Phibro Animal Health Corporation (NASDAQ:PAHC) Q2 2023 Earnings Conference Call February 9, 2023 9:00 AM ET Company Participants Damian Finio - Chief Financial Officer Jack Bendheim - Chairman, President and CEO Daniel Bendheim - Director and Executive Vice President, Corporate Strategy Conference Call Participants Brian Wright - ROTH MKM Operator Good morning. My name is Jeannie, and I will be your conference operator today. At this time, I would like to welcome everyone to the Phibro Animal Health Corpora ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended December 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-36410 Phibro Animal Health Corporation (Exact name of registrant as specified in its charter) Delaware 13- ...

Phibro Animal Health Corporation (NASDAQ:PAHC) Q1 2023 Earnings Conference Call November 10, 2022 9:00 AM ET Company Participants Damian Finio - Chief Financial Officer Jack Bendheim - Chairman, President and CEO Daniel Bendheim - Director and Executive Vice President, Corporate Strategy Conference Call Participants Erin Wright - Morgan Stanley Wolf Chanoff - Bank of America Operator Hello and thank you for standing by. My name is Regina, and I will be your conference operator today. At this time, I would l ...

Phibro Animal Health Corporation Financial Results Fiscal Year 2023 First Quarter Ended September 30, 2022 Webcast and Conference Call November 10, 2022 U.S. toll-free +1.888.330.2022 International toll +1.365.977.0051 Conference ID: [3927884] 1 November 10, 2022 Webcast & Conference Call Important Information Cautionary Statement Regarding Forward-Looking Statements This communication contains forward-looking statements that are subject to risks and uncertainties, including with respect to future debt and ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-36410 Phibro Animal Health Corporation (Exact name of registrant as specified in its charter) Delaware 13 ...

Phibro Animal Health Corporation (NASDAQ:PAHC) Q4 2022 Earnings Conference Call August 25, 2022 9:00 AM ET Company Participants Damian Finio - CFO Jack C. Bendheim - Chairman, President, and CEO Daniel M. Bendheim - Director and EVP, Corporate Strategy Conference Call Participants John Kim - Bank of America Justin Wang - Morgan Stanley Operator Good morning. My name is Chris and I'll be your conference operator today. At this time, I would like to welcome everyone to the Phibro Animal Health Corporation Q4 ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended June 30, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-36410 Phibro Animal Health Corporation (Exact name of registrant as specified in its charter) Delaware 13-1840497 (Sta ...

Financial Performance - Q3 2022 - Net sales increased by $27.9 million, a 13% increase year-over-year, driven by improvements across all business segments and regions[11] - Net income increased by $5.5 million, a 45% increase year-over-year, driven by stronger volumes and selling prices[11] - Adjusted EBITDA remained comparable to the prior year's quarter at $28.0 million[11] - Adjusted net income decreased by 4% year-over-year to $13.4 million, and adjusted diluted EPS decreased by 3% year-over-year to $0.33[11] Segment Performance - Q3 2022 - Animal Health net sales increased by $14.2 million, or 11% year-over-year, to $148.6 million[15] - Mineral Nutrition net sales increased by $10.9 million, or 19% year-over-year, to $69.0 million[18] - Performance Products net sales increased by $2.8 million, or 15% year-over-year, to $22.0 million[18] Fiscal Year 2022 Guidance - The company raised full-year net sales guidance to $930-$950 million, projecting a 12-14% increase over the prior full year[9] - Adjusted EBITDA guidance was maintained at $110-$114 million[9]

Financial Performance and Key Metrics - Consolidated net sales for Q3 2022 were $239.6 million, reflecting a 13% increase year-over-year, driven by improvements across all business segments [21] - GAAP-based net income and diluted earnings per share increased by 45% and 47% respectively compared to the same quarter last year [21] - Adjusted net income and adjusted diluted earnings per share declined by 4% and 3% respectively due to increased employee-related and technology-related costs [24] Business Segment Performance - The Animal Health segment posted net sales of $148.6 million, an 11% increase year-over-year, with notable growth in MFAs, nutritional specialties, and vaccines [25] - Mineral Nutrition segment net sales were $69 million, a 19% increase year-over-year, driven by higher average selling prices of trace minerals [28] - Performance Products segment net sales were $22 million, reflecting a 15% improvement over the same quarter last year [30] Market Data and Key Metrics - Sales in Europe, Middle East, and Africa represented 13% of consolidated net sales, while Asia Pacific accounted for 7% [14] - The company has limited indirect sales to Russia, which has resulted in some lost sales in Q3 and going forward [37] Company Strategy and Industry Competition - The company plans to continue taking price increases to combat historic levels of inflation and improve profitability [15][17] - An acquisition in Brazil aims to replicate success in the U.S. ethanol industry, providing products and services for ethanol production and its co-products [9] Management's Comments on Operating Environment and Future Outlook - Management highlighted macroeconomic headwinds, including the Russian conflict and lingering COVID-19 impacts, which could adversely affect business [11] - Revised full-year sales guidance is set at $930 million to $950 million, reflecting a projected year-over-year increase of 12% to 14% [18][39] Other Important Information - The company plans to publish its inaugural Economic, Social, and Governance (ESG) report shortly [41] - Free cash flow for the 12-month period ending March 31, 2022, was $1 million, with total debt of $417 million resulting in a gross leverage ratio of 3.9 times [32] Q&A Session Summary Question: Sales growth of Rejensa and outlook for the year - Sales for Rejensa are expected to double in fiscal year '22 compared to fiscal year '21, with continued strong performance anticipated [44] Question: Effects on U.S. beef and dairy franchises - The drought in the U.S. is not directly affecting the company, but there may be indirect effects on sales to the beef industry in other markets [45]

[PART I—FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%E2%80%94FINANCIAL%20INFORMATION) This section provides the unaudited consolidated financial statements and management's discussion and analysis for Phibro Animal Health Corporation [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents Phibro Animal Health Corporation's unaudited consolidated financial statements, including statements of operations, balance sheets, and cash flows, for the specified periods [Consolidated Statements of Operations](index=3&type=section&id=Consolidated%20Statements%20of%20Operations) This section details the company's consolidated statements of operations, highlighting net sales, gross profit, operating income, net income, and diluted EPS Consolidated Statements of Operations Highlights (in thousands, except per share amounts) | Metric | Three Months Ended Mar 31, 2022 | Three Months Ended Mar 31, 2021 | Nine Months Ended Mar 31, 2022 | Nine Months Ended Mar 31, 2021 | | :--- | :--- | :--- | :--- | :--- | | **Net sales** | $239,619 | $211,729 | $686,996 | $613,072 | | **Gross profit** | $71,626 | $69,165 | $206,976 | $201,549 | | **Operating income** | $19,194 | $20,132 | $56,100 | $55,710 | | **Net income** | $17,689 | $12,161 | $41,688 | $37,264 | | **Diluted EPS** | $0.44 | $0.30 | $1.03 | $0.92 | [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) This section presents the company's consolidated balance sheets, detailing assets, liabilities, and stockholders' equity at specific periods Consolidated Balance Sheet Highlights (in thousands) | Metric | March 31, 2022 | June 30, 2021 | | :--- | :--- | :--- | | **Total current assets** | $546,477 | $498,909 | | **Total assets** | $916,181 | $841,325 | | **Total current liabilities** | $187,102 | $164,116 | | **Total liabilities** | $649,236 | $602,796 | | **Total stockholders' equity** | $266,945 | $238,529 | [Consolidated Statements of Cash Flows](index=6&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) This section outlines the company's consolidated cash flow activities, including operating, investing, and financing cash flows Consolidated Cash Flow Highlights (Nine Months Ended Mar 31, in thousands) | Metric | 2022 | 2021 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $30,075 | $45,236 | | **Net cash used by investing activities** | ($13,042) | ($11,390) | | **Net cash provided (used) by financing activities** | $3,954 | ($21,632) | | **Net increase in cash and cash equivalents** | $20,536 | $12,760 | [Notes to Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) This section provides detailed notes to the consolidated financial statements, including segment information, acquisitions, and contingencies - The company operates in three business segments: **Animal Health**, **Mineral Nutrition**, and **Performance Products**[33](index=33&type=chunk) Net Sales by Product Type (in thousands) | Product Type | Three Months 2022 | Three Months 2021 | Nine Months 2022 | Nine Months 2021 | | :--- | :--- | :--- | :--- | :--- | | **Animal Health** | $148,589 | $134,380 | $440,520 | $398,987 | | **Mineral Nutrition** | $69,033 | $58,153 | $190,120 | $163,750 | | **Performance Products** | $21,997 | $19,196 | $56,356 | $50,335 | | **Total** | **$239,619** | **$211,729** | **$686,996** | **$613,072** | Net Sales by Region (in thousands) | Region | Three Months 2022 | Three Months 2021 | Nine Months 2022 | Nine Months 2021 | | :--- | :--- | :--- | :--- | :--- | | **United States** | $146,820 | $129,370 | $412,284 | $370,446 | | **Latin America and Canada** | $45,048 | $37,386 | $135,722 | $115,808 | | **Europe, Middle East and Africa** | $29,931 | $27,802 | $90,889 | $84,959 | | **Asia Pacific** | $17,820 | $17,171 | $48,101 | $41,859 | | **Total** | **$239,619** | **$211,729** | **$686,996** | **$613,072** | - In February 2022, the company acquired a business for **$13.7 million** that develops processing aids for the ethanol fermentation industry, included in the MFAs and other product category under the Animal Health segment[43](index=43&type=chunk)[44](index=44&type=chunk) - The company is involved in an environmental investigation by the EPA regarding groundwater contamination at the Omega Chemical Corporation Superfund Site, with potential liability uncertain[57](index=57&type=chunk)[58](index=58&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=24&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management analyzes the company's financial condition and operational results, discussing sales growth, segment performance, and the impact of external factors like geopolitical events and regulatory reviews [Overview and Key Trends](index=24&type=section&id=Overview%20and%20Key%20Trends) This section provides an overview of key trends and external factors impacting the company, including geopolitical conflicts, regulatory reviews, and the ongoing pandemic - Sales to Russia and Ukraine represent approximately **1%** of annual consolidated net sales, and the company intends to continue providing medicines and vaccines to existing customers in Russia[84](index=84&type=chunk)[85](index=85&type=chunk) - The FDA is reviewing the safety of carbadox (Mecadox), and its potential withdrawal could adversely affect financial results[91](index=91&type=chunk)[93](index=93&type=chunk) - Sales of Mecadox totaled **$20 million** for the twelve months ended March 31, 2022[93](index=93&type=chunk) - The company continues to navigate the COVID-19 pandemic, maintaining operations and employee safety despite some cost increases from supply chain disruptions[87](index=87&type=chunk)[88](index=88&type=chunk)[89](index=89&type=chunk) [Results of Operations](index=27&type=section&id=Results%20of%20Operations) This section details the company's operational performance, including net sales, gross profit, operating income, and net income, with segment-level analysis Q3 FY2022 vs Q3 FY2021 Performance (in thousands) | Metric | Three Months Ended Mar 31, 2022 | Three Months Ended Mar 31, 2021 | Change $ | Change % | | :--- | :--- | :--- | :--- | :--- | | **Net Sales** | $239,619 | $211,729 | $27,890 | 13% | | **Gross Profit** | $71,626 | $69,165 | $2,461 | 4% | | **Operating Income** | $19,194 | $20,132 | ($938) | (5)% | | **Net Income** | $17,689 | $12,161 | $5,528 | 45% | - For the three months ended March 31, 2022, net sales increased **13%** year-over-year, driven by growth in Animal Health (**+11%**), Mineral Nutrition (**+19%**), and Performance Products (**+15%**)[99](index=99&type=chunk)[100](index=100&type=chunk)[101](index=101&type=chunk)[102](index=102&type=chunk) - For the nine months ended March 31, 2022, net sales increased **12%** year-over-year, driven by growth in Animal Health (**+10%**), Mineral Nutrition (**+16%**), and Performance Products (**+12%**)[112](index=112&type=chunk)[113](index=113&type=chunk)[114](index=114&type=chunk)[115](index=115&type=chunk) - Gross margin for Q3 FY2022 decreased to **29.9%** from **32.7%** in the prior year, primarily due to increased raw material and logistics costs[103](index=103&type=chunk)[104](index=104&type=chunk) - Adjusted EBITDA for Q3 FY2022 remained flat at **$28.0 million**, with an increase in Mineral Nutrition Adjusted EBITDA offset by a decrease in Animal Health Adjusted EBITDA[111](index=111&type=chunk) [Liquidity and Capital Resources](index=33&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's liquidity position, cash flow from operating, investing, and financing activities, and available capital resources - Net cash provided by operating activities for the nine months ended March 31, 2022, was **$30.1 million**, a decrease from **$45.2 million** in the prior year, primarily due to increased use of cash for inventory and receivables[125](index=125&type=chunk)[127](index=127&type=chunk) - Investing activities used **$13.0 million**, including **$25.2 million** for capital expenditures and **$10.8 million** for a business acquisition, partially offset by a **$20.9 million** net reduction in short-term investments[128](index=128&type=chunk) - As of March 31, 2022, the company held **$92.8 million** in cash, cash equivalents, and short-term investments, with **$123.3 million** available under its 2021 Revolver facility[131](index=131&type=chunk)[132](index=132&type=chunk) - The Board of Directors declared a quarterly cash dividend of **$0.12 per share**, payable on June 22, 2022[133](index=133&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=38&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company reports no material changes in market risk exposures, including interest rates and foreign currency, from prior disclosures, utilizing derivatives for hedging - There were no material changes in the Company's financial market risks related to interest rates and foreign currency exchange rates from the risks disclosed in the Annual Report[152](index=152&type=chunk) [Item 4. Controls and Procedures](index=38&type=section&id=Item%204.%20Controls%20and%20Procedures) Management confirms the effectiveness of disclosure controls and procedures, with no material changes to internal control over financial reporting during the quarter - Based on an evaluation as of March 31, 2022, the Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective[153](index=153&type=chunk) - There were no changes during the quarter ended March 31, 2022, that have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[154](index=154&type=chunk) [PART II—OTHER INFORMATION](index=39&type=section&id=PART%20II%E2%80%94OTHER%20INFORMATION) This section covers other required information, including legal proceedings, risk factors, and other miscellaneous disclosures [Item 1. Legal Proceedings](index=39&type=section&id=Item%201.%20Legal%20Proceedings) This section incorporates by reference information on legal proceedings from the commitments and contingencies notes in the financial statements - Refers to 'Notes to the Consolidated Financial Statements—Commitments and Contingencies' for information on legal proceedings[155](index=155&type=chunk) [Item 1A. Risk Factors](index=39&type=section&id=Item%201A.%20Risk%20Factors) The company reports no material changes to the risk factors previously disclosed in its Annual Report - There were no material changes in the Company's risk factors from the risks disclosed in the Annual Report[157](index=157&type=chunk) [Other Items (2, 3, 4, 5)](index=39&type=section&id=Other%20Items%20(2,%203,%204,%205)) This section confirms no unregistered sales of equity securities, no defaults on senior securities, and no other reportable information - Item 2 (Unregistered Sales of Equity Securities), Item 3 (Defaults Upon Senior Securities), and Item 5 (Other Information) are all reported as 'None'[158](index=158&type=chunk)[159](index=159&type=chunk)[161](index=161&type=chunk) - Item 4 (Mine Safety Disclosures) is reported as 'Not applicable'[160](index=160&type=chunk)