Good day, and thank you for standing by. Welcome to the Q2 2026 Prestige Consumer Healthcare, Inc. Earnings Conference Call. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first 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 and COO. On today's call, we'll review our second quarter fiscal 2026 results, discuss our full year outlook, and then take questions from analysts. A slide presentation accompanies today's call and 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 geopolitical events, each of 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 turn it over to our CEO, Ron Lombardi. Ron?

Thanks, Phil. Let's begin on Slide 5. Our Q2 results exceeded the expectations we communicated back in August, thanks to certain timing factors. Sales of $274 million declined versus the prior year but were better than forecast due to the timing of Clear Eyes supply and accelerated e-commerce shipments late in the quarter that outpaced consumption. We expect these timing factors to come out of Q3 and still expect a second half improvement in eye care supply previously discussed that underpins our full year forecast. I'll review our Q3 and full year outlook in detail later. Aside from these timing factors, our base business continues to perform well, benefiting from the diversity of our portfolio and channels. We continue to experience double-digit e-commerce consumption growth, thanks to the long-term investments previously discussed. Moving down the P&L, gross margin was largely as anticipated. Adjusted EPS of $1.07 was similar to the prior year but ahead of expectations due to the sales beat. Lastly, our financial profile continues to generate strong free cash flow, which was $134 million for the first half, up 10% versus the prior year. This valuable cash flow and our favorable leverage ratio enables multiple ways to create value for our business. For example, in Q2, we maintained our leverage ratio of 2.4x while repurchasing over 1.1 million shares. And we continue to see additional opportunities for capital deployment that can enhance shareholder value. Now let's turn to Page 6 for a review of our DenTek brand and how we are expanding the brand's reach in the dental care market. DenTek participates in the niche peg sections of a much larger oral care category. Our product offerings are diverse and include dental guards, floss picks, interdental brushes, and numerous dental accessories such as temporary tooth fillings. The wide-ranging portfolio is geared towards dental care enthusiasts, offering technology-focused solutions to meet oral care needs. Like all of our brands, DenTek's emphasis is behind differentiated product offerings where we can use long-term brand building to drive sales growth at attractive margins. With that in mind, our largest focus within the DenTek portfolio is around dental guards, which today represents well over half of the brand's revenue. By leveraging the brand's #1 share in combination with innovation and proven brand-building tactics, we've been able to drive category growth and as a byproduct, our market share, which now exceeds 50% of the category. On the right side of the page, you'll see the most recent example of this proven marketing playbook, the Fantasy Guards marketing campaign. Fantasy Football consumes an estimated 1.2 billion hours of time annually with fierce rivalry and competition. This results in untold stress to players and fans experiencing physical symptoms, including teeth clenching and jaw pain. DenTek interjects itself in a witty way, allowing for fantasy football leagues to enter a sweepstakes and win an embarrassing grand prize fine for their lowest scorer. Launched in Q2 with the backing of former and current NFL players, the campaign is designed to connect DenTek with both new and existing consumers in a culturally relevant way. Engagement is broad-based across all the various marketing channels. The results are early but showing solid success with an over 5 percentage point gain over last year in DenTek Guard's market share. So in summary, through brand building behind DenTek's most differentiated products like Dental Guards, the brand continues to grow sales and market share and is set up well for continued long-term growth. With that, I'll turn it over to Chris to discuss the financials.

Thanks, Ron. Good morning, everyone. Let's turn to Slide 8 and review our second quarter fiscal '26 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. Q2 revenue of $274.1 million declined 3.4% from $283.8 million in the prior year. The revenue decline was mainly attributable to lower eye and ear care category sales, owing largely to Clear Eyes supply constraints, along with lower cough and cold category sales, which we expected. EBITDA margin remained in the low 30s. Adjusted EPS of $1.07 was down slightly versus $1.09 in the prior year with lower sales primarily offset by the favorable timing of A&M as well as improvements in interest expense and share count, thanks to the benefits of our capital allocation strategy. Now let's turn to Slide 9 for detail around consolidated results for the first half. For the first six months of fiscal '26, revenues decreased 4.8% organically versus the prior year. By segment, excluding FX, North America segment revenues decreased 6.1% and International segment revenues increased 2.7% versus the prior year. The first six months sales declines were due largely to anticipated impacts of the Clear Eyes supply chain constraints and were also impacted by the expected order timing of a certain e-commerce customer that benefited Q4 of the prior year. We have continued to see variability in this customer's order patterns, and Ron will touch on this when reviewing our updated outlook. In spite of this variability, we experienced impressive double-digit year-over-year consumption growth in the e-commerce business, continuing the long-term trend of higher online purchases. Our ongoing investments have paid off on a consistent basis, including during important large-scale e-commerce sales day events. Elsewhere, our International OTC segment business increased in the first six months, helped by higher Hydralyte sales. Although Q2 was affected by the timing of distributor orders, which we expected, we continue to have confidence in our long-term algorithm for 5% annual segment revenue growth. Total company gross margin of 55.7% in the first six months was up 60 basis points versus the prior year. Looking forward, we still expect a 56.5% gross margin for the year with a Q3 gross margin of approximately 56%. For tariffs, our latest full year potential cost forecast remains approximately $5 million. As a reminder, we have a diverse predominantly domestic supplier base and have only modest exposure to high-tariff countries as well as certain products that are currently exempt from tariffs under USMCA and other specific policies. Advertising and marketing was down as expected due to the timing of certain marketing initiatives coming in at 14.1% of sales for the first six months. For fiscal '26, we now anticipate an A&M percentage of approximately 14%, while Q3 A&M is expected to be the highest spend rate of the year at over 15% of sales. As expected, G&A expenses were up for the first six months versus prior year due to the timing of certain expenses. We still anticipate full year G&A of approximately 10% as a percent of sales. Finally, adjusted EPS of $2.02 compared to $1.98 in the prior year as improved gross margin, the timing of A&M, and more favorable interest expense helped offset the impact of lower first half revenues. We continue to expect favorable interest expense through the balance of the year. Lastly, our Q2 normalized tax rate was 24.1%, resulting in a first half normalized tax rate of 23.7%. We still anticipate a tax rate of approximately 24% for the remaining quarters of fiscal '26. Now let's turn to Slide 10 and discuss cash flow. For the first half, we generated $133.6 million in free cash flow, up approximately 10% versus the prior year. We continue to maintain industry-leading free cash flow and are maintaining our outlook for the full year of $245 million or more. At September 30, our net debt was approximately $900 million, and our covenant-defined leverage ratio of 2.4x remained stable. Our strong financial position and consistent business performance continues to enable multiple uses of cash flow in fiscal '26 that add value for our shareholders. For the first six months, we've now repurchased 1.6 million shares for approximately $110 million. The majority of this was opportunistic repurchases during Q2, which we expect to continue through the remainder of the year. Next, we remain diligent around M&A, seeking leading brands and portfolios that can enhance our portfolio and business. Lastly, we still anticipate the strategic acquisition of our eye care manufacturer, Pillar5, for approximately $100 million, which we expect to close in Q3 based on the fulfillment of certain closing conditions. With that, I'll turn it back to Ron.

Thanks, Chris. Let's turn to Slide 12 to wrap up. Halfway through the year, we are reiterating the outlook offered in August and feel good about the performance of our business in the current dynamic retail environment. This confidence stems from our proven business strategy and well-diversified portfolio that is set up for long-term growth and success. For fiscal '26, we continue to anticipate revenues of $1.1 billion to $1.115 billion, with organic growth down approximately 1.5% to 3% versus the prior year. Most importantly, we are on track to improve Clear Eyes supply in the second half. For Q3, we're expecting revenue of approximately $282 million, down versus the prior year. The lower revenue versus the prior year is attributable to two factors. First, the receipt of Clear Eyes inventory late in Q2 reduces our expected Q3 revenue by an estimated $5 million. Second, we anticipate an e-commerce retailer order adjustment in Q3 due to their September order patterns above our stable consumption levels. We realized a similar trend in March and April earlier this year, where we saw sales shift into Q4 from Q1. For EPS, we now anticipate adjusted EPS of $4.54 to $4.58 for the full year, which is the higher end of our prior range, thanks to our share repurchase efforts. For Q3, we'd anticipate EPS of $1.14. Lastly, we continue to anticipate free cash flow of $245 million or more. We have ample capital deployment optionality that has a history of maximizing value for our shareholders. With that, I'll open it up for questions. Operator?

Our first question comes from Susan Anderson with Canaccord Genuity Corp.

Nice job on the quarter. I guess maybe just a follow-up on the Clear Eyes. So it looks like you guys are on track to return to shipments. I mean maybe if you could just give some color on how we should expect that to flow through, I guess, in the rest of the year? And then also just curious while you guys kind of were out of supply, if you lost any shelf space at any other retailers? And then also just the lower distributor orders in the year internationally, I assume has nothing to do with that, but just checking on that. And then I have a follow-up after that.

Susan, it's Chris. I'll begin, and maybe Ron can add some insights too. Back in August, we outlined three key elements of our long-term strategy to enhance our supply chain in support of Clear Eyes growth. The first phase involved bringing in two new suppliers to meet our needs. The first supplier started towards the end of Q1, and the second began operations late in Q2 as planned. Pillar5 is making progress with the new high-speed line we discussed, and we anticipate some benefits in Q3, with more expected in Q4 when they will be operating for the entire quarter. Although ramping up a new line to full capacity takes time, Pillar5 has already produced some commercial products that we expect to ship later this quarter. We foresee a sequential improvement in Q3 compared to Q2, and then again in Q4 compared to Q3. Regarding your question about international eye care, Pillar5 does supply some eye care products for our International segment, which is also experiencing the impact of our constraints.

So Susan, to your question around lost share in shelf space, we certainly have seen a pretty significant reduction in share as we haven't been able to keep up with prior year's levels of product. And as we communicated to our retail partners what we would be able to supply, they made appropriate adjustments at shelf. So if you go to shelf and look, you'll see our base redness and max redness pretty much the main available product, which is what we have focused on because it was the most significant element of the product sales. So as we get the two new suppliers into full production, steady production in Pillar5, new high-speed lineup, we'll begin to look at recovering that shelf space and those SKU offerings.

Okay, great. Could you discuss the cold and cough season a bit? I understand that your exposure is not as significant as others. It started off quite weak, and the same seems to be true in Europe. However, it appears that your international performance, mostly in Asia and Australia, was quite strong. Can you share your expectations for the remainder of the season domestically?

Yes. So when we talk about the cold and flu category, we always like to remind everybody, as you stated, it's not a significant category with high single digits for us, and we're primarily in the cough segment. Our international business, right, which is in the Southern Hemisphere, did have a good season. So that was good for us. But we're primarily in the saline nasal care segment there. But we just reported results through September, right? So two quarters, we haven't even gotten into the cough/cold season yet. We'll see how illness levels play out during the important Thanksgiving to New Year's time frame. So we'll see where it goes, Susan. Too early to predict, I guess, is my final comment on it.

Our next question comes from the line of Rupesh Parikh with Oppenheimer & Co.

So I guess just starting off with retailer inventories. So I know you went through the e-commerce volatility there. But just curious, outside of that, I guess, the e-commerce channel, how would you characterize the health of retailer inventories in the U.S.?

Yes. So I'll comment on our space within the store, which is what we focus on in general. Outside of the e-commerce order patterns that we talked about, the rest of our inventory at retail has been steady or predictable is the way I would describe it. So there really hasn't been any significant impact on our performance in those channels. You are hearing other companies talk about it more broadly in CPG, like even in our space. But it seems to be more concentrated in the big categories where there's multiple brands or competitors fighting for shelf space or lots and lots of SKUs and big shelf space where retailers may look to reduce inventories in those spaces. So think about the cold and flu section of the store. Think about the analgesic section, right? Lots and lots of space where there's an opportunity to find ways to take cash out of the system. So for us, it continues to be steady with the exception of the e-commerce, as we've talked about.

Great. And then maybe my one follow-up question. So women's health, you've had momentum in recent quarters. It looks like it was down this quarter in North America. So just curious what's happening there? I don't know if it's comparisons or just some additional color there.

Yes. So there's kind of a lot going on to take a look at one quarter's comp. So over the last three quarters or so, we've had a lot of noise in the order patterns, not only in women's health, but across that portfolio. In women's health, in particular, we had some unusual comparisons going on last year as the Monistat VAF category changed from vertical product offering to horizontal. So it impacted retailer order patterns and inventory levels last year as they were getting rid of the old and bringing in the new. So if you go look at it over the three quarters ended September or the four quarters ended September versus the same comps, you'll actually see that women's health is up. So I always like to go back to we continue to feel good about the work that we've done to continue to position those two brands for long-term growth.

Our next question comes from the line of Keith Devas with Jefferies.

I'm curious if you guys can actually just comment what you're seeing on the macro environment. It's been volatile for some time, and we're seeing consumption across a lot of consumer health categories kind of slow into the end of the year. So any color on how that's playing out in your business? And then as it pertains to the guidance, particularly on top line, is a lot of the difference between the high and low end of the range mostly related to eye care recovery? And how are you factoring the rest of the underlying performance into that?

Keith, let me make a few comments on the macro environment, and I'll let Chris comment on the sales outlook. So first of all, you don't have to look very hard to hear and see lots of news on slowing consumer trends and concerns about momentum in the consumer environment. So if you think about a retail store, right, the stores in general are under some pressure. For our part of the store, right, we sell needs-based products, right? You wake up, someone in your household is ill, you're going to reach for that trusted brand. So we have a certain moat around our categories that has us a little bit disconnected from the general macro environments that are going on. For us, we have broad offerings that are available in broad channels with many brands having multiple price points with either different kinds of technology or innovation or different pack sizes. So we're well positioned to catch the consumer with our trusted brand as they think about maybe shopping differently or looking for different price points. So for now, we haven't seen any meaningful impact on how we would think about the outlook for the business for the rest of the year.

And Keith, this is Chris. So your question regarding the low and the high end of the range, yes, you're correct. Eye care is the primary driver behind those two numbers. As Ron mentioned, the rest of the business is largely as expected back in August, no real change from those comments where we talked about an international step-up just for normal seasonality in the back half versus the first half and really just updating today for the timing of the early shipments on Clear Eyes and the retailer order patterns from Q2 to Q3.

Great. That's very helpful. If I could squeeze in a follow-up. Just on capital allocation and the deal environment. We saw a large consumer health player kind of taken off the board earlier this week. Curious how that plus maybe the potential for future consolidation changes how you think about the deal environment and in terms of where to allocate capital between reinvestment, share repurchases, and potential M&A, if any of the activity recently kind of changes your order of preference?

Yes. So Keith, let me start, and I'll let Chris add at the end here. So for capital allocation, our priorities continue to be consistent. We would like to do M&A. We're sitting on historically low levels of leverage and M&A capacity. Again, over the next four years, we expect to generate $1 billion or more of cash flow that we'll be looking to do something with. And I think the quarter ended September is a great example of that. We were out in the market opportunistically buying back our shares. We bought back over 1 million shares, which is a great way to add value to existing shareholders, right? That was about 2% of our float during the quarter. So we've got backups to do while we wait for those right M&A opportunities. In terms of the pipeline or the kind of opportunities that might pop up, we don't think this week's announcement really changes that. They're going to continue to look at their portfolio and make decisions about what they keep based on where they see opportunities and what fits their investment criteria. So really nothing changed there or with any of the other big spin-outs that have recently happened or are expected to happen. And again, over time, we bought from families, we bought from private equity. We bought from big pharma and/or big consumer companies. So we expect that we'll see more opportunities. The important thing for us is we're going to continue to be disciplined and make M&A investments where it presents long-term growth and value creation opportunities.

Our next question comes from the line of Jon Andersen with William Blair.

Sorry for jumping on a bit late, so I may have a duplicate question. I apologize in advance. I was wondering if you could discuss the consumption trends in North America across the rest of the portfolio, excluding Clear Eyes, and where you ended up. Additionally, any insights into specific strengths and weaknesses by brand and category would be helpful. Regarding Clear Eyes, could you share your thoughts on your ability to reclaim some of the shelf space lost during the supply constraints and what assumptions you have about reclaiming that space over what time frame?

Yes, let me address those questions in reverse order, Jon. For Clear Eyes, regaining our market share and shelf space will require some time as retailers need to become confident in our ability to maintain service levels. We expect to see progress over the next two resets. There will definitely be a recovery as we replenish the retailers' inventories and fill the shelves. It’s important to note that Clear Eyes has largely defined the eye care segment. The eye redness category has actually seen a decline as Clear Eyes' supply and market share have decreased. This is where we will begin discussions with retailers about the necessity of restoring our SKUs since there are consumers eager to purchase the product and re-engage with the category. We recognize that we need to invest in marketing to restart momentum, but we are optimistic about Clear Eyes' historical positioning and brand recognition among consumers. Regarding overall company performance, as I mentioned earlier concerning women's health, the last three quarters have been quite tumultuous. Clear Eyes' supply challenges have significantly affected our performance. We’ve experienced fluctuating order patterns, with sales spiking one quarter and dropping the next. We're looking at year-to-date performance; if we remove Clear Eyes and adjust for foreign exchange, total company sales are up approximately 2.5%, which aligns with our long-term organic growth expectations of 2% to 3%. The international business has grown about 5%, consistent with our expectations, while North America has increased by around 1%, slightly under our long-term projections. However, this all aligns with what we anticipate over the long run. Notable strong performers include GI products, such as Dramamine and Fleet, with Gaviscon also performing well in Canada. Women's health has seen growth during this period as we position those brands for sustained success in the international market. Overall, we remain confident in our company's standing and brand strength as we navigate this challenging environment filled with uncertainty.

Yes, that makes sense. I have a follow-up. The gross margin rate in the first half of the year seemed a bit low due to some mix dynamics. However, the guidance for the year suggests a significant increase in the second half compared to the first half. What factors contribute to that? How confident are you in that outcome, and how much visibility do you have? Is it influenced by the projections you've provided regarding Clear Eyes?

Jon, it's Chris. So just note, we have a 60 basis point step-up in the first half gross margin. So really just a continuation of the benefits of cost savings and mix. The implication to your point is a bigger step-up in Q4 that's similar to last year, largely driven by the timing of cost savings. And when we look at our International segment, gross margin revenues were impacted by mix, but also in the quarter, we were carrying two warehouses as we transitioned facilities and the provider for our warehouse in Australia. So maybe a little bit of lingering cost in Q3, but we would expect to see a sequential improvement in that segment as well, which will impact the total company, obviously.

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

I have a couple of questions. First, I noticed that inventories increased by $5 million sequentially in Q2. Is this increase related to Clear Eyes? Also, I'm not entirely sure what to expect in the third quarter regarding Clear Eyes, could you provide some clarification on that?

This is Chris. The inventory increase during the quarter is not really related to Clear Eyes. The products we receive for Clear Eyes are sold quickly. We had a significant order from our e-commerce retailer in Q4, and we've been adjusting for that across several brands. It's not just one specific issue but more widespread. Regarding Q3, even with the roughly $5 million we received late in Q2 and accounted for in Q3, we still anticipate improvement as we have longer periods with two new suppliers now operational for Clear Eyes and some early commercial products emerging from our new high-speed production line.

Okay. So from the A&M perspective, it will be your largest expenditure in Q3. Are there any specific initiatives that you are concentrating on?

No, not really, just very motivated. We built it from the brands up. The timing of new product innovation might be affecting that. Some of our brands and the related spending have seasonal variations, but there isn't anything specific or singular causing it.

Regarding the variability in e-commerce orders, is this something we can expect to see continue, or is there something unusual occurring with your e-commerce customers? Are there new buyers, or how should we understand the variability?

It's difficult to anticipate. We don't receive information from our e-commerce customers regarding their order timing or inventory management. Our priority is to ensure we maintain high service levels during fluctuating demand. We analyze consumption patterns to better understand this aspect and manage our investments by brand to identify opportunities for success. Ultimately, we aim to excel in consumption, increase our market share, and grow alongside the customers who are engaging more frequently in our categories, positioning ourselves to deliver the best service possible regardless of when our customers choose to place orders.

And Mitch, I would also just comment that through our distributor, we don't think this is unique to us, maybe a different size customer to some other larger companies that may not talk about it, but we certainly don't think it's specific to Prestige.

Okay. As you reflect on the Clear Eyes situation and the more than 100 third-party suppliers you have, have you considered bringing any operations in-house for better control? Is that something you've thought about? Also, while the Clear Eyes issue might be an isolated incident, do you believe you need to maintain higher inventory levels moving forward? Not drastically, but should there be an increase in emergency inventory compared to historical levels?

So Mitch, let me start with your comment on the suppliers. Yes, we have well over 100 suppliers. It's really a function of our broad product offering, right? We offer everything from tablets to sterile eye care products and everything in between. We take advantage of our Fleet facility in Lynchburg, and we've brought in a couple of products over the last few years to take advantage of what they do to give us an advantage in the market. Eye care is a unique situation that's evolved, right? Available sterile eye care capacity over the last 10 years has just gotten smaller each year over the 15, 16 years I've been here, I've seen it just decline. So we got to a point where it made sense given our focus on sterile eye care, right? We added TheraTears. We've had meaningful growth on Clear Eyes. We've got a nice International business around sterile eye care. It made sense for us to invest and bring that technology in-house. But for the rest of our portfolio, there's plenty of external available capacity for the things that we need. So there isn't anything else, no other meaningful shoe to drop that we would expect that would drive a change in bringing stuff in-house. I'll let Chris comment on the inventory and service.

Yes, Mitch, certainly, customer service is our #1 priority. So there may be little pockets, as Ron mentioned, where we'll look to increase safety stock for some of the other brands, but nothing material that you'll likely hear us talking about on a call like this.

Okay. Yes, I have a couple of questions on the dental care enthusiasts, but I'll save that for offline.

Our next question comes from the line of Anthony Lebiedzinski with Sidoti.

So I wanted to follow up. I think, Ron, you said that as it relates to Clear Eyes, once the supply improves, you will need to invest more into marketing. So typically, Prestige has spent roughly 13% to 14% of its revenue on A&M. How should we think about that once we hopefully get into fiscal '27, when things are kind of back to normal? Do you think that ratio for A&M will go up? Or how do we think about that going forward?

Yes. So going forward, I didn't mean to imply that we would be spending more as a company, if I did. But we'll get back to looking at reallocating A&M and spending the right amount compared to the opportunity. So spending marketing on Clear Eyes when we can't deliver enough didn't make sense. So it was reallocated to other brands to invest in anything from trying to accelerate NPD or innovation or take advantage of the momentum in the marketplace that's out there. So we'll get back to reevaluating what the right level of A&M versus the expected return on sales going forward. So we'll continue to be disciplined around having the right level of investment.

That's good to hear. And then as it relates to private label competition, are you seeing kind of more of the same? Or has anything changed meaningfully in the products that you guys sell?

Yes, no real change in market share or differences in impact from private label. You may get the private label players making comments that they're seeing share gains in this environment. As a matter of fact, this week, I think there were announcements out on that. But again, they're focused on different spaces than we are, right? Think tablet and analgesics, think about the cold and flu, smoking cessation. So it really isn't impacting us at this point.

Our next question comes from the line of Doug Lane with Water Tower Research.

Did you quantify the amount of that pull forward you think happened with the online retailer into the second quarter from the third quarter?

We discussed the Clear Eyes timing of about $5 million, and most of the remaining increase was due to that retailer order.

Okay. Got it. And then you mentioned in Clear Eyes that third quarter should be better than the second quarter and the fourth quarter should be better than the third quarter. Are we all the way there yet by the end of the year? Are we still going to be catching up in 2027?

By the end of the year, we should be producing at a level where we're kind of already there, right? The timing of how we get that through to retailers and get it #1 on their shelves and then back in their warehouses and then build our safety stock, that will probably flow into fiscal '27 a bit.

To just to add some color to it in a different way. We expect by the end of our fiscal year that all the changes that we've been making in the Clear Eyes supply chain will be implemented and in place. So the two new suppliers will be in place and the new high-speed line at Pillar5 will be in place, and we'll have control and ownership of the facility, Pillar5, at that point as well.

Right. Pillar5 closes in Q3. Does anything change? Or are you already acting like you own it? Or do you have to do more things that we don't know about once you own it?

We have had a partnership with Pillar for several years, and we are deeply involved in their organization, having collaborated even before the ownership change was considered. As we mentioned during the last call when we announced the acquisition, our goal is to focus on the long-term management of this asset. There is a limited supply of sterile eye care, and we believe that aligning the needs of the business with our long-term strategy in this category justifies the acquisition.

Okay. That makes sense. And just one last thing. Have you talked about how you're going to finance the $100 million?

Primarily cash on hand.

I am showing no further questions at this time. I would now like to turn it back to Ronald Lombardi for closing remarks.

Thank you, operator, and thank you to everyone for joining us today. We look forward to providing further updates on our next quarterly call. Have a great morning.

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