PHIBRO ANIMAL HEALTH CORP

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 $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.

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 $382.8 million to our overall net sales, of which $94.1 million and $36.7 million were recorded in the three months ended December 31, 2025 and 2024, and $174.6 million and $36.7 million were recorded in the six months ended December 31, 2025 and 2024, respectively. 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

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.

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 December 31, 2025, we had approximately 500 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.

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 September 30, 2025, and 17% of our consolidated net sales, for the three months ended September 30, 2025.

Current wording

The resumption of conflicts in this region 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.

Previous wording

Net sales of $363.9 million for the three months ended September 30, 2025, increased $103.5 million, or 40%, as compared to the three months ended September 30, 2024. Animal Health increased $100.9 million, Mineral Nutrition increased $3.9 million and Performance Products decreased $1.4 million.

Current wording

Net sales of $373.9 million for the three months ended December 31, 2025 increased $64.6 million, or 21%, as compared to the three months ended December 31, 2024. Animal Health increased $60.6 million, Mineral Nutrition increased $5.7 million, and Performance Products decreased $1.6 million.

Previous 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.

Current wording

Net sales of nutritional specialty products increased $4.3 million, or 9%, primarily due to increased North American demand for dairy.

Previous 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.

Current wording

Net sales of vaccines increased $4.5 million, or 13%, primarily due to continued growth of poultry products in Latin America and an increase in international demand, particularly in Southeast Asia.

Previous 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.

Current wording

Net sales of $15.0 million for the three months ended December 31, 2025 decreased $1.6 million, or 10%, as a result of lower demand for the ingredients used in personal care products.

Previous 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.

Current wording

Gross profit of $132.7 million for the three months ended December 31, 2025 increased $30.8 million, or 30%, as compared to the three months ended December 31, 2024. Gross margin increased 260 basis points to 35.5% of net sales for the three months ended December 31, 2025, as compared to 32.9% for the three months ended December 31, 2024. The comparison of gross profit to the prior year includes a net decrease of $0.8 million for acquisition-related cost of goods sold related to the purchase accounting for the Acquisition. Excluding this purchase accounting item, gross profit increased $30.0 million, or 29%, and gross margin increased 220 basis points to 35.7% of net sales due to increased sales, favorable product mix, and increases in average selling prices, partially offset by higher input and distribution costs and the unfavorable impact of changes in foreign currency exchange rates.

Previous 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%.

Current wording

SG&A of $82.3 million for the three months ended December 31, 2025 increased $6.0 million, or 8%, as compared to the three months ended December 31, 2024. SG&A for the three months ended December 31, 2025 included $3.6 million of costs associated with Phibro Forward income growth initiatives, $0.2 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. SG&A for the three months ended December 31, 2024 included $8.8 million of acquisition-related costs, $1.7 million of costs associated with Phibro Forward income growth initiatives, and $0.2 million of stock-based compensation expense, partially offset by $1.3 million related to an insurance settlement gain. Excluding these items, SG&A increased $11.4 million, or 17%.

Previous 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.

Current wording

Interest expense, net of $11.8 million for the three months ended December 31, 2025 increased $2.8 million, as compared to the three months ended December 31, 2024, due to higher average 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 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.

Current wording

Foreign currency losses, net for the three months ended December 31, 2025 were $2.1 million, as compared to $11.7 million of net losses for the three months ended December 31, 2024. Current period gains/losses were driven by fluctuations in certain currencies related to the U.S. dollar, most prominently, in the Argentine Peso and the Israeli New Shekel. Prior year period losses were driven in large part by fluctuations in the Brazil Real.

Previous wording

The provision for income taxes was $9.7 million and $2.6 million for the three months ended September 30, 2025 and 2024, respectively. The effective income tax rate was 26.9% and 27.5% for the three months ended September 30, 2025 and 2024, respectively.

Current wording

The provision for income taxes was $9.0 million and $1.7 million for the three months ended December 31, 2025 and 2024, respectively. The effective income tax rate was 24.6% and 34.2% for the three months ended December 31, 2025 and 2024, respectively.

Previous wording

The effective income tax rate in the current year was higher than our federal statutory rate of 21% due to the impact of higher Global Intangible Low-Tax Income tax expense and state and local income taxes. The provision for income taxes in the current year was also impacted by other taxes, primarily driven by a higher level of foreign income.

Current wording

The effective income tax rate in the current year was higher than the federal statutory rate of 21% due to the impact of Global Intangible Low-Tax Income tax expense and state and local income taxes. The provision for income taxes in the current year was also impacted by other taxes, primarily driven by the mix of foreign income.

Previous 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.

Current wording

Net sales of $573.4 million for the six months ended December 31, 2025 increased $161.5 million, or 39%. Net sales of MFAs and other increased $139.1 million, or 54%, due to incremental revenues of $137.9 million from sales of products from the MFA portfolio acquired on October 31, 2024 and increased demand for certain of our MFAs in North and South America, partially offset by the timing of purchases by a large customer.

Previous 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.

Current wording

Net sales of $131.9 million for the six months ended December 31, 2025 increased $9.6 million, or 8%, due to an increase in demand for copper, zinc and trace minerals.

Previous 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.

Current wording

Animal Health gross profit, excluding the purchase accounting item discussed above, increased $67.2 million, driven byhigher sales volume, favorable product mix, and increases in average selling prices, partially offset by higher input and distribution costs and the unfavorable impact of changes in foreign currency exchange rates. Mineral Nutrition gross profit increased $1.4 million, driven by increased sales volume. Performance Products gross profit decreased $1.2 million, primarily as a result of lower demand.

Previous 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.

Current wording

Animal Health SG&A, excluding the non-recurring Animal Health-related items discussed above, increased $13.9 million due to an increase in employee-related costs due in part to the incremental headcount added as part of the Acquisition. Mineral Nutrition SG&A was comparable to the prior year, and Performance Products SG&A increased $0.4 million. Corporate expenses, excluding the non-recurring Corporate-related items discussed above, increased $7.1 million due to an increase in employee-related costs.

Previous wording

The effective income tax rate in the current period included among other items (i) a $0.2 million expense from changes in uncertain tax positions related to prior years, (ii) $3.8 million in insurance proceeds taxed at a lower rate and (iii) certain other charges, including acquisition transaction costs, foreign currency losses, and certain stock-based compensation, which had lower tax benefit rates. The effective income tax rate in the prior year included (i) a $0.3 million expense from changes in uncertain tax positions related to prior years and (ii) certain other charges, including acquisition transaction costs, foreign currency losses, and stock-based compensation, which had lower tax benefit rates. Excluding these items, the effective income tax rate was 25.9% and 22.8% for the three months ended September 30, 2025 and 2024, respectively.

Current wording

The effective income tax rate in the current period included among other items, (i) a $0.4 million expense from changes in uncertain tax positions related to prior years, (ii) $3.8 million in insurance proceeds taxed at a lower rate, and (iii) certain other charges, including acquisition-related costs, foreign currency losses, and certain stock-based compensation, which had lower tax rates. The effective income tax rate in the prior year included (i) various exchange rate losses (ii) changes in uncertain tax positions related to prior years and (iii) certain other charges, including acquisition-related costs, which had lower tax rates. Excluding these items, the effective income tax rate was 24.7% and 25.0% for the six months ended December 31, 2025 and 2024, respectively.

Previous 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.

Current wording

Net income was $54.0 million for the six months ended December 31, 2025, as compared to net income of $10.2 million for the six months ended December 31, 2024. Operating income increased $58.4 million driven by higher gross profit, partially offset by higher SG&A of $8.7 million due to higher employee-related costs and a net increase of $1.6 million in costs associated with Phibro Forward income growth initiatives. Interest expense, net increased $7.2 million due to higher debt levels associated with the refinancing of the Company’s debt and the expiration of an interest rate swap agreement. Foreign currency losses, net decreased $7.1 million. Income tax expense increased $14.4 million.

Previous wording

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

Current wording

The net decrease in cash and cash equivalents was as follows:

Previous 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.

Current wording

Operating activities provided $28.7 million of net cash for the six months ended December 31, 2025. Cash provided by net income, adjusted for the non-cash items, including depreciation and amortization, was $87.3 million. Cash used in the ordinary course of business from changes in operating assets and liabilities was $58.6 million. Accounts receivable provided $13.7 million of cash due to the timing of collection of sales proceeds and higher sales. Inventories used $73.2 million of cash due to increased quantities on hand due to timing of inventory purchases and forecasted future demand. Accounts payable used $3.9 million of cash due to timing of purchases and payments. Accrued expenses and other liabilities used cash of $2.7 million, primarily due to timing of incurrence.

Previous 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.

Current wording

Investing activities used $38.2 million of net cash for the six months ended December 31, 2025. Capital expenditures were $24.9 million, as we continue to invest in expanding production capacity and productivity improvements. Purchases of our short-term investments used $24.0 million in cash, and maturities of our short-term investments provided $14.0 million in cash. Investing activities for the six months ended December 31, 2025 included funding of $6.5 million of investments and loans for strategic partnerships and the receipt of proceeds of $3.7 million from corporate-owned life insurance policies.

Previous 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.

Current wording

Financing activities used $2.6 million of net cash for the six months ended December 31, 2025. Net revolver borrowings on our credit facility provided $20.0 million in cash. We paid $9.7 million in dividends to holders of our Class A common stock and Class B common stock. We also paid $8.1 million in scheduled quarterly principal payments on long-term debt and $4.8 million in financed insurance premiums during the six months ended December 31, 2025.

Previous 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.

Current wording

As of December 31, 2025, we had $107.0 million in outstanding borrowings under the 2024 Revolver and outstanding letters of credit and other commitments of $2.9 million, leaving $200.1 million available for further borrowings and letters of credit, subject to restrictions in our 2024 Credit Facilities

Previous 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.

Current wording

As of December 31, 2025, our cash and cash equivalents and short-term investments included $72.2 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 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).

Current wording

Adjusted net income (loss) and adjusted diluted earnings (loss) 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 (loss) and adjusted diluted earnings (loss) per share to portray the results of our operations prior to considering certain income statement elements. We calculate adjusted net income (loss) 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 (loss) divided by the diluted weighted average number of shares. The adjusted net income (loss) and adjusted diluted earnings (loss) 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 (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.

Current wording

Adjusted net income (loss) and adjusted diluted earnings (loss) 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 (loss) and adjusted diluted earnings (loss) per share, unlike GAAP net income (loss), may not be comparable to the calculation of similar measures of other companies. Adjusted net income (loss) and adjusted diluted earnings (loss) per share are presented to permit investors to more fully understand how management assesses performance.

Previous wording

Adjusted EBITDA, adjusted net income and adjusted diluted earnings per share are calculated prior to considering acquisition-related items and certain other items, as detailed in the table titled “Items Excluded from Adjusted Net Income” above. We evaluate such items on an individual basis. Such evaluation considers both the quantitative and the qualitative aspect of their unusual or non-operational or non-recurring nature. Unusual, in this context, may represent items that are not part of our ongoing business; items that, either as a result of their nature or size, we would not expect to occur as part of our normal business on a regular basis.

Current wording

Adjusted EBITDA, adjusted net income (loss) and adjusted diluted earnings (loss) per share are calculated prior to considering acquisition-related items and certain other items, as detailed in the table titled “Items Excluded from Adjusted Net Income” above. We evaluate such items on an individual basis. Such evaluation considers both the quantitative and the qualitative aspect of their unusual or non-operational or non-recurring nature. Unusual, in this context, may represent items that are not part of our ongoing business; items that, either as a result of their nature or size, we would not expect to occur as part of our normal business on a regular basis.