Announces Decisive Measures to Accelerate
Cash Flow Generation and Debt Reduction
Compass Minerals (NYSE: CMP), a leading global provider of
essential minerals, today reported fiscal 2024 second-quarter
results. In addition, the company announced certain actions it is
undertaking to improve cash generation and accelerate debt
reduction, including the board of directors determining not to
declare dividends for the foreseeable future. Unless otherwise
noted, it should be assumed that time periods referenced below are
on a fiscal-year basis.
MANAGEMENT COMMENTARY
"Our results this quarter as well as our full-year outlook were
directly and meaningfully impacted by one of the mildest winters
experienced in over 25 years and by obstacles to the advancement of
our fire-retardant business," said Edward C. Dowling Jr., president
and CEO. "Accordingly, we are announcing a series of new and
ongoing actions to address these challenges, including the
indefinite suspension of dividend payments, adoption of operational
changes to enhance flexibility and right size our highway deicing
inventory and production profile, and advancement of SG&A cost
saving measures including a recent reduction in our corporate
workforce. These actions are in line with our previously announced
focus on improving cash flow generation and returns on capital in
the Salt and Plant Nutrition businesses, and accelerating debt
reduction. While difficult decisions to make, each action was
carefully considered and determined to be the best path forward to
unlock the intrinsic value of our company amid a difficult
landscape. I believe that we are positioning the company to realize
the significant potential inherent in the unique assets of our core
business."
CASH FLOW-ENHANCING
ACTIONS
Consistent with its goal of maximizing cash available for
deleveraging, the company is proceeding with the following
actions:
- The board of directors has determined not to declare dividends
for the foreseeable future, freeing up approximately $25 million
annually;
- Positioning the company to substantially reduce inventory
levels during the upcoming deicing season by immediately curbing
production levels at Goderich mine, including the recent temporary
layoff of approximately 22% of the mine's represented
workforce;
- Advancing a multifaceted selling, general, and administrative
(SG&A) cost savings initiative aimed at achieving
industry-leading cost competitiveness by year-end 2025; efforts
include recent headcount reductions at the company's Overland Park
headquarters and rationalization of functional support costs across
the organization; and
- Implementing a revamped governance structure and prioritization
process for maintenance, repair and overhaul expenditures to
improve capital efficiency and standardization in capital
investment decision-making across all operating sites.
QUARTERLY
FINANCIAL RESULTS
Three Months Ended
March 31,
Six Months Ended
March 31,
(in millions, except per share
data)
2024
2023
2024
2023
Revenue
$
364.0
$
411.1
$
705.7
$
763.5
Operating (loss) earnings
(45.8
)
47.9
(101.1
)
75.8
Adjusted operating earnings*
65.4
50.8
87.4
79.0
Adjusted EBITDA*
87.3
77.4
146.7
139.2
Net loss
(48.0
)
(21.6
)
(123.1
)
(21.9
)
Net loss per diluted share
(1.16
)
(0.53
)
(2.99
)
(0.55
)
Adjusted net earnings (loss)*
63.2
(18.7
)
65.4
(18.7
)
Adjusted net earnings (loss)* per diluted
share
1.49
(0.46
)
1.55
(0.47
)
*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 FINANCIAL
HIGHLIGHTS
- Adjusted EBITDA increased 13% year over year to $87.3 million,
which includes a non-cash gain of $24.3 million related to the
decline in the valuation of the Fortress contingent liability
discussed below;
- The Salt segment reported a 9% and 7% decrease year over year
in both operating earnings and adjusted EBITDA, respectively, led
by 21% lower sales volumes; per-unit profitability improved with
adjusted EBITDA per ton increasing 19% to $23.95;
- Plant Nutrition sales volumes increased 23% year over year to
74 thousand tons, reflecting the normalization of demand in core
West Coast markets;
- Recognized a quarterly loss on impairments, of $106.6 million
related primarily to write downs of goodwill and intangible assets
related to the Fortress business and a goodwill impairment in the
Plant Nutrition segment; and
- Reported other operating income of $21.2 million during the
quarter, which primarily reflects the decline in the valuation of
the contingent consideration liability associated with the Fortress
acquisition given recent challenges facing the magnesium
chloride-based product line in the fire-retardants business.
SALT BUSINESS SUMMARY
Winter weather in the company's core markets during the second
quarter of 2024 was exceptionally weak, marking one of the mildest
quarters in over 25 years. Operating earnings declined 9% year over
year to $66.4 million and adjusted EBITDA decreased to $83.0
million, down 7% from the prior-year period. Adjusted EBITDA per
ton improved 19% to $23.95 driven by favorable product and customer
sales mix.
Salt revenue totaled $310.4 million and was down 14% year over
year, driven by a 21% year-over-year sales volume decline,
partially offset by a 9% increase in average sales price. In the
highway deicing business, the company realized a 7% increase in
average highway deicing selling prices while sales volumes declined
22% due to a combination of exceptionally mild weather in the
second 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 11% year over year to
approximately $197 per ton, helping defray logistics and production
cost increases. C&I sales volumes declined by 14% primarily due
to lower retail deicing demand reflecting the aforementioned mild
weather across the company's served markets.
Distribution costs per ton were up 7% year over year due
primarily to changes in the customer/regional sales mix, 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 primarily
due to lower production and sales tons to absorb fixed costs.
PLANT NUTRITION BUSINESS
SUMMARY
Plant Nutrition revenue for the quarter totaled $50.1 million,
up 5% year over year. Consistent with the first quarter,
normalizing demand in the company's core West Coast markets
resulted in a return of sales volumes in the quarter to historical
levels following extraordinary prior-year weather events in select
key markets, with volumes up 23% year over year. The average
segment sales price for the quarter was down 15% year over year to
approximately $680 per ton, reflecting a rebalancing of global
supply and demand for potassium-based fertilizers. The company
recognized an impairment of goodwill of $51.0 million in the
quarter that reflects tempered long-term financial projections for
the Plant Nutrition business.
Per-unit distribution costs for the quarter decreased 12% year
over year as higher sales volumes resulted in increased absorption
of fixed costs. Reported all-in product costs per ton, which
includes the aforementioned goodwill impairment, increased 86% year
over year. Excluding the goodwill impairment, all-in product costs
per ton would have declined by 12% year over year as fixed costs
absorption improved with sales volumes normalizing around
historical levels.
Operating loss in the Plant Nutrition business totaled $53.4
million for the quarter, which includes the aforementioned goodwill
write down. This represents an increase from the operating loss of
$0.7 million in the prior-year quarter. Adjusted EBITDA declined to
$6.9 million versus $7.8 million year over year.
FORTRESS NORTH AMERICA
UPDATE
As previously reported, in March of 2024 Compass Minerals was
informed of issues impacting the utilization of magnesium
chloride-based fire retardants in aerial firefighting. As a result
of the uncertainty surrounding the future use of these magnesium
chloride-based products, the company recognized a loss on
impairment in the quarter of $55.6 million related to write downs
of goodwill and intangible assets. The company also recognized a
quarterly non-cash gain of $24.3 million within other operating
income related to the decline in the valuation of the contingent
consideration liability associated with the Fortress
acquisition.
The company is evaluating various alternatives regarding the
path forward for this business given developments over the last
several weeks.
CASH FLOW AND FINANCIAL
POSITION
Net cash provided by operating activities amounted to $22.3
million for the six months ended March 31, 2024, compared to $149.5
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 $66.4 million for the
six months ended March 31, 2024, up $16.8 million year over year
principally driven by higher capital expenditures. Total capital
investment for the six months ended March 31, 2024, was $65.3
million, of which approximately $24 million related to the
company's terminated lithium project.
Net cash provided by financing activities was $45.3 million for
the six months ended March 31, 2024, including net borrowings of
$72.1 million, partially offset by dividends of $12.7 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 $277.7 million of liquidity,
comprised of $40.0 million in cash and cash equivalents and $237.7
million of availability under its $375 million revolving credit
facility.
In March 2024, the company amended its existing credit facility
to provide covenant relief and provide for greater flexibility over
time across a broad range of operating scenarios. At quarter-end,
the consolidated total net leverage ratio was 4.3 times, within the
company's net leverage covenant of 6.0 times.
UPDATED 2024 OUTLOOK
Updated guidance and commentary for 2024 is reflected below.
Salt Segment
2024 Range
Highway deicing sales volumes (thousands
of tons)
7,300 - 7,400
Consumer and industrial sales volumes
(thousands of tons)
1,900 - 2,000
Total salt sales volumes (thousands of
tons)
9,200 - 9,400
Revenue (in millions)
$900 - $920
Adj. EBITDA (in millions)
$200 - $210
The second quarter saw the continuation of mild winter weather
across the company's core service markets. Snow events in those
core geographies were approximately 70% and 60% of the 10-year
average for the quarter and the full winter, respectively. With the
vast majority of the highway deicing season completed, the Salt
segment guidance range for the year has been narrowed in line with
the Mild Winter profitability guidance reflected in prior
guidance.
The company's decision to curtail production at Goderich mine
results in incremental costs that adversely impact adjusted EBITDA
guidance for the year. The revised adjusted EBITDA guidance
reflects approximately $14 million of incremental expenses that are
split roughly evenly between the remaining quarters of the year and
includes accelerated recognition of certain production costs. When
operating within normalized production levels, fixed production
costs are inventoried and then recognized as product costs when
inventory is sold. As a result of curtailed production levels being
implemented at Goderich mine being below the mine's long-run
average, U.S. generally accepted accounting principles (GAAP)
requires a portion of the company's fixed production costs to be
reflected as expense in the periods in which they are incurred
rather than as a component of inventory.
The anticipated decline in inventory and associated conversion
to cash resulting from the production curtailment described above
is expected to be realized predominantly between October 2024 and
March 2025 as highway deicing sales transpire. The magnitude of the
inventory drawdown will be influenced by the severity of the coming
winter deicing season and the duration of the production
curtailment at Goderich mine.
Plant Nutrition
Segment
2024 Range
Sales volumes (thousands of
tons)
280 - 310
Revenue (in millions)
$170 - $205
Adj. EBITDA (in millions)
$15 - $30
Plant Nutrition guidance reflects a reduction of the top end of
the adjusted EBITDA range. Year to date, the company has managed to
maintain strong product pricing relative to alternative products,
with sales volumes tracking toward the lower part of the provided
range.
Corporate
2024 Range
Fortress1
Other2
Total
Adj. EBITDA (in millions)
$2 - $3
($57) - ($52)
($55) - ($49)
(1)
Fortress contribution includes adjusted
EBITDA carried over from its calendar year 2023 USFS take-or-pay
contract as well as ongoing overhead costs; no assumptions with
respect to 2024 activity with the USFS have been assumed.
(2)
Other adjusted EBITDA includes i)
approximately $5 million of lithium-related costs, unchanged from
previously provided guidance, and ii) the year-to-date non-cash
gain of $21.4 million related to the decline in the valuation of
the contingent consideration liability associated with the Fortress
acquisition, reflecting quarterly fluctuations of that liability
due to changes in the discount rate and the projected business
performance 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. The
decline in the company's current profit outlook for Fortress
reflects the cost of maintaining adequate staffing while the
company continues discussions with the USFS. Guidance for Other
corporate costs includes the year-to-date non-cash gain related to
a decline in the valuation of the contingent consideration
liability associated with the Fortress acquisition.
Total Compass Minerals
2024 Adjusted EBITDA
Salt
Plant Nutrition
Corporate1
Total
Adj. EBITDA (in millions)
$200 - $210
$15 - $30
($55) - ($49)
$160 - $191
2024 Capital
Expenditures
Sustaining
Lithium2
Fortress
Total
Capital expenditures (in millions)
$80 - $90
~$30
$5 - $10
$115 - $130
(1)
Includes financial contribution of
Fortress and 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 in
the first quarter of 2024, a portion of these expenditures that
related to committed items that had not been received by December
31, 2023 were not classified as capital expenditures within the
consolidated statements of cash flows when paid.
Total capital expenditures for the company in 2024 are now
expected to be within a range of $115 million to $130 million.
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 $5 million to $10 million of capital investment in the
company's fire-retardants business.
Other Assumptions
($ in millions)
2024 Range
Depreciation, depletion and
amortization
$100 - $110
Interest expense, net
$65 - $70
Effective income tax rate (excl. valuation
allowance and impairments)
0% - 5%
CONFERENCE CALL
Compass Minerals will discuss its results on a conference call
tomorrow morning, Wednesday, May 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 second-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, it is
working to develop a next-generation, long-term fire-retardant
business that offers more innovative and environmentally friendly
products 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 efforts to improve
cash generation and debt reduction; inventory levels; Fortress
North America's operating expenses, necessary capital investment,
development of non-magnesium chloride-based aerial fire retardant
formulations, including qualifications and approvals, and
discussions with the USFS; estimated expenditures related to the
termination of the company's lithium brine development 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
Reports on Form 10-Q for the quarters ended Dec. 31, 2023 and Mar.
31,2024, 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, impairment charges and certain
restructuring 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,
unusual items and/or distinct non-core initiatives 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 (loss), 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 March 31, 2024
(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
$
2.1
$
—
$
2.1
$
0.05
Restructuring charges
Salt
COGS and SG&A
0.4
—
0.4
0.01
Restructuring charges
Plant Nutrition
COGS and SG&A
0.6
—
0.6
0.01
Impairments
Corporate and Other
COGS and Loss on impairments
57.1
—
57.1
1.36
Goodwill impairment
Plant Nutrition
Loss on impairments
51.0
—
51.0
1.22
Total
$
111.2
$
—
$
111.2
$
2.65
Special Items Impacting the
Six Months Ended March 31, 2024
(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
$
4.6
$
—
$
4.6
$
0.11
Restructuring charges
Salt
COGS and SG&A
0.4
—
0.4
0.01
Restructuring charges
Plant Nutrition
COGS and SG&A
0.6
—
0.6
0.01
Impairments
Corporate and Other
COGS and Loss on impairments
131.9
—
131.9
3.18
Goodwill impairment
Plant Nutrition
Loss on impairments
51.0
—
51.0
1.23
Total
$
188.5
$
—
$
188.5
$
4.54
(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
March 31,
Six Months Ended
March 31,
2024
2023
2024
2023
Operating (loss) earnings
$
(45.8
)
$
47.9
$
(101.1
)
$
75.8
Restructuring charges(1)
3.1
3.3
5.6
3.3
Loss on impairments(2)
108.1
—
182.9
—
Accrued loss and legal costs related to
SEC investigation(3)
—
(0.4
)
—
(0.1
)
Adjusted operating earnings
$
65.4
$
50.8
$
87.4
$
79.0
Sales
364.0
411.1
705.7
763.5
Operating margin
(12.6
)%
11.7
%
(14.3
)%
9.9
%
Adjusted operating margin
18.0
%
12.4
%
12.4
%
10.3
%
(1)
The company incurred severance and related
charges for reductions in workforce and changes to executive
leadership and additional restructuring costs related to the
termination of the Company’s lithium development project.
(2)
The company recognized impairments of
goodwill, long-lived assets and inventory related to Fortress; and
goodwill related to Plant Nutrition for the three and six months
ended March 31, 2024. The company also recognized the impairment of
long-lived assets related to the termination of the lithium
development project for the six months ended March 31, 2024.
Impairments of long-lived assets and goodwill are included in loss
on impairments, while the impairment of inventory is included in
product cost, both on the Consolidated Statements of
Operations.
(3)
The company recognized costs, net of
reimbursements, related to the settled SEC investigation.
Reconciliation for Adjusted
Net Earnings (Loss)
(unaudited, in millions)
Three Months Ended
March 31,
Six Months Ended
March 31,
2024
2023
2024
2023
Net loss
$
(48.0
)
$
(21.6
)
$
(123.1
)
$
(21.9
)
Restructuring charges(1)
3.1
3.3
5.6
3.3
Loss on impairments(2)
108.1
—
182.9
—
Accrued loss and legal costs related to
SEC investigation(3)
—
(0.4
)
—
(0.1
)
Adjusted net earnings (loss)
$
63.2
$
(18.7
)
$
65.4
$
(18.7
)
Net loss per diluted share
$
(1.16
)
$
(0.53
)
$
(2.99
)
$
(0.55
)
Adjusted net earnings (loss) per diluted
share
$
1.49
$
(0.46
)
$
1.55
$
(0.47
)
Weighted-average common shares outstanding
(in thousands):
Diluted
41,306
41,110
41,255
40,423
(1)
The company incurred severance and related
charges for reductions in workforce and changes to executive
leadership and additional restructuring costs related to the
termination of the Company’s lithium development project.
(2)
The company recognized impairments of
goodwill, long-lived assets and inventory related to Fortress; and
goodwill related to Plant Nutrition for the three and six months
ended March 31, 2024. The company also recognized the impairment of
long-lived assets related to the termination of the lithium
development project for the six months ended March 31, 2024.
(3)
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
March 31,
Six Months Ended
March 31,
2024
2023
2024
2023
Net loss
$
(48.0
)
$
(21.6
)
$
(123.1
)
$
(21.9
)
Interest expense
17.1
14.2
32.9
28.1
Income tax (benefit) expense
(13.1
)
55.1
(11.3
)
67.0
Depreciation, depletion and
amortization
26.8
24.5
52.3
48.4
EBITDA
(17.2
)
72.2
(49.2
)
121.6
Adjustments to EBITDA:
Stock-based compensation - non cash
(4.9
)
3.1
7.0
13.7
Interest income
(0.2
)
(1.9
)
(0.6
)
(3.0
)
(Gain) loss on foreign exchange
(2.5
)
(0.2
)
(0.6
)
2.3
Restructuring charges(1)
3.1
3.7
5.6
3.7
Loss on impairments(2)
108.1
—
182.9
—
Accrued loss and legal costs related to
SEC investigation(3)
—
(0.4
)
—
(0.1
)
Other expense, net
0.9
0.9
1.6
1.0
Adjusted EBITDA
$
87.3
$
77.4
$
146.7
$
139.2
(1)
The company incurred severance and related
charges for reductions in workforce and changes to executive
leadership and additional restructuring costs related to the
termination of the Company’s lithium development project.
(2)
The company recognized impairments of
goodwill, long-lived assets and inventory related to Fortress; and
goodwill related to Plant Nutrition for the three and six months
ended March 31, 2024. The company also recognized the impairment of
long-lived assets related to the termination of the lithium
development project for the six months ended March 31, 2024.
(3)
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
March 31,
Six Months Ended
March 31,
2024
2023
2024
2023
Sales
$
310.4
$
360.5
$
584.7
$
668.6
Operating earnings
$
66.4
$
73.1
$
116.9
$
120.2
Operating margin
21.4
%
20.3
%
20.0
%
18.0
%
Adjusted operating earnings(1)
$
66.8
$
74.1
$
117.3
$
121.2
Adjusted operating margin(1)
21.5
%
20.6
%
20.1
%
18.1
%
EBITDA(1)
$
82.6
$
87.9
$
148.3
$
148.9
EBITDA(1) margin
26.6
%
24.4
%
25.4
%
22.3
%
Adjusted EBITDA(1)
$
83.0
$
88.9
$
148.7
$
149.9
Adjusted EBITDA(1) margin
26.7
%
24.7
%
25.4
%
22.4
%
Sales volumes (in thousands of tons):
Highway deicing
3,045
3,915
5,311
6,816
Consumer and industrial
421
488
1,010
1,108
Total Salt
3,466
4,403
6,321
7,924
Average prices (per ton):
Highway deicing
$
74.72
$
69.90
$
72.86
$
68.07
Consumer and industrial
$
196.93
$
177.77
$
195.77
$
184.63
Total Salt
$
89.55
$
81.87
$
92.50
$
84.37
(1)
Non-GAAP financial measure.
Reconciliations follow in these tables.
Reconciliation for Salt
Segment Adjusted Operating Earnings
(unaudited, in millions)
Three Months Ended
March 31,
Six Months Ended
March 31,
2024
2023
2024
2023
Reported GAAP segment operating
earnings
$
66.4
$
73.1
$
116.9
$
120.2
Restructuring charges(1)
0.4
1.0
0.4
1.0
Segment adjusted operating earnings
$
66.8
$
74.1
$
117.3
$
121.2
Segment sales
310.4
360.5
584.7
668.6
Segment operating margin
21.4
%
20.3
%
20.0
%
18.0
%
Segment adjusted operating margin
21.5
%
20.6
%
20.1
%
18.1
%
(1)
The company incurred severance and related
charges related to a reduction of its workforce.
Reconciliation for Salt
Segment EBITDA and Adjusted EBITDA
(unaudited, in millions)
Three Months Ended
March 31,
Six Months Ended
March 31,
2024
2023
2024
2023
Reported GAAP segment operating
earnings
$
66.4
$
73.1
$
116.9
$
120.2
Depreciation, depletion and
amortization
16.2
14.8
31.4
28.7
Segment EBITDA
$
82.6
$
87.9
$
148.3
$
148.9
Restructuring charges(1)
0.4
1.0
0.4
1.0
Segment adjusted EBITDA
$
83.0
$
88.9
$
148.7
$
149.9
Segment sales
310.4
360.5
584.7
668.6
Segment EBITDA margin
26.6
%
24.4
%
25.4
%
22.3
%
Segment adjusted EBITDA margin
26.7
%
24.7
%
25.4
%
22.4
%
(1)
The company incurred severance and related
charges related to a reduction of its workforce.
Plant Nutrition Segment
Performance
(unaudited, dollars in millions,
except for sales volumes and prices per short ton)
Three Months Ended
March 31,
Six Months Ended
March 31,
2024
2023
2024
2023
Sales
$
50.1
$
47.7
$
99.8
$
89.3
Operating (loss) earnings
$
(53.4
)
$
(0.7
)
$
(55.7
)
$
10.3
Operating margin
(106.6
)%
(1.5
)%
(55.8
)%
11.5
%
Adjusted operating (loss) earnings(1)
$
(1.8
)
$
(0.3
)
$
(4.1
)
$
10.7
Adjusted operating margin(1)
(3.6
)%
(0.6
)%
(4.1
)%
12.0
%
EBITDA(1)
$
(44.7
)
$
7.4
$
(38.6
)
$
26.7
EBITDA(1) margin
(89.2
)%
15.5
%
(38.7
)%
29.9
%
Adjusted EBITDA(1)
$
6.9
$
7.8
$
13.0
$
27.1
Adjusted EBITDA(1) margin
13.8
%
16.4
%
13.0
%
30.3
%
Sales volumes (in thousands of tons)
74
60
149
105
Average price (per ton)
$
680.24
$
795.87
$
670.22
$
850.84
(1)
Non-GAAP financial measure.
Reconciliations follow in these tables.
Reconciliation for Plant
Nutrition Segment Adjusted Operating (Loss) Earnings
(unaudited, in millions)
Three Months Ended
March 31,
Six Months Ended
March 31,
2024
2023
2024
2023
Reported GAAP segment operating (loss)
earnings
$
(53.4
)
$
(0.7
)
$
(55.7
)
$
10.3
Restructuring charges(1)
0.6
0.4
0.6
0.4
Loss on goodwill impairment(2)
51.0
—
51.0
—
Segment adjusted operating (loss)
earnings
$
(1.8
)
$
(0.3
)
$
(4.1
)
$
10.7
Segment sales
50.1
47.7
99.8
89.3
Segment operating margin
(106.6
)%
(1.5
)%
(55.8
)%
11.5
%
Segment adjusted operating margin
(3.6
)%
(0.6
)%
(4.1
)%
12.0
%
(1)
The company incurred severance and related
charges related to a reduction of its workforce.
(2)
The company recognized a goodwill
impairment during the three and six months ended March 31,
2024.
Reconciliation for Plant
Nutrition Segment EBITDA
(unaudited, in millions)
Three Months Ended
March 31,
Six Months Ended
March 31,
2024
2023
2024
2023
Reported GAAP segment operating (loss)
earnings
$
(53.4
)
$
(0.7
)
$
(55.7
)
$
10.3
Depreciation, depletion and
amortization
8.7
8.1
17.1
16.4
Segment EBITDA
$
(44.7
)
$
7.4
$
(38.6
)
$
26.7
Restructuring charges(1)
0.6
0.4
0.6
0.4
Loss on goodwill impairment(2)
51.0
—
51.0
—
Segment adjusted EBITDA
$
6.9
$
7.8
$
13.0
$
27.1
Segment sales
50.1
47.7
99.8
89.3
Segment EBITDA margin
(89.2
)%
15.5
%
(38.7
)%
29.9
%
Segment adjusted EBITDA margin
13.8
%
16.4
%
13.0
%
30.3
%
(1)
The company incurred severance and related
charges related to a reduction of its workforce.
(2)
The company recognized a goodwill
impairment during the three and six months ended March 31,
2024.
COMPASS MINERALS
INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF
OPERATIONS
(unaudited, in millions,
except share and per-share data)
Three Months Ended
March 31,
Six Months Ended
March 31,
2024
2023
2024
2023
Sales
$
364.0
$
411.1
$
705.7
$
763.5
Shipping and handling cost
110.6
130.1
201.9
237.5
Product cost
180.5
195.8
360.3
370.8
Gross profit
72.9
85.2
143.5
155.2
Selling, general and administrative
expenses
33.3
34.4
79.0
76.2
Loss on impairments
106.6
—
181.4
—
Other operating (income) expense
(21.2
)
2.9
(15.8
)
3.2
Operating (loss) earnings
(45.8
)
47.9
(101.1
)
75.8
Other (income) expense:
Interest income
(0.2
)
(1.9
)
(0.6
)
(3.0
)
Interest expense
17.1
14.2
32.9
28.1
(Gain) loss on foreign exchange
(2.5
)
(0.2
)
(0.6
)
2.3
Net loss in equity investee
—
1.4
—
2.3
Other expense, net
0.9
0.9
1.6
1.0
(Loss) earnings before income taxes
(61.1
)
33.5
(134.4
)
45.1
Income tax (benefit) expense
(13.1
)
55.1
(11.3
)
67.0
Net loss
$
(48.0
)
$
(21.6
)
$
(123.1
)
$
(21.9
)
Basic net loss per common share
$
(1.16
)
$
(0.53
)
$
(2.99
)
$
(0.55
)
Diluted net loss per common share
$
(1.16
)
$
(0.53
)
$
(2.99
)
$
(0.55
)
Weighted-average common shares outstanding
(in thousands):(1)
Basic
41,306
41,110
41,255
40,423
Diluted
41,306
41,110
41,255
40,423
(1)
Weighted participating securities include
RSUs and PSUs that receive non-forfeitable dividends and consist of
684,000 and 732,000 weighted participating securities for the three
and six months ended March 31, 2024, respectively, and 439,000 and
477,000 weighted participating securities for the three and six
months ended March 31, 2023, respectively.
COMPASS MINERALS
INTERNATIONAL, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(unaudited, in
millions)
March 31,
Sept. 30,
2024
2023
ASSETS
Cash and cash equivalents
$
40.0
$
38.7
Receivables, net
143.0
129.5
Inventories
367.7
392.2
Other current assets
47.4
33.4
Property, plant and equipment, net
793.5
852.2
Intangible and other noncurrent assets
260.5
372.0
Total assets
$
1,652.1
$
1,818.0
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current portion of long-term debt
$
5.0
$
5.0
Other current liabilities
195.9
270.8
Long-term debt, net of current portion
872.2
800.3
Deferred income taxes and other noncurrent
liabilities
191.3
224.7
Total stockholders' equity
387.7
517.2
Total liabilities and stockholders'
equity
$
1,652.1
$
1,818.0
COMPASS MINERALS
INTERNATIONAL, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(unaudited, in
millions)
Six Months Ended March
31,
2024
2023
Net cash provided by operating
activities
$
22.3
$
149.5
Cash flows from investing activities:
Capital expenditures
(65.3
)
(49.3
)
Other, net
(1.1
)
(0.3
)
Net cash used in investing activities
(66.4
)
(49.6
)
Cash flows from financing activities:
Proceeds from revolving credit facility
borrowings
217.2
16.7
Principal payments on revolving credit
facility borrowings
(176.5
)
(168.2
)
Proceeds from issuance of long-term
debt
69.4
37.5
Principal payments on long-term debt
(38.0
)
(9.1
)
Payments for contingent consideration
(9.1
)
—
Net proceeds from private placement of
common stock
—
240.7
Dividends paid
(12.7
)
(12.6
)
Deferred financing costs
(2.1
)
—
Shares withheld to satisfy employee tax
obligations
(1.8
)
(1.6
)
Other, net
(1.1
)
(0.5
)
Net cash provided by financing
activities
45.3
102.9
Effect of exchange rate changes on cash
and cash equivalents
0.1
0.8
Net change in cash and cash
equivalents
1.3
203.6
Cash and cash equivalents, beginning of
the year
38.7
46.1
Cash and cash equivalents, end of
period
$
40.0
$
249.7
COMPASS MINERALS
INTERNATIONAL, INC.
SEGMENT INFORMATION
(unaudited, in
millions)
Three Months Ended March 31,
2024
Salt
Plant
Nutrition
Corporate &
Other(1)
Total
Sales to external customers
$
310.4
$
50.1
$
3.5
$
364.0
Intersegment sales
—
0.7
(0.7
)
—
Shipping and handling cost
104.0
6.6
—
110.6
Operating earnings (loss)(2)
66.4
(53.4
)
(58.8
)
(45.8
)
Depreciation, depletion and
amortization
16.2
8.7
1.9
26.8
Total assets (as of end of period)
998.4
416.0
237.7
1,652.1
Three Months Ended March 31,
2023
Salt
Plant
Nutrition
Corporate &
Other(1)
Total
Sales to external customers
$
360.5
$
47.7
$
2.9
$
411.1
Intersegment sales
—
1.4
(1.4
)
—
Shipping and handling cost
124.0
6.1
—
130.1
Operating earnings (loss)(3)(4)
73.1
(0.7
)
(24.5
)
47.9
Depreciation, depletion and
amortization
14.8
8.1
1.6
24.5
Total assets (as of end of period)
924.1
472.7
387.9
1,784.7
Six Months Ended March 31, 2024
Salt
Plant
Nutrition
Corporate &
Other(1)
Total
Sales to external customers
$
584.7
$
99.8
$
21.2
$
705.7
Intersegment sales
—
3.8
(3.8
)
—
Shipping and handling cost
187.7
13.6
0.6
201.9
Operating earnings (loss)(2)
116.9
(55.7
)
(162.3
)
(101.1
)
Depreciation, depletion and
amortization
31.4
17.1
3.8
52.3
Six Months Ended March 31, 2023
Salt
Plant
Nutrition
Corporate &
Other(1)
Total
Sales to external customers
$
668.6
$
89.3
$
5.6
$
763.5
Intersegment sales
—
4.3
(4.3
)
—
Shipping and handling cost
226.7
10.8
—
237.5
Operating earnings (loss)(3)(4)
120.2
10.3
(54.7
)
75.8
Depreciation, depletion and
amortization
28.7
16.4
3.3
48.4
(1)
Corporate and other includes corporate
entities, records management operations, the Fortress fire
retardant business, equity method investments, lithium costs 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)
The company recognized impairments of
goodwill, long-lived assets and inventory related to Fortress; and
goodwill related to Plant Nutrition of $108.1 million and $182.9
million during the three and six months ended March 31, 2024,
respectively, which impacted operating results. The company also
recognized the impairment of long-lived assets related to the
termination of the lithium development project for the six months
ended March 31, 2024.
(3)
Corporate operating results were impacted
by net gains of $24.3 million and $21.4 million related to the
decline in the valuation of the Fortress contingent consideration
for the three and six months ended March 31, 2024, respectively.
Corporate operating results also include net reimbursements related
to the settled SEC investigation of $0.4 million and $0.1 million
for the three and six months ended March 31, 2023,
respectively.
(4)
The company continued to take steps to
align its cost structure to its current business needs. These
initiatives impacted Corporate operating results and resulted in
net severance and related charges for reductions in workforce and
changes to executive leadership and additional restructuring costs
related to the termination of the Company’s lithium development
project of $3.1 million and $5.6 million for the three and six
months ended March 31, 2024, respectively, and $3.3 million for the
three and six months ended March 31, 2023.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240507116979/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
Compass Minerals (NYSE:CMP)
過去 株価チャート
から 4 2024 まで 5 2024
Compass Minerals (NYSE:CMP)
過去 株価チャート
から 5 2023 まで 5 2024