Balchem Corporation Reports First Quarter 2025 Financial Results

MONTVALE, N.J., April 24, 2025 (GLOBE NEWSWIRE) -- Balchem Corporation (NASDAQ: BCPC) reported today financial results for its 2025 fiscal first quarter ended March 31, 2025. For the quarter, the Company reported net sales of $250.5 million, net earnings of $37.1 million, adjusted EBITDA^(a) of $66.3 million, and free cash flow^(a) of $31.0 million.

Ted Harris, Chairman, President and CEO of Balchem said, "The first quarter was an excellent start to the year for Balchem, with sales and earnings growth in all three segments. We delivered record net sales and adjusted EBITDA, strong net earnings, and solid first quarter cash flows.”

First Quarter 2025 Financial Highlights:

• Record net sales of $250.5 million, an increase of $10.9 million, or 4.5%, compared to the prior year quarter.
• GAAP net earnings were $37.1 million, an increase of 27.8%, from the prior year quarter.
• Record Adjusted EBITDA was $66.3 million, an increase of 8.9%, from the prior year quarter.
• GAAP earnings per share of $1.13 compared to $0.89 in the prior year quarter and adjusted earnings per share^(a) of $1.22 compared to $1.03 in the prior year quarter.
• Cash flows from operations were $36.5 million, with free cash flow^(a) of $31.0 million.
• Sales and earnings from operations growth in all three of our segments: Human Nutrition and Health, Animal Nutrition and Health, and Specialty Products.

• In the first quarter, we launched Balchem's new corporate website. This innovative platform enhances user experience and provides comprehensive insights into our products and innovations. The new site features improved navigation, detailed product information, and resources for all stakeholders, including investors, customers, and employees. Additionally, we have introduced new product brand sites for Albion^® Minerals, K2VITAL^™, Optifolin+^®, OptiMSM^®, and VitaCholine^®, which have an increased end-consumer orientation to aid in our efforts to build awareness and drive market penetration.
• On April 22, we released our 2024 Sustainability Report, highlighting our sustainability initiatives and accomplishments. Guided by our core values and our vision of making the world a healthier place, our Sustainability Report demonstrates our commitment to bringing innovative solutions for global health and nutrition needs, and to operate with excellence as strong stewards of our employees, customers, shareholders, and communities.

Mr. Harris added, "These results highlight the strength and resilience of our business model which will undoubtedly serve us well as we maneuver through the changing global trade outlook that is impacting markets. We believe we are well positioned to continue to drive growth through this market volatility and we will remain nimble and flexible to adjust accordingly as market conditions evolve.”

Financial Results for the First Quarter of 2025:

The Human Nutrition and Health segment generated record sales of $158.5 million, an increase of $5.7 million, or 3.7%, compared to the prior year quarter. The increase was driven by higher sales within both the food ingredients and solutions businesses and the nutrients business. Record earnings from operations for this segment of $38.0 million increased $4.7 million, or 14.2%, compared to $33.3 million in the prior year quarter, primarily due to the aforementioned higher sales and a favorable mix. Excluding the effect of non-cash expense associated with amortization of acquired intangible assets and other adjustments, record adjusted earnings from operations^(a) for this segment were $41.0 million, compared to $38.5 million in the prior year quarter, an increase of 6.2%.

The Animal Nutrition and Health segment generated quarterly sales of $57.3 million, an increase of $3.4 million, or 6.2%, compared to the prior year quarter. The increase was driven by higher sales in the ruminant species markets, partially offset by lower sales in the monogastric species markets. First quarter earnings from operations for this segment of $5.2 million increased $3.2 million, or 154.2%, compared to $2.1 million in the prior year quarter, primarily due to the aforementioned higher sales and a favorable mix. Excluding the effect of non-cash expense associated with amortization of acquired intangible assets and other adjustments, adjusted earnings from operations for this segment were $5.5 million compared to $2.4 million in the prior year quarter, an increase of 126.5%.

The Specialty Products segment generated quarterly sales of $33.3 million, an increase of $1.7 million, or 5.3%, compared to the prior year quarter, due to higher sales in both the performance gases and plant nutrition businesses. Earnings from operations for this segment were $9.6 million, compared to $8.2 million in the prior year comparable quarter, an increase of $1.4 million, or 16.9%, driven by lower operating expenses and the aforementioned higher sales. Excluding the effect of non-cash expense associated with amortization of acquired intangible assets and other adjustments, adjusted earnings from operations for this segment were $10.5 million, compared to $9.3 million in the prior year quarter, an increase of 12.7%.

Consolidated quarterly gross margin of $88.2 million increased by $6.7 million, or 8.2%, compared to $81.5 million for the prior year comparable period. Gross margin as a percentage of sales was 35.2% as compared to 34.0% in the prior year period, an increase of 120 basis points, primarily due to a favorable mix. Operating expenses of $37.2 million for the quarter decreased $2.7 million from the prior year comparable quarter, primarily due to lower amortization expense and a decrease in compensation-related costs, partially offset by higher professional services.

Net interest expense was $2.9 million and $5.4 million in the first quarters of 2025 and 2024, respectively. The decrease in interest expense was primarily due to lower outstanding borrowings. Our effective tax rates for the three months ended March 31, 2025 and 2024 were 22.7% and 21.3%, respectively. The higher effective tax rate was primarily due to lower tax benefits from stock-based compensation.

First quarter cash flows provided by operating activities were $36.5 million and free cash flow was $31.0 million. The $200.7 million of net working capital on March 31, 2025 included a cash balance of $49.9 million. Significant cash payments during the quarter included a dividend payment of $28.3 million, capital expenditures and intangible assets acquired of $5.6 million, and repurchases of common stock of $5.3 million.

Ted Harris said, "The Balchem team delivered another strong quarter in Q1 of 2025. We remain confident in the long-term growth outlook for our company, despite the current global trade uncertainties, as we continue to focus on progressing our strategic growth initiatives over the course of the remainder of 2025 and beyond.”

Quarterly Conference Call

A quarterly conference call will be held on Thursday, April 24, 2025, at 11:00 AM Eastern Time (ET) to review first quarter 2025 results. Ted Harris, Chairman, President and CEO and Martin Bengtsson, CFO will host the call. We invite you to listen to the conference by calling toll-free 1-877-407-8289 (local dial-in 1-201-689-8341), five minutes prior to the scheduled start time of the conference call. The conference call will be available for replay three hours after the conclusion of the call through end of day Thursday, May 8, 2025. To access the replay of the conference call, dial 1-877-660-6853 (local dial-in 1-201-612-7415), and use conference ID #13753034.

Segment Information

Balchem Corporation reports three business segments: Human Nutrition and Health, Animal Nutrition and Health, and Specialty Products. The Human Nutrition and Health segment delivers customized food and beverage ingredient systems, as well as key nutrients into a variety of applications across the food, supplement and pharmaceutical industries. The Animal Nutrition and Health segment manufactures and supplies products to numerous animal health markets. Through Specialty Products, Balchem provides specialty-packaged performance gases for use in healthcare and other industries, and also provides chelated minerals to the micronutrient agricultural market. Sales and production of products outside of our reportable segments and other minor business activities are included in "Other and Unallocated".

Forward-Looking Statements

This release contains forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended, which reflect our expectation or belief concerning future events that involve risks and uncertainties. These forward-looking statements generally are identified by the words "believe," "project," "expect," "anticipate," "estimate," "forecast," "outlook," "intend," "strategy," "future," "opportunity," "plan," "may," "should," "will," "would," "will be," "will continue," "will likely result," or the negative thereof or variations thereon or similar expressions generally intended to identify forward-looking statements. Forward-looking statements may relate to such matters as projections of revenue, margins, expenses, tax provisions, earnings, cash flows, benefit obligations, dividends, share repurchases or other financial items; any statements of the plans, strategies and objectives of management for future operations, including those relating to any statements concerning expected development, performance or market share relating to our products and services; any statements regarding future economic conditions or our performance; any statements regarding pending investigations, claims or disputes; any statements of expectation or belief; and any statements of assumptions underlying any of the foregoing. These statements are based on the Company's currently available information and our current assumptions, expectations and projections about future events. They are subject to future events, risks and uncertainties - many of which are beyond the Company's control - as well as potentially inaccurate assumptions, that could cause actual results to differ materially from those in the forward-looking statements. Important factors and other risks that may affect the Company's business or that could cause actual results to differ materially are included in filings the Company makes with the U.S. Securities and Exchange Commission from time to time, including its Annual Report on Form 10-K, its Quarterly Reports on Form 10-Q, its Current Reports on Form 8-K, and in its other SEC filings. Reference should be made to such factors and all forward-looking statements are qualified in their entirety by the above cautionary statements. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Contact: Jacqueline Yarmolowicz, Balchem Corporation (Telephone: 845-326-5600)

Selected Financial Data (unaudited)

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