Balchem Corporation (NASDAQ:BCPC) continues to see success in its strategy of acquiring and expanding offerings to human and animal health and nutrition markets. In addition, the drag that industrial products has had on the business the last few years has turned around completely. 

Here's a look at the overall results and how each segment is performing. 

Woman holds a pill in a lab.

Image source: Getty Images.

Balchem Corporation: The raw numbers

Metric Q4 2017 Q4 2016 Year-Over-Year Change
Sales $159.7 million $140.8 million  13.2% 
Net income $42.0 million  $15.9 million  163.6% 
Diluted EPS $1.30  $0.50  160% 

Data source: Balchem Corporation Q4 2017 earnings release. 

What happened with Balchem Corporation this quarter? 

The sharp jump in net income is deceptive because it stems from a one-time event like we've seen time and again this earnings season due to tax reform. But even without that one-time event, results were very strong. 

  • Net income was helped by a $24.9 million benefit from the Tax Cuts and Jobs Act passed in December. Without the tax gain, net income would have been $21.9 million, a 2.4% increase from adjusted earnings a year ago, or $0.68 per share. 
  • Cash flow from operations rose from $27.8 million a year ago to $31.2 million in the fourth quarter. 
  • Human nutrition and health segment sales rose 9.8% to $83.3 million and earnings from operations were up 17.2% to $12.1 million. 
  • Animal nutrition and health sales were up 4.7% to $44.6 million and earnings from operations were "slightly higher" at $8.1 million. 
  • Specialty products revenue rose 2.1% to $16.5 million, but earnings from operations fell $0.5 million to $4.8 million as mix and higher raw materials costs hurt margins. 
  • Industrial products segment sales were up 141.8% to $14.9 million as more shale drilling increased choline and choline derivatives sales. Earnings from operations increased 116.8% to $2.0 million. 

What management had to say

Balchem's two largest segments in human and animal health and nutrition continue to be the growth drivers management is investing in. In the fourth-quarter earnings release, CEO Ted Harris said: 

As we focus now on 2018, we will continue to drive strategic growth initiatives, particularly in Human Nutrition & Health and Animal Nutrition & Health, through both organic investments in new manufacturing capabilities and new product development, as well as by pursuing strategic acquisitions. 

Given the strength in both markets, the focus could drive continued growth well beyond 2018. 

Looking forward

The industrial and specialty products businesses are starting to turn around for Balchem, but the strength continues to be animal and human products. I don't see that trend changing anytime soon as today's consumers are clearly focusing on their health and wellness and that of their pets.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.