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Compass Minerals International (CMP)

Participants
Douglas Kris Senior Director, IR
Kevin Crutchfield President and CEO
Jamie Standen CFO
Brad Griffith Chief Commercial Officer
George Schuller Chief Operations Officer
Vincent Anderson Stifel
Seth Goldstein Morningstar
Joel Jackson BMO Capital Markets
Mark Connelly Stephens
David Silver CL King
Chris Shaw Monness, Crespi
Call transcript
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Operator

Welcome to the Compass Minerals First Quarter 2021 Earnings Conference Call.

Your host Douglas Kris, Senior Director of Investor Relations.

Douglas Kris

Good morning and welcome to the Compass Mineral’s First Quarter 2021 Earnings Conference Call. Today, we discuss our recent results and our outlook for the balance of 2021.

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

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

be the these involve our actual online materially. get in made with today’s operational the found date, we started, Company’s XXXX. will results results uncertainties of everyone Before A the These that X, expectations cause I outlooks as differ today and filings discussion of view located that represent can May financial risks of and to our remind SEC remarks investors.compassminerals.com. could at

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

approved presented. the and our call level of operations call The which You the presentation, divestiture South Company’s items Nutrition businesses both in reported America. turn strategy. can in previously a to of online. business, Salt and these issued are America’s results our optimization segments, its release presented business asset known the are which of this of otherwise Directors for Collectively, Plant in was as available these also the and over North Company part continuing release, in will two unless Company’s the consolidated as now and the results find the presented Plant operations of all of XXXX, of on discontinued broader have operations during I In as the our American reconciliations micronutrient earnings North March, yesterday periods earnings The of reflect Nutrition, continuing noted. businesses Board Kevin.

Kevin Crutchfield

first the quarter taking Thanks our and XXXX join Thank good you, Doug, everyone. to for morning, earnings call. time

their this across rest will in operational incident reach footprint. I our at in for themselves case average our whether they leading we not I’m but thank operating a some important. a until coming a deeply that the a another on we or I to success, we numerous a the want performance decline overview progress corporate change TCIR this And first support of talk company plants made our I’m total to focus be. milestone rolling and it’s the goal our our color and our meaningful achieved be in just personally offices, the at With keeping we to harm new about quarter, ultimate XX-month X.XX. report team quarter that When on to our previously one an zero do with indicator year. reflection quarter our safety is for TCIR our of their team who more past coworkers we for for achieved of continued multiyear pleased a processing nothing of priorities, we low strive safety results Before executing another operational in area, strategic highlight of first as make our by in progress our mind, a recent we’ve role to underground step financial of or communicated in number team rate continues of entire at and providing this who of as safe, want proud while operating on our not operational are sharing we

these in afternoon, Salt results as for yesterday primarily strategies enabled our lower in the about as As our are a quarter within segment. has working. segment, first operating And XXXX, the of results, segment volumes indication we a our a than per by compared published of operating been in per price enterprise-wide leverage. in within just earnings I clear ton in our expansion progress to year-over-year believe term reflected firmly improvement in financial XXXX. despite that our they’re five-year release Salt were more well or quarter lows also first margin increase overall a achieved measured the earnings This average cost also optimization price meaningful

approximately As adjusted and increased quarter we operating look when EBITDA to approximately by at the XX% first compared first by earnings a XXXX consolidated quarter XX% results. on basis, increased

generate In addition, for totaling positive we cash quarter. million continued flow to the strong $XXX approximately operations, from

our We also continued with first $XX in that the to actively spend coming for manage plan, capital approximately million quarter. at

segment. Salt our on Focusing

First approximate an which first quarter XXXX. operating was earnings grew quarter increase to versus $XX XX% million,

percentage and XX% Goderich average X% improving Salt steadily $XX a times grew million, X% our drumbeat levels. first to despite reduction versus quarter of communicate increased for you points EBITDA number before the our X first pricing a the addition, at XX%, margins while with production approximately EBITDA XXXX again quarter XXXX mine In that’s approximately in our to tons to increased me production metrics highlighted These to performance regard compared Goderich. At specifically, levels. heard quarter,

potential. made the have that reached While full been still last few we over great yet strides our quarters, have not I feel

much in touch impacts the five-year we at value at improved quarter, Goderich I’d remiss segment union mine. I’m workforce the of also the the tail in historic and future agreement to didn’t February. many the the weather of the you end of with the severe winter I personally briefly I the with quarter have Before, the remain We representative at winter bargaining talented blanketed optimistic mention I broader upon that partnership U.S. mine. the of if we sure finalized our weather collective up forced Goderich, be experienced our about flagship

meaningful our representative activity spot snow estimate of average As volumes. $XX months was America million. below earnings mild sales in throughout UK the we March the One not report, Salt contribution unusually storm February being the was falling to XX discussed total, XX-year events season robust of U.S. published a bright winter contrasting rule million facilitated XXXX-XXXX of actually helps resulting previously U.S. the exception, a strong a XXXX, to data and approximately Salt to snow the $XX season, weak. in the impact for the winter our UK the season cities in North winter operating however, our drive and sales track in from first In February the three winter with volumes which positive

quarter the of being storms at bid would That the February U.S., did than the levels, should we’re season. process, be and in during in or tons some last products average deicing a well XX% the would second of season we’ve as customer and call. had more C&I we upcoming Given Winter which in sold bid still also color quarter provide the impact severity done innings for the weather on approximately positive year. the our incremental said, packaged in to comparable inventory industrial consumer our anticipate bode We historically the of business. we this quarter early to we quarter able expect

improvement where in seasonality from saw also one we a C&I perspective, optimization aligns non-deicing with impacts which of our can. We pricing to smooth goals enterprise-wide

primarily financial to starting operations forward. But in our segment, I want Jamie key made reemphasize our into during change segment will comments. for Protassium+. is Plant which to continuing SOP mechanics go his business, as Nutrition we’ll that the shift segment we’ve we more Nutrition detail a on this we market As the how first Plant in takeaway the on this the focused that going is report quarter,

both, our reported selling of line X% for quarter, expectations, decline which an in volume that first price. approximate sales relatively revenue the we reflecting million, business $XX For and with was in

this for XX%, the to in of quarter issues continued EBITDA address at quarter XXXX. experienced to Our fell implement the in our to quality margin segment Ogden process fourth we the as feedstock improvements we operations

these changes but progress, measured over next will believe making the quarters. few We’re take hold

to team with that of some our margin per a pleased structure. We’re of success logistics through in offset unit improvement by decline the expense the portion

California monitoring We’re demand. seen could costs substantially, potentially impact actively drought and water increased which conditions there also the have ongoing in near-term

asset core enabling position valuations But Compass and focus asset, Such us sheet. sweat an committed past equity. employees, to and best simultaneously investments based order Company it time footprint, behind are area of fertilizer our lower competencies our right senior for the strong often we clear improving has of delevering that of the to to to management continue on Minerals became Salt deep to index our quarterly internal strategic heard from never too every balance for in For our capital number our future taken years ultimately success. path you’ve on of easy, actions experience MOP, a demand drought a team commitment however, our a product, speak a on conduct tolerance. than Board of also me hone assessment, execute operations operational The our Protassium+ operational aggressive which and being, our our key there year-to-date talented our and our and business, We’ve are these while focus core on optimization updates for forward been customers of from assessment priorities. provides required teams

finalize agricultural for of pleased Plant executed EBITDA. or As announced, that to closely for previously we the purchase ICL, million business roughly appreciate of to ICL who and early we’re the From the provides could quarter our great XXXX. on for fit working business perspective, America portion agreement a in of we’re to find South a track we In XXXX and close team. who the potential buyer our operations with X.XX in timing Nutrition adjusted a ICL March a transaction those to remain with third $XXX South times sale American

American to chemical details we we and addition, something pursue In sale report. business to expected look around South have forward as of that announcing our transaction continue soon as to a

navigate worked maximize has a operations while efficiencies I’d challenging on, business call a American all through in extremely for strong moving quick service we few our customers. who’ve level maintain continue South the Brazil, having of to this throughout appreciate Before to our like processes our to to And they’ve sale out group our Company. over contributed to team grown the and give down to last successfully diligently an environment. This years of

our to definitive We considered for our well-suited want employees assets a our sale North the product. also broader $XX where its Protassium+ micronutrient the be focus segment a of marketing we assets our leading optimization current allowing SOP also moment take Koch’s thank to strategy, I certain recently core. Nutrition to assets did within announced asset not efforts our agreement are envision Koch to portfolio with will while former Plant and over These businesses million. Brazil, We a future Services to these exposure profitability productive Agronomic Aligned which for on our American business Company. approximately the company on develop for broader actions divesting state America would allow and feel By on strengthening salt the be whose our been foreign the to has the we in time. feel we market-leading for assets, financial years. and North Company. UK these a derisk assets drag currency these transformational our addition position complementary while last Collectively, few those of to us contributions to innovative focus micronutrient talent eliminating a expect helped business transactions

opportunities to our energy milestones positioning and to our asset to leverage, proceeds organic navigate Company’s ability both and should financial be our the the reshape expertise agile equity value. their if required expect and us our ultimately alignment with support landscape of Company, improvement a significant these and and increase not our we only they shareholder great to financial give when resiliency reduce to this to they has with bring arise possess from to continue sustainable a within use employees’ to as our recap, Importantly, transactions demonstrate operational for also and accomplish for me core evaluation. changing the unique and To of the to strengthen enable meaningful the inorganic us engagement our deliver I stay impressed our plan to of This advantages confidence primarily change, been achieving we strategic efforts but these flexibility well by Company. goals. to quarter base transactions enhance and coupled and through in ongoing number flexibility, the

first discuss Now, as as in with more that, I’ll well outlook. our detail who Jamie? will rest-of-year our Jamie over quarter to turn it

Jamie Standen

and performance comments our some on segment-specific year. before good our then Kevin, consolidated I’ll remainder of to the discussing results for morning, and our the everyone. with move Thanks, outlook on start

American $XX.X the to the volume quarter when our more we into grew to compared Consolidated decrease prior continuing release XXXX, in bucket. offset On year-over-year today our to with our consolidated growth than adjusted XX% Doug XXXX. are sales volumes sales falling while South EBITDA XX% on grew businesses we’re Plant the in slight year and for American first a in segment operating As earnings approximately results North the and all otherwise operations million, the discussing prior noted, micronutrient compared Nutrition reported year Salt consolidated earnings this basis, to basis, results. discontinued a morning, unless our operations as compared of almost highlighted

saw margins nearly we period, same XXX grow the operating Over to basis points XX%.

We flow of operations and $XXX last in nearly the cash flow cash of to million period also free $XXX free year. generated during flow. This same cash million about from million compares $XXX

However, total an included one-time last million year’s tax $XX refund. approximately

cash our year-over-year. flow Excluding is about free consolidated XX% that refund, up

This translated segment were over at $XXX the that during in our Salt Looking increase UK stronger along million first weather our versus February the of to winter year. quarter we some late largely into bookings was season, demand results. December now snow Total winter carried from XXXX, incremental in events due severe the weather-driven improvement of prior Salt strong million, sales The up volumes XXXX, experienced with products. the with the deicing approximately XX%. $XXX in paired from quarter stronger sales U.S. an from for

a quarter average. As the were events first X% snow reminder, below XXXX XX-year

we we sell weather within the and directional deicing While North provide a in vary related significantly market, regions deicing American obviously regions. and our many throughout activity weather data can products market, snow demand of to indication this those event winter as

earnings quarter winter our quarter, the $XX of million first This our that, a we of XXXX. estimated revenue broader the of of statistics, $XX an weather on weather $XX to million, impact because positive book to and business million million impact had outperformed $XX positive operating sales for and

down the prior which per the versus from previous were the ton, year’s quarter prices X% bid year dicing drag highway season. $XX expected, at As reflects

average $XX.X However, while both, year segment quarter selling mix the industrial Operating deicing as earnings packaged year, $XXX.XX across million $XX.X and X% million million sales. the prior to product ton deicing non-deicing $XX.X product consumer prices EBITDA as first to increases versus $XX.X due the a in segment after increased groups, broad-based per and of totaled well Salt price million to the for last Salt totaled for compared quarter. stronger

report quarter prices production strong to a to mostly Salt our shift to than Winsford sales our for of our and to expansion pleased operating metrics XXX the margin quarter. lower average both highway at year-over-year deicing and points the and are segment Goderich combination these of higher basis mine. our UK mix both We XXXX, offset compared EBITDA levels of The mine more factors selling due for in approximately first

cost Looking first costs, our operating at quarter versus Salt first the Salt is we delivered lowest at improvement first per-unit XXXX. since XX% unit quarter XXXX, which performance quarter

these mentioned in selling Salt offset I As prices. previously, costs unit helped average lower year-over-year first quarter the decline

addition, higher the costs highway year-over-year shipping which the and for In unit consumer business logistics offset quarter, lower delivered costs. our in more than industrial segment

our drive initiatives implement lower across organization, revenue We designed continue efforts. cost higher to part to as of the and optimization enterprise-wide

in initiatives and individual meaningful standalone to improvements many and starting revenue are a really these into small are aggregate of costs. they basis, projects While on lower

quarter since they’re represents first EBITDA which quarter margin XXXX. highest contributing our this the addition, at XX% expansion, result also to In

year, to and lower $X.X Turning quarter a to This for the X% the million $X.X lower to with EBITDA an quarter, first XXXX. prior compared price from a our XXXX ton selling X.X compared margins some last and X% sales the XX.X% in compared price earnings volumes our we average while to the in Plant have EBITDA million X.X% about to was points first see $XX.X prior to per both, during delivered landing down compressed strong Nutrition year our segment X% that revenue continued was average operating and were of million. reduction With at million prices down earnings It’s we to improvement year. quarter. operating our quarter, quarter quarter. reflects margins to first XXXX, percentage first Nutrition $X.X for $XXX this Protassium+ compression down versus compared worth demand sequential at noting fourth to million, $XX.X selling the Plant had also XX.X%

offset Although average unit lower of per prices proportion only per costs. direct driving the partially and costs, customer selling we shipments, logistics that experienced higher unit to a favorable operating higher

through quarter, our impacting to in from on the year-to-year, do work we experience harvest we summer evaporation variations harvest rates. quality our During suboptimal Historically, our the season. prior first continued depending production quality pond SOP

Our rich minerals, on current material potassium been the short-term in as Plant is isn’t during which harvest years, putting several it segment. as some Nutrition pressure our has last cost

input segment the where into material harvest as improves, raw of But our cost optimize MOP the to all fall. this an harvest material on pressure and needed. utilize this put transition quality until continue expected We sorting is we to the when XXXX-XXXX modest feedstock

like divestiture on the would announcements. touch recent I to our impact Now, of

have results. a We and sell to our that operations North the strategic represents South determined decision has that businesses shift effect American on major a American our Company’s micronutrient financial and

will and salt core our We now instead focus portfolio. potassium on mineral

classified assets sheets. these on result, a held As consolidated of have and the businesses as sale for we balance liabilities these

as Again, Additionally, decision are as our accelerate focus businesses. on core these these remarks, in Kevin and allows operations exit to reported discontinued being our to his businesses income us strategic our this reduction goal leverage during businesses mentioned consolidated statements.

are two renamed XXXX on operations segments, operations second operating expenditure reported spend continuing at quarter guidance corporate in segment. corporate a providing on minutes results and Nutrition we EBITDA and outlook. pro level full-year Now, now guidance and level adjusted Plant Salt basis, a Again, on our a our are which rest-of-year forma the I’ll consolidated continuing The newly the from discontinued Company and excludes operations. few our

move we quarter this business Given the through optimization year. optimistic continued of first enterprise-wide as benefits XXXX about from performance we’re our and quarter efforts, second

$XXX, million. million revenue second of EBITDA and to Salt $XXX of segment expect $XX million to quarter We $XX

guidance year. Salt increased XXX,XXX the our the tons, about year quarter also midpoint by this segment strong we volumes volume We delivered during sales due sales full to first have

we Plant monitor We’re on the the drought situation for in Nutrition as our to cautiously optimistic segment, continue market outlook California.

for drought of we sales While of the strong year, SOP some to continuation volume expect our back products demand pressure this the half a in put continue could business. the on

expect XXXX. EBITDA million unit million our of move full outlook also segment year modestly $XXX The EBITDA quarter consolidated compares into we us segment We per This guidance prior move allowed that to see $XXX until $XXX XXXX. adjusted our combined the for impact for of has to adjusted fourth to upward our million to $XXX operating costs of elevated million. to the pro guidance to forma continue to

Now, our a few as corporate year debt the third estimate we levels interest We’ve expense reduced million, for lower $XX expect items. million significantly the to beginning in to quarter. $XX

capital has to slightly forecast Our range. lower $XXX spending revised also $XX million to million been

for times continue year our be discontinued in expect debt $XX about our XXXX. full flow in ratio X.XX year. the debt we our leverage start end both, we at with extremely expect pleased We be are EBITDA to cash X the to we the the to to strategic of and summary, to made after have operations, at to EBITDA finally, levels XXXX. or adjusting million net progress In And area

the I’ll value-creating Our the be our to continues Operator? that, collective time, people to ask revenue execute across session. With organization. and while same priority, at Q&A their optimization the we the operator safety begin initiatives and top

Operator

Anderson comes Instructions] with first Vincent Stifel. [Operator question Our you. from Thank

Your open. is line

Vincent Anderson

the CBA up and morning on Goderich. congratulations Good in Yes.

your business, have quality aside, to brine SOP we about unit about would of that be costs how cost unit the willing thinking targeted a clear issues you on Now in there? talk levels kind you’re view

Kevin Crutchfield

little of a can we bit think, rest year. this give guidance of the for I you

But they ton probably that ton. start in down a this a you $XX of it’s said, you of the the in two, business. year-over-year when up a range. business, into extracted $XXX as quarter $XX it’ll a And so the back be probably half year, elevated to to bit, sequentially, back we see come micronutrients go having like So, would bit comparisons the

Vincent Anderson

with kind sticking just of ag. then, And Okay.

Board, SOP to current I there, portfolio had that with offerings. collaboration up and You’ve through just begun Amy fairly was or by well I with seem align on any their a pretty extension Is would Anuvia. business? long your now plan relationship they’ve assume there organic your thinking that Yoder really future scaling

Kevin Crutchfield

on we’d think commenting have I any that, Vincent. don’t

Vincent Anderson

know thinking finishing fair. most very just And good. to least the then, is That’s I Goderich Sure. up. but, of little I back kind future the guess, early, the it’s are to at of planned a here, divestments

competencies of for As off Compass, consider kind you if about the that would view think core what’s future. next you talk your maybe about I’m as production could of your thinking assets unique, in you your leverage. of there highlight your you’d like depot municipal experience, future but leverage salt brine-based network familiarity with are process, terms the for points growth to bidding quite just areas in building material anything want

Kevin Crutchfield

kind in doing years, direction. say, rolling question. which is Yes. great while And just it’s potential back we there of heading track. it’s think, first ton was That’s is I of extra after a guess, us. a still couple back it. a George Again, the say, right it’s comment up on couple I get priority -- believe I’d better sort, excite there, what the sitting he a the on lot continues years, we and of of a to But, a can to clock Goderich better safe

performance the full potential. I do board make the we’re the optimization sort third future. in that sure And that they’re the to second think sort assets, we then, of of our purpose that then, versus to that And and along will was obviously on decision. to made core with there prove we’ve enterprise-wide And, that And assess And took. come was will that delevering. of to continue all we the of at The put approach their was priority performing continuing non-core. a runs priority

think a of Vince. kind us clear I gives path, that So,

where, to where in cetera. around point’s our one. officially a mining, I one competencies, we we two have around a factor start then, have that act moving So, we here. we -- kind depot around, cetera. would logistics et think materials that’s act network And the from go of But brine-based it’s the that And also the both good to whether your of businesses, is competency extracting is work, et about that that how say

So, starting regard. just of expect of kind from quarters, we’re the us over next think And back hear of the something into I roll you that. that can to course couple in to

Operator

comes Goldstein question Morningstar. next of Seth from Our

open. Your line is

Seth Goldstein

good Thanks morning. future can maybe in get? Kevin, low question. Salt the point. the you costs for think how this become you mentioned remarks, Hi, prepared your that here they you from and trajectory do lower also think What’s

Kevin Crutchfield

Yes. Look, I don’t EBITDA want to throw run to to out a to segment specific it trying that number. try to What percent we’ve mid-XXs this move been talking into about is Salt the low-XXs margin. --

what So, function, the happening that’s that behind costs just too And segment invisible Goderich. of they’re say occurring Salt keep decreasing, in about what’s a scenes marketplace. effectively of is both mine to but is, new I’d thus But, building the kind external world. the in at costs and a far look, mind we’re

wanted cease is that to roadways of XX are we into So, because that viable step and long-term that’ll building these take we out to in wise if cost, which this for think think years. we lot could costs standing reduction investment we and function we’re costs. XX a development development blended don’t We a tomorrow a that’s be got new see you

based -- this going of this as to three continue cost itself which move function the new mine of So, it time years, I we into mine will forward, step sustain to three on at plan. next the think, five with see you’ll passage to kind reductions new point really way designed we’ve plan, and the over

Operator

question from Our Jackson comes with BMO Capital next Markets. Joel

open. is line Your

Joel Jackson

good a morning. I’ll one one. questions, Hi, of ask couple by

to And to despite earning deal down year, lot more You corporate this sale? earning pretty why asset sold Can to a scale costs corporate about off large are -- lower? you mean that what the talk does one go. of your costs elastic,

Kevin Crutchfield

Yes.

related the assets. they So, of to acquisition those particularly not were

have costs, operating public in number We just company here of a fixed North America. a being

costs. at businesses as So, see sure required constantly immediate the as those business given appropriate needed, going corporate and we’ll make we’re level our not diligent impact. set And looking divested, our we as you’re any be But now that portfolio. to overall amount, are of

Joel Jackson

that to I average Kevin, level. a about below are follow think on comment. that up you rock channel salt I -- you lower, talked want inventories think I said

it I in the think you call. said

was mean, I obviously it March was and a a average milder, winter, bit quite So, little below light.

totality I rock So of a imagine salt low low. a And of rock consumption record in is year, QX. end of QXvolumes salt you the had -- salt after

So, some shipments like QX, to obviously that lead inventories to it which deferred all that outside from would high. seem being would the channel

maybe the and always have So, to your your on get sort And you get inventory people points, that. assumption can you some levels? actually of when of data you data points in field comment that. you’re selling What are these

Kevin Crutchfield

into just a X.X base so of that for able tons salt of the And volumes cases more basic move lot a demand places what the again, data in Joel. other And I’d to lot Good question, happened places. scenario commitments. of and is we production sort in Yes. I needed both think a lot XX that, whole of it commitments mean, say I their salt report those on those a side cities. other million nearly up of sell flex and the to are side some and logistics XXX% being their to XXX% quarter-over-quarter. those, We

of is made consider void in we a we coupled actually activity to has I But, of with the that’s really marketplace too -- down That’s have So And saw in void pretty here one, marketplace. X I some that in created it think you the that really, big we’ve in to the in to April. here tons. fashion. that March the changes But X think pretty able what the deeply. testament mild, be took and million Avery look, considered is that a was to plumbing but again snow small was number everybody that pretty, respond other think to February factor million a Island circa sort

so think in. bid so much, like of prepared out said, approximately the we And beyond sets And up only feels far too thus good. we’re in not in. don’t season. XX% we’d remarks say a But XX% seeing we the that of disciplined far, or So, all I anything constructive for, only we’re have pretty and that, It’s think that to ordinary. we’re given

Joel Jackson

I did on think are up. costs season, If follow-up freight a When you that. could ask of

So, salt delivered price. there’s on probably upward pressure

of strength on channel So, pressure gross the even because of there’s knowing costs. delivered upward inventory, some probably the prices freight

trying how this netbacks be? this freight So, year costs should will coming, and higher to the the that’s or sensitivity play the want [ph] you then does actual probably to case, be do if out where what figure be out

Kevin Crutchfield

maybe let the actual I’ll comment Jamie sale. to cost freight on

harder makes phenomena, time well on our on That’s say other will seaborne, in as because it’s businesses for our is, to is it won’t from going news little The and not freight. added up we time in general from as we them Freight us, including good a not here have the makes U.S. only continue even probably it is importers. perspective got too, see to, challenging for you’ve which that it to because in them. more

deliver the possible at approach I’ll and portfolio and can of assets again, answer is lowest price optimization this the possible. to generate our the we highest just margin with So, how way we looking at

Jamie if Brad, know, don’t materials. on come want rates in you and to I So,

Jamie Standen

rate level at second into comment, you elevated freight high mix. could think, a oil when the just as make look we see inflation, inflation, we’re I’ll certainly you add. sales I quarter, to prices Brad going and rates go and But,

in. we do we bid year, higher this you to our build little in rest see year. last can rates expect second talk versus to but for of expect those year mix we C&I quarter that? a as the higher about to see the want go Brad, to a the bit season, of And then, We

Brad Griffith

said, what sizes be at That’s good Those to said, tender look add season. we’re have discipline largely I Kevin would market. No. right. at tender fall, just And and the as a are first through XX% and there as to we Jamie the expected. you in Kevin what Joel, only logical you the look sizes, proxies, appears

though, bulk dramatically have rates alluded same has year. to Kevin time freight versus last As changed

week last September across its level XXXX all to sea vessel the really main aware, since freight probably As Exchange’s segments. of highest you’re gained strengthened as demand index Baltic

snap of on supply trying So, economies putting that’s back, the chains strain a are and world around to rates.

question this expect a freight see importers both, deicing year market do Vincent’s earlier, we salt, for to and and firm for to rock SOP. So,

Operator

with comes Stephens. question Mark from next Connelly Our

line Your open. is

Mark Connelly

There’s Thanks. imports. lot salt has out supply some geography. imported you’ve eliminated target Avery there. of Kevin, taken your salt coming your still into a

you your presumably geography? too. geographic your mostly growing And about same volumes becomes the think rises down, So, more productive? as staying costs your it do as Goderich within come Is reach how

can about you think So, sort different your into of those I’m things if plans. how wondering help play us just

Kevin Crutchfield

to the Yes. going going kind Look, I think fungible they’re importers They’re always of of will I to go, to going be come, they’re at mean, be kind a thing. best. inconsistent

to But chase that how business. business want that business or look, go do There speculate the that’ll try the for to we a try how us. is some sense about our position the that couple about backfill on to you I’m figure not to occur at question their I to to around day, think go right some void end are eyes creates, importers think grow? other there, going that other take We to the the And it. makes the how of now that how there. figure a are mean, Island of not the to second much going of be. that’s Avery here, options benefit. going will inure to -- of Cargill to jockeying with to let business I out to for going They’re have out that going strategics fight. without

in that’s and the can how are don’t at and our couple much marketing we that’s in if continues don’t does, the grow the You better so course region. Cote cards a way you But, I play get a next thinking to out it, I perform Blanche out, better this footprint. looking and about think can share it the of -- point footprint Goderich as we different that’s think market the we to year. standpoint think just as know I more footprint, or at start over years. it that’ll existing take about from

Mark Connelly

sign that. could incentive some union Okay. contracts Unions I contract. without to typically wonder don’t about five-year we if talk the do And

we’ve from what you in seen talk anything different that can So, past? this in be might about the contract

Kevin Crutchfield

terms mean, a it’s is was to is a in as Yes. think very color George, to anything. that any any day-to-day. there At nothing much you’d farm, you and But be to it’s involved high giving up could consistent with renewal. I partnership acknowledgement the of he away as further level there I in testament there add the like the -- that? see George a from relationship, sort That’s truth. And look, of what

George Schuller

like we’re extremely I’d from Look, CBA this Kevin. with Goderich. say, at pleased to Thanks, our Yes. perspective,

years. forward. think Goderich. bright Kevin our will Kevin As build us enterprise we the continued over been really, It’s you as And at it, it couple demonstrates to weren’t that’s anything. just our with from for highlighted, relationship And go when But look there a think entire as around sets collaboration highlighted, that last I it really of future. this continue built entire up our team I at

So is I again, I where our consider would of think, this and say workforce as leadership team this brighter ones well. our one those

Mark Connelly

That’s you. Thank helpful.

Just the question in is related else just there? there said CapEx to quick for one reduction, something or you The divestitures Jamie.

Jamie Standen

bit removal in of little of it’s No, ops. the Yes. a different but the areas, a of couple trimming primarily discontinued

Mark Connelly

guys. you, Thank Okay.

Operator

question Our CL next Silver from with comes King. David

now is line Your open.

David Silver

business. Okay. Thank question of on you your a I kind very marketing-based much. SOP had

for business lower something ag sense your above are for like year probably wondering sell other a what my and which robust, production, optimal term, just is cost perspective want what improvement, environment squeeze to you a season opportunity is production. to last threshold solely from in I was tons, similar pull Thank opinion production? SOP a growing managing I internal be just little out handle for try is production the bit you up the that do you. overall? it kind mean, In your and pond-based potash going you clearly the a sure, in tier do is, in limit the of limits the or marketing words, if this? of my imports, little the do where And is to I kind more. could SOP longer you a of And sold you pond-based the purchase or but even demand So, price amount or ramp XXX,XXX above during capacity strategy more marketing markets amount quite mean, to price how this

Brad Griffith

Brad fee is, we pond tons. tons, question. operation call Saskatchewan that that Remember available right XX,XXX, David, of Ogden Wynyard Excellent Hey What our Ogden had multisectoral here. I would on exactly you’re pond too fee say Griffith it tons. XX,XXX first

not to optimal that’s listen, insignificant a for and an perspective, MCA. marketing this we model an to So, we in supply here -- decision an source time, market try optimal all coupled with the thing customer U.S. make SOP From us of the financial decision. we

sulfur, critical to a elemental both are find is robust I in the and play active when in talking and how plant fourth soil for to tolerance. in facilitate agronomy both differentiator think, that’s in tolerance. more for uptake is our Kevin’s dry micronutrient, oxidation. drought. comments, product that drought system roles the having and California And comparison readily in improving sulfate its Protassium+ Year-to-date, sulfur available is of or potassium Potassium more fact available a will customers themselves about right is sulfur drought think microbes he less micronutrient, our contains specialty sulfur those today. sulfate we situation root our about the we market and When key in is our alluded driest

to decisions that we’re available. the farmer really having to make and some so, our limited staying they’re with of difficult groundwater customers And close pumping

value We’re crops decrease and almonds seeing increase orchards vegetable like in in a higher pistachios. and

and back optimize retailers. customers and add to including a make when call exceptionally Ogden. the we on and potassiumchloride our your try we we volume at to our production, close we So, into would watch And to question market, again, the stay our facility distribution

David Silver

just but I off ship, a had just back were prior lower, price was of follow the other pricing your here, that I’m of or brain XXXX-XXXX set up rocket potash the favorable in contract early kind remains the quick, took based maybe price was Could Company year. was in Brad? maybe really words, my price for the potash if that uniquely this I’m that real scratching when posted stipulation kind and agreements wondering the timeframe needs remember potash element purchase I contract that year. like in place your purchased or when In

Brad Griffith

No.

or The there. of so. So, want expired couple or to, in, referring pieces XXXX we’ve got you’re say, I XXXX one a David, to

longer. is that So, no

that, at would MOP to up if upgrading operations, it So, buying be we’re and into market going prices up converting to Ogden converting it that -- supplement our SOP.

agreement place relates specific to Wynyard in have it to we do Wynyard. our that’s an So, But as facility.

David Silver

that. for you Thank Okay.

some result historically, with for the opportunities wondering for C&I and C&I But, products talked words business lot a of departure Just in one Salt. it Island? Island kind on business. salt of you’ve of with does a your of line But, the if opportunities certainly there of In a the a quick deicing full question salt Salt it side? has as it any lot Avery if incremental I and processing, agricultural had institutional incremental like -- in provides cargo Avery on about opinion products out your other shelf. commission, on grocery what was means your Are

Kevin Crutchfield

It’s up market to really Utah one. eats that that Island where tough the serving. freight the and that was cost. salt just differential The into I’ll from Avery get there

think, operations off got distance. in But, up our I unlimited it can’t the from and cost understands, everybody you in just virtually coming -- eats freight we’ve compete Ogden. salt really of that

David Silver

Thanks Very very Okay. good. much.

Operator

Crespi. question Our Instructions] from Shaw with comes Monness, [Operator next Chris

Your line open. is

Chris Shaw

sort the on salt It’s your that UK of What that out -- the guys bigger of had break quarter? but impact how not comment? was a specifically exactly about mentioned kind number, You quarter. much strong

Kevin Crutchfield

say would rough or XXX,XXX estimate I tons. is XXX,XXX

market split our our UK there So, the pretty was and in U.S. between impact a business. even

Chris Shaw

I’m sorry.

Kevin Crutchfield

Yes.

hundred a benefit. of So, few thousand the call is, tons it UK specific

Chris Shaw

Yes.

Okay. significantly different? And the divestitures remember those. you rate tax moving I particularly then, will the be first post I America, think acquired South in when

Kevin Crutchfield

Yes.

guided at So, the the XX% we’ve we’ve includes -- rate divestiture.

So, is South America, our Brazil, about XX%. rate tax

we’re So, rate jurisdictions tax one of there. shedding higher the our in mix

operations to right XX% continuing how down we basis. that’s on So, a around come

Operator

turn Crutchfield, I’ll closing the CEO, and this at no time. questions are in for over further to call President queue There Kevin comments.

Kevin Crutchfield

and as to operations continue questions. next updated on to going you just tuning few I about appreciate to execute over keeping in the to here. go of I the we’re internally I think where thank want everybody look our quarters, we for forward course from today. to start time and your

for again great thanks So, in. a day. Have tuning

Operator

conference call. concludes today’s This

now may You disconnect.