Released on October 27, 2023, Balchem Corp (BCPC, Financial) reported its third quarter net sales of $229.9 million for 2023, a decrease of $14.3 million or 5.9% compared to the prior year. Despite the decrease in net sales, the company's GAAP net earnings increased by 15.2% from the prior year, standing at $29.1 million. Adjusted net earnings were $33.8 million, a 4.3% increase from the prior year. The company also reported a record quarterly adjusted EBITDA of $59.9 million, an 11.4% increase from the prior year.
Financial Highlights
The company's effective tax rate of 20.3% was 151 basis points higher than the prior year tax rate of 18.8%. Cash flows from operations were $46.5 million for the third quarter of 2023, with quarterly free cash flow of $38.2 million. The company made net repayments on its revolving debt of $25.0 million, bringing its net debt to $303.6 million, with an overall leverage ratio on a net debt basis of 1.3 times.
Company Performance and Outlook
Ted Harris, Chairman, President, and CEO of Balchem, expressed satisfaction with the company's third quarter performance, attributing the record Adjusted EBITDA to improved mix, manufacturing efficiencies, and easing inflationary pressures. Despite the volatile economic outlook and market demand, Harris believes that Balchem is well positioned to benefit as the market recovers more broadly.
Financial Tables Summary
The company's gross margin of $76.5 million increased by 11.9% compared to $68.4 million for the prior year comparable period. Gross margin as a percentage of sales was 33.3% as compared to 28.0% in the prior year period, an increase of 530 basis points. Operating expenses of $32.9 million for the quarter decreased $1.9 million from the prior year comparable quarter. Interest expense was $6.6 million and $3.6 million in the third quarters of 2023 and 2022, respectively.
Conference Call Details
A quarterly conference call will be held on Friday, October 27, 2023, at 11:00 AM Eastern Time (ET) to review third quarter 2023 results. Ted Harris, Chairman, President and CEO and Martin Bengtsson, CFO will host the call.
Explore the complete 8-K earnings release (here) from Balchem Corp for further details.
