Phibro Animal Health Corporation Reports Fourth-Quarter and Fiscal Year Results, Announces Financial Outlook
Phibro Animal Health Corporation (Nasdaq: PAHC) has reported a strong finish to fiscal 2026, highlighting substantial growth in sales, profitability and adjusted earnings while providing financial guidance for fiscal 2027. The company’s results reflect continued momentum across its diversified animal health and nutrition portfolio, supported by higher demand, favorable product mix and the benefits of its multi-year transformation initiatives.
For the fourth quarter ended June 30, 2026, Phibro generated net sales of $396.7 million, representing an increase of $18.1 million, or 5%, compared with the same quarter a year earlier. Net income reached $21.7 million, up $4.5 million, or 26%. Diluted earnings per share increased 26% to $0.53, while Adjusted EBITDA climbed 29% to $64.2 million. Adjusted net income rose 37% to $35.0 million, and adjusted diluted earnings per share increased 35% to $0.85.
The company also delivered significant full-year gains. For the fiscal year ended June 30, 2026, net sales totaled $1.518 billion, an increase of $221.9 million, or 17%, compared with fiscal 2025. Net income more than doubled to $99.7 million, an increase of $51.5 million. Adjusted EBITDA increased 39% to $255.0 million, while adjusted net income rose 49% to $131.7 million. Adjusted diluted EPS reached $3.22, up 48% from the previous year.
Strong Fourth-Quarter Sales Across Key Businesses
Phibro’s fourth-quarter performance was supported by growth across its principal operating segments. Animal Health generated $297.6 million in net sales, an increase of $5.1 million, or 2%, from the prior-year period. Sales of MFAs and other products increased modestly, with stronger demand for certain antimicrobials sold through the company’s ethanol performance business offsetting lower sales from products within the MFA portfolio acquired in October 2024.
Nutritional specialty products posted a $2.5 million, or 5%, increase, primarily reflecting stronger dairy demand in North America. Vaccine sales rose $1.5 million, or 4%, driven by continued poultry-product growth in Latin America and stronger international demand, particularly in Israel.
Mineral Nutrition delivered one of the strongest quarterly increases, with sales reaching $77.0 million, up $12.8 million, or 20%. The growth was primarily attributed to increased demand for zinc and trace minerals. Performance Products sales were $22.2 million, essentially unchanged from the prior year, as increased demand for copper-based products offset weaker demand for ingredients used in personal care applications.
Improved Margins and Profitability
Phibro’s quarterly gross profit increased 22% to $134.4 million, while gross margin expanded by 490 basis points to 33.9%. Excluding certain acquisition-related and other non-recurring items, gross profit increased 18% and adjusted gross margin expanded to 34.6%. The company attributed the improvement to higher sales volumes and a favorable product mix, although higher input costs partially offset the gains. The quarter also benefited from a $4.3 million net contribution from tariff recovery efforts.
Selling, general and administrative expenses increased 13% to $86.2 million. The increase reflected higher employee-related costs, acquisition expenses, Phibro Forward initiatives and other corporate expenses. Despite the higher cost base, improved gross profit helped operating income rise substantially.
Adjusted EBITDA reached $64.2 million during the quarter, an increase of $14.3 million, or 29%. Animal Health accounted for the majority of the improvement, with its Adjusted EBITDA increasing $14.9 million on higher sales and gross profit.
Record Fiscal-Year Performance
The full fiscal year demonstrated the growing contribution of Phibro’s Animal Health business. Animal Health sales increased 21% to $1.162 billion, up $199.4 million from fiscal 2025. MFA and other sales rose $164.4 million, including $146.1 million in incremental revenue from the MFA portfolio acquired in October 2024. The company also benefited from stronger demand for legacy MFAs in Mexico and Southeast Asia and increased sales of products used in ethanol production.
Nutritional specialty product sales increased 9% to reflect higher worldwide demand, particularly in North and South America, as well as growth in companion animal products. Vaccine sales rose 14%, supported by continued poultry-product expansion in Latin America and increased domestic and international demand.
Mineral Nutrition sales increased 11% to $282.3 million, driven primarily by stronger demand for copper, zinc and trace minerals. In contrast, Performance Products sales declined 8% to $73.5 million because of lower demand for ingredients used in personal care products.
Full-year gross profit climbed 28% to $512.5 million. Gross margin increased from 30.9% to 33.8%, while adjusted gross margin reached 34.6% after excluding specified non-recurring items. The improvement was driven by sales growth, favorable product mix and higher average selling prices, partially offset by increased input and distribution costs.
Adjusted EBITDA rose $71.3 million, or 39%, to $255.0 million. Animal Health was the principal contributor, with Adjusted EBITDA increasing $81.3 million as a result of higher sales and gross profit.
Phibro Forward Transformation Program Concludes
The company also marked the formal completion of Phibro Forward, its enterprise-wide transformation program. According to management, the three-year initiative strengthened accountability, improved execution and enhanced operating practices across the organization. Based on the fiscal 2027 outlook, Phibro estimates that nearly one-fifth of every dollar of Adjusted EBITDA can be attributed to Phibro Forward initiatives realized since the program began.
Dani Bendheim, President and Chief Executive Officer of Phibro Animal Health Corporation, described fiscal 2026 as a year of meaningful progress. The company delivered record sales of approximately $1.5 billion, expanded margins and increased Adjusted EBITDA by 39% to $255 million. Bendheim also emphasized the importance of building on these gains and positioning the business for sustained long-term growth.
Chicago Heights Facility to Close
Alongside its financial results, Phibro announced plans to close its Chicago Heights, Illinois, manufacturing facility as part of a strategic consolidation of its manufacturing network. The decision follows a comprehensive review conducted after the company’s 2024 acquisition of MFA assets and facilities.
Production at the Chicago Heights site is expected to end during the summer of 2027, affecting approximately 100 employees. Products currently manufactured at the facility will be transferred to other Phibro-owned facilities and selected third-party contract manufacturers.
Management characterized the move as a long-term network optimization decision intended to align manufacturing capacity with future business requirements, improve efficiency and strengthen competitiveness. Phibro also said it intends to approach the transition with transparency and support for affected employees.
Balance Sheet and Cash Flow
At June 30, 2026, Phibro reported $737.9 million in total debt and $82.0 million in cash and short-term investments. The company’s gross leverage ratio stood at 2.9 times, based on Adjusted EBITDA of $255.0 million for the twelve months ended June 30. Free cash flow for the period was $9.9 million.
Interest expense increased during both the fourth quarter and full year, partly because a favorable interest rate swap agreement covering $300 million of notional debt expired. Higher average term-loan balances associated with acquisition financing also contributed to the increase in annual interest expense.
Fiscal 2027 Guidance
Looking ahead, Phibro expects continued growth across Animal Health, Mineral Nutrition and Performance Products. The company is forecasting fiscal 2027 net sales between $1.55 billion and $1.60 billion, representing approximately 4% growth at the midpoint of the range.
The company expects net income of $122 million to $132 million and diluted EPS of $2.98 to $3.22. Adjusted EBITDA is projected at $258 million to $268 million, while adjusted net income is expected to reach $140 million to $147 million. Adjusted diluted EPS is forecast at $3.41 to $3.59, with an adjusted effective income tax rate of approximately 20%.
The outlook takes a cautious approach to regulatory uncertainty surrounding virginiamycin in Brazil. Phibro’s fiscal 2027 guidance assumes only minimal sales of the product because the company has not yet obtained the required therapeutic indications. Management noted that a favorable regulatory decision could provide modest upside to current expectations if approval occurs before the existing phase-out period ends.
With record fiscal 2026 sales, substantial Adjusted EBITDA growth, improved margins and a completed transformation program, Phibro enters fiscal 2027 focused on continued expansion. At the same time, the planned manufacturing consolidation and disciplined financial outlook demonstrate the company’s effort to improve efficiency while maintaining investment in innovation, customer service and long-term shareholder value.
Source Link:https://www.businesswire.com/
