-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, A4GW8MNvulzfskxnoGiyUb42vMDxM2e8/PFACotstTnQKO3guk5/AlGn+wGeQSAP eFZMomS82Y2HQJ/IInmcBQ== 0000914317-04-003831.txt : 20041026 0000914317-04-003831.hdr.sgml : 20041026 20041026160742 ACCESSION NUMBER: 0000914317-04-003831 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20041026 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20041026 DATE AS OF CHANGE: 20041026 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BALCHEM CORP CENTRAL INDEX KEY: 0000009326 STANDARD INDUSTRIAL CLASSIFICATION: CHEMICALS & ALLIED PRODUCTS [2800] IRS NUMBER: 132578432 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-13648 FILM NUMBER: 041096811 BUSINESS ADDRESS: STREET 1: P O BOX 600 CITY: NEW HAMPTON STATE: NY ZIP: 10958 BUSINESS PHONE: 8453265632 MAIL ADDRESS: STREET 1: P O BOX 600 CITY: NEW HAMPTON STATE: NY ZIP: 10958 8-K 1 form8k-63650_balchem.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K Current Report Pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934 Date of report (date of earliest event reported): October 26, 2004 Balchem Corporation (Exact name of registrant as specified in its charter) Maryland 1-13648 13-257-8432 (State or other jurisdiction of (Commission File Number) (IRS Employer incorporation) Identification No.) P.O. Box 600, New Hampton, NY 10958 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (845) 326-5600 Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: [_] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [_] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [_] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [_] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Item 2.02 Results of Operations and Financial Condition On October 26, 2004, Balchem Corporation, reported earnings for its third quarter ended September 30, 2004. The full text of the press release issued in connection with the announcement is attached as Exhibit 99.1. The information in this Form 8-K (including Exhibit 99.1) shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934 (the "Exchange Act") or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as expressly set forth by specific reference in such a filing. Item 9.01 Financial Statements and Exhibits (c) Exhibits. 99.1 Press Release of Balchem Corporation dated October 26, 2004, reporting its financial results for the third quarter of 2004. SIGNATURE Under the requirements of the Securities Exchange Act of 1934, the registrant has caused this report to be signed on its behalf by the authorized undersigned. BALCHEM CORPORATION By:/s/ Dino A. Rossi ------------------------- Dino A. Rossi, President, Chief Executive Officer Dated: October 26, 2004 EXHIBIT INDEX Exhibit No. Description 99.1 Press Release of Balchem Corporation dated October 26, 2004, reporting its financial results for the third quarter of 2004. EX-99.1 2 exhibit99-1.txt October 26, 2004 BALCHEM CORPORATION (AMEX: BCP) ------------------------------- Reported as follows (unaudited) for the Quarter ended September 30, 2004 ($000 Omitted Except for Net Earnings Per Share) For the Three Months Ended September 30, ---------------------------------------- 2004 2003 ---- ---- Net sales $17,356 $15,791 Gross profit 6,219 4,657 Operating expenses 2,789 3,260 ------- ------- Earnings from operations 3,430 1,397 Other expense 39 62 ------- ------- Earnings before income tax expense 3,391 1,335 Income tax expense 1,231 468 ------- ------- Net earnings $ 2,160 $ 867 ======= ======= Basic net earnings per common share $ 0.43 $ 0.18 Diluted net earnings per common share $ 0.42 $ 0.17 For the Nine Months Ended September 30, --------------------------------------- 2004 2003 ---- ---- Net sales $49,449 $45,467 Gross profit 17,855 15,796 Operating expenses 8,308 8,879 ------- ------- Earnings from operations 9,547 6,917 Other expense 88 206 ------- ------- Earnings before income tax expense 9,459 6,711 Income tax expense 3,482 2,470 ------- ------- Net earnings $ 5,977 $ 4,241 ======= ======= Basic net earnings per common share $ 1.20 $ 0.88 Diluted net earnings per common share $ 1.17 $ 0.85 Balchem Corporation (AMEX:BCP) Page 2 Record net sales were achieved for the quarter ended September 30, 2004 of $17.4 million. This is an increase of 9.9%, as compared to $15.8 million for the comparable prior year period and marks the first time the company has surpassed sales of $17 million in a quarter. Net earnings for the third quarter were $2.2 million, an increase of $1.3 million, or 149% as compared with the same period last year. This is largely due to the fact that we continued to operate the Encapsulated/Nutritional Product segment profitably, reflecting our designed turn-around, versus the loss incurred in the prior year comparable quarter. This resulted in a diluted net earnings increase of 141.3% to $0.42 per share for the third quarter of 2004 versus $0.17 per share for the comparable quarter of the prior year. In this third quarter of 2004, all three segments of the company reported improved sales and earnings versus the prior year comparable period. The ARC Specialty Products segment generated earnings from operations of approximately $2.7 million on record quarterly sales of $7.2 million. Net sales were 7.3% higher than the prior year comparable quarter and earnings from operations were 17.6% higher, driven by increased sales volume of packaged ethylene oxide and sales of single use ethylene oxide canisters for use in medical device sterilization. The BCP Ingredients segment realized record quarterly sales of approximately $3.7 million, increasing 19.9% over the prior year comparable quarter, with continued strong sales volumes in dry and aqueous choline products for the poultry and swine industries. Earnings from operations for this sector improved to approximately $0.39 million as compared to $0.17 million in the prior year comparable quarter. Sales of the Encapsulated/Nutritional Products segment were $6.5 million in the period, an increase of 7.7% from the prior year comparable quarter, principally due to improvements in the domestic and international food markets as well as sales in the most recent quarter of Nitroshure, which is being sold into the animal health industry. Earnings from operations for the encap segment were $0.34 million in the current quarterly period as compared to a $1.07 million loss in the prior year comparable quarter. Consolidated gross profit for the quarter ended September 30, 2004 was $6.2 million, an increase of 33.5%, compared to $4.7 million for the comparable year period due to the above noted increase in sales and improvements in the Encapsulated/Nutritional Product business operating result. Operating (Selling, R&D, and Administrative) expenses were $2.8 million, approximately 16.0% of net sales, improving from 20.6% of net sales in the prior year comparable quarter. For the nine months ended September 30, 2004, net sales have increased 8.8% to $49.4 million compared to $45.5 million in the comparable prior year period. Net earnings have increased 40.9% to $6.0 million or $1.17 per diluted share, compared to net earnings of $4.2 million, or $0.85 per diluted share in the prior year comparable period. Our balance sheet ratios and cash flow continued to be strong. During the quarter ended September 30, 2004, the Company reduced long term debt, as scheduled, by $0.5 million from $7.0 million to $6.5 million. Our cash balance closed the quarter at $17.3 million, an increase of $8.1 million over the year end balance of $9.2 million and approximately $12.7 million over the previous year's September 30 level. Balchem Corporation (AMEX: BCP) Page 3 Outlook Commenting on the outlook for 2004, Dino A. Rossi, President and CEO of Balchem, said "Strength in the ARC Specialty Products and BCP Ingredients Unencapsulated Feed Supplements segments should continue. Our Encapsulated/Nutritional Products segment quarterly sales increased 2.0% sequentially, as we continue to see signs of volume improvement, albeit fluctuating, in the human food and nutrition market. We have responded to food marketplace economic pressures by re-engineering products to enable us to reduce price and, in some instances, lowered average selling prices. We are now also beginning to feel the impact of raw material increases that could squeeze our gross margins. Despite these issues, we do expect this segment to continue to improve through 2004. Animal nutrition sales have contributed nicely, as Reashure and Nitroshure sales growth is expected to continue. Based on the foregoing, we expect modest consolidated sales and earnings growth, over this third quarter result, to close out the balance of 2004. Quarterly Conference Call A quarterly conference call will be conducted on Tuesday, October 26, 2004, at 2:00 PM Eastern Time (ET) to review third quarter 2004 results (for the period ending September 30, 2004). Dino A. Rossi, President and CEO, and Frank Fitzpatrick, Chief Financial Officer, will host the call. We invite you to listen to the call by dialing 800-475-2151 five minutes prior to the scheduled start time of the conference call. The conference call will be available for digital replay through October 28, 2004. To access the replay of the conference call, dial 877-519-4471, Pin #5265697. This press release, and its accompanying financial exhibits, will also be available on the Company website, www.balchem.com, prior to the conference call. Segment Information Balchem Corporation consists primarily of three business segments: ARC Specialty Products, Encapsulated/Nutritional Products, and BCP Ingredients. Through ARC Specialty Products, Balchem provides specialty-packaged chemicals for use in healthcare and other industries. The Encapsulated/Nutritional Products segment provides proprietary microencapsulation solutions to a variety of applications in the food and human nutrition marketplaces. BCP Ingredients manufactures and supplies choline chloride and derivatives used primarily in the poultry and swine industries. Forward Looking Statements This release contains forward-looking statements, which reflect Balchem's expectation or belief concerning future events that involve risks and uncertainties. Balchem can give no assurance that the expectations reflected in forward looking statements will prove correct and various factors could cause results to differ materially from Balchem's expectations, including risks and factors identified in Balchem's annual report on Form 10-K for the year ended December 31, 2003. Forward-looking statements are qualified in their entirety by the above cautionary statement. Balchem assumes no duty to update its outlook or other forward-looking statements as of any future date. Contact: Deirdre Cocchia, Telephone: 845-326-5600 Balchem Corporation (AMEX: BCP) Page 4
Selected Financial Data ($ in 000's) Business Segment Net Sales: - ----------------------------------------------------------------------------------------- Three Months Ended Nine Months Ended September 30, September 30, 2004 2003 2004 2003 - ----------------------------------------------------------------------------------------- Specialty Products $ 7,171 $ 6,682 $21,315 $19,004 Encap/Nutritional Products 6,504 6,039 18,527 17,943 BCP Ingredients 3,681 3,070 9,607 8,520 - ----------------------------------------------------------------------------------------- Total $17,356 $15,791 $49,449 $45,467 - -----------------------------------------------------------------------------------------
Business Segment Earnings (Loss): - --------------------------------------------------------------------------------------------- Three Months Ended Nine Months Ended September 30, September 30, 2004 2003 2004 2003 - --------------------------------------------------------------------------------------------- Specialty Products $ 2,697 $ 2,294 $ 7,795 $ 6,743 Encap/Nutritional Products 345 (1,066) 901 (291) BCP Ingredients 388 169 851 465 Other expense (39) (62) (88) (206) - --------------------------------------------------------------------------------------------- Earnings bef. income taxes $ 3,391 $ 1,335 $ 9,459 $ 6,711 - ---------------------------------------------------------------------------------------------
Selected Balance Sheet Items Sept 30, Dec 31, 2004 2003 ---- ---- Cash $ 17,330 $ 9,239 Accounts Receivable 7,683 7,233 Inventories 7,120 5,961 Other Current Assets 1,014 1,197 -------- -------- Current Assets 33,147 23,630 Property, Plant, & Equipment (net) 24,444 25,636 Other Assets 7,042 7,640 -------- -------- Total Assets $ 64,633 $ 56,906 ======== ======== Current Liabilities $ 6,968 $ 6,075 Long-Term Debt 6,532 7,839 Other Long-Term Obligations 3,354 3,211 -------- -------- Total Liabilities 16,854 17,125 Stockholders' Equity 47,779 40,285 Less: Treasury Stock @ Cost -- (504) -------- -------- Net Stockholders Equity 47,779 39,781 -------- -------- Total Liability and Stockholders' Equity $ 64,633 $ 56,906 ======== ======== -----END PRIVACY-ENHANCED MESSAGE-----