-----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, O1ZumGmoemmYmJKXutzIAbnWOx/HDZp35AWP77k+DtpQ1yZbQaBZ77HcS9PXsvCF vfattBYkDLKFv1NY7dRDkg== 0000914317-09-001046.txt : 20090501 0000914317-09-001046.hdr.sgml : 20090501 20090501125656 ACCESSION NUMBER: 0000914317-09-001046 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20090501 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20090501 DATE AS OF CHANGE: 20090501 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: 09788064 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-100893_bcp.txt 8-K 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): May 1, 2009 Balchem Corporation (Exact name of registrant as specified in its charter) Maryland 1-13648 13-2578432 (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 May 1, 2009, Balchem Corporation, reported earnings for its first quarter ended March 31, 2009. 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 May 1, 2009, reporting its financial results for the first quarter of 2009. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. BALCHEM CORPORATION By:/s/ Francis J. Fitzpatrick --------------------------------- Francis J. Fitzpatrick Chief Financial Officer Dated: May 1, 2009 Exhibit Index Exhibit Number Description - -------------- ----------- 99.1 Press Release of Balchem Corporation, dated May 1, 2009 EX-99.1 2 ex99-1.txt EX-99.1 Exhibit 99.1 FOR IMMEDIATE RELEASE Balchem Corporation Announces First Quarter 2009 Results -------------------------------------------------------- New Hampton, NY, May 1, 2009 - Balchem Corporation (NASDAQ: BCPC) reported as follows (unaudited) for the period ended March 31, 2009. ($000 Omitted Except for Net Earnings per Share) For the Three Months Ended March 31, ------------------------------------ 2009 2008 ---- ---- Net sales $ 52,986 $ 56,861 Gross profit 16,298 13,483 Operating expenses 6,988 6,079 ---------- ---------- Earnings from operations 9,310 7,404 Other expense (144) (213) ---------- ---------- Earnings before income tax expense 9,166 7,191 Income tax expense 3,068 2,550 ---------- ---------- Net earnings $ 6,098 $ 4,641 ========== ========== Basic net earnings per common share $ 0.34 $ 0.26 Diluted net earnings per common share $ 0.32 $ 0.25 Shares used in the calculation of diluted net earnings per common share 19,029 18,853 Record Results for Earnings For the first quarter ended March 31, 2009, the company achieved record net earnings of $6.1 million, an increase of $1.5 million, or 31.4%. The $6.1 million generated diluted net earnings per common share of $0.32 versus $0.25 for the prior year comparable period, an increase of 28.0%. Net sales of $53.0 million was a decrease of approximately 6.8% below the $56.9 million result of the prior year comparable quarter, and off a modest 2.0% sequentially from fourth quarter 2008. Detailing this first quarter of 2009, the Animal Nutrition and Health segment achieved quarterly sales of $35.9 million, a decrease of $3.2 million, or 8.3%, from the prior year quarter. Sales in this segment were negatively impacted by approximately 4% due to foreign currency fluctuation associated with the Italian operation. Within this segment, the specialty animal nutrition and health products, targeted predominantly for ruminant animals, realized approximately 4.1% growth over the 2008 first quarter results and 10.0 % growth sequentially, with continued strong sales of Reashure(R) and Nitroshure(R), in addition to new sales generated from AminoShure(TM)-L., our rumen protected lysine. These increases were partially offset by slowness in international sales of the chelated mineral products. Sales of feed grade choline and Balchem Corporation (NASDAQ:BCPC) 2 industrial derivatives declined approximately 10.3% from the prior year quarter principally due to declines in volumes sold into the well-publicized soft poultry industry, including slower international sales largely related to the strengthening of the U.S. dollar in 2009 versus a weakening dollar in 2008. Sales of industrial derivatives (both choline and methylamines) were impacted by softness in the industrial sector, principally caused by the general economic downturn. Through all of these market activities, earnings from operations for the entire ANH segment did increase to $5.0 million as compared to $3.3 million in the prior year comparable quarter, largely due to favorable product mix, strong sales from our Italian operation, and reductions in the cost of certain petro-chemical commodities used to manufacture choline and derivatives. Sales of the Food, Pharma and Nutrition segment were $8.3 million, a decrease of 10.6% or $1.0 million from the prior year comparable quarter; however, sales did grow approximately 9.6% on a sequential basis. Quarterly comparative sales results for this segment continue to reflect the roller-coaster effect of pipeline fills, inventory level management, and some effects of the worldwide economic downturn. The domestic food sector was up, as we continued to see growth from the launch of Choline into new food applications, as well as growth in the bakery, tortilla and preservation markets. We also saw strong double digit increases in our VitaShure(R) products for nutritional enhancement. These results were offset by slowness in sales of calcium products sold into the over-the-counter pharmaceutical markets. Earnings from operations for this segment were $1.0 million, as compared to $1.5 million in the prior year comparable quarter, due to the softness in sales volume; however, on a sequential basis, this result reflects a 35.8% increase from the fourth quarter of 2008. The ARC Specialty Products segment generated record first quarter sales of $8.8 million, an increase of 4.1% over the comparable prior year quarter. This growth was particularly due to continued strong sales of ethylene oxide for medical device sterilization. Earnings from operations for this segment, at $3.4 million, improved strongly over the prior year quarter, principally from reductions in the cost of certain petro-chemical raw materials. Consolidated gross profit for the quarter ended March 31, 2009 was $16.3 million, as compared to $13.5 million for the prior year comparable period. This increase, from 23.7% of sales to 30.8% of sales, was a result of certain segments' product mix, price increases and declines in certain raw material costs. As previously noted, we continue to focus on gross margin improvement, implementing raw material cost driven price increases, production and supply chain improvements, and sales volume generation through new product launches. Operating (Selling, R&D, and Administrative) expenses at $7.0 million, increased $0.9 million over the prior year comparable quarter, as we had some modest expansion of employees, and as we increased some accounts receivable reserves for international accounts. Balance sheet ratios and cash flow continue to be strong. Early in 2007, we borrowed $39 million; the proceeds of which were used to fund the Chinook and Akzo acquisitions. At March 31, 2009, our outstanding borrowings were $9.2 million, but zero net of our cash balance of approximately $18.6 million, reflecting accelerated payments of $18.4 million over the scheduled term payments of the loan. We continue to aggressively manage our working capital. Our accounts receivable balance was $25 million at March 31, 2009 and our inventory levels were reduced to $15.3 million, a decrease of 8% from December 31, 2008. Balchem Corporation (NASDAQ:BCPC) 3 Outlook Commenting on 2009, Dino A. Rossi, Chairman, President and CEO of Balchem, said, "This first quarter, while down a consolidated 6.8% in sales, reflects many positives in our business base, which are helping to offset the general global economic pressures. We have continued to focus on driving our cost structure down, not by reducing employee count, but exercising prudent cost control. We are seeing market acceptance of new product launches in both the human and animal sectors, and we continue our technology development in all segments with the target of launching products that will yield cost/value improvements for end markets served. We are staying focused on customer/market needs and global economic drivers. The earnings result of this first quarter is a great start to the year, highlighting the near-term requirement to very aggressively manage our P&L and Balance Sheet to maximize performance, reduce debt and generate cash reserves, to capitalize on other strategic opportunities. Unless there is another significant downturn in the general economies, we expect to see a flat sales result, year over year, but a double digit improvement in earnings for the year." Quarterly Conference Call A quarterly conference call will be held on Friday, May 1, at 2:00 PM Eastern Time (ET) to review first quarter and 2009 results. Dino A. Rossi, President and CEO, and Frank Fitzpatrick, CFO, will host the call. We invite you to listen to the conference by calling toll-free 1-877-407-8289 (local dial-in 1-201-689-8341), five minutes prior to the scheduled start time of the conference call. The conference call will be available for digital replay through Thursday, May 7, 2009. To access the replay of the conference call dial 1-877-660-6853 (local dial-in 1-201-612-7415), and use account #298 and replay ID#321719. Both account and replay ID numbers are required for replay access. Segment Information Balchem Corporation consists of three business segments: ARC Specialty Products; Food, Pharma and Nutrition; and Animal Nutrition and Health. Through ARC Specialty Products, Balchem provides specialty-packaged chemicals for use in healthcare and other industries. The Food, Pharma and Nutrition segment provides proprietary microencapsulation, granulation and agglomeration solutions to a variety of applications in the human food, pharmaceutical and nutrition marketplaces. The Animal Nutrition and Health segment manufactures and supplies products to numerous animal health markets and certain derivative products into industrial applications. 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, 2008. 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: Karin McCaffery, Balchem Corporation Telephone: 845-326-5635 Balchem Corporation (NASDAQ:BCPC) 4 Selected Financial Data ($ in 000's) Business Segment Net Sales: - -------------------------------------------------------------------------------- Three Months Ended March 31, 2009 2008 - -------------------------------------------------------------------------------- ARC Specialty Products $ 8,794 $ 8,450 Food, Pharma and Nutrition 8,304 9,289 Animal Nutrition and Health 35,888 39,122 - -------------------------------------------------------------------------------- Total $ 52,986 $ 56,861 ================================================================================ Business Segment Earnings (Loss): - -------------------------------------------------------------------------------- Three Months Ended March 31, 2009 2008 - -------------------------------------------------------------------------------- ARC Specialty Products $ 3,387 $ 2,598 Food, Pharma and Nutrition 959 1,528 Animal Nutrition and Health 4,964 3,278 Interest and other expense (144) (213) - -------------------------------------------------------------------------------- Total $ 9,166 $ 7,191 ================================================================================ Selected Balance Sheet Items March 31, December 31, --------- ------------ 2009 2008 ---- ---- Cash and Cash Equivalents $ 18,553 $ 3,422 Accounts Receivable 25,000 30,250 Inventories 15,305 16,618 Other Current Assets 3,438 4,961 ------------ ------------ Total Current Assets 62,296 55,251 Property, Plant, & Equipment (net) 41,394 42,513 Other Assets 55,751 56,710 ------------ ------------ Total Assets $ 159,441 $ 154,474 ============ ============ Current Liabilities $ 23,977 $ 25,685 Long-Term Obligations 13,057 14,283 ------------ ------------ Total Liabilities 37,034 39,968 Stockholders' Equity 122,407 114,506 ------------ ------------ Total Liabilities and Stockholders' Equity $ 159,441 $ 154,474 ============ ============ -----END PRIVACY-ENHANCED MESSAGE-----