Balchem reports strong net sales

20/02/06 Balchem has reported record net sales for the quarter ended December 31, 2005 of $23.1 million. This is an increase of 28.8%, as compared to $18.0 million for the comparable prior year. Net earnings for the fourth quarter were $2.6 million, an increase of $0.6 million, or 28.4% as compared with the same period last year. This resulted in an increase in diluted net earnings of 29.4% to $0.22 per share for the fourth quarter of 2005 versus $0.17 per share for the comparable quarter of the prior year.
 
In the fourth quarter of 2005, sales of the Encapsulated/Nutritional Products segment were $9.4 million in the period, an increase of 50.3% from the prior year comparable quarter, including $1.5 million of sales from the Loders Croklaan acquisition. This growth was driven principally by strength in sales of food ingredients for the domestic and international markets, improved sales of human choline products and continued strong sales of REASHURE its animal nutrition and health product targeted for dairy cows. Earnings from operations for this segment improved to $0.79 million in the current quarterly period as compared to $0.09 million in the comparable quarter of the prior year.

The ARC Specialty Products segment generated earnings from operations of $2.6 million on fourth quarter sales of $7.3 million. Net sales were 1.4% lower than the prior year comparable quarter, principally a result of slowness in sales of ethylene oxide canisters, as our customers adjusted inventory levels down near year end. Earnings from operations for this segment were 9.3% lower than the prior year quarter, driven principally by higher raw material and energy costs. The BCP Ingredients segment realized record sales of $6.4 million, increasing 50.1% 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 70.9% to $0.45 million as compared to $0.26 million in the prior year comparable quarter. Earnings from this segment were also unfavorably impacted by higher raw material and energy costs.

Consolidated gross profit for the quarter ended December 31, 2005 was $6.7 million, an increase of 13.2% compared to $6.0million for the prior year comparable period, due largely to the above notedincrease in sales. Operating (Selling, R&D, and Administrative) expenseswere $2.9 million, as compared to $2.7 million for the prior year comparablequarter, declining to approximately 12.4% of net sales from 15.0% of net salesin the comparable quarter of the prior year, as we continue to leverage oursales growth with our current infrastructure.