Ted Harris, Chairman, President and CEO of Balchem said, "In the third quarter, our company continued to deliver strong growth, 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 food ingredient formulation systems and capabilities."
Third Quarter 2025 Financial Highlights:
Record net sales of $267.6 million, an increase of $27.6 million, or 11.5%, compared to the prior year quarter.
GAAP net earnings were $40.3 million, an increase of 19.1%, from the prior year quarter.
Record adjusted EBITDA was $71.4 million, an increase of 11.0%, from the prior year quarter.
GAAP earnings per share of $1.24 compared to $1.03 in the prior year quarter and record adjusted earnings per share(a) of $1.35 compared to $1.13 in the prior year quarter.
Cash flows from operations were $65.6 million, with free cash flow(a) of $50.7 million.
Sales and earnings from operations growth in all three of our reporting segments.
Recent Highlights:
Balchem has received the necessary approvals to move forward with the project to build its new state-of-the-art food ingredient and nutraceutical microencapsulation manufacturing facility in Orange County, NY, which will more than double capacity for its fast-growing microencapsulation technologies.
We have seen good results year to date from our sponsored research efforts with five new studies being published in the third quarter, one of which being the long awaited choline "biomarker" study, a double-blind randomized control feeding study at the University of North Carolina that successfully identified that choline and betaine concentrations in plasma, when measured together, do indeed predict dietary choline intake in healthy humans.
Strong cash flows in the third quarter enabled us to make net repayments on our revolving debt of $36.0 million, bringing our net debt (b) to $88.9 million, with an overall leverage ratio (c) on a net debt basis of 0.3 times.
Mr. Harris said, "The third quarter was another excellent quarter for Balchem. We delivered record financial results, with strong growth in all three of our reporting segments, while continuing to make good progress on our strategic growth initiatives."
Results for Period EndedSeptember 30, 2025 (unaudited)(Dollars in thousands, except per share data)
Three Months EndedSeptember 30,
Nine Months EndedSeptember 30,
2025
2024
2025
2024
Net sales
$
267,558
$
239,940
$
773,544
$
713,680
Gross margin
95,453
85,361
276,734
249,869
Operating expenses
40,874
37,369
119,698
114,404
Earnings from operations
54,579
47,992
157,036
135,465
Interest and other expenses
2,535
4,099
8,041
13,496
Earnings before income tax expense
52,044
43,893
148,995
121,969
Income tax expense
11,755
10,056
33,375
27,077
Net earnings
$
40,289
$
33,837
$
115,620
$
94,892
Diluted net earnings per common share
$
1.24
$
1.03
$
3.54
$
2.90
Adjusted EBITDA(a)
$
71,447
$
64,379
$
206,961
$
187,515
Adjusted net earnings(a)
$
43,982
$
36,928
$
125,560
$
106,089
Adjusted net earnings per common share(a)
$
1.35
$
1.13
$
3.84
$
3.25
Shares used in the calculations of diluted and adjusted net earnings per common share
32,595
32,783
32,702
32,686
(a)
See "Non-GAAP Financial Information" for a reconciliation of GAAP and non-GAAP financial measures.
(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.
Financial Results for the Third Quarter of 2025:
The Human Nutrition and Health segment generated record sales of $174.1 million, an increase of $21.8 million, or 14.3%, compared to the prior year quarter. The increase was driven by higher sales within both the nutrients business and the food ingredients and solutions businesses. Record earnings from operations for this segment of $40.8 million increased $5.3 million, or 14.8%, compared to $35.6 million in the prior year quarter, primarily due to the aforementioned higher sales and a favorable mix, partially offset by certain higher manufacturing input costs and higher operating expenses. Excluding the effect of non-cash expense associated with amortization of acquired intangible assets and other adjustments, record adjusted earnings from operations(a) for this segment were $44.1 million, compared to $39.0 million in the prior year quarter, an increase of 13.2%.
The Animal Nutrition and Health segment generated quarterly sales of $56.4 million, an increase of $3.5 million, or 6.6%, compared to the prior year quarter. The increase was driven by higher sales in both the ruminant and monogastric species markets. Third quarter earnings from operations for this segment of $3.7 million increased $0.2 million, or 5.2%, compared to $3.5 million in the prior year quarter, primarily due to the aforementioned higher sales and a favorable mix, partially offset by certain higher manufacturing input costs and higher operating expenses. Excluding the effect of non-cash expense associated with amortization of acquired intangible assets and other adjustments, adjusted earnings from operations for this segment were $4.0 million for both the current and prior year quarter.
The Specialty Products segment generated quarterly sales of $35.7 million, an increase of $2.5 million, or 7.5%, 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 were $11.5 million, compared to $10.5 million in the prior year comparable quarter, an increase of 9.7%, primarily driven by the aforementioned higher sales. Excluding the effect of non-cash expense associated with amortization of acquired intangible assets and other adjustments, record adjusted earnings from operations for this segment were $12.7 million, compared to $11.7 million in the prior year quarter, an increase of 8.8%.
Consolidated quarterly gross margin of $95.5 million increased by $10.1 million, or 11.8%, compared to $85.4 million for the prior year comparable period. Gross margin as a percentage of sales was 35.7% as compared to 35.6% in the prior year period, an increase of 10 basis points. Operating expenses of $40.9 million for the quarter increased $3.5 million from the prior year comparable quarter, primarily due to an increase in professional services and higher compensation-related costs.
Net interest expense was $2.6 million and $4.1 million in the third quarters of 2025 and 2024, respectively. The decrease in interest expense was primarily due to lower outstanding borrowings. Our effective tax rates for the three months ended September 30, 2025 and 2024 were 22.6% and 22.9%, respectively. The lower effective tax rate was primarily due to certain lower state taxes.
Third quarter cash flows provided by operating activities were $65.6 million and free cash flow was $50.7 million. The $217.3 million of net working capital on September 30, 2025 included a cash balance of $65.1 million. Significant cash payments during the quarter included net repayments on the revolving loan of $36.0 million, repurchases of common stock of $15.4 million, and capital expenditures and intangible assets acquired of $14.9 million.
Ted Harris said, "Once again, I would like to take this opportunity to thank the entire Balchem team for their contributions to the excellent performance of the company, and for continuing to advance our strategic priorities."
Quarterly Conference Call
A quarterly conference call will be held on Tuesday, October 21, 2025, at 11:00 AM Eastern Time (ET) to review third quarter 2025 results. Ted Harris, Chairman, President and CEO and Martin Bengtsson, CFO will host the call. Institutional investors and analysts are invited to join the live call by dialing 800-715-9871 (toll free USA/Canada), +1-646-307-1963 (USA/International) or 647-932-3411 (Canada/Toronto), five minutes prior to the scheduled start time of the conference call. All others are invited to listen to the live webcast at https://events.q4inc.com/attendee/857727932. The conference call will be available for replay shortly after the conclusion of the call at https://events.q4inc.com/attendee/857727932 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 EndedSeptember 30,
Nine Months EndedSeptember 30,
2025
2024
2025
2024
Human Nutrition and Health
$
174,088
$
152,283
$
493,318
$
452,955
Animal Nutrition and Health
56,376
52,906
169,681
156,384
Specialty Products
35,683
33,191
106,143
99,898
Other(d)
1,411
1,560
4,402
4,443
Total
$
267,558
$
239,940
$
773,544
$
713,680
(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 EndedSeptember 30,
Nine Months EndedSeptember 30,
2025
2024
2025
2024
Human Nutrition and Health
$
40,831
$
35,578
$
117,147
$
102,202
Animal Nutrition and Health
3,713
3,529
12,463
8,282
Specialty Products
11,534
10,516
32,388
29,943
Other and Unallocated(e)
(1,499
)
(1,631
)
(4,962
)
(4,962
)
Interest and other expenses
(2,535
)
(4,099
)
(8,041
)
(13,496
)
Total
$
52,044
$
43,893
$
148,995
$
121,969
