Balchem reports strong quarter
These strong results were achieved by continued growth in the core segments of Balchem combined with the recent acquisition of certain assets of Loders Croklaan.
In the third quarter of 2005, all three segments of the company reported improved sales and earnings. The ARC Specialty Products segment generated earnings from operations of $2.8 million on third quarter sales of $7.4 million. Net sales were 2.5% higher than the prior year comparable quarter and earnings from operations were 5.5% higher, driven principally by increased sales volume of packaged ethylene oxide and propylene oxide. The BCP Ingredients segment realized record sales of $5.3 million, increasing 43.7% 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 142.3% to $0.94 million as compared to $0.39 million in the prior year comparable quarter. Sales of the Encapsulated/Nutritional Products segment were $8.5 million in the period, an increase of 30.7% from the prior year comparable quarter, including $1.8 million of sales from the Loders Croklaan acquisition noted above. The domestic food market in the Encapsulated/Nutritional Products segment was quite strong; however, this growth was offset partially by some slowness in the nutritional supplement area. Earnings from operations for this segment improved to $0.95 million in the current quarterly period as compared to $0.35 million in the comparable quarter of the prior year.
Consolidated gross profit for the quarter ended September 30, 2005 was $7.6 million, an increase of 23.0% compared to $6.2million for the prior year comparable period, due largely to the above noted increase in sales. Gross profit, as a percentage of sales, improved to 36.2%from 35.8% due to improved manufacturing efficiencies and favorable product mix. Operating (Selling, R&D, and Administrative) expenses were $2.9 million, as compared to $2.8 million for the prior year comparable quarter, declining to approximately 13.8% of net sales from 16.1% of net sales in the comparable quarter of the prior year.
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