Prestige sumer Healthcare (US:PBH)2021-02-04 20:12Financial Data and Key Metrics Changes - Q3 revenue was $238.8 million, a decline of 1.6% on an organic basis compared to the prior year, with North American revenues down 2% [17][18] - Adjusted EBITDA declined approximately 6% in the quarter, while EBITDA margin remained consistent in the mid-30s [19] - EPS for the quarter was $0.81 per share, flat compared to the prior year due to lower interest expense offsetting lower revenue [19][20] - Total company gross margin was 58.2% for the first nine months, largely flat compared to last year's adjusted gross margin of 57.9% [21] Business Line Data and Key Metrics Changes - Women's Health and Oral Care categories saw the largest revenue increases, while Cough and Cold, motion sickness, and head lice categories faced declines due to changes in consumer behavior related to COVID-19 [17] - The international segment increased approximately 2% after excluding foreign currency effects, primarily driven by higher sales of Hydralyte in Australia [18] Market Data and Key Metrics Changes - The company experienced strong triple-digit growth in the e-commerce channel year-to-date, as consumers shifted to online purchasing [20] - E-commerce sales now account for approximately 12% of total sales, with expectations for this to remain stable post-COVID [41] Company Strategy and Development Direction - The company’s strategy focuses on offering a wide range of easily accessible brands and adapting to consumer shopping habits, particularly in e-commerce [9][10] - The long-term goal is to achieve 2% to 3% organic sales growth, translating into mid to high single-digit earnings growth [30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in business performance and increased outlook for both sales and EPS for the full fiscal year [27] - The company anticipates a recovery in COVID-impacted categories as consumer activity normalizes and restrictions lift [38] - Management noted that the focus on health and hygiene is likely to continue, potentially benefiting sales in fiscal 2022 [77] Other Important Information - The company generated $43.5 million in free cash flow in Q3, with a total of $159.2 million for the first nine months, reflecting over 3% growth versus the prior year [24] - The company plans to refinance $600 million in 2024 notes with a current interest rate of 6.38% to take advantage of favorable market conditions [42][60] Q&A Session Summary Question: Long-term sales growth target of 2% to 3% - Management indicated that organic consumption growth has historically been in the 2% to 3% range, and they expect to return to this level as COVID-impacted categories recover [36] Question: E-commerce growth and its impact - E-commerce sales have seen triple-digit growth, now accounting for about 12% of total sales, and management is confident in maintaining this level [41] Question: International segment outlook - Management noted sequential improvement in demand in Australia, but anticipated a decline in international sales in Q4 due to timing of distributor orders [49] Question: Supply chain issues - Management reported steady supply chain conditions, with no significant changes impacting their ability to maintain stock levels [78] Question: A&M spending outlook - A&M spending is expected to remain in the range of 14% to 16% of sales, consistent with historical performance [85]