0001104659-26-056280
SEC filingRevenue grew 22% driven by Zoetis MFA acquisition; Adjusted EBITDA up 43%.
For the nine months ended March 31, 2026, net sales increased 22% to $1.12 billion, primarily driven by the Animal Health segment, which benefited from the Zoetis medicated feed additive (MFA) acquisition completed in October 2024. Gross profit rose 30% to $378.1 million, with gross margin expanding 210 basis points to 33.7% due to higher sales volume, favorable product mix, and increased average selling prices, partially offset by higher input and distribution costs. Operating income surged 91% to $146.2 million, reflecting strong operating leverage. Net income more than doubled to $78.0 million, and diluted EPS increased to $1.90 from $0.76 in the prior year.
Animal Health net sales grew 29% to $864.7 million, with MFAs and other up 37%, nutritional specialties up 10%, and vaccines up 18%. The MFA acquisition contributed $156.8 million in incremental revenues. Adjusted EBITDA for Animal Health increased 41% to $228.1 million, with margin expanding to 26.4% from 24.1%. Mineral Nutrition net sales rose 9% to $205.4 million, driven by copper, zinc, and trace minerals demand, though Adjusted EBITDA margin slipped to 7.8% from 8.1% due to higher costs. Performance Products net sales declined 12% to $51.3 million on lower demand for personal care ingredients, with Adjusted EBITDA margin falling to 9.1% from 12.9%.
Management highlighted ongoing strategic initiatives under "Phibro Forward" to unlock revenue growth and cost savings, with $7.0 million in SG&A costs in the nine-month period. The company amended its credit agreement in April 2026 to increase revolving commitments by $125 million to $435 million for enhanced flexibility. Key regulatory risks include the potential FDA withdrawal of Mecadox (carbadox) and a recent Brazilian ordinance banning antimicrobial growth promoters, which may impact virginiamycin sales; however, the company is pursuing therapeutic registrations. No specific financial guidance was provided for future periods.
As of March 31, 2026, Phibro held $54.9M in cash and $22.5M in short-term investments. Total debt stood at $735.5M, consisting of $625.9M in term loans (net of issuance costs), $115.0M drawn on the revolver, and $22.8M current portion. The net increase in debt from June 30, 2025 was $16.8M. Stockholders' equity rose to $361.8M, driven by net income and other comprehensive income. Inventory increased to $539.7M, up 21% from $444.4M, reflecting the Zoetis acquisition and seasonal buildup.
The only quantified commitment disclosed is an estimated environmental remediation liability of $4.2M, included in current and long-term liabilities. There are no other material purchase commitments, off-balance-sheet arrangements, or contractual obligations quantified in the notes. The company had $1.8M in outstanding letters of credit under the revolver.
Phibro did not repurchase shares during the period. Dividends remained steady at $0.12 per share quarterly, totaling $14.6M in the nine months. The company invested $40.2M in capital expenditures, representing 3.6% of net sales. Debt management included $221M in revolver borrowings and $193M in repayments, plus $12.2M in scheduled term loan repayments. No new debt was issued, but the revolver was used for working capital. After quarter end, the company amended the credit agreement to increase revolver capacity by $125M to $435M.
Segment results are reported based on Adjusted EBITDA. Animal Health generated $864.7M in revenue (77% of total), up 29% YoY, benefiting from the Zoetis acquisition which contributed $270.5M in the nine months. Mineral Nutrition revenue grew 8.6% to $205.4M, while Performance Products declined 11.7% to $51.3M. Geographically, the U.S. accounted for 59% of total revenue ($656.9M), followed by Latin America & Canada (22%), Europe Middle East & Africa (12%), and Asia Pacific (7%). No segment-level geographic breakdown was provided.
Operating cash flow (CFO) of $44.9M was well below net income of $78.0M. The primary driver was a massive $92.5M increase in inventories, partially offset by a $8.9M decrease in receivables and modest payables reduction. Non-cash items like depreciation ($38.2M) and deferred taxes ($9.7M) boosted CFO. Capex intensity rose sharply: capex of $40.2M consumed 89.6% of CFO, compared to 42.7% in the prior period. Free cash flow (CFO minus capex) was only $4.6M, insufficient to cover dividends of $14.6M, implying reliance on financing or cash reserves. The company funded capex partly through net borrowing (revolver net +$28.0M) and used cash and equivalents ($13.1M decline). The working capital swing suggests aggressive inventory build for demand or supply chain issues. Overall, cash generation weakened significantly, with high capex and modest free cash flow.