Welcome to the Q1 2016 Prestige Brands Holdings Inc. Earnings Conference Call. [Operator Instructions]. I would now like to turn the conference over to your host for today, 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 and presentation. I'm 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 ccompany 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 is filed with the U.S. Securities and Exchange Commission. As an additional reminder, some of the information contained in this presentation includes adjusted results which excludes acquisition related and other items. A reconciliation between adjusted results and reported results is included in today's earnings release along with a full set of disclosures about our non-GAAP financials. Now, I would like to introduce Ron Lombardi, our CEO.

Thanks, Dean and good morning, everyone and thank you for joining our Q1 earnings call. Today's agenda and presentation will be consistent with previous quarters and I'll cover our financial results, an update on our brand building initiatives and close with an update on our outlook for the remainder of the year. With that, let's turn to page 5 and get started. We're very pleased with our results for the quarter with strong performance across a number of fronts including the continuation of strong consumption across our core OTC brands and our recent acquisition. Sales were largely in line with expectations and came in at just over $192 million for the quarter. We saw very strong organic growth of 3.7% excluding the impact of FX and plus 1.8% including the headwinds from FX during the quarter. We continue to see the benefits from our long-term brand building focus and A&P investments with core OTC consumption growth of a very strong 6.5% during the quarter. Our gross margin came in at a record level of 58.4% for the quarter and was up over 2 points from last year. And finally here, adjusted EPS came in at $0.52 for the quarter. We also saw continued strong cash flow performance in the quarter with approximately $42 million of free cash flow for the quarter which resulted in a leverage ratio of about 5.1 times and we continued to build M&A capacity during the quarter. In terms of our full-year outlook, we believe we're on track to deliver a full-year outlook of --our full-year outlook and anticipate a strong financial result for the quarter. We will discuss all of these results in more detail. With that, if you turn to slide 6 we will start with our consumption chart. Slide 6 shows our last…

[Operator Instructions]. Your first question comes from the line of Joe Altobello from Raymond James. Please proceed.

The first question I wanted to go to the core-OTC consumption growth you guys saw this quarter. Obviously another strong quarter. How much of that is coming from an acceleration in category growth? Are you seeing an acceleration in your category growth? Or is almost all of that coming from continued share gains?

The consumption increases are really coming from share gains for us for the categories that we compete in again which are very broad. We believe we're continuing to take share and grow outside of the category growth.

Okay. So no meaningful improvement in category trends the last couple of quarters here?

Right. For us. That's correct.

And then going back to your commentary regarding the retail environment. It sounded like you are still a little bit cautious this quarter. I think last quarter you had expressed some optimism about the retail environment. Are things getting better or have they kind of plateaued here as we enter the fiscal 2Q?

I think our anticipation is that things in the retail environment will continue to improve slowly. We continue to see the retailers focus on their bottom lines which can impact our business. We're continuing to see some continued reductions in inventory during the environment as well. So that's kind of our outlook.

Okay. Just one last one on Monistat. Obviously, you saw a very nice acceleration in growth for that brand. Have you started seeing impacts from the new TV ads and the fact that you are now marketing to healthcare professionals or is that still to come?

That is really still to come, Joe. We really just kicked that off in July at this point.

Your next question comes from Frank Camma from Sidoti. Please proceed.

Could you talk a little bit about PediaCare and what you're seeing, what you are expecting there? Obviously, your core brands overall were up pretty strongly so just wondering if you could talk about the cough and cold segment?

Sure. For PediaCare, if you go back to the fourth quarter, we talked about how we're going to focus our pediatric efforts around the Little Remedy brand and its point of difference and feel that, that brand is very well positioned for long-term growth. And we deemphasized PediaCare. It's no longer in the core-OTC portfolio although we do have initiatives for it with some new products, some new marketing and some targeted programs aimed at the Hispanic market. We do have some initiatives underway for that brand. But as we said, we're going to be focusing on Little Remedies for the pediatric segment.

Okay. And last year, just remind me, it was for you as well as everyone. It was a relatively strong cold-cough period. So is that going to be a headwind?

Last year, the cough-cold incident level, Frank, was back in line with the historic normal levels. For us, FY '13 was at a low level of incidents if you recall. I think down 12% to 15%. It's tough to predict what this year will hold. But last year, was again back at more of a normalized level.

Okay. Just a final question on the timing of FX because of the market sharing. Is it mostly a Q3 issue or can you just add some color to that? I know it depends on the year-to-year comp. So if you could just give us some timing sense of that?

Sure. We're going to see bigger FX impact in the first half of the year as compared to the second half at least based on the current rates.

[Operator Instructions]. Your next question comes from Linda Bolton Weisler from B. Riley.

Perrigo said the other day on their earnings call that actually they thought the extension of the cough-cold flu season just being a little bit longer in the U.S. this year benefited their quarter a little bit. Would you say the same thing was true of your quarter?

We saw a good performance in our Luden's, Chloraseptic and mixed brands during the quarter-ended June. There was some kind of virus going around that was causing sore throats and coughs. So we realized some of that as well.

Okay. I know there's some seasonality to your A&P spending ratio. It kind of goes up and down based on the seasons of the cough cold and all that. Can you just remind us what that seasonality is like and do you expect the same pattern this year? Or is it like a consistent year-over-year increase in A&P each quarter? Is that the pattern you expect for the year?

A&P spending quarter to quarter can vary based on the initiatives, the timing of new products and some other factors. What we've said for the whole year is we anticipate full-year A&P to be above last year. The first quarter was up quite a bit as a percent of sales. I think over half a percentage point in terms of spending. So we may get some variability quarter to quarter but the full year we anticipate to be above last year, both as a percent of sales and certainly on a dollar basis.

And then, finally, just a question on the M&A environment. As you've seen, Perrigo is involved in all kinds of M&A things including a hostile takeover attempt on itself. But it continues to be very acquisitive and one of the things that recently bought was a portfolio of branded OTC in Europe from GSK. They just bought the brands because they already had the infrastructure. But you, of course, will need infrastructure to get into Europe. Am I thinking that correctly or is there some way that you could somehow just buy brands? It seems to me that you need to have an infrastructure as well to enter into Europe. Can you comment on that?

Sure. What we've said Linda over time, is that our M&A priority starts with North America and then it's followed by Australia where we have scaled businesses in both of those regions that we can add to. We've also said in the past that Europe would be a distant third in terms of areas that we would look into is the first part of my response. The second is, there's more than one business model in terms of being able to enter a market. We already do have a presence in Europe with Murine and Chloraseptic in the UK as well as those brands being distributed in other markets. There's more than one way to enter a market. Again, in terms of priority, North America and Australia are where we would start

Do you use distributors there in the UK?

We do, yes.

That was our last question. I would now like to turn it over to Ron Lombardi for closing remarks.

Okay. Thanks everyone for joining us today and thanks for the call. Take care.