Phibro Animal Health Corporation Reports First Quarter Results, Updates Financial Guidance
Highlights for the three months ended
-
Net sales of
$260.4 million , an increase of$29.1 million , or 13% -
Net income of
$7.0 million , an increase of$15.0 million -
Diluted income per share of
$0.17 , an increase of$0.37 -
Adjusted EBITDA of
$30.7 million , an increase of$12.0 million , or 64% -
Adjusted net income of
$14.1 million , an increase of$8.6 million -
Adjusted diluted EPS of
$0.35 , an increase of$0.21
We have updated our fiscal year 2025 guidance, which includes:
-
Net sales of
$1.05 billion to$1.10 billion -
Adjusted EBITDA of
$124 million to$132 million
Our guidance is on a standalone basis without giving effect to the acquisition of Zoetis’ Medicated Feed Additive portfolio.
COMMENTARY
“Our results this quarter reflect strong performance across the board, with impressive top- and bottom-line growth that demonstrates we’re operating at full strength. Our sustained, above-market growth in the MFAs and other category reaffirms our belief that we’re the right home for the ex-Zoetis MFA business. The 64% increase in Adjusted EBITDA highlights the strong performance in our Vaccines business and the recovery in our Mineral Nutrition and Performance Products businesses. We’re pleased to achieve this growth even while focusing on key areas to support our acquisition and pursue our Phibro Forward income growth initiative. We’re well-positioned for continued success as we integrate and drive value from our new assets,” said
Jack continued, “I would also like to take this opportunity to thank the many Phibro employees who have worked tirelessly over the last few months to prepare for a smooth-as-possible transition for the ex-Zoetis MFA business as well as welcome our new colleagues who have joined us with the closing of the acquisition. We see an extremely bright future for the new Phibro, as we are well positioned to grow our MFAs & other category and are now at a much more significant size and scale overall which we intend to leverage for the benefit of all of our segments. This investment will enhance, diversify and broaden our portfolio globally and help us continue to deliver value to our customers and to our shareholders. To that end, as we are carefully curating our pipeline, we have made the decision to discontinue the atopic dermatitis project as it did not meet our stage gate target requirements. However, we remain committed to our investment in the companion animal space, as we continue to progress in our other pipeline projects and seek out new strategic opportunities.”
QUARTERLY RESULTS
Net sales
Net sales of
Net sales of
Net sales of nutritional specialty products increased
Net sales of vaccines increased
Mineral Nutrition
Net sales of
Performance Products
Net sales of
Gross profit
Gross profit of
Selling, general and administrative expenses
Selling, general and administrative expenses (“SG&A”) of
Animal Health SG&A increased
Interest expense, net
Interest expense, net of
Foreign currency losses, net
Foreign currency losses, net for the three months ended
Provision (benefit) for income taxes
The provision for income taxes was
The benefit for income taxes during the three months ended
Net income (loss)
Net income of
Adjusted EBITDA
Adjusted EBITDA of
Adjusted provision for income taxes
The adjusted effective income tax rates for the three months ended
Adjusted net income
Adjusted net income of
Adjusted diluted earnings per share
Adjusted diluted earnings per share was
BALANCE SHEET AND CASH FLOWS
-
Free cash flow was
$40.7 million for the twelve months endedSeptember 30, 2024 . (Free cash flow equals cash flow from operating activities less capital expenditures.) -
3.9x gross leverage ratio as of
September 30, 2024 $477.1 million total debt$123.2 million Adjusted EBITDA for the twelve months endedSeptember 30, 2024
-
Cash and short-term investments of
$89.8 million as ofSeptember 30, 2024
FISCAL YEAR 2025 FINANCIAL GUIDANCE
Our updated fiscal year 2025 financial guidance is as shown below. Our guidance is on a standalone basis without giving effect to the acquisition of Zoetis’ Medicated Feed Additive portfolio. Year-over-year percentages are calculated using the midpoint of the guidance ranges.
-
Net sales of
$1.05 billion to$1.10 billion , 6% growth -
Net income of
$36 million to$42 million -
Diluted EPS of
$0.89 to$1.04 -
Adjusted EBITDA of
$124 million to$132 million , 15% growth -
Adjusted net income of
$55 million to$60 million , 18% growth -
Adjusted diluted EPS of
$1.34 to$1.48 , 18% growth - Adjusted effective tax rate of 24% to 26%
Guidance for GAAP measures assumes no additional foreign exchange (gains) losses for the year ending
Our preliminary estimates for the Zoetis portfolio for the eight months in fiscal year 2025 include short-term impacts you would expect during an integration and are as follows:
-
Net Sales of approximately$200 million - Adjusted EBITDA margin of approximately 20%
-
Adjusted EPS impact of approximately
$0.25 (inclusive of incremental interest expense) - Negative GAAP EPS impact driven by expected purchase price accounting on cost of goods sold and one-time deal costs
WEBCAST & CONFERENCE CALL DETAILS
Date: |
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Time: |
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Location: |
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+1 (888) 330-2022 |
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International Toll: |
+1 (365) 977-0051 |
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Conference ID: |
3927884 |
NOTE: To join this conference call, all participants will be required to provide the Conference ID number.
A replay of the webcast will be archived and made available on Phibro’s website.
DISCLOSURE NOTICES
Forward-Looking Statements: This communication contains forward-looking statements that are subject to risks and uncertainties, including with respect to any future debt and leverage levels. All statements other than statements of historical or current fact included in this report are forward-looking statements. Forward-looking statements discuss our current expectations and projections relating to our financial condition, results of operations, plans, objectives, future performance and business. You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. These statements may include words such as “aim,” “anticipate,” “believe,” “estimate,” “expect,” “forecast,” “outlook,” “potential,” “project,” “projection,” “plan,” “intend,” “seek,” “may,” “could,” “would,” “will,” “should,” “can,” “can have,” “likely,” the negatives thereof and other words and terms of similar meaning in connection with any discussion of the timing or nature of future operating or financial performance or other events. These statements are not guarantees of future performance or actions. If one or more of these risks or uncertainties materialize, or if management’s underlying assumptions prove to be incorrect, actual results may differ materially from those contemplated by a forward-looking statement. Forward-looking statements speak only as of the date on which they are made. Phibro expressly disclaims any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. A further list and description of risks, uncertainties and other matters can be found in our Quarterly Report on Form 10-Q and Annual Report on Form 10-K, including in the sections thereof captioned “Forward-Looking Statements” and “Risk Factors.” These filings and subsequent filings are available online at www.sec.gov, www.pahc.com, or on request from Phibro.
Non-GAAP Financial Information: We use non-GAAP financial measures, such as adjusted EBITDA, adjusted net income, adjusted diluted EPS and free cash flow to assess and analyze our operational results and trends and to make financial and operational decisions. Management uses adjusted EBITDA as its primary operating measure. We report adjusted net income to portray the results of our operations prior to considering certain income statement elements. We believe these non-GAAP financial measures are also useful to investors because they provide greater transparency regarding our operating performance. The non-GAAP financial measures included in this communication should not be considered alternatives to measurements required by GAAP, such as net income, operating income and earnings per share, and should not be considered measures of liquidity. These non-GAAP financial measures may not be comparable with non-GAAP information provided by other companies. Reconciliation of non-GAAP financial measures and GAAP financial measures are included in the tables accompanying this communication and/or our Quarterly Report on Form 10-Q and Annual Report on Form 10-K.
We are not providing a reconciliation of forward-looking guidance of non-GAAP financial measures to the most directly comparable GAAP financial measures because of the uncertainty regarding, and the potential variability of, certain of the items required for a reconciliation; accordingly, a reconciliation of the non-GAAP financial measure to the corresponding GAAP financial measure is not available without unreasonable effort. These items are uncertain, depend on various factors and may have a material impact on our future GAAP results.
Internet Posting of Information: We routinely post information that may be important to investors in the “Investors” section of our website at www.pahc.com. We encourage investors and potential investors to consult our website regularly for important information about us.
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Consolidated Results of Operations |
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Three Months |
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For the Periods Ended |
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2024 |
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2023 |
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Change |
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(in millions, except per share amounts and percentages) |
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Net sales |
|
$ |
260.4 |
|
$ |
231.3 |
|
$ |
29.1 |
|
13 |
% |
Cost of goods sold |
|
|
176.9 |
|
|
163.6 |
|
|
13.3 |
|
8 |
% |
Gross profit |
|
|
83.5 |
|
|
67.7 |
|
|
15.8 |
|
23 |
% |
Selling, general and administrative expenses |
|
|
65.8 |
|
|
68.5 |
|
|
(2.7) |
|
(4) |
% |
Operating income (loss) |
|
|
17.7 |
|
|
(0.7) |
|
|
18.4 |
|
* |
|
Interest expense, net |
|
|
7.6 |
|
|
4.6 |
|
|
3.1 |
|
67 |
% |
Foreign currency losses, net |
|
|
0.4 |
|
|
6.7 |
|
|
(6.3) |
|
* |
|
Income (loss) before income taxes |
|
|
9.6 |
|
|
(12.0) |
|
|
21.6 |
|
* |
|
Provision (benefit) for income taxes |
|
|
2.6 |
|
|
(4.0) |
|
|
6.6 |
|
* |
|
Net income (loss) |
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$ |
7.0 |
|
$ |
(8.0) |
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$ |
15.0 |
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* |
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Net income (loss) per share |
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basic |
|
$ |
0.17 |
|
$ |
(0.20) |
|
$ |
0.37 |
|
* |
|
diluted |
|
$ |
0.17 |
|
$ |
(0.20) |
|
$ |
0.37 |
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* |
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Weighted average common shares outstanding |
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basic |
|
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40.5 |
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40.5 |
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diluted |
|
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40.6 |
|
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40.5 |
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Ratio to net sales |
|
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|
|
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Gross profit |
|
|
32.1 |
% |
|
29.3 |
% |
|
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|
Selling, general and administrative expenses |
|
|
25.3 |
% |
|
29.6 |
% |
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Operating income (loss) |
|
|
6.8 |
% |
|
(0.3) |
% |
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Income (loss) before income taxes |
|
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3.7 |
% |
|
(5.2) |
% |
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Net income (loss) |
|
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2.7 |
% |
|
(3.5) |
% |
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Effective tax rate |
|
|
27.5 |
% |
|
33.1 |
% |
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|
Amounts and percentages may reflect rounding adjustments. | ||
* Calculation not meaningful |
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Segment |
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Three Months |
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For the Periods Ended |
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2024 |
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2023 |
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Change |
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(in millions, except percentages) |
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|
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|
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|
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MFAs and other |
|
$ |
107.8 |
|
$ |
94.1 |
|
$ |
13.7 |
|
15 |
% |
Nutritional specialties |
|
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42.6 |
|
|
40.2 |
|
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2.4 |
|
6 |
% |
Vaccines |
|
|
32.0 |
|
|
26.2 |
|
|
5.8 |
|
22 |
% |
|
|
|
182.5 |
|
|
160.5 |
|
|
22.0 |
|
14 |
% |
Mineral Nutrition |
|
|
59.1 |
|
|
56.0 |
|
|
3.0 |
|
5 |
% |
Performance Products |
|
|
18.8 |
|
|
14.8 |
|
|
4.1 |
|
27 |
% |
Total |
|
$ |
260.4 |
|
$ |
231.3 |
|
$ |
29.1 |
|
13 |
% |
|
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|
|
|
|
|
|
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|
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|
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Adjusted EBITDA |
|
|
|
|
|
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|
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|
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$ |
40.4 |
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$ |
28.5 |
|
$ |
11.9 |
|
42 |
% |
Mineral Nutrition |
|
|
3.8 |
|
|
2.9 |
|
|
0.9 |
|
31 |
% |
Performance Products |
|
|
2.3 |
|
|
1.4 |
|
|
0.9 |
|
62 |
% |
Corporate |
|
|
(15.8) |
|
|
(14.1) |
|
|
(1.6) |
|
(12) |
% |
Total |
|
$ |
30.7 |
|
$ |
18.7 |
|
$ |
12.0 |
|
64 |
% |
|
|
|
|
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|
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|
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Ratio to segment net sales |
|
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|
22.1 |
% |
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17.7 |
% |
|
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|
Mineral Nutrition |
|
|
6.4 |
% |
|
5.1 |
% |
|
|
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|
Performance Products |
|
|
12.1 |
% |
|
9.5 |
% |
|
|
|
|
|
Corporate (1) |
|
|
(6.1) |
% |
|
(6.1) |
% |
|
|
|
|
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Total (1) |
|
|
11.8 |
% |
|
8.1 |
% |
|
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Reconciliation of GAAP Net Income (Loss) to Adjusted EBITDA |
|
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|
|
|
|
Net income (loss) |
|
$ |
7.0 |
|
$ |
(8.0) |
|
$ |
15.0 |
|
* |
% |
Interest expense, net |
|
|
7.6 |
|
|
4.6 |
|
|
3.1 |
|
67 |
% |
Provision (benefit) for income taxes |
|
|
2.6 |
|
|
(4.0) |
|
|
6.6 |
|
* |
% |
Depreciation and amortization |
|
|
9.0 |
|
|
8.9 |
|
|
0.1 |
|
1 |
% |
EBITDA |
|
|
26.3 |
|
|
1.5 |
|
|
24.8 |
|
* |
|
Acquisition-related transaction costs |
|
|
3.4 |
|
|
— |
|
|
3.4 |
|
* |
|
Phibro Forward income growth initiatives(2) |
|
|
0.4 |
|
|
— |
|
|
0.4 |
|
* |
|
Stock-based compensation |
|
|
0.2 |
|
|
0.1 |
|
|
0.1 |
|
* |
|
Pension settlement cost |
|
|
— |
|
|
10.4 |
|
|
(10.4) |
|
* |
|
Foreign currency losses, net |
|
|
0.4 |
|
|
6.7 |
|
|
(6.3) |
|
* |
|
Adjusted EBITDA |
|
$ |
30.7 |
|
$ |
18.7 |
|
$ |
12.0 |
|
64 |
% |
Amounts and percentages may reflect rounding adjustments. | ||
* |
Calculation not meaningful |
|
(1) |
Reflects ratio to total net sales |
|
(2) |
Phibro Forward is a company-wide initiative focused on unlocking additional areas of revenue growth and cost savings. |
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Adjusted Net Income |
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Three Months |
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|||||||||
For the Periods Ended |
|
2024 |
|
2023 |
|
Change |
|
|||||
|
|
|
(in millions, except per share amounts and percentages) |
|||||||||
Reconciliation of GAAP Net Income (Loss) to Adjusted Net Income |
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
7.0 |
|
$ |
(8.0) |
|
$ |
15.0 |
|
* |
|
Acquisition-related intangible amortization (1) |
|
|
1.7 |
|
|
1.7 |
|
|
(0.0) |
|
(1) |
% |
Acquisition-related intangible amortization (2) |
|
|
0.6 |
|
|
0.8 |
|
|
(0.2) |
|
(20) |
% |
Acquisition-related transaction costs (2) |
|
|
3.4 |
|
|
— |
|
|
3.4 |
|
* |
|
Pension settlement cost (2) |
|
|
— |
|
|
10.4 |
|
|
(10.4) |
|
* |
|
Stock-based compensation (2) |
|
|
0.2 |
|
|
0.1 |
|
|
0.1 |
|
* |
|
Phibro Forward income growth initiatives (2) |
|
|
0.4 |
|
|
— |
|
|
0.4 |
|
* |
|
Refinancing expense (3) |
|
|
2.0 |
|
|
— |
|
|
2.0 |
|
* |
|
Foreign currency losses, net (4) |
|
|
0.4 |
|
|
6.7 |
|
|
(6.3) |
|
* |
|
Adjustments to income taxes (5) |
|
|
(1.5) |
|
|
(6.1) |
|
|
4.6 |
|
(75) |
% |
Adjusted net income |
|
$ |
14.1 |
|
$ |
5.5 |
|
$ |
8.5 |
|
* |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Statement of Operations |
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted cost of goods sold (1) |
|
$ |
175.3 |
|
$ |
162.0 |
|
$ |
13.3 |
|
8 |
% |
Adjusted gross profit |
|
|
85.1 |
|
|
69.4 |
|
|
15.7 |
|
23 |
% |
Adjusted selling, general and administrative (2) |
|
|
61.2 |
|
|
57.2 |
|
|
4.1 |
|
7 |
% |
Adjusted interest expense, net (3) |
|
|
5.7 |
|
|
4.6 |
|
|
1.1 |
|
24 |
% |
Adjusted income before income taxes |
|
|
18.2 |
|
|
7.7 |
|
|
10.6 |
|
* |
% |
Adjusted provision for income taxes (5) |
|
|
4.2 |
|
|
2.1 |
|
|
2.0 |
|
97 |
% |
Adjusted net income |
|
$ |
14.1 |
|
$ |
5.5 |
|
$ |
8.5 |
|
* |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net income per share |
|
|
|
|
|
|
|
|
|
|
|
|
diluted |
|
$ |
0.35 |
|
$ |
0.14 |
|
$ |
0.21 |
|
* |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
diluted |
|
|
40.6 |
|
|
40.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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Ratio to net sales |
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted gross profit |
|
|
32.7 |
% |
|
30.0 |
% |
|
|
|
|
|
Adjusted selling, general and administrative |
|
|
23.5 |
% |
|
24.7 |
% |
|
|
|
|
|
Adjusted income before income taxes |
|
|
7.0 |
% |
|
3.3 |
% |
|
|
|
|
|
Adjusted net income |
|
|
5.4 |
% |
|
2.4 |
% |
|
|
|
|
|
Adjusted effective tax rate |
|
|
22.8 |
% |
|
27.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts and percentages may reflect rounding adjustments. |
||
* |
Calculation not meaningful |
|
(1) |
Adjusted cost of goods sold excludes acquisition-related intangible amortization. |
|
(2) |
Adjusted selling, general and administrative excludes acquisition-related intangible amortization, acquisition-related transaction costs, pension settlement cost, stock-based compensation and costs associated with Phibro Forward income growth initiatives. |
|
(3) |
Refinancing expense includes third-party costs and the write-off of unamortized debt issuance costs related to the refinancing of the Company’s credit facility in |
|
(4) |
Foreign currency losses, net, are excluded from adjusted net income. |
|
(5) |
Adjusted provision for income taxes excludes the income tax effect of pre-tax income (loss) adjustments and certain income tax items. |
About
View source version on businesswire.com: https://www.businesswire.com/news/home/20241106752183/en/
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+1-201-329-7300
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