Compass Minerals Reports Fiscal 2024 First-Quarter Results
- None.
- None.
Insights
The recent announcement by Compass Minerals regarding its Q1 fiscal 2024 financial results and strategic business decisions has significant bearing on its financial health and investor outlook. The company's decision to terminate the lithium project due to regulatory risks and changes in the commercial landscape implies a strategic pivot away from diversification into lithium extraction, which has been a hot sector due to the rise in electric vehicle production. This move will likely be seen as a risk-averse strategy, potentially stabilizing the company's focus but also foregoing the potential high growth associated with lithium markets.
From a financial perspective, the reported net loss of $75.1 million and the loss per diluted share of $1.83 are substantial and indicate underlying challenges. However, the adjusted EBITDA of $59.4 million, which is relatively stable year over year, along with the 33% improvement in adjusted EBITDA per ton in the Salt business, suggests operational efficiencies are being realized. The reduction in 2024 capital expenditure guidance by 6% reflects a commitment to improving returns on capital and may be well-received by investors looking for disciplined capital allocation and cost management.
One must consider the impact of seasonal factors, as the mild winter weather led to reduced demand for deicing products, which is a core segment for Compass Minerals. The guidance provided for the Salt and Plant Nutrition segments remains unchanged, indicating management's confidence in meeting their targets despite the mild winter. However, the adjustment in the Plant Nutrition guidance due to market pressures on pricing and sales risks could be a concern for stakeholders.
The termination of the lithium project by Compass Minerals represents a significant shift in the company's long-term growth strategy, with potential implications for its market positioning. The lithium sector is highly competitive and rapidly evolving, with increasing demand driven by the electric vehicle and renewable energy industries. Compass Minerals' exit from this space may limit its exposure to this high-growth market, but it also mitigates the associated risks and capital intensity. This decision could be interpreted by the market as a move to strengthen the company's core competencies in the Salt and Plant Nutrition segments where it has established market leadership.
It is important to note the 67% increase in Plant Nutrition sales volumes, which indicates a strong rebound in demand in core markets. However, the 29% decrease in average segment sales price due to global excess supply of potassium-based fertilizers presents a challenging pricing environment. These dynamics highlight the volatility in the agricultural sector and the importance of efficient supply chain and cost management strategies for Compass Minerals.
The company's financial position, with $245.8 million in liquidity, provides a buffer against market fluctuations and enables continued investment in core operations. This, combined with the strategic realignment towards its Salt and Plant Nutrition businesses, could be seen as a conservative approach to stabilize the company's performance in the face of external market pressures.
Compass Minerals' financial results and strategic decisions must be evaluated within the broader economic context. The mild winter weather experienced in Q1 fiscal 2024 is reflective of the cyclical nature of the company's business, which is heavily dependent on seasonal demand for deicing products. As such, the company's performance can be significantly impacted by climatic conditions, which are beyond its control. The strategic refocusing on core businesses may be an attempt to mitigate this volatility by strengthening its position in less weather-dependent markets.
The company's financial position, highlighted by a net cash used in operating activities of $65.6 million, up significantly from the prior year, raises questions about working capital management and cash flow stability. However, the decision to reduce capital expenditures and focus on cash flow generation and returns on capital could be seen as a prudent response to these challenges, particularly in an economic environment where cost control and operational efficiency are paramount.
Furthermore, the termination of the lithium project and the associated impairment charges of approximately $77.3 million reflect a significant reallocation of resources. This decision may be an acknowledgment of the heightened regulatory environment and shifting market dynamics that could affect the profitability and viability of new ventures, particularly in the resource extraction sector. The company's strategy to monitor and engage in legislative and regulatory processes in Utah to preserve the long-term optionality of the lithium potential suggests a balanced approach to managing potential future opportunities.
Renewed Focus on Generating Higher Cash Flow and Returns on Capital from Core Businesses
Company Announces Termination of Lithium Project
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
|
|
Three Months Ended
|
||||
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
-
In the Salt business, reported a
7% and8% increase year-over-year in both operating earnings and adjusted EBITDA, respectively, with a nearly33% improvement in adjusted EBITDA per ton to$23.01
-
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
Salt revenue totaled
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
PLANT NUTRITION BUSINESS SUMMARY
Plant Nutrition revenue for the quarter totaled
Operating loss in the Plant Nutrition business totaled
FORTRESS
The company recognized slightly better results related to the take-or-pay provisions of its calendar year 2023 contract with the
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
"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
Compass Minerals will continue to monitor and engage in legislative and regulatory processes in
CASH FLOW AND FINANCIAL POSITION
Net cash used in operating activities amounted to
Net cash used in investing activities was
Net cash provided by financing activities was
The company ended the quarter with
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) |
|
|
|
Adj. EBITDA (in millions) |
|
|
|
(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
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) |
|
Adj. EBITDA (in millions) |
|
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) |
|
( |
( |
(1) |
Fortress contribution only includes |
(2) |
Other adjusted EBITDA includes i) approximately |
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
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
Previously, the company expected between
Total Compass Minerals |
||||
|
2024 Adjusted EBITDA |
|||
|
Salt |
Plant Nutrition |
Corporate1 |
Total |
Adj. EBITDA (in millions) |
|
|
( |
|
|
|
|
|
|
|
2024 Capital Expenditures |
|||
|
Sustaining |
Lithium2 |
Fortress |
Total |
Capital expenditures (in millions) |
|
|
~ |
|
(1) |
Includes Fortress contribution of |
(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
Other Assumptions |
|
($ in millions) |
2024 Range |
Depreciation, depletion and amortization |
|
Interest expense, net |
|
Effective income tax rate (excl. valuation allowance and lithium impairment) |
|
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
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
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
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
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 |
Reconciliation for Adjusted Operating Earnings (unaudited, in millions) |
|||||||
|
Three Months Ended
|
||||||
|
|
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
|
||||||
|
|
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
|
||||||
|
|
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
|
||||||
|
|
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
|
||||||
|
|
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
|
||||||
|
|
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
|
||||||
|
|
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
|
||||||
|
|
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
|
|
Corporate
|
|
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
|
|
Corporate
|
|
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 |
(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 |
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
Source: Compass Minerals
FAQ
What are the fiscal 2024 first-quarter results for Compass Minerals (CMP)?
What was the expense recognized due to the termination of the lithium project?
What were the highlights of the Salt business in the first quarter?
What was the change in Plant Nutrition sales volumes year-over-year?
What was the company's liquidity at the end of the quarter?
