Aug 27, 2026 earnings call — Annual results, 2027 guidance and plant closure
Company guided fiscal 2027 net sales of $1.55 billion to $1.6 billion.
Revenue $0.4B (est $0.4B) · EPS $0.85 (est $0.71) · Next-quarter revenue outlook $1.6B–$1.6B
Key quotes
"Sales from the acquired Zoetis MFA portfolio were down 11% in the quarter, largely reflecting a difficult comparison against a strong prior year period."
"Based on our current outlook, the expected cumulative EBITDA contributions from the program reaches approximately $50 million in fiscal 2027 compared with our fiscal 2024 baseline."
"One of the key uncertainties we considered in developing our fiscal 2027 outlook is the regulatory status of virginiamycin in Brazil."
Analyst Q&A 5
Zoetis MFA sales and Virginiamycin
Q (Erin Wilson Wright · Morgan Stanley): They asked why the new Zoetis MFA (MSA) business fell this quarter and what to expect for growth into fiscal 2027. They also asked about demand by species and the regulatory exposure and company sales for Virginiamycin.
A: Management said the Q4 drop in the Zoetis MFA portfolio was driven by a difficult comparator from last year and not by negative underlying trends, and they expect the portfolio to outpace Phibro's overall revenue growth in fiscal 2027. They cited strong momentum in North America, expected international growth, and that prior returns from Tier 3 transitions will help revenue in 2027 but not gross profit or EBITDA. On Virginiamycin they said the exposure is isolated to Brazil, that fiscal 2026 sales were about USD 27 million and they assume very minimal sales in fiscal 2027, with a chance of approval but conservatively no sales after Q1.
"We really continue to believe this portfolio will outpace the overall revenue growth for Phibro in fiscal year 2027." — Glenn David (CFO)
Margins, M&A focus, Brazil update
Q (Ekaterina Knyazkova · JPMorgan): They asked assumptions for gross margins and SG&A next year and how Virginiamycin affects margins. They also asked about business development appetite and any Brazil regulatory updates or competitor label approvals.
A: Management said they expect gross margins to be essentially flat next year, that Virginiamycin is negative to margins but will be offset by efficiencies from Phibro Forward and gains from the Chicago Heights closure, and that SG&A will be a little above revenue growth but not materially so. On business development they said vaccines and nutritional specialties are primary focus areas, with companion animal and climate also of interest, and they will pursue deals prudently to complement internal targets. On Brazil they said they are working constructively with regulators and are cautiously optimistic therapeutic approvals can occur within the 180-day transition ending in October, but political noise around elections could delay timing so they removed it from fiscal '27 guidance.
"So related to margins, moving into next year, we expect gross margins to be essentially flat." — Glenn David (CFO)
Inventory, CapEx, cash and capital plan
Q (Daniel Grosslight · Citi): They asked how much working capital and inventory build is needed in fiscal 2027, expectations for CapEx and free cash flow conversion, and the one-time cash charges and timing from closing Chicago Heights. They also asked about capital allocation priorities including buybacks, debt paydown, dividend and M&A vs organic.
A: Management said free cash flow was limited in fiscal 2026 (about $10 million) due to an $86 million inventory build from the Zoetis portfolio, and that inventory build stabilized in Q4. For fiscal 2027 they expect inventory build to be limited to the Chicago Heights transition and "in the range of $25 million to $30 million," and they expect CapEx to be higher than the $59 million spent in fiscal 2026 to grow vaccine capacity in Ireland and Israel and to shift some Chicago Heights production. They said cash costs for the site closure are around USD 10 million plus about another USD 10 million in CapEx, that adjusted EBITDA impact in 2027 will be minimal to slightly positive with ongoing $15 million to $20 million benefit materializing in 2028 and beyond, and that organic growth and internal investment are the first priorities while supporting the dividend and paying down debt, with business development a second priority.
"We expect to be that in the range of $25 million to $30 million." — Glenn David (CFO)
Mineral Nutrition, Phibro Forward next steps, pets update
Q (Michael Ryskin · BofA): They asked about visibility for Mineral Nutrition prices and margins into 2027. They also asked whether Phibro Forward has a next phase and for an update on companion animal products like Rejensa and Restoris.
A: Management said Mineral Nutrition revenue rose but EBITDA lagged because input costs rose and they could not fully pass prices to customers; they expect stronger EBITDA next year even if revenue growth slows. On Phibro Forward they said it is not a new formal transformation 2.0 but the company will keep the operational changes and a 3-year planning cycle and continue to extract benefits from the new way of operating. On companion animal they said Rejensa growth is improving as they added distributors and Restoris is growing with reorders but performance has been below earlier hopes, so they tempered guidance while remaining optimistic about longer-term potential.
"So it's not going to be a formal transformation program, but there is the learnings and the way that we operate will continue." — Daniel Bendheim (CEO)
Mexico cattle imports impact
Q (Navann Ty Dietschi · BNP Paribas): They asked about early thoughts on the phased Mexican border reopening and its impact on the Kettle herd and Phibro.
A: Management said the initial impact on U.S. beef production in 2026 will be very modest, helping fill excess feedlot capacity but unlikely to materially lower consumer beef prices near term. The process is being implemented in a controlled phased approach with veterinary inspection of each animal, with the first port opened and the second to open, and projected imports next year of about 12,000 cattle per month or less than 150,000 head by mid-'27, which equates to about 1.5% of the 27 million head annual U.S. feedlot production; they noted beef-on-dairy supply is a much larger current factor.
"This is being implemented in a controlled phased approach with veterinary inspection of each animal." — Larry Miller (COO)