Balchem(BCPC) - 2025 Q2 - Quarterly Results

Balchem Q2 2025 Earnings Release Financial Highlights Balchem reported record Q2 2025 financial results, driven by strong growth across all segments and strategic initiatives Q2 2025 Key Financial Metrics (YoY) | Metric | Q2 2025 ($M) | Q2 2024 ($M) | Change | | :--- | :--- | :--- | :--- | | Net Sales | $255.5M | $234.1M | +9.1% | | Net Earnings (GAAP) | $38.3M | $32.1M | +19.4% | | Adjusted EBITDA | $69.2M | $62.3M | +11.2% | | Diluted EPS (GAAP) | $1.17 | $0.98 | +19.4% | | Adjusted EPS | $1.27 | $1.09 | +16.5% | | Cash Flow from Operations | $47.3M | $45.0M | +5.1% | | Free Cash Flow | $40.7M | $38.4M | +6.0% | - Announced intent to build a new $36 million state-of-the-art food ingredient and nutraceutical micro-encapsulation manufacturing facility in Orange County, NY, expected to more than double the company's capacity for these technologies[4] - The European Commission announced provisional anti-dumping duties of 95.4% to 120.8% on choline chloride imports from China, effective July 1, 2025, expected to create a more level playing field[3][4] Consolidated Financial Results Robust financial health in Q2 and H1 2025, with strong net sales growth, expanded gross margin, and robust cash flow - Consolidated gross margin for Q2 2025 increased by 12.2% to $93.1 million, with the gross margin percentage rising 90 basis points to 36.4% compared to the prior year, primarily due to a favorable product mix[9] - Operating expenses increased by $4.5 million from the prior year quarter, mainly due to higher compensation-related costs and professional services[9] - Net interest expense decreased to $2.8 million in Q2 2025 from $4.2 million in Q2 2024, primarily due to lower outstanding borrowings[10] Consolidated Income Statement Consolidated Financial Results (unaudited, in thousands) | | Three Months Ended June 30, | Six Months Ended June 30, | | :--- | :--- | :--- | | | 2025 | 2024 | 2025 | 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 | | Diluted net earnings per share | $1.17 | $0.98 | $2.30 | $1.87 | | Adjusted EBITDA | $69,224 | $62,270 | $135,514 | $123,136 | | Adjusted net earnings | $41,561 | $35,577 | $81,578 | $69,161 | Segment Performance Net Sales by Business 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 Business Segment (in thousands) | Segment | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Human Nutrition & Health | $38,342 | $33,367 | +14.9% | | Animal Nutrition & Health | $3,514 | $2,693 | +30.5% | | Specialty Products | $11,269 | $11,228 | +0.4% | Financial Position (Balance Sheet) Selected Balance Sheet Items (in thousands) | Account | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Cash and Cash Equivalents | $65,427 | $49,515 | | Total Current Assets | $364,855 | $313,770 | | Total Assets | $1,678,247 | $1,575,371 | | Total Liabilities | $410,334 | $425,458 | | Stockholders' Equity | $1,267,913 | $1,149,913 | Cash Flow Statement Cash Flow Summary - Six Months Ended June 30 (in thousands) | Category | 2025 | 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) | | Cash and cash equivalents, end of period | $65,427 | $63,738 | - Significant cash uses in H1 2025 included $38.6 million for repurchases of common stock, $28.3 million for dividends paid, and $12.4 million for capital expenditures[20] Non-GAAP Financial Measures Reconciliation Non-GAAP financial measures are presented to clarify core operational performance by excluding inconsistent items Reconciliation of GAAP Net Earnings to Adjusted EBITDA (in thousands) | | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Net Earnings (GAAP) | $38,278 | $32,069 | $75,331 | $61,055 | | Add: Taxes, Interest, D&A | $24,494 | $26,161 | $49,398 | $52,448 | | EBITDA | $62,772 | $58,230 | $124,729 | $113,503 | | Add: Other Adjustments | $6,452 | $4,040 | $10,785 | $9,633 | | Adjusted EBITDA | $69,224 | $62,270 | $135,514 | $123,136 | Reconciliation of GAAP Net Earnings to Adjusted Net Earnings (in thousands) | | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Net Earnings (GAAP) | $38,278 | $32,069 | $75,331 | $61,055 | | Adjustments (pre-tax) | $4,588 | $5,416 | $9,269 | $12,330 | | Income Tax Adjustment | ($1,314) | ($1,908) | ($3,023) | ($4,224) | | Adjusted Net Earnings | $41,561 | $35,577 | $81,578 | $69,161 | Reconciliation to Free Cash Flow (in thousands) | | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Net cash from operating activities | $47,252 | $44,992 | $83,709 | $78,380 | | Capital expenditures & asset sales | ($6,554) | ($6,602) | ($11,975) | ($13,175) | | Free Cash Flow | $40,698 | $38,390 | $71,734 | $65,205 |