BCPC - Earnings call transcript Q1 2024

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Operator

Greetings, and welcome to the Balchem Corporation First Quarter 2024 Earnings 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 conference over to your host, Mr. Officer Corporation. Financial Chief Bengtsson, for Balchem Martin Thank you, sir.

may begin. You

Carl Bengtsson

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

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

Theodore Harris

strong we results record & adjusted This once with mix. Thanks, quarter With product to sales and segment, particularly Human Martin. within earnings. pleased welcome Good a sales and reported delivered our Nutrition strong and EBITDA the strong first and morning, margins and am conference again call. which our results. record driven I growth favorable excellent Health morning, financial by

of percentage X.X% prior million million operations XXX higher EBITDA prior grew of from and an by of of from of were Gross margin $XX by up delivered basis we points adjusted expanded EBITDA margin higher $XXX margin adjusted of quarterly revenues XX.X% quarter. record our increase $XX the X% to consolidated Earnings XX.X% points versus versus gross the XX%. year. with the million, sales, we by XX.X%, and basis were prior year. Our an XXX year

net of first earnings a million, On quarter resulted performance Our of share $X.XX non-GAAP non-GAAP on our Cash $XX on of quarter of in resilience first an XXXX that $XX with X.X% GAAP flows a quarterly resulted cash business share an per quarter $XX income net increase with for the $XX operations earnings the in per Balchem $X.XX million adjusted XX.X% highlights of basis. of an first strength our strong from basis, a Overall, basis. were million, flow earnings and quarter increase free for of million. model. of of

like The about passing update share to detail, progress sustainability for on in would current marketing the our essential and circumstances in market making across comments Martin the awareness vary overall some progress market-leading the as portfolio. VitaCholine, Choline. brand Before are continues to results and I we dynamic disclosed financial make back report drive front market nutrient few our on XXXX more around be environment our provide recently environment, the to Balchem's of greatly increased a the cover call published to to a brief sustainability

of nutrients by Health for consumer strong the supply portfolio we customers to Minerals have demand end across normalized customers Human uncertain. our we When then, returning more we reliable on very more experienced their adjusting patterns. XXXX, demand order early and and discussed the nutrients As business, of more in and our a portfolio demand gradual our businesses, levels & chains with segment, vitamins. and earlier performance we of became our are patterns become excellent calls, are outlook in we look as stabilization unique where seeing part led seeing inventory Nutrition minerals, destocking seen down of Since

returned normalized Solutions also Our segment. to nicely contributed more HNH businesses order Human growth to patterns Food of the the overall

going perspective. Health time Our a from segment Animal a market through is challenging Nutrition &

discussed business has flooding low-cost and continue our choline been to how expect for time. product European have negatively We feed-grade by some earlier this we market, impacted the

We or with a into costs tariff and are animal the our understand low business in still there reducing is this the elevated looking protein other Also, relief. could for economics potential behavior impacting dairy to going tougher through if pricing cycle unfair an effort ruminant milk prices. feed be antidumping

short impact, to more term this to believe in we negative we this currently While this and having nature, be expect market is a gradually. recover

the segment, gases market. perform business pleased our perspective, stable how Balchem we managed well Products have From dynamic overall an in which Specialty our to a this environment. am is through business, Performance For I primary continues with

strength have Our serve we value has growth market the positions in through drive and us various of these to our and portfolio overall propositions it our enabled markets mix highlighted volatile ability over above-market time. maneuver times and the to

to withdrawal report, emissions sustainability X making latest XX% compared our In vision XXXX this and disclosed Balchem goal reduce improvement Balchem As our shared our are X the over XX% XX% more X, reduced that we X our corporate progress and absolute or than gas health SDG to responsible of a determined in I'm Goals sustainability to responsibility. track assessment XXXX, XXXX our remain month, very Last that SDGs. as to make Sustainable well-being pleased we social we our internal X, achieve In we growth, baseline. Nations Development Supporting greenhouse and continue In also time United Earth our and production. product our water a achieved water values directly to exceeded hunger; and support our on revenues first the with Scope X% we we our usage SGGXX world of XX%. for efforts. XXXX healthier by XX by continues and XXXX our line Day, out of to commitment reduction XXXX, emissions dedication the of on the advancing baseline, good core and our consumption place. published drive Balchem by report, its SDG guided this is

Our our innovative our XXXX for X with operating performance as stewards initiatives our our providing needs other to people, strong goals all our main shows and objectives: world and on health our communities and of and broad the commitment solutions the towards shareholders. progress of nutritional excellence of

that the some the earlier, I promote choline on benefits VitaCholine nutrients. website, well-being and at proud the stadium impactful will of a have health-conscious progress professional VitaCholine Yesterday, of established end, MetLife mind. role like significant as official Balchem's brand VitaCholine market-leading for prominent with our Jets essential sponsorship sponsorship has mentioned for the building are market-leading has pregnancy team. control. vitamins, accuracy reach This on York a Additionally, NSL by is of New announce to is supports and and an essential were of partner become aspect will is excited awareness partner performance of we accessibility both of been help for enhancing the Jets, site. minerals I well the nutritional consumer share receiving that signage. become exposure first of body VitaCholine awareness major and presence physical the improving we VitaCholine and muscle on the making Jets each crucial mental for branding the large years. and nutrient by presenting ingredient brands a category of raising that you of and the of with would Stadium some and the page newYorkjets.com, VitaCholine, the in The audience its first VitaCholine also jets. of important partnership a message in memory, at sports To partnership. experts Choline's top nutrient will many to

ideal and increased emerging with on York it's drive evidence are to partnership time positive this awareness. wellness, excited and mental performance dynamic New this adult Now to with its about the on effects clinical physical we opportunity Jets embark an showcasing

contain We this to and go Martin advancement penetration unique our going for early in pleased over And for efforts our first from now We marketing over drive the beverages segments. value to that, very response who as the and back market our sharing you on and this market with the to Martin? that to consolidated quarters increased VitaCholine each progress look the to I'm the call forward through for VitaCholine. the financial company coming see supplements partnership and to for the clearly for of awareness our quarter with fortified business turn nutritional the opportunity with customers they are foods VitaCholine. manufacture results results

Carl Bengtsson

Thank you, Ted.

strong sales, margin a Ted mentioned, strong quarter for overall, EBITDA quarter first Balchem adjusted was performance. and the with record As

driven year, sales higher Our $XXX segment. of & growth Nutrition primarily strong our X.X% net prior Human in million Health than by were first quarter

of dollars Our million first margin compared to $XX XX.X% were the quarter up prior gross year.

a of $XX basis, release was $XX to to EBITDA a by prior year. the $XX prior mix to quarter sale impact to the operations the was up compared as operating $XX in first sales, outstanding integration-related interest a prior non-GAAP margin on This borrowings, expense of due offset offset for of for the XXX partially adjusted GAAP lower million, our due percent decrease to year, prior of to On points of X% primarily and the quarter adjusted expenses increase million decrease were gain year. earnings gross and expenses. Our an to to in margin basis Adjusted fixed were recognized higher compared quarter expense detailed prior million from expenses and compensation-related XX.X%. prior of to year. EBITDA earnings in partially first year, an the million year interest of increase $X.X assets in in compared this morning, the costs. The was prior quarter. $X in Consolidated rates. by an for primarily as decreases XX.X% manufacturing operations $XX up grew the rate of favorable was Interest XX.X% the due million, the compared The year. input increase transaction lower from was with the X.X% certain first XX% were compared higher earnings compared million million

$XXX decrease first tax up from XXXX XX.X% XX%, XX.X% certain quarters in was year from the and higher foreign million, taxes. continue and income The tax ratio rate from our the and million We to by net The for first debt $X debt debt, reduced debt flows effective to basis with and our quarter net of use the overall in million down quarter on due ended X.X. benefits quarter were the effective with tax compensation stock-based primarily and closed prior we net of the lower of prior leverage cash Consolidated a an to $XX pay rates respectively. XXXX the at solid the year.

the net income increase quarter earnings quarterly $X.XX earnings prior $XX Cash $X.XX million, million, were and diluted This net flows our to $XX cash operations with million, net of balance year, $X.XX, an prior to $XX share an of out On an of of free per adjusted diluted cash $XX flow on with we million year. sheet. increase of quarter closed compared per which were first translated into share. the the from X.X% basis, translated from adjusted the

As the our primarily business. of sales for higher Health first Minerals from an by record year, prior quarter, million & segment Human sales nutrients the quarter from within look and we increase perspective, of the driven segment at $XXX the first XX.X% generated a Nutrition

record the Our prior manufacturing Human compared and was of Health costs. from quarterly aforementioned by segment driven million, delivered $XX the This lower input of earnings sales Nutrition year. to XX.X% increase & an higher operations

million, We overall & increase record from and earnings $XX nutrients, strong in operations an with overall our demand operations. picture and this were improve pleased to of segment delivering XX.X%. the were adjusted for Human Nutrition quarter markets. performance of We of and a the First our continues very Health from minerals demand earnings the segment, food saw growth sales and beverage record

by the generated delivered & $X sales, markets. a lower of The to Health input lower sales due species XX.X% from earnings lower costs. Nutrition The Health decrease the by to XX.X% aforementioned was quarterly from in $XX year. the & manufacturing both was the Animal of prior and ruminant offset million, million, a prior decrease operations partially driven year. of decrease monogastric of decrease Animal compared Our segment sales Nutrition primarily

relatively what American we the adjusted quarter this North also XX.X%. decrease segment prices, show dairy our flooding encapsulated North segment demand QX Animal to experiencing for America. from animal conditions, Nutrition challenging American And market market milk were protein from Europe, First market million, of & feed market. still is a milk market. dairy is to European in The imports and $X Health competition experiencing North call, soft nutrients our for in low-cost our particularly earnings Similar demand continues rumen-protected low U.S. and the continued operations in discussed in market but impacting the earnings

While tough clearly opportunity longer to animal continue a going market provide time segment at moment, a supportive. this and Animal over is more nutrition to as expect we we through the Nutrition become for dynamics Balchem & Health believe growth markets gradually the improve the term,

input lower Specialty X.X% year million, sales offset operating nutrition due increase Products Gases Products compared of of Performance the X.X% in A partially segment an offset the the by manufacturing higher delivered to by operations million. higher by quarterly Our from year, business. in sales of of $XX Specialty $X versus lower to expenses. prior prior delivered driven sales business, costs, primarily the earnings plant decrease partially

earnings of performance adjusted $X Specialty in for quarter increase pleased growth. were good first earnings margins X.X%. this an segment the as Products from were improved delivered of with We First million, operations the quarter

So to the start to to back remarks. I'm great Ted quarter XXXX. going some Balchem call was and another closing strong over for first overall, quarter a the for turn now

Theodore Harris

Thanks, Martin.

particularly uncertainties with the a our variety show call continued We very sales call we continue strong company. and the adjusted Martin? pleased the marketplace. in for level, results to earlier the who are morning, in will the growth now are this and positions, I record to economic given reported to ability a for At market quarter, consolidated financial strong for hand of geopolitical the EBITDA remain over an the conditions, long-term we market in and the of we in facing confident light questions. results outlook deliver will open Martin, up back with

Carl Bengtsson

the now conference. Ted. of the concludes Thank you, This formal portion

conference this open point, will questions. we So at for the call

Operator

Instructions] Bob with Labick of first [Operator the Securities. Our line question comes CJS from

Bob Labick

on Absolutely. Martin to Congratulations his expanded role.

margin quarter, obviously, more -- it How Maybe for great the is drove little Is materials? record we like there and a a on it margin onetime human margins? mix, us. the going benefits? Are sustainable? upside nice raw significant forward? should could the recap So think dig Is What about there we profile side. the into it

Theodore Harris

and So then yes, Martin maybe I'll at stab can take chime in. a that, first

was driver. say and really of nutrients mix simply really of minerals, no strength the vitamins sort We were of onetime in primarily the year-over-year just So saw items business. that and the It there and primary note. growth driven by significant business, that was

last or We cost have, raw as material input know, the to as you over X continue improvement margin ease. quarters X see

minor which, than we an business. it measurable mix saw & of food that the the just So but in a and has more growth course, indication business, rest played a Nutrients of primarily was the of significant profile margin Minerals role, higher fairly the

Bob Labick

encapsulation of take the step break inventory acquisitions a you've -- kind Okay. in terms Maybe through over could gone lot Yes. a demand to, now. minerals human of MSM And KX flavors be choline, I you subsegments each powders those key the the that subsegments, referring and and guess, would or the right chelated within the you're of couple Great. the a half corrections, step we just years, maybe made. And back however and of for great the obviously, a down outlook last side and issues, want. and

Theodore Harris

term, vitamins, return vitamins potential & be at after and to you we whole. growth that we higher these are a time, the that, and I'll a of plus tackle single much Health end nutrients bit, which at try significant our that Human look growth Again, for primary is and onion as several vitamin let's sell, well. And science as time. of the But today pandemic will back the is achieved the that nutrients, least is the we have have it mid-single multiple market around returned market them this And minerals forward. has returned these to products growth. that. And around seeing period well. of case is I at mid-single we're a minerals to a inherent as food that volatile going very awareness for little is that the than quite organic but to confused KX, during really market that of healthy more nutrients The Nutrition as one business growth. Long the increased low growth, type the supplements example, that think said increased more of Historically, overall we digits. the very believe the obviously, say, believe our when some digits, time albeit growth, we but of growth Yes. What have result least market, seeing period peel for markets markets

And type various vitamin see within minerals our double-digit Minerals high our single-digit KX significant so portfolio, we particular growth. growth in business in

You the mentioned line. MSM MSM with product

so do always overall which a and then of with the was portfolio invested the is part see. great time to indeed the are market specifically market growth, growing than whole. returning faster does to significantly somewhat that that have over And it to But as our are products

increased And the we which are obviously, our for significant here And all our that investments drive of last in awareness further seeing of X marketing, are some quarters. our in market. and parts over science, penetrate X to Jets that like announced plan the we about investments about so that a and that additional or potential the And we partnership be ultimately I increase is think And is penetration. something growth, the awareness, to talk going lot market increased that driven excited by we're science very that.

Bob Labick

But I'll or get how Jeff the and here a over to will to do do you maybe the it's hear hope measure partnership. as measure, question with jump Jets? exciting maybe the way? And because that you of about to I guess, partnership that Great. what just you better success How Okay. pretty

Theodore Harris

glad out It's you're there. in the chanting area, But obviously, eJet sitting we the and at So and And part jet American Jets for to Balchem, know NFL sands popularity, here the it's of we're jets fan, hear path York all I world. very apologize as this in I'm and New the that now. an we're of York European excited another of And New interesting different our a colleagues Jets our mantra about partnership. the in representing most But see but well. very the we perspective have is of think says a cities they dynamic very and City the NSL one kind as international growing team. City the

of about success. internationally marketing And really so be this But campaign. of unusual the there's excited all we're be as these And nutrients, believe an to little uplift efforts, ROI is this to specifically at hard a seeing going And sales measure sales. this to relative are we're like going investment. we well. bit in VitaCholine it looking to an Obviously, we

hope penetration. do how able regional scope, measure at we're to, what reception a supplements more jets customers the But in various to studies element that be a tick customers' interest, is the from is more around But to -- more and And to willingness those of appeal seeing our our at success potentially do could a continuing love up talk national with idea that even kind numbers as a it sales. that. get their because excited specific nutritional want going them, choline brand this the We're we drive is beverage. regional look of we're be at and at interest doing of on so And products. those beverages VitaCholine, focus forth, market at to group our and even sales displayed drive even gets this alluded so this our and think who international back co-brand will VitaCholine resonating thing awareness so success. the see perspective. I about and and and are we're One you how the games. increased or awareness granularly to obviously, basis, and is, we getting desire prominently to and VitaCholine we you on looking than we though they're early to about look granular Jets looking to supplement this be nutritional may also customers, We're to product will We manufacture there of our be

out have products, we're products that. their already And but measuring in success one measuring early the now having of not that co-branded number wins kind just is way marketplace. have co-branding So initially doing relative by customers, of our on to some the we we

that the it sales end day, really at be be So the this. we higher But of be course, we will to drive multifaceted we'll end that measure the how will need focused resulting on. of and metric

Bob Labick

really That's exciting, as Okay. said. I

and question, back And to Health. Last the Okay. get jumping queue. in Nutrition just Animal I'll over &

to have alluded what the bit, there or anything And time has maybe a any little potentially? past? it it dumping in Europe You how actions the And that? like last this market if taken improve of in kind resolved like anything you to be was can seen

Theodore Harris

Yes.

absolutely, element there turn doing. actions address are to be on part market that sit can We're is -- the your our things question this, first. there that So this are Obviously, wait But not a latter market but I'll around. be of just the maybe for and is can to taking. we hands we there

the hasn't the seen past. I would situations gone come into But have it like say suggest over have over time. years. come for I've this low-cost in We various XX here, in seen reasons. probably this Europe I been challenging Xx it and my go and imports years would and And

taking volume our the this it's maintain of that. business, and we look protect of can kind as of our to around on simply governments because turn ultimately, to look and types our defending that antidumping unfair continue possibility now, do. of We are business. there mean potentially think address practices the out we're tariffs. And flooding can kinds possibility the things impacting or And can into costs practices. other we well. so is they're we these these of One investigate processes at of unfair do that But are and market in can to right I well-established there working tariffs through system, hard try our

so And well. as to we're that explore certainly going

alluded leadership and and and will a expanded the feel well. as having to you Martin's as it healthier new undoubtedly on roles the nutrition -- we So term, turnaround But task continue like very line well, is accelerate animal to Bottom ultimately is, situation. the will to challenging. long help attractive markets are return

Operator

Selvaraju Our question from next Ram H.C. the comes of line with Wainwright.

Raghuram Selvaraju

strong Congrats performance. on operating continued

you comment on among which have could potentially perhaps U.S. is as of those KX Just with vitamin you things, this among a might could activities other marketing that, first boosting athletic adjunct extent execute performance. and VitaCholine? to And VitaCholine KX extending things, to the all, year, which specifically you and promotional for, important extent give maybe Jets the to the to what to like the of also MSM, areas activities, other Vital, into you done marketing promotional if and expect regard an around And specifically us in example, understanding for envision you other from different my on sense beyond what what brand market be historically? partnership,

Theodore Harris

thanks for all, first we this. really Ram, of for and thank you are your joining, And excited comments. Yes, about

proudly I would and heart. at You've our long covering time, been say for a us

starting a not of are we're is of put which a but a going and kind we development we extent that on nice of in product our is we KX, over will, in company, partnership, company, portion products company, And new great are and And might like if investment on the Jets this and in to that now. this manufacturing viewing see that that need on product haven't But investment company, fruits return we and a time to to expensive. a so significant case. doing And return not next marketing It's it's a certainly that, years, and the science-based we're Delta point expectation But selling at want our see we it we're lot as budget. a this a an still some that program. technology again, absolutely you of to something a we the very investment making marketing money, pilot will like a test labor. Vital case, be of add invested is

out as result as more but type growth can the to is today, So expect little a impact we start see amount measure to sure not the question, use increase rolling know And And our increased this to little which measure at, bit is but the these Bob's profile certainly about able metrics other do this also, goals, marketing our all spend there's this a that of through will going be in broadly. partnership. that our forward. the most that portfolio, -- as start is and expect can products of do. We bit to are those far I'm of we And looking have what I will expect Jets a brands, but to because And we to spoke answering be revenues. in let's a meaningfully case. important them co-branding of some awareness marketing teams do new this a will our and our I prudent is we be to to it's our this we us, of that bit and we successful test ones. and we of think, studies do expectation But it's we it successive we as that

are much visible little brand a VitaCholine bit announced image, be on. a establish be that? landing because investments hope page That of to consumer-centric more from new a bit, doing that and partnership to want Balchem I'll us land what a is we was But a revamping and a is page, start website our this little see less google website. traditional be Part are campaign and that. to VitaCholine their other marketing about our not starting revamping Jets to we consumer-facing but And excited are them the We may for people disparage website actually a our to page perspective. -- from not

program So things. I'll of highlight it's excited those very that other I'm one kinds about.

quality consumer I the think contain. whether at different science-based the what of bit There's And we're marketplace XXX% took heritage ingredient to this and products. I something what lines are products supplement it not them they these contain XX a products manufacturing we they space. real calling one our of claims we across sometimes in things lines, the testing and company, what the nutritional like what and but that XX% say that And highlights we're but specific and about product we've but had at nutrient. they testing product various not contain over marketplace, it's they have actually A products products And say -- calling a it's and hanging being analysis that about had cloud and looking them. of And one sell in this for true issue true this of of they our talked talk these the the are in that an claim done that claim. did do on product, or in a the consumer I analyze have is that necessarily we they have won't them of the have products they program.

consumer of in information. and and and share this to of include our And this that so forth, movement with customers' them products differential studies, marketers, kind go in our and these data And real the can Amazons sales world resulting the these so use real change and them. it's products we for analysis

to a get of done our to And a And activity products. excited maybe of soapbox is here. some using TikTok with social and are We've think escalating. them today decisions. think lines, of consumers information make this platforms And then off I my buying there's, about our and course, media media couple we it's their the different quite get social for I ripe I'll other this. and other and significantly help way think in product lastly, we're But so

space. with away that up in really science-based dramatically for We're Hopefully, say excited And but about that I our that strong can't augmenting helps. And stepping capability. so ramping and in heritage, this heritage it marketing new we team marketing not strong added the manufacturing from efforts that are enough program. our

Raghuram Selvaraju

helpful. Very

this from environment XXXX, to half now which scorchingly that, XXXX the see on wanted the are of inflation can hope continue an as in half demand pricing may that on of degree inflationary -- But to be anywhere flexibility. we your come near may we and greater multiple seeing following strategy that modulated continues lines comment hot to first think, I maybe evolved environment, pricing back all, that the inflationary has you in in that product certainly, to means more been continue the a not Just are even to And if be down. evolve has for we Elastic. example, I or case, as very there

And that particularly then the the wanted within how and more in having I just to anticipate focuses the Balchem Animal relative think as H&H segment units to H&H at respect specific Health H&H segment? beneficial? synergistic Or opposed Balchem, Animal to to entertain lines more plausible be Balchem is these X also a do also you might segment. to strategically business Health incrementally you it Nutrition, and scenario on with to do within product which So that and see whether applies

Theodore Harris

in going but that we I'll get one get first is And a There's try forth. Okay. and to solid, technology to back return through I'll me so just all. and period the our last capture get and this I'll pricing maybe through lot Obviously, remind Nutrition it. then if to at and positions hit I to growth. there, our are markets now, Health difficult is confident in and of Animal time right time we'll the a business and the don't

any the point, are So and spending this and not about space. we not being animal nutrition separation health thinking at in time

respected Our known brand health is well space. well nutrition really and and the in animal

of or cat And I some our we're facing. technology manufacture marketplace synergies, and versus way the so exciting. different. space, And be there. I there it's launching chicken are of working to we'll the course choline of that's a we some And needs even about well. to. is the on course, year some say very And of all hopefully, choline, this and challenges in human are technology next metabolism on course, the of And in the over is the innovation address the of cat. the our versus think the product, commonality is a market true there species a of as And similar business But would even minerals

of is to But of fact quite despite your comment. addresses from of bit in perspective, and I happy that environment always back, the again, able different in. with pricing think prices we were think do the raise Can the there's kind that synergy we certainly that we're and We Relative for raise So strength to have and we way shows we inflationary our a market I we position, the to science said prices go the different. incredibly if the a our extreme hopefully, dollar cost, latter we are power customers that pricing, a lost margin. differentiation that for were the ability dollar have.

higher-margin to rather But that overall. lines that just for to think mature on are tends But margin the net-net, I having we're we regained margin product have from portion and this in be give back, less meaningful back. others. doing modest would have believe seeing we what competitive benefit as have are the that, many saw our some H&H you not was little a inflation company lines, have margin that that the probably suspect, since anything we most the giving will is we're kick that are than getting And products and of we we expansion. the a that else. where than benefit accelerated And in that lines quarter product in that growth really mix opportunity stopped. result more And advantage deflation, some seeing more as that now product we We a of of we certainly,

Raghuram Selvaraju

quickly, just And X very Great. then quick questions for Martin.

this how over the XX% to And tax the year? expect be able going this tick into level? the do what's consideration Martin, do current with might Firstly, you that question. then to What may respect on share expect I buybacks? maintain some secondly, evolve? you do think this And you of you And of move always you rate how company's course appropriately about front? take most to Or how thinking be as the forward positioning are up of evaluate that below that the inputs evolving to to you the that company effective remainder ask it forward?

Carl Bengtsson

the benefited that Ram, bit on do the first options the expenses we rate, in of the bit down through on comp bit tax stock and little here a little little tick and a the it I in a exercising expect higher as was a from go to pushed year. little It lower rate it bit. quarter. first of up so quarter

I tick So go we that do higher expect to forward. as

been So I did now would rate regards would forward. as we I as With a going here buyback, modeling few a the it's rate, years 'XX use 'XX. that. to planning not use planning since more for share

and part when in that's growth sort of of of we dividend continue the As to our organic that have we've And pay we've down where used increase capital in M&A the our sort our needs first active but said our and invested and past, lieu it allocation, in debt. pay it's any after of it's money.

here is becoming sit ratio obviously, As leverage lower. the we today,

getting now there being right down lower is leverage debt net So rates. X.X to

the that think have same we process of initiatives. the growth some becomes to I relevant accelerate continuously time, into come more could thought discussion. At of to sort it evaluate -- strategic the acquisitions and So opportunities our of play

along be that happens may the next over so. or those it here So lines something year

share really it. serious is does play, not then on that reason, any If we that come of not little into depends So consideration. it that. part for we'll really bit But a give do buybacks then more another acquisition,

Operator

Our next from Company. & the of comes question Kyle Sidoti May line with

Kyle May

follow to of last of the questions. couple wanted I Ted up one on

bit than of puts You forward. expecting. there's about And in mentioned overall was the quarter, some the touch potential that it that and maybe XX%, of be for? sales you that gross margin. better to takes maybe this percentage came little improve talk were going Can looking for we In should and a on sounded we like

Theodore Harris

obviously margin going really Health in in I point marks XX%. the, say, Nutrients would of my were we is & business comments and of success mix ultimately us. us tailwind kind forward. elements to Animal Nutrition the give that going ruminant & a pleased of Minerals or to with business in around bit think for the part a I high It a relative

going we XX% expansion. to just accelerated Health grow excellent are as in in growth margin of businesses So would higher-margin There was we're some I number. that you the an really bit business rates, caution those that wasn't anything see But at rate for that quarter. kind unusual little the you're our benefit a dilution Nutrition Minerals Nutrition for also the course, this there. of business. business, again, example, the Animal & as in was, the business, natural Nutrients to the Animal picks But the & some quarter mix back in growth decline but see up of going Part in

picture So the you well. that as weigh into to have

Kyle May

Got it.

& I appreciate saw quarter could fourth was And from sequential was the first but kind change XQ. or also then you if I picture, to Health, And of we quarter. kind of the That's Martin what what in in the Animal just on impactful wondering more expand Nutrition helpful. of Okay. commentary big in maybe maybe the the the wondering

Carl Bengtsson

fourth Yes. couple side. was quarter, on you H&H sales first the on On actually a was driven the particularly top compare it it perspective, line. an of ruminant of down the million And if to quarter, that

impact H&H. also wouldn't the ruminant milk protein primarily came a negative margins prices right while this, has call was exceptionally bit, low for little a driven an down on sequentially, the dairy, by mix And U.S. more that's bit monogastric stable but So all-time it a which I low, little now. piece

proposition of the a little our bit of a products, decline. So value on that's impact negative sequential some and it's driven on having a key therefore,

assumption forward, and that, normalizing and it's after exactly next but to look in on time evolve quarter or can't it and on, will that, that with improve. over guarantee. that normalize levels, back the we is of sales speak. I our so market back some or will pricing prices But cycle come start history that will after to hard it predict sort more will so period assume of how quarter whether quarter here one As this would and the will have to based our normalized And

Kyle May

of anything that, following But And in are it. category, whether maybe there it's do of with on or boost product the other like prices leading anything marketing that placement or company to dictators. I meantime, sales is that? one can understand the maybe Got that the

Carl Bengtsson

is are tough certainly looking We're what trying and market. we well as as do so at to options very in to the a speak, can what

together marketplace and both successful the side reassure been where science new product, choline the We to this our and with helped. our has how science flagship have refreshed expanded with out into message bring on marketing materials

So if products, our our market. as at has we of other some of compared look better up this held a that to in product much that Reassure one result

and around do message looking things propositions. similar also we're portfolio how get there other the out products of can So value for we across the our the

So we're certainly there trying do moment, success soon. at to going hopefully, some get and the we'll that

Operator

back final Mr. comments. floor for any concludes our Harris I'll that turn gentlemen, to question-and-answer session. and Ladies the

Theodore Harris

the to Melissa. Conference City Thank all the all June for July. you, Industrials we today. us In Market X Fargo appreciate in Chicago look participating Conference and with investor in We Bank the Wells Farm Conference Global May really your once thank to reporting be meantime, time, we a XXXX you XX, the Deutsche in QX out in being Consumer Conference few in forward on And BMO will on again, XX. June our York Consumer conferences, and New on Paris results

the you of some or see next so. of at of we'll hopefully, events course month or over more the one those So

a Have for thanks joining. day. great So again

Operator

Thank you. call. This concludes today's conference

this lines your time. for you Thank participation. You at may your disconnect

Balchem (BCPC) 3 May 242024 Q1 Earnings call transcript