Statements of Operations-Additional Information

3 Months Ended

Sep. 30, 2020

Statements of Operations-Additional Information

Statements of Operations-Additional Information

3. Statements of Operations—Additional Information

Disaggregated revenue, deferred revenue and customer payment terms

We develop, manufacture and market a broad range of products for food animals including poultry, swine, beef and dairy cattle, and aquaculture. The products help prevent, control and treat diseases, enhance nutrition to help improve health and contribute to balanced mineral nutrition. The animal health and mineral nutrition products are sold directly to integrated poultry, swine and cattle integrators and through commercial animal feed manufacturers, wholesalers and distributors. The animal health industry and demand for many of the animal health products in a particular region are affected by changing disease pressures and by weather conditions, as product usage follows varying weather patterns and seasons. Our operations are primarily focused in regions where the majority of livestock production is consolidated in large commercial farms.

We have a diversified portfolio of products that are classified within our three business segments—Animal Health, Mineral Nutrition and Performance Products. Each segment has its own dedicated management and sales team.

Animal Health

The Animal Health business develops, manufactures and markets products in three main categories:

● MFAs and Other: MFAs and other products primarily consist of concentrated medicated products that are administered through animal feeds, commonly referred to as Medicated Feed Additives (“MFAs”). Specific product classifications include antibacterials, which inhibit the growth of pathogenic bacteria that cause bacterial infections in animals; anticoccidials, which inhibit the growth of coccidia (parasites) that damage the intestinal tract of animals; and other related products.

● Nutritional Specialties: Nutritional specialty products enhance nutrition to help improve health and performance in areas such as immune system function and digestive health.

● Vaccines: Our vaccines are primarily focused on preventing diseases in poultry and swine. They protect animals from either viral or bacterial disease challenges. We develop, manufacture and market conventionally licensed and autogenous vaccine products and also produce and market adjuvants to vaccine manufacturers. We have developed and market an innovative and proprietary delivery platform for vaccines.

Mineral Nutrition

The Mineral Nutrition business is comprised of formulations and concentrations of trace minerals such as zinc, manganese, copper, iron and other compounds, with a focus on customers in North America. The customers use these products to fortify the daily feed requirements of their livestock’s diets and maintain an optimal balance of trace elements in each animal. We manufacture and market a broad range of mineral nutrition products for food animals including poultry, swine and beef and dairy cattle.

Performance Products

The Performance Products business manufactures and markets a number of specialty ingredients for use in the personal care, industrial chemical and chemical catalyst industries, predominantly in the United States.

The following tables present our revenues disaggregated by major product category and geographic region:

Net Sales by Product Type

	Three Months
For the Periods Ended September 30	2020		2019
Animal Health
MFAs and other	$	78,703	$	75,034
Nutritional specialties		32,600		30,433
Vaccines		17,066		16,383
Total Animal Health	$	128,369	$	121,850
Mineral Nutrition		51,440		52,649
Performance Products		15,385		15,221
Total	$	195,194	$	189,720

Net Sales by Region

For the Periods Ended September 30	Three Months
	2020		2019
United States	$	118,771	$	118,487
Latin America and Canada		37,756		36,741
Europe, Middle East and Africa		26,872		23,693
Asia Pacific		11,795		10,799
Total	$	195,194	$	189,720

Net sales by region are based on country of destination.

Deferred revenue was $ 4,358 and $4,570 as of September 30, 2020, and June 30, 2020, respectively. Accrued expenses and other current liabilities included $ 1,196 and $1,109 of the total deferred revenue as of September 30, 2020, and June 30, 2020, respectively. The deferred revenue resulted primarily from certain customer arrangements, including technology licensing fees and discounts on future product sales. The transaction price associated with our deferred revenue arrangements is generally based on the stand-alone sales prices of the individual products or services.

Our customer payment terms generally range from 30 to 120 days globally and do not include any significant financing components. Payment terms vary based on industry and business practices within the regions in which we operate. Our average worldwide collection period for accounts receivable is approximately 60 days after the revenue is recognized.

Interest Expense and Depreciation and Amortization

	Three Months
For the Periods Ended September 30	2020		2019
Interest expense, net
Term loan	$	1,875	$	2,048
Revolving credit facility		946		1,431
Amortization of debt issuance costs		221		221
Other		67		133
Interest expense		3,109		3,833
Interest (income)		(299)		(479)
	$	2,810	$	3,354
	Three Months
For the Periods Ended September 30	2020		2019
Depreciation and amortization
Depreciation of property, plant and equipment	$	5,831	$	5,731
Amortization of intangible assets		2,205		2,038
Amortization of other assets		—		12
	$	8,036	$	7,781