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Compass Minerals International (CMP)

Participants
Douglas Kris Senior Director of Investor Relations
Kevin Crutchfield President & Chief Executive Officer
Lorin Crenshaw Chief Financial Officer
George Schuller Chief Operations Officer
Jamie Standen Chief Commercial Officer
Chris Yandell Head of Lithium
David Begleiter Deutsche Bank
Seth Goldstein Morningstar
Joel Jackson BMO Capital Markets
Chris Shaw Monness Crespi
Call transcript
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Operator

Good morning. My name is Abby, and I will be your conference operator today. At this time, I would like to welcome everyone to the Compass Minerals Fiscal 2022 Second Quarter Earnings Conference Call. Today's conference is being recorded, and all lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. you. Thank Instructions] [Operator now Head turn Compass of would to Minerals. conference Douglas Kris, Investor like I the to over And Relations for Mr. Kris, your begin you conference. may

Douglas Kris

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

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

the our call Operations Joining Commercial will George portion in for Yandell, Chief Standen, the Schuller, Lithium. Chris Officer; and of Jamie of Chief question-and-answer Officer; our Head be our

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

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

March quarter discussed I during year-end call results second September corresponding results You company's available call reconciliations quarter The will call presentation, operations also fiscal second comparisons presented last All this XX, or to turn and which Kevin. earnings release the and both fiscal release unless XXXX. only XXXX other in ending this of in to the in noted. the XXXX are items can otherwise night our consolidated to of pertaining XX. of over cash fiscal The and now earnings release the the the fiscal condensed change our December results to during period in previously our outlook reflects issued refer the find continuing business than XX, from reflect in online. announced earnings XXXX year-over-year earnings these amounts flows or

Kevin Crutchfield

actions assets. as good our and today. call, progress make taken we join of against morning, our Since for continue taking strategic everyone. we've Thanks, core a Doug, last our number to and Thanks plan time to prioritize

final the South American our First, business announced Brazil. our completed successful in chemical strategic the in previously we step market the of sale through exit from

project, We work ultimate result. also capacity expected lithium production annual development continue advance a its as on increasing our engineering to

total addition, new member, more than decades Dowling, proud In extraction who to board Ed Compass we executive our a tracking our that incident I'm to Minerals. among rate, level best this XXX,XXX total of lastly, hours. exposure welcomed number board and began And the for our quarter safety performance we or case brings experience three of share past was injuries represents minerals very which since TCIR,

throughout you finished improvements our just many over of one, safe have company. me and safety no more the continue leadership to priority a the and to well-being prior environment with we order is TCIR the team that quality of see provided quarter. risk reflecting optimal life. healthy higher heard exceptional help in of from and an both emphasize work safety ensure every quarter on a second our minimize before, to training than and employees, As focus solutions year places engineering We a We're maintaining safety the than and behavior employee XX% and improvement of

also quarter industries to still mindly evaporation results late challenge. Of and through with other which continue fiscal we business. grapple supply We're quarter without headwinds our at certainly production our to sometimes was inflationary and across pressures its The not facility, across ongoing second severe, Ogden, Moving balance fuel produces managing these details through [indiscernible] [ph] persistent will XXXX we numerous to the related With announced our second believe Ukraine, expectations. to chains, the manifest surcharge solar each unpredictable issues yesterday. products. while the met challenges themselves to both have production quarters, not SOP We the or remain year. recent potash continue levels these and during of sulfate in Ogden premium in shared of fiscal crisis soaring quarter. our due We they companies

every we operating we're impediments executing landscape, on control, their operate. serving are facet focused the our impact of supporting difficult potential. our businesses, the reduce employees to the our and privileged is maximizing profitability within to remain X,XXX to not customers the and businesses, team While communities Against where full focused our these management our of realizing operating strategies on nearly cycle,

normalized levels With challenging we'll more forward, I'll driver each continue I'll discuss framing, nutrition manage actively of second to and segment through to profitability value business opportunities Then in a steps times intermediate-term minutes summarizing plant performance. our briefly an seek profitability high-level now and XXXX the Going navigate to these our salt toward business. successfully few level. to effort quarter pursue spend taking fiscal that and of we're short our production

opportunities. growth Finally, update progress a our I'll provide to efforts lithium brief our on

approximately in yesterday, business. million, up year-over-year, was quarter volume salt second by our release $XXX driven in As earnings gains reported revenue our primarily X%

by in While impacted and pressures our salt was the profitability our showed primarily improvement, top on segment distribution production challenges referenced continued inflationary that line plant continued and year-over-year nutrition previously. in negatively results I production costs

and XX% consolidated normalized XX%, approximately for our margin declined segment, an year-over-year in reflecting As by our believe quarter on our salt is adjusted pricing to bid result, volume, this unacceptable season industrial revenue despite American relatively growth substantial by considerably reflecting North of and what In as businesses. approximately earnings the business. million, X% commitments of grew winter sales a entirely in higher consumer the a potential improved EBITDA is average year-over-year I $XX it's EBITDA below our which adjusted season, second

resulting fuel by more offset $XX we've salt pressure and costs cost prices. second than up make greater area our than call in by products. significant anticipated we've escalating business, pressures seen component, our significant on earnings salt tonne basis A quarter been However, a connection this per total in growth cost delivered EBITDA a specifically million. for our product top with approximately the the increase oil encountered sharp approximately segment costs to for year-over-year salt recent surcharges line has handling was distribution during Transportation XX% of the XX% in where key declining last in costs

the XX% we allows our move services mix and our final salt endeavoring of just has [ph] highway same with the business contract intensifying railcar. we're costs, with working is highway contrast, since thing of quarter. the and we've To quarter North these our of XXXX, our within products during cost inflationary been America increased to vessels, structure do bulk bid In example, negotiations this contract to the represents meaningfully oil approximately we're the one transfers calendar costs distribution North rail pressures next is caused was of a combat last during continuing oil surcharges For for on in providers vessel, given loan the these price to X% and facilities not of customers these to XX% and and from season. the trucking The architecture service able In C&I until of these the surge category surcharge. America fuel across fuel those recapture shipping are to to production our XX% when required The each destination barges, all deicing that contracts reach outlets our customers. underlying segment modes truck, rise, season. pressures, segment, through bidding to recent as impacted cost the modes during barge pass prices derived pass inclusive

broad our costs see not expect our business. recoupment to we fiscal in to steps profitability next our salt until fuel committed historic meaningful While to levels North we're of return highway business do America within year,

season believe capture can up the production our margin. to to to that do profile Through our efficiency Goderich, also so. agility and requires, have work we logistics Our geographies a approach for where market the demand or ratchet plan as down bid we production and at we harness to is better now we secure improved

our We help fair expect for hopefully profitability. a products, increasing will thereby steps central these value ensure

market price higher levels. was X% lower costs high Nutrition million, constrained segment conditions $XX EBITDA favorable by offset Plant as Our sales the of inventory reduced unit our of global impact down by fertilizer volumes year-over-year and

our Our persist the year. for for available - these current supply-demand inventory expectation fertilizer and the is are to trends, likely in of balance sale pipe limited

to corn weather to the of the near site. or SOP SOP We've the and future to In on not SOP persistent adverse our production The both the impact controls production. weather solutions such the in pumping raising the process refining acutely the impact As against several based, balance [indiscernible] at years, challenge past short due last It chemistry specialized in we're production. limited long-term has events implementing the year-to-date. our in at our listing of potassium been autumn from been impact engineering and highlighted [ph] we've our salt focused the this further required - optimal while as for of not does dykes in It's our solar snowpack. our deposition upgrading also namely aggressively quarters, production potassium impact systems, over manage for ponds continues magnesia our several harvest lower to meaningfully plant levels an to some, chloride these our fine component term, and process evaporation expected the pressure product. the on process under have drought of

MOP and business the the been portfolio managed significant holistic cost process undertaken recent evaporation stable of ensure variability regularly ultimately of core closing of Chemicals our review minimize SOP assets. with do the offset note our levels. also of the end-to-end in our represents South concentration and capacity chemistry detailed For periods our longer in sale gears impact It's the term, by season it's a important Switching automating through we've we've lower-quality of effective another [ph] historically, when American management, to that of step to that feedstock to local nature Pan solar our production prioritization to to the so.

portfolio. region divestment completed now successfully the and businesses reshaping of that this we've sale, the of our of our phase completed in of all the With

maximum earnout business possible from events have reduction. We these American us the $XX.X continue Proceeds of related to two last our ICL our to to million sale also enabled recently year. received debt South Plant Nutrition a

substantial outstanding a potential the $XXX we from mindful beneath the or our come of year, total leg and to our approximately the annual from I've strategic the which XX,XXX upon lithium. of early the proceeds now LCE. turn XX, softness, growth to XX,XXX production reducing discussed. XX% increased of already fiscal remain lithium to currently next earning starting this or an metric net our from XXXX. March, outstanding, midpoint we our I toward combined factors roughly million our initiatives lithium Specifically, applying by believe to restoring at our In projected to announced have new is to will reduction by expect equivalent toward of profitability debt like approximately would due XX,XXX XX,XXX of debt carbonate December opportunity projection We XX% tons LCE we leverage of metric development well a leverage capacity reduced tons

entailed our infrastructure capacity or provide production valuation from FeOX, above rights in Additionally, approach by we to target updates recognize leaseholding plans in informed a project. XX,XXX the [ph] range shared wide place Utah, and has in to the These that come projected options. metric this with which production projects multiple operations we with our have along scope of by XXXX. to It's our scenarios annual with online phased commercial were Ogden a to LCE achieve already assessment of initial us important water the capacity tons engineering

hydraulic and the the by Specifically, our with side Gray east located the ponds are a Salt west our solar east connected both west channel. on of lake the complex underwater to evaporation side XX-mile £ of

include the to, to for advancement This which be development part much project conversion of our via a recalibrating XX,XXX either flows but DLE later lithium the limited a where for partners offtake to a the nature leveraging commence the current We funding and Including, is where benefit conversion associated announced DLE of Our provides the well a function DLD potential continue initial had remain salt, of of project LCE have scale FELX the a west by track focused east to creating our strategy analysis. engineering cycle assets, we quarters. fire privilege the range to designed power, potentially lithium the to prudent produce is existing comprise path outlay operating considered capital capital our of development to side, core production prospect battery level organic the designed our X. in cash the lithium a an are selection of summer time. the earnings of phases. extraction over two cost to by derisking these Phase hydroxide us potential of initial believe information has milestones capabilities requirements of identified provider, and X and nutrition, the demand Ultimately, production. forward derisked and coming closing, and inherent defer ton of on dependency we expertise all build estimate the life X. adjacencies of initial project and over and XX,XXX we on or will facility project a of look critical of confident level and with advance perspective. to helping It our facility. lithium on infrastructure LCE This we our XX,XXX forecasted and high-returning a on We completed serve profile. incremental our is owning an initiatives to rig. reach course sharing Production currently located. on growth we're pillars, our Phase from thinking Good the core It logistics occur announcement reducing phased is finance this our distinct into the include positioned disclosure our project the additionally project weather of opportunities a of advantaged will additional technology increased would the summer Overall, Phase expand portfolio our in processing to Phase side market processing financial increase completion remain capital additional allowing These Audubon from on the options. perspective lithium and and X plant phase of expect this would of - significant of approach previously likely assets in and widely grade during not rig. the In mineral XXXX. retardants. plant are facility is plant essential thereby also

toward we to the business of key drivers we of on plan with progress manage the environment. focus a of our highly As the current our key value stated each mitigating objectives, inflationary effects

fiscal and to I'm Now who financial over in outlook updated to XXXX. will Lorin? turn going our our it Lorin, performance discuss more for detail

Lorin Crenshaw

volumes on up quarter business, $XXX.X rose year-over-year. X% pricing second Consolidated Industrial Kevin. And Consumer pricing year-over-year. where by driven and consolidated Thanks, X% more $XX offset segment, XX% costs adjusted declined business sales nutrition America our margins North was adjusted driven and in to the favorable basis, profitability year-over-year, pressure XX% distribution revenue revenue a Nutrition costs within $XXX.X totaled within segment pricing. X% in to million, Salt $XX.X year-over-year, EBITDA than our by earnings as million line. quarter favorable and Salt declined revenue for year-over-year, From the segment and perspective, up primarily a of the fiscal X.X% or million highway up upward SOP sales production plant pricing higher by million were EBITDA 'XX, were and consolidated production operating and X% higher our the operating Plant Despite was On for margins higher where increase, our XX.X%.

Consumer and strength achieved non-deicing year-over-year, icing primarily Industrial season. last bid increased based year's X% highway Specifically, in X% volumes products. rose reflecting levels the higher on during volumes year-over-year commitment deicing and sales both

[indiscernible] implemented operating and most the production impact effects lower and operating offset inflation From on or Industrial $XX and which our on per consumer to to X% continuing of pricing. year-over-year handling million. response price. unfavorable in Soft shipping across inflation of our enabling sales in costs and roughly price to driven ton Salt unit business, reflected the declined relatively thirds selling inflationary costs per continue ton the due subside in of impacts profit year-over-year, to primarily In $X industrial as roughly to highway increase declined current million, fuel and quarter to broad-based and to unit related by through Despite our to rose shipping costs reflecting deicing primarily of inflation impacts the per year-over-year, overall drag Consumer to last cost decline sales handling reflect was a inflationary segment environment, ton. these of and while markets $X profitability. our a third impact The price, in The per higher higher pressures the portion surcharges per higher to product inflationary and was revenue, mix EBITDA drop this driven by to the don't increases and be the and two increase up increase fiscal categories, XX% of recoup or were results primarily Both approximately one XX% cost a expect and cash EBITDA by roughly primarily high geographic higher us costs, in balance serve through distribution mix. driven perspective, P&L. We by $X $XX X% earnings $XX.X cash XX% flow $XX.X average flat such costs, was prices average the roughly in year. XX% a

with various not impact second challenges to a slightly experience normal inflationary primarily factors average on our impacting in estimate compared weather of segment related reflecting operating on events during to experienced the North served average. above weather, that cost below America our above-average sales quarter and tracking the historical period winter markets, our relatively to market low profits ratios activity were profitability can within pressures commitment skilled Salt been during of snow and we nature our average, relatively North the states negative, Despite costs the to of XX-year severity as does the sales of not weather exact timing, and events net highway the despite contract snowing levels. our event, America our As ratios has quarter, Historically, drive location basis. several surcharge inventory our as of such the and deicing snow midyear structure permit pass-through the including Overall, municipalities commitment customer was

our segment. to the year-over-year million Revenue lower higher Turning rose for Plant $XX.X X% on to second despite XX% Nutrition volume quarter pricing.

and as than quarter credit SOP $XXX million the our on discontinued fertilizer impacting from dynamics products average $X.X debt a and down with of sales four price to at our we $XXX up earnings year-over-year, leverage year-over-year. down per costs times, offset sales of XX% the ended million, this lower perspective, volumes were unfavorable unit the $XX production and average defined was global EBITDA million from the approximately the of for rose prices. ton higher under supply/demand includes time. operations. fiscal sheet million, reflecting net XXXX sequentially From cash more XX% selling and $XX.X X% Specifically, sector EBITDA per was impact Operating balance net agreement, which with year-end our And

we proceeds which the to Kevin leverage to manage of below net through South were with sufficient to the to prior the the continue we debt commending applied of flexibility performing believe to businesses reduction, this sale to during there we sale profile. Nutrition our bank in with debt the Chemicals proactively combined Nevertheless, our coming related occurred related the engage in business, period, referenced, group what our our be which covenant are potentially. improving recent aim in April, both discussions As the will further American as months, immediately provide business net earn-out Plant South and of our American of

debt leg the we detailed as presentation. facility, an is maturities that often Salt structure financial $XXX Finally, and the our slide current the confidence us business expected debt of liquidity profile of of of to through earnings we underscore the that balanced our ultimate AR debt manageable the next summer, next our flexibility to maturity with capital of portion manage which have profitability give no deleveraging. restoration beyond of drive to of period end matures our attractive over as eight prior in securitization feature on quarter the accompanying Overall, ability our XXXX, with million of

balance across and resulting to the to yield the continuation the turning costs the in our our Largely surcharges volumes. escalation in due challenges fuel of of all transportation year. of outlook the higher-than-expected and production Now of in magnitude modes in SOP Salt particular, for lower-than-expected fixed order sales segment,

range our targeted have our by consolidated These only from $XXX We to impacts Plant million of be million. of productivity higher are to $XXX expected to offset projected 'XX lowered $XXX fiscal adjusted partially announced a to and range initiatives. EBITDA previously million million pricing in Nutrition $XXX

$XX down our introducing are 'XX guidance segment million earnings of second unit SOP from levels to call the with range our we EBITDA of our be the at facility. million half higher-than-expected expectation Salt adjusted and production that guidance range Nutrition February the to higher-than-expected outlook, $XX due half our second $XX of in offset segment substantially reflecting million, Specifically, by the Ogden at time lower fiscal and in sales our lower-than-expected expectation line adjusted the $XX in largely costs to pricing Plant EBITDA roughly February million, will

our challenging the drivers selling sales so inputs, direction through volumes the inflationary have of the of for cost facility, average to we we that to the year the among year-to-date. or initiatives heavily targeted on results, productivity weather the potential experiencing. adjusted same short In executing including the prices key that range oil the downside trend guidance, ultimate As we of pressures and the half face and market offset are current the the average around of are run, themes In upside a fall of our are on of levels, price Ogden operating balance pressures year. global we rise environment encountered have and the fiscal on or levels partially revised midpoint of rates dynamics consider yield of impact our including the the range EBITDA key weighed at SOP production first fertilizer balance

are in actions cost tightening addition in expenses. that's by and to allow, expected to also operating perspective plant from S&A a markets fixed prices we raising contracts taking lower belt in possible and where cost our where Specifically, result

our maximize to profitability million year we geographies if volumes and to focus areas with matters million our by Looking curtailing associated have remains basis. potential quarter. balance commitment further North reductions, may our our customers our necessary. leverage only season in to guidance minimize capital Industrial perspective, we continue to $XXX to continue when strategy, capturing a have to focus restoring opportunity From expedited we through In costs. production to is competitive lower by a to toward have executing sub-optimal are more that fiscal that regard which to higher and America approach that logistics it the million, our in and further natural degree bidding by further re-examine advantages the year, was meaningful carefully highway as year. certain this 'XX faced the recapturing our we pass and our Consumer With we provide to the With out mind, full flexibility though along deicing our this previously the whatever be on inflationary we business serving process year's even mix business, pressures on fiscal pass bidding need even to $XXX stated, Within for costs is will and into last to next and spending expect we where significant profitability entails where business, have experiencing. our recalibrating production is $XX inflationary by season, the moves in this margin our addition costs

of income, Finally, with U.S. against driven in non-cash deferred expenses have assets. additional tax the certain form valuation reduced EBITDA tax by year U.S. expectation allowances lower recorded the for the we

Our excluding effective expense expenses. XX%, from allowances is negative XXX%, the those year approximately and including a for tax the valuation rate the additional

back likely to are assuming turn will I take - those session. Q&A earnings our smaller operator our additional allowances two the that, the in it open of Operator? with each outlook the the tracks current expectations. lines in quarters, With line to to We for next

Operator

David Thank first you. Begleiter [Operator we And our take Bank. Deutsche from Instructions] will question with

Your line open. is

David Huang

Huang can offset on inflationary expect Hi, good to guess, pressure And winter? David the I about HDI for Dave. the for early salt is next you specifically, your thoughts when morning. first, This talk fully here you contracts do reset? pricing

Kevin Crutchfield

only natural or early morning. enough bid to take to recapturing at And markets more talked quick we I a think at value attempt the an XX% that also there's add to as want strategy make ones market And inflationary earnest is the by before, reposition the costs. our additionally, sense that is I of I'll in so impacted we've portfolio a these are don't us, those weren't about we're to part color. serve where our have absorbed. competitive that, may know, that about, into we that stab roughly the good season. to were some we And But Jamie Yeah, and only costs advantage.

So further up far. Any pretty setting we comment, things about are how Jamie? feel so optimistic

Jamie Standen

No, that covers it. Thanks.

David Huang

and will then in And unit also production maybe year? can thank half the you. second, discuss you trend salt how costs And the next into second

Lorin Crenshaw

of during $X in the to related of third operating was About terms to one particular you related What two that quarter saw ton. cost. distribution per delta about and a cash third profits this costs

We the expect back those in trends of balance would half the increment year. the for to the continue say, of I comparable year,

through upcoming the the in but not just restore indicated, this year. the reflected half of that Kevin to we bidding season, second expect As profitability be will would

David Huang

you. Thank

Operator

Morningstar. take from with next we Goldstein Seth And our question will

open. is Your line

Seth Goldstein

everyone. questions. taking for Good Thanks morning, my

bottom flat de-escalators there, fall we to fall the price have basically those line? if quickly in prices deals? the to in they contracts de-inflation rose similar your guess, all a standpoint, from how I ask, oil meaning next a wanted Just that see would to stay fiscal Or would are year,

Jamie Standen

through Seth, we relates through set season. bid contract I that would summer prices say the this to deicing, as is highway it will Jamie. fixed our

business, fuel winter, we capture capture variability, and there's Plant prices next for the bit about when C&I we of as that value we've business talk fuel would history some tend some to in fall to of prices extent or the surcharges that we the Nutrition, both the fuel capture over and recapturing fuel but a fall, fall, to surcharges price, through well. can Plant Nutrition, So benefit of hold that as our on there more When and meaning C&I you implemented sure.

Seth Goldstein

Okay.

us appreciate at And pond to such much harvest looking you future I works if do us really better give details potentially the appreciated. the within be year's will can better with year that weather do be production can't than any guess, Or but help production, I be think Okay. increase could to out details. turns SOP, can a the next to expected? impact weather system about you how

Kevin Crutchfield

of Yeah, sort the exacerbated and it terms. to the think drought lack And levels, Western and issue to maintain dikes, it need given couple We fresh mentioned been the our those flow issues season plans ponds I good of resolving tend put the to in brine of those into given to et water raising begin lake addition the in also cetera. in drought. by also access center does just continuous script to place things of in a season the to of by has our question. ability vary But

of of a lead out will - this a predictable, take reliable to we efforts it's production we're is to taking coming Ogden, believe longer-term, set but So the sustainable, going more that while. values

issues like to to color I Any do. a confident to of while the got George? But kind what we've work to take to think we're add around it's you'd that, going hands know our through. we and

George Schuller

minerals snowpack Look, that been the of we've it. majority persistent it's then whether pond whether referenced magnesium, drought last No. can it that And it's mostly out different you it's a throughout challenge. you few summertime, of a the types seen around at other time, in drop Again, factors think years. system temperature, makes those a things those highlighted the the really over I and wind, limited Kevin, which

it's majority we again, So I you. Thank drop covered but making the sure just place, it you think out of Kevin. right it that at the

Seth Goldstein

Thanks right. my All taking questions. for

George Schuller

Thank you.

Operator

question Capital our we next [Operator will Instructions] BMO Joel from And Markets. take with Jackson

open. line Your is

Joel Jackson

Good Hi. morning, everyone.

Kevin Crutchfield

Joel. Hey,

Joel Jackson

problems just thing on based never decade remember think CEO. Just in, hoping Kevin year. impurities ago, plant, worked, I lots every following don't put I prior weren't was proper. topic. had that the don't a XXX the or upon obviously, really Compass the you You I to mean, the SOP I right? if since of on with under And The remember get expansion, up evaporator. the crystallize

you're a the getting into yields in years still these plants, fix went later. you but on think XX not I

going what's face tonne been done? it is. sub-XXX,XXX just forever, way and to just And So that's we're have the to production

Kevin Crutchfield

Yes…

George Schuller

the of George is balance controllable Kevin's it's is shot adenosine operation. question this leadership - And no first operational our a mode attack reliability to chemistry that. required around really, under Schuller. that - But of [ph] went factors, Joel, of it and the look, plant. out I'll immediate we was upon efficiency was there's at really our take which

pack what back pumping I designed this and But I again, of reference term, and what our and longer systems. around might dikes, look to actually last, we the chemistry around the designs really what as holistic a Again, taken is optimize short And drop more on effects things quite long-term you are actually and the those a over minerals you trying chemistry those through. out end-to-end that the term done and focus is help of six bit on. we've as spent such the drought, have the some like. controls months process to more that or solutions. But engineering those So really around eight the when being snow profound and go how time optimize I'd pond a to both short on raising go effect switched say, we've pond and our solutions to really

I Kevin there. as well, it XX,XXX ponds do it's again, acres is years. - been is think several I say, you of our probably that. got this know hands out It's But around we've mild. So highlighted, literally

We've the make there direction. I to from sure So you again, system current been trying pretty hands to think do have which tons talk it those that MOP. about again, up. we it's are process around actually pond also our are. critical the MLP, from in and keep price heading stay a I and the got only of I-- what this do again, because we do right on of where But based high that mind augment when say, is numbers of we've into some on historically, that those in And out an KCL

Kevin Crutchfield

do. Hi, just is to plant let me do what Joel, add will that, designed the

the plant the what But we're buy side. on do to to call is, that or on. on it number the And have whatever to. is will inbound It the just out side kind wants. got it needed what been feed it's side designed fix feed you've And for. You control to working got we've that's on will chemistry is that's I what of to chemistry do issue what we the that upstream to it

George Schuller

and two one Joel, one year I'll - in that Kevin, too, do to it's is to everything process. more a we And mind, three thing adjust, keep more that, Joel, add

So with we entire mag the like run every time to process make in middle. SOP three brine month that pond actually salt from that months, you it or Thank to see to adjustment it the takes get don't one in it chloride to is you. being

Joel Jackson

Okay.

here. and lithium that up also bridging into Following

if understand to on lithium. are So the what necessarily the your into the the because on the we're East plan, about, not talked my I and about would you're how is of would two trying that play for now that's resources XX,XXX and West question I pond the lithium year-to-year on into assets, variability just chemistry And to the then so I tapping be that SOP the ton East going getting we with plant be, technology plant, bit DLE split and feed a different. issue follow-on then the part the into of and first plant. different right later the just because West talking little guess And needed guess, with layer

have You're And have will them, to which speed lithium enough around sufficient a going a - fed plan? questions not technologies variability? or handle consistent in to of lot the DLE be

Kevin Crutchfield

seen our second this Let we don't going to is don't one believe first, DLE Joel. through affect lithium We ions far, anything thus me think we've the of the tackle ability to technology. the extract

believe. say two side, sets what beyond don't know use likely. with then different And you I possible it's what So versus not East but the to DLE, of respect That's to that. it's West we

to side. case more want is likely think that But we use different is one DLE chemistry the Chris, add from would not that? technology you I to anything side to because

Chris Yandell

Thanks, Sure. Kevin.

we it, really, as And for look technologies. Joel, conversion two think, aspect different then you BLE side. caveat at of BLE an there's and I technology it [ph] do what to the

to carbonate. into to So or DLE to carbonate you hydroxide from can convert hydroxide

do get what just aspect. is some And Currently, our they out. and right? we you So They requirements prove that magnesium to impurities to rejection. running that, design So conversion stands speaks it as and a of you to that to lithium from meet really impurity. decide on pilots, well, DLE at look continue for the reject and really recovery lithium to alluded really the the the target

impurity we regards the technology. as solid should So own our DLE are additional the see think be reject usually DLE that. the that to both pilots designed the choices around magnesium, system of We path for with to

of at is the you also they our technologies, the speak informs to continued to rigor evaluation that look those what think process we're decision. I our assigning that but

in are the to the months options effective technology and be few final test the over of So of and next areas reliability. technologies goal proven both pressure is these our scalability

Joel Jackson

you. Thank

Chris Yandell

Thanks, Joel.

Operator

we will with And Crespi. take question next our Chris from Shaw Instructions] Monness [Operator

Your line is open.

Chris Shaw

whole of ahead season, average fuel of average morning, price or point, sort the business? it's of ton, maybe Good How either offset inflation magnitude, on surcharges everyone. Yes. you of get On the would bid looking in current to need are the increase transportation to salt, order at across on this book what your you doing?

Lorin Crenshaw

to, that start business, feel if go-get that we from ton be. at translate back you are. prudent Jamie, be We more, million like elaborate we as look price. respective to bidding ought would because we're to about at $XX there's don't But on I of least away on of be think we just could ways when we several operating get $X not into that I Jamie what and goals the per by think to well. us least. that what mix just profit you into to approach saying million about this back sort maybe I'd at the season. value and Yes. it's to about what our And our would elaborate feel for on where entitled the It's $XX it'd this optimizing would price

Jamie Standen

to the this of job tone a us, make it's are Lorin winning terms prepared Thanks, But in remarks up for serve. most the sense Lorin. strategy did And it our ones in logical season. the summing good his of easiest that that right

about it's netbacks. so ASPs. not And about It's just

season well about through the going on of per optimizing this our segment bid significant XXXX for a that could how that is portfolio we bid serve season netback shift that the in far. as and and the municipalities thus it per Salt we're every season. optimistic ton a or look. We're as ton And this whole bodes margin value focus will mean states ton And our last terms So in that I for from think produce. year the definitely go to we're seeing we

today We've got mine we The couple if that. bit, a down. dial it little thing running a particularly of that it toggle is willing great. back that to and efficiently mentioned remarks, we're other it to The up need in do do times to is opportunities prepared to and we've some Goderich toggle

very ton So on how to focused and optimistic again, per value and about season are going pretty bid the confident we're unfold. is feeling

Chris Shaw

provide of times different Or past, it. is is geographies static is there the - in things had a to any In - not that on net Is there? every that much it it color that the you back systems the that just is about talked many Is recently the need company Or transportation reason from sure that I'm get did thing? year What optimizing this away you companies shift to more can to something just because like go the that? back. and - you cost focus - that?

Jamie Standen

Yes, just a I just comment. make would small

up back Goderich it should, running got as we capable. as As it's

While we that, we recapturing share previously doing we had some that were were lost.

in zero can right really that feel the and portfolio that you on tons means completely most now we and We behind optimizing make like we So for the feel that's have us. balance the like sense winning us. the

Chris Shaw

it… Got

Kevin Crutchfield

markets pretty have portfolio and around and less maximize and now so Jamie's to a George that Yeah, bid would restructuring well. significant incremental worried advantaged concludes season of that see I about to team Goderich after expect his competitive this to volume placing point operating natural optimize tons

Chris Shaw

past, Looking excited all you of a your this earnings was I know there probably drop. upside remember on but potential, getting the lot think, in 'XX, the I around, I in - guys weren't

$XX. were $XX I'm you like did solid, next side. that it I pricing then the lot probably seems on thinking went whatever, from oil was but of salt - on well a like to months And the think also XX I think

different much? either you was is magnitude roll on really lift and going benefit that from are Maybe the that. they Why time just they're see seem reductions as that because memory of off as off. the So because there But - there surcharges the thought different I to to me? where know. in a I to the talked oil. about mean anything the or how didn't bigger contracts so down that in structured different it you way be about earlier, a have this would they to I if is Is would don't you this little foggy. my never does realize surcharges, roll going surcharge something this we're past or in be

Jamie Standen

our But price, a I price. asking, So you what bit it's had deicing of delivered as it were in to Chris. getting little fixed relates fixed highway trouble contracts, general,

like season. ton. Even were summer taking on been much, when winter has this sitting a now when look what like summer the right in obviously, a Fuel So We're Brent we the we at had we thinking during through an was get $XX were $XXX kind we're of crude than through bidding view of and wrong. Brent thinking the we're summer, well. expectation it we $XX, at about September, much in ton a higher anticipated. fuel as we last about fall crude it And would next as

price and season year, on well and really terms and this why have ability fuel XXXX. appropriate governments - recapture surcharges barge and on the our here we the understand, go process don't through they the run America. fuel margins on that incorporate delivered don't in North focus we and fixed into improving that next and on, It's The view the pass vessel have view bids and So on and that's important, base as fuel. as transportation, municipalities to it's appropriate have bid very a that bid to value our take truck we we

Lorin Crenshaw

there add, expressed... any those what savings is are prices would the Jamie factors came off, time oil plus I just architecture contract And could just number last of that hasn't offset the have changed. It

Operator

our Crutchfield for concludes back session I turn will And question-and-answer this call Mr. closing the today. Kevin now to remarks.

Kevin Crutchfield

Thanks, the keep forward, navigating again, we strategic updated. everybody, as we'll and each opportunity to with you We you. for appreciate engage and and path time feedback participating of today. you our continue do your value Thank really

Operator

for this you may now thank today's your participation, and conference disconnect. you And call. concludes We