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Compass Minerals International (CMP)

Participants
Douglas Kris Investor Relations
Kevin Crutchfield Chief Executive Officer
Jamie Standen Chief Financial Officer
Brad Griffith Chief Commercial Officer
George Schuller Chief Operations Officer
Chris Parkinson Credit Suisse
Joel Jackson BMO
Mark Connelly Stephens
Vincent Anderson Stifel
David Begleiter Deutsche Bank
Call transcript
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Operator

Good morning and welcome to Compass Minerals Fourth Quarter Earnings and Full Year Earnings Conference Call. [Operator Instructions] I will now turn the call over to Douglas Kris, Senior Director of Investor Relations. Please go ahead.

Douglas Kris

Good morning and welcome to the Compass Minerals fourth quarter and full year 2020 earnings conference call. Today, we will discuss our recent results and our outlook for 2021.

prepared Jamie our Standen. with and Kevin begin CFO, our will remarks CEO, from Crutchfield We

George Operations Joining Brad Commercial as Griffith, for our our in the Chief Officer Q&A as Officer. session are Schuller, Chief well

to Before company’s operational we view today materially. remarks can that and differ make expectations of as that I actual today’s getting cause financial XX, represent uncertainties online and involve our of XXXX. would These at started, discussion our everyone these the found remind be of results SEC outlook our the date, located could filings A February investors.compassminerals.com. risks risks in

Our financial measures. remarks non-GAAP certain also today include

You the release available Kevin which can in are items the call Crutchfield. reconciliations I both our these will now of over or online. find to turn earnings updated these of in corporate presentation,

Kevin Crutchfield

for morning of the for call. XXXX the providing on taking impacts time and to well will year some enterprise-wide efforts as XXXX a of I line as everyone start giving Good path our full our operating optimization earnings thoughts results quarter financial by and forward. top to and thanks before fourth our join our today overview

introduced to us. from on on communities improvement difficult laser and safely back responsibly, we bring and and women our grateful and focused perspective, extremely during staying of am operating committed for shareholders this remaining time. and for As each challenges to company look to a our new our for incredibly broader ideas continuing to delivering forward customers, professional and XXXX I every the of year personal one the men

and certain afternoon, due XXXX results. financial year of fell we our our events expectations, impacted factors published directly metrics yesterday to a of number full in other that XXXX As earnings our short largely external anticipated release

to the prudent our We to further shortly That strongly optimization our underpinned enterprise-wide that I taking more to longer see commitment to continued future. factor our said, on fully we term We financial the and estimate color control, to expect believe internally One unwavering started positively such management is the in transformational and guard and through our cannot simply for will manage team’s operations our rather those efforts are have but we throughout benefits steps must we weather. preparedness events. provide that of impact key Gulf weak we results at shutdowns multiple external in in and $XX the California conditions calendar which year from multiple fourth hurricanes mine. approximately year quarter both our which negatively and XXXX first and our wildfires Blanche Cote year drought America, weather winter Coast, timing in South our affecting million. $XX full season in brief, factors of included during to but the business quarter last impacted required operating the Nutrition Other income our both impacted adversely Plant demand the customers by million unplanned

South Nutrition agriculture earnings business Plant a year-over-year volumes XX% in operating achieved our addition, and in versus In American currency, sales local quarter XXXX. increase fourth experienced stronger

ultimately which by dollar, currency terms to U.S. our line of Brazilian hurt results. approximately XX% year the the weakened compared the during However, bottom U.S. in

to at look approximately consolidated for a approximately adjusted EBITDA and by year full we As when year decreased the XXXX basis, decreased net X% income X% compared results. on by XXXX

the On totaling full operations generate the $XXX flow to over positive side, from we cash positive strong continue year. for million

total for am managing $XX able and our the our below capital we aggressive million also for spend XX% year. I come guidance pleased to a plan midpoint original took the roughly of approach We to an of were in

cycles. through through $XX company’s varying to our million in cash to related which $XX deliver shareholders the for was ability Our million full free and cash weather confidence reflects year returned flow program, flow the over dividend our economic just and we

the in we into last dual strategic and asset. two of press we with businesses for separation American attracting each maximum South As counterparties the release assets goal commenced night, of have stated right our a unlocking our value

designed what our reducing of intend Chemical process to of customer essential for meeting we targeted these expedient our be transactions to use proceeds result, from a products. completed, to the Nutrition If a the for in our continue sale is formally focus and debt, As on and our we businesses America. re-launched both liquidity further enhance continue our our and demand Plant South

With Given years, capital debt to further deploy any enhance capabilities, after incremental is of maturities down this or whether so. we but the fielding our not be no appropriate execution over will for strategic plan towards sensitive multiyear to de-leveraging due to it these paying we becomes continuing topic, flexibility from any questions liquidity, flow provide runway ample information as matters, nature on cash debt organic process X equity our our our will near-term do of priority transactions, more free material generation and and valuation. dividends, improving our

Now adjusted to moving to EBITDA points EBITDA lower X%. increased despite adjusted approximately by percentage segment, X our year margins being Salt our full XX%

production at full tons Goderich have costs of production Goderich XXXX We out are and increased production results XX% continued flagship improved basis, also our year down XX%. performance saw from a mine. On

assets. me achieve improving perspective. secure full and new ultimately with America out a significant the enhancements long-term flexibility stronger both current of procurement designed before our needs North These the month build confident new teams, volume metrics heard to continue quarter from mine mining continuous plan, are When meeting to our steadily our was In that logistics in production its addition, set as seasonal a will production team optionality to provide that and cost alike. we during to potential to coupled and leading operating capture mine of have during Goderich’s and position highest salt we customers a demand highlight the by since course to value helping the this its progress long-term XXXX, conversion haulage. and you we have not our as sentiment fourth I reached at am communicate yet able

efficiently agility and hurricane culture year navigated production event. This Blanche despite who able each a effectively best Our XX during after storms and resume to in their approximately preparations still ensure lost also permeated four targets while in team achieve year-over-year year. our Blanche days of The strong our were that in us of mine Cote operating in organization full perhaps end events operational having year Gulf. the to the safety protect resilience team site XXXX. through Cote people allowed made is XXXX to in the production our the the resulted production hurricane managing record demonstrated throughout performance, reflected of significant by These the

which with existing the nearby we closing customers, capture a value like also our In of potentially levels portfolio a announcement in a enhancing logistics partners some its particular maintaining our our to to strong operations, analyzing our given us addition, opportunities team, efficiencies recent customers. on new give by reshaping I out our facility, competitor relationships. are relationships also worked network for of service while to putting while call our has diligently position carefully would to for to maximize cultivate across

Plant events harvest fall and crops, with from in own this the extreme some business, fertilizer application our its circumstances delayed previously, drought. year, mentioned wildfires particularly of those faced I tree the past particularly key including America, of season. North resulting nuts As Nutrition The unforeseen conditions along

up the quarter, making of well in to delivering revenue year-over-year Thanks quarter to last positioned ensure XX those the fourth capture sales third quarter volumes we efforts, worked the sales were ultimately team years, to was strong our XX%. for highest this Our those shortfall. segment, fourth in growth the significant

the of strength, we that we offset experienced higher this Given were to some the unexpected year. partially during able costs

When record out into Our near-term would continues Protassium+ in micronutrients demand anticipate that American was coupled underlying recent reinforced we dynamics upcoming full demand fertilizers soil in all achieve global and our the line to anticipate their be acquisition. I that sales in in our strong, XXXX year deficiencies the more products. nutrient further pricing, in for key for from products product much XXXX. which the gross to steady also share with like and our since for surge pricing customers be confidence positive remains North robust. a to point recent SOP North and able the backdrop harvest to certain have leader need our very markets market America We translates

sales Plant Our South to up Nutrition XX% with American XXXX. the year business revenue for continued full currency, in growth achieve local measured

theme, U.S. our engage effort. in all have the impressed we efforts and optimization on of the am I hurt customers Against the the on XXXX. backdrop challenges even dollar XXXX, weaker agricultural the very recurring has anticipate fundamentals has continue to and we Our side attractive trends currency have in these a been terms. enterprise-wide But more our results our as employees to experienced of in with execute sales faced

to concept now operations a operations, and Utah, Each In comments, to some with from quarters, with compaction our experiencing completely highlight to areas function, project is health in XXXX, extensive a moving commercial, engagement value my category a value department, would with a the We are on harvest As working some five from are team segment salt cross-regional we transactional business procurement. in broad a procurement like these certain focused built and on streams. effort strategic culture. is employee in progress we haul to a together logistics, segment. we the the namely: needs category prior optimization and and excellence organizational procurement mindset facility within Goderich through high-standard I capital. aligned results reminder, through sourcing project global focused implemented through highlighted a this Ogden team and function mines bring In management team I at coming we centralized of referenced that that cross-functional in relevant benefits transformed streams, at our previously focus. our benefits all engagement decentralized and our stakeholders. a making performance-driven Salt early of

new as contractor such equipment year packaging over in and in department executed a During its categories driving much procurement specific structure, initiatives, of raw the XX% this as savings parts. number materials as services, annualized spare XX initial

our to strategy high help margins. this chain expected from In addition of and customers of when expand disruption new degree to a is to and require sustainable our our lasting focus a responsible is chain. savings, risk long provide cost supply supply expected advantage the team This produce and reduce benefits market more procurement

drive attention worked external keep and was to and there safe than of As of no healthy. challenges focus given XXXX, our both we area to over the our internal employees improvements course navigate responsibility more

healthy is As many have employees communicate team one arrived. of number as go priority heard management their they our the as shift a ensuring home end at me as of you our before,

Our been pandemic. to navigate the this critical ability focus on our in zero culture has current harm

For our total change in incident the year, decline or we achieved rate, another step case TCIR.

low for an I average in was at multiyear a the the coming average to X.XX ended achieving of we our XX-month year history the to in with of in our December happy rolling share addition that In X.XX. in lowest the any TCIR month XXXX, and among company, TCIR of am

in our in commitment its operate. highlights As protects continue this safety a success, primary actions to conducting challenge manner mitigate our we health, remains a COVID-XX for contractors leading continuous of responsible communities the to metric of an our that take indicator ongoing all the impacts. to and The operational and pandemic which in we safety security employees, improvement and business

to the our continued efficient perform Yet workforce, resilience this an start advantaged we adversity, our slow excellence markets. and proving our essential our winter through faced procurement with products another global organization. assets to served addition, with as season logistics and in talented operations customers supporting In

currency weak to financial our a and throughout and margin faced. demand to our the both $XX we first efforts weakened impacts, earnings COVID-XX sites Brazilian fourth end including the specifically and We aggressive expectations, weather quarters, While cost winter our preventative were the various forecast within mitigate due markets. year headwinds roughly estimate in reduced both of progressively original a combined at in measures million XXXX higher we that our certain below overall performance negative to impact our in now was external operating

the navigate essential with the year the of us control our our insulate from help focused be to steps impacts take While the we to on are what Again, these acutely we in future. can factors severity of assured, of were allowed out identifying through dedication has resilience to similar past the advantaged effort. serve drive our products, and of our employees the through the of in improvements we markets underlying is effectively our assets which strength the optimization businesses

our company our We team, long-term also at customers continue and have future with with contact communicated strategic of deliver. value be confident maintained excited of can our our and on remained close prospects priorities. previously Compass about course the to I Minerals,

outlook. and will well detail our it quarter as who discuss full results So now more turn in our fourth I XXXX to Jamie year over as will Jamie?

Jamie Standen

and Thanks, morning good everyone. Kevin

sales First, year-over-year income North along coupled than while a volumes improvements. Nutrition winter our lower quick average pricing, our revenue quarter costs as sales SOP results, Plant sales and operating SOP consolidated fourth salt weather late results, highway consolidated lower pressured review gross offset XXXX elevated of with production with deicing declined more both price year-over-year America

earnings year, sales $XX lower as full and more with and income winter in to over due million revenue the operating impact weak $XXX sales were also of impact we million For operating dealt than weather. revenue

by were elevated pricing, We SOP costs had volumes. also year-over-year partially offset which SOP sales and lower stronger SOP

due the million total lower in and the carryover largely quarter segment Salt now were Looking demand effects products XXXX, weather-driven our of inventories. deicing for in sales $XXX.X million, quarter the to of results, $XXX.X from down fourth customer at

event quarter commercial XX% was resulted to to salt decline segment, levels, industrial December with segment quarter Salt weather box consumer slow year-over-year. the Although this fourth This deicing deicing similar sales Total and of high events retailers. December. combined volume of tail impact, to in last customer winter and a sales volumes experienced inventory year’s year’s snow compared at sales XX% Salt of sales XX% had activity winter snow dropped lower the our end most dropped volumes with highway the XXXX. highway, and Within big fourth to been of develop quarter, occurring

slack other than and were most our most food and the unit, products, of rather by In such of water combined lower not attributable conditioning, was Looking business sales end-use to weakness demand. volume by words, at sales deicing agriculture the chemical prices flat as our processing XX% of into non-deicing after $XX.XX to deicing year fourth by at lingering weather primarily due COVID-XX per even prior ton. Highway in account generally were some quarter, demand impacted and taking quarter with versus were the challenges. the year down prior

the consumer and average report I challenging increased helped as by EBITDA Operating our minimal our just on described, cash of lower Salt million versus our Salt segment X% sales industrial all increases average Despite the spending million totaled year compression while the $XX.X last selling our controls offset which deicing offset which we $XX.X higher ton the looking across mostly fourth per totaled pleased quarter fourth quarter Salt EBITDA quarter. margin segment is for in the to priced However, environment at and ended at are stepping $XXX.XX to SG&A, up our the for non-deicing lower in prices $XX.X as groups costs $XX.X compared million this million efforts prior enterprise-wide product quarter. tightened and per price XXXX costs, optimization helped quarter fourth unit to broad-based mix products. for Salt earnings ton, $XX we with segment lower our year, selling When back prices. was the flat

ton a than our is unit year. on per prior basis, about cost $X.XX lower mix-adjusted However,

year-over-year. our North fourth salt and costs a year-over-year absorbed and our costs the year of and able we decline income EBITDA X% volume production in we XX% the decrease Improved for prior helped Salt mix-adjusted quarter So, an XX.X% only American business XXXX versus to still just highway adjusted in logistics year. Salt and sales declining decrease to full X% resulted were adjusted lower unit operating offset revenue in

diligently expansion In efforts revenue XX% adjusted costs ultimately margin aggressively to production, continued margin EBITDA the compared drive Goderich lower. implement organization higher for at we and These initiatives addition contributed of XX.X% the across the XX.X% XX% segment designed same the improved from to year XXXX. mine to to to and driving about last Salt to full operating time and the year nearly to adjusted

worth these creation better business improvements conditions. given While obvious a time, will initiatives drive early see these value It’s backdrop the to the under we pleased segments results. our sustainable real muted noting be are difficult been expected weather in also to bit be over that Salt all and have more to these benefits benefits for continue potential

North XX% selling prior We average XX.X% offset our to $XX.X Turning total revenue to achieved by year by quarter fourth delivering increase a sales in X% million. Nutrition Plant increased the a partially prices. volumes, from segment, sales this America lower

quarters, conditions volumes fourth XXXX As for we season wildfire have the in delayed we discussed of sales in extreme the start quarter. the application SOP fall the timing recent Western U.S. of shifted and as the the expected,

nearly to percentage year increases compared associated and price share results. Utah, to a premium with about the deliver America XX.X% and the pressured XXXX helped full partially quarterly margin offset us points operating by revenue Plant short-term year, resulted weighed million XXXX. unplanned income appropriate and XX% million the volumes, America full Protassium+ and in fourth our about the in earnings in $XX.X maintenance Nutrition Strong quarter year in by North Nutrition were lower EBITDA previously the prior EBITDA. inconsistency, cost improvement cost North turn, $X.X proposition versus value decline short-term our downtime we SOP market year North a declining coupled quarter year SOP sales pressure inventory in XX% continued our full In always full XX quarter-over-quarter. the sales revenue margins in million disclosed a the results, in with fourth decrease adjustment third for These $XX.X related quarter, While Plant EBITDA with our operating prices, operating quarter at and maintain we on product. Nutrition facility to feedstock the to in our significantly for drive costs for Plant which America compressed customers,

in year. we have XX.X% X.X% XX% Nutrition EBITDA full full the would nature, EBITDA versus last margin year is SOP percentages margin the our Plant pressure and a the rebound XXXX. inventory Because year cost have been North inventory XXXX, America expect in sharp compared while adjustment, XX.X% is adjustment margin operating been operating in non-recurring to Excluding in short-term and would

growing both XXXX agriculture trend for XXXX segment increase Strong due prior Nutrition quarter by solutions South was prices full driven in farmers as In for chemical into increases currency. quarter Plant many XXXX both the we products selling earnings fourth impressive volumes year-over-year Even an year, of agro in local XXXX attractive XX% fourth the again, XX% continued XX% agro average well. very currency, as This year and currency. XXXX and XXXX Nutrition Fourth year-over-year economics increased XX% a and XX% full strong business compared EBITDA our our to products, America and volumes. up our was in demand and BXC and finished XX% of and early XX% increased XX% in quarter increase operating along fast a for by drove stronger year Brazilian beginning that quarter South and versus about lockstep all Specialty local unit, revenue full the fourth Plant Our where in America more began the delivered sales sales in Nutrition price revenue when respectively, up revenue to both for full XX% increase nearly with for in Plant was year. and XXXX. moved and local year our ag while

from nearly and Brazilian quarter currency devaluation year that in market it’s full out combination income deterioration weak XXXX gears to million cash margins full our both now adjusted this impacts mitigation again winter hold at generate with important and cash flow. able COVID-XX and operating million. weather, few results, affected operations fourth are spend and year-over-year minutes $XX $XXX we obviously point the While XXXX than our year by XX% like outlook. more costs free impact, shift in million of disappointed would our to a negatively to $XX end and of we on I and XXXX Despite flow were EBITDA flat

can run, through would assumption at that underlying of we of work utilize the consequences annual upcoming multiple how planning our focus the we bring weather the we we through throughout opportunities are control year. weather adjusting and we an bid season. the through the and and challenges dynamically when scenarios plan day, manage or on reminder, our our process, but end of a then other translate what what winter There average As by

America. We particularly and dynamics are capital demand market, monitor specialty product North ready to a fertilizer needs. salt be Should to SOP feel quickly of has high our where and extremely a America that and meet market, dictate can both economic supply our value and adjust approach disciplined spending supply make in response, customers’ those leading market the in to Protassium+ closely decisions our share strongly the we rational still we the North factors in

throughout believe the of XXXX will and to our the various are providing as optimistic long-term sales to efforts of segments these have expectation The line. North we normalized better continue to started our optimization America. register meaningful in on benefits and both agriculture about benefits, and are for while business in specific South operational We we fundamentals bottom initial look from our not even advantages volumes we Salt and our commercial be that expected guidance the efforts

adjusted a about full For consolidated of year million, expecting $XXX XX%. we which the million year-over-year is of between $XXX increase EBITDA and XXXX, are

guidance on at last note prior the has full prices. weather a season XXXX, our year year’s that of is bid midpoint significant like those impacts, of following to in influence as weak reset never almost the immediately selling lower end it’s the always While years’ are winter average important guidance, pricing

Our in capital annual flow XXXX. XXXX levels as to cash free at $XXX approximately well operating plan anticipates as million similar spending

single-digit North to we the and to XXXX high pricing. volume customer increase significant balance given needs South winter Plant volumes continue in the volumes growing a to Nutrition normalizes season Plant for as compared America sales see as Nutrition we ramp in America, and forecasting weather Within segment. our America both our slightly recent monitor expect up we down in are Salt UK are North the and growth We expecting

on through and containment working cost any optimization continue creation effort. will dual focus to we enterprise-wide through headwinds our offset a value XXXX Importantly,

to marked EBITDA it to below progress with debt and also net near-term to XXXX maintaining strong liquidity balance continue expected at but ended In our position external XXXX business challenges While while XXXX globally, our model the little very Xx about not beyond maturities. sheet exercised company, by strategy, withstood our for while in and our flexibility, adjusted a only and worked make debt our our our to to expect year ratio worked plan end is has shareholders. our improving executed factors on continuing been and We summary, X.Xx, very people long-term a we managed control, test. return cash to

to enter to new customers operator we and operations, focused the begin the session. As the remain will optimizing keeping our containing our products safe, the year, I world. that, people With around costs ask Q&A we delivering essential on our Operator? satisfied

Operator

Your question Suisse. you. first from Instructions] Chris with is Credit Thank Parkinson [Operator

Your line is open.

Chris Parkinson

next investors non-recurring. into key ‘XX margin looking as overall Thank several the over case for? mean, are quarters and the we But base be we ‘XX? the the the Great. obviously all of parts of next volumes moving your should kind Plant about pretty Thank I you the what’s be And just clearly did Salt, things very you and much. both what thinking are America, of head were profile there very to long-term a holding over issues couple of margins as North understanding Nutrition are well. in near-term years, Salt segment some as manage but much. you lot how well lower, should

Kevin Crutchfield

think you. we on the in I expanding X.X toward in And talked about last dependent Good less job EBITDA this that bit low-to-mid-XXs question, in to we our a high-XXs, is. side, kind on good thank good Chris. morning, the of a I Salt did the drive selling tons some Look, we’re spite where trying pretty little of past year the think million margins. Hey, market

we’re is mine target of mentioning I worth it’s we add the other but low-to-mid-XXs new time, that, us And subtle that a nice that is thing at over for years. Goderich the next would right So think, area over a it’s building that now. couple

and driving see numbers, we that Now, next through development XX new have you getting that set the years. don’t are for the to entries sections up us XX but

but there that of spite if we’re and in over up really increase margins in the we even of we we up talked do something costs it, don’t those could mine short-term, about the plan this etcetera., answer. because units idea So is George we new reducing the and think with setting that’s I’ve and additional wanted near-term idle right the still to wise do to cost, think them

well – Nutrition then we side, margins I operating nature the on believe snapback of sharp and we temporary a America. in in fourth Nutrition North would Plant sort I in expect that experienced So – we to the return that normalized quarter, is What believe, hand. was Plant in have mean, we and

too; So a I conditions. think you’ll on there margins similar we see nice market snapback and low-to-mid-XXs, dependent would expect kind of

Jamie Standen

And margins. EBITDA

Kevin Crutchfield

sorry. Yes, Yes, EBITDA margins.

Chris Parkinson

very in to thought extreme winter U.S., and never the clearly I And would snowfall quite get conditions are experiencing compliance, frankly. close we helpful. just That’s some so

total the onward discuss more ‘XX I think based benefit of about also your in start you your and on just perhaps there still, the you you American North portfolio about then in ‘XX Thank very the market operations start as the and can own how platforms Avery share closure of Island? and winter in terms have bit well of ambitions UK, much. thinking also as in plays a little the the

Kevin Crutchfield

decade so. questions it’s Okay. really is last good start, the start best a Yes, or the well. Look, to in as there the had probably off good UK thanks,

terms side year It They decided have operating in was X to going last issues close that our given disciplined focused be weather weeks we to mean, and there, doing of of on the a those perspective, late, We the market now if Avery kind to think see, made then of we we market we’ll it be mean, that to was also I ability they be safe. that taking business, how say volumes. great really mine year. underpinnings whether, and of is mean, and on are weather the closure very in back we to conditions right little the changes we’ve business in And those external I I’m margins. If that so it we’ve we start. is to can platform the is conditions I around Island, there of optimize – – doesn’t, confident it right so capable hopefully do share to generate production planned respect these well planned makes respect I that to – share was was weather to it’s a the if with right of hopefully, really and over volumes. little a we things what market market prove But in about the we’ll – our And on want And early. some But to hit I it got price, at early. believe closed look some about long-term. We’ll the then rolling but stay guidance to want late about that our – milder based disciplined a experience and – closed a from this what with grab just So want here or everybody the over occurs. U.S., if world off they there that taking will shares, can still to we got to we’ve it continue be organization. we’ll believe to average this average we was are it would need had then it later sense announced

the are will approximately that newer benefits we X.X a X.X million some that’s million ton So – believe ton, in to of us. void circa marketplace

being – on market X.X the a But that. careful tons taking we million thoughtful should for of good and out be on thing about We’re balance balance, think, us.

Chris Parkinson

Great. very Thank always. you as much,

Kevin Crutchfield

Yes. Chris. you, Thank

Operator

Your next Joel with question is from BMO. Jackson

is line open. Your

Joel Jackson

everyone. Hi, good morning

Kevin Crutchfield

Hey, Joel.

Jamie Standen

Hey, Joel.

Joel Jackson

a February Kevin, Compass in I very XXXX-XXXX guidance ask X Jamie, the I – for given to Minerals want has row honest report. to question. a years want in

make ask The X. in range; earning want of For year, the out Minerals at in you us X have that how the I past, but has has or guidance ask why in by XXXX initial led it’s look the and this poor February guidance in the question confident more quite performance end last is of you the X last to Compass your years of end so describe to below years felt a process you, the number years? not figured delivered, been when to out help can X the what figure guidance low you the X accurate to row,

Kevin Crutchfield

last it spend with at this I I we’re not going I year’s the a still down of But sort season. we’re in look the looking as to hangover past; of look, the forward. am look, lot pricing to to bid trying mean, dealing effect relates guidance, unit time mean, Yes, the from

this we look, strong, outperform that weather, got be on guidance experience I let’s look, feel something absolutely of got stays season that it. and just hitting to we’ve work now was we’ve able And, but, this could strong, But level, I once of experience winter So some average off we it’s between hopefully that average season. that too I that an lay the if good I was the end upcoming weather, have will we deliver tees up we believe, high and finish If about here. it. to outlined if really think bid upside interesting that out believe confidence part we actually the winter thinking the to

weather, if anything think think are I business and able conditions XX of see yet benefits the from you’ll execution of tested the gone past. be of in in the the is will cooperate, look, enterprise-wide upside work this that’s all results the I to posted Again, mostly a haven’t what over but that’s standpoint, day, optimization, the of So I potential you unlike been takes set that an last Joel. we months think of see platform the end terms at it in the

Joel Jackson

Okay.

in cost the sensitivity Second be, like something for numbers, change Compass $X.XX that Brent. last $XX ton or of some per per we so, question to talked $X having know freight would we’ve seen for a decade about Salt –

price Now, mitigate? a what drag was and What these bids the you it Can diesel, gasoline, these you Thanks. all oil us offsets all since is summer, got sense to costs? spring – in we’ve you were freight guidance higher of and help in QX give in any all assigned seen rise. XXXX awards from the and

Jamie Standen

sure. Yes,

take me Kevin. that Yes. Let one,

a that about be $X.XX So exists. it It’s to range – still can $X.

Brent to I course. we around depends as for obviously, of for plan, $XX. ton right, our by it $X.XX $XX right were When think $X of it I around per – a crude. When we and, more of XXXX set today it’s think Brent every mode, $XX looked and we at

continue handling quarter, deicing So middle-single-digit That’s back the blended what be the is, But sales it basis because If you shipping just based normal look lower we and XXXX, weather there is like that really fuel-related. – up would on first there. oil think, of I salt mix-driven. But – have half, some volumes, expect down in we in incremental year-over-year. we to in and when highway said pressure I in and a some year-over-year you’re so to be could ends really half see where pressure of we distribution pressure we’ll on see actually at see the freight cost that going the back to and Salt. certainly

really back the cost talked in and our in really there we muted good lot to seeing fourth and half of relates XXXX. how it the little did good internally We we it did As logistics about fuel our that prepared a job our distribution of a through opportunities optimized that quarter, network, the bit remarks, in a we were we increases value-add team.

half the be first quarter back lower mid-single-digit looking probably pressure some could said, in and in I as there freight. XXXX year-over-year So,

Joel Jackson

you. Thank

Operator

from question next with Your is Stephens. Connelly Mark

open. is line Your

Mark Connelly

we start if But If would you’re questions. SOP that improvements the looks the you Two it harvesting like I in talked that, Thanks. business. now down lower that expecting said and could about, on with volumes. cost you – improve take yield

volumes, we that financial to the proceed change? deferred if expect on And based should lower volume? going you’re of lower with so the still that be my or is, benefits reduced question will expecting And you those changes are either

Kevin Crutchfield

really the year. I check. wildfires that deliver a incurred on our harvest No, We think, benefit. compressed the cost the to that customers’ harvest sales really kind quarter, for needs. look, we and process and pockets our we what season I year Mark, in had fourth happened emptied We’ll the delayed have last in of is mean, full But a of full

things through out the that said So well the inconsistencies through the feedstock a we create experienced you think year, see would have across that quickly prepared pretty we testing year. that to Jamie remarks last cost. And there like and we harvest I blending plant. uniform said pond And, flow expect in – hand absolutely think this for will to that snap on back that we in the the the see and more I

Mark Connelly

one went that you then CMs the second Goderich, And Okay. when other you in X bring just XX original for down but more, my into parts example. from mine it XXs X we got the service X plan, changed to was understanding at of have now development,

what’s the now through us from second got service be here XX walk where? you happens going that what you’ve in can and So running to

Kevin Crutchfield

Yes.

a the to old here connect moved on got. a of XX off new got here roadways goal part over That can. soon new to the terms this development in X but the George’s the XX we the as me, unit to got is mine mine’s to XXs the these via up than XX we – We say even of first we second the XX that’s running. the when to shaft had reasonably wrong I time first beefier and correct and work which So, second development XX if a the we in, we freed something roadways on as simple new in,

production have this. Fair? mine near still four we So

George Schuller

run to – to lot additional Kevin those bit to some it a see with We run add and flex is. in that a and kept preventive allow well. optimization SVTs we behind the and you the that’s upside does productivity, we’ll comment, increased XXXX units It just throughout do of maintenance as seeing X XXXX as X us little said, and

Kevin Crutchfield

George. Thanks,

Mark Connelly

or small? rig into million going expect we $XX should come to are in when to another So just to stick and we

Kevin Crutchfield

a working still through are moving we There is lot that. up Look, parts of there.

really because the to production this final ought now. under to right outside, these – fleet it’s see trying mine from roadways get even developing developed developed also it rooms and focus these and like, but focused some time. new won’t – before, take I’ve as said and We’re start equally look plan new then new on that’s well on But getting what that’s going hopefully you journey a in, we’re the looking to

scenario production working approach X you on conditions of have fleet what the ultimate kind based more of still and to run X hard Could dependent like. be So, look what or on weather the all them through may might create favorable-type just you demand like. looks XX’s a

George Schuller

in just useful We life too couple are getting ago. these years capital still have of some XXs investment we and

in still to those utilize and machines it we we want to have the with XX. fullest life So some we them replace before left

Mark Connelly

Thank helpful. you. Very Understood.

Kevin Crutchfield

Thanks Mark.

Operator

Stifel. with Anderson Vincent from is question next Your

is line Your open.

Vincent Anderson

Yes. Thank you.

volumes, had winter taking XXXX from the incremental any going volume next until normal anticipated is year’s recently in inventory assuming an pressure is bid So kind could have related what guidance customers or price winter to but of some been it that assume to maximums? for Salt, hangover milder season so guidance it’s to led a

Jamie Standen

So, as do, always we assume always we average.

planning XXXX process as we as So would assumptions. have weather make this we average year we in last start annual late our winter year,

our So, season, winter bid price the on season. full our comment that’s that move guidance into but how all We and then won’t average in, specifically the think assuming in flow is for the we expectation might of baked would season through Vincent. what bid

Vincent Anderson

risk year-to-date, be a that half say a bit clarify to taking then impacting under second greater maybe – your guess, lower little seen maximums just a I their that customers further, based you contract we’ve And of or what the outlook? would risk would Okay. on higher volumes just

Jamie Standen

that on I get in weather activity, area. has terms strong would – of average season-to-date back what say we’re obviously, late, aligned that pretty activity It seen we’ve us to really feels to which weather helped year-to well on some basis as with, of a a year-to-date with pretty based activity that. on

when year-to different were significantly what as be planning area that we landed to our kind season-to-date. than – it thought of doing expect wouldn’t now I in So we’ve we earlier average

Kevin Crutchfield

last a but okay, And is Yes, couple it’s of too next like, been we like. the sure, weeks for lot what it, – Vincent, for tough of – look Yes. X-week the what does

one the other. will what next that’s tee think I or season way up the

far brought So have [indiscernible] the on. been fields

continues be to hopefully he So right.

Vincent Anderson

Fair enough.

last Just following season. bid Island, that were clear, Avery market point clarification they on to in the be for of the

season? And so year’s until really not up outage this accelerated not bid this would showing be

Kevin Crutchfield

right. that’s Yes,

Vincent Anderson

could in last you of high mind expectations do gets a the I a had through to versus alright. of Okay, low If what end American North harvest in Micronutrients year. row seem fourth You you almond year. good the good agriculture? crop end of longer the S&P sneak then, came the just also quarter, walking have us set little didn’t bit pricing one the a a in But there. down fully during to up participate at

perspective? scenario a be you bridging That So, spend XXXX from maybe would minute could a to if XXXX helpful.

Brad Griffith

Griffith. Yes, Hey, sure. Brad Vincent,

what continued his seeing X comments, economics – for we’re had we terms record like not – stemming seasons Vincent, California and months both the Jamie mentioned quarter and as first the into activity spring and the end guidance had in full in into in a of XXXX our said Kevin driven in quarter. as his the application that so for average XQ, range wildfires, fall. think, crop SOP will we X the we’re in factor fourth and significant quite I comments, things by see very light use from

in months. rates certainly were appreciation they would price versus see our higher look costs well freight some coming that what at favor, year, feedstock as Mannheim producers, about to think in as last I for Xx import sulfuric and we same time we the acid expect when are now MOP

we in while our of ability Ogden, all to from take to we pond-based expected ramp confident when demand, it see market that and in our and typically capturing every production with we that in remain couple so ton. simultaneously that And value hit serve what the our

economics, producers think our we continue come And of terms use evolve to will end what vaccinated. to crop becomes likely they a dramatically. seasons from see improve and are Really Exports application I world on bit range. is are as to that delta today. end how the that the use of course, which that, of respond in down more So to help customers where

Vincent Anderson

all That’s from you. me. Thank Alright.

Operator

next question Bank. from Deutsche with is David Our Instructions] Begleiter [Operator

Your open. line is

David Begleiter

Thank you. Question more said you Good for Jamie on free flow be maybe morning. it will similar cash to XXXX.

million at year-over-year about up are CapEx that delta only the million. at midpoint $XX analysis? EBITDA looking up $XX and in We What’s the about

Jamie Standen

around $XX million be will million. $XX interest and Cash to be cash $XX about $XX of capital taxes million working kind will million

that that – got capital that’s of is. the We��ve where of kind build a is there. half About of that’s So sold. bit a working

quarter As the of relative receivables. strong, you then salt and call inventories the SOP XXXX, bit volumes, little full significant our There inventory amount versus year a up fourth increase is we generate guidance it, look on of side would at of are year. let’s the a our taking toward on end the

$XX that’s receivables. in couple about So of – increase million a

breakdown the capital that of that’s So increase. working

David Begleiter

in Thank your production Goderich, in be to and Kevin, XXXX just them you. And what were what expect volumes you XXXX? on

Kevin Crutchfield

a I’ve place, it out like capability out But demand. before it market said expect the and talk we to really extent to volumes that year-over-year will don’t – about a We volumes. many of of runs anticipated reach the to were grow They runs was there specifically times the continue I will where XX%, XX% as up point just market Goderich think we based what before, Goderich see wants. nature balance handle extraordinary power them. what the the there. there But have Goderich. we to got function too at potential and gear relationship of the the And a still in is lot will our with up the greatly improved market pent-up of we’ll the – workforce of do we’ve a what There that’s market deposit, on everything within supply the

David Begleiter

you. Thank

Kevin Crutchfield

you. Thank

Operator

remarks. There are turn the this call no presenters further closing back time. to for I questions at

Kevin Crutchfield

day. today. for Have let great know. We any interest follow-ups, appreciate and in everybody just us the tuning a Thanks, everybody. Thanks

Operator

today’s concludes call. This conference

You may disconnect. now