Phibro Animal Health Corporation Q1 FY2026 earnings call

• In the first quarter, Animal Health sales grew 55% and adjusted EBITDA 85%, with Medicated Feed Additives leading growth. Legacy Animal Health business also outperformed. - Emerging research on GLP-1 users choosing high-quality animal-derived proteins supports industry growth. - Phibro Forward initiatives enhance operational discipline, innovation, and strategic growth. - Q1 consolidated net sales were $363.9 million, an increase of $103.5 million or 40% over the prior year. - Generated $34 million of positive free cash flow in the 12 months ended September 30, 2025, with operating cash flow $77 million and capital expenditures $43 million.

The Animal Health segment had net sales of $283.5 million for the quarter, representing a 55% increase. Medicated Feed Additives led with an 81% growth, supported by solid gains in nutritional specialties and vaccines. Legacy Animal Health business saw an 11% overall growth, with 6% growth in legacy MFA and other products. Mineral Nutrition had net sales of $63 million, a 7% increase due to higher demand for copper and trace minerals. Performance Products had net sales of $17.4 million, a 7% decrease as a result of lower demand for ingredients used in personal care products. Animal Health adjusted EBITDA was $74.9 million, an 85% increase, while Mineral Nutrition and Performance Products adjusted EBITDA were $4.5 million and $1.6 million respectively.

• Net sales for fiscal year 2026 are expected to be $1.425 billion to $1.475 billion, representing a growth range of 10% to 14% with a midpoint of approximately 12%. - Total adjusted EBITDA is expected to increase from $225 million to $235 million to $230 million to $240 million, a growth range of 25% to 30% with a midpoint of approximately 28%. - Adjusted net income is expected to increase from $103 million to $110 million to $108 million to $115 million, a growth of 26% to 34% with a midpoint of approximately 31%.

Remarks include forward-looking statements where actual results could differ materially. Factors causing results to differ are referred to the forward-looking statements section in the earnings press release.

Q: Erin Wright asked about the sustainability of growth in the MFA business, price vs volume, and margin profile.

A: Larry Miller said they see continued growth in MFA with strong demand, and Glenn David noted limited price impact in Q1 and margin favorability from mix and expense timing.

Q: Ekaterina Knyazkova inquired about revenue guidance and dental assets.

A: Glenn David said they didn't update revenue guidance yet, and Donny Bendheim discussed dental assets like Restoris and a licensed product for periodontal disease.

Q: Michael Ryskin asked about end markets.

A: Larry Miller talked about protein demand drivers, livestock sector profitability, and Phibro's positioning in key livestock markets.

Q: Navann Ty Dietschi asked about legacy business growth and BD strategy.

A: Glenn David said legacy portfolio had strong growth with no material nonrecurring items, and Donny Bendheim discussed focus on companion animal and BD targeting innovation areas not targeted by big 4 players.