Good day, ladies and gentlemen, and welcome to the Prestige Brands Holdings Incorporated Q3 2017 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. I would now like to turn the conference call Mr. Phil Terpolilli, Director of Investor Relations. You may begin, sir.

Thank you, operator, and thank you to everyone on the phone for joining us today to discuss our 3Q results. As a reminder, there's a slide presentation which accompanies this call. It can be accessed by visiting prestigebrands.com, clicking on the Investor link and then on today's webcast and presentation. During this call, management may make forward-looking statements regarding their beliefs and expectations as to the company's future business prospects and results. All forward-looking statements involve risks and uncertainties, which, in many cases are beyond the control of the company and may cause actual results to differ materially from those in forward-looking statements. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this conference call. A complete Safe Harbor disclosure appears on page two of the slide accompanying the call. Additional information concerning the factors that may cause actual results to differ materially from these forward-looking statements are contained in the company's annual and quarterly reports which are filed with the U.S. Securities and Exchange Commission. As a reminder, some of the information contained in this presentation includes adjusted results, which exclude acquisition-related and other items. The reconciliation between adjusted results and reported results is included in today's earnings release along with the full set of disclosures about our non-GAAP financials. Now, I'd like to introduce Ron Lombardi, President and CEO; and Christine Sacco, CFO, of Prestige Brands.

Thanks, Phil, and good morning, everyone. On today's call, we will cover the highlights of our third quarter performance, review the financial results, and finish with an update of our full year outlook. At the end, as the operator mentioned, we will open up the call for questions. With that, let's turn to page five and start. We are very pleased with our solid third quarter results and trends over the first nine months of the fiscal year. In the third quarter, many positive factors contributed to our strong results. First, we saw a continuation of growth across our portfolio with net sales increasing over 8% to approximately $217 million in the third quarter. This performance included strong organic growth of 2.8%, while our Invest for Growth portion of the portfolio grew 4.3% versus the prior year. DenTek also contributed $17.3 million of revenue in the quarter and we continue to be pleased with the brand's performance over the last 12 months. Second, we experienced strong bottom line growth of over 15% with adjusted EPS of $0.61 during the quarter as our profitability benefited from our record level of sales. Third, we realized adjusted free cash flow of nearly $50 million, which was used to pay down debt and build our cash position ahead of the Fleet acquisition. Finally, we continued to execute our M&A strategy as we divested three non-core brands and signed the Fleet transaction during the quarter. Turning to slide six, we have an overview of our year-to-date results. For the nine-month period, we generated revenue growth of just over 7% versus the prior year and organic growth of 1%. Our international business also continues to perform favorably, in particular organic sales growth at Care Pharma has grown in the high single digits year-to-date. We also realized…

Thank you, Ron, and good morning, everyone. As Ron just described, and is summarized on slide 16, we are pleased with our fiscal third quarter and year-to-date results. Our results for the third quarter include revenue growth of 8.3%, adjusted EPS growth of 15%, and adjusted free cash flow generation of just under $50 million. Moving on to slide 17, we report our consolidated fiscal third quarter and nine-month period, ended December 31, 2016 results. As a reminder, the information in today's presentation includes adjusted results that are reconciled in our earnings release. For the third quarter, revenues increased 8.3% versus the prior year and for the nine months ended December 31, revenues increased 7.2%. These results reflect our strong and diverse portfolio of brands, including increases in our international and DenTek businesses. Organic revenues increased 2.8% in the third fiscal quarter on a constant currency basis versus the prior year, and for the nine months ended December 31, organic revenues increased 1% on a constant currency basis. These results were driven by continued strong consumption for our Invest for Growth portfolio. Our second (sic) [third] quarter gross margin of 57.5% was in line with our expectations with the change versus prior year primarily reflecting the impact of sales mix from strong growth from DenTek, which has a lower gross margin than the overall portfolio, but has a more consistent EBITDA margin. A&P spending was 14.2% of net sales for the third quarter, an increase of $800,000 when compared to the prior year. A&P spending for the nine months ended December 31 was up $2.6 million versus the prior year, and reflects our continued focus on investing in brand building and new product development within our Invest for Growth portfolio. Continuing further down the P&L, adjusted G&A spending for the…

Thanks, Chris. Let's continue on slide 20 with an update to our fiscal outlook and some closing remarks. For fiscal 2017, we are reaffirming our outlook for revenues, adjusted EPS and adjusted free cash flow for the full year exclusive of the Fleet acquisition, which closed January 26. For net sales, although we are pleased with our Q3 performance, please remember that recent strategic divestitures in Q3 will have an impact on our fourth quarter top line results. As a result, we anticipate top line revenues to come in at the lower end of our guided range for the year. For adjusted EPS, we anticipate coming in at the high end of our $2.30 to $2.36 range or plus 6% to plus 9% year-over-year growth, based on our strong profitability year-to-date. Finally, we are reaffirming our adjusted free cash flow outlook of $190 million or more for the year. In closing, our legacy business continues to perform well and is well-positioned to gain share while generating industry-leading free cash flow heading into fiscal 2018 and beyond. We are excited about the opportunities ahead for us with the recent acquisition of Fleet and look forward to the integration process that is all ready off to a swift start. With that, let's open up the lines for questions.

Our first question comes from Joe Altobello with Raymond James. Joseph Nicholas Altobello - Raymond James & Associates, Inc.: Hi. Thanks. Good morning. So, first question, I guess, Ron, I just missed that quick comment that you added right there about revenue in the fourth quarter being to the lower end of expectations. Could you repeat that?

Yes. Sure. Good morning, Joe. So what I said was, we're keeping the full year guidance at plus 4.5% to plus 6%, but expect to be at the bottom end of the range as a result of the brands we divested in Q3. Joseph Nicholas Altobello - Raymond James & Associates, Inc.: Got it. Okay. Thank you. So, if you look at shipments versus consumption for your Invest for Growth brands, I guess, the last few years, obviously, shipments have trailed consumption. This year, year-to-date and particularly in the third quarter, you saw a nice sort of reversal of that. How comfortable are you that that is now behind us, I guess the destocking is now behind us and could you see a potential of a restock as we enter fiscal 2018?

Sure. So, first of all, Joe, as we've talked about in the past, the consumption numbers and our sales numbers don't reconcile exactly. So you don't get an exact one for one change in revenue from period to period in relationship to the change you see in consumption. So, for the first thing, if you go back to the second quarter, we had a bigger impact by our top five customers in terms of consumption versus our shipments to them in Q2. I think it was over $5 million of an impact, closer to $8 million. Chris just corrected me. In Q3, we saw amongst our top customers, a very close relationship in total between consumption and shipments. So we didn't actually realize the benefit in Q3 from what we saw in Q2. So there was no pickup, if you will. So sales closely matched consumption for us for that group. So that's the first thing. The second is, we've been facing a slight headwind for quite a while now. Retailers in general reducing inventory through lots of different ways, whether regional grocers are closing their own distribution centers and moving to a distributor to supply them, or reductions in store accounts and so forth. And we continue to expect that will happen in the future, Joe. Joseph Nicholas Altobello - Raymond James & Associates, Inc.: Okay. And just one last one if I could. Fleet closed a little bit sooner than I guess I would have expected in the quarter. So is there any contribution to earnings per share in fiscal 4Q?

Hey, Joe. This is Chris. As you think about Fleet for the two months for the end of fiscal 2017, I think on the top line, we had filed an 8-K in connection with our Lender Presentation, you could look at the LTM sales ended 9/30 for Fleet of $205 million and take two months as an estimate. And then for the transitional sub-period, we expect adjusted EPS to be essentially breakeven, maybe slightly better. Joseph Nicholas Altobello - Raymond James & Associates, Inc.: Okay, great. Thank you.

Thank you, Joe.

Our next question comes from Stephanie Wissink with Piper Jaffray. Stephanie Schiller Wissink - Piper Jaffray & Co.: Thanks. Good morning, everyone. Just a couple of follow-up questions, Ron, on your comments on the manufacturing facility, sounds like there may be some near-term opportunity than maybe what you had talked about before. So, if you could elaborate a little bit more on what products within your portfolio you think you might be able to leverage that capacity, that would be very helpful.

Sure. So, let me answer that question kind of in three categories. The first is there's R&D, new product and quality resources at the factory that we think that in combination with what we've got going on here in Tarrytown can be additive. So, combining and coordinating those efforts can be beneficial. That's the first part of it. The second is, we could take a look at their purchases and see where we can work together to combine that level of purchases for purchasing synergies to help reduce our cost by bundling purchases across common suppliers. And those are nearer-term activities. And then mid-term and longer-term is the opportunity to do what I have been calling, fill the factory, which is find the right products in our existing portfolio that fit within the manufacturing process and infrastructures in Lynchburg and look to move those products there over time. And moving any product that's OTC can take two years or more, it's not unique to us. So that's more of a longer-term opportunity, but certainly high on the list of things we want to execute against. Stephanie Schiller Wissink - Piper Jaffray & Co.: And, Ron, are there any investments that you need to make in that facility in terms of technology or process that we should be thinking about in terms of CapEx?

Sure. So that facility has been well invested and managed for quite a while. So we didn't step into a situation where we need to catch up on capital spending. We'll look to make investments to help make them more efficient and expand their capacities and then longer-term, we'll evaluate what investment might be needed that's associated with the products that we might put in there. But I think, we've talked about it in the past even that scenario isn't going to be highly capital intensive. Stephanie Schiller Wissink - Piper Jaffray & Co.: Final question for us is just on international, that was a nice source of upside in the quarter. Can you talk about your portfolio today and maybe some of the recent acquisitions and how you think about the international opportunity for the brand portfolio going forward?

Sure. So the Care business has been performing very well for quite a while now, including the first nine months of this year. That's based out of Australia. The Fleet business has a nice concentration of business through their Singapore office and through the Asian region. So, we will be looking for opportunities to combine our efforts there to take advantage of an increasing scale in that region. About 20% of Fleet's business is international with – highly concentrated in that Asian region. So, we are excited about that opportunity. With the DenTek acquisition that we completed about a year ago, they were more concentrated in Europe with a nice business in the UK and a growing business in Germany. And we combined that into our efforts in that region and have been able to take advantage of looking to grow that part of the DenTek and the Prestige business as well. So, these are nice small incremental opportunities for us that are lower risk in terms of execution and looking to grow. So, it's fit very nicely with what we have internationally and is the right size incremental steps for us in those regions. Stephanie Schiller Wissink - Piper Jaffray & Co.: Thanks, Ron. Appreciate it. Best of luck.

Thank you, Steph.

Our next question comes from Jason Gere with KeyBanc Capital.

Good morning, guys. Nice quarter. I guess two questions. The first one if you could just go back on some of the earlier questions on the sales view for the fourth quarter. Two parts, obviously seeing the low end of the 4.5% to 5% and then even just the organic sales still I think, you are comfortable with the 1.5% to 2%. I do understand from the total sales perspective, I guess, if you could give some context in terms of the divestiture impact. I mean, we are estimating maybe 3.5% hit there. And if that's the case, and FX is negligible, it would still imply that based on your organic sales guidance and based on the strength you saw in the third quarter that the fourth quarter organic sales would be kind of flat to up 1%. So I guess, all that put together into a question is, DenTek's coming into the comp base, the flu season might be picking up now, so just wondering if you could talk about what you are seeing out there that keeps that range where it is? Why it wouldn't be a little bit better? And I do know the challenges of what you're dealing with the retailers, but I'm just kind of wondering if there is anything that we're missing or any additional color you can put there?

Sure. So, first of all, we see variability in our business quarter-to-quarter, whether it changes in underlying incident levels or changes in order patterns from our retail customers, right? Go, just take a look at each of the three quarters this year. First quarter was kind of flattish. Second quarter was a tougher quarter for us. Third quarter rebounded in a number of ways. So that's first of all the underlying background of which we start by predicting what might happen this quarter. The second part around organic growth, we do have a number of benefits in Q4 for us starting with DenTek now falling into the organic growth number for us. So, inherent in our Q4 outlook is an organic assumption of around 2%, 2.25% growth in Q4. Keeping in mind, the fourth quarter last year was particularly strong. So, we do have a tough comp against it. But cough/cold does show some improvements over last year, but as a reminder, it makes up about 7.5% or so of our new pro forma business. So, it doesn't move the needle like it used to when it was nearly a quarter of our business. So I think there are some questions to your answers. Did we hit them all?

Okay. Yes. No, it's fine. And in terms of the net divestiture, it might be helpful too, that the impact was kind of in the ballpark in terms of like low single-digit to mid-single-digit impact from the divestitures, the net effect, Chris?

Yes, the way we think about it, the impact to our year-to-date results for the divestitures is around $6 million top line, if that helps, per quarter, sorry. That's the impact to Q4.

Okay. No, that's great. And then the other question I have is that I know you talked about some of the categories, you saw consumption pick up. I think you talked about eye and analgesic. Were there any categories that you were hoping to see kind of a reacceleration that you didn't or is it more of the category rather than the retailer? Are there any merchandising efforts that you're doing to maybe try and reinvigorate some of that growth? So just maybe some color around that.

For starters, we compete in a lot of different categories. So we tend to look at the summation of it. In general, the third quarter in total was generally an improvement for us and we felt good about it and what to expect for Q4, so that's the first part of it. And then in terms of retailer impact, we're not really expecting anything meaningful to hit us in the fourth quarter.

Okay, great. Thanks for the color on the questions.

Sure. Thank you, Jason.

Our next question comes from Jon Andersen with William Blair. Jon R. Andersen - William Blair & Co. LLC: Hi. Good morning, everybody.

Morning, Jon. Jon R. Andersen - William Blair & Co. LLC: A question on Fleet. At this point, as you think about not the fourth quarter of 2017, but as we think about fiscal 2018, which is fast approaching, how are you currently thinking about the economic contribution or the accretion from the Fleet business? And I know you've talked about certain expectations, but kind of as you think (30:48) about it all-in in the context of the sales profile of the business, the margin profile of the business, your new term loan structure, could you talk a little bit more about what kind of level of accretion we should be expecting? Thanks.

Yes. So, first of all, we'll give a full outlook at the May call for fiscal 2018 for the total business, and we'll give some color around what to expect for contribution for the Fleet business in fiscal 2018. A couple of general comments, when you compare the Fleet opportunity to the other acquisitions that we've done, in general, this business has more momentum and has a very strong history of being well managed and heavily invested behind. So we're stepping into the shoes of a very well performing, strong performing business. And our intent is to continue to invest behind that and expect the solid trends that Fleet has realized in the last couple of years to continue into 2018. I think if you go out – go back and look at how we talked about the contribution of the business when we announced it, sales growing on top of the base of $205 million and an underlying EBITDA contribution that resulted in a 5.7 times EBITDA leverage this quarter. You can back into those numbers, Jon, but more importantly, we'll give a full detailed outlook for fiscal 2018 in May. Jon R. Andersen - William Blair & Co. LLC: Great. That's helpful. I had a question about kind of what you're seeing from a channel perspective in the business, the core business. Are there particular channels that where you're seeing more health than other channels? And if you could provide a little bit of a view of that and it sounds like the inventory destock that affected the business in Q2 didn't kind of roll forward to Q3, although there's a little bit of a headwind here just from an overall industry effort to moderate levels in the channel. But what are you seeing specifically in terms of some of your channels? And then separately, is e-commerce even a factor for you at this point, and how are you kind of tackling that? Thank you.

Yes. Maybe I will start with the last question and then work backwards. So e-commerce for us is a very, very small part of our business, although it's growing very rapidly. To begin with, the categories we compete in by nature, e-commerce isn't a place that consumers go to, to look for products, right, we are incident-based generally. So if you wake up and you need a product, if someone in your household is suffering, it's not go online and buy it, it's get in the car and go to the local retailer to acquire it. So, our strategy and our focus is to be there, have as many of our products available online. And then we have many of them today through a number of different e-commerce partners. We want to support all of our retailers' e-commerce efforts, not anyone in particular, and be there, so that when our customers do show up online to buy products, we are available and ready for them. So that's our strategy, is to be there when they show up. So that's the e-commerce part. In terms of the rest of the channels we compete in, I would say for the most part they have all been fairly steady. No channel in particular has driven our growth to-date. Although, we continue to do well in the convenience channel, that's an ongoing effort for us as we look to continue to expand our distribution and the products you can find in the convenience channel. So in general, they are all fairly steady for us. And then I think the last question you had in that group was the ongoing retailer focus on being more efficient in the level of inventories that they carry. We would expect that to continue as well. Jon R. Andersen - William Blair & Co. LLC: Great. Last one for me is on the advertising and promotion investment. You've been up. The ratio has been hovering around 14% or so. And I know that's actually up quite a bit from, if you go back five years or six years. Are you at a level here in this range where you kind of feel like you're providing the level of support needed particularly for, I guess, the Invest for Growth brands, such that you're kind of getting the ROI you want on that and don't see a need to kind of step that up. And then the second part of that question is, are you seeing any kind of shift in the kind of spending you're doing where you're maybe moving away from traditional advertising investment and doing more kind of in-store shopper marketing type programs which you may be getting an opportunity to do more of that now that you've got larger scale brand. Thanks.

Yes. So in general, digital is a growing area of investment for us. So, in general, we're looking to continue to grow and expand our activities around that. In terms of the percent of sales, although, we are mindful of it, we keep an eye on it. We manage our A&P spending based on dollars. And if you factored in the effect of FX this year, our spending on a year-to-date basis is actually up about $5.5 million over last year, which is the way that we look at it. So we build up our activities and initiatives brand by brand, dollar by dollar and execute that way. So back to your question about, are we shifting the kind of A&P activities, we have a different answer, brand by brand. So, in some cases, we're doing a lot more digital than we used to. In some cases, it's flat. For example, Efferdent is a brand that digital activities are more moderate when you compare it against Dramamine where we continue to grow the focus on digital there, as well as a number of other brands. So, we don't have one answer, right. We answer that question and build our marketing plans brand by brand, based on the kind of consumer we're trying to connect with. But, in general, we're going to look to continue to increase dollars that we invest over time to grow our top line. Jon R. Andersen - William Blair & Co. LLC: Thanks. Congratulations on a nice quarter.

Thanks, Jon.

Our next question comes from Linda Bolton Weiser with B. Riley. Linda Bolton Weiser - B. Riley & Co. LLC: Hi. Could you maybe just refresh us on some of the key innovations that you've had so far this fiscal year? And then, just going forward, are there any particular categories that you think lend themselves well to innovation that you think you'll be focusing on a lot in FY 2018 for innovation? Thanks.

Sure. So, new product launches we've had this year, I will just focus on some of our core brands and the key new products. We have been supporting the Clear Eyes Preservative pre-launch which we think is a major innovation in the category. Compound W and Nix have also benefited from some new technology and innovation that we have launched this year, Linda. That's an important part of our marketing initiatives for all of our brands. We develop long-term new product development pipelines and plans and execute against them on an ongoing basis. We generally don't discuss what we are going to launch next year in advance of it for obvious competitive reasons. But that's a key pillar in our marketing and A&P initiatives in terms of how we look to not only grow our brands and our share, but over time grow the category that we compete in and lead. So, for Dramamine Naturals has not only been a big driver in the Dramamine growth, but it's also been a big driver in increasing the overall size of motion sickness category. And Fleet, as I said before, has been very well managed and invested behind and a result of that has been a very good and solid new product development pipeline that we are excited to get behind and look forward at launching a number of new products, including in Q4 here. So we will have some news on some new products that we'll be launching over the next few months for the Summer's Eve brand. Linda Bolton Weiser - B. Riley & Co. LLC: Great. Thanks very much.

Sure. Thank you, Linda.

Our next question comes from Frank Camma with Sidoti. Frank Camma - Sidoti & Co. LLC: Good morning, guys, congratulations.

Thanks. Good morning. Frank Camma - Sidoti & Co. LLC: Just two quick questions. One is a follow-up on the promotional activities just to make sure I understand this, because sometimes you have activity that really just goes against revenue, right, and that revenue charges sometimes it actually goes down into actual dollars. Can you explain how sort of that has evolved over the last couple of years and maybe whether product mix impacts that?

Sure. There are a number of brands in our portfolio that respond well to promotional in-store kind of activity. In others' words, it's less impactful. For example, in the vaginal yeast infection, the VAF category, at shelf activity doesn't tend to move the needle for us there as much as maybe the eye care or the denture cleaning in the Efferdent category. So that's a big part of the consideration of where we're going to do those activities. The other thing is as a brand building company, in-store promotional activity isn't a really strong long-term brand building lever. It doesn't build the base and build long-term connections in association with consumers. So, as a brand building company, we would tend to put our dollars in other areas rather than promotional. But the fact of the matter is it's effective in certain cases and helpful not only to our effort, but the retailers, it's a (41:51). Frank Camma - Sidoti & Co. LLC: Right.

So that's how we begin to look at it. Is it beneficial to what we are trying to accomplish with the retailer partner? Is it beneficial to what we are trying to do short-term? And then are we better off reallocating those dollars to long-term brand building initiatives? So, again, each brand has a little bit of a different formula. When you think about those factors, but in general, that's how we think about it. Frank Camma - Sidoti & Co. LLC: Okay. And then the second question is related just specifically to Monistat and where you are at with doing sort of the doctor detailing and I assume that or maybe I'm wrong, but the dollars you spend in that are actually through A&P or are they through another categories when you spend those actual dollars?

Yes. So, our doctor detailing in our healthcare initiatives are in the A&P line, Frank. That's a long-term initiative as we have talked about in the past. We continue to feel good about that approach. Over time, you tweak the things that you do, but the overall strategy around communicating to the healthcare practitioners about the benefit of Monistat versus prescription is the right thing for us to do. It's the right area of investment. And we think it's working. We continue to build share for Monistat even with some headwinds where underlying incident levels were down earlier in the year. We are still building our share there. So we continue to think it's the right initiative for that brand over the long-term. Frank Camma - Sidoti & Co. LLC: Do any of the other newer brands make any sense in that category or in that products like Summer's Eve or Fleet or is that just they're already widely known? I mean, I'm just curious.

Yes. Both the Fleet brand and the Summer's Eve brand had their own healthcare communication initiatives. They were going to healthcare practitioner conventions and that kind of thing and doing a little bit of doctor detailing around the Fleet brand. So we will look to continue to invest in that and see where combining our Monistat efforts makes sense. Frank Camma - Sidoti & Co. LLC: Okay, great. Thank you.

Thank you, Frank.

Ladies and gentlemen, this does conclude today's question-and-answer period. I would now like to turn the call back over to our host for closing comments.

Thank you. I'd like to thank everyone for joining us today and have a good morning.

Ladies and gentlemen, this does conclude today's presentation. You may now disconnect and have a wonderful day.