Balchem Corporation Q1 FY2026 earnings call

• Strong first quarter financial results with record consolidated sales, adjusted EBITDA, etc. - Healthy growth fueled by market penetration of specialty nutrients and delivery systems aligned with better-for-you trends. - Human nutrition and health performs well with demand for minerals, nutrients, etc. - Animal nutrition and health has year-over-year growth in monogastric and ruminant businesses. - Specialty products' performance gases and plant nutrition businesses doing well. - Progress on strategic initiatives like research on vitacholine and sustainability report with progress on 2030 goals.

Human nutrition and health: sales of $172 million, up 8.3%, earnings from operations $40 million, up 5.4%, adjusted earnings from operations $43 million, up 6%. Animal nutrition and health: sales of $62 million, up 8.6%, earnings from operations $6 million, up 8.7%, adjusted earnings from operations $6 million, up 8.2%. Specialty products: sales of $35 million, up 4.4%, earnings from operations $12 million, up 24.5%, adjusted earnings from operations $13 million, up 21.2%. Revenue contribution: Human nutrition and health likely a significant portion, animal nutrition and health and specialty products also contributing respective percentages based on overall $271 million total.

• Expect continued quarterly year-over-year growth on consolidated basis over coming quarters. - Monitoring geopolitical and macroeconomic environment and adjusting accordingly. - Confident in ability to drive growth in segments despite potential margin compression from inflation. - Excited about 2026 and confident in delivering top and bottom line growth while advancing long-term platforms.

• Ongoing geopolitical and macroeconomic uncertainty. - Inflation, largely petrochemical-based impacting animal nutrition and health segment. - Potential supply chain disruptions due to Middle East conflict. - Timing lag between input cost inflation and pricing adjustments causing modest margin compression.

Q: What percent of sales are branded in human nutrition and health and future outlook?

A: Branded ingredients in human nutrition and health make up about 40 to 50% now, part growing faster, will be bigger in portfolio.

Q: Other areas of expansion beyond sports drinks and energy drinks?

A: Nutritional beverage market is significant opportunity, expanding beyond historical energy drinks, investing in other marketing areas like partnering with women's soccer teams.

Q: Details on gross margin surprise and future gross margins?

A: Gross margin strong due to higher margin businesses growing fastest, portfolio tailwind, effective management of price and inflation, but inflation expected to cause modest margin rate compression.

Q: Evolution of vitacoline positioning and industrial business impact?

A: Excited about vitacoline study results, need to reposition marketing for aging population, industrial business still low but demand up.

Q: International growth update and European monogastric recovery?

A: Geographic expansion a strategic focus, hiring in international regions, European monogastric business saw double digit volume improvement post anti-dumping, watching Middle East conflict impact.

Q: Nutrients and food ingredients business performance and specialty products profitability source?

A: H&H's minerals and nutrients growing strongly, food ingredients and solutions growing, specialty products' performance gases driving growth, likely from price and volume with geographic factors.