false000000932600000093262024-02-162024-02-16

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM8-K

Current Report

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of report (date of earliest event reported): February 16, 2024

Balchem Corporation
(Exact name of registrant as specified in its charter)
Maryland1-1364813-2578432
(State or other jurisdiction of incorporation)(Commission File Number)(IRS Employer Identification No.)

5 Paragon Drive, Montvale, NJ 07645
(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (845) 326-5600

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading symbolName of each exchange on which registered
Common Stock, par value $.06-2/3 per shareBCPCThe Nasdaq Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company    ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐




Item 2.02 Results of Operations and Financial Condition

On February 16, 2024, Balchem Corporation, reported earnings for the quarter ended December 31, 2023, and certain other information. The full text of the press release issued in connection with the announcement is attached as Exhibit 99.1.

The information in this Form 8-K (including Exhibit 99.1) shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”), as amended, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, as amended, except as expressly set forth by specific reference in such a filing.

Item 9.01Financial Statements and Exhibits
(d)Exhibits
Exhibit
No.		Description
104Cover Page Interactive Data File (embedded within the Inline XBRL document)




SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 BALCHEM CORPORATION
  
 By:/s/ Hatsuki Miyata 
 Hatsuki Miyata
 General Counsel and Secretary
Date: February 16, 2024








        logo17a.jpg
Exhibit 99.1
Human Nutrition & Health | Animal Nutrition & Health | Specialty Products

Balchem Corporation Reports Fourth Quarter and Full Year 2023 Financial Results

Montvale, NJ, February 16, 2024 - Balchem Corporation (NASDAQ: BCPC) reported today financial results for its 2023 fiscal fourth quarter ended December 31, 2023. The Company reported quarterly net sales of $228.7 million, quarterly net earnings of $26.6 million, adjusted EBITDA(a) of $55.4 million, and free cash flow(a) of $56.0 million.

Ted Harris, Chairman, CEO, and President of Balchem said, “The fourth quarter capped off another solid year for Balchem. We delivered record fourth quarter adjusted EBITDA and very strong free cash flow, despite the continued challenging demand environment in parts of our portfolio. I am particularly pleased with our Human Nutrition and Health segment posting record fourth quarter sales and earnings.”

Fourth Quarter 2023 Financial Highlights:
•GAAP net earnings were $26.6 million, an increase of 24.5% from the prior year.
•Adjusted EBITDA was $55.4 million, an increase of 5.4% from the prior year quarter.
•GAAP earnings per share of $0.82 compared to $0.66 in the prior year quarter and adjusted earnings per share(a) of $0.95 compared to $0.94 in the prior year quarter.
•Cash flows from operations were $67.4 million for the fourth quarter 2023, with record quarterly free cash flow(a) of $56.0 million, up 103.4% from the prior year quarter.
•Record Human Nutrition & Health segment sales of $138.0 million, an increase of 5.8% compared to the prior year quarter with record earnings from operations of $25.2 million, up 43.8%.

Mr. Harris added, “Our full year 2023 results highlight the resilience of our business model in a challenging and volatile market environment. While full year 2023 net sales were down modestly, we delivered record adjusted EBITDA and generated record free cash flow, allowing us to further strengthen our balance sheet, while returning $25.4 million to our shareholders in a double digit increase to our dividend, all while continuing to advance our strategic growth initiatives.”

Full Year 2023 Financial Highlights:
•GAAP net earnings were $108.5 million, an increase of 3.0% from the prior year. These net earnings resulted in GAAP earnings per share of $3.35 compared to $3.25 in the prior year.
•Adjusted EBITDA was $230.9 million, an increase of 7.1%, from the prior year.
•Cash flows from operations were $183.8 million for 2023, with record full year free cash flow of $151.1 million.
•Record Human Nutrition & Health segment sales of $550.8 million, an increase of 4.5% compared to the prior year.
•Record earnings from operations in both the Human Nutrition & Health and Specialty Products segments, increasing 24.7% and 5.5%, respectively.

Mr. Harris continued, “I am excited about 2024, and I believe the company is well positioned to deliver both top and bottom line growth on a full year basis, while continuing to advance our strategic growth initiatives that will ensure our growth over the longer term.”

5 Paragon Drive
Montvale, NJ 07645

balchem.com
p.845.326.5600
f. 845.326.5702


Balchem Corporation (NASDAQ:BCPC)
Results for Period Ended December 31, 2023 (unaudited)
(Dollars in thousands, except per share data)

Three Months Ended
December 31,		Year Ended
December 31,
2023202220232022
Net sales $228,699 $232,531 $922,439 $942,358 
Gross margin74,993 68,639 302,056 280,451 
Operating expenses36,658 35,334 142,863 135,265 
Earnings from operations38,335 33,305 159,193 145,186 
Interest and other expenses5,068 7,529 21,932 11,437 
Earnings before income tax expense33,267 25,776 137,261 133,749 
Income tax expense 6,619 4,370 28,718 28,382 
Net earnings $26,648 $21,406 $108,543 $105,367 
Diluted net earnings per common share$0.82 $0.66 $3.35 $3.25 
Adjusted EBITDA(a)
$55,430 $52,611 $230,910 $215,688 
Adjusted net earnings(a)
$30,901 $30,340 $129,718 $130,531 
Adjusted diluted net earnings per common share(a)
$0.95 $0.94 $4.00 $4.03 
Shares used in the calculations of diluted and adjusted net earnings per common share32,477 32,398 32,448 32,393 

(a)
See “Non-GAAP Financial Information” for a reconciliation of GAAP and non-GAAP financial measures.
     logo6a07a.jpg
                              Page | 2

Balchem Corporation (NASDAQ:BCPC)
Financial Results for the Fourth Quarter of 2023:
The Human Nutrition & Health segment generated fourth quarter sales of $138.0 million, an increase of $7.6 million or 5.8% compared to the prior year quarter. The increase was driven by higher sales within both the minerals and nutrients business and food and beverage markets, and a favorable impact related to changes in foreign currency exchange rates. Fourth quarter earnings from operations for this segment were $25.2 million, an increase of $7.7 million, or 43.8%, compared to $17.5 million in the prior year quarter, primarily due to the aforementioned higher sales and lower manufacturing input costs, 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(a) for this segment were $29.9 million, compared to $23.6 million in the prior year quarter, an increase of 26.7%.
The Animal Nutrition & Health segment generated quarterly sales of $58.2 million, a decrease of $6.6 million or 10.2% compared to the prior year quarter. The decrease was driven by lower sales in both the ruminant and monogastric species markets, partially offset by a favorable impact related to changes in foreign currency exchange rates. Fourth quarter earnings from operations for this segment were $5.3 million, a decrease of $3.8 million, or 41.3%, compared to $9.1 million in the prior year quarter, primarily due to the aforementioned lower sales, partially offset by lower 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 $5.6 million, compared to $10.1 million in the prior year quarter, a decrease of 44.5%.
The Specialty Products segment generated fourth quarter sales of $31.0 million, a decrease of $0.8 million or 2.6% compared to the prior year quarter, due to lower sales in both the performance gases business and the plant nutrition business, partially offset by a favorable impact related to changes in foreign currency exchange rates. Fourth quarter earnings from operations for this segment were $8.6 million, an increase of $0.6 million, or 7.4%, compared to $8.0 million in the prior year quarter, primarily driven by lower 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 $9.8 million, compared to $9.2 million in the prior year quarter, an increase of 7.1%.
Consolidated gross margin for the quarter ended December 31, 2023 of $75.0 million increased by $6.4 million or 9.3%, compared to $68.6 million for the prior year comparable period. Gross margin as a percentage of sales was 32.8% as compared to 29.5% in the prior year period, an increase of 327 basis points, primarily due to a favorable mix and decreases in certain manufacturing input costs. Operating expenses of $36.7 million for the quarter increased $1.3 million from the prior year comparable quarter, primarily due to an increase in outside services and higher compensation-related expenses, partially offset by a favorable adjustment to transaction costs. Excluding non-cash operating expenses associated with amortization of intangible assets of $6.3 million, operating expenses were $30.4 million, or 13.3% of sales.
Interest expense was $5.3 million and $5.1 million in the fourth quarters of 2023 and 2022, respectively. Our effective tax rates for the three months ended December 31, 2023 and 2022 were 19.9% and 17.0%, respectively. The increase in the effective tax rate from the prior year was primarily due to an increase in certain state taxes and lower tax benefits from stock-based compensation.
For the quarter ended December 31, 2023, cash flows provided by operating activities were $67.4 million and free cash flow was $56.0 million. The $165.8 million of net working capital on December 31, 2023 included a cash balance of $64.4 million. Significant cash payments during the quarter included repayments on the revolving loan of $71.0 million, and capital expenditures and intangible assets acquired of $11.7 million.

     logo6a07a.jpg
                              Page | 3

Balchem Corporation (NASDAQ:BCPC)

Ted Harris, Chairman, President, and CEO of Balchem said, “2023 was another solid year for Balchem and I would like to thank each and every one of our over 1,300 employees for their contributions to these results and the progress we have made around our strategic initiatives. Once again, we have shown resilience and the ability to deliver strong results, even in challenging times. I am excited about our future.”

Quarterly Conference Call
A quarterly conference call will be held on Friday, February 16, 2024, at 11:00 AM Eastern Time (ET) to review fourth 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 three hours after the conclusion of the call through end of day Friday, March 1, 2024. To access the replay of the conference call, dial 1-877-660-6853 (local dial-in 1-201-612-7415), and use conference ID #13744174.
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".
Forward-Looking Statements
This release contains forward-looking statements, within the meaning of 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. Actions and performance could differ materially from what is contemplated by the forward-looking statements contained in this release. Factors that might cause differences from the forward-looking statements include those referred to or identified in Balchem’s Annual Report on Form 10-K for the year ended December 31, 2023 and other factors that may be identified elsewhere in this release or in our 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. We undertake 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)

     logo6a07a.jpg
                              Page | 4

Balchem Corporation (NASDAQ:BCPC)

Selected Financial Data (unaudited)
(Dollars in thousands)

Business Segment Net Sales:
Three Months Ended
December 31,		Year Ended
December 31,
2023202220232022
Human Nutrition & Health$137,974 $130,403 $550,751 $527,131 
Animal Nutrition & Health58,164 64,751 238,326 262,297 
Specialty Products31,004 31,816 125,965 131,438 
Other and Unallocated (b)
1,557 5,561 7,397 21,492 
Total$228,699 $232,531 $922,439 $942,358 

Business Segment Earnings Before Income Taxes:
 Three Months Ended
December 31,		Year Ended
December 31,
2023202220232022
Human Nutrition & Health$25,210 $17,533 $102,419 $82,125 
Animal Nutrition & Health5,346 9,113 27,576 36,056 
Specialty Products8,595 8,004 34,579 32,789 
Other and Unallocated (b)
(816)(1,345)(5,381)(5,784)
Interest and other expenses(5,068)(7,529)(21,932)(11,437)
Total$33,267 $25,776 $137,261 $133,749 
(b) 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: (i) Transaction and integration costs, and unallocated legal fees totaling $17 and $1,617 for the three and twelve months ended December 31, 2023, respectively, and $765 and $3,581 for the three and twelve months ended December 31, 2022, respectively (refer to Note 4 for descriptions of these charges), and (ii) Unallocated amortization expense of $0 and $312 for the three and twelve months ended December 31, 2023, respectively, and $738 and $2,951 for the three and twelve months ended December 31, 2022, respectively, related to an intangible asset in connection with a company-wide ERP system implementation.

     logo6a07a.jpg
                              Page | 5

Balchem Corporation (NASDAQ:BCPC)
Selected Balance Sheet Items
(Dollars in thousands) December 31, 2023December 31, 2022
Cash and Cash Equivalents$64,447 $66,560 
Accounts Receivable, net 125,284 131,578 
Inventories, net 109,521 119,668 
Other Current Assets14,990 17,997 
Total Current Assets 314,242 335,803 
Property, Plant & Equipment, net 276,039 271,355 
Goodwill778,907 769,509 
Intangible Assets with Finite Lives, net191,212 213,295 
Right of Use Assets19,864 19,432 
Other Assets 16,947 15,118 
Total Non-current Assets1,282,969 1,288,709 
Total Assets $1,597,211 $1,624,512 
Current Liabilities$148,491 $140,042 
Revolving Loan309,569 440,569 
Deferred Income Taxes52,046 62,784 
Long-Term Obligations33,121 42,833 
Total Liabilities543,227 686,228 
Stockholders' Equity1,053,984 938,284 
Total Liabilities and Stockholders' Equity$1,597,211 $1,624,512 
     logo6a07a.jpg
                              Page | 6

Balchem Corporation (NASDAQ:BCPC)
Balchem Corporation
Condensed Consolidated Statements of Cash Flows
(Dollars in thousands)
(unaudited)
Year Ended December 31,
20232022
Cash flows from operating activities:
   Net earnings $108,543 $105,367 
Adjustments to reconcile net earnings to net cash provided by operating activities:
        Depreciation and amortization54,935 51,848 
        Stock compensation expense 16,052 13,224 
        Other adjustments (15,779)(6,681)
        Changes in assets and liabilities, net of acquired balances20,010 (25,222)
  Net cash provided by operating activities183,761 138,536 
 
Cash flows from investing activities:
   Cash paid for acquisitions, net of cash acquired(1,252)(365,780)
   Capital expenditures and intangible assets acquired(37,892)(49,945)
   Proceeds from sale of assets1,881 206 
   Proceeds from settlement of net investment hedge2,740 — 
   Investment in affiliates(290)(495)
  Net cash used in investing activities(34,813)(416,014)
Cash flows from financing activities:
   Proceeds from revolving loan18,000 435,000 
   Principal payments on revolving debt(149,000)(103,000)
   Principal payments on acquired debt— (30,988)
 Cash paid for financing costs— (1,232)
 Principal payments on finance lease(222)(177)
   Proceeds from stock options exercised5,242 3,212 
   Dividends paid(22,872)(20,713)
   Repurchases of common stock(4,469)(35,423)
  Net cash (used in) provided by financing activities(153,321)246,679 
   Effect of exchange rate changes on cash2,260 (5,880)
Decrease in cash and cash equivalents(2,113)(36,679)
Cash and cash equivalents, beginning of period66,560 103,239 
Cash and cash equivalents, end of period$64,447 $66,560 

     logo6a07a.jpg
                              Page | 7

Balchem Corporation (NASDAQ:BCPC)
Non-GAAP Financial Information

In addition to disclosing financial results in accordance with United States (U.S.) generally accepted accounting principles (GAAP), this earnings release contains non-GAAP financial measures that we believe are helpful in understanding and comparing our past financial performance and our future results. The non-GAAP financial measures in this press release include adjusted gross margin, adjusted earnings from operations, adjusted net earnings and the related adjusted per diluted share amounts, EBITDA, adjusted EBITDA, adjusted income tax expense, and free cash flow. 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.



     logo6a07a.jpg
                              Page | 8

Balchem Corporation (NASDAQ:BCPC)

Set forth below are reconciliations of the non-GAAP financial measures to the most directly comparable GAAP financial measures.

Table 1
Reconciliation of Non-GAAP Measures to GAAP
(Dollars in thousands, except per share data)
(unaudited)

Three Months Ended
December 31,		Year Ended
December 31,
2023202220232022
Reconciliation of adjusted gross margin
GAAP gross margin$74,993 $68,639 $302,056 $280,451 
Inventory valuation adjustment (1)
— 1,473 1,419 3,057 
Amortization of intangible assets and finance lease (2)
665 712 2,683 2,025 
Restructuring costs (3)
186 — 601 — 
Adjusted gross margin$75,844 $70,824 $306,759 $285,533 
Reconciliation of adjusted earnings from operations
GAAP earnings from operations$38,335 $33,305 $159,193 $145,186 
Inventory valuation adjustment (1)
— 1,473 1,419 3,057 
Amortization of intangible assets and finance lease (2)
6,964 7,641 28,274 27,481 
Restructuring costs (3)
186 — 8,365 — 
Transaction and integration costs and unallocated legal fees (4)
(1,383)293 (9,683)3,109 
Nonqualified deferred compensation plan expense (income) (5)
523 337 917 (401)
Adjusted earnings from operations$44,625 $43,049 $188,485 $178,432 
Reconciliation of adjusted net earnings
GAAP net earnings$26,648 $21,406 $108,543 $105,367 
Inventory valuation adjustment (1)
— 1,473 1,419 3,057 
Amortization of intangible assets and finance lease (2)
7,035 7,713 28,561 27,816 
Restructuring costs (3)
186 — 8,365 — 
Transaction and integration costs and unallocated legal fees (4)
(1,383)293 (9,683)3,109 
Unrealized foreign currency loss on contingent consideration liability and net realized (gain) on foreign currency forward contracts (6)
— 2,015 — (512)
Income tax adjustment (7)
(1,585)(2,560)(7,487)(8,306)
Adjusted net earnings$30,901 $30,340 $129,718 $130,531 
Adjusted net earnings per common share - diluted$0.95 $0.94 $4.00 $4.03 

     logo6a07a.jpg
                              Page | 9

Balchem Corporation (NASDAQ:BCPC)
The following table sets forth a reconciliation of Net Income calculated using amounts determined in accordance with GAAP to EBITDA and to Adjusted EBITDA for the three and twelve months ended December 31, 2023 and 2022.

Table 2
(unaudited)
Three Months Ended
December 31,		Year Ended
December 31,
2023202220232022
Net income - as reported$26,648 $21,406 $108,543 $105,367 
Add back:
Provision for income taxes 6,619 4,370 28,718 28,382 
Interest and other expenses5,068 7,529 21,932 11,437 
Depreciation and amortization 13,984 13,817 54,647 51,513 
EBITDA 52,319 47,122 213,840 196,699 
Add back certain items:
Non-cash compensation expense related to equity awards3,785 3,386 16,052 13,224 
Inventory valuation adjustment (1)
— 1,473 1,419 3,057 
Restructuring costs (3)
186 — 8,365 — 
Transaction and integration costs and unallocated legal fees (4)
(1,383)293 (9,683)3,109 
Nonqualified deferred compensation plan expense (income) (5)
523 — 337 — 917 — (401)
Adjusted EBITDA$55,430 $52,611 $230,910 $215,688 

The following table sets forth a reconciliation of our GAAP effective income tax rate to our non-GAAP effective income tax rate for the three and twelve months ended December 31, 2023 and 2022.

Table 3
(unaudited)
Three Months Ended
December 31,
2023Effective Tax Rate2022Effective Tax Rate
GAAP Income Tax Expense$6,619 19.9 %$4,370 17.0 %
Impact of ASU 2016-09(8)
369 249 
Adjusted Income Tax Expense $6,988 21.0 %$4,619 17.9 %

Year Ended
December 31,
2023Effective Tax Rate2022Effective Tax Rate
GAAP Income Tax Expense$28,718 20.9 %$28,382 21.2 %
Impact of ASU 2016-09(8)
1,232 963 
Adjusted Income Tax Expense $29,950 21.8 %$29,345 21.9 %

     logo6a07a.jpg
                              Page | 10

Balchem Corporation (NASDAQ:BCPC)
The following table sets forth a reconciliation of net cash provided by operating activities to free cash flow for the three and twelve months ended December 31, 2023 and 2022.

Table 4
(unaudited)
Three Months Ended
December 31,		Year Ended
December 31,
2023202220232022
Net cash provided by operating activities$67,406 $41,655 $183,761 $138,536 
Capital expenditures, proceeds from the sale of assets, settlement of net investment hedge, and capitalized ERP implementation costs(11,441)(14,136)(32,653)(49,157)
Free cash flow$55,965 $27,519 $151,108 $89,379 

(1) Inventory valuation adjustment: Business combination accounting principles require us to measure acquired inventory at fair value. The fair value of inventory reflects the acquired company's cost of manufacturing plus a portion of the expected profit margin. The non-GAAP adjustment to our cost of sales excludes the expected profit margin component that is recorded under business combination accounting principles. We believe the adjustment is useful to investors as an additional means to reflect cost of sales and gross margin trends of our business.
(2) Amortization of intangible assets and finance lease: Amortization of intangible assets and finance lease 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, an intangible asset in connection with a company-wide ERP system implementation, and one finance lease. We record expense relating to the amortization of these intangibles and finance lease in our GAAP financial statements. Amortization expenses for our intangible assets and finance lease are inconsistent in amount and are significantly impacted by the timing and valuation of an acquisition. Consequently, our non-GAAP adjustments exclude these expenses to facilitate an evaluation of our current operating performance and comparisons to our past operating performance.
(3) Restructuring costs: Expenses related to a reorganization of the business.
(4) Transaction and integration costs and unallocated legal fees: Transaction and integration costs related to acquisitions and divestitures are expensed in our GAAP financial statements. Unallocated legal fees for transaction-related non-compete agreement disputes 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.
(5) 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. Adjustments have been made to the prior period presentation to conform with the current period presentation.
(6) Unrealized foreign currency loss on contingent consideration liability and net realized (gain) on foreign currency exchange forward contracts: The unrealized foreign currency loss related to the contingent consideration liability recorded in connection with the Kappa acquisition and was recorded as other expense in our GAAP financial statements. The net realized gain on foreign currency exchange forward contracts related to four short-term foreign currency exchange forward contracts with JP Morgan Chase, N.A. in connection with the Kappa acquisition. These contracts did not qualify for hedge accounting and the net gain was recorded as other income in our GAAP financial statements. We believe that excluding these gains and losses from our Non-GAAP financial measures is useful to investors because such income or expense are inconsistent in amount and frequency causing comparison of current and historical financial results to be difficult.
(7) 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.
(8) 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 twelve months ended December 31, 2023 and 2022, 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.


     logo6a07a.jpg
                              Page | 11
v3.24.0.1
Cover
Feb. 16, 2024
Cover [Abstract]  
Document Type 8-K
Document Period End Date Feb. 16, 2024
Entity Registrant Name Balchem Corp
Entity Incorporation, State or Country Code MD
Entity File Number 1-13648
Entity Tax Identification Number 13-2578432
Entity Address, Address Line One 5 Paragon Drive
Entity Address, City or Town Montvale
Entity Address, State or Province NJ
Entity Address, Postal Zip Code 07645
City Area Code 845
Local Phone Number 326-5600
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Common Stock, par value $.06-2/3 per share
Trading Symbol BCPC
Security Exchange Name NASDAQ
Entity Emerging Growth Company false
Amendment Flag false
Entity Central Index Key 0000009326
Balchem (NASDAQ:BCPC)
Historical Stock Chart
From Mar 2024 to Apr 2024 Click Here for more Balchem Charts.
Balchem (NASDAQ:BCPC)
Historical Stock Chart
From Apr 2023 to Apr 2024 Click Here for more Balchem Charts.