Balchem Corporation (Nasdaq:BCPC) reported as follows (unaudited)
for the period ended December 31, 2009.
($000 Omitted Except for Net Earnings per Share)
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For the Three Months Ended December 31,
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|
|
|
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2009
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2008
|
|
|
|
Net sales
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$ 59,184
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$ 54,053
|
Gross profit
|
16,957
|
13,432
|
Operating expenses
|
6,196
|
5,954
|
Earnings from operations
|
10,761
|
7,478
|
Other income (expense)
|
49
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(175)
|
Earnings before income tax expense
|
10,810
|
7,303
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Income tax expense
|
3,844
|
2,411
|
Net earnings
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$ 6,966
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$ 4,892
|
|
|
|
Basic net earnings per common share
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$ 0.25
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$ 0.18
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Diluted net earnings per common share
|
$ 0.24
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$ 0.17
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|
|
|
Shares used in the calculation of diluted net
earnings per common share
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29,224
|
28,642
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|
For the Twelve Months Ended December
31,
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2009
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2008
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|
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Net sales
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$ 219,438
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$ 232,050
|
Gross profit
|
66,958
|
52,578
|
Operating expenses
|
26,299
|
23,230
|
Earnings from operations
|
40,659
|
29,348
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Other expense
|
(57)
|
(917)
|
Earnings before income tax expense
|
40,602
|
28,431
|
Income tax expense
|
13,817
|
9,381
|
Net earnings
|
$ 26,785
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$ 19,050
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|
|
|
Basic net earnings per common share
|
$ 0.98
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$ 0.71
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Diluted net earnings per common share
|
$ 0.93
|
$ 0.67
|
|
|
|
Shares used in the calculation of diluted net
earnings per common share
|
28,874
|
28,521
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Record Quarterly Earnings and Sales
For the quarter ended December 31, 2009, the company achieved
record net earnings of $7.0 million, an increase of $2.1 million,
or 42.4%. The $7.0 million generated diluted net earnings per
common share of $0.24, versus $0.17 for the prior year comparable
period, an increase of 41.2%. Record fourth quarter net sales of
$59.2 million were approximately 9.5% greater than the $54.1
million result of the prior year comparable quarter; and on a
sequential basis, were 9.0% greater than the third quarter 2009
result.
Detailing this fourth quarter of 2009, Animal Nutrition &
Health ("ANH"), including specialties, choline and industrial
derivative product sales, totaled $40.4 million, an increase of
8.7%, or $3.2 million from the prior year comparable quarter.
Within North American poultry production markets, levels appear to
have stabilized and are showing modest growth, resulting in
improved sales of choline and certain specialty ingredients. We
continue to focus efforts in the international poultry and swine
markets, where we realized 39% revenue improvement over the prior
year comparable quarter, from exports and European produced choline
in particular. The ANH specialty ingredients, largely targeted to
the ruminant and companion animal markets, realized 27% sales
growth from the prior year comparable quarter, as some regional
improvement in dairy economics created improved demand for these
products, particularly chelates and Aminoshure-L®, our
rumen protected lysine. Sales of industrial derivatives (both
choline and methylamines) were essentially flat with the prior year
quarter; however, there was approximately 11% improvement on a
sequential basis. Earnings from operations for the entire ANH
segment increased to $5.9 million as compared to $2.9 million in
the prior year comparable quarter. The above noted increase in
sales, product/geographic mix, reductions in key raw materials and
improved production/supply chain efficiencies in both the U.S. and
Europe led to these improved results.
Sales of the Food, Pharma & Nutrition segment were $9.4
million which is a 23.7% improvement over the prior year comparable
quarter. The domestic and international food sectors were up again
this quarter, as we continue to see solid double digit growth of
encapsulated ingredients for baking, preservation and confection
markets. In the quarter, we also realized double digit growth of
our human choline products, both domestic and international, as we
continue to target new food applications and experienced some
rebound in supplements. These results were partially offset
by continued slowness of calcium products sold into the
over-the-counter pharmaceutical markets and a decline in quarterly
sales of our VitaShure® products for nutritional
enhancement. Earnings from operations for this segment were $1.4
million, as compared to $0.7 million in the prior year comparable
quarter, with gross margin levels accounting for this gain, largely
due to an approximately 11% improvement in sales volume and the
product mix.
The ARC Specialty Products segment generated fourth quarter
sales of $9.4 million, an increase of 1.0% from the comparable
prior year quarter. This modest increase was principally a result
of an increase in volumes sold in the quarter. We did however see
some softness in certain ethylene oxide products, which reflects
industry inventory reduction control and order timing of the
medical device sterilization end use markets. Earnings from
operations for this segment, at $3.4 million, decreased 10.6% from
the prior year comparable quarter, principally a result of product
mix, increased raw material costs, and increased expenses related
to development work on our ERC technology for repackaging,
distribution and delivery of a product for the fruit ripening
industry.
Consolidated gross profit for the quarter ended December 31,
2009 was $17.0 million, as compared to $13.4 million for the prior
year comparable period. This increase, to 28.7% of sales from 24.8%
of sales, was a result of product mix, volume and price increases,
plant and logistics efficiencies, and net declines in certain key
raw material costs. We continue to focus on volume growth of our
human and animal health products into export markets, capitalizing
on our varied choline production capabilities, and new product
launches. Operating (Selling, R&D, and Administrative) expenses
at $6.2 million, increased $0.2 million over the prior year
comparable quarter, principally a result of some modest increase of
employee headcount, other payroll related expenses, and increased
investment in R&D.
For the year ended December 31, 2009, net sales decreased 5.4%
to $219.4 million from $232.1 million in the comparable prior year
period. This is a significant improvement from the 10.0% level of
decline we had reported for the nine months ended September 30,
2009. Net earnings, however, increased 40.6% to a record $26.8
million, generating a record $0.93 per diluted share, versus net
earnings of $19.1 million, or $0.67 per diluted share, in the prior
year comparable period.
The company continues to maintain a healthy balance sheet with
$59.2 million in net working capital. Cash closed at $46.4
million on December 31, 2009, up from $38.8 million at September
30, 2009 and total debt was reduced to $6.8 million. Diligent
working capital controls, particularly effective inventory and
accounts receivable management, combined with the noted improved
operating results, drove strong cash flow generation for the year
ended December 31, 2009.
Commenting on 2009, Dino A. Rossi, Chairman, President and CEO
of Balchem, said, "This record fourth quarter reflects strong
performances across all of Balchem's segments, and despite the well
publicized difficult economic conditions, we continue to
demonstrate the value of our diversified business. We leveraged
cross business integration opportunities and increased our global
presence, off-setting softness in certain U.S. markets. Raw
material costs have had negative impact on certain segments, but we
will continue to closely monitor all key economic drivers, stay
customer focused, and take appropriate actions to improve operating
margins and cash flow.
Considerable ongoing volatility in the global economy is
expected, but we believe 2010 will be a year of improvements in
sales and earnings, as we continue to implement lean programs,
de-bottleneck production capabilities, leverage our existing
business and research infrastructure, and launch new, innovative
products through each of our business segments. We expect improved
results in the Food, Pharma & Nutrition segment, particularly
in the choline, calcium, domestic and international food markets.
The Animal Nutrition & Health segment realized some margin
relief in late 2009, despite supply chain interruptions, which now
appear to be behind us. Nevertheless, many end specie producers
continue to have financial issues, so our focus on successful new
product launches and continued production efficiencies are
critical. The ARC Specialty Products segment should continue its
steady revenue growth and solid profit results, as well as
development of new market opportunities for specialized delivery of
certain gases. Our healthy financial situation has us positioned to
capitalize on strategic acquisition opportunities that will likely
arise from the current economic environment."
Quarterly Conference Call
A quarterly conference call will be held on Thursday, February
25, at 2:00 PM Eastern Time (ET) to review fourth quarter 2009
results. Dino A. Rossi, Chairman, President and CEO, and Frank
Fitzpatrick, Chief Financial Officer, 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 digital replay through Tuesday, March 2,
2010. To access the replay of the conference call, dial
1-877-660-6853 (local dial-in 1-201-612-7415), and use account #298
and replay ID #345182. Both account and replay ID
numbers are required for replay access.
Segment Information
Balchem Corporation consists of three business segments: ARC
Specialty Products; Food, Pharma & Nutrition; and Animal
Nutrition and Health. Through ARC Specialty Products, Balchem
provides specialty-packaged chemicals for use in healthcare and
other industries. The Food, Pharma & Nutrition segment provides
proprietary microencapsulation, granulation and agglomeration
solutions to a variety of applications in the human food,
pharmaceutical and nutrition marketplaces. The Animal Nutrition
& Health segment manufactures and supplies products to numerous
animal health markets and certain derivative products into
industrial applications.
Forward-Looking Statements
This release contains forward-looking statements, which reflect
Balchem's expectation or belief concerning future events that
involve risks and uncertainties. Balchem can give no assurance that
the expectations reflected in forward-looking statements will prove
correct and various factors could cause results to differ
materially from Balchem's expectations, including risks and factors
identified in Balchem's annual report on Form 10-K for the year
ended December 31, 2008. Forward-looking statements are qualified
in their entirety by the above cautionary statement. Balchem
assumes no duty to update its outlook or other forward-looking
statements as of any future date.
Selected Financial Data
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($ in 000's)
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Three Months Ended
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Twelve Months Ended
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December 31,
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December 31,
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2009
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2008
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2009
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2008
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Specialty Products
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$ 9,362
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$ 9,271
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$ 36,368
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$ 35,835
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Food, Pharma & Nutrition
|
9,373
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7,580
|
35,407
|
35,702
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Animal Nutrition & Health
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40,449
|
37,202
|
147,663
|
160,513
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Total
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$ 59,184
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$ 54,053
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$ 219,438
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$ 232,050
|
|
|
|
|
|
Business Segment Earnings Before Income Taxes:
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|
|
|
|
|
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Three Months Ended
|
Twelve Months Ended
|
|
December 31,
|
December 31,
|
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2009
|
2008
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2009
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2008
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Specialty Products
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$ 3,428
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$ 3,836
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$ 14,250
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$ 12,545
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Food, Pharma & Nutrition
|
1,445
|
706
|
5,029
|
5,469
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Animal Nutrition & Health
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5,888
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2,936
|
21,380
|
11,334
|
Interest and other income (expense)
|
49
|
(175)
|
(57)
|
(917)
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Total
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$ 10,810
|
$ 7,303
|
$ 40,602
|
$ 28,431
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|
|
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Selected Balance Sheet Items
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|
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December 31,
|
December 31,
|
|
2009
|
2008
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Cash and Cash Equivalents
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$ 46,432
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$ 3,422
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Accounts Receivable
|
29,149
|
30,250
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Inventories
|
13,965
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16,618
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Other Current Assets
|
3,466
|
4,961
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Total Current Assets
|
93,012
|
55,251
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Property, Plant, & Equipment (net)
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41,579
|
42,513
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Other Assets
|
53,222
|
56,710
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Total Assets
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$ 187,813
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$ 154,474
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|
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Current Liabilities
|
$ 33,815
|
$ 25,685
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Long-Term Obligations
|
6,855
|
14,283
|
Total Liabilities
|
40,670
|
39,968
|
|
|
|
Stockholders' Equity
|
147,143
|
114,506
|
|
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Total Liabilities and Stockholders' Equity
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$ 187,813
|
$ 154,474
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CONTACT: Balchem Corporation
Karin McCaffery
845-326-5635
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