Q4 2020 Earnings Call
[music].
Ladies and gentlemen, thank you for standing by and welcome to the Q4 2020 prestige consumer Health care incorporated earnings Conference call. At this time, all participants are they listen only mode. After the speaker presentation. There will be a question to answer session to ask a question during the session you will.
The press Star one on your telephone please be advised that today's conference is being recorded if you require any further assistance. Please press star zero.
When I like the hand, the conference over to your Speaker today director of Investor Relations, Phil Terpolilli. Sir. Please go ahead.
Thanks, operator, and thank you everyone joining us today.
Speak for all of Us when I say, we hope you and those close to your safe and healthy.
The call with me today around them Bharti, our chairman.
President CEO and Chris tack on our CFO.
On today's call will begin with some topical remarks, given the current crisis.
<unk>.
Either results the fourth quarter fiscal year 20 discuss our approach and initial thoughts in fiscal 2001 and take questions from analysts.
There's a slide presentation, which accompanies todays call can be accessed by visiting for speech consumer health care Dot com clicking on the investors link and then on todays webcast presentation.
Please remember some of the information contained in the presentation. Today include non-GAAP financial measures reconciliations between adjusted and reported financial measures are included in todays earnings release 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 two of the slide presentation accompanying the call.
These are important to review in contemplate it's everyone on the call todays well aware the business environment has changed dramatically over the last quarter. Unfortunately, there's a lot. We don't know in the short term about the duration and impact of the cold at Nike had them.
These items include an uncertain shutdown timeframe for many areas of our economy.
<unk> I'll go over to poor results give a brief recap on our full year fiscal 20 and review our cash flow and liquidity profile.
As a reminder, the information in today's presentation includes adjusted results that are reconciled to the closest got measure in our earnings really.
Well I think to slide six you can see the highlights of our fourth quarter.
<unk> was a strong finish to the year, including revenue up 4.6% on an organic basis.
This performance was led by continued growth in our international segment and are growing E. commerce business as well as a significant lift from consumer spending in March as we believe consumers stocked up as a result of coping 19.
During the fourth quarter, we continue to benefit from our ongoing investments and focus on E. commerce.
R.E. com business screw over 60 per cent in the quarter as we benefited from consumers shifting to online purchasing.
Notably our consumption growth was about seven per cent driven by these factors for the quarter. After previously trending at about 2% prior to March which was consistent with our expectations for the year.
Adjusted gross margin of 59.4% was up 200 basis points versus the prior year, primarily as a result of higher volume and geographic mix.
For Q1, we expect margins similar to prior quarters of about 58% as we expect a more normalized mix.
Adjusted E.T.S. at 82 cents per share was also up meaningfully increasing approximately 14% versus the prior year as we benefited from higher sales growth gross margin favorite ability and a reduction in interest expense and share account.
Free cash flow was 52, and a half million dollars in the quarter and continue to benefit from our industry, leading even margins efficient capital spending and low cash tax rate.
We continue to adhere to a discipline capital allocation approach from this past generation, which I'll discuss a bit later.
<unk> seven in disgust full year results.
For the full your fiscal 20, Oh organic net revenues increased 1.3% versus the prior year, which excludes the impact of foreign currency and the divestiture of our household cleaning segment in the prior year.
Similar to queue for.
Our full year benefited from strong international segment growth, which was up over 15% versus the prior year when excluding foreign exchange.
E. Commerce also grew rapidly increasing approximately 50 per cent for the full fiscal year and now account for approximately 5% of our net sales.
Adjusted EBITDA declined slightly versus the prior year impacted by the divestiture of household cleaning.
The reminder, we fully lots of the comparison impacts of household cleaning beginning in to to a fiscal 20.
Adjusted D.P.S. $2.96 per share increased 6.5% benefiting from our continued efforts to d. lover, and Opportunistically execute share bye-bye.
Now it's time to slide eight to discuss consolidated results in more detail.
Oh, Yeah fiscal 20, net revenues decreased slightly to $963 million, but as mentioned on the prior slide increased 1.3% on an organic basis after excluding foreign currency and the divestiture of household cleaning.
For the full year organic growth was impacted by the effect of retailer inventory reduction primarily in the drunk channel.
Adjusted gross margin, which excludes transition costs associated with our new logistics provider with 58.3% for the full year up 130 basis points versus the prior year, primarily driven by mix associated with strong international gross and the divestiture of household cleaning.
In terms of A.M.P., we came in at 15 per cent of revenue and Q4 and 15.3% for the fiscal year.
Consistent with our strategy, we reinvested gross margin games by Opportunistically investing A.M.P. behind our core brand portfolio and Q. for.
For Q1, we would expect A.M.P. to be below the fiscal 20 per cent of sales.
Cutting plans are being adjusted in response to the current situation, resulting in N.P. spending moving to a future quarters.
Or G.N.A. spending was just over nine per cent for the year up slightly in dollars year over year.
Q1, we would expect G.N.A. to be about $22 million.
Finally, we recorded adjusting earnings per share and fiscal 20 of $2.96, representing an increase of 6.5% versus the prior year, primarily driven by the effects of debt pay down and share repurchase.
We expect to continue to reduce debt outstanding and as a result, we anticipate approximately $22 million of interest expense and Q1.
I'm trying to fly nine to discuss our cash flow and financial position.
Q for we generated 52, and a half million dollars and adjusted free cash flow, which resulted in a full year adjusted free cash flow of $206.8 million.
This represents 2% growth versus the prior year. Despite the sale of the household cleaning business.
We continue to maintain industry, leading free cash flow with fiscal 23 cash flow conversion coming in at 136%.
At March 31st we finish the year with approximately $1.6 billion, a net debt and a leverage ratio of 4.7 times.
During the year, we continued our focus on debt reduction and reduced net debt by $135 million.
We also repurchase approximately $57 million in shares Opportunistically during the year enabled by our strong test generation.
Although we continue to have repurchase authorization capacity, we have to spend to these efforts in favor of focusing on liquidity in the current environment.
In addition, we proactive we both are liquidity position to strengthen our balance sheet ending the year with approximately 95 million.
$10 and cash.
Moving forward given the current operating environment, we intend to maintain a heightened level of cash on hand, as a precautionary measure.
As we look forward, we feel good about our capital positioning for a few reasons first we have leading inconsistent cash flows and will continue to be disciplined around capitol deployment with continued priority around debt paid on.
Second we issued new senior notes in December 2019, and our earliest debt maturity is now January 2024.
The third we have material cushion to our debt covenants, which are detailed in our 10 k.
With that I'll turn it back to run.
Thanks, Chris <unk>.
Let's turn to slide 11 to recap.
Fiscal 20 was a successful you are in many ways falling in large part to the continued execution of our strategy.
First we continue to invest behind or court portfolio, which led to go and categories spend most it sure for many of our leading brands.
But also like to highlight the success and our international segments, which had a great year as we grew many key brands meaningfully including Hydralyte.
Second across generations and free cash flow conversion remain bust in class.
<unk> Hi, later, we generate a 270 million and free cash flow driven by strong at the margins.
Locales taxes.
Finally, or disciplined capital allocation allowed for multiple areas of investment in fiscal 20.
Importantly, we continue to focus on debt reduction, reducing or leverage to within a long term targeted range of three and a half to five times.
We also used roughly one quarter of our from cash flow to Opportunistically, we purchase overstock.
Even at a challenging environment, we deliver excellent results and fiscal 20, and our strategy leads us well positioned perfume for success.
Three pillars strategy as highly adaptable and will be a guide as we approach fiscal 21.
According to slide 12, you can see the ways, we expect to do this.
We believe approve and three pillars strategy in the building blocks shown here position us for success as we navigate this pandemic.
First.
Business continuity plant is robust and critical to executing strategies that <unk> pillars.
We have a diversified leading portfolio, that's a keystrokes and let me economic environment.
Including this one.
Accompany as nimble and were able to adapt quickly and refocus suffered around targeted brands and opportunities will show some real time marketing examples of the shortly.
We are also adapting quickly to the changing retail shopping trends.
Until you are proactive investments and channel opportunities such as in Commerce.
And finally.
<unk> allocation illiquidity or a main critical on this highly volatile environment.
Disciplines capital Allocators, and true to our company discipline.
Let's dive in on.
Each of these in more detail beginning on fly 13.
As mentioned earlier, we continue to prioritize putting our employees first to various proactive measures. We have numerous manufacturing partners, which are all operating in a similar capacity.
As of today is yet to experience and meaningful supply shortages.
Results and all the stock at retail close to the efforts of our operations team and our partners. Despite experience in some reduced capacity from absenteeism and delays and raw material deliver.
We continue to work with the third party suppliers around continuity of supplies, including prioritizing activity to maintain Apple Apple inventory on our leading brands.
Include concentrating skew manufacturing around critical Branson items, finding alternative suppliers as a precaution.
In other measures.
Fortunately.
Even with increased demand experienced in March or inventory remains well positioned as we were able to benefit from the elevator inventory levels. We had maintained during our warehouse transition to a new third party logistics provider, which was completed at the end of March.
Now, let's turn to slide 14.
A number one brands represent over two thirds of ourselves as you can see on the right hand side of the slide and there's a strength in the current environment.
These bands Austin hold a long history with consumers, which we believe positions us for continued to me and that's consumers focus on their health and hygiene more than ever.
What's the leaving position they also get to focus on the goal of driving category growth rather than fighting for show.
This heritage combined with a long term brand building and meaningful innovation and new products continues to differentiate us from other brands and private label.
For example, and Siskel 20 are leading brands continued to drive category gross and the and the majority of them outperform private label.
Yeah.
On the left.
Can see our diversified portfolio participates across various categories addressing a broad range of needs.
This range is a strength.
Diversity ensures our ability to opportunistically allocate resources were consumer insights dictate.
Drive brand building on both the short term and long term.
Especially true now as consumer purchase patterns and trends affected by the pandemic are shifting rapidly.
Let's turn to slide 16 to expand on this.
What the market changing we are seeing consumers change not only what they buy where they shop to the shelter and place orders. This is a unique attribute of the current pandemic, which makes our current environment different from past recessions.
Oh wide ranging portfolio is impacted in many different ways by this.
On the right end of the opportunity spectrum.
Tumors are showing increased interest for pain cough, and cold treatments, along with someone and care products.
Other products shown in the middle a fairly consistent with recent trends, we expect them to be honest affected by current changes in daily living.
On the left we have brands that are now expected to see the lower usage rates as a result of a pandemic, let's consumers reduce time outdoors and vacationing.
So how are we capitalizing on these opportunities.
The focus is to allocate greater investments hi opportunity brands.
Investments will be both by brand and channel. That's we'll discuss on the next two slides.
Well mix and Dramamine are being affected by the current environment or investments will strike a balance between the current headwinds being faced by these brands.
And with long term brand building efforts and potential.
So, let's turn to slide 16 for three examples of this <unk> marketing approach.
Here, we can see marketing efforts on the left include reaching consumers at home through digital and addressable T.D. efforts, having the ability to have monistat shipped to your door rapidly.
A t. brand building strategy is to move share from prescription treatments overtime and these marketing efforts a timely to support this objective.
<unk> in the middle of the slide summers ease with consumer staying at home, we have refocus marketing efforts around homework out and highlight on a recently launched summers Eve after product.
Wow on the right.
The slide is clear eyes.
We've had several new messages from the brand since the pandemic began the most important to us as a digital effort that launched in late April <unk>, all the hospital workers on the front line fighting covert 19th.
We launched this tribute by donating 100000 bottles of clear eyes to hard hit hospitals in New York City.
Each of these are real prime examples of her nimble marketing approach and ability.
Let's turn to slide 17 to discuss changes in retail.
In addition to consumer shifting brand focus as a result of a pandemic consumers are also changing their preferences and where they are shopping.
Beginning in March consumer interesting, E., commerce, ordering and omni channel click and collect shopping accelerated sharply.
Consumers looked to minimize or person to person contact during the pandemic.
As an example in the month of March along we saw an increase of 186% and new visitors browsing prestige products in certain E. commerce retailers.
This resulted in our impressive fourth quarter E. commerce sales growth that Chris highlighted earlier.
Moving ahead, we could see this channel representing as much as 8% or more of our total sales in fiscal 21.
So just like with our brands, we are being nimble with our channel investments.
Are examples shown here a reminder, about quick and easy shipping to a home for Monistat.
The word advertising for B.C. and combo packets to reduce frequency of purchases.
Over the last several years, we've been proactively investing in the emerging E. commerce channel investing behind digital content and expanding distribution to ensure that are trusted brands are easily available for purchase as customers reach research and shop for the healthcare needs and ways.
In summary will rapidly adapting retail and brand plans to an evolving environment and a diversified and leading portfolio brands gives us a great starting point.
Now, let's turn to slight 18.
In fiscal 20, our brand building efforts continue to deliver strong financial results, we finish the year with over 205 million in cash flow and the mid thirties, either at the margin.
As you can see on the chart.
Left we reinvested gross margins gains and to N.P. consistent with our long term strategy.
With the strong strategic positioning because then left with options of how to best allocate the capital to enhance shareholder value.
Going into fiscal 21, this strategy remains consistent and disciplined.
First and foremost we will continue to invest behind our brands, which are aimed at reinforcing long long term connections with consumers regardless of economic environment.
Second we continue to focus on D. leveraging.
Continually evaluate the operating environment and how the best manage our leverage profile at any given time.
Currently we have proactively built cash as Chris discussed and also have significant liquidity available due to lack capital structure.
Number three and four on the page or other capital considerations, which are always contemplated if the first two priorities are satisfied.
Although admittedly challenging given the limited economic environment disability, we will continue to evaluate each of these priorities priorities.
Accents and that long term value for shareholders.
[noise], let's wrap up on slide 20, and recap what we've just discussed.
We have a time tested playbook.
That is set up to navigate this changing and challenging environment.
Regardless of the landscape.
Always focus on ensuring business continuity and we'll continue brand building for the long term.
This is applicable as we think about fiscal 21, but in a very different way compared to prior years.
We've talked a lot about uncertainty today.
We're contemplating a number of factors, how long shelter and place last various economic impacts of the pandemic and many others.
Accordingly.
You're not offering are typical school year financial outlook.
But we do want to offer some insight to our thinking for Q1.
Q1, we are anticipating a reversal of the accelerated consumption trends experienced in March.
So far this quarter, we are seeing consumption declines as shopper stay home.
Partially offsetting these factors were higher retail or orders in April as retailers replenish their stores following the March spike in consumption.
The net effect of all of this is difficult to predict but as of today, we anticipate Q1 revenues of 220 million or more.
We also anticipate E.P.S. 70 cents for more for Q1 as a proactive expense management and costs timing are expected to more than offset the anticipated revenue decline as compared to the prior year.
Meanwhile, we expect to maintain a strong financial profile and continued capital allocation optionality.
Anticipate continuing to leverage our financial profile to drive strong keep free cash flow conversion. Yeah. We'll use this cash to focus on debt reduction lobbying mindful of managing liquidity through each quarter.
By executing the strategy. We believe we are set up for continued success.
That I'll open it up for questions.
[noise] as a reminder to ask a question you will need to press star one on your telephone to withdraw your question press the pound key please stand by while we compiled a cue any roster.
I first question comes from the line Rupesh.
Per week Oppenheimer.
And is open.
Thanks for taking my question. So just I guess, just going back to some of the consumer stocking up activities that you saw in Q. for it sounds like it's it's probably going to be a had went into one do you expect any lingering <unk> post p. one.
In the morning, Pasche, it's really hard to predict what's going to happen.
Past Q1 for US. We're we're in the same boat is is pretty much everybody else's, we try to figure out what will happen in the future.
I think if you go back to what we thought and Q4 and then to the early weeks of Q1 <unk> is that we saw a a pretty significant spike in consumption.
We then sought pale off as people began to stay home and observe their shelter and space and then during that time frame. We saw the retailer ordered pattern pick up a bit in early April as the retailers began to catch up.
To the spike in consumption.
Okay.
<unk> that's helpful. And then just yeah and this is probably another one that's that's maybe difficult dancer. So I'll see you guys have so how about some of these docking had ones in recent years and now you're also hearing about retailers line. They keep safety stock does any thoughts and turns out you know I guess, what the impacts could be from retailers <unk> carrying Mercedes doctrine, you know if you if you check that.
She inventories talking head ones this year.
Yeah, <unk> hard to predict.
Lot of ways that retailers are still trying to catch up with with all that's happened over the last number of weeks, but if you go back to Cisco fiscal <unk> over the course of the year. We did see about two two point disconnect between consumption for us, which was about 2% for the year and then sell it.
Which was up about one per cent class and consumption was was in the high twos during the year.
Fiscal 20.
You know so far and Q1, we've seen a pretty steady level of dollar.
Inventory for the retailers, so it's hard to predict what they'll do going going forward <unk>.
Okay, great. Thank you.
Thank you.
Thank you My next question comes from Stephanie.
<unk> Jefferies. Your line is open.
Hi, good morning, everyone. Thanks for taking our question. The first time, we wanted to unpack was just the N.P. investment certainly then killed by your gross margin <unk>.
Expanding overtime, how to think through how much more opportunity is there and gross margin and therefore, how much opportunity to continue to advance and P. and <unk>.
You talk a little bit about what you're saying and the channel in terms of private label versus Brandon how much are you willing to put A.N.P. on the table.
[laughter] really defend your your branded condition.
So Chris why don't you take the gross margin part of the question and then all follow up with <unk> the private label question.
Morning, [laughter]. So so Q4, it's gross margin obviously.
They come in and pretty higher 59.4% right, we talk about it being roughly split between volume and man.
So we are expecting as we move forward to coupons outlook for that to return to a nor more more normalize level that said, we've always said that on to the extent, we can realize gross margin saving and we intend to reinvest those back into higher levels and A.M.P. within objective of maintaining a mid thirty's even margin so.
That's exactly what we did in in Q. for we spend back against opportunities that we saw it under the current environment and I will continue to look to do that as we move forward.
So stuff in in terms of private label, you know that the first place I'd want to start is you know fiscal 20 was another very successful your for for us.
In terms of continuing to grow our share.
In winning against you know the the majority our competitors weather.
So we ended competitors and the categories, we compete in or private label. So that <unk> continued in fiscal 20, and it's continued into the early stages of she won a fiscal 21 for so.
Even in this highly unusual environment that we've seen in March and April we continue to do well and a successful in the categories that we compete and now there's been some discussion around private label gaining share during the the unique environment.
But again, it's really I think concentrated in the spaces that strategically we avoid so the more commoditizes spaces like taboo habit, whether they handle g.'s x. or a cold medicines or flu medicines, where private label has a different position in a different connection with consumers.
So we come into work everyday thinking about differentiating ourselves against any and all competitors.
Whether it's branded what private label and [noise] do that through our marketing initiatives to new products and innovation and that trend, we expect to continue going forward.
Okay, that's great and one final question just from the E. Commerce.
Margin, an N.P. how to think through your go to market strategy any any differences in bricks and mortar sales person <unk> sales and how you know.
Measure either through dashboard thing K.P. eyes, or how you think about the return on marketing investment in the Dot com environment.
Yeah. So in a lot of ways, we approach E. commerce.
The same way, we we do a traditional brick and mortar which is we listen to the consumers and find out.
How they're thinking about shopping and the kinds of products in the best that they're looking for in the best way to.
Flip them and.
We adapt our marketing.
Vehicles.
Based on that that input. So that's the first part of it and the second is that you know the financial profile of our online businesses pretty consistent with brick and mortar. So although we have different tactics. The overall cost of connect thing in women with consumers is is fairly similar similar for us.
Thank you very helpful.
Thank you stuff.
Thank you are next question comes from Joe out to Bellow of Raymond James Your question. Please.
Hey, guys. Good morning. This is actually Adam on for Joe I Hope, you're all staying safe.
I was kinda curious if you could maybe quantify the impact I know might be difficult at this point just in one q. and that pantry, while you alluded to just looking at the outlook. If if we can break it down at all and then also maybe how is called a 19 impacts the way you do business in terms of Sanitization, a social basically saying what kind of things you doing on that.
<unk>.
So Chris you want to take the.
Sales question, then I'll come back and talk about our business continuity plans, yeah, hi on them. So the way to think about the Q1 outlook to Bridget where are you is we talked about retailer reordering pattern granted they catch up after the March consumption increase that's gonna be around two to three per cent in our estimation.
I got about 1% decline from an F.X. headwind anticipated and then you know be consumption continuing trend negative at approximately high single digits. So I think if you walked out map from the 232 in the prior year, you'll get to the <unk> the downside for the the outlook for Q1.
[noise] so adamant in terms of the impact of code covert 19 in terms of how we do business so back.
On March 13th we we actually moved to a work from home environment for the vast majority of our office based employees.
And that's working working well in terms of our Wensberg facility.
Pulled out expanded sanitation cleaning procedures Ah.
We have social distancing in place where people are keeping six feet or more between each each person in the facility and we've also also put up partitions in in other physical separators to help keep the workforce safe there.
<unk>.
Many of these same procedures have been ruled out by our suppliers.
To ensure that that we have good continuity of the supply chain.
[noise]. Thanks, finally, Chris I appreciate the commentary that I can ask one more I I know you guys touched on a camping on occasion quite a bit I just wanted to reiterate given given the obvious focus on maintaining cash on the bound she'd be constrained conservative would you say the likelihood of emanate has gone down over the past few months back in terms of your appetite quality potential targets or.
Is it something that you would still consider the opportunity was right.
So you know and in the near term without great visibility in terms of what to expect.
Yeah, clearly M.L.A. is going to be on the back burner [noise].
For for the near term as we understand what the business environment, it's going to be like going forward.
Great. Thanks round, good luck, guys and you say so.
Thanks.
Thank you right next question comes from Mitch Pinero of Sturtevant. Your line is okay.
Okay.
Mitch.
Yeah.
I was trying it again.
Okay, let's try that again mature line is open.
There's a need it to you though.
<unk> <unk> good morning.
Can you hear me.
Weekend.
Okay. Good I got a little late I, if I, if I and and asking a question already.
Talked about I I apologize, but in terms of A.N.C. spending.
Is there any change.
Two two to the dollar level, it's two one given the circumstances.
So Chris one or two I took this question.
Sure Yeah mixed so we talked about expecting a and M.P. spend for Q1 below that of the prior year as we look to shift dollars into the future obviously related to koby 19.
Yeah.
And and how you know I mean, how substantial would that be I mean is that we talking a couple of percentage points.
In dollars or good at the larger.
I think a couple of percentage points got a million dollars a is more accurate I remember you know, we're we're actually increasing A.M.P. spend in certain areas like digital in certain products are brand that we think would respond to where it would be an efficient use of our spends nearly example, we like to use is dramamine right.
Folks aren't traveling we've obviously readjusted our plan from an M.P. perspective in the near term an either reallocated those dollars or push them out marketing plan for that brand into the future. So it's all playing into to the numbers for Q1, obviously, that's that's pretty much what we have visibility to her we're offering to today.
Yeah, I think the <unk> and that's the important point on A.M.P. spending that's anticipate or for Q1 is that you know we're in the middle of a of a pivot period right. We're looking at our our marketing plans were figuring out what's best.
And making changes on the fly here, so the level of and P. that that.
We have into one is going to be a function of of this pivot not cutting back spending waiting to see what sales or protecting the bottom line, it's really a adjusting our marketing plans and and getting them going again.
They are thank you.
When when I look at the gross margin I know you have you talked about smoking being a combination nicks and volume benefiting your your fourth quarter.
Given that you're mostly <unk> <unk> I guess, it's mostly yet.
And then.
You know your variable costs.
Type of you know outdoors model if that is that correct.
<unk>.
Yeah, much it's roughly split actually between volume and mix, you're you're right. We do have a variable cost model that we talk about however, we do have some fixed cost that we can leverage right. We have our Lynchburg facility. There are some warehousing concert are largely fixed so that contributed on the volume side and geographic mix you know.
International being of larger per cent of our sales, but also just the brands and international that are really performing a in hydralyte. In fact, two of our largest or two largest brand in Australia. Those two brands in particular have gross margins well above the company average or even the international segments margin. So number of factors that can.
Tribute into the queue for him, but again, we're we're we're calling for it to normalize in Q1 as we sit here today.
Okay, and then I guess this word is when do you anticipate highly your cat.
Likely tomorrow, maybe Monday, the latest but just a couple of days from now they wrap up documentation.
Okay. Thank you very much.
Thank you much.
Yeah.
Thank you again to ask a question. Please press are wanting to touch tone telephone again that star one on your touch tone telephone to ask a question.
Next question comes from the line of Anthony Lozinski of stability. Your line is open.
Yes. Good morning again, thank you for taking the question. So I may have missed system, what was E. commerce penetration for the fourth quarter and for fiscal 20.
Chris you want to comment.
Yeah, So he commas up 60% and Q. for was up 50 per cent five zero in the for the full year.
And at the end of the year it approximate it about 5% of our net sales looks a little bit above what we had been anticipating obviously as we had it into queue for.
Thank you for that and then as far as the International segment, you mentioned that some of the revenue increase came from the timing of orders and shipments as possible for you to quantify the impact of the timing shift.
Chris <unk> Yeah. The reason, we we say that Anthony really is just it's a distributor business and so the orders can be a bit lumpy, which is why when you. When you look comparatively historically on a comparative basis, you'll see a lot of movement, it's it's difficult to predict different difficult to peace out remember that are international business.
It's also benefited somewhat in q. for from from the pandemic. So there's a lot of moving parts.
But generally speaking we feel very good about our international segments ability to grow you know we talk long term about wanting to grow that segment five plus per cent. Obviously this year. They just had an outstanding year for a number of reasons that over 15 per cent.
Gross on a flat tax basis, and so international has been consistent for us and we feel good about the long term growth opportunities where it.
Thank you for that and then you know last question for me is.
Said that you have successfully transition to yourself.
Provide a can you just a reminder.
Expected benefits will be from this new.
Six provider and also how should we think about the benefit from a gross margin perspective as well. Thank you.
<unk> handed actually so I'll I'll take up yeah, I'll take that one Anthony so.
The expected benefit we talked about a two to three or pay bacteria in about $10 million in one time costs and you see those stripped out in our.
Fiscal 20.
One mentioned earlier, we we largely completed to see your and but the expected time, you get a cost savings.
Really doesn't begin to the second half of fiscal or 21 of you really get ramped in terms of deficiencies.
Got to think for that that's the book.
I.
Thank you at this time I like to turn Nicole over to run Lombardi for closing remarks or.
Thank you operator to recap we are in an unprecedented environment, but we we are set up for continued success.
This is enabled by multiple factors, including our portfolio of leading brands financial profile and continued capital allocation Optionality.
However, the largest enabler of our successes all of our employees, which I'd like to recognize for their cordless and continued commitment since the <unk> pandemic began.
So thank you for your continued interest in Penn station, we look forward to update and you in the future have a good day.
Ladies and gentlemen is concludes today's conference call. Thank you for participating you mean now disconnect.
[laughter].
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