Balchem Corporation Reports Second Quarter 2025 Financial Results
Balchem Corporation (NASDAQ: BCPC) reported strong Q2 2025 financial results with record net sales of $255.5 million, up 9.1% year-over-year. The company achieved net earnings of $38.3 million, a 19.4% increase, and record adjusted EBITDA of $69.2 million, up 11.2%.
All three business segments showed growth, with Human Nutrition and Health achieving record sales of $160.8 million (up 8.7%), Animal Nutrition and Health reaching $56.0 million (up 13.1%), and Specialty Products posting record sales of $37.2 million (up 6.0%).
Key developments include plans for a new $36 million micro-encapsulation facility in Orange County, NY, and the European Commission's implementation of 95.4% to 120.8% anti-dumping duties on Chinese choline chloride imports.
Balchem Corporation (NASDAQ: BCPC) ha riportato risultati finanziari solidi nel secondo trimestre del 2025 con vendite nette record di 255,5 milioni di dollari, in aumento del 9,1% rispetto all'anno precedente. L'azienda ha raggiunto utili netti di 38,3 milioni di dollari, con un incremento del 19,4%, e un EBITDA rettificato record di 69,2 milioni di dollari, in crescita dell'11,2%.
Tutti e tre i segmenti di business hanno mostrato crescita, con Human Nutrition and Health che ha raggiunto vendite record di 160,8 milioni di dollari (in aumento dell'8,7%), Animal Nutrition and Health con 56,0 milioni di dollari (in crescita del 13,1%) e Specialty Products con vendite record di 37,2 milioni di dollari (in aumento del 6,0%).
Tra gli sviluppi principali, sono previsti piani per una nuova struttura di microincapsulazione da 36 milioni di dollari nella Contea di Orange, NY, oltre all'attuazione da parte della Commissione Europea di dazi antidumping dal 95,4% al 120,8% sulle importazioni cinesi di cloruro di colina.
Balchem Corporation (NASDAQ: BCPC) informó sólidos resultados financieros en el segundo trimestre de 2025 con ventas netas récord de 255,5 millones de dólares, un aumento del 9,1% interanual. La compañía logró ganancias netas de 38,3 millones de dólares, un incremento del 19,4%, y un EBITDA ajustado récord de 69,2 millones de dólares, un aumento del 11,2%.
Los tres segmentos de negocio mostraron crecimiento, con Human Nutrition and Health alcanzando ventas récord de 160,8 millones de dólares (un 8,7% más), Animal Nutrition and Health con 56,0 millones de dólares (un 13,1% más) y Specialty Products con ventas récord de 37,2 millones de dólares (un 6,0% más).
Entre los desarrollos clave se incluyen planes para una nueva planta de microencapsulación de 36 millones de dólares en el condado de Orange, NY, y la implementación por parte de la Comisión Europea de aranceles antidumping del 95,4% al 120,8% sobre las importaciones chinas de cloruro de colina.
Balchem Corporation (NASDAQ: BCPC)은 2025년 2분기 강력한 재무 실적을 보고했으며, 순매출액이 2억 5,550만 달러로 사상 최고치를 기록하며 전년 대비 9.1% 증가했습니다. 회사는 순이익 3,830만 달러를 달성하여 19.4% 증가했고, 조정 EBITDA도 6,920만 달러로 11.2% 상승해 사상 최고치를 기록했습니다.
세 개의 사업 부문 모두 성장세를 보였으며, Human Nutrition and Health는 1억 6,080만 달러의 기록적인 매출(8.7% 증가)을, Animal Nutrition and Health는 5,600만 달러(13.1% 증가)를, Specialty Products는 3,720만 달러의 기록적인 매출(6.0% 증가)을 달성했습니다.
주요 개발 사항으로는 뉴욕주 오렌지 카운티에 3,600만 달러 규모의 마이크로캡슐화 시설 건립 계획과 유럽연합 집행위원회의 중국산 콜린 클로라이드 수입품에 대한 95.4%에서 120.8% 사이의 반덤핑 관세 부과가 포함됩니다.
Balchem Corporation (NASDAQ: BCPC) a annoncé de solides résultats financiers pour le deuxième trimestre 2025 avec un chiffre d'affaires net record de 255,5 millions de dollars, en hausse de 9,1 % par rapport à l'année précédente. La société a réalisé un bénéfice net de 38,3 millions de dollars, soit une augmentation de 19,4 %, et un EBITDA ajusté record de 69,2 millions de dollars, en hausse de 11,2 %.
Les trois segments d'activité ont connu une croissance, avec Human Nutrition and Health atteignant des ventes record de 160,8 millions de dollars (en hausse de 8,7 %), Animal Nutrition and Health réalisant 56,0 millions de dollars (en hausse de 13,1 %) et Specialty Products enregistrant des ventes record de 37,2 millions de dollars (en hausse de 6,0 %).
Parmi les développements clés figurent les projets d'une nouvelle installation de microencapsulation de 36 millions de dollars dans le comté d'Orange, NY, ainsi que la mise en œuvre par la Commission européenne de droits antidumping de 95,4 % à 120,8 % sur les importations chinoises de chlorure de choline.
Balchem Corporation (NASDAQ: BCPC) meldete starke Finanzergebnisse für das zweite Quartal 2025 mit rekordverdächtigen Nettoumsätzen von 255,5 Millionen US-Dollar, ein Anstieg von 9,1 % gegenüber dem Vorjahr. Das Unternehmen erzielte Nettoeinnahmen von 38,3 Millionen US-Dollar, ein Anstieg um 19,4 %, sowie ein Rekord-Adjusted-EBITDA von 69,2 Millionen US-Dollar, ein Plus von 11,2 %.
Alle drei Geschäftssegmente verzeichneten Wachstum, wobei Human Nutrition and Health Rekordverkäufe von 160,8 Millionen US-Dollar (plus 8,7 %), Animal Nutrition and Health 56,0 Millionen US-Dollar (plus 13,1 %) und Specialty Products Rekordverkäufe von 37,2 Millionen US-Dollar (plus 6,0 %) erreichten.
Zu den wichtigsten Entwicklungen zählen Pläne für eine neue 36-Millionen-Dollar-Mikrokapselungsanlage im Orange County, NY, sowie die Einführung von Antidumpingzöllen zwischen 95,4 % und 120,8 % auf chinesische Cholinchlorid-Importe durch die Europäische Kommission.
- Record Q2 net sales of $255.5M, up 9.1% year-over-year
- Net earnings increased 19.4% to $38.3M
- Record adjusted EBITDA of $69.2M, up 11.2%
- Gross margin improved by 90 basis points to 36.4%
- Strong growth across all three business segments
- Lower interest expense due to reduced outstanding borrowings
- Solid free cash flow of $40.7M
- Operating expenses increased by $4.5M due to higher compensation costs
- Higher manufacturing input costs affected margins
- Significant cash outflow of $33.3M for stock repurchases
Insights
Balchem delivers exceptional Q2 results with record sales and earnings across segments, plus strategic expansion plans and favorable regulatory developments.
Balchem Corporation has delivered a stellar Q2 2025 performance with
The gross margin improvement of 90 basis points (from
All three business segments showed impressive growth:
- Human Nutrition and Health: Record sales of
$160.8 million (8.7% increase) with segment earnings up14.9% - Animal Nutrition and Health:
$56.0 million in sales (13.1% increase) with segment earnings up30.5% - Specialty Products: Record sales of
$37.2 million (6.0% increase)
The balance sheet remains robust with
Two strategic developments stand out: First, Balchem's planned
The reduction in interest expense (from
MONTVALE, N.J., July 31, 2025 (GLOBE NEWSWIRE) -- Balchem Corporation (NASDAQ: BCPC) reported today financial results for its 2025 fiscal second quarter ended June 30, 2025. For the quarter, the Company reported net sales of
Ted Harris, Chairman, President and CEO of Balchem said, “The second quarter was another excellent quarter for Balchem. We delivered record financial results, driven by strong growth in all three of our reporting segments, while continuing to make good progress on our strategic growth initiatives.”
Second Quarter 2025 Financial Highlights:
- Record net sales of
$255.5 million , an increase of$21.4 million , or9.1% , compared to the prior year quarter. - GAAP net earnings were
$38.3 million , an increase of19.4% , from the prior year quarter. - Record adjusted EBITDA was
$69.2 million , an increase of11.2% , from the prior year quarter. - GAAP earnings per share of
$1.17 compared to$0.98 in the prior year quarter and record adjusted earnings per share(a) of$1.27 compared to$1.09 in the prior year quarter. - Cash flows from operations were
$47.3 million , with free cash flow(a) of$40.7 million . - Sales and earnings from operations growth in all three of our reporting segments with record sales and earnings from operations in Human Nutrition and Health and Specialty Products.
Recent Highlights:
- Balchem announced its intent to build a new
$36 million state-of-the-art food ingredient and nutraceutical micro-encapsulation manufacturing facility in Orange County, NY. If approved by the county, the facility will more than double Balchem's capacity for its fast-growing micro-encapsulation technologies. - In late June 2025, the European Commission announced that it would impose provisional anti-dumping duties of
95.4% to120.8% on imports into the European Union of choline chloride originating in the People's Republic of China, effective July 1, 2025.
Mr. Harris said, “I was extremely pleased with the second quarter financial results. The Balchem team delivered record second quarter net sales, adjusted EBITDA, adjusted net earnings, and adjusted EPS while also delivering solid free cash flows.”
Mr. Harris added, “Additionally, it was encouraging to see the European Commission’s provisional decision to impose significant anti-dumping duties on European choline chloride imports from China which should help to offset China’s anti-competitive pricing practices and create a level playing field within which to operate going forward.”
| Results for Period Ended June 30, 2025 (unaudited) (Dollars in thousands, except per share data) | ||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||
| Net sales | $ | 255,467 | $ | 234,081 | $ | 505,986 | $ | 473,740 | ||||
| Gross margin | 93,113 | 82,994 | 181,281 | 164,508 | ||||||||
| Operating expenses | 41,671 | 37,197 | 78,824 | 77,035 | ||||||||
| Earnings from operations | 51,442 | 45,797 | 102,457 | 87,473 | ||||||||
| Interest and other expenses | 2,431 | 4,571 | 5,506 | 9,397 | ||||||||
| Earnings before income tax expense | 49,011 | 41,226 | 96,951 | 78,076 | ||||||||
| Income tax expense | 10,733 | 9,157 | 21,620 | 17,021 | ||||||||
| Net earnings | $ | 38,278 | $ | 32,069 | $ | 75,331 | $ | 61,055 | ||||
| Diluted net earnings per common share | $ | 1.17 | $ | 0.98 | $ | 2.30 | $ | 1.87 | ||||
| Adjusted EBITDA(a) | $ | 69,224 | $ | 62,270 | $ | 135,514 | $ | 123,136 | ||||
| Adjusted net earnings(a) | $ | 41,561 | $ | 35,577 | $ | 81,578 | $ | 69,161 | ||||
| Adjusted net earnings per common share(a) | $ | 1.27 | $ | 1.09 | $ | 2.49 | $ | 2.12 | ||||
| Shares used in the calculations of diluted and adjusted net earnings per common share | 32,682 | 32,649 | 32,744 | 32,638 | ||||||||
| (a) | See “Non-GAAP Financial Information” for a reconciliation of GAAP and non-GAAP financial measures. |
Financial Results for the Second Quarter of 2025:
The Human Nutrition and Health segment generated record sales of
The Animal Nutrition and Health segment generated quarterly sales of
The Specialty Products segment generated record sales of
Consolidated quarterly gross margin of
Net interest expense was
Second quarter cash flows provided by operating activities were
Ted Harris said, “I would like to take this opportunity to thank the entire Balchem team for their contributions to the excellent performance of the company. We continue to show our resilience and ability to deliver strong results in various market environments and we remain confident in the long-term growth outlook for our company.”
Quarterly Conference Call
A quarterly conference call will be held on Thursday, July 31, 2025, at 11:00 AM Eastern Time (ET) to review second quarter 2025 results. Ted Harris, Chairman, President and CEO and Martin Bengtsson, CFO will host the call. Institutional investors, analysts and other members of the financial community are invited to join the live call by dialing 800-715-9871 (toll free USA/Canada), +1-646-307-1963 (USA/International) or 647-932-3411 (Canada/Toronto), five minutes prior to the scheduled start time of the conference call. Investors and the public are invited to listen to the live webcast at https://events.q4inc.com/attendee/126702503. The conference call will be available for replay shortly after the conclusion of the call at https://events.q4inc.com/attendee/126702503 for one year.
Segment Information
Balchem Corporation reports three business segments: Human Nutrition and Health, Animal Nutrition and Health, and Specialty Products. The Human Nutrition and Health segment delivers customized food and beverage ingredient systems, as well as key nutrients into a variety of applications across the food, supplement and pharmaceutical industries. The Animal Nutrition and Health segment manufactures and supplies products to numerous animal health markets. Through Specialty Products, Balchem provides specialty-packaged performance gases for use in healthcare and other industries, and also provides chelated minerals to the micronutrient agricultural market. Sales and production of products outside of our reportable segments and other minor business activities are included in "Other and Unallocated".
Forward-Looking Statements
This release contains forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended, which reflect our expectation or belief concerning future events that involve risks and uncertainties. These forward-looking statements generally are identified by the words "believe," "project," "expect," "anticipate," "estimate," "forecast," "outlook," "intend," "strategy," "future," "opportunity," "plan," "may," "should," "will," "would," "will be," "will continue," "will likely result," or the negative thereof or variations thereon or similar expressions generally intended to identify forward-looking statements. Forward-looking statements may relate to such matters as projections of revenue, margins, expenses, tax provisions, earnings, cash flows, benefit obligations, dividends, share repurchases or other financial items; any statements of the plans, strategies and objectives of management for future operations, including those relating to any statements concerning expected development, performance or market share relating to our products and services; any statements regarding future economic conditions or our performance; any statements regarding pending investigations, claims or disputes; any statements of expectation or belief; and any statements of assumptions underlying any of the foregoing. These statements are based on the Company's currently available information and our current assumptions, expectations and projections about future events. They are subject to future events, risks and uncertainties - many of which are beyond the Company’s control - as well as potentially inaccurate assumptions, that could cause actual results to differ materially from those in the forward-looking statements. Important factors and other risks that may affect the Company's business or that could cause actual results to differ materially are included in filings the Company makes with the U.S. Securities and Exchange Commission from time to time, including its Annual Report on Form 10-K, its Quarterly Reports on Form 10-Q, its Current Reports on Form 8-K, and in its other SEC filings. Reference should be made to such factors and all forward-looking statements are qualified in their entirety by the above cautionary statements. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Contact: Jacqueline Yarmolowicz, Balchem Corporation (Telephone: 845-326-5600)
| Selected Financial Data (unaudited) ($ in 000’s) | ||||||||||||
| Business Segment Net Sales: | Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||
| Human Nutrition and Health | $ | 160,773 | $ | 147,928 | $ | 319,230 | $ | 300,672 | ||||
| Animal Nutrition and Health | 56,028 | 49,557 | 113,305 | 103,478 | ||||||||
| Specialty Products | 37,185 | 35,094 | 70,460 | 66,707 | ||||||||
| Other and Unallocated (b) | 1,481 | 1,502 | 2,991 | 2,883 | ||||||||
| Total | $ | 255,467 | $ | 234,081 | $ | 505,986 | $ | 473,740 | ||||
| Business Segment Earnings Before Income Taxes: | Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Human Nutrition and Health | $ | 38,342 | $ | 33,367 | $ | 76,316 | $ | 66,624 | ||||||||
| Animal Nutrition and Health | 3,514 | 2,693 | 8,750 | 4,753 | ||||||||||||
| Specialty Products | 11,269 | 11,228 | 20,854 | 19,427 | ||||||||||||
| Other and Unallocated (b) | (1,683 | ) | (1,491 | ) | (3,463 | ) | (3,331 | ) | ||||||||
| Interest and other expenses | (2,431 | ) | (4,571 | ) | (5,506 | ) | (9,397 | ) | ||||||||
| Total | $ | 49,011 | $ | 41,226 | $ | 96,951 | $ | 78,076 | ||||||||
| (b) 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 transaction and integration costs of | ||||||||||||||||
| Selected Balance Sheet Items | ||||||
| (Dollars in thousands) | June 30, 2025 | December 31, 2024 | ||||
| (unaudited) | ||||||
| Cash and Cash Equivalents | $ | 65,427 | $ | 49,515 | ||
| Accounts Receivable, net | 135,982 | 119,662 | ||||
| Inventories | 148,150 | 130,802 | ||||
| Other Current Assets | 15,296 | 13,791 | ||||
| Total Current Assets | 364,855 | 313,770 | ||||
| Property, Plant and Equipment, net | 290,088 | 282,154 | ||||
| Goodwill | 816,391 | 780,030 | ||||
| Intangible Assets with Finite Lives, net | 171,865 | 165,050 | ||||
| Right of Use Assets | 17,281 | 17,050 | ||||
| Other Assets | 17,767 | 17,317 | ||||
| Total Non-current Assets | 1,313,392 | 1,261,601 | ||||
| Total Assets | $ | 1,678,247 | $ | 1,575,371 | ||
| Current Liabilities | $ | 138,137 | $ | 157,685 | ||
| Revolving Loan | 190,000 | 190,000 | ||||
| Deferred Income Taxes | 47,773 | 43,722 | ||||
| Other Long-Term Obligations | 34,424 | 34,051 | ||||
| Total Liabilities | 410,334 | 425,458 | ||||
| Stockholders' Equity | 1,267,913 | 1,149,913 | ||||
| Total Liabilities and Stockholders' Equity | $ | 1,678,247 | $ | 1,575,371 | ||
| Balchem Corporation Condensed Consolidated Statements of Cash Flows (Dollars in thousands) | ||||||||
| (unaudited) | ||||||||
| Six Months Ended June 30, | ||||||||
| 2025 | 2024 | |||||||
| Cash flows from operating activities: | ||||||||
| Net earnings | $ | 75,331 | $ | 61,055 | ||||
| Adjustments to reconcile net earnings to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | 22,417 | 26,174 | ||||||
| Stock compensation expense | 9,648 | 8,636 | ||||||
| Other adjustments | (1,192 | ) | (1,106 | ) | ||||
| Changes in assets and liabilities | (22,495 | ) | (16,379 | ) | ||||
| Net cash provided by operating activities | 83,709 | 78,380 | ||||||
| Cash flows from investing activities: | ||||||||
| Capital expenditures and intangible assets acquired | (12,372 | ) | (13,788 | ) | ||||
| Cash paid for acquisitions, net of cash acquired | (323 | ) | — | |||||
| Proceeds from the sale of assets | 267 | 272 | ||||||
| Investment in affiliates | (105 | ) | (80 | ) | ||||
| Net cash used in investing activities | (12,533 | ) | (13,596 | ) | ||||
| Cash flows from financing activities: | ||||||||
| Proceeds from revolving loan | 63,000 | 26,000 | ||||||
| Principal payments on revolving loan | (63,000 | ) | (69,000 | ) | ||||
| Principal payments on finance leases | (97 | ) | (111 | ) | ||||
| Proceeds from stock options exercised | 6,222 | 9,682 | ||||||
| Dividends paid | (28,265 | ) | (25,568 | ) | ||||
| Repurchases of common stock | (38,589 | ) | (5,213 | ) | ||||
| Net cash used in financing activities | (60,729 | ) | (64,210 | ) | ||||
| Effect of exchange rate changes on cash | 5,465 | (1,283 | ) | |||||
| Increase (decrease) in cash and cash equivalents | 15,912 | (709 | ) | |||||
| Cash and cash equivalents, beginning of period | 49,515 | 64,447 | ||||||
| Cash and cash equivalents, end of period | $ | 65,427 | $ | 63,738 | ||||
Non-GAAP Financial Information
In addition to disclosing financial results in accordance with United States (U.S.) generally accepted accounting principles (GAAP), this earnings release contains non-GAAP financial measures that we believe are helpful in understanding and comparing our past financial performance and our future results. The non-GAAP financial measures in this press release include adjusted gross margin, adjusted earnings from operations, adjusted net earnings and the related adjusted per diluted share amounts, EBITDA, adjusted EBITDA, adjusted income tax expense, and free cash flow. The non-GAAP financial measures disclosed by the company exclude certain business combination accounting adjustments and certain other items related to acquisitions, certain equity compensation, nonqualified deferred compensation plan expense (income), and certain one-time or unusual transactions. Detailed non-GAAP adjustments are described in the reconciliation tables below and also explained in the related footnotes. These non-GAAP financial measures should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP, and the financial results calculated in accordance with GAAP and reconciliations from these results should be carefully evaluated. Investors should not consider non-GAAP measures as alternatives to the related GAAP measures.
Set forth below are reconciliations of the non-GAAP financial measures to the most directly comparable GAAP financial measures.
Table 1
(unaudited)
| Reconciliation of Non-GAAP Measures to GAAP (Dollars in thousands, except per share data) | ||||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Reconciliation of adjusted gross margin | ||||||||||||||||
| GAAP gross margin | $ | 93,113 | $ | 82,994 | $ | 181,281 | $ | 164,508 | ||||||||
| Amortization of intangible assets and finance leases (1) | 724 | 707 | 1,417 | 1,411 | ||||||||||||
| Adjusted gross margin | $ | 93,837 | $ | 83,701 | $ | 182,698 | $ | 165,919 | ||||||||
| Reconciliation of adjusted earnings from operations | ||||||||||||||||
| GAAP earnings from operations | $ | 51,442 | $ | 45,797 | $ | 102,457 | $ | 87,473 | ||||||||
| Amortization of intangible assets and finance leases (1) | 4,313 | 5,303 | 8,425 | 11,705 | ||||||||||||
| Transaction and integration costs (2) | 405 | 41 | 894 | 481 | ||||||||||||
| Restructuring costs (3) | (192 | ) | — | (192 | ) | — | ||||||||||
| Nonqualified deferred compensation plan expense (4) | 401 | 113 | 435 | 516 | ||||||||||||
| Adjusted earnings from operations | $ | 56,369 | $ | 51,254 | $ | 112,019 | $ | 100,175 | ||||||||
| Reconciliation of adjusted net earnings | ||||||||||||||||
| GAAP net earnings | $ | 38,278 | $ | 32,069 | $ | 75,331 | $ | 61,055 | ||||||||
| Amortization of intangible assets and finance leases (1) | 4,384 | 5,375 | 8,568 | 11,849 | ||||||||||||
| Transaction and integration costs (2) | 405 | 41 | 894 | 481 | ||||||||||||
| Restructuring costs (3) | (192 | ) | — | (192 | ) | — | ||||||||||
| Income tax adjustment (5) | (1,314 | ) | (1,908 | ) | (3,023 | ) | (4,224 | ) | ||||||||
| Adjusted net earnings | $ | 41,561 | $ | 35,577 | $ | 81,578 | $ | 69,161 | ||||||||
| Adjusted net earnings per common share - diluted | $ | 1.27 | $ | 1.09 | $ | 2.49 | $ | 2.12 | ||||||||
Table 2
(unaudited)
| Reconciliation of GAAP Net Earnings to EBITDA and to Adjusted EBITDA (Dollars in thousands) | ||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||
| Net earnings - as reported | $ | 38,278 | $ | 32,069 | $ | 75,331 | $ | 61,055 | ||||||
| Add back: | ||||||||||||||
| Provision for income taxes | 10,733 | 9,157 | 21,620 | 17,021 | ||||||||||
| Interest and other expenses | 2,431 | 4,571 | 5,506 | 9,397 | ||||||||||
| Depreciation and amortization | 11,330 | 12,433 | 22,272 | 26,030 | ||||||||||
| EBITDA | 62,772 | 58,230 | 124,729 | 113,503 | ||||||||||
| Add back: | ||||||||||||||
| Non-cash compensation expense related to equity awards | 5,838 | 3,886 | 9,648 | 8,636 | ||||||||||
| Transaction and integration costs (2) | 405 | 41 | 894 | 481 | ||||||||||
| Restructuring costs (3) | (192 | ) | — | (192 | ) | — | ||||||||
| Nonqualified deferred compensation plan expense (4) | 401 | 113 | 435 | 516 | ||||||||||
| Adjusted EBITDA | $ | 69,224 | $ | 62,270 | $ | 135,514 | $ | 123,136 | ||||||
Table 3
(unaudited)
| Reconciliation of GAAP Effective Income Tax Rate to Non-GAAP Effective Income Tax Rate (Dollars in thousands) | ||||||||||||
| Three Months Ended June 30, | ||||||||||||
| 2025 | Effective Tax Rate | 2024 | Effective Tax Rate | |||||||||
| GAAP Income Tax Expense | $ | 10,733 | 21.9 | % | $ | 9,157 | 22.2 | % | ||||
| Impact of ASU 2016-09 (6) | 283 | 620 | ||||||||||
| Adjusted Income Tax Expense | $ | 11,016 | 22.5 | % | $ | 9,777 | 23.7 | % | ||||
| Six Months Ended June 30, | ||||||||||||
| 2025 | Effective Tax Rate | 2024 | Effective Tax Rate | |||||||||
| GAAP Income Tax Expense | $ | 21,620 | 22.3 | % | $ | 17,021 | 21.8 | % | ||||
| Impact of ASU 2016-09 (6) | 873 | 1,327 | ||||||||||
| Adjusted Income Tax Expense | $ | 22,493 | 23.2 | % | $ | 18,348 | 23.5 | % | ||||
Table 4
(unaudited)
| Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow (Dollars in thousands) | ||||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Net cash provided by operating activities | $ | 47,252 | $ | 44,992 | $ | 83,709 | $ | 78,380 | ||||||||
| Capital expenditures and proceeds from the sale of assets | (6,554 | ) | (6,602 | ) | (11,975 | ) | (13,175 | ) | ||||||||
| Free cash flow | $ | 40,698 | $ | 38,390 | $ | 71,734 | $ | 65,205 | ||||||||
| (1) Amortization of intangible assets and finance leases: Amortization of intangible assets and finance leases consists of amortization of customer relationships, trademarks and trade names, developed technology, regulatory registration costs, patents and trade secrets, capitalized loan issuance costs, other intangibles acquired primarily in connection with business combinations, and finance leases. We record expense relating to the amortization of these intangibles and finance leases in our GAAP financial statements. Amortization expenses for our intangible assets and finance leases are inconsistent in amount and are significantly impacted by the timing and valuation of acquisitions. Consequently, our non-GAAP adjustments exclude these expenses to facilitate an evaluation of our current operating performance and comparisons to our past operating performance. |
| (2) Transaction and integration costs: Transaction and integration costs related to acquisitions and divestitures are expensed in our GAAP financial statements. Management excludes these items for the purposes of calculating adjusted EBITDA and other non-GAAP financial measures. We believe that excluding these items from our non-GAAP financial measures is useful to investors because these are items associated with transactions that are inconsistent in amount and frequency causing comparison of current and historical financial results to be difficult. |
| (3) Restructuring costs: Restructuring costs related to a reorganization of the business are recorded in our GAAP financial statements. Management excludes these items for the purposes of calculating adjusted EBITDA and other non-GAAP financial measures. We believe that excluding these items from our non-GAAP financial measures is useful to investors because these are items associated with transactions that are inconsistent in amount and frequency causing comparison of current and historical financial results to be difficult. |
| (4) Nonqualified deferred compensation plan (income) expense: Gains and losses on rabbi trust assets related to our nonqualified deferred compensation plan are recorded in other (income) expense while the offsetting increases or decreases to the deferred compensation liability are recorded within earnings from operations. The increases and decreases in the deferred compensation liability are driven by market volatility and are not a true reflection of company performance. We believe excluding these amounts from our non-GAAP financial measures is useful to investors because these items are inconsistent in amount based on market conditions causing comparison of current and historical financial results to be difficult. |
| (5) Income tax adjustment: For purposes of calculating adjusted net earnings and adjusted diluted earnings per share, we adjust the provision for (benefit from) income taxes to tax effect the taxable and deductible non-GAAP adjustments described above as they have a significant impact on our income tax (benefit) provision. Additionally, the income tax adjustment is adjusted for the impact of adopting ASU 2016-09, “Improvements to Employee Share-Based Payment Accounting” and uses our non-GAAP effective rate applied to both our GAAP earnings before income tax expense and non-GAAP adjustments described above. See Table 3 for the calculation of our non-GAAP effective tax rate. |
| (6) Impact of ASU 2016-09: The primary impact of ASU No. 2016-09, "Improvements to Employee Share-Based Payment Accounting" ("ASU 2016-09"), was the recognition during the three and six months ended June 30, 2025 and 2024, of excess tax benefits as a reduction to the provision for income taxes and the classification of these excess tax benefits in operating activities in the consolidated statement of cash flows instead of financing activities. Management excludes this item for the purpose of calculating adjusted Income Tax Expense. We believe that excluding the item in our non-GAAP financial measures is useful to investors because it is inconsistent in amount and frequency causing comparison of current and historical financial results to be difficult. |
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