BCPC

Download the Complete Report Here Key Takeaways: Record revenue and improved sequential growth reinforce BOIL’s transition from commercial platform buildout toward scaled execution. BOIL reported record revenue of $1.4 million in 2Q26, up 28% y/y from $1.1 million and 11% sequentially from $1.3 million in 1Q26, a meaningful acceleration from the ~1% sequential increase reported last quarter. 1H26 revenue reached $2.7 million, up 26% from $2.1 million in 1H25 and equivalent to 59% of full-year 2025 revenue of $4.5 million. The quarter lifts BOIL’s annualized revenue run-rate to ~$5.6 million from roughly $5.0 million entering 2Q26, while BOIL continued to invest in the U.S. direct-sales infrastructure supporting larger strategic customers. We believe the combination of improved sequential revenue growth and broader enterprise activity supports the view that BOIL is moving further into the revenue-execution phase, with broader deployments and recurring consumption representing the next stage of scale. Gross margin moderated as BOIL absorbed early rollout and channel-transition costs, while commercial investment remained focused on supporting U.S. execution. Gross profit was $0.59 million in 2Q26 versus $0.62 million y/y, with gross margin declining to 42.2% from 56.3% in 2Q25 and 53.1% in 1Q26 as inventory and channel mix, early U.S. customer servicing costs, and new-market expansion weighed on profitability. Total operating expenses increased 27% y/y to $3.01 million from $2.37 million, driven primarily by a 63% increase in sales and marketing expense to $1.62 million from $0.99 million as BOIL expanded its U.S. direct-sales team, pilot activity, and customer training. G&A remained relatively stable at $1.16 million versus $1.18 million y/y, while R&D increased modestly to $0.23 million from $0.20 million. The expense mix remains concentrated on commercialization rather than product development, while management expects lower inventory costs and a larger contribution from direct U.S. sales to support gross-profit improvement as deployments scale. Commercial traction continues to broaden across food retail, fast food, and casual dining, providing multiple pathways for BOIL to scale recurring U.S. revenue. Recent progress across supermarket, fast-food and premium casual-dining customers, alongside distribution through Sysco Los Angeles, has expanded BOIL’s base of multi-site commercial activity. Product validation now spans 100+ U.S. locations, with several relationships moving beyond pilot activity into paid deployment and broader rollout. This broadening customer base strengthens the setup heading into 2H26, with location expansion, repeat orders and recurring consumption increasingly becoming the key indicators of execution. S. direct strategic accounts remain the primary growth focus, with customer validation now extending across more than 100 locations. BOIL indicated that direct U.S. work includes three large food operators collectively representing thousands of potential locations. The company has also streamlined parts of its distributor portfolio, discontinuing master-distribution agreements with Latitude in the U.S. and Ukraine and T&J Oil in Australia, while transitioning its Indian relationship with Deep Frying Solutions to a non-exclusive structure. Distribution remains an important part of the model, with 25 distributors covering more than 50 countries, but is increasingly positioned as a complement to direct selling rather than the primary commercial engine for large strategic accounts. This hybrid approach should give BOIL greater control over pricing, implementation and recurring customer economics for tier-one accounts, while continuing to use distributors for local logistics, smaller customers and geographies where direct infrastructure would be inefficient. Several strategic relationships are now moving beyond initial validation into paid deployment and broader multi-site rollout, providing early evidence of the direct-account model progressing toward recurring commercial usage. The expanded U.S. commercial organization should increasingly shift the focus from infrastructure buildout toward conversion efficiency. During its July management webinar, BOIL highlighted that the organization has grown from approximately 20 employees at year-end 2024 to ~45 currently, with most incremental hiring focused on sales, marketing and commercial execution, particularly in the U.S. Enterprise sales cycles can currently exceed six months across engagement, pilot, broader market testing and rollout, with the company targeting an average of approximately three months over time as reference customers and implementation experience accumulate. Against 2Q26 sales and marketing expense of $1.6 million, improving conversion speed and revenue productivity across the expanded organization should become increasingly important indicators of operating leverage. Customer economics remain central to adoption, with ROI complemented by operational benefits at the kitchen level. Illustrative company examples show annual net savings of approximately $8,640 per European restaurant and $9,458 per U.S. restaurant, with oil life extending from approximately 3-5 days to 21 days in the illustrated cases, while implementation requires no new equipment or material capex. Improved food consistency, easier fryer cleaning and lower waste further support adoption, which is important because enterprise rollout ultimately depends on both procurement-level economics and restaurant-level acceptance. Manufacturing capacity remains substantially ahead of current revenue, providing meaningful headroom for enterprise rollout without near-term capacity constraints. During the July webinar, BOIL indicated that existing manufacturing capabilities can support ~$100 million of annual sales, roughly 18x the current ~$5.6 million annualized revenue run-rate and materially above the >$50 million capacity previously discussed. BOIL can also add North American or other regional manufacturing as demand develops. The existing headroom is strategically important because broader enterprise conversion could translate into materially higher revenue without requiring a proportional manufacturing build, supporting stronger fixed-cost absorption as volumes scale. Operating investment remains ahead of the current revenue base, with improved gross-profit conversion becoming increasingly important to earnings leverage. BOIL reported a 2Q26 operating loss of $2.4 million versus $1.8 million y/y and a 1H26 operating loss of $4.5 million versus $3.5 million, reflecting continued commercial investment ahead of revenue scale. Net loss totaled $2.1 million, or $0.03 per share, versus $0.9 million, or $0.01 per share, although the y/y comparison was affected by approximately $1.7 million of non-cash warrant revaluation gains in 2Q25 versus roughly $0.3 million in 2Q26. As direct U.S. sales scale and gross margin improves, higher gross-profit dollars relative to the existing commercial cost base should become the key indicator of progress toward operating leverage. Working-capital dynamics reflect the timing of larger commercial activity, with receivable conversion providing an expected source of additional liquidity. Trade receivables increased to $3.1 million at June 30 from $1.7 million at year-end, due to a significant 2Q commercial shipment for which collection is expected in the ordinary course. Inventory remained comparatively stable at $2.3 million versus $2.3 million, despite the expanding commercial pipeline, suggesting the current commercial ramp has not required a disproportionate inventory build. As larger enterprise deployments scale, receivable timing and working-capital discipline should become increasingly important, while collection of the $3.1 million receivable balance should provide an additional source of near-term liquidity. The balance sheet continues to support near-term commercial execution; cash conversion is becoming more important as investment remains elevated. Cash and short-term deposits totaled $4.5 million at June 30 versus $8.8 million at December 31, while positive working capital remained $9 million and the current ratio was approximately 7.4x. Current assets totaled $10.5 million against $1.4 million of current liabilities, with shareholders’ equity of $12.3 million. 1H26 net cash used in operating activities increased modestly to approximately $4.3 million from $4.2 million y/y, reflecting continued investment in commercial scale. Importantly, spending remains concentrated on sales execution rather than manufacturing capex, while the elevated receivable balance provides an expected near-term source of cash as the underlying shipment is collected. The June 30 positive-EBITDA milestone was not triggered, leaving the $13 million cumulative-sales threshold as the principal remaining disclosed operating-linked contingent share milestone under the existing transaction structure. The 2H26 setup is increasingly centered on converting the commercial foundation into broader deployments, recurring revenue and improving unit economics. The company expects gross profit to improve as direct U.S. sales become a larger part of the mix, while key 2H26 execution indicators include expansion of the supermarket program beyond the additional 14 locations, progression of the existing ~70-restaurant casual-dining rollout, further penetration of the fast-food customer’s franchise network, additional Sysco-supported activity and repeat orders across existing deployments. With customer validation spanning 100+ U.S. locations, approximately 45 employees supporting the organization and manufacturing capabilities stated to support up to ~$100 million of annual sales, the focus increasingly shifts from building the platform toward increasing conversion, utilization and recurring revenue across the infrastructure already in place. Disclaimer: Exec Edge does not publish proprietary estimates, ratings, price targets, or investment recommendations. The valuation discussion below is illustrative only and is based on company filings, management commentary, and third-party data and estimates. It does not constitute a recommendation, price target, rating, or prediction of future pricing. BOIL continues to trade at a premium to more mature peers, reflecting its earlier commercialization stage and higher expected growth profile. Based on an enterprise value of $112 million and 2Q26 revenue of $1.4 million, or an annualized run-rate of roughly $5.6 million, BOIL trades at approximately 20x run-rate sales, down from ~33.6x at the time of our May update. This remains elevated relative to more mature restaurant-technology and food-ingredient peers, but BOIL is still an early-stage commercialization story where valuation is driven less by current revenue scale and more by the pace of multi-location rollout conversion, repeat ordering, gross-margin recovery and operating leverage as revenue expands, with valuation support increasingly dependent on revenue growth and operating leverage rather than further multiple expansion. The more relevant valuation framework is therefore revenue scaling into the infrastructure already in place. Holding the current $112 million enterprise value constant, $25 million of annual revenue would imply 4.5x EV/Sales, $50 million would imply 2.2x, $75 million would imply 1.5x and $100 million would imply 1.1x. These scenarios are illustrative rather than forecasts, but they highlight the potential for substantial multiple compression through revenue growth alone. Management indicated in July that existing manufacturing capabilities can support approximately $100 million of annual sales, materially above the current ~$5.6 million run-rate, providing capacity for enterprise conversion without requiring a proportional near-term manufacturing build. Overall, BOIL remains an execution-driven valuation story, with the recent reset lowering the hurdle for further rerating. Customer validation across 100+ U.S. locations, the ~70-restaurant casual-dining rollout, supermarket expansion and initial paid fast-food deployment provide a broader base for recurring revenue growth, while the direct-account model should improve control over rollout execution and customer economics. The key valuation drivers are now broader site penetration, repeat ordering, shorter sales cycles and recovery in gross margin from 42.2% toward the 50%+ levels achieved previously, which would improve absorption of the current $1.6 million quarterly sales and marketing base. Continued enterprise conversion, recurring reorder activity and improving operating leverage would provide increasing fundamental support for BOIL’s valuation as revenue scales into the commercial and manufacturing infrastructure already in place. Read Exec Edge’s Initiation on Beyond Oil Ltd. Here Subscribe to our Weekly Newsletter to Receive All Research Contact: Executives-Edge.com [email protected] The post Beyond Oil: Record Revenue & U.S. Direct-Sales Expansion Fuel Scaling Phase – Quarterly Update Report appeared first on ExecEdge.

This article first appeared on GuruFocus. Release Date: July 31, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Record quarterly consolidated sales of $284 million, up 11.2% year-over-year, driven by broad-based growth across all three segments. Record quarterly adjusted EBITDA of $78 million, up 12.6%, with adjusted EBITDA margin of 27.4%. Strong growth in Animal Nutrition & Health, with sales up 15% and earnings from operations up 48.7%, driven by adoption of rumen-protected technologies and recovery in European monogastric business. Specialty Products delivered record quarterly sales of $41 million, up 8.9%, and record earnings from operations of $13 million, up 14.4%. Completed refinancing of revolving credit facility, increasing borrowing capacity from $550 million to $650 million and extending maturity to 2031, enhancing financial flexibility. Repurchased approximately $29 million of common stock during the quarter, reflecting commitment to shareholder returns. Achieved 28th consecutive quarter of year-over-year growth in adjusted EBITDA, demonstrating consistent execution and resilience. Human Nutrition & Health segment delivered record sales of $177 million, up 10%, driven by strong demand for nutrients and food ingredients. Gross margin expanded to 36.5% of sales, up 10 basis points, despite higher input costs. Net debt remains low at $89 million with leverage ratio of 0.3, providing ample capacity for growth investments. Higher manufacturing input costs, including those related to the conflict in the Middle East, partially offset margin gains. Effective tax rate increased to 22.8% from 21.9% in the prior year, primarily due to lower tax benefits from stock-based compensation. Operating expenses increased to $44 million from $42 million, driven by higher compensation-related costs. Cash flows from operations were relatively low at $4.7 million, though free cash flow was $36 million. The company faces ongoing uncertainty from geopolitical conflicts, which could impact input costs and supply chains. Interest expense, while lower, remains a cost, and the new credit facility has a variable rate that could rise with future Fed rate hikes. The European monogastric business, while improving, is still recovering from past anti-dumping issues, and the full benefit may take time to materialize. The company's growth is partly dependent on consumer trends in 'better-for-you' products, which could shift with changing consumer preferences. The pending results of the MD Anderson study on choline and cognition are uncertain, and if unfavorable, could impact future marketing claims. Despite strong performance, the company faces competitive pressures in the nutrient market, requiring ongoing investment in science and marketing to maintain differentiation. Warning! GuruFocus has detected 1 Warning Sign with BCPC. Is BCPC fairly valued? Test your thesis with our free DCF calculator. Q: How does Balchem evaluate new products for its minerals and nutrients portfolio, and how does it decide between building versus buying to enter new markets?A: Ted Harris, Chairman, President and CEO, explained that the decision hinges on how close the technology is to Balchem's core. For example, Optifolin Plus was developed internally because its backbone is choline, leveraging existing expertise, while vitamin K2 was acquired via Kappa Solutions due to its distinct technology. Key evaluation criteria include existing sound science, points of differentiation (such as patented encapsulation), and market penetration potential. Balchem prefers nutrients that are lesser-known with high growth opportunities, allowing it to drive awareness and above-market growth rates. Q: Can you provide an update on clinical trials and how Balchem uses the resulting data to grow the business?A: Ted Harris noted that Balchem invests significantly in clinical studies to help customers make claims for their products. At any time, the company has 20-25 ongoing studies. In the last quarter, four studies were publishedone on Optifolin Plus, two on K2 Vital, and one on VitaCholine. Ted highlighted an exciting upcoming study with MD Anderson, University of Texas, and MIT on adult cognition involving the APOE4 gene linked to Alzheimer's. The study is completed and expected to be published in the next couple of months, with results potentially demonstrating high-dose choline's impact on dementia development. Q: How do you expect sales and promotional strategies to shift over the remainder of 2026, particularly within the Human Nutrition & Health segment?A: Ted Harris discussed Balchem's "always on" consumer engagement model, combining omni-channel marketing, influencer engagement, consumer PR, and sports partnerships. This effort has generated over a billion consumer impressions in the last year and a half. Marketing strategies are dynamic, with shifts toward targeting GLP-1 users for nutrient-rich snacks and meal replacements, and doubling down on soccer/European football sports partnerships. Ted emphasized that Balchem now has one of the leading nutrient marketing teams globally, driving the growth rates achieved over recent years. Q: What is the expected effective interest rate on the new credit facility, and how will the effective tax rate trend for the remainder of 2026?A: Martin Benkston, CFO, explained that the new facility maintains a floating rate structure, currently around 4.5%, which adjusts with Fed rate changes. The refinancing improved pricing by 10 basis points across the board and 22.5 basis points for higher leverage tiers. On taxes, the year-to-date effective tax rate is approximately 23%, with expectations to finish the year in the 22.5% to 23% range. Q: Can you delineate the ANH segment's strong performance between volume and pricing actions taken in April, and provide an update on European monogastric trends?A: Martin Benkston stated that the 15% growth in ANH was roughly half volume-driven and half price-driven. In Europe, the successful anti-dumping duties implemented at the end of December 2025 have restored a level playing field. The business is regaining lost share, with volumes returning and price recovery improving each quarter. Ted Harris added that the ruminant part of the portfolio, which carries higher margins and more science, grew about 20% in the quarter, almost entirely from volume growth, reflecting successful market penetration. Q: What drove the record second-quarter results, and how is Balchem positioned for continued growth?A: Ted Harris highlighted broad-based growth across all three segmentsHuman Nutrition & Health, Animal Nutrition & Health, and Specialty Productsdriven by market penetration of specialty nutrients and favorable "better-for-you" trends. The company delivered record quarterly sales of $284 million (up 11.2%), record adjusted EBITDA of $78 million (up 12.6%), and record adjusted net earnings of $48 million (up 15.7%). This marked the 28th consecutive quarter of year-over-year adjusted EBITDA growth, reflecting the strength of Balchem's unique portfolio and consistent execution. Q: What capital allocation actions did Balchem take during the quarter?A: Ted Harris noted the completion of refinancing the revolving credit facility, increasing borrowing capacity from $550 million to $650 million and extending maturity to 2031. This strengthens financial flexibility for innovation, capacity expansion, and acquisitions. Additionally, Balchem repurchased approximately $29 million of common stock in Q2 and $114 million over the trailing 12 months, demonstrating continued commitment to disciplined capital allocation and shareholder value creation. Q: How did the Specialty Products segment perform, and what is the outlook?A: Martin Benkston reported record quarterly sales of $41 million (up 8.9%) for Specialty Products, driven by healthy growth in both performance gases and plant nutrition businesses. Record earnings from operations of $13 million (up 14.4%) were driven primarily by higher sales. The segment remains well positioned for continued success, supported by favorable market positions and disciplined execution. Q: What is the current leverage and cash position after the quarter?A: Martin Benkston reported net debt of $89 million with an overall leverage ratio of 0.3 on a net debt basis. Cash flows from operations were $47 million, with free cash flow of $36 million, and the company closed the quarter with $63 million of cash on the balance sheet. Net interest expense decreased by $1 million to $2 million, driven by lower outstanding borrowings and lower interest rates. Q: How is Balchem addressing higher input costs related to the Middle East conflict?A: Ted Harris acknowledged that consolidated growth and healthy margins were achieved despite higher input costs related to the Middle East conflict. The company managed this through mitigating actions and growth-driven operating leverage. In the ANH segment specifically, year-over-year margin improvement was delivered despite these higher costs, reflecting effective cost management and operational efficiencies. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Record quarterly results were driven by broad-based growth across all three segments, fueled by market penetration of specialty nutrients and 'better-for-you' food trends. Human Nutrition and Health (HNH) performance was bolstered by heightened consumer interest in high-protein, high-fiber, and lower-sugar products. Animal Nutrition and Health (ANH) saw significant margin improvement and 15% sales growth, aided by the adoption of encapsulated rumen-protected technologies in the dairy market. The European monogastric business realized higher volumes and margins following the implementation of EU antidumping duties, which restored a level playing field. Specialty Products growth was primarily supported by solid volume and pricing gains within the performance gases business. Management mitigated higher input costs stemming from Middle East conflicts through strategic pricing actions and growth-driven operating leverage. Management expects continued growth in HNH by leveraging an 'always-on' consumer engagement model and targeting specific demographics like GLP-1 users. The company anticipates the publication of a pilot clinical study on choline's impact on Alzheimer's and dementia, which could drive significant future demand. Capital allocation remains focused on a balanced approach, including innovation, capacity expansion, and strategic acquisition opportunities supported by a new $650 million credit facility. The effective tax rate for the remainder of 2026 is projected to trend between 22.5% and 23%. Future growth in the ruminant portfolio is expected to be driven by volume as the company continues to build science-based awareness for its precision-release technologies. Completed a refinancing of the revolving credit facility, increasing capacity to $650 million and extending maturity to 2031 with improved pricing grids. Repurchased approximately $29 million of common stock during the quarter, totaling $114 million over the trailing 12 months. The effective tax rate increased to 22.8% from 21.9% in the prior year, primarily due to lower tax benefits from stock-based compensation. Net debt stands at $89 million with a low leverage ratio of 0.3, providing significant flexibility for future M&A. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management prioritizes products with sound existing science and clear points of differentiation, such as unique encapsulation or patent protection. The company targets 'niche' nutrients with low market awareness to drive above-market growth through education and penetration. The decision to build versus buy depends on proximity to core technology; internal development is preferred for adjacent technologies, while acquisitions are used for distinct platforms. Balchem maintains 20 to 25 ongoing studies to provide customers with scientific evidence for product claims and marketing. A key study with MD Anderson on adult cognition and the APOE4 gene is completed and expected to be published within the next few months. Positive results from the choline-cognition study are expected to lead to larger, more definitive trials to reinforce the nutrient's clinical value. The company has shifted toward an omnichannel model including influencer engagement and sports partnerships, generating over a billion impressions in 18 months. Marketing efforts are being dynamically adjusted to target GLP-1 users for snacks and meal replacements as consumer behaviors evolve. Growth was roughly split between volume and pricing, with the ruminant business specifically seeing 20% growth driven almost entirely by volume. The European recovery is progressing as expected, with share gains and price recovery continuing every quarter since the antidumping duties began.

MONTVALE, N.J., July 31, 2026 (GLOBE NEWSWIRE) -- Balchem Corporation (NASDAQ: BCPC) today reported financial results for its 2026 fiscal second quarter ended June 30, 2026. For the quarter, the Company reported net sales of $284.0 million, net earnings of $44.6 million, adjusted EBITDA(a) of $77.9 million, and free cash flow(a) of $36.2 million. Ted Harris, Chairman, President and CEO of Balchem, said, “The second quarter was another very strong quarter for Balchem with healthy growth in all three of our reporting segments. On a consolidated basis, we delivered record quarterly net sales, net earnings, and adjusted EBITDA, as well as solid cash flows.” Second Quarter 2026 Financial Highlights: Net sales were $284.0 million, an increase of 11.2% from the prior year quarter. GAAP net earnings were $44.6 million, an increase of 16.6% from the prior year quarter. Adjusted EBITDA was $77.9 million, an increase of 12.6% from the prior year quarter. GAAP earnings per share were $1.39 compared to $1.17 in the prior year quarter and adjusted earnings per share(a) were $1.49 compared to $1.27 in the prior year quarter. Cash flows from operations were $46.7 million, with free cash flow(a) of $36.2 million. Excellent sales and earnings from operations growth in all three of our reporting segments. Recent Highlights: On July 24, 2026, we entered into an amendment to our existing credit agreement, that was due July 27, 2027, with lenders in the form of a senior secured revolving credit facility, now due July 24, 2031. This amendment increased the allowed borrowing from $550 million to $650 million, and expanded the company's ability to fund growth, innovation, and acquisitions. Balchem repurchased $29 million of common stock during the second quarter and $114 million over the trailing twelve months, reflecting the Company's balanced capital allocation strategy and commitment to long-term shareholder value creation. Mr. Harris said, “I am extremely pleased with our second quarter financial performance and the strong execution around our strategic priorities across our businesses.” Mr. Harris added, “These excellent first half of 2026 results continue the strong growth momentum we have built over the years and we remain excited about the future outlook of our company.” Financial Results for the Second Quarter of 2026: The Human Nutrition and Health segment generated record quarterly sales of $176.9 million, an increase of $16.1 million, or 10.0%, compared to the prior year quarter. The increase was driven by higher sales within both the nutrients business and the food ingredients and solutions businesses. Record earnings from operations for this segment of $42.4 million increased $4.0 million, or 10.5%, compared to $38.3 million in the prior year quarter, primarily due to the aforementioned higher sales and favorable mix, partially offset by certain higher manufacturing input costs and higher operating expenses. 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 $45.9 million, compared to $41.4 million in the prior year quarter, an increase of 10.9%. The Animal Nutrition and Health segment generated quarterly sales of $64.5 million, an increase of $8.4 million, or 15.0%, compared to the prior year quarter. The increase was driven by higher sales in both the monogastric and ruminant species markets. Second quarter earnings from operations for this segment of $5.2 million increased $1.7 million, or 48.7%, compared to $3.5 million in the prior year quarter, primarily due to the aforementioned higher sales, partially offset by certain higher manufacturing input costs and higher operating expenses. 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 $5.6 million compared to $3.8 million in the prior year quarter, an increase of 47.7%. The Specialty Products segment generated record quarterly sales of $40.5 million, an increase of $3.3 million, or 8.9%, compared to the prior year quarter, due to higher sales in both the performance gases and plant nutrition businesses. Record earnings from operations for this segment of $12.9 million increased $1.6 million, or 14.4%, compared to $11.3 million in the prior year quarter, primarily driven by the aforementioned higher sales and favorable mix, partially offset by certain higher manufacturing input costs and higher operating expenses. Excluding the effect of non-cash expense associated with amortization of acquired intangible assets and other adjustments, record adjusted earnings from operations for this segment were $13.9 million, compared to $12.4 million in the prior year quarter, an increase of 12.1%. Record consolidated quarterly gross margin of $103.7 million increased by $10.6 million, or 11.4%, compared to $93.1 million for the prior year comparable period. Gross margin as a percentage of sales was 36.5% compared to 36.4% in the prior year period, an increase of 10 basis points, primarily due to sales growth and manufacturing efficiencies, partially offset by certain higher manufacturing input costs. Operating expenses of $44.5 million for the quarter increased $2.8 million from the prior year comparable quarter, primarily due to higher compensation-related costs. Net interest expense was $1.9 million and $2.8 million in the second quarters of 2026 and 2025, respectively. The decrease in interest expense was primarily due to lower outstanding borrowings and lower interest rates. Our effective tax rates for the three months ended June 30, 2026 and 2025 were 22.8% and 21.9%, respectively. The increase in the effective tax rate was primarily due to lower tax benefits from stock-based compensation. Second quarter cash flows provided by operating activities were $46.7 million and free cash flow was $36.2 million. Net working capital of $242.7 million as of June 30, 2026 included a cash balance of $63.2 million. Significant cash payments during the quarter included repurchases of common stock of $28.8 million, income taxes paid of $27.8 million, net debt payments of $17.0 million, and capital expenditures and intangible assets acquired of $10.9 million. Outstanding debt on our revolving loan was $152.0 million as of June 30, 2026 and our net debt (b) was $88.8 million, with an overall leverage ratio (c) on a net debt basis of 0.3 times. Ted Harris said, “The Balchem team delivered another strong quarter in Q2 of 2026, and we remain confident in the long-term growth outlook for our company as we continue to execute our strategic growth initiatives.” Quarterly Conference Call A quarterly conference call will be held on Friday, July 31, 2026, at 11:00 AM Eastern Time (ET) to review second quarter 2026 results. Ted Harris, Chairman, President and CEO and Martin Bengtsson, CFO will host the call. Institutional investors, analysts and other members of the financial community are invited to join the live call by dialing +1-833-461-5787 (USA/Canada toll free) or +1-585-542-9983 (International Toll), and referencing Meeting ID: 980453675, five minutes prior to the scheduled start time of the conference call. Investors and the public are invited to listen to the live webcast at https://events.q4inc.com/attendee/980453675. The conference call will be available for replay shortly after the conclusion of the call at https://events.q4inc.com/attendee/980453675 for one year. 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) ($ in 000’s) Non-GAAP Financial Information In addition to disclosing financial results in accordance with United States (U.S.) generally accepted accounting principles (GAAP), this earnings release contains non-GAAP financial measures that we believe are helpful in understanding and comparing our past financial performance and our future results. The non-GAAP financial measures in this press release include adjusted gross margin, adjusted earnings from operations, adjusted net earnings and the related adjusted diluted per share amounts, EBITDA, adjusted EBITDA, adjusted income tax expense, free cash flow, net debt, and leverage ratio. The non-GAAP financial measures disclosed by the Company exclude certain business combination accounting adjustments and certain other items related to acquisitions, certain equity compensation, nonqualified deferred compensation plan expense (income), and certain one-time or unusual transactions. Detailed non-GAAP adjustments are described in the reconciliation tables below and also explained in the related footnotes. These non-GAAP financial measures should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP, and the financial results calculated in accordance with GAAP and reconciliations from these results should be carefully evaluated. Investors should not consider non-GAAP measures as alternatives to the related GAAP measures. Set forth below are reconciliations of the non-GAAP financial measures to the most directly comparable GAAP financial measures. (1) Amortization of intangible assets and finance leases: Amortization of intangible assets and finance leases consists of amortization of customer relationships, trademarks and trade names, developed technology, regulatory registration costs, patents and trade secrets, capitalized loan issuance costs, other intangibles acquired primarily in connection with business combinations, and finance leases. We record expense relating to the amortization of these intangibles and finance leases in our GAAP financial statements. Amortization expenses for our intangible assets and finance leases are inconsistent in amount and are significantly impacted by the timing and valuation of acquisitions. Consequently, our non-GAAP adjustments exclude these expenses to facilitate an evaluation of our current operating performance and comparisons to our past operating performance. (2) Transaction and integration costs: Transaction and integration costs related to acquisitions and divestitures are expensed in our GAAP financial statements. Management excludes these items for the purposes of calculating adjusted EBITDA and other non-GAAP financial measures. We believe that excluding these items from our non-GAAP financial measures is useful to investors because these are items associated with transactions that are inconsistent in amount and frequency causing comparison of current and historical financial results to be difficult. (3) Nonqualified deferred compensation plan (income) expense: Gains and losses on rabbi trust assets related to our nonqualified deferred compensation plan are recorded in other (income) expense while the offsetting increases or decreases to the deferred compensation liability are recorded within earnings from operations. The increases and decreases in the deferred compensation liability are driven by market volatility and are not a true reflection of company performance. We believe excluding these amounts from our non-GAAP financial measures is useful to investors because these items are inconsistent in amount based on market conditions causing comparison of current and historical financial results to be difficult. (4) Restructuring costs: Restructuring costs related to a reorganization of the business are recorded in our GAAP financial statements. Management excludes these items for the purposes of calculating adjusted EBITDA and other non-GAAP financial measures. We believe that excluding these items from our non-GAAP financial measures is useful to investors because these are items associated with transactions that are inconsistent in amount and frequency causing comparison of current and historical financial results to be difficult. (5) Income tax adjustment: For purposes of calculating adjusted net earnings and adjusted diluted earnings per share, we adjust the provision for (benefit from) income taxes to tax effect the taxable and deductible non-GAAP adjustments described above as they have a significant impact on our income tax (benefit) provision. Additionally, the income tax adjustment is adjusted for the impact of adopting ASU 2016-09, “Improvements to Employee Share-Based Payment Accounting” and uses our non-GAAP effective rate applied to both our GAAP earnings before income tax expense and non-GAAP adjustments described above. See Table 3 for the calculation of our non-GAAP effective tax rate. (6) Impact of ASU 2016-09: The primary impact of ASU No. 2016-09, "Improvements to Employee Share-Based Payment Accounting" ("ASU 2016-09"), was the recognition during the three and six months ended June 30, 2026 and 2025, of excess tax benefits as a reduction to the provision for income taxes and the classification of these excess tax benefits in operating activities in the consolidated statement of cash flows instead of financing activities. Management excludes this item for the purpose of calculating adjusted Income Tax Expense. We believe that excluding the item in our non-GAAP financial measures is useful to investors because it is inconsistent in amount and frequency causing comparison of current and historical financial results to be difficult.

In the first quarter of 2026, Balchem Corporation reported higher sales of US$270.71 million and net income of US$40.29 million year over year, while also completing a share repurchase of 159,539 shares for US$25.85 million under its December 2025 buyback program. The combination of earnings growth and disciplined capital returns via the buyback underscores how Balchem is using improving profitability to support shareholder-focused capital allocation. Next, we’ll examine how Balchem’s year-over-year increase in earnings per share may influence its existing investment narrative and outlook. Rare earth metals are the new gold rush. Find out which 33 stocks are leading the charge. To own Balchem, you generally need to believe in steady value creation from specialty nutrition, supported by disciplined capital allocation and continued product innovation. The latest quarter’s higher sales and earnings, alongside completed buybacks, support this thesis but do not materially change the near term focus on executing growth from the new microencapsulation facility or the key risk that slower innovation or shifting nutrition trends could pressure margins and limit future growth options. The first quarter 2026 earnings release is most relevant here, as it links directly to the higher earnings per share that the completed US$25.85 million buyback helps amplify. With sales up to US$270.71 million and diluted EPS from continuing operations rising to US$1.25 year over year, Balchem is entering this next phase of capacity expansion and tariff management from a position of higher profitability, which could either cushion or expose the impact of upcoming execution and market risks. Yet behind these solid numbers, investors should be aware of how any slowdown in successful product innovation could... Read the full narrative on Balchem (it's free!) Balchem's narrative projects $1.2 billion revenue and $203.9 million earnings by 2028. This requires 6.8% yearly revenue growth and a $61.1 million earnings increase from $142.8 million. Uncover how Balchem's forecasts yield a $191.00 fair value, a 19% upside to its current price. The most cautious analysts were assuming Balchem’s revenue would reach about US$1.2 billion and earnings US$185.2 million by 2029, so if you see Q1’s EPS lift and buyback progress differently, you may disagree with that more pessimistic path and want to compare how margin risks like underutilized new capacity could shift those expectations. Explore 2 other fair value estimates on Balchem - why the stock might be worth just $162.00! Don't just follow the ticker - dig into the data and build a conviction that's truly your own. A great starting point for your Balchem research is our analysis highlighting 4 key rewards that could impact your investment decision. Our free Balchem research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Balchem's overall financial health at a glance. Don't miss your shot at the next 10-bagger. Our latest stock picks just dropped: We've uncovered the 14 dividend fortresses yielding 5%+ that don't just survive market storms, but thrive in them. Uncover the next big thing with 28 elite penny stocks that balance risk and reward. This technology could replace computers: discover 26 stocks that are working to make quantum computing a reality. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include BCPC. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Achieved record first-quarter results driven by the 27th consecutive quarter of year-over-year adjusted EBITDA growth, reflecting consistent execution across all three reporting segments. Human Nutrition & Health (HNH) performance was bolstered by the 'better-for-you' consumer shift toward nutrient-dense, high-protein, and low-sugar formulations where Balchem provides specialized expertise. Animal Nutrition & Health (ANH) growth was supported by increased market penetration of rumen-protected encapsulated nutrients and recovering demand in the European monogastric market. Specialty Products benefited from a return to healthy market conditions in Performance Gases and successful geographic expansion within the Plant Nutrition business. Management attributes gross margin expansion of 210 basis points to favorable product mix, manufacturing efficiencies, and effective price-inflation management despite rising input costs. Strategic investments in global sales and marketing infrastructure are driving higher growth rates in international regions compared to the domestic U.S. base. Management anticipates continued quarterly year-over-year growth on a consolidated basis despite a dynamic geopolitical and macroeconomic environment. The company expects modest margin compression in the near term due to a timing lag between rising petrochemical-based input costs and planned pricing adjustments. Guidance assumes potential supply chain disruptions and freight cost increases stemming from ongoing conflict in the Middle East, which the company plans to mitigate via global procurement expertise. Strategic focus remains on expanding the 'power brand' portfolio, specifically targeting the high-growth nutritional beverage and adult cognitive health markets. The company maintains a 23% effective tax rate for long-term planning, though Q2 is expected to trend slightly higher before modulating in the second half of 2026. A new peer-reviewed study in the journal 'Nutrients' demonstrated that VitaCholine significantly enhances functional connectivity in the working memory network of post-menopausal women. The company surpassed its 2030 greenhouse gas reduction goal early, achieving a 31% reduction in Scope 1 and 2 emissions against a 2020 baseline. Operating expenses increased to $45 million, primarily driven by higher compensation-related costs, professional services, and strategic investments in international expansion. The industrial business, while not a material contributor, is seeing increased demand due to heightened domestic oil and petroleum production activity. Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Branded ingredients currently represent approximately 40% to 50% of the Human Nutrition & Health segment and are growing faster than the overall portfolio. Management is shifting focus from traditional supplements to the nutritional beverage and meal replacement markets, which offer higher volume opportunities without the limitations of pill formats. Rising raw material and freight costs are expected to be passed on to customers, though a mathematical 'dilutive impact' on margin percentage may occur even as margin dollars grow. The European monogastric business saw double-digit volume improvement following EU anti-dumping duties, providing a buffer against current macro headwinds. The company plans to invest in additional studies to validate VitaCholine's benefits for the 'huge' adult cognition market, moving beyond its established success in the prenatal category. Marketing efforts will be repositioned to target aging adults concerned with cognitive health, utilizing digital media and influencer strategies similar to successful athletic partnerships. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here.

Image source: The Motley Fool. Thursday, April 30, 2026 at 11 a.m. ET Chairman, President, and Chief Executive Officer — Ted Harris Chief Financial Officer and Treasurer — Martin Bengtsson Need a quote from a Motley Fool analyst? Email [email protected] Ted Harris: Thanks, Martin. Good morning, and welcome to our conference call. We were extremely pleased with the financial results for the quarter and the overall performance of our company as we kicked off the new year with positive momentum from the strong performance throughout 2025. Our healthy growth continues to be fueled by ongoing market penetration of our unique portfolio of specialty nutrients and delivery systems, and the favorable “better for you” trends within the food and nutrition markets that are well aligned with our food ingredient formulation systems and capabilities. We delivered record first quarter consolidated sales, adjusted EBITDA, adjusted net earnings, and adjusted EPS, as well as strong cash flows. We also delivered year-over-year sales and earnings growth in all three of our reporting segments. The first quarter of 2026 was the twenty-seventh consecutive quarter of quarterly year-over-year growth in adjusted EBITDA for Balchem Corporation. We are very proud of this accomplishment, particularly in light of the market environment within which we have operated over the last twenty-seven quarters. Before we get into more detail on the quarter, I would like to make a few comments about the overall market environment, including the evolving geopolitical and macroeconomic situation, as well as some of the progress we have made on several important strategic initiatives. We continue to see healthy demand across the vast majority of our end markets. Our Human Nutrition and Health segment continues to perform very well, driven by healthy demand for both our unique portfolio of minerals, nutrients, and vitamins and our food ingredients and solutions, which are benefiting from trends toward nutrient-dense high-protein, high-fiber, and low-sugar or “better for you” foods where our nutrient portfolio and our formulations expertise bring considerable value to our customers. In the Animal Nutrition and Health segment, we delivered another quarter of year-over-year growth on improved demand in both our monogastric and ruminant businesses as a result of further market penetration of our rumen-protected precision release encapsulated nutrient portfolio and the ongoing improvement of market conditions in the European monogastric market. And we remain encouraged by the overall performance of our Animal Nutrition and Health product portfolio. Within our Specialty Products segment, both our performance gases and our plant nutrition businesses are performing well, driven primarily by higher demand within performance gases as a result of healthier market conditions and successful margin management and geographic expansion growth within plant nutrition. As we have shown over the years, we have been able to deliver strong historical performance while facing significant market volatility. We believe we remain well positioned to effectively manage through this current geopolitical and macroeconomic environment as well. We are once again entering a period of significant inflation, largely petrochemical-based and primarily impacting our Animal Nutrition and Health segment, as well as potential supply chain disruptions due to the ongoing conflict in the Middle East. We will once again leverage our robust global supply chain, our procurement expertise, and our strong market positions to raise prices where necessary to help manage through this dynamic market environment. While we are likely to experience some modest margin compression resulting from the timing lag that occurs between input cost inflation and pricing adjustments, particularly within our Animal Nutrition and Health segment, we do expect to deliver continued quarterly year-over-year growth on a consolidated basis over the coming quarters. We will continue to monitor the developments closely and adjust accordingly as we have done effectively in the past. Additionally, I would like to share some significant progress we have made on several important strategic initiatives that will further support our future growth. A newly published peer-reviewed research study using functional magnetic resonance imaging, a noninvasive safe neuroimaging procedure that measures brain activity by detecting changes in blood flow and oxygenation, was published in the peer-reviewed journal Nutrients. This important study examined the effects of Balchem’s Vidacholine nutrient on working memory-related brain activation and functional connectivity in postmenopausal women. The results showed that Vidacholine intake significantly enhanced functional connectivity within the working memory network, improving brain efficiency within three hours of consumption. This study helps highlight the benefits of Vidacholine across different life stages, with previous research showing that Vidacholine supports fetal brain development during pregnancy and lactation with lasting effects beyond birth. It also suggests that Vidacholine may help enhance cognitive health in older adults. We are excited about these results, and we will continue to invest in both research and marketing around Vidacholine to raise awareness and drive market penetration of this important essential nutrient. Additionally, on April 22, Earth Day, we released our 2025 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. We are very proud of the progress made on our 2030 sustainability goals to reduce both greenhouse gas emissions and water usage by 25% compared to our 2020 baseline. In 2025, we successfully reduced scope one and two greenhouse gas emissions by approximately 31%, surpassing our 2030 goal, and we reduced water withdrawal by approximately 16%, showing substantial progress toward our water usage reduction objective. Now regarding the first quarter financial results. This morning, we reported record quarterly consolidated revenue of $271 million, which was 8.1% higher than the prior-year quarter. We delivered record quarterly GAAP earnings from operations of $56 million, an increase of 9% versus the prior year. Consolidated net income closed the quarter at $40 million, an increase of 8.7%. This quarterly net income translated to diluted net earnings per share of $1.25 on a GAAP basis, up 10.6%. On an adjusted basis, we delivered record quarterly adjusted EBITDA of $74 million, an increase of 12.1%. Our quarterly adjusted net earnings were $43 million, an increase of 7.4%, which translated to $1.33 per diluted share, up 9%. Overall, it was an excellent quarter for Balchem Corporation, marked by strong financial results and meaningful progress made on our strategic priorities. With that, I am now going to turn the call back over to Martin to go through the first quarter financial results in more detail and the results for each of our business segments. Martin Bengtsson: Thank you, Ted. The first quarter was a strong start to 2026. Our record first quarter net sales of $271 million were 8.1% higher than the prior year, driven by strength across all three segments: Human Nutrition and Health, Animal Nutrition and Health, and Specialty Products. The impact from foreign currency exchange, driven primarily by the stronger euro, had a favorable impact to our sales growth of approximately 2% in the first quarter. Our gross margin dollars were $101 million, up 14.6%, and our gross margin percent expanded to 37.3% of sales, up 210 basis points. The gross margin performance was driven primarily by the sales growth and manufacturing efficiencies, partially offset by raw material inflation. Consolidated operating expenses for the first quarter were $45 million as compared to $37 million in the prior year. The increase was primarily due to higher compensation-related costs and an increase in professional services. GAAP earnings from operations for the first quarter were a record $56 million, an increase of 9%. On an adjusted basis, as detailed in our earnings release this morning, record non-GAAP earnings from operations of $61 million were up 9.5%. Adjusted EBITDA was a record $74 million, an increase of 12.1%, with an adjusted EBITDA margin rate of 27.4%. Net interest expense for the first quarter was $2 million, a decrease of $1 million, primarily driven by lower outstanding borrowings and lower interest rates. Our net debt was $96 million with an overall leverage ratio on a net debt basis of 0.3. The effective tax rates for 2026 and 2025 were 23.3% and 22.7%, respectively. The increase in the effective tax rate on the prior year was primarily due to an increase in certain state taxes. Consolidated net income closed the quarter at $40 million, up 8.7%. This quarterly net income translated into diluted net earnings per share of $1.25, a 10.6% increase. On an adjusted basis, our first quarter adjusted net earnings were $43 million, an increase of 7.4%, which translated to $1.33 per diluted share. Cash flows from operations were $40 million with free cash flow of $34 million, and we closed out the quarter with $73 million of cash on the balance sheet. As we look at the first quarter from a segment perspective, our Human Nutrition and Health segment saw sales of $172 million, up 8.3%, driven by growth in both our nutrients business and our food ingredients and solutions businesses. Earnings from operations were $40 million, up 5.4%, driven by the higher sales and a favorable mix, partially offset by certain higher manufacturing input costs and higher operating expenses. First quarter adjusted earnings from operations for this segment were $43 million, up 6%. We were encouraged by the continued momentum in Human Nutrition and Health, where our differentiated ingredients and solutions align with a consumer shift toward “better for you” nutrition. We believe this positions us well to further leverage our formulation expertise and portfolio of differentiated branded ingredients to drive sustained growth. Our Animal Nutrition and Health segment delivered sales of $62 million, up 8.6%. The increase was driven by higher sales in both the monogastric and ruminant businesses. Animal Nutrition and Health delivered earnings from operations of $6 million, up 8.7%, driven by the higher sales, partially offset by certain higher manufacturing input costs and higher operating expenses. First quarter adjusted earnings from operations for this segment were $6 million, up 8.2%. We delivered another quarter of improved performance in our Animal Nutrition and Health segment. We continue to drive adoption of our EnCaPPS encapsulated rumen-protected nutrients in the dairy market. Our U.S. monogastric business remains steady, and our European monogastric business continued to improve following the EU antidumping duties. Looking ahead, we are paying careful attention to the conflict in the Middle East and the potential impacts it may have on the animal nutrition markets. We are seeing increases in raw material input costs along with increased freight costs, which will need to be offset or passed on to our customers. We feel good about the momentum we have built within our Animal Nutrition and Health segment, and while we are likely to experience some modest margin compression resulting from the timing lag that occurs between input cost inflation and pricing adjustments, we remain confident in our ability to continue to drive growth in this segment over time. Our Specialty Products segment delivered quarterly sales of $35 million, up 4.4%, driven by healthy growth in Performance Gases. Specialty Products delivered a record quarterly earnings from operations of $12 million, up 24.5%, driven primarily by higher sales and a favorable mix. First quarter adjusted earnings from operations for this segment were a record $13 million, up 21.2%. We were very pleased with the performance of Specialty Products, delivering yet another quarter of solid growth, and we believe Specialty Products is well positioned to continue to deliver consistent profitable growth as we look forward. Overall, the first quarter was another strong quarter for Balchem Corporation, and we are really pleased with the results. While the global geopolitical and macroeconomic environment remains dynamic and includes areas of uncertainty, we believe we are well positioned to continue executing our strategy and to deliver continued growth through the rest of 2026. I am now going to turn the call back over to Ted for some closing remarks. Ted Harris: Thanks, Martin. We were very pleased with the financial results reported earlier today. We executed well within a dynamic and evolving macroeconomic and geopolitical backdrop, delivering another strong quarter of solid growth while at the same time advancing our strategic initiatives. Looking ahead, we remain excited about 2026 and confident in our ability to deliver continued top and bottom line growth while further advancing our long-term growth platforms. I will now hand the call back over to Martin, who will open up the call for questions. Martin Bengtsson: Thank you, Ted. This now concludes the formal portion of the conference. We will now open the call for questions. Operator: Thank you. We will now begin the question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. If you would like to withdraw your question, simply press star 1 again. Your first question comes from the line of Robert James Labick from CJS Securities. Your line is open. Robert James Labick: Good morning. Congratulations on another record quarter. Martin Bengtsson: Thank you, Bob. Thanks, Bob. Robert James Labick: Thanks. One of the keys to your growth and success has been the branded ingredients. And, Ted, you spoke a little about Vidacholine already. I know you are early-ish on a branding strategy so far, but what percent of sales are branded out of what is applicable now, and what could that look like in five or ten years? Ted Harris: Yeah. Again, Bob, thanks for your comments. Our branded ingredients—and let us just talk about Human Nutrition and Health—make up about, I would say, 40% to 50% of our Human Nutrition and Health business today. That does not mean to say on the other 50% to 60% we do not have brands, but they are more B2B brands. The power brands, we refer to them, like Vidacholine that you talked about, K2 Vital and K2 Vital Delta, Opti MSM, Albion Minerals, for example, are brands that obviously we are selling to supplement and nutritional beverage manufacturers but are recognized by the consumer. Those are the ones that we are really investing in. So let us say 40% to 50% of H&H today, and that part of the business is obviously growing faster than the other parts of the portfolio. So over time, it will clearly become a bigger and bigger part of our portfolio. Robert James Labick: Okay. Great. And we have talked on previous calls about the Jets partnership and the new customers that have come, notably in Vidacholine and, I think, energy drinks in particular. Are there other areas of expansion still to come from this? Are there opportunities for just more general sports drinks versus energy drinks? Or how do you take the company down that path if possible? Ted Harris: Yeah. So, you know, obviously, historically, supplements have been our primary targeted market, but as you mentioned, we have had pretty significant success more recently relative to sports beverages, energy drinks, and the like. As you can imagine, it is a great application for our products, partly because you do not have the capacity or volume limitation that you can have in a supplement or a multivitamin, and we have found it to be an excellent application for our products. Trends are leading to significant growth in those areas. So I do think that will continue to grow and, you know, kind of that word “energy drink” versus “nutritional beverage,” I do think many of these products started to be more in the energy drink category, and now those drinks are expanding much more broadly to more of a nutritional beverage focus, meal replacement focus, a much healthier product—or “better for you” product—to use those words, than the historical energy drinks. We really believe that the nutritional beverage market is a significant opportunity for us and will grow rapidly over time. So I think that is really where the predominance of our opportunity lies in the near to midterm. Relative to investing marketing dollars in the brands, it does expand far beyond partnering with an NFL team. We are already partnering with a women’s professional soccer team in Europe, the Bayern Munich women’s team. We are investing in other influencer areas, digital media areas, and so forth. We do continue to expand that effort in other areas. I think we talked about on calls many quarters ago that the investment in the Jets was a pilot to some extent. We certainly look back on that as being a pilot and one that we want to now expand through other consumer marketing awareness campaigns, some of which I just mentioned. Robert James Labick: Okay. Super. And one last one for me. I will jump back in queue. Looking at the P&L, the gross margins—the 37.3%—surprised on the upside. It was really strong, in fact. So maybe just give us a little more detail on what drove that. And I know with raw material cost pressures coming, how should we think about gross margins going forward? Martin Bengtsson: Yeah, Bob, strong performance on the gross margin, as you point out, and as you are familiar, we have talked about in the past that we do have a favorable tailwind in our portfolio from the fact that our higher-margin businesses are the ones growing the fastest—so minerals and nutrients in H&H being an example of that. Similarly, on the Animal Nutrition side, ruminant being higher margin and generally growing faster than monogastric. Just from a portfolio perspective, we have that tailwind that supports expansion of the margins. On top of that, we have been fairly effective more recently at managing the balance between price and inflation and driving some benefits that way as well, along with having effective manufacturing operations here supporting the P&L. So everything has just been working fairly well from a gross margin perspective, and you are seeing that come through. The reference we made to seeing inflation is true and real. We do see inflation coming, and we see that accelerating a bit with what is happening in the Middle East. As you know from the past, when we went through this with COVID, we have been quite effective historically at managing that both through our supply chain and our procurement, but also in terms of pricing that through to our customers where needed. But it tends to have a little bit of a dilutive impact—if your costs go up a dollar and you price through a dollar, mathematically, your margin rate goes down. I think we will see a little bit of that to a modest extent as we go forward in this inflationary environment. So while we continue to grow our margin dollars, we may see a little bit of a margin rate compression as a result of the environment. Robert James Labick: Okay. Got it. Thank you, and congrats again. I will get back in queue. Operator: Your next question comes from the line of Ram Selvaraju from H.C. Wainwright. Your line is open. Ram Selvaraju: Thanks so much for taking our questions. First, I was wondering if you could comment on the ongoing evolution of your thinking regarding the positioning of Vidacholine, and in particular, how you are thinking about optimizing the value of this franchise, especially given the most recent data that you cited published in the peer-reviewed journal Nutrients, and how this might evolve going forward when you think about, historically, the work that has already been done demonstrating that choline is an essential prenatal nutrient. Now you have data showing that it has applicability to enhance potentially cognitive health in older adults. Just give us a sense of how you are thinking about the evolution of that brand and how best to position it, particularly from the perspective of promotional and marketing strategies that you may not necessarily have employed in the past. Secondly, I think it would be helpful if you could give us a sense, particularly in light of the most recent geopolitical developments, how this might affect the industrial side of Balchem Corporation’s business, especially when we think about potentially increased U.S. stateside-based oil and petroleum production that may include enhanced fracking activity. And then lastly, Martin, I was wondering if you could just comment on the effective tax rate. It was a little bit ahead of what we had originally projected, so I was wondering if we should use that as the serviceable tax rate assumption going forward, or if you anticipate the effective tax rate to modulate a little bit over the course of the remainder of this year. Thank you. Ted Harris: Thanks, Ram, for your questions. Maybe I will take the first two and Martin can answer the last one. I will start with your second one around industrial. As everybody knows, we no longer report out industrial separately. But that business has continued for a number of years at a very low level, I would say, but that business is clearly up. It is still not a measurable contributor to our overall results, but regardless of that, the results are up, sales are up, demand is up, which is what you would expect given the current situation with increased activity in that part of the economy. So we are seeing new business from that. Again, it is not to a material nature, and we strongly believe it will never return to what it once was, but it is nice to see higher demand in that area based on the increased activity. Relative to the ongoing Vidacholine positioning, we are really excited about the results of this most recent study, specifically for servicing postmenopausal women in that community and that targeted market, but it does suggest that older adults can benefit from Vidacholine intake more broadly. That is a huge market compared to the prenatal market that you mentioned. Historically, choline was a product that was sold into infant formula and really did not even appear that much in prenatal vitamins. I think we can look back and say we were very, very successful in doing the science and having the studies to support the prenatal market, and today it really is broadly part of a prenatal vitamin regimen. It is incredibly rare for me to ask a pregnant woman what her vitamin regimen is and it not to include choline. I think we have been very successful there. The reality is that is a relatively small market. So this could be an absolute breakthrough from a Vidacholine perspective and really open up that, as I used the word earlier, huge adult cognition market. I think it is an early study. It is a study that has definitive results for postmenopausal women. We need more studies for sure to show effectiveness across a wider segment of the population in that age group, but this is a good first start, and we always expected this to be the start. So we are investing in some more studies. And then, as we have also learned, we need to support that science and those studies with marketing. Obviously, marketing to aging adults that either are experiencing cognitive issues or are concerned about cognitive issues is a very different marketing campaign to positioning Vidacholine as a nutrient that athletes should take, as we were doing for the New York Jets. So we will have to reposition our marketing efforts—or newly position our marketing efforts—to support the emerging science in this area and to build awareness in the aging population and ultimately to drive market penetration of Vidacholine in that category. That is exactly what we are going to do. With that, I will hand it over to Martin to talk about tax. Martin Bengtsson: Yes, Ram. As we spoke about in the past, we tend to use a 23% effective tax rate as the planning rate, and I think when we spoke last time, I thought we would probably err on the side of doing better than that. In Q1, we had 23.3%, so a bit above that just based on timing of various items and some changes in state tax laws that impacted that negatively, and also various discrete items that hit the quarters differently. As we look forward here, I think the rate will be higher in Q2 as well versus that 23%, and then I think it will be lower in the back half of the year as we work our way towards that 23%. I think it is still a good planning rate to use—the 23%—as you model things for the full year. Ram Selvaraju: Thank you so much, and congrats again on a very solid quarter. Operator: Your next question comes from the line of Daniel Harriman from Sidoti. Your line is open. Daniel Harriman: Ted, Martin, good morning. Thank you so much for taking my questions, and again, congratulations on continued execution and great performance. I have two questions this morning. I will start with one for Ted. Last quarter, I touched on—or asked you about—international growth, and I was just wondering if you might be able to provide us an update or if there is anything going on that we should pay attention to there across the three businesses. And then, Martin, on the European monogastric side of things, I was just curious if you could give a little bit more color about where we are in the recovery there and if there is more room for you in terms of both volume and pricing. Really appreciate it. Thank you. Ted Harris: Yeah. On the geographic expansion and international growth, that continues to be a primary strategic focus area for our company, and one that we feel really good about the progress we are making. Part of that progress involves hiring people in the various international regions around the world. We are doing that, and we are hiring really good people. I would say when you look at our OpEx this quarter, Martin talked a little bit about it being higher than normal, and part of that, at least, is driven by some one-time items, but part of it is also driven by an investment in sales and marketing around the globe as we do invest in geographic expansion. So we are making good progress in hiring people, building out the infrastructure that we need to drive geographic expansion, and the results are showing. We are seeing higher growth rates in most international locations versus the U.S. We are still driving really good growth in the U.S., but the international growth rates have been better for us because of the low base that we are starting from. We are focused on it. It is a primary strategic objective for us, and we are making really good progress relative to that strategic initiative. Martin Bengtsson: Yeah. On Animal Nutrition in Europe and the recovery of the monogastric business there, we are clearly seeing an uptick following the antidumping. In Q1, we did see a double-digit volume improvement, so it is definitely there, combined with improved pricing. There is clearly an upwards trend in that business that I think has the potential to continue to strengthen further. The impacts that we are keeping an eye on right now are really stemming from the Middle East conflict and whether or not that will have an impact to the European end markets, given the higher input costs that they will be facing going forward. But in terms of the EU antidumping, we are clearly seeing benefits from that at the moment. Daniel Harriman: That is really helpful. Thank you again, guys. Operator: Your next question comes from the line of Artem Chubara from Rothschild Redburn. Your line is open. Artem Chubara: Thank you. Hello, Ted and Martin. Congrats on a good quarter. I would like to ask two questions. The first one, H&H—any color on how nutrients or food ingredients business performed in the quarter would be helpful just to understand the magnitude of growth and whether you expect these to persist. And the second question is on Specialty Products. Obviously, you have reported quite exceptional improvement in profitability, so it would be helpful to understand where it came from—perhaps whether it was price or volume—and how that developed by region, whether it was Europe or the U.S. Thank you. Ted Harris: Sure. Maybe I will take a stab at this and Martin can chime in as needed. We were really pleased with the overall performance of H&H, really as we have been for many quarters. The story, I would say, in Q1 was very similar to the story that has played out over previous quarters, so not much changing. The minerals and nutrients portfolio is growing very strongly—I would say double-digit growth—fueled particularly by growth in our minerals business, which is performing outstandingly broadly speaking, but all of the nutrients are growing nicely. That business is performing well and is really fueled by, yes, to some extent the “better for you” trends, but also the adoption of supplementation and the inclusion of nutrients in beverages, as we talked about earlier. So a little bit more of the same, which I view as positive. The food ingredient and solutions business grew, I would say, lower- to mid-single digits. Again, it continues to grow at what I would say are nice rates for that business. That growth truly is being fueled by the “better for you” trends—whether it is meat sticks that we have talked about before where some of our ingredients are included, or high-protein bars, high-fiber beverages, organic high-fiber cereals—those kinds of products are really all performing very well for us and really driving the vast majority of growth within H&H. Again, I would say that story has been true for quite a number of quarters. Overall, we are very pleased with the performance of H&H, and we continue to believe that story will continue for some time to come. We think it is quite sustainable. Relative to Specialty Products, it is a little bit of a different story. The favorable growth really is driven primarily from the Performance Gases part of Specialty Products. Again, very pleased with the overall performance of Specialty Products, but this quarter it was primarily driven by Performance Gases, where we are seeing healthy demand both in the U.S. and in Europe. It seems odd a number of years later to still be talking about the pandemic, but those were markets that were pretty severely impacted by the pandemic and it had a long played-out impact, I would say, on those markets. We would say those markets today are back to where they were—very healthy—and our business is doing very well, both in the U.S. and Europe, just on healthy demand. The growth, as we talked about, in Plant Nutrition has been primarily driven by geographic expansion over time. We did not deliver growth in Q1, but we are bullish about the performance of Plant Nutrition over the course of the year. We had significant margin improvement in that business in Q1, delivered healthy geographic expansion growth, and generally speaking, it is a healthy planting environment right now. Again, we feel good about our ability to deliver growth in that business this year. So really pleased with the performance of Specialty Products as well, and we believe that this performance that we have been delivering in that segment over the last number of quarters and in Q1 is sustainable. Hopefully that answers your questions. Artem Chubara: It does indeed. Thank you very much. Operator: That concludes our question and answer session. I will now turn the call back over to Ted Harris for closing remarks. Ted Harris: Yes, thank you very much. Once again, thank you all for joining our call today. We are very pleased with how we have started 2026, and we really appreciate your support and your time today. We look forward to reporting out our Q2 2026 results in late July. In the meantime, we will be participating in the Wells Fargo Industrials and Materials Conference in Chicago on June 10, and the CJS Summer Investor Conference in White Plains, New York on July 9. We certainly hope to see some of you there. Thanks again. Operator: This concludes today’s conference call. Thank you for your participation. You may now disconnect. Before you buy stock in Balchem, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Balchem wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $496,797!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,282,815!* Now, it’s worth noting Stock Advisor’s total average return is 979% — a market-crushing outperformance compared to 200% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of April 30, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Balchem (BCPC) Q1 2026 Earnings Transcript was originally published by The Motley Fool

MONTVALE, N.J., April 30, 2026 (GLOBE NEWSWIRE) -- Balchem Corporation (NASDAQ: BCPC) reported today financial results for its 2026 fiscal first quarter ended March 31, 2026. For the quarter, the Company reported net sales of $270.7 million, net earnings of $40.3 million, adjusted EBITDA(a) of $74.3 million, and free cash flow(a) of $33.8 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 first quarter net sales, adjusted EBITDA, and net earnings, as well as strong cash flows.” First Quarter 2026 Financial Highlights: Net sales were $270.7 million, an increase of 8.1% compared to the prior year quarter. GAAP net earnings were $40.3 million, an increase of 8.7% from the prior year quarter. Adjusted EBITDA was $74.3 million, an increase of 12.1% from the prior year quarter. GAAP earnings per share was $1.25 compared to $1.13 in the prior year quarter and adjusted earnings per share(a) was $1.33 compared to $1.22 in the prior year quarter. Cash flows from operations were $40.1 million, with free cash flow(a) of $33.8 million. Sales and earnings from operations growth in all three of our reporting segments. Recent Highlights: For the first time, new clinical research using functional magnetic resonance imaging indicates that choline may influence brain network efficiency in post-menopausal women. Published in the peer-reviewed journal Nutrients, the study used Balchem’s VitaCholine® ingredient, showing its effects on working memory-related brain activation and functional connectivity and suggesting that VitaCholine® may help enhance cognitive health in older adults. On April 22, we released our 2025 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 said, “I am very pleased with how we have started 2026, both financially and strategically, with record Q1 financial results and solid progress being made on our strategic growth initiatives.” 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 geopolitical environment and the changing global trade outlook that are 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 2026: The Human Nutrition and Health segment generated quarterly sales of $171.6 million, an increase of $13.2 million, or 8.3%, compared to the prior year quarter. The increase was driven by higher sales within both the nutrients business and the food ingredients and solutions businesses. Earnings from operations for this segment of $40.0 million increased $2.0 million, or 5.4%, compared to $38.0 million in the prior year quarter, primarily due to the aforementioned higher sales and a favorable mix, partially offset by certain higher manufacturing input costs and higher operating expenses. Excluding the effect of non-cash expense associated with amortization of acquired intangible assets and other adjustments, adjusted earnings from operations(a) for this segment were $43.4 million, compared to $41.0 million in the prior year quarter, an increase of 6.0%. The Animal Nutrition and Health segment generated quarterly sales of $62.2 million, an increase of $4.9 million, or 8.6%, compared to the prior year quarter. The increase was driven by higher sales in both the monogastric and ruminant species markets. First quarter earnings from operations for this segment of $5.7 million increased $0.5 million, or 8.7%, compared to $5.2 million in the prior year quarter, primarily due to the aforementioned higher sales, partially offset by certain higher manufacturing input costs and higher operating expenses. 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 $5.9 million compared to $5.5 million in the prior year quarter, an increase of 8.2%. The Specialty Products segment generated quarterly sales of $34.7 million, an increase of $1.5 million, or 4.4%, compared to the prior year quarter, due to higher sales in the performance gases business. Record earnings from operations for this segment were $11.9 million, compared to $9.6 million in the prior year comparable quarter, an increase of 24.5%, primarily driven by the aforementioned higher sales. Excluding the effect of non-cash expense associated with amortization of acquired intangible assets and other adjustments, record adjusted earnings from operations for this segment were $12.8 million, compared to $10.5 million in the prior year quarter, an increase of 21.2%. Consolidated quarterly gross margin of $101.1 million increased by $12.9 million, or 14.6%, compared to $88.2 million for the prior year comparable period. Gross margin as a percentage of sales was 37.3% compared to 35.2% in the prior year period, an increase of 210 basis points, primarily due to the sales growth and manufacturing efficiencies, partially offset by raw material inflation. Operating expenses of $45.5 million for the quarter increased $8.3 million from the prior year comparable quarter, primarily due to higher compensation-related costs and an increase in professional services. Net interest expense was $2.2 million and $2.9 million in the first quarters of 2026 and 2025, respectively. The decrease in interest expense was primarily due to lower outstanding borrowings and lower interest rates. Our effective tax rates for the three months ended March 31, 2026 and 2025 were 23.3% and 22.7%, respectively. The higher effective tax rate was primarily due to an increase in certain state taxes. First quarter cash flows provided by operating activities were $40.1 million and free cash flow was $33.8 million. The $236.4 million of net working capital on March 31, 2026 included a cash balance of $72.9 million. Significant cash payments during the quarter included a dividend payment of $30.8 million, repurchases of common stock of $15.7 million, and capital expenditures and intangible assets acquired of $6.3 million. Outstanding debt on our revolving loan was $169.0 million as of March 31, 2026 and our net debt (b) was $96.1 million, with an overall leverage ratio (c) on a net debt basis of 0.3 times. Ted Harris said, “The Balchem team delivered another strong quarter in Q1 of 2026. We remain confident in the long-term growth outlook for our company, despite the current geopolitical and global trade uncertainties, as we continue to focus on progressing our strategic growth initiatives over the course of the remainder of 2026 and beyond.” Quarterly Conference Call A quarterly conference call will be held on Thursday, April 30, 2026, at 11:00 AM Eastern Time (ET) to review first quarter 2026 results. Ted Harris, Chairman, President and CEO and Martin Bengtsson, CFO will host the call. Institutional investors, analysts and other members of the financial community are invited to join the live call by dialing 800-715-9871 (toll free USA/Canada), +1-646-307-1963 (USA/International) or 647-932-3411 (Canada/Toronto), five minutes prior to the scheduled start time of the conference call. Investors and the public are invited to listen to the live webcast at https://events.q4inc.com/attendee/169585269. The conference call will be available for replay shortly after the conclusion of the call at https://events.q4inc.com/attendee/169585269 for one year. 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) ($ in 000’s) Non-GAAP Financial Information In addition to disclosing financial results in accordance with United States (U.S.) generally accepted accounting principles (GAAP), this earnings release contains non-GAAP financial measures that we believe are helpful in understanding and comparing our past financial performance and our future results. The non-GAAP financial measures in this press release include adjusted gross margin, adjusted earnings from operations, adjusted net earnings and the related adjusted per diluted share amounts, EBITDA, adjusted EBITDA, adjusted income tax expense, free cash flow, net debt, and leverage ratio. The non-GAAP financial measures disclosed by the company exclude certain business combination accounting adjustments and certain other items related to acquisitions, certain equity compensation, nonqualified deferred compensation plan expense (income), and certain one-time or unusual transactions. Detailed non-GAAP adjustments are described in the reconciliation tables below and also explained in the related footnotes. These non-GAAP financial measures should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP, and the financial results calculated in accordance with GAAP and reconciliations from these results should be carefully evaluated. Investors should not consider non-GAAP measures as alternatives to the related GAAP measures. Set forth below are reconciliations of the non-GAAP financial measures to the most directly comparable GAAP financial measures. Table 1 (unaudited) Table 2 (unaudited) Table 3 (unaudited) Table 4 (unaudited)