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Compass Minerals International (CMP)

Participants
Kevin Crutchfield President, Chief Executive Officer
Jamie Standen Chief Financial Officer
Douglas Kris Senior Director, Investor Relations
David Begleiter Deutsche Bank
Jeff Zekauskas JP Morgan
Joel Jackson BMO Capital Markets
Chris Shaw Monness Crespi
Call transcript
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Operator

Thank you for standing by and welcome to the Compass Minerals third quarter and fiscal 2021 earnings call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question and answer session.

If you’d like to ask a question during this time, simply press star followed by the number one on your telephone keypad.

If you’d like to withdraw your question, again press the star, one. please to you one question that follow-up. ask limit one yourself and We you. Thank to over I’d Senior the now turn like conference Investor Director Relations. to of Kris, Douglas Mr. Kris, go please ahead.

Douglas Kris

Compass good conference earnings Today, outlook we recent welcome Jack for fiscal our call. morning, discuss and you quarter and and to Thank the results Minerals will fiscal third XXXX and our XXXX.

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

Operations be Joining Officer. in Chief the Schuller, for will George discussion our Q&A

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

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

call end XX, of our and during results the our of company’s now XXXX, results to the the earnings issued nine-month unless XX, XXXX period the You has reflect I for December XXXX results over business our in release X, The night in XX can to to the period. earnings will results in of reconciliations continuing company year September for reflect the reported XXXX only The are fiscal X, presented from available call The from otherwise fiscal the change also and to September Kevin. XXXX turn presented January and this September both fiscal these XX. fiscal the are XXXX outlook comparable last January XXXX in presentation, noted. find online. items in this release or operations earnings release which

Kevin Crutchfield

taking safety strong my Minerals join by in Thanks their workforce time morning call to I want for start performance. appreciation quarter Compass for thanks Doug. our another extending to today. to our everyone, and Good at

quarter execute toward safely I including to relentless continue drive on facet people continuous with appreciate I’ll and we’re now excellence overview safety. spend unique proposition provide a of job, a fiscal I operational focus lasting the a our XXXX here every then and value minutes few Our and and responsibly at Compass sincerely in discussing believe of performance, building commitment improvement. Minerals. everyone’s brief third their

which the As a period. recently on year change nine-month to end of our XXXX a fiscal year you call, fiscal September, a instituted reminder shortened those to in from December we’ve our to

guidance noise year the two full the to While us we complete of each year. the results forecasting believe more understand of around approach new will bit accuracy highway our by season past our quarters, improve financials which that the address this fiscal in within going enable Jamie change will bid beginning a created we forward this de-icing including detail, at

sales As This reported the Hurricane a in revenue through from growth delivered faced fiscal meaningful strong despite ’XX, volumes across was ago. in and the year improvement supply the versus earnings our a strained core release of fiscal impact XX% number headwinds inflationary period consolidated a year, both yesterday, shortened Ida. we our comparable segments chain, business throughout achieved of pressures, up we’ve

also a fiscal pricing year to we compressed in ended year by margins strong consolidated the lower of the Capping operating prior EBITDA was earnings For year adjusted that just X% also salt we and they period, average were fiscal to nearly prior quarter tapered were in prior quarter in $XXX and our year offset, operations. down sales manage prior production segment revenue EBITDA than the periods. $X the both to gains prior increased under as fiscal million the third position was than which liquidity up in in incremental salt our ’XX, year operating the period. a the salt year the period, in proactively winter. discontinued These volumes weaker drove down ’XX results, segment to while higher inventory year off salt increased Drilling million, Conversely, cash however, period. includes results, compared earnings third and from compared nearly levels after our X% into above compared fiscal

third during part the addition, disrupted latter the U.S. Ida In the of quarter, Coast. Gulf Hurricane

storm, always, and Cote out harm’s a stellar mine preparing remained mine for Blanche our in did job workforce of way. thankfully down As at the the the

a increased regain we a served to time, but serve geographic over to of North from Overall the bid bid ’XX-’XX balance with remained footing has However, America highway customers. This impact to year approximately recent during the bit optimized for committed weeks. million, America highway customers line a increased on de-icing we the Touching strategically experienced our the negative both while advantage compared relatively the Goderich XX% footprint sales which markets. quarters channels cost for were gains constrained year-over-year. also for handful North an pushed $X.X briefly a inland We remained operation. experienced due into a our relatively had The output significant out resulting next of historically disruption bid take quarter flat the salt chemical and and provider pricing volumes volumes bottom ability the the spurred volumes of to will barge do in and and compete to some season salt quarter. ultimately opportunities upon broad approximately business, season able to waterways of lost number shipping equal season believe highway prior we’re for results, along the effect the was third completion mining these across pleased revenues sales in

full while As this leading were season. bid the X% more the season, snow to part the of during modest strong a snow number of XX-year U.S., reminder, provided winter February below past the across a overall for early the pricing events events average,

higher the Despite this for to we significant year-over-year experienced pull costs quarter, XX% demand segment, revenue Ogden. the nutrition prior growth compared third period. plant we the our this products, our to incurred declined segment at year in due strong profitability in Moving to primarily up

earnings As a at to on the to costs lower we the due Ogden temporary most ’XX production inconsistencies and we the elevated result, third prior EBITDA compared quarter feedstock facility for to in recent through the reported year. our remained fiscal SOP harvest. manage continue operating

now range fiscal we’re we’re woods unit targeting these provide Jamie into lower While as a half more details to building we ’XX few actions as yet, million. and optimistic production how strategic to fiscal and those fiscal addressing Taking a we the our of the the shortly $XXX consideration I’d into headwinds our the our EBITDA see minutes spend $XXX outlook. year and with million view to XXXX Prior fiscal so, ’XX. regard second well will market the put costs place past of experiencing, we aren’t success quarterly future out begin we’ll and ’XX to enablers doing year-over-year of blocks continued I’m factors, during like of to this for his as results adjusted company.

for the maintenance nutrition have the the new Operationally, increase in enhancing term the plan American significant flexibility the new in form our deliver ago, North needs outstanding our in company. into throughout Goderich long to on main American we’ve financial second and come business made strides outlined mine made continues the of I debt, South call meaningful a of the commitments. expected several plant and the on sale earlier enabled with on decrease company reduction amount of micronutrient roadways, the Financially, efficiency which that strategic quarter year ultimately year months our the operating allowed assets of progress sections are mine older mine. the to to As

way rather but the as out new a new change in and mine adding year program, culturally skill advantage, sheet fundamentally we years where be cost and our believe of I process nickels laid exists on company engaged than by leadership, a foundation optimization the ton, efficient is not continue which measured focus per through and of mine plan, moat unique upon in skilled few and safety, market plan internal a prioritizing our that balance enduring with a execution can and result believe buttressed during and but building only The assets muscle, we’ve gaps by costs workforce. engagement. wellness further salt grow. completion still employee strength, per advantaged to We’re rigor of needed, dollars the will scale, this filling the from economic segment Along ton, thrive

development high support the to industry sustainable of the opportunity ownership recently announced While resource strategy our be current we’ve inflationary growth, XX% underserved short-term from we to project on million introduced ton time accomplished a headwinds months isolated for and brine and capital. two in that as upon short markets, I’m brief To long-term secure brine since or environment begin exciting milestones business. our the Lake. organic operational announced provide these believe lithium on Salt pleased stream generation growth compelling already the core return within with counter-seasonal already the seizing Both fire assets allows or progressed such privileged Both a retardant on next time, first a been for namely significant lithium issues, approximately only that place we’ve assess stake might at to opportunities and battery options minority It’s the ventures forward a evaporation for business. our our plans we extremely leverage solar four production balance in and our of infrastructure X.X Great our resource, during development existing de-icing operations to also frame. time

lithium dilithium industries. extensive vehicle of and in leadership battery advanced Crenshaw, Lithium, directors. electric both Financial battery-grade lithium viable has process technology met be confidence been a product appropriate ensure continued To the management senior have Lorin and a more Chris team whom proven, new and entry recently of with board appointments Chris our that at the we’ll demand who key Veolia, and These high Officer, Utilizing detailed and the this of look our Yandell, battery established process, battery-grade leveraging also lithium newest on a hydroxide both essential an in resulting we the and of new announced with Gareth conversion we’ve as third leadership ready in further joining navigate to announcement, roles As in resource level technologies. Head insights for include brings our industry, player Chief increased respected expertise Board successful testing we’re deep we hydroxide commercially completed monohydrate our forward Lorin brine to global sample lithium provider. established conversion experience our mineral, market Joyce, served incoming recently development and guidance of for by in in recent thresholds, pleased party I’m of XXXX. sustainability Gareth’s providing specification member, our expertise

fighting Turning announced unique highly recently and to America, generation evading environmentally ground more about U.S. this emerging Great friendly which company potential the risk. formulations wildfires In and retardant products, designed aerial tests developed with has the the today. equally are the magnesium specialized Fortress leverage Compass chloride properties North This investment be excited portfolio of Minerals’ retardant the business. a on recent in fire Salt by market Lake, products on the for to next than tradition production we’re of Their burn fire patent

for more disruptor Forest as the fires. they high we potential be to market, Fortress current a shown sole barriers and also in Taking source with XX% upside. the into nature meaningful effective Service, consideration at XX% to view retarding were entry

associated the to investment through doing chain, brings and capital providing minority in products supply something for procurement with expertise Our table successfully a process, logistics, also not capabilities but essential our we’ve just the been decades. our and involvement stake government

them the provide scale quickly such, opportunity. more help just let details a I’ll investment Jamie As and long In additional term few effectively. we on we’re the and minutes, confident can growth some

through these, in continue as allocation organic lithium alluded our July. needed essential it became we strategy, that announcement like company’s we to evolve clear As portfolio to historical back capital we minerals to opportunities reassess our our growth in

for value. our higher better leverage directors has shareholder quarter, a ultimately long capital use approved reduction and dividend As cash supporting third of for we flow the also the is and lasting believe what enabling our creating us yesterday, of in strategic operating growth board to term a announced and

Importantly, market. also is aligned yesterday’s the general dividend dividend of peers the better with announced and level yields

the evaluate sustainable an to capital investment earnings strike will business business. model better in that was our basis Going supporting forward, allocation towards of on strategic position to the to board to for I inflection effort an past believe fiscal this a needs company and truly returning year an company’s point between recalibrate cash We’ve our an ongoing attempt taken in our margin measures business shareholders. balance the to continue with needs our growth.

Our also to We’ll this concurrently core strengthening sustainable. committed leverage balance work growth We and and sheet path increasing morning. assets production I’ve focus clear. more protecting business opportunities continue remain high this forward to healthy transformation the a efficient lower is capabilities our become through and to here while outlined on

Our aligned senior board strategy. are management and this with team

our encouraged will be our in for Our for investments, discuss of people are Jamie? performance, to on can financial over successful execute it, turn recent XXXX. benefit I’ll ready our by we that more detail creating With that, stakeholders. in now who Jamie, and and Mineral to outlook the Compass fiscal all I’m momentum value it strategic year

Jamie Standen

more our bit segment discussing start color I’ll XXXX the year a then fiscal few everyone. allocation our Fortress framework results comments provide and onto investment before on I’ll consolidated regarding outlook. with morning a moving capital performance, full before our good and Kevin, Thanks

in higher elevated Hurricane reported are current we sales approximately our Kevin XX% a operations offset and EBITDA earnings unit Ida. as income basis highlighted comparable XXXX, the well line noted. year-over-year both by period, our reflect were or otherwise in as change discussing segments, earlier, consolidated and basis sales operating increased as volumes a unless year on costs third and pricing top due but from we’re for As results increases as continuing to release for declined quarter the and On impacts those revenue adjusted our all fiscal today

volume sales with pricing fiscal segment XXXX, both plant strong and the segments increased to in nutrition achieved the period our nine-month in segment salt comparable company our growth in the XXXX, For $X fiscal line income revenue prior compared versus compared top and period along approximately and respectively. our XXXX uplift, to million period results. consolidated by year Due this EBITDA prior $X million to the adjusted higher were operating both in

compression saw costs as same segment. over both primarily SOP the is we highlighted the salt lower to that for However, inconsistencies prices period the previously, This margins related Ogden our EBITDA and in at unit operating as with our we feedstock production margins compress. associated facility well

for cash to $XX generated This in flow flow free XXXX, approximately of cash from pleased are about report free operations September $XXX cash nine discontinued ended the we includes million We that from flow. million months and operations. our

temporarily increased the guidance, approximately change XX% effective in the $XX.X expected prior increased tax million, compared fiscal tax in to discussed prior our year to XXXX $XX.X expense million our we to fiscal As therefore our rate in and year period.

taxes not expected cash our rate the impact However, period. this to is effective tax XX-month or typical over

sales an our at third XXXX were selling million, of of This X% improvement sales quarter due segment looking in XX% higher XXXX, $XXX.X quarter the Now from XX%. million up $XXX.X was results, total increase to and third approximately salt higher volumes in prices. the average

pandemic. to logistics the in was by the quarter Ida have volume the These of increased Our Cote slightly XXXX, Blanche by at consumer impacted and demand seems quarter effects compared during to third offset Hurricane volumes which were sales typical industrial on as our normalized mine Louisiana. to negatively levels more when gains

the to fiscal of first split This million impact sustaining expect was and and segment not sales third was in While shipments into to mine its customers provider salt waterway delays can’t revenue XXXX. approximately $X.X we perspective, translated but evenly means the our quarter inland to directly our be affected, disruption push de-icing customer not between constraints. cost we chemical also some impacted, lost From barge to margin certain recovered, this of experiencing sales that a to fleet quarter. due negative only

a de-icing when salt to due by were in strong rose approximately year-to-date year X% partially period, prices. year increased X% C&I in the salt increase volumes average a $XXX.X by the primarily highway prior XX% during XX% a from compared lower to weather XXXX, prices. approximately to salt million prices volumes, February to million winter On in de-icing severe salt sales while compared segment period. $XXX.X of highway lower impact prior important the average month segment the that sales our prices mix highway comparable XXXX basis, sales driving drove significant to fiscal For X% offset note It’s

were business. the quarter. year while ton, the for Operating increased in at industrial that $XX.X year-over-year the the EBITDA segment $XXX.XX to selling ton segment $XX.XX of $XX.X third in third compared prior million price for inflation-based million salt per $X.XX For to while quarter, earnings prices million approximately quarter, slightly million in due the and across groups most or quarter X% de-icing prices highway versus product totaled consumer for totaled salt higher per increases $XX.X $XX.X our XXXX to the

EBITDA respectively from mine mostly third quarter as approximately X production Our compared contracted our manage of well to Hurricane the Goderich to XXXX, to due as the points and margins tapering percentage and operating inventories X impact proactive Ida. the

Ida, impact Hurricane were quarter. XX% EBITDA and for margins third the margins were from segment Excluding XX% the salt operating

salt and and average million results. the For $XXX.X XXX XXXX earnings period EBITDA XX% by margins and results, the to respectively lower XXXX, down operating labor segment increases $XXX.X of period XXX basis due C&I operating operating generated were to compared of plants points were EBITDA Fiscal at in margins our some highway basis from rates primarily prices, points shortages. comparable down XXXX fiscal million, XX% of driven selling lower and de-icing, regional prior

markets. XX% nutrition average an by and sales driven selling delayed our by territories and $XXX.X XXXX was quarter weaker of at year XXXX period. quarter application western X% reflects volumes wildfires than Turning in due higher and last the season segment, in versus higher to year-over-year, higher XX% comparable application certain again revenue was pricing price year key impacted other revenue prior to XXXX million. sales $XX.X plant our volumes Fiscal was This third which our a the of increase million, in

strong and were XXXX. SOP to North the compared down see in the million our nutrition pleased third demand continue $X.X are quarter and $X.X million XXXX. earnings We to Plant of quarter we to in continued to see for average Protassium+ improvement to down operating price our approximately $X.X compared EBITDA second X% sales America product, of million was

XX% XXXX. For to XX operating last approximately compression, versus our significant while margin X% third EBITDA compressed the points experienced quarter year year, quarter, also by margins going slightly this to negative from we percentage

For fiscal $X.X versus $XX.X while comparable to down $X.X EBITDA to XXXX, $X.X million was operating XXXX million, earnings million were down the million period.

continue third we the Ogden elevated expected, per-unit feedstock our worked As costs to through the during impacting see production facility. operating as quarter rates at inconsistencies we SOP our

the While are year, optimization start half costs declining XXXX our start feedstock of this management second impacted fiscal expected our and plant the these efforts results the flow elevated proactive fiscal to throughout financial short-term to in as P&L. through

upon Now announcement comments to Kevin’s a like switching of would few the gears, I investment our building in Fortress North regarding minutes strategic spend America. recent

excited are We extremely about this partnership.

ultimately organic meshes market the offer has both a producer. business for of developed. the the one a to company, well is business agreements. Lake Department been entities the importantly, primary Great market chloride already next long use Ogden Fortress and Notably, in brine highway competition. advantaged the with Fire XX% Protection, the of between in these Service, products business both it American North served the ours U.S. a consumers. five-year are approximately has A from multi-year anticipate leveraging de-icing Management, be market into average a gallons improve similarities approximately of to with scale which million Salt growth, The produce estimated historically retardant that global historically keep hungry counter-seasonal to U.S. largest government terms major a Forestry the is fire and of three and used opportunity agencies under retardant expected to Land our product business to usage, business XX% have has just facility. generation retardant for partnership Based is Fire and breaking our should we business, represents fire asset and our opportunity we the Bureau data American de-icing forest during nature to our at disruptor Fortress’ a of lower North profitability XX and input we Their cost model of competencies, of more the of by our The months, the Fortress material retardant with safe. that year. core selling summer potential has the line market gallons in Ultimately XX% a is earning sourcing many to commercial fire our high per in magnesium aspect fire period is with usage to on logistics our retardant of has believe enable people Through also us quickly. us. The represent million raw of term formulations California and optimization from roots XX we their

As debt investment efficiency Minerals; and this sum to the our a flexibility a and are to unlock purchased of resource foundation regarding XX company briefly salt earlier recently and The organic existing flow additional been the expected for To represents some nutrition providing divestitures point growth this high-growth I’d potential able of would and improve how stream. also allocation our discuss allowed core cash priorities. opportunities growth. production year our EBITDA. our again opportunity Compass in these like priorities: financial and chloride flexibility, in to and lithium against reference, underlying the the to to growth at core framework it current our these market remain to foundation. of base addressable magnesium strengthen we’re our times that approximately of maintain market, operations, for perspective and build value I unlock have we Organic is at the four now upon like feel capital our earnings growth are This to leader we announced return invest These key opportunities, executing have are while valuation has such the that XX% additional to to potential productivity shareholders. high up, plant framework. sustain businesses and a was offer capital given increase term Fortress production businesses additional are this however, company higher expected by investment from us and that of when generative, believe outstanding us to incremental asset long opportunities and provided opportunity sheet, embedded returns. advantaged businesses shareholder value reduce with each allow as base more the balance the the

Over to the provided lofty market last was have of terms well payout. decade, we and a in dividend levels above shareholders. It yield

As opportunities us, term. of long we have over evaluate in as simply of returns risk-adjusted generate the we ability the front investment such XX% be the Return in excess can’t believe this we ignored. cash-on-cash levels to

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our success a operations as covers discuss to months continuing like This would I outlook and capital company. only plays long forward, term of represents looking the and business. guidance fiscal outlook XXXX allocation in and the this our ultimate role XX our Now

optimistic As into term we the about XXXX, to business. overall head performance fiscal continue the of be long we

improved be expect of year, salt offset prices. and higher as and costs We segment generation deliver first average revenue lower lower volumes by the more fiscal strong and sales slightly shipping half sales handling during the will will EBITDA the than

handling segment $XXX It the and We the important revenue half. first $XXX bid salt note to $XXX to during expect EBITDA million costs increased million of to summer. highway throughout million that last is of season materially million $XXX and shipping

increases prices those costs certain captured. of into in expected transportation build able While bid markets, we were of those to most our were some rising not

costs, However, lower season impacted sales should should we and bid believe our volumes these recover of similarly we of the our ’XX-’XX volumes that segment, during costs sales year-over-year next were consistent current half be is anticipate expectation however, begins increased fiscal that XXXX; all during to competitors be plant we able nutrition year prior have significantly by the first spring. customers inventory sales half at second the In pressure levels. to on The demand should recent rate is XXXX. being us in which half of which number prevented price to to from feedstock value-based we has first levels fiscal able volumes; have inconsistencies improvements putting XXXX increases fiscal same a incorporated unfolded, however, with in compared our margin replenish drive which market strong our

adjusted value results. and On our a $XXX this and million, plant that fiscal recorded range EBITDA unit of costs, on of will million backdrop running nutrition $XXX business for expect consolidated this every between $XX run and elevated for XXXX. ton. demand, well our expecting long first Given price, which and remain includes will million optimize the a in $XX first the expense to million fiscal fiscal and to We $X.X add-back the be our in half as $XXX to half as of we relationships sustainably ’XX are first basis to customer expectation of rising quarter transition XXXX, EBITDA the to million million shipping handling $XX of continue revenue million, focused balance we executive be of for expense,

items. corporate Now a few

million is for to million. estimate expected $XX $XX fiscal Our be interest expense ’XX to

plants, development our and of include our appropriate as costs will pilot Additionally, the corporate related the project. segment well Ogden represent the approximately onsite the in lithium $XX staffing other addition end to for engineering, million. resource expertise of expenses operating as These front

million a million range of approximately corporate total expense $XX for $XX and to XXXX. results guidance this All other fiscal for in of

efficiency, approximately This as to projects of are on forecast reliable ensure long million term cost capital spending maintenance historic additional Our approximately well $XXX add fiscal benefit a our level expected $XX spend levels XXXX. to but $XXX just is structure. provide that ongoing for as not to million safety, and our million spend capital long-term production of incorporates

million well approximately businesses. We several lithium to barge to assets, extraction $XX as investments Blanche approximately dock, both expect spend as across enhancement other $XX our million reduction Cote cost efficiency and on upgrade smaller

now XXXX, flow ratio and fiscal to X.X expected For fiscal cash our is even, EBITDA. XXXX around leverage expect be at free net we to to end-of-year break debt times or our

in for on is imperatives unified entire out strategic comments, and the focused As the against his Kevin laid noted our company. we’ve organization executing

out to our As challenges and the in we maximize that, our we allocate shareholder Operator customers help session. With Operator? continue designed continue is that ask and portfolio to Q&A way minerals essential begin optimize I’ll solve the communities, for to our to value. to capital build existing a nature’s will assets

Operator

David your instructions] line with Deutsche is [Operator open. Begleiter Bank,

David Begleiter

Thank help morning. the you half QX good Jamie, earnings first for with Kevin, on guidance, the both us just salt the nutrition? versus of and QX you, can plant cadence

Jamie Standen

with start nutrition I’ll plant quickly. so Yes,

March think second be I the that the quarter, for the a volume little stronger for in mix first quarter. nutrition plant bit half will in

quarter, weather be our strongest, EBITDA, that’s stronger second nutrition. winter as and our to salt you occurs. our going the quarter as quarter first so drive see those relates profitability also to where and to unfold would see first distribution quarter--sorry, weight our Then Typically profitability would I it so first that March quarter is quarter, side, of to obviously would second You’re quarter across going our in weather you’re the is so the see plant going XXXX. stronger on pull-through second earnings to that demand

David Begleiter

Very helpful, Jamie.

a headwinds second mentioned thinking little also of in about you half versus these What that half? away. plant are half should EBITDA first EBITDA some nutrition, for Just as the in cost second segment be other go you better,

Jamie Standen

expect we’d the to maybe be of XX a stronger XX% stronger, bit the so EBITDA Yes, second in it to half year.

David Begleiter

Very you helpful, thank much. very

Operator

Zekauskas Jeff your Morgan, JP is open. with line

Jeff Zekauskas

coming you Thanks plan injected you’ve us EBITDA, in $XX that something the tell very business? or the do the revenues on spend to about much. and or Can you year, Fortress’ they into expect what million what

Kevin Crutchfield

Yes, Jeff. take that. good morning I’ll

the overly addressable in transparent market, about we that what documents it’s to I going gallons. some expressed about materials typically be not in mean, about the Fortress. there’s talks We’re think

so you the but proxy that we capital coupled enhanced think of base using for entrant, you a us, give works, inviting like mag the how source the based We’d for in that be that’s using Obviously just efficacy the--not away nip the just the environmental to product last direction. source of documents be marketplace. current market for, the terms new retardant I The start at share. just in a on to sense what to time. current of the give process over public, going for I a imply there source this chloride provider is examine, we is would there Over are a would Then sole long sole in when sense retardant, to it’s very their think and a its the XXX% our the at to Fortress, as just market stand mention fact market has to you sensitivity, is out of ripe sole a on term, that look it’s to thing you provider guide business. and you material decades, that with it’ll could that the they’re of up that

airbases, funding these mixing set we so forward various sundry equipment, business. accelerate equipment, operating You’ve infrastructure did, to etc. up was and to the That’s what it’s stand-up of at got that trucks, etc., the provided

Jeff Zekauskas

your are of do partnership? what venture, my to for partner and expect be Okay, anyone the partner, lithium with to would your follow-up, going or if extent in you you

Kevin Crutchfield

I know expect. would don’t we say I that

in are technological sense, on focus in trying effort to and from, a to making any right DLE. What project. We’ve appropriate the makes entertain structure-agnostic decisions standpoint absolutely lithium on around a that de-risk brought move ahead some We we’re continuing basis. talent obviously make term and help try is decisions, selection we’re to we an to and so partnership foreclosed on on that to the long if value, yes, we haven’t focused now will advise and say, good

Jeff Zekauskas

much. Thank great. so Okay, you

Operator

question, a Jackson one telephone Capital your is please ask on Markets, star, to press your like you’d BMO keypad. line with Joel open. if Again

Joel Jackson

gentlemen. morning good Hi,

Kevin Crutchfield

Joel. Hi

Joel Jackson

Jamie, have year, a pursue. flow with free cash you Kevin, growth this want breakeven Hi. opportunities lot near to you of

to going the balance equity into put capital to prepared a issue next have you the have want? do targets to you and these you’re four think How to are lever while, times get sheet. much projects little you You

Kevin Crutchfield

criteria addition in what cost to doing Then terms we early or whether we’re projects own of the be process making some round precisely we a able that thinking partner next that, in some the to paying of have the of by agreement in that funding, how to to good we downpayments next think the of over rights speak as not, total types I we go terms way want performance a curve, efficiency would sometime some engineering of of where XXX% have see production, mentioned, it. are reduction Then will under more lithium, of etc. parts we worthy expected for so irrespective on the terms that that goes. the in are of Yes, business on towards of to capex years, subject total certain Fortress other internal of expect in dividend and Jamie in fall and long we and the just we couple think have summer, to next of of

maybe on what we financial in to from I bring flow raise to the don’t we to I that wherewithal. that. whether answer his or can take to the or debt JP want have examine some partner equity, do as sense that makes we specific also think sufficient Morgan, it cash would have markets mentioned extent a fund, to it Jeff don’t question a in fund

the I it future. will conditions be in think based

Jamie Standen

in so if go check. go salt I expect toward nutrition XXXX, and keeping may, add improved just will in way we XXXX long we significantly a that profitability that, as and Kevin, both leverage to into have--we I’d plant

forward, with in partner should improvement be as at or going the view level particular and course, a also up to X leverage. investments and below partner to years against to focus timing we going a the able these a without that do the that flow business our of lining is that all stay cash My raise is so times make difference, on stay couple necessary. be Of with the next that does that would debt over matter improved the lithium of side,

Kevin Crutchfield

business And too, Joel. the improves as

in leverage be think term. I what ratio target and Jamie optimal the mid-cycle commitment that’s for and that over I the turn long we’re our think us, towards continues steadfast X.X trying to are we that to manage

Joel Jackson

and you Okay, and at salt third Goderich tapered some production in looking the strategy, quarter. your

where the rat other Goderich and volume market targets target, be your lot. Looking as running increases taper got operating year, Goderich will goal order you the with regions been, sold hit to Is keep rates The as could adjusting you much see to year? I have I Kevin, are not like believe, it extended high and or question operating the award at goes, operating looks decided to it you’ll here keep deal let much a things you target? looks and like at hit to or since every Goderich you goal, to salt, volume the want in you as you Goderich you which want your Is it at that bids of running you Goderich on. how run volume you came this rates, increase this even the how harder, to ask has some strong and is,

Kevin Crutchfield

ideal this the all made production Joel. but time, to A in run out year attempt we Goderich marketplace. better there, like balance in the lot In questions. world, choice obviously you’d packed the Good an an to taper out to full

the traditional what long on we share we’ve occur of the inflated basis calibrate term the remain I to perform, to served not we us it caught to every will do kind also the on production those steadfast market forward, be margins but I costs that logistics given what a to future. we game a name execute raise that re-gained that But of we’ll state-by-state also now but EBITDA them. have going we that three-handle want revenue pursuit term, price the have here be side on may to is, to, but view the that ready gain, our recover the across that of cost this continue our balance on is think rightful is way our share, this long those market, so needs side in in certainly and on engine but can the it we’ll that based what Again, we’ll wants. and total out market have our confidence sitting year,

in April. strike don’t where season tons to try the goal in to to We’re that to price The so places not is in coming trying going bid near balance. term up starting jam they move belong, it’s

Joel Jackson

very you Thank much.

Operator

Chris Shaw line Crespi, is your Monness with open.

Chris Shaw

Good morning doing? everyone, how are you

Kevin Crutchfield

Morning.

Chris Shaw

extra you some was, magnesium big, does the currently--I but your chloride other mean, around, it require customers? little for to would there? me ask, magnesium of kind from Fortress I chloride color you lying you Could give you Can it diverting that a process lithium more? like opportunity pretty of seems that If have be

Kevin Crutchfield

it the Fortress we so of actually assessed there we business so for of base. I’m sub-XX% sorry, it--and there constrain we would accomplish. now, what from so way needs mag actually away produce and for Yes, question? volume to to sort already, chloride have our existing market and easy That’s we supply fund--or to it’s part at doesn’t of any take extra us production have was doesn’t first us what the in hypothetical customer what capacity the share, XX% it

Chris Shaw

go I processing you, was require just curious as chloride? or to does would additional any it mag by this directly them

Jamie Standen

out Yes, bases. so mixed and it’s IP so It proprietary their that and represents would and are to so ingredient. blended, kind product and it’s gets Fortress just use, XX% an ingredients of final that blended of or shipped the it

Kevin Crutchfield

an again combination, view the mag and at needs based you organic easily When we this their make look are because opportunity this as we supplied. chloride,

patents have These and around, expertise the in IP the table, and which process the so so that know is it’s cold to so considerable. they relationship in think business a long approved firefighters very you will stages obviously various ex-U.S. new start can terms terms and of--some agencies the as blends, before for it things with so all doing we opportunity, are we’ve these are they of they over We as and to already on we the well. couple lithium, at government in bring a of fire material this is is them have phase service governmental the the pretty to a to handful get that with the to for time, the these them of we supply dealing helpful runs more if think board synergistic been well, good moving EBITDA this of that logistics, year something we of core are of on that process putting approved an are its in type way and growth they well at and the handful organic in next like

Chris Shaw

guys while, I Got nutrition of we’ve I question, can think quarter do in consider? been these used what on tons to just a it. or XXX,XXX days don’t consider plant ask that so a what normal, think past, business? If you know it in guys the a potential, there normalized maybe as volumes but do you you I

Jamie Standen

so it historically. that, a--you It our XX% Yes, to been XX% the be XXX,XXX continues pretty consistent be can to market and tons, typically of fluctuates. that’s know, share is to XXX,XXX

Chris Shaw

changed of of you? really droughts just--it’s just it’s to year year market, still the sort or just guess, because have in nothing’s what I volatile, So

Jamie Standen

grower, for can on There can example. know, the They discrete decisions It to in-product make mine drought can conditions an soil almond be. Things be and--you it tends for depends periods that vary. ebb it a market so but going America. always--it’s North long XX% and be flow, in ton time, of to share over bit, little XXX,XXX our of prices to to that XX%

Chris Shaw

a lot. thanks Great,

Operator

now at like for Crutchfield closing Kevin the There are turn to would no back this further time. call I comments. over questions to

Kevin Crutchfield

again of the participating for number financial close by past today Jamie to everybody for strong and stewardship thanking wanted the years. Thanks his today, call I over to

anyone’s. business been of a than welcome markets I’m starting I and senior management and the proud Lorin team. as leverage Commercial at upcoming Crenshaw his against talent Officer of role a key pit Chief to company to Officer. a into him XX our knowledge he announcement Chief forward seeing the looking He’s when core for more leader transitions we in years Jamie’s up role team Financial of would to my at As intellect I contributor said next our have recent month, I’m Minerals changes, on Compass and

with We continuing very along engage the future here of today. way. to Compass at listening to look forward you Minerals excited each for our Thanks be about in continue to and

Operator

quarter the concludes third call. XXXX and Compass This your earnings for Minerals We fiscal participation. thank you

now disconnect. may You