Balchem (BCPC) 10 Nov 182018 Q3 Earnings call transcript

Ladies and gentlemen, greetings and welcome to the Balchem Corporation Third Quarter Financial Results Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Bill Backus. Thank you, you may begin.

Ladies and gentlemen, thank you, for joining our conference call this morning to discuss the results of Balchem Corporation for the quarter ending September 30, 2018. Backus, Officer. Bill is name Chief Accounting My And our Chairman, call with Ted Harris, me is CEO hosting this and President.

factors Following would our counsel, this does or the auditors expectations and could Balchem's can identified reflected uncertainties. which will results risks that beliefs likely risks the We our advice contain, give correct, expectation SEC, contain, no forward-looking and that or including prove and time, materially various like forward-looking in in statement. forward-looking differ I read to the This cause release statements to concerning XX-K. expectations, reflects from will involve events assurance Balchem's our Form of factors statements, at and future

cautionary Ted turn call statement. I Forward-looking our qualified Harris, statements President. are will over the this in to CEO by their and Chairman, now entirety

and morning, income direct per The million, our expenses expense basis. reported related a rules. third consolidated $X.X net gentlemen, Thanks, sales morning, share record Bill. quarter call. and in we $XXX welcome or Good $X.XX This includes $XX.X statements. result resulted million third GAAP quarterly non-cash to of of on This of result the ladies and assets, valuation business amortization in combination conference financial which million intangible of for a which were GAAP is acquisition, recorded quarter acquisition amortization net accounting

period third of versus the exclude per $X.XX facilitate and press period. third quarter $XX.X year includes non-GAAP performance, our of also million Consequently, of a items million share, of per this quarter of acquisition to was quarter above $XXX,XXX share record. or comparable third X.X% $XX.X this This million, evaluation Bioscreen. a earlier net or million in of morning, the were $XX.X in third related prior-year Adjusted quarter integration of release record above prior reported and also XXXX. $X.XX million was current comparative net the and of to $XX.X or quarter largely were per quarter the operating our transaction EBITDA or These share the million earnings $XX.X XX.X% $X.XX $X.X or million earnings these non-GAAP $X.X cost, posted

quarter third $XX.X delivered of million. also cash free flow We

sales year-over-year Our the X.X% result business comparable of $XXX.X net gas of decline Products. $XXX record quarterly than and oil Nutrition XX% achieving quarter Three with four solid the and in third sales were out achieving quarter, segments Health prior of our higher Specialty a million sales. the in & Products, quarter of sales, quarterly record Human significant within million despite Industrial reporting the delivered growth year all-time

increase QX The $XX period consolidated same were record. margin or were in X.X% up a driven was with by the and third gross primarily million of higher sales. quarter compared the dollars the year million prior $X.X Our

as XX prices. the consolidated mix selling margins certain margin Our & September Industrial primarily Products basis XX, margin the expenses by Consolidated to in average gross higher months as XXX million quarter, primarily increased the increased Specialty to plant Health $XX.X three operating XXX mix compared prior points mix & the million from for higher September XX.X% due lower segment by year resulting months to points and average compensation compared XX.X% increased comparable points, and with XX.X%, increased certain selling basis gross certain Animal improved Gross raw basis operating for an to Gross prices. segment $XX.X by expenses. XX the average quarter, volumes, to three price. to and the insurance segment XX, in due primarily margin and primarily material increased points to Product to and ended by increased to for was certain to volumes. due for IFP monogastric due costs. selling XXXX, QX recovery, margin were the XX up and Health and mix impairment partially basis due points basis to XXXX, higher timing principally tradename, and offset related Nutrition percent primarily due of of associated expenses related decrease of gross Gross by The Nutrition amortization primarily the marketing decreased expense higher was Human for of sales margin charge noncash the nutrition XXXX. ended intangible from assets, XX.X%, selling

intangible of operating sales. of million Excluding assets transaction expense of noncash and and operating $XXX,XXX with million, were associated cost $X.X amortization $XX.X expenses XX.X% integration of or

September ended million adjusted The Interest our months decrease net and rate the tax And release ended forward, will million, earnings down Products. This is attributable third infrastructure. XX, primarily SG&A third earnings XX.X% million. the our pay net expenses $X.X which company's XX operating quarter, expense were our on earnings was morning, $XX.X impact focus of Nutrition from GAAP quarter existing and an or as leveraging segment Health and or $XX.X tightly three the on XX Specialty as of to Record Human basis, our tax in debt quarter. million increase XX.X% XX.X%, of our continue Specialty in was segment. loan. the revolving the million, we increased comparable net $X.X from with our for operations rate leverage Looking comparable growth a of This million XXXX, On $X in to year detailed September Nutrition controlling prior quarter prior to & adjusted all-time Products Health to record million primarily for from earnings compared operations our XXXX respectively. $XXX.X quarter was year debt Human adjusted were in ratio and reflects the due XXXX, on effective and months this third our XX, increased effective $XX.X X.X% due tax reform. debt three and earnings record & September September The in earnings X.X. was

the $XX.X quarter up $X.X As million, the million quarter consolidated quarter. noted, of a previously income from prior net at year closed record third

or income This into per of quarterly earnings XX.X% our the record in adjusted or $X.X year increase net diluted release, third cents comparable of with an of On or earnings the diluted $X.XX an share for prior last quarterly $X.XX year, up year's million $X.XX. quarter $XX.X current earnings basis, as result $XX.X over quarter. per -- detailed our translated $X.XX diluted per share million were share in share, per the compared $X.XX million and adjusted net net

generated of of XX.X% sales XX.X% or increase $XX.X with EBITDA million $X.X $XX.X results record Our of adjusted sales prior quarter or million the compared quarterly X.X%. an third or of year, million in

strong, on flow cash free flow the as third of we sheet. generated our $XX.X cash noted, million record million balance and $XX.X of with quarter quarter previously As the cash closed remains out the in as reflects funding of in revolver and balance $XX.X Bioscreen the $XX.X cash payments capital of of This growth million. $X.X expenditure quarter as million million earnings net acquisition well in the

call the and update like the back to Bill would growth our a results strategic segment, of on by initiatives. I activities detailed passing Before you to key few cover to

the about seed three ingredients of Murano We Bioscreen markets, are fermented the the from facility. nutrition acquisition for Nutrition of encapsulated Bertinoro, hours our pleased Animal with Health headquartered and a technologies Italy, very manufacturer & S.r.l, in

for with better negative technologies rationale from employees brings of encapsulation growth helping acquired feed of our provide digestive bacterial Balchem strategic such which excited the fiber intestinal fermentation and and ruminant product primary to most as the Europe to achieve non-bacterial fermentation Balchem. to unique and These Bioscreen and L animal site fermentation including manufacturing improve across Bioscreen part as an highly encapsulated a benefits portfolio. well and acquisition, talented and in digestibility comprised of as the include was monogastric nutritional processes, producers Balchem NitroShare, platforms capabilities AminoShure-M market. ReaShure, of to team We're and which engineered inhibit and also both NiaShure are impacts our broaden benefits and achieve encapsulation accelerate ingredients pathogens. and common dairy to for multilayer coating the species. those The chilling technologies European While have streams, health, technology spray

to the after Safety Drug Authority's and essential by Dietary nutrient. first work Reference Food Intake European for ever intake the and continue choline We Administration of hard around awareness issuance to the this the Food progress recommendations

I to Hayfield manufacturing the from two We quarter, follow-on months. several Last of three showed from on mothers The able are this transferring benefits would positive mentioned at a to associated Balchem infant indicated that believe findings choline we on last study the development, of who Caudill will from be and are we pleased children, role years life briefly cognitive while we have would like complete into IFP, function As been manufacturing appreciation study to early Cornell network. study year if to choline this the that childhood last update is benefits are on received this made do seven you study been the soon of a of and that integration University, and facility by share expand Minnesota that and published and in in the activities reports have site or utilize study helped within next Cornell that first and neurologic seen nine we acquisition study, also and determine we with the researchers Dr. the testing will early nursing. quarter, increased of that findings. the same we have pregnancy fund pregnancy supplementation production within neurologic during to the old June of excited the understanding levels Processors, an QX, and adequate We extensive recently critical in our about we over Food the study on to update conducting sustained from other sites the findings the childhood. completed, yet, we particularly not closure are the Innovative the from has expect of to results planned now the we year. the this we

the pleased fully are transferred production facility Hayfield other is been and sites. report the closed, now has indeed to to We

went kicked five many embarked This and continued closed year project the of IFP project fact, ERP The into yesterday operational our was is the have live the initial XXX. integration the went live complete. as will part are planning, we is critical are back on turn you for well, Bill? to much project April, full Systems. this pleased In project our ago, and lastly, of for And know, just to $XX company. into one, forward and important the us after the report early we of a business efficiency XXXX. across to Microsoft we look an we is of last systems through we on million detailed the In with the initiative the project the company going and consolidate over so important for just Bill, we about Hayfield consolidation as system. the an sale now I'm the call who and we of Balchem This starting off first week, property implement Cereal growth dynamics go by unit segments. to implementation to now the results financial across

Thanks, Ted.

the were by choline For primarily year record markets, quarter, X.X% sales beverage by systems volumes a improvement and The and Nutrition due Human partially powder increased The was quarter. systems prices driven mix. average nutrient our XXXX into and favorable of from and selling or of prior quarter, was flavor $X.X higher & higher sales sales. increase and lower to million sales, powder due $XX.X the an chelated minerals to systems million, segment Health increase a sales primarily food offset comparable higher

growth, very in magnesium in role pleased products among owners continues critical to of in be Albion with significant to as and chelated experience branded are human strength the understood brand nutrition particular our magnesium consumers. minerals, better continue the We organic

to sales Third quarter compared unfavorable the increase million and the costs. and comparable partially this due aforementioned with segment expenses, certain quarter, year operating XX.X% $X.X in by earnings from earning material offset of $XX.X million an higher or were prior million, higher $XX.X raw operations mix, for lower primarily

protein and this with higher economic species market, these flagship increased the prior economics, poor product this of of in Animal product ReaShure, to assets operations reflected the average to Excluding or to ruminant dairy challenging milk particularly the Sales quarter continue Health segment by million compared million and year, in Despite volumes in product Sales monogastric to by driven volumes acquired of quarter, the continued conditions demand million $X.X animal market a million, in comparable for ruminant for in earnings of the prior prices or this third milk year. have million from adjusted noncash dairy from America resulting or comparable through we due was choline, markets our performance rumen-protected from of where prices. million $XX.X the the quarter. compared X.X% the expense The targeted were with increase third feed by decreased market-leading low primarily remained global quarter. environment market XX.X% year & and lower selling $X.X prior prior increased $X.X year North and Europe, the compared lines $XX.X the to compared prior America intangible quarter. the effect the brand, associated as in difficult be $XX.X Nutrition to pleased sales XX.X% XX.X% into amortization million of to for North grow segment healthy sales $X.X

noted As benefited on million QX of supply QX QX last by we of year $X China. to from we call, disruptions last of year, quarter's out and choline $X in this of million and

$X.X this indicated, occurred. no expect exported from has year, by Health through sterilization and in slightly been as were increased would from half from quarterly QX, In offset mix, quarter raw Animal of down we this see previously unfavorable the and also only sales saw we of their volumes were as QX, diminish disruptions higher the the benefit Nutrition indeed million benefits $X.X costs driven quarterly was for $X.X exports year supply for record oxide benefit we the segment prior sales second increase million certain modest have the of higher and quarter nutrition comparable plant operations Chinese prior The of selling, XXXX. products of Chinese earnings device comparable million as from & the material the to three by restored. of September $X.X lower As million XXXX, an months Products ethylene and achieved Specialty $XX.X ended were million $X.X operations months September medical from $XX.X of marketing and three million. versus research earnings volumes with compared XX, quarter, increased expenses. The ended higher X.X% third million the increase sales Specialty market. XX, in for

sequential decline We the with decline believe fracking the slower fracking to reduce pricing $XXX,XXX, the choline quarter from amortization of driver million Excluding the prior expense increase of by this used the intangible marks the higher $X.X third consecutive assets of has this in segment fracking earnings sales for efforts in quarter volumes raw certain XX.X% activity to effect for been of along cyclical with adjusted This quarter, choline acquired business non-cash expect or $X.X Industrial compared this of The primary and back and Permian of cost basin, taken of In an million to associated have applications. the in in market. primarily reduced permitted. quarter, $XX.X business, derivatives sales Xrd increase operations were continued shale do We driven in the middle of logistical gas million other fluids from remain mitigate But due oil X.X%. Products as up the basin. was segment, dilution. nutrition decreased past, about transportation help primarily rising costs year, pick the are to year historically for terms this where contract of in we plant comparable costs completed actions cautious as next material the as increased as the Permian we million around through discussed and solutions to $X.X prior well business.

of for the million quarter, primarily a the the turn decrease year Industrial earnings the Ted from and volume. with closing I'm Products operations million going remarks. sales over call compared back prior reflects segment reduced were Our $X.X $X.X for now some to to

quarter of Thanks, million. and $XX.X year-over-year. up million, of Record record Bill. million third cash third adjusted of across with of $XX.X free quarter record revenue $XX.X three $XX.X earnings third our growth We quarter of flow segments, XX.X% operations delivered quarter third year-over-year four EBITDA from earnings record net million,

generate strengthening sheet our of trailing $XXX.X that economic flows on our or revolving to acquisition continue reduced September XX XX uncertainties, has adjusted cash EBITDA, We opportunities. we balance sheet. organic our are facility X.Xx net and been to as further credit current strong With million the debt strong months capitalize growth both and us pleased and to provides balance flexibility

We uncertainty of the our highlight segment, of a do, fracking model. within global continue in we in third demand, increasing the strength strong the serve the trade a results side light & the across of costs. quarter and from Industrial ruminant face again, markets however, to business macroeconomic Health commodity slowdown environment, Animal input particularly, Products currency ultimately, foreign impact and dairy their resilience once a Our and economic changes, perspective, prices on most of segment, Nutrition difficult within and and likely

We be and these where implementing mitigating watching possible. as evolve macroeconomic they strategies, closely challenges will

for progress the pleased nutrient, strategic made as rumen-protected discussed Health our of new are Bioscreen manufacturing a particular, the essential we awareness related with exciting Balchem's an on nutrients. Nutrition European last newborn our quarter. platform to encapsulated for the health segment initiatives, expand research choline to and calf that our key choline & And the in We growth provide of growing Animal have acquisition

initiatives, call on who would the management will over Bill? hand opportunities. to cost continue like strengthen company and disciplined other our to acquisition these seeking up We the growth and Bill, questions. I our will open back for creating call by exercising focusing value now to

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

Instructions] research. comes from the line now be Q&A and our Thank Ramey of from session. you. Our gentlemen question Tim Pivotal [Operator conducting first Ladies we’ll

segment look disclosure the you that from to be EBIT dropped adjustments Bill, put we our those adjustments the amortization first we're have does on line. kind wrong where it that -- going it hard to of this. make of And do the in seems

I in $XXX,XXX up mishear, me amortization I reading in missing, heard I here? think add comments, really number. Human I correctly, am I As to heard your Specialty am the out I what Did believe, I to million I enough not in Products. help heard $X.X then Nutrition, didn't and

those to have that's You that the reasons why add we back heard year-over-year. out, really help correctly, but and are are We required can the Tim. those different certainly two -- those, anything amounts are

are and really so put we year-over-year, why amounts because other different not the these are insignificant in the that The that's change. to these chose represent one

you full could the to the in Animal guess? If me bridge other what tell that me assume amount? segment I would that's -- amount would Or what be Nutrition, I to in, me that's get

Right. Animal not right, Products its little you're much terms going a to exactly of related Nutrition, the to have that's of Industrial in change, amortization segment.

helps. impacts the certainly impacts or in can you from that out FX quarter? Any them it call you throw If would in, tariff

Yes, FX it slightly as on but -- so as for fairly impact ever it the I the and think dollars negative, actually quarter. far line, was quarter, couple earnings, slightly inconsequential, maybe sales on operating the just it thousand hundred of was for a was the but very little negative

about trade how Okay, tariffs?

price meal think and versus is a think soybean that minimal. direct our the on the China. and of good impact this, indirect, China product, and which competitive Balchem, have actually raw I a we from new direct million has buy tariffs The being about is that China, take of those I impact products created acid on have soybeans because tariff is But when we direct only which buy $XX tariffs. product I'll dynamics. $XX our increased fallen NitroShure are really, really buy, could about of list. in million example largely that's from of about is one that sorbic to impact the biggest from buy been about products tariffs, some the and We materials China We fairly competitive from comes

it of to based through hits. about to are million. to talked move does will us then increase to that from total buying those now. could to try We us QX, XX%, hundred kind substantially, working really our in reasonable of We base and/or the as that's to supplier million will couple trying dollar So about to of time tariffs raising if hard XX% we impact a be avoid $X but on $X impact offset be other value a That still a diversify and the total that last countries think prices. to impact about that the thousand

but it. So we we're about $X Turkey large minimal that's China total little today, of be impact to avoid Tim, and really are And that real Good increase, a we're to answer, from example apple business. working million to do bit is possibly hard fairly that juice right and buy a is offset we now. able long in million. across shifting But the $X that our impact to part could to concentrate

Okay.

Just clarifications assuming other sale what in say on couple that I'm on Can were of fourth proceeds and you a quarter? the that the the Hayfield plant. hits

will in value be say, I'm what sorry and quarter it -- was. gain That I the will the $XXX did be what property million over over gain of what about the $XXX,XXX fourth

for notional And about amount, think I the reduction, cash purposes? debt so can

going It's after few ultimately a thousand hundred proceeds. be only dollars, to

take adjusted And big EPS. deal. the did your charge, impairment that? that you how Okay, And of not out a was big

we about it left and adjusted, you $XXX,XXX, be it in so even out not of would add obviously, it was better. back, did we the number, if That take numbers the

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

You are now live.

is for Ram. on This Julian

have First, any into I or might visibility bearing you trends, fracking this your whether choline-based recent and on agent not you if world any demand. was just curious current have think DC

repeating sorry, me. I'm you would for mind that

on could demand? agent you choline-based trend on guess I if has trends. recent world was And comment Yes, that sure. bearing I any if DC just curious fracking

cost in in up yes, about really our going at are hear Permian couldn't over are DUCs refer being DUCs but, I We sorry, XXXX, and we reduce that basin them to Absolutely, on as completed QX, the This transportation the pipelines those business. there until out you X% as the region are good the pipelines But and the beginning. up is the will up and oil the we mid-next And significantly ground and over a, about gas of leave a know completed just now year. are see gas indicator oil of companies what's DUCs deciding really are that think so. XX% in in in oil of for more to early actually basin. you XX% being up than even that DUCs the really to the the Permian that and

But So That's why we in the picking fracking Bill's see as to meantime, the see some in year prepared comments, we stated will start Permian it that get QX, we activity do to and start similar up essence mid-next that picks Industrial down DUCs feel going but in in from to as we though also see in we back pretty be for back released don't activity QX here, up. basin. to it our until the we business don't occurs expect increase

was nutritional provide quarter, I to on had curious impressive what of this pretty the growth drivers just color results. H&H segment upstream human like are for if some any choline? seems It be you demand able might

investing Nutrition, being have choline and are units with driven which really this. Health, that the well pharma now awareness nutrition is choline demand that for pretty available announced were but Yes, new the operating robust three in is quarter of we a nicely. Yes, within by business QX up include them quarters for quarter very singles the actually was from we get up. see human question, perspective the significantly choline at that business, include We is choline three across performed the ago pleased Human that perspective. certainly. The being all our of availability business. are as really as We -- human few number to certainly an Walmart income revenue increased well Nutrition specific your a of Target. with Human introduced as part also & I'll and Increased products we're But both

there new in supplements. seeing really whether and the numbers. product in going with it's out showing that's of up are gross a So we nutritional included Walmart Target at there's on or launches lot numbers, beverages choline and what's and availability innovation those our And driving

question, update my curious updates and program, recent any just CM-AT the autism I from we the was last to might for get there And an when if program? have

It take Yes, the phase, That longer by year. we little hoping to completed been the have analysis next updates. and really and little that is NDA by is into CureMark now We that year, here of any its were filing originally end where relative there been taking than that, really CureMark thought. that still had more in have not CureMark obviously, be would've the and data an bit would than has a into time any we is we moving originally don't insight clearly analysis. bit does time, it had taken thought.

research. follow-up a Instructions] of Tim from Pivotal from next is Ramey line question Our [Operator the

for I market them, Am you And clarification, supplies I formula if been choline who think correct for, in can is in long has you a compete a infant don't? a that? Just time. that

we represents that the and really Tim, that correct, That's supply market largest into today. single

have infant for years. human supplied choline formula we So many many, into

Johnson Mead and Nestle and that. selling we're Abbott, like to companies So

part very of we half the a that's business of at business. as look its probably and, So our about important business, that

we could could area locally included change, good on So percentage amount working choline obviously penetrate that's feel is choline formula The big like to it, does infant market why in of choline made a higher further we're China of that's that infant be we have formula. not evidence that have something and infant in a in typically of around an opportunity. then formula, we point vitamins, we another kind U.S., nutritional way in but and of today it and take multivitamins so to our we that's infant formula can increase infant is to on are moves for Europe really supplements, business. formula our of infant formula. prenatal those business, to our actually in try penetrated, focus It's highly levels the different will Most at increase us And beverages. this

should Is be? that you're manufacturers big in to of data the now, opinion or selling higher would where high levels it suggest they that are your the choline they

makes fed higher benefit, do significant we of prenatal I historically where, value mothers amounts, we But as that study Europe think as for think the showed levels to choline Europe in well basically it she of formula on pregnant and that to think, choline Caudill significantly had increase. in has vitamins. that based infant in amount doses in cognitive also that lower sense recent could increasing there be the

do make suggest sense. some higher think we would is amounts evidence that So there that could

follow-up Okay, one more monogastric just on sales. the

I in more XX.X% a there. would that, chickens XX% deceleration in inventory was more don't stocking, feed said higher the do it what To XQ, the increase, than is I thinking, of Certainly was we was attribute more rations? there? there's use going it which think issues? out on perhaps What's see is China you you think I from I thinking

volume has little will really, been We area betaine fed in some one really example to selling of past, talked we've higher suggest. than us been China more choline, much some the not that And ration grow to changes bigger feed would our Eastern diets, the from positivity, significantly. you and that last would going not to the company and to early sort the And you be increase driver in do of as -- any our we that's on, and Chol-Mix growing. did in we've situation recall bit from than in up to Europe is see additional allow of grow our of use are would bought volume in the a the pretty before selling think last business choline for up the aside these But Europe, if we Europe significantly, see faster brought our transitioning the up are prices able really business when our business year. some in are amount pretty We ability amount, market so our that same. macroeconomic don't year, actually of there stays significant market typically, prices

getting really to and number. it's of a combination us prices a higher So that selling that of that's significant

therefore being providing a you? product, that prices higher Are the which or of tariffs to or and non-U. related umbrella for from is China betaine, the is selling bit in price a think a I choline trade S. is anyway impacted

cost, primary driver. driven have but ability Yes, pass our is the material those material what's been do extent, up that's on raw costs material are cost to to to this customers raw we higher some and and raw our really good

us I year that year, benefited in in and you QX this QX mentioned think QX last of so more of things in less those QX. and

Terrific. Thanks for the help

as and think fell dry as been just that but it call at as is product off and a to versus role premium other impact that's there dry sold product Tim, probably we bit thing factor playing I selling is is of have one liquid there a finish also you we our well. product, more liquid maybe. a mix to a

of Mitra & from question next Sidoti from Ramgopal the comes Company. line Our

how have just terms in I First, material costs of impacted follow-up raw wanted to this much -- on it quarter? the might margins

fingertips. my don't answer that have up Raw your And a material get on. really exact costs follow I are bit an we little at separately, just difficult question to to maybe, could

maybe to Okay, no, about projects us talked efficiencies the that'd capabilities. know you of give Ted, you things great. investments you're if be some was overall on I I and wondering, that front? doing and could improve And

heat We We've creating of significantly our efficient in cogeneration gas sure. a that Italy processes our Murano, in dryer Yes, that that example. as put Chol-Mix. site in put in dryer recently recently put manufacturing was one in facilities, in acquired more as in dryers that's our in really exchangers that good older facility there are more well energy choline a our at were That's We've than natural efficiency. was the in the efficient. unit a brand-new several

they to the are to us they not to manage important invest our continue items, really of huge projects, are those but in So cost. ticket for are necessarily kind

seeing on any that's know is you I have Okay, talked the you're market Nutrition And you've there? to technologies, traction opportunities Animal the maybe food. in if then great. or about of in was terms one the of animal that segment, I technology, transferring past -- the if pet wondering

Yes, to of to business that that's pet starting the food. business see been note thing we pet are and, traction area I about think important our historically food one monogastric some has the one is in third

new acidulants chloride food version what into PetShure late to have our choline that introduce products into years. do anywhere industry grain of we've free from pet preservation of to been So been to we for sold for really has foods. with market the launch trying of And a pet

And product a that so, year-over-year base, a has growth is XX% well are healthy relatively been these relatively our I show quarters very about some products, and performing business few of new but last historical to would starting in to it's which off addition this this is is in we seeing and line, small traction. over the our say business up

you obviously, think How you've a And the strong basis. you're of for look terms regular recently, acquisitions going of then use in priority cash down you some paid plan priorities you the on and done dividend we in increasing forward? light should at overall on as the debt, capital free finally, allocation, generating

this few over the an that years. I really changed is think, area last hasn't

selling Our capital R&D for in crystal first that's human investing or our marketing growth, is in likely additional investing plants, and additional at be chloride choline year, example. next will clearly or priority organic we capacity an whether expenses

something over not on years. So been primary we targets, repurchase, the been be doing those require our We're time, have around investments. share and acquisition focus significant is has our our capital say return committed focus has then, a then that on I dividend, been like and very that fairly over for screens committed to We're And last some we acquisitions. the really investments surgical that we're to year-over-year increasing that. and to lastly, few secondarily, selective that really just would try would

this queue Ted gentlemen, further the in have I questions and to over to closing no Harris we floor at for would time. like turn comments. back Ladies

I material into Just impact. make Bill before additional wanted an we comment closing raw to around get comments, think

Yes, or at Mitra, choline clearly from we've year. our been for feedstock just some somewhere if raw year-over-year prior slightly to example, at And being above significant that's get materials, inflation major we're material too. at back the you up look for every costs individual the without quarter-over-quarter XX% to you, where materials raw looking raw had some of chloride, looking raw other cost,

is I used also can which nutrients tartaric point product of is part Another line. one choline for acid out

with as increase do. it's know, you of what choline particular, quarter-over-quarter. chloride think XX% we in I the a above big So It's part slightly

thank with your brings QX XXXX I was everybody Okay, good call continued and Balchem, to financially today very out a just full year. support reporting our And and with February will we for company. of joining Bioscreen what feel results results, forward like that, year it for in would the our next both strategically, QX which to acquisition be and We and look pleased quarter like company. the to of

call. for the So joining thanks again

conclude ladies you, our does today. and gentlemen, Thank for this teleconference

have you may wonderful disconnect this your and day. at a your now You for Thank time. line participation