BALCHEM CORPORATION Presentation May 2015.… · A technology-driven, food and beverage ... flavor...
Transcript of BALCHEM CORPORATION Presentation May 2015.… · A technology-driven, food and beverage ... flavor...
September 2014
BALCHEM CORPORATIONMay 2015
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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
Manufacturing Sites:
Slate Hill, NY
Green Pond, SC
Verona, MO
Salt Lake City, UT
St. Gabriel, LA
Covington, VA
Marano Ticino, Italy
Approximately 845 Employees
Bridgeton, MO
Defiance, OH
Reading, PA
Marshfield, WI
Lincoln, NE
Sleepy Eye, MN
BALCHEM CORPORATION
760
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North America Rest of World
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BALCHEM AT A GLANCE
Food, Pharma & NutritionA technology-driven, food and beverage
solutions company developing complete
systems, including ingredients, flavor
bases and microencapsulation to control,
mask, fortify, protect and deliver
technologies, into finished products.
Animal Nutrition & HealthCholine, Microencapsulation,
Chelation – delivering optimal
Animal Nutrition and Health.
Medical Devices
ARC Specialty ProductsProviding sterilization of medical
Devices, pasteurization &
Fumigation of nuts & spices.
Industrial ProductsIndustrial Choline Chloride –
Biodegradable, Environmentally
Responsible, Reduced or Chloride
Free.
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BALCHEM TODAY
REVENUE $ 541.4
EBITDA $ 112.2
NET EARNINGS PER SHARE $ 1.69
EBITDA PER SHARE $ 3.60
2014 Results
(Dollars in millions, except per share data)
NET EARNINGS $ 52.8
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BALCHEM TODAY
REVENUE $ 144.9
ADJUSTED EBITDA $ 36.1
NET EARNINGS PER SHARE $ 0.48
EBITDA PER SHARE $ 1.15
2015 YTD Results
(Dollars in millions, except per share data)
NET EARNINGS $ 15.2
Animal Nutrition and
Health30%
Industrial Products
14%ARC Specialty Products
9%
SensoryEffects47%
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2015 1st Qtr.
Net Revenue
$145
Net Revenue (dollars in millions)
$0
$100
$200
$300
$400
$500
$600
2011 2012 2013 2014 2015
$292 $310 $337
$541
$145
BALCHEM CORPORATION
1 Reflects certain one time pre-tax charges of $5.4 million relating to the May 2014 acquisition of SensoryEffects
$0
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2011 2012 2013 2014 2015
$39 $40
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2011 2012 2013 2014 2015
$1.28 $1.32
$0.48
$1.45$1.691$531
Net Earnings Fully Diluted Earnings Per Common Share
HISTORICAL CONSOLIDATED RESULTS (Dollars in millions, except per share data)
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SENSORYEFFECTS
Growth Platforms Products Strategy
SENSORYEFFECTS
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HIGHLIGHTS
($ in MM’s) 2013 2014 2015 YTD
Sales $48 $206 $68
Op. Income $11 $ 21 $ 8
• SensoryEffects acquired May 7, 2014
SensoryEffects (Acquisition)($54.5 MM YTD; 80% of segment)
Powders Flavors Cereal
Nutritional Ingredients($5.8 MM YTD 9% of segment)
CholineNutrients
Vitashure Nutrients
$11.1 $11.3 $11.2
$21.3
$7.7
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$5
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2011 2012 2013 2014 2015 YTD
$43 $44 $48
$206
$68
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2011 2012 2013 2014 2015 YTD
Revenue Operating Income
($ in millions) ($ in millions)
Protected Food Ingredients($7.5 MM YTD; 11% of segment)
Confecshure Meatshure Bakeshure
SENSORYEFFECTS DIVISION PLATFORMS (2011-2013 is PRE-ACQUISITION)
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Chocolate systems
Juice and other drink bases
Ice cream bases and variegates
Low-Melt Point Inclusions
Specialty non-dairy and dairy creamers
Whipped toppings
Nutritional beverage bases
Specialty powders including baby formula and medical food
Dough's & Batters
Shelf-Stable Breads
Bakery Mixes
Tortillas
Cookies
Cakes
Customized wet- and dry-based flavor systems.
Encapsulates improve the texture, taste, economics and shelf life of food products via controlled released technology.
SENSORYEFFECTS INGREDIENT SOLUTIONS
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Specialty spray-dried emulsified powders and formulated dry-blended systems.
FLAVOR SYSTEMS POWDER SYSTEMS ENCAPSULATES
& INCLUSIONS
Ready-to-eat cereals
Baby cereal food
Cereal snacks
Cereal ingredients
Customized manufacturing of cereal
based systems.
SENSORYEFFECTS
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Development and manufacturing
Infant and Toddler formulas.
Custom blends
Nutritional bases
Fortified Nutritional bases
All-in wet mixes
SPECIALTY BEVERAGE CEREAL SYSTEMS INFANT & TODDLER
NUTRITIONSpecialty Beverage delivers the
formulation of applications for
single serve consumer convenience
technologies including dry blends,
spray drying and agglomeration.
Innovation for convenience
Evolution of Single Serve:- Consumer choice flavor- Functionality
NUTRIENT APPLICATIONS
Choline: a nutrient for general well-being, with importance in:
Prenatal development
Lifelong cognitive function
Metabolism, liver and cardiovascular function
Support of active, athletic lifestyles
Included in a variety of supplement forms, including tablets, capsules and chewables
Easy to formulate into foods and beverages
Recipient of nutrient health claims in multiple markets worldwide
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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 an RDI for choline and its voluntary inclusion on the Nutrition Facts panel, an important first
• If adopted in the Final Rule (extremely likely), the full compliance date is 1/1/18
• Expect early adopters
• March 2015: USDA Dietary Guidelines for Americans committee notes choline as a shortfall nutrient
• Industry and association comments support its further consideration, urge mitigation of the intake gap
CHOLINE – “RDI” Pending
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proposed new label
ANIMAL NUTRITION & HEALTH
Growth Products Highlights
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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.
NUTRITIONAL PRODUCTS
ANIMAL NUTRITION AND HEALTH
HIGHLIGHTS
($ in millions)2013 2014 2015 YTD
Sales $156 $176 $43
Op. Income $18 $24 $9
• #1 supplier globally of choline chloride.
• Multi-Plant Operational Benchmarking & Logistics.
• Focused R&D, novel product introduction/ commercialization has increased market penetration in ruminants.
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Protected Ingredients(Shure™ Technology) ($60 MM; 34% of ANH)
RuminantHealth
RuminantProtein
ChelatedMinerals
Base Ingredients($116 MM; 66% of ANH)
CholineFeed
2014 Revenue - $176 million
ANH HEALTH PLATFORMS
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$14.8 $16.1$18.2
$23.7
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2011 2012 2013 2014 2015YTD
$142 $148 $156$176
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2011 2012 2013 2014 2015YTD
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REVENUE OPERATING INCOME
ANIMAL NUTRITION & HEALTH
ARC SPECIALTY PRODUCTS
Growth Products Market
ARC SPECIALTY PRODUCTS
HIGHLIGHTS
($ in MM’s)2013 2014 2015 YTD
Sales $51 $54 $13.6
Op. Income $20 $21 $5.7
• 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-time delivery.
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$18.6$20.3 $20.2 $21.3
$5.7
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2011 2012 2013 2014 2015 YTD
$48$50 $51
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2011 2012 2013 2014 2015 YTD
REVENUE OPERATING INCOME
($ in millions) ($ in millions)
42% of
Sales
ARC SPECIALTY PRODUCTS
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Overall medical device market continues to
grow with aging demographics
Ethylene Oxide utilization has historically
increased 3%-4% per year
ARC repackages hazardous chemicals safely
and responsibly, from bulk tanks to aerosol
size cans
Ethylene Oxide 57%
Radiation 40%
Steam 2%
Other 1%
Sterilization by Method
MEDICAL DEVICE MARKET
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INDUSTRIAL PRODUCTS
Growth Products Joint Venture
Industrial Products
HIGHLIGHTS
($ in millions)2013 2014 2015 YTD
Sales $83 $105 $21
Op. Income $16 $17 $3
• Choline chloride and derivatives of choline chloride for numerous industrial applications.
• Multi-Plant Operational Benchmarking & Logistics.
• Focused R&D, novel product introduction/ commercialization has increased market penetration.
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Products
• Methylamines
• Metam Sodium
• Choline and choline
derivatives
for oil and gas
applications
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$11.7 $12.0$15.9 $16.5
$3.1
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2011 2012 2013 2014 2015YTD
$59$69
$83
$105
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2011 2012 2013 2014 2015YTD
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REVENUE OPERATING INCOME
Industrial Products
LOOKING AHEAD
Future GrowthLooking Ahead Recognition
Nov. 1996 Forbes 200 Best Small Companies #193
Nov. 1997 Forbes 200 Best Small Companies #116
Oct. 2001 Forbes 200 Best Small Companies #128
Jun. 2003 Business Week 100 Hot Growth Companies #16
Sep. 2003 Fortune Small Business 100 Fastest Growing Companies #86
Jul. 2004 Fortune Small Business 100 Fastest Growing Companies #44
Jul. 2005 Fortune Small Business 100 Fastest Growing Companies #62
Jul. 2005 Balchem named to Russell 3000 and Russell 2000
Oct. 2005 Forbes 200 Best Small Companies #72
Oct. 2006 Forbes 200 Best Small Companies #116
Jun. 2007 Business Week 100 Hot Growth Companies #80
Jul. 2007 Fortune Small Business 100 Fastest Growing Companies #95
Oct. 2007 Forbes 200 Best Small Companies #51
Jun 2008 Balchem named to S&P 600
July 2008 Fortune Small Business 100 Fastest
Growing Companies #60
Oct. 2008 Forbes 200 Best Small Companies #31
July 2009 Fortune Small Business 100 Fastest
Growing Companies #62
Oct. 2009 Forbes 200 Best Small Companies #64
Oct. 2010 Forbes 200 Best Small Companies #24
Oct. 2011 Forbes 200 Best Small Companies #29
Oct. 2012 Forbes 200 Best Small Companies #71
Oct. 2013 Forbes 200 Best Small Companies #82
Oct. 2014 Forbes 200 Best Small Companies #83
PUBLIC RECOGNITION
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• 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
emerging technologies
• Strong balance sheet
FUTURE
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September 2014