Financial Performance and Key Metrics - Total sales increased by 32% year over year, reaching $347.8 million, with adjusted EBITDA rising by 85% and adjusted diluted EPS more than doubling [6][11][10] - GAAP net income and diluted EPS saw significant increases, driven by the integration of the new MFA business and improved gross margins [11][12] - Adjusted EBITDA for the third quarter increased by $25.2 million, reflecting strong sales growth and improved operating leverage [12][10] Business Segment Performance - The Animal Health segment led with a 42% revenue growth, contributing $258.4 million in net sales [12][11] - Newly integrated MSA and other products within Animal Health saw a 68% increase in sales, while legacy MSA and other products declined by 3% [7][13] - Nutritional Specialties maintained an 8% revenue growth, while Performance Products posted a remarkable 28% increase [7][15] Market Data and Key Indicators - The company anticipates some pressure on certain inputs and markets in the range of $5 million to $10 million due to tariffs in fiscal year 2026, but believes it is well-positioned to manage these impacts [9][21] - The overall performance reflects strong execution and operational excellence, which are central themes of the company's Fiber Forward strategy [7][8] Company Strategy and Industry Competition - The Fiber Forward strategy emphasizes disciplined operations and continuous improvement, contributing to the company's performance and ability to navigate external challenges [8][9] - The company is focused on unlocking additional areas of revenue growth and cost savings through various initiatives, including potential price increases and expanded product offerings [19][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in delivering strong income growth in fiscal year 2026, driven by continued strong performance in the legacy business and a full year of revenue contribution from the Zoetis MFA portfolio [21][10] - The company does not expect any material impact from the evolving tariff environment on its financial results for the remainder of fiscal year 2025 [9][21] Other Important Information - The company generated $49 million of positive free cash flow for the twelve months ended March 31, 2025, with cash and cash equivalents totaling $70 million at the end of the quarter [16][17] - The gross leverage ratio was 3.0x, and the net leverage ratio was 2.7x at the end of the third quarter [17] Q&A Session Summary Question: Can you elaborate on the company's exposure to upcoming pharma tariffs and potential mitigation strategies? - Management indicated that most manufacturing is done in the U.S., with some inputs sourced from other markets. They have built inventory, switched suppliers, and announced price increases to mitigate tariff impacts [23][26] Question: What drove the slower growth in the Medicaid fee added business? - The slower growth was attributed to the timing of orders from larger customers and a difficult comparative quarter from the previous year, but overall demand remains strong [27][28] Question: What factors are driving the increase in guidance for EBITDA and EPS? - The increase is driven by a favorable mix, strong performance in the vaccine portfolio, and improved margins from the Zoetis MFA portfolio [32][33] Question: Can you provide more details on the specific products affected by tariffs? - The impact is primarily from inputs subject to general tariffs rather than specific products from China, with ongoing efforts to manage costs and supplier negotiations [36][37] Question: Is the company lobbying for exceptions from potential pharma tariffs? - Management confirmed involvement in lobbying efforts for exceptions, emphasizing the importance of these products in the food supply chain [40][41]

Core Viewpoint - Phibro Animal Health (PAHC) reported strong adjusted earnings per share (EPS) for Q3 fiscal 2025, significantly exceeding the previous year's performance, although revenue slightly missed expectations [1][2][10]. Financial Performance - Adjusted EPS for Q3 was 63 cents, up from 31 cents year-over-year, beating the Zacks Consensus Estimate by 21.1% [1] - GAAP EPS was 51 cents compared to 21 cents in the prior-year period [1] - Net sales reached $347.8 million, a 23.8% increase from the previous year, but fell short of the Zacks Consensus Estimate by 0.7% [2] Segment Performance - Animal Health segment net sales increased by 42% to $258.4 million, although it was below the projected $262.2 million [3] - Medicated feed additives (MFAs) and other products saw a 68% year-over-year growth, contributing $77 million from the Zoetis MFA portfolio acquisition [4] - Mineral Nutrition segment sales rose 4% to $66.8 million, while Performance Products segment sales increased by 28% to $22.7 million, surpassing projections [5] Margin Analysis - Gross profit for Q3 increased by 31.3% to $104.5 million, with a gross margin of 30.1%, down 20 basis points year-over-year [6] - Operating profit rose 67.8% to $33.4 million, with an operating margin expansion of 204 basis points to 9.6% [6] Cash Position - At the end of Q3, the company had cash and short-term investments of $70.4 million, up from $67.1 million at the end of Q2 [7] - Cumulative net cash from operating activities was $58.9 million, slightly down from $59.2 million year-over-year [7] Guidance Update - For fiscal 2025, PAHC expects net sales between $1.26 billion and $1.29 billion, indicating a 25% growth, with adjusted EPS projected between $1.96 and $2.09 [9] - The revised guidance reflects a 70% improvement compared to earlier projections [9] Overall Assessment - The company achieved an earnings beat but a revenue miss in Q3, with strong growth driven by the Animal Health segment and successful integration of the Zoetis MFA business [10] - The outlook for fiscal 2025 remains positive despite some margin contraction and challenges in product sales timing [10][11]

Core Insights - Phibro Animal Health (PAHC) reported a revenue of $347.8 million for the quarter ended March 2025, marking a year-over-year increase of 32.1% and an EPS of $0.63 compared to $0.31 a year ago [1] - The revenue fell short of the Zacks Consensus Estimate of $350.54 million by 0.78%, while the EPS exceeded the consensus estimate of $0.52 by 21.15% [1] Financial Performance - The company’s net sales by region showed varied performance: - United States: $209.94 million, a 31.8% increase year-over-year, but below the estimated $221.68 million [4] - Asia Pacific: $28.22 million, a significant 65.2% increase year-over-year, exceeding the estimate of $23.44 million [4] - Europe, Middle East and Africa: $38.91 million, a 17.3% increase year-over-year, below the estimate of $48.03 million [4] - Latin America and Canada: $70.75 million, a 31.9% increase year-over-year, surpassing the estimate of $55.39 million [4] Segment Performance - Animal Health segment reported net sales of $258.40 million, a 42.5% increase year-over-year, but below the estimate of $265.65 million [4] - Mineral Nutrition segment reported net sales of $66.80 million, a 4% increase year-over-year, slightly below the estimate of $66.88 million [4] - Animal Health Vaccines reported net sales of $33.40 million, a 1.5% increase year-over-year, below the estimate of $38.78 million [4] - Animal Health MFAs and other reported net sales of $181.60 million, a substantial 67.8% increase year-over-year, exceeding the estimate of $155.57 million [4] - Performance Products reported net sales of $22.70 million, a 28.5% increase year-over-year, surpassing the estimate of $18.01 million [4] EBITDA Performance - Adjusted EBITDA for the Animal Health segment was $63.10 million, above the average estimate of $60.59 million [4] - Adjusted EBITDA for the Corporate segment was -$17.30 million, better than the estimated -$19.57 million [4] Stock Performance - Phibro's shares have returned +6.5% over the past month, compared to the Zacks S&P 500 composite's +10.6% change, with a current Zacks Rank of 3 (Hold) indicating potential performance in line with the broader market [3]

Core Viewpoint - Phibro Animal Health (PAHC) reported quarterly earnings of $0.63 per share, exceeding the Zacks Consensus Estimate of $0.52 per share, and showing significant growth from $0.31 per share a year ago [1][2]. Financial Performance - The earnings surprise for the quarter was 21.15%, with the company previously expected to earn $0.42 per share but actually earning $0.54, resulting in a surprise of 28.57% [2]. - Phibro's revenues for the quarter were $347.8 million, slightly missing the Zacks Consensus Estimate by 0.78%, compared to $263.2 million in the same quarter last year [3]. - Over the last four quarters, the company has surpassed consensus EPS estimates four times and topped revenue estimates twice [2][3]. Stock Performance - Phibro shares have declined approximately 9.3% since the beginning of the year, while the S&P 500 has decreased by 4.7% [4]. - The current Zacks Rank for Phibro is 3 (Hold), indicating that the shares are expected to perform in line with the market in the near future [7]. Future Outlook - The consensus EPS estimate for the upcoming quarter is $0.53, with expected revenues of $355.98 million, and for the current fiscal year, the estimate is $1.94 on $1.28 billion in revenues [8]. - The outlook for the Medical - Products industry, to which Phibro belongs, is currently in the bottom 28% of over 250 Zacks industries, which may impact stock performance [9].

Financial Performance - Net sales for the third quarter were $347.8 million, an increase of $84.6 million, or 32% year-over-year[3] - Adjusted EBITDA reached $54.9 million, an increase of $25.2 million, or 85% compared to the same quarter last year[18] - Net income for the quarter was $20.9 million, up $12.5 million from $8.4 million in the prior year[17] - The company reported a gross profit of $104.6 million, an increase of $25.0 million, or 31% year-over-year[9] - Operating income increased by 68% to $33.5 million for the three months ended March 31, 2025, up from $19.9 million in the same period of 2024[34] - Adjusted net income for the nine months ended March 31, 2025, reached $61.7 million, up $30.0 million (95%) from $31.7 million in the prior year[41] Segment Performance - Animal Health segment sales increased by 42% to $258.4 million, with MFA & Other product sales up 68% due to the acquisition of the Zoetis MFA portfolio[5] - The Animal Health segment reported net sales of $258.4 million for the three months ended March 31, 2025, a 42% increase from $181.3 million in the prior year[37] Guidance and Projections - The company updated its fiscal year 2025 guidance, projecting net sales between $1.26 billion and $1.29 billion, representing a 25% growth[25] Earnings and Expenses - Adjusted diluted earnings per share for the quarter were $0.63, an increase of $0.32 compared to the prior year[21] - Selling, general and administrative expenses increased by $11.4 million, or 19%, primarily due to costs associated with Phibro Forward initiatives and increased headcount from the acquisition[11] - Adjusted selling, general and administrative expenses for the three months ended March 31, 2025, were $67.2 million, a 15% increase from $58.5 million in the prior year[41] Tax and Interest - The effective income tax rate for the quarter was 29.7%, down from 35.0% in the prior year, primarily due to higher pretax earnings[15] - The effective tax rate decreased to 29.7% for the three months ended March 31, 2025, down from 35.0% in the same period of 2024[34] - Interest expense increased to $9.4 million for the three months ended March 31, 2025, compared to $4.6 million in the prior year, reflecting an increase of 104%[34] - The adjusted effective tax rate for the three months ended March 31, 2025, was 25.7%, down from 30.8% in the same period of 2024[42] Cash Flow and Currency - Free cash flow for the twelve months ended March 31, 2025, was $49.1 million[25] - The company reported a 60% decrease in foreign currency losses, with net losses of $5.5 million for the three months ended March 31, 2025, compared to gains of $2.4 million in the same period of 2024[34] - Foreign currency losses for the three months ended March 31, 2025, were $(5.5) million, a decrease of $7.9 million compared to a gain of $2.4 million in the same period of 2024[41] Strategic Initiatives - The company is focused on the Phibro Forward initiative, which aims to unlock additional revenue growth and cost savings, including $5.3 million for non-cash asset write-offs related to the closure of an immaterial business[39] Adjusted Metrics - Adjusted gross profit for the three months ended March 31, 2025, was $111.2 million, reflecting a 36% increase from $81.5 million in the same period of 2024[41] - Adjusted income before income taxes for the three months ended March 31, 2025, was $34.6 million, an increase of $16.2 million (88%) compared to $18.4 million in the same period of 2024[41] - Adjusted cost of goods sold for the three months ended March 31, 2025, was $236.6 million, a 30% increase from $181.7 million in the same period of 2024[41] - Adjusted net income per share diluted for the three months ended March 31, 2025, was $0.63, up $0.32 (103%) from $0.31 in the same period of 2024[41] Acquisition Costs - The company reported a significant increase in acquisition-related costs, with transaction costs rising to $12.9 million for the nine months ended March 31, 2025, compared to $0.5 million in the prior year[41]

Financial Performance - Net sales for the three months ended March 31, 2025, were $347.8 million, a 32% increase from $263.2 million in the same period of 2024[120] - Gross profit for the three months ended March 31, 2025, was $104.6 million, reflecting a 31% increase compared to $79.6 million in the prior year[120] - Operating income for the three months ended March 31, 2025, was $33.5 million, a 68% increase from $19.9 million in the same period of 2024[120] - Net income for the three months ended March 31, 2025, was $20.9 million, compared to $8.4 million in the same period of 2024, marking a significant increase[120] - Adjusted EBITDA for the three months ended March 31, 2025, was $54.9 million, an increase of $25.2 million or 85% compared to the same period in 2024[123] - Net sales for the nine months ended March 31, 2025, were $917.5 million, an increase of $173.0 million or 23% compared to the same period in 2024[141] - Net income for the nine months ended March 31, 2025, was $31.0 million, compared to $1.7 million for the same period in 2024[154] - Adjusted net income for the nine months ended March 31, 2025, was $61.7 million, a 95% increase from $31.7 million in 2024[156] - Adjusted diluted earnings per share (EPS) for the nine months ended March 31, 2025, was $1.52, up 95% from $0.78 in 2024[158] Expenses and Costs - Selling, general and administrative expenses (SG&A) for the three months ended March 31, 2025, were $71.1 million, an increase of $11.4 million or 19% compared to the same period in 2024[134] - Selling, general and administrative expenses (SG&A) totaled $213.2 million, an increase of $22.1 million, or 12%[148] - Interest expense for the three months ended March 31, 2025, was $9.4 million, an increase of 88% from $4.6 million in the same period of 2024[120] - Interest expense, net increased to $26.0 million, up $12.2 million, or 88%, due to higher debt levels from financing acquisitions[150] Taxation - The effective tax rate for the three months ended March 31, 2025, was 29.7%, down from 35.0% in the same period of 2024[120] - The effective income tax rate for the nine months ended March 31, 2025, was 29.7%, down from 63.1% in 2024, primarily due to higher pretax earnings[152] Acquisitions and Investments - The company completed the acquisition of Zoetis's medicated feed additive portfolio for approximately $302.9 million, which generated $407.6 million in revenue in 2023[108] - Animal Health segment net sales increased by $77.0 million or 42%, driven by $73.4 million from the Zoetis MFA portfolio acquired on October 31, 2024[127] - Investing activities used $281.7 million in net cash, primarily due to the acquisition purchase price of $291.9 million and capital expenditures of $25.2 million[161] Cash Flow and Liquidity - For the nine months ended March 31, 2025, operating activities provided $58.9 million in net cash, with net income adjusted for non-cash items totaling $66.2 million[160] - Financing activities generated $214.9 million in net cash, reflecting $300.0 million from debt refinancing and $350.0 million from term loan borrowings for the acquisition[162] - As of March 31, 2025, cash and cash equivalents and short-term investments totaled $70.4 million, with working capital at $455.4 million and a current assets to current liabilities ratio of 2.82:1[164] - The company expects adequate liquidity for at least the next twelve months, considering macroeconomic conditions and potential risks[163] Risks and Forward-Looking Statements - Forward-looking statements indicate potential risks including competition, regulatory actions, and economic conditions that may impact future performance[179] - The company faces risks related to product approval, R&D, acquisition, and licensing efforts that may not generate new products[183] - The company is dependent on its Israeli and Brazilian operations, which may impact overall performance[183] - The company has a substantial level of indebtedness and related debt-service obligations that could affect financial stability[183] - The company utilizes foreign currency contracts and interest rate swaps to hedge exposure to market risks, but does not eliminate the effects of changing market conditions[184] - As of the report date, there were no material changes in the company's financial market risks from those disclosed in the Annual Report[185] Dividends - The company declared a cash dividend of $0.12 per share on Class A and Class B common stock, payable on June 25, 2025[165]

Investors interested in stocks from the Medical - Products sector have probably already heard of Phibro Animal Health (PAHC) and Boston Scientific (BSX) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The Zacks Rank is a proven strategy that t ...

Core Viewpoint - Phibro Animal Health (PAHC) has experienced significant selling pressure, resulting in a 22.3% decline in stock price over the past four weeks, but analysts anticipate better earnings than previously expected, indicating potential for recovery [1]. Group 1: Technical Indicators - The Relative Strength Index (RSI) for PAHC is currently at 27.99, suggesting that the stock is oversold and may be nearing a price reversal due to exhausted selling pressure [5]. - RSI is a momentum oscillator that ranges from 0 to 100, with readings below 30 typically indicating that a stock is oversold [2][3]. Group 2: Fundamental Indicators - There is a consensus among sell-side analysts that earnings estimates for PAHC have increased by 0.1% over the last 30 days, which often correlates with price appreciation in the near term [7]. - PAHC holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises, further supporting the potential for a turnaround [8].

Phibro Animal Health (PAHC) has been on a downward spiral lately with significant selling pressure. After declining 13.5% over the past four weeks, the stock looks well positioned for a trend reversal as it is now in oversold territory and there is strong agreement among Wall Street analysts that the company will report better earnings than they predicted earlier.How to Determine if a Stock is OversoldWe use Relative Strength Index (RSI), one of the most commonly used technical indicators, for spotting whet ...

Industry Overview - The MedTech sector has emerged as a resilient investment option amid macroeconomic challenges, characterized by innovation and a rising demand for personalized healthcare solutions [6][8] - The global MedTech industry market is projected to grow to $694.70 billion by 2025, with an estimated year-over-year increase of approximately 4% [8] Market Dynamics - The medical device industry has historically been a reliable refuge during turbulent market periods, with investors currently prioritizing long-term stability over short-term gains [4] - Innovations in artificial intelligence, robotics, and minimally invasive techniques are expected to revolutionize healthcare services, increasing the demand for advanced medical equipment and diagnostic instruments [8] Company Highlights - **Fresenius Medical Care AG (FMS)**: A leading provider of products and services for dialysis patients, recently launched the NxStage Versi HD home dialysis machine, with over 14,000 U.S. patients using its system [10][11] - FMS has a Zacks Rank of 1 and a Value Score of A, with a P/E ratio of 11.36X, below the industry average of 23.48X, and is expected to see a 27.1% growth in earnings by 2025 [12] - **Phibro Animal Health (PAHC)**: A global diversified animal health company that recently acquired Zoetis Inc.'s product portfolio, enhancing its profitability and EBITDA margin [14][15] - PAHC holds a Zacks Rank of 1 and a Value Score of B, with a P/E of 9.88X, below the industry average of 15.56X, and is projected to achieve 63% growth in earnings by 2025 [16] - **Cencora, Inc. (COR)**: A major pharmaceutical services company that launched Accelerate Pharmacy Solutions and is expanding its leadership in specialty products through strategic acquisitions [17][18] - COR has a Zacks Rank of 2 and a Value Score of B, with a P/S ratio of 0.18X, significantly lower than the industry average of 1.29X, and is expected to see an 11.6% growth in earnings by 2025 [19]