Balchem Corporation

and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to majority question again, press the star one. I would now like to turn the conference over to Martin Bengtsson, Chief Financial Officer. You may begin.

Good morning, everyone. Thank you for joining our conference call this morning to discuss the results of Balkan Corporation for the quarter ending June 30th, 2025. My name's Martin Bengtsson, Chief Financial Officer, and hosting this call with me is Ted Harris, our Chairman, President, and CEO. Following the advice of our council, auditors, and the SEC, at this time I would like to read our forward-looking statements. Statements made in today's call that are not historical facts are considered forward-looking statements. We can give no assurance that the expectations reflected in forward-looking statements will prove correct, and various factors could cause actual results to differ materially from our expectations, including risks and factors identified in Balkan's most recent Forum 10-K, 10-Q, and 8-K reports. The company assumes no obligation to update these forward-looking statements. Today's calls and commentary also include non-GAAP financial measures. Please refer to the reconciliations in our earnings release for further details. I will now turn the call over to Ted Harris, our Chairman, President, and CEO.

Thanks, Martin. Good morning, and welcome to our conference call. We were extremely pleased with the financial results for the second quarter of 2025, as well as the ongoing strong performance of our company. We delivered record second-quarter consolidated sales, adjusted EBITDA, adjusted net earnings, and adjusted EPS, with -over-year sales and earnings growth in all three of our reporting segments. Before we get into more detail on the quarter, I would like to make a few comments about the overall market environment, including the evolving global trade situation, as well as some of the new science that has recently been published supporting our various minerals, vitamins, and nutrients, and an important capacity expansion project that we are working on. We continue to see healthy demand across the vast majority of our end markets. Our human nutrition and health segment continues to perform extremely well, driven by strong demand for both our unique portfolio of nutrients and our food ingredients and solutions, which are benefiting from trends toward nutrient-dense, high protein, high fiber, and low sugar, or -for-you foods, where our nutrition and formulations expertise brings considerable value to our customers. In the animal nutrition and health segment, we delivered another quarter of -over-year growth on healthy demand in both our monogastric and ruminant businesses, as market conditions continue to improve. We were very pleased with the European Commission's recently announced provisional anti-dumping duties on Chinese choline of 95 to 120%, which is an important step in reestablishing a level playing field within Europe. Final measures are expected by the end of the year, and after many years of injurious pricing by Chinese suppliers, these measures should undoubtedly help contribute positively to the overall growth of our animal nutrition and health segment in the coming quarters. And within our specialty product segment, both our performance gases business and our plant nutrition business are performing well, driven primarily by higher demand. Our outlook for the second half of the year also remains positive. As discussed at length on the last earnings call, we believe we are relatively well-positioned to effectively manage through the current global trade environment. As a reminder, we have several advantages of note, including an intro region manufacturing and sales model where approximately 85% of the company's sales are manufactured in the same region where they are sold. A global supply chain with little reliance on China, a robust US manufacturing footprint and strong market positions that historically have provided us with the ability to raise prices to offset rising costs. Given today's global trade environment, we remain nimble and flexible to adjust accordingly as market conditions evolve. Additionally, I am excited to share some progress we have made in our scientific and clinical research pipeline, which continues to bolster our human nutrition and health segment. Our current pipeline features over 20 active clinical studies focused on evaluating the benefits of certain nutrients, including viticoline, K2 vital, opium SM and Albion minerals. These studies are integral to our strategy for entering new markets, expanding our ingredient categories and building consumer awareness. In Q2 of this year, our sponsored research and collaborations resulted in six significant publications and year to date, we have had a total of nine research studies published. I'd like to highlight two specific studies that we are particularly excited about. The first is focused on dietary choline and Alzheimer's disease. This NIH funded study examined the relationship between dietary choline intake and the risk of Alzheimer's dementia. Data was gathered from 991 retirees participating in the Rush Memory and Aging Project in Chicago, who were monitored for an average of seven and a half years with 27% of participants developing Alzheimer's disease. The study found that a daily intake of choline above 350 milligrams was linked to a 51% reduction in the incidence of clinical Alzheimer's diagnoses when compared to those consuming less than 200 milligrams per day. These findings align with previous research such as the Framingham Heart Study, reinforcing the notion that higher choline intake is associated with a decreased risk of cognitive decline. The second publication that I would like to highlight is related to OptiMSM, our premier branded methyl sulfonylmethane and its favorable impact on exercise induced oxidative stress. This study explored whether OptiMSM could offer protection against significant oxidative stress from intense exercise in experienced runners. Participants received 500 milligrams of OptiMSM or a placebo for 27 days, followed by 1000 milligrams or a placebo for another three days, just before participating in a half marathon. Blood samples taken before and after the exercise analyzed 785 mRNAs connected to 47 immune response pathways. The results showed favorable modulation of 29 mRNAs across four distinct immune response pathways within two to four hours post exercise. This suggests that OptiMSM could support faster muscle recovery and protect against oxidative stress triggered by strenuous physical activity. We believe the research findings associated with these two studies, along with all of the findings from the other studies that have been published recently, will further strengthen the science behind our premium branded nutrients and continue to help advance our ability to expand market penetration. Additionally, I'd like to share that Balcom has announced its intent to build a new $36 million state of the art food ingredient and nutraceutical microencapsulation manufacturing facility in Orange County, New York, just down the road from our legacy microencapsulation site. If approved by the county, the facility will ultimately more than double Balcom's capacity for its fast growing microencapsulation technologies and further support our continued growth. So some exciting progress being made on our strategic growth initiatives. Now, regarding the second quarter of 2025 financial performance, this morning we reported record quarterly consolidated revenue of $255 million, which was .1% higher than the prior year quarter. We delivered record quarterly gap earnings from operations of $51 million, an increase of .3% versus the prior year. Consolidated net income closed the quarter at $38 million, an increase of 19.4%. This quarterly net income translated to diluted net earnings per share of $1.17 on a gap basis, up 19 cents or .4% compared to the prior year. On an adjusted basis, we delivered record quarterly adjusted EBITDA of $69 million, an increase of 11.2%, with an adjusted EBITDA margin of 27.1%, up 50 basis points from the prior year. A record quarterly adjusted net earnings were $42 million, an increase of .8% from the prior year, which translated to $1.27 per diluted share, up 18 cents or .5% compared to the prior year. Overall, another excellent quarter for Balcom as we continue to deliver strong financial returns while making good progress on our strategic growth initiatives. And with that, I'm now going to turn the call back over to Martin to go through the second quarter consolidated financial results for the company and the results for each of our business segments in more detail.