BCPC

Image source: The Motley Fool. Friday, Oct. 23, 2026 - Chief Financial Officer - Carl Martin Bengtsson - Chairman, President, and Chief Executive Officer - Theodore L. Harris Operator: Press star 1 again. I will now hand the conference over to Martin Bengtsson, Balcom's Chief Financial Officer. Please go ahead. Carl Martin Bengtsson: Thank you. Good morning, everyone. Thank you for joining our conference call this morning to discuss the results of Balchem Corporation for the quarter ending September 30, 2026. My name is Martin Bengtsson, chief financial officer, and hosting this call with me is Ted Harris, our chairman, president, and CEO. Following the advice of our counsel auditors and the SEC, at this time, I would like to read our forward looking statement. Statements made in today's call that are not historical facts are considered forward looking statements. We can give no assurance that the expectations reflected in forward looking statements will prove correct and various factors could cause actual results to differ materially from our expectations. Including risks and factors identified in Balchem's most recent Form 10-Ks, 10-Q, and 8-K reports. The company assumes no obligation to update these forward looking statements. Carl and commentary also include non GAAP financial measures. Please refer to the reconciliations in our earnings release for further details. I will now turn the call over to Ted Harris, our Chairman, President and CEO. Theodore L. Harris: Thanks, Martin. Good morning. And welcome to our conference call. We were very pleased with our third quarter results reported earlier this morning. Were once again driven by healthy broad based growth across all 3 of our reporting segments, and continued solid execution on our strategic growth initiatives. Our healthy growth continues to be fueled by the 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 product offerings and capabilities. As a result, we delivered record quarterly consolidated sales, net earnings, and adjusted EBITDA. As well as solid cash flows. Before discussing our third quarter financial results in more detail, I would like to provide a few comments on the current market environment within which we are operating. And also provide you with some updates regarding new science that has been recently published supporting our branded ingredients VitaCholine, K2VITAL, and K2VITAL DELTA. We continue to see healthy demand trends across the majority of our businesses. Within human nutrition and health, we continue to see solid demand growth for our unique portfolio of ingredients and solutions. Consumer interest in supplementation and better for you food systems, continue to support a healthy market environment for us. In animal nutrition and health, momentum continues to build. Both ruminant and monogastric customers continue to adopt our nutrient technologies as they look for cost effective ways to improve animal health and productivity. And within specialty products, we continue to see healthy market demand for our specialized performance gases and services. Overall, we see a positive demand outlook for Balchem, and we remain confident in our ability to deliver healthy growth over the long term. Turning to the growing body of science supporting our branded ingredients. I would like to highlight 2 recently published studies that we believe are particularly noteworthy. The first is the MD Anderson led pilot study that we have discussed in the past and that was recently published in Alzheimer's and Dementia Translational Research and Clinical Interventions, a peer reviewed journal of the Alzheimer's Association. The study evaluated the potential benefits of choline supplementation in cognitively healthy APOE4 carriers, a population at significantly increased genetic risk for developing Alzheimer's disease. Researchers examined the impact of supplementation on biomarkers associated with neurodegeneration, brain metabolism, and pathways implicated in Alzheimer's progression. The findings provide encouraging new evidence that may support the role of VitaCholine in lifelong brain health and further strengthen the scientific foundation of choline in healthy aging and cognition. We believe this represents another important step in positioning VitaCholine not only as an essential nutrient, also as a leading science backed ingredient in adult cognitive health. The second study I would like to highlight is the DANCODE trial. Published in Circulation. A leading cardiovascular journal of the American Heart Association. The study examined the impact of vitamin K2 supplementation using Balchem's K2VITAL DELTA on coronary artery calcification and cardiovascular health. The findings add important clinical evidence supporting the role of vitamin K2 in cardiovascular health and healthy aging, while further strengthening the scientific leadership and commercial differentiation of our K2VITAL platform. Now let me turn to our consolidated results for the third quarter. This morning, we reported record consolidated revenue of $291 million, an increase of 8.6% versus the prior year. We delivered record quarterly GAAP earnings from operations, of $62 million, an increase of 14.4%. Consolidated net income closed the quarter at a record $47 million, an increase of 16%. This quarterly net income translated to diluted net earnings per share of $1.46 on a GAAP basis, up 17.7%. On an adjusted basis, we delivered record quarterly adjusted EBITDA of $80 million, an increase of 12.4%. Our quarterly adjusted net earnings were a record $50 million, an increase of 14.5% which translated to $1.57 per diluted share, up 16.3%. Overall, it was an excellent quarter for Balchem: record results, healthy growth across all 3 segments, and continued progress on our long term strategic priorities. With that, I will turn the call back over to Martin to review our third quarter financial results and segment performance in more detail. Carl Martin Bengtsson: Thank you, Ted. As Ted mentioned, net sales grew 8.6% this quarter compared to the prior year. With each of our 3 segments contributing to that growth. Our gross margin was $106 million, up 10.7% and our gross margin as a percentage of net sales expanded 70 basis points to 36.4%. The improvement was driven primarily by higher sales, favorable product mix, and manufacturing efficiencies partially offset by certain higher manufacturing input costs. Consolidated operating expenses for the third quarter were $43 million, compared to $41 million in the prior year. The increase was primarily due to higher compensation related costs partially offset by the net favorable impact of certain discrete items in the quarter. GAAP earnings from operations for the third quarter were a record $62 million, up 14.4%. On an adjusted basis, earnings from operations were $67 million, up 12.7%. Adjusted EBITDA was a record $80 million, an increase of 12.4% with an adjusted EBITDA margin rate of 27.6%. Net interest expense for the third quarter was $2 million, down $1 million from the prior year reflecting lower outstanding borrowings and lower interest rates. The effective tax rates for the third quarter of 2026 and 2020 were 22.2% and 22.6%, respectively. The decrease was primarily due to favorable adjustments related to filing our prior year federal tax return and a higher foreign derived intangible income deduction benefit. Partially offset by an increase in certain state taxes. Consolidated net income closed the quarter at a record $47 million, up 16%. And diluted net earnings per share were $1.46, up 17.7%. Adjusted net earnings were a record $50 million, up 14.5% and adjusted diluted earnings per share were $1.57, up 16.3%. Cash flows from operations were $70 million for the quarter, and free cash flow was $58 million. And we ended the quarter with $66 million of cash on the balance sheet. We continue to generate healthy cash flows, which enables us to both invest in growth and return value to shareholders. We repurchased approximately $28 million of Balchem common stock during the third quarter and we also reduced net borrowings by $28 million in the quarter. Resulting in a net leverage ratio of 0.2x. Together with the expanded $650 million credit facility we put in place in July, we are well positioned to fund innovation capacity expansion, and strategic acquisitions. Turning now to our segment results. Human nutrition and health delivered record sales of $188 million. up 8.1%, driven by growth in both our nutrients business and our food ingredients and solutions businesses. Earnings from operations rose 11.8% to a record $46 million, driven by higher sales and favorable mix, partially offset by higher operating expenses. On an adjusted basis, earnings from operations for this segment were a record $49 million, up 10.9%. We remain very positive about the outlook for human nutrition and health. Our differentiated ingredients, formulation expertise, and branded portfolio position us well to support our customers and capture additional market opportunities. Particularly as consumers prioritize health and better for you solutions. Animal nutrition and health sales were $63 million, up 11.7% from the prior year. Driven by higher sales in both the monogastric and ruminant markets. Earnings from operations were $6.8 million, up 82.8% reflecting the higher sales and favorable mix partially offset by certain higher manufacturing input costs. On an adjusted basis, earnings from operations for this segment were $7 million, up 73.6%. Animal nutrition and health delivered another quarter of year over year improvement. Growth was supported by continued adoption of our encapsulated rumen protected nutrient technologies in dairy, pricing actions in our U. S. Monogastric business, and gradual improvement in our European monogastric business following the implementation of EU antidumping duties. We remain optimistic about the direction of this business and confident in our ability to drive further penetration of our technologies to deliver long term growth. Specialty product sales were $37 million, up 4.5%, driven by growth in our performance gases business. Earnings from operations were $12 million, up 6.6%, reflecting higher sales and favorable mix, partially offset by higher operating expenses. On an adjusted basis, earnings from operations for this segment were $13 million, up 3%. Specialty products continued to deliver steady profitable growth this quarter. With strong market positions and disciplined execution, we believe this segment remains well positioned to continue this steady growth over time. In summary, it was another strong quarter with record results, healthy growth in each of our segments, and solid cash generation. As we look ahead to the fourth quarter, we are optimistic about the outlook. The fourth quarter for us, as we have shown over the last number of years, is normally sequentially lower than the third quarter based on historic business seasonality but we remain confident in our ability to continue to deliver healthy year over year growth in the fourth quarter as we have done all year. With that, I will turn the call back over to Ted for some closing remarks. Theodore L. Harris: Thanks, Martin. We are very pleased with the results we reported earlier today. Our teams executed extremely well during the quarter, delivering record financial performance while continuing to advance our strategic priorities. The third quarter marked our 29th consecutive quarter of year over year growth in adjusted EBITDA. That level of consistency across a wide range of market conditions reflects the strength of our unique portfolio, the resilience of our business model, and the dedication of our team. We are very proud of what we accomplished this past quarter and excited about the opportunities ahead for Balchem. With that, I will turn the call back over to Martin who will open up the line for questions. Carl Martin Bengtsson: Thank you, Ted. This now concludes the formal conference. At this point, we will open up the conference call for questions. Operator: And we will now begin the question and answer session. Please limit yourself to 1 question and 1 follow-up. If you would like to ask a question, please press star 1 to raise your hand. To withdraw your question, press star 1 again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by for a moment while we compile the Q&A roster. Your first question comes from the line of Bob Labick with CJS. Your line is open. Please go ahead. Robert James Labick: Good morning, and congratulations on very nice results. Yeah, in addition to the strong growth, you obviously have very nice margin performance and really kind of despite inflation in there. And part of the discussion you mentioned favorable mix, which helped on margins. Can you elaborate on the mix benefits you are getting by segment and talk about if they are sustainable and how we should think about that going forward? Carl Martin Bengtsson: Sure, Bob. Yeah. I mean, we are obviously very pleased with the performance and the margins for those of you that have followed us over time. We are really improved on those margins here over the last couple of years. As we look at it now for the segments, there is some favorable tailwinds just from a portfolio perspective that if you look at H and H as our largest segment, the nutrition piece of that segment is higher margin relative to the food part and the nutrition part is growing, you know, faster than the food part. So you are getting a favorable mix within H and H over time. Due to that dynamic. And you have a similar dynamic on the animal nutrition and health side, right, where the ruminant business, the dairy business is higher margin than the monogastric and over time is growing faster. So there are tailwinds within both of those segments. And, obviously, with our specialty products segment, having grown nicely, being very high margin as well for us as a business, It just supports a nice tailwind for us. More specifically, to your question around inflation and so on, I mean, we are in an inflationary period, as you called out. We have seen inflation in our raw materials all year, but we have been able to turn around and pass that through to our customers. So net, if you look at it sort of year to date, we are pretty much breakeven. But there is a little bit of timing delay in some businesses. So some were a little bit ahead and some were a little bit behind. But on a year to date basis, we are pretty much at breakeven from that perspective, which sort of, if you take a step back, that is a little bit margin dilutive. Right? If materials goes up, you pass that through dollar for dollar. That has a slight negative impact to your margin. Percentage, but we have been able to offset that to some extent with a beneficial portfolio mix. Robert James Labick: Okay, Brent. that is wonderful. And then I guess for my follow-up, just switching gears a little bit. Sounded like some very exciting news on 2 trials that you just mentioned. So wondering if you could, I guess, elaborate on that and tell us the next steps for the-- for both, I guess, the Alzheimer's and cardiovascular trials that were just released. Theodore L. Harris: Yes, you are right. We are very excited about these 2 new trials, but sort of just you know, putting it into context, it really is simply kind of part of a broader portfolio of science that is so important to the vitamins, nutrients, minerals that we go to market with and it is really the foundation of what we do building this portfolio of science. And the reason that I highlighted these, 1 is because the-- First of all, they are very new. But secondly, because they really stand out as being a bit different than the previous studies that we have done relative to these nutrients, the previous many studies that have been done And I will start with the MD Anderson University of Texas and MIT study. And that really is, as you know, Bob, choline has predominantly been recognized as an important nutrient for child nutrition, infant nutrition. it is commonly included in infant formula. it is known, based on many studies, to have a significant impact on infant cognition, And that is really what the history has been and a lot of the science has been for choline. And this study is clearly focusing on adult cognition. And it is now 1 of several that I would say are really, really good studies that bring choline into the discussion relative to adult cognition, Alzheimer's, dementia, And this was a pilot study as we talked about. so it was a fairly small group of participants in this--in it, but will lead to a much bigger study and 1 that really could very much change the game relative to showing the importance of choline relative to adult cognition. And obviously, what are we going to do? What comes next is we are gonna make sure that our customers are fully aware of this study and the favorable results and the fact that a pilot study is coming, forward. And so now, as we do, you know, typically in the process, we start with the science and then we need to create awareness around studies like this through our marketing efforts, and that is what we will be doing next. And I think that this will be viewed very positively by our customers and ultimately consumers. And the second 1 was similar in that it was for vitamin K2, and I think you also are aware the vast majority of previous science and the deep library of studies on K2 are primarily around bone health. And helping calcium find its way from soft tissues into the bones and strengthening the bones. Well, what is different about this is this really is an important, much more significant study, 400 subjects in the study over a longer period of time. That really showed cardiovascular benefit of K2. And so this is sort of not focused on bone strength, but on the cardiovascular benefit. it is very logical to kind of think that if K2 has a mode of action of helping calcium find its way from soft tissue into the bone that it could have a cardiovascular benefit. And this study went a long way to providing some evidence that may indicate that K2 does indeed do that. So again, what we will do with this is we will now kind of add the marketing on top of this science and the library that we have behind it and create awareness around it and as a company, lead with science, but we obviously need to create awareness through marketing as well. So I think they are 2 important studies. They are not necessarily the end of the story but help really add to the body of science. Supporting these branded ingredients. So we are excited about it. Robert James Labick: Brent. That is. that is very exciting. So thank you. I will jump back in the queue, but congrats. Theodore L. Harris: Okay. Thanks, Bob. Operator: Your next question comes from the line of Ram Selvaraju with H. C. Wainwright. Your line is open. Please go ahead. Theodore L. Harris: Hey, Ram. Are you there? I think, Tracy, maybe we should go on to the next question, and maybe we can come back to Ram because we cannot hear him. Operator: Absolutely. Your next question is coming now from Daniel Harriman with Sidoti and Company. Your line is open. Please go ahead. Daniel Scott Harriman: Hey, guys. Good morning, and congratulations on yet another great quarter. Just a couple of quick questions from me today. Just focusing on ANH. You know, obviously, sales growing how they did and earnings from operations up significantly year over year. Can you just provide a little bit more information about what is driving that and how sustainable you think it is over time? I know you did mention a few things in the prepared remarks. And then the last question is just about inventory. It looks like it is crept up to about $177 million, which is up from where it was at the end of 2025. And I am just curious if you could help us understand what is driving that, whether it is pricing, stocking ahead of cost or just inherent demand. Really appreciate it, guys. Thank you. Carl Martin Bengtsson: Yeah. No. For sure. It sounded like 2 questions for me probably. Yep. So maybe we start with the A and H growth story. I mean, we are very happy with how ANH has performed over a number of quarters right now, of gradually just improving. And a couple of drivers. 1 is obviously the ruminant side. Where we keep driving that penetration. Of our rumen encapsulated nutrients there. Market penetration is still 1 where even if the market were not to grow, we can still drive growth through penetration and adoption of our technologies And we are seeing that across our product portfolio, whether it be on our encapsulated methionine, our encapsulated lysine, our encapsulated choline, etcetera. We are seeing growth across our product line. that is further supported by did launch a new encapsulated lysine last year that we spoke about. that is really driven healthy growth in that product line. We just rolled out the next generation and encapsulated methionine, actually on October 1, so that is not in Q3, 3, but it is sort of further just supporting the continued growth in that portfolio. And there is a nice sort of pipeline coming behind that of product launches that we are working on that we are looking forward to. Just continue to drive that penetration. And it is not just in The US. We were historically very US focused, we are also seeing accelerated growth internationally. So we are seeing good ruminant growth in Europe, in The Middle East, in Asia. that is further supporting that ruminant penetration across the board. as really the customers at the end of the day are looking to get healthier and more efficient cows. There unlikely to be many more cows in the world. So to meet the demand for dairy derived products, they really need their cows to become more efficient. And that is the business we are in. On the monogastric side, 2 things. Right? We are in Europe, obviously, the antidumping that we have spoken about quite a bit over the last year is certainly helping. So we have regained volumes. Pricing has gradually improved. With these changes, so we are seeing the benefits of that. At the same time, there is still a lot of work to do. We still see sort of circumvention happening and absorption where people are just dropping the price to import it and absorbing the duty. So it will be an ongoing battle to push back around some of these things where they are sort of violating the trade practices but it is certainly helping already at this point, and we are seeing that. And in The US, we have sort of seen higher input cost, and we have we have offset that through pricing to recover the costs. And that is driving some growth as well. And we have filed for in the US antidumping as well. So we will see here towards the end of the year what the preliminary ruling is in The US to combat that same sort of dumping situation in The US that we went after in Europe. So then going to the other part of your and around the inventory, which ended the quarter at 177 million, which is a high number from a historic perspective. I would say it is probably 4 reasons that I would point to why that is a higher number than what you are used to seeing. 1 part is obviously that there is an inflationary impact there as in an inflationary environment. A portion of this increase is just the fact that we are paying more for the inventory that we have purchased and hold. But secondarily, growth is also driving a part of this increase. We have grown 9% as a company. year-to-date. So, obviously, that is requiring a bit more of inventory to support those sales. And then third, I would say, we have you know, from a risk mitigation standpoint, chosen--deliberately chosen to hold more inventory in certain areas where we see higher risk of any sort of disruption, or where it is a really critical raw materials to serve our customers where we do not want to take any chances. And as such, based on what is been going on in The Middle East and some other geopolitical situations, we have just made deliberate choices to hold a bit more safety stock essentially here throughout and build that up over the year. And fourth, it is really that we have added a bit of inventory for coming product launches. So we have a few product launches that we are preparing for. And usually that means that you have to get everything ready. You need to have the inventory on hand, etcetera. Before you roll that out into the market. And that has further sort of increased a bit the inventory levels we are carrying at the moment. So those 4 things have brought that balance up a bit. And I think as we go forward, we will continue to monitor the situation and see what is sort of the right risk balance here of how much inventory to carry based on our growth and product launches and what is going on in the world, etcetera. Theodore L. Harris: So that would be sort of my summary of that. Daniel Scott Harriman: that is really helpful, Martin. Thanks again. Theodore L. Harris: Thanks, Daniel. Operator: Your next question comes from the line of Ram Selvaraju with H. C. Wainwright. Your line is open. Please go ahead. Raghuram Selvaraju: Can you hear me now? Theodore L. Harris: Yes, we can, Ram. Raghuram Selvaraju: Okay. Sorry about that. I do not know what the technical difficulty. So just very quickly, I wanted to know if you could provide us with some additional sense of what other directions you might pursue with future clinical investigation of the applicability of certain elements of your product range. In particular, I was interested in your thoughts on exercise and physical recovery, athletic performance optimization, and sleep. Yeah. Theodore L. Harris: Bob, Ram, thanks for the, the question. I would say, all of those that you mentioned are part of the, you know, the benefits of some of our nutrients. So we already have certainly some studies around muscle recovery, for sure, but kind of building off of that I think is important. So that is very relevant. Sleep is certainly for our magnesium product. The benefits of reduction in anxiety, and ease of sleeping as an important part of the science behind those products, and we already have studies but would continue to be a focus. I think other areas that you did not mention that come to mind are kind of part of the sort of increasing trend around beauty from within. And showing the benefits of some of our nutrients, for example, like OptiMSM on, hair growth and hair strength, and so forth, as well as nail and skin. Benefits, something that we certainly have already invested in some science around, but we will continue to invest in. And I think the other 1, you know, we have talked about choline, relative to infant cognition and now increasingly adult cognition. But there are certainly other benefits of choline around liver health, and sort of energy and focus and so forth that I think are ripe for additional studies. And as we have said many times, I think the Library of Science behind these nutrients is absolutely critical and kind of foundational to what we do. So, it is a. It continues to receive a healthy amount of our focus, and we will continue to invest there. Raghuram Selvaraju: From a partnership perspective, do you think that Balchem might explore the possibility of any partnerships or link-ups with companies in the aesthetic space particularly given what you just said. Also, I wanted to ask if you anticipate any future high-profile marketing partnerships with professional sports teams? and if so, do you have some idea of the timing there. And then just 2 very quick questions for Martin. Maybe you could comment on whether the elevated price of oil and potential increased fracking activity in The United States, might have a salubrious impact on the company's other divisions outside of animal nutrition and health and human nutrition and health? And if so, what magnitude that might be? And then just very quickly, what your expectations are regarding effective tax rate if you expect that to remain steady going forward. Theodore L. Harris: Thanks, Ram. Bunch of questions in there, but partnerships are absolutely something that we are exploring and interested in. You know, obviously, we are--you know, we are not a cosmetics company. We are not a beauty company. But we have nutritional expertise and knowledge and certainly a nutrient portfolio that plays a role. And these are topics that the leading, you know, call them beauty companies of the world are working on, talking about developing their own path forward. And I think partnerships in that area are a clear opportunity for us and something that we are exploring. So absolutely. Relative to additional sports team partnerships, You know, we have talked about the NFL, the New York Jets partnership, that is now, I think, maybe in its fourth year. As well as the Bayern Munich women's team. We have been very pleased with both of those investments. And we do think there is room for more. And we are contemplating another sports partnership that we should be able to announce. I would certainly think, before our next earnings call, that we think is something that really makes a lot of sense for us that has a bit more of an international global aspect to it that we are quite excited about and quite, you know, confident about given the results that we have seen from the first 2. I do not think that this is a never-ending, you know, adding team upon team. But I think that building off of the 2 experiences we have makes sense with another partnership or maybe 2. And 1 of which we should be able to announce here in the next month or so, and we are excited about that. So I will hand it over to Martin to answer the more technical questions. Carl Martin Bengtsson: Alright. I will I will start with the tax rate. that is pretty straightforward. We should be finishing the year in that range of 22.5 to 23. I think we are at right now, we are at 22.7% year to date. And we are not seeing any larger structural change or anything that would significantly make us deviate from that rate. And from an oil price impact and so on, I mean, a couple of angles that this could be thought about. Obviously, we have a part of our business that is in our other segment. Right? So it is not in our human or our animal or specialty products. Where we sell some choline chloride into the fracking industry as you are well aware. which today-- So last year was a $5 million business, so very small. But it was at 1 point, right? If you go back 12 years, a $105 million business. So once upon a time, that was very significant. But now it is not and will we. Are we expecting that to come back in an environment like this where the oil prices are high and you are seeing some uptick in fracking, etcetera. And I think the short answer is not really. We would say not really. We are seeing a smaller uptick, So if we were a $5 million business last year, what is the current run rate? it is more like an, you know, $8 million type of run rate. And some of the reasons for that is that they--they have sort of reformulated in how what they put into the fracking fluids. They have started to reuse fluids and so on, where there is just a lot less demand for that. And you also see some more, what I would call, international fluids coming in at low prices going down the hole, so to speak, which is also partially why we are filing for antidumping here in The US. But I do not think that will be a big driver of upside for us only on the margin. So a higher oil price, otherwise, for us, obviously, means more inflation, right, both from a transportation and logistics from a utilities perspective, but also from petrochemical derived raw materials that we purchase. So net, I would probably say that high oil prices is not necessarily a good thing for us. It would be a net negative for us. So I think we would actually be quite happy if those oil prices started easing off here in the not too distant future. Just to support the overall markets. Raghuram Selvaraju: Thank you so much. Operator: Thank you. Your next question comes from the line of Artem Chubarov with Rothschild and Company. Your line is open. Please go ahead. Theodore L. Harris: Artem, are you there? Maybe we are having the same technical difficulty with Artem. We certainly cannot hear him. Operator: Artem, your line is open if you are there. As there are no further questions at this time, I will turn the call back over to Ted for some closing remarks. Theodore L. Harris: Once again, thank you all very much for joining our call today. We really are very pleased with the third quarter results we reported earlier today. And the outlook for our company Certainly appreciate your support as well as your time today. We look forward to reporting our Q4 and full-year 2026 results in February of next year. In the meantime, we will be participating in Baird's 54th Annual Global Industrial Conference on November 11 in Chicago. And CJS Securities' 27th annual New Ideas for the New Year conference on January 7, 2027, which is a virtual conference. So we hope to see some of you at 1 of those conferences, if not both. And thank you all for joining today. Operator: This concludes today's call. Thank you for attending. And 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 $361,596!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,303,935!* Now, it's worth noting Stock Advisor's total average return is 910% — a market-crushing outperformance compared to 211% 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 October 23, 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) Q3 2026 Earnings Call Transcript was originally published by The Motley Fool

MONTVALE, N.J., Oct. 23, 2026 (GLOBE NEWSWIRE) -- Balchem Corporation (NASDAQ: BCPC) today reported financial results for its 2026 fiscal third quarter ended September 30, 2026. For the quarter, the Company reported net sales of $290.7 million, net earnings of $46.7 million, adjusted EBITDA(a) of $80.3 million, and free cash flow(a) of $57.9 million. Ted Harris, Chairman, President and CEO of Balchem, said, "Balchem delivered another excellent quarter, with healthy growth across all three of our reporting segments and record consolidated quarterly net sales, net earnings, and adjusted EBITDA." Third Quarter 2026 Financial Highlights: - Net sales were $290.7 million, an increase of 8.6% from the prior year quarter. - GAAP net earnings were $46.7 million, an increase of 16.0% from the prior year quarter. - Adjusted EBITDA was $80.3 million, an increase of 12.4% from the prior year quarter. - GAAP earnings per share were $1.46 compared to $1.24 in the prior year quarter and adjusted earnings per share(a) were $1.57 compared to $1.35 in the prior year quarter. - Cash flows from operations were $69.8 million, with free cash flow of $57.9 million. - Sales and earnings from operations growth in all three of our reporting segments. Recent Highlights: - At the upcoming SupplySide Global trade show, we will showcase several of our latest Human Nutrition and Health technologies and innovations, including new science supporting VitaCholine®, K2VITAL™, Optifolin+® and OptiMSM®, as well as advances in performance nutrition and functional food and beverage applications. These innovations highlight the strength of our pipeline and our continued focus on developing differentiated, science-backed solutions that address important human health and wellness trends. - Balchem repurchased approximately $28 million of common stock during the third quarter and approximately $127 million over the trailing twelve months, reflecting the Company's balanced capital allocation strategy and commitment to long-term shareholder value creation. Mr. Harris added, "With strong results through the first nine months of the year and a healthy balance sheet, Balchem is well positioned to continue executing our strategic growth initiatives, and we remain excited about the future of our company." Results for Period EndedSeptember 30, 2026 (unaudited) (Dollars in thousands, except per share data) | | Three Months Ended September 30, | | Nine Months Ended September 30, | | | 2026 | | | | 2025 | | | | 2026 | | | | 2025 | Net sales | | $ | 290,658 | | | $ | 267,558 | | | $ | 845,364 | | | $ | 773,544 | Gross margin | | | 105,714 | | | | 95,453 | | | | 310,481 | | | | 276,734 | Operating expenses | | | 43,277 | | | | 40,874 | | | | 133,197 | | | | 119,698 | Earnings from operations | | | 62,437 | | | | 54,579 | | | | 177,284 | | | | 157,036 | Interest and other expenses | | | 2,393 | | | | 2,535 | | | | 6,937 | | | | 8,041 | Earnings before income tax expense | | | 60,044 | | | | 52,044 | | | | 170,347 | | | | 148,995 | Income tax expense | | | 13,316 | | | | 11,755 | | | | 38,719 | | | | 33,375 | Net earnings | | $ | 46,728 | | | $ | 40,289 | | | $ | 131,628 | | | $ | 115,620 | | | | | | | | | | | | | Diluted net earnings per common share | | $ | 1.46 | | | $ | 1.24 | | | $ | 4.09 | | | $ | 3.54 | | | | | | | | | | | | | Adjusted EBITDA (a) | | $ | 80,297 | | | $ | 71,447 | | | $ | 232,522 | | | $ | 206,961 | Adjusted net earnings (a) | | $ | 50,350 | | | $ | 43,982 | | | $ | 141,437 | | | $ | 125,560 | Adjusted net earnings per common share (a) | | $ | 1.57 | | | $ | 1.35 | | | $ | 4.40 | | | $ | 3.84 | | | | | | | | | | | | | Shares used in the calculations of diluted and adjusted net earnings per common share | | | 32,032 | | | | 32,595 | | | | 32,181 | | | | 32,702 | (a) | See "Non-GAAP Financial Information" for a reconciliation of GAAP and non-GAAP financial measures. Financial Results for the Third Quarter of 2026: The Human Nutrition and Health segment generated record quarterly sales of $188.2 million, an increase of $14.1 million, or 8.1%, 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 $45.6 million increased $4.8 million, or 11.8%, compared to $40.8 million in the prior year quarter, primarily due to the aforementioned higher sales and favorable mix, partially offset by 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 $48.9 million, compared to $44.1 million in the prior year quarter, an increase of 10.9%. The Animal Nutrition and Health segment generated quarterly sales of $63.0 million, an increase of $6.6 million, or 11.7%, compared to the prior year quarter. The increase was driven by higher sales in both the monogastric and ruminant species markets. Third quarter earnings from operations for this segment of $6.8 million increased $3.1 million, or 82.8%, compared to $3.7 million in the prior year quarter, primarily due to the aforementioned higher sales and favorable mix, partially offset by certain higher manufacturing input costs. 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 $7.0 million compared to $4.0 million in the prior year quarter, an increase of 73.6%. The Specialty Products segment generated quarterly sales of $37.3 million, an increase of $1.6 million, or 4.5%, compared to the prior year quarter, due to higher sales in the performance gases business. Earnings from operations for this segment of $12.3 million increased $0.8 million, or 6.6%, compared to $11.5 million in the prior year quarter, primarily driven by the aforementioned higher sales and favorable mix, partially offset by 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 $13.1 million, compared to $12.7 million in the prior year quarter, an increase of 3.0%. Consolidated quarterly gross margin of $105.7 million increased by $10.3 million, or 10.7%, compared to $95.5 million for the prior year comparable period. Gross margin as a percentage of sales was 36.4% compared to 35.7% in the prior year period, an increase of 70 basis points, primarily due to sales growth, favorable mix and manufacturing efficiencies, partially offset by certain higher manufacturing input costs. Operating expenses of $43.3 million for the quarter increased $2.4 million from the prior year comparable quarter, primarily due to higher compensation-related costs, partially offset by the net favorable impact of certain discrete items. Net interest expense was $1.9 million and $2.6 million in the third 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 September 30, 2026 and 2025 were 22.2% and 22.6%, respectively. The decrease in the effective tax rate was primarily due to higher favorable adjustments related to the filing of the prior year federal tax return and a higher foreign-derived intangible income deduction benefit, partially offset by an increase in certain state taxes. Third quarter cash flows provided by operating activities were $69.8 million and free cash flow was $57.9 million. Net working capital of $240.8 million as of September 30, 2026 included a cash balance of $66.3 million. Significant cash payments during the quarter included net debt payments of $28.0 million, income taxes paid of $27.8 million, repurchases of common stock of $27.4 million, and capital expenditures and intangible assets acquired of $12.5 million. Outstanding debt on our revolving loan was $124.0 million as of September 30, 2026 and our net debt (b) was $57.7 million, with an overall leverage ratio (c) on a net debt basis of 0.2 times. Mr. Harris said, "The Balchem team delivered another strong quarter in Q3 of 2026, and we remain confident in the long-term growth outlook for our company as we continue to execute our strategic growth initiatives." (b) | Net debt is defined as the outstanding balance on our revolving loan less cash and cash equivalents. (c) | Leverage ratio is defined as net debt divided by trailing twelve months adjusted EBITDA. Quarterly Conference Call A quarterly conference call will be held on Friday, October 23, 2026, at 11:00 AM Eastern Time (ET) to review third 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: 831870284, 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/831870284. The conference call will be available for replay shortly after the conclusion of the call at https://events.q4inc.com/attendee/831870284 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) Business Segment Net Sales: | | Three Months Ended September 30, | | Nine Months Ended September 30, | | | 2026 | | | | 2025 | | | | 2026 | | | | 2025 | Human Nutrition and Health | | $ | 188,227 | | | $ | 174,088 | | | $ | 536,749 | | | $ | 493,318 | Animal Nutrition and Health | | | 62,990 | | | | 56,376 | | | | 189,633 | | | | 169,681 | Specialty Products | | | 37,294 | | | | 35,683 | | | | 112,532 | | | | 106,143 | Other (d) | | | 2,147 | | | | 1,411 | | | | 6,450 | | | | 4,402 | Total | | $ | 290,658 | | | $ | 267,558 | | | $ | 845,364 | | | $ | 773,544 | | | | | | | | | | | | | (d) Other consists of a few minor businesses which individually do not meet the quantitative thresholds for separate presentation. Business Segment Earnings Before Income Taxes: | | Three Months Ended September 30, | | Nine Months Ended September 30, | | | 2026 | | | | 2025 | | | | 2026 | | | | 2025 | Human Nutrition and Health | | $ | 45,633 | | | $ | 40,831 | | | $ | 128,034 | | | $ | 117,147 | Animal Nutrition and Health | | | 6,789 | | | | 3,713 | | | | 17,708 | | | | 12,463 | Specialty Products | | | 12,301 | | | | 11,534 | | | | 37,129 | | | | 32,388 | Other and Unallocated (e) | | | (2,286 | ) | | | (1,499 | ) | | | (5,587 | ) | | | (4,962 | ) Interest and other expenses | | | (2,393 | ) | | | (2,535 | ) | | | (6,937 | ) | | | (8,041 | ) Total | | $ | 60,044 | | | $ | 52,044 | | | $ | 170,347 | | | $ | 148,995 | | | | | | | | | (e) Other and Unallocated consists of a few minor businesses which individually do not meet the quantitative thresholds for separate presentation and corporate expenses that have not been allocated to a segment. Unallocated corporate expenses consist of transaction and integration costs of $578 and $1,495 for the three and nine months ended September 30, 2026, respectively, and $333 and $1,227 for the three and nine months ended September 30, 2025, respectively. Selected Balance Sheet Items | | | | | | (Dollars in thousands) | | September 30, 2026 | | December 31, 2025 | | (unaudited) | | | | | | | | | Cash and cash equivalents | | $ | 66,264 | | | $ | 74,570 | Accounts receivable, net | | | 145,635 | | | | 143,596 | Inventories | | | 177,006 | | | | 131,449 | Other current assets | | | 15,972 | | | | 15,999 | Total current assets | | | 404,877 | | | | 365,614 | | | | | | | Property, plant and equipment, net | | | 306,135 | | | | 306,648 | Goodwill | | | 807,487 | | | | 816,375 | Intangible assets with finite lives, net | | | 147,366 | | | | 163,289 | Right of use assets | | | 17,683 | | | | 16,192 | Other assets | | | 20,024 | | | | 18,134 | Total non-current assets | | | 1,298,695 | | | | 1,320,638 | | | | | | | Total assets | | $ | 1,703,572 | | | $ | 1,686,252 | | | | | | | Current liabilities | | $ | 164,115 | | | $ | 176,384 | Revolving loan | | | 124,000 | | | | 164,000 | Deferred income taxes | | | 52,273 | | | | 54,143 | Other long-term obligations | | | 36,407 | | | | 34,312 | Total liabilities | | | 376,795 | | | | 428,839 | | | | | | | Stockholders' equity | | | 1,326,777 | | | | 1,257,413 | | | | | | | Total liabilities and stockholders' equity | | $ | 1,703,572 | | | $ | 1,686,252 | Balchem Corporation Condensed Consolidated Statements of Cash Flows (Dollars in thousands) (unaudited) | | Nine Months Ended September 30, | | | 2026 | | | | 2025 | Cash flows from operating activities: | | | | Net earnings | | $ | 131,628 | | | $ | 115,620 | Adjustments to reconcile net earnings to net cash provided by operating activities: | | | | Depreciation and amortization | | | 37,100 | | | | 33,969 | Stock compensation expense | | | 16,316 | | | | 14,298 | Other adjustments | | | 3,037 | | | | (1,692 | ) Changes in assets and liabilities | | | (31,537 | ) | | | (12,914 | ) Net cash provided by operating activities | | | 156,544 | | | | 149,281 | | | | | Cash flows from investing activities: | | | | Capital expenditures and intangible assets acquired | | | (29,605 | ) | | | (27,275 | ) Cash paid for acquisitions, net of cash acquired | | | — | | | | (323 | ) Proceeds from the sale of assets | | | 7 | | | | 267 | Investment in affiliates | | | (155 | ) | | | (144 | ) Net cash used in investing activities | | | (29,753 | ) | | | (27,475 | ) | | | | Cash flows from financing activities: | | | | Proceeds from revolving loan | | | 88,000 | | | | 70,000 | Principal payments on revolving loan | | | (128,000 | ) | | | (106,000 | ) Principal payments on finance leases | | | (153 | ) | | | (145 | ) Cash paid for financing costs | | | (1,943 | ) | | | — | Proceeds from stock options exercised | | | 11,589 | | | | 6,867 | Dividends paid | | | (30,773 | ) | | | (28,276 | ) Repurchases of common stock | | | (71,925 | ) | | | (54,008 | ) Net cash used in financing activities | | | (133,205 | ) | | | (111,562 | ) | | | | Effect of exchange rate changes on cash | | | (1,892 | ) | | | 5,334 | | | | | (Decrease) increase in cash and cash equivalents | | | (8,306 | ) | | | 15,578 | | | | | Cash and cash equivalents, beginning of period | | | 74,570 | | | | 49,515 | Cash and cash equivalents, end of period | | $ | 66,264 | | | $ | 65,093 | 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. Table 1 (unaudited) Reconciliation of Non-GAAP Measures to GAAP (Dollars in thousands, except per share data) | | Three Months Ended September 30, | | Nine Months Ended September 30, | | | 2026 | | | | 2025 | | | | 2026 | | | | 2025 | Reconciliation of adjusted gross margin | | | | | | | | GAAP gross margin | | $ | 105,714 | | | $ | 95,453 | | | $ | 310,481 | | | $ | 276,734 | Amortization of intangible assets and finance leases (1) | | | 715 | | | | 739 | | | | 2,162 | | | | 2,156 | Adjusted gross margin | | $ | 106,429 | | | $ | 96,192 | | | $ | 312,643 | | | $ | 278,890 | | | | | | | | | Reconciliation of adjusted earnings from operations | | | | | | | | GAAP earnings from operations | | $ | 62,437 | | | $ | 54,579 | | | $ | 177,284 | | | $ | 157,036 | Amortization of intangible assets and finance leases (1) | | | 4,333 | | | | 4,394 | | | | 13,137 | | | | 12,819 | Transaction and integration costs (2) | | | 578 | | | | 333 | | | | 1,495 | | | | 1,227 | Nonqualified deferred compensation plan expense (3) | | | (45 | ) | | | 404 | | | | 572 | | | | 839 | Restructuring costs (4) | | | — | | | | — | | | | — | | | | (192 | ) Adjusted earnings from operations | | $ | 67,303 | | | $ | 59,710 | | | $ | 192,488 | | | $ | 171,729 | | | | | | | | | Reconciliation of adjusted net earnings | | | | | | | | GAAP net earnings | | $ | 46,728 | | | $ | 40,289 | | | $ | 131,628 | | | $ | 115,620 | Amortization of intangible assets and finance leases (1) | | | 4,433 | | | | 4,467 | | | | 13,381 | | | | 13,035 | Transaction and integration costs (2) | | | 578 | | | | 333 | | | | 1,495 | | | | 1,227 | Restructuring costs (4) | | | — | | | | — | | | | — | | | | (192 | ) Income tax adjustment (5) | | | (1,389 | ) | | | (1,107 | ) | | | (5,067 | ) | | | (4,130 | ) Adjusted net earnings | | $ | 50,350 | | | $ | 43,982 | | | $ | 141,437 | | | $ | 125,560 | | | | | | | | | Adjusted net earnings per common share - diluted | | $ | 1.57 | | | $ | 1.35 | | | $ | 4.40 | | | $ | 3.84 | Table 2 (unaudited) Reconciliation of GAAP Net Earnings to EBITDA and to Adjusted EBITDA (Dollars in thousands) | | Three Months Ended September 30, | | Nine Months Ended September 30, | | 2026 | | | | 2025 | | | | 2026 | | | | 2025 | Net earnings - as reported | | $ | 46,728 | | | $ | 40,289 | | | $ | 131,628 | | | $ | 115,620 | Add back: | | | | | | | | | | Provision for income taxes | | | 13,316 | | | | 11,755 | | | | 38,719 | | | | 33,375 | Interest and other expenses | | | 2,393 | | | | 2,535 | | | | 6,937 | | | | 8,041 | Depreciation and amortization | | | 12,288 | | | | 11,481 | | | | 36,855 | | | | 33,753 | EBITDA | | | 74,725 | | | | 66,060 | | | | 214,139 | | | | 190,789 | Add back: | | | | | | | | | | Non-cash compensation expense related to equity awards | | | 5,039 | | | | 4,650 | | | | 16,316 | | | | 14,298 | Transaction and integration costs (2) | | | 578 | | | | 333 | | | | 1,495 | | | | 1,227 | Nonqualified deferred compensation plan expense (3) | | | (45 | ) | | | 404 | | | | 572 | | | | 839 | Restructuring costs (4) | | | — | | | | — | | | | — | | | | (192 | ) Adjusted EBITDA | | $ | 80,297 | | | $ | 71,447 | | | $ | 232,522 | | | $ | 206,961 | Table 3 (unaudited) Reconciliation of GAAP Effective Income Tax Rate to Non-GAAP Effective Income Tax Rate (Dollars in thousands) | | Three Months Ended September 30, | | 2026 | | | Effective Tax Rate | | | 2025 | | | Effective Tax Rate GAAP Income Tax Expense | | $ | 13,316 | | | 22.2 | % | | $ | 11,755 | | | 22.6 | % Impact of ASU 2016-09 (6) | | | 260 | | | | | | 21 | | | Adjusted Income Tax Expense | | $ | 13,576 | | | 22.6 | % | | $ | 11,776 | | | 22.6 | % | | Nine Months Ended September 30, | | 2026 | | | Effective Tax Rate | | | 2025 | | | Effective Tax Rate GAAP Income Tax Expense | | $ | 38,719 | | | 22.7 | % | | $ | 33,375 | | | 22.4 | % Impact of ASU 2016-09 (6) | | | 1,550 | | | | | | 894 | | | Adjusted Income Tax Expense | | $ | 40,269 | | | 23.6 | % | | $ | 34,269 | | | 23.0 | % Table 4 (unaudited) Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow (Dollars in thousands) | | Three Months Ended September 30, | | Nine Months Ended September 30, | | | 2026 | | | | 2025 | | | | 2026 | | | | 2025 | Net cash provided by operating activities | | $ | 69,772 | | | $ | 65,572 | | | $ | 156,544 | | | $ | 149,281 | Capital expenditures and proceeds from the sale of assets | | | (11,863 | ) | | | (14,891 | ) | | | (28,559 | ) | | | (26,866 | ) Free cash flow | | $ | 57,909 | | | $ | 50,681 | | | $ | 127,985 | | | $ | 122,415 | (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 items 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 nine months ended September 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.

This article first appeared on GuruFocus. - Revenue: Record consolidated revenue of $291 million, up 8.6% year over year. - Gross Margin: $106 million, up 10.7%; gross margin rate expanded 70 basis points to 36.4%. - Operating Expenses: $43 million versus $41 million in the prior year. - GAAP Earnings from Operations: Record $62 million, up 14.4%. - Adjusted Earnings from Operations: $67 million, up 12.7%. - Adjusted EBITDA: Record $80 million, up 12.4%; adjusted EBITDA margin of 27.6%. - Net Income: Record GAAP net income of $47 million, up 16%; diluted EPS of $1.46, up 17.7%. - Adjusted Net Earnings: Record $50 million, up 14.5%; adjusted diluted EPS of $1.57, up 16.3%. - Net Interest Expense: $2 million, down $1 million from the prior year. - Effective Tax Rate: 22.2% versus 22.6% in the prior year. - Cash Flow: Cash flows from operations of $70 million; free cash flow of $58 million; cash balance of $66 million. - Capital Returns & Leverage: Repurchased ~$28 million of common stock; reduced net borrowings by $28 million; net leverage ratio of 0.2 times. - Human Nutrition & Health Sales: Record $188 million, up 8.1%. - Human Nutrition & Health Earnings: Record earnings from operations of $46 million, up 11.8%; adjusted earnings of $49 million, up 10.9%. - Animal Nutrition & Health Sales: $63 million, up 11.7%. - Animal Nutrition & Health Earnings: Earnings from operations of $6.8 million, up 82.8%; adjusted earnings of $7 million, up 73.6%. - Specialty Products Sales: $37 million, up 4.5%. - Specialty Products Earnings: Earnings from operations of $12 million, up 6.6%; adjusted earnings of $13 million, up 3%. - Warning! GuruFocus has detected 2 Warning Sign with BCPC. - Is BCPC fairly valued? Test your thesis with our free DCF calculator. Release Date: October 23, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. - Balchem Corp (NASDAQ:BCPC) reported record quarterly consolidated sales of $291 million, up 8.6% year-over-year, with growth across all three segments. - The company achieved record adjusted EBITDA of $80 million, up 12.4%, marking the 29th consecutive quarter of year-over-year adjusted EBITDA growth. - Gross margin expanded 70 basis points to 36.4%, driven by higher sales, favorable product mix, and manufacturing efficiencies. - Balchem Corp (NASDAQ:BCPC) generated strong cash flows from operations of $70 million and free cash flow of $58 million, enabling investments and shareholder returns. - New scientific studies supporting VitaCholine and K2VITAL DELTA provide encouraging evidence for cognitive and cardiovascular health benefits, strengthening the scientific foundation of these branded ingredients. - Balchem Corp (NASDAQ:BCPC) faces ongoing inflationary pressures on raw materials, which, while passed through to customers, can be margin dilutive. - Inventory levels increased to $177 million, driven by inflation, growth, risk mitigation, and product launches, which may tie up capital. - The Animal Nutrition & Health segment still faces challenges in Europe from circumvention and absorption of antidumping duties, requiring ongoing vigilance. - High oil prices are a net negative for Balchem Corp (NASDAQ:BCPC) due to increased transportation, logistics, utilities, and petrochemical raw material costs. - The company expects sequential decline in Q4 results due to typical seasonality, which could impact short-term performance. Q: Can you elaborate on the favorable mix benefits driving margins by segment, whether they're sustainable, and how inflation is being managed? A: CFO Martin Bengtsson explained that within Human Nutrition & Health, the higher-margin nutrition business is growing faster than the food business, creating a favorable mix tailwind. Similarly, in Animal Nutrition & Health, the higher-margin ruminant (dairy) business is growing faster than monogastric. Specialty Products is also very high margin and growing. On inflation, he noted raw material costs have risen all year, but Balchem has passed them through to customers, leaving the company roughly breakeven year-to-date, with a slight margin-dilutive effect offset by beneficial portfolio mix. Q: Can you elaborate on the two newly published trials (Alzheimer's/choline and cardiovascular/K2) and the next steps for each? A: CEO Ted Harris said the MD Anderson/MIT choline pilot study is significant because choline has historically been recognized mainly for infant cognition, while this focuses on adult cognition and Alzheimer's risk in APOE4 carriersa small pilot that will lead to a much larger study. The K2VITAL DELTA DANCODE trial published in Circulation involved 400 subjects over a longer period and showed cardiovascular benefit, distinct from K2's traditional bone-health science. Next steps for both are marketing efforts to build customer and consumer awareness around the science. Q: What is driving the strong Animal Nutrition & Health growth and earnings improvement, and how sustainable is it? A: CFO Martin Bengtsson attributed growth to continued penetration of rumen-encapsulated nutrients (methionine, lysine, choline) in ruminants, supported by a new encapsulated lysine launched last year and a next-generation encapsulated methionine rolled out October 1. Growth is accelerating internationally across Europe, the Middle East and Asia. On monogastric, EU antidumping duties have helped regain volumes and pricing, though circumvention remains a battle, and Balchem has filed for US antidumping with a preliminary ruling expected toward year-end. US pricing has offset higher input costs. Q: Why has inventory risen to about $177 million, and what is driving that increase? A: CFO Martin Bengtsson cited four reasons: inflationary pressure raising the cost of inventory held; ~9% year-to-date company growth requiring more inventory to support sales; deliberate risk-mitigation safety stock for critical raw materials given Middle East and geopolitical disruptions; and inventory build ahead of coming product launches. He said the company will continue monitoring the right risk balance going forward. Q: What other directions might Balchem pursue in future clinical investigation, such as exercise, recovery, athletic performance and sleep? A: CEO Ted Harris said muscle recovery, sleep (magnesium for anxiety and ease of sleeping), and "beauty from within" (e.g., OptiMSM for hair, nail and skin benefits) are all relevant areas with existing studies that will continue to be a focus. He also flagged additional choline benefits around liver health, energy and focus as ripe for further study, emphasizing that the library of science behind these nutrients is foundational and will continue to receive healthy investment. Q: Would Balchem explore partnerships in the aesthetic/beauty space, and are more high-profile sports marketing partnerships planned? A: CEO Ted Harris said partnerships in beauty are a clear opportunity being explored, since Balchem is not a cosmetics company but has nutritional expertise and a nutrient portfolio relevant to what leading beauty companies are working on. On sports, he said the NFL New York Jets (now in roughly its fourth year) and Bayern Munich Women's team partnerships have performed well, and Balchem is contemplating another partnership with a more international/global aspect that it expects to announce before the next earnings call. Q: Could elevated oil prices and increased US fracking activity benefit divisions outside Animal and Human Nutrition, and what is the expected effective tax rate? A: CFO Martin Bengtsson said the fracking-related choline chloride business was $5 million last year and is now running at roughly $8 million, but he does not expect a major rebound because of reformulated fracking fluids, fluid reuse and low-priced international imports. Net-net, he views high oil prices as a negative due to transportation, utilities and petrochemical raw material inflation. He expects the full-year effective tax rate in the 22.5%23% range, consistent with the 22.7% year-to-date rate. Q: What is the outlook for the fourth quarter given normal seasonality? A: CFO Martin Bengtsson said the fourth quarter is normally sequentially lower than the third quarter based on historic business seasonality, but the company remains confident in delivering healthy year-over-year growth in Q4, as it has done all year. Q: What drove the record third-quarter consolidated results and margin expansion? A: CEO Ted Harris reported record consolidated sales of $291 million, up 8.6%, with growth across all three segments, record GAAP earnings from operations of $62 million (up 14.4%), record net income of $47 million (up 16%) and record adjusted EBITDA of $80 million (up 12.4%). CFO Martin Bengtsson added that gross margin expanded 70 basis points to 36.4% on higher sales, favorable product mix and manufacturing efficiencies, partially offset by higher input costs. Ted noted this marked the 29th consecutive quarter of year-over-year adjusted EBITDA growth. Q: How strong was cash generation and capital deployment in the quarter? A: CFO Martin Bengtsson reported cash flows from operations of $70 million and free cash flow of $58 million, ending the quarter with $66 million of cash. Balchem repurchased about $28 million of common stock and reduced net borrowings by $28 million, resulting in a net leverage ratio of 0.2 times. Combined with the expanded $650 million credit facility put in place in July, he said the company is well positioned to fund innovation, capacity expansion and strategic acquisitions. Q: How did each segment perform in the third quarter? A: CFO Martin Bengtsson reported Human Nutrition & Health record sales of $188 million, up 8.1%, with earnings from operations up 11.8% to a record $46 million. Animal Nutrition & Health sales were $63 million, up 11.7%, with earnings from operations up 82 For the complete transcript of the earnings call, please refer to the full earnings call transcript.

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.