Phibro Animal Health Corporation

Phibro Animal Health Corporation

Reports First Quarter

TEANECK, N.J., November 9, 2015 (GLOBE NEWSWIRE)

- Phibro Animal Health Corporation (NASDAQ:PAHC) today announced its financial results for its first quarter ended September

"I am once again proud of the performance

of our team. Despite the economic challenges faced by many of the countries in which we operate, our Animal Health segment

recorded 8% sales growth and 19% adjusted EBITDA growth for the quarter. We are progressing nicely on our capacity expansions

while we also continue to seek acquisitions that will complement our strategy," commented Jack Bendheim, Phibro's Chairman,

President and Chief Executive Officer.

Our results for the three months ended September

30, 2014 included $6.0 million of revenue and income from milestone payments for licensing of vaccine delivery technology. For

a better understanding of underlying trends, we also present comparisons with 2014 that exclude the prior year milestone payments.

Net sales of $187.1 million for the three

months ended September 30, 2015 increased $5.7 million, or 3%, excluding the prior year $6.0 million in vaccine licensing

milestone revenue, as compared to the three months ended September 30, 2014. Animal Health grew $8.9 million, while

Performance Products and Mineral Nutrition declined $2.3 million and $1.0 million, respectively.

Net sales decreased $0.3 million, or less than

1%, including the prior year $6.0 million in vaccine licensing milestone revenue.

Net sales of $120.1 million for the three

months ended September 30, 2015 grew $8.9 million, or 8%, excluding the prior year $6.0 million in vaccine licensing milestone

revenue. The growth was primarily due to volume increases across all product groups. MFAs and other grew $4.7 million, or 6%, primarily

due to volume growth in international markets. Nutritional specialty products grew $2.9 million, or 15%, primarily due to U.S.

and E.U. volume growth of our products for the dairy industry and the introduction of products for the U.S. poultry industry. Vaccines

grew $1.3 million, or 12%, excluding the $6.0 million in vaccine licensing milestone revenue, principally from volume growth, including

sales of MJ Biologics, Inc. ("MJB") products that began in January 2015.

Net sales grew $2.9 million, or 2%, including

the prior year $6.0 million in vaccine licensing milestone revenue.

Net sales of $54.5 million decreased

$1.0 million, or 2%, for the three months ended September 30, 2015. The decrease is due to lower average selling prices as

a result of declines in underlying raw material commodity prices. Partially offsetting these declines were increased sales volumes

of certain trace mineral products, as current market conditions improved demand.

Performance Products

Net sales of $12.5 million decreased

$2.3 million, or 15%, for the three months ended September 30, 2015, due to lower volumes and average selling prices of copper-based

products and lower volumes of chemical catalyst products.

Gross profit of $60.2 million for the three

months ended September 30, 2015 increased $5.8 million, or 11%, to 32.2% of net sales, excluding the prior year $6.0 million

in vaccine licensing milestone revenue, as compared to the three months ended September 30, 2014. Animal Health gross profit

increased $7.3 million, excluding the prior year vaccine licensing milestone revenue, due to volume growth, lower unit costs from

improved operating efficiencies and favorable currency movements, partially offset by costs related to sales of MJB products. Mineral

Nutrition gross profit decreased $0.1 million due to lower average selling prices, partially offset by lower product costs and

higher volumes. Performance Products gross profit decreased $1.3 million due to lower volumes, lower average selling prices and

higher product costs.

Gross profit declined $0.2 million, or less

than 1%, including the prior year $6.0 million in vaccine licensing milestone revenue.

Selling, general and administrative expenses

Selling, general and administrative ("SG&A")

expenses of $38.3 million for the three months ended September 30, 2015 increased $3.1 million, or 9%, as compared to the

three months ended September 30, 2014. Animal Health accounted for $2.8 million of the increase, driven by increased sales

and development costs and $0.4 million of acquisition related accrued compensation related to the MJB transactions. Corporate expenses

accounted for $0.4 million of the increase due to salary and wage-related costs, in part related to the costs of being a public

Adjusted EBITDA of $27.7 million for

the three months ended September 30, 2015 increased $3.2 million, or 13%, excluding the prior year $6.0 million in vaccine

licensing milestone revenue, as compared to the three months ended September 30, 2014. Animal Health adjusted EBITDA increased

$5.0 million, or 19%, due to sales growth and increased gross profit, partially offset by increased SG&A expenses. Mineral

Nutrition decreased $0.3 million, or 9%, due to lower average selling prices, partially offset by higher sales volumes and improved

operating margins. Performance Products decreased $1.0 million, or 92%, due to lower sales volumes and lower average selling prices.

Corporate expenses increased $0.5 million due to increases in salary and wage-related costs, in part related to the costs of being

Adjusted EBITDA declined $2.8 million, or 9%,

including the prior year $6.0 million in vaccine licensing milestone revenue.

Interest expense, net

Interest expense, net, of $3.8 million for the

three months ended September 30, 2015 increased $0.3 million, due to acquisition related accrued interest in connection with

the MJB transactions.

Foreign currency (gains) losses, net

Foreign currency (gains) losses, net for the

three months ended September 30, 2015 amounted to net gains of $5.5 million, as compared to $1.2 million in net gains for

the three months ended September 30, 2014. Foreign currency gains in the three months ended September 30, 2015 were primarily

due to the movement of Brazil and Turkey currencies relative to the U.S. dollar. Foreign currency gains and losses primarily arise

from intercompany balances.

Provision for income taxes

Income tax expense was $4.7 million for

the three months ended September 30, 2015, compared with $3.9 million for the same period last year. Our consolidated

provisions for income taxes are primarily comprised of income taxes relating to profitable foreign jurisdictions. Our effective

tax rate for the current quarter was 20.2% as compared to 17.0% for last year. The increase in our effective rate was primarily

due to a greater proportion of our pre-tax income being generated in our foreign subsidiaries during this quarter as compared to

the same quarter last year. The provision for income taxes on domestic pre-tax income was substantially offset by the utilization

of domestic net operating losses that previously had been offset by a valuation allowance. The provision for income taxes also

includes benefits from the recognition of certain previously unrecognized tax benefits of $1.6 million and $1.2 million for the

three months ended September 30, 2015 and 2014, respectively.

Adjusted diluted EPS

Adjusted diluted EPS was $0.44 for the quarter,

compared with $0.36 last year, excluding the prior year milestone payments for licensing of vaccine delivery technology. The increase

was primarily due to growth in adjusted EBITDA.

BALANCE SHEET AND CASH FLOWS

WEBCAST & CONFERENCE CALL DETAILS

Health Corporation will host a webcast and conference call during which the company will review quarterly financial results.

Details for the webcast and conference

NOTE: In order to join this conference

call, all participants will be required to provide the Conference ID number.

A replay of the webcast will be archived

and made available on Phibro's website.

Statements: This communication contains forward-looking statements that are subject to risks and uncertainties. All statements

other than statements of historical or current fact included in this report are forward-looking statements. Forward-looking statements

discuss our current expectations and projections relating to our financial condition, results of operations, plans, objectives,

future performance and business. You can identify forward-looking statements by the fact that they do not relate strictly to historical

or current facts. These statements may include words such as "aim," "anticipate," "believe,"

"estimate," "expect," "forecast," "outlook," "potential," "project,"