CHD Q4 2017 Earnings Call

Kevin Grundy - Jefferies LLC: Thanks. Kevin Grundy with Jefferies. I wanted to start, Matt, with your take on the pricing environment. There's been a lot of discussion on it in the marketplace. We've had a lot of disappointing results from some of your peers. Your quarter was actually quite good in that respect. So, a couple of questions related to that. How are the pricing discussions going? I understand that you guys often don't lead in terms of when pricing is taken in the industry. But I guess what investors are wrestling with, has something changed here within the construct of private label, within what's going on with Walmart and Amazon. Is there less ability to take pricing? Do brands seem to matter less? Is that what's causing some of the perhaps reluctance to take pricing at this point? And then, maybe you could just sort of wrap into that, how much pricing, if any, is baked into your 3% guidance for fiscal 2018. Thanks. Matthew T. Farrell - Church & Dwight Co., Inc.: I'll try to remember your six questions, so I can get them in order. Well, for starters, you've heard Rick comment about the trend in price, if you look at our organic number, so there was a big price in Q2, less in Q3, less in Q4. So, the trend is favorable. Second thing is commodities. When you have that kind of commodity pressure, that should tamper everyone's appetite to drop price and to compete on price. A third thing I would say is that generally when it comes to price, you really need to have a pretty significant position in a category. So, for baking soda, we have a 75% share, condoms 70% share, those you might expect, you might be able to take some price. But generally, you need the story behind it. For condoms, it would have to be latex cost. You get the idea. So, if you look at us, I said earlier on that we don't have as much exposure to private label. On a weighted average basis, we're around 10% to 11%. So, we don't have the same story as others. And I'll ask Lou if he wants to comment about any conversations we're getting from our retail partners. Louis H. Tursi, Jr. - Church & Dwight Co., Inc.: Yeah. Kevin, what I would say is the environment really hasn't changed all that much. It's never easy to take price in any year. I would start by saying that. I would agree with everything that Matt said that sequentially between Q2, Q3 and Q4, the promotional environment has gotten better. For all the reasons Matt said, we're expecting, in 2018, nothing much to change. As far as the promotional environment goes, I would say it's still high, right. It's not low. It's still high. But sequentially, it's gotten a little bit better. And with the commodity cost going up, it should temper the situation and kind of calm it down a little bit. Richard A. Dierker - Church & Dwight Co., Inc.: Yeah. The only thing I'd add is from the outlook perspective, it's largely volume driven in terms of organic growth. Matthew T. Farrell - Church & Dwight Co., Inc.: Okay. Jason? Jason M. Gere - KeyBanc Capital Markets, Inc.: Thanks. Maybe talking on the gross margin a little bit, the confidence you have in the flat gross margin outlook. So, I know we've talked about – maybe you talk about where you're locked into some of your commodity costs, the Good to Great program. And then, is pricing – kind of dovetailing off of Kevin's question, is that still an option if commodity costs still run a little bit higher? So, just looking at the HPC landscape and the confidence you have that flat is the right number. Matthew T. Farrell - Church & Dwight Co., Inc.: Well, I'm going to let Rick – the two Ricks comment on that. But I'll begin by saying that we have a very robust Good to Great program. So, our continuous improvement program, we're already working on 2019, and we could tell you what programs we have in 2019. Sometimes when you're debottlenecking things, you have to do one thing before you do the next. So, we know going into the year that we have things to offset commodity increases. The second thing is, yeah, we do have a hedging program, and I can ask Rick to comment on that. Richard A. Dierker - Church & Dwight Co., Inc.: Yeah. From a gross margin perspective, we're about 50% hedged on our key commodities. We have seven of them that we track all the time. I walked you through some of the movements in key commodities. But the other tailwind we have is some of the mix is, I think, going our way with – as the personal care business has continued to improve over time. So, that's going to help. I'll let Rick opine on the G2G program, but we've had some great incremental steps in our productivity program. Matthew T. Farrell - Church & Dwight Co., Inc.: Okay. Rick, maybe you can comment on opportunities in the supply chain. Rick Spann - Church & Dwight Co., Inc.: Yeah, sure. So, we are certainly renewing our focus on the Good to Great program. We are exploring areas that – where we felt as though the pipeline had gone dry. But now with some changes in our focus, we're able to dig into new areas to increase our delivery on Good to Great. So, as Matt said, the pipeline, we're looking at a pipeline through 2019, and of course, focusing this year on bringing home a good delivery of savings in 2018. Matthew T. Farrell - Church & Dwight Co., Inc.: Okay. Bill? William B. Chappell - SunTrust Robinson Humphrey, Inc.: Yeah. Bill Chappell, SunTrust. I had two questions. One on the International, just maybe a little more color – I don't know what the old Evergreen Model was for International, but maybe you didn't change your overall model. So, maybe help me understand where you come up with 6% from developing versus developed and then how does that affect. Is that assuming that the U.S. Consumer – maybe is it slower than it used to be over the long-term? And then, the second question just on new products. I guess in the past, the presentations have been much more focused on a pretty robust big new products, everything from the CLUMP & SEAL to Oxi detergent to what have you. This seems to be a year of maybe more smaller innovation. Is that the right way to look at it, where you're putting more of the marketing behind just kind of the brands and categories versus big new innovation? Matthew T. Farrell - Church & Dwight Co., Inc.: Okay. I'll comment on the Evergreen Model. I'll have Steve and Britta comment on both International and the new products. The Evergreen Model once upon a time was 3% to 4%, if you went back 10 years. And that, a couple of years ago, became 3%. So, that was Evergreen Model 1.0. So, we're a lot more granular now with respect to how we're going to grow in the future. And we have the luxury of having an International business growing 6% and a more balanced animal productivity business that can grow 5%. That takes a lot of the pressure off the U.S. business. So, that's why the way to think about it is U.S. is 2%, International 6% and Specialty Products is 5%. I'll let Steve comment further on his confidence in the 6%. Steven P. Cugine - Church & Dwight Co., Inc.: Well, I'm certainly very confident in the 6%. I made several mention of that. But I think back to Matt's point, they were banging around that 4%, 4%-plus over time, and I think that simply because the U.S. represented such an opportunity and was growing much faster. And so, all the time and attention largely went to the Domestic business. Not until we really changed the strategy, did we say, jeez, we really think we can really fundamentally change our participation in the International marketplace and really get behind very strong growth. And we wanted to prove that, one, to ourselves first that we had strategies that we could rely on, depend on, and then build enough scale that really is material for the company. So, I think we've done that. To your question in terms of – certainly emerging markets are going to play a much bigger role in driving growth. Our Asia-Pac business will be growing very strong, we expect that, for next year and beyond. Certainly, the developed markets, the traditional markets, Europe for example is not going to grow nearly as strong as – whether it be any of our LatAm businesses or Asia-Pacific businesses. So, it is going to be weighted that way. Matthew T. Farrell - Church & Dwight Co., Inc.: Okay. Now, back to your question about new products, the one thing you got to keep in mind is go back to what we said. So, SLIDE was a fabulous product for us in 2017 and took share. So, we're going to ride that even harder next year. And you were talking about laundry detergent. We are rocking in Pods. So, what happened in Pods the last two quarters, there were 3% growth. We're growing double-digit in Pods, and we have a lot of runway to go there. So, we had some new products in 2017 in both the litter and the detergent, and we see a lot of good things ahead for us in both those categories. Britta, do you have anything to add on the new products? Britta Bomhard - Church & Dwight Co., Inc.: Well, I definitely want to add something. So, mea culpa, normally at this point, we're showing you the TV commercials of the new product, and that's maybe why you have the impression that we are not giving it the same full support, mea culpa, because we haven't got them ready yet. So, what you will see soon is exciting news and TV commercials for the new product, which I hope will reinforce your confidence that we give it full support, we're very excited. Scott Druker - Church & Dwight Co., Inc.: Yeah... Britta Bomhard - Church & Dwight Co., Inc.: ODOR BLASTERS will be a blast. Scott Druker - Church & Dwight Co., Inc.: I'd like to build too. So, I wouldn't look at it the kind of the way you worded it. I would look at it more this way. Every once in a while, you get surprised with an innovation. SLIDE would be one. So, now we're expanding the distribution of SLIDE year two. We launched ODOR BLASTERS in the laundry detergent last year and didn't really fully capitalize on how big of an idea that was. Batiste is a growing monster, and we have a lot of distribution to continue to gain. So, those are examples that I would say there's a lot of opportunity through the innovation that we've launched on how we can expand that moving forward. Matthew T. Farrell - Church & Dwight Co., Inc.: Okay. Joe (01:02:07)?

Unknown Speaker: Thanks, Matt. So, both you and Rick mentioned earlier today that ex tax, you guys would be growing the top line 3% organic and EPS 9%. I guess the delta in terms of the investments that you're investing back in the business is about $0.10. So, A, why aren't we seeing faster growth this year? I know there's a lag time between those investments and faster growth. Or B, is it that you have to reinvest that $0.10 every year going forward to still get that 3% top line? Thanks. Matthew T. Farrell - Church & Dwight Co., Inc.: The way you should look at that is – and if you're listening today, we have a lot of opportunities here to reinvest. So, you heard about International and you heard about digital. We're maintaining our marketing spend at 12%. It would naturally be lower because Waterpik has a much lower spend. You heard about animal productivity and our expansion there. So, that spend is a permanent spend. So that's going to help fuel us in the future. And in a way you answered your question, Jo, and that it takes a little bit of time, but healthy companies can approach the tax cut very differently than others. So it gives you degrees of freedom and start looking ahead not to 2018, but 2019 and 2020, and that is how we're looking at it. And if you listen to the things I just described where we can put the money, we will make the right choices to sustain our model going forward. Richard A. Dierker - Church & Dwight Co., Inc.: The analogy I use sometimes is M&A. And sometimes people who have a base business is going backwards has to do a bad deal, that's a reach for something. And so, that's never been the case here. Our business is performing very well, we just had a great quarter, great end of the year. And those are the investments from the same concept as we want to make sure the algorithm is bulletproof 10 years later. Matthew T. Farrell - Church & Dwight Co., Inc.: Okay. Steve? Steve Powers - Deutsche Bank Securities, Inc.: Yeah. So, I mean to build on that though, should we be thinking about this as an – this extra investment in 2018, is that insurance policy against 2019/2020 and beyond or should we expect a return on this investments such that we get an acceleration of the algorithm in 2019/2020, question one. Question two is, free cash flow conversion expectation for next year, that'd be helpful. And question three for Lou is if the categories are growing, I think it was 2.7%, 3%, you're growing with those categories presumably maybe even a little bit faster than at the shelf, but you're also getting distribution gains, why is the call 3% and not better. Those are my three. Thanks. Matthew T. Farrell - Church & Dwight Co., Inc.: Okay. If you look at our history, this is not a company you want to bet against. So we deliver on our commitments. And our commitments to our shareholders have been that we're going to drive that Evergreen model year after-year-after-year. So, we're going to make investments this year we're going accelerate investments that we might have done over maybe the next two years to three years. We're not prepared today to say suddenly we're changing our model and now we're going to have much higher top line and bottom line. The people who invest in this company are taking a five-year view and they have confidence that we can nail that for the next five years, and that's why they invest in us. Richard A. Dierker - Church & Dwight Co., Inc.: Yeah. The other comment I'd add to that is, we always measure ourselves versus our peer group as well. So ex-tax reform, if we're around 9% EPS growth, then the peer group's 4.5%. If post-tax reform we're 16% to 18%, the peer group is 6.5%, 7%. So, we feel very happy and very satisfied with where we're at on that sliding scale. Your free cash flow conversion question, on average, we've averaged around 120% free cash flow conversion. That will dip down because of the new tax law, right. Cash tax rate and book rate converge over time. So, if I was doing a model, I'd probably model it around 110%. Louis H. Tursi, Jr. - Church & Dwight Co., Inc.: On the shelf, I really go and doing this for 14 years. I think hopefully you will agree that we live by the commitment almost like the Eagles, where we're the underdogs and we like to deliver. Building on what Matt said, there is – you'd never hear me talk about destocking, you never hear me talk about hurricanes, you never hear me bring up anything like that. We are consistent. We put a number out there that we believe we can hit under all conditions and we deliver it. Matthew T. Farrell - Church & Dwight Co., Inc.: Okay. Hey, Caroline. Caroline Levy - Macquarie Capital (USA), Inc.: Hi. Just thinking through your margin, what is the impact of international and the animal feed growing faster than your base business? Number one. Richard A. Dierker - Church & Dwight Co., Inc.: Yeah. Well, the good news is over time those gross margins are converging on actually the company gross margin. So it's not that different for international to the corporate gross margin. The productivity business – animal productivity business does have a little bit lower gross margin, but some of those recent deals we've done have margins in the 60s and 70s, right. And so those are really the fast growing business as well. So, I'd say, minimal impact overall of those two divisions growing faster. Caroline Levy - Macquarie Capital (USA), Inc.: Thank you. And if I just could ask on Waterpik, how much of the business is the sort of one-time purchase of the equipment? And how much is recurring service sort of replacement blade idea? And how do you see that changing over time? Richard A. Dierker - Church & Dwight Co., Inc.: You're talking about CapEx? Caroline Levy - Macquarie Capital (USA), Inc.: No, I'm talking about the consumer purchase, the blade and razor idea? Are you with Waterpik selling... Steven P. Cugine - Church & Dwight Co., Inc.: Today, 100% of that business is just the equipment. The example that I showed on the screen, the whitening one, and maybe Britta wants to talk a little bit about that, that is the first entrance into like a refillable type of scenario. Britta Bomhard - Church & Dwight Co., Inc.: Yeah. So we're learning lots about Waterpik. And I think we would struggle with exactly the questions you have. So, actually different households act differently. We have a few people, maybe some of them in the room. They buy it once, and that's it. But we obviously also have a lot of dedicated families where we can see the first family member has one and then they actually extend it over the family. So if you look at households, there is repeat purchase. And then of those people who actually get into the habit of using it, we also see that people renew the models. There is a constant upgraded improvement, and also we are branching out into areas, which you might have seen the latest models are extremely Silicon Allegan. There's something like bathroom aesthetics. So people buy those, or we are now launching a model, which is a travel model for those people who cannot be without that fresh and clean feeling. So, there's lots of opportunities to either extend into more households. Household penetration currently is only around 16%, electric toothbrushes is around 40%, so huge household penetration opportunity. Secondly, more devices per household; thirdly upgrades per household; and then as I said fourthly, this is early days. My expectation, I have some background in razors and blades is that the first product we launch will not be the success on the replenishing model, but over time, we will get it right, and then life gets really exciting. Caroline Levy - Macquarie Capital (USA), Inc.: My last question is most important, can you scrape our bodies the way you do the chickens and figure out how to give us the right probiotic. Matthew T. Farrell - Church & Dwight Co., Inc.: I'm sure somebody is working on that, okay. Yeah. Over here.

Unknown Speaker: Thanks. I have a question on your probiotic or vitamin business. You guys put a slide up there where you show that you've lost share and it's the first time in the last few years. So could you drill down a little bit more on what are the key drivers of that share loss, the competitive environment? And then what's your outlook for that business this year? And is your goal to stabilize share and how do you expect to accomplish that? Is it through innovation, stepped up spending, promos for instance behind that business. Matthew T. Farrell - Church & Dwight Co., Inc.: Yes. You're talking about the gummy vitamin business.

Unknown Speaker: Yeah. Matthew T. Farrell - Church & Dwight Co., Inc.: Yeah. So, let me just start, I'm going to hand it over to Britta. The way to think about that is that the category continues to grow double digit. So although we may not be growing at double digit, our consumption continues to grow. So, the business continues to grow. And when we bought that business, it had six competitors, today it has 30. So, there are a lot of people that are piling in there. So it's a growing category, grows double digit, we continue to grow. I think what will happen over time frankly is that there will be a shakeout, and it's not going to happen this year or the next year, but generally retailers can sustain that many brands on the shelf. Britta, you can add that? Britta Bomhard - Church & Dwight Co., Inc.: Yeah. So, building on that what you saw was AOC share Nielsen. Nielsen in this category only covers 70% of the market. I just talked about how much and that we have market dominance on Amazon. So actually if you put those together, our share picture would be much more positive, first of all. Second, we do have innovations, and third, we are absolutely confident we will grow that. Matthew T. Farrell - Church & Dwight Co., Inc.: Okay. Over here, Peg (01:11:23). Rupesh Parikh - Oppenheimer & Co., Inc.: Thank you. Rupesh Parikh, Oppenheimer. So, maybe just going back to the international segment, I was curious, clearly, you guys are doing well with Amazon in the domestic segment. Are you able to leverage your Amazon relationship and maybe some of the other retail partners as you grow internationally? Steven P. Cugine - Church & Dwight Co., Inc.: Yeah, I would say that we're doing just that, Actually both in Canada and Europe, where Amazon is making significant investments. And we're taking the learnings that the domestic team has and applying them in our international markets. I would put Costco in that category as well – strong, global, retailer, and we're very successful with them in many parts of the world.

Unknown Speaker: And then if I could just go into the slide before in your online sales growth. I think your online sales are now 5% of your sales. Is your online penetration continues to increase, are you seeing any impact on your gross margins? Richard A. Dierker - Church & Dwight Co., Inc.: Yeah. The good news is across the portfolio largely gross margins online and in bricks-and-mortars are very similar. So, no, we're not. Matthew T. Farrell - Church & Dwight Co., Inc.: Okay. This way, Peg (01:12:30). Olivia, right there.

Unknown Speaker: Olivia. Matthew T. Farrell - Church & Dwight Co., Inc.: Yeah.

Olivia Tong - Bank of America Merrill Lynch: Yeah. Thanks. I was wondering if you can talk a little bit about the latest and greatest in the laundry category. And then also in terms of 2018, can we talk about the component of volume versus price mix? And then just lastly in terms of M&A, you talked about gross margin and the importance of that, but both Waterpik and vitamins were gross margin dilutive. So, can you marry some of the comments around M&A and the importance of gross margin? Thank you. Matthew T. Farrell - Church & Dwight Co., Inc.: Yeah. You started off with the laundry category. So, the laundry category in the fourth quarter was flattish. It was less promotional frankly sequentially. So, that's all good news. If you look at the brands in the categories that are doing really well, one would be ARM & HAMMER. So, we've grown – no surprise, ARM & HAMMER grew in the fourth quarter and also on a full-year basis. So, that is our flagship brand in detergent. Within the category deep value was (01:13:33) struggling. So, that would be brands like our brand Xtra, Sun and Purex. So, all three of those brands lost share last year. So, that's – so Xtra is a leaky bucket for us, but the combination of our three brands ARM & HAMMER, OXICLEAN and Xtra, we grew share in – I think we're up 50 basis points or 60 basis points of share all in, in the laundry category. And Pods, I mentioned earlier, I said Pods has slowed down quite a bit in last two quarters. We continue to grow double digit. Richard A. Dierker - Church & Dwight Co., Inc.: And in terms of price mix and volume for the organic call (74:12), I kind of touched on that before, it's largely volume-based. I'm not going to go into too much more detail, but it's largely volume-based. We probably have some positive mix offsetting any price as personal care continues to do well. And then, I think your third question was, was it gross margin with acquisitions, with M&A?

Olivia Tong - Bank of America Merrill Lynch: (01:14:30-01:14:39) Richard A. Dierker - Church & Dwight Co., Inc.: Just, you know, our aspiration to gross margin accretion from every M&A deal we do, right. That's definitely the goal. Waterpik is, I'd say largely neutral to gross margin. We think over time, right, we said when we made that announcement in August that we're going to spend around $10 million in 2018 to get $10 million of synergies in 2019. So, I'd expect in 2019 for some of the gross margin to be a little bit more accretive for Waterpik. So, remember just like the Avid deal, when we did, vitamins, when we bought the business, it was a 38% gross margin, and we got up to 45% over two years, and that was part of Matt's slide on how we expand gross margin and just the run way for productivity, so. Scott Druker - Church & Dwight Co., Inc.: And the only thing I would add too from a retailer shelf standpoint, as powder continues to decline, the powder shelf space will continue to decline. And liquid and unit dose is doing well. So you'll see the powder space will move to unit dose and liquid. Matthew T. Farrell - Church & Dwight Co., Inc.: Okay. Couple more, over here, Peg (01:15:43).

Jonathan Feeney - Consumer Edge Research LLC: Thanks. Jonathan Feeney, Consumer Edge. Walmart's made a lot of noise about a lot of categories about on-time and in-full, how they're managing their logistics. Could you comment maybe about logistics broadly for 2018, those cost, and any particular categories you've had to think differently about deliveries maybe extra expense, and maybe why you don't seem to be as impacted as some others? I know Clorox, it was pretty big impact. They weren't able to get a lot of product to market. Why are you able to succeed so much better and presumably as you're talking about 2018 continue to do that? Thank you. Matthew T. Farrell - Church & Dwight Co., Inc.: Yeah, well, I'll say a few words and if there's anything Rick wants to add, he can. Yeah, as far as trucking and the shortage of truckers, that's pretty much common knowledge. So, we got out ahead of that in November, and we worked with our carrier partners to ensure that we were going to have trucks available and be able to keep up our fabulous record on on-time performance. And we would expect to do that again in 2018 with our transportation partners. (01:16:58) to add to that?

Unknown Speaker: Yeah. The only thing I would add, Matt, is that, we have over 100 carriers that we work with, but 10 of those deliver 80% of our product, of our volume. And so, we were able to partner very closely with those 10 and we've been able to ensure that we had adequate supply of containers and drivers, so we've been ahead of the curve there, as Matt said. Matthew T. Farrell - Church & Dwight Co., Inc.: Okay. Thank you. Jason? Jason English - Goldman Sachs & Co. LLC: Thank you. Jason English, Goldman Sachs. Congratulations on a good quarter. I had a couple of questions, maybe the first for Britta or Lou, I'm not sure which. Personal care had a bit of a tough year, but finished on a really strong note, can you give us some of the underlying drivers of what drove the acceleration of fourth quarter and lay out maybe where your expectations are as we head into the new year? Britta Bomhard - Church & Dwight Co., Inc.: Well, if you ask me, of course, it's great advertising. Matthew T. Farrell - Church & Dwight Co., Inc.: That's right. Britta Bomhard - Church & Dwight Co., Inc.: No. I think that we did do – so, yeah, absolutely. I think one of the things we're finding is, when we talked about category growth early as well, there's, a, some of our categories like condoms where we talked for long time, young people are, with absolute number declining, are having less sex, we heard all about that I think several times, and they're moving online, right. So, these are things which are difficult to scale. I think we have great campaigns in place now. Same for vitamins, I think we've seen a clear up-tick on our vitamin campaign, Vitamin Better. So, I would say we are driving those sales, particularly in the later quarter and we've also put some investments behind it. Richard A. Dierker - Church & Dwight Co., Inc.: Just to echo what Britta said, it was really broad-based in the personal care business, it was across many different brands. So, just a good combination of innovation over the long-term and great advertising. Matthew T. Farrell - Church & Dwight Co., Inc.: You had a second one? Jason English - Goldman Sachs & Co. LLC: I do. I want to come back and try to beat the gross margin horse again. First, can you help us maybe unpack the fourth quarter a bit? It was pretty strong, your 60 basis point full-year commodity drag I think suggests maybe around 140 basis point drag in the fourth quarter, is that kind of right and do you expect something similar to next year? And then the last couple of quarters, not the fourth quarter, because you know the detail, I know M&A was a positive 100 bps contribution third quarter, plus 70 bps in the second quarter, what if anything did it add in the fourth, and are we looking for a similar sort of contribution to help us sort of bridge our way to flat in the face of, what looks like it's going to be a fairly onerous commodity environment next year? Richard A. Dierker - Church & Dwight Co., Inc.: Yeah, lot of details in there. I'd say in general in Q4, I think we had around 70 basis points help from acquisitions offset by maybe price mix of minus 30 basis points, minus commodities of, not 140 basis points, but maybe 40 basis points or 50 basis points, and then positives from price mix, I mean mix really. You're right, we've had some benefit in 2017 from M&A on the gross margin line, and conversely, we've had some negative help from the SG&A line for these same acquisitions. So, I think it's kind of neutral on an operating margin basis. In 2018, we expect 0 to 10 basis points from M&A. So, it is not a tailwind in 2018. What I talked about earlier was personal care, the fact that we've hedged, the fact that we have a great productivity program, so those are kind of what's going on. Matthew T. Farrell - Church & Dwight Co., Inc.: Okay. Peg (01:20:34)

Andrea F. Teixeira - JPMorgan Securities LLC: Thank you. Andrea Teixeira from JPMorgan. So I wanted to just go back to Jason's question, as you look into outlook for 2018, you mentioned like M&A would not be a tailwind, but I wanted to basically if you can put it in as a ranking, let's say, you mentioned that the mix International wouldn't affect you that much. So maybe like you're going to be investing more in innovation this coming year or you're seeing more of the raw materials had rolling over into 2018. So, we're going to feel more of the impact of the raw materials into 2018. So if you can kind of help us elaborate or on an EBITDA basis you actually would see margins expand, so excluding the non-cash charges? And the second question will be on sexual health, I think she alluded to improving trends, but if you can comment on the 3%, if you're assuming market share gains, market share will actually improve on a total channel basis when you include in also Internet. Thank you. Richard A. Dierker - Church & Dwight Co., Inc.: And maybe I'll take the gross margin, and you could take the revenue. Matthew T. Farrell - Church & Dwight Co., Inc.: Maybe I'll do the sexual health one. And you can think about that extended gross margin multifaceted question. So, as far as sexual health goes, so you probably heard us talk about in previous calls that people are having less sex. And also there is also prevalence of other alternatives. So for example the IUDs, Plan B et cetera. So, all of that is contributing to the category. Another thing I would point out is demographics. So, if you look at the 18 to 24 year old population today versus where it was, say, four, five years ago, it's smaller and that's not going to turn around till 2021. So, there is lots of things that are influencing the sales of condoms in the United States, but we have 70% share, so we certainly like our chances in the future and we're in it for the long term. And Britta, do you have anything to add to them? Britta Bomhard - Church & Dwight Co., Inc.: I just want to add, I think actually our toy business is going very well. So, those people who are having sex are having more fun. Richard A. Dierker - Church & Dwight Co., Inc.: Yeah. And then... Matthew T. Farrell - Church & Dwight Co., Inc.: Hey, did I give you enough time, Rick? Richard A. Dierker - Church & Dwight Co., Inc.: Yeah. A lot of focus on gross margin, I guess, right. In the industry, there is a lot of pressure on gross margins, so I get the question, right. I would have said back in August, if I gave you a gross margin outlook, it would have been positive 30 basis points to 40 basis points. And so, we're well positioned and a lot of those things are structural, right. A lot of the G2G productivity programs we've had in place for years now, that are coming to fruition now. We were hedged last year about 50%, we're hedged this year about 50%. There is no turnover that's happening on resin per se that's causing us any flux.

Andrea F. Teixeira - JPMorgan Securities LLC: (01:23:32) Richard A. Dierker - Church & Dwight Co., Inc.: Yeah. No, it's a fair point that if it was that material, then yes, that would happen. But resins, I think it sometimes is overblown for Church & Dwight, how material it is. It's not like a Clorox in the Glad trash bag business. We have resin in laundry bottles, yeah we do, but it's not as exposed that I think we could ask about it. So, it's one of the seven, it's probably one of the top four, but it's not the number one. So, I don't know if there is any other questions besides that, but really, and we have a lot of confidence in 2018 margin because of the productivity programs that we've done about for a year or two, because of the personal care mix coming. We still launch accretive new products, we haven't changed that. We still aim to launch accretive new products with innovation, right, SLIDE is a great example, Clump & Seal is a great example. We're moving up the litter category, units aren't really going up, but the price premium for the consumer is. Matthew T. Farrell - Church & Dwight Co., Inc.: Okay. So, we've been at this for a good while now. Of course, we only have the room for so long. I just want to thank everybody for coming today. The team that you see up here is representative of the kind of talent that we have at the Church & Dwight, and we are very confident in our future. And I think you would all have to agree that what we're calling for 2016 is head and shoulders over our peer group. Thanks for coming.