BALCHEM CORPBCPC
BALCHEM CORP Segments Disclosure
SEGMENT INFORMATION
Balchem Corporation reports three reportable segments: Human Nutrition and Health, Animal Nutrition and Health, and Specialty Products. The reportable segments are organized based on the end use of the products manufactured and sold. Sales and production of products outside of our reportable segments and other minor business activities are included in "Other and Unallocated."
Human Nutrition and Health
The Human Nutrition and Health ("HNH") segment provides human grade choline nutrients and mineral amino acid chelated products through this segment for nutrition and health 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. The Company's mineral amino acid chelates, specialized mineral salts, and mineral complexes are used as raw materials for inclusion in premier human nutrition products; proprietary technologies have been combined to create an organic molecule in a form the body can readily assimilate. Sales growth for human nutrition applications is reliant on differentiation from lower-cost competitive products through scientific data, intellectual property and customers' appreciation of brand value. Consequently, the Company makes investments in such activities for long-term value differentiation. This segment also manufactures specialty vitamin K2, which plays a crucial role in the human body for bone health, heart health and immunity, and methylsulfonylmethane ("MSM"), which is a widely used nutritional ingredient that helps provide benefits for joint health, sports nutrition, skin and beauty, and healthy aging. This segment also serves the food and beverage industry for beverage, bakery, dairy, confectionary, and savory manufacturers. The Company partners with its customers from ideation through commercialization to bring on-trend beverages, baked goods, confections, dairy and meat products to market. The Company has expertise in trends analysis and product development. With its strong manufacturing capabilities in customized spray dried and emulsified powders, extrusion and agglomeration, blended lipid systems, liquid flavor delivery systems, juice and dairy bases, chocolate systems, ice cream bases and variegates, the Company is a one-stop solutions provider for beverage and dairy product development needs. Additionally, this segment provides 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, sports and protein bars, dietary plans, and nutritional supplements. The Company also creates cereal systems for ready-to-eat cereals, grain-based snacks, and cereal based ingredients.
Animal Nutrition and Health
The Animal Nutrition and Health ("ANH") segment provides nutritional products derived from its microencapsulation and chelation technologies in addition to the essential nutrient choline chloride. For ruminant animals, the Company’s microencapsulated products boost health and milk production by delivering nutrient supplements that are biologically available, providing required nutritional levels. The Company’s 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. In poultry, choline deficiency can result in reduced growth rates and perosis in young birds, while in swine production choline is a necessary and required component of gestating and lactating sow diets for both liver health and prevention of leg deformity. This segment also manufactures MSM, which is a widely used nutritional ingredient that provides benefits for pet health.
Sales of value-added encapsulated products are highly dependent on overall industry economics as well as the Company's ability to leverage the results of university and field research on the animal health and production benefits of our products. Management believes that success in the commodity-oriented 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 drive production efficiencies in order to maintain its competitive-cost position to effectively compete in a competitive global marketplace.
Specialty Products
The Specialty Products segment ("SP") re-packages and distributes a number of performance gases and chemicals for various uses by its customers, notably ethylene oxide, propylene oxide, and ammonia. Ethylene oxide 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. Contract sterilizers and medical device manufacturers are principal customers for this product. Propylene oxide is marketed and sold as a fumigant to aid in the control of insects and microbiological spoilage, to reduce bacterial and mold contamination in certain shelled and processed nut meats, processed spices, cacao beans, cocoa powder, raisins, figs and prunes, and for various chemical synthesis applications, such as increasing paint durability and manufacturing specialty starches and textile coatings. Ammonia is used primarily as a refrigerant, for heat treatment of metals and various chemical synthesis applications, and is distributed in reusable and recyclable drum and cylinder packaging approved for use in the countries these products are shipped to.
The Company’s performance gases and chemicals are distributed worldwide in specially designed, reusable and recyclable drum and cylinder packaging, to assure compliance with safety, quality and environmental standards as outlined by the applicable regulatory agencies in the countries our products are shipped to. The Company’s inventory of these specially built drums and cylinders, along with its five filling facilities, represents a significant capital investment. The Company also sells single use canisters for use in sterilizing reusable devices typically processed in autoclave units in hospitals.
The Company’s micronutrient agricultural nutrition business sells chelated minerals primarily to producers of high value crops. The Company has a unique and patented two-step approach to solving mineral deficiency in plants to optimize health, yield and shelf life. First, the Company determines optimal mineral balance for plant health. The Company then has a foliar applied Metalosate® product range, utilizing patented amino acid chelate technology. Its 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.
The Company's CODM is the Chief Executive Officer. The CODM receives a profit and loss reporting package which provides segment information including revenue, cost of goods sold, gross margin, total operating expenses, and earnings from operations. The CODM utilizes this monthly profit and loss reporting package to analyze segment performance and appropriately allocate resources.
Pursuant to ASU 2023-07, "Segment Reporting (Topic 280) - Improvements to Reportable Segment Disclosures", the significant segment information is summarized as follows:
| For the Year Ended December 31, 2025 | ||||||||||||||||||||||||||||||||
| HNH | ANH | SP | Other and Unallocated | Total | ||||||||||||||||||||||||||||
| Net sales | $ | 659,387 | $ | 230,852 | $ | 140,976 | $ | 5,946 | $ | 1,037,161 | ||||||||||||||||||||||
| Cost of sales | 415,102 | (1) | 180,292 | (1) | 63,611 | (1) | 7,523 | (1) | 666,528 | |||||||||||||||||||||||
| Gross margin | 244,285 | 50,560 | 77,365 | (1,577) | 370,633 | |||||||||||||||||||||||||||
| Operating expenses | 90,379 | (2) | 31,873 | (3) | 34,464 | (4) | 4,591 | (5) | 161,307 | |||||||||||||||||||||||
| Earnings from operations | 153,906 | 18,687 | 42,901 | (6,168) | 209,326 | |||||||||||||||||||||||||||
| Other expenses: | ||||||||||||||||||||||||||||||||
| Interest expense, net | 10,219 | |||||||||||||||||||||||||||||||
| Other expense | 77 | |||||||||||||||||||||||||||||||
| 10,296 | ||||||||||||||||||||||||||||||||
| Earnings before income tax expense | 199,030 | |||||||||||||||||||||||||||||||
| Income tax expense | 44,185 | |||||||||||||||||||||||||||||||
| Net earnings | $ | 154,845 | ||||||||||||||||||||||||||||||
(1) Cost of sales are primarily comprised of raw materials consumed in the manufacture of product, as well as manufacturing labor, depreciation expense, and other overhead expense necessary to convert purchased materials and supplies into finished product. Cost of sales also includes inbound freight costs, outbound freight costs for shipping products to customers, warehousing costs, quality control and obsolescence expense. | ||
(2) Operating expenses within HNH are primarily comprised of compensation-related costs, professional services, including advertising and marketing costs, and amortization expense in connection with certain acquired intangible assets. | ||
(3) Operating expenses within ANH are primarily comprised of compensation-related costs and professional services, including advertising and marketing costs. | ||
(4) Operating expenses within SP are primarily comprised of compensation-related costs, professional services, and amortization expense in connection with certain acquired intangible assets. | ||
(5) Operating expenses within Other and Unallocated are primarily comprised of compensation-related costs and transaction and integration costs. | ||
| For the Year Ended December 31, 2024 | ||||||||||||||||||||||||||||||||
| HNH | ANH | SP | Other and Unallocated | Total | ||||||||||||||||||||||||||||
| Net sales | $ | 600,258 | $ | 214,710 | $ | 132,749 | $ | 5,967 | $ | 953,684 | ||||||||||||||||||||||
| Cost of sales | 378,411 | (6) | 171,409 | (6) | 59,449 | (6) | 8,209 | (6) | 617,478 | |||||||||||||||||||||||
| Gross margin | 221,847 | 43,301 | 73,300 | (2,242) | 336,206 | |||||||||||||||||||||||||||
| Operating expenses | 85,890 | (7) | 29,288 | (8) | 33,394 | (9) | 4,725 | (10) | 153,297 | |||||||||||||||||||||||
| Earnings from operations | 135,957 | 14,013 | 39,906 | (6,967) | 182,909 | |||||||||||||||||||||||||||
| Other expenses: | ||||||||||||||||||||||||||||||||
| Interest expense, net | 16,528 | |||||||||||||||||||||||||||||||
| Other income | (72) | |||||||||||||||||||||||||||||||
| 16,456 | ||||||||||||||||||||||||||||||||
| Earnings before income tax expense | 166,453 | |||||||||||||||||||||||||||||||
| Income tax expense | 37,978 | |||||||||||||||||||||||||||||||
| Net earnings | $ | 128,475 | ||||||||||||||||||||||||||||||
(6) Cost of sales are primarily comprised of raw materials consumed in the manufacture of product, as well as manufacturing labor, depreciation expense, and other overhead expense necessary to convert purchased materials and supplies into finished product. Cost of sales also includes inbound freight costs, outbound freight costs for shipping products to customers, warehousing costs, quality control and obsolescence expense. | ||
(7 Operating expenses within HNH are primarily comprised of compensation-related costs, professional services, including advertising and marketing costs, and amortization expense in connection with certain acquired intangible assets. | ||
(8) Operating expenses within ANH are primarily comprised of compensation-related costs and professional services, including advertising and marketing costs. | ||
(9) Operating expenses within SP are primarily comprised of compensation-related costs, professional services, and amortization expense in connection with certain acquired intangible assets. | ||
(10) Operating expenses within Other and Unallocated are primarily comprised of transaction and integration costs. | ||
| For the Year Ended December 31, 2023 | ||||||||||||||||||||||||||||||||
| HNH | ANH | SP | Other and Unallocated | Total | ||||||||||||||||||||||||||||
| Net sales | $ | 550,751 | $ | 238,326 | $ | 125,965 | $ | 7,397 | $ | 922,439 | ||||||||||||||||||||||
| Cost of sales | 366,539 | (11) | 183,827 | (11) | 62,183 | (11) | 7,834 | (11) | 620,383 | |||||||||||||||||||||||
| Gross margin | 184,212 | 54,499 | 63,782 | (437) | 302,056 | |||||||||||||||||||||||||||
| Operating expenses | 81,793 | (12) | 26,923 | (13) | 29,203 | (14) | 4,944 | (15) | 142,863 | |||||||||||||||||||||||
| Earnings from operations | 102,419 | 27,576 | 34,579 | (5,381) | 159,193 | |||||||||||||||||||||||||||
| Other expenses: | ||||||||||||||||||||||||||||||||
| Interest expense, net | 22,613 | |||||||||||||||||||||||||||||||
| Other income | (681) | |||||||||||||||||||||||||||||||
| 21,932 | ||||||||||||||||||||||||||||||||
| Earnings before income tax expense | 137,261 | |||||||||||||||||||||||||||||||
| Income tax expense | 28,718 | |||||||||||||||||||||||||||||||
| Net earnings | $ | 108,543 | ||||||||||||||||||||||||||||||
(11) Cost of sales are primarily comprised of raw materials consumed in the manufacture of product, as well as manufacturing labor, depreciation expense, and other overhead expense necessary to convert purchased materials and supplies into finished product. Cost of sales also includes inbound freight costs, outbound freight costs for shipping products to customers, warehousing costs, quality control and obsolescence expense. | ||
(12) Operating expenses within HNH are primarily comprised of compensation-related costs, professional services, including advertising and marketing costs, and amortization expense in connection with certain acquired intangible assets. These expenses were partially offset by favorable adjustments to transaction costs. | ||
(13) Operating expenses within ANH are primarily comprised of compensation-related costs and professional services, including advertising and marketing costs. These expenses were partially offset by favorable adjustments to transaction costs. | ||
(14) Operating expenses within SP are primarily comprised of compensation-related costs, professional services, and amortization expense in connection with certain acquired intangible assets. | ||
(15) Operating expenses within Other and Unallocated are primarily comprised of transaction and integration costs, and unallocated amortization expense related to an intangible asset in connection with a company-wide ERP system implementation. | ||
Business Segment Assets
| 2025 | 2024 | |||||||||||||
| HNH | $ | 1,243,522 | $ | 1,185,962 | ||||||||||
| ANH | 176,608 | 161,243 | ||||||||||||
| SP | 172,076 | 161,283 | ||||||||||||
Other and Unallocated (16) | 94,046 | 66,883 | ||||||||||||
| Total | $ | 1,686,252 | $ | 1,575,371 | ||||||||||
(16) Other and Unallocated assets consist of certain cash, capitalized loan issuance costs, other assets, investments, and income taxes, which the Company does not allocate to its individual business segments. It also includes assets associated with a few minor businesses which individually do not meet the quantitative thresholds for separate presentation.
Depreciation/Amortization
| 2025 | 2024 | 2023 | ||||||||||||||||||
| HNH | $ | 30,119 | $ | 31,668 | $ | 38,568 | ||||||||||||||
| ANH | 7,282 | 8,233 | 7,876 | |||||||||||||||||
| SP | 7,365 | 7,044 | 7,278 | |||||||||||||||||
| Other and Unallocated | 924 | 1,028 | 1,213 | |||||||||||||||||
| Total | $ | 45,690 | $ | 47,973 | $ | 54,935 | ||||||||||||||
Capital Expenditures
| 2025 | 2024 | 2023 | ||||||||||||||||||
| HNH | $ | 21,218 | $ | 17,570 | $ | 26,415 | ||||||||||||||
| ANH | 16,830 | 13,201 | 6,993 | |||||||||||||||||
| SP | 4,628 | 4,050 | 3,535 | |||||||||||||||||
| Other and Unallocated | 517 | 327 | 331 | |||||||||||||||||
| Total | $ | 43,193 | $ | 35,148 | $ | 37,274 | ||||||||||||||
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Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 20, 2026 | Showing above |
| 2024 | Feb 21, 2025 | |
| 2023 | Feb 16, 2024 | |
| 2022 | Feb 24, 2023 | |
| 2021 | Feb 24, 2022 | |
| 2020 | Feb 19, 2021 | |
| 2019 | Feb 21, 2020 | |
| 2018 | Feb 28, 2019 | |
| 2017 | Mar 1, 2018 | |
| 2016 | Feb 28, 2017 | |
| 2015 | Feb 29, 2016 | |
About Segments Disclosures
Segment disclosures break a company into its reportable operating units, revealing revenue, profit, and asset allocation that consolidated financial statements obscure. Under ASC 280, segments must match how the chief operating decision maker views the business, providing a window into internal management structure and resource allocation priorities.
Key signals: compare segment margins to identify which units drive profitability and which destroy value. Watch for changes in the number of reportable segments — segment aggregation or disaggregation often coincides with strategic shifts or attempts to obscure declining performance. Intersegment elimination patterns reveal internal pricing practices. The reconciliation between segment totals and consolidated figures exposes corporate overhead allocation and unallocated items. Geographic revenue concentration highlights regulatory and currency exposure. Compare segment-level capital expenditure against segment revenue to assess where management is investing for future growth versus harvesting existing assets.