| Business Segments |
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 financial position. Corporate costs include certain costs related to executive management, information technology, legal, finance, human resources and business development. The accounting policies of our segments are the same as those described in the summary of significant accounting policies included in Note 2 — Summary of Significant Accounting Policies and New Accounting Standards included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2025. | | | | | | | | | | | | | | | Three Months | | Nine Months | For the Periods Ended March 31 | | 2026 | | 2025 | | 2026 | | 2025 | Net sales | | | | | | | | | | | | | Animal Health | | $ | 291,225 | | $ | 258,377 | | $ | 864,658 | | $ | 670,318 | Mineral Nutrition | | | 73,418 | | | 66,774 | | | 205,351 | | | 189,086 | Performance Products | | | 18,900 | | | 22,674 | | | 51,337 | | | 58,114 | Total segments | | $ | 383,543 | | $ | 347,825 | | $ | 1,121,346 | | $ | 917,518 |
| | | | | | | | | | | | | | | Three Months | | Nine Months | For the Periods Ended March 31 | | 2026 | | 2025 | | 2026 | | 2025 | Animal Health | | | | | | | | | | | | | Net sales | | $ | 291,225 | | $ | 258,377 | | $ | 864,658 | | $ | 670,318 | Cost of sales | | | 176,315 | | | 166,221 | | | 517,218 | | | 412,547 | Selling, general and administrative expenses(1) | | | 54,935 | | | 46,133 | | | 154,385 | | | 131,513 | Add: Depreciation and amortization | | | 11,128 | | | 11,369 | | | 34,310 | | | 29,318 | Add: Acquisition-related cost of goods sold(2) | | | — | | | 1,708 | | | 1,956 | | | 3,342 | Add: Phibro Forward income growth initiatives implementation costs - cost of goods sold (3) | | | — | | | 3,798 | | | — | | | 3,798 | Add: Phibro Forward income growth initiatives implementation costs - SG&A (3) | | | — | | | 1,771 | | | — | | | 1,771 | Subtract: Insurance proceeds(4) | | | — | | | (1,546) | | | (1,177) | | | (2,803) | Adjusted EBITDA | | | 71,103 | | | 63,123 | | | 228,144 | | | 161,684 | | | | | | | | | | | | | | Mineral Nutrition | | | | | | | | | | | | | Net sales | | | 73,418 | | | 66,774 | | | 205,351 | | | 189,086 | Cost of sales | | | 66,838 | | | 59,562 | | | 185,337 | | | 169,804 | Selling, general and administrative expenses(1) | | | 1,987 | | | 1,974 | | | 5,606 | | | 5,611 | Add: Depreciation and amortization | | | 548 | | | 524 | | | 1,623 | | | 1,555 | Adjusted EBITDA | | | 5,141 | | | 5,762 | | | 16,031 | | | 15,226 | | | | | | | | | | | | | | Performance Products | | | | | | | | | | | | | Net sales | | | 18,900 | | | 22,674 | | | 51,337 | | | 58,114 | Cost of sales | | | 14,693 | | | 17,491 | | | 40,657 | | | 45,258 | Selling, general and administrative expenses(1) | | | 2,237 | | | 2,124 | | | 6,743 | | | 6,245 | Add: Depreciation and amortization | | | 249 | | | 277 | | | 716 | | | 902 | Adjusted EBITDA | | | 2,219 | | | 3,336 | | | 4,653 | | | 7,513 | | | | | | | | | | | | | | Adjusted EBITDA – Total segments | | $ | 78,463 | | $ | 72,221 | | $ | 248,828 | | $ | 184,423 | Reconciliation of Adjusted EBITDA to income before income taxes: | | | | | | | | | | | | | Less: | | | | | | | | | | | | | Interest expense, net | | | 10,431 | | | 9,355 | | | 34,246 | | | 25,992 | Depreciation and amortization – Total segments | | | 11,925 | | | 12,170 | | | 36,649 | | | 31,775 | Depreciation and amortization – Corporate | | | 523 | | | 446 | | | 1,520 | | | 1,419 | Corporate costs | | | 17,662 | | | 17,335 | | | 58,105 | | | 50,706 | Acquisition-related cost of goods sold(2) | | | — | | | 1,708 | | | 1,956 | | | 3,342 | Acquisition-related transaction costs | | | 130 | | | 636 | | | 581 | | | 12,875 | Stock-based compensation expense - named executive officer awards granted in fiscal year 2024 | | | 179 | | | 179 | | | 538 | | | 538 | Phibro Forward income growth initiatives implementation costs - cost of goods sold (3) | | | — | | | 3,798 | | | — | | | 3,798 | Phibro Forward income growth initiatives implementation costs - SG&A(3) | | | 3,391 | | | 3,980 | | | 7,026 | | | 6,026 | Insurance proceeds(4) | | | — | | | (1,546) | | | (3,786) | | | (2,803) | Foreign currency losses (gains), net | | | 1,909 | | | (5,528) | | | 6,988 | | | 6,609 | Income before income taxes | | $ | 32,313 | | $ | 29,688 | | $ | 105,005 | | $ | 44,146 |
| (1) | Selling, general and administrative expenses primarily include compensation-related expenses for employees not directly involved in the production and sale of inventory, rent expenses, research and development costs, marketing expenses, and other general and administrative expenses. |
| (2) | Represents cost of goods sold related to the stepped-up value of inventory obtained in acquisitions. |
| (3) | Phibro Forward is a company-wide initiative focused on unlocking additional areas of revenue growth and cost savings. For the three and nine months ended March 31, 2026, this includes $3.4 million and $7.0 million, respectively, recorded within selling, general and administrative expenses primarily for consultancy costs related to the initiative. For the three and nine months ended March 31, 2025, this includes $5.3 million for non-cash asset write-offs, of which $3.8 million was recorded within cost of goods sold, and $1.5 million was recorded within selling, general and administrative expenses, related to the closure of an immaterial business within the Animal Health segment. |
| (4) | Represents insurance settlement gains, which are recorded within selling, general and administrative expenses. |
The geographic location of property, plant and equipment, net and ROU operating lease assets was: | | | | | | | | | March 31, | | June 30, | As of | | 2026 | | 2025 | Property, plant and equipment, net and ROU operating lease assets | | | | | | | United States | | $ | 234,496 | | $ | 239,874 | Israel | | | 84,533 | | | 74,403 | Brazil | | | 38,790 | | | 34,504 | Ireland | | | 28,551 | | | 25,141 | Other | | | 22,138 | | | 22,107 | | | $ | 408,508 | | $ | 396,029 |
Asset information is not provided for reportable segments in the information regularly provided to the CODM. Accordingly, such information is not disclosed in this footnote.
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