Balchem Corporation — Third Quarter 2026 Earnings Summary

Financial Performance:

• Net sales for the quarter ended September 30, 2026, were $290.7 million, an 8.6% increase from the prior year quarter; year-to-date sales were $845.4 million, up from $773.5 million.
• GAAP net earnings were $46.7 million, a 16.0% increase from the prior year quarter; year-to-date net earnings were $131.6 million, up from $115.6 million.
• Adjusted EBITDA was $80.3 million, a 12.4% increase from the prior year quarter; year-to-date adjusted EBITDA was $232.5 million, up from $207.0 million.
• GAAP earnings per share were $1.46 compared to $1.24 in the prior year quarter; adjusted earnings per share were $1.57 compared to $1.35.
• Gross margin increased to $105.7 million (36.4% of sales) from $95.5 million (35.7% of sales), a 70 basis point improvement.
• Cash flows from operations were $69.8 million; free cash flow was $57.9 million.
• Net debt was $57.7 million with a leverage ratio of 0.2 times.
• Outstanding debt on the revolving loan was $124.0 million as of September 30, 2026.

Guidance and Future Outlook:

• Management expressed confidence in the long-term growth outlook and stated the company is well-positioned to continue executing strategic growth initiatives.
• The company highlighted a healthy balance sheet and strong results through the first nine months of the year as indicators of future positioning.

Business Segments and Product Lines:

• Human Nutrition and Health: Generated record quarterly sales of $188.2 million (up 8.1%); earnings from operations were $45.6 million (up 11.8%). Growth was driven by higher sales in nutrients and food ingredients/solutions.
• Animal Nutrition and Health: Generated quarterly sales of $63.0 million (up 11.7%); earnings from operations were $6.8 million (up 82.8%). Growth was driven by higher sales in monogastric and ruminant markets.
• Specialty Products: Generated quarterly sales of $37.3 million (up 4.5%); earnings from operations were $12.3 million (up 6.6%). Growth was driven by higher sales in performance gases.
• New technologies and innovations showcased include VitaCholine®, K2VITAL™, Optifolin+®, and OptiMSM®.

Market and Competitive Landscape:

• The company focuses on developing differentiated, science-backed solutions addressing human health and wellness trends.
• Sales growth was attributed to favorable mix and manufacturing efficiencies, partially offset by higher manufacturing input costs in certain areas.

Risks and Challenges:

• Higher operating expenses, including compensation-related costs, partially offset sales and earnings growth.
• Certain higher manufacturing input costs impacted earnings in the Animal Nutrition and Health segment.
• Forward-looking statements note risks including economic conditions, market share fluctuations, and uncertainties regarding future events.

Management Commentary and Tone:

• Ted Harris, Chairman, President and CEO, described the quarter as "excellent" with "healthy growth across all three of our reporting segments" and record consolidated net sales, net earnings, and adjusted EBITDA.
• Management remains "confident in the long-term growth outlook" and "excited about the future of our company."

Other Key Points:

• Balchem repurchased approximately $28 million of common stock during the third quarter and approximately $127 million over the trailing twelve months.
• Significant cash payments during the quarter included net debt payments of $28.0 million, income taxes paid of $27.8 million, and capital expenditures and intangible assets acquired of $12.5 million.
• Net working capital was $240.8 million as of September 30, 2026, including a cash balance of $66.3 million.
• The effective tax rate for the quarter was 22.2%, down from 22.6% in the prior year period, due to favorable adjustments related to prior year federal tax returns and foreign-derived intangible income deductions.
• A quarterly conference call was held on October 23, 2026, featuring CEO Ted Harris and CFO Martin Bengtsson.