Dean Siegel - Director of Investor Relations Mark Pettie - Chairman, Chief Executive Officer Peter J. Anderson - Chief Financial Officer Charles N. Jolly - General Counsel, Secretary

William Chappell - SunTrust Robinson Humphrey Joseph Altobello - Oppenheimer & Co. Analyst for Reza Vahabzdeh - Lehman Brothers Olivia Tong - Merrill Lynch Mimi Noel - Sidoti & Company Jon Anderson - William Blair & Company, LLC

Welcome to the first quarter 2009 Prestige Brands Holdings earnings call. (Operator Instructions) I would now like to turn the presentation over to your host for today’s call, Dean Siegel, Director of Investor Relations.

Welcome to Prestige Brands’ fiscal 2009 first quarter conference call. During this call statements may be made by management of their beliefs and expectations as to the company’s future operating results. Statements of management’s expectations of what might occur with respect to future operating results are what are known as forward-looking statements. 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 management’s expectations. Additional information concerning the factors that might cause actual results to differ from management’s expectations is contained in the company’s annual and quarterly reports that are filed with the US Securities and Exchange Commission. Now I would like to introduce Mark Pettie, Chairman and CEO.

In addition to Dean, with me is Pete Anderson, Prestige’s Chief Financial Officer, and also joining us is Chuck Jolly, our General Counsel. I’ll begin today’s call with an overview of our first quarter results including specifics on our work care business. Pete will then review the full financials for the quarter in more detail. I’ll follow that with highlights of our segment performance, our progress against the four strategic growth thrusts guiding our efforts, and our outlook for the balance of this fiscal year. We’ll then open the call for questions. So let’s get started with our reported total revenues for the first quarter which were $73.5 million, a 6.5% decrease from last year. As indicated in our press release this decline is attributable in large part to unsettled pricing dynamics in the cryogenic segment of the work care category which led to a 44% decline in our work care revenues. As I discussed on last quarter’s call, in March and April we significantly reduced list pricing on Wartner and Compound W Freeze Off respectively in response to actions taken by our major branded competitor. At the same time we reduced the number of applications in our Freeze Off product, also in response to a similar move by the same competitor. While the new pricing for Wartner was reflected in a timely fashion at many retailers, Freeze Off did not fully achieve reduced retails across our major customers until late July. Consequently price gaps versus our largest competitor were wider than expected throughout Q1 negatively affecting unit sales of our cryogenic products and to a lesser extent our Compound W salicylic acid products. Effective with the end of July our new prices are in place with all our major customers and we are beginning to see improved Freeze Off unit sales trends. The second factor affecting work care in Q1 was a change in the balance of competitive marketing spending compared to recent history. In addition to reducing the cryogenic prices during the quarter our largest competitor increased their work care spending against both advertising and in-store promotion versus last year. Conversely since we were still in transition to our new retail price structure during Q1, we elected to reduce our spending versus prior year until that transition was complete. While I won’t predict what competition will be doing with their spending in Q2, I can tell you we will be restoring support behind our proven advertising company and strong brand equities now that our retail pricing is in line. This will be very important as we move through the second half of the traditional six-month April to September work care season as work care consumption during this period historically skews to the latter three months. So while we expect work care revenues will continue to be down versus a year ago due to the significant cryogenic segment price declines, we do project improved performance relative to Q1 as we move ahead. Returning to our overall corporate performance, reported net income for the quarter of $7.8 million was $500,000 or 6.6% below last year’s reported net income of $8.3 million. Similar to the revenue story for this quarter, the decrease in net income compared to prior year was strongly influenced by the pricing dynamics in the cryogenic work care segment. Finally, we generated $15.3 million of free cash in the quarter. Our continued strong cash generation helped us pay down an additional $15 million on our term loan reducing total debt to $396.2 million at June 30. That’s the summary for the quarter, and now I’d like to turn the call over to Pete who will provide additional commentary and financial detail. Peter J. Anderson: As Mark mentioned net revenues for the quarter of $73.5 million were 6.5% less than prior year net revenues. Our operating income of $21.2 million was $1.9 million or 8.2% below last year’s operating income of $23.1 million and net income of $7.8 million was $500,000 or 6.6% below last year’s net income of $8.3 million. Cost of sales for the quarter of $34.3 million was $3 million or 8% below cost of sales in the prior year. As a percent of revenue cost of goods sold declined from 47.5% last fiscal year to 46.7% in the current year. During the quarter we benefited from a positive sales mix combined with the continuing positive effects of our systematic cost reduction program and the benefits of last year’s fourth quarter pricing increases taken on certain of our brands. Our advertising and promotion expense of $7.3 million was $500,000 less than spending of $7.8 million last year. Increased advertising and promotion spending against last year’s break-through innovation products, Murine Earigate and Comet Mildew SprayGel was offset by decreased spending of the Doctor’s Night Guard and Compound W brands. Spending behind Compound W was moved from Q1 to Q2 this year to coincide with the full reflection of the Freeze Off pricing transition Mark spoke about earlier. Our G&A expense of $8 million was $400,000 greater than prior year’s expense of $7.6 million. The increase was primarily due to higher stock-based compensation expense versus the previous year’s first quarter. Our legal expenses were flat with last year’s first quarter spending. As we mentioned on our last call the litigation to defend our Doctor’s NightGuard patents and trademarks is ongoing. As a result we anticipate legal expenses to continue to exceed what we would consider to be a normal run rate until this case is concluded. Interest expense of $8.6 million during the quarter was $1.1 million lower than the prior year as a result in the reduction of debt achieved during the past 12 months. Now let’s review the first quarter results by segment. Net revenues for the OTC segment of $39.2 million were $3.2 million or 7.5% less than the previous year due to sales declines on the Compound W Wartner, Doctor’s and Little Remedies brands. Those declines were partially offset by increases on Clear Eyes, Murine, Chloraseptic and New Skin. Our gross profit for the segment was $26 million, 3.7% below last year’s gross profit of $27 million. Gross profit as a percent of revenues was 66.1%, a substantial improvement over the prior year gross profit of 63.7%. The improvement over last year was due to favorable product mix, the continuing benefits from the cost reduction program initiated last year, and the positive benefits of the pricing actions taken on some of our OTC items in March. Contribution margin of $21 million for the segment was $200,000 or 1% less than the year ago quarter. Advertising and promotion spending for the segment of $5 million in the current year was $900,000 less than last year’s spending. Increased media spending on Murine Earigate was offset by decreased advertising for the Doctor’s NightGuard and a shift of Compound W advertising to Q2 when lower price Freeze Off products is fully available at retail shelves. Household products net revenues of $29 million were $900,000 or 2.9% less than last year. Sales increases for Comet led by Comet Mildew SprayGel were offset by declines on the Chore Boy and Spic and Span brands. Gross margin of $11.1 million was $400,000 or 3.5% below the prior year primarily due to the sales declines. The household segment contribution margin for the quarter of $9 million was $900,000 less than last year due to the gross margin decline combined with an increase in advertising and promotion spending in support of Comet Mildew SprayGel. Net revenues of $5.3 million for the personal care segment were $1 million less than last year. Gross profit of $2.1 million was $700,000 less than last year primarily due to the sales declines. Contribution margin of $1.9 million was $600,000 less than last year, again due to the gross profit decrease. Our free cash flow for the quarter which we define as operating cash flow less capital expenditures was $15.3 million. That represents a $7 million improvement over free cash flow of $8.3 million generated in the quarter ended June 30, 2007. The major driver of this improvement in free cash flow was a positive change in working capital driven by a reduction in accounts receivable. Our day sales outstanding at June 30 was 41 days, down significantly from the DSO of 48 days at the end of the March quarter and equal to last June’s day sales outstanding of 41 days. As Mark mentioned, our continued strong cash flow in Q1 helped us to pay down $15 million on our term loan during the quarter. On a trailing 12 month basis we have paid down $51.2 million of our term loan B debt. And now I’ll turn the call back to Mark who will provide additional Q1 perspective and discuss progress against our core strategic thrusts and the outlook for the balance of fiscal 2009.

Let’s get right into our OTC business where the work care dynamics I detailed earlier were the significant drivers of our 7.5% revenue decline. To a much lesser extent the absence of medicated cough/cold SKUs in our Little Remedies line and declines in the Doctor’s NightGuard business also negatively influenced Q1 OTC results. Spending a moment on Little Remedies, you’ll certainly recall us discussing our participation last fall in an industry-wide voluntary withdrawal of pediatric cough/cold items which we officially stopped shipping last October. Due to the inherently seasonal nature of these products the vast majority of their sales historically occurred in late Q2 through Q4 with Q1 being the lightest period. Nonetheless, the absence of these products in Q1 of this fiscal year contributed a little over 1 percentage point of the overall 7.5% OTC revenue decline. It is worthy to note that absent the impacts of work care and Little Remedies cough/cold items, the balance of the OTC portfolio grew over 5%. This performance was headlined by the continued strong momentum of our Clear Eyes eye care business where sales grew 13% and consumption was up 17%. The relaunch of our allergy SKU as Clear Eyes for Itchy Eyes coupled with the introduction of 1-ounce sizes on key SKUs and the impact of our Q4 pricing action were all contributing factors to this growth. Marketing support in the form of our inaugural radio campaign was also a significant growth driver. Our Murine ear business was again a bright spot within OTC with sales up 55% and consumption over 195% behind the continued success of last year’s Earigate launch. In particular the strong consumption reflects our commitment to fully supporting Earigate as it heads into its second year in market. While we began to lap last year’s Earigate pipeline sell-in late in the quarter, the majority of that lapping occurred in Q2 where year-over-year sales comps in this business will become more challenging. Chloraseptic enjoyed its second consecutive quarter of sales growth versus prior year due in part to the late-breaking cold/flu season which carried over into April. In addition, the decision by major retailers last fall to forego their historical large pre-season inventory build helped ensure they also exited the season with lower inventory levels allowing their Q1 reorder patterns to more closely follow consumption. We expect this retailer behavior to repeat this year as they once again wait to see how the cold/flu season unfolds before taking significant inventory positions. Rounding out the OTC segment, our New Skin and Dermoplast businesses averaged 6% growth while our Doctor’s business showed the effects of a continued intense competitive environment in the anti-[bruxis] category and one-time costs associated with our retail conversion to our new NightGuard Classic and NightGuard Advanced Comfort One Size Fits All SKUs. The retail conversion is now complete on these items and I’m pleased to tell you that although it was only introduced in February, the new Advanced Comfort item was the number one selling anti-bruxis SKU in the category in Q1. Now let’s move to our household business where our largest brand, Comet, grew over 6% led by Comet Mildew SprayGel. Introduced last year this innovative new approach to mildew stain removal continues to build share in the $70+ million mildew category while demonstrating the extendibility of the Comet brand. As with Murine Earigate, Comet Mildew SprayGel was backed with a heavy level of spending in Q1 and our intent is to continue that support throughout fiscal 09. Offsetting Comet’s growth were declines in our Chore Boy and Spic and Span franchises. The Chore Boy decline was largely due to a Q4 buy-in by wholesale distributors against our March price advance. The Spic and Span decline is principally related to lapping pipeline volume we enjoyed last year associated with new distribution of our antibacterial spray at a major mass merchandising customer. To a lesser extent, declines for both brands also reflect heavy levels of competitive new product activity. Finally, personal care results reflect our de-emphasis of this segment. It is worthy to note that our return to the iconic [Q-Techs] tear drop bottle which is now fully available in markets does appear to be having a favorable effect on our recent consumption trends, and we’ll be keeping a close eye on this as the key summer season progresses. Switching to our international business, total revenues were off 7% versus a year ago. Continued strong growth of our Canadian business which was up over 10% was more than offset by a decline in our other international business. As we’ve previously discussed, the performance of our non-Canadian international business reflects diversion activity in our year-ago Q1 base. We took steps to shut down that activity beginning in Q2 of last year which will allow for more normalized comps for this piece of our international business going forward. That completes our overview of Q1. While it was a difficult quarter from a performance standpoint, our major challenges were within our work care business and the underlying conditions there should improve as we move through the balance of the year. Importantly, we made good progress against the four strategic thrusts that underpin our sustainable organic growth plans. It is this progress that despite our Q1 results gives us the comfort to reaffirm our organic revenue growth projection of 2% to 4% for the full fiscal 2009. So let me now give you a bit more insight into this progress. As you may recall, the first of these strategic thrusts is a revised, more granular approach to running our portfolio calling for dedication of a greater share of our resources to our focus brands, those brands in our portfolio with the highest longer-term growth potential. Q1 represented the first quarter of implementation of this new strategy and our focus brands collectively grew over 6% during this period. This growth which we expect to accelerate in the coming quarters reflects the execution of a combination of factors applied to these brands. An example is more diverse and innovative marketing to garner improved efficiencies and effectiveness from our [A&P] spending. This was evidenced in Q1 by the addition of radio to our marketing mix and the implementation of new media buying efficiency strategies on two of our focused brands. We’re pleased with the results of both of these initiatives and plan to expand them across the portfolio in the coming quarters. In addition to factors such as these we also expect accelerated focus brand growth in the coming quarters to be driven by our second strategic thrust which is our increased emphasis on break-through innovation. For fiscal 2009 growth from break-through innovation will come from two areas. The first is the continued success of our fiscal 2008 introductions, Murine Earigate and Comet Mildew SprayGel. As I mentioned earlier both businesses experienced solid growth in Q1 as they began to lap their year-ago introductory period. As I also mentioned we envision backing these products up with strong year two marketing support to ensure they realize their full market place potential. The introduction of our innovative new allergy products which is occurring as we speak represents the second breakthrough innovation growth driver for fiscal 2009. As I profiled on our last call our Chloraseptic Allergen Block for adults and Little Allergies Allergen Block for kids are bringing consumers in the 700 million OTC allergy category a brand new way to combat their allergy symptoms. You may recall there are two clear advantages to this patented innovative technology as compared with current allergy relief products. First, it works outside the body to help prevent allergy symptoms rather than relieve them once they’ve occurred. And second, they’re drug free making it appealing not only to current category users but non-users as well. Retailer authorizations have been strong and both items have begun arriving in stores as we head toward the fall allergy season. Ahead of retail store resets certain of our customers including national chain drug accounts have already made these items available to consumers via their websites. Strong introductory support will begin with a national PR campaign later this month and advertising is scheduled to start in September as retail distribution gains critical mass. As mentioned in this morning’s press release it should be noted Q2 will see a heavy investment in launch activities such as these, the revenue benefits of which will be largely realized in Q3 and beyond. Naturally we continue to be enthused by this next generation of breakthrough innovation which will be a major contributor to the acceleration of our revenue growth as we move through the second half of this fiscal year. Equally importantly, in Q1 we made progress on filling the breakthrough innovation pipeline for the future. We also internally staffed a senior position dedicated to developing and executing our breakthrough innovation agenda which will help insure this strategic thrust remains a meaningful growth driver for us going forward. And it’s not just the larger breakthrough innovation initiatives that will help accelerate our growth this year. On our last call I also highlighted the imminent introduction of our new Chloraseptic Maximum Strength lozenge and spray items along with a new aerosol like form of our popular Little Remedies saline products. All these items have been well received by retailers and will be shipping within their cough/cold section resets which occur during this quarter. Our third key thrust is international growth with a specific emphasis on our Canadian business. During Q1 we took additional strides in this regard as the Canadian business grew 10% and we established the dedicated senior marketing resource to focus on fully capturing the Canadian growth opportunity. This individual is now responsible for all of our Canadian marketing and for working with our Canadian based broker partner with whom we unified the business last year. This single-minded attention o our Canadian franchise will allow for effective execution of the 10 new product launches and dedicated Canadian advertising we have planned beginning in Q2. With respect to the balance of our international business, we are expecting solid growth particularly in our second half as we lap the effects of diverting in certain markets and new marketing initiatives take hold. The UK market is expected to lead this growth behind our inaugural Murine television advertising campaign and broadly expanded distribution of that eye care product line in that geography. The fourth key thrust is building our internal and external organizational effectiveness and here we also made progress in Q1. I’ve already touched on the key internal activities through which we are aligning our organization with our new portfolio management strategy by among other things placing dedicated senior resources against breakthrough innovation in the Canadian growth opportunity. From an external standpoint our focus continues to be on the movement of a significant piece of our revenue stream from an indirect sales force to our own direct selling organization. In Q1 we made our first hire against this initiative and continue to be pleased with the quality of the candidates we are seeing to fill the balance of our identified positions. As I’ve mentioned before, the overriding imperative in this transition is getting the right people on board, and we will take the necessary time to ensure that happens in a quality fashion. That’s an update on our Q1 progress against our four strategic thrusts. We continue to be satisfied with the progress we are making and believe they position us to deliver on our 2% to 4% top line growth projection for this fiscal year. With respect to Q2 in particular, as I mentioned earlier we anticipate this to be a period of heavy advertising and promotional investment behind the launch of our new Allergen Block products with the majority of the revenue impact from this and the other new items I discussed occurring in our second half. Now let me briefly shift gears to touch on our cost situation and outlook. As has been the case with most manufacturers we have been affected by the current inflationary environment. Between the resins that comprise many of our packages and the basic cost of our distribution network, oil prices in particular have had an adverse affect on our underlying cost structure. However the combination of selective pricing actions, favorable mix and our internal systematic cost reduction program has protected our enterprise gross margins to date. Based on our current outlook we believe we are positioned to effectively manage a similar level of inflationary pressure for the balance of this fiscal year. We have a minor number of additional pricing actions affecting less than 10% of our revenue base scheduled for the end of Q2 and we will continue to actively monitor the cost situation while aggressively building a roster of additional productivity programs. Finally, with respect to full-year net income and EPS the combination of 2% to 4% top line growth, active gross margin management and utilization of our strong cash flow for delevering allows us to also reaffirm our expectation of growth for these bottom line items at a rate higher than that of our sales growth. To succinctly wrap up, we remain comfortable with our original growth expectations for full-year fiscal 2009 despite our first quarter performance. Our continued progress in implementing our strategic thrusts is at the heart of this comfort and I look forward to sharing the fruits of our implementation labors with you over the coming quarters. The call is now open for questions.

(Operator Instructions) Our first question comes from William Chappell - SunTrust Robinson Humphrey. William Chappell - SunTrust Robinson Humphrey: Maybe just kind of help us understand a little more color around the cryogenic side for this quarter. I know you knew the price cut going into the quarter so that shouldn’t have been a huge surprise. Did you just see no pickup in volume with the lower price point? Is it not really spurring any growth for that category? How should we look at that?

Bill I think the important takeaway is on the cryogenic products in our portfolio and in particular the Freeze Off product. The reflection of those price reductions that I spoke of didn’t occur across our major customers until late July. Essentially it took longer to get those reflected in the market place than we originally anticipated so as I mentioned earlier for the quarter it was primarily a price gap issue versus our major competitor that caused the performance we experienced. As I also mentioned at the end of July the pricing is now fully reflected at our major customers and we’re starting to see the benefits of that in improved cryogenic unit off-take going forward. William Chappell - SunTrust Robinson Humphrey: I understand that. I guess I was more just trying to focus on is it having its intending effect? Is it boosting the overall category back now that we have a lower price point or is it too early to tell?

It’s a little too early to tell because the dynamics as I mentioned up until the end of July remain unsettled relative to what we expect the new norm equilibrium to be. For the first quarter the total category was basically flat to modestly down but we’re going to have to wait and see how this plays out now that the new paradigm is effectively in place. I’ll have a better read on that certainly when we talk t o you at the end of the second quarter. William Chappell - SunTrust Robinson Humphrey: With regards to the new Allergen Block products, can you give us any color on ACV at this point, what the retail reception would be, and are the price points and margins at or above your current company average?

The price points and margins are definitely above average for our company and our OTC portfolio so that’s one of the attractive features of the product. With respect to authorizations and distributions so far, all the accounts that we expected to pick the products up have picked it up and we’re very pleased with where the distribution progress is relative to our original expectations. We clearly feel like we’re tracking our original expectations in that regard. William Chappell - SunTrust Robinson Humphrey: Because I have to ask the same question always, I assume top line if you’re looking at operating income growth this year, it can be faster than sales growth?

I wouldn’t necessarily draw that from an operating income standpoint Bill because we will be investing behind certainly the Allergen Block launch as well as continuing to invest behind year two in the other breakthrough innovations, Earigate and SprayGel. But certainly as you go down to net income and EPS you can have that expectation. William Chappell - SunTrust Robinson Humphrey: And that’ll largely be driven by lower interest expense I guess? Peter J. Anderson: Delevering is clearly a big boost there.

Our next question comes from Joseph Altobello - Oppenheimer & Co. Joseph Altobello - Oppenheimer & Co.: I just wanted to follow up on the top line here. If you kind of take the first quarter actual and basically project it out, you have to do basically mid-single-digit growth for the rest of this year to get to your guidance. How do we get comfortable with that given the fact that the cryogenic price adjustment will not be lapped until early next year and so you’re obviously going to have that weighing on results for the rest of this year, you’ve got other things like you’re comping the growth in Murine, you’ve got cost in inventory management on the part of retailers, and you’re also lapping the introduction of Comet Mildew SprayGel, so you’ve got all of this working against you in the back half of the year and yet you’re still looking for an acceleration of top line growth?

Yes, your statement is totally accurate Joe. Let me take it a point at a time if I could. I think your point on the cryogenic; you need to keep in mind that Q1 was a clear aberration for us relative to how we will expect performance to be in the work care segment ongoing. Clearly we expect cryogenic revenues in total to be down in the price decline but not nearly to the extent we experienced in the first quarter as we get our pricing right versus c competition in the market place. So the drag on our first quarter performance from cryogenics certainly won’t repeat itself as we move out in the proceeding quarters. With respect to the new product launches last year while certainly we’ll be coming up on lapping the introductions and the comps will get tougher, we do expect meaningful growth from both those items on a year-over-year basis as well, and I’m talking about Earigate and SprayGel, and that’s why we’re backing them with the strong year two spending that we are. And then as you look particularly to the back half of the year we clearly have strong expectations from the Allergen Block launch as well as the new items that I mentioned that are going in to cough/cold resets from Chloraseptic and Little Remedies, all of which will have the revenue benefits accruing to us principally in the back half of this year. The other thing not to lose sight of is that we have some very strong trends on some of our base focus brands. I talked to you about Clear Eyes which is a big piece of our OTC portfolio and where we continue to enjoy double-digit growth on a year-over-year basis on that item. That one is performing quite well for us. I talked about Canada and the double-digit growth we’re enjoying there and there are other parts of our portfolio which are experiencing strong single-digit growth as well. So there are a lot of fundamental kinds of baseline momentum in addition to the growth we’re projecting out of our new products that will compensate for some of the drags that you mentioned. Peter J. Anderson: The other thing to mention Joe is the first quarter that we just went through was the last quarter that we’re going to be lapping on the non-Canada international business. That’s absence the diversion. So beginning in Q2 we’re going to be apples-to-apples on the international side where that had been for the last year a pretty big drag on growth. Joseph Altobello - Oppenheimer & Co.: So 2Q revenues should be up pretty strongly then it sounds like?

I wouldn’t necessarily draw that conclusion Joe. Again remember the majority of the new product benefits are going to accrue in the back half of this year. Joseph Altobello - Oppenheimer & Co.: It’ll be up though, right?

We don’t give specific quarterly guidance as you know but as I pointed out in the monologue the back half of the year is where we really expect to see the significant portion of our revenue growth. Joseph Altobello - Oppenheimer & Co.: In terms of a statement you made Mark regarding your focus brands, you said they grew 6% in the quarter?

That is correct. Joseph Altobello - Oppenheimer & Co.: Was that sell-in or sell-through?

That is factory sales. Consumption on the majority of those brands followed very closely with the factory sell-ins. Joseph Altobello - Oppenheimer & Co.: How is that possible given that OTC was down 7?

Well remember, OTC includes work care.

Our next question comes from Analyst for Reza Vahabzdeh - Lehman Brothers. Analyst for Reza Vahabzdeh - Lehman Brothers: Could you talk about trends at retail? Any more color there? Are you seeing things change at all sequentially? Just any color there would be appreciated.

Are you talking about consumption in general or for our products specifically? Industry question? Analyst for Reza Vahabzdeh - Lehman Brothers: Actually both would be helpful.

In both cases for the categories in which we compete we aren’t seeing any major change in consumer behavior. Given the businesses that we are in are principally staples and by and large not premium price staples, they are businesses that consumers tends to gravitate to at least as far as these economic times have gone so far on a consistent basis. The only one where we’re seeing some change is at the household businesses where we see and have seen and continue to see some channel migration from the food channels over to the deeper discounting channels, mass merch and dollar store. When you talk about our OTC portfolio and OTCs in general, we see consumption holding up pretty well and no major changes in consumer behavior. Analyst for Reza Vahabzdeh - Lehman Brothers: Could I also get an update on the M&A environment or anything you’re seeing there?

As you know, from a company standpoint we are focused on driving our organic growth which means working our existing portfolio to the tune 2% to 4% top line growth we projected for the year. That as far as we see has not in any way, shape or form discouraged people from floating deal ideas past us on a very, very regular basis despite the fact that we’re on record as saying in the short run our focus is not on M&A. And if that’s a leading indicator, I would suggest that the M&A environment despite the current credit market at least for people trying to get deals on the table is as strong as it’s ever been for deals the size that we would ordinarily look at. Analyst for Reza Vahabzdeh - Lehman Brothers: Your use for free cash flow would be primarily? Peter J. Anderson: Pay down debt.

Yes, pay down debt. Our covenants don’t allow us to do anything other than either use it for acquisitions or to pay down debt until our debt to EBITDA ratio goes under 3.5 and currently we’re right around 4. Analyst for Reza Vahabzdeh - Lehman Brothers: And your ability to buy back bonds at this point? Peter J. Anderson: We could if we wanted to but given the current credit situation, it doesn’t make any sense to do so. The 9.25 bonds that we have are certainly well-priced for our credit rating at this point.

Our next question comes from Olivia Tong - Merrill Lynch. Olivia Tong - Merrill Lynch: I just want to talk first about receptivity to price increases. Are there some categories that were tougher and some that were easier than expected?

I would say universally, and I’m going to make this comment in the context of the increases we took in the late fourth quarter of our last fiscal year, universally we’ve found the environment to be more receptive than historically. It has been to these price increases. Certainly the retailers wanted us to go through the justification for them and show them the underlying input cost pressures that were compelling us to take the increases we did take, but their appreciation for what’s really happening in the market place has been heightened considerably versus where it had been say 18 or 24 months ago. So we didn’t get the historical level of push back on the pricing in the fourth quarter that we’ve gotten previously. And I think it fundamentally gets to what’s in the public domain. Everybody understands that there are stronger underlying inflationary currents today than there were 12, 18 or 24 months ago and the retailers themselves are experiencing that as we witness increases in retail pricing on even private label products. So I think it all converges on evidence that the retailers are much more sensitive and aware of the situation today than they historically have been and that has led to a more, I certainly won’t say permissive, but a more receptive pricing environment than the norm. And I would project that to be the case certainly for the next six to perhaps nine months. Olivia Tong - Merrill Lynch: Since you guys get your manufacturing done by a third party, are you shielded in any way from the commodities’ impact or did it eventually flow through basically by 100%? Peter J. Anderson: Ultimately it does. Some of the arrangements call for price resets on a quarterly basis or semi-annual basis but the reality is that ultimately there’s a direct pass-through. There’s no mark up on it but certainly whatever the commodity prices are we definitely tag.

Now we do have as I mentioned in the monologue a systematic cost reduction program that we put in place last year which is a program in many ways where we partner with our suppliers on trying to identify cost reduction opportunities. And where we do that in conjunction with a third-party manufacturer we have a participation program in terms of how we share back a portion of those savings with them. So there’s incentive on our third party suppliers to work with us on cost reduction opportunities in addition to as Pete mentioned trying to work with us to manage the commodity aspects of it. Olivia Tong - Merrill Lynch: Can you talk about some of the things that you’re doing on cost reduction, whether it’s slopping inputs or besides the obvious of getting more efficient?

I won’t get specific with you but really what we do is we look at every product on a regular basis and challenge ourselves and challenge our suppliers as well on the aspects that are principally under our control, which are product formulation and packaging costs as well as conversion costs. Our bottom line is in absolutely no way will we compromise the quality or the efficacy of our products that we deliver to our consumer but to the extent that we can control costs or reduce costs without any compromise in that key aspect, we will do so across all three of those cost elements. We also work with our third party logistics provider because we outsource distribution as well to try and find opportunities to reduce costs in the way we deliver our products to our customers. We we’re really pushing four different cost buttons as we move through each and every one of our products and look for opportunities to drive costs down. Olivia Tong - Merrill Lynch: And I want to go back to a question earlier. You’re sticking with your 2% to 4% outlook despite the fact that Q1 is coming in a little bit lower than you had anticipated, so are you expecting either Compound W to recover a fair portion of that in Q2 through Q4 or are your expectations for some brands going up?

As I mentioned, while we continue to expect the cryogenic revenues to be down on a year-over-year basis because of the price declines that were taken at the end of last fiscal year, we do not expect the performance to be as dramatically negative as it was in the first quarter. We expect the trends to correct. You take that correction and you complement it with the revenues we’re expecting to get in the second half of the year out of our new item launches and the continuing forward momentum on several of our focus brands, and that’s how you get to our comfort level with the 2% to 4% on a full-year basis. Olivia Tong - Merrill Lynch: I understand that but in order to offset what’s happened in Q1, just normalizing on Q2 through Q4 I understand that Compound W might still be down but nowhere near Q1 levels. You’ve got to expect that something is providing the offset to get you to that mid-single-digit level for the remainder of the year.

Right. And as I mentioned in particular our new products which will be pure incremental revenue relative to a year ago will be a big player in that. And again the vast majority of the revenue from those new product introductions which are either our Allergen Block products or our new cough/cold items will occur in the second half of this year. We continue to expect on a year-over-year basis strong growth from the base items that we have in our focus brand portfolio. We’re also as I mentioned although this will not contribute majorly, we are also planning mid-year price increases on less than 10% of our revenue base which will help us in the back half as well. Olivia Tong - Merrill Lynch: I know Q2 ad spend will probably be up as a percentage of sales on a year-over-year basis, but what about for the fiscal year?

From a spending standpoint, yes that will be up.

Our next question comes from Mimi Noel - Sidoti & Company. Mimi Noel - Sidoti & Company: Why was it that the new pricing and new pricing for the cryogenic line weren’t picked up until late in the first quarter where as you had anticipated it would happen earlier? What was the surprise? Why’d that happen?

We were flowing in Mimi as you’ll recall not only new pricing on Compound W Freeze Off but also new packaging because we reduced the number of applications, and in large part it was the timing of the flow-in of those new items to retail. The planning and reset timing of some of our key customers and the inventory levels of the old product that had to be worked through out there that slowed down the progression of the new items and the intended new pricing to retail versus our original expectations. As I mentioned also, in the case of Wartner because we weren’t doing anything with the packaging it was a clear cutover and that’s why for many of our major retailers the Wartner pricing that we affected went in much closer to our original schedule. Freeze Off was a more complex situation. Mimi Noel - Sidoti & Company: Because of the new packaging?

Right. Mimi Noel - Sidoti & Company: And I’m going to ask a question that I think is now being asked for the third time, and maybe I’ll just strip it down a little bit. First quarter was a disappointment. You had a surprise with the packaging. It didn’t happen as quickly as you thought. So you had that detriment happen but it was really a missed revenue opportunity and you’re not necessarily just shifting into the second quarter. So what is the offset now that enables you, what is the positive surprise to maintain full-year revenue guidance unless you want to say that instead of hitting the high end of the 2% to 4% you’ll hit the low end?

I’m not going to talk to where things are going in between the 2% to 4% but we are pleased with the uptake on our new products. In fact in a couple of instances they are outperforming our original expectations and the other piece although it’s not going to be a major contributor as I mentioned, the other piece which is relative new news to our original expectations for the year is the mid-year pricing on that less than 10% of our revenue base. That will be a contributing factor as well. And we are seeing frankly stronger-than-expected momentum on some of our focus brands. So it’s a combination of those factors that give us comfort. Mimi Noel - Sidoti & Company: Thos products that are outperforming expectations, that first point that you mentioned, can you name them?

I won’t go into a lot of detail there but let me just say that they are primarily housed in that group of brands that we consider to be our focus brands, the ones that we have determined we’re going to drive harder as part of our new strategy. So we’re seeing some early payoffs in certain of those brands from the redirection of resources to those parts of our portfolio. Mimi Noel - Sidoti & Company: Along the lines of guidance, I’m just wondering at this point why you can’t make a more explicit commitment to EPS growth at this point in the year, especially now that you say that it’s largely going to be driven by a delevered balance sheet and that’s something on which your visibility should be pretty good, and yet you’re still staying pretty vague on EPS? Why is that?

It’s just something that from the standpoint of corporate policy we prefer to do and as you say the aspects of it, particularly the delevering aspects of it, are pretty straight forward. We’re going to stand pat with the approach we’re taking for the moment. Mimi Noel - Sidoti & Company: Is it subject to change down the road perhaps?

I’ll say perhaps. You never say never. But at this point I wouldn’t put any kind of a high expectation on that. Mimi Noel - Sidoti & Company: The increase in the stock-based compensation, is that due to increased staffing? Peter J. Anderson: No. It is strictly due to last year when we initiated a current plan which is a three-year plan. What’s happening is this year we’re getting year two of three years worth of expense so you can expect that as we go through this year we’re going to continue to see a higher stock-based comp expense. And then next year is going to be the third year of the plan so that’ll be another step up. And after that we’ll be at a steady state. The size of the staff that gets stock-based comp is relatively the same. Mimi Noel - Sidoti & Company: And this compensation is not necessarily performance based it sounds like? Peter J. Anderson: It is performance based. The large preponderance of the expense is restricted stock that is absolutely based on hitting both revenue as well as profit objectives. Mimi Noel - Sidoti & Company: Well you did lower guidance in fiscal 2008 and you pre-announced in the June quarter. So what performance would justify the increase in the compensation? Peter J. Anderson: It is a matrix based on deviation around the budgeted revenue as well as EPS. We lowered our first quarter but as Mark indicated we certainly are reconfirming that for this year we’re going to maintain it.

Our next question comes from Jon Anderson - William Blair & Company, LLC. Jon Anderson - William Blair & Company, LLC: You mentioned this mid-year price increase on about 10% of the business based on volume. Any other color on that in terms of the level of the price increase?

I think it’s roughly similar to the level of the increases we took in Q4 which is around 5%. Jon Anderson - William Blair & Company, LLC: International diversion, which to your point earlier Mark, has been a drag during previous quarters. It sounds like you lapped that going forward. Is there a way to quantify what that drag has been for the past several quarters?

I don’t think Jon we want to get that specific other than to say it’s been significant. Jon Anderson - William Blair & Company, LLC: And beginning with Q2 that’s largely behind you at this point?

Yes. We’ll phase out of it in Q2 and it should be thoroughly behind us as we head into the back half. Jon Anderson - William Blair & Company, LLC: I was wondering also if you could talk a little bit about the progress that you’ve made and expect to make with the shift to the direct selling model and when you think that will begin to impact the quality and amount of shelf space for your product at retail?

You’ll probably recall that we’re talking about shifting a reasonable portion of our revenue from indirect to direct selling, roughly 30% of it, and it involves not a major headcount addition. We’re talking about three to four folks, one of which we’ve already brought on board, so we’re making steady progress toward that ultimate transition. From a timing standpoint as I mentioned earlier, my intent is to do it right rather than do it necessarily fast although I would certainly hope to accomplish this in the not-too-distant future. When that is fully completed, we’ll start to receive the benefits of that and in terms of the opportunities I mentioned earlier, better to rely on traits than faster speed to shelf on new items, just general closer communication with our customers on new product ideas, etc. We’re making steady progress on that and as I mentioned we’re also pleased with the quality of the folks we’re looking at to round out the balance of these positions. But we’re a ways away from completion at this point. Jon Anderson - William Blair & Company, LLC: Could you comment briefly on your inventory levels at retail versus the year ago period and are you comfortable with levels currently where they sit?

By and large we’re comfortable with levels. In particular we’re pleased with the way we seem to be coming into the new fiscal on Chloraseptic for the reasons I mentioned in the monologue. The retailers’ approach to inventory management has certainly been a benefit to both them and we think to us so ultimately to the entire supply chain on that key business going forward. The one that I mentioned earlier and that continues to have a bit of an overhang for us is Murine Earigate. But we’re experiencing as I detailed in the call very strong consumption behind the resumption of our advertising on that so we’re looking to get ourselves back to normalized levels of retail inventory on the Earigate products in the not-too-distant future.

There are no further questions at this time.

Thank you all for joining us today. We appreciate your time and attention, and we look forward to talking with you at the end of our second quarter.