Phibro Animal Health Corporation Reports Second Quarter TEANECK, N.J.

Phibro Animal Health Corporation

Reports Second Quarter

TEANECK, N.J., February 9, 2016 (GLOBE

NEWSWIRE) - Phibro Animal Health Corporation (NASDAQ:PAHC) today announced its financial results for its second quarter

ended December 31, 2015.

"Many of the positive trends we have

seen in prior periods have continued in our second quarter and I am pleased that we have once again delivered solid bottom line

results," said Jack Bendheim, Phibro's Chairman, President and Chief Executive Officer. "The U.S. market is in

the midst of a transition away from the use of antibiotics for growth promotion and we continue to capture a healthy share of the

business that is moving into nutritional specialty products. Outside the U.S., we have seen continued sales growth across all of

our Animal Health product groups."

As announced in January, Phibro has purchased the assets of

MVP Laboratories, Inc. ("MVP"), a privately held developer, manufacturer and marketer of livestock vaccines, vaccine

adjuvants and other products based in Omaha, Nebraska. Acquiring the MVP business strengthens Phibro's core animal vaccine

business and provides new opportunities in a fast-growing segment of the animal health industry. In addition to other products,

MVP manufactures the MJPRRS autogenous swine vaccine, which Phibro exclusively distributes pursuant to its agreement with

MJ Biologics, Inc. ("MJB").

"This acquisition is an excellent strategic fit that supports

our growth initiatives by providing Phibro with an innovative organization and proven manufacturing capabilities," Mr. Bendheim

said. "By expanding the capabilities and species reach of Phibro vaccines, we are adding a platform for growth and value

creation consistent with our vision for the future."

Net sales of $191.8 million for the

three months ended December 31, 2015 increased $3.1 million, or 2%, as compared to the three months ended December 31, 2014. Animal

Health, Mineral Nutrition and Performance Products grew $2.7 million, $0.1 million and $0.3 million, respectively.

Net sales of $121.5 million for the

three months ended December 31, 2015 grew $2.7 million, or 2%. The growth was primarily due to volume increases in the nutritional

specialty and vaccine product groups. Nutritional specialty products grew $3.4 million, or 17%, 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

$1.1 million, or 10%, principally from volume growth, including sales of MJB products

that began in January 2015. MFAs and other decreased $1.8 million, or 2%, primarily due to volume declines in the U.S., partially

offset by international growth.

Net sales of $58.9 million increased

$0.1 million, or less than 1%, for the three months ended December 31, 2015. The increase is due to increased volumes from improved

demand. Offsetting the volume increases were lower average selling prices due to underlying raw material commodity price declines.

Performance Products

Net sales of $11.4 million increased

$0.3 million, or 2%, for the three months ended December 31, 2015, due to higher volumes of copper-based products, partially offset

by lower average selling prices of copper-based products and lower volumes of chemical catalyst products.

Gross profit of $62.4 million for the three

months ended December 31, 2015 increased $6.3 million, or 11%, to 32.5% of net sales, as compared to the three months ended December

31, 2014. Animal Health gross profit increased $5.8 million, 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 increased

$0.5 million due to higher volumes and favorable product mix. Performance Products gross profit decreased $0.1 million due to lower

volumes and lower average selling prices, partially offset by lower product costs.

Selling, general and administrative

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

expenses of $39.8 million for the three months ended December 31, 2015 increased $3.5 million, or 10%, as compared to the three

months ended December 31, 2014. Animal Health accounted for $2.5 million of the increase, driven by increased sales force and product

development costs and by $0.6 million of acquisition related compensation expense and increased intangible amortization expense.

Corporate expenses accounted for $0.9 million of the increase due to increased compensation and office related costs.

Adjusted EBITDA of $28.4 million for

the three months ended December 31, 2015 increased $3.4 million, as compared to the three months ended December 31, 2014. Animal

Health adjusted EBITDA increased $4.1 million, or 14%, due to sales growth and increased gross profit, partially offset by increased

SG&A expenses. Mineral Nutrition increased $0.4 million, or 12%, due to higher sales volumes and improved operating margins,

partially offset by lower average selling prices. Performance Products decreased $0.2 million, due to lower average selling prices.

Corporate expenses increased $0.9 million due to increased compensation and office related costs.

Interest expense, net

Interest expense, net, of $4.0 million

for the three months ended December 31, 2015 increased $0.5 million, due to acquisition related accrued interest in connection

with the MJB transaction.

Foreign currency (gains) losses, net

Foreign currency (gains) losses, net for

the three months ended December 31, 2015, amounted to net losses of $2.6 million, as compared to $1.0 million in net gains

for the three months ended December 31, 2014. Foreign currency losses in the three months ended December 31, 2015 were primarily

due to the movement of Brazil, Argentina and South Africa currencies relative to the

U.S. dollar. Foreign currency gains and losses primarily arise from intercompany balances.

Provision (benefit) for income taxes

During the three months ended December 31,

2015, we concluded it was more likely than not that the value of domestic deferred tax assets would be realized and it was no longer

necessary to maintain a valuation allowance. We have released the domestic valuation allowance, except for amounts that will be

released against the utilization of net operating losses during the remainder of the fiscal year. Including the effect of the release

of the valuation allowance for domestic deferred income taxes, we experienced an income tax benefit of $14.1 million and our effective

tax rate was (87.5)% for the three months ended December 31, 2015.

Excluding the $18.8 million benefit from

the release of the valuation allowance for domestic deferred income taxes, income tax expense was $4.7 million for the three

months ended December 31, 2015, compared with $3.0 million for the same period last year, resulting in a 29.2% effective tax rate

compared to 17.6% for the same period last year. Our consolidated provisions for income taxes, before taking into effect discrete

items such as the valuation allowance release, is primarily comprised of income taxes relating to profitable foreign jurisdictions.

The increase in the 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.

Prior to releasing the valuation allowance,

our domestic provision for income taxes was substantially offset by the utilization of domestic net operating losses that previously

had been offset by a valuation allowance. As a result of the release of the valuation allowance, we expect our income tax provision

in future periods to increase as we record an income tax provision on our domestic pre-tax income.

Adjusted diluted EPS

Adjusted diluted EPS was $0.39 for the quarter,

compared with $0.35 last year. The increase was primarily due to growth in adjusted EBITDA, partially offset by timing of cash

income tax payments.

BALANCE SHEET AND CASH FLOWS

WEBCAST & CONFERENCE CALL DETAILS

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

Details for the webcast and

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