PHIBRO ANIMAL HEALTH CORP
For the period ended Sep 30, 2026. Filed Nov 4, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2026 · Filed Nov 4, 2026
PAHC$32.96-6.9%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-03-31; filed 2026-05-06.
0001104659-26-056280
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-09-30; filed 2026-11-04.
0001104659-26-122692
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 139 previous paragraphs and 113 current paragraphs.
63 unchanged; 33 reworded; 16 added; 37 removed; 6 previous and 1 current paragraphs rearranged.
Tables are not compared: 58 previous and 54 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (16)
Current report
Site Closure
Current report
In August 2026, management decided to close the Company’s manufacturing facility in Chicago Heights, Illinois (“Chicago Heights”) as part of a strategic consolidation of our plant network. Production shutdown is expected to be completed in the summer of 2027, and the manufacturing of products made at this facility is expected to be relocated to third party contract manufacturers and our other manufacturing facilities.
Current report
We expect to incur approximately $5.0 million of one-time severance and other employee termination costs in connection with the Chicago Heights closure, which are expected to be paid in the second half of calendar 2027. The Company also expects to incur additional costs in connection with the closure, which may include equipment and inventory transfer costs, facility restoration costs, legal and professional fees, and other transition costs. The Company may also recognize noncash charges, including accelerated depreciation, as the plans for the facility and related assets are finalized. Costs associated with exit or disposal activities are recognized in the period in which they are incurred. One-time employee termination benefits for which the employees are required to render service through their termination date in order to receive such benefits are recognized ratably over the future service period. All restructuring-related costs will be recognized in our Animal Health segment.
Current report
For the three months ended September 30, 2026, we recognized $0.6 million of restructuring charges, consisting of one-time severance and other employee termination costs of $0.5 million accrued in connection with the plant closure and $0.1 million of professional fees. These restructuring charges were recorded in selling, general and administrative expenses in the consolidated statement of operations and the related liability is included in accrued expenses and other current liabilities in the consolidated balance sheet.
Current report
The Company is evaluating the eventual disposition or transfer of property, plant and equipment associated with the facility and other activities necessary to complete the plant closure. As these plans have not been finalized, the Company cannot reasonably estimate the amount or range of the additional costs or potential gains, if any, associated with these activities, which may include accelerated depreciation and gains, if any, on the disposal of certain fixed assets. Such additional charges or potential gains, if any, could be material and will be recognized as the closure, transition and disposition activity plans are finalized and implemented.
Current report
Given the uncertainty surrounding its disposition plans, the Company concluded that the asset group did not meet the criteria for held for sale classification. Management performed a recoverability assessment of the Chicago Heights asset group and determined that the estimated undiscounted future cash flows expected to be generated by the asset group exceeded its carrying amount. Accordingly, the Company concluded that the asset group was recoverable, and no impairment charge was recognized in the current quarter.
Current report
The Company expects the closure activities to be ongoing through fiscal year 2028. The estimates and timing described in this disclosure are based on information currently available and are subject to change as the closure and related transition activities progress.
Current report
In February 2026, the Supreme Court of the United States (“Supreme Court”) ruled that tariffs previously imposed under the International Emergency Economic Powers Act (“IEEPA”) from February 4, 2025 to February 24, 2026 were not authorized. As of the date of this Form 10-Q filing, we have confirmed acceptance of claims submitted through the Consolidated Administration and Processing of Entries (“CAPE”) portal administered by the U.S. Customs and Border Protection (“CBP”) for the refund of approximately $13.4 million in tariffs previously paid by the Company and have recovered $12.3 million. See “Notes to Consolidated Financial Statements — Commitments and Contingencies — United States Tariffs” for additional information regarding the financial statement impacts of our IEEPA tariff recovery efforts as of and for the three months ended September 30, 2026.
Current report
Calculation not meaningful
Current report
Net sales of $293.0 million for the three months ended September 30, 2026 increased $9.6 million, or 3%. Net sales of MFAs and other increased $11.3 million, or 6%, due to increased demand for certain of our MFAs in North America and Asia and higher sales of ethanol processing aids, partially offset by a decrease of $5.2 million in virginiamycin sales in Brazil attributable to regulatory developments in the country.
Current report
Net sales of vaccines decreased $0.6 million, or 2%, primarily due to lower demand for poultry products in Brazil and lower sales in Asia, partly due to timing, substantially offset by higher swine demand in North America and higher sales of adjuvant products.
Current report
Interest expense, net of $11.3 million for the three months ended September 30, 2026 decreased by $0.8 million, as compared to the three months ended September 30, 2025, due to higher interest income attributable to interest received on IEEPA tariff recoveries and lower interest rates, partially offset by higher daily average borrowings on our revolving credit facility during the quarter.
Current report
Foreign currency (gains) losses, net
Current report
It is reasonably possible we will resolve a foreign tax audit in a future quarter during this fiscal year that may have a favorable impact on our income tax rate. The Company cannot yet estimate the impact of this potential future benefit on its financial statements. See “Forward Looking Statements” below.
Current report
Net income of $29.5 million for the three months ended September 30, 2026 increased $3.0 million as compared to net income of $26.5 million for the three months ended September 30, 2025. Operating income decreased $1.6 million primarily due to higher SG&A partially offset by higher gross profit. Interest expense, net decreased $0.8 million due to lower interest rates and higher interest income attributable to interest received on IEEPA tariff recoveries. Foreign currency gains were $0.4 million, as compared to foreign currency net losses of $2.9 million in the prior year. Income tax expense decreased by $0.5 million.
Current report
(1)See table titled “Items Excluded from Adjusted Net Income” below for further details.
Removed paragraphs (37)
Previous report
Acquisition
Previous report
In April 2024, the Company entered into a Purchase and Sale Agreement (the “Purchase Agreement”) with Zoetis Inc., a Delaware corporation (“Zoetis”) to acquire Zoetis’s medicated feed additive (“MFA”) portfolio, certain water-soluble products and related assets (the “Acquisition”). On October 31, 2024, the Company completed the Acquisition at a purchase price of approximately $297.5 million ($286.5 million, as adjusted, net of cash acquired). The Acquisition was funded by term loan borrowings under the 2024 Credit Agreement. Since the Acquisition, the product portfolio acquired has contributed $478.7 million to our overall net sales, of which $95.9 million and $77.0 million were recorded in the three months ended March 31, 2026 and 2025, and $270.5 million and $113.7 million were recorded in the nine months ended March 31, 2026 and 2025, respectively. Also included in the Acquisition were six manufacturing sites, comprised of four in the U.S., one in Italy and one in China. The results of operations of the Acquisition are included in our consolidated statements of operations from the date of acquisition and reported within the Animal Health segment.
Previous report
2024 Credit Agreement
Previous report
In July 2024, we entered into a Credit Agreement (the “2024 Credit Agreement”) with a group of lenders. Initial borrowings were used to refinance all our outstanding debt, to pay fees and expenses of the transaction, and for ongoing working capital requirements and general corporate purposes. Borrowings under the Delayed Draw Term A-1 and A-2 Loans were used to finance the purchase price of the Acquisition. See “Notes to Consolidated Financial Statements — Debt — 2024 Credit Agreement” for additional information.
Previous report
On April 28, 2026, the 2024 Credit Agreement was amended to increase our borrowing capacity by expanding the Revolving Credit Commitments by $125.0 million, from $310.0 million to an aggregate commitment of $435.0 million. The expanded borrowing capacity provides the Company with enhanced operating flexibility. Fees of approximately $0.6 million were incurred to execute this amendment and will be amortized to interest expense through the maturity date of the Revolving Credit Commitments.
Previous report
In response to the armed conflict between Russia and Ukraine that began in February 2022, we and our employees have provided support to Ukraine in the form of monetary donations, free products and humanitarian services. Our limited intent for the Russian market is to continue to provide medicines and vaccines, and related regulatory and technical support, to help existing customers combat disease challenges in the production of food animals on their farms. We have no production or direct distribution operations and no planned investments in Russia.
Previous report
In February 2026, the Supreme Court of the United States ruled that tariffs previously imposed under the International Emergency Economic Powers Act (“IEEPA”) were not authorized. In response to this ruling, we are pursuing the potential recovery of IEEPA tariffs previously paid and expect to submit claims through the administrative process administered by U.S. Customs and Border Protection for the refund of tariffs previously paid by the Company. The ruling did not address potential refunds, and therefore the ultimate availability, timing, and amount of the recovery of any potential refunds of these tariffs is highly uncertain and may be subject to further legal, regulatory, and administrative developments. Accordingly, the Company has not recognized any receivable or benefit related to these potential recoveries in its financial statements as of March 31, 2026 and will continue to monitor relevant developments and evaluate the recognition of such recoveries in future periods.
Previous report
Net sales of $291.2 million for the three months ended March 31, 2026 increased $32.8 million, or 13%. Net sales of MFAs and other increased $24.1 million, or 13%, due to an $18.9 million increase in the sales of products from the MFA portfolio acquired on October 31, 2024, increased demand for certain of our legacy MFAs in North America and for certain anti-microbials sold by our ethanol performance business.
Previous report
Net sales of vaccines increased $5.2 million, or 16%, primarily due to an increase in international sales driven by higher demand in Israel, as well as an increase in domestic swine demand and higher sales of autogenous vaccines.
Previous report
Net sales of $18.9 million for the three months ended March 31, 2026 decreased $3.8 million, or 17%, as a result of lower demand for the ingredients used in personal care products.
Previous report
Interest expense, net of $10.4 million for the three months ended March 31, 2026 increased $1.1 million, as compared to the three months ended March 31, 2025, due to the expiration of a favorable interest rate swap agreement on $300.0 million of notional debt principal, partially offset by lower interest rates and higher patronage income received from the lenders providing the Term A-2 Loan (see “Notes to Consolidated Financial Statements—Debt”).
Previous report
Foreign currency losses (gains), net
Previous report
Foreign currency losses, net for the three months ended March 31, 2026 were $1.9 million, as compared to $5.5 million of net gains for the three months ended March 31, 2025. Current period losses were driven by fluctuations in certain currencies related to the U.S. dollar, most prominently, in the Euro and the Brazil Real. Prior year period gains were driven in large part by fluctuations in certain currencies related to the U.S. dollar, most prominently, in the Brazil Real and in the Euro.
Previous report
Net income of $24.0 million for the three months ended March 31, 2026 increased $3.1 million, as compared to net income of $20.9 million for the three months ended March 31, 2025. Operating income increased $11.1 million, driven by favorable gross profit, partially offset by higher SG&A. Gross profit increased $21.1 million primarily as a result of higher sales in the Animal Health segment, primarily drivenby incremental revenues associated with sales from the MFA portfolio acquired on October 31, 2024. SG&A increased $10.0 million due to higher employee-related costs. Interest expense, net increased $1.1 million due to the expiration of an interest rate swap agreement. Foreign currency losses were $1.9 million for the three months ended March 31, 2026, as compared to gains of $5.5 million for the three months ended March 31, 2025. Income tax expense decreased $0.5 million.
Previous report
Comparison of nine months ended March 31, 2026 and 2025
Previous report
Net sales
Previous report
Net sales of $1,121.3 million for the nine months ended March 31, 2026 increased $203.8 million, or 22%, as compared to the nine months ended March 31, 2025. Animal Health sales increased $194.3 million. Mineral Nutrition sales increased $16.3 million and Performance Products sales decreased $6.8 million.
Previous report
Animal Health
Previous report
Net sales of $864.7 million for the nine months ended March 31, 2026 increased $194.3 million, or 29%. Net sales of MFAs and other increased $163.3 million, or 37%, due to incremental revenues of $156.8 million from sales of products from the MFA portfolio acquired on October 31, 2024, increased demand for certain of our legacy MFAs in North America and for certain anti-microbials sold by our ethanol performance business.
Previous report
Net sales of nutritional specialty products increased $13.3 million, or 10%, due to an increase in worldwide demand, particularly in North America, and higher companion animal sales.
Previous report
Net sales of vaccines increased $17.8 million, or 18%, primarily due to continued growth of poultry products in Latin America and increase in other international demand, particularly in Israel and Southeast Asia.
Previous report
Mineral Nutrition
Previous report
Performance Products
Previous report
Net sales of $51.3 million for the nine months ended March 31, 2026 decreased $6.8 million, or 12%, as a result of lower demand for the ingredients used in personal care products.
Previous report
Gross profit
Previous report
Gross profit of $378.1 million for the nine months ended March 31, 2026 increased $88.2 million, or 30%, as compared to the nine months ended March 31, 2025. Gross margin increased 210 basis points to 33.7% of net sales for the nine months ended March 31, 2026, as compared to 31.6% for the nine months ended March 31, 2025. The comparison of gross profit 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 $1.4 million for acquisition-related cost of goods sold related to purchase accounting adjustments for the Acquisition, 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 $2.9 million. Excluding these items, gross profit increased $85.9 million, or 28%, and gross margin increased 160 basis points to 34.6% of net sales due to increased sales volume, favorable product mix, and increases in average selling prices, partially offset by higher input and distribution costs.
Previous report
Animal Health gross profit, excluding the non-recurring items discussed above, increased $87.4 million, primarily driven by sales volume, favorable product mix, and increases in average selling prices, partially offset by higher input and distribution costs. Mineral Nutrition gross profit increased $0.7 million, driven by increased sales volume and higher average selling prices. Performance Products gross profit decreased $2.2 million, primarily as a result of lower demand.
Previous report
SG&A of $231.9 million for the nine months ended March 31, 2026 increased $18.7 million, or 9%, as compared to the nine months ended March 31, 2025. SG&A for the nine months ended March 31, 2026 included $7.0 million of costs associated with Phibro Forward income growth initiatives, $1.8 million for intangible asset amortization, $0.6 million for acquisition-related costs, and $0.5 million of stock-based compensation expense related to awards granted to certain named executive officers in fiscal year 2024, partially offset by $3.8 million related to insurance settlement gains. SG&A for the nine months ended March 31, 2025, included $12.9 million for acquisition-related costs, $6.0 million of costs associated with Phibro Forward income growth initiatives, $1.8 million for intangible asset amortization, and $0.5 million of stock-based compensation expense, partially offset by $2.8 million related to insurance settlement gains. Excluding these items, SG&A increased $31.0 million.
Previous report
Interest expense, net
Previous report
Interest expense, net of $34.2 million for the nine months ended March 31, 2026 increased $8.3 million, or 32%, as compared to the nine months ended March 31, 2025, due to the expiration of a favorable interest rate swap agreement on $300.0 million of notional debt principal and higher average term loan balances associated with the financing of the Acquisition. These factors are partially offset by lower average revolving credit facility borrowings, lower interest rates, and higher patronage income received from the lenders providing the Term A-2 Loan (see “Notes to Consolidated Financial Statements—Debt”). The comparison of interest expense to the prior year is also impacted by $2.0 million in certain prior year costs and charges resulting from the refinancing of the 2024 Credit Agreement, including $1.5 million of new creditor and third-party financing costs and $0.5 million in debt extinguishment costs.
Previous report
Foreign currency losses, net
Previous report
Provision for income taxes
Previous report
The provision for income taxes was $27.0 million and $13.1 million for the nine months ended March 31, 2026 and 2025, respectively. The effective income tax rate was 25.7% and 29.7% for the nine months ended March 31, 2026 and 2025, respectively.
Previous report
On July 4, 2025, the U.S. Congress enacted “An Act to Provide for Reconciliation Pursuant to Title II of H. Con. Res. 14,” (the “OBBBA”), also known as the “One Big Beautiful Bill Act,” which includes significant amendments to the Internal Revenue Code. The impact of this legislation was immaterial on our consolidated financial statements.
Previous report
Net income
Previous report
Net income was $78.0 million for the nine months ended March 31, 2026, as compared to net income of $31.0 million for the nine months ended March 31, 2025. Operating income increased $69.5 million driven by higher gross profit, partially offset by higher SG&A of $18.7 million due to higher employee-related costs. Interest expense, net increased $8.3 million due to the expiration of an interest rate swap agreement and higher debt levels associated with the refinancing of the Company’s debt. Foreign currency losses, net increased $0.4 million. Income tax expense increased $13.9 million.
Previous report
Adjusted net income (loss) and adjusted diluted earnings (loss) per share
Reworded paragraphs (33)
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.
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, and 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.
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, 2026, we had approximately 520 employees located in Israel. We have confidence in our ability to meet our supply commitment to customers and maintain sufficient inventory to continue regional support. Our operations in Israel have navigated numerous challenging situations over the years.
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, 2026, we had approximately 530 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 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.
Current wording
The continuation, resumption 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
Our Israeli manufacturing facilities and local operations account for 17% of our consolidated assets as of March 31, 2026, and 16% of our consolidated net sales for the nine months ended March 31, 2026.
Current wording
Our Israeli manufacturing facilities and local operations account for 17% of our consolidated assets as of September 30, 2026, and 16% of our consolidated net sales for the year ended June 30, 2026.
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 March 31, 2026 represented approximately 1% of consolidated net sales.
Current wording
The Russia-Ukraine conflict has been ongoing since Russia’s invasion of Ukraine in February 2022. Since the conflict began, the United States and other North Atlantic Treaty Organization (“NATO”) member states, as well as non-member states, have imposed targeted economic sanctions and other restrictions related to Russia, including certain Russian citizens and enterprises. Although there have been recent efforts to seek a resolution, it remains unclear if such efforts will be successful. 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 year ended June 30, 2026 represented less than 1% of consolidated net sales.
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 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.
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 Trump administration 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. 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.
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 twelve months ended March 31, 2026 were approximately $22 million. As of the date of the filing of this Quarterly Report on Form 10-Q, Mecadox continues to be available for use by swine producers.
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 $22 million. As of the date of this Quarterly Report on Form 10-Q, Mecadox continues to be available for use by swine producers.
Previous wording
In 2018, the Ministry of Agriculture in Brazil (“MAPA”), published an ordinance to ban the use of antimicrobials used at sub-therapeutic levels for growth promotion and feed efficiency in animal feed. The ordinance was in response to international pressure and scientific concerns about the potential risks of antimicrobial resistance. The Company’s virginiamycin product is currently registered and used for growth promotion in cattle, broilers, layers and swine in Brazil. The Company and key stakeholders (trade associations) requested that MAPA allow sponsors time to shift from growth promotion claims to therapeutic claims. In 2022 and more recently in 2025, additional MAPA public consultations were held to discuss the prohibition on the use of antimicrobials as growth promoters. These discussions affect the Company’s virginiamycin product in Brazil, which is the only remaining key livestock production market where virginiamycin does not yet have therapeutic indications.. On April 27, 2026, MAPA published its Ordinance prohibiting the importation, manufacture, marketing and use of performance enhancing feed additives containing antimicrobials classified as important in human or veterinary medicine, including virginiamycin and bacitracin. There will be a transition period of 180 days from the date of the ordinance, during which time companies and customers may continue to use and sell the products under their current labels. The Company has been actively conducting studies to address MAPA’s requirements to obtain therapeutic indications for virginiamycin. These registrations are in the final stages of review and approval by MAPA and are expected during the transition period. Phibro’s bacitracin product already carries therapeutic claims in Brazil.
Current wording
In 2018, the Ministry of Agriculture in Brazil (“MAPA”) published an ordinance to ban the use of antimicrobials used at sub-therapeutic levels for growth promotion and feed efficiency in animal feed in response to international pressure and scientific concerns about the potential risks of antimicrobial resistance. The Company’s virginiamycin product is currently registered and used for growth promotion in cattle, broilers, layers and swine in Brazil. The Company and key stakeholders (including trade associations) requested that MAPA allow sponsors time to shift from growth promotion claims to therapeutic claims. In 2022 and more recently in 2025, additional MAPA public consultations were held to discuss the prohibition on the use of antimicrobials as growth promoters. These discussions affect the Company’s virginiamycin product in Brazil, which is the only remaining key livestock production market where virginiamycin does not yet have therapeutic indications. On April 27, 2026, MAPA published an ordinance prohibiting the importation, manufacture, marketing and use of performance enhancing antimicrobial feed additives classified as important in human or veterinary medicine, including virginiamycin and bacitracin. There was a transition period of 180 days from the date of the ordinance, during which time companies and customers could continue to use and sell the products under their current labels. The transition period ended October 24, 2026. The Company has been actively conducting studies to address MAPA’s requirements to obtain therapeutic indications for virginiamycin. These registrations are in the final stages of review and approval by MAPA. Phibro’s bacitracin product already carries therapeutic claims in Brazil. Sales of virginiamycin in Brazil decreased $5.2 million for the three months ended September 30, 2026 when compared to the prior year. Such sales totaled $27 million for the year ended June 30, 2026.
Previous wording
Net sales of $383.5 million for the three months ended March 31, 2026 increased $35.7 million, or 10%, as compared to the three months ended March 31, 2025. Animal Health increased $32.8 million, Mineral Nutrition increased $6.6 million, and Performance Products decreased $3.8 million.
Current wording
Net sales of $386.8 million for the three months ended September 30, 2026 increased $22.9 million, or 6%, as compared to the three months ended September 30, 2025. Animal Health increased $9.6 million, Mineral Nutrition increased $10.6 million and Performance Products increased $2.7 million.
Previous wording
Net sales of nutritional specialty products increased $3.5 million, or 8%, primarily due to increased demand in North America and higher companion animal sales.
Current wording
Net sales of nutritional specialty products decreased $1.1 million, or 2%, primarily due to lower poultry demand in North America and decreased aquaculture demand in South America, partially offset by higher overall demand in China and higher companion animal sales.
Previous wording
Net sales of $73.4 million for the three months ended March 31, 2026 increased $6.6 million, or 10%, due to an increase in demand for zinc and trace minerals.
Current wording
Net sales of $73.6 million for the three months ended September 30, 2026 increased $10.6 million, or 17%, primarily due to an increase in demand and average selling prices for zinc oxide, copper and trace minerals.
Previous wording
Net sales of $205.4 million for the nine months ended March 31, 2026 increased $16.3 million, or 9%, due to an increase in demand for copper, zinc and trace minerals.
Current wording
Net sales of $20.2 million for the three months ended September 30, 2026 increased $2.7 million, or 16%, as a result of an increase in demand for copper-based and fluoride products.
Previous wording
Gross profit of $125.7 million for the three months ended March 31, 2026 increased $21.1 million, or 20%, as compared to the three months ended March 31, 2025. Gross margin increased 270 basis points to 32.8% of net sales for the three months ended March 31, 2026, as compared to 30.1% for the three months ended March 31, 2025. The comparison of gross profit to the prior year includes $3.8 million of prior period inventory write-offs attributable to the closure of an immaterial business, $1.7 million for prior period acquisition-related cost of goods sold related to the purchase accounting for the Acquisition, 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 $1.1 million. Excluding these items, gross profit increased $16.7 million, or 15%, and gross margin increased 130 basis points to 33.5% of net sales due to increased sales volume, favorable product mix, and increases in average selling prices, partially offset by higher input and distribution costs.
Current wording
Gross profit of $128.5 million for the three months ended September 30, 2026 increased $8.8 million, or 7%, as compared to the three months ended September 30, 2025. Gross margin increased 30 basis points to 33.2% of net sales for the three months ended September 30, 2026, as compared to 32.9% for the three months ended September 30, 2025. The comparison to the prior year includes $1.1 million for prior period acquisition-related cost of goods sold related to the purchase accounting for the acquisition of the Zoetis MFA portfolio completed in October 2024 and a net $0.1 million increase in acquisition-related depreciation expense associated with the step-up of fair value of the acquired fixed assets and intangible asset amortization. Excluding these items, gross profit increased $7.8 million, or 6%, and gross margin held flat at 34.0% of net sales. The increase in gross profit is due to increased sales volume and higher average selling prices, partially offset by higher input and distribution costs.
Previous wording
Animal Health gross profit, excluding the non-recurring items discussed above, increased $18.3 million, primarily driven by increased sales volume, favorable product mix, and increases in average selling prices, partially offset by higher input and distribution costs. Mineral Nutrition gross profit decreased $0.6 million, as the impact of higher unit costs exceeded the increase in sales volume. Performance Products gross profit decreased $1.0 million, primarily as a result of lower demand.
Current wording
Excluding the items discussed above, Animal Health gross profit increased $4.6 million due to increased sales volume, partially offset by higher input and distribution costs. Mineral Nutrition gross profit increased $1.5 million, driven by higher average selling prices. Performance Products gross profit increased $1.7 million primarily as a result of higher sales and the impact of IEEPA tariff recoveries in the quarter.
Previous wording
SG&A of $81.0 million for the three months ended March 31, 2026 increased $10.0 million, or 14%, as compared to the three months ended March 31, 2025. SG&A for the three months ended March 31, 2026 included $3.4 million of costs associated with Phibro Forward income growth initiatives, $0.6 million for intangible asset amortization, $0.1 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 March 31, 2025 included $4.0 million of costs associated with Phibro Forward income growth initiatives, $0.6 million for acquisition-related costs, $0.6 million for intangible asset amortization, and $0.2 million of stock-based compensation expense, partially offset by $1.5 million related to an insurance settlement gain. Excluding these items, SG&A increased $9.5 million, or 14%.
Current wording
Selling, general and administrative expenses (“SG&A”) of $78.9 million for the three months ended September 30, 2026 increased $10.4 million, or 15%, as compared to the three months ended September 30, 2025. SG&A for the three months ended September 30, 2026 included $0.6 million for severance charges and other exit costs related to the planned closure of the Chicago Heights manufacturing facility and $0.4 million of performance-based stock compensation expense related to awards granted to certain named executive officers. SG&A for the three months ended September 30, 2025 included $0.3 million for acquisition-related costs and $0.2 million of performance-based stock compensation expense related to awards granted to certain named executive officers, offset by $3.8 million of insurance proceeds. Excluding these items, SG&A increased $5.9 million, or 8%.
Previous wording
Animal Health SG&A, excluding the non-recurring Animal Health related items discussed above, increased $9.0 million, primarily due to an increase in employee-related costs. Mineral Nutrition and Performance Products SG&A was comparable to the prior year. Corporate costs, excluding the non-recurring Corporate related items discussed above, increased $0.4 million due to an increase in employee-related costs.
Current wording
Animal Health SG&A, excluding the non-recurring Animal Health-related items discussed above, increased $5.9 million, primarily as a result of an increase in employee-related costs. Mineral Nutrition SG&A was comparable to the prior year, and Performance Products SG&A increased $0.5 million. Corporate expense, excluding the non-recurring Corporate-related items discussed above, decreased $0.5 million due to lower consulting and business development costs, partially offset by an increase in employee related costs.
Previous wording
Foreign currency losses, net for the nine months ended March 31, 2026 were $7.0 million, as compared to net losses of $6.6 million for the nine months ended March 31, 2025. Current period 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 by fluctuations in certain currencies related to the U.S. dollar, most prominently, in the Brazil Real, the Argentine Peso, and the Mexican Peso.
Current wording
Foreign currency gains, net for the three months ended September 30, 2026, were $0.4 million, as compared to $2.9 million of net losses for the three months ended September 30, 2025. Current year gains were driven by fluctuations in certain currencies relative to the U.S. dollar, most notably in the Israeli New Shekel. Prior 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
The provision for income taxes was $8.3 million and $8.8 million for the three months ended March 31, 2026 and 2025, respectively. The effective income tax rate was 25.7% and 29.7% for the three months ended March 31, 2026 and 2025, respectively.
Current wording
The provision for income taxes was $9.3 million and $9.7 million for the three months ended September 30, 2026 and 2025, respectively. The effective income tax rate was 23.9% and 26.9% for the three months ended September 30, 2026 and 2025, respectively.
Previous 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.
Current wording
The effective income tax rate in the current year was higher than the federal statutory rate of 21% primarily due to the impact of state and local income taxes and the mix of foreign income, offset by tax credits.
Previous wording
The effective income tax rate in the current period included among other items, (i) a $0.6 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 non-deductible write-offs in connection with the closure of an immaterial business included as part of the Phibro Forward initiatives. Excluding these items, the effective income tax rate was 24.7% and 25.3% for the nine months ended March 31, 2026 and 2025, respectively.
Current wording
The effective income tax rate in the current period included, among other items, foreign currency gains and certain stock-based compensation, which had lower tax rates. The effective income tax rate in the prior year 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. Excluding these items, the effective income tax rate was 24.5% and 25.9% for the three months ended September 30, 2026 and 2025, respectively.
Previous wording
A reconciliation of reported diluted earnings per share, as reported under GAAP, to non-GAAP adjusted diluted EPS is:
Current wording
A reconciliation of reported diluted earnings per share, as reported under GAAP, to non-GAAP adjusted diluted EPS is as follows:
Previous wording
The net decrease in cash and cash equivalents was as follows:
Current wording
Net increase in cash and cash equivalents was as follows:
Previous wording
Operating activities provided $44.9 million of net cash for the nine months ended March 31, 2026. Cash provided by net income, adjusted for the non-cash items, including depreciation and amortization, was $130.2 million. Cash used in the ordinary course of business from changes in operating assets and liabilities was $85.3 million. Accounts receivable provided $8.9 million of cash due to the timing of collection of sales proceeds and higher sales. Inventories used $92.5 million of cash due to increased quantities on hand due to timing of inventory purchases and forecasted future demand. Accounts payable used $6.8 million of cash due to timing of purchases and payments.
Current wording
Operating activities provided $26.1 million of net cash for the three months ended September 30, 2026. Cash provided by net income, adjusted for the non-cash items, including depreciation and amortization, was $48.9 million. Cash used in the ordinary course of business from changes in operating assets and liabilities was $22.8 million. Accounts receivable provided $16.2 million of cash due to the timing of collection of sales proceeds. Inventories used $33.9 million of cash due to increased quantities on hand due to timing of inventory purchases and forecasted future demand and the planned buildup of inventory at our Chicago Heights facility before its closure next year, which will enable us to maintain sales of such inventory while we transition production to third party manufacturers and other of our manufacturing facilities. Accounts payable provided $12.3 million of cash due to timing of purchases and payments. Accrued expenses and other liabilities used cash of $25.6 million, primarily due to incentive compensation payments.
Previous wording
Investing activities used $55.0 million of net cash for the nine months ended March 31, 2026. Capital expenditures were $40.2 million, as we continue to invest in expanding production capacity and productivity improvements. Purchases of our short-term investments used $37.0 million in cash, and maturities of our short-term investments provided $23.5 million in cash. Investing activities for the nine months ended March 31, 2026 included funding of $6.2 million of net investments and loans for strategic partnerships and the receipt of proceeds of $3.7 million from corporate-owned life insurance policies.
Current wording
Investing activities used $5.9 million of net cash for the three months ended September 30, 2026. Capital expenditures were $18.8 million, as we continued to invest in expanding production capacity and productivity improvements. Purchases of our short-term investments used $3.0 million in cash, and maturities of our short-term investments provided $16.0 million in cash.
Previous wording
Financing activities used $4.9 million of net cash for the nine months ended March 31, 2026. Net revolver borrowings on our credit facility provided $28.0 million in cash. We paid $14.6 million in dividends to holders of our Class A common stock and Class B common stock. We also paid $12.2 million in scheduled quarterly principal payments on long-term debt and $6.2 million in financed insurance premiums during the nine months ended March 31, 2026.
Current wording
Financing activities used $5.6 million of net cash for the three months ended September 30, 2026. Net revolver borrowings on our credit facility provided $8.0 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 $6.3 million in scheduled quarterly principal payments on long-term debt and $2.5 million in financed insurance premiums during the three months ended September 30, 2026.
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 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.
Current wording
We believe our cash on hand, operating cash flows and financing arrangements, including the availability of borrowings under our 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 our credit agreement executed in July 2024 and its subsequent amendments (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
As of March 31, 2026, we had $115.0 million in outstanding borrowings under the Revolving Credit Commitments and outstanding letters of credit and other commitments of $1.8 million, leaving $193.2 million available for further borrowings and letters of credit, subject to restrictions in our 2024 Credit Facilities. On April 28, 2026, the 2024 Credit Agreement was amended to increase our borrowing capacity under the Revolving Credit Commitments by $125.0 million, from $310.0 million to $435.0 million.
Current wording
As of September 30, 2026, we had $124.0 million in outstanding borrowings under our revolving credit facility and had outstanding letters of credit and other commitments of $2.1 million, leaving $308.9 million available for further borrowings and letters of credit, subject to restrictions in our Amended 2024 Credit Agreement.
Previous wording
As of March 31, 2026, our cash and cash equivalents and short-term investments included $76.7 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, 2026, our cash and cash equivalents and short-term investments included $81.9 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 (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).
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 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 (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.
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.
Previous 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.
Current 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.
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
Our significant accounting policies, which include management’s best estimates and judgments, are included in Note 2 to the consolidated financial statements for the year ended June 30, 2025 included in our Annual Report on Form 10-K filed with the Securities Exchange Commission on August 27, 2025. There have been no significant changes in our critical accounting estimates since June 30, 2025.
Current wording
Our significant accounting policies, which include management’s best estimates and judgments, are included in Note 2 to the consolidated financial statements for the year ended June 30, 2026 included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission on August 26, 2026. There have been no significant changes in our critical accounting estimates since June 30, 2026.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Adjusted net income and adjusted diluted earnings per share
Rearranged previous paragraphs (6)
Previous report — wording carried elsewhere
Selling, general and administrative expenses (“SG&A”)
Previous report — wording carried elsewhere
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 and (ii) 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 gains, (ii) changes in uncertain tax positions related to prior years and (iii) certain non-deductible write-offs in connection with the closure of an immaterial business included as part of the Phibro Forward initiatives. Excluding these items, the effective income tax rate was 24.6% and 25.8% for the three months ended March 31, 2026 and 2025, respectively.
Previous report — wording carried elsewhere
Animal Health SG&A, excluding the non-recurring Animal Health-related items discussed above, increased $23.0 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 $0.5 million. Corporate expenses,
Previous report — wording carried elsewhere
excluding the non-recurring Corporate-related items discussed above, increased $7.5 million due to an increase in employee-related costs.
Previous report — wording carried elsewhere
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 report — wording carried elsewhere
Certain amounts and percentages may reflect rounding adjustments.