UNITED STATES
SECURITIES AND EXCHANGE 7COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report
Pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934
Date of report (date of earliest event reported): April 29, 2003
Balchem Corporation
(Exact name of registrant as specified in its charter)
Maryland 1-13648 13-257-8432
(State or other jurisdiction of (Commission file number) (I.R.S. Employer
incorporation or organization) Identification Number)
P.O. Box 600, New Hampton, NY
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (845) 326-5600
Item 7 Financial Statements and Exhibits
(c) Exhibits
99 Press Release of Balchem Corporation dated April 29, 2003, reporting
Balchem's financial results for the first quarter of 2003.
Item 9. Regulation FD Disclosure
The following information is being furnished pursuant to "Item 9 Regulation FD
Disclosure" and is also being furnished pursuant to "Item 12 Results of
Operations and Financial Condition" in accordance with SEC Release No. 33-8216.
On April 29, 2003, Balchem Corporation issued a press release announcing its
financial results for the first quarter of 2003. A copy of the press release is
attached as Exhibit 99 to this report.
SIGNATURE
Under the requirements of the Securities Exchange Act of 1934, the registrant
has caused this report to be signed on its behalf by the authorized undersigned.
BALCHEM CORPORATION
By:/s/ Dino A. Rossi
-------------------------
Dino A. Rossi, President,
Chief Executive Officer
Dated: April 29, 2003
EXHIBIT INDEX
Exhibit
No. Description
99 Press Release of Balchem Corporation dated April 29, 2003, reporting
Balchem's financial results for the first quarter of 2003.
April 29, 2003
BALCHEM CORPORATION (BCP - AMEX)
--------------------------------
Reported as follows (unaudited) for the Quarter ended March 31, 2003
($000 Omitted Except for Net Earnings Per Share)
For the Three Months Ended March 31
-----------------------------------
2003 2002
---- ----
Net Sales $ 14,816 $ 14,389
Gross Profit 5,651 5,294
Operating Expenses 2,894 2,868
----------- -----------
Earnings from Operations 2,757 2,426
Other Expense (Income) 73 86
----------- ------------
Earnings Before Income Tax Expense 2,684 2,340
Income Tax Expense 1,001 902
----------- ------------
Net Earnings $ 1,683 $ 1,438
=========== ============
Basic Net Earnings Per Common Share $ 0.35 $ 0.31
Diluted Net Earnings Per Common Share $ 0.34 $ 0.29
First quarter records were achieved in both net sales and net income. Net sales
increased 3.0%, while net earnings increased 17.0%. These results of the first
quarter were as we expected, especially in light of the continued difficult
economic environment. With consumers everywhere watching the dollars they spend,
and customers around the world carefully managing inventory levels, we were
pleased with our record sales and solid profit performance. Diluted net earnings
per common share rose 16.7% over the comparable year quarter.
The ARC Specialty Products segment generated net sales of $5.9M, up 11.1% over
the comparable quarter in 2002 largely due to increased volumes sold of ethylene
oxide for medical device sterilization. Net sales in the
Encapsulated/Nutritional Products segment decreased 3.4%, to $6.1M. In this
segment our sales into the domestic food market declined versus the prior year
quarter, but were up slightly from the fourth quarter of 2002. We have new
products approved and ready to market as we deal with conservative customer
purchasing patterns as experienced in the fourth quarter. We are also seeing
delays in the timing of new product launches by customers and prospects
reflecting the intense competitive situation facing most food retailers due to
the current economy. Our international market did, however, realize strong
growth due to a new product introduced into the confectionery industry.
Page 2
BALCHEM CORPORATION (BCP - AMEX)
--------------------------------
While the U.S. dairy industry has continued to operate at 1980 low milk prices,
sales of our Reashure product for the animal health and nutrition industry have
remained basically flat. We believe this is a good indication of this market
understanding the value of our product. Net sales in the Unencapsulated Feed
Supplements segment grew to $2.7M, or 2%, over the comparable period in 2002.
This increase was driven by improved volume in all product lines.
Consolidated gross profit in the quarter ended March 31, 2003 improved $0.36M,
or 6.7%, over the comparable prior year period, due largely to growth in sales
volume and favorable product mix. Operating (Selling, R&D, and Administrative)
expenses were $2.9M in the quarter, or 19.5% of net sales, as compared to 19.9%
of net sales in the prior year quarter.
Net earnings increased 17.0% over the comparable quarter of 2002. Basic and
fully diluted earnings per common share rose 13.4% and 16.7% over the comparable
quarter for 2002 respectively.
Cash flow from operations continued to be strong in the quarter, allowing the
Company to reduce long term debt by $0.4 million and complete $0.8 million of
capital projects.
Outlook:
Commenting on the outlook for 2003, Mr. Dino A. Rossi, President and Chief
Executive Officer of Balchem, said "We will continue to focus on being a leader
in the market segments in which the Company operates. Having built scale in
2002, we are now focused on reducing costs and optimizing logistics and raw
materials across business segments as we exploit our technology base. Particular
strength in the ARC Specialty Products segment should continue, while the
Encapsulated/Nutritional segment will likely be challenged by the U.S. economy
for another quarter due to current economic situations in both the dairy and
domestic food markets. The Unencapsulated Feed Supplements segment is expected
to see modest sales growth for the year. Our outlook for the year continues to
be moderate earnings growth."
Quarterly Conference Call
A quarterly conference call will be conducted on Tuesday, April 29, 2003, at
2:00 PM EDT to review first quarter 2003 results. The call will be hosted by
Dino A. Rossi, Balchem's President and CEO, and Frank Fitzpatrick, Corporate
Controller. We invite you to listen to the call by dialing 800-473-6123 ten
minutes prior to the scheduled start time of the conference call. The press
release, and its accompanying financial exhibits, will also be available on the
Company website, www.balchem.com, prior to the conference call.
---------------
Segment Information
Balchem Corporation consists primarily of three business segments: ARC Specialty
Products, Encapsulated/Nutritional Products, and Unencapsulated Feed
Supplements. Through ARC Specialty Products, Balchem provides specialty-packaged
chemicals for use in healthcare and other industries. The
Encapsulated/Nutritional segment provides proprietary microencapsulation
solutions to an expanding variety of applications. The Unencapsulated Feed
Supplements segment (BCP Ingredients, Inc.) manufactures and supplies choline
chloride and derivatives used primarily in the poultry and swine industries.
Contact: Jackie Powell, Investor Relations Coordinator, Telephone: 845-326-5635
Page 3
BALCHEM CORPORATION (BCP - AMEX)
--------------------------------
Sales by Segment
($ in 000's)
----------------------------------------------------------------------------
Three Months ended
March 31,
2003 2002
----------------------------------------------------------------------------
ARC Specialty Products $ 5,938 $ 5,345
Encapsulated/Nutritional Products 6,143 6,363
Unencapsulated Feed Supplements 2,735 2,681
----------------------------------------------------------------------------
Total $ 14,816 $ 14,389
============================================================================
Selected Balance Sheet Items
($ in 000's)
March 31, March 31,
2003 2002
---- -----
Cash & Investments $ 1,812 $ 4,565
Accounts Receivable 7,295 7,388
Inventories 6,997 4,949
Other Current Assets 1,439 852
--------- -----------
Current Assets 17,543 17,754
Property, Plant, & Equipment (net) 26,144 18,136
Other Assets 8,382 9,288
--------- -----------
Total Assets $ 52,069 $ 45,178
========= ===========
Current Liabilities 5,156 5,880
Long-Term Debt 9,145 10,888
Other Long-Term Obligations 2,584 1,392
--------- -----------
Total Liabilities 16,885 18,160
Stockholders' Equity 36,397 28,962
Less: Treasury Stock @ Cost (1,213) (1,944)
--------- -----------
Net Stockholders Equity 35,184 27,018
--------- -----------
Total Liability and Stockholders' Equity $ 52,069 $ 45,178
========= ===========
This release contains forward-looking statements, which reflect Balchem's
expectation or belief concerning future events that involve risks and
uncertainties. Balchem can give no assurance that the expectations reflected in
forward looking statements will prove correct and various factors could cause
results to differ materially from Balchem's expectations, including risks and
factors identified in Balchem's annual report on Form 10-K for the year ended
December 31, 2002. Forward-looking statements are qualified in their entirety by
the above cautionary statement.