Good day, ladies and gentlemen, and welcome to the Fourth Quarter 2012 Prestige Brands Holdings, Inc. Earnings Conference Call. My name is Chanel, and I'll be your operator for today. [Operator Instructions] As a reminder, this conference is being recorded for replay purposes. I would now like to turn the conference over to Mr. Dean Siegal, Director of Investor Relations. Please proceed.

Good morning, and welcome. As a reminder, there's a presentation that accompanies this conference call. You should access it now on our website at www.prestigebrands.com. Click on Investor Relations on the left and then on Webcast and Presentations on the right. It will be the first listing. 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 is 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. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of this date. A complete Safe Harbor disclosure appears on Page 2 of the presentation that accompanies this call. 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 it files with the U.S. Securities and Exchange Commission. Now I would like to introduce Matt Mannelly, CEO; and Ronald Lombardi, CFO.

Thank you, Dean. Good morning, everyone, and thank you for joining us this morning. We're very excited to share our results with you this morning. As Dean said, we will be using a presentation that we've used over the last several quarters of format. So with that, if I could ask you to turn to Slide 3, which is the agenda. What we'd like to do is first, I'll take you through some of the highlights of the fourth quarter. Then, what I'd like to do is step back and talk a little bit about what's made FY '12 so successful for us. At that point, Ron will then walk you through the financials for the quarter and the fiscal year end. And then finally, he'll turn it back to me, and I'll talk a little bit about where we are today and why we are confident in our future, based on our current strategy. So with that, if you would turn to Slide 4. I think to open, before we get into the quarter or annual results, I think it's important to step back and say, at the beginning of FY '12, we set some very clear goals for ourselves as a company. And I think you'll see that we exceeded the expectations of those goals in FY '12. We've talked quite a bit about our primary job, our number one objective is to drive core OTC growth and to invest in terms of marketing support to drive that revenue growth. And I think you'll see the results that have come out of that. A second objective for FY '12, after making the acquisitions of Blacksmith and Dramamine, was to continue to develop those brands to achieve their long-term potential after we successfully integrated them into the company. Again, something I think we did quite successfully, and the results speak for themselves. Our third objective is to stabilize Household through marketing support, new products and enhance distribution. I think we've had some success there this year. I think you'll see the results in the fourth quarter are better than the previous 3. So we're making progress against that segment. Our fourth objective was really to continue to focus our M&A efforts in the OTC arena as we optimize our portfolio over the long term. And I think everyone here is aware of the really transformative acquisition in OTC that we did back in January, well, with the GSK North American brands. And then, our fifth objective is we want to build for the long term and create value for our shareholders in the long term. But we want to maintain the strong financial performance that's come with Prestige over the last several years and specifically, the terrific free cash flow we have as a company. And the last objective, which we really have been working on for a couple of years, and I've been here now almost 3 years, and that's expand and upgrade the management team. Given the scale and the growth opportunities and the size of the company today, and I think many of the analysts are very aware, we've talked with them about the changes we've made to the management team. Some of those changes have now been in place for 2 years, some for over a year and the latest piece of the puzzle is Sam Cowley, our General Counsel, who joined us in the fourth quarter of last year. So I'm quite pleased with the team we have in place and how we're operating as a team and as a company. If you turn to Slide 5, I'll give you just a few highlights that Ron is going to take you through in more detail, but some of the highlights for the quarter include a very strong financial performance for the quarter for us. Our net revenue was up 39%. Now, that includes the impact of the GSK acquisition. However, if you take the GSK acquisition out, we were still up 7.5% for the quarter, which is really a fantastic quarter. Our adjusted earnings per share, which again Ron will talk about a little bit later, was $0.26, which is up over 44% versus prior year. And it's also up significantly over the guidance that we gave a month or so ago. And of that increase, about $0.01 of it is attributable to the GSK acquisition in the fourth quarter, the rest of it is to organic growth and the core business. Our cash flow, again, which Ron will talk about, continues to be outstanding. And when you adjust it for the onetime and nonrecurring items, it was about almost $40 million for the quarter. I think at the core of our financial performance is our brand building strategy and the idea of driving organic growth through the core OTC brands. And last year, prior to the GSK acquisition, we had 9 core OTC brands. On an apples-to-apples basis, while we owned all those brands, our core OTC growth for those 9 brands was 14% for the quarter, truly an outstanding quarter for us. And this was the highest revenue growth and the seventh consecutive quarter that we had of revenue growth for those core OTC brands. I talked a little bit before about the improvement in the Household performance. Our net revenue was down 2.2% for the quarter versus almost 7% for the previous 3 quarters, so we're making progress there. And then, another key accomplishment for us was completing the acquisition of the GSK brands. 17 brands, 15 which we completed at the end of January and the last 2 brands closed at the end of March. So, I think the last thing I would say in terms of the highlights is the financial performance for the quarter is really built around us creating long term value for the shareholders, so we're quite pleased with the results and how it sets us up for the future. If you turn to Slide 6, just to highlight a couple of things. I think the important note I would take away on Slide 6 is 2 things: first of all, a very strong quarter in a very difficult environment. And as many of you know, by others who have reported, a very disappointing cough/cold season in the fourth quarter for everybody, manufacturers, as well as our retailers. But you can see here again, I pointed out the 39% growth, 7.5% on an apples-to-apples organic growth, our core OTC growth up 14%, but you can see really across all segments, we had outstanding performance, and we really were firing on all cylinders. Page 7, I think it's an interesting slide in terms of it puts in perspective our performance versus the marketplace. And you can see here our core OTC brands for the quarter growing at 14% or the total company growing at 7.5%. You can see how this stacks up against a number of very well-respected consumer products company firms. So we're quite pleased with the way we're performing in isolation and in relation to the rest of the marketplace. Slide 8. Now what I'd like to do is I'd like to step back and take a look at not just the fourth quarter but really take a look at FY '12 and what's led to our success. So if you'll turn to Slide 9, I think many of you have seen this slide before but it really has been a real pillar for us in terms of how we run the business. We have a -- we outsource everything. We're a small company. We have had about 100 employees. With the acquisition, we're up to about 125, but we often talk about our day job is to drive core OTC organic growth. And that's what every single person in the company is focused on, and the results show that this quarter. The second key pillar of our strategy is M&A activity, and exclusively within the OTC arena. And as evidence to the success of that for the fourth quarter was what we did with the GSK North America brands. And then, the final one that we don't talk about as much, but if you step back and look at it for FY '12, and if you really look at it over the last 3 years, we've changed dramatically and that is, we talk about strategic portfolio management. And you can see here, one of the things is we're building platforms in some key categories that give us critical mass with retailers, as well as consumers. So whether it's analgesics, cough/cold, GI, oral care, eye care, sleep aids, et cetera. But that's very important to us that we build critical mass in each of those platforms, and we've had quite a bit of success in doing that in FY '12 and beyond. If you'll turn to Slide 10, you can see, I think one of the key things for our -- key reasons for our success, we often talk internally that our #1 marketing tool is product. It's the single most important thing we do. We really have retooled our new product development process. And we, as we've talked about it in the past, have really focused on developing 3-year product roadmaps by each of the core brands. And we believe we're in the process of doing that, which is only going to strengthen our business moving forward. Here, you can see our commitment to new products and what some of those new products were that led to our success in FY '12. I think it all starts with products. And the other thing that's critical about it is, it starts with our focus on the consumer and our understanding of the consumer and the insights we gain from that consumer research and the inspiration we get from it in terms of the development of those new products. Slide 11 talks about what do we do after we have those great products. And that is, again, we've taken a very different approach over the last 24 to 36 months in terms of focusing our A&P efforts behind those core OTC brands. In total, we've been up very modest in our A&P spending, but against our core brands, we've been up significantly. And you can see, we've stepped up our efforts on a number of fronts. We've stepped up our efforts in terms of the dollars we're spending. We've stepped up our efforts in terms of our marketing department, our personnel, the hiring that we've made. We've stepped up the efforts in terms of the new agencies that we have on board. And in addition to the spending, we've also stepped up our efforts in terms of our vehicles. We're doing more now in digital marketing, more now in professional marketing, more now in different marketing vehicles than we've ever done as a company. So we're quite pleased with the way we're evolving in terms of our marketing support for our brands and the results that it's showing. If you turn to Slide 12, there's a couple examples that I've got here that I thought I'd share. The first one is Efferdent Crystals. And I think, the reason I want to share these examples is it all starts with the consumer and it all ends with the consumer. And on Efferdent Crystals, that category in terms of denture care, is a very sleepy category. But what we've done with this introduction is bring some innovation and interest to the category and offer a new forum to consumers. And I think the key benefits are it cleans it in 3 minutes, it's very quick, it's very convenient and a very important point is, the claim that we can make that it kills 10x the odor causing bacteria, more so than tablets. And that's a very compelling claim to consumers. The next slide gives you an example in terms of Dramamine, and we purchased that business about 15, 16 months ago. And we said, that was a business that had not received any consumer support in the last 5 years. And we said we're going to change that and we're going to put significant support behind it. We've put significant support behind it. But in addition to that, we've also said right away, let's think about where we can take it from a product standpoint. And we quickly realized through some research that there was a significant opportunity in terms of Dramamine for kids. 34% of households with kids 2 to 12 have children with -- that have motion sickness issues. And 1/3 of those people that use adult formulas would prefer a kids dose, which is about 50% of the adult dose. And so we worked hard in developing a Dramamine for Kids product that has the correct dosage. We also put it in a very convenient easy-to-carry pill case, and we also offered a different flavor that was attractive to kids, grape. So that's a new product that has just come out that we're quite excited about. The last area that I'll talk about in terms of, from a marketing support standpoint, is what we've been doing in terms of our pediatric platform. I think everyone here is aware that we've owned Little Remedies for several years, and we purchased PediaCare sometime ago from Blacksmith. Both those businesses, we said we are going to build long-term platforms. Today, those businesses account for approximately 10% of our revenues. And what we've said is we really believe that those can be solid contributors so we can create value over the long term. So we're going to increase our spending behind each of those brands over the next couple of years in terms of delivering that solid foundation for the long term. By having multiple brands, as I've said in the past, it really offers us more opportunities both with the trade as well as from a professional standpoint. And what we've seen in the last year and a half or so is we are continuing to gain stronger retail support as a result of the marketing support we're putting behind those initiatives and how we're meeting the retailers' needs. And the retailers are telling us that they're becoming more and more impressed with both these brands and believe they are solid contributors to their categories for the long-term. Slide 15 gives you an idea in terms of that spending and our consumption growth is being driven by that spending, not just the dollar amount, but how we're spending that more effectively, as I said, in terms of different types of marketing support. But you can see here on a normalized basis what our spending is doing and how that is as a percentage of revenues. And it says here that we spent last year, almost $60 million in A&P support, A&P spending to support the businesses. And clearly, with the revenue results and the market share gains that we're getting, that spending is proving very effective for the brands. Slide 16 shows consumption both in terms of IRI, and this is in terms of the food, drug and mass x Wal-Mart. And you can see in total how we're performing versus the category, both on for the quarter as well as the year. So for the quarter in total, we're up almost 1% while the category is down 3%, not surprising, those categories in aggregate based on the cough/cold season. And for the year, we outgrew the category by over 5%. We grew it 4.1% while the category was down. Categories in which we competed were down 1% for the year during that timeframe. So again, whether it's Prestige in total or if you look at our core OTC, which is where we focus, you can see there is about a 10-point spread on our growth versus category growth, which means we're gaining significant market share in the categories in which we compete. Slide 17 shows you in terms of, I talked about, our day job in terms of driving core OTC growth. I've also said our night job, given the limited number of people we have in the company, is our M&A activity and how we're trying to transform the company. And you can see just less than 3 years ago, we had 5 core brands. Our OTC revenue was about $200 million. Our top 10 brands averaged about $20 million per brand. Fast-forward to today, where our OTC revenue is $500 million approximately. We have 14 core OTC brands now, and our average revenue of those 14 has risen to $35 million. So our M&A activity clearly, has yielded great results for the company. Slide 18 talks a little bit about our ability of, not just in acquiring brands, but more importantly, what do we do with those brands after we acquire them. And I talked often about our consumer focus and our customer focus, and that's really built around new product development and our incremental and more effective A&P investments and then our working to partner with the trade. And you can see here, Q4 revenue growth for the Blacksmith and Dramamine brands was about 16.5%. And you can see our consumption growth and how we are outstripping the category significantly with those brands over the last quarter, as well as the last year. Slide 19 talks a little bit about the GSK acquisition, and we've said this before, that this acquisition is clearly a game changer for us in terms of our role in the industry as well as our role with retailers. So our retailers are telling us we are much more of a major player, much more important to them. So there are opportunities with that. As I said, there are opportunities with different types of marketing, professional marketing, et cetera. There are other benefits that come with this as well. What we've found since the GSK acquisition, with the recruiting that we're doing for the positions open, created as a result of the acquisition, we are a much more attractive company in terms of size to candidates as well. So it has benefits on a number of fronts. Slide 20, we've talked about this in the past. These really are the core, the 5 core OTC brands that we purchased from GSK. And those 5 core brands, we really believe have significant growth opportunities and we plan on investing A&P at a significant rate to support those businesses. We also plan on investing significant R&D in terms of the development of new products for those brands as well. Slide 21 talks a little bit about the marketing support. Very candidly, these businesses we just purchased in the last 3 months, we're still getting our arms around them. They're still new to us. We're in a transition and we have a transition services agreement with GSK. However, rest assured that we are resourcing these core OTC businesses similar to the way we did our the last acquisitions and resourcing them both from a human and a financial standpoint to make sure that we provide major support for these businesses to build the foundation form for the long-term. Slide 22. I won't go through the details but any time you make any acquisition, it's really all about focus, and it's all about execution. And I think for us, this was a major acquisition. We have proven that we can do these acquisitions and seamlessly integrate them into the company. We took no risk as it relates to this acquisition, as I've previously said. We hired someone from the outside BCG to work with us on 90 days during the transition. We set a very extensive transition services agreement with GSK to ensure a soft landing. And finally, we took one of our senior people out of their position to work 6 months full-time to drive the GSK integration into the company. And you can see here are some of the results in terms of the key things we have accomplished to date and what we still have on our plate over the next couple of months. I think I would also articulate and let people know that, while many of the transition services agreements are done in June, that doesn't mean we're done. There's still quite a bit to do in terms of transitioning the business over after that time period. Slide 23, before I turn it over to Ron, really talks about the platforms, the attractive categories that we're in and how we have a very balanced portfolio today. So on the left, you can see the platforms that I previously discussed. In the middle, you'd see all the brands we have within those platforms. And on the right, you can see how evenly we're spread as a company in terms of building our platforms and how we've balanced our portfolio. So this is something that we've worked quite closely on in terms of making sure that the brands that we look at really are a good fit for the company and that we can build upon them. And we've had success to date, and we're pleased with the way the portfolio is shaping up at this point. So with that, let me turn it over to Ron who's going to go through the financials in more detail with you. Ron?

Thanks, Matt, and good morning, everyone. A financial overview of the fourth quarter and full-year results appears on Slide 25. As a reminder, unless otherwise noted, the financial information we're discussing today excludes acquisition-related items and other adjustments. Matt has already touched on some of these numbers, and I will go into more detail on upcoming slides. But as you can see by these numbers, we are extremely pleased with our revenue and EPS growth in the quarter and for the full year. Our record revenue and earnings growth were driven by 3 factors: first, our solid growth in our core OTC brands driven by our effective A&P investments; secondly, the success, integrating and growing the Blacksmith and Dramamine brands; and finally, our growth in EBITDA and EPS that tracked sales growth and drove solid free cash flow during the year. I'll give you more details on each of these in the next few slides. Turning to Slide 26, we have our Q4 results. Strong consumption gains in our core OTC brands, along with the GSK acquisitions, resulted in excellent financial results in the quarter. Net revenues increased 39% over the prior year to $134 million during the quarter. Total organic growth, excluding the GSK brands, was a very strong 7.5% during the quarter. Our 9 core brands grew an impressive 14%, which marked our seventh consecutive quarter of growth. New product introductions helped to improve Household revenue trends to a modest decline of approximately 2%. And the GSK brands added approximately $30 million of revenue during the quarter. Our gross margins at 52.5% were slightly above the prior year due to higher OTC mix, including the GSK brands, that was somewhat offset by lower Household gross margins. A&P spending increased more than 30% over the prior year's level, with A&P as a percent of sales slightly lower than last year's level, which was impacted by key PediaCare investments made just after the Blacksmith acquisition. We are also very pleased with our adjusted EBITDA, net income and EPS, which all increased above sales growth during the quarter. Revenue increases and EBITDA margin gains resulted in an increase of $4.4 million in adjusted net income to $13.2 million, an increase of 50% over the prior year. And finally, meaningful continued growth in earnings per share of about 44%, which excluding any adjustments, increased $0.08 to $0.26 during the quarter. Moving to Slide 27, we'll talk about our full-year results. For the fiscal year, we realized record revenues and earnings, which exceeded our expectations. Net revenues increased approximately 31% over the prior year to $441 million. Total organic growth, excluding the impact of acquisitions, was approximately 3% for the year. Our 9 core legacy OTC brands grew approximately 10%, while acquisitions added about $102 million for the year. Gross margins at 52% were 100 basis points below the prior year due to costs associated with an APAP product reformulation and lower Household margins from increased promotional activities and new product launch costs. We continued the investment in A&P behind our core brands during the year. Our full-year A&P increases were consistent with sales growth and increased more than 30% over the prior year level. Our strategy of increasing A&P investments behind our core brands is working and driving increases in consumption, share gain and higher revenue. G&A as a percent of sales dropped to 8.5% as our acquisitions leveraged our existing infrastructure. Revenue increases and G&A leverage resulted in an increase of $10.3 million in adjusted net income for the year bringing the total to $50.2 million for the year, an increase of approximately 26% over the prior year. And finally, growth in earnings per share, excluding the adjustments, increased $0.20 to $0.99 during the year, an increase of 25%. Moving to Slide 28, we'll talk about the progress in stabilizing our Household business. We have realized both improved revenue and consumption trends over the last quarter largely during the product launches. We have undertaken a long-term perspective in stabilizing our Household segment. For fiscal 2012 -- excuse me, fiscal 2012 included significant investments in new products and promotional activity, which has moderated the revenue decline to about 2% in the fourth quarter. We expect that the recent initiatives along with others planned for fiscal 2013, will further stabilize revenue as well as improve gross margin profile over time. On Slide 29, to help you better understand the breakdown of the adjustments affecting the quarter and the year, we're providing this table. Reported results in Q4 included acquisition-related and unsolicited proposal costs of approximately $13 million net of taxes, which reduced reported earnings per share by $0.26 in the quarter. On a year-to-date basis, reported results included acquisition-related unsolicited proposal costs and other items of $13 million net of taxes, which reduced reported EPS by $0.26 for the full year. On Slide 30, we'll review cash flow for the quarter and the year. Prestige's business model, high EBITDA margins and significant tax attributes allowed it to generate significant and consistent cash flow from operations during the year. The business generated cash flow from operations during the quarter of $19.5 million and $67.5 million for the year. Excluding the cash effect of the adjustments detailed on the previous slide, cash flow from operations during the quarter was $38.4 million and $82.6 million for the year. March's net debt balance was $1,116,000,000 with a debt to covenant defined EBITDA ratio of approximately 5x. On Slide 31, we have updated information on our ability to rapidly delever as a result of our strong Q4 results. The table on the left shows the company's history of deleveraging and its ability to support acquisitions while significantly reducing debt levels. Even with 2 major acquisitions in fiscal '11, the company was able to reduce leverage to 3.5x at the end of December 2011. The red and blue column in the middle of the page has our original leverage estimate of approximately 5.25x for March 31 and our actual leverage of about 5x. So as you can see, based on our fourth quarter results, we were able to beat the initial estimates we gave. Based on our Q4 results, we expect to be below the leverage estimates provided at the time of the GSK acquisition announcement with leverage before -- below 4.75x at the end of fiscal '13 and approximately 3.7x at the end of fiscal '14. This enables us to continue to participate in the M&A market, even at our current debt levels. Our next slide, 32, details our current and future capacity. On Slide 32, we see that this rapid delevering provides increased acquisition capacity while we continue to grow our OTC business. Sources of capital are widely available and leverage is not a constraint for continued M&A and Prestige is already in a position to continue its OTC acquisition strategy today, next year and into the future. Today, our existing credit facility has sufficient capacity to complete an acquisition in excess of the scale of the Blacksmith acquisition. Within 1 year, we'd be in a position to complete a deal the size of the GSK acquisition. And within 2 years, we'd be in a position to complete an acquisition in excess of $1 billion. So with that, I'd like to turn the discussion back over to Matt.

Thank you, Ron. Slide 23, the last part of the agenda before we open it up to Q&A. I thought I would talk a little bit about our results as it relates to our future. And with that, if you'd turn to Slide 34 please. I thought that we'd talk a little bit about what really sets Prestige apart and how we're building the company. As you are aware, we have -- almost 2/3 of our portfolio are brands that are number one or number 2 in their categories. As the result of the investments and the change in strategy in the last 2 years, our core OTC brands have been generating superior growth and are clearly gaining market share in our competition. Our strategy that we embarked on 2.5 years ago in terms of becoming primarily an OTC company is clearly working, and the results speak for themselves. Our ability, from an acquisition standpoint, to find acquisitions, to execute against them and to integrate them into the company, is something historically that we've done very well and we continue to do well. I think Ron has talked in the past about the valuable tax shields that we have with the acquisitions that we've made and what it does from a cash flow standpoint. And I think you can see in terms of the acquisitions, what it does from a margin standpoint and how it helps cash flow. And I think you're also seeing the fruits of the management team. A management team that's focused, first and foremost, on organic growth and delivering those results, but also a management team that has experience and the ability to do M&A activity while we are driving the operating results of the company. Slide 35 is something we're very proud of as a company. As I said for the last 7 quarters, we have consistently had organic growth on our core OTC categories and with those brands. This is a major change for the company versus the past. It's a major change both in terms of strategy, how we're running the company and second of all, it's obviously a major change in terms of results in the consistency of core OTC growth that we've gotten for the last 2 years. So again, it's something we're proud of and it's something we have every intention of continuing. Slide 36, I think we've shown this slide before. I can't emphasize it enough, and you'll see in the next couple of slides, but I'd ask you to step back and think about Prestige 3 years ago and what the company looked like in terms of its profile and how it was operating. And, I'd ask you also, really, to step back and think about based on the strategies that we laid out 2.5 years ago, where we are today, what we've accomplished. And based on that performance over the last 2.5 years, based on the strategy that we have in place and based on the team that we have in place, I'd ask you to think about what Prestige could look like 3 years from now, which I've said all along, could be significantly different than it was when I started almost 3 years ago. Slide 37 kind of proves that point. And if you look at it, prior to the current management team, if you look at some of the key statistics or the profile of the company, we had 5 core OTC brands. Today, we have 14. Our revenue, our OTC revenue, was about 60%. Today, it's about 85%. I already talked about the size of our top 10 brands. I've talked about the fact that we've gone from 4 to 6 platforms. The category in which we compete, the sandbox of $10 billion, we've gone up to $17 billion. And then look at our numbers, we were at $296 million. We have increased that to about $615 million in sales. We've done that while increasing our A&P spending by 300 basis points from 12% to 15%. We've expanded our gross margin by 500 basis points. We've increased our EBITDA by almost 2.5x, and our EBITDA margins have also expanded by 400 basis points. While at the same time, our free cash flow is up by about 1.6x. So I think the points I would make is this is fundamentally a different company than it was 3 years ago and should be evaluated that way. And I think more importantly, we're still changing and evolving as a company in terms of our pursuit in our goals. Slide 38, I think it's also quite interesting in terms of, so where do we stand in the OTC field today. And we talked about transforming the company into an OTC company, and we've done just that. We are currently the largest independent U.S. OTC company in the United States. And I think that it's worth to note, we are now the largest independent OTC platform in the United States. With that brings scarcity. With that brings clout that we have with the retailers and with the different people that we deal with. And again, I think it's quite a significant leap from where we were 2.5 to 3 years ago. Slide 39 talks a little bit about that in terms of the numbers, if you look at our revenue and you look at our EPS over the last 3 years and in less than 3 years, what's happened. And you can see what was going on with our revenue that our CAGR was down about 3.6% over the previous 3 years. Our revenue CAGR under the current team is up 28% over 3 years. And our adjusted EPS was down about 1% on a CAGR basis, the prior 3 years and is expected to be up about 24% over a 3-year time period. So any way you look at the numbers, there's a significant change versus what was going on with the company. Slide 40, the last slide, I believe, second to the last. So just as we did in FY '12, we set out very clear goals for FY '13 for us to be successful as an organization and as a company to create value for our shareholders. The most important thing for us right now is to successfully integrate and transition the acquired brands from the GSK acquisition. That's both from a supply standpoint as well as a demand standpoint with our customers. And we're working tirelessly to make that happen. I also pointed out earlier that, that integration continues well beyond the end of the transition services agreement and will require quite a bit of work, and we're committed to doing that. We are committed with these GSK brands, just like we were with the other acquisitions in the last 3 years, to develop their long-term potential in order to create value for our shareholders. In addition, our goals, we will continue to participate in OTC M&A activity. As Ron said, we have the capacity to do it. We're going to focus our day job on driving organic growth and integrating the latest acquisitions. And if the right things come up that are a strategic fit and are financially viable for the long term, we will consider them. We said on our press release this morning that we are reiterating our guidance for FY '13 of $1.22 to $1.32, and that's an increase over this year between $0.23 and $0.33 on an adjusted basis. I think Ron also pointed out this excludes adjustments for the onetime cost associated with the acquisition and the most recent proposal. And for the full year, that's $0.14, and there was adjustments in the first quarter are about $0.10. So we're committed to maintaining our strong financial performance while we invest in the company. And I think, the last thing I'll say on this slide in terms of our goals and our outlook is, we are going to continue down the strategic course we've been going down for the last 24 to 36 months. We are going to continue to transform the company. But from our perspective, it's very clear and important to us that this is really a marathon, not a sprint. So we look at it over a long enough time period in terms of trying to do the right things over that long enough time period for our shareholders. And Slide 41, I believe we have shown this before in terms of, how were we going to do that. So the way we're going to do it is we're going to drive that organic growth through innovative and effective A&P spending. We're going to drive that organic growth through investment in terms of product being our number one priority. As we build those businesses, we're going to significantly reduce our debt that Ron talked about as a result of the tax shield and the free cash flow. And as we do that, we will then continue to focus exclusively on OTC M&A activity where we have a proven competency in terms of our ability to acquire and integrate and grow those businesses. So with that, what I'd like to do, I'd like to make one statement prior to opening it up for Q&A. And that statement relates to the recent Genomma proposal. And that proposal was evaluated by the board with the help of our financial and legal advisers, very much in accordance with our fiduciary responsibilities. We thoroughly evaluated the Genomma proposal and determined it was not in the best interest of the shareholders at this time, what was proposed. We have repeatedly stated that we're open to considering offers that would create compelling value for our shareholders, and we would engage with Genomma or anyone else if a compelling proposal was put forward. Genomma chose to withdraw their proposal. There's no proposal on the table at this point. We, as a company, are focused on building our brands and continuing to create long-term shareholder value for our key stakeholders. So that's really all we have to say about Genomma. On the Q&A, I'd like to keep it focused on the business we own today and what we're doing to build it and how we're trying to create value for our shareholders. So with that, we'll open it up to Q&A.

[Operator Instructions] Your first question comes from the line of Joe Altobello of Oppenheimer.

In terms of the organic growth, obviously, very impressive this quarter and this year, I think. What's the right organic growth number for your categories long term?

Joe, I think we've talked about this on past calls. I think, if you look at the categories and if you look at OTC in general, the industry, it's a very slow and steady climb. And when times are great, it doesn't get outrageous growth. And then when times are bad as an economy, it doesn't get significant declines. I think we believe that we can be very successful in this industry in terms of creating modest single-digit growth over the long term.

Okay. And with that modest single-digit growth, you can then generate the double-digit EPS growth that I think people are looking for, given the debt reduction, et cetera that you guys have in place here, as well as possibly some operating leverage. Is that fair to say?

I think that's fair to say. I think we've laid out a 5-year long-range plan that says we can do that. I think in some years, based on the acquisitions and the way we've paced everything, there'll be more investments in some years than there will be in others. But over a 5-year period, the answer is yes, we believe we can deliver that.

Okay. That leads me to my second question which is the $1.22 to $1.32 guidance you're looking at for this year. What's baked into that in terms of the new GSK brands? Are you assuming that there's additional investment in that? Or are you assuming any synergies in that?

Yes to both, Joe. I think first of all, the investment, one of the things that we have been steadfast on as a company is when we make these acquisitions, the new Prestige doesn't take that money to the bottom line. We're investing to grow those for the long-term. So we've proven that with Blacksmith. We've proven that with Dramamine. When we did this acquisition and proposed it to the board, we have the exact same intent that we expect to invest in these businesses the first few years. So from -- on a marketing standpoint, we're absolutely going to step up our spending. Clearly, there's some synergies with these businesses both from a G&A standpoint, obviously. And second of all, we think there's synergies in terms of from an operation standpoint that we can garner those synergies over the long-term. Probably, it don't happen as much in year 1 or year 2.

Okay. And just one last one for Ron, the leverage ratio slide you showed, and I guess it's about a quarter of turn reduction in fiscal '13. Given that you're generating roughly $110 million of free cash flow, why the slow initial deleveraging?

Yes, it's the result of the increased investment behind the GSK brands in fiscal '13 versus the pro forma results at the time of the acquisition.

Your next question comes from the line of John San Marco of Janney.

Can you just clarify the new staff hiring you referenced on the GSK integration slide? How will, just in general, the incremental expense is to take over running GSK. How will that compare to the TSA expense you had this quarter?

Can you repeat the question again?

Sure. As you take over GSK and I guess you called out some hiring you had to do, specifically, how will your incremental expenses run GSK going forward? How will that compare to what you did, the TSA expense that you had during the quarter?

John, let me try and answer generally and then we'll see if Ron can give any more specifics if he would like it. But as I said, we have about 100 employees today than we did prior to the GSK acquisition. We built in approximately 25 new hires to go with this acquisition, all right? So that's the number of people. Second of all, we expect the ongoing G&A rate to be significantly less than what we have in for the TSA right now, which is why Ron had that called out. So over the long term, there are huge G&A synergies for this just as there have been for the other acquisitions. But we wanted to make sure that we had the right TSA in place in the short term so that we weren't penny wise and pound foolish. Ron, do you want to add anything?

Yes. And the $0.10 that we've called out for expected adjustments in Q1, part of that $0.10 will be the difference between the TSA cost and the costs that we incur versus a normalized go forward run rate for the business.

Okay, that's helpful. And how did the acquired GSK brands perform from a consumption perspective during the quarter?

I think the performance was as expected. I think, John, this is -- the size of this acquisition, coming from a bigger company, we're still in a transition. They're running those businesses for us today in a lot of ways from the transition services agreement. So we don't have the depth of visibility that we do to our own brands. But right now, they are meeting our expectations from a consumption standpoint.

All right. And then lastly, I guess, first broadly, could you describe your process for setting guidance, which I guess is a new thing you weren't doing previously? And then, specifically relative to guidance, what do you assume for the pediatric platform in terms of competitive activity and market share?

I think, as it relates to guidance, John, we felt that with this acquisition, it increased the size of the company by 50%. I think the board felt it was the right time to give the Street some sort of broad guidance of what that meant. So that was the change and the rationale behind it. In terms of the pediatric platform, I think there's 2 things. Number one, first of all, we have the conviction on the brands that we own, specifically PediaCare and Little Remedies that we have every intention of making those viable leading brands in the categories in which they compete. And we've spent, at rates, the last couple of years, which do that. We hear all sorts of things on the Street in terms of when competition will be back, and we hear different things. And I can't tell you the answer to that. I'm not the competition. So we're building those businesses and spending at a rate that's significant to build them for the long-term again this year. Does that help you at all?

Yes, it does. If I could just ask a follow-up. Presumably, you build your guidance from the bottom up and have to make, obviously, you have to make some assumption about what that pediatric platform does. So assuming that presumption is correct maybe if you could just tell us directionally, whether -- do you expect some decline there or I mean, what is your current thinking that's incorporated in guidance?

I think in general for the pediatric platform in total, we believe we're going to grow this year.

The next question comes from the line of Frank Camma, Sidoti and Company.

Not to focus on the downside, but the Household business, why did the margins decline so much?

During the quarter, Frank, we had some significant investments behind new product launches and promotional activity in the Household segment.

Frank, specifically, when we introduce a new product in Household and into the food channel, there's a fair amount of slotting allowances that go on in the food channel still today.

Okay, great. And can you talk about how well the new product in Household is doing, specifically the stainless steel cleaner?

I think it's still early where we just started shipping the fourth quarter. We're just turning on support literally as we speak right now. So again, I think it's a little early to tell, but we're pleased with the testing that was done on it. And we're pleased with the retailer reactions so we're hopeful and confident that it's going be successful.

Okay, great. A question on Slide 37. You have the gross margin at 57% for the combined entity post GSK. Of course, it was about 53% for this quarter. How long does it take to get to that 57%? Does that assume some synergies or how are you getting to that?

I guess 2 things, Frank, first is in the fourth quarter, we only had 2 months of GSK. And we didn't have any sales for the final 2 brands, which we closed on March 31. So as we get a full quarter of all 17 brands' results, then we'll see a lift from that. And then over time, as I mentioned, when I talked about the Household business, we expect a recovery in the Household margins as well.

Frank, also just to add to it but to your point, I think it's a good question. Even with those additions, I'm not sure that you'd hit that 57% in year one.

Okay, so that's what I was getting at. My final question is just on -- just if you could give a little color on why did PediaCare perform so much better than Little Remedies? Is that just from a lower base or why is the percentage up so much?

I think it's a combination of the base as well as some distribution fills that PediaCare got in terms of new item introductions.

So they had more product innovation?

Yes. More new products introduced and accepted by the trade, yes.

Your next question comes from the line of Reza Vahabzadeh of Barclays.

Just on the -- a clarification on the GSK transition expense. So that expense that was incurred in this quarter, would you be able to run the business on a lower expense base than that number?

What was reported in the adjusted results had a normalized level of cost associated with GSK from a G&A standpoint. So that is about what we would expect going forward, of course, adjusted for a full quarter.

Okay, got it. So that cash expense is going to be -- that expense is cash and will be running through your P&L on a go forward basis?

That's correct.

Okay. And then for the full year, the adjusted EPS guide, what is the dollar amount of adjustments that goes into that EPS guide? So what is the, I guess, the gross number of adjustments that you will make? Is there a range for that?

For FY '13?

Yes.

There isn't a range. We've identified an estimate of $0.14 for the full year, anticipating $0.10 in the first quarter and $0.04 in the balance of the year.

And this is post tax, right?

Yes.

And then as far as the integration progress, can you maybe talk about certain milestones that you have achieved or would anticipate achieving in the near term, just to let us know how much progress you've actually made?

Reza, I think that's on -- I think that is actually on, what page is it, 22?

Right.

So I think we laid that out on Page 22. That literally goes through milestones, specific milestones of what we've accomplished to date.

With the big milestone being, the end of June where we finish up the vast majority of the TSA services with GSK. And then as the year continues, there'll be additional integration initiatives underway as we completely fold the GSK brands into our business.

Yes, I see that. And then, did you talk about how the GSK brands are doing, just on an apples-to-apples basis versus their prior-year performance or versus your expectations?

They're meeting -- Reza, they're meeting our expectations that we put in the acquisition model. As of right now, they've met all of our expectations to date. It's still very early in the game. We're still transitioning the business.

Your final question comes from the line of Carla Castles [ph] , JPMorgan.

I was wondering if you could give us a little more color on what you're seeing in the market in terms of acquisition opportunities or multiples. Are you seeing industry multiples changing dramatically? Or additional opportunities or fewer opportunities than you saw in the past?

I think I'd say it's still a fairly robust market. I think it changed. I think versus 2 years ago, there wasn't a lot as much out there. In the last year, there have been a fair amount of opportunities that we've looked at. I think we continue to see that in the marketplace. So as far as the pipeline of opportunities, I think it's decent. In terms of multiples, I'd say I think they're pretty healthy. Given the cost of financing today, I think the multiples continue to be pretty healthy. Does that answer your question?

Yes, it did answer the question. And do you have a target of what you will spend for every -- do you target achieving a certain multiple or a certain level of multiple post synergies?

We don't have a specific target, but Carla, in the past, I mean we've been pretty, I'll say, disciplined in terms of looking at our acquisitions in terms of strategic fit, financial fairways and our ability to grow the businesses that we've stayed true to over the last 2 to 3 years, which has led us to certain acquisitions and has gotten us to pass on other ones. So I think we have a pretty clear criteria that we operate under today.

You have a question coming from the line of John Anderson, William Blair.

It's actually Ryan Sundby in for John this morning. So just to follow up on the last question there, Matt, let's say in the year, and Ron's comments on capacity to do another deal, I guess. I guess could you maybe talk about what leverage ratio you'd be willing to stretch to, number one? And then two, is there any concern from an operational capacity standpoint to do another deal as you kind of integrate these last 3 deals of the last 18 months?

Let me start with the last question first, Ryan, which I think is the most important one. Our number one priority is the operating business and continue to drive operating results that we've driven over the last 3 years. So I don't think we would do any acquisition that we felt would jeopardize that. I think that's the most important point. I think the second thing is, any acquisition that we would look at, we don't control that market necessarily. Those things become available, and so you don't control your destiny there. So we would need to determine whether they were a good strategic fit, a good financial fit, et cetera and how it fit with how our organization was operating at that time. We have had times, in the times I've been here, where we've passed on opportunities because we said from an operational standpoint, we thought we had higher priorities. So I think, does that answer your question?

Yes. I guess just to follow kind of on that, looking at the pro forma portfolio here, it seems like the portfolio is pretty balanced at the top among analgesics, cough/cold, GI, and eye and ear care. Is there a particular category you're kind of interested in pursuing? Or would you be looking at adjacent categories that kind of fit within your current OTC platform?

I think it's a combination of both, Ryan. And I think more importantly, I think we'd -- as I said we want to build on platforms and categories in which we compete but we've also said we're willing to look at tangential categories. I think the most important criteria as it relates to which of those categories, can we continue to acquire within port brands or portfolios we acquire, core OTC brands that we think we can build. Because that's what we really want to do is we want to morph the portfolio over time, it's a marathon, not a sprint, into a portfolio of core growth brands. And that takes quite some time to do. That's our number one criteria as we look at categories. Does that help?

Ladies and gentlemen, that concludes the Q&A session. I'd now like to turn the call back over to your CEO, Mr. Matt Mannelly.

Okay. Again, we'd like to thank everyone for taking time to join us this morning. We're very pleased with the results. We appreciate your support, and we look forward to talking to you in the coming weeks and in the next quarter. Thank you, and have a good day.

Ladies and gentlemen, that concludes the conference. Thank you for your participation. You may now disconnect. Have a great day.