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

Joseph Nicholas Altobello - Raymond James & Associates, Inc., Research Division Frank A. Camma - Sidoti & Company, Inc. Linda Bolton-Weiser - B. Riley Caris, Research Division Jon Andersen - William Blair & Company L.L.C., Research Division

Good day, ladies and gentlemen, and welcome to your Q3 Fiscal 2015 Prestige Brands Holdings Inc. Earnings Conference Call. My name is Grant, and I'll be your operator for today. [Operator Instructions] As a reminder, this call is being recorded for replay purposes. And now I would like to turn the call over to Mr. Dean Siegal, Director of Investor Relations. Please proceed.

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 and presentation. I am required to remind you that during this call, management may make forward-looking statements regarding their beliefs and expectations as to the company's future business prospects and results. All forward-looking statements involve risks and uncertainties, which, in many cases, are beyond the control of the company and may cause actual results to differ materially from 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 are filed with the U.S. Securities and Exchange Commission. Now I would like to introduce Matt Mannelly, our CEO; and Ron Lombardi, our CFO. Matthew M. Mannelly: Thank you, Dean. Good morning, everyone, and thank you for joining us this morning. As Dean said, we have a presentation that we typically go through. And it'll be consistent today, where I'll take you through the performance highlights and then Ron will go through the details of the financial review, and I will come back and wrap it up. So with that being the case, I'd ask that you turn to Page 5 of the presentation. I'll talk a little bit about Q3 performance highlights and some of the things that happened this quarter. First of all, from a numbers standpoint, we're -- as I -- we said in the press release, we're very pleased with the numbers. Q3 consolidated revenue of $197.6 million, which is up 36.4% over a year ago. Our organic growth on a constant currency basis is plus 2.9%, which we're extremely pleased with, plus 2.1% when you take the headwinds on a current dollar basis. Core consumption -- our core OTC consumption growth, very strong also, excluding PediaCare, which we've talked about over the last several quarters, plus 5.5%, with core OTC consumption growth including PediaCare, total core OTC up 1.6%. So very strong performance in terms of the core. Our adjusted gross margin of 57.2%, up significantly versus prior year third quarter at 55.5% and up slightly from Q2. So we continue to improve on a gross margin front. Adjusted EPS of $0.48 is up 60% versus Q3 of year ago. And for us, the all-important adjusted free cash flow of $45.5 million is up nearly 10% versus third quarter of year ago. I think the reason we believe for these strong results is we continue to invest in the business and have consistent and innovative marketing support that's helping build the long-term brand equity of our core OTC and international brands. From an acquisition standpoint, Insight Pharmaceuticals, I'd say the integration is now complete, and we're on -- well underway in terms of both our supply and demand initiatives. And finally, from an outlook standpoint, for the full fiscal year and fourth quarter, we're on track to deliver what we believe is very strong financial performance, and we've updated our revenue growth to the high end of the range of 18%. We've adjusted -- adjusted EPS, we've moved to $1.82 to $1.85. And we've also increased our adjusted free cash flow to $155 million. If you turn to Page 6, this is an important slide, and I think this is an interesting slide that we introduced last quarter in terms of how we're managing the portfolio. And I'd say the results for the quarters say we're delivering the results that we hoped to achieve. If you look at the businesses that we're investing in versus our managed-for-cash businesses, if you recall from a few years ago, we used to talk about core OTC making up 2/3 of the portfolio. Given the acquisition of international and our success in international as well, we now have core OTC international that makes up 78% of the portfolio. And by the way, that's up a percentage point from last quarter of 77%. And you can see that, that 78% of the portfolio is performing very strong on a constant currency basis, plus 4% versus year ago. And the managed for cash, right now, it's performing very strong as well. At 22% of the portfolio, it's nearly flat. And you can see that's how we achieved our overall 2.9% organic growth on a constant currency basis. So we're quite pleased with both parts of the portfolio in terms of how they're performing and well within the bandwidth of what we would expect. Turning to Page 7. I think this is also an important slide that we've talked to the last several quarters. And you can see that our core OTC consumption growth has accelerated, and this is contributing to our revenue, our sales momentum. On the left side is consumer poll consumption, and again, you can see the numbers with and without PediaCare that I referenced on the previous page of plus 5.5% and plus 1.6%. I think you would note that on the right-hand side, our organic sales growth of 2.9%, I believe that's supposed to be, and 8.3%. And I think the point to note there is we've said the last couple of quarters that our consumption growth has been exceeding our sales growth, and you can see that's starting to catch up at this point, and that's what we have been saying for the last few quarters. Turning to Slide 8. I think the other good news for us is our Q3 core OTC growth was very broad-based, and we're quite pleased with that. And you can see from a consumption standpoint, the percent of the core OTC portfolio with consumption growth in the third quarter was 78% of the portfolio. So we're quite pleased with that. We're also pleased with the fact that the growth is coming from our large brands. And you can see the BC and Goody's numbers here in terms of our consumption growth quarter -- accelerating quarter-over-quarter from Q1 to Q3. And Clear Eyes continues to really outperform the category and outperform the market. And we believe the results for all of these brands is as a result of the investment, and the type of marketing programs that we're employing are really paying off for our brands. Turning to Slide 9. I'll spend a couple of slides here and talk about some of the brands and what we're doing, some of the exciting things. BC, for us, really targeted campaigns are helping drive our revenue growth. And right now, we're running a testimonial campaign that's really resonating with consumers on BC that we've been running significant ways in the Southeast. And we are also testing a Hispanic marketing program in a couple of key markets in the South, as it's shown very favorable results year-to-date. And as a result, you can see that we continue to significantly outgrow the category, latest 12 weeks, 1.4x category growth; and for a 52-week, 1.9x category growth. So we're quite pleased with these results. Turning to the next page. Clear Eyes, which I referenced earlier, very strong results. We think this is a result of a couple of things. First of all, we signed Vanessa Williams, I think, a couple of years ago now. She's been very effective for us. We also modified our target audience to go more against older women, and we think that's been quite successful, and Vanessa has been quite successful in reaching that target audience. So you can see, our Clear Eyes growth of 15.7%, and in a very significant and important segment for us, which is the redness segment, you can see how significantly we are outperforming the key competition, both the 12- and a 52-week basis. So final thing I would note on Clear Eyes is we have had exceptional growth in our C-Store initiative. And you can see over the last 12 weeks, our consumption growth is up 36%. So again, we're quite pleased with the terrific success that we're having in the C-Store channel. Turning to Slide 11. I want to spend a little bit of time and talk about our latest acquisition in our women's health platform in Monistat and tell you about some of the things that we're in the process of doing right now and getting ready to roll out in the first quarter of FY '16. Let me step back and start with and talk a little bit about the brand and, most importantly, about the consumer. For women who have yeast infections, often times, it's important and they -- as they -- most women visit the doctor the first time they have a yeast infection. Their options are very simple, they can either get a prescription of fluconazole or the doctor can tell them that they can take an OTC, over-the-counter product. That would be either Monistat or, primarily, private label. 70% of consumers, patients, use what their doctor recommends. I've referenced this in the past, when we did this diligence on the Insight business, we look back 10 years, and you can see here in units. And you can see the blue line is Monistat units, and the red line is prescription units. And you can see how they've changed over time, and prescription has grown and Monistat units have declined. And you can see back in 2008 where the lines crossed. Well, it just so happens at that time, that's when the previous -- or the 2-time previous owner had stopped the elimination or had eliminated their health care professional marketing programs and calling on doctors. And it was not done since 2008, and you can see the results. We're pleased to announce that we're going to take steps to restore our leadership position with health care professionals, and we have 6 initiatives that we are embarking upon to do that. And the first one is we're going to employ a direct professional sales force to call on OB/GYN offices. Second of all, we're going to facilitate peer-to-peer education and information. We have relationships with a number of key health care professional influencers who reach out through webinars and other means to OB/GYNs, and we are working with them to do that. We have commissioned specific medical studies in this area that we expect to work with doctors on. We are also in the process and have been since our acquisition of attending and sponsoring a number of professional congresses for these health care professionals. I referenced one on the left-hand side that's in May, the biggest one of the year, the American Congress of Obstetricians and Gynecologists that we'll be attending with a number of people in May and making a major presentation at. In addition, we'll be conducting e-mails and direct-mail campaigns to these health care professionals. We want to begin a dialogue with them. We want to engage them, and we want to enroll them in some of the programs that we are doing. And finally, we will be sampling products in medical offices, and this has not been done for Monistat in the past. And we expect this to yield favorable results over the long term. I think we're very excited about this, and the most important reason is this: Monistat is as effective as a prescription in terms of fluconazole, yet it works 4x faster in terms of symptom relief. That is a major consumer benefit that we want to make sure that healthcare professionals are touting to consumers. In addition, Monistat cures a broader spectrum of yeast infection strains than does the RX prescription. In addition, from a consumer standpoint, from a time and convenience and a cost standpoint, they are much better served in terms of going to a retail outlet and purchasing an OTC item. And actually from a health care professional standpoint, they are better served and it's more profitable for them, they are reimbursed more, those OB/GYNs, dealing with women with pregnancy issues and other issues. And they're reimbursed more than they are with -- for yeast infections. So it's in their best interest to recommend OTC to them as well. And finally, one of the additional benefits in terms of OTC is fluconazole does have the oral -- fluconazole does have side effects in terms of headaches as well as making women nauseous as well. So if you look at all these things, the initiatives that we're undertaking in the long-term health care program that we're going to install beginning in the first quarter, we believe is going to have a significant impact on the business over time. Turning to Slide 12. We haven't talked a lot about international to date, but as you can see with the acquisitions that we've done, international, the scale of international is now beginning to contribute to our growth profile. We've said in the past, the last couple of quarters that Australasia is going to be a beachhead for us. We continue to introduce new products in Australia. We're also in the process of expanding and introducing those products into New Zealand in terms of Care Pharma introductions. From a Hydralyte standpoint, which we acquired in May of this year, we have a number of new products under development and are in the process of introducing those to the marketplace. And the U.K., which is also an important market for us, we are in the process right now with a major new product introduction of preservative-free Murine eye drops. So we continue to have strong performance from Care. We have significant growth potential in Hydralyte, and our U.K. business continues to excel. Turning to Slide 13. From an integration standpoint of Insight Pharmaceuticals, I referenced that in the past, this is really one of our core competencies in terms of integrating businesses into the company. And I'd say that integration is largely complete at this point, as you can see from a systems and a back-office standpoint. From a regulatory and QA standpoint, all of the functions have been fully integrated in this industry, and for us, that is a very important point, and we take it very seriously. And finally, from a sales standpoint, go-to-market, we are fully integrated with our sales point at this time -- sales force at this time. In terms of the ongoing initiatives, from a supply chain standpoint, we're optimizing the supplier network, and we're doing so in a way that's consistent with our supply standards and our expertise. And in addition, we've identified, and we're going to be capturing the cost saving potentials over the next 12 to 24 months associated with these brands. From a brand-building standpoint, as I said, and as I just referenced with Monistat, our marketing strategy as well as our programs are well underway. And we are also beginning to embark in terms upon new products and an innovation pipeline. For us, Monistat is the #1 priority in the company, and we feel we're doing the right things right now to set ourselves up for FY '16 and beyond. So with that, I'll turn it over to Ron, who'll take you through the details of financials in the third quarter. Ron? Ronald M. Lombardi: Thanks, Matt, and good morning, everyone. Turning to Slide 15, we start the financial overview this morning. As Matt has described, we are very excited about our third quarter results, including our record revenues and organic growth of 2.9% during the quarter. Strengthening consumption trends and strong organic growth across our core OTC and international portfolios has resulted in extremely strong third quarter and fiscal year-to-date results. Our results for the quarter exceeded expectations and included solid revenue and EPS growth, strong free cash flow generation and strengthening of our overall financial profile. Highlights for the quarter include organic revenue growth of 2.9%, excluding the impact of foreign currency; net revenue growth of approximately 36% to $197.6 million; adjusted EPS growth of 60% to $0.48 per share; and adjusted free cash flow growth of nearly 10%, generating $45.5 million of adjusted free cash flow during the quarter. The strength of our third quarter results has enabled us to update our full year outlook. We now expect full year adjusted EPS in the range of $1.82 to $1.85 per share; full year revenue growth in the 18% range, along with anticipated organic growth in Q4. In addition, we project adjusted free cash flow of approximately $155 million for the year. Turning to Slide 16. We have our consolidated Q3 and year-to-date results. As a reminder, the information in today's presentation includes adjusted results. These results exclude acquisition-related and other items. A reconciliation between adjusted results and reported results are included in today's earnings release. Our net revenue increased approximately 37% on a constant currency basis in Q3 and approximately 16% during the 9 months ended December 31. These results were driven by strengthening consumption across our core OTC and international portfolios, which drove strong organic growth, as Matt discussed earlier. Our revenue growth was impacted by foreign currency rates during the quarter, which reduced revenue growth by $1.1 million and 0.8 points during the quarter and $2 million and 0.5 point on a year-to-date basis. Currency fluctuations impact our Canadian and Australian businesses, and we expect our full year results to be impacted by approximately $3.5 million. We also anticipate that our organic growth for fiscal '16 may be impacted by $5 million or more based on current values. Our Q3 gross margin of 57.2% was the highest level in the past 5 quarters and was largely in line with expectations. Our long-term objective is to grow gross margins to 60% over time, as we realize Insight and other supply-chain savings over the next 12 to 24 months and expect to reinvest these gains in higher levels of A&P. A&P was 15.3% of revenue for Q3, which was above the year-to-date level of 14.2% and approximately 25% ahead of last year's spending. It was also in line with expectations. We anticipate increased levels of A&P investments going forward, as we move from planning to executing brand-building initiatives for Monistat and other Insight brands. G&A at 7% of revenue was lower than our expected level of approximately 8% of sales due to the higher sales levels and lower-than-expected spending. We expect Q4 to increase closer to the 8% level. Our adjusted EBITDA margins for both the third quarter and 9 months was 35%, as gains in gross margin and G&A leverage increased EBITDA margin over the prior year levels. Finally, our adjusted EPS continues to grow faster than revenue as a result of our operating leverage. Third quarter EPS growth was 60%, and EPS grew at approximately 20% for the 9 months ended December 31, which were both well above our revenue gains. Included in the year-to-date adjusted results were approximately $20 million of items related to our acquisitions. We anticipate additional costs in Q4, but expect to be below our original estimate of $25 million during the year. Slide 17 contains a reconciliation of reported net income to adjusted free cash flow. As a reminder, our earnings release contains a full set of disclosures about our non-GAAP financials. We experienced strong adjusted free cash flow growth of approximately 10% above last year in the third quarter and continued to -- which continued to strengthen our financial profile. We generated $45.5 million of adjusted free cash flow during the quarter and approximately $114 million for the 9 months ended December. Our cash flow generation comes from strong and consistent EBITDA levels, low fixed asset additions and a meaningful benefit from our deferred tax assets. As a result of our strong and consistent free cash flow generation, we're able to reduce our net debt by approximately $55 million during the quarter to $1.6 billion and reduced our leverage ratio to approximately 5.4x. As mentioned before, we expect to generate approximately $155 million of adjusted free cash flow for fiscal 2015. Turning to Page 18. We see the progress we've made to date in de-levering since the Insight acquisition back in September, along with our projections going forward. Prestige has a long history of rapidly de-levering after major acquisitions, and we expect this trend to continue. We expect to reduce leverage by approximately 0.5 turn to 5.1x by fiscal year end and forecast further reductions in leverage to approximately 4.4x by the end of fiscal '16. This leverage reduction will create over $1.5 billion of M&A capacity and will continue to support our M&A objectives. At this point, I'd like to turn the discussion back over to Matt. Matthew M. Mannelly: Thank you, Ron. And so maybe I -- I just have a few comments before we open it up for some questions that we typically talk about in terms of the outlook and kind of the road ahead. So if you turn to Page 20. I think, for us, what's important is we want to stay the strategic course to continue to create the shareholder value. And that means, quite simply, our strategies remain the same, it's our initiatives that change over time to deliver on those strategies. And the first strategy and the most important is brand building, which we've talked quite a bit about in this call, what's happened in the last quarter. We want to continue to invest and focus on core OTC and international to drive that consumption growth in those key categories and brands. We want to continue to deliver new product innovations on a consistent basis, and in fact, we have 5 planned in the fourth quarter for both domestic and international. We also have said that we're going to assess the appropriate pediatric strategies moving forward, post-cough/cold, as it relates to the rest of our portfolio. And as I think we've talked about over the last 12 to 24 months, we've said with the return of the competition, it will take probably 2 years for it to shake out. So we'll see at the end of this cough/cold season how the dust settles and what our appropriate strategies would be moving forward. And in addition, we want to make sure that we continue to innovate and evolve our marketing vehicles across the brands, recognizing the current retail environment. And that means whether it's our sports marketing vehicles, celebrity spokespersons, digital marketing or our merchandising programs, we want to continue, as I said, to innovate and evolve those marketing programs. From an Insight standpoint, as I said, the integration is largely complete at this point. And again, when we announced the acquisition, we said, given the health of the business, our goal was really, over the first 12 months, to stabilize that business, given the lack of support it had in recent years. And we want to stabilize it over the first 12 months. As you can see, we talked about today that we're really commencing our investment in Monistat, and we're doing things that set ourselves up for those initiatives in the first quarter that will roll those initiatives out for FY '16. And then the last thing is, as I hit upon, we're going to optimize the supply chain to capture the cost savings over the next 12 to 24 months. We have much work to do here, and we want to do the work and we want that supply chain to run in a way that's consistent with the way we run our supply chain here at the company. From an M&A standpoint, we've talked about this in the past. I think the most important thing that we've demonstrated over the last 5 years is we will remain aggressive, and we'll remain disciplined in our M&A activity. We're going to make sure that we appropriately capitalize and participate in the industry consolidation and the announcements that have been made over the last 6 months. We also -- I think one of the things -- the opportunities for us is, given our size of what we are today versus 2 to 3 years ago, it offers us the opportunity to explore creative deal structures and partnerships. So whether that's in different geographies, whether that's different types of opportunities like joint ventures, et cetera, but we have more options available to us today and approximately $800 million on a pro forma basis than we did 2 to 3 years ago, when we were much smaller. In terms of FY '15, the full year outlook. Again, given the third quarter results, we're very pleased. We expect strong revenue growth of approximately at the high end of 18% in a very challenging retail environment. We're quite pleased with the organic growth that we saw in Q3. We have expectations of slight organic growth in Q4. We've had a very solid cough/cold season-to-date this year, certainly significantly better than last year and slightly ahead of the 3-year average. And we are hopeful that, that will turn into repeat business in the fourth quarter. As I said, we have much work to do on the Insight portfolio in terms of implementing those demand initiatives and as well as getting the supply side up to speed in terms of what we're looking for. And I think the other thing I'd say is our -- given our strong consumption over the last 3 to 4 quarters, we're seeing that our revenue is catching up with that. That doesn't mean that the inventory -- retailer inventory pressure is off. We continue to see it on a slight basis, and it's something that we are cognizant of and need to maintain in terms of our planning moving forward. And then the final thing I'd say, which is really the first time we've talked about it, given the magnitude of it, Ron talked about the currency headwinds and what we've experienced to date, what we expect for the fourth quarter and the impact in terms of FY '15. So again, given the significance of what's going on in terms of currencies outside of the U.S., it's beginning to have an impact on a number of people's businesses. Like I said previously, the adjusted EPS growth for this year of 19% to 21% at $1.82 to $1.85, we feel very, very confident in. And we also feel very confident in our adjusted free cash flow and raising it to $155 million. And that free cash flow is really critical for our long-term strategy in terms of how we run the business. So with that, if you'll turn to Slide 21. I think the point I would make here is we -- this is a slide that, again, we've modified and we rolled this out last quarter. But I think it's important to note that we are executing against all 4 of these areas consistently. And all 4 of these pillars are critical to our success. I think today we spent more time on number one, given the environment and given the results. But you can rest assured that the other 3 we're spending a significant amount of time on as well. So with that, we appreciate your time, and I'll open it up to questions.

. [Operator Instructions] The first question is coming from the line of Joe Altobello from Raymond James. Joseph Nicholas Altobello - Raymond James & Associates, Inc., Research Division: Just a couple of questions. I guess, first on Insight. Now that it's fully integrated, how should we think about gross margin for fiscal '16? Would we expect some sort of step-up there now that you guys have that business fully integrated? Matthew M. Mannelly: Yes. I think, Joe, we would expect some. I think, as we've said in the past, our goal over the next few years is to move towards a 60% gross margin. As I said here, I think the cost savings for Insight will take 12 to 24 months, so that we would expect slight improvement in FY '16. Does that answer your question? Joseph Nicholas Altobello - Raymond James & Associates, Inc., Research Division: It does. And then secondly, in terms of Monistat and marketing that brand to OB/GYNs. When does that start? And what impact would that have on profitability? Matthew M. Mannelly: Well, I think it's built into our number. We've built that into the numbers. And if you recall, all the acquisitions that we've done, we've increased the spending on every acquisition versus what was done previously. So we anticipated that with this acquisition. That will start in Q1 of '16, and I think a healthcare professional program is a long-term play, not a short-term play. So we don't expect an immediate bump in revenue as a result of that. But we expect the groundwork we lay in '16 will have significant benefits in '17 and '18. And you can see the chart we put out there, what happened when they turned that off. And it's been off for 7 years now. So that's why I think you have to think about -- it's going to take a little bit of time to get that thing rolled out and back in play and get the health care professionals back on our side. Does that answer your question? Joseph Nicholas Altobello - Raymond James & Associates, Inc., Research Division: Yes, sort of, but does it have a big impact on fiscal '16 in terms of margins? That's all I'm asking. Matthew M. Mannelly: No. I don't think it's going to have a big impact on margins. No, Joe.

Our next question comes from the line of Frank Camma from Sidoti. Frank A. Camma - Sidoti & Company, Inc.: I had a couple of questions here. One, just on cold and cough. Could you give a little more detail on -- specifically on PediaCare and what you saw there? Matthew M. Mannelly: Well, I think, Frank, as we've said, this race has not been run in terms of a competitor being out of the marketplace. And the competition coming back -- came back last cough/cold season and this cough/cold season. And what we've said in previous calls is we've been impacted. I think PediaCare has been impacted by the returns to date more than we anticipated, and Little Remedies has been impacted less than we anticipated. And what we've said is, "Hey, let's see how cough/cold season plays out after 2 full seasons." And we still have a quarter to go on that. And then based on that, we'll determine how to best run both those brands. Frank A. Camma - Sidoti & Company, Inc.: Okay. And the other question relates to kind of -- so your overall organic growth was really strong, I think, what, 3% almost. But part of that was because one of your largest brands was up almost 16% with Clear Eyes. And going forward, you obviously have a pretty big opportunity with Monistat. But beyond that, what do you see as kind of your growth drivers? Because if your -- some of your growth is kind of skewed by those big brands, right? In the next 2 years, what do you see as the opportunities going forward? Is it just kind of pushing the whole portfolio? Or are there specific brands that make you more confident in kind of achieving organic growth in that 2% to 3% range? Matthew M. Mannelly: Yes. I think, like I said, Frank, if you go back to one of the first slides, 6 or 7, I think it was, it's the core OTC portfolio and the international now that we have confidence that we should -- as we grow that part of the portfolio, we believe that we're going to get stronger. And then the other slide that we showed was in the core OTC portfolio, 78% of the core OTC portfolio grew from a consumption growth standpoint this quarter. So it was very broad-based. It wasn't just 2 or 3 brands. And then the last thing I would say is, candidly, that's one of the beauties of our portfolio. When we've got some brands that are really strong, performing strong, and others candidly that haven't performed as strong, we still are able to net out a decent growth. So I think we look -- that's why our strategy's all about, right now, core OTC and international and investing in those brands to help drive our long-term growth. Frank A. Camma - Sidoti & Company, Inc.: True. And the final question, just on the A&P spend. Are you still seeing more promotional activity, which kind of shifts where you -- where that hits on your P&L? Or is that starting to mitigate? Matthew M. Mannelly: No. I think, that's still -- I'd say it's still in a steady state of what it's been the last few quarters, Frank. So I think Ron talked about this last quarter, that some of our A&P dollars are being used to fund merchandising above the line, and that's caused a little bit of a shift there. I'd say the last quarter, it was in a similar state.

Our next question comes from the line of Linda Bolton-Weiser from B. Riley. Linda Bolton-Weiser - B. Riley Caris, Research Division: So I was just looking at the Page 7 data on the consumption and the organic sales growth. And I'm just wondering if they're apples-to-apples. Like the consumption growth you're showing is for core OTC, but you're organic growth includes core and noncore. So what I'm trying to get at is, how did your shipments compare to the consumption like relative to retail inventory in the quarter. Like did you actually build up a little bit of retail inventory because it got so low? Or are you still working it down? Or like -- should we be worried at all about the go-forward that you've built up inventory? Or can you kind of explain, give some numbers, if you can, to compare more apples-to-apples the consumption and the organic sales growth you posted in the quarter? Matthew M. Mannelly: Okay. Ron, clarify for me. I believe that consumption growth, both these numbers, sorry, are for core OTC, correct? Ronald M. Lombardi: Right. Excluding Insight. Matthew M. Mannelly: So it doesn't include Insight. This is our apples-to-apples number, Linda. So this is -- both the consumption and the organic sales is for our core brands. And the legacy brands, that doesn't include Insight, so that we're apples-to-apples. So I believe it's apples-to-apples, first of all, all right? I believe, all right? And second of all, I think what we're saying is, I don't think we -- again, I said a couple of things. One, retailers remain cautious. And it's different retailers, it's not the same retailers every quarter or whatever. But retailers still remain cautious about inventory. But what we've been seeing in the last few quarters is our consumption has been outstripping our sales by so much, they can only take inventory down so much. And I think we saw the impact of that this quarter, where it was like, okay, they have to refill the pipeline somewhat. My personal belief is that we refill the pipeline, it wasn't that we have a bloated inventory at this point, if that's what you're asking. Does that answer your question, Linda? Linda Bolton-Weiser - B. Riley Caris, Research Division: Yes. It certainly does. And just a question on the gross margin. I guess it did improve sequentially, if I've got my numbers right, from 57.0% to 57.2%. But you had Insight in for the full quarter. And I thought Insight was really accretive to the gross margin, like to the tune of a couple of points. So I'm just wondering like what was the gross margin in the quarter excluding Insight. Like was it down year-over-year and down sequentially? It looks like it might have been, but I don't know. Ronald M. Lombardi: The gross margin for the legacy business is consistent during the quarter. The Insight gross margin, as Matt mentioned earlier, we expect to see a benefit of that over time, Linda, as we realize supply chain savings and make moves within the supplier base. So that's going to be long-term, long-term. Linda Bolton-Weiser - B. Riley Caris, Research Division: Okay. And then for the FX impact, thanks for giving that for the full year. I think you said $3.5 million for FY '15. What was it in the 9 months year-to-date? Ronald M. Lombardi: $2 million. Linda Bolton-Weiser - B. Riley Caris, Research Division: Okay. And then for that impact you gave for FY '16, can we think of it as roughly the impact on the top line is similar in terms of the impact on the bottom line? Or do you have some unusual transaction thing going on, where the bottom line impact is going to be way different on a percentage basis than the top line? Ronald M. Lombardi: Yes. The impact on the bottom line, Linda, is actually much less. So we've got 2 regions that are being impacted: Australia, which is translational. So as we convert the Australian-dollar financials to U.S. dollars, we end up with a very minimal impact on the bottom line; and Canada, which is transactional. So as we do business into Canada, that's more of a direct top and bottom-line correlation. But at the end of the day, the impact of the currency on the bottom line is much smaller than it is on the top line.

Our next question comes from the line of Jon Andersen from William Blair. Jon Andersen - William Blair & Company L.L.C., Research Division: Where to start? Let's see. The -- Matt, you mentioned after the -- you get through the current cough/cold season, you'll evaluate the -- what the appropriate strategy in pediatrics is going forward. Could you just elaborate on that? What your -- what those changes might be or if there are any significant strategic shifts that you anticipate? Matthew M. Mannelly: Well, I think, I'm really saying the same thing I've said for 24 months, Jon, and that is, we said it was going to take 2 cough/cold seasons for everything -- we thought, 2 cough/cold seasons for the competitive landscape to kind of play out. And I think once we get through that cough -- the second cough/cold season, we'll determine -- we've determined -- when the competition was away, we had an investment thesis. When the competition returned, we had an investment thesis for 24 months. And after the dust settles, we'll have an investment thesis moving forward by brand. That's really -- I'm saying the same thing I've said for the last 24 months. Jon Andersen - William Blair & Company L.L.C., Research Division: Okay. This quarter, you -- it looks like you shipped a bit ahead of consumption. And I know your shipments in the past handful of quarters have -- or prior quarters was trailing consumption. Do you expect that you ship ahead of consumption going forward? Is this just kind of rebalancing of inventories at retail that's going on that maybe got too thin? Or how do we think about that going forward, I guess? Matthew M. Mannelly: I don't. Well, I think, Jon, I think we have to look at it over the long-term, right? We can't call quarter-to-quarter, and it's never -- and I've said this for years. You can never match consumption and inventory in the short term. You should only match it in the long term, right? Because retailers react different ways. An example is cough/cold. Sometimes look at cough/cold shipments that will go in Q2. Sometimes, they go in Q3. It changes year-to-year. So I think that's really a long-term play. But our point all along has been the last few quarters, given that for several -- for a few quarters in a row, our consumption was outstripping our shipments 3 quarters in a row, you had to assume that the retailers were getting lean on inventory, so some of that rebalancing the curve. So I'm confident in that that's what happened. As I also said, that doesn't mean retailers are now back to the glory days of we're going load up the warehouses because I think, given the environment and foot traffic, that they're going to remain pretty tight. So I -- we said that we expect organic growth again, slight organic growth in the fourth quarter, and I expect it. So I think that's how we're looking at it, but I try not to look at it over 1 quarter or 2 quarters. We look at it over several quarters. Jon Andersen - William Blair & Company L.L.C., Research Division: Is it possible that slight organic growth is stronger in the fourth quarter, given this cough/cold dynamic you talked about, where the reorders might be stronger, given the flu incident this year? Matthew M. Mannelly: I think we don't know that yet, right? And that's -- candidly, that's the $64,000 question on cough/cold is -- we've had a solid cough/cold season to-date. But you never know in terms of post-January what the retailers are going to reorder. So that's why you can't call that yet. And so I don't think we know. I think we expect slight organic growth, and that's what we've said. And we'll see how cough/cold season plays out. Jon Andersen - William Blair & Company L.L.C., Research Division: Okay, fair enough. A question on -- so gross margin, if I understand it, you think gross margin or you see it going -- migrating towards 60% for the company overall over the next few years. Is that accurate? Matthew M. Mannelly: I think that's our long-term -- we've said that -- we've -- we are striving to get to a 60% gross margin. And I think Linda also pointed out that the acquisition was accretive from a gross margin standpoint, and Ron pointed out that those cost savings are going to come over the next 12 to 24 months. So therefore, that gross margin goal of 60% is probably a medium-term goal of 24 months would be my guess. Jon Andersen - William Blair & Company L.L.C., Research Division: Okay. Just kind of given that, the -- by our estimate -- and I may be off a little bit here, but this fiscal year, your operating margin could be in the 33% range, kind of a historic high. Would that 200, 250 basis points of gross margin improvement from here flow through the operating margin during this period as well? Or what are your expectations for reinvesting that or flowing through to higher operating margins? Matthew M. Mannelly: Yes, Jon. Good question. I think we've been very consistent on that as well. Our operating margin, unlike other companies, we have an exceptional operating margin, right? We don't need to get improvements to increase our bottom line operating margin. Rather, where we've said -- we've stated explicitly internally and externally, we're looking for gross margin improvement. We're trying to get to 60% over the long-term to reinvest in the business to ensure that we can maintain the operating margin that we have today. So we're not looking to expand that bottom line. We're looking to reinvest those dollars. Jon Andersen - William Blair & Company L.L.C., Research Division: Okay, that makes sense. I guess the last question I had, guys, is the -- why did the prior owner -- you may not know the answer to this. I guess, in the context of Monistat, the prior owner, why would they turn off the HCP support if that was something that's critical to the sales of that brand? I'm just trying to understand a little bit of context there. And then as you kind of turn that back on, does that have a short-term profit implication? Because as you said earlier, I think it's a long-term play. So there are probably some investments that are required up front with the payoff down the road. Matthew M. Mannelly: Yes. I think -- I can't answer for the previous owners, not last owners, but the last couple of owners. I can't answer for them. Everyone's got to prioritize for their businesses across their portfolio where they want to invest, right? And so I can't answer for them. I think, for us, as I said, it's a long-term play. It is an investment in the short term. I don't think it's so significant that it has huge profit implications, but make no mistake, we're going to be investing in the next 12 to 24 months in that business to get it back up on its feet and in the leadership position that we think it deserves. Ronald M. Lombardi: [indiscernible] better than we are out here.

Our next question comes from the line of Kevin Zeitz [ph] from Citi.

My first question is on the Monistat investment. I'm wondering if the -- how the new campaign that you're targeting is going to address the convenience factor of taking a pill? Matthew M. Mannelly: Well, I think that's through educational materials to doctors. And it's not just the convenience factors, there's other factors that go into it as well in terms of -- it may be convenient to take a pill, but also treating the problem locally is also a high priority for consumers. And less side effects is a high priority for consumers. So those are the kind of things that we get across in terms of the education materials that we'll be providing to the health care professionals.

Okay. And then in terms of the supply chain move, are you -- I guess, in the past, when you've moved from sort of existing, call it, acquired suppliers to your own suppliers, how fast can you make that transition? Or how fast have you done it in the past? Matthew M. Mannelly: I think in this industry, Kevin, that takes time. This is a heavily regulated industry, and that's not something that's done in 3 to 6 months. That's something that takes 12 to 18 months. That's why we're saying those cost savings will take 12 to 24 months.

That makes sense. And then you mentioned Clear Eyes was having success in the C-Store channel. I think, in the past, you've called out the same channel for the BC and Goody's business. So I'm curious, I guess, 2 things. One is, how much of the organic sales growth this quarter was sort of pipeline fill in that channel? And then more broadly, are there -- where do you see other opportunities to bring your portfolio into that channel? Matthew M. Mannelly: Well, I think -- I don't know. I mean, I think we've got some distribution. I don't think it was disproportionate, but we had some distribution gains in C-stores. But I think, for us, we've really tried to focus our efforts on the brands that make sense in C-Stores. So BC, Goody's, Dramamine, Clear Eyes and Luden's cough drops some of the brands that we really are focusing in the C-Store segment.

Okay. And your placement of those is, you think, optimal at this point? Or... Matthew M. Mannelly: No. I think we believe there's still upside there. I think what's happened is -- I think a turning point for us was, with the acquisition of the GSK North America brands and BC and Goody's being such a powerhouse in convenience stores in the Southeast, that has helped to leverage those other brands in the portfolio. So as we buy more brands that are C-Store relevant, we become -- we get more leverage in that channel. So that grows over time. Now the other thing I should tell you is the convenience store channel is a very slow build over time. It doesn't happen overnight because I think there are 155,000 C-Stores that are supplied through mostly distributors, and it takes quite some time to work through the system. But we believe there's still upside, yes.

That's really helpful. And if I can ask another. On the page where you talked about your acquisition capacity, can you say -- I saw in the footnotes there's sort of a 5.75 leverage assumption that's baked in there. Is that as high as you would want to go with an acquisition? Or are we taking it on a case-by-case basis, possibly higher? Ronald M. Lombardi: Yes, Kevin, we would address our peak leverage really on a case-by-case basis, depending on the profile and the attributes of the opportunity. So there really is no one answer to what will we take our leverage to. It depends on the particular situation.

Okay. And I don't know if you can answer this, but is your -- do you think you'd want to build a certain amount of capacity before you go -- start going after acquisitions? Or is it something that you feel like you could do in the -- more in the near term? Matthew M. Mannelly: The answer to that is no. We -- the most important thing for us in acquisitions is -- the financing part of it, we can address. It's the organization being ready to execute against it. So we -- we're integrated. We're ready to execute. So at that point, it's when the opportunities arise, and the financing part we believe we can address. So no, we don't need to build capacity for that.

That's helpful. And then just one last question on the currency. Is the majority or the vast majority of the currency exposure translation? Or are there transaction exposures as well? Ronald M. Lombardi: It's almost equally split between translational and transactional.

I would now like to turn the call over to Mr. Mannelly for closing remarks. Matthew M. Mannelly: Okay. Again, thank you very much. We appreciate everyone's time. As I said, we're quite pleased with the results this quarter, obviously. And we look forward to continue to execute against the 4 pillars that I talked about at the very end, and we look forward to speaking to everyone in the next quarter. Thank you very much and have a good day.

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