Analyst Note| Seth Goldstein, CFA |
Balchem reported solid third-quarter earnings as adjusted EBITDA was up 9% versus the prior-year quarter driven by strong sales growth partially offset by cost inflation. We have increased our near-term outlook for the company as we expect strong demand will continue to drive higher sales. As with many specialty chemicals companies in our coverage, Balchem is currently dealing with cost inflation, which includes higher expenses for raw materials, logistics, and distributions. As we forecast in our second-quarter earnings update, Balchem should continue to see temporarily depressed margins.