Our buy rating for Balchem has not changed since June 2003. The company's strengths can be seen in such areas as its impressive revenue growth, solid stock price performance, and net income growth. For the fourth quarter of fiscal 2007, revenue leaped 106.0% year over year. This growth appears to have trickled down to the company's bottom line, improving earnings per share, as the company reported 26.9% growth in EPS in the most recent quarter. Net income also increased by 29.3% when compared to the fourth quarter of 2006, rising from $3.21 million to $4.16 million. Powered by its strong earnings growth and other driving factors, this stock has surged 27.8% over the past year.For fiscal 2007, management was pleased with the integrations of two earlier acquisitions, Chinook and Akzo, and expects those acquisitions to continue to contribute positively to Balchem's earnings. However, management also expects rising raw material costs to be a challenge in the near term. While the company has taken pricing steps to counteract the effects of these increased input costs, such actions in the fourth quarter were not enough to offset them completely. Additional price increases were made effective in January 2008, and management therefore expects fiscal 2008 to see continuing improvements in sales and earnings, while cautioning that global economic issues could affect the company's results.
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