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, 1996 Commission File No. 1-13648
BALCHEM CORPORATION
------------------------------------------------------
(Exact Name of Registrant as Specified in its Charter)
Maryland 13-2578432
- ------------------------------- -------------------------------
(State of Other Jurisdiction of (I.R.S. Employer Identification
Incorporation or Organization) Number)
P.O. Box 175, Slate Hill, NY 10973
- ---------------------------------------- ----------
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including area code: (914) 355-5300
---------------
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.
3,143,828 Shares Common Stock
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<TABLE>
<CAPTION>
BALCHEM CORPORATION
BALANCE SHEET
ASSETS
6/30/96 06/30/95
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<S> <C> <C>
CURRENT ASSETS
CASH & INVESTMENTS ............................... 36,753 45,063
ACCOUNTS RECEIVABLE ............................. 2,935,914 2,527,928
INVENTORIES ..................................... 1,998,383 1,527,808
PREPAID EXPENSES ................................ 400,116 299,670
CURRENT INCOME TAX ............................... 16,574 0
DEFERRED INCOME TAXES ........................... 137,145 92,784
TOTAL CURRENT ASSETS .......................... 5,524,885 4,493,253
---------- ----------
PROPERTY,PLANT & EQUIPMENT
LAND ............................................ 84,710 53,648
BUILDING ........................................ 4,117,916 3,806,537
EQUIPMENT ....................................... 9,951,654 9,506,093
TOTAL .......................................... 14,154,280 13,366,278
LESS:ACCUMULATED DEPRECIATION ........................ 6,586,303 5,787,020
NET PROPERTY, PLANT,EQUIPMENT ................. 7,567,977 7,579,258
---------- ----------
OTHER ASSETS
LICENSE ......................................... 11,250 13,125
FINANCING COSTS ................................ 13,970 19,107
GOODWILL ........................................ 7,333 7,633
CUSTOMER LISTS .................................. 586,626 251,652
PATENTS,TRADEMARKS®ISTRATIONS ................ 253,906 195,499
OTHER ........................................... 57,071 44,569
TOTAL OTHER ASSETS ........................... 930,156 531,585
---------- ----------
TOTAL ASSETS ......................................... 14,023,018 12,604,096
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<CAPTION>
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BALCHEM CORPORATION
BALANCE SHEET
(continued)
6/30/96 06/30/95
---------- ----------
LIABILITIES & STOCKHOLDER EQUITY
<S> <C> <C>
CURRENT LIABILITIES
PAYABLES (TRADE& ACCRUALS) ...................... 2,146,155 1,799,159
NOTES PAYABLE ................................... 88,442 66,389
DIVIDEND PAYABLE
LINE OF CREDIT .................................. -- 45,000
CURRENT DEBT .................................... 467,474 510,336
CURRENT INCOME TAX .............................. 0 22,120
TOTAL CURRENT LIABILITIES ..................... 2,702,071 2,443,004
---------- ----------
NOTES PAYABLE LONG TERM ......................... 28,933 40,960
LONG TERM DEBT .................................. 2,098,000 2,760,000
DEFERRED INCOME TAX ............................. 711,164 617,316
DEFERRED COMPENSATION .......................... 121,572 87,822
TOTAL LIABILITIES .................................... 5,661,740 5,949,102
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STOCKHOLDERS EQUITY
COMMON STOCK ..................................... 209,588 208,069
PAID IN CAPITAL .................................. 1,768,887 1,715,286
RETAINED EARNINGS ................................ 6,382,803 4,731,639
TOTAL STOCKHOLDERS' EQUITY .................... 8,361,278 6,654,994
---------- ----------
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY ............. 14,023,018 12,604,096
---------- ----------
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<CAPTION>
BALCHEM CORPORATION
STATEMENT OF CASH FLOWS
FOR THE PERIOD ENDING JUNE 30, 1996 AND JUNE 30, 1995
1996 1995
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<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
NET EARNINGS .................................. 906,685 730,848
ADJUSTMENT TO RECONCILE NET INCOME TO
NET CASH PROVIDED BY OPERATING ACTIVITIES
DEFERRED TAXES ................................ 18,390 24,817
DEPRECIATION & AMORTIZATION ................... 461,198 398,044
CHANGES IN ASSETS & LIABILITIES
ACCOUNTS RECEIVABLE ........................... 209,578 60,349
INVENTORIES ................................... (125,545) (225,934)
PREPAID EXPENSES .............................. 145,476 140,256
ACCOUNTS PAYABLE .............................. (348,964) (274,069)
INCOME TAX PAYABLE ........................... (24,247) (68,100)
DEFERRED COMPENSATION ......................... 15,910 4,018
TOTAL ADJUSTMENTS .................................. 351,796 59,381
NET CASH PROVIDED BY (USED IN)
OPERATING ACTIVITIES ............................... 1,258,481 790,229
CASH FLOWS FROM INVESTING ACTIVITIES
CAPITAL EXPENDITURES .......................... (210,901) (488,913)
INVESTMENTS IN OTHER ASSETS .................. (259,320) (123,429)
NET CASH USED IN INVESTING ACTIVITIES .............. (470,221) (612,342)
CASH FLOWS FROM FINANCING ACTIVITIES
NET BORROWINGS UNDER LINE OF CREDIT ........... -- (470,000)
NOTES PAYABLE ................................. (265,326) (160,266)
NOTE PAYABLE LONG TERM ........................ (5,586) (5,033)
PROCEEDS FROM LONG TERM BORROWINGS ............ -- 3,500,000
PRINCIPAL PAYMENT ON SHORT TERM BORROWINGS ... -- (447,167)
PRINCIPAL PAYMENT ON LONG TERM DEBT .......... (528,000) (2,509,500)
STOCK OPTIONS ................................. 6,702 4,499
DIVIDENDS PAYABLE ............................. (109,976) (85,802)
NET CASH PROVIDED BY (USED IN)
FINANCING ACTIVITIES ............................... (902,186) (173,269)
INCREASE( DECREASE) IN CASH ........................ (113,926) 4,618
CASH BEGINNING .................................... 150,679 40,445
CASH ENDING ....................................... 36,753 45,063
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<CAPTION>
BALCHEM CORPORATION
SUMMARIZED FINANCIAL INFORMATION (UNAUDITED)
INCOME STATEMENT
FOR THE THREE MONTHS ENDED FOR THE SIX MONTHS ENDED
-------------------------- ------------------------
6/30/96 6/30/95 % CHANGE 6/30/96 6/30/95 % CHANGE
<S> <C> <C> <C> <C> <C> <C>
SALES & OTHER REVENUES 6,740,326 5,826,793 15.7% 13,082,197 11,763,816 11.2%
COST OF SALES 3,503,206 3,073,256 6,710,339 6,321,175
% OF SALES 51.97% 52.74% -0.77% 51.29% 53.73% -2.44%
INTEREST EXPENSE 69,127 90,517 143,320 177,991
% OF SALES 1.03% 1.55% -0.53% 1.10% 1.51% -0.42%
OTHER EXPENSES 2,432,805 2,086,673 4,825,467 4,148,775
% OF SALES 36.09% 35.81% 0.28% 36.89% 35.27% 1.62%
OPERATING COSTS AND EXPENSES 6,005,139 5,250,447 11,679,127 10,647,942
PRE - TAX OPERATING EARNINGS 735,187 576,346 1,403,070 1,115,874
% OF SALES 10.91% 9.89% 1.02% 10.73% 9.49% 1.24%
INCOME TAXES 263,109 197,532 496,386 385,027
NET INCOME 472,078 378,814 906,684 730,847
% OF SALES 7.00% 6.50% 0.50% 6.93% 6.21% 0.72%
NUMBER OF OUTSTANDING SHARES 3,143,828 3,121,155 3,143,828 3,121,155
EARNINGS PER SHARE 0.150 0.121 0.288 0.234
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<CAPTION>
FOR THE THREE MONTHS ENDED
--------------------------
6/30/96 6/30/95 % CHANGE
<C> <C> <C> <C>
SALES & OTHER REVENUES 6,740,326 6,341,871 6.3%
COST OF SALES 3,503,206 3,207,133
% OF SALES 51.97% 50.57% 1.40%
INTEREST EXPENSE 69,127 74,193
% OF SALES 1.03% 1.17% -0.14%
OTHER EXPENSES 2,432,805 2,392,662
% OF SALES 36.09% 37.73% -1.63%
OPERATING COSTS AND EXPENSES 6,005,139 5,673,989
PRE - TAX OPERATING EARNINGS 735,187 667,882
% OF SALES 10.91% 10.53% 0.38%
INCOME TAXES 263,109 233,277
NET INCOME 472,078 434,605
% OF SALES 7.00% 6.85% 0.15%
NUMBER OF OUTSTANDING SHARES 3,143,828 3,143,691
EARNINGS PER SHARE 0.150 0.138
</TABLE>
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MANAGEMENT DISCUSSION AND ANALYSIS
REVENUES
REVENUES INCREASED 15.7% FOR THE QUARTER ENDED 6/30/96 COMPARED TO THE QUARTER
ENDED 6/30/95; 11.2% FOR THE THE SIX MONTHS ENDED 6/30/96 COMPARED TO 6/30/95
AND 6.3% FOR THE QUARTER ENDED 6/30/96 COMPARED TO THE QUARTER ENDED 3/31/96.
REVENUE INCREASES FOR THE AFOREMENTIONED TIME FRAMES ARE ATTRIBUTED TO REVENUES
GENERATED THROUGH PRICE INCREASES ,INCREASED PUCHASES BY THE ESTABLISHED
CUSTOMER BASE AND THE COMMERCIALIZATION OF PROSPECTS IN THE DOMESTIC AND
INTERNATIONAL MARKETS.
OPERATIONAL COSTS AND EXPENSES
COST OF SALES, AS A PERCENTAGE OF SALES, DECREASED .77% FOR THE QUARTER ENDED
6/30/96 AS COMPARED TO THE QUARTER ENDED ENDED 6/30/95 ; DECREASED 2.44% , AS A
PERCENTAGE OF SALES, FOR THE SIX MONTHS ENDED 6/30/96 AS COMPARED TO 6/30/95.
COST OF SALES, AS A PERCENTAGE OF SALES, INCREASED 1.4% FOR THE QUARTER ENDED
6/30/96 AS COMPARED TO THE QUARTER ENDED 3/31/96.
COST OF SALES DECREASED COMPARING 1996 TO 1995 AS A RESULT OF INCREASED
PRODUCTIVITY DUE TO VOLUME THAT MORE THAN OFFSET INCREASED EXPENSES IN PLANT
REPAIR,MAINTENANCE AND SUPPLIES.
THE INCREASE IN COST OF SALES FROM 1Q '96 TO 2Q '96 IS THE RESULT OF INCREASED
DEPRECIATION EXPENSE FOR THE GREEN POND, SOUTH CAROLINA FACILITY AND THE UPGRADE
OF INSURANCE COVERAGES.
INTEREST EXPENSE DECREASED 23.6% OR .53%, AS A PERCENTAGE OF SALES, FOR THE
QUARTER ENDED 6/30/96 AS COMPARED TO THE QUARTER ENDED 6/30/95 ; DECREASED 19.5%
OR .42%, AS A PERCENTAGE OF SALES, FOR THE SIX MONTHS ENDED 6/30/96 AS COMPARED
TO 6/30/95 ; DECREASED 6.8% OR .14% AS A PERCENTAGE OF SALES, FOR THE QUARTER
ENDED 6/30/96 COMPARED TO THE QUARTER ENDED 3/31/96.
THE DECLINE IN INTEREST EXPENSE WAS A COMBINATION OF THE ABILITY TO ACCELERATE
THE PAY DOWN OF LONG TERM DEBT BY THE ADDITIONAL PAYMENT OF 300K MADE IN 2Q 96
AND THE REDUCTION IN THE LENDING RATE BY THE CHASE MANHATTAN BANK.
OTHER EXPENSES INCREASED 16.6% OR .28%, AS A PERCENTAGE OF SALES,FOR THE QUARTER
ENDED 6/30/96 AS COMPARED TO THE QUARTER ENDED 6/30/95; INCREASED 16.3% OR
1.62%, AS A PERCENTAGE OF SALES, FOR THE SIX MONTHS ENDED 6/30/96 COMPARED TO
6/30/95;
OTHER EXPENSES INCREASED 1.67% FOR THE QUARTER ENDED 6/30/96 AS COMPARED TO THE
QUARTER ENDED 3/31/96; HOWEVER, EXPENSES DECREASED 1.63% AS A PERCENTAGE OF
SALES.
THE INCREASED EXPENSES COMPARING 1996 TO 1995 ARE REPRESENTATIVE OF THE STAFFING
OF PROFESSIONALS IN SENIOR MANAGEMENT AND SALES SUPPORT (DOMESTIC/INTERNATIONAL)
WITH CORRESPONDING EXPENSES SUCH AS RELOCATION AND BENEFITS AND INCREASED COST
IN HEALTH INSURANCE AND THE COVERAGE OF THE ADDITIONAL PERSONNEL HIRED DURING
THE AFOREMENTIONED TIME FRAMES.
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PRE-TAX EARNINGS
PRE-TAX EARNINGS INCREASED 27.6% OR 1.0 % , AS A PERCENTAGE OF SALES, FOR THE
QUARTER ENDED 6/30/96 AS COMPARED TO THE QUARTER ENDED 6/30/95; INCREASED 25.7%
OR 1.24%, AS A PERCENTAGE OF SALES,FOR THE SIX MONTHS ENDED 6/30/96 COMPARED TO
6/30/95; INCREASED 10.1% OR .38%, AS A PERCENTAGE OF SALES, FOR THE QUARTER
ENDED 6/30/96 COMPARED TO THE QUARTER ENDED 3/31/96 AS A RESULT OF THE BUSINESS
CONDITIONS PREVIOUSLY DESCRIBED.
INVENTORIES
INVENTORIES AS STATED FOR THE PERIOD 6/30/96 AND 6/30/95 WERE $2,079,515 AND
$2,228,280, RESPECTIVELY,INCLUSIVE OF THE FOLLOWING BREAKDOWN:
1996 1995
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RAW MATERIALS 1171271 705205
FINISHED PRODUCT 827112 822603
WORK IN PROCESS 0 0
TOTAL INVENTORY 1998383 1527808
ADJUSTMENTS
IN THE OPINION OF MANAGEMENT, THE ACCOMPANYING STATEMENTS ARE REPRESENTATIVE OF
ALL THE ADJUSTMENTS TO FAIRLY PRESENT THE CONSOLIDATED POSITION AS OF JUNE 30,
1996 AND JUNE 30, 1995.
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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 13, 1996
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 36,753
<SECURITIES> 0
<RECEIVABLES> 2,935,914
<ALLOWANCES> 0
<INVENTORY> 1,998,383
<CURRENT-ASSETS> 5,524,885
<PP&E> 14,154,280
<DEPRECIATION> 6,586,303
<TOTAL-ASSETS> 7,567,977
<CURRENT-LIABILITIES> 5,661,740
<BONDS> 0
0
0
<COMMON> 209,588
<OTHER-SE> 8,151,690
<TOTAL-LIABILITY-AND-EQUITY> 14,023,018
<SALES> 6,740,326
<TOTAL-REVENUES> 6,740,326
<CGS> 3,503,206
<TOTAL-COSTS> 6,005,139
<OTHER-EXPENSES> 2,432,805
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 69,127
<INCOME-PRETAX> 735,187
<INCOME-TAX> 263,109
<INCOME-CONTINUING> 472,078
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 472,078
<EPS-PRIMARY> .15
<EPS-DILUTED> .15
</TABLE>
