Phibro Animal Health Corporation

Good morning. My name is Chris and I'll be your conference operator today. At this time, I'd like to welcome everyone to the Fibro Animal Health Corporation Q4 2022 conference call. 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, then the number one on your telephone keypad. To withdraw your question, please press star one again. Thank you. Damian Finio, Chief Financial Officer, you may begin.

Thank you, Chris, and good morning, and welcome to the Fibro Animal Health Corporation earnings call for our fourth quarter and year-end of June 30th, 2022. My name is Damian Finio, and I am the Chief Financial Officer of Fibro. I'm joined on today's call by Jack Benheim, Fibro's Chairman, President, and Chief Executive Officer, and Donnie Benheim, Director and Executive Vice President of Corporate Strategy. On today's call, we will cover financial performance for the fourth quarter and our full fiscal year ending June 30, 2022, and provide financial guidance for our fiscal year ending June 30, 2023. At the conclusion of our opening remarks, we will open the lines for questions. I'd like to remind you that we are providing a simultaneous webcast of this call on our website, www.pahc.com. Also, on the investor section of our website, you will find copies of the earnings press release and annual report on the Form 10-K filed with the SEC yesterday, as well as the transcript and slides presented on this call. 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 or 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 U.S. GAAP measures are included in the financial tables that accompany the earnings press release. We present our results on a GAAP basis and on an adjusted basis. Our adjusted results exclude acquisition-related items, unusual non-operational or non-recurring items, including stock-based compensation and restructuring costs. Other income expenses separately reported in the consolidated statements of operations, including foreign currency gains and losses next. And lastly, income tax effects related to pre-tax adjustments and unusual or non-recurring income tax items. Now, let me introduce our chairman, president, and chief executive officer, Jack Benheim, to share his opening remarks, which will include his perspective on the fourth quarter, full-year financial performance, and guidance for our fiscal year 2023. Jack.

Thank you, Damian, and hello, everyone. I am pleased to share that our fourth quarter and full-year performance reflected top and bottom line growth on an adjusted basis versus the respective prior periods. Net sales for the quarter were up 16% versus a year ago. Our full-year sales were up 13%. What's most impressive is that each of our three business segments posted double-digit year-over-year percentage growth, reflecting strong demand for our product portfolio. and adjusted EBITDA for the quarter was up 17%, while full-year adjusted EBITDA was up 3%. Despite our strong financial results, our industry faces macroeconomic and operational challenges. The consequences of COVID-19 still linger, which has helped to fuel global macroeconomic headwinds leading to significant inflation. For our customers, this translates into higher feed, energy, and fertilizer prices, which in turn drives higher food prices for consumers. At Fibro, this means higher raw material and labor costs, which puts pressure on our margins despite increasing prices. We continue to work through supply challenges and labor shortages. Overall, the company managed well through another challenging year, and our strong performance reflects the efforts of our loyal employees. In response to higher input costs, we raised prices, but Fibro continues to act in other ways as well. Internally, we are addressing the impact of higher input costs head on by identifying production efficiencies requiring investments and capital improvements. We will continue to drive efficiencies within our business by working collaboratively across business segments and geographic regions, leveraging our economies of scale where possible. As we look ahead, we are anticipating further year-over-year top and bottom line growth on an adjusted basis in fiscal 2023. with net sales projected to be in the range of $960 million to $1 billion, and adjusted EBITDA projections in the range of $113 to $118 million, reflecting 2% to 6% growth in both key financial metrics. In the face of these challenges, it's important that we continue to keep our eye on the future. I'm excited that in addition to our existing projects, our Companion Animal Development Pipeline now includes a gene therapy opportunity targeting MVD and canines. Back in June, we announced this opportunity to the market, highlighting a collaboration for the development and commercialization with gene therapy with our partner, Rejuvenate Bio. They expect to file for conditional approval as early as calendar year 2023. We're looking forward to progressing these projects and the prospects they add to our medium-term outlook. Overall, it was another challenging year, but we posted a solid fourth quarter and a full fiscal year of strong financial performance. With that, I will ask Damian to go through our actual results and projections in more detail before opening the line for questions. Damian.