Introduction Our management’s discussion and analysis of financial condition and results of operations (“MD&A”) is provided to assist readers in understanding our performance, as reflected in the results of our operations, our financial condition and our cash flows. The following discussion summarizes the significant factors affecting our consolidated operating results, financial condition, liquidity and cash flows as of and for the periods presented. This MD&A should be read in conjunction with our consolidated financial statements and related notes thereto included under the section entitled “Financial Statements and Supplementary Data.” Our future results could differ materially from our historical performance as a result of various factors such as those discussed in “Risk Factors” and “Forward-Looking Statements and Risk Factors Summary.” Overview of our business Phibro Animal Health Corporation is a leading global diversified animal health and mineral nutrition company. We develop, manufacture and market a broad range of products for food animals including poultry, beef and dairy cattle, swine, aquaculture and dogs. Our products help prevent, control and treat diseases, and support nutrition to help improve animal health and well-being. In addition to animal health and mineral nutrition products, we manufacture and market specific ingredients for use in the personal care, industrial chemical and chemical catalyst industries. We market approximately 790 product lines in approximately 90 countries to approximately 4,800 customers. Acquisition In April 2024, the Company entered into a Purchase and Sale Agreement (the “Purchase Agreement”) with Zoetis Inc., a Delaware corporation (“Zoetis”) to acquire Zoetis’s medicated feed additive (“MFA”) portfolio, certain water-soluble products and related assets (the “Acquisition”). On October 31, 2024, the Company completed the Acquisition at a purchase price of approximately $297.5 million ($286.5 million, as adjusted, net of cash acquired), subject to certain further adjustments set forth in the Purchase Agreement. The Acquisition was funded by term loan borrowings under the 2024 Credit Agreement. The product portfolio acquired, which generated $407.6 million in revenue in 2023, is comprised of more than 37 product lines that are sold in approximately 80 countries. For the years ended June 30, 2026 and 2025, this product portfolio contributed $358.2 million and $208.2 million to our overall net sales, respectively. Also included in the Acquisition are six manufacturing sites, comprised of four in the U.S., one in Italy and one in China. The results of operations of the Acquisition are included in our consolidated statements of operations from the date of acquisition and reported within the Animal Health segment. 2024 Credit Agreement In July 2024, we entered into a Credit Agreement (the “2024 Credit Agreement”) with a group of lenders. Initial borrowings were used to refinance all our outstanding debt, to pay fees and expenses of the transaction, and for ongoing working capital requirements and general corporate purposes. Borrowings under the Delayed Draw Term A-1 and A-2 Loans were used to finance the purchase price of the Acquisition. See “Notes to Consolidated Financial Statements — Debt — 2024 Credit Agreement” for additional information. On April 28, 2026, the 2024 Credit Agreement was amended (the “Amended 2024 Credit Agreement”) to increase our borrowing capacity by expanding the Revolving Credit Commitments by $125.0 million, from $310.0 million to an aggregate commitment of $435.0 million (the “Amended Revolving Credit Commitments”). The expanded borrowing capacity provides the Company with enhanced operating flexibility. Fees of $0.6 million were incurred to execute this amendment and will be amortized to interest expense through the maturity date of the Amended Revolving Credit Commitments. ​ ​ 66 Table of Contents Armed Conflicts Middle East Conflicts Since October 2023, Israel has been engaged in ongoing hostilities along its northern and southern borders, and tensions in the broader Middle East, including with Iran, remain elevated. The situation in the region is volatile, unpredictable, and subject to rapid escalation. We have three manufacturing sites in Israel. A manufacturing plant in Neot Hovav that produces active pharmaceutical ingredients for certain of our anticoccidial and antimicrobial products, a facility in Beit Shemesh that produces vaccines and a plant in Petah Tikvah that manufactures premix products and nutritional products. In addition, we have an office location near Tel Aviv in Airport City. As of June 30, 2026, we had approximately 525 employees located in Israel. We have confidence in our ability to meet our supply commitment to customers and maintain sufficient inventory to continue regional support. Our operations in Israel have navigated numerous challenging situations over the years. The continuation and/or escalation of conflicts in the region may trigger additional bans, economic and other sanctions, as well as broader military actions, which could include neighboring nations and their respective allies. The potential impact of the current conflicts, or escalation thereof, on our business is unclear but may include, without limitation, the possible disruption of our operations, particularly at our facilities in Israel, supply chain and logistics disruptions, personnel and raw material shortages, and other consequences, including as a result of the actions of, or disruption of the operations of, certain regulatory and governmental authorities and of certain of our suppliers, collaborative partners, licensees, manufacturing sites, distributors and customers. Our Israeli manufacturing facilities and local operations account for 18% of our consolidated assets as of June 30, 2026, and 16% of our consolidated net sales for the twelve months ended June 30, 2026. Russia and Ukraine In response to the armed conflict between Russia and Ukraine that began in February 2022, we and our employees have provided support to Ukraine in the form of monetary donations, free products and humanitarian services. Our limited intent for the Russian market is to continue to provide medicines and vaccines, and related regulatory and technical support, to help existing customers combat disease challenges in the production of food animals on their farms. We have no production or direct distribution operations and no planned investments in Russia. Since the conflict began, the United States and other North Atlantic Treaty Organization (“NATO”) member states, as well as non-member states, announced targeted economic sanctions on Russia, including certain Russian citizens and enterprises. The continuation or escalation of the conflict may trigger additional economic and other sanctions, as well as broader military conflict. The potential impacts of any resulting bans, sanctions, boycotts or broader military conflicts on our business are uncertain. The potential impacts could include supply chain and logistics disruptions, macroeconomic impacts resulting from the exclusion of Russian financial institutions from the global banking system, volatility in foreign exchange rates and interest rates, inflationary pressures on raw materials and energy as well as heightened cybersecurity threats. Our sales to Russia and Ukraine for the twelve months ended June 30, 2026 represented less than 1% of consolidated net sales. We cannot know if the conflict could escalate and result in broader economic and security concerns that could adversely affect our business, financial condition, or results of operations. Industry growth We believe global population growth and the expansion of the global middle class will continue to drive increased global consumption and demand for animal-based proteins. The role of animal health products in treating and controlling diseases in livestock is critical to helping produce wholesome, safe and affordable proteins; therefore we believe the demand for PAHC’s animal health products will continue to be strong in the future. ​ 67 Table of Contents Regulatory developments Our business depends heavily on a healthy and growing livestock industry. Some in the public perceive risks to human health related to the consumption of food derived from animals that utilize certain of our products, including certain of our MFA products. In particular, there is increased focus, in the United States and other countries, on the use of medically important antimicrobials. As defined by the FDA, medically important antimicrobials (“MIAs”) include classes that are prescribed in animal and human health and are listed in the Appendix of the FDA-CVM Guidance for Industry (GFI) 152. Our products that contain virginiamycin, oxytetracycline, neomycin, streptomycin, tiamulin, chlortetracycline, or sulfamethazine are classified by the FDA as medically important antimicrobials. In addition to the United States, the World Health Organization (WHO), the E.U., Australia and Canada have promulgated rating lists for antimicrobials that are used in veterinary medicine and that include certain of our products. The classification of our products as MIAs or similar listings may lead to a decline in the demand for and production of food products derived from animals that utilize our products and, in turn, demand for our products. Livestock producers may experience decreased demand for their products or reputational harm as a result of evolving consumer views of nutrition and health-related concerns, animal rights and other concerns. Any reputational harm to the livestock industry may also extend to companies in related industries, including us. In addition, campaigns by interest groups, activists and others with respect to perceived risks associated with the use of our products in animals, including position statements by livestock producers and their customers based on non-use of certain medicated products in livestock production, whether or not scientifically-supported, could affect public perceptions and reduce the use of our products. Those adverse consumer views related to the use of one or more of our products in animals could have a material adverse effect on our financial condition and results of operations. In April 2016, the FDA began initial steps to withdraw approval of carbadox (the active ingredient in our Mecadox product) via a regulatory process known as a Notice of Opportunity for Hearing (“NOOH”), due to concerns that certain residues from the product may persist in animal tissues for longer than previously determined. In the years following, Phibro has continued an ongoing process of responding collaboratively and transparently to the FDA’s CVM inquiries and has provided extensive and meticulous research and data that confirmed the safety of carbadox. In July 2020, the FDA announced it would not proceed to a hearing on the scientific concerns raised in the 2016 NOOH, consistent with the normal regulatory procedure, but instead announced that it was withdrawing the 2016 NOOH and issuing a proposed order to review the regulatory method for carbadox. Phibro reiterated the safety of carbadox and the appropriateness of the regulatory method and offered to work with the CVM to generate additional data to support the existing regulatory method or select a suitable alternative regulatory method. In March 2022, the FDA held a Part 15 virtual public hearing seeking data and information related to the safety of carbadox in which Phibro participated and again detailed the research and data that confirm the safety of carbadox. In November 2023, the FDA issued a final order to revoke the approved method for detecting carbadox residues. The FDA also provided notice in the Federal Register proposing to withdraw approval of all NADAs providing for use of carbadox in medicated swine feed and announcing an opportunity for Phibro to request a hearing on this proposal. This second action is based on CVM’s determination that there is no approved regulatory method to detect carbadox residues in the edible tissues of the treated swine. Phibro is continuing to defend swine producers’ ability to use Mecadox. We have requested a full evidentiary hearing on the merits before an administrative law judge. In January 2024, Phibro filed a lawsuit in the D.C. Federal District Court asking the court to invalidate the order which revoked the regulatory method for carbadox. Should we be unable to successfully defend the safety of the product, the loss of carbadox sales will have an adverse effect on our financial condition and results of operations. Sales of Mecadox (carbadox) for the year ended June 30, 2026 were approximately $21 million. As of the date of this Annual Report on Form 10-K, Mecadox continues to be available for use by swine producers. ​ 68 Table of Contents In 2018, the Ministry of Agriculture in Brazil (“MAPA”) published an ordinance to ban the use of antimicrobials used at sub-therapeutic levels for growth promotion and feed efficiency in animal feed in response to international pressure and scientific concerns about the potential risks of antimicrobial resistance. The Company’s virginiamycin product is currently registered and used for growth promotion in cattle, broilers, layers and swine in Brazil. The Company and key stakeholders (trade associations) requested that MAPA allow sponsors time to shift from growth promotion claims to therapeutic claims. In 2022 and more recently in 2025, additional MAPA public consultations were held to discuss the prohibition on the use of antimicrobials as growth promoters. These discussions affect the Company’s virginiamycin product in Brazil, which is the only remaining key livestock production market where virginiamycin does not yet have therapeutic indications. On April 27, 2026, MAPA published an ordinance prohibiting the importation, manufacture, and marketing of antimicrobial feed additives classified as important in human or veterinary medicine, including virginiamycin and bacitracin, for performance enhancement. There will be a transition period of 180 days from the date of the ordinance, during which time companies and customers may continue to use and sell the products under their current labels. The Company has been actively conducting studies to address MAPA’s requirements to obtain therapeutic indications for virginiamycin. These registrations are in the final stages of review and approval by MAPA. Phibro’s bacitracin product already carries therapeutic claims in Brazil. Sales of virginiamycin in Brazil were approximately $27 million for the year ended June 30, 2026. (See also “Business —  Compliance with Government Regulation  — United States — Carbadox”; and “Business — Compliance with Government Regulation — Global Policy and Guidance.”) Our global sales of antibacterials, anticoccidials and other products were $811 million, $646 million and $421 million for the years ended June 30, 2026, 2025 and 2024, respectively. Macroeconomic developments Macroeconomic developments, such as adverse economic conditions worldwide, international conflicts, or efforts of governments to stimulate or stabilize the economy or manage trade disputes, may adversely impact our business. For example, the Trump administration has instituted or proposed changes in trade policies that include the renegotiation or termination of existing trade agreements, the imposition of higher tariffs on imports into the United States, and other government regulations affecting trade between the United States and other countries. These measures could introduce supply chain inefficiencies, challenge current trade agreements with certain nations, and affect the cost and availability of materials critical to our products. Any such tariffs, if and when enacted, and any further legislation or actions taken by the U.S. federal government that restrict trade, such as additional tariffs, trade barriers, and other protectionist or retaliatory measures could adversely impact our ability to sell products and services in our markets. Countries may, in response to any U.S. actions, adopt retaliatory or other protectionist measures that could further limit our ability to offer our products and services. The ultimate impact of any tariffs will depend on various factors, including if any tariffs are ultimately implemented, the timing of implementation, and the amount, scope, and nature of the tariffs. In February 2026, the Supreme Court of the United States (“Supreme Court”) ruled that tariffs previously imposed under the International Emergency Economic Powers Act (“IEEPA”) from February 4, 2025 to February 24, 2026 were not authorized. In response to this ruling, we are pursuing the potential recovery of IEEPA tariffs previously paid. As of June 30, 2026, we have confirmed acceptance of claims submitted to the Consolidated Administration and Processing of Entries (“CAPE”) portal administered by U.S. Customs and Border Protection (“CBP”) for the refund of approximately $11.7 million in tariffs previously paid by the Company. See “Notes to Consolidated Financial Statements — Commitments and Contingencies — United States Tariffs” for additional information regarding the financial statement impacts of our IEEPA tariff recovery efforts as of and for the year ended June 30, 2026. Competition The animal health industry is highly competitive. We believe many of our competitors are conducting R&D activities in areas served by our products and in areas in which we are developing products. Our competitors include stand-alone animal health businesses and the animal health businesses of large pharmaceutical companies. In addition to competition from established participants, there could be new entrants to the animal health medicines and vaccines industry in the future. Principal methods of competition vary depending on the region, species, product category or individual products, including reliability, reputation, quality, price, service and promotion to veterinary professionals and livestock producers. 69 Table of Contents Foreign exchange We conduct operations in many areas of the world, involving transactions denominated in a variety of currencies. For the year ended June 30, 2026, we generated approximately 42% of our net sales from operations outside the United States. Although a portion of our revenues are denominated in various currencies, the selling prices of the majority of our sales outside the United States are referenced in U.S. dollars, and as a result, our revenues have not been significantly affected by currency movements. We are subject to currency risk to the extent that our costs are denominated in currencies other than those in which we earn revenues. We manufacture some of our major products in Brazil and Israel and production costs are largely denominated in local currencies, while the selling prices of the products are largely set in U.S. dollars. As such, we are exposed to changes in cost of goods sold resulting from currency movements and may not be able to adjust our selling prices to offset such movements. In addition, we incur selling and administrative expenses in various currencies and are exposed to changes in such expenses resulting from currency movements. For the year ended June 30, 2026, our expenses were significantly affected by currency movements. Because we have transactions denominated in various currencies, changes in currency exchange rates have had, and will continue to have, an impact on our results of operations. Climate Adverse weather events and natural disasters may interfere with and negatively impact operations at our manufacturing sites, research and development facilities and offices, which could have a material adverse effect on our financial condition and results of operations, especially if the impact of an event or disaster is frequent or prolonged. Our operations, and the activities of our customers, could be disrupted by climate change. The physical changes caused by climate change may prompt changes in regulations or consumer preferences which in turn could have negative consequences for our and our customers’ businesses. Climate change may negatively impact our customers’ operations, particularly those in the livestock industry, through climate-related impacts such as increased air and water temperatures, rising water levels and increased incidence of disease in livestock. Potential physical risks from climate change may include altered distribution and intensity of rainfall, prolonged droughts or flooding, increased frequency of wildfires and other natural disasters, rising sea levels and a rising heat index, any of which could cause negative impacts to our and our customers’ businesses. If such events affect our customers’ businesses, they may purchase fewer of our products, and our revenues may be negatively impacted. Climate driven changes could have a material adverse effect on our financial condition and results of operations. There has been a broad range of proposed and promulgated state, national and international regulations aimed at reducing the effects of climate change. Such regulations could result in additional costs to maintain compliance and additional income or other taxes. Climate change regulations continue to evolve, and it is not possible to accurately estimate potential future compliance costs. Product development initiatives Our future success depends on both the continued strength of our existing product portfolio and the advancement of our innovation pipeline. We are actively pursuing additional regulatory approvals for expanded claims, new species indications, and market access for our current products. These efforts also include cross-clearances that enable the concurrent use of our medicated products with other therapies. We maintain a robust pipeline of new products, developed through internal research and development (“R&D”), strategic joint ventures, and targeted licensing or acquisition opportunities. A significant portion of our R&D investment is directed toward product lifecycle management, which includes expanding indications, reformulating existing products, and developing new combinations to meet evolving customer needs and regulatory requirements. We are also investing in next-generation vaccine technologies and microbial solutions that address animal health, nutrition, and sustainability challenges across diverse sectors—including environmental, industrial, and agricultural applications. ​ 70 Table of Contents Strategic Initiatives in Progress Our current strategic initiatives include several projects: ● We continue to scale operations at our vaccine production facility in Sligo, Ireland, which began commercial poultry vaccine production in 2022. This increases total production capacity and dual-sourcing options for our key live vaccine products. ​ ● In fiscal year 2024, we expanded our U.S. autogenous vaccine and adjuvant production capacity in Omaha, Nebraska and in 2023, we launched a new vaccine facility in Guarulhos, Brazil, focused on autogenous vaccines for swine, poultry, and aquaculture. ​ ● Our microbial and bioproduct development programs are advancing, with applications spanning animal health, environmental resilience, and industrial performance. ​ ● In the companion animal space, in October 2025, we launched Restoris®, a new canine dental device, and in fiscal year 2026, our Rejensa® joint care supplement continued to gain market traction. ​ We remain committed to advancing innovation through both internal capabilities and external collaborations, ensuring that our product development strategy supports long-term growth and customer value. MFA Site Closure In August 2026, management decided to close the Company’s Chicago Heights manufacturing facility as part of a strategic consolidation of our plant network. Production shutdown is expected in the summer of 2027. The manufacturing of products made at this facility will be relocated to our other manufacturing facilities as well as third party contract manufacturers. We are currently evaluating the impact of the closure and cannot reasonably estimate all financial impacts at this time. ​ ​ ​ 71 Table of Contents Analysis of the consolidated statements of operations Summary Results of Operations ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Change For the Year Ended June 30 ​ 2026 ​ ​ 2025 ​ ​ 2024 ​ ​ 2026 / 2025 ​ ​ 2025/ 2024 ​ ​ ​ (in thousands, except per share amounts and percentages) Net sales ​ $ 1,518,093 ​ ​ ​ $ 1,296,215 ​ ​ ​ $ 1,017,679 ​ ​ ​ $ 221,878 ​ ​ ​ ​ 17 % $ 278,536 ​ ​ ​ 27 % Gross profit ​ 512,515 ​ 399,942 ​ 313,092 ​ 112,573 ​ 28 % 86,850 28 % Selling, general and administrative expenses ​ 318,119 ​ 289,477 ​ 259,777 ​ 28,642 ​ 10 % 29,700 11 % Operating income ​ 194,396 ​ 110,465 ​ 53,315 ​ 83,931 ​ 76 % 57,150 * ​ Interest expense, net ​ 44,429 ​ 34,602 ​ 18,536 ​ 9,827 ​ 28 % 16,066 87 % Foreign currency losses, net ​ 12,621 ​ 7,870 ​ 23,863 ​ 4,751 ​ 60 % (15,993) (67) % Income before income taxes ​ 137,346 ​ 67,993 ​ 10,916 ​ 69,353 ​ * ​ 57,077 * ​ Provision for income taxes ​ 37,626 ​ 19,729 ​ 8,500 ​ 17,897 ​ 91 % 11,229 * ​ Net income ​ $ 99,720 ​ $ 48,264 ​ $ 2,416 ​ $ 51,456 ​ * ​ $ 45,848 * ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income per share ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic ​ $ 2.46 ​ $ 1.19 ​ $ 0.06 ​ $ 1.27 ​ ​ ​ ​ $ 1.13 ​ ​ Diluted ​ $ 2.43 ​ $ 1.19 ​ $ 0.06 ​ $ 1.24 ​ ​ ​ ​ $ 1.13 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average number of shares outstanding ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic 40,546 ​ 40,515 ​ 40,504 ​ ​ ​ ​ ​ ​ ​ ​ Diluted ​ ​ 40,964 ​ ​ 40,678 ​ ​ 40,523 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ratio to net sales ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross profit 33.8 % 30.9 % 30.8 % ​ ​ ​ ​ ​ ​ ​ Selling, general and administrative expenses 21.0 % 22.3 % 25.5 % ​ ​ ​ ​ ​ ​ ​ Operating income 12.8 % 8.5 % 5.2 % ​ ​ ​ ​ ​ ​ ​ Income before income taxes 9.0 % 5.2 % 1.1 % ​ ​ ​ ​ ​ ​ ​ Net income 6.6 % 3.7 % 0.2 % ​ ​ ​ ​ ​ ​ ​ Effective tax rate 27.4 % 29.0 % 77.9 % ​ ​ ​ ​ ​ ​ ​ Certain amounts and percentages may reflect rounding adjustments. * Calculation not meaningful Changes in net sales from period to period primarily result from changes in volumes and average selling prices. Although a portion of our net sales is denominated in various currencies, the selling prices of the majority of our sales outside the United States are referenced in U.S. dollars, and as a result, currency movements have not significantly affected our revenues. Our effective income tax rate has varied from period to period and from the federal statutory rate, due to the mix of taxable profits in various jurisdictions; changes in tax rates from period to period, including changes in income tax legislation in the United States and various international jurisdictions; and the effects of changes in uncertain tax positions and valuation allowances. Our future effective income tax rate will vary due to the relative amounts of taxable income in various jurisdictions, future changes in tax rates and legislation and other factors. We intend to reinvest indefinitely all undistributed earnings of our foreign subsidiaries where we could be subject to applicable non-U.S. withholding and related taxes if amounts are repatriated to the U.S. We expect to repatriate approximately $5.0 million 72 Table of Contents of international earnings, which will be subject to applicable non-U.S. withholding and related taxes, net of reductions in U.S. income taxes. See “Notes to Consolidated Financial Statements — Income Taxes” for additional information. Net sales, Adjusted EBITDA and reconciliation of GAAP net income to Adjusted EBITDA We report Net sales and Adjusted EBITDA by segment to understand the operating performance of each segment. This enables us to monitor changes in net sales, costs and other actionable operating metrics at the segment level. See “— General description of non-GAAP financial measures” for descriptions of EBITDA and Adjusted EBITDA. 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. Segment net sales and Adjusted EBITDA: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Change For the Year Ended June 30 ​ ​ ​ 2026 ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ 2026 / 2025 ​ ​ ​ 2025 / 2024 Net sales ​ (in thousands, except percentages) MFAs and other ​ $ 810,728 ​ $ 646,354 ​ $ 420,959 ​ $ 164,374 25 % $ 225,395 54 % Nutritional specialties ​ 195,072 ​ 179,289 ​ 164,671 ​ 15,783 9 % 14,618 9 % Vaccines ​ 156,419 ​ 137,153 ​ 120,852 ​ 19,266 14 % 16,301 13 % Animal Health ​ 1,162,219 ​ 962,796 ​ 706,482 ​ 199,423 21 % 256,314 36 % Mineral Nutrition ​ 282,341 ​ 253,240 ​ 243,663 ​ 29,101 11 % 9,577 4 % Performance Products ​ 73,533 ​ 80,179 ​ 67,534 ​ (6,646) (8) % 12,645 19 % Total ​ $ 1,518,093 ​ $ 1,296,215 ​ $ 1,017,679 ​ $ 221,878 17 % $ 278,536 27 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Adjusted EBITDA ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Animal Health ​ $ 303,578 ​ $ 222,260 ​ $ 145,606 ​ $ 81,318 37 % $ 76,654 53 % Mineral Nutrition ​ 21,670 ​ 20,836 ​ 16,449 ​ 834 4 % 4,387 27 % Performance Products ​ 8,061 ​ 10,547 ​ 7,662 ​ (2,486) (24) % 2,885 38 % Corporate ​ (78,338) ​ (69,959) ​ (58,480) ​ (8,379) 12 % (11,479) 20 % Total ​ $ 254,971 ​ $ 183,684 ​ $ 111,237 ​ $ 71,287 39 % $ 72,447 65 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Adjusted EBITDA as a percentage of segment net sales ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Animal Health ​ 26.1 % 23.1 % 20.6 % ​ ​ ​ ​ ​ ​ Mineral Nutrition ​ 7.7 % 8.2 % 6.8 % ​ ​ ​ ​ ​ ​ Performance Products ​ 11.0 % 13.2 % 11.3 % ​ ​ ​ ​ ​ ​ Corporate(1) ​ (5.2) % (5.4) % (5.7) % ​ ​ ​ ​ ​ ​ Total(1) ​ 16.8 % 14.2 % 10.9 % ​ ​ ​ ​ ​ ​ (1) Reflects ratio to total net sales. Certain amounts and percentages may reflect rounding adjustments. * Calculation not meaningful 73 Table of Contents A reconciliation of net income, as reported under GAAP, to Adjusted EBITDA: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Change For the Year Ended June 30 ​ ​ ​ 2026 ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ 2026/ 2025 ​ ​ ​ 2025/ 2024 ​ ​ (in thousands, except percentages) Net income ​ $ 99,720 ​ $ 48,264 ​ $ 2,416 ​ $ 51,456 * ​ $ 45,848 * ​ Interest expense, net ​ 44,429 ​ 34,602 ​ 18,536 ​ 9,827 28 % 16,066 87 % Provision for income taxes ​ 37,626 ​ 19,729 ​ 8,500 ​ 17,897 91 % 11,229 * ​ Depreciation and amortization ​ 51,514 ​ 45,605 ​ 36,178 ​ 5,909 13 % 9,427 26 % EBITDA ​ 233,289 ​ 148,200 ​ 65,630 ​ 85,089 57 % 82,570 * ​ Acquisition-related cost of goods sold ​ 1,956 ​ 5,679 ​ 521 ​ (3,723) (66) % 5,158 * ​ Acquisition-related transaction costs ​ ​ 1,305 ​ ​ 13,322 ​ ​ 6,405 ​ ​ (12,017) (90) % 6,917 * ​ Pension settlement cost ​ ​ — ​ ​ — ​ ​ 10,674 ​ ​ — ​ * ​ ​ (10,674) ​ * ​ Brazil employment taxes ​ ​ — ​ ​ — ​ ​ 4,202 ​ ​ — ​ * ​ ​ (4,202) ​ * ​ Stock-based compensation - named executive officer awards granted in fiscal year 2024 ​ 717 ​ 717 ​ 475 ​ — — % 242 51 % Phibro Forward income growth initiatives implementation costs - cost of goods sold (1) ​ ​ — ​ ​ 3,798 ​ ​ — ​ ​ (3,798) ​ * ​ ​ 3,798 ​ * ​ Phibro Forward income growth initiatives implementation costs - SG&A (1) ​ 8,646 ​ 6,978 ​ 366 ​ 1,668 24 % 6,612 * ​ Insurance proceeds ​ ​ (3,563) ​ ​ (2,880) ​ ​ (899) ​ ​ (683) 24 % (1,981) * ​ Foreign currency losses, net ​ 12,621 ​ 7,870 ​ 23,863 ​ 4,751 60 % (15,993) (67) % Adjusted EBITDA ​ $ 254,971 ​ $ 183,684 ​ $ 111,237 ​ $ 71,287 39 % $ 72,447 65 % (1) 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 includes $5.2 milllion for consulting costs recorded within selling, general, and administrative expenses and $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. Certain amounts and percentages may reflect rounding adjustments. * Calculation not meaningful Comparison of the years ended June 30, 2026 and 2025 Net sales Net sales of $1,518.1 million for the year ended June 30, 2026 increased $221.9 million, or 17%, as compared to the year ended June 30, 2025. Animal Health sales increased $199.4 million, Mineral Nutrition sales increased $29.1 million, and Performance Products sales decreased $6.6 million. Animal Health Net sales of $1,162.2 million for the year ended June 30, 2026 increased $199.4 million, or 21%. Net sales of MFAs and other increased $164.4 million, or 25%, due to incremental revenues of $146.1 million from sales of products from the MFA portfolio acquired on October 31, 2024, increased demand for certain of our legacy MFAs in Mexico and Southeast Asia and for products sold by our ethanol performance business, including anti-microbials and processing aids used in the fermentation industry. Net sales of nutritional specialty products increased $15.8 million, or 9%, due to an increase in worldwide demand, particularly in North America and South America, and higher companion animal sales. 74 Table of Contents Net sales of vaccines increased $19.3 million, or 14%, primarily due to continued growth of poultry products in Latin America and an increase in domestic and international demand, particularly in Israel and Southeast Asia. 75 Table of Contents Mineral Nutrition Net sales of $282.3 million for the year ended June 30, 2026 increased $29.1 million, or 11%, primarily due to an increase in demand for copper, zinc and trace minerals. Performance Products Net sales of $73.5 million for the year ended June 30, 2026 decreased $6.6 million, or 8%, as a result of lower demand for the ingredients used in personal care products. Gross profit Gross profit of $512.5 million for the year ended June 30, 2026 increased $112.6 million, or 28%, as compared to the year ended June 30, 2025. Gross margin increased 290 basis points to 33.8% of net sales for the year ended June 30, 2026 as compared to 30.9% for the year ended June 30, 2025. The comparison to the prior year includes $3.8 million of prior period inventory write-offs attributable to the closure of an immaterial business, a net decrease of $3.7 million for acquisition-related cost of goods sold related to purchase accounting adjustments for acquisitions, and a net increase in acquisition-related depreciation expense associated with the step-up of fair value of the acquired fixed assets and intangible asset amortization of $1.5 million. Excluding these items, gross profit increased $106.5 million, or 24%, and gross margin increased 230 basis points to 34.6% of net sales due to increased sales, favorable product mix, and increases in average selling prices, partially offset by higher input and distribution costs. Animal Health gross profit, excluding the non-recurring items discussed above, increased $107.9 million due to increased sales, favorable product mix, and increases in average selling prices, partially offset by higher distribution costs. Mineral Nutrition gross profit increased $0.3 million, as the increase in sales volume was offset by increases in unit costs. Performance Products gross profit decreased $1.7 million, primarily as a result of lower demand. Selling, general and administrative expenses SG&A expenses of $318.1 million for the year ended June 30, 2026 increased $28.6 million, or 10%, as compared to the year ended June 30, 2025. SG&A for the year ended June 30, 2026 included $8.6 million of costs associated with Phibro Forward income growth initiatives, $2.4 million for intangible asset amortization, $0.7 million in stock-based compensation expense related to awards granted to certain named executive officers in fiscal year 2024, and $1.3 million for acquisition-related costs, partially offset by $3.6 million related to insurance settlement gains. SG&A for the year ended June 30, 2025 included $13.3 million for acquisition-related costs, $7.0 million of costs associated with Phibro Forward income growth initiatives, $2.4 million for intangible asset amortization, and $0.7 million in stock-based compensation expense, partially offset by $2.9 million related to an insurance settlement gain. Excluding these items, SG&A increased $39.6 million, or 15%. Animal Health SG&A, excluding the non-recurring Animal Health-related items discussed above, increased $30.8 million, primarily due to an increase in employee-related costs due in part to incremental headcount added as part of the Acquisition and the impact of unfavorable changes in foreign currency exchange rates. Mineral Nutrition SG&A decreased $0.4 million, and Performance Products SG&A increased $0.7 million. Corporate expenses, excluding the non-recurring Corporate-related items discussed above, increased $8.5 million due to higher employee-related costs. Interest expense, net Interest expense, net of $44.4 million for the year ended June 30, 2026 increased $9.8 million, or 28%, as compared to the year ended June 30, 2025, due to the expiration of a favorable interest rate swap agreement on $300.0 million of notional debt principal and higher average term loan balances associated with the financing of the Acquisition. These factors are partially offset by lower average revolving credit facility borrowings, lower interest rates, and higher patronage rebates received from the lenders providing the Term A-2 Loan (see “Notes to Consolidated Financial Statements—Debt”). The comparison of interest expense to the prior year is also impacted by $2.0 million in certain prior year costs and charges resulting from the refinancing of the 2024 Credit Agreement, including $1.5 million of new creditor and third-party financing costs and $0.5 million in debt extinguishment costs. ​ 76 Table of Contents Foreign currency losses, net Foreign currency losses, net for the year ended June 30, 2026 were $12.6 million, as compared to net losses of $7.9 million for the year ended June 30, 2025. Current period losses were driven by fluctuations in certain currencies relative to the U.S. dollar, most prominently, in the Israeli New Shekel, the Argentine Peso, and the Euro. Prior year period losses were driven by fluctuations in the Israeli New Shekel, the Brazilian Real and the Argentine Peso. Provision for income taxes The provision for income taxes was $37.6 million and $19.7 million for the years ended June 30, 2026 and 2025, respectively. The effective income tax rate was 27.4% and 29.0% for the years ended June 30, 2026 and 2025, respectively. The effective income tax rate in the current year was higher than the federal statutory rate of 21% due to the mix of foreign income, state and local income taxes, and the impact of global intangible low-taxed income tax expense (“GILTI”), partially offset by foreign-derived intangible income (“FDII”). The effective income tax rate in the current period included among other items, (i) a $4.4 million expense from changes in uncertain tax positions related to prior years, (ii) $3.6 million in insurance proceeds taxed at a lower rate, and (iii) certain other charges, including acquisition-related costs, foreign currency losses, and certain stock-based compensation, which had lower tax rates. The effective income tax rate in the prior year included (i) various exchange rate losses, (ii) changes in uncertain tax positions related to prior years and (iii) certain non-deductible write-offs in connection with the closure of an immaterial business included as part of the Phibro Forward initiatives. Excluding these items, the effective income tax rate was 23.7% and 25.0% for the years ended June 30, 2026 and 2025, respectively. The effective tax rate for the year ended June 30, 2025 was higher than our statutory rate of 21% primarily due to withholding taxes on planned repatriations and the impact of GILTI on tax expense, partially offset by the impact of foreign tax credits. The provision for income taxes for the year ended June 30, 2025 was also impacted by various other items, including (i) certain non-deductible write-offs in connection with the closure of an immaterial business included as part of the Phibro Forward initiatives, (ii) various items with lower tax benefits, most prominently, foreign currency losses and stock-based compensation expense, (iii) a $0.9 million expense from changes in uncertain tax positions related to prior years, and (iv) $0.4 million expense for withholding taxes related to dividends received from an international affiliate. The effective income tax rate without these items was 25.0% for the year ended June 30, 2025. The provision for income taxes for the years ended June 30, 2026 and 2025 included $1.4 million and $3.2 million, respectively, of federal tax expense from the effects of GILTI. Our effective income tax rate included 1.0% and 4.7% related to GILTI income tax expense for the years ended June 30, 2026 and 2025, respectively. Net income Net income of $99.7 million for the year ended June 30, 2026 increased $51.5 million, as compared to net income of $48.3 million for the year ended June 30, 2025. Operating income increased $83.9 million, driven by higher gross profit, partially offset by higher SG&A of $28.6 million, which included net decreases of $12.0 million and $1.7 million in acquisition-related costs and costs related to Phibro Forward income growth initiatives, respectively. Interest expense, net increased $9.8 million due to the expiration of a favorable interest rate swap agreement and higher debt levels. Foreign currency losses, net increased $4.8 million. Income tax expense increased $17.9 million. ​ 77 Table of Contents Comparison of the years ended June 30, 2025 and 2024 For a comparison of our results of operations for the years ended June 30, 2025 and 2024, and an analysis of our financial condition, liquidity and capital resources for the year ended June 30, 2025, see “Part II. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the fiscal year ended June 30, 2025, filed with the SEC on August 27, 2025. Adjusted net income and adjusted diluted earnings per share We report adjusted net income to portray the results of our operations prior to considering certain income statement elements. See “—General description of non-GAAP financial measures” for more information. A reconciliation of net income, as reported under GAAP, to adjusted net income is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Change For the Year Ended June 30 ​ ​ ​ 2026 ​ ​ ​ 2025 ​ ​ ​ 2024 ​ 2026/ 2025 2025/ 2024 ​ ​ ​ ​ (in thousands, except per share amounts and percentages) ​ Reconciliation of GAAP Net Income to Adjusted Net Income ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income ​ $ 99,720 ​ $ 48,264 ​ $ 2,416 ​ $ 51,456 * ​ $ 45,848 ​ * ​ Adjustments ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Acquisition-related items, net of income tax(1)(2) ​ 12,652 ​ 23,258 ​ 13,063 ​ (10,606) (46) % 10,195 ​ 78 % Certain significant items, net of income tax(1) ​ ​ 4,462 ​ ​ 8,878 ​ ​ 11,420 ​ ​ (4,416) (50) % ​ (2,542) ​ (22) % Foreign currency losses, net of income tax(1) ​ 10,520 ​ 6,366 ​ 19,429 ​ 4,154 65 % (13,063) ​ (67) % Certain income tax items(1) ​ 4,385 ​ 1,375 ​ 2,035 ​ 3,010 * ​ (660) ​ (32) % Total adjustments, net of income tax(2) ​ ​ 32,019 ​ ​ 39,877 ​ ​ 45,947 ​ ​ (7,858) ​ (20) % ​ (6,070) ​ (13) % Adjusted net income(2) ​ $ 131,739 ​ $ 88,141 ​ $ 48,363 ​ $ 43,598 49 % $ 39,778 ​ 82 % ​ (1) See table titled “Items Excluded from Adjusted Net Income” below for further details. (2) Current year presentation of acquisition-related items, net of income tax includes acquisition-related depreciation associated with the step-up of fair value of the acquired fixed assets. When applicable, prior year periods have been adjusted to conform to current year presentation. A reconciliation of reported diluted earnings per share (EPS), as reported under GAAP, to non-GAAP adjusted diluted EPS is: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Change ​ For the Year Ended June 30 ​ ​ ​ 2026 ​ ​ ​ 2025 ​ ​ ​ 2024 ​ 2026/ 2025 2025/ 2024 ​ ​ ​ ​ (in thousands, except per share amounts and percentages) ​ Reconciliation of GAAP diluted EPS to Adjusted diluted EPS ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ GAAP EPS, diluted ​ $ 2.43 ​ $ 1.19 ​ $ 0.06 ​ $ 1.24 * ​ $ 1.13 ​ * ​ Adjustments ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Acquisition-related items, net of income tax(1) ​ 0.31 ​ 0.57 ​ 0.32 ​ (0.26) (46) % 0.25 ​ 78 % Certain significant items, net of income tax ​ 0.11 ​ 0.22 ​ 0.28 ​ (0.11) (50) % (0.06) ​ (21) % Foreign currency losses, net of income tax ​ 0.26 ​ 0.16 ​ 0.48 ​ 0.10 63 % (0.32) ​ (67) % Certain income tax items ​ 0.11 ​ 0.03 ​ 0.05 ​ 0.08 * ​ (0.02) ​ (40) % Adjustments EPS, diluted(1) ​ ​ 0.79 ​ ​ 0.98 ​ ​ 1.13 ​ ​ (0.19) ​ (19) % ​ (0.15) ​ (13) % Adjusted EPS, diluted(1) ​ $ 3.22 ​ $ 2.17 ​ $ 1.19 ​ $ 1.05 48 % $ 0.98 ​ 82 % ​ (1) Current year presentation of acquisition-related items, net of income tax includes acquisition-related depreciation associated with the step-up of fair value of the acquired fixed assets. When applicable, prior year periods have been adjusted to conform to current year presentation. 78 Table of Contents Items excluded from adjusted net income consisted of: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended June 30 ​ 2026 ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ (in thousands) Items Excluded from Adjusted Net Income ​ ​ ​ ​ ​ ​ ​ ​ ​ Acquisition-related items ​ ​ ​ ​ ​ ​ ​ ​ ​ Acquisition-related intangible amortization in cost of goods sold ​ $ 4,475 ​ $ 5,468 ​ $ 6,675 Acquisition-related depreciation in cost of goods sold(1)(2) ​ ​ 6,756 ​ ​ 4,266 ​ ​ — Acquisition-related cost of goods sold ​ 1,956 ​ 5,679 ​ 521 Acquisition-related intangible amortization in SG&A ​ ​ 2,404 ​ 2,375 ​ 2,986 Acquisition-related transaction costs in SG&A ​ ​ 1,305 ​ 13,322 ​ 6,405 Acquisition-related items - income taxes ​ ​ (4,244) ​ ​ (7,852) ​ ​ (3,524) Total acquisition-related items, net of income taxes(2) ​ 12,652 ​ 23,258 ​ 13,063 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Certain significant items ​ ​ ​ ​ ​ ​ ​ ​ ​ 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 ​ ​ — ​ 3,798 ​ 366 Phibro Forward income growth initiatives implementation costs - SG&A ​ ​ 8,646 ​ ​ 6,978 ​ ​ — Insurance proceeds ​ ​ (3,563) ​ (2,880) ​ (899) Refinancing expense ​ ​ — ​ ​ 1,960 ​ ​ — Certain items - income taxes ​ ​ (1,338) ​ ​ (1,695) ​ ​ (3,398) Total certain items, net of income taxes ​ ​ 4,462 ​ ​ 8,878 ​ ​ 11,420 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Foreign currency losses, net ​ ​ ​ ​ ​ ​ ​ ​ ​ Foreign currency losses, net ​ ​ 12,621 ​ 7,870 ​ 23,863 Foreign currency losses, net - income taxes ​ ​ (2,101) ​ ​ (1,504) ​ ​ (4,434) Total foreign currency losses, net, net of income taxes ​ ​ 10,520 ​ ​ 6,366 ​ ​ 19,429 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Certain income tax items ​ ​ ​ ​ ​ ​ ​ ​ ​ Non-U.S. withholding and related taxes, net, on planned repatriation ​ ​ — ​ ​ — ​ ​ 2,828 Foreign tax credit regulations ​ ​ — ​ ​ — ​ ​ (1,223) Change in valuation allowance ​ ​ — ​ ​ — ​ ​ (1,204) Changes in uncertain tax positions and certain other items ​ ​ 4,385 ​ ​ 1,375 ​ ​ 1,634 Total certain income tax items ​ ​ 4,385 ​ ​ 1,375 ​ ​ 2,035 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total adjustments, net of income taxes(2) ​ $ 32,019 ​ $ 39,877 ​ $ 45,947 ​ (1) Represents acquisition-related depreciation associated with the step-up of fair value of the acquired fixed assets. (2) Current year presentation of acquisition-related items net of income tax includes acquisition-related depreciation associated with the step-up of fair value of the acquired fixed assets. When applicable, prior year periods have been adjusted to conform to current year presentation. ​ 79 Table of Contents Analysis of financial condition, liquidity and capital resources Net (decrease) increase in cash and cash equivalents was: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Change For the Year Ended June 30 ​ ​ ​ 2026 ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ 2026/ 2025 ​ ​ ​ 2025/ 2024 ​ ​ (in thousands) Cash provided (used) by: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating activities ​ $ 68,954 ​ $ 80,124 ​ $ 87,594 ​ $ (11,170) ​ $ (7,470) Investing activities ​ (71,455) ​ (288,688) ​ (48,194) ​ 217,233 ​ (240,494) Financing activities ​ (6,560) ​ 207,134 ​ (6,768) ​ (213,694) ​ 213,902 Effect of exchange-rate changes on cash and cash equivalents ​ 2,441 ​ (1,144) ​ (3,300) ​ 3,585 ​ 2,156 Net (decrease) increase in cash and cash equivalents ​ $ (6,620) ​ $ (2,574) ​ $ 29,332 ​ $ (4,046) ​ $ (31,906) ​ Operating activities Operating activities provided $69.0 million of net cash for the year ended June 30, 2026. Cash provided by net income, adjusted for the non-cash items, including depreciation and amortization, was $164.1 million. Cash used in the ordinary course of business from changes in operating assets and liabilities, was $95.1 million. Accounts receivable used $7.5 million of cash due to higher sales. Inventories used $86.3 million of cash due to increased quantities associated with the Acquisition in response to anticipated tariffs and forecasted future demand. Accounts payable used $12.5 million of cash due to timing of purchases and payments. Accrued expenses and other liabilities provided cash of $26.4 million, primarily due to timing of incurrence. Operating activities provided $80.1 million of net cash for the year ended June 30, 2025. Cash provided by net income, adjusted for the non-cash items, including depreciation and amortization, was $101.7 million. Cash used in the ordinary course of business from changes in operating assets and liabilities, net of the impact of the net assets acquired from the Acquisition, was $21.6 million. Accounts receivable used $55.2 million of cash due to higher sales. Inventories used $44.3 million of cash due to increased quantities on hand due to timing of inventory purchases and forecasted future demand. Accounts payable provided $45.6 million of cash due to timing of purchases and payments. Accrued expenses and other liabilities provided cash of $47.2 million, primarily due to timing of incurrence. Investing activities Investing activities used $71.5 million of net cash for the year ended June 30, 2026. Capital expenditures were $59.1 million, as we continued to invest in expanding production capacity and productivity improvements. Purchases of our short-term investments used $47.6 million in cash, and maturities of our short-term investments provided $36.0 million in cash. Investing activities used $288.7 million of net cash for the year ended June 30, 2025, which included the purchase price paid for the Acquisition of $286.5 million, net of cash acquired. Capital expenditures were $38.3 million, as we continued to invest in expanding production capacity and productivity improvements. Purchases of our short-term investments used $14.0 million in cash, and maturities of our short-term investments provided $49.0 million in cash. Financing activities Financing activities used $6.6 million of net cash for the year ended June 30, 2026. We paid $19.5 million in dividends to holders of our Class A common stock and Class B common stock and $16.3 million in scheduled quarterly principal payments on long-term debt. Net revolver borrowings on our credit facility provided $29.0 million in cash. Financing activities provided $207.1 million of net cash for the year ended June 30, 2025 and reflect the impact of the refinancing of our debt portfolio in July 2024 and the financing of the Acquisition. Proceeds of $300.0 million from the refinancing, as well as revolving credit facility borrowings were used to pay the remaining principal balances of the then outstanding debt of $313.1 million, and we used the proceeds of $350.0 million in term loan borrowings to finance the purchase price of the Acquisition. Net revolver payments on our credit facilities used $89.0 million in cash. We paid $11.9 million in scheduled quarterly principal payments on long-term debt during the year ended June 30, 2025. We also 80 Table of Contents paid $10.4 million in debt issuance costs related to the refinancing and $19.4 million in dividends to holders of our Class A common stock and Class B common stock. Liquidity and capital resources We believe our cash on hand, operating cash flows and financing arrangements, including the availability of borrowings under the Amended Revolving Credit Commitments, will be sufficient to support our ongoing cash needs. We have considered the current and potential future effects of the macroeconomic market conditions in the financial markets. At this time, we expect adequate liquidity for at least the next twelve months. Aggregate maturities of long-term debt under the Amended 2024 Credit Agreement are: ​ ​ ​ ​ ​ ​ ​ For the Years Ending June 30 ​ ​ Annual Maturities ​ ​ Interest Payments 2027 ​ $ 25,025 ​ $ 43,769 2028 ​ ​ 25,025 ​ ​ 42,289 2029 ​ ​ 25,025 ​ ​ 40,809 2030 ​ ​ 406,637 ​ ​ 16,723 2031 ​ ​ 7,475 ​ ​ 16,243 Thereafter ​ ​ 248,688 ​ ​ — Total ​ $ 737,875 ​ $ 159,833 ​ For purposes of estimating future interest payments until maturity, we assume long-term debt decreases in accordance with the scheduled amortization payments, the outstanding balance of the Amended 2024 Revolver continues unchanged, the September 2024 and March 2025 interest rate swap agreements remain in place through their maturity dates, and future interest rates are the same as the rates at June 30, 2026. We can provide no assurance that our liquidity and capital resources will be adequate for future funding requirements. We believe we will be able to comply with the terms of the covenants under the Amended 2024 Credit Agreement based on our operating plan. In the event of adverse operating results and/or violation of covenants under the facilities, there can be no assurance we would be able to obtain waivers or amendments. Other risks to our meeting future funding requirements include global economic conditions and macroeconomic, business and financial disruptions that could arise, including armed conflicts in the Middle East and between Russia and Ukraine. There can be no assurance that a challenging economic environment or an economic downturn would not affect our liquidity or ability to obtain future financing or fund operations or investment opportunities. In addition, our debt covenants may restrict our ability to invest. Certain relevant measures of our liquidity and capital resources are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Change As of June 30 ​ ​ ​ 2026 ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ 2026 / 2025 ​ ​ ​ 2025 / 2024 ​ ​ (in thousands, except ratios) Cash and cash equivalents and short-term investments ​ $ 81,994 ​ $ 77,039 ​ $ 114,613 ​ $ 4,955 ​ $ (37,574) Working capital ​ 562,069 ​ 456,344 ​ 312,031 ​ 105,725 ​ 144,313 Ratio of current assets to current liabilities ​ 2.93:1 ​ 2.65:1 ​ 2.79:1 ​ ​ ​ ​ ​ We define working capital as total current assets (excluding cash and cash equivalents and short-term investments) less total current liabilities (excluding current portion of long-term debt). We calculate the ratio of current assets to current liabilities based on this definition. At June 30, 2026, we had $116.0 million in outstanding borrowings under the Amended 2024 Credit Agreement. We had outstanding letters of credit and other commitments of $2.1 million, leaving $316.9 million available for borrowings and letters of credit, subject to restrictions in our Amended 2024 Credit Agreement. We currently intend to pay quarterly dividends on our Class A and Class B common stock, subject to approval by the Board of Directors. On July 28, 2026, our Board of Directors declared a cash dividend of $0.12 per share on Class A common stock and Class B common stock, payable on September 23, 2026 to stockholders of record at the close of business on September 2, 2026. Our future ability to pay dividends will depend upon our results of operations, financial 81 Table of Contents condition, capital requirements, our ability to obtain funds from our subsidiaries and other factors that our Board of Directors deems relevant. Additionally, the terms of our current and any future agreements governing our indebtedness could limit our ability to pay dividends or make other distributions. We do not expect to contribute to the domestic pension plan during fiscal year 2027. At June 30, 2026, our cash and cash equivalents and short-term investments included $80.0 million held by our international subsidiaries. There are no restrictions on cash distributions to PAHC from our international subsidiaries. Contractual obligations Our contractual obligations include maturities under the Amended 2024 Credit Agreement, including future interest accruals, and also operating lease commitments. See “Notes to Consolidated Financial Statements — Debt and Leases.” Off-balance sheet arrangements We currently do not use off-balance sheet arrangements for the purpose of credit enhancement, hedging transactions, investment or other financial purposes. In the ordinary course of business, we may indemnify our counterparties against certain liabilities that may arise. These indemnifications typically pertain to environmental matters. If the indemnified party were to make a successful claim pursuant to the terms of the indemnification, we would be required to reimburse the loss. These indemnifications generally are subject to certain restrictions and limitations. 82 Table of Contents Selected Quarterly Financial Data (Unaudited) To facilitate quarterly comparisons, the following unaudited information presents the quarterly results of operations, including segment data, for the years ended June 30, 2026 and 2025. This quarterly financial data was prepared on the same basis as, and should be read in conjunction with, the audited consolidated financial statements and related notes included herein. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Quarters ​ Year ​ ​ ​ ​ September 30, ​ ​ ​ December 31, ​ ​ ​ March 31, ​ ​ ​ June 30, ​ ​ ​ June 30, For the Periods Ended ​ 2025 ​ 2025 ​ 2026 ​ 2026 ​ 2026 ​ ​ (in thousands) Net sales ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ MFAs and other ​ $ 195,198 ​ $ 202,111 ​ $ 205,789 ​ $ 207,630 ​ $ 810,728 Nutritional Specialties ​ 48,151 ​ 50,230 ​ 46,810 ​ 49,881 ​ 195,072 Vaccines ​ 40,107 ​ 37,636 ​ 38,626 ​ 40,050 ​ 156,419 Animal Health ​ $ 283,456 ​ $ 289,977 ​ $ 291,225 ​ $ 297,561 ​ $ 1,162,219 Mineral Nutrition ​ 62,988 ​ ​ 68,945 ​ ​ 73,418 ​ 76,990 ​ 282,341 Performance Products ​ 17,449 ​ ​ 14,988 ​ ​ 18,900 ​ 22,196 ​ 73,533 Total net sales ​ 363,893 ​ 373,910 ​ 383,543 ​ 396,747 ​ 1,518,093 Cost of goods sold ​ 244,110 ​ ​ 241,254 ​ ​ 257,868 ​ 262,346 ​ 1,005,578 Gross profit ​ 119,783 ​ 132,656 ​ 125,675 ​ 134,401 ​ 512,515 Selling, general and administrative expenses ​ ​ 68,523 ​ ​ 82,330 ​ ​ 81,022 ​ ​ 86,244 ​ ​ 318,119 Operating income ​ ​ 51,260 ​ ​ 50,326 ​ ​ 44,653 ​ ​ 48,157 ​ ​ 194,396 Interest expense, net ​ 12,059 ​ ​ 11,756 ​ ​ 10,431 ​ 10,183 ​ 44,429 Foreign currency losses, net ​ 2,934 ​ ​ 2,145 ​ ​ 1,909 ​ 5,633 ​ 12,621 Income before income taxes ​ 36,267 ​ 36,425 ​ 32,313 ​ 32,341 ​ 137,346 Provision for income taxes ​ 9,740 ​ ​ 8,966 ​ ​ 8,289 ​ 10,631 ​ 37,626 Net income ​ $ 26,527 ​ $ 27,459 ​ $ 24,024 ​ $ 21,710 ​ $ 99,720 Net income per share ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ basic ​ $ 0.65 ​ $ 0.68 ​ $ 0.59 ​ $ 0.54 ​ $ 2.46 diluted ​ $ 0.65 ​ $ 0.67 ​ $ 0.59 ​ $ 0.53 ​ $ 2.43 Adjusted EBITDA ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Animal Health ​ $ 74,872 ​ $ 82,169 ​ $ 71,103 ​ $ 75,434 ​ $ 303,578 Mineral Nutrition ​ 4,523 ​ 6,367 ​ 5,141 ​ 5,639 ​ 21,670 Performance Products ​ 1,603 ​ 831 ​ 2,219 ​ 3,408 ​ 8,061 Corporate ​ (19,140) ​ (21,303) ​ (17,662) ​ (20,233) ​ (78,338) Adjusted EBITDA ​ $ 61,858 ​ $ 68,064 ​ $ 60,801 ​ $ 64,248 ​ $ 254,971 Reconciliation of net income to Adjusted EBITDA ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income ​ $ 26,527 ​ $ 27,459 ​ $ 24,024 ​ $ 21,710 ​ $ 99,720 Interest expense, net ​ 12,059 ​ 11,756 ​ 10,431 ​ 10,183 ​ 44,429 Provision for income taxes ​ 9,740 ​ 8,966 ​ 8,289 ​ 10,631 ​ 37,626 Depreciation and amortization ​ 12,830 ​ ​ 12,891 ​ ​ 12,448 ​ 13,345 ​ 51,514 EBITDA ​ ​ 61,156 ​ 61,072 ​ 55,192 ​ 55,869 ​ 233,289 Acquisition-related cost of goods sold ​ ​ 1,117 ​ ​ 839 ​ ​ — ​ ​ — ​ ​ 1,956 Acquisition-related transaction costs ​ ​ 258 ​ ​ 193 ​ ​ 130 ​ ​ 724 ​ ​ 1,305 Stock-based compensation - named executive officer awards granted in fiscal year 2024 ​ 179 ​ 180 ​ 179 ​ 179 ​ 717 Phibro Forward income growth initiatives implementation costs - SG&A ​ ​ — ​ ​ 3,635 ​ ​ 3,391 ​ ​ 1,620 ​ ​ 8,646 Insurance settlement (gain) loss ​ ​ (3,786) ​ ​ — ​ ​ — ​ ​ 223 ​ ​ (3,563) Foreign currency losses, net ​ 2,934 ​ 2,145 ​ 1,909 ​ 5,633 ​ 12,621 Adjusted EBITDA ​ $ 61,858 ​ $ 68,064 ​ $ 60,801 ​ $ 64,248 ​ $ 254,971 ​ 83 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Quarters ​ Year ​ ​ ​ ​ September 30, ​ ​ ​ December 31, ​ ​ ​ March 31, ​ ​ ​ June 30, ​ ​ ​ June 30, For the Periods Ended ​ 2024 ​ 2024 ​ 2025 ​ 2025 ​ 2025 ​ ​ (in thousands) Net sales ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ MFAs and other ​ $ 107,844 ​ $ 150,338 ​ $ 181,645 ​ $ 206,527 ​ $ 646,354 Nutritional Specialties ​ 42,649 ​ 45,909 ​ 43,350 ​ 47,381 ​ 179,289 Vaccines ​ 32,030 ​ 33,171 ​ 33,382 ​ 38,570 ​ 137,153 Animal Health ​ $ 182,523 ​ $ 229,418 ​ $ 258,377 ​ $ 292,478 ​ $ 962,796 Mineral Nutrition ​ 59,062 ​ ​ 63,250 ​ ​ 66,774 ​ 64,154 ​ 253,240 Performance Products ​ 18,847 ​ ​ 16,593 ​ ​ 22,674 ​ 22,065 ​ 80,179 Total net sales ​ 260,432 ​ 309,261 ​ 347,825 ​ 378,697 ​ 1,296,215 Cost of goods sold ​ 176,937 ​ ​ 207,391 ​ ​ 243,257 ​ 268,688 ​ 896,273 Gross profit ​ 83,495 ​ 101,870 ​ 104,568 ​ 110,009 ​ 399,942 Selling, general and administrative expenses ​ ​ 65,796 ​ ​ 76,337 ​ ​ 71,053 ​ ​ 76,291 ​ ​ 289,477 Operating income ​ ​ 17,699 ​ ​ 25,533 ​ ​ 33,515 ​ ​ 33,718 ​ ​ 110,465 Interest expense, net ​ 7,641 ​ ​ 8,996 ​ ​ 9,355 ​ 8,610 ​ 34,602 Foreign currency losses (gains), net ​ 438 ​ ​ 11,699 ​ ​ (5,528) ​ 1,261 ​ 7,870 Income before income taxes ​ 9,620 ​ 4,838 ​ 29,688 ​ 23,847 ​ 67,993 Provision for income taxes ​ 2,645 ​ ​ 1,653 ​ ​ 8,808 ​ 6,623 ​ 19,729 Net income ​ $ 6,975 ​ $ 3,185 ​ $ 20,880 ​ $ 17,224 ​ $ 48,264 Net income per share ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ basic ​ $ 0.17 ​ $ 0.08 ​ $ 0.52 ​ $ 0.42 ​ $ 1.19 diluted ​ $ 0.17 ​ $ 0.08 ​ $ 0.51 ​ $ 0.42 ​ $ 1.19 Adjusted EBITDA ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Animal Health ​ $ 40,385 ​ $ 58,177 ​ $ 63,123 ​ $ 60,575 ​ $ 222,260 Mineral Nutrition ​ 3,762 ​ 5,702 ​ 5,762 ​ 5,610 ​ 20,836 Performance Products ​ 2,288 ​ 1,888 ​ 3,336 ​ 3,035 ​ 10,547 Corporate ​ (15,779) ​ (17,592) ​ (17,335) ​ (19,253) ​ (69,959) Adjusted EBITDA ​ $ 30,656 ​ $ 48,175 ​ $ 54,886 ​ $ 49,967 ​ $ 183,684 Reconciliation of net income to Adjusted EBITDA ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income ​ $ 6,975 ​ $ 3,185 ​ $ 20,880 ​ $ 17,224 ​ $ 48,264 Interest expense, net ​ 7,641 ​ 8,996 ​ 9,355 ​ 8,610 ​ 34,602 Provision for income taxes ​ 2,645 ​ 1,653 ​ 8,808 ​ 6,623 ​ 19,729 Depreciation and amortization ​ 9,004 ​ ​ 11,574 ​ ​ 12,616 ​ 12,411 ​ 45,605 EBITDA ​ ​ 26,265 ​ 25,408 ​ 51,659 ​ 44,868 ​ 148,200 Acquisition-related cost of goods sold ​ ​ — ​ ​ 1,634 ​ ​ 1,708 ​ ​ 2,337 ​ ​ 5,679 Acquisition-related transaction costs ​ ​ 3,424 ​ ​ 8,815 ​ ​ 636 ​ ​ 447 ​ ​ 13,322 Stock-based compensation - named executive officer awards granted in fiscal year 2024 ​ 179 ​ 180 ​ 179 ​ 179 ​ 717 Phibro Forward income growth initiatives implementation costs - cost of goods sold ​ ​ — ​ ​ — ​ ​ 3,798 ​ ​ — ​ ​ 3,798 Phibro Forward income growth initiatives implementation costs - SG&A ​ ​ 350 ​ ​ 1,696 ​ ​ 3,980 ​ ​ 952 ​ ​ 6,978 Insurance settlement gain ​ ​ — ​ ​ (1,257) ​ ​ (1,546) ​ ​ (77) ​ ​ (2,880) Foreign currency losses (gains), net ​ 438 ​ 11,699 ​ (5,528) ​ 1,261 ​ 7,870 Adjusted EBITDA ​ $ 30,656 ​ $ 48,175 ​ $ 54,886 ​ $ 49,967 ​ $ 183,684 ​ ​ 84 Table of Contents General description of non-GAAP financial measures Adjusted EBITDA Adjusted EBITDA is an alternative view of performance used by management as our primary operating measure, and we believe that investors’ understanding of our performance is enhanced by disclosing this performance measure. We report Adjusted EBITDA to reflect the results of our operations prior to considering certain income statement elements and to make financial and operating decisions. We calculate EBITDA as net income plus (i) interest expense, net, (ii) provision for income taxes or less benefit for income taxes and (iii) depreciation and amortization. We calculate Adjusted EBITDA as EBITDA plus (a) other expense or less other income, as separately reported on our consolidated statements of operations, including foreign currency (gains) losses, net and (b) certain items that we consider to be unusual, non-operational or non-recurring. The Adjusted EBITDA measure is not, and should not be viewed as, a substitute for GAAP reported net income and should not be viewed as a measure of liquidity. The Adjusted EBITDA measure is an important internal measurement for us. We measure our overall performance on this basis in conjunction with other performance metrics. The following are examples of how our Adjusted EBITDA measure is utilized: ● senior management receives a monthly analysis of our operating results that is prepared on an Adjusted EBITDA basis; ● our annual budgets are prepared on an Adjusted EBITDA basis; and ● other goal-setting and performance measurements are prepared on an Adjusted EBITDA basis. Despite the importance of this measure to management in goal setting and performance measurement, Adjusted EBITDA is a non-GAAP financial measure that has no standardized meaning prescribed by GAAP and, therefore, has limits in its usefulness to investors. Because of its non-standardized definition, Adjusted EBITDA, unlike GAAP net income, may not be comparable to the calculation of similar measures of other companies. Adjusted EBITDA is presented to permit investors to more fully understand how management assesses performance. We also recognize that, as an internal measure of performance, the Adjusted EBITDA measure has limitations, and we do not restrict our performance management process solely to this metric. A limitation of the Adjusted EBITDA measure is that it provides a view of our operations without including all events during a period, such as the depreciation of property, plant and equipment or amortization of acquired intangibles, and does not provide a comparable view of our performance to other companies. Adjusted net income and adjusted diluted earnings per share Adjusted net income and adjusted diluted earnings per share represent alternative views of performance and we believe investors’ understanding of our performance is enhanced by disclosing these performance measures. We report adjusted net income and adjusted diluted earnings per share to portray the results of our operations prior to considering certain income statement elements. We calculate adjusted net income as net income plus (i) acquisition-related depreciation associated with the step-up of the acquired fixed assets, acquisition-related intangible amortization, and other acquisition-related items, (ii) certain items we consider to be unusual, non-operational or non-recurring, including certain stock-based compensation awards, (iii) foreign currency (gains) losses, as separately reported on our consolidated statements of operations, and (iv) the income tax effect of pre-tax income adjustments and certain income tax items. Adjusted diluted earnings per share is calculated using the adjusted net income divided by the diluted weighted average number of shares. The adjusted net income and adjusted diluted earnings per share measures are not, and should not be viewed as, a substitute for GAAP reported net income. Adjusted net income and adjusted diluted earnings per share are non-GAAP financial measures that have no standardized meaning prescribed by GAAP and, therefore, have limits in their usefulness to investors. Because of its non-standardized definition, adjusted net income and adjusted diluted earnings per share, unlike GAAP net income, may not be comparable to the calculation of similar measures of other companies. Adjusted net income and adjusted diluted earnings per share are presented to permit investors to more fully understand how management assesses performance. 85 Table of Contents Certain significant items Adjusted EBITDA, adjusted net income and adjusted diluted earnings per share are calculated prior to considering acquisition-related items and certain other items, as detailed in the table titled “Items Excluded from Adjusted Net Income” above. We evaluate such items on an individual basis. Such evaluation considers both the quantitative and the qualitative aspect of their unusual or non-operational or non-recurring nature. Unusual, in this context, may represent items that are not part of our ongoing business; items that, either as a result of their nature or size, we would not expect to occur as part of our normal business on a regular basis. We consider acquisition-related activities and business restructuring costs related to productivity and cost saving initiatives to be unusual items that we do not expect to occur as part of our normal business on a regular basis. We consider insurance proceeds related to specific insured events to be unusual because such proceeds are not generated through our ordinary business operations and relate to specific/discrete events that are not representative of our ongoing operating performance. We consider foreign currency gains and losses to be non-operational because they arise principally from intercompany transactions and are largely non-cash in nature. New accounting standards For discussion of new accounting standards, see “Notes to Consolidated Financial Statements — Summary of Significant Accounting Policies and New Accounting Standards.” Critical accounting policies Critical accounting policies are those that require application of management’s most difficult, subjective and/or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain and may change in subsequent periods. Not all accounting policies require management to make difficult, subjective or complex judgments or estimates. In presenting our consolidated financial statements in accordance with GAAP, we are required to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. Actual results that differ from our estimates and assumptions could have an unfavorable effect on our financial position and results of operations. The following is a summary of accounting policies that we consider critical to the consolidated financial statements. Revenue Recognition We recognize revenue from product sales when our obligations under a customer contract are satisfied; generally, this occurs with the transfer of control (i.e. title and risk of loss) of goods to the customers. Certain of our businesses have terms where control of the product transfers to the customer on shipment, while others have terms where control transfers to the customer on delivery. Revenue reflects the total consideration we expect to be entitled to, in exchange for delivery of products or services, net of variable consideration. Variable consideration includes customer programs and incentive offerings, including pricing arrangements, rebates and other volume-based incentives. We record reductions to revenue for estimated variable consideration at the time we record the sale. Our estimates for variable consideration reflect the amount by which we expect variable consideration to affect the revenue recognized. Such estimates are based on contractual terms and historical experience and are adjusted to reflect future expectations as new information becomes available. Historically, we have not had significant adjustments to our estimates of customer incentives. Sales returns and product recalls have been insignificant and infrequent due to the nature of the products we sell. Business Combinations Our consolidated financial statements reflect the operations of an acquired business beginning as of the date of acquisition. Assets acquired and liabilities assumed are recorded at their fair values at the date of acquisition; goodwill is recorded for any excess of the purchase price over the fair values of the net assets acquired. ​ 86 Table of Contents Significant judgment may be required to determine the fair values of certain tangible and intangible assets and in assigning their respective useful lives. Significant judgment also may be required to determine the fair values of contingent consideration, if any. We typically utilize third-party valuation specialists to assist us in determining fair values of significant tangible and intangible assets and contingent consideration. The fair values are based on available historical information and on future expectations and assumptions deemed reasonable by management but are inherently uncertain. We typically use the direct cost, indirect cost and/or market approaches to measure the fair value of property, plant and equipment, as applicable, depending on the nature of the asset. Our estimates of the useful lives of such assets are based on a number of factors, including the asset’s age and condition at acquisition, the degree of technological or economic obsolescence, expected maintenance requirements, and the asset’s intended use within our operations. These estimates require significant management judgment and are based on historical experience with similar assets and independent valuations obtained at acquisition. We periodically review these estimates and adjust them prospectively when events or changes in circumstances indicate that a revision is warranted, which could materially affect depreciation expense in future periods. We typically use an income method to measure the fair value of intangible assets, based on forecasts of the expected future cash flows attributable to the respective assets. Significant estimates and assumptions inherent in the valuations reflect consideration of other marketplace participants and include the amount and timing of future cash flows, specifically the expected revenue growth rate applied to the cash flows. Unanticipated market or macroeconomic events and circumstances could affect the accuracy or validity of the estimates and assumptions. Determining the useful life of an intangible asset also requires judgment. Our estimates of the useful lives of intangible assets are primarily based on a number of factors including the competitive environment, underlying product life cycles, operating plans and the macroeconomic environment of the countries in which the products are sold. Intangible assets are amortized over their estimated lives. Intangible assets associated with acquired in-process research and development activities (“IPR&D”) are not amortized until a product is available for sale and regulatory approval is obtained. Long-Lived Assets and Goodwill We periodically review our long-lived and amortizable intangible assets for impairment and assess whether significant events or changes in business circumstances indicate that the carrying value of the assets may not be recoverable. Such circumstances may include a significant decrease in the market price of an asset, a significant adverse change in the manner in which the asset is being used or in its physical condition or a history of operating or cash flow losses associated with the use of an asset. We recognize an impairment loss when the carrying amount of an asset exceeds the anticipated future undiscounted cash flows expected to result from the use of the asset and its eventual disposition. The amount of the impairment loss is the excess of the asset’s carrying value over its fair value. In addition, we periodically reassess the estimated remaining useful lives of our long-lived and amortizable intangible assets. Changes to estimated useful lives would affect the amount of depreciation and amortization recorded in the consolidated statements of operations. Goodwill represents the excess of the purchase price over the fair value of the identifiable net assets acquired in a business combination. We assess goodwill for impairment annually during the fourth quarter, or more frequently if impairment indicators exist. Impairment exists when the carrying amount of goodwill exceeds its implied fair value. We may elect to assess our goodwill for impairment using a qualitative or a quantitative approach, to determine whether it is more likely than not that the fair value of goodwill is greater than its carrying value. 87 Table of Contents Income Taxes The provision for income taxes includes U.S. federal, state and foreign income taxes and foreign withholding taxes. Our annual effective income tax rate is determined based on our income, statutory tax rates and tax planning opportunities available in the various jurisdictions in which we operate and the tax impacts of items treated differently for tax purposes than for financial reporting purposes. Tax law requires certain items be included in the tax return at different times than the items are reflected in the financial statements. Some of these differences are permanent, such as expenses that are not deductible in our tax return, and some differences are temporary, reversing over time, such as depreciation expense. These temporary differences give rise to deferred tax assets and liabilities. Deferred tax assets generally represent the tax effect of items that can be used as a tax deduction or credit in future years for which we have already recorded the tax benefit in our income statement. Deferred tax liabilities generally represent the tax effect of items recorded as tax expense in our income statement for which payment has been deferred, the tax effect of expenditures for which a deduction has already been taken in our tax return but has not yet been recognized in our income statement or the tax effect of assets recorded at fair value in business combinations for which there was no corresponding tax basis adjustment. The recognition and measurement of a tax position is based on management’s best judgment given the facts, circumstances and information available at the reporting date. Inherent in determining our annual effective income tax rate are judgments regarding business plans, planning opportunities and expectations about future outcomes. Realization of certain deferred tax assets, including research and development costs capitalized for income tax purposes and net operating loss carryforwards, is dependent upon generating sufficient future taxable income in the appropriate jurisdiction prior to the expiration of the amortization or carryforward periods. The amount of the deferred tax asset considered realizable, however, could be adjusted if estimates of future taxable income during the carryforward period are reduced or increased or if objective negative evidence in the form of cumulative losses is no longer present and additional weight may be given to subjective evidence, such as projections for growth. We establish valuation allowances for deferred tax assets when the amount of expected future taxable income is not likely to support the use of the deduction or credit. We may take tax positions that management believes are supportable but are potentially subject to successful challenge by the applicable taxing authority in the jurisdictions where we operate. We evaluate our tax positions and establish liabilities in accordance with the applicable accounting guidance on uncertainty in income taxes. We review these tax uncertainties in light of changing facts and circumstances, such as the progress of tax audits, and adjust them accordingly. We account for income tax contingencies using a benefit recognition model. If our initial assessment does not result in the recognition of a tax benefit, we regularly monitor our position and subsequently recognize the tax benefit if: (i) there are changes in tax law or there is new information that sufficiently raise the likelihood of prevailing on the technical merits of the position to “more likely than not”; (ii) the statute of limitations expires; or (iii) there is a completion of an audit resulting in a favorable settlement of that tax year with the appropriate agency. We regularly re-evaluate our tax positions based on the results of audits of federal, state and foreign income tax filings, statute of limitations expirations, and changes in tax law or receipt of new information that would either increase or decrease the technical merits of a position relative to the “more-likely-than-not” standard. Our assessments concerning uncertain tax positions are based on estimates and assumptions that have been deemed reasonable by management, but our estimates of unrecognized tax benefits and potential tax benefits may not be representative of actual outcomes, and variation from such estimates could materially affect our financial statements in the period of settlement or when the statutes of limitations expire. Finalizing audits with the relevant taxing authorities can include formal administrative and legal proceedings, and, as a result, it is difficult to estimate the timing and range of possible changes related to our uncertain tax positions, and such changes could be significant. Because there are a number of estimates and assumptions inherent in calculating the various components of our income tax provision, certain future events such as changes in tax legislation, geographic mix of earnings, completion of tax audits or earnings repatriation plans could have an impact on those estimates and our effective income tax rate. We expect to repatriate approximately $5.0 million of international earnings, which will be subject to applicable non-U.S. withholding and related taxes, net of reductions in U.S. income taxes. We intend to continue to reinvest indefinitely all other undistributed earnings of our foreign subsidiaries where we could be subject to applicable non-U.S. withholding and related taxes if amounts are repatriated to the U.S. 88 Table of Contents For more information regarding our significant accounting policies, estimates and assumptions, see “Notes to Consolidated Financial Statements — Summary of Significant Accounting Policies and New Accounting Standards.” Contingencies Legal matters We are subject to numerous contingencies arising in the ordinary course of business, such as product liability and other product-related litigation, commercial litigation, environmental claims (as discussed in more detail below) and proceedings and government investigations. Certain of these contingencies could result in losses, including damages, fines and/or civil penalties, and/or criminal charges, which could be substantial. We believe that we have strong defenses in these types of matters, but litigation is inherently unpredictable and excessive verdicts do occur. We do not believe that any of these matters will have a material adverse effect on our financial position. However, we could incur judgments, enter into settlements or revise our expectations regarding the outcome of certain matters, and such developments could have a material adverse effect on our results of operations or cash flows in the period in which the amounts are paid and/or accrued. We have accrued for losses that are both probable and reasonably estimable. Substantially all of these contingencies are subject to significant uncertainties and, therefore, determining the likelihood of a loss and/or the measurement of any loss can be complex. Consequently, we are unable to estimate the range of reasonably possible losses in excess of amounts accrued. Our assessments are based on estimates and assumptions that have been deemed reasonable by management, but the assessment process relies heavily on estimates and assumptions that may prove to be incomplete or inaccurate, and unanticipated events and circumstances may occur that might cause us to change those estimates and assumptions. Environmental Our operations and properties are subject to Environmental Laws and regulations. As such, the nature of our current and former operations exposes us to the risk of claims with respect to such matters, including fines, penalties and remediation obligations that may be imposed by regulatory authorities. Under certain circumstances, we might be required to curtail operations until a particular problem is remedied. Known costs and expenses under Environmental Laws incidental to ongoing operations, including the cost of litigation proceedings relating to environmental matters, are generally included within operating results. Potential costs and expenses may also be incurred in connection with the repair or upgrade of facilities to meet existing or new requirements under Environmental Laws or to investigate or remediate potential or actual contamination, and from time to time, we establish contingent loss accruals for such contemplated investigation and remediation costs. In many instances, the ultimate costs under Environmental Laws and the time period during which such costs are likely to be incurred and paid are difficult to predict. While we believe that our operations are currently in material compliance with Environmental Laws, we have, from time to time, received notices of violation from governmental authorities and have been involved in civil or criminal action for such violations. Additionally, at various sites, our subsidiaries are engaged in continuing investigation, remediation and/or monitoring efforts to address contamination associated with historic operations of the sites. We devote considerable resources to complying with Environmental Laws and managing environmental liabilities. We have developed programs to identify requirements under, and maintain compliance with, Environmental Laws; however, we cannot predict with certainty the impact of increased and more stringent regulation on our operations, future capital expenditure requirements, or the cost of compliance. The nature of our current and former operations exposes us to the risk of claims with respect to environmental matters, and we cannot assure we will not incur material costs and liabilities in connection with such claims. Based upon our experience to date, we believe that the future cost of compliance with existing Environmental Laws and liabilities for known environmental claims pursuant to such Environmental Laws, will not have a material adverse effect on our financial position, results of operations, cash flows or liquidity. ​ 89 Table of Contents Expenditures for ongoing compliance with environmental regulations are expensed or capitalized as appropriate. We capitalize expenditures made to extend the useful life or productive capacity of an asset, including expenditures that prevent future environmental contamination. Other expenditures are expensed as incurred and are recorded in selling, general and administrative expenses in the consolidated statements of operations. We record the expense and related liability in the period an environmental assessment indicates remedial efforts are probable and the costs can be reasonably estimated. Estimates of the liability are based upon currently available facts, existing technology and presently enacted laws and regulations taking into consideration the likely effects of inflation and other societal and economic factors. All available evidence is considered, including prior experience in remediation of contaminated sites, other companies’ experiences and data released by the U.S. Environmental Protection Agency and other organizations. The estimated liabilities are not discounted. We record anticipated recoveries under existing insurance contracts when recovery is considered to be probable, which may involve significant judgement when proceeds have yet to be received from the insurer. Such assessment considers whether a confirmed and documented claim settlement and/or other written communications and acknowledgements from the insurer exist, the historical recovery experience with the insurer, and the creditworthiness of the insurer. For additional details, see “Business — Environmental, Health and Safety” and “Notes to Consolidated Financial Statements — Commitments and Contingencies.” ​