Phibro Animal Health Corporation (NASDAQ:PAHC) Q1 2024 Earnings Call Transcript

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Operator: Your next question will come from the line of Erin Wright with Morgan Stanley. Please go ahead.

Linda Bolduc: Hi, thank you. This is Linda Bolduc on for Erin Wright. So we have two questions. Can you speak to the dynamics you’re seeing across the core MAF business and how are you thinking about the dynamics for the balance of this year?

Jack C. Bendheim: Just can you repeat the first question?

Linda Bolduc: Yes, yes. Can you please speak to the dynamic [Technical Difficulty] business and how are you thinking about that dynamics for the balance of the year there?

Jack C. Bendheim: Sorry, you cut out on the — your question is something about the dynamics of the MFA sector and what was the rest of the question?

Linda Bolduc: And how you’re thinking about dynamics for the balance of this year?

Jack C. Bendheim: So the MFA business, which translates to mean medically feed additives, is a very, very big category. In other words, any product that is — that has registrations is — comes into that category. And it’s — we don’t know exactly. I would say, worldwide, it’s a $3 billion to $4 billion business and shared by a few producers and a few generic producers, and it’s a very strong business. It’s the most efficient way to get products into the animal, whether it’s a chicken, a pig or a cow. And we’ve seen, depending on disease pressures, but we’ve seen that to be always a steady business. And we see that growing in line with what we’ve always talked about, population and economic growth. That’s been our history with this product, and that’s how we see it going forward.

Linda Bolduc: Thank you. That’s helpful. And one quick follow-up, on Performance Products, can you remind us of any key drivers there in your overall commitment to that business?

Richard G. Johnson: Our key products are there’s a couple of smaller segments within — or kind of businesses within that segment. One of the important categories is we represent end-market ingredients for personal care products. So importantly, some ingredients for — that would sell to toothpaste manufacturers, ingredients that go into shampoos, other products like that. And then our — the second piece of that business is copper-based products, where that’s a legacy business that Phibro has had for a long time. We have said that the business is opportunistic, it’s not core. It’s a relatively small part of the company. It’s cash flow positive. It’s not something that is terribly distracting. So up until this point, we’ve retained the business.

Linda Bolduc: Thank you.

Operator: With that, I’ll hand the call back to Dick Johnson for any closing remarks.

Richard G. Johnson: Well, it’s nice to be back on the phone with folks and enjoyed the Q&A this morning. We thank you for your time and your interest in Phibro, and we’ll talk to you again on our next earnings call. So everybody, have a nice day, and hope you’re doing well. Take care. Bye now.

Operator: That will conclude today’s call, and we thank you all for joining. You may now disconnect.

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