Statements of Operations-Additional Information

3 Months Ended

Sep. 30, 2022

Statements of Operations-Additional Information

Disaggregated Revenue, Deferred Revenue and Customer Payment Terms

Disaggregated revenue, deferred revenue and customer payment terms

We develop, manufacture and market a broad range of products for food and companion animals including poultry, swine, beef and dairy cattle, aquaculture, and dogs. The products help prevent, control and treat diseases and support nutrition to help improve animal health and well-being. The animal health and mineral nutrition products are sold directly to integrated poultry, cattle, and swine integrators and through commercial animal feed manufacturers, wholesalers, distributors and veterinarians. 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 on 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. The MFAs and other category also include other antibacterial products and processing aids used in the ethanol fermentation industry.

● Nutritional specialties: Nutritional specialty products enhance nutrition to help improve health and performance in areas such as immune system function and digestive health. We are also a developer, manufacturer and marketer of microbial products and bioproducts for a variety of applications serving animal health and nutrition, environmental, industrial and agricultural customers.

● 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, as well as adjuvants to vaccine manufacturers. We have also 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. Our 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 specialty ingredients for use in the personal care, industrial chemical and chemical catalyst industries.

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	2022		2021
Animal Health
MFAs and other	$	92,790	$	83,758
Nutritional specialties		39,054		35,997
Vaccines		23,015		21,249
Total Animal Health	$	154,859	$	141,004
Mineral Nutrition		59,646		54,432
Performance Products		18,016		19,229
Total	$	232,521	$	214,665

Net Sales by Region

	Three Months
For the Periods Ended September 30	2022		2021
United States	$	135,804	$	126,319
Latin America and Canada		52,246		42,660
Europe, Middle East and Africa		29,517		30,935
Asia Pacific		14,954		14,751
Total	$	232,521	$	214,665

Net sales by region are based on country of destination.

Deferred revenue was $1,601 and $2,051 as of September 30, 2022, and June 30, 2022, respectively. Accrued expenses and other current liabilities included $458 and $822 of the total deferred revenue as of September 30, 2022, and June 30, 2022, 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 exclude 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.

Additional Information

Interest Expense

	Three Months
For the Periods Ended September 30	2022		2021
Interest expense, net
Term loan	$	1,738	$	2,273
Revolving credit facility		1,809		599
Amortization of debt issuance costs		147		148
Other		1		45
Interest expense		3,695		3,065
Interest income		(628)		(176)
	$	3,067	$	2,889

Depreciation and Amortization

	Three Months
For the Periods Ended September 30	2022		2021
Depreciation and amortization
Depreciation of property, plant and equipment	$	6,051	$	5,714
Amortization of intangible assets		2,396		2,135
Amortization of other assets		3		5
	$	8,450	$	7,854