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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2026


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-36410

Phibro Animal Health Corporation

(Exact name of registrant as specified in its charter)



Delaware	13-1840497
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

Glenpointe Centre East, 3rd Floor
300 Frank W. Burr Boulevard, Suite 21

Teaneck, New Jersey	07666-6712
(Address of Principal Executive Offices)	(Zip Code)

(201) 329-7300

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Class A Common Stock, $0.0001 par value per share		PAHC		Nasdaq Stock Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files.) Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☒
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of May 1, 2026, there were 21,068,682 shares of the registrant’s Class A common stock, par value $0.0001 per share, and 19,496,034 shares of the registrant’s Class B common stock, par value $0.0001 per share, outstanding.

Table of Contents

PHIBRO ANIMAL HEALTH CORPORATION

TABLE OF CONTENTS

		Page
PART I—FINANCIAL INFORMATION
Item 1.	Financial Statements (unaudited)	3
	Consolidated Statements of Operations	3
	Consolidated Statements of Comprehensive Income	4
	Consolidated Balance Sheets	5
	Consolidated Statements of Cash Flows	6
	Consolidated Statements of Changes in Stockholders’ Equity	7
	Notes to Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	45
Item 4.	Controls and Procedures	45
PART II—OTHER INFORMATION
Item 1.	Legal Proceedings	45
Item 1A.	Risk Factors	45
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	45
Item 3.	Defaults Upon Senior Securities	45
Item 4.	Mine Safety Disclosures	46
Item 5.	Other Information	46
Item 6.	Exhibits	46
SIGNATURES		47

Table of Contents

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements

PHIBRO ANIMAL HEALTH CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS


		Three Months						Nine Months
For the Periods Ended March 31		2026			2025			2026			2025

		(unaudited)
		(in thousands, except per share amounts)
Net sales		$	383,543		$	347,825		$	1,121,346		$	917,518
Cost of goods sold			257,868			243,257			743,232			627,585
Gross profit			125,675			104,568			378,114			289,933
Selling, general and administrative expenses			81,022			71,053			231,875			213,186
Operating income			44,653			33,515			146,239			76,747
Interest expense, net			10,431			9,355			34,246			25,992
Foreign currency losses (gains), net			1,909			(5,528)			6,988			6,609
Income before income taxes			32,313			29,688			105,005			44,146
Provision for income taxes			8,289			8,808			26,995			13,106
Net income		$	24,024		$	20,880		$	78,010		$	31,040

Net income per share
basic		$	0.59		$	0.52		$	1.92		$	0.77
diluted		$	0.59		$	0.51		$	1.90		$	0.76
Weighted average common shares outstanding
basic			40,551			40,520			40,540			40,509
diluted			41,037			40,709			40,956			40,669

The accompanying notes are an integral part of these consolidated financial statements

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PHIBRO ANIMAL HEALTH CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME


	Three Months					Nine Months
For the Periods Ended March 31	2026		2025			2026		2025

	(unaudited)
	(in thousands)
Net income	$	24,024	$	20,880		$	78,010	$	31,040
Change in fair value of derivative instruments		3,052		(5,274)			2,817		(7,934)
Foreign currency translation adjustment		7,552		6,895			9,260		(1,868)
Unrecognized net pension gains		78		75			234		233
(Provision) benefit for income taxes		(783)		1,300			(764)		1,927
Other comprehensive income (loss)		9,899		2,996			11,547		(7,642)
Comprehensive income	$	33,923	$	23,876		$	89,557	$	23,398

The accompanying notes are an integral part of these consolidated financial statements

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PHIBRO ANIMAL HEALTH CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS


	March 31,		June 30,
As of	2026		2025

	(unaudited)
	(in thousands, except share and per share amounts)
ASSETS
Cash and cash equivalents	$	54,929	$	68,039
Short-term investments		22,522		9,000
Accounts receivable, net		221,546		227,983
Inventories, net		539,699		444,425
Other current assets		55,372		61,159
Total current assets		894,068		810,606
Property, plant and equipment, net		359,271		354,690
Intangibles, net		31,685		36,469
Goodwill		59,889		59,645
Other assets		100,205		99,490
Total assets	$	1,445,118	$	1,360,900
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current portion of long-term debt	$	22,831	$	16,250
Accounts payable		129,643		138,201
Accrued expenses and other current liabilities		129,396		139,022
Total current liabilities		281,870		293,473
Revolving credit facility		115,000		87,000
Long-term debt		597,685		615,435
Other liabilities		88,736		79,310
Total liabilities		1,083,291		1,075,218
Commitments and contingencies (Note 9)
Common stock, par value $0.0001 per share; 300,000,000 Class A shares authorized, 20,968,682 and 20,367,574 shares issued and outstanding at March 31, 2026 and June 30, 2025, respectively; 30,000,000 Class B shares authorized, 19,596,034 and 20,166,034 shares issued and outstanding at March 31, 2026 and June 30, 2025, respectively		4		4
Preferred stock, par value $0.0001 per share; 16,000,000 shares authorized, no shares issued and outstanding		—		—
Paid-in capital		138,179		136,995
Retained earnings		336,115		272,701
Accumulated other comprehensive loss		(112,471)		(124,018)
Total stockholders’ equity		361,827		285,682
Total liabilities and stockholders’ equity	$	1,445,118	$	1,360,900

The accompanying notes are an integral part of these consolidated financial statements

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PHIBRO ANIMAL HEALTH CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS


		Nine Months
For the Periods Ended March 31		2026			2025

		(unaudited)
		(in thousands)
OPERATING ACTIVITIES
Net income		$	78,010		$	31,040
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization			38,169			33,194
Amortization of debt issuance costs			1,716			1,443
Deferred income taxes			9,668			(13,241)
Foreign currency losses, net			851			5,683
Acquisition-related items			1,956			3,342
Non-cash impairment charges			—			5,328
Stock-based compensation expense			1,184			538
Other			(1,359)			(1,167)
Changes in operating assets and liabilities, net of business acquisition
Accounts receivable, net			8,923			(29,251)
Inventories, net			(92,541)			(38,133)
Other current assets			6,656			(7,712)
Other assets			745			3,809
Accounts payable			(6,816)			42,936
Accrued expenses and other liabilities			(2,302)			21,043
Net cash provided by operating activities			44,860			58,852
INVESTING ACTIVITIES
Purchases of short-term investments			(37,026)			(10,000)
Maturities of short-term investments			23,504			44,000
Capital expenditures			(40,219)			(25,151)
Business acquisition, net of cash acquired			—			(291,878)
Other, net			(1,263)			1,375
Net cash used by investing activities			(55,004)			(281,654)
FINANCING ACTIVITIES
Revolving credit facility borrowings			221,000			479,000
Revolving credit facility repayments			(193,000)			(563,000)
Proceeds from long-term debt			—			650,000
Payments of long-term debt			(12,188)			(320,953)
Debt issuance costs			—			(10,377)
Payments of insurance premium financing and other short-term debt			(6,161)			(5,185)
Dividends paid			(14,596)			(14,585)
Net cash (used) provided by financing activities			(4,945)			214,900
Effect of exchange rate changes on cash			1,979			(2,357)
Net decrease in cash and cash equivalents			(13,110)			(10,259)
Cash and cash equivalents at beginning of period			68,039			70,613
Cash and cash equivalents at end of period		$	54,929		$	60,354

The accompanying notes are an integral part of these consolidated financial statements

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PHIBRO ANIMAL HEALTH CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY



										Accumulated
	Shares of									Other
	Common	Common		Preferred		Paid-in		Retained		Comprehensive
	Stock	Stock		Stock		Capital		Earnings		Loss		Total

	(unaudited)
	(in thousands, except share and per share amounts)
As of June 30, 2025	40,533,608	$	4	$	—	$	136,995	$	272,701	$	(124,018)	$	285,682
Comprehensive income	—		—		—		—		26,527		3,997		30,524
Dividends declared ($0.12 per share)	—		—		—		—		(4,864)		—		(4,864)
Stock-based compensation expense	—		—		—		339		—		—		339
As of September 30, 2025	40,533,608	$	4	$	—	$	137,334	$	294,364	$	(120,021)	$	311,681
Comprehensive income (loss)	—		—		—		—		27,459		(2,349)		25,110
Dividends declared ($0.12 per share)	—		—		—		—		(4,864)		—		(4,864)
Stock-based compensation expense	562		—		—		434		—		—		434
As of December 31, 2025	40,534,170	$	4	$	—	$	137,768	$	316,959	$	(122,370)	$	332,361
Comprehensive income	—		—		—		—		24,024		9,899		33,923
Shares issued pursuant to stock incentive plan	30,546		—		—		—		—		—		—
Dividends declared ($0.12 per share)	—		—		—		—		(4,868)		—		(4,868)
Stock-based compensation expense	—		—		—		411		—	—	—		411
As of March 31, 2026	40,564,716	$	4	$	—	$	138,179	$	336,115	$	(112,471)	$	361,827



													Accumulated
		Shares of											Other
		Common		Common		Preferred			Paid-in		Retained		Comprehensive
		Stock		Stock		Stock			Capital		Earnings		Loss		Total

		(unaudited)
		(in thousands, except share and per share amounts)
As of June 30, 2024		40,503,608		$	4	$	—		$	136,278	$	243,886	$	(123,527)	$	256,641
Comprehensive income (loss)		—			—		—			—		6,975		(408)		6,567
Dividends declared ($0.12 per share)		—			—		—			—		(4,860)		—		(4,860)
Stock-based compensation expense		—			—		—			179		—		—		179
As of September 30, 2024		40,503,608		$	4	$	—		$	136,457	$	246,001	$	(123,935)	$	258,527
Comprehensive income (loss)		—			—		—			—		3,185		(10,230)		(7,045)
Dividends declared ($0.12 per share)		—			—		—			—		(4,860)		—		(4,860)
Stock-based compensation expense		—			—		—			180		—		—		180
As of December 31, 2024		40,503,608		$	4	$	—		$	136,637	$	244,326	$	(134,165)	$	246,802
Comprehensive income		—			—		—			—		20,880		2,996		23,876
Shares issued pursuant to stock incentive plan		30,000								—		—		—		—
Dividends declared ($0.12 per share)		—			—		—			—		(4,865)		—		(4,865)
Stock-based compensation expense		—			—		—			179		—		—		179
As of March 31, 2025		40,533,608		$	4	$	—		$	136,816	$	260,341	$	(131,169)	$	265,992

The accompanying notes are an integral part of these consolidated financial statements

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except per share amounts)

(unaudited)

1. Description of Business

Phibro Animal Health Corporation (“Phibro” or “PAHC”) and its subsidiaries (together, the “Company”) is a diversified global developer, manufacturer and marketer of a broad range of animal health and mineral nutrition products for food and companion animals including poultry, swine, beef and dairy cattle, aquaculture and dogs. The Company is also a manufacturer and marketer of performance products for use in the personal care, industrial chemical and chemical catalyst industries. Unless otherwise indicated or the context requires otherwise, references in this report to “we,” “our,” “us,” and similar expressions refer to Phibro and its subsidiaries.

The unaudited consolidated financial information for the three and nine months ended March 31, 2026 and 2025, is presented on the same basis as the financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2025 (the “Annual Report”), filed with the Securities and Exchange Commission on August 27, 2025 (File no. 001-36410). In the opinion of management, these financial statements include all adjustments necessary for a fair statement of the financial position, results of operations and cash flows of the Company for the interim periods, and the adjustments are of a normal and recurring nature. The financial results for any interim period are not necessarily indicative of the results for the full year. The consolidated balance sheet information as of June 30, 2025 was derived from the audited consolidated financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America (“GAAP”). The unaudited consolidated financial information should be read in conjunction with the consolidated financial statements and notes thereto included in the Annual Report.

The consolidated financial statements include the accounts of Phibro and its consolidated subsidiaries. Intercompany balances and transactions have been eliminated from the consolidated financial statements. The decision whether to consolidate an entity requires consideration of majority voting interests, as well as effective control over the entity.

2. Summary of Significant Accounting Policies and New Accounting Standards

Our significant accounting policies are described in the notes to the consolidated financial statements included in our Annual Report. As of March 31, 2026, there have been no material changes to any of the significant accounting policies contained therein.

Net Income per Share and Weighted Average Shares

Basic net income per share is calculated by dividing net income by the weighted average number of common shares outstanding during the reporting period.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Diluted net income per share is calculated by dividing net income by the weighted average number of common shares outstanding during the reporting period after giving effect to dilutive common share equivalents resulting from the assumed vesting of restricted stock units (“RSUs”), unless the effect would be antidilutive or if the minimum stock price targets for our performance-based RSUs were not achieved during the reporting period. Common share equivalents related to time- and performance-based RSUs were included in the calculation of diluted net income per share for the three and nine months ended March 31, 2026 and 2025.


		Three Months						Nine Months
For the Periods Ended March 31		2026			2025			2026			2025
Net income		$	24,024		$	20,880		$	78,010		$	31,040

Weighted average number of shares – basic			40,551			40,520			40,540			40,509
Dilutive effect of restricted stock units			486			189			416			160
Weighted average number of shares - diluted			41,037			40,709			40,956			40,669

Net income per share
basic		$	0.59		$	0.52		$	1.92		$	0.77
diluted		$	0.59		$	0.51		$	1.90		$	0.76

New Accounting Standards

Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, enhances income tax disclosures primarily related to the rate reconciliation and income taxes paid information. The ASU outlines specific categories to be provided in the rate reconciliation and requires additional information for those reconciling items that meet a quantitative threshold. The ASU requires disaggregated disclosure of federal, state and foreign income taxes paid, including disaggregation by individual jurisdictions in which income taxes paid (net of refunds received) is equal to or greater than five percent of total income taxes paid (net of refunds received). The ASU also requires disaggregated disclosure of federal, state and foreign income (loss) from continuing operations before income taxes. The enhanced disclosures will be applied on a prospective basis and will be effective for Phibro’s fiscal year ending June 30, 2026. We are evaluating the impact of the additional income tax-related disclosures.

ASU 2024-03, (Subtopic 220-40): Disaggregation of Income Statement Expenses and ASU 2025-01, Clarifying the Effective Date, requires disclosure, in the notes to the financial statements, of certain costs and expenses, including purchases of inventory, employee compensation, depreciation, and intangible asset amortization included in each relevant expense caption, as well as a qualitative description of amounts remaining in relevant expense captions that are not separately disaggregated quantitatively. ASU 2024-03 also requires disclosure of the total amount of selling expenses and, in annual periods, an entity’s definition of selling expenses. The ASU will be effective for Phibro’s fiscal year ending June 30, 2028 and for interim periods thereafter, and it can be applied on a prospective basis or on a retrospective basis to all periods presented. Early adoption is permitted. We are evaluating the impact of this standard on our footnote disclosures.

ASU 2025-06, (Subtopic 350-40): Intangibles - Goodwill and Other - Internal-Use Software: Targeted Improvements to the Accounting for Internal-Use Software, amends existing guidance regarding when entities may begin to capitalize internal-use software costs. Under the updated framework, entities must assess when both of the following occur: (1) management has authorized and committed to funding the software project and (2) it is probable that the project will be completed and the software will be used to perform the function intended. The ASU will be effective for Phibro’s fiscal year ending June 30, 2029, including interim periods within that year, and it can be applied on a prospective basis, on a retrospective basis to all periods presented, or with a modified transition approach. Early adoption is permitted. We are evaluating the impact of this standard on our consolidated financial statements and disclosures.

ASU 2025-09, (Topic 815): Hedge Accounting Improvements, amends existing guidance and provides improvements to hedge accounting, including expanded eligibility of forecasted transactions, increased flexibility in measuring hedge effectiveness, and clarifications related to hedging non-financial items. The ASU will be effective for Phibro’s fiscal year ending June 30, 2028, including interim periods within that fiscal year. Early adoption is permitted. We are evaluating the impact of this standard on our consolidated financial statements and disclosures.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

ASU 2025-10, (Topic 832): Accounting for Government Grants Received by Business Entities, provides recognition, measurement, presentation, and disclosure requirements for government grants. This ASU requires that proceeds from government grants be recognized in earnings in the same period as the costs related to the grant and also introduces two permitted approaches for grant proceeds used to purchase capital assets: a deferred income approach or a cost accumulation approach. The ASU will be effective for Phibro’s fiscal year ending June 30, 2030, including interim periods within that fiscal year. The amendments in this ASU may be applied using a modified prospective, modified retrospective, or retrospective approach. Early adoption is permitted. We are evaluating the impact of this standard on our consolidated financial statements and disclosures.

ASU 2025-11, (Topic 270): Interim Reporting Narrow Scope Improvements, amends the existing guidance and provides clarifications intended to improve the consistency and usability of interim disclosure requirements. The ASU does not change the underlying objectives of interim reporting but is intended to enhance clarity in application. The ASU will be effective for Phibro’s fiscal year ending June 30, 2029, including interim periods within that fiscal year. We are evaluating the impact of this standard on our consolidated financial statements and disclosures.

3. Acquisition

On October 31, 2024, the Company completed its acquisition of the medicated feed additives portfolio, certain water-soluble products and related assets from Zoetis Inc. (the “Acquisition"). The Acquisition was accounted for as a business combination under the acquisition method of accounting. The acquisition method requires, among other things, that assets acquired and liabilities assumed in a business combination be recognized at their fair values as of the acquisition date. The determination of estimated fair value requires management to make significant estimates and assumptions. The results of operations of the Acquisition are included in our consolidated statements of operations from the date of acquisition and reported within the Animal Health segment.

The Acquisition has expanded our medicated feed additives and water-soluble products category and diversified our species and product offerings, which complements our commercial operations and international infrastructure while expanding our global presence.

The purchase price for the Acquisition was approximately $297.5 million ($286.5 million, as adjusted, net of cash acquired), which was funded by Delayed Draw Term A-1 Loans and Delayed Draw Term A-2 Loans drawn on 2024 Credit Facilities (each as defined below in Note 6—Debt). The purchase and sale agreement underlying the transaction provides for closing working capital and other adjustments to be completed after the Acquisition. These adjustments were completed in May 2025 and have been finalized.

For the three months ended March 31, 2025, we recognized $0.6 million related to the Acquisition. For the nine months ended March 31, 2026 and 2025, we recognized transaction costs related to the Acquisition of $0.4 million and $12.9 million, respectively. These costs were primarily associated with financial advisory, legal and other professional services related to the Acquisition and are reflected within selling, general and administrative expenses (“SG&A”) in our consolidated statements of operations.

The amount of revenue attributable to the Acquisition included in consolidated statements of operations for the three months ended March 31, 2026 and 2025 was $95.9 million and $77.0 million, respectively. The amount of revenue attributable to the Acquisition included in our consolidated statements of operations for the nine months ended March 31, 2026 and 2025 was $270.5 million and $113.7 million, respectively. Based on our current operational structure and the nature and mix of legal entities and assets acquired, we are not able to complete a full cost identification and allocation assessment for activities related to the Acquisition. As a result, we are unable to accurately determine earnings or loss attributable to the Acquisition since the date of acquisition.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Since the initial measurement of the identified assets acquired and liabilities assumed was performed in the three months ended December 31, 2024, the Acquisition purchase price was adjusted for certain net working capital and other adjustments and progress was made in completing certain of our additional valuations and analyses. As such, we updated (and have now finalized, with no further material adjustments) our initial allocation of the purchase price. Principal changes included: (i) decreasing the value of inventory to reflect final inventory receipts and net working capital adjustments; (ii) increasing the value attributed to property, plant and equipment primarily to reflect updated assumptions related to the estimated economic value of certain underlying assets; (iii) adjustments to other assets and accrued expenses and other liabilities primarily related to value-added taxes; and (iv) goodwill increasing the value attributed to a deferred tax liability (included in other noncurrent liabilities below) emanating from stepped up values for assets acquired in China. The following table summarizes the final allocation of the purchase price to the fair values assigned to the assets acquired and liabilities assumed at the date of the Acquisition that was recorded as of June 30, 2025.


			Final
			Purchase Price Allocation
Assets acquired:
Cash and cash equivalents		$	11,018
Accounts receivable, net			350
Inventories, net			138,981
Property, plant and equipment			144,964
Other assets⁽¹⁾			13,208
Goodwill⁽²⁾			4,948
Total fair value of assets acquired			313,469
Liabilities assumed:
Accounts payable			1,411
Accrued expenses and other current liabilities			4,165
Other noncurrent liabilities			10,346
Total fair value of liabilities assumed			15,922
Fair value of net assets acquired		$	297,547

(1)	Includes current and noncurrent amounts.

(2)	Goodwill is reported within the Animal Health segment. An immaterial amount of the goodwill is deductible for tax purposes.

In the table above, the estimate of fair value of inventories, net was determined using the replacement cost method, which contemplates the costs to complete the manufacturing and sales process, a reasonable profit allowance from the sales process, and estimated holding costs. The cost basis of raw materials was determined to represent current replacement cost and therefore approximates fair value. The net fair value step-up adjustment to inventories of $7.6 million is being amortized to cost of sales as the inventory is sold to customers.

Property, plant and equipment is composed of land, buildings, equipment (including machinery, equipment, furniture and fixtures, and computer equipment), and construction-in-progress. The estimate of fair value of property, plant and equipment was determined by the direct cost and indirect cost approaches, as applicable, depending on the nature of the asset. Of the acquired assets, $102.1 million of personal property (comprised of machinery and equipment) and $38.1 million of real property (comprised of buildings and improvements) were recorded. The amounts allocated to personal and real property were based on management’s estimates and assumptions, as well as other information compiled by management, including third party analysis and market data. The process for determining the direct cost or indirect cost approaches required management to make estimates and assumptions, including reproduction cost new, physical deterioration, utilization, replacement cost new, base cost, and square footage. The step-up adjustment for property, plant and equipment of $43.5 million will be depreciated on a straight-line basis over the remaining useful life of the respective assets, which ranges from 1 year to 21 years.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Pro Forma Results

The following unaudited pro forma financial information presents the combined results of net sales and operating income of the Company as if the Acquisition had occurred as of the beginning of the years presented and does not include any material non-recurring adjustments. The unaudited pro forma financial information is not necessarily indicative of what the Company’s net sales and operating income actually would have been had the Acquisition occurred at the beginning of each year presented. In addition, the unaudited pro forma financial information does not attempt to project the future results of operations of the combined company. The pro forma information does not include any potential revenue enhancements, cost synergies or other operating efficiencies that could result from the Acquisition.


		Three Months						Nine Months
For the Periods Ended March 31		2026			2025			2026			2025
Net sales		$	383,543		$	347,825		$	1,121,346		$	1,067,875
Operating income			44,653			33,515			146,239			120,145

4. Statements of Operations—Additional Information

Disaggregated revenue, deferred revenue and customer payment terms

We develop, manufacture and market a broad range of products for food and companion animals including poultry, swine, beef and dairy cattle, aquaculture, and dogs. The products help prevent, control and treat diseases and enhance nutrition to help improve animal health and well-being. We sell animal health and mineral nutrition products directly to integrated poultry, cattle and swine customers and through commercial animal feed manufacturers, distributors and veterinarians. The animal health industry and demand for many of the animal health products in a particular region are affected by changing disease pressures and by weather conditions, as product usage follows varying weather patterns and seasons. Our operations are primarily focused on regions where the majority of livestock production is consolidated in large commercial farms.

We have a diversified portfolio of products that are classified within our three reportable business segments—Animal Health, Mineral Nutrition and Performance Products. Each segment has its own dedicated management and sales team.

Animal Health

The Animal Health business develops, manufactures and markets products in three main categories:

●

MFAs and other: MFAs and other products primarily consist of concentrated medicated products administered through animal feeds, commonly referred to as Medicated Feed Additives (“MFAs”). Specific product classifications include antibacterials, which inhibit the growth of pathogenic bacteria that cause infections in animals; anticoccidials, which inhibit the growth of coccidia (parasites) that damage the intestinal tract of animals; and other related products. The MFAs and other category also includes antibacterials and other processing aids used in the ethanol fermentation industry.

●

Nutritional specialties: Nutritional specialty products enhance nutrition to help improve health and performance in areas such as immune system function and digestive health. We are also a developer, manufacturer and marketer of microbial products and bioproducts for a variety of applications serving animal health and nutrition, environmental, industrial and agricultural customers.

●

Vaccines: Vaccine products are primarily focused on preventing diseases in poultry, swine, beef and dairy cattle and aquaculture. They protect animals from either viral or bacterial disease challenges. We develop, manufacture and market conventionally licensed and autogenous vaccine products, as well as adjuvants for animal vaccine manufacturers. We have developed and market an innovative and proprietary delivery platform for vaccines.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Mineral Nutrition

The Mineral Nutrition business is comprised of formulations and concentrations of trace minerals such as zinc, manganese, copper, iron and other compounds, with a focus on customers in North America. Our customers use these products to fortify the daily feed requirements of their livestock’s diets and maintain an optimal balance of trace elements in each animal. We manufacture and market a broad range of mineral nutrition products for food animals including poultry, swine, and beef and dairy cattle.

Performance Products

The Performance Products business manufactures and markets specialty ingredients for use in the personal care, industrial chemical and chemical catalyst industries.

The following tables present our revenues disaggregated by major product category and geographic region:

Net Sales by Product Type


		Three Months						Nine Months
For the Periods Ended March 31		2026			2025			2026			2025

Animal Health
MFAs and other		$	205,789		$	181,645		$	603,098		$	439,827
Nutritional specialties			46,810			43,350			145,191			131,908
Vaccines			38,626			33,382			116,369			98,583
Total Animal Health		$	291,225		$	258,377		$	864,658		$	670,318
Mineral Nutrition			73,418			66,774			205,351			189,086
Performance Products			18,900			22,674			51,337			58,114
Total		$	383,543		$	347,825		$	1,121,346		$	917,518

Net Sales by Region


		Three Months						Nine Months
For the Periods Ended March 31		2026			2025			2026			2025
United States		$	232,771		$	209,940		$	656,875		$	537,930
Latin America and Canada			75,619			70,753			250,445			214,578
Europe, Middle East and Africa			44,468			38,910			134,194			102,624
Asia Pacific			30,685			28,222			79,832			62,386
Total		$	383,543		$	347,825		$	1,121,346		$	917,518

Net sales by region are based on country of destination.

Our customer payment terms generally range from 30 to 120 days globally and do not include any significant financing components. Payment terms vary based on industry and business practices within the regions in which we operate. Our average worldwide collection period for accounts receivable is approximately 60 days after the revenue is recognized.

Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Interest Expense, Net


		Three Months						Nine Months
For the Periods Ended March 31		2026			2025			2026			2025
Interest expense, net
Credit Facilities		$	10,055		$	9,029		$	33,800		$	24,393
2022 Term Loan			—			—			—			12
Amortization of debt issuance costs			572			572			1,716			1,443
Refinancing expense			—			—			—			1,960
Other			54			52			189			388
Interest expense			10,681			9,653			35,705			28,196
Interest income			(250)			(298)			(1,459)			(2,204)
		$	10,431		$	9,355		$	34,246		$	25,992

For the nine months ended March 31, 2025, we also incurred $1,960 in certain costs and charges resulting from the refinancing of the Company’s debt, which included $1,446 of new creditor and third-party financing costs and $514 in debt extinguishment costs resulting from the write-off of unamortized deferred financing costs on previously outstanding debt.

Depreciation and Amortization


		Three Months						Nine Months
For the Periods Ended March 31		2026			2025			2026			2025
Depreciation and amortization
Depreciation of property, plant and equipment		$	10,726		$	10,897		$	33,025		$	27,048
Amortization of intangible assets			1,722			1,719			5,144			6,146
		$	12,448		$	12,616		$	38,169		$	33,194

5. Balance Sheets—Additional Information


	March 31,		June 30,
As of	2026		2025
Inventories, net
Raw materials	$	191,668	$	162,626
Work-in-process		30,013		27,982
Finished goods		318,018		253,817
	$	539,699	$	444,425


	March 31,		June 30,
As of	2026		2025
Other assets
ROU operating lease assets	$	49,237	$	41,339
Deferred income taxes		15,264		25,548
Deposits		610		610
Insurance investments		3,976		6,547
Other investments		8,292		5,142
Debt issuance costs		3,018		3,714
Derivative instruments		991		89
Other		18,817		16,501
	$	100,205	$	99,490

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)


	March 31,		June 30,
As of	2026		2025
Accrued expenses and other current liabilities
Employee related	$	50,736	$	51,758
Current operating lease liabilities		9,419		9,127
Commissions and rebates		16,998		23,274
Professional fees		7,616		8,098
Income and other taxes		12,477		8,397
Insurance-related		2,280		1,655
Insurance premium financing		—		5,476
Other		29,870		31,237
	$	129,396	$	139,022


	March 31,		June 30,
As of	2026		2025
Other liabilities
Long-term operating lease liabilities	$	42,509	$	33,740
Long-term and deferred income taxes		23,607		19,471
Supplemental retirement benefits, deferred compensation and other		5,479		5,526
U.S. pension plan, net		1,598		1,795
International retirement plans		3,794		3,532
Derivative instruments		1,235		3,885
Other long-term liabilities		10,514		11,361
	$	88,736	$	79,310


	March 31,			June 30,
As of	2026			2025
Accumulated other comprehensive loss
Derivative instruments	$	462		$	(2,354)
Foreign currency translation adjustment		(104,192)			(113,452)
Unrecognized net pension losses		(12,158)			(12,392)
Income tax benefit		3,417			4,180
	$	(112,471)		$	(124,018)

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

6. Debt

Term Loans and Revolving Credit Facilities

2024 Credit Agreement

In July 2024, we entered into a Credit Agreement (the “2024 Credit Agreement”) with a group of lenders. Initial borrowings were used to refinance all our outstanding debt, to pay fees and expenses of the transaction and for ongoing working capital requirements and general corporate purposes. Borrowings under the Delayed Draw Term A-1 Loans (as defined below) and Delayed Draw Term A-2 Loans (as defined below) were drawn on October 31, 2024 and used to finance the purchase price of the Acquisition discussed in “Note 3 — Acquisition.”

The 2024 Credit Agreement provides for: (i) Initial Term A-1 Loans in an initial aggregate principal amount of $162,000 (the “Initial Term A-1 Loans”), (ii) Delayed Draw Term A-1 Loans in an initial aggregate principal amount of $189,000 (the “Delayed Draw Term A-1 Loans” and, together with the Initial Term A-1 Loans, the “Term A-1 Loans”), (iii) Initial Term A-2 Loans in an initial aggregate principal amount of $138,000 (the “Initial Term A-2 Loans”), (iv) Delayed Draw Term A-2 Loans in an initial aggregate principal amount of $161,000 (the “Delayed Draw Term A-2 Loans” and, together with the Initial Term A-2 Loans, the “Term A-2 Loans”), and (v) Revolving Credit Commitments in an initial aggregate principal amount of $310,000 (the “Revolving Credit Commitments” and, together with the Term A-1 Loans and Term A-2 Loans, the “2024 Credit Facilities”). The 2024 Credit Facilities mature in July 2029 in the case of the Term A-1 Loans and the Revolving Credit Commitments and in July 2031 in the case of the Term A-2 Loans.

Borrowings under the 2024 Credit Facilities bear interest at rates based on the ratio of the Company and its subsidiaries’ net consolidated indebtedness to the Company and its subsidiaries’ consolidated EBITDA (the “Net Leverage Ratio”). The interest rates per annum for loans under the 2024 Credit Facilities are based on a fluctuating rate of interest as selected by the Company plus an applicable rate as set forth in the table below:


	Revolving Credit and Term A-1 Loans				Term A-2 Loans
Net Leverage Ratio	Base rate		SOFR		Base rate		SOFR
≥ 4.00:1.00	1.75	%	2.75	%	2.25	%	3.25	%
≥ 3.50:1.00 and < 4.00:1.00	1.50	%	2.50	%	2.00	%	3.00	%
≥ 2.25:1.00 and < 3.50:1.00	1.25	%	2.25	%	1.75	%	2.75	%
< 2.25:1.00	1.00	%	2.00	%	1.50	%	2.50	%

The Company may receive patronage from the lenders providing the Term A-2 Loans, to the extent eligible under such lender’s patronage program, as determined by such lender in its sole discretion. Patronage income for the three and nine months ended March 31, 2026 was $1,157. Patronage income for the three and nine months ended March 31, 2025 was $336. Patronage income is reflected as a reduction of interest expense, net in the Company’s consolidated statements of operations.

Pursuant to the terms of the 2024 Credit Agreement, the 2024 Credit Facilities are subject to various covenants that, among other things and subject to the permitted exceptions described therein, restrict us and our subsidiaries with respect to: (i) incurring additional debt; (ii) making certain restricted payments or making optional redemptions of other indebtedness; (iii) making investments or acquiring assets; (iv) disposing of assets (other than in the ordinary course of business); (v) creating any liens on our assets; (vi) entering into transactions with affiliates; (vii) entering into merger or consolidation transactions; and (viii) creating guarantee obligations; provided, however, that we are permitted to pay distributions to stockholders out of available cash subject to certain annual limitations and a quarterly maximum Net Leverage Ratio of 4.0x and so long as no default or event of default under the 2024 Credit Facilities shall have occurred and be continuing at the time such distribution is declared. Indebtedness under the 2024 Credit Facilities is collateralized by a first priority lien on substantially all assets of Phibro and certain of our domestic subsidiaries. The 2024 Credit Agreement contains an acceleration clause should an Event of Default (as defined therein) occur.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The 2024 Credit Agreement requires, among other things, compliance with financial covenants regarding: (i) a maximum Net Leverage Ratio and (ii) a minimum interest coverage ratio, each calculated on a trailing four-quarter basis, as follows:


Period	maximum Net Leverage Ratio	minimum interest coverage ratio
Prior to October 31, 2024	4.00:1.00	3.00:1.00
First fiscal quarter ended after October 31, 2024 through January 3, 2026	4.75:1.00	2.50:1.00
After January 3, 2026 to January 3, 2027	4.50:1.00	2.75:1.00
After January 3, 2027 to January 3, 2028	4.25:1.00	3.00:1.00
After January 3, 2028	4.00:1.00	3.00:1.00

As of March 31, 2026, we were in compliance with the financial covenants of the 2024 Credit Agreement.

For the nine months ended March 31, 2025, we paid $10,377 in lender and other fees related to the 2024 Credit Facilities, which are being amortized to interest expense through the maturity dates of the 2024 Credit Facilities. The payment of these debt issuance costs is reflected within the financing activities section of the consolidated statements of cash flows.

As of March 31, 2026, we had $115,000 in borrowings drawn under the Revolving Credit Commitments and had outstanding letters of credit of $1,791, leaving $193,209 available for further borrowings and letters of credit under the Revolving Credit Commitments, subject to restrictions in our 2024 Credit Facilities. We obtain letters of credit in connection with certain regulatory and insurance obligations, inventory purchases and other contractual obligations. The terms of these letters of credit are all less than one year.

Subsequent Event

On April 28, 2026, the 2024 Credit Agreement was amended to increase our borrowing capacity by expanding the Revolving Credit Commitments by $125,000, from $310,000 to an aggregate commitment of $435,000. The expanded borrowing capacity provides the Company with enhanced operating flexibility. Fees of approximately $600 were incurred to execute this amendment and will be amortized to interest expense through the maturity date of the Revolving Credit Commitments.

Debt Balances and Interest Rate Information

Long-Term Debt Balances


	March 31,		June 30,
As of	2026		2025
Term A-1 Loans due July 2029	$	338,006	$	344,588
Term A-2 Loans due July 2031		287,931		293,537
Gross term loan balances		625,937		638,125
Unamortized debt issuance costs		(5,421)		(6,440)
Term loan balances, net of unamortized debt issuance costs		620,516		631,685
Less: current maturities of long-term debt		(22,831)		(16,250)
Long-term debt	$	597,685	$	615,435

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Interest Rates

Interest rates as of the balance sheet dates and the weighted-average rates for the periods presented were:


					Nine Months
	March 31,		June 30,		Ended March 31,
	2026		2025		2026		2025
Revolving Credit Facility	5.89	%	5.89	%	5.89	%	6.36	%
Initial Term A-1 Loan due July 2029	5.44	%	5.45	%	5.45	%	2.88	%
Initial Term A-2 Loan due July 2031	6.39	%	6.39	%	6.39	%	3.36	%
Delayed Draw Term A-1 Loan due July 2029	5.92	%	6.50	%	6.19	%	6.55	%
Delayed Draw Term A-2 Loan due July 2031	6.43	%	7.20	%	6.78	%	7.06	%

Interest rates as of the balance sheet dates are based on rates in effect as of those dates, including SOFR fluctuating rates of interest, applicable rates and the interest rate swap agreements.

In September 2024, we entered into an interest rate swap agreement on $150,000 of notional principal that effectively converts the floating SOFR portion of our interest obligation on that amount of debt issued under the 2024 Credit Facilities to a fixed rate of 3.18% through September 2029.

In March 2025, we entered into an interest rate swap agreement on $275,000 of notional principal that effectively converts the floating SOFR portion of our interest obligation on that amount of debt issued under the 2024 Credit Facilities to a fixed rate of 3.64% through February 2030.

In March 2025, we entered into a forward-starting interest rate collar agreement on $250,000 of notional principal that effectively puts a floor of 1.99% and a cap of 4.75% on the floating SOFR portion of our interest obligation on that amount of debt issued under the 2024 Credit Facilities. The individual option contracts of the collar mature monthly beginning July 2025 and through June 2026.

In addition, we were party to an interest rate swap agreement on $300,000 of notional principal that effectively converted the floating SOFR portion of our interest obligation on that amount of debt to a fixed rate of 0.51% through June 2025 as a hedge against our existing variable rate debt issued under the 2024 Credit Facilities. This swap agreement expired on June 30, 2025.

We designated the interest rate swaps and interest rate collar as highly effective cash flow hedges. For additional details, see “Note 10 — Derivatives.”

7. Related Party Transactions

Certain relatives of Jack C. Bendheim, our Chairman, President and Chief Executive Officer, provided services to the Company as employees or consultants and received aggregate compensation and benefits of approximately $488 and $447 during the three months ended March 31, 2026 and 2025, and $2,127 and $1,735 during the nine months ended March 31, 2026 and 2025, respectively. Mr. Bendheim has sole authority to vote shares of our stock owned by BFI Co., LLC, an investment vehicle of the Bendheim family.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

8. Stock Incentive Plan

Restricted Stock Units

On August 1, 2025, the Company granted 113,847 time-based RSUs with a grant date fair value of $25.19 to certain senior-level employees pursuant to the Company’s Incentive Plan. Each RSU represents the right to receive a share of our common stock upon vesting. These RSUs vest in three equal annual amounts on each anniversary of August 1, 2025, subject to continued employment through the applicable vesting date.

In fiscal 2024, our Board of Directors approved grants of 600,000 RSUs to certain officers of the Company, pursuant to the Company’s Incentive Plan and the RSU award agreements. Certain of these RSUs are subject to time-based vesting and certain RSUs are subject to performance-based vesting contingent upon the achievement of certain stock price targets.

The fair value of time-based RSUs is equal to the closing market price of the underlying common stock on the grant date, less the present value of expected dividends over the vesting period. A Monte Carlo simulation model was used to determine the grant date fair value of the performance-based RSUs. We recognize stock-based compensation expense for the RSUs on a straight-line basis over the vesting periods.

Stock-based compensation expense related to the RSUs was $411 and $179 for the three months ended March 31, 2026 and 2025 and $1,184 and $538 for the nine months ended March 31, 2026 and 2025, respectively. As of March 31, 2026, there was $3,699 of unrecognized compensation expense related to the RSUs, which will be recognized over a weighted average period of 2.6 years. During the nine months ended March 31, 2026 and 2025, 31,108 and 30,000 time-based RSUs vested, respectively, and the fair value of these vested RSUs was $1,600 and $711, respectively. There were no excess tax benefits recognized on the vesting of these RSUs. As of March 31, 2026, 650,524 RSUs with a weighted average grant date fair value of $8.35 remain unvested.

9. Commitments and Contingencies

Environmental

Our operations and properties are subject to extensive federal, state, local and foreign laws and regulations, including those governing pollution; protection of the environment; the use, management, and release of hazardous materials, substances and wastes; air emissions; greenhouse gas emissions; water use, supply and discharges; the investigation and remediation of contamination; the manufacture, distribution, and sale of regulated materials, including pesticides; the importing, exporting and transportation of products; and the health and safety of our employees (collectively, “Environmental Laws”). As such, the nature of our current and former operations exposes us to the risk of claims with respect to such matters, including fines, penalties, and remediation obligations that may be imposed by regulatory authorities. Under certain circumstances, we might be required to curtail operations until a particular problem is remedied. Known costs and expenses under Environmental Laws incidental to ongoing operations, including the cost of litigation proceedings relating to environmental matters, are included within operating results. Potential costs and expenses may also be incurred in connection with the repair or upgrade of facilities to meet existing or new requirements under Environmental Laws or to investigate or remediate potential or actual contamination, and from time to time we establish reserves for such contemplated investigation and remediation costs. In many instances, the ultimate costs under Environmental Laws and the period during which such costs are likely to be incurred are difficult to predict.

While we believe that our operations are currently in material compliance with Environmental Laws, we have, from time to time, received notices of violation from governmental authorities, and have been involved in civil or criminal action for such violations. Additionally, at various sites, our subsidiaries are engaged in continuing investigation, remediation and/or monitoring efforts to address contamination associated with historic operations of the sites. We devote considerable resources to complying with Environmental Laws and managing environmental liabilities. We have developed programs to identify requirements under, and maintain compliance with Environmental Laws; however, we cannot predict with certainty the effect of increased and more stringent regulation on our operations, future capital expenditure requirements, or the cost of compliance.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The nature of our current and former operations exposes us to the risk of claims with respect to environmental matters and we cannot assure we will not incur material costs and liabilities in connection with such claims. Based on our experience, we believe that the future cost of compliance with existing Environmental Laws, and liabilities for known environmental claims pursuant to such Environmental Laws, will not have a material adverse effect on our financial position, results of operations, cash flows or liquidity.

Based upon information available, to the extent such costs can be estimated with reasonable certainty, we estimated the cost for further investigation and remediation of identified soil and groundwater problems at operating sites, closed sites and third-party sites, and closure costs for closed sites to be approximately $4,232 and $4,292 at March 31, 2026 and June 30, 2025, respectively, which is included in current and long-term liabilities on the consolidated balance sheets. However, future events, such as new information, changes in existing Environmental Laws or their interpretation, and more vigorous enforcement policies of regulatory agencies, may give rise to additional expenditures or liabilities that could be material. For all purposes of the discussion under this caption and elsewhere in this report, it should be noted that we take and have taken the position that neither PAHC nor any of our subsidiaries are liable for environmental or other claims made against one or more of our other subsidiaries or for which any of such other subsidiaries may ultimately be responsible.

Claims and Litigation

PAHC and its subsidiaries are party to various claims and lawsuits arising out of the normal course of business including product liabilities, payment disputes and governmental regulation. Certain of these actions seek damages in various amounts. In many cases, such claims are covered by insurance. We believe that none of the claims or pending lawsuits, either individually or in the aggregate, will have a material adverse effect on our financial position, results of operations, cash flows or liquidity.

United States Tariffs

In February 2026, the Supreme Court of the United States ruled that tariffs previously imposed under the International Emergency Economic Powers Act (“IEEPA”) were not authorized. In response to this ruling, we are pursuing the potential recovery of IEEPA tariffs previously paid and expect to submit claims through the administrative process administered by U.S. Customs and Border Protection for the refund of tariffs previously paid by the Company. The ruling did not address potential refunds, and therefore the ultimate availability, timing, and amount of the recovery of any potential refunds of these tariffs is highly uncertain and may be subject to further legal, regulatory, and administrative developments. Accordingly, the Company has not recognized any receivable or benefit related to these potential recoveries in its financial statements as of March 31, 2026 and will continue to monitor relevant developments and evaluate the recognition of such recoveries in future periods.

10. Derivatives

We monitor our exposure to foreign currency exchange rates and interest rates and from time-to-time use derivatives to manage certain of these risks. We designate derivatives as a hedge of a forecasted transaction or of the variability of the cash flows to be received or paid in the future related to a recognized asset or liability (cash flow hedge). All changes in the fair value of a highly effective cash flow hedge are recorded in accumulated other comprehensive income (loss).

We routinely assess whether the derivatives used to hedge transactions are effective. If we determine that a derivative ceases to be an effective hedge, we discontinue hedge accounting in the period of the assessment for that derivative and immediately recognize any unrealized gains or losses related to the fair value of that derivative in the consolidated statements of operations.

We record derivatives at fair value in the consolidated balance sheets. For additional details regarding fair value, see “Note 11 — Fair Value Measurements.”

Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

We were a party to an interest rate swap agreement on $300,000 of notional principal that effectively converted the floating SOFR portion of our interest obligation to a fixed rate of 0.51% through June 2025. This agreement expired on June 30, 2025.

We have designated the interest rate swaps and interest rate collar as highly effective cash flow hedges.

We are a party to foreign currency option contracts used to hedge cash flows related to monthly inventory purchases. The individual option contracts mature monthly through June 2026. The forecasted inventory purchases were probable of occurring and the individual option contracts were designated as highly effective cash flow hedges.

The consolidated balance sheet includes the net fair values of our outstanding foreign currency option contracts within the respective line items, based on the net financial position and maturity date of the individual contracts. The consolidated balance sheet includes the net fair values of our outstanding interest rate swaps within the respective balance sheet line items, based on the expected timing of the cash flows. The consolidated balance sheet includes assets and liabilities for the fair values of outstanding derivatives that are designated and effective as cash flow hedges as follows:


		March 31,			June 30,
As of		2026			2025
Other current assets
Interest rate swaps		$	687		$	1,442
Foreign currency option contracts, net			20			—
Other assets
Interest rate swaps			991			89
Other liabilities
Interest rate swaps			(1,235)			(3,885)
Total Fair Value
Foreign currency option contracts, net		$	20		$	—
Interest rate swaps		$	443		$	(2,354)

Notional amounts of the derivatives as of the balance sheet date were:


		March 31,
As of		2026
Interest rate swaps		$	425,000
Interest rate collar		$	250,000
Brazil Real-USD call options		R$	9,000
Brazil Real-USD put options		R$	(9,000)

Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The consolidated statements of operations and statements of comprehensive income for the periods ended March 31, 2026 and 2025 included the effects of derivatives as follows:


		Three Months						Nine Months
For the Periods Ended March 31		2026			2025			2026			2025
Foreign currency option contracts, net
Income recorded in consolidated statements of operations		$	—		$	(157)		$	(20)		$	(1,064)
Consolidated statement of operations - total cost of goods sold		$	257,868		$	243,257		$	743,232		$	627,585
Consolidated statement of operations - total selling, general and administrative expenses		$	81,022		$	71,053		$	231,875		$	213,186
Income recorded in comprehensive income		$	(31)		$	(169)		$	(20)		$	(49)
Interest rate swaps
Income recorded in consolidated statements of operations		$	(199)		$	(3,442)		$	(1,716)		$	(11,132)
Consolidated statement of operations - total interest expense, net		$	10,431		$	9,355		$	34,246		$	25,992
(Income) expense recorded in comprehensive income		$	(3,021)		$	5,443		$	(2,797)		$	7,983

We recognize gains and losses related to foreign currency derivatives as a component of cost of goods sold at the time the hedged item is sold.

11. Fair Value Measurements

Cash Equivalents

Our cash equivalents consist of time deposits with an original maturity of less than three months held at financial institutions. We consider the carrying amounts of these current assets to be recorded at their fair value because of the current nature of these items.

Short-term Investments

Our short-term investments consist of cash deposits with original maturity of greater than three months, but no greater than twelve months, held at financial institutions. We consider the carrying amounts of these current assets to be recorded at their fair value because of the current nature of these items.

Current Assets and Liabilities

We consider the carrying amounts of current assets and current liabilities to be representative of their fair value because of the current nature of these items.

Debt

We record debt, including term loans and revolver balances, at amortized cost in our consolidated financial statements. We believe the carrying value of the debt is approximately equal to its fair value, due to the variable nature of the instruments and our evaluation of estimated market prices.

Derivatives

We determine the fair value of derivative instruments based upon pricing models using observable market inputs for these types of financial instruments, such as spot and forward currency translation rates.

Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Non-financial Assets

Our non-financial assets, which primarily consist of goodwill, other intangible assets, property and equipment, and lease-related right-of-use (“ROU”) assets, are not required to be measured at fair value on a recurring basis, and instead are reported at carrying value in the consolidated balance sheet. Assets and liabilities may be required to be measured at fair value on a non-recurring basis, either upon initial recognition or for subsequent accounting or reporting, including the initial recognition of net assets acquired in a business combination. These fair value measurements involve unobservable inputs that reflect estimates and assumptions that represent Level 3 inputs.

Fair Value of Assets (Liabilities)


As of	March 31, 2026									June 30, 2025
	Level 1			Level 2			Level 3			Level 1			Level 2			Level 3
Cash equivalents	$	—		$	—		$	—		$	12,000		$	—		$	—
Short-term investments	$	22,522		$	—		$	—		$	9,000		$	—		$	—
Foreign currency derivatives	$	—		$	20		$	—		$	—		$	—		$	—
Interest rate swaps	$	—		$	443		$	—		$	—		$	(2,354)		$	—

There were no transfers between levels during the periods presented.

12. Business Segments

We evaluate performance and allocate resources based on the Animal Health, Mineral Nutrition and Performance Products reporting segments. The Chief Executive Officer is the chief operating decision-maker (“CODM”) for the Company. We evaluate performance of our segments based on Adjusted EBITDA. Included in the segment Adjusted EBITDA analyses provided to the CODM is information on segment cost of sales and selling, general and administrative expenses. There are no other significant segment expense categories regularly provided to the CODM.

We calculate Adjusted EBITDA as net income plus (a) interest expense, net, (b) provision for income taxes or less benefit for income taxes, (c) depreciation and amortization, (d) other non-operating expense or less other income, as separately reported on our consolidated statements of operations, including foreign currency (gains) losses, net and (e) certain items that we consider to be unusual, non-operational or non-recurring. However, some of these items may not be applicable to the calculation of Adjusted EBITDA for our segments, as we do not typically include interest, other non-operating items, or income tax-related items in our segment results.

Certain of our costs and assets are not directly attributable to a segment or segments, and we refer to these items as Corporate. We do not allocate Corporate costs or assets to the other segments because they are not used to evaluate the segments’ operating results or financial position. Corporate costs include certain costs related to executive management, information technology, legal, finance, human resources and business development. The accounting policies of our segments are the same as those described in the summary of significant accounting policies included in Note 2 — Summary of Significant Accounting Policies and New Accounting Standards included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2025.


		Three Months						Nine Months
For the Periods Ended March 31		2026			2025			2026			2025
Net sales
Animal Health		$	291,225		$	258,377		$	864,658		$	670,318
Mineral Nutrition			73,418			66,774			205,351			189,086
Performance Products			18,900			22,674			51,337			58,114
Total segments		$	383,543		$	347,825		$	1,121,346		$	917,518

Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)


		Three Months				Nine Months
For the Periods Ended March 31		2026		2025		2026		2025
Animal Health
Net sales		$	291,225	$	258,377	$	864,658	$	670,318
Cost of sales			176,315		166,221		517,218		412,547
Selling, general and administrative expenses⁽¹⁾			54,935		46,133		154,385		131,513
Add: Depreciation and amortization			11,128		11,369		34,310		29,318
Add: Acquisition-related cost of goods sold⁽²⁾			—		1,708		1,956		3,342
Add: Phibro Forward income growth initiatives implementation costs - cost of goods sold ⁽³⁾			—		3,798		—		3,798
Add: Phibro Forward income growth initiatives implementation costs - SG&A ⁽³⁾			—		1,771		—		1,771
Subtract: Insurance proceeds⁽⁴⁾			—		(1,546)		(1,177)		(2,803)
Adjusted EBITDA			71,103		63,123		228,144		161,684

Mineral Nutrition
Net sales			73,418		66,774		205,351		189,086
Cost of sales			66,838		59,562		185,337		169,804
Selling, general and administrative expenses⁽¹⁾			1,987		1,974		5,606		5,611
Add: Depreciation and amortization			548		524		1,623		1,555
Adjusted EBITDA			5,141		5,762		16,031		15,226

Performance Products
Net sales			18,900		22,674		51,337		58,114
Cost of sales			14,693		17,491		40,657		45,258
Selling, general and administrative expenses⁽¹⁾			2,237		2,124		6,743		6,245
Add: Depreciation and amortization			249		277		716		902
Adjusted EBITDA			2,219		3,336		4,653		7,513

Adjusted EBITDA – Total segments		$	78,463	$	72,221	$	248,828	$	184,423
Reconciliation of Adjusted EBITDA to income before income taxes:
Less:
Interest expense, net			10,431		9,355		34,246		25,992
Depreciation and amortization – Total segments			11,925		12,170		36,649		31,775
Depreciation and amortization – Corporate			523		446		1,520		1,419
Corporate costs			17,662		17,335		58,105		50,706
Acquisition-related cost of goods sold⁽²⁾			—		1,708		1,956		3,342
Acquisition-related transaction costs			130		636		581		12,875
Stock-based compensation expense - named executive officer awards granted in fiscal year 2024			179		179		538		538
Phibro Forward income growth initiatives implementation costs - cost of goods sold ⁽³⁾			—		3,798		—		3,798
Phibro Forward income growth initiatives implementation costs - SG&A⁽³⁾			3,391		3,980		7,026		6,026
Insurance proceeds⁽⁴⁾			—		(1,546)		(3,786)		(2,803)
Foreign currency losses (gains), net			1,909		(5,528)		6,988		6,609
Income before income taxes		$	32,313	$	29,688	$	105,005	$	44,146

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(1)

Selling, general and administrative expenses primarily include compensation-related expenses for employees not directly involved in the production and sale of inventory, rent expenses, research and development costs, marketing expenses, and other general and administrative expenses.

(2)

Represents cost of goods sold related to the stepped-up value of inventory obtained in acquisitions.

(3)

Phibro Forward is a company-wide initiative focused on unlocking additional areas of revenue growth and cost savings. For the three and nine months ended March 31, 2026, this includes $3.4 million and $7.0 million, respectively, recorded within selling, general and administrative expenses primarily for consultancy costs related to the initiative. For the three and nine months ended March 31, 2025, this includes $5.3 million for non-cash asset write-offs, of which $3.8 million was recorded within cost of goods sold, and $1.5 million was recorded within selling, general and administrative expenses, related to the closure of an immaterial business within the Animal Health segment.

(4)

Represents insurance settlement gains, which are recorded within selling, general and administrative expenses.

The geographic location of property, plant and equipment, net and ROU operating lease assets was:


		March 31,		June 30,
As of		2026		2025
Property, plant and equipment, net and ROU operating lease assets
United States		$	234,496	$	239,874
Israel			84,533		74,403
Brazil			38,790		34,504
Ireland			28,551		25,141
Other			22,138		22,107
		$	408,508	$	396,029

Asset information is not provided for reportable segments in the information regularly provided to the CODM. Accordingly, such information is not disclosed in this footnote.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Introduction

Our management’s discussion and analysis of financial condition and results of operations (“MD&A”) is provided to assist readers in understanding our performance, as reflected in the results of our operations, our financial condition and our cash flows. The following discussion summarizes the significant factors affecting our consolidated operating results, financial condition, liquidity and cash flows as of and for the periods presented. This MD&A should be read in conjunction with our consolidated financial statements and related notes thereto included elsewhere in this Quarterly Report on Form 10-Q. Our future results could differ materially from our historical performance as a result of various factors such as those discussed in “Risk Factors” in Item 1A of our Annual Report and “Forward-Looking Statements.”

Overview of our business

Phibro Animal Health Corporation is a leading global diversified animal health and mineral nutrition company. We develop, manufacture and market a broad range of products for food and companion animals including poultry, swine, beef and dairy cattle, aquaculture, and dogs. Our products help prevent, control and treat diseases, and support nutrition to help improve animal health and well-being. In addition to animal health and mineral nutrition products, we manufacture and market specific ingredients for use in the personal care, industrial chemical and chemical catalyst industries.

Acquisition

In April 2024, the Company entered into a Purchase and Sale Agreement (the “Purchase Agreement”) with Zoetis Inc., a Delaware corporation (“Zoetis”) to acquire Zoetis’s medicated feed additive (“MFA”) portfolio, certain water-soluble products and related assets (the “Acquisition”). On October 31, 2024, the Company completed the Acquisition at a purchase price of approximately $297.5 million ($286.5 million, as adjusted, net of cash acquired). The Acquisition was funded by term loan borrowings under the 2024 Credit Agreement. Since the Acquisition, the product portfolio acquired has contributed $478.7 million to our overall net sales, of which $95.9 million and $77.0 million were recorded in the three months ended March 31, 2026 and 2025, and $270.5 million and $113.7 million were recorded in the nine months ended March 31, 2026 and 2025, respectively. Also included in the Acquisition were six manufacturing sites, comprised of four in the U.S., one in Italy and one in China. The results of operations of the Acquisition are included in our consolidated statements of operations from the date of acquisition and reported within the Animal Health segment.

2024 Credit Agreement

In July 2024, we entered into a Credit Agreement (the “2024 Credit Agreement”) with a group of lenders. Initial borrowings were used to refinance all our outstanding debt, to pay fees and expenses of the transaction, and for ongoing working capital requirements and general corporate purposes. Borrowings under the Delayed Draw Term A-1 and A-2 Loans were used to finance the purchase price of the Acquisition. See “Notes to Consolidated Financial Statements — Debt — 2024 Credit Agreement” for additional information.

On April 28, 2026, the 2024 Credit Agreement was amended to increase our borrowing capacity by expanding the Revolving Credit Commitments by $125.0 million, from $310.0 million to an aggregate commitment of $435.0 million. The expanded borrowing capacity provides the Company with enhanced operating flexibility. Fees of approximately $0.6 million were incurred to execute this amendment and will be amortized to interest expense through the maturity date of the Revolving Credit Commitments.

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Armed Conflicts

Middle East Conflicts

Since October 2023, Israel has been engaged in ongoing hostilities along its northern and southern borders, and tensions in the broader Middle East, including with Iran, remain elevated. The situation in the region is volatile, unpredictable, and subject to rapid escalation.

We have three manufacturing sites in Israel. A manufacturing plant in Neot Hovav that produces active pharmaceutical ingredients for certain of our anticoccidial and antimicrobial products, a facility in Beit Shemesh that produces vaccines and a plant in Petah Tikvah that manufactures premix products and nutritional products. In addition, we have an office location near Tel Aviv in Airport City. As of March 31, 2026, we had approximately 520 employees located in Israel. We have confidence in our ability to meet our supply commitment to customers and maintain sufficient inventory to continue regional support. Our operations in Israel have navigated numerous challenging situations over the years.

The continuation and/or escalation of conflicts in the region may trigger additional bans, economic and other sanctions, as well as broader military actions, which could include neighboring nations and their respective allies. The potential impact of the current conflicts, or escalation thereof, on our business is unclear but may include, without limitation, the possible disruption of our operations, particularly at our facilities in Israel, supply chain and logistics disruptions, personnel and raw material shortages, and other consequences, including as a result of the actions of, or disruption of the operations of, certain regulatory and governmental authorities and of certain of our suppliers, collaborative partners, licensees, manufacturing sites, distributors and customers.

Our Israeli manufacturing facilities and local operations account for 17% of our consolidated assets as of March 31, 2026, and 16% of our consolidated net sales for the nine months ended March 31, 2026.

Russia and Ukraine

In response to the armed conflict between Russia and Ukraine that began in February 2022, we and our employees have provided support to Ukraine in the form of monetary donations, free products and humanitarian services. Our limited intent for the Russian market is to continue to provide medicines and vaccines, and related regulatory and technical support, to help existing customers combat disease challenges in the production of food animals on their farms. We have no production or direct distribution operations and no planned investments in Russia.

Since the conflict began, the United States and other North Atlantic Treaty Organization (“NATO”) member states, as well as non-member states, announced targeted economic sanctions on Russia, including certain Russian citizens and enterprises. The continuation or escalation of the conflict may trigger additional economic and other sanctions, as well as broader military conflict. The potential impacts of any resulting bans, sanctions, boycotts or broader military conflicts on our business are uncertain. The potential impacts could include supply chain and logistics disruptions, macroeconomic impacts resulting from the exclusion of Russian financial institutions from the global banking system, volatility in foreign exchange rates and interest rates, inflationary pressures on raw materials and energy as well as heightened cybersecurity threats. Our sales to Russia and Ukraine for the twelve months ended March 31, 2026 represented approximately 1% of consolidated net sales.

We cannot know if the conflict could escalate and result in broader economic and security concerns that could adversely affect our business, financial condition, or results of operations.

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Macroeconomic developments

Macroeconomic developments, such as adverse economic conditions worldwide, international conflicts, or efforts of governments to stimulate or stabilize the economy or manage trade disputes, may adversely impact our business. For example, the U.S. government has instituted or proposed changes in trade policies that include the renegotiation or termination of existing trade agreements, the imposition of higher tariffs on imports into the United States, and other government regulations affecting trade between the United States and other countries. These measures could introduce supply chain inefficiencies, challenge current trade agreements with certain nations, and affect the cost and availability of materials critical to our products. Any such tariffs, if and when enacted, and any further legislation or actions taken by the U.S. government that restrict trade, such as additional tariffs, trade barriers, and other protectionist or retaliatory measures could adversely impact our ability to sell products and services in our markets. Countries may, in response to any U.S. actions, adopt retaliatory or other protectionist measures that could further limit our ability to offer our products and services. The ultimate impact of any tariffs will depend on various factors, including if any tariffs are ultimately implemented, the timing of implementation, and the amount, scope, and nature of the tariffs.

We believe global population growth, the growth of the global middle class and the productivity improvements needed due to limitations of arable land and water supplies have supported and will continue to support growth of the animal health industry.

Regulatory developments

In April 2016, the Food and Drug Administration (“FDA”) began initial steps to withdraw approval of carbadox (the active ingredient in our Mecadox product) via a regulatory process known as a Notice of Opportunity for Hearing (“NOOH”), due to concerns that certain residues from the product may persist in animal tissues for longer than previously determined. In the years following, Phibro has continued an ongoing process of responding collaboratively and transparently to the FDA’s CVM inquiries and has provided extensive and meticulous research and data that confirmed the safety of carbadox. In July 2020, the FDA announced it would not proceed to a hearing on the scientific concerns raised in the 2016 NOOH, consistent with the normal regulatory procedure, but instead announced that it was withdrawing the 2016 NOOH and issuing a proposed order to review the regulatory method for carbadox. Phibro reiterated the safety of carbadox and the appropriateness of the regulatory method and offered to work with the CVM to generate additional data to support the existing regulatory method or select a suitable alternative regulatory method.

In March 2022, the FDA held a Part 15 virtual public hearing seeking data and information related to the safety of carbadox in which Phibro participated and again detailed the research and data that confirm the safety of carbadox. In November 2023, the FDA issued a final order to revoke the approved method for detecting carbadox residues. The FDA also provided notice in the Federal Register proposing to withdraw approval of all NADAs providing for use of carbadox in medicated swine feed and announcing an opportunity for Phibro to request a hearing on this proposal. This second action is based on CVM’s determination that there is no approved regulatory method to detect carbadox residues in the edible tissues of the treated swine. Phibro is continuing to defend swine producers’ ability to use Mecadox. We have requested a full evidentiary hearing on the merits before an administrative law judge. In January 2024, Phibro filed a lawsuit in the D.C. Federal District Court asking the court to invalidate the order which revoked the regulatory method for carbadox. Should we be unable to successfully defend the safety of the product, the loss of carbadox sales will have an adverse effect on our financial condition and results of operations. Sales of Mecadox (carbadox) for the twelve months ended March 31, 2026 were approximately $22 million. As of the date of the filing of this Quarterly Report on Form 10-Q, Mecadox continues to be available for use by swine producers.

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In 2018, the Ministry of Agriculture in Brazil (“MAPA”), published an ordinance to ban the use of antimicrobials used at sub-therapeutic levels for growth promotion and feed efficiency in animal feed. The ordinance was in response to international pressure and scientific concerns about the potential risks of antimicrobial resistance. The Company’s virginiamycin product is currently registered and used for growth promotion in cattle, broilers, layers and swine in Brazil. The Company and key stakeholders (trade associations) requested that MAPA allow sponsors time to shift from growth promotion claims to therapeutic claims. In 2022 and more recently in 2025, additional MAPA public consultations were held to discuss the prohibition on the use of antimicrobials as growth promoters. These discussions affect the Company’s virginiamycin product in Brazil, which is the only remaining key livestock production market where virginiamycin does not yet have therapeutic indications.. On April 27, 2026, MAPA published its Ordinance prohibiting the importation, manufacture, marketing and use of performance enhancing feed additives containing antimicrobials classified as important in human or veterinary medicine, including virginiamycin and bacitracin. There will be a transition period of 180 days from the date of the ordinance, during which time companies and customers may continue to use and sell the products under their current labels. The Company has been actively conducting studies to address MAPA’s requirements to obtain therapeutic indications for virginiamycin. These registrations are in the final stages of review and approval by MAPA and are expected during the transition period. Phibro’s bacitracin product already carries therapeutic claims in Brazil.

Analysis of the consolidated statements of operations

Summary Results of Operations


		Three Months												Nine Months
For the Periods Ended March 31		2026			2025			Change						2026			2025			Change

		(in thousands, except per share amounts and percentages)
Net sales		$	383,543		$	347,825		$	35,718		10	%		$	1,121,346		$	917,518		$	203,828		22	%
Gross profit			125,675			104,568			21,107		20	%			378,114			289,933			88,181		30	%
Selling, general and administrative expenses			81,022			71,053			9,969		14	%			231,875			213,186			18,689		9	%
Operating income			44,653			33,515			11,138		33	%			146,239			76,747			69,492		91	%
Interest expense, net			10,431			9,355			1,076		12	%			34,246			25,992			8,254		32	%
Foreign currency losses (gains), net			1,909			(5,528)			7,437		*				6,988			6,609			379		6	%
Income before income taxes			32,313			29,688			2,625		9	%			105,005			44,146			60,859		*
Provision for income taxes			8,289			8,808			(519)		(6)	%			26,995			13,106			13,889		*
Net income		$	24,024		$	20,880		$	3,144		15	%		$	78,010		$	31,040		$	46,970		*

Net income per share
Basic		$	0.59		$	0.52		$	0.07		13	%		$	1.92		$	0.77		$	1.15		*
Diluted		$	0.59		$	0.51		$	0.08		16	%		$	1.90		$	0.76		$	1.14		*

Weighted average number of shares outstanding
Basic			40,551			40,520									40,540			40,509
Diluted			41,037			40,709									40,956

PHIBRO ANIMAL HEALTH CORP 10-Q