<\/p>\n
Phibro Animal Health Corporation Reports First Quarter Results, Maintains Financial Guidance<\/b><\/p>\n
TEANECK, N.J.–(BUSINESS WIRE<\/a>)– \nHighlights for the three months ended September 30, 2026 (compared to the three months ended September 30, 2025)<\/p>\n \nOur fiscal year 2027 Net Sales and Adjusted EBITDA guidance is as follows:<\/p>\n \nCOMMENTARY<\/p>\n \n\u201cWe are pleased with our start to fiscal 2027,\u201d said Dani Bendheim, President and Chief Executive Officer of Phibro Animal Health Corporation. \u201cFirst quarter results exceeded our expectations and grew on top of a strong first quarter last year. The outperformance was led largely by a strong start to the year in Mineral Nutrition and Performance Products while our core Animal Health business delivered sales in line with our plan and Adjusted EBITDA ahead of plan, including the benefit of certain costs that shifted into the second quarter.\u201d<\/p>\n \n\u201cWhen we set our fiscal 2027 outlook in August, we took a disciplined approach to virginiamycin sales in Brazil. We continue to work toward the regulatory approvals necessary to make therapeutic claims for virginiamycin in Brazil, and with the election now behind us, we are optimistic that progress on those approvals may be forthcoming. Our fiscal 2027 guidance continues to assume no additional virginiamycin sales in Brazil for the remainder of the fiscal year, so any approval would represent potential upside.\u201d<\/p>\n \n\u201cWe generated positive cash flow in the first quarter, and we see a clear opportunity to do more, particularly in managing inventory. Improving working capital and cash conversion is a top priority, and we are committed to delivering meaningful progress during fiscal 2027.\u201d<\/p>\n \n\u201cThe first quarter was a solid start to the year. Given the timing of certain costs and the assumptions already built into our outlook, we are maintaining our fiscal 2027 financial guidance.\u201d<\/p>\n \nQUARTERLY RESULTS<\/p>\n Net sales<\/b><\/p>\n \nNet 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.<\/p>\n Animal Health<\/i><\/p>\n \nNet 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.<\/p>\n \nNet 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.<\/p>\n \nNet 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.<\/p>\n Mineral Nutrition<\/i><\/p>\n \nNet sales of\u2009$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.<\/p>\n Performance Products<\/i><\/p>\n \nNet 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.<\/p>\n Gross profit<\/b><\/p>\n \nGross 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.<\/p>\n \nExcluding 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.<\/p>\n Selling, general and administrative expenses<\/b><\/p>\n \nSelling, general and administrative expenses (\u201cSG&A\u201d) 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%.<\/p>\n \nAnimal 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.<\/p>\n Interest expense, net<\/b><\/p>\n \nInterest 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.<\/p>\n Foreign currency (gains) losses, net<\/b><\/p>\n \nForeign 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.<\/b>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.<\/p>\n Provision for income taxes<\/b><\/p>\n \nThe 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.<\/p>\n \nThe 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.<\/p>\n \nThe 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.<\/p>\n \nIt 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.<\/p>\n Net income<\/b><\/p>\n \nNet 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.<\/p>\n Adjusted EBITDA<\/b><\/p>\n \nAdjusted EBITDA of $64.3 million for the three months ended September 30, 2026 increased $2.4 million, or 4%, as compared to the three months ended September 30, 2025. Animal Health Adjusted EBITDA decreased $1.0 million due to higher SG&A offsetting higher gross profit from increased sales. Mineral Nutrition Adjusted EBITDA increased $1.6 million due to higher gross profit from increased sales, and Performance Products Adjusted EBITDA increased $1.2 million due to higher sales. Corporate expenses decreased $0.6 million, driven by lower consulting and business development costs.<\/p>\n Adjusted provision for income taxes<\/b><\/p>\n \nThe adjusted provision for income taxes was $10.5 million and $10.4 million for the three months ended September 30, 2026 and 2025, respectively. The adjusted effective income tax rates were 24.5% and 25.9% for the three months ended September 30, 2026 and 2025, respectively. The adjusted effective income tax rate for the three months ended September 30, 2026 was lower than the rate for the three months ended September 30, 2025, primarily due to the mix of income.<\/p>\n Adjusted net income<\/b><\/p>\n \nAdjusted net income of $32.4 million for the three months ended September 30, 2026 increased $2.5 million as compared to the prior year, primarily due to higher gross profit from sales growth, lower interest expense and a lower adjusted effective income tax rate, partially offset by higher adjusted SG&A. Adjusted SG&A increased due to higher employee-related costs.<\/p>\n Adjusted diluted earnings per share<\/b><\/p>\n \nAdjusted diluted earnings per share was $0.79 for the quarter, an increase of $0.06 as compared to the adjusted diluted earnings per share of $0.73 in the prior year.<\/p>\n BALANCE SHEET AND CASH FLOWS<\/b><\/p>\n FISCAL YEAR 2027 FINANCIAL GUIDANCE<\/b><\/p>\n \nOur fiscal year 2027 financial guidance is as shown below, with our guidance maintained from the previous quarter. Year-over-year percentages are calculated using the midpoint of the guidance ranges.<\/p>\n \nGuidance for GAAP measures assumes no additional foreign exchange (gains) losses for the year ending June 30, 2027.<\/p>\n \nWEBCAST & CONFERENCE CALL DETAILS<\/p>\n \nPhibro Animal Health Corporation will host a webcast and conference call during which the Company will review its financial results and respond to questions.<\/p>\n
\nPhibro Animal Health Corporation (Nasdaq: PAHC) (\u201cPhibro\u201d or the \u201cCompany\u201d) today announced financial results for its first quarter ended September 30, 2026 and maintained its financial guidance for the year ending June 30, 2027.<\/p>\n\n
\n
\n
\n
\n