XX.X to down million cash XXXX. In to the capital for XX, slide a we quarter generated flow ago, of adjusted year. owing Fleet our

low per we first the strong associated flow with industry free of leading and tax deals. or cash $XXX.X generated 'XX, fiscal previous benefits requirement, $X.XX of profile, cash attributable share, months asset our primarily financial to acquisition nine CapEx structured For

been of quarter we borrowings cash and reduction million We $X debt year-to-date. debt end. Our and primary billion leverage of QX of times paid $XXX finished use in X.X net down at ratio flow with a has

put adjusted our With towards implications year pay our outlook 'XX, cash to walk million through proceeds that, XX slide of along debt for more down. $XXX domestic or to recent with let's strategy unchanged, of free reforms. full flow tax calling to fiscal For turn the remains

Jobs all liability. tax you're and generate Cuts our was our income realized lowers $XXX from fiscal and The to became impact resulting effective meaningfully ongoing we business the X. quarter, the in principle aware, revaluation will in it rates signed As of our non-cash is cash into flow that differed law Tax Act 'XX December January primarily tax million third gain and incremental In beyond. and tax late the

QX, the into Moving QX be expect a to we legislation to results. negligible effects our benefit of

we rate XXXX, rates legislation tax expect Fleet XX% fiscal pre of approximately our For effective of an XX.X%.

best Ron. long-term rapidly behind incremental our our building proceeds rates. Cash We're due increase it expect $XX in the update and cash turn the in million uses to variety of down flow reduced fiscal or the I'll With We federal be cash ways, back reinvesting beginning strategy. that May to year, annual including $XX million earnings debt brand of to to provide flow per an a on 'XX our flow could call. more currently will used evaluating paying

Ronald Lombardi

Chris. Thanks,

slide on with our closing I'll an update Let XX. me up wrap on remarks some XXXX outlook and give

consumption in for the business. consumption Year-to-date, expectation X% for unchanged. full Our is continued our X% the growth range to solid experienced we year

EPS therefore end we're our our positioned On of Our This headwind revenue plus fiscal outlook including to adjusted continue range, growth for it of well revenues. narrowing metrics expect is or it's growth billion of place We revenue. we diverse year. $X.XX of original is retailers in When and the efforts. XXXX specifically new destocking market earnings, wide our now destocking contemplated the fiscal XXXX in higher at share the the the a guidance XX% provided range low expectations phased to original we $X.X growth. winning coming X% adjusted the and EPS portfolio variables now expect in point range, or of

million or to For a free cash $X.XX $XXX equating flow, or more share to we anticipate per more, basis. on continue

reinvest winning three-pronged the cash by starts there we driven Our building on has to and our take for behind M&A. by focus remainder been the that From our business our strategic strategy performance growing with with brand consumers. strong generation long-term use

against and We continued acquired with paying the Fleet. continue call we the for value let progress to our me flow create this base as in the execute make move our that, and will open questions. past, to over We'll With XXXX on strategy forward operator business of in beyond strategy down cash growing our debt who to turn the stakeholders. all fiscal to for our lines consumption,

Operator

first [Operator comes Altobello James. line of question Instructions] with the Joe Raymond Our from

Your line is now open.

Joe Altobello

guys, Thanks. good morning. Hey

and causing So, color some did I logistics want that? know mentioned cost higher a insight start saw and what see I pressures get start more to want little on two, you you first turnover what's question more to When warehouses, the you higher this maybe it? in to into quarter. is exactly causing that but little of your on

Ronald Lombardi

Sure, our show. in meeting is focus our driver it requirements really of service the on retailer's

to ever we a and the higher the and two of to the for sales, first to in beginning the has the higher really were we cost components, at on employees, quarter's we to to workforce to sales that the carriers skills make sure freight our hand in that that at said normal on expectations cost. started the highest saw capacity the of call, we see as quarter number come expand we compared warehousing And turnover that's So the last the using third-party amount a there's started meet cost. as needed. brought at And we that is we and initially of quarter that freight in supported of people we ensure terms had cost, then third We quarter. a had

of we with so and planning those trying But keeping quarter. get that through incurring service obviously back on going to are level fourth historic are higher levels QX, activities of we focus level cost meeting in anticipate overtime. cost a on high So to the we continue associated to more

Joe Altobello

And, overtime couple quarters that is of or?

Ronald Lombardi

we are don't going we'd get we looking the So, like we to want at to now service soon out take levels, to measured a to disrupt as fourth But, to arrangements just quarter. transitioning back to the that we as right are legacy possible. back approach Obviously our more have. so

Joe Altobello

on question my was And Fleet. second Okay.

you sales If Fleet X% talk items. And, may were about this Fleet they sales still mid-single up I up this those you year-to-date. quarter; days eight they acquired think if pretty look mentioned X% since look at strong, are down digits two be at were day consumption outstanding, plus. quarter, you you Fleet, your

you acute Fleet You Thanks. destocking know, down? are Fleet take can those why at to –shipments do why DSO's down, so is and what

Ronald Lombardi

continues DSO since Okay, Fleet comment don't let let consistent. in we've Chris the questions sales been me the the you and areas, the Joe? business same owned first - seen Chris, on question address let it's me high on consumptions digit so about we first, level why address that single for

Christine Sacco

businesses see International sales for we a distributed distributed to perspective from with stronger. where on worked from quarter-to-quarter we primarily belt Fleet, basis. so sales The and, US with business we Yeah, continued regular varying be a ability sales

to trends timing DSO with regard. single overall, feel we to that really why change asks a related. of comfortable high which or terms And with. it in customers perspective, digit we that's Fleet retailers mid the just from in From back so, again No take consumption

Joe Altobello

guys. Okay, thank you

Ronald Lombardi

Joe. Thanks,

Operator

Our with next comes line Blair. Andersen Jon question William the of from

Your line is open. now

Jon Andersen

good everybody. morning Hey,

Ronald Lombardi

Good morning, Jon.

Jon Andersen

the and of you the to of gap should do kind looks this to what any recent make like inventory shipments XXX in and of basis you you shipment QX? flipped quarter, levels? target are we have that and right customers where pipeline of account extent major of points have for the your QX you visibility inventory million in do that maybe re-establishing from think kind you What between Do kind experiencing to retail - gap widened into $X XXX, the It the now. consumption you're timing destocking if

Ronald Lombardi

a Okay, so I guess questions were number of in there.

of First, QX a versus QX. recognizing shift to as with sales couple sales had consumption It's the compare the for Fleet me in start consumption we in third differences let last just you tough quarter noted the sales quarters. just Fleet because

at a bit QX. actually disconnect together QX So, beginning two looked in between into the late and quarters we the we saw and actually two of

sales the had at our quarter. we we though at level impacted over highest million, in inventory even by third the So, were destocking XXX of in ever quarter retailers

have have seen the quarter combination we impact. of and performance Again we So, the if the an better might third focus business that two quarters, we momentum. have even level to back the across didn't consumption, go continues to on great

the outlook, quarter In rates why we the we slowdown terms saw January, a prepared one of remarks, order updated with it, which in said year getting insight earlier continued in to and half second of our in is full into it December into go. we

a a little getting are going we there. driver top that a and reducing what going fourth help the they retailers to So, just them. challenge have and is line their bottom-line growth store is can an for out it one growth, growth and of them ultimately the we the of it's expectation, They've drive into But, got of pull of same bit performance realize inventory quarter. few to levers

So, it the until environment changes. there that we expect will continue out continue to retailer

bit think about of I point, mentioned share all been it focus really we it as building and consumers, flows, is been as can a and for our our it's average long a in it's out do finished on how our on it control that's points. winning A earlier, brands, two As, little with Jon. a growing much happening just adds we but about half time,

Jon Andersen

that 'XX fiscal - pull the any, in if but or to may of pull in around rate? if to quarter, - you you or offset Joe's is historical those out help other you of kind if able to maybe question logistics, you lever those that? can Okay absorb of feel have discussions some be can like a to adjustments with are look accommodate you incremental the coming some there fourth margin that not what back more costs Is pricing there retailers? Are you get a areas you can and back and other to levers, make

Ronald Lombardi

sit us we of that We of to for don't freight are freight logistic us the are XPL pop-up the these waiting actually resources efforts manages Sure, provider our continuing the But, and them. better to for and right, working of part with we one things, we've things problems augmented help is who to around always side things. in on for work react to warehouse it. some side on on work bringing in negotiating additional costs logistics the by overtime and

second we but about lot. don't The talk a it is,

a is, as margins innovation come that are opportunities and ahead opportunity and come it's have term. takes gives it's importantly We change products It constantly refined plan terms environment And doesn't a two a constantly years price long have we us chain, supply for But from really but that try improvement the on in of in another well a any there fact The gross through us, as to are we to working to a on focusing think tough they've here more of mean as we price, already cost new improvement their long long to P&L. increases. time, matter address to Many monitoring. something our looked OTC in address against. push retailers execute we're about make margin of then us more as that or it.

at Jon issues, are on term. we this there's it many like the to us and long of different focused over for lots work So, ways

Jon Andersen

digit are the Fleet simply - aggregate that mid Okay, kind consumption in US the the to was your consistent Fleet and US International of for quarter and of look function business the as the of quoted? and shipments business kind what with in for QX you this you single a expectations Was of in portion on the changes Fleet, were beyond?

Christine Sacco

it's Yeah Chris. Jon,

about so business in Fleet to business up, there has Fleet for for is but private we high business. a which up sale, that was as period business obviously This down right. comp QX, distributor comp US nature did tough and the in So with, tough but International begin been putting the is last not that out the some the as is yes, business see of for it destocking the talking are consumption, the

Jon Andersen

thoughts be leverage of defined you last and for Where perspective, going on your do cash thanks. one a kind capacity, me. forward M&A to I by and end expect from guess use kind bank Okay, of of

Christine Sacco

more million we'll about savings, forward. continue debt on as in Jon, our pay-down our we'll incremental use expectations cash look to And, talked with towards evaluate to debt free of we pay-down. the to cash so the with about $XXX of this for that cash talked of year Yeah uses we going flow or year-to-date continue that tax the QX year, XXX

again feel As f we might times come the going leverage, into debt head to five slightly our as continue our to 'XX. think well down fiscal above about but, positioned pay in we and we

Jon Andersen

Okay, thank you.

Operator

with Market. question comes Capital next of Keybanc line from Our Gere the Jason

is line open. now Your

Jason Gere

Okay, could destocking, if talk mass some out thanks and may go you at I which you you parcel just have not not historical the but you And, could experience the good you drug? related and context morning. shipment talk the what's that consumption obviously start wondering start we typically, within magnitude Can if of where kind to pressures? seeing I of to in see narrow. time the seen, May be same this back first some question, you on you guess are just and of destocking this be their just may to been be might past turnaround trying versus between when can like- bit the looking channels the before was spend name, more of put to you about gap be to a some by

Ronald Lombardi

Jason. morning, Good

single first impact, most in seen spikes get seen drip kind quarter, for didn't for a to of this that with been has look a now. we've and giant you I happening last years slow fiscal quite back four out a expect to We've the the concentrated of we might the a XXXX. little over and when if go even bit, while there, impact question first years Your this

lots bit seems of is one in in a you quarters one happens in of over different little drip couple ways, getting concentrated A know up it slow more be us a of we've between, that there what to a this to back is see and So, quarter. seen these then is in concentrated quarters. historically leash, normal couple a the see concentrated And, kind patterns we in-between now the go order here. events. of in can what we of It

the first of that's So, part it,.

terms in of bit we the really In of across Drug a concentrated they channels, it kinds channels, more seeing mass, as are in all to business different objectives. get caught up

Jason Gere

because was of I now of question, to just And, Actually, on mean I within guess I my of didn't see just of in ask a my good was seeing, losing you here. exposure the obviously move what high. I to cost, so going out me kind flew in lost the curious just with much you this quarter, the I thing that actually you're was do I the, is December wondering, am train thought train have quarter kind thought. I into One let next really that, but just of pickup curbing category. that all-time

for March, on again how out of consumption wondering that kind shipment kind what that expectations are and your of outgrowth Just plays the versus there? into the

Ronald Lombardi

reminder to impacted a like near cost as used be. our first by business concentrated, code nowhere is Sure, flu or it

really portfolio, of category. X% the code flu the to being first kind cost the It's into our close comment. tied of are We

flu cost that code The not component of really second us. index is, impacts type of every

year, portfolio [indiscernible]. actually XXX% number better of at X% last the look but up is cost which with down of influences actually flu and is that in-depth up it our aligned hit you concentrated If around and flu is core accepted the almost

that. also we who sore may have flu in closer general, are tied but into throat Now, a people have

helpful it that a someone year. have doesn't to We nice year us, So, the any really on when is meaningful although expecting didn't our business and the see needle standpoint. move this impact it although it's it's our we the business like on any for index impact meaningful last not was being year business, are on to up bad

Jason Gere

Okay, remembered train and from thoughts I of my before.

the where going know bit privately, that's online destocking relate you structural the seeing the we if online that's months, on years there about really but anything buy clients heard think the you managing you just to X-X just there last why issue. is in get five about to is little context out trying not relates wondering Just some related or just have inventories an are talk of be provide last anything a that into and some there's bit there those about I private I'm was But, I rumors retailers to kind wondering if know more know little with I'm of more issue or how or trends and these we've you other can over OTC. could doesn't the said destocking within been Hydralyte to people you're that starting Thanks. de-stock to that facing? label, the

Ronald Lombardi

Sure.

other These comment can other I we the be in specific compete store. from may spaces only our that categories the hearing in to comments of on versus what Now, the you the part and in store. are States CPG

that like You wake parts up, sections be base to the somebody your and to other be online the store again household product. online other may to by shoppers doesn't for Right, of sick, get are in for going immediate and our business the us continue they I'll retail. of is back impacted to store, generally because need know the going general information to but go

and to online. result we shoppers in moving offering don't we the then there. our brick a wall by; of And from of impacted terms are not being feel is is destocking skew, So, consistent out

a We are lot distribution. seeing not of

to if shifting those winning. to of factors. by impact today's spec, Again, at situation, competitive we so we're an seeing not are are being a core business, slide We go our that impacted, in not look you back

branded, a our business. there other growing our as certainly private our share brand category, where are are and growing labeled the competitors we grow and is in losing We our build both branded the and as result share categories successfully

Jason Gere

and be sales one was this is in Okay one. was warehousing this the last that guess, in one will of shall dollars, bit squeezing back about percentage it am this offset in might I I I pricing the and think Is I little longer the fourth know, A&P You up in the a issues, the expectation not percentage benefits, bit areas quarter just that kind be in thinking term little and quarter quarter of higher term? one the there fourth just be then of of were the any near of third actually about that thinking will lean to lighter we you in on been about how there there on that and went a going saw shift sales the Was is quarter. prior think more? questions some an A&P it's you the, down option?

Christine Sacco

guess Yeah Chris. the turn this and around term the it I'll is in view. near for term longer adjust quarter Jason, the I

had EPS heard XXX. it longer QX, ability You I were pressure almost we've in-line expecting like varying the talked think May million for on we see margin $XX We we it, exactly based expectations. year at and Ron I we to as calling continued comment how look programs you and A&P the We talked right. QX, growth, and in so in you that about about QX on spent margin with can say on guided our quarter be dollars, spend for was A&P persisting that's the A&P, and about term. so, our would QX,

Ronald Lombardi

getting or the A&P to investment slide, that's, back increasing XX% term sales we're its to and XX% strategy behind our measured our brands. we've sales from that Jason, Again, and results discipline, to our in using it's Yes, is on in last approach And, reluctant taken referring in it. return six again five to nearly our years. over continue long

the if at and it, or investment of change the I is code tax from already other, the take results opportunity prepared that in and to a made my the see, whether going to some fantastic the flow the to we increase we cash comment The take tax that forward. look our we can have windfall remarks profile increase change in to some of options financial going pre-cash going add further and are flow to

our committed 'XX on you we give term have invest FX outlook, continue to long block we brain So, are some know we'll on we'll evaluate that comments and building. to that. when But,

Jason Gere

thank great, you guys. Okay,

Operator

comes the Davidson. with Weiser Our Bolton Linda next from D.A. question of line

Your line is open. now

Linda Bolton Weiser

be on terms headwinds, going long-term is may that up, and going the if So, overstating but and just world growth need me secular do to the from on really secular Hi, of the or inventory the Mortars a what brick product that in has rethink so secular would past thing fully well with the inventory penetrated companies that on in a mortar may be X% inventory very it to of retail in first the to just I e-commerce Because more world? a a very X% XX issue, to these with you X% that's wonder your and the shift by organic level to it's things say seems little to hold Bricks consumer and this bit. e-commerce reductions issue and target. an consumptions retailers, is some it

you're something rate? that in may So, thought you long on terms just of targeted very giving be growth comment can term the is to, that some

Ronald Lombardi

of versus of again sales was online and will expect CPG our an stays a Yeah, term component a move very the there shift categories there's continue big big Linda at is need verses are right. long the we others. end to immediate other think brick we companies, not to last starts day, the our that year, that stays over it different growing, consumers for us the but mortar, so It big X% we for seeing verses

reduce to but know, we it's away we brick more and and about online. because think efficient are mortar having them migrating side of that. to diapers like than other are dynamic you in bit inventory their Right, today, shaving more this having seeing a better is their things shift, at reductions in big that term inventories to that ways managing we than So, is a different and inventory what business the from categories sit here them from becoming rather evaluate we'll long as is continue

So, good that. to about for now, we continue feel

Linda Bolton Weiser

industry the that drivers. there's seems truck, rates? a I know, big I'm regard inflation you been just analysts you trucking shortage trucking other work experienced my incredibly recession worker year-over-year going and what in for going a is is to there's changes It's with the when on other on things in increase that, been front, rates. to cost yesterday in of lot an investment to hearing requirements that sand trucking my of really fXX% the there. them, one thing Okay, the pier And, that some companies reported talk under of of And, there's during listening and with then I'm those industry that the about

of this in it dissipate that's to or could not term can two. issue, going seems, quarter more So, a a something just be longer

about price just is know, wondering, the things again that talking So, the increase to you to these macro warmer retailers. get you kind going from the I'm world the and of way sometimes

So, can kind to think inflation And, margin are flat normally to of what area do, about you do that do can something that like if your is think pressures? you on outline you that? try maintain 'XX, sights we the you you operating laying given

Ronald Lombardi

support about terms Yeah, specific talk we decisions of are could so talking right, at and firms capacity your plenty quarter That we May that in we call, ever first to ensure 'XX, that needs the I'm of we'll fright trucking the to service have of for meet December in expand ended in largest with. our the but, the questions on working to and made all into sales. our quarter September that

our that with is cost the logistics you based XPL in our in were we both driver warehousing know decisions and a pressure provider. on big logistics for made So, and partnership

broad effectives. margin know, is have have described long and and work the So, backwards service you you a to then, I for then the manage again manage, earlier as our we been growth cost that plan know, reaching in improvement we and place And job start with long a that number Right, term. and to our do react and happen and over happen, P&L things price is that's the proactive include the things that to long time, be manage manage to job, this term of to for things other the and the try Linda.

Linda Bolton Weiser

if Okay, tax give a packs reforms? the going you and but this I forward that normalized did forward a up, didn't on should sorry, including basis P&L go then we use just catch rate

Christine Sacco

at in to rate impact about, we Sure talk to was current we about put it rates, so cash a XX.X% point basis, Linda, XX forward negligible reduction the QX and normalized XX%. effective talk the quarter XX our in better, going again about

Linda Bolton Weiser

Thank you.

Operator

Our next question comes from Sidoti. the line of with Frank Camma

Your open. line now is

Frank Camma

obviously dollars things, spending that I I Thanks for a at A commercial mixed Eve Summer's mean know Good down, seems about percentage look more couple here; perspective? mean quick you on acquisition, like Fleet for think me I more are guys. is is A&P, What the the example. morning quarter-quarter? But, you can't what you to this of from how do Fleet is questions. than

about and So case? that little is the I in wonder if you talk that fact bit, a can whether

Ronald Lombardi

can and the Yes, for has that under Summer's so company weekends. and ownership Eve history bit doing day be a we promotions of Valentine's the did around long example promotional, more this

growth So, bit its higher we have. that other a different a bit our more, than brands

other especially some that would core we expect the have a we to higher brands to compared the core for So, of brands. of support that business have A&P smaller level

Frank Camma

operational can uncovered I integrated, about through may in last a can the talk whatever supply and it second, a Fleet for on but contracts have talk about while bit to takes synergies fully for staying the you it's clearly that seems little to and would the revise and Okay, etcetera, you know year? a you be opportunities

Ronald Lombardi

year, to point. last an we stand consolidated the over from so cash ordered their Sure, business

the our their So, And, in moved the consolidated us products functions and now to our the room facility organizations give Louis. free St. that consolidated chain their the free includes view and one eliminated make products the we legacy you on to Prestige continue finished and order we as as updates camp here back mentioned, we've low of other longer time, to warehouse them retailers into and the York New quarters. it we have progress factory do just have moved there, and term And opportunities work on that takes sell supply then overtime. will we as as

term it's in long So, affect a supply you project OTC know, chain. changes to

Frank Camma

the of Can about one-time a Okay, related life slow higher pretty you, the my question related is item? to to CapEx, is And, last you seen, could it's sort talk Fleet? that that is that? much

Christine Sacco

Sure, it's to primarily Fleet. related

we Your initial in cost of related. million were QX timing for our forecast, so in little with expectations late just is about line CapEx, the XX

Frank Camma

Okay.

go ahead. Sorry

Ronald Lombardi

dollars you talking probably year know And, so might ever outlook a seen I initial the plus you spending $XX $XX on XX dollars. capital, and was one couple or have revenue. revenue about you million in [indiscernible] in so billion We're million think or million the to quarter a for it's of

Frank Camma

guys. thanks alright, Great,

Operator

with Our J.P. Instructions] Casella line [Operator Morgan. Carla comes the question from next of

Your line open. now is

Carla Casella

by one us give Hi, and international? segmenting your question on just rates Can you those organic growth. US

Christine Sacco

talk, we the was this year-to-date than digits, the much as expect was about business quarter, consistent organic Yeah, in destocking with a little X% X.X%, we business other Household our household discussed our our over X% pretty with our North of as is care around so pro consistent Australia. as line OTC growth up part the much actually down in down for performance And, single the breakdown, often forma anchored expectations. high is American strong our our segment our which household almost performance declining with to and so X% in up which International expectations be

Ronald Lombardi

term the US for high digit, kind profile down X.X International percent, X%, of that have those plus we In Household consistent business is each would of buckets. with expectations long growing, single the

the So, be is our which that in out plus to comes percent, of outlook. X.X long-term right middle

aligned out not expect average, it's long-term over we with the might So Carla. what on

Carla Casella

Okay, freight of to you starting great. And US anything see that issue internationally? are that then is purely side, a on the or

Ronald Lombardi

US. It's exclusively

Carla Casella

you. Thank Okay, great.

Operator

the closing to call further I'm for in not company this questions time. back any queue turn remarks. showing at I'd

Ronald Lombardi

for everybody us day. I'd like have a to good thank today joining and

Operator

great your a gentlemen, Everyone thank and today's This conference. participation Ladies you the day. in have may now and disconnect. for you concludes program

Prestige Consumer Healthcare (PBH) 1 Feb 182018 Q3 Earnings call transcript