Compass Minerals International (CMP)

Douglas Kris Senior Director, IR
Kevin Crutchfield President and CEO
Jamie Standen CFO
George Schuller Chief Operations Officer
Brad Griffith Chief Commercial Officer
David Begleiter Deutsche Bank
Mark Connelly Stephens
Seth Goldstein Morningstar
Joel Jackson BMO Capital Markets
Chris Shaw Crespi & Hardt
David Silver CL King
Jeff Zekauskas JPMorgan
Call transcript
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Good morning, and welcome to the Compass Minerals’ Second Quarter 2021 Earnings Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session, instructions will be provided during that time. Please be advised that today’s conference is being recorded. I would now like to turn the call over to Douglas Kris, Senior Director of Investor Relations. ahead. go Please

Douglas Kris

welcome earnings and recent Compass second of Minerals’ and Good call. to Today, XXXX XXXX. balance the conference outlook our we quarter our morning, for the will results discuss

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

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

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

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

noted. information The the company's XX, in for the and restate XX, results filed March comparative reconciliations XX-K or XXXX. previously presented Form release the presented also our Report of find business, XX, quarterly Annual Friday, our can which in the continuing on online. August the on our year of reflect adjustments ended amounts earnings The Form these XX-Q purposes, for for and also otherwise December in are report reflect both to unless only results XXXX, this in call historic of issued available items earnings operations You quarter release, during presentation, and ended

over Crutchfield, the President in December to will XX As the now I previously month from to end our announced, fiscal September year year Kevin the CEO. fiscal call change nine and XXXX XX. reflects turn

Kevin Crutchfield

to thanks for today. and participate morning, taking the time Good

performance where teams priorities. my second of our stand kick leadership for review as I a company to want few previously comments overview also we of communicated brief light our with a off take to the a in I'll minutes quarter, While financial strategic

in quarter, could plant XX% to meaningful pricing us Ultimately, volumes. to compared enabled the the strong revenue our what that maintained the for and reported, top-line in period, controlling and expectations work of in control sales year we solid growth momentum salt resulted nutrition because we both prior second quarter. As salt revenue exceed from contributions consolidated

our to continue are of supply managing sulfate through disruption work shipping which unique inconsistencies, previously and potash reported to We around feedstock inflated industry. our not chain costs, and

margin operating earnings on execution second consolidated our seen year-to-date, quarter prior adjusted our the we've quarter, environment, XX% and the core these both to saw respectively. of growth with to measured this While I'm to pleased continues the declines staying categories EBITDA businesses. compression and year, our XX%, largely challenging way laser-focused compared during due in navigate in team

of we versus of an In prior generated XX% fact, $XXX during year. XXXX, the approximately free strong of increase million, flow cash first-half positive the

we've management expenses to cost steps prudent prior year. control the general taken the our compared On to selling, side, and administrative

We capital and also continued that approximately coming million in year-to-date. to at actively in our category plan, $XX spending manage

approximately moment, our and better at driven $XX down, $XXX the segment. were operating costs both XX% million, quarter over while were on handling for of for expectations EBITDA shipping than segment in million million, a earnings a salt Focusing increase $XX and of second by revenues primarily

results also salt meaningful we've detail. more impacted accounting that for however, basis, considering the achieved a in segment. Our quarter XX% When of earnings, in XX% operating segment in the reported change EBITDA on Jamie discuss were growth results salt will by methodology for year-to-date and an our

volumes our in flat prior season of in revenue volumes year, than pricing approximately the an opportunities to the contract were quarter results, to to roughly nutrition and discussed price $XX expected are quarter consistent highway selling bid compared slightly strategically increase segment, prior lower this million in be to continue American plant looking business, to North are of expectations. second to the earnings with increase our $X.X to to X%. year. our compared With weigh for came committed at our we XX% in balancing million, always with segment, capture, take our on for while that second disciplined line given season previously bid quarter a footprint. translated to X%, winter for segment bid was XXXX, million which anticipated share Operating $X.X inconsistencies season Leading at with the XXXX-XXXX approach, expand of season expect segment market while the relatively EBITDA generally feedstock approximately in costs, better average Regarding margin expectations least complete, the by total third this for average while we our for

continue ongoing drought monitoring and actively demand steady shown believe continually and favorable We're assessing issues the results. volumes near-term of on structure through product. of have incremental cost the sales to compared year September, through remained We that is they to our SOP may volumes to impact proactive in also nature, the Western potentially nutrition the conditions the how impact SOP the feedstock plant stable and quarter, remain short-term in the Protassium+ expect U.S., address the prior quarter. we've for implemented we our to issue the business quality adjustments

as close in a later on However, impact season drought demand calendar be XXXX the continues, the we'll volume could year. continue there eye to as keep

my the provided that on that employees of recognized built on execution, stakeholders, past, that to must to of was one our set didn't success what the provide gears to our acknowledged, and a quarterly kind were be course minerals committed company. as shift As I company long-term Executive to the foundation in and for When the alluded consistent clarity challenges I dwell first to recap our like of execution Officer as on Compass now task to my color both from at today, a joined countless some strategic comments Chief mid-XXXX, a to of as we I'd external of beginning becoming. Minerals’ then

and senior conducting assessment strategic areas outlined priority culture, I help of XXXX focus sustainable our team, early the advantaged our It's since we've still deep far of our that management And for building those be while assets in I'm a company: With time related priorities. commitments, been with a XX-months we've capabilities. done, is come on span. delivering extremely to how short laid work certainly pleased my and there approximately out

our of Over ensuring culture in the material to a Paramount of priorities executed months shareholders. with long-term against provided last the generate by benefits company a in successfully continuing to and to our focus course safety goal environment, workforce. of across six people and zero and and we our zero safety platform well-being for with is We a harm workplace. the stewardship sites, strategic particular, injuries the sustainable strengthen processes incidents that have the on our ultimate building to environmental number or of the a parity all

continued XX-month five representing year behaviors. enhance period. training, TCIR they case low a this and at elimination year That first incident safety through any on quarter significant proud employee reflected work A, XX-month performance average. to unsafe. we empowering improvement the or risk And employee safety results of rolling of We focuses culture the for total our deem to open multiyear a to rolling of second communication with quarter be the process safety focus X.X stop of was our I'm which to in previous continue a maintain trust, rate, by every of say strong TCIR by the over

business. a As creating fundamental you've say to heard for is and commitments believe one we safety our our sustainable operational a me before, performance leading success, indicator of

which of building quickly, half area improvements launched in and a execution get focus muscle, humility organization The other as requires of do we engagement sustainable employee get our self-awareness key XXXX. increasing certain levels been come or the easily what of optimization our steps that internal where an has of a about required and it fall what there. and requires efforts a our culture are level can Making doesn't better, well, in to we gain to we this of

senior generally increased our strategic diversity delivering strides continuous commitments. other through pleased our our bottom on be management imperative, in about improvements made our then process going for is with internal ongoing commitment to the focus I'm capabilities we've a category, improvement. simple. of our inclusion creating execution half as value not for stakeholders Through up but ensuring foundation about goals, we've organization, a and to do and organization the The challenges, innovation and clear do. talked Be quarterly continue team our optimization lot of area limited of say muscle, calls the levels this our priority we're to and of all the will on these and to efforts, enabled in with a second our this company. this throughout While board an including We've we what

increasingly as these do we're For they simply levels the permeate through that Compass program, purpose, calling all so at are how business of becoming Minerals. here not we a efforts organization

As of example today. performance it our our clearly efforts been mine most salient offer our strategic has recent for at team, I’d probably focus is a the Goderich

increase we've asset. meaningful long-term improvements plan in Over the a both of production the course made hitting production the safety, strategic and new last implemented to the longevity core in and internal of few mine We've years, categories. both efficiencies extend records

our brings resources mix they at of South consider strong As time, reflected sheet at I've have by it this potential. well workforce area needed assets, ways representative our March, whether call otherwise. reached followed X, our and a community relationships, Which five we still area, But late and our the home. Goderich, room micronutrients rebuilding the we divestment flexibility committing to its agreement achieved American new often core strengthening can been with to those focus, business organic our the documented. have strategic despite or we by getting in American opportunities, in buttress Goderich, nutrition completed plant lasting with With grow advantaged growth for collective right, actions our has fully I North or our bargaining completed about, progress, secured both the the sale company historic spoken believe year financial efforts say operating balance strategic in the asset final of and this in we to positioning April, those and me July energy finding to business, of process. leverage success In towards

debt long-term us have by our reduce approximately these Specifically, enabled transactions million. $XXX to

announced market pursue domestic central and identification site In addition, assess to we're sale to finally, in development a our Chemical our we appropriate. mineral transaction evaluation opportunity business, while South of broaden Salt around as the options at the through We're of to excited Lake. when to look portfolio And that of asset. ago, Utah strategic a expected the serve sharing this as order a more Ogden, forward information to weeks growing continue undertaking by the brine the on several American Great evaporation for resource demand, resource, our sustainable solar lithium lithium maximizing value long-term we currently

as with resource, to other this Lake. co-product a ahead. with and excited produce nominal portfolio at future to feasible chloride segments existing like are operational positioned Great Ogden sale. important, impact people, resiliency we Equally salt inherent by lie to are on this organic only the essential and processes, magnesium waters on commitment our of existing operate. We about well strengths production more uniquely opportunities and I is and have our our we newly our and of permits details to soon already feel and minerals remain capture the we highly the incremental of pond strategic we're the we're impact and our But production beds processes addition with to lithium not which the expected underlying that our Ogden infrastructure, projects SOP confident believe of assets, discipline opportunity the this of our share advantaged if operating the leveraging an imperatives, the this As lithium fundamentals facility, on-site. of is aligned Salt defined

creating value do business, As generating commitment we with a continue to we margins, towards on growth our deep for and minerals earnings all even essential sustainable stakeholders. and so thereby advance grow our strategy

time this discuss Jamie, quarter will turn at in detail and performance more over rest of second Now, the financial outlook. who the year I'll Jamie? it to our

Jamie Standen

our period in prior our segment, to year operating with consolidated to uplift, and nutrition salt sales a with moving Thanks, million, increased our plant second quarter XX% start Despite achieved performance, rest this then growth the results year consolidated adjusted compared the finishing below year specific segment to prior compared our $X our segment year-over-year and comments a our pricing income before On for was outlook. while Kevin, by and of consolidated I'll regarding good approximately top-line company strong XXXX, basis results. morning, everyone. our on in fell revenue consolidated few volume EBITDA XXXX.

same associated is the and for we Over two feedstock to quarters, SOP compression margins related period, with salt well in last This and margins primarily as shipping highlighted the inconsistencies we've operating production both that saw EBITDA compress. costs our the over handling unit costs segment. as elevated the

to pleased operations, of $XXX the generated in six months that we and from the cash are about first continuing approximately million We million flow. $XXX of cash free report during flow year,

As year our at forecast to accounting the couple of change improve XX. results the month have accuracy of September the forecasting of embedding within December XXXX announced approved our We're as highway impacts perspective, from our a fiscal full results will benefit Board beginning an the this year we year-end different From each optimistic in year change full going deicing nine June, of Directors bid complete XX in ways. fiscal in will our shorter in year. season our forward,

increased temporarily rates expected it and increased therefore, million. First, tax our expense $XX.X our to effective of year-to-date XX%, tax

both However, per respectively. Similarly, cash shorter over per nutrition by to in XX-month for not third temporarily increases our year quarters, taxes plant typical second rate ton, changing salt the period. this expected during a effective and tax $XX unit $X.XX impact and our is to business ton and about the costs the

XXXX, the certain related increase our of was second sales. $XXX taking expectations. largely Looking chemical quarter from of results, XX% now total volumes, timing in improvement salt million sales of of up the the at demand customers XXXX of due and an second approximately well ahead were in $XXX quarter as additional to This million, minimum segment to as

which levels, pandemic. addition, last In the the compared and year, more impacted by demand early was of normalized industrial our volumes consumer negatively sales to as returned months typical to

year $XX.XX deicing As per quarter. expected, highway prices prior were lower slightly ton at versus the

a while it think XXXX. to lower deicing prices important shown highway highway that is average growth quarters, prices annual X% seen deicing last since note over the I we rate actually have four have

On prior prices the expectations. consumer these product due second per X% $XXX.XX On selling million $XX.X our increases $XX.X in million and $XX.X salt quarter, segment results to hand, the totaled increased all XXXX for price broad-based at $X the compared year EBITDA Operating average or second million the salt groups. ton, of inflation-related to quarter. other over million quarter basis, the across segment industrial totaled earnings the of a are while versus segment for to $XX.X in our year-to-date the high-end guidance for quarter

and EBITDA in as costs fall shipping year-over-year, a in compared year-to-date a points quarter, X quarter, our are are industrial XXXX both and EBITDA respectively, percentage costs deicing second mostly and to expect highway salt primary unit buckets. contracted operating shipping when flat into handling due approximately and costs, said, we only and is handling which the did margins businesses. impacting flat X these X handling consumer on margins this increase Our and and XX% shipping point, That unit Again, well. to which higher three margins percentage operating basis, contracted comparing being

vessel and well modest First, fuel increases. due year-over-year, were costs largely to costs higher barge rate as higher as

business. piece Last depot costs overall Another we and bucket capacity our this is to area, in costs. was added rents. long-term some saw distribution to our higher In related related C&I

adjust Overall, a truck offset the mix expect costs, repricing these the entire well prices as we shipping our shipping some role have salt during overcome saw and has we just to played significantly chain While disruptions costs. past. we required higher supply believe illogical increases, and bid as as in the future rates, to in the industry Therefore, by been appropriate we like to product handling impacted similarly quarter.

salt second improved costs quarter flat XXXX, costs industrial UK offset the per higher and unit from Second in production business. by were cash were relatively as consumer quarter production costs

revenue the noting of second prior XXXX for the It's average This quarter North to year down $X.X the XXXX. second severe our to price are at west and compared increase and that volumes XX% strong product. X%, segment, we price short-term nutrition selling average the second million. quarter. and our compression to we to million plant first strong while our X% prices sales demand XX% year margins the has to the generally in EBITDA to conditions $XX.X and the higher earnings, reflects XXXX. steady by X% percentage all X% compared worth Turning down second higher XXXX. during than And in quarter million sequential quarter some improvement was prior deliver see for products. $X.X was from fertilizer southwest, quarter in were nutrition offset Plant compared though, XX partially for our also America in points quarter that quarter there our drought operating clearly continued second to demand of in global by $X.X SOP Protassium+ been We've was margins quarter, to the pleased EBITDA versus experienced our compressed With operating down million earnings lower sales to an

As rates. as the the unit to our production previously higher we SOP work continue operating we during feedstock have per inconsistencies second experience through quarter, impacting we discussed, costs

have costs financial continues implemented measures these our short-term address elevated to proactive guidance, into this results, situation. our are the impact and to While factored we

to We interim also made our methodology. period inventory a valuation change

our as period important correct overstated closing to our product reporting. costs to quarter quarter full this work historical compared that only, product results. our subsequent impacts to interpretation no full relates correction results. method, identified is impact the interpretation salt valuation not costs, historical we guidance, the year impact and periods our and first quarterly of understated It with new normal it to note does interim accounting process, inventory When to we As through year interim the need segment our our

in XXXX first this $XX $XX recorded in periods. shifting XXXX, subsequent For to About approximately million resulted in the from of year. quarter costs costs this were second million quarter those

quarter now periods and making It's few statements. as other the shifting that we've into as reflected change appropriate items, including second well important in financials described year-to-date quarter our in restated a second financial well periods, information, for XX-Q change this items all corrections Because to XXXX restated our note also the prior XXXX these year-to-date our Our are as as XXXX corrections methodology, these our periods. financial to are the Form immaterial information. prior of very presented in other we

Now our I'll spend a third our well reporting, minutes as on outlook. as and few nine months quarter XXXX

change full sometime in our will After year in providing on for four consist shortened year year. year-end October the shortened company of year this quarters continuing At month reporting of full this pro XX, on file are will the XXXX operations fiscal which report basis, ended our period, transition time, fiscal nine Form beginning a XX-K September Given XX, the X November. discontinued forma September XXXX results excludes operations. we each and guidance a from

of fiscal As quarter year steady we remainder optimistic and new be we about for the will business. provide year. salt final generation revenue to continue our fiscal We into segment XXXX, of EBITDA our head the anticipate overall the

and year-over-year sales to revenue volumes. deliver nutrition $XXX third business anticipate continuing segment $XX to third relatively quarter. the We million, $XXX segment, with $XX volumes In million during million, steady we our our plant sales salt and EBITDA million industrial consumer of expect flat quarter to of currently

of pressure the the put back-half sales drought volumes calendar in However, year. some our the Western U.S. continued in could the on

situation monitor closely So the we continue out to west.

realized demand million, XXXX. handling shipping million with costs than million $XX of revenue quarter, nutrition unit the slightly EBITDA plant in of range for our $XX $X $X quarter to we to as backdrop, expecting well as higher the are expectation the in this and of second of coupled million rising and those Given expenses, third

adjusted plan While we $XXX for portfolio XXXX million. month business balance On demand, sustainably a are EBITDA relationships, on period, these and this focused efforts through our expect navigate nine to operating we and dynamics. we to our be continue the long between million to price, consolidated to basis, $XXX optimize for run carefully and the customer

Now lowered our a debt approximately July. few we corporate levels for significantly $XX expense the as items, months estimate our interest million, year is nine step in

spending free Our forecast million nine in million, month to our $XX cash $XX approximately $XX and flows be is range. million capital the expected to

and With range the EBITDA our South plant with micronutrients our of sale, able expect completed be debt upon sale, levels to agro reduce Brazil business completion ratio the divestiture. leverage X in our we times net America North along to to meaningfully continue X.XX the the business American have closing to of nutrition to chemical been absolute debt

are we're been internal of and the As our long-term plan. excited progresses. we defined assessment efficiency continued we've newly short resource for from we our pleased with paths to our consider the strategic our capture lithium future forward, as And able optimization

management the unified As our in Kevin for have against comments, senior is in we noted the his laid our out team entire on imperatives company. strategic executing focus

will As continue a essential that portfolio, we optimize in we and I’ll continue minerals the operator existing session. Q&A to allocate optimally ask Operator? With shareholder maximizes value. begin to way capital that, the build to aim assets to our our


question Bank. comes first of Deutsche with Begleiter line David from Your the

David Begleiter

that maximize or pricing of season just due to lack in volume get pricing any some pricing, you the to Thank you. on gains? you Kevin, is order Good your bid try couldn't get pricing morning. didn't

Kevin Crutchfield

not I that? all question, David. that repeating you Would of I'm sure mind caught apologize. I

David Begleiter


a pricing get if On function that because competitive highway the order on of you marketplace, of push [you’re and volume to any that to pricing lack in focus showing pricing deicing dynamics in and is share? given the or market of couldn't

Kevin Crutchfield

bid No, season -- first I'd say different. I we mean, is every take look, I mean thing always is

comprehensive be. production to to holistic, demand match we and Our plan focus what our with the take anticipate a review is side

ballots winter ending than and to I’d the of the unremarkable characterize ability inventories to kind guess having think think on February, as it you generally year when rather up flattish, the probably I So, deal I sort with. turned about And of X%, us. side. back price out sort pretty still now, to in from roughly a good as annual by the XXXX of a you compound volumes rate for we're growth X% look our on grow to But,

least thus and our we’re a some on grown modest So, footprint consider XX% far up it the season very successful season having market basis. I a through. share I consider picked at

David Begleiter

Salt just some the can and technology And Great with lithium discuss the you the of Lake, you risks for Understood. on challenges asset resource? in see daily that

Kevin Crutchfield

market if of lithium forward expect to thus be make technologies. of selection, Yeah. that sure both we long announced to this previous the think, And to a But was process, has it in announcement month rejection to soon. thorough updating that more. appropriate the technology. want plan to is the and will, structure And good to very asset maximum getting to very of I bridge we're We're look evaluated recovery conduct when discussed a a the our terms pretty into Look, of and time couple pretty value. lithium positive. seen a make is good allow close of to and we've choice down our the strategic we're as as selection. first we realize about but able resource be assessment guess far ago, want a deep, take our that We've been would to technologies, there. would But as think materials, make type as we to extraction we to we're its an I way that on handful And and we everything obviously, have direct non-lithium well making we we period, that contaminants, the during a a cross make well you

David Begleiter

you. Thank

Kevin Crutchfield

Thanks, David.


Your next question line Mark Stephens. from with comes the Connelly of

Mark Connelly

is the and point? you continuous you whether can new fully the your miners at CMs ramped us And could second-half? are which what what operating give rundown plan are us Kevin, of or remind Thanks. for doing this

Kevin Crutchfield


units here I’ll specifically some stronger. let the So newer units, they color. well, George The him add two bigger, are are running is and

not at want mentioned anticipated to develop the well. the But as during we’ve additional we our demand being, because producing can, market of volumes what I the overall, running, units so what kind George they the very, our supply we are level well. market was. first are like but provide we that based we calibrated see very terms on very, how bigger color, felt some As question, very the running, let units two with of are the we in I’ll side

George Schuller

comments Again, with they looking Mark, I’m Yeah at as pleased performing extremely are said, units those those a and Kevin thanks. just overall units. couple on well. that.

As Kevin maintenance with highlighted are those take the, of new mine it, areas our develop development we keep new call plan I’ll continuing And those in mind, our miners. to some older in would miners.

we highlighted, a Kevin as have again, upside. So still of lot

miners Our workforce a the there, joined well. in our believes new both have of as our plus management we team in lot upside XX still there and is equipment that

some continual productivity to that development, it will through again, us Thanks. new opportunity years, as So finish off improve our cost that we go the next of give at and couple as location. we our to start mine

Mark Connelly

on have past thing SOP When this visibility more into will sort Okay. of are One question, the you and comes issues, goes. you clearly quality when this?

George Schuller

at two Again, operationally deliver practice there, operating call Look, go XXXX, of major some Kevin continued put on and the this. to quarters as methods, highlighted our Maybe to and what actually we years, we Yeah. over this cyclical kind in. that to eight a harvest there. we've Jamie heard Ogden. encounter couple Ogden, deliver we but a I'll [indiscernible] from good it, to in allow progress, at our five both both maintenance a last sampling hard to it make see approach very see regards in I'll testing and And of methodical in real on quarter at at finger to it's also kind we taken site to it, feedstock our quarters, of and we've over not improvements the you’ve future only us that, But as maybe take the seven, but through from some phenomenon. will start this a every say expect we'll half, as last weigh a look I'd

everything So I years, so it can that every, actually from say in got you again. have where it, take five feel have to in year period this to we possibly again of I’d we of it’s you learn try year you have to seven keep again, time. out, to exposure working – happen see Jamie? phenomenon during on We one kind this don’t with it,

Jamie Standen

add we're as which evaporation a six to a raw of just have lot that, prepping. to, feedstock, more season, learned coming in And George doing mixing the this Yeah. manage months I’d we're of And so through last up the alluded really the fresh over end we’ve on obviously, in this we'll of how lot our and testing and terms terms monitoring. material

more and so with mix to of it harvest. data quality last enables to And upon, optimize the sub-optimal the us year's blend plant section given icon, by

Mark Connelly

really Thank It's you. helpful.

Kevin Crutchfield

Hey, Mark, some in image on Page units a we to want back And older the for just of illustrative our out, an view to I the an prepared George pulled these materials first Goderich roadways. develop pointed XX, on sec new There's it's off go your of mine. question. as

records year. to couple produce in a new a So, continuing this place, mine the while putting a broken new at of we internal and continue to plan, be same here, implementing even time mine basically

et really develop new think to in, amount you we're can't that's in occurring in, this those But both a bypass cost about fair note that a way I change it's we these function I the plan see of cost, get from looking and of mine as as So, a important new think step in productivity see we've and that talked put incurring we terms cetera. outside before, we'll in. once roadways

thought more couple be to But, progressing a And context. that have still would years nice I we nicely. some go that. added it's on So

Mark Connelly

Very Thank you. helpful.


Morningstar. comes Your the Seth with question of next from Goldstein line

Seth Goldstein

Hi, With good complete? you the how question. think the everyone. about hit until costs? for year? do we change view unit my taking new production Have morning, flat, And should per you first mine is profit flat the and you stay Thanks how prices step do next ton plan

Kevin Crutchfield

I’ll ahead Yeah, color. go and add some

Jamie Standen


not year. talk specifically upcoming the profitability we're going So to in about

And the year-over-year. quarter down has still to travel and, and they're we tell soft So that were ultimately works relative step long we still, and our as finish the I see new the occurred. yet bypass the sequentially shut That and down to are to both as George through. you not to can Kevin a mine old mine alluding fall and change in will third costs expensive plan road is way complete roads our maintain,

you'll November wait for in the to September full we XX, have out that So beginning year full X through for our October year, roll XXXX. guidance

Seth Goldstein

you follow-up you in then what that. I DLE the lithium. partner, are steps couple quick as forward appreciate the development just Okay, And next a move process? select on Once

Kevin Crutchfield

et in the from think pumping standpoint, I up testing the logistic how and of standpoint, on-site location modules strategy way Well, we set be we do the DLE selection, doing a pilot to make the chloride. start those cetera, then once to standpoint, we're now, will a production

that the be step. So would key next

we've during So, how indicated I discussions selection, on thus we I time DLE to think provider inform at don't that But, put limit this that will project think want the assessment, relatively going I technology we and in it's the far, strategic a would also least active, say, been open the we're and to very near-term. forward. but about think

Seth Goldstein

details. I the Thank appreciate you.

Kevin Crutchfield

Seth. Thanks,


BMO Jackson line Your comes with Capital the Markets. next of Joel from question

Joel Jackson

able Good of or sell you morning, talked I maybe Kevin, gentlemen. think get to about Jamie, being lower $X $X, costs.

looking to in improvements considering, out call? here inflation laid salt, of right XX, Thanks. of to on think you multiple the in fiscal year and that cost the that year, fiscal template kind trying now, of was if you the comp Goderich, it, I shipping September in year, you cost of try future buckets the you earlier so come, can the and obviously, think and do what but

Jamie Standen

got costs. remember think bargaining multiple business, inputs, we've Within still bags see I and that got Joel, our things we there. we've that set, our good opportunities direct are to we're collective costs But lower we're is, think minerals, other drive thing obviously one about overall, would many So, agreements. got of our labor say, going I business C&I some business. that to I extracting

change month step into continue at magnitude we down over as That we on significantly, nine not get work If look salt our plan. XX%. about are to talk that, to just XXXX, going much mine costs And long-term nine to is you going we're order the months, be then, forthcoming. of

see you're that's step plan. said when going complete to that. then to mine as when haven't exactly going progress through We that next that we that -- we you're will another And see when be, down

we limited see So I continue think for that's not instances exposure XXXX to into that giving and season do around also shipping we'll And said go any our dynamically business. improvement Obviously, all We're remarks, those on we constantly just next my as as we year. to but costs of I expect really our have prepared next any many then see recapture to to handling the reasons C&I we in side. we'll say. to do inflation. it continue outlook within in look or inflation yet, to But our information bid

Joel Jackson

volume, Goderich for Meaning, production season in want does that I within be netbacks to competitors flat that and do bid then, running the on come lot Does and mean is And reassess try optimize about the environment? a strategy, very lower, next think your lower about following-up salt market really at would a fiscal on does size picture. what you're to It so and mine be you what of you is netbacks and really can inflationary that competitive should down what you've clear follow-up because said. Goderich. your of want road, and inflationary led strategy, what production if your just you've with to what do, you year? That cheerio lot my your for has then you did? that, your strategy, pricing and environment. to helpful the when you flat talked strategy make planning fiscal look So pricing, ‘XX important you just more What entire explain response, it's

Jamie Standen

recaptured say I the mentioned And that are up our answer but some would up that just since X% had. CAGR pricings on X%, that specifically, flat. prices I historically I not shares would remarks, commitments we a basis have XXXX. we've Joel, in prepared my

when supply strategy or up an we now. went now prices difference how down. not come was back the there's So supply feel any available, business. equilibrium in think run available, I don't like they've We is there's high

is now set we're I that going we've operate think Kevin? way forward. that now and disciplined market going to our be where share it

Kevin Crutchfield

allows we us we election to It we execution, the We our of before, regain to so not could calibrated focus made what be market we've do volumes I anticipate the but to Yeah. on some to Joel because can market like that again, demand. more, the match mentioned share.

on us a portfolio, As facilities ours it optimize Jamie a side, a tad, allows that the of was anyway, other our grew focus on to attempt but our them that said and then commitment Goderich execution originally and it with resulting approach. both at run consequence and to holistic as footprint just and margins the as

George Schuller

think of continue go cost extremely comment financial XXXX I Kevin's going look was of site just you, make our Kevin perspective at and and and important to assure I we cost, we Thanks. that into always to going is recognized a -- can as times operational a from start real an on one There's I But cost in our ‘XX, tons to that business. the and Jamie production. leaders to is across acumen lots is as referenced. our about there's

Joel Jackson

your earnings of lowest to going the with quarterly Is in probably simple that? interesting some a But premiums maybe but try SOP you're But at we're child Is you to liquid, June, And And you to Can forever. asset I be potash years not for very to SOP has not in do that, highs seeing you're achieving for here for this in potash that that, not have real. quarters in to you it's really Midwest just some lowest the focus lows. and doesn't talked in some operationally potash You've very so XX-years, obviously, they're it Goderich become well like California and ag the out where the the good decade, one with SOP better good, prices not the pricing, now about. decade? things about the about prices stuff As drought, other Ogden There's really of trying earnings. Midwest think SOP. about are on They're any you're getting talk you talked launch? see in the question, a got business? and been of good is business? it's over about you've for same Compass make this to now ranges how price guess achieve

Jamie Standen

good Joel. a that's one, Yeah,

make me a let of comments. think I couple

timing, couple I in points. profitability you we've it's think, obviously, quarter, our you good a got a of Brad, couple net When of hit as But on insurance. not these consistencies, absolutely that's feedstock our and good at for comments, in unfortunate. look this

of side, even those as refer not MOP, prices to versus There's MOP of on MOP SOP think some I has spread the available. at of not lot traded seen. you a a lot you've

Brad, do color to the general remains want you on that be some add market? to So seen.

Brad Griffith

specifics transactions I What customers, with our our price Yeah. KCL. prices referring Thanks, don't like are sense. would in anticipate are your discussions them our the economics Midwest And Belt Farmers further feel KCL. you're that discussions of dynamics and you're are real? for now, there's with took in the of lift right X market kind price back $XXX price distribution have we make August of on and current Those make In to, potash. our to announce producers and SOP, potatoes do same potash, the referring pushing our given our question Protassium+ active ton would like of third customers, the occurring those I’d and to a crops And in figure. days. “fluoride dollar lot to they some Jamie. sulfate us vary market, that We been products. Corn on who in crops comment, probably to one We're crop appreciation tolerant” renewed region. cases, with delta Hey, between the simply more Joel, expect interest don't say rapidly have prices think in KCL a at of I by migrated because coming now Joel. I


name company state Chris your Mr. and with from of please question the your proceed next Shaw, Shaw. line Your question. comes

Chris Shaw

Hey, how doing? & Crespi you everyone, that’s Yeah, Hardt.

Kevin Crutchfield

morning. Good

Chris Shaw

and season ones season? bid into bids, start weren't they the about quick some of March and the later planning shipping bid costs. even I I too they late you Just bid you on in to to budget of the start February coming some. sort that the season start or like that curious for your bids. was freight able know for with the pricing into maybe Did your some in higher But of

Jamie Standen

monitor it we Well, very closely.

and of we're higher right still what we're into process rates, relates barge. the now freight and mile last to it bidding is We of a now booking built we around be expecting the just kind to quarter December highway we lot as things. that and doing business, bids seen. these the so were We'll As vessel we more C&I side, deliver we've expensive through tons these quarter an do. got truck then estimate remains March those got always And than thought and the real And so. on our

year-over-year, or were $X shipping handling $X.XX. ton salt kind in and is for expecting So while a $X, cost of unit up we so

bit So most a of some it than were really and we was on, we fuel got truck, on expected. just higher we hit planning

Chris Shaw

volumes guess then, tons. to I of third for year that or guidance quarter similar sort SOP And XX,XXX last somewhere XX,XXX for helpful. That's to the it. Got

sort of Or of saying I seasonality the always volumes sort know weak impacting the Is I not remember? or am aware similar to You're last thought it's year. normal, of but a there evidence really that some drought don't quarter that is not in past, be I and increased that'd that already? of

Jamie Standen

to that want take You Brad or?

Brad Griffith

don't any of kind Jamie. seasonality Thanks, is change, there I think Chris.

still want potash. by amount adequately crops of sensitive growers, now, it our position significant I can in citrus, And for think right to they think demand, just a by chloride so sulfate customers nut product distribution applications. place, these that of there's get for berries, I

see changes don't in any I So seasonality.

optimistic customers our of some and think, I our our from fertilizer at producers. surprised heard reports fairly southwest distribution end been user I've larger the team conference,

So people. group it's resilient a very of

would expect see And things Chris. I so, to relatively consistent,

Chris Shaw

helpful. lot a great. Okay, That's Thanks guys.

Kevin Crutchfield

you. Thank


King. from Your Instructions] Silver of comes with the David question CL line [Operator next

David Silver

morning. Good Hi. Yeah.

I I'd your volumes. on think start a to salt question with like

the your quarter, second and kind deicing at volumes a both your upper-end the a in is decade. historical even more last perspective, highest of XX-years. in both the mean, the were of So upper-end And the think, I or than I combination, very volumes, maybe above from C&I

for other in seasonally Thank to I'm some found kind second head So wondering Island slow just of capturing my is words, demand may in to the And competitor? particular, share go I'm why used be effect. this wondering, you In you. quarter. salt are incremental and if you I'm Avery a scratching an incremental that

Kevin Crutchfield

year I are would done higher say the generally hitting a last see C&I Those solid. was obviously some volumes over the so we But five job. Last did good depressed back when years modestly has first, business you from really look volumes, the for or pandemic. sure.

franchise nice bit the to On a the be deicing of some that able side, timing. business in could we there, were little chemical book highway

of to Kevin march alluded just their get those market, the take the And had quarter terms Sometimes saw April, as hangover number overall from that. the then little really of And season, February, of of we we up, you you of a bit a really minimums didn't saw our during a outside overall that customers weather. a season. sales strong were how then, some of there whether picked the was, or of and third in deliveries. those the you contracts the in second flow, little ebb bit April combination weak quarter remember

well. So quarter those flowing were as through the really

and So, kind the it's things of combination of summary. that's

David Silver

kind from second contract was scratching in minimum shipments the I head, Yeah, was benefit Thanks. quarter. my some a think of there last especially Okay. year, just I

have follow-ups. of a I couple Okay.

Kevin Crutchfield

last as we did well. our remember, commitments But increase year

Avery of think Island. tell. So, it But relates I there kind flowing traditional more importers. bit some more constraining to and buffer seaborne could effect from while it's given of of that as kind do freight that it's a be the think kind to year-to-year. little David, imports, a acted And freight I builds as kind of mean, inventories of just with think where it's challenging are, rates to some for of we through, going be hard I

David Silver

freights, gives a you right, extra higher dollar advantage. little Weaker that

to lithium the over to I'm Okay. going switch thing.

So sequential I options number discuss ideal would could what manner. to guess if and days, in decisions a But bring table. I to and very there an early with would just company. option partner to guess I'm probably one it's the be maybe of a another I are you consider And you partner wondering know consider, to

table. attractive to consider bring beyond you. words, guessing, So provider. with you're the to especially to that the as strategy? to But go you anything choosing have route, that, partner considering in a I'm alone some joint opposed would the going or technology Thank has other partner a in venture separate capital

Kevin Crutchfield

strategy, the We're a time about market go the said the other great bookends just the with would Yeah, sever through. We’ve on to a haven't or be would We we is And it as for and think this that folks I would is, always to definitely table. lot options question. that's as extreme capital for trying And capitalize estate the mistake. think think decided into could relates developed And reemphasize get alone. concern, lithium everything the then, be it, expertise we would could not really there internally. type of or, a anything not just last there asset is what of to some concern between. us. it table, we off a the fully got concern us the And that on I which that we the be that we out mean, be do, the is as Ogden, capital startups. kind unlike to this it space, in it's big for a site that look, I but at and co-producers partner, think then are sell I sit a trying

But I would we operating is the how be think a Great underplay or co-product. side, it rights We're that's difficulty. want in evaluate to technical among we'd honest And expertise about Lakes, business there's priority Salt that. necessary an the it. be be the intellectually mean, So a a through of the is and have new what would space, whether aspects standpoint, I we for, certainly but to the probably good don't them, is think which capital side, I the resource yeah, to on products to the want I that are I but extracting partnership, at commercial develop looking think higher that's us, from we lens all the from and this

a So space favorably. expertise think I partner that that be we something the would that we view would don't, in very areas in has

David Silver

but lithium. us Okay. And last in one, I was one I'm early just the labor if on you to going maybe also squeeze wondering outlook there. read could your on give

to the crew might idea house a that situation there. labor And But size assess do Thank construction what the for availability any on of labor you that rough how you out a the be? just need you. but need? then, then availability, type regional the lasting apologize, to I surge going workforce the construction other not long once point, a is certain expert and workers in at So operate smaller, a And done. facility construction words, you're of an

Kevin Crutchfield

job, for to headcount. what want that. then, that to At wouldn't labor wouldn’t we is, it, think But fast I say take to consistent I the of probably thus people as now speculate on of of we'll to we're that first. fill this seen and the want And can create will we labor project businesses, decide rest fully right it I so looks inflation a It's inducement need done. much bridge just Yeah, like, slots some to would want tight. we when it construction speculate relates far, an point, how new get on with the aware the ultimately extractive price everything that would say to what that cross is go of too creating fill. convinced we we're we've But to I we get to on


with company proceed Your line next your of the Zekauskas, please Jeff Mr. question and comes your Zekauskas. from state question. name

Jeff Zekauskas

JP very much. Thanks Hi. Morgan.

bid plant the that Are I year? closing surprised out. about you season difference? to be to didn't in salt be can X expected that Why prices were? you this know, talk what are plant that And Avery the of Given was, them tons you that flat make Wouldn't likely the knocked dynamics higher? Island don't have million any one the got

Kevin Crutchfield

I were a And, mentioned Look, I'd good inventories elevated. a guess Jeff, I I what were earlier, as question. it's think, say, some there little

closed add And, extent Island used than think buffer. Avery sort might like, possible. bid full it'll to that that business, that the that replenish to to that so their a a say think And full of I'm in this of sometimes it sure acted economics I it we're Avery I to as could full you'd their take little to Island everything through. Any supply, that, own moves I side that would that to slower the probably to effect through, take color for effects that So something watching did sources kind as another But we're another businesses bid the they Brad? bit for on folks that flow season plug of maintain of of carefully. the a season commodity

Brad Griffith

that's good, think I Kevin.

there's in is comment made which of Just you earlier, us. the to of XX% season reiterate that front a

to are location have there from that a Avery so number And served tons we’re been that Island would of bid. that yet historically

Jeff Zekauskas


production carbonate about they your produce output SOP or remain affect other spoken Or, can what much are. any in do will you output lithium, unchanged? the lithium lithium And general, annually? how your your you've of In those On resources of that the equivalent tons, mineral? tons

Kevin Crutchfield

So believe don't just of the our existing resource streams on the we existing spoke stream, we other co-product. stream, ions pulling We're chloride the as any announced of lithium XX,XXX SOP there the costs year rates out LCE. that We the a et mag testing, impacts process don't that it stream of the compromise early we a and salt, products. taking of pilot production out cetera. XX,XXX lithium of production think will ions target just or to of when Based the view tons

Jeff Zekauskas

in of XX? you And like the you bid year, June what a fiscal volume. that more an at then is your going what clearly your in at can don't know bit you lastly, XX, state season Because, change know have you be little XX% or of Great. the September to idea

from idea is fall, prices what an fiscal do what before incrementally have year? snow the like. your get really What changing you September know? And so You XX your still do you of

Jamie Standen

not Jeff instead to it's but X. actually to relative X/XX, January

year, in weather winter then go year did our season March, our bid September, the So full when like was we guidance we and going how entire through the unfold in to would this we announced historically winter how for year the are February, fourth activity through the estimating quarter.

will the for season a Now, have so season our will belt have bid under for of we price our the we and full as portfolio. X/XX,

only variable Now becomes winter activity. the weather

we'll bid Always we weather. November impacted we full by outcome. of our cannot with the So year in our season around year can so expected full knowledge, announce predict guidance weather, full now do accurately benefit more anything the differently


no further I now the Kevin questions. are closing will remarks. call Crutchfield any turn to There over for

Kevin Crutchfield

We to for appreciate attending. Thank again, you a you day. tuning look we in move today good and you, forward keeping appreciate your interest updated forward. in Compass Have Minerals, as and


Thank you participating. call. This concludes today's for conference

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