PBH - Earnings call transcript Q4 2022 | Prestige Consumer Healthcare Inc.

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Operator

Good day ladies and gentlemen, thank you for standing by. And welcome to the Prestige Consumer Healthcare, Inc. Fourth Quarter and Fiscal Year 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question and answer session. now host, hand of Phil and would to conference Investor I Treasurer. speaker your Terpolilli, Instructions] like the to over Relations [Operator Vice President ahead go Please sir.

Phil Terpolilli

you for and to operator thank joining Thanks today. everyone

in call, page detailed call. slide CEO; from then the information our to me complete important environment consideration clicking Prestige included the which to are the potential measures. the which with best and that attributes and contained the XXXX are nearest Harbor COVID-XX today's business in heightened questions On release can Lombardi, make President, information Remember, are accompanies presentation as slide and our analysts. forecasted call based have risk risks Reconciliations of to uncertainties, today's to of the These on accompanies today's around on available success, disclosure will be at measures statements Safe accessed management review presentation. a results, year the financial the and of and earnings slide financial the impact could various today's uncertainty we'll There's review -- outlook, two are any presentation Sacco, the On the which presentation. review forward-looking On Christine remains Investors in then change call, impacts. of geopolitical call, factors enable contemplate the by results date. offer on and and means XXXX due and numerous This our time on and estimate of it full continue Ron visiting GAAP link take presentation webcast prestigeconsumerhealthcare.com, Chairman, to today and today's fiscal some today's non-GAAP business CFO. the the includes

cautionary Ron company risk our concerning are and our Lombardi. it I'll information and CEO, recent now XX-K. factors most most over SEC to Ron? recent available filings on hand statements Additional

Ron Lombardi

Phil. Thanks

five. slide begin Let's on

with of experienced our found for pleased exceeded and that the very another sales backdrop expectations Revenue are as results opportunities, double-digit grew full challenging the that versus of billion a XX% our environment. fiscal quarter was We the QX XX prior year continuous growth. macro with year, we even $X.XXX

impressive business base of demand strong majority were our trends building. aided across long-term our the Our consumer portfolio, brand and by

experienced and For broad Dramamine Clear the international based America. for year, growth North while our in demand Hydralyte segment Eyes its led brand, segment robust

Our revenues translated into profitability. strong

EPS prior over both of For flow the and of million, over free generated year. $XXX full the versus double-digits year, cash we $X up

we we with capital, flow. great And portfolio. Consumer of Lastly, TheraTears as to this disciplined fiscal Xst, the fully XXXX, continue and our brand, in we reduce leverage. now brands strong allocators contributing view always, were to this capital integrated cash strategic with acquisition, use a Akorn as during On we which even July Health acquired of

Now, let's turn to slide six.

XXXX evolution executing success fiscal the is and business. our strategy record performance Our of by our enabled long-term

positioned acquired degrees brands, of at as We've leading First, efficient balanced we've and operating TheraTears, gradually brands, our poorly non-strategic business. divesting Summer's cleaning of of stable our while Eve brands. such with capital successfully well-positioned last continually the several we've lower years, leverage. such and deployment In as household enhanced this

how partners. for By our stand wins to retail in across using build I'll long-term growth out. level in brand ability XXXX. some drive In X.X categories, back of XXXX continues our on. often And to you fact, our acquisition to brands examples of growth out We GFK strategies at times, are of we finished lowest asked since fiscal lay enabled we've marketing strategies our certain different? leverage later the share get numerous

ground these long-term for summary, consistent have in So, efforts laid growth.

This brands. impressive us portfolio leaves portfolio attributes, the by an and execute positioning and strong shown and to business Our momentum underpinned seven. financial on us a and slide with strategy a and evolution of has ability our conviction well-positioned success gives leading

fiscal note time strategy consistent we shown a message they with most three the of a from has hearing continues the our year on page. Our to that discipline executing and often this on creation success pride value. resulted is we over us meet recent this in just investors, business example that our resilient When value strategy ability deliver ourselves pillar proven execute to

some marketing examples First, this into strategies later. leading of our brands. of to spend proven support use we our time portfolio We'll digging

well as the leverages the points ability model efficiently financial flows strategic This the growth resurgences years. grown. organic leading our Second, robust, to as multiyear disciplined of use through the flow. our is two three annual compound is over had to This financial last capital profile rate despite these creation. and repeatable deployment. COVID-XX as we've thanks We've and asset-light pillars, supply operate, to this The our in cash long-term is long-term performance growth. enable effectively earnings By excess successful performance. success backdrop chain clear enhance we model third, continue X% our we value to for prior result cash double-digit inflation. And includes the business execution and The to X%, free variance, a growth target of and of executing of in of challenges, our

distinct the in the more for growth to shows Slide next the section, Prestige's of of turn discussed. let's benefits just that, the evolution discuss nine portfolio investing with advantages So detail. and and

short-term With successful able we left the diversity like the scaled platforms, multiple of page and health, and and we brands the are impact opportunities First, the eye is any the across of category at category the diverse many start of such saw COVID-XX. of of mute changes, to as women's portfolio nimble on categories, the development of GI. side a in identifying care, portfolio

brand leadership, a utilizing shows With insights from categories number byproduct sub-segments many about are on sales platforms. of building think and are our of position these Second, we as for able to the of right one for our retailers. brands, coming the consumer leading of within page two-thirds a which from brands, focused

to various see strategies marketing XX, Turning slide strong point. by you the portfolio the facilitated starting

are driving and identified from focused of category is around executed that numerous growth, specific these opportunities each building strategy growth we are to long-term each long-term goal across success end of the on is channels of Our stewards. The are consumer insights to actions based brand. each brand categories which

efforts to XX through with insights. to slide turn Let's starts begin these each of walking It consumer more all detail. in

compete two examples are they expand to from shares of about their learned insights somatic The we Hydralyte, page of further that and leading their think been the that On consumers and the Even our with able enabled Dramamine. big sales Hydralyte brands, that categories, they've of consumer oral majority consumer in. and solutions gradually Hydralyte broadly, expanded more following solve rehydration leveraged penetration, sickness. household result providing like points rehydrating awareness. for up than fiscal as occasions, usage The since a XXXX. exercise, by these raise investing is for nearly this that two and in expanding just to solution We've messaging additional categories

share growth. we're drive consumers they Dramamine, by over and led want nausea time sickness also that category. two and offerings. introducing the expansion For to leveraging are motion to its nausea, examples this This long-term We sickness has These consumer don't they from just expanded avoid into we've and solution to insights motion but want provided drowsy. to non-drowsy consumer learned a become successful helped

turn XX. Now to slide let's

nimble. for strategy building factor We continuously brand is in success adjusts strategy that agile needs This during in being execute is Another particularly an this marketing consumer noticeable fluid our real-time. meet COVID-XX to had product numerous needs consumer to launches designed think hygiene. changes. related Summer's they new environment Eve and other and example about marketing One is macro where we've as

rapidly with needs around is of their efforts home Summer's Fragrance-free COVID-XX. behaviors. for of COVID-XX, connect daily they workouts. evolve included home at focusing treating during W, Amber Summer's height Eve that During A Sensitive, included and Eve, active second recently, marketing as message the example the it's focused where on More this we products Compound Night, products consumers' warts

strength consumers As the XX. helps of remind Compound of fiscal company's of various is visit, that In that, to doctor's office campaign brands our treating in to succeed at summary, to our XXXX, Science alternatives consumers allows of invested brand agility benefits for which we environments. around Touch with look in home each turn our a W. slide a let's building With in

our to and the to product is with to important ability our that success investments channels align element are offerings marketing consumers. Another

As sales growth, higher driving various early channels effective in brick-and-mortar. most have our and is where recent grown the in share following quickly is have base user with solid prominence driven to off over consistent and of experience market campaigns enabling a investments time, been digital consumers profit performance across we've leading invested higher example Multi-year e-commerce, channels. we've investments expand approaching channel a channels. often even being brands management, than there The continues for our COVID-XX to result is across sales. and our in profile highlight The XX%

channels, So, consumers their we investing are our profile the where in margin channel and shopping, as in of summary, we habits are are shopping stability across time. evolve confident we remain over well-distributed consumers

Innovation need, its Innovation treatments. needs like brand on nighttime can example, be ways. Now, concepts that form solving We Hangover, example products found visit. We where be competing a is not of XX Innovation part we Compounds solve a Guard in with development with its innovation. this is unmet a ensure in technology can superior be substitute NitroFreeze with superior as Innovation experience. comfortable to Goody's DenTek guards. relief do through to let's to building. of be freezing on-the-go multi-year discuss an consumer a elevated continues to slide turn with focused design that's to Prestige's consumer key operate pipeline OTC goal product the Ultimate also multiple in of taste. An consumers. an efficacious to great continue dental technology, powder also W and to bringing match doctor's pain can other

Spa, great help Nausea have long products, and Three fiscal planned introductions we year categories. XXXX. innovation So, of and Clear another expand Allergy adjacent Summer's Eve our Eyes of have a Chewables, Dramamine we into for brands history

into expands For Summer's luxurious spa brand that seek. line self-care consumers the Eve, the

helps treat ginger format. strength drowsy outdoor indoor the a Clear great is and prescription Dramamine, Eyes Nausea new Chewable a relief product without drop For from getting once-a-day designed consumers nausea tasting Allergy for and allergies.

investments, strategies, a page innovation success. a about both channel for and Clear also number excited play and marketing valuable insights, each additional that summary, agile our the launches on eyecare role Eyes we're In TheraTears. We marketing, our in shown have of consumer in

our XX, one positions page be share to growth. the result number can to category market and we on leading us focused allow what is see Turning for that brands,

to which wide continue these grows brands of As forward takeaway brands. you We and lead Chris can as hold our by many brands to their half we look categories them I'll Consumers it's page they nearly one model number care continue continuing one brand see learning to detail. portfolio of to Over building. emphasize This is With on of their portfolio walk and and the today, there's building, brands more coincidence. a all largest having have our a the from benefits XX, a a of If leading extends of our of right proud brand aspects our our through focus brands turn to not are margin. market of share. successes in health of greater of than on business health that, over marketing prioritize the seek financial to it long-term the XX% trusted and about share

Christine Sacco

and that Thanks drive XXXX financial by talk then I'll our capital reviewing quarter fourth and fiscal attributes profile our Ron. about morning results, everyone. allocation our optionality. financial start business resulting Good

Hydralyte up segment to XX% organically of growth basis North with Luden trends year. XX.X% begin were $XXX.X experienced where By year, our brand. The Let's the trends favorable categories in excluding sales and segment, diluted in fiscal expectations impacted America X% driver. especially, with million XX%. X.X% in categories the results. turn after the margins with higher many share International and of effects revenue of the sales per QX consumer consistent largest Adjusted for previously sales and performance our quarter and Adjusted was particularly Chloraseptic. XXXX approximately versus in the XX organic increased from COVID-XX, quarter EBITDA year prior strong earnings up the approximately dermatological, cough benefited and by increased segment's versus were long-term for in for prior approximately $X.XX, QX, the QX fourth on XX% largest being revenues slide foreign The favorable the cold, remained EBITDA record prior currency. mid-XX%s. versus GI, and we both to The increased

and year XXXX for the year Let's fiscal consolidated to detail results increased turn on Revenues prior the full full for XX slide basis. for more XX.X% around versus XX.X% organic the year. an

as portfolio certain COVID-impacted with such Our accelerated travel. broad this in along performance categories enabled and diverse result, an

for consumption year higher We prior was e-commerce continued occurred XXXX. the margin further slightly throughout that XX.X% of growth consistent year, of the XX% with channel purchasing company as in from long-term progressed. fiscal down we experienced our sharply year, heightened gross the expectations, adjusted inflationary as shift for building trend pressures the online the upon double-digit Total the year in our

fiscal at cost pressures challenges that persist. and are Looking are others XXXX, we supply to and likely experiencing

We have pricing our these of and the continue actions to headwinds. to offset amount institute portfolio across inflationary dollar

increases. year a $XX.X% sales. year and XX% the Advertising at under QX dynamic with for year average margin expected gross estimated Although the to over dollar phasing to stronger and anticipate the be leverage fiscal fiscal just due the frequently, as XXXX cost in full came changing we of for higher of currently than of full MARKETING XX%, expected full with

For fiscal of we'd of fiscal sales sales. an in A&M G&A rate anticipate XXXX. X.X% XX% over were expenses just XXXX, of Adjusted

XXXX, G&A year. anticipate the be fiscal $X.XX XX% prior fiscal For for variable reduction XXXX, the XX% prior and grew the offset and interest similar dollars sales interest Below at expense this associated interest approximately debt. effective share line year Higher rate current we by Adjusted tax lower around is similar with to rate anticipate we'd around to diluted per expense expected debt full as higher year, expense a of of drove over earnings X% the of year for sales. approximate versus growth. to

Now, to free flow cash in flow. adjusted QX, full million. XX in $XX discuss cash slide let's million cash a record flow, we In which turn to resulted generated year of free $XXX.X

at capital cash around a It's the at and we X.X our flow ample Akorn, flexibility our XXXX. in have with We broadly, with to XXXX. disciplined at time lower years environment. be each recent current our a roughly navigate have reduced billion. have flexible leverage strategic prepayment Across our two-thirds to us ratio rates, we anticipate capacity strong within our outstanding we in we Heading our continues three times positioned the actions leverage slightly last, of to acquisition our into as flow debt note fiscal times priorities until no being allocation to year leverage in half and of levels More review attractive volatile over to debt anticipate with important maturities a extended like debt, objectives. of continue below have prior our I'll pursuing we've $X.X fiscal be current available We operating while opportunistically cash gradually free fixed to said, well acquisitions, expand. That do XXXX, financial for moment. of still variable remainder leverage generation. and maintaining tranche And end

XX. let's Now, slide turn to

financial just can the enable our you profile that performance Here and see many I attributes flow resulting leading the discussed. free cash of

revenue of low expenditures to X% capital externally of of X% vast sales where manufactured, the model, majority annually. asset-light is in Our results

strong the categories creates highly participate characteristics and OTC the by barriers we margins, to that the importance driven self-care their in, to products entry. have high consumer nature regulated of Our of

from We acquisitions in the meaningful tax cash have that tax rate a high benefits past teens. result in

of results remain margin. leading us focused also company free flow, conversion saving XXX%. cash industry resulting efforts a of cash clear. We in mid-XXs EBITDA XXXX, with continuous free is record our this The profitability a help best-in-class We maintain approximately in flow generate as that fiscal cost our on model

our capital slide XXXX, priorities. to discuss deployment Turning let's

concentrate delivering. investing our have around we the priorities, efforts the We to in continue and two first business

growth of capital. seek pursue brands financially adds attractive prospects, We also strategically are have fit of that in long-term and cost shareholder value. ROIC with M&A our operationally, excess that opportunistic We

free this We $XX to inhibiting annual way also can value without M&A. offsetting cash brand invest fee ability estimated authorization pursue share our of by million a an the portion shareholder enhance we value in using through share see announced flow like repurchases, We to building, incremental small our yesterday. or future add long-term lever, as dilution,

let's turn to XX. slide Now,

revenue, strategy we've pure execution through our X% revenue to able million consumer recently, EPS annually able play and with and flow More growth. healthcare and transformation even mid-teens generate of cash we've performance, the base, and approximate solid from cash growth approximate earnings and larger growth free base, at we've growth. cashflow flow Starting to earnings, been been long-term off a X% deliver company. revenue growth revenue $XXX Looking financial and revenue an delivered our over to strong

model enabled efficient sheet deliver growth, balance has time has while this over our proven period. value Our use of helped this

it back turn Ron. I'll to Now,

Ron Lombardi

Thanks Chris.

ESG Let's things both evolving few continue here. to wide an where these we important many components and and take in investor XX. range pride do of slide questions. the rock a be its are already various topic we a continue We on and get of shown

key saves clinic. a are self-care treatment we visit or First, hospital consumers versus money a of a to real enabler that consumer

high We with to of they Second, well, a only our that through our organization ensuring not are own conduct, standard as our higher our hold own code standards. suppliers and missions aligned but values.

we Giving back. can highly than getting with engaged in which employees chain. the more supply support encourage and sites throughout the consumer the have of to some impact ways think drugs, year. throughout our to regulated support. Fourth, environmental Even continue Third, about Days communities encourage all be We modify, to environmental our challenging OTC to products reduce that community local of remain

the being updating as a in for we to stakeholders the take and company, ESG future. we of in of look pride forward our mindful us, each something Fortunately factors is

to Now, slide let's turn XX.

and around visibility put questions costs shifting pressure consumer and input consumer each have we demand. ahead, look chain investors behaviors, challenges, which on around we of As inflation, recognize supply

to as the believe successfully each help our our have themes, attributes ability major these years. we we business navigate two past across Looking over

limit over products Our the of bottleneck of slowdown. manufacturers the magnitude to avoid are trusted the logistics source international others. and ability our from brands ability individual which and diverse, and XX% U.S. the us costly from in impacting gives categories impact to which supply We the us gives Canada, any based of that’s

also the to products supply are here. positioning, execute Last, ability confident helping our see. on to with successfully are at trends in the With many leading gives shown supply retail, in even further the inflationary dual-sourced shares our a pricing instances, challenges currently broad us We to tight chain our key to ability we we enhancing market in grow offset this continue environment.

Let's slide turn XXXX. discuss to now XX financial for fiscal to the outlook

XXXX, we million, of anticipate X% of with fiscal COVID-impacted prior which organic For X% reorder approximately our million to X%, growth be X% revenues are to revenue $XXX consistent revenue unusual an long-term target. in QX to year comparison timing retailer $XXX to to faces anticipated categories. growth including certain

and profits, reduction oil-related the XXXX that $X.XX includes similar the the Regarding fiscal costs. XXXX. increases outlook fiscal to for thanks and dollars fast-changing rise for our additional anticipate We sales, disciplined includes We price $X.XX headwinds operating EPS our and activities. P&L between EBITDA to to of recent cost inflation still selling of reflects profit grow management in rate to anticipate

our help Our flow and will benefits the cost by growth, drive higher but the management expected partially rates. interest expected are free be offset disciplined earnings to cash of

EPS and QX, $X.XX. is expected between to For be $X.XX

through as around cash its deployment creation. more earlier. slide be value or we've underpin XX long-term to long-term we'll anticipated With our our outlined Lastly, that, believe $XXX be Free to that disciplined Chris turn attributes Today, we great discuss is flow generation. we million and year of another walked business let's cash anticipate success. to to continue

provide play a consumer a platforms pure starting healthcare our as business, brands diverse great point. First, and

and brand a to proven grows building us categories enables strategy this leverage byproduct, a brands. our Second, as that

superior and And have long-term. we profile flow to model Third, finally, that's financial the increasing consistent continues scalable. generated cash a the over be

our to that creation a attributes. business are in. model that continue We It's driving and and its existing we at capital right value deploying that confidence have resources superior the we efficient is reinforces playbook have our

financially. of the to topline, let's believe X% turn wrap-up our to portfolio that drivers long-term on XXXX. fiscal We So, again what anticipating supports mean organic X% and with growth and these in slide XX are

debt, this on But profit our Operator? X%. We the us up cash identify EPS over there's to expense, X% we our that, baseline. of XX we leading last optionality questions. it interest upside With pay we'll this open growth, for well. help of this Adding generate drive to is we've This growth the and course, to organic that industry expect capital which cash and as long-term algorithm enables expect down revenue demonstrated enhance reduce incremental as flow will to deployment to years. opportunities the certainly continue,

Operator

the And first Thank line with Parikh Oppenheimer. question coming you. our of from [Operator Rupesh Instructions]

open. is line Your

Rupesh Parikh

morning. Good and another Thanks strong questions my for taking on congrats quarter.

and organic with growth QX? out guess is on look think there the guidance, just number X% potential you you the missed I about risk any a if at that So, And then achieving specific any have did and upside the same I to potential drivers full but number? guys this, you then see to just two starting sales way for at give the see time, you may as the year,

Christine Sacco

specific million. is Rupesh, The me to morning. for was start out. excuse Chris, guide million $XXX Hey, sales $XXX QX I'll This

first quarter. Akorn at $XX for the You million think about can of

Rupesh Parikh

year then delivery? you I And X%, to full upside same the look see, sales and great. we at X% where potential see just Okay, guidance, you organic guess, time where at as to the the do that growth risks

Christine Sacco

Yes, is Chris. this Rupesh,

depending But they're the maybe and order in with a and patterns, of really our specifically. be chain, would we what are our not order just as sales. mix, supply I this patterns risk on say From can probably cough/cold that retailer their up or whether chain mix than that's So, from environment a reminder, XX% supply perspective, upside a perspective, could of an the anticipating. keep ordering, stronger right, retailers of under what magnitude ordering around potentially were

Ron Lombardi

here. Ron Rupesh, morning Good

to that. of a add couple to Just things

the the just call certainly everybody quarter. from an leave comp today quarter we've Last on in of concentration out odd here got as saw restaurants in first people the first first First, quarter, to is and a traveling. recovery the reminder homes COVID a of to year, as terms the their

So, -- an the quarter of odd comp was year. that first created in last

take you business it COVID started first XXXX for or of quarter XXXX, our XX%. fiscal to impact and up to first quarter If our over is $XX the things, before million outlook compare of the right quarter-to-quarter

So, as success we we head continue the the good into to momentum chain, XXXX, the inflation. the feel had The fiscal challenging supply including headwinds, and of business. environment, we've about navigating

So, lots of unknowns we as we head into business the year, it. well-positioned is but into we think as the head

Rupesh Parikh

Okay, business, front, on the you to just increase the great. of you pricing taking, can on you price maybe talk you don't about talk that magnitude Maybe your or are are want maybe if just price just share of elasticities expectations? there's anything seeing that the can the there your you're in level anything this at has in terms else of differed versus category? Is increases you point,

Christine Sacco

I'll maybe Rupesh, start. Yes,

a the next two-thirds in We this expect It to third. growth our quarter and year for two, well. the our of worth pricing contribute our four about growth to full fiscal XXXX as to -- volume add of year about point other was two-thirds and

Ron Lombardi

health. place and market, on tend consumers haven't any going looking a family's where be inflationary health when the we've people of doesn't look far money in when terms seen to It you're they're -- save for historically. care impact preferences seen impact In to products, like of elasticities your taking we expect care to what's their so

Rupesh Parikh

it pass along. I'll you. Thank great. Okay,

Ron Lombardi

Thank you, Rupesh.

Operator

the question from Jefferies. next coming Wissink our with line Stephanie is of And

open. is line Your

Stephanie Wissink

everyone. Hey

if questioning lingering you inventory. wondering as can give be the of to us still if on of of line traded mindful an digesting the kind need there's of to Rupesh's some Just you're through build? COVID we anything of effects and to be update And follow-up

Ron Lombardi

Yes.

say supply everybody the let inventory. would So, total, chain in I more would in involved

suppliers in I have Our general shopping and the like would tough Again, to more consumer retailers inventory like predict. been more demand, more. would inventory. We'd trends were like think in

it. be there could be that to a year, help. Back things general, that the of be in So, positive Rupesh's I think one questions, could next could

Stephanie Wissink

consumers your is of a second of backside innovation. my Spa. one examples are the driving that's you on Okay, think don't into about talk some you're kind And on Summer's more Can brand question a like want I how your helpful. finding for you into bigger adjacent you curious little logic, to I'm And bit self-care, about like just Eve brands of If from bigger to wellness, that if then thinking But permission discovery-rich thinking maybe as the about Summer's know pandemic of the Eve? innovation have more you're are exploratory, innovation we use leading go categories? TAM? deck, a

Ron Lombardi

Yes, so continuation start consumers for when kind is, two long-term, is trusted of the trends. which of thinking One looking care their a there's themselves. taking of brands, with they're about

about -- motion into expansion nausea. treating we talked has was So, consumers long Dramamine of a got a think sickness nausea. heritage sickness and It's Dramamine about motion as if it

more COVID, trusted into and leg of of adjacencies. and the another care thinking expanding ways about about heightened Eyes recent of they hygiene, we think gives with Clear evolving adjacencies, taking a from up and inherited themselves. consumers Allergies beginning is, expand really have trend and the a health second then how those into And that us example today, expand we as with So, as

again, the off that's around in view brands new So trend. steps their But marketplace. newer and it a trusted innovation products of into

So we're continue in going areas to to continue consumers. to invest those with connect to

Stephanie Wissink

helpful. All Very Thank right. you, Ron.

Ron Lombardi

Steph. you, Thank

Operator

Blair. lineup William next Jon our Anderson from with question And coming of the

line open. Your is

Jon Anderson

the to price how detail good that, much maybe I contribute rate provide Thanks more you for well, average categories see organic expect contributing one growth might I rate? to the the to the XXXX. on on guess, throughout Could addressed you any and had to this, X% around the organic X% growth guidance most morning, year, brands but which for everybody. And, have Christine, you Hey, the that you guidance as growth? question.

Ron Lombardi

both have both let we as really launched start are fiscal Eyes So And really, kind Clear other that momentum XXXX some we products allergies me addressing talked XXXX. it's me Clear brands had and XXXX, good which- particular, for the and that Eyes brands I TheraTears being which Eyes head into in new let in with and TheraTears. that in XXXXs. of saw Clear and about fiscal

GI Compound Canada Breeze, have to and group challenges. Dramamine, up Gaviscon well well chain some as platform then W and with Summer in Our which continues with for And Boudreaux's and do our have with well. did supply Paste done skin Dramamine Butt

some K international I our the the you'll and gets had course, for other of year. the year, Australia reported, particularly that mentioned to challenges launch of when that spa with in success that So chain Hydralyte. we largely the care in, business, flat But during products see was category and in long-term the due the and supply continued

which the more we is well into XXXX, really portfolio consumers. XXXX. of majority winning with And themes doing head feel of as our vast good are So is, the we expected same for

Christine Sacco

And fiscal just we follow-up the contributing just pricing then, two-thirds million growth for pricing, on Jon, for $XX, over about midpoint about $XX to at XXXX, talked question, your to next year. so the

Jon Anderson

you with you in in respect think, you I a bunch has think great. line brand? of described it Okay, more general, that or lies? internationally, developments of Hydralyte, major of the such extended years the I've slide you been I deck. Where weight room Ron, Hydralyte these contributor. that's you I businesses since the the particularly most have, had are Do distribution running a needs kind past stages are additional And are carrying international think mentioned think expanding states, left to as there. that the noticed, brand, target lot the states in the meet Because on see you? later mean, you for over of leads, strong to quarter, And guess, to, just strong a been been new but in this grower, I few

Ron Lombardi

we're It its regimen. And, celebrated anniversary. after vomiting No, getting beyond going into And hydration as have think started just in diarrhea. I long-term potential illness it's beginning of consumers thought XXth tapping its for thinking the about just their as health it just part Hydralyte. and about in roots, expanded from recovery its and slowly hydration, everyday

I household So, XX% had under on still today. our the penetration, think, site we is

acquisition getting the of to COVID adjacent opportunity of outside there, of start of couple of a ago, got on our with off we're there So we little the rights bit A that. expansion the lots years there. began but region going a into slower Australia, us

of room lots running So there.

Jon Anderson

in of of it Great. inflationary have little issue of bit kind any that or the label to with more was this Any that private not or point? at make asked, down going trade and guess, signs This Is in you're I increases price any an all reflecting not to a I wanted your is that environment. about categories? a question kind at concerned just pointed, seeing

Ron Lombardi

Yes.

trade proposition of space, are this the we Over down price shopping many haven't long-term, environment value economic all give inflationary, it's pause consumers in right, in a that driven, the those driven, whether across consumers lot of could too or decisions. to again, seen factors have their

where it go building I'll it's the of we're come the to little and to And products to sure the of that's bit again, brand it. something try consumer. to save a we not to first money. our new part proposition a the consumers work is, right. marketing what here first in second an that So offer different we're a do. willing day, part, company, make That's proposition to part That's area and better are And a back to every of

that So about efficacious make and we sure home. And differentiated new innovation and further that a tomorrow today, offer products, more better product role and connect we consumers to importance today. the plays of that point with drive to talked

Jon Anderson

have part On what kind To some of said, e-commerce. a it I a the percent maybe for I stores? your term rate high moderate, business? shifting And growth I term and positioned to of of longer for terms extent I've that guess, channel double you are of And there, e-commerce, has like here. yet time. year that COVID, company's your you're growth terms actually a moderated of longer if think digit see How dynamics, seems as for that what and we're it -- of back well the but in the hopefully, of more, sales, going get now consumers trying given, sense shop go happening channel? exiting what's for as sorry, in expectations do in take But you the Chris couple you seen got can another plan

Ron Lombardi

it start let with up. of Chris, comments. let couple me So I'll wrap And a

percent a number of less each of nearly our all, come down has total growth sales of than to, only First XX% gone our from because starting may have year, the but point X%.

to, here. of the e-commerce show So number they're and is any it's convenience on that to situation go that site broad very well big in looking they a off growth the to do that just But something available do. to we continue the continuing consumers e-commerce, offering are

I a consistent there pretty is profile channel prepared have Our is chooses it consumer us, those that's that's shop, strategy to choice in of be all across customer And around and talked remarks the about where channels. consistent for a today's simple. financial

the impact mass channels on And years consumers as negative grew no choose meaningfully as buy. where club we over there's waiting for those to based long-term. online And them ago, you were we're US in in back well. on go dollar XX to So and

we're there to because are wherever be the choosing future. and questions. of the something other the some in going to consumers it's go So will continue consumers Chris, invest switch behind to to

Christine Sacco

share. think I up continues brick that, I our guess, and our would add nicely. mortar Ron share Yes, to is only thing outpace online summed the I in that

multi still, despite we're digit it today. growth, So double continues of having years

Jon Anderson

the consumer the having forward. divesting I pharma of as prospects Thanks. the this other for you of last in or means to with bid we the you'd kind participate so on Or guess, that Unilever's much going Okay. be What And looking large available then M&A M&A interested in just change look for recently like question pharma, think one, divested. GSK, healthcare business, do failed in? and among structural at strategic

Ron Lombardi

Yes.

first big of really activity lot companies there's a many reminder interest. is, let make that get question, to this try lot to a of spend me all, tension, of of of look comment first on as So and lot your the big there's part which these out farmers a area, investments there's a consumer excited other there it's in And and to and CPG, arms frankly, attributes been years of can it's And here, and right. do we've proven of that financial attention be long-term segments right, businesses of to well stability a around quite the challenging as ability CAGR, we've here, XX over for positioned profiles long-term, talking business. of that environment, whether these about environment, grow well-positioned our years this last plus to three-year the the in in handful

of So before and cash and growth COVID flow is line through top XXXX solid double-digit EPS about growth. X% fiscal

So, a the and the for taking making and of years, strong going further we noise about the people have few think all we've I performance. draw that to opportunity been creation last is lot are to things notice value here finally our of to attention that highlight

been your how of in part ultimately CPG have now and us. activity, these M&A it big to and second players of on regions or their big focusing it's portfolios and for The terms is decades pharma relates opportunities question, focusing created for managing on

brands one many bought companies have pharma or big got PE them We CPG firms turn them from directly from from or either that just before.

and think So M&A. to disciplined it's opportunities to over us we for going smart provide continue the make to long-term,

Jon Anderson

so much. helpful. Thanks really Okay,

Ron Lombardi

you, Thank John.

Operator

with from D.A. coming next Linda line And question Davidson. the Bolton our of Weiser

Your line is now open.

Linda Bolton Weiser

and was presentation, the for I your -- it thank was Hi. good. really you wondering

you gotten distribution, without curious gotten really investment have And to -- model, cash IT, though manufacturing, for high a has flow source has where are to growing your an flow required And et like still you really a even because just areas level. there example, free if cetera. asset-light I'm cash Your company. are

next the Louis, grow think any you to any any that some distribution you I need or as foresee one here areas? bigger? in add idea in in you St. in just of might to to there have distribution So these bulk is more centers spike that, related center Thanks. your do spending up in of pop the And capital up years up couple your you

Christine Sacco

I'll saying, we this maybe be Linda, X% no about there range continuously. Chris, talk just lower. But by it'll years that We're every I'll of we a sales, to CapEx investment. it'll X% lacking Some is some year start investments higher, be and IT a areas are So, making -- a of little little are

sight X%. of I X% the now there's that to no at, we're outside big with will that to line that be So right I project have start we guess, range of of that would looking that.

to a to DC, in time to from of COVID, right of move terms last you before made will provider better, for back but years remember, or another? really when we drive and center more to customer we and to opened as analysis. did a our to In different not What would customers We in grow, course, us. we If we serve have distribution DC when obviously, we few continue able as a or efficiently a the different move second did whether location sense really were that is that, recently right? that, service, it did relation as about just one study a for

about years, think But So into that now. we we're new of be again, we X% still next because not yet. CapEx quite would to were step of X% that to number it talked capacity few a if over sales there within I the DC facility,

Ron Lombardi

that The other model thing our platform scalable. business Linda is, in sure our we've make been to and investing is planning

we all new the the to a our in when the moved be us. as SAP mentioned, investments making starting global way along would way Chris been sure we've of that put on place when in grow all able just for and businesses. future made So we And center, we it to back with distribution basis expand

year we needs may flow. built So any don't disrupt free pop two have up capital up any the that in or to cash

repeatable. continue EBITDA think outlined consistent capital spending, we the that and EBITDA the prepared low margins so high cash remarks margins, tax we and So about feel model. good drivers, the The Chris in right, that to three is her benefit, today about factors

Linda Bolton Weiser

point? Great. of are quite the that of fully categories impacted terms to Thank I Are Would in then levels not that those the they sizes this about you say as just And sales wondering those began you. then pre-COVID grow at COVID to was categories they recovered back categories? recovered. faster their

Ron Lombardi

Yes.

continue COVID long-term. they had we have at grow that and were for areas Dramamine basically Hydralyte recovered, by four, fully and cough/cold levels that the So Hydralyte, high Dramamine, and they guess, to been I and are impacted began Nix, to

even in back pre-COVID the into and still like portfolio to as it we we levels to in they forward. they the cough/cold sales. versus or though X% not recovered small less were long-term, XXXX, we're franchises be those the head Nix, on have they're not XXXX, Nix expecting going head our continue of very huge lice additional any growth fiscal tough total exited It's recovery. a rebound But In portion is winning anticipate to XXXX particular predict and like And recovered level. to moderate over XXXX, cough/cold strong we had to as of going fully those. business, some So of to

opportunity mindful up. be maximize an to on that. we'll whatever shows try keep of we'll eye it and But So

that think addresses your I So question.

Linda Bolton Weiser

percent talked Thank a little And about your the private bit us label competition you. you call on you've then like, Yes. can roughly? does what finally, private of label revenue just today, remind have

Ron Lombardi

example, the low majority vast really the on in of be is label our a that private of is vary continue of or depending label competitive well-positioned way we our stewardship private to In long-term label successful widely it's And the the be analgesics and part. continue categories comments we just competitor. eye important competitor where in very as almost non-existent very or The care, private growing amounts. for powdered any the us ranges to and Yes. products the But have compete think in. Monistat, growing for share because to most we high and the share our category again, brands view on like shares, I categories, percent and

Linda Bolton Weiser

in Okay. slip just question? Can I one more

Ron Lombardi

Sure.

Linda Bolton Weiser

you understand businesses? managers Are they Or of different you that brand lot practices years. the the sitting like all brands? And brand Tarrytown do managing of acquisition brands across bit the up of are much sharing best are location? in kind the pretty a from Because have as better built little managed? about curious run just I'm over how to kind siloed of over a your have

Ron Lombardi

Yes.

in of a across collaborating at kind below where start category. share that Tarrytown managers be within to would that learnings high are category then a together categories brand North and about the we brands have And our particular across we And here So brands. and that level, for thoughtful level, Director at category. the that the America is working

culture I a years. things working about Prestige where unique takes And environment here couple is, everybody from been has continue remote last we've the think, of very been is Here, in even able over of to one the home the collaboration that place. at it that the

So also groups we consumer about take together across insights to but and them. as advantage thinking getting of categories individual share brands,

Linda Bolton Weiser

Okay, great. Thank you very much.

Ron Lombardi

Thank you, Linda.

Operator

question next our with Sidoti. of Anthony And coming Lebiedzinski the line from

is Your open. line

Anthony Lebiedzinski

taking you. question. the thanks Thank good for And morning and

wanted just than accelerating new So, innovation, products the in the the terms of pipeline for XXXX, number you about usual, this that get to you are of as fiscal in with more is far new just the spoke board a are that new Or and product, pipeline coming product year? better guys on that years sense consistent as past?

Ron Lombardi

all fairly again, really about a it's we've prior And consistent in what it's three having years. pipeline. seen XXXX, for So, consistent year with

development you about. So that something good ready every year that feel in for you've got

with of insights, in in a consumer element the long-term is an of past connection today, and it's lot Anthony. as XXXX, remarks, So, prepared approach. important we with years. consistent important brand highlighted ways And building marketing our And it

Anthony Lebiedzinski

talked brand. for you've Thanks that. prepared added And in then it. you also, remarks, you've over how brands and your Got divested years, about that the

divest maybe the opportunity your at wouldn't you if now, look that along? portfolio, with to current as are you brand right are current brand portfolio? you So, Or there brands happy particular any came look the

Ron Lombardi

good important has our the of makeup that's sure first feel outlook feel X% making we X%, that there, growth to it long-term it portfolio, the with good that tie of about all, and we connection our organic the in of about that. so Yes,

something, down further it a things with flow got valuations, somebody's we get offset big value those the prior that's the for would tail the some non-core financial that And of cheque acquisition, sold to at we with did of of do fleet XX% which largest help a if way group and OTC we've cash the time, was terms just to right, flows divestiture, we make the to as we sell to than would holding fleet what wrote versus less In we that our comes of inbound what pay. that brands, evaluation sense, willing of proceeds, if the business. of a calls ultimately small a

on we portfolio. all today, as depends continue sit to we the here it good about feel So, valuation. of our makeup But

Anthony Lebiedzinski

Got it.

Okay.

And that sort terms would valuations characterize in valuation, the in given in we've volatility of I've you how seen off any so of that? have market, had drop the you recent or

Ron Lombardi

competitive the a M&A big interested some we have coming or would would I you businesses for to pharma. compared the time for -- so of of long consistent Yes, out valuations even been things that be numbers are be big with fairly would for hear that consumer of in the some for say

consumer brands, So, Chris? paid the which XX most the we times about Akorn recent example is

Christine Sacco

Yes.

Ron Lombardi

For an back where environment our even the you in most paying keep huge recent been multiples, is example July, hearing we've consistent so what past. these with in

Anthony Lebiedzinski

does the Got you. any assume And now? then that repurchases lastly, as far as EPS the or guidance for share full year,

Christine Sacco

not. does It

Anthony Lebiedzinski

right, you thank All best for luck. All and Well, of that. thanks clarifying right.

Ron Lombardi

Thank you, Anthony.

Operator

Lombardi would closing to And am I Mr. back turn now the Instructions] over this no I [Operator showing questions call further for any remarks. at like time. to

Ron Lombardi

have look and joining everyone to you, business great everyone forward we on call and a our you day. updating And Thank Thanks year thanks today. the on operator as us the for progresses.

Operator

does your that our today. for conclude conference for you gentlemen, and Ladies Thank participation.

disconnect. may You now

Prestige Consumer Healthcare (PBH) 6 May 222022 Q4 Earnings call transcript