Good day, and thank you for standing by. Welcome to the Prestige Consumer Healthcare Fiscal 2023 Earnings Call. [Operator Instructions] Please be advised that today’s conference is being recorded. I would now like to hand the conference over to your speaker today, Phil Terpolilli, Vice President of Investor Relations and Treasury. Please go ahead..

Thanks, operator, and thank you to everyone who has joined today. On the call with me are Ron Lombardi, our Chairman, President and CEO; and Christine Sacco, our CFO. On today’s call, we’ll review our fourth quarter and fiscal ‘23 results, discuss our full year outlook for fiscal ‘24 and then take questions from analysts.

The slide presentation accompanies today’s call 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. On 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 various geopolitical factors, 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 most recent company 10-K.

I’ll now hand it over to our CEO, Ron Lombardi.

Ron?.

Thanks, Phil. Let’s begin on Slide 5. We are very pleased with our record fiscal ‘23 results that delivered strong growth. Thanks to our diversified portfolio of brands that consumers know and trust. Revenues of $1,128 million for the full year grew 3.5% organically.

This was set against a record fiscal ‘22 that grew over 10% as well as the backdrop of a challenging macro environment. Our base business trends were strong across the majority of our portfolio, fueled by our long-term brand building efforts and solid consumer demand.

For the year, our International segment experienced outsized growth as well as the Cough & Cold and GI categories in North America, led by Luden’s, Chloraseptic and Dramamine.

Many of these categories have declined meaningfully just a few years ago at the start of COVID and the resurgence as well as our strong overall performance over the last few years is a testament to the benefits of the diversity of our portfolio. We’ll talk about this in further detail later on.

Our strong sales continued to translate to solid profitability. For the year, we generated adjusted EPS of $4.21 and free cash flow of over $220 million. We remain focused on delevering over time and achieved a year-end leverage ratio of 3.3x even after $50 million in share repurchases and significant inventory investments during the year.

We are set up to continue this long-term leverage reduction in fiscal ‘24, while retaining flexibility. Chris will discuss this further later on. Now let’s turn to Slide 6. Our record fiscal ‘23 performance driven by strong 3.5% organic growth is underpinned by our proven value creation strategy that’s shown here.

By executing this disciplined strategy over time, it’s resulted in a resilient business model that continues to deliver value, not just in fiscal ‘23, but over the long term.

First, we use our proven marketing strategies to leverage our leading portfolio of brands using consumer insights, we drive efficient marketing, channel development and innovation that are the cornerstones to our success. Second, the business model we operate leverages our leading financial profile to enable robust free cash flow.

And third, the model uses the first 2 points to enable strategic capital allocation optionality that further amplifies shareholder returns. Our ability to use cash flow is both effectively and efficiently through disciplined capital deployment creates value. The result of this execution is clear in our financial performance.

We’ve had a successful multiyear compound annual growth rate over the last 3 years. This includes organic growth above our long-term target of 2% to 3% as well as double-digit earnings growth. The performance is especially noteworthy against the backdrop of COVID-19 variance, supply chain challenges and inflation.

By executing these strategic value creation strategies, we continue to position our business for long-term success and value creation. So with that, let’s turn to the next section and review how we’ve driven this growth in more detail. Slide 8 is a reminder of our distinct portfolio attributes that sets us up for success.

The efficient deployment of capital and investments in our brands has both diversified our portfolio into many categories and enable leading market shares for the majority of our brands. First, on the left side of the page is the diversity of the portfolio that is further subdivided by consumer elements.

With a diverse portfolio of brands across many categories, we are nimble in identifying opportunities for investment. We are also able to better mute the impact of any short-term category changes. Second, the right of the page shows many of our leading brands, which are subsegments within these platforms.

Our sales most often come from #1 brands and brands with long consumer heritages, which enables us to focus on brand building, using our category leadership and proven brand building tactics. Both of these business attributes are foundational to our success. Now let’s turn to Slide 9. Here, we can see the benefits of category diversity.

Over the last 3 years, the disruptive and volatile environment led to a host of factors to navigate, including changes to consumers habits, supply chain and inflationary challenges.

With this backdrop, any one category may face short-term challenges and fluctuations, but the power of a diverse portfolio allows us to be positioned for consistent overall long-term growth. For example, the Summer’s Eve on-the-go format of products were impacted over the last few years as consumer habits shifted at the start of COVID-19.

Although this doesn’t change our ability to grow the brand and category long term and we anticipate growth again in fiscal ‘24, it was a factor in our women’s health performance over the last 3 years. Our diversity offsets these pressures.

The 3 categories shown on the page, Eye & Ear Care, Skin Care and GI are embodiments of this as key contributors to growth over the last 3 years. In Eye & Ear Care, we’ve had success using a wide variety of tactics across Clear Eyes and TheraTears.

The launch of Clear Eyes sensitive leveraged consumer insights, which captured incremental consumers who believe they have sensitive eyes. In Skin Care, gains have been fueled by our CompoundW brand, which continues to expand its #1 share with consumers by offering a broad product assortment that appeals to a range of people who suffer from warts.

Marketing efforts have emphasized this in ad placements across digital and other formats. Lastly, in GI, we’ve experienced solid growth in both our Dramamine and Hydralyte franchises. For Dramamine, we’ve successfully leveraged the brand’s heritage and motion sickness and to nausea, where we are now the #1 brand in the category.

For Hydralyte, we continued to chip away at the brand’s long-term opportunity, expanding with consumers across their hydration needs for everyday health in areas such as travel, sports and exercise. In summary, the benefits of category diversity are clear.

By opportunistically investing in growth in each of these categories, we’ve helped fuel solid organic growth over the last 3 years for the total company. Now let’s turn to Slide 10 for a reminder of our brand building tactics. Our numerous brand-building strategies shown here on the page, focus around driving long-term category growth.

Each are executed based on opportunities identified from consumer insights that are specific to each brand. We continue to operate with leading, established brands that are well positioned to leverage these tactics for long-term growth. The end goal is long-term success across channels and growth of the categories to which we are stewards.

To start, we leverage learnings from consumer insights to identify where opportunities are and providing consumer solutions that solve identified issues. Next, we remain agile marketers, investing in timely messaging to raise awareness of product efficacy and brand knowledge around the proven consumer solutions we offer.

We also operate with a multiyear new product development pipeline to ensure we continue to match the needs of consumers. And last, we use the ability to align our investments and product offerings with channels that are important to consumers, including fast-growing channels like e-commerce.

This broad distribution strategy helps underpin the marketing tactics just discussed. In summary, each of these key marketing strategies play a valuable role in our success. They reinforce our long-term organic growth objective of 2% to 3% annually, which we continue to feel good about delivering.

With that, I’ll turn it over to Chris for a review of financials and an update on capital deployment..

Thanks, Ron. Good morning, everyone. I’ll start by reviewing our fourth quarter and fiscal ‘23 financial results, then talk about our business attributes and resulting cash flow that have driven rapid deleveraging and capital allocation optionality.

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. Let’s turn to Slide 13 to begin with fourth quarter results. Q4 fiscal ‘23 revenue of $285.9 million increased 7.1% and 8% on an organic basis versus the prior year.

The growth was approximately split between International and North American segments. North America revenues were up 4%. The largest growth category in dollar terms was Skin Care, where we experienced growth across brands, including CompoundW, Boudreaux’s Butt Paste and Nix.

The International segment increased approximately 33% in Q4 after excluding the effects of foreign currency. This capped an impressive year with the segment growing over 30% on a full year basis.

The record performance benefited from favorable consumer trends in many of our categories previously impacted by COVID-19 and continued strong sales for the Hydralyte brand. Despite difficult comparisons, we anticipate further growth for the International segment in fiscal ‘24.

Adjusted EBITDA increased approximately 14% in Q4 and EBITDA margins remained consistent in the mid-30s. Adjusted diluted earnings per share for the quarter was $1.07, up 18% versus the prior year with higher sales being the largest driver. Let’s turn to Slide 13 for more detail around consolidated results for the full year.

Record revenues of $1.13 billion for the full year fiscal ‘23 increased 3.8% versus the prior year and 3.5% on an organic basis. Our broad and diverse portfolio enabled this result with strong revenue growth in Cough & Cold, GI and our International segment more than offsetting a dynamic supply chain landscape.

By channel, we continued to experience solid consumption growth in e-commerce.

Total company gross margin of 55.4% for fiscal ‘23 compared to last year’s adjusted gross margin of 57.3%, with the change attributable to cost increases, partially offset by pricing actions across our portfolio, which offset the dollar amount of inflationary cost headwinds.

For fiscal ‘24, we anticipate a similar focus to fiscal ‘23, where we have and will continue to institute pricing actions and cost-saving measures across our portfolio to offset the dollar amount of inflationary headwinds. In aggregate, we anticipate gross margin flat to up slightly versus fiscal ‘23 with Q1 estimated to be approximately 55%.

Advertising and marketing came in at approximately 13% as a percent of revenue for the fiscal year as expected, owing primarily to the timing of initiatives and reduced spending around certain categories due to strong consumer demand. For fiscal ‘24, we’d anticipate an A&M rate of just over 13% of sales and up in dollars versus the prior year.

G&A expenses were 9.5% of sales in fiscal ‘23. For fiscal ‘24, we anticipate G&A to decline slightly in dollars versus the prior year. Adjusted diluted earnings per share for the full year of $4.21 grew about 4% versus the prior year. Sales growth and disciplined cost-saving efforts helped offset the impact of cost increases and rising interest rates.

Below the line for fiscal ‘24, we’d anticipate a normalized tax rate of approximately 24%, and interest expense of $67 million, including $18 million of interest in Q1.

Although the magnitude of increases in variable interest rate targets have begun to stabilize, we will continue to face higher year-over-year rates through the first half of our fiscal year before beginning to see the effects of a more stable rate environment as well as lower variable interest rate exposure from our ongoing debt reduction effort.

Last, adjusted results on this page exclude the impact of $281 million net of tax, non-cash, goodwill and intangible impairments primarily related to the company’s Summer’s Eve, DenTek and TheraTears brand names.

The charge resulted from our annual valuation assessment, which was affected by a significantly higher discount rate applied to future cash flows versus the prior year. As a reminder, accounting rules do not write up to the value of brands that have a fair value that exceeds book value.

Most importantly, please note these adjustments have no impact on our long-term outlook for the company as a whole. Now let’s turn to Slide 14 to discuss cash flow. For the full year fiscal ‘23, we generated $222 million in free cash flow as expected.

As previously discussed, we strategically invested behind inventory in light of the current supply chain environment, finding opportunities to increase inventory to better support targeted service levels.

Our stable EBITDA margins and strong cash flow enabled us to invest behind our brands, while continuing to reduce leverage for the year and complete a $50 million share repurchase effort. We finished fiscal ‘23 at 3.3x leverage with approximately 75% of our debt fixed and no maturities until 2028.

For fiscal ‘24, we anticipate a more normalized free cash flow profile of at least $240 million in free cash flow and anticipate achieving around 2.7x leverage. As shown on the right side of the page, this cash generation is underpinned by our leading attributes that enable our financial profile.

Our business model, where the vast majority of revenue is externally manufactured, results in low capital expenditures of 1% to 2% of sales annually. We are anticipating CapEx of approximately 1% of sales in fiscal ‘24.

Our products have strong margins driven by the characteristics of the categories we participate in, their importance to consumer self-care and the highly regulated nature of OTC that creates high barriers to entry. We have meaningful tax benefit from past acquisitions that result in a cash tax rate in the high teens.

And we also remain focused on profitability with continuous cost saving efforts that help us maintain our strong mid-30s EBITDA margin profile. The result of this model is clear. We generate best-in-class and sustainable free cash flow. And our free cash flow conversion remains strong.

This attractive profile gives us the ability to continue to deploy capital in multiple ways, as shown on Page 15.

As Ron highlighted earlier, efficient and disciplined capital allocation is a critical third pillar to our business strategy, balancing the use of our cash generation against various priorities of investing in our brands, deleveraging, M&A and share repurchases. Thanks to our leading cash flow profile and successful long-term business growth.

We now anticipate to operate at long-term leverage of less than 3x. We have confidence in our ability to achieve this lower leverage objective, while still investing behind strategic uses of capital that are shown on the page.

Although these uses of capital such as strategic M&A opportunities may cause us to temporarily operate above this threshold objective, we anticipate our strong cash flows to bring us back to target levels rapidly.

As a result, we continue to expect disciplined M&A and other cash uses to remain an important part of our strategy to adding shareholder value while remaining cognizant of this revised leverage target. With that, I’ll turn it back to Ron..

Thanks, Chris. As we move forward into our next fiscal year, we are confident in our business attributes that leave us well positioned for future growth. It’s a proven business model that delivered value creation throughout disruptive environment, thanks to a variety of attributes.

Our brands are trusted and diverse, which gives us the ability to limit the impact from any individual category slowdowns. This diversity stretches beyond just brands but into diversity of channels, geographies and suppliers, each of which benefits our business in periods of uncertainty and volatility.

This enables us to leverage our proven brand-building strategy, opportunistically that grows categories and as a byproduct, are brands. Our superior financial profile has generated consistent and increasing cash flows over the long term. And finally, the model continues to be scalable.

We have the right resources to continue our disciplined capital deployment playbook, while reinforcing investments in our existing business. Now let’s flip to the next slide to discuss our fiscal ‘24 financial outlook.

For fiscal ‘24, building off a very strong prior year, we anticipate revenues of $1,135 million to $1,140 billion and organic revenue growth of approximately 1% to 2% versus fiscal ‘23 or organic revenue growth of 2% to 3% after excluding the planned strategic exit of non-core private label business that we have historically operated as a service for certain retailers.

Q1 revenues are anticipated to be approximately $278 million, up slightly from the prior year. We anticipate EPS of $4.27 to $4.32 for fiscal ‘24. Regarding EPS, our outlook for fiscal ‘24 reflects the continued temporary impact of higher interest rates that accounts for an over 2 percentage point headwind to earnings.

Thanks to our disciplined P&L management, this is more than offset by efficient brand building and cost management efforts, leading to our outlook for earnings growth at a faster rate than sales growth. For Q1, we expect EPS of approximately $1.01. Lastly, we expect solid free cash flows of $240 million or more in fiscal ‘24.

This will enable the mindful approach to capital deployment optionality Chris discussed. We’ve announced a $25 million share buyback plan today and plan to reduce leverage to below 3x during the fiscal year while continuing to invest in our brands to ensure long-term success.

Our company has a track record of value creation and these anticipated uses of cash will help reinforce that. With that, we’ll now open the lines up for questions.

Operator?.

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

A nice job on the quarter.

I was wondering if maybe you could talk -- give a little bit of color on the gross margin, the puts and takes there for the fourth quarter and then how we should think about it for this year and then also any cadences throughout the different quarters?.

Susan, this is Chris. So for Q4, as anticipated, inflationary pressures and distribution costs were just over 150 basis point headwind year-over-year for us. But our pricing and cost-saving efforts offset the dollar impact of that dollar-for-dollar. So impacted the margin, obviously, but the dollar impact was negligible.

And then we had a little bit of unfavorable mix in the quarter. And we guided Q1 of fiscal ‘24 to about 55%, guided the year to flat to up slightly. We’re calling for some additional inflationary pressures in fiscal ‘24. But again, we expect cost savings and pricing actions to offset those dollar-for-dollar in fiscal ‘24 as well.

So a little bit of a negative margin impact from that, but additional cost savings enable us to call the margin flat to up slightly. So we expect some sequential gross margin improvement from this 55% in the first quarter.

As a reminder, we’re really laser-focused on managing our EBITDA margin, right? So as we continue to progress on our march towards more normalized gross margins, we would look to invest that back into different levels of A&M and maintain our EBITDA margins in the mid-30s..

Okay. Great. That’s really helpful. And then on the international business, it looks like it even picked up sequentially off of a very strong numbers this year. I’m assuming that’s all Hydralyte, I guess.

Is that new products or just continued growing demand for the brand in Australia? And then I’m just curious on your thoughts in the U.S., I know you guys don’t have rights to the brands here, but is there maybe a potential opportunity here? It seems like the hydrating beverages are kind of picking up steam here in challenging Gatorade.

So I just wanted to get your thoughts there..

Yes. So first of all, really, we saw growth across the International portfolio, not only the Hydralyte business, the Care business in Australia. But the small business that we have in Europe as well, have all been firing on all cylinders over the last couple of years.

So primarily Hydralyte drives the big dollar move, because it’s the majority of the sales, but really the international business has been growing well there. And for ‘24, we continue to expect strong growth more in line with our long-term outlook in the mid- to high single digits for that International business after a couple of record years.

But we continue to feel good about the momentum for that business in total. In terms of the U.S., we’ve got a lot of other opportunities to focus on across our portfolio. We had the slide in our prepared remarks today that shows the success we’ve had broadly across the portfolio over the last 3 years.

So we’re really focused on continuing to support that momentum. So the hydration market in North America really isn’t something we’ve got on the agenda..

Great. And then just one last one on the women’s business.

How are you thinking about that for this year? I guess do you expect it to normalize after kind of stabilizing off of those COVID numbers? And I guess, is it still consumers just not returning to the doctor’s office? Or do you think they’ve kind of gotten back to their normal routines now?.

Interestingly, as we sit here today and look back over the last 3 years, excluding Cough & Cold, the women’s health category is the one that seems to have had the most impacted and impacted the longest during this disruptive period.

Not only were shopping habits impacted, but kind of the underlying usage occasions, as we talked about, I think, last quarter as well. But as we sit here today for fiscal ‘24, we expect our women’s health businesses, both Summer’s Eve and Monistat to get back to growth for fiscal ‘24.

And we continue to feel good about their long-term growth opportunity. So despite those 2 franchises being disrupted over the last couple of years, we continue to feel good about their leading positions and their opportunities going forward..

Great. If I could just maybe follow up really quick. And so, it sounds like CompoundW was strong in the quarter.

If you could just remind us, was this the first quarter where you saw that strength also come back?.

No. CompoundW has been performing pretty well throughout the year. So expanded usage, distribution and such so, really a great year for CompoundW. So it’s not really linked to COVID. It performed well throughout the period..

Our next question comes from Mitchell Pinheiro with Sturdivant & Co..

I was curious from an A&M spend on -- and if you said this, I apologize, in the sort of the sequence throughout the year, whether there’s any unusual timing? And then second, what you intend to focus the A&M spending on?.

Yes, Mitch, maybe I’ll take the first part of that, which is, as you know, our A&M plans are built from the ground up with our marketers and various initiatives. So as we saw in this year, the cadence was shifted -- weighted more towards the first half of the year based on certain new product launches and various marketing initiatives.

As we look to fiscal ‘24, we would expect that to be spread more evenly throughout the year..

Yes. And Mitch, in terms of your questions around where our focus is going to be. It’s going to continue to be around our largest brands. So our Power Core brands will continue to get investments above the company average.

And then as we have historically, we’ll post investments to different Core brands where we have new product launches or other opportunities to support during a given year.

Again, another comment, our advertising and marketing spend over the last 3 years has fluctuated a bit and quite a bit from quarter-to-quarter, but we continue to build our plans up from the bottoms up based on our brand opportunities.

And like any good CPG company, we talk about always wanting to invest more for the long-term support of our brands, but we feel good about where we’ve been investing and how we’re set up to support growth long term and specifically for fiscal ‘24..

And could that end up -- so will there be any -- do you intend to launch any new line extensions in fiscal ‘24?.

Yes. We’ll have a stream of some new products out in ‘24, like we do every year. We don’t talk about them ahead of them showing up at retail. But again, new product development and an innovation pipeline is an important part of what we do here to make sure we’ve got a funnel of things coming in. And in this space, it takes time to get things to market.

So it’s more of the same for us, which is always starting with consumer insights to understand where the opportunities are and then getting them out to market. And I think CompoundW and Dramamine are 2 great examples of the long-term success of bringing out a steady pipeline of new products.

In the last year, it’s also been true for Summer’s Eve where we’ve had the SPA launch and then DenTek with New Guards. So if you look at across the portfolio of brands, you see evidence of it happening every year, Mitch..

Okay. And then just one last question on revenue.

But do you -- how do we look at the private label exit? Is it sort of evenly -- is it sort of the first 3 quarters and then you lap some of it in the fourth quarter? And then on the foreign currency headwind, I don’t know if you said it, but what type of headwind do we expect this year?.

Sure. So for the private label business, it will be pretty much even for the whole year, for the most part.

Chris, do you want to take the FX comment?.

Sure. So FX is expected to be a headwind for the year of about $2 million. Our exposure is largely around the Australian and Canadian dollars and the Australian in particular, really swung in fiscal ‘23.

So we’re actually going to have some headwinds, unfavorability from FX in the first half and then we expect it to shift to favorability in the back half. But netting out to about $2 million for the year..

[Operator Instructions] Our next question comes from Jon Andersen with William Blair..

Just wondering, it looks like in the fourth quarter, the -- you shift perhaps in North America shift ahead of consumption at least the consumption that we can see through syndicated data.

Is that the case? And if so, what were some of the dynamics that kind of caused that? And I was wondering if you could give us your perspective on kind of all channel consumption both for the fourth quarter and the full year?.

So for starters, right, those generic consumption reports you get are missing a whole bunch of our fastest-growing segments, particularly International. So if you look at it in total, it might look like it was ahead.

But it wasn’t too far ahead with the exception that the inventory investments that we made back in the third quarter allowed us to begin to catch up on some of the categories like Cough & Cold, where we had been kind of going hand-to-mouth all year. So there was a little bit of catch-up in some of those categories.

But for the most part, it wasn’t too far ahead of consumption for the majority of our categories..

That makes sense. And with respect to that point on kind of catch up, because I know you have as others have been trying to catch up in certain categories.

Where do you -- broadly speaking, where do you think you sit, retailers sit with respect to having kind of the pipeline and shelf stock that they want or prefer? Is there more catch up to come in fiscal ‘24? Or are we back to kind of more normal levels?.

Yes. So for the most part, I think inventory at retail is in good shape. A little bit of catch up in Cough & Cold still to come for us. Again, in particular, we added liquid cost capacity in late Q3, Q4 that helped us catch up a bit, but we’re still catching up on the license business.

But the other categories for the most part, are in pretty good shape. So as we head into fiscal ‘24, we don’t think that retailer inventory will be much of a headwind or a tailwind in total for the whole year..

Okay. That’s helpful. And then I guess, I just wanted to make sure I understand, given the kind of the gross margin trend and the absolute gross margin rate in the fourth quarter.

How we kind of get back to 55% or -- excuse me, how we kind of flat to up year-over-year? What’s coming that is going to drive a reversal in the trend more towards gross margin expansion going forward? Is it just a matter of more price? Or are there other things, mix or accretive new product innovation? Just trying to get a sense for how you’re seeing that..

Yes. So for starters, if you look at what we expect sequentially for gross margin, we kind of hit the bottom in Q3 and Q4. And as we get into ‘24, we expect to lift off of those levels and be fairly static through fiscal ‘24. And then we expect a multiyear recovery back to the 58%.

And it will be some price, but it’s really going to be more cost savings and a program where we’re focused on improving the margins of the product that we sell through new products at incremental gross margins and other programs over time.

And again, as Chris has mentioned not only this, to say, but on past calls, our focus has been managing the inflationary impact dollar-for-dollar through price increases during the short term, which is how we’ve been able to manage our consistent EBITDA margins around 34%. And we’ll step off of that over time as we recover back to 58%, Jon..

Okay.

And last one, you mentioned looking forward operating over time, operating the business with a lower leverage ratio than you have historically, sub-3, I think you said -- does that mean you’re going to be less likely or aggressive on the M&A front? Or how are you kind of thinking about changes to capital allocation than more broadly?.

Yes. The new leverage target of operating at 3x or less over the long term really doesn’t have any impact or change to the capital allocation. Either priorities or thoughts that we have about the business.

You’ve, Jon, you’ve heard us say many times in the past, our job is to figure out how to get things done the right way so that the investors appreciate it. And it continues to position the business for long-term value creation.

So talking about operating at less than 3x over the long term, doesn’t put a ceiling or limit the way we think about investing for the long term. So as opportunities come up for M&A, we’ll continue to evaluate them. And if they make sense, just like we have over the long term, we’ll figure out how to get them done the right way.

So this new less than 3x doesn’t really change the way we think about running the business, and it doesn’t put any limitations on what we want to do for the business..

I would now like to turn it back to Ron Lombardi for closing remarks..

Thank you, operator, and thanks to everybody joining us on what I think is a busy earnings morning, and we look forward to updating you all on our continued progress at the end of the first quarter. So thanks for joining us, and have a good day..

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