PHIBRO ANIMAL HEALTH CORP

Previous wording

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 below. 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.”

Current wording

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.”

Previous wording

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 $302.9 million ($291.9 million, as adjusted, net of cash acquired), subject to certain further adjustments set forth in the Purchase Agreement. The Acquisition was funded by term loan borrowings under the 2024 Credit Agreement. The product portfolio acquired, which generated $407.6 million in revenue in 2023, is comprised of more than 37 product lines that are sold in approximately 80 countries. Also included in the Acquisition are 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.

Current wording

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 $288.7 million to our overall net sales, of which $80.5 million was recorded in the three months ended September 30, 2025. Also included in the Acquisition are 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.

Previous wording

On October 7, 2023, Hamas militants crossed into Israel from Gaza in a large-scale, surprise terrorist attack. Hamas terrorists invaded Israel, first firing rockets into the country and then carrying out attacks inflicting mass casualties with hundreds more taken hostage. In order to provide immediate assistance to the victims of the attacks and their families, we and our employees provided monetary donations that were distributed to charities that offered relief services, welfare, equipment, food and other necessities. Since the October 2023 attack, there have been continued and escalating hostilities along Israel’s northern border with Lebanon (with the Hezbollah terror organization) and southern border (with the Houthi movement in Yemen). Although a ceasefire was brokered between Israel and Hezbollah in November 2024, and in January 2025, a temporary ceasefire went into effect between Israel and Hamas, hostilities in the region have recently resumed. The possibility of negotiations for renewed ceasefire agreements between Israel and Hamas and Israel and Hezbollah remain uncertain and difficult to predict and until resolved, may continue to cause conflict in the region.

Current wording

Since the October 2023 attack on Israel by Hamas, there have been prolonged hostilities along Israel’s northern border with Lebanon (with the Hezbollah terror organization) and southern border (with the Houthi movement in Yemen), as well as hostilities with Iran. Although a ceasefire recently went into effect between Israel and Hamas, the situation remains fluid. The possibility of success for the ceasefire agreement between Israel and Hamas and general de-escalation of tensions in the regions remain uncertain and difficult to predict and, until resolved, may continue to cause conflict in the region.

Previous wording

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, 2025, we had approximately 500 employees located in Israel. While we initially had some disruption to our operations at the onset of the Israel-Hamas conflict, at the current time, we have confidence in our ability to meet our supply commitment to customers and maintain sufficient inventory to continue regional support. A significant escalation of the tensions in Israel occurred on April 13, 2024, when Iran launched more than 300 drones and missiles against Israel, but we had no material disruption to our business. Iran has threatened to continue to attack Israel. Iran is also believed to have a strong influence among extremist groups in the region, such as Hamas in Gaza, Hezbollah in Lebanon, the Houthi movement in Yemen and various rebel militia groups in Syria and Iraq. While the situation surrounding the ongoing conflict remains fluid, our operations in Israel have navigated numerous challenging situations over the years.

Current wording

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 September 30, 2025, we had approximately 500 employees located in Israel. While we initially had some disruption to our operations at the onset of the Israel-Hamas conflict, at the current time, we have confidence in our ability to meet our supply commitment to customers and maintain sufficient inventory to continue regional support. While the situation surrounding the ongoing conflict remains fluid, our operations in Israel have navigated numerous challenging situations over the years.

Previous wording

The resumption, prolonged continuation or escalation of this conflict may trigger bans, economic and other sanctions, as well as broader military conflict, which could include neighboring nations and their respective allies. The potential impact of the current conflict, 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 16% of our consolidated assets as of March 31, 2025, and 19% of our consolidated net sales for the nine months ended March 31, 2025.

Current wording

The resumption, prolonged continuation or escalation of this conflict may trigger bans, economic and other sanctions, as well as broader military conflict, which could include neighboring nations and their respective allies. The potential impact of the current conflict, 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 16% of our consolidated assets as of September 30, 2025, and 17% of our consolidated net sales, for the three months ended September 30, 2025.

Previous wording

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 Trump administration recently 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 aim to address broader policy goals but could introduce supply chain inefficiencies, challenge current trade agreements with certain nations, and affect the cost and availability of materials critical to project execution. Any such tariffs, if and when enacted, and any further legislation or actions taken by the U.S. federal 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.

Current wording

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.

Previous wording

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 Center for Veterinary Medicine (“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.

Current wording

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.

Previous wording

Net sales of $670.3 million for the nine months ended March 31, 2025 increased $155.4 million, or 30%. Net sales of MFAs and other increased $135.6 million, or 45%, due to incremental revenues of $113.7 million from sales of products from the Zoetis MFA portfolio acquired on October 31, 2024, increased demand for our MFAs in international regions and higher demand for processing aids used in the ethanol fermentation industry.

Current wording

Net sales of $283.5 million for the three months ended September 30, 2025, increased $100.9 million, or 55%. Net sales of MFAs and other increased $87.4 million, or 81%, due to incremental revenues of $80.5 million from the MFA portfolio acquired on October 31, 2024 and increased demand for certain of our MFAs in North and South America.

Previous wording

Net sales of nutritional specialty products increased $10.1 million, or 8%, primarily due to increased domestic dairy demand and higher sales of microbial and companion animal products.

Current wording

Net sales of nutritional specialty products increased $5.5 million, or 13%, primarily due to increased North American demand for dairy and higher sales of microbial products.

Previous wording

Net sales of vaccines increased $9.7 million, or 11%, due primarily to continued growth of poultry products in Latin America and increased domestic demand for swine products, partially offset the impact of import and other regulations in Turkey and Asia.

Current wording

Net sales of vaccines increased $8.1 million, or 25%, primarily due to continued growth of poultry products in Latin America, plus an increase in international demand.

Previous wording

Net sales of $189.1 million for the nine months ended March 31, 2025 increased $7.5 million, or 4%, due to an increase in demand for copper and trace minerals.

Current wording

Net sales of $63.0 million for the three months ended September 30, 2025, increased $3.9 million, or 7%, primarily due to an increase in demand for copper and trace minerals.

Previous wording

Net sales of $22.7 million for the three months ended March 31, 2025 increased $5.0 million, or 28%, as a result of higher demand for the ingredients used in personal care products.

Current wording

Net sales of $17.4 million for the three months ended September 30, 2025, decreased $1.4 million, or 7%, as a result of lower demand for the ingredients used in personal care products.

Previous wording

Gross profit of $104.6 million for the three months ended March 31, 2025 increased $25.0 million, or 31%, as compared to the three months ended March 31, 2024. Gross margin decreased 10 basis points to 30.1% of net sales for the three months ended March 31, 2025, as compared to 30.2% for the three months ended March 31, 2024. The comparison to the prior year includes $3.8 million of current period inventory write-offs attributable to the closure of an immaterial business and a net increase of $1.5 million for acquisition-related cost of goods sold related to purchase accounting adjustments for acquisitions. Excluding these items, gross profit increased $30.3 million, or 38%, and gross margin increased 140 basis points to 31.6% of net sales due to increased sales, an increase in average selling prices, and the favorable impact of foreign currency exchange rates, partially offset by higher distribution costs.

Current wording

Gross profit of $119.8 million for the three months ended September 30, 2025, increased $36.3 million, or 43%, as compared to the three months ended September 30, 2024. Gross margin increased 80 basis points to 32.9% of net sales for the three months ended September 30, 2025, as compared to 32.1% for the three months ended September 30, 2024. Current period gross profit includes $1.1 million for acquisition-related cost of goods sold related to purchase accounting adjustments for the Acquisition. Excluding this purchase accounting item, gross profit increased $37.4 million, or 45%, and increased 110 basis points to 33.2% of net sales due to increased sales, favorable product mix, and an increase in average selling prices, partially offset by higher input and distribution costs.

Previous wording

Animal Health gross profit increased $62.4 million, primarily driven by higher sales volume, higher average selling prices, and the favorable impact of foreign currency exchange rates, partially offset by higher distribution costs. Mineral Nutrition gross profit increased $4.6 million, driven by higher average selling prices. Performance Products gross profit increased $3.6 million, driven by increased sales volumes.

Current wording

Animal Health gross profit, excluding the purchase accounting item discussed above, increased $37.4 million due to higher sales volume, favorable product mix, and an increase in average selling prices, partially offset by higher input and distribution costs. Mineral Nutrition gross profit increased $0.5 million, driven by favorable product mix. Performance Products gross profit decreased $0.5 million primarily as a result of lower demand.

Previous wording

Selling, general and administrative expenses (“SG&A”) of $71.1 million for the three months ended March 31, 2025 increased $11.4 million, or 19%, as compared to the three months ended March 31, 2024. SG&A for the three months ended March 31, 2025 included $4.0 million of costs associated with Phibro Forward income growth initiatives, $0.6 million for acquisition-related costs, and $0.2 million of stock-based compensation expense, partially offset by $1.5 million related to an insurance settlement gain. SG&A for the three months ended March 31, 2024 included $0.5 million of acquisition-related costs and $0.1 million of stock-based compensation expense, partially offset by $0.3 million related to an insurance settlement gain. Excluding these items, SG&A increased $8.5 million.

Current wording

Selling, general and administrative expenses (“SG&A”) of $68.5 million for the three months ended September 30, 2025, increased $2.7 million, or 4%, as compared to the three months ended September 30, 2024. SG&A for the three months ended September 30, 2025 included $0.3 million for acquisition-related costs and $0.2 million of stock-based compensation expense related to awards granted to certain named executive officers in fiscal year 2024, partially offset by $3.7 million of insurance proceeds. SG&A for the three months ended September 30, 2024 included $3.4 million for acquisition-related costs, $0.4 million of costs associated with Phibro Forward income growth initiatives, and $0.2 million of stock-based compensation expense related to awards granted to certain named executive officers in fiscal year 2024. Excluding these items, SG&A increased $10.0 million, or 16%.

Previous wording

Animal Health SG&A increased $5.1 million, primarily due to an increase in employee-related costs due in part to the incremental headcount added as part of the Acquisition. Mineral Nutrition and Performance Products SG&A was comparable to the prior year. Corporate costs increased by $3.2 million due to an increase in employee-related costs and professional fees.

Current wording

Animal Health SG&A increased $6.9 million, primarily as a result of an increase in employee-related costs, due in part to support business activities related to the Acquisition. Mineral Nutrition SG&A decreased $0.2 million and Performance Products SG&A was comparable to the prior year. Corporate costs increased by $3.3 million due to higher headcount and other employee costs.

Previous wording

Interest expense, net of $9.4 million for the three months ended March 31, 2025 increased by $4.8 million, as compared to the three months ended March 31, 2024, due to the higher debt levels associated with the financing of the Acquisition.

Current wording

Interest expense, net of $12.1 million for the three months ended September 30, 2025 increased by $4.4 million, as compared to the three months ended September 30, 2024, due to higher debt levels associated with the financing of the Acquisition, as well as the expiration of a favorable interest rate swap agreement on $300.0 million of notional debt principal.

Previous wording

Foreign currency gains for the three months ended March 31, 2025 were $5.5 million, as compared to $2.4 million of net losses for the three months ended March 31, 2024. Current period gains were driven by fluctuations in certain currencies related to the U.S. dollar, most prominently, in the Brazil Real and in the Euro. Prior year period losses were driven in large part by fluctuations in the Brazil Real.

Current wording

Foreign currency losses, net for the three months ended September 30, 2025, were $2.9 million, as compared to $0.4 million of net losses for the three months ended September 30, 2024. Current year losses were driven by fluctuations in certain currencies relative to the U.S. dollar, most notably in the Argentine Peso and Israeli New Shekel.

Previous wording

Net income was $31.0 million for the nine months ended March 31, 2025, as compared to net income of $1.7 million for the nine months ended March 31, 2024. Operating income increased $41.8 million driven by higher gross profit, partially offset by higher SG&A of $22.1 million, which included a net increase of $12.4 million in acquisition-related costs and $6.0 million of costs associated with Phibro Forward income growth initiatives. Interest expense, net increased $12.2 million due to higher debt levels and the associated with the refinancing of the Company’s debt. Foreign currency losses, net decreased by $10.0 million. Income tax expense increased by $10.3 million.

Current wording

Net income of $26.5 million for the three months ended September 30, 2025 increased $19.6 million as compared to net income of $7.0 million for the three months ended September 30, 2024. Operating income increased $33.6 million primarily due to higher gross profit. Interest expense, net increased $4.4 million due to higher debt levels associated with the financing of the Acquisition and the expiration of an interest rate swap agreement. Foreign currency losses, net increased by $2.5 million. Income tax expense increased by $7.1 million.

Previous wording

Net (decrease) increase in cash and cash equivalents was as follows:

Current wording

Net increase (decrease) in cash and cash equivalents was as follows:

Previous wording

Operating activities provided $58.9 million of net cash for the nine months ended March 31, 2025. Cash provided by net income, adjusted for the non-cash items, including depreciation and amortization, was $66.2 million. Cash used in the ordinary course of business from changes in operating assets and liabilities, net of the impact of the net assets acquired from the Acquisition, was $7.3 million. Accounts receivable used $29.3 million of cash due to higher sales. Inventories used $38.1 million of cash due to increased quantities on hand due to timing of inventory purchases and forecasted future demand. Accounts payable provided $42.9 million of cash due to timing of purchases and payments. Accrued expenses and other liabilities provided cash of $21.0 million, primarily due to timing of incurrence.

Current wording

Operating activities provided $9.3 million of net cash for the three months ended September 30, 2025. Cash provided by net income, adjusted for the non-cash items, including depreciation and amortization, was $42.8 million. Cash used in the ordinary course of business from changes in operating assets and liabilities was $33.5 million. Accounts receivable provided $11.4 million of cash due to the timing of collection of sales proceeds. Inventories used $26.2 million of cash due to increased quantities on hand due to timing of inventory purchases and forecasted future demand. Accounts payable used $4.6 million of cash due to timing of purchases and payments. Accrued expenses and other liabilities used cash of $13.7 million, primarily due to incentive compensation payments.

Previous wording

Investing activities used $281.7 million of net cash for the nine months ended March 31, 2025, which includes the purchase price paid for the Acquisition of $291.9 million, net of cash acquired. Capital expenditures totaled $25.2 million, as we continue to invest in expanding production capacity and productivity improvements. Purchases of our short-term investments used $10.0 million of cash, and maturities of our short-term investments provided $44.0 million in cash.

Current wording

Investing activities used $21.0 million of net cash for the three months ended September 30, 2025. Capital expenditures were $13.8 million, as we continued to invest in expanding production capacity and productivity improvements. Purchases of our short-term investments used $12.5 million in cash, and maturities of our short-term investments provided $9.0 million in cash. Investing activities for the three months ended September 30, 2025 included funding of $5.0 million of investments and loans for strategic partnerships and the receipt of proceeds of $1.6 million from a corporate-owned life insurance policy.

Previous wording

Financing activities provided $214.9 million of net cash for the nine months ended March 31, 2025 and reflect the impact of the refinancing of our debt portfolio in July 2024 and the financing of the Acquisition. Proceeds of $300.0 million from the refinancing, as well as revolving credit facility borrowings were used to pay the remaining principal balances of the outstanding debt of $313.1 million, and we used the proceeds $350.0 million in term loan borrowings to finance the purchase price of the Acquisition. Net revolver payments on our credit facilities used $84.0 million in cash. We paid $7.8 million in scheduled quarterly principal payments on long-term debt during the nine months ended March 31, 2025. We also paid $10.4 million in debt issuance costs related to the refinancing and $14.6 million in dividends to holders of our Class A common stock and Class B common stock.

Current wording

Financing activities provided $16.3 million of net cash for the three months ended September 30, 2025. Net revolver borrowings on our credit facility provided $28.0 million in cash. We paid $4.9 million in dividends to holders of our Class A common stock and Class B common stock. We also paid $4.1 million in scheduled quarterly principal payments on long-term debt and $2.7 million in financed insurance premiums during the three months ended September 30, 2025.

Previous wording

We believe our cash on hand, operating cash flows and financing arrangements, including the availability of borrowings under the 2024 Credit Facility, will be sufficient to support our ongoing cash needs. We have considered the current and potential future effects of the macroeconomic market conditions in the financial markets. At this time, we expect adequate liquidity for at least the next twelve months. We can provide no assurance that our liquidity and capital resources will be adequate for future funding requirements. We believe we will be able to comply with the terms of the covenants under the 2024 Credit Facilities based on our operating plan. In the event of adverse operating results and/or violation of covenants under the facilities, there can be no assurance we would be able to obtain waivers or amendments. Other risks to our meeting future funding requirements include global economic conditions and macroeconomic, business and financial disruptions that could arise, including ongoing conflicts between Russia and Ukraine and hostilities in the Middle East. There can be no assurance that a challenging economic environment or an economic downturn would not affect our liquidity or ability to obtain future financing or fund operations or investment opportunities. In addition, our debt covenants may restrict our ability to invest.

Current wording

We believe our cash on hand, operating cash flows and financing arrangements, including the availability of borrowings under the 2024 Credit Facility, will be sufficient to support our ongoing cash needs. We have considered the current and potential future effects of the macroeconomic market conditions in the financial markets. At this time, we expect adequate liquidity for at least the next twelve months. We can provide no assurance that our liquidity and capital resources will be adequate for future funding requirements. We believe we will be able to comply with the terms of the covenants under the 2024 Credit Facilities based on our operating plan. In the event of adverse operating results and/or violation of covenants under the facilities, there can be no assurance we would be able to obtain waivers or amendments. Other risks to our meeting future funding requirements include global economic conditions and macroeconomic, business and financial disruptions that could arise, including armed conflicts between Israel and Hamas (and broader military conflict in the region) and between Russia and Ukraine. There can be no assurance that a challenging economic environment or an economic downturn would not affect our liquidity or ability to obtain future financing or fund operations or investment opportunities. In addition, our debt covenants may restrict our ability to invest.

Previous wording

Certain relevant measures of our liquidity and capital resources follow:

Current wording

Certain relevant measures of our liquidity and capital resources are as follows:

Previous wording

As of March 31, 2025, we had $92.0 million in outstanding borrowings under the 2024 Revolver and outstanding letters of credit and other commitments of $2.4 million, leaving $215.6 million available for further borrowings and letters of credit, subject to restrictions in our 2024 Credit Facilities

Current wording

As of September 30, 2025, we had $115.0 million in outstanding borrowings under the 2024 Revolver and had outstanding letters of credit and other commitments of $2.9 million, leaving $192.1 million available for further borrowings and letters of credit, subject to restrictions in our 2024 Credit Facilities.

Previous wording

We currently intend to pay quarterly dividends on our Class A common stock and Class B common stock, subject to approval from the Board of Directors. On May 6, 2025, our Board of Directors declared a cash dividend of $0.12 per share on Class A common stock and Class B common stock, payable on June 25, 2025. Our future ability to pay dividends will depend upon our results of operations, financial condition, capital requirements, our ability to obtain funds from our subsidiaries and other factors that our Board of Directors deems relevant. Additionally, the terms of our current and any future agreements governing our indebtedness could limit our ability to pay dividends or make other distributions.

Current wording

We currently intend to pay quarterly dividends on our Class A common stock and Class B common stock, subject to approval from the Board of Directors. On November 4, 2025, our Board of Directors declared a cash dividend of $0.12 per share on Class A common stock and Class B common stock, payable on December 17, 2025, to stockholders of record at the close of business on November 26, 2025. Our future ability to pay dividends will depend upon our results of operations, financial condition, capital requirements, our ability to obtain funds from our subsidiaries and other factors that our Board of Directors deems relevant. Additionally, the terms of our current and any future agreements governing our indebtedness could limit our ability to pay dividends or make other distributions.

Previous wording

As of March 31, 2025, our cash and cash equivalents and short-term investments included $68.4 million held by our international subsidiaries. There are no restrictions on cash distributions to PAHC from our international subsidiaries. Distributions may be subject to taxation by U.S. or non-U.S. taxing authorities.

Current wording

As of September 30, 2025, our cash and cash equivalents and short-term investments included $84.6 million held by our international subsidiaries. There are no restrictions on cash distributions to PAHC from our international subsidiaries. Distributions may be subject to taxation by U.S. or non-U.S. taxing authorities.

Previous wording

Adjusted EBITDA is an alternative view of performance used by management as our primary operating measure, and we believe that investors’ understanding of our performance is enhanced by disclosing this performance measure. We report Adjusted EBITDA to reflect the results of our operations prior to considering certain income statement elements and to make financial and operating decisions. We calculate EBITDA as net income plus (i) interest expense, net, (ii) provision for income taxes or less benefit for income taxes and (iii) depreciation and amortization. We calculate Adjusted EBITDA as EBITDA plus (a) other expense or less other income, as separately reported on our consolidated statements of operations, including foreign currency (gains) losses, net and (b) certain items that we consider to be unusual, non-operational or non-recurring. The Adjusted EBITDA measure is not, and should not be viewed as, a substitute for GAAP reported net income and should not be viewed as a measure of liquidity.

Current wording

Adjusted EBITDA is an alternative view of performance used by management as our primary operating measure, and we believe that investors’ understanding of our performance is enhanced by disclosing this performance measure. We report Adjusted EBITDA to reflect the results of our operations prior to considering certain income statement elements and to make financial and operating decisions. We calculate EBITDA as net income (loss) plus (i) interest expense, net, (ii) provision for income taxes or less benefit for income taxes, and (iii) depreciation and amortization. We calculate Adjusted EBITDA as EBITDA plus (a) other expense or less other income, as separately reported on our consolidated statements of operations, including foreign currency (gains) losses, net and (b) certain items that we consider to be unusual, non-operational or non-recurring. The Adjusted EBITDA measure is not, and should not be viewed as, a substitute for GAAP reported net income (loss) and should not be viewed as a measure of liquidity.

Previous wording

Despite the importance of this measure to management in goal setting and performance measurement, Adjusted EBITDA is a non-GAAP financial measure that has no standardized meaning prescribed by GAAP and, therefore, has limits in its usefulness to investors. Because of its non-standardized definition, Adjusted EBITDA, unlike GAAP net income, may not be comparable to the calculation of similar measures of other companies. Adjusted EBITDA is presented to permit investors to more fully understand how management assesses performance.

Current wording

Despite the importance of this measure to management in goal setting and performance measurement, Adjusted EBITDA is a non-GAAP financial measure that has no standardized meaning prescribed by GAAP and, therefore, has limits in its usefulness to investors. Because of its non-standardized definition, Adjusted EBITDA, unlike GAAP net income (loss), may not be comparable to the calculation of similar measures of other companies. Adjusted EBITDA is presented to permit investors to more fully understand how management assesses performance.

Previous wording

Adjusted net income and adjusted diluted earnings per share represent alternative views of performance, and we believe investors’ understanding of our performance is enhanced by disclosing these performance measures. We report adjusted net income and adjusted diluted earnings per share to portray the results of our operations prior to considering certain income statement elements. We calculate adjusted net income as net income plus (i) acquisition-related intangible amortization and other acquisition-related items, (ii) certain items we consider to be unusual, non-operational or non-recurring, (iii) stock-based compensation expense, (iv) foreign currency (gains) losses, as separately reported on our consolidated statements of operations, and (v) the income tax effect of pre-tax income adjustments and certain income tax items. Adjusted diluted earnings per share is calculated using the adjusted net income divided by the diluted weighted average number of shares. The adjusted net income and adjusted diluted earnings per share measures are not, and should not be viewed as, a substitute for GAAP reported net income.

Current wording

Adjusted net income and adjusted diluted earnings per share represent alternative views of performance, and we believe investors’ understanding of our performance is enhanced by disclosing these performance measures. We report adjusted net income and adjusted diluted earnings per share to portray the results of our operations prior to considering certain income statement elements. We calculate adjusted net income as net income (loss) plus (i) acquisition-related depreciation associated with the step-up of fair value of the acquired fixed assets, acquisition-related intangible amortization and other acquisition-related items, (ii) certain items we consider to be unusual, non-operational or non-recurring, including certain stock-based compensation awards, (iii) foreign currency (gains) losses, as separately reported on our consolidated statements of operations, and (iv) the income tax effect of pre-tax income adjustments and certain income tax items. Adjusted diluted earnings per share is calculated using the adjusted net income divided by the diluted weighted average number of shares. The adjusted net income and adjusted diluted earnings per share measures are not, and should not be viewed as, a substitute for GAAP reported net income (loss).

Previous wording

Adjusted net income and adjusted diluted earnings per share are non-GAAP financial measures that have no standardized meaning prescribed by GAAP and, therefore, have limits in their usefulness to investors. Because of its non-standardized definition, adjusted net income and adjusted diluted earnings per share, unlike GAAP net income, may not be comparable to the calculation of similar measures of other companies. Adjusted net income and adjusted diluted earnings per share are presented to permit investors to more fully understand how management assesses performance.

Current wording

Adjusted net income and adjusted diluted earnings per share are non-GAAP financial measures that have no standardized meaning prescribed by GAAP and, therefore, have limits in their usefulness to investors. Because of its non-standardized definition, adjusted net income and adjusted diluted earnings per share, unlike GAAP net income (loss), may not be comparable to the calculation of similar measures of other companies. Adjusted net income and adjusted diluted earnings per share are presented to permit investors to more fully understand how management assesses performance.