FORM 10-Q SB/A
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Quarterly Report Under Section 13 or 15 (d)
of the Securities Exchange Act of 1934
For Quarter Ended June 30, 1995 Commission File No. 1-13648
BALCHEM CORPORATION
------------------------------------------------------
(Exact Name of Registrant as Specified in its Charter)
Maryland 13-2578432
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(State of Other Jurisdiction of (I.R.S. Employer Identification
Incorporation or Organization) Number)
P.O. Box 175, Slate Hill, NY 10973
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(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including area code: (914) 355-2861
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Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes [ X ] No [ ]
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the close of the period covered by this report.
3,121,155 Shares Common Stock
<PAGE>
BALCHEM CORPORATION
BALANCE SHEET
ASSETS
<TABLE>
<CAPTION>
6/30/95 6/30/94
------------ ------------
<S> <C> <C>
CURRENT ASSETS
Cash & Investments ....................... $ 45,063 $ 42,096
Accounts Receivable ...................... 2,527,928 1,850,404
Inventories .............................. 1,527,808 1,152,589
Pre-Paid Expenses ........................ 299,670 359,299
Deferred Income Taxes .................... 92,784 56,140
Total Current Assets ..................... 4,493,253 3,460,528
------------ ------------
PROPERTY, PLANT, AND EQUIPMENT
Land ............................... 53,648 53,648
Building ................................. 3,806,537 2,869,390
Equipment ................................ 9,506,093 9,078,783
Total ................................ 13,366,278 12,001,821
Less: Accumulated Depreciation ............... 5,787,020 5,063,264
Net: Property, Plant, Equipment ......... 7,579,258 6,938,557
------------ ------------
OTHER ASSETS
License Fees ............................. 13,125 15,000
Financing Costs .......................... 19,107 11,800
Goodwill ................................. 7,633 7,933
Customer Lists ........................... 251,652 --
Patents & Trademarks & Registrations ..... 195,499 228,555
Other .................................... 44,569 32,748
Total Other Assets ................... 531,585 296,036
------------ ------------
TOTAL ASSETS .................................. $ 12,604,096 $ 10,695,121
============ ============
</TABLE>
<PAGE>
BALCHEM CORPORATION
BALANCE SHEET (Continued)
<TABLE>
<CAPTION>
6/30/95 6/30/94
------------ ------------
<S> <C> <C>
LIABILITIES & STOCKHOLDER EQUITY
CURRENT LIABILITIES
Payables (Trade & Accruals) .............. 1,799,159 1,145,672
Notes Payable ............................ 66,389 138,023
Dividend payable ......................... -- --
Line of Credit ........................... 45,000 800,000
Bridge Loan .............................. -- 214,000
Current Debt ............................. 510,336 428,750
Current Income Taxes ..................... 22,120 (50,683)
Total Current Liabilities ............ 2,443,004 2,675,762
------------ ------------
Notes Payable Long Term .................. 40,960 --
Bridge Loan .............................. -- 1,286,000
Long Term Debt ........................... 2,760,000 841,667
Deferred Income Tax ...................... 617,316 508,544
Deferred Compensation .................... 87,822 80,192
TOTAL LIABILITIES ............................. 5,949,102 5,392,165
------------ ------------
STOCKHOLDERS' EQUITY
Common Stock ............................. 208,069 138,168
Paid-In-Capital .......................... 1,715,286 1,734,584
Retained Earnings ........................ 4,731,639 3,430,204
Total Stockholders' Equity ........... 6,654,994 5,302,956
------------ ------------
TOTAL LIABILITIES &
STOCKHOLDERS' EQUITY ..................... 12,604,096 10,695,121
============ ============
</TABLE>
<PAGE>
BALCHEM CORPORATION
STATEMENT OF CASH FLOWS
FOR PERIOD ENDING JUNE 30, 1995 and JUNE 30, 1994
<TABLE>
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Earnings ................................. $ 730,848 $ 189,113
ADJUSTMENTS TO RECONCILE NET INCOME TO
NET CASH PROVIDED BY OPERATING ACTIVITIES
Deferred Taxes ............................... 24,817 47,643
Depreciation & Amortization .................. 398,044 300,224
CHANGES IN ASSETS & LIABILITIES
Accounts Receivable .......................... 60,349 302,423
Inventories .................................. (225,934) (152,382)
Prepaid Expenses ............................. 140,256 (82,879)
Accounts Payable ............................. (274,069) 145,164
Income Taxes Payable ......................... (68,100) (149,820)
Deferred Compensation Payable ................ 4,018 3,405
Total Adjustments ............................ 59,381 413,778
NET CASH PROVIDED BY (USED IN)
OPERATING ACTIVITIES ............................. 790,229 602,891
CASH FLOWS FROM INVESTING ACTIVITIES
Capital Expenditures ......................... (488,913) (1,908,585)
Investments in Other Assets .................. (123,429) (9,718)
Net Cash Used in Investing Activities ........ (612,342) (1,918,303)
CASH FLOWS FROM FINANCING ACTIVITIES
Net Borrowings Under Line of Credit .......... (470,000) (60,000)
Notes Payable ................................ (160,266) 138,023
Bridge Loan .................................. 1,500,000
Note Payable Long Term ....................... (5,033)
Proceeds from Long-Term Borrowings ........... 3,500,000 --
Principal Payment on Short-Term Borrowings ... (447,167) (96,250)
Principal Payments on Long-Term Debt ......... (2,509,500) (181,250)
Stock Options ................................ 4,499 5,145
Dividends Payable ............................ (85,802) (68,929)
NET CASH PROVIDED BY (USED IN)
FINANCING ACTIVITIES ......................... (173,269) 1,236,739
INCREASE (DECREASE) IN CASH ...................... 4,618 (78,673)
CASH - BEGINNING ................................. 40,445 120,769
CASH - ENDING .................................... $ 45,063 $ 42,096
=========== ===========
</TABLE>
<PAGE>
BALCHEM CORPORATION
SUMMARIZED FINANCIAL INFORMATION (UNAUDITED)
INCOME STATEMENT
<TABLE>
<CAPTION>
For the For the For the
Three Months Ended % Six Months Ended % Three Months Ended %
---------------------- ---- ----------------------- ---- --------------------- ----
6/30/95 6/30/94 6/30/95 6/30/94 6/30/95 3/31/95
--------- --------- ---------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Sales & Other Revenues ...... 5,826,793 3,884,287 50.0 11,763,816 7,630,642 54.2 5,826,793 5,937,023 (1.9)
--------- --------- ---------- --------- --------- ---------
Cost of Sales ............... 3,073,256 2,266,551 35.6 6,321,175 4,410,144 43.3 3,073,256 3,247,920 (5.3)
Interest Expense ............ 90,517 53,080 70.5 177,991 96,623 84.2 90,517 87,474 3.5
Other Expenses .............. 2,086,673 1,416,613 47.3 4,148,775 2,813,371 47.5 2,086,673 2,062,101 1.2
--------- --------- ---------- --------- --------- ---------
Operating Costs and
Expenses ............... 5,250,446 3,736,244 40.5 10,647,941 7,320,138 45.5 5,250,446 5,397,495 (2.7)
Pre-Tax Operating
Earnings ............... 576,347 148,043 >100 1,115,875 310,504 >100 576,347 539,528 6.8
Income Taxes ................ 197,532 25,833 385,027 121,421 197,532 187,495
Net Income .................. 378,815 122,210 >100 730,848 189,083 >100 378,815 352,033 7.6
Number of
Outstanding Shares(*) .. 3,121,155 3,090,395 3,121,155 3,090,395 3,121,155 3,120,059
Earnings Per Share
Before Taxes ........... 0.185 0.048 0.358 0.100 0.185 0.173
After Taxes ............ 0.121 0.040 0.234 0.061 0.121 0.113
</TABLE>
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(*)1994 shares adjusted for 3 for 2 stock split in October 1994.
<PAGE>
MANAGEMENT DISCUSSION AND ANALYSIS
REVENUES
Revenues increased 50% for the quarter ending 6/30/95 vs. the quarter ending
6/30/94,and 54.2% comparing the six months ended 6/30/95 and 6/30/94, a
percentage of which is attributed to increased revenues generated from core
business and commercialization of prospects. The remainder of increased revenue
results from a full year of absorption of former AlliedSignal accounts of a
drummed specialty chemical, whose customer list was purchased by Registrant July
1, 1994.
Revenues decreased 1.9% comparing the quarter ended 6/30/95 to 3/31/95; the
decline is too small to be attributed any significance.
OPERATIONAL COSTS AND EXPENSES
Cost of sales increased 35.6% for the quarter ended 6/30/95 comparing 6/30/94
and 43.3% for the six months ended 6/30/95 and 6/30/94 as a result of increased
pricing on raw material purchases, addition of plant personnel in correlation to
revenue increases, depreciation of assets in relation to new drumming station
and equipment at the Green Pond, South Carolina facility and overall increased
expenses to support business conditions as so described above.
Cost of sales decreased 5.3% from the 1Q '95 to 2Q '95 due to resignations of
personnel at the plant level, positions which were not immediately replaced.
Interest expense increased 70.5% for the quarter ending 6/30/95 vs. 6/30/94,
84.2% comparing the six months ended 6/30/95 and 6/30/94 and by only 3.5% from
the 1Q '95 to the 2Q '95 which are attributed to the financing of certain
AlliedSignal assets, the drumming station at the Green Pond, South Carolina
facility and higher credit line balances during the second half of 1994.
Other expenses increased 47.3% for the quarter ended 6/30 95 vs. 6/30/94, 47.5%
comparing the six months ended 6/30/95 and 6/30/94 and 1.2% from 1Q '95 to 2Q
'95. The increases are attributed to increased business as described from 2Q '94
to 2Q '95 such as expansion of corporate truck fleet with corresponding expense
in personnel and operations, recruiting of professional with related recruiting
and benefit expense and increased moving expense for the relocation of
professionals hired in 4Q '94 through 2Q '95. Other increased expense was
associated with increased travel into international markets in Europe and South
East Asia.
PRE-TAX EARNINGS
Pre-tax earnings increased $428,043 or >100% for the quarter ended 6/30/95 vs.
6/30/94, $805,371 or >100% for the six months ended 6/30/95 and 6/30/94 and 6.8%
from the 1Q '95 to the 2Q '95 in direct correlation to business conditions as
described during this time frame.
OTHER
INVENTORIES
Inventories as stated for periods ended 6/30/95 and 6/30/94 were $1,527,808 and
1,129,374 inclusive of the following breakdown:
<TABLE>
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
Raw Materials ........................ $ 705,205 $ 540,532
Finished Product ..................... 822,603 588,842
Work in Process ...................... -- --
Total Inventory ...................... $1,527,808 $1,129,374
</TABLE>
ADJUSTMENTS
In the opinion of Management, accompanying financial statements are
representative of all adjustments necessary to fairly present the consolidated
financial position as of June 30, 1995 and 1994.
<PAGE>
SIGNATURE
Pursuant to the requirement of the Securities Exchange Act of 1934 the
Registrant has duly caused this report to be signed on its behalf by the
undersigned therewith duly authorized.
BALCHEM CORPORATION
(Registrant)
BY /s/ Herb Weiss
------------------------------
Herb Weiss
President, Treasurer and
Chief Financial Officer
Dated: August 2, 1995
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-31-1995
<PERIOD-END> JUN-30-1995
<CASH> 45,063
<SECURITIES> 0
<RECEIVABLES> 2,527,928
<ALLOWANCES> 0
<INVENTORY> 1,527,808
<CURRENT-ASSETS> 4,493,253
<PP&E> 13,366,278
<DEPRECIATION> 5,787,020
<TOTAL-ASSETS> 12,604,096
<CURRENT-LIABILITIES> 2,443,004
<BONDS> 0
<COMMON> 208,069
0
0
<OTHER-SE> 6,446,925
<TOTAL-LIABILITY-AND-EQUITY> 6,654,994
<SALES> 5,826,793
<TOTAL-REVENUES> 5,826,793
<CGS> 3,073,256
<TOTAL-COSTS> 5,250,446
<OTHER-EXPENSES> 2,086,673
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 90,517
<INCOME-PRETAX> 576,347
<INCOME-TAX> 197,532
<INCOME-CONTINUING> 378,815
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 378,815
<EPS-PRIMARY> .125
<EPS-DILUTED> 0
</TABLE>
