[Management View]
Balchem reported record financial results for Q3 2025, with consolidated revenue reaching $268 million, a 11.5% increase YoY. The company achieved a 13.7% rise in GAAP earnings from operations and a 19.1% increase in net income. The Human Nutrition & Health segment led growth, driven by strong demand for nutrient and food ingredient portfolios. Management emphasized the impact of "better for you" consumer trends and strategic geographic expansion in Specialty Products.

[Outlook]
Balchem anticipates continued growth, supported by strategic investments in encapsulation technology and geographic expansion. The company plans to manage trade policy impacts through alternative supply chain measures and pricing actions. A new encapsulation facility is expected to double capacity by early 2027, supporting sustained growth in this high-margin product line.

[Financial Performance]
Balchem's Q3 2025 financial performance exceeded expectations, with adjusted EBITDA up 11% YoY and adjusted net earnings increasing by 19.1%. The Human Nutrition & Health segment saw a 14.3% revenue increase, while Animal Nutrition & Health and Specialty Products grew by 6.6% and 7.5%, respectively.

[Q&A Highlights]
Question 1: Could you elaborate on the drivers behind the recent growth in the Food Solutions segment and the outlook for 2025?
Answer: The Food Solutions segment benefited from "better for you" trends, with sales up nearly 7%. Growth was driven by high-protein snacks, nutritional beverages, and protein bars. The segment's growth is expected to continue, supported by nutrient expertise and innovative product solutions.

Question 2: What is the current status of the European anti-dumping duties on choline chloride, and how might they impact sales?
Answer: The European Union has preliminarily imposed antidumping duties on China-origin choline chloride, with final approval expected by year-end. These duties aim to level the playing field and could positively impact sales in both human and animal choline markets.

Question 3: Can you provide an update on the Orange County microencapsulation facility and its expected impact on revenues?
Answer: The new facility, set to complete by early 2027, will double current capacity. It supports the fast-growing encapsulation business, which grew 26% in Q3. This expansion is expected to sustain double-digit growth and enhance earnings quality.

Question 4: Will the pace of debt repayment continue, and what is the expected tax rate for the remainder of 2025?
Answer: Debt repayment will depend on M&A activity and share repurchases. The effective tax rate is expected to remain around 22.5% for the year.

Question 5: Can you break down the growth within Specialty Products, particularly in Performance Gases and Plant Nutrition?
Answer: Performance Gases grew 7%, while Plant Nutrition increased by 13%, driven by geographic expansion in Latin America and Asia Pacific. The U.S. business remained flat, with international growth driving overall segment performance.

[Sentiment Analysis]
Analysts expressed positive sentiment, congratulating management on record results. Management maintained an optimistic tone, highlighting strategic growth initiatives and effective management of trade challenges.

[Quarterly Comparison]
| Metric | Q3 2025 | Q3 2024 | YoY Change |
|-------------------------------|---------|---------|------------|
| Consolidated Revenue | $268M | $240.4M | +11.5% |
| GAAP Earnings from Operations | $55M | $48.4M | +13.7% |
| Net Income | $40M | $33.6M | +19.1% |
| Adjusted EBITDA | $71M | $64M | +11% |
| Adjusted Net Earnings | $44M | $37M | +19.1% |

[Risks and Concerns]
Potential risks include the impact of global trade policies and the need for continued investment in capacity expansion to meet growing demand. The lengthy and costly process of addressing antidumping practices also poses a challenge.

[Final Takeaway]
Balchem's Q3 2025 results demonstrate robust growth across all segments, driven by strategic investments and favorable market trends. The company's focus on expanding encapsulation capacity and managing trade impacts positions it well for sustained growth. With a strong financial foundation and strategic initiatives underway, Balchem is poised to capitalize on emerging opportunities in the nutrition and health markets.