Full Press Release Details
Phibro Animal Health Corporation
Reports Fourth Quarter and Fiscal Year
TEANECK, N.J., September 9,
2015 (GLOBE NEWSWIRE) - Phibro Animal Health Corporation (NASDAQ:PAHC) today announced its financial results for its
fourth quarter and fiscal year ended June 30, 2015. It also provided guidance for its fiscal year ending June 30, 2016.
again, our Animal Health business delivered strong operating performance, with double-digit income growth. As we look to our fiscal
year 2016, we expect continued revenue and income growth and improved operating leverage. We are focused on our organic growth
opportunities and continue to seek acquisitions that will complement our strategy," commented Jack Bendheim, Phibro's
Chairman, President and Chief Executive Officer.
Net sales of $185.0 million increased
$1.3 million, or 1%, for the three months ended June 30, 2015, as compared to the three months ended June 30, 2014, due to growth
in Animal Health and Mineral Nutrition of $3.3 million and $0.7 million, respectively, offset by declines in Performance Products
Net sales of $117.4 million grew
$3.3 million, or 3%, for the three months ended June 30, 2015, primarily due to volume growth in nutritional specialties and vaccines,
partially offset by volume declines in MFAs and other. Nutritional
specialty products grew $5.2 million, or 30%, for
the three months ended June 30, 2015, primarily due to U.S. volume growth of our products for the dairy industry and their introduction
in select European countries. Vaccines grew $1.1 million, or 10%, for the three months ended June 30, 2015, principally from volume
growth, including sales of MJ Biologics, Inc. ("MJB") products. MFAs and other declined $3.0 million, or 3%, primarily
due to lower volumes in international markets.
Net sales of $55.6 million increased
$0.7 million, or 1%, for the three months ended June 30, 2015. Increased volumes were partially offset by lower average selling
prices, primarily due to lower underlying raw material commodity prices.
Performance Products
Net sales of $11.9 million decreased
$2.8 million, or 19%, for the three months ended June 30, 2015, due to lower volumes and reduced average selling prices of copper-based
products and lower volumes of personal care products.
Gross profit of $60.8 million
increased $6.6 million, or 12%, to 32.9% of net sales, for the three months ended June 30, 2015. Animal Health gross profit increased
$7.7 million, due to volume growth, favorable product mix and reduced manufacturing costs from favorable currency movements. Within
Animal Health, MFAs and other increased $3.7 million, nutritional specialty products increased $2.9 million and vaccines increased
$1.1 million. Mineral Nutrition gross profit increased $0.1 million as higher volumes and lower product costs were offset by lower
average selling prices. Performance Products gross profit decreased $1.4 million due to lower volumes, higher product costs and
lower average selling prices.
Selling, general and administrative expenses
Selling, general and administrative
("SG&A") expenses of $39.9 million decreased $1.3 million, or 3%, for the three months ended June 30, 2015. In
2014 we recognized a $5.4 million loss on an insurance claim previously recorded as an asset. Excluding this amount, SG&A expenses
increased $4.0 million, or 11%. Animal Health accounted for $4.1 million of the increase, driven by increased selling headcount
and related marketing costs to support MFA and vaccine initiatives and the expansion of our products to the dairy industry and
by development spending focused on product lifecycle extensions. Animal Health SG&A also increased due to $0.4 million of acquisition-related
accrued compensation related to the MJB transactions.
Adjusted EBITDA of $27.0 million
increased $2.8 million, or 12%, for the three months ended June 30, 2015. Animal Health adjusted EBITDA increased $3.7 million,
or 14%, due to sales growth and increased gross profit, partially offset by increased SG&A expenses. Mineral Nutrition decreased
$0.1 million, or 2%, due to increased SG&A. Performance Products decreased $1.1 million due to lower sales volumes. Corporate
expenses decreased $0.2 million.
Interest expense, net
Interest expense, net, of $3.7
million decreased $3.1 million for the three months ended June 30, 2015, due to the net result of our April 2014 initial public
offering ("IPO") and refinancing. Current period interest expense included $0.4 million of acquisition-related accrued
interest in connection with the MJB transactions.
Foreign currency (gains) losses, net
Foreign currency (gains) losses,
net for the three months ended June 30, 2015, amounted to net losses of $1.5 million, as compared to $0.3 million in net gains
for the three months ended June 30, 2014. Foreign currency losses in the current period were primarily due to the movement of Brazil
and EU currencies relative to the U.S. dollar. Foreign currency gains and losses primarily arise from intercompany balances.
Provision for income taxes
Income tax expense was $5.4
million for the quarter ended June 30, 2015, compared with $1.5 million last year. Our consolidated tax provisions are primarily
comprised of income taxes relating to profitable foreign jurisdictions. The effective tax rate was 34.2% for the current period.
For the quarters ended June 30, 2015 and 2014, we generated domestic taxable losses
and, because we maintain a full valuation allowance
against domestic net deferred tax assets, the provision for income taxes did not include a benefit related to the domestic taxable
losses. We paid $1.6 million of cash income taxes in the quarter ended June 30, 2015, compared with $7.3 million for the same quarter
last year. Last year's payments included $3.2 million related to foreign withholding taxes incurred in connection with the
repatriation of certain foreign earnings.
Adjusted diluted EPS
Adjusted diluted EPS was $0.44
for the quarter, compared with $0.22 last year on a pro forma adjusted basis. Increased adjusted EBITDA contributed approximately
$0.07 of the EPS growth and favorable timing of income tax payments accounted for approximately $0.14 of the EPS growth. The pro
forma adjustments to last year reflect the effects of our IPO and refinancing. The pro forma adjustments assume the additional
common shares and the refinancing occurred at the beginning of the period.
Net sales of $748.6 million increased
$56.7 million, or 8%, for the year ended June 30, 2015, as compared to the year ended June 30, 2014, due to growth in Animal Health
and Mineral Nutrition of $39.7 million and $25.5 million, respectively, offset by declines in Performance Products of $8.6 million.
The consolidated statement of
operations for the year ended June 30, 2015 included $8.0 million of revenue and gross profit related to milestone payments under
a license agreement with a global animal health company to share in the use of our proprietary vaccine delivery technology. We
recognized the revenue and profit during the period because certain contractual and regulatory milestones were achieved by the
licensee, and we had no remaining performance obligations under the agreement. Excluding the $8.0 million in vaccine licensing
milestone revenue, net sales growth was $48.7 million, or 7%.
Net sales of $470.8 million grew
$39.7 million, or 9%, for the year ended June 30, 2015, primarily due to volume growth across all product groups. Excluding the
$8.0 million in vaccine licensing milestone revenue, net sales growth was $31.7 million, or 7%. MFAs and other grew $9.2 million,
or 3%, primarily due to volume growth in international markets. Nutritional specialty products grew $18.6 million, or 30%, for
the year ended June 30, 2015, primarily due to U.S. volume growth of our products for the dairy industry and their introduction
in select European countries. Excluding the effect of the $8.0 million in vaccine licensing milestone revenue, vaccines grew $3.9
million, or 10%, for the year ended June 30, 2015, principally from volume growth, including sales of MJB products from the January
2015 date of our Collaboration and Distribution Agreement with MJB, which was entered into as part of the MJB transactions.
Net sales of $227.1 million increased
$25.5 million, or 13%, for the year ended June 30, 2015. Increased volumes accounted for approximately three quarters of the sales
growth, as current market conditions improved demand for certain trace mineral products. The remainder of the sales increase was
due to increased average selling prices primarily due to higher underlying raw material commodity prices.
Performance Products
Net sales of $50.7 million decreased
$8.6 million, or 14%, for the year ended June 30, 2015, due to lower volumes and average selling prices of copper-based products
and lower volumes of personal care products.
Gross profit of $236.4 million
increased $28.6 million, or 14%, to 31.6% of net sales, for the year ended June 30, 2015, with most of the improvement coming from