Dean Siegal - Director of Investor Relations & Communications Matthew M. Mannelly - Chief Executive Officer, President and Director Ronald M. Lombardi - Chief Financial Officer and Principal Accounting Officer

Joseph Altobello Frank A. Camma - Sidoti & Company, Inc. Karru Martinson - Deutsche Bank AG, Research Division

Good day, ladies and gentlemen, and welcome to the Prestige Brands Holdings Second Quarter Fiscal 2015 Earnings Call. My name is Darren, and I'll be your operator for today. [Operator Instructions] As a reminder, this call is being recorded for replay purposes. And now, I'd like to turn the call over to Mr. Dean Siegal, Director of Investor Relations. Please proceed, sir.

Good morning, and welcome. As a reminder, there's a slide presentation, which accompanies this call. It can be accessed by visiting prestigebrands.com, clicking on the Investor link, and then on today's webcast. I am required to remind you that during this call, management may make statements about their beliefs and expectations as to the company's future. 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 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, which it files with the U.S. Securities and Exchange Commission. Now, I would like to introduce Matt Mannelly, CEO; and Ron Lombardi, CFO. Matthew M. Mannelly: Thank you, Dean. Good morning, and thank you, everyone, for joining us this morning. As Dean referenced, we'll be working off a presentation that we put in the -- on the website. And therefore, I'd ask people to turn to Slide 5, where I'll start. I'll talk a little bit about Q2 performance and some of the highlights, some of the things we're doing. Ron will then take you to the financials, and then I'll close it and we'll open it up for some questions. So with that, we'll jump into it and I'd say, in general, we're very pleased with the performance in the second quarter, obviously. We're pleased on a number of fronts, I'd say. First of all, versus last year, last year second quarter was a very strong quarter, so we have said all along, to comp second quarter was going to be very difficult. But we're pleased versus the expectations that we set at the start of the year and we reiterated last quarter that we exceeded those expectations. And finally, we're pleased with the results given this retail environment, which continues to be very challenging, and I'll talk more about that. So when you add all those together, as I said, we're very pleased with the results for the quarter. Our revenue of $181 million is up 8.6% versus the prior year. And if you take out Insight, which just closed in September, we're up 1%. If you recall, we had said we thought we were going to be flat to slightly negative in the second quarter, so we exceeded that expectation. Our adjusted EPS, which Ron will talk more about, of $0.50 is up 6.4%, again exceeding our expectations. I think the next number, which we continue to point out as being very important, is our very strong free cash flow. And our adjusted free cash flow of $36.5 million, being up 14.7%, is really a critical element of our long-term strategy and one of the 3 prongs to our value creation process. I think the other number that's very important that we'll talk about is our core OTC consumption growth. And again, if you exclude the competitive returns and what's going on with probiotics in digestive, we're up -- which we have in the past few quarters, we're up 4.9%. So at the end of the day, our job is to create demand for the products. And you can see that that's happening. You can see that we -- that's happened as a result of -- we continue to invest in the business. We continue to invest in brand-building efforts. So in the second quarter, among other things, we had several new advertising campaigns, including a new campaign that just broke recently for Little Remedies, we have a new advertising campaign that broke in the second quarter for Goody's that featured Dale Earnhardt Jr. We also have a new advertising campaign that broke for a new product called Fresh Guard as well as a new ad campaign for Beano. So we invested quite a bit in advertising and new campaigns. We also invested in things like Goody's through our sports marketing partnership with Dale Earnhardt Jr., which I'll talk more about. And we continue to focus on new products. We continue to focus on digital marketing, and I'll also talk about promotions across a number of our brands as well in a little bit. Next up, we successfully closed on the acquisition of Insight Pharmaceuticals in September. That integration is well underway and I'll talk a little bit about that in a few minutes as well. And finally, what all that means is we are on track to deliver very strong financial results for the fiscal year. And we continued to reiterate our full year sales growth of plus 15% to 18%, adjusted EPS of $1.75 to $1.85 and adjusted free cash flow of approximately $150 million. With that, if you'll turn to Page 6. I think one of the messages for today is the power of the portfolio and the power of our portfolio, and as we get bigger -- becoming bigger, that portfolio brings even more power. So it allows us to focus on brand building. We're really focused on those core OTC brands, on their long-term health and on doing things from a brand-building standpoint that helps us gain market share, which again I'll talk about in a little bit. Also, by having a bigger, more broader portfolio, it allows us to better manage through this very challenging retail environment, all right? It also -- you can see that we've created a more diversified OTC portfolio and that more diversified portfolio allows us to go across more categories or platforms, as we call it, and more geographies that we've gotten into in the last 12 to 18 months. This also allows us to leverage our financial model to continue to build the portfolio. We have a very efficient operating model in terms of free cash flow and from a sales and marketing standpoint, and outsourcing our operations, which gives us very significant and very consistent free cash flow. That provides us -- allows us to pay down debt and provides us a capacity for additional accretive acquisitions. If you'll turn Page 7. I'll spend a few pages and talk a little bit about the business and what's going on. We're very excited on a number of fronts. First off is Goody's. And we had -- we were very fortunate, a week ago, Sunday, we are the title sponsor in NASCAR at a race called the Goody's Headache Relief Shot 500, which took place in Martinsville, Virginia on October 27. And that's something we've sponsored for a few years. We also have a relationship with Dale Earnhardt Jr. And at the race, we announced that we are expanding our relationship, signed a new 3-year multiyear agreement with him and that he'll be racing in the 88 Goody's car in Texas next year. And we also have additional things built in, in terms of what we'll be doing with Dale over the next 3 years. One of the benefits of that is it allows us -- we've been very successful at leveraging our NASCAR relationship and our relationship with Dale at retail. So when we have something like a Goody's Headache Relief Shot 500, we've been very fortunate with the dollar channels with some of our key retailer accounts to leverage that in terms of displays. And you can see here, we have a new Dale, Jr. special pack that was just introduced that we recently leveraged at retail. And you can see -- I think one of the beauties of it is -- and we're talking about integrated marketing, we sponsored the race, we sponsored Dale, we leverage retail and lo and behold, we were lucky enough a week ago that Dale actually won the race. So the TV coverage that we got from that in USA TODAY, on ESPN, et cetera, was fantastic. And you can see, in the second quarter, our consumption over the last 12 weeks is twice the category rate, so we believe our relationship that we're leveraging with both NASCAR and Dale, Jr. is paying significant dividends for us. Slide 8, if you turn to -- talks a little bit about Luden's, which I alluded to last time that we're introducing new flavors, which we have done. And I would just say a couple of things. We're trying to do things to gain awareness and gain trial of those new flavors on the right. You can see, we're doing some sampling efforts at different music festivals around the world -- around the U.S. I should say. We're doing it there because we're trying to bring Luden's flavors to a younger target audience. And I would just say a couple of things. You can see consumption over the latest 12 weeks of 7.6% is over -- almost 3x the category growth rate. And I'd say the new flavors in the second quarter that were introduced are off to a very strong start. The next page, we've talked a little bit about in the past, but I thought I'd take it to kind of a specific brand, and that's Doctor's NightGuard, which is for bruxism. The point is, is we're investing more dollars in digital marketing, as we said last time, and we're continuing to have success. And you can see that the growth for Doctor's NightGuard was up 6.6% in the second quarter. I'd point out here -- I think the point of the slide is when consumers are on the web, whether they go to WebMD, whether they Google, whether they go to Amazon, if they put in teeth clenching or bruxism or whatever, we have a paid advertisement that comes up that allows them to click to our site. When they click to our site, there's a way to get them to purchase immediately. And then the other point I would make on this slide is if they don't purchase immediately, when they go to other sites, it's wired in such a way that we still have the ability to put up our brand and coupon to bring them back to purchase down the road. And again, that's been very successful to date. Going to Slide 10. Something that we haven't talked about as much that I think is something we've been trying to do over the last year in particular, and that is the strength of the portfolio again, and we're trying to leverage that portfolio across brands and taking some of our core OTC brands and leveraging them with the noncore brands. So in-store and with retailers and with circulars and with displays, we're doing a better job of leveraging across the portfolio and getting promotions and trade activation devices that are leveraging across our entire portfolio. And again, the reason for that is the power of the portfolio and the portfolio becoming bigger. Turning to Slide 11. This is something I think you're familiar with that we've shown a number of times. You can see core OTC consumption trends here. And we show it both in general for core OTC as well as excluding the competitive -- the return of the competitive product in digestive. And for the second quarter in total, consumption of 1% for the core OTC. And if you take out the brands that are impacted by that return, et cetera, we're up 4.9%. And again, as I said, the most important thing we can do is stimulate demand and pull product off the shelves and we're doing that quite effectively. The result of that is, our long-term objective is to outgain the categories in which we compete and gain market share. And you can see our market share for the core OTC business, up to 10.9% in the second quarter. Page 12 is also something we've talked about in recent times and it continues. And that is, we're having terrific consumption and that consumption is outpacing our shipments as retailers continue to keep a very close eye on inventory. You can see on the left, it shows how our consumption, which is in the light blue, has outstripped our shipments, which is in the dark blue, over the last 4 quarters consistently, all right? And the second part of this slide shows that 1 year ago, this terms -- in terms of million of units that we have at retail, a calculation that was done. That shows versus the second quarter of last year, that retail inventory is down 12% in terms of units. So again, the most important thing we can do is stimulate demand. You can -- the retail trade can only take inventory down so much, but they continue to do that. But if we stimulate demand, at the end of the day, that will all even out. Turning to Slide 13. Take a couple of minutes, I'd like to talk a little bit about Insight and the integration of Insight. And I'd start by saying, I think given that this is our sixth acquisition in the last 4-plus years, we have a seasoned group that's very competent and it's a core competency in terms of integrating the businesses into the organization. From a back-office standpoint in terms of IT, finance, et cetera, all those things really are in the process of being finalized. We have moved all the people to our headquarters in Tarrytown, New York already. In this day and age, it's very important that your regulatory and quality assurance functions are up and running, and those are all up and running in our Tarrytown office as we speak. And from a sales standpoint, we have made the conversions and we have -- our sales force now has these products in their bag and is actively selling them out of the Prestige bag right now. Those are the things that are all happening and really will be finalized by the end of this quarter. As you can see, the longer-term benefits in terms of the supply chain will optimize. We took on a number of new suppliers. We will optimize that network over the next 12 to 24 months. There were also some things happening from a cost savings standpoint that we'll be working on over the next 12 to 24 months to ensure that we realize the full benefit of those cost savings. From a brand-building standpoint, I'd say that's the area where there's been the most activity in a very short period of time: formulating the marketing strategies, a significant amount of consumer learning in terms of what will result in the development of the brand plans, the brand communication plans and the new products that we'll be developing for FY '16 and beyond. And again, just to reiterate what we've said on previous calls, the Insight portfolio, our plan is very much to stabilize the business over the next 12 months to do all the things necessary from a consumer-learning standpoint. And once it's stabilized, we are very confident that we can grow that business, as we have the other acquisitions that we have done. Slides 14 and 15. First of all, on Slide 14, that really shows what we've talked in the past, this idea of building platforms. And everything in pink is either a new platform or a new brand that we've brought to an existing platform. And you can see that we now operate across a number of different platforms and reach into a number of different categories with our retailers and impact a number of different consumers. Slide 15 shows you this in terms of the size, the significant scale of each of those platforms and these numbers are from a retail standpoint. But you can see whether it's women's health, whether it's analgesics, GI, et cetera, we have significant presence in each of these different categories. Turning to Slide 16. As I said, the power of the portfolio and the power of those platforms, you can see what it's done to strengthen our OTC business. And the top slide -- the top part of the chart shows that our OTC revenues have grown 3.5x since 2010. Our international revenues have grown 3.1x. The average size of our top bands, all right, and these are retail sales numbers again, have grown 3x versus 2010. And then, as we've talked about in the past, we were primarily food, drug and mass back in 2010 and we've expanded that significantly with convenience, club and dollar over the last 4 years. And again, this just points out to the power of the portfolio and the power of building that portfolio, which plays right into Slide 17, which talks about that platform and whether it's additional categories, whether it's building brand scale, whether it's expanding internationally or expanding into different channels, all these things -- and the power of this platform, it creates more M&A opportunities for us and an expanded pool or bigger sandbox in which we can play from an M&A standpoint. So with that, that's a little bit about what's happened in the second quarter. And again, the theme today is the power of the portfolio in aggregate. And with that, I'll turn it over to Ron, who'll take you through some of the financial highlights for the quarter. Ronald M. Lombardi: Thanks, Matt, and good morning, everyone. If you'll turn to 19, we'll start with the financial section of this morning's presentation. As Matt has described, we're very pleased with our results during the second quarter, given the continued challenging retail environment. Our diversified OTC portfolio and continued focus on brand building has resulted in strengthening consumption trends across many of our core OTC brands over the last 2 quarters, helping to drive the strong results realized so far this year. Results for the quarter included both solid revenue and EPS growth, along with consistent cash flow. Highlights for the quarter included net revenue growth of 8.6% from our increasingly diversified portfolio and the acquisition of Insight; adjusted EPS of $0.50, up 6.4% over the prior year; and adjusted free cash flow of $36.5 million, which was approximately 15% above the prior year's level. With our solid results for the quarter and year-to-date, we continue to believe we are well positioned to achieve our full year outlook for sales growth, adjusted EPS and adjusted free cash flow. Turning to Slide 20, we have our Q2 and year-to-date results. As a reminder, the information included in today's presentation includes adjusted results that exclude acquisition-related and other items. A reconciliation between these adjusted results and reported results is also included in today's earnings release. Our net revenue increased 8.6% to $181.3 million during the quarter or 1% above the prior year, excluding the impact of the Insight acquisition. Our nearly 9% sales growth was driven by strengthening consumption trends in many of our core OTC brands, which grew well above the category, and from the addition of Hydralyte and Insight. Our second quarter gross profit was in line with expectations and more importantly, above the previous fourth quarters levels. We expect our second half gross profit to be slightly ahead of our first half level of 56.7% as we realize the impact of the Insight portfolio on our mix going forward. A&P spending decreased approximately 1 point to 13.8% during the quarter due to a change in timing of expenditures between Q1 and Q2 compared to the prior year as well as the shift from A&P to merchandising activity in response to the current retail environment. G&A, at 8.3% of revenue, was in line with expectation and increased over the prior year level due to the Hydralyte and Insight acquisitions. We expect the second half of the year to continue close to this level. Adjusted net income increased 7% and adjusted EPS increased approximately 6.5% during the quarter, with adjusted EPS of $0.50. This $0.50 did not include any contribution from Insight as Insight was breakeven from an adjusted EPS during the quarter. Our year-to-date results largely reflect the trends realized in Q2 with sales growth of 5.7% and adjusted EPS of $0.91, which is up 3% from last year's level. Turning to Slide 21, we have a reconciliation of reported net income and EPS to adjusted results. As a reminder, our earnings release contains a full set of disclosures about our non-GAAP financials. Q2 and year-to-date results include adjustments related to costs associated with the acquisitions of Hydralyte and Insight, purchase accounting items for inventory and integration and transition costs largely related to Insight. Q2 adjusted results include $10 million or $0.19 per share of these costs, and the year-to-date results include $15 million or $0.28 per share. As we have previously stated, we continue to expect $25 million of adjustments for the full year. Turning to Slide 22. We have a summary of free cash flow for the second quarter. Prestige's consistent and significant cash flow trends continued during the quarter and on a year-to-date basis. The business generated $36.5 million of adjusted free cash flow during the second quarter and approximately $68 million year-to-date. Our cash flow continues to be generated from strong EBITDA levels, low levels of fixed asset additions and meaningful deferred tax asset utilization that leads to low cash tax payments. Adjusted cash flow excludes approximately $10 million of payments largely related to transaction expenses during the quarter. And consistent with previous expectations, we expect total adjustments to cash flows of approximately $20 million for the full fiscal year. Our debt to covenant-defined EBITDA ratio was approximately 5.6x, which was an increase of approximately 1 point from the first quarter's level due to the Insight acquisition, which closed in September. We financed the Insight acquisition principally through an add-on to our existing term loan. Finally, we continue to expect full year adjusted free cash flow of approximately $150 million, which will be used to pay down our term loan and will result in rapid deleveraging and increased M&A capacity. At this point, I'd like to turn the discussion back over to Matt. Matthew M. Mannelly: Thanks, Ron. So I'll just wrap with a few comments about the second half of FY '15 and kind of the road ahead. If you turn to Slide 24. I'd say the headline, again, for us is the strategies we've laid out and the strategic approach continues to create shareholder value for our shareholders. I'd say for the second half of the year, we are cautiously optimistic. And the reason I'd say that is we're very optimistic and very pleased, as I said, last quarter, our consumption trends are improving. And our consumption trends in the second quarter are even better than our first quarter consumption trends. So from that standpoint, I'm somewhat optimistic. I'm cautious because the retail environment continues to be challenging. For everyone on this call, I think you've seen all the retailer numbers in the last quarter and front-end comp store sales are basically flat to slightly negative to slightly positive for some retailers. And as a result, retailers continue to ratchet down inventory. And the way I've described it to people is, I think last year in the third quarter, for the industry, there was somewhat of a hammer for inventory reduction, led by some very large retailers. And what I would describe is this year what's happened, there hasn't been a hammer, but that screw has been turned tighter -- slightly tighter month-by-month. And in fact, one of the other largest retailers just announced in the last few weeks a $1 billion inventory reduction goal over the next couple of years. So you can see the retailers continue to look in this environment, to tightly manage the inventory and that's the reason for some of our cautious optimism. However, that said, with the consumption gains, and as I talked about earlier, it's the power of our portfolio that will allow us to manage through that and provides us with a favorable outlook for the long term, I believe. From a brand building standpoint, we'll continue to invest in new products, and I think you'll see some things in Q4 of this year. We also will continue to invest in our brand-building communication vehicle. And those of you that have followed us for some know, that typically in the second half, our A&P is up slightly. You also notice that -- know that our gross margin typically is down somewhat in the second half, given the skew of the mix of the portfolio. We will continue from a promotional spending standpoint, as in recent quarters, which impacts the top line given this retail environment and we'll stay the course on that. And we'll continue to look to new marketing vehicles to try and reach the consumer, connect with the consumer and drive revenue with the consumer. From an Insight integration standpoint, I've hit on this a little bit. First of all, we're very pleased. We have a very seasoned integration team as a core competency. We have filled almost every Insight position at this point of the 25 positions that we sought when we purchased the business. We have quite a bit going on from a brand building standpoint, as I said, in terms of consumer learning. We're working on finalizing advertising with our agency right now. We're exploring different vehicles to interact with health care professionals, which is very exciting and very new and different for the Insight business versus the last several years. All that said, as we said over the last couple of quarter calls, the business has been underinvested for the last several years. It's had slight declines. Our goal is to stabilize that business. And once we stabilize it, we believe we can grow it significantly, especially with category leaders like Monistat. In stabilizing the business, there's some things we need to do both from a supply as well as a demand standpoint. So we'll take a lot of that learning that we get in FY '15 and that will be the foundation and lead us towards more significant investment in FY '16. From an M&A standpoint, I talked about it briefly. The 2 words that remain operative for us and important are, we're going to remain aggressive and disciplined, both aggressive and disciplined. And we're effectively integrating the latest acquisitions in. We're in a very good position should we want to pursue other opportunities. We're going to capitalize on what's going on in the OTC industry that we've talked about the last couple of quarters. And we're going to continue to be very active in that area. So with that, finally, from a financial standpoint, as I said, given the first quarter, given the strong second quarter we just had, despite the challenging retail environment, we remain confident in our FY '15 full year outlook and revenue growth of plus 15% to 18% with an adjusted EPS of $1.75 to $1.85 and that all-important free cash flow of $150 million. So with that, I'll open it up to questions and we appreciate everyone's time today.

[Operator Instructions] The first question is from the line of Joe Altobello from Raymond James.

I just wanted to start out, I guess, with the retail inventory level. It sounds like, Matt, this morning you're still pretty cautious there. Could you just give us a little bit of a 30,000-foot view of where that stands by channel, whether it's most acute in mass and drugs still or are you seeing it also in places like dollar and club as well? Matthew M. Mannelly: I think, Joe, to your point you're seeing it the most in mass and drug. I mean, they're the ones that are proactively talking about it and proactively doing things. And they represent about probably 2/3 of our business. I'm not saying it's not happening in the others, but it's happening -- it continues to happen in those 2 channels. And as I've said in the past, it continues to happen because of lack of foot traffic. So that's what's really causing it. As long as there isn't foot traffic, as long as their front-end comp store sales aren't up, they're going to continue to tighten this. And I believe, if you -- as you follow other retailers, you're hearing this -- and manufacturers, you're hearing the same thing from other people.

I know, exactly. You guys are certainly not an outlier in that regard. But in terms of the inventory that retail -- I think in one of your exhibits, you showed at least a sequential increase from 1Q to 2Q. Is that seasonal? Or is that something that gets -- to get excited about? Matthew M. Mannelly: Yes, it's somewhat seasonal, Joe. I mean, again, over the last few years -- and you've followed us for quite some time. That Q2 to Q3 time frame, that's straddled right there is the beginning of cough/cold and that's where some retail is taking cough/cold and so as a result, it's seasonal.

Okay, great. And then just 2 for Ron, just to clarify. And I apologize if I missed this. With Insight going forward, you expect G&A to be about $15 million a quarter, is that right? Ronald M. Lombardi: We expect it to between 8%, 8.5% of sales going forward, Joe.

Okay. And then the $150 million of cash flow this year, that excludes the $20 million of payments, right? Ronald M. Lombardi: Yes, that's correct. It excludes it.

Your next question is from the line of Frank Camma from Sidoti. Frank A. Camma - Sidoti & Company, Inc.: Just a clarification on the gross margin. So I mean, I think, Matt, you mentioned at the end that typically gross margin is weaker in the second half. But I thought Ron had said you were looking for a higher gross margin. I just wanted to clarify that. Matthew M. Mannelly: Yes, Frank. I think that's a good call-out. I think it's both in a way, but go back and look at the history of the business over the last 4 years, we've run lower gross margins in the second half than the first half because cough/cold products typically have lower gross margins. However, to Ron's point, with the addition of Insight, which is gross margin accretive, we're expecting slightly higher gross margins for the quarter, but they may not be as high as you might think because of the legacy brands. Does that answer your question? Frank A. Camma - Sidoti & Company, Inc.: Yes. Yes, it does. It brings it down. I got you. Okay, and I was wondering if you could talk a little bit about what you're seeing so far. I know it's kind of early, but trends in the cough/cold season versus an on-average season. Matthew M. Mannelly: Yes. Again, I think a good question, Frank. Just so you know, the season we -- everyone thinks of it, typically it starts October 1, right? We typically -- everyone in the industry looks at it an October to March time frame. And so here we are, first week in November, incidence levels up about 3% season to date. Now I'll tell you, actually for me, I think that's a little bit disappointing. However, I would also caution people on that. Candidly, it really doesn't matter what incidences are in October, it's such a small part of the season. It's really incidences in November and December, because that's when the season begins to heat up and that also will determine retailers in terms of their reorder patterns for the next quarter. So it's up about 3% in terms of incidences for the first 4, 5 weeks. And not to be negative, but we're kind of hoping for some sick people in the holiday time period. Frank A. Camma - Sidoti & Company, Inc.: And I guess just a follow-up to that. Could you comment just on the -- just specifically on the return of competitive products in cold/cough. I mean, is that still -- because you mentioned it across multiple categories this time, which obviously, they're out there. But if you were just to point to that category in particular, is it having as much a weight as last year? Is it more? Is it less? Just wondering about that in particular. Matthew M. Mannelly: Yes, I think, Frank, again, what we said was it's going to take -- we've said all along. It's going to take 2 seasons for that to play out. We're starting the second season right now, right? And I think -- so we don't really -- we'll know more at the end of this season. What we know up until the start of the season is -- and I've said this. I said this last quarter, it's probably impacted us a little more on PediaCare than we thought and it's impacted us a little less on Little Remedies than we thought. So I think for us, this season's important that we -- and we've said, we said it last year, to get through 2 seasons to see what the impact is and how we manage the businesses accordingly moving forward. Does that answer your question?

And the last question comes from Karru Martinson from Deutsche Bank. Karru Martinson - Deutsche Bank AG, Research Division: Just on the cough and cold season last year. I think we were down about 15% in the third quarter. I mean, is the thought process here -- certainly you don't have a crystal ball, but the thought process here that we are up against a little bit more of a straightforward comp? Matthew M. Mannelly: Yes, that's exactly right. And I think you recall just correctly, last year we were down significantly in the first half of the season and we were actually at a low for 15 years. In the prior year, for the full year, we were at a 10-year high. So our anticipation was coming into the year, that if we comped last year in the third quarter with the quarter that we're going into right now, we would expect decent comps because of what happened in the third quarter last year. That is our business judgment and we'll see how it plays out. Karru Martinson - Deutsche Bank AG, Research Division: And we certainly have been hearing from other retailers about the decline in traffic, foot traffic especially in mass and drug. But my question is, where is that foot traffic going? What channel is absorbing that? Matthew M. Mannelly: Well, I think you're seeing a number of things that are happening from what we see and what we're told, et cetera. And I think you're seeing some of that traffic is going to e-commerce. Now I don't believe that traffic is going as much to e-commerce in our categories because we're needs-based products and they need them right away, all right? But some of it's going there. And candidly, some of it's not going to retail; it's going to other basic needs that consumers have. So I think that's one of the reasons why -- those are 2 of reasons why foot traffic is down. Karru Martinson - Deutsche Bank AG, Research Division: Okay. And in terms of the decline in some of those other needs in terms of like gas prices and so forth, I mean, do you feel that, that has a corresponding impact on your categories? Or is that just kind of a, hey, it's great if it comes; if not, we just kind of continue on? Matthew M. Mannelly: Well, again, I think that's a good question. I think, first of all, OTC, the reason we've said this in the past, one of the reasons among the reasons that we like the business and why we move so much towards OTC is, in good times or bad economically, OTC continues to chug along, whether it's at plus 1% or 2%, it's steady. It's not a sexy industry, but it's steady. So we think we'll get that steady growth, whether the economy is growing strongly or not. That said, the second part of your question is, hey, it doesn't hurt that from a consumer standpoint, a consumption standpoint, that gas prices are coming down. And that hopefully, should help store traffic in the next quarter or 2, I would expect. Karru Martinson - Deutsche Bank AG, Research Division: All right. And just lastly, and my apologies for being a broken record of asking the same question over the years. But when you guys look at acquisitions and manufacturing assets, is that something that you would consider as you kind of look at this aggressive and disciplined strategy in the size of acquisitions that you're looking at? Matthew M. Mannelly: Yes, I think the answer there, which I think I've given this in the past is, 5 years ago, we said we'd never buy anything that had bricks and mortar. And that we've said is, we're not running from it anymore, but we're not running to it. We like our operating model. We love our free cash flow. It allows us to do a number of things. That said, if we found the right acquisition that had bricks and mortar, a plant that could benefit what we're buying as well as other elements of the portfolio, we would consider it and have considered it. But again, we would consider it and have considered it under the guise of our aggressive and disciplined strategy of how we look at M&A.

Thank you. That's the end of the question and answers. I'd now like to turn the call over to Matt Mannelly for closing remarks. Matthew M. Mannelly: All right, again, thank you very much, everyone, for taking time out of your schedule today. We appreciate it. As I said, we're very pleased with the results and we look forward to speaking with everyone in the next quarter. Take care and have a good day.

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