Slides
Page 1
Investor Presentation Q3 2025. 1
Page 2
Safe Harbor Statement 2 • During the course of this presentation, management may make forward-looking statements regarding financial performance and future events. • These forward-looking statements generally are identified by the words "believe," "project," "expect," "anticipate," "estimate," "forecast," "outlook," "intend," "strategy," "future," "opportunity," "plan," "may," "should," "will," "would," "will be," "will continue," "will likely result," or the negative thereof or variations thereon or similar expressions generally intended to identify forward-looking statements. You should understand that, even though our forward-looking statements are based on assumptions we believe are reasonable when made, they are still subject to uncertainties that could cause actual results to differ materially from those in the forward-looking statements. • Important factors and other risks that may affect the Company's business or that could cause actual results to differ materially are included in filings the Company makes with the U.S. Securities and Exchange Commission from time to time, including its Annual Report on Form 10-K, its Quarterly Reports on Form 10-Q, its Current Reports on Form 8-K, and in its other SEC filings. • Forward-looking statements made herein are summaries of previous public disclosures, do not represent revised guidance, and we do not undertake to revise or update them from the date or dates of previous disclosure. • In the case of any presentation delivered during the company’s prescribed black-out periods, there will be no discussion or questions addressed regarding the current quarter’s expected performance.
Page 3
Agenda Q3 2025 Key Takeaways Balchem Overview Vision and Strategic Focus Corporate Social Responsibility Wrap Up Appendix GAAP to Non-GAAP reconciliations 01 02 03 05 06 07 3 Financial Performance & Capital Allocation04
Page 4
4 Q3 Key Takeaways 1. Strong financial performance continued in Q3 with double digit sales and earnings growth 2. Strong cash flows supporting a healthy balance sheet 3. All three business segments delivering solid growth on the top and bottom lines 4. “Better for you” food and nutrition market trends strengthening growth within HNH and benefitting Balchem’s unique portfolio of specialty nutrients and functional solutions and systems 5. Tariff trade environment having a limited net impact on Balchem due to a diversified supply chain and manufacturing footprint, along with subsequent pricing actions Balchem continues to deliver strong growth +11.5% Q3 Sales vs. PY +11.0% Q3 Adj. EBITDA vs. PY 100% Q3 TTM* FCF conversion * TTM: Trailing Twelve Months
Page 5
Agenda Q3 2025 Key Takeaways Balchem Overview Vision and Strategic Focus Corporate Social Responsibility Wrap Up Appendix GAAP to Non-GAAP reconciliations 01 02 03 05 06 07 5 Financial Performance & Capital Allocation04
Page 6
BCPC Balchem Corporation At a Glance 1967 Founded in 6 2024 Adjusted EBITDA 2024 Adjusted EBITDA margin 26.3% $250 Million Approximate number of employees 1,400 $954 Million 2024 Sales NASDAQ
Page 7
7 Three Business Segments – 2024 Revenue Animal Nutrition & Health Specialty ProductsHuman Nutrition & Health Provides a range of branded specialty minerals, nutrients, and vitamins as well as microencapsulation technologies and food ingredient formulation systems for the supplement, beverage, cereal, meat, and bakery markets. Supplies science-based animal feed nutritional ingredients and proprietary microencapsulation technologies for production animal productivity and ruminant and companion animal wellness. Provides critical sterilization technologies to the medical device and food industries and supplies specialized chelated minerals to the micronutrient agricultural market. 63% 23% 14% Human Nutrition & Health Animal Nutrition & Health Specialty Products
Page 8
Balchem Corporation Balchem develops, manufactures, and markets specialty ingredients that help make the world a healthier place. 8 Corporate Headquarters: Montvale, NJ 22 Manufacturing Sites 8 Technology Centers 8 Regional Offices
Page 9
Executive Leadership Ted Harris Chairman, President, and CEO • Joined Balchem in May 2015 • Prior to Balchem was a Senior VP of Ashland Inc. where he held a series of senior leadership roles over 10+ years • Independent director on the Board of Directors of Pentair plc • MBA from Harvard University and bachelor’s degree from Lehigh University in chemical engineering Martin Bengtsson CFO • Joined Balchem in February 2019 • Prior to Balchem had a 15-year career at Honeywell and most recently was CFO for the $11B Performance Materials & Technologies segment • Bachelor’s degree from Northwestern University in economics and began career as Senior Auditor for Deloitte 9
Page 10
Value to our customers • High efficacy nutrients essential for life • Enhanced animal health and feed productivity • Functional ingredient systems formulations and applications expertise • Crop protection and yield improvement • Complete supply chain capabilities and assurance Value to society • Increased health and well-being of humans and animals • Enhanced food chain productivity to give a growing population sustainable access to food Technologies 10 Value Proposition
Page 11
Human Nutrition & Health Animal Nutrition & Health Specialty Products Segment Markets Served Solutions Human Nutrition & Health • Nutritional Supplements • Sport & Active Nutrition • Infant and Toddler Formula • Healthy Snacking • Functional Beverages • Food and Beverage • Microencapsulation • Choline and Vitamin K2 • Chelated Minerals • Functional Solutions and Systems Animal Nutrition & Health • Dairy • Poultry and Swine • Companion Animal • Aquaculture • Microencapsulation • Choline • Chelated Minerals • Amino Acids and Other Nutrients Specialty Products • Medical Device Sterilization • Nut and Spice Fumigation • Plant Nutrition • Choline • Chelated Minerals • Performance Gases re-packaging and supply chain capabilities 63% 23% 14% Segment Overview 11 Leveraging Solutions Across Segments 2024 Revenue by Segment
Page 12
Agenda Q3 2025 Key Takeaways Balchem Overview Vision and Strategic Focus Corporate Social Responsibility Wrap Up Appendix GAAP to Non-GAAP reconciliations 01 02 03 05 06 07 12 Financial Performance & Capital Allocation04
Page 13
Our Vision is clear – to make the world a healthier place. Our Mission is focused – to build a global nutrition and health company delivering trusted, innovative and science-based solutions to our customers. Our Core Values Always Doing the and Acting Small Collaborating and Growing Playing to Staying on the 13
Page 14
How Do We Make the World a Healthier Place? Provide food, beverage, and dietary supplement ingredients that support cognitive, emotional, and physical well- being across generations Improve nutrient bioavailability for animals, reducing feed inputs and land required to produce high quality animal protein Support prenatal, infant, and toddler health with targeted nutritional ingredients Help farmers grow crops that are hardier when faced with stressors like disease and pests Provide nutritious foods for companion animals Improve nutrient bioavailability to reduce animal waste excreted into the environment Power the day with plant & animal proteins, healthy fats, minerals, nutrients, and specialty nutraceuticals Create higher yields and higher quality crops with fewer inputs Decrease food waste from farm to table via natural technologies Provide products and services to medical device sterilizers 14
Page 15
Strategic Focus Strengthening Positions in Attractive, Growing Markets Building scale, adding adjacent capabilities, expanding market and geographic reach, broadening our portfolio of solutions, investing in new science, enabling market awareness Driving Organic Growth Creating new demand through innovation, market penetration, new product launches, geographic expansion, and expanding addressable markets Strategic M&A Augmenting organic growth and accelerating strategic initiatives 01 02 03 Excellence in Execution Maintaining a strong margin profile, efficient cash flow conversion, and a solid balance sheet 04 15
Page 16
Functional Solutions Delivering high protein, high fiber or clean label functional solutions for fast-growing “Better for You” food and beverage categories Micro- encapsulation Food safety and preservation M&A Accelerate our strategic priorities, adding adjacent products / technologies, and geographic reach Nutrient delivery systems for Dairy and Beef Rumen-bypass precision release technology for efficient nutrient delivery Mineral Nutrition High efficacy mineral nutrition for humans, animals, and plants Growth Platforms Multiple Platforms to Drive Growth Above Market Growth 16 Geographic Expansion Expansion into under- served geographies Performance Gases Health and safety Specialty Nutrients Science-backed portfolio of branded ingredients, such as VitaCholine®, K2Vital , Albion Minerals®, OptiMSM®
Page 17
Agenda Q3 2025 Key Takeaways Balchem Overview Vision and Strategic Focus Corporate Social Responsibility Wrap Up Appendix GAAP to Non-GAAP reconciliations 01 02 03 05 06 07 17 Financial Performance & Capital Allocation04
Page 18
239.9 267.6 3Q24 3Q25 64.4 71.4 3Q24 3Q25 36.9 44.0 3Q24 3Q25 1.13 1.35 3Q24 3Q25 Q3 2025 Financial Summary Double-digit sales and profit growth 18 Sales $M ↑ 11.5% Adj. EBITDA $M ↑ 11.0% Adj. Net Earnings $M ↑ 19.1% Adj. EPS $/share ↑ 19.5% Driven by higher operating income, lower interest expense, and a lower adjusted tax rate Driven by sales growth across the portfolio Earnings further accelerated by a reduction in diluted outstanding shares Strong growth in all three segments, HNH, ANH, and SP
Page 19
713.7 773.5 YTD24 YTD25 187.5 207.0 YTD24 YTD25 106.1 125.6 YTD24 YTD25 3.25 3.84 YTD24 YTD25 YTD 2025 Financial Summary Sales growth, margin expansion, and profit growth 19 Sales $M ↑ 8.4% Adj. EBITDA $M ↑ 10.4% Adj. Net Earnings $M ↑ 18.4% Adj. EPS $/share ↑ 18.2% Driven by higher operating income and lower interest expense Driven by sales growth and favorable portfolio mix Earnings growthStrong growth in all three segments, HNH, ANH, and SP
Page 20
Historical Financials 160 174 190 216 231 250 207 2019 2020 2021 2022 2023 2024 YTD 2025 644 704 799 942 922 954 774 2019 2020 2021 2022 2023 2024 YTD 2025 104 108 117 131 130 143 126 2019 2020 2021 2022 2023 2024 YTD 2025 3.19 3.32 3.57 4.03 4.00 4.37 3.84 2019 2020 2021 2022 2023 2024 YTD 2025 +8.2% CAGR +6.6% CAGR +9.4% CAGR Sales $M Adj. EBITDA $M Adj. Net Earnings $M Adj. EPS $/share 20 Consistent performance over the years +6.5% CAGR
Page 21
Capital Allocation Strategy Capital Allocation Priorities • Support organic growth opportunities • Augment growth with targeted M&A • Diligent debt service • Continue to pay and grow dividend • Stock buy-backs for anti-dilution M&A • Seven key acquisitions since 2016 to augment organic growth • Focus on nutrition and health • Adding geographic reach and adjacent products / technologies Annual Cash Flow and Net Debt Leverage Ratio 85 104 108 111 119 124 150 161 139 184 182 202 2.3 1.5 1.6 1.2 0.6 1.1 0.5 0.0 1.7 1.1 0.6 0.3 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Q3 2025 TTM* Cash Flow From Operations Net Debt divided by TTM* Adj. EBITDA 21 * TTM: Trailing Twelve Months
Page 22
Free Cash Flow Conversion 79% 105% 102% 102% 93% 109% 107% 69% 116% 103% 100% 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Q3 2025 TTM* Free Cash Flow as % of Non-GAAP Net Earnings 100% 22 Translating profits into cash * TTM: Trailing Twelve Months
Page 23
Key Acquisitions Augmenting Organic Growth with Targeted Acquisitions Close to Core Albion Minerals • Adjacent product offering in high growth market • Chelated Magnesium, Iron, Calcium, Zinc, etc. 2016 Chemogas • Geographic expansion of market leadership to Europe • Performance gas solutions Zumbro River Brand • Consolidation and portfolio extension • High protein extrusion and agglomeration 2019 Kappa Bioscience • Portfolio extension in high growth specialty vitamin market • Vitamin K2 and MK -7 Bergstrom Nutrition • Portfolio extension in high growth specialty mineral market • Specialty sulfur for supplements 2022 Bioscreen • Geographic expansion and processing technology • Microencapsulation and fermentation 2018 IFP • Market consolidation and processing technology • Microencapsulation and agglomeration 2017 23
Page 24
Dividends Consistent dividend policy 0.30 0.34 0.38 0.42 0.47 0.52 0.58 0.64 0.71 0.79 0.87 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 ($/share) +11.2% CAGR Annual double-digit dividend growth for the last decade Consistency in execution 24
Page 25
Agenda Q3 2025 Key Takeaways Balchem Overview Vision and Strategic Focus Corporate Social Responsibility Wrap Up Appendix GAAP to Non-GAAP reconciliations 01 02 03 05 06 07 25 Financial Performance & Capital Allocation04
Page 26
Sustainability Our Sustainability Objectives & Framework 1.2 Making the world a healthier place Company Provide innovative solutions for the health & nutritional needs of the world Culture Operate with excellence as strong stewards of our employees, customers, shareholders & communities People Planet Profit billion people reached in 2024 The total number of people impacted is calculated by measuring the annual consumption of protein and the daily recommended doses of minerals, essential nutrients and vitamins. 26
Page 27
7th sustainability report released in April 2025 4th anniversary of UN Global Compact commitment is marked Enhanced transparency reported to EcoVadis and CDP Scope 3 GHG emissions successfully measured and reported Surpassed our 2030 GHG emissions reduction goal, by reducing Scope 1 and 2 emissions by 32% Reduced our water withdrawal by 15% from baseline and remain on track to meet 2030 goal ~70% of our product revenue aligns with at least one UN SDG (SDGs 2, 3, and 12) Recent Sustainability Progress 27 Learn more about our sustainability programs:
Page 28
Agenda Q3 2025 Key Takeaways Balchem Overview Vision and Strategic Focus Corporate Social Responsibility Wrap Up Appendix GAAP to Non-GAAP reconciliations 01 02 03 05 06 07 28 Financial Performance & Capital Allocation04
Page 29
Leading positions in attractive markets Creating new demand through innovation Strong financial performance, delivering healthy margins and cash flows available for reinvestment Proven track record and well positioned for the future Balchem Summary A global nutrition and health company delivering trusted, innovative and science-based solutions to our customers 29
Page 30
Agenda Q3 2025 Key Takeaways Balchem Overview Vision and Strategic Focus Corporate Social Responsibility Wrap Up Appendix GAAP to Non-GAAP reconciliations 01 02 03 05 06 07 30 Financial Performance & Capital Allocation04
Page 31
Non-GAAP Financial Information In addition to disclosing financial results in accordance with United States (U.S.) generally accepted accounting principles (GAAP), this earnings release contains non-GAAP financial measures that we believe are helpful in understanding and comparing our past financial performance and our future results. The non-GAAP financial measures in this press release include adjusted gross margin, adjusted earnings from operations, adjusted net earnings and the related adjusted per diluted share amounts, EBITDA, adjusted EBITDA, adjusted income tax expense, and free cash flow. The non-GAAP financial measures disclosed by the company exclude certain business combination accounting adjustments and certain other items related to acquisitions, certain equity compensation, nonqualified deferred compensation plan expense (income), and certain one-time or unusual transactions. Detailed non-GAAP adjustments are described in the reconciliation tables below and also explained in the related footnotes. These non-GAAP financial measures should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP, and the financial results calculated in accordance with GAAP and reconciliations from these results should be carefully evaluated. Investors should not consider non-GAAP measures as alternatives to the related GAAP measures. 31
Page 32
Non-GAAP Financial Information 32 Reconciliation of Non-GAAP Measures to GAAP (Dollars in thousands, except per share data; unaudited) Three Months Nine Months Ended September 30, Ended September 30, Reconciliation of adjusted earnings from operations 2025 2024 2025 2024 GAAP earnings from operations $54,579 $47,992 $157,036 $135,465 Amortization of intangible assets and finance leases (1) 4,394 3,854 12,819 15,559 Transaction and integration costs (2) 333 223 1,227 704 Restructuring costs (3) 0 521 (192) 521 Impairment charge (4) 0 255 0 255 Nonqualified deferred compensation plan expense (5) 404 406 839 922 Adjusted earnings from operations $59,710 $53,251 $171,729 $153,426 Reconciliation of adjusted net earnings 2025 2024 2025 2024 GAAP net earnings $40,289 $33,837 $115,620 $94,892 Amortization of intangible assets and finance leases (1) 4,467 3,926 13,035 15,775 Transaction and integration costs (2) 333 223 1,227 704 Restructuring costs (3) 0 521 (192) 521 Impairment charge (4) 0 255 0 255 Income tax adjustment (6) (1,107) (1,834) (4,130) (6,058) Adjusted net earnings $43,982 $36,928 $125,560 $106,089 Adjusted net earnings per common share - diluted $1.35 $1.13 $3.84 $3.25
Page 33
Non-GAAP Financial Information 33 Reconciliation of GAAP Net Earnings to EBITDA and to Adjusted EBITDA (Dollars in thousands; unaudited) Three Months Nine Months Ended September 30, Ended September 30, 2025 2024 2025 2024 Net earnings – as reported $40,289 $33,837 $115,620 $94,892 Add back: Provision for income taxes 11,755 10,056 33,375 27,077 Interest and other expenses 2,535 4,099 8,041 13,496 Depreciation and amortization 11,481 10,831 33,753 36,861 EBITDA 66,060 58,823 190,789 172,326 Add back: Non-cash compensation expense related to equity awards 4,650 4,151 14,298 12,787 Transaction and integration costs (2) 333 223 1,227 704 Restructuring costs (3) 0 521 (192) 521 Impairment charge (4) 0 255 0 255 Nonqualified deferred compensation plan expense (5) 404 406 839 922 Adjusted EBITDA $71,447 $64,379 $206,961 $187,515
Page 34
Non-GAAP Financial Information 34 Reconciliation of GAAP Effective Income Tax Rate to Non-GAAP Effective Income Tax Rate (Dollars in thousands; unaudited) Three Months Nine Months Ended September 30, Ended September 30, 2025 2024 2025 2024 GAAP Income Tax Expense $11,755 $10,056 $33,375 $27,077 GAAP Effective Tax Rate 22.6% 22.9% 22.4% 22.2% Impact of ASU 2016-09 (7) 21 625 894 1,952 Adjusted Income Tax Expense $11,776 $10,681 $34,269 $29,029 Adjusted Effective Tax Rate 22.6% 24.3% 23.0% 23.8% Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow (Dollars in thousands; unaudited) Three Months Nine Months Ended September 30, Ended September 30, 2025 2024 2025 2024 Net cash provided by operating activities $65,572 $51,302 $149,281 $129,682 Capital expenditures and proceeds from the sale of assets (14,891) (9,065) (26,866) (22,240) Free Cash Flow $50,681 $42,237 $122,415 $107,442
Page 35
Non-GAAP Financial Information (1) Amortization of intangible assets and finance leases: Amortization of intangible assets and finance leases consists of amortization of customer relationships, trademarks and trade names, developed technology, regulatory registration costs, patents and trade secrets, capitalized loan issuance costs, other intangibles acquired primarily in connection with business combinations, and finance leases. We record expense relating to the amortization of these intangibles and finance leases in our GAAP financial statements. Amortization expenses for our intangible assets and finance leases are inconsistent in amount and are significantly impacted by the timing and valuation of an acquisition. Consequently, our non-GAAP adjustments exclude these expenses to facilitate an evaluation of our current operating performance and comparisons to our past operating performance. (2) Transaction and integration costs: Transaction and integration costs related to acquisitions and divestitures are expensed in our GAAP financial statements. Management excludes these items for the purposes of calculating Adjusted EBITDA and other non-GAAP financial measures. We believe that excluding these items from our non-GAAP financial measures is useful to investors because these are items associated with transactions that are inconsistent in amount and frequency causing comparison of current and historical financial results to be difficult. (3) Restructuring costs: Restructuring costs related to a reorganization of the business are recorded in our GAAP financial statements. Management excludes these items for the purposes of calculating Adjusted EBITDA and other non-GAAP financial measures. We believe that excluding these items from our non-GAAP financial measures is useful to investors because these are items associated with transactions that are inconsistent in amount and frequency causing comparison of current and historical financial results to be difficult. (4) Impairment charge: An asset impairment charge in 2024 was related to the write off of an equity method investment. The impairment charge is included in our GAAP financial statements. Management excludes this item for the purposes of calculating Adjusted EBITDA and other non-GAAP financial measures. We believe that excluding this item from our non-GAAP financial measures is useful to investors because it is inconsistent in amount of frequency causing comparison of current and historical financial results to be difficult. (5) Nonqualified deferred compensation plan (income) expense: Gains and losses on rabbi trust assets related to our nonqualified deferred compensation plan are recorded in other (income) expense while the offsetting increases or decreases to the deferred compensation liability are recorded within earnings from operations. The increases and decreases in the deferred compensation liability are driven by market volatility and are not a true reflection of company performance. We believe excluding these amounts from our non-GAAP financial measures is useful to investors because these items are inconsistent in amount based on market conditions causing comparison of current and historical financial results to be difficult. (6) Income tax adjustment: For purposes of calculating adjusted net earnings and adjusted diluted earnings per share, we adjust the provision for (benefit from) income taxes to tax effect the taxable and deductible non-GAAP adjustments described above as they have a significant impact on our income tax (benefit) provision. Additionally, the income tax adjustment is adjusted for the impact of adopting ASU 2016-09, “Improvements to Employee Share-Based Payment Accounting” and uses our non-GAAP effective rate applied to both our GAAP earnings before income tax expense and non-GAAP adjustments described above. See Table for the calculation of our non-GAAP effective tax rate. (7) Impact of ASU 2016-09: The primary impact of ASU No. 2016-09, "Improvements to Employee Share-Based Payment Accounting" ("ASU 2016-09"), was the recognition during the three and nine months ended September 30, 2025 and 2024, of excess tax benefits as a reduction to the provision for income taxes and the classification of these excess tax benefits in operating activities in the consolidated statement of cash flows instead of financing activities. Management excludes this item for the purpose of calculating Adjusted Income Tax Expense. We believe that excluding the item in our non-GAAP financial measures is useful to investors because it is inconsistent in amount and frequency causing comparison of current and historical financial results to be difficult. 35
Page 36
36