Phibro Animal Health Files 10-Q for Q2 2025

TL;DR

Phibro Animal Health (PAHC) filed its Q2 2025 10-Q. Check financials.

AI Summary

Phibro Animal Health Corporation filed its 10-Q for the period ending December 31, 2024. The company reported its financial performance, including details on its business operations and financial condition. Specific financial figures and operational highlights for the quarter are detailed within the filing.

Why It Matters

This filing provides investors with an update on Phibro Animal Health's financial performance and operational status for the second quarter of fiscal year 2025, impacting investment decisions.

Risk Assessment

Risk Level: medium — As a publicly traded company in the pharmaceutical preparations sector, Phibro Animal Health is subject to market, regulatory, and operational risks inherent in the industry.

Key Numbers

• 2025 Q2 — Fiscal Quarter (Reporting period for this 10-Q filing.)

Key Players & Entities

• PHIBRO ANIMAL HEALTH CORP (company) — Filer
• 20241231 (date) — Period of Report
• 20250205 (date) — Filing Date
• TEANECK, NJ (location) — Business Address
• PHILIPP BROTHERS CHEMICALS INC (company) — Former Company Name

FAQ

Filing Documents

• pahc-20241231x10q.htm (10-Q) — 2496KB
• pahc-20241231xex31d1.htm (EX-31.1) — 8KB
• pahc-20241231xex31d2.htm (EX-31.2) — 8KB
• pahc-20241231xex32d1.htm (EX-32.1) — 4KB
• pahc-20241231xex32d2.htm (EX-32.2) — 4KB
• 0001558370-25-000659.txt ( ) — 10399KB
• pahc-20241231.xsd (EX-101.SCH) — 67KB
• pahc-20241231_cal.xml (EX-101.CAL) — 90KB
• pahc-20241231_def.xml (EX-101.DEF) — 347KB
• pahc-20241231_lab.xml (EX-101.LAB) — 479KB
• pahc-20241231_pre.xml (EX-101.PRE) — 530KB
• pahc-20241231x10q_htm.xml (XML) — 1979KB

—FINANCIAL INFORMATION

PART I—FINANCIAL INFORMATION Item 1.

Financial Statements (unaudited)

Financial Statements (unaudited) 3 Consolidated Statements of Operations 3 Consolidated Statements of Comprehensive (Loss) Income 4 Consolidated Balance Sheets 5 Consolidated Statements of Cash Flows 6 Consolidated Statements of Changes in Stockholders' Equity 7

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements 8 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 26 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 42 Item 4.

Controls and Procedures

Controls and Procedures 42

—OTHER INFORMATION

PART II—OTHER INFORMATION Item 1.

Legal Proceedings

Legal Proceedings 43 Item 1A.

Risk Factors

Risk Factors 43 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 43 Item 3. Defaults Upon Senior Securities 43 Item 4. Mine Safety Disclosures 43 Item 5. Other Information 43 Item 6. Exhibits 43

SIGNATURES

SIGNATURES 44 2 Table of Contents

—FINANCIAL INFORMATION

PART I—FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements PHIBRO ANIMAL HEALTH CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS Three Months Six Months For the Periods Ended December 31 2024 2023 2024 2023 (unaudited) (in thousands, except per share amounts) Net sales $ 309,261 $ 249,943 $ 569,693 $ 481,292 Cost of goods sold 207,391 171,327 384,328 334,950 Gross profit 101,870 78,616 185,365 146,342 Selling, general and administrative expenses 76,337 62,915 142,133 131,367 Operating income 25,533 15,701 43,232 14,975 Interest expense, net 8,996 4,659 16,637 9,223 Foreign currency losses, net 11,699 7,477 12,137 14,166 Income (loss) before income taxes 4,838 3,565 14,458 ( 8,414 ) Provision (benefit) for income taxes 1,653 2,291 4,298 ( 1,673 ) Net income (loss) $ 3,185 $ 1,274 $ 10,160 $ ( 6,741 ) Net income (loss) per share basic $ 0.08 $ 0.03 $ 0.25 $ ( 0.17 ) diluted $ 0.08 $ 0.03 $ 0.25 $ ( 0.17 ) Weighted average common shares outstanding basic 40,504 40,504 40,504 40,504 diluted 40,715 40,504 40,649 40,504 The accompanying notes are an integral part of these consolidated financial sta tements 3 Table of Contents PHIBRO ANIMAL HEALTH CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME Three Months Six Months For the Periods Ended December 31 2024 2023 2024 2023 (unaudited) (in thousands) Net income (loss) $ 3,185 $ 1,274 $ 10,160 $ ( 6,741 ) Change in fair value of derivative instruments 2,188 ( 4,723 ) ( 2,660 ) ( 6,614 ) Foreign currency translation adjustment ( 11,931 ) 4,418 ( 8,763 ) 858 Pension settlement recognition — 249 — 10,674 Unrecognized net pension gains 80 101 158 745 (Provision) benefit for income taxes ( 567 ) 1,196 627 ( 1,068 ) Other comprehensive (loss) income ( 10,230 ) 1,241 ( 10

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in thousands, except per share amounts) (unaudited) 1. Description of Business Phibro Animal Health Corporation ("Phibro" or "PAHC") and its subsidiaries (together, the "Company") is a diversified global developer, manufacturer and marketer of a broad range of animal health and mineral nutrition products for food and companion animals including poultry, swine, beef and dairy cattle, aquaculture and dogs. The Company is also a manufacturer and marketer of performance products for use in the personal care, industrial chemical and chemical catalyst industries. Unless otherwise indicated or the context requires otherwise, references in this report to "we," "our," "us," and similar expressions refer to Phibro and its subsidiaries. The unaudited consolidated financial information for the three and six months ended December 31, 2024 and 2023, is presented on the same basis as the financial statements included in the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 2024 (the "Annual Report"), filed with the Securities and Exchange Commission on August 28, 2024 (File no. 001-36410). In the opinion of management, these financial statements include all adjustments necessary for a fair statement of the financial position, results of operations and cash flows of the Company for the interim periods, and the adjustments are of a normal and recurring nature. The financial results for any interim period are not necessarily indicative of the results for the full year. The consolidated balance sheet information as of June 30, 2024, was derived from the audited consolidated financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America ("GAAP"). The unaudited consolidated financial information should be read in conjunction with the consolidated financial statements and notes thereto included in the Annual Report. The consolidated f

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued) Diluted net income (loss) per share is calculated by dividing net income (loss) by the weighted average number of common shares outstanding during the reporting period after giving effect to dilutive common share equivalents resulting from the assumed vesting of restricted stock units ("RSUs"), unless the effect would be antidilutive or if the minimum stock price targets for our performance-based RSUs were not achieved during the reporting period. Common share equivalents were included in the calculation of diluted net income per share for the three and six months ended December 31, 2024. Common share equivalents composed of 300,000 performance-based RSUs were not included in the calculation of diluted net income per share for the three months ended December 31, 2023 because the minimum stock price targets were not achieved during that period. For the six months ended December 31, 2023, such RSUs were not included in the calculation of diluted net income per share because the Company experienced a net loss for the period and the effect of including these equivalents in the calculation would have been antidilutive. For further information on RSUs, see Note 8. Three Months Six Months For the Periods Ended December 31 2024 2023 2024 2023 Net income (loss) $ 3,185 $ 1,274 $ 10,160 $ ( 6,741 ) Weighted average number of shares – basic 40,504 40,504 40,504 40,504 Dilutive effect of restricted stock units 211 — 145 — Weighted average number of shares - diluted 40,715 40,504 40,649 40,504 Net income (loss) per share basic $ 0.08 $ 0.03 $ 0.25 $ ( 0.17 ) diluted $ 0.08 $ 0.03 $ 0.25 $ ( 0.17 ) New Accounting Standards Financial Accounting Standards Board ("FASB") Accounting Standards Update ("ASU") 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, requires the disclosure of significant segment expe

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued) 3. Acquisition On October 31, 2024 , the Company completed its acquisition of the medicated feed additives portfolio, certain water-soluble products and related assets from Zoetis, Inc (the "Acquisition"). The Acquisition was accounted for as a business combination under the acquisition method of accounting. The acquisition method requires, among other things, that assets acquired and liabilities assumed in a business combination be recognized at their fair values as of the acquisition date. The determination of estimated fair value requires management to make significant estimates and assumptions. 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. The Acquisition has expanded our medicated feed additives and water-soluble products category, advanced our planned existing product portfolio enhancement and diversified our species and product offerings, which complements our commercial operations and international infrastructure while expanding our global presence. The preliminary purchase price for the Acquisition was approximately $ 301.8 million ($ 290.8 million net of cash acquired), which was funded by Delayed Draw Term A-1 Loans and Delayed Draw Term A-2 Loans drawn on 2024 Credit Facilities (each as defined below in Note 6). The purchase and sale agreement underlying the transaction provides for closing working capital and other adjustments to be completed after the Acquisition. These adjustments, which are expected to be completed in our fourth fiscal quarter, have yet to be finalized and could materially change the purchase price consideration of the Acquisition. For the three and six months ended December 31, 2024, we recognized transaction costs related to the Acquisition of $ 8.8 million and $ 12.2 million, respectively. These costs were primarily associated with financi

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued) (1) Includes current and noncurrent amounts. (2) The preliminary purchase price consideration excludes amounts related to the settlement of the final purchase price subsequent to December 31, 2024, as disclosed above. Any increase or decrease in the fair value of the net assets acquired, as compared to the information shown herein, could also change the portion of the purchase consideration allocable to the acquired assets and assumed liabilities and could impact the operating results of the combined company following the Acquisition due to differences in the allocation of the purchase consideration and changes in the depreciation and amortization related to some of these assets and liabilities. In the table above, the estimate of fair value of inventories, net was determined using the replacement cost method, which contemplates the costs to complete the manufacturing and sales process, a reasonable profit allowance from the sales process, and estimated holding costs. The cost basis of raw materials was determined to represent current replacement cost and therefore approximates fair value. The net fair value step-up adjustment to inventories of $ 5.3 million is being amortized to cost of sales as the inventory is sold to customers. The calculated value of the estimated step-up for inventory is preliminary, as management's valuation of the acquisition and its allocation of the purchase price consideration are still in progress, and there are net working capital adjustments and in-transit inventory transactions that have yet to be finalized. Accordingly, the inventory, net step-up is subject to change and could vary materially from the final purchase price allocation. Property, plant and equipment, net is composed of land, buildings, equipment (including machinery, furniture and fixtures, and computer equipment), and construction-in-progress. The estimate of fair value of property, plant and equipment, net w

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued) demand for many of the animal health products in a particular region are affected by changing disease pressures and by weather conditions, as product usage follows varying weather patterns and seasons. Our operations are primarily focused on regions where the majority of livestock production is consolidated in large commercial farms. We have a diversified portfolio of products that are classified within our three reportable business segments—Animal Health, Mineral Nutrition and Performance Products. Each segment has its own dedicated management and sales team. Animal Health The Animal Health business develops, manufactures and markets products in three main categories: MFAs and other: MFAs and other products primarily consist of concentrated medicated products administered through animal feeds, commonly referred to as Medicated Feed Additives ("MFAs"). Specific product classifications include antibacterials, which inhibit the growth of pathogenic bacteria that cause infections in animals; anticoccidials, which inhibit the growth of coccidia (parasites) that damage the intestinal tract of animals; and other related products. The MFAs and other category also includes antibacterials and other processing aids used in the ethanol fermentation industry. Nutritional specialties: Nutritional specialty products enhance nutrition to help improve health and performance in areas such as immune system function and digestive health. We are also a developer, manufacturer and marketer of microbial products and bioproducts for a variety of applications serving animal health and nutrition, environmental, industrial and agricultural customers. Vaccines: Vaccine products are primarily focused on preventing diseases in poultry, swine, beef and dairy cattle and aquaculture. They protect animals from either viral or bacterial disease challenges. We develop, manufacture and market conventionally licensed and autogenous vaccine

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