Business Segments

12 Months Ended

Jun. 30, 2017

15. Business Segments

The Animal Health segment manufactures and markets a broad range of products for food animals, including poultry, swine, cattle, dairy and aquaculture. The business includes net sales of medicated feed additives and other related products, nutritional specialty products and vaccines. The Mineral Nutrition segment manufactures and markets a broad range of trace minerals for food animals. The Performance Products segment manufactures and markets a variety of products for use in the personal care, automotive, industrial chemical and chemical catalyst industries.

We evaluate performance and allocate resources based on the Animal Health, Mineral Nutrition and Performance Products segments. Certain of our costs and assets are not directly attributable to these segments and we refer to these items as Corporate. We do not allocate Corporate costs or assets to the segments because they are not used to evaluate the segments’ operating results or financial position. Corporate costs include certain costs related to executive management, business technology, legal, finance, human resources and business development. Corporate assets include cash and cash equivalents, certain debt issue costs, income tax related assets and certain other assets.

We evaluate performance of our segments based on Adjusted EBITDA. We define Adjusted EBITDA as income before income taxes plus (a) interest expense, net, (b) depreciation and amortization, (c) (income) loss from, and disposal of, discontinued operations, (d) other expense or less other income, as separately reported on our consolidated statements of operations, including foreign currency gains and losses and loss on extinguishment of debt, and (e) certain items that we consider to be unusual, non-operational or non-recurring.

The accounting policies of our segments are the same as those described in the summary of significant accounting policies included herein.

For the Years Ended June 30	2017			2016			2015
Net sales
MFAs and other		$	321,430		$	339,916		$	335,735
Nutritional Specialties			111,282			94,084			81,702
Vaccines			65,033			52,140			53,363
Animal Health			497,745			486,140			470,800
Mineral Nutrition			218,298			216,685			227,102
Performance Products			48,238			48,701			50,689
Total segments		$	764,281		$	751,526		$	748,591
Depreciation and amortization
Animal Health		$	20,132		$	17,149		$	15,430
Mineral Nutrition			2,332			2,467			2,468
Performance Products			939			807			577
Total segments		$	23,403		$	20,423		$	18,475
Adjusted EBITDA
Animal Health		$	130,261		$	127,442		$	120,259
Mineral Nutrition			17,426			14,971			14,429
Performance Products			2,057			970			2,646
Total segments		$	149,744		$	143,383		$	137,334
Reconciliation of income before income taxes to Adjusted EBITDA
Income before income taxes		$	80,543		$	76,761		$	78,763
Interest expense, net			14,906			16,592			14,305
Depreciation and amortization–Total segments			23,403			20,423			18,475
Depreciation and amortization–Corporate			2,598			3,029			3,129
Corporate costs			29,625			29,323			27,315
Acquisition-related cost of goods sold			—			2,566			—
Acquisition-related accrued compensation			1,680			1,680			747
Acquisition-related transaction costs			1,274			618			—
Acquisition-related other, net			(972)			—			—
Pension settlement cost			1,702			—			—
Gain on insurance settlement			(7,500)			—			—
Foreign currency (gains) losses, net			(113)			(7,609)			(5,400)
Loss on extinguishment of debt			2,598			—			—
Adjusted EBITDA–Total segments		$	149,744		$	143,383		$	137,334

Acquisition-related other, net includes the net effect of adjustments to contingent consideration on acquisitions and impairments of intangible assets.

As of June 30	2017			2016
Identifiable assets
Animal Health		$	442,521		$	444,751
Mineral Nutrition			55,184			57,939
Performance Products			23,681			21,557
Total segments			521,386			524,247
Corporate			102,011			83,588
Total		$	623,397		$	607,835

The Animal Health segment includes all goodwill of the Company. The Animal Health segment includes advances to and investment in an equity method investee of $3,719 and $4,076 as of June 30, 2017 and 2016, respectively. The Performance Products segment includes an investment in equity method investee of $516 and $504 as of June 30, 2017 and 2016, respectively. Corporate assets include cash and cash equivalents, certain debt issuance costs, income tax related assets and certain other assets.