bcpc-20250331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2025

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____ to ____

Commission file number: 1-13648

_______________________________________________________________________________________________________________

Balchem Corporation

(Exact name of Registrant as specified in its charter)


Maryland						13-2578432
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification Number)

5 Paragon Drive, Montvale, NJ 07645

(Address of principal executive offices) (Zip Code)

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

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading symbol	Name of each exchange on which registered
Common Stock, par value $.06-2/3 per share	BCPC	The Nasdaq Stock Market LLC

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

(Check one):

Large accelerated filer

☑

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

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. ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

As of April 17, 2025, the registrant had 32,617,301 shares of its Common Stock, $.06 2/3 par value, outstanding.

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BALCHEM CORPORATION

QUARTERLY REPORT ON FORM 10-Q

TABLE OF CONTENTS

Page No.

PART I

FINANCIAL INFORMATION

Item 1.

Financial Statements (unaudited)

Condensed Consolidated Balance Sheets as of March 31, 2025 and December 31, 20 2 4

Condensed Consolidated Statements of Earnings for the Three Months Ended March 31, 2025 and 202 4

Condensed Consolidated Statements of Comprehensive Income for the Three Months Ended March 31, 2025 and 202 4

Condensed Consolidated Statements of Changes in Stockholders' Equity for the Three Months Ended March 31, 2025 and 202 4

Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2025 and 202 4

Notes to Condensed Consolidated Financial Statements

Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Item 4.

Controls and Procedures

Unregistered Sales of Equity Securities and Use of Proceeds

Part I. Financial Information

Item 1. Financial Statements

BALCHEM CORPORATION

Condensed Consolidated Balance Sheets

(Dollars in thousands, except share and per share data)


Assets	March 31, 2025 (unaudited)		December 31, 2024
Current assets:
Cash and cash equivalents	$	49,901	$	49,515
Accounts receivable, net of allowances of $838 and $909 at March 31, 2025 and December 31, 2024, respectively	130,447		119,662
Inventories, net	144,926		130,802
Prepaid expenses	8,132		8,054
Other current assets	6,833		5,737
Total current assets	340,239		313,770
Property, plant and equipment, net	283,753		282,154
Goodwill	793,087		780,030
Intangible assets with finite lives, net	165,965		165,050
Right of use assets - operating leases	15,598		15,320
Right of use assets - finance lease	1,678		1,730
Other non-current assets	17,235		17,317
Total assets	$	1,617,555	$	1,575,371
Liabilities and Stockholders' Equity
Current liabilities:
Trade accounts payable	$	65,975	$	54,745
Accrued expenses	44,172		43,750
Accrued compensation and other benefits	11,631		22,886
Dividends payable	126		28,510
Income taxes payable	13,728		4,466
Operating lease liabilities - current	3,726		3,134
Finance lease liabilities - current	197		194
Total current liabilities	139,555		157,685
Revolving loan	190,000		190,000
Deferred income taxes	45,217		43,722
Operating lease liabilities - non-current	12,445		12,967
Finance lease liabilities - non-current	1,698		1,749
Other long-term obligations	19,939		19,335
Total liabilities	408,854		425,458
Commitments and contingencies (Note 15)
Stockholders' equity:
Preferred stock, $25 par value. Authorized 2,000,000 shares; none issued and outstanding	—		—
Common stock, $0.0667 par value. Authorized 120,000,000 shares; 32,611,544 and 32,527,244 shares issued and outstanding at March 31, 2025 and December 31, 2024, respectively	2,175		2,170
Additional paid-in capital	174,243		173,997
Retained earnings	1,034,546		997,493
Accumulated other comprehensive income	(2,263)		(23,747)
Total stockholders' equity	1,208,701		1,149,913
Total liabilities and stockholders' equity	$	1,617,555	$	1,575,371

See accompanying notes to condensed consolidated financial statements.

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BALCHEM CORPORATION

Condensed Consolidated Statements of Earnings

(Dollars in thousands, except per share data)

(unaudited)


	Three Months Ended March 31,
	2025		2024

Net sales	$	250,519	$	239,659

Cost of sales	162,351		158,145

Gross margin	88,168		81,514

Operating expenses:
Selling expenses	16,926		18,227
Research and development expenses	4,662		4,100
General and administrative expenses	15,565		17,511
	37,153		39,838

Earnings from operations	51,015		41,676

Other expenses, net:
Interest expense, net	2,924		5,398
Other expense (income), net	151		(572)
	3,075		4,826

Earnings before income tax expense	47,940		36,850

Income tax expense	10,887		7,864

Net earnings	$	37,053	$	28,986

Net earnings per common share - basic	$	1.14	$	0.90

Net earnings per common share - diluted	$	1.13	$	0.89

See accompanying notes to condensed consolidated financial statements.

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BALCHEM CORPORATION

Condensed Consolidated Statements of Comprehensive Income

(Dollars in thousands)

(unaudited)


	Three Months Ended March 31,
	2025		2024

Net earnings	$	37,053	$	28,986

Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment	21,722		(12,717)
Change in postretirement benefit plans	(238)		154
Other comprehensive income (loss)	21,484		(12,563)

Comprehensive income	$	58,537	$	16,423

See accompanying notes to condensed consolidated financial statements.

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BALCHEM CORPORATION

Condensed Consolidated Statements of Changes in Stockholders’ Equity

For the Three Months Ended March 31, 2025 and 2024

(Dollars in thousands, except share and per share data)


	Total Stockholders' Equity		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Common Stock			Additional Paid-in Capital
							Shares	Amount
Balance - December 31, 2024	$	1,149,913	$	997,493	$	(23,747)	32,527,244	$	2,170	$	173,997
Net earnings	37,053		37,053		—		—	—		—
Other comprehensive gain	21,484		—		21,484		—	—		—
Repurchases of common stock	(5,325)		—		—		(32,869)	(2)		(5,323)
Shares and options issued under stock plans	5,576		—		—		117,169	7		5,569
Balance - March 31, 2025	1,208,701		1,034,546		(2,263)		32,611,544	2,175		174,243

Balance - December 31, 2023	$	1,053,984	$	897,488	$	8,691	32,254,728	$	2,152	$	145,653
Net earnings	28,986		28,986		—		—	—		—
Other comprehensive loss	(12,563)		—		(12,563)		—	—		—
Repurchases of common stock, including excise tax	(5,254)		—		—		(36,122)	(2)		(5,252)
Shares and options issued under stock plans	13,638		—		—		204,794	13		13,625
Balance - March 31, 2024	1,078,791		926,474		(3,872)		32,423,400	2,163		154,026

See accompanying notes to condensed consolidated financial statements.

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BALCHEM CORPORATION

Condensed Consolidated Statements of Cash Flows

(Dollars in thousands)

(unaudited)


	Three Months Ended March 31,
	2025		2024
Cash flows from operating activities:
Net earnings	$	37,053	$	28,986

Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization	11,014		13,668
Stock compensation expense	3,810		4,750
Deferred income taxes	(115)		(302)
Provision for doubtful accounts	(79)		223
Unrealized loss (gain) on foreign currency transactions and deferred compensation	24		(726)
Loss (gain) on disposal of assets	65		(144)
Changes in assets and liabilities
Accounts receivable	(10,069)		(15,010)
Inventories	(12,897)		(1,458)
Prepaid expenses and other current assets	(859)		564
Accounts payable and accrued expenses	(737)		(4,584)
Income taxes	9,123		6,929
Other	124		492
Net cash provided by operating activities	36,457		33,388

Cash flows from investing activities:
Capital expenditures and intangible assets acquired	(5,559)		(6,910)
Cash paid for acquisitions, net of cash acquired	(323)		—
Proceeds from sale of assets	—		213
Investment in affiliates	(30)		(42)
Net cash used in investing activities	(5,912)		(6,739)

Cash flows from financing activities:
Proceeds from revolving loan	29,000		26,000
Principal payments on revolving loan	(29,000)		(34,000)
Principal payments on finance leases	(49)		(57)
Proceeds from stock options exercised	1,668		8,791
Dividends paid	(28,263)		(25,555)
Repurchases of common stock	(5,325)		(5,202)
Net cash used in financing activities	(31,969)		(30,023)

Effect of exchange rate changes on cash	1,810		(724)

Increase (decrease) in cash and cash equivalents	386		(4,098)

Cash and cash equivalents beginning of period	49,515		64,447
Cash and cash equivalents end of period	$	49,901	$	60,349

See accompanying notes to condensed consolidated financial statements.

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BALCHEM CORPORATION

Notes to Condensed Consolidated Financial Statements (Unaudited)

(All dollar amounts in thousands, except share and per share data)

NOTE 1 – CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The condensed consolidated financial statements presented herein have been prepared in accordance with the accounting policies described in the December 31, 2024 consolidated financial statements, and should be read in conjunction with the consolidated financial statements and notes, which appear in the Annual Report on Form 10-K for the year ended December 31, 2024. The condensed consolidated financial statements reflect the operations of Balchem Corporation and its subsidiaries (the "Company" or "Balchem"). All intercompany balances and transactions have been eliminated in consolidation.

In the opinion of management, the unaudited condensed consolidated financial statements furnished in this Form 10-Q include all adjustments necessary for a fair presentation of the financial position, results of operations and cash flows for the interim periods presented. All such adjustments are of a normal, recurring nature. The condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP” or “GAAP”) governing interim financial statements and the instructions to Form 10-Q and Article 10 of Regulation S-X under the Securities Exchange Act of 1934 (the "Exchange Act") and therefore do not include some information and notes necessary to conform to annual reporting requirements. The results of operations for the three months ended March 31, 2025 are not necessarily indicative of the operating results expected for the full year or any interim period.

Recent Accounting Pronouncements

Recently Issued Accounting Standards

In November 2024, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update ("ASU") 2024-03, "Income Statement - Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40)." The new guidance is intended to enhance transparency and disclosures by requiring public entities to provide disaggregated disclosures of certain categories of expenses on an annual and interim basis. The ASU is effective for fiscal years beginning after December 15, 2026 and interim periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact that the adoption of ASU 2024-03 will have on the consolidated financial statements and related disclosures.

In December 2023, the FASB issued ASU 2023-09, "Income Taxes (Topic 740) - Improvements to Income Tax Disclosures." The new guidance is intended to enhance the transparency and decision usefulness of income tax disclosures by requiring disaggregated information about a reporting entity's effective tax rate reconciliation and information on income taxes paid. The amendment is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The amendment in this update should be applied on a prospective basis, with retrospective application permitted. The Company is in the process of evaluating the impact that the adoption of ASU 2023-09 will have on the consolidated financial statements and related disclosures.

Recently Adopted Accounting Standards

In November 2023, the FASB issued ASU 2023-07, "Segment Reporting (Topic 280) - Improvements to Reportable Segment Disclosures." The ASU expands reportable segment disclosure requirements by requiring disclosures of significant reportable segment expenses that are regularly provided to the Chief Operating Decision Maker (“CODM”) and included within each reported measure of a segment's profit or loss. The ASU also requires disclosure of the title and position of the individual identified as the CODM and an explanation of how the CODM uses the reported measures of a segment's profit or loss in assessing segment performance and deciding how to allocate resources. Additionally, ASU 2023-07 requires all segment profit or loss and assets disclosures to be provided on an annual and interim basis. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning December 15, 2024. The Company adopted this accounting guidance on December 31, 2024, and applied it retrospectively to all prior periods presented in our consolidated financial statements. Refer to Note 10, Segment Information for the expanded disclosures.

NOTE 2 - STOCKHOLDERS' EQUITY

Stock-Based Compensation

The Company’s results for the three months ended March 31, 2025 and 2024 reflected the following stock-based compensation cost, and such compensation cost had the following effects on net earnings:

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	Increase/(Decrease) for the
	Three Months Ended March 31,
	2025		2024
Cost of sales	$	438	$	400
Operating expenses	3,372		4,350
Net earnings	(2,928)		(3,652)

As allowed by Accounting Standards Codification ("ASC") 718, the Company has made an estimate of expected forfeitures based on its historical experience and is recognizing compensation cost only for those stock-based compensation awards expected to vest.

The Company's omnibus incentive plan ("the Plan") allows for the granting of stock awards and options to purchase common stock. Both incentive stock options and nonqualified stock options can be awarded under the plan. No option will be exercisable for longer than ten years after the date of grant. The Company has approved and reserved a number of shares to be issued upon exercise of the outstanding options that is adequate to cover all exercises. As of March 31, 2025, the Plan had 685,590 shares available for future awards. Compensation expense for stock options and stock awards is recognized on a straight-line basis over the vesting period, generally three to five years for stock options, three years for employee restricted stock awards, three years for employee performance share awards, and one to three years for non-employee director restricted stock awards. Certain awards provide for accelerated vesting if there is a change in control (as defined in the plans) or other qualifying events.

Option activity for the three months ended March 31, 2025 and 2024 is summarized below:


For the Three Months Ended March 31, 2025	Shares (000s)	Weighted Average Exercise Price		Aggregate Intrinsic Value		Weighted Average Remaining Contractual Term
Outstanding as of December 31, 2024	962	$	114.81	$	46,346
Granted	51	159.18
Exercised	(18)	90.50
Forfeited	—	—
Canceled	—	—
Outstanding as of March 31, 2025	995	$	117.53	$	48,212	5.6

Exercisable as of March 31, 2025	688	$	105.78	$	41,408	4.4


For the Three Months Ended March 31, 2024	Shares (000s)	Weighted Average Exercise Price		Aggregate Intrinsic Value		Weighted Average Remaining Contractual Term
Outstanding as of December 31, 2023	1,078	$	104.38	$	47,889
Granted	113	143.43
Exercised	(125)	70.40
Forfeited	(1)	134.45
Canceled	—	—
Outstanding as of March 31, 2024	1,065	$	112.48	$	45,223	6.3

Exercisable as of March 31, 2024	699	$	97.89	$	39,881	4.9

ASC 718 requires companies to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award. The weighted average fair values of the stock options granted under the Plan were calculated using either the Black-Scholes model or the Binomial model, whichever was deemed to be most appropriate. The fair value of each option grant was estimated on the date of the grant using the following weighted average assumptions for the three months ended March 31, 2025 and 2024, respectively: dividend yields of 0.6% and 0.6%; expected volatilities of 26% and 28%; risk-free interest rates of 4.5% and 4.1% and expected lives of 5.2 years and 5.0 years.

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The Company used a projected expected life for each award granted based on historical experience of employees’ exercise behavior. Expected volatilities are based on the Company’s historical volatility levels. Dividend yields are based on the Company’s historical dividend yields. Risk-free interest rates are based on the implied yields currently available on U.S. Treasury zero-coupon issues with a remaining term equal to the expected life.

Other information pertaining to option activity during the three months ended March 31, 2025 and 2024 is as follows:


	Three Months Ended March 31,
	2025		2024
Weighted-average fair value of options granted	$	48.86	$	44.52
Total intrinsic value of stock options exercised ($000s)	$	1,388	$	10,377

Non-vested restricted stock activity for the three months ended March 31, 2025 and 2024 is summarized below:


	Three Months Ended March 31,
	2025			2024
	Shares (000s)	Weighted Average Grant Date Fair Value		Shares (000s)	Weighted Average Grant Date Fair Value
Non-vested balance as of December 31	122	$	141.62	116	$	133.06
Granted	54	159.11		35	143.43
Vested	(28)	138.21		(32)	119.11
Forfeited	(1)	140.76		(1)	129.93
Non-vested balance as of March 31	147	$	148.68	118	$	139.95

Non-vested performance share activity for the three months ended March 31, 2025 and 2024 is summarized below:

Three Months Ended March 31,

2025

2024

Shares (000s)

Weighted
Average Grant
Date Fair
Value

Shares (000s)

Weighted
Average Grant
Date Fair
Value

Non-vested balance as of December 31