Executive Summary

Record Q4: Net sales $240.0M (+4.9% YoY), adjusted EBITDA $62.8M (+13.4% YoY), GAAP EPS $1.03 and adjusted EPS $1.13; gross margin expanded 320 bps to 36.0% on favorable mix .
Strength in Human Nutrition & Health (HNH) and Specialty Products; Animal Nutrition & Health (ANH) returned to modest YoY growth with ruminant strength offsetting monogastric softness .
Sequentially stable revenue vs Q3, but adjusted EBITDA dipped from a record ($62.8M vs $64.4M in Q3) as mix normalized and input cost deflation tailwinds plateaued .
Balance sheet and cash flow catalysts: $52.3M operating cash flow, $39.8M FCF; net debt reduced to ~0.6x leverage; annual dividend raised 10% to $0.87 (from $0.79) .
Outlook: Management expects 2025 top- and bottom-line growth; monitoring tariff risk, but sees net-neutral to slightly favorable exposure; foreign tax item in Q4 viewed as one-off .

What Went Well and What Went Wrong

What Went Well

Record quarterly sales and adjusted EBITDA; “record fourth quarter consolidated sales, adjusted EBITDA and adjusted net earnings” with YoY growth across all three segments .
HNH outperformed on both nutrients and food ingredients; segment sales +6.8% YoY to $147.3M and operating earnings +33.9% YoY on favorable mix; management highlighted K2 and Encapsulates as standouts .
Gross margin rate rose to 36.0% (+320 bps YoY) on mix (more HNH/Specialty); net interest expense fell ($2.8M vs $5.3M prior year) with debt paydown; adjusted EBITDA margin 26.2% .

What Went Wrong

Sequential adjusted EBITDA declined vs Q3 ($62.8M vs $64.4M) despite flat revenue; management flagged plateauing deflation and potential tariff impacts as risks to margins .
ANH monogastric markets in Europe remain pressured by low-cost imports; management expects flattish monogastric while ruminant grows, leaving mix risks within ANH .
Q4 effective tax rate rose to 24.5% (vs 19.9% prior year) on higher foreign taxes; FCF of $39.8M was below Q3’s $42.2M as capex and an acquisition payment increased outflows .

Financial Results

Consolidated Results (USD)

Metric	Q2 2024	Q3 2024	Q4 2024	Q4 2023
Net Sales ($M)	$234.1	$239.9	$240.0	$228.7
GAAP Diluted EPS ($)	$0.98	$1.03	$1.03	$0.82
Adjusted Diluted EPS ($)	$1.09	$1.13	$1.13	$0.95
Gross Margin (%)	35.5%	35.6%	36.0%	32.8%
Adjusted EBITDA ($M)	$62.3	$64.4	$62.8	$55.4

Notes: Adjusted metrics per company’s non-GAAP reconciliations .

Consensus vs Actuals for Q4 2024

Metric	Consensus (S&P Global)	Actual
Revenue ($M)	N/A (data unavailable via S&P Global at time of request)	$240.0
Primary EPS ($)	N/A (data unavailable via S&P Global at time of request)	$1.03 (GAAP); $1.13 adjusted

Values retrieved from S&P Global could not be obtained due to system limit at time of query; consensus comparisons are therefore unavailable at this time.

Segment Sales ($M)

Segment	Q3 2024	Q4 2024	Q4 2023
Human Nutrition & Health	$152.3	$147.3	$138.0
Animal Nutrition & Health	$52.9	$58.3	$58.2
Specialty Products	$33.2	$32.9	$31.0
Total	$239.9	$240.0	$228.7

Segment Earnings Before Income Taxes ($M)

Segment	Q3 2024	Q4 2024	Q4 2023
Human Nutrition & Health	$35.6	$33.8	$25.2
Animal Nutrition & Health	$3.5	$5.7	$5.3
Specialty Products	$10.5	$10.0	$8.6
Other & Unallocated	$(1.6)	$(2.0)	$(0.8)
Interest & Other	$(4.1)	$(3.0)	$(5.1)
Total EBT	$43.9	$44.5	$33.3

KPIs and Other Financials

KPI	Q3 2024	Q4 2024
Cash from Operations ($M)	$51.3	$52.3
Free Cash Flow ($M)	$42.2	$39.8
Net Interest Expense ($M)	$4.1	$2.8
Effective Tax Rate (%)	22.9%	24.5%
Cash Balance ($M)	$73.7	$49.5
Net Debt ($M)	$153.3	~$140
Net Debt Leverage (x)	0.6x	0.6x

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue/EBITDA	FY2025	None provided	Qualitative: Expect full-year top- and bottom-line growth in 2025	N/A
Effective Tax Rate	FY2025 modeling	~22%–23% (prior commentary)	Q4 foreign tax impact a one-off; maintain ~22%–23% modeling	Maintained
Dividend (Annual)	2025	$0.79/share	$0.87/share; +10.1% YoY	Raised
Segment Outlook	2025	None provided	HNH: continue strong; Specialty: growth; ANH: ruminant growth, monogastric flattish	Qualitative update

Note: Balchem does not provide formal quantitative revenue/EPS guidance; management commentary summarized above.

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2 & Q3 2024)	Current Period (Q4 2024)	Trend
HNH performance & mix	HNH grew on minerals/nutrients; record ops earnings (Q2); continued strong HNH & Specialty in Q3	HNH +6.8% YoY; growth across nutrients (~5% in Q4) and food ingredients (~7%); K2 and Encapsulates strong	Sustained strength; balanced growth across subsegments
ANH recovery (ruminant vs monogastric)	Q2 ANH down; Q3 sequential improvement, ruminant up, monogastric Europe pressured	Q4 ANH +0.3% YoY; momentum in ruminant; monogastric flattish until Europe normalizes	Gradual recovery led by ruminant
Tariffs/supply chain	Not emphasized in Q2 PR; Q3 neutral commentary on stable inputs	Monitoring tariffs; exposure modest; net-neutral to slightly favorable; limited China/Mexico sourcing/sales	Cautious but manageable
New products/brand marketing	Launched Optifolin+; K2VITAL DELTA Fermented; VitaCholine Pro-Flo (Q2/Q3)	Continued push incl. NFL Jets and Bayern Munich women partnerships; targeting multivitamins with Pro-Flo	Execution progressing; brand awareness rising
Margins & inputs	Gross margin expanded (35.5% Q2; 35.6% Q3) on mix and input deflation	36.0% Q4; deflation tailwinds plateauing; potential tariff-driven input risk	Elevated but watch input inflation
Sustainability	Not highlighted in Q2 PR	Ahead of 2030 GHG goal; −15% water withdrawal vs 2020 baseline	Positive progress
M&A pipeline	Monitoring; conservative balance sheet	Deal flow improving but not “hot”; active evaluation	Gradual pickup

Management Commentary

“We delivered record fourth quarter consolidated sales, adjusted EBITDA and adjusted net earnings, with year-over-year sales and earnings growth in all 3 of our reporting segments.” — Ted Harris, CEO .
“Adjusted EBITDA margin of 26.2%, up 200 bps from the prior year… consolidated net income… diluted EPS of $1.03 GAAP… $1.13 adjusted.” — Ted Harris .
“Gross margin percentage was 36% of sales, up 320 basis points… primarily due to a favorable portfolio mix.” — Martin Bengtsson, CFO .
“We believe the first half of 2024 was the low point for our Animal Nutrition business… good momentum exiting 2024… well positioned to deliver solid growth in 2025.” — Management on ANH .
“We… increased our annual dividend, taking the dividend from $0.79 to $0.87 per share, a 10% increase… 16th consecutive year of double-digit growth.” — Ted Harris .
“We feel… relatively well positioned relative to any tariffs… net neutral to slightly favorable… < $15M sourced from China; < $5M sales into China; similar Mexico; Canada ~3% of sales.” — Ted Harris .

Q&A Highlights

HNH subsegment growth drivers: Nutrients grew ~5% in Q4; food ingredients ~7%; K2 and Encapsulates were standouts; momentum in both subsegments into 2025 .
ANH trajectory: Three consecutive improving quarters; ruminant growth supported by healthier dairy economics and new AminoShure-XL; monogastric Europe flattish near term .
Tariff exposure: Limited sourcing/sales to China/Mexico; potential competitive benefit vs Chinese imports; overall net-neutral to slightly favorable; monitoring Canada exposure (~3% of sales) .
Margins outlook: Strong but deflation tailwind faded; portfolio mix supportive (HNH nutrients faster; ANH ruminant > monogastric); tariffs/input costs are the wildcards .
M&A: Deal flow improving; still early; active evaluations but not a hot market yet .

Estimates Context

Attempts to retrieve S&P Global consensus for Q4 2024 revenue and EPS were unsuccessful due to a system limit at query time; as a result, numeric consensus and explicit beat/miss determinations are unavailable for this report. Values retrieved from S&P Global could not be obtained at this time.
Given the lack of consensus data, investors should focus on the company’s YoY growth, mix-driven margin expansion, and sequential EBITDA dynamics until consensus checks are available .

Key Takeaways for Investors

Mix-driven margin expansion remains the narrative: Gross margin reached 36.0% (+320 bps YoY) and adjusted EBITDA margin remained >26%, supported by HNH and Specialty strength; watch for any input cost/tariff reversal in 2025 .
HNH continues to power growth: Broad-based performance across nutrients and food systems with product/brand catalysts (K2VITAL DELTA, Optifolin+, VitaCholine Pro-Flo; Jets/Bayern partnerships) sustaining momentum .
ANH inflecting: Ruminant-led recovery (healthy dairy economics, AminoShure-XL launch) offsets monogastric Europe pressures; management guiding to continued YoY ANH growth in 2025 .
Cash generation and de-leveraging provide optionality: $52.3M CFO and $39.8M FCF in Q4; leverage ~0.6x; supports dividend growth and future M&A when quality assets appear .
Dividend increases underpin shareholder returns: Annual dividend raised to $0.87 (+10%), 16th consecutive annual increase, signaling confidence in cash flow durability .
Watch list into 1H25: Tariff policy outcomes, input cost trajectory (deflation tailwind faded), and pace of ruminant demand vs monogastric stabilization will likely drive estimate revisions and stock reaction .
No formal guidance: Management expects 2025 top/bottom-line growth; effective tax rate modeled at ~22–23% (Q4 spike was a one-off), supporting EPS conversion .

BALCHEM CORP (BCPC)·Q4 2024 Earnings Summary