Balchem Q1 2025 Earnings Call Transcript

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Provided by Quartr
April 24, 2025
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Operator

Greetings, and welcome to Bell Chem's First Quarter twenty twenty five Earnings Conference Call. At this time, all participants are in a listen only mode. A question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Warren Benson, CFO.

Operator

Thank you. You may begin.

Martin Bengtsson
Martin Bengtsson
Chief Financial Officer at Balchem

Thank you, Matt. Good morning, everyone. Thank you for joining our conference call this morning to discuss the results of Balkan Corporation for the quarter ending 03/31/2025.

Martin Bengtsson
Martin Bengtsson
Chief Financial Officer at Balchem

My name is Martin Bankson, Chief Financial Officer, and hosting this call with me is Ted Harris, our Chairman, President and CEO. Following the advice of our counsel, auditors and the SEC, at this time, I would like to read our forward looking statements. Statements made in today's call that are not historical facts are considered forward looking statements. We can give no assurance that the expectations reflected in forward looking statements were proved correct, and various factors could cause actual results to differ materially from our expectations, including risks and factors identified in Balkan's most recent Form 10 ks, 10 Q and eight ks reports. The company assumes no obligation to update these forward looking statements.

Martin Bengtsson
Martin Bengtsson
Chief Financial Officer at Balchem

Today's call and commentary also include non GAAP financial measures. Please refer to the reconciliations in our earnings release for further details. I will now turn the call over to Ted Harris, our Chairman, President and CEO.

Ted Harris
Ted Harris
Chairman, Chief Executive Officer & President at Balchem

Thanks, Martin. Good morning, and

Ted Harris
Ted Harris
Chairman, Chief Executive Officer & President at Balchem

welcome to our conference call. We were very pleased with the financial results for the first quarter of twenty twenty five, which continued the positive momentum from the strong 2024 performance and kicked off the New Year on a very healthy footing. We delivered record first quarter consolidated sales, adjusted EBITDA and adjusted net earnings with year over year sales and earnings growth in all three of our reporting segments. We are pleased that each of our segments performed well with encouraging ongoing recovery in our Animal Nutrition and Health segment. Before we get into more detail on the quarter, I would like to reflect for a few minutes on the global trade environment that is evolving around us.

Ted Harris
Ted Harris
Chairman, Chief Executive Officer & President at Balchem

As I mentioned on the last call, we believe we are relatively well positioned to effectively manage through the changing global trade environment. We have several advantages of note, including an intra region manufacturing and sales model where approximately 85% of the company's sales are manufactured in the same region where they are sold. A global supply chain with little reliance on China, a robust U. S. Manufacturing footprint and at the same time, we have strong free cash flows and a solid balance sheet.

Ted Harris
Ted Harris
Chairman, Chief Executive Officer & President at Balchem

We are, however, monitoring the situation very closely given the broad reach and impact U. S. Trade policies have on various trade flows and macroeconomic conditions. While this situation is multifaceted, there are three primary areas of impact that we are watching closely. The first is the impact on our raw materials consumed in The U.

Ted Harris
Ted Harris
Chairman, Chief Executive Officer & President at Balchem

S. That we procure from outside The U. S. To dimensionalize this area of impact, we import approximately $100,000,000 of raw materials annually into The U. S.

Ted Harris
Ted Harris
Chairman, Chief Executive Officer & President at Balchem

With less than 15,000,000 coming from China and approximately 5,000,000 coming from each of Canada and Mexico, and the rest coming from a myriad of countries around the world with little concentration in any one country. Current tariff rates would suggest approximately $20,000,000 of impact to us after exemptions such as The U. S. Recognition of The United States Mexico Canada agreement or USMCA. We believe that we will offset approximately half of this impact by shifting to alternate raw material sources and or production facilities, and the other half will be offset through pricing actions.

Ted Harris
Ted Harris
Chairman, Chief Executive Officer & President at Balchem

We will rely on our strong market positions to raise prices where necessary to offset the unmitigated impact of tariffs, just as we effectively did during the post COVID inflationary period that is still in the not too distant rearview mirror. Additionally, over the last few months, we have built extra inventory of many of these imported products in anticipation of this situation and to provide ample time for us to respond appropriately. The second area of impact focuses on other countries' responses to The U. S. Tariffs and the impact those responses could have on our approximately $90,000,000 of exports annually from The U.

Ted Harris
Ted Harris
Chairman, Chief Executive Officer & President at Balchem

S. To countries around the world. Today, given current tariffs placed on U. S. Goods by those countries, including exemptions like USMCA, the impact is immaterial for Balchem.

Ted Harris
Ted Harris
Chairman, Chief Executive Officer & President at Balchem

Our robust multi country internal manufacturing supply chain benefits us in this situation as we are able to make a number of products both in Europe and The U. S, which we can leverage to the benefit of our customers. The third area of impact is the potential impact on overall demand in our various markets as a result of potential recessionary conditions that may result from prolonged or increased trade disputes. This is obviously a much more difficult picture to clarify given all of the uncertainties, but Balchem has historically managed relatively well through these kinds of environments, and our expectation is that we will do so once again. At the moment, demand remains relatively healthy across our end markets as attested by our strong Q1 results, but this situation could change if the current global trade environment worsens significantly.

Ted Harris
Ted Harris
Chairman, Chief Executive Officer & President at Balchem

We believe the strength and resilience of our business model will undoubtedly serve us well as we move maneuver through the changing global trade environment and uncertainties that are impacting markets today. In summary, based on where things are today, the direct impact on our raw material imports, while impactful, is manageable with our supply chain and pricing actions. Our exports continue at this point essentially unencumbered by the tariff related responses from other nations, and we remain nimble and flexible to adjust accordingly as market conditions evolve over the coming weeks and months. Now regarding the first quarter of twenty twenty five financial performance. This morning, we reported record first quarter consolidated revenue of $251,000,000 which was 4.5% higher than the prior year quarter.

Ted Harris
Ted Harris
Chairman, Chief Executive Officer & President at Balchem

GAAP earnings from operations for the first quarter were higher by 22.4% versus the prior year. And we delivered record quarterly adjusted EBITDA of $66,000,000 an increase of 8.9% with an adjusted EBITDA margin of 26.5, up 106 basis points from the prior year. Consolidated net income closed the quarter at $37,000,000 an increase of 27.8%. This quarterly net income translated to diluted net earnings per share of $1.13 on a GAAP basis, up $0.24 or 27% compared to the prior year. On an adjusted basis, our record first quarter adjusted net earnings were $40,000,000 an increase of 19.2% from the prior year, which translated to 1.22 per diluted share, up $0.19 or 18.4% compared to the prior year.

Ted Harris
Ted Harris
Chairman, Chief Executive Officer & President at Balchem

Overall, another very strong quarter for Balchem, which, as I said earlier, kicked off the New Year on a very healthy footing. I'm now going to turn the call back over to Martin to go through the first quarter consolidated financial results for the company and the results for each of our business segments in more detail.

Martin Bengtsson
Martin Bengtsson
Chief Financial Officer at Balchem

Thank you, Ted. As Ted mentioned, overall, the first quarter was a great quarter for Balchem with record sales, earnings from operations and adjusted EBITDA. Our first quarter net sales of $251,000,000 were 4.5% higher than prior year, driven by strong performance in all three segments, human nutrition and health, animal nutrition and health and specialty products. Our first quarter gross margin dollars were $88,000,000 up 8.2% compared to the prior year, and our gross margin percent was 35.2% of sales, up 120 basis points compared to the prior year. The increase in gross margin percent was primarily due to a favorable portfolio mix.

Martin Bengtsson
Martin Bengtsson
Chief Financial Officer at Balchem

Consolidated operating expenses for the first quarter were $37,000,000 as compared to $40,000,000 in the prior year. The decrease was primarily due to lower amortization expense and a decrease in compensation related costs, partially offset by higher professional services. GAAP earnings from operations for the first quarter were a record of $51,000,000 an increase of 22.4% compared to the prior year. On an adjusted basis, as detailed in our earnings release this morning, non GAAP earnings from operations of $56,000,000 were up 13.8 compared to the prior year. Adjusted EBITDA was a record of $66,000,000 an increase of 8.9% compared to the prior year with an adjusted EBITDA margin rate of 26.5%.

Martin Bengtsson
Martin Bengtsson
Chief Financial Officer at Balchem

Net interest expense for the first quarter was 3,000,000 a decrease of $2,000,000 compared to the prior year, driven primarily by lower outstanding borrowings. Sequentially, our net debt remained at $140,000,000 with an overall leverage ratio on a net debt basis of 0.5. The effective tax rates for the first quarters of twenty twenty five and 2024 were 22.721.3%, respectively. The increase in the effective tax rate from the prior year was primarily due to lower tax benefits from stock based compensation. Consolidated net income closed the quarter at $37,000,000 up 27.8% from the prior year.

Martin Bengtsson
Martin Bengtsson
Chief Financial Officer at Balchem

This quarterly net income translated into diluted net earnings per share of $1.13 an increase of $0.24 compared to the prior year. On an adjusted basis, our first quarter adjusted net earnings were a record of $40,000,000 an increase of 19.2% from the prior year, which translated to $1.22 per diluted share. Cash flow from operations were $36,000,000 with free cash flow of $31,000,000 and we closed out the quarter with $50,000,000 of cash on the balance sheet. As we look at the first quarter from a segment perspective, our Human Nutrition and Health segment generated record sales of $158,000,000 an increase of 3.7% from the very strong results in the prior year, primarily driven by higher sales within both the Food Ingredients and Solutions businesses and the Nutrients business. Our Human Nutrition and Health segment delivered record quarterly earnings from operations of $38,000,000 an increase of 14.2% compared to the prior year.

Martin Bengtsson
Martin Bengtsson
Chief Financial Officer at Balchem

This was primarily driven by the aforementioned higher sales and a favorable mix. First quarter adjusted earnings from operations for this segment were $41,000,000 an increase of 6.2%. We're very pleased with the overall performance of our Human Nutrition and Health segment, where we continue to experience solid end consumer demand. As anticipated, we are seeing healthy growth once again across our Food Ingredients and Solutions businesses as well as continued growth of our Nutrients business. While there's still demand volatility and uncertainty in the market, we remain confident that our strong market positions will enable us to continue to deliver growth in Human Nutrition and Health.

Martin Bengtsson
Martin Bengtsson
Chief Financial Officer at Balchem

Our Animal Nutrition and Health segment generated quarterly sales of $57,000,000 an increase of 6.2% compared to the prior year. The increase was driven by higher sales in the ruminant species market, partially offset by modestly lower sales in the monogastric species markets. Animal Nutrition and Health delivered earnings from operations of $5,000,000 an increase of 154.2% from the prior year. The increase was primarily due to the aforementioned higher sales and favorable mix. First quarter adjusted earnings from operations for this segment were $5,000,000 an increase of 126.5%.

Martin Bengtsson
Martin Bengtsson
Chief Financial Officer at Balchem

We were once again pleased to see our Animal Nutrition and Health segment deliver both top and bottom line growth in the first quarter and the continuation of the steady recovery in the business that has occurred since Q3 of last year. This improvement is primarily due to healthier daily market conditions and continuing strength of our flagship rumen protected choline brand, ReAssure, further supported by the commercial launch of our AminoShore XL product, which has been well received by our customers. We believe the Animal Nutrition and Health business has good momentum and is well positioned to deliver solid growth in 2025. Our Specialty Products segment delivered quarterly sales of 33,000,000 an increase of 5.3% compared to the prior year, driven by higher sales in both the Performance Gases and Plant Nutrition businesses. Specialty Products delivered quarterly earnings from operations of $10,000,000 an increase of 16.9% versus the prior year, primarily driven by lower operating expenses and the aforementioned higher sales.

Martin Bengtsson
Martin Bengtsson
Chief Financial Officer at Balchem

First quarter adjusted earnings from operations for this segment were $11,000,000 an increase of 12.7%. We're very pleased with the performance of Specialty Products in the first quarter, both from a sales growth and margin perspective, and we expect healthy demand, particularly in our Performance Gases business, to drive another year of growth for the Specialty Products segment. So overall, the first quarter was another solid quarter for Balchem. I'm now going to turn the call back over

Martin Bengtsson
Martin Bengtsson
Chief Financial Officer at Balchem

to Ted for some closing remarks.

Ted Harris
Ted Harris
Chairman, Chief Executive Officer & President at Balchem

Thanks, Martin. Once again, we are very pleased with the first quarter financial results reported earlier this morning. As a company, we continue to show an ability to deliver results in a variety of market conditions, given our strong market position and our value added portfolio of products. We remain confident in the long term growth outlook for the company.

Ted Harris
Ted Harris
Chairman, Chief Executive Officer & President at Balchem

The evolving global trade environment provides yet another chance for us to show the resilience and strength of our business model. As mentioned earlier, we believe we are well positioned, but we will remain nimble and flexible so that we can adjust accordingly as these uncertain market conditions evolve. I will now hand the call back over to Martin, who will open up the call for questions. Martin?

Martin Bengtsson
Martin Bengtsson
Chief Financial Officer at Balchem

Thank you, Ted. This now concludes the formal portion of the conference. At this point, we will open up the conference call for questions.

Operator

Thank you. We'll now be conducting a question and answer session.

Operator

A confirmation tone will indicate your line is in the question queue. You may press star two to remove yourself from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the cell keys. One moment, please, for a poll for questions. First question here is from Robert Levick from CJS Securities.

Operator

Please go ahead.

Will Gildea
Equity Research Associate at CJS Securities

Hi. This is Will on

Will Gildea
Equity Research Associate at CJS Securities

for Bob. Congrats on the strong quarter.

Martin Bengtsson
Martin Bengtsson
Chief Financial Officer at Balchem

Great. Thanks. You're well.

Will Gildea
Equity Research Associate at CJS Securities

I know it's hard to clarify the second derivative impact of tariffs and the trade war. But could you add some color to what impacts you are anticipating? And where are you the most exposed?

Ted Harris
Ted Harris
Chairman, Chief Executive Officer & President at Balchem

Yes. I'd say, obviously, a very relevant question and why we spent a fair amount of time in the prepared remarks talking about tariffs. I mean, overall, as we said, we really feel like we're very well positioned. And as is typical, we feel very good about the things that we can control. And obviously, we do import raw materials from outside the country in order to manufacture products within The U.

Ted Harris
Ted Harris
Chairman, Chief Executive Officer & President at Balchem

S. And those raw materials are subject to tariffs. But we feel very confident that we have supply chain flexibility and levers to pull where we can, as we said, offset at least half of those cost impacts really based on everything that we see today plus could imagine could happen going forward. And then we obviously have strong market positions and an ability to raise prices if necessary. And we believe that we certainly can do that as well.

Ted Harris
Ted Harris
Chairman, Chief Executive Officer & President at Balchem

And we specifically mentioned the post COVID inflationary period where we were very, very pleased with how we were able to raise prices dollar for dollar as costs went up. And so we view our ability to do that as very high. So again, I put this all in the area of being able to control the outcome of impacts on our raw materials and feel very confident around that. I think where we feel less confident is around the potential of the evolving trade environment impacting global growth, global demand and specific impacts on various markets. And we're certainly not seeing that today.

Ted Harris
Ted Harris
Chairman, Chief Executive Officer & President at Balchem

Our order book looks very healthy and demand appears to be continuing as it did in Q1 and before that. So we're seeing no signs of that, but that is somewhat out of our control. And so that's probably the area where we have the most concerns. But we also look at these kinds of environments as something we've been through before. This is the twenty third consecutive quarter where we've announced earnings with year over year growth in adjusted EBITDA.

Ted Harris
Ted Harris
Chairman, Chief Executive Officer & President at Balchem

And if we think about what the world's been through in the last twenty three quarters with COVID, post COVID, inflation and so forth. And we tend to operate quite well in those kinds of environments. And even if you step back and look back at 02/2008 and those sorts of recessionary times, we've always performed quite well given our product portfolio and the markets that we serve. So again, the things that we can control, we feel quite confident around and those that we don't, we have to watch carefully. But of course, we've performed quite well in those environments as well on a relative basis.

Ted Harris
Ted Harris
Chairman, Chief Executive Officer & President at Balchem

Hopefully, that gives you a little bit more color.

Will Gildea
Equity Research Associate at CJS Securities

That does. Thank you. And then just one more. Do you have an update on the potential European Chinese dumping ruling? And how does world economic chaos impact that?

Ted Harris
Ted Harris
Chairman, Chief Executive Officer & President at Balchem

So we do not have an update. We have we have filed an antidumping, antifubsidy case that has been accepted by the EU, and they are reviewing it. And we are expecting some sort of response from the EU in the next, let's say, three to six months. We feel as though our case is quite solid, but we really don't have any feedback from the EU at this time. And what we're hearing from the market, this might be more speculation than fact, is that the current global trade environment really shouldn't have an impact on the EU's assessment of these kinds of very specific product by product allegations.

Ted Harris
Ted Harris
Chairman, Chief Executive Officer & President at Balchem

So while I think that's a very good question and a relevant question that we have had ourselves, we've been somewhat assured by others going through similar cases that this should stand on its own and not necessarily be impacted by the current trade environment. But let's see how it goes. Hopefully, on the next call, we might have an update. If it's not on the next call, it should be certainly by the third quarter call.

Operator

Our next question is from Ron Salvageiro from B. C. Wainwright.

Raghuram Selvaraju
Managing Director, Healthcare Equity Research at H.C. Wainwright & Co., LLC

Thanks very much for taking my questions, and congratulations on the excellent operational performance. I was wondering if you could comment on the following two aspects relating to the state of the business and what you anticipate to be the most significant tailwinds for 2025.

Raghuram Selvaraju
Managing Director, Healthcare Equity Research at H.C. Wainwright & Co., LLC

Firstly, with respect to sub segments of H and H, in part flow and k two delta fermented, you know, are you seeing, you know, emergent trends with regard to uptake, you know, inclusion, for example, for Vidacoline ProFlow in multivitamin preparations that lead you to believe that those two products might drive outperformance over the course of the remainder of 2025? And if so also, it was more a question for Martin. You know, given the recent currency fluctuations, the extent to which you anticipate foreign currency appreciation against the U. S. Dollar is likely to be a tailwind from an earnings reporting perspective for you.

Ted Harris
Ted Harris
Chairman, Chief Executive Officer & President at Balchem

Okay, Rob. That's great. You were cutting in and out just a little bit, but I think we got the essence to your two questions, one around the tailwinds and some of those new product launches as well as currency, and I'll leave currency to margin. But certainly, choline as a category for us and vitamin k two as a category for us for for and we see for Nielsen data that that demand is, in fact, growing for by the or by the the choline and choline, generally speaking. We'd like to take a bit of credit for that with our marketing efforts and awareness efforts to the market as a whole.

Ted Harris
Ted Harris
Chairman, Chief Executive Officer & President at Balchem

And certainly, our growth of that product line broadly, not only by the choline profile, as you mentioned, is growing at double digit grew at double digits in Q1, and we're very optimistic around continued escalation of growth. Vita choline is something that really just starting to introduce to the marketplace. And so we don't have a whole lot of sales to date for that product, but the broad category and the kind of the breadth of the awareness that we're driving is, in fact, showing up in Nielsen data in our own results. So certainly a tailwind. And then K2 is similar.

Ted Harris
Ted Harris
Chairman, Chief Executive Officer & President at Balchem

Nielsen data would suggest that the specialty vitamin K2 is growing at very strong double digits. Our sales in 2024 were up 30 plus percent in vitamin K2, and it continues to be a fast grower in our portfolio. Again, K2 Delta fermented is a new add to our portfolio, but one we're excited about. And generally speaking, our nutrient portfolio, I mean, we had a blowout quarter, first quarter of twenty twenty four, and we were very pleased that we were able to deliver some growth over that blowout performance last quarter, and we expect really healthy growth in that portfolio as well. But the other tailwind is our food business.

Ted Harris
Ted Harris
Chairman, Chief Executive Officer & President at Balchem

And I think that we're winning in certain areas, our formulation expertise, our product line is really fitting specific needs, whether it's beverages, nutritional beverages, cereal, the meat business and so forth are all performing well. We have a product line that we don't talk a lot about that is an encapsulated product line that we sell into the meat sticks. If you look at the open data, meat sticks are one of the extremely fast growing sub segments within the food industry and, you know, we're right there in the middle of it and and growing a very you know, we feel like there's some tailwinds in our food business as well and I feel really good about the overall performance of h and h and the launch of those new products that eventually will help fuel that every time. I'll hand it over

Ted Harris
Ted Harris
Chairman, Chief Executive Officer & President at Balchem

to Martin to the back of time.

Martin Bengtsson
Martin Bengtsson
Chief Financial Officer at Balchem

I think from an FX perspective and the and the weakening dollar, maybe the way to think about it from from two perspective. One one is the translational impact and one the more transactional impact. From a translational perspective, process, primarily the the euro and the profits that we generate, and that has the biggest impact to us. I think we entered the quarter at kind of a one zero five type of rate, and we went up to one fifteen.

Martin Bengtsson
Martin Bengtsson
Chief Financial Officer at Balchem

And I think today, we're sort of at a one fourteen. But if you just could make the the math, they usually say that what's the translational impact of operating in a one fifteen environment versus the one zero five environment. It's about a 10 to $15,000,000 impact on an annualized basis on revenue. So on a full year basis, sort of going from one hundred five to one hundred fifteen. So that should provide some tailwind if that's where the rates were to remain.

Martin Bengtsson
Martin Bengtsson
Chief Financial Officer at Balchem

From a transactional perspective, when we look at the flows in and out and and on a day to day basis, we think that impact will be more muted, and and I would almost call it immaterial, sort of net off. We have some headwinds, some tailwinds from a transactional standpoint, and it's not really gonna move the needle at the end of the day.

Ted Harris
Ted Harris
Chairman, Chief Executive Officer & President at Balchem

Thanks, Ram.

Raghuram Selvaraju
Managing Director, Healthcare Equity Research at H.C. Wainwright & Co., LLC

And just very,

Raghuram Selvaraju
Managing Director, Healthcare Equity Research at H.C. Wainwright & Co., LLC

very quickly, two other things. Firstly, you you obviously paid down a significant amount of debt over the course of 2024. And I was just wondering, you know, if you can give us any kind of directionality or context around how you anticipate approaching debt pay down, debt repayment over the course of 2025. And then also, Martin, I think it would be helpful if you could just give me a sense of what you expect for the remainder of the year in terms of the effective tax rate and to what extent, if any, we should be looking at the first quarter effective tax rate as predictive? Thank you.

Martin Bengtsson
Martin Bengtsson
Chief Financial Officer at Balchem

Yeah. Absolutely. So I think from a capital allocation where we're paying down our debt has been part of that. Right? We're obviously prioritizing investing in our business and our organic growth first.

Martin Bengtsson
Martin Bengtsson
Chief Financial Officer at Balchem

And and then, you know, we try to augment that with m and a, which has been, as you know, slower for the last two years from a market conditions perspective. And then we, you know, serve our our debt, and then we're sort of after that, we think about share repurchases for antidilutive purposes from the equity awards. And we've continued to pay down our debt, and now the leverage is becoming relatively low. So we see it as we continue to really focus on evaluating a variety of M and A opportunities. And I would say we're making fairly good progress there over the last sort of three to six months as things were warming up a bit.

Martin Bengtsson
Martin Bengtsson
Chief Financial Officer at Balchem

I would say that now with the new trade environment, that things have certainly cooled off a little bit again, just things have gone on a

Martin Bengtsson
Martin Bengtsson
Chief Financial Officer at Balchem

little bit of pause due to

Martin Bengtsson
Martin Bengtsson
Chief Financial Officer at Balchem

the uncertainty. So we'll see how long that remains. So I think as a result of that, we will look a little bit closer at the next steps in our capital deployment and whether it is time to start offsetting some of the dilutive and and doing some share buybacks for anti dilutive purposes here going forward over the next quarter or two. Yeah. I'm sorry.

Martin Bengtsson
Martin Bengtsson
Chief Financial Officer at Balchem

Yeah. And on the taxes, what you saw there I mean, from a full year basis, we're thinking we'll be in that '22 to '23 range. We'll probably be more in the '22 to twenty two and a half based on what we learned in the in the first quarter. So that's where I would put it from a modeling perspective.

Raghuram Selvaraju
Managing Director, Healthcare Equity Research at H.C. Wainwright & Co., LLC

Thank you very much.

Ted Harris
Ted Harris
Chairman, Chief Executive Officer & President at Balchem

Thank you, Ram.

Operator

Our next question is from Daniel Harriman from Sidoti and Company. Please go ahead.

Daniel Harriman
Analyst at Sidoti & Company

Hey, Ted, Martin. Good morning. Congrats on the results, and thank you for taking my question. I I want to follow-up a little bit on an earlier question and just talk about the A and H segment. 4% year over year growth is pretty astounding considering where you were in the first quarter of twenty twenty four.

Daniel Harriman
Analyst at Sidoti & Company

So I'm

Daniel Harriman
Analyst at Sidoti & Company

hoping that maybe you could just give us a little bit

Daniel Harriman
Analyst at Sidoti & Company

of a contribution breakdown between nutrition and and food ingredients. And then, Ted, I know you talked about this a little bit, but just how we should think about that breakdown moving forward throughout the rest of the year?

Ted Harris
Ted Harris
Chairman, Chief Executive Officer & President at Balchem

Sure. Daniel, thanks for your comments, and appreciate your question. As we said earlier and now a couple of times, we really were very pleased with H and H's overall performance and the year over year growth given how strong the prior year was. The food business or the food ingredient business, as you know, which is kind of slightly larger part of the portfolio actually grew a little bit faster, grew closer to 5%, five point five % in the quarter. And so we were very pleased with that.

Ted Harris
Ted Harris
Chairman, Chief Executive Officer & President at Balchem

We think that generally speaking, it's a market that's growing quite a bit less than that. And so it's clear indication that the parts of the market that we're focused on are growing faster. I mentioned meat sticks as a small example. But overall, if we look across our broad food ingredients and solutions businesses, all of them are performing well and at a healthy level. And so at this point in time, we're seeing that continue, really pleased.

Ted Harris
Ted Harris
Chairman, Chief Executive Officer & President at Balchem

The nutrients business did continue to grow, as we said, albeit at a lower rate because Q1 of last year, that nutrients business was a blowout quarter. I think I might have used that earlier. I think the whole H and H grew at 15% revenue and 37% adjusted EBITDA. So to drive growth on top of that was really great. And most of that growth came from the Nutrients business.

Ted Harris
Ted Harris
Chairman, Chief Executive Officer & President at Balchem

So we remain bullish on our Nutrients business, particularly those product lines that I highlighted earlier, but feel very good now that both parts of H and H are contributing to the growth and we see that continuing.

Daniel Harriman
Analyst at Sidoti & Company

Great. I really appreciate it. And it's exciting to see you all continue to execute regardless of the environment. So best of luck for the balance of the year.

Ted Harris
Ted Harris
Chairman, Chief Executive Officer & President at Balchem

Thanks, Daniel. Appreciate it.

Operator

This concludes the question and answer session. I'd like to turn the floor back to Ted Harris, CEO, for any closing comments.

Ted Harris
Ted Harris
Chairman, Chief Executive Officer & President at Balchem

All

Ted Harris
Ted Harris
Chairman, Chief Executive Officer & President at Balchem

right. Thanks, Matt. Once again, thank you all very much for joining the call today. We really appreciate your support and your time today. We look forward to reporting out our Q2 twenty twenty five results in the July.

Ted Harris
Ted Harris
Chairman, Chief Executive Officer & President at Balchem

In the meantime, we will be attending a few conferences that I wanted to tell you about. The first is the Deutsche Bank Access Global Consumer Conference in Paris on June 4. And then next will be the Wells Fargo Industrials and Materials Conference in Chicago on June 11. And we'll also be attending the CJS Securities twenty fourth Annual New Idea Summer Conference in White Plains, New York on July 10, which will happen shortly before the earnings call. So we hope to see some of you at least one of these conferences.

Ted Harris
Ted Harris
Chairman, Chief Executive Officer & President at Balchem

And thank you again for your time today and joining the call.

Operator

This concludes today's teleconference. You may disconnect your lines at this time. Thank you again for your participation.

Executives
    • Martin Bengtsson
      Martin Bengtsson
      Chief Financial Officer
    • Ted Harris
      Ted Harris
      Chairman, Chief Executive Officer & President
Analysts
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