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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Balchem Corporation | NASDAQ:BCPC | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
2.44 | 1.73% | 143.82 | 132.22 | 158.00 | 145.66 | 141.09 | 141.66 | 142,105 | 22:30:00 |
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þ
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ANNUAL REPORT PURSUANT TO SECTION 13 OR SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the fiscal year ended December 31, 2018
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OR
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from _____ to _____
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Maryland
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13-2578432
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification Number)
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52 Sunrise Park Road, New Hampton, NY 10958
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(Address of principal executive offices) (Zip Code)
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Registrant’s telephone number, including area code: (845) 326-5600
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Securities registered pursuant to Section 12(b) of the Act:
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Title of each class
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Name of each exchange on which registered
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Common Stock, par value $.06-2/3 per share
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Nasdaq Global Market
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Securities registered pursuant to Section 12(g) of the Act: None
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(Check one):
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Large accelerated filer
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Accelerated filer
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Non-accelerated filer
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Smaller reporting company
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Emerging growth company
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Page Numbers
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Item 1.
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Business
(All amounts in thousands, except share and per share data)
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Item 1A.
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Risk Factors
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Item 1B.
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Unresolved Staff Comments
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Item 2.
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Properties
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Site
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Leased/Owned
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Products/Functions
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Corporate Offices
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New Hampton, NY
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Leased
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corporate headquarters
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Middletown, NY
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Leased
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administrative offices
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St. Louis, MO
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Leased (SensoryEffects)
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administrative offices SensoryEffects
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Layton, UT
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Leased (Albion)
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administrative offices Albion
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Manufacturing Facilities
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Verona, MO
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Owned (BCP)
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aqueous and dry choline chloride, animal feed products, human choline nutrients, repackaging for Specialty Products, and warehousing
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Slate Hill, NY
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Owned
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encapsulated products, blending and repackaging for Specialty Products, and warehousing
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Green Pond, SC
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Owned
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repackaging for Specialty Products and warehousing
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Salt Lake City, UT
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Owned
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chelated mineral nutrients and warehousing
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Covington, VA
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Owned
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encapsulated animal feed products and warehousing
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Marano Ticino, Italy
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Owned (Balchem Italia)
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methylamines, metam sodium, animal, human and industrial grade choline, and warehousing
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Bertinoro, Italy
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Owned (Balchem Bioscreen)
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encapsulated and fermented animal feed products
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Sleepy Eye, MN
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Owned (SensoryEffects)
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spray drying of dairy creamers and cocoa blends, and warehousing
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Bridgeton, MO
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Owned (SensoryEffects)
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creamer products, cocoa powders, liquid and solid flavor inclusions, and warehousing
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Marshfield, WI
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Owned (SensoryEffects)
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spray drying of lipid based powders, blending, and warehousing
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Reading, PA
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Owned (SensoryEffects)
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spray drying of human nutritional products and warehousing
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Defiance, OH
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Owned (SensoryEffects)
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spray drying of creamer products, solid flavor inclusions for baking, blending and warehousing
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Lincoln, NE
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Leased (SensoryEffects)
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cereal products and warehousing
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Morrisburg, Canada
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Owned (Balchem LTD)
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dry choline chloride and warehousing
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Roy, UT
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Leased (Albion)
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quality control lab
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Ogden, UT
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Owned (Albion)
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human mineral spray drying and packaging
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Ogden, UT
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Leased (Albion)
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human mineral warehousing
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Ogden, UT
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Leased (Albion)
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Albion liquid product warehousing
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Ogden, UT
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Owned (Albion)
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plant mineral liquid production and packaging
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Ogden, UT
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Owned (Albion)
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raw land adjacent to the AMT manufacturing site
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Whittemore, IA
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Leased (Albion)
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plant and animal spray drying and packaging
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Faribault, MN
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Owned (IFP)
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manufacturing and processing of powdered products for the food and nutrition industries
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Item 3.
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Legal Proceedings
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Item 4.
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Mine Safety Disclosures
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Item 5.
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Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
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(a)
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Market Information.
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(b)
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Record Holders.
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(c)
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Dividends.
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(d)
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Issuer Purchase of Equity Securities
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(e)
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Securities Authorized for Issuance Under Equity Compensation Plans.
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(f)
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Performance Graph.
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Item 6.
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Selected Financial Data
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Year ended December 31,
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2018
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2017
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2016
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2015
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2014
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Statement of Operations Data
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Net sales
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$
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643,679
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$
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594,790
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$
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553,204
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$
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552,492
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$
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541,383
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Earnings before income tax expense
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99,030
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88,488
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82,934
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87,063
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77,052
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Income tax expense
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20,457
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(1,583
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)
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26,962
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27,341
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24,226
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Net earnings
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78,573
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90,071
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55,972
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59,722
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52,826
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Basic net earnings per common share
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$
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2.45
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$
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2.83
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$
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1.78
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$
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1.92
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$
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1.74
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Diluted net earnings per common share
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$
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2.42
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$
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2.79
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$
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1.75
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$
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1.89
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$
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1.69
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At December 31,
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2018
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2017
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2016
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2015
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2014
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Balance Sheet Data
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Total assets
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$
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981,355
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$
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963,636
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$
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948,626
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$
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879,686
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$
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861,531
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Long-term debt (including current portion)
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156,000
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218,964
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280,490
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295,963
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332,500
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Other long-term obligations
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7,372
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5,847
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6,896
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6,683
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5,950
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Total Stockholders' equity
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691,618
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616,881
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521,033
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463,705
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391,898
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Dividends per common share
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$
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0.47
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$
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0.42
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$
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0.38
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$
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0.34
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$
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0.30
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Item 7.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations
(All amounts in thousands, except share and per share data)
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Business Segment Net Sales:
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2018
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2017
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2016
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Human Nutrition & Health
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$
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341,237
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$
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315,796
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$
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297,134
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Animal Nutrition & Health
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175,693
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157,688
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161,119
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Specialty Products
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75,808
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73,355
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70,126
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Industrial Products
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50,941
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47,951
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24,825
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Total
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$
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643,679
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$
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594,790
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$
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553,204
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Business Segment Earnings From Operations:
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2018
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2017
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2016
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Human Nutrition & Health
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$
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48,490
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$
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44,010
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$
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38,156
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Animal Nutrition & Health
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26,673
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22,292
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28,686
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Specialty Products
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25,361
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24,949
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22,862
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Industrial Products
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9,013
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6,413
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1,949
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Transaction and integration costs
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(1,786
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(2,496
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(815
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Indemnification settlement
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—
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2,087
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—
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Total
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$
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107,751
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$
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97,255
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$
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90,838
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•
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In the fourth quarter of 2017, an estimated current tax expense of
$1,389
was recorded for the deemed repatriation under Section 965, net of available foreign tax credits. In August of 2018, the IRS issued proposed regulations that clarified the computation of the deemed repatriation. In the fourth quarter of 2018, the company recorded a reduction to the tax of
$970
related to the regulations, adjustments to foreign tax credit calculations, and the interaction of those calculations with other aspects of the tax code. The total amount recorded for the deemed repatriation tax was
$419
.
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•
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In the fourth quarter of 2017, an estimated deferred tax benefit of
$27,255
was recorded to revalue the company’s net deferred tax liabilities from the 35% previous federal tax rate to the 21% federal tax rate in affect as of January 1, 2018. This was a non-cash benefit recorded to deferred tax expense. The rate impact of temporary item true-ups for amounts filed on tax returns was considered insignificant. The total amount recorded for the revaluation of deferred tax amounts to 21% was a benefit of
$27,255
.
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•
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In the fourth quarter of 2017, an estimated tax expense of
$75
was recorded to reduce deferred tax assets associated with historic GAAP expensing of stock options issued to covered employees for purposes of the
$1 million
cap on wage deductibility under Section 162(m). The deferred tax asset ("DTA") was reduced to its expected realizable amount, after anticipation of the 162(m) limit in future years. This estimate was not subsequently adjusted.
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•
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The company did not estimate any deferred taxes related to the Global Intangible Low-Taxed Income, or GILTI, in the fourth quarter of 2017, as an analysis of the GILTI provisions were still underway. Additional guidance from the IRS on the computation of GILTI was issued in September and November of 2018, with more guidance still anticipated. The FASB noted that companies should make an accounting policy election to either recognize deferred taxes for temporary basis differences expected to reverse as GILTI in future years or to include the tax expense in the year incurred. As of the fourth quarter 2018, the company has elected to include GILTI as tax expense in the period incurred. This resulted in no adjustment, since no deferred tax impact was recorded in the fourth quarter of 2017.
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Payments due by period
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Contractual Obligations
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Total
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Less than 1
year
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1-3 years
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3-5 years
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More than
5 years
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||||||||||
Operating lease obligations (1)
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$
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16,628
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$
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3,445
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$
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4,913
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$
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2,583
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$
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5,687
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Purchase obligations (2)
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23,435
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23,435
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—
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—
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—
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Debt obligations (3)
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156,000
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—
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—
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156,000
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—
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Interest payment obligations (4)
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25,955
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|
5,773
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17,319
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|
|
2,863
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—
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Total
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$
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222,018
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$
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32,653
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|
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$
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22,232
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|
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$
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161,446
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$
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5,687
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(1)
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Principally includes obligations associated with future minimum non-cancelable operating lease obligations.
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(2)
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Principally includes open purchase orders with vendors for inventory not yet received or recorded on our balance sheet.
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(3)
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Consists of contractual obligations under the Credit Agreement, which was effective on June 27, 2018 and expires on June 27, 2023.
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(4)
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Includes interest payments on debt obligations based on interest rates at December 31, 2018, and it is assumed that there will be no prepayments of principal. This interest is related to the Credit Agreement that expires on June 27, 2023 , and the Contractual Obligations table reflects this expiration date and related current contractual obligations.
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Item 8.
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Financial Statements and Supplementary Data
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Index to Financial Statements and Supplementary Data:
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Page Numbers
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New York, New York
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February 28, 2019
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2018
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2017
|
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Current assets:
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|
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Cash and cash equivalents
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$
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54,268
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$
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40,416
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Accounts receivable, net of allowance for doubtful accounts of $610 and $431 at December 31, 2018 and 2017, respectively
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99,545
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91,226
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Inventories
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67,187
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60,696
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|
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Prepaid expenses
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3,830
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4,774
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Other current assets
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1,484
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2,224
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Total current assets
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226,314
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199,336
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Property, plant and equipment, net
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194,339
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189,793
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Goodwill
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447,995
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441,361
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Intangible assets with finite lives, net
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105,985
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128,073
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Other assets
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6,722
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5,073
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Total assets
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$
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981,355
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$
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963,636
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||||
Liabilities and Stockholders’ Equity
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Current liabilities:
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Trade accounts payable
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$
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33,789
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$
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28,451
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Accrued expenses
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22,025
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22,930
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Accrued compensation and other benefits
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11,022
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8,531
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Dividends payable
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15,220
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13,484
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Current portion of long-term debt
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—
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35,000
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Total current liabilities
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82,056
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108,396
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Long-term debt
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—
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183,964
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|
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Revolver loan - long-term
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156,000
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|
|
—
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|
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Deferred income taxes
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44,309
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|
48,548
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|
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Other long-term obligations
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7,372
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|
|
5,847
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|
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Total liabilities
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289,737
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|
346,755
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|
||
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|
||||
Commitments and contingencies (note 16)
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|
||||
Stockholders’ equity:
|
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|
||||
Preferred stock, $25 par value. Authorized 2,000,000 shares; none issued and outstanding
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—
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|
|
—
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|
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Common stock, $.0667 par value. Authorized 120,000,000 shares; 32,256,915 shares issued and 32,256,209 outstanding at December 31, 2018 and 32,019,605 shares issued and outstanding at December 31, 2017
|
2,151
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|
|
2,135
|
|
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Additional paid-in capital
|
165,098
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|
|
151,749
|
|
||
Retained earnings
|
528,027
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|
|
464,639
|
|
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Accumulated other comprehensive loss
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(3,602
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)
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|
(1,642
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)
|
||
Treasury stock, at cost: 706 and 0 shares at December 31, 2018 and 2017, respectively
|
(56
|
)
|
|
—
|
|
||
Total stockholders’ equity
|
691,618
|
|
|
616,881
|
|
||
|
|
|
|
||||
Total liabilities and stockholders’ equity
|
$
|
981,355
|
|
|
$
|
963,636
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|
|
2018
|
|
2017
|
|
2016
|
||||||
|
|
|
|
|
|
||||||
Net sales
|
$
|
643,679
|
|
|
$
|
594,790
|
|
|
$
|
553,204
|
|
|
|
|
|
|
|
||||||
Cost of sales
|
439,427
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|
|
405,781
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|
|
372,343
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|
|||
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|
||||||
Gross margin
|
204,252
|
|
|
189,009
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|
|
180,861
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|
||||||
Operating expenses:
|
|
|
|
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|
||||||
Selling expenses
|
57,219
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|
|
54,720
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|
|
55,172
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|
|||
Research and development expenses
|
11,592
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|
|
9,305
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|
|
7,325
|
|
|||
General and administrative expenses
|
27,690
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|
|
27,729
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|
|
27,526
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|
|||
|
96,501
|
|
|
91,754
|
|
|
90,023
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|
|||
|
|
|
|
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|
||||||
Earnings from operations
|
107,751
|
|
|
97,255
|
|
|
90,838
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|
|||
|
|
|
|
|
|
||||||
Other expenses:
|
|
|
|
|
|
||||||
|
|
|
|
|
|
||||||
Interest expense, net
|
7,611
|
|
|
7,532
|
|
|
7,256
|
|
|||
Other, net
|
1,110
|
|
|
1,235
|
|
|
648
|
|
|||
|
|
|
|
|
|
||||||
Earnings before income tax expense
|
99,030
|
|
|
88,488
|
|
|
82,934
|
|
|||
|
|
|
|
|
|
||||||
Income tax expense/(benefit)
|
20,457
|
|
|
(1,583
|
)
|
|
26,962
|
|
|||
|
|
|
|
|
|
||||||
Net earnings
|
$
|
78,573
|
|
|
$
|
90,071
|
|
|
$
|
55,972
|
|
|
|
|
|
|
|
||||||
Basic net earnings per common share
|
$
|
2.45
|
|
|
$
|
2.83
|
|
|
$
|
1.78
|
|
|
|
|
|
|
|
||||||
Diluted net earnings per common share
|
$
|
2.42
|
|
|
$
|
2.79
|
|
|
$
|
1.75
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
|
|
|
|
|
|
||||||
Net earnings
|
$
|
78,573
|
|
|
$
|
90,071
|
|
|
$
|
55,972
|
|
|
|
|
|
|
|
||||||
Other comprehensive (loss)/income, net of tax:
|
|
|
|
|
|
||||||
|
|
|
|
|
|
||||||
Net foreign currency translation adjustment
|
(2,982
|
)
|
|
5,404
|
|
|
(1,390
|
)
|
|||
|
|
|
|
|
|
||||||
Net change in postretirement benefit plan, net of taxes of $434, $207, and $49 at December 31, 2018, 2017 and 2016, respectively
|
1,022
|
|
|
(197
|
)
|
|
(345
|
)
|
|||
|
|
|
|
|
|
|
|||||
Other comprehensive (loss)/income
|
(1,960
|
)
|
|
5,207
|
|
|
(1,735
|
)
|
|||
|
|
|
|
|
|
||||||
Comprehensive income
|
$
|
76,613
|
|
|
$
|
95,278
|
|
|
$
|
54,237
|
|
|
Total
Stockholders'
Equity
|
|
Retained
Earnings
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
|
Common Stock
|
|
Treasury Stock
|
|
Additional
Paid-in
Capital
|
||||||||||||||||||
Shares
|
|
Amount
|
Shares
|
|
Amount
|
||||||||||||||||||||||||
Balance - December 31, 2015
|
$
|
463,705
|
|
|
$
|
344,197
|
|
|
$
|
(5,114
|
)
|
|
31,528,449
|
|
|
$
|
2,102
|
|
|
(1,089
|
)
|
|
(74
|
)
|
|
$
|
122,594
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net earnings
|
55,972
|
|
|
55,972
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Other comprehensive loss
|
(1,735
|
)
|
|
—
|
|
|
(1,735
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Dividends ($.38 per share)
|
(12,080
|
)
|
|
(12,080
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Treasury shares purchased
|
(1,588
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(24,912
|
)
|
|
(1,588
|
)
|
|
—
|
|
||||||
Shares and options issued under stock plans and
an income tax benefit of $2,546
|
16,759
|
|
|
—
|
|
|
—
|
|
|
229,412
|
|
|
15
|
|
|
26,001
|
|
|
1,662
|
|
|
15,082
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Balance - December 31, 2016
|
521,033
|
|
|
388,089
|
|
|
(6,849
|
)
|
|
31,757,861
|
|
|
2,117
|
|
|
—
|
|
|
—
|
|
|
137,676
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net earnings
|
90,071
|
|
|
90,071
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Other comprehensive income, net of cumulative effect of accounting change
|
5,150
|
|
|
(57
|
)
|
|
5,207
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Dividends ($.42 per share)
|
(13,464
|
)
|
|
(13,464
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Treasury shares purchased
|
(1,905
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(23,182
|
)
|
|
(1,905
|
)
|
|
—
|
|
||||||
Shares and options issued under stock plans
|
15,996
|
|
|
—
|
|
|
—
|
|
|
261,744
|
|
|
18
|
|
|
23,182
|
|
|
1,905
|
|
|
14,073
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Balance - December 31, 2017
|
616,881
|
|
|
464,639
|
|
|
(1,642
|
)
|
|
32,019,605
|
|
|
2,135
|
|
|
—
|
|
|
—
|
|
|
151,749
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net earnings
|
78,573
|
|
|
78,573
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Other comprehensive loss
|
(1,960
|
)
|
|
—
|
|
|
(1,960
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Dividends ($.47 per share)
|
(15,185
|
)
|
|
(15,185
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Treasury shares purchased
|
(1,394
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(16,755
|
)
|
|
(1,394
|
)
|
|
—
|
|
||||||
Shares and options issued under stock plans
|
14,703
|
|
|
—
|
|
|
—
|
|
|
236,604
|
|
|
16
|
|
|
16,049
|
|
|
1,338
|
|
|
13,349
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Balance - December 31, 2018
|
$
|
691,618
|
|
|
$
|
528,027
|
|
|
$
|
(3,602
|
)
|
|
32,256,209
|
|
|
$
|
2,151
|
|
|
(706
|
)
|
|
$
|
(56
|
)
|
|
$
|
165,098
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net earnings
|
$
|
78,573
|
|
|
$
|
90,071
|
|
|
$
|
55,972
|
|
|
|
|
|
|
|
||||||
Adjustments to reconcile net earnings to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
44,666
|
|
|
44,379
|
|
|
46,202
|
|
|||
Stock compensation expense
|
6,413
|
|
|
6,264
|
|
|
7,024
|
|
|||
Deferred income taxes
|
(5,403
|
)
|
|
(28,777
|
)
|
|
(6,881
|
)
|
|||
Provision for doubtful accounts
|
43
|
|
|
69
|
|
|
258
|
|
|||
Foreign currency transaction (gain)/loss
|
(141
|
)
|
|
340
|
|
|
(16
|
)
|
|||
Asset impairment charge
|
1,801
|
|
|
—
|
|
|
—
|
|
|||
(Gain)/Loss on disposal of assets
|
(3,244
|
)
|
|
254
|
|
|
320
|
|
|||
Changes in assets and liabilities, net of acquired balances
|
|
|
|
|
|
||||||
Accounts receivable
|
(7,773
|
)
|
|
(3,906
|
)
|
|
(15,659
|
)
|
|||
Inventories
|
(6,016
|
)
|
|
(319
|
)
|
|
4,745
|
|
|||
Prepaid expenses and other current assets
|
1,517
|
|
|
(439
|
)
|
|
240
|
|
|||
Accounts payable and accrued expenses
|
5,988
|
|
|
1,511
|
|
|
17,841
|
|
|||
Income taxes
|
1,121
|
|
|
449
|
|
|
(2,765
|
)
|
|||
Other
|
1,152
|
|
|
722
|
|
|
331
|
|
|||
Net cash provided by operating activities
|
118,697
|
|
|
110,618
|
|
|
107,612
|
|
|||
|
|
|
|
|
|
||||||
Cash flows from investing activities:
|
|
|
|
|
|
||||||
Capital expenditures
|
(19,170
|
)
|
|
(27,526
|
)
|
|
(23,034
|
)
|
|||
Cash paid for acquisitions, net of cash acquired
|
(17,399
|
)
|
|
(17,393
|
)
|
|
(110,601
|
)
|
|||
Proceeds from sale of property, plant and equipment
|
966
|
|
|
22
|
|
|
4
|
|
|||
Proceeds from insurance
|
4,165
|
|
|
2,792
|
|
|
1,000
|
|
|||
Intangible assets acquired
|
(553
|
)
|
|
(591
|
)
|
|
(963
|
)
|
|||
Net cash used in investing activities
|
(31,991
|
)
|
|
(42,696
|
)
|
|
(133,594
|
)
|
|||
|
|
|
|
|
|
||||||
Cash flows from financing activities:
|
|
|
|
|
|
||||||
Proceeds from revolving loan
|
210,750
|
|
|
25,000
|
|
|
72,500
|
|
|||
Principal payments on revolving loan
|
(54,750
|
)
|
|
(44,000
|
)
|
|
(53,500
|
)
|
|||
Principal payments on long-term debt
|
(219,500
|
)
|
|
(43,000
|
)
|
|
(35,000
|
)
|
|||
Principal payment on acquired debt
|
(19
|
)
|
|
(2,384
|
)
|
|
(884
|
)
|
|||
Cash paid for financing costs
|
(1,374
|
)
|
|
—
|
|
|
—
|
|
|||
Proceeds from stock options exercised
|
8,272
|
|
|
9,732
|
|
|
7,192
|
|
|||
Excess tax benefits from stock compensation
|
—
|
|
|
—
|
|
|
2,546
|
|
|||
Dividends paid
|
(13,432
|
)
|
|
(12,069
|
)
|
|
(10,720
|
)
|
|||
Purchase of treasury stock
|
(1,394
|
)
|
|
(1,905
|
)
|
|
(1,588
|
)
|
|||
Net cash used in by financing activities
|
(71,447
|
)
|
|
(68,626
|
)
|
|
(19,454
|
)
|
|||
|
|
|
|
|
|
||||||
Effect of exchange rate changes on cash
|
(1,407
|
)
|
|
2,477
|
|
|
(716
|
)
|
|||
|
|
|
|
|
|
||||||
Increase/(Decrease) in cash and cash equivalents
|
13,852
|
|
|
1,773
|
|
|
(46,152
|
)
|
|||
|
|
|
|
|
|
||||||
Cash and cash equivalents beginning of period
|
40,416
|
|
|
38,643
|
|
|
84,795
|
|
|||
Cash and cash equivalents end of period
|
$
|
54,268
|
|
|
$
|
40,416
|
|
|
$
|
38,643
|
|
Buildings
|
15-25 years
|
Equipment
|
2-28 years
|
Goodwill at December 31, 2016
|
|
$
|
439,811
|
|
Goodwill as a result of the Acquisitions - see Note 2
|
|
1,550
|
|
|
Goodwill at December 31, 2017
|
|
441,361
|
|
|
Goodwill as a result of the Acquisitions – see Note 2
|
|
6,838
|
|
|
Impact due to change in foreign exchange rates
|
|
(204
|
)
|
|
Goodwill at December 31, 2018
|
|
$
|
447,995
|
|
|
|
December 31, 2018
|
|
December 31, 2017
|
||||
Human Nutrition & Health
|
|
$
|
405,527
|
|
|
$
|
405,334
|
|
Animal Nutrition & Health
|
|
18,578
|
|
|
12,137
|
|
||
Specialty Products
|
|
22,662
|
|
|
22,662
|
|
||
Industrial Products
|
|
1,228
|
|
|
1,228
|
|
||
Total
|
|
$
|
447,995
|
|
|
$
|
441,361
|
|
|
|
Amortization Period
(in years)
|
Customer relationships and lists
|
|
10
|
Trademarks & trade names
|
|
5 - 17
|
Developed technology
|
|
5
|
Regulatory registration costs
|
|
5 - 10
|
Patents & trade secrets
|
|
15 - 17
|
Other
|
|
3 - 18
|
Cash and cash equivalents
|
|
$
|
5,065
|
|
Accounts receivable
|
|
2,860
|
|
|
Inventories
|
|
2,537
|
|
|
Prepaid expenses
|
|
186
|
|
|
Property, plant and equipment
|
|
12,219
|
|
|
Customer relationships
|
|
2,942
|
|
|
Developed technology
|
|
1,078
|
|
|
Trademark & trade name
|
|
1,388
|
|
|
Covenant not to compete
|
|
126
|
|
|
Goodwill
|
|
1,340
|
|
|
Trade accounts payable
|
|
(844
|
)
|
|
Accrued expenses
|
|
(1,416
|
)
|
|
Bank debt
|
|
(2,384
|
)
|
|
Deferred income taxes
|
|
(3,871
|
)
|
|
Amount paid to shareholders
|
|
21,226
|
|
|
IFP bank debt paid on purchase date
|
|
2,384
|
|
|
Total amount paid
|
|
$
|
23,610
|
|
|
|
Increase/(Decrease) for the
Years Ended December 31, |
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
Cost of sales
|
|
$
|
973
|
|
|
$
|
524
|
|
|
$
|
1,040
|
|
Operating expenses
|
|
5,440
|
|
|
5,736
|
|
|
5,984
|
|
|||
Net earnings
|
|
(4,965
|
)
|
|
(3,990
|
)
|
|
(4,473
|
)
|
|
|
Year Ended December 31,
|
|||||||
Weighted Average Assumptions:
|
|
2018
|
|
2017
|
|
2016
|
|||
Expected Volatility
|
|
26.8
|
%
|
|
30.1
|
%
|
|
34.4
|
%
|
Expected Term (in years)
|
|
4.4
|
|
|
4.6
|
|
|
5.0
|
|
Risk-Free Interest Rate
|
|
2.6
|
%
|
|
1.8
|
%
|
|
1.2
|
%
|
Dividend Yield
|
|
0.6
|
%
|
|
0.5
|
%
|
|
0.5
|
%
|
2018
|
|
# of
Shares
(000s)
|
|
Weighted Average
Exercise Price
|
|||
Outstanding at beginning of year
|
|
946
|
|
|
$
|
55.44
|
|
Granted
|
|
148
|
|
|
74.57
|
|
|
Exercised
|
|
(198
|
)
|
|
41.71
|
|
|
Forfeited
|
|
(6
|
)
|
|
74.90
|
|
|
Cancelled
|
|
(3
|
)
|
|
48.54
|
|
|
Outstanding at end of year
|
|
887
|
|
|
$
|
61.59
|
|
Exercisable at end of year
|
|
490
|
|
|
$
|
50.50
|
|
2017
|
|
# of
Shares
(000s)
|
|
Weighted Average
Exercise Price
|
|||
Outstanding at beginning of year
|
|
1,066
|
|
|
$
|
45.32
|
|
Granted
|
|
222
|
|
|
85.22
|
|
|
Exercised
|
|
(268
|
)
|
|
36.36
|
|
|
Forfeited
|
|
(52
|
)
|
|
72.29
|
|
|
Cancelled
|
|
(22
|
)
|
|
57.48
|
|
|
Outstanding at end of year
|
|
946
|
|
|
$
|
55.44
|
|
Exercisable at end of year
|
|
493
|
|
|
$
|
41.01
|
|
2016
|
|
# of
Shares
(000s)
|
|
Weighted Average
Exercise Price
|
|||
Outstanding at beginning of year
|
|
1,017
|
|
|
$
|
37.29
|
|
Granted
|
|
341
|
|
|
60.92
|
|
|
Exercised
|
|
(236
|
)
|
|
30.44
|
|
|
Forfeited
|
|
(56
|
)
|
|
58.23
|
|
|
Outstanding at end of year
|
|
1,066
|
|
|
$
|
45.32
|
|
Exercisable at end of year
|
|
604
|
|
|
$
|
34.77
|
|
|
|
Years Ended December 31,
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
Weighted-average fair value of options granted
|
|
$
|
18.62
|
|
|
$
|
23.20
|
|
|
$
|
18.48
|
|
Total intrinsic value of stock options exercised ($000s)
|
|
$
|
10,456
|
|
|
$
|
11,900
|
|
|
$
|
8,609
|
|
|
|
|
|
Options Outstanding
|
|
Options Exercisable
|
||||||||||
Range of Exercise
Prices
|
|
Shares
Outstanding
(000s)
|
|
Weighted
Average
Remaining
Contractual
Term
|
|
Weighted
Average
Exercise
Price
|
|
Number
Exercisable
(000s)
|
|
Weighted
Average
Exercise
Price
|
||||||
$13.61 - $34.81
|
|
134
|
|
|
2.0 years
|
|
$
|
28.03
|
|
|
134
|
|
|
$
|
28.03
|
|
$38.10 - $59.95
|
|
195
|
|
|
5.2 years
|
|
52.51
|
|
|
191
|
|
|
52.39
|
|
||
$60.01 - $85.40
|
|
558
|
|
|
7.7 years
|
|
72.82
|
|
|
165
|
|
|
66.61
|
|
||
|
|
887
|
|
|
6.3 years
|
|
$
|
61.59
|
|
|
490
|
|
|
$
|
50.50
|
|
|
|
Shares (000s)
|
|
Weighted
Average Grant
Date Fair
Value
|
|||
Non-vested balance as of December 31, 2017
|
|
66
|
|
|
$
|
65.66
|
|
Granted
|
|
42
|
|
|
77.50
|
|
|
Vested
|
|
(27
|
)
|
|
62.74
|
|
|
Forfeited
|
|
(2
|
)
|
|
74.57
|
|
|
Non-vested balance as of December 31, 2018
|
|
79
|
|
|
$
|
72.75
|
|
|
|
Shares (000s)
|
|
Weighted
Average Grant Date Fair Value |
|||
Non-vested balance as of December 31, 2016
|
|
102
|
|
|
$
|
54.18
|
|
Granted
|
|
21
|
|
|
83.43
|
|
|
Vested
|
|
(53
|
)
|
|
51.39
|
|
|
Forfeited
|
|
(4
|
)
|
|
55.45
|
|
|
Non-vested balance as of December 31, 2017
|
|
66
|
|
|
$
|
65.66
|
|
|
|
Shares (000s)
|
|
Weighted
Average Grant
Date Fair
Value
|
|||
Non-vested balance as of December 31, 2015
|
|
150
|
|
|
$
|
47.46
|
|
Granted
|
|
19
|
|
|
61.22
|
|
|
Vested
|
|
(66
|
)
|
|
40.96
|
|
|
Forfeited
|
|
(1
|
)
|
|
56.77
|
|
|
Non-vested balance as of December 31, 2016
|
|
102
|
|
|
$
|
54.18
|
|
|
|
Shares (000s)
|
|
Weighted
Average Grant
Date Fair
Value
|
|||
Non-vested balance as of December 31, 2017
|
|
39
|
|
|
$
|
72.62
|
|
Granted
|
|
32
|
|
|
71.27
|
|
|
Vested
|
|
(15
|
)
|
|
58.78
|
|
|
Forfeited
|
|
(3
|
)
|
|
72.55
|
|
|
Non-vested balance as of December 31, 2018
|
|
53
|
|
|
$
|
75.61
|
|
|
|
Shares (000s)
|
|
Weighted
Average Grant
Date Fair
Value
|
|||
Non-vested balance as of December 31, 2016
|
|
34
|
|
|
$
|
61.06
|
|
Granted
|
|
16
|
|
|
93.85
|
|
|
Vested
|
|
—
|
|
|
—
|
|
|
Forfeited
|
|
(11
|
)
|
|
69.25
|
|
|
Non-vested balance as of December 31, 2017
|
|
39
|
|
|
$
|
72.62
|
|
|
|
Shares (000s)
|
|
Weighted
Average Grant
Date Fair
Value
|
|||
Non-vested as of December 31, 2015
|
|
20
|
|
|
$
|
58.77
|
|
Granted
|
|
22
|
|
|
63.15
|
|
|
Vested
|
|
—
|
|
|
—
|
|
|
Forfeited
|
|
(8
|
)
|
|
60.88
|
|
|
Non-vested as of December 31, 2016
|
|
34
|
|
|
$
|
61.06
|
|
|
|
2018
|
|
2017
|
||||
Raw materials
|
|
$
|
23,661
|
|
|
$
|
20,520
|
|
Work in progress
|
|
4,649
|
|
|
6,308
|
|
||
Finished goods
|
|
38,877
|
|
|
33,868
|
|
||
Total inventories
|
|
$
|
67,187
|
|
|
$
|
60,696
|
|
|
|
2018
|
|
2017
|
||||
Land
|
|
$
|
7,965
|
|
|
$
|
7,262
|
|
Building
|
|
67,702
|
|
|
63,224
|
|
||
Equipment
|
|
213,909
|
|
|
201,341
|
|
||
Construction in progress
|
|
18,170
|
|
|
13,860
|
|
||
|
|
307,746
|
|
|
285,687
|
|
||
Less: Accumulated depreciation
|
|
113,407
|
|
|
95,894
|
|
||
Property, plant and equipment, net
|
|
$
|
194,339
|
|
|
$
|
189,793
|
|
|
|
2018
|
|
2017
|
||||
North America
|
|
$
|
170,830
|
|
|
$
|
175,027
|
|
Europe
|
|
23,509
|
|
|
14,766
|
|
||
Total
|
|
194,339
|
|
|
189,793
|
|
|
|
Amortization
Period
(In years)
|
|
2018
Gross
Carrying
Amount
|
|
2018
Accumulated
Amortization
|
|
2017
Gross
Carrying
Amount
|
|
2017
Accumulated
Amortization
|
||||||||
Customer relationships & lists
|
|
10
|
|
$
|
192,185
|
|
|
$
|
122,545
|
|
|
$
|
190,061
|
|
|
$
|
105,573
|
|
Trademarks & trade names
|
|
5-17
|
|
39,934
|
|
|
16,755
|
|
|
40,630
|
|
|
12,895
|
|
||||
Developed technology
|
|
5
|
|
13,338
|
|
|
8,604
|
|
|
13,338
|
|
|
5,936
|
|
||||
Other
|
|
3-18
|
|
14,913
|
|
|
6,481
|
|
|
13,466
|
|
|
5,018
|
|
||||
|
|
|
|
$
|
260,370
|
|
|
$
|
154,385
|
|
|
$
|
257,495
|
|
|
$
|
129,422
|
|
2018
|
|
Earnings
(Numerator)
|
|
Number of Shares
(Denominator)
|
|
Per Share
Amount
|
|||||
Basic EPS – Net earnings and weighted average common shares outstanding
|
|
$
|
78,573
|
|
|
32,093,037
|
|
|
$
|
2.45
|
|
|
|
|
|
|
|
|
|||||
Effect of dilutive securities – stock options, restricted stock, and performance shares
|
|
|
|
351,858
|
|
|
|
||||
|
|
|
|
|
|
|
|||||
Diluted EPS – Net earnings and weighted average common shares outstanding and effect of stock options, restricted stock, and performance shares
|
|
$
|
78,573
|
|
|
32,444,895
|
|
|
$
|
2.42
|
|
2017
|
|
Earnings
(Numerator)
|
|
Number of Shares
(Denominator)
|
|
Per Share
Amount
|
|||||
Basic EPS – Net earnings and weighted average common shares outstanding
|
|
$
|
90,071
|
|
|
31,838,641
|
|
|
$
|
2.83
|
|
|
|
|
|
|
|
|
|||||
Effect of dilutive securities – stock options, restricted stock, and performance shares
|
|
|
|
391,165
|
|
|
|
||||
|
|
|
|
|
|
|
|||||
Diluted EPS – Net earnings and weighted average common shares outstanding and effect of stock options, restricted stock, and performance shares
|
|
$
|
90,071
|
|
|
32,229,806
|
|
|
$
|
2.79
|
|
2016
|
|
Earnings
(Numerator)
|
|
Number of Shares
(Denominator)
|
|
Per Share
Amount
|
|||||
Basic EPS – Net earnings and weighted average common shares outstanding
|
|
$
|
55,972
|
|
|
31,521,667
|
|
|
$
|
1.78
|
|
|
|
|
|
|
|
|
|||||
Effect of dilutive securities – stock options, restricted stock, and performance shares
|
|
|
|
400,971
|
|
|
|
||||
|
|
|
|
|
|
|
|||||
Diluted EPS – Net earnings and weighted average common shares outstanding and effect of stock options, restricted stock, and performance shares
|
|
$
|
55,972
|
|
|
31,922,638
|
|
|
$
|
1.75
|
|
•
|
In the fourth quarter of 2017, an estimated current tax expense of
$1,389
was recorded for the deemed repatriation under Section 965, net of available foreign tax credits. In August of 2018, the IRS issued proposed regulations that clarified the computation of the deemed repatriation. In the fourth quarter of 2018, the company recorded a reduction to the tax of
$970
related to the regulations, adjustments to foreign tax credit calculations, and the interaction of those calculation with other aspects of the tax code. The total amount recorded for the deemed repatriation tax was
$419
.
|
•
|
In the fourth quarter of 2017, an estimated deferred tax benefit of
$27,255
was recorded to revalue the company’s net deferred tax liabilities from the 35% previous federal tax rate to the 21% federal tax rate in affect as of January 1, 2018. This was a non-cash benefit recorded to deferred tax expense. The rate impact of temporary item true-ups for amounts filed on tax returns was considered insignificant. The total amount recorded for the revaluation of deferred tax amounts to 21% was a benefit of
$27,255
.
|
•
|
In the fourth quarter of 2017, an estimated tax expense of
$75
was recorded to reduce deferred tax assets associated with historic GAAP expensing of stock options issued to covered employees for purposes of the
$1 million
cap on wage deductibility under Section 162(m). The DTA was reduced to its expected realizable amount, after anticipation of the 162(m) limit in future years. This estimate was not subsequently adjusted.
|
•
|
The company did not estimate any deferred taxes related to the Global Intangible Low-Taxed Income, or GILTI, in the fourth quarter of 2017, as an analysis of the GILTI provisions were still underway. Additional guidance from the IRS on the computation of GILTI was issued in September and November of 2018, with more guidance still anticipated. The FASB noted that companies should make an accounting policy election to either recognize deferred taxes for temporary basis differences expected to reverse as GILTI in future years or to include the tax expense in the year incurred. As of the fourth quarter 2018, the company has elected to include GILTI as tax expense in the period incurred. This resulted in no adjustment, since no deferred tax impact was recorded in the fourth quarter of 2017.
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
Current:
|
|
|
|
|
|
|
||||||
Federal
|
|
$
|
18,296
|
|
|
$
|
20,102
|
|
|
$
|
28,765
|
|
Foreign
|
|
4,060
|
|
|
3,015
|
|
|
2,670
|
|
|||
State
|
|
3,880
|
|
|
2,790
|
|
|
2,483
|
|
|||
Deemed Repatriation
|
|
(970
|
)
|
|
1,389
|
|
|
—
|
|
|||
Deferred:
|
|
|
|
|
|
|
||||||
Federal
|
|
(3,788
|
)
|
|
(1,302
|
)
|
|
(7,114
|
)
|
|||
Foreign
|
|
(69
|
)
|
|
62
|
|
|
52
|
|
|||
State
|
|
(952
|
)
|
|
(384
|
)
|
|
106
|
|
|||
Federal Rate Change
|
|
—
|
|
|
(27,255
|
)
|
|
—
|
|
|||
Total income tax provision
|
|
$
|
20,457
|
|
|
$
|
(1,583
|
)
|
|
$
|
26,962
|
|
|
|
2018
|
|
2017
|
|
2016
|
|||||
Income tax at Federal statutory rate
|
|
$
|
20,796
|
|
|
$
|
30,971
|
|
|
29,027
|
|
State income taxes, net of Federal income taxes
|
|
2,742
|
|
|
708
|
|
|
1,510
|
|
||
Federal Rate Change
|
|
—
|
|
|
(27,255
|
)
|
|
—
|
|
||
Stock Options
|
|
(1,293
|
)
|
|
(2,927
|
)
|
|
—
|
|
||
GILTI & FDII
|
|
1,027
|
|
|
—
|
|
|
—
|
|
||
Deemed Repatriation
|
|
(970
|
)
|
|
1,389
|
|
|
—
|
|
||
Foreign Tax Credits
|
|
(1,136
|
)
|
|
—
|
|
|
—
|
|
||
Domestic production activities deduction
|
|
—
|
|
|
(2,382
|
)
|
|
(3,299
|
)
|
||
Other
|
|
(709
|
)
|
|
(2,087
|
)
|
|
(276
|
)
|
||
Total income tax provision
|
|
$
|
20,457
|
|
|
$
|
(1,583
|
)
|
|
26,962
|
|
|
|
2018
|
|
2017
|
||||
Deferred tax assets:
|
|
|
|
|
||||
Inventories
|
|
$
|
1,260
|
|
|
$
|
1,297
|
|
Restricted stock and stock options
|
|
3,567
|
|
|
3,248
|
|
||
Other
|
|
2,885
|
|
|
1,764
|
|
||
Total deferred tax assets
|
|
7,712
|
|
|
6,309
|
|
||
Deferred tax liabilities:
|
|
|
|
|
||||
Amortization
|
|
$
|
27,080
|
|
|
$
|
31,311
|
|
Depreciation
|
|
23,837
|
|
|
22,172
|
|
||
Other
|
|
1,104
|
|
|
1,374
|
|
||
Total deferred tax liabilities
|
|
52,021
|
|
|
54,857
|
|
||
|
|
|
|
|
||||
Net deferred tax liability
|
|
$
|
44,309
|
|
|
$
|
48,548
|
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
Balance at beginning of period
|
|
$
|
4,781
|
|
|
$
|
6,637
|
|
|
$
|
6,570
|
|
Increases for tax positions of prior years
|
|
1,366
|
|
|
393
|
|
|
332
|
|
|||
Decreases for tax positions of prior years
|
|
(1,185
|
)
|
|
(2,711
|
)
|
|
(406
|
)
|
|||
Increases for tax positions related to current year
|
|
747
|
|
|
462
|
|
|
141
|
|
|||
Balance at end of period
|
|
$
|
5,709
|
|
|
$
|
4,781
|
|
|
$
|
6,637
|
|
|
|
2018
|
|
2017
|
||||
Human Nutrition & Health
|
|
$
|
702,692
|
|
|
$
|
719,010
|
|
Animal Nutrition & Health
|
|
136,810
|
|
|
118,418
|
|
||
Specialty Products
|
|
59,558
|
|
|
63,141
|
|
||
Industrial Products
|
|
22,822
|
|
|
18,471
|
|
||
Other Unallocated
|
|
59,473
|
|
|
44,596
|
|
||
Total
|
|
$
|
981,355
|
|
|
$
|
963,636
|
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
Human Nutrition & Health
|
|
$
|
341,237
|
|
|
$
|
315,796
|
|
|
$
|
297,134
|
|
Animal Nutrition & Health
|
|
175,693
|
|
|
157,688
|
|
|
161,119
|
|
|||
Specialty Products
|
|
75,808
|
|
|
73,355
|
|
|
70,126
|
|
|||
Industrial Products
|
|
50,941
|
|
|
47,951
|
|
|
24,825
|
|
|||
Total
|
|
$
|
643,679
|
|
|
$
|
594,790
|
|
|
$
|
553,204
|
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
Human Nutrition & Health
|
|
$
|
48,490
|
|
|
$
|
44,010
|
|
|
$
|
38,156
|
|
Animal Nutrition & Health
|
|
26,673
|
|
|
22,292
|
|
|
28,686
|
|
|||
Specialty Products
|
|
25,361
|
|
|
24,949
|
|
|
22,862
|
|
|||
Industrial Products
|
|
9,013
|
|
|
6,413
|
|
|
1,949
|
|
|||
Transaction and integration costs
|
|
(1,786
|
)
|
|
(2,496
|
)
|
|
(815
|
)
|
|||
Indemnification settlement
|
|
—
|
|
|
2,087
|
|
|
—
|
|
|||
Interest and other income, net
|
|
(8,721
|
)
|
|
(8,767
|
)
|
|
(7,904
|
)
|
|||
Total
|
|
$
|
99,030
|
|
|
$
|
88,488
|
|
|
$
|
82,934
|
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
Human Nutrition & Health
|
|
$
|
33,594
|
|
|
$
|
33,384
|
|
|
$
|
33,796
|
|
Animal Nutrition & Health
|
|
5,606
|
|
|
5,618
|
|
|
7,243
|
|
|||
Specialty Products
|
|
4,092
|
|
|
4,097
|
|
|
3,787
|
|
|||
Industrial Products
|
|
694
|
|
|
806
|
|
|
850
|
|
|||
Total
|
|
$
|
43,986
|
|
|
$
|
43,905
|
|
|
$
|
45,676
|
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
Human Nutrition & Health
|
|
$
|
8,881
|
|
|
$
|
20,580
|
|
|
$
|
14,470
|
|
Animal Nutrition & Health
|
|
6,021
|
|
|
4,424
|
|
|
6,577
|
|
|||
Specialty Products
|
|
2,356
|
|
|
1,306
|
|
|
1,286
|
|
|||
Industrial Products
|
|
1,912
|
|
|
1,216
|
|
|
701
|
|
|||
Total
|
|
$
|
19,170
|
|
|
$
|
27,526
|
|
|
$
|
23,034
|
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
Product Sales
|
|
$
|
590,790
|
|
|
$
|
542,065
|
|
|
$
|
505,174
|
|
Co-manufacturing
|
|
41,348
|
|
|
41,658
|
|
|
39,396
|
|
|||
Bill and Hold
|
|
4,612
|
|
|
4,094
|
|
|
3,061
|
|
|||
Consignment
|
|
2,442
|
|
|
2,333
|
|
|
2,170
|
|
|||
Product Sales Revenue
|
|
639,192
|
|
|
590,150
|
|
|
549,801
|
|
|||
|
|
|
|
|
|
|
||||||
Royalty Revenue
|
|
4,487
|
|
|
4,640
|
|
|
3,403
|
|
|||
|
|
|
|
|
|
|
||||||
Total
|
|
$
|
643,679
|
|
|
$
|
594,790
|
|
|
$
|
553,204
|
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
United States
|
|
$
|
482,691
|
|
|
$
|
460,599
|
|
|
$
|
420,821
|
|
Foreign Countries
|
|
160,988
|
|
|
134,191
|
|
|
132,383
|
|
|||
Total
|
|
$
|
643,679
|
|
|
$
|
594,790
|
|
|
$
|
553,204
|
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
Income taxes
|
|
$
|
20,593
|
|
|
$
|
25,845
|
|
|
$
|
30,741
|
|
Interest
|
|
$
|
6,940
|
|
|
$
|
7,021
|
|
|
$
|
6,669
|
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
Dividends payable
|
|
$
|
15,220
|
|
|
$
|
13,484
|
|
|
$
|
12,088
|
|
|
|
Years Ended
December 31, |
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
Net foreign currency translation adjustment
|
|
$
|
(2,982
|
)
|
|
$
|
5,404
|
|
|
$
|
(1,390
|
)
|
|
|
|
|
|
|
|
||||||
Net change in postretirement benefit plan
(see Note 15 for further information)
|
|
|
|
|
|
|
||||||
Initial adoption of new plan
|
|
—
|
|
|
—
|
|
|
(444
|
)
|
|||
Net gain/(loss) arising during the period
|
|
522
|
|
|
(49
|
)
|
|
101
|
|
|||
Amortization of prior service credit/(cost)
|
|
74
|
|
|
74
|
|
|
57
|
|
|||
Amortization of (gain)/loss
|
|
(8
|
)
|
|
(15
|
)
|
|
(10
|
)
|
|||
Total before tax
|
|
588
|
|
|
10
|
|
|
(296
|
)
|
|||
Tax
|
|
434
|
|
|
(207
|
)
|
|
(49
|
)
|
|||
Net of tax
|
|
1,022
|
|
|
(197
|
)
|
|
(345
|
)
|
|||
|
|
|
|
|
|
|
||||||
Total other comprehensive income (loss)
|
|
$
|
(1,960
|
)
|
|
$
|
5,207
|
|
|
$
|
(1,735
|
)
|
|
|
Foreign currency
translation
adjustment
|
|
Postretirement
benefit plan
|
|
Total
|
||||||
Balance December 31, 2017
|
|
$
|
(1,303
|
)
|
|
$
|
(339
|
)
|
|
$
|
(1,642
|
)
|
Other comprehensive (loss)/gain
|
|
(2,982
|
)
|
|
1,022
|
|
|
(1,960
|
)
|
|||
Balance December 31, 2018
|
|
$
|
(4,285
|
)
|
|
$
|
683
|
|
|
$
|
(3,602
|
)
|
|
|
2018
|
|
2017
|
||||
Benefit obligation at beginning of year
|
|
$
|
1,573
|
|
|
$
|
1,411
|
|
Initial adoption of new plan
|
|
—
|
|
|
—
|
|
||
Service cost with interest to end of year
|
|
78
|
|
|
67
|
|
||
Interest cost
|
|
44
|
|
|
46
|
|
||
Participant contributions
|
|
40
|
|
|
28
|
|
||
Benefits paid
|
|
(136
|
)
|
|
(58
|
)
|
||
Actuarial (gain)/loss
|
|
(425
|
)
|
|
79
|
|
||
Benefit obligation at end of year
|
|
$
|
1,174
|
|
|
$
|
1,573
|
|
|
|
2018
|
|
2017
|
||||
Fair value of plan assets at beginning of year
|
|
$
|
—
|
|
|
$
|
—
|
|
Employer (reimbursement)/contributions
|
|
96
|
|
|
30
|
|
||
Participant contributions
|
|
40
|
|
|
28
|
|
||
Benefits paid
|
|
(136
|
)
|
|
(58
|
)
|
||
Fair value of plan assets at end of year
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
2018
|
|
2017
|
||||
Accumulated postretirement benefit obligation
|
|
$
|
(1,174
|
)
|
|
$
|
(1,573
|
)
|
Fair value of plan assets
|
|
—
|
|
|
—
|
|
||
Funded status
|
|
(1,174
|
)
|
|
(1,573
|
)
|
||
Unrecognized prior service cost
|
|
N/A
|
|
|
N/A
|
|
||
Unrecognized net (gain)/loss
|
|
N/A
|
|
|
N/A
|
|
||
Net amount recognized in consolidated balance sheet (after ASC 715) (included in other long-term obligations)
|
|
$
|
1,174
|
|
|
$
|
1,573
|
|
Accrued postretirement benefit cost (included in other long-term obligations)
|
|
N/A
|
|
|
N/A
|
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
Service cost with interest to end of year
|
|
$
|
78
|
|
|
$
|
67
|
|
|
$
|
66
|
|
Interest cost
|
|
44
|
|
|
46
|
|
|
48
|
|
|||
Amortization of prior service credit/(cost)
|
|
74
|
|
|
74
|
|
|
57
|
|
|||
Amortization of (gain)/loss
|
|
(8
|
)
|
|
(15
|
)
|
|
(10
|
)
|
|||
Total net periodic benefit cost
|
|
$
|
188
|
|
|
$
|
172
|
|
|
$
|
161
|
|
Year
|
|
|
||
2019
|
|
$
|
127
|
|
2020
|
|
89
|
|
|
2021
|
|
73
|
|
|
2022
|
|
90
|
|
|
2023
|
|
88
|
|
|
Years 2024-2028
|
|
497
|
|
Pension
Fund |
|
EIN/Pension
Plan Number |
|
Pension Plan Protection Act Zone Status
|
|
FIP/RP Status
Pending/ Implemented
|
|
Contributions of Balchem Corporation
|
|
Surcharge
Imposed |
|
Expiration Date of Collective-
Bargaining Agreement |
||||||
|
2018
|
|
2017
|
|
|
2018
|
|
2017
|
|
2016
|
|
|||||||
Central States,
Southeast and
Southwest Areas
Pension Fund
|
|
36-6044243
|
|
Red as of 1/1/18
|
|
Red as of 1/1/17
|
|
Implemented
|
|
$614
|
|
$594
|
|
$576
|
|
No
|
|
7/11/2020
|
Year
|
|
|
||
2019
|
|
$
|
3,445
|
|
2020
|
|
2,911
|
|
|
2021
|
|
2,002
|
|
|
2022
|
|
1,401
|
|
|
2023
|
|
1,182
|
|
|
Thereafter
|
|
5,687
|
|
|
Total minimum lease payments
|
|
$
|
16,628
|
|
|
|
2018
|
|
2017
|
||||||||||||||||||||||||||||
|
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Fourth
Quarter
|
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Fourth
Quarter
|
||||||||||||||||
Net sales
|
|
$
|
161,410
|
|
|
$
|
163,687
|
|
|
$
|
155,043
|
|
|
$
|
163,539
|
|
|
$
|
137,728
|
|
|
$
|
147,082
|
|
|
$
|
150,716
|
|
|
$
|
159,264
|
|
Gross profit
|
|
51,459
|
|
|
53,466
|
|
|
48,002
|
|
|
51,325
|
|
|
44,429
|
|
|
46,761
|
|
|
46,181
|
|
|
51,638
|
|
||||||||
Earnings before income taxes
|
|
25,177
|
|
|
25,061
|
|
|
23,529
|
|
|
25,263
|
|
|
20,710
|
|
|
22,560
|
|
|
20,697
|
|
|
24,522
|
|
||||||||
Net earnings
|
|
19,346
|
|
|
19,679
|
|
|
19,214
|
|
|
20,334
|
|
|
15,518
|
|
|
16,536
|
|
|
16,043
|
|
|
41,975
|
|
||||||||
Basic net earnings per common share
|
|
$
|
.60
|
|
|
$
|
.61
|
|
|
$
|
.60
|
|
|
$
|
.63
|
|
|
$
|
.49
|
|
|
$
|
.52
|
|
|
$
|
.50
|
|
|
$
|
1.31
|
|
Diluted net earnings per common share
|
|
$
|
.60
|
|
|
$
|
.61
|
|
|
$
|
.59
|
|
|
$
|
.63
|
|
|
$
|
.48
|
|
|
$
|
.51
|
|
|
$
|
.50
|
|
|
$
|
1.30
|
|
Description
|
|
Balance at Beginning of Year
|
|
Additions
Charged
(Credited) to Costs and Expenses
|
|
Adjustments/Deductions
|
|
|
|
Balance at
End of Year
|
||||||||
Year ended December 31, 2018
|
|
|
|
|
|
|
|
|
|
|
||||||||
Allowance for doubtful accounts
|
|
$
|
431
|
|
|
$
|
43
|
|
|
$
|
136
|
|
|
(a)
|
|
$
|
610
|
|
Inventory reserve
|
|
2,315
|
|
|
898
|
|
|
(638
|
)
|
|
(a)
|
|
2,575
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||||||
Year ended December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
||||||||
Allowance for doubtful accounts
|
|
$
|
489
|
|
|
$
|
126
|
|
|
$
|
(184
|
)
|
|
(a)
|
|
$
|
431
|
|
Inventory reserve
|
|
2,546
|
|
|
538
|
|
|
(769
|
)
|
|
(a)
|
|
2,315
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||||||
Year ended December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
||||||||
Allowance for doubtful accounts
|
|
$
|
235
|
|
|
$
|
417
|
|
|
$
|
(163
|
)
|
|
(a)
|
|
$
|
489
|
|
Inventory reserve
|
|
1,823
|
|
|
905
|
|
|
(182
|
)
|
|
(a)
|
|
2,546
|
|
(a)
|
represents write-offs and other adjustments
|
Item 9.
|
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
|
Item 9A.
|
Controls and Procedures
|
Item 9B.
|
Other Information
|
Item 10.
|
Directors, Executive Officers of the Registrant, and Corporate Governance.
|
(a)
|
Section 16(a) Beneficial Ownership Reporting Compliance.
|
Item 11.
|
Executive Compensation.
|
Item 12.
|
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
|
Item 13.
|
Certain Relationships and Related Transactions and Director Independence.
|
Item 14.
|
Principal Accountant Fees and Services.
|
1.
|
|
Financial Statements
|
Page Number
|
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
2.
|
|
Financial Statement Schedules
|
|
|
|
|
|
|
|
||
|
|
|
|
3.
|
|
Exhibits
|
|
|
|
|
|
3.1
|
|
||
|
|
|
|
3.2
|
|
||
|
|
|
|
3.3
|
|
||
|
|
|
|
3.4
|
|
By-laws of the Company, as amended and restated as of February 21, 2017 (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K dated February 22, 2017),
as amended by the amendment thereto effective December 13, 2017 (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K dated December 19, 2017).
|
|
|
|
|
|
10.1
|
|
||
|
|
|
|
10.2
|
|
||
|
|
|
|
10.3
|
|
||
|
|
|
|
10.4
|
|
||
|
|
|
|
10.5
|
|
||
|
|
|
|
10.6
|
|
||
|
|
|
|
10.7
|
|
||
|
|
|
|
10.8
|
|
||
|
|
|
|
10.9
|
|
||
|
|
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10.10
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||
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10.11
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||
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21.
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||
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23.1
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||
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31.1
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||
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31.2
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||
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32.1
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|
||
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32.2
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||
|
|
|
|
101.INS
|
|
XBRL Instance Document
|
|
|
|
|
|
Date: February 28, 2019
|
BALCHEM CORPORATION
|
|
By:/s/ Theodore L. Harris
|
|
Theodore L. Harris, President and
|
|
Chief Executive Officer
|
/s/ Theodore L. Harris
|
|
Theodore L. Harris, President and
|
|
Chief Executive Officer (Chairman)
|
|
Date: February 28, 2019
|
|
|
|
/s/ Martin Bengtsson
|
|
Martin Bengtsson, Chief Financial Officer
|
|
and Treasurer (Principal Financial Officer)
|
|
Date: February 28, 2019
|
|
|
|
/s/ William A. Backus
|
|
William A. Backus, Chief Accounting Officer
|
|
(Principal Accounting Officer)
|
|
Date: February 28, 2019
|
|
|
|
/s/ Paul D. Coombs
|
|
Paul D. Coombs, Director
|
|
Date: February 28, 2019
|
|
|
|
/s/ David B. Fischer
|
|
David B. Fischer, Director
|
|
Date: February 28, 2019
|
|
|
|
/s/ Daniel E. Knutson
|
|
Daniel E. Knutson, Director
|
|
Date: February 28, 2019
|
|
|
|
/s/ Perry W. Premdas
|
|
Perry W. Premdas, Director
|
|
Date: February 28, 2019
|
|
|
|
/s/ Dr. John Televantos
|
|
Dr. John Televantos, Director
|
|
Date: February 28, 2019
|
|
|
|
/s/ Matthew Wineinger
|
|
Matthew Wineinger, Director
|
|
Date: February 28, 2019
|
|
1 Year Balchem Chart |
1 Month Balchem Chart |
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