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Phibro Animal Health (Nasdaq: PAHC) | Company Profile, History, Competitors

 

Phibro Animal Health (NASDAQ: PAHC) is a manufacturer of animal health and mineral nutrition products for livestock animals. As of 2017, Phibro sells to more than 3,000 customers in over 65 countries. The company was founded in 1946 and headquartered in Teaneck, NJ.

The company was founded in 1946 by Charles Bendheim as a spinoff from Philipp Brothers, a commodities business.  In 1980, it entered the animal health business through acquiring Prince Agri Products, a mineral nutrition business. Phibro sells animal nutrition products including antibacterials, anticoccidials, enzymes, yeasts and trace minerals.

Business Overview

Phibro operates in three main segments:
  • Animal Health (65% of 2017 Revenues): Sells antibacterials, anticoccidials, enzymes and yeasts to improve animal health and vaccines against viruses.
  • Mineral Nutrition (29% of 2017 Revenues): Sells trace minerals for animals
  • Performance Products (6% of 2017 Revenues): Sells specialty chemicals, personal care and industrial products.

Animal Health Segment

Phibro produces more than 550 formulations for their customers to prevent, control and treat animal diseases and enhance nutrition to improve overall health and performance of livestock. There are three sub-segments in this segment: Medicated Feed Additives, Nutritional Specialties and Vaccines.

Medicated Feed Additives
Phibro sells medicated products that are administered to animals through their feed. This includes antibacterials (inhibits growth of pathogenic bacteria that causes infections) and anticoccidials (inhibits growth of parasites that damage intestinal tracts). These medications are primarily for poultry, swine, cattle and diary markets.

Antibacterials are used to target pathogenic bacterial infection in livestock. Virginiamycin is one of their top selling products and used to target necrotic enteritis in chicken, dysentery in swine, and liver abscesses in cattle. Oxytetracycline is used to treat a wide range of inflections. Carbadox is used to control salmonellosis and dysentery in swine.

Anticoccidials are used to inhibit the growth of parasites. These drugs are produced through fermentation and chemical synthesis. Salinomycin is used against gram-positive bacteria strains. Nicarbazin is used for  coccidiosis prevention in chickens.

Phibro also sells anthelminitics, which are used to treat infections of parasitic intestinal worms and Bloat Guard used to control bloat in cattle grazing.

Nutritional Specialties
Phibro sells enzymes, yeasts and supplements to enhance nutrition in livestock animals. OmniGen is one of their top selling products and used as an immune enhancer for dairy cows. Magni-Phi is used to improve immune response in poultry.

Vaccines
Phibro sells biological agents that increase antibody levels against specific virus. TAbic is used for the prevention of infectious bursal disease and infectious bronchitis in poultry. MJPRRS is used for the prevention of Porcine Reproductive & Respiratory Syndrome in poultry. SRP is used to protector chicken from various diseases including Salmonella and E. coli.

Mineral Nutrition Segment

Phibro sells over 400 formulations of trace minerals. These include copper sulfate, zinc sulfate, iron oxide, manganese oxide, cobalt, iodine and selenium. The formulations are used to fortify daily feed requirements of livestock diets.

Copper is deficient in grazing cattle. Zinc plays a role in animal immune systems and skin and hoof health. Cobalt deficiency results in loss of appetite and poor growth.

Performance Products Segment

Phibro manufactures a number of specialty chemicals for the personal care, automotive, industrial chemical, and chemical catalyst
industries.

Manufacturing & Distribution

As of 2017, Phibro has ten manufacturing sites around the world. The products are typically produced in different manufacturing plants. Their Medicated Feed Additives products are manufactured out of Brazil, Vaccines in Israel and Nebraska, and Nutritional Specialties in Illinois. Phibro also uses third-party contract manufacturing organizations.

As of 2017, Phibro has 180 patents or pending applications around the world.

Sales & Marketing

Phibro has a sales team of 300 employees and 200 distributors that market over 1,300 products. Their direct sales team communicates directly with livestock owners or commercial animal feed manufacturers, wholesalers and distributors. Their technicians provide scientific consulting to their customers.

Customers

As of 2017, Phibro has 3,000 customers. Phibro sells directly to livestock and aquaculture producers and to distributors that resell their products to livestock producers.

Competitors

Their main competitors are Zoetis, Elanco (Eli Lilly), Merck Animal Health, Merial (Sanofi) and Bayer Animal Health.

History

The company was founded in 1946 by Charles Bendheim as a spinoff from Philipp Brothers, a commodities business.  In 1980, it entered the animal health business through acquiring Prince Agri Products, a mineral nutrition business. In 2000, it acquired Pfizer's medicated feed additive business. In 2003, it changed its name to Phibro Animal Health Corporation.

In 2013, the company went public. Prior, Phibro had been a family owned business for over 65 years (Bendheim family).

Management

Jack C. Bendheim (CEO): Jack Bendheim serves as CEO since 2014. He has also served in various roles at the company including COO and EVP Treasurer.

Richard G. Johnson (CFO): Richard Johnson serves as CFO since 2002. Prior, he was a Director of Financial Management at Laserdyne Prima, a manufacturing of laser cutting equipment. He also worked as VP Planning and Control-Latin America for Ecolab.

Financials

 $ USD in millions    2013    2014 2015 2016 2017
 Revenues $653 
$692 
$749 
$752 
$764 
 Gross Profit $179 
$207 
 $233 
 $242 
 $248 
 Operating Profit $57 
$64 
 $88 
 $86 
 $98 
 Net Income$25 
($3)
$60 
 $83 
$65 
 EPS$0.81 
($0.10)
$1.51 
$2.07 
$1.61 


Phibro Animal Health Corporation
 
  Type     Public
  Ticker     NASDAQ: PAHC
  Industry Healthcare
  Founded 1946
  Headquarters Teaneck, NJ
  Customers 3,000 (2017)
  Revenues
$764mm (2017)
  Employees 1,400 (2017)
  Website pahc.com