Group 1 - Compass Minerals reported a quarterly loss of $0.39 per share, which was worse than the Zacks Consensus Estimate of a loss of $0.13, but an improvement from a loss of $1.01 per share a year ago, indicating a significant earnings surprise of -200.00% [1] - The company posted revenues of $214.6 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 2.89% and showing an increase from $202.9 million in the same quarter last year [2] - Compass has outperformed the S&P 500, with its shares gaining about 90.6% since the beginning of the year compared to the S&P 500's gain of 8.6% [3] Group 2 - The earnings outlook for Compass is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] - The trend of estimate revisions for Compass was favorable ahead of the earnings release, resulting in a Zacks Rank 2 (Buy) for the stock, indicating expected outperformance in the near future [6] - The current consensus EPS estimate for the upcoming quarter is -$0.16 on revenues of $212.26 million, and for the current fiscal year, it is -$0.40 on revenues of $1.23 billion [7] Group 3 - The Chemical - Diversified industry, to which Compass belongs, is currently in the bottom 9% of over 250 Zacks industries, suggesting that the industry outlook could materially impact the stock's performance [8]

[PART I. FINANCIAL INFORMATION](index=4&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited consolidated financial statements for Compass Minerals International, Inc. for the three and nine months ended June 30, 2025, and June 30, 2024, covering balance sheets, operations, cash flows, and related notes [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) Total assets decreased to **$1,537.4 million** as of June 30, 2025, from **$1,640.1 million** as of September 30, 2024, primarily due to reduced inventories and intangible assets, while total stockholders' equity declined to **$249.8 million** Consolidated Balance Sheet Summary (in millions) | Account | June 30, 2025 | September 30, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $79.4 | $20.2 | | Inventories | $264.7 | $414.1 | | Total current assets | $570.6 | $587.3 | | Property, plant and equipment, net | $773.8 | $806.5 | | **Total assets** | **$1,537.4** | **$1,640.1** | | **Liabilities & Equity** | | | | Total current liabilities | $265.1 | $217.0 | | Long-term debt, net | $825.3 | $910.0 | | **Total stockholders' equity** | **$249.8** | **$316.6** | | **Total liabilities and stockholders' equity** | **$1,537.4** | **$1,640.1** | [Consolidated Statements of Operations](index=5&type=section&id=Consolidated%20Statements%20of%20Operations) Sales for the three months ended June 30, 2025, increased to **$214.6 million**, with net loss narrowing to **$(17.0) million**, while nine-month sales grew to **$1,016.4 million**, and net loss significantly decreased to **$(72.6) million** due to lower impairment charges Consolidated Statements of Operations Summary (in millions, except per share data) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Nine Months Ended June 30, 2025 | Nine Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Sales | $214.6 | $202.9 | $1,016.4 | $908.6 | | Gross profit | $41.2 | $32.6 | $152.3 | $175.5 | | Operating income (loss) | $15.9 | $5.9 | $13.3 | $(87.0) | | Net loss | $(17.0) | $(43.6) | $(72.6) | $(157.8) | | Diluted net loss per common share | $(0.41) | $(1.05) | $(1.74) | $(3.83) | [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash provided by operating activities for the nine months ended June 30, 2025, significantly improved to **$204.6 million** from **$27.1 million** in the prior year, while financing activities used **$111.5 million** primarily for debt restructuring Consolidated Cash Flow Summary (in millions) | Cash Flow Activity | Nine Months Ended June 30, 2025 | Nine Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $204.6 | $27.1 | | Net cash used in investing activities | $(34.7) | $(95.0) | | Net cash (used in) provided by financing activities | $(111.5) | $42.2 | | Net change in cash and cash equivalents | $59.2 | $(25.9) | | Cash and cash equivalents, end of period | $79.4 | $12.8 | [Notes to Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail accounting policies, segment information, debt, and legal contingencies, highlighting the strategic exit from the Fortress business, significant debt refinancing in June 2025, and a securities class action settlement covered by insurance - The company is exiting the Fortress fire retardant business, which resulted in impairment charges of **$53.7 million** for the nine months ended June 30, 2025. Substantially all Fortress assets were subsequently sold for **$20.0 million** in cash[26](index=26&type=chunk)[27](index=27&type=chunk)[32](index=32&type=chunk) - In June 2025, the company issued **$650.0 million** of **8.00%** Senior Notes due 2030. Proceeds were used to repay the term loan, redeem **$350.0 million** of its **6.75%** Senior Notes due 2027, and for general corporate purposes[55](index=55&type=chunk)[56](index=56&type=chunk) - The company reached an agreement to settle a securities class action lawsuit for **$48.0 million**. The company's insurers have consented to and committed to pay the settlement amount[67](index=67&type=chunk)[68](index=68&type=chunk) - A valuation allowance of **$29.0 million** was recorded against U.S. deferred tax assets during the nine months ended June 30, 2025, due to a cumulative loss position in the U.S. over the last three years[47](index=47&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q3 and nine-month fiscal 2025 financial results, highlighting improved operating income from higher sales and lower impairment charges, segment performance, the Fortress business exit, significant debt refinancing, and the full fiscal year 2025 outlook [Consolidated Results of Operations](index=29&type=section&id=Consolidated%20Results%20of%20Operations) Q3 fiscal 2025 total sales increased **6%** to **$214.6 million**, with operating income rising to **$15.9 million**, while nine-month sales grew **12%** to **$1,016.4 million**, achieving **$13.3 million** operating income, a significant turnaround from a prior-year loss due to lower impairment charges Q3 Financial Performance Comparison (in millions) | Metric | Q3 2025 | Q3 2024 | Change | | :--- | :--- | :--- | :--- | | Total Sales | $214.6 | $202.9 | +$11.7M (+6%) | | Operating Income | $15.9 | $5.9 | +$10.0M | | Net Loss | $(17.0) | $(43.6) | +$26.6M | | Diluted EPS | $(0.41) | $(1.05) | +$0.64 | Nine-Month Financial Performance Comparison (in millions) | Metric | YTD 2025 | YTD 2024 | Change | | :--- | :--- | :--- | :--- | | Total Sales | $1,016.4 | $908.6 | +$107.8M (+12%) | | Operating Income (Loss) | $13.3 | $(87.0) | +$100.3M | | Net Loss | $(72.6) | $(157.8) | +$85.2M | | Diluted EPS | $(1.74) | $(3.83) | +$2.09 | - The significant improvement in nine-month operating income was primarily due to lower impairment charges. The current period included a **$53.7 million** impairment for the Fortress business exit, whereas the prior year had **$173.4 million** in impairments related to lithium, Fortress, and Plant Nutrition goodwill[10](index=10&type=chunk)[135](index=135&type=chunk)[153](index=153&type=chunk) [Operating Segment Performance](index=34&type=section&id=Operating%20Segment%20Performance) The Salt segment's Q3 sales increased **3%** to **$166.0 million** with operating earnings of **$28.1 million**, while nine-month operating earnings fell to **$124.4 million**; Plant Nutrition's Q3 sales rose **15%** to **$44.8 million**, achieving a **$5.2 million** profit, and nine-month operating results improved to **$0.3 million** earnings Salt Segment Performance | Metric | Q3 2025 | Q3 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | Sales (in millions) | $166.0 | $160.6 | $840.9 | $745.3 | | Operating Earnings (in millions) | $28.1 | $25.9 | $124.4 | $142.6 | | Total Tons Sold (thousands) | 1,544 | 1,483 | 9,142 | 7,804 | Plant Nutrition Segment Performance | Metric | Q3 2025 | Q3 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | Sales (in millions) | $44.8 | $38.8 | $164.5 | $138.6 | | Operating Earnings (Loss) (in millions) | $5.2 | $(1.4) | $0.3 | $(56.7) | | Sales Volumes (thousands of tons) | 68 | 56 | 263 | 205 | [Outlook](index=36&type=section&id=Outlook) For fiscal year 2025, the company projects Salt segment sales volumes of **10.7M-11.0M tons** and adjusted EBITDA of **$220M-$229M**, Plant Nutrition sales volumes of **320K-325K tons** and adjusted EBITDA of **$24M-$27M**, with capital expenditures of **$75M-$85M** - Fiscal Year 2025 Guidance: - **Salt Segment:** Sales volumes of **10.7M to 11.0M tons**; Adjusted EBITDA of **$220M to $229M** - **Plant Nutrition Segment:** Sales volumes of **320,000 to 325,000 tons**; Adjusted EBITDA of **$24M to $27M** - **Capital Expenditures:** Expected to be **$75M to $85M**[174](index=174&type=chunk) - Based on bidding for the upcoming winter season, the company expects its average North American highway deicing contract selling price to be **2% to 4%** higher than in fiscal 2025, with committed bid volumes up **3% to 5%**[174](index=174&type=chunk) [Liquidity and Capital Resources](index=37&type=section&id=Liquidity%20and%20Capital%20Resources) As of June 30, 2025, total liquidity was **$388.7 million**, with nine-month net cash from operations significantly increasing to **$204.6 million**; the company completed a major debt refinancing by issuing **$650 million** in new **8.00%** Senior Notes and suspended dividends to prioritize debt reduction - Total liquidity as of June 30, 2025, was **$388.7 million**, comprising **$79.4 million** of cash and **$309.3 million** of availability under its revolving credit facility[178](index=178&type=chunk) - The company issued **$650.0 million** of **8.00%** Senior Notes due 2030 and used proceeds to repay its term loan and redeem **$350.0 million** of its **6.75%** Senior Notes due 2027, resulting in a **$7.6 million** loss on debt extinguishment[187](index=187&type=chunk)[188](index=188&type=chunk)[142](index=142&type=chunk) - The credit agreement was amended to fix revolving commitments at **$325.0 million** and modify financial covenants, replacing the total net leverage ratio with a first lien net leverage ratio and lowering the interest coverage ratio requirement[190](index=190&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=43&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company faces market risks from interest rate fluctuations, foreign currency (CAD, GBP), and commodity pricing (natural gas), using derivatives to mitigate some exposures, with no material change in risk since the last fiscal year-end - The company's primary market risks are interest rate risk, foreign currency exchange rate risk, and commodity pricing risk. It uses derivatives to hedge commodity and foreign currency risks and does not engage in speculative trading[207](index=207&type=chunk) [Item 4. Controls and Procedures](index=43&type=section&id=Item%204.%20Controls%20and%20Procedures) Management deemed disclosure controls and procedures ineffective as of September 30, 2024, due to material weaknesses in risk assessment and information/communication processes, with active remediation efforts underway including enhanced risk assessment and new accounting personnel - The CEO and CFO concluded that disclosure controls and procedures were ineffective due to material weaknesses in internal control over financial reporting[208](index=208&type=chunk) - The material weaknesses stem from an ineffective risk assessment process and an ineffective information and communication process, which led to deficiencies in process-level controls throughout financial reporting[214](index=214&type=chunk) - Remediation efforts are in progress, including enhancing the risk assessment process, hiring additional accounting professionals with technical expertise, and redesigning controls over manual journal entries and balance sheet reconciliations[216](index=216&type=chunk) [PART II. OTHER INFORMATION](index=45&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=45&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to detailed disclosures on legal proceedings in Note 6 (Income Taxes) and Note 8 (Commitments and Contingencies) of the financial statements, with no material developments since September 30, 2024, beyond those notes - The company is involved in various legal proceedings, with detailed information provided in Note 6 (Income Taxes) and Note 8 (Commitments and Contingencies) of the financial statements[217](index=217&type=chunk) [Item 1A. Risk Factors](index=45&type=section&id=Item%201A.%20Risk%20Factors) This section directs readers to the company's Annual Report on Form 10-K for the fiscal year ended September 30, 2024, for a comprehensive discussion of applicable business risk factors - For a discussion of applicable risk factors, the report refers to Part I, Item 1A of the company's Annual Report on Form 10-K for the year ended September 30, 2024[218](index=218&type=chunk) [Item 4. Mine Safety Disclosures](index=45&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section indicates that information on mine safety violations and related regulatory matters, as required by the Dodd-Frank Act, is included in Exhibit 95 of this Quarterly Report - Information regarding mine safety violations as required by Section 1503(a) of the Dodd-Frank Act is included in Exhibit 95 to this Form 10-Q[220](index=220&type=chunk) [Item 6. Exhibits](index=46&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including the indenture for the new **8.000%** Senior Notes, the fifth amendment to the credit agreement, and CEO/CFO certifications - Key exhibits filed include the Indenture for the **8.000%** Senior Notes due 2030 (Exhibit 4.1) and Amendment No. 5 to the Credit Agreement (Exhibit 10.1)[223](index=223&type=chunk)

[Fiscal 2025 Third-Quarter Financial Highlights](index=1&type=section&id=Fiscal%202025%20Third-Quarter%20Financial%20Highlights) The company reported significant year-over-year improvements in key financial metrics, driven by strong performance in both Salt and Plant Nutrition segments [Management Commentary](index=1&type=section&id=Management%20Commentary) Management highlighted strong third-quarter results with improved margins in Salt and increased operating income in Plant Nutrition, alongside enhanced financial flexibility - Salt Business: Costs declined, leading to **adjusted EBITDA margin expansion** and per-ton growth[2](index=2&type=chunk) - Plant Nutrition Business: Benefited from stronger sales volumes and lower production costs, driving improvements in operating income and adjusted EBITDA[2](index=2&type=chunk) - Financial Strategy: The company enhanced financial flexibility through refinancing and reduced net debt with the sale of certain Fortress assets[2](index=2&type=chunk) [Quarterly Financial Results](index=1&type=section&id=Quarterly%20Financial%20Results) Compass Minerals achieved a significant year-over-year improvement in its third-quarter fiscal 2025 results, narrowing its net loss and increasing adjusted EBITDA Q3 FY2025 Key Financial Metrics (vs. Q3 FY2024) | Metric | Q3 2025 | Q3 2024 | Change | | :--- | :--- | :--- | :--- | | **Revenue** | $214.6M | $202.9M | +5.8% | | **Net Loss** | $(17.0)M | $(43.6)M | Improved | | **Net Loss per Diluted Share** | $(0.41) | $(1.05) | Improved | | **Adjusted EBITDA** | $41.0M | $32.8M | +25.0% | | **Adjusted Net Loss per Diluted Share** | $(0.39) | $(1.01) | Improved | - Salt business sales volumes increased by **4%** year-over-year[3](index=3&type=chunk) - Plant Nutrition sales volumes saw a significant **21%** increase compared to the prior year period[3](index=3&type=chunk) [Business Segment Performance](index=2&type=section&id=Business%20Segment%20Performance) Both the Salt and Plant Nutrition segments demonstrated improved profitability, driven by increased sales volumes and reduced production costs [Salt Business](index=2&type=section&id=Salt%20Business) The Salt segment reported increased revenue and significantly improved profitability, driven by higher sales volumes and a decline in all-in product costs per ton Salt Segment Q3 FY2025 Performance | Metric | Q3 2025 | Q3 2024 | YoY Change | | :--- | :--- | :--- | :--- | | **Revenue** | $166.0M | $160.6M | +3% | | **Sales Volumes** | 1,544k tons | 1,483k tons | +4% | | **Operating Earnings** | $28.1M | $25.9M | +9% | | **Adjusted EBITDA** | $45.8M | $41.6M | +10% | | **Adjusted EBITDA per ton** | $29.66 | $27.98 | +6% | - Highway deicing sales volumes increased **5%** year-over-year, while Consumer and Industrial (C&I) sales volumes grew by **2%**[5](index=5&type=chunk) - All-in product costs per ton declined **2%** from the prior-year quarter, contributing to margin expansion[6](index=6&type=chunk) [Plant Nutrition Business](index=2&type=section&id=Plant%20Nutrition%20Business) The Plant Nutrition segment achieved strong revenue growth and a dramatic turnaround in profitability, primarily due to a substantial reduction in product costs Plant Nutrition Segment Q3 FY2025 Performance | Metric | Q3 2025 | Q3 2024 | YoY Change | | :--- | :--- | :--- | :--- | | **Revenue** | $44.8M | $38.8M | +15% | | **Sales Volumes** | 68k tons | 56k tons | +21% | | **Operating Earnings (Loss)** | $5.2M | $(1.4)M | Turnaround | | **Adjusted EBITDA** | $11.4M | $7.2M | +58% | - The average sales price per ton decreased by **5%** year-over-year to approximately **$659**, reflecting global supply conditions for potassium-based fertilizers[7](index=7&type=chunk) - A significant **23%** year-over-year decrease in all-in product costs per ton was a key driver of the improved profitability[8](index=8&type=chunk) [Financial Position and Cash Flow](index=3&type=section&id=Financial%20Position%20and%20Cash%20Flow) The company demonstrated robust cash flow generation and maintained a strong liquidity position, supported by inventory reduction and strategic asset sales [Cash Flow Analysis](index=3&type=section&id=Cash%20Flow%20Analysis) For the first nine months of fiscal 2025, the company significantly improved cash from operating activities and reduced cash used in investing activities Nine Months Ended June 30 Cash Flow Summary (in millions) | Cash Flow Activity | FY2025 | FY2024 | | :--- | :--- | :--- | | **Net Cash from Operating Activities** | $204.6 | $27.1 | | **Net Cash used in Investing Activities** | $(34.7) | $(95.0) | | **Net Cash (used in) provided by Financing Activities** | $(111.5) | $42.2 | - The primary driver for the significant improvement in operating cash flow was a reduction in salt inventory levels[9](index=9&type=chunk) - The company received net proceeds of **$19.6 million** from the sale of assets related to its exit from the fire retardant business[10](index=10&type=chunk) [Liquidity and Financial Position](index=3&type=section&id=Liquidity%20and%20Financial%20Position) Compass Minerals concluded the third quarter with substantial liquidity, comprising cash and available revolving credit, ensuring strong financial flexibility Liquidity Position as of June 30, 2025 | Component | Amount (in millions) | | :--- | :--- | | Cash and cash equivalents | $79.4 | | Availability under revolving credit facility | $309.3 | | **Total Liquidity** | **$388.7** | [Fiscal 2025 Outlook and Bid Season Update](index=4&type=section&id=Fiscal%202025%20Outlook%20and%20Bid%20Season%20Update) The company has updated its fiscal 2025 guidance, projecting increased adjusted EBITDA, and anticipates positive pricing and volume trends for the upcoming North American bid season [Updated Fiscal 2025 Guidance](index=4&type=section&id=Updated%20Fiscal%202025%20Guidance) The company has refined its full-year fiscal 2025 guidance, projecting an increased range for total adjusted EBITDA and providing segment-specific contributions FY2025 Adjusted EBITDA Guidance (in millions) | Segment | 2025 Range | | :--- | :--- | | Salt | $220 - $229 | | Plant Nutrition | $24 - $27 | | Corporate | ($59) - ($55) | | **Total Compass Minerals** | **$185 - $201** | FY2025 Other Guidance | Metric | 2025 Range | | :--- | :--- | | **Capital Expenditures** | $75M - $85M | | **Interest Expense, net** | $70M - $75M | | **Depreciation, depletion and amortization** | $105M - $115M | [2025/2026 North American Bid Season Update](index=5&type=section&id=2025%2F2026%20North%20American%20Bid%20Season%20Update) With approximately 70% of the bidding process complete, the company expects favorable pricing and volume increases for the upcoming North American highway deicing season - Expected average contract selling price for the upcoming season to be **2%-4%** higher than fiscal 2025[22](index=22&type=chunk) - Committed bid volumes are expected to increase by approximately **3%-5%** compared to fiscal 2025[22](index=22&type=chunk) [Appendix: Financial Statements and Reconciliations](index=7&type=section&id=Appendix%3A%20Financial%20Statements%20and%20Reconciliations) This appendix provides comprehensive financial data, including detailed non-GAAP reconciliations and unaudited GAAP financial statements for the reported periods [Non-GAAP Reconciliations](index=7&type=section&id=Non-GAAP%20Reconciliations) This section provides detailed reconciliations of non-GAAP financial measures, such as Adjusted EBITDA, to their most directly comparable GAAP counterparts, used by management to assess core business performance Reconciliation of Net Loss to Adjusted EBITDA (Q3 FY2025) | (in millions) | Amount | | :--- | :--- | | **Net loss** | **$(17.0)** | | Interest expense | 16.3 | | Income tax expense | 3.4 | | Depreciation, depletion and amortization | 23.2 | | **EBITDA** | **25.9** | | Adjustments (Loss on debt extinguishment, etc.) | 15.1 | | **Adjusted EBITDA** | **$41.0** | - Special items adjusted in the nine months ended June 30, 2025, totaled **$60.0 million** before tax, primarily consisting of **$53.7 million** in impairments related to the exit of the Fortress business[33](index=33&type=chunk) [Consolidated Financial Statements](index=16&type=section&id=Consolidated%20Financial%20Statements) This section includes the company's unaudited GAAP financial statements, encompassing the Consolidated Statements of Operations, Balance Sheets, Cash Flows, and Segment Information [Consolidated Statements of Operations](index=16&type=section&id=Consolidated%20Statements%20of%20Operations) The company reported a narrowed net loss for both the third quarter and the nine-month period of fiscal 2025, indicating improved operational performance Nine Months Ended June 30 Results (in millions) | Line Item | 2025 | 2024 | | :--- | :--- | :--- | | **Sales** | $1,016.4 | $908.6 | | **Gross Profit** | $152.3 | $175.5 | | **Operating Income (Loss)** | $13.3 | $(87.0) | | **Net Loss** | $(72.6) | $(157.8) | [Condensed Consolidated Balance Sheets](index=17&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, the company's total assets decreased primarily due to reduced inventories, while total long-term debt also saw a notable reduction Balance Sheet Highlights (in millions) | Account | June 30, 2025 | Sept. 30, 2024 | | :--- | :--- | :--- | | **Total Assets** | $1,537.4 | $1,640.1 | | Inventories, net | $264.7 | $414.1 | | **Total Liabilities** | $1,287.6 | $1,323.5 | | Long-term debt, net | $825.3 | $910.0 | | **Total Stockholders' Equity** | $249.8 | $316.6 | [Consolidated Statements of Cash Flows](index=18&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) For the nine months ended June 30, 2025, the company generated significant cash from operating activities, while managing investing and financing outflows - A significant positive change in inventories contributed **$138.0 million** to operating cash flow for the nine-month period[65](index=65&type=chunk) - Major financing activities included net repayments under the revolving credit facility and debt refinancing, including the issuance of 2030 Notes and repurchase of 2027 Notes[65](index=65&type=chunk) [Segment Information](index=19&type=section&id=Segment%20Information) For the nine months ended June 30, 2025, the Salt segment was the primary revenue and earnings driver, while Plant Nutrition also contributed positively to operating earnings Nine Months Ended June 30, 2025 Segment Results (in millions) | Segment | Sales to External Customers | Operating Earnings (Loss) | | :--- | :--- | :--- | | **Salt** | $840.9 | $124.4 | | **Plant Nutrition** | $164.5 | $0.3 | | **Corporate & Other** | $11.0 | $(111.4) | | **Total** | **$1,016.4** | **$13.3** |

Financial Data and Key Metrics Changes - Adjusted EBITDA for Q2 reached $91.3 million, reflecting a 41% increase year-over-year, while year-to-date adjusted EBITDA was $109.4 million, up 42% [4][20][25] - Q2 GAAP loss per share was $0.22 compared to GAAP earnings per share of $0.14 in the prior year quarter, while adjusted EPS for Q2 was $0.39, up from $0.25 [20][21] - Year-to-date GAAP earnings per share improved to $0.16 from a loss of $0.42 in the same period last year [21] Business Line Data and Key Metrics Changes - Fire Safety segment revenue for Q2 was $120.3 million, a 22% year-over-year increase, and year-to-date revenue was $157.4 million, up 27% [16] - Specialty Products segment Q2 net sales were $42.4 million, a 47% increase from the prior year, with year-to-date net sales reaching $77.2 million, up 23% [19] - Fire Safety's adjusted EBITDA for Q2 was $77.7 million, representing a 40% increase over last year, while Specialty Products adjusted EBITDA rose to $13.7 million from $9.3 million in the prior year [18][20] Market Data and Key Metrics Changes - U.S. wildfire activity was approximately normal in the first half of 2025, with expectations that the full season will not be exceptionally mild [18][34] - International operations, including Canada, Europe, the Middle East, and Asia Pacific, contributed positively to revenue growth due to severe conditions [17] Company Strategy and Development Direction - The company aims to provide high-quality products and exceptional service while delivering private equity-like returns with public market liquidity, focusing on three operational pillars: owning exceptional businesses, applying operational value drivers, and decentralized management [5][6][8] - Significant capital investment of nearly $62 million was made in Q2, including capital expenditures, share repurchases, and asset purchases to support the retardant business [4][25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the sustainability of Q2 performance, indicating that there were no one-time factors affecting results [50] - The company is committed to resolving operational challenges at the Saje plant and expects ongoing impacts until control is regained [58] Other Important Information - The company settled litigation with Compass Minerals for $20 million, which included the acquisition of surplus assets and the return of intellectual property [10][59] - Capital expenditures for Q2 were $12.8 million, with a focus on growth and productivity initiatives [24][26] Q&A Session Summary Question: What is the range of normal wildfire activity? - Management indicated that a normal fire season is roughly 6 million to 7 million acres burned in the contiguous U.S., excluding Alaska [32][34] Question: Is there an inverse relationship between revenue per acre burned and acres burned? - Management confirmed that large swings in acres can lead to muted changes in retardant usage due to resource availability and operational factors [38][40] Question: How has resource availability evolved? - Management noted that California has expanded its air tanker fleet, which improves resource availability, and emphasized the importance of contract structures to support resource availability [44][45] Question: How sustainable is the Q2 performance in Fire Safety? - Management stated that Q2 performance is sustainable and not driven by one-time factors [50] Question: What was the impact of the Saje plant outages on financial performance? - Management acknowledged significant impacts from ongoing operational issues at the Saje plant, which are expected to continue until control is regained [58]

Group 1 - Compass Minerals (CMP) has significantly outperformed its peers in the Basic Materials sector, returning approximately 77.2% year-to-date compared to the sector average of 8.8% [4] - The Zacks Rank for Compass Minerals is currently 2 (Buy), indicating a positive outlook based on earnings estimates and revisions, with a 25% increase in the consensus estimate for full-year earnings over the past quarter [3] - Compass Minerals is part of the Chemical - Diversified industry, which has seen an average loss of 16.8% this year, further highlighting CMP's strong performance relative to its industry [5] Group 2 - The Basic Materials sector includes 238 individual stocks and holds a Zacks Sector Rank of 12 among 16 sector groups, indicating a relatively lower performance compared to other sectors [2] - Posco (PKX), another stock in the Basic Materials sector, has also outperformed with a year-to-date return of 26%, and it currently holds a Zacks Rank of 2 (Buy) [4][5] - The Steel - Producers industry, to which Posco belongs, has a year-to-date gain of 18.4%, ranking 208 among industries, which is lower than the performance of Compass Minerals [6]

Core Viewpoint - Compass Minerals (CMP) has been upgraded to a Zacks Rank 2 (Buy) due to an upward trend in earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Price Movement - The Zacks rating system is based on a company's changing earnings picture, specifically the consensus of EPS estimates from sell-side analysts [1][2]. - Changes in future earnings potential, as indicated by earnings estimate revisions, are strongly correlated with near-term stock price movements [4][6]. - Rising earnings estimates for Compass suggest an improvement in the company's underlying business, likely leading to increased stock prices [5][10]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with Zacks Rank 1 (Strong Buy) to Zacks Rank 5 (Strong Sell) [7]. - Historically, Zacks Rank 1 stocks have generated an average annual return of +25% since 1988, indicating the effectiveness of the system [7]. - The upgrade of Compass to Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, suggesting potential for market-beating returns in the near term [10]. Earnings Estimate Revisions for Compass - For the fiscal year ending September 2025, Compass is expected to earn -$0.33 per share, with no year-over-year change [8]. - Over the past three months, the Zacks Consensus Estimate for Compass has increased by 39.2%, reflecting positive sentiment among analysts [8].

Group 1 - Compass Minerals International, Inc. (CMP) has reached a significant support level and is considered a good investment pick from a technical perspective due to a "golden cross" formation [1] - A golden cross occurs when a stock's short-term moving average, such as the 50-day, crosses above its long-term moving average, like the 200-day, indicating a potential bullish breakout [1][2] - Over the past four weeks, CMP has gained 71.4%, and it currently holds a 2 (Buy) rating on the Zacks Rank, suggesting it may be poised for further breakout [3] Group 2 - The bullish outlook for CMP is reinforced by a positive earnings forecast, with no earnings estimates cut and one revision higher in the past 60 days, leading to an increase in the Zacks Consensus Estimate [3][4] - The combination of earnings estimate revisions and the technical breakout position makes CMP a stock to watch for potential gains in the near future [4]

Company Overview - Compass Minerals (CMP) currently holds a Momentum Style Score of B, indicating potential for strong performance based on recent price trends and earnings estimate revisions [3][12] - The company has a Zacks Rank of 2 (Buy), which is associated with a historical outperformance in the market [4][12] Price Performance - CMP shares have increased by 37.35% over the past week, while the Zacks Chemical - Diversified industry has seen a decline of 0.95% during the same period [6] - Over the last month, CMP's price change is 76.95%, significantly outperforming the industry's 7.72% [6] - In the last three months, CMP shares have risen by 65.94%, and over the past year, they have gained 57.46%, compared to the S&P 500's performance of -3.37% and 13.7%, respectively [7] Trading Volume - CMP's average 20-day trading volume is 877,616 shares, which serves as a bullish indicator when combined with rising stock prices [8] Earnings Outlook - In the past two months, one earnings estimate for CMP has been revised upwards, while none have been revised downwards, leading to an increase in the consensus estimate from -$0.53 to -$0.38 [10] - For the next fiscal year, one estimate has also moved upwards with no downward revisions, indicating positive sentiment around CMP's earnings potential [10]

Financial Data and Key Metrics Changes - Consolidated revenue for the second quarter was $495 million, up 36% year over year [15] - Operating loss improved to $3.1 million from $39.3 million in the prior year [15] - Consolidated net loss was $32 million compared to a net loss of $38.9 million in the previous period [15] - Adjusted EBITDA for the quarter was $84.1 million, down from $95.7 million a year ago [15][16] - Modified adjusted EBITDA was $76.2 million, compared to $71.9 million in the second quarter of 2024 [16] Business Line Data and Key Metrics Changes - In the Salt business, revenue increased to $433 million from $310 million a year ago [16] - Pricing in the Salt business decreased by 5% year over year to approximately $85 per ton, while volumes increased by 47% [17] - In the Plant Nutrition business, revenue rose to $58 million, up 16% year over year, with sales volumes up 26% [18] Market Data and Key Metrics Changes - North American highway deicing inventory values decreased by 47% year over year, with volumes down 59% [9][19] - The company experienced a significant working capital release of approximately $145 million from inventory [9] - Total net debt decreased by $171 million sequentially and $81 million year over year [19] Company Strategy and Development Direction - The company is focused on improving cash flow by optimizing business practices and reducing capital intensity [6] - A strategic pivot was made to rationalize North American highway deicing inventory levels to free up cash and reduce debt [6][9] - The company plans to ramp up production in response to favorable market conditions and is positioned well for the upcoming bid season [10][11] Management's Comments on Operating Environment and Future Outlook - Management noted that the second quarter showed improvement due to better winter weather compared to the first quarter [5] - The company is optimistic about potential price increases and volume commitments in the upcoming bid season due to improved market conditions [27][30] - Management emphasized the importance of controlling costs and managing inventory to enhance free cash flow [19] Other Important Information - The company announced the elimination of over 10% of its corporate workforce to align its cost structure with current business needs [13] - The guidance for adjusted EBITDA for the year was increased to $188 million, reflecting improvements in both the Salt and corporate segments [19] Q&A Session Summary Question: Accounts receivable levels increased from December to March, what is the reason? - Management indicated that there are insurance settlement matters affecting accounts receivable, and balances are expected to decrease as inventory sells through [22][24] Question: What are the early indications for the upcoming bid season? - Management noted that the market is more constructive than in previous years, with early data showing increased volume commitments in some regions [27][30] Question: What are the plans for improving margins in the SOP business? - Management outlined a multi-year effort to improve production costs through better control of brine chemistries and capital projects [32][34]

Financial Performance - Net total debt decreased by 10% year-over-year, reaching $758 million as of March 31, 2025 [9] - The company reported a net loss of $32 million for the second quarter of fiscal year 2025, compared to a net loss of $38.9 million in the second quarter of fiscal year 2024 [11] - Total company adjusted EBITDA for the second quarter of fiscal year 2025 was $84.1 million, a decrease from $95.7 million in the prior year [11] - Consolidated revenue increased by 36% year-over-year [20] - Consolidated adjusted EBITDA decreased by 12% year-over-year, with an adjusted EBITDA margin of 17% [20] Salt Segment - Salt revenue increased by 39% year-over-year, reaching $432.7 million [11, 24] - Salt adjusted EBITDA improved by 4% year-over-year, reaching $85.5 million [11, 24] - North American highway deicing inventory values decreased by 47% year-over-year [11, 35] - North American highway deicing inventory volumes decreased by 59% year-over-year [11, 34] Plant Nutrition Segment - Plant Nutrition revenue increased by 164% year-over-year, reaching $58.3 million [39] - Plant Nutrition adjusted EBITDA decreased to $5.6 million from $7.3 million year-over-year, a decrease of 233% [39, 45] - Plant Nutrition sales volumes improved by 26% year-over-year, reaching 93 thousand tons [45]