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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 September 30, 2025
    OR
☐    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 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 (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 October 13, 2025, the registrant had 32,386,260 shares of its Common Stock, $.06 2/3 par value, outstanding.

Table of Contents
BALCHEM CORPORATION
QUARTERLY REPORT ON FORM 10-Q
TABLE OF CONTENTS
Page No.


Table of Contents
Part I.    Financial Information

Item 1.    Financial Statements
BALCHEM CORPORATION
Condensed Consolidated Balance Sheets
(Dollars in thousands, except share and per share data)
AssetsSeptember 30, 2025December 31, 2024
Current assets:(unaudited) 
Cash and cash equivalents$65,093 $49,515 
Accounts receivable, net of allowance for credit losses of $829 and $909 at September 30, 2025 and December 31, 2024, respectively
131,542 119,662 
Inventories, net132,435 130,802 
Prepaid expenses8,904 8,054 
Other current assets5,741 5,737 
Total current assets343,715 313,770 
Property, plant and equipment, net297,842 282,154 
Goodwill816,494 780,030 
Customer relationships and lists, net136,129 132,484 
Other intangible assets with finite lives, net31,330 32,566 
Right of use assets - operating leases15,916 15,320 
Right of use assets - finance lease1,573 1,730 
Other non-current assets18,032 17,317 
Total assets$1,661,031 $1,575,371 
Liabilities and Stockholders' Equity
Current liabilities:
Trade accounts payable$46,979 $54,745 
Accrued expenses48,592 43,750 
Accrued compensation and other benefits20,089 22,886 
Dividends payable113 28,510 
Income taxes payable6,451 4,466 
Operating lease liabilities - current3,943 3,134 
Finance lease liabilities - current202 194 
Total current liabilities126,369 157,685 
Revolving loan154,000 190,000 
Deferred income taxes47,602 43,722 
Operating lease liabilities - non-current12,257 12,967 
Finance lease liabilities - non-current1,596 1,749 
Other long-term obligations21,343 19,335 
Total liabilities363,167 425,458 
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; 32,376,314 and 32,527,244 shares issued and outstanding at September 30, 2025 and December 31, 2024, respectively
2,160 2,170 
Additional paid-in capital140,995 173,997 
Retained earnings1,113,113 997,493 
Accumulated other comprehensive income (loss)41,596 (23,747)
Total stockholders' equity1,297,864 1,149,913 
Total liabilities and stockholders' equity$1,661,031 $1,575,371 

See accompanying notes to condensed consolidated financial statements.
3
Table of Contents
BALCHEM CORPORATION
Condensed Consolidated Statements of Earnings
(Dollars in thousands, except per share data)
(unaudited)

 Three Months Ended
September 30,		Nine Months Ended
September 30,
 2025202420252024
Net sales$267,558 $239,940 $773,544 $713,680 
Cost of sales172,105 154,579 496,810 463,811 
Gross margin95,453 85,361 276,734 249,869 
Operating expenses:
Selling expenses19,092 15,557 55,318 51,798 
Research and development expenses4,496 4,329 13,458 12,283 
General and administrative expenses17,286 17,483 50,922 50,323 
 40,874 37,369 119,698 114,404 
Earnings from operations54,579 47,992 157,036 135,465 
Other expenses, net:
Interest expense, net2,629 4,071 8,319 13,709 
Other (income) expense, net(94)28 (278)(213)
2,535 4,099 8,041 13,496 
Earnings before income tax expense52,044 43,893 148,995 121,969 
Income tax expense11,755 10,056 33,375 27,077 
Net earnings$40,289 $33,837 $115,620 $94,892 
Net earnings per common share - basic$1.25 $1.05 $3.57 $2.94 
Net earnings per common share - diluted$1.24 $1.03 $3.54 $2.90 

See accompanying notes to condensed consolidated financial statements.

4
Table of Contents
BALCHEM CORPORATION
Condensed Consolidated Statements of Comprehensive Income
(Dollars in thousands)
(unaudited)

 Three Months Ended
September 30,		Nine Months Ended
September 30,
 2025202420252024
Net earnings$40,289 $33,837 $115,620 $94,892 
Other comprehensive income, net of tax:
Foreign currency translation adjustment85 21,638 65,583 5,661 
Change in postretirement benefit plans(1)(1)(240)151 
Other comprehensive income84 21,637 65,343 5,812 
Comprehensive income$40,373 $55,474 $180,963 $100,704 


See accompanying notes to condensed consolidated financial statements.

5
Table of Contents
BALCHEM CORPORATION
Condensed Consolidated Statements of Changes in Stockholders’ Equity
For the Three and Nine Months Ended September 30, 2025 and 2024
(Dollars in thousands, except share and per share data)
(Unaudited)

Total
Stockholders'
Equity		Retained
Earnings		Accumulated
Other
Comprehensive
Income (Loss)		Common StockAdditional
Paid-in
Capital
SharesAmount
Balance - December 31, 2024$1,149,913 $997,493 $(23,747)32,527,244$2,170 $173,997 
Net earnings37,053 37,053 — —— — 
Other comprehensive income21,484 — 21,484 —— — 
Repurchases of common stock (5,325)— — (32,869)(2)(5,323)
Shares and options issued under stock plans5,576 — — 117,1697 5,569 
Balance - March 31, 20251,208,701 1,034,546 (2,263)32,611,5442,175 174,243 
Net earnings38,278 38,278 — —— — 
Other comprehensive income43,775 — 43,775 —— — 
Repurchases of common stock, including
   excise tax		(33,348)— — (204,965)(13)(33,335)
Shares and options issued under stock plans10,507 — — 48,9753 10,504 
Balance - June 30, 2025$1,267,913 $1,072,824 $41,512 32,455,554$2,165 $151,412 
Net earnings40,289 40,289 — —— — 
Other comprehensive income84 — 84 —— — 
Repurchases of common stock, including
   excise tax		(15,624)— — (95,760)(6)(15,618)
Shares and options issued under stock plans5,202 — — 16,5201 5,201 
Balance - September 30, 2025$1,297,864 $1,113,113 $41,596 32,376,314$2,160 $140,995 

See accompanying notes to condensed consolidated financial statements.
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BALCHEM CORPORATION
Condensed Consolidated Statements of Changes in Stockholders’ Equity (continued)
For the Three and Nine Months Ended September 30, 2025 and 2024
(Dollars in thousands, except share and per share data)
(Unaudited)
Total
Stockholders'
Equity		Retained
Earnings		Accumulated
Other
Comprehensive
Income (Loss)		Common StockAdditional
Paid-in
Capital
SharesAmount
Balance - December 31, 2023$1,053,984 $897,488 $8,691 32,254,728$2,152 $145,653 
Net earnings28,986 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 plans13,638 — — 204,79413 13,625 
Balance - March 31, 20241,078,791 926,474 (3,872)32,423,4002,163 154,026 
Net earnings32,069 32,069 — —— — 
Other comprehensive loss(3,262)— (3,262)—— — 
Repurchases of common stock, including
   excise tax		(11)— — (72)— (11)
Shares and options issued under stock plans4,777 — — 11,5301 4,776 
Balance - June 30, 2024$1,112,364 $958,543 $(7,134)32,434,858$2,164 $158,791 
Net earnings33,837 33,837 — —— — 
Other comprehensive income21,637 — 21,637 —— — 
Repurchases of common stock, including
   excise tax		(165)— — (915)— (165)
Shares and options issued under stock plans9,553 — — 73,7735 9,548 
Balance - September 30, 2024$1,177,226 $992,380 $14,503 32,507,716$2,169 $168,174 

See accompanying notes to condensed consolidated financial statements.
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BALCHEM CORPORATION
Condensed Consolidated Statements of Cash Flows
(Dollars in thousands)
(unaudited)
 Nine Months Ended
September 30,
 20252024
Cash flows from operating activities:  
Net earnings$115,620 $94,892 
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization33,969 37,077 
Stock compensation expense14,298 12,787 
Deferred income taxes(273)(1,918)
Provision for credit losses(118)238 
Unrealized gain on foreign currency transactions and deferred compensation(1,207)(730)
(Gain) loss on disposal of assets and asset impairment(94)1,479 
Change in fair value of contingent consideration liability— (91)
Changes in assets and liabilities
Accounts receivable(8,900)5,220 
Inventories2,622 (8,738)
Prepaid expenses and other current assets24 1,199 
Accounts payable and accrued expenses(9,024)(9,734)
Income taxes1,440 (3,110)
Other924 1,111 
Net cash provided by operating activities149,281 129,682 
Cash flows from investing activities:
Capital expenditures and intangible assets acquired(27,275)(22,936)
Cash paid for acquisitions, net of cash acquired(323)— 
Proceeds from sale of assets 267 272 
Investment in affiliates(144)(113)
Net cash used in investing activities(27,475)(22,777)
Cash flows from financing activities:
Proceeds from revolving loan70,000 26,000 
Principal payments on revolving loan(106,000)(108,569)
Principal payments on finance leases(145)(169)
Proceeds from stock options exercised6,867 15,084 
Dividends paid(28,276)(25,572)
Repurchases of common stock(54,008)(5,376)
Net cash used in financing activities(111,562)(98,602)
Effect of exchange rate changes on cash5,334 944 
Increase in cash and cash equivalents15,578 9,247 
Cash and cash equivalents beginning of period49,515 64,447 
Cash and cash equivalents end of period$65,093 $73,694 


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 and nine months ended September 30, 2025 are not necessarily indicative of the operating results expected for the full year or any interim period.
Certain reclassifications have been made to prior period amounts to conform with the current period's presentation.

Recent Accounting Pronouncements

Recently Issued Accounting Standards
In November 2024, the FASB issued 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.

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NOTE 2 - STOCKHOLDERS' EQUITY
Stock-Based Compensation
The Company’s results for the three and nine months ended September 30, 2025 and 2024 reflected the following stock-based compensation cost, and such compensation cost had the following effects on net earnings:

Increase/(Decrease) for theIncrease/(Decrease) for the
Three Months Ended September 30,Nine Months Ended September 30,
2025202420252024
Cost of sales$382 $441 $1,356 $1,266 
Operating expenses4,268 3,710 12,942 11,521 
Net earnings(3,626)(3,188)(11,131)(9,815)

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 September 30, 2025, the Plan had 680,930 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 nine months ended September 30, 2025 and 2024 is summarized below:
For the Nine Months Ended September 30, 2025Shares (000s)Weighted
Average
Exercise
Price		Aggregate
Intrinsic
Value		Weighted
Average
Remaining
Contractual
Term
Outstanding as of December 31, 2024962 $114.81 $46,346 
Granted51 159.18 
Exercised(76)90.46 
Forfeited(3)142.33 
Canceled(1)139.81 
Outstanding as of September 30, 2025933 $119.11 $29,374 5.4
Exercisable as of September 30, 2025661 $108.04 $27,784 4.3
For the Nine Months Ended September 30, 2024Shares (000s)Weighted
Average
Exercise
Price		Aggregate
Intrinsic
Value		Weighted
Average
Remaining
Contractual
Term
Outstanding as of December 31, 20231,078 $104.38 $47,889 
Granted113 143.43 
Exercised(198)75.94 
Forfeited(2)137.06 
Canceled— — 
Outstanding as of September 30, 2024991 $114.49 $60,932 6.0
Exercisable as of September 30, 2024626 $99.39 $47,926 4.6
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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. For the nine months ended September 30, 2025, the fair value of each option grant was estimated on the date of the grant using the following weighted average assumptions: dividend yields of 0.6%; expected volatilities of 26%; risk-free interest rates of 4.5%; and expected lives of 5.2 years. For the nine months ended September 30, 2024, the fair value of each option grant was estimated on the date of the grant using the following weighted average assumptions: dividend yields of 0.6%; expected volatilities of 28%; risk-free interest rates of 4.1%; and expected lives of 5.0 years.
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 of the award.

Other information pertaining to option activity during the three and nine months ended September 30, 2025 and 2024 is as follows:

 Three Months Ended
September 30,		Nine Months Ended
September 30,
 2025202420252024
Weighted-average fair value of options granted$— $— $48.86 $44.52 
Total intrinsic value of stock options exercised ($000s)$621 $5,372 $5,380 $16,693 
Non-vested restricted stock activity for the nine months ended September 30, 2025 and 2024 is summarized below:
Nine Months Ended September 30,
20252024
Shares (000s)Weighted
Average Grant
Date Fair
Value		Shares (000s)Weighted
Average Grant
Date Fair
Value
Non-vested balance as of December 31122 $141.62 116 $133.06 
Granted65 158.89 50 147.49 
Vested(34)137.78 (34)120.01 
Forfeited(3)148.11 (3)141.23 
Non-vested balance as of September 30150 $149.84 129 $141.94 

Non-vested performance share activity for the nine months ended September 30, 2025 and 2024 is summarized below:

Nine Months Ended September 30,
20252024
Shares (000s)Weighted
Average Grant
Date Fair
Value		Shares (000s)Weighted
Average Grant
Date Fair
Value
Non-vested balance as of December 3179 $150.73 76 $135.25 
Granted50 147.96 47 152.28
Vested(44)130.29 (44)106.57
Forfeited(4)152.69 — —
Non-vested balance as of September 3081 $160.14 79 $150.73 

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The Company's performance share (“PS”) awards provide the recipients the right to receive a certain number of shares of the Company’s common stock in the future, subject to an EBITDA performance hurdle, where vesting is dependent upon the Company achieving a certain EBITDA percentage growth over the performance period, or relative total shareholder return ("TSR") where vesting is dependent upon the Company’s TSR performance over the performance period relative to a comparator group consisting of the Russell 2000 index constituents. For grants made in 2025, the performance metrics are comprised of an EBITDA performance hurdle, where vesting is dependent upon the Company achieving a certain EBITDA percentage growth over the performance period and modified based on the Company's TSR performance over the performance period relative to a comparator group consisting of the Russell 2000 index constituents. Expense is measured based on the fair value of the grant at the date of grant. A Monte-Carlo simulation has been used to estimate the fair value. The assumptions used in the fair value determination were risk free interest rates of 4.3% and 4.2%; dividend yields of 0.0% and 0.0%; volatilities of 26% and 25%; and initial TSR's of -8.8% and 10.3%, in each case for the nine months ended September 30, 2025 and 2024, respectively. Expense is estimated based on the number of shares expected to vest, assuming the requisite service period is rendered and the probable outcome of the performance condition is achieved. The estimate is revised if subsequent information indicates that the actual number of shares likely to vest differs from previous estimates. Expense is ultimately adjusted based on the actual achievement of service and performance targets. The PS will cliff vest 100% at the end of the third year following the grant in accordance with the performance metrics set forth. Grants may be subject to a mandatory holding period of one year from the vesting date. For PS awards granted in 2024 and 2025, grants are subject to such holding period.

As of September 30, 2025 and 2024, there were $23,995 and $24,300, respectively, of total unrecognized compensation costs related to non-vested share-based compensation arrangements granted under the plans. As of September 30, 2025, the unrecognized compensation cost is expected to be recognized over a weighted-average period of approximately 1.5 years. The Company estimates that share-based compensation expense for the year ended December 31, 2025 will be approximately $18,900.
Repurchase of Common Stock
The Company's Board of Directors has approved a stock repurchase program. The total authorization under this program is 3,763,038 shares. Since the inception of the program in June 1999, a total of 3,475,622 shares have been repurchased. The Company intends to acquire shares from time to time at prevailing market prices if and to the extent it deems it is advisable to do so based on its assessment of corporate cash flow, market conditions and other factors. Open market repurchases of common stock could be made pursuant to a share repurchase agreement in compliance with Rule 10b-18 or a trading plan established pursuant to Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, which would permit common stock to be repurchased at a time that the Company might otherwise be precluded from doing so under insider trading laws or self-imposed trading restrictions. The Company also repurchases (withholds) shares from employees in connection with the tax settlement of vested shares and/or exercised stock options, as applicable, under the Company's omnibus incentive plan. Such repurchases of shares from employees are funded with existing cash on hand. During the nine months ended September 30, 2025, the Company repurchased 333,594 shares from open market purchases and/or withheld shares from employees in connection with the tax settlement of vested shares and/or exercised stock options, as applicable, under the Company's omnibus incentive plan at an average cost of $161.90. During the nine months ended September 30, 2024, the Company purchased 37,109 shares from employees in connection with the tax settlement of vested shares and/or exercised stock options, as applicable, under the Company's omnibus incentive plan at an average cost of $144.89.


NOTE 3 – INVENTORIES
Inventories, net of reserves at September 30, 2025 and December 31, 2024 consisted of the following:

September 30, 2025December 31, 2024
Raw materials$44,593 $45,319 
Work in progress5,341 4,510 
Finished goods82,501 80,973 
Total inventories$132,435 $130,802 

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NOTE 4 – PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment at September 30, 2025 and December 31, 2024 are summarized as follows:
 September 30, 2025December 31, 2024
Land$12,426 $11,690 
Building115,946 106,954 
Equipment337,141 315,001 
Construction in progress83,772 77,508 
 549,285 511,153 
Less: accumulated depreciation251,443 228,999 
Property, plant and equipment, net$297,842 $282,154 

In accordance with Topic 360, the Company reviews long-lived assets for impairment whenever events indicate that the carrying amount of the assets may not be fully recoverable. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset, which is generally based on discounted cash flows. Included in "General and administrative expenses" was $521 of restructuring-related impairment charges related to an asset that was held for sale for both the three and nine months ended September 30, 2024. There were no such charges for the three and nine months ended September 30, 2025.


NOTE 5 - INTANGIBLE ASSETS
The Company had goodwill in the amount of $816,494 and $780,030 as of September 30, 2025 and December 31, 2024, respectively, subject to the provisions of ASC 350, “Intangibles-Goodwill and Other.” The increase in goodwill is primarily due to foreign currency translation adjustments.
Identifiable intangible assets with finite lives at September 30, 2025 and December 31, 2024 are summarized as follows:

 Amortization
Period
(in years)		Gross Carrying Amount at September 30, 2025Accumulated Amortization at September 30, 2025Gross Carrying Amount at December 31, 2024Accumulated Amortization at December 31, 2024
Customer relationships and lists
10-20
$370,726 $234,597 $354,051 $221,567 
Trademarks and trade names
2-17
52,256 43,303 50,971 41,417 
Developed technology
5-12
42,379 22,790 40,074 20,362 
Other
2-18
25,019 22,231 25,154 21,854 
   Other intangible assets with finite lives119,654 88,324 116,199 83,633 
Total intangible assets with finite lives$490,380 $322,921 $470,250 $305,200 
Amortization of identifiable intangible assets was approximately $4,341 and $12,662 for the three and nine months ended September 30, 2025 respectively, and $3,795 and $15,380 for the three and nine months ended September 30, 2024, respectively. Assuming no change in the gross carrying value of identifiable intangible assets, estimated amortization expense is $4,226 for the remainder of 2025, $16,837 for 2026, $16,305 for 2027, $15,844 for 2028, $15,434 for 2029 and $15,050 for 2030. At September 30, 2025 and December 31, 2024, there were no identifiable intangible assets with indefinite useful lives as defined by ASC 350. Identifiable intangible assets are reflected in "Customer relationships and lists, net" and “Other intangible assets with finite lives, net” on the Company’s condensed consolidated balance sheets. There were no changes to the useful lives of intangible assets subject to amortization during the nine months ended September 30, 2025 and 2024.


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NOTE 6 - EQUITY METHOD INVESTMENT
In 2013, the Company and Eastman Chemical Company formed a joint venture (66.66% / 33.34% ownership), St. Gabriel CC Company, LLC, to design, develop, and construct an expansion of the Company’s St. Gabriel aqueous choline chloride plant. The Company contributed the St. Gabriel plant, at cost, and all continued expansion and improvements are funded by the owners. The joint venture became operational as of July 1, 2016. St. Gabriel CC Company, LLC is a Variable Interest Entity (VIE) because the total equity at risk is not sufficient to permit the joint venture to finance its own activities without additional subordinated financial support. Additionally, voting rights (2 votes each) are not proportionate to the owners’ obligation to absorb expected losses or receive the expected residual returns of the joint venture. The Company receives the majority of the production offtake capacity, which may be adjusted from time to time to the extent the owners agree as such, and absorbs operating expenses approximately proportional to the actual percentage of offtake. The joint venture is accounted for under the equity method of accounting since the Company is not the primary beneficiary as the Company does not have the power to direct the activities of the joint venture that most significantly impact its economic performance. The Company recognized a loss of $123 and $368 for the three and nine months ended September 30, 2025, respectively, and $124 and $367 for the three and nine months ended September 30, 2024, respectively, relating to its portion of the joint venture's expenses in other expense. The Company made capital contributions to the investment totaling $39 and $144 for the three and nine months ended September 30, 2025, respectively, and $33 and $113 for the three and nine months ended September 30, 2024, respectively. The carrying value of the joint venture at September 30, 2025 and December 31, 2024 was $3,632 and $3,856, respectively, and is recorded in "Other non-current assets" on the condensed consolidated balance sheets.


NOTE 7 – REVOLVING LOAN
On July 27, 2022, the Company entered into an Amended and Restated Credit Agreement (the "2022 Credit Agreement") with certain lenders in the form of a senior secured revolving credit facility, due on July 27, 2027. The 2022 Credit Agreement allows for up to $550,000 of borrowing. The loans may be used for working capital, letters of credit, and other corporate purposes and may be drawn upon at the Company’s discretion. As of September 30, 2025 and December 31, 2024, the total balance outstanding on the 2022 Credit Agreement amounted to $154,000 and $190,000, respectively. There are no installment payments required on the revolving loans; they may be voluntarily prepaid in whole or in part without premium or penalty, and all outstanding amounts are due on the maturity date.
Amounts outstanding under the 2022 Credit Agreement are subject to an interest rate equal to a fluctuating rate as defined by the 2022 Credit Agreement plus an applicable rate. The applicable rate is based upon the Company’s consolidated net leverage ratio, as defined in the 2022 Credit Agreement, and the interest rate was 5.27% at September 30, 2025. The Company is also required to pay a commitment fee on the unused portion of the revolving loan, which is based on the Company’s consolidated net leverage ratio as defined in the 2022 Credit Agreement and ranges from 0.150% to 0.225% (0.150% at September 30, 2025). The unused portion of the revolving loan amounted to $396,000 at September 30, 2025. The Company is also required to pay, as applicable, letter of credit fees, administrative agent fees, and other fees to the arrangers and lenders.
Costs associated with the issuance of the revolving loans are capitalized and amortized on a straight-line basis over the term of the 2022 Credit Agreement, which is not materially different than the effective interest method. Capitalized costs net of accumulated amortization were $527 and $743 at September 30, 2025 and December 31, 2024, respectively, and are included in "Other non-current assets" on the condensed consolidated balance sheets. Amortization expense pertaining to these costs totaled $72 and $216 for both the three and nine months ended September 30, 2025 and 2024 and are included in "Interest expense, net" in the accompanying condensed consolidated statements of earnings.
The 2022 Credit Agreement contains quarterly covenants requiring the consolidated leverage ratio to be less than a certain maximum ratio and the consolidated interest coverage ratio to exceed a certain minimum ratio. At September 30, 2025, the Company was in compliance with these covenants. Indebtedness under the Company’s loan agreements is secured by assets of the Company.

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NOTE 8– NET EARNINGS PER SHARE
The following presents a reconciliation of the net earnings and shares used in calculating basic and diluted net earnings per share:

Three Months Ended
September 30,		Nine Months Ended
September 30,
2025202420252024
Net Earnings - Basic and Diluted$40,289 $33,837 $115,620 $94,892 
Shares (000s)
Weighted Average Common Shares - Basic32,265 32,373 32,353 32,311 
Effect of Dilutive Securities – Stock Options, Restricted Stock, and Performance Shares330 410 349 375 
Weighted Average Common Shares - Diluted32,595 32,783 32,702 32,686 
Net Earnings Per Share - Basic$1.25 $1.05 $3.57 $2.94 
Net Earnings Per Share - Diluted$1.24 $1.03 $3.54 $2.90 
The number of anti-dilutive shares were 221,170 and 224,180 for the three and nine months ended September 30, 2025, respectively, and 189,830 and 326,020 for the three and nine months ended September 30, 2024, respectively. Anti-dilutive shares could potentially dilute basic earnings per share in future periods and therefore, were not included in diluted earnings per share.


NOTE 9 – INCOME TAXES
The Company’s effective tax rate for the three months ended September 30, 2025 and 2024, was 22.6% and 22.9%, respectively. The lower effective tax rate for the quarter was primarily due to certain lower state taxes. The effective tax rate for the nine months ended September 30, 2025 and 2024 was 22.4% and 22.2%, respectively. The higher effective tax rate for the nine months ended September 30, 2025 was primarily due to lower tax benefits from stock-based compensation partially offset by certain lower state taxes.
On July 4, 2025, the One Big Beautiful Bill Act ("OBBBA") was signed into law in the United States which includes a broad range of tax provisions. While the Company currently does not anticipate the OBBBA will have a material impact on its estimated annual effective tax rate in 2025, we will continue to assess its impact.
Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company regularly reviews its deferred tax assets for recoverability and would establish a valuation allowance if it believed that such assets may not be recovered, taking into consideration historical operating results, expectations of future earnings, changes in its operations and the expected timing of the reversals of existing temporary differences.
The Company accounts for uncertainty in income taxes utilizing ASC 740-10, "Income Taxes". ASC 740-10 clarifies whether or not to recognize assets or liabilities for tax positions taken that may be challenged by a tax authority. It prescribes a recognition threshold and measurement attribute for financial statement disclosure of tax positions taken or expected to be taken. This interpretation also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, and disclosures. The application of ASC 740-10 requires judgment related to the uncertainty in income taxes and could impact our effective tax rate.
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The Company files income tax returns in the U.S. and in various states and foreign countries. As of September 30, 2025, in the major jurisdictions where the Company operates, it is generally no longer subject to income tax examinations by tax authorities for years before 2020. The Company had approximately $7,349 and $6,720 of unrecognized tax benefits, which are included in "Other long-term obligations" on the Company’s condensed consolidated balance sheets, as of September 30, 2025 and December 31, 2024, respectively. The Company includes interest expense or income as well as potential penalties on uncertain tax positions as a component of "Income tax expense" in the condensed consolidated statements of earnings. Total accrued interest and penalties related to uncertain tax positions at September 30, 2025 and December 31, 2024 were approximately $2,666 and $2,352, respectively, and are included in "Other long-term obligations" on the Company’s condensed consolidated balance sheets.
The European Union ("EU") member states formally adopted the EU's Pillar Two Directive on December 15, 2022, which was established by the Organization for Economic Co-operation and Development. Pillar Two generally provides for a 15 percent minimum effective tax rate for the jurisdictions where multinational enterprises operate. While the Company does not anticipate that this will have a material impact on its tax provision or effective tax rate, the Company continues to monitor evolving tax legislation in the jurisdictions in which it operates.


NOTE 10 – SEGMENT INFORMATION
Balchem Corporation reports three reportable segments: Human Nutrition and Health, Animal Nutrition and Health, and Specialty Products. Sales and production of products outside of our reportable segments and other minor business activities are included in "Other and Unallocated".
The Company's Chief Operating Decision Maker ("CODM") is the Chief Executive Officer. The CODM receives a profit and loss reporting package which provides segment information including revenue, cost of goods sold, gross margin, total operating expenses, and earnings from operations. The CODM utilizes this monthly profit and loss reporting package to analyze segment performance and appropriately allocate resources.
Pursuant to ASU 2023-07, "Segment Reporting (Topic 280) - Improvements to Reportable Segment Disclosures", the significant segment information is summarized as follows:

For the Three Months Ended September 30, 2025
 HNHANHSPOther and UnallocatedTotal
Net sales$174,088 $56,376 $35,683 $1,411 $267,558 
Cost of sales109,961 (1)44,630 (1)15,735 (1)1,779 (1)172,105 
Gross margin64,127 11,746 19,948 (368)95,453 
Operating expenses23,296 (2)8,033 
(3)
8,414 (4)1,131 (5)40,874 
Earnings from operations40,831 3,713 11,534 (1,499)54,579 
Other expenses:
   Interest expense, net2,629 
   Other income, net(94)
2,535 
Earnings before income
   tax expense		52,044 
   Income tax expense11,755 
Net earnings$40,289 
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(1) Cost of sales are primarily comprised of raw materials consumed in the manufacture of product, as well as manufacturing labor, depreciation expense, and other overhead expenses necessary to convert purchased materials and supplies into finished product. Cost of sales also includes inbound freight costs, outbound freight costs for shipping products to customers, warehousing costs, quality control and obsolescence expense.
(2) Operating expenses within HNH are primarily comprised of compensation-related costs, professional services, including advertising and marketing costs, and amortization expense in connection with certain acquired intangible assets.
(3) Operating expenses within ANH are primarily comprised of compensation-related costs and professional services, including advertising and marketing costs.
(4) Operating expenses within SP are primarily comprised of compensation-related costs, professional services, and amortization expense in connection with certain acquired intangible assets.
(5) Operating expenses within Other and Unallocated are primarily comprised of compensation-related costs and transaction and integration costs.


For the Nine Months Ended September 30, 2025
 HNHANHSPOther and UnallocatedTotal
Net sales$493,318 $169,681 $106,143 $4,402 $773,544 
Cost of sales308,811 (6)134,033 (6)48,292 (6)5,674 (6)496,810 
Gross margin184,507 35,648 57,851 (1,272)276,734 
Operating expenses67,360 (7)23,185 (8)25,463 (9)3,690 (10)119,698 
Earnings from operations117,147 12,463 32,388 (4,962)157,036 
Other expenses:
   Interest expense, net8,319 
   Other income, net(278)
8,041 
Earnings before income
   tax expense		148,995 
   Income tax expense33,375 
Net earnings$115,620 
(6) Cost of sales are primarily comprised of raw materials consumed in the manufacture of product, as well as manufacturing labor, depreciation expense, and other overhead expenses necessary to convert purchased materials and supplies into finished product. Cost of sales also includes inbound freight costs, outbound freight costs for shipping products to customers, warehousing costs, quality control and obsolescence expense.
(7) Operating expenses within HNH are primarily comprised of compensation-related costs, professional services, including advertising and marketing costs, and amortization expense in connection with certain acquired intangible assets.
(8) Operating expenses within ANH are primarily comprised of compensation-related costs and professional services, including advertising and marketing costs.
(9) Operating expenses within SP are primarily comprised of compensation-related costs, professional services, and amortization expense in connection with certain acquired intangible assets.
(10) Operating expenses within Other and Unallocated are primarily comprised of compensation-related costs and transaction and integration costs.

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For the Three Months Ended September 30, 2024
 HNHANHSPOther and UnallocatedTotal
Net sales$152,283 $52,906 $33,191 $1,560 $239,940 
Cost of sales95,827 (11)42,254 (11)14,338 (11)2,160 (11)154,579 
Gross margin56,456 10,652 18,853 (600)85,361 
Operating expenses20,878 (12)7,123 
(13)
8,337 (14)1,031 (15)37,369 
Earnings from operations35,578 3,529 10,516 (1,631)47,992 
Other expenses:
   Interest expense, net4,071 
   Other expense, net28 
4,099 
Earnings before income
   tax expense		43,893 
   Income tax expense10,056 
Net earnings$33,837 
(11) Cost of sales are primarily comprised of raw materials consumed in the manufacture of product, as well as manufacturing labor, depreciation expense, and other overhead expenses necessary to convert purchased materials and supplies into finished product. Cost of sales also includes inbound freight costs, outbound freight costs for shipping products to customers, warehousing costs, quality control and obsolescence expense.
(12) Operating expenses within HNH are primarily comprised of compensation-related costs, professional services, including advertising and marketing costs, and amortization expense in connection with certain acquired intangible assets.
(13) Operating expenses within ANH are primarily comprised of compensation-related costs and professional services, including advertising and marketing costs.
(14) Operating expenses within SP are primarily comprised of compensation-related costs, professional services, and amortization expense in connection with certain acquired intangible assets.
(15) Operating expenses within Other and Unallocated are primarily comprised of compensation-related costs and transaction and integration costs.

For the Nine Months Ended September 30, 2024
 HNHANHSPOther and UnallocatedTotal
Net sales$452,955 $156,384 $99,898 $4,443 $713,680 
Cost of sales286,424 (16)126,263 (16)44,929 (16)6,195 (16)463,811 
Gross margin166,531 30,121 54,969 (1,752)249,869 
Operating expenses64,329 (17)21,839 
(18)
25,026 (19)3,210 (20)114,404 
Earnings from operations102,202 8,282 29,943 (4,962)135,465 
Other expenses:
   Interest expense, net13,709 
   Other income, net(213)
13,496 
Earnings before income
   tax expense		121,969 
   Income tax expense27,077 
Net earnings$94,892 
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(16) Cost of sales are primarily comprised of raw materials consumed in the manufacture of product, as well as manufacturing labor, depreciation expense, and other overhead expenses necessary to convert purchased materials and supplies into finished product. Cost of sales also includes inbound freight costs, outbound freight costs for shipping products to customers, warehousing costs, quality control and obsolescence expense.
(17) Operating expenses within HNH are primarily comprised of compensation-related costs, professional services, including advertising and marketing costs, and amortization expense in connection with certain acquired intangible assets.
(18) Operating expenses within ANH are primarily comprised of compensation-related costs and professional services, including advertising and marketing costs.
(19) Operating expenses within SP are primarily comprised of compensation-related costs, professional services, and amortization expense in connection with certain acquired intangible assets.
(20) Operating expenses within Other and Unallocated are primarily comprised of compensation-related costs and transaction and integration costs.

Business Segment AssetsSeptember 30,
2025		December 31,
2024
Human Nutrition and Health$1,232,690 $1,185,962 
Animal Nutrition and Health171,846 161,243 
Specialty Products172,496 161,283 
Other and Unallocated (21)
83,999 66,883 
Total$1,661,031 $1,575,371 
(21) Other and Unallocated assets consist of certain cash, capitalized loan issuance costs, other assets, investments, and income taxes, which the Company does not allocate to its individual business segments. It also includes assets associated with a few minor businesses which individually do not meet the quantitative thresholds for separate presentation.

Depreciation/Amortization		Three Months Ended
September 30,		Nine Months Ended
September 30,
 2025202420252024
Human Nutrition and Health$7,615 $6,803 $22,462 $24,729 
Animal Nutrition and Health1,834 2,068 5,424 6,266 
Specialty Products1,872 1,770 5,394 5,314 
Other and Unallocated231 262 689 768 
Total$11,552 $10,903 $33,969 $37,077 


Capital Expenditures		Nine Months Ended September 30,
 20252024
Human Nutrition and Health$14,075 $11,850 
Animal Nutrition and Health9,940 8,459 
Specialty Products2,768 1,948 
Other and Unallocated350 255 
Total$27,133 $22,512 


NOTE 11 – REVENUE
Revenue Recognition
Revenues are recognized when control of the promised goods is transferred to customers, in an amount that reflects the consideration the Company expects to realize in exchange for those goods.
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The following table presents revenues disaggregated by revenue source. Sales and usage-based taxes are excluded from revenues.

Three Months Ended
September 30,		Nine Months Ended
September 30,
2025202420252024
Product Sales Revenue$267,078 $239,522 $772,180 $712,374 
Royalty Revenue480 418 1,364 1,306 
Total Revenue$267,558 $239,940 $773,544 $713,680 

The following table presents revenues disaggregated by geography, based on customers' delivery addresses:

Three Months Ended
September 30,		Nine Months Ended
September 30,
2025202420252024
United States$198,064 $181,990 $570,492 $541,768 
Foreign Countries69,494 57,950 203,052 171,912 
Total Revenue$267,558 $239,940 $773,544 $713,680 


Product Sales Revenues
The Company’s primary operation is the manufacturing and sale of health and nutrition ingredient products, in which the Company receives an order from a customer and fulfills that order. The Company’s product sales are considered point-in-time revenue.

Royalty Revenues
Royalty revenue consists of agreements with customers to use the Company’s intellectual property in exchange for a sales-based royalty. Royalties are considered over time revenue and are recorded in the Human Nutrition and Health segment.

Contract Liabilities
The Company records contract liabilities when cash payments are received or due in advance of performance, including amounts which are refundable.
The Company’s payment terms vary by the type and location of customers and the products offered. The term between invoicing and when payment is due is not significant. For certain products or services and customer types, the Company requires payment before the products are delivered to the customer.
Practical Expedients and Exemptions
The Company generally expenses sales commissions when incurred because the amortization period would have been one year or less. These costs are recorded within selling and marketing expenses.
The Company does not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which the Company recognizes revenue at the amount to which it has the right to invoice for products shipped.

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NOTE 12 – SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid during the nine months ended September 30, 2025 and 2024 for income taxes and interest is as follows:
Nine Months Ended September 30,
20252024
Income taxes$29,625 $31,575 
Interest$8,516 $14,500 



NOTE 13 – ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
The changes in accumulated other comprehensive income (loss) were as follows:

 Three Months Ended
September 30,		Nine Months Ended
September 30,
 2025202420252024
Net foreign currency translation adjustment$85 $21,638 $65,583 $5,661 
Net change in postretirement benefit plan (see Note 14 for
   further information)
Amortization of gain(1)(2)(4)(7)
Prior service (gain) loss arising during the period— — (319)206 
Total before tax(1)(2)(323)199 
Tax— 1 83 (48)
Net of tax(1)(1)(240)151 
Total other comprehensive income$84 $21,637 $65,343 $5,812 



Accumulated other comprehensive income (loss) at September 30, 2025 and December 31, 2024 consisted of the following:

 Foreign currency
translation
adjustment		Postretirement
benefit plan		Total
Balance December 31, 2024$(24,182)$435 $(23,747)
Other comprehensive income (loss)65,583 (240)65,343 
Balance September 30, 2025$41,401 $195 $41,596 


NOTE 14 – EMPLOYEE BENEFIT PLANS
Defined Contribution Plans
The Company sponsors one 401(k) savings plan for eligible employees, which allows participants to make pretax or after tax contributions, and the Company matches certain percentages of those contributions with shares of the Company’s Common Stock. The plan also has a discretionary profit sharing portion. All amounts contributed to the plan are deposited into a trust fund administered by independent trustees.
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Postretirement Medical Plans
The Company provides postretirement benefits in the form of two unfunded postretirement medical plans; one that is under a collective bargaining agreement and covers eligible retired employees of the Verona facility and one for officers of the Company pursuant to the Balchem Corporation Officer Retiree Program.
Net periodic benefit costs for such retirement medical plans were as follows:

 Nine Months Ended September 30,
 20252024
Service cost$87 $84 
Interest cost53 41 
Amortization of gain(7)(7)
Net periodic benefit cost$133 $118 

The amounts recorded for these obligations on the Company’s condensed consolidated balance sheets as of September 30, 2025 and December 31, 2024 are $1,531 and $1,522, respectively, and are included in "Other long-term obligations" on the Company's condensed consolidated balance sheets. These plans are unfunded and approved claims are paid from Company funds. Historical cash payments made under such plans have typically been less than $200 per year.

Defined Benefit Pension Plan
On May 27, 2019, the Company acquired Chemogas Holding NV, a privately held specialty gases company headquartered in Grimbergen, Belgium ("Chemogas"), which has an unfunded defined benefit pension plan. The plan provides for the payment of a lump sum at retirement or payments in case of death of the covered employees. The amounts recorded for these obligations on the Company's condensed consolidated balance sheets as of September 30, 2025 and December 31, 2024 were $800 and $613, respectively, and were included in "Other long-term obligations" on the Company's condensed consolidated balance sheets.

Net periodic benefit costs for such benefit pension plan were as follows:

Nine Months Ended September 30,
 20252024
Service cost with interest to end of year$161 $58 
Interest cost61 43 
Expected return on plan assets(45)(32)
Amortization of loss3 — 
Total net periodic benefit cost$180 $69 

Deferred Compensation Plan
The Company provides an unfunded, nonqualified deferred compensation plan maintained for the benefit of a select group of management or highly compensated employees. Assets of the plan are held in a rabbi trust, and are subject to additional risk of loss in the event of bankruptcy or insolvency of the Company. The deferred compensation liability was $12,574 as of September 30, 2025, of which $12,551 was included in "Other long-term obligations" and $23 was included in "Accrued compensation and other benefits" on the Company's condensed consolidated balance sheets. The deferred compensation liability was $11,470 as of December 31, 2024, of which $11,449 was included in "Other long-term obligations" and $21 was included in "Accrued compensation and other benefits" on the Company’s consolidated balance sheets. The related assets of the irrevocable trust funds (also known as "rabbi trust funds") were $12,566 as of September 30, 2025, of which $12,543 was included in "Other non-current assets" and $23 was included in "Other current assets" on the Company's condensed consolidated balance sheet. The rabbi trust funds were $11,465 as of December 31, 2024 and were included in "Other non-current assets" on the Company's consolidated balance sheets.

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NOTE 15 – COMMITMENTS AND CONTINGENCIES

The Company is obligated to make rental payments under non-cancelable operating and finance leases. Aggregate future minimum rental payments required under these leases at September 30, 2025 are disclosed in Note 18, Leases.
The Company’s Verona, Missouri facility, while held by a prior owner, Syntex Agribusiness, Inc. (“Syntex”), was designated by the U.S. Environmental Protection Agency (the "EPA") as a Superfund site and placed on the National Priorities List in 1983 because of dioxin contamination on portions of the site. Remediation was conducted by Syntex under the oversight of the EPA and the Missouri Department of Natural Resources. The Company is indemnified by the sellers under its May 2001 asset purchase agreement covering its acquisition of the Verona, Missouri facility for potential liabilities associated with the Superfund site. One of the sellers, in turn, has the benefit of certain contractual indemnification by Syntex in relation to the implementation of the above-described Superfund remedy. In June 2023, in response to a Special Notice Letter received from the EPA in 2022, BCP Ingredients, Inc. ("BCP"), the Company's subsidiary that operates the site, Syntex, EPA, and the State of Missouri entered into an Administrative Settlement Agreement and Order on Consent (“ASAOC”) for a focused remedial investigation/feasibility study ("RI/FS") under which (a) BCP will conduct a source investigation of potential source(s) of releases of 1,4-dioxane and chlorobenzene at a portion of the site and (b) BCP and Syntex will complete a RI/FS to determine a potential remedy, if any is required. Activities under the ASAOC are underway and are expected to continue for some period of time.
Separately, in June 2022, the EPA conducted an inspection of BCP’s Verona, Missouri facility (“2022 EPA Inspection”) which was followed by BCP entering into an Administrative Order for Compliance on Consent (“AOC”) with the EPA in relation to its risk management program at the Verona facility. Further, in January 2023, BCP entered into an Amended AOC with the EPA whereby the parties agreed to the extension of certain timelines. BCP timely completed all requirements under the Amended AOC. In November 2023, BCP received a notice from the Environment and Natural Resources Division of the U.S Department of Justice (“DOJ”) primarily related to the 2022 EPA Inspection, which extended the opportunity to discuss alleged violations of Sections 112(r)(7) of the Clean Air Act and regulations in 40 C.F.R. Part 68, commonly known as the Risk Management Plan Rule (“RMP Rule”). BCP participated in such discussions during 2024, and in December 2024, BCP reached a settlement with the EPA and DOJ to resolve these alleged violations. Pursuant to the settlement, which was entered into on January 31, 2025, BCP agreed to: (a) pay a $300 civil penalty; (b) complete a new scrubber system project; and (c) spend $350 to implement projects benefiting the surrounding community, such as emergency equipment for the local fire department and two vehicles to be used as mobile health clinics. The amount associated with this settlement was consistent with the amount previously accrued as a loss contingency. BCP has completed most of its obligations under this settlement and will continue to take steps to timely complete any remaining items.
In addition to the above, from time to time, the Company is a party to various legal proceedings, litigation, claims and assessments. While it is not possible to predict the ultimate disposition of each of these matters, management believes that the ultimate outcome of such matters will not have a material effect on the Company's consolidated financial position, results of operations, liquidity or cash flows.

NOTE 16 – FAIR VALUE OF FINANCIAL INSTRUMENTS
The Company has a number of financial instruments, none of which are held for trading purposes. The Company estimates that the fair value of all financial instruments at September 30, 2025 and December 31, 2024 does not differ materially from the aggregate carrying values of its financial instruments recorded in the accompanying condensed consolidated balance sheets. The estimated fair value amounts have been determined by the Company using available market information and appropriate valuation methodologies. Considerable judgment is required in interpreting market data to develop the estimates of fair value, and, accordingly, the estimates are not necessarily indicative of the amounts that the Company could realize in a current market exchange.

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The following fair value hierarchy is used to classify assets and liabilities and the table below presents the carrying amounts and the estimated fair values of the Company's financial assets and liabilities measured on a recurring basis as defined by ASC 820, "Fair Value Measurement."
•Level 1 - Inputs are quoted prices in active markets that are accessible at the measurement date for identical assets or liabilities.
•Level 2 - Inputs include observable inputs other than quoted prices in active markets.
•Level 3 - Inputs are unobservable inputs for which there is little or no market data available.
Carrying AmountFair Value Measurements
Level 1Level 2Level 3
September 30, 2025
Assets:
Money market funds (1)
$1,446 $1,446 $— $— 
Certificates of deposit with maturities of three months or less (2)
18,781 — 18,781 — 
Rabbi trust funds - current (3)
23 23 — — 
Rabbi trust funds - non-current (3)
12,543 12,543 — — 
December 31, 2024
Assets:
Money market funds (1)
$1,040 $1,040 $— $— 
Rabbi trust funds - non-current (3)
11,465 11,465 — — 
(1) Money market funds are categorized as cash equivalents.
(2) Certificates of deposit with original maturities of three months or less are categorized as cash equivalents. Due to the short-term nature of the instruments, the Company has determined the cost approximates fair value.
(3) Rabbi trust funds - current and Rabbi trust funds - non-current are included in "Other current assets" and "Other non-current assets" on the consolidated balance sheets, respectively.
The Company’s financial instruments also include accounts receivable, accounts payable, and accrued liabilities, which are carried at cost and approximate fair value due to the short-term maturity of these instruments. The carrying value of debt approximates fair value based upon prices of identical or similar instruments in the marketplace, which are considered Level 2 inputs.


NOTE 17 – RELATED PARTY TRANSACTIONS
The Company provides services under a contractual agreement to St. Gabriel CC Company, LLC. These services include accounting, information technology, quality control, and purchasing services, as well as operation of the St. Gabriel CC Company, LLC plant. The Company also sells raw materials to St. Gabriel CC Company, LLC. These raw materials are used in the production of finished goods that are, in turn, sold by Saint Gabriel CC Company, LLC to the Company for resale to unrelated parties. As such, the sale of these raw materials to St. Gabriel CC Company, LLC in this scenario lacks economic substance and therefore the Company does not include them in net sales within the condensed consolidated statements of earnings.
Payments for the services the Company provided amounted to $1,108 and $3,447 for the three and nine months ended September 30, 2025, respectively, and $1,109 and $3,321 for the three and nine months ended September 30, 2024, respectively. The raw materials purchased and subsequently sold amounted to $9,399 and $30,145 for the three and nine months ended September 30, 2025, respectively, and $7,616 and $21,249 for the three and nine months ended September 30, 2024, respectively. These services and raw materials are primarily recorded in cost of goods sold, net of the finished goods received from St. Gabriel CC Company, LLC of $7,620 and $24,521 during the three and nine months ended September 30, 2025, respectively, and $5,766 and $16,450 for the three and nine months ended September 30, 2024, respectively. At September 30, 2025 and December 31, 2024, the Company had receivables of $3,053 and $3,893, respectively, recorded in accounts receivable from St. Gabriel CC Company, LLC for services rendered and raw materials sold. At September 30, 2025 and December 31, 2024, the Company had payables of $2,188 and $2,831, respectively, recorded in accounts payable for finished goods received from St. Gabriel CC Company, LLC. The Company had payables in the amount of $296 related to non-contractual monies owed to St. Gabriel CC Company, LLC, recorded in accounts payable as of both September 30, 2025 and December 31, 2024. In addition, the Company had receivables in the amount of $12 related to non-contractual monies owed from St. Gabriel CC Company, LLC, recorded in other current assets as of September 30, 2025.
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NOTE 18 – LEASES

The Company has both real estate leases and equipment leases. The main types of equipment leases include forklifts, trailers, printers and copiers, railcars, and trucks. Leases are categorized as both operating leases and finance leases. The Company elected the practical expedient to combine lease and non-lease components and recognizes the combined amount on the condensed consolidated balance sheet. Management determined that since the Company has a centralized treasury function, the parent company would either fund or guarantee a subsidiary's loan for borrowing over a similar term. As such, the Company's management determined it is appropriate to utilize a corporate based borrowing rate for all locations. The Company developed four tranches of leases based on lease terms and these tranches reflect the composition of the current lease portfolio. The Company's borrowing history shows that interest rates of a term loan or a line of credit depend on the duration of the loan rather than the nature of the assets purchased by those funds. Based on this understanding, the Company elected to use a portfolio approach to discount rates, applying corporate rates to the tranches of leases based on lease terms. Based on the Company's risk rating, the Company applied the following discount rates for new leases entered into during the third quarter of 2025: (1) 1-2 years, 5.61% (2) 3-4 years, 6.20% (3) 5-9 years, 6.54% and (4) 10+ years, 7.26%.
Right of use assets and lease liabilities at September 30, 2025 and December 31, 2024 are summarized as follows:

Right of use assetsSeptember 30, 2025December 31, 2024
Operating leases$15,916 $15,320 
Finance leases1,573 1,730 
Total$17,489 $17,050 

Lease liabilities - currentSeptember 30, 2025December 31, 2024
Operating leases$3,943 $3,134 
Finance leases202 194 
Total$4,145 $3,328 

Lease liabilities - non-currentSeptember 30, 2025December 31, 2024
Operating leases$12,257 $12,967 
Finance leases1,596 1,749 
Total$13,853 $14,716 

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For the three and nine months ended September 30, 2025 and 2024, the Company's total lease costs were as follows, which included amounts recognized in earnings, amounts capitalized on the balance sheets, and the cash flows arising from lease transactions:
Three Months Ended
September 30,		Nine Months Ended
September 30,
2025202420252024
Lease Cost
Operating lease cost$1,407 $1,365 $4,100 $4,057 
Finance lease cost
Amortization of ROU asset53 59 157 179 
Interest on lease liabilities23 25 71 79 
Total finance lease76 84 228 258 
Total lease cost$1,483 $1,449 $4,328 $4,315 
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases$1,400 $1,362 $4,142 $4,056 
Operating cash flows from finance leases23 25 71 79 
Financing cash flows from finance leases48 58 145 169 
$1,471 $1,445 $4,358 $4,304 
Right-of-use assets obtained in exchange for new operating lease liabilities, net of right-of-use assets disposed$1,397 $61 $3,254 $1,225 
Weighted-average remaining lease term - operating leases5.71 years9.18 years5.71 years9.18 years
Weighted-average remaining lease term - finance leases7.61 years8.62 years7.61 years8.62 years
Weighted-average discount rate - operating leases6.6 %7.6 %6.6 %7.6 %
Weighted-average discount rate - finance leases5.1 %5.1 %5.1 %5.1 %
Rent expense charged to operations under operating lease agreements for the three and nine months ended September 30, 2025 aggregated to approximately $1,407 and $4,100, respectively, and $1,365 and $4,057 for the three and nine months ended September 30, 2024, respectively.
Aggregate future minimum rental payments required under all non-cancelable operating and finance leases at September 30, 2025 are as follows:

Year 
October 1, 2025 to December 31, 2025$1,444 
20265,211 
20273,767 
20283,001 
20292,533 
20302,078 
Thereafter4,737 
Total minimum lease payments$22,771 
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Item 2.    Management's Discussion and Analysis of Financial Condition and Results of Operations
(All amounts in thousands, except share and per share data)

Forward-Looking Statements
This report 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. Actions and performance could differ materially from what is contemplated by the forward-looking statements contained in this report. Factors that might cause differences from the forward-looking statements include those referred to or identified in Item 1A of the Annual Report on Form 10-K for the year ended December 31, 2024 and other factors that may be identified elsewhere in this report. 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.
Factors that may affect our forward-looking statements include, among other things: (1) our ability to manage risks associated with our sales to customers and manufacturing operations outside the United States, including changes in tariffs, sanctions, trade restrictions and trade relations, political and economic instability and geopolitical tensions; (2) supply chain disruptions due to political unrest, terrorist acts, and national and international conflicts; (3) reliability and sufficiency of our manufacturing facilities; (4) our ability to recruit and retain a highly qualified and motivated workforce; (5) our ability to effectively manage labor relations; (6) the effects of global climate change or other unexpected events, including global health crises, that may disrupt our operations; (7) our ability to manage risks related to our information technology and operational technology systems and cybersecurity; (8) our reliance on third-party vendors for many of the critical elements of our global information and operational technology infrastructure and their failure to provide effective support for such infrastructure; (9) disruption and breaches of our information systems; (10) increased competition and our ability to anticipate evolving trends in the market; (11) global economic conditions, including inflation, recession, changes in tariffs and trade relations; (12) raw material shortages or price increases; (13) currency translation and currency transaction risks; (14) interest rate risks; (15) our ability to successfully consummate and manage acquisitions, joint ventures and divestitures; (16) our ability to effectively manage and implement restructuring initiatives or other organizational changes; (17) changes in our relationships with our vendors, changes in tax or trade policy, interruptions in our operations or supply chain, political or financial instability and geopolitical tensions; (18) adverse publicity or consumer concern regarding the safety or quality of food products containing our products; (19) the outcome of any litigation, governmental investigations or proceedings; (20) product liability claims and recalls; (21) our ability to protect our brand reputation and trademarks; (22) claims of infringement of intellectual property rights by third parties; (23) risks related to corporate social responsibility and reputational matters; (24) improper conduct by any of our employees, agents or business partners; (25) changes to, or changes in interpretations of, current laws and regulations, and loss of governmental permits and approvals; and (26) regulatory requirements for ethylene oxide users that have impacted, and may continue to impact, such users’ ability to use the ethylene oxide process to sterilize medical devices, among other things.


Overview
We develop, manufacture, distribute and market specialty performance ingredients and products for the nutritional, food, pharmaceutical, animal health, performance gases, plant nutrition and industrial markets. Our three reportable segments are strategic businesses that offer products and services to different markets: Human Nutrition & Health, Animal Nutrition & Health, and Specialty Products. Sales and production of products outside of our reportable segments and other minor business activities are included in "Other and Unallocated".
Balchem is committed to solving today's challenges to shape a healthier tomorrow by operating responsibly and providing innovative solutions for the health and nutritional needs of the world. Sustainability is at the heart of our company's vision to make the world a healthier place and plays an important role in our strategies and in long-term value creation for our stakeholders. Our framework focuses on the sustainability topics most relevant to our business and stakeholders, and has been fully integrated into our governance structure and everyday operations . We are very proud of our significant progress relating to the Company's corporate social responsibilities and will continue to foster these fundamental principles broadly along our entire value chain, develop new ideas and technologies that help us work smarter, and help build a world that is a better place to live.
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As of September 30, 2025, we employed approximately 1,355 full time employees worldwide. We continue to see improvement in the labor markets and we feel that our team has been successful in attracting and retaining skilled and experienced employees in a competitive landscape. Additionally, we continue to enhance and leverage our existing technology capabilities to further optimize productivity and performance, and explore new solutions to drive efficiencies.
Recent Developments
Anti-Dumping Investigation in the European Union
In late June 2025, the European Commission announced that it would impose provisional duties between 95.4% and 120.8% on imports into the European Union of choline chloride originating in the People’s Republic of China, effective July 1, 2025. Further, in late September 2025, the European Commission disclosed their final findings and proposed that the definitive duties should be set between 90.0% and 115.9%. The investigation was initiated by the European Commission in late October 2024 (following a complaint lodged by Balchem Italia Srl and another complainant) and final measures are expected to be imposed by the end of 2025.
Segment Results
We sell products for all three segments through our own sales force, independent distributors, and sales agents.

The following tables summarize consolidated net sales by segment and business segment earnings from operations for the three and nine months ended September 30, 2025 and 2024:

Business Segment Net Sales
Three Months Ended
September 30,		Nine Months Ended
September 30,
(in thousands)2025202420252024
Human Nutrition & Health$174,088 $152,283 $493,318 $452,955 
Animal Nutrition & Health56,376 52,906 169,681 156,384 
Specialty Products35,683 33,191 106,143 99,898 
Other and Unallocated (1)
1,411 1,560 4,402 4,443 
Total$267,558 $239,940 $773,544 $713,680 

Business Segment Earnings From Operations
Three Months Ended
September 30,		Nine Months Ended
September 30,
(in thousands)2025202420252024
Human Nutrition & Health$40,831 $35,578 $117,147 $102,202 
Animal Nutrition & Health3,713 3,529 12,463 8,282 
Specialty Products11,534 10,516 32,388 29,943 
Other and Unallocated (1)
(1,499)(1,631)(4,962)(4,962)
Total$54,579 $47,992 $157,036 $135,465 
(1) 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 transaction and integration costs of $333 and $1,227 for the three and nine months ended September 30, 2025, respectively, and $223 and $795 for the three and nine months ended September 30, 2024, respectively.


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Results of Operations - Three Months Ended September 30, 2025 and 2024

Net Earnings
Three Months Ended September 30,Increase
(Decrease)
(in thousands)20252024% Change
Net sales$267,558 $239,940 $27,618 11.5 %
Gross margin95,453 85,361 10,092 11.8 %
Operating expenses40,874 37,369 3,505 9.4 %
Earnings from operations54,579 47,992 6,587 13.7 %
Interest and other expenses2,535 4,099 (1,564)(38.2)%
Income tax expense11,755 10,056 1,699 16.9 %
Net earnings$40,289 $33,837 $6,452 19.1 %

Net Sales
Three Months Ended September 30,Increase
(Decrease)
(in thousands)20252024% Change
Human Nutrition & Health$174,088 $152,283 $21,805 14.3 %
Animal Nutrition & Health56,376 52,906 3,470 6.6 %
Specialty Products35,683 33,191 2,492 7.5 %
Other1,411 1,560 (149)(9.6)%
Total$267,558 $239,940 $27,618 11.5 %

•The increase in net sales within the Human Nutrition & Health segment for the third quarter of 2025 as compared to the third quarter of 2024 was driven by higher sales within both the nutrients business and the food ingredients and solutions businesses. Total sales for this segment grew 14.3%, with volume and mix contributing 7.4%, average selling prices contributing 6.2%, and the change in foreign currency exchange rates contributing 0.7%.

•The increase in net sales within the Animal Nutrition & Health segment for the third quarter of 2025 compared to the third quarter of 2024 was driven by higher sales in both the ruminant and monogastric species markets. Total sales for this segment increased by 6.6%, with average selling prices contributing 7.1%, the change in foreign currency exchange rates contributing 1.4%, and volume and mix contributing -2.0%.

•The increase in net sales within the Specialty Products segment for the third quarter of 2025 compared to the third quarter of 2024 was due to higher sales in both the performance gases and plant nutrition businesses. Total sales for this segment increased by 7.5%, with average selling prices contributing 4.4%, the change in foreign currency exchange rates contributing 1.8%, and volume and mix contributing 1.2%.

•Sales may fluctuate in future periods based on macroeconomic conditions, competitive dynamics, changes in customer preferences, and our ability to successfully introduce new products to the market.

Gross Margin
Three Months Ended September 30,Increase
(Decrease)
(in thousands)20252024% Change
Gross margin$95,453 $85,361 $10,092 11.8 %
% of net sales35.7 %35.6 %
Gross margin dollars increased in the third quarter of 2025 compared to the third quarter of 2024 due to higher sales and a favorable mix, partially offset by certain higher manufacturing input costs.
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Operating Expenses
Three Months Ended September 30,Increase
(Decrease)
(in thousands)20252024% Change
Operating expenses$40,874 $37,369 $3,505 9.4 %
% of net sales15.3 %15.6 %
The increase in operating expenses in the third quarter of 2025 compared to the third quarter of 2024 was primarily due to higher professional services of $1,517 and higher compensation-related costs of $1,452.
Earnings from Operations
Three Months Ended September 30,Increase
(Decrease)
(in thousands)20252024% Change
Human Nutrition & Health$40,831 $35,578 $5,253 14.8 %
Animal Nutrition & Health3,713 3,529 184 5.2 %
Specialty Products11,534 10,516 1,018 9.7 %
Other and unallocated(1,499)(1,631)132 8.1 %
Earnings from operations$54,579 $47,992 $6,587 13.7 %
% of net sales (operating margin)20.4 %20.0 %

•Human Nutrition & Health segment earnings from operations increased $5,253 primarily due to a gross margin contribution of $7,671. The increase in gross margin was primarily due to the aforementioned higher sales and a favorable mix, partially offset by certain higher manufacturing input costs. The increase in gross margin was partially offset by an increase in operating expenses of $2,418, primarily due to higher professional services of $736, higher compensation-related costs of $711, and higher amortization of $490.

•Animal Nutrition & Health segment earnings from operations increased $184. Gross margin contribution was $1,094, which was driven by the aforementioned higher sales and a favorable mix, partially offset by certain higher manufacturing input costs. The increase in gross margin was partially offset by an increase in operating expenses of $910, primarily due to higher compensation-related costs of $818.

•Specialty Products segment earnings from operations increased $1,018 primarily due to a gross margin contribution of $1,095. The increase in gross margin was mainly due to the aforementioned higher sales.

Other Expenses (Income)
Three Months Ended September 30,Increase
(Decrease)
(in thousands)20252024% Change
Interest expense, net$2,629 $4,071 $(1,442)(35.4)%
Other (income) expense, net(94)28 (122)(435.7)%
$2,535 $4,099 $(1,564)(38.2)%

Interest expense for the three months ended September 30, 2025 and 2024 was primarily related to outstanding borrowings under the 2022 Credit Agreement. The decrease in net interest expense is primarily due to lower outstanding borrowings.
Income Tax Expense
Three Months Ended September 30,Increase
(Decrease)
(in thousands)20252024% Change
Income tax expense$11,755 $10,056 $1,699 16.9 %
Effective tax rate22.6 %22.9 %
The lower effective tax rate was primarily due to certain lower state taxes.
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Results of Operations - Nine Months Ended September 30, 2025 and 2024

Net Earnings
Nine Months Ended September 30,Increase
(Decrease)
(in thousands)20252024% Change
Net sales$773,544 $713,680 $59,864 8.4 %
Gross margin276,734 249,869 26,865 10.8 %
Operating expenses119,698 114,404 5,294 4.6 %
Earnings from operations157,036 135,465 21,571 15.9 %
Interest and other expenses8,041 13,496 (5,455)(40.4)%
Income tax expense33,375 27,077 6,298 23.3 %
Net earnings$115,620 $94,892 $20,728 21.8 %

Net Sales
Nine Months Ended September 30,Increase
(Decrease)
(in thousands)20252024% Change
Human Nutrition & Health$493,318 $452,955 $40,363 8.9 %
Animal Nutrition & Health169,681 156,384 13,297 8.5 %
Specialty Products106,143 99,898 6,245 6.3 %
Other4,402 4,443 (41)(0.9)%
Total$773,544 $713,680 $59,864 8.4 %

•The increase in net sales within the Human Nutrition & Health segment for the nine months ended September 30, 2025 as compared to 2024 was driven by higher sales within both the nutrients business and the food ingredients and solutions businesses. Total sales for this segment grew 8.9%, with volume and mix contributing 5.4%, average selling prices contributing 3.2%, and the change in foreign currency exchange rates contributing 0.3%.

•The increase in net sales within the Animal Nutrition & Health segment for the nine months ended September 30, 2025 as compared to 2024 was driven by higher sales in both the ruminant and monogastric species markets. Total sales for this segment increased by 8.5%, with average selling prices contributing 4.5%, volume and mix contributing 3.3%, and the change in foreign currency exchange rates contributing 0.7%.

•The increase in net sales within the Specialty Products segment for the nine months ended September 30, 2025 as compared to 2024 was due to higher sales in both the performance gases and plant nutrition businesses. Total sales for this segment increased by 6.3%, with average selling prices contributing 3.5%, volume and mix contributing 1.8%, and the change in foreign currency exchange rates contributing 0.9%.

•Sales may fluctuate in future periods based on macroeconomic conditions, competitive dynamics, changes in customer preferences, and our ability to successfully introduce new products to the market.

Gross Margin
Nine Months Ended September 30,Increase
(Decrease)
(in thousands)20252024% Change
Gross margin$276,734 $249,869 $26,865 10.8 %
% of net sales35.8 %35.0 %
Gross margin dollars increased in the nine months ended September 30, 2025 as compared to 2024 due to higher sales and a favorable mix, partially offset by certain higher manufacturing input costs.
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Operating Expenses
Nine Months Ended September 30,Increase
(Decrease)
(in thousands)20252024% Change
Operating expenses$119,698 $114,404 $5,294 4.6 %
% of net sales15.5 %16.0 %
The increase in operating expenses in the nine months ended September 30, 2025 as compared to 2024 was primarily due to an increase in compensation-related costs of $5,040 and higher professional services of $3,963, partially offset by lower amortization expense of $2,813.

Earnings from Operations
Nine Months Ended September 30,Increase
(Decrease)
(in thousands)20252024% Change
Human Nutrition & Health$117,147 $102,202 $14,945 14.6 %
Animal Nutrition & Health12,463 8,282 4,181 50.5 %
Specialty Products32,388 29,943 2,445 8.2 %
Other and unallocated(4,962)(4,962)— — %
Earnings from operations$157,036 $135,465 $21,571 15.9 %
% of net sales (operating margin)20.3 %19.0 %

•Human Nutrition & Health segment earnings from operations increased $14,945 primarily due to a gross margin contribution of $17,976. The increase in gross margin was primarily due to the aforementioned higher sales and a favorable mix, partially offset by certain higher manufacturing input costs. The increase in gross margin was partially offset by an increase in operating expenses of $3,031, primarily due to higher compensation-related costs of $4,154 and higher professional services of $2,554, partially offset by lower amortization of $2,733.

•Animal Nutrition & Health segment earnings from operations increased $4,181 primarily due to a gross margin contribution of $5,527, which was driven by the aforementioned higher sales and a favorable mix, partially offset by certain higher manufacturing input costs. The increase in gross margin was partially offset by an increase in operating expenses of $1,346, primarily due to higher compensation-related costs of $973 and higher professional services of $581.

•Specialty Products segment earnings from operations increased $2,445 primarily due to a gross margin contribution of $2,882, which was driven by the aforementioned higher sales. This was partially offset by an increase in operating expenses of $437, mainly due to higher professional services.

Other Expenses (Income)
Nine Months Ended September 30,Increase
(Decrease)
(in thousands)20252024% Change
Interest expense, net$8,319 $13,709 $(5,390)(39.3)%
Other (income) expense, net(278)(213)(65)(30.5)%
$8,041 $13,496 $(5,455)(40.4)%

Interest expense for the nine months ended September 30, 2025 and 2024 was primarily related to outstanding borrowings under the 2022 Credit Agreement. The decrease in net interest expense is due to lower outstanding borrowings.
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Income Tax Expense
Nine Months Ended September 30,Increase
(Decrease)
(in thousands)20252024% Change
Income tax expense$33,375 $27,077 $6,298 23.3 %
Effective tax rate22.4 %22.2 %
The higher effective tax rate was primarily due to lower tax benefits from stock-based compensation partially offset by certain lower state taxes.


Liquidity and Capital Resources
During the nine months ended September 30, 2025, there were no material changes outside the ordinary course of business in the specified contractual obligations set forth in our Annual Report on Form 10-K for the year ended December 31, 2024. We expect our operations to continue generating sufficient cash flow to fund working capital requirements and necessary capital investments. We are actively pursuing additional acquisition candidates. We could seek additional bank loans or access to financial markets to fund such acquisitions, our operations, working capital, necessary capital investments or other cash requirements should we deem it necessary to do so.
Cash
Cash and cash equivalents increased to $65,093 at September 30, 2025 from $49,515 at December 31, 2024. At September 30, 2025, the Company had $58,176 of cash and cash equivalents held by foreign subsidiaries. We presently intend to permanently reinvest these funds in foreign operations by continuing to make additional plant related investments, and potentially invest in partnerships or acquisitions; therefore, we do not currently expect to repatriate these funds in order to fund U.S. operations or obligations. However, if these funds are needed for U.S. operations, we could be required to pay additional withholding taxes to repatriate these funds. Working capital was $217,346 at September 30, 2025 as compared to $156,085 at December 31, 2024, an increase of $61,261. Significant cash payments during the nine months ended September 30, 2025 included repurchases of common stock of $54,008, net repayments on the revolving loan of $36,000, income taxes paid of $29,625, the payment of the 2024 declared dividend in 2025 of $28,276, and capital expenditures and intangible assets acquired of $27,275.

Nine Months Ended September 30,Increase
(Decrease)
(in thousands)20252024% Change
Cash flows provided by operating activities$149,281 $129,682 $19,599 15.1 %
Cash flows used in investing activities(27,475)(22,777)(4,698)(20.6)%
Cash flows used in financing activities(111,562)(98,602)(12,960)(13.1)%

Operating Activities
The increase in cash flows from operating activities was primarily driven by increases in net earnings and stock compensation and the impact from changes in working capital, partially offset by lower depreciation and amortization.
Investing Activities
We continue to invest in corporate projects, improvements across all production facilities, and intangible assets. Total investments in property, plant and equipment and intangible assets were $27,275 and $22,936 for the nine months ended September 30, 2025 and 2024, respectively.
Financing Activities
During 2025, we borrowed $70,000 to fund the 2024 dividend, bonus payments and share repurchases. We made total loan payments of $106,000, resulting in $396,000 available under the 2022 Credit Agreement (see Note 7, Revolving Loan) as of September 30, 2025.
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We have an approved stock repurchase program. The total authorization under this program is 3,763,038 shares. Since the inception of the program in June 1999, a total of 3,475,622 shares have been repurchased. We intend to acquire shares from time to time at prevailing market prices if and to the extent we deem it is advisable to do so based on our assessment of corporate cash flow, market conditions and other factors. Open market repurchases of common stock could be made pursuant to a trading plan established pursuant to Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, which would permit common stock to be repurchased at a time that we might otherwise be precluded from doing so under insider trading laws or self-imposed trading restrictions. We also purchase (withhold) shares from employees in connection with the tax settlement of vested shares and/or exercised stock options, as applicable, under the Company's omnibus incentive plan. Share repurchases are funded with existing cash on hand or borrowings against the 2022 Credit Agreement. Repurchases of common stock were $54,008 and $5,376 for the nine months ended September 30, 2025 and 2024, respectively.
Proceeds from stock options exercised were $6,867 and $15,084 for the nine months ended September 30, 2025 and 2024, respectively. Dividend payments were $28,276 and $25,572 for the nine months ended September 30, 2025 and 2024, respectively.


Other Matters Impacting Liquidity
As of September 30, 2025 and December 31, 2024, we have a liability of $7,349 and $6,720, respectively, for uncertain tax positions, including the related interest and penalties, recorded in accordance with ASC 740-10, for which we are unable to reasonably estimate the timing of settlement, if any.
We currently provide postretirement benefits in the form of two retirement medical plans, as discussed in Note 14, Employee Benefit Plans. The liabilities recorded in "Other long-term obligations" on the condensed consolidated balance sheets as of September 30, 2025 and December 31, 2024 were $1,531 and $1,522, respectively, and the plans are not funded. Historical cash payments made under these plans have typically been less than $200 per year. We do not anticipate any changes to the payments made in the current year for the plans.
Chemogas has an unfunded defined benefit plan. The plan provides for the payment of a lump sum at retirement or payments in case of death of the covered employees. The amounts recorded for this obligation on our balance sheets as of September 30, 2025 and December 31, 2024 was $800 and $613, respectively, and was included in "Other long-term obligations" on the condensed consolidated balance sheets.
We provide an unfunded, nonqualified deferred compensation plan maintained for the benefit of a select group of management or highly compensated employees. Assets of the plan are held in a rabbi trust and are subject to additional risk of loss in the event of bankruptcy or insolvency of the Company. The deferred compensation liability was $12,574 as of September 30, 2025, of which $12,551 was included in "Other long-term obligations" and $23 was included in "Accrued compensation and other benefits" on our consolidated balance sheets. The deferred compensation liability was $11,470 as of December 31, 2024, of which $11,449 was included in "Other long-term obligations" and $21 was included in "Accrued compensation and other benefits" on our consolidated balance sheets. The related rabbi trust assets were $12,566 as of September 30, 2025, of which $12,543 was included in "Other non-current assets" and $23 was included in "Other current assets" on the condensed consolidated balance sheets. The rabbi trust assets were $11,465 as of December 31, 2024 and were included in "Other non-current assets" on the condensed consolidated balance sheets.

Significant Accounting Policies

There were no changes to our Significant Accounting Policies, as described in our December 31, 2024 Annual Report on Form 10-K, during the nine months ended September 30, 2025.

Related Party Transactions
We were engaged in related party transactions with St. Gabriel CC Company, LLC during the three and nine months ended September 30, 2025. Refer to Note 17, Related Party Transactions.

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Item 3.    Quantitative and Qualitative Disclosures About Market Risk
Our cash and cash equivalents are held primarily in checking accounts, certificates of deposit, and money market investment funds. Additionally, as of September 30, 2025, our borrowings were under a revolving loan bearing interest at a fluctuating rate as defined by the 2022 Credit Agreement plus an applicable rate (See Note 7, Revolving Loan). The applicable rate is based upon our consolidated net leverage ratio, as defined in the 2022 Credit Agreement. A 100 basis point increase or decrease in interest rates, applied to our borrowings at September 30, 2025, would result in an increase or decrease in annual interest expense and a corresponding reduction or increase in cash flow of approximately $1,540. We are exposed to commodity price risks, including prices of our primary raw materials. Our objective is to seek a reduction in the potential negative earnings impact of raw material pricing arising in our business activities. We manage these financial exposures, where possible, through pricing and operational means. Our practices may change as economic conditions change.

Interest Rate Risk

We have exposure to market risk for changes in interest rates, including the interest rate relating to the 2022 Credit Agreement.
Foreign Currency Exchange Risk

The financial condition and results of operations of our foreign subsidiaries are reported in local currencies and then translated into U.S. dollars at the applicable currency exchange rate for inclusion in our consolidated financial statements. Therefore, we are exposed to foreign currency exchange risk related to these currencies.


Item 4.    Controls and Procedures
(a) Evaluation of Disclosure Controls and Procedures
Prior to filing this report, we completed an evaluation under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as defined in Rule 13a-15(e) of the Exchange Act as of September 30, 2025. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of September 30, 2025.
(b) Changes in Internal Controls
There have been no changes in the internal controls over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Act) during the fiscal quarter ended September 30, 2025, that have materially affected, or are reasonably likely to materially affect, internal control over financial reporting.


Part II.    Other Information


Item 1.    Legal Proceedings
In the normal course of business, we are involved in a variety of lawsuits, claims and legal proceedings, from time to time, including commercial and contract disputes, labor and employment matters, product liability claims, environmental liabilities, trade regulation matters, intellectual property disputes and tax-related matters. Further, in connection with normal operations at our plant facilities, our manufacturing sites may, from time to time, be subject to inspections or inquiries by the EPA and other agencies. To the extent any consent orders or other agreements are entered into as a result of findings from such inspections or inquiries, the Company is committed to ensuring compliance with such orders or agreements.
Information with respect to certain legal proceedings is included in Note 15, Commitments and Contingencies, to our consolidated financial statements for the quarter ended September 30, 2025 contained in this Quarterly Report on Form 10-Q, and is incorporated herein by reference.
In our opinion, we do not expect pending legal matters to have a material adverse effect on our consolidated financial position, results of operations, liquidity or cash flows.


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Item 1A.    Risk Factors
There have been no material changes in the Risk Factors identified in the Company's Annual report on Form 10-K for the year ended December 31, 2024. For a further discussion of our Risk Factors, refer to the "Risk Factors" discussion contained in our Annual Report on Form 10-K for the year ended December 31, 2024.


Item 2.     Unregistered Sales of Equity Securities and Use of Proceeds
The following table summarizes the share repurchase activity for the nine months ended September 30, 2025:
 
Total Number of Shares
Purchased (1)
Average Price Paid Per Share
Total Number of Shares
Purchased as
Part of Publicly Announced Plans or
Programs (2)
Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be
Purchased Under the
Plans or Programs (2)(3)
January 1-31, 2025— $— — $103,418,864 
February 1-28, 202532,369 $161.90 32,369 $95,302,085 
March 1-31, 2025500 $167.48 500 $98,501,855 
First Quarter32,869  32,869 
April 1-30, 202549,616 $156.24 49,616 $84,139,744 
May 1-31, 2025155,055 $164.24 155,055 $62,982,137 
June 1-30, 2025294 $158.35 294 $60,675,920 
Second Quarter204,965 204,965 
July 1-31, 20251,030 $156.17 1,030 $59,681,644 
August 1-31, 202565,416 $161.32 65,416 $51,095,995 
September 1-30, 202529,314 $160.49 29,314 $46,127,486 
Third Quarter95,760 95,760 
Total333,594 333,594 
(1) The Company repurchased shares from open market purchases and/or withheld shares from employees in connection with the tax settlement of vested shares under the Company's omnibus incentive plan.
(2) Our Board of Directors has approved a stock repurchase program. The total authorization under this program is 3,763,038 shares. Since the inception of the program in June 1999, a total of 3,475,622 shares have been purchased. Other than shares withheld for tax purposes, as described in footnote 1 above, the Company also repurchased shares under the Company's stock repurchase program during the three and nine months ended September 30, 2025. There is no expiration for this program.
(3) Dollar amounts in this column equal the number of shares remaining available for repurchase under the stock repurchase program as of the last date of the applicable month multiplied by the monthly average price paid per share.

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Item 5.     Other Information

No directors or officers adopted, modified or terminated a Rule 10b5-1 trading arrangement during the fiscal quarter ended September 30, 2025.
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Item 6.    Exhibits

Exhibit NumberDescription
101.INSXBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCHInline XBRL Taxonomy Extension Schema Document
101.CALInline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEFInline XBRL Taxonomy Extension Definition Linkbase Document
101.LABInline XBRL Taxonomy Extension Label Linkbase Document
101.PREInline XBRL Taxonomy Extension Presentation Linkbase Document
104Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
* Compensatory plan or arrangement.

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SIGNATURES
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 thereunto duly authorized.
BALCHEM CORPORATION
By: /s/ Theodore L. Harris
Theodore L. Harris, Chairman, President, and
Chief Executive Officer
By: /s/ Martin Bengtsson
Martin Bengtsson, Executive Vice President and
Chief Financial Officer
Date: October 21, 2025

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