Financials

Balchem Corporation (NASDAQ: BCPC) today reported financial results for the fourth quarter and full year 2018. Ted Harris, Chairman, CEO, and President of Balchem said, “We ended the year with a solid fourth quarter, highlighted by record fourth quarter sales, adjusted net earnings, and free cash flow. These results once again highlight the strength and resilience of our business model in what has proved to be a challenging business environment.”

Fourth Quarter 2018 Financial Highlights:

  • Fourth quarter net sales of $163.5 million in 2018, an increase of $4.3 million, or 2.7%, compared to the prior year quarter.
  • Year over year quarterly sales growth in three of our four segments, with record fourth quarter sales for our Human Nutrition & Health, Animal Nutrition & Health, and Specialty Products segments.
  • Fourth quarter adjusted EBITDA was $39.6 million, a decrease of $0.4 million, or 1.0%, from the prior year.
  • Fourth quarter GAAP net earnings were $20.3 million, a decrease of $21.6 million, or 51.6%, from the prior year primarily due to the one-time favorable impact of the Tax Cuts and Jobs Act in 2017. These net earnings resulted in GAAP earnings per share of $0.63. Record quarterly adjusted net earnings of $25.1 million increased $3.3 million or 14.9% from the prior year, resulting in adjusted earnings per share(a) of $0.77.
  • Record quarterly cash flows from operations were $39.5 million for 2018 with record quarterly free cash flow(a) of $33.6 million.

Full Year 2018 Financial Highlights:

  • Strong full year sales of $643.7 million, an increase of $48.9 million or 8.2% from the prior year, with year over year sales growth in all four of our segments.
  • Record Adjusted EBITDA of $159.9 million compared to $147.8 million from the prior year, an increase of $12.1 million or 8.2%.
  • GAAP net earnings of $78.6 million, a decrease of $11.5 million or 12.8% from the prior year primarily due to the favorable impact of the Tax Cuts and Jobs Act in 2017, resulting in GAAP diluted earnings per share of $2.42. Record adjusted net earnings of $97.7 million, an increase of $16.1 million or 19.7% from the prior year resulting in adjusted diluted earnings per share of $3.01.
  • Record full year cash flows from operations were $118.7 million compared to $110.6 million in 2017 and record full year free cash flow(a)was $99.5 million compared to $83.1 million in 2017.
  • Declared a $15.2 million dividend on common stock of $0.47 per share, an 11.9% increase over the prior year cash dividend.
  • Reduced our net debt(b) by $76.8 million to $101.7 million as of December 31, 2018, or 0.64 times 2018 Adjusted EBITDA.

Selected Quarterly Financial Data* 

Consolidated Statement of Earnings 
(In thousands, except per share data)  
For the Three Months Ended December 31 (Unaudited),
   2018  2017
 Net sales $163,539 $159,264
 Gross margin 51,325 51,638
 Operating expenses 24,070 24,972
 Earnings from operations 27,255 26,666
 Other expense 1,992 2,144
 Earnings before income tax expense 25,263 24,522
 Income tax expense 4,929 (17,453)
 Net earnings $20,334 $41,975
 Diluted net earnings per common share $0.63 $1.30
 Adjusted EBITDA(a) $39,598 $39,992
 Adjusted net earnings(a) $25,146 $21,889
 Adjusted net earnings per common share(a) $0.77 $0.68


Consolidated Statement of Earnings 
(In thousands, except per share data)  
For the Twelve Months Ended December 31 (Unaudited),
   2018  2017
 Net sales $643,679 $594,790
 Gross margin 204,252 189,009
 Operating expenses 96,501 91,754
 Earnings from operations 107,751 97,255
 Other expense 8,721 8,767
 Earnings before income tax expense 99,030 88,488
 Income tax expense 20,457 (1,583)
 Net earnings $78,573 $90,071
 Diluted net earnings per common share $2.42 $2.79
 Adjusted EBITDA(a) $159,936 $147,833
 Adjusted net earnings(a) $97,747 $81,689
 Adjusted net earnings per common share(a) $3.01 $2.53


 

Selected Annual Financial Data* 

  (in thousands, except per share data)
Year ended December 31, 2018 2017  2016  2015 2014
Statement of Operations Data     
Net sales  $643,679 $594,790 $553,204  $552,492  $541,383
Earnings before income tax expense 99,030 88,488 82,934 87,063 77,052
Income tax expense 20,457 (1,583) 26,962 27,341 24,226
Net earnings 78,573 90,071 55,972 59,722 52,826
Diluted net earnings per common share $2.42 $2.79 $1.75  $1.89  $1.69
Adjusted EBITDA(a) $159,936 $147,833 $149,263  $140,470  $121,835
Adjusted net earnings(a) $97,747 $81,689 $80,363  $79,513 $68,856
Adjusted net earnings per common share(a) $3.01 $2.53 $2.52  $2.51 $2.21

 

 December 31,  2017 2016 
2015 
2014 
2013
Selected Balance Sheet Data     
Total assets $981,355 $963,636 $948,626 $879,686 $861,531
Long-term debt 156,000 183,964 226,490 260,963 297,500
Other long-term obligations 7,372 5,847 6,896 6,683 5,950
Total stockholder's equity 691,618 616,881 521,033 463,705 391,898
Dividends per share $0.47 $0.42 $0.38  $0.34 $0.30