Hello and thank you for standing by. My name is Regina, and I will be your conference operator today. At this time, I would like to welcome everyone to the Phibro Animal Health Corporation First Quarter 2023 Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks there will be a question-and-answer session. [Operator Instructions] I would now like to turn the conference over to Damian Finio, Chief Financial Officer. Please go ahead.

Thank you, Regina. Good morning. And welcome to the Phibro Animal Health Corporation earnings call for our fiscal first quarter ended September 30, 2022. My name is Damian Finio, and I am the Chief Financial Officer of Phibro Animal Health Corporation. I am joined on today’s call by Jack Bendheim, Phibro’s Chairman, President and Chief Executive Officer; and Daniel Bendheim, Director and Executive Vice President of Corporate Strategy. Today, we will cover financial performance for our first quarter and provide an update on 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, pahc.com. Also on the Investors section of our website, you will find copies of the earnings press release and first quarter Form 10-Q filed with the SEC yesterday, as well as the transcript and slides discussed and 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, non-operational or non-recurring items, including stock-based compensation and restructuring costs. Other income expense is separately reported in the consolidated statements of operations, including foreign currency gains, losses net. And lastly, income tax effects related to pre-tax 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 Phibro’s first quarter financial performance and guidance for our fiscal year 2023. Jack?

Thank you, Damian, and good morning, everyone. Our first quarter net sales reflect year-over-year growth of 8% driven by 10% sales growth in both our Animal Health and Mineral Nutrition segments, underpinned by strong growth in our largest regions in the United States, Latin America and Canada. Our business is strong, but macroeconomic and operational challenges persist. Supply chain disruptions are less common but still occur. As we previously discussed, we have experienced COVID-related labor and logistical challenges with a key supplier, which internally led to delayed sales and costlier shipments. We were successfully resolving these challenges before quarter end, although not before they had an unfavorable impact on the adjusted EBITDA contributed by our Animal Health segment. In addition, sustained inflation is keeping our input cost high, which presents itself in our financial results as lower margins and higher inventory carrying values. To mitigate the risks these challenges present, we will continue raising prices subject to normal competitive conditions, managing discretionary spending and carrying inventory required to support sales growth. We are overall bullish on our business and our ability to grow sales with both our current portfolio and the pipeline we are developing. Looking beyond these challenges, we are anticipating further benefits from our strategic investments. Our vaccines and nutritional specialties product line fuel current growth with our vaccines new registrations, which will open new markets for our products. And in the second half of our fiscal year, we expect to bring another [inaudible] vaccine facility online in Brazil similar to our facility we have today in Omaha, Nebraska. With our nutritional specialty products, we are just received approval in Brazil to manufacture some of the products we have historically produced only at our Osprey plant in Florida, which allows us to leverage our production capabilities more fully at both locations. Lastly, on companion animals, we have licensed a pain product for dogs that’s in development. While our companion animal projects continue to progress as plan, at this point, with active and net opportunities in the pipeline, we reached our goal of having a meaningful portfolio of companion animal development projects. Finally, we are reiterating our full year 2023 net sales guidance of $960 million to $1 billion with adjusted EBITDA guidance of $113 million to $118 million. However, due to revise in interest rates and total debt, as well as unfavorable changes in tax regulations, we are revising guidance on net income, diluted EPS, adjusted net income, adjusted diluted EPS and the adjusted effective tax rate. As I am sure you are aware, everyone is navigating through a dynamic and complex operating environment and we are facing an economic period that many suspect will more than likely worsen before it improves. Despite these short-term uncertainties, we as I said, we remain bullish on our business and our ability to drive profitable growth. Now I will ask Damian to review our financial performances and fiscal year 2023 guidance in more detail before opening the line for questions. Damian?

Thank you, Jack. And let’s go to slide four. I will start with consolidated financial performance and then cover segment level performance, capitalization metrics and conclude with a review of our revised financial guidance for the full fiscal year 2023. Consolidated net sales for the quarter ended September 30, 2022 were $232.5 million, reflecting a $17.9 million or 8% increase over the same quarter one year ago. This increase was driven by improvement in both the Animal Health and Mineral Nutrition segment, offset by a slight decline in Performance Products in comparison to a very strong performance in the same quarter last year. GAAP-based net income and diluted EPS decreased 41% driven by higher SG&A expenses, interest expense and foreign exchange losses, offset by favorable gross profit and lower income tax expense. After making our standard adjustments to GAAP results, including acquisition-related items, foreign currency movements and one-offs, first quarter adjusted EBITDA was comparable to the prior year’s quarter driven by higher adjusted EBITDA in both the Mineral Nutrition and Performance Products segments, offset by lower Animal Health adjusted EBITDA and an increase in corporate expenses. Adjusted net income and adjusted diluted EPS declined 18%, respectively, driven by higher SG&A expenses and taxes, offset by higher gross profit. Moving to segment level financial performance on slide five, I will start with first quarter financial performance for our largest segment, Animal Health, which includes three product lines, namely MFAs and other, nutritional specialties and vaccines. The Animal Health segment posted $154.9 million of net sales for the quarter, which represents an increase of $13.9 million or 10% versus the same quarter prior year. Within the Animal Health segment, we reported a $9 million or 11% increase in MFAs and other versus the same quarter prior year, driven by increased sales of…

[Operator Instructions] Our first question will come from the line of Erin Wright with Morgan Stanley. Please go ahead.

Great. Thanks. Thanks for taking the question. So I would like to know what’s embedded in your fiscal 2023 guidance now as it relates to price and your ability to take price in the coming quarters and how are you thinking about that dynamic?

I will start and then hand it over to Jack. As I mentioned, we reiterated our guidance for sales. We continue to take pricing actions in markets when and where we can as competitive conditions allow. We started that process last fall about the same time last year and this will continue this year, and we will continue to do that, because we are seeing higher input costs which is reflected in our tighter margins and higher inventory carrying values.

And I am going to add to that is, we are in a competitive environment around the world and -- but there are opportunities as everyone else is facing inflationary costs as well. So we will -- we have -- there’s no set number, but as they -- as Damian has said, we will opportunistically raise prices where we can.

Okay. Got it. And then could you just give us a general update on fundamentals across your key livestock categories, including dairy, ruminant kind of swine, poultry and aqua and how those are trending, what you are most optimistic about in the coming quarters in terms of fundamental demand trends and areas where we will kind of keep an eye on? Thanks.

Overall, the animal protein business, notwithstanding growing recession is doing well. In the markets we are in, we are seeing strong demand as reflected in our sales sort of across the Board. And I wouldn’t point out any single segment, the segment, I would say, that everyone knows is doing sort of worse is U.S. cattle business, which is a part of the business where we are not active in. But our cattle business in Brazil is doing quite well and that seems -- and that’s growing. So I wouldn’t point out any one segment, but again, overall, as we have often said, for a long time, people tend to eat the last thing you give up and that’s sort of reflected in our business.

Got it. Thank you so much.

Our next question will come from the line of Michael Ryskin with Bank of America. Please go ahead.

Hi. This is Wolf on for Mike. Thanks for taking questions. I am wondering if you can give a bit more color on how sales of Rejensa trended in the context of your target of doubling sales year-over-year. We are hearing a lot from others in our animal health coverage about that’s having pretty severe labor shortages and staffing challenges. So I am just wondering if you can talk to your experience in launching a new product for the vet channel against that backdrop.

I will take it. It’s Donny. Good morning. So you mentioned the guidance we gave was a double year-over-year. In Q1 we were from a sales perspective a little bit short of that. We were very high-double digits. Not enough that makes us in we won’t hit our full year goal. But I think, just anecdotally, we did see a little bit of a slowdown relative to the pace that we were going on so which very well may be reflected. We obviously don’t have the same level of exposure as some of the competitors that you are mentioning talked about the vet challenges. So still, obviously, a strong high double-digit growth, perhaps, sequentially a little bit of a slowdown quarter-over-quarter.

Got it. Thank you. And then one slightly more technical one, can you give us a little more color on the Brazilian income tax law change you flagged? Should we be assuming 33% is a fair baseline going forward for your tax rate or are there ways that you can offset this over time?

Yeah. I will take that one. So as I mentioned, the adjusted effective tax rate in our guidance increased from 30% to 33% and that’s driven on the heels of changes in actual U.S. federal tax legislation, which now disallows the income tax that we pay on Brazilian earnings in the high tax exception category and without that country included in that category, that translates into a higher calculation of GILTI tax in our federal U.S. tax liability, which overall has a net impact of 3 percentage points on tax, because we have pretty sizable operations in Brazil and generate a pretty decent portion of our taxable income globally in the Brazil market. But we are looking for ways not just to decrease tax in Brazil or the U.S., but really around the world and continue to try to find opportunities where we can do so.

Got it. Much appreciate it. Thanks for the questions.

[Operator Instructions] Our next question will come from the line of Balaji Prasad with Barclays. Please go ahead.

Hi. Good morning. This is Shao [ph] for Balaji. Thanks for taking our questions. Actually, could you add any additional colors and updates on the deal with Rejuvenate Bio? Thank you so much.

Good morning. It’s Donny again. We have nothing new to add from last quarter. Still believe that they could file -- they are anticipating filing for additional license by the end of next calendar year.

Got it. Thank you so much. Any addition, could you add some color and your thoughts on the livestock trend? Thank you.

Sorry, I didn’t…

Livestock.

On innovation…

On livestock trend.

Yeah. But…

U.S. livestock business. We don’t have much exposure.

We don’t have much exposure to that business. But it’s all tied into a lot less rain, a lot less passion, higher cost with feed generated by the conflict there in Europe. So, overall, it’s a lot of money to put -- take out our passion in terms of feed line. So there is a quickening of taking these categories further, which means less cattle, which means we less products being sold.

Got it. That’s very helpful. Thank you.

We have no further questions at this time. I will turn the conference back over to Damian for any closing remarks.

Okay. Thank you, Regina, and thank you everyone for listening in on today’s call. We appreciate your time, attention, interest and support of Phibro Animal Health Corporation and please have a great rest of your day and enjoy the upcoming holiday season. Thank you.

Ladies and gentlemen, that will conclude today’s call. We thank you all for joining. You may…