Phibro Animal Health Corporation Reports Third Quarter Results, Provides Revised Financial Guidance TEANECK, N.J.

Phibro Animal Health Corporation Reports Third Quarter

Results, Provides Revised Financial Guidance

TEANECK, N.J., May 4, 2022 (Business Wire) - Phibro Animal

Health Corporation (Nasdaq:PAHC) today announced financial results for its third quarter ended March 31, 2022.

"Our fiscal year-to-date net sales reflect year-over-year growth of

12%, driven by double-digit sales growth across all segments - a 10% improvement in our core Animal Health segment, and net sales growth

of 16% and 12% in our Mineral Nutrition and Performance Products segments, respectively," said Jack Bendheim, Phibro's Chairman,

President, and Chief Executive Officer. "Given year-to-date performance, we raised full year net sales guidance to a range of $930-950

million, which is a projected year-over-year increase of 12 to 14%. However, given the macroeconomic challenges, uncertainty persists

leading us to maintain our full year adjusted EBITDA guidance of $110 - $114 million."

Net sales of $239.6 million for the three months

ended March 31, 2022, increased $27.9 million, or 13%, as compared to the three months ended March 31, 2021. Animal Health, Mineral Nutrition,

and Performance Products increased $14.2 million, $10.9 million, and $2.8 million, respectively.

Net sales of $148.6 million for the three months

ended March 31, 2022, increased $14.2 million, or 11%. Net sales of MFAs and other increased $5.8 million, or 7%, driven by increased

sales of processing aids used to improve production efficiency in the ethanol fermentation industry. Net sales of nutritional specialty

products increased $4.4 million, or 12%, due to higher demand in dairy and microbial products, plus increased revenues from our companion

animal product. Net sales of vaccines increased $4.0 million, or 21%, due to increased domestic and international volumes.

Net sales of $69.0 million for the three

months ended March 31, 2022, increased $10.9 million, or 19%, primarily driven by higher average selling prices of trace minerals. The increase in average selling prices is due to the movement of the underlying raw material costs.

Performance Products

Net sales of $22.0 million for the three

months ended March 31, 2022, increased $2.8 million, or 15%, as a result of higher volumes of ingredients for personal care products and

higher volumes and average selling prices of copper-based products.

Gross profit of $71.6 million for the three

months ended March 31, 2022, increased $2.5 million, or 4%, as compared to the three months ended March 31, 2021. Gross margin decreased

280 basis points to 29.9% of net sales for the three months ended March 31, 2022, as compared to 32.7% for the three months ended March

Animal Health gross profit increased $0.5 million,

primarily driven by higher sales volume, offset by increased raw material and logistics costs. Mineral Nutrition gross profit increased

$2.2 million, driven primarily by higher average selling prices, partially offset by an increase in raw material costs. Performance Products

gross profit decreased $0.2 million, as a result of higher raw material and production costs.

Selling, general and administrative expenses

Selling, general and administrative

expenses ("SG&A") of $52.4 million for the three months ended March 31, 2022, increased $3.4 million, or 7%, as compared

to the three months ended March 31, 2021. SG&A for the three months ended March 31, 2022, included acquisition-related costs of $0.3

Animal Health SG&A increased

$2.8 million, primarily due to an increase in the number of employees and employee-related costs, in addition to travel expenses. Mineral

Nutrition and Performance Products SG&A were comparable to the prior year. Excluding the acquisition-related costs, Corporate costs

increased by $0.3 million primarily due to increased technology-related costs.

Interest expense, net

Interest expense, net of $2.9 million for the

three months ended March 31, 2022, was comparable to the three months ended March 31, 2021.

Foreign currency (gains), net

Foreign currency (gains), net for the three months

ended March 31, 2022, amounted to net gains of $10.6 million, as compared to $0.6 million of net gains for the three months ended March

31, 2021. Foreign currency (gains), net primarily arose from intercompany balances. Current period gains were driven by the movement of

the Turkish and Brazilian currencies relative to the U.S. dollar.

Provision for income taxes

The provision for income taxes was $9.1 million and $5.6 million for

the three months ended March 31, 2022 and 2021, respectively. The effective income tax rate was 34.1% and 31.6% for the three months ended

March 31, 2022 and 2021, respectively. The provision for income taxes during the three months ended March 31, 2022, included a $0.4 million

expense for a change in deferred taxes, a $0.1 million expense related to the finalized regulations for the Global Intangible Low-Taxed

Income ("GILTI") tax, and a $0.1 million expense related to an uncertain tax position adjustment. The effective income tax

rate, without these items, would have been 31.8% for the three months ended March 31, 2022. The provision for income taxes during the

three months ended March 31, 2021, included a $0.6 million expense related to a detailed deferred tax analysis of property, plant, and

equipment and intangible assets. The effective income tax rate, without this expense, would have been 27.9% for the three months ended

Net income of $17.7 million for the

three months ended March 31, 2022, increased $5.5 million, as compared to net income of $12.2 million for the three months ended March

31, 2021. Operating income decreased $0.9 million, driven by higher SG&A, partially offset by favorable gross profit. The increase

in gross profit in the Animal Health and Mineral Nutrition segments was due to higher product demand and higher selling prices, respectively.

Gross profit in the Performance Products segment decreased due to higher raw material and production costs. Interest expense was comparable,

while foreign currency (gains), net increased $10.0 million. Income tax expense increased $3.5 million.

Adjusted EBITDA of $28.0 million for the three

months ended March 31, 2022, was comparable to the three months ended March 31, 2021. Animal Health Adjusted EBITDA decreased $1.7 million

due to higher SG&A, partially offset by higher revenue and gross profit. Mineral Nutrition Adjusted EBITDA increased $2.1 million,

driven by increased gross profit. Performance Products Adjusted EBITDA was comparable to the three months ended March 31, 2021. Corporate

expenses increased $0.3 million, primarily due to increased technology-related costs.

Adjusted provision for income taxes

The adjusted effective income tax rates

for the three months ended March 31, 2022 and 2021, were 29.1% and 28.4%,

respectively. The decrease in our adjusted effective income tax rate was driven primarily by a change in the jurisdictional mix of earnings.

Adjusted net income of $13.4 million

for the three months ended March 31, 2022, decreased $0.5 million, or 4%,

as compared to the prior year, due to increases in employee-related and technology-related costs, partially offset by higher gross profit

from an increase in volumes and average selling prices.

Adjusted diluted EPS

EPS was $0.33 for the quarter, a decrease of $0.01, as compared to $0.34 in

BALANCE SHEET AND CASH FLOWS

REVISED FINANCIAL GUIDANCE

We are raising our fiscal year 2022 net sales projection, while leaving

unchanged the remaining projections of financial performance for the year ending June 30, 2022, as follows:

This financial guidance assumes certain planned price increases and

freight surcharges, where applicable and competitive conditions allow, have been and will continue to be applied.

The COVID-19 global pandemic may continue to present challenges to

the animal health industry, including but not limited increased material and shipping costs and labor cost increases and shortages. Further

the impact of the military conflict between Russia and Ukraine and any resulting bans, sanctions, boycotts, or broader military conflict

could adversely affect our business, financial condition, or results of operations. Our revised guidance assumes that supply chain and

labor challenges will persist for the remainder of our fiscal year.

We will continue to monitor the impacts that the pandemic and the military

conflict between Russia and Ukraine are having on our business and adjust our financial guidance, if necessary.

WEBCAST & CONFERENCE CALL DETAILS

Phibro Animal Health Corporation will host a webcast

and conference call during which the Company will review its financial results and respond to questions.

NOTE: 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