Statements of Operations-Additional Information

3 Months Ended

Sep. 30, 2024

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 enhance nutrition to help improve animal health and well-being. We sell animal health and mineral nutrition products directly to integrated poultry, cattle and swine customers and through commercial animal feed manufacturers, 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 reportable 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 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 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 antibacterials and other 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, swine, beef and dairy cattle and aquaculture. 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 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	2024		2023
Animal Health
MFAs and other	$	107,844	$	94,104
Nutritional specialties		42,649		40,210
Vaccines		32,030		26,216
Total Animal Health	$	182,523	$	160,530
Mineral Nutrition		59,062		56,026
Performance Products		18,847		14,793
Total	$	260,432	$	231,349

Net Sales by Region

	Three Months
For the Periods Ended September 30	2024		2023
United States	$	143,549	$	131,287
Latin America and Canada		71,151		58,703
Europe, Middle East and Africa		31,125		26,879
Asia Pacific		14,607		14,480
Total	$	260,432	$	231,349

Net sales by region are based on country of destination.

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.

Additional Information

Interest Expense, Net

	Three Months
For the Periods Ended September 30	2024		2023
Interest expense, net
Credit Facilities	$	6,200	$	5,101
2022 Term Loan		12		216
Amortization of debt issuance costs		367		260
Refinancing expense		1,960		—
Other		226		68
Interest expense		8,765		5,645
Interest income		(1,124)		(1,081)
	$	7,641	$	4,564

For the three months ended September 30, 2024, refinancing expense included $1,446 of new creditor and third-party financing costs and $514 in debt extinguishment costs resulting from the the writeoff of unamortized deferred financing costs on previously outstanding debt.

Depreciation and Amortization

	Three Months
For the Periods Ended September 30	2024		2023
Depreciation and amortization
Depreciation of property, plant and equipment	$	6,742	$	6,431
Amortization of intangible assets		2,262		2,440
	$	9,004	$	8,871

Pension Settlement

In July 2023, we entered into an annuity purchase agreement to irrevocably transfer a portion of our pension benefit obligation to a third-party insurance company. The annuity purchase price was $26,381 and was approximately equal to the benefit obligation transferred. The annuity purchase was funded from pension assets. During the three months ended September 30, 2023, we recognized a partial settlement of the pension plan and recorded $10,425 in selling, general and administrative expenses in our consolidated statement of operations, resulting from the recognition of net pension losses previously included in Accumulated other comprehensive loss.