Q4 2020 Phibro Animal Health Corp Earnings Call
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As time, all participants are in listen only mode. After the speakers presentation. There will be a question answer session to ask a question. During this session you'll need to press star one on your telephone if you require any further assistance. Please press star zero I would know, but isn't the cone over to your speaker today, Richard Johnson CFO. Please go ahead.
Well, thank you operator, and good morning, everyone and welcome to the Fibrogen Animal Health earnings call for our fourth quarter and fiscal year ended June 2020.
On the call today are trying to spend time, our chief Executive Officer, and myself, Richard Johnson, Chief Financial Officer will provide an overview of our quarterly and full year results and then well open the lines for your questions.
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So thank you operator, and my apologies to everyone who experienced that.
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Let me start from the beginning good morning, welcome to the fiber animal health earnings call for our fourth quarter fiscal year ended June 2020.
On the call today, or Jack Bendheim, our Chief Executive Officer, and myself, Richard Johnson, Chief Financial Officer.
We will provide an overview of our quarterly and full year results and then we'll open the line for your questions.
Before we began we remind you that the earnings press release and financial tables can be found on the Investor section of our web site at P.A.H.C. Dot com.
We're also providing a simultaneous webcast of this morning's call, which can be accessed on the website as well.
Today's presentation slides and a replay and transcripts of the call will also be available on the website later today.
Our remarks today will include forward looking statements and actual results could differ materially.
From those projections for list and description of certain factors that could cause results to differ I refer you to the forward looking statements section on our earnings press release.
Our remarks today will also include references to certain financial measures, which were not prepared in accordance with generally accepted accounting principles are U.S. GAAP I refer you to the non-GAAP financial information section in our earnings press release for a discussion of these measures.
Reconciliations of these non-GAAP financial measures to the most.
Directly comparable us GAAP measures are included in the financial tables that accompany the earnings press release.
Before we get into the numbers.
Let me remind everyone that we present our results on a GAAP basis and on an adjusted basis. Our adjusted results exclude acquisition related items unusual non operational or other nonrecurring items certain other income and expense items and the income tax effects related to any of those pre tax adjusts.
Cements as well as any unusual or nonrecurring income tax items and with that here is Jack bendheim with some introductory comments fact.
Thanks, Dick and thank you everyone, who is joining us on this call today.
The June quarter was certainly a difficult one for fibrosis as it was for those who are involved in the supply chain to feed the world with healthy proteins.
It did however, highlight our continuing evolution to a more balance animal health company.
Despite incredible challenges, we and our customers space across the board, we were able to grow and nutritional specialties the vaccine product lines.
We are happy to turn the page and while we enter our new fiscal year without the typical visibility we would normally have I do anticipate the macro trend around nutritional specialties, the maxine products growing at a faster clip than around my phase and other products will continue.
We have a number of growth initiatives relating to our nutritional specialties vaccine product offerings plan for the current yet.
Already in the first two mines, we have seen successes executing against these plans and I'm confident that I'm momentum will continue to grow throughout the year as we access new customers and entering new geographies.
Over the coming fiscal year, we expect to our markets a gradually rebound to pre covert level.
And importantly, we also anticipate gaining greater in person access to our customers access the will allow us to resume the work on the multiple new initiatives that were paused by the pandemic.
While we are adding a number of new initiatives and top of the ones. We are carrying forward from last year, we're cognizant of the need to our arrived for our industry to get back on its fee. So we're exercising the straight in a number of projects we have green light.
Finally, I want to reiterate our commitment to stand behind our products and sign.
As we stated in our recent press release regarding carve it out.
We are deeply disappointed that the FDA not followed in its own procedures and afforded fiber to the hearing the loyalty requires and that the FDA previously agreed to.
We will continue to work on highlighting the safety and efficacy of this product and we will take whatever steps are necessary to make sure. The product is judged on the science with that I will turn it back that they can look forward to taking your questions at the conclusion of his presentation.
Yeah.
Thank you Jack.
So let's start by reviewing the results for our June quarter, our consolidated sales for the quarter were $186 million that was a decline of $18 million or 9% versus the prior year.
During the quarter, we experienced the short term decline a demand for our products due to the pandemic.
The animal production industry faced unprecedented demand disruptions production impacts price declines plus substantial currency volatility and a number of international markets.
We experienced sales declines in all three segments of our business, primarily due to lower volumes in animal health, we saw increased sales and nutritional specialty it vaccine products, but those were partially offset by the lower sales up.
My phase and other products will get into further details regarding segment results later in the presentation.
Our reported net income was $5.6 million for the quarter that as a decline of 3.2 million or 36% compared to the prior year.
Income before income taxes improved primarily due to restructuring costs in the same quarter last year.
However, an unusually high provision for income taxes caused the net income decline.
The increase in income tax was driven by the effects of the complex additional federal income tax known as guilty as an acronym.
Changes in certain non uncertain tax positions and the absence of tax benefits on the operating results of some of our newer international operations.
As a result diluted earnings per share was 14 cents for the current quarter that was a decrease.
Eight cents per share from the prior year.
Now, let's look at adjusted results on page six.
I'll discuss net sales in more detail when we look at the individual segments level.
In total adjusted gross profit was $62.1 million for the quarter that was a decline of four and a half million dollars or 7% compared to the prior year, we did see favorable product mix at the animal health mineral nutrition segments during the quarter and that contributed to an improvement overall.
All in the in the overall gross profit percentage.
In the animal health segment increased sales and gross profit from nutritional specialty and vaccine product sales, partially offset lower volumes in Emma phase and other products.
Mineral nutrition gross profit decreased as lower average selling prices more than offset.
Operable raw material costs and the gross profit decline in performance products was driven by lower overall volume.
Total adjusted SG inhaler operating expenses decreased in the quarter, a they were $44.2 million that was a decrease of $1.7 million or 4% year on year.
Merrily due to lower variable compensation and employee related costs in the animal health segment.
With a partial offset from the effects of the Osprey acquisition. This is the last.
Quarter, where we will see the any meaningful impact of the overlap of the acquisition, which we did in August beginning of office a year ago.
The adjusted provision for income taxes was unusually high on the quarter for the same reasons that I described earlier and as a result, adjusted diluted EPS was 17 cents per share.
Compared with 30 cents per share.
Last year.
Looking more closely at the animal health business.
Net sales of $122 million declined $9.6 million or 7% compared to the same period the prior year.
Net sales of nutritional specialty products were 31.1 billion, an increase of 2.6 million or 9%. The osprey acquisition accounted for the majority of that sales growth.
Net sales of vaccines were $18.6 million, an increase of $1.5 million or 8% driven by higher international demand.
And net sales of Emma phase and other products were $72.6 million, a decline of $13.7 million or 16%.
We saw lower demand in various international regions, including China, and South America.
The volume decline in China was due to the effects of African swine fever, plus a phased regulatory change that took effect in.
The middle of our fiscal year in January of 2020.
Fair enough for the animal Health segment, adjusted EBITDA was $29.6 million that was a decline of 1 million six or 5%. The decrease was attributable to the overall sales and related gross profit.
Decreases partially offset by favorable SGN a costs.
And now looking at our other segments.
The mineral nutrition.
Had net sales of almost $50 million that was a about a $6 million decrease or 11%.
Due to primarily due to lower average selling prices.
Coupled with.
Slightly lower overall unit volumes, the lower average selling prices are generally correlated with the movement of underlying raw material costs.
Gross profit declined $300000.
In the quarter as the decline in average selling prices was more than the.
Change in favorable raw material costs.
As a result, adjusted EBITDA was 3.5 million.
Down about $300000 compared with the same quarter last year.
The performance products business reported net sales of $13.6 million.
A also a decline a decline of $2.3 million or 14%.
We saw volume declines in copper based in our industrial chemical products, which contributed to lower profitability and overall a.
400000 dollar decrease and adjusted EBITDA at corporate expenses were comparable to the buyer prior year.
Now turning briefly to our full year performance. This is since this is the end of our fiscal year, we not only.
Talking about the quarter, but talking about the full year. So for the full year, we were we have $800 million of sales.
That was a.
About a 3% year over year decline and.
Within the animal health segment sales declined about $5 million of that total declined 5 million was.
Approximately 5 million was.
Within the animal health segment and that was a 1% decline.
We did report double digit sales growth for our nutritional specialty vaccine product lines. However, Emma phase and other products declined nutritional net sales of nutritional specialties grew 14% for the full year due to volume growth and poultry and dairy products and the recent at Osprey acquisition accounted for.
Or approximately two thirds of the overall sales growth for that product group.
Vaccines grew 10% for the full year due to strong international demand for poultry vaccines and increased market penetration. In addition in the prior year, we had a domestic distribution arrangements for the first four months of the year and so on a on a comparable basis our net.
Sales of vaccines would have increased 14% without that.
Unfavorable overlap.
And finally net sales of and the phase and other products declined 8% due to a $31 million sales decline in China, driven by the effects of African swine fever and regulatory changes.
The other segments of our business also saw declines in sales mineral nutrition segment declined $19 million that decline or that I was an 8% decline.
Decline was primarily driven by lower average selling prices.
And performance products net sales.
Decreased $3 million or about 5% due to.
Reduced volumes of copper based products with a partial offset from.
More business into personal care ingredients area.
Adjusted gross profit overall was $263.5 million that declined 6.4 million or 2% due to the sales and and related gross profit declines.
Animal health adjusted gross profit declined primarily due to the sales decline in AML phase and other products with some.
Partial offset from the sales growth and the other product groups mineral nutrition adjusted gross profit also declined as we saw average selling prices being.
Dropping slightly faster than the overall favorable raw material costs and the favorable effect of increased unit volumes and then performance products gross profit declined due to overall lower volumes.
Total company for the full year.
Adjusted SGN, a increased $11.5 million or 7% as we continue to.
Invest in product development and strategic initiatives. In addition, the Osprey acquisition and increased public company cost related to strengthening and testing of internal control over financial reporting also contributed to the overall expense increase.
As a result, adjusted EBITDA for the year was $102 million and compared to $118 billion, a year ago and that translated to adjusted earnings per share of a dollar in eight cents, 29% decline.
Paired to $1.53 cents a year ago.
And now briefly looking at capitalization at the end of June we had a gross leverage ratio of 3.8 times that was 388 million of total debt.
Compared to 102 million of adjusted EBITDA. We also had 91 million of cash and short term investments.
On the balance sheet at that same point in time.
For the June quarter, we use $6 million of cash before financing activities.
Primarily for our ongoing.
Capital expenditure program.
For the full year, we use $30 million of cash.
Excluding change in short term investments and that included using 55 million for the acquisition of us spray. So.
Putting aside the acquisition of us spray, we generated $25 million cash prior to the.
Prior to any financing activities for the year and we have.
Hey, Dan declared to be paid the routine quarterly dividend of 12 cents a share.
And now talking.
A little bit about our guidance, we are forecasting only short term expectations at this point, given the ongoing difficult conditions and the industry and and as a result are more limited visibility.
Then we would normally.
We would normally have the animal production industry continues to face demand disruption production impacts.
We do believe we're optimistic we believe the current situation will normalize as we progress through our fiscal year and the industry gradually will return to typical operating levels are our guidance for our September quarter is to have net sales of approximately $190 million and thats up.
At the same level as the September quarter, a year ago.
That will translate to net income of five $6 million.
On a GAAP basis, an increase of $2.5 million to $3.5 million compared to last year.
And GAAP EPS of 13 cents to 15 cents per share.
Again, and an increase of seven cents to nine cents per share adjusted EBITDA we are.
Guiding to approximately $20 million for the quarter again approximately equal to.
The prior to the prior quarter and that will translate to adjusted diluted EPS of 18 cents to 20 cents per share a plus or minus change up one cents from the same quarter last year.
And with that that's the end of my prepared comments, we will open it up for questions from.
From the color.
Operator please.
Ladies and gentlemen to ask a question. Please press Star then the number one on your telephone keypad, well pause for just a moment to punish many roster.
Your first question comes from.
I want to proceed with Barclays. Your line is open.
Hi, good morning, everyone and thanks for taking the questions just a couple from me.
Given the guidance I kind of one to draw your attention to last week's reports out looking for from the you as the weight United States. It expects full production off a downturn point 2 billion pounds are around 7% growth washes last year. So could you. Please help me understand that outlook with regard to.
Q3 guidance.
Secondly, with regard to China.
Can you give an update on what is the current impact offensive and isn't that repopulation, our re hurting in China speaking up based enough to start offsetting.
The back defensive thank you.
Thanks for the questions.
So first of all.
As we all know, but we will have granted the high production the us.
Greatly disrupted.
By the at the processing factories.
Hi level of.
Affection Kogut infection fourth many of these facilities to close down would operate at different rates.
So what the has pushed back.
This past year.
There were lot of pigs went on process.
There were lots of.
Combination calling combination of.
Sort of.
Product may move to different markets I think things.
The with the projecting things will get back on to.
On a normal production, even though some of these plans are still operating we understand.
Hi, so having problems of getting people to come into operating with fairly high level the coven.
So I think its adjusted projection, but I think the feeling generally is that things will return to to the path passion not being last year the passing.
You bet gone back so, we'll see some level or increase in hog production this coming year.
As far as China goes.
There is no asap vaccine yet in China.
So the way the Chinese produces a combating.
I am sorry.
His two very cautiously do a better job and by security.
And sort of moving into some of these larger farms, where they can do that so yes. There is an increase in in high population as a beat produces go on and to populate price had been very high says ray profitable, but many many of the smaller farms.
They're based it's still very scared to put pigs on the ground and run the risk of these great losses. So.
There is some increase.
And.
I don't think they will ever be able to get back to the 400 million pigs ahead on the ground in China until there is a vaccine.
Thank you.
Your next question comes from David a question Burke with Guggenheim Securities. Your line is open.
Hi, Thank you for taking my question. So I know you made some investments in the low end. This last fiscal year in terms of new product development. So can you talk about the contribution for new products in 2021, quantitative or qualitative Lee and then how do you feel your position and they kind of a new present.
Decision livestock farming.
Paradigm I mean are any of those investments in new products around technology solutions.
A couple of follow up.
So let me, let me sum starting back with.
One of our investments.
In sort of new technology.
As a more precision.
Vaccinated.
Believed the vaccine to vaccinate.
Six.
But.
So we made in advance we can make investment in that product I think we've developed it.
The problems of of the pandemic is the ability to get on farms the ability to bring on sales made in our technical teams.
To demonstrate this product has been severely curtailed.
So while we made an investment.
Prior year and continuing doing this past year.
The ramp up his heart to heart to Jack.
Because people on these farms of being very very cautious bringing people from the outside in so.
I would say sort of an answer to sort of both those those questions. So we have made investments, but to but to bring new products to market.
We'll be continuing lead to be slow until there is a vaccine for workover.
And then got booking more comfortable being outside is in.
Okay got it that the that makes sense. So maybe we should think about contribution to products being asker akovaz vaccine or at least a little bit more open on.
So to the sales channel.
And then I do admit you're one of the only companies that I cover or you are the only company that I cover that has mineral nutrition as.
As a big contribution to business can you remind us kind of.
The fluctuation in prices. It why is there not a way to be kind of opportunistic given the fact that youre.
You are probably a little bit more sophisticated of a buyer that and then the people that are the copies and farmers that you're selling too.
Well, so I'll take rate on bridge and of that not for ourselves, but for our customers.
Hi, there is no one.
Smarter in pricing in raw materials and a farm.
There was no one's in the first exchanges in terms of commodity exchanges happened in Chicago and happens you know with grains and happened with them.
Apparently its and stuff like that so the bomb it gets a full from gets a really only in the morning.
And does this calculation.
He then goes out to feed the animals nikam backing trades on the exchanges. So everyone's very smart everyone knows every raw material costs, everyone knows everything so if prices change anywhere in the World believe me our customers know.
And there right they're asking for.
The conference in the prices. So that's why it's quite apparent what happens.
You know prices go up prices go down by many other factors in the world and.
So that gets translated to the pricing to the customers. This past.
Quarter last quarter with with Covance created so many imbalances that what we saw very often is that the stock of farm is not being able to move them animal in the normal course of events right. You know you're growing your pay eggs and also on the thought assets I can take any.
Backed up so now what do you do and what.
We saw happening and across the industry is that the farm is that okay.
Race sort of the product has been sold I sold on exchange long time ago, I'm not going to invest more money.
Literally if I'm not going to get more money.
So they look to cut back wherever they can come back up back in animals, which is what they cut back in.
In what they can feed see they can get away with cheaper feed et cetera, et cetera, and that equity for the industry. This craziness, we saw in the quarter plus foreign exchange rates and so on before but.
I think we're more back to fix that will more back to normal we're very optimistic.
On trends ABS industry, even right now that a vaccine people I'm managing much better and again, we'll see a vaccine hopefully sometime early in the middle of next year, and I think things completely come back to normal.
That was a really good answer thank you I'll leave it there.
Your next question comes from Michael Raskin with Bank of America. Your line is open.
Hey, Jack Thanks for taking the questions help you're doing well.
One of the have a couple quick ones, one or hopefully quick one I wanted to start on on the guidance for one Q on the outlook and I realize that Theres, obviously, a lot of as you had discussed a lot of uncertainty in the market in terms of what's going on both as a result of the the underlying market, but especially few way or cobot on top of it.
Looking at sequentially fiscal 14 versus the fiscal once you guide it's still implies.
Even though it's a it's flat sequentially on a roughly flat sequentially on a dollar amount and on a year of amount. It's still implies we still would have an improvement in markets. So just wanted to dig deeper into what you see the bigger drivers maybe we did your thoughts on us versus or us balance.
As far as cobot impact goes and or whether its particular business line or species that you're thinking about for fiscal one Q NAV a couple of follow ups after that.
So I think part of it is.
And we see anime dairy business.
The prices of milk after taking great gyrations of sort of steady to a level.
As given the farm is a bit more confidence.
And even though it's still as effect just from the prior call, it's quite difficult to get on farm.
We are getting out and meeting with the customers maybe not on their from maybe you know sort of.
Conor car in these equal belly to belly, but that's not done these days.
You know sitting in car and being able to talk about your products and what's going on trying to help the customers. So we started to see a pick up.
One in our dairy business, we're starting to see.
Some of the products we've worked on we've introduced.
It's starting to meet picked up a lot slower than we had hoped for what we're starting to see pickup in new poultry products that we rented.
We are confident getting growth in our vaccine business, we had really good you know.
Poultry and swine vaccines. So again, when we were able to introduce some were seeing pick up there. So I think it's the general tone of the optimism.
That we have it's still going to be slow going because its you know people.
It's not back to normal, but looking at our customers they've managed to rearrange.
Yes supply chains things and you know, they're selling more to supermarket today than ever before.
And if you look at a quite interestingly.
So very recently normally we hit the summer you see lots of sales.
Being offered you know to move product into the barbecue, which means that the surplus in the and the warehouse, but only now we're starting to see you know sales being offered in supermarkets I think our customers that bounce that the supply chain is set up and they you know they've had Lisa supermarket.
I have had a pretty good here.
Great. Thanks, sorry, it was on it there.
Appreciate that and then on the on the international markets.
I don't know if you can.
If you can answer this or not but in places like South America, Latin America, where you're seeing some of the more recent pressures is it fair to say that those markets of at least bottomed for you.
And.
It's as bad as it's going to get or is it true to say that too much uncertainty kind of depends on covance.
Uh huh.
You know yeah, I am I hate called bottoms, but I think overall looking at at the biggest markets in South America, which is really.
Brazil.
I've been hearing a.
Right, but in Central America, Mexico, I think things seem to have bought it bottomed out and.
Markets there.
Going out of Brazil, a lot of it depends on exports I think have.
Stabilizing is dying to get better.
Yes, some of the smaller markets.
Still is unpredictable like Chile and Peru.
Was covered.
But where we're seeing still the effects of Covidien sort of interestingly is at places like in the far east like Indonesia, Bangladesh.
Where a lot of those markets. It's just driven by the economy. Their economy has been so badly devastated.
By the effects of covert one in the country and two in the markets. They sell their normally that products to Mike U.S. and Europe.
Is that people don't have the same economic ability to buy protein as they had a year ago.
So for those markets it can take longer to come out of this co related disaster.
My because not nets.
I don't people being sick with being pushed by them on people having work.
Great. Thanks, and then couple of a couple really quick ones. One is apologies if I missed it in the prepared remarks, I know you touched on on Mecca Docs briefly but could you remind me of sort of the next steps the catalyst timeline, how we should think about that situation evolving on on mechanism.
And then the second question is could you quantify what was the dollar contribution of Osprey for the year I think it's been almost a full year. It's been in your business. So I want to make sure I got it right in my model.
Okay, well as I said towards the end in my prepared remarks.
The actually surprised us a little over a month ago.
With when I want to only from Courtland run we were proceeding for the last four or five years and answering questions. They had investing a lot and doing the scientific research improving.
I think two I, south and I think also to them.
That the product is it safe.
And so we've always been effective product as safe as use or something I don't know, what's going on NFC am I.
I know, what they're not doing blank.
But what they should be doing or in terms of the animal health space. You know, it's just continuing on the normal pattern and looking at the science here and have been happy we could continue to hearing and then proving Anna and I sort of a hearing that the product is safe they decide to withdraw that and employee.
And say, okay forget forget that and now we're going to come up with another way maybe move the product. So we're.
Protesting that.
We will most likely will end up in a lawsuit with them. So no I don't have a short term prediction, but I think again.
This thing would end up in it and you know in the right procedures that we would win because the product we've proven scientifically the product is safe.
Great and Osprey.
I don't know Dick the have those numbers.
Yeah, we say that about two thirds of our nutritional specialty growth for the year was was the osprey business and that's just that's the legacy business.
That's not the.
Yeah, they stop the new poultry product that.
We developed a sort of separately so that that will give you a sense of though.
Yes, the magnitude of the Osprey sales contribution.
Perfect perfect that's exactly what for thanks, so much thanks Chuck.
Thank you.
Your next question comes from David Risinger with Morgan Stanley. Your line is open.
Thanks, very much a good morning, Jakone Dick and thanks for all of the comments.
So I have three questions. Please first.
With respect to [noise].
China.
There is an opportunity for the company to.
Began to sort of regenerate sales in China could you talk about those prospects second with respect to Brazil or is there anything to watch with respect to Virginia mice and regulation in Brazil, and third with respect to the path.
Next rate there could you just and maybe you've mentioned it earlier, but is is there anyway that you could frame for us how we should think about a.
Medium to long term prospects for the corporate tax rate.
Hi, Thanks, Thank you David.
So in China.
And I think maybe if again I'll start with China go back to Brazil.
So in China like in most markets in the world.
Virginia, My son, which it was our leading product.
Was used in the growth promotion.
I was not you did not have a therapeutic label.
So trying to change the rules put you suddenly they sometimes do.
And the ability for us and to continue in that market as a growth motion product Andy.
And we have we apply a to move that product to a therapeutic claim and is as a therapeutic product was selling Virginia mice and continue to sell around the world.
So we've got held up in China with Covance that many of the government agencies, we need to deal with sat down and it's hard to get product has stayed et cetera et cetera. It as we know China when they shut they really shot so.
Well, we thought would take we would have by now I think will take us.
Another year, you get I'm, sorry, Peter to claim and then to start rebuilding the product not the same level, we had before but at a very decent level.
In the Meanwhile, we've we've sort of Reengineered, our salesforce and our product line and we've begun selling.
Some of our nutritional products that we have selling around the world in China, it's not that significant yet, but we're seeing growth of those products in that marketplace. So.
You know going forward hopefully you have from that we'll be talking both the bad and phase and bag nutritional specialties or in the Chinese markets.
In Brazil.
There's no major change and we made a change in Brazil from a growth most into a therapeutic model over a year ago, maybe even a little longer so I sales continue.
And to reuse product, Virginia mice and continues to be use as a therapeutic products.
They're both and across all three species poultry swine and cattle and we're seeing.
He's an uptake.
Thank you.
Right and on the on the tax rate, David I would say.
Before this.
But I hate to use that much overuse terminology is something like a perfect storm, but.
I would say that in the medium.
Term they even this year, where we're looking at a rate to be back sub 30%, so something and in the upper 20% range.
As an effective tax rate on that on an adjusted basis.
Thanks again.
Again to ask a question. Please press star one on your telephone Keypad. Your next question comes from Kevin Kedra with GE Research. Your line is open.
Hi, Thanks for taking my question first wanted to ask about the where are you seeing as far as inventory levels out there within the channel to cover to create some disruption. So overtime. If we've seen that start to normalize there's there's still a lot of movement there.
So.
You're talking about and our customers right yes.
So you know dipping Miss the big mystery.
And so I think around the world things are pretty balanced.
Again in the big mystery in a big everyone with sort of kinda focus on.
It was in the U.S. as they start talking earlier with you know.
So much yeah, you know attention put in some a big hog slaughter facilities shutting down and the backup.
And you know the industry everyone's speculating that look like.
About.
We may in patients with backed up and what would happen with it.
So.
[noise] somehow they disappeared.
As best we can tell.
And they weren't they and I don't think a lot of a cold.
Thanks, a lot of them ended up in the market, maybe it's more the Florida houses that are not tracked by the U.S.P.A. Some of these places maybe even had in hadn't been worked in a long time, because these things got bigger and they really couldn't be handled well on the more automated line.
So maybe some of the older factories with slower lines and stuff like that handle it but as far as we can tell.
You know.
Well see a little bit gap coming up the guys in some cases people.
You know called some of the baby pegs and that took it out of the marketplace and maybe we'll see that affect November December but I don't think there's a great overhang from what we see in what we hear.
In the hog industry and everywhere else I don't see is a problem you know the poultry guys will respond very quickly. They did I think things back normal there and the cow industry I think business is okay.
Great appreciate the color and then second well know if I missed this but did you guys give.
A revenue number could you give revenue to number on Carbonite split the contribution was for the full year.
Yeah. It's.
We disclose it soon they can K it was $17 million last fiscal.
One seven.
Okay.
And then finally any update on what do you guys have done with the.
African swine fever vaccine I know, there's something that you guys were looking at.
Before anything new there.
Yeah. So we continue to look at Lyman like everything else.
I know you know covance sort of set down.
One our ability to get over there and test products. So we haven't development.
You are.
Yeah, we have not been able to get into China now for.
Nine months.
And so.
We still are doing some development work outside China, but north to test.
Well, we've developed to see if it.
If it is it has potential to work into African swine fever, what's sort of blocked and.
I will hopefully hopefully by the.
Maybe by this winter the end of the discount the towards the end of the Cowen yet things will open up flights will start opening up when we can get back into into move got some moving the product forward.
Okay. Thanks.
There are no further questions queued up at this time of kind of the call back over to Richard Johnson for closing remarks.
Alright, well, we thank everyone for listening and your your insightful questions and comments and we'll talk to you again, when we talk about our first quarter results in.
Early November we should be up having that call.
And if we don't have any interesting earnings results to talk about will probably be reporting a couple of days. After the election. So we can we can talk about that.
As an alternative thank you everyone and talk next time bye.
This concludes today's conference call you may now disconnect.
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