PAHC - Earnings call transcript Q1 2025 | Phibro Animal Health Corporation

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Operator

Hello, and thank you for standing by. My name is Regina, and I will be your conference operator today. At this time, I would like to welcome everyone to the Phibro Animal Health Corporation First Quarter 2025 Conference Call. [Operator Instructions] I would now like to turn the conference over to Glenn David, Chief Financial Officer. Please go ahead.

Glenn David

Regina. you, Thank welcome Call and XXXX. Phibro Health Animal Good our to first Earnings for XX, quarter Corporation morning, the ended September My Corporation. and of name David, Chief is Officer Financial I'm Phibro the Health Animal Glenn Phibro's I am today's President Director and on Operating joined of Bendheim, Corporate Executive Donny Executive Larry Chairman, Miller, Officer. Jack Officer; Chief call Chief and President by today Bendheim, Vice Strategy; and

year our earnings guidance the ending we our Today, well XX, we first as call quarterly our of for that and are for will providing as Also, webcast our would press updated provide will your we Form a this performance find the fiscal cover XX-Q At you and I transcript quarter financial website, June remarks, on XXXX. presented simultaneous to copies conclusion of you lines our on release website, and call. will our section remind and like questions. the financial of on discussed for slides this of the pahc.com. the Investors open

could today results statements, will forward-looking from materially and include projections. actual remarks those Our differ

to For our forward-looking a description factors you certain could statements results list to refer I section of cause in release. earnings differ, press that and the

measures, include references accounting to were Our accepted remarks in certain which with GAAP. prepared generally financial accordance not principles U.S. or

GAAP press non-GAAP on present Reconciliations U.S. in these accompany in results press comparable earnings an release. release earnings are of included basis. information measures for most our and a you of our tables refer the section non-GAAP adjusted discussion these the We that measures on I measures. financial to to the basis GAAP a financial directly financial the

nonrecurring stock-based items, exclude unusual, nonoperational acquisition-related results adjusted items, including or compensation. Our

or separately gains Also unusual income reported including income income currency statement taxes foreign the tax losses, operations, adjustments income related net. and pretax nonrecurring items. in expense consolidated to of is Other

opening his Officer, Chief me share Bendheim, Now Jack President to remarks. Chairman, introduce and our Executive let

Jack Bendheim

tailwinds Thank morning. year to extremely everyone joining we at led last These wallet, our in growing you areas, this XX%. to other you, our the our prices customer segment the quarter, Glenn, MFA at the increase with increased Health results our XX% different us where growth and year, our an business certain had trend fiscal seasonal at of continuing the grew grew from of in look start And saw growth we vaccines at by Mineral XX%. areas We in Animal X% and of in end successes XX% of quarter, thank and strong raise Products industry Nutrition appropriate, and reflect the segment disease Performance pressures. while as many to share benefit sales

also line in will these future to Phibro program. reflects we Our Forward highlighted growth out begin roll anticipate to as efficiencies. be our operating We gains that increased initiatives leverage bottom attention the the our of

of preparing Feed discussed, Additive previously more These backdrop Zoetis' amount work right, be so close Forward my most done of the are As own of results the for so Phibro impressive their the but from of of the fiscal of years. seen should even the the many our business. in upcoming with by Medicated acquisition in colleagues incredible impact

us thank our acquisition. new As take welcome the like the who of the such, opportunity for and colleagues work to this with their I would to joined Phibro also tireless closing many employees have

and the MFAs grow leverage intend scale portfolio. we the but much see I we we our as which our press positioned more benefit we stated are Phibro and overall, at not only all significant to for bright our well release, an for to now category, other in future a As are extremely of new size

growth our a in for As stand-alone also shows mid-single-digit leveraged providing on are P&L fiscal XXXX, we revenue will further guidance and updated detail, basis. which Glenn a year

with back We approximately anticipate Zoetis $XXX net is and required driven for does adjustments of year. inclusive provided fiscal an year stand-alone continue will sales per XXXX The adjusted share the Negative costs. X-month onetime sold the incremental not give approximately earnings on adjusted deal price million per the and EBITDA $X.XX, goods of and include share fiscal of quarter portfolio margin favorable for accounting of in saw guidance to estimates is of earnings Glenn. past expense. I'll portfolio. cost Phibro the interest Preliminary it throughout by period this XX% include we GAAP momentum purchase the Zoetis approximately

Glenn David

our in employee-related by with X% Consolidated mix grew starting a GAAP X. EPS XX, September increases demand Health The million, XX%, or of I'm million $XXX.X due segment at grew XX% increase the X Products and $XX.X were Mineral margin higher for lower both increased Nutrition costs. costs, Jack. increased the gross improved same international the and due on and performance to offset increase sales by ago. reflecting year domestic Animal net Slide QX quarter SG&A over XX%. Thanks, Performance while regions, in grew segment XXXX, input quarter ended net significantly, driven favorable to and income diluted an by

significantly income losses XX% and standard to adjusted items, $XX increased driven diluted reduced Adjusted first versus EBITDA one-off acquisition-related or with adjusted a Increased prior quarter income million expense for EPS benefit a interest sales our net taxes. making profit year. higher by foreign by growth was GAAP partially higher After provision and adjusted and from certain results, gross adjustments adjusted increased. adjusted items, both including the SG&A offset currency

$XX sales Health XX% quarter, net versus financial quarter performance. an of of level segment million same posted Moving the year. prior to increase the or for $XXX.X million Animal The segment

to MFAs sales or and Within a the to Vaccine XX% and we healthy international increase, Nutritional microbial other $XX.X domestic segment, and Specialty and Products net reported million, higher Latin demand. sales demand due growth Health driven in international of products. introductions in or Animal by million regions. million due of $X.X net both animal $X.X net growth poultry product plus in sales sales both increase of XX% an companion increased X%, mostly America, domestic

higher $XX.X a partially increase XX% from gross higher was to due sales, Health adjusted SG&A. increased million, EBITDA offset by Animal profit

on the Slide segments due our profit. for the Moving quarter reflecting were a million, million, $X.X on increased sales driven first increase gross sales of and by to other increase performance Mineral Starting business higher $X.X quarter Net an X. million Mineral year-on-year was X% $XX.X of to financial price. EBITDA Nutrition. with or million, $X volume Nutrition adjusted for

Looking our segment. at Products Performance

$XX.X employee-related personal as million million reflects and of driven year. expenses for Corporate Adjusted of was XX% higher $X.X or result million $X.X quarter million products. increased $X.X sales the a Net same EBITDA the by demand increase costs. an versus grew used in million, increased care of prior $X.X ingredients

Turning XX, key million X. Slide generated ended XXXX. capitalization-related cash flow to months $XX positive of on XX We for September metrics free the

of We Cash of million the short-term flow invested and $XX capital generated $XX million cash operating million and the at and equivalents $XX in cash end quarter. expenditure. investments were

was ratio the of total based at first X.Xx EBITDA. leverage of end $XXX XX-month quarter the of debt adjusted on trailing million gross Our and $XXX million

was trailing end of net million quarter at ratio million on XX-month leverage and of the first net debt $XXX of $XXX the EBITDA. Our X.Xx adjusted based

paid or dividend per Turning $X.XX our a we history, of to in share million dividends. Consistent $X.X aggregate. quarterly with

As fixed plus the a debt applicable rate of a margin. X.XX% reminder, $XXX at million of is our

swap for of of margin. million fixed a September a X.XX% in addition, XXXX, we entered plus into arrangement $XXX at new the In rate applicable

investments. on As of interest short-term of offset although million the income variable by earned end, subject quarter $XX to debt is remaining somewhat total our rates, interest

remaining As million date X, we loans, $XXX is in of the of subject of million A delayed debt facilities. our of draw refinanced credit interest to Effective variable the the the $XXX our rates. additional Term July

which $XXX maturity of to the also the million, Term had the consisting A Zoetis $XXX from $XXX of credit replaced July XXXX It term provision July the of Our a company's principal extended Term of ranging A XXXX that aggregate a transaction. replaced the existing date from loan and XXXX exercised million XXXX maturity company's company's delayed existing $XXX which draw million included been amount million million new with loan, revolver, revolver, XXXX 'XX. loan dates included to has XXXX revolver, a million $XXX facilities $XXX closing initial April A the and credit Term included a million incremental a facility an $XXX loan,

our information in that regarding are Additional terms filed the yesterday. facilities Form and conditions contained XX-Q the XXXX of credit was

our the turn completed Zoetis' X, for a acquisition Slide Included which guidance to Please the fiscal is without in Let's guidance XXXX. year to guidance costs that are GAAP lays growth fiscal will onetime included for benefits of our note this year consulting Additive income out effect initiative this to Onetime related giving and basis Forward Portfolio. XXXX Feed and Medicated stand-alone our on that help our margin consist Phibro are also primarily related in fees. initiative drive of additional to guidance EBITDA early growth.

additional on initiative. and cost as of significant areas revenue procurement focused savings, and of headcount expanded initiative savings The initiatives is growth price such Please not potential anticipate reductions offerings, initiatives. areas we as other product increases, do note, part unlocking this cost

and guidance This versus of in of Animal segment a stand-alone growth by continued year sales recovery well Products. Health Our in is fiscal Growth Nutrition driven represents basis Mineral year of as for increased XXXX a midpoint $X.X as our Performance growth on approximately X% to a X% range and billion. to billion was $X.XXX both prior follows: net X%. our as

new Adjusted with midpoint $XXX Adjusted of further GAAP midpoint growth in XX% $XXX an expense effective adjusted with included EPS are in income to This million. and initiative. FX XX% EBITDA represents net XX%. EPS or and improvement our by assumes a $XX income is of of approximately incremental to by This our EBITDA of growth onetime tax represents GAAP movements. growth costs of XX%. XX% million million gains debt growth partially to constant million. a of growth income Also rate, This to Phibro our driven deal. currency no a due XX% offset our approximately to related range to and losses Forward net income interest and $XX from net in

include this acquisition the guidance MFA Zoetis closed a business the As mentioned days as just few previously, on we does ago. not

in Our margin, XXXX approximately $XXX approximately adjusted for in X EBITDA remaining impact. our XX% for Zoetis EPS the months year approximately $X.XX preliminary revenue, as are estimates million fiscal follows:

year We will QX release. earnings our guidance incorporate into fiscal our Zoetis in XXXX

of in leverage Xx transition the contribution by confident to expect ability fiscal fiscal full and below remain deliver ability MFA Zoetis EPS periods the related service impact to deliver to such and as would fiscal our impacts agreements. $X.XX adjusted first and our for to destocking of net year XXXX. estimates of distribution during XXXX service some an year over includes integration, usual XXXX We incremental the costs preliminary year The blackout you in inventory, our

the in and the performance In momentum closing, fiscal quarter strong we're excited XXXX. for about the year

We line could With to our please in around demand the world move the for look that, are and business our for you improvement open as Regina, the in products confident continued forward. forward questions? seeing we

Operator

[Operator Instructions] with Knyazkova question come Our the first from line of will Ekaterina JPMorgan.

Ekaterina Knyazkova

Congrats on the quarter.

healthy, It something particularly first Can last around just about So that, is is little especially just acquisition. from drove gross talk or on second was that relative or then seems a mostly bit to question coming what mix that? else? that And margins. question you price the Is product year.

the portfolio incremental Just think need where additional you seeing or to opportunities transaction? as put any investment through where gone of will Any process any surprises areas the that of areas any you behind? you've closing you're

Glenn David

Yes. Thanks for Ekaterina. the question,

drove are the that There quarter. a gross of number margin. saw that the we factors gross positive in So margin

starting in certain the quarter. very there products that vaccine even our performed category, was within And MFA margin portfolio with have well First also XX% very higher growth. other and in performance are strong mix, the gross

gross saw foreign in also costs products the some and from We of exchange benefit margin. had favorability a favorable terms as overall of also our some in input being well

the surprises acquisition, nothing additional at surprises we've I a only we're big information at In but poses seen. terms days as we're initially working few this obviously from that in point, and got that any through closing, mentioned, of we

Jack Bendheim

this continue company. internationally, And add obviously, just sales through our an to optimistic we for starts, and acquired. prove day some both me to going we'll be overall, But that, very Let acquisition think be starts. early that force, about very, to work the early portfolio month I that exceptional the is to domestic

Operator

line come will Our of next question Bank America. of the Ryskin Michael with from

Michael Ryskin

great a year. Congrats on to start the

fire me succession. these some of in rapid off Let

revenues, in First, MFA $XXX on margin. Zoetis the acquisition, million the XX% EBITDA

months X some just you I EPS, and realize think I XX year there I previously right? I Is seasonality? X-month this guess, I higher. contribution XX months, be million months, that and little $X.XX in would it's bit would versus previously think in you talked I a thought about timing? have $X.XX first mean, Is $XXX talked revenues but of EPS. the full

there? of you me just So can kind the bridge walk through

Glenn David

Sure.

say exactly would what And right, $XXX lower million. be. in when at necessarily one X-month about revenue XX look that talked the for into obviously, initially guidance our look future normal expect the million. of deal the revenue of So months period. future did translate I'll time trailing of trailing a million, about $XXX not the we revenue that at you We that months you around a the calls mentioned, When of XX was we'd that's the you at updated $XXX than that deal what the had terms

the X Within is months, related destocking there deal. the first to

There sure as to purchase certain we need time. of transition that well. part could you're the X as allowed not to months where new over required we providing there and to markets of the well, a sell, transition, lot larger us And in advance transition. are to year, regulatory markets then the the destocking blackout in customers that had just call make satisfy to And as orders periods that's a it, as they that to of due our certain are then sort customer

most normal of first all those the impactfully you'd And hit X are call those the things it, So X deal. expect. that to months in,

gain. deliver XX guided terms transitionary months it's And first not in for able of a of revenue EPS, So normal still a in $X.XX confidence being the you had significant $X.XX XX lack to really we impact and of as in more to reflection mentioned, of months.

If translate $X.XX. X to that you that's months,

are which, in impact these nature, Some transitionary of straight delivery of a what revenue, again, at have did talking impacts that $X.XX. been we're about would just that

Michael Ryskin

Okay.

release, called your Okay. In discontinued press curating that I the as atopic -- portfolio, also out All you derm right. product the you helpful. think you're That's project.

just you tied last of derm couple the additional curious the color could months? provide developments that the Just there? from Is the money sort seen how Was going Is forward? in you've in just that there any of there? we on other just somewhere companion to directly being of the any space think else? And about we others about that investment shifted should -- pipeline how animal do think

Daniel Bendheim

Michael, I'll take it, Donny.

that all strong to target always profile products, product our product as and as our had we've well very for stick for it. So a of we

we're quarterly We versus doing missed updates where our we're we at frankly, and how TPP. doing where have look it And the mark.

miss it. And it to our going in specifically be to and to about bullish I'm so we not pipeline fair discontinued get into to it. it's invest not But continuing overall because licensure. continue our are where we

we as dollars going what far that's determined. be product or where the call think in As atopic to will the that Derma But still from Care go, continue we I dermatitis forward.

Michael Ryskin

MFAs on one, if maybe question one your on And last the legacy in business existing XX% the growth in squeeze can quarter. just MFA other the and on high-level Okay. I a business,

You mean, what above have market couple impressive quarters think row. growth here in thought the last I going be of multiple back obviously to guys MFAs. I we years, a had would above stretch what really historically would a or of have

called You products. a demand, drivers terms couple of of some in out just new

Phibro take or But year step put just X in over context. that a back MFA for performance the last maybe and

this sort this Is performing others? now step of meaningful that? share Is Just and better is the incremental it's how higher market -- a is sustainable from market. an gains taking

big the in thoughts on for picture strength you. Just MFAs

Larry Miller

take I'll Larry. the is This Mike. question. Sure,

FY we we 'XX. trend it thing, of performance, first first the mentioned, that second at particular, in you half experienced, particularly as continuing was our the look in as strong So quarter

continued. trend that So

the favorable in quarter we the had Within quarter for FY do seasonality 'XX. of FY challenges, demand have months of our fourth certainly Hemisphere, Southern disease their quarter some the 'XX products winter in lot our itself, a that particularly added first the XXXX, first our of and really

timing for continued first pattern And a very have were just we But that of did how in strong that we see products. quarter place I demand our to last the took first think it. we see that's favorable guess, of I And overlying, couple quarter orders our year.

Glenn David

I in that's would benefits. customers performance sharing focus gives are And in the add, strong could the and perhaps believing additional acquiring going out I We Mike, it's and the think what portfolio right? right? that on these discussing MFA really our dedicated to had products have just these us we products, we Yes, people, products and and they've better and than confidence Zoetis past. have with

Larry Miller

as we products in certainly specialty our within nutrition MFAs, our as vaccines. And strong performance very had well Health but also our products, Animal

Operator

from Our Stanley. next with Lynn the come will Morgan line of Schultz question

next Navann line will Ty with question of come Our from Paribas. the BNP

Navann Ty Dietschi

I AD. question my on MFA the on you questions and the my answered think same about have numbers add. the were strategic Yes, maybe been have to Actually, priorities had Zoetis different question after anything the the answered. unless of I discontinuation

Operator

[Operator any now the I to closing turn Glenn back call David for with remarks. will Instructions] And that,

Glenn David

Regina, you, really interest Thank great listening you, a day. you attention, of Phibro have appreciate in for and support thank call. time, Animal Health, everyone, today's and We your and on hope

Operator

you all today's joining, you now That disconnect. will conclude call. and Thank for may

Phibro Animal Health (PAHC) 7 Nov 242025 Q1 Earnings call transcript