Good day, ladies and gentlemen, and welcome to the First Quarter 2013 Prestige Brands Holdings, Inc. Earnings Conference Call. My name is Stephanie, and I will be your coordinator today. [Operator Instructions] As a reminder, this conference is being recorded for replay purposes. I would now like to turn the presentation over to your host for today, Mr. Dean Siegal, Director of Investor Relations and Communications. Please proceed.

Thank you, Stephanie. Good morning. As a reminder, there is a presentation that accompanies this call. You should go there now. You can access it through our website at prestigebrands.com. Click on Investor Relations on the left and Webcast and Presentations on the right. And I'm also required to remind you that 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 or 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 of the date of this conference call. A complete Safe Harbor disclosure appears on Page 2 of the presentation accompanying 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 are filed with the U.S. Securities and Exchange Commission. Now I'd like to introduce Matt Mannelly, CEO; and Ronald Lombardi, CFO.

Thank you, Dean. Good morning, everyone, and thanks for joining us on the call this morning. As Dean said, to help us, as we've done in the past, and to help you in terms of walking through the results for the quarter, we have our earnings presentation. What I'd like to do is, first up, I'm going to talk a little bit about our strategy and how we delivered against that the first quarter. And then I'm going to go through some of the more specific highlights for the quarter. And then, Ron Lombardi, our CFO, will take you through a financial overview and some of the details. And finally, I will close with a few comments about the quarter and looking forward, and then we'll open it up for questions. So with that, if I could ask you to turn to Page 4 of the earnings presentation. Page 4 is important for us in terms of how we run the business, and it really is. We have a 3-pronged strategy, as we've talked about. First is, really, it's been critical to our success and will be critical moving forward is to drive our core OTC growth. And in doing that, as we have emphasized the last couple of years, it really is about investing our marketing dollars in our core OTC brands and driving those for growth today and future value creation. In addition to that, we have stated and it really changed a number of things in terms of our approach to new products and the importance of new products in our portfolio and how we're trying to take a long-term approach to that in terms of driving value and driving the top line. And finally, in terms of driving that core OTC growth, making select investment in other brands. Doesn't mean those other brands we won't invest in or that they won't grow, but we're going to prioritize the core brands first and foremost. The second prong of our strategic approach really has to do with our extremely strong free cash flow that leads us to very rapid debt reduction. And Prestige really has a history, long before I got here, of having tremendous free cash flow, and that free cash flow has been used historically and primarily in terms of rapidly paying down our debt. And as many of you know, we also have a very significant tax shield, which Ron has talked about at times, that contributes significantly to our consistent large free cash flow. The last prong of our strategy has to do with M&A, which has been very much in the forefront the last 2 years for Prestige. I think the difference is our M&A focus is not just primarily but solely in the OTC market at this point, which is a change from 3 years ago. I think now we're getting to see, with the third large acquisition in less than 2 years, the former GSK brands that we purchased in North America a few months ago, that we really do have a proven M&A competency. And as we're going to talk about a little bit on this call, we've demonstrated time and time again that we know how to integrate these businesses into the company. So with that, I'll ask you to turn to Page 5. I want to talk a little bit about how we did against each of those strategies in Q1 of FY '13. I think the first area which we have continued to emphasize is our core OTC organic growth. And this quarter, it's approximately 4%. And as you'll see later on, that's the eighth straight quarter of core OTC growth, which we are quite pleased with. In addition to our shipment growth being up 4%, we also have talked quite a bit about consumption. And our IRI consumption for the latest quarter is up almost 7% in the categories in which we compete, with those categories in which we compete being down almost 1.4%. So you can see there's quite a big swing factor in terms of our performance versus the categories, and I'll talk a little bit more about that later on. And I think the final thing as it relates to driving that core OTC growth, something we really changed dramatically about 2 years ago, was our investment in the business and our prioritization of that market spend against those core OTC brands. And you can see here that in the first quarter, those core OTC brands, we're spending at about 16% of sales, which is up significantly over a few years ago. And when you look at 8 straight quarters of core OTC growth, you can that it's clearly working. In the first quarter, the second prong of the strategy in terms of free cash flow and debt reduction, Ron is going to talk a little bit more about this later on, but again, very strong results. If you look at our cash flow from operations, excluding the TSA impact, which Ron will talk about when we get to the financial session, it was almost $29 million. We are on track with what we said last year in terms of delivering approximately $110 million in free cash flow for the year. And you'll hear Ron talking a little bit -- again, a little bit about later in terms of our leverage ratio and how much we've brought it down from the time of the acquisition when we were 5.25, and we're at approximately 4.75 today. So again, we are rapidly delevering the business. And then the final area in terms of our M&A focus, I think as it relates to the first quarter, would be the brands we purchased from GSK for North America, very sizable acquisition for us. And I'd say completing that transition and completing the Transition Services Agreement and effectively integrating those into the company was quite an accomplishment for us in the first quarter. And then again, I'll talk a little bit more about that later on. So if you go to Page 6. I think, again, this is an important page for us, what we said we were going to do and what we actually did. So before the year started, we said in our fourth quarter presentation, we expected OTC to be at about 85% of revenue, our gross margin to be approximately 57%. We'd spend at almost 15% in terms of A&P and have about a 34% EBITDA margin, with $110 million in free cash flow. And you can see what we actually accomplished in the first quarter, where our OTC is about 86% of revenue. Our gross margin is coming very strong at approximately 57%. We're spending at about 14%, with our EBITDA margin at about 35%, and we are on track, as I said, to deliver approximately $110 million in free cash flow for the year. I think the reason those are important, not just individually but collectively, is we've said that the latest acquisition was really going to transform us, from a financial profile standpoint, and I think you can see, based on the first quarter, that we truly have transformed the company from a financial profile standpoint. If you turn to Page 7 -- I'm sorry, Page 8, we'll talk a little bit about some of the performance highlights in the first quarter. Again, you saw in the press release, our revenue of $147.4 million was up almost 55%, which we are quite pleased with that in this very tough economic and retail environment to deliver that kind of revenue. As I've said, our financial profile is in line, slightly exceeding our expectations. And as we noted in the press release, gross margin expansion of almost 500 basis points in that first quarter, which we're quite pleased with. Our adjusted EPS, excluding the onetime cost that Ron will talk about, $0.35, up over 50% versus prior year, not only in line but really exceeded our expectations. So we're quite happy with it. And our adjusted cash flow from operations, excluding the TSA, which again Ron will talk about, of about $28.5 million. And finally, our leverage ratio being brought down to 4.75, which is a dramatic reduction from where we started the year. Second and most importantly, in terms of our performances, how we're doing in terms of building the brand for the long term. And as I said, 2 important metrics for us: how are we doing in shipments; but more importantly, how are we doing in consumption, consumer takeaway from the retail shelf. And our organic growth in terms of core OTCs is almost 4%. But as I've said, our consumption growth, consumer takeaway IRI is almost 7% versus the categories that we compete in being down 1.4%. Finally, in terms of successful and timely integration of the GSK brands, again, from my standpoint a major accomplishment that the TSA was completed, and the business integration is on track as we speak. And I'll talk about some of the highlights of that in a few pages. I think the second thing is that we've done historically with our Blacksmith Brands and our Dramamine acquisition. We have shifted into action mode with the brands we acquired. We're investing in them, both in terms from a marketing standpoint, as well as working the new product pipeline in terms of developing new products for some of those new acquisition brands. If you turn to Page 9, I think what's impressive about this performance of 8 straight quarters of organic core OTC growth is it's really not about a quarter or the numbers for a quarter. So while we're quite pleased with 3.7% growth in this economic environment, as I've said, when everyone else at retail and other manufacturers are reporting very tough growth, it really is more along the lines of the fact that we've had solid growth in the core OTC brands for 8 straight quarters is what we believe is the important thing as it relates to our core OTC brands. And if you turn to Page 10, something we haven't really shown in aggregate -- we've shown individually in the past -- but again, this is as important, maybe more important than the previous page because it's 8 straight quarters of outperforming the category, 8 straight quarters of market share gains and 8 straight quarters of consumption growth with the consumers, meaning they're coming to the shelves and their preference is to pull our products off the shelves. So you can see here, I think, again, the important part is the fact that it's 8 straight quarters, and the second more important thing is the spread between our growth and the category growth continues to be quite strong. And you can see at the top in the yellow burst what that spread is, ours versus category growth, and down in the green in terms of market share gains, you can see the categories in which we compete, we continue to gain market share, and we have for 8 straight quarters. I think part of this is a result of the change in strategy and the change in management and the change in the marketing group's focus to really focus on consumption growth, as opposed to just factory shipments, which I think has played a key role in our success over the last couple of years. If you turn to Page 11, I think one of the reasons we believe we've been so effective at driving that top line is 2 things: number one, we've said what -- we've continued to build the brand, and we've continued to prioritize and make the tough calls and focus that spending, the net marketing spend, against the core OTC brands. And you can see how we've grown it over the last 3 years. So we continue to focus on brand building. We continue to do what we say we're going to do. We say we're going to invest in the brands and we do it. We're focused on a short list of brands that we think are really going to make a difference in the long term, and those brands have consistently delivered results. On this page, you can see a new campaign that we have out for Compound W that just started airing. And also, we just came out with an innovative new product, Efferdent crystals, that we also just started advertising and are seeing some very strong results as a result of the innovative new product and the advertising campaign that's going with it right now. Page 12 talks a little bit about our philosophy when we acquire brands, and that is our goal when we make the acquisitions is, "Can we build those brands? Can we drive top line revenue?" And the way to do that is we need to increase our support and really get behind those brands. So for some of the key brands that we just acquired BC and Goody's and Beano, consistent with our previous acquisitions, we have increased spending right out of the gate. So for BC and Goody's, there is a very strong campaign for BC and Goody's featuring Richard Petty and Trace Atkins called the rivalry campaign. We have significantly increased the spending in the first quarter. That campaign not only highlights the brands and a couple of celebrities, but really focuses on the benefits of BC and Goody's, and it's all about speed and efficacy and speeding -- the speed in terms of getting into your system and delivering results. You can see down at the bottom in terms of how those businesses are performing versus the category in the latest quarter and again, significantly outperforming the category. The same thing can be seen on the right in terms of Beano. Again, we increased our media support and our advertising -- TV advertising support behind our spokesperson, Mindy. And you can see that our Beano sales, again, are significantly outstripping category sales in the first quarter. With that, if you turn to Page 13, I want to talk just a little bit about the GSK Transition Services Agreement and the fact that we completed it in the first quarter and that we're on schedule. I think the reason it's important to spend time on this is unlike our other acquisitions, this acquisition increased the size of the company, from a revenue standpoint, approximately 50%. So there was a lot of time and effort that went into the diligence and in terms of how we integrated this into the company. And we looked at it from, "What do we need to do from a brand building standpoint? What do we need to do for the supply chain?" Critical in this industry and critical to our success is, from a quality assurance and quality control standpoint, what are the key things we need to do? IT and our systems, what do we need to do there to be successful? And finally, with an acquisition of this size, we had to hire additional people, and that's critical to our long-term success. So I'm not going to go through all of these, but I am going to just talk about a couple that I think are important that we've been very successful at. From a supply chain standpoint, we made a major move in the first quarter in terms of consolidating and moving warehouses. And that transition took several months, was completed in June, we have started shipping out of there and have not missed a beat in terms of shipments. So the new warehouse is up and running 100%, and we're quite pleased with that. I think another area I would point to is in quality control. We identified the need, because of all these new brands, for a new Pharmacovigilance system, which deals with consumer calls and consumer complaints. And we've selected a vendor and worked with them and developed a new system. And that, again, was implemented at the end of the first quarter and is up and running, and is a critical component in terms of our quality assurance system to deliver quality products to the marketplace. In addition to that, our supply chain and our regulatory people spent quite a bit of time in the first quarter in the field at the third-party manufacturer's, installing the systems and the reports that we believe are necessary for us to effectively monitor quality over the long term. Two other points I would point out, we have transferred, from an IT standpoint, all the remaining data to our systems, and it's up and running on those systems today. And then finally, from an HR standpoint, we have largely completed the hiring of 25 people, and we have those people integrated into the business and are up and running and contributing as we speak today. Next up, Ron will take you through the financial overview. So with that, I'll turn it over to Ron.

Thanks, Matt, and good morning, everyone. A summary of financial performance for our first quarter results appears on Slide 15. As a reminder, unless otherwise noted, the financial information we're discussing today excludes certain TSA integration and other costs. A reconciliation between reported results and the adjusted results can be found in schedules included in today's earnings release. We're very -- we are extremely pleased with our financial performance in the quarter. Our record revenue and solid earnings growth were driven by 3 factors: continued strong growth and share gains in our core OTC brands, driven by our effective A&P investments; the seamless integration of the acquired GSK brands and their performance that was in line with our expectations; and strong growth in EBITDA, earnings per share and cash flow from operations that was consistent with revenue gains. I'll give you more detail in each of these points in the next few slides. Turning to Slide 16, we have our Q1 results. Our solid Q1 results reflect the impact of the GSK acquisition and our transformed financial profile. Our sales were at a run rate of approximately $600 million annually. Our gross margins increased approximately 5 points, and our A&P level is approaching 14% of sales. During the quarter, our net revenue has increased approximately 55% over the prior year to $147 million. Our 9 core legacy OTC brands grew nearly 4%, marking our eighth consecutive quarter of growth, as well as our eighth quarter of consumption share gains. Household sales declined during the quarter due to the changes in the timing of promotional activities, as well as from a challenging category trend. The acquired GSK brands performed well in the quarter and were generally in line with our expectations, adding $52 million of revenue during the quarter. Our gross margins increased significantly over the prior year to approximately 57% due to an increase in OTC sales to approximately 80% of our total sales, as well as an increase in our legacy OTC gross margins over the prior year's levels. This change reflects our transformation to an OTC company. We have increased A&P spending more than 98% over the prior year's level due to the acquired brands, and we also increased A&P support behind our legacy core OTC brands. These investments are effectively driving increased sales, consumption gains and driving value creation through increased earnings. G&A as a percent of sales declined almost 2 full points to 7.7% of sales, reflecting the leverage on the increased sales levels. Our adjusted EBITDA, net income and earnings per share all increased significantly during the quarter and closely tracked to our sales growth. Revenue increases and EBITDA margin gains resulted in an increase of $6.2 million in adjusted net income to $18 million, an increase of approximately 52% over the prior year. And finally, continued growth in earnings per share of approximately 50% over the prior year, which, excluding the adjustments, increased $0.12 to $0.35 during the quarter. Moving on to Slide 17. Slide 17 contains a reconciliation of reported net income and earnings per share to adjusted results. As a reminder, our earnings release contains a full set of disclosures about our non-GAAP financials. Reported results in Q1 include the GSK transition and legal costs associated with the unsolicited offer totaling $3.3 million net of taxes. This reduced reported EPS by $0.06 in the quarter. The company still anticipates full year adjustments of $0.14, with the remaining $0.08 likely to be split between Q2 and Q3. Turning to Slide 18. We have a summary of cash flow for the quarter. Prestige's enhanced financial profile of high EBITDA margins and our significant tax attributes allowed us to generate meaningful and consistent cash flow from operations during the quarter. Excluding the impact of the Transition Services Agreement on the timing of accounts receivables, the business generated cash flow from operations during the quarter of $28.5 million, which was an increase of approximately $13 million or almost double the prior year's level. The impact of the TSA will reverse in Q2 since we have transitioned to direct billing to our customers and payments to certain suppliers on June 30, as we concluded the TSA agreement. June's net debt balance was approximately $1.1 billion, with a debt to covenant-defined EBITDA ratio of approximately 4.75x. We continue to expect approximately $110 million of cash flow from operations for the full year. In addition, given the size of the GSK acquisition, we'll be relocating to a new headquarters and upgrading our ERP systems. The approximate $10 million in capital spending associated with these activities are included in our $110 million estimate of free cash flow for the year, with a significant portion to be incurred in Q2 in preparation for our move into the new headquarters at the start of Q3. Moving on to Slide 19. We have updated information on our ability to rapidly delever as a result of our strong Q1 results. The table on the left shows the company's guidance provided at the time of the GSK acquisition announcement, along with our actual results at the end of fiscal '12 and at the end of the first quarter. As you can see, the company is tracking favorably to the guidance provided and is already in line with what was expected for our fiscal 2013 year-end, with 3 quarters to go. This rapid delevering, along with our continued strong financial performance, continues to create expanded acquisition capacity. Sources of capital are widely available, and leverage is not a constraint for continued M&A, and Prestige is already in the position to continue its OTC acquisition strategy today, next year and into the future. At this point, I'd like to turn the discussion back over to Matt.

Thank you, Ron. So just a few comments before we open it up for Q&A, and if you'd turn to Page 21. I think we've talked about this a little bit in the past in terms of what sets us apart and how we believe we're set up to deliver value now and well into the future, and I think the 3 buckets here are very relevant in terms of our brand portfolio, our financial profile and the management team. In terms of the brand portfolio, I'd say that there are a couple of important items. One is, again, we have consistently delivered, outperformed the category in those core OTC brands, and we've delivered superior growth and market share gains. I think the second thing I would say is the portfolio overall -- we've got core portfolio, which many of you know, represents about 66% core OTC. And the portfolio overall is working well to deliver the financial results that we have previously stated. From a financial profile standpoint, I think we talked quite a bit earlier about how we have really transformed the financial profile of the company with this latest acquisition, and you can see it in terms of the numbers. Our margins, whether it's gross margins or whether it's our EBITDA margins, are very strong. We continue to have exceptional and consistent free cash flow. And as Ron just pointed out, as a result of that consistent and large free cash flow, we continue to rapidly deleverage our balance sheet. So our financial profile continues to strengthen as we move forward. And I think the last point that's important is the management team and a couple of things. Again, the strategy that's been laid out by this management team really has transformed Prestige. And really, today, we are an OTC company. With 86% of our revenue and 96% of our contribution coming from OTC, we are an OTC company today. I think as a team we've proven that we have the ability to source and execute and integrate those acquisitions successfully, and we've done 3 acquisitions in the last 2.5 years. And I think as important that we've demonstrated is in addition to acquiring and integrating those acquisitions, we've proven that we can take those brands and grow them. And that's the most important thing, we believe, in terms of creating long-term value is the brands we acquire, especially the ones that are really core OTC brands, which the latest acquisition includes 5 of those, we believe and we've consistently grown those core OTC brands over time. With that, if you'll turn to Slide 22. Again, I think we've talked about this in the past. In less than 3 years, we've now become the largest independent OTC company in the United States. I think we're proud of that, but more importantly, it's important because there are benefits associated with it. As a result of increasing the size significantly, we're more important to our customers at retail. We can participate in more programs which allows us to merchandise and touch more consumers as well. So that increase in size has tangible benefits with our customers and our consumers. And as such, we believe that transformation and becoming the largest independent OTC company in the U.S. sets us up very well for the future and value creation for the future for our shareholders. Page 23 talks a little bit about coming out of the first quarter and moving forward. And as we've said, we have clear goals for FY '13 that we think can build on the success that we've had in Q1. I think what's important to note, even though the Transition Services Agreement ended at the end of the first quarter, really, all of FY '13 is about effectively integrating and developing the brands -- GSK brands that we just acquired. So even though the TSA is complete in the first quarter, as an organization, our integration continues well beyond the end of the TSA, and all 125 team members recognize the importance of that and our focus against that. In addition to the integration of those brands, the second priority continues to be to invest in and to drive and to grow our core OTC portfolio, which we've said is really the driver behind our long-term success. We also want to make sure that we are developing those acquired brands for the long term. And again, our philosophy and our strategy has been and will continue to be that when we acquire brands, we will do the work and we will invest in them in the first couple of years, both from a marketing standpoint and a product development standpoint, in order to set them up for long-term success. We believe we can do that investment and continue to deliver the exceptional free cash flow, which will allow us to rapidly delever and continue to pursue our proven M&A strategy, which has worked so well over the last 2.5 years. So with that, for FY '13, we believe -- we strongly believe the guidance we've set out at the beginning of the year between $1.22 and $1.32, that we're confident we can deliver that. In fact, with the strong first quarter, I would expect to deliver at the high end of that. As Ron said, this excludes some adjustments, which he took you through, in the first quarter, as well as the rest of the year for the onetime transition of the new business. In terms of looking forward, specifically to the second quarter, the ways that we look at it, from a revenue standpoint, for the second quarter, the TSA transition, I think we saw some of our accounts with the GSK brands -- with that transition, they were concerned they weren't going to be able to get inventory, so they possibly bought a little more inventory in the first quarter than they would've normally purchased. However, we believe that's offset in terms of, typically, the second quarter is a strong build for the cough/cold season. However, that also is dependent on the economy and will be dependent on how much the trade tightens the belt in terms of inventory for the remainder of the year, given what's happening with the consumer. From an A&P standpoint, just really more of a reminder than anything, second and third quarters are typically when we increase our spending around the portfolio in light of cough/cold and some other things. So we will increase our marketing support in the next quarter as we have done in the last couple of years. And finally, from a balance sheet standpoint, as Ron pointed out, the Q1 impact of the TSA will reverse itself in terms of free cash flow in the second quarter. So that's a little bit about '13, a little bit about the second quarter. But I think most importantly, as we talk about the strategy and the strategic course that we've set is in motion. And it really is -- it's a marathon, not a sprint. We don't look at it quarter-to-quarter. We look at it over the long-term, and we will continue to stay the course that we're on today. So with that, just on Page 24. In closing, a reminder again, really our framework for creating shareholder value is about driving that core OTC growth, delivering exceptionally strong and large free cash flow and consistent free cash flow so that we can quickly pay down our debt; and while we do that, to continue to drive the business operationally, while we focus on M&A opportunities exclusively in the OTC segment. So that's it from in terms of the report of the results of the first quarter. As I've said, we're pleased. We're cautiously optimistic for the remainder of the year. We like our portfolio, where we're sitting right now. We wish the economy was a little bit stronger, but again, we've performed in the first quarter, and we anticipate to do so for the remainder of '13. So with that, I'd be happy to open it up to questions.

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

A few couple -- actually, a couple of quick questions here. First, I'm trying to understand the guidance for the full year. Obviously, you guys did over-deliver pretty significantly in the first quarter. How much did the TSA agreement or the TSA transition benefit you from a gross margin or EPS perspective? Because if you just take the first quarter and multiply by 4, you get $1.40 for the year, so I'm just curious why you're still maintaining your prior guidance.

Joe, it's a good question. I think, as I said, there may have been some revenue possibly that came in the first quarter as a result of the warehouse transition, that people wanted to make sure that they were fully stocked, right? I think we feel good about our brands. But right now, candidly, as I just said, I think we'll deliver at the upper end of that guidance. And I'm hopeful that we'll be able to go beyond it, but I really want to see the economy and retail in the second quarter before we really commit to that.

Okay. And so in terms of that last comment, Matt, it sounds like you guys are at least sounding a little bit more cautious with regard to the consumer this call. Are you seeing any pullback on the part of your retailers in terms of inventory management?

We're seeing a little bit of inventory tightening in the drug chain; a little bit at this point, not a lot. Our largest customer, as you've seen, is actually starting to rebound quite nicely, right? So we're seeing very good movement there. And as far as our brands, if you look at our consumption numbers and our inventory in general, Joe, is in very good shape right now. Our inventory and our inventory with our retailers, which we keep track of, is in good shape. So there are no warning bells right now for us. To me, it's more of a macro concern, not a Prestige or an industry concern, and so that's the reason why I'm a little bit cautious.

Okay. Got it. Just one last one, if I could. In terms of household, it looked like the household segment did take a bit of a step backward this quarter. How much of that was due to timing? And how much of that was -- maybe the March quarter was an aberration and maybe this quarter is an aberration. I'm just trying to figure out which one was a true indicator of where the trends are in that segment.

Yes, Joe. I think -- go ahead, Ron.

As I say -- Joe, we think, about $1 million of the year-over-year decline is directly related to the difference in timing of promotions.

So I think Joe, part of it is merchandising events specifically in the dollar channel that didn't fall in Q1 that are going to follow later, that Ron just referenced. So I think that is part of it. But I think you actually make a really good point, and that is, was Q4 an aberration? Or was this an aberration? I think, good news and bad news. The bad news is I'm a little disappointed in household's performance for the quarter. The good news is the portfolio, overall, is exceeding expectations, the cash generation part of the portfolio. So in general, we're doing just fine. I think we've made some adjustments. We've introduced stainless steel, which is more of a specialty item. We've just recently introduced Comet 2x, which is twice the bleach, which is at a higher price point and a higher margin, which should benefit the retailers and us. I think the macro trend, what happened in this quarter was the abrasive segment, not just our brand, but the abrasive segment was down double digit for the quarter for the whole segment. And as a large player in the abrasive segment, that's where the shortfall was for us. Does that help you at all, Joe?

Yes, it does.

The next question comes from the line of Jon Andersen with William Blair.

Just starting with the guidance for the year. I kind of understand your point, Matt, kind of early in the year and wanting to kind of wait to see how the macro environment evolves here. But with the core business, the core OTC brands up 3.7% or nearly 4% in the quarter, how are you thinking about at least that part of the portfolio performing through the balance of the year? Is that a run rate that you expect to be able to kind of maintain at this point? Because it did represent a fairly significant deceleration from Q4 and I don't know if you could talk about some of the puts and takes in terms of that deceleration from 14% to 3.7%.

Yes, Jon, I think it's a good question, I think. But as I said, for us, it's not about 1 quarter of that core OTC growth. And I know the fourth quarter at 14%, I've said it was phenomenal, and we've had 2 quarters that have been double digit in the last 8. But when you look at the categories in which we compete, all right? If we can go -- grow those categories, if we can grow 2%, 3%, 4%, we will outgain the category, we will gain market share and we will clearly create value for our shareholders. So I'm not -- candidly, I'm not disappointed at all in the 3.7% growth for the core OTC. On the contrary, I'm quite pleased with that. If we could deliver at that kind of number on an ongoing basis, we -- this portfolio would be tremendously successful. So I'm actually quite happy with it.

No, understood, agreed. You've talked a lot about taking market share, and I think that Slide 10 demonstrates how you're doing that with your performance, outpacing that of categories you're in. Is there a way you can help us think about kind of your aggregate market share today and how much opportunity there is that lies ahead? I mean, who are you taking market share from? Is it private label? Is it other brands? Just trying to get a sense of that.

Well, I think it's a tough one because, Jon, we compete in so many different categories, right? So it's not like we're in the shoe business or the beverage business and you're just taking it from one competitor. We're in different categories. We're taking it from some of the larger competitors, for example, in some categories versus in other categories at some of the smaller competitors. So it really varies by category. We're actually picking it up from private label again, when you -- in pediatrics, we're actually picking it up from private label right now. But in other categories, private label has gained a little bit. So I couldn't give you one answer for that because it really varies by category. And we obviously monitor every category quite closely.

Okay. Fair enough. Just 3 kind of housekeeping-related questions. First, and maybe for Ron, full year interest expense expectations. Second, the G&A run rate in the first quarter was quite a bit below what we anticipated. Is $10.8 million, $11 million the right way to think about the quarterly run rate going forward? And Matt, with your comments on A&P spending going up or marketing support going up in Q2 and Q3 because those tend to be seasonally higher in terms of dollar sales, are you talking about kind of an absolute increase in ad spend or an increase in the ad ratio as well?

Ron, I'll let you answer the first.

Okay. So for full year interest, Jon, I think if you take a look at our interest expense in the first quarter and annualize that and then reduce it for anticipated debt reductions, that will get you close to a full year number. In terms of G&A as a percent of sales, we might expect it to tick up slightly from the 7.7%. But I think what we've said in the past is that we expect G&A to be approximately 8% of sales.

And finally, Jon, in terms of A&P, the second quarter and the third quarter as I said, it's both in terms of absolute A&P goes up in that quarter, and A&P percent of sales typically goes up in that quarter as well.

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

What was the consumption growth for the entire OTC segment? And then, maybe as a follow-on, what happened in the tail of the OTC portfolio? Was there a brand or 2 that drove tail growth ahead of the core 9? I think that's the first we've maybe seen that since you've been talking about refocusing your investments on the core.

John, let me start with the question on the tail. During the quarter, our Dermoplast brand saw a peak in orders. A lot of that brand goes through distributors and then out to hospitals. And occasionally, we'll see peaks in that business, and we saw a fairly meaningful peak during the quarter for that brand. So that was the primary driver behind the non-core.

Got it. And then in terms of consumption growth for the entire OTC segment?

Entire -- for our brands, entire brand portfolio, John, or the categories?

For your brand portfolio, for the whole segments -- the core and non-core.

Our consumption growth, to Ron's point, for the entire portfolio was obviously actually slightly above the 6.9% for the core OTC for the quarter.

Got it. How -- so in that context, how fluid is your definition of what constitutes the core? And I guess, how willing are you or how frequently do you reconsider non-core brands' long-term opportunity?

John, good question. I don't think we're very fluid at all when it comes to the core. And I think I've said this in the past. We're going to focus -- where it's been 9 brands, now with the acquisition, it's going to be 14. Those are the 14 main horses that we're going to ride moving forward. Those are the ones that we believe can deliver the most value. Now the corollary to that though is, just because a brand is not a core OTC brand doesn't mean we're not going to do anything with it, doesn't mean we're not going to invest, doesn't mean it's not going to grow. It's just we have to make decisions, and we have to prioritize. So whether it's Dermoplast or whether it's New-Skin, there are growth opportunities in some of those brands, and we'll try to take advantage of them. It's just like anything in life, you've got to prioritize and you got to get after the big stuff first.

Makes sense. A couple of housekeeping items. What seasonality should we expect in the GSK revenue contribution, if any?

It's a good question, John. I don't think I have the answer for that off the top of my head. Ron, do you?

Yes. John, when we -- obviously, we're doing due diligence of the GSK portfolio. What we saw historically was not a lot of seasonality from quarter-to-quarter, a little bit of an uptick around the Christmas holidays. But other than that, it was fairly consistent. Unlike the Prestige business where from the first quarter to the average sales for quarters 2, 3, and 4 where we've seen an $8 million to $10 million uptick, the GSK portfolio, we think, is going to be a bit more consistent.

John, the GSK actually, to Ron's point, I think, it's almost evenly split. It's actually slightly weighted towards the first half of the year, slightly.

Okay. And then in the presentation, the PowerPoint, how do you define BC, Goody's category? Is that just the powder part of the analgesics category?

Correct. Powdered analgesics is how we define it, yes.

Okay. Is there an opportunity to deliver other products in your portfolio in powder form like BC, Goody's? And do you now have the product development capabilities to do that?

We're -- John, we're actually looking at some things on that as we speak. I mean, that's one of the benefits of some of these acquisitions. They bring new technologies, new thinking that we can explore in other areas of the portfolio and vice versa. We have some technologies and things in our current portfolio that we may be able to bring to BC and Goody's.

Your next question comes from the line of Frank Camma with Sidoti & Company.

Just could you add some color on the gross margin? Was there anything unusual? I mean, I know you told us 57 -- to expect 57%. It seemed rather strong at that level. I just wanted to know, was there anything unusual in the quarter or anything seasonal affecting it other than the fact that you brought on the Glaxo brands?

There really wasn't anything unusual, Frank. And as you said it, gross margins were largely in line with the guidance that we've given for the company. Now you may see small seasonal impact to that over the year. But it was largely in line with what we expected and really driven by the transformation of the company to an OTC company.

Okay, great. That's good. So we can just expect to model that out for the rest of the year, I mean, based on what you're telling us?

Well, I think, Frank, I'd add one other thing to what Ron said. If you look at it are -- the only thing I'd say that maybe was a little bit of a bump was you'll see that our OTC business growth was so strong, and that's a higher-margin business. So that's what really bumped the overall gross margin, right?

Correct. Okay, sure. And because the household cleaning was relatively so low, that would improve overall margin?

So I think that's -- from a modeling standpoint, that's the part that may have -- it may have adjusted it slightly, right?

Yes. Okay. And just a clarification on the A&P spend. Obviously, we knew that it was going up, and we had that in our models. But then you said second and third quarter should be the highest period and then tails off in the fourth quarter, is that correct?

I think historically we have always spent at the highest level in the -- I think historically we have spent at the highest level in the second and third quarter.

Yes. It actually was -- the fourth quarter of last year was a little higher than the second quarter. But I think that's just because you were in the process of ramping up your spend on the core brands.

Yes, yes. Fourth quarter of fiscal '11, there was significant investment behind the PediaCare, yes.

PediaCare, okay, okay. That's not normal?

Right.

Okay, good. And just on the household cleaning, I know it's becoming less of a story, but could you just give us some update on how the stainless steel cleaner turned out and some of the new products that you rolled out behind that brand and how that's going?

I think stainless steel has just been rolled out to the marketplace. I think, as you know, stainless steel is a little more niche, as opposed to broad. So it's still early in that process. And then, we also just rolled out Comet 2x, as I said, which is twice the bleach level, which that's fairly new also, although we're seeing pretty good consumption trends initially out of the gate for that, Frank.

Your next question comes from the line -- your final question will come from the line of Reza Vahabzadeh with Barclays.

This is Jamie Robins on for Reza. When do you think is the earliest that you would be prepared to make another acquisition?

Well, Jamie, I'd say -- I'd give a couple answers to that. One, we feel really good about where we are on the transition of the GSK brands and the integration. It has gone extremely smoothly as a result of incredible planning and commitment by the organization. Second, as Ron pointed out, our balance sheet is healthy enough that today, if the right opportunity was there, that we actually could do something. And third, oftentimes, we don't really control that timing. It's the sellers that control that timing. But I think to answer your question from a readiness standpoint, both financially and from an organization standpoint, we could be ready to move immediately.

Okay. That's helpful. And if I could, just one last question. Within the acquired GSK brands, how were sales during the quarter compared to last year for these brands?

Sales compared to the last year were, I think, basically close to flat versus last year, in the first quarter. All right. I believe that's it for the questions. So we'd like to thank everyone very much. Appreciate it in this month of August, when I know it's tough, there are a lot of things going on. We appreciate everyone's time commitment. And we appreciate your support on the business and look forward to speaking to everyone again soon. Thank you, take care, and have a good day.

Thank you for your participation in today's conference. This concludes the presentation. You may now disconnect. And have a great day.