Balchem Reports Q1 Growth

02/05/06 Balchem has reported record net sales of $24.6 million for the quarter ended March 31, 2006. This is an increase of 27.2% above the $19.3 million result of the prior year comparable quarter.

In the first quarter of 2006, sales of the Encapsulated/Nutritional Products segment were $9.8 million, an increase of 24.8% from the prior year comparable quarter. This includes $1.0 million of sales from the Loders Croklaan acquisition and $.88 million of sales from the Chelated Minerals Corporation (CMC) acquisition completed in February, 2006. Additional growth was driven principally by strength in sales of food ingredients and human choline products.

Earnings from operations for this segment improved 18.5% to $1.04 million in the current period as compared to $0.88 million in the comparable quarter of the prior year. The ARC Specialty Products segment generated earnings from operations of $2.8 million on record quarterly sales of $8.0 million. Net sales were 11.5% higher than the prior year comparable quarter, principally a result of increased sales of 100% ethylene oxide, ethylene oxide canisters and propylene oxide. Earnings from operations for this segment were 6.4% higher than the prior year quarter. The BCP Ingredients segment realized another record sales quarter of $6.9 million, increasing 57.1% over the prior year comparable quarter, with continued strong sales volumes in dry and aqueous choline products for the poultry and swine industries.

Earnings from operations for this segment improved 19.9% to $0.66 million as compared to $0.55 million in the prior year comparable quarter. Earnings from this segment, while increasing, were unfavorably impacted by a scheduled plant turnaround that idled production of liquid choline for one week, but this action also increased our production capacity by approximately 15% going forward.

Consolidated gross profit for the quarter ended March 31, 2006 was $8.2 million, an increase of 14.5% compared to $7.2 million for the prior year comparable period, due largely to the above noted increase in sales. Operating (Selling, R&D, and Administrative) expenses increased 19.1% to$3.8 million, as compared to $3.2 million for the prior year comparable quarter, equaling 15.3% of net sales, a reduction from the 16.3% of the prior year.