Statements of Operations-Additional Information

9 Months Ended

Mar. 31, 2023

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 customers 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 includes 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: Vaccine products 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 for animal 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				Nine Months
For the Periods Ended March 31	2023		2022		2023		2022
Animal Health
MFAs and other	$	93,217	$	84,330	$	283,186	$	259,812
Nutritional specialties		45,016		41,394		127,926		114,721
Vaccines		26,201		22,865		71,984		65,987
Total Animal Health	$	164,434	$	148,589	$	483,096	$	440,520
Mineral Nutrition		62,922		69,033		184,212		190,120
Performance Products		18,317		21,997		55,532		56,356
Total	$	245,673	$	239,619	$	722,840	$	686,996

Net Sales by Region

	Three Months				Nine Months
For the Periods Ended March 31	2023		2022		2023		2022
United States	$	148,529	$	146,820	$	433,716	$	412,284
Latin America and Canada		53,881		45,048		159,946		135,722
Europe, Middle East and Africa		28,174		29,931		85,518		90,889
Asia Pacific		15,089		17,820		43,660		48,101
Total	$	245,673	$	239,619	$	722,840	$	686,996

Net sales by region are based on country of destination.

Deferred revenue was $1,479 and $2,051 as of March 31, 2023 and June 30, 2022, respectively. Accrued expenses and other current liabilities included $508 and $822 of the total deferred revenue as of March 31, 2023 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				Nine Months
For the Periods Ended March 31	2023		2022		2023		2022
Interest expense, net
2021 Term A loan	$	1,450	$	2,208	$	4,836	$	6,745
Revolving credit facility		3,067		690		7,480		1,936
2022 Term loan		191		—		379		—
Amortization of debt issuance costs		188		147		514		442
Other		10		67		20		156
Interest expense		4,906		3,112		13,229		9,279
Interest income		(1,035)		(187)		(2,407)		(512)
	$	3,871	$	2,925	$	10,822	$	8,767

Depreciation and Amortization

	Three Months				Nine Months
For the Periods Ended March 31	2023		2022		2023		2022
Depreciation and amortization
Depreciation of property, plant and equipment	$	6,067	$	6,214	$	18,177	$	17,792
Amortization of intangible assets		2,422		2,231		7,261		6,508
	$	8,489	$	8,445	$	25,438	$	24,300