| Business Segments |
16. 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 goods sold 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. For all segments, the CODM uses segment Adjusted EBITDA in the annual budgeting and quarterly forecasting process and considers budget-to-actual and current period to prior period variances to evaluate performance and allocated resources for each segment. | | | | | | | | | | | | | | | | | | | | For the Year Ended June 30 | | 2026 | | 2025 | | 2024 | Net sales | | | | | | | | | | Animal Health | | $ | 1,162,219 | | $ | 962,796 | | $ | 706,482 | Mineral Nutrition | | | 282,341 | | | 253,240 | | | 243,663 | Performance Products | | | 73,533 | | | 80,179 | | | 67,534 | Total segments | | $ | 1,518,093 | | $ | 1,296,215 | | $ | 1,017,679 |
| | | | | | | | | | | For the Year Ended June 30 | | | 2026 | | 2025 | | 2024 | Animal Health | | | | | | | | | | | Net sales | | | $ | 1,162,219 | | $ | 962,796 | | $ | 706,482 | Cost of goods sold | | | | 692,528 | | | 607,069 | | | 428,683 | Selling, general and administrative expenses (1) | | | | 213,383 | | | 182,310 | | | 162,009 | Add: Depreciation and amortization | | | | 46,268 | | | 40,475 | | | 30,194 | Add: Acquisition-related cost of goods sold (2) | | | | 1,956 | | | 5,679 | | | 521 | Add: Phibro Forward income growth initiatives implementation costs - cost of goods sold (3) | | | | — | | | 3,798 | | | — | Add: Phibro Forward income growth initiatives implementation costs - SG&A (3) | | | | — | | | 1,771 | | | — | Subtract: Insurance proceeds (4) | | | | (954) | | | (2,880) | | | (899) | Adjusted EBITDA | | | | 303,578 | | | 222,260 | | | 145,606 | Mineral Nutrition | | | | | | | | | | | Net sales | | | | 282,341 | | | 253,240 | | | 243,663 | Cost of goods sold | | | | 255,664 | | | 226,864 | | | 222,363 | Selling, general and administrative expenses (1) | | | | 7,221 | | | 7,642 | | | 7,278 | Add: Depreciation and amortization | | | | 2,214 | | | 2,102 | | | 2,427 | Adjusted EBITDA | | | | 21,670 | | | 20,836 | | | 16,449 | Performance Products | | | | | | | | | | | Net sales | | | | 73,533 | | | 80,179 | | | 67,534 | Cost of goods sold | | | | 57,382 | | | 62,364 | | | 53,519 | Selling, general and administrative expenses (1) | | | | 9,056 | | | 8,405 | | | 8,041 | Add: Depreciation and amortization | | | | 966 | | | 1,137 | | | 1,688 | Adjusted EBITDA | | | | 8,061 | | | 10,547 | | | 7,662 | Adjusted EBITDA – Total segments | | | $ | 333,309 | | $ | 253,643 | | $ | 169,717 | Reconciliation of Adjusted EBITDA to income before income taxes: | | | | | | | | | | | Less: | | | | | | | | | | | Interest expense, net | | | | 44,429 | | | 34,602 | | | 18,536 | Depreciation and amortization – Total segments | | | | 49,448 | | | 43,714 | | | 34,309 | Depreciation and amortization – Corporate | | | | 2,066 | | | 1,891 | | | 1,869 | Corporate costs | | | | 78,338 | | | 69,959 | | | 58,480 | Acquisition-related cost of goods sold | | | | 1,956 | | | 5,679 | | | 521 | Acquisition-related transaction costs | | | | 1,305 | | | 13,322 | | | 6,405 | Pension settlement cost | | | | — | | | — | | | 10,674 | Brazil employment taxes | | | | — | | | — | | | 4,202 | Stock-based compensation - named executive officer awards granted in fiscal year 2024 | | | | 717 | | | 717 | | | 475 | Phibro Forward income growth initiatives implementation costs - cost of goods sold (3) | | | | — | | | 3,798 | | | — | Phibro Forward income growth initiatives implementation costs - SG&A (3) | | | | 8,646 | | | 6,978 | | | 366 | Insurance proceeds (4) | | | | (3,563) | | | (2,880) | | | (899) | Foreign currency losses, net | | | | 12,621 | | | 7,870 | | | 23,863 | Income before income taxes | | | $ | 137,346 | | $ | 67,993 | | $ | 10,916 |
| (1) | Selling, general, and administrative expenses primarily include compensation-related expenses for employees not directly involved in the production and sale of inventory, rent expense, 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 year ended June 30, 2026, this includes $8.6 million recorded within selling, general and administrative expenses primarily for consultancy costs related to the initiative. For the year ended June 30, 2025, this included charges of $5.6 million related to the closure of an immaterial business within the Animal Health segment, of which $5.3 million was related to non-cash asset write-offs. $3.8 million of the non-cash asset write-offs was recorded within cost of goods sold and $1.5 million was recorded within selling, general, and administrative expenses. For the year ended June 30, 2025, charges related to Phibro Forward also include $5.2 million for consulting and other costs recorded within selling, general, and administrative expenses. For the year ended June 30, 2024, this included $0.4 million for Corporate consulting costs recorded within selling, general, and administrative expenses. |
| (4) | Represents insurance settlement gains. |
The geographic location of property, plant and equipment, net and operating lease ROU assets was: | | | | | | | As of June 30 | | 2026 | | 2025 | Property, plant and equipment, net and operating lease ROU assets | | | | | | | United States | | $ | 234,523 | | $ | 239,874 | Israel | | | 88,871 | | | 74,403 | Brazil | | | 44,051 | | | 34,504 | Ireland | | | 30,825 | | | 25,141 | Other | | | 22,478 | | | 22,107 | | | $ | 420,748 | | $ | 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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