10-Q

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, 2022

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

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

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

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

(Check one):	Large accelerated filer	☑	Accelerated filer	☐
	Non-accelerated filer	☐	Smaller reporting company	☐	Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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

As of October 27, 2022, the registrant had 32,135,122 shares of its Common Stock, $.06 2/3 par value, outstanding.

BALCHEM CORPORATION

QUARTERLY REPORT ON FORM 10-Q

TABLE OF CONTENTS

		Page No.
PART I	FINANCIAL INFORMATION
Item 1.	Financial Statements (unaudited)
	Condensed Consolidated Balance Sheets as of September 30, 2022 and December 31, 2021	3
	Condensed Consolidated Statements of Earnings for the Three and Nine Months Ended September 30, 2022 and 2021	4
	Condensed Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended September 30, 2022 and 2021	5
	Condensed Consolidated Statements of Changes in Stockholders' Equity for the Three and Nine Months Ended September 30, 2022 and 2021	6
	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2022 and 2021	8
	Notes to Condensed Consolidated Financial Statements	9
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	29
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	37
Item 4.	Controls and Procedures	38
PART II	OTHER INFORMATION
Item 1.	Legal Proceedings	38
Item 1A.	Risk Factors	39
Item 2C.	Issuer Purchase of Equity Securities	39
Item 6.	Exhibits	40
SIGNATURE PAGE		41

Part I.    Financial Information

Item 1.    Financial Statements

BALCHEM CORPORATION

Condensed Consolidated Balance Sheets

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

Assets	September 30, 2022 (unaudited)		December 31, 2021
Current assets:	(unaudited)
Cash and cash equivalents	$	56,489	$	103,239
Accounts receivable, net of allowance for doubtful accounts of $1,186 and $928 at September 30, 2022 and December 31, 2021 respectively	140,812		117,408
Inventories	139,464		91,058
Prepaid expenses	6,944		6,116
Prepaid income taxes	3,954		—
Derivative assets	14,540		—
Other current assets	5,908		4,411
Total current assets	368,111		322,232
Property, plant and equipment, net	260,008		237,517
Goodwill	749,035		523,949
Intangible assets with finite lives, net	227,323		94,665
Right of use assets - operating leases	11,617		6,929
Right of use assets - finance lease	2,202		2,359
Other assets	14,712		11,674
Total assets	$	1,633,008	$	1,199,325
Liabilities and Stockholders' Equity
Current liabilities:
Trade accounts payable	$	73,121	$	56,243
Accrued expenses	49,980		43,411
Accrued compensation and other benefits	14,959		19,567
Dividends payable	125		20,886
Income taxes payable	—		1,334
Operating lease liabilities - current	3,727		2,194
Finance lease liabilities - current	173		167
Total current liabilities	142,085		143,802
Revolving loan	462,569		108,569
Deferred income taxes	76,771		46,455
Operating lease liabilities - non-current	8,069		4,811
Finance lease liabilities - non-current	2,172		2,303
Derivative liabilities	—		2,658
Contingent consideration liabilities	30,547		—
Other long-term obligations	14,873		13,712
Total liabilities	737,086		322,310
Commitments and contingencies (Note 16)
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; 32,134,902 and 32,287,150 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively	2,144		2,154
Additional paid-in capital	124,558		147,716
Retained earnings	816,089		732,138
Accumulated other comprehensive loss	(46,869)		(4,993)
Total stockholders' equity	895,922		877,015
Total liabilities and stockholders' equity	$	1,633,008	$	1,199,325

See accompanying notes to condensed consolidated financial statements.

3

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,
	2022		2021		2022		2021
Net sales	$	244,267	$	197,869	$	709,827	$	585,890
Cost of sales	175,837		136,935		498,015		406,782
Gross margin	68,430		60,934		211,812		179,108
Operating expenses:
Selling expenses	16,590		15,478		49,566		45,248
Research and development expenses	2,996		3,156		9,149		8,804
General and administrative expenses	15,219		9,787		41,216		31,375
	34,805		28,421		99,931		85,427
Earnings from operations	33,625		32,513		111,881		93,681
Other expenses, net:
Interest expense, net	3,642		556		5,147		1,889
Other income, net	(1,102)		(128)		(1,239)		(295)
	2,540		428		3,908		1,594
Earnings before income tax expense	31,085		32,085		107,973		92,087
Income tax expense	5,836		7,072		24,012		20,932
Net earnings	$	25,249	$	25,013	$	83,961	$	71,155
Net earnings per common share - basic	$	0.79	$	0.78	$	2.62	$	2.21
Net earnings per common share - diluted	$	0.78	$	0.77	$	2.59	$	2.18

See accompanying notes to condensed consolidated financial statements.

4

BALCHEM CORPORATION

Condensed Consolidated Statements of Comprehensive Income

(Dollars in thousands)

(unaudited)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Net earnings	$	25,249	$	25,013	$	83,961	$	71,155
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment	(34,874)		(3,362)		(44,667)		(7,981)
Unrealized gain on cash flow hedge	427		341		2,850		1,204
Change in postretirement benefit plans	2		11		(59)		26
Other comprehensive income (loss)	(34,445)		(3,010)		(41,876)		(6,751)
Comprehensive (loss) income	$	(9,196)	$	22,003	$	42,085	$	64,404

See accompanying notes to condensed consolidated financial statements.

5

BALCHEM CORPORATION

Condensed Consolidated Statements of Changes in Stockholders’ Equity

For the three and nine months ended September 30, 2022 and 2021

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

	Total Stockholders' Equity		Retained Earnings		Accumulated Other Comprehensive (Loss) Income		Common Stock			Additional Paid-in Capital
							Shares	Amount
Balance - December 31, 2021	$	877,015	$	732,138	$	(4,993)	32,287,150	$	2,154	$	147,716
Net earnings	28,930		28,930		—		—	—		—
Other comprehensive (loss)	(1,296)		—		(1,296)		—	—		—
Repurchases of common stock	(34,599)		—		—		(245,685)	(16)		(34,583)
Dividends	(10)		(10)		—		—	—		—
Shares and options issued under stock plans	3,642		—		—		74,604	4		3,638
Balance - March 31, 2022	873,682		761,058		(6,289)		32,116,069	2,142		116,771
Net earnings	29,782		29,782		—		—	—		—
Other comprehensive (loss)	(6,135)		—		(6,135)		—	—		—
Repurchases of common stock	(600)		—		—		(4,976)	—		(600)
Shares and options issued under stock plans	4,641		—		—		9,500	1		4,640
Balance - June 30, 2022	901,370		790,840		(12,424)		32,120,593	2,143		120,811
Net earnings	25,249		25,249		—		—	—		—
Other comprehensive (loss)	(34,445)		—		(34,445)		—	—		—
Repurchases of common stock	(46)		—		—		(361)	—		(46)
Shares and options issued under stock plans	3,794		—		—		14,670	1		3,793
Balance - September 30, 2022	$	895,922	$	816,089	$	(46,869)	32,134,902	$	2,144	$	124,558

See accompanying notes to condensed consolidated financial statements.

6

Condensed Consolidated Statements of Changes in Stockholders’ Equity (continued)

For the three and nine months ended September 30, 2022 and 2021

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

	Total Stockholders' Equity		Retained Earnings		Accumulated Other Comprehensive (Loss) Income		Common Stock			Additional Paid-in Capital
							Shares	Amount
Balance - December 31, 2020	$	828,233	$	656,740	$	4,173	32,372,621	$	2,160	$	165,160
Net earnings	23,411		23,411		—		—	—		—
Other comprehensive (loss)	(5,624)		—		(5,624)		—	—		—
Repurchases of common stock	(1,596)		—		—		(13,475)	(1)		(1,595)
Shares and options issued under stock plans	5,068		—		—		92,784	6		5,062
Balance - March 31, 2021	849,492		680,151		(1,451)		32,451,930	2,165		168,627
Net earnings	22,731		22,731		—		—	—		—
Other comprehensive income	1,883		—		1,883		—	—		—
Repurchases of common stock	(9,240)		—		—		(72,649)	(5)		(9,235)
Shares and options issued under stock plans	4,776		—		—		25,493	2		4,774
Balance - June 30, 2021	869,642		702,882		432		32,404,774	2,162		164,166
Net earnings	25,013		25,013		—		—	—		—
Other comprehensive (loss)	(3,010)		—		(3,010)		—	—		—
Repurchases of common stock	(7,926)				—		(61,075)	(4)		(7,922)
Shares and options issued under stock plans	5,359		—		—		38,938	3		5,356
Balance - September 30, 2021	$	889,078	$	727,895	$	(2,578)	32,382,637	$	2,161	$	161,600

See accompanying notes to condensed consolidated financial statements.

7

BALCHEM CORPORATION

Condensed Consolidated Statements of Cash Flows

(Dollars in thousands)

(unaudited)

	Nine Months Ended September 30,
	2022		2021
Cash flows from operating activities:
Net earnings	$	83,961	$	71,155
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization	37,958		36,622
Stock compensation expense	9,838		8,809
Deferred income taxes	1,513		(806)
Provision for doubtful accounts	379		105
Unrealized gain on foreign currency transaction and deferred compensation	(1,262)		(534)
Asset impairment charge	23		—
Loss/(gain) on disposal of assets	259		(996)
Changes in assets and liabilities
Accounts receivable	(14,678)		(14,088)
Inventories	(30,370)		(11,736)
Prepaid expenses and other current assets	(690)		(3,793)
Accounts payable and accrued expenses	14,358		30,467
Income taxes	(5,732)		(681)
Other	1,324		1,499
Net cash provided by operating activities	96,881		116,023
Cash flows from investing activities:
Cash paid for acquisitions, net of cash acquired	(365,780)		—
Capital expenditures and intangible assets acquired	(35,793)		(22,391)
Proceeds from insurance and sale of assets	198		1,272
Investment in affiliates	(150)		—
Net cash used in investing activities	(401,525)		(21,119)
Cash flows from financing activities:
Proceeds from revolving loan	435,000		5,000
Principal payments on revolving loan	(81,000)		(60,000)
Principal payments on acquired debt	(30,782)		—
Cash paid for financing costs	(1,232)		—
Principal payments on finance lease	(125)		(118)
Proceeds from stock options exercised	2,172		6,351
Dividends paid	(20,708)		(18,704)
Purchase of common stock	(35,245)		(18,762)
Net cash provided by (used in) financing activities	268,080		(86,233)
Effect of exchange rate changes on cash	(10,186)		(3,229)
(Decrease) increase in cash and cash equivalents	(46,750)		5,442
Cash and cash equivalents beginning of period	103,239		84,571
Cash and cash equivalents end of period	$	56,489	$	90,013

See accompanying notes to condensed consolidated financial statements.

8

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, 2021 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, 2021. 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, 2022 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 Adopted Accounting Standards

In March 2020, the FASB issued Accounting Standards Update ("ASU") 2020-04, "Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting." This ASU provides temporary optional guidance to ease the potential burden in accounting for reference rate reform. The new guidance provides optional expedients and exceptions for applying GAAP to contract modifications and hedging relationships, subject to meeting certain criteria, that reference LIBOR or another reference rate expected to be discontinued. The ASU is intended to help stakeholders during the global market-wide reference rate transition period. Therefore, this Standard Update is in effect from March 12, 2020 through December 31, 2022. In January 2021, the FASB issued ASU 2021-01, "Reference Rate Reform (Topic 848): Scope." ASU 2021-01 clarifies that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition. The ASU also amends the expedients and exceptions in Topic 848 to capture the incremental consequences of the scope clarification and to tailor the existing guidance to derivative instruments affected by the discounting transition. The Company adopted the Standard Update in 2021. Due to the discontinuation of LIBOR and under the relief provided by Topic 848, during the third quarter of 2022, the Company modified its existing interest rate swap and replaced LIBOR with 1-month CME Term SOFR (see Note 20, "Derivative Instruments and Hedging Activities "). The modification of the agreement did not have a significant impact on the Company's consolidated financial statements and disclosures.

In December 2019, the FASB issued ASU 2019-12, "Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes." ASU 2019-12 simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The amendments also improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance. ASU 2019-12 became effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. The Company adopted ASU 2019-12 on January 1, 2021. The adoption of ASU 2019-12 did not have a significant impact on the Company's consolidated financial statements and disclosures.

9

NOTE 2 – SIGNIFICANT ACQUISITIONS

Cardinal Associates Inc. ("Bergstrom")

On August 30, 2022, the Company's wholly-owned subsidiary Albion Laboratories, Inc. ("Albion") entered into a Stock Purchase Agreement, and closed on such transaction with Cardinal Associates Inc. ("Cardinal"), a corporation organized under the laws of the State of Washington, pursuant to which Albion acquired Cardinal and its Bergstrom Nutrition business (collectively, "Bergstrom"). Bergstrom Nutrition is a leading science-based manufacturer of methylsulfonylmethane (MSM), based in Vancouver, Washington. MSM is a widely used nutritional ingredient with strong scientific evidence supporting its benefits for joint health, sports nutrition, skin and beauty, healthy aging, and pet health. Bergstrom Nutrition's MSM brand "OptiMSM®" delivers the highest quality and purity MSM on the market and is the only brand of MSM with a U.S. GRAS "generally regarded as safe" designation. The addition of OptiMSM® to the Company's portfolio within Human Nutrition & Health and Animal Nutrition & Health segments provides a synergistic scientific advantage in Balchem's key strategic therapeutic focus areas such as longevity and performance and is a strong fit with Balchem's specialty, science-backed mineral products.

The Company made payments of $70,892 for the acquisition, amounting to $69,740 to the former shareholders and $1,152 to pay off Bergstrom's bank debt and certain other obligations. Net of cash acquired of $773, total payments made to the former shareholders of Bergstrom on the acquisition date were $68,967. The acquisition was primarily financed through the 2022 Credit Agreement (see Note 8, "Revolving Loan"). In connection with this transaction, the former shareholders of Bergstrom have an opportunity to receive an additional payment if certain financial performance targets and other metrics are met, and therefore we recorded a contingent consideration liability of $7,835 as of September 30, 2022. The goodwill of $34,060 that arose on the acquisition date consists largely of expected synergies, including the combined entities' experience and technical problem-solving capabilities, and acquired workforce. The goodwill is assigned to both the Human Nutrition & Health and Animal Nutrition & Health business segments. For tax purposes, a joint election under 338(h)(10) was made to treat the stock acquisition as a deemed asset acquisition, therefore generating tax amortizable goodwill.

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed:

Cash and cash equivalents	$	773
Accounts receivable	4,699
Inventories	3,922
Property, plant and equipment	2,700
Right of use assets	866
Customer relationships	26,500
Developed technology	4,700
Trademarks	2,300
Other assets	197
Accounts payable	(685)
Bank debt	(206)
Lease liabilities	(871)
Other liabilities	(1,380)
Goodwill	34,060
Total consideration on acquisition date	77,575
Contingent consideration liability	(7,835)
Amount paid to shareholders	69,740
To pay off bank debt and certain other obligations	1,152
Total amount paid	$	70,892

The estimated fair value of tangible and intangible assets acquired and liabilities assumed is based on management’s estimates and assumptions, which are subject to change. In preparing our preliminary fair value estimates of the intangible assets and certain tangible assets acquired, management, among other things, consulted an independent advisor. Valuation methods utilized include net realizable value for inventory, multi-period excess earnings method for customer relationships, the relief from royalty method for other intangible assets, and a scenario-based approach for the contingent consideration. The purchase price and related allocation of assets acquired and liabilities assumed is preliminary pending management's final review of fair value calculations.

10

Customer relationships are amortized over a 15-year period utilizing a percentage of excess earnings over economic life method. The corporate trademark and product trademarks are amortized over 2 years and 10 years, respectively, and developed technology is amortized over 12 years, utilizing the straight-line method as the consumption pattern of the related economic benefits cannot be reliably determined.

Transaction and integration costs related to the Bergstrom acquisition are included in general and administrative expenses and were $593 and $668 for the three and nine months ended September 30, 2022, respectively.

Kechu BidCo AS and Its Subsidiary Companies ("Kappa")

On June 21, 2022, Balchem Corporation and its wholly-owned subsidiary, Balchem B.V., completed the acquisition of Kechu BidCo AS and its subsidiary companies, including Kappa Bioscience AS, a leading science-based manufacturer of specialty vitamin K2 for the human nutrition industry, headquartered in Oslo, Norway (all acquired companies collectively referred to as “Kappa”). The Company made payments of approximately kr3,301,341 ("kr" indicates the Norwegian krone) on the acquisition date, amounting to approximately kr2,997,669 to the former shareholder and approximately kr303,672 to Kappa's lenders to pay off all Kappa bank debt. Net of cash acquired of kr63,064, total payments on the acquisition date were kr3,238,277. Considering net cash acquired of $6,365, these payments translated to approximately $326,820 paid on the acquisition date, amounting to $302,537 paid to the former shareholder and approximately $30,648 to Kappa's lenders. The acquisition was primarily financed through the 2018 Credit Agreement (see Note 8, "Revolving Loan"). In connection with this transaction, the seller has an opportunity to receive an additional payment in 2024 if certain financial performance targets and other metrics are met, and therefore we recorded contingent consideration of kr245,000 in the second quarter of 2022 (translated to $22,712 as of September 30, 2022). Kappa manufactures specialty vitamin K2, a fast-growing specialty vitamin that plays a crucial role in the human body for bone health, heart health, immunity, and athletic performance. Primarily, vitamin K2 supports the transport and distribution of calcium in the body. Vitamin K2 is important at all life stages, from pregnancy and early life to healthy aging. Kappa's K2VITAL® branded vitamin K2 is the leading synthetic vitamin K2 and is backed by strong intellectual property and a deep clinical research portfolio. The acquisition strengthens the Company's scientific and technical expertise, geographic reach, and marketplace leadership, which should ultimately lead to accelerated growth for the Company's portfolios within the Human Nutrition & Health segment.

The goodwill of $217,570 that arose on the acquisition date consists largely of expected synergies, including the combined entities' experience and technical problem-solving capabilities, and acquired workforce. The goodwill is assigned to the Human Nutrition & Health business segment and is not deductible for income tax purposes.

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed. The transactions were completed in Norwegian kroner ("NOK") and the amounts were translated to U.S. dollars ("USD") using the foreign currency exchange rate as of June 21, 2022.

11

Cash and cash equivalents	$	6,365
Accounts receivable	8,036
Inventories	17,701
Property, plant and equipment	9,854
Right of use assets	3,349
Customer relationships	110,012
Developed technology	17,662
Trademarks	6,055
Other assets	2,399
Accounts payable	(3,301)
Bank debt	(30,648)
Lease liabilities	(3,349)
Other liabilities	(4,373)
Deferred income taxes, net	(30,069)
Goodwill	217,570
Total consideration on acquisition date	327,263
Contingent consideration liability	(24,726)
Net gain on foreign currency exchange forward contracts	(512)
Amount paid to shareholders	302,025
Kappa bank debt paid on acquisition date	30,648
Total amount paid on acquisition date	$	332,673

The estimated fair value of tangible and intangible assets acquired and liabilities assumed is based on management’s estimates and assumptions, which are subject to change. In preparing our preliminary fair value estimates of the intangible assets and certain tangible assets acquired, management, among other things, consulted an independent advisor. Valuation methods utilized include net realizable value for inventory, multi-period excess earnings method for customer relationships, the relief from royalty method for other intangible assets, and a scenario-based approach for the contingent consideration. The purchase price and related allocation of assets acquired and liabilities assumed is preliminary pending management's final review of fair value calculations and deferred tax liabilities related to certain non-deductible assets.

Customer relationships are amortized over a 15-year period utilizing a percentage of excess earnings over economic life method. The corporate trademark and product trademarks are amortized over 2 years and 10 years, respectively, and developed technology is amortized over 12 years, utilizing the straight-line method as the consumption pattern of the related economic benefits cannot be reliably determined.

Transaction and integration costs related to the Kappa acquisition are included in general and administrative expenses and were $989 and $1,440 for both the three and nine months ended September 30, 2022. There were no such amounts related to this acquisition for the three and nine months ended September 30, 2021.

NOTE 3 – STOCKHOLDERS’ EQUITY

STOCK-BASED COMPENSATION

The Company’s results for the three and nine months ended September 30, 2022 and 2021 reflected the following stock-based compensation cost, and such compensation cost had the following effects on net earnings:

	Increase/(Decrease) for the				Increase/(Decrease) for the
	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Cost of sales	$	386	$	444	$	1,062	$	1,188
Operating expenses	2,563		2,451		8,776		7,621
Net earnings	(2,251)		(2,232)		(7,563)		(6,801)

12

As allowed by 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 stock incentive plans allow 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 plans. 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, 2022, the plans had 407,630 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 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, 2022 and 2021 is summarized below:

For the nine months ended September 30, 2022	Shares (000s)	Weighted Average Exercise Price		Aggregate Intrinsic Value		Weighted Average Remaining Contractual Term
Outstanding as of December 31, 2021	867	$	88.19	$	69,711
Granted	239	139.04
Exercised	(31)	70.06
Forfeited	(12)	125.05
Canceled	—	—
Outstanding as of September 30, 2022	1,063	$	99.74	$	27,308	6.6
Exercisable as of September 30, 2022	656	$	81.45	$	26,312	5.2

For the nine months ended September 30, 2021	Shares (000s)	Weighted Average Exercise Price		Aggregate Intrinsic Value		Weighted Average Remaining Contractual Term
Outstanding as of December 31, 2020	858	$	80.58	$	29,735
Granted	129	119.12
Exercised	(100)	63.49
Forfeited	(10)	106.93
Canceled	(1)	74.57
Outstanding as of September 30, 2021	876	$	87.91	$	50,090	6.6
Exercisable as of September 30, 2021	540	$	74.81	$	37,961	5.5

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 Plans 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, 2022, the fair value of each option grant was estimated on the date of the grant using the following weighted average assumptions: dividend yields of 0.5%; expected volatilities of 30%; risk-free interest rates of 2.8%; and expected lives of 7.3 years. For nine months ended September 30, 2021, the fair value of each option grant was estimated on the date of the grant using the following weighted average assumptions: dividend yields of 0.5%; expected volatilities of 33%; risk-free interest rates of 0.5%; and expected lives of 4.9 years.

The Company used a projected expected life for each award granted based on historical experience of employees’ exercise behavior. Expected volatility is 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.

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Other information pertaining to option activity during the three and nine months ended September 30, 2022 and 2021 is as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Weighted-average fair value of options granted	$	48.55	$	—	$	44.77	$	33.11
Total intrinsic value of stock options exercised ($000s)	$	815	$	3,196	$	1,964	$	6,927

Non-vested restricted stock activity for the nine months ended September 30, 2022 and 2021 is summarized below:

	Nine Months Ended September 30,
	2022			2021
	Shares (000s)	Weighted Average Grant Date Fair Value		Shares (000s)	Weighted Average Grant Date Fair Value
Non-vested balance as of December 31	166	$	99.70	159	$	90.71
Granted	40	137.03		38	119.59
Vested	(78)	81.11		(16)	86.79
Forfeited	(7)	116.72		(5)	95.71
Non-vested balance as of September 30	121	$	122.96	176	$	97.17

Non-vested performance share activity for the nine months ended September 30, 2022 and 2021 is summarized below:

	Nine Months Ended September 30,
	2022			2021
	Shares (000s)	Weighted Average Grant Date Fair Value		Shares (000s)	Weighted Average Grant Date Fair Value
Non-vested balance as of December 31	69	$	110.72	71	$	91.99
Granted	39	114.22		36	108.74
Vested	(35)	53.17		(24)	70.64
Forfeited	(3)	84.09		(11)	74.57
Non-vested balance as of September 30	70	$	127.69	72	$	110.22

The 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, and 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. Expense is measured based on the fair value at the date of grant utilizing a Black-Scholes methodology to produce a Monte-Carlo simulation model which allows for the incorporation of the performance hurdles that must be met before the PS vests. The assumptions used in the fair value determination were risk free interest rates of 1.8% and 0.2%; dividend yields of 0.5% and 0.6%; volatilities of 32% and 33%; and initial TSR’s of -15.7% and 11.7%, in each case for the nine months ended September 30, 2022 and 2021, 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.

As of September 30, 2022 and 2021, there were $23,665 and $16,498, respectively, of total unrecognized compensation costs related to non-vested share-based compensation arrangements granted under the plans. As of September 30, 2022, the

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unrecognized compensation cost is expected to be recognized over a weighted-average period of approximately 2.1 years. The Company estimates that share-based compensation expense for the year ended December 31, 2022 will be approximately $13,500.

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 3,069,266 shares have been purchased. The Company’s prior presentation of reflecting treasury stock separately within stockholders’ equity has been adjusted to conform to the presentation prescribed by the State of Maryland, where the Company is incorporated. In connection therewith, adjustments to balances previously reflected as treasury stock of $11,080, $8,472, $2,210, and $7,873 as of September 30, 2021, June 30, 2021, March 31, 2021, and December 31, 2020, respectively, were made to the condensed consolidated statements of changes in stockholders’ equity and prior references to “Treasury shares purchased” were updated to “Repurchases of common stock”, accordingly. There was no impact to total stockholders’ equity in any of the years presented as a result of these updates. 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. The Company also repurchases shares from employees in connection with settlement of transactions under the Company's equity incentive plans. During the nine months ended September 30, 2022 and 2021, the Company purchased 251,022 and 147,199 shares, respectively, from open market purchases and from employees on a net-settlement basis to provide cash to employees to cover the associated employee payroll taxes. These shares were purchased at an average cost of $140.41 and $127.46, respectively.

NOTE 4 – INVENTORIES

Inventories at September 30, 2022 and December 31, 2021 consisted of the following:

	September 30, 2022		December 31, 2021
Raw materials	$	41,371	$	28,639
Work in progress	11,879		10,563
Finished goods	86,214		51,856
Total inventories	$	139,464	$	91,058

NOTE 5 – PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment at September 30, 2022 and December 31, 2021 are summarized as follows:

	September 30, 2022		December 31, 2021
Land	$	10,993	$	11,692
Building	90,239		89,602
Equipment	267,611		253,995
Construction in progress	73,163		52,930
	442,006		408,219
Less: accumulated depreciation	181,998		170,702
Property, plant and equipment, net	$	260,008	$	237,517

NOTE 6 – INTANGIBLE ASSETS

The Company had goodwill in the amount of $749,035 and $523,949 as of September 30, 2022 and December 31, 2021, respectively, subject to the provisions of ASC 350, “Intangibles-Goodwill and Other.” The increase in goodwill is the result of the acquisitions of Kappa and Bergstrom, partially offset by the change due to foreign exchange translation adjustments. Refer to Note 2, "Significant Acquisitions", for more information.

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Identifiable intangible assets with finite lives at September 30, 2022 and December 31, 2021 are summarized as follows:

	Amortization Period (in years)	Gross Carrying Amount at 9/30/2022		Accumulated Amortization at 9/30/2022		Gross Carrying Amount at 12/31/2021		Accumulated Amortization at 12/31/2021
Customer relationships & lists	10-20	$	361,747	$	185,381	$	240,059	$	173,489
Trademarks & trade names	2-17	50,487		32,285		43,116		28,985
Developed technology	5-12	40,816		15,524		20,234		14,607
Other	2-18	24,600		17,137		23,921		15,584
		$	477,650	$	250,327	$	327,330	$	232,665

Amortization of identifiable intangible assets was approximately $7,922 and $19,683 for the three and nine months ended September 30, 2022, respectively, and $6,155 and $18,868 for the three and nine months ended September 30, 2021, respectively. Assuming no change in the gross carrying value of identifiable intangible assets, estimated amortization expense is $5,300 for the remainder of 2022, $30,188 for 2023, $21,740 for 2024, $17,906 for 2025, $17,362 for 2026 and $16,553 for 2027. At September 30, 2022 and December 31, 2021, there were no identifiable intangible assets with indefinite useful lives as defined by ASC 350. Identifiable intangible assets are reflected in “Intangible assets with finite lives, net” in 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, 2022 and 2021.

NOTE 7 – EQUITY-METHOD INVESTMENT

In 2013, the Company and Eastman Chemical Company (formerly Taminco Corporation) 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 up to 2/3 of the production offtake capacity 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 $140 and $420 for the three and nine months ended September 30, 2022, respectively, and $142 and $416 for the three and nine months ended September 30, 2021, respectively, relating to its portion of the joint venture's expenses in other expense. The Company made capital contributions to the investment totaling $89 and $222 for the three and nine months ended September 30, 2022, respectively, and $46 and $31 for the three and nine months ended September 30, 2021, respectively. The carrying value of the joint venture at September 30, 2022 and December 31, 2021 was $4,301 and $4,499, respectively, and is recorded in "Other assets."

NOTE 8 – REVOLVING LOAN

On June 27, 2018, the Company and a bank syndicate entered into a credit agreement (the "2018 Credit Agreement"), which provided for revolving loans up to $500,000, due on June 27, 2023. During the second quarter of 2022, the Company borrowed $345,000 under the 2018 Credit Agreement to fund the Kappa acquisition (see Note 2, "Significant Acquisitions"). 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. The Company used initial proceeds from the 2022 Credit Agreement to repay the outstanding balance of $433,569 due in June 2023 under the 2018 Credit Agreement. During the third quarter of 2022, the Company borrowed another $70,000 to fund the Bergstrom acquisition (see Note 2, "Significant Acquisitions"). As of September 30, 2022, the total balance outstanding on the 2022 Credit Agreement amounted to $462,569. As of December 31, 2021, the total balance outstanding on the 2018 Credit Agreement amounted to $108,569. 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. In connection with the entering into the Amended and Restated Credit Agreement, the Company also modified its existing interest rate swap under the relief provided for in ASC 848, "Reference Rate Reform" (see Note 20 "Derivative Instruments and Hedging Activities").

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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 4.214% at September 30, 2022. 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 0.15% to 0.225% (0.175% at September 30, 2022).  The unused portion of the revolving loan amounted to $87,431 at September 30, 2022.  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 and certain costs associated with the issuance of the extinguished debt instrument 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 totaled $1,389 and $421 at September 30, 2022 and December 31, 2021, respectively, and are included in other assets on the condensed consolidated balance sheets. Amortization expense pertaining to these costs totaled $121 and $262 for the three and nine months ended September 30, 2022 and $71 and $212 for the three and nine months ended September 30, 2021, respectively, and are included in "Interest expense" 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, 2022, the Company was in compliance with these covenants. Indebtedness under the Company’s loan agreements is secured by assets of the Company.

NOTE 9– 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,
	2022		2021		2022		2021
Net Earnings - Basic and Diluted	$	25,249	$	25,013	$	83,961	$	71,155
Shares (000s)
Weighted Average Common Shares - Basic	32,010		32,194		32,017		32,227
Effect of Dilutive Securities – Stock Options, Restricted Stock, and Performance Shares	357		450		375		424
Weighted Average Common Shares - Diluted	32,367		32,644		32,392		32,651
Net Earnings Per Share - Basic	$	0.79	$	0.78	$	2.62	$	2.21
Net Earnings Per Share - Diluted	$	0.78	$	0.77	$	2.59	$	2.18

The number of anti-dilutive shares were 362,203 and 369,183 for the three and nine months ended September 30, 2022, respectively, and 151,924 and 156,238 for the three and nine months ended September 30, 2021, 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 10 – INCOME TAXES

The Company’s effective tax rate for the three months ended September 30, 2022 and 2021, was 18.8% and 22.0%, respectively, and 22.2% and 22.7% for the nine months ended September 30, 2022 and 2021. The decrease in the effective tax rate for the three months ended September 30, 2022 compared to the three months ended September 30, 2021 was primarily due to a favorable provision to return adjustment related to an increase in certain tax credits and deductions. The decrease in the effective tax rate for the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021 was primarily due to a favorable provision to return adjustment related to an increase in certain tax credits and deductions, which was offset by a change in mix of earnings in higher taxing jurisdictions.

Balchem will continue to evaluate and analyze the impact of the U.S. Tax Cuts and Jobs Act that was enacted on December 22, 2017 and the additional guidance that has been issued, and may be issued, by the U.S. Department of Treasury, the Securities and Exchange Commission ("SEC"), and/or the Financial Accounting Standards Board ("FASB") regarding this act.

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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.

The Company files income tax returns in the U.S. and in various states and foreign countries. As of September 30, 2022, in the major jurisdictions where the Company operates, it is generally no longer subject to income tax examinations by tax authorities for years before 2017. As of September 30, 2022 and December 31, 2021, the Company had approximately $5,690 and $5,881, respectively, of unrecognized tax benefits, which are included in "Other long-term obligations" on the Company’s condensed consolidated balance sheets. The Company includes interest expense or income as well as potential penalties on unrecognized tax positions as a component of "Income tax expense" in the condensed consolidated statements of earnings. The total amounts of accrued interest and penalties related to uncertain tax positions at September 30, 2022 and December 31, 2021 were approximately $2,167 and $2,106, respectively, and are included in "Other long-term obligations."

NOTE 11 – SEGMENT INFORMATION

Balchem Corporation reports three business segments: 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."

Human Nutrition & Health

The Human Nutrition & Health ("HNH") segment provides human grade choline nutrients and mineral amino acid chelated products through this segment for nutrition and health applications. Choline is recognized to play a key role in the development and structural integrity of brain cell membranes in infants, processing dietary fat, reproductive development and neural functions, such as memory and muscle function. The Company's mineral amino acid chelates, specialized mineral salts, and mineral complexes are used as raw materials for inclusion in premier human nutrition products. Proprietary technologies have been combined to create an organic molecule in a form the body can readily assimilate. Sales growth for human nutrition applications is reliant on differentiation from lower-cost competitive products through scientific data, intellectual property and customers' appreciation of brand value. Consequently, the Company makes investments in such activities for long-term value differentiation. This segment also serves the food and beverage industry for beverage, bakery, dairy, confectionary, and savory manufacturers. The Company partners with its customers from ideation through commercialization to bring on-trend beverages, baked goods, confections, dairy and meat products to market. The Company has expertise in trends analysis and product development. With its strong manufacturing capabilities in customized spray dried and emulsified powders, extrusion and agglomeration, blended lipid systems, liquid flavor delivery systems, juice and dairy bases, chocolate systems, ice cream bases and variegates, the Company is a one-stop solutions provider for beverage and dairy product development needs. Additionally, this segment provides microencapsulation solutions to a variety of applications in food, pharmaceutical and nutritional ingredients to enhance performance of nutritional fortification, processing, mixing, and packaging applications and shelf-life. Major product applications are baked goods, refrigerated and frozen dough systems, processed meats, seasoning blends, confections, sports and protein bars, dietary plans, and nutritional supplements. The Company also creates cereal systems for ready-to-eat cereals, grain-based snacks, and cereal based ingredients. Through the Kappa and Bergstrom acquisitions, respectively, this segment recently began manufacturing specialty vitamin K2, which is a fast-growing specialty vitamin that plays a crucial role in the human body for bone health, heart health, immunity, and athletic performance, and MSM, which is a widely used nutritional ingredient that provides benefits for joint health, sports nutrition, skin and beauty, and healthy aging.

Animal Nutrition & Health

The Company’s Animal Nutrition & Health ("ANH") segment provides nutritional products derived from its microencapsulation and chelation technologies in addition to basic choline chloride. For ruminant animals, the Company’s microencapsulated

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products boost health and milk production by delivering nutrient supplements that are biologically available, providing required nutritional levels. The Company’s proprietary chelation technology provides enhanced nutrient absorption for various species of production and companion animals and is marketed for use in animal feed throughout the world. ANH also manufactures and supplies choline chloride, an essential nutrient for monogastric animal health, predominantly to the poultry, pet and swine industries. Choline, which is manufactured and sold in both dry and aqueous forms, plays a vital role in the metabolism of fat. In poultry, choline deficiency can result in reduced growth rates and perosis in young birds, while in swine production choline is a necessary and required component of gestating and lactating sow diets for both liver health and prevention of leg deformity. Through the Bergstrom acquisition, this segment recently began manufacturing MSM, which is a widely used nutritional ingredient that provides benefits for pet health.

Sales of value-added encapsulated products are highly dependent on overall industry economics as well as the Company's ability to leverage the results of university and field research on the animal health and production benefits of our products. Management believes that success in the commodity-oriented basic choline chloride marketplace is highly dependent on the Company’s ability to maintain its strong reputation for excellent product quality and customer service. The Company continues to drive production efficiencies in order to maintain its competitive-cost position to effectively compete in a competitive global marketplace.

Specialty Products

The Company re-packages and distributes a number of performance gases and chemicals for various uses by its customers, notably ethylene oxide, propylene oxide, and ammonia. Ethylene oxide is sold as a sterilant gas, primarily for use in the health care industry. It is used to sterilize a wide range of medical devices because of its versatility and effectiveness in treating hard or soft surfaces, composites, metals, tubing and different types of plastics without negatively impacting the performance of the device being sterilized. Contract sterilizers and medical device manufacturers are principal customers for this product. Propylene oxide is marketed and sold as a fumigant to aid in the control of insects and microbiological spoilage; and to reduce bacterial and mold contamination in certain shelled and processed nut meats, processed spices, cacao beans, cocoa powder, raisins, figs and prunes, and for various chemical synthesis applications, such as increasing paint durability and manufacturing specialty starches and textile coatings Ammonia is used primarily as a refrigerant, and also for heat treatment of metals and various chemical synthesis applications, and is distributed in reusable and recyclable drum and cylinder packaging approved for use in the countries these products are shipped to.

The Company’s performance gases and chemicals are distributed worldwide in specially designed, reusable and recyclable drum and cylinder packaging, to assure compliance with safety, quality and environmental standards as outlined by the applicable regulatory agencies in the countries our products are shipped to. The Company’s inventory of these specially built drums and cylinders, along with its five filling facilities, represents a significant capital investment. The Company also sells single use canisters for use in sterilizing re-usable devices typically processed in autoclave units in hospitals.

The Company’s micronutrient agricultural nutrition business sells chelated minerals primarily to producers of high value crops. The Company has a unique and patented two-step approach to solving mineral deficiency in plants to optimize health, yield and shelf-life.  First, the Company determines optimal mineral balance for plant health. The Company then has a foliar applied Metalosate® product range, utilizing patented amino acid chelate technology. Its products quickly and efficiently deliver mineral nutrients. As a result, the farmer/grower gets healthier crops that are more resistant to disease and pests, larger yields and healthier food for the consumer with extended shelf life for produce being shipped long distances.

The segment information is summarized as follows:

Business Segment Assets	September 30, 2022		December 31, 2021
Human Nutrition & Health	$	1,169,395	$	727,131
Animal Nutrition & Health	189,652		158,971
Specialty Products	169,817		184,628
Other and Unallocated (1)	104,144		128,595
Total	$	1,633,008	$	1,199,325

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Business Segment Net Sales	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Human Nutrition & Health	$	142,655	$	111,200	$	396,728	$	327,187
Animal Nutrition & Health	65,604		56,192		197,546		161,821
Specialty Products	29,641		27,615		99,622		89,645
Other and Unallocated (2)	6,367		2,862		15,931		7,237
Total	$	244,267	$	197,869	$	709,827	$	585,890

Business Segment Earnings Before Income Taxes	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Human Nutrition & Health	$	20,584	$	19,801	$	64,592	$	58,512
Animal Nutrition & Health	8,036		7,442		26,943		16,059
Specialty Products	7,105		6,455		24,785		23,373
Other and Unallocated (2)	(2,100)		(1,185)		(4,439)		(4,263)
Interest and other expense	(2,540)		(428)		(3,908)		(1,594)
Total	$	31,085	$	32,085	$	107,973	$	92,087

Depreciation/Amortization	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Human Nutrition & Health	$	9,569	$	7,472	$	24,316	$	22,486
Animal Nutrition & Health	1,681		1,932		5,010		5,512
Specialty Products	1,839		1,997		5,670		6,351
Other and Unallocated (2)	1,008		758		2,962		2,273
Total	$	14,097	$	12,159	$	37,958	$	36,622

Capital Expenditures	Nine Months Ended September 30,
	2022		2021
Human Nutrition & Health	$	22,513	$	14,492
Animal Nutrition & Health	8,748		4,557
Specialty Products	3,139		2,281
Other and Unallocated (2)	550		238
Total	$	34,950	$	21,568

(1) 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.

(2) 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: (i) Transaction and integration costs, ERP implementation costs, and unallocated legal fees totaling $1,640 and $2,816 for the three and nine months ended September 30, 2022, respectively, and $305 and $1,005 for the three and nine months ended September 30, 2021, respectively, and (ii) Unallocated amortization expense of $855 and $2,475 for the three and nine months ended September 30, 2022, respectively, and $675 and $2,024 for the three and nine months ended September 30, 2021, respectively, related to an intangible asset in connection with a company-wide ERP system implementation and capitalized loan issuance costs that were included in interest expense in the Company's condensed consolidated statements of earnings.

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NOTE 12 – 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.

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,
	2022		2021		2022		2021
Product Sales	$	233,823	$	188,573	$	677,136	$	557,683
Co-manufacturing	8,109		7,473		26,235		21,629
Consignment	1,484		829		4,064		3,260
Product Sales Revenue	243,416		196,875		707,435		582,572
Royalty Revenue	851		994		2,392		3,318
Total Revenue	$	244,267	$	197,869	$	709,827	$	585,890

The following table presents revenues disaggregated by geography, based on the shipping addresses of customers:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
United States	$	174,564	$	142,313	$	518,131	$	427,352
Foreign Countries	69,703		55,556		191,696		158,538
Total Revenue	$	244,267	$	197,869	$	709,827	$	585,890

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 and consist of three sub-streams: product sales, co-manufacturing, and consignment.

Under the co-manufacturing agreements, the Company is responsible for the manufacture of a finished good where the customer provides the majority of the raw materials.  The Company controls the manufacturing process and the ultimate end-product before it is shipped to the customer.  Based on these factors, the Company has determined that it is the principal in these agreements and therefore revenue is recognized in the gross amount of consideration the Company expects to be entitled for the goods provided.

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 HNH 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.

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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.

NOTE 13 – SUPPLEMENTAL CASH FLOW INFORMATION

Cash paid during the nine months ended September 30, 2022 and 2021 for income taxes and interest is as follows:

	Nine Months Ended September 30,
	2022		2021
Income taxes	$	26,277	$	19,563
Interest	$	6,169	$	3,492

NOTE 14 – ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The changes in accumulated other comprehensive (loss)/income were as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Net foreign currency translation adjustment	$	(34,874)	$	(3,362)	$	(44,667)	$	(7,981)
Net change of cash flow hedge (see Note 20 for further information)
Unrealized gain on cash flow hedge	564		450		3,770		1,583
Tax	(137)		(109)		(920)		(379)
Net of tax	427		341		2,850		1,204
Net change in postretirement benefit plan (see Note 15 for further information)
Amortization of prior service cost	2		18		6		55
Amortization of gain	—		(4)		—		(16)
Gain arising during the period and prior service credit	—		—		(41)		(4)
Total before tax	2		14		(35)		35
Tax	—		(3)		(24)		(9)
Net of tax and adjustment	2		11		(59)		26
Total other comprehensive (loss)/income	$	(34,445)	$	(3,010)	$	(41,876)	$	(6,751)

Included in "Net foreign currency translation adjustment" were gains of $5,065 and $10,151, related to a net investment hedge, which were net of taxes of $1,635 and $3,277 for the three and nine months ended September 30, 2022, respectively. Included in "Net foreign currency translation adjustment" were gains of $1,715 and $3,888, related to a net investment hedge, which were net of taxes of $553 and $1,243 for the three and nine months ended September 30, 2021, respectively. See Note 20, "Derivative Instruments and Hedging Activities."

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Accumulated other comprehensive (loss)/income at September 30, 2022 and December 31, 2021 consisted of the following:

	Foreign currency translation adjustment		Cash flow hedge		Postretirement benefit plan		Total
Balance December 31, 2021	$	(3,602)	$	(1,631)	$	240	$	(4,993)
Other comprehensive (loss)/income	(44,667)		2,850		(59)		(41,876)
Balance September 30, 2022	$	(48,269)	$	1,219	$	181	$	(46,869)

NOTE 15 – EMPLOYEE BENEFIT PLANS

Defined Contribution Plans

The Company sponsored two 401(k) savings plans for eligible employees, which were merged into one plan on January 1st, 2021. The remaining plan allows participants to make pretax contributions and the Company matches certain percentages of those pretax contributions. The remaining plan also has a discretionary profit sharing portion and matches 401(k) contributions with shares of the Company’s Common Stock. All amounts contributed to the plan are deposited into a trust fund administered by independent trustees. On June 21, 2022, the Company completed the acquisition of Kappa, which sponsors one defined contribution plan for its employees. In addition, on August 30, 2022, the Company completed the acquisition of Bergstrom, which sponsors one defined contribution plan for its employees. The plan allows participants to make pretax and after tax contributions. Bergstrom matches certain percentages of those contributions.

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 a plan for those named as executive officers in the Company’s proxy statement.

Net periodic benefit costs for such retirement medical plans were as follows:

	Nine Months Ended September 30,
	2022		2021
Service cost	$	59	$	65
Interest cost	20		17
Amortization of prior service cost	6		55
Amortization of gain	(1)		(18)
Net periodic benefit cost	$	84	$	119

The amounts recorded for these obligations on the Company’s condensed consolidated balance sheets as of September 30, 2022 and December 31, 2021 are $1,247 and $1,293, respectively, and are included in "Other long-term obligations." 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 Plans

On May 27, 2019, the Company acquired 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, 2022 and December 31, 2021 were $607 and $684, respectively, and were included in "Other long-term obligations."

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Net periodic benefit costs for such benefit pensions plans were as follows:

	Nine Months Ended September 30,
	2022		2021
Service cost with interest to end of year	$	30	$	52
Interest cost	12		11
Expected return on plan assets	(26)		(26)
Amortization of gain	—		2
Total net periodic benefit cost	$	16	$	39

Deferred Compensation Plan

On June 1, 2018, the Company established 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 $8,027 as of September 30, 2022, of which $8,011 was included in "Other long-term obligations" and $16 was included in "Accrued compensation and other benefits" on the Company's condensed consolidated balance sheets. The deferred compensation liability was $6,270 as of December 31, 2021, of which $6,251 was included in "Other long-term obligations" and $19 was included in "Accrued compensation and other benefits" on the Company’s condensed consolidated balance sheets. The related rabbi trust assets were $8,032 and $6,267 as of September 30, 2022 and December 31, 2021, respectively, and were included in "Other non-current assets" on the Company's condensed consolidated balance sheets.

NOTE 16 – COMMITMENTS AND CONTINGENCIES

Aggregate future minimum rental payments required under all non-cancelable operating and finance leases at September 30, 2022 are as follows:

Year
October 1, 2022 to December 31, 2022	$	1,111
2023	4,214
2024	4,053
2025	3,074
2026	2,678
2027	2,200
Thereafter	6,225
Total minimum lease payments	$	23,555

The Company’s Verona, Missouri facility, while held by a prior owner, was designated by 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 the prior owner 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 certain potential liabilities associated with the Superfund site. In February 2022, BCP Ingredients, Inc. ("BCP"), the Company subsidiary that operates the site, along with the prior owner of the site received a Special Notice Letter from EPA for the performance of a focused remedial investigation/feasibility study ("RI/FS") at the site with regard to the presence of certain contaminants at the site, focusing primarily on the presence of 1,4 dioxane and chlorobenzene. BCP and the site's prior owner are currently negotiating with the EPA and the State of Missouri with respect to a proposed Administrative Settlement Agreement and Order on Consent that defines the scope and performance of the focused RI/FS.

From time to time, the Company is involved in a variety of lawsuits, claims and proceedings, including those related to environmental matters. Subject to the uncertainties inherent in estimating future costs for contingent liabilities, except as expressly set forth in this note, management believes that any liability which may result from such matters will not have a material adverse effect on the Company’s consolidated financial position, results of operations, liquidity or cash flows.

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NOTE 17 – 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, 2022 and December 31, 2021 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 necessarily 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. The carrying value of debt approximates fair value as the interest rate is based on market and the Company’s consolidated leverage ratio.  The Company’s financial instruments also include cash equivalents, 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. Cash and cash equivalents at September 30, 2022 and December 31, 2021 includes $921 and $933 in money market funds, respectively.

Non-current assets at September 30, 2022 and December 31, 2021 includes $8,032 and $6,267, respectively, of rabbi trust funds related to the Company's deferred compensation plan. The money market and rabbi trust funds are valued using level one inputs, as defined by ASC 820, “Fair Value Measurement.”

The contingent consideration liabilities included on the balance sheet at of September 30, 2022 amount to $30,547 and were valued using level three inputs, as defined by ASC 820, "Fair Value Measurement".

The Company also has derivative financial instruments, consisting of a cross-currency swap and an interest rate swap, which are included in "Derivative assets" or "Derivative liabilities" in the Company's condensed consolidated balance sheets (see Note 20, "Derivative Instruments and Hedging Activities"). The fair values of these derivative instruments are determined based on Level 2 inputs, using significant inputs that are observable either directly or indirectly, including interest rate curves and implied volatilities. The derivative assets related to the cross-currency swap and the interest rate swap were $12,928 and $1,612 at September 30, 2022, respectively. The derivative liability related to the cross-currency swap and the interest rate swap was $500 and $2,158 at December 31, 2021, respectively.

NOTE 18 – 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 $1,188 and $3,185 for the three and nine months ended September 30, 2022, respectively, and $901 and $2,648 for the three and nine months ended September 30, 2021, respectively. The raw materials purchased and subsequently sold amounted to $11,937 and $32,158 for the three and nine months ended September 30, 2022, respectively, and $6,419 and $18,461 for the three and nine months ended September 30, 2021, 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 $9,249 and $23,971 for the three and nine months ended September 30, 2022, respectively, and $4,944 and $14,545 for the three and nine months ended September 30, 2021, respectively. At September 30, 2022 and December 31, 2021, the Company had receivables of $13,126 and $10,504, respectively, recorded in accounts receivable from St. Gabriel CC Company, LLC for services rendered and raw materials sold. The Company also had payables of $9,339 and $7,552, respectively, recorded in accounts payable for finished goods received from St. Gabriel CC Company, LLC. In addition, the Company had receivables in the amount of $164 related to non-contractual monies owed from St. Gabriel CC Company, LLC, recorded in receivables as of December 31, 2021. There were no such receivables as of September 30, 2022. 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, 2022 and December 31, 2021.

NOTE 19 – 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. As a result of electing the practical expedient within ASU 2016-02, variable lease payments are combined and recognized on the balance sheet in the event that those charges and any related increases are explicitly stated in the lease. Such payments include common area

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maintenance charges, property taxes, and insurance charges and are recorded in the right of use asset and corresponding liability when the payments are stated in the lease with (a) fixed or in-substance fixed amounts, or (b) a variable payment based on an index or rate. Due to the acquisitive nature of the Company and the potential for synergies upon integration of acquired entities, the Company determined that the reasonably certain criterion could not be met for any renewal periods beginning two years from September 30, 2022. In addition, the Company has historically not been exercising purchase options under the equipment leases as it does not make economic sense to buy the equipment. Instead, the Company has historically replaced the equipment with new leases. Therefore, the Company determined that the reasonably certain criterion could not be met as it relates to purchase options. The Company has no residual value guarantees in lease transactions.

On June 22, 2022, the Company signed a ten-year real estate sublease for approximately 40,000 square feet of office space, which will serve as the Company's corporate headquarters and a laboratory facility. The sublease will not commence until the sublandlord substantially completes its work per the sublease agreement, which will occur in the fourth quarter of 2022. The Company will recognize a right of use asset and a lease liability at the commencement date based on ASC 842, Lease Accounting. As of September 30, 2022 the Company did not record a right of use asset or lease liability on the balance sheet in connection with this lease.

The Company has not identified any embedded leases. As indicated above, 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 2022: (1) 1-2 years, 1.45% (2) 3-4 years, 2.04% (3) 5-9 years, 2.38% and (4) 10+ years, 3.10%.

In connection with its December 2019 acquisition of Zumbro River Brand, Inc., the Company assumed the finance lease commitment for a warehouse, with an expiration date of March 31, 2033. The warehouse can be purchased at a pre-determined price beginning in 2023. At September 30, 2022 and December 31, 2021, the Company had finance lease liabilities of $2,345 and $2,470, respectively, which were recorded under "Lease liabilities" (current and non-current) on the condensed consolidated balance sheets.

Right of use assets and lease liabilities at September 30, 2022 and December 31, 2021 are summarized as follows:

Right of use assets	September 30, 2022		December 31, 2021
Operating leases	$	11,617	$	6,929
Finance leases	2,202		2,359
Total	$	13,819	$	9,288

Lease liabilities - current	September 30, 2022		December 31, 2021
Operating leases	$	3,727	$	2,194
Finance leases	173		167
Total	$	3,900	$	2,361

Lease liabilities - non-current	September 30, 2022		December 31, 2021
Operating leases	$	8,069	$	4,811
Finance leases	2,172		2,303
Total	$	10,241	$	7,114

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For the three and nine months ended September 30, 2022 and 2021, 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,
	2022			2021			2022			2021
Lease Cost
Operating lease cost	$	1,190		$	788		$	2,782		$	2,274
Finance lease cost
Amortization of ROU asset	53			52			157			157
Interest on lease liabilities	30			32			91			98
Total finance lease	83			84			248			255
Total lease cost	$	1,273		$	872		$	3,030		$	2,529
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	1,164		$	761		$	2,772		$	2,249
Operating cash flows from finance leases	30			32			91			98
Financing cash flows from finance leases	42			40			125			118
	$	1,236		$	833		$	2,988		$	2,465
Right-of-use assets obtained in exchange for new operating lease liabilities, net of right-of-use assets disposed	$	2,275		$	502		$	7,552		$	2,914
Weighted-average remaining lease term - operating leases	3.83 years			4.32 years			3.83 years			4.32 years
Weighted-average remaining lease term - finance leases	10.65 years			11.67 years			10.65 years			11.67 years
Weighted-average discount rate - operating leases	2.9		%	3.7		%	2.9		%	3.7		%
Weighted-average discount rate - finance leases	5.1		%	5.1		%	5.1		%	5.1		%

Rent expense charged to operations under operating lease agreements for the three and nine months ended September 30, 2022 aggregated to approximately $1,190 and $2,782, respectively, and $788 and $2,274 for the three and nine months ended September 30, 2021, respectively.

NOTE 20 – DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

The Company is exposed to market fluctuations in interest rates as well as variability in foreign exchange rates. In May 2019, the Company entered into an interest rate swap (cash flow hedge) with JP Morgan Chase, N.A. (the "Swap Counterparty") and a cross-currency swap (net investment hedge) with JP Morgan Chase, N.A. (the "Bank Counterparty"). The Company's primary objective for holding derivative financial instruments is to manage interest rate risk and foreign currency risk.

On May 28, 2019, the Company entered into a pay-fixed (2.05%), receive-floating interest rate swap with a notional amount of $108,569 and a maturity date of June 27, 2023. The receive-floating interest rate was based on the London Interbank Offered Rate ("LIBOR") in the original trade agreement. Due to the discontinuation of LIBOR, in the third quarter of 2022, the Company modified its existing interest rate swap to reference 1-month CME Term SOFR (CME Group Benchmark Administration Limited as administrator of the forward-looking term Secured Overnight Financing Rate) in the amended trade terms. This modification was made under the relief provided for in ASC 848, "Reference Rate Reform" and therefore the derivative continues to qualify for hedge accounting. The Company's risk management objective and strategy with respect to the interest rate swap is to protect the Company against adverse fluctuations in interest rates by reducing its exposure to variability in cash flows relating to interest

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payments on a portion of its outstanding debt. The Company is meeting its objective since changes in the cash flows of the interest rate swap are expected to exactly offset the changes in the cash flows attributable to fluctuations in the contractually specified interest rate on the interest payments associated with the 2022 Credit Agreement. The net interest income related to the interest rate swap contract was $35 for the three months ended September 30, 2022. The net interest expense related to the interest rate swap contract was $842 for the nine months ended September 30, 2022, and $538 and $1,593 for the three and nine months ended September 30, 2021, respectively. The net interest income and expense were recorded in the condensed consolidated statements of earnings under "Interest expense, net."

On May 28, 2019, the Company also entered into a pay-fixed (0.00%), receive-fixed (2.05%) cross-currency swap to manage foreign exchange risk related to the Company's net investment in Chemogas. The derivative has a notional amount of $108,569, an effective date of May 28, 2019, and a maturity date of June 27, 2023. The interest income related to the cross-currency swap contract was $569 and $1,682 for the three and nine months ended September 30, 2022, and $563 and $1,682 for the three and nine months ended September 30, 2021, respectively, which were recorded in the condensed consolidated statements of earnings under "Interest expense, net."

The derivative instruments are with a single counterparty and are subject to a contractual agreement that provides for the net settlement of all contracts through a single payment in a single currency in the event of default on or termination of any one contract. As such, the derivative instruments are categorized as a master netting arrangement and presented as a net "Derivative asset" or "Derivative liability" on the condensed consolidated balance sheets.

As of September 30, 2022 and December 31, 2021, the fair value of the derivative instruments is presented as follows in the Company's condensed consolidated balance sheets:

Derivative assets (liabilities)	September 30, 2022		December 31, 2021
Interest rate swap	$	1,612	$	(2,158)
Cross-currency swap	12,928		(500)
Derivative assets (liabilities)	$	14,540	$	(2,658)

On a quarterly basis, the Company assesses whether the hedging relationship related to the interest rate swap is highly effective at achieving offsetting changes in cash flow attributable to the risk being hedged based on the following factors: (1) the key features and terms as enumerated above for the interest rate swap and hedged transactions match during the period (2) it is probable that the Swap Counterparty will not default on its obligations under the swap, and (3) the Company performs a qualitative review each quarter to assess whether the relationship qualifies for hedge accounting.

In addition, on a quarterly basis the Company assesses whether the hedging relationship related to the cross-currency swap is highly effective based on the following evaluations: (1) the Company will always have a sufficient amount of non-functional currency (EUR) net investment balance to at least meet the cross-currency notional amount until the maturity date of the hedge (2) it is probable that the Swap Counterparty will not default on its obligations under the swap, and (3) the Company performs a qualitative review each quarter to assess whether the relationship qualifies for hedge accounting.

If any mismatches arise for either the interest rate swap or cross-currency swap, the Company will perform a regression analysis to determine if the hedged transaction is highly effective. If determined not to be highly effective, the Company will discontinue hedge accounting.

As of September 30, 2022, the Company assessed the hedging relationships for the interest rate swap and cross-currency swap and determined them to be highly effective. As such, the net change in fair values of the derivative instruments was recorded in accumulated other comprehensive income.

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Losses and gains on our hedging instruments are recognized in accumulated other comprehensive income (loss) and categorized as follows for the three and nine months ended September 30, 2022 and 2021:

	Location within Statements of Comprehensive Income	Three Months Ended September 30,				Nine Months Ended September 30,
		2022		2021		2022		2021
Cash flow hedge (interest rate swap), net of tax	Unrealized gain/(loss) on cash flow hedge, net	$	427	$	341	$	2,850	$	1,204
Net investment hedge (cross-currency swap), net of tax	Net foreign currency translation adjustment	5,065		1,715		10,151		3,888
Total		$	5,492	$	2,056	$	13,001	$	5,092

On June 21, 2022, the Company completed the acquisition of Kappa (as defined in Note 2 "Significant Acquisitions"). In the process of acquiring Kappa, the Company entered into four short-term foreign currency exchange forward contracts with JP Morgan Chase, N.A to manage fluctuations in foreign currency exchange rates related to the acquisition. The Company did not designate these contracts as hedged transactions under the applicable sections of ASC Topic 815, "Derivatives and Hedging". For the nine months ended September 30, 2022, the net gains on these forward contracts of $512 were recorded in other income or loss in the condensed consolidated statements of earnings. As of September 30, 2022, the Company did not maintain any open foreign currency exchange forward contracts as all four contracts expired before June 30, 2022.

The following table summarizes the key terms of the four forward exchange contracts:.

Date entered into	Date expired on	Balchem to sell		Balchem to buy
June 15, 2022	June 21, 2022	USD	294,555	NOK	2,924,553
June 15, 2022	June 17, 2022	USD	6,436	EUR	6,180
June 15, 2022	June 21, 2022	USD	16,640	EUR	15,972
June 15, 2022	June 21, 2022	EUR	15,972	NOK	165,210

Item 2.    Management's Discussion and Analysis of Financial Condition and Results of Operations (All amounts in thousands, except share and per share data)

This report contains forward-looking statements, within the meaning of Section 21E of the Exchange Act, which reflect our expectation or belief concerning future events that involve risks and uncertainties. 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, 2021 and Part II, Item 1A of the Company's Form 10-Q for the quarterly period ended June 30, 2022 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.

Overview

We develop, manufacture, distribute and market specialty performance ingredients and products for the nutritional, food, pharmaceutical, animal health, medical device sterilization, 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, as more fully described in Note 11 of the condensed consolidated financial statements. 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 we proudly support the Ten Principles of the United Nations Global Compact on human rights, labor, environment and anti-corruption. In January 2022, Balchem was named one of America’s Most Responsible Companies by Newsweek magazine for the second consecutive year. This list, compiled by Newsweek in partnership with Statista Inc., recognizes the most responsible companies in the U.S. across a variety of industries, and is based on publicly available environmental, social and governance (ESG) data. Our Sustainability Framework focuses on the most critical ESG topics relevant to our business and stakeholders. We are very proud of our ESG accomplishments to date and are pleased with the recognition by

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Newsweek. Balchem 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.

As of September 30, 2022, we employed approximately 1,382 full time employees worldwide. Although we are facing challenging labor markets, we believe that we have been successful in attracting skilled and experienced personnel in a competitive environment and that our human capital resources are adequate to perform all business functions. In addition, we continue to enhance technology in order to optimize productivity and performance.

Acquisition of Bergstrom

On August 30, 2022, we completed the acquisition of Bergstom (as defined in Note 2 "Significant Acquisitions"), a leading science-based manufacturer of MSM, based in Vancouver, Washington. Details related to the Bergstrom acquisition are disclosed in Note 2, "Significant Acquisitions". The acquisition provides a synergistic scientific advantage in the Company's key strategic therapeutic focus areas such as longevity and performance and is a strong fit with the Company's specialty, science-backed mineral products, which should ultimately lead to growth for the Company's portfolios within the Human Nutrition & Health and Animal nutrition & Health segments.

Acquisition of Kappa

On June 21, 2022, we completed the acquisition of Kappa (as defined in Note 2 "Significant Acquisitions"), a leading science-based manufacturer of specialty Vitamin K2 for the human nutrition industry, headquartered in Oslo, Norway. Details related to the Kappa acquisition are disclosed in Note 2, "Significant Acquisitions". The acquisition strengthens our scientific and technical expertise, geographic reach, and marketplace leadership, which should ultimately lead to accelerated growth for the Company's portfolios within the Human Nutrition & Health segment.

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, 2022 and 2021:

Business Segment Net Sales	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Human Nutrition & Health	$	142,655	$	111,200	$	396,728	$	327,187
Animal Nutrition & Health	65,604		56,192		197,546		161,821
Specialty Products	29,641		27,615		99,622		89,645
Other and Unallocated (1)	6,367		2,862		15,931		7,237
Total	$	244,267	$	197,869	$	709,827	$	585,890

Business Segment Earnings From Operations	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Human Nutrition & Health	$	20,584	$	19,801	$	64,592	$	58,512
Animal Nutrition & Health	8,036		7,442		26,943		16,059
Specialty Products	7,105		6,455		24,785		23,373
Other and Unallocated (1)	(2,100)		(1,185)		(4,439)		(4,263)
Total	$	33,625	$	32,513	$	111,881	$	93,681

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(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: (i) Transaction and integration costs, ERP implementation costs, and unallocated legal fees totaling $1,640 and $2,816 for the three and nine months ended September 30, 2022, respectively, and $305 and $1,005 for the three and nine months ended September 30, 2021, respectively, and (ii) Unallocated amortization expense of $734 and $2,213 for the three and nine months ended September 30, 2022, respectively, and $604 and $1,812 for the three and nine months ended September 30, 2021, respectively, related to an intangible asset in connection with a company-wide ERP system implementation.

RESULTS OF OPERATIONS

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

Three months ended September 30, 2022 compared to three months ended September 30, 2021.

Net Earnings

	Three Months Ended September 30,				Increase (Decrease)
(in thousands)	2022		2021				% Change
Net sales	$	244,267	$	197,869	$	46,398	23.4	%
Gross margin	68,430		60,934		7,496		12.3	%
Operating expenses	34,805		28,421		6,384		22.5	%
Earnings from operations	33,625		32,513		1,112		3.4	%
Other (income) expense, net	2,540		428		2,112		493.5	%
Income tax expense	5,836		7,072		(1,236)		(17.5)	%
Net earnings	$	25,249	$	25,013	$	236	0.9	%

Net Sales

	Three Months Ended September 30,				Increase (Decrease)
(in thousands)	2022		2021				% Change
Human Nutrition & Health	$	142,655	$	111,200	$	31,455	28.3	%
Animal Nutrition & Health	65,604		56,192		9,412		16.7	%
Specialty Products	29,641		27,615		2,026		7.3	%
Other	6,367		2,862		3,505		122.5	%
Total	$	244,267	$	197,869	$	46,398	23.4	%

•The increase in net sales within the Human Nutrition & Health segment for the third quarter of 2022 as compared to the third quarter of 2021 was driven by sales growth within food and beverage markets, the contribution from recent acquisitions, as well as sales growth within the minerals and nutrients business, partially offset by an unfavorable impact related to changes in foreign currency exchange rates. Total sales for this segment grew 28.3%, with average selling prices contributing 22.0%, volume and mix contributing 6.7%, and the change in foreign currency exchange rates contributing -0.4%.

•The increase in net sales within the Animal Nutrition & Health segment for the third quarter of 2022 compared to the third quarter of 2021 was the result of higher sales in both monogastric and ruminant species markets, the contribution from the recent acquisition of Bergstrom which included a small Animal Nutrition business, partially offset by an unfavorable impact related to changes in foreign currency exchange rates. Total sales for this segment grew 16.7%, with average selling prices contributing 24.1%, volume and mix contributing -3.0%, and the change in foreign currency exchange rates contributing -4.3%.

•The increase in Specialty Products segment sales for the third quarter of 2022 compared to 2021 was due to higher sales of products in the performance gases business, partially offset by lower plant nutrition sales, and an unfavorable impact related to changes in foreign currency exchange rates. Total sales for this segment grew 7.3% with average selling prices

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contributing 18.0%, the change in foreign currency exchange rates contributing -3.8%, and volume and mix contributing -6.9%.

•Sales relating to Other increased from the prior year due to higher demand.

•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)	2022			2021					% Change
Gross margin	$	68,430		$	60,934		$	7,496	12.3	%
% of net sales	28.0		%	30.8		%

Gross margin dollars increased in the third quarter of 2022 compared to the third quarter of 2021 due to the aforementioned higher sales of $46,398, partially offset by an increase in cost of goods sold of $38,902. The 28.4% increase in cost of goods sold was driven mainly by the higher sales as well as the significant inflation of manufacturing input costs, primarily related to raw materials, and the timing of insurance proceeds received in the prior year.

Operating Expenses

	Three Months Ended September 30,						Increase (Decrease)
(in thousands)	2022			2021					% Change
Operating expenses	$	34,805		$	28,421		$	6,384	22.5	%
% of net sales	14.2		%	14.4		%

The increase in operating expenses was primarily due to incremental operating expenses related to acquisitions of $4,193, an increase in outside services of $1,588, and additional amortization of $1,426, partially offset by lower compensation-related costs of 2,148.

Earnings from Operations

	Three Months Ended September 30,						Increase (Decrease)
(in thousands)	2022			2021					% Change
Human Nutrition & Health	$	20,584		$	19,801		$	783	4.0	%
Animal Nutrition & Health	8,036			7,442			594		8.0	%
Specialty Products	7,105			6,455			650		10.1	%
Other and unallocated	(2,100)			(1,185)			(915)		(77.2)	%
Earnings from operations	$	33,625		$	32,513		$	1,112	3.4	%
% of net sales (operating margin)	13.8		%	16.4		%

•Earnings from operations for the Human Nutrition & Health segment increased primarily due to the aforementioned higher sales and higher average selling prices, partially offset by higher manufacturing input costs, higher amortization and operating expenses related to the recent acquisitions, and the timing of an insurance reimbursement received in the prior year. Gross margin as a percentage of sales decreased by 207 basis points, due to a significant increase in certain manufacturing input costs, largely related to raw materials, and the timing of an insurance reimbursement received in the prior year. Additionally, total operating expenses for this segment increased by $5,857, primarily due to incremental operating expenses related to acquisitions of $3,677 and additional amortization of $1,449.

•Animal Nutrition & Health segment earnings from operations increased primarily due to the aforementioned higher sales and higher average selling prices, partially offset by increases in manufacturing input costs and distribution costs. Gross margin

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as a percentage of sales decreased by 408 basis points, due to a significant increase in certain manufacturing input costs, largely related to raw materials. Additionally, operating expenses for this segment decreased by $973, which was largely related to a decrease in compensation-related costs.

•The increase in earnings from operations for the Specialty Products segment was primarily due to the aforementioned higher sales, partially offset by a 109 basis point decrease in gross margin as a percentage of sales, due to a significant increase in certain manufacturing input costs, largely related to raw materials. Total operating expenses for this segment remained flat.

•The increase in Other and unallocated was primarily driven by the aforementioned higher sales, partially offset by an increase in transaction costs, primarily related to the acquisitions.

Other Expenses (Income)

	Three Months Ended September 30,				Increase (Decrease)
(in thousands)	2022		2021				% Change
Interest expense	$	3,642	$	556	$	3,086	555.0	%
Other, net	(1,102)		(128)		(974)		760.9	%
	$	2,540	$	428	$	2,112	493.5	%

Interest expense for the three months ended September 30, 2022 and 2021 was primarily related to outstanding borrowings under the 2022 Credit Agreement.  The increase in interest expense is due to the additional borrowings in connection with the acquisitions and rising interest rates.

Income Tax Expense

	Three Months Ended September 30,						Increase (Decrease)
(in thousands)	2022			2021					% Change
Income tax expense	$	5,836		$	7,072		$	(1,236)	(17.5)	%
Effective tax rate	18.8		%	22.0		%

The decrease in the effective tax rate was primarily due to a favorable provision to return adjustment related to an increase in certain tax credits and deductions.

Nine months ended September 30, 2022 compared to nine months ended September 30, 2021.

Net Earnings

	Nine Months Ended September 30,				Increase (Decrease)
(in thousands)	2022		2021				% Change
Net sales	$	709,827	$	585,890	$	123,937	21.2	%
Gross margin	211,812		179,108		32,704		18.3	%
Operating expenses	99,931		85,427		14,504		17.0	%
Earnings from operations	111,881		93,681		18,200		19.4	%
Other expense, net	3,908		1,594		2,314		145.2	%
Income tax expense	24,012		20,932		3,080		14.7	%
Net earnings	$	83,961	$	71,155	$	12,806	18.0	%

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Net Sales

	Nine Months Ended September 30,				Increase (Decrease)
(in thousands)	2022		2021				% Change
Human Nutrition & Health	$	396,728	$	327,187	$	69,541	21.3	%
Animal Nutrition & Health	197,546		161,821		35,725		22.1	%
Specialty Products	99,622		89,645		9,977		11.1	%
Other	15,931		7,237		8,694		120.1	%
Total	$	709,827	$	585,890	$	123,937	21.2	%

•The increase in net sales within the Human Nutrition & Health segment for the nine months ended September 30, 2022 as compared to 2021 was primarily attributed to sales growth within food and beverage markets, the contribution from recent acquisitions, as well as higher sales within the minerals and nutrients business, partially offset by an unfavorable impact related to change in foreign currency exchange rates. Total sales for this segment grew 21.3%, with average selling prices contributing 18.2%, volume and mix contributing 3.4%, 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, 2022 compared to 2021 was primarily the result of higher sales in monogastric and ruminant species markets, partially offset by an unfavorable impact related to changes in foreign currency exchange rates. Total sales for this segment grew 22.1%, with average selling prices contributing 28.0%, volume and mix contributing -2.6%, and the change in foreign currency exchange rates contributing -3.3%.

•The increase in Specialty Products segment sales for the nine months ended September 30, 2022 compared to 2021 was primarily due to higher sales of products in the medical device sterilization market, partially offset by lower plant nutrition sales, and an unfavorable impact related to changes in foreign currency exchange rates. Total sales for this segment grew 11.1%, with average selling prices contributing 17.1%, volume and mix contributing -3.2%, and the change in foreign currency exchange rates contributing -2.7%.

•Sales relating to Other increased from the prior year due to higher demand.

Gross Margin

	Nine Months Ended September 30,						Increase (Decrease)
(in thousands)	2022			2021					% Change
Gross margin	$	211,812		$	179,108		$	32,704	18.3	%
% of net sales	29.8		%	30.6		%

Gross margin dollars increased for the nine months ended September 30, 2022 compared to 2021 due to the aforementioned higher sales of $123,937, partially offset by an increase in cost of goods sold of $91,233. The 22.4% increase in cost of goods sold was mainly driven by the higher sales, significant inflation of manufacturing input costs, primarily related to raw materials, and the timing of an insurance reimbursement, partially offset by the timing of costs associated with a flash flood event in the prior year.

Operating Expenses

	Nine Months Ended September 30,						Increase (Decrease)
(in thousands)	2022			2021					% Change
Operating expenses	$	99,931		$	85,427		$	14,504	17.0	%
% of net sales	14.1		%	14.6		%

The increase in operating expenses was primarily due to an increase in outside services of $4,445, incremental operating expenses related to the acquisitions of $3,717, higher compensation-related costs of $2,008, and transaction costs of $1,934.

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Earnings from Operations

	Nine Months Ended September 30,						Increase (Decrease)
(in thousands)	2022			2021					% Change
Human Nutrition & Health	$	64,592		$	58,512		$	6,080	10.4	%
Animal Nutrition & Health	26,943			16,059			10,884		67.8	%
Specialty Products	24,785			23,373			1,412		6.0	%
Other and unallocated	(4,439)			(4,263)			(176)		(4.1)	%
Earnings from operations	$	111,881		$	93,681		$	18,200	19.4	%
% of net sales (operating margin)	15.8		%	16.0		%

•Earnings from operations for the Human Nutrition & Health segment increased primarily due to the aforementioned higher sales, partially offset by a 139 basis point decrease in gross margin as a percentage of sales, primarily due to a significant increase in certain manufacturing input costs, largely related to raw materials. Additionally, operating expenses for this segment increased by $9,964, primarily due to incremental operating expenses related to the acquisitions of $3,674, outside services of $2,572, and higher compensation-related costs of $1,062.

•Animal Nutrition & Health segment earnings from operations increased primarily due to the aforementioned higher sales and a 207 basis point increase in gross margin as a percentage of sales primarily related to the timing of costs associated with the recovery of a flash flood event in the prior year, partially offset by a significant increase in certain manufacturing input costs, largely related to raw materials. Additionally, operating expenses for this segment increased by $786, primarily related to higher outside services of $849.

•The increase in earnings from operations for the Specialty Products segment was primarily due to the aforementioned higher sales, partially offset by a 208 basis point decrease in gross margin as a percentage of sales, primarily due to a significant increase in certain manufacturing input costs, largely related to raw materials. Additionally, operating expenses for this segment increased by $1,315, primarily related to higher compensation-related costs.

•Earnings from operations relating to Other increased from the prior year primarily due to the aforementioned higher sales, partially offset by an increase in transaction costs, mainly related to the acquisitions.

Other Expenses (Income)

	Nine Months Ended September 30,				Increase (Decrease)
(in thousands)	2022		2021				% Change
Interest expense	$	5,147	$	1,889	$	3,258	172.5	%
Other, net	(1,239)		(295)		(944)		320.0	%
	$	3,908	$	1,594	$	2,314	145.2	%

Interest expense for the nine months ended September 30, 2022 and 2021 was primarily related to outstanding borrowings under the 2022 Credit Agreement.  The increase in interest expense is due to the additional borrowings in connection with the acquisitions and rising interest rates.

Income Tax Expense

	Nine Months Ended September 30,						Increase (Decrease)
(in thousands)	2022			2021					% Change
Income tax expense	$	24,012		$	20,932		$	3,080	14.7	%
Effective tax rate	22.2		%	22.7		%

The decrease in the effective tax rate was primarily due to a favorable provision to return adjustment related to an increase in certain tax credits and deductions, which was offset by a change in mix of earnings in higher taxing jurisdictions.

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FINANCIAL CONDITION

LIQUIDITY AND CAPITAL RESOURCES

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

In June 2022, we drew down $345,000 from our revolving credit facility to fund the acquisition of Kappa. In connection with this transaction, the seller has an opportunity to receive an additional payment in 2024 if certain financial performance targets and other metrics are met, and therefore we recorded a contingent consideration liability of kr245,000 (translated to $22,712 as of September 30, 2022) as part of the consideration given in the second quarter of 2022 (see Note 2, "Significant Acquisitions"). In August 2022, we drew down an additional $70,000 from our revolving credit facility to fund the acquisition of Bergstrom. In connection with this transaction, the seller has an opportunity to receive an additional payment if certain financial performance targets and other metrics are met, and therefore we recorded a contingent consideration liability of $7,835 as part of the consideration given in the third quarter of 2022 (see Note 2, "Significant Acquisitions"). Excluding the events previously mentioned, there were no other material changes during the nine months ended September 30, 2022 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, 2021. 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. On July 27, 2022, we entered into an Amended and Restated Credit Agreement with a bank syndicate providing for a revolving loan of $550,000, due July 27, 2027. The revolving loan proceeds were used to pay down the existing debt under the 2018 Credit Agreement and may be used for working capital, letters of credit, and other corporate purposes. 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 decreased to $56,489 at September 30, 2022 from $103,239 at December 31, 2021. At September 30, 2022, the Company had $39,191 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 $226,026 at September 30, 2022 as compared to $178,430 at December 31, 2021, an increase of $47,596. Working capital reflects the payment of the 2021 declared dividend in 2022 of $20,708, payments on the revolving loan and acquired debt of $111,782, and capital expenditures and intangible assets acquired of $35,793.

	Nine Months Ended September 30,				Increase (Decrease)
(in thousands)	2022		2021				% Change
Cash flows provided by operating activities	$	96,881	$	116,023	$	(19,142)	(16.5)	%
Cash flows used in investing activities	(401,525)		(21,119)		(380,406)		(1801.3)	%
Cash flows provided by (used in) financing activities	268,080		(86,233)		354,313		410.9	%

Operating Activities

The decrease in cash flows from operating activities was primarily driven by changes in working capital and the timing of increased sales, restocking of inventory, and payments to suppliers.

Investing Activities

As previously noted, on June 21, 2022, we completed the acquisition of Kappa, a leading science-based manufacturer of specialty vitamin K2 for the human nutrition industry, headquartered in Oslo, Norway. On August 30, 2022, we completed another acquisition of Bergstrom, a leading science-based manufacturer of MSM, based in Vancouver, Washington. Cash paid for these acquisitions, net of cash acquired, amounted to $365,780.

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 $35,793 and $22,391 for the nine months ended September 30, 2022 and 2021, respectively.

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Financing Activities

As previously noted, the acquisition of Kappa was primarily funded through the 2018 Credit Agreement and the acquisition of Bergstrom was funded through the 2022 Credit Agreement. We borrowed $435,000 against the revolving loan and made total loan payments of $81,000 during the nine months ended September 30, 2022, resulting in $87,431 available under the 2022 Credit Agreement as of September 30, 2022. In addition, we made payments of $30,782 on the acquired debt related to the acquisitions.

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 3,069,266 shares have been purchased.  We repurchase shares from employees in connection with settlement of transactions under our equity incentive plans. We also 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.

Proceeds from stock options exercised were $2,172 and $6,351 for the nine months ended September 30, 2022 and 2021, respectively.  Dividend payments were $20,708 and $18,704 for the nine months ended September 30, 2022 and 2021, respectively.

Other Matters Impacting Liquidity

We currently provide postretirement benefits in the form of two retirement medical plans, as discussed in Note 15 – Employee Benefit Plans.  The liability recorded in "Other long-term liabilities" on the condensed consolidated balance sheets as of September 30, 2022 and December 31, 2021 was $1,247 and $1,293, respectively, and the plans are not funded.  Historical cash payments made under these plans have typically been less than $100 per year. We do not anticipate any changes to the payments made in the current year for the plans.

On June 1, 2018, we established 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, which are subject to additional risk of loss in the event of bankruptcy or insolvency of the Company.  The deferred compensation liability as of September 30, 2022 and December 31, 2021 was $8,011 and $6,251, respectively, and was included in "other long-term obligations" on our balance sheet. The related rabbi trust assets were $8,032 and $6,267 as of September 30, 2022 and December 31, 2021, respectively, and were included in "other non-current assets" on the condensed consolidated balance sheets.

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 amount recorded for these obligations on our balance sheets as of September 30, 2022 and December 31, 2021 were $607 and $684, respectively, and were included in "other long-term obligations."

Critical Accounting Policies

There were no changes to the Company's Critical Accounting Policies, as described in its December 31, 2021 Annual Report on Form 10-K, during the nine months ended September 30, 2022.

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, 2022. Refer to Note 18, "Related Party Transactions".

Item 3.    Quantitative and Qualitative Disclosures About Market Risk

Our cash and cash equivalents are held primarily in certificates of deposit and money market investment funds. In the second quarter of 2019, we entered into an interest rate swap and cross-currency swap for hedging purposes. Refer to details noted above (see Note 20, "Derivative Instruments and Hedging Activities"). Additionally, as of September 30, 2022, our borrowings were under a revolving loan bearing interest at a fluctuating rate as defined by the 2022 Credit Agreement plus an applicable rate. 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, 2022, would result in an increase or decrease in annual interest expense and a corresponding reduction or increase in cash flow of approximately $4,626. 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. Additionally, as disclosed below in Part II, Item 1A, we are monitoring market risks related to the current COVID-19 pandemic very closely.

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Interest Rate Risk

We have exposure to market risk for changes in interest rates, including the interest rate relating to the 2022 Credit Agreement. In the second quarter of 2019, we began to manage our interest rate exposure through the use of derivative instruments. All of our derivative instruments are utilized for risk management purposes, and are not used for trading or speculative purposes. We have hedged a portion of our floating interest rate exposure using an interest rate swap (see Note 20, "Derivative Instruments and Hedging Activities"). As of September 30, 2022, the notional amount of our outstanding interest rate swap was $108,569.

Foreign Currency Exchange Risk

The financial condition and results of operations of our foreign subsidiaries are reported in Euros, Canadian Dollars, Malaysian Ringgits, Singapore Dollars, Australian Dollars, Philippine Pesos, and Norwegian Kroner, 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. In the second quarter of 2019, we entered into a cross-currency swap, with a notional amount of $108,569, which we designated as a hedge of our net investment in Chemogas (see Note 20, "Derivative Instruments and Hedging Activities").

On June 21, 2022, the Company completed the acquisition of Kappa. In the process of acquiring Kappa, the Company entered into four short-term foreign currency exchange forward contracts with JP Morgan Chase, N.A to manage our exposure related to changes in foreign currency exchange rates in connection with the Kappa acquisition. These contracts did not qualify for hedge accounting under the applicable sections of ASC Topic 815. For the nine months ended September 30, 2022, the net gains on these forward contracts amounted to $512 and were recorded in "other (income) expense, net" on the condensed consolidated statements of earnings. As of September 30, 2022, the Company did not maintain any open foreign currency exchange forward contracts as all four contracts were settled as of June 30, 2022.

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, 2022. 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, 2022.

(b)Changes in Internal Controls

Except with respect to the acquisitions of Kappa and Bergstrom described below, 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, 2022, that have materially affected, or are reasonably likely to materially affect, internal control over financial reporting.

On June 21, 2022, we completed the acquisition of Kappa (See Note 2, "Significant Acquisitions"). We are integrating Kappa into our overall internal control over financial reporting process and expect to exclude the business from our assessment of internal control over financial reporting as of December 31, 2022. Total assets of the Kappa business represented approximately 19.6% of our consolidated total assets as of September 30, 2022.

On August 30, 2022, we completed the acquisition of Bergstrom (See Note 2, "Significant Acquisitions"). We are integrating Bergstrom into our overall internal control over financial reporting process and expect to exclude the business from our assessment of internal control over financial reporting as of December 31, 2022. Total assets of the Bergstrom business represented approximately 4.9% of our consolidated total assets as of September 30, 2022.

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. In our opinion, pending legal matters are not expected 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 to our Risk Factors contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, and Part II, Item 1A of the Company’s Form 10-Q for the quarterly period ended June 30, 2022. For further discussion of our Risk Factors, refer to the “Risk Factors” disclosures contained in our Annual Report on Form 10-K for the year ended December 31, 2021, and Part II, Item 1A of the Company’s Form 10-Q for the quarterly period ended June 30, 2022.

Item 2C.     Issuer Purchase of Equity Securities

The following table summarizes the share repurchase activity for the nine months ended September 30, 2022:

	Total Number of Shares Purchased (1)	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Programs (1)	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs
January 1-31, 2022	88,154	$	147.03	88,154	$	125,951,395
February 1-28, 2022	57,531	$	139.75	57,531	$	111,675,367
March 1-31, 2022	100,000	$	135.98	100,000	$	95,065,135
First Quarter	245,685			245,685
April 1-30, 2022	245	$	125.36	245	$	87,609,591
May 1-31, 2022	4,550	$	120.01	4,550	$	83,324,693
June 1-30, 2022	181	$	125.87	181	$	83,370,521
Second Quarter	4,976			4,976
July 1-31, 2022	—	$	—	—	$	83,370,521
August 1-31, 2022	361	$	127.77	361	$	88,643,248
September 1-30, 2022	—	$	—	—	$	88,643,248
Third Quarter	361			361
Total	251,022			251,022
(1) 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 3,069,266 shares have been purchased. There is no expiration for this program.

39

Item 6.    Exhibits

Exhibit Number	Description
Exhibit 10.1	Theodore L. Harris Stock Option Grant Agreement, dated September 15, 2022
Exhibit 31.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(a).
Exhibit 31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(a).
Exhibit 32.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(b) and Section 1350 of Chapter 63 of Title 18 of the United States Code.
Exhibit 32.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(b) and Section 1350 of Chapter 63 of Title 18 of the United States Code.
101.INS	XBRL 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.SCH	Inline XBRL Taxonomy Extension Schema Document
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

40

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: November 4, 2022

41

EX-10.1

Exhibit 10.1

BALCHEM CORPORATION

STOCK OPTION GRANT AGREEMENT

2017 Omnibus Incentive Plan

This STOCK OPTION GRANT AGREEMENT (the “Grant”), dated as of September 15, 2022 is between BALCHEM CORPORATION, a Maryland corporation (the “Company”) and Theodore L. Harris (“Optionee”).

W I T N E S S E T H:

1.Grant of Options. Pursuant to the provisions of the Company’s 2017 Omnibus Incentive Plan, as the same may be amended from time to time (the “Plan”), the Company has on the date set forth on Exhibit A hereto (such date, the “Grant Date”) granted to Optionee, subject to the terms and conditions of the Plan and subject further to the terms and conditions herein set forth, the right and option to purchase from the Company the number of shares of the Company’s common stock par value six and two-thirds cents ($0.06 2/3) per share (“Stock”) set forth in Exhibit A at the price per share set forth in Exhibit A (the stock options granted hereby being referred to as the “Option” or the “Options”). The Option is a non-qualified stock option. Any capitalized terms used in this Grant and not defined herein shall have the meanings set forth in the Plan.

2.Terms and Conditions. The term of the Option shall be for the period specified in Exhibit A. The Option shall be exercisable on the date or dates set forth, or upon satisfaction of the conditions set forth, in Exhibit A, provided that (unless expressly provided otherwise in Section 4 hereof or in Exhibit A) Optionee is an employee of the Company or any other member of the Group on each such date. To the extent the Option has become exercisable, it may be exercised, prior to the end of the Option term, at any time in whole or in part and from time to time, subject to earlier termination as provided in Sections 3 and 4 of this Grant, unless otherwise expressly provided in Exhibit A. Unless otherwise provided in Exhibit A, the Option may not be exercised (a) as to fewer than 100 shares at any one time (or for the remaining shares then purchasable under the Option, if fewer than 100 shares), and (b) until fulfillment of any conditions precedent set forth in Section 7 hereof. The holder of any Option shall not have any rights as a stockholder with respect to the Stock issuable upon exercise of an Option until certificates for such Stock shall have been issued and delivered to him or her after the exercise of the Option.

3.Termination of Employment. In the event that the employment of Optionee with the Company or other member of the Group shall be terminated (otherwise than by reason of (i) death, (ii) Disability (as such term is defined in Section 4 hereof), (iii) for Cause, or (iv) Change in Control), the Option shall be exercisable (to the extent that Optionee shall have been entitled to do so at the termination of his or her employment) at any time prior to the expiration of the period of sixty (60) days after such termination, but in no event later than the specified expiration date of the Option, except as may be expressly provided in Exhibit A. Notwithstanding anything herein to the contrary, in the event that the employment of Optionee shall be terminated for

Cause, all vested and unvested portions of the Option shall be immediately forfeited by Optionee without any consideration.

This Grant does not constitute an employment contract. Nothing in the Plan or in this Grant shall confer upon Optionee any right to be continued in the employ of the Company or any other member of the Group for the length of any vesting schedule or for any portion thereof or for any other period of time, or interfere in any way with the right of the Company or any other member of the Group to terminate or otherwise modify the terms of Optionee’s employment; provided, that a change in Optionee’s duties or position shall not affect Optionee’s Option so long as Optionee is still an employee of the Company or any other member of the Group.

4.Death, Disability, or Change in Control.

(a)Death. If Optionee ceases to be employed by the Company and all other members of the Group by reason of his or her death, any unvested portions of the Option shall become fully exercisable on a pro-rata basis upon such termination of employment and may be exercised by Optionee’s estate, personal representative or beneficiary who has acquired the Option by will or by the laws of descent and distribution, at any time prior to the earlier of the specified expiration date of the Option or 120 days after the date of Optionee’s death, except as may otherwise be provided in Exhibit A.

(b)Disability. If Optionee ceases to be employed by the Company and all other members of the Group by reason of his or her Disability, any unvested portions of the Option shall become fully exercisable on a pro-rata basis upon such termination of employment. Except as otherwise provided in Exhibit A, any unexercised portion of the Option may be exercised by Optionee (or in the event of death, by Optionee’s estate, personal representative of beneficiary who has acquired the Option by will or by the laws of descent and distribution) at the earlier of the specified expiration date of the Option or 120 days after the date of the Optionee’s termination of employment. For the purposes of the Grant, the term “Disability” shall mean “permanent and total disability” as defined in Section 22(e)(3) of the Code or successor statute.

(c)Change in Control.    In the event of a termination without cause or for good reason in connection with a Change in Control (as defined in the Plan), any unvested portions of the Option shall become fully exercisable upon such termination of employment.

5.Transferability of Option. The Option shall not be transferable otherwise than by will or the laws of descent and distribution, except as, and then only to the extent, if any, provided in Exhibit A hereto or as subsequently approved by the Board or the Committee.

6.Adjustments Upon Changes in Capitalization. In the event of changes in the outstanding stock of the Company by reason of stock dividends, stock splits, recapitalizations, mergers, consolidations, combinations or exchanges of shares, separations, reorganizations or liquidations, the number and class of shares subject to the Option shall be correspondingly adjusted as provided in the Plan.

7.Conditions Precedent to Exercise of Option. In the event that the exercise of the Option or the issuance and delivery of the shares hereunder shall be subject to, or shall require, any prior exchange listing, prior approval of the stockholders of the Company, or other prior condition or act, pursuant to the applicable laws, regulations or policies of any stock exchange, federal or local government or its agencies or representatives, and/or pursuant to the Plan, then the Option shall not be deemed to be exercisable under this Grant until such condition is satisfied. The Company shall not be liable in any manner to Optionee or any other party for any

2

failure or delay by the Company on its part to fulfill any such condition, and any such failure or delay shall not extend the term of the Option.

8.Methods of Exercising Option. Subject to the terms and conditions of this Grant, the Option may be exercised by delivering a signed, completed exercise notice in the form of Exhibit B hereto, as the same may be modified from time to time by determination of the Company in its discretion, to the Company, at its office at 5 Paragon Drive, Montvale, New Jersey 07645 or such other address as the Company may designate. Such notice shall (i) identify the Option to which it applies, (ii) state the election to exercise the Option, (iii) designate the number of shares in respect of which the Option is being exercised, and (iv) be signed by the person or persons so exercising the Option, and shall otherwise be in such form and substance as the Company may require. Such notice shall be accompanied by payment of the full purchase price of such shares. The Company shall deliver to Optionee, at such address as is provided in the notice, a certificate or certificates representing such shares as soon as practicable after the notice shall be received and all conditions to the exercise of the Option are fulfilled and satisfied. Payment of such purchase price shall be made (a) in United States dollars in cash or by check, or

(b) through delivery of shares of Stock previously owned by Optionee for at least six months and having a Fair Market Value equal as of the date of the exercise to the cash exercise price of the Option, or (c) by any combination of the above. Notwithstanding the foregoing, Optionee may not pay any part of the exercise price hereof by transferring Stock to the Company if such Stock is not fully vested or is subject to a substantial risk of forfeiture within the meaning of Section 83 of the Code. The certificate or certificates for the shares as to which the Option shall have been so exercised shall be issued in the name of the person or persons so exercising the Option (or, if the Option shall be exercised by Optionee and if Optionee shall so request in the notice exercising the Option, the certificate shall be issued in the name of Optionee and another person

3

jointly, with right of survivorship) and shall be delivered as provided above to or upon the written order of the person or persons exercising the Option. In the event the Option shall be exercised by any person or persons other than Optionee, such notice shall be accompanied by appropriate proof of the right of such person or persons to exercise the Option. At the election of the Company, such certificate may bear such legends regarding the limited transferability of the shares under applicable securities laws as the Company may require. All shares that shall be purchased upon the exercise of the Option as provided herein shall be fully paid and non- assessable.

9.Compliance with Law. The exercise of the Option and the issuance and transfer of shares of Stock shall be subject to compliance by the Company and Optionee with all applicable requirements of federal and state securities laws and with all applicable requirements of any stock exchange on which the Company’s Stock may be listed. No share of Stock shall be issued pursuant to the Option unless and until any then applicable requirements of state or federal laws and regulatory agencies have been fully complied with to the satisfaction of the Company and its counsel. Optionee understands that the Company is under no obligation to register the shares with the Securities and Exchange Commission, any state securities commission or any stock exchange to effect such compliance.

10.Capital Changes and Business Successions. The Plan contains provisions covering the treatment of the Option in a number of contingencies such as stock splits and mergers. Provisions in the Plan for adjustment with respect to stock subject to options and the related provisions with respect to successors to the business of the Company are hereby made applicable hereunder and are incorporated herein by reference. In general, Optionee should not assume that the Option necessarily would survive the acquisition of the Company.

11.Withholding Taxes. Optionee shall be required to remit to the Company, and the Company shall have the right to deduct from any compensation payable to Optionee, the amount sufficient to satisfy any federal, state or local withholding tax liability in respect of the Options and to take all such other action as the Committee deems necessary to satisfy all obligations for payment of such withholding taxes. To the extent permitted by the Committee, and subject to any terms and conditions imposed by the Committee, Optionee may elect to have the Company’s withholding obligation for federal, state and local taxes, including payroll taxes, with respect to the Options satisfied (i) by having the Company withhold from the shares otherwise deliverable to Optionee shares of Stock having a value equal to the amount of such withholding obligation with respect to the Stock or (ii) by delivering to the Company shares of unrestricted Stock. Alternatively, the Committee may require that a portion of shares of Stock otherwise deliverable be withheld and applied to satisfy the statutory withholding obligation with respect to the Options.

12.Terms of Plan Control. The Option granted hereunder is granted pursuant to the provisions of the Plan, the receipt of a copy of which Optionee hereby acknowledges. Nothing contained in this Grant shall in any way be deemed to alter or modify the provisions of the Plan and no act of the Company or its directors, officers or employees shall be deemed to be a waiver or modification of any provision of the Plan. The provisions of the Plan shall in all respects govern the Option. The Committee shall have authority in its discretion, but subject to the

4

express provisions of the Plan, to interpret the Plan and this Grant; to prescribe, amend and rescind rules and regulations relating to the Plan and the Option; and to make all other determinations deemed necessary or advisable for the administration of the Plan or the Option. The Committee’s determination on the foregoing matters shall be conclusive.

13.Governing Law.    This Grant shall be construed, interpreted and enforced in accordance with the laws of the State of New York.    The Company and the Optionee hereby

(a)agree that any action, suit or other proceeding arising out of or based upon this Grant shall be brought in the courts of the State of New York or any federal court located in such state, and

(b)irrevocably consent and submit to the exclusive jurisdiction of such courts for the purpose of any such action, suit or proceeding.

14.No Right as Shareholder. Optionee shall not have any rights as a shareholder with respect to any shares of Stock subject to the Option prior to the date of exercise of the Option.

15.Severability. The invalidity or unenforceability of any provision of this Grant shall not affect the validity or enforceability of any other provision of this Grant and each other provision of this Grant shall be severable and enforceable to the extent permitted by law.

16.Pronouns. Whenever the context may require, any pronouns used in this Grant shall include the corresponding masculine, feminine or neuter forms, and the singular form of nouns and pronouns shall include the plural, and vice versa.

17.Entire Agreement. This Grant and the documents and agreements referenced herein constitute the entire agreement between the parties, and supersede all prior agreements and understandings, relating to the subject matter of this Grant.

18.Notices. All notices required or permitted hereunder shall be in writing and deemed effectively given upon personal delivery, delivery by Federal Express or other recognized overnight delivery service or upon deposit in the United States Post Office, by registered or certified mail, postage prepaid, return receipt requested, if to the Company at its executive offices and if to Optionee at the address shown beneath his or her signature to this Grant, or in either case at such other address or addresses as either party shall designate to the other in accordance with this Section.

19.Electronic Delivery. The Company may, in its sole discretion, decide to deliver any documents related to this Option, any future options or other equity awards granted by the Company, whether under the Plan or otherwise, or any other Company securities by electronic means. By accepting this Option, whether electronically or otherwise, Optionee hereby consents to receive such documents by electronic delivery and agrees to participate in the Plan through any on-line or electronic system established and maintained by the Company or another third party designated by the Company, including but not limited to the use of electronic signatures or click-through electronic acceptance of terms and conditions.

5

20.Counterparts. This Grant may be executed in counterparts, each of which shall be deemed an original but all of which together will constitute one and the same instrument.

21.Data Privacy. Optionee expressly consents to the collection, use and transfer, in electronic or other form, of Optionee’s personal data by and among the Company, any member of the Group, and any broker or third party assisting the Company in administering the Plan or providing recordkeeping services for the Plan, for the purpose of implementing, administering and managing Optionee’s participation in the Plan. By accepting this Grant, Optionee waives any data privacy rights he or she may have with respect to such information.

22.Compensation Recovery. The Options shall be subject to the provisions of any applicable compensation recovery policy contained in the Plan or implemented by the Company, including without limitation any compensation recovery policy adopted to comply with the requirements of applicable law, to the extent set forth in such compensation recovery policy.

23.Parachute Payments.

(a)Grantee shall bear all expense of, and be solely responsible for, any excise tax imposed by Section 4999 of the Code (the “Excise Tax”); provided, however, that any payment or benefit received or to be received by Grantee (whether payable under the terms of this Agreement or any other plan, arrangement or agreement with the Company or any of its affiliates) (collectively, the “Payments”) that would constitute a “parachute payment” within the meaning of Section 280G of the Code, shall be reduced to the extent necessary so that no portion thereof shall be subject to the Excise Tax but only if, by reason of such reduction, the net after- tax benefit received by Grantee exceeds the net after-tax benefit that would be received by Grantee if no such reduction was made. If a reduction in payments or benefits constituting “parachute payments” is necessary under the preceding sentence, the reduction shall be made in the manner that results in the greatest economic benefit for Grantee.

(b)The “net after-tax benefit” shall mean (i) the Payments Grantee receives or is then entitled to receive from the Company that would constitute “parachute payments” within the meaning of Section 280G of the Code, less (ii) the amount of all federal, state and local income and employment taxes payable by Grantee with respect to the foregoing calculated at the highest marginal income tax rate for each year in which the foregoing shall be paid to Grantee (based on the rate in effect for such year as set forth in the Code as in effect at the time of the first payment of the foregoing), less (iii) the amount of Excise Tax imposed with respect to the payments and benefits described in Section 25(a) above.

(c)The independent registered public accounting firm engaged by the Company for general audit purposes as of the day prior to the effective date of the event described in Section 280G(b)(2)(A)(i) of the Code shall perform the foregoing calculations. If the independent registered public accounting firm so engaged by the Company is serving as accountant or auditor for the individual, entity or group effecting such change in control, change of ownership or similar transaction, the Company shall appoint a nationally recognized independent registered public accounting firm to make the determinations required hereunder. The Company shall bear

6

all expenses with respect to the determinations by such independent registered public accounting firm required to be made hereunder.

(d)The independent registered public accounting firm engaged to make the determinations hereunder shall provide its calculations, together with detailed supporting documentation, to the Company and Grantee within thirty (30) calendar days after the date on which Grantee’s right to a Payment is triggered (if requested at that time by the Company or Grantee) or such other time as reasonably requested by the Company or Grantee. Any good faith determinations of the independent registered public accounting firm made hereunder shall be final, binding and conclusive upon the Company and Grantee.

IN WITNESS WHEREOF, the Company has caused this Grant to be executed by its duly authorized officer and Optionee has executed this Grant as of the date first written above.

BALCHEM CORPORATION

By: /s/ Theodore L. Harris Theodore L. Harris

Chairman, President and CEO

AGREED AND ACCEPTED:

/s/ Theodore L. Harris

OPTIONEE

7

EXHIBIT A

Balchem Corporation

5 Paragon Drive

Montvale, NJ 07645

Notice of Grant of Stock Options

Theodore L. Harris

Participant ID: 122644

Dear Ted Harris,

Effective 9/15/2022, you have been granted a non-qualified stock option (“Option”) to buy shares of Balchem Corporation (the “Company”) common stock par value six and two-thirds cents ($0.06 2/3) per share with the following parameters:

Plan Name: Balchem Corporation 2017 Omnibus Incentive Plan

Award Number: Detailed Below

Shares Subject to Option Granted: 130,000

Award Type: Non-Qualified Stock Option Award Date: 9/15/2022

Award Price per Share: Detailed Below

Award Number	Shares	Strike Price	Vest Date	Vest Date
1640_NQ	32,500	$125.71	On Vest Date	9/15/2025
1641_NQ	32,500	$138.28	On Vest Date	9/15/2026
1642_NQ	32,500	$144.57	On Vest Date	9/15/2027
1643_NQ	32,500	$150.85	On Vest Date	9/15/2027

Expiration Date: 9/15/2032

By your signature and the Company’s signature below, you and the Company agree that these Options are granted under and governed by the terms and conditions of the Company’s 2017 Omnibus Incentive Plan, as the same may be amended from time to time, and the Stock Option Grant Agreement between you and the Company, which are attached and made a part of this Notice. This Notice may be executed in two or more counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same document.

EX-31.1

Exhibit 31.1 

CERTIFICATIONS 

I, Theodore L. Harris, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Balchem Corporation;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 4, 2022	/s/ Theodore L. Harris
	Theodore L. Harris
	President and Chief Executive Officer
	(Principal Executive Officer)

EX-31.2

Exhibit 31.2 

CERTIFICATIONS 

I, Martin Bengtsson, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Balchem Corporation;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 4, 2022	/s/ Martin Bengtsson
	Martin Bengtsson
	Executive Vice President and Chief Financial Officer
	(Principal Financial Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Balchem Corporation (the “Company”) on Form 10-Q for the period ended September 30, 2022 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Theodore L. Harris, President, and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

(1)The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

/s/ Theodore L. Harris

Theodore L. Harris

President and

Chief Executive Officer

(Principal Executive Officer)

November 4, 2022

This certification accompanies the above-described Report on Form 10-K pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by such Act, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Balchem Corporation (the "Company") on Form 10-Q for the period ended September 30, 2022 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Martin Bengtsson, Chief Financial Officer and Treasurer of the Company, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

(1)The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

/s/ Martin Bengtsson

Martin Bengtsson

Executive Vice President and
Chief Financial Officer

(Principal Financial Officer)

November 4, 2022

This certification accompanies the above-described Report on Form 10-K pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by such Act, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended. 

XML

Cover Page - shares	9 Months Ended
	Sep. 30, 2022	Oct. 27, 2022
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2022
Document Transition Report	false
Entity File Number	1-13648
Entity Registrant Name	Balchem Corporation
Entity Incorporation, State or Country Code	MD
Entity Tax Identification Number	13-2578432
Entity Address, Address Line One	5 Paragon Drive
Entity Address, City or Town	Montvale
Entity Address, State or Province	NJ
Entity Address, Postal Zip Code	07645
City Area Code	845
Local Phone Number	326-5600
Title of 12(b) Security	Common Stock, par value $.06-2/3 per share
Trading Symbol	BCPC
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		32,135,122
Entity Central Index Key	0000009326
Current Fiscal Year End Date	--12-31
Amendment Flag	false
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q3

XML

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Current assets:
Cash and cash equivalents	$ 56,489	$ 103,239
Accounts receivable, net of allowance for doubtful accounts of $1,186 and $928 at September 30, 2022 and December 31, 2021 respectively	140,812	117,408
Inventories	139,464	91,058
Prepaid expenses	6,944	6,116
Prepaid income taxes	3,954	0
Derivative assets	14,540	0
Other current assets	5,908	4,411
Total current assets	368,111	322,232
Property, plant and equipment, net	260,008	237,517
Goodwill	749,035	523,949
Intangible assets with finite lives, net	227,323	94,665
Right of use assets - operating leases	11,617	6,929
Right of use assets - finance lease	2,202	2,359
Other assets	14,712	11,674
Total assets	1,633,008	1,199,325
Current liabilities:
Trade accounts payable	73,121	56,243
Accrued expenses	49,980	43,411
Accrued compensation and other benefits	14,959	19,567
Dividends payable	125	20,886
Income taxes payable	0	1,334
Operating lease liabilities - current	3,727	2,194
Finance lease liabilities - current	173	167
Total current liabilities	142,085	143,802
Revolving loan	462,569	108,569
Deferred income taxes	76,771	46,455
Operating lease liabilities - non-current	8,069	4,811
Finance lease liabilities - non-current	2,172	2,303
Derivative liabilities	0	2,658
Contingent consideration liabilities	30,547	0
Other long-term obligations	14,873	13,712
Total liabilities	737,086	322,310
Commitments and contingencies (Note 16)
Stockholders' equity:
Preferred stock, $25 par value. Authorized 2,000,000 shares; none issued and outstanding	0	0
Common stock, $0.0667 par value. Authorized 120,000,000 shares; 32,134,902 and 32,287,150 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively	2,144	2,154
Additional paid-in capital	124,558	147,716
Retained earnings	816,089	732,138
Accumulated other comprehensive loss	(46,869)	(4,993)
Total stockholders' equity	895,922	877,015
Total liabilities and stockholders' equity	$ 1,633,008	$ 1,199,325

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Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Current assets:
Allowance for doubtful accounts	$ 1,186	$ 928
Stockholders' equity:
Preferred stock, par value (in dollars per share)	$ 25	$ 25
Preferred stock, shares authorized (in shares)	2,000,000	2,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.0667	$ 0.0667
Common stock, shares authorized (in shares)	120,000,000	120,000,000
Common stock, shares issued (in shares)	32,134,902	32,287,150
Common stock, shares outstanding (in shares)	32,134,902	32,287,150

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Condensed Consolidated Statements of Earnings - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Income Statement [Abstract]
Net sales	$ 244,267	$ 197,869	$ 709,827	$ 585,890
Cost of sales	175,837	136,935	498,015	406,782
Gross margin	68,430	60,934	211,812	179,108
Operating expenses:
Selling expenses	16,590	15,478	49,566	45,248
Research and development expenses	2,996	3,156	9,149	8,804
General and administrative expenses	15,219	9,787	41,216	31,375
Total operating expenses	34,805	28,421	99,931	85,427
Earnings from operations	33,625	32,513	111,881	93,681
Other expenses, net:
Interest expense, net	3,642	556	5,147	1,889
Other income, net	(1,102)	(128)	(1,239)	(295)
Total other expenses (income)	2,540	428	3,908	1,594
Earnings before income tax expense	31,085	32,085	107,973	92,087
Income tax expense	5,836	7,072	24,012	20,932
Net earnings	$ 25,249	$ 25,013	$ 83,961	$ 71,155
Net earnings per common share - basic (in dollars per share)	$ 0.79	$ 0.78	$ 2.62	$ 2.21
Net earnings per common share - diluted (in dollars per share)	$ 0.78	$ 0.77	$ 2.59	$ 2.18

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Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Statement of Comprehensive Income [Abstract]
Net earnings	$ 25,249	$ 25,013	$ 83,961	$ 71,155
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment	(34,874)	(3,362)	(44,667)	(7,981)
Unrealized gain on cash flow hedge	427	341	2,850	1,204
Change in postretirement benefit plans	2	11	(59)	26
Other comprehensive income (loss)	(34,445)	(3,010)	(41,876)	(6,751)
Comprehensive (loss) income	$ (9,196)	$ 22,003	$ 42,085	$ 64,404

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Condensed Consolidated Statements of Changes in Stockholders' Equity - USD ($) $ in Thousands	Total	Retained Earnings	Accumulated Other Comprehensive (Loss) Income	Common Stock	Additional Paid-in Capital
Beginning balance at Dec. 31, 2020	$ 828,233	$ 656,740	$ 4,173	$ 2,160	$ 165,160
Beginning balance, common stock (in shares) at Dec. 31, 2020				32,372,621
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net earnings	23,411	23,411
Other comprehensive income (loss)	(5,624)		(5,624)
Repurchases of common stock	(1,596)			$ (1)	(1,595)
Repurchases of common stock (in shares)				(13,475)
Shares and options (cancelled) issued under stock plans (in shares)				92,784
Shares and options issued under stock plans	5,068			$ 6	5,062
Ending balance at Mar. 31, 2021	849,492	680,151	(1,451)	$ 2,165	168,627
Ending balance, common stock (in shares) at Mar. 31, 2021				32,451,930
Beginning balance at Dec. 31, 2020	828,233	656,740	4,173	$ 2,160	165,160
Beginning balance, common stock (in shares) at Dec. 31, 2020				32,372,621
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net earnings	71,155
Other comprehensive income (loss)	(6,751)
Ending balance at Sep. 30, 2021	889,078	727,895	(2,578)	$ 2,161	161,600
Ending balance, common stock (in shares) at Sep. 30, 2021				32,382,637
Beginning balance at Mar. 31, 2021	849,492	680,151	(1,451)	$ 2,165	168,627
Beginning balance, common stock (in shares) at Mar. 31, 2021				32,451,930
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net earnings	22,731	22,731
Other comprehensive income (loss)	1,883		1,883
Repurchases of common stock	(9,240)			$ (5)	(9,235)
Repurchases of common stock (in shares)				(72,649)
Shares and options (cancelled) issued under stock plans (in shares)				25,493
Shares and options issued under stock plans	4,776			$ 2	4,774
Ending balance at Jun. 30, 2021	869,642	702,882	432	$ 2,162	164,166
Ending balance, common stock (in shares) at Jun. 30, 2021				32,404,774
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net earnings	25,013	25,013
Other comprehensive income (loss)	(3,010)		(3,010)
Repurchases of common stock	(7,926)			$ (4)	(7,922)
Repurchases of common stock (in shares)				(61,075)
Shares and options (cancelled) issued under stock plans (in shares)				38,938
Shares and options issued under stock plans	5,359			$ 3	5,356
Ending balance at Sep. 30, 2021	889,078	727,895	(2,578)	$ 2,161	161,600
Ending balance, common stock (in shares) at Sep. 30, 2021				32,382,637
Beginning balance at Dec. 31, 2021	877,015	732,138	(4,993)	$ 2,154	147,716
Beginning balance, common stock (in shares) at Dec. 31, 2021				32,287,150
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net earnings	28,930	28,930
Other comprehensive income (loss)	(1,296)		(1,296)
Repurchases of common stock	(34,599)			$ (16)	(34,583)
Repurchases of common stock (in shares)				(245,685)
Dividends	(10)	(10)
Shares and options (cancelled) issued under stock plans (in shares)				74,604
Shares and options issued under stock plans	3,642			$ 4	3,638
Ending balance at Mar. 31, 2022	873,682	761,058	(6,289)	$ 2,142	116,771
Ending balance, common stock (in shares) at Mar. 31, 2022				32,116,069
Beginning balance at Dec. 31, 2021	877,015	732,138	(4,993)	$ 2,154	147,716
Beginning balance, common stock (in shares) at Dec. 31, 2021				32,287,150
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net earnings	83,961
Other comprehensive income (loss)	(41,876)
Ending balance at Sep. 30, 2022	895,922	816,089	(46,869)	$ 2,144	124,558
Ending balance, common stock (in shares) at Sep. 30, 2022				32,134,902
Beginning balance at Mar. 31, 2022	873,682	761,058	(6,289)	$ 2,142	116,771
Beginning balance, common stock (in shares) at Mar. 31, 2022				32,116,069
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net earnings	29,782	29,782
Other comprehensive income (loss)	(6,135)		(6,135)
Repurchases of common stock	(600)				(600)
Repurchases of common stock (in shares)				(4,976)
Shares and options (cancelled) issued under stock plans (in shares)				9,500
Shares and options issued under stock plans	4,641			$ 1	4,640
Ending balance at Jun. 30, 2022	901,370	790,840	(12,424)	$ 2,143	120,811
Ending balance, common stock (in shares) at Jun. 30, 2022				32,120,593
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net earnings	25,249	25,249
Other comprehensive income (loss)	(34,445)		(34,445)
Repurchases of common stock	(46)				(46)
Repurchases of common stock (in shares)				(361)
Shares and options (cancelled) issued under stock plans (in shares)				14,670
Shares and options issued under stock plans	3,794			$ 1	3,793
Ending balance at Sep. 30, 2022	$ 895,922	$ 816,089	$ (46,869)	$ 2,144	$ 124,558
Ending balance, common stock (in shares) at Sep. 30, 2022				32,134,902

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Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Net Cash Provided by (Used in) Operating Activities [Abstract]
Net earnings	$ 83,961	$ 71,155
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization	37,958	36,622
Stock compensation expense	9,838	8,809
Deferred income taxes	1,513	(806)
Provision for doubtful accounts	379	105
Unrealized gain on foreign currency transaction and deferred compensation	(1,262)	(534)
Asset impairment charge	23	0
Loss/(gain) on disposal of assets	259	(996)
Changes in assets and liabilities
Accounts receivable	(14,678)	(14,088)
Inventories	(30,370)	(11,736)
Prepaid expenses and other current assets	(690)	(3,793)
Accounts payable and accrued expenses	14,358	30,467
Income taxes	(5,732)	(681)
Other	1,324	1,499
Net cash provided by operating activities	96,881	116,023
Cash flows from investing activities:
Cash paid for acquisitions, net of cash acquired	(365,780)	0
Capital expenditures and intangible assets acquired	(35,793)	(22,391)
Proceeds from insurance and sale of assets	198	1,272
Investment in affiliates	(150)	0
Net cash used in investing activities	(401,525)	(21,119)
Cash flows from financing activities:
Proceeds from revolving loan	435,000	5,000
Principal payments on revolving loan	(81,000)	(60,000)
Principal payments on acquired debt	(30,782)	0
Cash paid for financing costs	(1,232)	0
Principal payments on finance lease	(125)	(118)
Proceeds from stock options exercised	2,172	6,351
Dividends paid	(20,708)	(18,704)
Purchase of common stock	(35,245)	(18,762)
Net cash provided by (used in) financing activities	268,080	(86,233)
Effect of exchange rate changes on cash	(10,186)	(3,229)
(Decrease) increase in cash and cash equivalents	(46,750)	5,442
Cash and cash equivalents beginning of period	103,239	84,571
Cash and cash equivalents end of period	$ 56,489	$ 90,013

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CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

9 Months Ended

Sep. 30, 2022

Organization, Consolidation and Presentation of Financial Statements [Abstract]

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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, 2021 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, 2021. 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, 2022 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 Adopted Accounting Standards

In March 2020, the FASB issued Accounting Standards Update ("ASU") 2020-04, "Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting." This ASU provides temporary optional guidance to ease the potential burden in accounting for reference rate reform. The new guidance provides optional expedients and exceptions for applying GAAP to contract modifications and hedging relationships, subject to meeting certain criteria, that reference LIBOR or another reference rate expected to be discontinued. The ASU is intended to help stakeholders during the global market-wide reference rate transition period. Therefore, this Standard Update is in effect from March 12, 2020 through December 31, 2022. In January 2021, the FASB issued ASU 2021-01, "Reference Rate Reform (Topic 848): Scope." ASU 2021-01 clarifies that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition. The ASU also amends the expedients and exceptions in Topic 848 to capture the incremental consequences of the scope clarification and to tailor the existing guidance to derivative instruments affected by the discounting transition. The Company adopted the Standard Update in 2021. Due to the discontinuation of LIBOR and under the relief provided by Topic 848, during the third quarter of 2022, the Company modified its existing interest rate swap and replaced LIBOR with 1-month CME Term SOFR (see Note 20, "Derivative Instruments and Hedging Activities "). The modification of the agreement did not have a significant impact on the Company's consolidated financial statements and disclosures.

In December 2019, the FASB issued ASU 2019-12, "Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes." ASU 2019-12 simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The amendments also improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance. ASU 2019-12 became effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. The Company adopted ASU 2019-12 on January 1, 2021. The adoption of ASU 2019-12 did not have a significant impact on the Company's consolidated financial statements and disclosures.

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SIGNIFICANT ACQUISITIONS

9 Months Ended

Sep. 30, 2022

Business Combination and Asset Acquisition [Abstract]

SIGNIFICANT ACQUISITIONS

SIGNIFICANT ACQUISITIONS

Cardinal Associates Inc. ("Bergstrom")

On August 30, 2022, the Company's wholly-owned subsidiary Albion Laboratories, Inc. ("Albion") entered into a Stock Purchase Agreement, and closed on such transaction with Cardinal Associates Inc. ("Cardinal"), a corporation organized under the laws of the State of Washington, pursuant to which Albion acquired Cardinal and its Bergstrom Nutrition business (collectively, "Bergstrom"). Bergstrom Nutrition is a leading science-based manufacturer of methylsulfonylmethane (MSM), based in Vancouver, Washington. MSM is a widely used nutritional ingredient with strong scientific evidence supporting its benefits for joint health, sports nutrition, skin and beauty, healthy aging, and pet health. Bergstrom Nutrition's MSM brand "OptiMSM®" delivers the highest quality and purity MSM on the market and is the only brand of MSM with a U.S. GRAS "generally regarded as safe" designation. The addition of OptiMSM® to the Company's portfolio within Human Nutrition & Health and Animal Nutrition & Health segments provides a synergistic scientific advantage in Balchem's key strategic therapeutic focus areas such as longevity and performance and is a strong fit with Balchem's specialty, science-backed mineral products.

The Company made payments of $70,892 for the acquisition, amounting to $69,740 to the former shareholders and $1,152 to pay off Bergstrom's bank debt and certain other obligations. Net of cash acquired of $773, total payments made to the former shareholders of Bergstrom on the acquisition date were $68,967. The acquisition was primarily financed through the 2022 Credit Agreement (see Note 8, "Revolving Loan"). In connection with this transaction, the former shareholders of Bergstrom have an opportunity to receive an additional payment if certain financial performance targets and other metrics are met, and therefore we recorded a contingent consideration liability of $7,835 as of September 30, 2022. The goodwill of $34,060 that arose on the acquisition date consists largely of expected synergies, including the combined entities' experience and technical problem-solving capabilities, and acquired workforce. The goodwill is assigned to both the Human Nutrition & Health and Animal Nutrition & Health business segments. For tax purposes, a joint election under 338(h)(10) was made to treat the stock acquisition as a deemed asset acquisition, therefore generating tax amortizable goodwill.

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed:

Cash and cash equivalents	$	773
Accounts receivable	4,699
Inventories	3,922
Property, plant and equipment	2,700
Right of use assets	866
Customer relationships	26,500
Developed technology	4,700
Trademarks	2,300
Other assets	197
Accounts payable	(685)
Bank debt	(206)
Lease liabilities	(871)
Other liabilities	(1,380)
Goodwill	34,060
Total consideration on acquisition date	77,575
Contingent consideration liability	(7,835)
Amount paid to shareholders	69,740
To pay off bank debt and certain other obligations	1,152
Total amount paid	$	70,892

The estimated fair value of tangible and intangible assets acquired and liabilities assumed is based on management’s estimates and assumptions, which are subject to change. In preparing our preliminary fair value estimates of the intangible assets and certain tangible assets acquired, management, among other things, consulted an independent advisor. Valuation methods utilized include net realizable value for inventory, multi-period excess earnings method for customer relationships, the relief from royalty method for other intangible assets, and a scenario-based approach for the contingent consideration. The purchase price and related allocation of assets acquired and liabilities assumed is preliminary pending management's final review of fair value calculations.

Customer relationships are amortized over a 15-year period utilizing a percentage of excess earnings over economic life method. The corporate trademark and product trademarks are amortized over 2 years and 10 years, respectively, and developed technology is amortized over 12 years, utilizing the straight-line method as the consumption pattern of the related economic benefits cannot be reliably determined.

Transaction and integration costs related to the Bergstrom acquisition are included in general and administrative expenses and were $593 and $668 for the three and nine months ended September 30, 2022, respectively.

Kechu BidCo AS and Its Subsidiary Companies ("Kappa")

On June 21, 2022, Balchem Corporation and its wholly-owned subsidiary, Balchem B.V., completed the acquisition of Kechu BidCo AS and its subsidiary companies, including Kappa Bioscience AS, a leading science-based manufacturer of specialty vitamin K2 for the human nutrition industry, headquartered in Oslo, Norway (all acquired companies collectively referred to as “Kappa”). The Company made payments of approximately kr3,301,341 ("kr" indicates the Norwegian krone) on the acquisition date, amounting to approximately kr2,997,669 to the former shareholder and approximately kr303,672 to Kappa's lenders to pay off all Kappa bank debt. Net of cash acquired of kr63,064, total payments on the acquisition date were kr3,238,277. Considering net cash acquired of $6,365, these payments translated to approximately $326,820 paid on the acquisition date, amounting to $302,537 paid to the former shareholder and approximately $30,648 to Kappa's lenders. The acquisition was primarily financed through the 2018 Credit Agreement (see Note 8, "Revolving Loan"). In connection with this transaction, the seller has an opportunity to receive an additional payment in 2024 if certain financial performance targets and other metrics are met, and therefore we recorded contingent consideration of kr245,000 in the second quarter of 2022 (translated to $22,712 as of September 30, 2022). Kappa manufactures specialty vitamin K2, a fast-growing specialty vitamin that plays a crucial role in the human body for bone health, heart health, immunity, and athletic performance. Primarily, vitamin K2 supports the transport and distribution of calcium in the body. Vitamin K2 is important at all life stages, from pregnancy and early life to healthy aging. Kappa's K2VITAL® branded vitamin K2 is the leading synthetic vitamin K2 and is backed by strong intellectual property and a deep clinical research portfolio. The acquisition strengthens the Company's scientific and technical expertise, geographic reach, and marketplace leadership, which should ultimately lead to accelerated growth for the Company's portfolios within the Human Nutrition & Health segment.

The goodwill of $217,570 that arose on the acquisition date consists largely of expected synergies, including the combined entities' experience and technical problem-solving capabilities, and acquired workforce. The goodwill is assigned to the Human Nutrition & Health business segment and is not deductible for income tax purposes.

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed. The transactions were completed in Norwegian kroner ("NOK") and the amounts were translated to U.S. dollars ("USD") using the foreign currency exchange rate as of June 21, 2022.

Cash and cash equivalents	$	6,365
Accounts receivable	8,036
Inventories	17,701
Property, plant and equipment	9,854
Right of use assets	3,349
Customer relationships	110,012
Developed technology	17,662
Trademarks	6,055
Other assets	2,399
Accounts payable	(3,301)
Bank debt	(30,648)
Lease liabilities	(3,349)
Other liabilities	(4,373)
Deferred income taxes, net	(30,069)
Goodwill	217,570
Total consideration on acquisition date	327,263
Contingent consideration liability	(24,726)
Net gain on foreign currency exchange forward contracts	(512)
Amount paid to shareholders	302,025
Kappa bank debt paid on acquisition date	30,648
Total amount paid on acquisition date	$	332,673

The estimated fair value of tangible and intangible assets acquired and liabilities assumed is based on management’s estimates and assumptions, which are subject to change. In preparing our preliminary fair value estimates of the intangible assets and certain tangible assets acquired, management, among other things, consulted an independent advisor. Valuation methods utilized include net realizable value for inventory, multi-period excess earnings method for customer relationships, the relief from royalty method for other intangible assets, and a scenario-based approach for the contingent consideration. The purchase price and related allocation of assets acquired and liabilities assumed is preliminary pending management's final review of fair value calculations and deferred tax liabilities related to certain non-deductible assets.

Customer relationships are amortized over a 15-year period utilizing a percentage of excess earnings over economic life method. The corporate trademark and product trademarks are amortized over 2 years and 10 years, respectively, and developed technology is amortized over 12 years, utilizing the straight-line method as the consumption pattern of the related economic benefits cannot be reliably determined.

Transaction and integration costs related to the Kappa acquisition are included in general and administrative expenses and were $989 and $1,440 for both the three and nine months ended September 30, 2022. There were no such amounts related to this acquisition for the three and nine months ended September 30, 2021.

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STOCKHOLDERS' EQUITY

9 Months Ended

Sep. 30, 2022

Stockholders' Equity Note [Abstract]

STOCKHOLDERS' EQUITY

STOCKHOLDERS’ EQUITY

STOCK-BASED COMPENSATION

The Company’s results for the three and nine months ended September 30, 2022 and 2021 reflected the following stock-based compensation cost, and such compensation cost had the following effects on net earnings:

	Increase/(Decrease) for the				Increase/(Decrease) for the
	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Cost of sales	$	386	$	444	$	1,062	$	1,188
Operating expenses	2,563		2,451		8,776		7,621
Net earnings	(2,251)		(2,232)		(7,563)		(6,801)

As allowed by 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 stock incentive plans allow 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 plans. 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, 2022, the plans had 407,630 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 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, 2022 and 2021 is summarized below:

For the nine months ended September 30, 2022	Shares (000s)	Weighted Average Exercise Price		Aggregate Intrinsic Value		Weighted Average Remaining Contractual Term
Outstanding as of December 31, 2021	867	$	88.19	$	69,711
Granted	239	139.04
Exercised	(31)	70.06
Forfeited	(12)	125.05
Canceled	—	—
Outstanding as of September 30, 2022	1,063	$	99.74	$	27,308	6.6
Exercisable as of September 30, 2022	656	$	81.45	$	26,312	5.2

For the nine months ended September 30, 2021	Shares (000s)	Weighted Average Exercise Price		Aggregate Intrinsic Value		Weighted Average Remaining Contractual Term
Outstanding as of December 31, 2020	858	$	80.58	$	29,735
Granted	129	119.12
Exercised	(100)	63.49
Forfeited	(10)	106.93
Canceled	(1)	74.57
Outstanding as of September 30, 2021	876	$	87.91	$	50,090	6.6
Exercisable as of September 30, 2021	540	$	74.81	$	37,961	5.5

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 Plans 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, 2022, the fair value of each option grant was estimated on the date of the grant using the following weighted average assumptions: dividend yields of 0.5%; expected volatilities of 30%; risk-free interest rates of 2.8%; and expected lives of 7.3 years. For nine months ended September 30, 2021, the fair value of each option grant was estimated on the date of the grant using the following weighted average assumptions: dividend yields of 0.5%; expected volatilities of 33%; risk-free interest rates of 0.5%; and expected lives of 4.9 years.

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

Other information pertaining to option activity during the three and nine months ended September 30, 2022 and 2021 is as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Weighted-average fair value of options granted	$	48.55	$	—	$	44.77	$	33.11
Total intrinsic value of stock options exercised ($000s)	$	815	$	3,196	$	1,964	$	6,927

Non-vested restricted stock activity for the nine months ended September 30, 2022 and 2021 is summarized below:

	Nine Months Ended September 30,
	2022			2021
	Shares (000s)	Weighted Average Grant Date Fair Value		Shares (000s)	Weighted Average Grant Date Fair Value
Non-vested balance as of December 31	166	$	99.70	159	$	90.71
Granted	40	137.03		38	119.59
Vested	(78)	81.11		(16)	86.79
Forfeited	(7)	116.72		(5)	95.71
Non-vested balance as of September 30	121	$	122.96	176	$	97.17

Non-vested performance share activity for the nine months ended September 30, 2022 and 2021 is summarized below:

	Nine Months Ended September 30,
	2022			2021
	Shares (000s)	Weighted Average Grant Date Fair Value		Shares (000s)	Weighted Average Grant Date Fair Value
Non-vested balance as of December 31	69	$	110.72	71	$	91.99
Granted	39	114.22		36	108.74
Vested	(35)	53.17		(24)	70.64
Forfeited	(3)	84.09		(11)	74.57
Non-vested balance as of September 30	70	$	127.69	72	$	110.22

The 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, and 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. Expense is measured based on the fair value at the date of grant utilizing a Black-Scholes methodology to produce a Monte-Carlo simulation model which allows for the incorporation of the performance hurdles that must be met before the PS vests. The assumptions used in the fair value determination were risk free interest rates of 1.8% and 0.2%; dividend yields of 0.5% and 0.6%; volatilities of 32% and 33%; and initial TSR’s of -15.7% and 11.7%, in each case for the nine months ended September 30, 2022 and 2021, 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.

As of September 30, 2022 and 2021, there were $23,665 and $16,498, respectively, of total unrecognized compensation costs related to non-vested share-based compensation arrangements granted under the plans. As of September 30, 2022, the

unrecognized compensation cost is expected to be recognized over a weighted-average period of approximately 2.1 years. The Company estimates that share-based compensation expense for the year ended December 31, 2022 will be approximately $13,500.

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 3,069,266 shares have been purchased. The Company’s prior presentation of reflecting treasury stock separately within stockholders’ equity has been adjusted to conform to the presentation prescribed by the State of Maryland, where the Company is incorporated. In connection therewith, adjustments to balances previously reflected as treasury stock of $11,080, $8,472, $2,210, and $7,873 as of September 30, 2021, June 30, 2021, March 31, 2021, and December 31, 2020, respectively, were made to the condensed consolidated statements of changes in stockholders’ equity and prior references to “Treasury shares purchased” were updated to “Repurchases of common stock”, accordingly. There was no impact to total stockholders’ equity in any of the years presented as a result of these updates. 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. The Company also repurchases shares from employees in connection with settlement of transactions under the Company's equity incentive plans. During the nine months ended September 30, 2022 and 2021, the Company purchased 251,022 and 147,199 shares, respectively, from open market purchases and from employees on a net-settlement basis to provide cash to employees to cover the associated employee payroll taxes. These shares were purchased at an average cost of $140.41 and $127.46, respectively.

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INVENTORIES

9 Months Ended

Sep. 30, 2022

Inventory Disclosure [Abstract]

INVENTORIES

INVENTORIES

Inventories at September 30, 2022 and December 31, 2021 consisted of the following:

	September 30, 2022		December 31, 2021
Raw materials	$	41,371	$	28,639
Work in progress	11,879		10,563
Finished goods	86,214		51,856
Total inventories	$	139,464	$	91,058

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PROPERTY, PLANT AND EQUIPMENT

9 Months Ended

Sep. 30, 2022

Property, Plant and Equipment [Abstract]

PROPERTY, PLANT AND EQUIPMENT

PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment at September 30, 2022 and December 31, 2021 are summarized as follows:

	September 30, 2022		December 31, 2021
Land	$	10,993	$	11,692
Building	90,239		89,602
Equipment	267,611		253,995
Construction in progress	73,163		52,930
	442,006		408,219
Less: accumulated depreciation	181,998		170,702
Property, plant and equipment, net	$	260,008	$	237,517

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INTANGIBLE ASSETS

9 Months Ended

Sep. 30, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

INTANGIBLE ASSETS

INTANGIBLE ASSETSThe Company had goodwill in the amount of $749,035 and $523,949 as of September 30, 2022 and December 31, 2021, respectively, subject to the provisions of ASC 350, “Intangibles-Goodwill and Other.” The increase in goodwill is the result of the acquisitions of Kappa and Bergstrom, partially offset by the change due to foreign exchange translation adjustments. Refer to Note 2, "Significant Acquisitions", for more information.

Identifiable intangible assets with finite lives at September 30, 2022 and December 31, 2021 are summarized as follows:

	Amortization Period (in years)	Gross Carrying Amount at 9/30/2022		Accumulated Amortization at 9/30/2022		Gross Carrying Amount at 12/31/2021		Accumulated Amortization at 12/31/2021
Customer relationships & lists	10-20	$	361,747	$	185,381	$	240,059	$	173,489
Trademarks & trade names	2-17	50,487		32,285		43,116		28,985
Developed technology	5-12	40,816		15,524		20,234		14,607
Other	2-18	24,600		17,137		23,921		15,584
		$	477,650	$	250,327	$	327,330	$	232,665

Amortization of identifiable intangible assets was approximately $7,922 and $19,683 for the three and nine months ended September 30, 2022, respectively, and $6,155 and $18,868 for the three and nine months ended September 30, 2021, respectively. Assuming no change in the gross carrying value of identifiable intangible assets, estimated amortization expense is $5,300 for the remainder of 2022, $30,188 for 2023, $21,740 for 2024, $17,906 for 2025, $17,362 for 2026 and $16,553 for 2027. At September 30, 2022 and December 31, 2021, there were no identifiable intangible assets with indefinite useful lives as defined by ASC 350. Identifiable intangible assets are reflected in “Intangible assets with finite lives, net” in 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, 2022 and 2021.

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EQUITY-METHOD INVESTMENT	9 Months Ended
	Sep. 30, 2022
Equity Method Investments and Joint Ventures [Abstract]
EQUITY-METHOD INVESTMENT	EQUITY-METHOD INVESTMENTIn 2013, the Company and Eastman Chemical Company (formerly Taminco Corporation) 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 up to 2/3 of the production offtake capacity 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 $140 and $420 for the three and nine months ended September 30, 2022, respectively, and $142 and $416 for the three and nine months ended September 30, 2021, respectively, relating to its portion of the joint venture's expenses in other expense. The Company made capital contributions to the investment totaling $89 and $222 for the three and nine months ended September 30, 2022, respectively, and $46 and $31 for the three and nine months ended September 30, 2021, respectively. The carrying value of the joint venture at September 30, 2022 and December 31, 2021 was $4,301 and $4,499, respectively, and is recorded in "Other assets."

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REVOLVING LOAN

9 Months Ended

Sep. 30, 2022

Debt Disclosure [Abstract]

REVOLVING LOAN

REVOLVING LOANOn June 27, 2018, the Company and a bank syndicate entered into a credit agreement (the "2018 Credit Agreement"), which provided for revolving loans up to $500,000, due on June 27, 2023. During the second quarter of 2022, the Company borrowed $345,000 under the 2018 Credit Agreement to fund the Kappa acquisition (see Note 2, "Significant Acquisitions"). 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. The Company used initial proceeds from the 2022 Credit Agreement to repay the outstanding balance of $433,569 due in June 2023 under the 2018 Credit Agreement. During the third quarter of 2022, the Company borrowed another $70,000 to fund the Bergstrom acquisition (see Note 2, "Significant Acquisitions"). As of September 30, 2022, the total balance outstanding on the 2022 Credit Agreement amounted to $462,569. As of December 31, 2021, the total balance outstanding on the 2018 Credit Agreement amounted to $108,569. 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. In connection with the entering into the Amended and Restated Credit Agreement, the Company also modified its existing interest rate swap under the relief provided for in ASC 848, "Reference Rate Reform" (see Note 20 "Derivative Instruments and Hedging Activities").

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 4.214% at September 30, 2022. 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 0.15% to 0.225% (0.175% at September 30, 2022).  The unused portion of the revolving loan amounted to $87,431 at September 30, 2022.  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 and certain costs associated with the issuance of the extinguished debt instrument 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 totaled $1,389 and $421 at September 30, 2022 and December 31, 2021, respectively, and are included in other assets on the condensed consolidated balance sheets. Amortization expense pertaining to these costs totaled $121 and $262 for the three and nine months ended September 30, 2022 and $71 and $212 for the three and nine months ended September 30, 2021, respectively, and are included in "Interest expense" 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, 2022, 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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NET EARNINGS PER SHARE

9 Months Ended

Sep. 30, 2022

Earnings Per Share [Abstract]

NET EARNINGS PER SHARE

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,
	2022		2021		2022		2021
Net Earnings - Basic and Diluted	$	25,249	$	25,013	$	83,961	$	71,155
Shares (000s)
Weighted Average Common Shares - Basic	32,010		32,194		32,017		32,227
Effect of Dilutive Securities – Stock Options, Restricted Stock, and Performance Shares	357		450		375		424
Weighted Average Common Shares - Diluted	32,367		32,644		32,392		32,651
Net Earnings Per Share - Basic	$	0.79	$	0.78	$	2.62	$	2.21
Net Earnings Per Share - Diluted	$	0.78	$	0.77	$	2.59	$	2.18

The number of anti-dilutive shares were 362,203 and 369,183 for the three and nine months ended September 30, 2022, respectively, and 151,924 and 156,238 for the three and nine months ended September 30, 2021, respectively. Anti-dilutive shares could potentially dilute basic earnings per share in future periods and therefore, were not included in diluted earnings per share.

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INCOME TAXES

9 Months Ended

Sep. 30, 2022

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

The Company’s effective tax rate for the three months ended September 30, 2022 and 2021, was 18.8% and 22.0%, respectively, and 22.2% and 22.7% for the nine months ended September 30, 2022 and 2021. The decrease in the effective tax rate for the three months ended September 30, 2022 compared to the three months ended September 30, 2021 was primarily due to a favorable provision to return adjustment related to an increase in certain tax credits and deductions. The decrease in the effective tax rate for the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021 was primarily due to a favorable provision to return adjustment related to an increase in certain tax credits and deductions, which was offset by a change in mix of earnings in higher taxing jurisdictions.

Balchem will continue to evaluate and analyze the impact of the U.S. Tax Cuts and Jobs Act that was enacted on December 22, 2017 and the additional guidance that has been issued, and may be issued, by the U.S. Department of Treasury, the Securities and Exchange Commission ("SEC"), and/or the Financial Accounting Standards Board ("FASB") regarding this act.

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.

The Company files income tax returns in the U.S. and in various states and foreign countries. As of September 30, 2022, in the major jurisdictions where the Company operates, it is generally no longer subject to income tax examinations by tax authorities for years before 2017. As of September 30, 2022 and December 31, 2021, the Company had approximately $5,690 and $5,881, respectively, of unrecognized tax benefits, which are included in "Other long-term obligations" on the Company’s condensed consolidated balance sheets. The Company includes interest expense or income as well as potential penalties on unrecognized tax positions as a component of "Income tax expense" in the condensed consolidated statements of earnings. The total amounts of accrued interest and penalties related to uncertain tax positions at September 30, 2022 and December 31, 2021 were approximately $2,167 and $2,106, respectively, and are included in "Other long-term obligations."

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SEGMENT INFORMATION

9 Months Ended

Sep. 30, 2022

Segment Reporting [Abstract]

SEGMENT INFORMATION

SEGMENT INFORMATION

Balchem Corporation reports three business segments: 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."

Human Nutrition & Health

The Human Nutrition & Health ("HNH") segment provides human grade choline nutrients and mineral amino acid chelated products through this segment for nutrition and health applications. Choline is recognized to play a key role in the development and structural integrity of brain cell membranes in infants, processing dietary fat, reproductive development and neural functions, such as memory and muscle function. The Company's mineral amino acid chelates, specialized mineral salts, and mineral complexes are used as raw materials for inclusion in premier human nutrition products. Proprietary technologies have been combined to create an organic molecule in a form the body can readily assimilate. Sales growth for human nutrition applications is reliant on differentiation from lower-cost competitive products through scientific data, intellectual property and customers' appreciation of brand value. Consequently, the Company makes investments in such activities for long-term value differentiation. This segment also serves the food and beverage industry for beverage, bakery, dairy, confectionary, and savory manufacturers. The Company partners with its customers from ideation through commercialization to bring on-trend beverages, baked goods, confections, dairy and meat products to market. The Company has expertise in trends analysis and product development. With its strong manufacturing capabilities in customized spray dried and emulsified powders, extrusion and agglomeration, blended lipid systems, liquid flavor delivery systems, juice and dairy bases, chocolate systems, ice cream bases and variegates, the Company is a one-stop solutions provider for beverage and dairy product development needs. Additionally, this segment provides microencapsulation solutions to a variety of applications in food, pharmaceutical and nutritional ingredients to enhance performance of nutritional fortification, processing, mixing, and packaging applications and shelf-life. Major product applications are baked goods, refrigerated and frozen dough systems, processed meats, seasoning blends, confections, sports and protein bars, dietary plans, and nutritional supplements. The Company also creates cereal systems for ready-to-eat cereals, grain-based snacks, and cereal based ingredients. Through the Kappa and Bergstrom acquisitions, respectively, this segment recently began manufacturing specialty vitamin K2, which is a fast-growing specialty vitamin that plays a crucial role in the human body for bone health, heart health, immunity, and athletic performance, and MSM, which is a widely used nutritional ingredient that provides benefits for joint health, sports nutrition, skin and beauty, and healthy aging.

Animal Nutrition & Health

The Company’s Animal Nutrition & Health ("ANH") segment provides nutritional products derived from its microencapsulation and chelation technologies in addition to basic choline chloride. For ruminant animals, the Company’s microencapsulated

products boost health and milk production by delivering nutrient supplements that are biologically available, providing required nutritional levels. The Company’s proprietary chelation technology provides enhanced nutrient absorption for various species of production and companion animals and is marketed for use in animal feed throughout the world. ANH also manufactures and supplies choline chloride, an essential nutrient for monogastric animal health, predominantly to the poultry, pet and swine industries. Choline, which is manufactured and sold in both dry and aqueous forms, plays a vital role in the metabolism of fat. In poultry, choline deficiency can result in reduced growth rates and perosis in young birds, while in swine production choline is a necessary and required component of gestating and lactating sow diets for both liver health and prevention of leg deformity. Through the Bergstrom acquisition, this segment recently began manufacturing MSM, which is a widely used nutritional ingredient that provides benefits for pet health.

Sales of value-added encapsulated products are highly dependent on overall industry economics as well as the Company's ability to leverage the results of university and field research on the animal health and production benefits of our products. Management believes that success in the commodity-oriented basic choline chloride marketplace is highly dependent on the Company’s ability to maintain its strong reputation for excellent product quality and customer service. The Company continues to drive production efficiencies in order to maintain its competitive-cost position to effectively compete in a competitive global marketplace.

Specialty Products

The Company re-packages and distributes a number of performance gases and chemicals for various uses by its customers, notably ethylene oxide, propylene oxide, and ammonia. Ethylene oxide is sold as a sterilant gas, primarily for use in the health care industry. It is used to sterilize a wide range of medical devices because of its versatility and effectiveness in treating hard or soft surfaces, composites, metals, tubing and different types of plastics without negatively impacting the performance of the device being sterilized. Contract sterilizers and medical device manufacturers are principal customers for this product. Propylene oxide is marketed and sold as a fumigant to aid in the control of insects and microbiological spoilage; and to reduce bacterial and mold contamination in certain shelled and processed nut meats, processed spices, cacao beans, cocoa powder, raisins, figs and prunes, and for various chemical synthesis applications, such as increasing paint durability and manufacturing specialty starches and textile coatings Ammonia is used primarily as a refrigerant, and also for heat treatment of metals and various chemical synthesis applications, and is distributed in reusable and recyclable drum and cylinder packaging approved for use in the countries these products are shipped to.

The Company’s performance gases and chemicals are distributed worldwide in specially designed, reusable and recyclable drum and cylinder packaging, to assure compliance with safety, quality and environmental standards as outlined by the applicable regulatory agencies in the countries our products are shipped to. The Company’s inventory of these specially built drums and cylinders, along with its five filling facilities, represents a significant capital investment. The Company also sells single use canisters for use in sterilizing re-usable devices typically processed in autoclave units in hospitals.

The Company’s micronutrient agricultural nutrition business sells chelated minerals primarily to producers of high value crops. The Company has a unique and patented two-step approach to solving mineral deficiency in plants to optimize health, yield and shelf-life.  First, the Company determines optimal mineral balance for plant health. The Company then has a foliar applied Metalosate® product range, utilizing patented amino acid chelate technology. Its products quickly and efficiently deliver mineral nutrients. As a result, the farmer/grower gets healthier crops that are more resistant to disease and pests, larger yields and healthier food for the consumer with extended shelf life for produce being shipped long distances.

The segment information is summarized as follows:

Business Segment Assets	September 30, 2022		December 31, 2021
Human Nutrition & Health	$	1,169,395	$	727,131
Animal Nutrition & Health	189,652		158,971
Specialty Products	169,817		184,628
Other and Unallocated (1)	104,144		128,595
Total	$	1,633,008	$	1,199,325

Business Segment Net Sales	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Human Nutrition & Health	$	142,655	$	111,200	$	396,728	$	327,187
Animal Nutrition & Health	65,604		56,192		197,546		161,821
Specialty Products	29,641		27,615		99,622		89,645
Other and Unallocated (2)	6,367		2,862		15,931		7,237
Total	$	244,267	$	197,869	$	709,827	$	585,890

Business Segment Earnings Before Income Taxes	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Human Nutrition & Health	$	20,584	$	19,801	$	64,592	$	58,512
Animal Nutrition & Health	8,036		7,442		26,943		16,059
Specialty Products	7,105		6,455		24,785		23,373
Other and Unallocated (2)	(2,100)		(1,185)		(4,439)		(4,263)
Interest and other expense	(2,540)		(428)		(3,908)		(1,594)
Total	$	31,085	$	32,085	$	107,973	$	92,087

Depreciation/Amortization	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Human Nutrition & Health	$	9,569	$	7,472	$	24,316	$	22,486
Animal Nutrition & Health	1,681		1,932		5,010		5,512
Specialty Products	1,839		1,997		5,670		6,351
Other and Unallocated (2)	1,008		758		2,962		2,273
Total	$	14,097	$	12,159	$	37,958	$	36,622

Capital Expenditures	Nine Months Ended September 30,
	2022		2021
Human Nutrition & Health	$	22,513	$	14,492
Animal Nutrition & Health	8,748		4,557
Specialty Products	3,139		2,281
Other and Unallocated (2)	550		238
Total	$	34,950	$	21,568

(1) 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.

(2) 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: (i) Transaction and integration costs, ERP implementation costs, and unallocated legal fees totaling $1,640 and $2,816 for the three and nine months ended September 30, 2022, respectively, and $305 and $1,005 for the three and nine months ended September 30, 2021, respectively, and (ii) Unallocated amortization expense of $855 and $2,475 for the three and nine months ended September 30, 2022, respectively, and $675 and $2,024 for the three and nine months ended September 30, 2021, respectively, related to an intangible asset in connection with a company-wide ERP system implementation and capitalized loan issuance costs that were included in interest expense in the Company's condensed consolidated statements of earnings.

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REVENUE

9 Months Ended

Sep. 30, 2022

Revenue from Contract with Customer [Abstract]

REVENUE

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.

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,
	2022		2021		2022		2021
Product Sales	$	233,823	$	188,573	$	677,136	$	557,683
Co-manufacturing	8,109		7,473		26,235		21,629
Consignment	1,484		829		4,064		3,260
Product Sales Revenue	243,416		196,875		707,435		582,572
Royalty Revenue	851		994		2,392		3,318
Total Revenue	$	244,267	$	197,869	$	709,827	$	585,890

The following table presents revenues disaggregated by geography, based on the shipping addresses of customers:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
United States	$	174,564	$	142,313	$	518,131	$	427,352
Foreign Countries	69,703		55,556		191,696		158,538
Total Revenue	$	244,267	$	197,869	$	709,827	$	585,890

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 and consist of three sub-streams: product sales, co-manufacturing, and consignment.

Under the co-manufacturing agreements, the Company is responsible for the manufacture of a finished good where the customer provides the majority of the raw materials.  The Company controls the manufacturing process and the ultimate end-product before it is shipped to the customer.  Based on these factors, the Company has determined that it is the principal in these agreements and therefore revenue is recognized in the gross amount of consideration the Company expects to be entitled for the goods provided.

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 HNH 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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SUPPLEMENTAL CASH FLOW INFORMATION

9 Months Ended

Sep. 30, 2022

Supplemental Cash Flow Information [Abstract]

SUPPLEMENTAL CASH FLOW INFORMATION

SUPPLEMENTAL CASH FLOW INFORMATION

Cash paid during the nine months ended September 30, 2022 and 2021 for income taxes and interest is as follows:

	Nine Months Ended September 30,
	2022		2021
Income taxes	$	26,277	$	19,563
Interest	$	6,169	$	3,492

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ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

9 Months Ended

Sep. 30, 2022

Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The changes in accumulated other comprehensive (loss)/income were as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Net foreign currency translation adjustment	$	(34,874)	$	(3,362)	$	(44,667)	$	(7,981)
Net change of cash flow hedge (see Note 20 for further information)
Unrealized gain on cash flow hedge	564		450		3,770		1,583
Tax	(137)		(109)		(920)		(379)
Net of tax	427		341		2,850		1,204
Net change in postretirement benefit plan (see Note 15 for further information)
Amortization of prior service cost	2		18		6		55
Amortization of gain	—		(4)		—		(16)
Gain arising during the period and prior service credit	—		—		(41)		(4)
Total before tax	2		14		(35)		35
Tax	—		(3)		(24)		(9)
Net of tax and adjustment	2		11		(59)		26
Total other comprehensive (loss)/income	$	(34,445)	$	(3,010)	$	(41,876)	$	(6,751)

Included in "Net foreign currency translation adjustment" were gains of $5,065 and $10,151, related to a net investment hedge, which were net of taxes of $1,635 and $3,277 for the three and nine months ended September 30, 2022, respectively. Included in "Net foreign currency translation adjustment" were gains of $1,715 and $3,888, related to a net investment hedge, which were net of taxes of $553 and $1,243 for the three and nine months ended September 30, 2021, respectively. See Note 20, "Derivative Instruments and Hedging Activities."

Accumulated other comprehensive (loss)/income at September 30, 2022 and December 31, 2021 consisted of the following:

	Foreign currency translation adjustment		Cash flow hedge		Postretirement benefit plan		Total
Balance December 31, 2021	$	(3,602)	$	(1,631)	$	240	$	(4,993)
Other comprehensive (loss)/income	(44,667)		2,850		(59)		(41,876)
Balance September 30, 2022	$	(48,269)	$	1,219	$	181	$	(46,869)

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EMPLOYEE BENEFIT PLANS

9 Months Ended

Sep. 30, 2022

Retirement Benefits [Abstract]

EMPLOYEE BENEFIT PLANS

EMPLOYEE BENEFIT PLANS

Defined Contribution Plans

The Company sponsored two 401(k) savings plans for eligible employees, which were merged into one plan on January 1st, 2021. The remaining plan allows participants to make pretax contributions and the Company matches certain percentages of those pretax contributions. The remaining plan also has a discretionary profit sharing portion and matches 401(k) contributions with shares of the Company’s Common Stock. All amounts contributed to the plan are deposited into a trust fund administered by independent trustees. On June 21, 2022, the Company completed the acquisition of Kappa, which sponsors one defined contribution plan for its employees. In addition, on August 30, 2022, the Company completed the acquisition of Bergstrom, which sponsors one defined contribution plan for its employees. The plan allows participants to make pretax and after tax contributions. Bergstrom matches certain percentages of those contributions.

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 a plan for those named as executive officers in the Company’s proxy statement.

Net periodic benefit costs for such retirement medical plans were as follows:

	Nine Months Ended September 30,
	2022		2021
Service cost	$	59	$	65
Interest cost	20		17
Amortization of prior service cost	6		55
Amortization of gain	(1)		(18)
Net periodic benefit cost	$	84	$	119

The amounts recorded for these obligations on the Company’s condensed consolidated balance sheets as of September 30, 2022 and December 31, 2021 are $1,247 and $1,293, respectively, and are included in "Other long-term obligations." 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 Plans

On May 27, 2019, the Company acquired 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, 2022 and December 31, 2021 were $607 and $684, respectively, and were included in "Other long-term obligations."

Net periodic benefit costs for such benefit pensions plans were as follows:

	Nine Months Ended September 30,
	2022		2021
Service cost with interest to end of year	$	30	$	52
Interest cost	12		11
Expected return on plan assets	(26)		(26)
Amortization of gain	—		2
Total net periodic benefit cost	$	16	$	39

Deferred Compensation Plan

On June 1, 2018, the Company established 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 $8,027 as of September 30, 2022, of which $8,011 was included in "Other long-term obligations" and $16 was included in "Accrued compensation and other benefits" on the Company's condensed consolidated balance sheets. The deferred compensation liability was $6,270 as of December 31, 2021, of which $6,251 was included in "Other long-term obligations" and $19 was included in "Accrued compensation and other benefits" on the Company’s condensed consolidated balance sheets. The related rabbi trust assets were $8,032 and $6,267 as of September 30, 2022 and December 31, 2021, respectively, and were included in "Other non-current assets" on the Company's condensed consolidated balance sheets.

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COMMITMENTS AND CONTINGENCIES

9 Months Ended

Sep. 30, 2022

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

Aggregate future minimum rental payments required under all non-cancelable operating and finance leases at September 30, 2022 are as follows:

Year
October 1, 2022 to December 31, 2022	$	1,111
2023	4,214
2024	4,053
2025	3,074
2026	2,678
2027	2,200
Thereafter	6,225
Total minimum lease payments	$	23,555

The Company’s Verona, Missouri facility, while held by a prior owner, was designated by 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 the prior owner 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 certain potential liabilities associated with the Superfund site. In February 2022, BCP Ingredients, Inc. ("BCP"), the Company subsidiary that operates the site, along with the prior owner of the site received a Special Notice Letter from EPA for the performance of a focused remedial investigation/feasibility study ("RI/FS") at the site with regard to the presence of certain contaminants at the site, focusing primarily on the presence of 1,4 dioxane and chlorobenzene. BCP and the site's prior owner are currently negotiating with the EPA and the State of Missouri with respect to a proposed Administrative Settlement Agreement and Order on Consent that defines the scope and performance of the focused RI/FS.

From time to time, the Company is involved in a variety of lawsuits, claims and proceedings, including those related to environmental matters. Subject to the uncertainties inherent in estimating future costs for contingent liabilities, except as expressly set forth in this note, management believes that any liability which may result from such matters will not have a material adverse effect on the Company’s consolidated financial position, results of operations, liquidity or cash flows.

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FAIR VALUE OF FINANCIAL INSTRUMENTS

9 Months Ended

Sep. 30, 2022

Fair Value Disclosures [Abstract]

FAIR VALUE OF FINANCIAL INSTRUMENTS

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, 2022 and December 31, 2021 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 necessarily 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. The carrying value of debt approximates fair value as the interest rate is based on market and the Company’s consolidated leverage ratio.  The Company’s financial instruments also include cash equivalents, 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. Cash and cash equivalents at September 30, 2022 and December 31, 2021 includes $921 and $933 in money market funds, respectively.

Non-current assets at September 30, 2022 and December 31, 2021 includes $8,032 and $6,267, respectively, of rabbi trust funds related to the Company's deferred compensation plan. The money market and rabbi trust funds are valued using level one inputs, as defined by ASC 820, “Fair Value Measurement.”

The contingent consideration liabilities included on the balance sheet at of September 30, 2022 amount to $30,547 and were valued using level three inputs, as defined by ASC 820, "Fair Value Measurement".

The Company also has derivative financial instruments, consisting of a cross-currency swap and an interest rate swap, which are included in "Derivative assets" or "Derivative liabilities" in the Company's condensed consolidated balance sheets (see Note 20, "Derivative Instruments and Hedging Activities"). The fair values of these derivative instruments are determined based on Level 2 inputs, using significant inputs that are observable either directly or indirectly, including interest rate curves and implied volatilities. The derivative assets related to the cross-currency swap and the interest rate swap were $12,928 and $1,612 at September 30, 2022, respectively. The derivative liability related to the cross-currency swap and the interest rate swap was $500 and $2,158 at December 31, 2021, respectively.

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RELATED PARTY TRANSACTIONS	9 Months Ended
	Sep. 30, 2022
Related Party Transactions [Abstract]
RELATED PARTY TRANSACTIONS	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 $1,188 and $3,185 for the three and nine months ended September 30, 2022, respectively, and $901 and $2,648 for the three and nine months ended September 30, 2021, respectively. The raw materials purchased and subsequently sold amounted to $11,937 and $32,158 for the three and nine months ended September 30, 2022, respectively, and $6,419 and $18,461 for the three and nine months ended September 30, 2021, 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 $9,249 and $23,971 for the three and nine months ended September 30, 2022, respectively, and $4,944 and $14,545 for the three and nine months ended September 30, 2021, respectively. At September 30, 2022 and December 31, 2021, the Company had receivables of $13,126 and $10,504, respectively, recorded in accounts receivable from St. Gabriel CC Company, LLC for services rendered and raw materials sold. The Company also had payables of $9,339 and $7,552, respectively, recorded in accounts payable for finished goods received from St. Gabriel CC Company, LLC. In addition, the Company had receivables in the amount of $164 related to non-contractual monies owed from St. Gabriel CC Company, LLC, recorded in receivables as of December 31, 2021. There were no such receivables as of September 30, 2022. 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, 2022 and December 31, 2021.

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LEASES

9 Months Ended

Sep. 30, 2022

Leases [Abstract]

LEASES

LEASESThe 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. As a result of electing the practical expedient within ASU 2016-02, variable lease payments are combined and recognized on the balance sheet in the event that those charges and any related increases are explicitly stated in the lease. Such payments include common area

maintenance charges, property taxes, and insurance charges and are recorded in the right of use asset and corresponding liability when the payments are stated in the lease with (a) fixed or in-substance fixed amounts, or (b) a variable payment based on an index or rate. Due to the acquisitive nature of the Company and the potential for synergies upon integration of acquired entities, the Company determined that the reasonably certain criterion could not be met for any renewal periods beginning two years from September 30, 2022. In addition, the Company has historically not been exercising purchase options under the equipment leases as it does not make economic sense to buy the equipment. Instead, the Company has historically replaced the equipment with new leases. Therefore, the Company determined that the reasonably certain criterion could not be met as it relates to purchase options. The Company has no residual value guarantees in lease transactions.

On June 22, 2022, the Company signed a ten-year real estate sublease for approximately 40,000 square feet of office space, which will serve as the Company's corporate headquarters and a laboratory facility. The sublease will not commence until the sublandlord substantially completes its work per the sublease agreement, which will occur in the fourth quarter of 2022. The Company will recognize a right of use asset and a lease liability at the commencement date based on ASC 842, Lease Accounting. As of September 30, 2022 the Company did not record a right of use asset or lease liability on the balance sheet in connection with this lease.

The Company has not identified any embedded leases. As indicated above, 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 2022: (1) 1-2 years, 1.45% (2) 3-4 years, 2.04% (3) 5-9 years, 2.38% and (4) 10+ years, 3.10%.

In connection with its December 2019 acquisition of Zumbro River Brand, Inc., the Company assumed the finance lease commitment for a warehouse, with an expiration date of March 31, 2033. The warehouse can be purchased at a pre-determined price beginning in 2023. At September 30, 2022 and December 31, 2021, the Company had finance lease liabilities of $2,345 and $2,470, respectively, which were recorded under "Lease liabilities" (current and non-current) on the condensed consolidated balance sheets.

Right of use assets and lease liabilities at September 30, 2022 and December 31, 2021 are summarized as follows:

Right of use assets	September 30, 2022		December 31, 2021
Operating leases	$	11,617	$	6,929
Finance leases	2,202		2,359
Total	$	13,819	$	9,288

Lease liabilities - current	September 30, 2022		December 31, 2021
Operating leases	$	3,727	$	2,194
Finance leases	173		167
Total	$	3,900	$	2,361

Lease liabilities - non-current	September 30, 2022		December 31, 2021
Operating leases	$	8,069	$	4,811
Finance leases	2,172		2,303
Total	$	10,241	$	7,114

For the three and nine months ended September 30, 2022 and 2021, 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,
	2022			2021			2022			2021
Lease Cost
Operating lease cost	$	1,190		$	788		$	2,782		$	2,274
Finance lease cost
Amortization of ROU asset	53			52			157			157
Interest on lease liabilities	30			32			91			98
Total finance lease	83			84			248			255
Total lease cost	$	1,273		$	872		$	3,030		$	2,529
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	1,164		$	761		$	2,772		$	2,249
Operating cash flows from finance leases	30			32			91			98
Financing cash flows from finance leases	42			40			125			118
	$	1,236		$	833		$	2,988		$	2,465
Right-of-use assets obtained in exchange for new operating lease liabilities, net of right-of-use assets disposed	$	2,275		$	502		$	7,552		$	2,914
Weighted-average remaining lease term - operating leases	3.83 years			4.32 years			3.83 years			4.32 years
Weighted-average remaining lease term - finance leases	10.65 years			11.67 years			10.65 years			11.67 years
Weighted-average discount rate - operating leases	2.9		%	3.7		%	2.9		%	3.7		%
Weighted-average discount rate - finance leases	5.1		%	5.1		%	5.1		%	5.1		%

Rent expense charged to operations under operating lease agreements for the three and nine months ended September 30, 2022 aggregated to approximately $1,190 and $2,782, respectively, and $788 and $2,274 for the three and nine months ended September 30, 2021, respectively.

LEASES

LEASESThe 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. As a result of electing the practical expedient within ASU 2016-02, variable lease payments are combined and recognized on the balance sheet in the event that those charges and any related increases are explicitly stated in the lease. Such payments include common area

maintenance charges, property taxes, and insurance charges and are recorded in the right of use asset and corresponding liability when the payments are stated in the lease with (a) fixed or in-substance fixed amounts, or (b) a variable payment based on an index or rate. Due to the acquisitive nature of the Company and the potential for synergies upon integration of acquired entities, the Company determined that the reasonably certain criterion could not be met for any renewal periods beginning two years from September 30, 2022. In addition, the Company has historically not been exercising purchase options under the equipment leases as it does not make economic sense to buy the equipment. Instead, the Company has historically replaced the equipment with new leases. Therefore, the Company determined that the reasonably certain criterion could not be met as it relates to purchase options. The Company has no residual value guarantees in lease transactions.

On June 22, 2022, the Company signed a ten-year real estate sublease for approximately 40,000 square feet of office space, which will serve as the Company's corporate headquarters and a laboratory facility. The sublease will not commence until the sublandlord substantially completes its work per the sublease agreement, which will occur in the fourth quarter of 2022. The Company will recognize a right of use asset and a lease liability at the commencement date based on ASC 842, Lease Accounting. As of September 30, 2022 the Company did not record a right of use asset or lease liability on the balance sheet in connection with this lease.

The Company has not identified any embedded leases. As indicated above, 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 2022: (1) 1-2 years, 1.45% (2) 3-4 years, 2.04% (3) 5-9 years, 2.38% and (4) 10+ years, 3.10%.

In connection with its December 2019 acquisition of Zumbro River Brand, Inc., the Company assumed the finance lease commitment for a warehouse, with an expiration date of March 31, 2033. The warehouse can be purchased at a pre-determined price beginning in 2023. At September 30, 2022 and December 31, 2021, the Company had finance lease liabilities of $2,345 and $2,470, respectively, which were recorded under "Lease liabilities" (current and non-current) on the condensed consolidated balance sheets.

Right of use assets and lease liabilities at September 30, 2022 and December 31, 2021 are summarized as follows:

Right of use assets	September 30, 2022		December 31, 2021
Operating leases	$	11,617	$	6,929
Finance leases	2,202		2,359
Total	$	13,819	$	9,288

Lease liabilities - current	September 30, 2022		December 31, 2021
Operating leases	$	3,727	$	2,194
Finance leases	173		167
Total	$	3,900	$	2,361

Lease liabilities - non-current	September 30, 2022		December 31, 2021
Operating leases	$	8,069	$	4,811
Finance leases	2,172		2,303
Total	$	10,241	$	7,114

For the three and nine months ended September 30, 2022 and 2021, 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,
	2022			2021			2022			2021
Lease Cost
Operating lease cost	$	1,190		$	788		$	2,782		$	2,274
Finance lease cost
Amortization of ROU asset	53			52			157			157
Interest on lease liabilities	30			32			91			98
Total finance lease	83			84			248			255
Total lease cost	$	1,273		$	872		$	3,030		$	2,529
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	1,164		$	761		$	2,772		$	2,249
Operating cash flows from finance leases	30			32			91			98
Financing cash flows from finance leases	42			40			125			118
	$	1,236		$	833		$	2,988		$	2,465
Right-of-use assets obtained in exchange for new operating lease liabilities, net of right-of-use assets disposed	$	2,275		$	502		$	7,552		$	2,914
Weighted-average remaining lease term - operating leases	3.83 years			4.32 years			3.83 years			4.32 years
Weighted-average remaining lease term - finance leases	10.65 years			11.67 years			10.65 years			11.67 years
Weighted-average discount rate - operating leases	2.9		%	3.7		%	2.9		%	3.7		%
Weighted-average discount rate - finance leases	5.1		%	5.1		%	5.1		%	5.1		%

Rent expense charged to operations under operating lease agreements for the three and nine months ended September 30, 2022 aggregated to approximately $1,190 and $2,782, respectively, and $788 and $2,274 for the three and nine months ended September 30, 2021, respectively.

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DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

9 Months Ended

Sep. 30, 2022

Derivative Instruments and Hedging Activities Disclosure [Abstract]

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

The Company is exposed to market fluctuations in interest rates as well as variability in foreign exchange rates. In May 2019, the Company entered into an interest rate swap (cash flow hedge) with JP Morgan Chase, N.A. (the "Swap Counterparty") and a cross-currency swap (net investment hedge) with JP Morgan Chase, N.A. (the "Bank Counterparty"). The Company's primary objective for holding derivative financial instruments is to manage interest rate risk and foreign currency risk.

On May 28, 2019, the Company entered into a pay-fixed (2.05%), receive-floating interest rate swap with a notional amount of $108,569 and a maturity date of June 27, 2023. The receive-floating interest rate was based on the London Interbank Offered Rate ("LIBOR") in the original trade agreement. Due to the discontinuation of LIBOR, in the third quarter of 2022, the Company modified its existing interest rate swap to reference 1-month CME Term SOFR (CME Group Benchmark Administration Limited as administrator of the forward-looking term Secured Overnight Financing Rate) in the amended trade terms. This modification was made under the relief provided for in ASC 848, "Reference Rate Reform" and therefore the derivative continues to qualify for hedge accounting. The Company's risk management objective and strategy with respect to the interest rate swap is to protect the Company against adverse fluctuations in interest rates by reducing its exposure to variability in cash flows relating to interest

payments on a portion of its outstanding debt. The Company is meeting its objective since changes in the cash flows of the interest rate swap are expected to exactly offset the changes in the cash flows attributable to fluctuations in the contractually specified interest rate on the interest payments associated with the 2022 Credit Agreement. The net interest income related to the interest rate swap contract was $35 for the three months ended September 30, 2022. The net interest expense related to the interest rate swap contract was $842 for the nine months ended September 30, 2022, and $538 and $1,593 for the three and nine months ended September 30, 2021, respectively. The net interest income and expense were recorded in the condensed consolidated statements of earnings under "Interest expense, net."

On May 28, 2019, the Company also entered into a pay-fixed (0.00%), receive-fixed (2.05%) cross-currency swap to manage foreign exchange risk related to the Company's net investment in Chemogas. The derivative has a notional amount of $108,569, an effective date of May 28, 2019, and a maturity date of June 27, 2023. The interest income related to the cross-currency swap contract was $569 and $1,682 for the three and nine months ended September 30, 2022, and $563 and $1,682 for the three and nine months ended September 30, 2021, respectively, which were recorded in the condensed consolidated statements of earnings under "Interest expense, net."

The derivative instruments are with a single counterparty and are subject to a contractual agreement that provides for the net settlement of all contracts through a single payment in a single currency in the event of default on or termination of any one contract. As such, the derivative instruments are categorized as a master netting arrangement and presented as a net "Derivative asset" or "Derivative liability" on the condensed consolidated balance sheets.

As of September 30, 2022 and December 31, 2021, the fair value of the derivative instruments is presented as follows in the Company's condensed consolidated balance sheets:

Derivative assets (liabilities)	September 30, 2022		December 31, 2021
Interest rate swap	$	1,612	$	(2,158)
Cross-currency swap	12,928		(500)
Derivative assets (liabilities)	$	14,540	$	(2,658)

On a quarterly basis, the Company assesses whether the hedging relationship related to the interest rate swap is highly effective at achieving offsetting changes in cash flow attributable to the risk being hedged based on the following factors: (1) the key features and terms as enumerated above for the interest rate swap and hedged transactions match during the period (2) it is probable that the Swap Counterparty will not default on its obligations under the swap, and (3) the Company performs a qualitative review each quarter to assess whether the relationship qualifies for hedge accounting.

In addition, on a quarterly basis the Company assesses whether the hedging relationship related to the cross-currency swap is highly effective based on the following evaluations: (1) the Company will always have a sufficient amount of non-functional currency (EUR) net investment balance to at least meet the cross-currency notional amount until the maturity date of the hedge (2) it is probable that the Swap Counterparty will not default on its obligations under the swap, and (3) the Company performs a qualitative review each quarter to assess whether the relationship qualifies for hedge accounting.

If any mismatches arise for either the interest rate swap or cross-currency swap, the Company will perform a regression analysis to determine if the hedged transaction is highly effective. If determined not to be highly effective, the Company will discontinue hedge accounting.

As of September 30, 2022, the Company assessed the hedging relationships for the interest rate swap and cross-currency swap and determined them to be highly effective. As such, the net change in fair values of the derivative instruments was recorded in accumulated other comprehensive income.

Losses and gains on our hedging instruments are recognized in accumulated other comprehensive income (loss) and categorized as follows for the three and nine months ended September 30, 2022 and 2021:

	Location within Statements of Comprehensive Income	Three Months Ended September 30,				Nine Months Ended September 30,
		2022		2021		2022		2021
Cash flow hedge (interest rate swap), net of tax	Unrealized gain/(loss) on cash flow hedge, net	$	427	$	341	$	2,850	$	1,204
Net investment hedge (cross-currency swap), net of tax	Net foreign currency translation adjustment	5,065		1,715		10,151		3,888
Total		$	5,492	$	2,056	$	13,001	$	5,092

On June 21, 2022, the Company completed the acquisition of Kappa (as defined in Note 2 "Significant Acquisitions"). In the process of acquiring Kappa, the Company entered into four short-term foreign currency exchange forward contracts with JP Morgan Chase, N.A to manage fluctuations in foreign currency exchange rates related to the acquisition. The Company did not designate these contracts as hedged transactions under the applicable sections of ASC Topic 815, "Derivatives and Hedging". For the nine months ended September 30, 2022, the net gains on these forward contracts of $512 were recorded in other income or loss in the condensed consolidated statements of earnings. As of September 30, 2022, the Company did not maintain any open foreign currency exchange forward contracts as all four contracts expired before June 30, 2022.

The following table summarizes the key terms of the four forward exchange contracts:.

Date entered into	Date expired on	Balchem to sell		Balchem to buy
June 15, 2022	June 21, 2022	USD	294,555	NOK	2,924,553
June 15, 2022	June 17, 2022	USD	6,436	EUR	6,180
June 15, 2022	June 21, 2022	USD	16,640	EUR	15,972
June 15, 2022	June 21, 2022	EUR	15,972	NOK	165,210

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CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Policies)

9 Months Ended

Sep. 30, 2022

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Reclassifications

Certain reclassifications have been made to prior period amounts to conform with the current period's presentation.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

Recently Adopted Accounting Standards

In March 2020, the FASB issued Accounting Standards Update ("ASU") 2020-04, "Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting." This ASU provides temporary optional guidance to ease the potential burden in accounting for reference rate reform. The new guidance provides optional expedients and exceptions for applying GAAP to contract modifications and hedging relationships, subject to meeting certain criteria, that reference LIBOR or another reference rate expected to be discontinued. The ASU is intended to help stakeholders during the global market-wide reference rate transition period. Therefore, this Standard Update is in effect from March 12, 2020 through December 31, 2022. In January 2021, the FASB issued ASU 2021-01, "Reference Rate Reform (Topic 848): Scope." ASU 2021-01 clarifies that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition. The ASU also amends the expedients and exceptions in Topic 848 to capture the incremental consequences of the scope clarification and to tailor the existing guidance to derivative instruments affected by the discounting transition. The Company adopted the Standard Update in 2021. Due to the discontinuation of LIBOR and under the relief provided by Topic 848, during the third quarter of 2022, the Company modified its existing interest rate swap and replaced LIBOR with 1-month CME Term SOFR (see Note 20, "Derivative Instruments and Hedging Activities "). The modification of the agreement did not have a significant impact on the Company's consolidated financial statements and disclosures.

In December 2019, the FASB issued ASU 2019-12, "Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes." ASU 2019-12 simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The amendments also improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance. ASU 2019-12 became effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. The Company adopted ASU 2019-12 on January 1, 2021. The adoption of ASU 2019-12 did not have a significant impact on the Company's consolidated financial statements and disclosures.

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SIGNIFICANT ACQUISITIONS (Tables)

9 Months Ended

Sep. 30, 2022

Business Combination and Asset Acquisition [Abstract]

Schedule of Estimated Fair Value of Assets Acquired and Liabilities Assumed

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed:

Cash and cash equivalents	$	773
Accounts receivable	4,699
Inventories	3,922
Property, plant and equipment	2,700
Right of use assets	866
Customer relationships	26,500
Developed technology	4,700
Trademarks	2,300
Other assets	197
Accounts payable	(685)
Bank debt	(206)
Lease liabilities	(871)
Other liabilities	(1,380)
Goodwill	34,060
Total consideration on acquisition date	77,575
Contingent consideration liability	(7,835)
Amount paid to shareholders	69,740
To pay off bank debt and certain other obligations	1,152
Total amount paid	$	70,892

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed. The transactions were completed in Norwegian kroner ("NOK") and the amounts were translated to U.S. dollars ("USD") using the foreign currency exchange rate as of June 21, 2022.

Cash and cash equivalents	$	6,365
Accounts receivable	8,036
Inventories	17,701
Property, plant and equipment	9,854
Right of use assets	3,349
Customer relationships	110,012
Developed technology	17,662
Trademarks	6,055
Other assets	2,399
Accounts payable	(3,301)
Bank debt	(30,648)
Lease liabilities	(3,349)
Other liabilities	(4,373)
Deferred income taxes, net	(30,069)
Goodwill	217,570
Total consideration on acquisition date	327,263
Contingent consideration liability	(24,726)
Net gain on foreign currency exchange forward contracts	(512)
Amount paid to shareholders	302,025
Kappa bank debt paid on acquisition date	30,648
Total amount paid on acquisition date	$	332,673

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STOCKHOLDERS' EQUITY (Tables)

9 Months Ended

Sep. 30, 2022

Stockholders' Equity Note [Abstract]

Schedule of Compensation Cost on Net Earnings

The Company’s results for the three and nine months ended September 30, 2022 and 2021 reflected the following stock-based compensation cost, and such compensation cost had the following effects on net earnings:

	Increase/(Decrease) for the				Increase/(Decrease) for the
	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Cost of sales	$	386	$	444	$	1,062	$	1,188
Operating expenses	2,563		2,451		8,776		7,621
Net earnings	(2,251)		(2,232)		(7,563)		(6,801)

Schedule of Stock Option Activity

Option activity for the nine months ended September 30, 2022 and 2021 is summarized below:

For the nine months ended September 30, 2022	Shares (000s)	Weighted Average Exercise Price		Aggregate Intrinsic Value		Weighted Average Remaining Contractual Term
Outstanding as of December 31, 2021	867	$	88.19	$	69,711
Granted	239	139.04
Exercised	(31)	70.06
Forfeited	(12)	125.05
Canceled	—	—
Outstanding as of September 30, 2022	1,063	$	99.74	$	27,308	6.6
Exercisable as of September 30, 2022	656	$	81.45	$	26,312	5.2

For the nine months ended September 30, 2021	Shares (000s)	Weighted Average Exercise Price		Aggregate Intrinsic Value		Weighted Average Remaining Contractual Term
Outstanding as of December 31, 2020	858	$	80.58	$	29,735
Granted	129	119.12
Exercised	(100)	63.49
Forfeited	(10)	106.93
Canceled	(1)	74.57
Outstanding as of September 30, 2021	876	$	87.91	$	50,090	6.6
Exercisable as of September 30, 2021	540	$	74.81	$	37,961	5.5

Schedule of Other Information Pertaining to Stock Option Activity

Other information pertaining to option activity during the three and nine months ended September 30, 2022 and 2021 is as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Weighted-average fair value of options granted	$	48.55	$	—	$	44.77	$	33.11
Total intrinsic value of stock options exercised ($000s)	$	815	$	3,196	$	1,964	$	6,927

Schedule of Non-vested Restricted Stock Activity

Non-vested restricted stock activity for the nine months ended September 30, 2022 and 2021 is summarized below:

	Nine Months Ended September 30,
	2022			2021
	Shares (000s)	Weighted Average Grant Date Fair Value		Shares (000s)	Weighted Average Grant Date Fair Value
Non-vested balance as of December 31	166	$	99.70	159	$	90.71
Granted	40	137.03		38	119.59
Vested	(78)	81.11		(16)	86.79
Forfeited	(7)	116.72		(5)	95.71
Non-vested balance as of September 30	121	$	122.96	176	$	97.17

Schedule of Non-vested Performance Share Activity

Non-vested performance share activity for the nine months ended September 30, 2022 and 2021 is summarized below:

	Nine Months Ended September 30,
	2022			2021
	Shares (000s)	Weighted Average Grant Date Fair Value		Shares (000s)	Weighted Average Grant Date Fair Value
Non-vested balance as of December 31	69	$	110.72	71	$	91.99
Granted	39	114.22		36	108.74
Vested	(35)	53.17		(24)	70.64
Forfeited	(3)	84.09		(11)	74.57
Non-vested balance as of September 30	70	$	127.69	72	$	110.22

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INVENTORIES (Tables)

9 Months Ended

Sep. 30, 2022

Inventory Disclosure [Abstract]

Schedule of Inventories

Inventories at September 30, 2022 and December 31, 2021 consisted of the following:

	September 30, 2022		December 31, 2021
Raw materials	$	41,371	$	28,639
Work in progress	11,879		10,563
Finished goods	86,214		51,856
Total inventories	$	139,464	$	91,058

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PROPERTY, PLANT AND EQUIPMENT (Tables)

9 Months Ended

Sep. 30, 2022

Property, Plant and Equipment [Abstract]

Schedule of Property, Plant and Equipment

Property, plant and equipment at September 30, 2022 and December 31, 2021 are summarized as follows:

	September 30, 2022		December 31, 2021
Land	$	10,993	$	11,692
Building	90,239		89,602
Equipment	267,611		253,995
Construction in progress	73,163		52,930
	442,006		408,219
Less: accumulated depreciation	181,998		170,702
Property, plant and equipment, net	$	260,008	$	237,517

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INTANGIBLE ASSETS (Tables)

9 Months Ended

Sep. 30, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Identifiable Intangible Assets

Identifiable intangible assets with finite lives at September 30, 2022 and December 31, 2021 are summarized as follows:

	Amortization Period (in years)	Gross Carrying Amount at 9/30/2022		Accumulated Amortization at 9/30/2022		Gross Carrying Amount at 12/31/2021		Accumulated Amortization at 12/31/2021
Customer relationships & lists	10-20	$	361,747	$	185,381	$	240,059	$	173,489
Trademarks & trade names	2-17	50,487		32,285		43,116		28,985
Developed technology	5-12	40,816		15,524		20,234		14,607
Other	2-18	24,600		17,137		23,921		15,584
		$	477,650	$	250,327	$	327,330	$	232,665

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NET EARNINGS PER SHARE (Tables)

9 Months Ended

Sep. 30, 2022

Earnings Per Share [Abstract]

Reconciliation of the Net Earnings and Shares Used in Calculating Basic and Diluted 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,
	2022		2021		2022		2021
Net Earnings - Basic and Diluted	$	25,249	$	25,013	$	83,961	$	71,155
Shares (000s)
Weighted Average Common Shares - Basic	32,010		32,194		32,017		32,227
Effect of Dilutive Securities – Stock Options, Restricted Stock, and Performance Shares	357		450		375		424
Weighted Average Common Shares - Diluted	32,367		32,644		32,392		32,651
Net Earnings Per Share - Basic	$	0.79	$	0.78	$	2.62	$	2.21
Net Earnings Per Share - Diluted	$	0.78	$	0.77	$	2.59	$	2.18

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SEGMENT INFORMATION (Tables)

9 Months Ended

Sep. 30, 2022

Segment Reporting [Abstract]

Schedule of Segment Reporting Information

The segment information is summarized as follows:

Business Segment Assets	September 30, 2022		December 31, 2021
Human Nutrition & Health	$	1,169,395	$	727,131
Animal Nutrition & Health	189,652		158,971
Specialty Products	169,817		184,628
Other and Unallocated (1)	104,144		128,595
Total	$	1,633,008	$	1,199,325

Business Segment Net Sales	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Human Nutrition & Health	$	142,655	$	111,200	$	396,728	$	327,187
Animal Nutrition & Health	65,604		56,192		197,546		161,821
Specialty Products	29,641		27,615		99,622		89,645
Other and Unallocated (2)	6,367		2,862		15,931		7,237
Total	$	244,267	$	197,869	$	709,827	$	585,890

Business Segment Earnings Before Income Taxes	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Human Nutrition & Health	$	20,584	$	19,801	$	64,592	$	58,512
Animal Nutrition & Health	8,036		7,442		26,943		16,059
Specialty Products	7,105		6,455		24,785		23,373
Other and Unallocated (2)	(2,100)		(1,185)		(4,439)		(4,263)
Interest and other expense	(2,540)		(428)		(3,908)		(1,594)
Total	$	31,085	$	32,085	$	107,973	$	92,087

Depreciation/Amortization	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Human Nutrition & Health	$	9,569	$	7,472	$	24,316	$	22,486
Animal Nutrition & Health	1,681		1,932		5,010		5,512
Specialty Products	1,839		1,997		5,670		6,351
Other and Unallocated (2)	1,008		758		2,962		2,273
Total	$	14,097	$	12,159	$	37,958	$	36,622

Capital Expenditures	Nine Months Ended September 30,
	2022		2021
Human Nutrition & Health	$	22,513	$	14,492
Animal Nutrition & Health	8,748		4,557
Specialty Products	3,139		2,281
Other and Unallocated (2)	550		238
Total	$	34,950	$	21,568

(1) 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.

(2) 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: (i) Transaction and integration costs, ERP implementation costs, and unallocated legal fees totaling $1,640 and $2,816 for the three and nine months ended September 30, 2022, respectively, and $305 and $1,005 for the three and nine months ended September 30, 2021, respectively, and (ii) Unallocated amortization expense of $855 and $2,475 for the three and nine months ended September 30, 2022, respectively, and $675 and $2,024 for the three and nine months ended September 30, 2021, respectively, related to an intangible asset in connection with a company-wide ERP system implementation and capitalized loan issuance costs that were included in interest expense in the Company's condensed consolidated statements of earnings.

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REVENUE (Tables)

9 Months Ended

Sep. 30, 2022

Revenue from Contract with Customer [Abstract]

Schedule of Disaggregation of Revenues

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,
	2022		2021		2022		2021
Product Sales	$	233,823	$	188,573	$	677,136	$	557,683
Co-manufacturing	8,109		7,473		26,235		21,629
Consignment	1,484		829		4,064		3,260
Product Sales Revenue	243,416		196,875		707,435		582,572
Royalty Revenue	851		994		2,392		3,318
Total Revenue	$	244,267	$	197,869	$	709,827	$	585,890

The following table presents revenues disaggregated by geography, based on the shipping addresses of customers:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
United States	$	174,564	$	142,313	$	518,131	$	427,352
Foreign Countries	69,703		55,556		191,696		158,538
Total Revenue	$	244,267	$	197,869	$	709,827	$	585,890

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SUPPLEMENTAL CASH FLOW INFORMATION (Tables)

9 Months Ended

Sep. 30, 2022

Supplemental Cash Flow Information [Abstract]

Schedule of Supplemental Cash Flow Information

Cash paid during the nine months ended September 30, 2022 and 2021 for income taxes and interest is as follows:

	Nine Months Ended September 30,
	2022		2021
Income taxes	$	26,277	$	19,563
Interest	$	6,169	$	3,492

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ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Tables)

9 Months Ended

Sep. 30, 2022

Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]

Schedule of Changes in Accumulated Other Comprehensive Income (Loss)

The changes in accumulated other comprehensive (loss)/income were as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Net foreign currency translation adjustment	$	(34,874)	$	(3,362)	$	(44,667)	$	(7,981)
Net change of cash flow hedge (see Note 20 for further information)
Unrealized gain on cash flow hedge	564		450		3,770		1,583
Tax	(137)		(109)		(920)		(379)
Net of tax	427		341		2,850		1,204
Net change in postretirement benefit plan (see Note 15 for further information)
Amortization of prior service cost	2		18		6		55
Amortization of gain	—		(4)		—		(16)
Gain arising during the period and prior service credit	—		—		(41)		(4)
Total before tax	2		14		(35)		35
Tax	—		(3)		(24)		(9)
Net of tax and adjustment	2		11		(59)		26
Total other comprehensive (loss)/income	$	(34,445)	$	(3,010)	$	(41,876)	$	(6,751)

Schedule of Accumulated Other Comprehensive Income (Loss)

Accumulated other comprehensive (loss)/income at September 30, 2022 and December 31, 2021 consisted of the following:

	Foreign currency translation adjustment		Cash flow hedge		Postretirement benefit plan		Total
Balance December 31, 2021	$	(3,602)	$	(1,631)	$	240	$	(4,993)
Other comprehensive (loss)/income	(44,667)		2,850		(59)		(41,876)
Balance September 30, 2022	$	(48,269)	$	1,219	$	181	$	(46,869)

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EMPLOYEE BENEFIT PLANS (Tables)

9 Months Ended

Sep. 30, 2022

Retirement Benefits [Abstract]

Schedule of Net Periodic Benefit Cost

Net periodic benefit costs for such retirement medical plans were as follows:

	Nine Months Ended September 30,
	2022		2021
Service cost	$	59	$	65
Interest cost	20		17
Amortization of prior service cost	6		55
Amortization of gain	(1)		(18)
Net periodic benefit cost	$	84	$	119

Net periodic benefit costs for such benefit pensions plans were as follows:

	Nine Months Ended September 30,
	2022		2021
Service cost with interest to end of year	$	30	$	52
Interest cost	12		11
Expected return on plan assets	(26)		(26)
Amortization of gain	—		2
Total net periodic benefit cost	$	16	$	39

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COMMITMENTS AND CONTINGENCIES (Tables)

9 Months Ended

Sep. 30, 2022

Commitments and Contingencies Disclosure [Abstract]

Aggregate Future Minimum Rental Payments Required under Non-Cancelable Operating Leases

Aggregate future minimum rental payments required under all non-cancelable operating and finance leases at September 30, 2022 are as follows:

Year
October 1, 2022 to December 31, 2022	$	1,111
2023	4,214
2024	4,053
2025	3,074
2026	2,678
2027	2,200
Thereafter	6,225
Total minimum lease payments	$	23,555

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LEASES (Tables)

9 Months Ended

Sep. 30, 2022

Leases [Abstract]

Schedule of Right of Use Asset and Lease Liabilities

Right of use assets and lease liabilities at September 30, 2022 and December 31, 2021 are summarized as follows:

Right of use assets	September 30, 2022		December 31, 2021
Operating leases	$	11,617	$	6,929
Finance leases	2,202		2,359
Total	$	13,819	$	9,288

Lease liabilities - current	September 30, 2022		December 31, 2021
Operating leases	$	3,727	$	2,194
Finance leases	173		167
Total	$	3,900	$	2,361

Lease liabilities - non-current	September 30, 2022		December 31, 2021
Operating leases	$	8,069	$	4,811
Finance leases	2,172		2,303
Total	$	10,241	$	7,114

Schedule of Lease Cost

For the three and nine months ended September 30, 2022 and 2021, 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,
	2022			2021			2022			2021
Lease Cost
Operating lease cost	$	1,190		$	788		$	2,782		$	2,274
Finance lease cost
Amortization of ROU asset	53			52			157			157
Interest on lease liabilities	30			32			91			98
Total finance lease	83			84			248			255
Total lease cost	$	1,273		$	872		$	3,030		$	2,529
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	1,164		$	761		$	2,772		$	2,249
Operating cash flows from finance leases	30			32			91			98
Financing cash flows from finance leases	42			40			125			118
	$	1,236		$	833		$	2,988		$	2,465
Right-of-use assets obtained in exchange for new operating lease liabilities, net of right-of-use assets disposed	$	2,275		$	502		$	7,552		$	2,914
Weighted-average remaining lease term - operating leases	3.83 years			4.32 years			3.83 years			4.32 years
Weighted-average remaining lease term - finance leases	10.65 years			11.67 years			10.65 years			11.67 years
Weighted-average discount rate - operating leases	2.9		%	3.7		%	2.9		%	3.7		%
Weighted-average discount rate - finance leases	5.1		%	5.1		%	5.1		%	5.1		%

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DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Tables)

9 Months Ended

Sep. 30, 2022

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Fair Value of Derivative Instruments

As of September 30, 2022 and December 31, 2021, the fair value of the derivative instruments is presented as follows in the Company's condensed consolidated balance sheets:

Derivative assets (liabilities)	September 30, 2022		December 31, 2021
Interest rate swap	$	1,612	$	(2,158)
Cross-currency swap	12,928		(500)
Derivative assets (liabilities)	$	14,540	$	(2,658)

Schedule of Gains (Losses) on Hedging Instruments

Losses and gains on our hedging instruments are recognized in accumulated other comprehensive income (loss) and categorized as follows for the three and nine months ended September 30, 2022 and 2021:

	Location within Statements of Comprehensive Income	Three Months Ended September 30,				Nine Months Ended September 30,
		2022		2021		2022		2021
Cash flow hedge (interest rate swap), net of tax	Unrealized gain/(loss) on cash flow hedge, net	$	427	$	341	$	2,850	$	1,204
Net investment hedge (cross-currency swap), net of tax	Net foreign currency translation adjustment	5,065		1,715		10,151		3,888
Total		$	5,492	$	2,056	$	13,001	$	5,092

Summary Of Key Terms of Forward Exchange Contracts

The following table summarizes the key terms of the four forward exchange contracts:.

Date entered into	Date expired on	Balchem to sell		Balchem to buy
June 15, 2022	June 21, 2022	USD	294,555	NOK	2,924,553
June 15, 2022	June 17, 2022	USD	6,436	EUR	6,180
June 15, 2022	June 21, 2022	USD	16,640	EUR	15,972
June 15, 2022	June 21, 2022	EUR	15,972	NOK	165,210

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SIGNIFICANT ACQUISITIONS - Narrative (Details) kr in Thousands				3 Months Ended		9 Months Ended
	Aug. 30, 2022 USD ($)	Jun. 21, 2022 USD ($)	Jun. 21, 2022 NOK (kr)	Sep. 30, 2022 USD ($)	Sep. 30, 2021 USD ($)	Sep. 30, 2022 USD ($)	Sep. 30, 2021 USD ($)	Sep. 30, 2022 NOK (kr)	Dec. 31, 2021 USD ($)
Business Acquisition [Line Items]
Cash paid for acquisitions, net of cash acquired						$ 365,780,000	$ 0
Goodwill				$ 749,035,000		749,035,000			$ 523,949,000
Bergstrom
Business Acquisition [Line Items]
Payments	$ 70,892,000
Cash acquired from acquisition	773,000
Cash paid for acquisitions, net of cash acquired	68,967,000
Contingent consideration liability	7,835,000			7,835,000		7,835,000
Goodwill	34,060,000
Acquisition-related costs				593,000		668,000
Bergstrom | Former Shareholders
Business Acquisition [Line Items]
Payments	69,740,000
Bergstrom | Lenders
Business Acquisition [Line Items]
Payments	$ 1,152,000
Bergstrom | Customer relationships
Business Acquisition [Line Items]
Useful life of intangible assets acquired	15 years
Bergstrom | Corporate trademark
Business Acquisition [Line Items]
Useful life of intangible assets acquired	2 years
Bergstrom | Product trademarks
Business Acquisition [Line Items]
Useful life of intangible assets acquired	10 years
Bergstrom | Developed technology
Business Acquisition [Line Items]
Useful life of intangible assets acquired	12 years
Kappa
Business Acquisition [Line Items]
Payments		$ 332,673,000	kr 3,301,341
Cash acquired from acquisition		6,365,000	63,064
Cash paid for acquisitions, net of cash acquired		326,820,000	3,238,277
Contingent consideration liability		24,726,000		22,712,000		22,712,000		kr 245,000
Goodwill		217,570,000
Transaction and integration costs				$ 989,000		$ 1,440,000
Acquisition-related costs					$ 0		$ 0
Kappa | Former Shareholders
Business Acquisition [Line Items]
Payments		302,025,000	2,997,669
Cash paid for acquisitions, net of cash acquired		302,537,000
Kappa | Lenders
Business Acquisition [Line Items]
Payments		$ 30,648,000	kr 303,672
Kappa | Customer relationships
Business Acquisition [Line Items]
Useful life of intangible assets acquired		15 years	15 years
Kappa | Corporate trademark
Business Acquisition [Line Items]
Useful life of intangible assets acquired		2 years	2 years
Kappa | Product trademarks
Business Acquisition [Line Items]
Useful life of intangible assets acquired		10 years	10 years
Kappa | Developed technology
Business Acquisition [Line Items]
Useful life of intangible assets acquired		12 years	12 years

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SIGNIFICANT ACQUISITIONS - Estimated Fair Value of Assets Acquired and Liabilities Assumed (Details) kr in Thousands, $ in Thousands	Aug. 30, 2022 USD ($)	Jun. 21, 2022 USD ($)	Jun. 21, 2022 NOK (kr)	Sep. 30, 2022 USD ($)	Sep. 30, 2022 NOK (kr)	Dec. 31, 2021 USD ($)
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Assets [Abstract]
Goodwill				$ 749,035		$ 523,949
Bergstrom
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Assets [Abstract]
Cash and cash equivalents	$ 773
Accounts receivable	4,699
Inventories	3,922
Property, plant and equipment	2,700
Right of use assets	866
Other assets	197
Accounts payable	(685)
Bank debt	(206)
Lease liabilities	(871)
Other liabilities	(1,380)
Goodwill	34,060
Total consideration on acquisition date	77,575
Contingent consideration liability	(7,835)			(7,835)
Payments	70,892
Bergstrom | Former Shareholders
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Assets [Abstract]
Payments	69,740
Bergstrom | Lenders
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Assets [Abstract]
Payments	1,152
Bergstrom | Customer relationships
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Assets [Abstract]
Intangible assets	26,500
Bergstrom | Developed technology
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Assets [Abstract]
Intangible assets	4,700
Bergstrom | Trademarks
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Assets [Abstract]
Intangible assets	$ 2,300
Kappa
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Assets [Abstract]
Cash and cash equivalents		$ 6,365
Accounts receivable		8,036
Inventories		17,701
Property, plant and equipment		9,854
Right of use assets		3,349
Other assets		2,399
Accounts payable		(3,301)
Bank debt		(30,648)
Lease liabilities		(3,349)
Other liabilities		(4,373)
Deferred income taxes, net		(30,069)
Goodwill		217,570
Total consideration on acquisition date		327,263
Contingent consideration liability		(24,726)		$ (22,712)	kr (245,000)
Net gain on foreign currency exchange forward contracts		(512)
Payments		332,673	kr 3,301,341
Kappa | Former Shareholders
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Assets [Abstract]
Payments		302,025	2,997,669
Kappa | Lenders
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Assets [Abstract]
Payments		30,648	kr 303,672
Kappa | Customer relationships
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Assets [Abstract]
Intangible assets		110,012
Kappa | Developed technology
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Assets [Abstract]
Intangible assets		17,662
Kappa | Trademarks
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Assets [Abstract]
Intangible assets		$ 6,055

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STOCKHOLDERS' EQUITY - Stock-Based Compensation (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Net earnings	$ (2,251)	$ (2,232)	$ (7,563)	$ (6,801)
Expiration period of options granted			10 years
Shares available for future awards (in shares)	407,630		407,630
Stock options | Minimum
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Vesting period			3 years
Stock options | Maximum
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Vesting period			5 years
Restricted stock
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Vesting period			3 years
Restricted stock | Non-employee director
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Vesting period			3 years
Performance shares
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Vesting period			3 years
Cost of sales
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation cost	$ 386	444	$ 1,062	1,188
Operating expenses
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation cost	$ 2,563	$ 2,451	$ 8,776	$ 7,621

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STOCKHOLDERS' EQUITY - Stock Options (Details) - Stock options - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
Outstanding at beginning of period (in shares)			867	858
Granted (in shares)			239	129
Exercised (in shares)			(31)	(100)
Forfeited (in shares)			(12)	(10)
Canceled (in shares)			0	(1)
Outstanding at end of period (in shares)	1,063	876	1,063	876
Exercisable at end of period (in shares)	656	540	656	540
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract]
Outstanding at beginning of period (in dollars per share)			$ 88.19	$ 80.58
Granted (in dollars per share)			139.04	119.12
Exercised (in dollars per share)			70.06	63.49
Forfeited (in dollars per share)			125.05	106.93
Canceled (in dollars per share)			0	74.57
Outstanding at end of period (in dollars per share)	$ 99.74	$ 87.91	99.74	87.91
Exercisable at end of period (in dollars per share)	$ 81.45	$ 74.81	$ 81.45	$ 74.81
Aggregate intrinsic value, outstanding, beginning of period			$ 69,711	$ 29,735
Aggregate intrinsic value, outstanding, end of period	$ 27,308	$ 50,090	27,308	50,090
Aggregate intrinsic value, exercisable, end of period	$ 26,312	$ 37,961	$ 26,312	$ 37,961
Weighted average remaining contractual term, outstanding			6 years 7 months 6 days	6 years 7 months 6 days
Weighted average remaining contractual term, exercisable			5 years 2 months 12 days	5 years 6 months
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract]
Dividend yield rate			0.50%	0.50%
Expected volatility rate			30.00%	33.00%
Risk-free interest rate			2.80%	0.50%
Expected term			7 years 3 months 18 days	4 years 10 months 24 days
Weighted-average fair value of options granted (in dollars per share)	$ 48.55	$ 0	$ 44.77	$ 33.11
Total intrinsic value of stock options exercised	$ 815	$ 3,196	$ 1,964	$ 6,927

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STOCKHOLDERS' EQUITY - Restricted Stock and Performance Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract]
Unrecognized compensation cost	$ 23,665	$ 16,498
Period for unrecognized compensation cost to be recognized over	2 years 1 month 6 days
Estimated share-based compensation expense	$ 13,500
Restricted stock
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Non-vested balance as of beginning of period (in shares)	166	159
Granted (in shares)	40	38
Vested (in shares)	(78)	(16)
Forfeited (in shares)	(7)	(5)
Non-vested balance as of end of period (in shares)	121	176
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Additional Disclosures [Abstract]
Non-vested balance as of beginning of period (in dollars per share)	$ 99.70	$ 90.71
Granted (in dollars per share)	137.03	119.59
Vested (in dollars per share)	81.11	86.79
Forfeited (in dollars per share)	116.72	95.71
Non-vested balance as of end of period (in dollars per share)	$ 122.96	$ 97.17
Performance shares
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Non-vested balance as of beginning of period (in shares)	69	71
Granted (in shares)	39	36
Vested (in shares)	(35)	(24)
Forfeited (in shares)	(3)	(11)
Non-vested balance as of end of period (in shares)	70	72
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Additional Disclosures [Abstract]
Non-vested balance as of beginning of period (in dollars per share)	$ 110.72	$ 91.99
Granted (in dollars per share)	114.22	108.74
Vested (in dollars per share)	53.17	70.64
Forfeited (in dollars per share)	84.09	74.57
Non-vested balance as of end of period (in dollars per share)	$ 127.69	$ 110.22
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract]
Risk-free interest rate	1.80%	0.20%
Dividend yield rate	0.50%	0.60%
Expected volatility rate	32.00%	33.00%
Initial TSR	(15.70%)	11.70%
Cliff vest	100.00%

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STOCKHOLDERS' EQUITY - Repurchase of Common Stock (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended			9 Months Ended		12 Months Ended
	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2020
Stockholders' Equity Note [Abstract]
Number of shares authorized to be repurchased (in shares)				3,763,038
Aggregate number of shares repurchased since inception (in shares)				3,069,266
Reclassification [Line Items]
Number of shares acquired under stock repurchase plan and subsequently reissued (in shares)				251,022	147,199
Treasury stock acquired, average cost (in dollars per share)				$ 140.41	$ 127.46
Revision of Prior Period, Reclassification, Adjustment
Reclassification [Line Items]
Repurchases of common stock	$ 11,080	$ 8,472	$ 2,210			$ 7,873

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INVENTORIES (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Inventory Disclosure [Abstract]
Raw materials	$ 41,371	$ 28,639
Work in progress	11,879	10,563
Finished goods	86,214	51,856
Total inventories	$ 139,464	$ 91,058

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PROPERTY, PLANT AND EQUIPMENT (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Property, Plant and Equipment [Abstract]
Gross property, plant and equipment	$ 442,006	$ 408,219
Less: accumulated depreciation	181,998	170,702
Property, plant and equipment, net	260,008	237,517
Land
Property, Plant and Equipment [Abstract]
Gross property, plant and equipment	10,993	11,692
Building
Property, Plant and Equipment [Abstract]
Gross property, plant and equipment	90,239	89,602
Equipment
Property, Plant and Equipment [Abstract]
Gross property, plant and equipment	267,611	253,995
Construction in progress
Property, Plant and Equipment [Abstract]
Gross property, plant and equipment	$ 73,163	$ 52,930

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INTANGIBLE ASSETS - Narrative (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill	$ 749,035,000		$ 749,035,000		$ 523,949,000
Amortization of identifiable intangible assets	7,922,000	$ 6,155,000	19,683,000	$ 18,868,000
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract]
Remainder of 2021	5,300,000		5,300,000
2022	30,188,000		30,188,000
2023	21,740,000		21,740,000
2024	17,906,000		17,906,000
2025	17,362,000		17,362,000
2026	16,553,000		16,553,000
Identifiable intangible assets with indefinite useful lives	$ 0		$ 0		$ 0

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INTANGIBLE ASSETS - Schedule of Identifiable Intangible Assets (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2022	Dec. 31, 2021
Identifiable intangible assets [Abstract]
Gross carrying amount	$ 477,650	$ 327,330
Accumulated amortization	250,327	232,665
Customer relationships & lists
Identifiable intangible assets [Abstract]
Gross carrying amount	361,747	240,059
Accumulated amortization	$ 185,381	173,489
Customer relationships & lists | Minimum
Identifiable intangible assets [Abstract]
Amortization Period (in years)	10 years
Customer relationships & lists | Maximum
Identifiable intangible assets [Abstract]
Amortization Period (in years)	20 years
Trademarks & trade names
Identifiable intangible assets [Abstract]
Gross carrying amount	$ 50,487	43,116
Accumulated amortization	$ 32,285	28,985
Trademarks & trade names | Minimum
Identifiable intangible assets [Abstract]
Amortization Period (in years)	2 years
Trademarks & trade names | Maximum
Identifiable intangible assets [Abstract]
Amortization Period (in years)	17 years
Developed technology
Identifiable intangible assets [Abstract]
Gross carrying amount	$ 40,816	20,234
Accumulated amortization	$ 15,524	14,607
Developed technology | Minimum
Identifiable intangible assets [Abstract]
Amortization Period (in years)	5 years
Developed technology | Maximum
Identifiable intangible assets [Abstract]
Amortization Period (in years)	12 years
Other
Identifiable intangible assets [Abstract]
Gross carrying amount	$ 24,600	23,921
Accumulated amortization	$ 17,137	$ 15,584
Other | Minimum
Identifiable intangible assets [Abstract]
Amortization Period (in years)	2 years
Other | Maximum
Identifiable intangible assets [Abstract]
Amortization Period (in years)	18 years

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EQUITY-METHOD INVESTMENT (Details) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022 USD ($)	Sep. 30, 2021 USD ($)	Sep. 30, 2022 USD ($) vote	Sep. 30, 2021 USD ($)	Dec. 31, 2021 USD ($)
Equity Method Investment, Summarized Financial Information [Abstract]
Percentage of operating expenses to be absorbed			66.66%
Percentage of production offtake			66.66%
St. Gabriel CC Company, LLC
Equity Method Investment, Summarized Financial Information [Abstract]
Ownership percentage in joint venture	66.66%		66.66%
Number of votes | vote			2
Loss relating to joint venture's expenses	$ 140	$ 142	$ 420	$ 416
Capital contributions	89	$ 46	222	$ 31
Carrying value of joint venture	$ 4,301		$ 4,301		$ 4,499
St. Gabriel CC Company, LLC | Eastman Chemical Company
Equity Method Investment, Summarized Financial Information [Abstract]
Ownership percentage in joint venture	33.34%		33.34%
Number of votes | vote			2

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REVOLVING LOAN (Details) - USD ($)	3 Months Ended			9 Months Ended
	Sep. 30, 2022	Jun. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Jul. 27, 2022	Dec. 31, 2021	Jun. 27, 2018
Debt Instrument [Line Items]
Proceeds from revolving loan				$ 435,000,000	$ 5,000,000
Repayments of outstanding balance				81,000,000	60,000,000
Capitalized costs net of accumulated amortization	$ 1,389,000			1,389,000			$ 421,000
Amortization expense pertaining to capitalized costs	$ 121,000		$ 71,000	$ 262,000	$ 212,000
Credit agreement
Debt Instrument [Line Items]
Interest rate	4.214%			4.214%
Commitment fee percentage				0.175%
Unused portion of revolving loan	$ 87,431,000			$ 87,431,000
Credit agreement | Minimum
Debt Instrument [Line Items]
Commitment fee percentage				0.15%
Credit agreement | Maximum
Debt Instrument [Line Items]
Commitment fee percentage				0.225%
Revolving loan | Revolving
Debt Instrument [Line Items]
Maximum borrowing capacity						$ 550,000,000		$ 500,000,000
Proceeds from revolving loan	70,000,000	$ 345,000,000
Repayments of outstanding balance				$ 433,569,000
Outstanding balance	$ 462,569,000			462,569,000			$ 108,569,000
Installment payments required				$ 0

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NET EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended						9 Months Ended
	Sep. 30, 2022	Jun. 30, 2022	Mar. 31, 2022	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Sep. 30, 2022	Sep. 30, 2021
Earnings Per Share [Abstract]
Net Earnings - Basic and Diluted	$ 25,249	$ 29,782	$ 28,930	$ 25,013	$ 22,731	$ 23,411	$ 83,961	$ 71,155
Weighted average common shares - basic (in shares)	32,010,000			32,194,000			32,017,000	32,227,000
Effect of dilutive securities - stock options, restricted stock, and performance shares (in shares)	357,000			450,000			375,000	424,000
Weighted average common shares - diluted (in shares)	32,367,000			32,644,000			32,392,000	32,651,000
Net earnings per share - basic (in dollars per share)	$ 0.79			$ 0.78			$ 2.62	$ 2.21
Net earnings per share - diluted (in dollars per share)	$ 0.78			$ 0.77			$ 2.59	$ 2.18
Anti-dilutive shares (in shares)	362,203			151,924			369,183	156,238

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INCOME TAXES (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
Income Tax Disclosure [Abstract]
Effective tax rate	18.80%	22.00%	22.20%	22.70%
Unrecognized tax benefits	$ 5,690		$ 5,690		$ 5,881
Accrued interest and penalties related to unrecognized tax benefits	$ 2,167		$ 2,167		$ 2,106

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SEGMENT INFORMATION - Narrative (Details)	9 Months Ended
	Sep. 30, 2022 segment
Segment Reporting [Abstract]
Number of business segments	3

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SEGMENT INFORMATION - Business Segment Assets (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Segment information [Abstract]
Assets	$ 1,633,008	$ 1,199,325
Operating segments | Human Nutrition & Health
Segment information [Abstract]
Assets	1,169,395	727,131
Operating segments | Animal Nutrition & Health
Segment information [Abstract]
Assets	189,652	158,971
Operating segments | Specialty Products
Segment information [Abstract]
Assets	169,817	184,628
Other and unallocated
Segment information [Abstract]
Assets	$ 104,144	$ 128,595

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SEGMENT INFORMATION - Business Segment Net Sales (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Segment information [Abstract]
Net sales	$ 244,267	$ 197,869	$ 709,827	$ 585,890
Operating segments | Human Nutrition & Health
Segment information [Abstract]
Net sales	142,655	111,200	396,728	327,187
Operating segments | Animal Nutrition & Health
Segment information [Abstract]
Net sales	65,604	56,192	197,546	161,821
Operating segments | Specialty Products
Segment information [Abstract]
Net sales	29,641	27,615	99,622	89,645
Other and unallocated
Segment information [Abstract]
Net sales	$ 6,367	$ 2,862	$ 15,931	$ 7,237

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SEGMENT INFORMATION - Business Segment Earnings Before Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Segment information [Abstract]
Earnings before income taxes	$ 31,085	$ 32,085	$ 107,973	$ 92,087
Interest and other (expense)	(2,540)	(428)	(3,908)	(1,594)
Operating segments | Human Nutrition & Health
Segment information [Abstract]
Earnings before income taxes	20,584	19,801	64,592	58,512
Operating segments | Animal Nutrition & Health
Segment information [Abstract]
Earnings before income taxes	8,036	7,442	26,943	16,059
Operating segments | Specialty Products
Segment information [Abstract]
Earnings before income taxes	7,105	6,455	24,785	23,373
Other and unallocated
Segment information [Abstract]
Earnings before income taxes	(2,100)	(1,185)	(4,439)	(4,263)
Interest and other expense
Segment information [Abstract]
Interest and other (expense)	$ (2,540)	$ (428)	$ (3,908)	$ (1,594)

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SEGMENT INFORMATION - Depreciation and Amortization (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Segment information [Abstract]
Depreciation and amortization	$ 14,097	$ 12,159	$ 37,958	$ 36,622
Operating segments | Human Nutrition & Health
Segment information [Abstract]
Depreciation and amortization	9,569	7,472	24,316	22,486
Operating segments | Animal Nutrition & Health
Segment information [Abstract]
Depreciation and amortization	1,681	1,932	5,010	5,512
Operating segments | Specialty Products
Segment information [Abstract]
Depreciation and amortization	1,839	1,997	5,670	6,351
Other and unallocated
Segment information [Abstract]
Depreciation and amortization	$ 1,008	$ 758	$ 2,962	$ 2,273

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SEGMENT INFORMATION - Capital Expenditures (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Segment information [Abstract]
Capital expenditures			$ 34,950	$ 21,568
Amortization of identifiable intangible assets	$ 7,922	$ 6,155	19,683	18,868
Other and unallocated
Segment information [Abstract]
Capital expenditures			550	238
Transaction and integration related costs	1,640	305	2,816	1,005
Amortization of identifiable intangible assets	$ 855	$ 675	2,475	2,024
Human Nutrition & Health | Operating segments
Segment information [Abstract]
Capital expenditures			22,513	14,492
Animal Nutrition & Health | Operating segments
Segment information [Abstract]
Capital expenditures			8,748	4,557
Specialty Products | Operating segments
Segment information [Abstract]
Capital expenditures			$ 3,139	$ 2,281

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REVENUE - Schedule of Disaggregation of Revenues (Details) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022 USD ($)	Sep. 30, 2021 USD ($)	Sep. 30, 2022 USD ($) revenue_substream	Sep. 30, 2021 USD ($)
Revenue [Abstract]
Net sales	$ 244,267	$ 197,869	$ 709,827	$ 585,890
United States
Revenue [Abstract]
Net sales	174,564	142,313	518,131	427,352
Foreign Countries
Revenue [Abstract]
Net sales	69,703	55,556	191,696	158,538
Product Sales
Revenue [Abstract]
Net sales	233,823	188,573	677,136	557,683
Co-manufacturing
Revenue [Abstract]
Net sales	8,109	7,473	26,235	21,629
Consignment
Revenue [Abstract]
Net sales	1,484	829	4,064	3,260
Product Sales Revenue
Revenue [Abstract]
Net sales	243,416	196,875	$ 707,435	582,572
Number of sub-streams of revenue | revenue_substream			3
Royalty Revenue
Revenue [Abstract]
Net sales	$ 851	$ 994	$ 2,392	$ 3,318

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SUPPLEMENTAL CASH FLOW INFORMATION (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Supplemental Cash Flow Information [Abstract]
Income taxes	$ 26,277	$ 19,563
Interest	$ 6,169	$ 3,492

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ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) - Changes in Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands	3 Months Ended						9 Months Ended
	Sep. 30, 2022	Jun. 30, 2022	Mar. 31, 2022	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Sep. 30, 2022	Sep. 30, 2021
Changes in accumulated other comprehensive income (loss) [Abstract]
Net foreign currency translation adjustment	$ (34,874)			$ (3,362)			$ (44,667)	$ (7,981)
Unrealized gain on cash flow hedge	564			450			3,770	1,583
Tax	(137)			(109)			(920)	(379)
Net of tax	427			341			2,850	1,204
Net change in postretirement benefit plan (see Note 15 for further information)
Amortization of prior service cost	2			18			6	55
Amortization of gain	0			(4)			0	(16)
Gain arising during the period and prior service credit	0			0			(41)	(4)
Total before tax	2			14			(35)	35
Tax	0			(3)			(24)	(9)
Net of tax and adjustment	2			11			(59)	26
Other comprehensive income (loss)	(34,445)	$ (6,135)	$ (1,296)	(3,010)	$ 1,883	$ (5,624)	(41,876)	(6,751)
Cross-currency swap
Net change in postretirement benefit plan (see Note 15 for further information)
Tax expense (benefit) on net investment hedge	1,635			553			3,277	1,243
Accumulated Other Comprehensive Income (Loss) [Line Items]
Net investment hedge (cross-currency swap), net of tax	5,065			1,715			10,151	3,888
Tax expense (benefit) on net investment hedge	$ 1,635			$ 553			$ 3,277	$ 1,243

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ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) - Components of Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands	3 Months Ended						9 Months Ended
	Sep. 30, 2022	Jun. 30, 2022	Mar. 31, 2022	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Sep. 30, 2022	Sep. 30, 2021
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	$ 901,370	$ 873,682	$ 877,015	$ 869,642	$ 849,492	$ 828,233	$ 877,015	$ 828,233
Other comprehensive (loss)/income	(34,445)	(6,135)	(1,296)	(3,010)	1,883	(5,624)	(41,876)	(6,751)
Ending balance	895,922	901,370	873,682	889,078	869,642	849,492	895,922	889,078
Foreign currency translation adjustment
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance			(3,602)				(3,602)
Other comprehensive (loss)/income							(44,667)
Ending balance	(48,269)						(48,269)
Cash flow hedge
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance			(1,631)				(1,631)
Other comprehensive (loss)/income							2,850
Ending balance	1,219						1,219
Postretirement benefit plan
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance			240				240
Other comprehensive (loss)/income							(59)
Ending balance	181						181
Total
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	(12,424)	(6,289)	(4,993)	432	(1,451)	4,173	(4,993)	4,173
Other comprehensive (loss)/income	(34,445)	(6,135)	(1,296)	(3,010)	1,883	(5,624)
Ending balance	$ (46,869)	$ (12,424)	$ (6,289)	$ (2,578)	$ 432	$ (1,451)	$ (46,869)	$ (2,578)

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EMPLOYEE BENEFIT PLANS (Details) $ in Thousands			9 Months Ended		12 Months Ended
	Jun. 21, 2022 plan	Jan. 01, 2021 plan	Sep. 30, 2022 USD ($) plan	Sep. 30, 2021 USD ($)	Dec. 31, 2020 plan	Dec. 31, 2021 USD ($)
Defined Benefit Plan Disclosure [Line Items]
Number of savings plan | plan		1			2
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract]
Deferred compensation liability			$ 8,027			$ 6,270
Noncurrent deferred compensation liability			8,011			6,251
Current deferred compensation liability			16			19
Related rabbi trust assets			$ 8,032			6,267
Postretirement Medical Plans
Defined Benefit Plan Disclosure [Line Items]
Number of defined benefit plans | plan			2
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract]
Service cost			$ 59	$ 65
Interest cost			20	17
Amortization of prior service cost			6	55
Amortization of gain			(1)	(18)
Net periodic benefit cost			84	119
Benefit obligation			1,247			1,293
Historical cash payments for retirement medical plan claims per year (less than)			200
Defined Benefit Pension Plans | Chemogas Defined Pension Plan
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract]
Service cost			30	52
Interest cost			12	11
Expected return on plan assets			(26)	(26)
Amortization of gain			0	2
Net periodic benefit cost			16	$ 39
Benefit obligation			$ 607			$ 684
Kappa
Defined Benefit Plan Disclosure [Line Items]
Number of savings plan | plan	1

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COMMITMENTS AND CONTINGENCIES (Details) $ in Thousands	Sep. 30, 2022 USD ($)
Lessee, Operating Lease, Liability, to be Paid [Abstract]
October 1, 2022 to December 31, 2022	$ 1,111
2023	4,214
2024	4,053
2025	3,074
2026	2,678
2027	2,200
Thereafter	6,225
Total minimum lease payments	$ 23,555

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FAIR VALUE OF FINANCIAL INSTRUMENTS (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2022 USD ($) financial_instrument	Dec. 31, 2021 USD ($)
Fair value of financial instruments [Abstract]
Number of financial instruments held for trading purposes | financial_instrument	0
Related rabbi trust assets	$ 8,032	$ 6,267
Contingent consideration liabilities	30,547	0
Derivative assets (liabilities)	14,540	(2,658)
Cross-currency swap
Fair value of financial instruments [Abstract]
Derivative assets (liabilities)	12,928	(500)
Interest rate swap
Fair value of financial instruments [Abstract]
Derivative assets (liabilities)	1,612	(2,158)
Fair Value, Inputs, Level 2
Fair value of financial instruments [Abstract]
Contingent consideration liabilities	30,547
Money market funds | Level 1
Fair value of financial instruments [Abstract]
Cash and cash equivalents	$ 921	$ 933

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RELATED PARTY TRANSACTIONS (Details) - St. Gabriel CC Company, LLC - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
Related party transactions [Abstract]
Finished goods received from related party recorded in cost of goods sold	$ 9,249,000	$ 4,944,000	$ 23,971,000	$ 14,545,000
Receivable from related party	13,126,000		13,126,000		$ 10,504,000
Payables to related parties	9,339,000		9,339,000		7,552,000
Related party receivable related to non-contractual monies	0		0		164,000
Related party payable related to non-contractual monies	296,000		296,000		$ 296,000
Services provided
Related party transactions [Abstract]
Revenue from related party	1,188,000	901,000	3,185,000	2,648,000
Raw materials sold
Related party transactions [Abstract]
Revenue from related party	$ 11,937,000	$ 6,419,000	$ 32,158,000	$ 18,461,000

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LEASES - Narrative (Details) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022 USD ($)	Sep. 30, 2021 USD ($)	Sep. 30, 2022 USD ($) tranche	Sep. 30, 2021 USD ($)	Jun. 22, 2022 ft²	Dec. 31, 2021 USD ($)
Lessee, Lease, Description [Line Items]
Reasonably certain criterion renewal period	2 years		2 years
Number of tranches | tranche			4
Finance lease liability	$ 2,345		$ 2,345			$ 2,470
Rent expense charged to operations under lease agreements	$ 1,190	$ 788	$ 2,782	$ 2,274
Corporate Headquarters And Laboratory Facility
Lessee, Lease, Description [Line Items]
Term of contract for operating leases					10 years
Office space | ft²					40,000
Years 1 and 2
Lessee, Lease, Description [Line Items]
Discount rate	1.45%		1.45%
Years 1 and 2 | Minimum
Lessee, Lease, Description [Line Items]
Term of contract for operating leases	1 year		1 year
Years 1 and 2 | Maximum
Lessee, Lease, Description [Line Items]
Term of contract for operating leases	2 years		2 years
Years 3 and 4
Lessee, Lease, Description [Line Items]
Discount rate	2.04%		2.04%
Years 3 and 4 | Minimum
Lessee, Lease, Description [Line Items]
Term of contract for operating leases	3 years		3 years
Years 3 and 4 | Maximum
Lessee, Lease, Description [Line Items]
Term of contract for operating leases	4 years		4 years
Years 5 and 9
Lessee, Lease, Description [Line Items]
Discount rate	2.38%		2.38%
Years 5 and 9 | Minimum
Lessee, Lease, Description [Line Items]
Term of contract for operating leases	5 years		5 years
Years 5 and 9 | Maximum
Lessee, Lease, Description [Line Items]
Term of contract for operating leases	9 years		9 years
Years more than 10
Lessee, Lease, Description [Line Items]
Term of contract for operating leases	10 years		10 years
Discount rate	3.10%		3.10%

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LEASES - Right-of-Use Assets and Lease Liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Right of use assets
Right of use assets - operating leases	$ 11,617	$ 6,929
Finance Leases - ROU	2,202	2,359
Total right-of-use assets	13,819	9,288
Operating leases liabilities - current	3,727	2,194
Finance lease liabilities - current	173	167
Total lease liabilities, current	3,900	2,361
Operating leases liabilities - non-current	8,069	4,811
Finance lease liabilities - non-current	2,172	2,303
Total lease liabilities, non-current	$ 10,241	$ 7,114

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LEASES - Schedule of Lease Costs (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Lease Cost
Operating lease cost	$ 1,190	$ 788	$ 2,782	$ 2,274
Amortization of ROU asset	53	52	157	157
Interest on lease liabilities	30	32	91	98
Total finance lease	83	84	248	255
Total lease cost	1,273	872	3,030	2,529
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	1,164	761	2,772	2,249
Operating cash flows from finance leases	30	32	91	98
Financing cash flows from finance leases	42	40	125	118
Cash flows from operating and finance leases	1,236	833	2,988	2,465
Right-of-use assets obtained in exchange for new operating lease liabilities, net of right-of-use assets disposed	$ 2,275	$ 502	$ 7,552	$ 2,914
Weighted-average remaining lease term - operating leases	3 years 9 months 29 days	4 years 3 months 25 days	3 years 9 months 29 days	4 years 3 months 25 days
Weighted-average remaining lease term - finance leases	10 years 7 months 24 days	11 years 8 months 1 day	10 years 7 months 24 days	11 years 8 months 1 day
Weighted-average discount rate - operating leases	2.90%	3.70%	2.90%	3.70%
Weighted-average discount rate - finance leases	5.10%	5.10%	5.10%	5.10%

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DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - Narrative (Details) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022 USD ($) derivative	Sep. 30, 2021 USD ($)	Sep. 30, 2022 USD ($) derivative	Sep. 30, 2021 USD ($)	Jun. 21, 2022 derivative	May 28, 2019 USD ($)
Interest rate swap | Interest expense
Derivative [Line Items]
Net interest income (expense)	$ 35	$ (538)	$ (842)	$ (1,593)
Forward Contracts
Derivative [Line Items]
Contracts | derivative	4		4		4
Net gains on forward contracts			$ 512
Designated as hedging instrument | Interest rate swap
Derivative [Line Items]
Notional amount of derivatives						$ 108,569
Designated as hedging instrument | Interest rate swap | Pay-fixed interest rate
Derivative [Line Items]
Fixed interest rate						2.05%
Designated as hedging instrument | Cross-currency swap
Derivative [Line Items]
Notional amount of derivatives						$ 108,569
Designated as hedging instrument | Cross-currency swap | Interest expense
Derivative [Line Items]
Net interest income (expense)	$ 569	$ 563	$ 1,682	$ 1,682
Designated as hedging instrument | Cross-currency swap | Pay-fixed interest rate
Derivative [Line Items]
Fixed interest rate						0.00%
Designated as hedging instrument | Cross-currency swap | Receive-fixed interest rate
Derivative [Line Items]
Fixed interest rate						2.05%

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DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - Schedule of Fair Value of Derivative Instruments (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Derivative Liability [Abstract]
Derivative assets (liabilities)	$ 14,540	$ (2,658)
Interest rate swap
Derivative Liability [Abstract]
Derivative assets (liabilities)	1,612	(2,158)
Cross-currency swap
Derivative Liability [Abstract]
Derivative assets (liabilities)	$ 12,928	$ (500)

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DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - Schedule of Gains (Losses) on Hedging Instruments (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Derivative Instruments, Gain (Loss) [Line Items]
Gains and losses from hedging instruments recognized in AOCI	$ 5,492	$ 2,056	$ 13,001	$ 5,092
Interest rate swap
Derivative Instruments, Gain (Loss) [Line Items]
Cash flow hedge (interest rate swap), net of tax	427	341	2,850	1,204
Cross-currency swap
Derivative Instruments, Gain (Loss) [Line Items]
Net investment hedge (cross-currency swap), net of tax	$ 5,065	$ 1,715	$ 10,151	$ 3,888

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DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES -Summary Of Key Terms of Forward Exchange Contracts (Details) - Not Designated as Hedging Instrument € in Thousands, kr in Thousands, $ in Thousands	Jun. 21, 2022 USD ($)	Jun. 21, 2022 NOK (kr)	Jun. 21, 2022 EUR (€)	Jun. 17, 2022 USD ($)	Jun. 17, 2022 EUR (€)
USD NOK Exchange
Derivative Instruments, Gain (Loss) [Line Items]
Notional value	$ 294,555	kr 2,924,553
USD EURO Exchange
Derivative Instruments, Gain (Loss) [Line Items]
Notional value	$ 16,640		€ 15,972	$ 6,436	€ 6,180
EURO NOK Exchange
Derivative Instruments, Gain (Loss) [Line Items]
Notional value		kr 165,210	€ 15,972