Prestige Consumer Healthcare Inc (PBH) 2005 Q3 法說會逐字稿

Welcome to the Prestige Brands' third quarter 2005 earnings teleconference. The call will be hosted today by Peter Mann, President and Chief Executive Officer, and Peter Anderson, Chief Financial Officer. (OPERATOR INSTRUCTIONS). At the request of Prestige Brands, today's conference is being recorded. If you have any objections, you may disconnect at this time. Now I would like to turn the call over to your host, Mr. Mann. Sir, you may begin.

Welcome everybody. We are glad you joined as for the call on our third quarter earnings. Before we get into the specifics of the third quarter those of you who follow our Company have probably noticed that this morning we filed Amendment No. 3 to our S1 Registration Statement announcing our intention to offer a little over 23 million shares at a specified pricing range.

Because we're now very close to the start of the launch of that roadshow and program, we're going to be particularly circumspect in giving you any guidance about future quarters or future years. We hope you understand that. And I would urge any questions that you have about the S1 or the upcoming IPO you refer to the S1 statement.

Having said that, we're now going to report on our December quarter, which as you know, is our third fiscal quarter. And it was another good quarter with good results for the Company. As you have seen, if you read in the press release we had another quarter of strong year-on-year profit growth. Our sales were essentially right on plan, but were marginally a low year ago. The decline versus a year ago was entirely expected due to some unusual events and circumstances in the December '03 quarter. Pete Anderson is going to take you through the specifics of that in some detail.

The other notable event of the quarter was that in early October we closed on the acquisition of the Vetco Company with their brand, Little Remedies. That acquisition has now been entirely integrated into the operating infrastructure of Prestige. The brand is performing well, has contributed to sales and profits during the quarter. And as you will see when I come back and talk a little bit about current initiatives that there are a large number of programs and new products being worked on and being introduced under the Little Remedies banner. And we have high expectations for that business into the future.

I'm now going to turn the meeting briefly over to Pete Anderson, who is going to walk you through both the third quarter numbers and our 9-month year-to-date numbers. When he's finished I will come back and give you some color commentary on some of the nonfinancials events of the quarter, and give you a little glimpse into activities that are occurring right now on most of our major brands. So I'm going to turn it over to Pete Anderson.

Good morning everyone. As Peter said, the quarter just ended was another strong one for the Company. As he also mentioned, sales for the quarter came in at $75.8 million, which were 1 percent or $1 million below the pro forma sales for the year ago quarter. As Peter also said, the decline was not unexpected as we went into the quarter competing against 2 significant events that happened a year ago. The first one was related to Chloraseptic's Sore Throat Remedy, which benefited tremendously last year from a very significant flu season which began in mid November and essentially ended in December. What that had the effect of doing was to greatly increase the sales of Chloraseptic as well as a lot of other cough and cold products last year in that quarter.

In the current year the flu season is behaving more typically of past flu seasons. It has started later, and in fact it really started in January. So that we were comping up against a quarter that included a severe flu season, and this year there was a very mild one during the quarter just past.

The second difficult comp in the quarter related to the Comet brand. And in the quarter ended December 31, 2003 major new distributions with the accompanying pipeline orders were secured for Comet Clean and Flash, the disposable toilet bowl brush system, which we've talked about in previous calls. As you know, that products did not make it in the marketplace. So the current quarter that we just ended really had little to no sales of the toilet bowl brush. And that was up against a very strong quarter the year before.

If we exclude Comet and Chloraseptic, the remainder of our business showed very nice year-on-year growth for the quarter, again, very much in line with our expectations.

EBITDA for the quarter however, adjusted for non-recurring items increased by 14.6 percent over a year ago to 29.6 million. If we turn to the 9 months ended December 31, 2004 net sales were 224.8 million, 4.5 percent greater than pro forma net sales for the previous period.

EBITDA adjusted for non-recurring items for that same period was 76.6 million. And that is a 12.8 percent increase over the prior year's 67.9 million. The strong profit growth is driven by a combination of the sales increase year-on-year, as well as the realization of synergies which resulted from the combination of the 3 companies in April of 2004.

And now I would like to turn briefly to a couple of items on the balance sheet. Peter spoke before about the acquisition of Vetco with Little Remedies in October. And I am happy to report that in addition to the business being totally integrated into our system, the balance sheet really shows very little impact. We essentially added a company or brands with $16 million of revenue. And net working capital at the end of December was actually down about $1 million compared to net working capital at the end of September, which was before the Little Remedies acquisition. And most of that is driven by very tight controls on receivables as well as on inventory.

In addition to that, as you may remember, when we did the Little Remedies acquisition it was financed in part by cash on the balance sheet. We increased our term loan B, and also we drew down $12 million on our revolver. By the end of December that $12 million was completely repaid. So very nice performance from a cash standpoint as well as working capital in the quarter.

And now I would like to turn it back to Peter to take us through some brand highlights.

First I am going to talk about some brand performance during the December recently completed quarter. We will talk for just a few minutes just to give you a sense of the momentum that the Company has -- activities that are currently in the marketplace and will be contributing.

The Little Remedies acquisition was in many ways the significant event of the quarter. It is a very meaningful business with significant historic growth, and we believe even greater future growth. During the quarter we acquired the business. We integrated it into our selling, administrative infrastructure. We integrated it into our operational infrastructure. And by the end of December 100 percent of the integration was accomplished. All of the excess people that we acquired with the business are gone. All of the facilities are closed down. And beginning on January 1, the expected operating synergies are 100 percent in place and contributing.

So it was another testament I think to how Prestige, the infrastructure, and the outsourcing model can easily bring in a new business, integrate it and have it become a part of the Company seamlessly in a very short period of time. The Little Remedies business from a sales and profit performance perspective continues to do well. The brand is growing strongly versus a year ago. And as you'll see in a minute we have number of new initiatives that we think are going to accelerate that growth.

Looking then at our household products business while, as Pete said, the Comet brand declined versus a year ago, that decline was entirely expected and budgeted for. And as a matter of fact Comet's performance -- sales performance during the quarter was meaningfully above expectations, largely driven by good growth on the base Comet powder, which continues to do very well, and some new growth on a new initiative that we are taking on, Comet Cream Abrasive Cleanser. And I will talk a little or about that in a second.

Our other household brand, Spic and Span, also had minor year-on-year growth. That is largely being driven by continued strong performance in the Dollar Store channel. And as you'll see when we talk about current initiatives, we're also introducing more broadly a new flavor of Spic and Span dilutable, which we think will help the brand's growth into the future.

Our personal care portfolio, Comet was modestly above a year ago, and that is despite -- I said Comet, I meant Cutex, sorry. Cutex was marginally above a year ago. And that is despite a relatively weak nail polish remover category. And the reason Cutex turned in year-on-year growth is ultimately a result of our many initiatives to trade nail polish consumers up from the lower-priced base liquid business to the more specialty items like Essential Care and Twister.

Denorex continued to have some weakness during the quarter versus a year ago. But the good news on Denorex is that at the start of the quarter we introduced a significantly upgraded resized and repriced line. During the quarter those new items found their way into retail distribution and are now generally available. And we are seeing in recent weeks very strong improved consumer takeaway on Denorex. We measure that via customers of ours where we share their point-of-sale information. So the outlook brightens for Denorex.

And then lastly and most importantly, our OTC portfolio. As Pete said, Chloraseptic suffered in the year-on-year comparisons due to a change in seasonal timing. The season peaked last year in the months of November and December, and that made the quarterly comparison not look so good. The good news in all of that is that the flu season, as we measure it every week, is now rapidly expanding. For us is good news when people get sick. And now the number of people experiencing flulike symptoms in January is now ahead of where it was a year ago. And that bodes very well for Chloraseptic performance.

Clear Eyes brand continued to show remarkable growth both versus a year ago and versus expectations. It is driven by basically just good, inherent brand strength, fueled by the advertising campaign that we run behind Clear Eyes which features Ben Stein, the kind of deadpan comedian. And as you will see, we have number of new initiatives that are taking place as we speak which should further increase the already strong growth on Clear Eyes.

Compound W, largely driven by the Freeze Off line extension also had a remarkably good year, both in terms of growth versus a year ago and in terms of performance versus expectations. It is very heartening for us to see, now that we're measuring against year ago periods that include Freeze Off at full distribution and at high levels of consumer support, continuing to see Compound W growing extraordinarily well. Murine also performed better than expectations, as did a number of our smaller brands. So all in all, our most important OTC segment did particularly well.

So that is a look backwards at the quarter. Now for a minute I just want to give you a flavor of the activities that are taking place as we speak that are intended to not only maintain that momentum but build on it. We are currently introducing 2 new SKUs, 2 new items under the Clear Eyes name called Clear Eyes for Dry Eyes. Those are entries into the other half of the OTC eye care business which are eye lubricants. It is a very large and growing category. Clear Eyes, we believe, not only has an excellent brand name, but the 2 specific SKUs that we're lunching have been well researched and show great consumer appeal.

In our Little Remedies brand we're now in the process of introducing 5 new items, taking Little Remedies into 3 basically new pediatric care OTC markets. The first are 2 items that are going to be marketed under the Little Teether's brand name. These are both, as you can imagine, remedies for infants who were experiencing teething pain. The first is teething tablets. They are little tiny tablets that dissolve basically instantly when it enters the infant's mouth, and it provides a soothing, almost distraction for the infant from teething pain. The second, our Little Teethers swabs, and these are swabs that are preloaded with a mild anesthetic. The mother simply pinches the handle, dispensing the anesthetic into the cotton bud and applies it to the infant's sore gums.

The second 2 Little Remedies items are under the Little Fevers subbrand. One is a traditional analgesia, and the second is another very innovative product, Little Fever's Cooling Towelettes, which are foil wrapped towelettes that the mother applies to the forehead and body of an infant who is suffering from fever. And lastly, under the Little Remedies umbrella we're introducing 1 item into the diaper rash, which is one of the largest subcategories in which we will compete. It is called Little Bottoms, and it is a daily care diaper rash treatment. We have very high expectations for that.

In the household business, 2 major things are happening as we speak. We're in the midst of a major relaunch and refocus on Comet Cream. That is the cream abrasive cleanser that was launched about a year ago but really played second fiddle at the time to the launch of Comet Clean and Flush. We believe this is a high potential item with great growth opportunity, and opportunity to garner share in the cream abrasive subsegment. We're making -- we have done some significant readjustments to the sizing and pricing of this item to make it more appropriate in today's marketplace. We're gaining new distributions rapidly and we have high expectations that that program is working well.

Also within our household product arena we are expanding the Spic and Span brand in a couple of ways. We have run a test market on a new fragrance in the Spic and Span dilutable line. It's the Spic and Span citrus. It has performed very well in the customers where we have been testing it, and we're expanding that. In addition, Spic and Span perhaps more than any single brand has benefited from our focus on the Dollar Store channel and our ability to be very flexible and tailor product offerings to the very specific needs of those customers. Spic and Span has gained another major new distribution for our spray, and that is happening as we speak.

Turning for a minute to some of our other personal care items, Twister, the very distinctive innovative Cutex item that we launched late in the summer season last year, as you know remember, nail polish remover consumption is quite seasonal to the summer months when the women's toes are exposed. We launched Twister a bit late for the season last year. But now we are closing out all of the remaining distribution voids, and that is setting what we think is the stage for good Twister performance this season.

Scar Therapy, which is the line extension that we introduced under the New-Skin brand name for the treatment, or cosmetic treatment, of visible scars is also gaining significant new distribution in time for the season there. And finally, as I already mentioned, the Denorex relaunch is now in full swing, with pretty generally broad distribution of the new repackaged, resized items. You may have heard our advertising on air on the radio. We have a significant advertising push behind Denorex right as we speak. And we're highly encouraged by recent results there.

So in short, a very good quarter in the December quarter for the Company. Considerable momentum going into the fourth quarter. And we look forward to being able to talk more to you about our initial public offering in the weeks and months ahead. And I think that's the end of our programmed comments. We would be happy to answer any of your questions.

(OPERATOR INSTRUCTIONS). Ron Phillis with Banc of America Securities.

I'm not going to burden you with IPO stuff. Above and beyond what is the most important for us bond folks is obviously cash coming in from IPOs, which we will keep our fingers crossed for you and for us.

On the other side it is important for us to try to determine where cash goes not that is generated. I know that you guys have been interested in the past in making acquisitions. It would be helpful for us to understand at this point in time whether or not you have had enough of that, or whether or not you continue to have an appetite? And to the extent you have continue to have an appetite for further acquisitions, can we expect something potentially in the near future? And if you can't be that specific, is there reason to believe that there are properties out there in the world that may interest you at this time?

Acquisitions have always played an important role in the growth of the Company, on top of what has been as you know strong -- very consistent historical organic growth. And we expect that that will continue out into the future. That while our primary focus and how we manage and run the business is to grow the brands and the business that we own now, we're also very active in the acquisition search process. And we believe that there will be a very consistent and good pipeline of opportunities for us, both big and small.

We have a very I think sophisticated and aggressive proactive acquisition search process, which has identified for us a number of brands or companies which weren't actively for sale there by forestalling an auction process. In fact Little Remedies is a perfect example of that where we were able to identify that business and ultimately buy it from the owner without an auction process.

That whole outlook on acquisitions is very consistent and very unchanged. We have no deals that we're close to. There are a number of things that are potential down the road a ways, but nothing that we are -- is imminent at all.

Could you go through what you believe the relative shares are in the work category for us so we can understand that little bit better?

The share of market is basically very close between Compound W and the Dr. Scholl's line. Compound W is the number 1 by a modest but small margin. And then after that the third brand is a brand called Wartner, which has a smaller share. It competes only in the freezing segment.

Alexis Gold with CIBC World Markets.

Just a couple of questions. I think you had said earlier this year that your synergies would be closer to 12 million for the year. And you were expecting to achieve about 6 million in the second half. Do you think you are still on track to achieve the 6 million? And is it possible we will see even more than that?

We're definitely on track to achieve it. Basically every synergy that we expected has now come to pass. And the total that we had projected was 11.7. The actual achieved is 11.8 annualized, and that is all there is.

I would only add to that there were synergies that were also realized, much smaller synergies that were realized as a part of the Vetco acquisition. Those synergies basically came online at the end of the December quarter and will contributing now.

That's great. And just in terms of your promotional and advertising expenses, they were substantially lower this quarter and last quarter. Can you just give us a sense for what your plans are in terms of advertising? I know you mentioned the Ben Stein ads, but maybe walk us through a couple of your promotions for some of your other products?

I think the thing for you to know and take great comfort is that while the line that we report as selling, advertising and promotion was down, the key components of that in our mind, which are advertising and consumer promotion, were not down at all. The decline is -- and we have talked about this before -- is entirely due to an accounting difference year-on-year where we book many of our trade promotional allowances, allowances that we give our retail partners for pricing promotion and so on. We book that as a gross to net adjustment, whereas before much of that was booked as an A&P expense. If you add the 2 together, A&P is not -- is very similar year-on-year.

George Chalhoub of Deutsche Banc.

If I deduct the $4.4 million of Vetco contribution to the OTC segment, that segment would have been down, and the overall sales decline on a full pro forma basis would have been close to 7 percent. Obviously, I understand exactly how you walked us through some of the major brands, and some of it -- I think you specifically mentioned Chloraseptic was kind of a shift in the timing of the flu season. But it seems to me that there was some other weakness in some other brands somewhere explaining probably this decline. Can you tackle this issue please?

As Pete Anderson told you, the 2 brands that had significant year-on-year declines were Chloraseptic and Comet. First just sort of restating what we have already said on Chloraseptic, I'm looking -- I'm sorry you can look at it with me -- a graph that depicts the number of people suffering flue or flulike symptoms last year versus this year. And in the middle of December last year it peaked at about 55 million people suffering flulike symptoms, a very rapid rise and then a very rapid fall. The corresponding number for this year is less than 30 million people at the same time. So roughly half of the incidence of flu during this quarter than was in place last year.

Now the good news of that is, as I said, that last year the flu incidence declined as rapidly as it grew. So in January, February and March you see last year a very rapid decline in the number of people sick, whereas this year the pattern is building much more normally. And we -- not we, but the source, the company that tracks this projects out what they believe flu incidence will be over the next 6 weeks. And that gives us in the March quarter an incidence of flu that is essentially almost double where it was last year during the same period of time.

That affected Chloraseptic quarter to quarter sales very significantly. And that alone is the largest single factor. Then in the household products segment Comet had 2 unusual sales activities in the year ago period. The first one was, as Pete told you, was the introduction of a new line, Comet Clean and Flush, which generated very significant introductory pipeline sales.

And the second was a very unusual promotional activity on Comet Spray, particularly at Wal-Mart that, if you remember, the December quarter last year was the quarter in which the shareholders of the former Prestige were offering the company for sale, and there was a probably some motivation to build sales during the quarter. So there was a very large pipeline and promotional activity behind Comet Spray, which also was entirely atypical. Comet spray sales this year were strong, but were without the benefit of that unusual influence.

So it seems that even if we (indiscernible) shift in the whole season, not that the season is weak. And if we exclude the Vetco contribution in the fiscal fourth quarter -- that fourth quarter should make up for the shortfall that we saw in those specific main brands in Q3?

I don't want to give you a projection for the fourth quarter. But if you look at the year ago fourth quarter, what you'll see is that the sales declined quite sharply from the third quarter. And that is entirely driven by those same 2 phenomenon. Last year they sold a lot of Chloraseptic in the third quarter and way less Chloraseptic in the fourth quarter, where as normally you would expect the reverse to be true.

The same is true for Comet, that Comet sales in the third quarter last year were much stronger than in the fourth quarter. And again household products sales usually build in the fourth fiscal quarter as we come into the household cleaning season. So I think that is how you should be looking at the 2 quarters sequentially.

On the trade promotion, I understand exactly the accounting change you were talking about. But here's my question just to make sure. The funding behind the brand that you have is up. And all that has happened here is a shift from the trade promotion of -- I think in the Q you mentioned close to $2 million from the SG&A into netting gross to net sales. Is this what is going on here or is that --?

That's exactly right. That's exactly right.

But on a -- if we combine those together, brand support with up year-over-year?

Right. It was essentially flat year to year.

I just want to make sure.

You understand it exactly right.

On the -- in the S1 you provide -- excuse me, I have a cold. I'm trying to speak clearly. You have provided the forecast and interest expense expectations pro forma for the IPO. And that interest expense number is ranging from 29 to $30 million. And that number is fairly consistent for the next few years. I want to make sure I don't misread this into saying that you may not be reducing debt and therefore your interest expense will commensurately not decline.

What is the reason why you would anticipate interest expense remain relatively flattish going out 2 or 3 years, despite the fact that you should have a lot of free cash flow with your low CapEx?

Unfortunately we are under advisement that we can't talk about the S1 and we can't talk about projection. But the pro forma was put in to take into account what the debt level is now. And clearly with the cash flow that this Company kicks off the debt level will go down dramatically absence an acquisition. And in any of the projections going out, since we don't know that there is going to be an acquisition, the intention is that that will get paid down.

Just to make sure I understand that, if the numbers flat -- that is why I was asking this question basically to try to understand strategically where you think you're going. These numbers do not reflect acquisitions obviously.

Absolutely not.

And it seems to me that almost one can imply they don't even reflect debt pay downs. It reflects that cash is accumulated somewhere, maybe on the balance sheet, without using it, which obviously is not illogical.

It is our operating philosophy -- this is not projection, we're just telling you what our philosophy is -- is to use all of our excess cash to pay down debt unless there is an alternate use which would be an acquisition, and loan agreements require us to do so.

My next question, and this is a little bit big picture. Have you seen any change competitively speaking that is kind of north of enough to mention -- obviously I don't want you to go through every single detail, because you're always facing competition every day -- but something more notable that will cause you to change your A., pricing or B., maybe strategic product launch timing?

No. The only -- in the most recent quarter there were no at all unusual competitive activities, as we told you a quarter ago. In the early part of this year Schering-Plough introduced a competitive item to Freeze Off, and that has been the only meaningful new competitive item this year.

And when do you expect to complete the IPO? I know this could change, but at this point in time when do you expect this --?

We anticipate beginning the roadshow process later this week. And then it is a little bit in the hands of the investment gods. But that is when we start the process.

Reza Vahabzadeh with Lehman Brothers.

I misheard the EBITDA contribution of the Vetco business. You said sales was 4.4 in this quarter, and what was EBITDA?

1.7.

1.7. Okay. And then on the savings front, I'm assuming in this quarter you were at the 11.7 annualized rate?

Yes. In the synergies?

Yes. And so you had somewhere around 2.9 million of savings in this quarter?

Yes.

Where was it? Was it all in G&A?

No, it hits in a number of different line items in the P&L. We obviously had G&A synergies. We also had significant distribution synergies by combining the shipments of Prestige with Medtech and Spic and Span. So that is reflected in the cost of goods synergy. And then lastly we had significant synergies in the A&P area as we were able to reduce fixed expenses like agency fees, media buying service fees and so on.

Do you happen to have the ballpark figure of savings per one of those line items handy?

I don't have that handy. It does fall across all 3 lines.

Do you have an idea of the savings in the A&P side?

For the quarter it was about 750 or 800,000.

That's close enough. And then when I look at your A&P spending, just not to spend too much time on that, it wasn't just lower than the prior year, it was actually also lower sequentially than the last two quarters pretty much across all major segments. And I'm just trying to find out why that is?

That's seasonally driven entirely. More of our business is seasonal to the summer -- the spring and summer months. And so we spend more heavily there. That is behind Compound W, for example. Warts are seasonal to warm weather. It is behind Cutex, which is seasonal to the summer months. It is behind the household products, which people use more household products in warm weather.

And so our advertising is driven seasonally. There are brands that are seasonal to the winter months, which would be Chloraseptic and Denorex. We delayed some advertising on Chloraseptic because of the slowly developing flu season. And the dandruff season is most active in the March quarter. And so the December quarter seasonally a time when we spend less.

The other factor is that last year as the old Prestige was launching their toilet brush system, they spent approximately $2 million in media and support behind that, and obviously some product didn't make it. That was not annualized this year.

I see. And then you mentioned that there was some switch in the accounting classification of A&P spending between net to sales and below gross profit. Pete, do you happen to have the apples to apples selling advertising and promotional spending in the 3Q of last year versus the 17.3 of this year handy?

What I can tell you is that if you take price allowances, which is in the gross to net, and you take trade promotion which is in A&P, and you take the 9 months year-to-date gross sales for each period, the combination of trade promotion and price allowances equals precisely 7.8 percent of gross sales each year for each 9-month period. So at the end of the day there was almost a dollar for dollar swing from down at A&P up to price allowance.

But I actually was curious, maybe I can get this from you later, what the actual P&L would have looked like under the same accounting classification, just so I can basically put it on the balance sheet. But maybe I can call you on that later?

And then on a sales by brand basis you touched on the performances, some were up, some were down. Do you happen to have the actual percentages in dollar amounts by any chance?

We're not going to provide that level of specificity on a brand by brand basis.

And then on the flu season beyond last year how much of the flu season is, from your standpoint anyways, during the December quarter versus the March quarter? Is it usually 50-50, 60-40? What is the average?

More 40-60.

40-60. 40 being December?

Yes.

I guess the other question would be can you make p in the March quarter the shortfall in the December quarter on Chloraseptic?

Obviously I can't answer that specifically. The flu incidence data suggests that the March quarter this year will be significantly sicker, meeting more people sick quarter, and that should very positively impact Chloraseptic. Whether we'll make up the difference or not remains to be seen.

Right. But the actual shipment quarter for Chloraseptic, is that in March quarter usually or December quarter or September quarter, because I previously had thought it was December.

The shipments, the preseason shipments span the September and December quarter. And then what happens after that -- and preseason shipments this year on Chloraseptic were relatively similar to last year. But then what happened last year was the consumer takeaway exploded in mid November through the end of December.

Just as a point of interest, while we don't have IRI data yet into January, we do have PLS data from several of our big retail partners. And what we see there is that Chloraseptic sales in January are showing strong takeaway gains over a year ago, very strong.

Walter Branston of Regiment Capital.

I have a couple of things. Can you tell me how much of the 11.7 million in synergies has yet to hit the numbers?

Basically it was the first quarter, so the first fiscal quarter worth of 11.7 didn't happen. So roughly on an annualized basis we missed a little less than $3 million.

Another way to look at that is to look at our credit agreement which provides an add back for synergies that have not yet hit in the trailing 12 months figures. Are you understanding what I'm saying?

Yes, of course.

And that at the end of this quarter was $7.1 million on a trailing 12-month basis.

I guess I don't understand the discrepancy between the 3 million just mentioned and the 7.1 million?

Because the trailing 12 months includes the year ago March quarter before the -- which has an entire quarter of absolutely no synergies.

So if the 11.7, 4.5 -- 4.6 million has already been recognized, is that correct?

Yes.

Yes. And previously you have given us a trailing 12 months pro forma LTN EBITDA number. Do you have that?

If you take the -- go to our website where we have given you the quarterly breakdown for last year, and then simply add the fourth quarter from last year to the 9 months that we have just given in the press release, and you are there.

By last question is, you talked about Comet Soft Scrub. How large is that market? And can you give us any more details regarding what distribution you have obtained for that product?

The cream abrasive cleanser category -- I don't have the figures right in front of me, but is significantly larger in total -- in dollars and -- well in dollars -- than the abrasive powder category which is the one that Comet dominates. The leading brand in the abrasive cream category is Soft Scrub, formally owned by Clorox and now recently transferred to Henkel. As I said, it is considerably larger.

The Comet Cream product was introduced about a year ago. It was introduced simultaneously with the Clean and Flush. As a result under the former Prestige management it received very little management focus. And its distribution was relatively low in the teens or 20s really. We are now, if you will, relaunching that item. It is a very good formula. We believe that we have a good positioning vis-a-vis competition. And we are not only expecting but seeing increased distribution in this quarter that we're doing -- we are implementing this program.

Can you give us any details? Do you have it in Wal-Mart, as an example?

I'm not going to comment on individual details, but we're very active with all of the major retailers, and we are experiencing good levels of success.

Our final question comes from James Ewing (ph) of AIG.

I just have 1 question regarding the reconciliation to EBITDA -- there's the other non-recurring items. It's kind of a big swing between year to year in the quarter. I'm wondering if you can give some detail on that?

Sure.

Yes, the biggest item in last year was that there was a sale of -- rights to sell Spic and Span in Italy in which the Company realized $2.9 million of what was a onetime gain. So that was the big item there. This year the other non-recurring item of 567,000 is an expense related to accounting and legal fees associated with the IDF's offering, which was pulled at the beginning of the quarter. So we had to recognize those expenses in this quarter.

Mr. Mann, there are no more questions in the queue. I will turn the meeting over to you for final remarks.

Okay. Thank you all again for your -- both your support and your interest in the Company. We are obviously in, for us, a very exciting phase of the Company's growth. The next few weeks and months promise to bring about significant events. And we look forward to keeping you posted on all of them. Thanks for listening.

Thank you for participating in today's teleconference, and have a good day.