BALCHEM CORPORATION (AMEX: BCP)
                         -------------------------------
       Reported as follows (unaudited) for the quarter ended June 30, 2006
                ($000 Omitted Except for Net Earnings Per Share)

                   All per share information has been adjusted
               to reflect the three for two stock split effected
                 in the form of a 50% stock dividend declared on
                               December 15, 2005.

                       For the Three Months Ended June 30,
                       -----------------------------------


                                                           2006            2005
                                                           ----            ----

Net sales                                               $ 25,100        $ 19,484
Gross profit                                               8,800           7,112
Operating expenses                                         3,930           2,833
                                                        --------        --------
Earnings from operations                                   4,870           4,279
Other income (expense)                                       (57)             67
                                                        --------        --------
Earnings before income tax expense                         4,813           4,346
Income tax expense                                         1,758           1,616
                                                        --------        --------
Net earnings                                            $  3,055        $  2,730
                                                        ========        ========

Basic net earnings per common share                     $   0.26        $   0.24
Diluted net earnings per common share                   $   0.25        $   0.23


                        For the Six Months Ended June 30,
                        ---------------------------------


                                                          2006            2005
                                                          ----            ----

Net sales                                               $ 49,697        $ 38,824
Gross profit                                              17,022          14,294
Operating expenses                                         7,683           5,984
                                                        --------        --------
Earnings from operations                                   9,339           8,310
Other income (expense)                                       (81)            105
                                                        --------        --------
Earnings before income tax expense                         9,258           8,415
Income tax expense                                         3,345           3,117
                                                        --------        --------
Net earnings                                            $  5,913        $  5,298
                                                        ========        ========

Basic net earnings per common share                     $   0.51        $   0.46
Diluted net earnings per common share                   $   0.49        $   0.44

<PAGE>

Balchem Corporation (AMEX: BCP)                                                2

         Record net sales of $25.1  million were  achieved for the quarter ended
June 30, 2006.  This is an increase of 28.8% above the $19.5  million  result of
the prior year  comparable  quarter.  Record net earnings for the second quarter
were $3.1 million,  an increase of $0.3  million,  or 11.9% as compared with the
same period last year,  and includes  $0.2  million of expense to recognize  the
impact of SFAS 123R (equity  based  compensation)  which the Company  adopted on
January 1, 2006.  This $3.1 million in net  earnings  resulted in an increase in
diluted net  earnings of 8.7% to $0.25 per share for the second  quarter of 2006
versus $0.23 per share for the comparable quarter of the prior year.

         In the second  quarter of 2006,  sales of the  Encapsulated/Nutritional
Products  segment  were a record  $10.5  million,  an increase of 55.3% from the
prior year  comparable  quarter.  This  includes  $2.5 million of sales from the
Chelated Minerals Corporation (CMC) and Loders Croklaan acquisitions. Additional
organic  growth  was  derived  principally  from  strength  in  sales  of  food,
nutritional  and human  choline  products,  which grew 18.6% over the prior year
comparable  period.  Earnings from operations for this segment improved 66.3% to
$1.01  million  in the  current  period  as  compared  to $0.61  million  in the
comparable  quarter  of the  prior  year.  The ARC  Specialty  Products  segment
generated  earnings from  operations of $2.8 million on quarterly  sales of $8.0
million,  which  were  5.3%  higher  than the  prior  year  comparable  quarter,
principally a result of increased sales of ethylene oxide products and propylene
oxide.  Earnings from operations for this segment were 5.5% lower than the prior
year quarter,  primarily a result of higher raw material costs and the inclusion
of $0.11 million for the aforementioned  SFAS 123R expense.  The BCP Ingredients
segment  achieved  quarterly  sales of $6.6 million,  increasing  28.6% over the
prior year comparable  quarter,  with continued  strong sales volumes in dry and
aqueous  choline  products  for the  poultry and swine  industries.  The overall
increase  in sales  volume  and a  favorable  product  mix drove  earnings  from
operations  for this  segment,  improving  46.9% to a record  $1.1  million,  as
compared to $0.74 million in the prior year comparable quarter.

         Consolidated  gross  profit for the  quarter  ended June 30, 2006 was a
record $8.8  million,  or an increase of 23.7%  compared to $7.1 million for the
prior year  comparable  period,  primarily  due to the above  noted  increase in
sales. Operating (Selling, R&D, and Administrative)  expenses increased 38.7% to
$3.9 million, as compared to $2.8 million for the prior year comparable quarter,
equaling  15.7% of net sales.  This was an increase  from the 14.5% of the prior
year,  and was  primarily due to the inclusion of $0.24 million of the SFAS 123R
expense,  additional amortization and selling expense resulting principally from
the CMC  acquisition  and  expenditures  in  support  of our new  pharmaceutical
initiative.

         For the six months ended June 30, 2006, net sales have increased  28.0%
to $49.7 million  compared to $38.8 million in the comparable prior year period.
Excluding  the above  noted  acquisitions  we have  realized  growth in the core
segments of 16.7%, year over year. Net earnings  increased 11.6% to $5.9 million
or $0.49 per diluted share, from $5.3 million, or $0.44 per diluted share in the
prior year  comparable  period.  Results for the six months  ended June 30, 2006
includes SFAS 123R expense of $0.46 million, in this initial year of adoption.

         Balance sheet ratios and our cash flow continue to be strong.  Early in
the first quarter,  we borrowed $10 million,  the proceeds of which were used to
complete  the funding of the CMC

<PAGE>

Balchem Corporation (AMEX: BCP)                                                3

acquisition.  On June 30,  2006,  net cash and  investments  were $2.6  million,
reflecting  second quarter  pre-payments of $5.0 million of the previously noted
borrowings, reducing outstanding debt to $1.5 million at the end of the quarter.

Outlook
         Commenting on 2006, Dino A. Rossi,  President and CEO of Balchem,  said
"We are very pleased with the growth of all  segments of the  business,  and are
especially  pleased  with  the  integration  and the  accretive  results  of the
acquired CMC  business.  In the second  quarter,  we  recognized a 7% sequential
gross margin  improvement from the first quarter of 2006, due to the product mix
and the previously discussed price increases,  which were put in place to offset
raw material cost increases.  We also realized  improvement at this level due to
the successful integration of the recent CMC acquisition. Our operating expenses
increased  as  planned  by  approximately  $1.1  million  from  the  prior  year
comparable quarter as we added additional technical and sales personnel with the
acquisition  of CMC. We also spent  approximately  $0.3 million  targeted at our
efforts in the  pharmaceutical  market and $0.24  million was from SFAS 123R. We
expect to  continue  building  on our larger  business  and human  capital  base
throughout 2006,  achieving double digit growth in sales and earnings over 2005,
and positioning for sustainable growth, going forward".

Non-GAAP Disclosures
         Certain disclosures prepared in accordance with U.S. Generally Accepted
Accounting  Principles  (GAAP)  included  in this  release  are  accompanied  by
disclosures  that are not  prepared  in  conformity  with GAAP.  Management  has
determined that inclusion of these disclosures  provides  investors a meaningful
presentation  of the  company's  operating  results  in  addition  to  the  GAAP
disclosure.  These non-GAAP condensed consolidated  statements of operations are
provided to enhance overall  understanding of our current financial  performance
and how management  views operating  results.  The presentation of this non-GAAP
information is not intended to be considered in isolation or as a substitute for
results  prepared in accordance with GAAP and is not  necessarily  comparable to
non-GAAP  results  published by other  companies.  This non-GAAP  disclosure and
management's rationale for providing it is as follows:

         The  reported  net earnings for the three and six months ended June 30,
2006 includes  expenses related to the expensing of stock options and restricted
stock awards in  accordance  with  Statement of Financial  Accounting  Standards
(SFAS) No. 123R "Share Based  Payments," which the Company adopted on January 1,
2006. Given the significance and non-cash nature of this expense relative to the
operating results for the periods presented, this expense has been excluded from
the following second quarter and June 30th year-to-date non-GAAP  presentations.
Excluding  the impact of the SFAS 123R  charges,  net earnings  increased  19.4%
quarter-over-quarter  to $3.3 million, or $0.27 per diluted share. These results
are comparable to net earnings of $2.7 million,  or $0.23 per diluted share, for
the  previously   reported  second  quarter  of  2005,  which  did  not  require
recognition of SFAS 123R charges. Excluding the impact of the SFAS 123R charges,
net  earnings  increased  20.3%  year-over-year  to $6.4  million,  or $0.52 per
diluted share.  These results are  comparable to net income of $5.3 million,  or
$0.44 per diluted share,  for the previously  reported six months ended June 30,
2005, which did not require recognition of SFAS 123R charges.

<PAGE>


Balchem Corporation (AMEX: BCP)                                                4




Reconciliation of non-GAAP Earnings
(in 000's, except per share data)
                                               Three Months Ended June 30, 2006

                                                GAAP      FAS 123R     Non-GAAP
                                                ----      --------     --------
                                                Basis                 Pro-Forma
                                                -----                 ---------

Net sales
                                              $ 25,100    $     --    $ 25,100
Gross profit
                                                 8,800          27       8,827
Operating expenses                               3,930        (235)      3,695
                                              --------    --------    --------
Earnings from operations                         4,870         262       5,132
                                                   (57)         --         (57)
                                              --------    --------    --------
Earnings before income tax expense               4,813         262       5,075
                                                 1,758          57       1,815
                                              --------    --------    --------
Net earnings                                  $  3,055    $    205    $  3,260
                                              ========    ========    ========

Basic net earnings per common share           $   0.26    $   0.02    $   0.28
Diluted net earnings per common share         $   0.25    $   0.02    $   0.27

                                                 Six Months Ended June 30, 2006

                                                 GAAP      FAS 123R     Non-GAAP
                                                 ----      --------     --------
                                                 Basis                 Pro-Forma
                                                 -----                 ---------

Net sales
                                               $ 49,697    $     --    $ 49,697
Gross profit
                                                 17,022          54      17,076
Operating expenses                                7,683        (470)      7,213
                                               --------    --------    --------
Earnings from operations                          9,339         524       9,863
                                                    (81)         --         (81)
                                               --------    --------    --------
Earnings before income tax expense                9,258         524       9,782
                                                  3,345          65       3,410
                                               --------    --------    --------
Net earnings                                   $  5,913    $    459    $  6,372
                                               ========    ========    ========

Basic net earnings per common share            $   0.51    $   0.04    $   0.55
Diluted net earnings per common share          $   0.49    $   0.03    $   0.52


Quarterly Conference Call
         A quarterly conference call will be held on Tuesday,  August 1, 2006 at
2:00 PM Eastern  Daylight  Savings  Time  (EDT) to review  second  quarter  2006
results.  Dino A.  Rossi,  President  and  CEO,  and  Frank  Fitzpatrick,  Chief
Financial  Officer,  will host the call.  We invite you to listen to the call by
dialing toll-free (877) 407-8289, or local (201) 689-8341, five minutes prior

<PAGE>

Balchem Corporation (AMEX: BCP)                                                5

to the scheduled start time of the conference  call. The conference call will be
available for digital replay through August 5, 2006, by dialing  toll-free (877)
660-6853,  or local (201)  612-7415,  and using  account #298 and  conference ID
#208354. This press release, and its accompanying financial exhibits,  will also
be available on the company  website,  www.balchem.com,  prior to the conference
                                       ---------------
call.


Segment Information
         Balchem Corporation consists of three business segments:  ARC Specialty
Products,  Encapsulated/Nutritional  Products, and BCP Ingredients.  Through ARC
Specialty  Products,  Balchem provides  specialty-packaged  chemicals for use in
healthcare and other industries. The  Encapsulated/Nutritional  Products segment
provides proprietary microencapsulation and agglomeration solutions to a variety
of  applications  in  the  food,  pharmaceutical,  human  and  animal  nutrition
marketplaces.  BCP Ingredients  manufactures  and supplies  choline chloride and
derivatives used primarily in the poultry and swine industries.

Forward Looking Statements
         This  release  contains  forward-looking   statements,   which  reflect
Balchem's  expectation or belief concerning future events that involve risks and
uncertainties.  Balchem can give no assurance that the expectations reflected in
forward  looking  statements  will prove correct and various factors could cause
results to differ  materially from Balchem's  expectations,  including risks and
factors  identified  in Balchem's  annual report on Form 10-K for the year ended
December 31, 2005. Forward-looking statements are qualified in their entirety by
the above cautionary statement. Balchem assumes no duty to update its outlook or
other forward-looking statements as of any future date.

Contact:  Karin McCaffery, Telephone:   845-326-5635

Selected Financial Data
($ in 000's)

Business Segment Net Sales:
--------------------------------------------------------------------------------
                                     Three Months Ended       Six Months Ended
                                           June 30,               June 30,
                                       2006        2005       2006        2005
--------------------------------------------------------------------------------
Specialty Products                  $  8,009    $  7,603   $ 15,960    $ 14,736
Encap/Nutritional Products            10,539       6,787     20,328      14,628
BCP Ingredients                        6,552       5,094     13,409       9,460
--------------------------------------------------------------------------------
Total                               $ 25,100    $ 19,484   $ 49,697    $ 38,824
--------------------------------------------------------------------------------

Business Segment Earnings (Loss):
--------------------------------------------------------------------------------
                                     Three Months Ended       Six Months Ended
                                           June 30,               June 30,
                                       2006        2005       2006        2005
--------------------------------------------------------------------------------
Specialty Products                  $  2,764    $  2,926   $  5,536    $  5,531
Encap/Nutritional Products             1,013         609      2,052       1,486
BCP Ingredients                        1,093         744      1,751       1,293
Other income (expense)                   (57)         67        (81)        105
--------------------------------------------------------------------------------
Earnings bef. income taxes          $  4,813    $  4,346   $  9,258    $  8,415
--------------------------------------------------------------------------------

<PAGE>

Balchem Corporation (AMEX: BCP)                                                6

Selected Balance Sheet Items
                                                       June 30,    December 31,
                                                       --------    ------------
                                                         2006          2005
                                                         ----          ----
Cash                                                   $ 2,580       $12,996
Accounts Receivable                                     12,140        11,521
Inventories                                              9,454         8,540
Other Current Assets                                     1,757         2,209
                                                       -------       -------
Current Assets                                          25,931        35,266

Property, Plant, & Equipment (net)                      25,540        24,400
Other Assets                                            32,391        15,475
                                                       -------       -------
Total Assets                                           $83,862       $75,141
                                                       =======       =======

Current Liabilities                                    $ 8,366       $ 9,150
Other Long-Term Obligations                              7,454         5,058
                                                       -------       -------
Total Liabilities                                       15,820        14,208

Stockholders' Equity                                    68,042        60,933
                                                       -------       -------
Total Liabilities and Stockholders' Equity             $83,862       $75,141
                                                       =======       =======