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.

Thank you, Ted. As Ted mentioned, overall, the second quarter was a great quarter for Balcom with record sales, earnings from operations, adjusted EBITDA, adjusted net earnings and adjusted earnings per share. Our second quarter net sales of $255 million were .1% higher than prior year, driven by strong performance in all three segments, human nutrition and health, animal nutrition and health, and specialty products. Our second quarter gross margin dollars were 93 million, up .2% compared to the prior year. And our gross margin percent was .4% of sales, up 90 basis points compared to the prior year. The increase in gross margin percent was primarily due to a favorable portfolio mix, which was partially offset by certain higher manufacturing input costs. Consolidated operating expenses for the second quarter were $42 million as compared to $37 million in the prior year. The increase was primarily due to higher compensation related costs and professional services partially offset by lower amortization expense. Gap earnings from operations for the second quarter were a record $51 million, an increase of .3% compared to the prior year. On an adjusted basis, as detailed in our earnings released this morning, non-GAP earnings from operations of $56 million were up 10% compared to the prior year. Adjusted EBITDA was a record $69 million, an increase of .2% compared to the prior year. With an adjusted EBITDA margin rate of 27.1%. Net interest expense for the second quarter was $3 million, a decrease of $1 million compared to the prior year, driven primarily by lower outstanding borrowings. Our net debt decreased to $125 million with an overall leverage ratio on a net debt basis of 0.5. The effective tax rates for the second quarters of 2025 and 2024 were .9% and .2% respectively. The decrease in the effective tax rate from the prior year was primarily due to higher tax benefits from stock-based compensation. Consolidated net income closed the quarter at $38 million, up .4% from the prior year. This quarterly net income translated into diluted net earnings per share of $1.17, an increase of 19 cents compared to the prior year. On an adjusted basis, our second quarter adjusted net earnings were a record $42 million, an increase of .8% from the prior year, which translated to $1.27 per diluted share. Cash flows from operations were $47 million with free cash flow of $41 million, and we closed out the quarter with $65 million of cash on the balance sheet. As we look at the second quarter from a segment perspective, our human nutrition and health segment generated record sales of $161 million, an increase of .7% from the very strong results in the prior year. Driven by higher sales within both the food ingredients and solutions businesses and the nutrients business. Our human nutrition and health segment delivered record quarterly earnings from operations of $38 million, an increase of .9% compared to the prior year. This was primarily driven by the aforementioned higher sales and a favorable mix, partially offset by an increase in certain manufacturing input costs and higher operating expenses. Second quarter adjusted earnings from operations for this segment were $41 million, an increase of 10.8%. We're very pleased with the overall performance of our human nutrition and health segment, where we continue to experience solid end consumer demand for our unique portfolio of ingredients and solutions. As mentioned on our last call, we're seeing healthy growth once again across our food ingredients and solutions businesses, at least partly due to the good for you trends, where our formulations expertise brings considerable value to our customers, as well as continued growth of our nutrients business. We believe our product offering is well positioned to meet growing market demands and that our strong market positions will enable us to continue to deliver healthy growth in human nutrition and health. Our animal nutrition and health segment generated quarterly sales of $56 million, an increase of .1% compared to the prior year. The increase was driven by higher sales in both the ruminant and monogastric species markets. Animal nutrition and health delivered earnings from operations of $4 million, an increase of .5% from the prior year. The increase was primarily due to the aforementioned higher sales and a favorable mix, partially offset by an increase in certain manufacturing input costs and higher operating expenses. Second quarter adjusted earnings from operations for this segment were $4 million, an increase of 27.8%. We were once again pleased to see our animal nutrition and health segment deliver both top and bottom line growth in the second quarter. And the continuation of the stabilization and recovery of the business. The end markets for animal nutrition and health remain relatively stable at the moment. And we believe the animal nutrition and health business has good momentum and is well positioned to deliver solid growth in 2025. As Ted mentioned earlier, the European commissions recently announced provisional anti-dumping duties on Chinese coling will certainly provide further support for the animal nutrition and health segments growth outlook. Our specialty product segment delivered record quarterly sales of $37 million, an increase of 6% compared to the prior year, driven by higher sales in both the performance gases and plant nutrition businesses. Specialty products also delivered record quarterly earnings from operations of $11 million, an increase of .4% versus the prior year, primarily driven by the aforementioned higher sales, partially offset by higher operating expenses. Second quarter adjusted earnings from operations for this segment were $12 million, an increase of 1.3%. We are very pleased with the performance of specialty products in the second quarter, both from a sales growth and margin perspective. And we expect healthy demand to drive another year of growth for the specialty product segment. So overall, the second quarter was another excellent quarter for Valchem, and we believe we are well positioned for continued growth as we head into the second half of the year. I'm now going to turn the call back over to Ted for some closing remarks.

Thank you, Martin. Once again, we're extremely pleased with the second quarter financial results reported earlier this morning. As a company, we continue to show an ability to deliver results in a variety of market conditions, given our strong market positions and our value-added portfolio of products. And we remain confident in the long-term growth outlook for Valchem as a company. I will now hand the call back over to Martin, who will open up the call for questions.

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

Thank you. We will now begin the question and answer session. If you have dialed in and would like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star one again. If you are called upon to ask your question and are listening via speakerphone in your device, please pick up your handset to ensure that your phone is not on mute when asking your question. Again, press star one to join the queue. And our first question comes from the line of Bob Lattic with CJS Securities. Your line is open.

Good morning. Congratulations on the recent anti-dumping news, and thanks for taking our questions. Great. Thanks, Bob. Thank you, Bob. Yeah. So, you know, hopefully, obviously, that'll get things back on track in the evening playing field, as you said. Could you, and we've been focused on that a lot, could you give us a little bit of a summary Could you give us, take a step back, give us an update on the macro environment. What's European monogastric demand like, like overall demand now, and how should that play out for you? And beyond the recovery in monogastric, which hopefully follows, what are the other drivers for growth in A&H that you see over the next six to 18 months?

Thank you, Bob. On your question on monogastric demand in Europe, I would say the demand picture is relatively stable and has been stable for quite some time. If you think about it from an overall market, what we've seen is obviously that, in terms of the Chinese supply, the market share that they have had over the years have gone up and down, depending on what period you're looking at. So now, as we, with this anti-dumping provisional ruling, what will play out over the coming quarters is obviously, what market share will they have as we establish a more levelling level playing field? The Chinese suppliers have a relatively significant market share in Europe at the moment. And if these provisional duties remain at this level, that puts their pricing sort of at par with the European producers. And historically, we have seen sort of a preference to buy more local supply if the price is not too different, right? So we could see a scenario where we get a, you know, higher market share in Europe compared to where we are today, which would obviously be positive for the business. But the overall market itself is more of a low, single-digit growth market for sort of feed-grade choline driven more by sort of protein production in the region. So if you then take a step back and look at A&H more broadly in terms of growth, we do see quite a lot of growth ahead of us on the ruminant side. So think about our dairy business there, where there's still a lot of market penetration, not just in the US, but also in Europe and elsewhere in the world, where there is more of innovation going on. We are bringing new products to market. You may remember last year, we launched the new AminoShore XL product, which is a ruminant encapsulated lysine. And the innovation funnel there continues to evolve as we work on bringing further products to market. So you'll see growth driven on the ruminant side. And then also we have the companion animal business, which provides quite a bit of growth opportunities for us based on the technologies we have. While the monogastric business will always be a little bit of a slower grower relative to the other parts of the portfolio as it's a more mature market, more fully penetrated. So hopefully that provides some insights.

Yes, that's super, thank you. And then kind of shifting to the US and I guess New York, could you talk more about the investment in the manufacturing facility? How much capacity, I think it's a doubles the capacity, how much revenue does that add? How long will this take? And what are the other benefits of standing up a new manufacturing facility as it relates to, I don't know if it's gonna be margin or faster throughput or market share, or what are you looking for from this new facility?

Yeah, we're excited about this new investment, Bob. It's something that's been honestly a little bit of a long time coming. As you know, kind of the foundation of BalCam was on microencapsulation technology and manufacturing. Our founders were scientists, technologists who invented a unique way to microencapsulate food ingredients and they bought a small dairy in Slate Hill, New York. And hence that was the start of our company. And we have been manufacturing microencapsulated products in Slate Hill, New York since that time, since back in the 60s. We have since expanded to now make similar products in our Missouri site as well as overseas in Italy, but Slate Hill remains our primary site. But as you can imagine, it's a relatively old site and not very efficient because of the age of the site and the original construction and so forth. It's very choppy and not ideal. So this is a purpose-built microencapsulation site that will come with significant efficiencies that we're looking forward to, but most importantly, expansion of our production. We really have been a little bit tight on capacity for the last year or so. And the business over the last couple years has been growing at 20, 25% a year. And so doubling of the capacity is in order. So I think that the primary way to think about this is that this investment will allow us to continue to grow that business at double digit rates for the foreseeable future. Whereas if we didn't make this investment, we would be restricted on our expansion. We have a deep bottleneck and stretched capacity as best we can, and it's time for a new footprint. But certainly it will also be more efficient just because of the newness of it and the fact that it's not a retrofitted dairy and it's now a purpose-built microencapsulation facility.

Okay, super, well, that's exciting. I'll jump back into you and let others ask questions. But thank you.

Thanks, Bob.

Our next question comes from the line of Ram Selvaraju with HC Wainwright. Your line is open.

Thanks very much for taking my questions and congratulations on another very solid quarter. Just to clarify on the previous point about the facility, I was wondering if you could just let us know specifically when you anticipate the facility fully coming online and how you are funding the facility construction costs. Just wanted to clarify that that's all coming from existing cash resources.

Yes, Bob, I mean, I'm sorry, Ram. Thanks for the question and thanks for your comments. So from a CapEx perspective, as you know, we've been spending 35 to $40 million a year on CapEx and we really think that we can accomplish this new project within that sort of size CapEx spending because it will happen over the course of three years. And so we're not expecting a significant increase in our CapEx spending. So yes, it will come from existing cash as well as our debt facility. So we're not concerned at all about funding this site. And then I sort of spoke to it, but we think that it will take a little over a couple of years to manufacturing this, to manufacture or build this manufacturing site. So we're expecting that we should be able to start production, you know, kind of, I'd say late in 2027 into 2028. And we feel like we have enough capacity in our existing facility with all that debot licking that I talked about to allow us to grow to that point. But we really need this facility to come online, you know, in that timeframe in order for us to continue to grow.

And thank you very much for that. And then a couple other items on the H&H front. Firstly, I was wondering if you could comment on the status of Vitacoline Pro Flow and the progress that's been made on integrating that specific product offering into multivitamin products, you know, product lines and brands, and how you expect that to evolve over the course of the remainder of this year. I also wanted to ask about, in a general sense, Valchem's strategic outlook on the human health front as opposed to nutrition. On this call, it seems that you struck a markedly different tone with respect to the kinds of clinical studies that are being embarked upon. And I was just wondering whether this might mark the start of Valchem's move more concertedly into the human health front, maybe into the medical food space, maybe even into the pharmaceuticals, or more pharmaceutical-like nutraceutical domain. If you could provide us with any insights on that front, that would be much appreciated.

Sure, Ram, I'll try to answer all of those questions. You know, I think that this is both an industry trend as well as an ongoing evolution of our company. And when I speak about an industry trend, you know, the -for-you nature of foods, you know, greener labels, you know, healthier eating, personalized nutrition has been a multi-decade trend that we have benefited from. But there certainly are some accelerators to that multi-decade trend of late. I think the advent of the GLP-1 drugs is certainly a part of that, that, you know, has kind of risen to prominence very, very quickly and results in kind of changing needs from a nutritional perspective, maybe even, you know, as you brought up, a medical foods perspective. But we really are seeing our customers launch new products that are specifically focused on people that are on GLP-1 drugs that obviously have kind of protein intake issues, potentially, as well as liver health concerns and just, you know, broad reaching nutrition deficiencies that come with consuming less food and so forth. And so, you know, our food ingredient formulation business, I think plays well into that trend. And of course, our nutrient portfolio plays well into that as well. And so, you know, the market trends are headed that way. And, you know, we are moving along our evolutionary path toward being able to better and better service that. And we've been talking quite a bit lately about our investments in marketing, as you know, because that was sort of new to kind of our capabilities, if you will, but the investment in science and studies has really always been there. So I wouldn't want you to come away saying that this is a shift relative to the studies. I think we've been highlighting the marketing element of our strategy, but, you know, we've always, you know, tried to communicate that we wanted to add the marketing to our foundation that's based on science. And these studies are critical to the overall growth of the company, the overall, you know, penetration of markets, the building of awareness and so forth. So we're continuing to do that while investing in marketing. And I do think that, you know, where the markets are evolving and where Bau Chem is evolving is a little bit more toward that health side, as you describe it. You know, we're not focused on becoming a pharmaceutical company. We're not focused on getting into pharmaceuticals. But I think those lines between food, nutrition, and pharma are going to become increasingly blurred, given the accelerators that are going on relative to that long-standing trend. And so I think that's what you're noticing and maybe some of our updates. And because we've been highlighting marketing so much, we wanted to remind everybody that we continue to invest in the science. And relative to the new products that we have launched, VitaCole and Pro Flow is, as we've talked about, a interesting new product that we have that facilitates the inclusion of choline into multivitamin solutions. And, you know, we are starting to introduce that to customers and the reception is positive. We still can't report out on any of our products very large successes there, but it is just, you know, adding to our portfolio of solutions. And we were a little bit blocked out of the multivitamin component of the supplement market. And, you know, now we have something that we can really talk about there. So we are excited about that. I think that one thing that I'm, you know, almost more excited about right now is the predominance of choline being included in nutritional beverages and other food systems. And the more that we can support the inclusion of choline in these nutritional beverages, any energy drinks and so forth, that's a significant market opportunity for us. And we've seen some real wins in that area of late and are very excited about that.

Great, and then just two very quick things for Martin as per usual. Just wanted to see if you could comment on the broader strategy with respect to debt reduction and what we might expect to see over the course of the remainder of this year, if it's steady as she goes, or you expect to accelerate debt repayment. And also if you could give us a sense of your perspective on where the effective tax rate might shake out for the second half of 2025.

Yeah, absolutely. I think as you talk about debt reduction, I think you have to think about it in the broader context of our capital allocation strategy, right? Where, you know, our primary focus is always in investing in organic growth opportunities that we have internally and that you see us doing. And then obviously we try to compliment that with strategic M&A that we feel accelerates some of those growth initiatives. And then, you know, we focus on paying down debt with cash that we have on hand that we're generating since we continue to generate strong free cash flows. We pay down that debt and we'll continue to pay down that debt. While at the same time, as you've seen over the last decade, maintaining and growing that dividend. You may have noticed if you look closely that we also, you know, occasionally do smaller share repurchases for anti-dilutive purposes, right? So we try to keep our share count relatively flat. So we have done that as well to keep that. But as you look forward, we will continue to generate good cash flows. We'll continue to pay down debt. And I think sort of when we do our next M&A transaction, obviously that debt level will rise again and you'll probably see a repeat of history of we add on some debt and then we continue to pay it down. So I don't think you'll see any change in strategy here. We'll continue to pay down that debt for a little bit further until the next M&A transaction happens. And then on the effective tax rate. Yeah, on the effective tax rate, we're sort of humming along those 22% so far this year. I think I've said before that sort of we expect that to be between the 22 and the 23% for this year. And as you look into the second half, there's probably, we'll probably be towards the lower end of that range. So probably a little bit closer to the 22 than the 23 is what I would expect for the second half of the year here. Okay. Thank you so much. Thanks, Rom.

Our next question comes from the line of Tony Polack with AGES. Your line is open.

Good morning. I wanna know basically two questions on tariffs to the US. Does that affect you at all? And an update on Curemark if I may.

Sure. So on tariff, it does affect us, certainly. But as we've said a few times, we really feel like we're relatively well positioned. On the call last quarter, we talked about approximately a $20 million impact from tariffs, and that's primarily on us buying raw materials for the US from international locations. And obviously it's a little bit of a moving target, if you will. But since the last call, some new deals, I guess they're called, have come into play, specifically Europe, but also some countries that are important to us, like Indonesia, Malaysia, and the Philippines. And if we look at that $20 million impact number that we talked about last time, it hasn't changed significantly. It's up to approximately $25 million today. And as we said last time, we feel as though we can offset about half of that number through supply chain shifts and moves, alternate suppliers, alternate manufacturing, and so forth. And that's continuing to play out as we expected. And then the other half will have to come from pricing, and we're in the midst of executing on that and remain confident that we'll be able to accomplish that. So overall, we feel as though, again, we're relatively well positioned. We're going to be able to manage through this, but it's certainly something that we're having to work and manage, and it's taking energy and time, but we're not concerned about its overall impact on the company's performance at this point in time, based on what we know. And relative to Curemark, we don't have a whole lot new to report relative to Curemark. We do understand that they continue to prepare to file the BLA. That is really the next step. We have done everything that we need to do from a manufacturing perspective and validation perspective, and so forth. So it really is today completely in the hands of the Curemark team to file what they need to file with FDA seeking ultimate approval. And in our understanding, and based on our regular calls with them, they are working hard on that with various consultants and so forth. And so we're excited at some point in time in the future for them to reach that milestone of filing what they need to file with FDA. But I really don't have any insights into any more specificity on exactly where they are in that process, other than knowing that they're in the midst of it.

Thanks, appreciate it.

Thank you, Tony.

And our last question comes from the line of Daniel Harriman with CIDOTE. Your line is open.

Thanks, good morning, guys. Thank you for taking my questions. Just a couple quick ones for me here. First, within ANH, the .7% year over year growth, I was hoping you might be able to break that down between nutrients and ingredients. And then Martin, I know you just discussed this, but I wanted to confirm, obviously quite a large step up in stock repurchases versus the second quarter of 2024. And just wanted to confirm from you that that is just an opportunistic repurchase due to valuation and not a shift towards more of an active return strategy.

Absolutely, Daniel. Maybe starting with the second part of the stock repurchase. Yeah, no, that's really just in line with sort of historic. We repurchased share fronted elutid purposes in 22 and in 21 and in 23 in the early part of the year. Then we took a little bit of a break from doing that after the last two acquisitions we did and focused on lowering the debt instead. And now we sort of a little bit opportunistically, so a good opportunity to buy back some stock for antidelutid purposes. So it's not any larger change in strategy. It's truly sort of the same just for antidelutid purposes. Yeah, so on your question on ANH, I mean, overall the ANH sales growth was obviously 13% in the quarter. And actually there was growth on both sides, right? So if you take the monogastric more mature business, it was up about 7% on the monogastric side, while the ruminant side was up around 30%. So on a relative scale, ruminant growing much faster than monogastric, which is also what we would expect to see over time as it is a higher growth business compared to the monogastric side.

I apologize, Martin. I was actually asking about HNH and nutrients versus ingredients.

Okay, well, you got some good insights into ANH as well.

Yeah, no, that's fantastic.

And we are pleased that monogastric, being a stable business continues to grow. And then of course, ruminant we view as a growth business and 30% growth is really good to see as well. So on HNH, we grew about 9%. And once again, a little bit like ANH, both the food business as well as the nutrients business grew and actually similar percentages. So the nutrients business grew at .8% organically, and the food ingredient solutions business grew at .6% organically. So again, very pleased with the growth that we're seeing in both of those. And it's, I would say pretty much played out as we expected last year. We saw double digit growth in our nutrients business last year and quite low single digit growth in food and we thought that the growth in nutrients would moderate a little bit given the accelerated growth that we'd seen, but would continue to grow. And so that's exactly what's happening, but the food solutions business would pick up. And so really pleased with that. In the nutrients business sort of stand out, I would say our K2 product line is growing. High double digit type growth. So very pleased with that in the 30 to 40% type range. Our MSM business growing at solid double digits and our minerals business continues to grow very nicely with kind of a standout continuing to be magnesium with growing awareness of that important mineral. And then in the food business, it's really across the portfolio, our encapsulated assiduance. I talked a little bit earlier about the need to expand manufacturing has been growing at 20% plus, but generally our good for you formulations, whether they be in kind of our powders or cereal systems businesses are growing quite well. So hopefully that gives you a little bit of an insight into the H and H growth.

Yeah, it's really helpful. And again, I'm sorry for the earlier confusion, but thank you so much.

No problem. Thanks, Diane. Really appreciate the question.

That concludes the question and answer session. I would like to turn the call back over to our chief executive officer, Ted Harris for closing remarks.

So thank you all very much again for joining the call today. We really appreciate the time today as well as your ongoing support. And we look forward to reporting out our Q3 2025 results in October. We will be reporting back to you and we will be participating in the HC Wainwright Investment Conference in New York City on September 9th. So we certainly hope to see some of you there. Thank you again for joining.

Ladies and gentlemen, that concludes today's call. Thank you all for joining and you may now disconnect.