Financial Analysis

"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 purchase price for the Acquisition was approximately $297.5 million ($286.5 million, as adjusted, 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 …

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9. Commitments and Contingencies Environmental Our operations and properties are subject to extensive federal, state, local and foreign laws and regulations, including those governing pollution; protection of the environment; the use, management, and release of hazardous materials, substances and wastes; air emissions; greenhouse gas emissions; water use, supply and discharges; the investigation and remediation of contamination; the manufacture, distribution, and sale of regulated materials, including pesticides; the importing, exporting and transportation of products; and the health and safety of our employees (collectively, Environmental Laws). As such, the nature of our current and former operations exposes us to the risk of claims with respect to such matters, including fines, penalties, and remediation obligations that may be imposed by regulatory authorities. Under certain circumstances, we might be required to curtail operations until a particular problem is remedied. Known costs and expenses under Environmental Laws incidental to ongoing operations, including the cost of litigation proceedings relating to environmental matters, are included within operating results. Potential costs and expenses may also be incurred in connection with the repair or upgrade of facilities to meet existing or new requirements under Environmental Laws or to investigate or remediate potential or actual contamination, and from time to time we establish reserves for such contemplated investig …

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6. Debt Term Loans and Revolving Credit Facilities 2024 Credit Agreement 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 Loans (as defined below) and Delayed Draw Term A-2 Loans (as defined below) were drawn on October 31, 2024 and used to finance the purchase price of the Acquisition discussed in Note 3 Acquisition. The 2024 Credit Agreement provides for: (i) Initial Term A-1 Loans in an initial aggregate principal amount of $162,000 (the Initial Term A-1 Loans), (ii) Delayed Draw Term A-1 Loans in an initial aggregate principal amount of $189,000 (the Delayed Draw Term A-1 Loans and, together with the Initial Term A-1 Loans, the Term A-1 Loans), (iii) Initial Term A-2 Loans in an initial aggregate principal amount of $138,000 (the Initial Term A-2 Loans), (iv) Delayed Draw Term A-2 Loans in an initial aggregate principal amount of $161,000 (the Delayed Draw Term A-2 Loans and, together with the Initial Term A-2 Loans, the Term A-2 Loans), and (v) Revolving Credit Commitments in an initial aggregate principal amount of $310,000 (the Revolving Credit Commitments and, together with the Term A-1 Loans and Term A-2 Loans, the 2024 Credit Facilities). The 2024 Credit Facilities mature in July 2029 …

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Net Sales by Product Type Three Months Six Months For the Periods Ended December 31 2025 2024 2025 2024 Animal Health MFAs and other $ 202,111 $ 150,338 $ 397,309 $ 258,182 Nutritional specialties 50,230 45,909 98,381 88,558 Vaccines 37,636 33,171 77,743 65,201 Total Animal Health $ 289,977 $ 229,418 $ 573,433 $ 411,941 Mineral Nutrition 68,945 63,250 131,933 122,312 Performance Products 14,988 16,593 32,437 35,440 Total $ 373,910 $ 309,261 $ 737,803 $ 569,693 Net Sales by Region Three Months Six Months For the Periods Ended December 31 2025 2024 2025 2024 United States $ 221,757 $ 184,441 $ 424,104 $ 327,990 Latin America and Canada 87,600 72,674 174,826 143,825 Europe, Middle East and Africa 44,784 32,589 89,726 63,714 Asia Pacific 19,769 19,557 49,147 34,164 Total $ 373,910 $ 309,261 $ 737,803 $ 569,693 …

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8. Stock Incentive Plan Restricted Stock Units On August 1, 2025, the Company, granted 113,847 time-based RSUs with a grant date fair value of $25.19 to certain senior-level employees pursuant to the Companys Incentive Plan. Each RSU represents the right to receive a share of our common stock upon vesting. These RSUs vest in three equal annual amounts on each anniversary of August 1, 2025, subject to continued employment through the applicable vesting date. In fiscal 2024, our Board of Directors approved grants of 600,000 RSUs to certain officers of the Company, pursuant to the Companys Incentive Plan and the RSU award agreements. Certain of these RSUs are subject to time-based vesting and certain RSUs are subject to performance-based vesting contingent upon the achievement of certain stock price targets. The fair value of time-based RSUs is equal to the closing market price of the underlying common stock on the grant date, less the present value of expected dividends over the vesting period. A Monte Carlo simulation model was used to determine the grant date fair value of the performance-based RSUs. We recognize stock-based compensation expense for the RSUs on a straight-line basis over the vesting periods. Stock-based compensation expense related to the RSUs was $434 and $180 for the three months ended December 31, 2025 and 2024 and $773 and $359 for the six months ended December 31, 2025 and 2024, respectively. As of December 31, 2025, there was $4,110 of unrecognized comp …

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11. Fair Value Measurements Cash Equivalents Our cash equivalents consist of time deposits with an original maturity of less than three months held at financial institutions. We consider the carrying amounts of these current assets to be recorded at their fair value because of the current nature of these items. Short-term Investments Our short-term investments consist of cash deposits with original maturity of greater than three months, but no greater than twelve months, held at financial institutions. We consider the carrying amounts of these current assets to be recorded at their fair value because of the current nature of these items. Current Assets and Liabilities We consider the carrying amounts of current assets and current liabilities to be representative of their fair value because of the current nature of these items. Debt We record debt, including term loans and revolver balances, at amortized cost in our consolidated financial statements. We believe the carrying value of the debt is approximately equal to its fair value, due to the variable nature of the instruments and our evaluation of estimated market prices. Derivatives We determine the fair value of derivative instruments based upon pricing models using observable market inputs for these types of financial instruments, such as spot and forward currency translation rates. Non-financial Assets Our non-financial assets, which primarily consist of goodwill, other intangible assets, property and equipment, and leas …

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New Accounting Standards Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, enhances income tax disclosures primarily related to the rate reconciliation and income taxes paid information. The ASU outlines specific categories to be provided in the rate reconciliation and requires additional information for those reconciling items that meet a quantitative threshold. The ASU requires disaggregated disclosure of federal, state and foreign income taxes paid, including disaggregation by individual jurisdictions in which income taxes paid (net of refunds received) is equal to or greater than five percent of total income taxes paid (net of refunds received). The ASU also requires disaggregated disclosure of federal, state and foreign income (loss) from continuing operations before income taxes. The enhanced disclosures will be applied on a prospective basis and are required for Phibros fiscal year ending June 30, 2026. We are evaluating the impact of the additional income tax-related disclosures. ASU 2024-03, (Subtopic 220-40): Disaggregation of Income Statement Expenses and ASU 2025-01, Clarifying the Effective Date , requires disclosure, in the notes to the financial statements, of certain costs and expenses, including purchases of inventory, employee compensation, depreciation, and intangible asset amortization included in each relevant expense caption, as well as a qualitative de …

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7. Related Party Transactions Certain relatives of Jack C. Bendheim, our Chairman, President and Chief Executive Officer, provided services to the Company as employees or consultants and received aggregate compensation and benefits of approximately $442 and $507 during the three months ended December 31, 2025 and 2024, and $1,640 and $1,288 during the six months ended December 31, 2025 and 2024, respectively. Mr. Bendheim has sole authority to vote shares of our stock owned by BFI Co., LLC, an investment vehicle of the Bendheim family.

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4. Statements of OperationsAdditional Information Disaggregated revenue, deferred revenue and customer payment terms 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. The products help prevent, control and treat diseases and enhance nutrition to help improve animal health and well-being. We sell animal health and mineral nutrition products directly to integrated poultry, cattle and swine customers and through commercial animal feed manufacturers, distributors and veterinarians. The animal health industry and 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 segmentsAnimal 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 p …

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12. Business Segments We evaluate performance and allocate resources based on the Animal Health, Mineral Nutrition and Performance Products reporting segments. The Chief Executive Officer is the chief operating decision-maker (CODM) for the Company. We evaluate performance of our segments based on Adjusted EBITDA. Included in the segment Adjusted EBITDA analyses provided to the CODM is information on segment cost of sales and selling, general and administrative expenses. There are no other significant segment expense categories regularly provided to the CODM. We calculate Adjusted EBITDA as net income plus (a) interest expense, net, (b) provision for income taxes or less benefit for income taxes, (c) depreciation and amortization, (d) other non-operating expense or less other income, as separately reported on our consolidated statements of operations, including foreign currency (gains) losses, net and (e) certain items that we consider to be unusual, non-operational or non-recurring. However, some of these items may not be applicable to the calculation of Adjusted EBITDA for our segments, as we do not typically include interest, other non-operating items, or income tax-related items in our segment results. Certain of our costs and assets are not directly attributable to a segment or segments, and we refer to these items as Corporate. We do not allocate Corporate costs or assets to the other segments because they are not used to evaluate the segments operating results or finan …

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