Compass Minerals Reports Fiscal 2024 Second-Quarter Results
Announces Decisive Measures to Accelerate Cash Flow Generation and Debt Reduction
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
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
|
|
Six Months Ended
|
||||||||||||
(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 coreWest 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
Salt revenue totaled
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
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
FORTRESS
As previously reported, in March of 2024
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
Net cash used in investing activities was
Net cash provided by financing activities was
The company ended the quarter with
In
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) |
|
Adj. EBITDA (in millions) |
|
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
The anticipated decline in inventory and associated conversion to cash resulting from the production curtailment described above is expected to be realized predominantly between
Plant Nutrition Segment |
|
|
2024 Range |
Sales volumes (thousands of tons) |
280 - 310 |
Revenue (in millions) |
|
Adj. EBITDA (in millions) |
|
Corporate |
|||
|
2024 Range |
||
|
Fortress1 |
Other2 |
Total |
Adj. EBITDA (in millions) |
|
( |
( |
(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 |
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
Total |
||||
|
2024 Adjusted EBITDA |
|||
|
Salt |
|
Corporate1 |
Total |
Adj. EBITDA (in millions) |
|
|
( |
|
|
|
|
|
|
|
2024 Capital Expenditures |
|||
|
Sustaining |
Lithium2 |
Fortress |
Total |
Capital expenditures (in millions) |
|
|
|
|
(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 |
Total capital expenditures for the company in 2024 are now 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 impairments) |
0% - 5% |
CONFERENCE CALL
A supporting corporate presentation with 2024 second-quarter results is available at investors.compassminerals.com.
About
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;
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, 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 (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 |
|
|
|
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 |
|
|
|
|
Loss on impairments |
|
|
51.0 |
|
|
— |
|
|
51.0 |
|
|
1.22 |
Total |
|
|
|
|
|
$ |
111.2 |
|
$ |
— |
|
$ |
111.2 |
|
$ |
2.65 |
Special Items Impacting the Six Months Ended (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 |
|
|
|
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 |
|
|
|
|
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 |
Reconciliation for Adjusted Operating Earnings (unaudited, in millions) |
|||||||||||||||
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
|
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 |
|
— |
|
|
|
(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 |
|
(3) |
The company recognized costs, net of reimbursements, related to the settled |
Reconciliation for Adjusted Net Earnings (Loss) (unaudited, in millions) |
|||||||||||||||
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
|
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 |
|
— |
|
|
|
(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 |
|
(3) |
The company recognized costs, net of reimbursements, related to the settled |
Reconciliation for EBITDA and Adjusted EBITDA (unaudited, in millions) |
|||||||||||||||
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
|
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 |
|
— |
|
|
|
(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 |
|
(3) |
The company recognized costs, net of reimbursements, related to the settled |
Salt Segment Performance (unaudited, in millions, except for sales volumes and prices per short ton) |
|||||||||||||||
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
|
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
|
|
Six Months Ended
|
||||||||||||
|
|
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
|
|
Six Months Ended
|
||||||||||||
|
|
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
|
|
Six Months Ended
|
||||||||||||
|
|
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
|
|
Six Months Ended
|
||||||||||||
|
|
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 |
Reconciliation for Plant Nutrition Segment EBITDA (unaudited, in millions) |
|||||||||||||||
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
|
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 |
CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited, in millions, except share and per-share data) |
|||||||||||||||
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
|
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 |
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited, in millions) |
|||||
|
|
|
|
||
|
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 |
|
|||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
|||||||
(unaudited, in millions) |
|||||||
|
Six Months Ended |
||||||
|
|
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 |
|
SEGMENT INFORMATION (unaudited, in millions) |
|||||||||||||||
Three Months Ended |
|
Salt |
|
Plant Nutrition |
|
Corporate
|
|
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 |
|
Salt |
|
Plant Nutrition |
|
Corporate
|
|
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 |
|
Salt |
|
Plant Nutrition |
|
Corporate
|
|
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 |
|
Salt |
|
Plant Nutrition |
|
Corporate
|
|
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 |
|
(3) |
Corporate operating results were impacted by net gains of |
|
(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 |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240507116979/en/
Investor Contact
Vice President, Investor Relations
+1.913.344.9111
InvestorRelations@compassminerals.com
Media Contact
Chief Public Affairs and Sustainability Officer
+1.913.344.9198
MediaRelations@compassminerals.com
Source: