Prestige Consumer Healthcare Inc. (PBH) Q1 2027 Earnings Report, Transcript and Summary

Good day, and thank you for standing by. Welcome to the Quarter 1 2027 Prestige Consumer Healthcare, Inc. Earnings Conference Call. [Operator Instructions] Please be advised that today's conference call is being recorded. I would now like to hand the conference call over to your first speaker today, Phil Terpolilli, Vice President, Investor Relations and Treasury Business Development. Please go ahead.

Thanks, operator, and thank you to everyone who's joined today. On the call with me are Ron Lombardi, our Chairman, President and CEO; and Chris Sacco, our CFO and COO. On today's call, we'll review our first quarter fiscal 2027 results, discuss our increased full year outlook and then take questions from analysts. A slide presentation accompanies today's call. It can be accessed by visiting prestigeconsumerhealthcare.com, clicking on the Investors link and then on today's webcast and presentation. Remember, some of the information contained in the presentation today includes non-GAAP financial measures. Reconciliations to the nearest GAAP financial measures are included in our earnings release and slide presentation. In today's call, management will make forward-looking statements around risks and uncertainties, which are detailed in a complete safe harbor disclosure on Page 2 of the slide presentation that accompanies the call. These are important to review and contemplate. Business environment uncertainty remains heightened due to supply chain constraints, high inflation and geopolitical events, which have numerous potential impacts. This means results could change at any time, and the forecasted impact of risk considerations is the best estimate based on the information available as of today's date. Further information concerning risk factors and cautionary statements are available in our most recent SEC filings and our most recent company 10-Q that was released this morning. I'll now hand it over to our CEO, Ron Lombardi. Ron?

Thanks, Phil, and thanks to everyone for joining us on a busy earnings day. While we are just at the start of our fiscal year, we have a lot to discuss today. Since our call in May, we've completed 2 acquisitions that are now positioned for long-term success, and we'll walk through both of them shortly. Our business exceeded sales and earnings expectations in the first quarter, a testament to our long-term brand building strategy and the strength of our diversified portfolio. We also delivered record adjusted free cash flow, providing additional flexibility for disciplined capital allocation moving forward. With that, let's begin with our first quarter highlights on Slide 4. Sales of approximately $266 million increased 6.5%, reflecting broad-based strength across the portfolio. Growth was led by GI, where Dramamine and Fleet continued to deliver long-term consumption gains as well as strong performance in skin care led by Compound W. TheraTears and Debrox also posted solid growth, helping offset Clear Eyes sales that were below our expectations. Results also benefited from retailer order timing, which Chris will discuss in more detail. The quarter also included approximately $6 million of revenue from the Breathe Right portfolio acquisition. Our strong top line performance translated into solid earnings and free cash flow. Gross margin was largely in line with expectations and adjusted EPS increased to $0.98. Adjusted free cash flow reached a quarterly record of $83.7 million, further supporting our ability to deploy capital in ways that enhance shareholder value. One of these deployment priorities is M&A. And since our May call, we've completed 2 acquisitions. The Breathe Right portfolio closed on June 12 and the acquisition of LaCorium in Australia closed on July 1. I'll discuss our integration progress and the strategic value each brings to Prestige. Our strong cash flow generation is also enabling us to invest in Pillar5, our sterile ophthalmic manufacturing facility, which will help support additional long-term eye care capacity. Now let's turn to Slide 5 and review the key principles supporting our expected long-term recovery of Clear Eyes. At a high level, we remain focused on the actions we believe will best support Clear Eyes and return the brand to its leadership position within the eye care category. There are 3 key elements to this strategy. First, we continue to invest in our recently acquired Pillar5 facility. These investments are designed to strengthen long-term supply capabilities while maintaining the high-quality standards we expect across our portfolio. Second, a key objective for the facility is to support demand while improving supply consistency versus current levels. As we discussed in May, achieving that objective requires actions during fiscal '27 that will continue to create some output variability in the first half of the year as we experienced in Q1 and expect again in Q2. Looking ahead, we believe the facility is positioned for greater stability in the second half, supporting sequential improvements in eye care shipments. Third, as the historical unit share leader in eye care, Clear Eyes has unique volume requirements where we believe in-house manufacturing provides an important strategic advantage. As a result, we expect to further expand capacity at Pillar5 to fully support these long-term demand requirements and return Clear Eyes to its leading market position. Now let's turn to Slide 7 and review our recent acquisitions. We are pleased to have closed both the Breathe Right portfolio and LaCorium Health acquisitions. Each transaction brings distinct strength that we believe will enhance our business over the long term. Starting with Breathe Right, the portfolio is expected to generate approximately $200 million in annual revenue. The majority comes from the flagship Breathe Right brand, where we see multiple opportunities for long-term growth that I'll discuss in a moment. The business also brings a strong financial profile with growth and EBITDA margins that are accretive to Prestige. In addition, it supports our long-term sales and earnings growth algorithm while generating tax benefits that enhance future free cash flow. Less than 60 days after closing, we have successfully completed all major integration milestones. As of this week, the business is largely integrated into our operations, running through our systems and our warehouse network with retailers ordering Breathe Right along with our existing brands. Turning to LaCorium Health. The business is expected to contribute approximately $40 million in annualized revenue with the majority generated in Australia. Its dermal therapy brand holds a leading position in therapeutic skin care categories, including eczema and cold soar treatments. We believe the brand is well positioned for continued growth and will support the organic growth objectives of our International segment. In July, we welcomed LaCorium's employees into our Care Pharma office, making for a seamless transition given they were already located in the same building outside Sydney, Australia. The broader integration effort will proceed methodically over the balance of the year. Over time, we also expect to realize additional synergies through distributor optimization, sales integration and other operating efficiencies that should further enhance profitability. In summary, we've added 2 highly strategic businesses to our portfolio. The Breathe Right integration is largely complete, while LaCorium will continue to be integrated over the coming quarters. In both cases, our focus is on establishing a strong foundation for long-term growth and value creation. Now let's turn to Slide 8 and discuss how these acquisitions further strengthen our portfolio. One of Prestige's core strengths is the diversity of our portfolio. The diversity helps reduce reliance on any single brand or category while allowing us to allocate resources towards the most attractive growth opportunities and to consistently execute against our long-term growth algorithm. As shown on the right side of the slide, these acquisitions further enhance that diversification. On a pro forma basis, our portfolio is now even more balanced across 8 categories. With the addition of Breathe Right, we've created a new wellness, sleep and other category, which is primarily comprised of Breathe Right and represents a low teens percentage of pro forma revenue. LaCorium's dermal Therapy brand further strengthens our skin care category, and we've also updated several category names to better reflect the consumer need states they address. Now let's turn to Slide 9 and discuss the growth opportunities we see for Breathe Right. With roots dating back to the 1990s, Breathe Right is an iconic category-defining brand with consumer awareness exceeding 90%. Given that strong foundation, we see several drivers of long-term growth. First, the brand has meaningful opportunities to further leverage its heritage and consumer recognition. As shown on the left side of the slide, Breathe Right has successfully done this through campaigns such as Strip On. Looking ahead, we believe social media marketing initiatives can further strengthen brand engagement and drive household penetration. Second is innovation, shown in the center of the slide. At Prestige, we rely on consumer insights to identify opportunities that can meet evolving consumer needs while expanding categories. We expect Breathe Right to be no exception. Recent launches demonstrate this potential. Breathe Right Menthol introduced in 2025 combines improved breathing with the added benefit of an aromatic scent. Breathe Right Sport, which is launching now, expands the brand into the sports category with a sweat-resistant strip designed to help improve airflow during exercise. Finally, international expansion remains an attractive opportunity. Breathe Right is sold in more than 20 countries with a strong presence in Western Europe, Australia and Japan. We see opportunities to drive growth through the same marketing and innovation initiatives I just described, while also benefiting from geographic expansion and long-term synergies across our global portfolio. In summary, Breathe Right is a category leader with an iconic brand, a strong foundation and multiple avenues for sustained long-term growth. We look forward to updating you on our progress in the quarters ahead. With that, I'll turn the call over to Chris to review our financials.

Thanks, Ron. Good morning, everyone. Let's turn to Slide 11 and review our first quarter fiscal '27 financial results. As a reminder, the information in today's presentation includes certain non-GAAP information that is reconciled to the closest GAAP measure in our earnings release. Q1 revenue of $265.7 million grew 6.5% from $249.5 million in the prior year and 3.2% excluding the effects of foreign currency and the acquisition of the Breathe Right portfolio. Adjusted EBITDA grew 5.5% versus the prior year, mostly tracking the sales growth. Adjusted diluted EPS increased approximately 3% versus the prior year as the revenue increase was partially offset by higher interest expense from the acquisition. Let's turn to Slide 12 for details around these consolidated results. As I just highlighted, our Q1 fiscal '27 revenues increased 3.2% organically versus the prior year. By segment, North America segment revenues increased 4.2%, excluding FX and the Breathe Right acquisition. As Ron highlighted, the biggest category increases were in GI, highlighted by continued strength in fleet and Dramamine and dermatologicals, thanks to strong growth in Compound W. In Ear and Eye Care, as we anticipated, Clear Eyes supply continued to be volatile and was constrained in Q1, leading to a decline in brand revenue. But this was more than offset by strength in the TheraTears and Debrox brands, which highlights the benefits of our portfolio diversity even within individual product categories. We also continue to experience strong double-digit consumption growth in e-commerce. Q1 benefited from some continued order volatility in e-commerce at the expense of Q2, and this is reflected in the Q2 sales outlook Ron will discuss later. International segment revenues decreased 2.1% versus the prior year on an organic basis. As we expected in our outlook, we continue to see positive consumption trends, but sales were affected by the timing of distributor orders. For the full year, we still expect a return to the segment organic revenue long-term growth target of 5% or more. Revenues from the Breathe Right portfolio acquisition totaled $5.9 million. Total company adjusted gross margin of approximately 55% in the first quarter was largely as anticipated, flat sequentially, but down 120 basis points versus the prior year, primarily due to higher transportation costs and mix. Following the inclusion of acquisitions, we now anticipate adjusted gross margin of just over 57% for both Q2 and the full year. Advertising and marketing came in at $34.7 million or 13% of sales in Q1, down versus the prior year due to the timing of marketing programs. For fiscal '27 as well as Q2, we now anticipate an A&M rate of approximately 14.5% of sales. Adjusted G&A expenses were 11.5% of sales in Q1. For the full year, we now anticipate adjusted G&A of approximately 10% as a percent of sales, thanks to the scale associated with additional acquisition revenue. Adjusted diluted EPS of $0.98 increased versus last year's diluted EPS of $0.95. Ron will discuss our earnings outlook shortly, and we've detailed the assumed components in other line items at the end of the slide presentation. These include higher interest and amortization expenses in the balance of the year of approximately $100 million and $33 million, respectively, as well as a similar tax rate and share count to prior assumptions. Let's turn to Slide 13 and discuss cash flow and capital allocation. In Q1, we generated $83.7 million in adjusted free cash flow, largely driven by the timing of working capital. We continue to maintain industry-leading free cash flow and now expect to generate at least $270 million of adjusted free cash flow in fiscal '27 due to the inclusion of the new acquisitions. At June 30, our net debt was approximately $2 billion. We purchased the Breathe Right portfolio on June 12, funded with a new 7-year Term Loan B. When combined with cash on hand, the new term loan also funded the LaCorium Health transaction, which closed on July 1 after quarter end. While executing these market actions, we also took the opportunity to price $400 million of new unsecured notes, replacing existing notes that were coming due. This funded on July 15. Following these actions, our earliest debt maturity is now 2031, and we have reestablished prepayable debt, which we intend to begin paying down over the balance of the fiscal year. With that, I'll turn it back to Ron.

Thanks, Chris. Let's turn to Slide 14 and wrap things up. We are encouraged by our first quarter results and remain confident in the outlook we previously provided for our legacy business. The updated guidance shown on this page reflects the addition of the Breathe Right portfolio and LaCorium acquisitions, along with the related financing impacts Chris just discussed. For fiscal '27, we now expect revenues of $1.29 billion to $1.315 billion, while maintaining our expectation for organic revenue growth of 1% to 3%, unchanged from our prior outlook. The increase in reported revenue versus our previous guidance is entirely driven by the Breathe Right and LaCorium acquisitions, which we expect will contribute approximately $190 million of revenue this year. For the second quarter, we expect revenue of $328 million to $331 million, including the contribution from both acquisitions. Given retailer order timing that benefited the first quarter, we would expect a modest organic revenue decline in the second quarter. However, we continue to expect organic revenue growth for the first half of the fiscal year. For adjusted diluted EPS, we now anticipate $4.55 to $4.65 for the full year. The increase versus our prior outlook is entirely attributable to the acquisitions, which bring attractive financial profiles, including strong gross margins and lower G&A as a percentage of sales. For our second quarter, we expect adjusted diluted EPS of approximately $1.06 to $1.08. Lastly, we expect adjusted free cash flow of $270 million or more and a year-end leverage ratio of just below 4x. We will remain disciplined in reducing debt throughout fiscal '27, which will further strengthen our balance sheet and provide additional flexibility for future capital deployment opportunities that can maximize shareholder value. So in summary, we're off to a solid start to the year. We delivered strong first quarter results, remain confident in the outlook for our legacy business and are excited about the opportunities ahead with Breathe Right and LaCorium. Together, these acquisitions are expected to add more than 20% to our annualized revenue base while providing additional scale, diversification and long-term value creation opportunities for Prestige. With that, I'll open it up for questions. Operator?

[Operator Instructions] Our first question comes from Susan Anderson with Canaccord Genuity.

Nice job on the quarter. I guess maybe just if you could just give us an update on the long-term growth of the 2 acquisitions. Are you still expecting 10% total growth with contribution, obviously, from those 2 over the next several years? And then also, I don't think I saw it, how much are the 2 acquisitions adding to earnings also for the year with the updated outlook?

Susan, Ron here. So let me start with the long-term outlook for the 2 acquisitions. So we're about 60 days or so, just under for the Breathe Right portfolio and 30 days or so for LaCorium. And so far, we continue to be very optimistic about the opportunity for the brands and the businesses. As we get into them, we continue to see all the opportunities that we believe were there during the diligence and continue to point you to the outlook that we gave back in May for the long-term outlook for the business. So we're in early days here, but to continue to feel really good about the opportunities. Chris will talk about...

Yes, Susan, it's Chris. So the acquisitions, obviously, higher sales growth projected for the year. It's about 3 points of EPS growth. The range that we provided on the sales line is in line, combined with the stub period in Q1 with what we'd expect and the long-term numbers that Ron just shared. EPS is a bit of timing. It's the timing of the stub period, right, some committed A&M from the sellers prior to our ownership, the impact of the debt paydown in the future, right, and how that will compound over time and then just the timing of sales in the near term. So a little bit of near-term noise. It's temporary, but we still feel good as we did when we made these acquisitions that will drive sales and profitability for each of the brands as we reduce debt. And so as Ron says, you put that together, you get back to the long-term algo we presented back in May for the 3-year CAGR.

Okay. Great. And then maybe if you could -- I don't know if I heard you mention the Women's Health business. Just curious how that performed in the quarter with Monistat and Summer's Eve. And then are you expecting any new launches there for the rest of the year?

So our Women's Health care businesses continue to make progress. Monistat continues to be fairly steady, continues to have steady or growing share. As we talked about on past calls, the category there has seen some decline over the last few years. For Summer's Eve, we continue to look at long-term new product opportunities and launches. The ultimate odor protection franchise continues to do really well, and we'll have additional products launched over the next couple of years as well.

Our next question comes from Rupesh Parikh with Oppenheimer Company.

So just going back to the acquisitions, just from an accretion perspective, I know obviously, timing may be slightly different. But as you look at the acquisitions, like is the accretion still in the same ballpark of what you guys thought before for Breathe Right? And I think LaCorium, there was not much assumed initially.

That's right, Rupesh. You're correct on the Corium. For Breathe Right, we talked about an annualized rate of about $0.25 of accretion, right? And in a normal environment, I would say we absolutely still support that. You'll be a couple of pennies as you look at the stub period below that. But again, we expect some variability during the first couple of quarters. Haven't really done an acquisition where we didn't see some initial volatility, particularly as we undo some things maybe the sellers had put in place before the closing process. I mentioned sales timing, and I mentioned A&M a bit ago and then just the timing of how quickly we'll pay down debt, which we'll be prioritizing this year.

Okay. Great. And then on the gross margin outlook, so 57% obviously very strong. I think there's benefits from the M&A as well. Just curious, in the environment right now, what type of cost pressures are you guys seeing in the business? And then with these acquisitions, like do you expect an improvement in gross margins as we go into next year? Just overall thinking of longer-term opportunities on the margin front with the new M&A.

Yes. So Rupesh, on the gross margin revised guide up, it's entirely based on the acquisitions. We're holding our base guide for gross margin. It's been in line with our expectations, primarily -- the increase is primarily year-over-year related to diesel, and we factored that in. So no change to the base. Over time, we, of course, always look to increase our gross margin. But remember, it will be no different for the acquisitions that we're managing to a low to mid-30s EBITDA margin. So to the extent we get cost saving, we have cost-saving programs in place, we'll look to put that back into the business and higher levels of A&M over time.

Great. And maybe one last question for Ron. Commentary was positive just on consumption during the quarter. Consumer environment is still uncertain. So have you guys seen any changes out there? Just curious just overall, what you're seeing in the consumer environment, Ron.

Yes. So in our categories, we continue to see fairly stable consumption. As I mentioned in the prepared remarks, we continue to see strong growth in the GI brands, Dramamine and Fleet. Skin, we're doing well in. And again, as we've talked about for about a year now, the big thing we're seeing is that consumers are looking for value and it's impacting where they shop. So we continue to see channel shifts. We had another particularly strong growth in dot-com in mass again this quarter. So we continue to see strong growth in those value channels or where price shopping is easy.

Our next question comes from Jon Anderson with William Blair.

Could you quantify the order timing benefit in the first quarter, and I guess that will reverse out in the second quarter?

Yes, Jon, it was just about 2 points of growth for the quarter. And again, that's why we're trying to focus folks back to the first half where we still expect organic growth in total.

So first half underlying growth kind of on plan. It's just a bit of a shift from quarter-to-quarter.

That's correct.

Okay. Great. And then could you give us a little bit more of an update on, I guess, Clear Eyes and maybe where it sits today relative to its kind of prior peak run rate and how kind of some of the operational initiatives of Pillar5 are progressing? And what kind of ramp to kind of think about there as you think about getting Clear Eyes back to its leadership position over the next, I don't know, a couple of years?

Yes. So let me start there, Jon. So I mean, clearly, the Clear Eyes franchise is down significantly from its peak levels a few years ago, right, again, driven by product availability. We're 2 quarters in, right? At the end of June, we had owned Pillar5 for just 2 quarters. And we've got a multifaceted program in place to stabilize the facility and better position it for long-term product availability to support the brand. We've made a number of changes over the last 6 months starting with investment to better position the infrastructure, some investment in the equipment. We've also made significant changes in the management and leadership change in the team there. And clearly, that's something we're not going to talk about ahead of time. So last quarter, we weren't going to talk about management team changes publicly ahead of getting them in place. But we've transitioned out a significant amount of consultants that the previous owners had in place. We've made changes in management and recently appointed a new General Manager for the facility who's a long-term employee that we feel really good about. So it's not just one thing. It's a whole bunch of initiatives that we continue to get behind us. And I think as we said today, we expect to see improving levels of output for the second half of the year. as we continue to focus on getting the initiatives behind us.

And Jon, it's Phil. I think you asked about kind of where Clear Eyes sits today versus the high watermark. As we talked about last quarter, because of the supply challenges we've seen, it represents less than 3% of sales today. But certainly, we expect to improve that based on the demand that we know is out there and the production changes that Ron is talking about. So a lot of runway ahead, and we think it's an opportunity.

And that 3% is with the acquisition revenue?

Yes.

Okay. Do you have anything on kind of as you rebuild capacity or improve output, there are other steps, obviously, that probably need to be taken to get back to that leadership position, working with retailers, reestablishing shelf space, activating the consumer again. In your experience, how long does that aspect of this tend to take?

So we've talked about it being multiyear Jon, and that plan really is unchanged. There's kind of 4 pieces to it. First is to develop consistent and high-quality supply. The second would be to start to rebuild safety stocks for ourselves and at retailers so that as we have variability in the future from supply, we won't see a hiccup in sales or out of stock. Third would be to get back to our full SKU offering. Right now, if you get out to the shelf, you'll see that we focused on Base Red and Max Red. And then fourth would be to get back to investing in marketing and advertising campaigns to get back to connect the brand with consumers who have been out there looking for it. So a number of steps that we'll be thoughtful about executing over the next couple of years.

Great. Just one more, if I could. You've done 2 kind of acquisitions here in close proximity. Are you confident that you can kind of integrate both of these and kind of hit the ground running? I just sometimes think about integration risk, the bandwidth of the team to kind of manage and brand build and kind of go after some of the opportunities around both at the same time.

Yes. As we said in the prepared remarks today, the Breathe Right portfolio, that business is essentially integrated into Prestige. So just this Monday, we flipped the switch and the whole business is in our system. So purchase orders to the supply base to receiving product to orders from our customers and making shipments to the retailers is happening, right? The marketing folks that we took on from the seller are here with our marketing team. We've got salespeople that we've taken on that are out in the field working with the customer. So Breathe Right is integrated, and we're into continuing to focus on growth plans. for that business. For LaCorium, we've made sure we've given ourselves enough of a runway so that we're not competing for resources internally as we were dealing with a bigger Breathe Right. So we've got a bit of a longer runway that will work on the integration of that business over the rest of the fiscal year. But again, we've emphasized this a number of times. We have the huge advantage of LaCorium being in the same office building that care is, literally just a couple of floors up and those people have moved down to the care floor. So the organization is integrated, and we're making progress on that. So this is something that Prestige actually does very well. And our integration planning begins during diligence. So it's not just what are you getting, but how are you going to integrate it so you hit the ground running to use your words. So Breathe Right is in a great place, and we're continuing to move forward on Lord.

[Operator Instructions] Our next question comes from second, Keith Devas with Jefferies.

Maybe just going back higher level to the retailer inventories. I'm curious where you guys think there are now. We've heard from some peers that there's been some volatility or choppiness in the quarter, but maybe higher level also just how you're thinking about adjusting your operations and spend to account for this ongoing volatility or choppiness.

Yes. So in terms of retailer inventory levels for our categories, we haven't seen kind of the builds and the destock that you're hearing others talk about in other categories. So that hasn't been the driver in some of the order pattern volatility that we've seen. We talked a little bit about it in Q4, and we talked about it in Q1. That just seems to be planning and resource driven by really one main customer. But again, we're able to deal with whatever the flow is and the peaks and valleys of that. But consumption is good. Inventory levels are stable, and we're just managing around the timing impact of that from quarter-to-quarter.

Okay. Great. And then I think you commented one of the acquisitions is pretty much integrated and another will soon be. But you also mentioned some synergies that are coming down the road. Maybe if you could just give us some context on what those synergies are, where they're coming from, how we should think about them? And maybe it's a longer-term question, but just kind of how you see that materializing over time.

Yes. It's more of a year to 2 runway for the synergies that we've talked about associated with LaCorium. There's opportunities and benefits to synergize the sales forces between the 2 organizations. We think we can adopt some resources from both of the businesses to be in a better place. We think there'll be some marketing opportunities for some synergies that will give us some pools to reinvest and then the supply chain as well. So no one big area like we've seen in other acquisitions that we've primarily done in the U.S. where we essentially just bolt on a brand into our existing infrastructure. This one is nuanced with a number of different areas that we'll get at over the next year or 2. First order of business is to get it integrated into our systems and processes.

Our next call comes from Anthony Lebiedzinski with Sidoti.

Nice start to the fiscal year. Just wondering if there was any notable pricing benefit in the quarter. And given the pressures as it relates to higher diesel costs and other costs, are you looking to perhaps raise prices? How should we think about those things?

Anthony, it's Chris. So minimal price in the quarter. But as we look to our fiscal '27 outlook, I would say about 1/4 of the growth is projected to be price. Inflationary pressures, including diesel.

Okay. Okay. And then as it relates to Breathe Right, you talked about focusing longer term on brand building. From my understanding, that brand does more advertising marketing compared to the core business. So are you looking to spend even more than that? Or like when you talk about brand building, can you give us some examples as to what you think you'll be doing here going forward after you get past the near-term programs that already are in place?

Yes. So for the Breathe Right business, it's got higher gross margins and higher A&M and slightly higher contribution margin or EBITDA margins in our base business. So plenty of room for advertising and marketing spend. The brand has been on a path to move and expand from kind of illness occasions, think of congestions and cold and allergies to that better breathing, better sleep, better wellness positioning. So the spending and the programs have kind of been in the base business. So we wouldn't anticipate a need to increase the spending levels from historic levels, Anthony.

I am showing no further questions at this time. I would now like to turn the call back over to Ron Lombardi for closing remarks. Please go ahead, Ron.

Thank you, operator, and thanks, everyone, for joining us today and your continued interest in Prestige. We are pleased with our strong start to fiscal '27 and remain focused on executing our strategy, integrating our recent acquisitions and creating long-term value for our shareholders. We appreciate your time today and look forward to updating you next quarter. Have a great day.

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect the call.