Balchem Reports Record Net Earnings, But Food, Pharma and Nutrition Segment Down

Sales of the Food, Pharma and Nutrition segment were $8.3 million, a decrease of 10.6% or $1.0 million from the prior year comparable quarter; however, sales did grow approximately 9.6% on a sequential basis.

20/07/09 For the first quarter ended March 31, 2009, Balchem has achieved record net earnings of $6.1 million, an increase of $1.5 million, or 31.4%. The $6.1 million generated diluted net earnings per common share of $0.32 versus $0.25 for the prior year comparable period, an increase of 28.0%. Net sales of $53.0 million was a decrease of approximately 6.8% below the $56.9 million result of the prior year comparable quarter, and off a modest 2.0% sequentially from fourth quarter 2008.

However, sales of the Food, Pharma and Nutrition segment were $8.3 million, a decrease of 10.6% or $1.0 million from the prior year comparable quarter; however, sales did grow approximately 9.6% on a sequential basis. Quarterly comparative sales results for this segment continue to reflect the roller-coaster effect of pipeline fills, inventory level management, and some effects of the worldwide economic downturn. “The domestic food sector was up, as we continued to see growth from the launch of Choline into new food applications, as well as growth in the bakery, tortilla and preservation markets. We also saw strong double digit increases in our VitaShure products for nutritional enhancement. These results were offset by slowness in sales of calcium products sold into the over-the-counter pharmaceutical markets,” the company reported. Earnings from operations for this segment were $1.0 million, as compared to $1.5 million in the prior year comparable quarter, due to the softness in sales volume; however, on a sequential basis, this result reflects a 35.8% increase from the fourth quarter of 2008.

Detailing this first quarter of 2009, the Animal Nutrition and Health segment achieved quarterly sales of $35.9 million, a decrease of $3.2 million, or 8.3%, from the prior year quarter. Sales in this segment were negatively impacted by approximately 4% due to foreign currency fluctuation associated with the Italian operation. Within this segment, the specialty animal nutrition and health products, targeted predominantly for ruminant animals, realized approximately 4.1% growth over the 2008 first quarter results and 10.0 % growth sequentially, with continued strong sales of Reashure and Nitroshure, in addition to new sales generated from AminoShure-L., a rumen protected lysine. These increases were partially offset by slowness in international sales of the chelated mineral products. Sales of feed grade choline and industrial derivatives declined approximately 10.3% from the prior year quarter principally due to declines in volumes sold into the well-publicized soft poultry industry, including slower international sales largely related to the strengthening of the U.S. dollar in 2009 versus a weakening dollar in 2008. Sales of industrial derivatives (both choline and methylamines) were impacted by softness in the industrial sector, principally caused by the general economic downturn. Through all of these market activities, earnings from operations for the entire ANH segment did increase to $5.0 million as compared to $3.3 million in the prior year comparable quarter, largely due to favorable product mix, strong sales from the company’s Italian operation, and reductions in the cost of certain petro-chemical commodities used to manufacture choline and derivatives.