Full Press Release Details
Animal Health Corporation Reports Fourth Quarter and Fiscal Year Results, Provides Financial Guidance
August 25, 2021 (Business Wire) - Phibro Animal Health Corporation (Nasdaq:PAHC) today announced financial results for its
fourth quarter and fiscal year ended June 30, 2021, and provided financial guidance for the year ending June 30, 2022.
our fiscal year strong, posting our fourth consecutive quarter of net sales growth and ahead of our fourth quarter projections. Strong
net sales and one-off tax benefits drove diluted EPS of $0.42, well ahead of expectations." said Jack Bendheim, Phibro's
Chairman, President and Chief Executive Officer. Jack continued, "I am also pleased to announce that we are projecting continued
growth in both our top-and-bottom line financial performance for our next full fiscal year."
million for the three months ended June 30, 2021, increased $34.4 million, or 19%, as compared to the three months ended June 30, 2020,
the first full quarter when the global economy was dampened by the COVID-19 global pandemic. Animal Health, Mineral Nutrition and Performance
Products increased $24.3 million, $6.9 million, and $3.1 million, respectively.
million for the three months ended June 30, 2021, increased $24.3 million, or 20%. Net sales of MFAs and other increased $18.6 million,
or 26%, driven by higher domestic and international demand, primarily due to a level of recovery from the global pandemic. Net sales
of nutritional specialty products increased $5.7 million, or 18%, principally due to domestic and international volume growth in dairy
products. Net sales of vaccines increased $0.1 million, or 1%, as domestic volume growth and increased demand in the Asia Pacific region
were partially offset by challenging economic conditions in Eastern Europe.
million for the three months ended June 30, 2021, increased $6.9 million, or 14%, driven by increased average selling prices and higher
volumes. The increase in average selling prices is correlated with the movement of the underlying raw material costs.
Performance Products
million for the three months ended June 30, 2021, increased $3.1 million, or 23%. The increase was driven by strong demand for copper-based
products coupled with favorable product pricing correlated with underlying raw material costs.
Gross profit of $69.8
million for the three months ended June 30, 2021, increased $9.3 million, or 15%, as compared to the three months ended June 30, 2020.
Gross margin decreased 90 basis points to 31.7% of net sales for the three months ended June 30, 2021, as compared to 32.6% for the three
months ended June 30, 2020.
gross profit increased $6.4 million due to higher sales. Mineral Nutrition gross profit increased $1.3 million, driven primarily by
increased average selling prices and favorable product mix. Performance Products gross profit increased $1.5 million, driven by
higher volumes and favorable product mix.
Selling, general and administrative
and administrative expenses ("SG&A") of $50.7 million for the three months ended June 30, 2021, increased $8.2 million,
or 19%, as compared to the three months ended June 30, 2020. SG&A for the quarter ended June 30, 2020, included $0.6 million of stock-based
compensation expense and income of $3.0 million from other acquisition related items. Excluding these items, SG&A increased $5.8
increased $6.2 million, due to higher costs relating to international market expansion initiatives, plus incremental performance-related
compensation expenses. Mineral Nutrition and Performance Products SG&A were comparable to the prior year. Corporate SG&A decreased
$0.4 million. Prior year stock-based compensation expense and income from other acquisition-related items accounted for a $2.4 million
Interest expense, net
net of $3.9 million for the three months ended June 30, 2021, increased $1.1 million, or 40%, as compared to the three months ended June
30, 2020. Interest expense, net increased primarily due to $1.0 million of expense related to the April 2021 refinancing.
Foreign currency gains, net
gains, net were $0.9 million and $1.1 million, for the three months ended June 30, 2021 and 2020, respectively. Foreign currency gains,
net primarily arose from intercompany balances, driven by the movement of the Mexican, South African and Turkish currencies relative
Provision for income taxes
for income taxes was $1.0 million for the three months ended June 30, 2021, as compared to a provision for income taxes of $10.7
million for the three months ended June 30, 2020. The effective income tax rate was (6.2)% and 65.6% for the three months ended June
30, 2021 and 2020, respectively. The provision for income taxes during the three months ended June 30, 2021 and June 30, 2020,
included one-off items related to favorable and unfavorable changes in GILTI federal taxes, uncertain international tax positions
and valuation allowances. The respective effective income tax rates without these items would have been 33.6% for the three months
ended June 30, 2021 and 33.1% for the three months ended June 30, 2020.
million for the three months ended June 30, 2021, increased $11.5 million, as compared to net income of $5.6 million for the three months
ended June 30, 2020. Operating income increased $1.0 million, driven by higher gross profit, partially offset by increased SG&A expenses.
The increase in gross profit was primarily driven by higher volumes and favorable product mix in all segments. SG&A expenses increased
due to investments in strategic initiatives and incremental performance-related compensation costs. Income taxes decreased $11.7 million
due primarily to one-off tax benefits related to favorable changes in uncertain international tax positions and valuation allowances
and lower GILTI tax driven by the geographical mix of earnings. Interest expense increased $1.1 million due to costs related to the refinancing.
of $27.0 million for the three months ended June 30, 2021, increased $3.1 million, or 13%, as compared to the three months ended June
30, 2020. Animal Health Adjusted EBITDA was flat to the prior year as higher sales and gross profit were offset by increased SG&A
costs. Mineral Nutrition Adjusted EBITDA increased $1.2 million, driven by increased gross profit on favorable product mix. Performance
Products Adjusted EBITDA increased $1.6 million driven by increased gross profit. Corporate expenses decreased $0.4 million, primarily
due to investments in strategic initiatives and incremental performance-related compensation costs, more than offset by a decline in
professional fees and travel costs driven by COVID-19 limitations.
adjusted effective income tax rates for the three months ended June 30, 2021 and 2020, were 30.5% and 55.4%, respectively. The decrease
in our adjusted tax rate was driven by lower GILTI federal tax expense due to a shift in the geographical mix of earnings.
of $12.8 million for the three months ended June 30, 2021, increased $6.0 million, or 89%, as compared to the prior year. The increase
was driven by higher gross profit and lower provision for income taxes, partially offset by increased SG&A expenses. The increase
in gross profit was driven by higher volume and favorable product mix in the Animal Health segment, as well as increased gross profit
in the Mineral Nutrition and Performance Products segments. SG&A expenses increased due to investments in strategic initiatives and
incremental performance-related compensation costs.
Adjusted diluted EPS
diluted EPS was $0.32 for the quarter, an increase of $0.15, as compared to $0.17 in the prior year.
million for the year ended June 30, 2021, increased $33.0 million, or 4%, as compared to the year ended June 30, 2020. Animal Health,
Mineral Nutrition and Performance Products increased $18.8 million, $6.1 million, and $8.0 million, respectively.
million for the year ended June 30, 2021, increased $18.8 million, or 4%. Net sales of MFAs and other increased $7.7 million, or 2%,
due to increased domestic demand in swine and increased international sales in poultry. These gains were partially offset by an $8.9
million decline in net sales in China following regulatory changes effective January 1, 2020. Net sales of nutritional specialty products
grew $13.5 million, or 10%, due to international and domestic volume growth in dairy products, partially offset by lower sales in domestic
poultry. Net sales of vaccines declined $2.4 million, or 3%, as challenging economic conditions in Eastern Europe more than offset domestic
volume growth and increased demand in the Asia Pacific region.
million for the year ended June 30, 2021, increased $6.1 million, or 3%, due to higher overall average selling prices and increased unit
volumes. The increase in average selling prices is correlated with the movement of the underlying raw material costs.
Performance Products
million for the year ended June 30, 2021, increased $8.0 million, or 14%, driven by increased volumes of copper-based products.
Gross profit of $271.4 million
for the year ended June 30, 2021, increased $14.5 million, or 6%, as compared to the year ended June 30, 2020. Gross margin increased
50 basis points to 32.6% of net sales for the year ended June 30, 2021, as compared to 32.1% for the year ended June 30, 2020. The year
ended June 30, 2020, included $0.3 million of acquisition-related cost of goods sold.
profit increased $7.2 million due to sales growth. Mineral Nutrition gross profit increased $2.4 million, driven by increases in average
selling prices, partially offset by increases in raw material costs. Performance Products gross profit increased $4.8 million, driven
by higher volumes, higher average selling prices and decreases in raw material and production costs. Acquisition-related cost of goods
sold in the prior year accounted for $0.3 million of the gross profit improvement in the current year.
Selling, general and administrative
Selling, general and administrative
expenses ("SG&A") of $196.5 million for the year ended June 30, 2021, increased $8.8 million, or 5%, as compared
to the year ended June 30, 2020. SG&A for the year ended June 30, 2021, included $1.1 million of stock-based compensation. SG&A
for the year ended June 30, 2020, included $2.3 million of stock-based compensation, $0.4 million of restructuring costs, $0.5 million
of acquisition-related transaction costs and income of $2.8 million from other acquisition-related items. Excluding these items, SG&A
increased $8.0 million, or 4%.
Animal Health SG&A increased $5.6
million, primarily due to increased professional fees to support the continued use of carbadox and investments in international expansion
initiatives. Mineral Nutrition and Performance Products SG&A were comparable to the prior year. Corporate expenses increased $2.5
million, driven by investments in strategic initiatives, plus incremental costs for performance-related compensation and information
technology. Overall costs, including marketing, product development and travel, continued to be restrained due to COVID-19 limitations.