Phibro Animal Health Corporation Reports Fourth Quarter and Fiscal Year Results, Presents Financial Guidance and Announces an Increased Dividend TEANECK, N.J.

Phibro Animal Health Corporation Reports

Fourth Quarter and Fiscal Year Results, Presents Financial Guidance

and Announces an Increased Dividend

TEANECK, N.J., August 27, 2018 (GLOBE NEWSWIRE)

- Phibro Animal Health Corporation (NASDAQ:PAHC) today announced its financial results for its fourth quarter and fiscal

year ended June 30, 2018, presented financial guidance for the new fiscal year and announced a planned increase in its quarterly

Highlights for the June 2018 quarter (compared

to the June 2017 quarter)

Highlights for the June 2018 year (compared

to the June 2017 year)

Guidance for the June 2019 year, compared

to the June 2018 year

Quarterly dividend expected to increase by

20%, to $0.12 per share, effective with the December 2018 dividend payment.

"The positive finish

to the fiscal year shows the momentum of our business as we start our new fiscal year," said Jack Bendheim, Phibro's Chairman,

President and Chief Executive Officer. "For the fourth quarter, consolidated sales grew 9% and adjusted EBITDA grew 12%.

For the full year, consolidated sales and adjusted EBITDA each grew 7%. For the year, the Animal Health segment saw 21% international

sales growth, demonstrating the international expansion of our existing portfolio. Overall, Animal Health sales grew 7% for the

full year, as the international growth was offset by a domestic decline due to reduced volumes of medically important antimicrobials,

customer order patterns for certain products and a continued weak dairy industry. Animal Health's adjusted EBITDA margin

expanded to 26.7% of sales for the year, due to favorable product mix. The Mineral Nutrition segment saw good profitability growth

"Our longer-term strategy in Animal Health is to focus

on the profitable growth of our portfolio, led by nutritional specialties and vaccines. In fiscal 2019, we are in a strong

position to make strategic investments in our business that we expect will lead to longer-term, broader growth in the future.

These investments will include:

"We expect it will be approximately 18 to 24 months before

we see the commercial fruits of these investments. We believe these investments are more prudent at this time than focusing on

the acquisition of existing businesses. These investments underline our confidence in our business, our technologies and capabilities

and our people," said Mr. Bendheim.

"Because these investments require significant P&L

expense dollars to develop future growth opportunities, our earnings guidance for fiscal 2019 is approximately even with fiscal

2018, despite strong sales growth and gross profit improvement. Our fiscal 2019 financial guidance shows consolidated sales growth

of 4% to 7%, with adjusted gross profit improving by 5% to 9%. We expect the Animal Health segment's sales growth and favorable

product mix will drive the gross profit improvement. Offsetting the sales growth and gross profit improvement, we expect 10% to

14% growth in selling, general and administrative expenses, in large part related to spending on future growth initiatives. As

a result, we expect fiscal 2019 adjusted EBITDA to be approximately the same as or slightly better than the prior year."

"While we see good momentum in our business, we also recognize

pressures on our customers from the potential ongoing disruption of international trade and from the volatility of certain international

economies and currencies," said Mr. Bendheim.

"We also are pleased to announce a planned 20% increase

in our dividend. The increase reflects the consistent positive cash flow of the business and the strength of our balance sheet,"

Net sales of $211.8 million for

the three months ended June 30, 2018, increased $17.0 million, or 9%, as compared to the three months ended June 30, 2017. Animal

Health, Mineral Nutrition and Performance Products grew $9.1 million, $7.5 million and $0.4 million, respectively.

Net sales of $137.7 million for

the three months ended June 30, 2018, grew $9.1 million, or 7%. Net sales of MFAs and other grew $7.9 million, or 9%, on continued

growth across most international regions, notably due to additional penetration in the cattle sector plus the incremental benefit

of a recent acquisition. Domestic net sales of MFAs and other were approximately level with the prior year. Net sales of nutritional

specialty products grew $0.1 million, or less than 1%, as continuing growth in the poultry segment was offset by reduced sales

to the dairy sector due to weak industry conditions. Net sales of vaccines grew $1.1 million, or 7%, primarily due to volume growth

in international markets.

Net sales of $60.3 million increased

$7.5 million, or 14%, for the three months ended June 30, 2018. The increased revenue was driven by higher average selling prices,

consistent with the underlying raw material commodity price increases. Volumes were similar as compared to the three months ended

Performance Products

Net sales of $13.8 million increased

$0.4 million, or 3%, for the three months ended June 30, 2018, due to increased volumes of personal care ingredients and higher

average selling prices of copper-based products, partially offset by lower volumes of copper-based products.

Gross profit of $67.5 million for the three months

ended June 30, 2018, increased $4.4 million, or 7%, as compared to the three months ended June 30, 2017. Gross profit decreased

to 31.9% of net sales for the three months ended June 30, 2018, as compared to 32.4% for the three months ended June 30, 2017.

Animal Health gross profit increased $5.0 million due to volume growth and favorable product mix. Mineral Nutrition gross profit

decreased $0.6 million, driven by unfavorable product mix and reduced margins. Performance Products gross profit was in-line with

the prior year as volume growth was offset by unfavorable product mix.

Selling, general and administrative expenses

Selling, general and administrative expenses

("SG&A") of $41.4 million for the three months ended June 30, 2018, increased $1.8 million, or 5%, as compared

to the three months ended June 30, 2017. SG&A for the three months ended June 30, 2018 and 2017, included gains of $0.5 million

and $1.0 million, respectively, from the net effect of acquisition-related adjustments to contingent consideration and impairments

of intangible assets. Without the effect of the gains, SG&A increased $1.3 million, or 3%.

Animal Health, Mineral Nutrition and Performance

Products SG&A was $0.9 million below the prior year, primarily on the timing of various expenses. Corporate expenses increased

$2.2 million, due to increased development costs, higher professional fees and $0.3 million of stock-based compensation expense

in the current year.

Interest expense, net

Interest expense, net of $2.7 million

for the three months ended June 30, 2018, decreased $0.5 million, or 16%, as compared to the three months ended June 30, 2017.

Interest expense decreased $0.1 million compared to the prior year, primarily due to lower interest rates in the new Credit Facilities

completed in June 2017. Interest income improved $0.4 million due to higher rates earned on short-term investments.

Foreign currency (gains) losses, net

Foreign currency (gains) losses, net for

the three months ended June 30, 2018, amounted to net gains of $0.1 million, as compared to net losses of $0.5 million for

the three months ended June 30, 2017. Foreign currency gains and losses primarily arise from intercompany balances and international

short-term investments.

Provision (benefit) for income taxes

The United States government enacted comprehensive

income tax legislation (the "Tax Act") in December 2017. The Tax Act makes broad and complex changes to United

States income tax law and includes numerous elements that affect the Company, including a reduced federal corporate income tax

rate and changes to business-related exclusions, deductions and credits. Our provision for income taxes reflects a statutory 28.1%

weighted-average federal income tax rate and other elements of the Tax Act in effect for the year ended June 30, 2018. The

statutory federal income tax rate will be 21.0% for the year ending June 30, 2019. The Tax Act also has consequences related to

our international operations.

We have substantially completed our analysis

and accounting for the Tax Act and have recorded the effects thereof. However, the ultimate financial statement effects of the

Tax Act could differ from the amounts we have recognized due to additional information that becomes available, changes in regulations

or interpretations, legislative action to address questions around the Tax Act or changes in accounting standards for income taxes

or related interpretations. As such, the amounts we have recorded are provisional and we could adjust such amounts in the future

if additional new information so requires.

The provision for income taxes, effective