Prestige Consumer Healthcare Inc.

Ladies and gentlemen, thank you for standing by, and welcome to the Q1 2022 Prestige Consumer Healthcare, Inc. conference call. At this time, all participants are in 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 keypad. Please be advised that today's conference is being recorded. If you require further assistance, please press star zero. I would now like to turn the conference over to your speaker today, Bill Terpiloli, Vice President of Investor Relations. Please go ahead, sir.

Thanks, 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 first quarter fiscal 22 provide an updated full-year 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. Please remember some of the information contained in the presentation today includes non-GAAP financial measures. Reconciliations to 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 are detailed 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 well aware, business environment uncertainty remains heightened due to COVID-19 and continues to have numerous potential impacts. 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 in our most recent SEC filings and most recent company 10-K. I'll now hand it over to our CEO, Ron Lombardi. Ron?

Ron Lombardi Thanks, Phil. Let's begin on slide five. We are very pleased with our record start to the year. Our proven business strategy emphasizing brand building paid off meaningfully in Q1, and the strong results we'll discuss in detail are a key factor enabling us to raise our fiscal year guidance. The fast start to our fiscal 22 was driven by two primary factors. First, and most importantly, our base business continues to perform well with strong 5% growth across the base portfolio. This result was driven by solid consumption and share gains across the portfolio, a continuation of the trends we have seen for a while now. we experienced a dramatic increase in sales for brands benefiting from travel-related activity as consumers shifted habits with increased vaccination rates. We estimate this accounted for approximately 25 million of the Q1 sales increase over the prior year. I'll discuss the change in consumer habits in greater detail on the next slide. Our time-tested brand-building strategy and the re-acceleration of certain categories and channels resulted in our highest level of sales ever when excluding our divested household cleaning business. Meanwhile, our financial profile has remained solid throughout the change in consumer purchasing patterns, and we generated record EPS of $1.14 and free cash flow of approximately $68 million in Q1. Our stable and strong cash flow profile continues to enable a disciplined capital allocation strategy. Throughout fiscal 21, this meant focusing on debt reduction combined with share repurchases. In Q1, we announced the acquisition of Acorn Consumer Health and its Theratiers brand, which closed on July 1st. We believe this acquisition is a great strategic use of capital, which we'll share more detail on shortly. So in summary, we delivered excellent Q1 results, underpinned by our long-term strategy and further fueled by a rebound in certain COVID-impacted categories and channels. Let's turn to page six and review some of the changing consumer habits resulting from the pandemic. Throughout all of fiscal 21, we noted dramatic ways in which consumer habits changed as a result of the COVID-19 pandemic and the resulting effects on our portfolio. We observed less consumer travel and more focus on hygiene as consumers stayed home and wore masks. This meant a significant headwind for many of our brands, including Dramamine and Motion Sickness, Chloriseptic and Ludens and Cough Cold, Hydrolyte and Rehydration, and Nix and Head Lice. Combined, these brands represent about 20% of our revenues. Back in May, when we provided fiscal 22 guidance, We anticipated this portion of our portfolio would be largely flat as we expected consumers would take time to move away from the habits formed over the previous year. While this is still the case in certain categories, this assumption proved conservative in others. To start, we saw a dramatic rebound in travel-related activity. This drove a meaningful recovery in Dramamine along with a recovery in our Australian hydrolite business. The recovery in travel activity also drove increases in convenience store consumption and the distributor inventory in this channel to support the increased takeaway at shelf. This benefited brands like Dramamine, as well as Clear Eyes with its Pocket Pal on-the-go offering. In addition, drug retailer traffic also increased owing to vaccination visits, leading to a strong consumption trends driven by our broad distribution and market share in this channel. As these changes to consumer habits continue to evolve, our playbook remains the same and our nimble business strategy is a strength. We will invest opportunistically across our portfolio to drive long-term brand building. This strategy paid off again in Q1. On the right, You see Dramamine with Q1 sales compared to prior years. As consumer travel habits began to accelerate, we leaned into our leading market position and marketing playbook. We reactivated time-tested marketing strategies for the brand, resulting in both market share wins and the resumption of sales growth as consumers returned to the categories. While the timing of a full COVID recovery remains difficult to predict, our focus on investing behind our brands leaves us well-positioned for future variability and the eventual return to more normalized trends. Now, let's turn to slide seven to discuss the TheraTiers acquisition in further detail. As highlighted earlier, we closed on the announced ACORN consumer health acquisition on July 1st. As you can see on the left side of the page, the portfolios revenues are concentrated in the TheraTears brand. TheraTears, created in the 90s, has a proven history in the eye care category and will further enhance our efforts in this space. The addition will be complementary to our existing eye care presence by expanding into the growing dry eye segment of eye care. TheraTears is well positioned with the mild and episodic dry eye consumer, with a long track record of steady market share gains and revenue growth above the category. The portfolio complements Prestige's operating model nicely with outsourced manufacturing and is widely distributed across retail channels in the U.S., similar to our existing business. Lastly, the Acorn portfolio has a solid financial profile of sales growth and margins consistent with Prestige's long-term targets. So, in summary, these attributes are a great match against our well-defined M&A criteria that evaluates brand opportunity, the businesses fit with the prestige operating model, and the financial returns that align with hurdle rates that we measure against. Now, let's turn to slide eight. Strategically, TheraTiers fits with our disciplined M&A criteria nicely. But furthermore, as shown on this slide, It is a great fit alongside our ClearEyes brand. The transaction enhances our market-leading scale in eye care. When combined with our existing eye care business, we now have a $100 million-plus franchise that addresses a range of consumer ailments across a billion-dollar category. ClearEyes is time-tested and proven as a leader in redness relief and has a long heritage with consumers. For a consumer, it stands for Redness Solutions. Clear Eyes remains a leader in the category with long-term sales growth and is a brand that remains as relevant as ever to consumers seeking redness relief. TheraTears shares similar attributes but is focused on a different consumer symptom. It's established with consumers as a leader in dry eye solutions, particularly for those episodic users in dry eye relief. For a consumer, it stands for tears and soothing eye relief. As shown on the right, the two brands in totality represent a wide spectrum of consumer solutions in iCare. This broad offering will continue to be supported by our brand building strategy, and with this comprehensive solution in iCare, we are well positioned for continued success. Let's turn to slide nine to review ClearEyes as a proven example of this opportunity. ClearEyes is a great brand success story and one that gives us an advantage to start as experts in the eye care category. A brand we've owned since our IPO over 15 years ago, ClearEyes is an example of how we think about long-term brand building. Its success has incorporated a number of marketing factors over time. First is innovation. When we went public, ClearEyes had about three SKUs with a very narrow focus. Today, we have over 11 different solutions for consumers solving eye redness. The most recent example shown here is Clear Eyes Sensitive, which is specifically formulated for sensitive eyes. Second is investments. These are constantly evolving, and most importantly, we emphasize a bottom-up approach to enable effective tactics at a given point in time. For example, brand messaging evolved during the pandemic to emphasize the concept of at-home usage and use time-tested digital tactics, which help grow share in the year. Third, marketing campaigns. We know from consumer insights that consumers respond to celebrity and influencer marketing and eye care. As a result, we've had many long-term successful initiatives from spokespersons like Ben Stein and Vanessa Williams to more recent social media influencers. The result of these efforts is we have broad distribution across retail channels with partners who recognize the value of ClearEye's brand and the investment efforts we just discussed. We continue to work with all of our retail partners to optimize their eye care assortment and drive long-term category growth. The result is clear. Our playbook continues to work and we continue to win share to date in fiscal 22. We look forward to applying this proven knowledge base to the Theratiers brand and drive continued long-term success across our eye care franchise. With that, I'll turn it to Chris, who will walk through Q1 financials.