Balchem Corp. bucks trend in poor economy

Sales brisk, profits rising

George Spohr

Balchem Corp. CEO Dino Rossi says the key to his company’s success is knowing the business.

NEW HAMPTON — In a recession, business doesn't get much better than this.

Balchem Corp., one of the few publicly traded companies headquartered in Orange County, reported fourth-quarter 2008 results Tuesday that show strong vital signs.

Quarterly sales were up from $53.7 million to $54.1 million. Profit rose from $12.4 million to $13.4 million. Net earnings increased from $4.2 million to $4.9 million. President and CEO Dino Rossi credited "a lot of hard work," as well as some basic business principles that are proving sound:

The company's acquisition of competitors has helped keep costs down by leveraging spending power, such as for purchasing.

While the company's making significantly more money, it's watching the expense side of its balance sheet. That's allowed the company to keep its payroll steady — even growing slightly — at 330 employees.

A diverse portfolio means that when one segment's sales fall, it has two others that pick up the slack.

"We've become a little bit of a mini conglomerate," Rossi said. "We managed to be able to not depend on one particular industry. We've done some acquisitions that are definitely paying some benefit."

Balchem consists of three business segments: ARC Specialty Products; Food, Pharma and Nutrition; and Animal Nutrition and Health. While annual sales in the Food, Pharma and Nutrition segment fell slightly for the year, the other two segments racked up double-digit sales increases. For the year, the company reported Tuesday sales of $232 million, up from $176.2 million in 2007. Its profit rose to $52.6 million, up from $46.9 million. Net earnings were $19.1 million, up from $16.1 million.

With an eye toward 2009, the company will continue to monitor the markets, redirect its research and development efforts as necessary, and hold the line on spending, Rossi said.

Asked how his company is able to remain profitable despite a suffocating economy, Rossi said simply, "The key is knowing your business."

gspohr@th-record.com