Compass Minerals Reports Fiscal 2023 Third-Quarter Results
MANAGEMENT COMMENTARY
"The third quarter demonstrates tangible progress toward executing upon several strategic priorities that we believe over time will accelerate our growth and enhance the value of the enterprise," said Kevin S. Crutchfield, president and CEO. "We are pleased with the results across our businesses, most notably the continued improvement in profitability per ton in our Salt business. In addition, we are forging ahead on important elements of our lithium project, including the completion of a binding supply agreement with Ford and the advancement of the commercial-scale demonstration DLE unit in
QUARTERLY HIGHLIGHTS
-
Total company operating loss improved to
for the quarter compared to a loss of$0.6 million in the prior-year quarter;$3.5 million -
Quarterly net income from continuing operations of
versus a net loss of$39.9 million over the corresponding period last year, driven by a$10.7 million tax benefit in the current quarter reflecting the impact of the recent acquisition of Fortress North America (Fortress) and recent changes in Canadian tax law;$42.7 million -
Adjusted EBITDA from continuing operations essentially flat year over year at
on improved adjusted EBITDA margins;$28.6 million -
Reported year-over-year increases in Salt operating earnings and adjusted EBITDA of
75% and31% , respectively, with a nearly50% improvement in adjusted EBITDA per ton to compared to the corresponding period last year; year-over-year increases in highway deicing and consumer and industrial average pricing allowed the company to recoup substantial inflationary cost increases incurred over the last year;$24.41 -
Acquired remaining
55% not previously owned of Fortress, a next-generation fire-retardant company, and achieved its first commercial sales during the quarter; -
Announced binding, multiyear supply agreement with Ford Motor Company (Ford) to deliver up to
40% of planned phase-one battery-grade lithium carbonate from Compass Minerals'Ogden, Utah , lithium brine development for an initial five-year term; and -
Extended debt maturity profile via refinancing of outstanding
$250 million 4.875% Senior Notes due July 2024 with expansion of revolver to$75 million and a$375 million Term Loan A issuance.$200 million
FINANCIAL RESULTS1
(in millions, except per share data) |
|
Three Months Ended June 30, 2023 |
|
Nine Months Ended June 30, 2023 |
||||
Revenue |
|
$ |
207.6 |
|
|
$ |
971.1 |
|
Operating (loss) earnings |
|
|
(0.6 |
) |
|
|
75.2 |
|
Adjusted operating earnings |
|
|
1.6 |
|
|
|
80.6 |
|
Adjusted EBITDA* |
|
|
28.6 |
|
|
|
167.8 |
|
Net earnings |
|
|
39.9 |
|
|
|
18.0 |
|
Net earnings per diluted share |
|
|
0.96 |
|
|
|
0.44 |
|
Adjusted net earnings* |
|
|
42.0 |
|
|
|
23.3 |
|
Adjusted net earnings* per diluted share |
|
|
1.01 |
|
|
|
0.57 |
|
*Non-GAAP financial measure. Reconciliations to the most directly comparable GAAP financial measure are provided in tables at the end of this press release. |
Consolidated operating loss of
_______________ | ||
1 |
All amounts in this press release represent results from continuing operations unless otherwise noted, except for amounts pertaining to the fiscal 2022 condensed consolidated statements of cash flows, which include results from discontinued operations. |
SALT BUSINESS SUMMARY
Driven by price increases, operating earnings rose
Salt fiscal 2023 third-quarter revenue totaled
Distribution costs and all-in product costs (defined at the segment level as sales to external customers less distribution costs less operating earnings) per ton both increased slightly year over year. These costs reflect the cost structure of salt produced and inventoried in fiscal 2022 amid a period of substantial inflationary pressure and current period inflation.
PLANT NUTRITION BUSINESS SUMMARY
Operating earnings in the Plant Nutrition business totaled
Plant Nutrition third-quarter revenue totaled
FORTRESS
As previously disclosed, Compass Minerals completed the acquisition of the remaining
Fortress is expected to generate between
LITHIUM PROJECT UPDATE
In the third quarter, Compass Minerals continued to advance its lithium project on the Great Salt Lake, signing a binding multiyear agreement with Ford to provide up to
Compass Minerals has been actively engaged with political and regulatory leaders in
The company continues to refine capital, operating, and engineering assumptions related to its lithium project. As previously communicated, the company will update its project-related financial disclosures once the rulemaking process governing lithium development at the Great Salt Lake is finalized.
CASH FLOW AND FINANCIAL POSITION
Net cash provided by operating activities amounted to
Net cash used in investing activities was
Net cash used in financing activities was
The company ended the quarter with
UPDATED FISCAL OUTLOOK
The company has provided updated commentary regarding its fiscal 2023 financial outlook as well as initial commentary regarding the North American highway deicing bidding process for fiscal 2024.
Salt Segment |
|
|
2023 Range |
Highway deicing sales volumes (thousands of tons) |
9,000 - 9,400 |
Consumer and industrial sales volumes (thousands of tons) |
2,000 - 2,150 |
Total salt sales volumes (thousands of tons) |
11,000 - 11,550 |
|
|
Revenue (in millions) |
|
Adjusted EBITDA (in millions) |
|
The performance guidance for the Salt segment for fiscal 2023 has been narrowed to reflect the conclusion of the winter deicing season and the fact that the fiscal year is largely complete. The company's original guidance for the year assumed average winter activity for the year. Despite below-average winter deicing activity within the company's core North American markets this year, the midpoint of its full-year adjusted EBITDA guidance is just slightly below the midpoint of its original guidance, largely reflecting favorable mix in highway deicing sales and strong C&I pricing throughout the year.
2023/2024 North American Bid Season
Approximately
Plant Nutrition Segment |
|
|
2023 Range |
Sales volumes (thousands of tons) |
200 – 225 |
Revenue (in millions) |
|
Adjusted EBITDA (in millions) |
|
The performance guidance for the Plant Nutrition segment for fiscal 2023 has been narrowed to reflect the fact that the fiscal year is nearly complete. Despite demand challenges due to extraordinary weather in key markets during the year, the company is maintaining the midpoint of its adjusted EBITDA guidance largely due to the adherence to a disciplined approach to pricing throughout the year that allowed it to maintain a strong premium to alternative products.
Other Assumptions |
|
($ in millions) |
2023 Range |
Corporate and other expense, net* |
|
Depreciation, depletion and amortization |
|
Interest expense |
|
Effective income tax rate (excl. valuation allowance) |
|
|
|
Capital expenditures: |
|
Sustaining |
|
Lithium |
|
Total |
|
* Corporate and other expense, net includes Fortress financial results and lithium-related development operating expenses of |
Corporate and other expense, net is expected to be within a range of
Projected total capital expenditures for fiscal 2023 are now expected to be in a range of
CONFERENCE CALL
Compass Minerals will discuss its results on a conference call tomorrow morning, Wednesday, Aug. 9, 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
A supporting corporate presentation with fiscal 2023 third-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, the company is pursuing development of a sustainable lithium brine resource to support the North American battery market and is owner of Fortress North America, a next-generation fire retardant company. Compass Minerals operates 12 production and packaging facilities with nearly 2,000 employees throughout the
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 company's lithium brine development project, including the advancement of a commercial-scale demonstration DLE unit, planned lithium carbonate production, engagement with political and regulatory leaders, and refinement of capital, operating, and engineering assumptions related to the project; expectations for highway deicing pricing and volumes for the upcoming winter, and the company's outlook for fiscal 2023, 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 the proposed development of its lithium mineral resource or its investment in 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, 2022 and its Quarterly Reports on Form 10-Q for the quarters ended Dec. 31, 2022, March 31, 2023 and June 30, 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.
The company has completed an initial assessment to define the lithium resource at Compass Minerals’ existing operations in accordance with applicable SEC regulations, including Subpart 1300. Pursuant to Subpart 1300, mineral resources are not mineral reserves and do not have demonstrated economic viability. The company’s mineral resource estimates, including estimates of the lithium resource, are based on many factors, including assumptions regarding extraction rates and duration of mining operations, and the quality of in-place resources. For example, the process technology for commercial extraction of lithium from brines with low lithium and high impurity (primarily magnesium) is still developing. Accordingly, there is no certainty that all or any part of the lithium mineral resource identified by the company’s initial assessment will be converted into an economically extractable mineral reserve.
Non-GAAP Measures
In addition to using
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. 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 June 30, 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 |
|
SG&A |
|
$ |
0.7 |
|
$ |
— |
|
|
$ |
0.7 |
|
$ |
0.02 |
|||
Restructuring charges |
|
Salt |
|
COGS and SG&A |
|
|
0.5 |
|
|
|
(0.1 |
) |
|
|
0.4 |
|
|
|
0.01 |
|
Restructuring charges |
|
Plant Nutrition |
|
COGS and SG&A |
|
|
1.0 |
|
|
|
— |
|
|
|
1.0 |
|
|
|
0.02 |
|
Total |
|
|
|
|
|
$ |
2.2 |
|
|
$ |
(0.1 |
) |
|
$ |
2.1 |
|
|
$ |
0.05 |
|
Special Items Impacting the Nine Months Ended June 30, 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 |
|
SG&A |
|
$ |
2.6 |
|
|
$ |
— |
|
|
$ |
2.6 |
|
|
$ |
0.06 |
|
Restructuring charges |
|
Salt |
|
COGS and SG&A |
|
|
1.5 |
|
|
|
(0.1 |
) |
|
|
1.4 |
|
|
|
0.04 |
|
Restructuring charges |
|
Plant Nutrition |
|
COGS and SG&A |
|
|
1.4 |
|
|
|
— |
|
|
|
1.4 |
|
|
|
0.03 |
|
Accrued legal costs related to SEC investigation |
|
Corporate and Other |
|
SG&A |
|
|
(0.1 |
) |
|
|
— |
|
|
|
(0.1 |
) |
|
|
— |
|
Total |
|
|
|
|
|
$ |
5.4 |
|
|
$ |
(0.1 |
) |
|
$ |
5.3 |
|
|
$ |
0.13 |
|
(1) |
There were no substantial income tax benefits related to these items given the |
Reconciliation for Adjusted Operating Earnings (Loss) (unaudited, in millions) |
|||||||||||||||
|
Three Months Ended June 30, |
|
Nine Months Ended June 30, |
||||||||||||
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
Operating (loss) earnings |
$ |
(0.6 |
) |
|
$ |
(3.5 |
) |
|
$ |
75.2 |
|
|
$ |
36.9 |
|
Executive transition costs(1) |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
3.8 |
|
Restructuring charges(2) |
|
2.2 |
|
|
|
— |
|
|
|
5.5 |
|
|
|
— |
|
Accrued loss and legal costs related to SEC investigation(3) |
|
— |
|
|
|
2.8 |
|
|
|
(0.1 |
) |
|
|
19.5 |
|
Adjusted operating earnings (loss) |
$ |
1.6 |
|
|
$ |
(0.7 |
) |
|
$ |
80.6 |
|
|
$ |
60.2 |
|
Sales |
|
207.6 |
|
|
|
214.7 |
|
|
|
971.1 |
|
|
|
994.7 |
|
Operating margin |
|
(0.3 |
)% |
|
|
(1.6 |
)% |
|
|
7.7 |
% |
|
|
3.7 |
% |
Adjusted operating margin |
|
0.8 |
% |
|
|
(0.3 |
)% |
|
|
8.3 |
% |
|
|
6.1 |
% |
(1) |
The company incurred severance and other costs related to executive transition. |
|
(2) |
The company incurred severance and related charges related to a reduction of its workforce. |
|
(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 June 30, |
|
Nine Months Ended June 30, |
||||||||||||
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
Net earnings (loss) from continuing operations |
$ |
39.9 |
|
$ |
(10.7 |
) |
|
$ |
18.0 |
|
|
$ |
(31.8 |
) |
|
Executive transition costs, net of tax(1) |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
3.2 |
|
Restructuring charges, net of tax(2) |
|
2.1 |
|
|
|
— |
|
|
|
5.4 |
|
|
|
— |
|
Accrued loss and legal costs related to SEC investigation, net of tax(3) |
|
— |
|
|
|
3.1 |
|
|
|
(0.1 |
) |
|
|
17.6 |
|
Deferred tax valuation allowance(4) |
|
— |
|
|
|
2.4 |
|
|
|
— |
|
|
|
30.4 |
|
Adjusted net earnings (loss) from continuing operations |
$ |
42.0 |
|
|
$ |
(5.2 |
) |
|
$ |
23.3 |
|
|
$ |
19.4 |
|
|
|
|
|
|
|
|
|
||||||||
Net earnings (loss) from continuing operations per diluted share |
$ |
0.96 |
|
|
$ |
(0.32 |
) |
|
$ |
0.44 |
|
|
$ |
(0.94 |
) |
Adjusted net earnings (loss) from continuing operations per diluted share |
$ |
1.01 |
|
|
$ |
(0.16 |
) |
|
$ |
0.57 |
|
|
$ |
0.56 |
|
Weighted-average common shares outstanding (in thousands): |
|
|
|
|
|
|
|
||||||||
Diluted |
|
41,142 |
|
|
|
34,154 |
|
|
|
40,663 |
|
|
|
34,110 |
|
(1) |
The company incurred severance and other costs related to executive transition of |
|
(2) |
The company incurred severance and related charges related to a reduction of its workforce. Charges for the three and nine months ended June 30, 2023 were |
|
(3) |
The company recognized costs, net of reimbursements, related to the settled SEC investigation of |
|
(4) |
The company recognized a valuation allowance for certain deferred tax assets in the prior year period due to their uncertainty of being realized. |
Reconciliation for EBITDA and Adjusted EBITDA (unaudited, in millions) |
|||||||||||||||
|
Three Months Ended June 30, |
|
Nine Months Ended June 30, |
||||||||||||
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
Net earnings (loss) from continuing operations |
$ |
39.9 |
|
|
$ |
(10.7 |
) |
|
$ |
18.0 |
|
|
$ |
(31.8 |
) |
Interest expense |
|
14.3 |
|
|
|
13.4 |
|
|
|
42.4 |
|
|
|
41.2 |
|
Income tax (benefit) expense |
|
(42.7 |
) |
|
|
(1.1 |
) |
|
|
24.3 |
|
|
|
28.1 |
|
Depreciation, depletion and amortization |
|
24.3 |
|
|
|
27.0 |
|
|
|
72.7 |
|
|
|
83.2 |
|
EBITDA from continuing operations |
|
35.8 |
|
|
|
28.6 |
|
|
|
157.4 |
|
|
|
120.7 |
|
Adjustments to EBITDA from continuing operations: |
|
|
|
|
|
|
|
||||||||
Stock-based compensation - non cash |
|
3.5 |
|
|
|
3.9 |
|
|
|
17.2 |
|
|
|
11.6 |
|
Interest income |
|
(1.7 |
) |
|
|
(0.2 |
) |
|
|
(4.7 |
) |
|
|
(0.5 |
) |
Loss (gain) on foreign exchange |
|
2.3 |
|
|
|
(6.1 |
) |
|
|
4.6 |
|
|
|
(3.5 |
) |
Gain from remeasurement of equity method investment |
|
(16.2 |
) |
|
|
— |
|
|
|
(16.2 |
) |
|
|
— |
|
Executive transition costs(1) |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
4.3 |
|
Restructuring charges(2) |
|
2.2 |
|
|
|
— |
|
|
|
5.9 |
|
|
|
— |
|
Accrued loss and legal costs related to SEC investigation(3) |
|
— |
|
|
|
2.8 |
|
|
|
(0.1 |
) |
|
|
19.5 |
|
Other expense (income), net |
|
2.7 |
|
|
|
(0.1 |
) |
|
|
3.7 |
|
|
|
— |
|
Adjusted EBITDA from continuing operations |
|
28.6 |
|
|
|
28.9 |
|
|
|
167.8 |
|
|
|
152.1 |
|
Adjusted EBITDA from discontinued operations |
|
— |
|
|
|
3.1 |
|
|
|
— |
|
|
|
19.0 |
|
Adjusted EBITDA including discontinued operations |
$ |
28.6 |
|
|
$ |
32.0 |
|
|
$ |
167.8 |
|
|
$ |
171.1 |
|
(1) |
The company incurred severance and other costs related to executive transition. |
|
(2) |
The company incurred severance and related charges related to a reduction of its workforce. |
|
(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 June 30, |
|
Nine Months Ended June 30, |
||||||||||||
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
Sales |
$ |
155.5 |
|
|
$ |
156.2 |
|
|
$ |
824.1 |
|
|
$ |
821.4 |
|
Operating earnings |
$ |
21.7 |
|
|
$ |
12.4 |
|
|
$ |
141.9 |
|
|
$ |
101.1 |
|
Operating margin |
|
14.0 |
% |
|
|
7.9 |
% |
|
|
17.2 |
% |
|
|
12.3 |
% |
Adjusted operating earnings(1) |
$ |
22.2 |
|
|
$ |
12.4 |
|
|
$ |
143.4 |
|
|
$ |
101.1 |
|
Adjusted operating margin(1) |
|
14.3 |
% |
|
|
7.9 |
% |
|
|
17.4 |
% |
|
|
12.3 |
% |
EBITDA(1) |
$ |
35.9 |
|
|
$ |
27.7 |
|
|
$ |
184.8 |
|
|
$ |
148.8 |
|
EBITDA(1) margin |
|
23.1 |
% |
|
|
17.7 |
% |
|
|
22.4 |
% |
|
|
18.1 |
% |
Adjusted EBITDA(1) |
$ |
36.4 |
|
|
$ |
27.7 |
|
|
$ |
186.3 |
|
|
$ |
148.8 |
|
Adjusted EBITDA(1) margin |
|
23.4 |
% |
|
|
17.7 |
% |
|
|
22.6 |
% |
|
|
18.1 |
% |
Sales volumes (in thousands of tons): |
|
|
|
|
|
|
|
||||||||
Highway deicing |
|
1,070 |
|
|
|
1,232 |
|
|
|
7,886 |
|
|
|
8,854 |
|
Consumer and industrial |
|
421 |
|
|
|
451 |
|
|
|
1,529 |
|
|
|
1,600 |
|
Total Salt |
|
1,491 |
|
|
|
1,683 |
|
|
|
9,415 |
|
|
|
10,454 |
|
Average prices (per ton): |
|
|
|
|
|
|
|
||||||||
Highway deicing |
$ |
73.86 |
|
|
$ |
63.73 |
|
|
$ |
68.86 |
|
|
$ |
61.25 |
|
Consumer and industrial |
$ |
181.66 |
|
|
$ |
172.41 |
|
|
$ |
183.81 |
|
|
$ |
174.47 |
|
Total Salt |
$ |
104.28 |
|
|
$ |
92.83 |
|
|
$ |
87.53 |
|
|
$ |
78.58 |
|
(1) |
Non-GAAP financial measure. Reconciliations follow in these tables. |
Reconciliation for Salt Segment Adjusted Operating Earnings (unaudited, in millions) |
|||||||||||||||
|
Three Months Ended June 30, |
|
Nine Months Ended June 30, |
||||||||||||
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
Reported GAAP segment operating earnings |
$ |
21.7 |
|
|
$ |
12.4 |
|
|
$ |
141.9 |
|
|
$ |
101.1 |
|
Restructuring charges(1) |
|
0.5 |
|
|
|
— |
|
|
|
1.5 |
|
|
|
— |
|
Segment adjusted operating earnings |
$ |
22.2 |
|
|
$ |
12.4 |
|
|
$ |
143.4 |
|
|
$ |
101.1 |
|
Segment sales |
|
155.5 |
|
|
|
156.2 |
|
|
|
824.1 |
|
|
|
821.4 |
|
Segment adjusted operating margin |
|
14.3 |
% |
|
|
7.9 |
% |
|
|
17.4 |
% |
|
|
12.3 |
% |
(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 June 30, |
|
Nine Months Ended June 30, |
||||||||||||
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
Reported GAAP segment operating earnings |
$ |
21.7 |
|
|
$ |
12.4 |
|
|
$ |
141.9 |
|
|
$ |
101.1 |
|
Depreciation, depletion and amortization |
|
14.2 |
|
|
|
15.3 |
|
|
|
42.9 |
|
|
|
47.7 |
|
Segment EBITDA |
$ |
35.9 |
|
|
$ |
27.7 |
|
|
$ |
184.8 |
|
|
$ |
148.8 |
|
Restructuring charges(1) |
|
0.5 |
|
|
|
— |
|
|
|
1.5 |
|
|
|
— |
|
Segment adjusted EBITDA |
$ |
36.4 |
|
|
$ |
27.7 |
|
|
$ |
186.3 |
|
|
$ |
148.8 |
|
Segment sales |
|
155.5 |
|
|
|
156.2 |
|
|
|
824.1 |
|
|
|
821.4 |
|
Segment adjusted EBITDA margin |
|
23.4 |
% |
|
|
17.7 |
% |
|
|
22.6 |
% |
|
|
18.1 |
% |
(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 June 30, |
|
Nine Months Ended June 30, |
||||||||||||
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
Sales |
$ |
47.5 |
|
|
$ |
55.6 |
|
|
$ |
136.8 |
|
|
$ |
164.5 |
|
Operating earnings |
$ |
2.5 |
|
|
$ |
10.6 |
|
|
$ |
12.8 |
|
|
$ |
24.5 |
|
Operating margin |
|
5.3 |
% |
|
|
19.1 |
% |
|
|
9.4 |
% |
|
|
14.9 |
% |
Adjusted operating earnings(1) |
$ |
3.5 |
|
|
$ |
10.6 |
|
|
$ |
14.2 |
|
|
$ |
24.5 |
|
Adjusted operating margin(1) |
|
7.4 |
% |
|
|
19.1 |
% |
|
|
10.4 |
% |
|
|
14.9 |
% |
EBITDA(1) |
$ |
10.7 |
|
|
$ |
19.4 |
|
|
$ |
37.4 |
|
|
$ |
50.9 |
|
EBITDA(1) margin |
|
22.5 |
% |
|
|
34.9 |
% |
|
|
27.3 |
% |
|
|
30.9 |
% |
Adjusted EBITDA(1) |
$ |
11.7 |
|
|
$ |
19.4 |
|
|
$ |
38.8 |
|
|
$ |
50.9 |
|
Adjusted EBITDA(1) margin |
|
24.6 |
% |
|
|
34.9 |
% |
|
|
28.4 |
% |
|
|
30.9 |
% |
Sales volumes (in thousands of tons) |
|
63 |
|
|
|
67 |
|
|
|
168 |
|
|
|
224 |
|
Average price (per ton) |
$ |
752 |
|
|
$ |
827 |
|
|
$ |
814 |
|
|
$ |
735 |
|
(1) |
Non-GAAP financial measure. Reconciliations follow in these tables. |
Reconciliation for Plant Nutrition Segment Adjusted Operating Earnings (unaudited, in millions) |
|||||||||||||||
|
Three Months Ended June 30, |
|
Nine Months Ended June 30, |
||||||||||||
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
Reported GAAP segment operating earnings |
$ |
2.5 |
|
|
$ |
10.6 |
|
|
$ |
12.8 |
|
|
$ |
24.5 |
|
Restructuring charges(1) |
|
1.0 |
|
|
|
— |
|
|
|
1.4 |
|
|
|
— |
|
Segment adjusted operating earnings |
$ |
3.5 |
|
|
$ |
10.6 |
|
|
$ |
14.2 |
|
|
$ |
24.5 |
|
Segment sales |
|
47.5 |
|
|
|
55.6 |
|
|
|
136.8 |
|
|
|
164.5 |
|
Segment adjusted operating margin |
|
7.4 |
% |
|
|
19.1 |
% |
|
|
10.4 |
% |
|
|
14.9 |
% |
(1) |
The company incurred severance and related charges related to a reduction of its workforce. |
Reconciliation for Plant Nutrition Segment EBITDA and Adjusted EBITDA (unaudited, in millions) |
|||||||||||||||
|
Three Months Ended June 30, |
|
Nine Months Ended June 30, |
||||||||||||
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
Reported GAAP segment operating earnings |
$ |
2.5 |
|
|
$ |
10.6 |
|
|
$ |
12.8 |
|
|
$ |
24.5 |
|
Depreciation, depletion and amortization |
|
8.2 |
|
|
|
8.8 |
|
|
|
24.6 |
|
|
|
26.4 |
|
Segment EBITDA |
$ |
10.7 |
|
|
$ |
19.4 |
|
|
$ |
37.4 |
|
|
$ |
50.9 |
|
Restructuring charges(1) |
|
1.0 |
|
|
|
— |
|
|
|
1.4 |
|
|
|
— |
|
Segment adjusted EBITDA |
$ |
11.7 |
|
|
$ |
19.4 |
|
|
$ |
38.8 |
|
|
$ |
50.9 |
|
Segment sales |
|
47.5 |
|
|
|
55.6 |
|
|
|
136.8 |
|
|
|
164.5 |
|
Segment adjusted EBITDA margin |
|
24.6 |
% |
|
|
34.9 |
% |
|
|
28.4 |
% |
|
|
30.9 |
% |
(1) |
The company incurred severance and related charges related to a reduction of its workforce. |
COMPASS MINERALS INTERNATIONAL, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited, in millions, except share and per-share data) |
|||||||||||||||
|
Three Months Ended June 30, |
|
Nine Months Ended June 30, |
||||||||||||
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
Sales |
$ |
207.6 |
|
|
$ |
214.7 |
|
|
$ |
971.1 |
|
|
$ |
994.7 |
|
Shipping and handling cost |
|
53.8 |
|
|
|
58.7 |
|
|
|
291.3 |
|
|
|
314.5 |
|
Product cost |
|
119.2 |
|
|
|
122.1 |
|
|
|
490.0 |
|
|
|
521.8 |
|
Gross profit |
|
34.6 |
|
|
|
33.9 |
|
|
|
189.8 |
|
|
|
158.4 |
|
Selling, general and administrative expenses |
|
35.2 |
|
|
|
37.4 |
|
|
|
114.6 |
|
|
|
121.5 |
|
Operating (loss) earnings |
|
(0.6 |
) |
|
|
(3.5 |
) |
|
|
75.2 |
|
|
|
36.9 |
|
Other (income) expense: |
|
|
|
|
|
|
|
||||||||
Interest income |
|
(1.7 |
) |
|
|
(0.2 |
) |
|
|
(4.7 |
) |
|
|
(0.5 |
) |
Interest expense |
|
14.3 |
|
|
|
13.4 |
|
|
|
42.4 |
|
|
|
41.2 |
|
Loss (gain) on foreign exchange |
|
2.3 |
|
|
|
(6.1 |
) |
|
|
4.6 |
|
|
|
(3.5 |
) |
Net loss in equity investee |
|
0.8 |
|
|
|
1.3 |
|
|
|
3.1 |
|
|
|
3.4 |
|
Gain from remeasurement of equity method investment |
|
(16.2 |
) |
|
|
— |
|
|
|
(16.2 |
) |
|
|
— |
|
Other expense (income), net |
|
2.7 |
|
|
|
(0.1 |
) |
|
|
3.7 |
|
|
|
— |
|
(Loss) earnings from continuing operations before income taxes |
|
(2.8 |
) |
|
|
(11.8 |
) |
|
|
42.3 |
|
|
|
(3.7 |
) |
Income tax (benefit) expense from continuing operations |
|
(42.7 |
) |
|
|
(1.1 |
) |
|
|
24.3 |
|
|
|
28.1 |
|
Net earnings (loss) from continuing operations |
|
39.9 |
|
|
|
(10.7 |
) |
|
$ |
18.0 |
|
|
$ |
(31.8 |
) |
Net earnings from discontinued operations |
|
— |
|
|
|
2.8 |
|
|
|
— |
|
|
|
14.2 |
|
Net earnings (loss) |
$ |
39.9 |
|
|
$ |
(7.9 |
) |
|
$ |
18.0 |
|
|
$ |
(17.6 |
) |
|
|
|
|
|
|
|
|
||||||||
Basic net earnings (loss) from continuing operations per common share |
$ |
0.96 |
|
|
$ |
(0.32 |
) |
|
$ |
0.44 |
|
|
$ |
(0.94 |
) |
Basic net earnings from discontinued operations per common share |
|
— |
|
|
|
0.08 |
|
|
|
— |
|
|
|
0.42 |
|
Basic net earnings (loss) per common share |
$ |
0.96 |
|
|
$ |
(0.23 |
) |
|
$ |
0.44 |
|
|
$ |
(0.52 |
) |
|
|
|
|
|
|
|
|
||||||||
Diluted net earnings (loss) from continuing operations per common share |
$ |
0.96 |
|
|
$ |
(0.32 |
) |
|
$ |
0.44 |
|
|
$ |
(0.94 |
) |
Diluted net earnings from discontinued operations per common share |
|
— |
|
|
|
0.08 |
|
|
|
— |
|
|
|
0.42 |
|
Diluted net earnings (loss) per common share |
$ |
0.96 |
|
|
$ |
(0.23 |
) |
|
$ |
0.44 |
|
|
$ |
(0.52 |
) |
Weighted-average common shares outstanding (in thousands):(1) |
|
|
|
|
|
|
|
||||||||
Basic |
|
41,142 |
|
|
|
34,154 |
|
|
|
40,663 |
|
|
|
34,105 |
|
Diluted |
|
41,142 |
|
|
|
34,154 |
|
|
|
40,663 |
|
|
|
34,110 |
|
(1) |
Weighted participating securities include RSUs and PSUs that receive non-forfeitable dividends and consist of 453,000 and 469,000 weighted participating securities for the three and nine months ended June 30, 2023, respectively and 372,000 and 423,000 weighted participating securities for the three and nine months ended June 30, 2022, respectively. |
COMPASS MINERALS INTERNATIONAL, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited, in millions) |
|||||||
|
June 30, |
|
Sept. 30, |
||||
|
2023 |
|
2022 |
||||
ASSETS |
|||||||
Cash and cash equivalents |
$ |
58.0 |
|
$ |
46.1 |
||
Receivables, net |
|
95.8 |
|
|
|
167.2 |
|
Inventories |
|
340.1 |
|
|
|
304.4 |
|
Other current assets |
|
38.2 |
|
|
|
44.3 |
|
Property, plant and equipment, net |
|
817.1 |
|
|
|
776.6 |
|
Equity method investments |
|
— |
|
|
|
46.6 |
|
Intangible and other noncurrent assets |
|
383.4 |
|
|
|
258.3 |
|
Total assets |
$ |
1,732.6 |
|
|
$ |
1,643.5 |
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS' EQUITY |
|||||||
Current portion of long-term debt |
$ |
5.0 |
|
|
$ |
— |
|
Other current liabilities |
|
241.0 |
|
|
|
233.1 |
|
Long-term debt, net of current portion |
|
716.0 |
|
|
|
947.6 |
|
Deferred income taxes and other noncurrent liabilities |
|
233.9 |
|
|
|
206.4 |
|
Total stockholders' equity |
|
536.7 |
|
|
|
256.4 |
|
Total liabilities and stockholders' equity |
$ |
1,732.6 |
|
|
$ |
1,643.5 |
|
COMPASS MINERALS INTERNATIONAL, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited, in millions) |
|||||||
|
Nine Months Ended June 30, |
||||||
|
2023 |
|
2022 |
||||
Net cash provided by operating activities(1) |
$ |
121.3 |
|
|
$ |
148.9 |
|
|
|
|
|
||||
Cash flows from investing activities: |
|
|
|
||||
Capital expenditures(2) |
|
(78.9 |
) |
|
|
(68.9 |
) |
Proceeds from sale of business |
|
— |
|
|
|
61.2 |
|
Acquisition of business, net of cash acquired |
|
(18.9 |
) |
|
|
— |
|
Investments in equity method investees |
|
— |
|
|
|
(46.3 |
) |
Other, net |
|
(2.5 |
) |
|
|
0.9 |
|
|
|
|
|
||||
Net cash used in investing activities |
|
(100.3 |
) |
|
|
(53.1 |
) |
|
|
|
|
||||
Cash flows from financing activities: |
|
|
|
||||
Proceeds from revolving credit facility borrowings |
|
66.7 |
|
|
|
346.3 |
|
Principal payments on revolving credit facility borrowings |
|
(218.2 |
) |
|
|
(341.7 |
) |
Proceeds from issuance of long-term debt |
|
237.5 |
|
|
|
50.8 |
|
Principal payments on long-term debt |
|
(311.7 |
) |
|
|
(106.6 |
) |
Net proceeds from private placement of common stock |
|
240.7 |
|
|
|
— |
|
Dividends paid |
|
(18.7 |
) |
|
|
(15.7 |
) |
Deferred financing costs |
|
(3.9 |
) |
|
|
(0.4 |
) |
Proceeds from stock options exercised |
|
— |
|
|
|
0.3 |
|
Shares withheld to satisfy employee tax obligations |
|
(1.6 |
) |
|
|
(1.9 |
) |
Other, net |
|
(0.9 |
) |
|
|
(0.9 |
) |
|
|
|
|
||||
Net cash used in financing activities |
|
(10.1 |
) |
|
|
(69.8 |
) |
Effect of exchange rate changes on cash and cash equivalents |
|
1.0 |
|
|
|
0.2 |
|
Net change in cash and cash equivalents |
|
11.9 |
|
|
|
26.2 |
|
Cash and cash equivalents, beginning of the year |
|
46.1 |
|
|
|
21.0 |
|
|
|
|
|
||||
Cash and cash equivalents, end of period |
|
58.0 |
|
|
|
47.2 |
|
Less: cash and cash equivalents included in current assets held for sale |
|
— |
|
|
|
— |
|
Cash and cash equivalents of continuing operations, end of period |
$ |
58.0 |
|
|
$ |
47.2 |
|
(1) |
Includes cash flows provided by discontinued operations of |
|
(2) |
Includes capital expenditures of |
COMPASS MINERALS INTERNATIONAL, INC. SEGMENT INFORMATION (unaudited, in millions) |
||||||||||||||||
Three Months Ended June 30, 2023 |
|
Salt |
|
Plant Nutrition |
|
Corporate & Other(1) |
|
Total |
||||||||
Sales to external customers |
|
$ |
155.5 |
|
$ |
47.5 |
|
$ |
4.6 |
|
|
$ |
207.6 |
|
||
Intersegment sales |
|
|
— |
|
|
|
2.8 |
|
|
|
(2.8 |
) |
|
|
— |
|
Shipping and handling cost |
|
|
48.2 |
|
|
|
5.6 |
|
|
|
— |
|
|
|
53.8 |
|
Operating earnings (loss)(2)(3) |
|
|
21.7 |
|
|
|
2.5 |
|
|
|
(24.8 |
) |
|
|
(0.6 |
) |
Depreciation, depletion and amortization |
|
|
14.2 |
|
|
|
8.2 |
|
|
|
1.9 |
|
|
|
24.3 |
|
Total assets (as of end of period) |
|
|
995.7 |
|
|
|
468.2 |
|
|
|
268.7 |
|
|
|
1,732.6 |
|
Three Months Ended June 30, 2022 |
|
Salt |
|
Plant Nutrition |
|
Corporate & Other(1) |
|
Total |
||||||||
Sales to external customers |
|
$ |
156.2 |
|
|
$ |
55.6 |
|
|
$ |
2.9 |
|
|
$ |
214.7 |
|
Intersegment sales |
|
|
— |
|
|
|
1.9 |
|
|
|
(1.9 |
) |
|
|
— |
|
Shipping and handling cost |
|
|
52.2 |
|
|
|
6.5 |
|
|
|
— |
|
|
|
58.7 |
|
Operating earnings (loss)(2) |
|
|
12.4 |
|
|
|
10.6 |
|
|
|
(26.5 |
) |
|
|
(3.5 |
) |
Depreciation, depletion and amortization |
|
|
15.3 |
|
|
|
8.8 |
|
|
|
2.9 |
|
|
|
27.0 |
|
Total assets (as of end of period) |
|
|
980.6 |
|
|
|
441.2 |
|
|
|
155.2 |
|
|
|
1,577.0 |
|
Nine Months Ended June 30, 2023 |
|
Salt |
|
Plant Nutrition |
|
Corporate & Other(1) |
|
Total |
||||||||
Sales to external customers |
|
$ |
824.1 |
|
|
$ |
136.8 |
|
|
$ |
10.2 |
|
|
$ |
971.1 |
|
Intersegment sales |
|
|
— |
|
|
|
7.1 |
|
|
|
(7.1 |
) |
|
|
— |
|
Shipping and handling cost |
|
|
274.9 |
|
|
|
16.4 |
|
|
|
— |
|
|
|
291.3 |
|
Operating earnings (loss)(2)(3) |
|
|
141.9 |
|
|
|
12.8 |
|
|
|
(79.5 |
) |
|
|
75.2 |
|
Depreciation, depletion and amortization |
|
|
42.9 |
|
|
|
24.6 |
|
|
|
5.2 |
|
|
|
72.7 |
|
Nine Months Ended June 30, 2022 |
|
Salt |
|
Plant Nutrition |
|
Corporate & Other(1) |
|
Total |
||||||||
Sales to external customers |
|
$ |
821.4 |
|
|
$ |
164.5 |
|
|
$ |
8.8 |
|
|
$ |
994.7 |
|
Intersegment sales |
|
|
— |
|
|
|
5.0 |
|
|
|
(5.0 |
) |
|
|
— |
|
Shipping and handling cost |
|
|
294.0 |
|
|
|
20.5 |
|
|
|
— |
|
|
|
314.5 |
|
Operating earnings (loss)(2) |
|
|
101.1 |
|
|
|
24.5 |
|
|
|
(88.7 |
) |
|
|
36.9 |
|
Depreciation, depletion and amortization |
|
|
47.7 |
|
|
|
26.4 |
|
|
|
9.1 |
|
|
|
83.2 |
|
(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) |
Corporate operating results include net reimbursements related to the settled SEC investigation of |
|
(3) |
In April 2023, the Company took steps to align its cost structure to its current business needs. These initiatives resulted in restructuring charges of |
View source version on businesswire.com: https://www.businesswire.com/news/home/20230808517579/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
Source: Compass Minerals