BALCHEM CORP 10-Q

Item 1. Financial Statements BALCHEM CORPORATION Condensed Consolidated Balance Sheets (Dollars in thousands, except share and per share data) Assets September 30, 2025 December 31, 2024 Current assets: (unaudited) Cash and cash equivalents $ 65,093 $ 49,515 Accounts receivable, net of allowance for credit losses of $ 829 and $ 909 at September 30, 2025 and December 31, 2024, respectively 131,542 119,662 Inventories, net 132,435 130,802 Prepaid expenses 8,904 8,054 Other current assets 5,741 5,737 Total current assets 343,715 313,770 Property, plant and equipment, net 297,842 282,154 Goodwill 816,494 780,030 Customer relationships and lists, net 136,129 132,484 Other intangible assets with finite lives, net 31,330 32,566 Right of use assets - operating leases 15,916 15,320 Right of use assets - finance lease 1,573 1,730 Other non-current assets 18,032 17,317 Total assets $ 1,661,031 $ 1,575,371 Liabilities and Stockholders' Equity Current liabilities: Trade accounts payable $ 46,979 $ 54,745 Accrued expenses 48,592 43,750 Accrued compensation and other benefits 20,089 22,886 Dividends payable 113 28,510 Income taxes payable 6,451 4,466 Operating lease liabilities - current 3,943 3,134 Finance lease liabilities - current 202 194 Total current liabilities 126,369 157,685 Revolving loan 154,000 190,000 Deferred income taxes 47,602 43,722 Operating lease liabilities - non-current 12,257 12,967 Finance lease liabilities - non-current 1,596 1,749 Other long-term obligations 21,343 19,335 Total liabilities 363,167 425,458 Commitments and contingencies (Note 15) Stockholders' equity: Preferred stock, $ 25 par value. Authorized 2,000,000 shares; no ne issued and outstanding — — Common stock, $ 0.0667 par value. Authorized 120,000,000 shares; 32,376,314 and 32,527,244 shares issued and outstanding at September 30, 2025 and December 31, 2024, respectively 2,160 2,170 Additional paid-in capital 140,995 173,997 Retained earnings 1,113,113 997,493 Accumulated other comprehensive income (loss) 41,596 ( 23,747 ) Total stockholders' equity 1,297,864 1,149,913 Total liabilities and stockholders' equity $ 1,661,031 $ 1,575,371 See accompanying notes to condensed consolidated financial statements. 3 Table of Contents BALCHEM CORPORATION Condensed Consolidated Statements of Earnings (Dollars in thousands, except per share data) (unaudited) Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Net sales $ 267,558 $ 239,940 $ 773,544 $ 713,680 Cost of sales 172,105 154,579 496,810 463,811 Gross margin 95,453 85,361 276,734 249,869 Operating expenses: Selling expenses 19,092 15,557 55,318 51,798 Research and development expenses 4,496 4,329 13,458 12,283 General and administrative expenses 17,286 17,483 50,922 50,323 40,874 37,369 119,698 114,404 Earnings from operations 54,579 47,992 157,036 135,465 Other expenses, net: Interest expense, net 2,629 4,071 8,319 13,709 Other (income) expense, net ( 94 ) 28 ( 278 ) ( 213 ) 2,535 4,099 8,041 13,496 Earnings before income tax expense 52,044 43,893 148,995 121,969 Income tax expense 11,755 10,056 33,375 27,077 Net earnings $ 40,289 $ 33,837 $ 115,620 $ 94,892 Net earnings per common share - basic $ 1.25 $ 1.05 $ 3.57 $ 2.94 Net earnings per common share - diluted $ 1.24 $ 1.03 $ 3.54 $ 2.90 See accompanying notes to condensed consolidated financial statements. 4 Table of Contents BALCHEM CORPORATION Condensed Consolidated Statements of Comprehensive Income (Dollars in thousands) (unaudited) Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Net earnings $ 40,289 $ 33,837 $ 115,620 $ 94,892 Other comprehensive income, net of tax: Foreign currency translation adjustment 85 21,638 65,583 5,661 Change in postretirement benefit plans ( 1 ) ( 1 ) ( 240 ) 151 Other comprehensive income 84 21,637 65,343 5,812 Comprehensive income $ 40,373 $ 55,474 $ 180,963 $ 100,704 See accompanying notes to condensed consolidated financial statements. 5 Table of Contents BALCHEM CORPORATION Condensed Consolidated Statements of Changes in Stockholders’ Equity For the Three and Nine Months Ended September 30, 2025 and 2024 (Dollars in thousands, except share and per share data) (Unaudited) Total Stockholders' Equity Retained Earnings Accumulated Other Comprehensive Income (Loss) Common Stock Additional Paid-in Capital Shares Amount Balance - December 31, 2024 $ 1,149,913 $ 997,493 $ ( 23,747 ) 32,527,244 $ 2,170 $ 173,997 Net earnings 37,053 37,053 — — — — Other comprehensive income 21,484 — 21,484 — — — Repurchases of common stock ( 5,325 ) — — ( 32,869 ) ( 2 ) ( 5,323 ) Shares and options issued under stock plans 5,576 — — 117,169 7 5,569 Balance - March 31, 2025 1,208,701 1,034,546 ( 2,263 ) 32,611,544 2,175 174,243 Net earnings 38,278 38,278 — — — — Other comprehensive income 43,775 — 43,775 — — — Repurchases of common stock, including excise tax ( 33,348 ) — — ( 204,965 ) ( 13 ) ( 33,335 ) Shares and options issued under stock plans 10,507 — — 48,975 3 10,504 Balance - June 30, 2025 $ 1,267,913 $ 1,072,824 $ 41,512 32,455,554 $ 2,165 $ 151,412 Net earnings 40,289 40,289 — — — — Other comprehensive income 84 — 84 — — — Repurchases of common stock, including excise tax ( 15,624 ) — — ( 95,760 ) ( 6 ) ( 15,618 ) Shares and options issued under stock plans 5,202 — — 16,520 1 5,201 Balance - September 30, 2025 $ 1,297,864 $ 1,113,113 $ 41,596 32,376,314 $ 2,160 $ 140,995 See accompanying notes to condensed consolidated financial statements. 6 Table of Contents BALCHEM CORPORATION Condensed Consolidated Statements of Changes in Stockholders’ Equity (continued) For the Three and Nine Months Ended September 30, 2025 and 2024 (Dollars in thousands, except share and per share data) (Unaudited) Total Stockholders' Equity Retained Earnings Accumulated Other Comprehensive Income (Loss) Common Stock Additional Paid-in Capital Shares Amount Balance - December 31, 2023 $ 1,053,984 $ 897,488 $ 8,691 32,254,728 $ 2,152 $ 145,653 Net earnings 28,986 28,986 — — — — Other comprehensive loss ( 12,563 ) — ( 12,563 ) — — — Repurchases of common stock, including excise tax ( 5,254 ) — — ( 36,122 ) ( 2 ) ( 5,252 ) Shares and options issued under stock plans 13,638 — — 204,794 13 13,625 Balance - March 31, 2024 1,078,791 926,474 ( 3,872 ) 32,423,400 2,163 154,026 Net earnings 32,069 32,069 — — — — Other comprehensive loss ( 3,262 ) — ( 3,262 ) — — — Repurchases of common stock, including excise tax ( 11 ) — — ( 72 ) — ( 11 ) Shares and options issued under stock plans 4,777 — — 11,530 1 4,776 Balance - June 30, 2024 $ 1,112,364 $ 958,543 $ ( 7,134 ) 32,434,858 $ 2,164 $ 158,791 Net earnings 33,837 33,837 — — — — Other comprehensive income 21,637 — 21,637 — — — Repurchases of common stock, including excise tax ( 165 ) — — ( 915 ) — ( 165 ) Shares and options issued under stock plans 9,553 — — 73,773 5 9,548 Balance - September 30, 2024 $ 1,177,226 $ 992,380 $ 14,503 32,507,716 $ 2,169 $ 168,174 See accompanying notes to condensed consolidated financial statements. 7 Table of Contents BALCHEM CORPORATION Condensed Consolidated Statements of Cash Flows (Dollars in thousands) (unaudited) Nine Months Ended September 30, 2025 2024 Cash flows from operating activities: Net earnings $ 115,620 $ 94,892 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization 33,969 37,077 Stock compensation expense 14,298 12,787 Deferred income taxes ( 273 ) ( 1,918 ) Provision for credit losses ( 118 ) 238 Unrealized gain on foreign currency transactions and deferred compensation ( 1,207 ) ( 730 ) (Gain) loss on disposal of assets and asset impairment ( 94 ) 1,479 Change in fair value of contingent consideration liability — ( 91 ) Changes in assets and liabilities Accounts receivable ( 8,900 ) 5,220 Inventories 2,622 ( 8,738 ) Prepaid expenses and other current assets 24 1,199 Accounts payable and accrued expenses ( 9,024 ) ( 9,734 ) Income taxes 1,440 ( 3,110 ) Other 924 1,111 Net cash provided by operating activities 149,281 129,682 Cash flows from investing activities: Capital expenditures and intangible assets acquired ( 27,275 ) ( 22,936 ) Cash paid for acquisitions, net of cash acquired ( 323 ) — Proceeds from sale of assets 267 272 Investment in affiliates ( 144 ) ( 113 ) Net cash used in investing activities ( 27,475 ) ( 22,777 ) Cash flows from financing activities: Proceeds from revolving loan 70,000 26,000 Principal payments on revolving loan ( 106,000 ) ( 108,569 ) Principal payments on finance leases ( 145 ) ( 169 ) Proceeds from stock options exercised 6,867 15,084 Dividends paid ( 28,276 ) ( 25,572 ) Repurchases of common stock ( 54,008 ) ( 5,376 ) Net cash used in financing activities ( 111,562 ) ( 98,602 ) Effect of exchange rate changes on cash 5,334 944 Increase in cash and cash equivalents 15,578 9,247 Cash and cash equivalents beginning of period 49,515 64,447 Cash and cash equivalents end of period $ 65,093 $ 73,694 See accompanying notes to condensed consolidated financial statements. 8 Table of Contents BALCHEM CORPORATION Notes to Condensed Consolidated Financial Statements (Unaudited) (All dollar amounts in thousands, except share and per share data) NOTE 1 – 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, 2024 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, 2024. The condensed consolidated financial statements reflect the operations of Balchem Corporation and its subsidiaries (the "Company" or "Balchem"). 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 and nine months ended September 30, 2025 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 Issued Accounting Standards In November 2024, the FASB issued ASU 2024-03, "Income Statement - Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40)." The new guidance is intended to enhance transparency and disclosures by requiring public entities to provide disaggregated disclosures of certain categories of expenses on an annual and interim basis. The ASU is effective for fiscal years beginning after December 15, 2026 and interim periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact that the adoption of ASU 2024-03 will have on the consolidated financial statements and related disclosures. In December 2023, the FASB issued ASU 2023-09, "Income Taxes (Topic 740) - Improvements to Income Tax Disclosures." The new guidance is intended to enhance the transparency and decision usefulness of income tax disclosures by requiring disaggregated information about a reporting entity's effective tax rate reconciliation and information on income taxes paid. The amendment is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The amendment in this update should be applied on a prospective basis, with retrospective application permitted. The Company is in the process of evaluating the impact that the adoption of ASU 2023-09 will have on the consolidated financial statements and related disclosures. Recently Adopted Accounting Standards In November 2023, the FASB issued ASU 2023-07, "Segment Reporting (Topic 280) - Improvements to Reportable Segment Disclosures." The ASU expands reportable segment disclosure requirements by requiring disclosures of significant reportable segment expenses that are regularly provided to the Chief Operating Decision Maker (“CODM”) and included within each reported measure of a segment's profit or loss. The ASU also requires disclosure of the title and position of the individual identified as the CODM and an explanation of how the CODM uses the reported measures of a segment's profit or loss in assessing segment performance and deciding how to allocate resources. Additionally, ASU 2023-07 requires all segment profit or loss and assets disclosures to be provided on an annual and interim basis. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning December 15, 2024. The Company adopted this accounting guidance on December 31, 2024, and applied it retrospectively to all prior periods presented in our consolidated financial statements. Refer to Note 10, Segment Information for the expanded disclosures. 9 Table of Contents NOTE 2 - STOCKHOLDERS' EQUITY Stock-Based Compensation The Company’s results for the three and nine months ended September 30, 2025 and 2024 reflected the following stock-based compensation cost, and such compensation cost had the following effects on net earnings: Increase/(Decrease) for the Increase/(Decrease) for the Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Cost of sales $ 382 $ 441 $ 1,356 $ 1,266 Operating expenses 4,268 3,710 12,942 11,521 Net earnings ( 3,626 ) ( 3,188 ) ( 11,131 ) ( 9,815 ) As allowed by Accounting Standards Codification ("ASC") 718, 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 omnibus incentive plan ("the Plan") allows 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 plan. 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 September 30, 2025, the Plan had 680,930 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 to five years for stock options, three years for employee restricted stock awards, three years for employee performance share awards, and one to three years for non-employee director restricted stock awards. Certain awards provide for accelerated vesting if there is a change in control (as defined in the plans) or other qualifying events. Option activity for the nine months ended September 30, 2025 and 2024 is summarized below: For the Nine Months Ended September 30, 2025 Shares (000s) Weighted Average Exercise Price Aggregate Intrinsic Value Weighted Average Remaining Contractual Term Outstanding as of December 31, 2024 962 $ 114.81 $ 46,346 Granted 51 159.18 Exercised ( 76 ) 90.46 Forfeited ( 3 ) 142.33 Canceled ( 1 ) 139.81 Outstanding as of September 30, 2025 933 $ 119.11 $ 29,374 5.4 Exercisable as of September 30, 2025 661 $ 108.04 $ 27,784 4.3 For the Nine Months Ended September 30, 2024 Shares (000s) Weighted Average Exercise Price Aggregate Intrinsic Value Weighted Average Remaining Contractual Term Outstanding as of December 31, 2023 1,078 $ 104.38 $ 47,889 Granted 113 143.43 Exercised ( 198 ) 75.94 Forfeited ( 2 ) 137.06 Canceled — — Outstanding as of September 30, 2024 991 $ 114.49 $ 60,932 6.0 Exercisable as of September 30, 2024 626 $ 99.39 $ 47,926 4.6 10 Table of Contents 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 weighted average fair values of the stock options granted under the Plan were calculated using either the Black-Scholes model or the Binomial model, whichever was deemed to be most appropriate. For the nine months ended September 30, 2025, the fair value of each option grant was estimated on the date of the grant using the following weighted average assumptions: dividend yields of 0.6 %; expected volatilities of 26 %; risk-free interest rates of 4.5 %; and expected lives of 5.2 years. For the nine months ended September 30, 2024, the fair value of each option grant was estimated on the date of the grant using the following weighted average assumptions: dividend yields of 0.6 %; expected volatilities of 28 %; risk-free interest rates of 4.1 %; and expected lives of 5.0 years. The Company used a projected expected life for each award granted based on historical experience of employees’ exercise behavior. Expected volatilities are 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 of the award. Other information pertaining to option activity during the three and nine months ended September 30, 2025 and 2024 is as follows: Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Weighted-average fair value of options granted $ — $ — $ 48.86 $ 44.52 Total intrinsic value of stock options exercised ($000s) $ 621 $ 5,372 $ 5,380 $ 16,693 Non-vested restricted stock activity for the nine months ended September 30, 2025 and 2024 is summarized below: Nine Months Ended September 30, 2025 2024 Shares (000s) Weighted Average Grant Date Fair Value Shares (000s) Weighted Average Grant Date Fair Value Non-vested balance as of December 31 122 $ 141.62 116 $ 133.06 Granted 65 158.89 50 147.49 Vested ( 34 ) 137.78 ( 34 ) 120.01 Forfeited ( 3 ) 148.11 ( 3 ) 141.23 Non-vested balance as of September 30 150 $ 149.84 129 $ 141.94 Non-vested performance share activity for the nine months ended September 30, 2025 and 2024 is summarized below: Nine Months Ended September 30, 2025 2024 Shares (000s) Weighted Average Grant Date Fair Value Shares (000s) Weighted Average Grant Date Fair Value Non-vested balance as of December 31 79 $ 150.73 76 $ 135.25 Granted 50 147.96 47 152.28 Vested ( 44 ) 130.29 ( 44 ) 106.57 Forfeited ( 4 ) 152.69 — — Non-vested balance as of September 30 81 $ 160.14 79 $ 150.73 11 Table of Contents The Company's 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, or 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. For grants made in 2025, the performance metrics are comprised of an EBITDA performance hurdle, where vesting is dependent upon the Company achieving a certain EBITDA percentage growth over the performance period and modified based on 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 of the grant at the date of grant. A Monte-Carlo simulation has been used to estimate the fair value. The assumptions used in the fair value determination were risk free interest rates of 4.3 % and 4.2 %; dividend yields of 0.0 % and 0.0 %; volatilities of 26 % and 25 %; and initial TSR's of - 8.8 % and 10.3 %, in each case for the nine months ended September 30, 2025 and 2024, 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. Grants may be subject to a mandatory holding period of one year from the vesting date. For PS awards granted in 2024 and 2025, grants are subject to such holding period. As of September 30, 2025 and 2024, there were $ 23,995 and $ 24,300 , respectively, of total unrecognized compensation costs related to non-vested share-based compensation arrangements granted under the plans. As of September 30, 2025, the unrecognized compensation cost is expected to be recognized over a weighted-average period of approximately 1.5 years. The Company estimates that share-based compensation expense for the year ended December 31, 2025 will be approximately $ 18,900 . Repurchase of Common Stock The Company's Board of Directors has approved a stock repurchase program. The total authorization under this program is 3,763,038 shares. Since the inception of the program in June 1999, a total of 3,475,622 shares have been repurchased. The Company intends to acquire shares from time to time at prevailing market prices if and to the extent it deems it is advisable to do so based on its assessment of corporate cash flow, market conditions and other factors. Open market repurchases of common stock could be made pursuant to a share repurchase agreement in compliance with Rule 10b-18 or a trading plan established pursuant to Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, which would permit common stock to be repurchased at a time that the Company might otherwise be precluded from doing so under insider trading laws or self-imposed trading restrictions. The Company also repurchases (withholds) shares from employees in connection with the tax settlement of vested shares and/or exercised stock options, as applicable, under the Company's omnibus incentive plan. Such repurchases of shares from employees are funded with existing cash on hand. During the nine months ended September 30, 2025, the Company repurchased 333,594 shares from open market purchases and/or withheld shares from employees in connection with the tax settlement of vested shares and/or exercised stock options, as applicable, under the Company's omnibus incentive plan at an average cost of $ 161.90 . During the nine months ended September 30, 2024, the Company purchased 37,109 shares from employees in connection with the tax settlement of vested shares and/or exercised stock options, as applicable, under the Company's omnibus incentive plan at an average cost of $ 144.89 . NOTE 3 – INVENTORIES Inventories, net of reserves at September 30, 2025 and December 31, 2024 consisted of the following: September 30, 2025 December 31, 2024 Raw materials $ 44,593 $ 45,319 Work in progress 5,341 4,510 Finished goods 82,501 80,973 Total inventories $ 132,435 $ 130,802 12 Table of Contents NOTE 4 – PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment at September 30, 2025 and December 31, 2024 are summarized as follows: September 30, 2025 December 31, 2024 Land $ 12,426 $ 11,690 Building 115,946 106,954 Equipment 337,141 315,001 Construction in progress 83,772 77,508 549,285 511,153 Less: accumulated depreciation 251,443 228,999 Property, plant and equipment, net $ 297,842 $ 282,154 In accordance with Topic 360, the Company reviews long-lived assets for impairment whenever events indicate that the carrying amount of the assets may not be fully recoverable. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset, which is generally based on discounted cash flows. Included in "General and administrative expenses" was $ 521 of restructuring-related impairment charges related to an asset that was held for sale for both the three and nine months ended September 30, 2024. There were no such charges for the three and nine months ended September 30, 2025. NOTE 5 - INTANGIBLE ASSETS The Company had goodwill in the amount of $ 816,494 and $ 780,030 as of September 30, 2025 and December 31, 2024, respectively, subject to the provisions of ASC 350, “Intangibles-Goodwill and Other.” The increase in goodwill is primarily due to foreign currency translation adjustments. Identifiable intangible assets with finite lives at September 30, 2025 and December 31, 2024 are summarized as follows: Amortization Period (in years) Gross Carrying Amount at September 30, 2025 Accumulated Amortization at September 30, 2025 Gross Carrying Amount at December 31, 2024 Accumulated Amortization at December 31, 2024 Customer relationships and lists 10 - 20 $ 370,726 $ 234,597 $ 354,051 $ 221,567 Trademarks and trade names 2 - 17 52,256 43,303 50,971 41,417 Developed technology 5 - 12 42,379 22,790 40,074 20,362 Other 2 - 18 25,019 22,231 25,154 21,854 Other intangible assets with finite lives 119,654 88,324 116,199 83,633 Total intangible assets with finite lives $ 490,380 $ 322,921 $ 470,250 $ 305,200 Amortization of identifiable intangible assets was approximately $ 4,341 and $ 12,662 for the three and nine months ended September 30, 2025 respectively, and $ 3,795 and $ 15,380 for the three and nine months ended September 30, 2024, respectively. Assuming no change in the gross carrying value of identifiable intangible assets, estimated amortization expense is $ 4,226 for the remainder of 2025, $ 16,837 for 2026, $ 16,305 for 2027, $ 15,844 for 2028, $ 15,434 for 2029 and $ 15,050 for 2030. At September 30, 2025 and December 31, 2024, there were no identifiable intangible assets with indefinite useful lives as defined by ASC 350. Identifiable intangible assets are reflected in "Customer relationships and lists, net" and “Other intangible assets with finite lives, net” on the Company’s condensed consolidated balance sheets. There were no changes to the useful lives of intangible assets subject to amortization during the nine months ended September 30, 2025 and 2024. 13 Table of Contents NOTE 6 - EQUITY METHOD INVESTMENT In 2013, the Company and Eastman Chemical Company 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 receives the majority of the production offtake capacity, which may be adjusted from time to time to the extent the owners agree as such, 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 $ 123 and $ 368 for the three and nine months ended September 30, 2025, respectively, and $ 124 and $ 367 for the three and nine months ended September 30, 2024, respectively, relating to its portion of the joint venture's expenses in other expense. The Company made capital contributions to the investment totaling $ 39 and $ 144 for the three and nine months ended September 30, 2025, respectively, and $ 33 and $ 113 for the three and nine months ended September 30, 2024, respectively. The carrying value of the joint venture at September 30, 2025 and December 31, 2024 was $ 3,632 and $ 3,856 , respectively, and is recorded in "Other non-current assets" on the condensed consolidated balance sheets. NOTE 7 – REVOLVING LOAN On July 27, 2022, the Company entered into an Amended and Restated Credit Agreement (the "2022 Credit Agreement") with certain lenders in the form of a senior secured revolving credit facility, due on July 27, 2027. The 2022 Credit Agreement allows for up to $ 550,000 of borrowing. 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. As of September 30, 2025 and December 31, 2024, the total balance outstanding on the 2022 Credit Agreement amounted to $ 154,000 and $ 190,000 , 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 2022 Credit Agreement are subject to an interest rate equal to a fluctuating rate as defined by the 2022 Credit Agreement plus an applicable rate. The applicable rate is based upon the Company’s consolidated net leverage ratio, as defined in the 2022 Credit Agreement, and the interest rate was 5.27 % at September 30, 2025. 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 2022 Credit Agreement and ranges from 0.150 % to 0.225 % ( 0.150 % at September 30, 2025). The unused portion of the revolving loan amounted to $ 396,000 at September 30, 2025. 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 2022 Credit Agreement, which is not materially different than the effective interest method. Capitalized costs net of accumulated amortization were $ 527 and $ 743 at September 30, 2025 and December 31, 2024, respectively, and are included in "Other non-current assets" on the condensed consolidated balance sheets. Amortization expense pertaining to these costs totaled $ 72 and $ 216 for both the three and nine months ended September 30, 2025 and 2024 and are included in "Interest expense, net" in the accompanying condensed consolidated statements of earnings. The 2022 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 September 30, 2025, the Company was in compliance with these covenants. Indebtedness under the Company’s loan agreements is secured by assets of the Company. 14 Table of Contents NOTE 8– NET EARNINGS PER SHARE The following presents a reconciliation of the net earnings and shares used in calculating basic and diluted net earnings per share: Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Net Earnings - Basic and Diluted $ 40,289 $ 33,837 $ 115,620 $ 94,892 Shares (000s) Weighted Average Common Shares - Basic 32,265 32,373 32,353 32,311 Effect of Dilutive Securities – Stock Options, Restricted Stock, and Performance Shares 330 410 349 375 Weighted Average Common Shares - Diluted 32,595 32,783 32,702 32,686 Net Earnings Per Share - Basic $ 1.25 $ 1.05 $ 3.57 $ 2.94 Net Earnings Per Share - Diluted $ 1.24 $ 1.03 $ 3.54 $ 2.90 The number of anti-dilutive shares were 221,170 and 224,180 for the three and nine months ended September 30, 2025, respectively, and 189,830 and 326,020 for the three and nine months ended September 30, 2024, respectively. Anti-dilutive shares could potentially dilute basic earnings per share in future periods and therefore, were not included in diluted earnings per share. NOTE 9 – INCOME TAXES The Company’s effective tax rate for the three months ended September 30, 2025 and 2024, was 22.6 % and 22.9 %, respectively. The lower effective tax rate for the quarter was primarily due to certain lower state taxes. The effective tax rate for the nine months ended September 30, 2025 and 2024 was 22.4 % and 22.2 %, respectively. The higher effective tax rate for the nine months ended September 30, 2025 was primarily due to lower tax benefits from stock-based compensation partially offset by certain lower state taxes. On July 4, 2025, the One Big Beautiful Bill Act ("OBBBA") was signed into law in the United States whi ch includes a broad range of tax provisions. While the Company currently does not anticipate the OBBBA will have a material impact on its estimated annual effective tax rate in 2025, we will continue to assess its impact. 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. 15 Table of Contents The Company files income tax return s in the U.S. and in various states and foreign countries. As of September 30, 2025, in the major jurisdictions where the Company operates, it is generally no longer subject to income tax examinations by tax authorities for years before 2020. The Company had approximately $ 7,349 and $ 6,720 of unrecognized tax benefits, which are included in "Other long-term obligations" on the Company’s condensed consolidated balance sheets, as of September 30, 2025 and December 31, 2024, respectively. The Company includes interest expense or income as well as potential penalties on uncertain tax positions as a component of "Income tax expense" in the condensed consolidated statements of earnings. Total accrued interest and penalties related to uncertain tax positions at September 30, 2025 and December 31, 2024 were approximately $ 2,666 and $ 2,352 , respectively, and are included in "Other long-term obligations" on the Company’s condensed consolidated balance sheets. The European Union ("EU") member states formally adopted the EU's Pillar Two Directive on December 15, 2022, which was established by the Organization for Economic Co-operation and Development. Pillar Two generally provides for a 15 percent minimum effective tax rate for the jurisdictions where multinational enterprises operate. While the Company does not anticipate that this will have a material impact on its tax provision or effective tax rate, the Company continues to monitor evolving tax legislation in the jurisdictions in which it operates. NOTE 10 – SEGMENT INFORMATION Balchem Corporation reports three reportable segments: Human Nutrition and Health, Animal Nutrition and 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". The Company's Chief Operating Decision Maker ("CODM") is the Chief Executive Officer. The CODM receives a profit and loss reporting package which provides segment information including revenue, cost of goods sold, gross margin, total operating expenses, and earnings from operations. The CODM utilizes this monthly profit and loss reporting package to analyze segment performance and appropriately allocate resources. Pursuant to ASU 2023-07, "Segment Reporting (Topic 280) - Improvements to Reportable Segment Disclosures", the significant segment information is summarized as follows: For the Three Months Ended September 30, 2025 HNH ANH SP Other and Unallocated Total Net sales $ 174,088 $ 56,376 $ 35,683 $ 1,411 $ 267,558 Cost of sales 109,961 (1) 44,630 (1) 15,735 (1) 1,779 (1) 172,105 Gross margin 64,127 11,746 19,948 ( 368 ) 95,453 Operating expenses 23,296 (2) 8,033 (3) 8,414 (4) 1,131 (5) 40,874 Earnings from operations 40,831 3,713 11,534 ( 1,499 ) 54,579 Other expenses: Interest expense, net 2,629 Other income, net ( 94 ) 2,535 Earnings before income tax expense 52,044 Income tax expense 11,755 Net earnings $ 40,289 16 Table of Contents (1) Cost of sales are primarily comprised of raw materials consumed in the manufacture of product, as well as manufacturing labor, depreciation expense, and other overhead expenses necessary to convert purchased materials and supplies into finished product. Cost of sales also includes inbound freight costs, outbound freight costs for shipping products to customers, warehousing costs, quality control and obsolescence expense. (2) Operating expenses within HNH are primarily comprised of compensation-related costs, professional services, including advertising and marketing costs, and amortization expense in connection with certain acquired intangible assets. (3) Operating expenses within ANH are primarily comprised of compensation-related costs and professional services, including advertising and marketing costs. (4) Operating expenses within SP are primarily comprised of compensation-related costs, professional services, and amortization expense in connection with certain acquired intangible assets. (5) Operating expenses within Other and Unallocated are primarily comprised of compensation-related costs and transaction and integration costs. For the Nine Months Ended September 30, 2025 HNH ANH SP Other and Unallocated Total Net sales $ 493,318 $ 169,681 $ 106,143 $ 4,402 $ 773,544 Cost of sales 308,811 (6) 134,033 (6) 48,292 (6) 5,674 (6) 496,810 Gross margin 184,507 35,648 57,851 ( 1,272 ) 276,734 Operating expenses 67,360 (7) 23,185 (8) 25,463 (9) 3,690 (10) 119,698 Earnings from operations 117,147 12,463 32,388 ( 4,962 ) 157,036 Other expenses: Interest expense, net 8,319 Other income, net ( 278 ) 8,041 Earnings before income tax expense 148,995 Income tax expense 33,375 Net earnings $ 115,620 (6) Cost of sales are primarily comprised of raw materials consumed in the manufacture of product, as well as manufacturing labor, depreciation expense, and other overhead expenses necessary to convert purchased materials and supplies into finished product. Cost of sales also includes inbound freight costs, outbound freight costs for shipping products to customers, warehousing costs, quality control and obsolescence expense. (7) Operating expenses within HNH are primarily comprised of compensation-related costs, professional services, including advertising and marketing costs, and amortization expense in connection with certain acquired intangible assets. (8) Operating expenses within ANH are primarily comprised of compensation-related costs and professional services, including advertising and marketing costs. (9) Operating expenses within SP are primarily comprised of compensation-related costs, professional services, and amortization expense in connection with certain acquired intangible assets. (10) Operating expenses within Other and Unallocated are primarily comprised of compensation-related costs and transaction and integration costs. 17 Table of Contents For the Three Months Ended September 30, 2024 HNH ANH SP Other and Unallocated Total Net sales $ 152,283 $ 52,906 $ 33,191 $ 1,560 $ 239,940 Cost of sales 95,827 (11) 42,254 (11) 14,338 (11) 2,160 (11) 154,579 Gross margin 56,456 10,652 18,853 ( 600 ) 85,361 Operating expenses 20,878 (12) 7,123 (13) 8,337 (14) 1,031 (15) 37,369 Earnings from operations 35,578 3,529 10,516 ( 1,631 ) 47,992 Other expenses: Interest expense, net 4,071 Other expense, net 28 4,099 Earnings before income tax expense 43,893 Income tax expense 10,056 Net earnings $ 33,837 (11) Cost of sales are primarily comprised of raw materials consumed in the manufacture of product, as well as manufacturing labor, depreciation expense, and other overhead expenses necessary to convert purchased materials and supplies into finished product. Cost of sales also includes inbound freight costs, outbound freight costs for shipping products to customers, warehousing costs, quality control and obsolescence expense. (12) Operating expenses within HNH are primarily comprised of compensation-related costs, professional services, including advertising and marketing costs, and amortization expense in connection with certain acquired intangible assets. (13) Operating expenses within ANH are primarily comprised of compensation-related costs and professional services, including advertising and marketing costs. (14) Operating expenses within SP are primarily comprised of compensation-related costs, professional services, and amortization expense in connection with certain acquired intangible assets. (15) Operating expenses within Other and Unallocated are primarily comprised of compensation-related costs and transaction and integration costs. For the Nine Months Ended September 30, 2024 HNH ANH SP Other and Unallocated Total Net sales $ 452,955 $ 156,384 $ 99,898 $ 4,443 $ 713,680 Cost of sales 286,424 (16) 126,263 (16) 44,929 (16) 6,195 (16) 463,811 Gross margin 166,531 30,121 54,969 ( 1,752 ) 249,869 Operating expenses 64,329 (17) 21,839 (18) 25,026 (19) 3,210 (20) 114,404 Earnings from operations 102,202 8,282 29,943 ( 4,962 ) 135,465 Other expenses: Interest expense, net 13,709 Other income, net ( 213 ) 13,496 Earnings before income tax expense 121,969 Income tax expense 27,077 Net earnings $ 94,892 18 Table of Contents (16) Cost of sales are primarily comprised of raw materials consumed in the manufacture of product, as well as manufacturing labor, depreciation expense, and other overhead expenses necessary to convert purchased materials and supplies into finished product. Cost of sales also includes inbound freight costs, outbound freight costs for shipping products to customers, warehousing costs, quality control and obsolescence expense. (17) Operating expenses within HNH are primarily comprised of compensation-related costs, professional services, including advertising and marketing costs, and amortization expense in connection with certain acquired intangible assets. (18) Operating expenses within ANH are primarily comprised of compensation-related costs and professional services, including advertising and marketing costs. (19) Operating expenses within SP are primarily comprised of compensation-related costs, professional services, and amortization expense in connection with certain acquired intangible assets. (20) Operating expenses within Other and Unallocated are primarily comprised of compensation-related costs and transaction and integration costs. Business Segment Assets September 30, 2025 December 31, 2024 Human Nutrition and Health $ 1,232,690 $ 1,185,962 Animal Nutrition and Health 171,846 161,243 Specialty Products 172,496 161,283 Other and Unallocated (21) 83,999 66,883 Total $ 1,661,031 $ 1,575,371 (21) 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. Depreciation/Amortization Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Human Nutrition and Health $ 7,615 $ 6,803 $ 22,462 $ 24,729 Animal Nutrition and Health 1,834 2,068 5,424 6,266 Specialty Products 1,872 1,770 5,394 5,314 Other and Unallocated 231 262 689 768 Total $ 11,552 $ 10,903 $ 33,969 $ 37,077 Capital Expenditures Nine Months Ended September 30, 2025 2024 Human Nutrition and Health $ 14,075 $ 11,850 Animal Nutrition and Health 9,940 8,459 Specialty Products 2,768 1,948 Other and Unallocated 350 255 Total $ 27,133 $ 22,512 NOTE 11 – 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. 19 Table of Contents The following table presents revenues disaggregated by revenue source. Sales and usage-based taxes are excluded from revenues. Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Product Sales Revenue $ 267,078 $ 239,522 $ 772,180 $ 712,374 Royalty Revenue 480 418 1,364 1,306 Total Revenue $ 267,558 $ 239,940 $ 773,544 $ 713,680 The following table presents revenues disaggregated by geography, based on customers' delivery addresses: Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 United States $ 198,064 $ 181,990 $ 570,492 $ 541,768 Foreign Countries 69,494 57,950 203,052 171,912 Total Revenue $ 267,558 $ 239,940 $ 773,544 $ 713,680 Product Sales Revenues The Company’s primary operation is the manufacturing and sale of health and nutrition 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. 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 Human Nutrition and Health 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. 20 Table of Contents NOTE 12 – SUPPLEMENTAL CASH FLOW INFORMATION Cash paid during the nine months ended September 30, 2025 and 2024 for income taxes and interest is as follows: Nine Months Ended September 30, 2025 2024 Income taxes $ 29,625 $ 31,575 Interest $ 8,516 $ 14,500 NOTE 13 – ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) The changes in accumulated other comprehensive income (loss) were as follows: Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Net foreign currency translation adjustment $ 85 $ 21,638 $ 65,583 $ 5,661 Net change in postretirement benefit plan (see Note 14 for further information) Amortization of gain ( 1 ) ( 2 ) ( 4 ) ( 7 ) Prior service (gain) loss arising during the period — — ( 319 ) 206 Total before tax ( 1 ) ( 2 ) ( 323 ) 199 Tax — 1 83 ( 48 ) Net of tax ( 1 ) ( 1 ) ( 240 ) 151 Total other comprehensive income $ 84 $ 21,637 $ 65,343 $ 5,812 Accumulated other comprehensive income (loss) at September 30, 2025 and December 31, 2024 consisted of the following: Foreign currency translation adjustment Postretirement benefit plan Total Balance December 31, 2024 $ ( 24,182 ) $ 435 $ ( 23,747 ) Other comprehensive income (loss) 65,583 ( 240 ) 65,343 Balance September 30, 2025 $ 41,401 $ 195 $ 41,596 NOTE 14 – EMPLOYEE BENEFIT PLANS Defined Contribution Plans The Company sponsors one 401(k) savings plan for eligible employees, which allows participants to make pretax or after tax contributions, and the Company matches certain percentages of those contributions with shares of the Company’s Common Stock. The plan also has a discretionary profit sharing portion. All amounts contributed to the plan are deposited into a trust fund administered by independent trustees. 21 Table of Contents 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 one for officers of the Company pursuant to the Balchem Corporation Officer Retiree Program. Net periodic benefit costs for such retirement medical plans were as follows: Nine Months Ended September 30, 2025 2024 Service cost $ 87 $ 84 Interest cost 53 41 Amortization of gain ( 7 ) ( 7 ) Net periodic benefit cost $ 133 $ 118 T he amounts recorded for these obligations on the Company’s condensed consolidated balance sheets as of September 30, 2025 and December 31, 2024 a re $ 1,531 and $ 1,522 , respectively, and are included in "Other long-term obligations" on the Company's condensed consolidated balance sheets. 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 Plan On May 27, 2019, the Company acquired Chemogas Holding NV, a privately held specialty gases company headquartered in Grimbergen, Belgium ("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 amounts recorded for these obligations on the Company's condensed consolidated balance sheets as of September 30, 2025 and December 31, 2024 were $ 800 and $ 613 , respectively, and were included in "Other long-term obligations" on the Company's condensed consolidated balance sheets. Net periodic benefit costs for such benefit pension plan were as follows: Nine Months Ended September 30, 2025 2024 Service cost with interest to end of year $ 161 $ 58 Interest cost 61 43 Expected return on plan assets ( 45 ) ( 32 ) Amortization of loss 3 — Total net periodic benefit cost $ 180 $ 69 Deferred Compensation Plan The Company provides an unfunded, nonqualified deferred compensation plan maintained for the benefit of a select group of management or highly compensated employees. Assets of the plan are held in a rabbi trust, and are subject to additional risk of loss in the event of bankruptcy or insolvency of the Company. The deferred compensation liability was $ 12,574 as of September 30, 2025, of which $ 12,551 was included in "Other long-term obligations" and $ 23 was included in "Accrued compensation and other benefits" on the Company's condensed consolidated balance sheets. The deferred compensation liability was $ 11,470 as of December 31, 2024, of which $ 11,449 was included in "Other long-term obligations" and $ 21 was included in "Accrued compensation and other benefits" on the Company’s consolidated balance sheets. The related assets of the irrevocable trust funds (also known as "rabbi trust funds") were $ 12,566 as of September 30, 2025, of which $ 12,543 was included in "Other non-current assets" and $ 23 was included in "Other current assets" on the Company's condensed consolidated balance sheet. The rabbi trust funds were $ 11,465 as of December 31, 2024 and were included in "Other non-current assets" on the Company's consolidated balance sheets. 22 Table of Contents NOTE 15 – COMMITMENTS AND CONTINGENCIES The Company is obligated to make rental payments under non-cancelable operating and finance leases. Aggregate future minimum rental payments required under these leases at September 30, 2025 are disclosed in Note 18, Leases . The Company’s Verona, Missouri facility, while held by a prior owner, Syntex Agribusiness, Inc. (“Syntex”), was designated by the U.S. Environmental Protection Agency (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 Syntex 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 potential liabilities associated with the Superfund site. One of the sellers, in turn, has the benefit of certain contractual indemnification by Syntex in relation to the implementation of the above-described Superfund remedy. In June 2023, in response to a Special Notice Letter received from the EPA in 2022, BCP Ingredients, Inc. ("BCP"), the Company's subsidiary that operates the site, Syntex, EPA, and the State of Missouri entered into an Administrative Settlement Agreement and Order on Consent (“ASAOC”) for a focused remedial investigation/feasibility study ("RI/FS") under which (a) BCP will conduct a source investigation of potential source(s) of releases of 1,4-dioxane and chlorobenzene at a portion of the site and (b) BCP and Syntex will complete a RI/FS to determine a potential remedy, if any is required. Activities under the ASAOC are underway and are expected to continue for some period of time. Separately, in June 2022, the EPA conducted an inspection of BCP’s Verona, Missouri facility (“2022 EPA Inspection”) which was followed by BCP entering into an Administrative Order for Compliance on Consent (“AOC”) with the EPA in relation to its risk management program at the Verona facility. Further, in January 2023, BCP entered into an Amended AOC with the EPA whereby the parties agreed to the extension of certain timelines. BCP timely completed all requirements under the Amended AOC. In November 2023, BCP received a notice from the Environment and Natural Resources Division of the U.S Department of Justice (“DOJ”) primarily related to the 2022 EPA Inspection, which extended the opportunity to discuss alleged violations of Sections 112(r)(7) of the Clean Air Act and regulations in 40 C.F.R. Part 68, commonly known as the Risk Management Plan Rule (“RMP Rule”). BCP participated in such discussions during 2024, and in December 2024, BCP reached a settlement with the EPA and DOJ to resolve these alleged violations. Pursuant to the settlement, which was entered into on January 31, 2025, BCP agreed to: (a) pay a $ 300 civil penalty; (b) complete a new scrubber system project; and (c) spend $ 350 to implement projects benefiting the surrounding community, such as emergency equipment for the local fire department and two vehicles to be used as mobile health clinics. The amount associated with this settlement was consistent with the amount previously accrued as a loss contingency. BCP has completed most of its obligations under this settlement and will continue to take steps to timely complete any remaining items. In addition to the above, from time to time, the Company is a party to various legal proceedings, litigation, claims and assessments. While it is not possible to predict the ultimate disposition of each of these matters, 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, liquidity or cash flows. NOTE 16 – 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 September 30, 2025 and December 31, 2024 does not differ materially from the aggregate carrying values of its financial instruments recorded in the accompanying condensed 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 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. 23 Table of Contents The following fair value hierarchy is used to classify assets and liabilities and the table below presents the carrying amounts and the estimated fair values of the Company's financial assets and liabilities measured on a recurring basis as defined by ASC 820, "Fair Value Measurement." • Level 1 - Inputs are quoted prices in active markets that are accessible at the measurement date for identical assets or liabilities. • Level 2 - Inputs include observable inputs other than quoted prices in active markets. • Level 3 - Inputs are unobservable inputs for which there is little or no market data available. Carrying Amount Fair Value Measurements Level 1 Level 2 Level 3 September 30, 2025 Assets: Money market funds (1) $ 1,446 $ 1,446 $ — $ — Certificates of deposit with maturities of three months or less (2) 18,781 — 18,781 — Rabbi trust funds - current (3) 23 23 — — Rabbi trust funds - non-current (3) 12,543 12,543 — — December 31, 2024 Assets: Money market funds (1) $ 1,040 $ 1,040 $ — $ — Rabbi trust funds - non-current (3) 11,465 11,465 — — (1) Money market funds are categorized as cash equivalents. (2) Certificates of deposit with original maturities of three months or less are categorized as cash equivalents. Due to the short-term nature of the instruments, the Company has determined the cost approximates fair value. (3) Rabbi trust funds - current and Rabbi trust funds - non-current are included in "Other current assets" and "Other non-current assets" on the consolidated balance sheets, respectively. The Company’s financial instruments also include 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. The carrying value of debt approximates fair value based upon prices of identical or similar instruments in the marketplace, which are considered Level 2 inputs. NOTE 17 – RELATED PARTY TRANSACTIONS The Company provides services under 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 condensed consolidated statements of earnings. Payments for the services the Company provided amounted to $ 1,108 and $ 3,447 for the three and nine months ended September 30, 2025, respectively, and $ 1,109 and $ 3,321 for the three and nine months ended September 30, 2024, respectively. The raw materials purchased and subsequently sold amounted to $ 9,399 and $ 30,145 for the three and nine months ended September 30, 2025, respectively, and $ 7,616 and $ 21,249 for the three and nine months ended September 30, 2024, 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 $ 7,620 and $ 24,521 during the three and nine months ended September 30, 2025, respectively, and $ 5,766 and $ 16,450 for the three and nine months ended September 30, 2024, respectively. At September 30, 2025 and December 31, 2024, the Company had receivables of $ 3,053 and $ 3,893 , respectively, recorded in accounts receivable from St. Gabriel CC Company, LLC for services rendered and raw materials sold. At September 30, 2025 and December 31, 2024, the Company had payables of $ 2,188 and $ 2,831 , respectively, recorded in accounts payable for finished goods received from St. Gabriel CC Company, LLC. The Company had payables in the amount of $ 296 related to non-contractual monies owed to St. Gabriel CC Company, LLC, recorded in accounts payable as of both September 30, 2025 and December 31, 2024. In addition, the Company had receivables in the amount of $ 12 related to non-contractual monies owed from St. Gabriel CC Company, LLC, recorded in other current assets as of September 30, 2025. 24 Table of Contents NOTE 18 – 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 both operating leases and finance leases. The Company elected the practical expedient to combine lease and non-lease components and recognizes the combined amount on the condensed 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 the third quarter of 2025: (1) 1 - 2 years, 5.61 % (2) 3 - 4 years, 6.20 % (3) 5 - 9 years, 6.54 % and (4) 10 + years, 7.26 %. Right of use assets and lease liabilities at September 30, 2025 and December 31, 2024 are summarized as follows: Right of use assets September 30, 2025 December 31, 2024 Operating leases $ 15,916 $ 15,320 Finance leases 1,573 1,730 Total $ 17,489 $ 17,050 Lease liabilities - current September 30, 2025 December 31, 2024 Operating leases $ 3,943 $ 3,134 Finance leases 202 194 Total $ 4,145 $ 3,328 Lease liabilities - non-current September 30, 2025 December 31, 2024 Operating leases $ 12,257 $ 12,967 Finance leases 1,596 1,749 Total $ 13,853 $ 14,716 25 Table of Contents For the three and nine months ended September 30, 2025 and 2024, the Company's total lease costs were as follows, which included amounts recognized in earnings, amounts capitalized on the balance sheets, and the cash flows arising from lease transactions: Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Lease Cost Operating lease cost $ 1,407 $ 1,365 $ 4,100 $ 4,057 Finance lease cost Amortization of ROU asset 53 59 157 179 Interest on lease liabilities 23 25 71 79 Total finance lease 76 84 228 258 Total lease cost $ 1,483 $ 1,449 $ 4,328 $ 4,315 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 1,400 $ 1,362 $ 4,142 $ 4,056 Operating cash flows from finance leases 23 25 71 79 Financing cash flows from finance leases 48 58 145 169 $ 1,471 $ 1,445 $ 4,358 $ 4,304 Right-of-use assets obtained in exchange for new operating lease liabilities, net of right-of-use assets disposed $ 1,397 $ 61 $ 3,254 $ 1,225 Weighted-average remaining lease term - operating leases 5.71 years 9.18 years 5.71 years 9.18 years Weighted-average remaining lease term - finance leases 7.61 years 8.62 years 7.61 years 8.62 years Weighted-average discount rate - operating leases 6.6 % 7.6 % 6.6 % 7.6 % Weighted-average discount rate - finance leases 5.1 % 5.1 % 5.1 % 5.1 % Rent expense charged to operations under operating lease agreements for the three and nine months ended September 30, 2025 aggregated to approximately $ 1,407 and $ 4,100 , respectively, and $ 1,365 and $ 4,057 for the three and nine months ended September 30, 2024, respectively. Aggregate future minimum rental payments required under all non-cancelable operating and finance leases at September 30, 2025 are as follows: Year October 1, 2025 to December 31, 2025 $ 1,444 2026 5,211 2027 3,767 2028 3,001 2029 2,533 2030 2,078 Thereafter 4,737 Total minimum lease payments $ 22,771 26 Table of Contents