Good morning, everyone. Thank you for joining our conference call this morning to discuss the results of Balchem Corporation for the quarter ending March 31, 2020. My name is Martin Bengtsson, Chief Financial Officer. And hosting this call with me is Ted Harris, our Chairman, CEO and President. Following the advice of our counsel, auditors and the SEC, at this time, I'd like to read our forward-looking statement. The release does contain or likely will contain forward-looking statements, which reflect Balchem's expectation or belief concerning future events that involve risks and uncertainties. We 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 our expectations, including risks and factors identified in Balchem's Form 10-K. Forward-looking statements are qualified in their entirety by this cautionary statement. I will now turn the call over to Ted Harris, our Chairman, CEO and President.

Thanks, Martin. Good morning, and welcome to our conference call. Before I get into the quarter, I'd like to discuss our response to the COVID-19 crisis. As we shared in the press release this morning, the COVID-19 response effort has been the primary focus for the company since early in the first quarter. Having 2 of our 3 manufacturing facilities in Europe, located in Italy, one of the first countries to be impacted by the pandemic. We got off to an early start to this situation, something that prepared us well for actions that needed to be taken in the rest of the world as the pandemic became more widespread. We were early to take actions around the safety of our employees, such as international, domestic travel restrictions; site visitation restrictions to both internal, external personnel; strict protocols to deal with necessary visitors to sites, for example, delivery drivers; elimination of large group gatherings; mandatory work from home for all non-manufacturing and non-research and development employees; separation of employees in smaller work groups to reduce density within work teams; and new protocols relative to personal protection equipment, including face masks and sanitation procedures. We also moved to ensure the continuity of our business and our ability to serve our customers with the important products and services they need by examining our supply chains and lowering risk by increasing inventory levels where appropriate as well as prepositioning certain goods in various locations in case one specific facility would be disruptive. Very early on, we activated our Crisis Management Team, or CMT, to manage the day-to-day activities relating to the pandemic response efforts and to make timely decisions. Some examples of the early decisions made by the CMT are holding a special Board of Directors meeting to ensure Board engagement and involvement in the response plan, creation of an individual response plan for the eventuality of positive cases within our employee base, based on the Centers of Disease Control and Prevention, or CDC guidelines; execution of a communication strategy to keep employees and customers informed of requirements, decisions and outcomes; and approval of special bonuses to nonexecutive employees to recognize the hourly and salaried workforce attendance and hard work during the pandemic. The combination of the various actions taken and the commitment and resilience of our employees have enabled us to keep all of our manufacturing sites open and running at near-normal conditions, allowing us to keep our customers supplied. Our research and development teams advancing our innovation efforts, and all of our other employees carrying on their responsibilities and functions remotely. We have had 2 employees that we are aware of, out of our approximately 1,400 employees, test positive for COVID-19. Both cases were early in the stages of the pandemic, and both employees are recovering well. We managed the cases effectively using our individual response plan, which is based on the CDC guidelines, and believe our early adoption of exposure mitigation actions played an important role in mitigating the impact of these cases on our employees and our company. From a financial perspective, the impact of the pandemic on Balchem in the first quarter was limited. However, the pandemic is far from over and the longer it carries on, the more likely it will be that impact on demand from our customers will be more significant. And therefore, we are studying the markets that we serve very closely, and at the same time, staying attuned to our customers' needs to aid in our ability to respond to demand shifts. We have stress tested our balance sheet and liquidity position under various significant downturn scenarios. And given our relatively low net debt position of 1.1x trailing 12 months adjusted EBITDA, cash on hand, access to our undrawn revolving credit facility and expected free cash flows, we are pleased with the strength of our balance sheet going into this uncertain market environment. Despite this relative strength, we are taking actions to reduce capital expenditures and noncritical cash expenses wherever possible to preserve cash. As we look ahead, sales over the next few quarters will be challenged by weaker demand in food services; the animal protein markets, including dairy protein; medical device sterilization due to fewer elective surgeries and lower fracking activities. We anticipate that there will be somewhat offsetting potential strengthening demand in grocery store food products, functional technologies aiding food preservation needs, immunity strengthening minerals and nutrients, and certain benefits from lower raw material costs. While we understand the market dynamics impacting these downsides and upsides is very difficult at this time to tell the specific dimensional impact of these forces, but our overall expectation is that we will experience sequentially lower overall revenues in the second quarter and for the duration of the pandemic, given the significant disruption on economic activity across global markets. We will watch each of these markets very closely and remain nimble, flexible and ready to respond accordingly. Balchem has dedicated significant resources to the COVID-19 response over the first quarter, and we are pleased with the results to date given the circumstances. I would like to take this opportunity to thank all of the approximately 1,400 employees of Balchem across the world for their tremendous and compassionate response to the pandemic that we are all living through. I could not be more proud to be part of the Balchem team. Now with regard to the first quarter of 2020, this morning, we reported record quarterly consolidated net sales of $174.4 million, which resulted in record first quarter net income of $19.8 million or $0.61 per share on a GAAP basis. A record first quarter non-GAAP net earnings of $26.4 million or $0.81 per share, exclude tax adjusted noncash amortization and other items, as detailed in our earnings release this morning of $6.7 million to facilitate comparative evaluation of operating performance versus the prior year period. These first quarter record non-GAAP net earnings of $26.4 million or $0.81 per share represent an increase of $2.7 million or $0.08 per share compared with the prior year quarter of $23.7 million or $0.73 per share. We also delivered solid quarterly cash flows from operations of $22.6 million for the first quarter of 2020, with quarterly free cash flow of $17.4 million. Our quarterly net sales of $174.4 million were 11.1% higher than the prior year comparable quarter. As noted in our earnings release this morning, in order to align with our strategic focus on health and nutrition, our allocation of resources and our evaluation of operating performance and given the previously reported 2019 reduction in portfolio scale of Industrial Products, we have revised our reporting segment structure to three reportable segments: Human Nutrition & Health, Animal Nutrition & Health and Specialty Products. This realignment has been retrospectively applied. Industrial Products sales and production and other minor business activities are included in other and unallocated. We achieved all-time record sales in all 3 of our reporting segments. With these record sales partially offset by a decrease in sales related to business formerly included in the Industrial Products segment, driven primarily by a decline in shale fracking activity. The impact of foreign exchange to our sales was a negative $0.5 million due to the weaker euro, driving a negative 33 basis point impact to our year-over-year sales growth. Our Q1 consolidated gross margin dollars of $55.3 million were up $6.2 million or 12.7% compared with $49.1 million for the same period in the prior year. Our consolidated gross margin percent was 31.7% of sales in the quarter, up 46 basis points from 31.3% in Q1 of 2019. The 46 basis point increase was primarily due to mix and certain lower raw material costs. Consolidated operating expenses for the first quarter of 2020 were $29.1 million as compared to $22.6 million in the prior year. The increase was principally due to incremental operating expenses related to the Chemogas and Zumbro acquisitions, and the prior year benefiting from the timing of an insurance recovery. Excluding noncash operating expense associated with amortization of intangible assets of $6.3 million, operating expenses were $22.8 million or 13.1% of sales. Looking forward, we will continue to focus on tightly controlling our operating expenses and leveraging our existing SG&A infrastructure. GAAP earnings from operations for the first quarter were $26.3 million, a decrease of $0.2 million or 0.8% compared to prior year. On an adjusted basis, as detailed in our earnings release this morning, earnings from operations of $34.7 million were up $1.6 million or 4.9% compared to $33.1 million in the prior year. Record adjusted EBITDA of $42.4 million was $2.7 million or 6.8% above the $39.7 million posted in the first quarter of 2019. Interest expense for the first quarter 2020 was $1.7 million, and our net debt was $179.6 million with an overall leverage ratio on a net debt basis of 1.1. The company's effective tax rates for the first quarter 2020 and 2019 were 19.3% and 24.2%, respectively. The decrease in the effective tax rate is primarily attributable to lower enacted tax rates from several states. Consolidated net income closed the quarter at $19.8 million, up 5.2% from the prior year quarter. This quarterly net income translated into diluted net earnings per share of $0.61 for the current year, an increase of $0.03 from last year's comparable quarterly result of $0.58. On an adjusted basis and as detailed in our earnings release, our first quarter-adjusted net earnings were $26.4 million or $0.81 per diluted share, up $2.7 million or 11.4% compared with $23.7 million or $0.73 per diluted share in the prior year quarter. We generated quarterly free cash flow of $17.4 million, and we closed out the quarter with $74 million of cash on the balance sheet. I'm now going to turn the call back over to Martin to go through the detailed results for each of our segments.

Thank you, Ted. For the quarter, our Human Nutrition & Health segment achieved all-time record quarterly sales of $95.5 million, an increase of $10.4 million or 12.2% from the prior year. The sales increase was primarily driven by higher sales within food and beverage markets, strong sales growth of chelated minerals and choline nutrients, and the beneficial impact of the Zumbro acquisition we closed in December 2019, partially offset by the elimination of sales associated with the Redding Pennsylvania manufacturing site that we divested in 2019. The impact of the COVID-19 pandemic on our HNH business was relatively limited in the first quarter. However, we do expect to see some impact to coming quarters as a portion of our HNH business serves the food service market, where end-market demand has been negatively impacted by all the shutdowns. Our Human Nutrition & Health segment also delivered first quarter earnings from operations of $12.1 million, a decrease of $1.6 million or 11.4% compared to prior year, primarily due to higher operating expenses resulting from the prior year benefiting from the timing of an insurance recovery, partially offset by the aforementioned higher sales. Excluding the effect of noncash expense associated with amortization of acquired intangible assets of $4.8 million and an inventory valuation adjustment of $0.2 million, adjusted earnings from operations for this segment were $17.2 million, a decrease of $1.5 million or 8% compared to $18.7 million in the prior year quarter. The decrease, as mentioned earlier, resulted from the prior year benefiting from the timing of an insurance recovery. Our Animal Nutrition & Health segment delivered all-time record quarterly sales of $48.6 million, an increase of 12.2% or $5.3 million compared to the prior year. The increase in sales was primarily the result of higher volumes in both the ruminant and monogastric markets. Ruminant volumes were up over 17% with strong demand for ReaShure, a rumen-protected choline as well as strong demand for AminoShure XM, a rumen-protected methionine that we launched in mid-2019. In terms of the dairy economics, we spoke on the last 2 earnings calls about the healthier environment with improved milk and protein prices for us to market our unique line of products for the health and nutrition of dairy cows. With the current COVID-19 pandemic, this environment is highly volatile at the moment with a high degree of uncertainty, and it's hard for us to predict what impact this may have on demand for our products. Monogastric volumes were up approximately 10%, with solid demand for aqueous and dry choline, strong growth in our chelated minerals and further supported by strong growth in our companion animal offerings. We continue to experience competitive price pressure in Europe, and we expect this to continue in the near term. Additionally, we noted increased demand related to certain European customers increasing their stock due to the COVID-19 uncertainties. And we estimate that this contributed to ANH growth of approximately 200 basis points in the first quarter. Animal Nutrition & Health quarterly earnings from operations of $8 million were up $2.8 million or 53% from the prior year quarter, primarily due to the aforementioned higher sales and certain lower raw material costs. Excluding the effect of noncash expense associated with amortization of acquired intangible assets of $0.2 million, adjusted earnings from operations for this segment were $8.2 million, an increase of $2.8 million or 51.2% compared to $5.4 million in the prior year quarter. Our Specialty Products segment delivered all-time record quarterly sales of $28.0 million as compared with $18.4 million for the prior year quarter. The increase of 52% was driven by higher sales of ethylene oxide for the medical device sterilization market due to both the contribution of Chemogas and higher legacy product sales, as well as increased volumes in the plant nutrition business. The impact of the COVID-19 pandemic on our medical device sterilization market has been relatively neutral with a decline in scheduled surgeries, largely offset by an increase in other medical equipment and supplies used to fight the COVID-19 pandemic. The Specialty Products segment also achieved record first quarter earnings from operations of $8.0 million versus $6.7 million in the prior year quarter, an increase of $1.3 million or 19.2%. The increase was primarily driven by the aforementioned higher sales, partially offset by mix and higher operating expenses due to the acquisition of Chemogas. Excluding the effect of noncash expense associated with amortization of intangible assets of $1.6 million, first quarter adjusted earnings from operations for this segment were $9.6 million compared to $7.4 million in the prior year, an increase of $2.2 million or 29.6%. Sales relating to business formerly included in the Industrial Products segment were $2.3 million, a decrease of $7.8 million or 77.3% from the prior year quarter. And earnings from operations were a loss of $0.2 million, a decrease of $1.9 million compared with the prior year quarter, driven primarily by decline in shale fracking activity. I'm now going to turn the call back over to Ted for some closing remarks.

Thanks, Martin. The Balchem team has responded extraordinarily well to the COVID-19 pandemic with a special caring for one another and a strong sense of purpose. With the safety of our employees as our top priority, we have continued to provide sterilants to the medical device industry, choline to the infant formula manufacturers, minerals and nutrients to the prenatal vitamin makers, mineral micronutrients to the agricultural industry, vital nutrients and minerals to the animal protein market, and food ingredients to food manufacturers, given the criticality of our products and services to our customers in global health and nutrition supply chains. These extraordinary efforts by the Balchem team helped to deliver solid sales growth in all 3 of our business segments and allowed us to deliver the strong net earnings and free cash flow that we reported today for the first quarter. The COVID-19 response effort has been the primary focus for the company since early in the first quarter and will continue to have to be the leading focus for some additional time period. As we head into the second quarter, we will once again have to dedicate substantial resources toward the response, and we recognize that there will be more impact on our company in the coming quarters. The resilience of our business model, combined with our net debt leverage ratio of 1.1x trailing 12-month adjusted EBITDA, strong balance sheet, cash generation and access to liquidity, will allow us to continue to invest in our key growth initiatives and long-term positioning of the company, while maneuvering our way through today's uncertain global market environment. I would now like to hand the call back over to Martin, who will open up the call for questions. Martin?

Thanks, Ted. This now concludes the formal portion of the conference. At this point, we will open up the conference call for questions.

Our first question is from Ram Selvaraju with H.C. Wainwright.

I was just wondering, if in a general sense, you could comment on how differential the COVID-19 impact is that you're seeing in the U.S. versus international markets, particularly Europe?

Yes, Ram, thank you for joining and for your question. We definitely experienced an earlier impact in Europe compared to the U.S., which is quite apparent. Overall, we observed more substantial prebuying and activity from our customers. We noted that around 200 basis points of the robust growth we experienced in ANH was attributed to COVID-19 related prebuying, mainly in Europe. For our regionally focused impact, it became clear that it was much more pronounced in Europe, with nearly all of the prebuying occurring there. We didn't experience a similar level of prebuying activities in the U.S. This may be due to the fact that in Europe, two of our three manufacturing sites were located in Italy, which was at the epicenter of the situation. As part of our strategy, we worked closely with our customers to encourage preordering, whereas in the U.S., our plants are spread across various states, and we didn’t feel as central to the situation. That really highlights the regional differences from my viewpoint.

Specifically within the U.S., since you mentioned that you have plants spread out across the U.S., and clearly we're seeing differential responses by the individual states regarding reopening, could you maybe give us some granularity on the locations of your plants relative to states responses to the pandemic, in particular with respect to how they're going about the reopening process? And how you expect that to impact the operations on an individual plant basis, to whatever extent you can?

It's important to highlight that all our manufacturing sites, including those in Italy, Louisiana, New York, Ohio, Utah, Missouri, and other locations, have operated under near-normal conditions throughout the pandemic. As states begin to reopen, this will mainly enhance shipments, driver availability, and similar aspects, which we've managed fairly well during this time to ensure timely delivery of our products to meet customer demand. The state reopenings will aid in these areas, but they won't drastically change our plant performance. The real impact will come when our office employees and sales teams return to their normal work routines. We've handled these functions remotely—whether it's finance, marketing, IT, or sales—quite effectively, which suggests we can afford to be cautious about rushing everyone back into the office. We will proceed with this, but we’ll take our time since our remote management has been successful. For example, in our Animal Nutrition & Health business, we've been conducting seminars through phone and video. Typically, we would have 30 to 40 sign-ups with 20 to 30 attendees. Recently, however, we've seen sign-ups increase to around 800 or 900 with 600 or 700 actually participating. This demonstrates our ability to manage even challenging sales functions using digital tools and video conferencing. Therefore, while the states reopening is certainly a positive development, it will not significantly affect how we operate our manufacturing sites at this time.

With respect to the demand for certain specific lines of products, I wanted to ask specifically about 3. In the context of the pandemic, do you expect ethylene oxide demand to rise? Secondly, I was wondering if you could elaborate on which Human Nutrition & Health products you expect to see the largest increase in demand due to the pandemic, for example, because of potential immune boosting capabilities or things like that? And then lastly, on the Animal Nutrition & Health product side, do you expect there to be any negative impact from livestock culling due to disruptions in the meat and dairy processing industries, which we've, of course, heard a lot about here in the U.S., but not really sure how that would impact your ANH division at all?

There are a lot of important topics to discuss, and we've highlighted them in our remarks. However, it’s challenging to predict outcomes. With ethylene oxide, we have observed a fairly balanced mix of positives and negatives. The reduction in elective surgeries has negatively affected the sterilization market, but the urgent need for medical devices during the COVID-19 pandemic has mostly counterbalanced that issue. We noted that our legacy volumes were slightly up in Q1, similar to previous trends. In the early part of April, we witnessed some minor declines, primarily due to delays in elective surgeries, but by the end of April, we saw a recovery. The market will likely remain dynamic. While we don’t anticipate a major surge from mask sterilization, it’s encouraging to see some states resuming elective surgeries, which should positively impact demand in the near future. Overall, I believe the situation with ethylene oxide is balanced in terms of positives and negatives. On the human nutrition front, we were happy to report continued growth in minerals and choline. Certain minerals, such as zinc, iron, and selenium, are recognized for their immunity-boosting properties. People are increasingly focusing on health and supplementing their diets with vitamins and minerals, leading to strong growth in Q1. Our choline volume increased by 18% year-over-year, while the volume of minerals rose by 24%. This growth is driven by ongoing awareness initiatives, the immune benefits of some minerals, and an overall increase in vitamin and mineral consumption. We expect this trend to persist into Q2 and beyond, potentially having a long-term impact on health consciousness. In the Animal Nutrition & Health sector, we experienced a robust environment in the early part of Q1, similar to Q4. Business was thriving, with high milk prices and increasing protein exports creating a positive atmosphere. However, this is the area with the most uncertainty at present. Although milk prices have decreased, they aren’t as low as initially expected and have started to recover a bit. Protein prices also dropped, but not to the extent anticipated and may continue to decline. April has been healthy for our Animal Nutrition & Health business, with no significant negative impacts observed yet. However, due to processing plant shutdowns, inventory backlogs, and livestock culling, we anticipate some eventual impact on our business. The extent of that impact will depend on how quickly processors can resume operations and process milk. There is considerable uncertainty, and our Animal Nutrition & Health team is monitoring the situation closely, as conditions seem to fluctuate daily. I thought it was essential to address this potential challenge in our prepared remarks.

Okay. And then just three very quick things. I was just wondering if you expect to take any goodwill impairment charges, specifically as a result of the COVID-19 pandemic? Secondly, if you are weighing the possibility of exiting the industrial choline segment entirely sometime over the course of the next few months? Or if you intend on staying in it for the long term, pending a recovery in the U.S. fracking industry? And then lastly, in a general sense, are you sort of making any internal predictions at this time regarding how long you expect pandemic-related impact to last? Is that sort of 2 or 3 quarters? Or is that on your end, pretty open-ended?

First, I'll again try to remember all three of those. But the goodwill question is, no, we absolutely do not expect. We feel like we've got plenty of cushion as we've gone through the audit and closing of the quarter and looked at the various businesses. So no, we do not expect anything from that perspective. Relative to exiting the industrial business. We do not have plans to exit the business. Again, we've obviously changed our reporting structure. It just didn't seem to make sense to us to be reporting out on a segment that's 1.3% of our revenue and really not aligned with our overall strategic focus from a corporate perspective. But as we've talked before, these are sales that leverage existing assets that would not go away if we were to stop selling into that market. I will say that we expect very minimal sales into the industrial market like we saw in Q1 for the foreseeable future, but do not expect to exit at this point in time. And relative to the length of the pandemic, I do think it is encouraging to see states open up, countries open up. And so at this point in time, we do feel as though Q2 really is the quarter where if we were to see a more significant impact, it will be in Q2 and then starting to come back after that. Again, if you think about the parts of our business that are impacted by the pandemic, it is elective surgeries that are one of the first things to start coming back, and there's a backlog there. So we think that will come back pretty quickly. Food service, you see various chains, whether it's Yum brand making announcements about how many thousands of stores will be opening up over the coming months and so forth. All of those things are positive for our company. And some of the strengths that we talked about, like the immunity minerals and just nutrients and so forth, generally speaking, I think we'll endure, and we think that the opening up will get some of these businesses that impact us up and running and instead of being down 80%, they'll be down 50% or 30% and so forth and have less and less an impact on us. So we think Q2 is the bigger quarter, and then we'll see improvement from there.

Stay safe and healthy. And I think you guys are doing a very credible job managing through this crisis. Be well.

We have a question from Mitra Ramgopal with Sidoti & Company.

I just wanted to start with a couple of housekeeping items. If you could give us the relative contributions from both Zumbro and Chemogas in the quarter? And also the potential loss or sales that were eliminated with the sale of the Redding manufacturing site that was divested?

Sure, Mitra. Zumbro and Chemogas together contributed approximately $15 million, and the Redding divestiture went the other way for about $1.5 million.

Okay. And I was just wondering if you have a sense, obviously, with COVID, just being compliant and being safe, et cetera. A number of companies, I'm sure including yourself, are incurring a lot of incremental costs. And I know it's difficult to balance it in time. But I don't know if you could give us a sense as to when we look at the quarter and the margins, et cetera, how much sort of incremental cost you're getting impacted by as a result of COVID?

Yes, I'll address that. In Q1, we did incur significant additional costs that we've chosen not to exclude from our financials for several reasons. These costs primarily stemmed from the additional incentive pay and bonuses provided to our hourly and salaried employees, particularly those on the front lines in our manufacturing facilities and labs. This amounted to approximately $600,000 to $700,000 for the quarter. We anticipate similar costs in Q2, estimating the total additional expenses related to our COVID-19 response to be roughly double that amount for the quarter. This includes expenses for enhanced cleaning measures and the purchase of various equipment like laptops and printers. Overall, we are looking at about $1 million to $1.2 million in Q1, with a comparable amount expected in Q2, after which we think these costs will stabilize.

Okay. No, that's great. And still on the subject of costs, I was wondering if you can give us a sense as to where you are on the ERP implementation? And how it's being impacted by COVID-19?

Yes. So we were really pleased with how we were progressing. And I think the last we reported out, we had something like 60% of our revenue in sites and people on the new system. It's operating well, and we're on budget and on plan. We have had to pause the go-lives at additional sites. And so as you know, the way we are implementing this was really not a big bang theory approach, but more of a 1, 2 sites at a time. And we have paused that. And so we think that, overall we will now be implementing through the end of 2020 and into the first quarter of 2021. We had originally hoped to be finished in the kind of midyear of this year, early second half of this year. So we're delayed probably 6 to 9 months. Some of the new acquisitions are contributing to that. But we still think that we can come in under budget. We had originally budgeted $12 million for the project. We can come in under budget. And we're taking this time to refocus the resources on the project on optimization, and we basically had a plan to leave optimizing until the end. And so we're kind of taking this pause period to dedicate resources to optimization efforts and actually finding that to be a great thing. So it's delayed, still on budget and we're still kind of pleased with the overall project.

Okay. Regarding the balance sheet financials, you have a strong balance sheet with minimal debt and cash reserves. However, I understand you mentioned plans to reduce capital expenditures and conserve cash. I'm curious about any potential changes to the dividend and if the current environment is creating acquisition opportunities that weren't available previously.

Yes. I will begin and then will pass it over to Martin. In February and early March, when we were confronted with the unprecedented uncertainties of the pandemic, we started stress testing and conserving cash due to concerns about the unknown. Much of that uncertainty has eased as we now have a clearer understanding of the situation. While some uncertainties remain, we feel confident about our balance sheet and the expected impact on our business moving forward. In fact, over the last month, we have paid down some debt, which we had previously avoided to conserve cash. We have no concerns in that area, and some of the language used reflects our early response to the situation. Now, I'll let Martin provide more details.

Sure. We're fortunate to have a strong balance sheet and low debt as we move forward. Our access to liquidity puts us in a good position. We have a revolving credit facility of $500 million, of which we're using about half. This leaves us with approximately $250 million available to draw on if needed, with the facility running through June 2023, so we have no immediate debt obligations. We're also generating favorable cash flows. After modeling various scenarios for potential disruptions, we expect to continue generating positive cash flows in most cases. As for capital expenditures, we're being cautious and spending less right now. Initially, we planned to spend between $30 million and $35 million, but we will likely reduce that by at least $5 million due to project delays and the current environment.

It is clearly challenging to consider or pursue acquisitions in the current environment. However, I am monitoring the situation as there may be some opportunities arising from it. Still, it's understandable that making progress on any deals is quite difficult at this time.

It's obviously a little harder to do a due diligence right now when it's hard to go see people. But I would say, the environment overall, we keep evaluating a number of targets at any one point in time as we always do. We're always looking at a couple of different options, and we continue to do so. So there is, what I would call, still an inflow and work processes that are going on to evaluate targets. They move a little bit slower. It's hard to go into a potential due diligence phase, et cetera, if we should wish to do so. Obviously, the bid-ask spread, I think, is widening a little bit in an environment like this between sellers and buyers based on the environment. But overall, we're continuing to do what we have been doing for the last few years and push forward with sort of the strategic areas we're looking for. And I'll leave it at that as I can't predict the future really there.

No, that's great. And then finally, just obviously, I know the tax rate is always a tough one to get right in. I know in the first quarter, it was a little lower than I was expecting. I was just wondering how we should view it for the rest of the year?

Yes. It was a little bit lower. We had, call it, 6 or 7 states there that changed their rates, which had a favorable impact to us, particularly on our deferred tax liabilities, which we appreciate. We had previously said sort of to use for your modeling a tax rate around 23% or so, I believe, when we had this call last time. I think given our first quarter or so, we probably have an opportunity to be somewhere in that range between 22% and 23% on a full year basis. So I would use somewhere in the range.

Our next questions come from the line of Lawrence Goldstein with Santa Monica Partners.

I thought you had finished asking questions, so I wouldn't have brought this one up, but since you're still taking questions, I'll ask it. What is the relevance of EO in relation to the pandemic?

Yes, thank you, Larry. I hope you're doing well and staying safe. I appreciate your question. Ethylene oxide, as a sterilant, doesn't have any particular special application related to the pandemic. However, there are syringes and catheters that are sterilized with ethylene oxide, along with some other equipment like ventilators. The strong push to manufacture and distribute these supplies has been beneficial. There has been some discussion about whether ethylene oxide could play a role in sterilizing masks that have already been used. While it can technically do that and some protocols are being promoted, it’s not the ideal application due to the need for a certain off-gassing period. Therefore, it doesn't represent a new opportunity for us. The main benefit has been in facilitating the production of adequate numbers of ventilators. We've likely been somewhat negatively affected by delays in elective surgeries, but we believe there is significant pent-up demand. For example, my wife needs knee surgery and has been waiting quite a while. As soon as she has the chance, she will go for it. While I don't want to generalize her situation to the entire market, we do believe there is pent-up demand, and as this unfolds over the year, we expect to see normal demand for ethylene oxide.

Our next question is from the line of Tony Polak with Aegis Capital.

Just wanted to know on CureMark. I know you didn't mention it. I assume there's nothing new. But could you give us a little feedback on whether you're continuing? Are there studies still going on? Or is that all done? And it's just a matter of the FDA.

Yes, you're correct, Tony. There isn't any news on that front. CureMark is still making progress on their end, and we are focused on refining our manufacturing strategy. Work is ongoing. Although the pandemic has caused some delays, it hasn't really affected this aspect from our perspective. We are making advancements on our responsibilities, and CureMark is doing the same. We hope to provide more updates next quarter.

At this time, we've reached the end of our question-and-answer session. I'll turn the floor back to Ted Harris for closing remarks.

Great. Thanks, Rob. Once again, thank you very much, everybody, for joining the call today and your continued support of the company. We really are very pleased with the strong record Q1 results, the resilience of our business model in the face of difficult market conditions. And I can't say it enough, the extraordinary response of the Balchem team. Just to let you know, on May 14, we will be participating in the 15th Annual BMO Farm-to-Market conference. It will, of course, now be virtual. But we'll be making a presentation and have a full day of one-on-one meeting schedule. So I'm sure we will be talking with some of you then. So thanks again for participating in the call today, and we look forward to reporting out Q2 results in late July. So thanks again.

This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.