Renewed Focus on Generating Higher Cash Flow
and Returns on Capital from Core Businesses
Company Announces Termination of Lithium
Project
Compass Minerals (NYSE: CMP), a leading global provider of
essential minerals, today reported fiscal 2024 first-quarter
results. Unless otherwise noted, it should be assumed that time
periods referenced below are on a fiscal year basis.
MANAGEMENT COMMENTARY
"We are refocusing our efforts on improving cash flow generation
and returns on capital in our core Salt and Plant Nutrition
businesses through rigorous cost management and reduced capital
intensity," said Edward Dowling, president and CEO. "Over many
decades, our company has developed an exceptional set of unique
assets that are virtually irreplicable, enjoy durable competitive
advantages and have strong leadership positions in the marketplace.
I am confident that by executing on a strategy that emphasizes
getting back to the basics in our core businesses while nurturing
the growth of our emerging Fire Retardants business, we will
increase the cash generation capability of our enterprise, drive
higher returns on capital and unlock the intrinsic value of our
business for our shareholders over time."
QUARTERLY FINANCIAL
RESULTS
(in millions, except per share
data)
Three Months Ended Dec.
31, 2023
Three Months Ended Dec.
31, 2022
Revenue
$
341.7
$
352.4
Operating (loss) earnings
(55.3
)
27.9
Adjusted operating earnings*
22.0
28.2
Adjusted EBITDA*
59.4
61.8
Net loss
(75.1
)
(0.3
)
Net loss per diluted share
(1.83
)
(0.01
)
Adjusted net earnings (loss)*
2.2
—
Adjusted net earnings* per diluted
share
0.05
—
*Non-GAAP financial measure.
Reconciliations to the most directly comparable GAAP financial
measure are provided in tables at the end of this press
release.
QUARTERLY HIGHLIGHTS
- Adjusted EBITDA of $59.4 million on similar margins year over
year;
- In the Salt business, reported a 7% and 8% increase
year-over-year in both operating earnings and adjusted EBITDA,
respectively, with a nearly 33% improvement in adjusted EBITDA per
ton to $23.01 compared to the corresponding period last year;
- Plant Nutrition sales volumes increased 67% year over year to
75 thousand tons, reflecting the normalization of demand in core
West Coast markets versus the comparable prior-year period;
and
- Announced reduction in 2024 capital expenditure guidance by 6%
at midpoint, reflecting an initial step toward realigning
investment priorities to reduce capital intensity and improve
returns on capital.
SALT BUSINESS SUMMARY
Winter weather in the company's core markets during the first
quarter of 2024 was exceptionally weak, marking one of the mildest
quarters in decades. Despite substantially lower volume, operating
earnings rose 7% year over year to $50.5 million and adjusted
EBITDA increased to $65.7 million, up 8% from the prior-year
period. Adjusted EBITDA per ton improved 33% to $23.01.
Salt revenue totaled $274.3 million and was down 11% year over
year, driven by a 19% year-over-year sales volume decline,
partially offset by a 10% increase in average sales price. In the
highway deicing business, the company's value-over-volume
commercial strategy ahead of the 2024 deicing season resulted in a
7% increase in average highway deicing selling prices while sales
volumes declined 22% due to a combination of exceptionally mild
weather in the first quarter of the year and the impact of lower
committed bid volumes compared to the prior-year bid season.
Consumer and industrial (C&I) pricing rose 3% year over year to
approximately $195 per ton, while sales volumes declined by 5%
primarily due to lower retail deicing demand reflecting the
aforementioned mild weather across the company's served
markets.
Distribution costs per ton were essentially flat year over year,
while all-in product costs (defined at the segment level as sales
to external customers less distribution costs less operating
earnings) per ton rose 9% from the comparable prior-year quarter
due to C&I sales being a higher percentage of the sales mix
this quarter and fewer sales tons to absorb costs in the
period.
PLANT NUTRITION BUSINESS
SUMMARY
Plant Nutrition revenue for the quarter totaled $49.7 million,
up 19% year over year on strong volume. Higher demand in the
company's core West Coast markets resulted in a return of sales
volumes in the quarter to historical norms, with volumes up 67%
year over year. The average segment sales price for the quarter was
down 29% year over year to approximately $660 per ton, reflecting
excess supply of potassium-based fertilizers globally. Per-unit
distribution costs for the quarter decreased 11% year over year due
to lower fuel rates and increased sales rates to absorb fixed
costs. All-in product costs per ton increased 4% year over
year.
Operating loss in the Plant Nutrition business totaled $2.3
million for the quarter, down from operating earnings of $11.0
million in the prior-year quarter. Adjusted EBITDA declined to $6.1
million versus $19.3 million year over year.
FORTRESS NORTH AMERICA
UPDATE
The company recognized slightly better results related to the
take-or-pay provisions of its calendar year 2023 contract with the
U.S. Forest Service (USFS) in the first quarter with operating
earnings and adjusted EBITDA of $13.1 million.
Management remains in negotiation on the terms of its calendar
year 2024 USFS contract, which is expected to be finalized prior to
deployment for the upcoming fire season.
Subsequent to quarter end, Fortress' second-generation aerial
product, FR-105 HV, achieved fully qualified status on the USFS's
Qualified Product List. FR-105 HV is the next generation of the
FR-100 series powder concentrate product and includes an enhanced
colorant that results in improved visibility of dispersed product
in aerial operations.
LITHIUM PROJECT
TERMINATION
Compass Minerals has determined that it is no longer in the best
interests of shareholders to continue the pursuit of the lithium
brine project at its Ogden, Utah operation at this time. As part of
this action, Chris Yandell, head of lithium, has departed the
company and the lithium development team has been disbanded.
"The environment surrounding our lithium project today is
markedly different than the one that existed a couple of years ago
when we started down this path. The simple fact is that the
regulatory risks have increased significantly around this project.
When combined with other changes to the commercial landscape, it
became clear that the risk-adjusted returns on this project are
inadequate to justify the investment," said Dowling. "I want to
thank Chris and the exceptional team he assembled for their efforts
to advance the project over the last couple of years. We wish those
who are leaving the company the best in their future
endeavors."
As a result of the decision to terminate its lithium project,
the company recognized a total of approximately $77.3 million of
expense in the first quarter including the impairment of certain
lithium project assets and future commitments (approximately $74.8
million, reported in Loss on impairment of long-lived assets, net
in the consolidated statement of operations) and restructuring
charges associated with the departure of certain lithium and Ogden
team members (approximately $2.5 million, reported in Other
operating expense in the company's consolidated statement of
operations). These items are included as adjusting items for the
calculation of adjusted operating earnings and adjusted EBITDA.
Compass Minerals will continue to monitor and engage in
legislative and regulatory processes in Utah to preserve the
long-term optionality of the lithium potential at its Ogden
operations.
CASH FLOW AND FINANCIAL
POSITION
Net cash used in operating activities amounted to $65.6 million
for the three months ended Dec. 31, 2023, compared to net cash
provided by operating activities of $2.1 million in the prior year.
The change year over year was due primarily to increased working
capital requirements.
Net cash used in investing activities was $36.0 million for the
three months ended Dec. 31, 2023, up $15.9 million year over year
principally driven by higher capital spending. Total capital
spending for the three months ended Dec. 31, 2023, was $35.3
million, which included approximately $12.2 million in capital
spending related to the company's lithium project.
Net cash provided by financing activities was $100.9 million for
the three months ended Dec. 31, 2023, which included net borrowings
of $108.1 million, partially offset by dividends paid on our common
stock of $6.4 million. In the prior year, net cash provided by
financing activities reflected the proceeds from a private
placement of common stock and the pay down of a portion of
outstanding debt.
The company ended the quarter with $245.8 million of liquidity,
comprised of $38.3 million in cash and cash equivalents and $207.5
million of availability under its $375 million revolving credit
facility.
2024 OUTLOOK
Guidance for 2024 for the Salt and Corporate segments remains
unchanged, while adjustments to the outlook for Plant Nutrition are
reflected below.
Salt Segment Range of
Outcomes
Mild Winter1
2024 Range2
Strong Winter1
Highway deicing sales volumes (thousands
of tons)
8,000
9,300 - 10,000
11,050
Consumer and industrial sales volumes
(thousands of tons)
2,000
2,000 - 2,150
2,150
Total salt sales volumes (thousands of
tons)
10,000
11,300 - 12,150
13,200
Revenue (in millions)
$935
$1,030 - $1,110
$1,200
Adj. EBITDA (in millions)
$205
$230 - $270
$290
(1)
Mild and Strong Winter scenarios reflect
management estimates of the potential impact to the presented line
items assuming mild or strong winter weather. The company utilizes
an array of information, including historical weather data and
sales-to-commitment outcomes, to develop measures that are then
applied to its 2024 Range to estimate these amounts.
(2)
Range for 2024 reflects the company's
estimated book of business for the period and assumes normalized
weather conditions and average historical sales-to-commitment
outcomes.
The first quarter saw particularly mild weather across most of
North America, including within the company's core service markets.
Snow days in those core geographies during the quarter were
estimated to be approximately 40% of the 10-year average.
The company will revisit guidance for the Salt business
following the completion of the highway deicing season. Management
continues to expect Salt financial results will fall within the
range of outcomes represented above.
Plant Nutrition
Segment
2024 Range
Sales volumes (thousands of tons)
280 - 310
Revenue (in millions)
$170 - $205
Adj. EBITDA (in millions)
$15 - $35
Plant Nutrition guidance is being adjusted to reflect revised
market and operational conditions that could impact the business.
First, muriate of potash (MOP) prices continue to be under pressure
in the market, which as a potential substitute impacts the pricing
of the company's sulfate of potash (SOP). Second, continuing
weakness in fertilizer pricing is resulting in buyers deferring
purchases in anticipation of lower prices, which adds risk to the
company's sales outlook. Lastly, first-quarter pond-based
production tracked toward the lower end of the company's initial
projections.
Corporate
2024 Range
Fortress1
Other2
Total
Adj. EBITDA (in millions)
~$13
($78) - ($73)
($65) - ($60)
(1)
Fortress contribution only includes $13.1
million of adjusted EBITDA carried over from its calendar year 2023
USFS take-or-pay contract; no assumptions with respect to 2024 have
been made pending finalization of the 2024 USFS contract.
(2)
Other adjusted EBITDA includes i)
approximately $5 million of lithium-related costs; expenses related
to the exit activities associated with the lithium project are not
included in the guidance above, and ii) a non-cash charge of $2.9
million related to the change in the valuation of the contingent
consideration liability associated with the Fortress acquisition,
which reflects the mark to market of the contingent consideration
liability due to changes assumed for the discount rate and in
business projections used in the valuation.
Projected Corporate segment results shown in the table above
include corporate expenses in support of the company's core
businesses, lithium-related development operating expenses,
Fortress financial results, and the results of DeepStore, the
company's records and management services business in the U.K.
With respect to Fortress, changes to the calendar 2024
solicitation package by the USFS resulted in a delay in the
contracting process. Compass Minerals is working closely with USFS
to finalize a contract for calendar 2024, with a final agreement
expected to be finalized prior to deployment for the upcoming fire
season. Accordingly, the company's current guidance for Fortress
continues to only include $13.1 million of adjusted EBITDA related
to its initial calendar 2023 USFS contract. When negotiations with
the USFS have been completed, Compass Minerals intends to update
guidance for 2024 to include the expected contribution from the
2024 contract.
Previously, the company expected between $5 and $10 million of
Lithium-related expenses to burden Corporate adjusted EBITDA in
2024. As a result of recent workforce reductions in connection with
the elimination of the Lithium function, the company now expects
the full year impact for Lithium to be approximately $5
million.
Total Compass Minerals
2024 Adjusted EBITDA
Salt
Plant Nutrition
Corporate1
Total
Adj. EBITDA (in millions)
$230 - $270
$15 - $35
($65) - ($60)
$180 - $245
2024 Capital
Expenditures
Sustaining
Lithium2
Fortress
Total
Capital expenditures (in millions)
$80 - $90
~$30
~ $10
$120 - $130
(1)
Includes Fortress contribution of $13.1
million in adjusted EBITDA related to the calendar 2023 USFS
contract that will now be recognized in fiscal 2024. Also includes
financial contribution from DeepStore.
(2)
Lithium capital expenditures principally
relate to items committed to or made prior to the suspension of
further investment in the lithium project. As a result of the
termination of the lithium project and the related impairment this
quarter, a portion of these expenditures that relate to committed
items that had not been received by quarter-end will not be
classified as capital expenditures within the consolidated
statements of cash flows when paid.
Total capital expenditures for the company in 2024 are expected
to be within a range of $120 million to $130 million, down $7
million from prior expectations and reflecting an initial step
toward realigning investment priorities to reduce capital intensity
and improve returns on capital. This includes between $80 million
and $90 million in sustaining capital expenditures related to the
core Salt and Plant Nutrition businesses. In addition,
approximately $30 million of lithium-associated expenditures are
included, principally related to "in flight" items ordered prior to
the November 2023 project suspension. The company's projections
also include approximately $10 million of capital investment for
equipment to support the continued growth of Fortress.
Other Assumptions
($ in millions)
2024 Range
Depreciation, depletion and
amortization
$100 - $110
Interest expense, net
$65 - $70
Effective income tax rate (excl. valuation
allowance and lithium impairment)
70% - 75%
As a result of the previously announced senior executive
management changes disclosed on Jan. 16, 2024, the company expects
to recognize a cash charge of approximately $6 million to $9
million in the second quarter. These costs will be reported in
Other operating expense in the company's consolidated statement of
operations and will be adjusting items in the calculation of
adjusted operating earnings and adjusted EBITDA.
CONFERENCE CALL
Compass Minerals will discuss its results on a conference call
tomorrow morning, Thursday, Feb. 8, at 9:30 a.m. ET (8:30 a.m. CT).
To access the conference call, please visit the company’s website
at investors.compassminerals.com or dial 888-550-5768. Callers must
provide the conference ID number 3632674. Outside of the U.S. and
Canada, callers may dial 646-960-0469. Replays of the call will be
available on the company’s website.
A supporting corporate presentation with 2024 first-quarter
results is available at investors.compassminerals.com.
About Compass Minerals
Compass Minerals (NYSE: CMP) is a leading global provider of
essential minerals focused on safely delivering where and when it
matters to help solve nature’s challenges for customers and
communities. The company’s salt products help keep roadways safe
during winter weather and are used in numerous other consumer,
industrial, chemical and agricultural applications. Its plant
nutrition products help improve the quality and yield of crops,
while supporting sustainable agriculture. Additionally, its
next-generation, long-term fire retardant products provide a more
innovative and environmentally friendly option in the fight against
wildfires. Compass Minerals operates 12 production and packaging
facilities with nearly 2,000 employees throughout the U.S., Canada
and the U.K. Visit compassminerals.com for more information about
the company and its products.
Forward-Looking Statements and Other
Disclaimers
This press release may contain forward-looking statements,
including, without limitation, statements about expected efforts to
accelerate growth and enhance value; Fortress North America's
expected revenue, operating profit, and adjusted EBITDA; the
termination of the company's lithium brine development project,
including engagement with political and regulatory leaders and
estimates of charges and expenditures related to the termination of
the project; expectations for highway deicing pricing and volumes
for the upcoming winter, and the company's outlook for 2024,
including its expectations regarding sales volumes, revenue,
Adjusted EBITDA, corporate and other expense, depreciation,
depletion and amortization, interest expense, tax rates, and
capital expenditures. Forward-looking statements are those that
predict or describe future events or trends and that do not relate
solely to historical matters. The company uses words such as “may,”
“would,” “could,” “should,” “will,” “likely,” “expect,”
“anticipate,” “believe,” “intend,” “plan,” “forecast,” “outlook,”
“project,” “estimate” and similar expressions suggesting future
outcomes or events to identify forward-looking statements or
forward-looking information. These statements are based on the
company’s current expectations and involve risks and uncertainties
that could cause the company’s actual results to differ materially.
The differences could be caused by a number of factors, including
without limitation (i) weather conditions, (ii) inflation, the cost
and availability of transportation for the distribution of the
company’s products and foreign exchange rates, (iii) pressure on
prices and impact from competitive products, (iv) any inability by
the company to successfully implement its strategic priorities or
its cost-saving or enterprise optimization initiatives, and (v) the
risk that the company may not realize the expected financial or
other benefits from its ownership of Fortress North America. For
further information on these and other risks and uncertainties that
may affect the company’s business, see the “Risk Factors” and
“Management’s Discussion and Analysis of Financial Condition and
Results of Operations” sections of the company’s Annual Report on
Form 10-K for the period ended Sept. 30, 2023 and its Quarterly
Report on Form 10-Q for the quarter ended Dec. 31, 2023, filed or
to be filed with the SEC, as well as the company's other SEC
filings. The company undertakes no obligation to update any
forward-looking statements made in this press release to reflect
future events or developments, except as required by law. Because
it is not possible to predict or identify all such factors, this
list cannot be considered a complete set of all potential risks or
uncertainties.
Non-GAAP Measures
In addition to using U.S. generally accepted accounting
principles (“GAAP”) financial measures, management uses a variety
of non-GAAP financial measures described below to evaluate the
company’s and its operating segments’ performance. While the
consolidated financial statements provide an understanding of the
company’s overall results of operations, financial condition and
cash flows, management analyzes components of the consolidated
financial statements to identify certain trends and evaluate
specific performance areas.
Management uses EBITDA, EBITDA adjusted for items which
management believes are not indicative of the company’s ongoing
operating performance (“Adjusted EBITDA”) and EBITDA margin to
evaluate the operating performance of the company’s core business
operations because its resource allocation, financing methods and
cost of capital, and income tax positions are managed at a
corporate level, apart from the activities of the operating
segments, and the operating facilities are located in different
taxing jurisdictions, which can cause considerable variation in net
earnings. Management also uses adjusted operating earnings,
adjusted operating margin, adjusted net earnings, and adjusted net
earnings per diluted share, which eliminate the impact of certain
items that management does not consider indicative of underlying
operating performance. The presentation of these measures should
not be construed as an inference that future results will be
unaffected by unusual or non-recurring items. Management believes
these non-GAAP financial measures provide management and investors
with additional information that is helpful when evaluating
underlying performance. EBITDA and Adjusted EBITDA exclude interest
expense, income taxes and depreciation, depletion and amortization,
each of which are an essential element of the company’s cost
structure and cannot be eliminated. In addition, Adjusted EBITDA
and Adjusted EBITDA margin exclude certain cash and non-cash items,
including stock-based compensation and asset impairment charges.
Consequently, any measure that excludes these elements has material
limitations. The non-GAAP financial measures used by management
should not be considered in isolation or as a substitute for net
earnings, operating earnings, cash flows or other financial data
prepared in accordance with GAAP or as a measure of overall
profitability or liquidity. These measures are not necessarily
comparable to similarly titled measures of other companies due to
potential inconsistencies in the method of calculation. The
calculation of non-GAAP financial measures as used by management is
set forth in the following tables. All margin numbers are defined
as the relevant measure divided by sales. The company does not
provide a reconciliation of forward-looking non-GAAP financial
measures to the most directly comparable financial measures
calculated and reported in accordance with GAAP, as the company is
unable to estimate significant non-recurring or unusual items
without unreasonable effort. The amounts and timing of these items
are uncertain and could be material to the company’s results.
Adjusted operating earnings, adjusted operating earnings margin,
adjusted net earnings, and adjusted net earnings (loss) per diluted
share are presented as supplemental measures of the company’s
performance. Management believes these measures provide management
and investors with additional information that is helpful when
evaluating underlying performance and comparing results on a
year-over-year normalized basis. These measures eliminate the
impact of certain items that management does not consider
indicative of underlying operating performance. These adjustments
are itemized below. Adjusted net earnings (loss) per diluted share
is adjusted net earnings (loss) divided by weighted average diluted
shares outstanding. You are encouraged to evaluate the adjustments
itemized above and the reasons management considers them
appropriate for supplemental analysis. In evaluating these measures
you should be aware that in the future the company may incur
expenses that are the same as or similar to some of the adjustments
presented below.
Special Items Impacting the
Three Months Ended Dec. 31, 2023
(unaudited, in millions, except
per share data)
Item Description
Segment
Line Item
Amount
Tax Effect(1)
After Tax
EPS Impact
Restructuring charges
Corporate and Other
Other operating expense
$
2.5
$
—
$
2.5
$
0.06
Asset impairment
Corporate and Other
Loss on impairment of long-lived assets,
net
74.8
—
74.8
1.82
Total
$
77.3
$
—
$
77.3
$
1.88
(1)
There were no substantial income tax
benefits related to these items given the U.S. valuation allowances
on deferred tax assets.
Reconciliation for Adjusted
Operating Earnings
(unaudited, in millions)
Three Months Ended Dec.
31,
2023
2022
Operating (loss) earnings
$
(55.3
)
$
27.9
Restructuring charges(1)
2.5
—
Loss on impairment of long-lived assets,
net(1)
74.8
—
Accrued loss and legal costs related to
SEC investigation(2)
—
0.3
Adjusted operating earnings
$
22.0
$
28.2
Sales
341.7
352.4
Operating margin
(16.2
)%
7.9
%
Adjusted operating margin
6.4
%
8.0
%
(1)
In connection with the termination of the
company's lithium development project, the company incurred
severance and related charges for a reduction in workforce and a
loss on impairment of long-lived assets, which were determined to
be no longer probable of recovery.
(2)
The company recognized costs, net of
reimbursements, related to the settled SEC investigation.
Reconciliation for Adjusted
Net Earnings
(unaudited, in millions)
Three Months Ended Dec.
31,
2023
2022
Net loss
$
(75.1
)
$
(0.3
)
Restructuring charges(1)
2.5
—
Loss on impairment of long-lived assets,
net(1)
74.8
—
Accrued loss and legal costs related to
SEC investigation(2)
—
0.3
Adjusted net earnings
$
2.2
$
—
Net loss per diluted share
$
(1.83
)
$
(0.01
)
Adjusted net earnings per diluted
share
$
0.05
$
—
Weighted-average common shares outstanding
(in thousands):
Diluted
41,205
39,751
(1)
In connection with the termination of the
company's lithium development project, the company incurred
severance and related charges for a reduction in workforce and a
loss on impairment of long-lived assets, which were determined to
be no longer probable of recovery.
(2)
The company recognized costs, net of
reimbursements, related to the settled SEC investigation.
Reconciliation for EBITDA and
Adjusted EBITDA
(unaudited, in millions)
Three Months Ended Dec.
31,
2023
2022
Net loss
$
(75.1
)
$
(0.3
)
Interest expense
15.8
13.9
Income tax expense
1.8
11.9
Depreciation, depletion and
amortization
25.5
23.9
EBITDA
(32.0
)
49.4
Adjustments to EBITDA:
Stock-based compensation - non cash
11.9
10.6
Interest income
(0.4
)
(1.1
)
Loss on foreign exchange
1.9
2.5
Restructuring charges(1)
2.5
—
Loss on impairment of long-lived assets,
net(1)
74.8
—
Accrued loss and legal costs related to
SEC investigation(2)
—
0.3
Other expense, net
0.7
0.1
Adjusted EBITDA
$
59.4
$
61.8
(1)
In connection with the termination of the
company's lithium development project, the company incurred
severance and related charges for a reduction in workforce and a
loss on impairment of long-lived assets, which were determined to
be no longer probable of recovery.
(2)
The company recognized costs, net of
reimbursements, related to the settled SEC investigation.
Salt Segment
Performance
(unaudited, in millions, except
for sales volumes and prices per short ton)
Three Months Ended Dec.
31,
2023
2022
Sales
$
274.3
$
308.1
Operating earnings
$
50.5
$
47.1
Operating margin
18.4
%
15.3
%
EBITDA(1)
$
65.7
$
61.0
EBITDA(1) margin
24.0
%
19.8
%
Sales volumes (in thousands of tons):
Highway deicing
2,266
2,901
Consumer and industrial
589
620
Total Salt
2,855
3,521
Average prices (per ton):
Highway deicing
$
70.36
$
65.60
Consumer and industrial
$
194.94
$
190.04
Total Salt
$
96.08
$
87.51
(1)
Non-GAAP financial measure.
Reconciliations follow in these tables.
Reconciliation for Salt
Segment EBITDA and Adjusted EBITDA
(unaudited, in millions)
Three Months Ended Dec.
31,
2023
2022
Reported GAAP segment operating
earnings
$
50.5
$
47.1
Depreciation, depletion and
amortization
15.2
13.9
Segment EBITDA
$
65.7
$
61.0
Segment sales
274.3
308.1
Segment EBITDA margin
24.0
%
19.8
%
Plant Nutrition Segment
Performance
(unaudited, dollars in millions,
except for sales volumes and prices per short ton)
Three Months Ended Dec.
31,
2023
2022
Sales
$
49.7
$
41.6
Operating (loss) earnings
$
(2.3
)
$
11.0
Operating margin
(4.6
)%
26.4
%
EBITDA(1)
$
6.1
$
19.3
EBITDA(1) margin
12.3
%
46.4
%
Sales volumes (in thousands of tons)
75
45
Average price (per ton)
$
660.41
$
924.15
(1)
Non-GAAP financial measure.
Reconciliations follow in these tables.
Reconciliation for Plant
Nutrition Segment EBITDA
(unaudited, in millions)
Three Months Ended Dec.
31,
2023
2022
Reported GAAP segment operating (loss)
earnings
$
(2.3
)
$
11.0
Depreciation, depletion and
amortization
8.4
8.3
Segment EBITDA
$
6.1
$
19.3
Segment sales
49.7
41.6
Segment EBITDA margin
12.3
%
46.4
%
COMPASS MINERALS
INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF
OPERATIONS
(unaudited, in millions,
except share and per-share data)
Three Months Ended Dec.
31,
2023
2022
Sales
$
341.7
$
352.4
Shipping and handling cost
91.3
107.4
Product cost
179.8
175.0
Gross profit
70.6
70.0
Selling, general and administrative
expenses
45.7
41.8
Loss on impairment of long-lived assets,
net
74.8
—
Other operating expense
5.4
0.3
Operating (loss) earnings
(55.3
)
27.9
Other (income) expense:
Interest income
(0.4
)
(1.1
)
Interest expense
15.8
13.9
Loss on foreign exchange
1.9
2.5
Net loss in equity investee
—
0.9
Other expense, net
0.7
0.1
(Loss) earnings before income taxes
(73.3
)
11.6
Income tax expense
1.8
11.9
Net loss
$
(75.1
)
$
(0.3
)
Basic net loss per common share
$
(1.83
)
$
(0.01
)
Diluted net loss per common share
$
(1.83
)
$
(0.01
)
Weighted-average common shares outstanding
(in thousands):(1)
Basic
41,205
39,751
Diluted
41,205
39,751
(1)
Weighted participating securities include
RSUs and PSUs that receive non-forfeitable dividends and consist of
777,000 weighted participating securities for the three months
ended Dec. 31, 2023, and 514,000 weighted participating securities
for the three months ended Dec. 31, 2022.
COMPASS MINERALS
INTERNATIONAL, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(unaudited, in
millions)
Dec. 31,
Sept. 30,
2023
2022
ASSETS
Cash and cash equivalents
$
38.3
$
38.7
Receivables, net
168.6
129.5
Inventories
392.5
392.2
Other current assets
28.4
33.4
Property, plant and equipment, net
803.0
852.2
Intangible and other noncurrent assets
374.5
372.0
Total assets
$
1,805.3
$
1,818.0
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current portion of long-term debt
$
5.0
$
5.0
Other current liabilities
199.3
270.8
Long-term debt, net of current portion
908.7
800.3
Deferred income taxes and other noncurrent
liabilities
232.5
224.7
Total stockholders' equity
459.8
517.2
Total liabilities and stockholders'
equity
$
1,805.3
$
1,818.0
COMPASS MINERALS
INTERNATIONAL, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(unaudited, in
millions)
Three Months Ended Dec.
31,
2023
2022
Net cash (used in) provided by operating
activities
$
(65.6
)
$
2.1
Cash flows from investing activities:
Capital expenditures
(35.3
)
(19.9
)
Other, net
(0.7
)
(0.2
)
Net cash used in investing activities
(36.0
)
(20.1
)
Cash flows from financing activities:
Proceeds from revolving credit facility
borrowings
88.7
16.7
Principal payments on revolving credit
facility borrowings
(17.8
)
(168.2
)
Proceeds from issuance of long-term
debt
38.4
35.4
Principal payments on long-term debt
(1.2
)
—
Net proceeds from private placement of
common stock
—
240.7
Dividends paid
(6.4
)
(6.3
)
Shares withheld to satisfy employee tax
obligations
(0.8
)
(0.3
)
Other, net
—
(0.3
)
Net cash provided by financing
activities
100.9
117.7
Effect of exchange rate changes on cash
and cash equivalents
0.3
0.3
Net change in cash and cash
equivalents
(0.4
)
100.0
Cash and cash equivalents, beginning of
the year
38.7
46.1
Cash and cash equivalents, end of
period
$
38.3
$
146.1
COMPASS MINERALS
INTERNATIONAL, INC.
SEGMENT INFORMATION
(unaudited, in
millions)
Three Months Ended Dec. 31,
2023
Salt
Plant Nutrition
Corporate &
Other(1)
Total
Sales to external customers
$
274.3
$
49.7
$
17.7
$
341.7
Intersegment sales
—
3.1
(3.1
)
—
Shipping and handling cost
83.7
7.0
0.6
91.3
Operating earnings (loss)(2)
50.5
(2.3
)
(103.5
)
(55.3
)
Depreciation, depletion and
amortization
15.2
8.4
1.9
25.5
Total assets (as of end of period)
1,055.9
462.4
287.0
1,805.3
Three Months Ended Dec. 31,
2022
Salt
Plant Nutrition
Corporate &
Other(1)
Total
Sales to external customers
$
308.1
$
41.6
$
2.7
$
352.4
Intersegment sales
—
2.9
(2.9
)
—
Shipping and handling cost
102.7
4.7
—
107.4
Operating earnings (loss)(3)
47.1
11.0
(30.2
)
27.9
Depreciation, depletion and
amortization
13.9
8.3
1.7
23.9
Total assets (as of end of period)
985.2
456.5
323.0
1,764.7
(1)
Corporate and other includes corporate
entities, records management operations, the Fortress fire
retardant business, equity method investments and other incidental
operations and eliminations. Operating earnings (loss) for
corporate and other includes indirect corporate overhead including
costs for general corporate governance and oversight,
lithium-related expenditures, as well as costs for the human
resources, information technology, legal and finance functions.
(2)
As a result of the company’s decision to
cease the pursuit of the lithium development, the company
recognized an impairment of long-lived assets of $74.8 million and
severance of $2.5 million, which impacted operating results for the
three months ended December 31, 2023.
(3)
Corporate operating results for the three
months ended Dec. 31, 2022 include a contingent loss accrual and
costs related to the SEC investigation of $0.3 million.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240207924546/en/
Investor Contact Brent Collins Vice President, Investor
Relations +1.913.344.9111 InvestorRelations@compassminerals.com
Media Contact Rick Axthelm Chief Public Affairs and
Sustainability Officer +1.913.344.9198
MediaRelations@compassminerals.com
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