Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2018 | Jul. 27, 2018 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | BALCHEM CORP | |
Entity Central Index Key | 9,326 | |
Current Fiscal Year End Date | --12-31 | |
Entity Well-known Seasoned Issuer | Yes | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 32,211,486 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q2 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2018 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (unaudited) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 62,476 | $ 40,416 |
Accounts receivable, net of allowance for doubtful accounts of $507 and $431 at June 30, 2018 and December 31, 2017, respectively | 98,595 | 91,226 |
Inventories | 70,071 | 60,696 |
Prepaid expenses | 4,923 | 4,774 |
Prepaid income taxes | 2,600 | 0 |
Assets held for sale | 237 | 0 |
Other current assets | 2,235 | 2,224 |
Total current assets | 241,137 | 199,336 |
Property, plant and equipment, net | 184,767 | 189,793 |
Goodwill | 441,554 | 441,361 |
Intangible assets with finite lives, net | 115,873 | 128,073 |
Other assets | 6,136 | 5,073 |
Total assets | 989,467 | 963,636 |
Current liabilities: | ||
Trade accounts payable | 30,079 | 28,451 |
Accrued expenses | 21,206 | 22,930 |
Accrued compensation and other benefits | 9,308 | 8,531 |
Dividends payable | 39 | 13,484 |
Current portion of long-term debt | 0 | 35,000 |
Total current liabilities | 60,632 | 108,396 |
Revolving loan | 210,750 | 0 |
Long-term debt | 0 | 183,964 |
Deferred income taxes | 48,547 | 48,548 |
Other long-term obligations | 6,318 | 5,847 |
Total liabilities | 326,247 | 346,755 |
Commitments and contingencies (note 16) | ||
Stockholders' equity: | ||
Preferred stock, $25 par value. Authorized 2,000,000 shares; none issued and outstanding | 0 | 0 |
Common stock, $.0667 par value. Authorized 120,000,000 shares; 32,213,094 shares issued and 32,208,686 outstanding at June 30, 2018 and 32,019,605 shares issued and outstanding at December 31, 2017 | 2,148 | 2,135 |
Additional paid-in capital | 161,005 | 151,749 |
Retained earnings | 503,665 | 464,639 |
Accumulated other comprehensive loss | (3,161) | (1,642) |
Treasury stock, at cost: 4,408 and 0 shares at June 30, 2018 and December 31, 2017, respectively | (437) | 0 |
Total stockholders' equity | 663,220 | 616,881 |
Total liabilities and stockholders' equity | $ 989,467 | $ 963,636 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (unaudited) (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Current assets: | ||
Accounts receivable, allowance for doubtful accounts | $ 507 | $ 431 |
Stockholders' equity: | ||
Preferred stock, par value (in dollars per share) | $ 25 | $ 25 |
Preferred stock, shares authorized (in shares) | 2,000,000 | 2,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.0667 | $ 0.0667 |
Common stock, shares authorized (in shares) | 120,000,000 | 120,000,000 |
Common stock, shares issued (in shares) | 32,213,094 | 32,019,605 |
Common stock, shares outstanding (in shares) | 32,208,686 | 32,019,605 |
Treasury stock, shares (in shares) | 4,408 | 0 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Earnings (unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Condensed Consolidated Statements of Earnings (unaudited) [Abstract] | ||||
Net sales | $ 163,687 | $ 147,082 | $ 325,097 | $ 284,810 |
Cost of sales | 110,221 | 100,321 | 220,172 | 193,620 |
Gross margin | 53,466 | 46,761 | 104,925 | 91,190 |
Operating expenses: | ||||
Selling expenses | 14,495 | 13,569 | 28,554 | 27,281 |
Research and development expenses | 3,230 | 2,280 | 5,799 | 4,095 |
General and administrative expenses | 8,122 | 6,081 | 15,541 | 12,280 |
Total operating expenses | 25,847 | 21,930 | 49,894 | 43,656 |
Earnings from operations | 27,619 | 24,831 | 55,031 | 47,534 |
Other expenses (income): | ||||
Interest income | (3) | (2) | (5) | (3) |
Interest expense | 2,268 | 1,891 | 4,144 | 3,690 |
Other, net | 293 | 382 | 654 | 578 |
Earnings before income tax expense | 25,061 | 22,560 | 50,238 | 43,269 |
Income tax expense | 5,382 | 6,024 | 11,213 | 11,216 |
Net earnings | $ 19,679 | $ 16,536 | $ 39,025 | $ 32,053 |
Net earnings per common share - basic (in dollars per share) | $ 0.61 | $ 0.52 | $ 1.22 | $ 1.01 |
Net earnings per common share - diluted (in dollars per share) | $ 0.61 | $ 0.51 | $ 1.21 | $ 1 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Comprehensive Income (unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Condensed Consolidated Statements of Comprehensive Income (unaudited) [Abstract] | ||||
Net earnings | $ 19,679 | $ 16,536 | $ 39,025 | $ 32,053 |
Other comprehensive income, net of tax: | ||||
Net foreign currency translation adjustment | (2,911) | 2,697 | (1,548) | 3,238 |
Net change in postretirement benefit plans, net of taxes of $(0) and $(4) for the three months ended June 30, 2018 and 2017, and $(4) and $(9) for the six months ended June 30, 2018 and 2017. | 16 | 11 | 29 | 21 |
Other comprehensive (loss)/income | (2,895) | 2,708 | (1,519) | 3,259 |
Comprehensive income | $ 16,784 | $ 19,244 | $ 37,506 | $ 35,312 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Comprehensive Income (unaudited) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Other comprehensive income, net of tax: | ||||
Net change in postretirement benefit plan, taxes | $ 0 | $ (4) | $ (4) | $ (9) |
Condensed Consolidated Stateme7
Condensed Consolidated Statements of Cash Flows (unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Cash flows from operating activities: | ||
Net earnings | $ 39,025 | $ 32,053 |
Adjustments to reconcile net earnings to net cash provided by operating activities: | ||
Depreciation and amortization | 22,426 | 22,083 |
Stock compensation expense | 3,459 | 2,885 |
Deferred income taxes | (179) | (11) |
Provision for doubtful accounts | (50) | 170 |
Foreign currency transaction (gain)/loss | (137) | 218 |
Asset impairment charge | 979 | 0 |
(Gain)/loss on disposal of assets | (551) | 188 |
Changes in assets and liabilities | ||
Accounts receivable | (7,560) | 1,917 |
Inventories | (9,565) | (1,990) |
Prepaid expenses and other current assets | (724) | (1,732) |
Accounts payable and accrued expenses | 754 | (7,575) |
Income taxes | (1,958) | (2,628) |
Other | 777 | 114 |
Net cash provided by operating activities | 46,696 | 45,692 |
Cash flows from investing activities: | ||
Cash paid for acquisitions, net of cash acquired | 0 | (16,759) |
Capital expenditures | (7,700) | (10,819) |
Proceeds from insurance | 1,590 | 2,000 |
Proceeds from sale of assets | 576 | 0 |
Intangible assets acquired | (296) | (330) |
Net cash used in investing activities | (5,830) | (25,908) |
Cash flows from financing activities: | ||
Proceeds from revolving loan | 210,750 | 22,000 |
Principal payments on revolving loan | 0 | (9,500) |
Principal payments on long-term debt | (219,500) | (17,500) |
Principal payment on acquired debt | 0 | (2,384) |
Cash paid for financing costs | (1,123) | 0 |
Proceeds from stock options exercised | 6,578 | 4,893 |
Dividends paid | (13,428) | (12,069) |
Purchase of treasury stock | (1,223) | (1,741) |
Net cash used in financing activities | (17,946) | (16,301) |
Effect of exchange rate changes on cash | (860) | 1,473 |
Increase in cash and cash equivalents | 22,060 | 4,956 |
Cash and cash equivalents beginning of period | 40,416 | 38,643 |
Cash and cash equivalents end of period | $ 62,476 | $ 43,599 |
CONDENSED CONSOLIDATED FINANCIA
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS | 6 Months Ended |
Jun. 30, 2018 | |
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS [Abstract] | |
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS | NOTE 1 – CONDENSED CONSOLIDATED FINANCIAL STATEMENTS The condensed consolidated financial statements presented herein have been prepared by the Company in accordance with the accounting policies described in its December 31, 2017 consolidated financial statements, and should be read in conjunction with the consolidated financial statements and notes, which appear in the Annual Report on Form 10-K for the year ended December 31, 2017. References in this report to the “Company” mean either Balchem Corporation or Balchem Corporation and its subsidiaries, including SensoryEffects, Inc., SensoryEffects Cereal Systems, Inc., Albion Laboratories, Inc. (formerly known as Albion International, Inc.), BCP Ingredients, Inc., Aberco, Inc., Balchem BV, Balchem Italia Srl, Innovative Food Processors, Inc., and Balchem LTD, on a consolidated basis, as the context requires. In the opinion of management, the unaudited condensed consolidated financial statements furnished in this Form 10-Q include all adjustments necessary for a fair presentation of the financial position, results of operations and cash flows for the interim periods presented. All such adjustments are of a normal recurring nature. The condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP” or “GAAP”) Recent Accounting Pronouncements Recently Issued Accounting Standards In February 2016, the FASB issued ASU No. 2016-02, “Leases” (“ASU 2016-02”), which addresses the recognition of assets and liabilities that arise from all leases. The guidance requires lessees to recognize right-to-use assets and lease liabilities for most leases in the Consolidated Balance Sheets. The guidance is effective for annual and interim periods beginning after December 15, 2018 and early adoption is permitted. The Company is currently evaluating the impact of the new guidance. In January 2017, the FASB issued ASU No. 2017-04, “Simplifying the Test for Goodwill Impairment” (“ASU 2017-04”), which addresses changes to the testing for goodwill impairment by eliminating Step 2 of the process. The guidance is effective for annual and interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Early adoption is permitted, however the Company has elected not to adopt early as this ASU will not have a significant impact on the Company’s consolidated financial statements. Recently Adopted Accounting Standards In May 2014, the FASB issued a comprehensive new revenue recognition standard that superseded existing revenue recognition guidance under U.S. GAAP. The core principle of the new guidance is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The standard creates a five step model that requires companies to exercise judgment when considering the terms of a contract and all relevant facts and circumstances. The standard allows for several transition methods: (a) a full retrospective adoption in which the standard is applied to all of the periods presented, or (b) a modified retrospective adoption in which the standard is applied only to the most current period presented in the financial statements with a cumulative-effect adjustment reflected in retained earnings. The standard also requires expanded disclosures regarding the qualitative and quantitative information of an entity's nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. This new revenue recognition standard is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. We performed a detailed review of our contract portfolio representative of our different businesses and compared historical accounting policies and practices to the new standard. Because the standard impacts our business processes, systems and controls, we also developed a comprehensive change management project plan to guide the implementation. Over the course of 2017, we conducted training sessions for those in our global organization that are impacted by the new standard. Our primary business is the sale of products, and the adoption of the new revenue recognition standard did not have a material impact on our financial statements. We adopted the new standard effective January 1, 2018 utilizing the modified retrospective method. The cumulative-effect adjustment to retained earnings upon adoption was not material. In January 2017, the FASB issued ASU No. 2017-01, “Clarifying the Definition of a Business” (“ASU 2017-01”), which addresses the definition of what constitutes a business by providing clarification of the three elements that constitute a business. The guidance is effective for annual and interim periods beginning after December 15, 2017. The Company adopted ASU 2017-01 on January 1, 2018 prospectively (prior periods have not been restated). There was no significant impact on the Company’s consolidated financial statements. In October 2016, the FASB issued ASU 2016-16, "Intra-Entity Transfers of Assets Other Than Inventory" ("ASU 2016-16"). The standard requires that an entity recognize the income tax consequences of an intra-entity transfer of an asset when the transfer occurs as opposed to when the asset is transferred to an outside party as required under current U.S. GAAP. The standard does not apply to intra-entity transfers of inventory, which will continue to follow current U.S. GAAP. The guidance is effective for annual and interim periods beginning after December 15, 2007. The Company adopted ASU 2016-16 on January 1, 2018 utilizing the modified retrospective method. There was no impact on the Company's consolidated financial statements. In March 2018, the FASB issued ASU No. 2018-05, “Amendments to SEC Paragraph Pursuant to SEC Staff Accounting Bulletin No. 118” (“ASU 2018-05”), which clarifies the income tax accounting implications of the Tax Cuts and Jobs Act. The guidance is effective immediately. The Company is currently assessing the impact of the standard on the consolidated financial statements. |
ACQUISITIONS
ACQUISITIONS | 6 Months Ended |
Jun. 30, 2018 | |
ACQUISITIONS [Abstract] | |
ACQUISITIONS | NOTE 2—ACQUISITIONS Acquisition of Chol-Mix Kft On March 24, 2017, the Company, through its European subsidiary Balchem Italia SRL, entered into an agreement to purchase certain assets of Chol-Mix Kft (“Chol-Mix), a privately held manufacturer of dry choline chloride, with knowledge and technical know-how supporting the application of liquids on carriers, located in Hungary, for a purchase price of €1,500. As of June 30, 2018, approximately €1,150, translated to approximately $1,230, has been paid to Chol-Mix Kft with the remaining balance of approximately €350, translated to approximately $409, due at the end of a related manufacturing agreement. The acquisition of Chol-Mix’s assets provides our Animal Nutrition & Health segment with additional dry choline chloride capacity in Europe, geographical expansion opportunities in Eastern Europe, and technical knowledge supporting the application of liquids on carriers. Management has completed its accounting for the acquisition. As a result, the fair values of the assets acquired have been determined and goodwill of $404 has been recorded. Acquisition of Innovative Food Processors, Inc. On June 1, 2017, the Company acquired 100 percent of the outstanding common shares of Innovative Food Processors, Inc. (“IFP”), a privately held manufacturer of agglomerated and microencapsulated food and nutrition ingredients, headquartered in Faribault, Minnesota. The Company made payments of approximately $22,975 on the acquisition date and $635 in September 2017 to true-up working capital, amounting to approximately $16,161 to the former shareholders, adjustments for working capital acquired of $5,065, and $2,384 to IFP’s lenders to pay off all IFP bank debt. The acquisition of IFP expands the Company’s Human Nutrition & Health segment’s processing technology and market reach, while bringing innovative and value-added systems to food, beverage, and nutrition customers. Management has completed its accounting for the acquisition. As a result, the fair values of the assets acquired and liabilities assumed have been determined and $1,340 of goodwill has been recorded. The following table summarizes the fair values of the assets acquired and liabilities assumed. Cash and cash equivalents $ 5,065 Accounts receivable 2,860 Inventories 2,537 Prepaid expenses 186 Property, plant and equipment 12,219 Customer relationships 2,942 Developed technology 1,078 Trademark & trade name 1,388 Covenant not to compete 126 Goodwill 1,340 Trade accounts payable (844 ) Accrued expenses (1,416 ) Bank debt (2,384 ) Deferred income taxes (3,871 ) Amount paid to shareholders 21,226 IFP bank debt paid on purchase date 2,384 Total amount paid $ 23,610 The goodwill of $1,340 arising from the IFP Acquisition consists largely of expected synergies, including the combined entities’ experience and technical problem-solving capabilities, and acquired workforce. The goodwill is assigned to the Human Nutrition & Health segment, and is not tax deductible for income tax purposes. The valuation of the fair value of tangible and intangible assets acquired and liabilities assumed are based on management’s estimates and assumptions. In preparing our fair value of the intangible assets and certain tangible assets acquired, management, among other things, consulted an independent advisor. Customer relationships are amortized over a 10-year period utilizing an accelerated method based on the estimated average customer attrition rate. Trademark, trade name, covenant not to compete, and developed technology are amortized over 10 years, 5 years, 3 years, and 5 years, respectively, utilizing the straight-line method as the consumption pattern of the related economic benefits cannot be reliably determined. The Company is indemnified for tax liabilities incurred prior to the acquisition date. Indemnified tax liabilities will create an indemnification asset (receivable). At this time, an indemnification asset (receivable) balance has not been established. Transaction and integration related costs included in general and administrative expenses for the three and six months ended June 30, 2018 are $893 and $1,582, respectively. The Company has elected not to show pro forma information as this acquisition was immaterial to the overall financial results of the Company. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 6 Months Ended |
Jun. 30, 2018 | |
STOCKHOLDERS' EQUITY [Abstract] | |
STOCKHOLDERS' EQUITY | NOTE 3 – STOCKHOLDERS’ EQUITY STOCK-BASED COMPENSATION The Company’s results for the three and six months ended June 30, 2018 and 2017 reflected the following stock-based compensation cost, and such compensation cost had the following effects on net earnings: Increase/(Decrease) for the Three Months Ended June 30, 2018 2017 Cost of sales $ 242 $ (167 ) Operating expenses 1,424 1,210 Net earnings (1,280 ) (663 ) Increase/(Decrease) for the Six Months Ended June 30, 2018 2017 Cost of sales $ 487 $ 144 Operating expenses 2,972 2,740 Net earnings (2,657 ) (1,830 ) As allowed by ASC 718, the Company has made an estimate of expected forfeitures based on its historical experience and is recognizing compensation cost only for those stock-based compensation awards expected to vest. The Company’s stock incentive plans allow for the granting of stock awards and options to purchase common stock. Both incentive stock options and nonqualified stock options can be awarded under the plans. No option will be exercisable for longer than ten years after the date of grant. The Company has approved and reserved a number of shares to be issued upon exercise of the outstanding options that is adequate to cover all exercises. As of June 30, 2018, the plans had 1,372,804 shares available for future awards. Compensation expense for stock options and stock awards is recognized on a straight-line basis over the vesting period, generally three years for stock options, four years for employee restricted stock awards, three years for employee performance share awards, and four years for non-employee director restricted stock awards. Certain awards provide for accelerated vesting if there is a change in control (as defined in the plans) or other qualifying events. Option activity for the six months ended June 30, 2018 and 2017 is summarized below For the six months ended June 30, 2018 Shares (000s) Weighted Average Exercise Price Aggregate Intrinsic Value Weighted Average Remaining Contractual Term Outstanding as of December 31, 2017 946 $ 55.44 $ 24,714 Granted 148 74.57 Exercised (152 ) 43.32 Forfeited (2 ) 75.44 Cancelled (1 ) 25.39 Outstanding as of June 30, 2018 939 $ 60.42 $ 35,409 6.6 Exercisable as of June 30, 2018 534 $ 49.19 $ 26,142 5.3 For the six months ended June 30, 2017 Shares (000s) Weighted Average Exercise Price Aggregate Intrinsic Value Weighted Average Remaining Contractual Term Outstanding as of December 31, 2016 1,066 $ 45.32 $ 41,161 Granted 220 85.23 Exercised (150 ) 32.54 Forfeited (39 ) 70.57 Cancelled (19 ) 58.61 Outstanding as of June 30, 2017 1,078 $ 54.10 $ 27,001 6.6 Exercisable as of June 30, 2017 603 $ 40.83 $ 22,249 4.7 ASC 718 requires companies to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award. The fair value of each option grant is estimated on the date of the grant using the Black-Scholes option-pricing model with the following weighted average assumptions: dividend yields of 0.6% and 0.5%; expected volatilities of 27% and 30%; risk-free interest rates of 2.6% and 1.8%; and expected lives of 4.4 and 4.6 years, in each case for the six months ended June 30, 2018 and 2017, respectively. The Company used a projected expected life for each award granted based on historical experience of employees’ exercise behavior. Expected volatility is based on the Company’s historical volatility levels. Dividend yields are based on the Company’s historical dividend yields. Risk-free interest rates are based on the implied yields currently available on U.S. Treasury zero coupon issues with a remaining term equal to the expected life. Other information pertaining to option activity during the three and six months ended June 30, 2018 and 2017 was as follows: Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Weighted-average fair value of options granted $ - $ 20.54 $ 18.62 $ 23.21 Total intrinsic value of stock options exercised ($000s) $ 5,375 $ 2,375 $ 7,200 $ 7,596 Non-vested restricted stock activity for the six months ended June 30, 2018 and 2017 is summarized below: Six months ended June 30, 2018 Shares (000s) Weighted Average Grant Date Fair Value Non-vested balance as of December 31, 2017 66 $ 65.66 Granted 37 75.19 Vested (17 ) 57.65 Forfeited - - Non-vested balance as of June 30, 2018 86 $ 71.40 Six months ended June 30, 2017 Shares (000s) Weighted Average Grant Date Fair Value Non-vested balance as of December 31, 2016 102 $ 54.18 Granted 9 85.40 Vested (41 ) 50.07 Forfeited (4 ) 55.45 Non-vested balance as of June 30, 2017 66 $ 61.05 Non-vested performance share activity for the six months ended June 30, 2018 and 2017 is summarized below: Six months ended June 30, 2018 Shares (000s) Weighted Average Grant Date Fair Value Non-vested balance as of December 31, 2017 39 $ 72.62 Granted 32 71.27 Vested (15 ) 58.78 Forfeited - - Non-vested balance as of June 30, 2018 56 $ 75.47 Six months ended June 30, 2017 Shares (000s) Weighted Average Grant Date Fair Value Non-vested balance as of December 31, 2016 34 $ 61.06 Granted 16 93.85 Vested - - Forfeited (7 ) 69.18 Non-vested balance as of June 30, 2017 43 $ 72.26 The performance share (“PS”) awards provide the recipients the right to receive a certain number of shares of the Company’s common stock in the future, subject to an (1) EBITDA performance hurdle, where vesting is dependent upon the Company achieving a certain EBITDA percentage growth over the performance period, and (2) relative total shareholder return (TSR) where vesting is dependent upon the Company’s TSR performance over the performance period relative to a comparator group consisting of the Russell 2000 index constituents. Expense is measured based on the fair value at the date of grant utilizing a Black-Scholes methodology to produce a Monte-Carlo simulation model which allows for the incorporation of the performance hurdles that must be met before the PS vests. The assumptions used in the fair value determination were risk free interest rates of 2.4% and 1.5%; dividend yields of 0.5% and 0.6%; volatilities of 27% and 32%; and initial TSR’s of -10.5% and 8.2%, in each case for the six months ended June 30, 2018 and 2017, respectively. Expense is estimated based on the number of shares expected to vest, assuming the requisite service period is rendered and the probable outcome of the performance condition is achieved. The estimate is revised if subsequent information indicates that the actual number of shares likely to vest differs from previous estimates. Expense is ultimately adjusted based on the actual achievement of service and performance targets. The PS will cliff vest 100% at the end of the third year following the grant in accordance with the performance metrics set forth. As of June 30, 2018 and 2017, there was $11,860 and $10,754, respectively, of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted under the plans. As of June 30, 2018, the unrecognized compensation cost is expected to be recognized over a weighted-average period of approximately 2 years. The Company estimates that share-based compensation expense for the year ended December 31, 2018 will be approximately $6,700. REPURCHASE OF COMMON STOCK The Company has an approved stock repurchase program. The total authorization under this program is 3,763,038 shares. Since the inception of the program in June 1999, a total of 2,188,879 shares have been purchased, of which 4,408 shares remained in treasury at June 30, 2018. During the six months ended June 30, 2018 and 2017, a total of 14,862 and 21,099 shares, respectively, have been purchased at an average cost of $82.22 and $82.53 per share, respectively. The Company intends to acquire shares from time to time at prevailing market prices if and to the extent it deems it advisable to do so based on its assessment of corporate cash flow, market conditions and other factors. |
INVENTORIES
INVENTORIES | 6 Months Ended |
Jun. 30, 2018 | |
INVENTORIES [Abstract] | |
INVENTORIES | NOTE 4 – INVENTORIES Inventories at June 30, 2018 and December 31, 2017 consisted of the following: June 30, 2018 December 31, 2017 Raw materials $ 25,690 $ 20,520 Work in progress 3,047 6,308 Finished goods 41,334 33,868 Total inventories $ 70,071 $ 60,696 |
PROPERTY, PLANT AND EQUIPMENT
PROPERTY, PLANT AND EQUIPMENT | 6 Months Ended |
Jun. 30, 2018 | |
PROPERTY, PLANT AND EQUIPMENT [Abstract] | |
PROPERTY, PLANT AND EQUIPMENT | NOTE 5 – PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment at June 30, 2018 and December 31, 2017 are summarized as follows: June 30, 2018 December 31, 2017 Land $ 6,173 $ 7,262 Building 64,112 63,224 Equipment 205,889 201,341 Construction in progress 12,846 13,860 289,020 285,687 Less: accumulated depreciation 104,253 95,894 Property, plant and equipment, net $ 184,767 $ 189,793 |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 6 Months Ended |
Jun. 30, 2018 | |
INTANGIBLE ASSETS [Abstract] | |
INTANGIBLE ASSETS | NOTE 6 – INTANGIBLE ASSETS The Company had goodwill in the amount of $441,554 and $441,361 as of June 30, 2018 and December 31, 2017, respectively, subject to the provisions of ASC 350, “Intangibles-Goodwill and Other.” Identifiable intangible assets with finite lives at June 30, 2018 and December 31, 2017 are summarized as follows: Amortization Period (in years) Gross Carrying Amount at 6/30/18 Accumulated Amortization at 6/30/18 Gross Carrying Amount at 12/31/17 Accumulated Amortization at 12/31/17 Customer relationships & lists 10 $ 190,032 $ 114,007 $ 190,061 $ 105,573 Trademarks & trade names 5-17 40,630 14,894 40,630 12,895 Developed technology 5 13,338 7,270 13,338 5,936 Other 3-18 13,749 5,705 13,466 5,018 $ 257,749 $ 141,876 $ 257,495 $ 129,422 Amortization of identifiable intangible assets was approximately $12,472 for the six months ended June 30, 2018. Assuming no change in the gross carrying value of identifiable intangible assets, estimated amortization expense is $12,282 for the remainder of 2018, $22,652 for 2019, $20,618 for 2020, $17,411 for 2021, $15,843 for 2022 and $14,522 for 2023. At June 30, 2018, there were no identifiable intangible assets with indefinite useful lives as defined by ASC 350. Identifiable intangible assets are reflected in “Intangible assets with finite lives, net” in the Company’s condensed consolidated balance sheets. There were no changes to the useful lives of intangible assets subject to amortization during the six months ended June 30, 2018. |
EQUITY-METHOD INVESTMENT
EQUITY-METHOD INVESTMENT | 6 Months Ended |
Jun. 30, 2018 | |
EQUITY-METHOD INVESTMENT [Abstract] | |
EQUITY-METHOD INVESTMENT | NOTE 7 – EQUITY-METHOD INVESTMENT In 2013, the Company and Eastman Chemical Company (formerly Taminco Corporation) formed a joint venture (66.66% / 33.34% ownership), St. Gabriel CC Company, LLC, to design, develop, and construct an expansion of the Company’s St. Gabriel aqueous choline chloride plant. The Company contributed the St. Gabriel plant, at cost, and expansion will be funded by the owners. The joint venture became operational as of July 1, 2016. St. Gabriel CC Company, LLC is a Variable Interest Entity (VIE) because the total equity at risk is not sufficient to permit the joint venture to finance its own activities without additional subordinated financial support. Additionally, voting rights (2 votes each) are not proportionate to the owners’ obligation to absorb expected losses or receive the expected residual returns of the joint venture. The Company will receive up to 2/3 of the production offtake capacity and absorbs operating expenses approximately proportional to the actual percentage of offtake. The joint venture is accounted for under the equity method of accounting since the Company is not the primary beneficiary as we do not have the power to direct the activities of the joint venture that most significantly impact its economic performance. The Company recognized a loss of $141 and $136 for the three months ended June 30, 2018 and 2017, respectively, and a loss of $280 and $270 for the six months ended June 30, 2018 and 2017, respectively, relating to its portion of the joint venture’s expenses in other expense. The carrying value of the joint venture at June 30, 2018 and December 31, 2017 is $4,524 and $4,804, respectively, and is recorded in other assets. |
REVOLVING LOAN
REVOLVING LOAN | 6 Months Ended |
Jun. 30, 2018 | |
REVOLVING LOAN [Abstract] | |
REVOLVING LOAN | NOTE 8 – REVOLVING LOAN On June 27, 2018, the Company and a bank syndicate entered into a five year senior secured revolving credit agreement ("Credit Agreement"), which replaced the existing credit facility that had provided for a senior secured term loan A of $350,000 and a revolving loan of $100,000. The Credit Agreement, which expires on June 27, 2023, provides for revolving loans up to $500,000 (collectively referred to as the "loans"). The loans may be used for working capital, letters of credit, and other corporate purposes and may be drawn upon at the Company's discretion. The initial proceeds from the new Credit Agreement were used to repay the outstanding balance of $210,750 on its senior secured term loan A, which was due May 2019. There are no installment payments required on the revolving loans; they may be voluntarily prepaid in whole or in part without premium or penalty, and all outstanding amounts are due on the maturity date. As of June 30, 2018, the balance outstanding amounted to $210,750. Amounts outstanding under the Credit Agreement are subject to an interest rate equal to a fluctuating rate as defined by the Credit Agreement plus an applicable rate. The applicable rate is based upon the Company's consolidated net leverage ratio, as defined in the Credit Agreement, and the interest rate was 3.228% at June 30, 2018. The Company is also required to pay a commitment fee on the unused portion of the revolving loan, which is based on the Company's consolidated net leverage ratio as defined in the Credit Agreement and ranges from 0.15% to 0.275% (0.175% at June 30, 2018). The unused portion of the revolving loan amounted to $289,250 at June 30, 2018. The Company is also required to pay, as applicable, letter of credit fees, administrative agent fees, and other fees to the arrangers and lenders. Costs associated with the issuance of the revolving loans are capitalized and amortized on a straight-line basis over the term of the Credit Agreement. Costs associated with the issuance of the extinguished debt instrument were capitalized and amortized over the term of the respective financing arrangement using the effective interest method. Capitalized costs net of accumulated amortization totaled $1,369 at June 30, 2018 and are included in Other assets on the balance sheet. Capitalized costs net of accumulated amortization totaled $766 at June 30, 2017 and are recorded as a reduction of Long-term debt on the balance sheet. Amortization expense pertaining to these costs totaled $431, including the write off of $363 of deferred financing costs in connection with the extinguished debt in the second quarter of 2018, and $120 for the three months ended June 30, 2018 and 2017, respectively, and $540 and $244 for the six months ended June 30, 2018 and 2017, respectively, and is included in interest expense in the accompanying condensed consolidated statements of earnings. The Credit Agreement contains quarterly covenants requiring the consolidated leverage ratio to be less than a certain maximum ratio and the consolidated interest coverage ratio to exceed a certain minimum ratio. At June 30, 2018, the Company was in compliance with these covenants. Indebtedness under the Company's loan agreements are secured by assets of the Company. |
NET EARNINGS PER SHARE
NET EARNINGS PER SHARE | 6 Months Ended |
Jun. 30, 2018 | |
NET EARNINGS PER SHARE [Abstract] | |
NET EARNINGS PER SHARE | NOTE 9 – NET EARNINGS PER SHARE The following presents a reconciliation of the net earnings and shares used in calculating basic and diluted net earnings per share: Three months ended June 30, 2018 Net Earnings (Numerator) Number of Shares (Denominator) Per Share Amount Basic EPS – Net earnings and weighted average common shares outstanding $ 19,679 32,077,353 $ .61 Effect of dilutive securities – stock options, restricted stock, and performance shares 360,366 Diluted EPS – Net earnings and weighted average common shares outstanding and effect of stock options, restricted stock, and performance shares $ 19,679 32,437,719 $ .61 Three months ended June 30, 2017 Net Earnings (Numerator) Number of Shares (Denominator) Per Share Amount Basic EPS – Net earnings and weighted average common shares outstanding $ 16,536 31,798,773 $ .52 Effect of dilutive securities – stock options, restricted stock, and performance shares 403,782 Diluted EPS – Net earnings and weighted average common shares outstanding and effect of stock options, restricted stock, and performance shares $ 16,536 32,202,555 $ .51 Six months ended June 30, 2018 Net Earnings (Numerator) Number of Shares (Denominator) Per Share Amount Basic EPS – Net earnings and weighted average common shares outstanding $ 39,025 32,031,342 $ 1.22 Effect of dilutive securities – stock options, restricted stock, and performance shares 346,324 Diluted EPS – Net earnings and weighted average common shares outstanding and effect of stock options, restricted stock, and performance shares $ 39,025 32,377,666 $ 1.21 Six months ended June 30, 2017 Net Earnings (Numerator) Number of Shares (Denominator) Per Share Amount Basic EPS – Net earnings and weighted average common shares outstanding $ 32,053 31,752,489 $ 1.01 Effect of dilutive securities – stock options, restricted stock, and performance shares 442,563 Diluted EPS – Net earnings and weighted average common shares outstanding and effect of stock options, restricted stock, and performance shares $ 32,053 32,195,052 $ 1.00 The Company had stock options covering 190,590 and 230,108 shares at June 30, 2018 and 2017, respectively, that could potentially dilute basic earnings per share in future periods that were not included in diluted earnings per share because their effect on the period presented was anti-dilutive. |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Jun. 30, 2018 | |
INCOME TAXES [Abstract] | |
INCOME TAXES | NOTE 10 – INCOME TAXES The Company’s effective tax rate for the three months ended June 30, 2018 and 2017, was 21.5% and 26.7%, respectively and 22.3% and 25.9%, respectively, for the six months ended June 30, 2018 and 2017. The decrease in effective tax rate for the three and six months ended June 30, 2018 compared to the three and six months ended June 30, 2017 is primarily attributed to the impact of the U.S. Tax Cuts and Jobs Act (the “Tax Reform Act”) that reduced the U.S. corporate tax rate from 35% to 21%. This was partially offset by higher state income taxes. In December 2017, the Tax Reform Act was signed into law making significant changes to the Internal Revenue Code. Changes included, but are not limited to, a corporate tax rate decrease from 35% to 21 % effective for tax years beginning after December 31, 2017, the transition of U.S. international taxation from a worldwide tax system to a territorial system, and a one-time transition tax on the mandatory deemed repatriation of cumulative foreign earnings as of December 31, 2017. In March 2018, the FASB issued ASU No. 2018-05, "Amendments to SEC Paragraph Pursuant to SEC Staff Accounting Bulletin No. 118" ("ASU 2018-05"), clarifies the income tax accounting implications of the Tax Reform Act. Staff Accounting Bulletin No. 118 ("SAB 118") was issued to address the application of U.S. GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the Tax Reform Act. As of June 30, 2018, additional work is still necessary for a more detailed analysis of the Company's deferred tax assets and liabilities, and its historical foreign earnings as well as potential correlative adjustments. The provisional amounts are subject to adjustment during the measurement period of up to one year following the December 2017 enactment of the Tax Reform Act. SAB 118 also provided additional guidance to address the accounting for the effects of the Tax Reform Act provisions related to the taxation of Global Intangible Low-Taxed Income (“GILTI”). The guidance provided that companies should make an accounting policy election to recognize deferred taxes for temporary differences expected to reverse as GILTI in future years or to include the tax expense in the year it is incurred. We have not completed our analysis of the effects of GILTI provisions and will further consider the accounting policy election within the measurement period as provided for under SAB 118. The Tax Reform Act also changed the individuals whose compensation is subject to a $1 million cap on deductibility under Section 162(m) and includes performance-based compensation such as stock options and stock appreciation rights in the calculation. The provision generally applies to taxable years beginning after December 31, 2017 and provides a transition for compensation paid pursuant to a written binding contract that is in effect on November 2, 2017. The Company will need to review carefully the terms of its compensation plans and agreements to assess whether such plans and agreements are considered to be written binding contracts in effect on November 2, 2017. Due to the complexity of applying this new provision, the Company has not yet completed its analysis of these new provisions and will finalize its analysis during the measurement period provided under SAB 118. Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company regularly reviews its deferred tax assets for recoverability and would establish a valuation allowance if it believed that such assets may not be recovered, taking into consideration historical operating results, expectations of future earnings, changes in its operations and the expected timing of the reversals of existing temporary differences. We account for uncertainty in income taxes utilizing ASC 740-10. ASC 740-10 clarifies whether or not to recognize assets or liabilities for tax positions taken that may be challenged by a tax authority. It prescribes a recognition threshold and measurement attribute for financial statement disclosure of tax positions taken or expected to be taken. This interpretation also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, and disclosures. The application of ASC 740-10 requires judgment related to the uncertainty in income taxes and could impact our effective tax rate. The Company files income tax returns in the U.S. and in various states and foreign countries. As of June 30, 2018, in the major jurisdictions where the Company operates, it is generally no longer subject to income tax examinations by tax authorities for years before 2013. As of June 30, 2018 and December 31, 2017, the Company had approximately $5,285 and $4,781, respectively, of unrecognized tax benefits, which are included in other long-term obligations on the Company’s consolidated balance sheets. The Company includes interest expense or income as well as potential penalties on unrecognized tax positions as a component of income tax expense in the consolidated statements of earnings. The total amount of accrued interest and penalties related to uncertain tax positions at June 30, 2018 and December 31, 2017 was approximately $1,931 and $1,882, respectively, and is included in other long-term obligations. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 6 Months Ended |
Jun. 30, 2018 | |
SEGMENT INFORMATION [Abstract] | |
SEGMENT INFORMATION | NOTE 11 – SEGMENT INFORMATION Human Nutrition & Health Our Human Nutrition & Health segment supplies ingredients in the food and beverage industry, providing customized solutions in powder, solid and liquid flavor delivery systems, spray dried emulsified powder systems, and cereal systems. Our products include creamer systems, dairy replacers, powdered fats, nutritional beverage bases, beverages, juice & dairy bases, chocolate systems, ice cream bases & variegates, ready-to-eat cereals, grain based snacks, and cereal based ingredients. Additionally, we provide microencapsulation solutions to a variety of applications in food, pharmaceutical and nutritional ingredients to enhance performance of nutritional fortification, processing, mixing, and packaging applications and shelf-life. Major product applications are baked goods, refrigerated and frozen dough systems, processed meats, seasoning blends, confections, and nutritional supplements. We also produce and market human grade choline nutrients and mineral amino acid chelated products through this segment for wellness applications. Choline is recognized to play a key role in the development and structural integrity of brain cell membranes in infants, processing dietary fat, reproductive development and neural functions, such as memory and muscle function. Our mineral amino acid chelates, specialized mineral salts, and mineral complexes are used as raw materials for inclusion in premier human nutrition products. Science and patented technology have been combined to create an organic molecule in a form the body can readily assimilate. Animal Nutrition & Health Our Animal Nutrition & Health (“ANH”) segment provides nutritional products derived from our microencapsulation and chelation technologies in addition to basic choline chloride. For ruminant animals, our microencapsulated products boost health and milk production, delivering nutrient supplements that are biologically available, providing required nutritional levels. Our proprietary chelation technology provides enhanced nutrient absorption for various species of production and companion animals and is marketed for use in animal feed throughout the world. ANH also manufactures and supplies choline chloride, an essential nutrient for monogastric animal health, predominantly to the poultry, pet and swine industries. Choline, which is manufactured and sold in both dry and aqueous forms, plays a vital role in the metabolism of fat. Choline deficiency can result in reduced growth and perosis in poultry, and fatty liver, kidney necrosis and general poor health condition in swine. Sales of specialty products for the animal nutrition and health industry are highly dependent on dairy industry economics as well as the ability of the Company to leverage the results of university and field research on the animal health benefits of the Company’s products. Management believes that success in the commodity-oriented basic choline chloride marketplace is highly dependent on the Company’s ability to maintain its strong reputation for excellent product quality and customer service. The Company continues to increase production efficiencies in order to maintain its competitive-cost position to effectively compete in a competitive global marketplace. Specialty Products Ethylene oxide, at the 100% level, is sold as a sterilant gas, primarily for use in the health care industry. It is used to sterilize a wide range of medical devices because of its versatility and effectiveness in treating hard or soft surfaces, composites, metals, tubing and different types of plastics without negatively impacting the performance of the device being sterilized. Our 100% ethylene oxide product is distributed in uniquely designed, recyclable, double-walled, stainless steel drums to assure compliance with safety, quality and environmental standards as outlined by the EPA and the DOT. Our inventory of these specially built drums, along with our two filling facilities, represents a significant capital investment. Contract sterilizers and medical device manufacturers are principal customers for this product. We also sell single use canisters with 100% ethylene oxide for use in sterilizing re-usable devices typically processed in autoclave units in hospitals. As a fumigant, ethylene oxide blends are highly effective in killing bacteria, fungi, and insects in spices and other seasoning materials. Propylene oxide is marketed and sold as a fumigant to aid in the control of insects and microbiological spoilage; and to reduce bacterial and mold contamination in certain shell and processed nut meats, processed spices, cacao beans, cocoa powder, raisins, figs and prunes. We distribute our propylene oxide product primarily in recyclable, single-walled, carbon steel cylinders according to standards outlined by the EPA and the DOT. Our inventory of these cylinders also represents a significant capital investment. Propylene oxide is also sold to customers seeking smaller (as opposed to bulk) quantities and whose requirements include utilization in various chemical synthesis applications, such as increasing paint durability and manufacturing specialty starches and textile coatings. Our micronutrient agricultural nutrition business sells chelated minerals primarily into high value crops. We have a unique and patented two-step approach to solving mineral deficiency in plants to optimize health, yield and shelf-life. First, we determine optimal mineral balance for plant health. We then have a foliar applied Metalosate product range, utilizing patented amino acid chelate technology. Our products quickly and efficiently deliver mineral nutrients. As a result, the farmer/grower gets healthier crops that are more resistant to disease and pests, larger yields and healthier food for the consumer with extended shelf life for produce being shipped long distances. Industrial Products Certain derivatives of choline chloride are manufactured and sold into industrial applications predominately as a component for hydraulic fracturing of shale natural gas wells. Our products offer an attractive, effective and more environmentally responsible alternative than other clay stabilizers. Industrial grade choline bicarbonate is completely chloride free and our choline chloride reduces the amount of chlorides released into the environment up to 75% when compared to potassium chloride. The Industrial Products segment also includes the manufacture and sale of methylamines. Methylamines are a primary building block for the manufacture of choline products and are produced at our Italian operation and sold for a wide range of industrial applications in Europe. Business Segment Assets: June 30, 2018 December 31, 2017 Human Nutrition & Health $ 718,103 $ 719,010 Animal Nutrition & Health 111,240 118,418 Specialty Products Industrial Products 60,375 28,571 63,141 18,471 Other Unallocated 71,178 44,596 Total $ 989,467 $ 963,636 Depreciation/Amortization: Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Human Nutrition & Health $ 8,384 $ 8,196 $ 16,916 $ 16,311 Animal Nutrition & Health 1,294 1,145 2,599 3,034 Specialty Products 1,010 1,023 2,020 2,039 Industrial Products 180 264 351 453 Total $ 10,868 $ 10,628 $ 21,886 $ 21,837 Capital Expenditures: Six Months Ended June 30, 2018 2017 Human Nutrition & Health $ 4,091 $ 8,594 Animal Nutrition & Health 1,763 1,403 Specialty Products 1,202 411 Industrial Products 644 411 Total $ 7,700 $ 10,819 Business Segment Net Sales: Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Human Nutrition & Health $ 85,013 $ 78,031 $ 168,076 $ 151,158 Animal Nutrition & Health 42,036 37,048 88,177 75,126 Specialty Products 22,864 20,759 40,604 39,549 Industrial Products 13,774 11,244 28,240 18,977 Total $ 163,687 $ 147,082 $ 325,097 $ 284,810 Business Segment Earnings Before Income Taxes: Three Months Ended Six Months Ended June 30, June 30, 2018 2017 2018 2017 Human Nutrition & Health $ 10,066 $ 11,320 $ 23,069 $ 21,516 Animal Nutrition & Health 7,113 3,689 14,597 9,065 Specialty Products 8,679 8,055 13,814 14,518 Industrial Products 2,654 1,579 5,133 2,301 Transaction and integration costs (893 ) (1,899 ) (1,582 ) (1,953 ) Indemnification settlement - 2,087 - 2,087 Interest and other income (expense) (2,558 ) (2,271 ) (4,793 ) (4,265 ) Total $ 25,061 $ 22,560 $ 50,238 $ 43,269 Transaction and integration costs were primarily related to the aforementioned definitive agreements (see Note 2). |
REVENUE
REVENUE | 6 Months Ended |
Jun. 30, 2018 | |
REVENUE [Abstract] | |
REVENUE | NOTE 12 – REVENUE Adoption of ASC Topic 606, "Revenue from Contracts with Customers" On January 1, 2018, we adopted Topic 606 using the modified retrospective method applied to those contracts that were in progress as of January 1, 2018. Results for reporting periods beginning after January 1, 2018 are presented under Topic 606, while prior period amounts are not adjusted and continue to be reported in accordance with our historical accounting under Topic 605. The impact to revenues as a result of applying Topic 606 was a decrease of $108 and an increase of $351 for the three and six months ended June 30, 2018, respectively. Revenue Recognition Revenues are recognized when control of the promised goods is transferred to our customers, in an amount that reflects the consideration we expect to realize in exchange for those goods. The following table presents our revenues disaggregated by revenue source (in thousands, unaudited). Sales and usage-based taxes are excluded from revenues. Three Months Ended Six Months Ended June 30, June 30, 2018 2017 2018 2017 Product Sales $ 149,052 $ 133,149 $ 297,834 $ 257,772 Co-manufacturing 11,830 11,210 20,669 21,309 Bill and Hold 1,555 1,401 2,844 2,384 Consignment 333 594 1,378 1,237 Product Sales Revenue 162,770 146,354 322,725 282,702 Royalty Revenue 917 728 2,372 2,108 Total Revenue $ 163,687 $ 147,082 $ 325,097 $ 284,810 The following table presents our revenues disaggregated by geography, based on the billing addresses of our customers (in thousands, unaudited): Three Months Ended Six Months Ended June 30, June 30, 2018 2017 2018 2017 Domestic Revenue $ 125,019 $ 113,227 $ 245,687 $ 219,527 Foreign Revenue 38,668 33,855 79,410 65,283 Total Revenue $ 163,687 $ 147,082 $ 325,097 $ 284,810 Product Sales Revenues Balchem’s primary operation is the manufacturing and sale of health and wellness ingredient products, in which Balchem receives an order from a customer and fulfills that order. Balchem’s product sales have four sub-streams of revenue: product sales, co-manufacturing, bill and hold, and consignment. Royalty Revenues Royalty revenue consists of agreements with customers to use Balchem’s intellectual property in exchange for a sales based royalty. Royalty revenue is recorded as part of the Human Nutrition & Health segment. Contract Liabilities We record contract liabilities when cash payments are received or due in advance of our performance, including amounts which are refundable. Our payment terms vary by the type and location of our customer and the products offered. The term between invoicing and when payment is due is not significant. For certain products or services and customer types, we require payment before the products are delivered to the customer. Practical Expedients and Exemptions We generally expense sales commissions when incurred because the amortization period would have been one year or less. These costs are recorded within selling and marketing expenses. We do not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which we recognize revenue at the amount to which we have the right to invoice for products shipped. |
SUPPLEMENTAL CASH FLOW INFORMAT
SUPPLEMENTAL CASH FLOW INFORMATION | 6 Months Ended |
Jun. 30, 2018 | |
SUPPLEMENTAL CASH FLOW INFORMATION [Abstract] | |
SUPPLEMENTAL CASH FLOW INFORMATION | NOTE 13 – SUPPLEMENTAL CASH FLOW INFORMATION Cash paid during the six months ended June 30, 2018 and 2017 for income taxes and interest is as follows: Six Months Ended June 30, 2018 2017 Income taxes $ 12,830 $ 14,508 Interest $ 3,576 $ 3,436 |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | 6 Months Ended |
Jun. 30, 2018 | |
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) [Abstract] | |
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | NOTE 14 – ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) The changes in accumulated other comprehensive income (loss) were as follows: Three Months Ended June 30, 2018 2017 Net foreign currency translation adjustment $ (2,911 ) $ 2,697 Net change in postretirement benefit plan (see Note 15 for further information) Amortization of prior service cost 17 19 Amortization of gain (1 ) (4 ) Total before tax 16 15 Tax - (4 ) Net of tax 16 11 Total other comprehensive (loss)/income $ (2,895 ) $ 2,708 Six Months Ended June 30, 2018 2017 Net foreign currency translation adjustment $ (1,548 ) $ 3,238 Net change in postretirement benefit plan (see Note 15 for further information) Amortization of prior service cost 35 38 Amortization of gain (2 ) (8 ) Total before tax 33 30 Tax (4 ) (9 ) Net of tax 29 21 Total other comprehensive (loss)/income $ (1,519 ) $ 3,259 Accumulated other comprehensive loss at June 30, 2018 and December 31, 2017 consisted of the following: Foreign currency translation adjustment Postretirement benefit plan Total Balance December 31, 2017 $ (1,303 ) $ (339 ) $ (1,642 ) Other comprehensive loss (1,548 ) 29 (1,519 ) Balance June 30, 2018 $ (2,851 ) $ (310 ) $ (3,161 ) |
EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS | 6 Months Ended |
Jun. 30, 2018 | |
EMPLOYEE BENEFIT PLANS [Abstract] | |
EMPLOYEE BENEFIT PLANS | NOTE 15 – EMPLOYEE BENEFIT PLANS The Company provides postretirement benefits in the form of two unfunded postretirement medical plans; one that under a collective bargaining agreement covers eligible retired employees of the Verona facility and a plan for Named Executive Officers. Net periodic benefit costs for such retirement medical plan were as follows: Six Months Ended June 30, 2018 2017 Service cost $ 39 $ 34 Interest cost 22 23 Amortization of prior service cost 35 38 Amortization of gain (2 ) (8 ) Net periodic benefit cost $ 94 $ 87 The amount recorded for these obligations on the Company’s balance sheet as of June 30, 2018 and December 31, 2017 is $1,634 and $1,573, respectively, and is included in other long-term obligations. These plans are unfunded and approved claims are paid from Company funds. Historical cash payments made under such plan have typically been less than $100 per year. On June 1, 2018, the Company established an unfunded, nonqualified deferred compensation plan maintained for the benefit of a select group of management or highly compensated employees. Assets of the plan are held in a rabbi trust, which are subject to additional risk of loss in the event of bankruptcy or insolvency of the Company. As of June 30, 2018, no deferred compensation elections had yet been made and there was no deferred compensation liability. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2018 | |
COMMITMENTS AND CONTINGENCIES [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 16 – COMMITMENTS AND CONTINGENCIES Rent expense charged to operations under lease agreements for the six months ended June 30, 2018 and 2017 aggregated approximately $1,655 and $1,613, respectively. Aggregate future minimum rental payments required under all non-cancelable operating leases at June 30, 2018 are as follows: Year July 1, 2018 to December 31, 2018 $ 1,555 2019 3,156 2020 2,785 2021 2,342 2022 1,611 2023 1,220 Thereafter 4,369 Total minimum lease payments $ 17,038 The Company’s Verona, Missouri facility, while held by a prior owner, was designated by the EPA as a Superfund site and placed on the National Priorities List in 1983, because of dioxin contamination on portions of the site. Remediation conducted by the prior owner under the oversight of the EPA and the Missouri Department of Natural Resources (“MDNR”). While the Company must maintain the integrity of the capped areas in the remediation areas on the site, the prior owner is responsible for completion of any further Superfund remedy. The Company is indemnified by the sellers under its May 2001 asset purchase agreement covering its acquisition of the Verona, Missouri facility for potential liabilities associated with the Superfund site. From time to time, the Company is a party to various litigation, claims and assessments. Management believes that the ultimate outcome of such matters will not have a material effect on the Company’s consolidated financial position, results of operations, or liquidity. |
FAIR VALUE OF FINANCIAL INSTRUM
FAIR VALUE OF FINANCIAL INSTRUMENTS | 6 Months Ended |
Jun. 30, 2018 | |
FAIR VALUE OF FINANCIAL INSTRUMENTS [Abstract] | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | NOTE 17 – FAIR VALUE OF FINANCIAL INSTRUMENTS The Company has a number of financial instruments, none of which are held for trading purposes. The Company estimates that the fair value of all financial instruments at June 30, 2018 and December 31, 2017 does not differ materially from the aggregate carrying values of its financial instruments recorded in the accompanying condensed consolidated balance sheets. The estimated fair value amounts have been determined by the Company using available market information and appropriate valuation methodologies. Considerable judgment is necessarily required in interpreting market data to develop the estimates of fair value, and, accordingly, the estimates are not necessarily indicative of the amounts that the Company could realize in a current market exchange. The carrying value of debt approximates fair value as the interest rate is based on market and the Company’s consolidated leverage ratio. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 6 Months Ended |
Jun. 30, 2018 | |
RELATED PARTY TRANSACTIONS [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 18 – RELATED PARTY TRANSACTIONS The Company provides services on a contractual agreement to St. Gabriel CC Company, LLC. These services include accounting, information technology, quality control, and purchasing services, as well as operation of the St. Gabriel CC Company, LLC plant. The Company also sells raw materials to St. Gabriel CC Company, LLC. In return, St. Gabriel CC Company, LLC provides choline chloride finished goods. The services the Company provided amounted to $1,083 and $844, respectively, for the three months ended June 30, 2018 and 2017 and $2,010 and $1,722, respectively, for the six months ended June 30, 2018 and 2017. The raw materials sold amounted to $8,451 and $5,533, respectively, for the three months ended June 30, 2018 and 2017 and $15,729 and $9,882, respectively, for the six months ended June 30, 2018 and 2017. These services and raw materials are primarily recorded in cost of goods sold net of the finished goods received from St. Gabriel CC Company, LLC of $5,588 and $4,498, respectively for the three months ended June 30, 2018 and 2017 and $11,624 and $9,182, respectively, for the six months ended June 30, 2018 and 2017. At June 30, 2018, the Company had a receivable of $2,919, recorded in accounts receivable from St. Gabriel CC Company, LLC for services rendered and raw materials sold and a payable of $1,880 for finished goods received recorded in accrued expenses. In addition, the Company had a receivable in the amount of $193 related to non-contractual monies owed from St. Gabriel CC Company, LLC, recorded in receivables. |
CONDENSED CONSOLIDATED FINANC26
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Policies) | 6 Months Ended |
Jun. 30, 2018 | |
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Recently Issued Accounting Standards In February 2016, the FASB issued ASU No. 2016-02, “Leases” (“ASU 2016-02”), which addresses the recognition of assets and liabilities that arise from all leases. The guidance requires lessees to recognize right-to-use assets and lease liabilities for most leases in the Consolidated Balance Sheets. The guidance is effective for annual and interim periods beginning after December 15, 2018 and early adoption is permitted. The Company is currently evaluating the impact of the new guidance. In January 2017, the FASB issued ASU No. 2017-04, “Simplifying the Test for Goodwill Impairment” (“ASU 2017-04”), which addresses changes to the testing for goodwill impairment by eliminating Step 2 of the process. The guidance is effective for annual and interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Early adoption is permitted, however the Company has elected not to adopt early as this ASU will not have a significant impact on the Company’s consolidated financial statements. Recently Adopted Accounting Standards In May 2014, the FASB issued a comprehensive new revenue recognition standard that superseded existing revenue recognition guidance under U.S. GAAP. The core principle of the new guidance is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The standard creates a five step model that requires companies to exercise judgment when considering the terms of a contract and all relevant facts and circumstances. The standard allows for several transition methods: (a) a full retrospective adoption in which the standard is applied to all of the periods presented, or (b) a modified retrospective adoption in which the standard is applied only to the most current period presented in the financial statements with a cumulative-effect adjustment reflected in retained earnings. The standard also requires expanded disclosures regarding the qualitative and quantitative information of an entity's nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. This new revenue recognition standard is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. We performed a detailed review of our contract portfolio representative of our different businesses and compared historical accounting policies and practices to the new standard. Because the standard impacts our business processes, systems and controls, we also developed a comprehensive change management project plan to guide the implementation. Over the course of 2017, we conducted training sessions for those in our global organization that are impacted by the new standard. Our primary business is the sale of products, and the adoption of the new revenue recognition standard did not have a material impact on our financial statements. We adopted the new standard effective January 1, 2018 utilizing the modified retrospective method. The cumulative-effect adjustment to retained earnings upon adoption was not material. In January 2017, the FASB issued ASU No. 2017-01, “Clarifying the Definition of a Business” (“ASU 2017-01”), which addresses the definition of what constitutes a business by providing clarification of the three elements that constitute a business. The guidance is effective for annual and interim periods beginning after December 15, 2017. The Company adopted ASU 2017-01 on January 1, 2018 prospectively (prior periods have not been restated). There was no significant impact on the Company’s consolidated financial statements. In October 2016, the FASB issued ASU 2016-16, "Intra-Entity Transfers of Assets Other Than Inventory" ("ASU 2016-16"). The standard requires that an entity recognize the income tax consequences of an intra-entity transfer of an asset when the transfer occurs as opposed to when the asset is transferred to an outside party as required under current U.S. GAAP. The standard does not apply to intra-entity transfers of inventory, which will continue to follow current U.S. GAAP. The guidance is effective for annual and interim periods beginning after December 15, 2007. The Company adopted ASU 2016-16 on January 1, 2018 utilizing the modified retrospective method. There was no impact on the Company's consolidated financial statements. In March 2018, the FASB issued ASU No. 2018-05, “Amendments to SEC Paragraph Pursuant to SEC Staff Accounting Bulletin No. 118” (“ASU 2018-05”), which clarifies the income tax accounting implications of the Tax Cuts and Jobs Act. The guidance is effective immediately. The Company is currently assessing the impact of the standard on the consolidated financial statements. |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
ACQUISITIONS [Abstract] | |
Estimated Fair Values of the Assets Acquired and Liabilities Assumed | The following table summarizes the fair values of the assets acquired and liabilities assumed. Cash and cash equivalents $ 5,065 Accounts receivable 2,860 Inventories 2,537 Prepaid expenses 186 Property, plant and equipment 12,219 Customer relationships 2,942 Developed technology 1,078 Trademark & trade name 1,388 Covenant not to compete 126 Goodwill 1,340 Trade accounts payable (844 ) Accrued expenses (1,416 ) Bank debt (2,384 ) Deferred income taxes (3,871 ) Amount paid to shareholders 21,226 IFP bank debt paid on purchase date 2,384 Total amount paid $ 23,610 |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
STOCKHOLDERS' EQUITY [Abstract] | |
Effect of Compensation Cost on Earnings | The Company’s results for the three and six months ended June 30, 2018 and 2017 reflected the following stock-based compensation cost, and such compensation cost had the following effects on net earnings: Increase/(Decrease) for the Three Months Ended June 30, 2018 2017 Cost of sales $ 242 $ (167 ) Operating expenses 1,424 1,210 Net earnings (1,280 ) (663 ) Increase/(Decrease) for the Six Months Ended June 30, 2018 2017 Cost of sales $ 487 $ 144 Operating expenses 2,972 2,740 Net earnings (2,657 ) (1,830 ) |
Stock Option Activity | Option activity for the six months ended June 30, 2018 and 2017 is summarized below For the six months ended June 30, 2018 Shares (000s) Weighted Average Exercise Price Aggregate Intrinsic Value Weighted Average Remaining Contractual Term Outstanding as of December 31, 2017 946 $ 55.44 $ 24,714 Granted 148 74.57 Exercised (152 ) 43.32 Forfeited (2 ) 75.44 Cancelled (1 ) 25.39 Outstanding as of June 30, 2018 939 $ 60.42 $ 35,409 6.6 Exercisable as of June 30, 2018 534 $ 49.19 $ 26,142 5.3 For the six months ended June 30, 2017 Shares (000s) Weighted Average Exercise Price Aggregate Intrinsic Value Weighted Average Remaining Contractual Term Outstanding as of December 31, 2016 1,066 $ 45.32 $ 41,161 Granted 220 85.23 Exercised (150 ) 32.54 Forfeited (39 ) 70.57 Cancelled (19 ) 58.61 Outstanding as of June 30, 2017 1,078 $ 54.10 $ 27,001 6.6 Exercisable as of June 30, 2017 603 $ 40.83 $ 22,249 4.7 |
Other Information Pertaining to Stock Option Activity | Other information pertaining to option activity during the three and six months ended June 30, 2018 and 2017 was as follows: Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Weighted-average fair value of options granted $ - $ 20.54 $ 18.62 $ 23.21 Total intrinsic value of stock options exercised ($000s) $ 5,375 $ 2,375 $ 7,200 $ 7,596 |
Non-vested Restricted Stock Activity | Non-vested restricted stock activity for the six months ended June 30, 2018 and 2017 is summarized below: Six months ended June 30, 2018 Shares (000s) Weighted Average Grant Date Fair Value Non-vested balance as of December 31, 2017 66 $ 65.66 Granted 37 75.19 Vested (17 ) 57.65 Forfeited - - Non-vested balance as of June 30, 2018 86 $ 71.40 Six months ended June 30, 2017 Shares (000s) Weighted Average Grant Date Fair Value Non-vested balance as of December 31, 2016 102 $ 54.18 Granted 9 85.40 Vested (41 ) 50.07 Forfeited (4 ) 55.45 Non-vested balance as of June 30, 2017 66 $ 61.05 |
Non-vested Performance Share Activity | Non-vested performance share activity for the six months ended June 30, 2018 and 2017 is summarized below: Six months ended June 30, 2018 Shares (000s) Weighted Average Grant Date Fair Value Non-vested balance as of December 31, 2017 39 $ 72.62 Granted 32 71.27 Vested (15 ) 58.78 Forfeited - - Non-vested balance as of June 30, 2018 56 $ 75.47 Six months ended June 30, 2017 Shares (000s) Weighted Average Grant Date Fair Value Non-vested balance as of December 31, 2016 34 $ 61.06 Granted 16 93.85 Vested - - Forfeited (7 ) 69.18 Non-vested balance as of June 30, 2017 43 $ 72.26 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
INVENTORIES [Abstract] | |
Inventories | Inventories at June 30, 2018 and December 31, 2017 consisted of the following: June 30, 2018 December 31, 2017 Raw materials $ 25,690 $ 20,520 Work in progress 3,047 6,308 Finished goods 41,334 33,868 Total inventories $ 70,071 $ 60,696 |
PROPERTY, PLANT AND EQUIPMENT (
PROPERTY, PLANT AND EQUIPMENT (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
PROPERTY, PLANT AND EQUIPMENT [Abstract] | |
Property, Plant and Equipment | Property, plant and equipment at June 30, 2018 and December 31, 2017 are summarized as follows: June 30, 2018 December 31, 2017 Land $ 6,173 $ 7,262 Building 64,112 63,224 Equipment 205,889 201,341 Construction in progress 12,846 13,860 289,020 285,687 Less: accumulated depreciation 104,253 95,894 Property, plant and equipment, net $ 184,767 $ 189,793 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
INTANGIBLE ASSETS [Abstract] | |
Intangible Assets with Finite Lives | Identifiable intangible assets with finite lives at June 30, 2018 and December 31, 2017 are summarized as follows: Amortization Period (in years) Gross Carrying Amount at 6/30/18 Accumulated Amortization at 6/30/18 Gross Carrying Amount at 12/31/17 Accumulated Amortization at 12/31/17 Customer relationships & lists 10 $ 190,032 $ 114,007 $ 190,061 $ 105,573 Trademarks & trade names 5-17 40,630 14,894 40,630 12,895 Developed technology 5 13,338 7,270 13,338 5,936 Other 3-18 13,749 5,705 13,466 5,018 $ 257,749 $ 141,876 $ 257,495 $ 129,422 |
NET EARNINGS PER SHARE (Tables)
NET EARNINGS PER SHARE (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
NET EARNINGS PER SHARE [Abstract] | |
Reconciliation of the Net Earnings and Shares Used in Calculating Basic and Diluted Net Earnings Per Share | The following presents a reconciliation of the net earnings and shares used in calculating basic and diluted net earnings per share: Three months ended June 30, 2018 Net Earnings (Numerator) Number of Shares (Denominator) Per Share Amount Basic EPS – Net earnings and weighted average common shares outstanding $ 19,679 32,077,353 $ .61 Effect of dilutive securities – stock options, restricted stock, and performance shares 360,366 Diluted EPS – Net earnings and weighted average common shares outstanding and effect of stock options, restricted stock, and performance shares $ 19,679 32,437,719 $ .61 Three months ended June 30, 2017 Net Earnings (Numerator) Number of Shares (Denominator) Per Share Amount Basic EPS – Net earnings and weighted average common shares outstanding $ 16,536 31,798,773 $ .52 Effect of dilutive securities – stock options, restricted stock, and performance shares 403,782 Diluted EPS – Net earnings and weighted average common shares outstanding and effect of stock options, restricted stock, and performance shares $ 16,536 32,202,555 $ .51 Six months ended June 30, 2018 Net Earnings (Numerator) Number of Shares (Denominator) Per Share Amount Basic EPS – Net earnings and weighted average common shares outstanding $ 39,025 32,031,342 $ 1.22 Effect of dilutive securities – stock options, restricted stock, and performance shares 346,324 Diluted EPS – Net earnings and weighted average common shares outstanding and effect of stock options, restricted stock, and performance shares $ 39,025 32,377,666 $ 1.21 Six months ended June 30, 2017 Net Earnings (Numerator) Number of Shares (Denominator) Per Share Amount Basic EPS – Net earnings and weighted average common shares outstanding $ 32,053 31,752,489 $ 1.01 Effect of dilutive securities – stock options, restricted stock, and performance shares 442,563 Diluted EPS – Net earnings and weighted average common shares outstanding and effect of stock options, restricted stock, and performance shares $ 32,053 32,195,052 $ 1.00 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
SEGMENT INFORMATION [Abstract] | |
Segment Reporting Information, by Segment | Business Segment Assets: June 30, 2018 December 31, 2017 Human Nutrition & Health $ 718,103 $ 719,010 Animal Nutrition & Health 111,240 118,418 Specialty Products Industrial Products 60,375 28,571 63,141 18,471 Other Unallocated 71,178 44,596 Total $ 989,467 $ 963,636 Depreciation/Amortization: Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Human Nutrition & Health $ 8,384 $ 8,196 $ 16,916 $ 16,311 Animal Nutrition & Health 1,294 1,145 2,599 3,034 Specialty Products 1,010 1,023 2,020 2,039 Industrial Products 180 264 351 453 Total $ 10,868 $ 10,628 $ 21,886 $ 21,837 Capital Expenditures: Six Months Ended June 30, 2018 2017 Human Nutrition & Health $ 4,091 $ 8,594 Animal Nutrition & Health 1,763 1,403 Specialty Products 1,202 411 Industrial Products 644 411 Total $ 7,700 $ 10,819 Business Segment Net Sales: Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Human Nutrition & Health $ 85,013 $ 78,031 $ 168,076 $ 151,158 Animal Nutrition & Health 42,036 37,048 88,177 75,126 Specialty Products 22,864 20,759 40,604 39,549 Industrial Products 13,774 11,244 28,240 18,977 Total $ 163,687 $ 147,082 $ 325,097 $ 284,810 Business Segment Earnings Before Income Taxes: Three Months Ended Six Months Ended June 30, June 30, 2018 2017 2018 2017 Human Nutrition & Health $ 10,066 $ 11,320 $ 23,069 $ 21,516 Animal Nutrition & Health 7,113 3,689 14,597 9,065 Specialty Products 8,679 8,055 13,814 14,518 Industrial Products 2,654 1,579 5,133 2,301 Transaction and integration costs (893 ) (1,899 ) (1,582 ) (1,953 ) Indemnification settlement - 2,087 - 2,087 Interest and other income (expense) (2,558 ) (2,271 ) (4,793 ) (4,265 ) Total $ 25,061 $ 22,560 $ 50,238 $ 43,269 |
REVENUE (Tables)
REVENUE (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
REVENUE [Abstract] | |
Disaggregated Revenue | The following table presents our revenues disaggregated by revenue source (in thousands, unaudited). Sales and usage-based taxes are excluded from revenues. Three Months Ended Six Months Ended June 30, June 30, 2018 2017 2018 2017 Product Sales $ 149,052 $ 133,149 $ 297,834 $ 257,772 Co-manufacturing 11,830 11,210 20,669 21,309 Bill and Hold 1,555 1,401 2,844 2,384 Consignment 333 594 1,378 1,237 Product Sales Revenue 162,770 146,354 322,725 282,702 Royalty Revenue 917 728 2,372 2,108 Total Revenue $ 163,687 $ 147,082 $ 325,097 $ 284,810 The following table presents our revenues disaggregated by geography, based on the billing addresses of our customers (in thousands, unaudited): Three Months Ended Six Months Ended June 30, June 30, 2018 2017 2018 2017 Domestic Revenue $ 125,019 $ 113,227 $ 245,687 $ 219,527 Foreign Revenue 38,668 33,855 79,410 65,283 Total Revenue $ 163,687 $ 147,082 $ 325,097 $ 284,810 |
SUPPLEMENTAL CASH FLOW INFORM35
SUPPLEMENTAL CASH FLOW INFORMATION (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
SUPPLEMENTAL CASH FLOW INFORMATION [Abstract] | |
Supplemental Cash Flow Information | Cash paid during the six months ended June 30, 2018 and 2017 for income taxes and interest is as follows: Six Months Ended June 30, 2018 2017 Income taxes $ 12,830 $ 14,508 Interest $ 3,576 $ 3,436 |
ACCUMULATED OTHER COMPREHENSI36
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) [Abstract] | |
Changes in Accumulated Other Comprehensive Income (Loss) | The changes in accumulated other comprehensive income (loss) were as follows: Three Months Ended June 30, 2018 2017 Net foreign currency translation adjustment $ (2,911 ) $ 2,697 Net change in postretirement benefit plan (see Note 15 for further information) Amortization of prior service cost 17 19 Amortization of gain (1 ) (4 ) Total before tax 16 15 Tax - (4 ) Net of tax 16 11 Total other comprehensive (loss)/income $ (2,895 ) $ 2,708 Six Months Ended June 30, 2018 2017 Net foreign currency translation adjustment $ (1,548 ) $ 3,238 Net change in postretirement benefit plan (see Note 15 for further information) Amortization of prior service cost 35 38 Amortization of gain (2 ) (8 ) Total before tax 33 30 Tax (4 ) (9 ) Net of tax 29 21 Total other comprehensive (loss)/income $ (1,519 ) $ 3,259 |
Accumulated Other Comprehensive Loss | Accumulated other comprehensive loss at June 30, 2018 and December 31, 2017 consisted of the following: Foreign currency translation adjustment Postretirement benefit plan Total Balance December 31, 2017 $ (1,303 ) $ (339 ) $ (1,642 ) Other comprehensive loss (1,548 ) 29 (1,519 ) Balance June 30, 2018 $ (2,851 ) $ (310 ) $ (3,161 ) |
EMPLOYEE BENEFIT PLANS (Tables)
EMPLOYEE BENEFIT PLANS (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
EMPLOYEE BENEFIT PLANS [Abstract] | |
Net Periodic Benefit Cost | Net periodic benefit costs for such retirement medical plan were as follows: Six Months Ended June 30, 2018 2017 Service cost $ 39 $ 34 Interest cost 22 23 Amortization of prior service cost 35 38 Amortization of gain (2 ) (8 ) Net periodic benefit cost $ 94 $ 87 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
COMMITMENTS AND CONTINGENCIES [Abstract] | |
Aggregate Future Minimum Rental Payments Required under Non-Cancelable Operating Leases | Aggregate future minimum rental payments required under all non-cancelable operating leases at June 30, 2018 are as follows: Year July 1, 2018 to December 31, 2018 $ 1,555 2019 3,156 2020 2,785 2021 2,342 2022 1,611 2023 1,220 Thereafter 4,369 Total minimum lease payments $ 17,038 |
ACQUISITIONS (Details)
ACQUISITIONS (Details) € in Thousands, $ in Thousands | Jun. 01, 2017USD ($) | Mar. 24, 2017EUR (€) | Sep. 30, 2017USD ($) | Jun. 30, 2018USD ($) | Jun. 30, 2017USD ($) | Jun. 30, 2018USD ($) | Jun. 30, 2017USD ($) | Jun. 30, 2018EUR (€) | Dec. 31, 2017USD ($) |
Estimated fair values of the assets acquired and liabilities assumed [Abstract] | |||||||||
Goodwill | $ 441,554 | $ 441,554 | $ 441,361 | ||||||
Transaction and integration related costs | 893 | $ 1,899 | 1,582 | $ 1,953 | |||||
Chol-Mix Kft [Member] | |||||||||
Acquisitions [Abstract] | |||||||||
Purchase price of acquisition | € | € 1,500 | ||||||||
Cumulative amount of payment made for purchase. | 1,230 | 1,230 | € 1,150 | ||||||
Remaining payment to be made for purchase | 409 | 409 | € 350 | ||||||
Estimated fair values of the assets acquired and liabilities assumed [Abstract] | |||||||||
Goodwill | 404 | 404 | |||||||
Innovative Food Processors, Inc [Member] | |||||||||
Acquisitions [Abstract] | |||||||||
Percentage owned of the "Acquisition" | 100.00% | ||||||||
Payment made on acquisition date | $ 22,975 | ||||||||
Payments made to true-up working capital | $ 635 | ||||||||
Amount paid to former shareholders | 16,161 | ||||||||
Working capital acquired | 5,065 | ||||||||
Estimated fair values of the assets acquired and liabilities assumed [Abstract] | |||||||||
Cash and cash equivalents | 5,065 | ||||||||
Accounts receivable | 2,860 | ||||||||
Inventories | 2,537 | ||||||||
Prepaid expenses | 186 | ||||||||
Property, plant and equipment | 12,219 | ||||||||
Goodwill | 1,340 | ||||||||
Trade accounts payable | (844) | ||||||||
Accrued expenses | (1,416) | ||||||||
Bank debt | (2,384) | ||||||||
Deferred income taxes | (3,871) | ||||||||
Amount paid to shareholders | 21,226 | ||||||||
Bank debt paid on purchase date | 2,384 | ||||||||
Total amount paid | 23,610 | ||||||||
Innovative Food Processors, Inc [Member] | Selling, General and Administrative Expenses [Member] | |||||||||
Estimated fair values of the assets acquired and liabilities assumed [Abstract] | |||||||||
Transaction and integration related costs | $ 893 | $ 1,582 | |||||||
Innovative Food Processors, Inc [Member] | Customer Relationships [Member] | |||||||||
Estimated fair values of the assets acquired and liabilities assumed [Abstract] | |||||||||
Intangible assets | 2,942 | ||||||||
Useful life of intangible assets acquired | 10 years | ||||||||
Innovative Food Processors, Inc [Member] | Developed Technology [Member] | |||||||||
Estimated fair values of the assets acquired and liabilities assumed [Abstract] | |||||||||
Intangible assets | 1,078 | ||||||||
Useful life of intangible assets acquired | 5 years | ||||||||
Innovative Food Processors, Inc [Member] | Trademark & Trade Name [Member] | |||||||||
Estimated fair values of the assets acquired and liabilities assumed [Abstract] | |||||||||
Intangible assets | 1,388 | ||||||||
Innovative Food Processors, Inc [Member] | Trademark [Member] | |||||||||
Estimated fair values of the assets acquired and liabilities assumed [Abstract] | |||||||||
Useful life of intangible assets acquired | 10 years | ||||||||
Innovative Food Processors, Inc [Member] | Trade Name [Member] | |||||||||
Estimated fair values of the assets acquired and liabilities assumed [Abstract] | |||||||||
Useful life of intangible assets acquired | 5 years | ||||||||
Innovative Food Processors, Inc [Member] | Covenant Not to Compete [Member] | |||||||||
Estimated fair values of the assets acquired and liabilities assumed [Abstract] | |||||||||
Intangible assets | $ 126 | ||||||||
Useful life of intangible assets acquired | 3 years |
STOCKHOLDERS' EQUITY, Stock-Bas
STOCKHOLDERS' EQUITY, Stock-Based Compensation (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Stock-based Compensation [Abstract] | ||||
Impact of stock-based compensation cost on net earnings | $ (1,280) | $ (663) | $ (2,657) | $ (1,830) |
Share-based Compensation [Abstract] | ||||
Shares available for future awards (in shares) | 1,372,804 | 1,372,804 | ||
Stock Options [Member] | ||||
Share-based Compensation [Abstract] | ||||
Vesting period | 3 years | |||
Restricted Stock [Member] | Employee [Member] | ||||
Share-based Compensation [Abstract] | ||||
Vesting period | 4 years | |||
Restricted Stock [Member] | Non-employee Director [Member] | ||||
Share-based Compensation [Abstract] | ||||
Vesting period | 4 years | |||
Performance Shares [Member] | Employee [Member] | ||||
Share-based Compensation [Abstract] | ||||
Vesting period | 3 years | |||
Non-Qualified Plan [Member] | ||||
Share-based Compensation [Abstract] | ||||
Expiration period of options granted | 10 years | |||
ISO Plan [Member] | ||||
Share-based Compensation [Abstract] | ||||
Expiration period of options granted | 10 years | |||
Cost of Sales [Member] | ||||
Stock-based Compensation [Abstract] | ||||
Stock-based compensation cost | $ 242 | (167) | $ 487 | 144 |
Operating Expenses [Member] | ||||
Stock-based Compensation [Abstract] | ||||
Stock-based compensation cost | $ 1,424 | $ 1,210 | $ 2,972 | $ 2,740 |
STOCKHOLDERS' EQUITY, Stock Opt
STOCKHOLDERS' EQUITY, Stock Options (Details) - Stock Options [Member] - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Stock Option Activity [Abstract] | ||||
Outstanding at beginning of period (in shares) | 946 | 1,066 | ||
Granted (in shares) | 148 | 220 | ||
Exercised (in shares) | (152) | (150) | ||
Forfeited (in shares) | (2) | (39) | ||
Cancelled (in shares) | (1) | (19) | ||
Outstanding at end of period (in shares) | 939 | 1,078 | 939 | 1,078 |
Exercisable at end of period (in shares) | 534 | 603 | 534 | 603 |
Weighted Average Exercise Price [Abstract] | ||||
Outstanding at beginning of period (in dollars per share) | $ 55.44 | $ 45.32 | ||
Granted (in dollars per share) | 74.57 | 85.23 | ||
Exercised (in dollars per share) | 43.32 | 32.54 | ||
Forfeited (in dollars per share) | 75.44 | 70.57 | ||
Cancelled (in dollars per share) | 25.39 | 58.61 | ||
Outstanding at end of period (in dollars per share) | $ 60.42 | $ 54.10 | 60.42 | 54.10 |
Exercisable, end of period (in dollars per share) | $ 49.19 | $ 40.83 | $ 49.19 | $ 40.83 |
Aggregate intrinsic value, outstanding, beginning of period | $ 24,714 | $ 41,161 | ||
Aggregate intrinsic value, outstanding, end of period | $ 35,409 | $ 27,001 | 35,409 | 27,001 |
Aggregate intrinsic value, exercisable, end of period | $ 26,142 | $ 22,249 | $ 26,142 | $ 22,249 |
Weighted average remaining contractual term, outstanding | 6 years 7 months 6 days | 6 years 7 months 6 days | ||
Weighted average remaining contractual term, exercisable | 5 years 3 months 18 days | 4 years 8 months 12 days | ||
Weighted Average Assumptions [Abstract] | ||||
Dividend yield | 0.60% | 0.50% | ||
Expected volatility | 27.00% | 30.00% | ||
Risk-free interest rate | 2.60% | 1.80% | ||
Expected term | 4 years 4 months 24 days | 4 years 7 months 6 days | ||
Weighted-average fair value of options granted (in dollars per share) | $ 0 | $ 20.54 | $ 18.62 | $ 23.21 |
Total intrinsic value of stock options exercised | $ 5,375 | $ 2,375 | $ 7,200 | $ 7,596 |
STOCKHOLDERS' EQUITY, Restricte
STOCKHOLDERS' EQUITY, Restricted Stock and Performance Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Weighted Average Assumptions [Abstract] | ||
Unrecognized compensation cost related to non-vested shares | $ 11,860 | $ 10,754 |
Weighted-average period of recognition for unrecognized compensation cost | 2 years | |
Estimated share-based compensation expense for current fiscal year | $ 6,700 | |
Restricted Stock [Member] | ||
Non-vested restricted stock [Roll Forward] | ||
Non-vested balance as of beginning of period (in shares) | 66 | 102 |
Granted (in shares) | 37 | 9 |
Vested (in shares) | (17) | (41) |
Forfeited (in shares) | 0 | (4) |
Non-vested balance as of end of period (in shares) | 86 | 66 |
Weighted average grant date fair value [Abstract] | ||
Non-vested balance as of beginning of period (in dollars per share) | $ 65.66 | $ 54.18 |
Granted (in dollars per share) | 75.19 | 85.40 |
Vested (in dollars per share) | 57.65 | 50.07 |
Forfeited (in dollars per share) | 0 | 55.45 |
Non-vested balance as of end of period (in dollars per share) | $ 71.40 | $ 61.05 |
Performance Shares [Member] | ||
Non-vested restricted stock [Roll Forward] | ||
Non-vested balance as of beginning of period (in shares) | 39 | 34 |
Granted (in shares) | 32 | 16 |
Vested (in shares) | (15) | 0 |
Forfeited (in shares) | 0 | (7) |
Non-vested balance as of end of period (in shares) | 56 | 43 |
Weighted average grant date fair value [Abstract] | ||
Non-vested balance as of beginning of period (in dollars per share) | $ 72.62 | $ 61.06 |
Granted (in dollars per share) | 71.27 | 93.85 |
Vested (in dollars per share) | 58.78 | 0 |
Forfeited (in dollars per share) | 0 | 69.18 |
Non-vested balance as of end of period (in dollars per share) | $ 75.47 | $ 72.26 |
Weighted Average Assumptions [Abstract] | ||
Risk-free interest rate | 2.40% | 1.50% |
Dividend yield | 0.50% | 0.60% |
Expected volatility | 27.00% | 32.00% |
Initial TSR | (10.50%) | 8.20% |
Cliff vest | 100.00% |
STOCKHOLDERS' EQUITY, Repurchas
STOCKHOLDERS' EQUITY, Repurchase of Common Stock (Details) - $ / shares | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Repurchase of common stock [Abstract] | |||
Number of shares authorized to be repurchased (in shares) | 3,763,038 | ||
Aggregate number of shares repurchased since inception (in shares) | 2,188,879 | ||
Number of shares remaining in treasury (in shares) | 4,408 | 0 | |
Number of shares acquired under stock repurchase plan and subsequently reissued (in shares) | 14,862 | 21,099 | |
Treasury stock acquired, average cost (in dollars per share) | $ 82.22 | $ 82.53 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
INVENTORIES [Abstract] | ||
Raw materials | $ 25,690 | $ 20,520 |
Work in progress | 3,047 | 6,308 |
Finished goods | 41,334 | 33,868 |
Total inventories | $ 70,071 | $ 60,696 |
PROPERTY, PLANT AND EQUIPMENT45
PROPERTY, PLANT AND EQUIPMENT (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Property, plant and equipment [Abstract] | ||
Property, plant and equipment, gross | $ 289,020 | $ 285,687 |
Less: accumulated depreciation | 104,253 | 95,894 |
Property, plant and equipment, net | 184,767 | 189,793 |
Land [Member] | ||
Property, plant and equipment [Abstract] | ||
Property, plant and equipment, gross | 6,173 | 7,262 |
Building [Member] | ||
Property, plant and equipment [Abstract] | ||
Property, plant and equipment, gross | 64,112 | 63,224 |
Equipment [Member] | ||
Property, plant and equipment [Abstract] | ||
Property, plant and equipment, gross | 205,889 | 201,341 |
Construction in Progress [Member] | ||
Property, plant and equipment [Abstract] | ||
Property, plant and equipment, gross | $ 12,846 | $ 13,860 |
INTANGIBLE ASSETS (Details)
INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2018 | Dec. 31, 2017 | |
INTANGIBLE ASSETS [Abstract] | ||
Goodwill | $ 441,554 | $ 441,361 |
Identifiable intangible assets [Abstract] | ||
Gross carrying amount | 257,749 | 257,495 |
Accumulated amortization | 141,876 | 129,422 |
Amortization of identifiable finite-lived intangible assets [Abstract] | ||
Amortization of identifiable intangible assets | 12,472 | |
Finite-lived intangible assets, future amortization expense [Abstract] | ||
Remainder of 2018 | 12,282 | |
2,019 | 22,652 | |
2,020 | 20,618 | |
2,021 | 17,411 | |
2,022 | 15,843 | |
2,023 | 14,522 | |
Indefinite-lived intangible assets | $ 0 | |
Customer Relationships & Lists [Member] | ||
Identifiable intangible assets [Abstract] | ||
Amortization period | 10 years | |
Gross carrying amount | $ 190,032 | 190,061 |
Accumulated amortization | 114,007 | 105,573 |
Trademarks & Trade Names [Member] | ||
Identifiable intangible assets [Abstract] | ||
Gross carrying amount | 40,630 | 40,630 |
Accumulated amortization | $ 14,894 | 12,895 |
Trademarks & Trade Names [Member] | Minimum [Member] | ||
Identifiable intangible assets [Abstract] | ||
Amortization period | 5 years | |
Trademarks & Trade Names [Member] | Maximum [Member] | ||
Identifiable intangible assets [Abstract] | ||
Amortization period | 17 years | |
Developed Technology [Member] | ||
Identifiable intangible assets [Abstract] | ||
Amortization period | 5 years | |
Gross carrying amount | $ 13,338 | 13,338 |
Accumulated amortization | 7,270 | 5,936 |
Other [Member] | ||
Identifiable intangible assets [Abstract] | ||
Gross carrying amount | 13,749 | 13,466 |
Accumulated amortization | $ 5,705 | $ 5,018 |
Other [Member] | Minimum [Member] | ||
Identifiable intangible assets [Abstract] | ||
Amortization period | 3 years | |
Other [Member] | Maximum [Member] | ||
Identifiable intangible assets [Abstract] | ||
Amortization period | 18 years |
EQUITY-METHOD INVESTMENT (Detai
EQUITY-METHOD INVESTMENT (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2018USD ($) | Jun. 30, 2017USD ($) | Jun. 30, 2018USD ($)Vote | Jun. 30, 2017USD ($) | Dec. 31, 2017USD ($) | |
Equity method investment [Abstract] | |||||
Percentage of production offtake | 66.66% | ||||
Percentage of operating expenses to be absorbed | 66.66% | ||||
St. Gabriel CC Company, LLC [Member] | |||||
Equity method investment [Abstract] | |||||
Ownership percentage in joint venture | 66.66% | 66.66% | |||
Number of votes | Vote | 2 | ||||
Loss relating to joint venture's expenses | $ | $ (141) | $ (136) | $ (280) | $ (270) | |
Carrying value of joint venture | $ | $ 4,524 | $ 4,524 | $ 4,804 | ||
St. Gabriel CC Company, LLC [Member] | Eastman Chemical Company [Member] | |||||
Equity method investment [Abstract] | |||||
Ownership percentage in joint venture | 33.34% | 33.34% | |||
Number of votes | Vote | 2 |
REVOLVING LOAN (Details)
REVOLVING LOAN (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 27, 2018 | May 07, 2014 | |
Loan agreement [Abstract] | ||||||
Capitalized costs net of accumulated amortization | $ 1,369 | $ 766 | $ 1,369 | $ 766 | ||
Write off of deferred financing costs | 363 | |||||
Amortization expense pertaining to capitalized costs | $ 431 | $ 120 | $ 540 | $ 244 | ||
Credit Agreement [Member] | ||||||
Loan agreement [Abstract] | ||||||
Period for senior secured credit agreement | 5 years | |||||
Maximum borrowing capacity | $ 500,000 | |||||
Maturity date | Jun. 27, 2023 | |||||
Interest rate on credit agreement | 3.228% | 3.228% | ||||
Commitment fee percentage | 0.175% | |||||
Unused portion of revolving loan | $ 289,250 | $ 289,250 | ||||
Credit Agreement [Member] | Minimum [Member] | ||||||
Loan agreement [Abstract] | ||||||
Commitment fee percentage | 0.15% | |||||
Credit Agreement [Member] | Maximum [Member] | ||||||
Loan agreement [Abstract] | ||||||
Commitment fee percentage | 0.275% | |||||
Term Loan A [Member] | ||||||
Loan agreement [Abstract] | ||||||
Maximum borrowing capacity | $ 350,000 | |||||
Payment for outstanding balance | $ 210,750 | |||||
Revolving Credit Facility [Member] | ||||||
Loan agreement [Abstract] | ||||||
Maximum borrowing capacity | $ 100,000 |
NET EARNINGS PER SHARE (Details
NET EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Net Earnings (Numerator) [Abstract] | ||||
Basic EPS - Net earnings | $ 19,679 | $ 16,536 | $ 39,025 | $ 32,053 |
Diluted EPS - Net earnings | $ 19,679 | $ 16,536 | $ 39,025 | $ 32,053 |
Number of Shares (Denominator) [Abstract] | ||||
Basic EPS - weighted average common shares outstanding (in shares) | 32,077,353 | 31,798,773 | 32,031,342 | 31,752,489 |
Effect of dilutive securities - stock options, restricted stock, and performance shares (in shares) | 360,366 | 403,782 | 346,324 | 442,563 |
Diluted EPS - weighted average common shares outstanding and effect of stock options, restricted stock, and performance shares (in shares) | 32,437,719 | 32,202,555 | 32,377,666 | 32,195,052 |
Per Share Amount [Abstract] | ||||
Basic EPS - Net earnings (in dollars per share) | $ 0.61 | $ 0.52 | $ 1.22 | $ 1.01 |
Diluted EPS - Net earnings (in dollars per share) | $ 0.61 | $ 0.51 | $ 1.21 | $ 1 |
Stock Options [Member] | ||||
Net earnings per share [Abstract] | ||||
Anti-dilutive stock options outstanding, excluded from diluted earnings per share calculation (in shares) | 190,590 | 230,108 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
INCOME TAXES [Abstract] | |||||
Effective tax rate | 21.50% | 26.70% | 22.30% | 25.90% | |
Federal corporate tax rate | 21.00% | 35.00% | |||
Cap on deductibility on compensation of individual | $ 1,000 | ||||
Unrecognized tax benefits | $ 5,285 | 5,285 | $ 4,781 | ||
Accrued interest and penalties | $ 1,931 | $ 1,931 | $ 1,882 |
SEGMENT INFORMATION (Details)
SEGMENT INFORMATION (Details) | 6 Months Ended |
Jun. 30, 2018Facility | |
SEGMENT INFORMATION [Abstract] | |
Number of filling facilities | 2 |
Percentage decrease of chlorides released in environment | 75.00% |
SEGMENT INFORMATION, Business S
SEGMENT INFORMATION, Business Segment Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Segment information [Abstract] | ||
Assets | $ 989,467 | $ 963,636 |
Human Nutrition & Health [Member] | Reportable Segments [Member] | ||
Segment information [Abstract] | ||
Assets | 718,103 | 719,010 |
Animal Nutrition & Health [Member] | Reportable Segments [Member] | ||
Segment information [Abstract] | ||
Assets | 111,240 | 118,418 |
Specialty Products [Member] | Reportable Segments [Member] | ||
Segment information [Abstract] | ||
Assets | 60,375 | 63,141 |
Industrial Products [Member] | Reportable Segments [Member] | ||
Segment information [Abstract] | ||
Assets | 28,571 | 18,471 |
Other Unallocated [Member] | ||
Segment information [Abstract] | ||
Assets | $ 71,178 | $ 44,596 |
SEGMENT INFORMATION, Depreciati
SEGMENT INFORMATION, Depreciation Amortization (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Segment information [Abstract] | ||||
Depreciation/Amortization | $ 10,868 | $ 10,628 | $ 21,886 | $ 21,837 |
Human Nutrition & Health [Member] | Reportable Segments [Member] | ||||
Segment information [Abstract] | ||||
Depreciation/Amortization | 8,384 | 8,196 | 16,916 | 16,311 |
Animal Nutrition & Health [Member] | Reportable Segments [Member] | ||||
Segment information [Abstract] | ||||
Depreciation/Amortization | 1,294 | 1,145 | 2,599 | 3,034 |
Specialty Products [Member] | Reportable Segments [Member] | ||||
Segment information [Abstract] | ||||
Depreciation/Amortization | 1,010 | 1,023 | 2,020 | 2,039 |
Industrial Products [Member] | Reportable Segments [Member] | ||||
Segment information [Abstract] | ||||
Depreciation/Amortization | $ 180 | $ 264 | $ 351 | $ 453 |
SEGMENT INFORMATION, Capital Ex
SEGMENT INFORMATION, Capital Expenditures (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Segment information [Abstract] | ||
Capital expenditures | $ 7,700 | $ 10,819 |
Human Nutrition & Health [Member] | Reportable Segments [Member] | ||
Segment information [Abstract] | ||
Capital expenditures | 4,091 | 8,594 |
Animal Nutrition & Health [Member] | Reportable Segments [Member] | ||
Segment information [Abstract] | ||
Capital expenditures | 1,763 | 1,403 |
Specialty Products [Member] | Reportable Segments [Member] | ||
Segment information [Abstract] | ||
Capital expenditures | 1,202 | 411 |
Industrial Products [Member] | Reportable Segments [Member] | ||
Segment information [Abstract] | ||
Capital expenditures | $ 644 | $ 411 |
SEGMENT INFORMATION, Business55
SEGMENT INFORMATION, Business Segment Net Sales (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Segment information [Abstract] | ||||
Net sales | $ 163,687 | $ 147,082 | $ 325,097 | $ 284,810 |
Human Nutrition & Health [Member] | Reportable Segments [Member] | ||||
Segment information [Abstract] | ||||
Net sales | 85,013 | 78,031 | 168,076 | 151,158 |
Animal Nutrition & Health [Member] | Reportable Segments [Member] | ||||
Segment information [Abstract] | ||||
Net sales | 42,036 | 37,048 | 88,177 | 75,126 |
Specialty Products [Member] | Reportable Segments [Member] | ||||
Segment information [Abstract] | ||||
Net sales | 22,864 | 20,759 | 40,604 | 39,549 |
Industrial Products [Member] | Reportable Segments [Member] | ||||
Segment information [Abstract] | ||||
Net sales | $ 13,774 | $ 11,244 | $ 28,240 | $ 18,977 |
SEGMENT INFORMATION, Business56
SEGMENT INFORMATION, Business Segment Earnings Before Income Tax (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Segment information [Abstract] | ||||
Earnings before income taxes | $ 25,061 | $ 22,560 | $ 50,238 | $ 43,269 |
Transaction and integration costs | (893) | (1,899) | (1,582) | (1,953) |
Indemnification settlement | 0 | 2,087 | 0 | 2,087 |
Interest and other income (expense) | (2,558) | (2,271) | (4,793) | (4,265) |
Human Nutrition & Health [Member] | Reportable Segments [Member] | ||||
Segment information [Abstract] | ||||
Earnings before income taxes | 10,066 | 11,320 | 23,069 | 21,516 |
Animal Nutrition & Health [Member] | Reportable Segments [Member] | ||||
Segment information [Abstract] | ||||
Earnings before income taxes | 7,113 | 3,689 | 14,597 | 9,065 |
Specialty Products [Member] | Reportable Segments [Member] | ||||
Segment information [Abstract] | ||||
Earnings before income taxes | 8,679 | 8,055 | 13,814 | 14,518 |
Industrial Products [Member] | Reportable Segments [Member] | ||||
Segment information [Abstract] | ||||
Earnings before income taxes | $ 2,654 | $ 1,579 | $ 5,133 | $ 2,301 |
REVENUE (Details)
REVENUE (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Revenue [Abstract] | ||||
Increase (decrease) in revenue | $ 163,687 | $ 147,082 | $ 325,097 | $ 284,810 |
Impact of Adoption [Member] | ASC 606 [Member] | ||||
Revenue [Abstract] | ||||
Increase (decrease) in revenue | $ (108) | $ 351 |
REVENUE, Revenue Recognition (D
REVENUE, Revenue Recognition (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018USD ($) | Jun. 30, 2017USD ($) | Jun. 30, 2018USD ($)Substream | Jun. 30, 2017USD ($) | |
Revenue [Abstract] | ||||
Total revenue | $ 163,687 | $ 147,082 | $ 325,097 | $ 284,810 |
Domestic Revenue [Member] | ||||
Revenue [Abstract] | ||||
Total revenue | 125,019 | 113,227 | 245,687 | 219,527 |
Foreign Revenue [Member] | ||||
Revenue [Abstract] | ||||
Total revenue | 38,668 | 33,855 | 79,410 | 65,283 |
Product Sales Revenue [Member] | ||||
Revenue [Abstract] | ||||
Total revenue | 162,770 | 146,354 | $ 322,725 | 282,702 |
Number of sub-streams of revenue | Substream | 4 | |||
Product Sales [Member] | ||||
Revenue [Abstract] | ||||
Total revenue | 149,052 | 133,149 | $ 297,834 | 257,772 |
Co-manufacturing [Member] | ||||
Revenue [Abstract] | ||||
Total revenue | 11,830 | 11,210 | 20,669 | 21,309 |
Bill and Hold [Member] | ||||
Revenue [Abstract] | ||||
Total revenue | 1,555 | 1,401 | 2,844 | 2,384 |
Consignment [Member] | ||||
Revenue [Abstract] | ||||
Total revenue | 333 | 594 | 1,378 | 1,237 |
Royalty Revenue [Member] | ||||
Revenue [Abstract] | ||||
Total revenue | $ 917 | $ 728 | $ 2,372 | $ 2,108 |
SUPPLEMENTAL CASH FLOW INFORM59
SUPPLEMENTAL CASH FLOW INFORMATION (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Cash paid during the period [Abstract] | ||
Income taxes | $ 12,830 | $ 14,508 |
Interest | $ 3,576 | $ 3,436 |
ACCUMULATED OTHER COMPREHENSI60
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS), Changes in Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Changes in accumulated other comprehensive income (loss) [Abstract] | ||||
Net foreign currency translation adjustment | $ (2,911) | $ 2,697 | $ (1,548) | $ 3,238 |
Net change in postretirement benefit plan (see Note 15 for further information) | ||||
Amortization of prior service cost | 17 | 19 | 35 | 38 |
Amortization of gain | (1) | (4) | (2) | (8) |
Total before tax | 16 | 15 | 33 | 30 |
Tax | 0 | (4) | (4) | (9) |
Net of tax | 16 | 11 | 29 | 21 |
Other comprehensive (loss)/income | $ (2,895) | $ 2,708 | $ (1,519) | $ 3,259 |
ACCUMULATED OTHER COMPREHENSI61
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS), Components of Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Components of accumulated other comprehensive loss [Roll Forward] | ||||
Balance | $ 616,881 | |||
Other comprehensive loss | $ (2,895) | $ 2,708 | (1,519) | $ 3,259 |
Balance | 663,220 | 663,220 | ||
AOCI Attributable to Parent [Member] | ||||
Components of accumulated other comprehensive loss [Roll Forward] | ||||
Balance | (1,642) | |||
Balance | (3,161) | (3,161) | ||
Foreign Currency Translation Adjustment [Member] | ||||
Components of accumulated other comprehensive loss [Roll Forward] | ||||
Balance | (1,303) | |||
Other comprehensive loss | (1,548) | |||
Balance | (2,851) | (2,851) | ||
Postretirement Benefit Plan [Member] | ||||
Components of accumulated other comprehensive loss [Roll Forward] | ||||
Balance | (339) | |||
Other comprehensive loss | 29 | |||
Balance | $ (310) | $ (310) |
EMPLOYEE BENEFIT PLANS (Details
EMPLOYEE BENEFIT PLANS (Details) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2018USD ($)Plan | Jun. 30, 2017USD ($) | Dec. 31, 2017USD ($) | |
Defined benefit plan [Abstract] | |||
Number of defined benefit plans | Plan | 2 | ||
Defined Benefit Plan, Type [Extensible List] | us-gaap:DefinedBenefitPostretirementHealthCoverageMember | ||
Defined Benefit Plan, Funding Status [Extensible List] | us-gaap:UnfundedPlanMember | ||
Components of net periodic benefit cost [Abstract] | |||
Service cost | $ 39 | $ 34 | |
Interest cost | 22 | 23 | |
Amortization of prior service cost | 35 | 38 | |
Amortization of gain | (2) | (8) | |
Net periodic benefit cost | 94 | $ 87 | |
Amount recognized in consolidated balance sheet for benefit obligations (included in other long-term obligations) | 1,634 | $ 1,573 | |
Deferred compensation liability | 0 | ||
Maximum [Member] | |||
Components of net periodic benefit cost [Abstract] | |||
Historical cash payments for retirement medical plan claims per year | $ 100 |
COMMITMENTS AND CONTINGENCIES63
COMMITMENTS AND CONTINGENCIES (Details) $ in Thousands | 6 Months Ended | 12 Months Ended | ||||||||||||||
Jun. 30, 2018USD ($)Seller | Jun. 30, 2017USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Dec. 31, 2012USD ($) | Dec. 31, 2011USD ($) | Dec. 31, 2010USD ($) | Dec. 31, 2009USD ($) | Dec. 31, 2008USD ($) | Dec. 31, 2007USD ($) | Dec. 31, 2006USD ($) | Dec. 31, 2005USD ($) | Dec. 31, 2004USD ($) | |
COMMITMENTS AND CONTINGENCIES [Abstract] | ||||||||||||||||
Rent expense charged to operations | $ 1,655 | $ 1,613 | ||||||||||||||
Future minimum rental payments required under all non-cancelable operating leases [Abstract] | ||||||||||||||||
July 1, 2018 to December 31, 2018 | 1,555 | |||||||||||||||
2,019 | 3,156 | |||||||||||||||
2,020 | 2,785 | |||||||||||||||
2,021 | 2,342 | |||||||||||||||
2,022 | 1,611 | |||||||||||||||
2,023 | 1,220 | |||||||||||||||
Thereafter | 4,369 | |||||||||||||||
Total minimum lease payments | 17,038 | |||||||||||||||
Slate Hill, New York Site [Member] | Maximum [Member] | ||||||||||||||||
Environmental remediation costs [Abstract] | ||||||||||||||||
Annual monitoring costs | $ 5 | $ 5 | $ 5 | $ 5 | $ 5 | $ 5 | $ 5 | $ 5 | $ 5 | $ 5 | $ 5 | $ 5 | $ 5 | $ 5 | $ 5 | |
Verona, Missouri Facility [Member] | Dioxin Contamination [Member] | ||||||||||||||||
Environmental remediation costs [Abstract] | ||||||||||||||||
Number of sellers who have the benefit of certain contractual indemnification by the prior owner | Seller | 1 |
FAIR VALUE OF FINANCIAL INSTR64
FAIR VALUE OF FINANCIAL INSTRUMENTS (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Money Market Funds [Member] | Level 1 [Member] | ||
Fair value of financial instruments [Abstract] | ||
Cash and cash equivalents | $ 787 | $ 782 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - St. Gabriel CC Company, LLC [Member] - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Related party transactions [Abstract] | ||||
Finished goods received from related party | $ 5,588 | $ 4,498 | $ 11,624 | $ 9,182 |
Receivable from related party | 2,919 | 2,919 | ||
Payable to related party | 1,880 | 1,880 | ||
Related party receivables recorded in receivables | 193 | 193 | ||
Services Provided [Member] | ||||
Related party transactions [Abstract] | ||||
Revenues from related party | 1,083 | 844 | 2,010 | 1,722 |
Raw Materials Sold [Member] | ||||
Related party transactions [Abstract] | ||||
Revenues from related party | $ 8,451 | $ 5,533 | $ 15,729 | $ 9,882 |