Balchem Corporation

Thank you for standing by and welcome to the Balkans first quarter, 2026 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question 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'd like to withdraw your question again, press star one. Thank you. I'd now like to turn the call over to Martin Bankson, chief financial officer. You may begin.

Thank you. Good morning, everyone. Thank you for joining our conference call this morning to discuss the results of Balcombe Corporation for the quarter ending March 31st, 2026. My name is 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 statement. 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 Valchem's most recent Form 10-K, 10-Q, and 8-K reports. The company assumes no obligation to update these forward-looking statements. Today's call 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 first quarter of 2026 and the overall performance of our company as we kicked off the new year with positive momentum from the strong performance throughout 2025. Our healthy growth continues to be fueled by ongoing market penetration of our unique portfolio of specialty nutrients and delivery systems, and the favorable better for you trends within the food and nutrition markets that are well aligned with our food ingredient formulation systems and capabilities. We delivered record first quarter consolidated sales, adjusted EBITDA, adjusted net earnings, and adjusted EPS, as well as strong cash flows. We also delivered year-over-year sales and earnings growth in all three of our reporting segments, The first quarter of 2026 was the 27th consecutive quarter of quarterly year-over-year growth in adjusted EBITDA for BALCAM. We are very proud of this accomplishment, particularly in light of the market environment within which we have operated over the last 27 quarters. 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 geopolitical and macroeconomic situation, as well as some of the progress we have made on several important strategic initiatives. We continue to see healthy demand across the vast majority of our end markets. Our human nutrition and health segment continues to perform very well, driven by healthy demand for both our unique portfolio of minerals, nutrients, and vitamins, and our food ingredients and solutions, which are benefiting from trends toward nutrient-dense, high-protein, high-fiber, and low-sugar or better-for-you foods where our nutrient portfolio and our formulations expertise bring considerable value to our customers. In the animal nutrition and health segment, we delivered another quarter of year-over-year growth on improved demand in both our monogastric and ruminant businesses, as a result of further market penetration of our rumen-protected, precision-release encapsulated nutrient portfolio and the ongoing improvement of market conditions in the European monogastric market. And we remain encouraged by the overall performance of our animal nutrition and health product portfolio. Within our specialty product segment, both our performance gases and our plant nutrition businesses are performing well, driven primarily by higher demand within performance gases as a result of healthier market conditions and successful margin management and geographic expansion growth within plant nutrition. As we have shown over the years, we have been able to deliver strong historical performance while facing significant market volatility, and we believe we remain well positioned to effectively manage through this current geopolitical and macroeconomic environment as well. We are once again entering a period of significant inflation, largely petrochemical-based and primarily impacting our animal nutrition and health segment, as well as potential supply chain disruptions due to the ongoing conflict in the Middle East. We will once again leverage our robust global supply chain, our procurement expertise, and our strong market positions to raise prices where necessary to help manage through this dynamic market environment. While we are likely to experience some modest margin compression resulting from the timing lag that occurs between input cost inflation and pricing adjustments, particularly within our animal nutrition and health segment, we do expect to deliver continued quarterly year-over-year growth on a consolidated basis over the coming quarters. We will continue to monitor the developments closely and adjust accordingly as we have done effectively in the past. Additionally, I would like to share some significant progress we have made on several important strategic initiatives that will further support our future growth. A newly published peer-reviewed research study using functional magnetic resonance imaging, a noninvasive safe neuroimaging procedure that measures brain activity by detecting changes in blood flow and oxygenation was published in the peer-reviewed journal, Nutrients. This important study examined the effects of Valchem's vitacholine nutrient on working memory-related brain activation and functional connectivity in postmenopausal women. The results showed that vitacholine intake significantly enhanced functional connectivity within the working memory network, improving brain efficiency within three hours of consumption. This study helps highlight the benefits of viticholine across different life stages with previous research showing that viticholine supports fetal brain development during pregnancy and lactation with lasting effects beyond birth. It also suggests that viticholine may help enhance cognitive health in older adults. We are excited about these results and we will continue to invest in both research and marketing around viticholine to raise the awareness and drive market penetration of this important essential nutrient. Additionally, on April 22nd, Earth Day, we released our 2025 Sustainability Report, highlighting our sustainability initiatives and accomplishments. Guided by our core values and our vision of making the world a healthier place, our sustainability report demonstrates our commitment to bringing innovative solutions for global health and nutrition needs and to operate with excellence as strong stewards of our employees, customers, shareholders, and communities. We are very proud of the progress made on our 2030 sustainability goals to reduce both greenhouse gas emissions and water usage by 25%. Compared to our 2020 baseline, In 2025, we successfully reduced Scope 1 and 2 greenhouse gas emissions by approximately 31%, surpassing our 2030 goal. And we reduced water withdrawal by approximately 16%, showing substantial progress toward our water usage reduction objective. Now, regarding the first quarter financial results. This morning, we reported record quarterly consolidated revenue of $271 million, which was 8.1% higher than the prior year quarter. We delivered record quarterly gap earnings from operations of $56 million, an increase of 9% versus the prior year. Consolidated net income closed the quarter at $40 million, an increase of 8.7%. This quarterly net income translated to diluted net earnings per share of $1.25 on a gap basis, up 10.6%. On an adjusted basis, we delivered record quarterly adjusted EBITDA of $74 million, an increase of 12.1%. Our quarterly adjusted net earnings were $43 million, an increase of 7.4%, which translated to $1.33 per diluted share, up 9%. Overall, it was an excellent quarter for Balchem, marked by strong financial results and meaningful progress made on our strategic priorities. And with that, I'm now going to turn the call back over to Martin to to go through the first quarter financial results in more detail and the results for each of our business segments. Thank you, Ted.