HAMPTON, N.Y., Feb. 12 /PRNewswire-FirstCall/ --
BALCHEM CORPORATION (BCP - AMEX)
Reported (unaudited) for the Quarter and Twelve Months ended
December 31, 2002
For the Quarter:
Fourth quarter records were achieved in both sales and net income based on growth in the ARC Specialty Products and Encapsulated/Nutritional Products segments of the Company. Net sales increased 2%, while net earnings increased 5%. Diluted net earnings per common share rose 3.7% over the comparable quarter for 2001.
The ARC Specialty Products segment generated net sales of $5.7M, up 9.5% over the comparable quarter in 2001. Net sales in the Encapsulated/Nutritional Products segment increased 4.1%, to $6.2M, based principally on growth in the international food market. The domestic food market was relatively flat versus the prior year due for the most part to changes in customer purchasing patterns. Reashure(TM), for the Animal Nutrition and Health area of the dairy industry, was flat as well due to an extremely difficult economic situation in this marketplace with low milk prices reaching near 1960 levels. We also realized $2.4M of net sales in the Unencapsulated Feed Supplements segment, a decline from $2.9M in the prior comparable quarter, largely due to the discontinuance of the sodium benzoate tolling business, which occurred in the first quarter of 2002.
Consolidated gross profit in the quarter ended December 31, 2002 improved $0.2M, or 3.2%, over the comparable period, due largely to growth in sales volume. Operating (Selling, R&D, and Administrative) expenses increased to $2.8M in the quarter, or 19.2% of net sales, up from 18.3% of net sales in the prior year quarter. The significant portion of the increase in operating expenses is due to increased rental expense and depreciation on leasehold improvements associated with our new headquarters/R&D facility and a significant overall increase in insurance premiums for the business.
For the Year-End:
Significant record results were achieved for the year ended December 31, 2002.
Full year sales increased 30.5% to $60.2M from $46.1M in the previous year. Net earnings increased $2.3M, or 45% over the previous year, to $7.4M resulting in a 42.0% increase in dilutive net earnings per common to $1.50 per share.
At year-end, the company had outstanding long-term debt, including the current portion, of $11.3M, a $1.7M or 13% reduction from previous year-end. In the year, capital expenditures totaled $10.0M, which was funded from operating cash flows. Increased levels of capital investments in 2002 were made with a view to positioning the Company for continued growth and to enhance economic performance. Earnings before interest, taxes, depreciation and amortization (EBITDA) were $15.1M for the full year.
Commenting on the outlook for 2003, Mr. Dino A. Rossi, President and Chief Executive Officer of Balchem, said "At this early stage, due to the expected timing of and, in some cases uncertainties as to, new product launches in the Encapsulated/Nutritional Products and ARC Specialty Products segments, we anticipate moderate earnings growth for the year. We expect results of the Unencapsulated Feed Supplements segment to be relatively flat compared to 2002 performance."
This release contains forward-looking statements, which reflect Balchem's expectation or belief concerning future events that involve risks and uncertainties. Balchem can give no assurance that the expectations reflected in forward-looking statements will prove correct and various factors could cause results to differ materially from Balchem's expectations, including risks and factors identified in Balchem's Annual Report on Form 10-K for the year ended December 31, 2001. Forward-looking statements are qualified in their entirety by the above cautionary statement.