PAHC - Earnings call transcript Q2 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's Second Quarter 2025 Earnings 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 second Earnings for XX, quarter Corporation's morning, the ended December My Health and Officer name David, the is Financial Chief I of Corporation. am Animal Phibro Glenn for I updated and Chairman, Officer; and fiscal Phibro's Jack for our President our President Vice second on financial of am and Bendheim, we Chief our Director financial June will today's cover joined ending Donny by XX, Bendheim, call and guidance Executive Executive provide Corporate quarter year Strategy. Today, performance XXXX. remarks, conclusion of will the for At lines your our we open the questions. I call we are on like providing this pahc.com. remind website, of webcast would you our to a that simultaneous release transcript our well section the Also, and you and on Form press of website, as and XX-Q call. slides as this find presented on copies discussed the will Investors quarterly of earnings the

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

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

earnings a measures these Financial the a accompany earnings U.S. Our financial section certain Reconciliations refer which in basis prepared included you measures. not of directly on financial these GAAP. our and accepted basis. tables that financial press the on to comparable or with to discussion in results generally most the GAAP non-GAAP an to GAAP of present Non-GAAP the measures adjusted remarks were accordance accounting are our release. We I for measures, in principles include press references release U.S. Information

in including foreign as stock-based nonrecurring income items, of unusual, acquisition-related expense or or net the income items. unusual compensation, reported income and currency and related losses/gains, consolidated income other including taxes to statements adjustments results items, tax nonrecurring operations, separately adjusted exclude pretax Our nonoperational

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

Jack Bendheim

to quarters strongest believe this Additive every and Medicated the one successfully Zoetis integrated the one our We customer-centric morning, Zoetis was everyone. that well. of since approach, Glenn, good a going By unwavering you, Feed testament measure, as public. Thank shares portfolio, I

our XX%, critical While clear, the delivered strength while from exceptional execution most At to customer. guiding our same principle no while contributions Health Total continues growth seamless XX%, This without helping Forward for strong of time, and and results, is has operational focus topline the in priorities. by our portfolio. surged ensured climbed drive MFA identify us we the initiative integration profitability. serving challenges, demand improving execution. Financially, both excellence, opportunities our and expanding remains driven efficiency sales X demonstrating months Zoetis business Animal EBITDA adjusted Phibro of

double-digit rising and Health Animal vaccines posted MFA our increasing our with Our grew out across product a Even and led XX%, segment segment X% excluding XX%. Rounding categories, other Products with X%, product Health contribution, our performance, growth other expanding business Mineral our sales Performance XX%. Animal delivered XX% way while up MFA nutritional X increase. specialties and all segment the a sales legacy Zoetis Nutrition

on management. The these targeted fiscal worldwide. The globally, for XXXX relentless we've positions built in and U.S. both our disciplined and release, through press value momentum to beyond. our Forward financial create We growth Phibro and essential remain strong. of highlight broader long-term portfolio drive and industry, our the expansion well our in confident protein ability results innovation, remainder noted customers to in sustainable strength execution remains solutions strategic diversified As the focus portfolio, the us to of delivering our commitment and

tariffs. including We expect despite such the Influenza continued and newly diseases factors, growth announced emerging Avian challenges like as geopolitical

headwinds positioned to ahead. opportunities that is and are Phibro capitalize the well confident navigate We these on

momentum this discuss, fiscal guidance XXXX outlook. year updating and are will reflect Glenn Glenn? to our our we As strengthening

Glenn David

Health X. Slide million on over performance ended QX our a Performance an to segment EPS regions, higher same GAAP and increased the or with to of X%. year. standard XX, one-off items, sales the new to both reflecting significantly Mineral both partially including and EBITDA items, quarter Increased were income lower acquisition-related XX% making Consolidated offset our Starting and the increased increased by was SG&A favorable the X% significantly, improved by gross driven growth due mix input Products gross offset sales adjustments GAAP for X employee-related million, and higher increase the XX%, grew currency net margins second MFA increases December by quarter or prior adjusted $XX.X international income segment $XXX.X $XX.X in SG&A quarter net XX% and ago. The grew results, adjusted of expense. at Jack. while versus Animal driven increase costs, by increased XXXX, and grew by domestic as business, demand certain integrations you, well. in EPS Thank year costs. After foreign the losses net diluted and higher interest Adjusted adjusted Nutrition adjusted million due diluted profit

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

to net business due MFA growth new in & Nutritional sales other business, SG&A. was of partially November. of total legacy XX%, new XX% an by higher the by for higher or or microbial international that Animal and Within demand. $XX.X net vaccines net MFAs international million a sales the due in Specialty impacted Health increased in December MFA companion America, of of driven million, the sales nice segment, $X.X XX% Zoetis $XX.X that MFA and acceleration adjusted MFA sales mostly quarter, million sales offset were note driven domestic factors. to We profit increase, and sales reported and November Other Other months both sales periods the plus products. Vaccine double of $X.X driving Products increase to healthy increased saw Animal a XX% of from we blackout approximately gross transition Latin X animal legacy growth with million, demand and XX%. Please both the or higher in The domestic in million by sales contributed by Health a regions. & increase sales EBITDA growth $XX.X

are rough purposes only, to attributed Zoetis not estimate contribution. we expenses easily comparison providing EBITDA new of that a business. For note Please are many the

of the $XX estimated to only can EBITDA that be attributed Our million MFA those expenses includes new business. directly

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

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

$XX on at Cash million end the flow positive ended to XX, $XX Slide We months cash cash million expenditures. quarter. $XX We generated of of the in cash the invested $XX for capitalization-related generated X. and Turning December operating flow XX capital million and million free XXXX. of equivalents key metrics were

Medicated from on million of XX Additive the end total $XXX and portfolio, the XX-month Feed at X.Xx of trailing $XXX the trailing was Zoetis quarter Please ratio second leverage of Phibro gross adjusted from adjusted note months the Zoetis debt XX history months months includes X Our months EBITDA. of of based XX and that ownership. million EBITDA

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

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

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

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

consulting are also for other significant to initiative our reductions Forward EBITDA the this related XXXX the The acquisition portfolio. Feed initiative our areas part savings, do income and note one-time initiatives. now this will X, areas which Medicated focused price primarily of savings that cost we to growth. Onetime fees. of initiative related as growth in lays initiatives is headcount of to on that anticipate turn and early Zoetis included guidance unlocking help and this additional of includes Included such margin additional potential consist offerings, Please increases, our and procurement GAAP guidance cost not expanded out that costs product initiative. note year year fiscal as XXXX. growth for Slide revenue Let's benefits our Please guidance drive Phibro guidance are in fiscal Additive

a $XXX growth midpoint to sales the Zoetis Our approximately portfolio of as XX% This guidance XX% $XXX represents million. This to million total $X.X $X.XXX with to to and growth Medicated of Feed XXXX million. of represents increased approximately a $XX to total billion. year XX% the growth and of net updated XX% of fiscal approximately XX% This XX%. include adjusted net midpoint XX% midpoint range EBITDA billion a XX%. Total of Total of Additive represents to a adjusted to million XX%. of for income range a is of acquisition of follows: $XX

would further included one-time the net Phibro XXXX expect incremental includes GAAP to initiative MFA some for to currency our an transition integration, of gains during estimates destocking Also income and EPS FX contribution our inventory, net and in Forward losses distribution EPS acquisition-related such preliminary no you and costs from products. to constant agreements. GAAP of Growth the of and costs income from The and the related the costs Zoetis movements. related and impacts periods blackout new assumes year as service impact or Income are usual MFA fiscal

to We of and total full a growth to diluted in of XX% the which ability year midpoint a between adjusted EPS deliver XXXX, for approximately represents of a XX% fiscal $X.XX with XX%. are confident our $X.XX

reaffirm updated and with shareholder value. our enhancing financial strong we closing, our In to performance commitment guidance,

are performance the which include that, for could alongside improving in confidence Regina, profitability We please and questions? open MFA our to our in legacy integration portfolio excited business. With strong seamless in guidance, the new the our reflects line you

Operator

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

Ekaterina Knyazkova

the on Congrats quarter.

is So first the just guidance question update. on

a give upon can perhaps bit I little but more this think touched you you've color. bit, a

So to that I underlying for of that out growth last And the change seems the strong provided acquisition. relative on of were quarter $X.XX very like about? And Animal of and Health another guess acquisition quarter versus you $X.XX increase is the just is then backing EPS How net what's range? the the coming outlook talking second the question how from you performance. the number much business? the much It

products which and bit a driving regions across performance. or trends elaborate Just on portfolio you're the that of have seeing been the some

Glenn David

I'll I'll Thanks guidance, with the to EPS bit little question, for start comment business Ekaterina. on the a and performance. ask the Jack

at EPS coming from that well. strong look of the The it's the end in Zoetis bottom in you a majority legacy the from coming top when portion both at and about increase business So as with of of the our addition $X.XX. overall range, continued performance is

mentioned current Zoetis. The additional you include in performance As we in to great $X.XX. business business, as EPS then been time in the has this customers. than expectations about $X.XX improved guided an probably legacy to combination a also again, for our improved for but general of more calls, on guide our it's our of both a does performance Zoetis, But previous the performance of related well. And

they and we're better every concern U.S. is when let's in keep they're doing better that's whether the chickens, to Our And the that's customers in true it's doing what pigs, cattle, world, so basically driving get around the okay, they're for and category across the their they the healthy, world, perform okay. this what's and is market. in these animals protein, and business. And seeing in

Operator

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

Unknown Analyst

X on This is Gemma please. [ ] Mike. to related acquisition, questions for the MFA

a quite aligns stocking, seems out called business you that expected. then I how seeing guidance, of X you've in estimates, destocking, that $XXX light Can includes this things that? versus transition, out million with now if heard asset And EPS surprised prior higher last MFA you that the you about of came that Can in be about behind X walk million to the going which first, contribution like you months. talk the now the X you've if anything it your -- $XX about The terms that expectations MFA X started months, us in acquisition, updated the unusual on but release, expectations? is or call you're upside? And the for anything bit to you? guidance our for there the bit know months, a similarly, to it's you'd through drivers than but in owned like revenue

Glenn David

Sure.

question out for versus first So the the with being to the of bit the address being which we just aligned guidance million, part initially called $XXX revenue incremental in of the guidance your EPS Zoetis guidance a had terms higher.

factors there. X So

One, in profitability did Zoetis, of the half also will see than colleagues of we the improved little and the a as performance some across I the related the of bit factors: whose we hiring more seeing business. to some organization higher a, mentioned, are a initially second that's driven costs by year. the couple But see timing in of anticipated, underlying

the well in continue that for U.S. as of seen well. as with general, year the that performers, a full and expect pretty So mix benefits timing the just as well. And one positive we've stronger being we to some us bit

to the impacts as $XX well quarter performance on quarter, we to that the to blackout the we the related related call, we in in million as integration Related the some the transitionary expect mentioned periods. and did destocking as previous had

feel the nice prepared mentioned And a saw December. the but the forward as impacts. acceleration the the confident guided to essentially little blackout not a as of were we a we $XXX sales November destock we the trend fully some see about month of we in what impacts of from through November, the means work million had moving bit half period of well the we that is nice December that out how And in month as destocking, that remarks, of previously. we We're

Operator

Prasad of next Barclays. Our question Balaji the line from comes with

Mikaela Franceschina

on Mikaela for is This Balaji.

one. quick a Just

area? on So your Companion a complete, in to just bit talk if priorities with provide the more any still deal you this MFA focus pipeline so, can Is a about here? now details can And your us you Animal? guys key additional

Daniel Bendheim

Companion a that. take I'll for Donny. priority to us. It's key be Animal continues

out Livestock, nice However, remarks and strength making we wanted excited continued in products well actually our we're within to progress. focus about continued purposely, quarter, Livestock as business, Livestock in it want our call of Livestock, our investment on there's this pipeline and in to We prepared we are a not lot as because well. in

growth think a progress do continue on continue there. pipeline for our pets, to the is the us, continue Livestock to and star to people that we while and business make in we I want we're So to shining have have having and recognize to expect

Operator

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

Navann Ty Dietschi

headcount integration Can for and the and you MSA of discuss Zoetis portfolio any the you to potential the year expect date the rest of if reduction? impact of your plans

Glenn David

Yes.

our to to on feedback integration able terms that positive and a in of job provide our the date, integration their ability on customers, and was smoothly. portfolio them and the were our colleagues needs. across having So is moving of to tremendous our the priority we're key to the very did with Obviously, support day their X gotten make to sure globe care we've support able our customers we think us I broader pleasure now to a very able that support And from terms and that. in effectively

evolve well, integration. But including made with So additional very and from number the well. that continue with priority as as -- the plan. everything into marketing things side priority the well to obviously, well. Also, some manufacturing according extremely over we and colleagues we is system There organization. that's transitions progressed Zoetis next of that with our that need on progress a to pleased we've are was authorizations. key #X, onboarding has We're as the as, very That gone some was do going months, priority the to that

this indicated In would terms be to of initiative. never headcount headcount that there reduction, we've reductions related

Just obviously, the the colleagues of globally. product. reminder, to And X majority as need acquisition plants a produce the we was to continue those

reductions intentions as any had of never acquisition. headcount the we So of part

Operator

next Morgan from Bolduc line with Linda question Stanley. Our of come will the

Linda Bolduc

on This Wright. for is Linda Erin

that what year? Health? company, share on potential those throughout Animal could out demand for groups tariffs thoughts trends your is us? and latest species the margin implications the color on And EBITDA you Also, exposure of the for with to any balance And on what on So is progression of the play Phibro view in underlying expect how do additionally, key the you across the year? any

Jack Bendheim

I'll take the tariffs. easy one, the

and with of the no we So on, the and tariffs I at but production and Brazil night's directly the States. last House. based from portfolio in of factories think we dealing announcement would We're call, at the import just and very, our -- now. our just say sort fact looking overall, And are stuff, United where have small. we Israel We very right China in will that let's Chinese China most White do the be in in overall, of impacts are some looking

Glenn David

And progression, -- Phibro core the the Zoetis see in Phibro EBITDA of the our business the in we well and improvements margin business as terms EBITDA as of with in initiative Forward Forward portfolio. continue acquisition with with margin to

saw -- terms in of adjusted points improvement. we last XXX EBITDA So versus basis year,

cattle profitability earlier, major of demand trends well for swine, strong Forward across the the would that with to continue terms that the continued that of initiative with many continuing Zoetis forward. And as the as moving we're year, expect have margins optimize and of markets. We see to the seeing the as in of categories, in many in our rest we very focus Phibro the portfolio we good Jack growth business across mentioned poultry,

year. flashing the markets, for majority the dashboard for all get yellow see positive us as of our green, red. those and that So we which just we shows internally rest are the flashlights key green, very of a in of And

Operator

Instructions] [Operator

Glenn David

on And just follow the implications. tariff up to

on Zoetis are looked are We've we through said, implications the all we business the that part working as tariffs. Jack -- We across in do have of sources, our the acquired ability the a plant those As to of China in very acquisition. do for of in looking into goods units for the guidance you understand look event our Animal Mineral passing to the tariffs mitigate majority would really have cost XXXX, or the Whether tariffs XXXX. see Nutrition, at of impact wouldn't when become place our Health, on that based our burdensome of the those any fiscal in the mitigation feel we do customers turns, across and alternative It confident year some impact. And our that's of to exposure And of the to we sold. business some units profitability. varies there. we between impact inventory plans

So or implications guidance further today current any confident feel that we we the provided of very that accommodate would tariffs.

Operator

will Glenn over David conclude the session. I'll back closing turn for our that any question-and-answer call to remarks. And

Glenn David

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

Operator

conclude joining. you all today's Thank call. for That will

disconnect. now may You

Phibro Animal Health (PAHC) 6 Feb 252025 Q2 Earnings call transcript