PHIBRO ANIMAL HEALTH CORP

Previous wording

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. We market approximately 800 product lines in approximately 90 countries to approximately 4,500 customers.

Current wording

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 animals including poultry, beef and dairy cattle, swine, 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. We market approximately 790 product lines in approximately 90 countries to approximately 4,800 customers.

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), 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. For the year ended June 30, 2025, this product portfolio contributed $208.2 million to our overall net sales. 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), 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. For the years ended June 30, 2026 and 2025, this product portfolio contributed $358.2 million and $208.2 million to our overall net sales, 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 June 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. 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 June 30, 2026, we had approximately 525 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 June 30, 2025, and 17% of our consolidated net sales for the twelve months ended June 30, 2025.

Current wording

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.

Previous wording

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 June 30, 2025 represented approximately 1% of consolidated net sales.

Current wording

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 June 30, 2026 represented less than 1% of consolidated net sales.

Previous wording

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 year ended June 30, 2025 were approximately $20 million. As of the date of this Annual Report on Form 10-K, Mecadox continues to be available for use by swine producers.

Current wording

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 year ended June 30, 2026 were approximately $21 million. As of the date of this Annual Report on Form 10-K, Mecadox continues to be available for use by swine producers.

Previous wording

Our global sales of antibacterials, anticoccidials and other products were $646 million, $421 million and $387 million for the years ended June 30, 2025, 2024 and 2023, respectively.

Current wording

Our global sales of antibacterials, anticoccidials and other products were $811 million, $646 million and $421 million for the years ended June 30, 2026, 2025 and 2024, respectively.

Previous wording

We conduct operations in many areas of the world, involving transactions denominated in a variety of currencies. For the year ended June 30, 2025, we generated approximately 43% of our net sales from operations outside the United States. Although a portion of our revenues are denominated in various currencies, the selling prices of the majority of our sales outside the United States are referenced in U.S. dollars, and as a result, our revenues have not been significantly affected by currency movements. We are subject to currency risk to the extent that our costs are denominated in currencies other than those in which we earn revenues. We manufacture some of our major products in Brazil and Israel and production costs are largely denominated in local currencies, while the selling prices of the products are largely set in U.S. dollars. As such, we are exposed to changes in cost of goods sold resulting from currency movements and may not be able to adjust our selling prices to offset such movements. In addition, we incur selling and administrative expenses in various currencies and are exposed to changes in such expenses resulting from currency movements. For the year ended June 30, 2025, our expenses were not significantly affected by currency movements. Because we have transactions denominated in various currencies, changes in currency exchange rates have had, and will continue to have, an impact on our results of operations.

Current wording

We conduct operations in many areas of the world, involving transactions denominated in a variety of currencies. For the year ended June 30, 2026, we generated approximately 42% of our net sales from operations outside the United States. Although a portion of our revenues are denominated in various currencies, the selling prices of the majority of our sales outside the United States are referenced in U.S. dollars, and as a result, our revenues have not been significantly affected by currency movements. We are subject to currency risk to the extent that our costs are denominated in currencies other than those in which we earn revenues. We manufacture some of our major products in Brazil and Israel and production costs are largely denominated in local currencies, while the selling prices of the products are largely set in U.S. dollars. As such, we are exposed to changes in cost of goods sold resulting from currency movements and may not be able to adjust our selling prices to offset such movements. In addition, we incur selling and administrative expenses in various currencies and are exposed to changes in such expenses resulting from currency movements. For the year ended June 30, 2026, our expenses were significantly affected by currency movements. Because we have transactions denominated in various currencies, changes in currency exchange rates have had, and will continue to have, an impact on our results of operations.

Previous wording

Our effective income tax rate has varied from period to period and from the federal statutory rate, due to the mix of taxable profits in various jurisdictions; changes in tax rates from period to period, including changes in income tax legislation in the United States and various international jurisdictions; and the effects of changes in uncertain tax positions and valuation allowances. Our future effective income tax rate will vary due to the relative amounts of taxable income in various jurisdictions, future changes in tax rates and legislation and other factors. We expect to repatriate approximately $5.0 million of international earnings, which will be subject to applicable non-U.S. withholding and related taxes, net of reductions in U.S. income taxes. We intend to continue to reinvest indefinitely all other undistributed earnings of our foreign subsidiaries where we could be subject to applicable non-U.S. withholding and related taxes if amounts are repatriated to the U.S. See “Notes to Consolidated Financial Statements — Income Taxes” for additional information.

Current wording

Our effective income tax rate has varied from period to period and from the federal statutory rate, due to the mix of taxable profits in various jurisdictions; changes in tax rates from period to period, including changes in income tax legislation in the United States and various international jurisdictions; and the effects of changes in uncertain tax positions and valuation allowances. Our future effective income tax rate will vary due to the relative amounts of taxable income in various jurisdictions, future changes in tax rates and legislation and other factors. We intend to reinvest indefinitely all undistributed earnings of our foreign subsidiaries where we could be subject to applicable non-U.S. withholding and related taxes if amounts are repatriated to the U.S. We expect to repatriate approximately $5.0 million

Previous wording

Net sales of $962.8 million for the year ended June 30, 2025 increased $256.3 million, or 36%. Net sales of MFAs and other increased $225.4 million, or 54%, due to incremental revenues of $208.2 million 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 $1,162.2 million for the year ended June 30, 2026 increased $199.4 million, or 21%. Net sales of MFAs and other increased $164.4 million, or 25%, due to incremental revenues of $146.1 million from sales of products from the MFA portfolio acquired on October 31, 2024, increased demand for certain of our legacy MFAs in Mexico and Southeast Asia and for products sold by our ethanol performance business, including anti-microbials and processing aids used in the fermentation industry.

Previous wording

Net sales of nutritional specialty products increased $14.6 million, or 9%, primarily due to increased domestic demand for dairy and higher sales of microbial and companion animal products.

Current wording

Net sales of nutritional specialty products increased $15.8 million, or 9%, due to an increase in worldwide demand, particularly in North America and South America, and higher companion animal sales.

Previous wording

Net sales of vaccines increased $16.3 million, or 13%, primarily due to continued growth of poultry products in Latin America and increased domestic demand for swine products.

Current wording

Net sales of vaccines increased $19.3 million, or 14%, primarily due to continued growth of poultry products in Latin America and an increase in domestic and international demand, particularly in Israel and Southeast Asia.

Previous wording

Net sales of $253.2 million for the year ended June 30, 2025 increased $9.6 million, or 4%, primarily due to an increase in demand for copper and trace minerals.

Current wording

Net sales of $282.3 million for the year ended June 30, 2026 increased $29.1 million, or 11%, primarily due to an increase in demand for copper, zinc and trace minerals.

Previous wording

Net sales of $80.2 million for the year ended June 30, 2025 increased $12.6 million, or 19%, as a result of higher demand for the ingredients used in personal care products.

Current wording

Net sales of $73.5 million for the year ended June 30, 2026 decreased $6.6 million, or 8%, as a result of lower demand for the ingredients used in personal care products.

Previous wording

Gross profit of $399.9 million for the year ended June 30, 2025 increased $86.9 million, or 28%, as compared to the year ended June 30, 2024. Gross margin increased 10 basis points to 30.9% of net sales for the year ended June 30, 2025 as compared to 30.8% for the year ended June 30, 2024. The comparison to the prior year included $3.8 million of current period inventory write-offs attributable to the closure of an immaterial business and a net increase of $5.2 million for acquisition-related cost of goods sold related to purchase accounting adjustments for acquisitions. Excluding these items, gross profit increased $95.8 million, or 30.6%, and gross margin increased 80 basis points to 31.6% of net sales due to increased sales, an increase in average selling prices, and a favorable impact of foreign currency exchange rates, partially offset by higher distribution costs.

Current wording

Gross profit of $512.5 million for the year ended June 30, 2026 increased $112.6 million, or 28%, as compared to the year ended June 30, 2025. Gross margin increased 290 basis points to 33.8% of net sales for the year ended June 30, 2026 as compared to 30.9% for the year ended June 30, 2025. The comparison to the prior year includes $3.8 million of prior period inventory write-offs attributable to the closure of an immaterial business, a net decrease of $3.7 million for acquisition-related cost of goods sold related to purchase accounting adjustments for acquisitions, and a net increase in acquisition-related depreciation expense associated with the step-up of fair value of the acquired fixed assets and intangible asset amortization of $1.5 million. Excluding these items, gross profit increased $106.5 million, or 24%, and gross margin increased 230 basis points to 34.6% of net sales due to increased sales, favorable product mix, and increases in average selling prices, partially offset by higher input and distribution costs.

Previous wording

Animal Health gross profit, excluding the inventory write-offs and purchase accounting adjustment discussed above, increased $86.9 million due to higher sales volume, higher average selling prices, and a favorable impact of foreign currency exchange rates, partially offset by higher distribution costs. Mineral Nutrition gross profit increased $5.1 million, driven by higher average selling prices. Performance Products gross profit increased $3.8 million, driven by increased sales volume.

Current wording

Animal Health gross profit, excluding the non-recurring items discussed above, increased $107.9 million due to increased sales, favorable product mix, and increases in average selling prices, partially offset by higher distribution costs. Mineral Nutrition gross profit increased $0.3 million, as the increase in sales volume was offset by increases in unit costs. Performance Products gross profit decreased $1.7 million, primarily as a result of lower demand.

Previous wording

SG&A expenses of $289.5 million for the year ended June 30, 2025 increased $29.7 million, or 11%, as compared to the year ended June 30, 2024. SG&A for the year ended June 30, 2025 included $13.3 million for acquisition-related costs, $7.0 million of costs associated with Phibro Forward income growth initiatives, and $0.7 million in stock-based compensation expense, partially offset by $2.9 million related to an insurance settlement gain. SG&A for the year ended June 30, 2024 included a $10.7 million pension settlement charge, a $4.2 million cost for an unfavorable litigation result related to Brazil employment taxes, $6.4 million for acquisition-related costs, $0.5 million of stock-based compensation expense, and $0.4 million of costs associated with Phibro Forward income growth initiatives, partially offset by a $0.9 million insurance settlement gain. Excluding these items, SG&A increased $32.8 million, or 14%.

Current wording

SG&A expenses of $318.1 million for the year ended June 30, 2026 increased $28.6 million, or 10%, as compared to the year ended June 30, 2025. SG&A for the year ended June 30, 2026 included $8.6 million of costs associated with Phibro Forward income growth initiatives, $2.4 million for intangible asset amortization, $0.7 million in stock-based compensation expense related to awards granted to certain named executive officers in fiscal year 2024, and $1.3 million for acquisition-related costs, partially offset by $3.6 million related to insurance settlement gains. SG&A for the year ended June 30, 2025 included $13.3 million for acquisition-related costs, $7.0 million of costs associated with Phibro Forward income growth initiatives, $2.4 million for intangible asset amortization, and $0.7 million in stock-based compensation expense, partially offset by $2.9 million related to an insurance settlement gain. Excluding these items, SG&A increased $39.6 million, or 15%.

Previous wording

Animal Health SG&A increased $20.5 million, primarily due to an increase in employee-related costs due in part to incremental headcount added as part of the Acquisition and new product launches in Brazil. Mineral Nutrition and Performance Products SG&A each increased by $0.4 million due to an increase in employee-related costs. Corporate expenses increased $11.5 million due to higher incentive-related employee costs and strategic investments.

Current wording

Animal Health SG&A, excluding the non-recurring Animal Health-related items discussed above, increased $30.8 million, primarily due to an increase in employee-related costs due in part to incremental headcount added as part of the Acquisition and the impact of unfavorable changes in foreign currency exchange rates. Mineral Nutrition SG&A decreased $0.4 million, and Performance Products SG&A increased $0.7 million. Corporate expenses, excluding the non-recurring Corporate-related items discussed above, increased $8.5 million due to higher employee-related costs.

Previous wording

Foreign currency losses, net for the year ended June 30, 2025 were $7.9 million, as compared to net losses of $23.9 million for the year ended June 30, 2024. Current period losses were driven by fluctuations in certain currencies relative to the U.S. dollar, most prominently, in the Israeli New Shekel, the Brazil Real and the Argentine Peso. Prior year period losses were driven in large part by a major devaluation in the Argentine Peso and the weakening of the Brazilian Real.

Current wording

Foreign currency losses, net for the year ended June 30, 2026 were $12.6 million, as compared to net losses of $7.9 million for the year ended June 30, 2025. Current period losses were driven by fluctuations in certain currencies relative to the U.S. dollar, most prominently, in the Israeli New Shekel, the Argentine Peso, and the Euro. Prior year period losses were driven by fluctuations in the Israeli New Shekel, the Brazilian Real and the Argentine Peso.

Previous wording

The provision for income taxes was $19.7 million and $8.5 million for the years ended June 30, 2025 and 2024, respectively. The effective income tax rate was 29.0% and 77.9% for the years ended June 30, 2025 and 2024, respectively.

Current wording

The provision for income taxes was $37.6 million and $19.7 million for the years ended June 30, 2026 and 2025, respectively. The effective income tax rate was 27.4% and 29.0% for the years ended June 30, 2026 and 2025, respectively.

Previous wording

The effective tax rate for the year ended June 30, 2025 was higher than our statutory rate of 21% primarily due to withholding taxes on planned repatriations and the impact of Global Intangible Low-Tax Income (“GILTI”) on tax expense, partially offset by the impact of foreign tax credits. The provision for income taxes for the year ended June 30, 2025 was also impacted by various other items, including (i) certain non-deductible write-offs in connection with the closure of an immaterial business included as part of the Phibro Forward initiatives, (ii) various items with lower tax benefits, most prominently, foreign currency losses and stock-based compensation expense, (iii) a $0.9 million expense from changes in uncertain tax positions related to prior years, and (iv) $0.4 million expense for withholding taxes related to dividends received from an international affiliate. The effective income tax rate without these items would have been 25.0% for the year ended June 30, 2025.

Current wording

The effective tax rate for the year ended June 30, 2025 was higher than our statutory rate of 21% primarily due to withholding taxes on planned repatriations and the impact of GILTI on tax expense, partially offset by the impact of foreign tax credits. The provision for income taxes for the year ended June 30, 2025 was also impacted by various other items, including (i) certain non-deductible write-offs in connection with the closure of an immaterial business included as part of the Phibro Forward initiatives, (ii) various items with lower tax benefits, most prominently, foreign currency losses and stock-based compensation expense, (iii) a $0.9 million expense from changes in uncertain tax positions related to prior years, and (iv) $0.4 million expense for withholding taxes related to dividends received from an international affiliate. The effective income tax rate without these items was 25.0% for the year ended June 30, 2025.

Previous wording

We record the GILTI-related aspects of comprehensive U.S. income tax legislation as a period expense. The provision for income taxes for the years ended June 30, 2025 and 2024 included $3.2 million and $2.0 million, respectively, of federal tax expense from the effects of GILTI. Our effective income tax rate included 4.7% and 18.3% related to GILTI income tax expense for the years ended June 30, 2025 and 2024, respectively.

Current wording

The provision for income taxes for the years ended June 30, 2026 and 2025 included $1.4 million and $3.2 million, respectively, of federal tax expense from the effects of GILTI. Our effective income tax rate included 1.0% and 4.7% related to GILTI income tax expense for the years ended June 30, 2026 and 2025, respectively.

Previous wording

Net income of $48.3 million for the year ended June 30, 2025 increased $45.8 million, as compared to net income of $2.4 million for the year ended June 30, 2024. Operating income increased $57.2 million, driven by higher gross profit, partially offset by higher SG&A of $29.7 million, which included net increases of $6.9 million and $6.6 million in acquisition-related costs and costs related to Phibro Forward income growth initiatives, respectively. Interest expense, net increased $16.1 million due to higher debt levels and costs associated with the refinancing of the Company’s debt. Foreign currency losses, net decreased $16.0 million. Income tax expense increased $11.2 million.

Current wording

Net income of $99.7 million for the year ended June 30, 2026 increased $51.5 million, as compared to net income of $48.3 million for the year ended June 30, 2025. Operating income increased $83.9 million, driven by higher gross profit, partially offset by higher SG&A of $28.6 million, which included net decreases of $12.0 million and $1.7 million in acquisition-related costs and costs related to Phibro Forward income growth initiatives, respectively. Interest expense, net increased $9.8 million due to the expiration of a favorable interest rate swap agreement and higher debt levels. Foreign currency losses, net increased $4.8 million. Income tax expense increased $17.9 million.

Previous wording

Operating activities provided $87.6 million of net cash for the year ended June 30, 2024. Cash provided by net income, adjusted for non-cash items, including depreciation and amortization, was $54.5 million. Cash provided in the ordinary course of business from changes in operating assets and liabilities and other items was $33.1 million. Accounts receivable used $8.7 million of cash due to sales growth, partially offset by an improvement in days sales outstanding. Inventory provided $2.6 million of cash due to a decrease in quantities on hand, offset by increased raw materials and production costs. Other current assets provided $11.0 million due to timing of tax payments in international regions. Accounts payable provided $12.0 million of cash due to timing of purchases and payments. Accrued expenses and other liabilities provided cash of $12.2 million, primarily due to increased employee-related liabilities and accrued transaction costs.

Current wording

Operating activities provided $69.0 million of net cash for the year ended June 30, 2026. Cash provided by net income, adjusted for the non-cash items, including depreciation and amortization, was $164.1 million. Cash used in the ordinary course of business from changes in operating assets and liabilities, was $95.1 million. Accounts receivable used $7.5 million of cash due to higher sales. Inventories used $86.3 million of cash due to increased quantities associated with the Acquisition in response to anticipated tariffs and forecasted future demand. Accounts payable used $12.5 million of cash due to timing of purchases and payments. Accrued expenses and other liabilities provided cash of $26.4 million, primarily due to timing of incurrence.

Previous wording

Investing activities used $48.2 million of net cash for the year ended June 30, 2024. Capital expenditures were $41.2 million, related primarily to continued investments in expanded production capacity and productivity improvements, Net purchases and maturities of short-term investments used $4.0 million in cash. We acquired a business for $3.3 million, net of cash acquired. Other investing activities provided $0.3 million of cash.

Current wording

Investing activities used $71.5 million of net cash for the year ended June 30, 2026. Capital expenditures were $59.1 million, as we continued to invest in expanding production capacity and productivity improvements. Purchases of our short-term investments used $47.6 million in cash, and maturities of our short-term investments provided $36.0 million in cash.

Previous wording

Financing activities used $6.8 million of net cash for the year ended June 30,2024. Net borrowings on our previous revolving credit facility provided $35.0 million in cash. We paid $22.3 million in scheduled long-term debt maturities. We paid $19.4 million in dividends to holders of our Class A common stock and Class B common stock.

Current wording

Financing activities used $6.6 million of net cash for the year ended June 30, 2026. We paid $19.5 million in dividends to holders of our Class A common stock and Class B common stock and $16.3 million in scheduled quarterly principal payments on long-term debt. Net revolver borrowings on our credit facility provided $29.0 million in cash.

Previous wording

Financing activities provided $207.1 million of net cash for the year ended June 30, 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 then outstanding debt of $313.1 million, and we used the proceeds of $350.0 million in term loan borrowings to finance the purchase price of the Acquisition. Net revolver payments on our credit facilities used $89.0 million in cash. We paid $11.9 million in scheduled quarterly principal payments on long-term debt during the year ended June 30, 2025. We also paid $10.4 million in debt issuance costs related to the refinancing and $19.4 million in dividends to holders of our Class A common stock and Class B common stock.

Current wording

Financing activities provided $207.1 million of net cash for the year ended June 30, 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 then outstanding debt of $313.1 million, and we used the proceeds of $350.0 million in term loan borrowings to finance the purchase price of the Acquisition. Net revolver payments on our credit facilities used $89.0 million in cash. We paid $11.9 million in scheduled quarterly principal payments on long-term debt during the year ended June 30, 2025. We also

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.

Current wording

We believe our cash on hand, operating cash flows and financing arrangements, including the availability of borrowings under the Amended Revolving Credit Commitments, 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.

Previous wording

Aggregate maturities of long-term debt under the 2024 Credit Agreement are:

Current wording

Aggregate maturities of long-term debt under the Amended 2024 Credit Agreement are:

Previous wording

For purposes of estimating future interest payments until maturity, we assume long-term debt decreases in accordance with the scheduled amortization payments, the outstanding balance of the 2024 Revolver continues unchanged, the September 2024 and March 2025 interest rate swap agreements remain in place through their maturity dates, and future interest rates are the same as the rates at June 30, 2025.

Current wording

For purposes of estimating future interest payments until maturity, we assume long-term debt decreases in accordance with the scheduled amortization payments, the outstanding balance of the Amended 2024 Revolver continues unchanged, the September 2024 and March 2025 interest rate swap agreements remain in place through their maturity dates, and future interest rates are the same as the rates at June 30, 2026.

Previous wording

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 potential 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.

Current wording

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 Amended 2024 Credit Agreement 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 in the Middle East 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

At June 30, 2025, we had $87.0 million in outstanding borrowings under the 2024 Credit Facilities. We had outstanding letters of credit and other commitments of $2.5 million, leaving $220.5 million available for borrowings and letters of credit, subject to restrictions in our 2024 Credit Facilities.

Current wording

At June 30, 2026, we had $116.0 million in outstanding borrowings under the Amended 2024 Credit Agreement. We had outstanding letters of credit and other commitments of $2.1 million, leaving $316.9 million available for borrowings and letters of credit, subject to restrictions in our Amended 2024 Credit Agreement.

Previous wording

We currently intend to pay quarterly dividends on our Class A and Class B common stock, subject to approval by the Board of Directors. Our Board of Directors has declared a cash dividend of $0.12 per share on Class A common stock and Class B common stock, payable on September 24, 2025 to stockholders of record at the close of business on September 3, 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 and Class B common stock, subject to approval by the Board of Directors. On July 28, 2026, 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 September 23, 2026 to stockholders of record at the close of business on September 2, 2026. Our future ability to pay dividends will depend upon our results of operations, financial

Previous wording

We do not expect to contribute to the domestic pension plan during 2026.

Current wording

We do not expect to contribute to the domestic pension plan during fiscal year 2027.

Previous wording

At June 30, 2025, our cash and cash equivalents and short-term investments included $71.5 million held by our international subsidiaries. There are no restrictions on cash distributions to PAHC from our international subsidiaries.

Current wording

At June 30, 2026, our cash and cash equivalents and short-term investments included $80.0 million held by our international subsidiaries. There are no restrictions on cash distributions to PAHC from our international subsidiaries.

Previous wording

Our contractual obligations include maturities under the 2024 Credit Facilities, including future interest accruals, and also operating lease commitments. See “Notes to Consolidated Financial Statements — Debt and Leases.”

Current wording

Our contractual obligations include maturities under the Amended 2024 Credit Agreement, including future interest accruals, and also operating lease commitments. See “Notes to Consolidated Financial Statements — Debt and Leases.”

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 plus (i) acquisition-related depreciation associated with the step-up 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.

Previous wording

We consider acquisition-related activities and business restructuring costs related to productivity and cost saving initiatives to be unusual items that we do not expect to occur as part of our normal business on a regular basis. We consider foreign currency gains and losses to be non-operational because they arise principally from intercompany transactions and are largely non-cash in nature.

Current wording

We consider acquisition-related activities and business restructuring costs related to productivity and cost saving initiatives to be unusual items that we do not expect to occur as part of our normal business on a regular basis. We consider insurance proceeds related to specific insured events to be unusual because such proceeds are not generated through our ordinary business operations and relate to specific/discrete events that are not representative of our ongoing operating performance. We consider foreign currency gains and losses to be non-operational because they arise principally from intercompany transactions and are largely non-cash in nature.

Previous wording

We recognize revenue from product sales when control of the products has transferred to the customer, typically when title and risk of loss transfer to the customer. Certain of our businesses have terms where control of the underlying product transfers to the customer on shipment, while others have terms where control transfers to the customer on delivery.

Current wording

We recognize revenue from product sales when our obligations under a customer contract are satisfied; generally, this occurs with the transfer of control (i.e. title and risk of loss) of goods to the customers. Certain of our businesses have terms where control of the product transfers to the customer on shipment, while others have terms where control transfers to the customer on delivery.

Previous wording

Revenue reflects the total consideration to which we expect to be entitled, in exchange for delivery of products or services, net of variable consideration. Variable consideration includes customer programs and incentive offerings, including pricing arrangements, rebates and other volume-based incentives. We record reductions to revenue for estimated variable consideration at the time we record the sale. Our estimates for variable consideration reflect the amount by which we expect variable consideration to affect the revenue recognized. Such estimates are based on contractual terms and historical experience and are adjusted to reflect future expectations as new information becomes available. Historically, we have not had significant adjustments to our estimates of customer incentives. Sales returns and product recalls have been insignificant and infrequent due to the nature of the products we sell.

Current wording

Revenue reflects the total consideration we expect to be entitled to, in exchange for delivery of products or services, net of variable consideration. Variable consideration includes customer programs and incentive offerings, including pricing arrangements, rebates and other volume-based incentives. We record reductions to revenue for estimated variable consideration at the time we record the sale. Our estimates for variable consideration reflect the amount by which we expect variable consideration to affect the revenue recognized. Such estimates are based on contractual terms and historical experience and are adjusted to reflect future expectations as new information becomes available. Historically, we have not had significant adjustments to our estimates of customer incentives. Sales returns and product recalls have been insignificant and infrequent due to the nature of the products we sell.