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What changed in PHIBRO ANIMAL HEALTH CORP's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of PHIBRO ANIMAL HEALTH CORP's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+359 added−350 removedSource: 10-K (2024-08-28) vs 10-K (2023-08-30)

Top changes in PHIBRO ANIMAL HEALTH CORP's 2024 10-K

359 paragraphs added · 350 removed · 292 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

84 edited+16 added−20 removed161 unchanged
Biggest changeNet sales by segments, species and regions were: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Segments ​ Change ​ Percentage of total For the Year Ended June 30 2023 2022 2021 2023 / 2022 2022 / 2021 2023 2022 2021 ​ ​ ​ ​ ​ ($ in millions) ​ ​ ​ ​ ​ ​ ​ Animal Health $ 660 $ 607 $ 546 $ 53 9 % $ 61 11 % 67 % 64 % 65 % Mineral Nutrition ​ 243 ​ 260 ​ 221 ​ (17) (6) % 39 18 % 25 % 28 % 26 % Performance Products ​ 75 ​ 76 ​ 67 ​ (0) (0) % 9 13 % 8 % 8 % 8 % Total ​ $ 978 ​ $ 942 ​ $ 833 ​ $ 36 4 % $ 109 13 % ​ ​ 6 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Species ​ Change ​ Percentage of total For the Year Ended June 30 2023 2022 2021 2023 / 2022 2022 / 2021 2023 2022 2021 ​ ​ ​ ​ ​ ($ in millions) ​ ​ ​ ​ ​ ​ ​ Poultry $ 331 $ 319 $ 297 $ 12 4 % $ 22 7 % 34 % 34 % 36 % Dairy ​ ​ 190 ​ ​ 186 ​ ​ 169 ​ ​ 4 ​ 2 % ​ 17 ​ 10 % 19 % 20 % 20 % Cattle ​ ​ 128 ​ ​ 127 ​ ​ 106 ​ ​ 1 ​ 1 % ​ 21 ​ 20 % 13 % 13 % 13 % Swine ​ 89 ​ 80 ​ 79 ​ 9 11 % 1 1 % 9 % 8 % 9 % Other (1) ​ 240 ​ 230 ​ 182 ​ 10 4 % 48 26 % 25 % 24 % 22 % Total ​ $ 978 ​ $ 942 ​ $ 833 ​ $ 36 4 % $ 109 13 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Regions (2) ​ Change ​ Percentage of total For the Year Ended June 30 2023 2022 2021 2023 / 2022 2022 / 2021 2023 2022 2021 ​ ​ ​ ​ ​ ($ in millions) ​ ​ ​ ​ ​ ​ ​ United States $ 579 $ 562 $ 495 $ 17 3 % $ 67 13 % 59 % 60 % 59 % Latin America and Canada ​ ​ 220 ​ ​ 191 ​ ​ 166 ​ ​ 29 ​ 15 % ​ 25 ​ 15 % 22 % 20 % 20 % Europe, Middle East and Africa ​ ​ 118 ​ ​ 122 ​ ​ 114 ​ ​ (5) ​ (4) % ​ 8 ​ 7 % 12 % 13 % 14 % Asia Pacific ​ 61 ​ 67 ​ 58 ​ (5) (8) % 9 15 % 6 % 7 % 7 % Total ​ $ 978 ​ $ 942 ​ $ 833 ​ $ 36 4 % $ 109 13 % ​ (1) Other includes sales related to: Performance Products customers; the ethanol industry; aquaculture and other animal species; adjuvants for animal vaccine manufacturers; and Mineral Nutrition other customers.
Biggest changeNet sales by segments, species and regions were: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Segments ​ Change ​ Percentage of total For the Year Ended June 30 2024 2023 2022 2024 / 2023 2023 / 2022 2024 2023 2022 ​ ​ ​ ​ ​ ($ in millions) ​ ​ ​ ​ ​ ​ ​ Animal Health $ 706 $ 660 $ 607 $ 47 7 % $ 53 9 % 69 % 67 % 64 % Mineral Nutrition ​ 244 ​ 243 ​ 260 ​ 1 0 % (17) (6) % 24 % 25 % 28 % Performance Products ​ 68 ​ 75 ​ 76 ​ (8) (10) % (0) (0) % 7 % 8 % 8 % Total ​ $ 1,018 ​ $ 978 ​ $ 942 ​ $ 40 4 % $ 36 4 % ​ ​ 6 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Species ​ Change ​ Percentage of total For the Year Ended June 30 2024 2023 2022 2024 / 2023 2023 / 2022 2024 2023 2022 ​ ​ ​ ​ ​ ($ in millions) ​ ​ ​ ​ ​ ​ ​ Poultry $ 370 $ 331 $ 319 $ 39 12 % $ 12 4 % 36 % 34 % 34 % Dairy ​ ​ 161 ​ ​ 190 ​ ​ 186 ​ ​ (29) ​ (15) % ​ 4 ​ 2 % 16 % 19 % 20 % Cattle ​ ​ 130 ​ ​ 128 ​ ​ 127 ​ ​ 2 ​ 1 % ​ 1 ​ 1 % 13 % 13 % 13 % Swine ​ 97 ​ 89 ​ 80 ​ 8 9 % 9 11 % 10 % 9 % 8 % Other (1) ​ 260 ​ 240 ​ 230 ​ 20 8 % 10 4 % 26 % 25 % 24 % Total ​ $ 1,018 ​ $ 978 ​ $ 942 ​ $ 40 4 % $ 36 4 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Regions (2) ​ Change ​ Percentage of total For the Year Ended June 30 2024 2023 2022 2024 / 2023 2023 / 2022 2024 2023 2022 ​ ​ ​ ​ ​ ($ in millions) ​ ​ ​ ​ ​ ​ ​ United States $ 585 $ 579 $ 562 $ 6 1 % $ 17 3 % 57 % 59 % 60 % Latin America and Canada ​ ​ 248 ​ ​ 220 ​ ​ 191 ​ ​ 28 ​ 13 % ​ 29 ​ 15 % 24 % 22 % 20 % Europe, Middle East and Africa ​ ​ 122 ​ ​ 118 ​ ​ 122 ​ ​ 4 ​ 4 % ​ (5) ​ (4) % 12 % 12 % 13 % Asia Pacific ​ 63 ​ 61 ​ 67 ​ 2 3 % (5) (8) % 6 % 6 % 7 % Total ​ $ 1,018 ​ $ 978 ​ $ 942 ​ $ 40 4 % $ 36 4 % ​ (1) Other includes sales related to: Performance Products customers; the ethanol industry; aquaculture and other animal species; adjuvants for animal vaccine manufacturers; and Mineral Nutrition other customers.
The table below presents our core MFA products: ​ ​ ​ ​ ​ ​ ​ ​ ​ Market Entry of ​ Product ​ Active Ingredient Active Ingredient ​ Description Terramycin ® oxytetracycline 1951 Antibacterial with multiple applications for a wide number of species Nicarb ® nicarbazin 1954 Anticoccidial for poultry Amprolium amprolium 1960 Anticoccidial for poultry and cattle Bloat Guard ® poloxalene 1967 Anti-bloat treatment for cattle Banminth ® pyrantel tartrate 1972 Anthelmintic for livestock Mecadox ® carbadox 1972 Antibacterial for enteric pathogens in swine including Salmonellosis and dysentery Stafac ® /Eskalin ® /V-Max ® virginiamycin 1975 Antibacterial used to prevent and control diseases in poultry, swine and cattle Coxistac® /Posistac® salinomycin 1979 Anticoccidial for poultry, cattle and swine Rumatel ® morantel tartrate 1981 Anthelmintic for livestock Cerditac ® /Cerdimix ® oxibendazole 1982 Anthelmintic for livestock Aviax ® semduramicin 1995 Anticoccidial for poultry Neo-Terramycin ® oxytetracycline + neomycin 1999 Combination of two antibacterials with multiple applications for a wide number of species Aviax Plus ® /Avi-Carb ® semduramicin + nicarbazin 2010 Anticoccidial for poultry ​ Antibacterials are biological or chemical products used in the animal health industry to treat or to prevent bacterial diseases, thereby promoting animal health, resulting in more efficient livestock production.
The table below presents our core MFA products: ​ ​ ​ ​ ​ ​ ​ ​ ​ Market Entry of ​ Product ​ Active Ingredient Active Ingredient ​ Description Terramycin ® oxytetracycline 1951 Antibacterial with multiple applications for a wide number of species Nicarb ® nicarbazin 1954 Anticoccidial for poultry Amprolium amprolium 1960 Anticoccidial for poultry and cattle Bloat Guard ® poloxalene 1967 Anti-bloat treatment for cattle Banminth ® pyrantel tartrate 1972 Anthelmintic for livestock Mecadox ® carbadox 1972 Antibacterial for enteric pathogens in swine including salmonellosis and swine dysentery Stafac ® /Eskalin ® /V-Max ® virginiamycin 1975 Antibacterial used to prevent and control diseases in poultry, swine and cattle Coxistac ® /Posistac ® salinomycin 1979 Anticoccidial for poultry, cattle and swine Rumatel ® morantel tartrate 1981 Anthelmintic for livestock Cerdimix ® oxibendazole 1982 Anthelmintic for livestock Aviax ® semduramicin 1995 Anticoccidial for poultry Neo-Terramycin ® oxytetracycline + neomycin 1999 Combination of two antibacterials with multiple applications for a wide number of species Aviax Plus ® /Avi-Carb ® semduramicin + nicarbazin 2010 Anticoccidial for poultry ​ Antibacterials are biological or chemical products used in the animal health industry to treat or to prevent bacterial diseases, thereby promoting animal health, resulting in more efficient livestock production.
MVP adjuvants ® 1982 Components of veterinary vaccines that enhance the immune response to a vaccine TAbic ® M.B. 2004 Live vaccine for the prevention of Infectious Bursal Disease in poultry MJPRRS ® 2007 Autogenous vaccine for the prevention of porcine reproductive and respiratory syndrome (“PRRS”) in swine TAbic ® IB VAR 2009 Live vaccine for the prevention of Infectious Bronchitis variant 1 strain 233A in poultry TAbic ® IB VAR206 2010 Live vaccine for the prevention of Infectious Bronchitis variant 206 in poultry MB-1 ® 2017 Live vaccine for the prevention of Infections Bursal Disease in the hatchery in poultry pHi-Tech ® 2019 Portable electronic vaccination device and software that ensures proper delivery of vaccines and provides health management information Phivax ® SLE ​ 2019 ​ A live attenuated Salmonella Enteritidis vaccine for the control of Salmonella infection in poultry Phi-Shield ® Vaccines ​ 2023 ​ Autogenous vaccines against either bacterial or viral diseases in poultry, swine and aquaculture in Brazil ​ The V.H. strain of Newcastle Disease vaccine is a pathogenic strain and is effective when applied by aerosol, coarse spray, drinking water or eye-drops.
MVP adjuvants ® 1982 Components of veterinary vaccines that enhance the immune response to a vaccine TAbic ® M.B. 2004 Live vaccine for the prevention of Infectious Bursal Disease in poultry MJPRRS ® 2007 Autogenous vaccine for the prevention of porcine reproductive and respiratory syndrome (“PRRS”) in swine TAbic ® IB VAR 2009 Live vaccine for the prevention of Infectious Bronchitis variant 1 strain 233A in poultry TAbic ® IBVAR206 2010 Live vaccine for the prevention of Infectious Bronchitis variant 206 in poultry MB-1 ® 2017 Live vaccine for the prevention of Infections Bursal Disease in the hatchery in poultry pHi-Tech ® 2019 Portable electronic vaccination device and software that ensures proper delivery of vaccines and provides health management information Phivax ® SLE ​ 2019 ​ A live attenuated Salmonella Enteritidis vaccine for the control of Salmonella infection in poultry Phi-Shield ® Vaccines ​ 2023 ​ Autogenous vaccines against either bacterial or viral diseases in poultry, swine and aquaculture in Brazil ​ The V.H. strain of Newcastle Disease vaccine is a pathogenic strain and is effective when applied by aerosol, coarse spray, drinking water or eye-drops.
We requested that the FDA remove the streptogramin class of antimicrobials from GFI 152 to reflect that they are not “medically important” for human therapy, however, the FDA declined our request. The FDA has recently issued a draft of GFI 152 and the streptogram class of antimicrobials was still included as medically important.
We requested that the FDA remove the streptogramin class of antimicrobials from GFI 152 to reflect that they are not “medically important” for human therapy, however, the FDA declined our request. The FDA has issued a draft of GFI 152 and the streptogram class of antimicrobials was still included as medically important.
Our nutritional specialty products include the OmniGen ® family of products, patented nutritional specialty products that have been shown in several studies to help maintain a cow’s healthy immune system; Animate ® , an anionic nutritional specialty product that helps optimize the health and performance of the transition dairy cow; Magni-Phi ® , a proprietary nutritional specialty product that has been shown to help improve intestinal health and immune response in poultry; Provia Prime TM /MicroLife ® Prime, a four-strain direct-fed microbial product for optimization of gut health, which leads to better pathogen control and improved performance in poultry; and, Cellerate Yeast Solutions ® , a line of proprietary yeast culture products that are used to help improve digestive health, which may lead to improved animal health and performance.
Our nutritional specialty products include the OmniGen ® family of products, patented nutritional specialty products that have been shown in several studies to help maintain a cow’s healthy immune system; Animate ® , an anionic nutritional specialty product that helps optimize the health and performance of the transition dairy cow; Magni-Phi ® , a proprietary nutritional specialty product that has been shown to help improve intestinal health and immune response in poultry; MicroLife ® Prime, a four-strain direct-fed microbial product for optimization of gut health, which leads to better pathogen control and improved performance in poultry; and, Cellerate Yeast Solutions ® , a line of proprietary yeast culture products that are used to help improve digestive health, which may lead to improved animal health and performance.
We interact with customers at both their corporate and operating level, which we believe allows us to develop an in-depth understanding of their needs. Our technical support and research personnel are also important contributors to our overall sales effort. We have a total of approximately 120 technical, field service and quality control/quality assurance personnel throughout the world.
We interact with customers at both their corporate and operating level, which we believe allows us to develop an in-depth understanding of their needs. Our technical support and research personnel are also important contributors to our overall sales effort. We have a total of approximately 180 technical, field service and quality control/quality assurance personnel throughout the world.
Experienced Sales Force and Technical Support Staff with Strong, Consultative Customer Relationships Within our Animal Health and Mineral Nutrition segments, utilizing both our sales, marketing and technical support organization of approximately 400 employees and a broad distribution network, we market our portfolio of more than 690 product lines to livestock producers and veterinarians in over 80 countries.
Experienced Sales Force and Technical Support Staff with Strong, Consultative Customer Relationships Within our Animal Health and Mineral Nutrition segments, utilizing both our sales, marketing and technical support organization of approximately 400 employees and a broad distribution network, we market our portfolio of more than 670 product lines to livestock producers and veterinarians in over 80 countries.
Road to Zero provides a formal system for engagement, shared responsibility, leadership opportunities, meaningful contributions and accountability. We have and will continue to take the necessary daily precautions as recommended by local government authorities to keep our employees safe. Strength Through Diversity, Equity & Inclusion (DEI) We create a positive and supportive work environment for our employees.
Road to Zero provides a formal system for engagement, shared responsibility, leadership opportunities, meaningful contributions and accountability. We have and will continue to take the necessary daily precautions as recommended by local government authorities to keep our employees safe. Strength Through Diversity & Inclusion We create a positive and supportive work environment for our employees.
FDA approval of Type A/B/C Medicated Feed Articles and drugs is based on satisfactory demonstration of safety, efficacy, manufacturing quality standards and appropriate labeling. Efficacy requirements are based on the desired label claim and encompass all species for which label indication is desired. Safety requirements include target animal safety and, in the case of food animals, human food safety (“HFS”).
FDA approval of Type A Medicated Feed Articles and drugs is based on satisfactory demonstration of safety, efficacy, manufacturing quality standards and appropriate labeling. Efficacy requirements are based on the desired label claim and encompass all species for which label indication is desired. Safety requirements include target animal safety and, in the case of food animals, human food safety (“HFS”).
Animal Health Our Animal Health business develops, manufactures and markets about 270 product lines, including: ● antibacterials, which inhibit the growth of pathogenic bacteria that cause infections in animals; anticoccidials, which inhibit the growth of coccidia (parasites) that damage the intestinal tract of animals; and related products (MFAs and other); ● nutritional specialty products, which support nutrition to help improve health and performance (nutritional specialties); and ● vaccines, which induce an increase in antibody levels against a specific virus or bacterium, thus preventing disease due to infection with wild strains of that virus or bacterium (vaccines).
Animal Health Our Animal Health business develops, manufactures and markets about 280 product lines, including: ● antibacterials, which inhibit the growth of pathogenic bacteria that cause infections in animals; anticoccidials, which inhibit the growth of coccidia (parasites) that damage the intestinal tract of animals; and related products (MFAs and other); ● nutritional specialty products, which support nutrition to help improve health and performance (nutritional specialties); and ● vaccines, which induce an increase in antibody levels against a specific virus or bacteria, thus preventing disease due to infection with wild strains of that virus or bacteria (vaccines).
We believe we are well positioned to grow our sales with our established network of sales, marketing and distribution professionals in markets in North America, Latin America, Asia Pacific, Europe and Africa. We are investing resources to further develop products for the companion animal sector. Our business is currently concentrated in the livestock sector.
We believe we are well positioned to grow our sales with our established network of sales, marketing and distribution professionals in markets in North America, Latin America, Asia Pacific, Europe, Africa and the Middle East. We are investing resources to further develop products for the companion animal sector. Our business is currently concentrated in the livestock sector.
Our accruals for environmental liabilities are recorded by calculating our best estimate of probable and reasonably estimable future costs using current information that is available at the time of the accrual. Our accruals for environmental liabilities totaled $8.5 million and $4.3 million as of June 30, 2023 and 2022, respectively.
Our accruals for environmental liabilities are recorded by calculating our best estimate of probable and reasonably estimable future costs using current information that is available at the time of the accrual. Our accruals for environmental liabilities totaled $4.3 million and $8.5 million as of June 30, 2024 and 2023, respectively.
TAbic ® IB VAR and TAbic ® IB VAR206 vaccines are intermediate virulence live vaccine strains used for the prevention of infectious bronchitis in poultry. Both vaccines have become significant tools in the increasing fight against infectious bronchitis in regions throughout the world.
TAbic ® IB VAR and TAbic ® IBVAR206 vaccines are intermediate virulence live vaccine strains used for the prevention of infectious bronchitis in poultry. Both vaccines have become significant tools in the increasing fight against infectious bronchitis in regions throughout the world.
Federal Water Pollution Control Act, as amended. We must comply with regulations related to the discharge of pollutants to the waters of the United States without governmental authorization, including those pursuant to the Federal Water Pollution Control Act. Chemical Product Registration Requirements.
We must comply with regulations related to the discharge of pollutants to the waters of the United States without governmental authorization, including those pursuant to the Federal Water Pollution Control Act. Chemical Product Registration Requirements.
The intermediate strain was developed to provide protection against the new field epidemic virus, which is more virulent than those previously encountered. MJPRRS ® , an autogenous vaccine for swine, is administered to pregnant sows to protect their offspring from PRRS. This vaccine includes multiple PRRS isolates representing different virus strains of PRRS.
The intermediate strain was developed to provide protection against the new field epidemic virus, which is more virulent than those previously encountered. 13 Table of Contents MJPRRS ® , an autogenous vaccine for swine, is administered to pregnant sows to protect their offspring from PRRS. This vaccine includes multiple PRRS isolates representing different virus strains of PRRS.
The site managers are responsible for implementing the established EHS 26 Table of Contents controls. To protect employees, we have established health and safety policies, programs and processes at all our manufacturing sites. An external EHS audit is performed at each of our sites as needed based on the conditions at the respective sites.
The site managers are responsible for implementing the established EHS controls. To protect employees, we have established health and safety policies, programs and processes at all our manufacturing sites. An external EHS audit is performed at each of our sites as needed based on the conditions at the respective sites.
Such periodic and current reports, proxy statements and other information will be available to the public on the SEC’s website at www.sec.gov and through our website at www.pahc.com. None of the information accessible on or through our website is incorporated into this Annual Report on Form 10-K.
Such periodic and current reports, proxy statements and other information will be available to the public on the SEC’s website at www.sec.gov and 26 Table of Contents through our website at www.pahc.com. None of the information accessible on or through our website is incorporated into this Annual Report on Form 10-K.
We actively seek to protect our proprietary information, including our trade 15 Table of Contents secrets and proprietary know-how, by seeking to require our employees, consultants, advisors and partners to enter into confidentiality agreements and other arrangements upon the commencement of their employment or engagement.
We actively seek to protect our proprietary information, including our trade secrets and proprietary know-how, by seeking to require our employees, consultants, advisors and partners to enter into confidentiality agreements and other arrangements upon the commencement of their employment or engagement.
For certain types of additives, the authorizations are not generic in nature (so that they can be relied upon by any operator) but are limited to the company that obtained the marketing authorization. They are known as Brand Specific Approvals (“BSA”).
For certain types of additives, the authorizations are not generic in nature (so that they can be relied upon by any operator) but are limited to the company that obtained the marketing authorization. They are known 18 Table of Contents as Brand Specific Approvals (“BSA”).
We market approximately 770 product lines in over 80 countries to approximately 4,000 customers. We develop, manufacture and market a broad range of products for food and companion animals including poultry, swine, beef and dairy cattle, aquaculture and dogs. Our products help prevent, control and treat diseases and support nutrition to help improve animal health and well-being.
We market approximately 750 product lines in over 80 countries to approximately 4,200 customers. We develop, manufacture and market a broad range of products for food and companion animals including poultry, swine, beef and dairy cattle, aquaculture and dogs. Our products help prevent, control and treat diseases and support nutrition to help improve animal health and well-being.
Our nutritional specialty products include: ​ ​ ​ ​ ​ ​ Market ​ Product Entry ​ Description AB20 ® 1989 Natural flow agent that improves overall feed quality Animate ® 1999 Maintains proper blood calcium levels in dairy cows during critical transition period OmniGen ® 2004 Optimize immune function in dairy cows and improve productivity Magni-Phi ® 2015 Proprietary blend that helps to improve intestinal health and immune response which may lead to improved absorption and utilization of nutrients for poultry Cellerate Yeast Solutions ® 2017 Proprietary yeast culture products for all classes of livestock to help improve digestive health Provia Prime™/MicroLife ® Prime 2019 4-way combination direct-fed microbial for optimization of gut health, which leads to better pathogen control in poultry ​ AB20 ® is a natural flow agent that, when added to feed, improves the overall feed quality.
Our nutritional specialty products include: ​ ​ ​ ​ ​ ​ Market ​ Product Entry ​ Description AB20 ® 1989 Natural flow agent that improves overall feed quality Animate ® 1999 Helps maintain proper blood calcium levels in dairy cows during critical transition period OmniGen ® 2004 Optimize immune function in dairy cows and improve productivity Magni-Phi ® & Magni-Phi ® Ultra 2015 Proprietary blend that helps to improve intestinal health and immune response which may lead to improved absorption and utilization of nutrients for poultry Cellerate Yeast Solutions ® 2017 Proprietary yeast culture products for all classes of livestock to help improve digestive health MicroLife ® Prime 2019 4-way combination direct-fed microbial for optimization of gut health, which can lead to better pathogen control in poultry ​ AB20 ® is a natural flow agent that, when added to feed, binds moisture to improve the overall feed quality.
The European Medicines Agency (and its main veterinary scientific committee, the Committee for Medicinal Products for Veterinary Use) and the national authorities in the various E.U. Member States, are responsible for administering this regime. 18 Table of Contents A separate E.U. regime applies to feed additives. It provides for a re-registration process for existing additives and this process is ongoing.
The European Medicines Agency (and its main veterinary scientific committee, the Committee for Medicinal Products for Veterinary Use) and the national authorities in the various E.U. Member States, are responsible for administering this regime. A separate E.U. regime applies to feed additives. It provides for a re-registration process for existing additives and this process is ongoing.
Our capital expenditures relating to environmental, health and safety regulations were $2.4 million for the fiscal year ended June 30, 2023. See “Business — Environmental, Health and Safety Regulations” for further descriptions. Our environmental capital expenditure plans cover, among other things, the currently expected costs associated with known permit requirements relating to facility improvements.
Our capital expenditures relating to environmental, health and safety regulations were $2.6 million for the fiscal year ended June 30, 2024. See “Business — Environmental, Health and Safety Regulations” for further descriptions. Our environmental capital expenditure plans cover, among other things, the currently expected costs associated with known permit requirements relating to facility improvements.
We own, or have exclusive rights to use under license, approximately 282 patents or pending applications in more than 30 countries but we believe that no single patent is of material importance to our business and, accordingly, that the expiration or termination thereof would not materially affect our business.
We own, or have exclusive rights to use under license, approximately 300 patents or pending applications in more than 40 countries but we believe that no single patent is of material importance to our business and, accordingly, that the expiration or termination thereof would not materially affect our business.
Our operations in countries outside of the United States contributed approximately 58% of our Animal Health segment revenues for the year ended June 30, 2023. Leading Positions in High Growth Sub-sectors of the Animal Health Market We are a global leader in the development, manufacture and commercialization of MFAs and nutritional specialty products for the animal health market.
Our operations in countries outside of the United States contributed approximately 59% of our Animal Health segment revenues for the year ended June 30, 2024. Leading Positions in High Growth Sub-sectors of the Animal Health Market We are a global leader in the development, manufacture and commercialization of MFAs and nutritional specialty products for the animal health market.
We sell our Performance Products through our local sales offices to the personal care, industrial chemical and chemical catalyst industries. We market these products predominately in the United States. Customers We have approximately 4,000 customers, of which approximately 3,800 customers are served by our Animal Health and Mineral Nutrition businesses.
We sell our Performance Products through our local sales offices to the personal care, industrial chemical and chemical catalyst industries. We market these products predominately in the United States. Customers We have approximately 4,200 customers, of which approximately 3,900 customers are served by our Animal Health and Mineral Nutrition businesses.
We also focus on innovation to produce new antigens or new presentations of antigens, and have developed new vaccines and related technologies, such as: 9 Table of Contents ● MB-1 ® , a live attenuated vaccine for Infectious Bursal disease, developed from the M.B. strain, adapted for in-ovo or subcutaneous injection at the hatchery; ● TAbic ® IB VAR206, a live attenuated virus vaccine for Infectious Bronchitis developed from a unique genotype 2 variant strain; ● The inactivated subunit Infectious Bursal Disease Virus; ● Salmin Plus ® , the first multi-variant inactivated vaccine containing Salmonella Enteritis, Salmonella Typhimurium and Salmonella Infantis; ● EASE ® (Enhanced Antigen Surface Expression), a new bacterial growth procedure to improve the performance of our vaccines; and ● pHi-Tech ® , a portable electronic vaccination device and software that ensures proper delivery of vaccines and provides health management information.
Several of our vaccine products are available in the patented TAbic format. 9 Table of Contents We also focus on innovation to produce new antigens or new presentations of antigens, and have developed new vaccines and related technologies, such as: ● MB-1 ® , a live attenuated vaccine for Infectious Bursal disease, developed from the M.B. strain, adapted for in-ovo or subcutaneous injection at the hatchery; ● TAbic ® IBVAR206, a live attenuated virus vaccine for Infectious Bronchitis developed from a unique genotype 2 variant strain; ● The inactivated subunit Infectious Bursal Disease Virus; ● Salmin Plus ® , the first multi-variant inactivated vaccine containing Salmonella Enteritis, Salmonella Typhimurium and Salmonella Infantis; ● EASE ® (Enhanced Antigen Surface Expression), a new bacterial growth procedure to improve the performance of our autogenous vaccines; and ● pHi-Tech ® , a portable electronic vaccination device and software that ensures proper delivery of vaccines and provides health management information.
TAbic is a patented technology for formulation and delivery of vaccine antigens in effervescent tablets, packaged in sealed aluminum blister packages. The technology replaces the glass bottles that are in common use today, and offers significant sustainability advantages including reduced storage requirements, customer handling and disposal. Several of our vaccine products are available in the patented TAbic format.
TAbic is a patented technology for formulation and delivery of vaccine antigens in effervescent tablets, packaged in sealed aluminum blister packages. The technology replaces the glass bottles that are in common use today, and offers significant sustainability advantages including reduced storage requirements, customer handling and disposal.
As of June 30, 2023, surety bonds and letters of credit provided $12.9 million of financial assurance. Workplace Health and Safety We are committed to manufacturing safe products and achieving a safe workplace. Our Environmental Health and Safety (“EHS”) Global Director, along with regional and site-based EHS professionals, manage environmental, health and safety matters throughout the Company.
As of June 30, 2024, surety bonds and letters of credit provided $15.5 million of financial assurance. Workplace Health and Safety We are committed to manufacturing safe products and achieving a safe workplace. Our Environmental Health and Safety (“EHS”) Global Director, along with regional and site-based EHS professionals, manage environmental, health and safety matters throughout the Company.
We market our vaccine products to protect animals from either viral or bacterial disease challenges in all regions in which we operate. We have developed and market approximately 345 licensed vaccine presentations for the prevention of diseases in poultry, including vaccines to protect against Infectious Bursal Disease, Infectious Bronchitis, Newcastle Disease, Reovirus, Salmonella and Coryza.
We market our vaccine products to protect animals from either viral or bacterial disease challenges in all regions in which we operate. We have developed and market approximately 50 product lines for the prevention of diseases in poultry, including vaccines to protect against Infectious Bursal Disease, Infectious Bronchitis, Newcastle Disease, Reovirus, Salmonella and Coryza.
The system is similar to the U.S. system, where regulatory approval is for the formulated product or “brand.” The EFSA is responsible for the E.U. risk assessment regarding food and feed safety.
The system is similar to the U.S. system, where, for certain types of additives, regulatory approval is for the formulated product or “brand.” The EFSA is responsible for the E.U. risk assessment regarding food and feed safety.
For discussion regarding the impact of the ongoing armed conflict between Russia and Ukraine on our financial results, see Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations.
For discussion regarding the impact of the ongoing armed conflicts between Israel and Hamas and between Russia and Ukraine on our financial results, see Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations.
In addition, because we or our 24 Table of Contents subsidiaries have closed several facilities that had been the subject of RCRA permits, we or our subsidiaries have been and will be required to investigate and remediate certain environmental contamination conditions at these closed plant sites within the requirements of RCRA corrective action programs.
In addition, because we or our subsidiaries have closed several facilities that had been the subject of RCRA permits, we or our subsidiaries have been and will be required to investigate and remediate certain environmental contamination conditions at these closed plant sites within the requirements of RCRA corrective action programs. 24 Table of Contents Federal Water Pollution Control Act, as amended.
We continue to build our companion animal business and pipeline. Our Rejensa ® joint supplement for dogs continues to gain customer acceptance. Our companion animal development pipeline includes an early-stage atopic dermatitis compound, a novel Lyme vaccine delivery system product, a potential treatment for mitral heart valve disease in dogs, a pain product and two early-stage oral care compounds.
We continue to build our companion animal business and pipeline. Our Rejensa ® joint supplement for dogs continues to gain customer acceptance. Our companion animal development pipeline includes an early-stage atopic dermatitis compound, a potential treatment for mitral heart valve disease in dogs, a pain product and two oral care products.
We devote considerable resources to complying with Environmental Laws and managing environmental liabilities. We have developed programs to identify requirements under and maintain compliance with Environmental Laws; however, we cannot predict with certainty the impact of increased and more stringent regulation on our operations, future capital expenditure requirements, or the cost of compliance.
We have developed programs to identify requirements under and maintain compliance with Environmental Laws; however, we cannot predict with certainty the impact of increased and more stringent regulation on our operations, future capital expenditure requirements, or the cost of compliance.
Together, our Animal Health and Mineral Nutrition businesses have a sales, marketing and technical support organization of more than 400 employees and approximately 195 distributors who market our portfolio of approximately 690 product lines to livestock producers, veterinarians, nutritionists, animal feed companies and distributors in over 80 countries.
Together, our Animal Health and Mineral Nutrition businesses have a sales, marketing and technical support organization of more than 400 employees and approximately 200 distributors who market our portfolio 14 Table of Contents of approximately 670 product lines to livestock producers, veterinarians, nutritionists, animal feed companies and distributors in over 80 countries.
Our nutritional specialty product offerings such as OmniGen-AF and Animate are used increasingly in the global dairy industry, and Magni-Phi and Provia Prime/MicroLife Prime are rapidly becoming important products for poultry producers. Our vaccine products are effective against critical diseases in poultry, swine and beef and dairy cattle.
Our nicarbazin and amprolium MFAs are globally recognized anticoccidials. Our nutritional specialty product offerings such as OmniGen-AF and Animate are used increasingly in the global dairy industry, and Magni-Phi ® and MicroLife ® Prime are rapidly becoming important products for poultry producers. Our vaccine products are effective against critical diseases in poultry, swine and beef and dairy cattle.
As of June 30, 2023, we had approximately 1,055 Animal Health product registrations globally, including approximately 390 MFA registrations, 345 vaccine registrations (including autogenous vaccines) and 320 registrations for nutritional specialty products. Our MFA global registrations included approximately 90 registrations for virginiamycin.
As of June 30, 2024, we had approximately 1,050 Animal Health product registrations globally, including approximately 390 MFA registrations, 320 vaccine registrations (including autogenous vaccines) and 340 registrations for nutritional specialty products. Our MFA global registrations included approximately 90 registrations for virginiamycin.
In complying with standards set forth in these regulations, manufacturers must continue to expend time, monies and effort in the area of production and quality control to ensure compliance. The process of seeking FDA approvals can be costly, time consuming and subject to unanticipated and significant delays.
Certain subsequent manufacturing changes must be approved by the FDA prior to implementation. In complying with standards set forth in these regulations, manufacturers must continue to expend time, monies and effort in the area of production and quality control to ensure compliance. The process of seeking FDA approvals can be costly, time consuming and subject to unanticipated and significant delays.
Adjusted EBITDA by segment was: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Adjusted EBITDA (1) ​ Change ​ Percentage of total (2) For the Year Ended June 30 2023 2022 2021 2023 / 2022 2022 / 2021 2023 2022 2021 ​ ​ ​ ​ ​ ($ in millions) ​ ​ ​ ​ ​ ​ ​ Animal Health $ 136 $ 124 $ 124 $ 12 10 % $ 0 0 % 84 % 79 % 82 % Mineral Nutrition ​ ​ 17 ​ ​ 24 ​ ​ 17 ​ ​ (7) ​ (28) % ​ 7 ​ 40 % 11 % 15 % 11 % Performance Products ​ ​ 9 ​ ​ 9 ​ ​ 9 ​ ​ 1 ​ 7 % ​ (1) ​ (8) % 6 % 6 % 6 % Corporate ​ (50) ​ (46) ​ (43) ​ (4) 10 % (3) 7 % ​ ​ ​ ​ ​ ​ Total ​ $ 113 ​ $ 111 ​ $ 108 ​ $ 2 2 % $ 3 3 % ​ (1) See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — General description of non-GAAP financial measures” for description of Adjusted EBITDA.
Adjusted EBITDA by segment was: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Adjusted EBITDA (1) ​ Change ​ Percentage of total (2) For the Year Ended June 30 2024 2023 2022 2024 / 2023 2023 / 2022 2024 2023 2022 ​ ​ ​ ​ ​ ($ in millions) ​ ​ ​ ​ ​ ​ ​ Animal Health $ 146 $ 136 $ 124 $ 9 7 % $ 12 10 % 86 % 84 % 79 % Mineral Nutrition ​ ​ 16 ​ ​ 17 ​ ​ 24 ​ ​ (1) ​ (6) % ​ (7) ​ (28) % 10 % 11 % 15 % Performance Products ​ ​ 8 ​ ​ 9 ​ ​ 9 ​ ​ (2) ​ (18) % ​ 1 ​ 7 % 5 % 6 % 6 % Corporate ​ (58) ​ (50) ​ (46) ​ (8) 17 % (4) 10 % ​ ​ ​ ​ ​ ​ Total ​ $ 111 ​ $ 113 ​ $ 111 ​ $ (2) (1) % $ 2 2 % ​ (1) See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — General description of non-GAAP financial measures” for description of Adjusted EBITDA.
Provia Prime™ and MicroLife ® Prime represent a proprietary combination of four strains of bacillus-based direct-fed microbials that have been shown to promote beneficial gut bacteria, which can help promote health, immunity and productivity in poultry, which leads to lower pathogen challenges in commercial poultry production.
Improved digestive health may lead to improved animal health and performance. MicroLife ® Prime represents a proprietary combination of four strains of bacillus-based direct-fed microbials that have been shown to promote beneficial gut bacteria, which can help promote health, immunity and productivity in poultry, which leads to lower pathogen challenges in commercial poultry production.
We aim to protect employees from being discriminated against because of gender, sexual orientation, age, marital status, race, religion, political beliefs, ethnic background, country of origin, language or non-job-related disabilities, and we follow these same principles when recruiting new talent to our organization.
We aim to protect employees from being discriminated against because of gender, sexual orientation, age, marital status, race, religion, political beliefs, ethnic background, country of origin, language or non-job-related disabilities, and we follow these same principles when recruiting new talent to our organization. 22 Table of Contents Respecting Employees Phibro employees are our greatest strength and most valuable asset.
Participating Responsible Parties (“PRPs”) at Omega Chemical Superfund Site. The EPA is investigating and planning for the remediation of offsite contaminated groundwater that has migrated from the Omega Chemical 25 Table of Contents Corporation Superfund Site (“Omega Chemical Site”), which is upgradient of Phibro-Tech’s Santa Fe Springs, California facility.
Participating Responsible Parties (“PRPs”) at Omega Chemical Superfund Site. The EPA oversees remediation of contaminated groundwater that has migrated from the Omega Chemical Corporation Superfund Site (“Omega Chemical Site”), which is upgradient of Phibro-Tech’s Santa Fe Springs, California facility.
Research, development and technical service efforts are conducted by our veterinarians (DVMs) and nutritionists at various facilities. We operate Animal Health R&D and product testing at several of our domestic and international facilities.
Research, development and technical service efforts are conducted by our veterinarians (DVMs) and nutritionists at various facilities. We operate Animal Health R&D and product testing at several of our domestic and international facilities. We also engage various independent contract research organizations to undertake research and development activities.
In very serious cases of noncompliance with cGMP standards, the FDA may issue a warning letter which could result in products produced in such manufacturing facilities to be ineligible for sale in the U.S.
Failure to take such corrective actions could result in the manufacturing facility being ineligible to receive future FDA approvals. In very serious cases of noncompliance with cGMP standards, the FDA may issue a warning letter which could result in products produced in such manufacturing facilities to be ineligible for sale in the U.S.
Performance Products Our Performance Products business manufactures and markets specialty ingredients for use in the personal care, industrial chemical and chemical catalyst industries. We operate the business through our PhibroChem (a division of PAHC), Ferro Metal and Chemical Corporation Limited and Phibro-Tech, Inc.
Performance Products Our Performance Products business manufactures and markets specialty ingredients for use in the personal care, industrial chemical and chemical catalyst industries. We operate the business through our PhibroChem (a division of PAHC), Ferro Metal and Chemical Corporation Limited and Phibro-Tech, Inc. (“Phibro-Tech”) business units. Sales and Marketing Our sales organization includes sales, marketing and technical support employees.
With the exception of Australia, Canada, Japan and New Zealand, most other countries’ regulatory agencies will generally refer to the FDA, USDA, European Union and other international animal health entities, including the World 19 Table of Contents Organization for Animal Health, Codex Alimentarius Commission, the recognized international standard-setting body for food (“Codex”), before establishing their own standards and regulations for veterinary pharmaceuticals and vaccines.
With the exception of Australia, Canada, Japan and New Zealand, most other countries’ regulatory agencies will generally refer to the FDA, USDA, European Union and other international animal health entities, including the World Organization for Animal Health, Codex Alimentarius Commission, the recognized international standard-setting body for food (“Codex”), before establishing their own standards and regulations for veterinary pharmaceuticals and vaccines. 19 Table of Contents The Joint FAO/WHO Expert Committee on Food Additives is an international expert scientific committee that is administered jointly by the Food and Agriculture Organization of the United Nations and the World Health Organization.
Net identifiable assets by segment were: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Identifiable Assets ​ Change ​ Percentage of total As of June 30 2023 2022 2021 2023 / 2022 2022 / 2021 2023 2022 2021 ​ ​ ​ ​ ​ ($ in millions) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Animal Health $ 699 $ 655 $ 595 $ 44 7 % $ 60 10 % 72 % 70 % 71 % Mineral Nutrition ​ ​ 76 ​ ​ 87 ​ ​ 68 ​ ​ (12) ​ (13) % ​ 19 ​ 29 % 8 % 9 % 8 % Performance Products ​ ​ 50 ​ ​ 39 ​ ​ 37 ​ ​ 10 ​ 26 % ​ 3 ​ 7 % 5 % 4 % 4 % Corporate ​ 147 ​ 150 ​ 141 ​ (3) (2) % 9 6 % 15 % 16 % 17 % Total ​ $ 971 ​ $ 932 ​ $ 841 ​ $ 40 4 % $ 91 11 % ​ ​ 7 Table of Contents Corporate assets include cash and cash equivalents, short-term investments, debt issuance costs, income tax related assets and certain other assets.
Net identifiable assets by segment were: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Identifiable Assets ​ Change ​ Percentage of total As of June 30 2024 2023 2022 2024 / 2023 2023 / 2022 2024 2023 2022 ​ ​ ​ ​ ​ ($ in millions) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Animal Health $ 684 $ 699 $ 655 $ (14) (2) % $ 44 7 % 70 % 72 % 70 % Mineral Nutrition ​ ​ 67 ​ ​ 76 ​ ​ 87 ​ ​ (9) ​ (12) % ​ (12) ​ (13) % 7 % 8 % 9 % Performance Products ​ ​ 51 ​ ​ 50 ​ ​ 39 ​ ​ 1 ​ 2 % ​ 10 ​ 26 % 5 % 5 % 4 % Corporate ​ 180 ​ 147 ​ 150 ​ 32 22 % (3) (2) % 18 % 15 % 16 % Total ​ $ 982 ​ $ 971 ​ $ 932 ​ $ 11 1 % $ 40 4 % ​ ​ 7 Table of Contents Corporate assets include cash and cash equivalents, short-term investments, debt issuance costs, income tax related assets and certain other assets.
Animal Health net sales by product group and regions were: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Product Groups ​ Change ​ Percentage of total For the Year Ended June 30 2023 2022 2021 2023 / 2022 2022 / 2021 2023 2022 2021 ​ ​ ​ ​ ​ ($ in millions) ​ ​ ​ ​ ​ ​ ​ MFAs and other $ 387 $ 362 $ 330 $ 26 7 % $ 32 10 % 59 % 60 % 60 % Nutritional specialties ​ 173 ​ 157 ​ 143 ​ 15 10 % 14 10 % 26 % 26 % 26 % Vaccines ​ 100 ​ 88 ​ 73 ​ 12 13 % 15 21 % 15 % 15 % 13 % Animal Health ​ $ 660 ​ $ 607 ​ $ 546 ​ $ 53 9 % $ 61 11 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Regions (1) ​ Change ​ Percentage of total For the Year Ended June 30 2023 2022 2021 2023 / 2022 2022 / 2021 2023 2022 2021 ​ ​ ​ ​ ​ ($ in millions) ​ ​ ​ ​ ​ ​ ​ United States $ 277 $ 248 $ 227 $ 29 12 % $ 21 9 % 42 % 41 % 42 % Latin America and Canada ​ ​ 207 ​ ​ 175 ​ ​ 151 ​ ​ 32 ​ 18 % ​ 24 ​ 16 % 31 % 29 % 28 % Europe, Middle East and Africa ​ ​ 116 ​ ​ 120 ​ ​ 110 ​ ​ (4) ​ (3) % ​ 10 ​ 9 % 18 % 20 % 20 % Asia Pacific ​ 60 ​ 64 ​ 58 ​ (4) (6) % 6 10 % 9 % 11 % 11 % Total ​ $ 660 ​ $ 607 ​ $ 546 ​ $ 53 9 % $ 61 11 % ​ (1) Net sales by region are based on country of destination.
Animal Health net sales by product group and regions were: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Product Groups ​ Change ​ Percentage of total For the Year Ended June 30 2024 2023 2022 2024 / 2023 2023 / 2022 2024 2023 2022 ​ ​ ​ ​ ​ ($ in millions) ​ ​ ​ ​ ​ ​ ​ MFAs and other $ 421 $ 387 $ 362 $ 34 9 % $ 26 7 % 60 % 59 % 60 % Nutritional specialties ​ 165 ​ 173 ​ 157 ​ (8) (5) % 15 10 % 23 % 26 % 26 % Vaccines ​ 121 ​ 100 ​ 88 ​ 21 21 % 12 13 % 17 % 15 % 15 % Animal Health ​ $ 706 ​ $ 660 ​ $ 607 ​ $ 47 7 % $ 53 9 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Regions (1) ​ Change ​ Percentage of total For the Year Ended June 30 2024 2023 2022 2024 / 2023 2023 / 2022 2024 2023 2022 ​ ​ ​ ​ ​ ($ in millions) ​ ​ ​ ​ ​ ​ ​ United States $ 287 $ 277 $ 248 $ 10 4 % $ 29 12 % 41 % 42 % 41 % Latin America and Canada ​ ​ 238 ​ ​ 207 ​ ​ 175 ​ ​ 31 ​ 15 % ​ 32 ​ 18 % 34 % 31 % 29 % Europe, Middle East and Africa ​ ​ 119 ​ ​ 116 ​ ​ 120 ​ ​ 3 ​ 3 % ​ (4) ​ (3) % 17 % 18 % 20 % Asia Pacific ​ 62 ​ 60 ​ 64 ​ 2 3 % (4) (6) % 9 % 9 % 11 % Total ​ $ 706 ​ $ 660 ​ $ 607 ​ $ 46 7 % $ 53 9 % ​ (1) Net sales by region are based on country of destination.
In January 2017, the FDA and industry, including us, completed the process of label changes for MIA products to remove production claims and to limit the use of MIAs to those uses that are considered necessary for assuring animal health, namely for the prevention, control and/or treatment of disease, and that MIA use in food-producing animals should include veterinary oversight or consultation.
Prior to implementation of the revised VFD regulations, many approved antimicrobial products could be obtained and used without formal veterinary authorization. 17 Table of Contents In January 2017, the FDA and industry, including us, completed the process of label changes for MIA products to remove production claims and to limit the use of MIAs to those uses that are considered necessary for assuring animal health, namely for the prevention, control and/or treatment of disease, and that MIA use in food-producing animals should include veterinary oversight or consultation.
We have a strong management team with a proven track record of success at both the corporate and operating levels. The executive management team has diverse backgrounds and on average more than 30 years of experience the animal health or related industry. Human Capital As of June 30, 2023, we had 1,920 employees in 52 locations spanning 33 countries.
We have a strong management team with a proven track record of success at both the corporate and operating levels. The executive management team has diverse backgrounds and on average more than 30 years of experience in the animal health or related industry.
Our anthelmintic products include Rumatel ® and Banminth ® , which are both marketed to control major internal nematode parasites in beef and dairy cattle and swine. Bloat Guard ® is an anti-bloat treatment used in cattle to control bloat in animals grazing on legume or wheat-pasture.
Our anthelmintic products, Rumatel ® , Banminth ® and Cerdimix ® are marketed to control major intestinal parasites. Rumatel is indicated for cattle while Banminth and Cerdimix are used in swine. Bloat Guard ® is an anti-bloat treatment used in cattle to control bloat in animals grazing on legume or wheat-pasture.
In March 2022, the FDA held a Part 15 virtual public hearing seeking data and information related to the safety of carbadox in which Phibro participated and again detailed the extensive research and data that confirm the safety of carbadox.
In March 2022, the FDA held a Part 15 virtual public hearing seeking data and information related to the safety of carbadox in which Phibro participated and again detailed the research and data that confirm the safety of carbadox. In November 2023, the FDA issued a final order to revoke the approved method for detecting carbadox residues.
Our leading MFAs product franchise, Stafac/V-Max/Eskalin, is approved in over 30 countries for use in poultry, swine and beef and dairy cattle and is regarded as one of the leading MFA products for production animals. Our nicarbazin and amprolium MFAs are globally recognized anticoccidials.
These products are often critical to our customers’ efficient production of healthy animals. Our leading MFAs product 20 Table of Contents franchise, Stafac ® /V-Max ® /Eskalin ® , is approved in over 30 countries for use in poultry, swine and beef and dairy cattle and is regarded as one of the leading MFA products for production animals.
Many of our proprietary nutritional specialty products have been developed through applied research in cooperation with private research companies or by leading universities with whom we collaborate and then further develop through commercial trials with customers.
Nutritional Specialties Nutritional specialty products enhance nutrition to help improve health and performance in areas such as immune system function and digestive health. Many of our proprietary nutritional specialty products have been developed through applied research in cooperation with private research companies or by leading universities with whom we collaborate and then further develop through commercial trials with customers.
(“Phibro-Tech”) business units. 14 Table of Contents Sales and Marketing Our sales organization includes sales, marketing and technical support employees. In markets where we do not have a direct commercial presence, we generally contract with distributors that provide logistics and sales and marketing support for our products.
In markets where we do not have a direct commercial presence, we generally contract with distributors that provide logistics and sales and marketing support for our products.
Our adjuvants include Emulsigen ® , Emulsigen ® D, Emulsigen ® P, Carbigen ® and Polygen ® . 13 Table of Contents The M.B. strain of Gumboro vaccine is an intermediate virulence live vaccine strain used for the prevention of Infectious Bursal Disease in poultry.
MVP adjuvants ® are integral components used in veterinary vaccines which enhance the immune response to a vaccine. Our adjuvants include Emulsigen ® , Emulsigen ® D, Emulsigen ® P, Carbigen ® and Polygen ® . The M.B. strain of Gumboro vaccine is an intermediate virulence live vaccine strain used for the prevention of Infectious Bursal Disease in poultry.
We seek to file and maintain trademark registrations around the world based on commercial activities in most regions where we have, or desire to have, a business presence for a particular product or service. We currently maintain, or have rights to use under license, approximately 3,700 trademark registrations or pending applications globally, identifying goods and services related to our business.
We seek to file and maintain trademark registrations around the world based on commercial activities in most regions where we have, or desire to have, a business presence for a particular product or service.
Our regulatory function seeks to engage in dialogue with various global agencies regarding their policies that relate to animal health products. For products that are currently subject to formal licensing by government agencies, our business relies on the ongoing approval and/or periodic re-approval of those licenses.
For products that are currently subject to formal licensing by government agencies, our business relies on the ongoing approval and/or periodic re-approval of those licenses.
We maintain accruals for costs and liabilities associated with Environmental Laws, which we currently believe are adequate. In many instances, it is difficult to predict the ultimate costs under Environmental Laws and the time period during which such costs are likely to be incurred. Governmental authorities have the power to enforce compliance with their regulations.
In many instances, it is difficult to predict the ultimate costs under Environmental Laws and the time period during which such costs are likely to be incurred. Governmental authorities have the power to enforce compliance with their regulations. Violators of Environmental Laws may be subject to civil, criminal and administrative penalties, injunctions or both.
While we believe that our operations are currently in material compliance with Environmental Laws, we have, from time to time, received notices of violation from governmental authorities, and have been involved in civil or criminal action for such violations. Additionally, at various sites, our subsidiaries are engaged in continuing investigation, remediation and/or monitoring to address contamination associated with historical operations.
We have incurred, and will continue to incur, expenses to attain and maintain compliance with Environmental Laws. While we believe that our operations are currently in material compliance with Environmental Laws, we have, from time to time, received notices of violation from governmental authorities, and have been involved in civil or criminal action for such violations.
Phibro submitted comments again to the open docket recommending that streptogramins be listed as not medically important, particularly in light of the recent withdrawal of Synercid from the U.S. market by the sponsor.
Phibro submitted comments again to the open docket recommending that streptogramins be listed as not medically important, particularly in light of the withdrawal of Synercid from the U.S. market by the sponsor. There is no certainty surrounding the outcome of the current review of the GFI 152 list and actions that may be taken by the FDA. MIAs.
Our MFAs and other products primarily consist of the production and sale of antibacterials (including Stafac®, Terramycin®, Neo-Terramycin® and Mecadox®) and anticoccidials (including Nicarb®, Aviax®, Aviax Plus®, Coxistac™ and amprolium). Antibacterials inhibit the growth of pathogenic bacteria that cause infections in animals, while anticoccidials inhibit growth of coccidia (parasites) that damage the intestinal tract of animals.
Our MFAs and other products primarily consist of the production and sale of antibacterials (including Stafac ® , Terramycin ® , Neo-Terramycin ® and Mecadox ® ) and anticoccidials (including Nicarb ® , Aviax ® , Aviax Plus ® , Coxistac ® and amprolium).
The EPA has named Phibro-Tech and certain other subsidiaries of PAHC as PRPs due to groundwater contamination from Phibro-Tech’s Santa Fe Springs facility that has allegedly commingled with contaminated groundwater from the Omega Chemical Site.
The EPA entered into a settlement agreement and court-approved consent decree (the “Consent Decree”) with a group of companies, including Phibro-Tech 25 Table of Contents and certain other subsidiaries of PAHC due to groundwater contamination from Phibro-Tech’s Santa Fe Springs facility that has allegedly commingled with contaminated groundwater from the Omega Chemical Site.
There can be no assurance that we will have sufficient resources to maintain our current competitive position, however, we believe the following strengths create sustainable competitive advantages that will enable us to continue our growth as a leader in our industry. 20 Table of Contents Products Aligned with Need for Increased Protein Production Increased scarcity of natural resources is increasing the need for efficient production of food animals such as poultry, swine and cattle.
There can be no assurance that we will have sufficient resources to maintain our current competitive position, however, we believe the following strengths create sustainable competitive advantages that will enable us to continue our growth as a leader in our industry.
In February 2023, the plaintiffs in the OPOG lawsuit, and certain defendants in the OPOG lawsuit, including Phibro-Tech, signed a definitive settlement agreement that provides for a “cash-out” settlement, with contribution protection, for Phibro-Tech and its affiliates (as well as certain other defendants) releasing Phibro-Tech and its affiliates from liability for contamination of the groundwater plume affected by the Omega Chemical Site (with certain exceptions), including past and future EPA response costs that were the subject of the August 2022 pre-litigation letter sent by the DOJ on behalf of the EPA.
In February 2023, Phibro-Tech signed a definitive settlement agreement that provided for a “cash-out” settlement, with contribution protection, for Phibro-Tech and its affiliates releasing Phibro-Tech and its affiliates from liability for contamination of the groundwater plume affected by the Omega Chemical Site (with certain exceptions).
We also engage various independent contract research organizations to undertake research and development activities. 23 Table of Contents These facilities provide R&D services relating to: fermentation development and micro-biological strain improvement; vaccine development; chemical synthesis and formulation development; nutritional specialty product development; and ethanol-related products.
These facilities provide R&D services relating to: fermentation development and micro-biological strain improvement; vaccine development; chemical synthesis and formulation development; nutritional specialty product development; and ethanol-related products. 23 Table of Contents Environmental, Health and Safety Our operations and properties are subject to Environmental Laws (as defined below) and regulations.
Installation of additional machinery and equipment is planned while we continue to submit necessary registrations on a country-by-country basis in order to obtain regulatory approvals needed to sell these products to a broader geographic market. ​ We recently completed construction of and received regulatory approval for a new vaccine production facility in Guarulhos, Brazil to manufacture and market autogenous vaccines that combat disease in swine, poultry and aquaculture. ​ Mineral Nutrition Our Mineral Nutrition business manufactures and markets approximately 420 formulations and concentrations of trace minerals such as zinc, manganese, copper, iron and other compounds, with a focus on customers in North America.
We completed construction of a new vaccine production facility in Guarulhos, Brazil in fiscal year 2023 and are now marketing autogenous vaccines that combat disease in swine, poultry and aquaculture for the Brazilian market. ​ Mineral Nutrition Our Mineral Nutrition business manufactures and markets approximately 380 formulations and concentrations of trace minerals such as zinc, manganese, copper, iron and other compounds, with a focus on customers in North America.
Our animal health products, including our MFAs, vaccines and nutritional specialty products, help prevent and manage disease outbreaks and enhance nutrition to help support natural defenses against diseases. These products are often critical to our customers’ efficient production of healthy animals.
Products Aligned with Need for Increased Protein Production Increased scarcity of natural resources is increasing the need for efficient production of food animals such as poultry, swine and cattle. Our animal health products, including our MFAs, vaccines and nutritional specialty products, help prevent and manage disease outbreaks and enhance nutrition to help support natural defenses against diseases.
In addition, private plaintiffs may initiate lawsuits for personal injury, property damage, diminution in property value or other relief as a result of our operations. Environmental Laws, and the interpretation or enforcement thereof, are subject to change and may become more stringent in the future, potentially resulting in substantial future costs or capital or operating expenses.
Failure to comply with Environmental Laws may result in the temporary or permanent suspension of operations and/or permits, limitations on production, or increased operating costs. In addition, private plaintiffs may initiate lawsuits for personal injury, property damage, diminution in property value or other relief as a result of our operations.
OmniGen ® is a proprietary nutritional specialty product line designed to help maintain a cow’s healthy immune system, improve their natural response to potential environmental stressors and health challenges, and improve productivity. 12 Table of Contents Magni-Phi ® is a proprietary blend of saponins, triterpenoids and polyphenols (classes of phytogenic feed additives or natural botanicals) that helps improve intestinal health and immune response which may lead to improved absorption and utilization of nutrients for poultry.
Magni-Phi ® and Magni-Phi ® Ultra are a proprietary blend of saponins, triterpenoids and polyphenols (classes of phytogenic feed additives or natural botanicals) that help improve intestinal health and immune response which may lead to improved absorption and utilization of nutrients for poultry. 12 Table of Contents Cellerate Yeast Solutions ® is a line of proprietary yeast culture and yeast culture blends with yeast fractions and/or live cell yeast used in all classes of livestock and companion animals for improved digestive health.
As part of the settlement, Phibro-Tech also resolved all claims for indemnification and contribution between Phibro-Tech and the successor to the prior owner of the Phibro-Tech site. The definitive settlement agreement contemplates cash payments by Phibro-Tech and one of its affiliates over a period ending in February 2024.
The settlement agreement does not constitute an admission of liability on the part of Phibro-Tech or its affiliates. As part of the settlement, Phibro-Tech also resolved all claims for indemnification and contribution between Phibro-Tech and the successor to the prior owner of the Phibro-Tech site.
Our technology, brands and other intellectual property are important elements of our business. We rely on patent, trademark, copyright and trade secret laws, as well as non-disclosure agreements, to protect our intellectual property rights. Our policy is to vigorously protect, enforce and defend our rights to our intellectual property, as appropriate.
We rely on patent, trademark, copyright and trade secret laws, as well as non-disclosure agreements, to protect our intellectual property rights. Our policy is to vigorously protect, enforce and defend our rights to our intellectual property, as appropriate. Compliance with Government Regulation Many of our animal health and mineral nutrition products require licensing by a governmental agency before marketing.
Compliance with Government Regulation Many of our animal health and mineral nutrition products require licensing by a governmental agency before marketing. To maintain compliance with these regulatory requirements, we have established processes, systems and dedicated resources with end-to-end involvement from product concept to launch and maintenance in the market.
To maintain compliance with these regulatory requirements, we have established processes, systems and dedicated resources with end-to-end involvement from product concept to launch and maintenance in the market. Our regulatory function seeks to engage in dialogue with various global agencies regarding their policies that relate to animal health products.
The “MFAs and other products” product group also includes antibacterial products and other processing aids used in the ethanol fermentation industry. Approximately 44% of our MFAs and other sales in the fiscal year 2023 were to the poultry industry, with sales to swine, beef and dairy cattle and other customers accounting for the remainder.
Approximately 43% of our MFAs and other sales in fiscal year 2024 were to the poultry industry, with sales to swine, beef and dairy cattle and other customers accounting for the remainder. We market our MFAs and other products in all regions where we do business.
Finally, product approvals may be withdrawn if compliance with regulatory standards is not maintained or if problems occur following initial marketing. Among the conditions for NADA or ANADA approval is the requirement that the prospective manufacturer’s quality control and manufacturing procedures conform to FDA’s current Good Manufacturing Practice (“cGMP”) regulations.
Among the conditions for NADA or ANADA approval is the requirement that the prospective manufacturer’s quality control and manufacturing procedures conform to FDA’s current Good Manufacturing Practice (“cGMP”) regulations. A manufacturing facility is periodically inspected by the FDA for determination of compliance with cGMP after an initial pre-approval inspection.
The drug development process for human therapeutics is generally more involved than that for animal drugs.
The drug development process for human therapeutics is generally more involved than that for animal drugs. However, because human food safety and environmental safety are issues for food-producing animals, the animal drug approval process for food-producing animals typically takes longer than for companion animals.
When we thrive as individuals and teams, the Company thrives. We promote from within wherever possible, safeguard the confidentiality of employee records and keep employees informed of issues affecting them. Cultivating One Leader at a Time Our proprietary Leadership Model is a framework that guides how our people plan and act to advance company priorities.
Cultivating One Leader at a Time Our proprietary Leadership Model is a framework that guides how our people plan and act to advance company priorities.
Should we be unable to successfully defend the safety of the product, the loss of carbadox sales will have an adverse effect on our financial condition and results of operations. Sales of Mecadox (carbadox) for the year ended June 30, 2023 were approximately $20 million.
In January 2024, Phibro filed a lawsuit in the D.C. Federal District Court asking the court to invalidate the order which revoked the regulatory method for carbadox. Should we be unable to successfully defend the safety of the product, the loss of carbadox sales will have an adverse effect on our financial condition and results of operations.
However, because human food safety and environmental safety are issues for food-producing animals, the animal drug approval process for food-producing animals typically takes longer than for companion animals. 16 Table of Contents The FDA may deny an NADA or ANADA if applicable regulatory criteria are not satisfied, require additional testing or information, or require post-marketing testing and surveillance to monitor the safety or efficacy of a product.
The FDA may deny an NADA or ANADA if applicable regulatory criteria are not satisfied, require additional testing or information, or require post-marketing testing and surveillance to monitor the safety or efficacy of a product. There can be no assurances that FDA approval of any NADA or ANADA will be granted on a timely basis, or at all.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeSuch contracts generally are entered into with respect to anticipated costs denominated in foreign currencies for which timing of the payment can be reasonably estimated. No assurances can be given that such hedging activities will not result in, or will be successful in preventing, losses that could have an adverse effect on our financial condition or results of operations.
Biggest changeNo assurances can be given that such hedging activities will not result in, or will be successful in preventing, losses that could have an adverse effect on our financial condition or results of operations. There are times when we do not hedge against foreign currency fluctuations and therefore are subject to the risks associated with fluctuations in currency exchange rates.
Department of the Treasury; ● government limitations on foreign ownership; 34 Table of Contents ● government takeover or nationalization of businesses; ● changes in tax laws and tariffs; ● changes in the economic, business, competitive and regulatory environment, including changes in the value of foreign currencies relative to the U.S. dollar or high inflation; ● imposition of anti-dumping and countervailing duties or other trade-related sanctions; ● costs and difficulties and compliance risks in staffing, managing and monitoring international operations; ● corruption risk inherent in business arrangements and regulatory contacts with foreign government entities; ● longer payment cycles and increased exposure to counterparty risk; and ● additional limitations on transferring personal information between countries or other restrictions on the processing of personal information.
Department of the Treasury; ● government limitations on foreign ownership; ● government takeover or nationalization of businesses; ● changes in tax laws and tariffs; ● changes in the economic, business, competitive and regulatory environment, including changes in the value of foreign currencies relative to the U.S. dollar or high inflation; 34 Table of Contents ● imposition of anti-dumping and countervailing duties or other trade-related sanctions; ● costs and difficulties and compliance risks in staffing, managing and monitoring international operations; ● corruption risk inherent in business arrangements and regulatory contacts with foreign government entities; ● longer payment cycles and increased exposure to counterparty risk; and ● additional limitations on transferring personal information between countries or other restrictions on the processing of personal information.
See “Business — Environmental, Health and Safety.” We cannot 37 Table of Contents assure you that our operations or activities or those of certain of our subsidiaries, including with respect to compliance with Environmental Laws, will not result in civil or criminal enforcement actions or private actions, regulatory or judicial orders enjoining or curtailing operations or requiring corrective measures, installation of pollution control equipment or remedial measures or costs, revocation of required Environmental Permits, or fines, penalties or damages, which could have a material adverse effect on our business, financial condition and results of operations.
See “Business — Environmental, Health and Safety.” We cannot assure you that our operations or activities or those of certain of our subsidiaries, including with respect to compliance with Environmental Laws, will not result in civil or criminal enforcement actions or private actions, regulatory or judicial orders enjoining or curtailing operations or requiring corrective measures, installation of pollution control equipment or remedial measures or costs, revocation of required Environmental Permits, or fines, penalties or damages, 37 Table of Contents which could have a material adverse effect on our business, financial condition and results of operations.
We are subject to change of control provisions. We are a party to certain contractual arrangements that are subject to change of control provisions. In this context, “change of control” is generally defined as including (a) any person or group, other than Mr. Jack C.
We are a party to certain contractual arrangements that are subject to change of control provisions. In this context, “change of control” is generally defined as including (a) any person or group, other than Mr. Jack C.
Some of our principal competitors include Boehringer Ingelheim International GmbH, Ceva Santé Animale, Elanco Animal Health Incorporated, Huvepharma Inc., Merck & Co., Inc. (Merck Animal Health and MSD Animal Health), Southeastern Minerals, Inc. and Zoetis Inc.
Some of our principal competitors include Boehringer Ingelheim International GmbH, Ceva Santé Animale, Elanco Animal Health Incorporated, Huvepharma Inc., Merck & Co., Inc. (Merck Animal Health and MSD Animal Health), Southeastern Minerals, Inc. and Zoetis.
In particular, we may face greater than expected costs, time and effort involved in completing and integrating acquisitions and potential disruption of our ongoing business. Furthermore, we may realize fewer, if any, synergies than envisaged.
In particular, we may face greater than expected costs, time and effort involved in completing and integrating such acquisitions and potential disruption of our ongoing business. Furthermore, we may realize fewer, if any, synergies than envisaged.
Inventory levels at our distributors may increase or decrease as a result of various factors, including end customer demand, new customer contracts, the influence of competition, political and socio-economic climate, contractual obligations related to minimum inventory levels, changing perceptions, including those of alternative products, our ability to renew distribution contracts with expected terms, our ability to implement commercial strategies, regulatory restrictions, armed conflicts, unexpected customer behavior, proactive measures taken by us in response to shifting market dynamics and procedures and environmental factors beyond our control, including weather conditions or an outbreak of infectious disease such as COVID-19 or diseases carried by farm animals such as African Swine fever.
Inventory levels at our distributors may increase or decrease as a result of various factors, including end customer demand, new customer contracts, the influence of competition, political and socio-economic climate, contractual obligations related to minimum inventory levels, changing perceptions, including those of alternative products, our ability to renew distribution contracts with expected terms, our ability to implement commercial strategies, 43 Table of Contents regulatory restrictions, armed conflicts, unexpected customer behavior, proactive measures taken by us in response to shifting market dynamics and procedures and environmental factors beyond our control, including weather conditions or an outbreak of infectious disease such as COVID-19 or diseases carried by farm animals such as African Swine fever.
The market price of our Class A common stock may fluctuate significantly in response to a number of factors, many of which we cannot control, including those described under “— Risk Factors Relating to Our Business” and the following: ● changes in financial estimates by any securities analysts who follow our Class A common stock, our failure to meet these estimates or failure of those analysts to initiate or maintain coverage of our Class A common stock; ● downgrades by any securities analysts who follow our Class A common stock; ● future sales of our Class A common stock by our officers, directors and significant stockholders; 47 Table of Contents ● market conditions or trends in our industry or the economy as a whole and, in particular, in the animal health industry; ● investors’ perceptions of our prospects; ● announcements by us or our competitors of significant contracts, acquisitions, joint ventures or capital commitments; and ● changes in key personnel.
The market price of our Class A common stock may fluctuate significantly in response to a number of factors, many of which we cannot control, including those described under “— Risk Factors Relating to Our Business” and the following: ● changes in financial estimates by any securities analysts who follow our Class A common stock, our failure to meet these estimates or failure of those analysts to initiate or maintain coverage of our Class A common stock; ● downgrades by any securities analysts who follow our Class A common stock; ● future sales of our Class A common stock by our officers, directors and significant stockholders; ● market conditions or trends in our industry or the economy as a whole and, in particular, in the animal health industry; ● investors’ perceptions of our prospects; ● announcements by us or our competitors of significant contracts, acquisitions, joint ventures or capital commitments; and ● changes in key personnel.
We are subject to the U.S. Foreign Corrupt Practices Act and other anti-corruption laws or trade control laws, as well as other laws governing our operations.
We are subject to the U.S. Foreign Corrupt Practices Act and other anti-corruption laws or trade control laws, as well as other laws governing our international operations.
Any actual or perceived access, disclosure or other loss of information or any significant breakdown, intrusion, interruption, cyber-attack or corruption of customer, employee or company data or our failure to comply with federal, state, local and foreign privacy laws or contractual obligations with customers, vendors, payment processors and other 45 Table of Contents third parties, could result in legal claims or proceedings, liability under laws or contracts that protect the privacy of personal information, regulatory penalties, disruption of our operations and damage to our reputation, all of which could materially adversely affect our business, revenue and competitive position.
Any actual or perceived access, disclosure or other loss of information or any significant breakdown, intrusion, interruption, cyber-attack or corruption of customer, employee or company data or our failure to comply with federal, state, local and foreign privacy laws or contractual obligations with customers, vendors, payment processors and other third parties, could result in legal claims or proceedings, liability under laws or contracts that protect the privacy of personal information, regulatory penalties, disruption of our operations and damage to our reputation, all of which could materially adversely affect our business, revenue and competitive position.
BFI, which holds all of our outstanding Class B common stock, has the right to require us to register the sales of their shares under the Securities Act under the terms of an agreement between us and the holders of these securities. In the future, we may also issue our securities in connection with investments or acquisitions.
BFI, which holds all of our outstanding Class B common stock, has the right to require us to register the sales of its shares under the Securities Act under the terms of an agreement between us and the holders of these securities. In the future, we may also issue our securities in connection with investments or acquisitions.
The terms of the 2021 Credit Facilities contain certain covenants that limit our ability and that of our subsidiaries to create liens, merge or consolidate, dispose of assets, incur indebtedness and guarantees, repurchase or redeem capital stock and indebtedness, make certain investments or acquisitions, enter into certain transactions with affiliates or change the nature of our business.
The terms of the 2024 Credit Facilities contain certain covenants that limit our ability and that of our subsidiaries to create liens, merge or consolidate, dispose of assets, incur indebtedness and guarantees, repurchase or redeem capital stock and indebtedness, make certain investments or acquisitions, enter into certain transactions with affiliates or change the nature of our business.
Matters over which BFI, directly or indirectly, exercises control include: ● the election of our Board of Directors and the appointment and removal of our officers; ● mergers and other business combination transactions, including proposed transactions that would result in our stockholders receiving a premium price for their shares; ● other acquisitions or dispositions of businesses or assets; ● incurrence of indebtedness and the issuance of equity securities; ● repurchase of stock and payment of dividends; and ● the issuance of shares to management under our equity incentive plans.
Matters over which BFI, directly or indirectly, exercises control include: ● the election of our Board of Directors and the appointment and removal of our officers; 48 Table of Contents ● mergers and other business combination transactions, including proposed transactions that would result in our stockholders receiving a premium price for their shares; ● other acquisitions or dispositions of businesses or assets; ● incurrence of indebtedness and the issuance of equity securities; ● repurchase of stock and payment of dividends; and ● the issuance of shares to management under our equity incentive plans.
Our 2021 Credit Facilities permit us to pay distributions to stockholders out of available cash subject to certain annual limitations and so long as no default or event of default under the 2021 Credit Facilities shall have occurred and be continuing at the time such distribution is declared.
Our 2024 Credit Facilities permit us to pay distributions to stockholders out of available cash subject to certain annual limitations and so long as no default or event of default under the 2024 Credit Facilities shall have occurred and be continuing at the time such distribution is declared.
Under Nasdaq rules, a company of which more than 50% of the voting power is held by an individual, group or another company is a “controlled company” and may elect not to comply with certain corporate governance requirements, including: ● the requirement that a majority of the Board consists of independent directors; ● the requirement that we have a nominating and corporate governance committee and that it is composed entirely of independent directors; and ● the requirement for an annual performance evaluation of the nominating and corporate governance and compensation committees.
Under Nasdaq rules, a company of which more than 50% of the voting power is held by an individual, group or another company is a “controlled company” and may elect not to comply with certain corporate governance requirements, including: 47 Table of Contents ● the requirement that a majority of the Board consists of independent directors; ● the requirement that we have a nominating and corporate governance committee and that it is composed entirely of independent directors; and ● the requirement for an annual performance evaluation of the nominating and corporate governance and compensation committees.
For instance, it could: ● make it more difficult for us to satisfy our financial obligations, including those relating to the 2021 Credit Facilities; 43 Table of Contents ● require us to dedicate a substantial portion of any cash flow from operations to the payment of interest and principal due under our debt, which will reduce funds available for other business purposes, including capital expenditures and acquisitions; ● increase our vulnerability to general adverse economic and industry conditions; ● limit our flexibility in planning for or reacting to changes in our business and the industry in which we operate; ● place us at a competitive disadvantage compared with some of our competitors that may have less debt and better access to capital resources; and ● limit our ability to obtain additional financing required to fund working capital and capital expenditures and for other general corporate purposes.
For instance, it could: ● make it more difficult for us to satisfy our financial obligations, including those relating to the 2024 Credit Facilities; ● require us to dedicate a substantial portion of any cash flow from operations to the payment of interest and principal due under our debt, which will reduce funds available for other business purposes, including capital expenditures and acquisitions; ● increase our vulnerability to general adverse economic and industry conditions; ● limit our flexibility in planning for or reacting to changes in our business and the industry in which we operate; ● place us at a competitive disadvantage compared with some of our competitors that may have less debt and better access to capital resources; and ● limit our ability to obtain additional financing required to fund working capital and capital expenditures and for other general corporate purposes.
We cannot be certain that a competitor or other third party does not have or will not obtain rights to intellectual property that may prevent us from manufacturing, developing or marketing certain of our products, regardless of whether we believe such intellectual property rights are valid and enforceable or we believe we would be otherwise able to develop a more commercially successful product, which may harm our financial condition and results of operations.
We cannot be certain that a competitor or other third party does not have or will not obtain rights to intellectual property that may prevent us from manufacturing, developing or marketing certain of our products, regardless of whether we believe such intellectual property rights are valid and 41 Table of Contents enforceable or we believe we would be otherwise able to develop a more commercially successful product, which may harm our financial condition and results of operations.
In addition, demand for protein could be reduced because consumers may associate human health fears related to COVID-19 of other outbreaks with animal diseases, food, food production or food animals, whether it is scientifically valid.
In addition, demand for protein could be reduced because consumers may associate human health fears related to COVID-19 or other outbreaks with animal diseases, food, food production or food animals, whether or not it is scientifically valid.
If we are not in compliance with the FCPA and other anti-corruption laws or Trade Control laws, we may be subject to criminal and civil 42 Table of Contents penalties, disgorgement and other sanctions and remedial measures, and legal expenses, which could have an adverse impact on our business, financial condition, results of operations and liquidity.
If we are not in compliance with the FCPA and other anti-corruption laws or Trade Control laws, we may be subject to criminal and civil penalties, disgorgement and other sanctions and remedial measures, and legal expenses, which could have an adverse impact on our business, financial condition, results of operations and liquidity.
Although no single raw material accounted for more than 5% of our cost of goods sold for the year ended June 30, 2023, volatility in raw material costs can result in significant fluctuations in our costs of goods sold of the affected products.
Although no single raw material accounted for more than 5% of our cost of goods sold for the year ended June 30, 2024, volatility in raw material costs can result in significant fluctuations in our cost of goods sold of the affected products.
If any one of these third parties discontinues its supply to us because of changes in the regulatory environment to which such third parties are subject, significant regulatory violations or for any other reason, or an adverse event occurs at one of their facilities, the interruption in the supply of these materials could decrease sales of our affected products.
If any one of these third parties discontinues its supply to us because of changes in the regulatory environment to which such third parties are subject, significant regulatory violations or for any other reason, or an 32 Table of Contents adverse event occurs at one of their facilities, the interruption in the supply of these materials could decrease sales of our affected products.
The FDA objective, as described in GFI 209 and GFI 213, was to eliminate the production (non-therapeutic) uses of medically important antimicrobials administered in feed or water to food producing animals while providing for the continued use of medically important antimicrobials in food-producing animals for treatment, control and prevention of disease (“therapeutic” use) under the 28 Table of Contents supervision of a veterinarian.
The FDA objective, as described in GFI 209 and GFI 213, was to eliminate the production (non-therapeutic) uses of medically important antimicrobials administered in feed or water to food producing animals while providing for the continued use of medically important antimicrobials in food-producing animals for treatment, control and prevention of disease (“therapeutic” use) under the supervision of a veterinarian.
Climate change regulations continue to evolve, and it is not possible to accurately estimate potential future compliance costs. The testing, manufacturing and marketing of certain of our products are subject to extensive regulation by numerous government authorities in the United States and other countries, including, but not limited to, the FDA.
Climate change regulations continue to evolve, and it is not possible to accurately estimate potential future compliance costs. 30 Table of Contents The testing, manufacturing and marketing of certain of our products are subject to extensive regulation by numerous government authorities in the United States and other countries, including, but not limited to, the FDA.
Restrictions imposed by our outstanding indebtedness, including the restrictions contained in our 2021 Credit Facilities, may limit our ability to operate our business and to finance our future operations or capital needs or to engage in other business activities.
Restrictions imposed by our outstanding indebtedness, including the restrictions contained in our 2024 Credit Facilities, may limit our ability to operate our business and to finance our future operations or capital needs or to engage in other business activities.
Failure by these providers to adequately service our operations or a change in control or insolvency of these providers could have an adverse effect on our business, which in turn may materially adversely affect our business, financial condition or results of operations. We may be required to write down goodwill or identifiable intangible assets.
Failure by these providers to 45 Table of Contents adequately service our operations or a change in control or insolvency of these providers could have an adverse effect on our business, which in turn may materially adversely affect our business, financial condition or results of operations. We may be required to write down goodwill or identifiable intangible assets.
The amount of shares of our Class A common stock issued in connection with an investment or acquisition could constitute a material portion of our then-outstanding shares of our Class A common stock. 48 Table of Contents Anti-takeover provisions in our charter documents and Delaware law might discourage or delay acquisition attempts for us that you might consider favorable.
The amount of shares of our Class A common stock issued in connection with an investment or acquisition could constitute a material portion of our then-outstanding shares of our Class A common stock. Anti-takeover provisions in our charter documents and Delaware law might discourage or delay acquisition attempts for us that you might consider favorable.
Insurance is expensive and, in the future, may not be available on acceptable terms, if at all. A successful claim or series of claims brought against us in excess of our insurance coverage could have a materially adverse effect on our business, financial condition 38 Table of Contents and results of operations.
Insurance is expensive and, in the future, may not be available on acceptable terms, if at all. A successful claim or series of claims brought against us in excess of our insurance coverage could have a materially adverse effect on our business, financial condition and results of operations.
In addition, any claims, even if not ultimately successful, could adversely affect the marketplace’s acceptance of our products. We are subject to risks from litigation that may materially impact our operations. We face an inherent business risk of exposure to various types of claims and lawsuits.
In addition, any claims, even if not ultimately successful, could adversely affect the marketplace’s acceptance of our products. 38 Table of Contents We are subject to risks from litigation that may materially impact our operations. We face an inherent business risk of exposure to various types of claims and lawsuits.
In the event that BFI obtains business opportunities from which we might otherwise benefit but chooses not to present such opportunities to us, these provisions of our certificate of incorporation could have the effect of 49 Table of Contents preventing us from pursuing transactions or relationships that would otherwise be in the best interests of our stockholders.
In the event that BFI obtains business opportunities from which we might otherwise benefit but chooses not to present such opportunities to us, these provisions of our certificate of incorporation could have the effect of preventing us from pursuing transactions or relationships that would otherwise be in the best interests of our stockholders.
Our medicated products business is comprised of a relatively small number of compounds and accounted for approximately 40% of net sales for each of the years ended June 30, 2023 and 2022.
Our medicated products business is comprised of a relatively small number of compounds and accounted for approximately 40% of net sales for each of the years ended June 30, 2024 and 2023.
The unpredictability of a product’s regulatory or commercial success or failure, the lead time necessary to construct highly technical and complex manufacturing sites and shifting customer demand (including as a result of market conditions or entry of branded or generic competition) increase the potential for capacity imbalances.
The unpredictability of a product’s regulatory or commercial success or failure, the 33 Table of Contents lead time necessary to construct highly technical and complex manufacturing sites and shifting customer demand (including as a result of market conditions or entry of branded or generic competition) increase the potential for capacity imbalances.
Our revenues and operating results may be affected by uncertain or changing economic and market conditions, including as a result of a resurgence of COVID-19 pandemic or other similar public health crises, and other challenges faced in the credit markets and financial services industry.
Our revenues and operating results may be affected by uncertain or changing economic and market 39 Table of Contents conditions, including as a result of a resurgence of the COVID-19 pandemic or other similar public health crises, and other challenges faced in the credit markets and financial services industry.
Adverse economic and market conditions could also negatively impact our business by negatively affecting the parties with whom we do business, including among others, our customers, our manufacturers and our suppliers. 39 Table of Contents We may not be able to realize the expected benefits of our investments in emerging markets.
Adverse economic and market conditions could also negatively impact our business by negatively affecting the parties with whom we do business, including among others, our customers, our manufacturers and our suppliers. We may not be able to realize the expected benefits of our investments in emerging markets.
Moreover, certain transactions could adversely impact earnings as we incur development and other expenses related to the transactions and we could incur debt to complete these transactions. Debt instruments could contain 51 Table of Contents contractual commitments and covenants that could adversely affect our cash flow and our ability to operate our business, financial condition and results of operations.
Moreover, certain transactions could adversely impact earnings as we incur development and other expenses related to the transactions and we could incur debt to complete these transactions. Debt instruments could contain contractual commitments and covenants that could adversely affect our cash flow and our ability to operate our business, financial condition and results of operations.
Foreign Corrupt Practices Act (“FCPA”) and similar non-U.S. laws and regulations; ● compliance with foreign labor laws; ● compliance with Environmental Laws; ● burdens to comply with multiple and potentially conflicting foreign laws and regulations, including those relating to EHS requirements; ● changes in laws, regulations, government controls or enforcement practices with respect to our business and the businesses of our customers; ● political and social instability, including crime, civil disturbance, terrorist activities, outbreaks of disease and pandemics and armed conflicts, such as the ongoing conflict between Russia and Ukraine; ● trade restrictions, export controls and sanctions laws and restrictions on direct investments by foreign entities, including restrictions administered by the Office of Foreign Assets Control of the U.S.
Foreign Corrupt Practices Act (“FCPA”) and similar non-U.S. laws and regulations; ● compliance with foreign labor laws; ● compliance with Environmental Laws; ● burdens to comply with multiple and potentially conflicting foreign laws and regulations, including those relating to EHS requirements; ● changes in laws, regulations, government controls or enforcement practices with respect to our business and the businesses of our customers; ● political and social instability, including crime, civil disturbance, terrorist activities, outbreaks of disease and pandemics and armed conflicts, such as the ongoing conflicts between Israel and Hamas (and potential broader military conflict in the region) and between Russia and Ukraine; ● trade restrictions, export controls and sanctions laws and restrictions on direct investments by foreign entities, including restrictions administered by the Office of Foreign Assets Control of the U.S.
Further, if we succeed in identifying and consummating appropriate acquisitions on acceptable terms, we may not be able to successfully integrate the products, services and personnel of any acquired businesses on a basis consistent with our current business practice.
Further, if we succeed in identifying and consummating appropriate acquisitions on acceptable terms, we may not be able to successfully integrate the products, services and personnel of any acquired businesses, including the Proposed Acquisition, on a basis consistent with our current business practice.
Our livestock producer customers may offset rising costs by reducing spending on our products, including by switching to lower-cost alternatives to our products. 31 Table of Contents Generic products may be viewed as more cost-effective than certain of our products. We face competition from products produced by other companies, including generic alternatives to certain of our products.
Our livestock producer customers may offset rising costs by reducing spending on our products, including by switching to lower-cost alternatives to our products. Generic products may be viewed as more cost-effective than certain of our products. We face competition from products produced by other companies, including generic alternatives to certain of our products.
There has been a broad range of proposed and promulgated state, national and international regulations aimed at reducing the effects of climate change. Such regulations could result in additional costs to maintain compliance and 30 Table of Contents additional income or other taxes.
There has been a broad range of proposed and promulgated state, national and international regulations aimed at reducing the effects of climate change. Such regulations could result in additional costs to maintain compliance and additional income or other taxes.
We depend primarily on trade secrets to provide us with competitive advantages for many of our products. The protection afforded is limited by the availability of new competitive products or generic versions of existing products that can successfully compete with our products.
We depend primarily on trade secrets to provide us with competitive advantages for many of our products. The 31 Table of Contents protection afforded is limited by the availability of new competitive products or generic versions of existing products that can successfully compete with our products.
The FDA indicated that it took this action to help preserve the efficacy of medically important antimicrobials to treat infections in humans. Our global sales of antibacterials, anticoccidials and other products, including our Mecadox product, were $387 million, $362 million and $330 million for the years ended June 30, 2023, 2022 and 2021, respectively.
The FDA indicated that it took this action to help preserve the efficacy of medically important antimicrobials to treat infections in humans. Our global sales of antibacterials, anticoccidials and other products, including our Mecadox product, were $421 million, $387 million and $362 million for the years ended June 30, 2024, 2023 and 2022, respectively.
These provisions could also discourage proxy contests and make it more difficult for you and other stockholders to elect directors of your choosing and to cause us to take other corporate actions you desire.
These 49 Table of Contents provisions could also discourage proxy contests and make it more difficult for you and other stockholders to elect directors of your choosing and to cause us to take other corporate actions you desire.
If we are unable to establish or maintain appropriate internal financial reporting controls and procedures, it could cause us to fail 50 Table of Contents to meet our reporting obligations on a timely basis, result in material misstatements in our consolidated financial statements and harm our operating results.
If we are unable to establish or maintain appropriate internal financial reporting controls and procedures, it could cause us to fail to meet our reporting obligations on a timely basis, result in material misstatements in our consolidated financial statements and harm our operating results.
Furthermore, our exposure to credit and collectability risk and cybersecurity risk is higher in certain international markets and as a result of the crisis resulting from the ongoing armed conflict between Russia and Ukraine, our ability to mitigate such risks may be limited.
Furthermore, our exposure to credit and collectability risk and cybersecurity risk is higher in certain international markets and as a result of the crisis resulting from the ongoing armed conflicts between Israel and Hamas and between Russia and Ukraine, our ability to mitigate such risks may be limited.
As of August 25, 2023, BFI Co., LLC (“BFI”) beneficially owns 59,480 shares of our Class A common stock and 20,166,034 shares of our Class B common stock, which together represent approximately 90.9% of the combined voting power of all classes of our outstanding common stock.
As of August 23, 2024, BFI Co., LLC (“BFI”) beneficially owns 59,480 shares of our Class A common stock and 20,166,034 shares of our Class B common stock, which together represent approximately 90.9% of the combined voting power of all classes of our outstanding common stock.
Certain of our product lines are 33 Table of Contents manufactured at a single facility, and certain of our product lines are manufactured at a single facility with limited capacity at a second facility, and production would not be easily transferable to another site.
Certain of our product lines are manufactured at a single facility, and certain of our product lines are manufactured at a single facility with limited capacity at a second facility, and production would not be easily transferable to another site.
Our Israeli manufacturing facilities and local operations accounted for 27% and 28% of our consolidated assets, as of June 30, 2023 and 2022, and 19% and 19% of our consolidated net sales for the years ended June 30, 2023 and 2022, respectively.
Our Israeli manufacturing facilities and local operations accounted for 28% and 27% of our consolidated assets, as of June 30, 2024 and 2023, and 21% and 19% of our consolidated net sales for the years ended June 30, 2024 and 2023, respectively.
However, we may be unable to identify suitable targets, and competition for acquisitions may make it difficult for us to consummate acquisitions on acceptable terms or at all.
However, we may be unable to identify suitable targets in the future, and competition for acquisitions may make it difficult for us to consummate acquisitions on acceptable terms or at all.
To the extent these companies or new entrants offer comparable animal health, mineral nutrition or performance products at lower prices, our business could be adversely affected. New entrants could substantially reduce our market share or render our products obsolete.
To the extent these companies or new entrants offer comparable animal health, 50 Table of Contents mineral nutrition or performance products at lower prices, our business could be adversely affected. New entrants could substantially reduce our market share or render our products obsolete.
Consumers may associate human health fears with animal diseases, food, food production or food animals whether or not it is scientifically valid, which may have an adverse impact on the 27 Table of Contents demand for animal protein.
Consumers may associate human health fears with animal diseases, food, food production or food animals whether or not it is scientifically valid, which may have an adverse impact on the demand for animal protein.
We have a paid a quarterly dividend since September 2014 on our Class A and Class B common stock and our Board of Directors has declared a cash dividend of $0.12 per share on our Class A common stock and Class B common stock that is payable September 27, 2023.
We have a paid a quarterly dividend since September 2014 on our Class A and Class B common stock and our Board of Directors has declared a cash dividend of $0.12 per share on our Class A common stock and Class B common stock that is payable September 25, 2024.
We may not be able to expand through acquisitions or successfully integrate the products, services and personnel of acquired businesses. From time to time, we may make selective acquisitions to expand our range of products and services and to expand the geographic scope of our business.
We may not be able to expand through acquisitions or successfully integrate the products, services and personnel of acquired businesses. From time to time, we may make selective acquisitions to expand our range of products and services and to expand the geographic scope of our business, such as the Proposed Acquisition.
Our Brazilian manufacturing facilities and local operations accounted for 14% and 12% of our consolidated assets, as of June 30, 2023 and 2022, respectively, and 16% and 15% of our consolidated net sales for the years ended June 30, 2023 and 2022, respectively. We maintain manufacturing facilities in Brazil, which manufacture virginiamycin, semduramicin, salinomycin and nicarbazin.
Our Brazilian manufacturing facilities and local operations accounted for 14% of our consolidated assets, as of June 30, 2024 and 2023, and 16% of our consolidated net sales for the years ended June 30, 2024 and 2023. We maintain manufacturing facilities in Brazil, which manufacture virginiamycin, semduramicin, salinomycin and nicarbazin.
Our business, financial condition and results of operations in Israel may be adversely affected by factors outside of our control, such as currency fluctuations, energy shortages and other political, social and economic developments in or affecting Israel, including as a result of the impact of the COVID-19 pandemic in Israel.
Our business, financial condition and results of operations in Israel may be adversely affected by factors outside of our control, such as currency fluctuations, energy shortages and other political, social and economic developments in or affecting Israel, including as a result of the impact of any resurgence of the COVID-19 pandemic or the ongoing conflict between Israel and Hamas.
In addition, international transactions may involve increased financial and legal risks due to differing legal systems and customs, as well as restrictions and sanctions that may be imposed on one or more persons and/or jurisdictions in which we operate, including those arising from the ongoing armed conflict between Russia and Ukraine.
In addition, international transactions may involve increased financial and legal risks due to differing legal systems and customs, as well as restrictions and sanctions that may be imposed on one or more persons and/or jurisdictions in which we operate, including those arising from the ongoing armed conflicts between Israel and Hamas (and potential broader military conflict in the region) and between Russia and Ukraine.
Any such changes may trigger a “change of control” event that could result in us being forced to repay the 2021 Credit Facilities (which includes our 2023 Incremental Term Loan) or lead to the termination of a significant contract to which we are a party. If any such event occurs, this may negatively affect our financial condition and operating results.
Any such changes may trigger a “change of control” event that could result in us being forced to repay the 2024 Credit Facilities or lead to the termination of a significant contract to which we are a party. If any such event occurs, this may negatively affect our financial condition and operating results.
There is no guarantee that supply shortages or disruptions of such raw materials will not occur and the likelihood of such supply shortages and disruptions has been, and may continue to be, increased due to global supply chain disruptions, including those caused by the COVID-19 pandemic and the ongoing conflict between Russia and Ukraine.
There is no guarantee that supply shortages or disruptions of such raw materials will not occur and the likelihood of such supply shortages and disruptions has been, and may continue to be, increased due to global supply chain disruptions, including those caused by the COVID-19 pandemic or similar health crises and the ongoing conflicts between Israel and Hamas and between Russia and Ukraine.
Livestock producers may experience increased feed, fuel, transportation and other key costs or may experience decreased animal protein prices or sales, inflationary pressures as a result of interest rate increases or otherwise and including as a result of the uncertainties and potential economic downturn relating to a resurgence of the COVID-19 pandemic or relating to the ongoing armed conflict between Russia and Ukraine.
Livestock producers may experience increased feed, fuel, transportation and other key costs or may experience decreased animal protein prices or sales, inflationary pressures as a result of interest rate increases or otherwise and including as a result of the uncertainties and potential economic downturn relating to a resurgence of the COVID-19 pandemic or similar public health crises, or relating to armed conflicts, including the ongoing conflicts between Israel and Hamas and between Russia and Ukraine.
Under generally accepted accounting principles in the United States (“GAAP”), if we determine goodwill or identifiable intangible assets are impaired, we will be required to write down these assets and record a non-cash impairment charge. As of June 30, 2023, we had goodwill of $53.3 million and identifiable intangible assets, less accumulated amortization, of $55.0 million.
Under generally accepted accounting principles in the United States (“GAAP”), if we determine goodwill or identifiable intangible assets are impaired, we will be required to write down these assets and record a non-cash impairment charge. As of June 30, 2024, we had goodwill of $54.6 million and identifiable intangible assets, less accumulated amortization, of $45.0 million.
As of August 25, 2023, our other stockholders collectively own interests representing approximately 9.1% of the combined voting power of all classes of our outstanding common stock.
As of August 23, 2024, our other stockholders collectively own interests representing approximately 9.1% of the combined voting power of all classes of our outstanding common stock.
A third party may sue us, our distributors or licensors, or otherwise make a claim, alleging infringement or other violation of the third-party’s patents, trademarks, trade dress, copyrights, trade secrets, domain names or other intellectual property rights.
The actual or purported intellectual property rights of third parties may negatively affect our business. A third party may sue us, our distributors or licensors, or otherwise make a claim, alleging infringement or other violation of the third-party’s patents, trademarks, trade dress, copyrights, trade secrets, domain names or other intellectual property rights.
Our ability to make scheduled payments on or refinance our debt obligations depends on our financial condition and operating performance, which are subject to prevailing economic and competitive conditions and to certain financial, business, legislative, regulatory and other factors beyond our control, including the impact of the COVID-19 pandemic and the ongoing armed conflict between Russia and Ukraine, and the related economic downturn in the debt markets.
Our ability to make scheduled payments on or refinance our debt obligations depends on our financial condition and operating performance, which are subject to prevailing economic and competitive conditions and to certain financial, business, legislative, regulatory and other factors beyond our control, including the impact of any public health crises, such as the COVID-19 pandemic, the ongoing armed conflicts between Israel and Hamas and between Russia and Ukraine, and the related economic downturn in the debt markets.
As of June 30, 2023, we had manufacturing and direct sales operations in 25 countries and sold our products in over 80 countries.
As of June 30, 2024, we had manufacturing and direct sales operations in 24 countries and sold our products in over 80 countries.
As of August 25, 2023, we had 20,337,574 shares of Class A common stock and 20,166,034 shares of Class B common stock outstanding.
As of August 23, 2024, we had 20,337,574 shares of Class A common stock and 20,166,034 shares of Class B common stock outstanding.
Economic, business, political and financial disruptions from the ongoing armed conflict between Russia and Ukraine and the imposition of sanctions and business disruptions as well as inflation, could also have a material adverse effect on our operating results, financial condition, and liquidity.
Economic, business, political and financial disruptions from the ongoing armed conflicts between Israel and Hamas (and potential broader military conflict in the region) and between Russia and Ukraine and the imposition of sanctions and business disruptions as well as inflation, could also have a material adverse effect on our operating results, financial condition, and liquidity.
Our operations outside the United States accounted for 58% and 56% of our consolidated assets as of June 30, 2023 and 2022, respectively, and 41% and 40% of our consolidated net sales for the years ended June 30, 2023 and 2022, respectively.
Our operations outside the United States accounted for 59% and 58% of our consolidated assets as of June 30, 2024 and 2023, respectively, and 43% and 41% of our consolidated net sales for the years ended June 30, 2024 and 2023, respectively.
Our Brazilian facilities also produce Stafac, Aviax, Aviax Plus, Coxistac, Nicarb, Kamoran ® , and Terramycin granular formulations. A substantial portion of the production is exported from Brazil to major world markets.
Our Brazilian facilities also produce Stafac, Aviax, Aviax Plus, Coxistac, Nicarb, Kamoran ® , and Terramycin granular formulations. A substantial portion of the production is exported from Brazil to major world markets. Accordingly, our Brazilian operations are dependent on foreign markets and the ability to reach those markets.
Any such liabilities, which could arise due to injury or loss of life, severe damage to and destruction of property and equipment, pollution or other environmental damage or suspension of operations, could have a material adverse effect on our business. Adverse U.S. and international economic and market conditions may adversely affect our product sales and business.
Any such liabilities, which could arise due to injury or loss of life, severe damage to and destruction of property and equipment, pollution or other environmental damage or suspension of operations, could have a material adverse effect on our business.
As of June 30, 2023, we had outstanding indebtedness (reflecting the principal amounts) of $273.8 million under our 2021 Term A loan (as defined below), $50.0 million under our 2023 Incremental Term loan (as defined below), $141.0 million of outstanding borrowings under our revolving credit facility, $11.7 million under our 2022 Term Loan (as defined below) and $2.5 million of outstanding letters of credit.
As of June 30, 2024, we had outstanding indebtedness (reflecting the principal amounts) of $256.9 million under our 2021 Term A loan (as defined below), $45.0 million under our 2023 Incremental Term loan (as defined below), $176.0 million of outstanding borrowings under our revolving credit facility, $11.3 million under our 2022 Term Loan (as defined below) and $2.3 million of outstanding letters of credit.
Adverse weather conditions, including excessive cold or heat, natural disasters, floods, droughts and other events, could negatively impact our livestock customers by impairing the health or growth of their animals or the production or availability of feed.
In the event of adverse weather conditions or a shortage of fresh water, livestock producers may purchase less of our products. 29 Table of Contents Adverse weather conditions, including excessive cold or heat, natural disasters, floods, droughts and other events, could negatively impact our livestock customers by impairing the health or growth of their animals or the production or availability of feed.
Likewise, improper or inadvertent employee behavior, including data privacy breaches by employees and others with permitted access to our systems may pose a risk that sensitive data may be exposed to unauthorized persons or to the public. Any such breach could compromise our networks, and the information stored therein could be accessed, publicly disclosed, lost or stolen.
Likewise, improper or inadvertent employee behavior, including data privacy breaches by employees and others with permitted access to our systems may pose a risk that sensitive data may be exposed to unauthorized persons or to the public.
While the scope and duration of these and any future tariffs remain uncertain, tariffs imposed by the U.S. or foreign governments on our customers’ products, or on our products or the active pharmaceutical ingredients or other components thereof, could negatively impact our financial condition and results of operations.
While the scope and duration of these and any future tariffs remain uncertain, tariffs imposed by the U.S. or foreign governments on our customers’ products, or on our products or the active pharmaceutical ingredients or other components thereof, could negatively impact our financial condition and results of operations. 40 Table of Contents Our product approval, R&D, acquisition and licensing efforts may fail to generate new products and product lifecycle developments.
Their animals’ health and their ability to operate could be adversely affected if they experience a shortage of fresh water due to human population growth or 29 Table of Contents floods, droughts or other weather conditions. In the event of adverse weather conditions or a shortage of fresh water, livestock producers may purchase less of our products.
Their animals’ health and their ability to operate could be adversely affected if they experience a shortage of fresh water due to human population growth or floods, droughts or other weather conditions.
Accordingly, our Brazilian operations are dependent on foreign markets and the ability to reach those markets. 36 Table of Contents Our business, financial condition and results of operations in Brazil may be adversely affected by factors outside of our control, such as currency fluctuations, energy shortages and other political, social and economic developments in or affecting Brazil, including as a result of the impact of the COVID-19 pandemic in Brazil.
Our business, financial condition and results of operations in Brazil may be adversely affected by factors outside of our control, such as currency fluctuations, energy shortages and other political, social and economic developments in or affecting Brazil, including as a result of the impact of a resurgence of the COVID-19 pandemic or similar public health crises in Brazil. 36 Table of Contents Certain of our employees are covered by collective bargaining or other labor agreements.
Although we have entered into employment agreements with certain executives, we may not be able to retain all of our senior executive officers and key employees. These senior executive officers and other key employees may be hired by our competitors, some of which have considerably more financial resources than we do.
These senior executive officers and other key employees may be hired by our competitors, some of which have considerably more financial resources than we do.
We are also subject to other reporting and corporate governance requirements, including the applicable stock exchange listing standards and certain provisions of the Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act and the regulations promulgated thereunder, which impose significant compliance obligations upon us.
We are also subject to other reporting and corporate governance requirements, including the applicable stock exchange listing standards and certain provisions of the Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act and the regulations promulgated thereunder, which impose significant compliance obligations upon us. 51 Table of Contents As a public company, we are required to commit significant resources and management time and attention to these requirements, which cause us to incur significant costs and which may place a strain on our systems and resources.
Any such changes could result in increased costs to protect our intellectual property or limit our ability to obtain and maintain patent protection for our products in these jurisdictions. 41 Table of Contents Additionally, certain foreign governments have indicated that compulsory licenses to patents may be granted in the case of national emergencies, which could diminish or eliminate sales and profits from those regions and materially adversely affect our operating results and financial condition.
Additionally, certain foreign governments have indicated that compulsory licenses to patents may be granted in the case of national emergencies, which could diminish or eliminate sales and profits from those regions and materially adversely affect our operating results and financial condition.
We cannot predict whether concerns regarding the use of antibacterials will result in additional restrictions, expanded regulations or consumer preferences to discontinue or reduce use of antibacterials in food-producing animals, which could materially adversely affect our operating results and financial condition.
We cannot predict whether concerns regarding the use of antibacterials will result in additional restrictions, expanded regulations or consumer preferences to discontinue or reduce use of antibacterials in food-producing animals, which could materially adversely affect our operating results and financial condition. 28 Table of Contents If the FDA withdraws approval of our Mecadox (carbadox) product, the loss of sales of such product could have a material adverse effect on our business, financial condition and results of operations.
These concerns and the related harm to our reputation could materially adversely affect our financial condition and results of operations, regardless of whether such reports are accurate. 32 Table of Contents We are dependent on suppliers having current regulatory approvals, and the failure of those suppliers to maintain these approvals or other challenges in replacing any of those suppliers could affect our supply of materials or affect the distribution or sale of our products.
We are dependent on suppliers having current regulatory approvals, and the failure of those suppliers to maintain these approvals or other challenges in replacing any of those suppliers could affect our supply of materials or affect the distribution or sale of our products.
The COVID-19 pandemic and related quarantines, shelter-in-place and “social distancing” requirements, travel restrictions and other similar government orders, have resulted in a substantial portion of our employees working remotely and have increased our dependence on tools that facilitate employees working from home and gaining remote access to our information technology systems.
The changes to “in-office” expectations resulting from the COVID-19 pandemic have resulted in a substantial portion of our employees working remotely and have increased our dependence on tools that facilitate employees working from home and gaining remote access to our information technology systems.
Certain regulatory bodies have raised concerns about the possible presence of certain residues of our carbadox product in meat from animals that consume the product. The product was banned for use in the European Union in 1998 and has been banned in several other countries outside the United States.
Our Mecadox (carbadox) product has been approved for use in food animals in the United States for over 50 years. Certain regulatory bodies have raised concerns about the possible presence of certain residues of our carbadox product in meat from animals that consume the product.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeProperties The following table lists our material properties: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Owned/ Approx. sq. ​ ​ Business Segment(s) Location Leased Footage Purpose(s) Animal Health Buenos Aires, Argentina Owned 43,000 Manufacturing and Administrative Animal Health Braganca Paulista, Brazil Owned 50,000 Manufacturing and Administrative Animal Health Guarulhos, Brazil Owned 1,294,000 Manufacturing, Sales, Premixing, Research and Administrative Animal Health ​ Heliópolis, Brazil ​ Owned ​ 15,000 ​ Manufacturing and Administrative Animal Health ​ Sligo, Ireland ​ Owned ​ 45,000 ​ Manufacturing Animal Health Beit Shemesh, Israel Owned/ land lease 79,000 Manufacturing and Research Animal Health Neot Hovav, Israel Owned/land lease 140,000 Manufacturing and Research Animal Health Petach Tikva, Israel Owned 60,000 Manufacturing Animal Health Sarasota, Florida Leased 93,000 Manufacturing, Sales, Research and Administrative Animal Health Chillicothe, Illinois Owned 19,000 Manufacturing Animal Health St.
Biggest changeProperties The following table lists our material properties: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Owned/ Approx. sq. ​ ​ Business Segment(s) Location Leased Footage Purpose(s) Animal Health Buenos Aires, Argentina Owned 43,000 Manufacturing and Administrative Animal Health Braganca Paulista, Brazil Owned 50,000 Manufacturing and Administrative Animal Health Guarulhos, Brazil Owned 1,294,000 Manufacturing, Sales, Premixing, Research and Administrative Animal Health ​ Heliópolis, Brazil ​ Owned ​ 15,000 ​ Manufacturing and Administrative Animal Health ​ Sligo, Ireland ​ Owned ​ 45,000 ​ Manufacturing Animal Health Beit Shemesh, Israel Owned/ land lease 79,000 Manufacturing and Research Animal Health Neot Hovav, Israel Owned/land lease 140,000 Manufacturing and Research Animal Health Petach Tikva, Israel Owned 60,000 Manufacturing Animal Health Sarasota, Florida Leased 93,000 Manufacturing, Sales, Research and Administrative Animal Health Chillicothe, Illinois Owned 19,000 Manufacturing Animal Health ​ Mendon, Illinois ​ Owned ​ 64,000 ​ Research Animal Health St.
Paul, Minnesota Leased 5,000 Research Animal Health Omaha, Nebraska Owned 59,000 Manufacturing, Sales and Research Animal Health Corvallis, Oregon Owned 5,000 Research Animal Health State College, Pennsylvania Owned 13,000 Research Animal Health and Mineral Nutrition Quincy, Illinois Owned 306,000 Manufacturing, Sales, Research and Administrative Mineral Nutrition Omaha, Nebraska Owned 84,000 Manufacturing Performance Products Santa Fe Springs, California Owned 108,000 Manufacturing Corporate Teaneck, New Jersey Leased 50,000 Corporate and Administrative ​ ​ 52 Table of Contents ​
Paul, Minnesota Leased 5,000 Research Animal Health Omaha, Nebraska Owned 59,000 Manufacturing, Sales and Research Animal Health State College, Pennsylvania Owned 13,000 Research Animal Health and Mineral Nutrition Quincy, Illinois Owned 306,000 Manufacturing, Sales, Research and Administrative Mineral Nutrition Omaha, Nebraska Owned 84,000 Manufacturing Performance Products Santa Fe Springs, California Owned 108,000 Manufacturing Corporate Teaneck, New Jersey Leased 50,000 Corporate and Administrative ​ ​

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeMine Safety Disclosures Not applicable. ​ 53 Table of Contents PART II
Biggest changeMine Safety Disclosures Not applicable. 54 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe stock 54 Table of Contents price performance shown on the graph is not necessarily indicative of future stock price performance, and we do not make any projections of future stockholder returns. . . ​ Item 6. (Reserved) Not applicable ​
Biggest changeThe stock 55 Table of Contents price performance shown on the graph is not necessarily indicative of future stock price performance, and we do not make any projections of future stockholder returns. ​ Item 6. (Reserved) Not applicable ​
At June 30, 2023, there were 20,337,574 shares of Class A common stock outstanding. During the fiscal year ended June 30, 2023, we did not sell any unregistered securities nor did we purchase any of our equity securities.
At June 30, 2024, there were 20,337,574 shares of Class A common stock outstanding. During the fiscal year ended June 30, 2024, we did not sell any unregistered securities nor did we purchase any of our equity securities.
The graph assumes that $100 was invested in our Class A common stock and each of the aforementioned indexes at the market close on June 30, 2018, and assumes dividends, if any, are reinvested.
The graph assumes that $100 was invested in our Class A common stock and each of the aforementioned indexes at the market close on June 30, 2019, and assumes dividends, if any, are reinvested.
Information about 5% beneficial owners of our common stock is incorporated by reference from the discussion in our 2023 Proxy Statement under the heading Security Ownership of Certain Beneficial Owners and Management .
Information about 5% beneficial owners of our common stock is incorporated by reference from the discussion in our 2024 Proxy Statement under the heading Security Ownership of Certain Beneficial Owners and Management .
As of August 25, 2023, there were 20,166,034 shares of our Class B common stock outstanding, which were held by one stockholder of record. Each share of Class B common stock is convertible at any time at the option of the holder into one share of Class A common stock.
As of August 23, 2024, there were 20,166,034 shares of our Class B common stock outstanding, which were held by one stockholder of record. Each share of Class B common stock is convertible at any time at the option of the holder into one share of Class A common stock.
Holders of Record As of August 25, 2023, there were 20,337,574 shares of our Class A common stock outstanding, which were held by one stockholder of record, not including beneficial owners of shares registered in nominee or street name.
Holders of Record As of August 23, 2024, there were 20,337,574 shares of our Class A common stock outstanding, which were held by one stockholder of record, not including beneficial owners of shares registered in nominee or street name.
The following graph shows a comparison from June 30, 2018 through June 30, 2023, of the cumulative stockholder return of our Class A common stock, the S&P 500 Index, the Nasdaq Composite Index, the Russell 2000 Index and the S&P Pharmaceuticals Index.
The following graph shows a comparison from June 30, 2019 through June 30, 2024 of the cumulative stockholder return of our Class A common stock, the S&P 500 Index, the Nasdaq Composite Index, the Russell 2000 Index and the S&P Pharmaceuticals Index.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeAnalysis of financial condition, liquidity and capital resources Net increase (decrease) in cash and cash equivalents was: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Change For the Year Ended June 30 2023 2022 2021 2023/ 2022 2022/ 2021 ​ ​ (in thousands) Cash (used) provided by: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating activities ​ $ 13,310 ​ $ 31,649 ​ $ 48,306 ​ $ (18,339) ​ $ (16,657) Investing activities ​ (74,018) ​ (22,582) ​ (18,580) ​ (51,436) ​ (4,002) Financing activities ​ 26,987 ​ 16,343 ​ (16,995) ​ 10,644 ​ 33,338 Effect of exchange-rate changes on cash and cash equivalents ​ 754 ​ (1,374) ​ 1,138 ​ 2,128 ​ (2,512) Net (decrease) increase in cash and cash equivalents ​ $ (32,967) ​ $ 24,036 ​ $ 13,869 ​ $ (57,003) ​ $ 10,167 ​ 66 Table of Contents Net cash provided by operating activities was comprised of: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Change For the Year Ended June 30 2023 2022 2021 2023 / 2022 2022 / 2021 ​ ​ (in thousands) EBITDA ​ $ 103,404 ​ $ 116,907 ​ $ 111,233 ​ $ (13,503) ​ $ 5,674 Adjustments: ​ ​ ​ ​ ​ Environmental remediation costs ​ ​ 6,894 ​ ​ — ​ ​ — ​ ​ 6,894 ​ ​ — Gain on sale of investment ​ — ​ (1,203) ​ — ​ 1,203 ​ (1,203) Acquisition-related cost of goods sold ​ — ​ 316 ​ — ​ (316) ​ 316 Acquisition-related transaction costs ​ — ​ 279 ​ — ​ (279) ​ 279 Stock-based compensation ​ — ​ — ​ ​ 1,129 ​ — ​ (1,129) Foreign currency (gains) losses, net ​ 2,455 ​ (5,216) ​ (4,480) ​ 7,671 ​ (736) Interest paid, net ​ (14,575) ​ (11,159) ​ (10,808) ​ (3,416) ​ (351) Income taxes paid ​ (20,410) ​ (17,854) ​ (19,395) ​ (2,556) ​ 1,541 Changes in operating assets and liabilities and other items ​ (64,458) ​ (50,421) ​ (29,373) ​ (14,037) ​ (21,048) Net cash provided by operating activities ​ $ 13,310 ​ $ 31,649 ​ $ 48,306 ​ $ (18,339) ​ $ (16,657) ​ Certain amounts may reflect rounding adjustments.
Biggest changeA reconciliation of net income, as reported under GAAP, to adjusted net income is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Change For the Year Ended June 30 2024 2023 2022 ​ 2024/ 2023 2023/ 2022 ​ ​ ​ ​ (in thousands, except per share amounts and percentages) ​ Reconciliation of GAAP Net Income to Adjusted Net Income ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income ​ $ 2,416 ​ $ 32,606 ​ $ 49,175 ​ $ (30,190) (93) % $ (16,569) ​ (34) % Adjustments ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Acquisition-related items, net of income tax (1) ​ 13,063 ​ 6,959 ​ 7,113 ​ 6,104 * ​ (154) ​ * ​ Certain items, net of income tax (1) ​ ​ 11,420 ​ ​ 4,929 ​ ​ (927) ​ ​ 6,491 * ​ ​ 5,856 ​ * ​ Foreign currency (gains) losses, net of income tax (1) ​ 19,429 ​ 2,936 ​ (2,979) ​ 16,493 * ​ 5,915 ​ * ​ Certain income tax items (1) ​ 2,035 ​ 1,533 ​ 772 ​ 502 * ​ 761 ​ * ​ Total adjustments, net of income tax ​ ​ 45,947 ​ ​ 16,357 ​ ​ 3,979 ​ ​ 29,590 ​ * ​ ​ 12,378 ​ * ​ Adjusted net income ​ $ 48,363 ​ $ 48,963 ​ $ 53,154 ​ $ (600) (1) % $ (4,191) ​ (8) % ​ (1) See table titled “Items Excluded from Adjusted Net Income” below for further details. 65 Table of Contents A reconciliation of reported diluted earnings per share (EPS), as reported under GAAP, to non-GAAP adjusted diluted EPS is: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Change ​ For the Year Ended June 30 2024 2023 2022 ​ 2024/ 2023 2023/ 2022 ​ ​ ​ ​ (in thousands, except per share amounts and percentages) ​ Reconciliation of GAAP diluted EPS to Adjusted diluted EPS ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ GAAP EPS, diluted ​ $ 0.06 ​ $ 0.81 ​ $ 1.21 ​ $ (0.75) (93) % $ (0.40) ​ (33) % Adjustments ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Acquisition-related items, net of income tax ​ 0.32 ​ 0.17 ​ 0.17 ​ 0.15 * ​ 0.00 ​ * ​ Certain items, net of income tax ​ 0.28 ​ 0.12 ​ (0.02) ​ 0.16 * ​ 0.14 ​ * ​ Foreign currency (gains) losses, net of income tax ​ 0.48 ​ 0.07 ​ (0.07) ​ 0.41 * ​ 0.14 ​ * ​ Certain income tax items ​ 0.05 ​ 0.04 ​ 0.02 ​ 0.01 * ​ 0.02 ​ * ​ Adjustments EPS, diluted ​ ​ 1.13 ​ ​ 0.40 ​ ​ 0.10 ​ ​ 0.73 ​ * ​ ​ 0.30 ​ * ​ Adjusted EPS, diluted ​ $ 1.19 ​ $ 1.21 ​ $ 1.31 ​ $ (0.02) (2) % $ (0.10) ​ (8) % ​ Items excluded from adjusted net income consisted of: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended June 30 ​ 2024 2023 2022 ​ ​ ​ (in thousands) Items Excluded from Adjusted Net Income ​ ​ ​ ​ ​ ​ ​ ​ ​ Acquisition-related items ​ ​ ​ ​ ​ ​ ​ ​ ​ Acquisition-related intangible amortization in cost of goods sold ​ $ 6,675 ​ $ 6,651 ​ $ 5,943 Acquisition-related cost of goods sold ​ 521 ​ — ​ 316 Acquisition-related intangible amortization in SG&A ​ ​ 2,986 ​ 3,045 ​ 2,981 Acquisition-related transaction costs in SG&A ​ ​ 6,405 ​ — ​ 279 Acquisition-related items - income taxes ​ ​ (3,524) ​ ​ (2,737) ​ ​ (2,406) Total acquisition-related items, net of income taxes ​ 13,063 ​ 6,959 ​ 7,113 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Certain items (in SG&A) ​ ​ ​ ​ ​ ​ ​ ​ ​ Pension settlement cost ​ ​ 10,674 ​ — ​ — Brazil employment taxes ​ ​ 4,202 ​ — ​ — Stock-based compensation ​ ​ 475 ​ — ​ — Phibro Forward income growth initiatives implementation costs ​ ​ 366 ​ — ​ — Insurance proceeds ​ ​ (899) ​ — ​ — Environmental remediation costs ​ ​ — ​ 6,894 ​ — Gain on sale of investment ​ ​ — ​ — ​ (1,203) Certain items - income taxes ​ ​ (3,398) ​ ​ (1,965) ​ ​ 276 Total certain items, net of income taxes ​ ​ 11,420 ​ ​ 4,929 ​ ​ (927) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Foreign currency (gains) losses, net ​ ​ ​ ​ ​ ​ ​ ​ ​ Foreign currency (gains) losses, net ​ ​ 23,863 ​ 2,455 ​ (5,216) Foreign currency (gains) losses, net - income taxes ​ ​ (4,434) ​ ​ 481 ​ ​ 2,237 Total foreign currency (gains) losses, net, net of income taxes ​ ​ 19,429 ​ ​ 2,936 ​ ​ (2,979) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Certain income tax items ​ ​ ​ ​ ​ ​ ​ ​ ​ Non-U.S. withholding and related taxes, net, on planned repatriation ​ ​ 2,828 ​ ​ — ​ ​ — Foreign tax credit regulations ​ ​ (1,223) ​ ​ 1,223 ​ ​ — Change in valuation allowance ​ ​ (1,204) ​ ​ — ​ ​ (1,001) Changes in uncertain tax positions and certain other items ​ ​ 1,634 ​ ​ 310 ​ ​ 1,773 Total certain income tax items ​ ​ 2,035 ​ ​ 1,533 ​ ​ 772 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total adjustments, net of income taxes ​ $ 45,947 ​ $ 16,357 ​ $ 3,979 66 Table of Contents ​ Analysis of financial condition, liquidity and capital resources Net increase (decrease) in cash and cash equivalents was: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Change For the Year Ended June 30 2024 2023 2022 2024/ 2023 2023/ 2022 ​ ​ (in thousands) Cash provided (used) by: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating activities ​ $ 87,594 ​ $ 13,310 ​ $ 31,649 ​ $ 74,284 ​ $ (18,339) Investing activities ​ (48,194) ​ (74,018) ​ (22,582) ​ 25,824 ​ (51,436) Financing activities ​ (6,768) ​ 26,987 ​ 16,343 ​ (33,755) ​ 10,644 Effect of exchange-rate changes on cash and cash equivalents ​ (3,300) ​ 754 ​ (1,374) ​ (4,054) ​ 2,128 Net increase (decrease) in cash and cash equivalents ​ $ 29,332 ​ $ (32,967) ​ $ 24,036 ​ $ 62,299 ​ $ (57,003) ​ Operating activities Operating activities provided $87.6 million of net cash for the year ended June 30, 2024.
Investing activities Investing activities used $74.0 million of net cash for the year ended June 30, 2023. Capital expenditures were $51.8 million, related primarily to continued investments in expanded production capacity and productivity improvements, and the $15.0 million purchase of additional land and building at an operating facility. Net purchases and maturities of short-term investments were $23.0 million.
Investing activities used $74.0 million of net cash for the year ended June 30, 2023. Capital expenditures were $51.8 million, related primarily to continued investments in expanded production capacity and productivity improvements, and the $15.0 million purchase of additional land and building at an operating facility. Net purchases and maturities of short-term investments used $23.0 million in cash.
In March 2022, the FDA held a Part 15 virtual public hearing seeking data and information related to the safety of carbadox in which Phibro participated and again detailed the extensive research and data that confirm the safety of carbadox.
In March 2022, the FDA held a Part 15 virtual public hearing seeking data and information related to the safety of carbadox in which Phibro participated and again detailed the research and data that confirm the safety of carbadox.
The following discussion summarizes the significant factors affecting our consolidated operating results, financial condition, liquidity and cash flows as of and for the periods presented below.
The following discussion summarizes the significant factors affecting our consolidated operating results, financial condition, liquidity and cash flows as of and for the periods presented.
The Adjusted EBITDA measure is not, and should not be viewed as, a substitute for GAAP reported net income. 71 Table of Contents The Adjusted EBITDA measure is an important internal measurement for us. We measure our overall performance on this basis in conjunction with other performance metrics.
The Adjusted EBITDA measure is not, and should not be viewed as, a substitute for GAAP reported net income and should not be considered as a measure of liquidity. 71 Table of Contents The Adjusted EBITDA measure is an important internal measurement for us. We measure our overall performance on this basis in conjunction with other performance metrics.
These indemnifications generally are subject to certain restrictions and limitations. 69 Table of Contents Selected Quarterly Financial Data (Unaudited) To facilitate quarterly comparisons, the following unaudited information presents the quarterly results of operations, including segment data, for the years ended June 30, 2023 and 2022.
These indemnifications generally are subject to certain restrictions and limitations. 69 Table of Contents Selected Quarterly Financial Data (Unaudited) To facilitate quarterly comparisons, the following unaudited information presents the quarterly results of operations, including segment data, for the years ended June 30, 2024 and 2023.
Foreign exchange We conduct operations in many areas of the world, involving transactions denominated in a variety of currencies. For the year ended June 30, 2023, we generated approximately 40% of our revenues from operations outside the United States.
Foreign exchange We conduct operations in many areas of the world, involving transactions denominated in a variety of currencies. For the year ended June 30, 2024, we generated approximately 40% of our revenues from operations outside the United States.
See “Notes to Consolidated Financial Statements — Income Taxes” for additional information. 59 Table of Contents Net sales, Adjusted EBITDA and reconciliation of GAAP net income to Adjusted EBITDA We report Net sales and Adjusted EBITDA by segment to understand the operating performance of each segment.
See “Notes to Consolidated Financial Statements — Income Taxes” for additional information. 61 Table of Contents Net sales, Adjusted EBITDA and reconciliation of GAAP net income to Adjusted EBITDA We report Net sales and Adjusted EBITDA by segment to understand the operating performance of each segment.
Our limited intent for the Russian market is to continue to provide medicines and vaccines, and related regulatory and technical support, to help existing customers combat disease challenges in the production of food animals on their farms. We have no production or direct distribution operations and no planned investments in Russia.
Our limited intent for the Russian market is to continue to provide medicines and vaccines, and related regulatory and 57 Table of Contents technical support, to help existing customers combat disease challenges in the production of food animals on their farms. We have no production or direct distribution operations and no planned investments in Russia.
We evaluate our tax positions and establish liabilities in accordance with the applicable accounting guidance on uncertainty in income taxes. We review 74 Table of Contents these tax uncertainties in light of changing facts and circumstances, such as the progress of tax audits, and adjust them accordingly. We account for income tax contingencies using a benefit recognition model.
We evaluate our tax positions and establish liabilities in accordance with the applicable accounting guidance on uncertainty in income taxes. We review these tax uncertainties in light of changing facts and circumstances, such as the progress of tax audits, and adjust them accordingly. We account for income tax contingencies using a benefit recognition model.
Based upon our experience to date, we believe that the future cost of compliance with existing Environmental Laws, and liabilities for known environmental claims pursuant to such Environmental Laws, will not have a material adverse effect on our financial position, results of operations, cash flows or liquidity.
Based upon our experience to date, we believe that the future cost of compliance with existing Environmental Laws, and liabilities 75 Table of Contents for known environmental claims pursuant to such Environmental Laws, will not have a material adverse effect on our financial position, results of operations, cash flows or liquidity.
Comparison of the years ended June 30, 2022 and 2021 For a comparison of our results of operations for the years ended June 30, 2022 and 2021, and an analysis of our financial condition, liquidity and capital resources for the year ended June 30, 2022, see “Part II. Item 7.
Comparison of the years ended June 30, 2023 and 2022 For a comparison of our results of operations for the years ended June 30, 2023 and 2022, and an analysis of our financial condition, liquidity and capital resources for the year ended June 30, 2023, see “Part II. Item 7.
Potential physical risks from climate change may include altered distribution and intensity of rainfall, prolonged droughts or flooding, increased frequency of wildfires and other natural disasters, rising sea levels and a rising heat index, any of which could cause negative impacts to our and our customers’ businesses.
Potential physical risks from climate change may include altered distribution and intensity of rainfall, prolonged droughts or flooding, increased frequency of wildfires and other natural disasters, rising sea levels and a rising heat index, any of which could cause negative impacts to our and our 59 Table of Contents customers’ businesses.
We began operations at a new vaccine production facility in Guarulhos, Brazil that manufactures and markets autogenous vaccines against animal diseases for swine, poultry and aquaculture. We continue to build our companion animal business and pipeline. Our Rejensa joint supplement for dogs continues to gain customer acceptance.
We began operations at a new vaccine production facility in Guarulhos, Brazil in fiscal year 2023 that manufactures and markets autogenous vaccines against animal diseases for swine, poultry and aquaculture. We continue to build our companion animal business and pipeline. Our Rejensa joint supplement for dogs continues to gain customer acceptance.
Under certain circumstances, we might be required to curtail operations until a particular problem is remedied. Known costs and expenses under Environmental 75 Table of Contents Laws incidental to ongoing operations, including the cost of litigation proceedings relating to environmental matters, are generally included within operating results.
Under certain circumstances, we might be required to curtail operations until a particular problem is remedied. Known costs and expenses under Environmental Laws incidental to ongoing operations, including the cost of litigation proceedings relating to environmental matters, are generally included within operating results.
The provision for income taxes for the year ended June 30, 2023, included a net cost of $1.5 million for certain one-time items including (i) Global Intangible Low-Tax Income (“GILTI”) income taxes that were modified by IRS guidance issued subsequent to June 30, 2023, (ii) the net cost of withholding taxes related to dividends received from an international affiliate and (iii) the net benefit related to certain unrecognized tax benefits from adjustments to and the lapse of statute of limitations of prior years.
The provision for income taxes for the year ended June 30, 2023, included a net cost of $1.5 million for certain one-time items including (i) GILTI income taxes that were modified by IRS guidance issued subsequent to June 30, 2023, (ii) the net cost of withholding taxes related to dividends received from an international affiliate and (iii) the net benefit related to certain unrecognized tax benefits from adjustments to and the lapse of statute of limitations of prior years.
Competition The animal health industry is highly competitive. We believe many of our competitors are conducting R&D activities in areas served by our products and in areas in which we are developing products. Our competitors include specialty animal health businesses and the animal health businesses of large pharmaceutical companies.
Competition The animal health industry is highly competitive. We believe many of our competitors are conducting R&D activities in areas served by our products and in areas in which we are developing products. Our competitors include stand-alone animal health businesses and the animal health businesses of large pharmaceutical companies.
If such events affect our customers’ businesses, they may purchase fewer of our products, and 57 Table of Contents our revenues may be negatively impacted. Climate driven changes could have a material adverse effect on our financial condition and results of operations.
If such events affect our customers’ businesses, they may purchase fewer of our products, and our revenues may be negatively impacted. Climate driven changes could have a material adverse effect on our financial condition and results of operations.
Determining the useful life of an intangible asset also requires judgment. Our estimates of the useful lives of intangible assets primarily are based on a number of factors including the competitive environment, underlying product life cycles, operating plans and the macroeconomic environment of the countries in which the products are sold.
Determining the useful life of an intangible asset also requires judgment. Our estimates of the useful lives of intangible assets primarily are based on a number of factors including the competitive environment, underlying product life cycles, operating plans and the macroeconomic environment of the countries in which the products are sold. Intangible assets are amortized over their estimated lives.
Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the fiscal year ended June 30, 2022, filed with the SEC on August 24, 2022.
Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the fiscal year ended June 30, 2023, filed with the SEC on August 30, 2023.
The effective income tax rate without these items would have been 36.9% and 30.9% for the years ended June 30, 2023 and 2022, respectively. We record the GILTI-related aspects of comprehensive U.S. income tax legislation as a period expense.
The effective income tax rate without these items would have been 59.2% and 36.9% for the years ended June 30, 2024 and 2023, respectively. We record the GILTI-related aspects of comprehensive U.S. income tax legislation as a period expense.
Phibro reiterated the safety of carbadox and the appropriateness of the regulatory method and offered to work 56 Table of Contents with the CVM to generate additional data to support the existing regulatory method or select a suitable alternative regulatory method.
Phibro reiterated the safety of carbadox and the appropriateness of the regulatory method and offered to work with the CVM to generate additional data to support the existing regulatory method or select a suitable alternative regulatory method.
We calculate Adjusted EBITDA as EBITDA plus (a) (income) loss from, and disposal of, discontinued operations, (b) other expense or less other income, as separately reported on our consolidated statements of operations, including foreign currency (gains) losses, net and (c) certain items that we consider to be unusual, non-operational or non-recurring.
We calculate Adjusted EBITDA as EBITDA plus (a) other expense or less other income, as separately reported on our consolidated statements of operations, including foreign currency (gains) losses, net and (b) certain items that we consider to be unusual, non-operational or non-recurring.
We intend to continue to reinvest indefinitely the undistributed earnings of our foreign subsidiaries where we could be subject to applicable non-U.S. income and withholding taxes if amounts are repatriated to the U.S.
We intend to continue to reinvest indefinitely all other undistributed earnings of our foreign subsidiaries where we could be subject to applicable non-U.S. withholding and related taxes if amounts are repatriated to the U.S.
See also “Business — Compliance with Government Regulation — United States — Carbadox”; and “Business — Compliance with Government Regulation — Global Policy and Guidance.” Our global sales of antibacterials, anticoccidials and other products were $387 million, $361 million and $330 million for the years ended June 30, 2023, 2022 and 2021, respectively.
See also “Business — Compliance with Government Regulation — United States — Carbadox”; and “Business — Compliance with Government Regulation — Global Policy and Guidance.” Our global sales of antibacterials, anticoccidials and other products were $421 million, $387 million and $362 million for the years ended June 30, 2024, 2023 and 2022, respectively.
The provision for income taxes for the years ended June 30, 2023 and 2022, included $1.8 million and $0.2 million of federal tax expense from the effects of GILTI, respectively. Our effective income tax rate included 3.3% and 0.3% related to GILTI income tax expense in the years ended June 30, 2023 and 2022, respectively.
The provision for income taxes for the years ended June 30, 2024 and 2023, included $2.0 million and $1.8 million, 64 Table of Contents respectively, of federal tax expense from the effects of GILTI. Our effective income tax rate included 18.3% and 3.3% related to GILTI income tax expense for the years ended June 30, 2024 and 2023, respectively.
We report Adjusted EBITDA to reflect the results of our operations prior to considering certain income statement elements. We have defined EBITDA as net income (loss) plus (i) interest expense, net, (ii) provision for income taxes or less benefit for income taxes, and (iii) depreciation and amortization.
We report Adjusted EBITDA to reflect the results of our operations prior to considering certain income statement elements and to make financial and operating decisions. We calculate EBITDA as net income plus (i) interest expense, net, (ii) provision for income taxes or less benefit for income taxes and (iii) depreciation and amortization.
Other current assets used $7.4 million due to the timing of insurance payments. Accounts payable used $22.8 million due to timing of purchases and payments. Accrued expenses and other liabilities used $5.7 million, primarily due to changes in employee-related and lease liabilities. Operating activities provided $31.6 million of net cash for the year ended June 30, 2022.
Other current assets used $7.4 million due to the timing of insurance payments. Accounts payable used $22.8 million due to timing of purchases and payments. Accrued expenses and other liabilities used $5.7 million, primarily due to changes in employee-related and lease liabilities. Investing activities Investing activities used $48.2 million of net cash for the year ended June 30, 2024.
See “Notes to Consolidated Financial Statements – Debt, Leases, and Commitment and Contingencies.” Analysis of the consolidated balance sheets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Change As of June 30 2023 2022 2021 2023 / 2022 2022 / 2021 ​ ​ (in thousands) Accounts receivable - trade ​ $ 163,479 ​ $ 166,537 ​ $ 146,852 ​ $ (3,058) ​ $ 19,685 DSO ​ 58 ​ 59 ​ 60 ​ ​ ​ Payment terms outside the U.S. are typically longer than in the United States.
See “Notes to Consolidated Financial Statements — Debt, Leases, and Commitment and Contingencies.” Analysis of the consolidated balance sheets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Change As of June 30 2024 2023 2022 2024 / 2023 2023 / 2022 ​ ​ (in thousands) Accounts receivable - trade ​ $ 169,452 ​ $ 163,479 ​ $ 166,537 ​ $ 5,973 ​ $ (3,058) DSO ​ 56 ​ 58 ​ 59 ​ ​ ​ Payment terms outside the U.S. are typically longer than in the United States.
The potential impacts could include supply chain and logistics disruptions, macroeconomic impacts resulting from the exclusion of Russian financial institutions from the global banking system, volatility in foreign exchange rates and interest rates, inflationary pressures on raw materials and energy as well as heightened cybersecurity threats. Our annual sales to Russia and Ukraine represent approximately 1% of consolidated net sales.
The potential impacts could include supply chain and logistics disruptions, macroeconomic impacts resulting from the exclusion of Russian financial institutions from the global banking system, volatility in foreign exchange rates and interest rates, inflationary pressures on raw materials and energy as well as heightened cybersecurity threats.
We currently intend to pay quarterly dividends on our Class A and Class B common stock, subject to approval from the Board of Directors. Our Board of Directors has declared a cash dividend of $0.12 per share on Class A common stock and Class B common stock, payable on September 27, 2023.
We currently intend to pay quarterly dividends on our Class A and Class B common stock, subject to approval by the Board of Directors. Our Board of Directors has declared a cash dividend of $0.12 per share on Class A common 68 Table of Contents stock and Class B common stock, payable on September 25, 2024.
We calculate the ratio of current assets to current liabilities based on this definition. At June 30, 2023, we had $141.0 million in outstanding borrowings under the 2021 Revolver. We had outstanding letters of credit and other commitments of $2.5 million, leaving $166.5 million available for borrowings and letters of credit, subject to restriction in our 2021 Credit Facilities.
We calculate the ratio of current assets to current liabilities based on this definition. At June 30, 2024, we had $176.0 million in outstanding borrowings under the 2021 Revolver. We had outstanding letters of credit and other commitments of $2.3 million, leaving $131.7 million available for borrowings and letters of credit, subject to restrictions in our 2021 Credit Facilities.
Net income Net income of $32.6 million for the year ended June 30, 2023, decreased $16.6 million, as compared to net income of $49.2 million for the year ended June 30, 2022. Operating income decreased $7.1 million driven by higher SG&A, partially offset by higher gross profit.
Net income Net income of $2.4 million for the year ended June 30, 2024 decreased $30.2 million, as compared to net income of $32.6 million for the year ended June 30, 2023. Operating income decreased $18.5 million driven by higher SG&A, partially offset by higher gross profit.
Adjusted EBITDA Adjusted EBITDA of $112.8 million for the year ended June 30, 2023, increased $1.7 million, or 2%, as compared to the year ended June 30, 2022. Animal Health Adjusted EBITDA increased $12.0 million, driven by higher sales and increased gross profit, partially offset by an increase in SG&A.
Adjusted EBITDA Adjusted EBITDA of $111.2 million for the year ended June 30, 2024 decreased $1.5 million, or 1%, as compared to the year ended June 30, 2023. Animal Health Adjusted EBITDA increased $9.5 million, driven by higher sales and increased gross profit, partially offset by an increase in SG&A.
We consider foreign currency gains and losses to be non-operational because they arise principally from intercompany transactions and are largely non-cash in nature. 72 Table of Contents New accounting standards For discussion of new accounting standards, see “Notes to Consolidated Financial Statements — Summary of Significant Accounting Policies and New Accounting Standards.” Critical accounting policies Critical accounting policies are those that require application of management’s most difficult, subjective and/or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain and may change in subsequent periods.
New accounting standards For discussion of new accounting standards, see “Notes to Consolidated Financial Statements — Summary of Significant Accounting Policies and New Accounting Standards.” 72 Table of Contents Critical accounting policies Critical accounting policies are those that require application of management’s most difficult, subjective and/or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain and may change in subsequent periods.
Certain relevant measures of our liquidity and capital resources follow: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Change As of June 30 2023 2022 2021 2023 / 2022 2022 / 2021 ​ ​ (in thousands, except ratios) Cash and cash equivalents and short-term investments ​ $ 81,281 ​ $ 91,248 ​ $ 93,212 ​ $ (9,967) ​ $ (1,964) Working capital ​ 350,737 ​ 299,152 ​ 250,956 ​ 51,585 ​ 48,196 Ratio of current assets to current liabilities ​ 3.28:1 ​ 2.70:1 ​ 2.62:1 ​ ​ ​ We define working capital as total current assets (excluding cash and cash equivalents and short-term investments) less total current liabilities (excluding current portion of long-term debt).
Certain relevant measures of our liquidity and capital resources are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Change As of June 30 2024 2023 2022 2024 / 2023 2023 / 2022 ​ ​ (in thousands, except ratios) Cash and cash equivalents and short-term investments ​ $ 114,613 ​ $ 81,281 ​ $ 91,248 ​ $ 33,332 ​ $ (9,967) Working capital ​ 312,031 ​ 350,737 ​ 299,152 ​ (38,706) ​ 51,585 Ratio of current assets to current liabilities ​ 2.79:1 ​ 3.28:1 ​ 2.70:1 ​ ​ ​ We define working capital as total current assets (excluding cash and cash equivalents and short-term investments) less total current liabilities (excluding current portion of long-term debt).
The adjusted net income and adjusted diluted earnings per share measures are not, and should not be viewed as, a substitute for GAAP reported net income. Adjusted net income and adjusted diluted earnings per share are non-GAAP financial measure that have no standardized meaning prescribed by GAAP and, therefore, have limits in their usefulness to investors.
Adjusted net income and adjusted diluted earnings per share are non-GAAP financial measures that have no standardized meaning prescribed by GAAP and, therefore, have limits in their usefulness to investors.
We have defined adjusted net income as net income plus (i) other expense or less other income, as separately reported on our consolidated statements of operations, including foreign currency gains and losses and loss on extinguishment of debt, (ii) amortization of acquired intangibles and other acquisition-related costs, such as accrued compensation and accrued interest, (iii) stock-based compensation, (iv) certain items that we consider to be unusual or non-recurring and (v) income tax effect of pre-tax income adjustments and certain income tax items.
We calculate adjusted net income as net income plus (i) acquisition-related intangible amortization and other acquisition-related items, (ii) certain items we consider to be unusual, non-operational or non-recurring, (iii) stock-based compensation, (iv) foreign currency (gains) losses, as separately reported on our consolidated statements of operations, and (v) the income tax effect of pre-tax income adjustments and certain income tax items.
Our companion animal development pipeline includes an early-stage atopic dermatitis compound, a novel Lyme vaccine delivery system product, a potential treatment for mitral heart valve disease in dogs, a pain product and two early-stage oral care compounds. 58 Table of Contents Analysis of the consolidated statements of operations Summary Results of Operations ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Change For the Year Ended June 30 ​ 2023 2022 2021 2023 / 2022 2022/ 2021 ​ ​ ​ (in thousands, except per share amounts and percentages) Net sales ​ $ 977,889 $ 942,261 $ 833,350 $ 35,628 ​ 4 % $ 108,911 13 % Gross profit ​ 298,237 ​ 285,400 ​ 271,377 ​ 12,837 ​ 4 % 14,023 5 % Selling, general and administrative expenses ​ 226,390 ​ 206,414 ​ 196,509 ​ 19,976 ​ 10 % 9,905 5 % Operating income ​ 71,847 ​ 78,986 ​ 74,868 ​ (7,139) ​ (9) % 4,118 6 % Interest expense, net ​ 15,321 ​ 11,875 ​ 12,880 ​ 3,446 ​ 29 % (1,005) (8) % Foreign currency (gains) losses, net ​ 2,455 ​ (5,216) ​ (4,480) ​ 7,671 ​ ​ * (736) ​ * Income before income taxes ​ 54,071 ​ 72,327 ​ 66,468 ​ (18,256) ​ (25) % 5,859 9 % Provision for income taxes ​ 21,465 ​ 23,152 ​ 12,083 ​ (1,687) ​ (7) % 11,069 92 % Net income ​ $ 32,606 ​ $ 49,175 ​ $ 54,385 ​ $ (16,569) ​ (34) % $ (5,210) (10) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income per share ​ ​ ​ ​ ​ ​ Basic ​ $ 0.81 ​ $ 1.21 ​ $ 1.34 ​ $ (0.40) ​ ​ ​ ​ $ (0.13) ​ Diluted ​ $ 0.81 ​ $ 1.21 ​ $ 1.34 ​ $ (0.40) ​ ​ ​ ​ $ (0.13) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average number of shares outstanding ​ ​ ​ ​ ​ ​ Basic 40,504 ​ 40,504 ​ 40,473 ​ ​ ​ ​ Diluted ​ ​ 40,504 ​ ​ 40,504 ​ ​ 40,504 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ratio to net sales ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross profit 30.5 % 30.3 % 32.6 % ​ ​ ​ Selling, general and administrative expenses 23.2 % 21.9 % 23.6 % ​ ​ ​ Operating income 7.3 % 8.4 % 9.0 % ​ ​ ​ Income before income taxes 5.5 % 7.7 % 8.0 % ​ ​ ​ Net income 3.3 % 5.2 % 6.5 % ​ ​ ​ Effective tax rate 39.7 % 32.0 % 18.2 % ​ ​ ​ Certain amounts and percentages may reflect rounding adjustments. * Calculation not meaningful Changes in net sales from period to period primarily result from changes in volumes and average selling prices.
Our companion animal development pipeline includes an early-stage atopic dermatitis compound, a potential treatment for mitral heart valve disease in dogs, a pain product and two oral care products. 60 Table of Contents Analysis of the consolidated statements of operations Summary Results of Operations ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Change For the Year Ended June 30 ​ 2024 2023 2022 2024 / 2023 2023/ 2022 ​ ​ ​ (in thousands, except per share amounts and percentages) Net sales ​ $ 1,017,679 $ 977,889 $ 942,261 $ 39,790 ​ 4 % $ 35,628 4 % Gross profit ​ 313,092 ​ 298,237 ​ 285,400 ​ 14,855 ​ 5 % 12,837 4 % Selling, general and administrative expenses ​ 259,777 ​ 226,390 ​ 206,414 ​ 33,387 ​ 15 % 19,976 10 % Operating income ​ 53,315 ​ 71,847 ​ 78,986 ​ (18,532) ​ (26) % (7,139) (9) % Interest expense, net ​ 18,536 ​ 15,321 ​ 11,875 ​ 3,215 ​ 21 % 3,446 29 % Foreign currency (gains) losses, net ​ 23,863 ​ 2,455 ​ (5,216) ​ 21,408 ​ ​ * 7,671 ​ * Income before income taxes ​ 10,916 ​ 54,071 ​ 72,327 ​ (43,155) ​ (80) % (18,256) (25) % Provision for income taxes ​ 8,500 ​ 21,465 ​ 23,152 ​ (12,965) ​ (60) % (1,687) (7) % Net income ​ $ 2,416 ​ $ 32,606 ​ $ 49,175 ​ $ (30,190) ​ (93) % $ (16,569) (34) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income per share ​ ​ ​ ​ ​ ​ Basic ​ $ 0.06 ​ $ 0.81 ​ $ 1.21 ​ $ (0.75) ​ ​ ​ ​ $ (0.40) ​ Diluted ​ $ 0.06 ​ $ 0.81 ​ $ 1.21 ​ $ (0.75) ​ ​ ​ ​ $ (0.41) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average number of shares outstanding ​ ​ ​ ​ ​ ​ Basic 40,504 ​ 40,504 ​ 40,504 ​ ​ ​ ​ Diluted ​ ​ 40,523 ​ ​ 40,504 ​ ​ 40,504 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ratio to net sales ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross profit 30.8 % 30.5 % 30.3 % ​ ​ ​ Selling, general and administrative expenses 25.5 % 23.2 % 21.9 % ​ ​ ​ Operating income 5.2 % 7.3 % 8.4 % ​ ​ ​ Income before income taxes 1.1 % 5.5 % 7.7 % ​ ​ ​ Net income 0.2 % 3.3 % 5.2 % ​ ​ ​ Effective tax rate 77.9 % 39.7 % 32.0 % ​ ​ ​ Certain amounts and percentages may reflect rounding adjustments. * Calculation not meaningful Changes in net sales from period to period primarily result from changes in volumes and average selling prices.
Unusual, in this context, may represent items that are not part of our ongoing business; items that, either as a result of their nature or size, we would not expect to occur as part of our normal business on a regular basis.
Such evaluation considers both the quantitative and the qualitative aspect of their unusual, non-operational or non-recurring nature. Unusual, in this context, may represent items that are not part of our ongoing business; items that, either because of their nature or size, we would not expect to occur as part of our normal business on a regular basis.
For the year ended June 30, 2023, our expenses were not significantly affected by currency movements. Because our financial statements are reported in U.S. dollars, changes in currency exchange rates between the U.S. dollar and other currencies have had, and will continue to have, an impact on our results of operations.
For the year ended June 30, 2024, our expenses were not significantly affected by currency movements. Because we have transactions denominated in various currencies, changes in currency exchange rates have had, and will continue to have, an impact on our results of operations.
We do not expect to contribute to the domestic pension plan during 2024. At June 30, 2023, our cash and cash equivalents and short-term investments included $79.0 million held by our international subsidiaries.
We do not expect to contribute to the domestic pension plan during 2025. At June 30, 2024, our cash and cash equivalents and short-term investments included $111.9 million held by our international subsidiaries. There are no restrictions on cash distributions to PAHC from our international subsidiaries.
We assess goodwill for impairment annually during the fourth quarter, or more frequently if impairment indicators exist. Impairment exists when the carrying amount of goodwill exceeds its implied fair value.
Goodwill represents the excess of the purchase price over the fair value of the identifiable net assets acquired in a business combination. We assess goodwill for impairment annually during the fourth quarter, or more frequently if impairment indicators exist. Impairment exists when the carrying amount of goodwill exceeds its implied fair value.
We believe we will be able to comply with the terms of the covenants under the 2021 Credit Facilities and foreign credit lines based on our operating plan. In the event of adverse operating results and/or violation of covenants under the facilities, there can be no assurance we would be able to obtain waivers or amendments.
In the event of adverse operating results and/or violation of covenants under the facilities, there can be no assurance we would be able to obtain waivers or amendments.
Other risks to our meeting future funding requirements include global economic conditions and macroeconomic, business and financial disruptions that could arise, including those caused by COVID-19 or similar outbreaks and the ongoing conflict between Russia and Ukraine.
Other risks to our meeting future funding requirements include global economic conditions and macroeconomic, business and financial disruptions that could arise, including ongoing conflicts between Israel and Hamas and between Russia and Ukraine.
As of the date of this Annual Report on Form 10-K, Mecadox continues to be available for use by swine producers.
Sales of Mecadox (carbadox) for the year ended June 30, 2024 were approximately $22 million. As of the date of this Annual Report on Form 10-K, Mecadox continues to be available for use by swine producers.
In addition, we periodically reassess the estimated remaining useful lives of our long-lived and amortizable intangible assets. Changes to estimated useful lives would affect the amount of depreciation and amortization recorded in the consolidated statements of operations. Goodwill represents the excess of the purchase price over the fair value of the identifiable net assets acquired in a business combination.
In addition, we periodically reassess the estimated remaining useful lives of our long-lived and amortizable intangible assets. 73 Table of Contents Changes to estimated useful lives would affect the amount of depreciation and amortization recorded in the consolidated statements of operations.
Segment net sales and Adjusted EBITDA: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Change For the Year Ended June 30 2023 2022 2021 2023 / 2022 2022 / 2021 Net sales ​ (in thousands, except percentages) MFAs and other ​ $ 387,349 ​ $ 361,538 ​ $ 330,017 ​ $ 25,811 7 % $ 31,521 10 % Nutritional specialties ​ 172,504 ​ 157,196 ​ 142,760 ​ 15,308 10 % 14,436 10 % Vaccines ​ 99,998 ​ 88,321 ​ 72,939 ​ 11,677 13 % 15,382 21 % Animal Health ​ 659,851 ​ 607,055 ​ 545,716 ​ 52,796 9 % 61,339 11 % Mineral Nutrition ​ 242,656 ​ 259,512 ​ 220,560 ​ (16,856) (6) % 38,952 18 % Performance Products ​ 75,382 ​ 75,694 ​ 67,074 ​ (312) (0) % 8,620 13 % Total ​ $ 977,889 ​ $ 942,261 ​ $ 833,350 ​ $ 35,628 4 % $ 108,911 13 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Adjusted EBITDA ​ ​ ​ ​ ​ ​ Animal Health ​ $ 136,139 ​ $ 124,106 ​ $ 123,953 ​ $ 12,033 10 % $ 153 0 % Mineral Nutrition ​ 17,417 ​ 24,038 ​ 17,116 ​ (6,621) (28) % 6,922 40 % Performance Products ​ 9,346 ​ 8,706 ​ 9,437 ​ 640 7 % (731) (8) % Corporate ​ (50,149) ​ (45,767) ​ (42,624) ​ (4,382) 10 % (3,143) 7 % Total ​ $ 112,753 ​ $ 111,083 ​ $ 107,882 ​ $ 1,670 2 % $ 3,201 3 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Adjusted EBITDA as a percentage of segment net sales ​ ​ ​ ​ ​ ​ Animal Health ​ 20.6 % 20.4 % 22.7 % ​ ​ Mineral Nutrition ​ 7.2 % 9.3 % 7.8 % ​ ​ Performance Products ​ 12.4 % 11.5 % 14.1 % ​ ​ Corporate (1) ​ (5.1) % (4.9) % (5.1) % ​ ​ Total (1) ​ 11.5 % 11.8 % 12.9 % ​ ​ (1) Reflects ratio to total net sales.
Segment net sales and Adjusted EBITDA: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Change For the Year Ended June 30 2024 2023 2022 2024 / 2023 2023 / 2022 Net sales ​ (in thousands, except percentages) MFAs and other ​ $ 420,959 ​ $ 387,349 ​ $ 361,538 ​ $ 33,610 9 % $ 25,811 7 % Nutritional specialties ​ 164,671 ​ 172,504 ​ 157,196 ​ (7,833) (5) % 15,308 10 % Vaccines ​ 120,852 ​ 99,998 ​ 88,321 ​ 20,854 21 % 11,677 13 % Animal Health ​ 706,482 ​ 659,851 ​ 607,055 ​ 46,631 7 % 52,796 9 % Mineral Nutrition ​ 243,663 ​ 242,656 ​ 259,512 ​ 1,007 0 % (16,856) (6) % Performance Products ​ 67,534 ​ 75,382 ​ 75,694 ​ (7,848) (10) % (312) (0) % Total ​ $ 1,017,679 ​ $ 977,889 ​ $ 942,261 ​ $ 39,790 4 % $ 35,628 4 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Adjusted EBITDA ​ ​ ​ ​ ​ ​ Animal Health ​ $ 145,606 ​ $ 136,139 ​ $ 124,106 ​ $ 9,467 7 % $ 12,033 10 % Mineral Nutrition ​ 16,449 ​ 17,417 ​ 24,038 ​ (968) (6) % (6,621) (28) % Performance Products ​ 7,662 ​ 9,346 ​ 8,706 ​ (1,684) (18) % 640 7 % Corporate ​ (58,480) ​ (50,149) ​ (45,767) ​ (8,331) 17 % (4,382) 10 % Total ​ $ 111,237 ​ $ 112,753 ​ $ 111,083 ​ $ (1,516) (1) % $ 1,670 2 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Adjusted EBITDA as a percentage of segment net sales ​ ​ ​ ​ ​ ​ Animal Health ​ 20.6 % 20.6 % 20.4 % ​ ​ Mineral Nutrition ​ 6.8 % 7.2 % 9.3 % ​ ​ Performance Products ​ 11.3 % 12.4 % 11.5 % ​ ​ Corporate (1) ​ (5.7) % (5.1) % (4.9) % ​ ​ Total (1) ​ 10.9 % 11.5 % 11.8 % ​ ​ (1) Reflects ratio to total net sales.
We market approximately 770 product lines in over 80 countries to approximately 4,000 customers. 55 Table of Contents Factors affecting our performance Armed conflict between Russia and Ukraine In response to the armed conflict between Russia and Ukraine that began in February 2022, we and our employees have provided support to Ukraine in the form of monetary donations, free products and humanitarian services.
Russia and Ukraine In response to the armed conflict between Russia and Ukraine that began in February 2022, we and our employees have provided support to Ukraine in the form of monetary donations, free products and humanitarian services.
Animal Health sales increased $52.8 million. Mineral Nutrition and Performance Products sales decreased by $16.9 million and $0.3 million, respectively. Animal Health Net sales of $659.9 million for the year ended June 30, 2023, increased $52.8 million, or 9%.
Animal Health and Mineral Nutrition sales increased $46.6 million and $1.0 million, respectively. Performance Products sales decreased $7.8 million. Animal Health Net sales of $706.5 million for the year ended June 30, 2024 increased $46.6 million, or 7%.
We cannot know if the conflict could escalate and result in broader economic and security concerns that could adversely affect our business, financial condition, or results of operations.
Our sales to Russia and Ukraine for the 12 months ended June 30, 2024 represented approximately 1% of consolidated net sales. We cannot know if the conflict could escalate and result in broader economic and security concerns that could adversely affect our business, financial condition, or results of operations.
We typically use an income method to measure the fair value of intangible assets, based on forecasts of the expected future cash flows attributable to the respective assets.
The fair values are based on available historical information and on future expectations and assumptions deemed reasonable by management but are inherently uncertain. We typically use an income method to measure the fair value of intangible assets, based on forecasts of the expected future cash flows attributable to the respective assets.
We may elect to assess our goodwill for impairment using a qualitative or a quantitative approach, to determine whether it is more likely than not that the fair value of goodwill is greater than its carrying value. During the three months ended June 30, 2023, we tested goodwill using a quantitative approach and determined goodwill was not impaired.
We may elect to assess our goodwill for impairment using a qualitative or a quantitative approach, to determine whether it is more likely than not that the fair value of goodwill is greater than its carrying value. Income Taxes The provision for income taxes includes U.S. federal, state and foreign income taxes and foreign withholding taxes.
Certain amounts and percentages may reflect rounding adjustments. * Calculation not meaningful 60 Table of Contents A reconciliation of net income, as reported under GAAP, to Adjusted EBITDA: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Change For the Year Ended June 30 2023 2022 2021 2023/ 2022 2022/ 2021 ​ ​ (in thousands, except percentages) Net income ​ $ 32,606 ​ $ 49,175 ​ $ 54,385 ​ $ (16,569) (34) % $ (5,210) (10) % Interest expense, net ​ 15,321 ​ 11,875 ​ 12,880 ​ 3,446 29 % (1,005) (8) % Provision for income taxes ​ 21,465 ​ 23,152 ​ 12,083 ​ (1,687) (7) % 11,069 92 % Depreciation and amortization ​ 34,012 ​ 32,705 ​ 31,885 ​ 1,307 4 % 820 3 % EBITDA ​ 103,404 ​ 116,907 ​ 111,233 ​ (13,503) (12) % 5,674 5 % Environmental remediation costs ​ ​ 6,894 ​ ​ — ​ ​ — ​ ​ 6,894 * ​ ​ — * ​ Gain on sale of investment ​ — ​ (1,203) ​ — ​ 1,203 * ​ (1,203) * ​ Acquisition-related cost of goods sold ​ — ​ 316 ​ — ​ (316) * ​ 316 * ​ Acquisition-related transaction costs ​ — ​ 279 ​ — ​ (279) * ​ 279 * ​ Stock-based compensation ​ — ​ — ​ 1,129 ​ — * ​ (1,129) * ​ Foreign currency (gains) losses, net ​ 2,455 ​ (5,216) ​ (4,480) ​ 7,671 * ​ (736) * ​ Adjusted EBITDA ​ $ 112,753 ​ $ 111,083 ​ $ 107,882 ​ $ 1,670 2 % $ 3,201 3 % ​ Certain amounts and percentages may reflect rounding adjustments. * Calculation not meaningful Adjusted net income We report adjusted net income to portray the results of our operations prior to considering certain income statement elements.
Certain amounts and percentages may reflect rounding adjustments. * Calculation not meaningful 62 Table of Contents A reconciliation of net income, as reported under GAAP, to Adjusted EBITDA: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Change For the Year Ended June 30 2024 2023 2022 2024/ 2023 2023/ 2022 ​ ​ (in thousands, except percentages) Net income ​ $ 2,416 ​ $ 32,606 ​ $ 49,175 ​ $ (30,190) (93) % $ (16,569) (34) % Interest expense, net ​ 18,536 ​ 15,321 ​ 11,875 ​ 3,215 21 % 3,446 29 % Provision for income taxes ​ 8,500 ​ 21,465 ​ 23,152 ​ (12,965) (60) % (1,687) (7) % Depreciation and amortization ​ 36,178 ​ 34,012 ​ 32,705 ​ 2,166 6 % 1,307 4 % EBITDA ​ 65,630 ​ 103,404 ​ 116,907 ​ (37,774) (37) % (13,503) (12) % Acquisition-related cost of goods sold ​ 521 ​ — ​ 316 ​ 521 * ​ (316) * ​ Acquisition-related transaction costs ​ ​ 6,405 ​ ​ — ​ ​ 279 ​ ​ 6,405 * ​ (279) * ​ Pension settlement cost ​ ​ 10,674 ​ ​ — ​ ​ — ​ ​ 10,674 ​ * ​ ​ — ​ * ​ Brazil employment taxes ​ ​ 4,202 ​ ​ — ​ ​ — ​ ​ 4,202 ​ * ​ ​ — ​ * ​ Stock-based compensation ​ 475 ​ — ​ — ​ 475 * ​ — * ​ Phibro Forward income growth initiatives implementation costs (1) ​ 366 ​ — ​ — ​ 366 * ​ — * ​ Insurance proceeds ​ ​ (899) ​ ​ — ​ ​ — ​ ​ (899) * ​ — * ​ Environmental remediation costs ​ ​ — ​ ​ 6,894 ​ ​ — ​ ​ (6,894) * ​ ​ 6,894 * ​ Gain on sale of investment ​ — ​ — ​ (1,203) ​ — * ​ 1,203 * ​ Foreign currency (gains) losses, net ​ 23,863 ​ 2,455 ​ (5,216) ​ 21,408 * ​ 7,671 * ​ Adjusted EBITDA ​ $ 111,237 ​ $ 112,753 ​ $ 111,083 ​ $ (1,516) (1) % $ 1,670 2 % (1) Phibro Forward is a company-wide initiative focused on unlocking additional areas of revenue growth and cost savings.
Because there are a number of estimates and assumptions inherent in calculating the various components of our income tax provision, certain future events such as changes in tax legislation, geographic mix of earnings, completion of tax audits or earnings repatriation plans could have an impact on those estimates and our effective income tax rate.
Finalizing audits with the relevant taxing authorities can include formal administrative and legal proceedings, and, as a result, it is difficult to estimate the timing and range of possible changes related to our uncertain tax positions, and such changes could be significant. 74 Table of Contents Because there are a number of estimates and assumptions inherent in calculating the various components of our income tax provision, certain future events such as changes in tax legislation, geographic mix of earnings, completion of tax audits or earnings repatriation plans could have an impact on those estimates and our effective income tax rate.
Mineral Nutrition Adjusted EBITDA decreased $6.6 65 Table of Contents million, driven by lower sales volume and higher raw material costs. Performance Products Adjusted EBITDA increased by $0.6 million due to higher gross profit, partially offset by an increase in SG&A. Corporate expenses increased $4.4 million due to increased employee-related costs and strategic investments.
Mineral Nutrition Adjusted EBITDA decreased $1.0 million, due to decreased gross profit and an increase in SGA. Performance Products Adjusted EBITDA decreased by $1.7 million due to lower sales and decreased gross profit. Corporate expenses increased $8.3 million due to higher incentive-related employee costs and strategic investments.
There are no restrictions on cash distributions to PAHC from our international subsidiaries. 68 Table of Contents Contractual obligations Our contractual obligations include maturities under the 2021 Credit Facilities and the 2022 Term Loan, including future interest accruals, operating lease commitments, and certain purchase obligations.
Contractual obligations Our contractual obligations include maturities under the 2021 Credit Facilities and the 2022 Term Loan, including future interest accruals, operating lease commitments, and certain purchase obligations.
This quarterly financial data was prepared on the same basis as, and should be read in conjunction with, the audited consolidated financial statements and related notes included herein. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Quarters ​ Year ​ September 30, December 31, March 31, June 30, June 30, For the Periods Ended ​ 2022 ​ 2022 ​ 2023 ​ 2023 ​ 2023 ​ ​ (in thousands) Net sales ​ ​ ​ ​ ​ MFAs and other ​ $ 92,790 ​ $ 97,179 ​ $ 93,217 ​ $ 104,163 ​ $ 387,349 Nutritional Specialties ​ 39,054 ​ 43,856 ​ 45,016 ​ 44,578 ​ 172,504 Vaccines ​ 23,015 ​ 22,768 ​ 26,201 ​ 28,014 ​ 99,998 Animal Health ​ $ 154,859 ​ $ 163,803 ​ $ 164,434 ​ $ 176,755 ​ $ 659,851 Mineral Nutrition ​ 59,646 ​ ​ 61,644 ​ ​ 62,922 ​ 58,444 ​ 242,656 Performance Products ​ 18,016 ​ ​ 19,199 ​ ​ 18,317 ​ 19,850 ​ 75,382 Total net sales ​ 232,521 ​ 244,646 ​ 245,673 ​ 255,049 ​ 977,889 Cost of goods sold ​ 163,875 ​ ​ 167,261 ​ ​ 170,133 ​ 178,383 ​ 679,652 Gross profit ​ 68,646 ​ 77,385 ​ 75,540 ​ 76,666 ​ 298,237 Selling, general and administrative expenses ​ ​ 54,962 ​ ​ 61,541 ​ ​ 56,987 ​ ​ 52,900 ​ ​ 226,390 Operating income ​ ​ 13,684 ​ ​ 15,844 ​ ​ 18,553 ​ ​ 23,766 ​ ​ 71,847 Interest expense, net ​ 3,067 ​ ​ 3,884 ​ ​ 3,871 ​ 4,499 ​ 15,321 Foreign currency (gains) losses, net ​ 5,200 ​ ​ (149) ​ ​ (422) ​ (2,174) ​ 2,455 Income before income taxes ​ 5,417 ​ 12,109 ​ 15,104 ​ 21,441 ​ 54,071 Provision for income taxes ​ 1,561 ​ ​ 4,899 ​ ​ 5,062 ​ 9,943 ​ 21,465 Net income ​ $ 3,856 ​ $ 7,210 ​ $ 10,042 ​ $ 11,498 ​ $ 32,606 Net income per share ​ ​ ​ ​ ​ basic ​ $ 0.10 ​ $ 0.18 ​ $ 0.25 ​ $ 0.28 ​ $ 0.81 diluted ​ $ 0.10 ​ $ 0.18 ​ $ 0.25 ​ $ 0.28 ​ $ 0.81 Adjusted EBITDA ​ ​ ​ ​ ​ Animal Health ​ $ 26,964 ​ $ 37,059 ​ $ 34,217 ​ $ 37,899 ​ $ 136,139 Mineral Nutrition ​ 5,297 ​ 4,399 ​ 3,859 ​ 3,862 ​ 17,417 Performance Products ​ 2,364 ​ 2,292 ​ 2,413 ​ 2,277 ​ 9,346 Corporate ​ (12,491) ​ (12,838) ​ (13,122) ​ (11,698) ​ (50,149) Adjusted EBITDA ​ $ 22,134 ​ $ 30,912 ​ $ 27,367 ​ $ 32,340 ​ $ 112,753 Reconciliation of net income to Adjusted EBITDA ​ ​ ​ ​ ​ Net income ​ $ 3,856 ​ $ 7,210 ​ $ 10,042 ​ $ 11,498 ​ $ 32,606 Interest expense, net ​ 3,067 ​ 3,884 ​ 3,871 ​ 4,499 ​ 15,321 Provision for income taxes ​ 1,561 ​ 4,899 ​ 5,062 ​ 9,943 ​ 21,465 Depreciation and amortization ​ 8,450 ​ ​ 8,499 ​ ​ 8,489 ​ 8,574 ​ 34,012 EBITDA ​ ​ 16,934 ​ 24,492 ​ 27,464 ​ 34,514 ​ 103,404 Environmental remediation costs ​ — ​ 6,569 ​ 325 ​ — ​ 6,894 Foreign currency (gains) losses, net ​ 5,200 ​ (149) ​ (422) ​ (2,174) ​ 2,455 Adjusted EBITDA ​ $ 22,134 ​ $ 30,912 ​ $ 27,367 ​ $ 32,340 ​ $ 112,753 ​ 70 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Quarters ​ Year ​ September 30, December 31, March 31, June 30, June 30, For the Periods Ended ​ 2021 ​ 2021 ​ 2022 ​ 2022 ​ 2022 ​ ​ (in thousands) Net sales ​ ​ ​ ​ ​ MFAs and other ​ $ 83,758 ​ $ 91,724 ​ $ 84,330 ​ $ 101,726 ​ $ 361,538 Nutritional Specialties ​ 35,997 ​ 37,330 ​ 41,394 ​ 42,475 ​ 157,196 Vaccines ​ 21,249 ​ 21,873 ​ 22,865 ​ 22,334 ​ 88,321 Animal Health ​ $ 141,004 ​ $ 150,927 ​ $ 148,589 ​ $ 166,535 ​ $ 607,055 Mineral Nutrition ​ 54,432 ​ 66,655 ​ 69,033 ​ 69,392 ​ 259,512 Performance Products ​ 19,229 ​ 15,130 ​ 21,997 ​ 19,338 ​ 75,694 Total net sales ​ 214,665 ​ 232,712 ​ 239,619 ​ 255,265 ​ 942,261 Cost of goods sold ​ 149,987 ​ 162,040 ​ 167,993 ​ 176,841 ​ 656,861 Gross profit ​ 64,678 ​ 70,672 ​ 71,626 ​ 78,424 ​ 285,400 Selling, general and administrative expenses ​ ​ 50,066 ​ ​ 48,378 ​ ​ 52,432 ​ ​ 55,538 ​ ​ 206,414 Operating income ​ ​ 14,612 ​ ​ 22,294 ​ ​ 19,194 ​ ​ 22,886 ​ ​ 78,986 Interest expense, net ​ 2,889 ​ 2,953 ​ 2,925 ​ 3,108 ​ 11,875 Foreign currency (gains) losses, net ​ 2,128 ​ (4,189) ​ (10,564) ​ 7,409 ​ (5,216) Income before income taxes ​ 9,595 ​ 23,530 ​ 26,833 ​ 12,369 ​ 72,327 Provision (benefit) for income taxes ​ 3,061 ​ 6,065 ​ 9,144 ​ 4,882 ​ 23,152 Net income ​ $ 6,534 ​ $ 17,465 ​ $ 17,689 ​ $ 7,487 ​ $ 49,175 Net income per share ​ ​ ​ ​ ​ basic ​ $ 0.16 ​ $ 0.43 ​ $ 0.44 ​ $ 0.18 ​ $ 1.21 diluted ​ $ 0.16 ​ $ 0.43 ​ $ 0.44 ​ $ 0.18 ​ $ 1.21 Adjusted EBITDA ​ ​ ​ ​ ​ Animal Health ​ $ 27,637 ​ $ 33,696 ​ $ 29,232 ​ $ 33,541 ​ $ 124,106 Mineral Nutrition ​ 4,533 ​ 5,525 ​ 7,303 ​ 6,677 ​ 24,038 Performance Products ​ 2,138 ​ 1,324 ​ 2,865 ​ 2,379 ​ 8,706 Corporate ​ (11,842) ​ (11,453) ​ (11,404) ​ (11,068) ​ (45,767) Adjusted EBITDA ​ $ 22,466 ​ $ 29,092 ​ $ 27,996 ​ $ 31,529 ​ $ 111,083 Reconciliation of net income to Adjusted EBITDA ​ ​ ​ ​ ​ Net income ​ $ 6,534 ​ $ 17,465 ​ $ 17,689 ​ $ 7,487 ​ $ 49,175 Interest expense, net ​ 2,889 ​ 2,953 ​ 2,925 ​ 3,108 ​ 11,875 Provision (benefit) for income taxes ​ 3,061 ​ 6,065 ​ 9,144 ​ 4,882 ​ 23,152 Depreciation and amortization ​ 7,854 ​ 8,001 ​ 8,445 ​ 8,405 ​ 32,705 EBITDA ​ ​ 20,338 ​ 34,484 ​ 38,203 ​ 23,882 ​ 116,907 Acquisition-related cost of goods sold ​ — ​ — ​ 78 ​ 238 ​ 316 Acquisition-related transaction costs ​ — ​ — ​ 279 ​ — ​ 279 Gain on sale of investment ​ ​ — ​ ​ (1,203) ​ ​ — ​ ​ — ​ ​ (1,203) Foreign currency (gains) losses, net ​ ​ 2,128 ​ (4,189) ​ (10,564) ​ 7,409 ​ ​ (5,216) Adjusted EBITDA ​ $ 22,466 ​ $ 29,092 ​ $ 27,996 ​ $ 31,529 ​ $ 111,083 ​ General description of non-GAAP financial measures Adjusted EBITDA Adjusted EBITDA is an alternative view of performance used by management as our primary operating measure, and we believe that investors’ understanding of our performance is enhanced by disclosing this performance measure.
This quarterly financial data was prepared on the same basis as, and should be read in conjunction with, the audited consolidated financial statements and related notes included herein. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Quarters ​ Year ​ September 30, December 31, March 31, June 30, June 30, For the Periods Ended ​ 2023 ​ 2023 ​ 2024 ​ 2024 ​ 2024 ​ ​ (in thousands) Net sales ​ ​ ​ ​ ​ MFAs and other ​ $ 94,104 ​ $ 101,941 ​ $ 108,216 ​ $ 116,698 ​ $ 420,959 Nutritional Specialties ​ 40,210 ​ 41,436 ​ 40,194 ​ 42,831 ​ 164,671 Vaccines ​ 26,216 ​ 29,727 ​ 32,923 ​ 31,986 ​ 120,852 Animal Health ​ $ 160,530 ​ $ 173,104 ​ $ 181,333 ​ $ 191,515 ​ $ 706,482 Mineral Nutrition ​ 56,026 ​ ​ 61,347 ​ ​ 64,228 ​ 62,062 ​ 243,663 Performance Products ​ 14,793 ​ ​ 15,492 ​ ​ 17,662 ​ 19,587 ​ 67,534 Total net sales ​ 231,349 ​ 249,943 ​ 263,223 ​ 273,164 ​ 1,017,679 Cost of goods sold ​ 163,623 ​ ​ 171,327 ​ ​ 183,623 ​ 186,014 ​ 704,587 Gross profit ​ 67,726 ​ 78,616 ​ 79,600 ​ 87,150 ​ 313,092 Selling, general and administrative expenses ​ ​ 68,452 ​ ​ 62,915 ​ ​ 59,676 ​ ​ 68,734 ​ ​ 259,777 Operating income (loss) ​ ​ (726) ​ ​ 15,701 ​ ​ 19,924 ​ ​ 18,416 ​ ​ 53,315 Interest expense, net ​ 4,564 ​ ​ 4,659 ​ ​ 4,575 ​ 4,738 ​ 18,536 Foreign currency (gains) losses, net ​ 6,689 ​ ​ 7,477 ​ ​ 2,427 ​ 7,270 ​ 23,863 Income (expense) before income taxes ​ (11,979) ​ 3,565 ​ 12,922 ​ 6,408 ​ 10,916 Provision (benefit) for income taxes ​ (3,964) ​ ​ 2,291 ​ ​ 4,517 ​ 5,656 ​ 8,500 Net income (loss) ​ $ (8,015) ​ $ 1,274 ​ $ 8,405 ​ $ 752 ​ $ 2,416 Net income (loss) per share ​ ​ ​ ​ ​ basic ​ $ (0.20) ​ $ 0.03 ​ $ 0.21 ​ $ 0.02 ​ $ 0.06 diluted ​ $ (0.20) ​ $ 0.03 ​ $ 0.21 ​ $ 0.02 ​ $ 0.06 Adjusted EBITDA ​ ​ ​ ​ ​ Animal Health ​ $ 28,494 ​ $ 39,299 ​ $ 36,524 ​ $ 41,289 ​ $ 145,606 Mineral Nutrition ​ 2,881 ​ 3,507 ​ 4,665 ​ 5,396 ​ 16,449 Performance Products ​ 1,409 ​ 817 ​ 2,371 ​ 3,065 ​ 7,662 Corporate ​ (14,133) ​ (14,171) ​ (13,856) ​ (16,320) ​ (58,480) Adjusted EBITDA ​ $ 18,651 ​ $ 29,452 ​ $ 29,704 ​ $ 33,430 ​ $ 111,237 Reconciliation of net income (loss) to Adjusted EBITDA ​ ​ ​ ​ ​ Net income (loss) ​ $ (8,015) ​ $ 1,274 ​ $ 8,405 ​ $ 752 ​ $ 2,416 Interest expense, net ​ 4,564 ​ 4,659 ​ 4,575 ​ 4,738 ​ 18,536 Provision (benefit) for income taxes ​ (3,964) ​ 2,291 ​ 4,517 ​ 5,656 ​ 8,500 Depreciation and amortization ​ 8,871 ​ ​ 8,910 ​ ​ 9,196 ​ 9,201 ​ 36,178 EBITDA ​ ​ 1,456 ​ 17,134 ​ 26,693 ​ 20,347 ​ 65,630 Acquisition-related cost of goods sold ​ ​ — ​ ​ 310 ​ ​ 211 ​ ​ — ​ ​ 521 Acquisition-related transaction costs ​ ​ — ​ ​ — ​ ​ 512 ​ ​ 5,893 ​ ​ 6,405 Pension settlement cost ​ ​ 10,425 ​ ​ 249 ​ ​ — ​ ​ — ​ ​ 10,674 Brazil employment taxes ​ ​ — ​ ​ 4,202 ​ ​ — ​ ​ — ​ ​ 4,202 Stock-based compensation ​ 81 ​ 80 ​ 135 ​ 179 ​ 475 Phibro Forward income growth initiatives implementation costs ​ ​ — ​ ​ — ​ ​ — ​ ​ 366 ​ ​ 366 Insurance proceeds ​ ​ — ​ ​ — ​ ​ (274) ​ ​ (625) ​ ​ (899) Foreign currency (gains) losses, net ​ 6,689 ​ 7,477 ​ 2,427 ​ 7,270 ​ 23,863 Adjusted EBITDA ​ $ 18,651 ​ $ 29,452 ​ $ 29,704 ​ $ 33,430 ​ $ 111,237 ​ 70 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Quarters ​ Year ​ September 30, December 31, March 31, June 30, June 30, For the Periods Ended ​ 2022 ​ 2022 ​ 2023 ​ 2023 ​ 2023 ​ ​ (in thousands) Net sales ​ ​ ​ ​ ​ MFAs and other ​ $ 92,790 ​ $ 97,179 ​ $ 93,217 ​ $ 104,163 ​ $ 387,349 Nutritional Specialties ​ 39,054 ​ 43,856 ​ 45,016 ​ 44,578 ​ 172,504 Vaccines ​ 23,015 ​ 22,768 ​ 26,201 ​ 28,014 ​ 99,998 Animal Health ​ $ 154,859 ​ $ 163,803 ​ $ 164,434 ​ $ 176,755 ​ $ 659,851 Mineral Nutrition ​ 59,646 ​ ​ 61,644 ​ ​ 62,922 ​ 58,444 ​ 242,656 Performance Products ​ 18,016 ​ ​ 19,199 ​ ​ 18,317 ​ 19,850 ​ 75,382 Total net sales ​ 232,521 ​ 244,646 ​ 245,673 ​ 255,049 ​ 977,889 Cost of goods sold ​ 163,875 ​ ​ 167,261 ​ ​ 170,133 ​ 178,383 ​ 679,652 Gross profit ​ 68,646 ​ 77,385 ​ 75,540 ​ 76,666 ​ 298,237 Selling, general and administrative expenses ​ ​ 54,962 ​ ​ 61,541 ​ ​ 56,987 ​ ​ 52,900 ​ ​ 226,390 Operating income ​ ​ 13,684 ​ ​ 15,844 ​ ​ 18,553 ​ ​ 23,766 ​ ​ 71,847 Interest expense, net ​ 3,067 ​ ​ 3,884 ​ ​ 3,871 ​ 4,499 ​ 15,321 Foreign currency (gains) losses, net ​ 5,200 ​ ​ (149) ​ ​ (422) ​ (2,174) ​ 2,455 Income before income taxes ​ 5,417 ​ 12,109 ​ 15,104 ​ 21,441 ​ 54,071 Provision for income taxes ​ 1,561 ​ ​ 4,899 ​ ​ 5,062 ​ 9,943 ​ 21,465 Net income ​ $ 3,856 ​ $ 7,210 ​ $ 10,042 ​ $ 11,498 ​ $ 32,606 Net income per share ​ ​ ​ ​ ​ basic ​ $ 0.10 ​ $ 0.18 ​ $ 0.25 ​ $ 0.28 ​ $ 0.81 diluted ​ $ 0.10 ​ $ 0.18 ​ $ 0.25 ​ $ 0.28 ​ $ 0.81 Adjusted EBITDA ​ ​ ​ ​ ​ Animal Health ​ $ 26,964 ​ $ 37,059 ​ $ 34,217 ​ $ 37,899 ​ $ 136,139 Mineral Nutrition ​ 5,297 ​ 4,399 ​ 3,859 ​ 3,862 ​ 17,417 Performance Products ​ 2,364 ​ 2,292 ​ 2,413 ​ 2,277 ​ 9,346 Corporate ​ (12,491) ​ (12,838) ​ (13,122) ​ (11,698) ​ (50,149) Adjusted EBITDA ​ $ 22,134 ​ $ 30,912 ​ $ 27,367 ​ $ 32,340 ​ $ 112,753 Reconciliation of net income to Adjusted EBITDA ​ ​ ​ ​ ​ Net income ​ $ 3,856 ​ $ 7,210 ​ $ 10,042 ​ $ 11,498 ​ $ 32,606 Interest expense, net ​ 3,067 ​ 3,884 ​ 3,871 ​ 4,499 ​ 15,321 Provision for income taxes ​ 1,561 ​ 4,899 ​ 5,062 ​ 9,943 ​ 21,465 Depreciation and amortization ​ 8,450 ​ ​ 8,499 ​ ​ 8,489 ​ 8,574 ​ 34,012 EBITDA ​ ​ 16,934 ​ 24,492 ​ 27,464 ​ 34,514 ​ 103,404 Environmental remediation costs ​ ​ — ​ ​ 6,569 ​ ​ 325 ​ ​ — ​ ​ 6,894 Foreign currency (gains) losses, net ​ ​ 5,200 ​ (149) ​ (422) ​ (2,174) ​ ​ 2,455 Adjusted EBITDA ​ $ 22,134 ​ $ 30,912 ​ $ 27,367 ​ $ 32,340 ​ $ 112,753 ​ General description of non-GAAP financial measures Adjusted EBITDA Adjusted EBITDA is an alternative view of performance used by management as our primary operating measure, and we believe that investors’ understanding of our performance is enhanced by disclosing this performance measure.
We paid $19.4 million in dividends to holders of our Class A common stock and Class B common stock. Financing activities used $16.3 million of net cash for the year ended June 30, 2022. Net borrowings on our 2021 Revolver provided $50.0 million. We paid $19.4 million in dividends to holders of our Class A and Class B common stock.
We paid $19.4 million in dividends to holders of our Class A common stock and Class B common stock. Financing activities provided $27.0 million of net cash for the year ended June 30, 2023. Proceeds from the 2023 Incremental Term Loan and 2022 Term Loan provided $62.0 million, with debt issuance costs of $1.5 million.
We calculate DSO based on a 360-day year and compare accounts receivable with sales for the quarter ending at the balance sheet date. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Change As of June 30 2023 2022 2021 2023 / 2022 2022 / 2021 ​ ​ (in thousands) Inventories ​ $ 277,570 ​ $ 259,158 ​ $ 216,312 ​ $ 18,412 ​ $ 42,846 ​ Inventory increased by $18.4 million in 2023, due to increased raw material and production costs, product mix, lower demand for our Mineral Nutrition products and a projected increase in future demand of other products in our portfolio.
We calculate DSO based on a 360-day year and compare accounts receivable with sales for the quarter ending at the balance sheet date. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Change As of June 30 2024 2023 2022 2024 / 2023 2023 / 2022 ​ ​ (in thousands) Inventories ​ $ 265,911 ​ $ 277,570 ​ $ 259,158 ​ $ (11,659) ​ $ 18,412 ​ Inventory decreased by $11.7 million in 2024, primarily due to an effort to manage inventory levels and the effect of currency fluctuations, partially offset by increased raw material and production costs.
Significant judgment may be required to determine the fair values of certain tangible and intangible assets and in assigning their respective useful lives. Significant judgment also may be required to determine the fair values of contingent consideration, if any.
Significant judgment also may be required to determine the fair values of contingent consideration, if any. We typically utilize third-party valuation specialists to assist us in determining fair values of significant tangible and intangible assets and contingent consideration.
We consider acquisition-related activities and business restructuring costs related to productivity and cost saving initiatives, including employee separation costs, to be unusual items that we do not expect to occur as part of our normal business on a regular basis.
We consider business restructuring costs related to productivity and cost saving initiatives to be unusual items that we do not expect to occur as part of our normal business on a regular basis. We consider foreign currency gains and losses to be non-operational because they arise principally from intercompany transactions and are largely non-cash in nature.
Foreign currency (gains) losses, net Foreign currency losses, net for the year ended June 30, 2023, were $2.5 million, as compared to net gains of $5.2 million for the year ended June 30, 2022. Current period losses were driven by fluctuations in certain currencies related to the U.S. dollar.
Foreign currency (gains) losses, net Foreign currency losses, net for the year ended June 30, 2024 were $23.9 million, as compared to net losses of $2.5 million for the year ended June 30, 2023.
Performance Products gross profit increased $1.7 million, due primarily to more favorable product mix. Selling, general and administrative expenses SG&A expenses of $226.4 million for the year ended June 30, 2023, increased $20.0 million, or 10%, as compared to the year ended June 30, 2022.
Performance Products gross profit decreased $1.8 million, due to lower demand and unfavorable product mix. Acquisition-related cost of goods sold reduced gross profit by $0.5 million. Selling, general and administrative expenses SG&A expenses of $259.8 million for the year ended June 30, 2024 increased $33.4 million, or 15%, as compared to the year ended June 30, 2023.
Gross profit Gross profit of $298.2 million for the year ended June 30, 2023, increased $12.8 million, or 4%, as compared to the year ended June 30, 2022. Gross margin increased 20 basis points to 30.5% of net sales for the year ended June 30, 2023, as compared to 30.3% for the year ended June 30, 2022.
Gross margin increased 30 basis points to 30.8% of net sales for the year ended June 30, 2024 as compared to 30.5% for the year ended June 30, 2023. Animal Health gross profit increased $17.5 million due to higher product demand. Mineral Nutrition gross profit decreased $0.3 million.
Our future effective income tax rate will vary due to the relative amounts of taxable income in various jurisdictions, future changes in tax rates and legislation and other factors.
Our future effective income tax rate will vary due to the relative amounts of taxable income in various jurisdictions, future changes in tax rates and legislation and other factors. We expect to repatriate approximately $80.0 million of international earnings, which will be subject to applicable non-U.S. withholding and related taxes, net of reductions in U.S. income taxes.
Operating activities Operating activities provided $13.3 million of net cash for the year ended June 30, 2023.
Accrued expenses and other liabilities provided cash of $12.2 million, primarily due to increased employee-related liabilities and accrued transaction costs. Operating activities provided $13.3 million of net cash for the year ended June 30, 2023.
Net sales of MFAs and other increased $25.8 million, or 7%, due to increased demand for our MFAs, particularly in the U.S. and Latin America regions, and for processing aids used in the ethanol fermentation industry.
Net sales of MFAs and other increased $33.6 million, or 9%, due to increased volumes in all regions and higher demand for processing aids used in the ethanol fermentation industry. Net sales of nutritional specialty products decreased $7.8 million, or 5%, due to decreased demand for dairy and microbial products, partially offset by increased sales of poultry products.
Other investing activities provided $0.8 million of cash. Investing activities used $22.6 million of net cash for the year ended June 30, 2022. Capital expenditures were $37.0 million as we continued to invest in expanding production capacity and productivity improvements. Net proceeds from maturities of short-term investments were $26.0 million.
Capital expenditures were $41.2 million, related primarily to continued investments in expanded production capacity and productivity improvements. Net purchases and maturities of short-term investments used $4.0 million in cash. We acquired a business for $3.3 million, net of cash acquired. Other investing activities provided $0.3 million of cash.
Certain significant items Adjusted EBITDA, adjusted net income and adjusted diluted earnings per share are calculated prior to considering certain items. We evaluate such items on an individual basis. Such evaluation considers both the quantitative and the qualitative aspect of their unusual or non-operational nature.
Certain significant items Adjusted EBITDA, adjusted net income and adjusted diluted earnings per share are calculated prior to considering acquisition-related items and certain other items, as detailed in the table titled “Items Excluded from Adjusted Net Income” above. We evaluate such other items on an individual basis.
SG&A for the year ended June 30, 2023, included $6.9 million of environmental remediation costs mostly related to the definitive settlement agreement related to the Omega Chemical Site. SG&A for the year ended June 30, 2022, included a $1.2 million gain on sale of investment and $0.3 million of acquisition-related transaction costs.
SG&A for the year ended June 30, 2023, included $6.9 million of environmental remediation costs mostly related to the definitive settlement agreement related to the Omega Chemical Site. Excluding these items, SG&A increased $19.1 million, or 9%. Animal Health SG&A increased $10.5 million, primarily due to an increase in employee-related costs and new product launches in Brazil.
Should we be unable to successfully defend the safety of the product, the loss of carbadox sales will have an adverse effect on our financial condition and results of operations. Sales of Mecadox (carbadox) for the year ended June 30, 2023, were approximately $20 million.
In January 2024, Phibro filed a lawsuit in the D.C. Federal District Court asking the court to invalidate the order which revoked the regulatory method for carbadox. Should we be unable to successfully defend the safety of the product, the loss of carbadox sales will have an adverse effect on our financial condition and results of operations.
Business Combinations Our consolidated financial statements reflect the operations of an acquired business beginning as of the date of acquisition. Assets acquired and liabilities assumed are recorded at their fair values at the date of acquisition; goodwill is recorded for any excess of the purchase price over the fair values of the net assets acquired.
Assets acquired and liabilities assumed are recorded at their fair values at the date of acquisition; goodwill is recorded for any excess of the purchase price over the fair values of the net assets acquired. Significant judgment may be required to determine the fair values of certain tangible and intangible assets and in assigning their respective useful lives.
Net cash provided by operating activities was driven by strong business performance, resulting in cash provided by net income and non-cash items, including depreciation and amortization, of $76.3 million, offset by cash used in the ordinary course of business for changes in operating assets and liabilities of $44.6 million.
Cash provided by net income, adjusted for non-cash items, including depreciation and amortization, was $54.5 million. Cash provided in the ordinary course of business from changes in operating assets and liabilities and other items was $33.1 million. Accounts receivable used $8.7 million of cash due to sales growth, partially offset by an improvement in days sales outstanding.
We paid $9.4 million in scheduled debt maturities. We paid $4.8 million for acquisition-related contingent consideration. Liquidity and capital resources We believe our cash on hand, our operating cash flows and our financing arrangements, including the availability of borrowings under the 2021 Revolver and foreign credit lines, will be sufficient to support our ongoing cash needs.
Liquidity and capital resources We believe our cash on hand, our operating cash flows and our financing arrangements, including the availability of borrowings under the Revolving Credit Commitments (as defined below), will be sufficient to support our ongoing cash needs. We have considered the current and potential future effects of the macroeconomic market conditions in the financial markets.
Net payments on our revolving credit facility under which we could borrow up to $310,000, subject to the terms of the agreement (the “2021 Revolver”) reduced the outstanding balance by $4.0 million. Proceeds from insurance premium financing, net of cash payments, provided cash of $5.2 million.
We paid $15.3 million in scheduled debt maturities. Net payments on our revolving credit facility reduced the outstanding 67 Table of Contents balance by $4.0 million. Proceeds from insurance premium financing, net of cash payments, provided cash of $5.2 million. We paid $19.4 million in dividends to holders of our Class A common stock and Class B common stock.
Sales returns and product recalls have been insignificant and infrequent due to the nature of the products we sell. Net sales include shipping and handling fees billed to customers.
Sales returns and product recalls have been insignificant and infrequent due to the nature of the products we sell. Business Combinations Our consolidated financial statements reflect the operations of an acquired business beginning as of the date of acquisition.
Excluding these items, SG&A increased $12.2 million, or 6%. Animal Health SG&A increased $6.6 million, primarily due to an increase in employee-related costs, and an increase in selling costs for our companion animal product. Mineral Nutrition SG&A decreased $0.2 million. Performance Products SG&A increased $1.2 million, mainly due to an increase in employee-related costs.
Mineral Nutrition SG&A increased $0.4 million due to an increase in employee-related costs. Performance Products SG&A decreased $0.1 million. Corporate expenses increased $8.3 million due to higher incentive-related employee costs and strategic investments.
Interest expense, net increased $3.4 million, and the change in foreign currency (gains) losses, net resulted in a $7.7 million reduction in income before income taxes for the year ended June 30, 2023. Income tax expense decreased $1.7 million.
Changes in interest expense, net and foreign currency losses resulted in a $3.2 million and $21.4 million reduction in income before income taxes, respectively. This was partially offset by a $13.0 million decrease in income tax expense.
Adjusted net income Adjusted net income of $49.0 million for the year ended June 30, 2023, decreased $4.2 million, or 8%, as compared to the prior year. The decrease was driven by higher SG&A, higher interest expense, net and a higher provision for income taxes, partially offset by higher gross profit.
Interest expense, net Interest expense, net of $18.5 million for the year ended June 30, 2024 increased by $3.2 million, or 21%, as compared to the year ended June 30, 2023, as a result of higher variable interest rates and increased debt levels, partially offset by higher returns on short-term investments.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeOur 2021 Credit Facilities carry floating interest rates based on the Secured Overnight Financing Rate (“SOFR”) (previously the London Interbank Offered Rate (“LIBOR”)) or the Prime Rate. Therefore, our profitability and cash flows are exposed to interest rate fluctuations. Our interest rates also include variable applicable rates in addition to the SOFR portion of our interest obligation.
Biggest changeFor additional details, see “Notes to Consolidated Financial Statements — Derivatives.” Interest rate risk Our 2021 Credit Facilities and 2022 Term Loan carry floating interest rates based on the Secured Overnight Financing Rate (“SOFR”) or the Prime Rate. Therefore, our profitability and cash flows are exposed to interest rate fluctuations.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk Foreign exchange risk Portions of our net sales and costs are exposed to changes in foreign exchanges rates. Our products are sold in more than 80 countries and, as a result, our revenues are influenced by changes in foreign exchange rates.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk Foreign exchange risk Portions of our net sales and costs are exposed to changes in foreign exchange rates. Our products are sold in more than 80 countries and, as a result, our revenues are influenced by changes in foreign exchange rates.
The analysis indicates that if the U.S. dollar were to appreciate or depreciate by 10%, the fair value of these contracts would decrease or increase by $0.2 million.
The analysis indicates that if the U.S. dollar were to appreciate or depreciate by 10%, the fair value of these contracts would decrease by $0.3 million or increase by $0.2 million.
We use these contracts to mitigate the potential earnings effects from exposure to foreign currencies. We analyzed our foreign currency derivative contracts at June 30, 2023 to determine their sensitivity to exchange rate changes.
We use these contracts to mitigate the potential earnings effects from exposure to foreign currencies. We analyzed our foreign currency derivative contracts at June 30, 2024 to determine their sensitivity to exchange rate changes.
For additional details, see “Notes to Consolidated Financial Statements — Debt” and “Notes to Consolidated Financial Statements — Derivatives.” ​ 77 Table of Contents
For additional details, see “Notes to Consolidated Financial Statements — Debt” and “Notes to Consolidated Financial Statements — Derivatives.” ​ 76 Table of Contents
We designated the interest rate swap as a highly effective cash flow hedge. 76 Table of Contents Based on our outstanding debt balances and the applicable rate in effect as of June 30, 2023, and considering the interest rate swap agreement, a 100-basis point increase in SOFR would increase annual interest expense and decrease cash flows by $1.8 million.
Based on our outstanding debt balances and the applicable rates in effect as of June 30, 2024, and considering the interest rate swap agreement, a 100-basis point increase in SOFR would increase annual interest expense and decrease cash flows by $1.9 million.
In March 2020, and amended in November 2022, we entered into an interest rate swap agreement that effectively converted the floating SOFR portion of our interest obligation to a fixed rate of 0.61% on a $300 million principal amount.
We are a party to an interest rate swap agreement on $300,000 of notional principal that effectively converts the floating portion of our interest obligation on that amount of debt to a fixed rate of 0.61% through June 2025.
The applicable rates vary from 1.50% to 2.75%, based on the First Lien Net Leverage Ratio, as defined in the 2021 Credit Facilities.
Our interest rates also include variable applicable rates in addition to the SOFR portion of our interest obligation. The applicable rates for SOFR borrowings vary from 1.50% to 2.75%, based on the First Lien Net Leverage Ratio.
Removed
For additional details, see “Notes to Consolidated Financial Statements — Derivatives.” Interest rate risk We have effectively converted $300 million of our outstanding debt to fixed interest rates through June 2025, through the use of an interest rate swap agreement. Our debt is subject to floating interest rates to the extent not effectively converted to fixed interest rate debt.

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