Balchem Corporation · NASDAQ:BCPC
Balchem — Investor Presentation (March 2012)
38 slides from Balchem's investor presentation, March 2012
Slide 1: Strategically Evolving
March 2012 Balchem Corporation Strategically Evolving
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains “forward-looking statements” within the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on management’s reasonable expectations and assumptions as of the date of this pres
Slide 3: Balchem Corporation
Balchem Corporation Founded in 1967 NASDAQ: BCPC Headquarters: New Hampton, NY Sales Office: Amsterdam, The Netherlands Manufacturing Sites: – Slate Hill, New York – Green Pond, South Carolina – Verona, Missouri – Salt Lake City, Utah – St. Gabriel, Louisiana – Marano Ticino, Italy 3
Slide 4: Balchem Corporation at a Glance
Balchem Corporation at a Glance Food, Pharma and Nutrition One of the world’s leading providers of microencapsulated ingredient solutions, and the leading human choline producer. Animal Nutrition and Health Serving Three Market Sectors • Ruminant Animals - Specialty nutritionals. • Monogastric Anima
Slide 5: Balchem Overview
Balchem Overview Balchem - 2011 NASDAQ: BCPC Market Cap: $808MM Revenue EBITDA $292MM $66MM Food, Pharma & Nutrition Animal Health & Nutrition Specialty Products Rev: $43MM EBIT: $11MM Rev: $201MM EBIT: $26MM Rev: $48MM EBIT: $19MM One of the world’s leading providers Serving Three Market Sectors
Slide 6: Balchem – Growing Globally
Balchem – Growing Globally…. 6
Slide 7: Acquisition History (2001 – Present)
Acquisition History (2001 – Present) Acquired Date Acquisition Description Sales DCV, Inc. - Choline animal feed, human choline nutrient and Jun-01 $16M encapsulated product lines. Loders Croklaan - Encapsulation, agglomeration and granulation Jun-05 $ 6M* business. *Divested calcium portion of
Slide 8: Segment Revenue
Segment Revenue (In millions) 2010 2011 $292M $255M Animal $43 Nutrition and $42 Health ARC Specialty Products $48 $42 $171 Food, Pharma $201 and Nutrition Up $37M - 14.5% 8
Slide 9: Historical Consolidated Results
Historical Consolidated Results (In millions) Net Revenue Net Earnings $400 $50 $292 $39 $300 $232 $255 $40 $33 $219 $27 $176 $30 $200 $19 $20 $16 $100 $10 $0 $0 2007 2008 2009 2010 2011 2007 2008 2009 2010 2011 9
Slide 10: Consolidated Quarterly Results
Consolidated Quarterly Results (In millions) Net Revenue Operating Income $100 $20 $69.8 $69.7 $13.97 $13.77 $75 $10 $50 $25 $0 $0 4th Qtr 2010 4th Qtr 2011 4th Qtr 2010 4th Qtr 2011 10
Slide 11: Fully Diluted Earnings Per Common Share
Fully Diluted Earnings Per Common Share $1.50 $1.28 $1.25 $1.12 $0.93 $1.00 $0.67 $0.75 $0.58 $0.50 $0.25 $0.00 2007 2008 2009 2010 2011 11
Slide 12: Real People. Real Science. Real Results.
Real People. Real Science. Real Results. 13
Slide 13: Balchem Animal Nutrition and Health
Balchem Animal Nutrition and Health Manufactures and markets: • Nutritional products for ruminants, predominately dairy cows, to boost health and milk production. • Feed grade choline chloride - an essential nutrient for the poultry and swine industries. • Choline chloride and derivatives of choli
Slide 14: Animal Nutrition and Health
Animal Nutrition and Health Highlights 2010 2011 Sales $170.8M $201.5M Operating Income $ 24.1M $ 26.5M Stable U.S. poultry and dairy industry Stable margins on feed grade choline through raw material based index model. Improved production/supply chain efficiencies globally Growth opportunitie
Slide 15: Animal Nutrition and Health – Revenue Splits
Animal Nutrition and Health – Revenue Splits 2010 Revenue - $171M 2011 Revenue - $201M Feed Grade Choline 26% 29% Ruminant Products 17% 57% 53% Industrial 18% Grade Products 16
Slide 16: Animal Nutrition and Health (In millions)
Animal Nutrition and Health (In millions) Net Revenue Operating Income $250 $201.5 $30 $26.5 $24.1 $200 $170.8 $21.4 $160.5 $147.7 $150 $20 $111.1 $11.3 $9.9 $100 $10 $50 $0 $0 2007 2008 2009 2010 2011 2007 2008 2009 2010 2011 17
Slide 17: Product Launches and Promotions
Product Launches and Promotions 19
Slide 18: R&D activities – developing technology based upon credible collaborative science
R&D activities – developing technology based upon credible collaborative science 2001-11 research activities include work at these universities/research institutes Cornell University U.C. Davis University of Wisconsin University of Minnesota Texas A&M Ag. Canada - Quebec University of
Slide 19: Growing Market Opportunity For Balchem
Growing Market Opportunity For Balchem Horizontal drilling and multi-stage fracturing has facilitated development of many shell formations. 21
Slide 20: New Market Opportunity For Balchem
New Market Opportunity For Balchem Horizontal well development requires high volumes of frac fluids which typically require clay stabilizers. 22
Slide 21: Where Do We Fit?
Where Do We Fit? Choline is a quaternary compound, very effective as a clay stabilizer, fitting technical requirements, improved worker safety when compared to other clay stabilizers and is “uniquely” environmentally safer. Balchem produces the highest quality choline, the largest quantity world
Slide 22: Growing Industrial Opportunities - ANH
Growing Industrial Opportunities - ANH 2011 Revenue - $201M Current Industrial Products Methyl Amines Feed Grade Choline 29% Metam Sodium 53% Specialty Choline and choline ANH 18% derivatives for oil and gas applications Industrial Grade Products 24
Slide 23: Food, Pharma and Nutrition
Food, Pharma and Nutrition 25
Slide 24: Food, Pharma and Nutrition
Food, Pharma and Nutrition Highlights 2010 2011 Sales $42.0M $42.5M Operating Income $9.7M $11.1M Human grade Choline positioned for double digit revenue growth Operational Excellence Building a premier specialty ingredient business utilizing microencapsulation and application expertise. Organic
Slide 25: Food, Pharma and Nutrition (in millions)
Food, Pharma and Nutrition (in millions) Net Revenue Operating Income $50 $12 $11.1 $42.0 $42.5 $35.7 $35.4 $9.7 $40 $32.1 $10 $30 $8 $5.5 $5.0 $6 $4.1 $20 $4 $10 $2 $0 $0 2007 2008 2009 2010 2011 2007 2008 2009 2010 2011 27
Slide 26: Our Food Business Continues to Grow!
Our Food Business Continues to Grow! 29
Slide 27: The European Food Safety Authority Choline Opinion
The European Food Safety Authority Choline Opinion 30
Slide 28: Choline In the Diet
Choline In the Diet Key Target Messages Audience Liver Health People of all ages People of all ages Synergy with Folic Acid Especially Pregnant Women Improve Improve Life Life Long Long Memory Memory Pre-natal, infant, children Athletic Athletic Performance/Recovery Performance/Recovery Age 18+ Impr
Slide 29: Major Brands Fortified with Choline
Major Brands Fortified with Choline 33
Slide 30: ARC Specialty Products
ARC Specialty Products SPECIALTY PRODUCTS 34
Slide 31: ARC Specialty Products
ARC Specialty Products Highlights 2010 2011 Sales $42.2M $47.9M Operating Income $15.9M $18.6M Steady revenue and income growth Operational Excellence Top provider of specialty gases Top standards for safety, packaging, distribution Manage customer inventory with just-in-time delivery and uniq
Slide 32: ARC Specialty Products (in millions)
ARC Specialty Products (in millions) Net Revenue Operating Income $47.9 $50 $42.2 $18.6 $20 $35.8 $36.4 $15.9 $40 $33.1 $14.3 $15 $12.5 $30 $11.8 $10 $20 $10 $5 $0 $0 2007 2008 2009 2010 2011 2007 2008 2009 2010 2011 36
Slide 33: Ethylene Oxide Market
Ethylene Oxide Market Overall medical device market continues to grow. Ethylene Oxide sterilization market continues to grow as well. EO shipments have historically increased 2%-3% per year. No major shifts in market share between sterilization technologies in 2010. 38
Slide 34: Medical Device Sterilization Market Share
Medical Device Sterilization Market Share Sterilization by Method Steam 2% Other 1% Radiation 40% EO 57% 39
Slide 35: Propylene Oxide Update
Propylene Oxide Update ABERCO, Inc – Acquisition Completed June 3, 2010 EPA FIFRA regulated for fumigation ― Sole registrant ― Spice ― Nutmeats (except peanuts) Crops ― Almond is main crop, then spices ― Pistachios & walnuts ― Peanuts require residual study for EPA approval Business performed ve
Slide 36: Public Recognition
Public Recognition Nov. 1996 Forbes 200 Best Small Companies #193 Nov. 1997 Forbes 200 Best Small Companies #116 Oct. 2001 Forbes 200 Best Small Companies #128 Jun. 2003 Business Week 100 Hot Growth Companies #16 Sep. 2003 Fortune Small Business 100 Fastest Growing Companies #86 Jul. 200
Slide 37: The Future
The Future Positioned for growth Highly skilled management team in place Focusing our research efforts Stability of ARC Specialty Products Building Global Animal Nutrition and Health Business Food, Pharma and Nutrition continues as growth engine Solid balance sheet 42
Slide 38: Strategically Evolving
Strategically Evolving 43