ENR
#Good morning.
Yes, <UNK>, I think that's an accurate statement.
Our Outlook continues to be that the category will be down low single digits over time, and let me give you a little background on why.
We don't really anticipate given the research that we do that there'll be any device or demographic trends that would make us think any differently about that projection.
Although some mix shifts have occurred, as an example within the price segment, declining faster than our Outlook, we're still pretty much holding true to that.
Now, I think what you'll find is we're going to stay true to the core strategies we put in place to continue to bring value to the category given that current projection.
And we believe we can do that through both innovation and really driving trade up within the category to higher priced alternatives, given that consumers have a need and a desire for those types of products.
So we're going to continue down that path.
That is working well for us.
Yes.
That's a great question.
I prefer candidly not to speculate on what that would be.
What I can tell you is almost two-thirds of all the category sales were in the premium and performance segment and given what we're seeing over the latest 52 weeks in terms of a shift from the price segment to premium and performance, you can probably do some rough math on your own to come up with a pretty good estimate, but we are confident that the plans we have in place will be able to continue to drive those trends.
And I just want to reiterate, by maintaining our long-term Outlook of low single digit decline in the category, it really speaks to our emphasis and continued focus on cost reduction and driving productivity improvements.
That hasn't changed.
In order for us to win and grow that low single-digit EBITDA that we've communicated previously, we have to continue to find ways to take costs out of the business and continue to operate more effectively, and so that focus has not changed one bit.
Yes.
As we executed our 2013 restructuring project internally we called project transformers, we made several significant changes to our manufacturing footprint.
We reduced our number of manufacturing facilities from 14 down to 7.
As a result, we made a conscious decision to not target days in inventory.
We knew that as our global supply chain adjusted there would be an uptick in days in inventory, and we saw that.
However, days in inventory since we're post the restructuring of our manufacturing footprint, our supply chain has stabilized and as a result, improving days in inventory is definitely a target and a focus for us.
We went from 113 days of inventory as we ended the year at the September quarter and we improved it 6 days ending the 12/31 quarter to 107 days of inventory.
We will continue to make progress on that.
We have not discussed externally a specific target around days in inventory, but it is a key driver that is going to allow us to continue to grow free cash flow on a year-over-year basis.
It really depends.
And we haven't speculated as to how high we would be willing to go.
It would depend upon the deal, the amount of synergies we can get, the cash flow that would generate from the business, so it's all deal dependent.
Thank you, <UNK>.
Yes.
So again, I want to thank everyone for joining us on the call today.
Obviously, a very positive quarter.
As <UNK> alluded to in our prepared remarks and in the Q&A, we do have some tough comps in Q2.
And we feel we've got very strong plans to continue to drive continued value in the category.
And I just want to reiterate, because we've been very consistent from Investor Day, we will squarely remain focused on our three strategic priorities of leading with innovation, driving productivity gains and operating with excellence.
We believe that in doing so, it positions us well to win in the category regardless of the scenario we face.
So we're getting traction behind that.
We will continue to remain focused on that.
And again we appreciate everyone's time today in joining us on the call.
Thank you.
Operator.
