Phibro Animal Health Corporation reported net sales of $347.8 million for the third quarter ended March 31, 2025, representing a 32% increase or $84.6 million compared to the prior-year quarter. The Animal Health segment's sales surged 42% to $258.4 million, with the Zoetis MFA portfolio contributing $77.0 million in incremental revenues, driving MFAs and other products up 68%. Nutritional specialties increased 8%, and vaccines grew 1%.
Gross profit for the quarter increased 31% to $104.6 million. While the reported gross margin saw a slight decrease to 30.1%, excluding inventory write-offs and acquisition-related purchase accounting adjustments, the underlying gross margin improved by 140 basis points to 31.6%. Selling, general, and administrative expenses increased 19% to $71.1 million, including $4.0 million for Phibro Forward initiatives and $0.6 million for acquisition-related costs.
Net income for the quarter was $20.9 million, a substantial increase from $8.4 million in the prior year, resulting in diluted EPS of $0.51. Adjusted EBITDA soared 85% to $54.9 million, and adjusted diluted EPS increased to $0.63. The company significantly raised its full-year fiscal 2025 guidance, now expecting net sales between $1.26 billion and $1.29 billion, adjusted EBITDA between $177 million and $183 million, and adjusted diluted EPS between $1.96 and $2.09.
Phibro also provided updates on its debt management, including a new swap arrangement for $150 million at a fixed rate of 3.18% plus margin through September 2029, entered in September 2024. Another swap arrangement for $275 million at 3.64% plus margin through February 2030 was entered in March 2025. Additionally, a forward-starting interest rate collar for $250 million with a cap of 4.75% and a floor of 1.99% through June 2026 was entered in March 2025.
The company noted that its gross leverage ratio was 3.0x and net leverage ratio was 2.7x at March 31, 2025. Regarding tariffs, Phibro anticipates a very limited impact for the remainder of fiscal year 2025, but expects potential pressure of $5 million to $10 million on certain inputs and sales in fiscal year 2026.
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