Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Mar. 31, 2017 | May 01, 2017 | |
Entity Registrant Name | PHIBRO ANIMAL HEALTH CORP | |
Entity Central Index Key | 1,069,899 | |
Trading Symbol | pahc | |
Current Fiscal Year End Date | --06-30 | |
Entity Filer Category | Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2017 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 | |
Class A common stock | ||
Entity Common Stock, Shares Outstanding | 18,753,979 | |
Class B common stock | ||
Entity Common Stock, Shares Outstanding | 20,887,811 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | |
Income Statement [Abstract] | ||||
Net sales | $ 189,861 | $ 183,461 | $ 569,446 | $ 562,354 |
Cost of goods sold | 129,241 | 124,671 | 384,329 | 382,895 |
Gross profit | 60,620 | 58,790 | 185,117 | 179,459 |
Selling, general and administrative expenses | 30,646 | 37,619 | 110,702 | 113,809 |
Operating income | 29,974 | 21,171 | 74,415 | 65,650 |
Interest expense, net | 3,929 | 4,265 | 11,708 | 12,051 |
Foreign currency (gains) losses, net | (403) | (2,243) | (617) | (5,139) |
Income before income taxes | 26,448 | 19,149 | 63,324 | 58,738 |
Provision (benefit) for income taxes | 2,805 | 572 | 14,087 | (8,770) |
Net income | $ 23,643 | $ 18,577 | $ 49,237 | $ 67,508 |
Net income per share | ||||
basic (in dollars per share) | $ 0.60 | $ 0.47 | $ 1.25 | $ 1.72 |
diluted (in dollars per share) | $ 0.59 | $ 0.46 | $ 1.23 | $ 1.69 |
Weighted average common shares outstanding | ||||
basic (in shares) | 39,512 | 39,356 | 39,443 | 39,203 |
diluted (in shares) | 40,059 | 40,000 | 39,988 | 39,996 |
Dividends per share (in dollars per share) | $ 0.10 | $ 0.10 | $ 0.30 | $ 0.30 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 23,643 | $ 18,577 | $ 49,237 | $ 67,508 |
Change in fair value of derivative instruments | 758 | 4,316 | 1,062 | 1,322 |
Foreign currency translation adjustment | 4,107 | 4,935 | 918 | (14,780) |
Unrecognized net pension gains (losses) | 111 | 446 | 11,951 | 1,338 |
(Provision) benefit for income taxes | (332) | (1,828) | (4,976) | 487 |
Other comprehensive income (loss) | 4,644 | 7,869 | 8,955 | (11,633) |
Comprehensive income (loss) | $ 28,287 | $ 26,446 | $ 58,192 | $ 55,875 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2017 | Jun. 30, 2016 |
ASSETS | ||
Cash and cash equivalents | $ 49,310 | $ 33,605 |
Accounts receivable, net | 113,130 | 123,790 |
Inventories, net | 163,831 | 167,691 |
Other current assets | 21,273 | 17,745 |
Total current assets | 347,544 | 342,831 |
Property, plant and equipment, net | 127,235 | 127,323 |
Intangibles, net | 58,447 | 60,095 |
Goodwill | 21,121 | 21,121 |
Other assets | 47,931 | 56,465 |
Total assets | 602,278 | 607,835 |
LIABILITIES AND STOCKHOLDERS' EQUITY | ||
Current portion of long-term debt | 2,900 | 2,907 |
Accounts payable | 53,271 | 60,167 |
Accrued expenses and other current liabilities | 50,126 | 45,703 |
Total current liabilities | 106,297 | 108,777 |
Revolving credit facility | 30,000 | 69,000 |
Long-term debt | 276,565 | 278,265 |
Other liabilities | 50,005 | 61,313 |
Total liabilities | 462,867 | 517,355 |
Commitments and contingencies (Note 8) | ||
Common stock, par value $0.0001 per share; 300,000,000 Class A shares authorized, 18,737,899 and 18,519,757 shares issued and outstanding at March 31, 2017, and June 30, 2016, respectively; 30,000,000 Class B shares authorized, 20,887,811 shares issued and outstanding at March 31, 2017, and June 30, 2016 | 4 | 4 |
Preferred stock, par value $0.0001 per share; 16,000,000 shares authorized, no shares issued and outstanding | ||
Paid-in capital | 120,879 | 118,299 |
Retained earnings | 71,358 | 33,962 |
Accumulated other comprehensive income (loss) | (52,830) | (61,785) |
Total stockholders' equity | 139,411 | 90,480 |
Total liabilities and stockholders' equity | $ 602,278 | $ 607,835 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parentheticals) - $ / shares | Mar. 31, 2017 | Jun. 30, 2016 |
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 | 18,737,899 | 18,519,757 |
Common stock, shares outstanding | 18,737,899 | 18,519,757 |
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 | 20,887,811 | 20,887,811 |
Common stock, shares outstanding | 20,887,811 | 20,887,811 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
OPERATING ACTIVITIES | ||
Net income | $ 49,237 | $ 67,508 |
Adjustments to reconcile net income to net cash provided (used) by operating activities: | ||
Depreciation and amortization | 19,604 | 16,678 |
Amortization of debt issuance costs and debt discount | 761 | 734 |
Acquisition-related cost of goods sold | 1,601 | |
Acquisition-related accrued compensation | 1,260 | 1,260 |
Acquisition-related accrued interest | 1,314 | 1,083 |
Pension settlement cost | 1,702 | |
Deferred income taxes | 4,068 | (23,117) |
Foreign currency (gains) losses, net | (798) | (5,635) |
Other | 546 | 286 |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | 10,020 | (6,556) |
Inventories, net | 3,871 | (19,822) |
Other current assets | (2,599) | (991) |
Other assets | (456) | (1,770) |
Accounts payable | (6,388) | (11,715) |
Accrued expenses and other liabilities | 2,668 | (8,918) |
Net cash provided (used) by operating activities | 84,810 | 10,626 |
INVESTING ACTIVITIES | ||
Capital expenditures | (15,377) | (28,648) |
Business acquisition | (46,546) | |
Other, net | (1,791) | 142 |
Net cash provided (used) by investing activities | (17,168) | (75,052) |
FINANCING ACTIVITIES | ||
Revolving credit facility borrowings | 118,500 | 222,500 |
Revolving credit facility repayments | (157,500) | (143,500) |
Payments of long-term debt, capital leases and other | (3,502) | (3,198) |
Proceeds from common shares issued | 2,580 | 3,965 |
Dividends paid | (11,841) | (11,767) |
Net cash provided (used) by financing activities | (51,763) | 68,000 |
Effect of exchange rate changes on cash | (174) | (565) |
Net increase (decrease) in cash and cash equivalents | 15,705 | 3,009 |
Cash and cash equivalents at beginning of period | 33,605 | 29,216 |
Cash and cash equivalents at end of period | $ 49,310 | $ 32,225 |
Description of Business
Description of Business | 9 Months Ended |
Mar. 31, 2017 | |
Description Of Business [Abstract] | |
Description of Business | 1. Description of Business Phibro Animal Health Corporation (“Phibro” or “PAHC”) and its subsidiaries (collectively, 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, automotive, 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. The unaudited consolidated financial information for the three and nine months ended March 31, 2017 and 2016, is presented on the same basis as the financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2016 (the “Annual Report”), filed with the Securities and Exchange Commission on August 29, 2016 (File no. 001-36410). In the opinion of management, these financial statements include all adjustments necessary for a fair statement of financial position, results of operations and cash flows for the interim periods, and the adjustments are of a normal and recurring nature. The financial results for any interim period are not necessarily indicative of the results for the full year. The consolidated balance sheet information as of June 30, 2016, was derived from the audited consolidated financial statements, which include the accounts of Phibro and its consolidated subsidiaries, but does not include all disclosures required by accounting principles generally accepted in the United States of America (“GAAP”). The unaudited consolidated financial information should be read in conjunction with the consolidated financial statements and notes thereto included in the Annual Report. The consolidated financial statements include the accounts of Phibro and its consolidated subsidiaries. The decision whether or not to consolidate an entity requires consideration of majority voting interests, as well as effective control over the entity. Intercompany balances and transactions have been eliminated in the consolidated financial statements. |
Summary of Significant Accounti
Summary of Significant Accounting Policies and New Accounting Standards | 9 Months Ended |
Mar. 31, 2017 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies and New Accounting Standards | 2. Summary of Significant Accounting Policies and New Accounting Standards Our significant accounting policies are described in the notes to the consolidated financial statements included in our Annual Report. As of March 31, 2017, there have been no material changes to any of the significant accounting policies contained therein, except for the application of Accounting Standards Update (“ASU”) 2015-03, Interest—Imputation of Interest (Subtopic 835-30) Revisions of Previously Issued Financial Statements During the three months ended June 30, 2016, the Company determined that amortization expense related to product-related intangible assets should be recorded in cost of goods sold rather than in selling, general and administrative expense within the consolidated statement of operations. The Company has revised its prior period financial statements, to correct the classification of amortization expense to increase cost of goods sold and reduce gross profit and selling, general and administrative expenses by $1,165 and $3,072 for the three and nine months ended March 31, 2016, respectively. These revisions had no impact on the Company’s previously reported net income (loss) or cash flows. The Company evaluated the impact of the revisions on prior periods, assessing materiality quantitatively and qualitatively, and concluded the errors were not material to any previously issued financial statements. 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 equivalents resulting from the assumed exercise of stock options. For the three and nine months ended March 31, 2017 and 2016, all common share equivalents were included in the calculation of diluted net income per share. Three Months Nine Months For the Periods Ended March 31 2017 2016 2017 2016 Net income $ 23,643 $ 18,577 $ 49,237 $ 67,508 Weighted average number of shares – basic 39,512 39,356 39,443 39,203 Dilutive effect of stock options 547 644 545 793 Weighted average number of shares – diluted 40,059 40,000 39,988 39,996 Net income per share basic $ 0.60 $ 0.47 $ 1.25 $ 1.72 diluted $ 0.59 $ 0.46 $ 1.23 $ 1.69 Dividends We declared and paid quarterly cash dividends of $0.10 per share, totaling $3,959 and $11,841 during the three and nine months ended March 31, 2017, respectively, to holders of our Class A common stock and Class B common stock. New Accounting Standards Financial Accounting Standards Board (“FASB”) ASU 2017-04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business, ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments ASU 2016-02, Leases (Topic 842) ASU 2015-11, Inventory (Topic 330), requires entities to measure inventory at the lower of cost and net realizable value (“NRV”). NRV is defined as “the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation.” The guidance is effective for annual periods beginning after December 15, 2016, and interim periods within those years. We do not expect adoption of this guidance to have a material effect on our consolidated financial statements. ASU 2015-05, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40) ASU 2015-03, Interest—Imputation of Interest (Subtopic 835-30) ASU 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (Subtopic 205-40) ASU 2014-09, Revenue from Contracts with Customers (Topic 606) Deferral of the Effective Date Principal versus Agent Considerations Identifying Performance Obligations and Licensing Narrow-Scope Improvements and Practical Expedients . |
Statements of Operations-Additi
Statements of Operations-Additional Information | 9 Months Ended |
Mar. 31, 2017 | |
Supplemental Income Statement Elements [Abstract] | |
Statements of Operations-Additional Information | 3. Statements of Operations—Additional Information Three Months Nine Months For the Periods Ended March 31 2017 2016 2017 2016 Interest expense, net Term B loan $ 2,859 $ 2,888 $ 8,630 $ 8,750 Revolving credit facility 642 720 2,328 1,322 Amortization of debt issuance costs and debt discount 253 251 761 734 Acquisition-related accrued interest 459 394 1,314 1,083 Other 37 79 165 335 Interest expense 4,250 4,332 13,198 12,224 Interest (income) (321 ) (67 ) (1,490 ) (173 ) $ 3,929 $ 4,265 $ 11,708 $ 12,051 Three Months Nine Months For the Periods Ended March 31 2017 2016 2017 2016 Depreciation and amortization Depreciation of property, plant and equipment $ 5,400 $ 4,328 $ 15,083 $ 12,514 Amortization of intangible assets 1,436 1,469 4,398 3,988 Amortization of other assets 6 59 123 176 $ 6,842 $ 5,856 $ 19,604 $ 16,678 The provision (benefit) for income taxes for the three and nine months ended March 31, 2017, included a benefit of $3,780 due to the reversal of the valuation allowance we previously had recorded against certain foreign deferred tax assets and also included a $1,442 benefit related to the exercise of employee stock options. Based on continued profitability in a foreign subsidiary, we concluded that it was more likely than not that the value of the related deferred tax assets would be realized, and it was no longer necessary to maintain a valuation allowance. The provision (benefit) for income taxes for the three and nine months ended March 31, 2016, included a benefit of $2,536 and $21,323, respectively, due to the reversal of the valuation allowance we previously had recorded against domestic deferred tax assets. Based on continued domestic profitability, we concluded that it was more likely than not that the value of domestic deferred tax assets would be realized, and it was no longer necessary to maintain a valuation allowance. |
Balance Sheets-Additional Infor
Balance Sheets-Additional Information | 9 Months Ended |
Mar. 31, 2017 | |
Balance Sheets Additional Information [Abstract] | |
Balance Sheets-Additional Information | 4. Balance Sheets—Additional Information As of March 31, 2017 June 30, 2016 Inventories Raw materials $ 60,802 $ 51,369 Work-in-process 9,814 8,074 Finished goods 93,215 108,248 $ 163,831 $ 167,691 Goodwill balances did not change during the nine months ended March 31, 2017. 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 $4,049 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 March 31, 2017 June 30, 2016 Accrued expenses and other current liabilities Employee related $ 23,070 $ 21,712 Commissions and rebates 4,730 3,722 Insurance related 1,568 1,780 Professional fees 4,560 3,573 Income and other taxes 3,296 1,910 Deferred consideration on acquisitions — 1,250 Other 12,902 11,756 $ 50,126 $ 45,703 As of March 31, 2017 June 30, 2016 Accumulated other comprehensive income (loss) Derivative instruments $ 3,717 $ 2,655 Foreign currency translation adjustment (40,986 ) (41,904 ) Unrecognized net pension gains (losses) (19,026 ) (30,977 ) (Provision) benefit for income taxes on derivative instruments (1,954 ) (1,548 ) (Provision) benefit for incomes taxes on long-term intercompany investments 8,166 8,166 (Provision) benefit for income taxes on pension gains (losses) (2,747 ) 1,823 $ (52,830 ) $ (61,785 ) |
Debt
Debt | 9 Months Ended |
Mar. 31, 2017 | |
Debt Disclosure [Abstract] | |
Debt | 5. Debt Revolving Credit Facility and Term B Loan We have a revolving credit facility (the “Revolver”), where we can borrow up to $200,000, subject to the terms of the agreement, and a term B loan (the “Term B Loan,” and together with the Revolver, the “Credit Facilities”). The Revolver, as amended, has applicable margins equal to 2.50%, 2.75% or 3.00%, in the case of LIBOR loans and 1.50%, 1.75% or 2.00%, in the case of base rate loans; the applicable margins are based on the First Lien Net Leverage Ratio. The Term B Loan has applicable margins equal to 3.00% in the case of LIBOR loans and 2.00% in the case of base rate loans. The LIBOR rate on the Term B Loan is subject to a floor of 1.00%. The Revolver requires, among other things, the maintenance of a maximum consolidated first lien net debt to consolidated EBITDA leverage ratio, calculated on a trailing four quarter basis, and contains an acceleration clause should an event of default (as defined in the agreement governing the Credit Facilities) occur. As of March 31, 2017, we were in compliance with the covenants of the Credit Facilities. As of March 31, 2017, we had $30,000 in borrowings under the Revolver and had outstanding letters of credit of $14,518 leaving $155,482 available for borrowings and letters of credit under the Revolver. We obtain letters of credit in connection with certain regulatory and insurance obligations and other contractual obligations. The tenors of these letters of credit are all one year or less. The weighted-average interest rates for the Revolver and Term B Loan were 3.39% and 4.00%, respectively, for the nine months ended March 31, 2017. Long-Term Debt As of March 31, 2017 June 30, 2016 Term B Loan due April 2021 $ 282,025 $ 284,200 Capitalized lease obligations — 7 282,025 284,207 Unamortized debt issuance costs and debt discount (2,560 ) (3,035 ) Less: current maturities (2,900 ) (2,907 ) $ 276,565 $ 278,265 |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Mar. 31, 2017 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 6. Related Party Transactions Certain relatives of Jack C. Bendheim provided services to us as employees or consultants and received aggregate compensation and benefits of $339 and $1,387 during the three and nine months ended March 31, 2017, respectively, and $388 and $1,515 during the three and nine months ended March 31, 2016, 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 | 9 Months Ended |
Mar. 31, 2017 | |
Compensation and Retirement Disclosure [Abstract] | |
Employee Benefit Plans | 7. Employee Benefit Plans The Company maintains 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. In July 2016, we amended our domestic noncontributory defined benefit pension plan to eliminate credit for future service and compensation increases, effective as of September 30, 2016. The amendment resulted in a curtailment of the pension plan. During the three months ended September 30, 2016, we recorded a pension curtailment gain of $6,822 in other comprehensive income and an offsetting reduction in the liability for pension benefits included in other liabilities. We also modified the 401(k) retirement savings plan, effective October 1, 2016, to include, for all domestic employees, a non-elective Company contribution of 3% of compensation and an additional discretionary contribution of up to 4% of compensation, depending on the employee’s age and years of service. Separately, we offered a lump sum settlement option to certain pension plan participants. During the three months ended December 31, 2016, we recognized a partial settlement of the pension plan with respect to the lump sum settlement, which resulted in a charge to the consolidated statement of operations of $1,702, which we recorded as a component of selling, general and administrative expenses. Net periodic pension expense was: Three Months Nine months For the Periods Ended March 31 2017 2016 2017 2016 Service cost – benefits earned during the period $ — $ 735 $ 845 $ 2,204 Interest cost on benefit obligation 498 723 1,546 2,170 Expected return on plan assets (834 ) (794 ) (2,540 ) (2,382 ) Amortization of net actuarial (gain) loss and prior service 111 446 563 1,338 Settlement cost — — 1,702 — Net periodic pension expense $ (225 ) $ 1,110 $ 2,116 $ 3,330 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Mar. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 8. Commitments and Contingencies Environmental Our operations and properties are subject to extensive federal, state, local and foreign laws and regulations, including those governing pollution; protection of the environment; the use, management, and release of hazardous materials, substances and wastes; air emissions; greenhouse gas emissions; water use, supply and discharges; the investigation and remediation of contamination; the manufacture, distribution, and sale of regulated materials, including pesticides; the importing, exporting and transportation of products; and the health and safety of our employees (collectively, “Environmental Laws”). As such, the nature of our current and former operations exposes us to the risk of claims with respect to such matters, including fines, penalties, and remediation obligations that may be imposed by regulatory authorities. Under certain circumstances, we might be required to curtail operations until a particular problem is remedied. Known costs and expenses under Environmental Laws incidental to ongoing operations, including the cost of litigation proceedings relating to environmental matters, are included within operating results. Potential costs and expenses may also be incurred in connection with the repair or upgrade of facilities to meet existing or new requirements under Environmental Laws or to investigate or remediate potential or actual contamination and from time to time we establish reserves for such contemplated investigation and remediation costs. In many instances, the ultimate costs under Environmental Laws and the 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 a facility in Santa Fe Springs, California, operated by our subsidiary Phibro-Tech, Inc. (“Phibro-Tech”). 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 groundwater contamination at its site is 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 nearby property owner has filed a complaint in the Superior Court of the State of California against many of the PRPs allegedly associated with the groundwater plume affected by the Omega Chemical Site (including Phibro-Tech) for alleged contamination of groundwater underneath its property, and a group of companies that sent chemicals to the Omega Chemical Site for processing and recycling has filed a complaint under CERCLA, RCRA and the common law public nuisance doctrine 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 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 $7,205 and $7,024 at March 31, 2017, and June 30, 2016, 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 During the three months ended March 31, 2017, we recorded a $7,500 gain in selling, general and administrative expenses resulting from a payment to us by an insurance carrier. The payment reflected the settlement of our claims against the carrier under our liability insurance policies, which arose from damages incurred in fiscal year 2010 by certain customers resulting from the use of one of our animal health products. We previously paid our customers for the damages and recognized the cost in the consolidated statement of operations prior to fiscal year 2017. PAHC and its subsidiaries are party to a number of claims and lawsuits arising out of the normal course of business including product liability, 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. |
Derivatives
Derivatives | 9 Months Ended |
Mar. 31, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives | 9. Derivatives We monitor our exposure to foreign currency exchange rates and use derivatives (currency option contracts) to manage certain of these risks. These derivatives generally have an expiration/maturity of two years or less and are intended to hedge cash flows related to the purchase of inventory. 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). We record the portion of the changes in the value of the derivative, related to a hedged asset or liability (the effective portion), in accumulated other comprehensive income (loss). As the hedged item is sold, we recognize the gain or loss recorded in accumulated other comprehensive income (loss) to the consolidated statements of operations on the same line where the hedged item is charged when released/sold. We immediately recognize in the consolidated statements of operations in the same line as the hedged item, the portion of the changes in fair value of derivatives used as cash flow hedges that is not offset by changes in the expected cash flows related to a recognized asset or liability (the ineffective portion). We routinely assess whether the derivatives used to hedge transactions are effective. If we determine that 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.” The following table details the Company’s outstanding derivatives that are designated and effective as cash flow hedges as of March 31, 2017: Instrument Hedge Notional Fair value as of March 31, June 30, Options Brazilian Real calls R$58,500 $ 3,717 $ 3,027 Options Brazilian Real puts R$58,500 $ — $ (372 ) The fair values at March 31, 2017, are unrealized and will fluctuate based on future exchange rates until the derivative contracts mature. Other comprehensive income (loss) for the three and nine months ended March 31, 2017, included $758 and $1,062, respectively, of net unrecognized gains related to these contracts. Accumulated other comprehensive income (loss) at March 31, 2017, included $3,717 of net unrecognized gains on derivative instruments; we estimate that $1,082 of those gains will be recognized in earnings within the next twelve months. At June 30, 2016, realized losses of $1,528 related to matured contracts were recorded as a component of inventory and subsequently recognized in cost of goods sold during the six months ended December 31, 2016. At March 31, 2017, realized gains of $580 related to matured contracts were recorded as a component of inventory. We anticipate the gains will be recognized as an offset to cost of goods sold within the next twelve months. We recognize gains (losses) related to these derivative instruments as a component of cost of goods sold at the time the hedged item is sold. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Mar. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 10. 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 March 31, 2017, and June 30, 2016, we used a variety of methods and assumptions that were based on estimates of market conditions and risks existing at the time. 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. The tenors of these letters of credit are all one year or less. Long Term Debt We record the Term B Loan and the Revolver at book value in our consolidated financial statements. We believe the carrying value of the Term B Loan is approximately equal to the fair value, which is based on quoted broker prices that are Level 2 inputs. We believe the carrying value of the Revolver is approximately equal to the fair value due to the variable nature of the instrument. Deferred Consideration on Acquisitions We estimated the fair value of the deferred contingent consideration on acquisitions using the income approach, based on the Company’s current sales forecast related to the acquired business. 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. As of March 31, 2017 June 30, 2016 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Derivatives asset $ — $ 3,717 $ — $ — $ 2,655 $ — Deferred contingent consideration on $ — $ — $ (7,989 ) $ — $ — $ (6,745 ) The table below provides a summary of the changes in the fair value of Level 3 liabilities: Balance, June 30, 2016 $ (6,745 ) Acquisition-related accrued interest (1,314 ) Payment 70 Balance, March 31, 2017 $ (7,989 ) |
Business Segments
Business Segments | 9 Months Ended |
Mar. 31, 2017 | |
Segment Reporting [Abstract] | |
Business Segments | 11. Business Segments The Animal Health segment manufactures and markets a broad range of products for food animals, including poultry, swine, cattle, dairy and aquaculture. The business includes net sales of medicated feed additives and other related products, nutritional specialty products and vaccines. The Mineral Nutrition segment manufactures and markets a broad range of trace mineral products for food animals. The Performance Products segment manufactures and markets a variety of products for use in the personal care, automotive, industrial chemical and chemical catalyst industries. 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 such costs are referred to as Corporate. We do not allocate such items to the principal segments because they are not used to evaluate their operating results or financial position. 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. Three Months Nine Months For the Periods Ended March 31 2017 2016 2017 2016 Net sales MFAs and other $ 76,354 $ 82,445 $ 237,248 $ 253,535 Nutritional Specialties 27,613 22,792 83,164 69,384 Vaccines 17,009 13,091 48,738 37,047 Animal Health 120,976 118,328 369,150 359,966 Mineral Nutrition 57,169 53,029 165,460 166,351 Performance Products 11,716 12,104 34,836 36,037 Total segments $ 189,861 $ 183,461 $ 569,446 $ 562,354 Three Months Nine Months For the Periods Ended March 31 2017 2016 2017 2016 Depreciation and amortization Animal Health $ 5,311 $ 4,246 $ 15,220 $ 11,951 Mineral Nutrition 611 656 1,695 1,876 Performance Products 255 196 708 584 Total segments $ 6,177 $ 5,098 $ 17,623 $ 14,411 Adjusted EBITDA Animal Health $ 31,806 $ 32,151 $ 99,034 $ 95,978 Mineral Nutrition 4,343 4,012 13,072 11,361 Performance Products 446 490 1,448 568 Total segments $ 36,595 $ 36,653 $ 113,554 $ 107,907 Reconciliation of income before income taxes to Adjusted EBITDA Income before income taxes $ 26,448 $ 19,149 $ 63,324 $ 58,738 Interest expense, net 3,929 4,265 11,708 12,051 Depreciation and amortization – Total segments 6,177 5,098 17,623 14,411 Depreciation and amortization – Corporate 665 758 1,981 2,267 Corporate costs 6,859 6,987 22,799 22,100 Acquisition-related cost of goods sold — 1,601 — 1,601 Acquisition-related accrued compensation 420 420 1,260 1,260 Acquisition-related transaction costs — 618 1,274 618 Pension settlement cost — — 1,702 — Gain on insurance settlement (7,500 ) — (7,500 ) — Foreign currency (gains) losses, net (403 ) (2,243 ) (617 ) (5,139 ) Adjusted EBITDA – Total segments $ 36,595 $ 36,653 $ 113,554 $ 107,907 As of March 31, 2017 June 30, 2016 Identifiable assets Animal Health $ 435,881 $ 444,751 Mineral Nutrition 57,112 57,939 Performance Products 21,068 21,557 Total segments 514,061 524,247 Corporate 88,217 83,588 Total $ 602,278 $ 607,835 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 $4,049 and $4,076 as of March 31, 2017, and June 30, 2016, respectively. The Performance Products segment includes an investment in an equity method investee of $484 and $504 as of March 31, 2017, and June 30, 2016, respectively. Corporate assets include cash and cash equivalents, certain debt issuance costs related to the Credit Facilities, income tax related assets and certain other assets. |
Summary of Significant Accoun18
Summary of Significant Accounting Policies and New Accounting Standards (Policies) | 9 Months Ended |
Mar. 31, 2017 | |
Accounting Policies [Abstract] | |
Revisions of previously issued financial statements | Revisions of Previously Issued Financial Statements During the three months ended June 30, 2016, the Company determined that amortization expense related to product-related intangible assets should be recorded in cost of goods sold rather than in selling, general and administrative expense within the consolidated statement of operations. The Company has revised its prior period financial statements, to correct the classification of amortization expense to increase cost of goods sold and reduce gross profit and selling, general and administrative expenses by $1,165 and $3,072 for the three and nine months ended March 31, 2016, respectively. These revisions had no impact on the Company’s previously reported net income (loss) or cash flows. The Company evaluated the impact of the revisions on prior periods, assessing materiality quantitatively and qualitatively, and concluded the errors were not material to any previously issued financial statements. |
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 equivalents resulting from the assumed exercise of stock options. For the three and nine months ended March 31, 2017 and 2016, all common share equivalents were included in the calculation of diluted net income per share. Three Months Nine Months For the Periods Ended March 31 2017 2016 2017 2016 Net income $ 23,643 $ 18,577 $ 49,237 $ 67,508 Weighted average number of shares – basic 39,512 39,356 39,443 39,203 Dilutive effect of stock options 547 644 545 793 Weighted average number of shares – diluted 40,059 40,000 39,988 39,996 Net income per share basic $ 0.60 $ 0.47 $ 1.25 $ 1.72 diluted $ 0.59 $ 0.46 $ 1.23 $ 1.69 |
Dividends | Dividends We declared and paid quarterly cash dividends of $0.10 per share, totaling $3,959 and $11,841 during the three and nine months ended March 31, 2017, respectively, to holders of our Class A common stock and Class B common stock. |
New Accounting Standards | New Accounting Standards Financial Accounting Standards Board (“FASB”) ASU 2017-04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business, ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments ASU 2016-02, Leases (Topic 842) ASU 2015-11, Inventory (Topic 330), requires entities to measure inventory at the lower of cost and net realizable value (“NRV”). NRV is defined as “the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation.” The guidance is effective for annual periods beginning after December 15, 2016, and interim periods within those years. We do not expect adoption of this guidance to have a material effect on our consolidated financial statements. ASU 2015-05, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40) ASU 2015-03, Interest—Imputation of Interest (Subtopic 835-30) ASU 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (Subtopic 205-40) ASU 2014-09, Revenue from Contracts with Customers (Topic 606) Deferral of the Effective Date Principal versus Agent Considerations Identifying Performance Obligations and Licensing Narrow-Scope Improvements and Practical Expedients . |
Summary of Significant Accoun19
Summary of Significant Accounting Policies and New Accounting Standards (Tables) | 9 Months Ended |
Mar. 31, 2017 | |
Accounting Policies [Abstract] | |
Schedule of Net Income per Share and Weighted Average Shares | Three Months Nine Months For the Periods Ended March 31 2017 2016 2017 2016 Net income $ 23,643 $ 18,577 $ 49,237 $ 67,508 Weighted average number of shares – basic 39,512 39,356 39,443 39,203 Dilutive effect of stock options 547 644 545 793 Weighted average number of shares – diluted 40,059 40,000 39,988 39,996 Net income per share basic $ 0.60 $ 0.47 $ 1.25 $ 1.72 diluted $ 0.59 $ 0.46 $ 1.23 $ 1.69 |
Statements of Operations-Addi20
Statements of Operations-Additional Information (Tables) | 9 Months Ended |
Mar. 31, 2017 | |
Supplemental Income Statement Elements [Abstract] | |
Schedule of additional information of statements of operations | Three Months Nine Months For the Periods Ended March 31 2017 2016 2017 2016 Interest expense, net Term B loan $ 2,859 $ 2,888 $ 8,630 $ 8,750 Revolving credit facility 642 720 2,328 1,322 Amortization of debt issuance costs and debt discount 253 251 761 734 Acquisition-related accrued interest 459 394 1,314 1,083 Other 37 79 165 335 Interest expense 4,250 4,332 13,198 12,224 Interest (income) (321 ) (67 ) (1,490 ) (173 ) $ 3,929 $ 4,265 $ 11,708 $ 12,051 Three Months Nine Months For the Periods Ended March 31 2017 2016 2017 2016 Depreciation and amortization Depreciation of property, plant and equipment $ 5,400 $ 4,328 $ 15,083 $ 12,514 Amortization of intangible assets 1,436 1,469 4,398 3,988 Amortization of other assets 6 59 123 176 $ 6,842 $ 5,856 $ 19,604 $ 16,678 |
Balance Sheets-Additional Inf21
Balance Sheets-Additional Information (Tables) | 9 Months Ended |
Mar. 31, 2017 | |
Balance Sheets Additional Information [Abstract] | |
Schedule of additional information of balance sheets | As of March 31, 2017 June 30, 2016 Inventories Raw materials $ 60,802 $ 51,369 Work-in-process 9,814 8,074 Finished goods 93,215 108,248 $ 163,831 $ 167,691 As of March 31, 2017 June 30, 2016 Accrued expenses and other current liabilities Employee related $ 23,070 $ 21,712 Commissions and rebates 4,730 3,722 Insurance related 1,568 1,780 Professional fees 4,560 3,573 Income and other taxes 3,296 1,910 Deferred consideration on acquisitions — 1,250 Other 12,902 11,756 $ 50,126 $ 45,703 As of March 31, 2017 June 30, 2016 Accumulated other comprehensive income (loss) Derivative instruments $ 3,717 $ 2,655 Foreign currency translation adjustment (40,986 ) (41,904 ) Unrecognized net pension gains (losses) (19,026 ) (30,977 ) (Provision) benefit for income taxes on derivative instruments (1,954 ) (1,548 ) (Provision) benefit for incomes taxes on long-term intercompany investments 8,166 8,166 (Provision) benefit for income taxes on pension gains (losses) (2,747 ) 1,823 $ (52,830 ) $ (61,785 ) |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Mar. 31, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of long term debt | As of March 31, 2017 June 30, 2016 Term B Loan due April 2021 $ 282,025 $ 284,200 Capitalized lease obligations — 7 282,025 284,207 Unamortized debt issuance costs and debt discount (2,560 ) (3,035 ) Less: current maturities (2,900 ) (2,907 ) $ 276,565 $ 278,265 |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 9 Months Ended |
Mar. 31, 2017 | |
Compensation and Retirement Disclosure [Abstract] | |
Schedule of net periodic pension expense | Three Months Nine months For the Periods Ended March 31 2017 2016 2017 2016 Service cost – benefits earned during the period $ — $ 735 $ 845 $ 2,204 Interest cost on benefit obligation 498 723 1,546 2,170 Expected return on plan assets (834 ) (794 ) (2,540 ) (2,382 ) Amortization of net actuarial (gain) loss and prior service 111 446 563 1,338 Settlement cost — — 1,702 — Net periodic pension expense $ (225 ) $ 1,110 $ 2,116 $ 3,330 |
Derivatives (Tables)
Derivatives (Tables) | 9 Months Ended |
Mar. 31, 2017 | |
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 Fair value as of March 31, June 30, Options Brazilian Real calls R$58,500 $ 3,717 $ 3,027 Options Brazilian Real puts R$58,500 $ — $ (372 ) |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Mar. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Schedule of fair value derivatives, assets and liabilities | As of March 31, 2017 June 30, 2016 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Derivatives asset $ — $ 3,717 $ — $ — $ 2,655 $ — Deferred contingent consideration on $ — $ — $ (7,989 ) $ — $ — $ (6,745 ) |
Schedule of changes in the fair value of Level 3 assets | Balance, June 30, 2016 $ (6,745 ) Acquisition-related accrued interest (1,314 ) Payment 70 Balance, March 31, 2017 $ (7,989 ) |
Business Segments (Tables)
Business Segments (Tables) | 9 Months Ended |
Mar. 31, 2017 | |
Segment Reporting [Abstract] | |
Schedule of information regarding reportable segments | Three Months Nine Months For the Periods Ended March 31 2017 2016 2017 2016 Net sales MFAs and other $ 76,354 $ 82,445 $ 237,248 $ 253,535 Nutritional Specialties 27,613 22,792 83,164 69,384 Vaccines 17,009 13,091 48,738 37,047 Animal Health 120,976 118,328 369,150 359,966 Mineral Nutrition 57,169 53,029 165,460 166,351 Performance Products 11,716 12,104 34,836 36,037 Total segments $ 189,861 $ 183,461 $ 569,446 $ 562,354 Three Months Nine Months For the Periods Ended March 31 2017 2016 2017 2016 Depreciation and amortization Animal Health $ 5,311 $ 4,246 $ 15,220 $ 11,951 Mineral Nutrition 611 656 1,695 1,876 Performance Products 255 196 708 584 Total segments $ 6,177 $ 5,098 $ 17,623 $ 14,411 Adjusted EBITDA Animal Health $ 31,806 $ 32,151 $ 99,034 $ 95,978 Mineral Nutrition 4,343 4,012 13,072 11,361 Performance Products 446 490 1,448 568 Total segments $ 36,595 $ 36,653 $ 113,554 $ 107,907 Reconciliation of income before income taxes to Adjusted EBITDA Income before income taxes $ 26,448 $ 19,149 $ 63,324 $ 58,738 Interest expense, net 3,929 4,265 11,708 12,051 Depreciation and amortization – Total segments 6,177 5,098 17,623 14,411 Depreciation and amortization – Corporate 665 758 1,981 2,267 Corporate costs 6,859 6,987 22,799 22,100 Acquisition-related cost of goods sold — 1,601 — 1,601 Acquisition-related accrued compensation 420 420 1,260 1,260 Acquisition-related transaction costs — 618 1,274 618 Pension settlement cost — — 1,702 — Gain on insurance settlement (7,500 ) — (7,500 ) — Foreign currency (gains) losses, net (403 ) (2,243 ) (617 ) (5,139 ) Adjusted EBITDA – Total segments $ 36,595 $ 36,653 $ 113,554 $ 107,907 As of March 31, 2017 June 30, 2016 Identifiable assets Animal Health $ 435,881 $ 444,751 Mineral Nutrition 57,112 57,939 Performance Products 21,068 21,557 Total segments 514,061 524,247 Corporate 88,217 83,588 Total $ 602,278 $ 607,835 |
Summary of Significant Accoun27
Summary of Significant Accounting Policies and New Accounting Standards (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | |
Accounting Policies [Abstract] | ||||
Net income | $ 23,643 | $ 18,577 | $ 49,237 | $ 67,508 |
Weighted average number of shares - basic (in shares) | 39,512 | 39,356 | 39,443 | 39,203 |
Dilutive effect of stock options | 547 | 644 | 545 | 793 |
Weighted average number of shares - diluted (in shares) | 40,059 | 40,000 | 39,988 | 39,996 |
Net income per share | ||||
basic (in dollars per share) | $ 0.60 | $ 0.47 | $ 1.25 | $ 1.72 |
diluted (in dollars per share) | $ 0.59 | $ 0.46 | $ 1.23 | $ 1.69 |
Summary of Significant Accoun28
Summary of Significant Accounting Policies and New Accounting Standards (Details Textuals) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | Jun. 30, 2016 | |
Accounting Policies [Abstract] | |||||
Revised amortization expense intangible assets | $ 1,165 | $ 3,072 | |||
Cash dividends per share amount (in dollars per share) | $ 0.10 | $ 0.10 | |||
Cash dividends | $ 3,959 | $ 11,841 | |||
Debt issuance costs | $ 2,538 |
Statements of Operations-Addi29
Statements of Operations-Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | |
Interest expense, net | ||||
Amortization of debt issuance costs and debt discount | $ 253 | $ 251 | $ 761 | $ 734 |
Acquisition-related accrued interest | 459 | 394 | 1,314 | 1,083 |
Other | 37 | 79 | 165 | 335 |
Interest expense | 4,250 | 4,332 | 13,198 | 12,224 |
Interest (income) | (321) | (67) | (1,490) | (173) |
Interest expense, net | 3,929 | 4,265 | 11,708 | 12,051 |
Depreciation and amortization | ||||
Depreciation of property, plant and equipment | 5,400 | 4,328 | 15,083 | 12,514 |
Amortization of intangible assets | 1,436 | 1,469 | 4,398 | 3,988 |
Amortization of other assets | 6 | 59 | 123 | 176 |
Depreciation and amortization | 6,842 | 5,856 | 19,604 | 16,678 |
Term B Loans | ||||
Interest expense, net | ||||
Interest expense, net | 2,859 | 2,888 | 8,630 | 8,750 |
Revolving credit facility | ||||
Interest expense, net | ||||
Interest expense, net | $ 642 | $ 720 | $ 2,328 | $ 1,322 |
Statements of Operations-Addi30
Statements of Operations-Additional Information (Detail Textuals) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | |
Foreign deferred tax assets | ||||
Valuation Allowance [Line Items] | ||||
Deferred income taxes valuation allowance | $ (3,780) | $ (3,780) | ||
Employee stock options | ||||
Valuation Allowance [Line Items] | ||||
Stock option windfall tax benefit | $ 1,442 | $ 1,442 | ||
Domestic deferred tax assets | ||||
Valuation Allowance [Line Items] | ||||
Deferred income taxes valuation allowance | $ (2,536) | $ (21,323) |
Balance Sheets-Additional Inf31
Balance Sheets-Additional Information (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Jun. 30, 2016 |
Inventories | ||
Raw materials | $ 60,802 | $ 51,369 |
Work-in-process | 9,814 | 8,074 |
Finished goods | 93,215 | 108,248 |
Inventory, net | $ 163,831 | $ 167,691 |
Balance Sheets-Additional Inf32
Balance Sheets-Additional Information (Details 1) - USD ($) $ in Thousands | Mar. 31, 2017 | Jun. 30, 2016 |
Accrued expenses and other current liabilities | ||
Employee related | $ 23,070 | $ 21,712 |
Commissions and rebates | 4,730 | 3,722 |
Insurance related | 1,568 | 1,780 |
Professional fees | 4,560 | 3,573 |
Income and other taxes | 3,296 | 1,910 |
Deferred consideration on acquisitions | 1,250 | |
Other | 12,902 | 11,756 |
Accrued expenses and other current liabilities, total | 50,126 | 45,703 |
Accumulated other comprehensive income (loss) | ||
Derivative instruments | 3,717 | 2,655 |
Foreign currency translation adjustment | (40,986) | (41,904) |
Unrecognized net pension gains (losses) | (19,026) | (30,977) |
(Provision) benefit for income taxes on derivative instruments | (1,954) | (1,548) |
(Provision) benefit for incomes taxes on long-term intercompany investments | 8,166 | 8,166 |
(Provision) benefit for income taxes on pension gains (losses) | (2,747) | 1,823 |
Accumulated other comprehensive income (loss) | $ (52,830) | $ (61,785) |
Balance Sheets-Additional Inf33
Balance Sheets-Additional Information (Detail Textuals) $ in Thousands | Mar. 31, 2017USD ($) |
Balance Sheets Additional Information [Abstract] | |
Equity method investments | $ 4,049 |
Debt - Summary of long-term deb
Debt - Summary of long-term debt (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Jun. 30, 2016 |
Debt Instrument [Line Items] | ||
Long-term debt including current maturities | $ 282,025 | $ 284,207 |
Unamortized debt issuance costs and debt discount | (2,560) | (3,035) |
Less: current maturities | (2,900) | (2,907) |
Long-term debt | 276,565 | 278,265 |
Term B loan due April 2021 | ||
Debt Instrument [Line Items] | ||
Long-term debt including current maturities | 282,025 | 284,200 |
Capitalized lease obligations | ||
Debt Instrument [Line Items] | ||
Long-term debt including current maturities | $ 7 |
Debt (Detail Textuals)
Debt (Detail Textuals) - USD ($) $ in Thousands | 9 Months Ended | |
Mar. 31, 2017 | Jun. 30, 2016 | |
Debt Instrument [Line Items] | ||
Outstanding borrowings | $ 30,000 | $ 69,000 |
Revolving credit facility | ||
Debt Instrument [Line Items] | ||
Maximum borrowing capacity | $ 200,000 | |
Weighted-average interest rates | 3.39% | |
Term B Loans | ||
Debt Instrument [Line Items] | ||
Weighted-average interest rates | 4.00% | |
Term B Loans | LIBOR | ||
Debt Instrument [Line Items] | ||
Applicable interest rates | 3.00% | |
Applicable floor rates | 1.00% | |
Term B Loans | Base Rate | ||
Debt Instrument [Line Items] | ||
Applicable interest rates | 2.00% | |
Term B Loans And Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Maximum borrowing capacity | $ 30,000 | |
Outstanding borrowings | 14,518 | |
Aggregate available credit facilities | $ 155,482 | |
Term B Loans And Revolving Credit Facility | LIBOR | ||
Debt Instrument [Line Items] | ||
Interest rate, description | 2.50%, 2.75% or 3.00% | |
Term B Loans And Revolving Credit Facility | Base Rate | ||
Debt Instrument [Line Items] | ||
Interest rate, description | 1.50%, 1.75% or 2.00% |
Related Party Transactions (Det
Related Party Transactions (Detail Textuals) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | |
Relatives of Jack C. Bendheim | Compensation and benefit for services provided | ||||
Related Party Transaction [Line Items] | ||||
Aggregate compensation and benefits | $ 339 | $ 388 | $ 1,387 | $ 1,515 |
Employee Benefit Plans - Net pe
Employee Benefit Plans - Net periodic pension expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Mar. 31, 2017 | Dec. 31, 2016 | Mar. 31, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |||||
Service cost - benefits earned during the period | $ 735 | $ 845 | $ 2,204 | ||
Interest cost on benefit obligation | $ 498 | 723 | 1,546 | 2,170 | |
Expected return on plan assets | (834) | (794) | (2,540) | (2,382) | |
Amortization of net actuarial (gain) loss and prior service costs | 111 | 446 | 563 | 1,338 | |
Settlement cost | $ 1,702 | 1,702 | |||
Net periodic pension expense | $ (225) | $ 1,110 | $ 2,116 | $ 3,330 |
Employee Benefit Plans (Detail
Employee Benefit Plans (Detail Textuals) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Dec. 31, 2016 | Sep. 30, 2016 | Mar. 31, 2017 | |
Defined Benefit Plan Disclosure [Line Items] | |||
Settlement cost | $ 1,702 | $ 1,702 | |
401(k) retirement savings plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Contribution percentage | 3.00% | ||
Maximum additional discretionary contribution percentage | 4.00% | ||
Domestic noncontributory defined benefit pension plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Pension curtailment gain | $ 6,822 |
Commitments and Contingencies (
Commitments and Contingencies (Detail Textuals) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended |
Sep. 30, 2012PRPs | Mar. 31, 2017USD ($) | Mar. 31, 2017USD ($) | Jun. 30, 2016USD ($) | |
Commitments And Contingencies [Line Items] | ||||
Number of potentially responsible parties | PRPs | 140 | |||
Insurance settlement | ||||
Commitments And Contingencies [Line Items] | ||||
Contingent gain | $ 7,500 | |||
Current and long-term liabilities | ||||
Commitments And Contingencies [Line Items] | ||||
Accrual for environmental loss contingencies payments | $ 7,205 | $ 7,024 |
Derivatives (Details)
Derivatives (Details) - Options - Cash flow hedges BRL in Thousands, $ in Thousands | Mar. 31, 2017USD ($) | Mar. 31, 2017BRL | Jun. 30, 2016USD ($) |
Brazilian Real calls | |||
Derivative [Line Items] | |||
Notional amount | BRL | BRL 58,500 | ||
Fair value | $ | $ 3,717 | $ 3,027 | |
Brazilian Real puts | |||
Derivative [Line Items] | |||
Notional amount | BRL | BRL 58,500 | ||
Fair value | $ | $ (372) |
Derivatives (Detail Textuals)
Derivatives (Detail Textuals) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended |
Mar. 31, 2017 | Mar. 31, 2017 | Jun. 30, 2016 | |
Derivative [Line Items] | |||
Unrecognized losses on derivative instruments recorded in earnings within the next twelve months | $ 1,082 | $ 1,082 | |
Options | Cash flow hedges | |||
Derivative [Line Items] | |||
Other comprehensive income (loss), unrealized gains (losses) on derivatives | $ 758 | 1,062 | |
Options | Cash flow hedges | Cost of goods sold | |||
Derivative [Line Items] | |||
Realized losses on hedging derivatives recognized in cost of goods sold | 580 | $ 1,528 | |
Options | Cash flow hedges | Other comprehensive income (loss) | |||
Derivative [Line Items] | |||
Unrecognized gains (losses) on derivative instruments | $ 3,717 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - Fair values - USD ($) $ in Thousands | Mar. 31, 2017 | Jun. 30, 2016 |
Level 1 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivatives asset | ||
Deferred contingent consideration on acquisitions | ||
Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivatives asset | 3,717 | 2,655 |
Deferred contingent consideration on acquisitions | ||
Level 3 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivatives asset | ||
Deferred contingent consideration on acquisitions | $ (7,989) | $ (6,745) |
Fair Value Measurements (Deta43
Fair Value Measurements (Details 1) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | |
Business Combination Contingent Consideration Liability [Roll Forward] | ||||
Acquisition-related accrued interest | $ (459) | $ (394) | $ (1,314) | $ (1,083) |
Fair values | Level 3 | ||||
Business Combination Contingent Consideration Liability [Roll Forward] | ||||
Balance, June 30, 2016 | (6,745) | |||
Acquisition-related accrued interest | (1,314) | |||
Payment | 70 | |||
Balance, March 31, 2017 | $ (7,989) | $ (7,989) |
Business Segments (Details)
Business Segments (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Mar. 31, 2017 | Dec. 31, 2016 | Mar. 31, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | Jun. 30, 2016 | |
Segment Reporting Information [Line Items] | ||||||
Net sales | $ 189,861 | $ 183,461 | $ 569,446 | $ 562,354 | ||
Depreciation and amortization | 6,842 | 5,856 | 19,604 | 16,678 | ||
Adjusted EBITDA - Total segments | 36,595 | 36,653 | 113,554 | 107,907 | ||
Reconciliation of income before income taxes to Adjusted EBITDA | ||||||
Income before income taxes | 26,448 | 19,149 | 63,324 | 58,738 | ||
Interest expense, net | 3,929 | 4,265 | 11,708 | 12,051 | ||
Depreciation and amortization | 6,842 | 5,856 | 19,604 | 16,678 | ||
Acquisition-related accrued compensation | 420 | 420 | 1,260 | 1,260 | ||
Pension settlement cost | $ 1,702 | 1,702 | ||||
Foreign currency (gains) losses, net | (403) | (2,243) | (617) | (5,139) | ||
Adjusted EBITDA - Total segments | 36,595 | 36,653 | 113,554 | 107,907 | ||
Identifiable assets | 602,278 | 602,278 | $ 607,835 | |||
Operating Segments | ||||||
Segment Reporting Information [Line Items] | ||||||
Net sales | 189,861 | 183,461 | 569,446 | 562,354 | ||
Depreciation and amortization | 6,177 | 5,098 | 17,623 | 14,411 | ||
Adjusted EBITDA - Total segments | 36,595 | 36,653 | 113,554 | 107,907 | ||
Reconciliation of income before income taxes to Adjusted EBITDA | ||||||
Income before income taxes | 26,448 | 19,149 | 63,324 | 58,738 | ||
Interest expense, net | 3,929 | 4,265 | 11,708 | 12,051 | ||
Depreciation and amortization | 6,177 | 5,098 | 17,623 | 14,411 | ||
Acquisition-related cost of goods sold | 1,601 | 1,601 | ||||
Acquisition-related accrued compensation | 420 | 420 | 1,260 | 1,260 | ||
Acquisition-related transaction costs | 618 | 1,274 | 618 | |||
Pension settlement cost | 1,702 | |||||
Gain on insurance settlement | (7,500) | (7,500) | ||||
Foreign currency (gains) losses, net | (403) | (2,243) | (617) | (5,139) | ||
Adjusted EBITDA - Total segments | 36,595 | 36,653 | 113,554 | 107,907 | ||
Identifiable assets | 514,061 | 514,061 | 524,247 | |||
Operating Segments | Animal Health | ||||||
Segment Reporting Information [Line Items] | ||||||
Net sales | 120,976 | 118,328 | 369,150 | 359,966 | ||
Depreciation and amortization | 5,311 | 4,246 | 15,220 | 11,951 | ||
Adjusted EBITDA - Total segments | 31,806 | 32,151 | 99,034 | 95,978 | ||
Reconciliation of income before income taxes to Adjusted EBITDA | ||||||
Depreciation and amortization | 5,311 | 4,246 | 15,220 | 11,951 | ||
Adjusted EBITDA - Total segments | 31,806 | 32,151 | 99,034 | 95,978 | ||
Identifiable assets | 435,881 | 435,881 | 444,751 | |||
Operating Segments | Mineral Nutrition | ||||||
Segment Reporting Information [Line Items] | ||||||
Net sales | 57,169 | 53,029 | 165,460 | 166,351 | ||
Depreciation and amortization | 611 | 656 | 1,695 | 1,876 | ||
Adjusted EBITDA - Total segments | 4,343 | 4,012 | 13,072 | 11,361 | ||
Reconciliation of income before income taxes to Adjusted EBITDA | ||||||
Depreciation and amortization | 611 | 656 | 1,695 | 1,876 | ||
Adjusted EBITDA - Total segments | 4,343 | 4,012 | 13,072 | 11,361 | ||
Identifiable assets | 57,112 | 57,112 | 57,939 | |||
Operating Segments | Performance Products | ||||||
Segment Reporting Information [Line Items] | ||||||
Net sales | 11,716 | 12,104 | 34,836 | 36,037 | ||
Depreciation and amortization | 255 | 196 | 708 | 584 | ||
Adjusted EBITDA - Total segments | 446 | 490 | 1,448 | 568 | ||
Reconciliation of income before income taxes to Adjusted EBITDA | ||||||
Depreciation and amortization | 255 | 196 | 708 | 584 | ||
Adjusted EBITDA - Total segments | 446 | 490 | 1,448 | 568 | ||
Identifiable assets | 21,068 | 21,068 | 21,557 | |||
Operating Segments | MFAs and other | Animal Health | ||||||
Segment Reporting Information [Line Items] | ||||||
Net sales | 76,354 | 82,445 | 237,248 | 253,535 | ||
Operating Segments | Nutritional specialties | Animal Health | ||||||
Segment Reporting Information [Line Items] | ||||||
Net sales | 27,613 | 22,792 | 83,164 | 69,384 | ||
Operating Segments | Vaccines | Animal Health | ||||||
Segment Reporting Information [Line Items] | ||||||
Net sales | 17,009 | 13,091 | 48,738 | 37,047 | ||
Corporate | ||||||
Segment Reporting Information [Line Items] | ||||||
Depreciation and amortization | 665 | 758 | 1,981 | 2,267 | ||
Adjusted EBITDA - Total segments | 6,859 | 6,987 | 22,799 | 22,100 | ||
Reconciliation of income before income taxes to Adjusted EBITDA | ||||||
Depreciation and amortization | 665 | 758 | 1,981 | 2,267 | ||
Adjusted EBITDA - Total segments | 6,859 | $ 6,987 | 22,799 | $ 22,100 | ||
Identifiable assets | $ 88,217 | $ 88,217 | $ 83,588 |
Business Segments (Detail Textu
Business Segments (Detail Textuals) - USD ($) $ in Thousands | Mar. 31, 2017 | Jun. 30, 2016 |
Segment Reporting Information [Line Items] | ||
Equity method investments | $ 4,049 | |
Animal Health | ||
Segment Reporting Information [Line Items] | ||
Equity method investments | 4,049 | $ 4,076 |
Performance Products | ||
Segment Reporting Information [Line Items] | ||
Equity method investments | $ 484 | $ 504 |