What changed in this filing

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Item 1. Business

2023-02-24 compared with 2022-02-24 · 78 added, 86 removed, 126 unchanged (57% of the section changed)

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We develop, manufacture, distribute and market specialty performance ingredients and products for the nutritional, food, pharmaceutical, animal health, medical device sterilization, plant nutrition and industrial markets.

Previously, our four reportable segments were:

Human Nutrition and Health, Animal Nutrition and Health, Specialty Products, and Industrial Products.

However, effective in the first quarter of 2020, in order to align with our strategic focus on health and nutrition, allocation of resources, and evaluation of operating performance, and given the 2019 reduction in portfolio scale of Industrial Products, we have revised our reporting segment structure to three reportable segments:

Our three reportable segments are strategic businesses that offer products and services to different markets:

Human Nutrition and Health, Animal Nutrition and Health, and Specialty Products.

These reportable segments are strategic businesses that offer products and services to different markets.

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.

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

We expect that the new reportable segment structure will provide investors greater understanding of and alignment with our strategic focus.

In order to ensure appropriate transparency and visibility into the financial performance of the Company, sufficient detail will continue to be provided relative to Other and Unallocated, including material contributions from oil and gas and other industrial market activities.

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

We sell our products through our own sales force, independent distributors and sales agents.

Financial information concerning our business, business segments and geographic information appears in Management’s Discussion and Analysis of Financial Condition and Results of Operations under Item 7 below and in the Notes to our Consolidated Financial Statements included under Item 8 below, which information is incorporated herein by reference.

Human Nutrition & Health

The Human Nutrition & Health ("HNH") segment provides human grade choline nutrients and mineral amino acid chelated products through this segment for nutrition and health applications.

Human Nutrition and Health

The Human Nutrition and Health ("HNH") segment provides human grade choline nutrients and mineral amino acid chelated products through this segment for nutrition and health applications.

Choline is recognized to play a key role in the development and structural integrity of brain cell membranes in infants, processing dietary fat, reproductive development and neural functions, such as memory and muscle function.

The Company's mineral amino acid chelates, specialized mineral salts, and mineral complexes are used as raw materials for inclusion in premier human nutrition products;

Proprietary technology has been combined to create an organic molecule in a form the body can readily assimilate.

proprietary technologies have been combined to create an organic molecule in a form the body can readily assimilate.

Sales growth for human nutrition applications is reliant on differentiation from lower-cost competitive products through scientific data, intellectual property and customers' appreciation of brand value.

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The Company has expertise in trends analysis and product development.

When combined with its strong manufacturing capabilities in customized spray dried and emulsified powders, extrusion and agglomeration, blended lipid systems, liquid flavor delivery systems, juice and dairy bases, chocolate systems, as well as ice cream bases and variegates, the Company is a one-stop solutions provider for beverage and dairy product development needs.

With its strong manufacturing capabilities in customized spray dried and emulsified powders, extrusion and agglomeration, blended lipid systems, liquid flavor delivery systems, juice and dairy bases, chocolate systems, ice cream bases and variegates, the Company is a one-stop solutions provider for beverage and dairy product development needs.

Additionally, this segment provides microencapsulation solutions to a variety of applications in food, pharmaceutical and nutritional ingredients to enhance performance of nutritional fortification, processing, mixing, and packaging applications and shelf-life.

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The Company also creates cereal systems for ready-to-eat cereals, grain-based snacks, and cereal based ingredients.

Animal Nutrition & Health

The Company’s Animal Nutrition & Health ("ANH") segment provides nutritional products derived from its microencapsulation and chelation technologies in addition to basic choline chloride.

For ruminant animals, the Company’s microencapsulated products boost health and milk production, delivering nutrient supplements that are biologically available, providing required nutritional levels.

Through the Kappa and Bergstrom acquisitions, respectively, this segment recently began manufacturing specialty vitamin K2, which is a fast-growing specialty vitamin that plays a crucial role in the human body for bone health, heart health and immunity, and methylsulfonylmethane ("MSM"), which is a widely used nutritional ingredient that provides benefits for joint health, sports nutrition, skin and beauty, and healthy aging.

Animal Nutrition and Health

The Company’s Animal Nutrition and Health ("ANH") segment provides nutritional products derived from its microencapsulation and chelation technologies in addition to the essential nutrient choline chloride.

For ruminant animals, the Company’s microencapsulated products boost health and milk production by delivering nutrient supplements that are biologically available, providing required nutritional levels.

The Company’s proprietary chelation technology provides enhanced nutrient absorption for various species of production and companion animals and is marketed for use in animal feed throughout the world.

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In poultry, choline deficiency can result in reduced growth rates and perosis in young birds, while in swine production choline is a necessary and required component of gestating and lactating sow diets for both liver health and prevention of leg deformity.

Through the Bergstrom acquisition, this segment recently began manufacturing methylsulfonylmethane ("MSM"), which is a widely used nutritional ingredient that provides benefits for pet health.

Sales of value-added encapsulated products are highly dependent on overall industry economics as well as the Company's ability to leverage the results of university and field research on the animal health and production benefits of our products.

Management believes that success in the commodity-oriented basic choline chloride marketplace is highly dependent on the Company’s ability to maintain its strong reputation for excellent product quality and customer service.

Management believes that success in the commodity-oriented choline chloride marketplace is highly dependent on the Company’s ability to maintain its strong reputation for excellent product quality and customer service.

The Company continues to drive production efficiencies in order to maintain its competitive-cost position to effectively compete in a competitive global marketplace.

Specialty Products

Ethylene oxide, at the 100% level and blended with carbon dioxide, is sold as a sterilant gas, primarily for use in the health care industry.

The Company re-packages and distributes a number of performance gases and chemicals for various uses by its customers, notably ethylene oxide, propylene oxide, and ammonia.

Ethylene oxide is sold as a sterilant gas, primarily for use in the health care industry.

It is used to sterilize a wide range of medical devices because of its versatility and effectiveness in treating hard or soft surfaces, composites, metals, tubing and different types of plastics without negatively impacting the performance of the device being sterilized.

The Company’s 100% ethylene oxide product and blends are distributed worldwide in specially designed, reusable and recyclable drum and cylinder packaging, to assure compliance with safety, quality and environmental standards as outlined by the applicable regulatory agencies in the countries our products are shipped to.

The Company’s inventory of these specially built drums and cylinders, along with its five filling facilities, represents a significant capital investment.

Contract sterilizers and medical device manufacturers are principal customers for this product.

The Company also sells single use canisters with 100% ethylene oxide for use in sterilizing re-usable devices typically processed in autoclave units in hospitals.

As a fumigant, ethylene oxide blends are highly effective in killing bacteria, fungi, and insects in spices and other seasoning materials.

The Company also distributes a number of other gases for various uses, most notably propylene oxide and ammonia.

Propylene oxide is marketed and sold in the U.S.

as a fumigant to aid in the control of insects and microbiological spoilage;

and to reduce bacterial and mold contamination in certain shell and processed nut meats, processed spices, cacao beans, cocoa powder, raisins, figs and prunes.

The Company distributes its propylene oxide product in the U.S.

primarily in recyclable, single-walled, carbon steel cylinders according to standards outlined by the EPA and the DOT.

Propylene oxide is also sold worldwide to customers in approved reusable and recyclable drum and cylinder packaging for various chemical synthesis applications, such as increasing paint durability and manufacturing specialty starches and textile coatings.

Ammonia is used primarily as a refrigerant, and also for heat treatment of metals and various chemical synthesis applications, and is distributed in reusable and recyclable drum and cylinder drum and cylinder packaging approved for use in the countries these products are shipped to.

The Company's inventory of cylinders for these products also represents a significant capital investment.

The Company’s micronutrient agricultural nutrition business sells chelated minerals primarily into high value crops.

Propylene oxide is marketed and sold as a fumigant to aid in the control of insects and microbiological spoilage;

and to reduce bacterial and mold contamination in certain shelled and processed nut meats, processed spices, cacao beans, cocoa powder, raisins, figs and prunes, and for various chemical synthesis applications, such as increasing paint durability and manufacturing specialty starches and textile coatings.

Ammonia is used primarily as a refrigerant, and also for heat treatment of metals and various chemical synthesis applications, and is distributed in reusable and recyclable drum and cylinder packaging approved for use in the countries these products are shipped to.

The Company’s performance gases and chemicals are distributed worldwide in specially designed, reusable and recyclable drum and cylinder packaging, to assure compliance with safety, quality and environmental standards as outlined by the applicable regulatory agencies in the countries our products are shipped to.

The Company’s inventory of these specially built drums and cylinders, along with its five filling facilities, represents a significant capital investment.

The Company also sells single use canisters for use in sterilizing re-usable devices typically processed in autoclave units in hospitals.

The Company’s micronutrient agricultural nutrition business sells chelated minerals primarily to producers of high value crops.

The Company has a unique and patented two-step approach to solving mineral deficiency in plants to optimize health, yield and shelf-life.

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As a result, the farmer/grower gets healthier crops that are more resistant to disease and pests, larger yields and healthier food for the consumer with extended shelf life for produce being shipped long distances.

On December 13, 2019, we completed an acquisition of Zumbro River Brand, Inc.

("Zumbro"), headquartered in Albert Lea, Minnesota.

We made payments of $52,403 on the acquisition date, amounting to $47,058 to the former shareholders and $5,345 to Zumbro's lenders to pay Zumbro debt.

Considering the cash acquired of $686, net payments made to the former shareholders equaled $46,372.

In May 2020, we received an adjustment for working capital acquired of $561.

The acquisition was primarily financed through the Company's Credit Agreement (Refer to Note 8, "Revolving Loan").

Zumbro specializes in developing, marketing, and manufacturing agglomerated and extruded products for the food and beverage industry and is a market leader in high protein and specialty extruded snacks, cereals, and crisps, marketed under the brands Z-Crisps ® , Whey-Os ™ , Whey-Vs ™ , and Z-Texx Complete ™ .

Zumbro is integrated within Balchem's HNH Segment.

On May 27, 2019, we acquired 100 percent of the outstanding common shares of Chemogas Holding NV, a privately held specialty gases company headquartered in Grimbergen, Belgium ("Chemogas").

We made payments of approximately €99,503 (translated to $111,324) on the acquisition date, amounting to approximately €88,579 (translated to $99,102) to the former shareholders and approximately €10,924 (translated to $12,222) to Chemogas' lender to pay off all Chemogas bank debt.

Considering the cash acquired of €3,943 (translated to $4,412), net payments made to the former shareholders were €84,636 (translated to $94,690).

The acquisition was primarily financed through our Credit Agreement (Refer to Note 8, "Revolving Loan").

Chemogas, through its subsidiary companies, has been a leader in the packaging and distribution of a wide variety of specialty gases, most notably ethylene oxide, primarily in the European and Asian markets, for medical device sterilization.

Through its operational and logistical excellence, Chemogas supports its customers' needs across more than 70 countries.

With the acquisition, we significantly expand our geographic presence in the packaged ethylene oxide market, enabling us to offer

worldwide service and support to its medical device sterilization customers within the Specialty Products segment.

The Chemogas sites in Europe and Asia, along with Balchem's sites in the United States form a global network of facilities.

On August 30, 2022, our wholly-owned subsidiary Albion Laboratories, Inc.

("Albion") entered into a Stock Purchase Agreement, and closed on such transaction with Cardinal Associates Inc.

("Cardinal"), a corporation organized under the laws of the State of Washington, pursuant to which Albion acquired Cardinal and its Bergstrom Nutrition business (collectively, "Bergstrom").

Bergstrom is a leading science-based manufacturer of methylsulfonylmethane ("MSM"), based in Vancouver, Washington.

Details related to the Bergstrom acquisition are disclosed in Note 2, Significant Acquisitions.

The acquisition provides a synergistic scientific advantage in the Company's key strategic therapeutic focus areas such as longevity and performance and is a strong fit with the Company's specialty, science-backed mineral products, which should ultimately lead to growth for the Company's portfolios within the Human Nutrition and Health and Animal Nutrition and Health segments.

On June 21, 2022, we and our wholly-owned subsidiary, Balchem B.V., completed the acquisition of Kechu BidCo AS and its subsidiary companies, including Kappa Bioscience AS, a leading science-based manufacturer of specialty vitamin K2 for the human nutrition industry, headquartered in Oslo, Norway (all acquired companies collectively referred to as “Kappa”).

Details related to the Kappa acquisition are disclosed in Note 2, Significant Acquisitions.

The acquisition strengthens our scientific and technical expertise, geographic reach, and marketplace leadership, which should ultimately lead to accelerated growth for the Company's portfolios within the Human Nutrition and Health segment.

Raw Materials

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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.

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.

In 2022, we continued to experience some difficulties in procuring certain materials due to the challenging macroeconomic environment with global supply chain disruptions because of the COVID-19 pandemic as well as significant inflation on raw materials.

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

Intellectual Property

We currently hold 109 patents in the United States and overseas and use certain trade-names and trademarks.

We currently hold over 150 patents in the United States and overseas and use certain trade-names and trademarks.

We also use know-how, trade secrets, formulae, and manufacturing techniques that assist in maintaining competitive positions of certain of our products.

Formulae and know-how are of particular importance in the manufacture of a number of our proprietary products.

We believe that certain of our patents, in the aggregate, are advantageous to our business.

However, it is believed that no single patent or related group of patents is currently so material to us that the expiration or termination of any single patent or group of patents would materially affect our business.

patents expire between 2022 and 2036.

We believe that our patents, in the aggregate, are advantageous to our business.

However, we do not believe we are materially dependent on any particular patent or any particular group of patents.

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.

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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.

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.

This was more difficult in 2021 given the macroeconomic and supply chain challenges we experienced, but those challenges eased in the second half of 2022 and all orders in the current backlog are expected to be filled in the 2023 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.

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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, 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.

In the Specialty Products segment, competition within Performance Gases 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.

We also face competition from alternate technologies or substitute products.

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

Research and Development

During the years ended December 31, 2022, 2021 and 2020, we incurred research and development expenses of approximately $12,191, $13,524, and $10,332, respectively, on Company-sponsored research and development for new products, improvements to existing products, and manufacturing processes.

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In 2022, we invested $29,759 on projects expected to provide favorable returns on investment, including expanded capacity in key product lines in the HNH segment.

In addition, we invested $6,020 for environmental, health, safety, and security upgrades to our facilities and $3,024 in automation projects that improved quality and efficiency of our operations.

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.

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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.

In 2019, we invested $6,437 to expand capacity in key product lines in the HNH segment and to invest in several other large projects including a new quality and research and development lab.

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

Capital expenditures are projected to range from $40,000 to $50,000 for 2023, 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

Environmental and Regulatory Matters

The Federal Insecticide, Fungicide and Rodenticide Act (“FIFRA”), a health and safety statute, requires that certain products within our Specialty Products segment must be registered with the EPA because they are considered pesticides.

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We hold EPA registrations permitting us to sell ethylene oxide as a medical device sterilant and spice fumigant and propylene oxide as a fumigant of nuts and spices.

In April 2008, the EPA issued a RED (“Reregistration Eligibility Decision”) for ethylene oxide which permitted the continued use of ethylene oxide “to sterilize medical or laboratory equipment, pharmaceuticals, and aseptic packaging, or to reduce microbial load on musical instruments, cosmetics, whole and ground spices and other seasoning materials and artifacts, archival material or library objects”.

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

In April 2008, the EPA issued a RED (“Re-registration Eligibility Decision”) for ethylene oxide which permitted the continued use of ethylene oxide “to sterilize medical or laboratory equipment, pharmaceuticals, and aseptic packaging, or to reduce microbial load on musical instruments, cosmetics, whole and ground spices and other seasoning materials and artifacts, archival material or library objects”.

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

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

In December 2016, the EPA issued its Integrated Risk Information System (“IRIS”) assessment of ethylene oxide (the "IRIS Assessment"), another aspect of EPA’s safety review of ethylene oxide.

In December 2016, the EPA issued its Integrated Risk Information System (“IRIS”) assessment of ethylene oxide (the "IRIS Assessment"), another aspect of the EPA’s safety review of ethylene oxide.

In November 2020, the EPA issued a Draft Human Health Risk Assessment for Ethylene Oxide (“Draft HHRA”).

In this Draft HHRA, the EPA presented multiple perspectives on risk extrapolation, including the IRIS Assessment.

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) 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.

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 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 is expected to issue a Proposed Interim Decision in early 2023.

We believe that the EPA intends to reregister ethylene oxide for the sterilization of medical or laboratory equipment, pharmaceuticals, and aseptic packaging, with the mitigation measures potentially impacting certain users, including Balchem and its customers.

The product, when used as a sterilant for certain medical devices, has no known equally effective substitute.

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Similarly, the EPA issued a RED for propylene oxide in August 2006.

At that time, the EPA “determined that products containing the active ingredient PPO [propylene oxide] are eligible for reregistration provided that…risk mitigation measures…are adopted.” Our product label was amended as required to reflect these mitigation measures and also to show that propylene oxide has been reclassified as a restricted use pesticide.

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.

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

At that time, the EPA “determined that products containing the active ingredient propylene oxide ("PPO") are eligible for re-registration provided that…risk mitigation measures…are adopted.” Our product label was amended as required to reflect these mitigation measures and also to show that propylene oxide has been reclassified as a restricted use pesticide.

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

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

In October 2020, the EPA issued both the Proposed Interim Registration Review Decision and Draft Risk Assessment for propylene oxide.

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.

We submitted those changes and expect the EPA to review and approve them in the coming months during 2023.

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.

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We are indemnified by the sellers under our May 2001 asset purchase agreement covering our acquisition of the Verona, Missouri facility for potential liabilities associated with the Superfund site, and one of the sellers, in turn, has the benefit of certain contractual indemnification by the prior owner that executed the above-described Superfund remedy.

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 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.

In February 2022, BCP Ingredients, Inc.

(“BCP”), the Company subsidiary that operates the site, received Special Notice Letter from EPA for the performance of a focused remedial investigation/feasibility study (“RI/FS”) at the site with regard to the presence of certain contaminants, including 1,4 dioxane.

BCP, along with the prior owner of the Verona facility submitted a joint response to the notice in November 2022.

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

From time to time, our manufacturing sites may be subject to inspections by the EPA and other agencies.

To the extent any consent orders or other agreements are entered into as a result of findings from such inspections, the Company is committed to ensuring compliance with such orders or agreements.

We believe we are in compliance in all material respects with federal, state, local and international provisions that have been enacted or adopted regulating the discharge of materials into the environment or otherwise relating to the protection of the environment.

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As of December 31, 2022, we employed approximately 1,340 full-time employees worldwide, with approximately 17% covered by collective bargaining agreements.

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

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.

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Protecting the workplace environment and the health and safety of our employees, contractors, visitors, and neighbors is our top priority.

Our recordable injury rate, which was defined by recordable injuries per 200,000 hours worked, was 0.99 in 2021.

Our recordable injury rate, which was defined by recordable injuries per 200,000 hours worked, was 1.17 and 0.99 in 2022 and 2021, respectively.

We continually upgrade our facilities to reduce risks and establish procedures with appropriate personnel protection for the safety of our employees.

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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.

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

These changes include instituting travel restrictions, a mandatory work from home policy for all of our office employees, and additional safety measures for all of our manufacturing and research and development employees.

Diversity and Inclusion

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In 2022, our total workforce consisted of 75% male and 25% female among all employees and 50% male and 50% female when excluding supply chain and operations functions.

In 2021, our total workforce consisted of 76% male and 24% female among all employees and 50% male and 50% female when excluding supply chain and operations functions.

With the support of our Board of Directors, we continue to explore additional diversity and inclusion initiatives.

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We also provide generous time off and leave benefits, which are important to help ensure employees can enjoy a healthy balance between work and family time.

For the year ended December 31, 2021, our turnover rate was 13% for salaried employees with an average length of service of over 10 years.

For the year ended December 31, 2022 and 2021, our turnover rate was 15% and 13%, respectively, for salaried employees with an average length of service of over 9 years and 10 years, respectively.

We are continuing to improve employee retention with effective employment engagement efforts, a productive performance review process, and competitive compensation.

Environmental, Social and Governance

We operate as strong stewards of our shareholders, customers, suppliers, employees, and the communities in which we operate.

We are working to make our workforce more inclusive, our business more sustainable, and our communities more engaged by maintaining strong environmental, social and governance (“ESG”) practices.

In 2022, we published our 2021 Sustainability Report, prepared in accordance with the Global Reporting Initiative (“GRI”) Standards:

This report provides detailed information regarding our ESG strategy, focus areas and governance structure.

We are committed to reducing our greenhouse gas emissions by implementing new technologies, improving operational efficiencies, and expanding green energy usages.

In addition, we are committed to reducing our global water use by reducing and recycling water usage and investing new technologies to improve water efficiency.

For more information on our approach to sustainability management, refer to our 2021 Sustainability Report, which is available on our website at https://balchem.com/our-company/corporate-social-responsibility/sustainability.

The information contained on, or that may be accessed through, the Company’s website is not incorporated by reference into, and is not part of, this Annual Report on Form 10-K.

In January 2023, Balchem was named one of America's Most Responsible Companies by Newsweek magazine for the third consecutive year.

This prestigious list, compiled by Newsweek in partnership with Statista Inc., recognizes the most responsible companies in the U.S.

across a variety of industries, and is based on publicly available environmental, social and governance (ESG) data.

We are very proud of our ESG accomplishments to date and are pleased with the recognition by Newsweek.

Available Information

Our headquarters is located at 52 Sunrise Park Road, New Hampton, NY 10958.

Our headquarters is located at 5 Paragon Drive, Montvale, NJ 07645.

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

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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