Balchem Corporation · NASDAQ:BCPC
Balchem — Q3 2018 Earnings Presentation
28 slides from Balchem's earnings presentation, Dec 20, 2018
Slide 1: Balchem Investor Presentation, Q3 2018
BALCHEM CORPORATION Balchem Investor Presentation, Q3 2018
Slide 2: Safe Harbor Statement
Safe Harbor Statement • During the course of this presentation, management may make forward-looking statements regarding financial performance and future events. • We will attempt to identify these statements by use of words such as expect, believe, anticipate, intend, and other words that denote fu
Slide 3: Balchem Corporation
Balchem Corporation Balchem develops, manufactures, and markets specialty ingredients that improve and enhance the health and well being of life on the planet. Highlights • NASDAQ: BCPC • Founded in 1967 • Headquarters: New Hampton, NY • Approximately 1,100 Employees • 19 Manufacturing Sites: - 17 i
Slide 4: Key Investment Highlights
Key Investment Highlights • Proven Track Record of Growth • Leading Positions in Attractive Markets • Creating New Demand Through Innovation • Delivering Healthy Margins • Generating Cash Flow from Operations Available for Reinvestment 4
Slide 5: Balchem at a Glance
Balchem at a Glance HUMAN NUTRITION & HEALTH ANIMAL NUTRITION & HEALTH Markets Served Solutions Markets Served Solutions • Nutritional • Micro-encapsulation • Dairy • Micro-encapsulation Supplements • Choline • Poultry and Swine • Choline • Food and Beverage • Chelated Minerals • Companion Animal •
Slide 6: Recent Acquisitions
Recent Acquisitions Albion International in February 2016 Highlights Human and Plant Nutrition • Adjacent product offering Key technologies and products include: • A premium brand with high margins • Magnesium, Iron, Calcium, Zinc, Multi, Potassium • ~$50M Revenue • Ferrochel®, Creatine MagnaPower®,
Slide 7: Five Year Financial Performance
Five Year Financial Performance FY 2017 FY 2012 CAGR Revenue 594.8 310.4 13.9% Gross Margin 189.0 89.5 16.1% As a % of Sales 31.8% 28.8% Operating Income 97.3 59.8 10.2% Net Earnings 90.1 40.0 17.6% Earnings Per Share 2.79 1.32 16.1% Adjusted EBITDA 147.8 73.3 15.1% As a % of Sales 24.9% 23.6% Adjus
Slide 8: Q3 2018 Financial Performance
Q3 2018 Financial Performance Q3 2018 Q3 2017 Change Revenue 155.0 150.7 2.9% Gross Margin 48.0 46.2 3.9% As a % of Sales 31.0% 30.6% Operating Income 25.5 23.1 10.5% Net Earnings 19.2 16.0 19.8% Earnings Per Share 0.59 0.50 18.0% Adjusted EBITDA 38.4 35.7 7.4% As a % of Sales 24.8% 23.7% Adjusted E
Slide 9: YTD 2018 Financial Performance
YTD 2018 Financial Performance YTD 2018 YTD 2017 Change Revenue 480.1 435.5 10.2% Gross Margin 152.9 137.4 11.3% As a % of Sales 31.9% 31.5% Operating Income 80.5 70.6 14.0% Net Earnings 58.2 48.1 21.1% Earnings Per Share 1.79 1.49 22.1% Adjusted EBITDA 120.3 107.8 11.6% As a % of Sales 25.1% 24.8%
Slide 10: Key Financial Metrics
Key Financial Metrics $800 Revenue ($M) $110 Net Income ($M) $100 $700 90 $90 595 42 $600 552 553 $80 541 159 $500 163 133 141 $70 65* 60 155 $60 53 56 $400 140 151 16 19 337 139 $50 45 16 310 160 40 19 $300 16 80 82 164 $40 11 14 135 147 10 14 20 139 $200 88 $30 12 15 17 75 132 11 15 83 161 $20 12
Slide 11: Human Nutrition & Health
HUMAN NUTRITION & HEALTH WE MAKE IT HEALTHY HUMAN NUTRITION & HEALTH WE MAKE IT HEALTHY
Slide 12: Human Nutrition & Health at a Glance
Human Nutrition & Health at a Glance ($M) Revenue $350 HUMAN NUTRITION & HEALTH $300 $316 $297 Markets Served Solutions $250 $278 • Nutritional • Micro-encapsulation $200 $206 Supplements • Choline $150 • Food and Beverage • Chelated Minerals $100 • Infant & Toddler • Powder, Flavor, & Formula Cerea
Slide 13: Human Nutrition & Health Performance
Human Nutrition & Health Performance Q3 2018 Q3 2017 YTD 2018 YTD 2017 Revenue ($M) $ 85.9 $ 81.4 $ 254.0 $ 232.5 Adjusted EBITDA ($M) $ 22.2 $ 19.5 $ 63.7 $ 58.5 Leveraging Growth Opportunities Across The Segment FDA RDI for Choline and Expanding Choline Awareness Platforms Mineral Nutrition Growth
Slide 14: Animal Nutrition & Health
ANIMAL NUTRITION & HEALTH BLENDING SCIENCE AND NUTRITION ANIMAL NUTRITION & HEALTH BLENDING SCIENCE AND NUTRITION
Slide 15: Animal Nutrition & Health at a Glance
Animal Nutrition & Health at a Glance ($M) Revenue $200 ANIMAL NUTRITION & HEALTH $176 $150 $166 $161 $156 $158 Markets Served Solutions $100 • Dairy • Micro-encapsulation • Poultry and Swine • Choline • Companion Animal • Chelated Minerals $50 • Aquaculture • Amino Acids and Other Ruminant $0 ANIMA
Slide 16: Animal Nutrition & Health Performance
Animal Nutrition & Health Performance Q3 2018 Q3 2017 YTD 2018 YTD 2017 Revenue ($M) $ 40.4 $ 38.0 $ 128.6 $ 113.1 Adjusted EBITDA ($M) $ 6.7 $ 6.6 $ 24.3 $ 19.1 Innovative, Science Based Nutrition for Animals Rumen Protected Choline Penetration in Dairy Cows Platforms National Research Council Reco
Slide 17: Specialty Products
SPECIALTY PRODUCTS WE MAKE IT GROW WE MAKE IT SAFE SPECIALTY PRODUCTS WE MAKE IT GROW / WE MAKE IT SAFE
Slide 18: Specialty Products at a Glance
Specialty Products at a Glance Revenue ($M) $72 $73 $70 $60 $48 $54 $54 $51 $36 $24 $12 $0 2013 2014 2015 2016 2017 SPECIALTY ($M) SPECIALTY PRODUCTS PRODUCTS $35 Adj. EBITDA 12% $30 $32 $32 Markets Served Solutions $25 $28 • Medical Device • Chelated Minerals $25 $20 $24 Sterilization • Ethylene Ox
Slide 19: Specialty Products Performance
Specialty Products Performance Q3 2018 Q3 2017 YTD 2018 YTD 2017 Revenue ($M) $ 17.6 $ 17.3 $ 58.2 $ 56.8 Adjusted EBITDA ($M) $ 7.5 $ 7.3 $ 24.6 $ 25.1 Capturing Medical Device Market Growth New Applications for Pasteurization/Fumigation Platforms Expand Plant Micronutrient Product Line & Applicati
Slide 20: Industrial Products
INDUSTRIAL PRODUCTS Industrial WE MAKE IT GREEN Products INDUSTRIAL PRODUCTS WE MAKE IT GREEN 20
Slide 21: Industrial Products at a Glance
Industrial Products at a Glance ($M) Revenue $125 $100 $105 $75 $83 $50 $54 $48 $25 $25 $0 2013 2014 2015 2016 2017 ($M) INDUSTRIAL Adj. EBITDA PRODUCTS INDUSTRIAL PRODUCTS $20 8% $18 $19 $16 Markets Served Solutions $17 $14 • Oil and Gas • Micro-encapsulation $12 Fracking • Choline $10 • Electronic
Slide 22: Industrial Products Performance
Industrial Products Performance Q3 2018 Q3 2017 YTD 2018 YTD 2017 Revenue ($M) $ 11.1 $ 14.1 $ 39.4 $ 33.1 Adjusted EBITDA ($M) $ 2.0 $ 2.3 $ 7.7 $ 5.1 Capturing Recovery Volumes Green Clay Stabilization Solutions Platforms Low Cost Clay Stabilization Growth 22
Slide 23: Looking Ahead
HUMAN NUTRITION & HEALTH NUTRITION & PHARMA Looking Ahead
Slide 24: Future
Future • Positioned For Growth in Attractive Markets Organic Growth Growth through Strategic Acquisitions • Creating New Demand Through Innovation • Recent Acquisitions add new Technologies, International Reach, and Synergistic Opportunities • Building Global Human and Animal Nutrition & Health
Slide 25: At our core, we are a health and nutrition company
HUMAN NUTRITION & HEALTH CEREAL SYSTEMS “At our core, we are a health and nutrition company.” Ted Harris, President and CEO
Slide 26: Appendix
Appendix A. Be BALCHEM’
Slide 27: Reconciliation of Net Earnings and EPS
Reconciliation of Net Earnings and EPS For the Year Ended December 31, 2017 2017 ($M) GAAP Net Earnings $ 90.1 Less: Impact of Tax Cuts and Jobs Act $ 24.9 Tax Cuts and Jobs Act adjusted net earnings $ 65.1 Tax Cuts and Jobs Act adjusted earnings per common share $ 2.02 Shares used in the calculatio
Slide 28: Full Year 2017 Financial Performance
Full Year 2017 Financial Performance FY 2017 FY 2016 Change Revenue 594.8 553.2 7.5% Gross Margin 189.0 180.9 4.5% As a % of Sales 31.8% 32.7% Operating Income 97.3 90.8 7.1% Net Earnings 90.1 56.0 60.9% Earnings Per Share 2.79 1.75 59.4% Adjusted EBITDA 147.8 149.3 -1.0% As a % of Sales 24.9% 27.0%