Prestige Consumer Healthcare Inc.

Good day and thank you for standing by. Welcome to the Q4 2021 Prestige Consumer Healthcare Inc. Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star 0. I would now like to hand the conference over to our speaker today, Phil Terpolilli, Vice President of Investment Relations and Treasury. Please go ahead.

Phil Terpolilli Thank you, operator, and thank you to everyone who has joined today. On the call with me are Ron Lombardi, our Chairman, President, and CEO, and Christine Sacco, our CFO. On today's call, we'll review the results of the fourth quarter and full-year fiscal 21, provide a fiscal 2022 outlook, and then take questions from analysts. We have a slide presentation which accompanies today's call. It can be accessed by visiting PrestigeConsumerHealthcare.com, clicking on the Investors link, and then on today's webcast and presentation. Remember, some of the information contained in the presentation today includes non-GAAP financial measures. Reconciliations between the nearest GAAP financial measures are included in today's earnings release and slide presentation. During today's call, management will make forward-looking statements around risks and uncertainties, which we detail in a complete safe harbor disclosure on page two of the slide presentation accompanying the call. These are important to review and contemplate. As everyone on the call today is aware, business environment uncertainty remains heightened due to COVID-19. These items include shutdown impacts for many areas of our economy, changes to consumer purchasing habits, the potential for disrupted supply chain, and various other economic factors. This means that results could change at any time and the forecasted impact of risk considerations is the best estimate based on the information available as of today's date. Additional information concerning risk factors and cautionary statements are available on our most recent FCC filings and most recent 10-K. I'll now hand it over to our CEO, Ron Lombardi. Ron? Thanks, Phil.

Let's begin on slide five. A year ago, we began our fiscal year with a backdrop of tremendous uncertainty stemming from the COVID-19 pandemic. This uncertainty created widespread volatility across the categories we participated in, with rapid changes in consumer preferences and needs. Despite all of this, we focused on executing our proven long-term business strategy, which resulted in a very successful fiscal 21 that exceeded our guidance. Several aspects of our business proved to be particularly beneficial during the quickly changing environment of the last year. Our brand-building approach of growing categories and connecting with consumers paid off in a big way, especially as consumer shopping habits and needs shifted. Having a diversified portfolio of leading brands helped us connect with consumers as they turned to their time-tested and trusted brands for self-care during the pandemic. Our widely distributed brands and robust e-commerce presence also paid off as consumers showed up online in greater numbers. Meanwhile, our company's agility allowed us to reposition our marketing to best connect with consumers in this environment. The net results of these factors is we continued to win market share in difficult backdrop and generated very strong cash flow due to our consistent operating model. Let's turn to page six to review some of the resulting fiscal 21 financial performance metrics. Even during this unique time, our proven strategy delivered solid results, generating record adjusted earnings and free cash flow. For fiscal 21, our net sales were approximately $943 million, Down about 2% from the prior year. We were pleased with our consumption trends from the year, with impressive performance in the vast majority of our brands. This included continued market share gains consistent with our long-term objectives. Our net sales and consumptions declined slightly owing entirely to a few categories impacted by COVID, such as cost cold, which I'll discuss later. The full year gross margin came in at 58%, essentially flat to last year on an adjusted basis. Adjusted EPS grew nearly 10%, achieving the high end of our long-term expectations as we continue to benefit from our operating model, leading financial profile, and ongoing debt reduction. adjusted free cash flow of $213 million also grew versus the prior year and continues to fuel our disciplined capital deployment efforts. In summary, we continue to feel good about our performance within a challenging fiscal 21 COVID backdrop and believe we are set up to continue winning with consumers by executing our long-term strategy. On the next few slides, we'll review some of the positive effects of our strategy in greater detail. Let's start on slide 7. Here, our major brands and share performance are shown on the left side of the page. Share performance for our broad portfolio had an outstanding fiscal 21, especially considering rapidly shifting consumer habits due to COVID. Our bets allowed us to focus our efforts on near-term brand opportunities like Monistat, Compound W, and Clear Eyes, which we'll discuss on the next slide. This helped offset certain brand pressures stemming from the pandemic, such as Summer's Eve, where our share in the on-the-go feminine hygiene products, such as wipes and sprays, pressured our share versus the category. This performance was underpinned by several factors. Having leading number one brands is a strength, but just as important is the fact that we lead by a wide margin in many categories. In fact, many of our brands' market shares are significantly larger than the next category competitor. This allows us to concentrate our efforts on consumer insights that leverage brand heritage to enable growth with consumers and retailers to expand the overall category. So in summary, the vast majority of our largest brands grew market share significantly, a continuation of the trends we've seen over the long term. This success is a result of our portfolio positioning, brand building strategy, and long-term investments, even in the current unique environment. Now, let's turn to slide eight. Here, we have three specific examples of this fiscal 21 market share growth. Adding on to the underpinnings from the prior page, our company's proven brand building toolkit allows us to focus efforts on targeted brand opportunities such as these in real time. Shown on the left is Monistat. Our marketing efforts, including reaching consumers at home through digital and addressable TV efforts, having the ability to ship Monistat to your door, often on the same day. Shown in the middle is Compound W. As we touched on last quarter, Compound W has been a long-term leader in both innovation and consumer insights, and we successfully leveraged this during the rapid shift to e-commerce experienced over the past year. Finally, shown at right is Clear Eyes. Brand messaging evolved during the pandemic to emphasize the brand promise of having brighter, lighter, and more comfortable eyes. We focused on the concept of at-home usage and are using time-tested brand-building tactics, which helped grow share in the year. The result is clear that our brand-building capabilities, even during COVID, continue to pay dividends. Each brand runs significant market share during fiscal 21, outpacing category growth by 5, 15, and 7 percentage points, respectively. Now let's turn to slide 9. Our fiscal 21 sales performance, driven by the attributes I've just discussed, is particularly impressive in light of challenges in a few major categories we face during the year. For us, three key categories, cough, cold, travel, and head lice, were materially disrupted by COVID, facing declines in incident levels and usage rates as consumers stayed home and wore masks. This drove double-digit category declines and a 500-plus basis point headwind to our full-year sales performance. Despite this, we were able to grow our overall market share. As we look ahead, we view this as a positive. The performance outside of these categories reinforces that our strategy is working, while the pressure areas have stabilized and have begun to lap their prior year category declines in Q1. Now, let's turn to slide 10. A final highlight to make that helped drive fiscal 21 results was e-commerce, which now represents about 11% of revenue. Our multi-year investments around e-commerce are delivering impressive results and we benefited from growing interest in this channel by consumers. As a leader in consumer healthcare e-commerce, our market share in this channel are often higher than in brick and mortar due to our early and continuing investments. Also by design, our financial profile has remained consistent through this dramatic channel shift as we maintain a consistent profile across our distribution channels. In fiscal 21, we continued to make investments behind online content and targeted pandemic-related messaging with the goal of expanding our share with consumers. We also invested across numerous online retailers during the year. The result was a doubling of e-commerce sales in fiscal 21, and we are well positioned to continue to benefit from these investments as we look forward. With that, I'll turn it over to Chris to discuss the financial results.