Q4 2024 Phibro Animal Health Corp Earnings Call

Julianne: Good morning, my name is Julianne and I will be your conference operator today. At this time, I would like to welcome everyone to the Fibro Animal Health Corporation for its quarter in Nester Conference call.

Unknown Executive: At this time, I would like to welcome everyone to the Phibro Animal Health Corporation's fourth quarter investor conference call. All lines have been placed on mute to prevent any background noise.

Unknown Executive: After the speaker's remarks, there will be a question-and-answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again.

Speaker Change: All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you'd like to ask a question during this time, simply press star, full of by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. Thank you.

Glenn David: I would now like to turn the conference over to Gwen David, Chief Financial Officer. Please go ahead.

Speaker Change: I would now like to turn the conference over to Glenn David, Chief Financial Officer, please go ahead.

Glenn David: Thank you, Julian. Good day, and welcome to the Phibro Animal Health Corporation earnings call for a fiscal fourth quarter in full year and June 30th, 2024. My name is Glenn David, and I'm the Chief Financial Officer of Phibro Animal Health Corporation.

Glenn David: Thank you, Julian. Good day and welcome to the Five Road Animal Health Corporation earnings call for a fiscal fourth order in full year in June 30, 2024.

Glenn David: My name is Glenn David, and I'm the Chief Financial Officer of the Five Rope Animal Health Corporation. I'm joined on today's call by Jack Bendheim, Fibros Chairman, President and Chief Executive Officer.

Glenn David: I'm joined on today's call by Jack Bendheim, Phibro's chairman, president and chief executive officer. Donnie Bendheim, Director and Executive Vice President of Corporate Strategy, and Larry Miller, Chief Operating Officer. Today, we will cover financial performance from a fourth quarter in full year 2024 and provide financial guidance from fiscal year ending June 30th, 2025. At the conclusion of our remarks, we will open the lines for your questions. I would like to remind you that we are providing a simultaneous webcast of this call on our website, p8hc.com. Also, on the investor section of our website, you will find copies of the earnings press release in annual form 10-K, as well as the transcript and slides discussed and presented on this call.

Speaker Change: Sonny Bendheim, Director and Executive Vice President of Corporate Strategy, and Larry Miller, Chief Operating Office.

Speaker Change: Today, we will cover financial performance from a fourth quarter in four years, 2024, and provide financial guidance for a fiscal year ending June 30, 2025.

Speaker Change: At the conclusion of our remarks, we will open the lines for your questions.

Speaker Change: I would like to remind you that we are providing a simultaneous webcast of this call on WebSafe, P8HC.com

Speaker Change: Also, on the Investors section of our website, you will find copies of the earnings press release in annual Form 10K, as well as the transcript and slides discussed and presented on this call.

Glenn David: Our remarks today will include forward-looking statements, and actual results could differ materially from those projections. For a list and description of certain factors that could cause results to differ, I refer you to the forward-looking statement section in our earnings press release. Our remarks include references to certain financial measures which were not prepared in accordance with generally accepted accounting principles for U.S. Gap. I refer you to the non-GAAP financial information section in our earnings press release for a discussion of these measures. Reconciliation of these non-GAAP financial measures to the most directly comparable U.S. Gap measures are included in the financial tables that accompany the earnings press release.

Speaker Change: Our remarks today, willing to move forward-looking statements and actual results could differ materially from those projections.

Speaker Change: For list and description, certain factors that could cause results to differ. I refer you to the overlooking statement section in our earnings pressurings.

Speaker Change: Our remarks include references to certain financial measures, which were not prepared and importance with generally accepted accounting principles for U.S. Gap.

Speaker Change: I refer you to the non-gap financial information section in our earnings press release for a discussion of these measures.

Speaker Change: Reconciliation of these non-gap financial measures to the most directly comparable U.S. got measures are included in the financial tables that accompany the earnings pressures.

Glenn David: We present our results on a gap basis and on an adjusted basis. Our adjusted results exclude acquisition-related items, unusual non-operational or non-recurring items, including stock-based compensation. Other income expenses are separately reported in the consolidated statement of operations, including foreign currency losses and gains.

Speaker Change: We present our results on a gap basis and on an adjusted basis.

Speaker Change: Our adjusted results, exclude acquisition-related items, unusual, non-operational or non-recurrent items, including stock-based compensation.

Speaker Change: Auditoring from experience to separately reported in the consolidated statement of operations, including foreign currency losses and gains.

Jack Bendheim: Any income taxes related to pre-tax income adjustments and unusual or non-recurring income tax items. Now, let me introduce our Chairman, President and Chief Executive Officer, Jack Ben Time, to share his opening remarks.

Speaker Change: Any contact is related to pre-tags and commitments, and unusual or non-referring income-sad signs.

Speaker Change: Now, let me introduce our Chairman, President, and she took a look at Officer Jack Bendheim to share his opening remarks.

Jack Bendheim: Thank you, Glenn, and thank you to everyone joining us this morning. We have a strong finish to the year with an animal health business growing sales 8% of the quarter, led by vaccine growth of 14%, and NFA and other growth of 12%. In the quarter, a mental nutrition segment grew at 6%, and while our performance product segment showed a slight decline, both mental nutrition and performance products had their best quarter of the year, building on the improvements we would began to see in the third quarter.

Jack Bendheim: Thank you, plan and thank you to everyone joining us this morning.

Speaker Change: We have strong finish of the year with our animal health business going sales 8% of the quarter led by vaccine growth of 14% and everything in other growth of 12%.

Speaker Change: In the quarter, a minimum nutrition segment who had six percent, and while our performance product segment showed a slight decline, both minimum nutrition and performance products had the best quarter of the year, building on the improvements began to see in the third quarter.

Jack Bendheim: Forum. We remain very excited about the acquisition of the Zawedis MFA business; we are moving closer to a closing on the deal. Our team is working very hard together with Zawedis to ensure that a transition that is as seamless as possible so that the customers are unaffected by the handoff. We expect the transaction to close in the fourth quarter of this calendar year. As Glenn will further detail, we are also providing guidance for our fiscal year 2025, which shows mid-single digit growth at revenue and a leverage P&L on a stand-alone basis. We anticipate the favorable moment, and we saw this past quarter will continue in our new fiscal year.

Speaker Change: We remain very excited about the acquisition of the Sowenis MFA business, we are moving closer to a closing on the deal.

Speaker Change: Our team is working very hard together with so at us to ensure that a transition that is as seamless as possible, so that the customers are unaffected by the handoff. We expect the transaction to close in the fourth quarter of this calendar year.

Speaker Change: As Glenn will further detail, we are also providing guidance for a fiscal year 2025, which shows mid-single difficulty revenue and a leverage P&L on a stand-alone basis.

Glenn David: We anticipate the fabled momentum we saw this past quarter will continue and our new fiscal year.

Jack Bendheim: On top of this, I would just like to give a tie and adjust the net income growth; I'd benefit from an income growth initiative that we internally called FIRO Forward. This initiative is unlocking additional growth drivers and our business across both revenue and cost of frequency initiatives. Our guidance also includes one-time costs related to this initiative that are primarily external consulting fees. We expect even greater benefits from this initiative, and our fiscal year is 2026 and 2027 results. The guidance provided does not include the pending Zawedis acquisition. Additional guidance on Zawedis will be provided post-the deal close in.

Glenn David: and Tom Bliss, Joseph Ibita and Joseph Nedding come growth. A benefit from an income growth initiative that we internally called FIRO forward. This initiative is unlocking additional growth drivers in our business, cross-border, revenue, and cost of pre-forestation initiatives.

Glenn David: Our guidance also includes one time cost related to this initiative that are primarily external consulting fees.

Glenn David: We expect even greater benefits from this initiative in our fiscal year is 2020-26 and 2020-27 results. The guidance provided does not include the pennies OS acquisition.

Speaker Change: and additional guidance on surveillance will be provided post-the-deal closely.

Jack Bendheim: I look forward to hearing your questions from England's reviews of our financials.

Speaker Change: Hello photo here with your questions from Glenn's reviews, but I find an answer. Thank you.

Glenn David: Thanks, Jack, and starting with our Q4 performance on slide four. Consolidated net sales for the quarter ended June 30, 2024, were 273.2 million dollars, reflecting an increase of 18.1 million dollars, or a 7% increase over the same quarter one year ago. The annual bulk segment grew 8%, while mineral nutrition grew at 6%, and the performance product segment declined by 1%.

Speaker Change: Thanks Jack, and starting with our Q4 performance on slide four.

Speaker Change: In solidated net sales for the quarter ended June 30, 2012, for 273.2 million dollars, reflecting an increase of $18.1 million, where 7% increase over the same quarter of one year ago.

Speaker Change: The Apple Health segment group 8% while miniatration grew at 6% and the performance product segment decline at 1%.

Glenn David: Gap net income and diluted EPS decreased significantly during by foreign currency losses in the quarter due to the weakening of the Brazilian layout and increased SG&A due to higher employee-related costs. Parsley offset by favorable gross profit has a result of higher product demand in the animal health segment. After making our standard adjustments to gap results, including acquisition-related items, foreign currency losses, and certain one-off items, fourth quarter adjusted EBITDA increased 1.1 million dollars, worth 3% versus the prior year. Adjusted net income and adjusted the diluted EPS both increased 10%. Increased gross profit, driven by sales growth, was partially offset by higher adjusted SG&A and higher adjusted interest expense, with a benefit from a reduced adjusted provision for income taxes.

Speaker Change: Gap Bendheim and the Lutheran EPS decreased significantly during my foreign currency losses in the quarter due to the weakening of the Brazilian Reel and increased SG&A due to higher employee-related costs, partially offset by favorable growth profit as a result of higher product demand in the animal health segment.

Speaker Change: After making our standard adjustments to gap results, including acquisition-related items, farming currency losses, and certain one-off items. Fourth quarter adjusted EBITDA increased $1.1 million worth 3% versus the prior year.

Speaker Change: But just a net income and a just a dual-ready PS, both increased 10%.

Speaker Change: Increased growth profit, driven by sales growth, was partially offset by higher adjusted SG&A and higher adjusted interest expense, with a benefit from a reduced adjusted provision for income taxes.

Glenn David: Moving to the full year. Consolidated net sales for the year ended June 30, 2024, were 1 billion 17 million dollars, reflecting an increase of 39.8 million dollars, or a 4% increase over the prior year. The animal health segment grew 7%, while mineral nutrition was flat, and the performance product segment declined by 10%.

Speaker Change: Moving to the full year.

Speaker Change: Consolidate in that sales, for the year ended June 30, 2024, were $1 billion, $17 million. Reflecting an increase of $39.8 million, were 4% increase over the prior year.

Speaker Change: The animal health segment through 7%, low mineral nutrition was flat, and the performance product segment declined by 10%.

Glenn David: Gap net income and diluted EPS decreased significantly during by foreign currency losses in the Argentinian peso and Brazilian rio. Increased SGNA due to pension settlement costs, and higher employer-related costs, and higher interest expense, partially offset by favorable gross profit as a result of higher product income tax expense decreased by $13 million. After making our standard adjustments to gap results, including acquisition related items, bar and currency losses, and certain one-off items, full-year adjusted EBITDA decreased $1.5 million for 1%, adjusted in income and adjusted respectively offset by increased growth profit during by sales growth and a benefit from a reduced adjusted provision for income taxes.

Speaker Change: Gap net income and duality PS decreased significantly during my foreign currency losses.

Speaker Change: in the Argentinian case of and Brazilian Reo, increased SG&A due to pension settlement costs and higher employer-related costs and higher interest expense, partially offset by favorable gross profit as a result of higher product demand in the animal health segment.

Speaker Change: Income tax expense decreased by 13 million dollars.

Speaker Change: After making our standard adjustments to gap results, including acquisition-related items, farm currency losses, and certain one-off items, full year adjusted EBITDA, decreased $1.5 million, or 1%.

Speaker Change: A Justin Henning come and adjust the duality PS, both decreased by 1%.

Speaker Change: fire adjusted SGNA and higher adjusted interest expense was partially all said by increased growth profit driven by sales growth and a benefit from a reduced adjusted provision for income expenses.

Glenn David: Now moving to segment level financial performance. The Animal Health segment posted $191.5 million net sales for the quarter and increased of $14.8 million or 8%. Within the Animal Health segment, we reported MFA and other net sales growth of $12.5 million, or 12%, due to demand in both domestic and international regions. Vaccine net sales growth of $4 million, a healthy 14% increase, driven by poultry product introductions in Latin America plus an increase in domestic demand. Nutritional specialties net sales declined by $1.7 million, or 4%, mostly due to lower demand for microbial and dairy products. Animal Health adjusted EBITDA was $41.3 million and a 9% increase due to higher growth profit from increased sales, partially offset by higher SG&A.

Speaker Change: i

Speaker Change: Now moving to segment level, financial importance.

Speaker Change: The animal health segment posted $191.5 million net sales for the quarter, and increased of $14.8 million or 8%.

Speaker Change: Within the animal health segment we were reported, MFAs and other net sales growth of $12.5 million or 12% due to demand and vote domestic and international regions.

Speaker Change: Vaccine Net sales growth of 4 million dollars, a healthy 14% increase, driven by poultry product and productions in Latin America, plus an increase in domestic demand.

Speaker Change: Nutritional specialties in that sale declined by $1.7 million or 4% mostly due to a lower demand for microbial and dairy products.

Speaker Change: Annable health adjusted e-pizza was $41.3 million, and 9% increase due to higher growth profit from increased sales, parsley offset by higher-rest jeaning.

Glenn David: Moving to full-year performance for animal health on slide 7, the Animal Health segment posted $706.5 million of net sales for the year and increased of $46.6 million, or 7%, versus the prior year. Within the Animal Health segment, we reported MFA and other net sales growth of $33.6 million or 9% due to demand in both domestic and international regions. Vaccine net sales growth of $20.5 million, a healthy 21% increase, driven by poultry product introductions in Latin America plus an increase in domestic demand. Nutritional specialties net sales declined $7.8 million or 5%, mostly due to lower demand from microbial and dairy products.

Speaker Change: Moving to full year performance for animal health on slide 7.

Speaker Change: The animal health segment posted $766.5 million of net sales for the year, and increased a $46.6 million or 7% versus a prior year.

Speaker Change: With Indian Animals Health segment, we're reported, MFA's and other net sales growth of $33.6 million for 9% due to demand in both domestic and international regions.

Speaker Change: That scene that sales growth of 20.9 million dollars, a healthy 21% increase, driven by poultry product introductions of Latin America, post an increase in domestic demand.

Speaker Change: Nutritional specialties met sale detain 7.8 million dollars or 5% mostly due to lower demand for microbial and dairy products.

Glenn David: Animal Health adjusted EBITDA was $145.6 million, but 7% increase due to higher growth profit from increased sales, offset by higher SGNA.

Speaker Change: Animal Health had just the debits up with $145.6 million, the 7% increase through the higher growth profit from increased sales, offset by higher SGNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNN

Glenn David: Moving on to fourth quarter performance for our other business segments, starting with mineral nutrition, net sales for the quarter were $62.1 million, an increase of $3.6 million, or 6%, due to increased sales volume and price. Mineral nutrition adjusted EBITDA was $5.4 million, reflecting a year-on-year increase of $1.5 million, driven by higher growth profit. Looking at our performance product segment, net sales of $19.6 million reflects a decrease of $0.3 million or 1%, driven by decreased demand for personal care product ingredients by Justin Abita. Was $3.1 million and grew $0.8 million versus the same quarter prior year.

Speaker Change: Moving on to fourth quarter performance for our other business segments.

Speaker Change: Starting with Miner of Nutrition.

Speaker Change: Net sales for the quarter were $62.1 million, and increase of $3.6 million for 6% due to increased sales volume and price.

Speaker Change: Miner of a Trishon adjusted E-bath was 5.4 million dollars, reflecting a year on year increase of $1.5 million, driven by higher growth property.

Speaker Change: Looking at our performance product segment, met sales of $19.6 million, reflects a decrease of $0.3 million or 1% driven by decreased demand for personal care product ingredients and industrial chemicals.

Speaker Change: The Justice Unit was $3.1 million and grew $0.8 million versus the same quarter prior year.

Glenn David: Corporate expenses increased $4.6 million during by increased employer-related costs related to the annual incentive bonds. Moving on to full year performance for our other business segments, starting with mineral nutrition, net sales for the year were $243.7 million, an increase of $1 million, due to increased sales buying. Mineral nutrition adjusted Abita was $16.4 million, reflecting a year-on-year decrease of $1 million during by lower growth profit. Looking at our performance product segment, net sales of $67.5 million for the year reflected a decrease of $7.8 million or 10% due to decreased demand for personal care product ingredients and industrial chemicals.

Speaker Change: Corporate expenses increase $4.6 million, driven by increased employer-related costs related to the annual consent of books.

Speaker Change: Moving on to full-year performance for our other business segments. Starting with Minner Nutrition, Net Sales for the Year, which $243.7 million, and increase of $1 million, due to increased sales buying.

Minora Richardson: Minora Richardson has just had even to have a 16.4 million dollars reflecting a year on your decrease of one million dollars driven by lower growth profit.

Minora Richardson: Looking at our performance product segment, net sales of $67.5 million for the year, reflects a decrease of $7.8 million or 10%. During my decrease demand for personal care product ingredients and industrial chemicals.

Glenn David: Adjusted Abita was $7.7 million, the decline of $1.7 million versus the prior year.

Speaker Change: and Justin David's over $7.7 million, the decline of $1.7 million versus the power of year.

Glenn David: Corporate expenses increased $8.3 million during by increased employer-related costs due to the annual incentive bonds and incremental strategic investments.

Speaker Change: Corporate expenses increased $8.3 million, drawing driven by increased employer-related costs due to the annual incentive bonus and incremental strategic investments.

Glenn David: Starting to key capitalization related metrics. We generated more than $46 million, a positive free cash flow for the 12 months ended June 30, 2024. We generated $88 million of operating cash flow and invested $41 million in capital expenditures. Cash and cash equivalents and short-term investments were $115 million at the end of the year. On gross leverage ratio was 4.4 times at the end of the fourth quarter based on $489 million of total debt and $111 million of trailing 12 months adjusted EBIT. Our net leverage ratio was 3.4 times at the end of the fourth quarter based on $375 million of net debt and $111 million of trailing 12 months adjusted EBIT.

Speaker Change: Learning to keep capitalization related metrics.

Speaker Change: We generated more than $46 million, the positive free cash flow for the 12 months and the June 30, 2024.

Speaker Change: We generated $88 million of operating cash flow, and invested $40 million in top total expenditures.

Speaker Change: Casting Castor Covins, and short-term investments were $111 million at the end of the year.

Speaker Change: A gross leverage show was 4.4 times at the end of the fourth quarter, based on $489,000,000 total debt and $111,000, the trailing 12 month, just to leave it.

Speaker Change: Our net leverage ratio was 3.4 times at the end of the fourth quarter, based on $375 million of net debt, an 111 million of Charlie 12 months adjusted even to it.

Glenn David: Turning to dividends, consistent with our history, we paid a quarterly dividend of $0.12 cents per share or $4.9 million in aggregate. As a reminder, $300 million of our debt is at a fixed rate of 0.61% plus the applicable margin. The remaining $189 million in total debt is subject to variable interest rates, although all sets somewhat by interest income earned on short-term investments.

Speaker Change: Turning to dividends consistent with our history, we paid quarterly dividend of 12 cents per share of $4.9 million in aggregate.

Speaker Change: As a reminder, $300 million of our debt is at a fixed rate of 0.61% plus the applicable margin.

Speaker Change: The remaining $189 million, the total debt is subject to variable interest rates, although offset someone by interest and concurrent on short-term investments.

Glenn David: Effective July 3rd, we refinanced our existing credit facilities. Our new 2024 credit facilities have an initial aggregate principal amount of $610 million. It contains a delayed draw prohibition for without the company to draw an additional $350 million term A loan for applying closing of the Zomadish Direct Transax. It also includes a $300 million term A loan that replaces the company's existing 2021 Term A loan and 2023 incremental term loan. It also includes a $310 million dollar revolver, replacing our existing $310 million dollar revolver. The new facilities extend the maturity date from our current facilities of April 2026 to maturity dates of July 2029 and July 2031.

Speaker Change: Effective July 3, we re-finance our existing credit facilities.

Speaker Change: Our new 24 24 credit facilities.

Speaker Change: Have an initial aggregate principle amount of $610 million.

Speaker Change: It contains a delay draw for this throughout the company to draw in additional 350 billion term A-Lone, compiling closing of this one by this track, Transaction

Speaker Change: It also includes a $300 million term A loan that replaces the company's existing 2021 term A loan and 2023 incremental term loan

Speaker Change: It also includes a $310 million dollar revolver replacing our existing $310 million dollar revolver.

Speaker Change: The new facilities extend the maturity date from up current facilities of April 2026 to July 2029 and July 2331

Glenn David: Additional information regarding the terms and conditions of the 2024 credit facilities are contained in our 410K that was filed yesterday.

Speaker Change: Conditional Information regarding the terms and conditions of the 2020 Board Credit Facilities are contained in our 410K of the filed yesterday.

Glenn David: Now let's turn to slide 11, which lays out our guidance for fiscal year 2025. Please note that this guidance does not include the Zawedis MFA acquisition, as the timing for close is still not final. Included in this guidance for fiscal year 2025 are early benefits related to our 5-row forward income growth initiative that will help drive additional EBITDA and margin growth. One-time costs related to this initiative are also included in our gap guidance and are primarily consistent one-time consulting fees. The initiative is focused on unlocking additional areas of revenue growth and cost savings. Areas such as incremental pricing creases, expanded product offerings, procurement initiatives, and other cost savings initiatives.

Speaker Change: Now let's turn to slide 11, which lays our guidance for fiscal year 2025.

Speaker Change: Please note that this guidance does not include his or what is MSA acquisition as the timing for clothes is still not fine.

Speaker Change: Included in this guidance, for fiscal year 2025, our broadly benefits related to our fibro-forward income growth initiative, double health drive, additional ebitat and margin growth.

Speaker Change: One-time costs related to this initiative are also included in our gap guidance and primarily consist of one-time consulting fees.

Speaker Change: The initiative to focus on unlocking the additional areas of revenue growth and cost savings.

Speaker Change: Area such as incremental pricing crisis, expanded product offerings, procurement initiatives, and other cost savings initiatives.

Glenn David: Please note we do not anticipate significant headcount reductions as part of this image.

Speaker Change: Please note, we do not anticipate significant headcount reductions as part of this image.

Glenn David: Our guidance for fiscal year 2025 on a standalone basis is as follows. Net sales of 1 billion for you million to 1 billion 90 million dollars. This represents a growth range of 2 to 7 percent and a midpoint of approximately 5 percent. Growth versus prior year is driven by continued growth in our animal health segment as well as a recovery in both our mineral nutrition and performance products. Adjust the EBITDA of 118 to 126 million dollars. This represents a growth range of 6 to 13 percent and a midpoint of approximately 10 percent. Adjust the net income of 50 to 56 million dollars, which represents growth of 3 to 15 percent, with a midpoint of approximately 9 percent.

Speaker Change: Our guidance for fiscal year 2025 on a standalone basis is as follows.

Speaker Change: Net sales of $1 billion for a million to $1 billion in 90 million dollars.

Speaker Change: This represents a growth range to a 7% and a midpoint of approximately 5%.

Speaker Change: Groved versus prior year is driven by continued growth in our animal health sector, as well as a recovery in both our minor nutrition and performs products.

Speaker Change: The Justice Division of 118 to 126 million dollars

Speaker Change: This represents a growth range of 6 to 13 percent and a midpoint of approximately 10 percent.

Speaker Change: had income of $50 to $56 million, which represents growth of 3% to 15% with a midpoint of approximately 9%.

Glenn David: This growth is driven by growth in EBITDA and our improvement in our adjusted effective tax rate, partially offset by incremental interest expense due to our new debt deal. Gap net income in EPS assumes constant currency and no gain in their losses from fx moves. Also included in our Gap net income in EPS of one-time costs related to our five-row-forward income growth initiative.

Speaker Change: This growth is driven by growth and EBITDA and are improving in our adjusted effective tax rate, partially offset by incremental interest expense due to our new debt dealer.

Speaker Change: Gap net income, NEPS, assumes constant currency and no gains or losses from their tax moves.

Speaker Change: Also included in our Gapnidding Company P.S. of one-time cause related to our fibrofollowed income growth initiative.

Glenn David: As previously mentioned, this guidance did not include depending on what is MFA acquisition, and the timing for closing remains uncertain.

Speaker Change: As previously mentioned, this guidance did not include companions of what a semitha acquisition as the timing for closing your means of search.

Glenn David: We hope to provide guidance on Zoetis in our Q1 earnings call in November. We remain confident in our previous estimates of an incremental 60 cents in adjusted EPS in the first 12 months of the close date and our ability to be lever post-close.

Speaker Change: We hope to provide guidance on Zowettus, you know, Q1, and her name is called In-Rems.

Speaker Change: We remain confident in our previous estimates of an incremental 60 cents to adjust the BPS in the first 12 months of the closed date and our ability to view ever post-posts.

Jack Bendheim: In closing, we're excited about the strong performance we saw in the second half of fiscal year 2024 and the momentum we're carrying into fiscal year 2025. We're confident in the demand for our products around the world, and we're forward to seeing continued improvement in our business as we move forward. We also look forward to welcoming Zoetis MFA employees in the coming months.

Speaker Change: In closing, we're excited about the strong performance we saw in the second half of fiscal year 2024, and the momentum we're carrying it to fiscal year 2025.

Speaker Change: We're confident in the demand for our products around the world, and we're forward seeing continue to prove that in our business as we move forward.

Speaker Change: We also look forward to welcoming the weather semitha employees in the coming months.

Unknown Executive: With that, Julie Ann, could you please open the line for questions.

Unknown Executive: Thank you. At this time, I would like to remind everyone that in order to ask a question, press star at the number one on your telephone keypad. We'll pause for just a moment to compile the Q&A roster.

Speaker Change: With that, Julie Ann can please help me align through questions.

Julie Ann: Thank you. At this time, I would like to remind everyone in order to ask a question, press star to the number one on your telephone keypad. We'll pause for just a moment to compile the Q&A roster.

Michael Ryskin: Our first question comes from Michael Ryskin from Bank of America. Please go ahead; the line is open.

Speaker Change: Our first question comes from Michael Riskin from Bank of America. Please go ahead until I'm

Michael Ryskin: Great, thanks for taking the questions.

Jack Bendheim: The first glance you just went through it right there in terms of the components of the guide for 5th gear 24, but it was wondering if you could provide a little bit more color on MFA's nutritional specialty vaccines, just what are the various drivers of each? What are the puts and takes that sum up to that overall 5% revenue guide?

Michael Riskin: Great, thanks for taking the questions. First, Glenn, you just went through it right there in terms of the components of the guide for fiscal year 24. But it was wondering if you could provide a little bit more color on...

Speaker Change: MFA's International Specialty Vaccines, just what are the various drivers of each, you know, what are the puts and takes that sum up to that overall 5% revenue guide.

Jack Bendheim: Sure, so when you look at the performance for next year, Mike, for fiscal year 2025, we're excited about continued growth in animal health and also improvement that we expect to see in both mineral nutrition and performance products, which struggled a bit in the first half of fiscal year 2024, bizarre recovery in fiscal year 2025. Specifically to your question on animal health, again, we see that continuing to perform well in 2025, stoke growth in our MFA business, a recovery in nutritional specialty, and stoke growth in our vaccines are probably a little less than we saw in 2024 as we had the introduction in Brazil, particularly of our IV Bar product.

Speaker Change: Sure, so when you look at the performance for next year's make for this year's 25.

Speaker Change: We're excited about continuing growth in animal health and also improvement that we expect to see in both mineral nutrition and performance products which struggled a bit in the first half of fiscal year 2024. It's our recovery in fiscal year 2025.

Speaker Change: specifically your question on animal health. Again, we see that continually to perform well in 2025.

Speaker Change: Still broke in our remin-faib business, a recovery and a traditional specialty. And still broke in our vaccines for probably a little less than we saw in 2024 as we had the introduction in Brazil, particularly in our LIDVAR product.

Michael Ryskin: Okay, okay. And then another question on 5 growth forward, you flagged a few times in the end of the prepared remarks.

Speaker Change: Okay, okay, and then another question on a fibro-forward, you flagged us a couple times in the PR and the prepared remarks. Just a little bit more color on the magnitude of the cost, efficiencies and any, you know, what are the growth drivers in particular focusing on How should we think about the timing of this being rolled out?

Jack Bendheim: Just a little bit more color on the magnitude of the cost, efficiencies, and what are the growth drivers in particular focusing? How should we think about the timing of this being rolled out? Yeah, so I'll start a little bit, then I'll ask Donnie to comment as well. So we're in the early stages of this initiative right now. We do expect benefits in fiscal year 2025, but we expect those to expand as we move into fiscal year 2026 and 2027. And the initiatives go across a number of areas, as I mentioned, both revenue growth drivers, as well as cost savings initiatives that we're looking at in areas such as procurement and other areas as well.

Speaker Change: Yeah, so I'll start a little bit and then I'll ask Danny to comment as well. So we're in the early stages of this initiative right now. We do expect benefits in fiscal year 2025, but we expect those to expand as we move into fiscal year 2026 and 2027.

Danny: and the initiatives go across a number of areas, as I mentioned, both revenue growth drivers, as well as cost savings initiatives that we're looking at in areas such as procurement and other areas as well. You know, we do expect that, you know, in 26 and 27, this initiative will allow us to provide.

Jack Bendheim: You know, we do expect that, you know, in 26 and 27, this initiative will allow us to provide EBITDA and adjusted net income growth beyond our historical levels. And as we get further into the process, we'll provide more guidance for those future years.

Daniel: Eberton and Justin Netting from growth beyond our historical levels and as we get further into the process, we'll provide more guidance for those future years. And Daniel, if you want to add. Thanks, I'm not mistaken. You know, focused on...

Donnie Bendheim: And Donnie, I'll know if you want to add. Thanks, Adam. Not much to add. You know, focused on deliverable performance, focused on both, you know, recurring EBITDA, as well as, you know, cashflow. So we do see some, you know, positive; we do just pay some positives there as well this year, as well as in the future years.

Daniel: Liverpool performance focused on both recurring EBITDA as well as cash flow, so we do see some pod that we do in the space of pod as well as this year as well as in the future years.

Michael Ryskin: And, you know, as Glenn said, there's, you know, literally dozens of initiatives that, you know, some of them are very small, some of them are larger than some of the kind of, where we hope to be in a couple of years. Okay.

Daniel: and Glenn said there's literally dozens of initiatives that some of them are very small from the more larger that some of them are kind of where we hope to be in a couple of years.

Jack Bendheim: And then one last and a fact that squeeze in on this, so I just, I'm an FA deal, just around the deal itself, are there any regular terrorist types or anti-trust requirements that should be aware of from an HSR perspective? Are there any geographies where the regulatory approval just walk us through that part of it? Thanks. Sure. So there were two markets where we're requiring regulatory approval, Mike. One in the US, one being the US, obviously, and the one outside of the US. We've already cleared all the requirements for the US, so we're very excited about that.

Speaker Change: Okay, and then one last one, if I could squeeze in on those, so I just, and I fade to you. Just around the...

Speaker Change: The deal itself, are there any regular terrorist types or anti-trust requirements which would be aware of from an HSAR perspective, are there any geographies where...

Speaker Change: He'd rather try to improve, he'll just walk.

Speaker Change: through that part of it.

Speaker Change: is short, so there were two markets where we were in private regulatory approval mic. One in the US obviously in the one on outside of the US. We were declared all the requirements for the US, so we're very excited about that.

Jack Bendheim: There's one additional market. We're very confident in the ability to get approval. There's just more of a timing, you know, with their existing processes, and that's what drives our expectation that we will close the deal in Q4 calendar year this year.

Speaker Change: There's one additional market we're very confident in the ability to get approval there's just more of a timing, you know, with their existing processes and that's what drives our expectation that we will close the deal in Q4. Come and do your issue.

Michael Ryskin: Thank you.

Michael Ryskin: Great. Thanks so much.

Nevin T.: As a reminder to ask a question, please press star one. Our next question comes from Nevin T. from BNP Paraba. Please go ahead and line is open.

Speaker Change: Great, thanks so much.

Speaker Change: As a reminder to ask a question, please press star 1. Our next question comes from Nervain T from B&B Parabas. Please go ahead and line us open.

Jack Bendheim: Hi, good morning. I thought that though it is deal, can you discuss your integration plans and the integration work you have been doing before the deal closes and then a question on refinancing if you have completed all of it and you have higher government headroom as you anticipated. Thank you. In terms of the integration plans, obviously we have been working diligently as an organization to be prepared to bring the business into Phibro and be effective when we take over the business and make sure that we can effectively support our customers. We are working with third party consultants to help us to do that.

Nervain T: Hi, good morning. I thought the dough is still. Can you discuss your integration plans and the integration work you have been doing before?

Speaker Change: The deal closes and then a question on refinancing if you have completed all of it and you have higher covenant headroom as you anticipate it.

Speaker Change: In terms of the integration plans, obviously we've been working diligently as an organization to be prepared to bring the business in Survivor and be effective when we take over the business and make sure that we could effectively support our customers.

Jack Bendheim: As well, we are very confident in our ability to take over the business on day one, and we are building additional resources internally in markets where we may not have the level of presence to support the magnitude of the business that we are acquiring. As we mentioned, we are very excited about what that adds to us in certain areas in particular, particularly the expansion that provides to us in China, as well as the expansion in the USB market.

Speaker Change: We are working with our party consultants to help us to do that, as well we're very confident our ability to take over the business on day one. And we are building additional resources internally in markets where we may not have level of presence to support the magnitude of the business.

Speaker Change: that we are acquiring from the West. As we mentioned, we're very excited about what that adds to us in certain areas in particular, particularly the expansion that provides to us in China, as well as the expansion in the U.S.B. market.

Jack Bendheim: Related to the refinancing, we are done with the refinancing. As I mentioned in the prepared remarks, it does also provide for an additional delayed draw loan on the closing of this wetest acquisition of $350 million to help us finance that acquisition, so that is pending the deal close. Thank you.

Speaker Change: Related to the refinancing we are done with the refinancing, as I mentioned in the prepare remarks, it does also provide for an additional delay draw loan on the closing of this wet-as-act position of $350 million to help us finance bad acquisitions, so that is pending the deal close.

Unknown Executive: There are no further questions at this time.

Speaker Change: Thank you.

Glenn David: I would like to turn the call back over to Glenn David for any closing remarks. We thank you all for your interest in Phibro and my help, and we appreciate the questions and hope everybody has a great day. Thank you.

Speaker Change: There are no further questions at this time. I would like to turn the call back over to Glenn David for any closing remarks.

Glenn David: Now, we thank you all for your interest and background and my hope and we appreciate the questions and hope everybody has a great day. Thank you.

Unknown Executive: This concludes today's conference call. You may now disconnect.

Speaker Change: This concludes today's conference call and you may now disconnect.

Unknown Executive: Please wait. The conference will begin shortly.

Speaker Change: [inaudible]

Speaker Change: [inaudible] Damian Finio, Daniel Bendheim,

Unknown Executive: At this time I would like to welcome everyone to the Phibro Animal Health Corporation fourth quarter investor conference call. All lines have been placed on mute to prevent any background noise.

Unknown Executive: After the speakers remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. Thank you.

Glenn David: I would now like to turn the conference over to Gwen David, Chief Financial Officer. Please go ahead. Thank you, Julian.

Glenn David: Good day and welcome to the Phibro Animal Health Corporation earnings call for a fiscal fourth quarter in full year and June 30th, 2024. My name is Glenn David and I'm the Chief Financial Officer of the Phibro Animal Health Corporation. I'm joined on today's call by Jack Bendheim, Phibros Chairman, President and Chief Executive Officer. Donnie Bendheim, Director and Executive Vice President of Corporate Strategy and Larry Miller, Chief Operating Officer.

Glenn David: Today we will cover financial performance for a fourth quarter in full year 2024 and provide financial guidance for a fiscal year ending June 30th, 2025. At the conclusion of our remarks, we will open the lines for your questions. I would like to remind you that we are providing a simultaneous webcast of this call on our website, p8hc.com. Also, on the investor's section of our website, you will find copies of the earnings press release and annual form 10k as well as the transcript and slides discussed and presented on this call.

Glenn David: Our remarks today will include forward-looking statements and actual results could differ materially from those projections. For a list and description of certain factors that could cause results to differ, I refer you to the forward-looking statement section in our earnings press release. Our remarks include references to certain financial measures which were not prepared in accordance with generally accepted accounting principles for U.S. Gap. I refer you to the non-Gap financial information section in our earnings press release for a discussion of these measures.

Glenn David: Reconciliation of these non-Gap financial measures to the most directly comparable U.S. Gap measures are included in the financial tables that accompany the earnings press release. We present our results on a gap basis and on an adjusted basis. Our adjusted results exclude acquisition related items, unusual non-operational or non-recurring items including stock-based compensation. Other income expenses are separately reported in the consolidated statement of operations, including foreign currency losses and gains.

Jack Bendheim: Any income taxes related to pre-tax income adjustments and unusual or non-recurring income tax items. Now, let me introduce our chairman, President and Chief Executive Officer Jack Ben time to share his opening remarks.

Jack Bendheim: Thank you, Glenn and thank you to everyone joining us this morning. We have strong finish to the year with an animal health business growing sales 8% of the quarter led by vaccine growth of 14% and NFA and other growth of 12%. In the quarter, a mental nutrition segment grew at 6%, and while our performance product segment showed a slight decline, both mental nutrition and performance products had their best quarter of the year.

Jack Bendheim: Forum. We remain very excited about the acquisition of the Zawedis MFA business, we are moving closer to a closing on the deal. Our team is working very hard together with Zawedis to ensure that a transition that is as seamless as possible so that the customers are unaffected by the handoff. We expect the transaction to close in the fourth quarter of this calendar year. As Glenn will further detail, we are also providing guidance for our fiscal year 2025, which shows mid-single digital growth at revenue and a leverage P&L on a stand-alone basis.

Jack Bendheim: We anticipate the fable moment and we saw this past quarter will continue in our new fiscal year. On top of this, I adjust the EBITDA and adjust the net income growth. I benefit from an income growth initiative that we internally call Phibro forward. This initiative is unlocking additional growth drivers and our business across both revenue and cost of frequency initiatives. Our guidance also includes one-time cost related to this initiative that are primarily external consulting fees. We expect even greater benefits from this initiative in our fiscal year is 2026 and 2027 results. The guidance provided does not include the pending Zawedis acquisition.

Jack Bendheim: Additional guidance on Zawedis will be provided in post-the deal closing.

Jack Bendheim: I look forward to hearing your questions following Glenn's reviews of our financials. Thank you.

Glenn David: Thanks, Jack, and starting with our Q4 performance on slide four. Consolidated net sales for the $73.2 million, reflecting an increase of $18.1 million, or a 7% increase over the same quarter one year ago. The annual health segment grew 8%, while mineral nutrition grew at 6%, and the performance product segment declined by 1%.

Glenn David: Gap net income and diluted EPS decreased significantly during by foreign currency losses in the quarter due to the weakening of the Brazilian layout and increased SGNA due to higher employee-related costs. Partially offset, by favorable gross profit as a result of higher product demand in the annual health segment. After making our standard adjustments to gap results, including acquisition-related items, foreign currency losses, and certain one-off items, fourth quarter adjusted EBITDA increased $1.1 million worth 3% versus the prior year.

Glenn David: Adjusted net income and adjusted diluted EPS both increased 10%. Increased gross profit, driven by sales growth, was partially offset by higher adjusted SGNA and higher adjusted interest expense, with a benefit from a reduced adjusted provision for income taxes.

Glenn David: Moving to the full year. Consolidated net sales for the year ended June 30th, 2024, were 1 billion $17 million, reflecting an increase of $39.8 million, or 4% increase over the prior year. The annual health segment grew 7%, while mineral nutrition was flat, and the performance product segment declined by 10%.

Glenn David: Gap net income and diluted EPS decreased significantly driven by forward currency losses in the Argentinian peso and Brazilian Rial. Increased SGNA due to pension settlement costs and higher employer-related costs and higher interest expense, partially offset by favorable gross profit as a result of higher product demand in the annual health segment. Income Tax Expense Decreased by $13 million After making our standard adjustments to gap results, including acquisition related items, bar and currency losses, and certain one-off items, full-year adjusted EBITDA, decreased $1.5 million for 1%.

Glenn David: Adjustment in income and adjusted the diluted EPS, both decreased by 1%. Higher adjusted SGNA and higher adjusted interest expense, was partially offset by increased growth profit during by sales growth and a benefit from reduced adjusted provision for income taxes.

Glenn David: Now moving excitement level financial performance. The Animal Health segment posted $191.5 million net sales for the quarter, and increased a $14.8 million or 8%. Within the Animal Health segment we reported, MFA and other net sales growth was $12.5 million or 12% due to demand in both domestic and international regions. Vaccine net sales growth of $4 million, a healthy 14% increase, driven by poultry product introductions in Latin America plus an increase in domestic demand.

Glenn David: Nutritional specialties net sales declined by $1.7 million or 4% mostly due to lower demand for microbial and dairy products. Animal Health adjusted EBITDA was $41.3 million, a 9% increase due to higher growth profit from increased sales, partially offset by higher SGNA.

Glenn David: Moving to full-year performance for Animal Health on slide 7, the Animal Health segment posted $706.5 million of net sales for the year and increased a $46.6 million or 7% versus the prior year. Within the Animal Health segment we reported, MFA and other net sales growth of $33.6 million or 9% due to demand in both domestic and international regions. Vaccine net sales growth of $20.5 million, a healthy 21% increase, driven by poultry product introductions of Latin America plus an increase in domestic demand.

Glenn David: Nutritional specialties net sales declined $7.8 million or 5%, mostly due to lower demand for microbial and dairy products. Animal Health adjusted EBITDA was $145.6 million or 7% increase due to higher growth profit from increased sales offset by higher SGNA.

Glenn David: Moving on to fourth quarter performance for other business segments, starting with mineral nutrition, net sales for the quarter were $62.1 million, an increase of $3.6 million or 6% due to increased sales volume and price. Mineral nutrition adjusted EBITDA was $5.4 million reflecting a year-on-year increase of $1.5 million, driven by higher growth profit.

Glenn David: Looking at our performance product segment, net sales of $19.6 million reflects a decrease of $0.3 million or 1%, driven by decreased demand for personal care product ingredients and industrial chemicals. Corp was $3.1 million and grew $0.8 million versus the same quarter prior year. Corporate expenses increased $4.6 million during by increased employer-related costs related to the annual incentive bonds.

Glenn David: Moving on to full year performance for our other business segments. Starting with mineral nutrition, net sales for the year were $243.7 million and increased of $1 million due to increased sales buying. Mineral nutrition adjusted EBITDA with $16.4 million reflecting a year-on-year decrease of $1 million driven by lower gross profit.

Glenn David: Looking at our performance product segment, net sales of $67.5 million for the year reflected decrease of $7.8 million or 10 percent during by decreased demand for personal care product ingredients and industrial chemicals. Adjusted EBITDA with $7.7 million, the decline of $1.7 million versus the prior year.

Glenn David: Corporate expenses increased $8.3 million during by increased employer-related costs due to the annual incentive bonus and incremental strategic investments.

Glenn David: Starting to key capitalization related metrics. We generated more than $46 million for positive free cash flow for the 12 months and the June 30 of 2024. We generated $88 million of operating cash flow and invested $41 million in capital expenditures. Cash and cash equivalents ensure term investments were $115 million at the end of the year. A gross leverage ratio was 4.4 times at the end of the fourth quarter based on $489 million total debt and $111 million of trailing 12 months adjusted EBITDA.

Glenn David: Our net leverage ratio was 3.4 times at the end of the fourth quarter based on $375 million of net debt and $111 million of trailing 12 months adjusted EBITDA. Turning to dividends, consistent with our history, we paid a quarterly dividend of $12 cents per share or $4.9 million in aggregate. As a reminder, $300 million of our debt is at a fixed rate of 0.61% plus the applicable margin. The remaining $189 million total debt is subject to variable interest rates, although offset somewhat by interest income earned on short term investments.

Glenn David: Effective July 3rd, we refinanced our existing credit facilities. Our new 2020 for credit facilities have an initial aggregate principal amount of $610 million. It contains a delayed draw prohibition to allow the company to draw an additional $350 million term A loan for applying closing of the Zemegis Direct Transax. It also includes a $300 million term A loan that replaces the company's existing 2021 term A loan and 2023 incremental term loan. It also includes a $310 million Revolver replacing our existing $310 million Revolver. The new facilities extend the maturity date from our current facilities of April 2026 to maturity dates of July 2029 and July 2031.

Glenn David: Additional information regarding the terms and conditions of the 2024 credit facilities are contained in our 410K that was filed yesterday.

Glenn David: Now let's turn to slide 11, which lays our guidance for fiscal year 2025. Please note that this guidance does not include Isabella's MFA acquisition as the timing for clothes is still not final. Included in this guidance for fiscal year 2025 are early benefits related to our 5-row forward income growth initiative that will help drive additional EBITDA and margin growth. One time costs related to this initiative are also included in our gap guidance and primarily consistent one time consulting fees.

Glenn David: The initiative is focused on unlocking additional areas of revenue growth and cost savings. Area such as incremental pricing creases, expanded product offerings, procurement initiatives, and other cost savings initiatives. Please note we do not anticipate significant headcount reductions as part of this image.

Glenn David: Our guidance for fiscal year 2025 on a standalone basis is as follows. Net sales of 1 billion for you million to 1 billion 90 million dollars. This represents a growth range 2 to 7 percent and a midpoint of approximately 5 percent. Growth versus prior year is driven by continued growth in our animal health segment as well as a recovery in both our mineral nutrition and performance products. Adjust the EBITDA of 118 to 126 million dollars.

Glenn David: This represents a growth range of 6 to 13 percent and a midpoint of approximately 10 percent. Adjust the net income of 50 to 56 million dollars which represents growth of 3 to 15 percent with a midpoint of approximately 9 percent. This growth is driven by growth in EBITDA and are improving in our adjusted effective tax rate partially offset by incremental interest expense due to our new debt deal. Gap net income in EPS assumes constant currency and no gain in their losses from FX news.

Glenn David: Also included in our Gap net income in EPS of one time costs related to our five-row forward income growth initiative. As previously mentioned, this guidance does not include the petting-soetus MFA acquisition as the timing for closing remains uncertain. We hope to provide guidance on Zoetus in our Q1 earnings call in November. We remain confident in our previous estimates of an incremental 60 cents in adjusted EPS in the first 12 months of the close date and our ability to be lever post-close.

Glenn David: In closing, we're excited about the strong performance we saw in the second half of fiscal year 2024 and the momentum we're carrying into fiscal year 2025. We're confident in the demand for our products around the world and would forward to see and continue to improve in our business as we move forward. We also look forward to welcoming Zoetus MFA employees in the coming months.

Unknown Executive: With that, Julie Ann could you please open the line for questions. Thank you. At this time, I would like to remind everyone in order to ask a question, press star is in the number one on your telephone keypad. We'll pause for just a moment to compile the Q&A roster.

Michael Ryskin: Our first question comes from Michael Ryskin from Bank of America. Please go ahead to line is open. Great, thanks for taking the questions. The first glance you just went through it right there in terms of the components of the guide for 5th gear 24, but it was wondering if you could provide a little bit more color on MFA's nutritional specialty vaccines. Just what are the various drivers of each? What are the puts and takes that sum up to that over all 5% revenue, guys?

Michael Ryskin: Sure, so when you look at the performance for next year, Mike, for fiscal year 2025, we're excited about continued growth in animal health and also improvement that we expect to see in both mineral nutrition and performance products, which struggled a bit in the first half of fiscal year 2024, but saw a recovery in fiscal year 2025. Specifically, your question on animal health. Again, we see that continuing to perform well in 2025, stoke growth in our MFA business, a recovery in a nutritional specialty, and stoke growth in our vaccines for probably a little less than we saw in 2024 as we had the introduction in Brazil, particularly our IV bar product.

Michael Ryskin: Okay, okay, and then another question on 5 growth forward. You flagged a few times in the PR and the prepared remarks. Just a little bit of our color on the magnitude of the cost, efficiencies, and what are the growth drivers in particular focusing? How should we think about the timing of this being rolled out? Yeah, so I'll start a little bit and then I'll ask Donnie to comment as well. So we're in the early stages of this initiative right now.

Michael Ryskin: We do expect benefits in fiscal year 2025, but we expect those to expand as we move into fiscal year 2026 and 2027. And the initiatives go across a number of areas, as I mentioned, both revenue growth drivers, as well as cost savings initiatives that we're looking at in areas such as procurement and other areas as well. You know, we do expect that, you know, in 26 and 27, this initiative will allow us to provide EBITDA and adjusted net income growth beyond our historical levels, and as we get further into the process, we'll provide more guidance for those future years.

Michael Ryskin: And Donnie, I'll know if you want to add. Thanks, Adam. Not much to add. You know, focused on deliverable performance, focused on both, you know, recurring EBITDA as well as, you know, cash flow. So we do see some, you know, positive, we do anticipate some positives there as well this year, as well as in the future years. And, you know, as Glenn said, there's, you know, literally dozens of initiatives that, you know, some of them are very small, some of them are larger than some of the kind of, where we hope to be in a couple of years.

Michael Ryskin: Okay. And then one last and a fact that squeeze in on the, so I just, MFA deal just around the, the deal itself. Are there any regular terrorist types or antitrust requirements, which should be aware of from an HRSAR perspective? Are there any geographies where, you know, regulatory approval just walk us through that part of it? Sure. So there were two markets where we're requiring regulatory approval, Mike. One in the US, one being the US, obviously, in the one outside of the US.

Michael Ryskin: We've already cleared all the requirements for the US, so we're very excited about that. There's one additional market. We're very confident in the ability to get approval. There is just more of a timing, you know, with their existing processes. And that's what drives our expectation that we will close the deal in Q4 calendar year this year. Thank you. Great. Thanks so much. As a reminder to ask a question, please press star one.

Unknown Executive: Our next question comes from Nevin T from BNP Paraba. Please go ahead and line is open. Hi, good morning.

Unknown Executive: I thought the Zoe is deal. Can you discuss your integration plans and the integration work you have been doing before the deal closes? And then a question on refinancing, if you have completed all of it. And you have higher government headroom that you anticipated. Thank you.

Jack Bendheim: In terms of the integration plans, obviously we've been working diligently as an organization to be prepared to bring the business into Phibro and be effective when we take over the business and make sure that we could effectively support our customers. We are working with third party consultants to help us to do that as well. We're very confident our ability to take over the business on day one. And we are building additional resources internally in markets where we may not have, you know, level of presence to support the magnitude of the business that we are acquiring.

Jack Bendheim: As we mentioned, we're very excited about what that adds to us in certain areas in particular, particularly the expansion that provides to us in China as well as the expansion in the USB market related to the refinancing we are done with the refinancing as I mentioned in the prepare remarks. It does also provide for an additional delayed draw loan on the closing of this wetest acquisition of $350 million to help us finance that acquisition so that is pending the deal close. Thank you. There are no further questions at this time.

Glenn David: I would like to turn the call back over to Glenn David for any closing remarks. Now, we thank you all for your interest in Phibro and my help and we appreciate the questions and hope everybody has a great day. Thank you.

Unknown Executive: This concludes today's conference call. You may not disconnect.

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