Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 31, 2022 | Apr. 21, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2022 | |
Document Transition Report | false | |
Entity File Number | 1-13648 | |
Entity Registrant Name | Balchem Corporation | |
Entity Incorporation, State or Country Code | MD | |
Entity Tax Identification Number | 13-2578432 | |
Entity Address, Address Line One | 52 Sunrise Park Road | |
Entity Address, City or Town | New Hampton | |
Entity Address, State or Province | NY | |
Entity Address, Postal Zip Code | 10958 | |
City Area Code | 845 | |
Local Phone Number | 326-5600 | |
Title of 12(b) Security | Common Stock, par value $.06-2/3 per share | |
Trading Symbol | BCPC | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 32,116,459 | |
Entity Central Index Key | 0000009326 | |
Current Fiscal Year End Date | --12-31 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q1 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 64,466 | $ 103,239 |
Accounts receivable, net of allowance for doubtful accounts of $1,164 and $928 at March 31, 2022 and December 31, 2021 respectively | 136,974 | 117,408 |
Inventories, net | 108,411 | 91,058 |
Prepaid expenses | 5,383 | 6,116 |
Other current assets | 4,570 | 4,411 |
Total current assets | 319,804 | 322,232 |
Property, plant and equipment, net | 240,419 | 237,517 |
Goodwill | 522,587 | 523,949 |
Intangible assets with finite lives, net | 88,525 | 94,665 |
Right of use assets - operating leases | 6,901 | 6,929 |
Right of use assets - finance lease | 2,308 | 2,359 |
Derivative assets | 882 | 0 |
Other assets | 13,482 | 11,674 |
Total assets | 1,194,908 | 1,199,325 |
Current liabilities: | ||
Trade accounts payable | 46,819 | 56,243 |
Accrued expenses | 53,957 | 43,411 |
Accrued compensation and other benefits | 10,325 | 19,567 |
Dividends payable | 129 | 20,886 |
Income taxes payable | 9,936 | 1,334 |
Operating lease liabilities - current | 2,194 | 2,194 |
Finance lease liabilities - current | 169 | 167 |
Total current liabilities | 123,529 | 143,802 |
Revolving loan | 128,569 | 108,569 |
Deferred income taxes | 47,033 | 46,455 |
Operating lease liabilities - non-current | 4,730 | 4,811 |
Finance lease liabilities - non-current | 2,260 | 2,303 |
Derivative liabilities | 0 | 2,658 |
Other long-term obligations | 15,105 | 13,712 |
Total liabilities | 321,226 | 322,310 |
Commitments and contingencies (Note 15) | ||
Stockholders' equity: | ||
Preferred stock, $25 par value. Authorized 2,000,000 shares; none issued and outstanding | 0 | 0 |
Common stock, $0.0667 par value. Authorized 120,000,000 shares; 32,116,069 shares issued and outstanding at March 31, 2022 and 32,287,150 shares issued and outstanding at December 31, 2021, respectively | 2,142 | 2,154 |
Additional paid-in capital | 116,771 | 147,716 |
Retained earnings | 761,058 | 732,138 |
Accumulated other comprehensive loss | (6,289) | (4,993) |
Total stockholders' equity | 873,682 | 877,015 |
Total liabilities and stockholders' equity | $ 1,194,908 | $ 1,199,325 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Current assets: | ||
Allowance for doubtful accounts | $ 1,164 | $ 928 |
Stockholders' equity: | ||
Preferred stock, par value (in dollars per share) | $ 25 | $ 25 |
Preferred stock, shares authorized (in shares) | 2,000,000 | 2,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.0667 | $ 0.0667 |
Common stock, shares authorized (in shares) | 120,000,000 | 120,000,000 |
Common stock, shares issued (in shares) | 32,116,069 | 32,287,150 |
Common stock, shares outstanding (in shares) | 32,116,069 | 32,287,150 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Earnings - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Income Statement [Abstract] | ||
Net sales | $ 228,867 | $ 185,656 |
Cost of sales | 157,361 | 126,929 |
Gross margin | 71,506 | 58,727 |
Operating expenses: | ||
Selling expenses | 16,985 | 14,924 |
Research and development expenses | 3,231 | 2,749 |
General and administrative expenses | 12,954 | 10,479 |
Total operating expenses | 33,170 | 28,152 |
Earnings from operations | 38,336 | 30,575 |
Other expenses: | ||
Interest expense, net | 545 | 725 |
Other expense (income), net | 161 | (133) |
Total other expenses | 706 | 592 |
Earnings before income tax expense | 37,630 | 29,983 |
Income tax expense | 8,700 | 6,572 |
Net earnings | $ 28,930 | $ 23,411 |
Net earnings per common share - basic (in dollars per share) | $ 0.90 | $ 0.73 |
Net earnings per common share - diluted (in dollars per share) | $ 0.89 | $ 0.72 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Statement of Comprehensive Income [Abstract] | ||
Net earnings | $ 28,930 | $ 23,411 |
Other comprehensive loss, net of tax: | ||
Foreign currency translation adjustment | (2,842) | (6,143) |
Unrealized gain on cash flow hedge | 1,573 | 512 |
Change in postretirement benefit plans | (27) | 7 |
Other comprehensive loss | (1,296) | (5,624) |
Comprehensive income | $ 27,634 | $ 17,787 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Changes in Stockholders' Equity - USD ($) $ in Thousands | Total | Retained Earnings | Accumulated Other Comprehensive (Loss) Income | Common Stock | Additional Paid-in Capital |
Beginning balance at Dec. 31, 2020 | $ 828,233 | $ 656,740 | $ 4,173 | $ 2,160 | $ 165,160 |
Beginning balance (in shares) at Dec. 31, 2020 | 32,372,621 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net earnings | 23,411 | 23,411 | |||
Other comprehensive loss | (5,624) | (5,624) | |||
Repurchases of common stock | (1,596) | $ (1) | (1,595) | ||
Repurchases of common stock (in shares) | (13,475) | ||||
Shares and options issued under stock plans | 5,068 | $ 6 | 5,062 | ||
Shares and options issued under stock plans (in shares) | 92,784 | ||||
Ending balance at Mar. 31, 2021 | 849,492 | 680,151 | (1,451) | $ 2,165 | 168,627 |
Ending balance (in shares) at Mar. 31, 2021 | 32,451,930 | ||||
Beginning balance at Dec. 31, 2021 | $ 877,015 | 732,138 | (4,993) | $ 2,154 | 147,716 |
Beginning balance (in shares) at Dec. 31, 2021 | 32,287,150 | 32,287,150 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net earnings | $ 28,930 | 28,930 | |||
Other comprehensive loss | (1,296) | (1,296) | |||
Repurchases of common stock | (34,599) | $ (16) | (34,583) | ||
Repurchases of common stock (in shares) | (245,685) | ||||
Dividends | (10) | (10) | |||
Shares and options issued under stock plans | 3,642 | $ 4 | 3,638 | ||
Shares and options issued under stock plans (in shares) | 74,604 | ||||
Ending balance at Mar. 31, 2022 | $ 873,682 | $ 761,058 | $ (6,289) | $ 2,142 | $ 116,771 |
Ending balance (in shares) at Mar. 31, 2022 | 32,116,069 | 32,116,069 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Cash flows from operating activities: | ||
Net earnings | $ 28,930 | $ 23,411 |
Adjustments to reconcile net earnings to net cash provided by operating activities: | ||
Depreciation and amortization | 11,928 | 12,364 |
Stock compensation expense | 3,077 | 2,622 |
Provision for doubtful accounts | 328 | 69 |
Unrealized loss (gain) on foreign currency transactions and deferred compensation | 37 | (229) |
Gain on disposal of assets | (29) | (1) |
Changes in assets and liabilities | ||
Accounts receivable | (20,405) | (9,610) |
Inventories | (17,598) | (6,702) |
Prepaid expenses and other current assets | 487 | 1,000 |
Accounts payable and accrued expenses | (7,708) | 10,344 |
Income taxes | 8,522 | 7,043 |
Other | (548) | 296 |
Net cash provided by operating activities | 7,021 | 40,607 |
Cash flows from investing activities: | ||
Capital expenditures and intangible assets acquired | (10,256) | (6,312) |
Proceeds from sale of assets | 184 | 86 |
Net cash used in investing activities | (10,072) | (6,226) |
Cash flows from financing activities: | ||
Proceeds from revolving loan | 20,000 | 5,000 |
Principal payments on revolving loan | 0 | (15,000) |
Principal payments on finance lease | (41) | (39) |
Proceeds from stock options exercised | 498 | 2,402 |
Dividends paid | (20,703) | (18,700) |
Repurchase of common stock | (34,599) | (1,596) |
Net cash used in financing activities | (34,845) | (27,933) |
Effect of exchange rate changes on cash | (877) | (2,484) |
(Decrease) increase in cash and cash equivalents | (38,773) | 3,964 |
Cash and cash equivalents beginning of period | 103,239 | 84,571 |
Cash and cash equivalents end of period | $ 64,466 | $ 88,535 |
CONDENSED CONSOLIDATED FINANCIA
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS | 3 Months Ended |
Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS | CONDENSED CONSOLIDATED FINANCIAL STATEMENTS The condensed consolidated financial statements presented herein have been prepared in accordance with the accounting policies described in the December 31, 2021 consolidated financial statements, and should be read in conjunction with the consolidated financial statements and notes, which appear in the Annual Report on Form 10-K for the year ended December 31, 2021. The condensed consolidated financial statements reflect the operations of Balchem Corporation and its subsidiaries (the "Company"). All intercompany balances and transactions have been eliminated in consolidation. In the opinion of management, the unaudited condensed consolidated financial statements furnished in this Form 10-Q include all adjustments necessary for a fair presentation of the financial position, results of operations and cash flows for the interim periods presented. All such adjustments are of a normal recurring nature. The condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP” or “GAAP”) governing interim financial statements and the instructions to Form 10-Q and Article 10 of Regulation S-X under the Securities Exchange Act of 1934 (the "Exchange Act") and therefore do not include some information and notes necessary to conform to annual reporting requirements. The results of operations for the three months ended March 31, 2022 are not necessarily indicative of the operating results expected for the full year or any interim period. Certain reclassifications have been made to prior period amounts to conform with the current period's presentation. Recent Accounting Pronouncements Recently Adopted Accounting Standards In March 2020, the FASB issued Accounting Standards Update ("ASU") 2020-04, "Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting." This ASU provides temporary optional guidance to ease the potential burden in accounting for reference rate reform. The new guidance provides optional expedients and exceptions for applying generally accepted accounting principles to contract modifications and hedging relationships, subject to meeting certain criteria, that reference LIBOR or another reference rate expected to be discontinued. The ASU is intended to help stakeholders during the global market-wide reference rate transition period. Therefore, this Standard Update is in effect from March 12, 2020 through December 31, 2022. In January 2021, the FASB issued ASU 2021-01, "Reference Rate Reform (Topic 848): Scope." ASU 2021-01 clarifies that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition. The ASU also amends the expedients and exceptions in Topic 848 to capture the incremental consequences of the scope clarification and to tailor the existing guidance to derivative instruments affected by the discounting transition. The Company adopted the Standard Update in 2021. The adoption of the Standard update did not have a significant impact on the Company's consolidated financial statements and disclosures. In December 2019, the FASB issued ASU 2019-12, "Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes." ASU 2019-12 simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The amendments also improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance. ASU 2019-12 became effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. The Company adopted ASU 2019-12 on January 1, 2021. The adoption of ASU 2019-12 did not have a significant impact on the Company's consolidated financial statements and disclosures. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 3 Months Ended |
Mar. 31, 2022 | |
Stockholders' Equity Note [Abstract] | |
STOCKHOLDERS' EQUITY | STOCKHOLDERS’ EQUITY STOCK-BASED COMPENSATION The Company’s results for the three months ended March 31, 2022 and 2021 reflected the following stock-based compensation cost, and such compensation cost had the following effects on net earnings: Increase/(Decrease) for the Three Months Ended March 31, 2022 2021 Cost of sales $ 399 $ 299 Operating expenses 2,678 2,323 Net earnings (2,379) (2,022) As allowed by ASC 718, "Compensation-Stock Compensation", the Company has made an estimate of expected forfeitures based on its historical experience and is recognizing compensation cost only for those stock-based compensation awards expected to vest. The Company’s incentive plans allow for the granting of stock awards and options to purchase common stock. Both incentive stock options and nonqualified stock options can be awarded under the plans. No option will be exercisable for longer than ten years after the date of grant. The Company has approved and reserved a number of shares to be issued upon exercise of the outstanding options that is adequate to cover all exercises. As of March 31, 2022, the plans had 526,760 shares available for future awards. Compensation expense for stock options and stock awards is recognized on a straight-line basis over the vesting period, generally three years for stock options, three Option activity for the three months ended March 31, 2022 and 2021 is summarized below: For the three months ended Shares (000s) Weighted Aggregate Weighted Outstanding as of December 31, 2021 867 $ 88.19 $ 69,711 Granted 109 138.07 Exercised (8) 63.52 Forfeited — — Canceled — — Outstanding as of March 31, 2022 968 $ 94.01 $ 41,483 6.6 Exercisable as of March 31, 2022 676 $ 81.06 $ 37,594 5.6 For the three months ended Shares (000s) Weighted Aggregate Weighted Outstanding as of December 31, 2020 858 $ 80.58 $ 29,735 Granted 129 119.11 Exercised (34) 70.53 Forfeited (2) 101.38 Canceled (1) 74.57 Outstanding as of March 31, 2021 950 $ 86.11 $ 37,322 7.0 Exercisable as of March 31, 2021 604 $ 73.11 $ 31,603 5.8 ASC 718 requires companies to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award. The fair value of each option grant is estimated on the date of the grant using the Black-Scholes option-pricing model with the following weighted average assumptions: dividend yields of 0.5% and 0.5%; expected volatilities of 31% and 33%; risk-free interest rates of 2.0% and 0.5%; and expected lives of 4.9 years and 4.9 years, in each case for the three months ended March 31, 2022 and 2021, respectively. The Company used a projected expected life for each award granted based on historical experience of employees’ exercise behavior. Expected volatility is based on the Company’s historical volatility levels. Dividend yields are based on the Company’s historical dividend yields. Risk-free interest rates are based on the implied yields currently available on U.S. Treasury zero-coupon issues with a remaining term equal to the expected life. Other information pertaining to option activity during the three months ended March 31, 2022 and 2021 was as follows: Three Months Ended 2022 2021 Weighted-average fair value of options granted $ 40.26 $ 33.10 Total intrinsic value of stock options exercised ($000s) $ 654 $ 1,917 Non-vested restricted stock activity for the three months ended March 31, 2022 and 2021 is summarized below: Three Months Ended March 31, 2022 2021 Shares (000s) Weighted Shares (000s) Weighted Non-vested balance as of December 31 166 $ 99.70 159 $ 90.71 Granted 32 138.07 36 119.11 Vested (76) 80.65 (10) 85.37 Forfeited — — (2) 86.69 Non-vested balance as of March 31 122 $ 121.56 183 $ 96.70 Non-vested performance share activity for the three months ended March 31, 2022 and 2021 is summarized below: Three Months Ended March 31, 2022 2021 Shares (000s) Weighted Shares (000s) Weighted Non-vested balance as of December 31 69 $ 110.72 71 $ 91.99 Granted 39 114.22 36 108.74 Vested (35) 53.17 (24) 70.64 Forfeited (3) 84.09 (11) 74.57 Non-vested balance as of March 31 70 $ 127.69 72 $ 110.22 The performance share (“PS”) awards provide the recipients the right to receive a certain number of shares of the Company’s common stock in the future, subject to an EBITDA performance hurdle, where vesting is dependent upon the Company achieving a certain EBITDA percentage growth over the performance period, and relative total shareholder return (TSR), where vesting is dependent upon the Company’s TSR performance over the performance period relative to a comparator group consisting of the Russell 2000 index constituents. Expense is measured based on the fair value at the date of grant utilizing a Black-Scholes methodology to produce a Monte-Carlo simulation model which allows for the incorporation of the performance hurdles that must be met before the PS vests. The assumptions used in the fair value determination were risk free interest rates of 1.8% and 0.2%; dividend yields of 0.5% and 0.6%; volatilities of 32% and 33%; and initial TSR’s of -15.7% and 11.7%, in each case for the three months ended March 31, 2022 and 2021, respectively. Expense is estimated based on the number of shares expected to vest, assuming the requisite service period is rendered and the probable outcome of the performance condition is achieved. The estimate is revised if subsequent information indicates that the actual number of shares likely to vest differs from previous estimates. Expense is ultimately adjusted based on the actual achievement of service and performance targets. The PS will cliff vest 100% at the end of the third year following the grant in accordance with the performance metrics set forth. As of March 31, 2022 and 2021, there was $23,131 and $23,009, respectively, of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted under the plans. As of March 31, 2022, the unrecognized compensation cost is expected to be recognized over a weighted-average period of approximately 1.9 years. The Company estimates that share-based compensation expense for the year ended December 31, 2022 will be approximately $12,350. REPURCHASE OF COMMON STOCK |
INVENTORIES
INVENTORIES | 3 Months Ended |
Mar. 31, 2022 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | INVENTORIES Inventories, net of reserves at March 31, 2022 and December 31, 2021 consisted of the following: March 31, 2022 December 31, 2021 Raw materials $ 24,128 $ 28,639 Work in progress 21,964 10,563 Finished goods 62,319 51,856 Total inventories $ 108,411 $ 91,058 |
PROPERTY, PLANT AND EQUIPMENT
PROPERTY, PLANT AND EQUIPMENT | 3 Months Ended |
Mar. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY, PLANT AND EQUIPMENT | PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment at March 31, 2022 and December 31, 2021 are summarized as follows: March 31, 2022 December 31, 2021 Land $ 11,570 $ 11,692 Building 90,015 89,602 Equipment 258,758 253,995 Construction in progress 55,897 52,930 416,240 408,219 Less: accumulated depreciation 175,821 170,702 Property, plant and equipment, net $ 240,419 $ 237,517 |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 3 Months Ended |
Mar. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS | INTANGIBLE ASSETSThe Company had goodwill in the amount of $522,587 and $523,949 as of March 31, 2022 and December 31, 2021, respectively, subject to the provisions of ASC 350, “Intangibles-Goodwill and Other.” The decrease in goodwill is due to foreign exchange translation adjustments. Identifiable intangible assets with finite lives at March 31, 2022 and December 31, 2021 are summarized as follows: Amortization Gross Carrying Amount at Accumulated Amortization at Gross Carrying Amount at Accumulated Amortization at Customer relationships & lists 10-20 $ 239,194 $ 177,108 $ 240,059 $ 173,489 Trademarks & trade names 2-17 42,695 29,978 43,116 28,985 Developed technology 5-12 20,184 14,809 20,234 14,607 Other 2-18 24,771 16,424 23,921 15,584 $ 326,844 $ 238,319 $ 327,330 $ 232,665 Amortization of identifiable intangible assets was $5,911 and $6,484 for the three months ended March 31, 2022 and 2021, respectively. Assuming no change in the gross carrying value of identifiable intangible assets, the estimated amortization expense is $17,594 for the remainder of 2022, $19,393 for 2023, $10,516 for 2024, $6,260 for 2025, $4,938 for 2026 and $4,375 for 2027. At March 31, 2022 and 2021, there were no identifiable intangible assets with indefinite useful lives as defined by ASC 350, "Intangibles-Goodwill and Other." Identifiable intangible assets are reflected in the Company's consolidated balance sheets under Intangible assets with finite lives, net. There were no changes to the useful lives of intangible assets subject to amortization during the three months ended March 31, 2022 and 2021. |
EQUITY-METHOD INVESTMENT
EQUITY-METHOD INVESTMENT | 3 Months Ended |
Mar. 31, 2022 | |
Equity Method Investments and Joint Ventures [Abstract] | |
EQUITY-METHOD INVESTMENT | EQUITY-METHOD INVESTMENT In 2013, the Company and Eastman Chemical Company (formerly Taminco Corporation) formed a joint venture (66.66% / 33.34% ownership), St. Gabriel CC Company, LLC, to design, develop, and construct an expansion of the Company’s St. Gabriel aqueous choline chloride plant. The Company contributed the St. Gabriel plant, at cost, and all continued expansion and improvements are funded by the owners. The joint venture became operational as of July 1, 2016. St. Gabriel CC Company, LLC is a Variable Interest Entity (VIE) because the total equity at risk is not sufficient to permit the joint venture to finance its own activities without additional subordinated financial support. Additionally, voting rights (2 votes each) are not proportionate to the owners’ obligation to absorb expected losses or receive the expected residual returns of the joint venture. The Company will receive up to 2/3 of the production offtake capacity and absorbs operating expenses approximately proportional to the actual percentage of offtake. The joint venture is accounted for under the equity method of accounting since the Company is not the primary beneficiary as the Company does not have the power to direct the activities of the joint venture that most significantly impact its economic performance. The Company recognized a loss of $140 and $144 for the three months ended March 31, 2022 and 2021, respectively, relating to its portion of the joint venture's expenses in other expense. During the first quarter of 2022 and 2021, the Company made capital contributions to the investment totaling $58 and $13, res pectively. The carrying value of the joint venture at March 31, 2022 and December 31, 2021 is $4,417 and $4,499, respectively, and is recorded in other assets. |
REVOLVING LOAN
REVOLVING LOAN | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
REVOLVING LOAN | REVOLVING LOAN On June 27, 2018, the Company and a bank syndicate entered into the Credit Agreement, which replaced the credit facility that had provided for a senior secured term loan of $350,000 and a revolving loan of $100,000. The Credit Agreement, which expires on June 27, 2023, provides for revolving loans up to $500,000 (collectively referred to as the “loans”). The loans may be used for working capital, letters of credit, and other corporate purposes and may be drawn upon at the Company’s discretion. The initial borrowing under the Credit Agreement was used to pay the outstanding balance of $210,750 on the Company's senior secured term loan under its former credit facility, which was due May 2019. As of March 31, 2022 a nd December 31, 2021, t he total balance outstanding on the Credit Agreement amounted to $128,569 and $108,569, respectively. There are no installment payments required on the revolving loans; they may be voluntarily prepaid in whole or in part without premium or penalty, and all outstanding amounts are due on the maturity date. Amounts outstanding under the Credit Agreement are subject to an interest rate equal to a fluctuating rate as defined by the Credit Agreement plus an applicable rate. The applicable rate is based upon the Company’s consolidated net leverage ratio, as defined in the Credit Agreement, and the interest rate was 1.447% at March 31, 2022. The Company is also required to pay a commitment fee on the unused portion of the revolving loan, which is based on the Company’s consolidated net leverage ratio as defined in the Credit Agreement and ranges from 0.15% to 0.275% (0.150% at March 31, 2022). The unused portion of the revolving loan amounted to $371,431 at March 31, 2022. The Company is also required to pay, as applicable, letter of credit fees, administrative agent fees, and other fees to the arrangers and lenders. Costs associated with the issuance of the revolving loans are capitalized and amortized on a straight-line basis over the term of the Credit Agreement. Costs associated with the issuance of the extinguished senior secured loan were capitalized and amortized over the term of the respective financing arrangement using the effective interest method. Capitalized costs net of accumulated amortization totaled $350 and $421 at March 31, 2022 and December 31, 2021, respectively, and are included in other assets on the condensed consolidated balance sheets. Amortization expense pertaining to these costs totaled $71 for both the three months ended March 31, 2022 and 2021, and are included in interest expense in the accompanying consolidated statements of earnings. The Credit Agreement contains quarterly covenants requiring the consolidated leverage ratio to be less than a certain maximum ratio and the consolidated interest coverage ratio to exceed a certain minimum ratio. At March 31, 2022, the Company was in compliance with these covenants. Indebtedness under the Company’s loan agreements is secured by assets of the Company. |
NET EARNINGS PER SHARE
NET EARNINGS PER SHARE | 3 Months Ended |
Mar. 31, 2022 | |
Earnings Per Share [Abstract] | |
NET EARNINGS PER SHARE | NET EARNINGS PER SHARE The following presents a reconciliation of the net earnings and shares used in calculating basic and diluted net earnings per common share: Three Months Ended 2022 2021 Net Earnings - Basic and Diluted $ 28,930 $ 23,411 Share (000s) Weighted Average Common Shares - Basic 32,041 32,255 Effect of Dilutive Securities – Stock Options, Restricted Stock, and Performance Shares 434 402 Weighted Average Common Shares - Diluted 32,475 32,657 Net Earnings Per Share - Basic $ 0.90 $ 0.73 Net Earnings Per Share - Diluted $ 0.89 $ 0.72 The number of anti-dilutive shares were 113,029 and 311,030 for the three months ended March 31, 2022 and 2021, respectively. Anti-dilutive shares could potentially dilute basic earnings per share in future periods and therefore, were not included in diluted earnings per share. |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The Company’s effective tax rate for the three months ended March 31, 2022 and 2021, was 23.1% and 21.9%, respectively. The increase in the effective tax rate for the three months ended March 31, 2022 compared to the three months ended March 31, 2021 was primarily due to a reduction in certain tax credits and increased international income subject to higher foreign tax rates. Balchem will continue to evaluate and analyze the impact of the U.S. Tax Cuts and Jobs Act that was enacted on December 22, 2017 and the additional guidance that has been issued, and may be issued, by the U.S. Department of Treasury, the SEC, and/or the Financial Accounting Standards Board ("FASB") regarding this act. Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company regularly reviews its deferred tax assets for recoverability and would establish a valuation allowance if it believed that such assets may not be recovered, taking into consideration historical operating results, expectations of future earnings, changes in its operations, and the expected timing of the reversals of existing temporary differences. The Company accounts for uncertainty in income taxes utilizing ASC 740-10, "Income Taxes". ASC 740-10 clarifies whether or not to recognize assets or liabilities for tax positions taken that may be challenged by a tax authority. It prescribes a recognition threshold and measurement attribute for financial statement disclosure of tax positions taken or expected to be taken. This interpretation also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, and disclosures. The application of ASC 740-10 requires judgment related to the uncertainty in income taxes and could impact our effective tax rate. The Company files income tax returns in the U.S. and in various states and foreign countries. As of March 31, 2022, in the major jurisdictions where the Company operates, it is generally no longer subject to income tax examinations by tax authorities for years before 2017. As of March 31, 2022 and December 31, 2021, the Company had approximately $5,880 and $5,881, respectively, of unrecognized tax benefits, which are included in other long-term obligations on the Company’s condensed consolidated balance sheets. The Company includes interest expense or income as well as potential penalties on unrecognized tax positions as a component of income tax expense in the condensed consolidated statements of earnings. The total amount of accrued interest and penalties related to uncertain tax positions at March 31, 2022 and December 31, 2021 was approximately $2,148 and $2,106, respectively, and is included in other long-term obligations. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 3 Months Ended |
Mar. 31, 2022 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | SEGMENT INFORMATION Balchem Corporation reports three business segments: Human Nutrition & Health, Animal Nutrition & Health, and Specialty Products. Sales and production of products outside of our reportable segments and other minor business activities are included in "Other and Unallocated." Human Nutrition & Health The Human Nutrition & Health ("HNH") segment provides human grade choline nutrients and mineral amino acid chelated products through this segment for nutrition and health applications. Choline is recognized to play a key role in the development and structural integrity of brain cell membranes in infants, processing dietary fat, reproductive development and neural functions, such as memory and muscle function. HNH's mineral amino acid chelates, specialized mineral salts, and mineral complexes are used as raw materials for inclusion in premier human nutrition products. Proprietary technology has been combined to create an organic molecule in a form the body can readily assimilate. Sales growth for human nutrition applications is reliant on differentiation from lower-cost competitive products through scientific data, intellectual property and customers' appreciation of brand value. Consequently, HNH makes investments in the foregoing for long-term value differentiation. HNH also serves the food and beverage industry for beverage, bakery, dairy, confectionary, and savory manufacturers. HNH partners with its customers from ideation through commercialization to bring on-trend beverages, baked goods, confections, dairy and meat products to market. HNH has expertise in trends analysis and product development. When what is combined with its strong manufacturing capabilities in customized spray dried and emulsified powders, extrusion and agglomeration, blended lipid systems, liquid flavor delivery systems, juice and dairy bases, chocolate systems, as well as ice cream bases and variegates, HNH is a one-stop solutions provider for beverage and dairy product development needs. Additionally, HNH provides microencapsulation solutions to a variety of applications in food, pharmaceutical and nutritional ingredients to enhance performance of nutritional fortification, processing, mixing, and packaging applications and shelf-life. Major product applications are baked goods, refrigerated and frozen dough systems, processed meats, seasoning blends, confections, sports and protein bars, dietary plans, and nutritional supplements. HNH also creates cereal systems for ready-to-eat cereals, grain-based snacks, and cereal based ingredients. Animal Nutrition & Health The Company’s Animal Nutrition & Health ("ANH") segment provides nutritional products derived from its microencapsulation and chelation technologies in addition to basic choline chloride. For ruminant animals, ANH's microencapsulated products boost health and milk production, delivering nutrient supplements that are biologically available, providing required nutritional levels. ANH’s proprietary chelation technology provides enhanced nutrient absorption for various species of production and companion animals and is marketed for use in animal feed throughout the world. ANH also manufactures and supplies choline chloride, an essential nutrient for monogastric animal health, predominantly to the poultry, pet and swine industries. Choline, which is manufactured and sold in both dry and aqueous forms, plays a vital role in the metabolism of fat in these animals. In poultry, choline deficiency can result in reduced growth rates and perosis in young birds, while in swine production choline is a necessary and required component of gestating and lactating sow diets for both liver health and prevention of leg deformity. Sales of value-added encapsulated products are highly dependent on overall industry economics as well as the Company's ability to leverage the results of university and field research on the animal health and production benefits of our products. Management believes that success in the commodity-oriented basic choline chloride marketplace is highly dependent on the Company’s ability to maintain its strong reputation for excellent product quality and customer service. The Company continues to drive production efficiencies in order to maintain its competitive-cost position to effectively compete in a global marketplace. Specialty Products Ethylene oxide, at the 100% level and blended with carbon dioxide, is sold as a sterilant gas, primarily for use in the health care industry. It is used to sterilize a wide range of medical devices because of its versatility and effectiveness in treating hard or soft surfaces, composites, metals, tubing and different types of plastics without negatively impacting the performance of the device being sterilized. Specialty Products' 100% ethylene oxide product and blends are distributed worldwide in specially designed, reusable and recyclable drum and cylinder packaging, to assure compliance with safety, quality and environmental standards as outlined by the applicable regulatory agencies in the countries our products are shipped to. Specialty Products’s inventory of these specially built drums and cylinders, along with its five filling facilities, represents a significant capital investment. Contract sterilizers and medical device manufacturers are principal customers for this product. Specialty Products also sells single use canisters with 100% ethylene oxide for use in sterilizing re-usable devices typically processed in autoclave units in hospitals. As a fumigant, ethylene oxide blends are highly effective in killing bacteria, fungi, and insects in spices and other seasoning materials. Specialty Products also distributes a number of other gases for various uses, most notably propylene oxide and ammonia. Propylene oxide is marketed and sold in the U.S. as a fumigant to aid in the control of insects and microbiological spoilage; and to reduce bacterial and mold contamination in certain shell and processed nut meats, processed spices, cacao beans, cocoa powder, raisins, figs and prunes. Specialty Products distributes its propylene oxide product in the U.S. primarily in recyclable, single-walled, carbon steel cylinders according to standards outlined by the Environmental Protection Agency ("EPA") and the Department of Transportation ("DOT"). Propylene oxide is also sold worldwide to customers in approved reusable and recyclable drum and cylinder packaging for various chemical synthesis applications, such as increasing paint durability and manufacturing specialty starches and textile coatings. Ammonia is used primarily as a refrigerant, and also for heat treatment of metals and various chemical synthesis applications, and is distributed in reusable and recyclable drum and cylinder packaging, which are approved for use in the countries these products are shipped to. Specialty Products' inventory of cylinders for these products also represents a significant capital investment. Specialty Products’ micronutrient agricultural nutrition business sells chelated minerals primarily into high value crops. Specialty Products has a unique and patented two-step approach to solving mineral deficiency in plants to optimize health, yield and shelf-life. First, Specialty Products determines optimal mineral balance for plant health. Specialty Products then supplies a foliar applied Metalosate ® product range, utilizing patented amino acid chelate technology in order to optimize mineral balance. These products quickly and efficiently deliver mineral nutrients. As a result, the farmer/grower gets healthier crops that are more resistant to disease and pests, larger yields and healthier food for the consumer with extended shelf life for produce being shipped long distances. The segment information is summarized as follows: Business Segment Assets March 31, December 31, Human Nutrition & Health $ 752,120 $ 727,131 Animal Nutrition & Health 165,627 158,971 Specialty Products 181,635 184,628 Other and Unallocated (1) 95,526 128,595 Total $ 1,194,908 $ 1,199,325 Business Segment Net Sales Three Months Ended 2022 2021 Human Nutrition & Health $ 122,445 $ 104,516 Animal Nutrition & Health 69,342 51,148 Specialty Products 33,334 28,008 Other and Unallocated (2) 3,746 1,984 Total $ 228,867 $ 185,656 Business Segment Earnings Before Income Taxes Three Months Ended 2022 2021 Human Nutrition & Health $ 20,303 $ 19,690 Animal Nutrition & Health 11,321 5,056 Specialty Products 7,761 7,189 Other and Unallocated (2) (1,049) (1,360) Interest and other expense (706) (592) Total $ 37,630 $ 29,983 Depreciation/Amortization Three Months Ended 2022 2021 Human Nutrition & Health $ 7,355 $ 7,573 Animal Nutrition & Health 1,661 1,764 Specialty Products 1,932 2,269 Other and Unallocated (2) 980 758 Total $ 11,928 $ 12,364 Capital Expenditures Three Months Ended 2022 2021 Human Nutrition & Health $ 4,760 $ 3,967 Animal Nutrition & Health 3,688 1,631 Specialty Products 1,146 330 Other and Unallocated (2) 115 23 Total $ 9,709 $ 5,951 (1) Other and Unallocated assets consist of certain cash, capitalized loan issuance costs, other assets, investments, and income taxes, which the Company does not allocate to its individual business segments. It also includes assets associated with a few minor businesses which individually do not meet the quantitative thresholds for separate presentation. (2) Other and Unallocated consists of a few minor businesses which individually do not meet the quantitative thresholds for separate presentation and corporate expenses that have not been allocated to a segment. Unallocated corporate expenses consist of: (i) Transaction and integration costs, ERP implementation costs, and unallocated legal fees totaling $304 and $234 for the first quarter of 2022 and 2021, respectively, and (ii) Unallocated amortization expense of $809 and $675 for the first quarter of 2022 and 2021, respectively, related to an intangible asset in connection with a company-wide ERP system implementation and capitalized loan issuance costs that was included in interest expense in Company's consolidated statement of earnings. |
REVENUE
REVENUE | 3 Months Ended |
Mar. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE | REVENUE Revenue Recognition Revenues are recognized when control of the promised goods is transferred to customers, in an amount that reflects the consideration the Company expects to realize in exchange for those goods. The following table presents revenues disaggregated by revenue source. Sales and usage-based taxes are excluded from revenues. Three Months Ended 2022 2021 Product Sales $ 218,053 $ 175,988 Co-manufacturing 8,307 7,278 Consignment 1,591 1,051 Product Sales Revenue 227,951 184,317 Royalty Revenue 916 1,339 Total Revenue $ 228,867 $ 185,656 The following table presents revenues disaggregated by geography, based on the shipping addresses of customers: Three Months Ended 2022 2021 United States $ 174,491 $ 137,851 Foreign Countries 54,376 47,805 Total Revenue $ 228,867 $ 185,656 Product Sales Revenues The Company’s primary operation is the manufacturing and sale of health and wellness ingredient products, in which the Company receives an order from a customer and fulfills that order. The Company’s product sales are considered point-in-time revenue and consist of four sub-streams: product sales, co-manufacturing, bill and hold, and consignment. Under the co-manufacturing agreements, the Company is responsible for the manufacture of a finished good where the customer provides the majority of the raw materials. The Company controls the manufacturing process and the ultimate end-product before it is shipped to the customer. Based on these factors, the Company has determined that it is the principal in these agreements and therefore revenue is recognized in the gross amount of consideration the Company expects to be entitled for the goods provided. Royalty Revenues Royalty revenue consists of agreements with customers to use the Company’s intellectual property in exchange for a sales-based royalty. Royalties are considered over time revenue and are recorded in the HNH segment. Contract Liabilities The Company records contract liabilities when cash payments are received or due in advance of performance, including amounts which are refundable. The Company’s payment terms vary by the type and location of customers and the products offered. The term between invoicing and when payment is due is not significant. For certain products or services and customer types, the Company requires payment before the products are delivered to the customer. Practical Expedients and Exemptions The Company generally expenses sales commissions when incurred because the amortization period would have been one year or less. These costs are recorded within selling and marketing expenses. The Company does not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which the Company recognizes revenue at the amount to which it has the right to invoice for products shipped. |
SUPPLEMENTAL CASH FLOW INFORMAT
SUPPLEMENTAL CASH FLOW INFORMATION | 3 Months Ended |
Mar. 31, 2022 | |
Supplemental Cash Flow Information [Abstract] | |
SUPPLEMENTAL CASH FLOW INFORMATION | SUPPLEMENTAL CASH FLOW INFORMATION Cash paid during the three months ended March 31, 2022 and 2021 for income taxes and interest is as follows: Three Months Ended 2022 2021 Income taxes $ 2 $ 2 Interest $ 1,010 $ 1,363 |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | 3 Months Ended |
Mar. 31, 2022 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) The changes in accumulated other comprehensive income/(loss) were as follows: Three Months Ended 2022 2021 Net foreign currency translation adjustment $ (2,842) $ (6,143) Net change of cash flow hedge (see Note 19 for further information) Unrealized gain on cash flow hedge 2,084 677 Tax (511) (165) Net of tax 1,573 512 Net change in postretirement benefit plan (see Note 14 for further information) Amortization of prior service cost 2 18 Amortization of gain — (5) Gain arising during the period and prior service credit (32) (4) Total before tax (30) 9 Tax 3 (2) Net of tax and adjustment (27) 7 Total other comprehensive loss $ (1,296) $ (5,624) Included in "Net foreign currency translation adjustment" were gains of $1,123 and $3,197, related to a net investment hedge, which were net of taxes of $333 and $1,026 for the three months ended March 31, 2022 and 2021, respectively. See Note 19, "Derivative Instruments and Hedging Activities." Accumulated other comprehensive income (loss) at March 31, 2022 and December 31, 2021 consisted of the following: Foreign currency Cash flow hedge Postretirement Total Balance December 31, 2021 $ (3,602) $ (1,631) $ 240 $ (4,993) Other comprehensive (loss) income (2,842) 1,573 (27) (1,296) Balance March 31, 2022 $ (6,444) $ (58) $ 213 $ (6,289) |
EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS | 3 Months Ended |
Mar. 31, 2022 | |
Retirement Benefits [Abstract] | |
EMPLOYEE BENEFIT PLANS | EMPLOYEE BENEFIT PLANS Defined Contribution Plans The Company sponsored two 401(k) savings plans for eligible employees, which were merged into one plan on January 1st, 2021. The remaining plan allows participants to make pretax contributions and the Company matches certain percentages of those pretax contributions. The remaining plan also has a discretionary profit sharing portion and matches 401(k) contributions with shares of the Company’s Common Stock. All amounts contributed to the plan are deposited into a trust fund administered by independent trustees. Postretirement Medical Plans The Company provides postretirement benefits in the form of two unfunded postretirement medical plans; one that is under a collective bargaining agreement and covers eligible retired employees of the Verona facility and a plan for those named as executive officers in the Company’s proxy statement. Net periodic benefit costs for such retirement medical plans were as follows: Three Months Ended 2022 2021 Service cost $ 20 $ 22 Interest cost 6 6 Amortization of prior service cost 2 18 Amortization of gain — (6) Net periodic benefit cost $ 28 $ 40 The amount recorded for these obligations on the Company’s balance sheets as of March 31, 2022 and December 31, 2021 were $1,197 and $1,293, respectively, and are included in other long-term obligations. These plans are unfunded and approved claims are paid from Company funds. Historical cash payments made under such plans have typically been less than $200 per year. Defined Benefit Pension Plans On May 27, 2019, the Company acquired Chemogas, which has an unfunded defined benefit pension plan. The plan provides for the payment of a lump sum at retirement or payments in case of death of the covered employees. The amount recorded for these obligations on the Company's consolidated balance sheet as of March 31, 2022 and December 31, 2021 were $676 and $684, respectively, and were included in other long-term obligations. Net periodic benefit costs for such benefit pension plans were as follows: Three Months Ended 2022 2021 Service cost with interest to end of year $ 11 $ 17 Interest cost 5 4 Expected return on plan assets (10) (9) Amortization of gain — 1 Total net periodic benefit cost $ 6 $ 13 Deferred Compensation Plan |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Aggregate future minimum rental payments required under all non-cancelable operating and finance leases at March 31, 2022 are as follows: Year April 1, 2022 to December 31, 2022 $ 2,097 2023 2,212 2024 1,964 2025 1,132 2026 743 2027 549 Thereafter 1,930 Total minimum lease payments $ 10,627 The Company’s Verona, Missouri facility, while held by a prior owner, was designated by the EPA as a Superfund site and placed on the National Priorities List in 1983 because of dioxin contamination on portions of the site. Remediation was conducted by the prior owner under the oversight of the EPA and the Missouri Department of Natural Resources. The Company is indemnified by the sellers under its May 2001 asset purchase agreement covering its acquisition of the Verona, Missouri facility for certain potential liabilities associated with the Superfund site. In February 2022, BCP Ingredients, Inc. ("BCP"), the Company subsidiary that operates the site, along with the former owner of the site received a Special Notice Letter from EPA for the performance of a focused remedial investigation/feasibility study at the site with regard to the presence of certain contaminants, focusing primarily on 1,4 dioxane. BCP has, with the assistance of experts, studied site conditions and hydrogeology and responded to the Special Notice Letter. BCP anticipates that the EPA will respond to its response in the coming months. From time to time, the Company is a party to various litigation, claims and assessments. Management believes that the ultimate outcome of such matters will not have a material effect on the Company’s consolidated financial position, results of operations, or liquidity. |
FAIR VALUE OF FINANCIAL INSTRUM
FAIR VALUE OF FINANCIAL INSTRUMENTS | 3 Months Ended |
Mar. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | FAIR VALUE OF FINANCIAL INSTRUMENTS The Company has a number of financial instruments, none of which are held for trading purposes. The Company estimates that the fair value of all financial instruments at March 31, 2022 and December 31, 2021 does not differ materially from the aggregate carrying values of its financial instruments recorded in the accompanying consolidated balance sheets. The estimated fair value amounts have been determined by the Company using available market information and appropriate valuation methodologies. Considerable judgment is necessarily required in interpreting market data to develop the estimates of fair value, and, accordingly, the estimates are not necessarily indicative of the amounts that the Company could realize in a current market exchange. The carrying value of debt approximates fair value as the interest rate is based on market and the Company’s consolidated leverage ratio. The Company’s financial instruments also include cash equivalents, accounts receivable, accounts payable, and accrued liabilities, which are carried at cost and approximate fair value due to the short-term maturity of these instruments. Cash and cash equivalents at March 31, 2022 and December 31, 2021 includes $937 and $933 in money market funds, respectively. Non-current assets at March 31, 2022 and December 31, 2021 includes $8,208 and $6,267, respectively, of rabbi trust funds related to the Company's deferred compensation plan. The money market and rabbi trust funds are valued using level one inputs, as defined by ASC 820, “Fair Value Measurement.” The Company also has derivative financial instruments, consisting of a cross-currency swap and an interest rate swap, which are included in derivative assets or derivative liabilities, in the consolidated balance sheets (see Note 19, "Derivative Instruments and Hedging Activities"). The fair values of these derivative instruments are determined based on Level 2 inputs, using significant inputs that are observable either directly or indirectly, including interest rate curves and implied volatilities. The derivative asset related to the cross-currency swap was $956 at March 31, 2022 and the derivative liability related to the cross-currency swap was $500 at December 31, 2021. The derivative liability related to the interest rate swap was $74 and $2,158 at March 31, 2022 and December 31, 2021, respectively. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended |
Mar. 31, 2022 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS The Company provides services on a contractual agreement to St. Gabriel CC Company, LLC. These services include accounting, information technology, quality control, and purchasing services, as well as operation of the St. Gabriel CC Company, LLC plant. The Company also sells raw materials to St. Gabriel CC Company, LLC. These raw materials are used in the production of finished goods that are, in turn, sold by Saint Gabriel CC Company, LLC to the Company for resale to unrelated parties. As such, the sale of these raw materials to St. Gabriel CC Company, LLC in this scenario lacks economic substance and therefore the Company does not include them in net sales within the consolidated statements of earnings. The services the Company provided amounted to $975 and $827 for the three months ended March 31, 2022 and 2021, respectively. The raw materials purchased and subsequently sold amounted to $9,311 and $5,462 for the three months ended March 31, 2022 and 2021, respectively. These services and raw materials are primarily recorded in cost of goods sold net of the finished goods received from St. Gabriel CC Company, LLC of $6,489 and $4,391 for the three months ended March 31, 2022 and 2021, respectively. At March 31, 2022 and December 31, 2021, the Company had receivables of $13,651 and $10,504, respectively, recorded in accounts receivable from St. Gabriel CC Company, LLC for services rendered and raw materials sold and payables of $8,673 and $7,552, respectively, for finished goods received recorded in accounts payable. In addition, the Company had receivables in the amount of $164, related to non-contractual monies owed from St. Gabriel CC Company, LLC, recorded in receivables as of December 31, 2021. There was no such receivables as of March 31, 2022. The Company had payables in the amount of $318 and $296 related to non-contractual monies owed to St. Gabriel CC Company, LLC, recorded in accounts payable as of March 31, 2022 and December 31, 2021, respectively. |
LEASES
LEASES | 3 Months Ended |
Mar. 31, 2022 | |
Leases [Abstract] | |
LEASES | LEASES The Company has both real estate leases and equipment leases. The main types of equipment leases include forklifts, trailers, printers and copiers, railcars, and trucks. Leases are categorized as either operating leases or finance leases. As a result of electing the practical expedient within ASU 2016-02, variable lease payments are combined and recognized on the balance sheet in the event that those charges and any related increases are explicitly stated in the lease. Such payments include common area maintenance charges, property taxes, and insurance charges and are recorded in the right of use asset and corresponding liability when the payments are stated in the lease with (a) fixed or in-substance fixed amounts, or (b) a variable payment based on an index or rate. Due to the acquisitive nature of the Company and the potential for synergies upon integration of acquired entities, the Company determined that the reasonably certain criterion could not be met for any renewal periods beginning two years from March 31, 2022. In addition, the Company has historically not been exercising purchase options with equipment leases as it does not make economic sense to buy the leased equipment. Instead, the Company has historically replaced the leased equipment with a newly leased equipment. Therefore, the Company determined that the reasonably certain criterion could not be met as it relates to purchase options. The Company has no residual value guarantees in lease transactions. The Company did not identify any embedded leases. As indicated above, the Company elected the practical expedient to combine lease and non-lease components and recognizes the combined amount on the consolidated balance sheet. Management determined that since the Company has a centralized treasury function, the parent company would either fund or guarantee a subsidiary's loan for borrowing over a similar term. As such, the Company's management determined it is appropriate to utilize a corporate based borrowing rate for all locations. The Company developed four tranches of leases based on lease terms and these tranches reflect the composition of the current lease portfolio. The Company's borrowing history shows that interest rates of a term loan or a line of credit depend on the duration of the loan rather than the nature of the assets purchased by those funds. Based on this understanding, the Company elected to use a portfolio approach to discount rates, applying corporate rates to the tranches of leases based on lease terms. Based on the Company's risk rating, the company applied the following discount rates for new leases entered into during 2022: (1) 1-2 years, 1.45% (2) 3-4 years, 2.04% (3) 5-9 years, 2.38% and (4) 10+ years, 3.10%. In connection with the acquisition of Zumbro, the Company assumed a finance lease commitment for a warehouse, with an expiration date of March 31, 2033. The warehouse can be purchased at a pre-determined price beginning in 2023. Right of use assets and lease liabilities at March 31, 2022 and December 31, 2021 are summarized as follows: Right of use assets March 31, 2022 December 31, 2021 Operating leases $ 6,901 $ 6,929 Finance leases 2,308 2,359 Total $ 9,209 $ 9,288 Lease liabilities - current March 31, 2022 December 31, 2021 Operating leases $ 2,194 $ 2,194 Finance leases 169 167 Total $ 2,363 $ 2,361 Lease liabilities - non-current March 31, 2022 December 31, 2021 Operating leases $ 4,730 $ 4,811 Finance leases 2,260 2,303 Total $ 6,990 $ 7,114 For the three months ended March 31, 2022 and 2021, the Company's total lease costs were as follows, which included both amounts recognized in profits or losses during the period and amounts capitalized on the balance sheet, and the cash flows arising from lease transactions: Three Months Ended 2022 2021 Lease Cost Operating lease cost $ 781 $ 716 Finance Lease cost Amortization of ROU asset 52 52 Interest on lease liabilities 31 33 Total finance lease cost $ 83 $ 85 Total lease cost $ 864 $ 801 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 801 $ 739 Operating cash flows from finance leases 31 33 Financing cash flows from finance leases 41 39 $ 873 $ 811 ROU assets obtained in exchange for new operating lease liabilities, net of ROU assets disposals $ 662 $ 1,036 Weighted-average remaining lease term - operating leases 4.03 years 4.14 years Weighted-average remaining lease term - finance leases 11.16 years 12.00 years Weighted-average discount rate - operating leases 3.3 % 4.2 % Weighted-average discount rate - finance leases 5.1 % 5.1 % |
LEASES | LEASES The Company has both real estate leases and equipment leases. The main types of equipment leases include forklifts, trailers, printers and copiers, railcars, and trucks. Leases are categorized as either operating leases or finance leases. As a result of electing the practical expedient within ASU 2016-02, variable lease payments are combined and recognized on the balance sheet in the event that those charges and any related increases are explicitly stated in the lease. Such payments include common area maintenance charges, property taxes, and insurance charges and are recorded in the right of use asset and corresponding liability when the payments are stated in the lease with (a) fixed or in-substance fixed amounts, or (b) a variable payment based on an index or rate. Due to the acquisitive nature of the Company and the potential for synergies upon integration of acquired entities, the Company determined that the reasonably certain criterion could not be met for any renewal periods beginning two years from March 31, 2022. In addition, the Company has historically not been exercising purchase options with equipment leases as it does not make economic sense to buy the leased equipment. Instead, the Company has historically replaced the leased equipment with a newly leased equipment. Therefore, the Company determined that the reasonably certain criterion could not be met as it relates to purchase options. The Company has no residual value guarantees in lease transactions. The Company did not identify any embedded leases. As indicated above, the Company elected the practical expedient to combine lease and non-lease components and recognizes the combined amount on the consolidated balance sheet. Management determined that since the Company has a centralized treasury function, the parent company would either fund or guarantee a subsidiary's loan for borrowing over a similar term. As such, the Company's management determined it is appropriate to utilize a corporate based borrowing rate for all locations. The Company developed four tranches of leases based on lease terms and these tranches reflect the composition of the current lease portfolio. The Company's borrowing history shows that interest rates of a term loan or a line of credit depend on the duration of the loan rather than the nature of the assets purchased by those funds. Based on this understanding, the Company elected to use a portfolio approach to discount rates, applying corporate rates to the tranches of leases based on lease terms. Based on the Company's risk rating, the company applied the following discount rates for new leases entered into during 2022: (1) 1-2 years, 1.45% (2) 3-4 years, 2.04% (3) 5-9 years, 2.38% and (4) 10+ years, 3.10%. In connection with the acquisition of Zumbro, the Company assumed a finance lease commitment for a warehouse, with an expiration date of March 31, 2033. The warehouse can be purchased at a pre-determined price beginning in 2023. Right of use assets and lease liabilities at March 31, 2022 and December 31, 2021 are summarized as follows: Right of use assets March 31, 2022 December 31, 2021 Operating leases $ 6,901 $ 6,929 Finance leases 2,308 2,359 Total $ 9,209 $ 9,288 Lease liabilities - current March 31, 2022 December 31, 2021 Operating leases $ 2,194 $ 2,194 Finance leases 169 167 Total $ 2,363 $ 2,361 Lease liabilities - non-current March 31, 2022 December 31, 2021 Operating leases $ 4,730 $ 4,811 Finance leases 2,260 2,303 Total $ 6,990 $ 7,114 For the three months ended March 31, 2022 and 2021, the Company's total lease costs were as follows, which included both amounts recognized in profits or losses during the period and amounts capitalized on the balance sheet, and the cash flows arising from lease transactions: Three Months Ended 2022 2021 Lease Cost Operating lease cost $ 781 $ 716 Finance Lease cost Amortization of ROU asset 52 52 Interest on lease liabilities 31 33 Total finance lease cost $ 83 $ 85 Total lease cost $ 864 $ 801 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 801 $ 739 Operating cash flows from finance leases 31 33 Financing cash flows from finance leases 41 39 $ 873 $ 811 ROU assets obtained in exchange for new operating lease liabilities, net of ROU assets disposals $ 662 $ 1,036 Weighted-average remaining lease term - operating leases 4.03 years 4.14 years Weighted-average remaining lease term - finance leases 11.16 years 12.00 years Weighted-average discount rate - operating leases 3.3 % 4.2 % Weighted-average discount rate - finance leases 5.1 % 5.1 % |
DERIVATIVE INSTRUMENTS AND HEDG
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | 3 Months Ended |
Mar. 31, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIESThe Company is exposed to market fluctuations in interest rates as well as variability in foreign exchange rates. In May 2019, the Company entered into an interest rate swap (cash flow hedge) with the JP Morgan Chase, N.A. (the "Swap Counterparty") and a cross-currency swap (net investment hedge) with the JP Morgan Chase, N.A. (the "the Bank Counterparty"). The Company's primary objective for holding derivative financial instruments is to manage interest rate risk and foreign currency risk. On May 28, 2019, the Company entered into a pay-fixed (2.05%), receive-floating interest rate swap with a notional amount of $108,569 and a maturity date of June 27, 2023. The Company's risk management objective and strategy with respect to the interest rate swap is to protect the Company against adverse fluctuations in interest rates by reducing its exposure to variability in cash flows relating to interest payments on a portion of its outstanding debt. The Company is meeting its objective since changes in the cash flows of the interest rate swap are expected to exactly offset the changes in the cash flows attributable to fluctuations in the contractually specified interest rate on the interest payments associated with the Credit Agreement. The net interest expense related to the interest rate swap contract were $513 and $521 for the three months ended March 31, 2022 and 2021, which were recorded in the consolidated statements of operations under interest expense, net. At the same time, the Company also entered into a pay-fixed (0.00%), receive-fixed (2.05%) cross-currency swap to manage foreign exchange risk related to the Company's net investment in Chemogas. The derivative has a notional amount of $108,569, an effective date of May 28, 2019, and a maturity date of June 27, 2023. Interest income related to the cross-currency swap contract was $550 and $556, respectively, for the three months ended March 31, 2022 and 2021, which was recorded in the condensed consolidated statements of operations under interest expense, net. The derivative instruments are with a single counterparty and are subject to a contractual agreement that provides for the net settlement of all contracts through a single payment in a single currency in the event of default on or termination of any one contract. As such, the derivative instruments are categorized as a master netting arrangement and presented as a net derivative asset or derivative liability on the consolidated balance sheets. As of March 31, 2022 and December 31, 2021, the fair value of the derivative instruments is presented as follows in the Company's consolidated balance sheets: Derivative assets (liabilities) March 31, 2022 December 31, 2021 Interest rate swap $ (74) $ (2,158) Cross-currency swap 956 (500) Derivative assets (liabilities) $ 882 $ (2,658) On a quarterly basis, the Company assesses whether the hedging relationship related to the interest rate swap is highly effective at achieving offsetting changes in cash flow attributable to the risk being hedged based on the following factors: (1) whether the key features and terms as enumerated above for the interest rate swap and hedged transactions match during the period (2) whether it is probable that the Swap Counterparty will not default on its obligations under the swap, and (3) whether the relationship qualifies for hedge accounting based on the Company's quarterly qualitative review. In addition, on a quarterly basis the Company assesses whether the hedging relationship related to the cross-currency swap is highly effective based on the following evaluations: (1) whether the Company will always have a sufficient amount of non-functional currency (EUR) net investment balance to at least meet the cross-currency notional amount until the maturity date of the hedge (2) whether it is probable that the Swap Counterparty will not default on its obligations under the swap, and (3) whether the relationship qualifies for hedge accounting based on the Company's quarterly qualitative review. If any mismatches arise for either the interest rate swap or cross-currency swap, the Company will perform a regression analysis to determine if the hedged transaction is highly effective. If determined not to be highly effective, the Company will discontinue hedge accounting. As of March 31, 2022, the Company assessed the hedging relationships for the interest rate swap and cross-currency swap and determined them to be highly effective. As such, the net change in fair values of the derivative instruments was recorded in accumulated other comprehensive income. Gains on our hedging instruments are recognized in accumulated other comprehensive income (loss) and categorized as follows for the three months ended March 31, 2022 and 2021: Location within Statements of Comprehensive Income Three Months Ended 2022 2021 Cash flow hedge (interest rate swap), net of tax Unrealized gain on cash flow hedge, net $ 1,573 $ 512 Net investment hedge (cross-currency swap), net of tax Net foreign currency translation adjustment 1,123 3,197 Total $ 2,696 $ 3,709 |
CONDENSED CONSOLIDATED FINANC_2
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Policies) | 3 Months Ended |
Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Reclassifications | Certain reclassifications have been made to prior period amounts to conform with the current period's presentation. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Recently Adopted Accounting Standards In March 2020, the FASB issued Accounting Standards Update ("ASU") 2020-04, "Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting." This ASU provides temporary optional guidance to ease the potential burden in accounting for reference rate reform. The new guidance provides optional expedients and exceptions for applying generally accepted accounting principles to contract modifications and hedging relationships, subject to meeting certain criteria, that reference LIBOR or another reference rate expected to be discontinued. The ASU is intended to help stakeholders during the global market-wide reference rate transition period. Therefore, this Standard Update is in effect from March 12, 2020 through December 31, 2022. In January 2021, the FASB issued ASU 2021-01, "Reference Rate Reform (Topic 848): Scope." ASU 2021-01 clarifies that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition. The ASU also amends the expedients and exceptions in Topic 848 to capture the incremental consequences of the scope clarification and to tailor the existing guidance to derivative instruments affected by the discounting transition. The Company adopted the Standard Update in 2021. The adoption of the Standard update did not have a significant impact on the Company's consolidated financial statements and disclosures. In December 2019, the FASB issued ASU 2019-12, "Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes." ASU 2019-12 simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The amendments also improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance. ASU 2019-12 became effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. The Company adopted ASU 2019-12 on January 1, 2021. The adoption of ASU 2019-12 did not have a significant impact on the Company's consolidated financial statements and disclosures. |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Compensation Cost on Net Earnings | The Company’s results for the three months ended March 31, 2022 and 2021 reflected the following stock-based compensation cost, and such compensation cost had the following effects on net earnings: Increase/(Decrease) for the Three Months Ended March 31, 2022 2021 Cost of sales $ 399 $ 299 Operating expenses 2,678 2,323 Net earnings (2,379) (2,022) |
Schedule of Stock Option Activity | Option activity for the three months ended March 31, 2022 and 2021 is summarized below: For the three months ended Shares (000s) Weighted Aggregate Weighted Outstanding as of December 31, 2021 867 $ 88.19 $ 69,711 Granted 109 138.07 Exercised (8) 63.52 Forfeited — — Canceled — — Outstanding as of March 31, 2022 968 $ 94.01 $ 41,483 6.6 Exercisable as of March 31, 2022 676 $ 81.06 $ 37,594 5.6 For the three months ended Shares (000s) Weighted Aggregate Weighted Outstanding as of December 31, 2020 858 $ 80.58 $ 29,735 Granted 129 119.11 Exercised (34) 70.53 Forfeited (2) 101.38 Canceled (1) 74.57 Outstanding as of March 31, 2021 950 $ 86.11 $ 37,322 7.0 Exercisable as of March 31, 2021 604 $ 73.11 $ 31,603 5.8 |
Schedule of Other Information Pertaining to Stock Option Activity | Other information pertaining to option activity during the three months ended March 31, 2022 and 2021 was as follows: Three Months Ended 2022 2021 Weighted-average fair value of options granted $ 40.26 $ 33.10 Total intrinsic value of stock options exercised ($000s) $ 654 $ 1,917 |
Schedule of Non-vested Restricted Stock Activity | Non-vested restricted stock activity for the three months ended March 31, 2022 and 2021 is summarized below: Three Months Ended March 31, 2022 2021 Shares (000s) Weighted Shares (000s) Weighted Non-vested balance as of December 31 166 $ 99.70 159 $ 90.71 Granted 32 138.07 36 119.11 Vested (76) 80.65 (10) 85.37 Forfeited — — (2) 86.69 Non-vested balance as of March 31 122 $ 121.56 183 $ 96.70 |
Schedule of Non-vested Performance Share Activity | Non-vested performance share activity for the three months ended March 31, 2022 and 2021 is summarized below: Three Months Ended March 31, 2022 2021 Shares (000s) Weighted Shares (000s) Weighted Non-vested balance as of December 31 69 $ 110.72 71 $ 91.99 Granted 39 114.22 36 108.74 Vested (35) 53.17 (24) 70.64 Forfeited (3) 84.09 (11) 74.57 Non-vested balance as of March 31 70 $ 127.69 72 $ 110.22 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | Inventories, net of reserves at March 31, 2022 and December 31, 2021 consisted of the following: March 31, 2022 December 31, 2021 Raw materials $ 24,128 $ 28,639 Work in progress 21,964 10,563 Finished goods 62,319 51,856 Total inventories $ 108,411 $ 91,058 |
PROPERTY, PLANT AND EQUIPMENT (
PROPERTY, PLANT AND EQUIPMENT (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, Plant and Equipment | Property, plant and equipment at March 31, 2022 and December 31, 2021 are summarized as follows: March 31, 2022 December 31, 2021 Land $ 11,570 $ 11,692 Building 90,015 89,602 Equipment 258,758 253,995 Construction in progress 55,897 52,930 416,240 408,219 Less: accumulated depreciation 175,821 170,702 Property, plant and equipment, net $ 240,419 $ 237,517 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Identifiable Intangible Assets | Identifiable intangible assets with finite lives at March 31, 2022 and December 31, 2021 are summarized as follows: Amortization Gross Carrying Amount at Accumulated Amortization at Gross Carrying Amount at Accumulated Amortization at Customer relationships & lists 10-20 $ 239,194 $ 177,108 $ 240,059 $ 173,489 Trademarks & trade names 2-17 42,695 29,978 43,116 28,985 Developed technology 5-12 20,184 14,809 20,234 14,607 Other 2-18 24,771 16,424 23,921 15,584 $ 326,844 $ 238,319 $ 327,330 $ 232,665 |
NET EARNINGS PER SHARE (Tables)
NET EARNINGS PER SHARE (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Earnings Per Share [Abstract] | |
Reconciliation of the Net Earnings and Shares Used in Calculating Basic and Diluted Net Earnings Per Share | The following presents a reconciliation of the net earnings and shares used in calculating basic and diluted net earnings per common share: Three Months Ended 2022 2021 Net Earnings - Basic and Diluted $ 28,930 $ 23,411 Share (000s) Weighted Average Common Shares - Basic 32,041 32,255 Effect of Dilutive Securities – Stock Options, Restricted Stock, and Performance Shares 434 402 Weighted Average Common Shares - Diluted 32,475 32,657 Net Earnings Per Share - Basic $ 0.90 $ 0.73 Net Earnings Per Share - Diluted $ 0.89 $ 0.72 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information | The segment information is summarized as follows: Business Segment Assets March 31, December 31, Human Nutrition & Health $ 752,120 $ 727,131 Animal Nutrition & Health 165,627 158,971 Specialty Products 181,635 184,628 Other and Unallocated (1) 95,526 128,595 Total $ 1,194,908 $ 1,199,325 Business Segment Net Sales Three Months Ended 2022 2021 Human Nutrition & Health $ 122,445 $ 104,516 Animal Nutrition & Health 69,342 51,148 Specialty Products 33,334 28,008 Other and Unallocated (2) 3,746 1,984 Total $ 228,867 $ 185,656 Business Segment Earnings Before Income Taxes Three Months Ended 2022 2021 Human Nutrition & Health $ 20,303 $ 19,690 Animal Nutrition & Health 11,321 5,056 Specialty Products 7,761 7,189 Other and Unallocated (2) (1,049) (1,360) Interest and other expense (706) (592) Total $ 37,630 $ 29,983 Depreciation/Amortization Three Months Ended 2022 2021 Human Nutrition & Health $ 7,355 $ 7,573 Animal Nutrition & Health 1,661 1,764 Specialty Products 1,932 2,269 Other and Unallocated (2) 980 758 Total $ 11,928 $ 12,364 Capital Expenditures Three Months Ended 2022 2021 Human Nutrition & Health $ 4,760 $ 3,967 Animal Nutrition & Health 3,688 1,631 Specialty Products 1,146 330 Other and Unallocated (2) 115 23 Total $ 9,709 $ 5,951 (1) Other and Unallocated assets consist of certain cash, capitalized loan issuance costs, other assets, investments, and income taxes, which the Company does not allocate to its individual business segments. It also includes assets associated with a few minor businesses which individually do not meet the quantitative thresholds for separate presentation. (2) Other and Unallocated consists of a few minor businesses which individually do not meet the quantitative thresholds for separate presentation and corporate expenses that have not been allocated to a segment. Unallocated corporate expenses consist of: (i) Transaction and integration costs, ERP implementation costs, and unallocated legal fees totaling $304 and $234 for the first quarter of 2022 and 2021, respectively, and (ii) Unallocated amortization expense of $809 and $675 for the first quarter of 2022 and 2021, respectively, related to an intangible asset in connection with a company-wide ERP system implementation and capitalized loan issuance costs that was included in interest expense in Company's consolidated statement of earnings. |
REVENUE (Tables)
REVENUE (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of Revenues | The following table presents revenues disaggregated by revenue source. Sales and usage-based taxes are excluded from revenues. Three Months Ended 2022 2021 Product Sales $ 218,053 $ 175,988 Co-manufacturing 8,307 7,278 Consignment 1,591 1,051 Product Sales Revenue 227,951 184,317 Royalty Revenue 916 1,339 Total Revenue $ 228,867 $ 185,656 The following table presents revenues disaggregated by geography, based on the shipping addresses of customers: Three Months Ended 2022 2021 United States $ 174,491 $ 137,851 Foreign Countries 54,376 47,805 Total Revenue $ 228,867 $ 185,656 |
SUPPLEMENTAL CASH FLOW INFORM_2
SUPPLEMENTAL CASH FLOW INFORMATION (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Supplemental Cash Flow Information [Abstract] | |
Schedule of Supplemental Cash Flow Information | Cash paid during the three months ended March 31, 2022 and 2021 for income taxes and interest is as follows: Three Months Ended 2022 2021 Income taxes $ 2 $ 2 Interest $ 1,010 $ 1,363 |
ACCUMULATED OTHER COMPREHENSI_2
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Schedule of Changes in Accumulated Other Comprehensive Income (Loss) | The changes in accumulated other comprehensive income/(loss) were as follows: Three Months Ended 2022 2021 Net foreign currency translation adjustment $ (2,842) $ (6,143) Net change of cash flow hedge (see Note 19 for further information) Unrealized gain on cash flow hedge 2,084 677 Tax (511) (165) Net of tax 1,573 512 Net change in postretirement benefit plan (see Note 14 for further information) Amortization of prior service cost 2 18 Amortization of gain — (5) Gain arising during the period and prior service credit (32) (4) Total before tax (30) 9 Tax 3 (2) Net of tax and adjustment (27) 7 Total other comprehensive loss $ (1,296) $ (5,624) |
Schedule of Accumulated Other Comprehensive Income (Loss) | Accumulated other comprehensive income (loss) at March 31, 2022 and December 31, 2021 consisted of the following: Foreign currency Cash flow hedge Postretirement Total Balance December 31, 2021 $ (3,602) $ (1,631) $ 240 $ (4,993) Other comprehensive (loss) income (2,842) 1,573 (27) (1,296) Balance March 31, 2022 $ (6,444) $ (58) $ 213 $ (6,289) |
EMPLOYEE BENEFIT PLANS (Tables)
EMPLOYEE BENEFIT PLANS (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Retirement Benefits [Abstract] | |
Schedule of Net Periodic Benefit Cost | Net periodic benefit costs for such retirement medical plans were as follows: Three Months Ended 2022 2021 Service cost $ 20 $ 22 Interest cost 6 6 Amortization of prior service cost 2 18 Amortization of gain — (6) Net periodic benefit cost $ 28 $ 40 Net periodic benefit costs for such benefit pension plans were as follows: Three Months Ended 2022 2021 Service cost with interest to end of year $ 11 $ 17 Interest cost 5 4 Expected return on plan assets (10) (9) Amortization of gain — 1 Total net periodic benefit cost $ 6 $ 13 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Aggregate Future Minimum Rental Payments Required under Non-Cancelable Operating Leases | Aggregate future minimum rental payments required under all non-cancelable operating and finance leases at March 31, 2022 are as follows: Year April 1, 2022 to December 31, 2022 $ 2,097 2023 2,212 2024 1,964 2025 1,132 2026 743 2027 549 Thereafter 1,930 Total minimum lease payments $ 10,627 |
LEASES (Tables)
LEASES (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Leases [Abstract] | |
Summary of Right of Use Asset and Lease Liabilities | Right of use assets and lease liabilities at March 31, 2022 and December 31, 2021 are summarized as follows: Right of use assets March 31, 2022 December 31, 2021 Operating leases $ 6,901 $ 6,929 Finance leases 2,308 2,359 Total $ 9,209 $ 9,288 Lease liabilities - current March 31, 2022 December 31, 2021 Operating leases $ 2,194 $ 2,194 Finance leases 169 167 Total $ 2,363 $ 2,361 Lease liabilities - non-current March 31, 2022 December 31, 2021 Operating leases $ 4,730 $ 4,811 Finance leases 2,260 2,303 Total $ 6,990 $ 7,114 |
Schedule of Lease Cost | For the three months ended March 31, 2022 and 2021, the Company's total lease costs were as follows, which included both amounts recognized in profits or losses during the period and amounts capitalized on the balance sheet, and the cash flows arising from lease transactions: Three Months Ended 2022 2021 Lease Cost Operating lease cost $ 781 $ 716 Finance Lease cost Amortization of ROU asset 52 52 Interest on lease liabilities 31 33 Total finance lease cost $ 83 $ 85 Total lease cost $ 864 $ 801 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 801 $ 739 Operating cash flows from finance leases 31 33 Financing cash flows from finance leases 41 39 $ 873 $ 811 ROU assets obtained in exchange for new operating lease liabilities, net of ROU assets disposals $ 662 $ 1,036 Weighted-average remaining lease term - operating leases 4.03 years 4.14 years Weighted-average remaining lease term - finance leases 11.16 years 12.00 years Weighted-average discount rate - operating leases 3.3 % 4.2 % Weighted-average discount rate - finance leases 5.1 % 5.1 % |
DERIVATIVE INSTRUMENTS AND HE_2
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Fair Value of Derivative Instruments | As of March 31, 2022 and December 31, 2021, the fair value of the derivative instruments is presented as follows in the Company's consolidated balance sheets: Derivative assets (liabilities) March 31, 2022 December 31, 2021 Interest rate swap $ (74) $ (2,158) Cross-currency swap 956 (500) Derivative assets (liabilities) $ 882 $ (2,658) |
Schedule of Gains (Losses) on Hedging Instruments | Gains on our hedging instruments are recognized in accumulated other comprehensive income (loss) and categorized as follows for the three months ended March 31, 2022 and 2021: Location within Statements of Comprehensive Income Three Months Ended 2022 2021 Cash flow hedge (interest rate swap), net of tax Unrealized gain on cash flow hedge, net $ 1,573 $ 512 Net investment hedge (cross-currency swap), net of tax Net foreign currency translation adjustment 1,123 3,197 Total $ 2,696 $ 3,709 |
STOCKHOLDERS' EQUITY - Stock-Ba
STOCKHOLDERS' EQUITY - Stock-Based Compensation (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Net earnings | $ (2,379) | $ (2,022) |
Expiration period of options granted | 10 years | |
Shares available for future awards (in shares) | 526,760 | |
Stock Options | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Vesting period | 3 years | |
Restricted Stock | Non-Employee Director | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Vesting period | 3 years | |
Restricted Stock | Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Vesting period | 3 years | |
Restricted Stock | Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Vesting period | 4 years | |
Performance Shares | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Vesting period | 3 years | |
Cost of sales | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Stock-based compensation cost | $ 399 | 299 |
Operating expenses | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Stock-based compensation cost | $ 2,678 | $ 2,323 |
STOCKHOLDERS' EQUITY - Stock Op
STOCKHOLDERS' EQUITY - Stock Options (Details) - Stock Options - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||
Outstanding at beginning of period (in shares) | 867 | 858 |
Granted (in shares) | 109 | 129 |
Exercised (in shares) | (8) | (34) |
Forfeited (in shares) | 0 | (2) |
Canceled (in shares) | 0 | (1) |
Outstanding at end of period (in shares) | 968 | 950 |
Exercisable at end of period (in shares) | 676 | 604 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | ||
Outstanding at beginning of period (in dollars per share) | $ 88.19 | $ 80.58 |
Granted (in dollars per share) | 138.07 | 119.11 |
Exercised (in dollars per share) | 63.52 | 70.53 |
Forfeited (in dollars per share) | 0 | 101.38 |
Canceled (in dollars per share) | 0 | 74.57 |
Outstanding at end of period (in dollars per share) | 94.01 | 86.11 |
Exercisable at end of period (in dollars per share) | $ 81.06 | $ 73.11 |
Aggregate intrinsic value, outstanding, beginning of period | $ 69,711 | $ 29,735 |
Aggregate intrinsic value, outstanding, end of period | 41,483 | 37,322 |
Aggregate intrinsic value, exercisable, end of period | $ 37,594 | $ 31,603 |
Weighted average remaining contractual term, outstanding | 6 years 7 months 6 days | 7 years |
Weighted average remaining contractual term, exercisable | 5 years 7 months 6 days | 5 years 9 months 18 days |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | ||
Dividend yield rate | 0.50% | 0.50% |
Expected volatility rate | 31.00% | 33.00% |
Risk-free interest rate | 2.00% | 0.50% |
Expected term | 4 years 10 months 24 days | 4 years 10 months 24 days |
Weighted-average fair value of options granted (in dollars per share) | $ 40.26 | $ 33.10 |
Total intrinsic value of stock options exercised | $ 654 | $ 1,917 |
STOCKHOLDERS' EQUITY - Restrict
STOCKHOLDERS' EQUITY - Restricted Stock and Performance Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | ||
Unrecognized compensation cost | $ 23,131 | $ 23,009 |
Period for unrecognized compensation cost to be recognized over | 1 year 10 months 24 days | |
Estimated share-based compensation expense | $ 12,350 | |
Restricted Stock | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||
Non-vested balance as of beginning of period (in shares) | 166 | 159 |
Granted (in shares) | 32 | 36 |
Vested (in shares) | (76) | (10) |
Forfeited (in shares) | 0 | (2) |
Non-vested balance as of end of period (in shares) | 122 | 183 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Additional Disclosures [Abstract] | ||
Non-vested balance as of beginning of period (in dollars per share) | $ 99.70 | $ 90.71 |
Granted (in dollars per share) | 138.07 | 119.11 |
Vested (in dollars per share) | 80.65 | 85.37 |
Forfeited (in dollars per share) | 0 | 86.69 |
Non-vested balance as of end of period (in dollars per share) | $ 121.56 | $ 96.70 |
Performance Shares | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||
Non-vested balance as of beginning of period (in shares) | 69 | 71 |
Granted (in shares) | 39 | 36 |
Vested (in shares) | (35) | (24) |
Forfeited (in shares) | (3) | (11) |
Non-vested balance as of end of period (in shares) | 70 | 72 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Additional Disclosures [Abstract] | ||
Non-vested balance as of beginning of period (in dollars per share) | $ 110.72 | $ 91.99 |
Granted (in dollars per share) | 114.22 | 108.74 |
Vested (in dollars per share) | 53.17 | 70.64 |
Forfeited (in dollars per share) | 84.09 | 74.57 |
Non-vested balance as of end of period (in dollars per share) | $ 127.69 | $ 110.22 |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | ||
Risk-free interest rate | 1.80% | 0.20% |
Dividend yield rate | 0.50% | 0.60% |
Expected volatility rate | 32.00% | 33.00% |
Initial TSR | (15.70%) | 11.70% |
Cliff vest | 100.00% |
STOCKHOLDERS' EQUITY - Repurcha
STOCKHOLDERS' EQUITY - Repurchase of Common Stock (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2020 | |
Stockholders' Equity Note [Abstract] | |||
Number of shares authorized to be repurchased (in shares) | 3,763,038 | ||
Aggregate number of shares repurchased since inception (in shares) | 3,063,929 | ||
Previously acquired treasury stock offset | $ 2,210 | $ 7,873 | |
Number of shares acquired under stock repurchase plan and subsequently reissued (in shares) | 245,685 | 13,475 | |
Treasury stock acquired, average cost (in dollars per share) | $ 140.83 | $ 118.41 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 24,128 | $ 28,639 |
Work in progress | 21,964 | 10,563 |
Finished goods | 62,319 | 51,856 |
Total inventories | $ 108,411 | $ 91,058 |
PROPERTY, PLANT AND EQUIPMENT_2
PROPERTY, PLANT AND EQUIPMENT (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Abstract] | ||
Gross property, plant and equipment | $ 416,240 | $ 408,219 |
Less: accumulated depreciation | 175,821 | 170,702 |
Property, plant and equipment, net | 240,419 | 237,517 |
Land | ||
Property, Plant and Equipment [Abstract] | ||
Gross property, plant and equipment | 11,570 | 11,692 |
Building | ||
Property, Plant and Equipment [Abstract] | ||
Gross property, plant and equipment | 90,015 | 89,602 |
Equipment | ||
Property, Plant and Equipment [Abstract] | ||
Gross property, plant and equipment | 258,758 | 253,995 |
Construction in progress | ||
Property, Plant and Equipment [Abstract] | ||
Gross property, plant and equipment | $ 55,897 | $ 52,930 |
INTANGIBLE ASSETS - Narrative (
INTANGIBLE ASSETS - Narrative (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Goodwill | $ 522,587,000 | $ 523,949,000 | |
Amortization of identifiable intangible assets | 5,911,000 | $ 6,484,000 | |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |||
Remainder of 2022 | 17,594,000 | ||
2023 | 19,393,000 | ||
2024 | 10,516,000 | ||
2025 | 6,260,000 | ||
2026 | 4,938,000 | ||
2027 | 4,375,000 | ||
Identifiable intangible assets with indefinite useful lives | $ 0 | $ 0 |
INTANGIBLE ASSETS - Schedule of
INTANGIBLE ASSETS - Schedule of Identifiable Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Dec. 31, 2021 | |
Identifiable intangible assets [Abstract] | ||
Gross Carrying Amount | $ 326,844 | $ 327,330 |
Accumulated Amortization | 238,319 | 232,665 |
Customer relationships & lists | ||
Identifiable intangible assets [Abstract] | ||
Gross Carrying Amount | 239,194 | 240,059 |
Accumulated Amortization | $ 177,108 | 173,489 |
Customer relationships & lists | Minimum | ||
Identifiable intangible assets [Abstract] | ||
Amortization Period (in years) | 10 years | |
Customer relationships & lists | Maximum | ||
Identifiable intangible assets [Abstract] | ||
Amortization Period (in years) | 20 years | |
Trademarks & trade names | ||
Identifiable intangible assets [Abstract] | ||
Gross Carrying Amount | $ 42,695 | 43,116 |
Accumulated Amortization | $ 29,978 | 28,985 |
Trademarks & trade names | Minimum | ||
Identifiable intangible assets [Abstract] | ||
Amortization Period (in years) | 2 years | |
Trademarks & trade names | Maximum | ||
Identifiable intangible assets [Abstract] | ||
Amortization Period (in years) | 17 years | |
Developed technology | ||
Identifiable intangible assets [Abstract] | ||
Gross Carrying Amount | $ 20,184 | 20,234 |
Accumulated Amortization | $ 14,809 | 14,607 |
Developed technology | Minimum | ||
Identifiable intangible assets [Abstract] | ||
Amortization Period (in years) | 5 years | |
Developed technology | Maximum | ||
Identifiable intangible assets [Abstract] | ||
Amortization Period (in years) | 12 years | |
Other | ||
Identifiable intangible assets [Abstract] | ||
Gross Carrying Amount | $ 24,771 | 23,921 |
Accumulated Amortization | $ 16,424 | $ 15,584 |
Other | Minimum | ||
Identifiable intangible assets [Abstract] | ||
Amortization Period (in years) | 2 years | |
Other | Maximum | ||
Identifiable intangible assets [Abstract] | ||
Amortization Period (in years) | 18 years |
EQUITY-METHOD INVESTMENT (Detai
EQUITY-METHOD INVESTMENT (Details) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2022USD ($)vote | Mar. 31, 2021USD ($) | Dec. 31, 2021USD ($) | |
Equity Method Investment, Summarized Financial Information [Abstract] | |||
Percentage of operating expenses to be absorbed | 66.66% | ||
Percentage of production offtake | 66.66% | ||
St. Gabriel CC Company, LLC | |||
Equity Method Investment, Summarized Financial Information [Abstract] | |||
Ownership percentage in joint venture | 66.66% | ||
Loss relating to joint venture's expenses | $ 140 | $ 144 | |
Capital contribution to investment | 58 | $ 13 | |
Carrying value of joint venture | $ 4,417 | $ 4,499 | |
St. Gabriel CC Company, LLC | Eastman Chemical Company | |||
Equity Method Investment, Summarized Financial Information [Abstract] | |||
Ownership percentage in joint venture | 33.34% | ||
Number of votes | vote | 2 |
REVOLVING LOAN (Details)
REVOLVING LOAN (Details) - USD ($) | Jun. 27, 2018 | Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 |
Line of Credit Facility [Abstract] | ||||
Outstanding balance | $ 128,569,000 | $ 108,569,000 | ||
Capitalized costs net of accumulated amortization | 350,000 | $ 421,000 | ||
Amortization expense pertaining to capitalized costs | $ 71,000 | $ 71,000 | ||
Credit Agreement | ||||
Line of Credit Facility [Abstract] | ||||
Maximum borrowing capacity | $ 500,000,000 | |||
Interest rate | 1.447% | |||
Commitment fee percentage | 0.15% | |||
Unused portion of revolving loan | $ 371,431,000 | |||
Credit Agreement | Minimum | ||||
Line of Credit Facility [Abstract] | ||||
Commitment fee percentage | 0.15% | |||
Credit Agreement | Maximum | ||||
Line of Credit Facility [Abstract] | ||||
Commitment fee percentage | 0.275% | |||
Term Loan | ||||
Line of Credit Facility [Abstract] | ||||
Maximum borrowing capacity | 350,000,000 | |||
Payments for outstanding balance | 210,750,000 | |||
Revolving Credit Facility | ||||
Line of Credit Facility [Abstract] | ||||
Maximum borrowing capacity | $ 100,000,000 | |||
Installment payments required | $ 0 |
NET EARNINGS PER SHARE (Details
NET EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Earnings Per Share, Basic and Diluted [Abstract] | ||
Net Earnings - Basic and Diluted | $ 28,930 | $ 23,411 |
Weighted average common shares - basic (in shares) | 32,041,000 | 32,255,000 |
Effect of dilutive securities - stock options, restricted stock, and performance shares (in shares) | 434,000 | 402,000 |
Weighted average common shares - diluted (in shares) | 32,475,000 | 32,657,000 |
Net earnings per share - basic (in dollars per share) | $ 0.90 | $ 0.73 |
Net earnings per share - diluted (in dollars per share) | $ 0.89 | $ 0.72 |
Anti-dilutive shares (in shares) | 113,029 | 311,030 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |||
Effective tax rate | 23.10% | 21.90% | |
Unrecognized tax benefits | $ 5,880 | $ 5,881 | |
Accrued interest and penalties related to unrecognized tax benefits | $ 2,148 | $ 2,106 |
SEGMENT INFORMATION - Narrative
SEGMENT INFORMATION - Narrative (Details) | 3 Months Ended |
Mar. 31, 2022segmentfilling_facility | |
Segment Reporting [Abstract] | |
Number of business segments | segment | 3 |
Number of filling facilities | filling_facility | 5 |
SEGMENT INFORMATION - Business
SEGMENT INFORMATION - Business Segment Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Segment information [Abstract] | ||
Assets | $ 1,194,908 | $ 1,199,325 |
Other and Unallocated | ||
Segment information [Abstract] | ||
Assets | 95,526 | 128,595 |
Human Nutrition & Health | Operating Segments | ||
Segment information [Abstract] | ||
Assets | 752,120 | 727,131 |
Animal Nutrition & Health | Operating Segments | ||
Segment information [Abstract] | ||
Assets | 165,627 | 158,971 |
Specialty Products | Operating Segments | ||
Segment information [Abstract] | ||
Assets | $ 181,635 | $ 184,628 |
SEGMENT INFORMATION - Busines_2
SEGMENT INFORMATION - Business Segment Net Sales (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Segment information [Abstract] | ||
Net sales | $ 228,867 | $ 185,656 |
Other and Unallocated | ||
Segment information [Abstract] | ||
Net sales | 3,746 | 1,984 |
Human Nutrition & Health | Operating Segments | ||
Segment information [Abstract] | ||
Net sales | 122,445 | 104,516 |
Animal Nutrition & Health | Operating Segments | ||
Segment information [Abstract] | ||
Net sales | 69,342 | 51,148 |
Specialty Products | Operating Segments | ||
Segment information [Abstract] | ||
Net sales | $ 33,334 | $ 28,008 |
SEGMENT INFORMATION - Busines_3
SEGMENT INFORMATION - Business Segment Earnings Before Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Segment information [Abstract] | ||
Earnings before income taxes | $ 37,630 | $ 29,983 |
Interest and other (expense) | (706) | (592) |
Other and Unallocated | ||
Segment information [Abstract] | ||
Earnings before income taxes | (1,049) | (1,360) |
Interest and other expense | ||
Segment information [Abstract] | ||
Interest and other (expense) | (706) | (592) |
Human Nutrition & Health | Operating Segments | ||
Segment information [Abstract] | ||
Earnings before income taxes | 20,303 | 19,690 |
Animal Nutrition & Health | Operating Segments | ||
Segment information [Abstract] | ||
Earnings before income taxes | 11,321 | 5,056 |
Specialty Products | Operating Segments | ||
Segment information [Abstract] | ||
Earnings before income taxes | $ 7,761 | $ 7,189 |
SEGMENT INFORMATION - Depreciat
SEGMENT INFORMATION - Depreciation and Amortization (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Segment information [Abstract] | ||
Depreciation and amortization | $ 11,928 | $ 12,364 |
Other and Unallocated | ||
Segment information [Abstract] | ||
Depreciation and amortization | 980 | 758 |
Human Nutrition & Health | Operating Segments | ||
Segment information [Abstract] | ||
Depreciation and amortization | 7,355 | 7,573 |
Animal Nutrition & Health | Operating Segments | ||
Segment information [Abstract] | ||
Depreciation and amortization | 1,661 | 1,764 |
Specialty Products | Operating Segments | ||
Segment information [Abstract] | ||
Depreciation and amortization | $ 1,932 | $ 2,269 |
SEGMENT INFORMATION - Capital E
SEGMENT INFORMATION - Capital Expenditures (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Segment information [Abstract] | ||
Capital expenditures | $ 9,709 | $ 5,951 |
Amortization of identifiable intangible assets | 5,911 | 6,484 |
Other and Unallocated | ||
Segment information [Abstract] | ||
Capital expenditures | 115 | 23 |
Transaction and integration related costs | 304 | 234 |
Amortization of identifiable intangible assets | 809 | 675 |
Human Nutrition & Health | Operating Segments | ||
Segment information [Abstract] | ||
Capital expenditures | 4,760 | 3,967 |
Animal Nutrition & Health | Operating Segments | ||
Segment information [Abstract] | ||
Capital expenditures | 3,688 | 1,631 |
Specialty Products | Operating Segments | ||
Segment information [Abstract] | ||
Capital expenditures | $ 1,146 | $ 330 |
REVENUE - Schedule of Disaggreg
REVENUE - Schedule of Disaggregation of Revenues (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022USD ($)revenue_substream | Mar. 31, 2021USD ($) | |
Revenue [Abstract] | ||
Net sales | $ 228,867 | $ 185,656 |
United States | ||
Revenue [Abstract] | ||
Net sales | 174,491 | 137,851 |
Foreign Countries | ||
Revenue [Abstract] | ||
Net sales | 54,376 | 47,805 |
Product Sales | ||
Revenue [Abstract] | ||
Net sales | 218,053 | 175,988 |
Co-manufacturing | ||
Revenue [Abstract] | ||
Net sales | 8,307 | 7,278 |
Consignment | ||
Revenue [Abstract] | ||
Net sales | 1,591 | 1,051 |
Product Sales Revenue | ||
Revenue [Abstract] | ||
Net sales | $ 227,951 | 184,317 |
Number of sub-streams of revenue | revenue_substream | 4 | |
Royalty Revenue | ||
Revenue [Abstract] | ||
Net sales | $ 916 | $ 1,339 |
SUPPLEMENTAL CASH FLOW INFORM_3
SUPPLEMENTAL CASH FLOW INFORMATION (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Supplemental Cash Flow Information [Abstract] | ||
Income taxes | $ 2 | $ 2 |
Interest | $ 1,010 | $ 1,363 |
ACCUMULATED OTHER COMPREHENSI_3
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) - Changes in Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Changes in accumulated other comprehensive income (loss) [Abstract] | ||
Net foreign currency translation adjustment | $ (2,842) | $ (6,143) |
Unrealized gain on cash flow hedge | 2,084 | 677 |
Tax | (511) | (165) |
Net of tax | 1,573 | 512 |
Net change in postretirement benefit plan (see Note 14 for further information) | ||
Amortization of prior service cost | 2 | 18 |
Amortization of gain | 0 | (5) |
Gain arising during the period and prior service credit | (32) | (4) |
Total before tax | (30) | 9 |
Tax | 3 | (2) |
Net of tax and adjustment | (27) | 7 |
Other comprehensive loss | (1,296) | (5,624) |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Tax (expense) benefit on net investment hedge | (333) | (1,026) |
Cross-currency swap | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Net investment hedge (cross-currency swap), net of tax | $ 1,123 | $ 3,197 |
ACCUMULATED OTHER COMPREHENSI_4
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) - Components of Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning balance | $ 877,015 | $ 828,233 |
Other comprehensive loss | (1,296) | (5,624) |
Ending balance | 873,682 | 849,492 |
Foreign currency translation adjustment | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning balance | (3,602) | |
Other comprehensive loss | (2,842) | |
Ending balance | (6,444) | |
Cash flow hedge | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning balance | (1,631) | |
Other comprehensive loss | 1,573 | |
Ending balance | (58) | |
Postretirement benefit plan | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning balance | 240 | |
Other comprehensive loss | (27) | |
Ending balance | 213 | |
Total | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning balance | (4,993) | 4,173 |
Other comprehensive loss | (1,296) | (5,624) |
Ending balance | $ (6,289) | $ (1,451) |
EMPLOYEE BENEFIT PLANS (Details
EMPLOYEE BENEFIT PLANS (Details) $ in Thousands | Jan. 01, 2021plan | Mar. 31, 2022USD ($)plan | Mar. 31, 2021USD ($) | Dec. 31, 2021USD ($) |
Defined Benefit Plan Disclosure [Line Items] | ||||
Number of savings plan | plan | 1 | 2 | ||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract] | ||||
Benefit obligation | $ 1,197 | $ 1,293 | ||
Deferred compensation liability | 8,206 | 6,270 | ||
Related rabbi trust assets | 8,208 | 6,267 | ||
Maximum | ||||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract] | ||||
Historical cash payments for retirement medical plan claims per year | $ 200 | |||
Postretirement Medical Plan | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Number of defined benefit plans | plan | 2 | |||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract] | ||||
Service cost | $ 20 | $ 22 | ||
Interest cost | 6 | 6 | ||
Amortization of prior service cost | 2 | 18 | ||
Amortization of gain | 0 | (6) | ||
Net periodic benefit cost | 28 | 40 | ||
Defined Benefit Pension Plan | Chemogas Defined Pension Plan | ||||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract] | ||||
Service cost | 11 | 17 | ||
Interest cost | 5 | 4 | ||
Expected return on plan assets | (10) | (9) | ||
Amortization of gain | 0 | 1 | ||
Net periodic benefit cost | 6 | $ 13 | ||
Benefit obligation | $ 676 | $ 684 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Details) $ in Thousands | Mar. 31, 2022USD ($) |
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | |
April 1, 2022 to December 31, 2022 | $ 2,097 |
2023 | 2,212 |
2024 | 1,964 |
2025 | 1,132 |
2026 | 743 |
2027 | 549 |
Thereafter | 1,930 |
Total minimum lease payments | $ 10,627 |
FAIR VALUE OF FINANCIAL INSTR_2
FAIR VALUE OF FINANCIAL INSTRUMENTS (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022USD ($)financial_instrument | Dec. 31, 2021USD ($) | |
Fair value of financial instruments [Abstract] | ||
Number of financial instruments held for trading purposes | financial_instrument | 0 | |
Related rabbi trust assets | $ 8,208 | $ 6,267 |
Derivative liabilities | 0 | (2,658) |
Derivative assets (liabilities) | 882 | (2,658) |
Cross-currency swap | ||
Fair value of financial instruments [Abstract] | ||
Derivative assets (liabilities) | 956 | (500) |
Interest rate swap | ||
Fair value of financial instruments [Abstract] | ||
Derivative assets (liabilities) | (74) | (2,158) |
Money Market Funds | Level 1 | ||
Fair value of financial instruments [Abstract] | ||
Cash and cash equivalents | $ 937 | $ 933 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - St. Gabriel CC Company, LLC - USD ($) | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Related party transactions [Abstract] | |||
Finished goods received from related party recorded in cost of goods sold | $ 6,489,000 | $ 4,391,000 | |
Receivable from related party | 13,651,000 | $ 10,504,000 | |
Payables to related parties | 8,673,000 | 7,552,000 | |
Related party receivable related to non-contractual monies | 0 | 164,000 | |
Related party payable related to non-contractual monies | 318,000 | $ 296,000 | |
Services Provided | |||
Related party transactions [Abstract] | |||
Revenue from related party | 975,000 | 827,000 | |
Raw Materials Sold | |||
Related party transactions [Abstract] | |||
Revenue from related party | $ 9,311,000 | $ 5,462,000 |
LEASES - Narrative (Details)
LEASES - Narrative (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022USD ($)vote | Mar. 31, 2021USD ($) | |
Lessee, Lease, Description [Line Items] | ||
Number of tranches | vote | 4 | |
Rent expense charged to operations under lease agreements | $ | $ 781 | $ 716 |
Lessee, Operating Lease, Tranche One | ||
Lessee, Lease, Description [Line Items] | ||
Discount rate | 1.45% | |
Lessee, Operating Lease, Tranche One | Minimum | ||
Lessee, Lease, Description [Line Items] | ||
Term of contract for operating leases | 1 year | |
Lessee, Operating Lease, Tranche One | Maximum | ||
Lessee, Lease, Description [Line Items] | ||
Term of contract for operating leases | 2 years | |
Lessee, Operating Lease, Tranche Two | ||
Lessee, Lease, Description [Line Items] | ||
Discount rate | 2.04% | |
Lessee, Operating Lease, Tranche Two | Minimum | ||
Lessee, Lease, Description [Line Items] | ||
Term of contract for operating leases | 3 years | |
Lessee, Operating Lease, Tranche Two | Maximum | ||
Lessee, Lease, Description [Line Items] | ||
Term of contract for operating leases | 4 years | |
Lessee, Operating Lease, Tranche Three | ||
Lessee, Lease, Description [Line Items] | ||
Discount rate | 2.38% | |
Lessee, Operating Lease, Tranche Three | Minimum | ||
Lessee, Lease, Description [Line Items] | ||
Term of contract for operating leases | 5 years | |
Lessee, Operating Lease, Tranche Three | Maximum | ||
Lessee, Lease, Description [Line Items] | ||
Term of contract for operating leases | 9 years | |
Lessee, Operating Lease, Tranche Four | ||
Lessee, Lease, Description [Line Items] | ||
Term of contract for operating leases | 10 years | |
Discount rate | 3.10% |
LEASES - Right-of-Use Assets an
LEASES - Right-of-Use Assets and Lease Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Assets and Liabilities, Lessee [Abstract] | ||
Operating Lease - ROU | $ 6,901 | $ 6,929 |
Finance Leases - ROU | 2,308 | 2,359 |
Total right-of-use assets | 9,209 | 9,288 |
Operating leases liabilities - current | 2,194 | 2,194 |
Finance lease liabilities - current | 169 | 167 |
Total lease liabilities, current | 2,363 | 2,361 |
Operating lease liabilities - non-current | 4,730 | 4,811 |
Finance lease liabilities - non-current | 2,260 | 2,303 |
Total lease liabilities, non-current | $ 6,990 | $ 7,114 |
LEASES - Schedule of Lease Cost
LEASES - Schedule of Lease Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Lease Cost | ||
Operating lease cost | $ 781 | $ 716 |
Amortization of ROU asset | 52 | 52 |
Interest on lease liabilities | 31 | 33 |
Total finance lease cost | 83 | 85 |
Total lease cost | 864 | 801 |
Cash paid for amounts included in the measurement of lease liabilities | ||
Operating cash flows from operating leases | 801 | 739 |
Operating cash flows from finance leases | 31 | 33 |
Financing cash flows from finance leases | 41 | 39 |
Cash flows from operating and finance leases | 873 | 811 |
ROU assets obtained in exchange for new operating lease liabilities, net of ROU assets disposals | $ 662 | $ 1,036 |
Weighted-average remaining lease term - operating leases | 4 years 10 days | 4 years 1 month 20 days |
Weighted-average remaining lease term - finance leases | 11 years 1 month 28 days | 12 years |
Weighted-average discount rate - operating leases | 3.30% | 4.20% |
Weighted-average discount rate - finance leases | 5.10% | 5.10% |
DERIVATIVE INSTRUMENTS AND HE_3
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | May 28, 2019 | |
Interest rate swap | Interest Expense | |||
Derivative [Line Items] | |||
Net interest income (expense) | $ (513) | $ (521) | |
Interest rate swap | Designated as Hedging Instrument | |||
Derivative [Line Items] | |||
Notional amount of derivatives | $ 108,569 | ||
Interest rate swap | Designated as Hedging Instrument | Pay-Fixed Interest Rate | |||
Derivative [Line Items] | |||
Fixed interest rate | 2.05% | ||
Cross-currency swap | Designated as Hedging Instrument | |||
Derivative [Line Items] | |||
Notional amount of derivatives | $ 108,569 | ||
Cross-currency swap | Designated as Hedging Instrument | Pay-Fixed Interest Rate | |||
Derivative [Line Items] | |||
Fixed interest rate | 0.00% | ||
Cross-currency swap | Designated as Hedging Instrument | Receive-Fixed Interest Rate | |||
Derivative [Line Items] | |||
Fixed interest rate | 2.05% | ||
Cross-currency swap | Designated as Hedging Instrument | Interest Expense | |||
Derivative [Line Items] | |||
Net interest income (expense) | $ 550 | $ 556 |
DERIVATIVE INSTRUMENTS AND HE_4
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - Schedule of Fair Value of Derivative Instruments (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Derivative Liability [Abstract] | ||
Derivative assets (liabilities) | $ 882 | $ (2,658) |
Interest rate swap | ||
Derivative Liability [Abstract] | ||
Derivative assets (liabilities) | (74) | (2,158) |
Cross-currency swap | ||
Derivative Liability [Abstract] | ||
Derivative assets (liabilities) | $ 956 | $ (500) |
DERIVATIVE INSTRUMENTS AND HE_5
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - Schedule of Gains (Losses) on Hedging Instruments (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gains and losses from hedging instruments recognized in AOCI | $ 2,696 | $ 3,709 |
Interest rate swap | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Cash flow hedge (interest rate swap), net of tax | 1,573 | 512 |
Cross-currency swap | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Net investment hedge (cross-currency swap), net of tax | $ 1,123 | $ 3,197 |