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>>> Balchem Corporation Reports Record First Quarter Sales of $232.5 Million, with Net Earnings of $22.7 Million, GAAP EPS of $0.70, and Adjusted EPS of $0.94


GlobeNewswire

Balchem Corp

April 28, 2023


https://finance.yahoo.com/news/balchem-corporation-reports-record-first-110000333.html


MONTVALE, N.J., April 28, 2023 (GLOBE NEWSWIRE) -- Balchem Corporation (NASDAQ: BCPC) reported today first quarter net sales of $232.5 million for 2023, compared to net sales of $228.9 million in the prior year quarter. First quarter net earnings were $22.7 million for 2023, compared to net earnings of $28.9 million for the first quarter 2022, with adjusted net earnings(a) of $30.6 million, compared to $33.4 million in the prior year quarter. First quarter adjusted EBITDA(a) was $56.1 million, compared to $53.6 million in the prior year quarter.

First Quarter 2023 Financial Highlights:

Record first quarter net sales were $232.5 million, an increase of $3.7 million, or 1.6%, compared to the prior year.

Record first quarter adjusted EBITDA was $56.1 million, an increase of $2.5 million, or 4.8%, from the prior year.

GAAP net earnings were $22.7 million, a decrease of $6.2 million, or 21.5% from the prior year. These net earnings resulted in GAAP earnings per share of $0.70.

Adjusted net earnings were $30.6 million, a decrease of $2.8 million or 8.3% from the prior year. These adjusted net earnings resulted in adjusted earnings per share(a) of $0.94.

The effective tax rate of 22.0% was 111 basis points lower than the prior year tax rate of 23.1%.

Cash flows from operations were $34.8 million for the first quarter 2023, an increase of 396.2% from the prior year, with quarterly free cash flow(a) of $25.2 million.

Recent Highlights:

On April 26, we released our 2022 Sustainability Report, which captures the Company’s continued commitment to managing our Environmental, Social and Governance (ESG) performance. Our sustainability initiatives are embedded in our business strategies and our Sustainability Report captures the progress made towards not only our 2030 goals around greenhouse gas emissions and water usage reduction by 25%, but also our continued commitment toward advancing diversity, inclusion, and belonging at Balchem.

Ted Harris, Chairman, President, and CEO of Balchem said, “We delivered solid first quarter financial performance with sales and adjusted EBITDA growth both compared to prior year’s very strong results, and sequentially compared to the fourth quarter of 2022. The markets continue to be challenging with a high degree of uncertainty around the broader economic outlook, but Balchem’s resilience and strong market positions enabled us to continue to deliver solid financial results within this difficult economic backdrop.”

Mr. Harris added, “I am also very pleased with our progress around our environmental, social, and governance efforts as detailed in our Sustainability Report. Sustainability is at the heart of our company’s higher purpose of making the world a healthier place and we continue to make good progress towards our goals, while acting as strong stewards of all of our stakeholders.”

The Human Nutrition & Health segment generated quarterly sales of $132.7 million, an increase of $10.2 million, or 8.3%, compared to the prior year quarter. The increase was primarily driven by the contribution from recent acquisitions, partially offset by lower sales within the minerals and nutrients business and food and beverage markets. First quarter earnings from operations for this segment of $18.4 million decreased $1.9 million, or 9.2%, compared to $20.3 million in the prior year quarter, primarily due to increases in manufacturing input costs and increased operating expenses and amortization related to recent acquisitions, partially offset by higher average selling prices. Excluding the effect of non-cash expense associated with amortization of acquired intangible assets and other adjustments, adjusted earnings from operations(a) for this segment were $26.8 million, compared to $24.3 million in the prior year quarter, an increase of 10.5%. Sequentially, compared with the fourth quarter of 2022, sales increased 1.7% in the first quarter of 2023 and adjusted earnings from operations increased 14.1%.

The Animal Nutrition & Health segment generated quarterly sales of $64.9 million, a decrease of $4.5 million, or 6.4%, compared to the prior year quarter. The decrease was driven by lower sales in both monogastric and ruminant species markets in Europe and an unfavorable impact related to changes in foreign currency exchange rates, partially offset by higher sales in both monogastric and ruminant species markets in North America. First quarter earnings from operations for this segment of $9.5 million decreased $1.8 million, or 16.1%, compared to $11.3 million in the prior year quarter, primarily due to the aforementioned lower sales, increases in manufacturing input costs and higher operating costs, partially offset by pricing actions. 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 $9.9 million compared to $11.5 million in the prior year quarter, a decrease of 13.4%. Sequentially, compared with the fourth quarter of 2022, sales and adjusted earnings were essentially flat in the first quarter of 2023.

The Specialty Products segment generated quarterly sales of $32.2 million, a decrease of $1.1 million, or 3.3%, compared to the prior year quarter, primarily due to lower plant nutrition sales and an unfavorable impact related to changes in foreign currency exchange rates, partially offset by higher sales of products in the performance gases business. Earnings from operations for this segment were $7.9 million, compared to $7.8 million in the prior year comparable quarter, an increase of $0.2 million, or 2.4%, primarily driven by higher average selling prices, partially offset by lower sales volumes, 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 $9.0 million, compared to $8.9 million in the prior year quarter, an increase of 1.1%. Sequentially, compared with the fourth quarter of 2022, sales increased 1.3% in the first quarter of 2023 and adjusted earnings from operations were essentially flat.

Consolidated gross margin for the quarter ended March 31, 2023 of $73.2 million increased by $1.7 million or 2.3%, compared to $71.5 million for the prior year comparable period. Gross margin as a percentage of sales was 31.5% as compared to 31.2% in the prior year period, an increase of 30 basis points, primarily due to higher average selling prices partially offset by increases in certain manufacturing input costs. Operating expenses of $38.8 million for the quarter increased $5.6 million from the prior year comparable quarter, primarily due to incremental expenses and amortization from the Kappa and Bergstrom acquisitions. Excluding non-cash operating expenses associated with amortization of intangible assets of $6.7 million, operating expenses were $32.1 million, or 13.8% of sales.

Interest expense was $5.6 million and $0.5 million in the first quarter of 2023 and 2022, respectively. Our effective tax rates for the three months ended March 31, 2023 and 2022 were 22.0% and 23.1%, respectively. The decrease in the effective tax rate from the prior year was primarily due to higher tax benefits from stock based compensation, an increase in certain tax credits and certain lower state taxes.

For the quarter ended March 31, 2023, cash flows provided by operating activities were $34.8 million, and free cash flow was $25.2 million. The $219.1 million of net working capital on March 31, 2023 included a cash balance of $60.2 million, dividend payments of $22.9 million, and capital expenditures and intangible assets acquired of $9.7 million. The cash balance also reflects the net repayments of the revolving loan of $9.0 million.

Ted Harris said, “The Balchem team delivered record first quarter sales and adjusted EBITDA results, once again highlighting the resilience of our business model, particularly in light of the persistent market volatility and economic uncertainty we are experiencing. We are well positioned in the markets we serve and remain confident in the long-term growth outlook for our markets as we continue to focus on progressing our strategic growth initiatives in 2023 and beyond.”

Quarterly Conference Call

A quarterly conference call will be held on Friday, April 28, 2023, at 11:00 AM Eastern Time (ET) to review first quarter 2023 results. Ted Harris, Chairman, President and CEO and Martin Bengtsson, CFO will host the call. We invite you to listen to the conference by calling toll-free 1-877-407-8289 (local dial-in 1-201-689-8341), five minutes prior to the scheduled start time of the conference call. The conference call will be available for replay two hours after the conclusion of the call through end of day Friday, May 12, 2023. To access the replay of the conference call, dial 1-877-660-6853 (local dial-in 1-201-612-7415), and use conference ID #13737969.

Segment Information

Balchem Corporation reports three business segments: Human Nutrition & Health, Animal Nutrition & Health, and Specialty Products. The Human Nutrition & 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 & Health segment manufactures and supplies products to numerous animal health markets. Through Specialty Products, Balchem provides specialty-packaged chemicals 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".

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