On August 28, 2024, Phibro Animal Health Corp (PAHC, Financial) released its 8-K filing detailing the financial results for its fourth quarter and fiscal year ended June 30, 2024. Phibro Animal Health Corp operates as a diversified animal health and mineral nutrition company, developing, manufacturing, and marketing products for food animals such as poultry, swine, beef and dairy cattle, and aquaculture. The company operates through three segments: Animal Health, Mineral Nutrition, and Performance Products, with the Animal Health segment being the primary revenue driver.
Quarterly Performance Overview
For the three months ended June 30, 2024, Phibro reported net sales of $273.2 million, a 7% increase compared to the same period last year. However, net income decreased significantly to $0.8 million, down from $11.5 million in the prior year. Diluted earnings per share (EPS) fell to $0.02, missing the analyst estimate of $0.30. Adjusted EBITDA rose by 3% to $33.4 million, while adjusted net income increased by 10% to $16.7 million, resulting in an adjusted diluted EPS of $0.41, up 10% from the previous year.
Annual Performance Overview
For the fiscal year ended June 30, 2024, Phibro reported net sales of $1,017.7 million, a 4% increase year-over-year. Net income for the year was $2.4 million, a sharp decline from $32.6 million in the previous year. Diluted EPS for the year was $0.06, down from $0.81. Adjusted EBITDA decreased by 1% to $111.2 million, while adjusted net income slightly decreased by 1% to $48.4 million, resulting in an adjusted diluted EPS of $1.19, down 1% from the prior year.
Segment Performance
Net sales in the Animal Health segment increased by 8% to $191.5 million for the quarter, driven by higher demand for Medicated Feed Additives (MFAs) and vaccines. The Mineral Nutrition segment saw a 6% increase in net sales to $62.1 million, while the Performance Products segment experienced a slight decline of 1% to $19.6 million.
Financial Metrics and Analysis
Gross profit for the quarter increased by 14% to $87.2 million, with a gross margin of 31.9%, up from 30.1% in the prior year. However, selling, general, and administrative expenses (SG&A) rose by 30% to $68.7 million, primarily due to acquisition-related costs and higher employee-related expenses. Interest expense increased by 5% to $4.7 million, and foreign currency losses amounted to $7.3 million, compared to gains of $2.2 million in the previous year.
| Metric | Q4 2024 | Q4 2023 | Change |
|---|---|---|---|
| Net Sales | $273.2 million | $255.0 million | 7% |
| Net Income | $0.8 million | $11.5 million | -93% |
| Diluted EPS | $0.02 | $0.28 | -93% |
| Adjusted EBITDA | $33.4 million | $32.3 million | 3% |
| Adjusted Net Income | $16.7 million | $15.2 million | 10% |
Commentary and Future Outlook
“We showed a lot of strength in our 4th quarter performance, with each of our segments growing at a faster year-over-year rate as compared to their first nine months of the year. This was led by our core Animal Health segment which grew at 8% for the quarter, with particular strength in our vaccine and MFA & Other lines,” said Jack Bendheim, Phibro’s Chairman, President, and Chief Executive Officer.
“We ended the year on an upswing that we anticipate building upon as we enter our 2025 fiscal year. Our guidance reflects our strong momentum as well as the early fruits of Phibro Forward - a company-wide initiative we have undertaken focused on unlocking additional areas of revenue growth and cost savings,” Jack Bendheim added.
Conclusion
Despite missing EPS estimates, Phibro Animal Health Corp (PAHC, Financial) demonstrated solid revenue growth, particularly in its Animal Health segment. The company's strategic initiatives and upcoming acquisition of Zoetis’s Medicated Feed Additive portfolio are expected to drive future growth. Investors will be keen to see how these developments unfold in the coming fiscal year.
Explore the complete 8-K earnings release (here) from Phibro Animal Health Corp for further details.
