The CEO of Prestige, Christine Sacco, the CFO, and Phil Terpolilli, VP of Investor Relations and Treasury. So the format for today will be a fireside chat that we will have a total of 30 minutes. I will kick it off with questions, and we'll take questions from the audience as time permits. So if you do have any questions, you can put those into the Q&A box at the bottom of your Zoom screen, and I'll do my best to incorporate that into the fireside chat. So again, Ron, Chris, and Phil, thank you for being here and spending your time today at the Sidoti Conference. So I guess, you know, first, I think it would be helpful, especially for those that are new to Prestige Consumer Healthcare, just to, you know, go over, do a general high-level overview of the company and your strategy as well. Thanks, Anthony. Thanks for hosting us this morning, and thanks to everyone for joining us here. So, yeah, let me start with a few brief remarks around Prestige Consumer Healthcare. You know, as our name implies, we're focused on providing brands and products to help consumers take care of themselves and deal with the ailments that may happen in life over time. So, we have a broad portfolio of leading brands that consumers turn to and trust to help them take care of their health needs. Our leading brands often define the categories that they compete in. So if you think about Monistat for vaginal yeast infection, it defines over-the-counter care for that. Dramamine, another great example of defining motion sickness and nausea treatment, are great ways to think about how Prestige thinks about competing and creating value over time, is by investing behind these leading brands and growing the categories, and our sales over time. Gotcha. Okay, so as we think about the main product segments, you know, in recent periods, you've had some challenges in the women's health category. Can you go over what you're seeing from a demand perspective and your strategies to return this category to growth? Sure. So, you know, one of the benefits of having a broad portfolio is that over time, you know, some of your brands will do better than you would expect over the long term. Some perform in line with your expectations, and some are a bit challenged or can be challenged. And our women's health platform has been an example of where we've tried things, and maybe it hasn't worked out like we had anticipated. So over the last couple of years, we've talked about Monistat and Summer's Eve as needing to be repositioned to get back in line with long-term growth expectations. So Monistat was a quicker turnaround for us. And really, it goes back a number of quarters now, where we were able to stabilize and get that brand positioned for growth. Summer's Eve has been a longer runway for us. So if you go back a number of years ago, we looked at repositioning Summer's Eve, which is and has been the leader in feminine hygiene, to connect with consumers around everyday usage, right? Part of your everyday shower routine. And we launched a number of products, whether it was Active or Spa, to really connect at a different usage occasion and thought. And what we found was that consumers really think about Summer's Eve as feminine hygiene and odor control and protection and prevention, rather than being part of a daily beauty regimen. You know, as marketers, not everything you try works, and this is an example where even though women tell us that they're open to using products in this category, when it came to connecting with the brand, it didn't really turn out that way. We've been back to repositioning Summer's Eve to its heritage, both in terms of marketing, communication, advertising, and with products. We launched Ultimate Odor Protection in a wash, wipe, and spray over the last three to four quarters, and it has been the best new product launch that the brand has seen in a really long period of time. So as we continue to move forward through this year, we think that Summer's Eve will get positioned back to first being stabilized and then back to a position where we can grow not only our sales, but get the category back to growth going forward. That's great to hear. And then, so I guess, as you think about the business longer term, you know, so part of your growth algorithm is to grow your sales organically in the low single digits, you know? So when you think about the business, you know, from that perspective, do you think certain categories will perform better than others? And how big of a factor will pricing be as a driver of the top line? Yeah. Why don't I let Chris take this question for us? Sure. As Ron mentioned, you know, the power of the diversification of the portfolio, you know, all of our brands, our 15 or so brands that we invest behind have plans for growth, right? Innovation is very important in OTC. They all have three-year pipelines to innovation, so certain innovation will be bigger than others. We call them Big I versus the standard kinda everyday Little I. Little I would be like a Luden's flavor, and Big I would be Compound W launching NitroFreeze, which is the coldest treatment you can get on a wart without going to a doctor's office. So we expect, you know, certain categories have had a nice tailwind behind them. Eye care, as an example, ever since COVID. You know, folks, we're all staring at each other right now on a screen, and your eyes are probably getting dry as the day goes on. And so, that's been a strong category driver for us. Dramamine's been a big driver, as Ron mentioned. I'm sorry, I just forgot the second part of your question there for a second. Yeah, so the other part of the question was pricing, you know? Yeah. As you look to grow revenue organically in the low single digits, two to three%, you know, how big of a factor will pricing be in that, just to use that growth algorithm talking point? Yeah. Yeah, so historically before COVID, pricing has not been a big factor. You know, we get pricing, and I think in the future, most of our pricing will come through innovation that I just mentioned, right? Trade the consumer up for an unmet need. And so, you know, as we look forward and inflation kind of stabilizes, we would anticipate pricing to be less of a lever than it was during COVID. And, you know, we like to mention to folks that even during COVID, when you were hearing a lot of people talk about very large benefits on pricing and, you know, volume going in the opposite direction, even at our peak, we were two-thirds price in terms of our growth and one-third volume. This year, we talk about 50/50. So, you know, we didn't see that kind of, you know. You think about, you know, someone wakes up in your household and doesn't feel well, and you go to the store, pricing is not a huge factor in consumers' minds when they're thinking about our products. Mm-hmm. Gotcha, right. So I know you touched on this a little bit on the innovation. So I know one of the examples in your presentations as far as innovation is talk about Dramamine, how you've added new flavors, you know, now that's you have a nausea product there. So I guess in terms of, you know, just thinking about, you know, pipeline of new products, you know, can you share, you know, as far as what you're seeing as far as pipeline for new products and just overall, you know, expand maybe more about the innovation strategy as a factor of your growth plan? Sure. So new product and innovation really is an element of our long-term brand-building formula. It doesn't stand on its own. It's not a separate pillar. It's really part of what we're looking to do over time. And NPD and innovation's role can be to help a brand expand into a new category. It can be to add products to address unmet needs in a category, or to just evolve to have a more efficacious product offering to help consumers take care of themselves. So, you know, there's a lot of different ways that NPD and innovation fits into a brand's plan. So, all of our brands develop an NPD and innovation strategy based on what they're trying to accomplish, and it's part of their long-term planning. So as Chris mentioned, in some cases, like Luden's, the Little I new flavors will be part of their NPD plan over time. In other cases, like Dramamine, where we've expanded into nausea, new product would be a new offering to address nausea, as we, you know, expanded Dramamine from motion sickness into nausea, you know, and it, again, quickly became number one in that space, or in Compound W, where we brought a more efficacious offering through NitroFreeze type products. So the pipelines are developed based on the brand strategy, and what consumers are telling us they're looking for. So there's no one master formula that it gets applied across the portfolio. They're all uniquely developed based on consumer insight and other expectations. So, you know, we don't talk about what's to come, but it's an important element of brand building. You know, when you look into this fiscal year's offering, you know, I'll point to Summer's Eve Ultimate Odor Protection wash wipes and sprays as a great example, where we stepped back and said, "Hey, what are consumer telling us?" And they're telling us that that brand needs to better connect around odor for women, and that's what we quickly brought to market to help stabilize that brand. Mm-hmm. Right. So, so, shifting gears to your sales channel. So obviously, during the pandemic, e-commerce really took off. Can you talk about that? And just, just overall, as far as other sales channels, I mean, which ones do you think also... Is it e-commerce, or is it something else as far as which ones have the most growth opportunities going forward? Yeah. Phil, do you want to talk about channels? Sure. So we participate widely with consumers across wherever they're shopping. That's one of the key objectives for the business, so wherever consumers show up, we want to be. To your point, Anthony, e-commerce has gradually grown over time, and it accelerated during COVID. Went from about 5% of our sales to 10% of our sales, but we were ready and able to supply products as consumers showed up. That's continued to creep higher, and today, e-commerce is just over 15% of our business. Amazon is roughly two-thirds of that, so nice chunk of business. Mass, as a general rule, is still about one-third of our business between Walmart and Target today. And then, as you go down the list, it's very similar to what you'd see in traditional consumer products. The grocery stores would be in the teens, Kroger, the biggest piece of it, and the outliers for us would be the drug channel, so Walgreens, CVS, and Rite Aid. Think about those as a channel for consumers that have an immediacy of need, lends itself a little bit more to OTC. That would represent about 20% of our business, and then today we have a small presence in the club channel. Ultimately, retailers like Costco, et cetera, really aren't a big factor in these categories. Nobody's going to buy Monistat in bulk, let's say, those sorts of things. ... so it got, kind of goes back to what we were saying before, being widely distributed, managing all those channels effectively from a profit perspective so that we're neutral wherever the consumer goes to shop, is sort of the ultimate objective that we manage the business against. So when we think about- ... channel strategy and tactics, Anthony- ... you know, number one is we want all of our retail partners to be successful. So we show up day in and day out to work with them, to help them meet their business objectives. And then secondly, as Phil just mentioned, is to have a product offering in those channels that connects with the shoppers and that meets our financial objectives. So one of the, you know, we often say we really kind of don't care where consumers purchase the product, and that's because, you know, our margins are consistent across channels, so we don't have a difference in profitability because we've managed that product offering to meet what the consumers are looking for, and secondly, to meet our financial objectives. Got it. Okay. And then, you spoke earlier about, you know, Summer's Eve, how you kind of went back to the roots or basics there. And then, so I, I guess the question here is, I mean, do you guys have internal tools to track that as far as, like, like, how do you guys go about, you know, monitoring consumer behavior and their preferences? You know, maybe you could just talk about that, and are you looking to perhaps expand on that? Yeah. Consumer insights and understanding consumer needs is at the heart really of everything we do here, right? If we can be successful with consumers by offering them products that help them take care of their health and have long-term connections with us, you know, that's gonna be the formula for long-term success. And if you just step back and look at our portfolio and our big brands, that's what we're looking to do and largely deliver against. So consumer insights is very important. We have our own consumer insight teams in-house that do nothing but, you know, mine consumers for insights on a daily basis. And then in addition to that, we have our own in-house 800 number. So when consumers call the 800 number on the back of the product to ask questions or to tell us how pleased they were with the product, yes, and we do get lots of calls thanking us for the products, we harvest that data and keep track of it. And our consumer insight team, as a matter of fact, was just in our headquarters this week, giving us an annual update on what the consumers are telling us when they call the 800 number. So consumers' insights are important to how we think about managing our product offering, new products, innovation, and marketing. That makes a lot of sense. So switching gears to the international segments, obviously, it is smaller in terms of dollar terms, but the... it has grown faster than your North American business. Now, what's driving that growth, and how should we think about that segment going forward? Yeah, so first of all, you know, our strategy for our international business is really no different than North America, which is build out a portfolio of well-positioned brands and then invest behind them for the long term. And that's really at the heart of what's been driving the high level of growth on our international business. We often talk about Hydralyte as the example, right? It's been very high growth for us because it's had a big opportunity to grow household penetration, and as a result of that, grow sales. So we've been able to grow household penetration by, like, 3X over the last six or seven years that we've owned, you know, the Hydralyte brand in Australia. And again, it's focused on long-term brand building and all of that elements. It's new products, it's innovation, it's advertising, it's marketing elements. In addition to that, you know, we've looked to invest into additional adjacent international markets, adjacent to Australia. We bought the rights to that before COVID, so that'll creep slowly over time and be additive. But, you know, it's no one thing, but it goes back to that long-term brand-building playbook and investment strategy. Mm-hmm. Yeah, I would just piggyback on that, we, that we expect our international business to grow at 5% a year, and we're coming off. That's even coming off of a couple of years of, you know, 20-something% and then 30-something% growth, so very strong growth, as Ron mentioned. But that's enabled it to creep from, you know, what used to be 10% of our business is now about 15% of our business, and expected to grow at, like I said, at that 5% a year. Got it. Okay. And then just curious, what, what are you seeing from competitors? Anything that- there to call out, especially private label? Yeah, what I would say is that there's been really no change over the long term or short term in terms of how we see consumers think about taking care of themselves, which is they look for their trusted brands, they look for differentiated product when they make that decision. It's not the occurrence that they look to save a couple of dollars or 50 cents when they're gonna be in the category once every, you know, once a year, once every three year. They, they continue to turn to that trusted, trusted brand. So, you know, over the long term, you know, our leading brands have continued to outgrow private label and grow our share compared to, to private label. You know, even in an environment where inflation, right, it's been around for a number of years now, has caused certain households to have to think about making choices. In consumer healthcare, they continue to make the choice to stick to that trusted brand. ... Mm-hmm. So, earlier this year, you had some supply chain issues with Clear Eyes. Maybe just a quick update on that, and for those that may be not as familiar with it. So and then just, as you look at managing your supply chain, have you made any notable changes in terms of how you're dealing with your other suppliers? Chris, do you want to talk about eye care supply chain? Sure. So, as we mentioned on our Q4 call, we actually had quite an anomaly of a situation where we have two dual source supply of Clear Eyes. One is in Canada, one is in South Africa. We've been partners with them for a long time. They each went down for a period of weeks, both for different reasons. One proactively actually trying to add capacity. Clear Eyes, as I mentioned, eye care has had a nice tailwind ever since the beginning of COVID, really. And we were looking to increase our capacity there. And so, they both went down for a couple of weeks for different reasons, as I mentioned. They're back online, as we mentioned on our Q1 call. Actually, we exceeded our expectations in Q1, primarily due to getting a little more Clear Eyes in than we had anticipated. A little earlier, I should say. We were air freighting it in. We talked about continuing to air freight that in Q2. So no update to what we mentioned on our Q1 call, other than, you know, largely as expected in terms of production coming out of both facilities at this point. Gotcha. Okay- The other question, sorry. You had mentioned any changes that you, you've made in supply chain. You know, supply chain, like everything else, is dynamic, and, you know, everyone went through quite a period during COVID. And I'd say the biggest change was really reaching deeper into the supply chain, right? The supplier-supplier, as a lot of folks did, maybe redirecting where folks are purchasing from, dual sourcing, where folks are purchasing their raws from. So, continues to be a dynamic environment, but just another aspect of managing the business. Yeah. And so our supply chain strategy really has remained unchanged, and it starts with quality product on time. That is our supply chain strategy, right? Without that, in this industry, you don't have anything else, right? So we don't run around chasing for that last penny of lower cost, because that last penny or those last two pennies will come back to haunt you, if you don't have quality product at the quantities that you've ordered on time. And, you know, meeting the service levels of our retail partners is job one for us. So no change in that strategy. As Chris said, you know, we've been reaching in to our long-term partners to understand their supply chains and working with them to help ensure that we're better positioned for that quality product on time strategy. Mm-hmm. Gotcha. All right, and then just switching to cost, so what are you just seeing from a cost perspective, especially freight costs, labor, advertising, and marketing? Just curious to get your thoughts on those. Yeah, I would say generally speaking, freight has come down a bit, right? We, you know, we like to remind people that unlike some other companies, freight is, you know, call it mid-single digits% of our sales, right? We're not shipping dog food. And so, you know, we didn't feel as much of the pressure coming up about. We source in-house about 15% of our sales, right? We're manufacturing ourselves. So of that 85%, about 85% is coming from North America. So not a large component for us, but we have been seeing that come down. We haven't felt that through the P&L because, as I mentioned, we've been air freighting some eye care supply and intend to continue that for the near term. Obviously, not a long-term thing. You know, from an advertising and marketing and other spend, you know, it's wage inflation. We're back to a more normalized environment. You know, it's come down from the peak that we were seeing over those COVID periods. Mm-hmm. All right, and then going back to fiscal 2020 and 2021, your gross margin was around 58%. It pulled back to about 55.5%, last fiscal year. How should we think about PBH getting back to those types of gross margins in the future? Yeah, we're going to march back. You know, it's cost savings, right? We don't think pricing will be a huge factor, as we mentioned earlier. We have been able to offset inflation dollar for dollar with cost savings and pricing, but of course, you know, at 58% margin, it takes a little bit longer to recover than it does if you were a 24% margin, as an example. But, you know, we like to remind folks that, we manage an EBITDA margin here, right? In the low to mid-30s, 30%. And so we were able to do that throughout that period. We anticipate being able to do that. But, you know, as a marketing company, Ron always says, "You always want to spend more dollars," right? So to the extent we can increase our gross margin, we would look to invest that back behind the business. Gotcha, got it. And then, your business has been fairly, you know, recession-resistant. Yeah, obviously, there's still uncertainties with the macroeconomic picture and geopolitical uncertainty, but just thinking about all that and your long-term growth algorithm of growing EPS 6%-8%, I mean, what gives you the confidence to be able to achieve that? Yeah, so a couple of things. First is, you know, as we've seen over the last five years, our business is resilient. And, you know, kind of no matter what's going on in the broader environment, people still get sick, and they're going to look for their trusted brands to take care of their health and address their health, their health needs. And that's proven out through, you know, a very dramatic period of time recently. So, you know, we start with a very stable and resilient business with a fantastic financial profile that's going to generate, you know, lots of cash for us to look for ways to invest, to create value for our shareholders going forward. So, we really think that we're in a great position. You know, back at the end of our last fiscal year, you know, we kinda reminded folks of that position by talking about $1 billion of free cash flow that we're gonna have available to put to use over the next four years. So that's how we think about stuff. We're excited about the opportunity to take our capital allocation and create value, and make great investments for our shareholders going forward. Gotcha. So we only have a few minutes here left, but you know, in terms of the free cash flow that you alluded to, obviously, you know, part of that is just having a capital light business model. You know, how would you prioritize your capital allocation options? Maybe if you could just touch base on your acquisition strategy, also, how you guys think about share repurchases, as well. Would love to hear your thoughts on the capital allocation priorities. Sure. Phil, do you wanna touch on this topic? Yeah. So in terms of the capital allocation waterfall, it's something we laid out back in May, but, you know, number one in that priority list is always invest in the brands that we have. So reinforcing that 2%-3% long-term organic growth algorithm by investing in marketing, brand building, resources to be successful. If we don't do that, nothing else matters, as we always say. So that's kind of priority number one. When you think about the excess sort of free cash flow beyond that, we have sort of three priorities that sit below that. The first one is M&A opportunities. You know, we're fortunate that we have a long-term leverage target of less than three times. We're below that today, and moving down every quarter, and that gives us an opportunity to continue to evaluate further M&A opportunities that can kind of reinforce that long-term growth algorithm. So we can talk about that strategy, that it was the second part of your question in a second, but in general, thirty thousand feet, we see a lot of opportunities for future M&A, and it's across the spectrum from big companies selling assets to private equity buying and selling. And those acquisitions are both small and big in terms of opportunities, and everything in between. The next piece would be share repurchases. So historically, the company had executed sort of an annual repurchase, call it $25 million-$50 million, really used as a tool to offset share dilution. But back in May of this year, we went authorized into a larger, longer term, $300 million purchase with the board of directors. And that's really reinforced, or it has the confidence to have that sort of program because of the cash flow and the stability of the business that we talked about before. So we'll think about that twofold. The first piece of it is continuing that share dilution offset that I just talked about, and then the second piece above and beyond that is to execute repurchases opportunistically as it makes sense, balanced against those other priorities on the waterfall. And then the third is just debt reduction, right? We've got about $100 million at the end of June in terms of variable debt that we can pay down. We'll look to do that. We have further debt outstanding. We can look at assessing that, but it's at very attractive rates, and it matures in 2028 and 2031, so it's more likely you would see us potentially build some cash on the balance sheet beyond that, but certainly, deleveraging is a priority, really in the context of those other three opportunities of... The deleveraging gives you the ability to invest in other opportunities for the business opportunistically. Mm-hmm. So, as we look to wrap up, is there anything else that I should have asked or you feel is important to highlight, to investors about PBH? I think we've hit all the high points, Anthony. Again, we believe that our business is well-positioned for long-term success with lots of options available for us going forward. So I think we've hit all the high points. So thanks, thanks for the great questions. All right. Well, thank you very much for participating in the Sidoti Conference. Also, thank you, everyone, also listening in and asking, we had a couple of questions come in as well. So thank you, everyone, and have a productive conference. Thanks, everyone. Take care. Thank you. Bye.