Earnings call transcript Q4 2022

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Operator

Greetings and welcome to Balchem’s Fourth Quarter Year-End 2022 Earnings Conference Call. At this time all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded.

I would now like to turn the call over to Martin Bengtsson, Chief Financial Officer. you. Thank begin. may you

Martin Bengtsson

My good Ted this Thank results morning the CEO. call XX, Corporation and Officer Chief our hosting our and of for Chairman, conference for this XXXX. December ending call to me quarter Martin morning you, Bengtsson, you Financial is everyone. with joining Balchem name's Harris, Thank discuss and the President

risks Statements this made cause counsel, We XX-Q results time of commentary that today’s measures. to call considered the our our auditors our further and and details. forward-looking and in to forward-looking Form most include X-K SEC, in and are update read release Today’s advice will their financial for expectations reconciliation the to are statement. assumes XX-K, recent Balchem’s would these differ I identified materially no can that various prove including at in like and call The assurance facts non-GAAP expectations, not correct factors to company Following reports. could statements. the factors obligation reflected statements earnings refer give forward-looking from historical Please no in statements. forward-looking our

the and now call Ted will Chairman, to President turn I our CEO. Harris, over

Ted Harris

our Thanks, Martin. conference welcome Good morning, and to call.

of into almost Balchem. year few $XXX in XX% of over quarter, the strong year. business achieved Before minutes we last growing significant three another get to the we record a like for achieved Balchem year-over-year the XXXX record sales on I million, the segments. reflect for would all accomplishments some of Financially, Overall, with sales our was

and adjusted XX% the million, million, of record an EBITDA delivered adjusted year. of an also net increase increase of prior $XXX XX%, record We of from $XXX earnings

with Strategically, we investing generated we of year had million XXXX, same free strengthened our as Bioscience well. company capital very the acquisitions Nutrition. to support at and time of million addition, the Kappa in In projects cash continued our Bergstrom we $XX $XX a growth. In while good flow

our vitamin to solutions product of needs addition to ability undoubtedly or for will MSM of and the innovative forward. portfolio The the health nutritional enhance KX our and going world methylsulfonylmethane provide

continue science innovate, our of strengthen many products and and to market We expand supporting behind to the new products. bring

pleased are measures measures sales bringing our over coming percent that of our which new once metric development We the and the market. XX%, the the vitality are really that again products new five product showing indeed from years, innovation product we of that close last to was portfolio commercialized to

supporting or efforts including studies of KX science MSM XXXX were that bring minerals new to and market support nutrients. light, of existing increased that drive strengthen these vitamin our science new important exciting penetration supplementation the of and choline to number will and published A completed ultimately in augment

maternal have we an in intake by for long while groundbreaking. early truly through that are levels was has higher effect performance example, intake Cornell For published critical early cognition, infant childhood of choline suggested XXXX that maternal known cognitive choline a higher on enduring University study

of importance And of a Carolina published in published North to or a of study study also was XXXX the adequate the showed for having University identify status. the absorption DHA biomarker Cornell yet, Additionally, at separate not choline levels that choline completed. while

choline of supplementation individuals. important step results being the in for helping in need and an see XXXX. in here we hopefully, deficiency This be So identify will this study the published to

Supplements means a donors, MSM branded of join our and choline, BXX. Journal metal which or Sciences that of were for In enhancing Dietary December, around initiated Several published as the published conducted the KX important evidence studies compelling MSM at the science metal vitamin donor folate study the provides Medical as that then MSM, would of a MSM and University XXXX, vitamin Arkansas well. Opti in serves club

MSM is and study. a was a and both before evident nutritionally more it this Opti efficient donor, which makes So methyl even sulfur

published research and business, to Nutrition nutrients completed. for of and related around several as over KX others. focused companion, There immune muscle role the bone to our we drive help the studies animals. in and or portfolio go to and will believe side on continue market that expansion Animal initiated of vitamin We years, studies significant These the grow to science in vitamin our Health were are on cardiovascular science established beyond vitamin KX's invest health. health, studies also around more & more KX therapeutic coming outside recovery production continue health, dairy to the area among the of already advance Similarly,

in One supplementation State when in women choline done research was consumes dietary, quality. dairy in increase large calf then choline in colostrum colostrum of choline demonstrated and note colostrum. protected, colostrum ReaShure published demonstrated cattle. newborn showing was also May XX% colostrum power in Michigan University. effects her This human an increase ReaShure research branded transferred from without study the at of protected quality that yield would It it decrease as cows be with metabolites supplementing any flagship the choline a metabolites yields the to The in

Journal to and study ReaShure the birth effects Progyny supplementation at choline immunity maternal University and weaning. performance published of of from on of in Dairy the Science Another December Florida of the conducted in show

age. research the cows and method lactate with sustainability nutritious research to upcycling companion demonstrated our use animal were demonstrated to innovative born improved cost-effective there through our studies protein several of for ReaShure published by years co-products structure calcium microencapsulated and business, growth University supplemented increased had forming use our alginate. sodium health microencapsulation of greater status Within Auburn products. that related calves with our of two from for manufacturing pet products of survival line for The The a

November of fresh library foundation Imaginarium very believe portfolio well. products, that exist pathogenic was customer at place products pet Overall, combined studies portfolio XXXX, the in our to the and meat which attended we that of published form Pitcher the of University University in Pitcher unique salmonella Kansas from as of we the took the Research benefits State science as acids and These Starkey the successful excited value-added with microencapsulated demonstrated foods Assigilance Research with published control opportunities about market growing, keeps with grow will are technologies and Auburn our our the Laboratory. very for opportunities that that, of

plant Nutrition our encapsulation Additionally, capacity product A the growth nutrition resulting new Nutrition, equipment addition we accelerated important particular plant line our significant enable businesses. for manufacturing our XXXX, products, note which should well as and Human of in for additions and human and in in made investments in Animal capabilities plant the for nutrition region. European as

All organic help with we further growth new penetrate support will of these investments markets product our offerings. the our continued as

relating in an on our I both in goals well progress to am our progress to social which to to and toward by the provided happy and on company's significant Sustainability environmental, made XX%. Report we efforts or we to ESG our governance in fourth advance our goals. report its emissions greenhouse also way are We And reduce update gas released XXXX, initiatives. XXXX Balchem that, delivering XXXX our water usage on

organization, the of the on many main in social continue strategy, Balchem's are environmental, we stewards the and fully stakeholders. our health our details the governance report into our excellence, across objectives, sustainability frameworks. two initiatives needs and business The for of reporting operating accepted nutritional are integrated efforts ESG our alignment advancing with which innovative as focus widely solutions of remains and world unchanged, as providing we to strong with ways

America's one was efforts, result again of a the of for Newsweek Magazine named year. our once most Balchem consecutive recently companies by As responsible third

another increase announced year $X.XX strategically increase of XXth annual once for taking XX% dividend which increase reinforced dividend, double-digit we to year strong per both strategy. December, Balchem. dividend and the And marked lastly, commitment year-over-year. dividend, to growth share, of consecutive in longstanding our our financially again another recent our to most $X.XX an the This our from All-in-all,

XXXX was the Balchem a and impact was chain by experienced both team XXXX once strong and market rapidly deliver where Ukraine, strategically, of financially was significant year accelerating XXXX pandemic step-up followed in disruptions and to in war The unprecedented inflation. we the results able challenges, external again again models. and success our throughout all of our take once all. group resilience thank conditions, of of proving strength Thank to the the our business to and challenging stakeholders, would the opportunity broad this and to team you contributed these employees like our I and under who year. supply of us supported

of fourth fourth Now regarding quarter solid reported results. XXXX. This the morning we quarter

operations revenue our earnings were $XX up X% Our adjusted year the XX% from quarter. million up prior versus million $XXX of was and

decrease million operations earnings fourth million, flow earnings resulted income XX% $XX And a of basis. non-GAAP quarter On Cash $XX an a net share of on deliver $XX net basis. for of $X.XX of quarter $X.XX million per of cash increase an from X%, quarterly Our continued share were on of adjusted basis, our and per $XX a solid GAAP non-GAAP the flows cash free flows. earnings in fourth resulting we to million. were in

to financial each the for going segments. consolidated results the of fourth turn and for to now Martin business through the back the quarter to call go I'm results over company our

Martin Bengtsson

Ted. you, Thank

Ted As the Balchem. mentioned, overall, solid another fourth was quarter quarter for

prior million the year, health flat. $XXX specialty were growth product essentially net health Animal the delivered Nutrition while and sales higher in were our sales Nutrition Human quarter in than and fourth Our segments, we X.X% of and segment sales

X.X%. a negative weaker impact Foreign currency exchange of to driven our the primarily growth had sales by Euro,

to gross dollars $XX of of or $X XX percent X.X% quarter the gross XX.X% were of quarter, the was quarter margin down point million XXXX. compared margin prior million the fourth compared in A year. Our fourth up to basis in XX.X% sales

experience to fourth input the continue compared cost prior We to in inflation year. quarter

our our and on a these margin pleased through gross have the with fact on pricing up recover increases discussed grow gross grossing dollars. calls, the of impact but margin previous percentage, actions, we've the despite revenues that to continue we're to As we dilutive cost costs efforts

expenses quarter were acquisitions. $XX million due primarily in and year. million $XX Consolidated Bergstrom the incremental amortization from the was to and prior the increase to Kappa expenses operating compared as The for fourth

year quarter decrease adjusted prior earnings for the detailed $XX compared operations quarter. in the basis, GAAP $XX of were were our Earnings to X.X% as from On million, year a earnings this or an XX.X% the from of to morning, released compared $X operations fourth non-GAAP million prior up quarter. million

XXXX decrease and compensation. were higher the $X million, $X The leverage ratio $XXX $XX X.X. for on EBITDA reserve debt our fourth due tax adjustments, favorable tax quarter and tax prior net primarily was of effective the XX rate adjustments, FIN Adjusted million return and an net to basis rates the XX.X% expense year million was quarters to fourth respectively. stock-based The favorable from XXXX Interest overall was debt provisions XX% of effective with and or the benefits of a million from XXXX. of XX.X% was in above

income down quarter million, net and prior by the from driven related amortization year, to close at interest from Consolidated recent primarily impact $XX higher to the expense XX.X% acquisitions. negative the

translated per translating to adjusted compared per income or into quarter. last quarter $X.XX earnings with earnings a share, net $XX On increase $X.XX, prior fourth our of quarterly quarter. million, of year share decrease year's net of This XX.X% were net an XX.X% an adjusted comparable diluted from $X.XX diluted the basis,

closed from we the and for fourth Cash on sheet. $XX flows operations with the quarter quarter $XX million, of the cash balance were million out

well an within look driven nutrition recent food-and-beverage increase XX.X% at $XXX prior the for perspective, the quarter, The the sales was sales from as higher segment million, a of from of it generated business. both and contribution and segment health our sales markets acquisitions, by we growth and the within nutrients As minerals from year. fourth as Human increase

Higher Our costs selling earnings sales to flash operations of an and increase and Higher flood and an million, the amortization compared attrition insurance the higher from of related average reimbursement timing quarterly input a acquisitions. prices prior delivered in year. and the related human X.X% health to were by segment expenses offset recent prior to event operating higher year. $XX of manufacturing

XX%. earnings from Fourth $XX this for of increase an quarter operations million, adjusted segment were

market experiencing the market our increased as demand last nutrition earnings we a short-term our softness see As call, dietary on experiencing across segment. Human are In health particular, mentioned and has demand volatility which at grown we're that historically digits. in impact market, supplements we relatively mid-single in a

the a down by demand both following inventories driven supplements, the nature inventory pandemic, very of as chain, a the given during more adjust immunity-boosting disruptions many across pandemic the have strong and clear being levels. is customers supply softness post demand, destocking of market chain value of normalization normal to the and experience dissipated This their

Recent by sales U.S. provided supplements Nielsen year-over-year. double-digit dietary retail show data for negative growth

period. levels remain the Although, sales above pre-pandemic

with as QX, trajectory. transitionary year, line growth returns situation to course the demand historical this and of growth QX and likely through supplements short-term will in face softness We normalizes into the its over the market the

related quarterly The Nutrition sales into sales Our segment generated of to monogastric a $XX higher Pricing the market. result by million, Bergstrom, an in offset the rates, compared partially the included which and a small health X.X% decrease acquisition impact lower exchange Animal contribution unfavorable year. the ruminant changes foreign sales sales Animal in currency of market, the business. and of of from actions prior Nutrition the to decrease into was and

in an On the Animal earnings $X related the of from reimbursement currency due of Nutrition primarily health insurance a a a to prior Animal operations prior and year basis, segment million, quarter, the X.X%. flash constant of and to delivered Nutrition XX% health event timing year. decrease grew the flood from

expenses offset and the market, recent related the pricing the from the contribution higher the aforementioned Increases operating in to Bergstrom. by sales and input into higher partially acquisition of actions manufacturing acquisitions, costs ruminant

quarter million, Animal increased XX.X%. demand to operations were increase Fourth and what also particularly health health, adjusted Similar is Nutrition for and this Europe. segment volatility, from Human an segment Nutrition our earnings in experiencing $XX experiencing in of we're

feed measures, in a by been welfare costs, European and Ukraine. diseases, of impact environmental factors combination policy animal hard economic The animal hit cost animal the of including to the market war and food of increasing has higher the linked spread utility

diseases utility Europe resulted should in of swine, and demand and containment across and the for key within demand normalizing This much Europe. of markets, of ultimately animal feed conditions as improved Lower has allow market poultry, dairy our in progresses. XXXX a lower costs

by delivered Our quarter. quarterly business segment Plant currency products foreign higher an year in exchange product offset $XX sales to compared Nutrition of Due higher sales specialty related impact sales the million, prior XX.X% unfavorable performance of of partially to increase to and rates. in the an changes gases

quarter. products primarily Specialty versus an for XX.X% of the operations from operations was year this from delivered increase higher were of $X aforementioned adjusted quarter the prior to million, increase Fourth due of segment earnings million, sales. $X an increase XX.X%. The earnings

stabilized following well during business we in performance slightly in pre-pandemic but products, continue our volumes, we the COVID-XX recovery see to pandemic. Europe, the U.S. in XXXX. both We're has and experienced to and impact specialty below the drive in Within still the negative are positioned gases we further business growth

to I'm now going to remarks. closing Ted turn the call for some back over

Ted Harris

Thanks, Martin.

year we Balchem’s results financial for earlier environment. in fourth We Balchem, the XXXX, challenging a morning strong a both reported capping are which and the while pleased through of with this growth quarter for off managing delivered sales in another year great earnings

long-term strategic We shorter-term despite about and to growth continue also opportunities our growth encouraged us, initiatives of remain the challenges. progress ahead

also be in Our company results but the into we to evolve that today, show our and we ourselves where strengthen position capabilities future. and attractive have to continue not markets only successful

across so the make to would happen Thank day. world thank I you every this of much. the to take employees it Balchem to like again opportunity all once helped who

hand over will up to who back open the for call call the questions. I will Martin? Martin, now

Martin Bengtsson

Ted. formal portion point, we Thank this now conference will for the open questions. conference. the This concludes up you, of the call At

Operator

Thank Instructions]. you. [Operator

first the with question. line Bob Our with Please from questions Labick CJS come of proceed Securities. your

Lee Jagoda

It's Hi. Lee Bob. Good actually Jagoda morning. for

couple Just of a questions.

to related to the you expect a demand inventory Can know channel you what First I core and start, to some about of softness XXXX. the that situation bit demand versus we of become little half first looks in through normalized? the made comments when things like to sell talk

Ted Harris

stepping to for for talk in Bob. Thanks Lee. you. Sure, to Good

that's really particular one in areas, obviously dietary Nutrition particularly we then the have market, the about seen the talked market demand Human Martin Animal supplements business. two to of feed slowing being in slowing Health. Health European So, & in & that comments Nutrition the prepared the secondly, And impacting demand

about separately. So, those of let's talk both

part the demand in low quarter, quarter, We the We saw early were that, stronger the strong the in quarter. by came the progressed delivered growth it of but see. single a that relatively we negative a as evolve to organic quarter, throughout growth latter modest QX from that, to really weakening quarter the a was growth after part fairly of at in but which digits, pleased the ultimately, offset start

the that of portion Health QX. QX the see in continuing business our we of XXXX Human for And correcting supplements of & itself in dietary part Nutrition and early

the of in strong So, we saw reverse of XXXX, half. where by first it's certainly we see, bit And stronger a the slower incredibly many XXXX what little second half first in an demand saw we the as than second of half being a offset ways, half. in

perspective there. sales channel retail into demand as well in our that's have So visibility more as inventory. do We that customer

that though, point. is So, as into this at good view market feel our evolution relatively

Europe The us little Animal in difficult more a forecast. is really Nutrition to for bit market

We come have of through from to still which some XXXX, peaks historical seen slow down see on starting the pressure in we the the Obviously, their do are have costs see their cost ease they levels, that's the demand, from market. signs. positive peaks. of and energy XXXX. really high, continuing to come I We of quarter some would first down at say, second They very relative have but least half

we some of that. out positivity see coming And so,

the we up lower that see we in continue in believe that utility as evolves. to replacement energy costs pick soft, to and XXXX will QX QX, as but will start positivity animals, So, costs be that business of of result starts to and

specific those in little which remarks. bit highlighted area prepared the is hopefully that of gives you that So really his Martin for a markets, feel a two

Lee Jagoda

helpful. That's very Yes.

you've about customers come willing as cost inflationary done percentage on customers a to of like down? price your to job should to but be Just with environment related of how sort at we've we get of going of a the expense basis raws the one work your the queue. more, your the costs, percentage. balance, going in your dollar-for-dollar we to margin we gross to certain you ultimately and the gross and margin back prices back when cover are kind think Where pretty been of Are I'll to working back start sounds raise out some It with good hop that in?

Ted Harris

first So chime add can to I'll that's stab a take in at yes, that. any color, maybe needed. Martin

raise major really pointed to just that's think, a and the we our our First as out the we've really you been offset over the for That's strength are And able large it of a well us market buy all, margin. year. I to of ability with pleased that prices. shows positions dollar-for-dollar expense, for our at increases as focus cost been

Historically, lag as we unfavourable no And decrease. won't lag have seen favourable and margin prices. to happen. costs that raise increase you if expect an seen costs margin we've we will, And a as reason historically, there's

of our situations part We contractual raw customer is base material have in on Nutrition is that costs. the world have based certainly that particularly through Animal passed

lag so, coming are are And but up, we positive going when built-in a a also costs when down. we have built-in costs lag negative have

we believe company and see on it So, we a the that that will focused do past, as as margin. we've that in very recapturing are seen

have important to of profile. margin have, if economic we've as again our margin We're part and prices an that been profile, dollars you pleased we of raise able kind increased. is will, But gross

what that order to recover to to to levels. steps in we determined take historical gradually need margin we're so, And whatever its

Martin Bengtsson

two, has comment the that add for I percentage would a say, on mean, just -- QX. or dollar I significant Lee, a impact pass-through margin if has a per-dollar And I

math. we four looking margin to three, basis, a to that them back be, dollar-per-dollar a from go see and approximately pass-through see For do in we that X.X% example, expect margins to it points impact you was pressure, And for them full-year percentage where hopefully be, where to we'll in us pass-through on over it's just need which inflationary some see easing to the want the soon.

you're still seeing actually we're and side already on you're on experiencing it, sequentially side. sequentially, chemical where the food but see to inflation the costs starting seeing down commodity coming You're

a we at in QX if cost net overall terms of there's picture. easing sequentially look of our portfolio, kind it no for net, QX So, yet versus the

chemicals basis on food the delays. And of But obviously, with a the year-over-year lag significantly some sort tend still up. to commodities to

that mean that here also chemicals down off, margins the will for food are So, our the will fact over help time should the coming a commodities sure. start that of period hopefully, easing and

Lee Jagoda

the the colour. back in Appreciate hop queue. all I’ll

Operator

the next line your Our Ram Wainwright. proceed from coming question Selvaraju H.C. Please of is with with questions.

Ram Selvaraju

questions. Thanks so much for taking my

you, growth findings? versus for in drive of VitaCholine’s market? Ted. comment based recent this likely couple light the is And choline you particularly other a in what most brand, on products think study to you Just Could of the Cornell positioning

is the a specialty period? prospects saw most sense business, growth secondly, one reported I you think long-term then and had you directionality Martin. what of us the are And And quick you recently could give growth just one in given the for for products

Given tax effective effective the this baseline we than going historical the you. rate use quarter, has appropriate rate forward? the historical a likely to is most reversion Thank what lower to in been? expect tax the Or fourth should

Ted Harris

And the it for the for is our those. that from no well all a perspective Nutrition goes there's of both try We'll Rom. share branded of the you VitaCholine, leading into as market know, that product Human who market. those -- thanks remember no Choline positioning, Well, don't is which globally as question perspective. to VitaCholine brand technology three question there's questions,

really that position done most based from studies have have on facilities, But production on we And we with attributes the global studies multiple less fact done Europe, in in physical just more importantly, the it's one the product with the branded of the U.S. in based our were and that and based one the product itself this those VitaCholine a perspective, Cornell science product.

all the done VitaCholine. the with we've been that over our studies talked really of about have And years

of technology when when the And the customers, approach you the the we're leader, -- product. market, we viewed of the as the kind science and will innovator, so we clearly our approach leader if

our Choline, And brings. positioning find products that will the the believe our those innovate that really think they that product brand various do and you launches, with of of And that about as that value good that market Choline that. include choose we're our do brand our their So new and include with commercialized to on label, brand. leading to speaks customers will very that we clear proud of many and I brand feel

to the with our specialty the growth very in Relative combination was business healthy as performance pleased long-term our it fourth of direction, we price, of really gases well quarter as and the were both growth a business. plant nutrition

was specialty long it the quarter growth that a we business. overall the a is through really feel So good We certainly for for we've continuing products. performance as digit see low-single And business, type year. of term, said that years gases

hurt pandemic the hurt pandemic been the normalizes where bit the a pandemic, as But in of -- during was here. back And dietary similar market the a a kind growth we're during that this the a we'll businesses this that we've This pre seeing hurt this bounce was we'll we the slowing of there of the get little in was XXXX. post -- recovery, and in of type of benefited little demand pandemic. supplement was one was levels think pandemic. during of opposite, we're opposite but And bit to time during seeing

market. result all to of of of bit products combination sell the levels, continued growth inflation that of we in been see a a the repackage and from business, higher historical plus growth, a than that little that pricing we volume those has So

we the healthy we good that have by year place very the So in nutrition a performance and encouraged growth Nutrition fueled that plant will and in we in that growth in assets gases, recent Europe. believe QX, by put delivered a XXXX, in bit we have new we're see Plant

are We with those assets. that excited in QX about

Europe in was growth Our particularly strong.

our double-digit So growth in brand given a an Plant feel that help we that of relatively the business will investment we have But facilitate there. assets and have. of the efficacy type to Nutrition market the business, like should global position, our we small growth do products made be

double-digits an And so, able Products. all-around business year should we to grow Specialty feel like, do at deliver for really we that strong be and

rain is out. hope other the this being ends have part year. much to it up Ag parameter with California the that point rain we play for are the the not that, to think planting western the yet guess I at U.S. generally over in of has But encouraged the see we time is point too it note We all season. I really gotten favorable the in

And should a for bit business. so of that also create a that tailwind

I'll Martin over to hand question. So it the tax for

Martin Bengtsson

tax it today, in Ram, to be think that XX% drive to Yes. I rate back that our unique the as if look in here forecast. XX% 'XX. on are XX% we we I were closer think able right range, opposed XXXX to you the is hard to and the I and the planning than will at We we fluctuate here at we items some XXXX. in achieved 'XX year close they bit. the rate, little were mean, if rates go and predict to And hard to a

baseline from new my not So perspective. a

Operator

Thank you.

question. Please Ramgopal with Our the your come from Mitra Sidoti. line next question of has proceed with

Mitra Ramgopal

Good Yes, for questions. the and morning taking thanks. thanks

have price? of if much terms it it you volume I missed was in the of you First, might saw, mentioned revenue how driven growth versus

Martin Bengtsson

Yes. growth The been has primarily more driven, than driven. price volume

So primarily price.

Mitra Ramgopal

Thanks. Okay.

Martin Bengtsson

in subsided mostly from prices as half second we was year, primarily the those QX. earlier driven, will comment became in of I I inflation. say, little a just and the it just my first In and somewhat raise around to that costs half two volume to price driven that, go of halves. think to the of year to a that's color of started And clear add recovering kind And back Mitra, bit

certainly, volume saw we more So year overall, of growth the the was priced. in the but second year, half

Mitra Ramgopal

realize for Okay. drive are about the expectations early terms of you acquisitions even us days. forward? to able Bergstrom it's can in to and thinking Thanks. of in in you costs acquisitions, know And and still maybe I synergies help at 'XX? But XXXX your how Kappa those going and terms revenue looking being growth If

Martin Bengtsson

and that Martin, you Yes, maybe any in color. stab a additional can for at I'll take chime

the pleased both integrated quarters say we into going. integration are a companies been Kappa are are quarter acquisition. we two So a processes have the the And and let's acquisition Bergstrom how overall, from into with perspective. Essentially, commercial

So training we the to extent done single combined sales and their some well organizational are have in some our underway, areas. a efforts organization in structure, cross sales organization,

good feel together the organizations. coming of the about So

the Dynamics, our on integrated companies pleased as that Microsoft already that's like We ERP XXX. well, feel very and well have going also platform both and fully functional organizations also are

So, we feel very, quickly. very like we've moved

feel think integration we signs of the combination organization perspective, a to and a very the maybe the organization. more of And importantly cost your of but starting synergies good early of specific growth see some perspective. kind of sales the really are to point, about both with those from overall, associated we So from I

the product call have lot more that a reps coming portfolio historically We now the on outside opportunities of calling about customers, seeing have reports in that had. have sales and talking identified broad line, person we're may

expecting. of the we've sales see are some companies, to I'm and integration and we starting of costs that those the progress So by we’re some that signs synergies, the made realized we relative to encouraged the of have

available potential and of good opportunity MSM there's KX. going products, with as thought feel significant pleased We like Continue very the that. to us penetration feel the long-term So, market about two very to we in.

not going those the is market Obviously, immune on remain excited So, that They're supplement and the short-term businesses. about that. to within destocking dietary of slowing very impacting that's situation.

seeing all are across some would as demand than ideally are the nutritional the we the integration portfolio. like feel But slower ahead. seeing and opportunity in we all really about good we So

Mitra Ramgopal

customer a into continue starting just challenging, seems terms issue, it'll least pressures but are are destocking, to see half of then, half the it to as inflationary And the in for thanks. looking and you Okay, to you it things at like ease, be comfortable headed? out much so the feel first clear temporary be second where heading more ‘XX,

Ted Harris

pandemic data to feel out for few levels. got Yes. that despite good last seen so was very the for growth Absolutely, the the continue higher we're closely, Nielsen the and months. Sales feel watching a be there. pre negative And sales like continue we've brick-and-mortar retail than sales

So because nature to level these that some pandemic that's encouraging at that is saw. we boosting many great. the once saw relative just of The peak the pre I that very the still the of It's which is certainly of nutrients. with we pandemic, growth levels, immunity of think not there bounce

we that The all think encouraging. the customers with think of will evidence to in from the really that slow that I So anecdotal discussions of destocking have we that's earlier QX. start part the have we suggest

more absolutely -- that that things normal And based feel growth levels so be see type comment if seeing back that a demand will half. the We specific QX of on that second we we the we're everything quarter, like was you and normalized your around to in today, level believe to at transitional we will should expect.

Mitra Ramgopal

about a How housekeeping forward thanks. Martin, just of also questions. and ‘XX? should couple CapEx then, interest Okay, we And going think expense for

Martin Bengtsson

Yes.

moment. of On Fed's an the of currently rate effective we're interest the sort around based where at side, expense X% on the paying

every we a for currently million $XXX $X interest of have million. means, $XXX that And of expense debt. million So

So, sort we end if intend to somewhere so. out. napkin you that's annualized we we generate back or math, of up simple that the pay and to on tend Obviously, can basis. do you But math as do continue an you do continue $XX to of to you'll the down cash, as so forecast debt million

million around part look our capacities as seeing. we versus we XX and see spend. higher did on there. capital you what XXXX, second in expanding be bit in million range the And little will the question acquisitions the for a of also terms CapEx the think adding million capital, XXXX XX depending in for we to between the We spent used were of and And $XX

of XX CapEx, expanding kind million in. some surround a completing are still expect drive facility the range the we will that's to XX in capacities that we see expense, Vitamin where range for million come but our XXXX, where there, incremental So here in KX and to I XXXX is new of

Mitra Ramgopal

questions. Okay, great. the its for again Thanks taking

Operator

closing at this I like back Officer, Harris would now questions Chief to further time. no Ted over call remarks. to the are There for turn Executive

Ted Harris

make progress the Great, challenges facing. XXXX company. in joining one much the And which particularly the results given thank to very for macroeconomic continuing pleased really was again, we've and all thanks another with you Darrell. good call strong Balchem for financially, been are strategically We set while the we records fourth the Once with quarter, very for year today. new

really as support today. to We forward the joining. results for in look time XXXX QX year Take through we So, your appreciate so your as well reporting out April. care. Thanks much

Operator

does We appreciate today's teleconference. This your you. conclude Thank participation.

this Enjoy the at your day. may disconnect rest lines You of time. your

Balchem (BCPC) 24 Feb 232022 Q4 Earnings call transcript