[Executive Summary & Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Highlights) [Third Quarter 2025 Financial Overview](index=1&type=section&id=Third%20Quarter%202025%20Financial%20Overview) Balchem Corporation reported record Q3 2025 financial results, with net sales up 11.5% to $267.6 million, GAAP net earnings up 19.1% to $40.3 million, and adjusted EBITDA up 11.0% to $71.4 million - Balchem Corporation delivered **record financial results** in Q3 2025, with **strong growth** across all three reporting segments, driven by market penetration of specialty nutrients and favorable 'better for you' trends[1](index=1&type=chunk)[4](index=4&type=chunk) Q3 2025 Key Financial Highlights (YoY Growth) | Metric | Q3 2025 Value (in millions USD) | YoY Change (in millions USD) | YoY Growth % | | :----------------------------- | :------------ | :--------- | :----------- | | Net Sales | $267.6 million | +$27.6 million | 11.5% | | GAAP Net Earnings | $40.3 million | N/A | 19.1% | | Adjusted EBITDA | $71.4 million | N/A | 11.0% | | GAAP EPS | $1.24 | N/A | N/A | | Adjusted EPS | $1.35 | N/A | N/A | | Cash Flows from Operations | $65.6 million | N/A | N/A | | Free Cash Flow | $50.7 million | N/A | N/A | [Recent Strategic and Operational Highlights](index=1&type=section&id=Recent%20Strategic%20and%20Operational%20Highlights) Balchem made significant strategic progress, securing approvals for a new microencapsulation facility, publishing five new research studies including a choline 'biomarker' study, and reducing net debt to $88.9 million through strong cash flows - Balchem received approvals for a new state-of-the-art food ingredient and nutraceutical microencapsulation manufacturing facility in Orange County, NY, projected to **more than double capacity** for fast-growing microencapsulation technologies[4](index=4&type=chunk) - **Five new sponsored research studies** were published in Q3, including a significant **choline 'biomarker' study** that successfully identified choline and betaine concentrations in plasma as predictors of dietary choline intake in healthy humans[4](index=4&type=chunk) - Strong cash flows facilitated net repayments of **$36.0 million** on revolving debt, bringing net debt to **$88.9 million** and an overall leverage ratio of **0.3 times**[4](index=4&type=chunk) [Consolidated Financial Results](index=2&type=section&id=Consolidated%20Financial%20Results) [Income Statement Analysis](index=2&type=section&id=Income%20Statement%20Analysis) Balchem reported Q3 2025 consolidated net sales of $267.6 million, gross margin of $95.5 million, and net earnings of $40.3 million, with year-to-date net sales reaching $773.5 million Consolidated Income Statement Highlights (Q3 and YTD 2025 vs 2024) | Metric | Three Months Ended Sep 30, 2025 (in thousands USD) | Three Months Ended Sep 30, 2024 (in thousands USD) | Nine Months Ended Sep 30, 2025 (in thousands USD) | Nine Months Ended Sep 30, 2024 (in thousands USD) | | :------------------------------------ | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Net Sales | $267,558 | $239,940 | $773,544 | $713,680 | | Gross Margin | $95,453 | $85,361 | $276,734 | $249,869 | | Earnings from Operations | $54,579 | $47,992 | $157,036 | $135,465 | | Net Earnings | $40,289 | $33,837 | $115,620 | $94,892 | | Diluted Net Earnings Per Common Share | $1.24 | $1.03 | $3.54 | $2.90 | | Adjusted EBITDA | $71,447 | $64,379 | $206,961 | $187,515 | | Adjusted Net Earnings Per Common Share | $1.35 | $1.13 | $3.84 | $3.25 | [Segment Performance](index=3&type=section&id=Segment%20Performance) All three business segments—Human Nutrition and Health, Animal Nutrition and Health, and Specialty Products—reported sales and earnings growth in Q3 2025, contributing to the company's overall strong performance - All three reporting segments (Human Nutrition and Health, Animal Nutrition and Health, and Specialty Products) experienced **growth in both sales and earnings** from operations during the third quarter[4](index=4&type=chunk)[7](index=7&type=chunk)[8](index=8&type=chunk) [Human Nutrition and Health](index=3&type=section&id=Human%20Nutrition%20and%20Health) The Human Nutrition and Health segment achieved record Q3 2025 sales of $174.1 million, a 14.3% increase, with earnings from operations growing 14.8% to $40.8 million, driven by nutrient and food ingredient sales Human Nutrition and Health Segment Performance (Q3 2025 vs 2024) | Metric | Q3 2025 Value (in millions USD) | Q3 2024 Value (in millions USD) | YoY Change (in millions USD) | YoY Growth % | | :-------------------------------- | :------------ | :------------ | :--------- | :----------- | | Sales | $174.1 million | $152.3 million | +$21.8 million | 14.3% | | Earnings from Operations | $40.8 million | $35.6 million | +$5.3 million | 14.8% | | Adjusted Earnings from Operations | $44.1 million | $39.0 million | N/A | 13.2% | - The increase in Human Nutrition and Health sales was driven by **higher sales** within both the nutrients business and the food ingredients and solutions businesses[7](index=7&type=chunk) [Animal Nutrition and Health](index=3&type=section&id=Animal%20Nutrition%20and%20Health) The Animal Nutrition and Health segment reported Q3 sales of $56.4 million, up 6.6%, driven by increased sales in ruminant and monogastric markets, with earnings from operations growing 5.2% to $3.7 million Animal Nutrition and Health Segment Performance (Q3 2025 vs 2024) | Metric | Q3 2025 Value (in millions USD) | Q3 2024 Value (in millions USD) | YoY Change (in millions USD) | YoY Growth % | | :-------------------------------- | :------------ | :------------ | :--------- | :----------- | | Sales | $56.4 million | $52.9 million | +$3.5 million | 6.6% | | Earnings from Operations | $3.7 million | $3.5 million | +$0.2 million | 5.2% | | Adjusted Earnings from Operations | $4.0 million | $4.0 million | N/A | 0.0% | - Sales growth in the Animal Nutrition and Health segment was driven by **higher sales** in both the ruminant and monogastric species markets[7](index=7&type=chunk) [Specialty Products](index=3&type=section&id=Specialty%20Products) The Specialty Products segment generated Q3 sales of $35.7 million, a 7.5% increase, driven by performance gases and plant nutrition, with record earnings from operations rising 9.7% to $11.5 million Specialty Products Segment Performance (Q3 2025 vs 2024) | Metric | Q3 2025 Value (in millions USD) | Q3 2024 Value (in millions USD) | YoY Change (in millions USD) | YoY Growth % | | :-------------------------------- | :------------ | :------------ | :--------- | :----------- | | Sales | $35.7 million | $33.2 million | +$2.5 million | 7.5% | | Earnings from Operations | $11.5 million | $10.5 million | N/A | 9.7% | | Adjusted Earnings from Operations | $12.7 million | $11.7 million | N/A | 8.8% | - Sales growth in the Specialty Products segment was due to **higher sales** in both the performance gases and plant nutrition businesses[8](index=8&type=chunk) [Other Financial Details](index=3&type=section&id=Other%20Financial%20Details) Consolidated gross margin increased 11.8% to $95.5 million, operating expenses rose $3.5 million, net interest expense decreased to $2.6 million, and the effective tax rate was 22.6% due to lower state taxes Consolidated Gross Margin, Operating Expenses, Interest, and Tax Rate (Q3 2025 vs 2024) | Metric | Q3 2025 Value (in millions USD) | Q3 2024 Value (in millions USD) | YoY Change (in millions USD) | YoY Growth % | | :-------------------------------- | :------------ | :------------ | :--------- | :----------- | | Gross Margin | $95.5 million | $85.4 million | +$10.1 million | 11.8% | | Gross Margin as % of Sales | 35.7% | 35.6% | +0.1% | N/A | | Operating Expenses | $40.9 million | $37.4 million | +$3.5 million | N/A | | Net Interest Expense | $2.6 million | $4.1 million | -$1.5 million | N/A | | Effective Tax Rate | 22.6% | 22.9% | -0.3% | N/A | - **Operating expenses increased primarily due to an increase in professional services and higher compensation-related costs**[9](index=9&type=chunk) - The **decrease in interest expense** was primarily due to **lower outstanding borrowings**, and the **lower effective tax rate** was primarily due to certain **lower state taxes**[10](index=10&type=chunk) [Financial Position and Cash Flows](index=3&type=section&id=Financial%20Position%20and%20Cash%20Flows) [Balance Sheet](index=6&type=section&id=Balance%20Sheet) As of September 30, 2025, Balchem's total assets increased to $1,661.0 million, with cash and cash equivalents rising to $65.1 million and stockholders' equity increasing to $1,297.9 million Selected Balance Sheet Items (September 30, 2025 vs December 31, 2024) | Metric | Sep 30, 2025 (in thousands USD) | Dec 31, 2024 (in thousands USD) | | :-------------------------------- | :----------- | :----------- | | Cash and Cash Equivalents | $65,093 | $49,515 | | Accounts Receivable, Net | $131,542 | $119,662 | | Inventories | $132,435 | $130,802 | | Total Current Assets | $343,715 | $313,770 | | Total Assets | $1,661,031 | $1,575,371 | | Current Liabilities | $126,369 | $157,685 | | Revolving Loan | $154,000 | $190,000 | | Total Liabilities | $363,167 | $425,458 | | Stockholders' Equity | $1,297,864 | $1,149,913 | [Cash Flow Statement](index=7&type=section&id=Cash%20Flow%20Statement) For the nine months ended September 30, 2025, net cash from operating activities increased to $149.3 million, with Q3 free cash flow at $50.7 million, and significant payments for debt repayment, stock repurchases, and capital expenditures Condensed Consolidated Statements of Cash Flows (Nine Months Ended Sep 30, 2025 vs 2024) | Cash Flow Activity | Nine Months Ended Sep 30, 2025 (in thousands USD) | Nine Months Ended Sep 30, 2024 (in thousands USD) | | :------------------------------------ | :----------------------------- | :----------------------------- | | Net Cash Provided by Operating Activities | $149,281 | $129,682 | | Net Cash Used in Investing Activities | $(27,475) | $(22,777) | | Net Cash Used in Financing Activities | $(111,562) | $(98,602) | | Increase in Cash and Cash Equivalents | $15,578 | $9,247 | | Cash and Cash Equivalents, End of Period | $65,093 | $73,694 | Free Cash Flow (Q3 and YTD 2025 vs 2024) | Metric | Three Months Ended Sep 30, 2025 (in thousands USD) | Three Months Ended Sep 30, 2024 (in thousands USD) | Nine Months Ended Sep 30, 2025 (in thousands USD) | Nine Months Ended Sep 30, 2024 (in thousands USD) | | :------------------------------------ | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Net Cash Provided by Operating Activities | $65,572 | $51,302 | $149,281 | $129,682 | | Capital Expenditures and Proceeds from Sale of Assets | $(14,891) | $(9,065) | $(26,866) | $(22,240) | | Free Cash Flow | $50,681 | $42,237 | $122,415 | $107,442 | - Significant cash payments during Q3 included net repayments on the revolving loan of **$36.0 million**, repurchases of common stock of **$15.4 million**, and capital expenditures and intangible assets acquired of **$14.9 million**[11](index=11&type=chunk) [Non-GAAP Financial Measures](index=8&type=section&id=Non-GAAP%20Financial%20Measures) [Non-GAAP Measures Overview](index=8&type=section&id=Non-GAAP%20Measures%20Overview) Balchem Corporation uses non-GAAP financial measures, including adjusted gross margin, EBITDA, and free cash flow, to provide a clearer understanding of performance by excluding specific adjustments and unusual transactions - **Non-GAAP financial measures** are used to help understand and compare past and future financial performance, **excluding certain business combination accounting adjustments**, **equity compensation**, **nonqualified deferred compensation plan expense**, and **one-time or unusual transactions**[21](index=21&type=chunk) - The non-GAAP measures disclosed include **adjusted gross margin**, **adjusted earnings from operations**, **adjusted net earnings** and related per diluted share amounts, **EBITDA**, **adjusted EBITDA**, **adjusted income tax expense**, **free cash flow**, and **net debt**[21](index=21&type=chunk) [Reconciliation Tables](index=8&type=section&id=Reconciliation%20Tables) The report provides detailed reconciliations of various non-GAAP financial measures to their most directly comparable GAAP financial measures, including adjustments for amortization, transaction and integration costs, restructuring costs, impairment charges, nonqualified deferred compensation plan expenses, and income tax adjustments [Adjusted Gross Margin, Earnings from Operations, and Net Earnings](index=8&type=section&id=Adjusted%20Gross%20Margin%2C%20Earnings%20from%20Operations%2C%20and%20Net%20Earnings) Reconciliations show adjustments to GAAP gross margin, earnings from operations, and net earnings, primarily for amortization of intangible assets and finance leases, transaction and integration costs, restructuring costs, impairment charges, and nonqualified deferred compensation plan expense Reconciliation of Non-GAAP Measures to GAAP (Q3 and YTD 2025 vs 2024) | Metric | Three Months Ended Sep 30, 2025 (GAAP) (in thousands USD) | Three Months Ended Sep 30, 2025 (Adjusted) (in thousands USD) | Nine Months Ended Sep 30, 2025 (GAAP) (in thousands USD) | Nine Months Ended Sep 30, 2025 (Adjusted) (in thousands USD) | | :------------------------------------ | :------------------------------------- | :--------------------------------------- | :------------------------------------ | :-------------------------------------- | | Gross Margin | $95,453 | $96,192 | $276,734 | $278,890 | | Earnings from Operations | $54,579 | $59,710 | $157,036 | $171,729 | | Net Earnings | $40,289 | $43,982 | $115,620 | $125,560 | | Net Earnings Per Common Share - Diluted | $1.24 | $1.35 | $3.54 | $3.84 | [EBITDA and Adjusted EBITDA](index=9&type=section&id=EBITDA%20and%20Adjusted%20EBITDA) GAAP net earnings are reconciled to EBITDA by adding back income taxes, interest, and depreciation, with Adjusted EBITDA further including non-cash compensation and various one-time costs Reconciliation of GAAP Net Earnings to EBITDA and Adjusted EBITDA (Q3 and YTD 2025 vs 2024) | Metric | Three Months Ended Sep 30, 2025 (in thousands USD) | Three Months Ended Sep 30, 2024 (in thousands USD) | Nine Months Ended Sep 30, 2025 (in thousands USD) | Nine Months Ended Sep 30, 2024 (in thousands USD) | | :------------------------------------ | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Net Earnings - as reported | $40,289 | $33,837 | $115,620 | $94,892 | | EBITDA | $66,060 | $58,823 | $190,789 | $172,326 | | Adjusted EBITDA | $71,447 | $64,379 | $206,961 | $187,515 | [Effective Income Tax Rate](index=9&type=section&id=Effective%20Income%20Tax%20Rate) The reconciliation of GAAP effective income tax rate to non-GAAP effective income tax rate primarily adjusts for the impact of ASU 2016-09, which relates to the recognition of excess tax benefits from share-based payments Reconciliation of GAAP to Non-GAAP Effective Income Tax Rate (Q3 and YTD 2025 vs 2024) | Metric | Three Months Ended Sep 30, 2025 (GAAP) (in thousands USD) | Three Months Ended Sep 30, 2025 (Adjusted) (in thousands USD) | Nine Months Ended Sep 30, 2025 (GAAP) (in thousands USD) | Nine Months Ended Sep 30, 2025 (Adjusted) (in thousands USD) | | :------------------------------------ | :------------------------------------- | :--------------------------------------- | :------------------------------------ | :-------------------------------------- | | Income Tax Expense | $11,755 | $11,776 | $33,375 | $34,269 | | Effective Tax Rate | 22.6% | 22.6% | 22.4% | 23.0% | [Free Cash Flow](index=10&type=section&id=Free%20Cash%20Flow) Free cash flow is reconciled from net cash provided by operating activities by subtracting capital expenditures and adding proceeds from the sale of assets Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow (Q3 and YTD 2025 vs 2024) | Metric | Three Months Ended Sep 30, 2025 (in thousands USD) | Three Months Ended Sep 30, 2024 (in thousands USD) | Nine Months Ended Sep 30, 2025 (in thousands USD) | Nine Months Ended Sep 30, 2024 (in thousands USD) | | :------------------------------------ | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Net Cash Provided by Operating Activities | $65,572 | $51,302 | $149,281 | $129,682 | | Capital Expenditures and Proceeds from Sale of Assets | $(14,891) | $(9,065) | $(26,866) | $(22,240) | | Free Cash Flow | $50,681 | $42,237 | $122,415 | $107,442 | [Corporate Information](index=4&type=section&id=Corporate%20Information) [Quarterly Conference Call](index=4&type=section&id=Quarterly%20Conference%20Call) Balchem Corporation will host a quarterly conference call on October 21, 2025, at 11:00 AM ET, with CEO Ted Harris and CFO Martin Bengtsson, to discuss Q3 2025 results - A quarterly conference call to review **Q3 2025 results** will be held on Tuesday, **October 21, 2025**, at **11:00 AM Eastern Time (ET)**[13](index=13&type=chunk) - The call will be hosted by **Ted Harris**, Chairman, President and CEO, and **Martin Bengtsson**, CFO, and can be accessed via dial-in or live webcast[13](index=13&type=chunk) [Segment Descriptions](index=4&type=section&id=Segment%20Descriptions) Balchem Corporation operates through three primary business segments: Human Nutrition and Health, Animal Nutrition and Health, and Specialty Products, each serving distinct markets with specialized products and solutions - Balchem Corporation reports **three business segments**: Human Nutrition and Health, Animal Nutrition and Health, and Specialty Products[14](index=14&type=chunk) - The Human Nutrition and Health segment delivers **customized food and beverage ingredient systems** and **key nutrients** to the food, supplement, and pharmaceutical industries[14](index=14&type=chunk) - The Animal Nutrition and Health segment manufactures and supplies products to **numerous animal health markets**[14](index=14&type=chunk) - The Specialty Products segment provides **specialty-packaged performance gases** for healthcare and other industries, and **chelated minerals** to the micronutrient agricultural market[14](index=14&type=chunk) [Forward-Looking Statements](index=4&type=section&id=Forward-Looking%20Statements) This release contains forward-looking statements about future events, subject to risks and uncertainties that could cause actual results to differ materially, with no obligation for public updates - The release contains **forward-looking statements** reflecting expectations or beliefs concerning future events, which involve **risks and uncertainties**[15](index=15&type=chunk) - These statements are based on currently available information and assumptions, but **actual results could differ materially** due to future events, risks, and potentially inaccurate assumptions beyond the company's control[15](index=15&type=chunk) - The company undertakes **no obligation to publicly update or revise** any forward-looking statements[15](index=15&type=chunk) [Contact Information](index=4&type=section&id=Contact%20Information) For further inquiries, contact Jacqueline Yarmolowicz at Balchem Corporation - Contact **Jacqueline Yarmolowicz** at Balchem Corporation for inquiries (Telephone: **845-326-5600**)[16](index=16&type=chunk)

Core Insights - Balchem Corporation reported strong financial results for the third quarter of 2025, with net sales reaching $267.6 million, a year-over-year increase of 11.5% [6][8] - The company achieved net earnings of $40.3 million, reflecting a 19.1% increase compared to the same quarter last year [6][8] - Adjusted EBITDA for the quarter was $71.4 million, up 11.0% from the prior year [6][8] Financial Performance - Net sales for the third quarter were $267.6 million, compared to $239.9 million in the prior year quarter, marking an increase of $27.6 million [5][6] - Gross margin increased to $95.5 million, up 11.8% from $85.4 million in the prior year [11] - Operating expenses rose to $40.9 million, an increase of $3.5 million from the previous year [11] Segment Performance - The Human Nutrition and Health segment generated record sales of $174.1 million, a 14.3% increase from the prior year [8][18] - The Animal Nutrition and Health segment reported sales of $56.4 million, a 6.6% increase year-over-year [9][18] - The Specialty Products segment achieved sales of $35.7 million, reflecting a 7.5% increase compared to the previous year [10][18] Cash Flow and Debt Management - Cash flows from operations were $65.6 million, with free cash flow amounting to $50.7 million [6][13] - The company made net repayments on its revolving debt of $36.0 million, reducing net debt to $88.9 million [6][13] Strategic Initiatives - Balchem received approvals to construct a new microencapsulation manufacturing facility in Orange County, NY, which will significantly increase production capacity [6] - The company reported positive outcomes from its sponsored research, including a significant study on choline intake [6]

Core Viewpoint - Balchem Corporation will hold a conference call on October 21, 2025, to discuss its third quarter 2025 results, with key executives participating [1][2]. Company Overview - Balchem Corporation develops, manufactures, and markets specialty ingredients aimed at enhancing health and well-being across various industries [4]. - The company operates through three business segments: Human Nutrition & Health, Animal Nutrition & Health, and Specialty Products [4]. - The Human Nutrition & Health segment focuses on customized food and beverage ingredient systems and key nutrients for food, supplement, and pharmaceutical applications [4]. - The Animal Nutrition & Health segment provides products for various animal health markets [4]. - Specialty Products offers specialty-packaged chemicals for healthcare and other industries, along with chelated minerals for the agricultural micronutrient market [4]. Conference Call Details - The conference call is scheduled for October 21, 2025, at 11:00 AM ET, with participation from the Chairman, President, CEO, and CFO [1]. - Third quarter results will be published before the market opens on the same day, and the press release will be available on the company website [2]. - Institutional investors and analysts can join the call via specific phone numbers, and a live webcast will be accessible to the public [3].

Core Viewpoint - Blachem (BCPC) has received an upgrade to a Zacks Rank 2 (Buy) due to an upward trend in earnings estimates, indicating a positive outlook for the company's stock price [1][3]. Earnings Estimates and Stock Price Movement - The Zacks rating system is based on changes in earnings estimates, which are strongly correlated with near-term stock price movements [4][6]. - Institutional investors utilize earnings estimates to determine the fair value of stocks, influencing their buying and selling actions, which in turn affects stock prices [4]. Blachem's Earnings Outlook - The recent upgrade for Blachem reflects an improvement in its underlying business, which is expected to drive the stock price higher as investors respond positively to this trend [5][10]. - For the fiscal year ending December 2025, Blachem is projected to earn $5.20 per share, with a 1% increase in the Zacks Consensus Estimate over the past three months [8]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with a strong historical performance, particularly for Zacks Rank 1 stocks, which have averaged a +25% annual return since 1988 [7]. - Blachem's upgrade to Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, indicating a strong potential for market-beating returns in the near term [10].

Company Overview - Balchem Corporation is a global specialty ingredient manufacturer focused on health and nutrition markets [2] - The company operates through three business segments: Human Nutrition & Health, Animal Nutrition & Health, and Specialty Products [2] Business Segments - The Human Nutrition & Health segment provides customized food and beverage ingredient systems and key nutrients for food, supplement, and pharmaceutical applications [2] - The Animal Nutrition & Health segment supplies products to various animal health markets [2] - Specialty Products segment offers specialty-packaged chemicals for healthcare and other industries, as well as chelated minerals for the micronutrient agricultural market [2] Upcoming Events - Balchem Corporation will present at the H.C. Wainwright 27 Annual Global Investment Conference on September 9, 2025, with key executives participating [1]

Company Performance - Balchem (BCPC) reported quarterly earnings of $1.27 per share, exceeding the Zacks Consensus Estimate of $1.25 per share, and up from $0.98 per share a year ago, representing an earnings surprise of +1.60% [1] - The company posted revenues of $255.47 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 1.41%, compared to $234.08 million in the same quarter last year [2] - Over the last four quarters, Balchem has surpassed consensus EPS estimates just once and topped consensus revenue estimates two times [2] Market Outlook - Balchem shares have declined approximately 6.7% since the beginning of the year, while the S&P 500 has gained 8.2% [3] - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] - The current consensus EPS estimate for the coming quarter is $1.36 on revenues of $261.58 million, and for the current fiscal year, it is $5.15 on revenues of $1.03 billion [7] Industry Context - The Chemical - Specialty industry, to which Balchem belongs, is currently ranked in the bottom 33% of over 250 Zacks industries, indicating potential challenges for stock performance [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5] - The current status of estimate revisions for Balchem translates into a Zacks Rank 3 (Hold), suggesting the shares are expected to perform in line with the market in the near future [6]

[PART I FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20FINANCIAL%20INFORMATION) [Financial Statements (unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) The unaudited condensed consolidated financial statements show a stronger financial position as of June 30, 2025, compared to year-end 2024, with increased assets, sales, and profitability Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 (unaudited) | December 31, 2024 | | :--- | :--- | :--- | | **Total current assets** | $364,855 | $313,770 | | **Total assets** | $1,678,247 | $1,575,371 | | **Total current liabilities** | $138,137 | $157,685 | | **Total liabilities** | $410,334 | $425,458 | | **Total stockholders' equity** | $1,267,913 | $1,149,913 | Condensed Consolidated Statements of Earnings Highlights (in thousands, except per share data) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | **Net sales** | $255,467 | $234,081 | $505,986 | $473,740 | | **Gross margin** | $93,113 | $82,994 | $181,281 | $164,508 | | **Earnings from operations** | $51,442 | $45,797 | $102,457 | $87,473 | | **Net earnings** | $38,278 | $32,069 | $75,331 | $61,055 | | **Net earnings per share - diluted** | $1.17 | $0.98 | $2.30 | $1.87 | Condensed Consolidated Statements of Cash Flows Highlights (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $83,709 | $78,380 | | **Net cash used in investing activities** | ($12,533) | ($13,596) | | **Net cash used in financing activities** | ($60,729) | ($64,210) | | **Increase (decrease) in cash** | $15,912 | ($709) | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=26&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management reported strong performance for Q2 and the first half of 2025, with net sales rising 9.1% and 6.8% respectively, driven by volume and mix growth across all segments Q2 2025 vs Q2 2024 Performance Summary (in thousands) | Metric | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | **Net sales** | $255,467 | $234,081 | 9.1% | | **Gross margin** | $93,113 | $82,994 | 12.2% | | **Earnings from operations** | $51,442 | $45,797 | 12.3% | | **Net earnings** | $38,278 | $32,069 | 19.4% | H1 2025 vs H1 2024 Performance Summary (in thousands) | Metric | H1 2025 | H1 2024 | % Change | | :--- | :--- | :--- | :--- | | **Net sales** | $505,986 | $473,740 | 6.8% | | **Gross margin** | $181,281 | $164,508 | 10.2% | | **Earnings from operations** | $102,457 | $87,473 | 17.1% | | **Net earnings** | $75,331 | $61,055 | 23.4% | - Sales growth in Q2 2025 was primarily driven by volume and mix, which contributed **8.4%** to the Human Nutrition & Health segment's **8.7%** growth and **7.7%** to the Animal Nutrition & Health segment's **13.1%** growth[95](index=95&type=chunk) - Cash flow from operations increased to **$83.7 million** in H1 2025 from **$78.4 million** in H1 2024, mainly due to higher net earnings, with **$38.6 million** used for stock repurchases and **$28.3 million** for dividend payments[111](index=111&type=chunk)[112](index=112&type=chunk)[113](index=113&type=chunk) [Segment Results](index=27&type=section&id=Segment%20Results) All three business segments reported increased net sales and operating earnings for both the three and six-month periods ended June 30, 2025 Net Sales by Segment (in thousands) | Segment | Q2 2025 | Q2 2024 | % Change | H1 2025 | H1 2024 | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Human Nutrition & Health | $160,773 | $147,928 | 8.7% | $319,230 | $300,672 | 6.2% | | Animal Nutrition & Health | $56,028 | $49,557 | 13.1% | $113,305 | $103,478 | 9.5% | | Specialty Products | $37,185 | $35,094 | 6.0% | $70,460 | $66,707 | 5.6% | Earnings from Operations by Segment (in thousands) | Segment | Q2 2025 | Q2 2024 | % Change | H1 2025 | H1 2024 | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Human Nutrition & Health | $38,342 | $33,367 | 14.9% | $76,316 | $66,624 | 14.5% | | Animal Nutrition & Health | $3,514 | $2,693 | 30.5% | $8,750 | $4,753 | 84.1% | | Specialty Products | $11,269 | $11,228 | 0.4% | $20,854 | $19,427 | 7.3% | - In late June 2025, the European Commission announced provisional anti-dumping duties on choline chloride imports from China, following a complaint lodged by Balchem Italia Srl, which is expected to impact the Animal Nutrition & Health segment[90](index=90&type=chunk) [Liquidity and Capital Resources](index=34&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity position strengthened, with cash and cash equivalents increasing to **$65.4 million** at June 30, 2025, from **$49.5 million** at year-end 2024 - Cash and cash equivalents increased by **$15.9 million** during the first six months of 2025, ending the period at **$65.4 million**[111](index=111&type=chunk) Cash Flow Summary - H1 2025 vs H1 2024 (in thousands) | Activity | H1 2025 | H1 2024 | | :--- | :--- | :--- | | **Operating Activities** | $83,709 | $78,380 | | **Investing Activities** | ($12,533) | ($13,596) | | **Financing Activities** | ($60,729) | ($64,210) | - The company repurchased **$38.6 million** of common stock in H1 2025, a significant increase from **$5.2 million** in H1 2024[111](index=111&type=chunk)[116](index=116&type=chunk) - As of June 30, 2025, the company had **$360 million** available under its 2022 Credit Agreement[115](index=115&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=36&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exposed to market risks from fluctuating interest rates on its revolving loan and from foreign currency exchange rate changes due to its international operations - A **100 basis point** increase or decrease in interest rates would result in an approximate **$1.9 million** change in annual interest expense[124](index=124&type=chunk) - The company is exposed to foreign currency exchange risk as the financial results of its foreign subsidiaries are translated into U.S. dollars for consolidation[125](index=125&type=chunk) - The company is exposed to commodity price risks for its primary raw materials and manages these exposures through pricing and operational means[124](index=124&type=chunk) [Controls and Procedures](index=36&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective as of June 30, 2025 - The CEO and CFO concluded that the company's disclosure controls and procedures were effective at a reasonable assurance level as of June 30, 2025[126](index=126&type=chunk) - No material changes were made to the internal controls over financial reporting during the quarter ended June 30, 2025[127](index=127&type=chunk) [PART II OTHER INFORMATION](index=36&type=section&id=PART%20II%20OTHER%20INFORMATION) [Legal Proceedings](index=36&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal proceedings in the normal course of business, with management not expecting a material adverse effect on its financial position or results - The company is party to various legal proceedings, but management believes the ultimate outcome will not have a material effect on its financial condition[76](index=76&type=chunk)[129](index=129&type=chunk) - A settlement was reached with the EPA and DOJ in January 2025 regarding alleged violations at the Verona, Missouri facility, involving a **$300 thousand** civil penalty and other community benefit projects[75](index=75&type=chunk) [Risk Factors](index=37&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2024 - No material changes in Risk Factors were identified compared to the Annual Report on Form 10-K for the year ended December 31, 2024[130](index=130&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=37&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During the second quarter of 2025, the company repurchased a total of **204,965** shares through open market purchases and shares withheld for employee tax settlements Share Repurchase Activity - Q2 2025 | Period | Total Shares Purchased | Average Price Paid Per Share | | :--- | :--- | :--- | | April 1-30, 2025 | 49,616 | $156.24 | | May 1-31, 2025 | 155,055 | $164.24 | | June 1-30, 2025 | 294 | $158.35 | | **Second Quarter Total** | **204,965** | | - Since the inception of the stock repurchase program in June 1999, a total of **3,379,862** shares have been repurchased out of a total authorization of **3,763,038** shares[131](index=131&type=chunk) [Other Information](index=38&type=section&id=Item%205.%20Other%20Information) During the fiscal quarter ended June 30, 2025, no directors or officers of the company adopted, modified, or terminated a Rule 10b5-1 trading arrangement - No directors or officers adopted, modified, or terminated a Rule 10b5-1 trading arrangement during Q2 2025[132](index=132&type=chunk) [Exhibits](index=39&type=section&id=Item%206.%20Exhibits) The report includes required certifications from the CEO and CFO pursuant to Rule 13a-14(a) and Section 1350, as well as Inline XBRL data files - Exhibits filed include CEO and CFO certifications (Exhibits 31.1, 31.2, 32.1, 32.2) and XBRL data files[133](index=133&type=chunk)

Financial Data and Key Metrics Changes - The company reported record quarterly consolidated revenue of $255 million, a 9.1% increase year-over-year [11] - GAAP earnings from operations reached $51 million, up 12.3% compared to the prior year [15] - Consolidated net income was $38 million, reflecting a 19.4% increase, translating to diluted net earnings per share of $1.17, up 19 cents or 19.4% year-over-year [12][17] - Adjusted EBITDA was a record $69 million, an increase of 11.2%, with an adjusted EBITDA margin of 27.1%, up 50 basis points from the prior year [12][16] Business Segment Performance - The Human Nutrition and Health segment generated record sales of $161 million, an increase of 8.7% from the prior year, with earnings from operations of $38 million, up 14.9% [17][18] - The Animal Nutrition and Health segment reported sales of $56 million, a 13.1% increase, with earnings from operations of $4 million, up 30.5% [19][20] - The Specialty Products segment achieved record sales of $37 million, a 6% increase, with earnings from operations of $11 million, up 0.4% [21][22] Market Data and Key Metrics Changes - Demand in the human nutrition and health segment is driven by trends towards nutrient-dense, high-protein, and low-sugar foods [5] - The European Commission's provisional antidumping duties on Chinese choline are expected to positively impact the animal nutrition segment [5][21] - The overall market for feed-grade choline in Europe is projected to grow at low single digits, influenced by protein production [32] Company Strategy and Industry Competition - The company is focused on expanding its scientific and clinical research pipeline, with over 20 active clinical studies aimed at evaluating the benefits of various nutrients [7] - A new $36 million microencapsulation manufacturing facility is planned to double production capacity and support growth initiatives [10][11] - The company aims to leverage its strong market positions and value-added product portfolio to navigate the evolving global trade environment [6][23] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to deliver results amid varying market conditions, highlighting a positive outlook for the second half of the year [23] - The company is well-positioned to manage through the current global trade environment, with a robust U.S. manufacturing footprint and minimal reliance on China [6] - Management noted that the demand picture for monogastric markets in Europe is stable, with potential for increased market share due to the antidumping duties [30][32] Other Important Information - Cash flows from operations were $47 million, with free cash flow of $41 million, and the company closed the quarter with $65 million in cash [17] - The effective tax rate for 2025 is expected to be between 22% and 23%, with a slight decrease anticipated in the second half of the year [58][59] Q&A Session Summary Question: Update on the macro environment and European monogastric demand - Management indicated that demand is relatively stable, with potential for increased market share due to antidumping duties [30][32] Question: Details on the new manufacturing facility - The facility is expected to double capacity and will be funded through existing cash resources and debt, with production anticipated to start in late 2027 to 2028 [44][45] Question: Status of VitaCholine ProFlo and strategic outlook - The product is being integrated into multivitamin lines, with positive reception, and the company is evolving towards a stronger focus on health-related products [53][52] Question: Impact of tariffs and update on CureMark - Tariffs have increased the cost impact to approximately $25 million, but the company is managing this through supply chain adjustments and pricing strategies [62] - CureMark is preparing to file a BLA, with no further specifics available at this time [66] Question: Breakdown of growth in Human Nutrition and Health - The nutrients business grew at 8.8% and the food ingredient solutions business at 8.6%, indicating strong performance across both areas [80]

Financial Data and Key Metrics Changes - The company reported record quarterly consolidated revenue of $255 million, a 9.1% increase year-over-year [11] - GAAP earnings from operations reached $51 million, up 12.3% compared to the prior year [12] - Consolidated net income was $38 million, reflecting a 19.4% increase, translating to diluted net earnings per share of $1.17, up 19 cents or 19.4% year-over-year [12][18] - Adjusted EBITDA was a record $69 million, an increase of 11.2%, with an adjusted EBITDA margin of 27.1%, up 50 basis points from the prior year [12][17] Business Segment Performance - The Human Nutrition and Health segment generated record sales of $161 million, an increase of 8.7% from the prior year, with earnings from operations of $38 million, up 14.9% [18][19] - The Animal Nutrition and Health segment reported quarterly sales of $56 million, a 13.1% increase, with earnings from operations of $4 million, up 30.5% [20][21] - The Specialty Products segment achieved record quarterly sales of $37 million, a 6% increase, with earnings from operations of $11 million, up 0.4% [22][23] Market Data and Key Metrics Changes - Demand in the Human Nutrition and Health segment is driven by trends towards nutrient-dense, high-protein, and low-sugar foods [5] - The Animal Nutrition and Health segment is benefiting from improved market conditions and the European Commission's provisional antidumping duties on Chinese choline, expected to positively impact growth [5][21] - The Specialty Products segment is experiencing higher demand in both performance gases and plant nutrition businesses [6] Company Strategy and Industry Competition - The company is focused on expanding its scientific and clinical research pipeline, with over 20 active clinical studies aimed at evaluating the benefits of various nutrients [7] - A new $36 million microencapsulation manufacturing facility is planned to double production capacity, supporting growth in the fast-growing microencapsulation technologies [10][11] - The company is well-positioned to manage through the current global trade environment, with a manufacturing and sales model that minimizes reliance on China [6] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term growth outlook, citing strong market positions and a value-added product portfolio [24] - The company remains flexible to adjust to evolving market conditions and is optimistic about continued growth in the second half of the year [6][23] - Management highlighted the importance of ongoing investments in marketing and scientific research to support growth in human health and nutrition [50][51] Other Important Information - Cash flows from operations were $47 million, with free cash flow of $41 million, and the company ended the quarter with $65 million in cash [18] - The effective tax rate for 2025 is expected to be between 22% and 23%, with a slight decrease anticipated in the second half of the year [59] Q&A Session Summary Question: Update on European monogastric demand and growth drivers for Animal Nutrition and Health - Management indicated that European monogastric demand is stable, with potential for increased market share due to antidumping duties on Chinese suppliers [30][31] - Growth is expected from the ruminant side, particularly in dairy, and the companion animal business is also seen as a growth opportunity [34] Question: Details on the new manufacturing facility - The new facility is expected to double production capacity and is funded through existing cash resources and debt facilities, with production anticipated to start in late 2027 to 2028 [36][46] Question: Status of VitaCholine ProFlo and strategic outlook for human health - Management noted positive reception for VitaCholine ProFlo and emphasized the company's ongoing evolution towards health-focused products, while not shifting towards pharmaceuticals [54][52] Question: Impact of tariffs and update on CureMark - Tariffs have increased the cost impact to approximately $25 million, but the company is managing this through supply chain adjustments and pricing strategies [62] - CureMark is preparing to file a BLA, with the company having completed necessary manufacturing preparations [65]

Financial Performance - Q2 2025 - Sales increased by 9.1% to $255.5 million in Q2 2025, compared to $234.1 million in Q2 2024[54] - Adjusted EBITDA increased by 11.2% to $69.2 million in Q2 2025[56] - Adjusted Net Earnings increased by 16.8% to $41.6 million in Q2 2025, compared to $35.6 million in Q2 2024[58] - Adjusted EPS increased by 16.5% to $1.27 per share in Q2 2025, compared to $1.09 per share in Q2 2024[59, 60] Financial Performance - YTD 2025 - Sales increased by 6.8% to $506.0 million YTD 2025, compared to $473.7 million YTD 2024[63] - Adjusted EBITDA increased by 10.1% to $135.5 million YTD 2025[65] - Adjusted Net Earnings increased by 18.0% to $81.6 million YTD 2025, compared to $69.2 million YTD 2024[67] - Adjusted EPS increased by 17.5% to $2.49 per share YTD 2025, compared to $2.12 per share YTD 2024[69] Overall Company Financials - 2024 Sales were $954 million[9] - 2024 Adjusted EBITDA was $250 million with a margin of 26.3%[11]