What changed in this filing

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Item 1. Business

2022-02-24 compared with 2021-02-19 · 32 added, 21 removed, 180 unchanged (23% of the section changed)

8 unchanged sentences

This realignment has been retrospectively applied.

Sales and production of products outside of our reportable segments and other minor business activities are included in "Other and Unallocated" and applied retroactively to 2019 and 2018.

Sales and production of products outside of our reportable segments and other minor business activities are included in "Other and Unallocated" and applied retroactively to 2019.

There was no change to the Consolidated Financial Statements as a result of the change to the reportable segments.

70 unchanged sentences

Such raw materials include materials derived from petrochemicals, minerals, metals, agricultural commodities and other readily available commodities and are subject to price fluctuations due to market conditions.

We are not experiencing any current difficulties in procuring such materials and do not anticipate any such problems;

however, we cannot assure that will always be the case.

In 2021, we experienced some difficulties in procuring certain materials due to the challenging macroeconomic environment with global supply chain disruptions because of COVID-19 pandemic.

However, we were able to secure most materials from our suppliers and will continue to ensure a sustainable supply chain to support our growing business operations.

Intellectual Property

6 unchanged sentences

We believe that our sales and competitive position are dependent primarily upon the quality of our products, technical sales efforts and market conditions, rather than on patent protection.

While in general, the businesses of our segments are not seasonal to any material extent, the plant nutrition business within Specialty Products is a seasonal business with the vast majority of sales occurring in the first half of the year, based on the planning season in the northern hemisphere.

At December 31, 2021, we had a total backlog of $65,661 (comprised of $45,393 for the HNH segment;

4 unchanged sentences

It has generally been our policy and practice to maintain an inventory of finished products and/or component materials for our segments to enable us to ship products within two months after receipt of a product order.

All orders in the current backlog are expected to be filled in the 2021 fiscal year.

This has been more difficult in 2021 given the macroeconomic and supply chain challenges we have been experiencing, but all orders in the current backlog are expected to be filled in the 2022 fiscal year.

Our competitors include many large and small companies, some of which have greater financial, research and development, production and other resources than us.

9 unchanged sentences

Therefore, we are unable to assess the size of all of our competitors or where we rank in comparison to such privately-held competitors.

In the Specialty Products segment, our products face competition from alternative sterilizing technologies and products.

Competition in this marketplace is based primarily on medical device compositions, product performance, customer support, quality, service and price.

Our competition in this market includes sterilization companies, a number of which are privately-held.

In the Specialty Products segment, we face competition from alternative sterilizing technologies and products for our performance gases business.

Competition in this marketplace is based primarily on service, reliability, quality, and price.

Our competition in this market varies globally, many of which are regional privately-held companies.

In our plant nutrition business, competition is

based primarily on product performance, customer support, quality, and price.

The development of new and improved products is also important to our ability to compete.

Our competition in this market is primarily regional privately-held companies.

Research & Development

6 unchanged sentences

In 2021, we invested $20,544 on projects expected to provide favorable returns on investment, including expanded capacity in key product lines in the HNH segment.

In addition, we invested $3,138 for environmental, health, safety, and security upgrades to our facilities, $2,330 in automation projects that improved quality and efficiency of our operations, and $2,222 in research and development projects.

In 2020, we invested $16,856 on projects expected to provide favorable returns on investment, including expanded capacity in key product lines in the HNH segment.

In addition, we invested $3,297 for environmental, health, safety, and security upgrades to our facilities as well as $3,252 in automation projects that improved safety and quality of our operations.

1 unchanged sentence

In addition, we invested $3,739 for environmental, health, safety, and security upgrades to our facilities.

In 2018, we invested $5,662 to expand capacity in key product lines in the HNH segment along with upgrading automation systems in our manufacturing sites to drive efficiencies.

In addition, we invested $3,137 for environmental, health, safety, and security upgrades to our facilities.

Capital expenditures are projected to range from $30,000 to $40,000 for 2021.

Capital expenditures are projected to range from $30,000 to $40,000 for 2022, including our continued efforts to invest in energy and water saving projects, while exploring additional renewable energy opportunities in support of the company's sustainability efforts.

Environmental / Regulatory Matters

9 unchanged sentences

While acknowledging the necessity of maintaining the critical uses of ethylene oxide, based on the range of unit risk provided in this qualitative assessment, the EPA has stated that there should be further mitigation measures implemented which will likely require some label changes.

Several mitigation measures are under consideration and the EPA anticipates issuance of a Proposed Interim Decision (PID) later this year.

Several mitigation measures are under consideration and the EPA anticipates issuance of a Proposed Interim Decision (PID) in 2022.

We believe that EPA intends to reregister ethylene oxide for the uses stated above with the mitigation measures potentially impacting certain users, including Balchem and its customers.

6 unchanged sentences

In 2013, the EPA initiated a new registration review of propylene oxide, in line with and part of the registration review scheduled for a large number of other pesticides.

A Final Work Plan was issued in March 2014, and

EPA anticipated that this review process would take approximately seven years.

A Final Work Plan was issued in March 2014, and EPA anticipated that this review process would take approximately seven years.

In October 2020, the EPA issued both the Proposed Interim Registration Review Decision (PID) and Draft Risk Assessment (DRA) for Propylene Oxide (PPO).

Based on these documents we believe that the use of propylene oxide to treat nuts and spices will continue to be permitted with minimal changes to the current approved label and, to date, it appears that significant additional mitigation measures will not be required.

In July 2021, the EPA issued the Interim Registration Review Decision.

Based on these documents, the use of propylene oxide to treat nuts and spices will continue to be permitted with minimal changes to the current approved level.

We expect to submit those changes and the EPA to review and approve them, in the coming months.

Our facility in Verona, Missouri, while held by a prior owner, was designated by the EPA as a Superfund site and placed on the National Priorities List in 1983, because of dioxin contamination on portions of the site.

3 unchanged sentences

In September 2020, BCP Ingredients, Inc.

(“BCP”), the Company subsidiary that operates the site received a General Notice Letter from the EPA regarding BCP’s potential liability for 1,4 dioxane contamination at the site.

We currently believe that the 1,4 dioxane contamination is associated with the former owner’s operations and have engaged experts to study site conditions and hydrogeology in connection with preparing our response to the notice.

(“BCP”), the Company subsidiary that operates the site received a General Notice Letter from the EPA regarding BCP’s potential liability for contamination at the site and, in February 2022, received a Special Notice Letter from EPA for the performance of a focused remedial investigation/feasibility study at the site with regard to the presence of certain contaminants, including 1,4 dioxane,.

We have engaged experts to study site conditions and hydrogeology in connection with preparing our response to the notices.

In connection with normal operations at our plant facilities, we are required to maintain environmental and other permits, including those relating to the ethylene oxide operations.

8 unchanged sentences

As of December 31, 2021, we employed approximately 1,317 full-time employees worldwide, with approximately 17% covered by collective bargaining agreements.

We believe that we have been successful in attracting skilled and experienced personnel in a competitive environment and that our human capital resources are adequate to perform all business functions.

Although we are facing challenging labor markets, we believe that we have been successful in attracting skilled and experienced personnel in a competitive environment and that our human capital resources are adequate to perform all business functions.

In addition, we continue to enhance technology in order to optimize productivity and performance.

Health and Safety

4 unchanged sentences

process safety, personal safety, industrial hygiene, transportation safety and environmental safety, and focuses on driving higher ownership and engagement from employees and contractors.

In response to the COVID-19 pandemic, we effectively deployed our Crisis Management Plan and activated our Crisis Management Team (CMT), to manage the day-to-day activities and make timely decisions related to the safety of our employees, customers, and the communities in which we operate.

customers, and the communities in which we operate.

We implemented significant changes which comply with government orders and Centers for Disease Control and Prevention (CDC) guidelines.

6 unchanged sentences

Training and Well-Being Programs

We strive to develop employee skills and knowledge, which includes training for job-specific technical knowledge, regulatory requirements, and company policies, such as the Company's Code of Conduct, anti-harassment and discrimination, foreign corrupt practices, antitrust, and various other compliance topics.

We strive to develop employee skills and knowledge, which includes training for job-specific technical knowledge, regulatory requirements, and company policies, through our internal learning and development platform.

The topics of trainings include the Company's Code of Conduct, anti-harassment and discrimination, foreign corrupt practices, antitrust, cyber security, and various other compliance subjects.

Our sponsored employee Continuing Learning program offers a broad base of assistance for employees, including learning and development courses.

We also deployed unconscious bias and inclusive leadership training to our management team.

Employees have access to healthy lifestyle discounts through our Wellness Center, as well as debt, legal, and financial counseling.

11 unchanged sentences

Our telephone number is (845) 326-5600 and our Internet website address is www.balchem.com.

All reports we file with the SEC such as our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, and amendments to such reports, are available free of charge via EDGAR through the SEC's website at www.sec.gov.

We make available through our website, free of charge, our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, and amendments to such reports, as soon as reasonably practicable after they have been electronically filed with the Securities and Exchange Commission (the "SEC").

Such reports are available via a link from the Investor Relations page on our website to a list of our reports on the SEC’s EDGAR website.

The address of the SEC's website is www.sec.gov.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business