Q2 2025 Balchem Corp Earnings Call
Ladies and gentlemen, thank you for standing by my name is desert Ray and I will be your conference operator today at this time I would like to welcome everyone to the Balkans second quarter 'twenty 25 earnings call. All lines have you. Please on mute to prevent any background noise. After the Speakers' remarks, there will be a question and answer session.
If you would like to ask a question. During this time simply press star followed by the number one on your telephone keypad. If you would like a Detroit question again press the star one I would now like to turn the conference over to Michael Dixon Chief Financial Officer, you may begin.
Good morning, everyone. Thank you for joining our conference call. This morning to discuss the results about from corporation for the quarter ending June 32025.
My name is Martin Bengtsson, Chief Financial Officer, and hosting this call with me is Ted Harris, our chairman President and CEO.
Following the advice of our counsel auditors and the FTC at this time I would like to read our forward looking statements.
Statements made in today's call that are not historical facts are considered forward looking statements.
Give no assurance that the expectations reflected in forward looking statements will prove correct.
Various factors could cause actual results to differ materially from our expectations.
<unk> risks and factors identified in <unk>. Most recent Form 10-K, 10-Q, and 8-K reports the company.
<unk> assumes no obligation to update these forward looking statements.
Today's call. Our commentary also include non-GAAP financial measures. Please refer to the reconciliations in our earnings release for further details.
I'll now turn the call over to Ted Harris, our chairman President and CEO. Thanks, Martin Good morning, and welcome to our conference call. We were extremely pleased with the financial results for the second quarter of 2025 as well as the ongoing strong performance of our company.
We delivered record second quarter consolidated sales adjusted EBITDA, adjusted net earnings and adjusted EPS with year over year sales and earnings growth in all three of our reporting segments.
Before we get into more detail on the quarter.
I'd like to make a few comments about the overall market environment, including the evolving global trade situation as well as some of the new science that has recently been published supporting our various minerals vitamins and nutrients and an important capacity expansion projects that we are working on.
We continue to see healthy demand across the vast majority of our end markets.
Our human nutrition and health segment continues to perform extremely well driven by strong demand for both our unique portfolio of nutrients and our food ingredients and solutions, which are benefiting from trends toward nutrient dense high protein high fiber and low sugar.
Or good for you.
Nutrition and formulation expertise brings considerable value to our customers.
In the animal nutrition and health segment, we delivered another quarter of year over year growth with healthy demand in both our mono gastric and ruminant businesses as market conditions.
Conditions continue to improve.
We're very pleased with the European Commission's recently announced provisional antidumping duties on Chinese choline of 95% to 120%, which is an important step and reestablishing a level playing field within Europe.
Final measures are expected by the end of the year and after many years of injury is pricing Chinese suppliers. These measures should undoubtedly helps contribute.
As it relates to the overall growth of our animal nutrition and health segment in the coming quarters.
Within our specialty products segment, both our performance gases business and our plant nutrition business are performing well driven primarily by higher demand.
Our outlook for the second half of the year also remains positive.
As discussed at length last earnings call. We believe we are relatively well positioned to effectively manage through the current global trade environment.
As a reminder, we have several advantages, including an intra region manufacturing and sales model for <unk>.
And that's the 85% the company's sales are manufactured in the same region, where they are sold.
Level supply.
With little reliance on China.
Our robust U S manufacturing footprint and strong market positions that historically have provided us with the ability to raise prices to offset rising costs.
Given today's global trade environment, which remained nimble and flexible to adjust accordingly as market conditions evolve.
Additionally, I'm excited to share some progress we have made in our scientific and clinical research pipeline, which continues to bolster our human nutrition and health segment.
Our current pipeline features over 20 active clinical studies focused on evaluating the benefits of certain nutrients, including vital Colleen Kay to vital <unk> MSM and Albion minerals. These.
These studies are integral to our strategy for entering new markets, expanding our ingredient categories and building consumer awareness.
In Q2 of this year.
Sponsored research and collaboration resulted in six significant publications and year to date, we have had a total of nine research studies published.
Like to highlight two specific studies that we are particularly excited about the first is focused on dietary choline and all timers disease. This NIH funded study examined the relationship between dietary choline intake and the risk of Alzheimer's dementia.
Data was gathered from 991 retirees participating in the rush memory and aging project in Chicago.
Monitored for an average of seven and a half years with 27% of participants developing Alzheimer's disease. The study found that a daily intake of Colgate above 350 milligrams was linked to a 51% reduction in the incidence of clinical all.
Tigers diagnosis, when compared to those consuming less than 200 milligrams per day.
These findings align with previous research such as the Framingham Heart study reinforcing the notion that higher choline intake is associated with a decreased risk of cognitive decline.
The second publication that I would like to highlight is related to the MSR.
Premier branded methyl sulfinyl methane and its favorable impact on exercise induced oxidative stress. This study explored whether <unk> MSM could offer protection against significant oxidative stress from intense exercise inexperienced runners participants receive.
500 milligrams of <unk> MSM or placebo for 27 days, followed by 1000 milligrams or placebo for another three days just before participating in a half marathon.
Blood samples taken before and after the exercise analyzed 785 M. Rnas connected to 47 immune response pathways. The results showed favorable modulation of 29 M. Rnas across four distinct immune response pathways within too.
Two to four hours post exercise. This suggests that the MSM could support faster muscle recovery and protect against oxidative stress triggered by a strenuous physical activity.
We believe the research findings associated with these two studies along with all of the findings from the other studies that have been published recently will further strengthen the science behind our premium branded nutrients and continue to help advance our ability to expand market penetration.
Additionally, I'd like to share that <unk> has announced its intent to build a new $36 million state of the art food ingredient and nutraceutical Microencapsulation manufacturing facility in Orange County, New York, just down the road from our legacy Microencapsulation site.
If approved by the county, the facility will ultimately more than doubled our Kansas capacity for its fast growing micro encapsulation technologies and further support our continued progress.
Some exciting progress being made on our strategic growth initiatives.
Now regarding the second quarter of 2025 financial performance. This morning, we reported record quarterly consolidated revenue of $255 million, which was nine 1% higher than the prior year quarter.
We delivered record quarterly GAAP earnings from operations of $51 million, an increase of 12, 3% versus the prior year.
Holidayed net income closed the quarter at $38 million, an increase of 19, 4%. This quarterly net income translated to diluted net earnings per share of $1.17 on a GAAP basis up 19 cents or <unk> 19 for <unk>.
Percent compared to the prior year.
On an adjusted basis, we delivered record quarterly adjusted EBITDA of $69 million, an increase of 11, 2% with an adjusted EBITDA margin of 27, 1% up 50 basis points from the prior year.
Our record quarterly adjusted net earnings were $42 million.
An increase of 16, 8% from the prior year, which translated to $1 27 per diluted share up 18, or 16, 5% compared to the prior year.
Overall, another excellent quarter for <unk> as we continue to deliver strong financial returns, while making good progress on our strategic growth initiatives.
With that I'm now going to turn the call back over to Martin to go through the second quarter consolidated financial results for the company and the results for each of our business segments in more detail.
Thank you Ted as Ted mentioned overall, the second quarter was a great quarter for about Cam with record sales earnings from operations adjusted EBITDA adjusted net earnings and adjusted earnings per share.
Our second quarter net sales of $255 million were nine 1% higher than prior year driven by strong performance in all three segments human nutrition, <unk> health animal nutrition, <unk> health and specialty products.
Our second quarter gross margin dollars were 93 million up 12, 2% compared to the prior year and our gross margin percent was 36, 4% of sales up 90 basis points compared to the prior year the.
The increase in gross margin percent was primarily due to a favorable portfolio mix, which was partially offset by certain higher manufacturing input costs.
Consolidated operating expenses for the second quarter were $42 million as compared to $37 million in the prior year. The increase was primarily due to higher compensation related costs and professional services, partially offset by lower amortization expense.
GAAP earnings from operations for the second quarter were a record $51 million, an increase of 12, 3% compared to the prior year.
On an adjusted basis as detailed in our earnings release. This morning, non-GAAP earnings from operations of $56 million were up 10% compared to the prior year.
Adjusted EBITDA was a record $69 million, an increase of 11, 2% compared to the prior year.
With an adjusted EBITDA margin rate of 27, 1%.
Net interest expense for the second quarter was $3 million, a decrease of $1 million compared to the prior year, driven primarily by lower outstanding borrowings.
Our net debt decreased to $125 million with an overall leverage ratio on a net debt basis 0.5.
The effective tax rates for the second quarters of 2025, and 2024 were 21, 9% and 22, 2% respectively.
The decrease in the effective tax rate from the prior year was primarily due to higher tax benefits from stock based compensation.
Consolidated net income closed the quarter at $38 million up.
Up 19, 4% from the prior year this.
This quarterly net income translated into diluted net earnings per share of $1 17.
An increase of <unk> 19, compared to the prior year.
On an adjusted basis, our second quarter adjusted net earnings were a record $42 million, an increase of 16, 8% from the prior year, which translated to $1 27 per diluted share.
Cash flows from operations were $47 million with free cash flow of $41 million and we closed out the quarter with $65 million of cash on the balance sheet.
As we look at the second quarter from a segment perspective.
Our human nutrition, <unk> health segment generated record sales of $161 million, an increase of eight 7% from the very strong results in the prior year.
Driven by higher sales within both the food ingredients and solutions businesses and the nutrients business.
Our human nutrition and health segment delivered record quarterly earnings from operations of $38 million, an increase of 14, 9% compared to the prior year.
This was primarily driven by the aforementioned higher sales and a favorable mix, partially offset by an increase in certain manufacturing input costs and higher operating expenses.
Second quarter adjusted earnings from operations for this segment were up $41 million, an increase of 10, 8%.
We're very pleased with the overall performance of our human nutrition and health segment, where we continue to experience solid and consumer demand for our unique portfolio of ingredients and solutions as.
As mentioned on our last call, we're seeing healthy growth once again across our food ingredients and solutions businesses at least partly due to the good for Ya trends, where our formulation expertise brings considerable value to our customers as well as continued growth of our nutrients business.
We believe our product offering is well positioned to meet growing market demands and that our strong market positions will enable us to continue to deliver healthy growth in human nutrition and health.
Our animal nutrition, and health segment generated quarterly sales of $56 million, an increase of 13, 1% compared to the prior year.
The increase was driven by higher sales in both the ruminant end mono gastric species markets.
Animal nutrition and health delivered earnings from operations of $4 million, an increase of 35% from the prior year.
The increase was primarily due to the aforementioned higher sales and a favorable mix, partially offset by an increase in certain manufacturing input costs and higher operating expenses.
Second quarter adjusted earnings from operations for this segment were $4 million.
An increase of 27, 8%.
We're once again pleased to see our animal nutrition and health segment delivered both top and bottom line growth in the second quarter.
And the continuation of the stabilization and recovery of the business.
The end markets for animal nutrition, and health remained relatively stable at the moment and we believe the animal nutrition and health business has good momentum and is well positioned to deliver solid growth in 2025.
As Ted mentioned earlier, the European Commission recently announced provisional antidumping duties on Chinese choline will certainly provide further support for the animal nutrition and health segments growth outlook.
Our specialty products segment delivered record quarterly sales of $37 million.
An increase of 6% compared to the prior year driven by higher sales in both the performance gases and plant nutrition businesses.
<unk> products also delivered record quarterly earnings from operations of $11 million, an increase of <unk>, 4% versus the prior year, primarily driven by the aforementioned higher sales, partially offset by higher operating expenses.
Second quarter adjusted earnings from operations for this segment were $12 million in.
An increase of one 3%.
We are very pleased with the performance of specialty products in the second quarter.
Both from a sales growth and margin perspective, and we expect healthy demand to drive another year of growth for the specialty products segment.
So overall the second quarter was another excellent quarter for <unk> and we believe we are well positioned for continued growth as we head into the second half of the year.
I'm now going to turn the call back over to Ted for some closing remarks.
Thank you Martin once again, we're extremely pleased with our second quarter financial results reported earlier. This morning as a company. We continue to show an ability to deliver results in a variety of market conditions, given our strong market positions and our value added portfolio of products.
And we remain confident in the long term growth outlook for <unk> as a company.
I will now hand, the call back over to Martin who will open up the call for questions. Thank you. Ted. This now concludes the formal portion of the conference at this point, we will open up the conference call for our questions.
Thank you we will now begin the question and answer session. If you have dialed in and would like to ask a question. Please press star one on your telephone keypad to raise your hand and join the queue.
If you would like to withdraw your question simply press Star. One again, if you are called upon to ask your question and our listening via speaker phone or device.
Pick up your handset to ensure that your phone is not on mute when asking a question again press star one to join the queue.
And our first question comes from the line of Bob Leduc with CJS Securities. Your line is open.
Good morning, Congratulations on the recent anti dumping news and thanks for taking my questions.
Alright, Thanks, Bob Bob Yeah. So.
Hopefully, obviously that'll get things back on track in the even playing field as you said could you and we've been focused on that a lot could you give us take a step back to give us a update on the macro environment.
Whats European mono gastric demand bike like overall demand now and how should that play out for you in and beyond the recovery in mono gastric correct, which hopefully follows what are the other drivers for growth in A&H that you see over the next six months to 18 months.
Thank you Bob yet on your question on mono gastric demand in Europe, I would say the demand picture is relatively stable and has been stable for quite some time, if you think about it from an overall market.
What we've seen is obviously that.
In terms of the Chinese supply the market share that they have had over the years have gone up and down depending on what period Youre looking at so now as we with this anti dumping provisional ruling.
What will play out over the coming quarters is obviously.
What market share will they have as we establish a more loving level playing field.
Chinese suppliers have a relatively significant market share in Europe at the moment.
And if these provisional duties remain at this level that puts their pricing sort of at par with the European producers.
And historically, we have seen sort of a preference to buy more local supply if the price is not too different right. So we could see a scenario where.
We get a higher market share in Europe, compared to where we are today, which would obviously be positive for the business, but the overall market itself is more of a low single digit growth market for sort of feed grade choline.
Driven more by sort of protein production in the region.
So if you then take a step back and look at A&H more broadly in terms of.
Growth, we do see quite a lot of growth ahead of us on the ruminant side, So think about our daily business.
Where theres still a lot of market penetration not just in the U S. But also in Europe and elsewhere in the world.
Whether it's more of innovation going on.
We are bringing new products to market you may remember last year, we launched the new.
Sure <unk> product, which is Aruba encapsulated lysine.
And the innovation funnel there continues to evolve as we work on bringing further products to market. So you will see.
Growth driven on the ruminant side.
And then also we have the companion animal business, which provides quite a bit of growth opportunities for us.
Based on the technologies we have.
The amount of gastric business will always be a little bit of a slower grower.
Relative to the other parts of the portfolio assets are more mature market more fully penetrated.
So hopefully that.
Provides some insight.
Yes, that's super Thank you and then kind of shifting to the U S and I guess, New York could you talk more about the investment in the manufacturing facility how much capacity I think you said doubles our capacity how much revenue does that add how long will this take.
<unk>.
What are the other benefits of standing up a new manufacturing facility as it relates to I don't know if its going to be margin or <unk>.
Faster throughput or market share.
What are you looking for from this new facility.
Yes, we are.
We're excited about this new investment Bob.
Something thats been honestly, a little bit of a long time coming.
The as you know kind of the foundation about Cam was on micro encapsulation.
Technology and manufacturing our founders were scientists technologists too.
Invented unique way to microphone capsulate food ingredients and they bought a small dairy and slate Hill New York.
And hence that was the start of our.
Company, and we have been manufacturing micro encapsulated products in slate held in New York.
Since that time since back in the sixties, we have since expanded to now make similar products in our reserve.
Missouri site as well as <unk>.
<unk> sees in Italy, but slate Hill remains our primary site, but as you can imagine it's a relatively old site and not very efficient because of the age of the site and the original construction and so forth it's very choppy.
So this.
As a purpose built microencapsulation site that will come with <unk>.
Significant efficiencies.
That we're looking forward to but most importantly, the expansion of.
Our production, we really have been.
A little bit tight on capacity for the last year or so in the business over the last couple of years has been growing at 20% 25%.
A year and so doubling.
The capacity is in order. So I think that the primary way to think about this is that this investment will allow us to continue to.
ROE that business at.
Double digit rates.
For the foreseeable future, whereas if we didn't make this investment we would be.
Restricted on air expansion, we have debottleneck and stretched capacity as best we can and.
It's time for a new footprint, but certainly it will also be more efficient just because of the newness of it and the fact that it's not a retrofitted dairy and it's now a purpose built microencapsulation facility.
Okay Super well, that's exciting I will jump back in queue, and let others ask questions, but thank you.
Thanks, Bob.
Okay.
Our next question comes from the line of Ram Silverado with H C. Wainwright. Your line is open.
Thanks, very much for taking my questions and congratulations on another very solid quarter.
Just to clarify on the previous point about the facility I was wondering if you could just.
Let us know specifically when you anticipate the facility fully coming online.
And how you are funding the facility construction costs, just wanted to clarify that thats, all coming from existing cash resources.
Yes, Bob.
Sorry, Rob Thanks for the question and thanks for your comments.
So.
From a capex perspective, as you know, we've been spending $35 million to $40 million a year on Capex and we really think that we can accomplish this.
New project within.
That sort of sized capex spending because it will happen over the course of <unk>.
Three years, and so we're not expecting a significant increase in our capex spending so yes, it will come from.
Existing.
Cash as well as our debt facility so.
We're not concerned at all about funds.
Funding this site and then I sort of spoke to it but we think that it will take.
Little over a couple of years to manufacturing this to manufacture our build this manufacturing site.
So we're expecting that we should be able to start production.
I'd say late in 2027 and <unk>.
2028 and <unk>.
We feel like we have enough capacity in our existing facility with all that debottlenecking that I talked about to allow us to grow to that point, but.
We really need this facility come online.
Now in that timeframe in order for us to continue to grow.
And thank you very much for that and then a couple of other items on the Anh. Firstly I was wondering if you could comment on the status of Ida choline pro flow and the progress Thats been made on integrating that specific product offering into a multi vitamin product.
Product lines and brands and how you expect that to evolve over the course of the remainder of this year I also wanted to ask about in a general sense Falcon strategic outlook on the human health front as opposed to nutrition.
On this call. It seems that you struck a markedly different tone with respect to the kinds of clinical studies that are being embarked upon and I was just wondering whether this might mark the start of <unk> move more concertedly into the human help front, maybe in the medical foods.
<unk>, maybe even into the pharmacy, the pharmaceuticals or more pharmaceutical like nutraceutical domain. If you could provide us with any insights on that front that would be much appreciated.
Sure Rob I'll try to I'll try to answer all of those questions.
Sure.
I think that this is a.
Both an industry trend as well as an ongoing evolution of our company and when I speak about an industry trend.
Good for you nature of.
<unk> foods.
Greener labels healthier eating.
Personally <unk> nutrition has been <unk>.
<unk> decade trend that.
We have benefited from but there certainly are some.
Accelerators to that multi decade trend.
Of late I think.
The advent of the <unk> one drugs is certainly.
Part of that that.
Has.
Kind of risen to prominence very very.
Quickly and results in kind of changing needs from a nutritional perspective, maybe even.
As you brought up a medical foods perspective, but we really are seeing.
Our customers launched new products that are specifically focused on people that are on <unk> drugs.
That obviously have kind of protein intake.
Issues potentially as well as.
Liver health concerns in just broad reaching.
Nutrition deficiencies that come with consuming less food and so forth and so.
Our our food ingredient formulation business I think plays well into that trend and of course our.
Nutrient portfolio.
<unk> well into that as well and so that the market trends are headed headed that way.
And.
We are moving along.
Our evolutionary path.
Toward being able to better and better service that we've been talking quite a bit lately about our investments in marketing as you know because that was sort of new too.
Kind of our air capabilities, if you will but the investment and.
Science and studies has really always been there. So I wouldn't want you to come away, saying that this is this is a shift relative to the studies I think we've been highlighting the marketing element.
Our strategy, but we've always tried to communicate that we wanted to add the marketing to our foundation Thats based on science and these studies are critical too.
The overall growth of the company the overall.
Penetration of markets, the building of awareness and and so forth. So we're continuing to do that.
While investing in marketing and I do think that.
Where the markets are evolving and where <unk> is evolving is a little bit more toward that health side as you describe it.
Not focused on becoming a pharmaceutical company, we're not focused on getting into.
<unk> pharmaceuticals, but I think those lines between.
Food nutrition, and pharma are going to become increasingly blurred.
Given the accelerators that are going on relative to that long standing trend and so I think thats what you are.
Noticing and maybe some of our updates and because we have been highlighting marketing so much we wanted to.
Remind everybody that we continue to invest in the science and relative to the new products that we have launched.
<unk> pro flow is as we've talked about.
Interesting new product that we have.
Facilities, the inclusion of choline into multi vitamin.
Solutions and.
We are.
<unk> to introduce that to customers and the reception is positive we still.
Cant report out on.
Any very large successes there, but it is just adding to our portfolio of solutions and we.
We were a little bit blocked out of the.
Multi vitamin component of the supplement market.
Now we have something that we can really talk about there. So we are excited about that yes, I think the one thing that I'm.
Almost more excited about right now is the.
The predominance of choline being included in nutritional beverages and other food.
<unk>.
And the more that we can support the inclusion of.
Co leaning these nutritional beverages any energy drinks and so for that say.
A significant market opportunity for us and we've seen some real wins in that area of late and are very excited about that.
Great and then just two very quick things for Martin as per usual just wanted to see if you could comment on.
The broader strategy with respect to debt reduction and what we might expect to see over the course of the remainder of this year. If it's steady as she goes or you expect to accelerate debt repayment and also if you could give us a sense of your perspective on where the effective tax rate Mike.
Can you break out for the second half of 2025.
Yes, absolutely.
Thank you.
If you could talk about debt reduction I think you have to think about it in the broader context of our capital allocation strategy right where.
Our primary focus has always been and invest in our organic growth opportunities that we have internally and that you see us doing that.
Obviously, we try to complement that with strategic M&A that we feel accelerates some of those growth initiatives.
And then we focus on paying down debt with cash that we have on hand that we are generating since we've continued to generate strong free cash flow sweep.
Pay down that debt and we'll continue to pay down that debt.
While at the same time as you've seen over the last decade, maintaining and growing that dividend.
You may have noticed if you look closely that we also occasionally do smaller share repurchases for anti diluted purposes, right. So we try to keep our share count relatively flat.
So we have done that as well.
To keep that.
But as you look forward, we will continue to generate good cash flows we will continue to pay down debt and I think sort of when we do our next M&A transaction, obviously that debt level will will rise again, and youll, probably see a repeat of history of <unk>.
Add ons on that and then we continue to pay it down so I don't think youll see any any change in strategy here, we'll we'll continue to pay down that debt for a little bit further on until the next M&A transaction happens.
And then on the if I can ask.
Yes on.
On the effective tax rate.
We're sort of humming along those 22% so far this year I think I've said before that so do we expect that to be between the 22 and the 23%.
For this year and as you look into the second half that's probably we're probably be towards the lower end of that range, so probably a little bit closer to the 20 twos on the 23.
It's what I would expect.
The second half of the year here.
Thank you so much.
Thanks, Rob.
Our next question comes from the line of Tony Polak Aegis. Your line is open.
Good morning.
Just wanted to know basically two questions on tariffs just the U S.
Do you at all.
And an update on Q remark, if I may.
Sure.
So on tariff.
<unk>.
It does affect us.
Certainly, but as we've said a few times, we really feel like we're relatively well positioned on the.
Call last quarter.
We talked about approximately a $20 million.
Packed.
From tariffs and that's primarily on.
US buying raw materials for the U S from international locations, and obviously, it's a little bit of a.
Kind of a moving target if you will but since the last call.
Some new.
Deals I guess, they're called have come into play specifically Europe, but also some countries that are important to us like Indonesia, Malaysia and Philippines.
If we look at that $20 million.
Impact number that we talked about last time.
Hasn't changed significantly it's up to approximately $25 million.
Today, and as we said last.
Time, we feel as though we can offset about half of.
That number through supply chain shifts and moves alternate suppliers ultimate manufacturing and so forth and thats continuing to play out as we expected and then the other half will have to come from pricing.
So and we're in the midst of.
Executing on that and remain confident that we'll be able to.
Accomplish that so overall, we feel as though.
Again, we're relatively well positioned we're going to be able to manage through this but it's certainly something that we're having.
Work and manage and it's taking energy and time, but we're not concerned about its overall impact on the.
The company's performance at this point in time based on what we know.
And relative to caremark.
We don't have a whole lot new to report relative to cure sure Mark we do understand that they continue to prepare to <unk>.
File the BLA.
That is really the next step we have done everything that we need to do from a manufacturing perspective and validation perspective in.
So for us so it really is today completely in the hands of.
The caremark team to file what they need to file with FDA.
<unk> ultimate approval in an era of understanding and based on air.
Regular calls with with them they are working hard on that with various consultants and so forth.
So.
Excited at some point in time in the future.
For them to reach that milestone are filing what they need to file with with.
With FDA, but I really don't have any insights into any more specificity on.
Exactly where they are in that process other than knowing that they are in the midst of it.
Thanks I appreciate it thank.
Thank you Tony.
And our last question comes from the line of Danielle <unk> with Sidoti Your line is open.
Okay.
Thanks, Good morning, guys. Thank you for taking my questions.
Just a couple quick ones for me here first within Anh, the eight 7% year over year growth I was hoping you might be able to break that down between nutrients and ingredients.
And then Martin I know you just discussed this but I wanted to confirm obviously quite a large step up in stock repurchases versus.
The second quarter of 2024, and just wanted to confirm from you that that is just an opportunistic repurchase due to valuation and not a shift towards more of an active return strategy.
Yeah, absolutely maybe.
Maybe just starting with.
The second part of the stock repurchase yes, Thats really just in line with sort of historic we repurchased share for anti dilutive purposes in 'twenty, two and in 'twenty, one and 23 in the early part of the year.
And then we took a little bit of a break from doing that after the last two acquisitions, we did and focused on lowering the debt instead.
And now we are sort of little bit opportunistically. So a good opportunity to buy back some stock for anti dilutive purposes. So it's not any larger change in strategy.
It's truly sort of the same just for anti dilutive purposes.
Yeah. So on your question on on.
Anh.
All of the.
Overall A&H sales growth was obviously, 13% in the quarter and actually there was growth on both sides right. So if you take the mono gastric more mature business.
It was up about 7% on them on a gastric side.
While the ruminant side was up around 30% so on a relative scale ruminant growing much faster than mono gastric, which is also what we would expect to see over time as it is.
Higher growth business compared to the mono gastric side.
I apologize Martin I was actually asking about age and age and nutrients versus ingredients.
Okay, well you got some good insights into A&H, yes, no that's fine.
Fantastic.
And we.
We are pleased that motto gastric.
Being a stable business continues to grow and then of course room in that we view as a growth business and 30% growth is.
Really good to see as well so on H H.
We grew about 9%.
And once again, a little bit like A&H both.
The food business as well as the.
Nutrients business grew and actually similar percentages so.
The nutrients business grew at eight 8% organically.
And the food ingredient solutions business grew at eight 6%.
Organically so.
Again very pleased with.
The growth that we're seeing in both of those and it's I would say pretty much played out as we expected last year.
We saw double digit growth in our nutrient business last year had quite low.
<unk> digit growth in.
In food and we thought that the growth in nutrients would moderate a little bit given the accelerated growth that we've seen but would continue to grow and so thats exactly whats happening, but the food.
Solutions business would pick up and so.
Really pleased with that in the nutrients business sort of stand out I would say our K too.
Product line is growing at high.
Double digit type type growth.
Very pleased with that.
In the 30% 40% type range.
Our <unk>.
Sam business growing at solid double digits in error.
Minerals business continues to grow very nicely with kind of a standout continuing to be magnesium with with growing awareness of that.
Important mineral and then in the food business, it's really across the portfolio.
Encapsulated as city Alliance I talked a little bit earlier about the need to expand manufacturing has been growing at.
20% plus.
But generally are good for you formulations, whether they be in kind of our powders are serial systems businesses are growing.
Quite.
Quite well so hopefully that gives you a little bit of an insight into.
The HMH growth.
Yeah, that's really helpful and again I'm, sorry for the earlier confusion, but thank you so much.
No problem.
Really appreciate the question.
That concludes the question and answer session I would like to turn the call back over to our Chief Executive Officer, Ted Harris for closing remarks.
So thank you all very much again for joining the call today, we really appreciate.
For the time today as well as your ongoing support and we look forward to reporting out our Q3 2025 results in a tober.
We will be participating in the HC Wainwright investment conference in New York City on September nine so we certainly hope to see some of you there.
Thank you again for joining.
Ladies and gentlemen that concludes today's call. Thank you all for joining and you may now disconnect.
Okay.
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