Good morning. My name is Chris and I'll be your conference operator today. At this time, I would like to welcome everyone to the Phibro 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 a question-and-answer session. [Operator Instructions]. Thank you. Damian Finio, Chief Financial Officer, you may begin.

Thank you, Chris and good morning, and welcome to the Phibro Animal Health Corporation earnings call for our fourth quarter and year ended June 30, 2022. My name is Damian Finio, and I am the Chief Financial Officer of Phibro. I'm joined on today's call by Jack Bendheim, Phibro's Chairman, President and Chief Executive Officer; and Donny Bendheim, 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 Investors section of our website, you will find copies of the earnings press release and Annual Report on Form 10-Q 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 statements 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, nonoperational, or nonrecurring items, including stock-based compensation and restructuring costs; other income and expense are separately reported in the consolidated statement of operations, including foreign currency gains and losses net. And lastly, income tax effects related to pretax adjustments and unusual or nonrecurring income tax items. Now let me introduce our Chairman, President, and Chief Executive Officer, Jack Bendheim, 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 lingered, which has helped a few 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 Phibro 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 manages 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 Phibro continues to act in other ways as well. Internally, we are addressing the impact of high input costs head on by identifying production efficiencies requiring investments in 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 million 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 in canines. Back in June, we announced this opportunity to the market highlighting a collaboration for the development and commercialization of our gene therapy with our partner Rejuvenate Bio. They expect to file for a 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 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.

Thank you, Jack. Let me start with our consolidated financial performance for the fourth quarter ended June 30, 2022 versus the same quarter one year ago. On a consolidated basis fourth quarter net sales increased $35 million to 16% driven by growth in all three of our business segments, namely Animal Health, Mineral Nutrition, and Performance Products. GAAP based net income and diluted EPS both declined 56% versus the same quarter a year ago. The decreases were driven primarily by increased foreign currency losses of $8.3 million and a $5.9 million increase in provision for income taxes, also partially by 3.7 million more in operating income and 0.8 million less interest expense. After making adjustments to our GAAP results, which include acquisition related adjustments, foreign currency movements and one off, fourth quarter adjusted EBITDA, adjusted net income, and adjusted diluted EPS were up 17%, 13%, and 13% respectively, driven by higher Animal Health revenue and gross profits as well as stronger Mineral Nutrition gross profit, partially offset by increased selling, general, and administrative expenses. On Slide 6, looking at the same financial metrics, but now for the full year on a consolidated basis, our full year financial performance improved over the prior year. Net sales increased $109 million or 13% driven again by growth across all three business segments, Animal Health, Mineral Nutrition, and Performance Products. GAAP based net income and diluted EPS for the full year declined 10% versus the prior year driven by increases in the provision for income taxes and selling and general administrative expenses offset by improved operating profits less interest expense and foreign currency gains. After adjusting GAAP results for one off acquisition related items and foreign currency movements, adjusted EBITDA improved 3% driven by sales and gross profit growth, offset by an increase in…

[Operator Instructions]. Our first question is from Mike Ryskin with Bank of America. Your line is open.

Hi, good morning. This is John Kim on for Mike. I wanted to ask on the Rejensa. Could you give us a bit more color on how things have trended compared to your expectation of doubling sales in 2022 in the current inflationary environment? And could you -- if you could update us on what your high-level outlook is for 2023 and long term, that would be great?

Hey John, this is Donny. Thanks for the question. So last year, Rejensa, as we guided towards doubling sales year-over-year and we achieved that. Embedded in this year's guidance is that we're looking to double sales again. So I do think that we have seen a little bit of slowness at the vet that I think other companies have reported as well. Rejensa has the advantage, I guess, still being in early innings. So despite the fact that there might be a little bit a macro slowdown, there's plenty of opportunity for us and we are seeing our momentum continue to build, and we feel pretty good about that number for the year.

Great. And on the African swine fever, do you have any expectations or what are your expectations for fiscal 2023 on that in China?

Well, as you know from everything you follow African swine fever has not been solved. The Chinese have done a much better job in biosecurity. But the problem exists both in China and the Far East, and interestingly seeing it more and more in Europe in some of the wild pigs that are being caught. But the potential of outbreaks are there all over the place. And so far, there has not been a vaccine at all. So we're continuing on developing a raw vaccine. It's been difficult. I think as we said before, to get our people into China I would say, not as difficult and impossible because of the COVID restrictions. So it slowed down our development, but we continue to remain optimistic that we have a solution to the problem, and as we continue to develop.

Thank you, appreciate that.

[Operator Instructions]. The next question is from Erin Wright with Morgan Stanley. Your line is open.

Hi everybody, this is Justin Wang on for Erin. Thanks for the questions. We were wondering if you can go over the underlying livestock market trends across the varying geographies, especially for the U.S. for the Animal Health business, and what you're seeing there? And I have a follow-up.

That's a short question but it requires hours of answers. Overall, what we're seeing around the world is a strong livestock business. I mean, as you know, from what you're reading, prices are up across the board in sort of every market and the consumers continue to pay the prices. So we're not seeing a slowdown, and that's reflected in our sales. Again, across the world, across the markets we're in. Meaning there are unusual factors that you have to add to this thing, which is an increasing drought in the United States. So on the cattle side, there is an increase in slaughter. There's less animals raised on grass, and more on feedlots. As you can understand, the nature of all of our businesses, the more on feedlots, the better it is. But that might come to an end six months or a year from now. But you can tell and again, it's a global business. So what we see reflected in the U.S. might be reflected in a different way down in Brazil. So as I say, based on what we're seeing in our sales and the markets we're in, business for the Animal Health industry continues to be good.

Okay. That's helpful, thank you. And just on the guidance here, what is your guide currently assume in terms of price realizations for the year? And we were wondering if you could speak a little bit more on the incremental investments that you're making for the year, and what that entails? Thanks.

Alright. Thanks for the question, Justin. So I can take that one. So in terms of our guidance, as I mentioned, sales, 2% to 6% growth next year. It's really two parts to that, continued strong demand across all segments and regions, and then the annualization of the fiscal year 2022. Price increases, will see a full year of that in 2023. If you remember, last year we spoke, I think it was the second quarter -- it was the first quarter earnings call, we said that we took pricing action lags, the cost increases. So we expected most of that in the second half of fiscal year 2022, which ended up being true. Our margins going forward in fiscal year 2023 are consistent with what we realized in the actual numbers in fiscal year 2022. So if you think about that, that implies that the price increases that we've taken and the annualization of those in fiscal year 2023, we're keeping up with the cost increases. In terms of the strategic investments that you mentioned, again, some of those will continue to be reported in the content or in the corporate business segment. The investments are -- there's a pretty good spread across different types of projects. So I would say it's a diverse portfolio. Most of the concentration is in our three growth drivers for fiscal year 2023 in the medium term, which is vaccines, companion animals, and nutritional specialties.

Thank you very much. Appreciate that.

We have no further questions at this time. I'll turn it over to Mr. Finio for any closing remarks.

Alright. Thank you, Chris, and I want to reiterate to what Jack said to start the call, which is a thank you again to our employees for enabling Phibro to achieve such strong financial performance in fiscal year 2022. We appreciate you taking the time today to join our call, and for your continued interest in Phibro Animal Health Corporation. On behalf of Jack, Donny, the rest of the executive management team, we are excited about the opportunities that fiscal year 2023 presents and the investments that we're making in our future. We hope you enjoy these last days of summer. Thanks again, and have a great rest of your day.

Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.