Prestige Consumer Healthcare Inc.

Good day, ladies and gentlemen. Thank you for standing by. And welcome to the Persist Consumer Health Care Inc. fourth quarter and fiscal year 2022 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 the star, then the one key on your touch-tone telephone. If you recall operating systems at any time, please press star, then zero. I would now like to hand the conference over to your speaker host today, Bill Terpoliti, Vice President of Ambassador Relations and Treasurer. Please go ahead, sir.

Thanks, operator, and thank you to everyone joining 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 fiscal 2022 results. review the business attributes of Prestige that continue to enable our success, offer a full-year 2023 outlook, and then take questions from analysts. There's 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 this presentation today includes non-GAAP financial measures. Reconciliations to the nearest GAAP financial measures are included in our earnings release and slide presentations. On 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 that accompanies the call. These are important to review and contemplate. Business environment uncertainty remains heightened due to COVID-19 and various geopolitical factors which have numerous potential impacts. This means 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?

Thanks, Phil. Let's begin on slide five. We are very pleased with our fiscal 22 results that exceeded our expectations as we found continuous opportunities, even with the backdrop of a challenging macro environment. Revenue of a billion 87 for the full year grew 15% versus the prior year. And Q4 was another quarter that experienced double digit sales growth. Our base business trends were impressive across the majority of our portfolio. aided by strong consumer demand and our long-term brand building. For the year, our international segment experienced robust demand for its HydroLite brand, while Dramamine and ClearEyes led broad-based segment growth in North America. Our revenues translated into strong profitability. For the full year, we generated EPS of over $4 and free cash flow of over $250 million both up double digits versus the prior year. Lastly, during fiscal 22, as always, we were disciplined capital allocators of this strong cash flow. On July 1st, we acquired Acorn Consumer Health and its Theratiers brand, which we view as a great strategic use of capital, with the brands now fully integrated and contributing to our portfolio. And even with this acquisition, we continue to reduce leverage. Now let's turn to slide six. Our record fiscal 22 performance and success executing our strategy is enabled by the long-term evolution of our business. First, we've continually enhanced our stable of leading brands. In the last several years, we've acquired well-positioned brands such as Summer's Eve and Theratiers while divesting non-strategic and poorly positioned brands such as our household cleaning business. We've successfully balanced this efficient deployment of capital with operating at gradually lower degrees of leverage. In fact, we finished fiscal 22 at 3.8 times our lowest level of leverage since the acquisition of certain GSK brands back in 2012. We often get asked, how are you different? And our ability to brand build continues to stand out. By using numerous strategies to drive growth across our categories, we've enabled long-term share wins and growth for our retail partners. I'll lay out some examples of marketing strategies later on. So in summary, these efforts have laid ground for consistent long-term growth. Our success and portfolio evolution leave us with a business underpinned by strong financial attributes and an impressive portfolio of leading and well-positioned brands. This positioning has momentum and gives us a conviction in our ability to execute the strategy shown on slide seven. Our success this fiscal year is just the most recent example of our proven ability to execute our three pillar value creation strategy shown on the page. When we meet with investors, they often note hearing a consistent message from us over time. and we pride ourselves on executing this disciplined strategy that has resulted in a resilient business that continues to deliver value. First, we use our proven marketing strategies to support our leading portfolio of brands. We'll spend some time digging into examples of this later. Second, the asset-light model we operate leverages our leading financial profile to enable robust free cash flow. And third, The model is repeatable as we've grown. This is thanks to the prior two points and our ability to use cash flows effectively and efficiently through disciplined capital deployment. The result of this execution is clear in our financial performance. We've had a successful multi-year compound annual growth rate over the last three years. This includes organic growth in excess of our long-term target of 2% to 3% as well as double-digit earnings growth. The performance is despite the backdrop of resurgences of COVID-19 variants, supply chain challenges, and inflation. By executing these strategic pillars, we continue to enhance our business for long-term success and value creation. So with that, let's turn to the next section and discuss investing for growth in more detail. Slide nine shows the distinct advantages of Prestige's portfolio and the benefits of the evolution just discussed. First, on the left side of the page is the diversity of the portfolio and the successful development of multiple scaled category platforms, such as Women's Health, iCare, and GI. With a diverse portfolio of brands across many categories, we are nimble in identifying opportunities and able to mute the impact of any short-term category changes like we saw at the start of COVID-19. Second, the right of the page shows many of our leading brands, which are subsegments within these platforms. With two-thirds of our sales coming from number one brands, we are able to think about brand building from a position of leadership focused on utilizing consumer insights and as a byproduct grow categories for retailers. Turning to slide 10, you see the various marketing strategies facilitated by the strong portfolio starting point. Our numerous brand building strategies focus around driving long-term category growth. Each are executed based on opportunities identified from consumer insights that are specific to each brand. The end goal of each of these actions is long-term success across channels and growth of the categories to which we are stewards. Let's turn to slide 11 to begin walking through each of these efforts in more detail. It all starts with consumer insights. On the page are examples of big, thematic consumer insights that enable two of our leading brands, Hydrolyte and Dramamine. Even with majority shares of their categories, they've been able to further expand their sales and the categories they compete in. For Hydrolyte, we learned from consumers that they think about oral rehydration broadly and Hydrolyte as a solution for more than just rehydrating following sickness. We've leveraged this by providing additional consumer solutions that solve for these expanded usage occasions like exercise and investing in messaging to raise awareness. The result is gradually expanding household penetration up nearly two points since fiscal 19. For Dramamine, we've learned from consumers over time that they want to avoid motion sickness and nausea, but they also don't want to become drowsy. We've provided a consumer solution to this by introducing non-drowsy offerings. This has led to its expanded share in motion sickness and successful expansion into the nausea category. These are just two examples where leveraging consumer insights help drive long-term growth. Now let's turn to slide 12. Another factor in our brand building success is being nimble. We continuously execute an agile marketing strategy that adjusts for consumer needs in real time. This strategy is particularly noticeable during this fluid environment related to COVID-19 and other macro changes. One example is Summer's Eve, where we've had numerous new product launches and marketing designed to meet consumer needs as they think about hygiene. During COVID-19, this included focusing marketing efforts around Summer's Eve active products for home workouts. More recently, it's included Summer's Eve Amber Nights, Sensitive, and fragrance-free products that connect with consumers' needs as they evolve their daily behaviors. A second example is Compound W, where we focused on the message of treating warts rapidly at home during the height of COVID-19. As consumers look for alternatives to a doctor's office visit, we invested in our Touch of Science campaign in fiscal 22, which helps remind consumers of the benefits of treating at home with Compound W. In summary, a company's agility around brand building is a strength, that allows each of our brands to succeed in various environments. With that, let's turn to slide 13. Another element to our marketing success is the ability to align our investments and product offerings with channels that are important to consumers. As various channels have grown in prominence over time, we've been there. with early investments driving sales growth and effective management enabling a consistent profit profile across channels. The most recent example is e-commerce. The channel continues to expand even off a higher base following COVID-19 and is quickly approaching 15% of our sales. Multi-year investments have driven solid performance where we've invested in user experience and digital campaigns to highlight our leading brands for consumers across channels. The result is our market share often being higher than in brick and mortar. So in summary, we remain well distributed across channels, we are investing where consumers are shopping, and we are confident in the stability of our margin profile as consumers evolve their channel shopping habits over time. Now let's turn to slide 14 to discuss innovation. Innovation continues to be a key part of Prestige's brand building. We operate with a multi-year pipeline of product development concepts to ensure we continue to match the needs of consumers. We do this in multiple ways. Innovation can be through technology, bringing efficacious products that substitute a doctor's visit. Compound W nitro fees is an example with freezing technology not found in other OTC treatments. Innovation can also be solving an unmet consumer need, like Goody's Hangover, where its goal is to solve on-the-go pain relief in powder form with great taste. Innovation can also be focused on a superior and elevated consumer experience. An example is Dentek Ultimate Guard, with its comfortable design that's superior to competing nighttime dental guards. So we have a long history of innovation, and we have another great year of introductions planned for fiscal 23. Three products, Summer's Eve Spa, Dramamine Nausea Chewables, and Clear Eyes Allergy help expand our brands into adjacent categories. For Summer's Eve, the Spa line expands the brand into luxurious self-care that consumers seek. For Dramamine, the new Chewable Nausea product helps consumers treat nausea without getting drowsy in a great-tasting ginger format. Clear Eyes Allergy is a prescription-strength, once-a-day drop designed for relief from indoor and outdoor allergies. We also have a number of additional launches in eye care shown on the page that we're excited about for both Clear Eyes and TheraTears. In summary, our marketing strategies Consumer insights, agile marketing, channel investments, and innovation each play a valuable role in our success. Turning to page 15, we can see what the result is for our brands, leading number one positions that allow us to be focused on category and market share growth. As you can see on the right of page 15, nearly all of our largest brands hold a number one market share, and many of them lead by a wide margin. Over half of these brands have a greater than 50% share. This is not a coincidence. Consumers continue to seek their trusted healthcare brands as they prioritize their health, and we continue to emphasize brand building, which grows categories and extends our brands. If there's one takeaway from learning about our marketing today, it's the benefits of having a portfolio of leading brands. We are proud of our portfolio successes and look forward to continuing a focus on long-term brand building. With that, I'll turn it over to Chris to walk through the financial aspects of our business model in more detail.