|
Delaware
|
| |
13-1840497
|
|
|
(State or other jurisdiction of
incorporation or organization) |
| |
(I.R.S. Employer
Identification No.) |
|
|
Glenpointe Centre East, 3rd Floor
300 Frank W. Burr Boulevard, Suite 21 Teaneck, New Jersey (Address of Principal Executive Offices)
|
| |
07666-6712
(Zip Code)
|
|
| Large accelerated filer | | | ☐ | | | | | | Accelerated filer | | | ☒ | |
| Non-accelerated filer | | | ☐ | | | | | | Smaller reporting company | | | ☐ | |
| | |
Page
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| |||
PART I—FINANCIAL INFORMATION | | | |||||
Item 1.
Financial Statements (unaudited)
|
| | |||||
| | | | 3 | | | |
| | | | 4 | | | |
| | | | 5 | | | |
| | | | 6 | | | |
| | | | 7 | | | |
| | | | 19 | | | |
| | | | 30 | | | |
| | | | 31 | | | |
PART II—OTHER INFORMATION | | | |||||
| | | | 32 | | | |
| | | | 32 | | | |
| | | | 32 | | | |
| | | | 32 | | | |
| | | | 32 | | | |
| | | | 32 | | | |
| | | | 32 | | | |
| | | | 34 | | |
| | |
Three Months
|
| |
Six Months
|
| ||||||||||||||||||
For the Periods Ended December 31
|
| |
2016
|
| |
2015
|
| |
2016
|
| |
2015
|
| ||||||||||||
| | |
(unaudited)
(in thousands, except per share amounts) |
| |||||||||||||||||||||
Net sales
|
| | | $ | 191,598 | | | | | $ | 191,773 | | | | | $ | 379,585 | | | | | $ | 378,893 | | |
Cost of goods sold
|
| | | | 128,100 | | | | | | 130,311 | | | | | | 255,088 | | | | | | 258,224 | | |
Gross profit
|
| | | | 63,498 | | | | | | 61,462 | | | | | | 124,497 | | | | | | 120,669 | | |
Selling, general and administrative expenses
|
| | | | 40,870 | | | | | | 38,841 | | | | | | 80,056 | | | | | | 76,190 | | |
Operating income
|
| | | | 22,628 | | | | | | 22,621 | | | | | | 44,441 | | | | | | 44,479 | | |
Interest expense, net
|
| | | | 3,872 | | | | | | 3,967 | | | | | | 7,779 | | | | | | 7,786 | | |
Foreign currency (gains) losses, net
|
| | | | (548) | | | | | | 2,557 | | | | | | (214) | | | | | | (2,896) | | |
Income before income taxes
|
| | | | 19,304 | | | | | | 16,097 | | | | | | 36,876 | | | | | | 39,589 | | |
Provision (benefit) for income taxes
|
| | | | 5,887 | | | | | | (14,081) | | | | | | 11,282 | | | | | | (9,342) | | |
Net income
|
| | | $ | 13,417 | | | | | $ | 30,178 | | | | | $ | 25,594 | | | | | $ | 48,931 | | |
Net income per share | | | | | | ||||||||||||||||||||
basic
|
| | | $ | 0.34 | | | | | $ | 0.77 | | | | | $ | 0.65 | | | | | $ | 1.25 | | |
diluted
|
| | | $ | 0.34 | | | | | $ | 0.75 | | | | | $ | 0.64 | | | | | $ | 1.22 | | |
Weighted average common shares outstanding | | | | | | ||||||||||||||||||||
basic
|
| | | | 39,411 | | | | | | 39,163 | | | | | | 39,409 | | | | | | 39,128 | | |
diluted
|
| | | | 40,002 | | | | | | 39,978 | | | | | | 39,954 | | | | | | 39,995 | | |
Dividends per share
|
| | | $ | 0.10 | | | | | $ | 0.10 | | | | | $ | 0.20 | | | | | $ | 0.20 | | |
| | |
Three Months
|
| |
Six Months
|
| ||||||||||||||||||
For the Periods Ended December 31
|
| |
2016
|
| |
2015
|
| |
2016
|
| |
2015
|
| ||||||||||||
| | |
(unaudited)
(in thousands) |
| |||||||||||||||||||||
Net income
|
| | | $ | 13,417 | | | | | $ | 30,178 | | | | | $ | 25,594 | | | | | $ | 48,931 | | |
Change in fair value of derivative instruments
|
| | | | 270 | | | | | | 1,909 | | | | | | 304 | | | | | | (2,994) | | |
Foreign currency translation adjustment
|
| | | | (2,296) | | | | | | 2,014 | | | | | | (3,189) | | | | | | (19,715) | | |
Unrecognized net pension gains (losses)
|
| | | | 4,671 | | | | | | 508 | | | | | | 11,840 | | | | | | 892 | | |
(Provision) benefit for income taxes
|
| | | | (1,894) | | | | | | (1,371) | | | | | | (4,644) | | | | | | 2,315 | | |
Other comprehensive income (loss)
|
| | | | 751 | | | | | | 3,060 | | | | | | 4,311 | | | | | | (19,502) | | |
Comprehensive income (loss)
|
| | | $ | 14,168 | | | | | $ | 33,238 | | | | | $ | 29,905 | | | | | $ | 29,429 | | |
|
As of
|
| |
December 31,
2016 |
| |
June 30,
2016 |
| ||||||
| | |
(unaudited)
(in thousands, except share and per share amounts) |
| |||||||||
ASSETS | | | | ||||||||||
Cash and cash equivalents
|
| | | $ | 39,220 | | | | | $ | 33,605 | | |
Accounts receivable, net
|
| | | | 124,131 | | | | | | 123,790 | | |
Inventories, net
|
| | | | 158,819 | | | | | | 167,691 | | |
Other current assets
|
| | | | 16,839 | | | | | | 17,745 | | |
Total current assets
|
| | | | 339,009 | | | | | | 342,831 | | |
Property, plant and equipment, net
|
| | | | 127,180 | | | | | | 127,323 | | |
Intangibles, net
|
| | | | 57,134 | | | | | | 60,095 | | |
Goodwill
|
| | | | 21,121 | | | | | | 21,121 | | |
Other assets
|
| | | | 47,841 | | | | | | 56,465 | | |
Total assets
|
| | | $ | 592,285 | | | | | $ | 607,835 | | |
LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | ||||||||||
Current portion of long-term debt
|
| | | $ | 2,901 | | | | | $ | 2,907 | | |
Accounts payable
|
| | | | 54,826 | | | | | | 60,167 | | |
Accrued expenses and other current liabilities
|
| | | | 45,602 | | | | | | 45,703 | | |
Total current liabilities
|
| | | | 103,329 | | | | | | 108,777 | | |
Revolving credit facility
|
| | | | 48,500 | | | | | | 69,000 | | |
Long-term debt
|
| | | | 277,132 | | | | | | 278,265 | | |
Other liabilities
|
| | | | 50,711 | | | | | | 61,313 | | |
Total liabilities
|
| | | | 479,672 | | | | | | 517,355 | | |
Commitments and contingencies (Note 8) | | | | ||||||||||
Common stock, par value $0.0001 per share; 300,000,000 Class A shares authorized, 18,529,095 and 18,519,757 shares issued and outstanding at December 31, 2016, and June 30, 2016, respectively; 30,000,000 Class B shares authorized, 20,887,811 shares issued and outstanding at December 31, 2016, and June 30, 2016
|
| | | | 4 | | | | | | 4 | | |
Preferred stock, par value $0.0001 per share; 16,000,000 shares authorized,
no shares issued and outstanding |
| | | | — | | | | | | — | | |
Paid-in capital
|
| | | | 118,409 | | | | | | 118,299 | | |
Retained earnings
|
| | | | 51,674 | | | | | | 33,962 | | |
Accumulated other comprehensive income (loss)
|
| | | | (57,474) | | | | | | (61,785) | | |
Total stockholders’ equity
|
| | | | 112,613 | | | | | | 90,480 | | |
Total liabilities and stockholders’ equity
|
| | | $ | 592,285 | | | | | $ | 607,835 | | |
|
| | |
Six Months
|
| |||||||||
For the Periods Ended December 31
|
| |
2016
|
| |
2015
|
| ||||||
| | |
(unaudited)
(in thousands) |
| |||||||||
OPERATING ACTIVITIES | | | | ||||||||||
Net income
|
| | | $ | 25,594 | | | | | $ | 48,931 | | |
Adjustments to reconcile net income to net cash provided (used) by operating
activities: |
| | | ||||||||||
Depreciation and amortization
|
| | | | 12,762 | | | | | | 10,822 | | |
Amortization of debt issuance costs and debt discount
|
| | | | 508 | | | | | | 484 | | |
Acquisition-related accrued compensation
|
| | | | 840 | | | | | | 840 | | |
Acquisition-related accrued interest
|
| | | | 855 | | | | | | 689 | | |
Pension settlement cost
|
| | | | 1,702 | | | | | | — | | |
Deferred income taxes
|
| | | | 3,736 | | | | | | (21,615) | | |
Foreign currency (gains) losses, net
|
| | | | 293 | | | | | | (2,790) | | |
Other
|
| | | | 310 | | | | | | 149 | | |
Changes in operating assets and liabilities: | | | | ||||||||||
Accounts receivable, net
|
| | | | (1,583) | | | | | | (6,885) | | |
Inventories, net
|
| | | | 7,017 | | | | | | (12,794) | | |
Other current assets
|
| | | | 919 | | | | | | (309) | | |
Other assets
|
| | | | (512) | | | | | | (3,343) | | |
Accounts payable
|
| | | | (4,667) | | | | | | (4,842) | | |
Accrued expenses and other liabilities
|
| | | | (41) | | | | | | (3,733) | | |
Net cash provided (used) by operating activities
|
| | | | 47,733 | | | | | | 5,604 | | |
INVESTING ACTIVITIES | | | | ||||||||||
Capital expenditures
|
| | | | (10,564) | | | | | | (17,653) | | |
Other, net
|
| | | | (201) | | | | | | 263 | | |
Net cash provided (used) by investing activities
|
| | | | (10,765) | | | | | | (17,390) | | |
FINANCING ACTIVITIES | | | | ||||||||||
Revolving credit facility borrowings
|
| | | | 73,000 | | | | | | 100,500 | | |
Revolving credit facility repayments
|
| | | | (93,500) | | | | | | (83,500) | | |
Payments of long-term debt, capital leases and other
|
| | | | (2,776) | | | | | | (2,466) | | |
Proceeds from common shares issued
|
| | | | 110 | | | | | | 2,078 | | |
Dividends paid
|
| | | | (7,882) | | | | | | (7,827) | | |
Net cash provided (used) by financing activities
|
| | | | (31,048) | | | | | | 8,785 | | |
Effect of exchange rate changes on cash
|
| | | | (305) | | | | | | (843) | | |
Net increase (decrease) in cash and cash equivalents
|
| | | | 5,615 | | | | | | (3,844) | | |
Cash and cash equivalents at beginning of period
|
| | | | 33,605 | | | | | | 29,216 | | |
Cash and cash equivalents at end of period
|
| | | $ | 39,220 | | | | | $ | 25,372 | | |
|
| | |
Three Months
|
| |
Six Months
|
| ||||||||||||||||||
For the Periods Ended December 31
|
| |
2016
|
| |
2015
|
| |
2016
|
| |
2015
|
| ||||||||||||
Net income
|
| | | $ | 13,417 | | | | | $ | 30,178 | | | | | $ | 25,594 | | | | | $ | 48,931 | | |
Weighted average number of shares – basic
|
| | | | 39,411 | | | | | | 39,163 | | | | | | 39,409 | | | | | | 39,128 | | |
Dilutive effect of stock options
|
| | | | 591 | | | | | | 815 | | | | | | 545 | | | | | | 867 | | |
Weighted average number of shares – diluted
|
| | | | 40,002 | | | | | | 39,978 | | | | | | 39,954 | | | | | | 39,995 | | |
Net income per share | | | | | | ||||||||||||||||||||
basic
|
| | | $ | 0.34 | | | | | $ | 0.77 | | | | | $ | 0.65 | | | | | $ | 1.25 | | |
diluted
|
| | | $ | 0.34 | | | | | $ | 0.75 | | | | | $ | 0.64 | | | | | $ | 1.22 | | |
| | |
Three Months
|
| |
Six Months
|
| ||||||||||||||||||
For the Periods Ended December 31
|
| |
2016
|
| |
2015
|
| |
2016
|
| |
2015
|
| ||||||||||||
Interest expense, net | | | | | | ||||||||||||||||||||
Term B loan
|
| | | $ | 2,866 | | | | | $ | 2,927 | | | | | $ | 5,771 | | | | | $ | 5,862 | | |
Revolving credit facility
|
| | | | 731 | | | | | | 342 | | | | | | 1,686 | | | | | | 602 | | |
Amortization of debt issuance costs and debt discount
|
| | | | 255 | | | | | | 242 | | | | | | 508 | | | | | | 484 | | |
Acquisition-related accrued interest
|
| | | | 462 | | | | | | 344 | | | | | | 855 | | | | | | 689 | | |
Other
|
| | | | 47 | | | | | | 169 | | | | | | 128 | | | | | | 255 | | |
Interest expense
|
| | | | 4,361 | | | | | | 4,024 | | | | | | 8,948 | | | | | | 7,892 | | |
Interest (income)
|
| | | | (489) | | | | | | (57) | | | | | | (1,169) | | | | | | (106) | | |
| | | | $ | 3,872 | | | | | $ | 3,967 | | | | | $ | 7,779 | | | | | $ | 7,786 | | |
Depreciation and amortization | | | | | | ||||||||||||||||||||
Depreciation of property, plant and equipment
|
| | | $ | 4,952 | | | | | $ | 4,075 | | | | | $ | 9,683 | | | | | $ | 8,186 | | |
Amortization of intangible assets
|
| | | | 1,434 | | | | | | 1,260 | | | | | | 2,962 | | | | | | 2,519 | | |
Amortization of other assets
|
| | | | 58 | | | | | | 58 | | | | | | 117 | | | | | | 117 | | |
| | | | $ | 6,444 | | | | | $ | 5,393 | | | | | $ | 12,762 | | | | | $ | 10,822 | | |
|
As of
|
| |
December 31,
2016 |
| |
June 30,
2016 |
| ||||||
Inventories | | | | ||||||||||
Raw materials
|
| | | $ | 56,299 | | | | | $ | 51,369 | | |
Work-in-process
|
| | | | 9,455 | | | | | | 8,074 | | |
Finished goods
|
| | | | 93,065 | | | | | | 108,248 | | |
| | | | $ | 158,819 | | | | | $ | 167,691 | | |
|
As of
|
| |
December 31,
2016 |
| |
June 30,
2016 |
| ||||||
Accrued expenses and other current liabilities | | | | ||||||||||
Employee related
|
| | | $ | 21,011 | | | | | $ | 21,712 | | |
Commissions and rebates
|
| | | | 4,572 | | | | | | 3,722 | | |
Insurance related
|
| | | | 1,617 | | | | | | 1,780 | | |
Professional fees
|
| | | | 3,930 | | | | | | 3,573 | | |
Income and other taxes
|
| | | | 3,007 | | | | | | 1,910 | | |
Deferred consideration on acquisitions
|
| | | | — | | | | | | 1,250 | | |
Other
|
| | | | 11,465 | | | | | | 11,756 | | |
| | | | $ | 45,602 | | | | | $ | 45,703 | | |
|
As of
|
| |
December 31,
2016 |
| |
June 30,
2016 |
| ||||||
Accumulated other comprehensive income (loss) | | | | ||||||||||
Derivative instruments
|
| | | $ | 2,959 | | | | | $ | 2,655 | | |
Foreign currency translation adjustment
|
| | | | (45,093) | | | | | | (41,904) | | |
Unrecognized net pension gains (losses)
|
| | | | (19,137) | | | | | | (30,977) | | |
(Provision) benefit for income taxes on derivative instruments
|
| | | | (1,664) | | | | | | (1,548) | | |
(Provision) benefit for incomes taxes on long-term intercompany investments
|
| | | | 8,166 | | | | | | 8,166 | | |
(Provision) benefit for income taxes on pension gains (losses)
|
| | | | (2,705) | | | | | | 1,823 | | |
| | | | $ | (57,474) | | | | | $ | (61,785) | | |
|
As of
|
| |
December 31,
2016 |
| |
June 30,
2016 |
| ||||||
Term B Loan due April 2021
|
| | | $ | 282,750 | | | | | $ | 284,200 | | |
Capitalized lease obligations
|
| | | | 1 | | | | | | 7 | | |
| | | | | 282,751 | | | | | | 284,207 | | |
Unamortized debt issuance costs and debt discount
|
| | | | (2,718) | | | | | | (3,035) | | |
Less: current maturities
|
| | | | (2,901) | | | | | | (2,907) | | |
| | | | $ | 277,132 | | | | | $ | 278,265 | | |
|
| | |
Three Months
|
| |
Six Months
|
| ||||||||||||||||||
For the Periods Ended December 31
|
| |
2016
|
| |
2015
|
| |
2016
|
| |
2015
|
| ||||||||||||
Service cost – benefits earned during the period
|
| | | $ | 284 | | | | | $ | 751 | | | | | $ | 845 | | | | | $ | 1,470 | | |
Interest cost on benefit obligation
|
| | | | 505 | | | | | | 757 | | | | | | 1,048 | | | | | | 1,446 | | |
Expected return on plan assets
|
| | | | (843) | | | | | | (846) | | | | | | (1,706) | | | | | | (1,588) | | |
Amortization of net actuarial (gain) loss and prior service costs
|
| | | | 105 | | | | | | 508 | | | | | | 452 | | | | | | 892 | | |
Settlement cost
|
| | | | 1,702 | | | | | | — | | | | | | 1,702 | | | | | | — | | |
Net periodic pension expense
|
| | | $ | 1,753 | | | | | $ | 1,170 | | | | | $ | 2,341 | | | | | $ | 2,220 | | |
|
Instrument
|
| |
Hedge
|
| |
Notional
Amount at December 31, 2016 |
| |
Fair value as of
|
| |||||||||
|
December 31,
2016 |
| |
June 30,
2016 |
| ||||||||||||||
Options
|
| |
Brazilian Real calls
|
| |
R$78,000
|
| | | $ | 2,982 | | | | | $ | 3,027 | | |
Options
|
| |
Brazilian Real puts
|
| |
R$78,000
|
| | | $ | (23) | | | | | $ | (372) | | |
As of
|
| |
December 31, 2016
|
| |
June 30, 2016
|
| ||||||||||||||||||||||||||||||
| | |
Level 1
|
| |
Level 2
|
| |
Level 3
|
| |
Level 1
|
| |
Level 2
|
| |
Level 3
|
| ||||||||||||||||||
Derivatives asset
|
| | | $ | — | | | | | $ | 2,959 | | | | | $ | — | | | | | $ | — | | | | | $ | 2,655 | | | | | $ | — | | |
Deferred contingent consideration on acquisitions
|
| | | $ | — | | | | | $ | — | | | | | $ | (7,530) | | | | | $ | — | | | | | $ | — | | | | | $ | (6,745) | | |
|
Balance, June 30, 2016
|
| | | $ | (6,745) | | |
|
Acquisition-related accrued interest
|
| | | | (855) | | |
|
Payment
|
| | | | 70 | | |
|
Balance, December 31, 2016
|
| | | $ | (7,530) | | |
|
| | |
Three Months
|
| |
Six Months
|
| ||||||||||||||||||
For the Periods Ended December 31
|
| |
2016
|
| |
2015
|
| |
2016
|
| |
2015
|
| ||||||||||||
Net sales | | | | | | ||||||||||||||||||||
MFAs and other
|
| | | $ | 77,475 | | | | | $ | 85,569 | | | | | $ | 160,894 | | | | | $ | 171,090 | | |
Nutritional Specialties
|
| | | | 29,247 | | | | | | 24,222 | | | | | | 55,551 | | | | | | 46,592 | | |
Vaccines
|
| | | | 16,951 | | | | | | 11,713 | | | | | | 31,729 | | | | | | 23,956 | | |
Animal Health
|
| | | | 123,673 | | | | | | 121,504 | | | | | | 248,174 | | | | | | 241,638 | | |
Mineral Nutrition
|
| | | | 56,699 | | | | | | 58,853 | | | | | | 108,291 | | | | | | 113,322 | | |
Performance Products
|
| | | | 11,226 | | | | | | 11,416 | | | | | | 23,120 | | | | | | 23,933 | | |
Total segments
|
| | | $ | 191,598 | | | | | $ | 191,773 | | | | | $ | 379,585 | | | | | $ | 378,893 | | |
Depreciation and amortization | | | | | | ||||||||||||||||||||
Animal Health
|
| | | $ | 5,011 | | | | | $ | 3,829 | | | | | $ | 9,909 | | | | | $ | 7,705 | | |
Mineral Nutrition
|
| | | | 542 | | | | | | 612 | | | | | | 1,084 | | | | | | 1,220 | | |
Performance Products
|
| | | | 235 | | | | | | 194 | | | | | | 453 | | | | | | 388 | | |
Total segments
|
| | | $ | 5,788 | | | | | $ | 4,635 | | | | | $ | 11,446 | | | | | $ | 9,313 | | |
Adjusted EBITDA | | | | | | ||||||||||||||||||||
Animal Health
|
| | | $ | 34,609 | | | | | $ | 32,351 | | | | | $ | 67,228 | | | | | $ | 63,827 | | |
Mineral Nutrition
|
| | | | 4,741 | | | | | | 4,189 | | | | | | 8,729 | | | | | | 7,349 | | |
Performance Products
|
| | | | 260 | | | | | | (8) | | | | | | 1,002 | | | | | | 78 | | |
Total segments
|
| | | $ | 39,610 | | | | | $ | 36,532 | | | | | $ | 76,959 | | | | | $ | 71,254 | | |
Reconciliation of income before income taxes
to Adjusted EBITDA |
| | | | | ||||||||||||||||||||
Income before income taxes
|
| | | $ | 19,304 | | | | | $ | 16,097 | | | | | $ | 36,876 | | | | | $ | 39,589 | | |
Interest expense, net
|
| | | | 3,872 | | | | | | 3,967 | | | | | | 7,779 | | | | | | 7,786 | | |
Depreciation and amortization – Total segments
|
| | | | 5,788 | | | | | | 4,635 | | | | | | 11,446 | | | | | | 9,313 | | |
Depreciation and amortization – Corporate
|
| | | | 656 | | | | | | 758 | | | | | | 1,316 | | | | | | 1,509 | | |
Corporate costs
|
| | | | 8,416 | | | | | | 8,098 | | | | | | 15,940 | | | | | | 15,113 | | |
Acquisition-related accrued
compensation |
| | | | 420 | | | | | | 420 | | | | | | 840 | | | | | | 840 | | |
Acquisition-related transaction costs
|
| | | | — | | | | | | — | | | | | | 1,274 | | | | | | — | | |
Pension settlement cost
|
| | | | 1,702 | | | | | | — | | | | | | 1,702 | | | | | | — | | |
Foreign currency (gains) losses, net
|
| | | | (548) | | | | | | 2,557 | | | | | | (214) | | | | | | (2,896) | | |
Adjusted EBITDA – Total segments
|
| | | $ | 39,610 | | | | | $ | 36,532 | | | | | $ | 76,959 | | | | | $ | 71,254 | | |
|
As of
|
| |
December 31,
2016 |
| |
June 30,
2016 |
| ||||||
Identifiable assets | | | | ||||||||||
Animal Health
|
| | | $ | 436,174 | | | | | $ | 444,751 | | |
Mineral Nutrition
|
| | | | 56,615 | | | | | | 57,939 | | |
Performance Products
|
| | | | 21,246 | | | | | | 21,557 | | |
Total segments
|
| | | | 514,035 | | | | | | 524,247 | | |
Corporate
|
| | | | 78,250 | | | | | | 83,588 | | |
Total
|
| | | $ | 592,285 | | | | | $ | 607,835 | | |
|
| | |
Three Months
|
| |
Six Months
|
| ||||||||||||||||||||||||||||||||||||||||||
For the Periods Ended December 31
|
| |
2016
|
| |
2015
|
| |
Change
|
| |
2016
|
| |
2015
|
| |
Change
|
| ||||||||||||||||||||||||||||||
| | |
(in thousands, except per share amounts and percentages)
|
| |||||||||||||||||||||||||||||||||||||||||||||
Net sales
|
| | | $ | 191,598 | | | | | $ | 191,773 | | | | | $ | (175) | | | | |
|
(0)%
|
| | | | $ | 379,585 | | | | | $ | 378,893 | | | | | $ | 692 | | | | |
|
0%
|
| |
Gross profit
|
| | | | 63,498 | | | | | | 61,462 | | | | | | 2,036 | | | | |
|
3%
|
| | | | | 124,497 | | | | | | 120,669 | | | | | | 3,828 | | | | |
|
3%
|
| |
Selling, general and administrative
expenses |
| | | | 40,870 | | | | | | 38,841 | | | | | | 2,029 | | | | |
|
5%
|
| | | | | 80,056 | | | | | | 76,190 | | | | | | 3,866 | | | | |
|
5%
|
| |
Operating income
|
| | | | 22,628 | | | | | | 22,621 | | | | | | 7 | | | | |
|
0%
|
| | | | | 44,441 | | | | | | 44,479 | | | | | | (38) | | | | |
|
(0)%
|
| |
Interest expense, net
|
| | | | 3,872 | | | | | | 3,967 | | | | | | (95) | | | | |
|
(2)%
|
| | | | | 7,779 | | | | | | 7,786 | | | | | | (7) | | | | |
|
(0)%
|
| |
Foreign currency (gains) losses,
net |
| | | | (548) | | | | | | 2,557 | | | | | | (3,105) | | | | |
|
*
|
| | | | | (214) | | | | | | (2,896) | | | | | | 2,682 | | | | |
|
*
|
| |
Income before income taxes
|
| | | | 19,304 | | | | | | 16,097 | | | | | | 3,207 | | | | |
|
20%
|
| | | | | 36,876 | | | | | | 39,589 | | | | | | (2,713) | | | | |
|
(7)%
|
| |
Provision (benefit) for income taxes
|
| | | | 5,887 | | | | | | (14,081) | | | | | | 19,968 | | | | |
|
*
|
| | | | | 11,282 | | | | | | (9,342) | | | | | | 20,624 | | | | |
|
*
|
| |
Net income
|
| | | $ | 13,417 | | | | | $ | 30,178 | | | | | $ | (16,761) | | | | |
|
(56)%
|
| | | | $ | 25,594 | | | | | $ | 48,931 | | | | | $ | (23,337) | | | | |
|
(48)%
|
| |
Net income per share | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||
basic
|
| | | $ | 0.34 | | | | | $ | 0.77 | | | | | $ | (0.43) | | | | | | | | | | | $ | 0.65 | | | | | $ | 1.25 | | | | | $ | (0.60) | | | | |||||
diluted
|
| | | $ | 0.34 | | | | | $ | 0.75 | | | | | $ | (0.41) | | | | | | | | | | | $ | 0.64 | | | | | $ | 1.22 | | | | | $ | (0.58) | | | | |||||
Weighted average number of shares outstanding
|
| | | | | | | | | ||||||||||||||||||||||||||||||||||||||||
basic
|
| | | | 39,411 | | | | | | 39,163 | | | | | | | | | | | | | | | | | | 39,409 | | | | | | 39,128 | | | | | | | | | | | | | | |
diluted
|
| | | | 40,002 | | | | | | 39,978 | | | | | | | | | | | | | | | | | | 39,954 | | | | | | 39,995 | | | | | | | | | | | | | | |
Ratio to net sales | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||
Gross profit
|
| | | | 33.1% | | | | | | 32.0% | | | | | | | | | | | | | | | | | | 32.8% | | | | | | 31.8% | | | | | | | | | | | | | | |
Selling, general and administrative expenses
|
| | | | 21.3% | | | | | | 20.3% | | | | | | | | | | | | | | | | | | 21.1% | | | | | | 20.1% | | | | | | | | | | | | | | |
Operating income
|
| | | | 11.8% | | | | | | 11.8% | | | | | | | | | | | | | | | | | | 11.7% | | | | | | 11.7% | | | | | | | | | | | | | | |
Income before income taxes
|
| | | | 10.1% | | | | | | 8.4% | | | | | | | | | | | | | | | | | | 9.7% | | | | | | 10.4% | | | | | | | | | | | | | | |
Net income
|
| | | | 7.0% | | | | | | 15.7% | | | | | | | | | | | | | | | | | | 6.7% | | | | | | 12.9% | | | | | | | | | | | | | | |
Effective tax rate
|
| | | | 30.5% | | | | | | (87.5)% | | | | | | | | | | | | | | | | | | 30.6% | | | | | | (23.6)% | | | | | | | | | | | | | | |
| | |
Three Months
|
| |
Six Months
|
| ||||||||||||||||||||||||||||||||||||||||||
For the Periods Ended December 31
|
| |
2016
|
| |
2015
|
| |
Change
|
| |
2016
|
| |
2015
|
| |
Change
|
| ||||||||||||||||||||||||||||||
| | |
(in thousands, except percentages)
|
| |||||||||||||||||||||||||||||||||||||||||||||
Net sales | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||
MFAs and other
|
| | | $ | 77,475 | | | | | $ | 85,569 | | | | | $ | (8,094) | | | | |
|
(9)%
|
| | | | $ | 160,894 | | | | | $ | 171,090 | | | | | $ | (10,196) | | | | |
|
(6)%
|
| |
Nutritional specialties
|
| | | | 29,247 | | | | | | 24,222 | | | | | | 5,025 | | | | |
|
21%
|
| | | | | 55,551 | | | | | | 46,592 | | | | | | 8,959 | | | | |
|
19%
|
| |
Vaccines
|
| | | | 16,951 | | | | | | 11,713 | | | | | | 5,238 | | | | |
|
45%
|
| | | | | 31,729 | | | | | | 23,956 | | | | | | 7,773 | | | | |
|
32%
|
| |
Animal Health
|
| | | | 123,673 | | | | | | 121,504 | | | | | | 2,169 | | | | |
|
2%
|
| | | | | 248,174 | | | | | | 241,638 | | | | | | 6,536 | | | | |
|
3%
|
| |
Mineral Nutrition
|
| | | | 56,699 | | | | | | 58,853 | | | | | | (2,154) | | | | |
|
(4)%
|
| | | | | 108,291 | | | | | | 113,322 | | | | | | (5,031) | | | | |
|
(4)%
|
| |
Performance Products
|
| | | | 11,226 | | | | | | 11,416 | | | | | | (190) | | | | |
|
(2)%
|
| | | | | 23,120 | | | | | | 23,933 | | | | | | (813) | | | | |
|
(3)%
|
| |
Total
|
| | | $ | 191,598 | | | | | $ | 191,773 | | | | | $ | (175) | | | | |
|
(0)%
|
| | | | $ | 379,585 | | | | | $ | 378,893 | | | | | $ | 692 | | | | |
|
0%
|
| |
Adjusted EBITDA | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||
Animal Health
|
| | | $ | 34,609 | | | | | $ | 32,351 | | | | | $ | 2,258 | | | | |
|
7%
|
| | | | $ | 67,228 | | | | | $ | 63,827 | | | | | $ | 3,401 | | | | |
|
5%
|
| |
Mineral Nutrition
|
| | | | 4,741 | | | | | | 4,189 | | | | | | 552 | | | | |
|
13%
|
| | | | | 8,729 | | | | | | 7,349 | | | | | | 1,380 | | | | |
|
19%
|
| |
Performance Products
|
| | | | 260 | | | | | | (8) | | | | | | 268 | | | | |
|
*
|
| | | | | 1,002 | | | | | | 78 | | | | | | 924 | | | | |
|
1185%
|
| |
Corporate
|
| | | | (8,416) | | | | | | (8,098) | | | | | | (318) | | | | |
|
*
|
| | | | | (15,940) | | | | | | (15,113) | | | | | | (827) | | | | |
|
*
|
| |
Total
|
| | | $ | 31,194 | | | | | $ | 28,434 | | | | | $ | 2,760 | | | | |
|
10%
|
| | | | $ | 61,019 | | | | | $ | 56,141 | | | | | $ | 4,878 | | | | |
|
9%
|
| |
Adjusted EBITDA ratio to segment
net sales |
| | | | | | | | | ||||||||||||||||||||||||||||||||||||||||
Animal Health
|
| | | | 28.0% | | | | | | 26.6% | | | | | | | | | | | | | | | | | | 27.1% | | | | | | 26.4% | | | | | | | | | | | | | | |
Mineral Nutrition
|
| | | | 8.4% | | | | | | 7.1% | | | | | | | | | | | | | | | | | | 8.1% | | | | | | 6.5% | | | | | | | | | | | | | | |
Performance Products
|
| | | | 2.3% | | | | | | (0.1)% | | | | | | | | | | | | | | | | | | 4.3% | | | | | | 0.3% | | | | | | | | | | | | | | |
Corporate(1)
|
| | | | (4.4)% | | | | | | (4.2)% | | | | | | | | | | | | | | | | | | (4.2)% | | | | | | (4.0)% | | | | | | | | | | | | | | |
Total(1)
|
| | | | 16.3% | | | | | | 14.8% | | | | | | | | | | | | | | | | | | 16.1% | | | | | | 14.8% | | | | | | | | | | | | | | |
| | |
Three Months
|
| |
Six Months
|
| ||||||||||||||||||||||||||||||||||||||||||
For the Periods Ended December 31
|
| |
2016
|
| |
2015
|
| |
Change
|
| |
2016
|
| |
2015
|
| |
Change
|
| ||||||||||||||||||||||||||||||
| | |
(in thousands, except percentages)
|
| |||||||||||||||||||||||||||||||||||||||||||||
Net income
|
| | | $ | 13,417 | | | | | $ | 30,178 | | | | | $ | (16,761) | | | | |
|
(56)%
|
| | | | $ | 25,594 | | | | | $ | 48,931 | | | | | $ | (23,337) | | | | |
|
(48)%
|
| |
Interest expense, net
|
| | | | 3,872 | | | | | | 3,967 | | | | | | (95) | | | | |
|
(2)%
|
| | | | | 7,779 | | | | | | 7,786 | | | | | | (7) | | | | |
|
(0)%
|
| |
Provision (benefit) for income taxes
|
| | | | 5,887 | | | | | | (14,081) | | | | | | 19,968 | | | | |
|
*
|
| | | | | 11,282 | | | | | | (9,342) | | | | | | 20,624 | | | | |
|
*
|
| |
Depreciation and amortization
|
| | | | 6,444 | | | | | | 5,393 | | | | | | 1,051 | | | | |
|
19%
|
| | | | | 12,762 | | | | | | 10,822 | | | | | | 1,940 | | | | |
|
18%
|
| |
EBITDA
|
| | | | 29,620 | | | | | | 25,457 | | | | | | 4,163 | | | | |
|
16%
|
| | | | | 57,417 | | | | | | 58,197 | | | | | | (780) | | | | |
|
(1)%
|
| |
Acquisition-related accrued compensation
|
| | | | 420 | | | | | | 420 | | | | | | — | | | | |
|
0%
|
| | | | | 840 | | | | | | 840 | | | | | | — | | | | |
|
0%
|
| |
Acquisition-related transaction costs
|
| | | | — | | | | | | — | | | | | | — | | | | |
|
*
|
| | | | | 1,274 | | | | | | — | | | | | | 1,274 | | | | |
|
*
|
| |
Pension settlement cost
|
| | | | 1,702 | | | | | | — | | | | | | 1,702 | | | | |
|
*
|
| | | | | 1,702 | | | | | | — | | | | | | 1,702 | | | | |
|
*
|
| |
Foreign currency (gains) losses,
net |
| | | | (548) | | | | | | 2,557 | | | | | | (3,105) | | | | |
|
*
|
| | | | | (214) | | | | | | (2,896) | | | | | | 2,682 | | | | |
|
*
|
| |
Adjusted EBITDA
|
| | | $ | 31,194 | | | | | $ | 28,434 | | | | | $ | 2,760 | | | | |
|
10%
|
| | | | $ | 61,019 | | | | | $ | 56,141 | | | | | $ | 4,878 | | | | |
|
9%
|
| |
|
| | |
Six Months
|
| |||||||||||||||
For the Periods Ended December 31
|
| |
2016
|
| |
2015
|
| |
Change
|
| |||||||||
| | |
(in thousands)
|
| |||||||||||||||
Cash provided by/(used in): | | | | | |||||||||||||||
Operating activities
|
| | | $ | 47,733 | | | | | $ | 5,604 | | | | | $ | 42,129 | | |
Investing activities
|
| | | | (10,765) | | | | | | (17,390) | | | | | | 6,625 | | |
Financing activities
|
| | | | (31,048) | | | | | | 8,785 | | | | | | (39,833) | | |
Effect of exchange-rate changes on cash and cash equivalents
|
| | | | (305) | | | | | | (843) | | | | | | 538 | | |
Net increase/(decrease) in cash and cash equivalents
|
| | | $ | 5,615 | | | | | $ | (3,844) | | | | | $ | 9,459 | | |
|
| | |
Six Months
|
| |||||||||||||||
For the Periods Ended December 31
|
| |
2016
|
| |
2015
|
| |
Change
|
| |||||||||
| | |
(in thousands)
|
| |||||||||||||||
EBITDA
|
| | | $ | 57,417 | | | | | $ | 58,197 | | | | | $ | (780) | | |
Acquisition-related accrued compensation
|
| | | | 840 | | | | | | 840 | | | | | | — | | |
Acquisition-related transaction costs
|
| | | | 1,274 | | | | | | — | | | | | | 1,274 | | |
Pension settlement cost
|
| | | | 1,702 | | | | | | — | | | | | | 1,702 | | |
Foreign currency (gains) losses, net
|
| | | | (214) | | | | | | (2,896) | | | | | | 2,682 | | |
Interest paid
|
| | | | (7,651) | | | | | | (6,687) | | | | | | (964) | | |
Income taxes paid
|
| | | | (6,305) | | | | | | (7,514) | | | | | | 1,209 | | |
Changes in operating assets and liabilities and other items
|
| | | | 670 | | | | | | (36,336) | | | | | | 37,006 | | |
Net cash provided (used) by operating activities
|
| | | $ | 47,733 | | | | | $ | 5,604 | | | | | $ | 42,129 | | |
|
As of
|
| |
December 31,
2016 |
| |
June 30,
2016 |
| |
Change
|
| |||||||||
| | |
(in thousands, except ratios)
|
| |||||||||||||||
Cash and cash equivalents
|
| | | $ | 39,220 | | | | | $ | 33,605 | | | | | $ | 5,615 | | |
Working capital
|
| | | | 199,361 | | | | | | 203,356 | | | | | | (3,995) | | |
Ratio of current assets to current liabilities
|
| | | | 2.99:1 | | | | | | 2.92:1 | | | |
| | | | Phibro Animal Health Corporation | | |||
| February 6, 2017 | | | By: | | |
/s/ Jack C. Bendheim
Jack C. Bendheim
President and Chief Executive Officer |
|
| February 6, 2017 | | | By: | | |
/s/ Richard G. Johnson
Richard G. Johnson
Chief Financial Officer |
|
| Dated: February 6, 2017 | | |
/s/ Jack C. Bendheim
Jack C. Bendheim
Chairman, President and Chief Executive Officer |
|
| Dated: February 6, 2017 | | |
/s/ Richard G. Johnson
Richard G. Johnson
Chief Financial Officer |
|
| Dated: February 6, 2017 | | |
/s/ Jack C. Bendheim
Jack C. Bendheim
Chairman, President and Chief Executive Officer |
|
| Dated: February 6, 2017 | | |
/s/ Richard G. Johnson
Richard G. Johnson
Chief Financial Officer |
|
Document and Entity Information - shares |
6 Months Ended | |
---|---|---|
Dec. 31, 2016 |
Jan. 30, 2017 |
|
Entity Registrant Name | PHIBRO ANIMAL HEALTH CORP | |
Entity Central Index Key | 0001069899 | |
Trading Symbol | pahc | |
Current Fiscal Year End Date | --06-30 | |
Entity Filer Category | Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Dec. 31, 2016 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2017 | |
Document Fiscal Period Focus | Q2 | |
Class A common stock | ||
Entity Common Stock, Shares Outstanding | 18,529,489 | |
Class B common stock | ||
Entity Common Stock, Shares Outstanding | 20,887,811 |
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Income Statement [Abstract] | ||||
Net sales | $ 191,598 | $ 191,773 | $ 379,585 | $ 378,893 |
Cost of goods sold | 128,100 | 130,311 | 255,088 | 258,224 |
Gross profit | 63,498 | 61,462 | 124,497 | 120,669 |
Selling, general and administrative expenses | 40,870 | 38,841 | 80,056 | 76,190 |
Operating income | 22,628 | 22,621 | 44,441 | 44,479 |
Interest expense, net | 3,872 | 3,967 | 7,779 | 7,786 |
Foreign currency (gains) losses, net | (548) | 2,557 | (214) | (2,896) |
Income before income taxes | 19,304 | 16,097 | 36,876 | 39,589 |
Provision (benefit) for income taxes | 5,887 | (14,081) | 11,282 | (9,342) |
Net income | $ 13,417 | $ 30,178 | $ 25,594 | $ 48,931 |
Net income per share | ||||
basic (in dollars per share) | $ 0.34 | $ 0.77 | $ 0.65 | $ 1.25 |
diluted (in dollars per share) | $ 0.34 | $ 0.75 | $ 0.64 | $ 1.22 |
Weighted average common shares outstanding | ||||
basic (in shares) | 39,411 | 39,163 | 39,409 | 39,128 |
diluted (in shares) | 40,002 | 39,978 | 39,954 | 39,995 |
Dividends per share (in dollars per share) | $ 0.10 | $ 0.10 | $ 0.20 | $ 0.20 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 13,417 | $ 30,178 | $ 25,594 | $ 48,931 |
Change in fair value of derivative instruments | 270 | 1,909 | 304 | (2,994) |
Foreign currency translation adjustment | (2,296) | 2,014 | (3,189) | (19,715) |
Unrecognized net pension gains (losses) | 4,671 | 508 | 11,840 | 892 |
(Provision) benefit for income taxes | (1,894) | (1,371) | (4,644) | 2,315 |
Other comprehensive income (loss) | 751 | 3,060 | 4,311 | (19,502) |
Comprehensive income (loss) | $ 14,168 | $ 33,238 | $ 29,905 | $ 29,429 |
CONSOLIDATED BALANCE SHEETS (Parentheticals) - $ / shares |
Dec. 31, 2016 |
Jun. 30, 2016 |
---|---|---|
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 16,000,000 | 16,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Class A common stock | ||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 300,000,000 | 300,000,000 |
Common stock, shares issued | 18,529,095 | 18,519,757 |
Common stock, shares outstanding | 18,529,095 | 18,519,757 |
Class B common stock | ||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 30,000,000 | 30,000,000 |
Common stock, shares issued | 20,887,811 | 20,887,811 |
Common stock, shares outstanding | 20,887,811 | 20,887,811 |
Description of Business |
6 Months Ended |
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Dec. 31, 2016 | |
Description Of Business [Abstract] | |
Description of Business | 1. Description of Business
Phibro Animal Health Corporation (“Phibro” or “PAHC”) and its subsidiaries (collectively, the “Company”) is a diversified global developer, manufacturer and marketer of a broad range of animal health and mineral nutrition products for food animals including poultry, swine, cattle, dairy and aquaculture. The Company is also a manufacturer and marketer of performance products for use in the personal care, automotive, industrial chemical and chemical catalyst industries. Unless otherwise indicated or the context requires otherwise, references in this report to “we,” “our,” “us,” and similar expressions refer to Phibro and its subsidiaries.
The unaudited consolidated financial information for the three and six months ended December 31, 2016 and 2015, is presented on the same basis as the financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2016 (the “Annual Report”), filed with the Securities and Exchange Commission on August 29, 2016 (File no. 001-36410). In the opinion of management, these financial statements include all adjustments necessary for a fair statement of financial position, results of operations and cash flows for the interim periods, and the adjustments are of a normal and recurring nature. The financial results for any interim period are not necessarily indicative of the results for the full year. The consolidated balance sheet information as of June 30, 2016, was derived from the audited consolidated financial statements, which include the accounts of Phibro and its consolidated subsidiaries, but does not include all disclosures required by accounting principles generally accepted in the United States of America (“GAAP”). The unaudited consolidated financial information should be read in conjunction with the consolidated financial statements and notes thereto included in the Annual Report.
The consolidated financial statements include the accounts of Phibro and its consolidated subsidiaries. The decision whether or not to consolidate an entity requires consideration of majority voting interests, as well as effective control over the entity. Intercompany balances and transactions have been eliminated in the consolidated financial statements.
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Summary of Significant Accounting Policies and New Accounting Standards |
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Summary of Significant Accounting Policies and New Accounting Standards | 2. Summary of Significant Accounting Policies and New Accounting Standards
Our significant accounting policies are described in the notes to the consolidated financial statements included in our Annual Report. As of December 31, 2016, there have been no material changes to any of the significant accounting policies contained therein, except for the application of Accounting Standards Update (“ASU”) 2015-03, Interest—Imputation of Interest (Subtopic 835-30), as of July 1, 2016. Prior periods have been adjusted to reflect the retrospective application of this guidance. For further discussion, see “—New Accounting Standards.”
Revisions of Previously Issued Financial Statements
During the three months ended June 30, 2016, the Company determined that amortization expense related to product-related intangible assets should be recorded in cost of goods sold rather than in selling, general and administrative expense within the consolidated statement of operations. The Company has revised its prior period financial statements, to correct the classification of amortization expense to increase cost of goods sold and reduce gross profit and selling, general and administrative expenses by $954 and $1,907 for the three and six months ended December 31, 2015, respectively. These revisions had no impact on the Company’s previously reported net income (loss) or cash flows. The Company evaluated the impact of the revisions on prior periods, assessing materiality quantitatively and qualitatively, and concluded the errors were not material to any previously issued financial statements.
Net Income per Share and Weighted Average Shares
Basic net income per share is calculated by dividing net income by the weighted average number of common shares outstanding during the reporting period.
Diluted net income per share is calculated by dividing net income by the weighted average number of common shares outstanding during the reporting period after giving effect to potential dilutive common shares equivalents resulting from the assumed exercise of stock options. For the three and six months ended December 31, 2016 and 2015, all common share equivalents were included in the calculation of diluted net income per share.
Dividends
We declared and paid quarterly cash dividends of $0.10 per share, totaling $3,941 and $7,882, during the three and six months ended December 31, 2016, respectively, to holders of our Class A common stock and Class B common stock.
New Accounting Standards
Financial Accounting Standards Board (“FASB”) ASU 2017-04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment, supersedes the current guidance by establishing a one-step goodwill impairment test. This new guidance requires an entity to compare the fair value of a reporting unit to its carrying amount, and recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. This ASU is effective for annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Early application is permitted for goodwill impairment tests performed after January 1, 2017. We will apply this guidance when performing our next goodwill impairment test. We do not expect adoption of this guidance to have a material effect on our consolidated financial statements. ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, provides specific guidance for the classification of certain transactions within the statement of cash flows. The issues addressed by this guidance include, but are not limited to, debt prepayments or debt extinguishment costs, contingent consideration payments made after a business combination and proceeds from the settlement of insurance claims. This ASU is effective for annual reporting periods beginning after December 15, 2017. Early application is permitted, as long as all provisions under the guidance are applied simultaneously. The provisions of this guidance are to be applied using a retrospective transition approach. We do not expect adoption of this guidance to have a material effect on our consolidated financial statements.
ASU 2016-02, Leases (Topic 842), supersedes the current lease accounting guidance and requires an entity to recognize assets and liabilities for both financing and operating leases on the balance sheet and requires additional qualitative and quantitative disclosures regarding leasing arrangements. This ASU is effective for annual reporting periods beginning after December 15, 2018. We are evaluating the impact of adoption of this guidance on our consolidated financial statements.
ASU 2015-11, Inventory (Topic 330), requires entities to measure inventory at the lower of cost and net realizable value (“NRV”). NRV is defined as “the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation.” The guidance is effective for annual periods beginning after December 15, 2016, and interim periods within those years. We do not expect adoption of this guidance to have a material effect on our consolidated financial statements.
ASU 2015-05, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40) provides guidance regarding the treatment of cloud computing arrangements and if an arrangement includes a software license. We adopted this guidance during the three months ended September 30, 2016, and it had no material impact on our consolidated financial statements.
ASU 2015-03, Interest—Imputation of Interest (Subtopic 835-30), requires debt issuance costs to be presented as a reduction of the related liability. These costs were previously included in other assets. Debt issuance costs associated with line-of-credit arrangements may continue to be recognized in other assets. We adopted this guidance during the three months ended September 30, 2016, and applied the guidance retrospectively. Debt issuance costs of $2,538 as of June 30, 2016, have been presented as a reduction in long-term debt on our consolidated balance sheets.
ASU 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (Subtopic 205-40), requires management to assess an entity’s ability to continue as a going concern within one year after the issuance date of the financial statements, and to provide related footnote disclosures in certain circumstances. Management will need to consider relevant conditions that are known and reasonably knowable at the issuance date. Substantial doubt exists if it is probable that the entity will be unable to meet its obligations within one year after the issuance date. Under the new standard, the definition of substantial doubt incorporates a likelihood threshold of “probable” similar to the current use of that term in GAAP for loss contingencies. ASU 2014-15 will be effective for annual periods ending after December 15, 2016, and for annual periods and interim periods thereafter. We do not expect adoption of this guidance to have a material effect on our consolidated financial statements.
ASU 2014-09, Revenue from Contracts with Customers (Topic 606), establishes principles for the recognition of revenue from contracts with customers. The underlying principle is to identify the performance obligations of a contract, allocate the revenue to each performance obligation and then to recognize revenue when the company satisfies a specific performance obligation of the contract. ASU 2015-14, Deferral of the Effective Date, amended ASU 2014-09, resulting in a one-year deferral of the effective date. ASU 2016-08, Principal versus Agent Considerations; ASU 2016-10, Identifying Performance Obligations and Licensing; and ASU 2016-12, Narrow-Scope Improvements and Practical Expedients also amended ASU 2014-09. The amendments are effective concurrent with the effective date for ASU 2014-09 for annual periods beginning after December 15, 2017, and interim periods within those years. We are evaluating the impact of adoption of this guidance on our consolidated financial statements.
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Statements of Operations-Additional Information |
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Statements of Operations-Additional Information | 3. Statements of Operations—Additional Information
The provision (benefit) for income taxes for the three and six months ended December 31, 2015, included a benefit of $18,787 due to the reversal of the valuation allowance we previously had recorded against domestic deferred tax assets. Based on continued domestic profitability, we concluded that it was more likely than not that the value of domestic deferred tax assets would be realized, and it was no longer necessary to maintain a valuation allowance.
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Balance Sheets-Additional Information |
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Balance Sheets-Additional Information | 4. Balance Sheets—Additional Information
Goodwill balances did not change during the six months ended December 31, 2016.
We evaluate our investments in equity method investees for impairment if circumstances indicate that the fair value of the investment may be impaired. The assets underlying a $4,094 equity investment are currently idled; we have concluded the investment is not currently impaired, based on expected future operating cash flows and/or disposal value.
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Debt |
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Debt | 5. Debt
Revolving Credit Facility and Term B Loan
We have a revolving credit facility (the “Revolver”), where we can borrow up to $200,000, subject to the terms of the agreement, and a term B loan (the “Term B Loan,” and together with the Revolver, the “Credit Facilities”). The Revolver, as amended, has applicable margins equal to 2.50%, 2.75% or 3.00%, in the case of LIBOR loans and 1.50%, 1.75% or 2.00%, in the case of base rate loans; the applicable margins are based on the First Lien Net Leverage Ratio. The Term B Loan has applicable margins equal to 3.00% with regards to LIBOR loans and 2.00% regarding base rate loans. The LIBOR rate on the Term B Loan is subject to a floor of 1.00%.
The Revolver requires, among other things, the maintenance of a maximum consolidated first lien net debt to consolidated EBITDA leverage ratio, calculated on a trailing four quarter basis, and contains an acceleration clause should an event of default (as defined in the agreement governing the Credit Facilities) occur. As of December 31, 2016, we were in compliance with the covenants of the Credit Facilities.
As of December 31, 2016, we had $48,500 in borrowings under the Revolver and had outstanding letters of credit of $14,518 leaving $136,982 available for borrowings and letters of credit under the Revolver. We obtain letters of credit in connection with certain regulatory and insurance obligations and other contractual obligations. The tenors of these letters of credit are all one year or less.
The weighted-average interest rates for the Revolver and Term B Loan were 3.30% and 4.00%, respectively, for the six months ended December 31, 2016.
Long-Term Debt
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Related Party Transactions |
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Dec. 31, 2016 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 6. Related Party Transactions
Certain relatives of Jack C. Bendheim provided services to us as employees or consultants and received aggregate compensation and benefits of $445 and $1,047 during the three and six months ended December 31, 2016, respectively, and $428 and $1,127 during the three and six months ended December 31, 2015, respectively. Mr. Bendheim has sole authority to vote shares of our stock owned by BFI Co., LLC, an investment vehicle of the Bendheim family.
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Employee Benefit Plans |
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Employee Benefit Plans | 7. Employee Benefit Plans
The Company maintains a noncontributory defined benefit pension plan for all domestic nonunion employees employed on or prior to December 31, 2013, who meet certain requirements of age, length of service and hours worked per year. Plan benefits are based upon years of service and average compensation, as defined.
In July 2016, we amended our domestic noncontributory defined benefit pension plan to eliminate credit for future service and compensation increases, effective as of September 30, 2016. The amendment resulted in a curtailment of the pension plan. During the three months ended September 30, 2016, we recorded a pension curtailment gain of $6,822 in other comprehensive income and an offsetting reduction in the liability for pension benefits included in other liabilities. We also modified the 401(k) retirement savings plan, effective October 1, 2016, to include, for all domestic employees, a non-elective Company contribution of 3% of compensation and an additional discretionary contribution of up to 4% of compensation, depending on the employee’s age and years of service.
Separately, we offered a lump sum settlement option to certain pension plan participants. During the three months ended December 31, 2016, we recognized a partial settlement of the pension plan with respect to the lump sum settlement, which resulted in a charge to the consolidated statement of operations of $1,702, which we recorded as a component of selling, general and administrative expenses.
Net periodic pension expense was:
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Commitments and Contingencies |
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Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 8. Commitments and Contingencies
Environmental
Our operations and properties are subject to extensive federal, state, local and foreign laws and regulations, including those governing pollution; protection of the environment; the use, management, and release of hazardous materials, substances and wastes; air emissions; greenhouse gas emissions; water use, supply and discharges; the investigation and remediation of contamination; the manufacture, distribution, and sale of regulated materials, including pesticides; the importing, exporting and transportation of products; and the health and safety of our employees (collectively, “Environmental Laws”). As such, the nature of our current and former operations exposes us to the risk of claims with respect to such matters, including fines, penalties, and remediation obligations that may be imposed by regulatory authorities. Under certain circumstances, we might be required to curtail operations until a particular problem is remedied. Known costs and expenses under Environmental Laws incidental to ongoing operations, including the cost of litigation proceedings relating to environmental matters, are included within operating results. Potential costs and expenses may also be incurred in connection with the repair or upgrade of facilities to meet existing or new requirements under Environmental Laws or to investigate or remediate potential or actual contamination and from time to time we establish reserves for such contemplated investigation and remediation costs. In many instances, the ultimate costs under Environmental Laws and the time period during which such costs are likely to be incurred are difficult to predict.
While we believe that our operations are currently in material compliance with Environmental Laws, we have, from time to time, received notices of violation from governmental authorities, and have been involved in civil or criminal action for such violations. Additionally, at various sites, our subsidiaries are engaged in continuing investigation, remediation and/or monitoring efforts to address contamination associated with historic operations of the sites. We devote considerable resources to complying with Environmental Laws and managing environmental liabilities. We have developed programs to identify requirements under, and maintain compliance with, Environmental Laws; however, we cannot predict with certainty the effect of increased and more stringent regulation on our operations, future capital expenditure requirements, or the cost of compliance.
The nature of our current and former operations exposes us to the risk of claims with respect to environmental matters and we cannot assure we will not incur material costs and liabilities in connection with such claims. Based upon our experience to date, we believe that the future cost of compliance with existing Environmental Laws, and liabilities for known environmental claims pursuant to such Environmental Laws, will not have a material adverse effect on our financial position, results of operations, cash flows or liquidity.
The United States Environmental Protection Agency (the “EPA”) is investigating and planning for the remediation of offsite contaminated groundwater that has migrated from the Omega Chemical Corporation Superfund Site (“Omega Chemical Site”), which is upgradient of a facility in Santa Fe Springs, California, operated by our subsidiary Phibro-Tech, Inc. (“Phibro-Tech”). The EPA has named Phibro-Tech and certain other subsidiaries of PAHC as potentially responsible parties (“PRPs”) due to groundwater contamination from Phibro-Tech’s Santa Fe Springs facility that has allegedly commingled with contaminated groundwater from the Omega Chemical Site. In September 2012, the EPA notified approximately 140 PRPs, including Phibro-Tech and the other subsidiaries, that they have been identified as potentially responsible for remedial action for the groundwater plume affected by the Omega Chemical Site and for EPA oversight and response costs. Phibro-Tech contends that groundwater contamination at its site is due to historical operations that pre-date Phibro-Tech and/or contaminated groundwater that has migrated from upgradient properties. In addition, a successor to a prior owner of the Phibro-Tech site has asserted that PAHC and Phibro-Tech are obligated to provide indemnification for its potential liability and defense costs relating to the groundwater plume affected by the Omega Chemical Site. Phibro-Tech has vigorously contested this position and has asserted that the successor to the prior owner is required to indemnify Phibro-Tech for its potential liability and defense costs. Furthermore, a nearby property owner has filed a complaint in the Superior Court of the State of California against many of the PRPs allegedly associated with the groundwater plume affected by the Omega Chemical Site (including Phibro-Tech) for alleged contamination of groundwater underneath its property, and a group of companies that sent chemicals to the Omega Chemical Site for processing and recycling has filed a complaint under CERCLA, RCRA and the common law public nuisance doctrine in the United States District Court for the Central District of California against many of the PRPs allegedly associated with the groundwater plume affected by the Omega Chemical Site (including Phibro-Tech) for contribution toward past and future costs associated with the investigation and remediation of the groundwater plume affected by the Omega Chemical Site. Due to the ongoing nature of the EPA’s investigation and Phibro-Tech’s dispute with the prior owner’s successor, at this time we cannot predict with any degree of certainty what, if any, liability Phibro-Tech or the other subsidiaries may ultimately have for investigation, remediation and the EPA oversight and response costs associated with the affected groundwater plume.
Based upon information available, to the extent such costs can be estimated with reasonable certainty, we estimated the cost for further investigation and remediation of identified soil and groundwater problems at operating sites, closed sites and third-party sites, and closure costs for closed sites, to be $7,211 and $7,024 at December 31, 2016, and June 30, 2016, respectively, which is included in current and long-term liabilities on the consolidated balance sheets. However, future events, such as new information, changes in existing Environmental Laws or their interpretation, and more vigorous enforcement policies of regulatory agencies, may give rise to additional expenditures or liabilities that could be material. For all purposes of the discussion under this caption and elsewhere in this report, it should be noted that we take and have taken the position that neither PAHC nor any of our subsidiaries is liable for environmental or other claims made against one or more of our other subsidiaries or for which any of such other subsidiaries may ultimately be responsible.
Claims and Litigation
PAHC and its subsidiaries are party to a number of claims and lawsuits arising out of the normal course of business including product liability, payment disputes and governmental regulation. Certain of these actions seek damages in various amounts. In many cases, such claims are covered by insurance. We believe that none of the claims or pending lawsuits, either individually or in the aggregate, will have a material adverse effect on our financial position, results of operations, cash flows or liquidity.
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Derivatives |
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Derivatives | 9. Derivatives
We monitor our exposure to foreign currency exchange rates and use derivatives (currency option contracts) to manage certain of these risks. These derivatives generally have an expiration/maturity of two years or less and are intended to hedge cash flows related to the purchase of inventory. We designate derivatives as a hedge of a forecasted transaction or of the variability of the cash flows to be received or paid in the future related to a recognized asset or liability (cash flow hedge). We record the portion of the changes in the value of the derivative, related to a hedged asset or liability (the effective portion), in accumulated other comprehensive income (loss). As the hedged item is sold, we recognize the gain or loss recorded in accumulated other comprehensive income (loss) to the consolidated statements of operations on the same line where the hedged item is charged when released/sold. We immediately recognize in the consolidated statements of operations in the same line as the hedged item, the portion of the changes in fair value of derivatives used as cash flow hedges that is not offset by changes in the expected cash flows related to a recognized asset or liability (the ineffective portion).
We routinely assess whether the derivatives used to hedge transactions are effective. If we determine that a derivative ceases to be an effective hedge, we discontinue hedge accounting in the period of the assessment for that derivative, and immediately recognize any unrealized gains or losses related to the fair value of that derivative in the consolidated statements of operations.
We record derivatives at fair value in the consolidated balance sheets. For additional details regarding fair value, see “—Fair Value Measurements.”
The following table details the Company’s outstanding derivatives that are designated and effective as cash flow hedges as of December 31, 2016:
The fair values at December 31, 2016, are unrealized and will fluctuate based on future exchange rates until the derivative contracts mature. Other comprehensive income (loss) for the three and six months ended December 31, 2016, included $270 and $304, respectively, of net unrecognized gains related to these contracts. Accumulated other comprehensive income (loss) at December 31, 2016, included $2,959 of net unrecognized gains on derivative instruments; we estimate that $362 of those gains will be recognized in earnings within the next twelve months. At June 30, 2016, realized losses of $1,528 related to matured contracts were recorded as a component of inventory. We recognized $393 and $1,528 of these losses in cost of goods sold during the three and six months ended December 31, 2016, respectively. We recognize gains (losses) related to these derivative instruments as a component of cost of goods sold at the time the hedged item is sold.
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Fair Value Measurements |
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Fair Value Measurements | 10. Fair Value Measurements
Fair value is defined as the exit price that would be received to sell an asset or paid to transfer a liability. Fair value is a market-based measurement that should be determined using assumptions that market participants would use in pricing an asset or liability. Financial assets and liabilities are measured at fair value using the three-level valuation hierarchy for disclosure of fair value measurements. The determination of the applicable level within the hierarchy of a particular asset or liability depends on the inputs used in the valuation as of the measurement date, notably the extent to which the inputs are market-based (observable) or internally derived (unobservable). Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from independent sources. Unobservable inputs are inputs based on a company’s own assumptions about market participant assumptions developed based on the best information available in the circumstances. The hierarchy is broken down into three levels based on the reliability of inputs as follows:
Level 1—Quoted prices in active markets for identical assets or liabilities.
Level 2—Significant observable inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly through corroboration with observable market data.
Level 3—Unobservable inputs for which there is little or no market data available, and that are significant to the overall fair value measurement, are employed that require the reporting entity to develop its own assumptions.
In assessing the fair value of financial instruments at September 30, 2016, and June 30, 2016, we used a variety of methods and assumptions that were based on estimates of market conditions and risks existing at the time.
Current Assets and Liabilities
We consider the carrying amounts of current assets and current liabilities to be representative of their fair value because of the current nature of these items.
Letters of Credit
We obtain letters of credit in connection with certain regulatory and insurance obligations, inventory purchases and other contractual obligations. The carrying values of these letters of credit are considered to be representative of their fair values because of the nature of the instruments. The tenors of these letters of credit are all one year or less.
Long Term Debt
We record the Term B Loan and the Revolver at book value in our consolidated financial statements. We believe the carrying value of the Term B Loan is approximately equal to the fair value, which is based on quoted broker prices that are Level 2 inputs. We believe the carrying value of the Revolver is approximately equal to the fair value due to the variable nature of the instrument.
Deferred Consideration on Acquisitions
We estimated the fair value of the deferred contingent consideration on acquisitions using the income approach, based on the Company’s current sales forecast related to the acquired business.
Derivatives
We determine the fair value of derivative instruments based upon pricing models using observable market inputs for these types of financial instruments, such as spot and forward currency translation rates.
The table below provides a summary of the changes in the fair value of Level 3 liabilities:
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Business Segments |
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Business Segments | 11. Business Segments
The Animal Health segment manufactures and markets a broad range of products for food animals, including poultry, swine, cattle, dairy and aquaculture. The business includes net sales of medicated feed additives and other related products, nutritional specialty products and vaccines. The Mineral Nutrition segment manufactures and markets a broad range of trace mineral products for food animals. The Performance Products segment manufactures and markets a variety of products for use in the personal care, automotive, industrial chemical and chemical catalyst industries.
We evaluate performance and allocate resources based on the Animal Health, Mineral Nutrition and Performance Products segments. Certain of our costs and assets are not directly attributable to these segments and such costs are referred to as Corporate. We do not allocate such items to the principal segments because they are not used to evaluate their operating results or financial position.
We evaluate performance of our segments based on Adjusted EBITDA. We define Adjusted EBITDA as income before income taxes plus (a) interest expense, net, (b) depreciation and amortization, (c) (income) loss from, and disposal of, discontinued operations, (d) other expense or less other income, as separately reported on our consolidated statements of operations, including foreign currency gains and losses and loss on extinguishment of debt, and (e) certain items that we consider to be unusual, non-operational or non-recurring.
The accounting policies of our segments are the same as those described in the summary of significant accounting policies included herein.
The Animal Health segment includes all goodwill of the Company. The Animal Health segment includes advances to and investment in an equity method investee of $4,094 and $4,076 as of December 31, 2016, and June 30, 2016, respectively. The Performance Products segment includes an investment in an equity method investee of $452 and $504 as of December 31, 2016, and June 30, 2016, respectively. Corporate assets include cash and cash equivalents, debt issuance costs related to the Revolver, income tax related assets and certain other assets.
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Summary of Significant Accounting Policies and New Accounting Standards (Policies) |
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Revisions of previously issued financial statements | Revisions of Previously Issued Financial Statements
During the three months ended June 30, 2016, the Company determined that amortization expense related to product-related intangible assets should be recorded in cost of goods sold rather than in selling, general and administrative expense within the consolidated statement of operations. The Company has revised its prior period financial statements, to correct the classification of amortization expense to increase cost of goods sold and reduce gross profit and selling, general and administrative expenses by $954 and $1,907 for the three and six months ended December 31, 2015, respectively. These revisions had no impact on the Company’s previously reported net income (loss) or cash flows. The Company evaluated the impact of the revisions on prior periods, assessing materiality quantitatively and qualitatively, and concluded the errors were not material to any previously issued financial statements.
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Net Income per Share and Weighted Average Shares | Net Income per Share and Weighted Average Shares
Basic net income per share is calculated by dividing net income by the weighted average number of common shares outstanding during the reporting period.
Diluted net income per share is calculated by dividing net income by the weighted average number of common shares outstanding during the reporting period after giving effect to potential dilutive common shares equivalents resulting from the assumed exercise of stock options. For the three and six months ended December 31, 2016 and 2015, all common share equivalents were included in the calculation of diluted net income per share.
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Dividends | Dividends
We declared and paid quarterly cash dividends of $0.10 per share, totaling $3,941 and $7,882, during the three and six months ended December 31, 2016, respectively, to holders of our Class A common stock and Class B common stock.
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New Accounting Standards | New Accounting Standards
Financial Accounting Standards Board (“FASB”) ASU 2017-04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment, supersedes the current guidance by establishing a one-step goodwill impairment test. This new guidance requires an entity to compare the fair value of a reporting unit to its carrying amount, and recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. This ASU is effective for annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Early application is permitted for goodwill impairment tests performed after January 1, 2017. We will apply this guidance when performing our next goodwill impairment test. We do not expect adoption of this guidance to have a material effect on our consolidated financial statements. ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, provides specific guidance for the classification of certain transactions within the statement of cash flows. The issues addressed by this guidance include, but are not limited to, debt prepayments or debt extinguishment costs, contingent consideration payments made after a business combination and proceeds from the settlement of insurance claims. This ASU is effective for annual reporting periods beginning after December 15, 2017. Early application is permitted, as long as all provisions under the guidance are applied simultaneously. The provisions of this guidance are to be applied using a retrospective transition approach. We do not expect adoption of this guidance to have a material effect on our consolidated financial statements.
ASU 2016-02, Leases (Topic 842), supersedes the current lease accounting guidance and requires an entity to recognize assets and liabilities for both financing and operating leases on the balance sheet and requires additional qualitative and quantitative disclosures regarding leasing arrangements. This ASU is effective for annual reporting periods beginning after December 15, 2018. We are evaluating the impact of adoption of this guidance on our consolidated financial statements.
ASU 2015-11, Inventory (Topic 330), requires entities to measure inventory at the lower of cost and net realizable value (“NRV”). NRV is defined as “the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation.” The guidance is effective for annual periods beginning after December 15, 2016, and interim periods within those years. We do not expect adoption of this guidance to have a material effect on our consolidated financial statements.
ASU 2015-05, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40) provides guidance regarding the treatment of cloud computing arrangements and if an arrangement includes a software license. We adopted this guidance during the three months ended September 30, 2016, and it had no material impact on our consolidated financial statements.
ASU 2015-03, Interest—Imputation of Interest (Subtopic 835-30), requires debt issuance costs to be presented as a reduction of the related liability. These costs were previously included in other assets. Debt issuance costs associated with line-of-credit arrangements may continue to be recognized in other assets. We adopted this guidance during the three months ended September 30, 2016, and applied the guidance retrospectively. Debt issuance costs of $2,538 as of June 30, 2016, have been presented as a reduction in long-term debt on our consolidated balance sheets.
ASU 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (Subtopic 205-40), requires management to assess an entity’s ability to continue as a going concern within one year after the issuance date of the financial statements, and to provide related footnote disclosures in certain circumstances. Management will need to consider relevant conditions that are known and reasonably knowable at the issuance date. Substantial doubt exists if it is probable that the entity will be unable to meet its obligations within one year after the issuance date. Under the new standard, the definition of substantial doubt incorporates a likelihood threshold of “probable” similar to the current use of that term in GAAP for loss contingencies. ASU 2014-15 will be effective for annual periods ending after December 15, 2016, and for annual periods and interim periods thereafter. We do not expect adoption of this guidance to have a material effect on our consolidated financial statements.
ASU 2014-09, Revenue from Contracts with Customers (Topic 606), establishes principles for the recognition of revenue from contracts with customers. The underlying principle is to identify the performance obligations of a contract, allocate the revenue to each performance obligation and then to recognize revenue when the company satisfies a specific performance obligation of the contract. ASU 2015-14, Deferral of the Effective Date, amended ASU 2014-09, resulting in a one-year deferral of the effective date. ASU 2016-08, Principal versus Agent Considerations; ASU 2016-10, Identifying Performance Obligations and Licensing; and ASU 2016-12, Narrow-Scope Improvements and Practical Expedients also amended ASU 2014-09. The amendments are effective concurrent with the effective date for ASU 2014-09 for annual periods beginning after December 15, 2017, and interim periods within those years. We are evaluating the impact of adoption of this guidance on our consolidated financial statements.
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Summary of Significant Accounting Policies and New Accounting Standards (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Net Income per Share and Weighted Average Shares |
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Statements of Operations-Additional Information (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Income Statement Elements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of additional information of statements of operations |
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Balance Sheets-Additional Information (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance Sheets Additional Information [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of additional information of balance sheets |
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Debt (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of long term debt |
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Employee Benefit Plans (Tables) |
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Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Compensation and Retirement Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of net periodic pension expense |
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Derivatives (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of significant outstanding derivatives employed to manage market risk and designated as cash flow hedges |
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Fair Value Measurements (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of fair value derivatives, assets and liabilities |
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Schedule of changes in the fair value of Level 3 assets |
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Business Segments (Tables) |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of information regarding reportable segments |
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Summary of Significant Accounting Policies and New Accounting Standards (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
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Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2016 |
Dec. 31, 2015 |
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Accounting Policies [Abstract] | ||||
Net income | $ 13,417 | $ 30,178 | $ 25,594 | $ 48,931 |
Weighted average number of shares - basic (in shares) | 39,411 | 39,163 | 39,409 | 39,128 |
Dilutive effect of stock options | 591 | 815 | 545 | 867 |
Weighted average number of shares - diluted (in shares) | 40,002 | 39,978 | 39,954 | 39,995 |
Net income per share | ||||
basic (in dollars per share) | $ 0.34 | $ 0.77 | $ 0.65 | $ 1.25 |
diluted (in dollars per share) | $ 0.34 | $ 0.75 | $ 0.64 | $ 1.22 |
Summary of Significant Accounting Policies and New Accounting Standards (Details Textuals) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 6 Months Ended | |||
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Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2016 |
Dec. 31, 2015 |
Jun. 30, 2016 |
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Accounting Policies [Abstract] | |||||
Cash dividends per share amount (in dollars per share) | $ 0.10 | $ 0.10 | |||
Cash dividends | $ 3,941 | $ 7,882 | |||
Debt issuance costs | $ 2,538 | ||||
Revised amortization expense intangible assets | $ 954 | $ 1,907 |
Statements of Operations-Additional Information (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
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Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Interest expense, net | ||||
Amortization of debt issuance costs and debt discount | $ 255 | $ 242 | $ 508 | $ 484 |
Acquisition-related accrued interest | 462 | 344 | 855 | 689 |
Other | 47 | 169 | 128 | 255 |
Interest expense | 4,361 | 4,024 | 8,948 | 7,892 |
Interest (income) | (489) | (57) | (1,169) | (106) |
Interest expense, net | 3,872 | 3,967 | 7,779 | 7,786 |
Depreciation and amortization | ||||
Depreciation of property, plant and equipment | 4,952 | 4,075 | 9,683 | 8,186 |
Amortization of intangible assets | 1,434 | 1,260 | 2,962 | 2,519 |
Amortization of other assets | 58 | 58 | 117 | 117 |
Depreciation and amortization | 6,444 | 5,393 | 12,762 | 10,822 |
Term B Loans | ||||
Interest expense, net | ||||
Acquisition-related accrued interest | 2,866 | 2,927 | 5,771 | 5,862 |
Revolving credit facility | ||||
Interest expense, net | ||||
Acquisition-related accrued interest | $ 731 | $ 342 | $ 1,686 | $ 602 |
Statements of Operations-Additional Information (Detail Textuals) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended |
---|---|---|
Dec. 31, 2015 |
Dec. 31, 2015 |
|
Statements Of Operations Additional Information [Abstract] | ||
Deferred income taxes valuation allowance | $ (18,787) | $ (18,787) |
Balance Sheets-Additional Information (Details) - USD ($) $ in Thousands |
Dec. 31, 2016 |
Jun. 30, 2016 |
---|---|---|
Inventories | ||
Raw materials | $ 56,299 | $ 51,369 |
Work-in-process | 9,455 | 8,074 |
Finished goods | 93,065 | 108,248 |
Inventory, net | $ 158,819 | $ 167,691 |
Balance Sheets-Additional Information (Details 1) - USD ($) $ in Thousands |
Dec. 31, 2016 |
Jun. 30, 2016 |
---|---|---|
Accrued expenses and other current liabilities | ||
Employee related | $ 21,011 | $ 21,712 |
Commissions and rebates | 4,572 | 3,722 |
Insurance related | 1,617 | 1,780 |
Professional fees | 3,930 | 3,573 |
Income and other taxes | 3,007 | 1,910 |
Deferred consideration on acquisitions | 1,250 | |
Other | 11,465 | 11,756 |
Accrued expenses and other current liabilities, total | 45,602 | 45,703 |
Accumulated other comprehensive income (loss) | ||
Derivative instruments | 2,959 | 2,655 |
Foreign currency translation adjustment | (45,093) | (41,904) |
Unrecognized net pension gains (losses) | (19,137) | (30,977) |
(Provision) benefit for income taxes on derivative instruments | (1,664) | (1,548) |
(Provision) benefit for incomes taxes on long-term intercompany investments | 8,166 | 8,166 |
(Provision) benefit for income taxes on pension gains (losses) | (2,705) | 1,823 |
Accumulated other comprehensive income (loss) | $ (57,474) | $ (61,785) |
Balance Sheets-Additional Information (Detail Textuals) $ in Thousands |
Dec. 31, 2016
USD ($)
|
---|---|
Balance Sheets Additional Information [Abstract] | |
Equity method investments | $ 4,094 |
Debt - Summary of long-term debt (Details) - USD ($) $ in Thousands |
Dec. 31, 2016 |
Jun. 30, 2016 |
---|---|---|
Debt Instrument [Line Items] | ||
Long-term debt including current maturities | $ 282,751 | $ 284,207 |
Unamortized debt issuance costs and debt discount | (2,718) | (3,035) |
Less: current maturities | (2,901) | (2,907) |
Long-term debt | 277,132 | 278,265 |
Term B loan due April 2021 | ||
Debt Instrument [Line Items] | ||
Long-term debt including current maturities | 282,750 | 284,200 |
Capitalized lease obligations | ||
Debt Instrument [Line Items] | ||
Long-term debt including current maturities | $ 1 | $ 7 |
Related Party Transactions (Detail Textuals) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Relatives of Jack C. Bendheim | Compensation and benefit for services provided | ||||
Related Party Transaction [Line Items] | ||||
Aggregate compensation and benefits | $ 445 | $ 428 | $ 1,047 | $ 1,127 |
Employee Benefit Plans - Net periodic pension expense (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Compensation and Retirement Disclosure [Abstract] | ||||
Service cost - benefits earned during the period | $ 284 | $ 751 | $ 845 | $ 1,470 |
Interest cost on benefit obligation | 505 | 757 | 1,048 | 1,446 |
Expected return on plan assets | (843) | (846) | (1,706) | (1,588) |
Amortization of net actuarial (gain) loss and prior service costs | 105 | 508 | 452 | 892 |
Settlement cost | 1,702 | 1,702 | ||
Net periodic pension expense | $ 1,753 | $ 1,170 | $ 2,341 | $ 2,220 |
Employee Benefit Plans (Detail Textuals) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended |
---|---|---|
Dec. 31, 2016 |
Dec. 31, 2016 |
|
Defined Benefit Plan Disclosure [Line Items] | ||
Settlement cost | $ 1,702 | $ 1,702 |
401(k) retirement savings plan | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Contribution percentage | 3.00% | |
Maximum additional discretionary contribution percentage | 4.00% | |
Domestic noncontributory defined benefit pension plan | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Pension curtailment gain | $ 6,822 |
Commitments and Contingencies (Detail Textuals) $ in Thousands |
1 Months Ended | 6 Months Ended | 12 Months Ended |
---|---|---|---|
Sep. 30, 2012
PRPs
|
Dec. 31, 2016
USD ($)
|
Jun. 30, 2016
USD ($)
|
|
Commitments And Contingencies [Line Items] | |||
Number of potentially responsible parties | PRPs | 140 | ||
Current and long-term liabilities | |||
Commitments And Contingencies [Line Items] | |||
Accrual for environmental loss contingencies payments | $ | $ 7,211 | $ 7,024 |
Derivatives (Details) - Options - Cash flow hedges BRL in Thousands, $ in Thousands |
Dec. 31, 2016
USD ($)
|
Dec. 31, 2016
BRL
|
Jun. 30, 2016
USD ($)
|
---|---|---|---|
Brazilian Real calls | |||
Derivative [Line Items] | |||
Notional amount | BRL | BRL 78,000 | ||
Fair value | $ | $ 2,982 | $ 3,027 | |
Brazilian Real puts | |||
Derivative [Line Items] | |||
Notional amount | BRL | BRL 78,000 | ||
Fair value | $ | $ (23) | $ (372) |
Derivatives (Detail Textuals) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2016 |
Jun. 30, 2016 |
|
Derivative [Line Items] | |||
Unrecognized losses on derivative instruments recorded in earnings within the next twelve months | $ 362 | $ 362 | |
Options | Cash flow hedges | |||
Derivative [Line Items] | |||
Other comprehensive income (loss), unrealized gains (losses) on derivatives | 270 | 304 | |
Unrecognized losses on derivative instruments recorded in earnings within the next twelve months | $ 1,528 | ||
Options | Cash flow hedges | Cost of goods sold | |||
Derivative [Line Items] | |||
Realized losses on hedging derivatives recognized in cost of goods sold | $ 393 | 1,528 | |
Options | Cash flow hedges | Other comprehensive income (loss) | |||
Derivative [Line Items] | |||
Unrecognized gains (losses) on derivative instruments | $ 2,959 |
Fair Value Measurements (Details) - Fair values - USD ($) $ in Thousands |
Dec. 31, 2016 |
Jun. 30, 2016 |
---|---|---|
Level 1 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivatives asset | ||
Deferred consideration on acquisitions | ||
Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivatives asset | 2,959 | 2,655 |
Deferred consideration on acquisitions | ||
Level 3 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivatives asset | ||
Deferred consideration on acquisitions | $ (7,530) | $ (6,745) |
Fair Value Measurements (Details 1) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Business Combination Contingent Consideration Liability [Roll Forward] | ||||
Acquisition-related accrued interest | $ (462) | $ (344) | $ (855) | $ (689) |
Fair values | Level 3 | ||||
Business Combination Contingent Consideration Liability [Roll Forward] | ||||
Balance, June 30, 2016 | (6,745) | |||
Acquisition-related accrued interest | (855) | |||
Payment | 70 | |||
Balance, December 31, 2016 | $ (7,530) | $ (7,530) |
Business Segments (Detail Textuals) - USD ($) $ in Thousands |
Dec. 31, 2016 |
Jun. 30, 2016 |
---|---|---|
Segment Reporting Information [Line Items] | ||
Equity method investments | $ 4,094 | |
Animal Health | ||
Segment Reporting Information [Line Items] | ||
Equity method investments | 4,094 | $ 4,076 |
Performance Products | ||
Segment Reporting Information [Line Items] | ||
Equity method investments | $ 452 | $ 504 |
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