NEW HAMPTON, N.Y., May 9, 2007 (PRIME NEWSWIRE) -- Balchem Corporation (Nasdaq:BCPC) reported as follows (unaudited) for the quarter ended March 31, 2007 (In thousands, except per share data).
All per share information has been adjusted to reflect the three for two stock split effected in the form of a 50% stock dividend declared on December 12, 2006.
For the Three Months Ended March 31,
------------------------------------
2007 2006
---- ----
Net sales $ 27,599 $ 24,597
Gross profit 9,741 8,222
Operating expenses 4,399 3,753
-------- --------
Earnings from operations 5,342 4,469
Other expense 28 24
-------- --------
Earnings before income tax expense 5,314 4,445
Income tax expense 1,873 1,587
-------- --------
Net earnings $ 3,441 $ 2,858
======== ========
Basic net earnings per common share $ 0.19 $ 0.16
Diluted net earnings per common share $ 0.19 $ 0.16
Shares used in the calculation of diluted net
earnings per common share 18,385 18,238
New Record Quarter Results for Net Sales and Net Earnings
Record net sales of $27.6 million were achieved for the quarter ended March 31, 2007. This is an increase of 12.2% above the $24.6 million result of the prior year comparable quarter and was derived from both organic and acquisition growth. Record net earnings for the first quarter were $3.4 million, an increase of $0.6 million, or 20.4% as compared with the same period last year. The $3.4 million in net earnings resulted in an increase in diluted net earnings of 18.8% to $0.19 per share for the first quarter of 2007 versus $0.16 per share for the comparable quarter of the prior year.
In the first quarter of 2007, sales of the Encapsulated/Nutritional Products segment were $11.5 million, an increase of 17.5% from the prior year comparable quarter. Organic growth was derived principally from strength in sales of human choline products and our animal health REASHURE(r) product, which grew 51.5% and 43%, respectively, over the prior year comparable period. The chelated minerals product line posted an increase of 137% over the prior year largely due to the timing of the 2006 acquisition, versus the full quarter this year, and organic growth in the Asian market. These results were partially offset by slowness in sales of calcium products sold into the over-the-counter pharmaceutical markets, and a very slow start to the International Food sector. Earnings from operations for this segment improved 19.6% to $1.2 million in the current period, as compared to $1.0 million in the comparable quarter of the prior year. The ARC Specialty Products segment generated earnings from operations of $2.9 million on record quarterly sales of $8.1 million. Earnings from operations for this segment were 4.7% higher than the prior year quarter, primarily a result of the increased sales. The BCP Ingredients segment achieved record quarterly sales of $8.0 million, increasing 17.2% over the prior year comparable quarter, with continued strong sales volume in dry and aqueous choline products for the poultry and swine industries. This result also includes $1.4 million of sales from the customer list acquisition of Chinook Group Limited completed in mid-March, 2007. The overall increase in sales volume and product mix drove positive earnings from operations for this segment, improving to $1.2 million, as compared to $0.66 million in the prior year comparable quarter.
Consolidated gross profit for the quarter ended March 31, 2007 was $9.7 million, or an increase of 18.5% compared to $8.2 million for the prior year comparable period, largely due to the above-noted increase in sales. Operating (Selling, R&D, and Administrative) expenses increased 17.2% to $4.4 million, as compared to $3.8 million for the prior year comparable quarter, equaling 15.9% of net sales. This was an increase from the 15.3% of the prior year, and was primarily due to additional amortization and selling expenses associated with the CMC acquisition.
Balance sheet ratios and our cash flow continue to be strong. Late in the first quarter of 2007, we borrowed $29 million, the proceeds of which were used to complete the funding of the Chinook customer list acquisition.
Outlook
Commenting on 2007, Dino A. Rossi, President and CEO of Balchem, said "We are very pleased with the overall performance of the business. The results derived from the CMC acquisition highlights one of our recent acquisitions and successful strategic initiatives, and allows us to build off of our strong base of technology and business. Choline products, both human and animal, are developing very nicely, and are now further complemented by the recently announced acquisitions of certain Chinook and Akzo Nobel assets. Consistent with our plan, we continue to invest in our pharmaceutical initiative, where we spent approximately $0.2 million in the quarter. We look to 2007 with strong double digit growth expectations from the core and acquired businesses, including continued spending toward our pharmaceutical objectives, for both sales and earnings."
Quarterly Conference Call
A quarterly conference call will be held on Wednesday, May 9, 2007 at 2:00 PM Eastern Daylight Time to review the first quarter 2007 results. Dino A. Rossi, President and CEO, and Frank Fitzpatrick, Chief Financial Officer, will host the call. We invite you to listen to the call by dialing toll-free (877) 407-8289, five minutes prior to the scheduled start time of the conference call. The conference call will be available for digital replay through May 14, 2007, by dialing toll-free (877) 660-6853, and using account #298 and conference ID #240239. This press release, and its accompanying financial exhibits, will also be available on the company website, www.balchem.com, prior to the conference call.
Segment Information
Balchem Corporation consists of three business segments: ARC Specialty Products, Encapsulated/Nutritional Products, and BCP Ingredients. Through ARC Specialty Products, Balchem provides specialty-packaged chemicals for use in healthcare and other industries. The Encapsulated/Nutritional Products segment provides proprietary microencapsulation and agglomeration solutions to a variety of applications in the food, pharmaceutical, human and animal nutrition marketplaces. BCP Ingredients manufactures and supplies choline chloride and derivatives used primarily in the poultry and swine industries.
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, 2006. 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
($ in 000's)
Business Segment Net Sales:
---------------------------------------------------------------------
Three Months Ended
March 31,
2007 2006
---------------------------------------------------------------------
Specialty Products $ 8,061 $ 7,951
Encap/Nutritional Products 11,500 9,789
BCP Ingredients 8,038 6,857
---------------------------------------------------------------------
Total $ 27,599 $ 24,597
---------------------------------------------------------------------
Business Segment Earnings:
---------------------------------------------------------------------
Three Months Ended
March 31,
2007 2006
---------------------------------------------------------------------
Specialty Products $ 2,903 $ 2,772
Encap/Nutritional Products 1,243 1,039
BCP Ingredients 1,196 658
Other expense (28) (24)
---------------------------------------------------------------------
Earnings bef. income taxes $ 5,314 $ 4,445
---------------------------------------------------------------------
Selected Balance Sheet Items
March 31, December 31,
--------- ------------
2007 2006
---- ----
Cash $ 3,690 $ 5,189
Accounts Receivable 15,672 11,578
Inventories 12,451 9,918
Other Current Assets 2,044 2,170
--------- ---------
Current Assets 33,857 28,855
Property, Plant, & Equipment (net) 31,184 31,313
Other Assets 61,372 32,165
--------- ---------
Total Assets $ 126,413 $ 92,333
========= =========
Current Liabilities $ 15,839 $ 9,560
Other Long-Term Obligations 30,804 7,411
--------- ---------
Total Liabilities 46,643 16,971
Stockholders' Equity 79,770 75,362
--------- ---------
Total Liabilities and Stockholders' Equity $ 126,413 $ 92,333
========= =========