Core Insights - Compass Minerals reported a revenue of $494.6 million for the quarter ended March 2025, marking a 35.9% increase year-over-year and exceeding the Zacks Consensus Estimate of $413.88 million by 19.50% [1] - The company's EPS was $0.63, down from $1.49 in the same quarter last year, but it surpassed the consensus EPS estimate of $0.39 by 61.54% [1] Financial Performance Metrics - Average Sales Price per ton for Plant Nutrition was $626.02, exceeding the two-analyst average estimate of $608.85 [4] - Total Salt sales volumes reached 5,105 KTon, surpassing the estimated 4,150.78 KTon [4] - Average Sales Price per ton for Total Salt was $84.76, slightly below the estimated $87.42 [4] - Plant Nutrition sales volumes were 93 KTon, exceeding the average estimate of 76 KTon [4] - Sales to external customers for Salt were $432.70 million, up 39.4% year-over-year and above the estimated $362.42 million [4] - Sales to external customers for Plant Nutrition were $58.30 million, representing a 16.4% year-over-year increase and exceeding the estimate of $46.26 million [4] - Operating earnings for Plant Nutrition were -$1.80 million, better than the estimated -$3.66 million [4] - Operating earnings for Salt were $66.90 million, above the average estimate of $63.52 million [4] Stock Performance - Compass shares have returned +48.7% over the past month, significantly outperforming the Zacks S&P 500 composite's +10.6% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Group 1: Earnings Performance - Compass Minerals reported quarterly earnings of $0.63 per share, exceeding the Zacks Consensus Estimate of $0.39 per share, but down from $1.49 per share a year ago, representing an earnings surprise of 61.54% [1] - The company posted revenues of $494.6 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 19.50%, compared to year-ago revenues of $364 million [2] Group 2: Stock Performance and Outlook - Compass shares have increased by approximately 24.1% since the beginning of the year, contrasting with the S&P 500's decline of -4.7% [3] - The current consensus EPS estimate for the upcoming quarter is -$0.17 on revenues of $209.96 million, and -$0.53 on revenues of $1.16 billion for the current fiscal year [7] Group 3: Industry Context - The Zacks Industry Rank for Chemical - Diversified is currently in the bottom 24% of over 250 Zacks industries, indicating potential challenges for stock performance [8] - Innospec, another company in the same industry, is expected to report quarterly earnings of $1.40 per share, reflecting a year-over-year decline of -20% [9]

[Fiscal 2025 Second-Quarter Results](index=1&type=section&id=Fiscal%202025%20Second-Quarter%20Results) [Management Commentary](index=1&type=section&id=Management%20Commentary) Management highlighted progress on its 'back-to-basics' strategy, optimizing operations, significantly reducing salt inventory, cutting net debt by **18%**, and streamlining costs through workforce reduction and winding down Fortress North America - The company is executing a 'back-to-basics' strategy focused on optimization to become more efficient and profitable[2](index=2&type=chunk) - Successfully executed a plan to curtail salt production, resulting in a working capital release of nearly **$150 million** from inventory in Q2[2](index=2&type=chunk) - Reduced net total debt by approximately **$170 million**, or **18%**, during the second quarter[2](index=2&type=chunk) - Year-over-year, North American highway deicing inventory value and volumes decreased by **47%** and **59%**, respectively[2](index=2&type=chunk) - Actions to optimize the cost structure include eliminating over **10%** of the corporate workforce and winding down the Fortress North America fire retardant business[2](index=2&type=chunk) [Quarterly Financial Highlights](index=2&type=section&id=Quarterly%20Financial%20Highlights) Q2 FY2025 saw revenue increase to **$494.6 million** from **$364.0 million** year-over-year, with net loss improving to **$32.0 million**, though adjusted net earnings decreased to **$25.7 million** Q2 Fiscal 2025 Financial Summary (in millions, except per share data) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | **Revenue** | **$494.6** | **$364.0** | | Operating loss | $(3.1) | $(39.3) | | Net loss | $(32.0) | $(38.9) | | Net loss per diluted share | $(0.77) | $(0.94) | | **Adjusted EBITDA*** | **$84.1** | **$95.7** | | **Adjusted net earnings*** | **$25.7** | **$74.2** | | **Adjusted net earnings per diluted share*** | **$0.63** | **$1.78** | *Non-GAAP financial measure. - Reported results were significantly impacted by the performance and wind-down of the Fortress North America business, including non-cash impairments of **$53.0 million** in Q2 2025 and **$47.6 million** in Q2 2024[4](index=4&type=chunk) [Business Segment Performance](index=3&type=section&id=Business%20Segment%20Performance) The Salt business experienced a **39% revenue increase** and **47% volume surge** due to stronger winter, while Plant Nutrition revenue grew **16%** on higher volumes despite declining adjusted EBITDA from lower prices and higher distribution costs [Salt Business](index=3&type=section&id=Salt%20Business) Q2 2025 Salt Segment Performance vs. Q2 2024 | Metric | Q2 2025 | YoY Change | | :--- | :--- | :--- | | Revenue | $432.7M | +39% | | Sales Volume | 5.1M tons | +47% | | Avg. Sales Price | $84.76/ton | -5% | | Adjusted EBITDA | $85.5M | +4% | | Adjusted EBITDA per ton | $16.75 | -30% | - The **30% decline** in Adjusted EBITDA per ton was a deliberate result of selling higher-cost inventory produced during a period of curtailed production, a strategy aimed at reducing overall inventory levels[7](index=7&type=chunk)[8](index=8&type=chunk) - Highway deicing sales volumes increased **51%** due to stronger winter weather conditions, while Consumer and Industrial (C&I) volumes grew **24%**[9](index=9&type=chunk) [Plant Nutrition Business](index=4&type=section&id=Plant%20Nutrition%20Business) Q2 2025 Plant Nutrition Segment Performance vs. Q2 2024 | Metric | Q2 2025 | YoY Change | | :--- | :--- | :--- | | Revenue | $58.3M | +16% | | Sales Volume | 93k tons | +26% | | Avg. Sales Price | $626/ton | -8% | | Adjusted EBITDA | $5.6M | -23% | - The operating loss improved to **$1.8 million** from **$53.0 million** in the prior-year quarter; however, the prior-year period included a significant non-cash goodwill impairment charge[12](index=12&type=chunk) - Per-unit distribution costs increased **13%** year-over-year due to an increase in sales to markets farther from the company's core California markets[11](index=11&type=chunk) [Cash Flow and Financial Position](index=4&type=section&id=Cash%20Flow%20and%20Financial%20Position) Operating cash flow significantly improved to **$182.8 million** for the first six months of FY2025, driven by salt inventory reduction, supporting **$109.8 million** in net debt payments and ending the quarter with **$328.6 million** liquidity Six Months Ended March 31, Cash Flow Summary (in millions) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash from operating activities | $182.8 | $33.9 | | Net cash used in investing activities | $(35.9) | $(79.7) | | Net cash used in financing activities | $(116.8) | $45.3 (provided) | - The significant improvement in operating cash flow was primarily driven by a large reduction in North American salt inventory levels[13](index=13&type=chunk) - The company ended the quarter with **$328.6 million** of liquidity, consisting of **$49.5 million** in cash and **$279.1 million** available under its revolving credit facility[15](index=15&type=chunk) [Updated Fiscal 2025 Outlook](index=5&type=section&id=Updated%20Fiscal%202025%20Outlook) Compass Minerals revised its FY2025 outlook, increasing the Salt segment forecast due to strong highway deicing sales, maintaining Plant Nutrition guidance, and projecting total adjusted EBITDA between **$173 million** and **$202 million** Fiscal 2025 Full-Year Guidance | Segment | Metric | 2025 Range | | :--- | :--- | :--- | | **Salt** | Revenue | $975M - $1,050M | | | Adj. EBITDA | $215M - $230M | | **Plant Nutrition** | Revenue | $180M - $200M | | | Adj. EBITDA | $17M - $24M | | **Total Company** | **Adj. EBITDA** | **$173M - $202M** | | | Capital Expenditures | $75M - $85M | - The Salt segment outlook was revised upward to reflect the completion of a strong North American highway deicing season, which boosted sales volume forecasts[18](index=18&type=chunk) - Guidance for the Plant Nutrition segment is unchanged from the outlook provided in February 2025[19](index=19&type=chunk) [Financial Statements and Reconciliations](index=8&type=section&id=Financial%20Statements%20and%20Reconciliations) This section presents detailed consolidated financial statements, including Statements of Operations, Balance Sheets, and Cash Flows, alongside segment performance data and comprehensive reconciliations of GAAP to non-GAAP measures like Adjusted EBITDA and Adjusted Net Earnings [Consolidated Statements of Operations](index=16&type=section&id=Consolidated%20Statements%20of%20Operations) Three Months Ended March 31, (in millions) | Line Item | 2025 | 2024 | | :--- | :--- | :--- | | Sales | $494.6 | $364.0 | | Gross Profit | $76.8 | $71.8 | | Operating Loss | $(3.1) | $(39.3) | | Net Loss | $(32.0) | $(38.9) | [Condensed Consolidated Balance Sheets](index=17&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Balance Sheet Summary (in millions) | Line Item | March 31, 2025 | Sept. 30, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $49.5 | $20.2 | | Inventories, net | $220.7 | $414.1 | | Total Assets | $1,531.9 | $1,640.1 | | Long-term debt, net | $797.6 | $910.0 | | Total stockholders' equity | $236.5 | $316.6 | [Condensed Consolidated Statements of Cash Flows](index=18&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Six Months Ended March 31, (in millions) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $182.8 | $33.9 | | Net cash used in investing activities | $(35.9) | $(79.7) | | Net cash (used in) provided by financing activities | $(116.8) | $45.3 | [Reconciliation of Non-GAAP Measures](index=8&type=section&id=Reconciliation%20of%20Non-GAAP%20Measures) - Adjustments from GAAP Net Loss to Adjusted EBITDA for Q2 2025 include adding back **$18.0 million** in interest expense, **$26.5 million** in D&A, **$53.0 million** in impairment losses, and **$4.0 million** in restructuring charges[45](index=45&type=chunk) - Major adjustments impacting comparability include impairments related to the exit of the Fortress business, restructuring and severance charges, and costs related to a food-grade salt product recall[34](index=34&type=chunk)[41](index=41&type=chunk)