Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Jun. 30, 2019 | Aug. 20, 2019 | Dec. 31, 2018 | |
Entity Registrant Name | PHIBRO ANIMAL HEALTH CORP | ||
Entity Central Index Key | 0001069899 | ||
Trading Symbol | pahc | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Current Fiscal Year End Date | --06-30 | ||
Entity Filer Category | Accelerated Filer | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Public Float | $ 648,379,497 | ||
Document Type | 10-K | ||
Document Period End Date | Jun. 30, 2019 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Class A common stock | |||
Entity Common Stock, Shares Outstanding | 20,287,574 | ||
Class B common stock | |||
Entity Common Stock, Shares Outstanding | 20,166,034 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | |
Income Statement [Abstract] | |||
Net sales | $ 827,995 | $ 819,982 | $ 764,281 |
Cost of goods sold | 563,371 | 553,103 | 516,038 |
Gross profit | 264,624 | 266,879 | 248,243 |
Selling, general and administrative expenses | 181,398 | 167,953 | 150,309 |
Operating income | 83,226 | 98,926 | 97,934 |
Interest expense, net | 11,776 | 11,910 | 14,906 |
Foreign currency (gains) losses, net | (55) | (1,054) | (113) |
Loss on extinguishment of debt | 0 | 0 | 2,598 |
Income before income taxes | 71,505 | 88,070 | 80,543 |
Provision for income taxes | 16,792 | 23,187 | 15,928 |
Net income | $ 54,713 | $ 64,883 | $ 64,615 |
Net income per share | |||
basic (in dollars per share) | $ 1.35 | $ 1.61 | $ 1.63 |
diluted (in dollars per share) | $ 1.35 | $ 1.61 | $ 1.61 |
Weighted average common shares outstanding | |||
basic (in shares) | 40,412 | 40,181 | 39,524 |
diluted (in shares) | 40,523 | 40,385 | 40,042 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 54,713 | $ 64,883 | $ 64,615 |
Change in fair value of derivative instruments | (5,580) | 2,300 | 31 |
Foreign currency translation adjustment | (4,127) | (23,542) | (1,652) |
Unrecognized net pension gains (losses) | (1,837) | (154) | 12,918 |
(Provision) benefit for income taxes | 1,846 | 350 | (4,949) |
Other comprehensive income (loss) | (9,698) | (21,046) | 6,348 |
Comprehensive income | $ 45,015 | $ 43,837 | $ 70,963 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2019 | Jun. 30, 2018 |
ASSETS | ||
Cash and cash equivalents | $ 57,573 | $ 29,168 |
Short-term investments | 24,000 | 50,000 |
Accounts receivable, net | 159,022 | 135,742 |
Inventories, net | 198,322 | 178,170 |
Other current assets | 27,245 | 22,381 |
Total current assets | 466,162 | 415,461 |
Property, plant and equipment, net | 140,235 | 130,108 |
Intangibles, net | 47,478 | 51,978 |
Goodwill | 27,348 | 27,348 |
Other assets | 45,448 | 46,784 |
Total assets | 726,671 | 671,679 |
LIABILITIES AND STOCKHOLDERS' EQUITY | ||
Current portion of long-term debt | 12,540 | 12,579 |
Accounts payable | 73,189 | 59,498 |
Accrued expenses and other current liabilities | 68,498 | 71,144 |
Total current liabilities | 154,227 | 143,221 |
Revolving credit facility | 96,000 | 70,000 |
Long-term debt | 217,635 | 229,802 |
Other liabilities | 42,794 | 43,702 |
Total liabilities | 510,656 | 486,725 |
Commitments and contingencies (Note 8) | ||
Common stock, par value $0.0001 per share; 300,000,000 Class A shares authorized, 20,287,574 and 19,992,204 shares issued and outstanding at June 30, 2019 and 2018, respectively; 30,000,000 Class B shares authorized, 20,166,034 and 20,365,504 shares issued and outstanding at June 30, 2019 and 2018, respectively | 4 | 4 |
Preferred stock, par value $0.0001 per share; 16,000,000 shares authorized, no shares issued and outstanding | ||
Paid-in capital | 133,266 | 129,873 |
Retained earnings | 168,926 | 131,560 |
Accumulated other comprehensive income (loss) | (86,181) | (76,483) |
Total stockholders' equity | 216,015 | 184,954 |
Total liabilities and stockholders' equity | $ 726,671 | $ 671,679 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parentheticals) - $ / shares | Jun. 30, 2019 | Jun. 30, 2018 |
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 |
Class A common stock | ||
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 | 20,287,574 | 19,992,204 |
Common stock, shares outstanding | 20,287,574 | 19,992,204 |
Class B common stock | ||
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 | 20,365,504 |
Common stock, shares outstanding | 20,166,034 | 20,365,504 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | |
OPERATING ACTIVITIES | |||
Net income | $ 54,713 | $ 64,883 | $ 64,615 |
Adjustments to reconcile net income to net cash provided (used) by operating activities: | |||
Depreciation and amortization | 27,564 | 26,943 | 26,001 |
Amortization of debt issuance costs and debt discount | 882 | 883 | 1,015 |
Stock-based compensation | 2,259 | 334 | 0 |
Acquisition-related items | 0 | 3,908 | 2,081 |
Pension settlement cost | 0 | 0 | 1,702 |
Deferred income taxes | (105) | 6,389 | (28) |
Foreign currency (gains) losses, net | (1,899) | (635) | (867) |
Other | (302) | 1,181 | 765 |
Loss on extinguishment of debt | 0 | 0 | 2,598 |
Changes in operating assets and liabilities, net of business acquisitions: | |||
Accounts receivable, net | (23,679) | (11,900) | (2,765) |
Inventories, net | (20,982) | (24,292) | 5,432 |
Other current assets | (7,173) | 134 | (3,012) |
Other assets | (299) | (152) | (1,504) |
Accounts payable | 12,092 | 2,446 | (3,119) |
Accrued expenses and other liabilities | 4,098 | (114) | 5,471 |
Net cash provided by operating activities | 47,169 | 70,008 | 98,385 |
INVESTING ACTIVITIES | |||
Purchases of short-term investments | (34,000) | (82,000) | |
Maturities of short-term investments | 60,000 | 32,000 | |
Capital expenditures | (29,891) | (18,548) | (20,880) |
Business acquisitions | (9,838) | (15,000) | |
Other, net | (404) | (1,064) | (1,062) |
Net cash used by investing activities | (14,133) | (84,612) | (21,942) |
FINANCING ACTIVITIES | |||
Revolving credit facility borrowings | 213,000 | 225,000 | 230,500 |
Revolving credit facility repayments | (187,000) | (220,000) | (234,500) |
Proceeds from long-term debt | 250,000 | ||
Payments of long-term debt, capital leases and other | (12,649) | (6,401) | (285,527) |
Issuance of acquisition note payable | 3,775 | ||
Payment of acquisition note payable | (3,775) | ||
Debt issuance costs | (3,925) | ||
Proceeds from common shares issued | 1,134 | 5,699 | 5,541 |
Dividends paid | (18,592) | (16,073) | (15,827) |
Net cash used by financing activities | (4,107) | (11,775) | (53,738) |
Effect of exchange rate changes on cash | (524) | (536) | (227) |
Net increase (decrease) in cash and cash equivalents | 28,405 | (26,915) | 22,478 |
Cash and cash equivalents at beginning of period | 29,168 | 56,083 | 33,605 |
Cash and cash equivalents at end of period | 57,573 | 29,168 | 56,083 |
Supplemental cash flow information | |||
Interest paid | 12,250 | 11,208 | 14,600 |
Income taxes paid, net | 16,215 | 15,191 | 14,762 |
Non-cash investing and financing activities | |||
Property, plant and equipment and capital lease additions | $ 2,890 | $ 8,449 | $ 1,550 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Common Stock | Preferred Stock | Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Total |
Balance at Jun. 30, 2016 | $ 4 | $ 118,299 | $ 33,962 | $ (61,785) | $ 90,480 | |
Balance (in shares) at Jun. 30, 2016 | 39,407,568 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Comprehensive income (loss) | 64,615 | 6,348 | 70,963 | |||
Exercise of stock options | 5,541 | 5,541 | ||||
Exercise of stock options (in shares) | 468,400 | |||||
Dividends declared | (15,827) | (15,827) | ||||
Balance at Jun. 30, 2017 | $ 4 | 123,840 | 82,750 | (55,437) | 151,157 | |
Balance (in shares) at Jun. 30, 2017 | 39,875,968 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Comprehensive income (loss) | 64,883 | (21,046) | 43,837 | |||
Exercise of stock options | 5,699 | 5,699 | ||||
Exercise of stock options (in shares) | 481,740 | |||||
Dividends declared | (16,073) | (16,073) | ||||
Stock-based compensation | 334 | 334 | ||||
Balance at Jun. 30, 2018 | $ 4 | $ 0 | 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] | ||||||
Adoption of new revenue standard | 1,245 | 1,245 | ||||
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 | 2,259 | 2,259 | ||||
Balance at Jun. 30, 2019 | $ 4 | $ 0 | $ 133,266 | $ 168,926 | $ (86,181) | $ 216,015 |
Balance (in shares) at Jun. 30, 2019 | 40,453,608 |
CONSOLIDATED STATEMENTS OF CH_2
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Parentheticals) - $ / shares | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 |
Statement of Stockholders' Equity [Abstract] | |||
Dividends declared per share | $ 0.46 | $ 0.40 | $ 0.40 |
Description of Business
Description of Business | 12 Months Ended |
Jun. 30, 2019 | |
Description Of Business [Abstract] | |
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, cattle, dairy 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 Standards | 12 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
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 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 Preparation of the consolidated 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. Significant estimates include 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 and value-added tax assets, legal and environmental matters 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 product 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 primarily use the most-likely amount method. 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 [24%] and 24% of accounts receivable at June 30, 2019 and 2018, respectively. The allowance for doubtful accounts is our best estimate of the probable 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 based upon the assets’ estimated useful lives, ranging from two to thirty years for buildings and improvements, and one to ten years 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. 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 basis over three to seven years. Deferred Financing 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 deferred financing costs is included in interest expense in the consolidated statements of operations. Acquisitions, Intangible Assets and Goodwill 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 is required to determine the fair value of certain tangible and intangible assets and in assigning their respective useful lives. Accordingly, we typically obtain the assistance of third-party valuation specialists for significant tangible and intangible assets. The fair values are based on available historical information and on future expectations and assumptions deemed reasonable by management, but are inherently uncertain. We typically use an income method to measure the fair value of intangible assets, which is based on forecasts of the expected future cash flows attributable to the respective assets. Significant estimates and assumptions inherent in the valuations reflect a consideration of other marketplace participants, and include the amount and timing of future cash flows (including expected growth rates and profitability), the underlying product or technology life cycles, economic barriers to entry and the discount 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 are based on factors including 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. 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. During 2017, we determined that certain intangible assets related to technology within the Animal Health segment were impaired, based on changes to future product sales assumptions, and recorded an impairment charge of $713 as a component of selling, general and administrative expenses in our consolidated statements of operations. There were no significant asset impairments and no changes in estimated remaining useful lives of our long-lived or amortizable intangible assets in 2019 or 2018. 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. During 2017, we determined that certain IPR&D within the Animal Health segment was impaired, based on changes to future product sales assumptions, and recorded an impairment charge of $1,579 as a component of selling, general and administrative expenses in our consolidated statements of operations. There were no impairment charges related to indefinite-lived intangible assets in 2019 or 2018. 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, 2019, we tested goodwill using a quantitative approach, which involved estimating fair values of reporting units using the discounted cash flow method. We 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 remeasurement 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, 2019, 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) an interest rate swap on $150 million 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. Significant judgment is required in determining our income tax provision and in evaluating our tax positions. 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, and release these allowances when it is more likely than not that these deductions or credits will be used. We operate in multiple jurisdictions with complex tax policy and regulatory environments. In certain of these jurisdictions, we may take tax positions that management believes are supportable, but are potentially subject to successful challenge by the applicable taxing authority. 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 chemists and technicians on staff involved in product development, quality assurance, quality control 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 2019 2018 2017 Net income $ 54,713 $ 64,883 $ 64,615 Weighted average number of shares–basic 40,412 40,181 39,524 Dilutive effect of stock options and restricted stock units 111 204 518 Weighted average number of shares–diluted 40,523 40,385 40,042 Net income per share basic $ 1.35 $ 1.61 $ 1.63 diluted $ 1.35 $ 1.61 $ 1.61 New Accounting Standards Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) 2018-14, Compensation—Retirement Benefits—Defined Benefit Plans—General (Topic 715-20): Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement ASU 2018-02, Income Statement—Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments ASU 2016-02, Leases (Topic 842) ASU 2014-09, Revenue from Contracts with Customers (Topic 606) The effect of initial adoption of the new standard resulted in the following changes to our consolidated balance sheet: As of July 1, 2018 Effect of Adoption Post-adoption Other current assets $ 2,100 $ 24,481 Other assets 2,325 49,109 Accrued expenses and other current liabilities 343 71,487 Other liabilities 2,837 46,539 Retained earnings $ 1,245 $ 132,805 The current year effect of the adoption of the new standard resulted in the following changes to our consolidated balance sheet and consolidated statement of operations: As of June 30, 2019 Effect of adoption As reported Other current assets $ 225 $ 27,245 Other assets 225 45,448 Other liabilities (216 ) 42,794 Retained earnings $ 666 $ 168,926 For the Year Ended June 30, 2019 Effect of adoption As reported Net sales $ 793 $ 827,995 Provision for income taxes 127 16,792 Net income $ 666 $ 54,713 For changes to our policy resulting from the adoption of ASU 2014-09, see “—Summary of Significant Accounting Policies and New Accounting Standards—Revenue Recognition.” See “Statements of Operations—Additional Information” for our disclosures regarding disaggregated revenue, deferred revenue and customer payment terms. |
Statements of Operations-Additi
Statements of Operations-Additional Information | 12 Months Ended |
Jun. 30, 2019 | |
Supplemental Income Statement Elements [Abstract] | |
Statements of Operations-Additional Information | 3. 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. • Vaccines: Our vaccines are primarily focused on preventing diseases in poultry and swine. They protect animals from either viral or bacterial disease challenges. We also manufacture and distribute autogenous vaccine products and market adjuvants to vaccine manufacturers. We have developed 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. The 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 a number of 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 2019 2018 2017 Animal Health MFAs and other $ 350,468 $ 336,666 $ 321,430 Nutritional specialties 113,215 122,978 111,282 Vaccines 68,291 72,083 65,033 Total Animal Health $ 531,974 $ 531,727 $ 497,745 Mineral Nutrition 233,782 234,922 218,298 Performance Products 62,239 53,333 48,238 Total $ 827,995 $ 819,982 $ 764,281 Net Sales by Region For the Year Ended June 30 2019 2018 2017 United States $ 480,101 $ 490,880 $ 483,794 Latin America and Canada 152,380 143,231 113,187 Europe, Middle East and Africa 105,365 110,377 95,838 Asia Pacific 90,149 75,494 71,462 Total $ 827,995 $ 819,982 $ 764,281 Net sales by region are based on country of destination. Deferred revenue was $5,464 and $4,530 as of June 30, 2019 and June 30, 2018, respectively. Accrued expenses and other current liabilities included $965 and $508 of the total deferred revenue as of June 30, 2019 and June 30, 2018, 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. For the Year Ended June 30 2019 2018 2017 Interest expense, net Term loan $ 8,553 $ 8,321 $ 11,482 Revolving credit facility 3,748 2,777 2,897 Amortization of debt issuance costs and debt discount 882 883 1,015 Acquisition-related accrued interest — 1,085 1,373 Other 494 537 105 Interest expense 13,677 13,603 16,872 Interest (income) (1,901 ) (1,693 ) (1,966 ) $ 11,776 $ 11,910 $ 14,906 For the Year Ended June 30 2019 2018 2017 Depreciation and amortization Depreciation of property, plant and equipment $ 21,423 $ 21,044 $ 19,916 Amortization of intangible assets 6,092 5,851 5,950 Amortization of other assets 49 48 135 $ 27,564 $ 26,943 $ 26,001 Depreciation of property, plant and equipment includes amortization of capitalized software costs of $1,217, $1,519 and $2,199 during 2019, 2018 and 2017, respectively. Amortization of intangible assets as of June 30, 2019, is expected to be $6,033, $5,487, $5,381, $5,380, $5,161 and $18,236 for 2020, 2021, 2022, 2024, 2025 and thereafter, respectively. For the Year Ended June 30 2019 2018 2017 Research and development expenditures $ 12,083 $ 9,998 $ 9,442 |
Balance Sheets-Additional Infor
Balance Sheets-Additional Information | 12 Months Ended |
Jun. 30, 2019 | |
Balance Sheets Additional Information [Abstract] | |
Balance Sheets-Additional Information | 4. Balance Sheets—Additional Information As of June 30 2019 2018 Accounts receivable, net Trade accounts receivable $ 163,464 $ 141,999 Allowance for doubtful accounts (4,442 ) (6,257 ) $ 159,022 $ 135,742 As of June 30 2019 2018 2017 Allowance for doubtful accounts Balance at beginning of period $ 6,257 $ 6,428 $ 4,953 Provision for bad debts (201 ) 166 1,412 Effect of changes in exchange rates 38 (215 ) 159 Bad debt write-offs (1,500 ) — — Bad debt recovery (152 ) (122 ) (96 ) Balance at end of period $ 4,442 $ 6,257 $ 6,428 As of June 30 2019 2018 Inventories Raw materials $ 64,441 $ 62,373 Work-in-process 10,699 14,731 Finished goods 123,182 101,066 $ 198,322 $ 178,170 As of June 30 2019 2018 Property, plant and equipment, net Land $ 10,152 $ 10,140 Buildings and improvements 71,036 68,769 Machinery and equipment 252,097 227,092 333,285 306,001 Accumulated depreciation (193,050 ) (175,893 ) $ 140,235 $ 130,108 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 $3,475 and $2,700 at June 30, 2019 and 2018, respectively. Machinery and equipment includes construction-in-progress of $15,630 and $7,783 at June 30, 2019 and 2018, respectively. As of June 30 Weighted- (Years) 2019 2018 Intangibles, net Cost Technology 13 $ 71,016 $ 69,475 Product registrations, marketing and distribution rights 9 17,858 17,902 Customer relationships 13 12,194 12,211 Trade names, trademarks and other 5 2,740 2,740 In-process research and development 1,800 1,800 105,608 104,128 Accumulated amortization Technology (29,333 ) (23,937 ) Product registrations, marketing and distribution rights (17,811 ) (17,902 ) Customer relationships (8,282 ) (7,614 ) Trade names, trademarks and other (2,704 ) (2,697 ) (58,130 ) (52,150 ) $ 47,478 $ 51,978 As of June 30 2019 2018 Goodwill roll-forward Balance at beginning of period $ 27,348 $ 23,982 Acquisition — 5,642 Translation — (2,276 ) Balance at end of period $ 27,348 $ 27,348 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 animal health and nutrition, environmental, industrial and agricultural customers. Osprey also produces key components of our recently launched Provia Prime TM We will account for the acquisition as a business combination in accordance with ASC No. 805, “Business Combinations,” In September 2017, we acquired a business for $15,000. The business develops, manufactures and markets animal health products. We accounted for the acquisition as a business combination in accordance with ASC 805, “ Business Combinations We have not provided pro forma information giving effect to the acquisitions because the results of each transaction are not material to the consolidated financial statements. As of June 30 2019 2018 Other assets Equity method investments $ 4,196 $ 3,944 Insurance investments 5,431 5,235 Deferred financing fees 1,531 2,042 Deferred income taxes 16,770 15,424 Deposits 7,024 6,692 Indemnification asset 3,000 3,000 Fair value of derivative — 5,078 Other 7,496 5,369 $ 45,448 $ 46,784 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 $3,287 equity investment are currently idled; we have concluded the investment is not currently impaired, based on expected future operating cash flows and/or disposal value. As of June 30 2019 2018 Accrued expenses and other current liabilities Employee related $ 28,298 $ 27,333 Commissions and rebates 8,397 7,341 Insurance-related 1,279 1,168 Professional fees 5,212 4,350 Income and other taxes 6,067 3,610 Acquisition-related consideration — 12,845 Restructuring costs 3,590 — Other 15,655 14,497 $ 68,498 $ 71,144 During the three months ended June 30, 2019, we recorded pre-tax charges of $6,281 for business restructuring activities related to productivity and cost saving initiatives in the Animal Health segment. The charges included $3,500 related to termination of a contract manufacturing agreement and $2,781 for employee separation costs. The charges are included in selling, general and administrative expenses in our consolidated statements of operations. As of June 30, 2019, $691 had been paid, $3,590 was included in accrued expenses and other current liabilities and $2,000 was included in other liabilities. We expect to record an additional charge for employee separation costs of an estimated $1,000 and complete the additional separation actions by December 31, 2019. In July 2018, we accelerated the closing date and completed the purchase of intellectual property and certain other assets comprising the MJ Biologics, Inc. (“MJB”) business relating to animal vaccines. The Company and MJB had originally agreed to the purchase business combination in January 2015, with a contemplated closing date in January 2021. The final amount due, net of previously paid amounts, was $12,775, including $9,000 paid in July 2018 and $3,775 paid in January 2019. As of June 30 2019 2018 Other liabilities U.S. pension plan $ 3,934 $ 2,910 International retirement plans 5,133 4,644 Supplemental retirement benefits, deferred compensation and other 7,605 10,792 Long term and deferred income taxes 8,978 9,729 Restructuring costs 2,000 — Other long term liabilities 15,144 15,627 $ 42,794 $ 43,702 As of June 30 2019 2018 Accumulated other comprehensive income (loss) Derivative instruments $ (594 ) $ 4,986 Foreign currency translation adjustment (71,225 ) (67,098 ) Unrecognized net pension gains (losses) (20,050 ) (18,213 ) (Provision) benefit for income taxes on derivative instruments 148 (1,241 ) (Provision) benefit for incomes taxes on long-term intercompany investments 8,166 8,166 (Provision) benefit for income taxes on pension gains (losses) (2,626 ) (3,083 ) $ (86,181 ) $ (76,483 ) |
Debt
Debt | 12 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
Debt | 5. Debt Term Loans and Revolving Credit Facilities In June 2017, we entered into a new credit agreement (the “Credit Agreement”). Under the Credit Agreement, lenders extended credit to us in the form of a Term A loan, with an aggregate principal amount of $250,000 (the “Term A Loan”) and a revolving credit facility, with an aggregate principal amount of $250,000 (the “Revolver,” and together with the Term A Loan, the “Credit Facilities”). We used the proceeds from the Credit Facilities to repay all debt outstanding under the previous credit facilities as of the closing date and to pay fees and expenses of the transaction. We recorded a $2,598 loss on extinguishment of debt for certain unamortized debt issuance costs and debt discount related to the retired debt. Borrowings under the 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 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) a Eurodollar rate determined by reference to LIBOR with a term as selected by the Company, or (2) 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%. In the case of LIBOR and Eurodollar rate loans, if the First Lien Net Leverage Ratio is (i) equal to or greater than 3.00:1.00; (ii) less than 3.00:1.00 but greater than or equal to 2.25:1.00; or, (iii) less than 2.25:1.00, the 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 3.00:1.00; (ii) less than 3.00:1.00 but greater than or equal to 2.25:1.00; or, (iii) less than 2.25:1.00, the Credit Facilities have applicable rates equal to 1.00%; 0.75%; and, 0.50%, respectively. Pursuant to the terms of the Credit Agreement, the 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 Credit Agreement contains an acceleration clause should an event of default (as defined in the agreement) occur. The Credit Facilities mature on June 29, 2022. The Credit Agreement requires, among other things, compliance with financial covenants that permit: (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. As of June 30, 2019, we were in compliance with the financial covenants. As of June 30, 2019, we had $96,000 in borrowings under the Revolver and had outstanding letters of credit of $3,009, leaving $150,991 available for borrowings and letters of credit under the Revolver. 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% plus the applicable rate. The agreement matures concurrent with the Credit Agreement. We designated the interest rate swap as a highly effective cash flow hedge. For additional details, see “—Derivatives.” As of June 30, 2019, the interest rates for the Revolver and the Term A Loan were 3.90% and 3.50%, respectively. The weighted-average interest rates for the Revolver were 3.86% and 3.20% for the years ended June 30, 2019 and 2018, respectively. The weighted-average interest rates for the Term A Loan were 3.52% and 3.33% for the years ended June 30, 2019 and 2018, respectively. Foreign Credit Facilities Our Israel subsidiaries have aggregate credit facilities available of approximately $14,000 (the “Israel Credit Facilities”). As of June 30, 2019, 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% or Prime Rate plus 0.50%. The Israel Credit Facilities mature in October 2019 and March 2020. Long-Term Debt As of June 30 2019 2018 Term A Loan due June 2022 $ 231,250 $ 243,750 Capitalized lease obligations 40 118 231,290 243,868 Unamortized debt issuance costs and debt discount (1,115 ) (1,487 ) 230,175 242,381 Less: current maturities (12,540 ) (12,579 ) $ 217,635 $ 229,802 Aggregate Maturities of Long-Term Debt For the Year Ended June 30 2020 $ 12,540 2021 18,750 2022 200,000 Total $ 231,290 |
Common Stock, Preferred Stock a
Common Stock, Preferred Stock and Dividends | 12 Months Ended |
Jun. 30, 2019 | |
Equity [Abstract] | |
Common Stock, Preferred Stock and Dividends | 6. Common Stock, Preferred Stock and Dividends Preferred stock and common stock at June 30, 2019 and 2018 were: 2019 2018 2019 2018 As of June 30 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 20,287,574 19,992,204 Common stock–Class B 30,000,000 30,000,000 $ 0.0001 20,166,034 20,365,504 Holders of our Class B common stock converted 199,470 and 261,332 Class B common shares to Class A common shares in 2019 and 2018, respectively. 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 $18,592 for the year ended June 30, 2019, to holders of our Class A common stock and Class B common stock. |
Stock Incentive Plan
Stock Incentive Plan | 12 Months Ended |
Jun. 30, 2019 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock Incentive Plan | 7. 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 4,881,620 Class A shares available for grant pursuant to the Incentive Plan as of June 30, 2019. 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 represents the right to receive a share of our common stock upon vesting. A portion of the RSUs are subject to performance-based vesting (the “Performance-Based RSUs”). The Performance-Based RSUs will vest in increments from 15% to 100% based on the 90-day average of the Company’s common stock price from $30 to $80 ending on December 31, 2020. A portion of the RSUs are subject to time-based vesting (the “Time-Based RSUs”). The Time-Based RSUs will vest on December 31, 2020, provided the individual remains employed with the Company or is terminated under a qualifying termination. We used a Monte Carlo simulation model to determine the grant date fair value of the Performance-Based RSUs. Assumptions used by the model were based on information as of the grant date and included: risk-free rate of return of 2.59%; expected volatility of 31.94%; and, an expected dividend yield of 0.95%. The risk-free rate of return is based on U.S. treasury yields for bonds with similar maturities. Expected volatility is based on the historical volatility of the Company’s common stock. The expected dividend yield considers estimated annual dividends and the closing share price of the underlying common stock. The fair value of the Time-Based RSUs is equal to the closing market price of the underlying common stock on the grant date, less the present value of expected dividends over the vesting period. The following table summarizes the activity related to RSUs: RSUs Grant Date Grant Date Performance-Based RSUs Granted 200,000 $ 19.63 $ 3,926 Time-Based RSUs Granted May 2018 50,000 $ 41.10 $ 2,055 Outstanding June 30, 2019 and 2018 250,000 $ 23.92 $ 5,981 We will recognize 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 $2,259 and $334 for the years ended June 30, 2019 and 2018, respectively. We expect stock-based compensation expense related to RSUs will be $$2,259 and $1,129 in 2020 and 2021, respectively. Stock Options There was no stock-based compensation expense related to employee stock options in the periods included in the consolidated financial statements. The following table details stock option activity. Option Weighted-Average Outstanding, June 30, 2018 95,900 $ 11.83 Exercised (95,900 ) $ 11.83 Outstanding, June 30, 2019 — $ — |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Jun. 30, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 8. Related Party Transactions Certain relatives of Jack C. Bendheim, our Chairman, President and Chief Executive Officer, provided services to us as employees or consultants and received aggregate compensation and benefits of approximately $1,969, $1,857 and $1,735 during 2019, 2018 and 2017, 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, 2019 | |
Compensation and Retirement Disclosure [Abstract] | |
Employee Benefit Plans | 9. 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. Plan benefits are based upon years of service and average compensation, as defined. The measurement dates for the plan were as of June 30, 2019, 2018 and 2017. We amended the plan to eliminate credit for future service and compensation increases, effective September 2016. The amendment resulted in a pension curtailment gain of $6,822 recorded in other comprehensive income. Separately, we completed a partial settlement of the plan in November 2016 and recognized $1,702 of expense in the consolidated statements of operations. Changes in the projected benefit obligation, plan assets and funded status of the plan were: For the Year Ended June 30 2019 2018 Change in projected benefit obligation Projected benefit obligation at beginning of year $ 61,557 $ 63,260 Interest cost 2,407 2,157 Benefits paid (1,758 ) (2,196 ) Actuarial (gain) loss 6,321 (1,664 ) Projected benefit obligation at end of year $ 68,527 $ 61,557 For the Year Ended June 30 2019 2018 Change in plan assets Fair value of plan assets at beginning of year $ 58,648 $ 57,110 Actual return on plan assets 6,860 965 Employer contributions 842 2,768 Benefits paid (1,757 ) (2,195 ) Fair value of plan assets at end of year $ 64,593 $ 58,648 Funded status at end of year $ (3,934 ) $ (2,909 ) The funded status is included in other liabilities in the consolidated balance sheets. The Company expects to contribute approximately $670 to the plan during 2020. 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 2019 2018 Accumulated Other Comprehensive Income (Loss) Related to Pension Plan Balance at beginning of period $ (18,213 ) $ (18,059 ) Amortization of net actuarial loss 465 453 Current period net actuarial (loss) gain (2,302 ) (607 ) Net change (1,837 ) (154 ) Balance at end of period $ (20,050 ) $ (18,213 ) Amortization of unrecognized net actuarial loss will be approximately $485 during 2020. Net periodic pension expense was: For the Year Ended June 30 2019 2018 2017 Service cost–benefits earned during the year $ — $ — $ 845 Interest cost on benefit obligation 2,407 2,157 2,045 Expected return on plan assets (2,842 ) (3,236 ) (3,389 ) Amortization of net actuarial loss 465 453 672 Curtailment expense — — 16 Settlement expense — — 1,702 Net periodic pension expense $ 30 $ (626 ) $ 1,891 Significant actuarial assumptions for the plan were: For the Year Ended June 30 2019 2018 2017 Discount rate for service cost N/A N/A 4.0 % Discount rate for interest cost 3.1 % 3.9 % 3.2 % Expected rate of return on plan assets 4.9 % 5.6 % 6.1 % Discount rate for year-end benefit obligation 3.6 % 4.2 % 3.9 % The plan used the Aon Hewitt AA Bond Universe as a benchmark for its discount rate as of June 30, 2019, 2018 and 2017. 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 2020 $ 2,599 2021 2,878 2022 3,113 2023 3,318 2024 3,474 2025–2029 18,828 The plan’s target asset allocations for 2020 and the weighted-average asset allocation of plan assets as of June 30, 2019 and 2018 are: Target Percentage of Plan Assets For the Year Ended June 30 2020 2019 2018 Debt securities 57%–77% 67 % 63 % Equity securities 18%–38% 28 % 26 % Global asset allocation/risk parity (1) 0%–15% 4 % 10 % Other 0%–10% 1 % 1 % (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 is generally 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, 2019 Level 1 Level 2 Level 3 Total Cash and cash equivalents $ 215 $ — $ — $ 215 Common-collective funds Global large cap equities — 13,995 4,016 18,011 Fixed income securities — 43,288 — 43,288 Global asset allocations/risk parity — 1,446 — 1,446 Other Global asset allocations/risk parity — — 1,447 1,447 Other — — 186 186 $ 215 $ 58,729 $ 5,649 $ 64,593 Fair Value Measurements Using As of June 30, 2018 Level 1 Level 2 Level 3 Total Cash and cash equivalents $ 428 $ — $ — $ 428 Common-collective funds Global large cap equities — 11,632 3,811 15,443 Fixed income securities — 36,671 — 36,671 Global asset allocations/risk parity — 2,957 — 2,957 Other Global asset allocations/risk parity — — 2,881 2,881 Other — — 268 268 $ 428 $ 51,260 $ 6,960 $ 58,648 The table below provides a summary of the changes in the fair value of Level 3 assets: Change in Fair Value of Level 3 assets 2019 2018 Balance at beginning of period $ 6,960 $ 15,959 Redemptions (4,336 ) (9,901 ) Purchases 2,800 — Change in fair value 225 902 Balance at end of period $ 5,649 $ 6,960 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% 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 $5,201, $4,937, and $4,154, in 2019, 2018 and 2017, respectively. Our consolidated balance sheets include other employee-related liabilities of $17,391 and $15,536 as of June 30, 2019 and 2018, respectively, including international retirement plans, supplemental retirement benefits and long-term incentive arrangements. Expense under these plans was $5,685, $4,009, and $4,304 in 2019, 2018 and 2017, respectively. |
Income Taxes
Income Taxes | 12 Months Ended |
Jun. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 10. Income Taxes In December 2017, the United States government enacted comprehensive income tax legislation (the “Tax Act”). The Tax Act makes broad and complex changes to United States income tax law and includes numerous elements that affect the Company, including a reduced federal corporate income tax rate from 35% to 21%, creating a territorial tax system that includes a one-time mandatory transition tax on previously deferred foreign earnings and changes to business-related exclusions, deductions and credits. Our provision for income taxes reflects a statutory 21.0% and 28.1% weighted-average federal income tax rate for our fiscal years ending June 30, 2019 and 2018, respectively. The Tax Act also has consequences related to our international operations. We have elected to record 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 year ended June 30, 2019, included $537 of federal tax expense from the effects of GILTI. During the year ended June 30, 2019, we completed our accounting for the Tax Act and recorded a benefit in the provision for income taxes of $360 related to the previously recorded one-time mandatory toll charge on deemed repatriation of undistributed earnings of foreign subsidiaries. We also recorded a benefit in the provision of income taxes of $1,032 as a result of retroactive elections made on certain of our foreign tax credits. Our consolidated financial statements as of June 30, 2018, reflected the provisional effects of the Tax Act, including: • a $2,289 provision for income taxes and reduction in deferred tax assets for the remeasurement of deferred tax assets and liabilities to reflect the reduced income tax rate • $403 provision for income taxes and increase in current liabilities to reflect the one-time mandatory toll charge on the deemed repatriation of undistributed earnings of foreign subsidiaries. Income before income taxes was: For the Year Ended June 30 2019 2018 2017 Domestic $ 2,331 $ 19,819 $ 18,015 Foreign 69,174 68,251 62,528 Income before income taxes $ 71,505 $ 88,070 $ 80,543 Components of the provision for income taxes were: For the Year Ended June 30 2019 2018 2017 Current provision (benefit): Federal $ (459 ) $ 81 $ 383 State and local 102 1,744 724 Foreign 16,603 15,268 14,839 Total current provision 16,246 17,093 15,946 Deferred provision (benefit): Federal 858 2,746 4,675 State and local 432 2,156 251 Foreign (691 ) 769 (833 ) Change in valuation allowance–foreign (53 ) 423 (4,111 ) Total deferred provision (benefit) 546 6,094 (18 ) Provision for income taxes $ 16,792 $ 23,187 $ 15,928 During 2017, based on continued profitability, we concluded that it was more likely than not that the value of certain foreign deferred tax assets would be realized, and it was no longer necessary to maintain a related valuation allowance. Accordingly, we released the valuation allowance related to these foreign deferred tax assets. We review the realizability of our deferred tax assets when circumstances so indicate. Reconciliation of the federal statutory rate to the Company’s effective tax rate were: For the Year Ended June 30 2019 2018 2017 Federal income tax rate 21.0 % 28.1 % 35.0 % State and local taxes, net of federal benefit 0.6 1.5 0.9 Foreign income tax rates 6.9 (1.5 ) (6.8 ) Foreign incentive tax rates (2.8 ) (3.3 ) (3.1 ) Domestic tax on foreign income — — 2.7 Changes in uncertain tax positions (1.0 ) 1.1 1.6 Permanent items 0.6 0.5 (0.9 ) Exercise of employee stock options (0.4 ) (4.3 ) (3.8 ) Global Intangible Low-Taxed Income 0.8 — — Mandatory toll charge from Tax Act (0.5 ) 0.5 — Reduction of domestic deferred tax assets — 2.6 — Reduction of foreign deferred tax assets — 1.3 — Recognition of federal tax credits (1.1 ) — — Recognition of foreign tax credits (1.4 ) (0.7 ) — Reclassification from accumulated other comprehensive income — 0.6 — Release of foreign valuation allowance — — (5.1 ) Other (0.8 ) (0.1) (0.7 ) Effective tax rate 23.5 % 26.3 % 19.8 % The undistributed earnings of foreign subsidiaries were subject to the U.S. one-time mandatory toll charge and are eligible to be repatriated to the U.S. without additional U.S. tax under the Tax Act. 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. We do not provide income taxes for foreign currency translation adjustments relating to investments in international subsidiaries that will be held indefinitely. The tax effects of significant temporary differences that comprise deferred tax assets and liabilities were: As of June 30 2019 2018 Deferred tax assets: Employee related accruals $ 5,735 $ 4,952 Inventory 4,766 3,953 Environmental remediation 1,128 1,341 Net operating loss carry forwards–domestic 902 1,577 Net operating loss carry forwards–foreign 3,703 3,243 Other 6,302 9,986 22,536 25,052 Valuation allowance (808 ) (861 ) 21,728 24,191 Deferred tax liabilities: Property, plant and equipment and intangible assets (6,071 ) (8,957 ) Other (772 ) (1,906 ) (6,843 ) (10,863 ) Net deferred tax asset $ 14,885 $ 13,328 Deferred taxes are included in the consolidated balance sheets as follows: As of June 30 2019 2018 Other assets $ 16,770 $ 15,424 Other liabilities (1,885 ) (2,096 ) $ 14,885 $ 13,328 The valuation allowance for deferred tax assets were: As of June 30 2019 2018 2017 Balance at beginning of period $ 861 $ 438 $ 4,614 Provision for income taxes (53 ) 423 (4,111 ) Net operating loss utilization — — (65 ) Balance at end of period $ 808 $ 861 $ 438 The valuation allowances for deferred tax assets as of June 30, 2019, 2018 and 2017 were solely related to foreign jurisdictions. We have $15,067 of state net operating loss carry forwards that will expire in 2018 through 2037. In addition, we have $13,754 of foreign net operating loss carry forwards, most of which are in jurisdictions that have no expiration. 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 benefit our effective income tax rate. The reconciliation of the beginning and ending amounts of gross unrecognized tax benefits follows: As of June 30 2019 2018 2017 Unrecognized tax benefits–beginning of period $ 7,000 $ 6,553 $ 4,946 Tax position changes–current period 528 1,749 1,490 Tax position changes–prior periods, net of settlements with tax authorities (317 ) (994 ) — Lapse of statute of limitations (1,053 ) — (391 ) Translation 185 (308 ) 508 Unrecognized tax benefits–end of period 6,343 7,000 6,553 Interest and penalties–end of period 750 633 449 Total liabilities related to uncertain tax $ 7,093 $ 7,633 $ 7,002 We recognize interest and penalties associated with uncertain tax positions as a component of the provision for income taxes. We recognized interest and penalties expense of $94, $203 and $116 for 2019, 2018 and 2017, respectively. During 2020, we potentially will reverse $1,868 of uncertain tax positions as a result of the lapse of the statute of limitations, with a corresponding benefit to the provision for income taxes. 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, 2007; • Brazil, through December 31, 2013; • Israel, through June 30, 2014 for certain subsidiaries and through June 30, 2015 for certain subsidiaries. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Jun. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 11. Commitments and Contingencies Leases We lease land and office, warehouse and manufacturing equipment and facilities for minimum annual rentals, plus certain cost escalations. We record rent expense on a straight-line basis over the term of the lease. At June 30, 2019, we had the following future minimum lease commitments: For the Year Ended June 30 Capital leases Non-cancellable operating leases 2020 $ 40 $ 5,815 2021 — 4,160 2022 — 3,191 2023 — 1,445 2024 865 Thereafter — 765 Total minimum lease payments $ 40 $ 16,241 Rent expense under operating leases was $9,103, $8,453, and $7,715 for 2019, 2018 and 2017, respectively. 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 time 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 upon our experience to date, we believe that the future cost of compliance with existing Environmental Laws, and liabilities for known environmental claims pursuant to such Environmental Laws, will not have a material adverse effect on our financial position, results of operations, cash flows or liquidity. 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 Phibro-Tech’s Santa Fe Springs, California facility. 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, a group of companies that sent chemicals to the Omega Chemical Site for processing and recycling has filed a complaint under CERCLA and RCRA 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 $5,890 and $6,833 at June 30, 2019 and 2018, 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 is 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 a number of 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, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives | 12. 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 “—Fair Value Measurements.” We entered into an interest rate swap agreement on $150,000 of notional principal that effectively converts the floating LIBOR portion of our interest obligation on that amount of debt, to a fixed interest rate of 1.8325% plus the applicable rate. The agreement matures concurrent with the Credit Agreement. The forecasted transactions are probable of occurring, and the interest rate swap has been designated as a highly effective cash flow hedge. We entered into foreign currency option contracts to hedge cash flows related to monthly inventory purchases. The individual option contracts mature monthly through June 2020. The forecasted inventory purchases are probable of occurring and the individual option contracts were designated as highly effective cash flow hedges. The following table details the Company’s outstanding derivatives that are designated and effective as cash flow hedges as of June 30, 2019: Instrument Hedge Notional Consolidated Asset (Liability) June 30, June 30, Options Brazilian Real calls R$ 43,000 (1) $ 413 $ 71 Options Brazilian Real puts R$ 43,000 (1) $ (30 ) $ — Swap Interest rate swap $150,000 Other assets $ (977 ) $ 5,078 (1) We record the net fair values of our outstanding foreign currency option contracts within the respective balance sheet line item based on the net financial position and maturity date of the individual contracts as of the balance sheet date. Other current assets as of June 30, 2019 and June 30, 2018, included net fair values of $383 and $71, respectively. The following tables show the effects of derivatives on the consolidated statements of operations and other comprehensive income for the years ended June 30, 2019 and 2018. For the Year Ended June 30 Gain (Loss) recorded in OCI Gain (Loss) recognized in consolidated Consolidated Statement of Instrument Hedge 2019 2018 Consolidated Operations 2019 2018 2019 2018 Options . . . . . Brazilian Real calls $ 474 $ (2,778 ) Cost of goods sold $ 1,069 $ 3,136 $ 563,371 $ 553,103 Swap . . . . . . . Interest rate swap $ (6,055 ) $ 5,078 Interest expense, net $ — $ — $ 11,776 $ 11,910 We recognize gains (losses) related to these foreign currency derivatives as a component of cost of goods sold at the time the hedged item is sold. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Jun. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 13. 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, 2019 and 2018, 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 As of June 30, 2019, 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. Letters of Credit We obtain letters of credit in connection with certain regulatory and insurance obligations, inventory purchases and other contractual obligations. The carrying values of these letters of credit are considered to be representative of their fair values because of the nature of the instruments. Debt We record debt, including term loans and revolver balances, at book value 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. 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. Fair Value of Assets (Liabilities) As of June 30 2019 2018 Level 1 Level 2 Level 1 Level 2 Short-term investments $ 24,000 $ — $ 50,000 $ — Derivatives asset (liability) $ — $ 383 $ — $ 71 Interest rate swap (liability) $ — $ (977 ) $ — $ 5,078 There were no Level 3 fair value measurements as of the periods presented. For a detailed discussion on the fair value of our pension plan assets, see “—Employee Benefit Plans.” |
Business Segments
Business Segments | 12 Months Ended |
Jun. 30, 2019 | |
Segment Reporting [Abstract] | |
Business Segments | 14. 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 loss on extinguishment of debt, 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 2019 2018 2017 Net sales Animal Health $ 531,974 $ 531,727 $ 497,745 Mineral Nutrition 233,782 234,922 218,298 Performance Products 62,239 53,333 48,238 Total segments $ 827,995 $ 819,982 $ 764,281 Depreciation and amortization Animal Health $ 22,312 $ 21,447 $ 20,132 Mineral Nutrition 2,319 2,371 2,332 Performance Products 1,127 1,029 939 Total segments $ 25,758 $ 24,847 $ 23,403 Adjusted EBITDA Animal Health $ 136,049 $ 141,914 $ 130,261 Mineral Nutrition 15,712 18,583 17,426 Performance Products 4,728 1,881 2,057 Total segments $ 156,489 $ 162,378 $ 149,744 Reconciliation of income before income taxes to Income before income taxes $ 71,505 $ 88,070 $ 80,543 Interest expense, net 11,776 11,910 14,906 Depreciation and amortization–Total segments 25,758 24,847 23,403 Depreciation and amortization–Corporate 1,806 2,096 2,598 Corporate costs 38,452 33,420 29,625 Restructuring costs 6,281 — — Stock-based compensation 2,259 334 — Acquisition-related cost of goods sold — 1,671 — Acquisition-related accrued compensation — 1,152 1,680 Acquisition-related transaction costs 213 400 1,274 Acquisition-related other, net — (468 ) (972 ) Other (1,506 ) — — Pension settlement cost — — 1,702 Gain on insurance settlement — — (7,500 ) Foreign currency (gains) losses, net (55 ) (1,054 ) (113 ) Loss on extinguishment of debt — — 2,598 Adjusted EBITDA–Total segments $ 156,489 $ 162,378 $ 149,744 Acquisition-related other, net includes adjustments to contingent consideration on acquisitions and impairments of intangible assets. As of June 30 2019 2018 Identifiable assets Animal Health $ 508,864 $ 455,704 Mineral Nutrition 67,662 69,779 Performance Products 32,886 24,040 Total segments 609,412 549,523 Corporate 117,259 122,156 Total $ 726,671 $ 671,679 The Animal Health segment includes all goodwill of the Company. The Animal Health segment includes advances to and investment in an equity method investee of $3,287 and $3,432 as of June 30, 2019 and 2018, respectively. The Performance Products segment includes an investment in an equity method investee of $759 and $437 as of June 30, 2019 and 2018, respectively. 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 2019 2018 Property, plant and equipment, net United States $ 54,999 $ 55,268 Israel 52,434 45,055 Brazil 19,647 19,653 Other 13,155 10,132 $ 140,235 $ 130,108 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies and New Accounting Standards (Policies) | 12 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
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, Uncertainties and Liquidity | Risks and Uncertainties 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 Preparation of the consolidated 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. Significant estimates include 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 and value-added tax assets, legal and environmental matters 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 product 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 primarily use the most-likely amount method. 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 [24%] and 24% of accounts receivable at June 30, 2019 and 2018, respectively. The allowance for doubtful accounts is our best estimate of the probable 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 based upon the assets’ estimated useful lives, ranging from two to thirty years for buildings and improvements, and one to ten years 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. |
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 basis over three to seven years. |
Deferred Financing Costs | Deferred Financing 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 deferred financing costs is included in interest expense in the consolidated statements of operations. |
Acquisitions, Intangible Assets and Goodwill | Acquisitions, Intangible Assets and Goodwill 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 is required to determine the fair value of certain tangible and intangible assets and in assigning their respective useful lives. Accordingly, we typically obtain the assistance of third-party valuation specialists for significant tangible and intangible assets. The fair values are based on available historical information and on future expectations and assumptions deemed reasonable by management, but are inherently uncertain. We typically use an income method to measure the fair value of intangible assets, which is based on forecasts of the expected future cash flows attributable to the respective assets. Significant estimates and assumptions inherent in the valuations reflect a consideration of other marketplace participants, and include the amount and timing of future cash flows (including expected growth rates and profitability), the underlying product or technology life cycles, economic barriers to entry and the discount 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 are based on factors including 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. |
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. During 2017, we determined that certain intangible assets related to technology within the Animal Health segment were impaired, based on changes to future product sales assumptions, and recorded an impairment charge of $713 as a component of selling, general and administrative expenses in our consolidated statements of operations. There were no significant asset impairments and no changes in estimated remaining useful lives of our long-lived or amortizable intangible assets in 2019 or 2018. 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. During 2017, we determined that certain IPR&D within the Animal Health segment was impaired, based on changes to future product sales assumptions, and recorded an impairment charge of $1,579 as a component of selling, general and administrative expenses in our consolidated statements of operations. There were no impairment charges related to indefinite-lived intangible assets in 2019 or 2018. 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, 2019, we tested goodwill using a quantitative approach, which involved estimating fair values of reporting units using the discounted cash flow method. We 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 remeasurement 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, 2019, 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) an interest rate swap on $150 million 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. Significant judgment is required in determining our income tax provision and in evaluating our tax positions. 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, and release these allowances when it is more likely than not that these deductions or credits will be used. We operate in multiple jurisdictions with complex tax policy and regulatory environments. In certain of these jurisdictions, we may take tax positions that management believes are supportable, but are potentially subject to successful challenge by the applicable taxing authority. 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 chemists and technicians on staff involved in product development, quality assurance, quality control 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 2019 2018 2017 Net income $ 54,713 $ 64,883 $ 64,615 Weighted average number of shares–basic 40,412 40,181 39,524 Dilutive effect of stock options and restricted stock units 111 204 518 Weighted average number of shares–diluted 40,523 40,385 40,042 Net income per share basic $ 1.35 $ 1.61 $ 1.63 diluted $ 1.35 $ 1.61 $ 1.61 |
New Accounting Standards | New Accounting Standards Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) 2018-14, Compensation—Retirement Benefits—Defined Benefit Plans—General (Topic 715-20): Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement ASU 2018-02, Income Statement—Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments ASU 2016-02, Leases (Topic 842) ASU 2014-09, Revenue from Contracts with Customers (Topic 606) The effect of initial adoption of the new standard resulted in the following changes to our consolidated balance sheet: As of July 1, 2018 Effect of Adoption Post-adoption Other current assets $ 2,100 $ 24,481 Other assets 2,325 49,109 Accrued expenses and other current liabilities 343 71,487 Other liabilities 2,837 46,539 Retained earnings $ 1,245 $ 132,805 The current year effect of the adoption of the new standard resulted in the following changes to our consolidated balance sheet and consolidated statement of operations: As of June 30, 2019 Effect of adoption As reported Other current assets $ 225 $ 27,245 Other assets 225 45,448 Other liabilities (216 ) 42,794 Retained earnings $ 666 $ 168,926 For the Year Ended June 30, 2019 Effect of adoption As reported Net sales $ 793 $ 827,995 Provision for income taxes 127 16,792 Net income $ 666 $ 54,713 For changes to our policy resulting from the adoption of ASU 2014-09, see “—Summary of Significant Accounting Policies and New Accounting Standards—Revenue Recognition.” See “Statements of Operations—Additional Information” for our disclosures regarding disaggregated revenue, deferred revenue and customer payment terms. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies and New Accounting Standards (Tables) | 12 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Schedule of net income per share and weighted average shares | For the Year Ended June 30 2019 2018 2017 Net income $ 54,713 $ 64,883 $ 64,615 Weighted average number of shares–basic 40,412 40,181 39,524 Dilutive effect of stock options and restricted stock units 111 204 518 Weighted average number of shares–diluted 40,523 40,385 40,042 Net income per share basic $ 1.35 $ 1.61 $ 1.63 diluted $ 1.35 $ 1.61 $ 1.61 |
Schedule of adoption to reported results | As of July 1, 2018 Effect of Adoption Post-adoption Other current assets $ 2,100 $ 24,481 Other assets 2,325 49,109 Accrued expenses and other current liabilities 343 71,487 Other liabilities 2,837 46,539 Retained earnings $ 1,245 $ 132,805 As of June 30, 2019 Effect of adoption As reported Other current assets $ 225 $ 27,245 Other assets 225 45,448 Other liabilities (216 ) 42,794 Retained earnings $ 666 $ 168,926 For the Year Ended June 30, 2019 Effect of adoption As reported Net sales $ 793 $ 827,995 Provision for income taxes 127 16,792 Net income $ 666 $ 54,713 |
Statements of Operations-Addi_2
Statements of Operations-Additional Information (Tables) | 12 Months Ended |
Jun. 30, 2019 | |
Supplemental Income Statement Elements [Abstract] | |
Schedule of revenues disaggregated by major product category and geographic region | Net Sales by Product Type For the Year Ended June 30 2019 2018 2017 Animal Health MFAs and other $ 350,468 $ 336,666 $ 321,430 Nutritional specialties 113,215 122,978 111,282 Vaccines 68,291 72,083 65,033 Total Animal Health $ 531,974 $ 531,727 $ 497,745 Mineral Nutrition 233,782 234,922 218,298 Performance Products 62,239 53,333 48,238 Total $ 827,995 $ 819,982 $ 764,281 Net Sales by Region For the Year Ended June 30 2019 2018 2017 United States $ 480,101 $ 490,880 $ 483,794 Latin America and Canada 152,380 143,231 113,187 Europe, Middle East and Africa 105,365 110,377 95,838 Asia Pacific 90,149 75,494 71,462 Total $ 827,995 $ 819,982 $ 764,281 |
Schedule of additional information of statements of operations | For the Year Ended June 30 2019 2018 2017 Interest expense, net Term loan $ 8,553 $ 8,321 $ 11,482 Revolving credit facility 3,748 2,777 2,897 Amortization of debt issuance costs and debt discount 882 883 1,015 Acquisition-related accrued interest — 1,085 1,373 Other 494 537 105 Interest expense 13,677 13,603 16,872 Interest (income) (1,901 ) (1,693 ) (1,966 ) $ 11,776 $ 11,910 $ 14,906 For the Year Ended June 30 2019 2018 2017 Depreciation and amortization Depreciation of property, plant and equipment $ 21,423 $ 21,044 $ 19,916 Amortization of intangible assets 6,092 5,851 5,950 Amortization of other assets 49 48 135 $ 27,564 $ 26,943 $ 26,001 For the Year Ended June 30 2019 2018 2017 Research and development expenditures $ 12,083 $ 9,998 $ 9,442 |
Balance Sheets-Additional Inf_2
Balance Sheets-Additional Information (Tables) | 12 Months Ended |
Jun. 30, 2019 | |
Balance Sheets Additional Information [Abstract] | |
Schedule of additional information of balance sheets | As of June 30 2019 2018 Accounts receivable, net Trade accounts receivable $ 163,464 $ 141,999 Allowance for doubtful accounts (4,442 ) (6,257 ) $ 159,022 $ 135,742 As of June 30 2019 2018 2017 Allowance for doubtful accounts Balance at beginning of period $ 6,257 $ 6,428 $ 4,953 Provision for bad debts (201 ) 166 1,412 Effect of changes in exchange rates 38 (215 ) 159 Bad debt write-offs (1,500 ) — — Bad debt recovery (152 ) (122 ) (96 ) Balance at end of period $ 4,442 $ 6,257 $ 6,428 As of June 30 2019 2018 Inventories Raw materials $ 64,441 $ 62,373 Work-in-process 10,699 14,731 Finished goods 123,182 101,066 $ 198,322 $ 178,170 As of June 30 2019 2018 Property, plant and equipment, net Land $ 10,152 $ 10,140 Buildings and improvements 71,036 68,769 Machinery and equipment 252,097 227,092 333,285 306,001 Accumulated depreciation (193,050 ) (175,893 ) $ 140,235 $ 130,108 As of June 30 Weighted- (Years) 2019 2018 Intangibles, net Cost Technology 13 $ 71,016 $ 69,475 Product registrations, marketing and distribution rights 9 17,858 17,902 Customer relationships 13 12,194 12,211 Trade names, trademarks and other 5 2,740 2,740 In-process research and development 1,800 1,800 105,608 104,128 Accumulated amortization Technology (29,333 ) (23,937 ) Product registrations, marketing and distribution rights (17,811 ) (17,902 ) Customer relationships (8,282 ) (7,614 ) Trade names, trademarks and other (2,704 ) (2,697 ) (58,130 ) (52,150 ) $ 47,478 $ 51,978 As of June 30 2019 2018 Goodwill roll-forward Balance at beginning of period $ 27,348 $ 23,982 Acquisition — 5,642 Translation — (2,276 ) Balance at end of period $ 27,348 $ 27,348 As of June 30 2019 2018 Other assets Equity method investments $ 4,196 $ 3,944 Insurance investments 5,431 5,235 Deferred financing fees 1,531 2,042 Deferred income taxes 16,770 15,424 Deposits 7,024 6,692 Indemnification asset 3,000 3,000 Fair value of derivative — 5,078 Other 7,496 5,369 $ 45,448 $ 46,784 As of June 30 2019 2018 Accrued expenses and other current liabilities Employee related $ 28,298 $ 27,333 Commissions and rebates 8,397 7,341 Insurance-related 1,279 1,168 Professional fees 5,212 4,350 Income and other taxes 6,067 3,610 Acquisition-related consideration — 12,845 Restructuring costs 3,590 — Other 15,655 14,497 $ 68,498 $ 71,144 As of June 30 2019 2018 Other liabilities U.S. pension plan $ 3,934 $ 2,910 International retirement plans 5,133 4,644 Supplemental retirement benefits, deferred compensation and other 7,605 10,792 Long term and deferred income taxes 8,978 9,729 Restructuring costs 2,000 — Other long term liabilities 15,144 15,627 $ 42,794 $ 43,702 As of June 30 2019 2018 Accumulated other comprehensive income (loss) Derivative instruments $ (594 ) $ 4,986 Foreign currency translation adjustment (71,225 ) (67,098 ) Unrecognized net pension gains (losses) (20,050 ) (18,213 ) (Provision) benefit for income taxes on derivative instruments 148 (1,241 ) (Provision) benefit for incomes taxes on long-term intercompany investments 8,166 8,166 (Provision) benefit for income taxes on pension gains (losses) (2,626 ) (3,083 ) $ (86,181 ) $ (76,483 ) |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of long term debt | As of June 30 2019 2018 Term A Loan due June 2022 $ 231,250 $ 243,750 Capitalized lease obligations 40 118 231,290 243,868 Unamortized debt issuance costs and debt discount (1,115 ) (1,487 ) 230,175 242,381 Less: current maturities (12,540 ) (12,579 ) $ 217,635 $ 229,802 |
Schedule of aggregate maturities of long term debt | For the Year Ended June 30 2020 $ 12,540 2021 18,750 2022 200,000 Total $ 231,290 |
Common Stock, Preferred Stock_2
Common Stock, Preferred Stock and Dividends (Tables) | 12 Months Ended |
Jun. 30, 2019 | |
Equity [Abstract] | |
Schedule of preferred shares and common shares | 2019 2018 2019 2018 As of June 30 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 20,287,574 19,992,204 Common stock–Class B 30,000,000 30,000,000 $ 0.0001 20,166,034 20,365,504 |
Stock Incentive Plan (Tables)
Stock Incentive Plan (Tables) | 12 Months Ended |
Jun. 30, 2019 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of activity for RSU | RSUs Grant Date Grant Date Performance-Based RSUs Granted 200,000 $ 19.63 $ 3,926 Time-Based RSUs Granted May 2018 50,000 $ 41.10 $ 2,055 Outstanding June 30, 2019 and 2018 250,000 $ 23.92 $ 5,981 |
Schedule of weighted-average grant-date fair value of the options | Option Weighted-Average Outstanding, June 30, 2018 95,900 $ 11.83 Exercised (95,900 ) $ 11.83 Outstanding, June 30, 2019 — $ — |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 12 Months Ended |
Jun. 30, 2019 | |
Compensation and Retirement Disclosure [Abstract] | |
Schedule of changes in projected benefit obligation, plan assets and the funded status | For the Year Ended June 30 2019 2018 Change in projected benefit obligation Projected benefit obligation at beginning of year $ 61,557 $ 63,260 Interest cost 2,407 2,157 Benefits paid (1,758 ) (2,196 ) Actuarial (gain) loss 6,321 (1,664 ) Projected benefit obligation at end of year $ 68,527 $ 61,557 For the Year Ended June 30 2019 2018 Change in plan assets Fair value of plan assets at beginning of year $ 58,648 $ 57,110 Actual return on plan assets 6,860 965 Employer contributions 842 2,768 Benefits paid (1,757 ) (2,195 ) Fair value of plan assets at end of year $ 64,593 $ 58,648 Funded status at end of year $ (3,934 ) $ (2,909 ) |
Schedule of accumulated other comprehensive (income) loss related to the pension plan | For the Year Ended June 30 2019 2018 Accumulated Other Comprehensive Income (Loss) Related to Pension Plan Balance at beginning of period $ (18,213 ) $ (18,059 ) Amortization of net actuarial loss 465 453 Current period net actuarial (loss) gain (2,302 ) (607 ) Net change (1,837 ) (154 ) Balance at end of period $ (20,050 ) $ (18,213 ) |
Schedule of net periodic pension expense | For the Year Ended June 30 2019 2018 2017 Service cost–benefits earned during the year $ — $ — $ 845 Interest cost on benefit obligation 2,407 2,157 2,045 Expected return on plan assets (2,842 ) (3,236 ) (3,389 ) Amortization of net actuarial loss 465 453 672 Curtailment expense — — 16 Settlement expense — — 1,702 Net periodic pension expense $ 30 $ (626 ) $ 1,891 |
Schedule of significant actuarial assumptions | For the Year Ended June 30 2019 2018 2017 Discount rate for service cost N/A N/A 4.0 % Discount rate for interest cost 3.1 % 3.9 % 3.2 % Expected rate of return on plan assets 4.9 % 5.6 % 6.1 % Discount rate for year-end benefit obligation 3.6 % 4.2 % 3.9 % |
Schedule of estimated future benefit payments, including benefits attributable to future service | For the Year Ended June 30 2020 $ 2,599 2021 2,878 2022 3,113 2023 3,318 2024 3,474 2025–2029 18,828 |
Schedule of weighted-average asset allocation of plan assets | Target Percentage of Plan Assets For the Year Ended June 30 2020 2019 2018 Debt securities 57%–77% 67 % 63 % Equity securities 18%–38% 28 % 26 % Global asset allocation/risk parity (1) 0%–15% 4 % 10 % Other 0%–10% 1 % 1 % (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, 2019 Level 1 Level 2 Level 3 Total Cash and cash equivalents $ 215 $ — $ — $ 215 Common-collective funds Global large cap equities — 13,995 4,016 18,011 Fixed income securities — 43,288 — 43,288 Global asset allocations/risk parity — 1,446 — 1,446 Other Global asset allocations/risk parity — — 1,447 1,447 Other — — 186 186 $ 215 $ 58,729 $ 5,649 $ 64,593 Fair Value Measurements Using As of June 30, 2018 Level 1 Level 2 Level 3 Total Cash and cash equivalents $ 428 $ — $ — $ 428 Common-collective funds Global large cap equities — 11,632 3,811 15,443 Fixed income securities — 36,671 — 36,671 Global asset allocations/risk parity — 2,957 — 2,957 Other Global asset allocations/risk parity — — 2,881 2,881 Other — — 268 268 $ 428 $ 51,260 $ 6,960 $ 58,648 |
Schedule of summary of the changes in the fair value of level 3 assets | Change in Fair Value of Level 3 assets 2019 2018 Balance at beginning of period $ 6,960 $ 15,959 Redemptions (4,336 ) (9,901 ) Purchases 2,800 — Change in fair value 225 902 Balance at end of period $ 5,649 $ 6,960 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Jun. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of income (loss) before income taxes | For the Year Ended June 30 2019 2018 2017 Domestic $ 2,331 $ 19,819 $ 18,015 Foreign 69,174 68,251 62,528 Income before income taxes $ 71,505 $ 88,070 $ 80,543 |
Schedule of components of the provision for income taxes | For the Year Ended June 30 2019 2018 2017 Current provision (benefit): Federal $ (459 ) $ 81 $ 383 State and local 102 1,744 724 Foreign 16,603 15,268 14,839 Total current provision 16,246 17,093 15,946 Deferred provision (benefit): Federal 858 2,746 4,675 State and local 432 2,156 251 Foreign (691 ) 769 (833 ) Change in valuation allowance–foreign (53 ) 423 (4,111 ) Total deferred provision (benefit) 546 6,094 (18 ) Provision for income taxes $ 16,792 $ 23,187 $ 15,928 |
Schedule of reconciliations of federal statutory rate to the Company's effective tax rate | For the Year Ended June 30 2019 2018 2017 Federal income tax rate 21.0 % 28.1 % 35.0 % State and local taxes, net of federal benefit 0.6 1.5 0.9 Foreign income tax rates 6.9 (1.5 ) (6.8 ) Foreign incentive tax rates (2.8 ) (3.3 ) (3.1 ) Domestic tax on foreign income — — 2.7 Changes in uncertain tax positions (1.0 ) 1.1 1.6 Permanent items 0.6 0.5 (0.9 ) Exercise of employee stock options (0.4 ) (4.3 ) (3.8 ) Global Intangible Low-Taxed Income 0.8 — — Mandatory toll charge from Tax Act (0.5 ) 0.5 — Reduction of domestic deferred tax assets — 2.6 — Reduction of foreign deferred tax assets — 1.3 — Recognition of federal tax credits (1.1 ) — — Recognition of foreign tax credits (1.4 ) (0.7 ) — Reclassification from accumulated other comprehensive income — 0.6 — Release of foreign valuation allowance — — (5.1 ) Other (0.8 ) (0.1) (0.7 ) Effective tax rate 23.5 % 26.3 % 19.8 % |
Schedule of the tax effects of significant temporary differences that comprise deferred tax assets and liabilities | As of June 30 2019 2018 Deferred tax assets: Employee related accruals $ 5,735 $ 4,952 Inventory 4,766 3,953 Environmental remediation 1,128 1,341 Net operating loss carry forwards–domestic 902 1,577 Net operating loss carry forwards–foreign 3,703 3,243 Other 6,302 9,986 22,536 25,052 Valuation allowance (808 ) (861 ) 21,728 24,191 Deferred tax liabilities: Property, plant and equipment and intangible assets (6,071 ) (8,957 ) Other (772 ) (1,906 ) (6,843 ) (10,863 ) Net deferred tax asset $ 14,885 $ 13,328 |
Schedule of deferred taxes included in the line items of the consolidated balance sheets | As of June 30 2019 2018 Other assets $ 16,770 $ 15,424 Other liabilities (1,885 ) (2,096 ) $ 14,885 $ 13,328 |
Schedule of the valuation allowance for deferred tax assets | As of June 30 2019 2018 2017 Balance at beginning of period $ 861 $ 438 $ 4,614 Provision for income taxes (53 ) 423 (4,111 ) Net operating loss utilization — — (65 ) Balance at end of period $ 808 $ 861 $ 438 |
Schedule of the reconciliation of the beginning and ending amount of unrecognized tax benefits | As of June 30 2019 2018 2017 Unrecognized tax benefits–beginning of period $ 7,000 $ 6,553 $ 4,946 Tax position changes–current period 528 1,749 1,490 Tax position changes–prior periods, net of settlements with tax authorities (317 ) (994 ) — Lapse of statute of limitations (1,053 ) — (391 ) Translation 185 (308 ) 508 Unrecognized tax benefits–end of period 6,343 7,000 6,553 Interest and penalties–end of period 750 633 449 Total liabilities related to uncertain tax $ 7,093 $ 7,633 $ 7,002 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Jun. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of future minimum lease commitments | For the Year Ended June 30 Capital leases Non-cancellable operating leases 2020 $ 40 $ 5,815 2021 — 4,160 2022 — 3,191 2023 — 1,445 2024 865 Thereafter — 765 Total minimum lease payments $ 40 $ 16,241 |
Derivatives (Tables)
Derivatives (Tables) | 12 Months Ended |
Jun. 30, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of significant outstanding derivatives employed to manage market risk and designated as cash flow hedges | Instrument Hedge Notional Consolidated Asset (Liability) June 30, June 30, Options Brazilian Real calls R$ 43,000 (1) $ 413 $ 71 Options Brazilian Real puts R$ 43,000 (1) $ (30 ) $ — Swap Interest rate swap $150,000 Other assets $ (977 ) $ 5,078 (1) We record the net fair values of our outstanding foreign currency option contracts within the respective balance sheet line item based on the net financial position and maturity date of the individual contracts as of the balance sheet date. Other current assets as of June 30, 2019 and June 30, 2018, included net fair values of $383 and $71, respectively. |
Schedule of consolidated statements of operations and other comprehensive income | For the Year Ended June 30 Gain (Loss) recorded in OCI Gain (Loss) recognized in consolidated Consolidated Statement of Instrument Hedge 2019 2018 Consolidated Operations 2019 2018 2019 2018 Options . . . . . Brazilian Real calls $ 474 $ (2,778 ) Cost of goods sold $ 1,069 $ 3,136 $ 563,371 $ 553,103 Swap . . . . . . . Interest rate swap $ (6,055 ) $ 5,078 Interest expense, net $ — $ — $ 11,776 $ 11,910 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Jun. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Schedule of fair value of derivative instruments based upon pricing models | As of June 30 2019 2018 Level 1 Level 2 Level 1 Level 2 Short-term investments $ 24,000 $ — $ 50,000 $ — Derivatives asset (liability) $ — $ 383 $ — $ 71 Interest rate swap (liability) $ — $ (977 ) $ — $ 5,078 |
Business Segments (Tables)
Business Segments (Tables) | 12 Months Ended |
Jun. 30, 2019 | |
Segment Reporting [Abstract] | |
Schedule of information regarding reportable segments | For the Year Ended June 30 2019 2018 2017 Net sales Animal Health $ 531,974 $ 531,727 $ 497,745 Mineral Nutrition 233,782 234,922 218,298 Performance Products 62,239 53,333 48,238 Total segments $ 827,995 $ 819,982 $ 764,281 Depreciation and amortization Animal Health $ 22,312 $ 21,447 $ 20,132 Mineral Nutrition 2,319 2,371 2,332 Performance Products 1,127 1,029 939 Total segments $ 25,758 $ 24,847 $ 23,403 Adjusted EBITDA Animal Health $ 136,049 $ 141,914 $ 130,261 Mineral Nutrition 15,712 18,583 17,426 Performance Products 4,728 1,881 2,057 Total segments $ 156,489 $ 162,378 $ 149,744 Reconciliation of income before income taxes to Income before income taxes $ 71,505 $ 88,070 $ 80,543 Interest expense, net 11,776 11,910 14,906 Depreciation and amortization–Total segments 25,758 24,847 23,403 Depreciation and amortization–Corporate 1,806 2,096 2,598 Corporate costs 38,452 33,420 29,625 Restructuring costs 6,281 — — Stock-based compensation 2,259 334 — Acquisition-related cost of goods sold — 1,671 — Acquisition-related accrued compensation — 1,152 1,680 Acquisition-related transaction costs 213 400 1,274 Acquisition-related other, net — (468 ) (972 ) Other (1,506 ) — — Pension settlement cost — — 1,702 Gain on insurance settlement — — (7,500 ) Foreign currency (gains) losses, net (55 ) (1,054 ) (113 ) Loss on extinguishment of debt — — 2,598 Adjusted EBITDA–Total segments $ 156,489 $ 162,378 $ 149,744 As of June 30 2019 2018 Identifiable assets Animal Health $ 508,864 $ 455,704 Mineral Nutrition 67,662 69,779 Performance Products 32,886 24,040 Total segments 609,412 549,523 Corporate 117,259 122,156 Total $ 726,671 $ 671,679 |
Schedule of geographic information regarding property, plant and equipment, net | As of June 30 2019 2018 Property, plant and equipment, net United States $ 54,999 $ 55,268 Israel 52,434 45,055 Brazil 19,647 19,653 Other 13,155 10,132 $ 140,235 $ 130,108 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies and New Accounting Standards (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | |
Accounting Policies [Abstract] | |||
Net income | $ 54,713 | $ 64,883 | $ 64,615 |
Weighted average number of shares - basic | 40,412 | 40,181 | 39,524 |
Dilutive effect of stock options and restricted stock units | 111 | 204 | 518 |
Weighted average number of shares - diluted | 40,523 | 40,385 | 40,042 |
Net income per share | |||
basic (in dollars per share) | $ 1.35 | $ 1.61 | $ 1.63 |
diluted (in dollars per share) | $ 1.35 | $ 1.61 | $ 1.61 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies and New Accounting Standards (Details 1) - USD ($) $ in Thousands | Jun. 30, 2019 | Jul. 01, 2018 | Jun. 30, 2018 |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||
Other current assets | $ 27,245 | $ 22,381 | |
Other assets | 45,448 | 46,784 | |
Accrued expenses and other current liabilities | 68,498 | 71,144 | |
Other liabilities | 42,794 | 43,702 | |
Retained earnings | 168,926 | $ 131,560 | |
Effect of adoption | |||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||
Other current assets | 225 | ||
Other assets | 225 | ||
Other liabilities | (216) | ||
Retained earnings | $ 666 | ||
Effect of adoption | ASU 2014-09, Revenue from Contracts with Customers (Topic 606) | |||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||
Other current assets | $ 2,100 | ||
Other assets | 2,325 | ||
Accrued expenses and other current liabilities | 343 | ||
Other liabilities | 2,837 | ||
Retained earnings | 1,245 | ||
Post-adoption | ASU 2014-09, Revenue from Contracts with Customers (Topic 606) | |||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||
Other current assets | 24,481 | ||
Other assets | 49,109 | ||
Accrued expenses and other current liabilities | 71,487 | ||
Other liabilities | 46,539 | ||
Retained earnings | $ 132,805 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies and New Accounting Standards (Details 2) - USD ($) $ in Thousands | Jun. 30, 2019 | Jun. 30, 2018 |
ASSETS | ||
Other current assets | $ 27,245 | $ 22,381 |
Other assets | 45,448 | 46,784 |
Other liabilities | 42,794 | 43,702 |
Retained earnings | 168,926 | $ 131,560 |
Effect of adoption | ||
ASSETS | ||
Other current assets | 225 | |
Other assets | 225 | |
Other liabilities | (216) | |
Retained earnings | $ 666 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies and New Accounting Standards (Details 3) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||
Net sales | $ 827,995 | $ 819,982 | $ 764,281 |
Provision for income taxes | 16,792 | 23,187 | 15,928 |
Net income | 54,713 | $ 64,883 | $ 64,615 |
Effect of adoption | |||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||
Net sales | 793 | ||
Provision for income taxes | 127 | ||
Net income | $ 666 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies and New Accounting Standards (Detail Textuals) - Accounts Receivable - Customer | 12 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Significant Accounting Policies And New Accounting Standards [Line Items] | ||
Number of largest customers | 10 | 10 |
Percentage of accounts receivable | 31.00% | 24.00% |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies and New Accounting Standards (Detail Textuals 1) - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2017 | |
Significant Accounting Policies And New Accounting Standards [Line Items] | ||
Impairment of intangible assets related to technology | $ 713 | |
Impairment of intangible assets related to IPR&D | 1,579 | |
Interest Rate Swap | ||
Significant Accounting Policies And New Accounting Standards [Line Items] | ||
Derivative, Notional Amount | $ 150,000 | $ 150,000 |
Building and Improvements | ||
Significant Accounting Policies And New Accounting Standards [Line Items] | ||
Depreciation methods | straight-line basis | |
Building and Improvements | Minimum | ||
Significant Accounting Policies And New Accounting Standards [Line Items] | ||
Estimated useful lives | 2 years | |
Building and Improvements | Maximum | ||
Significant Accounting Policies And New Accounting Standards [Line Items] | ||
Estimated useful lives | 30 years | |
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 | 1 year | |
Machinery and Equipment | Maximum | ||
Significant Accounting Policies And New Accounting Standards [Line Items] | ||
Estimated useful lives | 10 years | |
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 | 3 years | |
Computer Software | Maximum | ||
Significant Accounting Policies And New Accounting Standards [Line Items] | ||
Estimated useful lives | 7 years |
Statements of Operations-Addi_3
Statements of Operations-Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | |
Disaggregation of Revenue [Line Items] | |||
Total net sales | $ 827,995 | $ 819,982 | $ 764,281 |
United States | |||
Disaggregation of Revenue [Line Items] | |||
Total net sales | 480,101 | 490,880 | 483,794 |
Latin America and Canada | |||
Disaggregation of Revenue [Line Items] | |||
Total net sales | 152,380 | 143,231 | 113,187 |
Europe, Middle East and Africa | |||
Disaggregation of Revenue [Line Items] | |||
Total net sales | 105,365 | 110,377 | 95,838 |
Asia/Pacific | |||
Disaggregation of Revenue [Line Items] | |||
Total net sales | 90,149 | 75,494 | 71,462 |
Animal Health | |||
Disaggregation of Revenue [Line Items] | |||
Total net sales | 531,974 | 531,727 | 497,745 |
Animal Health | MFAs and other | |||
Disaggregation of Revenue [Line Items] | |||
Total net sales | 350,468 | 336,666 | 321,430 |
Animal Health | Nutritional Specialties | |||
Disaggregation of Revenue [Line Items] | |||
Total net sales | 113,215 | 122,978 | 111,282 |
Animal Health | Vaccines | |||
Disaggregation of Revenue [Line Items] | |||
Total net sales | 68,291 | 72,083 | 65,033 |
Mineral Nutrition | |||
Disaggregation of Revenue [Line Items] | |||
Total net sales | 233,782 | 234,922 | 218,298 |
Performance Products | |||
Disaggregation of Revenue [Line Items] | |||
Total net sales | $ 62,239 | $ 53,333 | $ 48,238 |
Statements of Operations-Addi_4
Statements of Operations-Additional Information (Details 1) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | |
Interest expense, net | |||
Amortization of debt issuance costs and debt discount | $ 882 | $ 883 | $ 1,015 |
Acquisition-related accrued interest | 0 | 1,085 | 1,373 |
Other | 494 | 537 | 105 |
Interest expense | 13,677 | 13,603 | 16,872 |
Interest (income) | (1,901) | (1,693) | (1,966) |
Interest expense, net | 11,776 | 11,910 | 14,906 |
Depreciation and amortization | |||
Depreciation of property, plant and equipment | 21,423 | 21,044 | 19,916 |
Amortization of intangible assets | 6,092 | 5,851 | 5,950 |
Amortization of other assets | 49 | 48 | 135 |
Depreciation and amortization | 27,564 | 26,943 | 26,001 |
Research and development expenditures | 12,083 | 9,998 | 9,442 |
Term Loan | |||
Interest expense, net | |||
Interest expense | 8,553 | 8,321 | 11,482 |
Revolving credit facility | |||
Interest expense, net | |||
Interest expense | $ 3,748 | $ 2,777 | $ 2,897 |
Statements of Operations-Addi_5
Statements of Operations-Additional Information (Detail Textuals) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | |
Statements Of Operations Additional Information [Line Items] | |||
Amortization of capitalized software costs | $ 1,217 | $ 1,519 | $ 2,199 |
Expected amortization of intangibles, 2020 | 6,033 | ||
Expected amortization of intangibles, 2021 | 5,487 | ||
Expected amortization of intangibles, 2022 | 5,381 | ||
Expected amortization of intangibles, 2024 | 5,380 | ||
Expected amortization of intangibles, 2025 | 5,161 | ||
Expected amortization of intangibles, thereafter | 18,236 | ||
Disaggregation of Revenue [Abstract] | |||
Deferred revenue | 5,464 | 4,530 | |
Current deferred revenue, included in accrued expense and other current liabilities | $ 965 | $ 508 | |
Customer | Minimum | |||
Disaggregation of Revenue [Abstract] | |||
Payment Term | 30 days | ||
Average worldwide collection period for accounts receivable | 60 days | ||
Customer | Maximum | |||
Disaggregation of Revenue [Abstract] | |||
Payment Term | 120 days | ||
Average worldwide collection period for accounts receivable | 70 days |
Balance Sheets-Additional Inf_3
Balance Sheets-Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2019 | Jun. 30, 2018 | |
Accounts receivable, net | |||||
Trade accounts receivable | $ 163,464 | $ 141,999 | |||
Allowance for doubtful accounts | $ (6,257) | $ (6,428) | $ (6,428) | (4,442) | (6,257) |
Trade accounts receivable, net | 159,022 | 135,742 | |||
Allowance for doubtful accounts | |||||
Balance at beginning of period | 6,257 | 6,428 | 4,953 | ||
Provision for bad debts | (201) | 166 | 1,412 | ||
Effect of changes in exchange rates | 38 | (215) | 159 | ||
Bad debt write-offs | (1,500) | 0 | 0 | ||
Bad debt recovery | (152) | (122) | (96) | ||
Balance at end of period | $ 4,442 | $ 6,257 | $ 6,428 | ||
Inventories | |||||
Raw materials | 64,441 | 62,373 | |||
Work-in-process | 10,699 | 14,731 | |||
Finished goods | 123,182 | 101,066 | |||
Inventory, net | 198,322 | 178,170 | |||
Property, plant and equipment, net | |||||
Property, plant and equipment, gross | 333,285 | 306,001 | |||
Accumulated depreciation | (193,050) | (175,893) | |||
Property, plant and equipment, net | 140,235 | 130,108 | |||
Land | |||||
Property, plant and equipment, net | |||||
Property, plant and equipment, gross | 10,152 | 10,140 | |||
Buildings and improvements | |||||
Property, plant and equipment, net | |||||
Property, plant and equipment, gross | 71,036 | 68,769 | |||
Machinery and equipment | |||||
Property, plant and equipment, net | |||||
Property, plant and equipment, gross | $ 252,097 | $ 227,092 |
Balance Sheets-Additional Inf_4
Balance Sheets-Additional Information (Details 1) - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Intangibles, net : Cost | ||
Intangibles | $ 105,608 | $ 104,128 |
Accumulated amortization | (58,130) | (52,150) |
Intangibles, net | 47,478 | 51,978 |
Goodwill roll-forward | ||
Balance at beginning of period | 27,348 | 23,982 |
Acquisition | 0 | 5,642 |
Translation | 0 | (2,276) |
Balance at end of period | 27,348 | 27,348 |
Other assets | ||
Equity method investments | 4,196 | 3,944 |
Insurance investments | 5,431 | 5,235 |
Deferred financing fees | 1,531 | 2,042 |
Deferred income taxes | 16,770 | 15,424 |
Deposits | 7,024 | 6,692 |
Indemnification asset | 3,000 | 3,000 |
Fair value of derivative | 0 | 5,078 |
Other | 7,496 | 5,369 |
Other assets, total | 45,448 | 46,784 |
Accrued expenses and other current liabilities | ||
Employee related | 28,298 | 27,333 |
Commissions and rebates | 8,397 | 7,341 |
Insurance-related | 1,279 | 1,168 |
Professional fees | 5,212 | 4,350 |
Income and other taxes | 6,067 | 3,610 |
Acquisition-related consideration | 0 | 12,845 |
Restructuring costs | 3,590 | 0 |
Other | 15,655 | 14,497 |
Accrued expenses and other current liabilities, total | 68,498 | 71,144 |
Other liabilities | ||
U.S. pension plan | 3,934 | 2,910 |
International retirement plans | 5,133 | 4,644 |
Supplemental retirement benefits, deferred compensation and other | 7,605 | 10,792 |
Long term and deferred income taxes | 8,978 | 9,729 |
Restructuring costs | 2,000 | 0 |
Other long term liabilities | 15,144 | 15,627 |
Other liabilities, total | 42,794 | 43,702 |
Accumulated other comprehensive income (loss) | ||
Derivative instruments | (594) | 4,986 |
Foreign currency translation adjustment | (71,225) | (67,098) |
Unrecognized net pension gains (losses) | (20,050) | (18,213) |
(Provision) benefit for income taxes on derivative instruments | 148 | (1,241) |
(Provision) benefit for incomes taxes on long-term intercompany investments | 8,166 | 8,166 |
(Provision) benefit for income taxes on pension gains (losses) | (2,626) | (3,083) |
Accumulated other comprehensive income (loss) | (86,181) | (76,483) |
Technology | ||
Intangibles, net : Cost | ||
Intangibles | 71,016 | 69,475 |
Accumulated amortization | $ (29,333) | (23,937) |
Weighted-Average Useful Life (Years) | 13 years | |
Product registrations, marketing and distribution rights | ||
Intangibles, net : Cost | ||
Intangibles | $ 17,858 | 17,902 |
Accumulated amortization | $ (17,811) | (17,902) |
Weighted-Average Useful Life (Years) | 9 years | |
Customer relationships | ||
Intangibles, net : Cost | ||
Intangibles | $ 12,194 | 12,211 |
Accumulated amortization | $ (8,282) | (7,614) |
Weighted-Average Useful Life (Years) | 13 years | |
Trade names, trademarks and other | ||
Intangibles, net : Cost | ||
Intangibles | $ 2,740 | 2,740 |
Accumulated amortization | $ (2,704) | (2,697) |
Weighted-Average Useful Life (Years) | 5 years | |
In-process research and development | ||
Intangibles, net : Cost | ||
Intangibles | $ 1,800 | $ 1,800 |
Balance Sheets-Additional Inf_5
Balance Sheets-Additional Information (Detail Textuals) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||
Jan. 31, 2019 | Jul. 31, 2018 | Sep. 30, 2017 | Jun. 30, 2019 | Jun. 30, 2019 | Jun. 30, 2018 | |
Additional Information Of Balance Sheet [Line Items] | ||||||
Equity method investments | $ 4,196 | $ 4,196 | $ 3,944 | |||
Accumulated depreciation on internal-use software costs | 3,475 | 3,475 | 2,700 | |||
Construction-in-progress | 15,630 | 15,630 | 7,783 | |||
Amount of acquired business approximately | 9,838 | 15,000 | ||||
Aggregate cash payment | 55,000 | |||||
Additional payment | 4,840 | |||||
Accrued expenses and other current liabilities | 68,498 | 68,498 | 71,144 | |||
Other liabilities | 42,794 | 42,794 | 43,702 | |||
MVP | ||||||
Additional Information Of Balance Sheet [Line Items] | ||||||
Amount of acquired business approximately | $ 3,775 | $ 9,000 | 12,775 | |||
Animal Health | ||||||
Additional Information Of Balance Sheet [Line Items] | ||||||
Equity method investments | 3,287 | 3,287 | $ 3,432 | |||
Amount of acquired business approximately | $ 15,000 | |||||
Pre tax restructuring charges | 6,281 | |||||
Charges related to termination of a contract manufacturing agreement | 3,500 | |||||
Employee separation costs | 2,781 | |||||
Expense paid for restructuring | 691 | |||||
Accrued expenses and other current liabilities | 3,590 | 3,590 | ||||
Other liabilities | 2,000 | 2,000 | ||||
Additional charge for employee separation costs | $ 1,000 | $ 1,000 |
Debt - (Summary of long-term de
Debt - (Summary of long-term debt (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Jun. 30, 2018 |
Debt Disclosure [Abstract] | ||
Term A Loan due June 2022 | $ 231,250 | $ 243,750 |
Capitalized lease obligations | 40 | 118 |
Long-term debt including current maturities | 231,290 | 243,868 |
Unamortized debt issuance costs and debt discount | (1,115) | (1,487) |
Long-term debt after debt issuance costs | 230,175 | 242,381 |
Less: current maturities | (12,540) | (12,579) |
Long-term debt | $ 217,635 | $ 229,802 |
Debt - Aggregate maturities of
Debt - Aggregate maturities of long-term debt (Details 1) - USD ($) $ in Thousands | Jun. 30, 2019 | Jun. 30, 2018 |
Debt Disclosure [Abstract] | ||
2020 | $ 12,540 | |
2021 | 18,750 | |
2022 | 200,000 | |
Total | $ 231,290 | $ 243,868 |
Debt (Detail Textuals)
Debt (Detail Textuals) - USD ($) $ in Thousands | 12 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | Jul. 31, 2017 | |
Debt Instrument [Line Items] | ||||
Loss on extinguishment of debt | $ 0 | $ 0 | $ 2,598 | |
Outstanding borrowings under Revolving credit facility | 96,000 | $ 70,000 | ||
Interest Rate Swap | ||||
Debt Instrument [Line Items] | ||||
Derivative, notional amount | $ 150,000 | $ 150,000 | ||
Percentage of interest rate | 1.8325% | |||
Credit Facilities | Minimum | ||||
Debt Instrument [Line Items] | ||||
Credit agreement required covenant-earnings to borrowing ratio | 3.00:1.00 | |||
Credit Facilities | Maximum | ||||
Debt Instrument [Line Items] | ||||
Credit agreement required covenant-earnings to borrowing ratio | 4.00:1.00 | |||
Credit Facilities | Israel subsidiaries | ||||
Debt Instrument [Line Items] | ||||
Maturity dates | mature in October 2019 and March 2020 | |||
Aggregate available credit facilities | $ 14,000 | |||
Credit Facilities | 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 | |||
Credit Facilities | LIBOR | Israel subsidiaries | ||||
Debt Instrument [Line Items] | ||||
Percentage of basis spread on variable rate | 2.25% | |||
Credit Facilities | Prime Rate | Israel subsidiaries | ||||
Debt Instrument [Line Items] | ||||
Percentage of basis spread on variable rate | 0.50% | |||
Credit Agreement | Term A Loan | ||||
Debt Instrument [Line Items] | ||||
Aggregate principal amount | $ 250,000 | |||
Weighted-average interest rates | 3.52% | 3.33% | ||
Percentage of interest rate | 3.50% | |||
Credit Agreement | Revolving credit facility (the "Revolver") | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing capacity | $ 250,000 | |||
Current borrowings under the Revolver | $ 96,000 | |||
Outstanding borrowings under Revolving credit facility | 3,009 | |||
Aggregate available credit facilities | $ 150,991 | |||
Weighted-average interest rates | 3.86% | 3.20% | ||
Percentage of interest rate | 3.90% | |||
Credit Agreement | Credit Facilities | ||||
Debt Instrument [Line Items] | ||||
Maturity dates | June 29, 2022 | |||
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 | |||
Credit Agreement | Credit Facilities | Federal Funds Effective Rate | ||||
Debt Instrument [Line Items] | ||||
Percentage of basis spread on variable rate | 0.50% | |||
Credit Agreement | Credit Facilities | Base Rate | ||||
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 3.00:1.00; (ii) less than 3.00:1.00 but greater than or equal to 2.25:1.00; or, (iii) less than 2.25:1.00, the Credit Facilities | |||
Interest rate, description | 1.00%; 0.75%; and, 0.50% | |||
Credit Agreement | Credit Facilities | LIBOR | ||||
Debt Instrument [Line Items] | ||||
Covenant requirement, permitted leverage ratio | equal to or greater than 3.00:1.00; (ii) less than 3.00:1.00 but greater than or equal to 2.25:1.00; or, (iii) less than 2.25:1.00, the Credit Facilities | |||
Interest rate, description | 2.00%; 1.75%; and, 1.50% | |||
Percentage of basis spread on variable rate | 1.00% |
Common Stock, Preferred Stock_3
Common Stock, Preferred Stock and Dividends - Summary of preferred and common shares (Details) - $ / shares | Jun. 30, 2019 | Jun. 30, 2018 |
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 | 20,287,574 | 19,992,204 |
Common stock, shares outstanding | 20,287,574 | 19,992,204 |
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 | 20,365,504 |
Common stock, shares outstanding | 20,166,034 | 20,365,504 |
Common Stock, Preferred Stock_4
Common Stock, Preferred Stock and Dividends (Detail Textuals) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | |
Class of Stock [Line Items] | |||
Dividends paid | $ 18,592 | $ 16,073 | $ 15,827 |
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% | ||
Class A common stock | |||
Class of Stock [Line Items] | |||
Dividends paid | $ 18,592 | ||
Class B common stock | |||
Class of Stock [Line Items] | |||
Class B common stock converted into Class A common shares | 199,470 | 261,332 | |
Common stock holder entitled to vote per share | 10 votes | ||
Dividends paid | $ 18,592 |
Stock Incentive Plan (Details)
Stock Incentive Plan (Details) $ / shares in Units, $ in Thousands | 12 Months Ended |
Jun. 30, 2019USD ($)$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
RSUs | shares | 250,000 |
Grant Date Fair Value per RSU Share Outstanding | $ / shares | $ 23.92 |
Grant Date Fair Value, RSUs Outstanding | $ | $ 5,981 |
Performance-Based RSUs Granted | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
RSUs Granted | shares | 200,000 |
Grant Date Fair Value per RSU Share Granted | $ / shares | $ 19.63 |
Grant Date Fair Value, RSUs Granted | $ | $ 3,926 |
Time-Based RSUs Granted | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
RSUs Granted | shares | 50,000 |
Grant Date Fair Value per RSU Share Granted | $ / shares | $ 41.10 |
Grant Date Fair Value, RSUs Granted | $ | $ 2,055 |
Stock Incentive Plan (Details 1
Stock Incentive Plan (Details 1) - Stock Option | 12 Months Ended |
Jun. 30, 2019$ / sharesshares | |
Option Shares | |
Outstanding, June 30, 2018 | shares | 95,900 |
Exercised | shares | (95,900) |
Outstanding, June 30, 2019 | shares | 0 |
Weighted- Average Exercise Price Per Share | |
Outstanding, June 30, 2018 | $ / shares | $ 11.83 |
Exercised | $ / shares | 11.83 |
Outstanding, June 30, 2019 | $ / shares | $ 0 |
Stock Incentive Plan (Detail Te
Stock Incentive Plan (Detail Textuals) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | ||
May 31, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Mar. 31, 2008 | |
Stock Option | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares granted by PAHC's Compensation Committee | 0 | 95,900 | ||
Stock 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 | |||
Stock Option | 2008 Incentive Plan (the "Incentive Plan") | Class A common stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares available for grant | 4,881,620 | |||
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 | |||
Percentage of risk-free rate of return | 2.59% | |||
Percentage of expected volatility | 31.94% | |||
Percentage of expected dividend yield | 0.95% | |||
Stock-based compensation expense current year | $ 2,259 | $ 334 | ||
Expected stock-based compensation expense in 2020 | 2,259 | |||
Expected stock-based compensation expense in 2021 | $ 1,129 | |||
Restricted Stock Units (RSUs) | Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Percentage of vest increments under restricted stock units on the 90-day average | 15.00% | |||
Share price | $ 30 | |||
Restricted Stock Units (RSUs) | Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Percentage of vest increments under restricted stock units on the 90-day average | 100.00% | |||
Share price | $ 80 |
Related Party Transactions (Det
Related Party Transactions (Detail Textuals) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | |
Certain relatives of Jack C. Bendheim | Compensation and benefit for services provided | |||
Related Party Transaction [Line Items] | |||
Aggregate compensation and benefits | $ 1,969 | $ 1,857 | $ 1,735 |
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, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | |
Change in projected benefit obligation | |||
Projected benefit obligation at beginning of year | $ 61,557 | $ 63,260 | |
Interest cost | 2,407 | 2,157 | $ 2,045 |
Benefits paid | (1,758) | (2,196) | |
Actuarial (gain) loss | 6,321 | (1,664) | |
Projected benefit obligation at end of year | 68,527 | 61,557 | 63,260 |
Change in plan assets | |||
Balance at beginning of period | 58,648 | 57,110 | |
Actual return on plan assets | 6,860 | 965 | |
Employer contributions | 842 | 2,768 | |
Benefits paid | (1,757) | (2,195) | |
Balance at end of period | 64,593 | 58,648 | $ 57,110 |
Funded status at end of year | $ (3,934) | $ (2,909) |
Employee Benefit Plans - Chan_2
Employee Benefit Plans - Change in Accumulated Other Comprehensive (Income) Loss (Details 1) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | |
Accumulated Other Comprehensive (Income) Loss Related to Pension Plan | |||
Balance at beginning of period | $ (18,213) | $ (18,059) | |
Amortization of net actuarial loss | 465 | 453 | |
Current period net actuarial loss (gain) | (2,302) | (607) | |
Net change | (1,837) | (154) | $ 12,918 |
Balance at end of period | $ (20,050) | $ (18,213) | $ (18,059) |
Employee Benefit Plans - Net pe
Employee Benefit Plans - Net periodic pension expense (Details 2) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | |
Compensation and Retirement Disclosure [Abstract] | |||
Service cost-benefits earned during the year | $ 0 | $ 0 | $ 845 |
Interest cost on benefit obligation | 2,407 | 2,157 | 2,045 |
Expected return on plan assets | (2,842) | (3,236) | (3,389) |
Amortization of net actuarial loss | 465 | 453 | 672 |
Curtailment expense | 0 | 0 | 16 |
Settlement expense | 0 | 0 | 1,702 |
Net periodic pension expense | $ 30 | $ (626) | $ 1,891 |
Employee Benefit Plans - Signif
Employee Benefit Plans - Significant actuarial assumptions for plan (Details 3) | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | |
Compensation and Retirement Disclosure [Abstract] | |||
Discount rate for service cost | 4.00% | ||
Discount rate for interest cost | 3.10% | 3.90% | 3.20% |
Expected rate of return on plan assets | 4.90% | 5.60% | 6.10% |
Discount rate for year-end benefit obligation | 3.60% | 4.20% | 3.90% |
Employee Benefit Plans - Estima
Employee Benefit Plans - Estimated future benefit payments including benefits attributable to future service (Details 4) $ in Thousands | Jun. 30, 2019USD ($) |
Compensation and Retirement Disclosure [Abstract] | |
2020 | $ 2,599 |
2021 | 2,878 |
2022 | 3,113 |
2023 | 3,318 |
2024 | 3,474 |
2025-2029 | $ 18,828 |
Employee Benefit Plans - Plan's
Employee Benefit Plans - Plan's target asset allocations and weighted average asset allocation of plan assets (Details 5) | Jun. 30, 2019 | Jun. 30, 2018 | |
Debt securities | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Percentage of Plan Assets | 67.00% | 63.00% | |
Equity securities | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Percentage of Plan Assets | 28.00% | 26.00% | |
Global asset allocation/risk parity | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Percentage of Plan Assets | [1] | 4.00% | 10.00% |
Other | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Percentage of Plan Assets | 1.00% | 1.00% | |
Minimum | Debt securities | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Target allocation for 2018 | 57.00% | ||
Minimum | Equity securities | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Target allocation for 2018 | 18.00% | ||
Minimum | Global asset allocation/risk parity | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Target allocation for 2018 | [1] | 0.00% | |
Minimum | Other | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Target allocation for 2018 | 0.00% | ||
Maximum | Debt securities | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Target allocation for 2018 | 77.00% | ||
Maximum | Equity securities | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Target allocation for 2018 | 38.00% | ||
Maximum | Global asset allocation/risk parity | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Target allocation for 2018 | [1] | 15.00% | |
Maximum | Other | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Target allocation for 2018 | 10.00% | ||
[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. |
Employee Benefit Plans - Fair v
Employee Benefit Plans - Fair values of plan assets by asset category (Details 6) - USD ($) $ in Thousands | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 |
Defined Benefit Plan Disclosure [Line Items] | |||
Fair values of plan assets by asset category | $ 64,593 | $ 58,648 | $ 57,110 |
Level 1 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair values of plan assets by asset category | 215 | 428 | |
Level 2 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair values of plan assets by asset category | 58,729 | 51,260 | |
Level 3 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair values of plan assets by asset category | 5,649 | 6,960 | $ 15,959 |
Cash and cash equivalents | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair values of plan assets by asset category | 215 | 428 | |
Cash and cash equivalents | Level 1 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair values of plan assets by asset category | 215 | 428 | |
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 | 18,011 | 15,443 | |
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 | 13,995 | 11,632 | |
Common-collective funds - Global large cap equities | Level 3 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair values of plan assets by asset category | 4,016 | 3,811 | |
Common-collective funds - Fixed income securities | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair values of plan assets by asset category | 43,288 | 36,671 | |
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 | 43,288 | 36,671 | |
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 | 1,446 | 2,957 | |
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 | 1,446 | 2,957 | |
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 | 1,447 | 2,881 | |
Other - Global asset allocations/risk parity | Level 1 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair values of plan assets by asset category | 0 | 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 | 1,447 | 2,881 | |
Other | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair values of plan assets by asset category | 186 | 268 | |
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 | $ 186 | $ 268 |
Employee Benefit Plans - Chan_3
Employee Benefit Plans - Change in Fair Value of Level 3 Assets (Details 7) - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Change in Fair Value Level 3 assets | ||
Balance at beginning of period | $ 58,648 | $ 57,110 |
Balance at end of period | 64,593 | 58,648 |
Level 3 | ||
Change in Fair Value Level 3 assets | ||
Balance at beginning of period | 6,960 | 15,959 |
Redemptions | (4,336) | (9,901) |
Purchases | 2,800 | 0 |
Change in fair value | 225 | 902 |
Balance at end of period | $ 5,649 | $ 6,960 |
Employee Benefit Plans (Detail
Employee Benefit Plans (Detail Textuals) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Curtailment (gain) loss | $ (6,822) | ||
Contribution to pension plan during 2020 | $ 670 | ||
Amortization of unrecognized net actuarial loss during 2020 | 485 | ||
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) | $ 1 | ||
Pension settlement cost | $ 0 | $ 0 | 1,702 |
Domestic noncontributory defined benefit pension plan | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Curtailment (gain) loss | $ (6,822) |
Employee Benefit Plans (Detai_2
Employee Benefit Plans (Detail Textuals 1) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | |
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% 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 | $ 5,201 | $ 4,937 | $ 4,154 |
Employers matching contribution, annual vesting percentage | 100.00% | ||
Non-elective contribution | 6.00% | ||
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 | $ 5,685 | 4,009 | $ 4,304 |
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 | $ 17,391 | $ 15,536 |
Income Taxes - Income (loss) be
Income Taxes - Income (loss) before income taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | |
Income Tax Disclosure [Abstract] | |||
Domestic | $ 2,331 | $ 19,819 | $ 18,015 |
Foreign | 69,174 | 68,251 | 62,528 |
Income before income taxes | $ 71,505 | $ 88,070 | $ 80,543 |
Income Taxes - Components of pr
Income Taxes - Components of provision for income taxes (Details 1) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | |
Current provision (benefit): | |||
Federal | $ (459) | $ 81 | $ 383 |
State and local | 102 | 1,744 | 724 |
Foreign | 16,603 | 15,268 | 14,839 |
Total current provision | 16,246 | 17,093 | 15,946 |
Deferred provision (benefit): | |||
Federal | 858 | 2,746 | 4,675 |
State and local | 432 | 2,156 | 251 |
Foreign | (691) | 769 | (833) |
Total deferred provision (benefit) | 546 | 6,094 | (18) |
Provision for income taxes | 16,792 | 23,187 | 15,928 |
Foreign | |||
Deferred provision (benefit): | |||
Change in valuation allowance | $ (53) | $ 423 | $ (4,111) |
Income Taxes - Reconciliations
Income Taxes - Reconciliations of Federal statutory rate to effective tax rate (Details 2) | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | |
Income Tax Disclosure [Line Items] | |||
Federal income tax rate | 21.00% | 28.10% | 35.00% |
State and local taxes, net of federal benefit | 0.60% | 1.50% | 0.90% |
Foreign income tax rates | 6.90% | (1.50%) | (6.80%) |
Foreign incentive tax rates | (2.80%) | (3.30%) | (3.10%) |
Domestic tax on foreign income | 0.00% | 0.00% | 2.70% |
Changes in uncertain tax positions | (1.00%) | 1.10% | 1.60% |
Permanent items | 0.60% | 0.50% | (0.90%) |
Exercise of employee stock options | (0.40%) | (4.30%) | (3.80%) |
Global Intangible Low-Taxed Income | 0.80% | 0.00% | 0.00% |
Mandatory toll charge from Tax Act | (0.50%) | 0.50% | 0.00% |
Reduction of domestic deferred tax assets | 0.00% | 2.60% | 0.00% |
Reduction of foreign deferred tax assets | 0.00% | 1.30% | 0.00% |
Recognition of federal tax credits | (1.10%) | 0.00% | 0.00% |
Recognition of foreign tax credits | (1.40%) | (0.70%) | (0.00%) |
Reclassification from accumulated other comprehensive income | 0.00% | 0.60% | 0.00% |
Other | (0.80%) | (0.10%) | (0.70%) |
Effective tax rate | 23.50% | 26.30% | 19.80% |
Foreign | |||
Income Tax Disclosure [Line Items] | |||
Release of valuation allowance | 0.00% | 0.00% | (5.10%) |
Income Taxes - Tax effects of s
Income Taxes - Tax effects of significant temporary differences of deferred tax assets and liabilities (Details 3) - USD ($) $ in Thousands | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2016 |
Deferred tax assets: | ||||
Employee related accruals | $ 5,735 | $ 4,952 | ||
Inventory | 4,766 | 3,953 | ||
Environmental remediation | 1,128 | 1,341 | ||
Net operating loss carry forwards-domestic | 902 | 1,577 | ||
Net operating loss carry forwards-foreign | 3,703 | 3,243 | ||
Other | 6,302 | 9,986 | ||
Deferred tax assets, gross | 22,536 | 25,052 | ||
Valuation allowance | (808) | (861) | $ (438) | $ (4,614) |
Deferred tax assets, net of valuation allowance | 21,728 | 24,191 | ||
Deferred tax liabilities: | ||||
Property, plant and equipment and intangible assets | (6,071) | (8,957) | ||
Other liabilities | (772) | (1,906) | ||
Deferred tax liabilities, net | (6,843) | (10,863) | ||
Net deferred tax asset | $ 14,885 | $ 13,328 |
Income Taxes - Deferred taxes i
Income Taxes - Deferred taxes included in consolidated balance sheets (Details 4) - USD ($) $ in Thousands | Jun. 30, 2019 | Jun. 30, 2018 |
Income Tax Disclosures [Line Items] | ||
Deferred tax assets, gross | $ 22,536 | $ 25,052 |
Net deferred tax asset | 14,885 | 13,328 |
Other assets | ||
Income Tax Disclosures [Line Items] | ||
Deferred tax assets, gross | 16,770 | 15,424 |
Other liabilities | ||
Income Tax Disclosures [Line Items] | ||
Net deferred tax liability | $ (1,885) | $ (2,096) |
Income Taxes - Valuation allowa
Income Taxes - Valuation allowance for deferred tax assets (Details 5) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | |
Deferred Tax Assets Valuation Allowance [Roll Forward] | |||
Balance at beginning of period | $ 861 | $ 438 | $ 4,614 |
Provision for income taxes | (53) | 423 | (4,111) |
Net operating loss utilization | 0 | 0 | (65) |
Balance at end of period | $ 808 | $ 861 | $ 438 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of unrecognized tax benefits (Details 6) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Unrecognized tax benefits-beginning of period | $ 7,000 | $ 6,553 | $ 4,946 |
Tax position changes-current period | 528 | 1,749 | 1,490 |
Tax position changes-prior periods, net of settlements with tax authorities | (317) | (994) | 0 |
Lapse of statute of limitations | (1,053) | 0 | (391) |
Translation | 185 | (308) | 508 |
Unrecognized tax benefits-end of period | 6,343 | 7,000 | 6,553 |
Interest and penalties-end of period | 750 | 633 | 449 |
Total liabilities related to uncertain tax positions | $ 7,093 | $ 7,633 | $ 7,002 |
Income Taxes (Detail Textuals)
Income Taxes (Detail Textuals) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | |
Income Tax Disclosure [Line Items] | |||
Uncertain tax positions reversal in future period | $ 1,868 | ||
Federal income tax rate | 21.00% | 28.10% | 35.00% |
Remeasurement of deferred tax assets and liabilities to reflect the reduced income tax rate | $ 2,289 | ||
One time transition tax expense deemed repatriation | 403 | ||
Interest and penalties expense | $ 94 | $ 203 | $ 116 |
Provision for income taxes related to the previously recorded one-time mandatory toll charge on the deemed repatriation of undistributed earnings of foreign subsidiaries | 360 | ||
Provision of income taxes related to retroactive elections made on certain of our foreign tax credits | 1,032 | ||
State Jurisdiction | |||
Income Tax Disclosure [Line Items] | |||
Net operating loss carry forwards | 15,067 | ||
Foreign Jurisdiction | |||
Income Tax Disclosure [Line Items] | |||
Net operating loss carry forwards | 13,754 | ||
Global Intangible Low-Taxed Income | |||
Income Tax Disclosure [Line Items] | |||
Federal tax expense | $ 537 |
Commitments and Contingencies -
Commitments and Contingencies - Future minimum lease commitments (Details) $ in Thousands | Jun. 30, 2019USD ($) |
Capital leases | |
2020 | $ 40 |
2021 | 0 |
2022 | 0 |
2023 | 0 |
2024 | 0 |
Thereafter | 0 |
Total minimum lease payments | 40 |
Non-cancellable operating leases | |
2020 | 5,815 |
2021 | 4,160 |
2022 | 3,191 |
2023 | 1,445 |
2024 | 865 |
Thereafter | 765 |
Total minimum lease payments | $ 16,241 |
Commitments and Contingencies_2
Commitments and Contingencies (Detail Textuals) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Sep. 30, 2012PRPs | Jun. 30, 2019USD ($) | Jun. 30, 2018USD ($) | Jun. 30, 2017USD ($) | |
Commitments And Contingencies [Line Items] | ||||
Operating leases, rent expense | $ 9,103 | $ 8,453 | $ 7,715 | |
Number of potentially responsible parties | PRPs | 140 | |||
Term of employment and severance agreement | up to 15 months | |||
Current and long-term liabilities | ||||
Commitments And Contingencies [Line Items] | ||||
Accrual for environmental loss contingencies payments | $ 5,890 | $ 6,833 |
Derivatives (Details)
Derivatives (Details) - Cash flow hedges R$ in Thousands, $ in Thousands | Jun. 30, 2019USD ($) | Jun. 30, 2019BRL (R$) | Jun. 30, 2018USD ($) | |
Options | Brazilian Real calls | ||||
Derivative [Line Items] | ||||
Notional amount | R$ | R$ 43000 | |||
Fair value | [1] | $ 413 | $ 71 | |
Options | Brazilian Real puts | ||||
Derivative [Line Items] | ||||
Notional amount | R$ | R$ 43000 | |||
Fair value | [1] | (30) | 0 | |
Swap | Interest rate swap | ||||
Derivative [Line Items] | ||||
Notional amount | 150,000 | |||
Swap | Interest rate swap | Other assets | ||||
Derivative [Line Items] | ||||
Fair value | $ 5,078 | |||
Swap | Interest rate swap | Other liabilities | ||||
Derivative [Line Items] | ||||
Fair value | $ (977) | |||
[1] | We record the net fair values of our outstanding foreign currency option contracts within the respective balance sheet line item based on the net financial position and maturity date of the individual contracts as of the balance sheet date. Other current assets as of June 30, 2019 and June 30, 2018, included net fair values of $383 and $71, respectively. |
Derivatives (Details 1)
Derivatives (Details 1) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | |
Derivative [Line Items] | |||
Cost of goods sold | $ 563,371 | $ 553,103 | $ 516,038 |
Interest expense, net | 11,776 | 11,910 | $ 14,906 |
Options | Cash flow hedges | Brazilian Real calls | Other comprehensive income (loss) | |||
Derivative [Line Items] | |||
Gain (loss) recorded in OCI | 475 | (2,778) | |
Options | Cash flow hedges | Brazilian Real calls | Cost of goods sold | |||
Derivative [Line Items] | |||
Gain (loss) recognized in consolidated statements of operations | 1,069 | 3,136 | |
Swap | Interest Rate Swap | Cash flow hedges | Other comprehensive income (loss) | |||
Derivative [Line Items] | |||
Gain (loss) recorded in OCI | (6,055) | 5,078 | |
Gain (loss) recognized in consolidated statements of operations | $ 0 | $ 0 |
Derivatives (Detail Textuals)
Derivatives (Detail Textuals) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | |
Derivative [Line Items] | |||
Maximum maturity period for Foreign Currency Derivatives | Jun. 30, 2020 | ||
Other current assets | |||
Derivative [Line Items] | |||
Fair values of total foreign currency derivatives outstanding | $ 383 | $ 71 | |
Interest rate swap | |||
Derivative [Line Items] | |||
Derivative, notional amount | $ 150,000 | $ 150,000 | |
Percentage of interest rate | 1.8325% | 1.8325% |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Jun. 30, 2018 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Short-term Investments | $ 24,000 | $ 50,000 |
Interest rate swap | 0 | 5,078 |
Level 1 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Short-term Investments | 24,000 | 50,000 |
Derivatives asset (liability) | 0 | 0 |
Interest rate swap | 0 | 0 |
Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Short-term Investments | 0 | 0 |
Derivatives asset (liability) | 383 | 71 |
Interest rate swap | $ 5,078 | |
Interest rate swap (liability) | $ (977) |
Business Segments (Details)
Business Segments (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | |
Segment Reporting Information [Line Items] | ||||
Total net sales | $ 827,995 | $ 819,982 | $ 764,281 | |
Depreciation and amortization | 27,564 | 26,943 | 26,001 | |
Adjusted EBITDA - Total segments | 156,489 | 162,378 | 149,744 | |
Reconciliation of income before income taxes to Adjusted EBITDA | ||||
Income before income taxes | 71,505 | 88,070 | 80,543 | |
Interest expense, net | 11,776 | 11,910 | 14,906 | |
Depreciation and amortization | 27,564 | 26,943 | 26,001 | |
Corporate costs | 38,452 | 33,420 | 29,625 | |
Stock-based compensation | 2,259 | 334 | 0 | |
Acquisition-related cost of goods sold | 0 | 1,671 | 0 | |
Acquisition-related accrued compensation | 0 | 1,152 | 1,680 | |
Acquisition-related transaction costs | $ 213 | 213 | 400 | |
Acquisition-related other, net | 0 | 3,908 | 2,081 | |
Other | (1,506) | 0 | 0 | |
Pension settlement cost | 0 | 0 | 1,702 | |
Gain on insurance settlement | 0 | 0 | (7,500) | |
Foreign currency (gains) losses, net | (55) | (1,054) | (113) | |
Loss on extinguishment of debt | 0 | 0 | 2,598 | |
Adjusted EBITDA - Total segments | 156,489 | 162,378 | 149,744 | |
Identifiable assets | 726,671 | 726,671 | 671,679 | |
Animal Health | ||||
Segment Reporting Information [Line Items] | ||||
Total net sales | 531,974 | 531,727 | 497,745 | |
Depreciation and amortization | 22,312 | 21,447 | 20,132 | |
Adjusted EBITDA - Total segments | 136,049 | 141,914 | 130,261 | |
Reconciliation of income before income taxes to Adjusted EBITDA | ||||
Depreciation and amortization | 22,312 | 21,447 | 20,132 | |
Restructuring costs | 6,281 | |||
Adjusted EBITDA - Total segments | 136,049 | 141,914 | 130,261 | |
Mineral Nutrition | ||||
Segment Reporting Information [Line Items] | ||||
Total net sales | 233,782 | 234,922 | 218,298 | |
Depreciation and amortization | 2,319 | 2,371 | 2,332 | |
Adjusted EBITDA - Total segments | 15,712 | 18,583 | 17,426 | |
Reconciliation of income before income taxes to Adjusted EBITDA | ||||
Depreciation and amortization | 2,319 | 2,371 | 2,332 | |
Adjusted EBITDA - Total segments | 15,712 | 18,583 | 17,426 | |
Performance Products | ||||
Segment Reporting Information [Line Items] | ||||
Total net sales | 62,239 | 53,333 | 48,238 | |
Depreciation and amortization | 1,127 | 1,029 | 939 | |
Adjusted EBITDA - Total segments | 4,728 | 1,881 | 2,057 | |
Reconciliation of income before income taxes to Adjusted EBITDA | ||||
Depreciation and amortization | 1,127 | 1,029 | 939 | |
Adjusted EBITDA - Total segments | 4,728 | 1,881 | 2,057 | |
Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Total net sales | 827,995 | 819,982 | 764,281 | |
Depreciation and amortization | 25,758 | 24,847 | 23,403 | |
Adjusted EBITDA - Total segments | 156,489 | 162,378 | 149,744 | |
Reconciliation of income before income taxes to Adjusted EBITDA | ||||
Income before income taxes | 71,505 | 88,070 | 80,543 | |
Interest expense, net | 11,776 | 11,910 | 14,906 | |
Depreciation and amortization | 25,758 | 24,847 | 23,403 | |
Restructuring costs | 6,281 | 0 | 0 | |
Stock-based compensation | 2,259 | 334 | 0 | |
Acquisition-related cost of goods sold | 0 | 1,671 | 0 | |
Acquisition-related accrued compensation | 0 | 1,152 | 1,680 | |
Acquisition-related transaction costs | 213 | 213 | 400 | 1,274 |
Acquisition-related other, net | 0 | (468) | (972) | |
Other | (1,506) | 0 | 0 | |
Pension settlement cost | 0 | 0 | 1,702 | |
Gain on insurance settlement | 0 | 0 | (7,500) | |
Foreign currency (gains) losses, net | (55) | (1,054) | (113) | |
Loss on extinguishment of debt | 0 | 0 | (2,598) | |
Adjusted EBITDA - Total segments | 156,489 | 162,378 | 149,744 | |
Identifiable assets | 609,412 | 609,412 | 549,523 | |
Operating Segments | Animal Health | ||||
Segment Reporting Information [Line Items] | ||||
Total net sales | 531,974 | 531,727 | 497,745 | |
Depreciation and amortization | 22,312 | 21,447 | 20,132 | |
Adjusted EBITDA - Total segments | 136,049 | 141,914 | 130,261 | |
Reconciliation of income before income taxes to Adjusted EBITDA | ||||
Depreciation and amortization | 22,312 | 21,447 | 20,132 | |
Adjusted EBITDA - Total segments | 136,049 | 141,914 | 130,261 | |
Identifiable assets | 508,864 | 508,864 | 455,704 | |
Operating Segments | Mineral Nutrition | ||||
Segment Reporting Information [Line Items] | ||||
Total net sales | 233,782 | 234,922 | 218,298 | |
Depreciation and amortization | 2,319 | 2,371 | 2,332 | |
Adjusted EBITDA - Total segments | 15,712 | 18,583 | 17,426 | |
Reconciliation of income before income taxes to Adjusted EBITDA | ||||
Depreciation and amortization | 2,319 | 2,371 | 2,332 | |
Adjusted EBITDA - Total segments | 15,712 | 18,583 | 17,426 | |
Identifiable assets | 67,662 | 67,662 | 69,779 | |
Operating Segments | Performance Products | ||||
Segment Reporting Information [Line Items] | ||||
Total net sales | 62,239 | 53,333 | 48,238 | |
Depreciation and amortization | 1,127 | 1,029 | 939 | |
Adjusted EBITDA - Total segments | 4,728 | 1,881 | 2,057 | |
Reconciliation of income before income taxes to Adjusted EBITDA | ||||
Depreciation and amortization | 1,127 | 1,029 | 939 | |
Adjusted EBITDA - Total segments | 4,728 | 1,881 | 2,057 | |
Identifiable assets | 32,886 | 32,886 | 24,040 | |
Corporate | ||||
Segment Reporting Information [Line Items] | ||||
Depreciation and amortization | 1,806 | 2,096 | 2,598 | |
Reconciliation of income before income taxes to Adjusted EBITDA | ||||
Depreciation and amortization | 1,806 | 2,096 | 2,598 | |
Corporate costs | 38,452 | 33,420 | $ 29,625 | |
Identifiable assets | $ 117,259 | $ 117,259 | $ 122,156 |
Business Segments (Detail 1)
Business Segments (Detail 1) - USD ($) $ in Thousands | Jun. 30, 2019 | Jun. 30, 2018 |
Segment Reporting Information [Line Items] | ||
Property, plant and equipment, net | $ 140,235 | $ 130,108 |
United States | ||
Segment Reporting Information [Line Items] | ||
Property, plant and equipment, net | 54,999 | 55,268 |
Israel | ||
Segment Reporting Information [Line Items] | ||
Property, plant and equipment, net | 52,434 | 45,055 |
Brazil | ||
Segment Reporting Information [Line Items] | ||
Property, plant and equipment, net | 19,647 | 19,653 |
Other | ||
Segment Reporting Information [Line Items] | ||
Property, plant and equipment, net | $ 13,155 | $ 10,132 |
Business Segments (Detail Textu
Business Segments (Detail Textuals) - USD ($) $ in Thousands | Jun. 30, 2019 | Jun. 30, 2018 |
Segment Reporting Information [Line Items] | ||
Equity method investments | $ 4,196 | $ 3,944 |
Animal Health | ||
Segment Reporting Information [Line Items] | ||
Equity method investments | 3,287 | 3,432 |
Performance Products | ||
Segment Reporting Information [Line Items] | ||
Equity method investments | $ 759 | $ 437 |