Balchem Corporation · NASDAQ:BCPC
Balchem — Q4 2015 Earnings Presentation
33 slides from Balchem's earnings presentation, February 2016
Slide 1: Balchem Corporation Q4 2015 and Year End 2015
BALCHEM CORPORATION Q4 2015 and Year End 2015 September 2014
Slide 2: Balchem Corporation
BALCHEM CORPORATION Founded in 1967, Balchem is engaged in the development, manufacturing and marketing of specialty performance ingredients and products for the food, nutritional, feed, pharmaceutical and medical sterilization industries. NASDAQ: BCPC Headquarters: New Hampton, NY Manufactu
Slide 3: Balchem at a Glance
BALCHEM AT A GLANCE Food, Pharma & Nutrition Medical Devices A technology-driven, food and beverage ARC Specialty Products solutions company developing complete Providing sterilization of medical systems, including ingredients, flavor Devices, pasteurization & bases and microencapsulation to control
Slide 4: Balchem Today: 2014 Results
BALCHEM TODAY 2014 Results (Dollars in millions, except per share data) REVENUE $ 541.4 NET EARNINGS $ 52.8 ADJUSTED EBITDA $ 121.8 NET EARNINGS PER SHARE $ 1.69 ADJUSTED EBITDA PER SHARE $ 3.91 4
Slide 5: Balchem Today: 2015 Results
BALCHEM TODAY 2015 Results (Dollars in millions, except per share data) REVENUE $ 552.5 NET EARNINGS $ 59.7 ADJUSTED EBITDA $ 140.5 NET EARNINGS PER SHARE $ 1.89 ADJUSTED EBITDA PER SHARE $ 4.44 5
Slide 6: Balchem Today: 4th Quarter Results - 2015
BALCHEM TODAY 4th Quarter Results - 2015 (Dollars in thousands, except per share data) 6
Slide 7: Balchem Today: 4th Quarter YTD Results - 2015
BALCHEM TODAY 4th Quarter YTD Results - 2015 (Dollars in thousands, except per share data) 7
Slide 8: Net Revenue
BALCHEM CORPORATION Net Revenue (dollars in millions) $600 $541 $553 $500 $133 Animal $400 $337 Nutrition and $292 $310 $140 Health SensoryEffects 30% $300 50% $135 Industrial $200 ARC Products Specialty 10% Products $100 $145 10% $0 2011 2012 2013 2014 2015 2015 YTD Net Revenue $552.49 8
Slide 9: Historical Consolidated Results
HISTORICAL CONSOLIDATED RESULTS (Dollars in millions, except per share data) Net Earnings Fully Diluted Earnings Per Common Share $60 $60 $531 $2.00 $1.89 $16 $1.691 $50 $45 $40 $1.45 $39 $0.49 $40 $1.50 $1.28 $1.32 $14 $30 $0.44 $1.00 $15 $20 $0.47 $0.50 $10 $15 $0.48 $0 $0.00 2011 2012 2013 2014 2
Slide 10: SensoryEffects
SENSORYEFFECTS Growth Platforms Products Strategy
Slide 11: SensoryEffects Highlights
SENSORYEFFECTS HIGHLIGHTS ($ in MM’s) 2013 2014 2015 Sales $48 $206 $278 Op. Income $11 $21 $38 • SensoryEffects acquired May 7, 2014 11
Slide 12: SensoryEffects Division Platforms
SENSORYEFFECTS DIVISION PLATFORMS (2011-2013 is PRE-ACQUISITION) ($ in millions) ($ in millions) Revenue Operating Income $300 $278 $45 $38.3 $40 $250 $70 $35 $9.9 $200 $30 $73 $25 $150 $20 $11.6 $100 $206 $67 $15 $21.3 $9.1 $10 $50 $5 $11.1 $11.3 $11.2 $48 $68 $7.7 $43 $44 $0 $0 2011 2012 2013 2014
Slide 13: SensoryEffects Ingredient Solutions
SENSORYEFFECTS INGREDIENT SOLUTIONS FLAVOR SYSTEMS POWDER SYSTEMS ENCAPSULATES & INCLUSIONS Customized wet- and dry-based Specialty spray-dried emulsified Encapsulates improve the texture, flavor systems. powders and formulated dry-blended taste, economics and shelf life of systems. food products vi
Slide 14: SensoryEffects Solutions
SENSORYEFFECTS SOLUTIONS NUTRITIONAL CEREAL SYSTEMS INFANT & TODDLER INGREDIENTS NUTRITION Customized manufacturing of cereal Development and manufacturing VitaCholine for supplements and based systems. Infant and Toddler formulas. fortified foods and beverages Choline: a nutrient for general well
Slide 15: Choline – RDI Pending
CHOLINE – “RDI” Pending proposed new label US Gov’t. recognizing that choline nutrition is important! • The newest edition of a key national dietary intake survey confirms that 90% of Americans are still not getting the choline they should be. • March 2014: FDA Proposed Rule includes provisions for
Slide 16: Animal Nutrition & Health
ANIMAL NUTRITION & HEALTH Growth Products Highlights
Slide 17: Nutritional Products
NUTRITIONAL PRODUCTS Nutritional products for ruminants, predominately dairy cows, to boost health and milk production. Feed grade choline chloride - an essential nutrient for the poultry and swine industries. 17
Slide 18: Animal Nutrition and Health Highlights
ANIMAL NUTRITION AND HEALTH HIGHLIGHTS ($ in millions) 2013 2014 2015 Sales $156 $176 $166 Op. Income $18 $24 $28 • #1 supplier globally of choline chloride. • Multi-Plant Operational Benchmarking & Logistics. • Focused R&D, novel product introduction/ commercialization has increased market penetrat
Slide 19: ANH Health Platforms
ANH HEALTH PLATFORMS 2015 Revenue - $166 million Protected Ingredients Base Ingredients (Shure™ Technology) ($59 MM; 36% of ANH) ($107 MM; 64% of ANH) Ruminant Ruminant Chelated Choline Health Protein Minerals Feed 19
Slide 20: Animal Nutrition & Health Revenue and Operating Income
ANIMAL NUTRITION & HEALTH ($ in millions) ($ in millions) REVENUE OPERATING INCOME $200 $30 $27.9 $166 $25 $6.2 $150 $41 $20 $5.6 $100 $40 $15 $176 $23.7 $7.5 $142 $148 $156 $10 $42 $16.1 $18.2 $50 $14.8 $5 $8.5 $43 $0 $0 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 20
Slide 21: Animal Nutrition & Health Quarterly Results
ANIMAL NUTRITION & HEALTH ($ in millions) ($ in millions) REVENUE OPERATING INCOME $50 $10 $40 $8 $30 $6 $43 $46 $46 $43 $42 $41 $4 $8.5 $20 $41 $40 $6.9 $7.1 $7.5 $5.5 $5.6 $6.2 $10 $2 $4.2 $0 $0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2014 2014 2014 2014 2015 2015 2015 2015 2014 2014 2014
Slide 22: ARC Specialty Products
ARC SPECIALTY PRODUCTS Growth Products Market
Slide 23: ARC Specialty Products Highlights
ARC SPECIALTY PRODUCTS HIGHLIGHTS ($ in MM’s) 2013 2014 2015 Sales $51 $54 $54 Op. Income $20 $21 $24 • Top provider of specialty gases. • EO – Medical Device Sterilization • PO – Spice & Nutmeat Fumigation • Top standards for safety, packaging, distribution. • Manage customer inventory with just-in
Slide 24: ARC Specialty Products Revenue and Operating Income
ARC SPECIALTY PRODUCTS ($ in millions) ($ in millions) REVENUE OPERATING INCOME $60 $54 $35 $13 $30 $48 $25 $24.0 $36 $14 $6.2 $20 $50 $51 $54 $15 $24 $48 $6.0 $14 $10 $20.3 $20.2 $21.3 $18.6 $6.1 $12 $14 $5 $5.7 $0 $0 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 44% of Sales 24
Slide 25: Medical Device Market
MEDICAL DEVICE MARKET Sterilization by Method Steam Other 1% 2% Overall medical device market continues to grow with aging demographics Radiation Ethylene Oxide utilization has historically 40% Ethylene increased 3%-4% per year Oxide 57% ARC repackages hazardous chemicals safely and responsibl
Slide 26: Industrial Products
INDUSTRIAL PRODUCTS Growth Products Joint Venture
Slide 27: Industrial Products Highlights
Industrial Products HIGHLIGHTS ($ in millions) 2013 2014 2015 Sales $83 $105 $54 Op. Income $16 $17 $6 • Choline chloride and derivatives of choline chloride for numerous industrial applications. Products • Multi-Plant Operational Benchmarking & Logistics. • Focused R&D, novel product introduction/
Slide 28: Industrial Products Revenue and Operating Income
Industrial Products ($ in millions) ($ in millions) REVENUE OPERATING INCOME $125 $100 $15 $75 $10 $54 $105 $15.9 $16.5 $5.6 $50 $8 $0.2 $83 $13 $11.7 $12.0 $59 $69 $5 $1.1 $25 $12 $1.1 $21 $3.1 $0 $0 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 28
Slide 29: Industrial Products Quarterly Results
Industrial Products ($ in millions) ($ in millions) REVENUE OPERATING INCOME $40 $5 $30 $4 $3 $20 $4.8 $30 $2 $4.2 $4.4 $26 $29 $10 $20 $21 $3.1 $3.1 $12 $13 $1 $8 $1.1 $1.1 $0 $0 $0.2 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2014 2014 2014 2014 2015 2015 2015 2015 2014 2014 2014 2014 2015 20
Slide 30: Looking Ahead
LOOKING AHEAD Looking Ahead Future Growth Recognition
Slide 31: Public Recognition
PUBLIC RECOGNITION Nov. 1996 Forbes 200 Best Small Companies #193 Oct. 2007 Forbes 200 Best Small Companies #51 Nov. 1997 Forbes 200 Best Small Companies #116 Jun 2008 Balchem named to S&P 600 Oct. 2001 Forbes 200 Best Small Companies #128 July 2008 Fortune Small Business 100 Fastest Growing Compani
Slide 32: Future
FUTURE • SensoryEffects is a growth engine • Positioned for growth – Organic – Acquisitions / JV’s / Partnerships • Highly skilled management team in place • Building Global Animal Nutrition and Health Business • Stability of ARC Specialty Products • Positioning ourselves for participation in emergi
Slide 33: September 2014
September 2014