Phibro(US:PAHC)2025-05-08 14:02Financial Data and Key Metrics Changes - Total sales increased by 32% year over year, reaching $347.8 million for the quarter ended March 31, 2025 [12] - Adjusted EBITDA rose by 85%, reflecting strong operational performance [7][12] - Adjusted diluted EPS more than doubled compared to the previous year [7] Business Segment Data and Key Metrics Changes - The Animal Health segment led with a 42% revenue growth, totaling $258.4 million [12][14] - Nutritional Specialties achieved 8% revenue growth, while Performance Products saw a significant increase of 28% [9][12] - Newly integrated MSA and other products within Animal Health experienced a 68% increase in sales [8][14] Market Data and Key Metrics Changes - 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 [10] - The overall performance in international markets was stable, with limited impact from foreign exchange fluctuations [44] Company Strategy and Development Direction - The "Fiber Forward" strategy focuses on disciplined operations and continuous improvement, contributing to current performance [9][10] - The company is making targeted investments in procurement and supply chain resilience to manage potential disruptions [10][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating external challenges, including tariffs, without significant impact on financial results for the remainder of fiscal year 2025 [10][22] - The updated guidance reflects solid execution and continued momentum, with net sales expected between $1.26 billion and $1.29 billion [11][20] Other Important Information - The company generated $49 million of positive free cash flow for the twelve months ended March 31, 2025 [17] - Cash and cash equivalents were $70 million at the end of the quarter [17] Q&A Session Summary Question: Can you elaborate on the company's exposure to upcoming pharma tariffs? - Management indicated that most manufacturing is done in the U.S., with some inputs sourced from other markets, and they have implemented measures to mitigate tariff impacts [25][27] Question: What drove the slower growth in the Medicaid fee added business? - The decline was attributed to the timing of orders from larger customers, with overall year-to-date growth remaining positive [28][29] Question: What factors are driving the increase in guidance for EBITDA and EPS? - The increase is driven by a favorable mix, strong vaccine performance, and contributions from the Zoetis MFA portfolio [32][35] 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 [38] 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 food pricing [42] Question: What was the FX impact for the quarter? - Limited impact was noted, with efforts to transact in U.S. dollars to minimize foreign exchange effects [44]