Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Jun. 30, 2021 | Aug. 23, 2021 | Dec. 31, 2020 | |
Document Information [Line Items] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Period End Date | Jun. 30, 2021 | ||
Entity File Number | 001-36410 | ||
Entity Registrant Name | PHIBRO ANIMAL HEALTH CORP | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 13-1840497 | ||
Entity Address, Address Line One | Glenpointe Centre East, 3rd Floor | ||
Entity Address, Address Line Two | 300 Frank W. Burr Boulevard, Suite 21 | ||
Entity Address, City or Town | Teaneck | ||
Entity Address, State or Province | NJ | ||
Entity Address, Postal Zip Code | 07666-6712 | ||
City Area Code | 201 | ||
Local Phone Number | 329-7300 | ||
Title of 12(b) Security | Class A Common Stock, $0.0001 par value per share | ||
Trading Symbol | PAHC | ||
Security Exchange Name | NASDAQ | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Small Business | false | ||
Entity Interactive Data Current | Yes | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Current Fiscal Year End Date | --06-30 | ||
Document Fiscal Year Focus | 2021 | ||
Document Fiscal Period Focus | FY | ||
Entity Central Index Key | 0001069899 | ||
Amendment Flag | false | ||
Entity Public Float | $ 392,829,585 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Common stock-Class A | |||
Document Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 20,337,574 | ||
Common stock-Class B | |||
Document Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 20,166,034 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
CONSOLIDATED STATEMENTS OF OPERATIONS | |||
Net sales | $ 833,350 | $ 800,354 | $ 827,995 |
Cost of goods sold | 561,973 | 543,472 | 563,371 |
Gross profit | 271,377 | 256,882 | 264,624 |
Selling, general and administrative expenses | 196,509 | 187,688 | 181,398 |
Operating income | 74,868 | 69,194 | 83,226 |
Interest expense, net | 12,880 | 12,856 | 11,776 |
Foreign currency (gains) losses, net | (4,480) | 826 | (55) |
Income before income taxes | 66,468 | 55,512 | 71,505 |
Provision for income taxes | 12,083 | 21,960 | 16,792 |
Net income | $ 54,385 | $ 33,552 | $ 54,713 |
Net income per share | |||
basic (in dollars per share) | $ 1.34 | $ 0.83 | $ 1.35 |
diluted (in dollars per share) | $ 1.34 | $ 0.83 | $ 1.35 |
Weighted average common shares outstanding | |||
basic (in shares) | 40,473 | 40,454 | 40,412 |
diluted (in shares) | 40,504 | 40,504 | 40,523 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | |||
Net income | $ 54,385 | $ 33,552 | $ 54,713 |
Change in fair value of derivative instruments | 12,658 | (12,854) | (5,580) |
Foreign currency translation adjustment | 3,643 | (32,513) | (4,127) |
Unrecognized net pension gains (losses) | 2,598 | (2,521) | (1,837) |
(Provision) benefit for income taxes | (3,807) | 3,684 | 1,846 |
Other comprehensive income (loss) | 15,092 | (44,204) | (9,698) |
Comprehensive income (loss) | $ 69,477 | $ (10,652) | $ 45,015 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2021 | Jun. 30, 2020 |
ASSETS | ||
Cash and cash equivalents | $ 50,212 | $ 36,343 |
Short-term investments | 43,000 | 55,000 |
Accounts receivable, net | 146,852 | 126,522 |
Inventories, net | 216,312 | 196,659 |
Other current assets | 42,533 | 37,313 |
Total current assets | 498,909 | 451,837 |
Property, plant and equipment, net | 154,706 | 148,109 |
Intangibles, net | 62,282 | 70,997 |
Goodwill | 52,679 | 52,679 |
Other assets | 72,749 | 60,478 |
Total assets | 841,325 | 784,100 |
LIABILITIES AND STOCKHOLDERS' EQUITY | ||
Current portion of long-term debt | 9,375 | 18,750 |
Accounts payable | 68,362 | 66,091 |
Accrued expenses and other current liabilities | 86,379 | 72,397 |
Total current liabilities | 164,116 | 157,238 |
Revolving credit facility | 95,000 | 169,000 |
Long-term debt | 287,710 | 199,257 |
Other liabilities | 55,970 | 70,401 |
Total liabilities | 602,796 | 595,896 |
Commitments and contingencies (Note 13) | ||
Common stock, par value $0.0001 per share; 300,000,000 Class A shares authorized, 20,337,574 shares issued and outstanding at June 30, 2021 and 20,287,574 shares issued and outstanding at June 30, 2020; 30,000,000 Class B shares authorized, 20,166,034 shares issued and outstanding at June 30, 2021 and 2020 | 4 | 4 |
Paid-in capital | 135,803 | 135,525 |
Retained earnings | 218,015 | 183,060 |
Accumulated other comprehensive loss | (115,293) | (130,385) |
Total stockholders' equity | 238,529 | 188,204 |
Total liabilities and stockholders' equity | $ 841,325 | $ 784,100 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parentheticals) - $ / shares | Jun. 30, 2021 | Jun. 30, 2020 |
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 16,000,000 | 16,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock-Class A | ||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 300,000,000 | 300,000,000 |
Common stock, shares issued | 20,337,574 | 20,287,574 |
Common stock, shares outstanding | 20,337,574 | 20,287,574 |
Common stock-Class B | ||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 30,000,000 | 30,000,000 |
Common stock, shares issued | 20,166,034 | 20,166,034 |
Common stock, shares outstanding | 20,166,034 | 20,166,034 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
OPERATING ACTIVITIES | |||
Net income | $ 54,385 | $ 33,552 | $ 54,713 |
Adjustments to reconcile net income to net cash provided (used) by operating activities: | |||
Depreciation and amortization | 31,885 | 32,341 | 27,564 |
Amortization of debt issuance costs | 833 | 882 | 882 |
Stock-based compensation | 1,129 | 2,259 | 2,259 |
Acquisition-related items | (2,433) | ||
Deferred income taxes | (2,183) | 8,125 | (105) |
Foreign currency (gains), net | (9,718) | (2,540) | (1,899) |
Other | 1,844 | 818 | (302) |
Changes in operating assets and liabilities, net of business acquisitions: | |||
Accounts receivable, net | (18,209) | 28,713 | (23,679) |
Inventories, net | (12,498) | (12,930) | (20,982) |
Other current assets | (1,631) | (11,137) | (7,173) |
Other assets | (1,898) | (2,121) | (299) |
Accounts payable | 3,176 | (7,672) | 12,092 |
Accrued expenses and other liabilities | 1,191 | (8,509) | 4,098 |
Net cash provided by operating activities | 48,306 | 59,348 | 47,169 |
INVESTING ACTIVITIES | |||
Purchases of short-term investments | (74,000) | (80,000) | (34,000) |
Maturities of short-term investments | 86,000 | 49,000 | 60,000 |
Capital expenditures | (29,320) | (34,045) | (29,891) |
Business acquisitions | (54,549) | (9,838) | |
Other, net | (1,260) | (796) | (404) |
Net cash used by investing activities | (18,580) | (120,390) | (14,133) |
FINANCING ACTIVITIES | |||
Revolving credit facility borrowings | 317,500 | 243,000 | 213,000 |
Revolving credit facility repayments | (391,500) | (170,000) | (187,000) |
Proceeds from long-term debt | 300,000 | ||
Payments of long-term debt and other | (220,625) | (12,646) | (12,649) |
Issuance of acquisition note payable | 3,775 | ||
Payment of acquisition note payable | (3,775) | ||
Debt issuance costs | (2,940) | ||
Proceeds from common stock issued | 1,134 | ||
Dividends paid | (19,430) | (19,418) | (18,592) |
Net cash provided (used) by financing activities | (16,995) | 40,936 | (4,107) |
Effect of exchange rate changes on cash | 1,138 | (1,124) | (524) |
Net increase (decrease) in cash and cash equivalents | 13,869 | (21,230) | 28,405 |
Cash and cash equivalents at beginning of period | 36,343 | 57,573 | 29,168 |
Cash and cash equivalents at end of period | 50,212 | 36,343 | 57,573 |
Supplemental cash flow information | |||
Interest paid, net | 10,808 | 11,577 | 12,250 |
Income taxes paid, net | 19,395 | 20,866 | 16,215 |
Non-cash investing and financing activities | |||
Property, plant and equipment and capital lease additions | $ 2,957 | $ 4,353 | $ 2,890 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Common Stock | Paid-in Capital | Retained EarningsAdoption of revenue standard | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Adoption of revenue standard | Total |
Balance at Jun. 30, 2018 | $ 4 | $ 129,873 | $ 131,560 | $ (76,483) | $ 184,954 | ||
Balance (in shares) at Jun. 30, 2018 | 40,357,708 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Comprehensive income (loss) | 54,713 | (9,698) | 45,015 | ||||
Exercise of stock options | 1,134 | 1,134 | |||||
Exercise of stock options (in shares) | 95,900 | ||||||
Dividends declared | (18,592) | (18,592) | |||||
Stock-based compensation expense | 2,259 | 2,259 | |||||
Balance at Jun. 30, 2019 | $ 4 | 133,266 | $ 1,245 | 168,926 | (86,181) | $ 1,245 | 216,015 |
Balance (in shares) at Jun. 30, 2019 | 40,453,608 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Comprehensive income (loss) | 33,552 | (44,204) | (10,652) | ||||
Dividends declared | (19,418) | (19,418) | |||||
Stock-based compensation expense | 2,259 | 2,259 | |||||
Balance at Jun. 30, 2020 | $ 4 | 135,525 | 183,060 | (130,385) | 188,204 | ||
Balance (in shares) at Jun. 30, 2020 | 40,453,608 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Comprehensive income (loss) | 54,385 | 15,092 | 69,477 | ||||
Shares issued pursuant to stock incentive plan (in shares) | 50,000 | ||||||
Dividends declared | (19,430) | (19,430) | |||||
Stock-based compensation expense | 1,129 | 1,129 | |||||
Other | (851) | (851) | |||||
Balance at Jun. 30, 2021 | $ 4 | $ 135,803 | $ 218,015 | $ (115,293) | $ 238,529 | ||
Balance (in shares) at Jun. 30, 2021 | 40,503,608 |
CONSOLIDATED STATEMENTS OF CH_2
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Parentheticals) - $ / shares | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY | |||
Dividends declared per share | $ 0.48 | $ 0.48 | $ 0.46 |
Description of Business
Description of Business | 12 Months Ended |
Jun. 30, 2021 | |
Description of Business | |
Description of Business | 1. Description of Business Phibro Animal Health Corporation (“Phibro” or “PAHC”) and its subsidiaries (together, the “Company”) is a diversified global developer, manufacturer and marketer of a broad range of animal health and mineral nutrition products for food animals including poultry, swine, dairy and beef cattle and aquaculture. The Company is also a manufacturer and marketer of performance products for use in the personal care, industrial chemical and chemical catalyst industries. Unless otherwise indicated or the context requires otherwise, references in this report to “we,” “our,” “us,” and similar expressions refer to Phibro and its subsidiaries. |
Summary of Significant Accounti
Summary of Significant Accounting Policies and New Accounting | 12 Months Ended |
Jun. 30, 2021 | |
Summary of Significant Accounting Policies and New Accounting Standards | |
Summary of Significant Accounting Policies and New Accounting Standards | 2. Summary of Significant Accounting Policies and New Accounting Standards Principles of Consolidation and Basis of Presentation The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and include the accounts of Phibro and its consolidated subsidiaries. Intercompany balances and transactions have been eliminated from the consolidated financial statements. The decision whether or not to consolidate an entity requires consideration of majority voting interests, as well as effective control over the entity. We present our financial statements on the basis of our fiscal year ending June 30. All references to years in these consolidated financial statements refer to the fiscal year ending or ended on June 30 of that year. Risks and Uncertainties The full extent to which the COVID-19 pandemic will directly or indirectly impact our business, results of operations and financial condition will depend on future developments that are uncertain. Although vaccines are now available, distribution efforts vary widely state-by-state and country-by-country. New information may continue to emerge concerning COVID-19, and the actions required to contain or treat it may affect the duration and severity of the pandemic. The pandemic may have significant economic impacts on customers, suppliers and markets. The pandemic may affect our future revenues, expenses, reserves and allowances, manufacturing operations and employee-related costs. Our financial statements include estimates of the effects of COVID-19 and there may be changes to those estimates in future periods. The issue of the potential for increased bacterial resistance to certain antibiotics used in certain food-producing animals is the subject of discussions on a worldwide basis and, in certain instances, has led to government restrictions on or banning of the use of antibiotics in food-producing animals. The sale of antibiotics and antibacterials is a material portion of our business. Should product bans or restrictions, public perception, competition or other developments result in restrictions on the sale of such products, it could have a material adverse effect on our financial position, results of operations and cash flows. An outbreak of disease carried by food animals, which could lead to the widespread death or precautionary destruction of food animals as well as reduced consumption and demand for animal protein, could adversely affect demand for our products. Such occurrences could have a material adverse effect on our financial condition, results of operations and cash flows. 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. We have significant assets in Israel, Brazil and other locations outside of the United States and a significant portion of our sales and earnings are attributable to operations conducted abroad. Our assets, results of operations and future prospects are subject to currency exchange fluctuations and restrictions, energy shortages, other economic developments, political or social instability in some countries, and uncertainty of, and governmental control over, commercial rights, which could result in a material adverse effect on our financial position, results of operations and cash flows. We are subject to environmental laws and regulations governing the use, storage, handling, generation, treatment, emission, release, discharge and disposal of certain materials and wastes, the remediation of contaminated soil and groundwater, the manufacture, sale and use of regulated materials, including pesticides, and the health and safety of employees. As such, the nature of our current and former operations and those of our subsidiaries expose Phibro and our subsidiaries to the risk of claims with respect to such matters. Use of Estimates The Company’s consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (GAAP). Preparation of these financial statements requires management to make certain estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses and related disclosures. Actual results could differ from these estimates. Estimates are used when accounting for the valuation of intangible assets, depreciation and amortization periods of long-lived and intangible assets, recoverability of long-lived and intangible assets and goodwill, realizability of deferred income tax assets, sales discounts, rebates, allowances and incentives, contingencies, employee compensation and actuarial assumptions related to our pension plans. We regularly evaluate our estimates and assumptions using historical experience and other factors. Our estimates are based on complex judgments, probabilities and assumptions that we believe to be reasonable. Revenue Recognition We recognize revenue from product sales when control of the products has transferred to the customer, typically when title and risk of loss transfer to the customer. Certain of our businesses have terms where control of the underlying product transfers to the customer on shipment, while others have terms where control transfers to the customer on delivery. Revenue reflects the total consideration to which we expect to be entitled in exchange for delivery of products or services, net of variable consideration. Variable consideration includes customer programs and incentive offerings, including pricing arrangements, rebates and other volume-based incentives. We record reductions to revenue for estimated variable consideration at the time we record the sale. Our estimates for variable consideration reflect the amount by which we expect variable consideration to effect the revenue recognized. Such estimates are generally based on contractual terms and historical experience, and are adjusted to reflect future expectations as new information becomes available. Historically, we have not had significant adjustments to our estimates of variable compensation. 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. The associated costs are considered fulfillment activities and are included in costs of goods sold in the consolidated statements of operations when the related revenue is recognized. Net sales exclude value-added and other taxes based on sales. Cash and Cash Equivalents Cash equivalents include highly liquid investments with maturities of three months or less when purchased. Cash and cash equivalents held at financial institutions may at times exceed insured amounts. We believe we mitigate such risk by investing in or through major financial institutions. Short-term Investments Short-term investments include highly liquid investments with maturities greater than three months and less than one year at the time of purchase. We classify these investments as held to maturity and we record the related interest income as earned. We determine the appropriate balance sheet classification at the time of purchase and at each balance sheet date. Investments held at financial institutions may at times exceed insured amounts. We believe we mitigate such risk by investing in or through major financial institutions. Accounts Receivable and Allowance for Doubtful Accounts Trade accounts receivable are recorded at the invoiced amount and do not bear interest. We grant credit terms in the normal course of business and generally do not require collateral or other security to support credit sales. Our ten largest customers represented, in aggregate, approximately The allowance for doubtful accounts is our best estimate of the credit losses in existing accounts receivable. We monitor the financial performance and creditworthiness of our customers so that we can properly assess and respond to changes in their credit profile. We also monitor domestic and international economic conditions for the potential effect on our customers. Past due balances are reviewed individually for collectability. Account balances are charged against the allowance when we determine it is probable the receivable will not be recovered. Inventories Inventories are valued at the lower of cost or net realizable value. Cost is determined principally under weighted average and standard cost methods, which approximate first-in, first-out (FIFO) cost. Obsolete and unsalable inventories, if any, are reflected at estimated net realizable value. Inventory costs include materials, direct labor and manufacturing overhead. Property, Plant and Equipment Property, plant and equipment are stated at cost. Depreciation is charged to results of operations using the straight-line method two three for machinery and equipment. We capitalize costs that extend the useful life or productive capacity of an asset. Repair and maintenance costs are expensed as incurred. In the case of disposals, the assets and related accumulated depreciation are removed from the accounts, and the net amounts, less proceeds from disposal, are included in the consolidated statements of operations. Leases We determine at the inception of an arrangement whether the arrangement contains a lease. If an arrangement contains a lease, we assess the lease term when the underlying asset is available for use (“lease commencement”). Individual lease terms reflect the non-cancellable period of the lease, reasonably certain renewal periods and consideration of termination options. We determine the lease classification as either operating or financing at lease commencement, which governs the pattern of expense recognition and presentation in our consolidated financial statements. Our current lease portfolio only includes operating leases. We recognize a right-of-use (“ROU”) asset and a corresponding lease liability at lease commencement for leases with terms exceeding twelve months. Short-term leases with terms of twelve months or less are not recognized on the consolidated balance sheet and lease payments are recognized on a straight-line basis over the term. The values of the ROU assets and lease liabilities are calculated based on the present value of the fixed payment obligations over the lease term, using our incremental borrowing rate (“IBR”), determined at lease commencement. The IBR reflects the rate of interest we would expect to pay on a secured basis to borrow an amount equal to the lease payments under similar terms. The IBR incorporates the term and economic environment of the respective lease arrangements. We have elected to account for lease and non-lease components together as a single lease component and include fixed payment obligations related to such non-lease components in the measurement of ROU assets and lease liabilities. Fixed lease payments are recognized on a straight-line basis over the lease term. Variable lease payments can include index-based lease payments, real estate taxes, maintenance costs, utilization charges and other non-lease services paid to lessors and are not determinable at lease commencement. Variable lease payments are not included in the measurement of ROU assets and lease liabilities and are recognized in the period incurred. Capitalized Software Costs We capitalize costs to obtain, develop and implement software for internal use. Amounts paid to third parties and costs of internal employees who are directly associated with the software project are also capitalized, depending on the stage of development. We expense software costs that do not meet the capitalization criteria. Capitalized software costs are included in property, plant and equipment on the consolidated balance sheets and are amortized on a straight-line three Debt Issuance Costs Costs and original issue discounts or premiums related to issuance or modification of our debt are deferred on the consolidated balance sheet and amortized over the lives of the respective debt instruments. Amortization of debt issuance costs is included in interest expense in the consolidated statements 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. 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. We typically utilize third-party valuation specialists to assist us in determining fair values of significant tangible and intangible assets and contingent consideration. 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. Significant estimates and assumptions inherent in the valuations reflect consideration of other marketplace participants and include the amount and timing of future cash flows, specifically the expected revenue growth rate applied to the cash flows. Unanticipated market or macroeconomic events and circumstances could affect the accuracy or validity of the estimates and assumptions. 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. Intangible assets associated with acquired in-process research and development activities (“IPR&D”) are not amortized until a product is available for sale and regulatory approval is obtained. Long-Lived Assets and Goodwill We periodically review our long-lived and amortizable intangible assets for impairment and assess whether significant events or changes in business circumstances indicate that the carrying value of the assets may not be recoverable. Such circumstances may include a significant decrease in the market price of an asset, a significant adverse change in the manner in which the asset is being used or in its physical condition or a history of operating or cash flow losses associated with the use of an asset. We recognize an impairment loss when the carrying amount of an asset exceeds the anticipated future undiscounted cash flows expected to result from the use of the asset and its eventual disposition. The amount of the impairment loss is the excess of the asset’s carrying value over its fair value. 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. We periodically review our indefinite-lived intangible assets associated with acquired IPR&D for impairment and assess whether significant events or changes in business circumstances indicate that the carrying value of the assets may not be recoverable. We recognize an impairment loss when the carrying amount of an asset exceeds the anticipated future discounted cash flows expected to result from the use of the asset and its eventual disposition. The amount of the impairment loss is the excess of the asset’s carrying value over its fair value. We assess IPR&D for impairment annually during our fourth quarter, or more frequently if impairment indicators exist. 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 our fourth quarter, or more frequently if impairment indicators exist. Impairment exists when the carrying amount of goodwill exceeds its implied fair value. 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, 2021, we tested goodwill using a qualitative approach and determined goodwill was not impaired. We have not recorded any goodwill impairment charges in the periods included in the consolidated financial statements. Foreign Currency Translation We generally use local currency as the functional currency to measure the financial position and results of operations of each of our international subsidiaries. We translate assets and liabilities of these operations at the exchange rates in effect at the balance sheet date. We translate income statement accounts at the average rates of exchange prevailing during the period. Translation adjustments that arise from the use of differing exchange rates from period to period are included as a component of accumulated other comprehensive income (loss) in stockholders’ equity.Certain of our Israeli operations have designated the U.S. dollar as their functional currency. Gains and losses arising from re-measurement of local currency accounts into U.S. dollars are included in determining net income. Comprehensive Income Comprehensive income consists of net income and the changes in: (i) the fair value of derivative instruments that qualify for hedge accounting; (ii) foreign currency translation adjustments; (iii) unrecognized net pension gains (losses); and (iv) the related (provision) benefit for income taxes. Derivative Financial Instruments We record all derivative financial instruments on the consolidated balance sheets at fair value. Changes in the fair value of derivatives are recorded in results of operations or other comprehensive income (loss), depending on whether a derivative is designated and effective as part of a hedge transaction and, if so, the type of hedge transaction. Gains and losses on derivative instruments designated and effective as part of a hedge transaction are included in the results of operations in the periods in which operations are affected by the underlying hedged item. From time to time, we use certain derivative instruments to mitigate the risk associated with certain economic factors, such as exchange rates and interest rates, which may potentially affect our future cash flows. As of June 30, 2021, we used (i) foreign currency option contracts to mitigate certain exposures related to changes in foreign currency exchange rates on forecasted inventory purchases, and (ii) interest rate swaps on $300,000 of notional principal to manage future cash flow exposure resulting from variable interest rates on that amount of debt. To qualify a derivative as a hedge, we document the nature and relationships between hedging instruments and hedged items, the prospective effectiveness of the hedging instrument as well as the ultimate effectiveness, the risk-management objectives, the strategies for undertaking the various hedge transactions and the methods of assessing hedge effectiveness. We do not engage in trading or other speculative uses of financial instruments. Environmental Liabilities Expenditures for ongoing compliance with environmental regulations are expensed or capitalized as appropriate. We capitalize expenditures made to extend the useful life or productive capacity of an asset, including expenditures that prevent future environmental contamination. Other expenditures are expensed as incurred and are recorded in selling, general and administrative expenses in the consolidated statements of operations. We record the expense and related liability in the period an environmental assessment indicates remedial efforts are probable and the costs can be reasonably estimated. Estimates of the liability are based upon currently available facts, existing technology and presently enacted laws and regulations taking into consideration the likely effects of inflation and other societal and economic factors. All available evidence is considered, including prior experience in remediation of contaminated sites, other companies’ experiences and data released by the U.S. Environmental Protection Agency and other organizations. The estimated liabilities are not discounted. We record anticipated recoveries under existing insurance contracts if probable. Income Taxes The provision for income taxes includes U.S. federal, state, and foreign income taxes and foreign withholding taxes. Our annual effective income tax rate is determined based on our income, statutory tax rates and tax planning opportunities available in the various jurisdictions in which we operate and the tax effects of items treated differently for tax purposes than for financial reporting purposes. Tax law requires certain items be included in the tax return at different times than the items are reflected in the financial statements. Some of these differences are permanent, such as expenses that are not deductible in our tax return, and some differences are temporary, reversing over time, such as depreciation expense. These temporary differences give rise to deferred tax assets and liabilities. Deferred tax assets generally represent the tax effect of items that can be used as a tax deduction or credit in future years for which we have already recorded the tax benefit in our income statement. Deferred tax liabilities generally represent the tax effect of items recorded as tax expense in our income statement for which payment has been deferred, the tax effect of expenditures for which a deduction has already been taken in our tax return but has not yet been recognized in our income statement, and the tax effect of assets recorded at fair value in business combinations for which there was no corresponding tax basis adjustment. The recognition and measurement of a tax position is based on management’s best judgment given the facts, circumstances and information available at the reporting date. Inherent in determining our annual effective income tax rate are judgments regarding business plans, planning opportunities and expectations about future outcomes. Realization of certain deferred tax assets, primarily net operating loss carryforwards, is dependent upon generating sufficient future taxable income in the appropriate jurisdiction prior to the expiration of the carryforward periods. We establish valuation allowances for deferred tax assets when the amount of expected future taxable income is not likely to support the use of the deduction or credit. We may take tax positions that management believes are supportable, but are potentially subject to successful challenge by the applicable taxing authority in the jurisdictions where we operate. 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. Because there are a number of estimates and assumptions inherent in calculating the various components of our income tax provision, future events such as changes in tax legislation, the geographic mix of earnings, completion of tax audits or earnings repatriation plans could have an effect on those estimates and our effective income tax rate. Advertising Advertising and marketing costs are expensed as incurred and are reflected in selling, general and administrative expenses. Research and Development Expenditures Research and development expenditures are expensed as incurred and are recorded in selling, general and administrative expenses in the consolidated statements of operations. Most of our manufacturing facilities have scientists and technicians on staff involved in product development, quality assurance and providing technical services to customers. Research, development and technical service efforts are conducted at various facilities. Our animal health research and development activities relate to: fermentation development and microbiological strain improvement; vaccine development; chemical synthesis and formulation development; nutritional specialties development; and ethanol-related products. Stock-Based Compensation We recognize expense for stock-based compensation to employees, including grants of stock options and restricted stock units, over the requisite service period based on the grant date fair value of the awards. We determine the fair value of stock options and restricted stock units using the Black-Scholes option-pricing model and the Monte Carlo simulation model, respectively. Each model uses historical and current market data to estimate the fair value. The models incorporate various assumptions such as the risk-free interest rate, expected volatility, expected dividend yield and expected life of the awards. Net Income per Share and Weighted Average Shares Basic net income per share is calculated by dividing net income by the weighted average number of common shares outstanding during the reporting period. Diluted net income per share is calculated by dividing net income by the weighted average number of common shares outstanding during the reporting period after giving effect to potential dilutive common shares resulting from the assumed exercise of stock options and vesting of restricted stock units. All common share equivalents were included in the calculation of diluted net income per share in the periods included in the consolidated financial statements. For the Year Ended June 30 2021 2020 2019 Net income $ 54,385 $ 33,552 $ 54,713 Weighted average number of shares – basic 40,473 40,454 40,412 Dilutive effect of stock options and restricted stock units 31 50 111 Weighted average number of shares – diluted 40,504 40,504 40,523 Net income per share basic $ 1.34 $ 0.83 $ 1.35 diluted $ 1.34 $ 0.83 $ 1.35 New Accounting Standards Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) 2020-04 and 2021-01, Reference Rate Reform (Topic 848) ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes ASU 2018-14, Compensation — Retirement Benefits — Defined Benefit Plans — General (Topic 715-20): Disclosure Framework — Changes to the Disclosure Requirements for Defined Benefit Plans |
Acquisition
Acquisition | 12 Months Ended |
Jun. 30, 2021 | |
Acquisition | |
Acquisition | 3. Acquisition In August 2019, we acquired the business and assets of Osprey Biotechnics, Inc. (“Osprey”). Osprey is a developer, manufacturer and marketer of microbial products and bioproducts for a variety of applications, serving customers in the animal health and nutrition, environmental, industrial and plant protection industries. We acquired Osprey to gain access to Osprey’s microbial technology and developed products and expand our customer relationships. The business is included in the Animal Health segment. We acquired assets used in Osprey’s business, including intellectual property, working capital and property, plant and equipment, for an aggregate cash payment of $54,549. The acquisition agreement included contingent consideration, with the payment amount to be determined based on Osprey’s financial performance for the year ending June 30, 2021. The payment will be no less than $4,840 and has no maximum limit. Total consideration of $62,102 included a $7,553 liability for the estimated contingent consideration, based on the expected financial performance of the Osprey business. During the three months ended June 30, 2020, we updated our expectations of the future financial performance of the business and adjusted the contingent consideration amount to the minimum value of $4,840. The adjustment of $2,988 was recorded as a reduction to selling, general and administrative expenses. In connection with the Osprey acquisition, we incurred acquisition-related transaction costs of $462 and $213 during the years ended June 30, 2020 and 2019, respectively; the costs are included in selling, general and administrative expenses. We accounted for the acquisition as a business combination in accordance with FASB Accounting Standards Codification No. 805, Business Combinations. Working capital, net $ 2,366 Property, plant and equipment 2,005 Definite-lived intangible assets 32,400 Goodwill 25,331 Net assets acquired $ 62,102 Definite-lived intangible assets include $18,900 for customer relationships, $12,200 for developed products and $1,300 for tradename. The definite-lived intangible assets will be amortized over periods ranging from 5 – 12 years . Goodwill represents the expected future benefits from the combination of Osprey’s business with Phibro. The amount of goodwill expected to be deductible for tax purposes is $25,331. |
Statements of Operations-Additi
Statements of Operations-Additional Information | 12 Months Ended |
Jun. 30, 2021 | |
Statements of Operations-Additional Information | |
Statements of Operations-Additional Information | 4. Statements of Operations—Additional Information Disaggregated revenue, deferred revenue and customer payment terms We develop, manufacture and market a broad range of products for food animals including poultry, swine, beef and dairy cattle and aquaculture. The products help prevent, control and treat diseases, enhance nutrition to help improve health and contribute to balanced mineral nutrition. The animal health and mineral nutrition products are sold directly to integrated poultry, swine and cattle integrators and through commercial animal feed manufacturers, wholesalers and distributors. The animal health industry and demand for many of the animal health products in a particular region are affected by changing disease pressures and by weather conditions, as product usage follows varying weather patterns and seasons. Our operations are primarily focused in regions where the majority of livestock production is consolidated in large commercial farms. We have a diversified portfolio of products that are classified within our three business segments — Animal Health, Mineral Nutrition and Performance Products. Each segment has its own dedicated management and sales team. Animal Health The Animal Health business develops, manufactures and markets products in three main categories: ● MFAs and Other: MFAs and other products primarily consist of concentrated medicated products that are administered through animal feeds, commonly referred to as Medicated Feed Additives (“MFAs”). Specific product classifications include antibacterials, which inhibit the growth of pathogenic bacteria that cause bacterial infections in animals; anticoccidials, which inhibit the growth of coccidia (parasites) that damage the intestinal tract of animals; and other related products. ● Nutritional Specialties: Nutritional specialty products enhance nutrition to help improve health and performance in areas such as immune system function and digestive health. We are also a developer, manufacturer and marketer of microbial products and bioproducts for a variety of applications serving animal health and nutrition, environmental, industrial and agricultural customers. ● Vaccines: Our vaccines are primarily focused on preventing diseases in poultry and swine. They protect animals from either viral or bacterial disease challenges. We develop, manufacture and market conventionally licensed and autogenous vaccine products and produce and market adjuvants to vaccine manufacturers. We have developed and market an innovative and proprietary delivery platform for vaccines. Mineral Nutrition The Mineral Nutrition business is comprised of formulations and concentrations of trace minerals such as zinc, manganese, copper, iron and other compounds, with a focus on customers in North America. Our customers use these products to fortify the daily feed requirements of their livestock’s diets and maintain an optimal balance of trace elements in each animal. We manufacture and market a broad range of mineral nutrition products for food animals including poultry, swine and beef and dairy cattle. Performance Products The Performance Products business manufactures and markets specialty ingredients for use in the personal care, industrial chemical and chemical catalyst industries, predominantly in the United States. The following tables present our revenues disaggregated by major product category and geographic region: Net Sales by Product Type For the Year Ended June 30 2021 2020 2019 Animal Health MFAs and other $ 330,017 $ 322,300 $ 350,468 Nutritional specialties 142,760 129,264 113,215 Vaccines 72,939 75,340 68,291 Total Animal Health $ 545,716 $ 526,904 $ 531,974 Mineral Nutrition 220,560 214,412 233,782 Performance Products 67,074 59,038 62,239 Total $ 833,350 $ 800,354 $ 827,995 Net Sales by Region For the Year Ended June 30 2021 2020 2019 United States $ 494,889 $ 471,938 $ 480,101 Latin America and Canada 166,325 158,939 152,380 Europe, Middle East and Africa 114,131 112,179 105,365 Asia Pacific 58,005 57,298 90,149 Total $ 833,350 $ 800,354 $ 827,995 Net sales by region are based on country of destination. Deferred revenue was $3,674 and $4,570 as of June 30, 2021 and June 30, 2020, respectively. Accrued expenses and other current liabilities included $1,560 and $1,109 of the total deferred revenue as of June 30, 2021 and June 30, 2020, respectively. The deferred revenue resulted primarily from certain customer arrangements, including technology licensing fees and discounts on future product sales. The transaction price associated with our deferred revenue arrangements is generally based on the stand-alone sales prices of the individual products or services. Our customer payment terms generally range from 30 to 120 days globally and do not include any significant financing components. Payment terms vary based on industry and business practices within the regions in which we operate. Our average worldwide collection period for accounts receivable is approximately 60 to 70 days after the revenue is recognized. Additional Information For the Year Ended June 30 2021 2020 2019 Interest expense, net Term loan $ 7,951 $ 7,751 $ 8,553 Revolving credit facility 3,649 5,317 3,748 Amortization of debt issuance costs and debt discount 833 882 882 Refinancing expense 1,020 — — Other 265 663 494 Interest expense 13,718 14,613 13,677 Interest (income) (838) (1,757) (1,901) $ 12,880 $ 12,856 $ 11,776 For the Year Ended June 30 2021 2020 2019 Depreciation and amortization Depreciation of property, plant and equipment $ 23,165 $ 23,250 $ 21,423 Amortization of intangible assets 8,715 8,869 6,092 Amortization of other assets 5 222 49 $ 31,885 $ 32,341 $ 27,564 Depreciation of property, plant and equipment includes amortization of capitalized software costs of $1,254, $1,038 and $1,217 during 2021, 2020 and 2019, respectively. Amortization of intangible assets as of June 30, 2021, is expected to be: For the Year Ended June 30 2022 $ 8,628 2023 8,607 2024 8,427 2025 6,773 2026 5,823 Thereafter 24,024 Total $ 62,282 For the Year Ended June 30 2021 2020 2019 Research and development expense $ 17,759 $ 13,738 $ 12,093 |
Balance Sheets-Additional Infor
Balance Sheets-Additional Information | 12 Months Ended |
Jun. 30, 2021 | |
Balance Sheets Additional Information | |
Balance Sheets-Additional Information | 5. Balance Sheets—Additional Information . As of June 30 2021 2020 Accounts receivable, net Trade accounts receivable $ 150,659 $ 130,462 Allowance for doubtful accounts (3,807) (3,940) $ 146,852 $ 126,522 As of June 30 2021 2020 2019 Allowance for doubtful accounts Balance at beginning of period $ 3,940 $ 4,442 $ 6,257 Provision for bad debts 105 230 (201) Effect of changes in exchange rates 26 (304) 38 Bad debt write-offs (264) (428) (1,652) Balance at end of period $ 3,807 $ 3,940 $ 4,442 As of June 30 2021 2020 Inventories Raw materials $ 59,775 $ 73,837 Work-in-process 12,738 8,881 Finished goods 143,799 113,941 $ 216,312 $ 196,659 As of June 30 2021 2020 Property, plant and equipment, net Land $ 9,994 $ 9,796 Buildings and improvements 80,408 69,444 Machinery and equipment 287,355 267,805 377,757 347,045 Accumulated depreciation (223,051) (198,936) $ 154,706 $ 148,109 Certain facilities in Israel are on leased land. The leases expire in 2023, 2035 and 2062. Property, plant and equipment, net includes internal-use software costs, net of accumulated depreciation, of Machinery and equipment includes construction-in-progress of $23,659 and $25,582 at June 30, 2021 and 2020, respectively. Weighted- Average Useful Life As of June 30 (Years) 2021 2020 Intangibles, net Cost Technology 12 $ 85,016 $ 85,016 Product registrations, marketing and distribution rights 9 17,882 17,795 Customer relationships 12 31,115 31,089 Trade names, trademarks and other 5 3,857 3,857 137,870 137,757 Accumulated amortization Technology (42,083) (35,859) Product registrations, marketing and distribution rights (17,862) (17,770) Customer relationships (12,588) (10,336) Trade names, trademarks and other (3,055) (2,795) (75,588) (66,760) $ 62,282 $ 70,997 As of June 30 2021 2020 Goodwill Balance at beginning of period $ 52,679 $ 27,348 Osprey acquisition — 25,331 Balance at end of period $ 52,679 $ 52,679 As of June 30 2021 2020 Other assets ROU operating lease assets $ 32,962 $ 22,873 Deferred income taxes 9,861 11,430 Deposits 5,663 5,158 Insurance investments 5,964 5,801 Equity method investments 4,141 4,219 Derivative instruments 2,696 — U.S. pension plan 1,184 — Indemnification asset — 3,000 Debt issuance costs 1,811 1,021 Other 8,467 6,976 $ 72,749 $ 60,478 We evaluate our investments in equity method investees for impairment if circumstances indicate that the fair value of the investment may be impaired. The assets underlying a $2,740 equity investment are currently idle. We have concluded the investment is not impaired based on expected future operating cash flows and/or disposal value. As of June 30 2021 2020 Accrued expenses and other current liabilities Employee related $ 35,375 $ 25,825 Current operating lease liabilities 6,618 6,439 Commissions and rebates 6,312 5,782 Professional fees 4,380 5,766 Income and other taxes 6,107 3,821 Derivative instruments 3,486 5,757 Contingent consideration 4,840 — Restructuring costs 735 2,314 Insurance-related 1,176 1,272 Other 17,350 15,421 $ 86,379 $ 72,397 During the year ended June 30, 2019, we recorded costs of $6,281 for business restructuring activities related to productivity and cost saving initiatives in the Animal Health segment, including $3,500 related to the termination of a contract manufacturing agreement and $2,781 for employee separation charges. During the year ended June 30, 2020, we recorded costs of $425 related to employee separation charges. The costs are included in selling, general and administrative expenses in our consolidated statements of operations. The following table summarizes the activity of the restructuring liability during the year ended June 30, 2021: Liability balance at June 30, 2020 $ 2,860 Payments (2,125) Liability balance at June 30, 2021 $ 735 As of June 30 2021 2020 Other liabilities Long-term operating lease liabilities $ 28,003 $ 17,276 Long-term and deferred income taxes 6,646 11,680 Supplemental retirement benefits, deferred compensation and other 8,382 8,067 International retirement plans 5,345 5,499 U.S. pension plan — 3,563 Derivative instruments — 7,691 Contingent consideration — 4,840 Restructuring costs — 546 Other long-term liabilities 7,594 11,239 $ 55,970 $ 70,401 As of June 30 2021 2020 Accumulated other comprehensive income (loss) Derivative instruments $ (790) $ (13,448) Foreign currency translation adjustment (100,095) (103,738) Unrecognized net pension losses (19,973) (22,571) Benefit for income taxes on derivative instruments 97 3,256 Benefit for incomes taxes on long-term intercompany investments 8,166 8,166 Provision for income taxes on net pension losses (2,698) (2,050) $ (115,293) $ (130,385) |
Debt
Debt | 12 Months Ended |
Jun. 30, 2021 | |
Debt | |
Debt | 6. Debt Term Loans and Revolving Credit Facilities In April 2021, we entered into an amended and restated credit agreement (the “2021 Credit Agreement”) under which we have a term A loan in an aggregate initial principal amount of subject to the terms of the agreement (the “2021 Revolver” and together with the 2021 Term A Loan, the “2021 Credit Facilities”). The 2021 Credit Agreement amends and restates the credit agreement entered into in June 2017 (the “2017 Credit Agreement”). The 2021 Credit Facilities were used to refinance all of the Term A loans and revolving credit facility amounts outstanding under the 2017 Credit Agreement and to pay fees and expenses of the transaction. The 2021 Revolver contains a letter of credit facility. Borrowings under the 2021 Credit Facilities bear interest at rates based on the ratio of the Company and its subsidiaries’ net consolidated first lien indebtedness to the Company and its subsidiaries’ consolidated EBITDA (the “First Lien Net Leverage Ratio”). The interest rate per annum applicable to the loans under the 2021 Credit Facilities is based on a fluctuating rate of interest equal to the sum of an applicable rate and, at the Company’s election from time to time, either (1) In the case of LIBOR and Eurodollar rate loans, if the First Lien Net Leverage Ratio is (i) equal to or greater than 3.50:1.00; (ii) less than 3.50:1.00 but greater than or equal to 2.25:1.00; or, (iii) less than 2.25:1.00, the 2021 Credit Facilities have applicable rates equal to 2.00%; 1.75%; and, 1.50%, respectively. In the case of base rate loans, if the First Lien Net Leverage Ratio is (i) equal to or greater than 3.50:1.00; (ii) less than 3.50:1.00 but greater than or equal to 2.25:1.00; or, (iii) less than 2.25:1.00, the 2021 Credit Facilities have applicable rates equal to 1.00%; 0.75%; and, 0.50%, respectively. Pursuant to the terms of the 2021 Credit Agreement, the 2021 Credit Facilities are subject to various covenants that, among other things and subject to the permitted exceptions described therein, restrict us and our subsidiaries with respect to: (i) incurring additional debt; (ii) making certain restricted payments or making optional redemptions of other indebtedness; (iii) making investments or acquiring assets; (iv) disposing of assets (other than in the ordinary course of business); (v) creating any liens on our assets; (vi) entering into transactions with affiliates; (vii) entering into merger or consolidation transactions; and (viii) creating guarantee obligations; provided, however, that we are permitted 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 Credit Facilities shall have occurred and be continuing at the time such distribution is declared. Indebtedness under the Credit Facilities is collateralized by a first priority lien on substantially all assets of Phibro and certain of our domestic subsidiaries. The 2021 Credit Agreement contains an acceleration clause should an event of default (as defined in the agreement) occur. The 2021 Credit Facilities mature in The 2021 Credit Agreement requires, among other things, compliance with financial covenants that permitted: (i) a maximum First Lien Net Leverage Ratio of 4.00:1.00 and (ii) a minimum interest coverage ratio of 3.00:1.00, each calculated on a trailing four-quarter basis. The 2021 Credit Agreement contains an acceleration clause should an event of default (as defined in the 2021 Credit Agreement) occur. As of June 30, 2021, we were in compliance with the financial covenants. As of June 30, 2021, we had $95,000 in borrowings under the 2021 Revolver and had outstanding letters of credit of $2,709, leaving $152,291 available for borrowings and letters of credit under the 2021 Revolver, subject to restrictions in our 2021 Credit Facilities. We obtain letters of credit in connection with certain regulatory and insurance obligations, inventory purchases and other contractual obligations. The terms of these letters of credit are all less than one year. In July 2017, we entered into an interest rate swap agreement on $150,000 of notional principal that effectively converts the floating LIBOR portion of our interest obligation on that amount of debt to a fixed interest rate of 1.8325%. The agreement matures in June 2022. We designated the interest rate swap as a highly effective cash flow hedge. For additional details, see “Note 14— Derivatives.” In March 2020, we entered into an interest rate swap agreement on an additional $150,000 of notional principal that effectively converts the floating LIBOR portion of our interest obligation on that amount of debt to a fixed rate of 0.62%. In July 2022, this agreement increases to a notional principal amount of $300,000 through June 2025, and effectively converts the floating LIBOR portion of our interest obligation on $300,000 of debt to a fixed interest rate of 0.62%. We designated the interest rate swaps as highly effective cash flow hedges. For additional details, see “Note 14 — Derivatives.” The 2017 and 2020 interest rate swap agreements will continue to remain in place on our interest obligations associated with the 2021 Credit Facilities. As of June 30, 2021, the interest rates for the Revolver and the Term A Loan were 1.86% and 2.98%, respectively. The weighted-average interest rates for the Revolver were 2.21% and 3.17% for the years ended June 30, 2021 and 2020, respectively. The weighted-average interest rates for the Term A Loan were 3.27% and 3.38% for the years ended June 30, 2021 and 2020, respectively. Foreign Credit Facilities Our Israel subsidiaries have aggregate credit facilities available of approximately $13,435 (the “Israel Credit Facilities”). As of June 30, 2021, we had no outstanding borrowings or other commitments outstanding under the Israel Credit Facilities. Interest rate elections under the Israel Credit Facilities are LIBOR plus 2.25%. The Israel Credit Facilities mature in March 2022. Long-Term Debt As of June 30 2021 2020 2021 Term A Loan due April 2026 $ 298,125 $ — 2017 Term A Loan due June 2022 — 218,750 Unamortized debt issuance costs (1,040) (743) 297,085 218,007 Less: current maturities (9,375) (18,750) $ 287,710 $ 199,257 Aggregate Maturities of Long-Term Debt For the Years Ending June 30 2022 $ 9,375 2023 15,000 2024 16,875 2025 24,375 2026 232,500 Total $ 298,125 |
Leases
Leases | 12 Months Ended |
Jun. 30, 2021 | |
Leases | |
Leases | 7. Leases Our lease portfolio consists of real estate, vehicles and equipment ROU assets, classified as operating leases. In March 2021, we amended and extended the lease agreement for our corporate office, increasing the value of our lease commitments. The remaining non-cancelable lease terms, inclusive of renewal options reasonably certain of exercise, range from one The following table summarizes the ROU assets and the related lease liabilities recorded on the consolidated balance sheet: As of June 30, 2021 2020 Balance Sheet Classification Assets: Operating lease ROU assets $ 32,962 $ 22,873 Other Assets Liabilities: Current portion 6,618 6,439 Accrued expenses and Non-current portion 28,003 17,276 Other liabilities Total operating lease liabilities $ 34,621 $ 23,715 The following table summarizes the composition of net lease expense: For the Year Ended June 30 2021 2020 Operating lease expense $ 7,989 $ 7,570 Variable lease expense 1,176 1,304 Short-term lease expense 873 802 Total lease expense $ 10,038 $ 9,676 The following tables include other supplemental information: For the Year Ended June 30 2021 2020 Operating cash flows used for ROU operating leases $ 8,292 $ 7,696 Right of use assets obtained in exchange for new operating lease liabilities $ 16,665 $ 11,017 As of June 30 2021 2020 Weighted average remaining lease term (in years) - ROU operating leases 8.42 6.49 Weighted average discount rate - ROU operating leases 4.04 % 4.40 % At June 30, 2021, maturities of future lease liabilities were: For the Years Ending June 30, 2022 $ 7,733 2023 5,828 2024 4,616 2025 3,567 2026 2,996 2027 and thereafter 16,561 Total lease payments 41,301 Less: interest 6,680 Total operating lease liabilities $ 34,621 There were no significant future payment obligations related to executed lease agreements for which the related lease had not yet commenced as of June 30, 2021. Our lease agreements do not contain any material restrictive covenants or residual value guarantee provisions. |
Common Stock, Preferred Stock a
Common Stock, Preferred Stock and Dividends | 12 Months Ended |
Jun. 30, 2021 | |
Common Stock, Preferred Stock and Dividends | |
Common Stock, Preferred Stock and Dividends | 8. Common Stock, Preferred Stock and Dividends Preferred stock and common stock at June 30, 2021 and 2020 were: As of June 30 2021 2020 2021 2020 Authorized Shares Par value Issued and outstanding shares Preferred stock 16,000,000 16,000,000 $ 0.0001 — — Common stock – Class A 300,000,000 300,000,000 $ 0.0001 20,337,574 20,287,574 Common stock – Class B 30,000,000 30,000,000 $ 0.0001 20,166,034 20,166,034 Holders of our Class B common stock converted zero shares of Class B common stock to Class A common stock in 2021 and 2020. Common Stock General Except as otherwise provided by our amended and restated certificate of incorporation or applicable law, the holders of our Class A common stock and Class B common stock shall vote together as a single class. There are no cumulative voting rights. Holders of our Class A common stock and Class B common stock are entitled to receive dividends when and if declared by our Board of Directors out of funds legally available therefor, subject to any statutory or contractual restrictions on the payment of dividends and to any restrictions on the payment of dividends imposed by the terms of any outstanding preferred stock. Upon our dissolution or liquidation or the sale of all or substantially all of our assets, after payment in full of all amounts required to be paid to creditors and to the holders of preferred stock having liquidation preferences, if any, the holders of our Class A common stock and Class B common stock will be entitled to receive our remaining assets available for distribution. Class A Common Stock Holders of our Class A common stock are entitled to one vote for each share held of record on all matters submitted to a vote of stockholders. Holders of our Class A common stock do not have preemptive, subscription or conversion rights. Our Class A common stock is not convertible and there are no redemption or sinking fund provisions applicable to our Class A common stock. Unless our Board of Directors determines otherwise, we will issue all of our capital stock in uncertificated form. Class B Common Stock Holders of our Class B common stock are entitled to 10 votes for each share held of record on all matters submitted to a vote of stockholders. BFI holds all of our outstanding Class B common stock. Holders of our Class B common stock do not have preemptive or subscription rights. There are no redemption or sinking fund provisions applicable to our Class B common stock. 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. In addition, each share of Class B common stock will convert automatically into one share of Class A common stock upon any transfer, whether or not for value, except for certain transfers by and among BFI, its affiliates and certain Bendheim family members, as described in the amended and restated certificate of incorporation. Once transferred and converted into Class A common stock, the Class B common stock will not be reissued. In addition, all shares of Class B common stock will automatically convert to shares of Class A common stock when the outstanding shares of Class B common stock and Class A common stock held by BFI, its affiliates and certain Bendheim family members, together, is less than 15% of the total outstanding shares of Class A common stock and Class B common stock, taken as a single class. Holders of our Class B common stock have 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. Preferred Stock We do not have any preferred stock outstanding. Our Board of Directors has the authority to issue shares of preferred stock from time to time on terms it may determine, to divide shares of preferred stock into one or more series and to fix the designations, preferences, privileges, and restrictions of preferred stock, including dividend rights, conversion rights, voting rights, terms of redemption, liquidation preference, sinking fund terms, and the number of shares constituting any series or the designation of any series to the fullest extent permitted by the General Corporation Law of the State of Delaware. Dividends We declared and paid quarterly cash dividends totaling $19,430 for the year ended June 30, 2021, to holders of our Class A common stock and Class B |
Stock Incentive Plan
Stock Incentive Plan | 12 Months Ended |
Jun. 30, 2021 | |
Stock Incentive Plan | |
Stock Incentive Plan | 9. Stock Incentive Plan In March 2008, our Board of Directors and stockholders adopted the 2008 Incentive Plan (the“Incentive Plan”). The Incentive Plan provides directors, officers, employees and consultants to the Company with opportunities to purchase common stock pursuant to options that may be granted, and receive grants of restricted stock and other stock-based awards granted, from time to time by the Board of Directors or a committee approved by the Board. The Incentive Plan provides for grants of stock options, stock awards and other incentives for up to 6,630,000 shares. There were 5,081,620 Class A shares available for grant pursuant to the Incentive Plan as of June 30, 2021. There are no outstanding awards as of June 30, 2021. Restricted Stock Units In May 2018, PAHC’s Compensation Committee approved the grant of 250,000 restricted stock units (“RSUs”) to an officer of the Company, pursuant to the Incentive Plan. Each RSU represented the right to receive a share of our common stock upon vesting. 200,000 of the RSUs were subject to performance-based vesting (the “Performance-Based RSUs”) and none of the Performance-Based RSUs vested as of the grant maturity on December 31, 2020. 50,000 of the RSUs were subject to time-based vesting (the“Time-Based RSUs”) and vested on December 31, 2020. We recognized the total grant date fair value of the RSUs as stock-based compensation expense on a straight-line basis over the vesting period. Stock-based compensation expense related to RSUs was $1,129, $2,259 and $2,259 for the years ended June 30, 2021, 2020 and 2019, respectively. Stock Options There was no stock-based compensation expense related to employee stock options in the periods included in the consolidated financial statements and there was no stock option activity during 2021. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Jun. 30, 2021 | |
Related Party Transactions | |
Related Party Transactions | 10. Related Party Transactions Certain relatives of Jack C. Bendheim, our Chairman, President and Chief Executive Officer, provided services to the Company as employees or consultants and received aggregate compensation and benefits of approximately $1,660, $1,553 and $1,969 during 2021, 2020 and 2019, respectively. Mr. Bendheim has sole authority to vote shares of our stock owned by BFI Co., LLC, an investment vehicle of the Bendheim family. |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Jun. 30, 2021 | |
Employee Benefit Plans | |
Employee Benefit Plans | 11. Employee Benefit Plans Domestic Pension Plan We maintain a noncontributory defined benefit pension plan for all domestic nonunion employees employed on or prior to December 31, 2013, who meet certain requirements of age, length of service and hours worked per year. We amended the plan to eliminate credit for future service and compensation increases, effective September 2016. Plan benefits are based upon years of service and average compensation, as defined. The measurement dates for the plan were as of June 30, 2021, 2020 and 2019. Changes in the projected benefit obligation, plan assets and funded status of the plan were: For the Year Ended June 30 2021 2020 Change in projected benefit obligation Projected benefit obligation at beginning of year $ 79,353 $ 68,527 Interest cost 1,682 2,112 Benefits paid (2,260) (2,000) Actuarial (gain) / loss (860) 10,714 Projected benefit obligation at end of year $ 77,915 $ 79,353 For the Year Ended June 30 2021 2020 Change in plan assets Fair value of plan assets at beginning of year $ 75,791 $ 64,593 Actual return on plan assets 4,838 10,821 Employer contributions 730 2,377 Benefits paid (2,260) (2,000) Fair value of plan assets at end of year $ 79,099 $ 75,791 Asset (Liability) Funded status at end of year $ 1,184 $ (3,562) The projected benefit obligation for the year ended June 30, 2021, decreased due to a net overall gain from the use of a higher discount rate and mortality assumption update, partially offset by a loss from demographic experience. The projected benefit obligation for the year ended June 30, 2020, increased due to an overall loss from the use of a lower discount rate, plus a loss from other actuarial assumptions and demographic experience. The discount rate used each period varies depending on the long-term bond market rates. The projected benefit obligation also increased each year by the interest cost due to the passage of time and decreased each year by the benefits paid to plan participants. The funded status is included in other assets and other liabilities in the consolidated balance sheets, at June 30, 2021 and 2020, respectively. The Company does not expect to contribute to the plan during 2022. We seek to maintain an asset balance that meets the long-term funding requirements identified by actuarial projections while also satisfying ERISA fiduciary responsibilities. Accumulated other comprehensive income (loss) related to the plan was: For the Year Ended June 30 2021 2020 Accumulated other comprehensive income (loss) related to pension plan Balance at beginning of period $ (22,571) $ (20,050) Amortization of net actuarial loss and prior service costs 560 515 Current period net actuarial gain (loss) 2,038 (3,036) Net change 2,598 (2,521) Balance at end of period $ (19,973) $ (22,571) Amortization of unrecognized net actuarial loss will be approximately $460 during 2022. Net periodic pension expense was: For the Year Ended June 30 2021 2020 2019 Interest cost on benefit obligation $ 1,682 $ 2,112 $ 2,407 Expected return on plan assets (3,660) (3,144) (2,842) Amortization of net actuarial loss and prior service costs 560 515 465 Net periodic pension (income) expense $ (1,418) $ (517) $ 30 Significant actuarial assumptions for the plan were: For the Year Ended June 30 2021 2020 2019 Discount rate for interest cost 2.2 % 2.2 % 3.1 % Expected rate of return on plan assets 4.4 % 4.9 % 4.9 % Discount rate for year-end benefit obligation 2.9 % 2.8 % 3.6 % The plan used the Aon Hewitt AA Bond Universe as a benchmark for its discount rate as of June 30, 2021, 2020 and 2019. The discount rate is determined by matching the plan’s timing and amount of expected cash outflows to a bond yield curve constructed from a population of AA-rated corporate bond issues that are generally non-callable and have at least $250 million par value outstanding. From this, the discount rate that results in the same present value is calculated. Estimated future benefit payments are: For the Year Ended June 30 2022 $ 3,146 2023 3,392 2024 3,575 2025 3,712 2026 3,830 2027 – 2031 20,414 The plan’s target asset allocations for 2022 and the weighted-average asset allocation of plan assets as of June 30, 2021 and 2020 are: Target Allocation Percentage of Plan Assets For the Year Ended June 30 2022 2021 2020 Debt securities 65% - 85% 71% 66% Equity securities 10% - 30% 21% 27% Global asset allocation/risk parity(1) 0% - 15% 7% 5% Other 0% - 10% 1% 2% (1) The global asset allocation/risk parity category consists of a variety of asset classes including, but not limited to, global bonds, global equities, real estate and commodities. The expected long-term rate of return for the plan’s total assets generally is based on the plan’s asset mix. In determining the rate to use, we consider the expected long-term real returns on asset categories, expectations for inflation, estimates of the effect of active management and actual historical returns. The investment policy and strategy is to earn a long-term investment return sufficient to meet the obligations of the plan, while assuming a moderate amount of risk in order to maximize investment return. In order to achieve this goal, assets are invested in a diversified portfolio consisting of equity securities, debt securities, and other investments in a manner consistent with ERISA’s fiduciary requirements. The fair values of the plan assets by asset category were: Fair Value Measurements Using As of June 30, 2021 Level 1 Level 2 Level 3 Total Cash and cash equivalents $ 386 $ — $ — $ 386 Common-collective funds Global large cap equities — 13,201 3,816 17,017 Fixed income securities — 56,414 — 56,414 Global asset allocations/risk parity — 2,016 — 2,016 Mutual funds Global asset allocations/risk parity 3,206 — — 3,206 Other Other — — 60 60 $ 3,592 $ 71,631 $ 3,876 $ 79,099 Fair Value Measurements Using As of June 30, 2020 Level 1 Level 2 Level 3 Total Cash and cash equivalents $ 1,812 $ — $ — $ 1,812 Common-collective funds Global large cap equities — 16,678 4,038 20,716 Fixed income securities — 49,902 — 49,902 Global asset allocations/risk parity — 1,667 — 1,667 Other Global asset allocations/risk parity — — 1,669 1,669 Other — — 25 25 $ 1,812 $ 68,247 $ 5,732 $ 75,791 The table below provides a summary of the changes in the fair value of Level 3 assets: Change in Fair Value Level 3 assets 2021 2020 Balance at beginning of period $ 5,732 $ 5,649 Redemptions (3,236) (49) Purchases 300 200 Change in fair value 1,080 (68) Balance at end of period $ 3,876 $ 5,732 The following outlines the valuation methodologies used to estimate the fair value of plan assets: ● Cash and cash equivalents are valued at $1 per unit; ● Common-collective funds are determined based on current market values of the underlying assets of the fund; ● Mutual funds and foreign currency deposits are valued using quoted market prices in active markets; and ● For Level 3 managed assets, business appraisers use a combination of valuations and appraisal methodologies, as well as a number of assumptions to create a price that brokers evaluate. For Level 3 non-managed assets, pricing is provided by various sources, such as issuer or investment manager. Other employee benefit plans We provide a 401(k) retirement savings plan, under which United States employees may make pre-tax and post-tax contributions. The Company contributes: (i) a matching contribution equal to 100% of the first 6.0% of an employee’s contribution; and, (ii) an additional discretionary contribution of up to 4.5% of compensation, depending on the employee’s age and years of service, provided that such contributions comply with ERISA non-discrimination requirements. Employee and Company contributions are subject to certain ERISA limitations. Employees are immediately vested in Company contributions. Our contribution expense was $5,803, $5,566, and $5,201, in 2021, 2020 and 2019, respectively. Our consolidated balance sheets include other employee-related liabilities of $13,827 and $13,666 as of June 30, 2021 and 2020, respectively, including international retirement plans, supplemental retirement benefits and long-term incentive arrangements. Expense under these plans was $5,095, $5,725, and $5,685 in 2021, 2020 and 2019, respectively. |
Income Taxes
Income Taxes | 12 Months Ended |
Jun. 30, 2021 | |
Income Taxes | |
Income Taxes | 12. Income Taxes The components of income before income taxes consisted of the following: For the Year Ended June 30 2021 2020 2019 Domestic $ 12,684 $ (3,142) $ 2,331 Foreign 53,784 58,654 69,174 Income before income taxes $ 66,468 $ 55,512 $ 71,505 Components of the provision for income taxes were: For the Year Ended June 30 2021 2020 2019 Current provision (benefit): Federal $ 99 $ (1,271) $ (459) State and local 887 401 102 Foreign 13,280 14,705 16,603 Total current provision 14,266 13,835 16,246 Deferred provision (benefit): Federal 291 5,226 858 State and local (110) 696 432 Foreign (2,663) 218 (691) Change in valuation allowance–foreign 299 1,985 (53) Total deferred provision (benefit) (2,183) 8,125 546 Provision for income taxes $ 12,083 $ 21,960 $ 16,792 Reconciliation of the federal statutory rate to the Company’s effective tax rate were: For the Year Ended June 30 2021 2020 2019 Federal income tax rate 21.0 % 21.0 % 21.0 % State and local taxes, net of federal benefit 0.8 1.7 0.6 Foreign income tax rates 4.2 3.6 4.1 Changes in uncertain tax positions (6.8) 5.2 (1.0) Global Intangible Low-Taxed Income 1.3 6.2 0.8 Recognition of federal and foreign tax credits (2.1) (0.9) (2.5) Change in valuation allowance 0.5 3.6 — Other (0.7) (0.8) 0.5 Effective tax rate 18.2 % 39.6 % 23.5 % We record the Global Intangible Low-Taxed Income (GILTI) aspects of comprehensive U.S. income tax legislation as a period expense. The provision for income taxes for the years ended June 30, 2021 and 2020, included $889 and $3,453 of federal tax expense from the effects of GILTI, respectively. The tax effects of significant temporary differences that comprise deferred tax assets and liabilities were: As of June 30 2021 2020 Deferred tax assets: Employee related accruals $ 6,337 $ 5,703 Inventory 2,094 726 Environmental remediation 765 974 Net operating loss carry forwards–domestic 1,522 1,618 Net operating loss carry forwards–foreign 5,517 5,221 Operating lease liabilities 8,312 5,732 Other 4,672 6,340 29,219 26,314 Valuation allowance (3,709) (3,403) 25,510 22,911 Deferred tax liabilities: Property, plant and equipment and intangible assets (7,550) (6,108) Operating lease ROU assets (8,251) (5,657) Other (793) (921) (16,594) (12,686) Net deferred tax asset $ 8,916 $ 10,225 Deferred taxes are included in the consolidated balance sheets as follows: As of June 30 2021 2020 Other assets $ 9,861 $ 11,430 Other liabilities (945) (1,205) $ 8,916 $ 10,225 The valuation allowance established against the deferred tax assets were: 2021 2020 2019 Balance at beginning of period $ 3,403 $ 808 $ 861 Provision for income taxes 306 2,595 (53) Balance at end of period $ 3,709 $ 3,403 $ 808 The Company records valuation allowance against certain foreign and state deferred tax assets, after considering all of the available evidence, it is more likely than not that these assets will not be realized. The Company has $31,319 of state net operating loss carry forwards. $13,803 that will expire in 2022 through 2039, and $17,516 that do not expire, and $27,481 of foreign net operating loss carry forwards of which most are in jurisdictions that have no expiration. If amounts are repatriated from certain of our foreign subsidiaries, we could be subject to additional non-U.S. income and withholding taxes. We consider undistributed earnings of such foreign subsidiaries to be indefinitely reinvested. At June 30, 2021, our cash and cash equivalents and short-term investments included $91,601 held by our international subsidiaries. We do not provide income taxes for foreign currency translation adjustments relating to investments in international subsidiaries that will be held indefinitely. As tax law is complex and often subject to varied interpretations, it is uncertain whether some of our tax positions will be sustained upon examination. Tax liabilities associated with uncertain tax positions represent unrecognized tax benefits, which arise when the estimated benefit recorded in our financial statements differs from the amounts taken or expected to be taken in a tax return because of the uncertainties described above. Substantially all of these unrecognized tax benefits, if recognized, would reduce our effective income tax rate. Reconciliations of the beginning and ending amounts of gross unrecognized tax benefits are as follows: As of June 30 2021 2020 2019 Unrecognized tax benefits–beginning of period $ 9,507 $ 6,343 $ 7,000 Tax position changes–current period 1,873 2,850 528 Tax position changes–prior periods, including settlements with tax authorities (5,354) 108 (317) Lapse of statute of limitations (1,109) — (1,053) Translation 394 206 185 Unrecognized tax benefits–end of period 5,311 9,507 6,343 Interest and penalties–end of period 391 969 750 Total liabilities related to uncertain tax positions $ 5,702 $ 10,476 $ 7,093 We recognize interest and penalties associated with uncertain tax positions as a component of the provision for income taxes. We recognized and recorded interest and penalties expense of $69, $214, and $94 for 2021, 2020 and 2019, respectively. Income tax returns for the following periods are no longer subject to examination by the relevant tax authorities: ● U.S. federal and significant states, through June 30, 2008; ● Brazil, through December 31, 2015; ● Israel, through June 30, 2016, for certain subsidiaries and through June 30, 2019, for certain subsidiaries. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Jun. 30, 2021 | |
Commitments and Contingencies | |
Commitments and Contingencies | 13. Commitments and Contingencies Environmental Our operations and properties are subject to extensive federal, state, local and foreign laws and regulations, including those governing pollution; protection of the environment; the use, management, and release of hazardous materials, substances and wastes; air emissions; greenhouse gas emissions; water use, supply and discharges; the investigation and remediation of contamination; the manufacture, distribution, and sale of regulated materials, including pesticides; the importing, exporting and transportation of products; and the health and safety of our employees (collectively, “Environmental Laws”). As such, the nature of our current and former operations exposes us to the risk of claims with respect to such matters, including fines, penalties, and remediation obligations that may be imposed by regulatory authorities. 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 included within operating results. Potential costs and expenses may also be incurred in connection with the repair or upgrade of facilities to meet existing or new requirements under Environmental Laws or to investigate or remediate potential or actual contamination, and from time to time we establish reserves for such contemplated investigation and remediation costs. In many instances, the ultimate costs under Environmental Laws and the period during which such costs are likely to be incurred are difficult to predict. 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 efforts to address contamination associated with historic operations of the sites. 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 effect of increased and more stringent regulation on our operations, future capital expenditure requirements, or the cost of compliance. The nature of our current and former operations exposes us to the risk of claims with respect to environmental matters and we cannot assure we will not incur material costs and liabilities in connection with such claims. Based on our experience, 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. The United States Environmental Protection Agency (the “EPA”) is investigating and planning for the remediation of offsite contaminated groundwater that has migrated from the Omega Chemical Corporation Superfund Site (“Omega Chemical Site”), which is upgradient of the Santa Fe Springs, California facility of our subsidiary, Phibro-Tech, Inc. (“Phibro-Tech”). The EPA has entered into a settlement agreement with a group of companies that sent chemicals to the Omega Chemical Site for processing and recycling (“OPOG”) to remediate the contaminated groundwater that has migrated from the Omega Chemical Site in accordance with a general remedy selected by EPA. The EPA has named Phibro-Tech and certain other subsidiaries of PAHC as potentially responsible parties (“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. In September 2012, the EPA notified approximately 140 PRPs, including Phibro-Tech and the other subsidiaries, that they have been identified as potentially responsible for remedial action for the groundwater plume affected by the Omega Chemical Site and for EPA oversight and response costs. Phibro-Tech contends that any groundwater contamination at its site is localized and due to historical operations that pre-date Phibro-Tech and/or contaminated groundwater that has migrated from upgradient properties. In addition, a successor to a prior owner of the Phibro-Tech site has asserted that PAHC and Phibro-Tech are obligated to provide indemnification for its potential liability and defense costs relating to the groundwater plume affected by the Omega Chemical Site. Phibro-Tech has vigorously contested this position and has asserted that the successor to the prior owner is required to indemnify Phibro-Tech for its potential liability and defense costs. Furthermore, the members of OPOG filed a complaint under the Comprehensive Environmental Response, Compensation, and Liability Act and the Resource Conservation and Recovery Act in the United States District Court for the Central District of California against many of the PRPs allegedly associated with the groundwater plume affected by the Omega Chemical Site (including Phibro-Tech) for contribution toward past and future costs associated with the investigation and remediation of the groundwater plume affected by the Omega Chemical Site. Due to the ongoing nature of the EPA’s investigation, the preliminary stage of the ongoing litigation and Phibro-Tech’s dispute with the prior owner’s successor, at this time we cannot predict with any degree of certainty what, if any, liability Phibro-Tech or the other subsidiaries may ultimately have for investigation, remediation and the EPA oversight and response costs associated with the affected groundwater plume. Based upon information available, to the extent such costs can be estimated with reasonable certainty, we estimated the cost for further investigation and remediation of identified soil and groundwater problems at operating sites, closed sites and third-party sites, and closure costs for closed sites, to be approximately $4,293 and $5,254 at June 30, 2021 and 2020, respectively, which is included in current and long-term liabilities on the consolidated balance sheets. However, future events, such as new information, changes in existing Environmental Laws or their interpretation, and more vigorous enforcement policies of regulatory agencies, may give rise to additional expenditures or liabilities that could be material. For all purposes of the discussion under this caption and elsewhere in this report, it should be noted that we take and have taken the position that neither PAHC nor any of our subsidiaries are liable for environmental or other claims made against one or more of our other subsidiaries or for which any of such other subsidiaries may ultimately be responsible. Claims and Litigation PAHC and its subsidiaries are party to various claims and lawsuits arising out of the normal course of business including product liabilities, payment disputes and governmental regulation. Certain of these actions seek damages in various amounts. In many cases, such claims are covered by insurance. We believe that none of the claims or pending lawsuits, either individually or in the aggregate, will have a material adverse effect on our financial position, results of operations, cash flows or liquidity. Employment and Severance Agreements We have entered into employment agreements with certain executive management and other employees that specify severance benefits of up to 15 months of the employee’s compensation. |
Derivatives
Derivatives | 12 Months Ended |
Jun. 30, 2021 | |
Derivatives | |
Derivatives | 14. Derivatives We monitor our exposure to foreign currency exchange rates and interest rates and from time-to-time use derivatives to manage certain of these risks. We designate derivatives as a hedge of a forecasted transaction or of the variability of the cash flows to be received or paid in the future related to a recognized asset or liability (cash flow hedge). All changes in the fair value of a highly effective cash flow hedge are recorded in accumulated other comprehensive income (loss). We routinely assess whether the derivatives used to hedge transactions are effective. If we determine a derivative ceases to be an effective hedge, we discontinue hedge accounting in the period of the assessment for that derivative, and immediately recognize any unrealized gains or losses related to the fair value of that derivative in the consolidated statements of operations. We record derivatives at fair value in the consolidated balance sheets. For additional details regarding fair value, see “Note 15— Fair Value Measurements.” In July 2017, we entered into an interest rate swap agreement on the first $150,000 of notional principal that effectively converts the floating LIBOR portion of our interest obligation on that amount of debt to a fixed interest rate of 1.8325%. The agreement matures in June 2022. In March 2020, we entered into an interest rate swap agreement on an additional $150,000 of notional principal that effectively converts the floating LIBOR portion of our interest obligation on that amount of debt to a fixed rate of 0.62%. On the maturity of the July 2017 agreement, this agreement increases to a notional principal amount of $300,000 through June 2025, and effectively converts the floating LIBOR portion of our interest obligation on $300,000 of debt to a fixed interest rate of 0.62%. The forecasted transactions are probable of occurring, and the interest rate swaps have been designated as highly effective cash flow hedges. We entered into foreign currency option contracts to hedge cash flows related to monthly inventory purchases. The individual option contracts mature monthly through February 2023 The consolidated balance sheet includes the net fair values of our outstanding foreign currency option contracts within the respective line items, based on the net financial position and maturity date of the individual contracts. The consolidated balance sheet includes the net fair values of our outstanding interest rate swaps within the respective balance sheet line items, based on the expected timing of the cash flows. The consolidated balance sheet includes assets and liabilities for the fair values of outstanding derivatives that are designated and effective as cash flow hedges as follows: As of June 30 2021 2020 Other assets Brazil Real options, net $ 355 $ — Interest rate swaps 2,341 — Accrued expense and other current liabilities Brazil Real options, net (150) (2,477) Interest rate swaps (3,336) (3,280) Other liabilities Brazil Real options, net — (1,297) Interest rate swaps — (6,394) Total Fair Value Brazil Real options, net 205 (3,774) Interest rate swaps (995) (9,674) Notional amounts of the derivatives as of the balance sheet date were: As of June 30 2021 Brazil Real call options R$ 114,000 Brazil Real put options R$ 114,000 Interest rate swaps $ 300,000 The consolidated statements of operations and statements of other comprehensive income (“OCI”) for the years ended June 30, 2021 and 2020 included the effects of derivatives as follows: For the Year Ended June 30 2021 2020 Brazil Real options, net Expense recorded in consolidated statement of operations $ 1,093 $ 115 Consolidated statement of operations - total cost of goods sold 561,973 543,472 (Income) expense recorded in OCI (3,979) 4,157 Interest rate swaps Expense recorded in consolidated statements of operations 3,317 310 Consolidated statement of operations - total interest expense, net 12,880 12,856 (Income) expense recorded in OCI (8,679) 8,697 We recognize gains and losses related to foreign currency derivatives as a component of cost of goods sold at the time the hedged item is sold. Inventory as of June 30, 2021, included realized net losses of $1,613 related to matured contracts. We anticipate the net losses included in inventory will be recognized in cost of goods sold within the next twelve to eighteen months. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Jun. 30, 2021 | |
Fair Value Measurements | |
Fair Value Measurements | 15. Fair Value Measurements Fair value is defined as the exit price that would be received to sell an asset or paid to transfer a liability. Fair value is a market-based measurement that should be determined using assumptions that market participants would use in pricing an asset or liability. Financial assets and liabilities are measured at fair value using the three-level valuation hierarchy for disclosure of fair value measurements. The determination of the applicable level within the hierarchy of a particular asset or liability depends on the inputs used in the valuation as of the measurement date, notably the extent to which the inputs are market-based (observable) or internally derived (unobservable). Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from independent sources. Unobservable inputs are inputs based on a company’s own assumptions about market participant assumptions developed based on the best information available in the circumstances. The hierarchy is broken down into three levels based on the reliability of inputs as follows: Level 1 — Quoted prices in active markets for identical assets or liabilities. Level 2 — Significant observable inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly through corroboration with observable market data. Level 3 — Unobservable inputs for which there is little or no market data available, and that are significant to the overall fair value measurement, are employed that require the reporting entity to develop its own assumptions. In assessing the fair value of financial instruments at June 30, 2021 and 2020, we used a variety of methods and assumptions that were based on estimates of market conditions and risks existing at the time. Short-term investments Our short-term investments consist of cash deposits held at financial institutions. We consider the carrying amounts of these short-term investments to be representative of their fair value. Current Assets and Liabilities We consider the carrying amounts of current assets and current liabilities to be representative of their fair value because of the current nature of these items. Contingent Consideration on Acquisitions We determine the fair value of contingent consideration on acquisitions based on contractual terms, our current forecast of performance factors related to the acquired business and an applicable discount rate. Debt We record debt, including term loans and revolver balances, at amortized cost in our consolidated financial statements. We believe the carrying value of the debt is approximately equal to its fair value, due to the variable nature of the instruments and our evaluation of estimated market prices. Derivatives We determine the fair value of derivative instruments based upon pricing models using observable market inputs for these types of financial instruments, such as spot and forward currency translation rates. Non-financial assets Our non-financial assets, which primarily consist of goodwill, other intangible assets, property and equipment, and lease-related ROU assets, are not required to be measured at fair value on a recurring basis, and instead are reported at carrying value in the consolidated balance sheet. We assess the carrying values of non-financial assets for impairment on a periodic basis or whenever events or changes in circumstances indicate an asset may not be fully recoverable. Fair Value of Assets (Liabilities) 2021 2020 As of June 30 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Short-term investments $ 43,000 $ — $ — $ 55,000 $ — $ — Foreign currency derivatives asset (liability) $ — $ 205 $ — $ — $ (3,774) $ — Interest rate swaps $ — $ (995) $ — $ — $ (9,674) $ — Contingent consideration on acquisitions $ — $ — $ (4,840) $ — $ — $ (4,840) There were no transfers between levels during the periods presented. There were no changes in the fair value of the Level 3 liabilities. For a detailed discussion on the fair value of our pension plan assets, see “— Employee Benefit Plans.” The contingent consideration on acquisitions is the minimum amount payable in accordance with the acquisition agreement for Osprey. |
Business Segments
Business Segments | 12 Months Ended |
Jun. 30, 2021 | |
Business Segments | |
Business Segments | 16. Business Segments We evaluate performance and allocate resources based on the Animal Health, Mineral Nutrition and Performance Products segments. Certain of our costs and assets are not directly attributable to these segments and we refer to these items as Corporate. We do not allocate Corporate costs or assets to the segments because they are not used to evaluate the segments’ operating results or financial position. Corporate costs include certain costs related to executive management, business technology, legal, finance, human resources and business development. We evaluate performance of our segments based on Adjusted EBITDA. We define Adjusted EBITDA as income before income taxes plus (a) interest expense, net, (b) depreciation and amortization, (c) (income) loss from, and disposal of, discontinued operations, (d) other expense or less other income, as separately reported on our consolidated statements of operations, including foreign currency gains and losses and (e) certain items that we consider to be unusual, non-operational or non-recurring. The accounting policies of our segments are the same as those described in the summary of significant accounting policies included herein. For the Year Ended June 30 2021 2020 2019 Net sales Animal Health $ 545,716 $ 526,904 $ 531,974 Mineral Nutrition 220,560 214,412 233,782 Performance Products 67,074 59,038 62,239 Total segments $ 833,350 $ 800,354 $ 827,995 Depreciation and amortization Animal Health $ 25,839 $ 26,287 $ 22,312 Mineral Nutrition 2,690 2,522 2,319 Performance Products 1,702 1,860 1,127 Total segments $ 30,231 $ 30,669 $ 25,758 Adjusted EBITDA Animal Health $ 123,953 $ 123,106 $ 136,049 Mineral Nutrition 17,116 14,678 15,712 Performance Products 9,437 4,534 4,728 Total segments $ 150,506 $ 142,318 $ 156,489 Reconciliation of income before income taxes to Adjusted EBITDA Income before income taxes $ 66,468 $ 55,512 $ 71,505 Interest expense, net 12,880 12,856 11,776 Depreciation and amortization – Total segments 30,231 30,669 25,758 Depreciation and amortization – Corporate 1,654 1,672 1,806 Corporate costs 42,624 40,178 38,452 Stock-based compensation 1,129 2,259 2,259 Restructuring costs — 425 6,281 Acquisition-related cost of goods sold — 280 — Acquisition-related transaction costs — 462 213 Acquisition-related other — (2,821) — Other, net — — (1,506) Foreign currency (gains) losses, net (4,480) 826 (55) Adjusted EBITDA – Total segments $ 150,506 $ 142,318 $ 156,489 June 30, June 30, 2021 2020 Identifiable assets Animal Health $ 595,315 $ 560,663 Mineral Nutrition 67,338 65,686 Performance Products 36,847 31,016 Total segments 699,500 657,365 Corporate 141,825 126,735 Total $ 841,325 $ 784,100 The Animal Health segment includes all goodwill of the Company. Corporate assets include cash and cash equivalents, short-term investments, debt issuance costs, income tax related assets and certain other assets. The geographic location of property, plant and equipment, net was: As of June 30 2021 2020 Property, plant and equipment, net United States $ 57,892 $ 59,778 Israel 58,648 54,041 Brazil 16,114 14,771 Ireland 17,315 15,263 Other 4,737 4,256 $ 154,706 $ 148,109 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies and New Accounting Standards (Policies) | 12 Months Ended |
Jun. 30, 2021 | |
Summary of Significant Accounting Policies and New Accounting Standards | |
Principles of Consolidation and Basis of Presentation | Principles of Consolidation and Basis of Presentation The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and include the accounts of Phibro and its consolidated subsidiaries. Intercompany balances and transactions have been eliminated from the consolidated financial statements. The decision whether or not to consolidate an entity requires consideration of majority voting interests, as well as effective control over the entity. We present our financial statements on the basis of our fiscal year ending June 30. All references to years in these consolidated financial statements refer to the fiscal year ending or ended on June 30 of that year. |
Risks and Uncertainties | Risks and Uncertainties The full extent to which the COVID-19 pandemic will directly or indirectly impact our business, results of operations and financial condition will depend on future developments that are uncertain. Although vaccines are now available, distribution efforts vary widely state-by-state and country-by-country. New information may continue to emerge concerning COVID-19, and the actions required to contain or treat it may affect the duration and severity of the pandemic. The pandemic may have significant economic impacts on customers, suppliers and markets. The pandemic may affect our future revenues, expenses, reserves and allowances, manufacturing operations and employee-related costs. Our financial statements include estimates of the effects of COVID-19 and there may be changes to those estimates in future periods. The issue of the potential for increased bacterial resistance to certain antibiotics used in certain food-producing animals is the subject of discussions on a worldwide basis and, in certain instances, has led to government restrictions on or banning of the use of antibiotics in food-producing animals. The sale of antibiotics and antibacterials is a material portion of our business. Should product bans or restrictions, public perception, competition or other developments result in restrictions on the sale of such products, it could have a material adverse effect on our financial position, results of operations and cash flows. An outbreak of disease carried by food animals, which could lead to the widespread death or precautionary destruction of food animals as well as reduced consumption and demand for animal protein, could adversely affect demand for our products. Such occurrences could have a material adverse effect on our financial condition, results of operations and cash flows. 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. We have significant assets in Israel, Brazil and other locations outside of the United States and a significant portion of our sales and earnings are attributable to operations conducted abroad. Our assets, results of operations and future prospects are subject to currency exchange fluctuations and restrictions, energy shortages, other economic developments, political or social instability in some countries, and uncertainty of, and governmental control over, commercial rights, which could result in a material adverse effect on our financial position, results of operations and cash flows. We are subject to environmental laws and regulations governing the use, storage, handling, generation, treatment, emission, release, discharge and disposal of certain materials and wastes, the remediation of contaminated soil and groundwater, the manufacture, sale and use of regulated materials, including pesticides, and the health and safety of employees. As such, the nature of our current and former operations and those of our subsidiaries expose Phibro and our subsidiaries to the risk of claims with respect to such matters. |
Use of Estimates | Use of Estimates The Company’s consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (GAAP). Preparation of these financial statements requires management to make certain estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses and related disclosures. Actual results could differ from these estimates. Estimates are used when accounting for the valuation of intangible assets, depreciation and amortization periods of long-lived and intangible assets, recoverability of long-lived and intangible assets and goodwill, realizability of deferred income tax assets, sales discounts, rebates, allowances and incentives, contingencies, employee compensation and actuarial assumptions related to our pension plans. We regularly evaluate our estimates and assumptions using historical experience and other factors. Our estimates are based on complex judgments, probabilities and assumptions that we believe to be reasonable. |
Revenue Recognition | Revenue Recognition We recognize revenue from product sales when control of the products has transferred to the customer, typically when title and risk of loss transfer to the customer. Certain of our businesses have terms where control of the underlying product transfers to the customer on shipment, while others have terms where control transfers to the customer on delivery. Revenue reflects the total consideration to which we expect to be entitled in exchange for delivery of products or services, net of variable consideration. Variable consideration includes customer programs and incentive offerings, including pricing arrangements, rebates and other volume-based incentives. We record reductions to revenue for estimated variable consideration at the time we record the sale. Our estimates for variable consideration reflect the amount by which we expect variable consideration to effect the revenue recognized. Such estimates are generally based on contractual terms and historical experience, and are adjusted to reflect future expectations as new information becomes available. Historically, we have not had significant adjustments to our estimates of variable compensation. 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. The associated costs are considered fulfillment activities and are included in costs of goods sold in the consolidated statements of operations when the related revenue is recognized. Net sales exclude value-added and other taxes based on sales. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash equivalents include highly liquid investments with maturities of three months or less when purchased. Cash and cash equivalents held at financial institutions may at times exceed insured amounts. We believe we mitigate such risk by investing in or through major financial institutions. |
Short-term Investments | Short-term Investments Short-term investments include highly liquid investments with maturities greater than three months and less than one year at the time of purchase. We classify these investments as held to maturity and we record the related interest income as earned. We determine the appropriate balance sheet classification at the time of purchase and at each balance sheet date. Investments held at financial institutions may at times exceed insured amounts. We believe we mitigate such risk by investing in or through major financial institutions. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts Trade accounts receivable are recorded at the invoiced amount and do not bear interest. We grant credit terms in the normal course of business and generally do not require collateral or other security to support credit sales. Our ten largest customers represented, in aggregate, approximately The allowance for doubtful accounts is our best estimate of the credit losses in existing accounts receivable. We monitor the financial performance and creditworthiness of our customers so that we can properly assess and respond to changes in their credit profile. We also monitor domestic and international economic conditions for the potential effect on our customers. Past due balances are reviewed individually for collectability. Account balances are charged against the allowance when we determine it is probable the receivable will not be recovered. |
Inventories | Inventories Inventories are valued at the lower of cost or net realizable value. Cost is determined principally under weighted average and standard cost methods, which approximate first-in, first-out (FIFO) cost. Obsolete and unsalable inventories, if any, are reflected at estimated net realizable value. Inventory costs include materials, direct labor and manufacturing overhead. |
Property, Plant and Equipment | Property, Plant and Equipment Property, plant and equipment are stated at cost. Depreciation is charged to results of operations using the straight-line method two three for machinery and equipment. We capitalize costs that extend the useful life or productive capacity of an asset. Repair and maintenance costs are expensed as incurred. In the case of disposals, the assets and related accumulated depreciation are removed from the accounts, and the net amounts, less proceeds from disposal, are included in the consolidated statements of operations. |
Leases | Leases We determine at the inception of an arrangement whether the arrangement contains a lease. If an arrangement contains a lease, we assess the lease term when the underlying asset is available for use (“lease commencement”). Individual lease terms reflect the non-cancellable period of the lease, reasonably certain renewal periods and consideration of termination options. We determine the lease classification as either operating or financing at lease commencement, which governs the pattern of expense recognition and presentation in our consolidated financial statements. Our current lease portfolio only includes operating leases. We recognize a right-of-use (“ROU”) asset and a corresponding lease liability at lease commencement for leases with terms exceeding twelve months. Short-term leases with terms of twelve months or less are not recognized on the consolidated balance sheet and lease payments are recognized on a straight-line basis over the term. The values of the ROU assets and lease liabilities are calculated based on the present value of the fixed payment obligations over the lease term, using our incremental borrowing rate (“IBR”), determined at lease commencement. The IBR reflects the rate of interest we would expect to pay on a secured basis to borrow an amount equal to the lease payments under similar terms. The IBR incorporates the term and economic environment of the respective lease arrangements. We have elected to account for lease and non-lease components together as a single lease component and include fixed payment obligations related to such non-lease components in the measurement of ROU assets and lease liabilities. Fixed lease payments are recognized on a straight-line basis over the lease term. Variable lease payments can include index-based lease payments, real estate taxes, maintenance costs, utilization charges and other non-lease services paid to lessors and are not determinable at lease commencement. Variable lease payments are not included in the measurement of ROU assets and lease liabilities and are recognized in the period incurred. |
Capitalized Software Costs | Capitalized Software Costs We capitalize costs to obtain, develop and implement software for internal use. Amounts paid to third parties and costs of internal employees who are directly associated with the software project are also capitalized, depending on the stage of development. We expense software costs that do not meet the capitalization criteria. Capitalized software costs are included in property, plant and equipment on the consolidated balance sheets and are amortized on a straight-line three |
Debt Issuance Costs | Debt Issuance Costs Costs and original issue discounts or premiums related to issuance or modification of our debt are deferred on the consolidated balance sheet and amortized over the lives of the respective debt instruments. Amortization of debt issuance costs is included in interest expense in the consolidated statements of operations. |
Business Combinations | 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. 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. We typically utilize third-party valuation specialists to assist us in determining fair values of significant tangible and intangible assets and contingent consideration. 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. Significant estimates and assumptions inherent in the valuations reflect consideration of other marketplace participants and include the amount and timing of future cash flows, specifically the expected revenue growth rate applied to the cash flows. Unanticipated market or macroeconomic events and circumstances could affect the accuracy or validity of the estimates and assumptions. 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. Intangible assets associated with acquired in-process research and development activities (“IPR&D”) are not amortized until a product is available for sale and regulatory approval is obtained. |
Long-Lived Assets and Goodwill | Long-Lived Assets and Goodwill We periodically review our long-lived and amortizable intangible assets for impairment and assess whether significant events or changes in business circumstances indicate that the carrying value of the assets may not be recoverable. Such circumstances may include a significant decrease in the market price of an asset, a significant adverse change in the manner in which the asset is being used or in its physical condition or a history of operating or cash flow losses associated with the use of an asset. We recognize an impairment loss when the carrying amount of an asset exceeds the anticipated future undiscounted cash flows expected to result from the use of the asset and its eventual disposition. The amount of the impairment loss is the excess of the asset’s carrying value over its fair value. 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. We periodically review our indefinite-lived intangible assets associated with acquired IPR&D for impairment and assess whether significant events or changes in business circumstances indicate that the carrying value of the assets may not be recoverable. We recognize an impairment loss when the carrying amount of an asset exceeds the anticipated future discounted cash flows expected to result from the use of the asset and its eventual disposition. The amount of the impairment loss is the excess of the asset’s carrying value over its fair value. We assess IPR&D for impairment annually during our fourth quarter, or more frequently if impairment indicators exist. 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 our fourth quarter, or more frequently if impairment indicators exist. Impairment exists when the carrying amount of goodwill exceeds its implied fair value. 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, 2021, we tested goodwill using a qualitative approach and determined goodwill was not impaired. We have not recorded any goodwill impairment charges in the periods included in the consolidated financial statements. |
Foreign Currency Translation | Foreign Currency Translation We generally use local currency as the functional currency to measure the financial position and results of operations of each of our international subsidiaries. We translate assets and liabilities of these operations at the exchange rates in effect at the balance sheet date. We translate income statement accounts at the average rates of exchange prevailing during the period. Translation adjustments that arise from the use of differing exchange rates from period to period are included as a component of accumulated other comprehensive income (loss) in stockholders’ equity.Certain of our Israeli operations have designated the U.S. dollar as their functional currency. Gains and losses arising from re-measurement of local currency accounts into U.S. dollars are included in determining net income. |
Comprehensive Income | Comprehensive Income Comprehensive income consists of net income and the changes in: (i) the fair value of derivative instruments that qualify for hedge accounting; (ii) foreign currency translation adjustments; (iii) unrecognized net pension gains (losses); and (iv) the related (provision) benefit for income taxes. |
Derivative Financial Instruments | Derivative Financial Instruments We record all derivative financial instruments on the consolidated balance sheets at fair value. Changes in the fair value of derivatives are recorded in results of operations or other comprehensive income (loss), depending on whether a derivative is designated and effective as part of a hedge transaction and, if so, the type of hedge transaction. Gains and losses on derivative instruments designated and effective as part of a hedge transaction are included in the results of operations in the periods in which operations are affected by the underlying hedged item. From time to time, we use certain derivative instruments to mitigate the risk associated with certain economic factors, such as exchange rates and interest rates, which may potentially affect our future cash flows. As of June 30, 2021, we used (i) foreign currency option contracts to mitigate certain exposures related to changes in foreign currency exchange rates on forecasted inventory purchases, and (ii) interest rate swaps on $300,000 of notional principal to manage future cash flow exposure resulting from variable interest rates on that amount of debt. To qualify a derivative as a hedge, we document the nature and relationships between hedging instruments and hedged items, the prospective effectiveness of the hedging instrument as well as the ultimate effectiveness, the risk-management objectives, the strategies for undertaking the various hedge transactions and the methods of assessing hedge effectiveness. We do not engage in trading or other speculative uses of financial instruments. |
Environmental Liabilities | Environmental Liabilities Expenditures for ongoing compliance with environmental regulations are expensed or capitalized as appropriate. We capitalize expenditures made to extend the useful life or productive capacity of an asset, including expenditures that prevent future environmental contamination. Other expenditures are expensed as incurred and are recorded in selling, general and administrative expenses in the consolidated statements of operations. We record the expense and related liability in the period an environmental assessment indicates remedial efforts are probable and the costs can be reasonably estimated. Estimates of the liability are based upon currently available facts, existing technology and presently enacted laws and regulations taking into consideration the likely effects of inflation and other societal and economic factors. All available evidence is considered, including prior experience in remediation of contaminated sites, other companies’ experiences and data released by the U.S. Environmental Protection Agency and other organizations. The estimated liabilities are not discounted. We record anticipated recoveries under existing insurance contracts if probable. |
Income Taxes | Income Taxes The provision for income taxes includes U.S. federal, state, and foreign income taxes and foreign withholding taxes. Our annual effective income tax rate is determined based on our income, statutory tax rates and tax planning opportunities available in the various jurisdictions in which we operate and the tax effects of items treated differently for tax purposes than for financial reporting purposes. Tax law requires certain items be included in the tax return at different times than the items are reflected in the financial statements. Some of these differences are permanent, such as expenses that are not deductible in our tax return, and some differences are temporary, reversing over time, such as depreciation expense. These temporary differences give rise to deferred tax assets and liabilities. Deferred tax assets generally represent the tax effect of items that can be used as a tax deduction or credit in future years for which we have already recorded the tax benefit in our income statement. Deferred tax liabilities generally represent the tax effect of items recorded as tax expense in our income statement for which payment has been deferred, the tax effect of expenditures for which a deduction has already been taken in our tax return but has not yet been recognized in our income statement, and the tax effect of assets recorded at fair value in business combinations for which there was no corresponding tax basis adjustment. The recognition and measurement of a tax position is based on management’s best judgment given the facts, circumstances and information available at the reporting date. Inherent in determining our annual effective income tax rate are judgments regarding business plans, planning opportunities and expectations about future outcomes. Realization of certain deferred tax assets, primarily net operating loss carryforwards, is dependent upon generating sufficient future taxable income in the appropriate jurisdiction prior to the expiration of the carryforward periods. We establish valuation allowances for deferred tax assets when the amount of expected future taxable income is not likely to support the use of the deduction or credit. We may take tax positions that management believes are supportable, but are potentially subject to successful challenge by the applicable taxing authority in the jurisdictions where we operate. 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. Because there are a number of estimates and assumptions inherent in calculating the various components of our income tax provision, future events such as changes in tax legislation, the geographic mix of earnings, completion of tax audits or earnings repatriation plans could have an effect on those estimates and our effective income tax rate. |
Advertising | Advertising Advertising and marketing costs are expensed as incurred and are reflected in selling, general and administrative expenses. |
Research and Development Expenditures | Research and Development Expenditures Research and development expenditures are expensed as incurred and are recorded in selling, general and administrative expenses in the consolidated statements of operations. Most of our manufacturing facilities have scientists and technicians on staff involved in product development, quality assurance and providing technical services to customers. Research, development and technical service efforts are conducted at various facilities. Our animal health research and development activities relate to: fermentation development and microbiological strain improvement; vaccine development; chemical synthesis and formulation development; nutritional specialties development; and ethanol-related products. |
Stock-Based Compensation | Stock-Based Compensation We recognize expense for stock-based compensation to employees, including grants of stock options and restricted stock units, over the requisite service period based on the grant date fair value of the awards. We determine the fair value of stock options and restricted stock units using the Black-Scholes option-pricing model and the Monte Carlo simulation model, respectively. Each model uses historical and current market data to estimate the fair value. The models incorporate various assumptions such as the risk-free interest rate, expected volatility, expected dividend yield and expected life of the awards. |
Net Income per Share and Weighted Average Shares | Net Income per Share and Weighted Average Shares Basic net income per share is calculated by dividing net income by the weighted average number of common shares outstanding during the reporting period. Diluted net income per share is calculated by dividing net income by the weighted average number of common shares outstanding during the reporting period after giving effect to potential dilutive common shares resulting from the assumed exercise of stock options and vesting of restricted stock units. All common share equivalents were included in the calculation of diluted net income per share in the periods included in the consolidated financial statements. For the Year Ended June 30 2021 2020 2019 Net income $ 54,385 $ 33,552 $ 54,713 Weighted average number of shares – basic 40,473 40,454 40,412 Dilutive effect of stock options and restricted stock units 31 50 111 Weighted average number of shares – diluted 40,504 40,504 40,523 Net income per share basic $ 1.34 $ 0.83 $ 1.35 diluted $ 1.34 $ 0.83 $ 1.35 |
New Accounting Standards | New Accounting Standards Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) 2020-04 and 2021-01, Reference Rate Reform (Topic 848) ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes ASU 2018-14, Compensation — Retirement Benefits — Defined Benefit Plans — General (Topic 715-20): Disclosure Framework — Changes to the Disclosure Requirements for Defined Benefit Plans |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies and New Accounting Standards (Tables) | 12 Months Ended |
Jun. 30, 2021 | |
Summary of Significant Accounting Policies and New Accounting Standards | |
Schedule of net income per share and weighted average shares | For the Year Ended June 30 2021 2020 2019 Net income $ 54,385 $ 33,552 $ 54,713 Weighted average number of shares – basic 40,473 40,454 40,412 Dilutive effect of stock options and restricted stock units 31 50 111 Weighted average number of shares – diluted 40,504 40,504 40,523 Net income per share basic $ 1.34 $ 0.83 $ 1.35 diluted $ 1.34 $ 0.83 $ 1.35 |
Acquisition (Tables)
Acquisition (Tables) | 12 Months Ended |
Jun. 30, 2021 | |
Acquisition | |
Summary of preliminary fair values of the acquired assets and liabilities | Working capital, net $ 2,366 Property, plant and equipment 2,005 Definite-lived intangible assets 32,400 Goodwill 25,331 Net assets acquired $ 62,102 |
Statements of Operations-Addi_2
Statements of Operations-Additional Information (Tables) | 12 Months Ended |
Jun. 30, 2021 | |
Statements of Operations-Additional Information | |
Schedule of revenues disaggregated by major product category and geographic region | Net Sales by Product Type For the Year Ended June 30 2021 2020 2019 Animal Health MFAs and other $ 330,017 $ 322,300 $ 350,468 Nutritional specialties 142,760 129,264 113,215 Vaccines 72,939 75,340 68,291 Total Animal Health $ 545,716 $ 526,904 $ 531,974 Mineral Nutrition 220,560 214,412 233,782 Performance Products 67,074 59,038 62,239 Total $ 833,350 $ 800,354 $ 827,995 Net Sales by Region For the Year Ended June 30 2021 2020 2019 United States $ 494,889 $ 471,938 $ 480,101 Latin America and Canada 166,325 158,939 152,380 Europe, Middle East and Africa 114,131 112,179 105,365 Asia Pacific 58,005 57,298 90,149 Total $ 833,350 $ 800,354 $ 827,995 |
Schedule of additional information of statements of operations | Additional Information For the Year Ended June 30 2021 2020 2019 Interest expense, net Term loan $ 7,951 $ 7,751 $ 8,553 Revolving credit facility 3,649 5,317 3,748 Amortization of debt issuance costs and debt discount 833 882 882 Refinancing expense 1,020 — — Other 265 663 494 Interest expense 13,718 14,613 13,677 Interest (income) (838) (1,757) (1,901) $ 12,880 $ 12,856 $ 11,776 For the Year Ended June 30 2021 2020 2019 Depreciation and amortization Depreciation of property, plant and equipment $ 23,165 $ 23,250 $ 21,423 Amortization of intangible assets 8,715 8,869 6,092 Amortization of other assets 5 222 49 $ 31,885 $ 32,341 $ 27,564 For the Year Ended June 30 2021 2020 2019 Research and development expense $ 17,759 $ 13,738 $ 12,093 |
Schedule of amortization of intangible assets | Amortization of intangible assets as of June 30, 2021, is expected to be: For the Year Ended June 30 2022 $ 8,628 2023 8,607 2024 8,427 2025 6,773 2026 5,823 Thereafter 24,024 Total $ 62,282 |
Balance Sheets-Additional Inf_2
Balance Sheets-Additional Information (Tables) | 12 Months Ended |
Jun. 30, 2021 | |
Balance Sheets Additional Information | |
Schedule of additional information of balance sheets | . As of June 30 2021 2020 Accounts receivable, net Trade accounts receivable $ 150,659 $ 130,462 Allowance for doubtful accounts (3,807) (3,940) $ 146,852 $ 126,522 As of June 30 2021 2020 2019 Allowance for doubtful accounts Balance at beginning of period $ 3,940 $ 4,442 $ 6,257 Provision for bad debts 105 230 (201) Effect of changes in exchange rates 26 (304) 38 Bad debt write-offs (264) (428) (1,652) Balance at end of period $ 3,807 $ 3,940 $ 4,442 As of June 30 2021 2020 Inventories Raw materials $ 59,775 $ 73,837 Work-in-process 12,738 8,881 Finished goods 143,799 113,941 $ 216,312 $ 196,659 As of June 30 2021 2020 Property, plant and equipment, net Land $ 9,994 $ 9,796 Buildings and improvements 80,408 69,444 Machinery and equipment 287,355 267,805 377,757 347,045 Accumulated depreciation (223,051) (198,936) $ 154,706 $ 148,109 Weighted- Average Useful Life As of June 30 (Years) 2021 2020 Intangibles, net Cost Technology 12 $ 85,016 $ 85,016 Product registrations, marketing and distribution rights 9 17,882 17,795 Customer relationships 12 31,115 31,089 Trade names, trademarks and other 5 3,857 3,857 137,870 137,757 Accumulated amortization Technology (42,083) (35,859) Product registrations, marketing and distribution rights (17,862) (17,770) Customer relationships (12,588) (10,336) Trade names, trademarks and other (3,055) (2,795) (75,588) (66,760) $ 62,282 $ 70,997 As of June 30 2021 2020 Goodwill Balance at beginning of period $ 52,679 $ 27,348 Osprey acquisition — 25,331 Balance at end of period $ 52,679 $ 52,679 As of June 30 2021 2020 Other assets ROU operating lease assets $ 32,962 $ 22,873 Deferred income taxes 9,861 11,430 Deposits 5,663 5,158 Insurance investments 5,964 5,801 Equity method investments 4,141 4,219 Derivative instruments 2,696 — U.S. pension plan 1,184 — Indemnification asset — 3,000 Debt issuance costs 1,811 1,021 Other 8,467 6,976 $ 72,749 $ 60,478 As of June 30 2021 2020 Accrued expenses and other current liabilities Employee related $ 35,375 $ 25,825 Current operating lease liabilities 6,618 6,439 Commissions and rebates 6,312 5,782 Professional fees 4,380 5,766 Income and other taxes 6,107 3,821 Derivative instruments 3,486 5,757 Contingent consideration 4,840 — Restructuring costs 735 2,314 Insurance-related 1,176 1,272 Other 17,350 15,421 $ 86,379 $ 72,397 Liability balance at June 30, 2020 $ 2,860 Payments (2,125) Liability balance at June 30, 2021 $ 735 As of June 30 2021 2020 Other liabilities Long-term operating lease liabilities $ 28,003 $ 17,276 Long-term and deferred income taxes 6,646 11,680 Supplemental retirement benefits, deferred compensation and other 8,382 8,067 International retirement plans 5,345 5,499 U.S. pension plan — 3,563 Derivative instruments — 7,691 Contingent consideration — 4,840 Restructuring costs — 546 Other long-term liabilities 7,594 11,239 $ 55,970 $ 70,401 As of June 30 2021 2020 Accumulated other comprehensive income (loss) Derivative instruments $ (790) $ (13,448) Foreign currency translation adjustment (100,095) (103,738) Unrecognized net pension losses (19,973) (22,571) Benefit for income taxes on derivative instruments 97 3,256 Benefit for incomes taxes on long-term intercompany investments 8,166 8,166 Provision for income taxes on net pension losses (2,698) (2,050) $ (115,293) $ (130,385) |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Jun. 30, 2021 | |
Debt | |
Schedule of long term debt | As of June 30 2021 2020 2021 Term A Loan due April 2026 $ 298,125 $ — 2017 Term A Loan due June 2022 — 218,750 Unamortized debt issuance costs (1,040) (743) 297,085 218,007 Less: current maturities (9,375) (18,750) $ 287,710 $ 199,257 |
Schedule of aggregate maturities of long term debt | For the Years Ending June 30 2022 $ 9,375 2023 15,000 2024 16,875 2025 24,375 2026 232,500 Total $ 298,125 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Jun. 30, 2021 | |
Leases | |
Summary of the ROU assets and the related lease liabilities recorded on the consolidated balance sheet | The following table summarizes the ROU assets and the related lease liabilities recorded on the consolidated balance sheet: As of June 30, 2021 2020 Balance Sheet Classification Assets: Operating lease ROU assets $ 32,962 $ 22,873 Other Assets Liabilities: Current portion 6,618 6,439 Accrued expenses and Non-current portion 28,003 17,276 Other liabilities Total operating lease liabilities $ 34,621 $ 23,715 |
Summary of other supplemental information | The following tables include other supplemental information: For the Year Ended June 30 2021 2020 Operating cash flows used for ROU operating leases $ 8,292 $ 7,696 Right of use assets obtained in exchange for new operating lease liabilities $ 16,665 $ 11,017 As of June 30 2021 2020 Weighted average remaining lease term (in years) - ROU operating leases 8.42 6.49 Weighted average discount rate - ROU operating leases 4.04 % 4.40 % |
Summary of the composition of net lease expense | The following table summarizes the composition of net lease expense: For the Year Ended June 30 2021 2020 Operating lease expense $ 7,989 $ 7,570 Variable lease expense 1,176 1,304 Short-term lease expense 873 802 Total lease expense $ 10,038 $ 9,676 |
Summary of maturities of future lease liabilities | At June 30, 2021, maturities of future lease liabilities were: For the Years Ending June 30, 2022 $ 7,733 2023 5,828 2024 4,616 2025 3,567 2026 2,996 2027 and thereafter 16,561 Total lease payments 41,301 Less: interest 6,680 Total operating lease liabilities $ 34,621 |
Common Stock, Preferred Stock_2
Common Stock, Preferred Stock and Dividends (Tables) | 12 Months Ended |
Jun. 30, 2021 | |
Common Stock, Preferred Stock and Dividends | |
Schedule of preferred shares and common shares | As of June 30 2021 2020 2021 2020 Authorized Shares Par value Issued and outstanding shares Preferred stock 16,000,000 16,000,000 $ 0.0001 — — Common stock – Class A 300,000,000 300,000,000 $ 0.0001 20,337,574 20,287,574 Common stock – Class B 30,000,000 30,000,000 $ 0.0001 20,166,034 20,166,034 |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 12 Months Ended |
Jun. 30, 2021 | |
Employee Benefit Plans | |
Schedule of changes in projected benefit obligation, plan assets and the funded status | For the Year Ended June 30 2021 2020 Change in projected benefit obligation Projected benefit obligation at beginning of year $ 79,353 $ 68,527 Interest cost 1,682 2,112 Benefits paid (2,260) (2,000) Actuarial (gain) / loss (860) 10,714 Projected benefit obligation at end of year $ 77,915 $ 79,353 For the Year Ended June 30 2021 2020 Change in plan assets Fair value of plan assets at beginning of year $ 75,791 $ 64,593 Actual return on plan assets 4,838 10,821 Employer contributions 730 2,377 Benefits paid (2,260) (2,000) Fair value of plan assets at end of year $ 79,099 $ 75,791 Asset (Liability) Funded status at end of year $ 1,184 $ (3,562) |
Schedule of accumulated other comprehensive (income) loss related to the pension plan | For the Year Ended June 30 2021 2020 Accumulated other comprehensive income (loss) related to pension plan Balance at beginning of period $ (22,571) $ (20,050) Amortization of net actuarial loss and prior service costs 560 515 Current period net actuarial gain (loss) 2,038 (3,036) Net change 2,598 (2,521) Balance at end of period $ (19,973) $ (22,571) |
Schedule of net periodic pension expense | For the Year Ended June 30 2021 2020 2019 Interest cost on benefit obligation $ 1,682 $ 2,112 $ 2,407 Expected return on plan assets (3,660) (3,144) (2,842) Amortization of net actuarial loss and prior service costs 560 515 465 Net periodic pension (income) expense $ (1,418) $ (517) $ 30 |
Schedule of significant actuarial assumptions | For the Year Ended June 30 2021 2020 2019 Discount rate for interest cost 2.2 % 2.2 % 3.1 % Expected rate of return on plan assets 4.4 % 4.9 % 4.9 % Discount rate for year-end benefit obligation 2.9 % 2.8 % 3.6 % |
Schedule of estimated future benefit payments, including benefits attributable to future service | For the Year Ended June 30 2022 $ 3,146 2023 3,392 2024 3,575 2025 3,712 2026 3,830 2027 – 2031 20,414 |
Schedule of weighted-average asset allocation of plan assets | Target Allocation Percentage of Plan Assets For the Year Ended June 30 2022 2021 2020 Debt securities 65% - 85% 71% 66% Equity securities 10% - 30% 21% 27% Global asset allocation/risk parity(1) 0% - 15% 7% 5% Other 0% - 10% 1% 2% (1) The global asset allocation/risk parity category consists of a variety of asset classes including, but not limited to, global bonds, global equities, real estate and commodities. |
Schedule of fair values of the company's plan assets by asset category | Fair Value Measurements Using As of June 30, 2021 Level 1 Level 2 Level 3 Total Cash and cash equivalents $ 386 $ — $ — $ 386 Common-collective funds Global large cap equities — 13,201 3,816 17,017 Fixed income securities — 56,414 — 56,414 Global asset allocations/risk parity — 2,016 — 2,016 Mutual funds Global asset allocations/risk parity 3,206 — — 3,206 Other Other — — 60 60 $ 3,592 $ 71,631 $ 3,876 $ 79,099 Fair Value Measurements Using As of June 30, 2020 Level 1 Level 2 Level 3 Total Cash and cash equivalents $ 1,812 $ — $ — $ 1,812 Common-collective funds Global large cap equities — 16,678 4,038 20,716 Fixed income securities — 49,902 — 49,902 Global asset allocations/risk parity — 1,667 — 1,667 Other Global asset allocations/risk parity — — 1,669 1,669 Other — — 25 25 $ 1,812 $ 68,247 $ 5,732 $ 75,791 |
Schedule of summary of the changes in the fair value of level 3 assets | Change in Fair Value Level 3 assets 2021 2020 Balance at beginning of period $ 5,732 $ 5,649 Redemptions (3,236) (49) Purchases 300 200 Change in fair value 1,080 (68) Balance at end of period $ 3,876 $ 5,732 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Jun. 30, 2021 | |
Income Taxes | |
Schedule of income (loss) before income taxes | For the Year Ended June 30 2021 2020 2019 Domestic $ 12,684 $ (3,142) $ 2,331 Foreign 53,784 58,654 69,174 Income before income taxes $ 66,468 $ 55,512 $ 71,505 |
Schedule of components of the provision for income taxes | For the Year Ended June 30 2021 2020 2019 Current provision (benefit): Federal $ 99 $ (1,271) $ (459) State and local 887 401 102 Foreign 13,280 14,705 16,603 Total current provision 14,266 13,835 16,246 Deferred provision (benefit): Federal 291 5,226 858 State and local (110) 696 432 Foreign (2,663) 218 (691) Change in valuation allowance–foreign 299 1,985 (53) Total deferred provision (benefit) (2,183) 8,125 546 Provision for income taxes $ 12,083 $ 21,960 $ 16,792 |
Schedule of reconciliations of the Federal statutory rate to the Company's effective tax rate | For the Year Ended June 30 2021 2020 2019 Federal income tax rate 21.0 % 21.0 % 21.0 % State and local taxes, net of federal benefit 0.8 1.7 0.6 Foreign income tax rates 4.2 3.6 4.1 Changes in uncertain tax positions (6.8) 5.2 (1.0) Global Intangible Low-Taxed Income 1.3 6.2 0.8 Recognition of federal and foreign tax credits (2.1) (0.9) (2.5) Change in valuation allowance 0.5 3.6 — Other (0.7) (0.8) 0.5 Effective tax rate 18.2 % 39.6 % 23.5 % |
Schedule of the tax effects of significant temporary differences that comprise deferred tax assets and liabilities | As of June 30 2021 2020 Deferred tax assets: Employee related accruals $ 6,337 $ 5,703 Inventory 2,094 726 Environmental remediation 765 974 Net operating loss carry forwards–domestic 1,522 1,618 Net operating loss carry forwards–foreign 5,517 5,221 Operating lease liabilities 8,312 5,732 Other 4,672 6,340 29,219 26,314 Valuation allowance (3,709) (3,403) 25,510 22,911 Deferred tax liabilities: Property, plant and equipment and intangible assets (7,550) (6,108) Operating lease ROU assets (8,251) (5,657) Other (793) (921) (16,594) (12,686) Net deferred tax asset $ 8,916 $ 10,225 |
Schedule of deferred taxes included in the line items of the consolidated balance sheets | As of June 30 2021 2020 Other assets $ 9,861 $ 11,430 Other liabilities (945) (1,205) $ 8,916 $ 10,225 |
Schedule of the valuation allowance for deferred tax assets | 2021 2020 2019 Balance at beginning of period $ 3,403 $ 808 $ 861 Provision for income taxes 306 2,595 (53) Balance at end of period $ 3,709 $ 3,403 $ 808 |
Schedule of the reconciliation of the beginning and ending amount of unrecognized tax benefits | As of June 30 2021 2020 2019 Unrecognized tax benefits–beginning of period $ 9,507 $ 6,343 $ 7,000 Tax position changes–current period 1,873 2,850 528 Tax position changes–prior periods, including settlements with tax authorities (5,354) 108 (317) Lapse of statute of limitations (1,109) — (1,053) Translation 394 206 185 Unrecognized tax benefits–end of period 5,311 9,507 6,343 Interest and penalties–end of period 391 969 750 Total liabilities related to uncertain tax positions $ 5,702 $ 10,476 $ 7,093 |
Derivatives (Tables)
Derivatives (Tables) | 12 Months Ended |
Jun. 30, 2021 | |
Derivatives | |
Schedule of significant outstanding derivatives employed to manage market risk and designated as cash flow hedges | As of June 30 2021 2020 Other assets Brazil Real options, net $ 355 $ — Interest rate swaps 2,341 — Accrued expense and other current liabilities Brazil Real options, net (150) (2,477) Interest rate swaps (3,336) (3,280) Other liabilities Brazil Real options, net — (1,297) Interest rate swaps — (6,394) Total Fair Value Brazil Real options, net 205 (3,774) Interest rate swaps (995) (9,674) Notional amounts of the derivatives as of the balance sheet date were: As of June 30 2021 Brazil Real call options R$ 114,000 Brazil Real put options R$ 114,000 Interest rate swaps $ 300,000 The consolidated statements of operations and statements of other comprehensive income (“OCI”) for the years ended June 30, 2021 and 2020 included the effects of derivatives as follows: For the Year Ended June 30 2021 2020 Brazil Real options, net Expense recorded in consolidated statement of operations $ 1,093 $ 115 Consolidated statement of operations - total cost of goods sold 561,973 543,472 (Income) expense recorded in OCI (3,979) 4,157 Interest rate swaps Expense recorded in consolidated statements of operations 3,317 310 Consolidated statement of operations - total interest expense, net 12,880 12,856 (Income) expense recorded in OCI (8,679) 8,697 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Jun. 30, 2021 | |
Fair Value Measurements | |
Schedule of fair value of derivative instruments based upon pricing models | 2021 2020 As of June 30 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Short-term investments $ 43,000 $ — $ — $ 55,000 $ — $ — Foreign currency derivatives asset (liability) $ — $ 205 $ — $ — $ (3,774) $ — Interest rate swaps $ — $ (995) $ — $ — $ (9,674) $ — Contingent consideration on acquisitions $ — $ — $ (4,840) $ — $ — $ (4,840) |
Business Segments (Tables)
Business Segments (Tables) | 12 Months Ended |
Jun. 30, 2021 | |
Business Segments | |
Schedule of information regarding reportable segments | For the Year Ended June 30 2021 2020 2019 Net sales Animal Health $ 545,716 $ 526,904 $ 531,974 Mineral Nutrition 220,560 214,412 233,782 Performance Products 67,074 59,038 62,239 Total segments $ 833,350 $ 800,354 $ 827,995 Depreciation and amortization Animal Health $ 25,839 $ 26,287 $ 22,312 Mineral Nutrition 2,690 2,522 2,319 Performance Products 1,702 1,860 1,127 Total segments $ 30,231 $ 30,669 $ 25,758 Adjusted EBITDA Animal Health $ 123,953 $ 123,106 $ 136,049 Mineral Nutrition 17,116 14,678 15,712 Performance Products 9,437 4,534 4,728 Total segments $ 150,506 $ 142,318 $ 156,489 Reconciliation of income before income taxes to Adjusted EBITDA Income before income taxes $ 66,468 $ 55,512 $ 71,505 Interest expense, net 12,880 12,856 11,776 Depreciation and amortization – Total segments 30,231 30,669 25,758 Depreciation and amortization – Corporate 1,654 1,672 1,806 Corporate costs 42,624 40,178 38,452 Stock-based compensation 1,129 2,259 2,259 Restructuring costs — 425 6,281 Acquisition-related cost of goods sold — 280 — Acquisition-related transaction costs — 462 213 Acquisition-related other — (2,821) — Other, net — — (1,506) Foreign currency (gains) losses, net (4,480) 826 (55) Adjusted EBITDA – Total segments $ 150,506 $ 142,318 $ 156,489 June 30, June 30, 2021 2020 Identifiable assets Animal Health $ 595,315 $ 560,663 Mineral Nutrition 67,338 65,686 Performance Products 36,847 31,016 Total segments 699,500 657,365 Corporate 141,825 126,735 Total $ 841,325 $ 784,100 |
Schedule of geographic information regarding property, plant and equipment, net | As of June 30 2021 2020 Property, plant and equipment, net United States $ 57,892 $ 59,778 Israel 58,648 54,041 Brazil 16,114 14,771 Ireland 17,315 15,263 Other 4,737 4,256 $ 154,706 $ 148,109 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies and New Accounting Standards - Calculation of diluted net income per share (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
Summary of Significant Accounting Policies and New Accounting Standards | |||
Net income | $ 54,385 | $ 33,552 | $ 54,713 |
Weighted average number of shares - basic (in shares) | 40,473 | 40,454 | 40,412 |
Dilutive effect of stock options and restricted stock units | 31 | 50 | 111 |
Weighted average number of shares - diluted (in shares) | 40,504 | 40,504 | 40,523 |
Net income per share | |||
basic (in dollars per share) | $ 1.34 | $ 0.83 | $ 1.35 |
diluted (in dollars per share) | $ 1.34 | $ 0.83 | $ 1.35 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies and New Accounting Standards - Estimated useful life and derivative financial instruments (Detail Textuals 1) - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2021 | Jul. 31, 2022 | |
Significant Accounting Policies And New Accounting Standards [Line Items] | ||
Derivative, Notional Amount | $ 300,000 | |
Interest Rate Swaps | ||
Significant Accounting Policies And New Accounting Standards [Line Items] | ||
Derivative, Notional Amount | $ 300,000 | |
Buildings and improvements | ||
Significant Accounting Policies And New Accounting Standards [Line Items] | ||
Depreciation methods | straight-line basis | |
Buildings and improvements | Minimum | ||
Significant Accounting Policies And New Accounting Standards [Line Items] | ||
Estimated useful lives | P2Y | |
Buildings and improvements | Maximum | ||
Significant Accounting Policies And New Accounting Standards [Line Items] | ||
Estimated useful lives | P30Y | |
Machinery and equipment | ||
Significant Accounting Policies And New Accounting Standards [Line Items] | ||
Depreciation methods | straight-line basis | |
Machinery and equipment | Minimum | ||
Significant Accounting Policies And New Accounting Standards [Line Items] | ||
Estimated useful lives | P3Y | |
Machinery and equipment | Maximum | ||
Significant Accounting Policies And New Accounting Standards [Line Items] | ||
Estimated useful lives | P10Y | |
Computer Software | ||
Significant Accounting Policies And New Accounting Standards [Line Items] | ||
Depreciation methods | straight-line basis | |
Computer Software | Minimum | ||
Significant Accounting Policies And New Accounting Standards [Line Items] | ||
Estimated useful lives | P3Y | |
Computer Software | Maximum | ||
Significant Accounting Policies And New Accounting Standards [Line Items] | ||
Estimated useful lives | P7Y |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies and New Accounting Standards - Additional information (Details) - Accounts Receivable - Customer Concentration Risk - Ten Largest Customers - customer | 12 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Significant Accounting Policies And New Accounting Standards [Line Items] | ||
Number of largest customers | 10 | 10 |
Percentage of accounts receivable | 16.00% | 19.00% |
Acquisition - Acquired Assets a
Acquisition - Acquired Assets and Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Jun. 30, 2020 | Aug. 31, 2019 | Jun. 30, 2019 |
The preliminary fair values of the acquired assets and liabilities as of the acquisition date | ||||
Goodwill | $ 52,679 | $ 52,679 | $ 27,348 | |
Osprey Biotechnics, Inc. ("Osprey") | ||||
The preliminary fair values of the acquired assets and liabilities as of the acquisition date | ||||
Working capital, net | $ 2,366 | |||
Property, plant and equipment | 2,005 | |||
Definite-lived intangible assets | 32,400 | |||
Goodwill | 25,331 | |||
Net assets acquired | $ 62,102 |
Acquisition - Additional Inform
Acquisition - Additional Information (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Aug. 31, 2019 | Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
Business Acquisition [Line Items] | ||||
Aggregate cash payment | $ 54,549 | $ 9,838 | ||
Definite-lived intangible assets | $ 62,282 | 70,997 | ||
Liability for the estimated contingent consideration | $ 0 | 4,840 | ||
Customer relationships | ||||
Business Acquisition [Line Items] | ||||
Amortization periods | 12 years | |||
Osprey Biotechnics, Inc. ("Osprey") | ||||
Business Acquisition [Line Items] | ||||
Aggregate cash payment | $ 54,549 | |||
Minimum contingent consideration payment | 4,840 | |||
Total consideration | 62,102 | |||
Liability for the estimated contingent consideration | $ 7,553 | |||
Adjusted future additional payment | 2,988 | |||
Acquisition-related accrued compensation | 462 | $ 213 | ||
Goodwill expected to be deductible for tax purposes | 25,331 | |||
Osprey Biotechnics, Inc. ("Osprey") | Customer relationships | ||||
Business Acquisition [Line Items] | ||||
Definite-lived intangible assets | 18,900 | |||
Osprey Biotechnics, Inc. ("Osprey") | Developed products | ||||
Business Acquisition [Line Items] | ||||
Definite-lived intangible assets | 12,200 | |||
Osprey Biotechnics, Inc. ("Osprey") | Tradename | ||||
Business Acquisition [Line Items] | ||||
Definite-lived intangible assets | $ 1,300 | |||
Osprey Biotechnics, Inc. ("Osprey") | Minimum | ||||
Business Acquisition [Line Items] | ||||
Amortization periods | 5 years | |||
Osprey Biotechnics, Inc. ("Osprey") | Maximum | ||||
Business Acquisition [Line Items] | ||||
Amortization periods | 12 years |
Statements of Operations (Detai
Statements of Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
Statements Of Operations Additional Information [Line Items] | |||
Total | $ 833,350 | $ 800,354 | $ 827,995 |
United States | |||
Statements Of Operations Additional Information [Line Items] | |||
Total | 494,889 | 471,938 | 480,101 |
Latin America and Canada | |||
Statements Of Operations Additional Information [Line Items] | |||
Total | 166,325 | 158,939 | 152,380 |
Europe, Middle East and Africa | |||
Statements Of Operations Additional Information [Line Items] | |||
Total | 114,131 | 112,179 | 105,365 |
Asia Pacific | |||
Statements Of Operations Additional Information [Line Items] | |||
Total | 58,005 | 57,298 | 90,149 |
Animal Health | |||
Statements Of Operations Additional Information [Line Items] | |||
Total | 545,716 | 526,904 | 531,974 |
Animal Health | MFAs and other | |||
Statements Of Operations Additional Information [Line Items] | |||
Total | 330,017 | 322,300 | 350,468 |
Animal Health | Nutritional Specialties | |||
Statements Of Operations Additional Information [Line Items] | |||
Total | 142,760 | 129,264 | 113,215 |
Animal Health | Vaccines | |||
Statements Of Operations Additional Information [Line Items] | |||
Total | 72,939 | 75,340 | 68,291 |
Mineral Nutrition | |||
Statements Of Operations Additional Information [Line Items] | |||
Total | 220,560 | 214,412 | 233,782 |
Performance Products | |||
Statements Of Operations Additional Information [Line Items] | |||
Total | $ 67,074 | $ 59,038 | $ 62,239 |
Statements of Operations - Inte
Statements of Operations - Interest Expense and Depreciation and Amortization (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
Interest expense, net | |||
Amortization of debt issuance costs | $ 833 | $ 882 | $ 882 |
Refinancing costs | 1,020 | ||
Other | 265 | 663 | 494 |
Interest expense | 13,718 | 14,613 | 13,677 |
Interest (income) | (838) | (1,757) | (1,901) |
Interest expense, net | 12,880 | 12,856 | 11,776 |
Depreciation and amortization | |||
Depreciation of property, plant and equipment | 23,165 | 23,250 | 21,423 |
Amortization of intangible assets | 8,715 | 8,869 | 6,092 |
Amortization of other assets | 5 | 222 | 49 |
Depreciation and amortization | 31,885 | 32,341 | 27,564 |
Term Loan | |||
Interest expense, net | |||
Interest expense | 7,951 | 7,751 | 8,553 |
Revolving credit facility (the "Revolver") | |||
Interest expense, net | |||
Interest expense | $ 3,649 | $ 5,317 | $ 3,748 |
Statements of Operations - Amor
Statements of Operations - Amortization of intangible assets (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Jun. 30, 2020 |
Statements of Operations-Additional Information | ||
2022 | $ 8,628 | |
2023 | 8,607 | |
2024 | 8,427 | |
2025 | 6,773 | |
2026 | 5,823 | |
Thereafter | 24,024 | |
Total | $ 62,282 | $ 70,997 |
Statements of Operations - Addi
Statements of Operations - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
Statements Of Operations Additional Information [Line Items] | |||
Deferred revenue | $ 3,674 | $ 4,570 | |
Current deferred revenue, included in accrued expense and other current liabilities | 1,560 | 1,109 | |
Amortization of capitalized software costs | 1,254 | 1,038 | $ 1,217 |
Research and development expenditures | $ 17,759 | $ 13,738 | $ 12,093 |
Customer | Maximum | |||
Statements Of Operations Additional Information [Line Items] | |||
Payment term | 120 days | ||
Average worldwide collection period for accounts receivable | 70 days | ||
Customer | Minimum | |||
Statements Of Operations Additional Information [Line Items] | |||
Payment term | 30 days | ||
Average worldwide collection period for accounts receivable | 60 days |
Balance Sheets-Additional Inf_3
Balance Sheets-Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
Accounts receivable, net | |||
Trade accounts receivable | $ 150,659 | $ 130,462 | |
Allowance for doubtful accounts | (3,807) | (3,940) | $ (4,442) |
Trade accounts receivable, net | 146,852 | 126,522 | |
Allowance for doubtful accounts | |||
Balance at beginning of period | 3,940 | 4,442 | 6,257 |
Provision for bad debts | 105 | 230 | (201) |
Effect of changes in exchange rates | 26 | (304) | 38 |
Bad debt write-offs | (264) | (428) | (1,652) |
Balance at end of period | 3,807 | 3,940 | $ 4,442 |
Inventories | |||
Raw materials | 59,775 | 73,837 | |
Work-in-process | 12,738 | 8,881 | |
Finished goods | 143,799 | 113,941 | |
Inventory, net | 216,312 | 196,659 | |
Property, plant and equipment, net | |||
Property, plant and equipment, gross | 377,757 | 347,045 | |
Accumulated depreciation | (223,051) | (198,936) | |
Property, plant and equipment, net | 154,706 | 148,109 | |
Land | |||
Property, plant and equipment, net | |||
Property, plant and equipment, gross | 9,994 | 9,796 | |
Buildings and improvements | |||
Property, plant and equipment, net | |||
Property, plant and equipment, gross | 80,408 | 69,444 | |
Machinery and equipment | |||
Property, plant and equipment, net | |||
Property, plant and equipment, gross | $ 287,355 | $ 267,805 |
Balance Sheets-Additional Inf_4
Balance Sheets-Additional Information (Details 1) - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Intangibles, net : Cost | ||
Intangibles | $ 137,870 | $ 137,757 |
Accumulated amortization | (75,588) | (66,760) |
Total | 62,282 | 70,997 |
Goodwill roll-forward | ||
Balance at beginning of period | 52,679 | 27,348 |
Osprey acquisition | 0 | 25,331 |
Balance at end of period | 52,679 | 52,679 |
Other assets | ||
ROU operating lease assets | 32,962 | 22,873 |
Deferred income taxes | 9,861 | 11,430 |
Deposits | 5,663 | 5,158 |
Insurance investments | 5,964 | 5,801 |
Equity method investments | 4,141 | 4,219 |
Derivative instruments | 2,696 | 0 |
U.S. pension plan | 1,184 | 0 |
Indemnification asset | 0 | 3,000 |
Debt issuance costs | 1,811 | 1,021 |
Other | 8,467 | 6,976 |
Other assets, total | 72,749 | 60,478 |
Accrued expenses and other current liabilities | ||
Employee-related | 35,375 | 25,825 |
Current operating lease liabilities | 6,618 | 6,439 |
Commissions and rebates | 6,312 | 5,782 |
Professional fees | 4,380 | 5,766 |
Income and other taxes | 6,107 | 3,821 |
Derivative instruments | 3,486 | 5,757 |
Contingent consideration | 4,840 | 0 |
Restructuring costs | 735 | 2,314 |
Insurance-related | 1,176 | 1,272 |
Other | 17,350 | 15,421 |
Accrued expenses and other current liabilities, total | 86,379 | 72,397 |
Restructuring Reserve | ||
Liability balance at June 30, 2020 | 2,860 | |
Payments | (2,125) | |
Liability balance at June 30,2021 | 735 | 2,860 |
Other liabilities | ||
Long-term operating lease liabilities | 28,003 | 17,276 |
Long term and deferred income taxes | 6,646 | 11,680 |
Supplemental retirement benefits, deferred compensation and other | 8,382 | 8,067 |
International retirement plans | 5,345 | 5,499 |
U.S. pension plan | 0 | 3,563 |
Derivative instruments | 0 | 7,691 |
Contingent consideration | 0 | 4,840 |
Restructuring costs | 0 | 546 |
Other long term liabilities | 7,594 | 11,239 |
Other liabilities, total | 55,970 | 70,401 |
Accumulated other comprehensive income (loss) | ||
Derivative instruments | (790) | (13,448) |
Foreign currency translation adjustment | (100,095) | (103,738) |
Unrecognized net pension losses | (19,973) | (22,571) |
Benefit for income taxes on derivative instruments | 97 | 3,256 |
Benefit for income taxes on long-term intercompany investments | 8,166 | 8,166 |
Provision for income taxes on net pension losses | (2,698) | (2,050) |
Accumulated other comprehensive income (loss) | (115,293) | (130,385) |
Technology-related assets | ||
Intangibles, net : Cost | ||
Intangibles | 85,016 | 85,016 |
Accumulated amortization | $ (42,083) | (35,859) |
Estimated useful life of definite-lived intangible assets | 12 years | |
Product registrations, marketing and distribution rights | ||
Intangibles, net : Cost | ||
Intangibles | $ 17,882 | 17,795 |
Accumulated amortization | $ (17,862) | (17,770) |
Estimated useful life of definite-lived intangible assets | 9 years | |
Customer relationships | ||
Intangibles, net : Cost | ||
Intangibles | $ 31,115 | 31,089 |
Accumulated amortization | $ (12,588) | (10,336) |
Estimated useful life of definite-lived intangible assets | 12 years | |
Trade names, trademarks and other | ||
Intangibles, net : Cost | ||
Intangibles | $ 3,857 | 3,857 |
Accumulated amortization | $ (3,055) | $ (2,795) |
Estimated useful life of definite-lived intangible assets | 5 years |
Balance Sheets-Additional Inf_5
Balance Sheets-Additional Information (Detail Textuals) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2021 | |
Additional Information Of Balance Sheet [Line Items] | |||
Accumulated depreciation on internal-use software costs | $ 3,517 | $ 4,236 | |
Construction-in-progress | 25,582 | 23,659 | |
Equity Method Investments | 4,219 | 4,141 | |
Animal Health | |||
Additional Information Of Balance Sheet [Line Items] | |||
Equity Method Investments | $ 2,740 | ||
Restructuring costs | $ 425 | $ 6,281 | |
Charges related to termination of a contract manufacturing agreement | 3,500 | ||
Employee separation costs | $ 2,781 |
Debt - Summary of long-term deb
Debt - Summary of long-term debt (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Jun. 30, 2020 |
Debt Instrument [Line Items] | ||
Unamortized debt issuance costs | $ (1,040) | $ (743) |
Long-term debt after debt issuance costs | 297,085 | 218,007 |
Less: current maturities | (9,375) | (18,750) |
Long-term debt | 287,710 | 199,257 |
Term A Loan due April 2026 | ||
Debt Instrument [Line Items] | ||
Term A Loan due | $ 298,125 | |
Term A Loan due June 2022 | ||
Debt Instrument [Line Items] | ||
Term A Loan due | $ 218,750 |
Debt - Aggregate maturities of
Debt - Aggregate maturities of long-term debt (Details) $ in Thousands | Jun. 30, 2021USD ($) |
Debt | |
2022 | $ 9,375 |
2023 | 15,000 |
2024 | 16,875 |
2025 | 24,375 |
2026 | 232,500 |
Total | $ 298,125 |
Debt - Additional information (
Debt - Additional information (Details) - USD ($) $ in Thousands | 12 Months Ended | |||||
Jun. 30, 2021 | Jul. 31, 2022 | Apr. 30, 2021 | Jun. 30, 2020 | Mar. 31, 2020 | Jul. 31, 2017 | |
Debt Instrument [Line Items] | ||||||
Outstanding borrowings | $ 95,000 | $ 169,000 | ||||
Derivative, Notional Amount | $ 300,000 | |||||
Interest Rate Swaps | ||||||
Debt Instrument [Line Items] | ||||||
Derivative, Notional Amount | $ 300,000 | |||||
Term A Loans And Revolving Credit Facility [Member] | Minimum | ||||||
Debt Instrument [Line Items] | ||||||
Credit agreement required covenant-earnings to borrowing ratio | 3.00:1.00 | |||||
Term A Loans And Revolving Credit Facility [Member] | Maximum | ||||||
Debt Instrument [Line Items] | ||||||
Credit agreement required covenant-earnings to borrowing ratio | 4.00:1.00 | |||||
Term A Loans And Revolving Credit Facility [Member] | Israel subsidiaries | ||||||
Debt Instrument [Line Items] | ||||||
Maturity dates | March 2022 | |||||
Outstanding borrowings | $ 0 | |||||
Aggregate available credit facilities | $ 13,435 | |||||
Term A Loans And Revolving Credit Facility [Member] | one-month LIBOR | ||||||
Debt Instrument [Line Items] | ||||||
Basis for effective rate | a Eurodollar rate determined by reference to LIBOR with a term as selected by the Company | |||||
Term A Loans And Revolving Credit Facility [Member] | one-month LIBOR | Israel subsidiaries | ||||||
Debt Instrument [Line Items] | ||||||
Percentage of basis spread on variable rate | 2.25% | |||||
2021 Credit Agreement | Term A Loan due June 2022 | ||||||
Debt Instrument [Line Items] | ||||||
Aggregate principal amount | $ 300,000 | |||||
Percentage of interest rate | 2.98% | |||||
2021 Credit Agreement | Revolving credit facility (the "Revolver") | ||||||
Debt Instrument [Line Items] | ||||||
Maximum borrowing capacity | $ 250,000 | |||||
Current borrowings under the Revolver | $ 95,000 | |||||
Outstanding borrowings | 2,709 | |||||
Aggregate available credit facilities | $ 152,291 | |||||
Weighted-average interest rates | 2.21% | 3.17% | ||||
Percentage of interest rate | 1.86% | |||||
2021 Credit Agreement | Team A Loan | ||||||
Debt Instrument [Line Items] | ||||||
Weighted-average interest rates | 3.27% | 3.38% | ||||
2021 Credit Agreement | Term A Loans And Revolving Credit Facility [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Maturity dates | April 2026 | |||||
Covenant requirement, permitted leverage ratio | a maximum First Lien Net Leverage Ratio of 4.00:1.00 and (ii) a minimum interest coverage ratio of 3.00:1.00, each calculated on a trailing four-quarter basis | |||||
Debt instrument, covenant compliance | we were in compliance with the financial covenants | |||||
2021 Credit Agreement | Term A Loans And Revolving Credit Facility [Member] | Federal funds effective rate | ||||||
Debt Instrument [Line Items] | ||||||
Percentage of basis spread on variable rate | 0.50% | |||||
2021 Credit Agreement | Term A Loans And Revolving Credit Facility [Member] | Base rate loans | ||||||
Debt Instrument [Line Items] | ||||||
Basis for effective rate | a base rate determined by reference to the highest of (a) the rate as publicly announced from time to time by Bank of America as its “prime rate,” (b) the federal funds effective rate plus 0.50% and (c) the LIBOR daily floating rate plus 1.00%. | |||||
Covenant requirement, permitted leverage ratio | equal to or greater than 3.50:1.00; (ii) less than 3.50:1.00 but greater than or equal to 2.25:1.00; or, (iii) less than 2.25:1.00, the 2021 Credit Facilities | |||||
Interest rate, description | 1.00%; 0.75%; and, 0.50% | |||||
2021 Credit Agreement | Term A Loans And Revolving Credit Facility [Member] | one-month LIBOR | ||||||
Debt Instrument [Line Items] | ||||||
Covenant requirement, permitted leverage ratio | equal to or greater than 3.50:1.00; (ii) less than 3.50:1.00 but greater than or equal to 2.25:1.00; or, (iii) less than 2.25:1.00, the 2021 Credit Facilities | |||||
Interest rate, description | 2.00%; 1.75%; and, 1.50% | |||||
Percentage of basis spread on variable rate | 1.00% | |||||
July 2017 Agreement [Member] | Interest Rate Swaps | ||||||
Debt Instrument [Line Items] | ||||||
Derivative, Notional Amount | $ 150,000 | |||||
Percentage of interest rate | 1.8325% | |||||
March 2020 Agreement [Member] | Interest Rate Swaps | ||||||
Debt Instrument [Line Items] | ||||||
Derivative, Notional Amount | $ 150,000 | $ 150,000 | ||||
Percentage of interest rate | 0.62% |
Leases - ROU assets and the rel
Leases - ROU assets and the related lease liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Jun. 30, 2020 |
Related Party Transaction [Line Items] | ||
Operating lease ROU assets included in Other Assets | $ 32,962 | $ 22,873 |
Operating lease ROU assets included in Other Assets | us-gaap:OtherAssetsNoncurrent | us-gaap:OtherAssetsNoncurrent |
Current portion included in Accrued expenses and other current liabilities | $ 6,618 | $ 6,439 |
Current portion included in Accrued expenses and other current liabilities | us-gaap:AccruedLiabilitiesCurrent | us-gaap:AccruedLiabilitiesCurrent |
Non-current portion included in Other liabilities | $ 28,003 | $ 17,276 |
Non-current portion included in Other liabilities | Other liabilities | Other liabilities |
Total operating lease liabilities | $ 34,621 | $ 23,715 |
Maximum | ||
Related Party Transaction [Line Items] | ||
Remaining non-cancelable lease terms | 15 years | |
Minimum | ||
Related Party Transaction [Line Items] | ||
Remaining non-cancelable lease terms | 1 year |
Leases - Composition of net lea
Leases - Composition of net lease cost (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Leases | ||
Operating lease expense | $ 7,989 | $ 7,570 |
Variable lease expense | 1,176 | 1,304 |
Short-term lease expense | 873 | 802 |
Total lease expense | $ 10,038 | $ 9,676 |
Leases - Other supplemental inf
Leases - Other supplemental information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Leases | ||
Operating cash flows used for ROU operating leases | $ 8,292 | $ 7,696 |
Right of use assets obtained in exchange for new operating lease liabilities | $ 16,665 | $ 11,017 |
Weighted average remaining lease term (in years) - ROU operating leases | 8 years 5 months 1 day | 6 years 5 months 26 days |
Weighted average discount rate - ROU operating leases | 4.04% | 4.40% |
Leases - Maturities of future l
Leases - Maturities of future lease liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Jun. 30, 2020 |
Leases | ||
2022 | $ 7,733 | |
2023 | 5,828 | |
2024 | 4,616 | |
2025 | 3,567 | |
2026 | 2,996 | |
2027 and thereafter | 16,561 | |
Total lease payments | 41,301 | |
Less: interest | 6,680 | |
Total operating lease liabilities | $ 34,621 | $ 23,715 |
Common Stock, Preferred Stock_3
Common Stock, Preferred Stock and Dividends - Summary of preferred and common shares (Details) - $ / shares | Jun. 30, 2021 | Jun. 30, 2020 |
Class of Stock [Line Items] | ||
Preferred stock, shares authorized | 16,000,000 | 16,000,000 |
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock-Class A | ||
Class of Stock [Line Items] | ||
Common stock, shares authorized | 300,000,000 | 300,000,000 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares issued | 20,337,574 | 20,287,574 |
Common stock, shares outstanding | 20,337,574 | 20,287,574 |
Common stock-Class B | ||
Class of Stock [Line Items] | ||
Common stock, shares authorized | 30,000,000 | 30,000,000 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares issued | 20,166,034 | 20,166,034 |
Common stock, shares outstanding | 20,166,034 | 20,166,034 |
Common Stock, Preferred Stock_4
Common Stock, Preferred Stock and Dividends - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
Class of Stock [Line Items] | |||
Dividends paid | $ 19,430 | $ 19,418 | $ 18,592 |
BFI Co., LLC ("BFI") | |||
Class of Stock [Line Items] | |||
BFI ownership percentage at which the remaining Class B shares would convert to Class A | 15.00% | ||
Common stock-Class A | |||
Class of Stock [Line Items] | |||
Dividends paid | $ 19,430 | ||
Common stock-Class B | |||
Class of Stock [Line Items] | |||
Common stock holder entitled to vote per share | 10 votes | ||
Dividends paid | $ 19,430 | ||
Class B common stock converted into Class A common shares | 0 | 0 |
Stock Incentive Plan - Addition
Stock Incentive Plan - Additional Information (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | May 31, 2018 | Mar. 31, 2008 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of shares available for grant | 0 | |||||
Option | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock-based compensation expense current year | $ 0 | |||||
Option | 2008 Incentive Plan (the "Incentive Plan") | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock options, stock awards and other incentives authorized amount | 6,630,000 | |||||
Option | 2008 Incentive Plan (the "Incentive Plan") | Common stock-Class A | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of shares available for grant | 5,081,620 | |||||
Restricted Stock Units (RSUs) | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of shares granted by PAHC's Compensation Committee | 250,000 | |||||
Stock-based compensation expense current year | $ 1,129 | $ 2,259 | $ 2,259 | |||
Performance-Based RSUs | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of shares available for grant | 200,000 | |||||
Number of shares vested | 0 | |||||
Time-Based RSUs | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of shares available for grant | 50,000 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
Certain relatives of Jack C. Bendheim | Compensation and benefit for services provided | |||
Related Party Transaction [Line Items] | |||
Aggregate compensation and benefits | $ 1,660 | $ 1,553 | $ 1,969 |
Employee Benefit Plans - Change
Employee Benefit Plans - Changes in projected benefit obligation, plan assets and funded status (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
Change in projected benefit obligation | |||
Projected benefit obligation at beginning of year | $ 79,353 | $ 68,527 | |
Interest cost | 1,682 | 2,112 | $ 2,407 |
Benefits paid | (2,260) | (2,000) | |
Actuarial gain / (loss) | (860) | 10,714 | |
Projected benefit obligation at end of year | 77,915 | 79,353 | 68,527 |
Change in plan assets | |||
Fair value of plan assets at beginning of year | 75,791 | 64,593 | |
Actual return on plan assets | 4,838 | 10,821 | |
Employer contributions | 730 | 2,377 | |
Benefits paid | (2,260) | (2,000) | |
Fair value of plan assets at end of year | 79,099 | 75,791 | $ 64,593 |
Asset (Liability) Funded status at end of year | $ 1,184 | $ (3,562) |
Employee Benefit Plans - Chan_2
Employee Benefit Plans - Change in Accumulated Other Comprehensive (Income) Loss (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
Accumulated Other Comprehensive (Income) Loss Related to Pension Plan | |||
Balance at beginning of period | $ (22,571) | $ (20,050) | |
Amortization of net actuarial loss and prior service costs | 560 | 515 | |
Current period net actuarial gain (loss) | 2,038 | (3,036) | |
Net change | 2,598 | (2,521) | $ (1,837) |
Balance at end of period | $ (19,973) | $ (22,571) | $ (20,050) |
Employee Benefit Plans - Net pe
Employee Benefit Plans - Net periodic pension expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
Employee Benefit Plans | |||
Interest cost on benefit obligation | $ 1,682 | $ 2,112 | $ 2,407 |
Expected return on plan assets | (3,660) | (3,144) | (2,842) |
Amortization of net actuarial loss and prior service costs | 560 | 515 | 465 |
Net periodic pension (income) expense | $ (1,418) | $ (517) | $ 30 |
Employee Benefit Plans - Signif
Employee Benefit Plans - Significant actuarial assumptions for plan (Details) | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
Employee Benefit Plans | |||
Discount rate for interest cost | 2.20% | 2.20% | 3.10% |
Expected rate of return on plan assets | 4.40% | 4.90% | 4.90% |
Discount rate for year-end benefit obligation | 2.90% | 2.80% | 3.60% |
Employee Benefit Plans - Estima
Employee Benefit Plans - Estimated future benefit payments including benefits attributable to future service (Details) $ in Thousands | Jun. 30, 2021USD ($) |
Employee Benefit Plans | |
2022 | $ 3,146 |
2023 | 3,392 |
2024 | 3,575 |
2025 | 3,712 |
2026 | 3,830 |
2027-2031 | $ 20,414 |
Employee Benefit Plans - Plan's
Employee Benefit Plans - Plan's target asset allocations and weighted average asset allocation of plan assets (Details) | Jun. 30, 2021 | Jun. 30, 2020 |
Debt securities | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Percentage of Plan Assets | 71.00% | 66.00% |
Equity securities | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Percentage of Plan Assets | 21.00% | 27.00% |
Common-collective funds - Global asset allocation/risk parity | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Percentage of Plan Assets | 7.00% | 5.00% |
Other | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Percentage of Plan Assets | 1.00% | 2.00% |
Minimum | Debt securities | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Target allocation for 2022 | 65.00% | |
Minimum | Equity securities | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Target allocation for 2022 | 10.00% | |
Minimum | Common-collective funds - Global asset allocation/risk parity | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Target allocation for 2022 | 0.00% | |
Minimum | Other | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Target allocation for 2022 | 0.00% | |
Maximum | Debt securities | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Target allocation for 2022 | 85.00% | |
Maximum | Equity securities | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Target allocation for 2022 | 30.00% | |
Maximum | Common-collective funds - Global asset allocation/risk parity | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Target allocation for 2022 | 15.00% | |
Maximum | Other | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Target allocation for 2022 | 10.00% |
Employee Benefit Plans - Fair v
Employee Benefit Plans - Fair values of plan assets by asset category (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 |
Defined Benefit Plan Disclosure [Line Items] | |||
Fair values of plan assets by asset category | $ 79,099 | $ 75,791 | $ 64,593 |
Level 1 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair values of plan assets by asset category | 3,592 | 1,812 | |
Level 2 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair values of plan assets by asset category | 71,631 | 68,247 | |
Level 3 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair values of plan assets by asset category | 3,876 | 5,732 | $ 5,649 |
Cash and cash equivalents | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair values of plan assets by asset category | 386 | 1,812 | |
Cash and cash equivalents | Level 1 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair values of plan assets by asset category | 386 | 1,812 | |
Cash and cash equivalents | Level 2 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair values of plan assets by asset category | 0 | 0 | |
Cash and cash equivalents | Level 3 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair values of plan assets by asset category | 0 | 0 | |
Common-collective funds - Global large cap equities | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair values of plan assets by asset category | 17,017 | 20,716 | |
Common-collective funds - Global large cap equities | Level 1 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair values of plan assets by asset category | 0 | 0 | |
Common-collective funds - Global large cap equities | Level 2 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair values of plan assets by asset category | 13,201 | 16,678 | |
Common-collective funds - Global large cap equities | Level 3 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair values of plan assets by asset category | 3,816 | 4,038 | |
Common-collective funds - Fixed income securities | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair values of plan assets by asset category | 56,414 | 49,902 | |
Common-collective funds - Fixed income securities | Level 1 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair values of plan assets by asset category | 0 | 0 | |
Common-collective funds - Fixed income securities | Level 2 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair values of plan assets by asset category | 56,414 | 49,902 | |
Common-collective funds - Fixed income securities | Level 3 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair values of plan assets by asset category | 0 | 0 | |
Common-collective funds - Global asset allocations/risk parity | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair values of plan assets by asset category | 2,016 | 1,667 | |
Common-collective funds - Global asset allocations/risk parity | Level 1 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair values of plan assets by asset category | 0 | 0 | |
Common-collective funds - Global asset allocations/risk parity | Level 2 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair values of plan assets by asset category | 2,016 | 1,667 | |
Common-collective funds - Global asset allocations/risk parity | Level 3 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair values of plan assets by asset category | 0 | 0 | |
Other - Global asset allocations/risk parity | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair values of plan assets by asset category | 3,206 | 1,669 | |
Other - Global asset allocations/risk parity | Level 1 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair values of plan assets by asset category | 3,206 | 0 | |
Other - Global asset allocations/risk parity | Level 2 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair values of plan assets by asset category | 0 | 0 | |
Other - Global asset allocations/risk parity | Level 3 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair values of plan assets by asset category | 0 | 1,669 | |
Other | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair values of plan assets by asset category | 60 | 25 | |
Other | Level 1 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair values of plan assets by asset category | 0 | 0 | |
Other | Level 2 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair values of plan assets by asset category | 0 | 0 | |
Other | Level 3 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair values of plan assets by asset category | $ 60 | $ 25 |
Employee Benefit Plans - Chan_3
Employee Benefit Plans - Change in Fair Value of Level 3 Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Change in Fair Value Level 3 assets | ||
Fair value of plan assets at beginning of year | $ 75,791 | $ 64,593 |
Fair value of plan assets at end of year | 79,099 | 75,791 |
Level 3 | ||
Change in Fair Value Level 3 assets | ||
Fair value of plan assets at beginning of year | 5,732 | 5,649 |
Redemptions | (3,236) | (49) |
Purchases | 300 | 200 |
Change in fair value | 1,080 | (68) |
Fair value of plan assets at end of year | $ 3,876 | $ 5,732 |
Employee Benefit Plans (Details
Employee Benefit Plans (Details) $ / shares in Units, $ in Thousands | 12 Months Ended |
Jun. 30, 2021USD ($)$ / shares | |
Employee Benefit Plans | |
Amortization of unrecognized net actuarial loss during 2021 | $ 460 |
Minimum par value required for corporate bond to determine discount rate | $ 250,000 |
Cash and cash equivalents fair value assumptions input (in dollars per share) | $ / shares | $ 1 |
Employee Benefit Plans- Other e
Employee Benefit Plans- Other employee benefit plans (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
Defined Benefit Plan Disclosure [Line Items] | |||
Percentage of matching contribution | 100.00% | ||
Percentage of employee's contribution | 6.00% | ||
401(k) retirement savings plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Description of the basis for determining contributions | a matching contribution equal to 100% of the first 6.0% of an employee’s contribution; and, (ii) an additional discretionary contribution of up to 4.5% of compensation, depending on the employee’s age and years of service, provided that such contributions comply with ERISA non-discrimination requirements. Employee and Company contributions are subject to certain ERISA limitations. | ||
Defined contribution plan, employer contribution amount | $ 5,803 | $ 5,566 | $ 5,201 |
Maximum additional discretionary contribution percentage | 4.50% | ||
Supplemental executive retirement benefits, international retirement plans and other employee benefit plans | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Expenses under plan | $ 5,095 | 5,725 | $ 5,685 |
Supplemental executive retirement benefits, international retirement plans and other employee benefit plans | Other liabilities | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Pension and other postretirement benefit plans, liabilities | $ 13,827 | $ 13,666 |
Income Taxes - Income (loss) be
Income Taxes - Income (loss) before income taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
Income Taxes | |||
Domestic | $ 12,684 | $ (3,142) | $ 2,331 |
Foreign | 53,784 | 58,654 | 69,174 |
Income before income taxes | $ 66,468 | $ 55,512 | $ 71,505 |
Income Taxes - Components of pr
Income Taxes - Components of provision for income taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
Current provision (benefit): | |||
Federal | $ 99 | $ (1,271) | $ (459) |
State and local | 887 | 401 | 102 |
Foreign | 13,280 | 14,705 | 16,603 |
Total current provision | 14,266 | 13,835 | 16,246 |
Deferred provision (benefit): | |||
Federal | 291 | 5,226 | 858 |
State and local | (110) | 696 | 432 |
Foreign | (2,663) | 218 | (691) |
Total deferred provision (benefit) | (2,183) | 8,125 | 546 |
Provision for income taxes | 12,083 | 21,960 | 16,792 |
Foreign | |||
Deferred provision (benefit): | |||
Change in valuation allowance-foreign | $ 299 | $ 1,985 | $ (53) |
Income Taxes - Reconciliations
Income Taxes - Reconciliations of Federal statutory rate to effective tax rate (Details) | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
Income Taxes | |||
Federal income tax rate | 21.00% | 21.00% | 21.00% |
State and local taxes, net of federal benefit | 0.80% | 1.70% | 0.60% |
Foreign income tax rates | 4.20% | 3.60% | 4.10% |
Changes in uncertain tax positions | (6.80%) | 5.20% | (1.00%) |
Global Intangible Low-Taxed Income | 1.30% | 6.20% | 0.80% |
Recognition of federal and foreign tax credits | (2.10%) | (0.90%) | (2.50%) |
Change in valuation allowance | 0.50% | 3.60% | |
Other | (0.70%) | (0.80%) | 0.50% |
Effective tax rate | 18.20% | 39.60% | 23.50% |
Income Taxes - Tax effects of s
Income Taxes - Tax effects of significant temporary differences of deferred tax assets and liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2018 |
Deferred tax assets: | ||||
Employee related accruals | $ 6,337 | $ 5,703 | ||
Inventory | 2,094 | 726 | ||
Environmental remediation | 765 | 974 | ||
Net operating loss carry forwards-domestic | 1,522 | 1,618 | ||
Net operating loss carry forwards-foreign | 5,517 | 5,221 | ||
Operating lease liabilities | 8,312 | 5,732 | ||
Other | 4,672 | 6,340 | ||
Deferred tax assets, gross | 29,219 | 26,314 | ||
Valuation allowance | (3,709) | (3,403) | $ (808) | $ (861) |
Deferred tax assets, net of valuation allowance | 25,510 | 22,911 | ||
Deferred tax liabilities: | ||||
Property, plant and equipment and intangible assets | (7,550) | (6,108) | ||
Operating lease ROU assets | (8,251) | (5,657) | ||
Other | (793) | (921) | ||
Deferred tax liabilities, net | (16,594) | (12,686) | ||
Net deferred tax asset | $ 8,916 | $ 10,225 |
Income Taxes - Deferred taxes i
Income Taxes - Deferred taxes included in consolidated balance sheets (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Jun. 30, 2020 |
Income Tax Disclosures [Line Items] | ||
Deferred income tax assets | $ 29,219 | $ 26,314 |
Net deferred tax asset (liability) | 8,916 | 10,225 |
Other assets | ||
Income Tax Disclosures [Line Items] | ||
Deferred income tax assets | 9,861 | 11,430 |
Other liabilities | ||
Income Tax Disclosures [Line Items] | ||
Deferred income tax liabilities | $ (945) | $ (1,205) |
Income Taxes - Valuation allowa
Income Taxes - Valuation allowance for deferred tax assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
Deferred Tax Assets Valuation Allowance [Roll Forward] | |||
Balance at beginning of period | $ 3,403 | $ 808 | $ 861 |
Provision for income taxes | 306 | 2,595 | (53) |
Balance at end of period | $ 3,709 | $ 3,403 | $ 808 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of unrecognized tax benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Unrecognized tax benefits-beginning of period | $ 9,507 | $ 6,343 | $ 7,000 |
Tax position changes-current period | 1,873 | 2,850 | 528 |
Tax position changes-prior periods, including settlements with tax authorities | (5,354) | 108 | (317) |
Lapse of statute of limitations | (1,109) | 0 | (1,053) |
Translation | 394 | 206 | 185 |
Unrecognized tax benefits-end of period | 5,311 | 9,507 | 6,343 |
Interest and penalties-end of period | 391 | 969 | 750 |
Total liabilities related to uncertain tax positions | $ 5,702 | $ 10,476 | $ 7,093 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
Valuation Allowance [Line Items] | |||
Federal tax expense | $ 889 | $ 3,453 | |
Recognized interest and penalties expense (income) | $ 69 | $ 214 | $ 94 |
Federal income tax rate | 21.00% | 21.00% | 21.00% |
Cash, Cash Equivalents, and Short-term Investments | $ 91,601 | ||
State Jurisdiction | |||
Valuation Allowance [Line Items] | |||
Net operating loss carry forwards | 31,319 | ||
State net operating loss carry forwards that will expire | 13,803 | ||
State net operating loss carry forwards that do not expire | 17,516 | ||
Foreign | |||
Valuation Allowance [Line Items] | |||
Net operating loss carry forwards | $ 27,481 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) $ in Thousands | 12 Months Ended | |
Jun. 30, 2021USD ($)item | Jun. 30, 2020USD ($) | |
Commitments And Contingencies [Line Items] | ||
Number of potentially responsible parties | item | 140 | |
Maximum | ||
Commitments And Contingencies [Line Items] | ||
Term of employment and severance agreement | 15 months | |
Current And Long Term Liabilities | ||
Commitments And Contingencies [Line Items] | ||
Accrual for environmental loss contingencies | $ | $ 4,293 | $ 5,254 |
Derivatives - Company's Outstan
Derivatives - Company's Outstanding Derivatives (Details) - Cash Flow Hedging R$ in Thousands, $ in Thousands | Jun. 30, 2021USD ($) | Jun. 30, 2021BRL (R$) | Jun. 30, 2020USD ($) |
Foreign Exchange Option | Brazilian Real calls | |||
Derivative [Line Items] | |||
Notional amount | R$ | R$ 114000 | ||
Asset | $ 205 | ||
Liability | $ (3,774) | ||
Foreign Exchange Option | Brazilian Real calls | Other assets | |||
Derivative [Line Items] | |||
Asset | 355 | ||
Foreign Exchange Option | Brazilian Real calls | Accrued expenses and other current liabilities | |||
Derivative [Line Items] | |||
Liability | (150) | (2,477) | |
Foreign Exchange Option | Brazilian Real calls | Other liabilities | |||
Derivative [Line Items] | |||
Liability | (1,297) | ||
Foreign Exchange Option | Brazilian Real puts | |||
Derivative [Line Items] | |||
Notional amount | R$ | R$ 114000 | ||
Swap | Interest Rate Swaps | |||
Derivative [Line Items] | |||
Notional amount | 300,000 | ||
Liability | (995) | (9,674) | |
Swap | Interest Rate Swaps | Other assets | |||
Derivative [Line Items] | |||
Asset | 2,341 | ||
Swap | Interest Rate Swaps | Accrued expenses and other current liabilities | |||
Derivative [Line Items] | |||
Liability | $ (3,336) | (3,280) | |
Swap | Interest Rate Swaps | Brazilian Real calls | Other liabilities | |||
Derivative [Line Items] | |||
Liability | $ (6,394) |
Derivatives - Effects of Deriva
Derivatives - Effects of Derivatives (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
Derivative [Line Items] | |||
Consolidated statement of operations - total cost of goods sold | $ 561,973 | $ 543,472 | $ 563,371 |
Consolidated statement of operations - total interest expense, net | 12,880 | 12,856 | $ 11,776 |
Foreign Exchange Option | Cash Flow Hedging | Brazilian Real calls | |||
Derivative [Line Items] | |||
Expense recorded in consolidated statement of operations | 1,093 | 115 | |
Foreign Exchange Option | Cash Flow Hedging | Brazilian Real calls | Cost of Sales | |||
Derivative [Line Items] | |||
Consolidated statement of operations - total cost of goods sold | 561,973 | 543,472 | |
Foreign Exchange Option | Cash Flow Hedging | Brazilian Real calls | Other Comprehensive Income (Loss) | |||
Derivative [Line Items] | |||
(Income) expense recorded in OCI | (3,979) | 4,157 | |
Swap | Interest Rate Swaps | Cash Flow Hedging | |||
Derivative [Line Items] | |||
Expense recorded in consolidated statement of operations | 3,317 | 310 | |
Swap | Interest Rate Swaps | Cash Flow Hedging | Interest expense, net | |||
Derivative [Line Items] | |||
Consolidated statement of operations - total interest expense, net | 12,880 | 12,856 | |
Swap | Interest Rate Swaps | Cash Flow Hedging | Other Comprehensive Income (Loss) | |||
Derivative [Line Items] | |||
(Income) expense recorded in OCI | $ (8,679) | $ 8,697 |
Derivatives - Additional Inform
Derivatives - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Jun. 30, 2021 | Jul. 31, 2022 | Mar. 31, 2020 | Jul. 31, 2017 | |
Derivative [Line Items] | ||||
Derivative, Notional Amount | $ 300,000 | |||
Maximum maturity period for Foreign Currency Derivatives | Feb. 28, 2023 | |||
Interest Rate Swaps | ||||
Derivative [Line Items] | ||||
Derivative, Notional Amount | $ 300,000 | |||
Cost of Sales | ||||
Derivative [Line Items] | ||||
Realized gains related to matured contracts recorded as a component of inventory | 1,613 | |||
March 2020 Agreement [Member] | Interest Rate Swaps | ||||
Derivative [Line Items] | ||||
Derivative, Notional Amount | $ 150,000 | $ 150,000 | ||
Percentage of interest rate | 0.62% | |||
July 2017 Agreement [Member] | Interest Rate Swaps | ||||
Derivative [Line Items] | ||||
Derivative, Notional Amount | $ 150,000 | |||
Percentage of interest rate | 1.8325% |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Fair Value of Assets (Liabilities) | ||
Contingent consideration on acquisitions | $ 0 | $ (4,840) |
Level 1 | ||
Fair Value of Assets (Liabilities) | ||
Short-term investments | 43,000 | 55,000 |
Derivatives assets and liabilities | 0 | 0 |
Interest rate swap | 0 | 0 |
Contingent consideration on acquisitions | 0 | 0 |
Level 2 | ||
Fair Value of Assets (Liabilities) | ||
Short-term investments | 0 | 0 |
Derivatives assets and liabilities | 205 | (3,774) |
Interest rate swap | (995) | (9,674) |
Contingent consideration on acquisitions | 0 | 0 |
Level 3 | ||
Fair Value of Assets (Liabilities) | ||
Short-term investments | 0 | 0 |
Derivatives assets and liabilities | 0 | 0 |
Interest rate swap | 0 | 0 |
Contingent consideration on acquisitions | $ (4,840) | $ (4,840) |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Fair Value Measurements | ||
Fair value assets, transfer from level 1 to level 2 | $ 0 | $ 0 |
Fair value assets, transfer from level 2 to level 1 | 0 | 0 |
Fair value liabilities, transfer from level 1 to level 2 | 0 | 0 |
Fair value liabilities, transfer from level 2 to level 1 | 0 | 0 |
Fair value assets, transfer to and from level 3 | 0 | 0 |
Fair value liabilities, transfer to and from level 3 | $ 0 | $ 0 |
Business Segments - Segments in
Business Segments - Segments in Significant Accounting Policies (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
Segment Reporting Information | |||
Net sales | $ 833,350 | $ 800,354 | $ 827,995 |
Depreciation and amortization | 31,885 | 32,341 | 27,564 |
Reconciliation of income before income taxes to Adjusted EBITDA | |||
Income before income taxes | 66,468 | 55,512 | 71,505 |
Interest expense, net | 12,880 | 12,856 | 11,776 |
Depreciation and amortization | 31,885 | 32,341 | 27,564 |
Stock-based compensation | 1,129 | 2,259 | 2,259 |
Foreign currency (gains) losses, net | (4,480) | 826 | (55) |
Identifiable assets | 841,325 | 784,100 | |
Animal Health | |||
Segment Reporting Information | |||
Net sales | 545,716 | 526,904 | 531,974 |
Reconciliation of income before income taxes to Adjusted EBITDA | |||
Restructuring costs | 425 | 6,281 | |
Mineral Nutrition | |||
Segment Reporting Information | |||
Net sales | 220,560 | 214,412 | 233,782 |
Performance Products | |||
Segment Reporting Information | |||
Net sales | 67,074 | 59,038 | 62,239 |
Operating Segments | |||
Segment Reporting Information | |||
Net sales | 833,350 | 800,354 | 827,995 |
Depreciation and amortization | 30,231 | 30,669 | 25,758 |
Adjusted EBITDA - Total segments | 150,506 | 142,318 | 156,489 |
Reconciliation of income before income taxes to Adjusted EBITDA | |||
Income before income taxes | 66,468 | 55,512 | 71,505 |
Interest expense, net | 12,880 | 12,856 | 11,776 |
Depreciation and amortization | 30,231 | 30,669 | 25,758 |
Corporate costs | 42,624 | 40,178 | 38,452 |
Stock-based compensation | 1,129 | 2,259 | 2,259 |
Acquisition-related costs of goods sold | 0 | 280 | 0 |
Acquisition-related transaction costs | 0 | 462 | 213 |
Acquisition-related other | 0 | (2,821) | 0 |
Other, net | 0 | 0 | (1,506) |
Foreign currency (gains) losses, net | (4,480) | 826 | (55) |
Adjusted EBITDA - Total segments | 150,506 | 142,318 | 156,489 |
Identifiable assets | 699,500 | 657,365 | |
Operating Segments | Animal Health | |||
Segment Reporting Information | |||
Net sales | 545,716 | 526,904 | 531,974 |
Depreciation and amortization | 25,839 | 26,287 | 22,312 |
Adjusted EBITDA - Total segments | 123,953 | 123,106 | 136,049 |
Reconciliation of income before income taxes to Adjusted EBITDA | |||
Depreciation and amortization | 25,839 | 26,287 | 22,312 |
Adjusted EBITDA - Total segments | 123,953 | 123,106 | 136,049 |
Identifiable assets | 595,315 | 560,663 | |
Operating Segments | Mineral Nutrition | |||
Segment Reporting Information | |||
Net sales | 220,560 | 214,412 | 233,782 |
Depreciation and amortization | 2,690 | 2,522 | 2,319 |
Adjusted EBITDA - Total segments | 17,116 | 14,678 | 15,712 |
Reconciliation of income before income taxes to Adjusted EBITDA | |||
Depreciation and amortization | 2,690 | 2,522 | 2,319 |
Adjusted EBITDA - Total segments | 17,116 | 14,678 | 15,712 |
Identifiable assets | 67,338 | 65,686 | |
Operating Segments | Performance Products | |||
Segment Reporting Information | |||
Net sales | 67,074 | 59,038 | 62,239 |
Depreciation and amortization | 1,702 | 1,860 | 1,127 |
Adjusted EBITDA - Total segments | 9,437 | 4,534 | 4,728 |
Reconciliation of income before income taxes to Adjusted EBITDA | |||
Depreciation and amortization | 1,702 | 1,860 | 1,127 |
Adjusted EBITDA - Total segments | 9,437 | 4,534 | 4,728 |
Identifiable assets | 36,847 | 31,016 | |
Corporate | |||
Segment Reporting Information | |||
Depreciation and amortization | 1,654 | 1,672 | 1,806 |
Reconciliation of income before income taxes to Adjusted EBITDA | |||
Depreciation and amortization | 1,654 | 1,672 | 1,806 |
Restructuring costs | 0 | 425 | $ 6,281 |
Identifiable assets | $ 141,825 | $ 126,735 |
Business Segments (Details)
Business Segments (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Jun. 30, 2020 |
Property, plant and equipment, net | $ 154,706 | $ 148,109 |
United States | ||
Property, plant and equipment, net | 57,892 | 59,778 |
Israel | ||
Property, plant and equipment, net | 58,648 | 54,041 |
Brazil | ||
Property, plant and equipment, net | 16,114 | 14,771 |
Ireland | ||
Property, plant and equipment, net | 17,315 | 15,263 |
Other | ||
Property, plant and equipment, net | $ 4,737 | $ 4,256 |