UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

Form 10-Q

(Mark One)

¨ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2008

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from              to             

Commission File Number: N/A

AMERICAN ROCK SALT COMPANY LLC

(Exact Name of Registrant as Specified in its Charter)

New York	16-1516458
(State or Other Jurisdiction of Incorporation or Organization)	(IRS Employer Identification Number)

3846 Retsof Road, Retsof, New York	14539
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s Telephone Number, Including Area Code: (585) 243-9510 ext. 1164

(Former Name, Former Address, and Former Fiscal Year, if Changed Since Last Report): N/A

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ¨    No  ¨    NA  x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer  ¨    Accelerated filer  ¨    Non-accelerated filer  x    Smaller reporting company  ¨

(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

EXPLANATORY NOTE

American Rock Salt Company LLC (the “Company”) is not required to file reports under the Securities Exchange Act of 1934, as amended. This Form 10-Q is only being filed for informational purposes pursuant to the indenture governing the Company’s 9  ¹/2% Senior Secured Notes due 2014.

American Rock Salt Company LLC

INDEX

		Page Number
Part I.	Financial Information
Item 1.	Financial Statements (Unaudited)
	Balance Sheets June 30, 2008 and September 30, 2007	2
	Statements of Operations Three and Nine Months Ended June 30, 2008 and 2007	3
	Statements of Changes in Members’ Equity Nine Months Ended June 30, 2008 and 2007	3
	Statements of Cash Flows Nine Months Ended June 30, 2008 and 2007	4
	Notes to Interim Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	8
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	14
Item 4T.	Controls and Procedures	14
Part II.	Other Information
Item 1.	Legal Proceedings	15
Item 1A.	Risk Factors	15
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	15
Item 3.	Defaults Upon Senior Securities	15
Item 4.	Submission of Matters to a Vote of Security Holders	15
Item 5.	Other Information	15
Item 6.	Exhibits	16
Signatures		17
Exhibits		18

1

PART I. FINANCIAL INFORMATION

ITEM 1.

FINANCIAL STATEMENTS

American Rock Salt Company LLC

Balance Sheets

(Unaudited)

	June 30, 2008		September 30, 2007
Assets
Current assets
Cash	$	2,589,570	$	2,615,044
Accounts receivable, net of reserve for doubtful accounts of approximately $332,000 and $54,000 at June 30, 2008 and September 30, 2007, respectively		2,796,433		9,957,325
Inventory, net		21,787,924		35,388,490
Prepaid and other assets		558,896		607,982
Total current assets		27,732,823		48,568,841
Property and equipment, net		82,303,395		81,803,234
Other assets
Salt deposits and mineral rights, net		2,492,702		2,539,534
Mine acquisition costs, net		382,393		376,256
Financing costs, net of accumulated amortization of approximately $5,307,000 and $3,188,000 at June 30, 2008 and September 30, 2007, respectively		2,424,671		4,525,073
Total other assets		5,299,766		7,440,863
	$	115,335,984	$	137,812,938
Liabilities and Members’ Equity
Current liabilities
Revolving line of credit	$	—	$	16,000,000
Current portion of long-term debt		2,139,981		2,057,604
Accounts payable		3,565,100		3,568,432
Accrued expenses		3,911,392		3,918,824
Related party payables		377,242		504,832
Total current liabilities		9,993,715		26,049,692
Long-term debt, net of current portion		75,586,787		110,655,704
Total liabilities		85,580,502		136,705,396
Members’ Equity
Class A Units 6,250 units issued and outstanding at June 30, 2008 and September 30, 2007		9,789,498		364,326
Class F Units 12,750 units issued and outstanding at June 30, 2008 and September 30, 2007		19,965,984		743,216
		29,755,482		1,107,542
	$	115,335,984	$	137,812,938

The accompanying notes are an integral part of these interim financial statements.

2

American Rock Salt Company LLC

Statement of Operations

(Unaudited)

	For the three months ended						For the nine months ended
	June 30, 2008			June 30, 2007			June 30, 2008			June 30, 2007
Sales
Bulk	$	5,670,833		$	7,479,625		$	166,027,749		$	106,179,074
Packaged		—			10,789			4,817,618			2,169,696
Total sales		5,670,833			7,490,414			170,845,367			108,348,770
Cost of sales		3,537,879			5,868,628			117,300,106			80,710,720
Gross income		2,132,954			1,621,786			53,545,261			27,638,050
Operating expenses		2,356,773			2,168,556			6,806,608			5,962,357
Income (loss) from operations		(223,819	)		(546,770	)		46,738,653			21,675,693
Other income (expense)
Interest expense		(3,355,883	)		(2,598,168	)		(10,210,307	)		(8,543,557	)
Interest income		151,096			193,848			313,928			337,481
Other, net		(12,666	)		(3,530	)		155,666			8,632
Total other expense, net		(3,217,453	)		(2,407,850	)		(9,740,713	)		(8,197,444	)
Net income (loss)	$	(3,441,272	)	$	(2,954,620	)	$	36,997,940		$	13,478,249

The accompanying notes are an integral part of these interim financial statements.

American Rock Salt Company LLC

Statement of Changes in Members’ Equity

For the Nine Months Ended June 30, 2008

(Unaudited)

	Class A Units			Class F Units			Total
Members’ equity - September 30, 2007	$	364,326		$	743,216		$	1,107,542
Net income		12,172,322			24,825,618			36,997,940
Distribution		(2,747,150	)		(5,602,850	)		(8,350,000	)
Members’ equity - June 30, 2008	$	9,789,498		$	19,965,984		$	29,755,482

The accompanying notes are an integral part of these interim financial statements.

3

American Rock Salt Company LLC

Statements of Cash Flows

(Unaudited)

	For the nine months ended
	June 30, 2008			June 30, 2007
Cash flows from operating activities
Net income	$	36,997,940		$	13,478,249
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation		4,123,518			3,552,224
Depletion		46,832			31,245
Amortization of mine acquisition and financing costs		2,126,345			748,434
Loss on sale or disposal of equipment		31,957			—
Changes in:
Accounts receivable		7,160,892			4,393,414
Inventory		13,600,566			16,093,066
Prepaid expenses and other assets		49,086			629,889
Accounts payable		(3,332	)		(186,984	)
Accrued expenses		(7,432	)		1,082,406
Related party payables		(127,590	)		(1,653	)
Net cash provided by operating activities		63,998,782			39,820,290
Cash flows from investing activities
Purchase of property and equipment		(4,655,636	)		(1,200,806	)
Payment of mine acquisition costs		(13,330	)		—
Net cash used in investing activities		(4,668,966	)		(1,200,806	)
Cash flows from financing activities
Repayments on long-term debt		(1,536,540	)		(1,464,464	)
Payment of financing costs		(18,750	)		—
Repayments on revolving line of credit		(16,000,000	)		(21,050,000	)
Distribution to Members		(8,350,000	)		(6,000,000	)
Extinguishment of Senior Secured Notes		(33,450,000	)		(3,000,000	)
Net cash used in financing activities		(59,355,290	)		(31,514,464	)
Net (decrease) increase in cash		(25,474	)		7,105,020
Cash - beginning of period		2,615,044			2,457,514
Cash - end of period	$	2,589,570		$	9,562,534
Supplemental Disclosure of Cash Flow Activities
	For the nine months ended
	June 30, 2008			June 30, 2007
Cash paid for interest	$	7,514,340		$	6,538,602

The accompanying notes are an integral part of these interim financial statements.

4

AMERICAN ROCK SALT COMPANY LLC

NOTES TO FINANCIAL STATEMENTS

1. The Company

American Rock Salt Company LLC (the “Company”) primarily sells bulk rock salt for use in deicing roads. The Company bids on supply contracts for salt produced at the Hampton Corners Mine to be provided to state Departments of Transportation and local municipalities as well as industrial consumers throughout the Northeastern United States. The Company was formed on January 30, 1997. Construction of the Hampton Corners Mine began in November 1998 and it was substantially completed in December 2001. The Company steadily increased sales as production and distribution capacity came online during a ramp-up phase in fiscal 2001 and 2002. The Company attained full operating capacity during fiscal 2003.

2. Basis of Presentation

The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. These interim unaudited financial statements should be read in conjunction with the audited financial statements for the fiscal year ended September 30, 2007 included in the Company’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission (the “SEC”) on December 28, 2007. In the opinion of management, all adjustments, consisting only of normal recurring accruals, considered necessary for a fair presentation, have been included. Operating results for the three and nine month periods ended June 30, 2008 are not indicative of the results that may be expected for a full year due, in part, to seasonal fluctuations, which are normal for the Company’s business. Further, the Company has made a number of estimates and assumptions relating to the assets and liabilities, the disclosure of contingent assets and liabilities and the reporting of revenues and expenses to prepare these financial statements in conformity with generally accepted accounting principles. Actual results could differ from those estimates.

The balance sheet at September 30, 2007 has been derived from the audited financial statements at that date, but does not include all the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements.

No provision is made for income taxes in the accompanying financial statements as the Company is wholly-owned by another limited liability company and is therefore treated as a disregarded entity for tax purposes. The taxable income and loss and any available credits of the Company and its sole member, American Rock Salt Holdings LLC (“Holdings”), are includable on the individual tax returns of the members of Holdings.

Certain previous year amounts have been reclassified to conform to the current period presentation, including the reclassification of certain inventory from finished goods to supplies. We reclassified $0.5 million of inventory that was previously included finished goods, salt to supplies. These reclassifications had no impact on our results of operations or changes in members’ equity, or cash flows.

5

3. Long-Term Debt

Long-term debt consisted of the following at:

	June 30, 2008			September 30, 2007
Senior Secured Notes
Senior Secured Notes at June 30, 2008, currently requiring semi-annual interest through the final maturity date of March 15, 2014 at an annual rate of 9.50%. Some or all of the notes may be redeemed at any time prior to March 15, 2009 at a make-whole redemption price. After March 15, 2009, the notes are redeemable at a redemption price of 104.75%, to be adjusted annually to 100% by March 15, 2012.	$	57,505,000		$	90,955,000
Senior Term Loan
Senior Term Loan at June 30, 2008, currently requiring quarterly principal and interest payments through the final maturity date of March 16, 2012 at an annual rate equal to the LIBOR rate plus up to 1.375%, based on a pricing grid leverage ratio or a base rate (the higher of the Federal Funds Rate plus 0.5% or the prime rate plus the applicable margin for base rate loans), at the Company’s option. The interest rate was 3.0% as of June 30, 2008.	$	20,142,795		$	21,659,261
Promissory note payable to the Empire State Development Corporation
Due April 1, 2011, interest at 4.0% per annum payable in 120 equal installments of principal and interest	$	78,973		$	99,047
		77,726,768			112,713,308
Less: Current maturities of long-term debt		(2,139,981	)		(2,057,604	)
	$	75,586,787		$	110,655,704

The Company’s bank facility in the aggregate principal amount of $50.1 million consists of: (a) a $20.1 million term loan facility, and (b) a $30.0 million working capital facility. Both the term loan and the working capital facility bear interest at an annual rate equal to the LIBOR rate plus up to 1.375% based on a pricing grid leverage ratio or a base rate (the higher of the Federal Funds Rate plus 0.50% or the prime rate plus the applicable margin for base rate loans), at the Company’s option. The term loan facility has a maturity of eight years commencing March 7, 2006. The working capital facility has a term of five years commencing March 7, 2006.

At June 30, 2008 a balance of $20.1 million was outstanding under the term loan facility, bearing interest at a rate of 3.00%.

The working capital facility permits the Company to borrow up to $30.0 million in revolving loans with a $7.0 million sub-limit available for the issuance of letters of credit. Availability of the working capital facility is subject to a borrowing base formula. As of June 30, 2008, the Company had $0.0 million drawn and $2.0 million of standby letters of credit outstanding under the working capital facility, with approximately $28.0 million of remaining availability thereunder. The aggregate outstanding

amount of revolving loans and letters of credit under the financing arrangement cannot exceed $30.0 million and, as of June 30, 2008, when outstanding bears an interest rate of 3.00%.

For the period ended June 30, 2008, the Company purchased $33.5 million of its 9 ¹/2% Senior Secured Notes due 2014 for an aggregate purchase price of $35.9 million. This amount comprises principal of $33.5 million, premium of $1.4 million and accrued interest of $1.0 million for the Notes purchased. Related to this purchase the Company incurred $1.7 million in accelerated amortization of deferred financing costs. The Company intends to retire all such Notes.

6

4. Inventory

Inventory consisted of the following at:

	June 30, 2008			September 30, 2007
				(See Note 2)
Supplies	$	2,130,337		$	1,537,803
Finished Goods, Salt		19,710,846			33,889,132
		21,841,183			35,426,935
Less:
Reserve		(53,259	)		(38,445	)
	$	21,787,924		$	35,388,490

5. Related Party Transactions

Legal Services

Certain legal costs were incurred from an organization affiliated with several of our affiliates of approximately $0.1 million and $0.1 million during the three months ended, and $0.2 million and $0.2 million for the nine months ended June 30, 2008 and 2007, respectively. All such fees were included in operating expenses.

Goods and Services

Management and service fees were incurred from certain affiliates of approximately $0.1 million and $0.2 million during the three months ended, and $0.2 million and $0.4 million for the nine months ended June 30, 2008 and 2007, respectively. These amounts are included in operating expenses.

Additionally, expenses were incurred to certain affiliates for goods and services of approximately $1.4 million and $0.4 million during the three months ended, and $3.5 million and $1.3 million for the nine months ended June 30, 2008 and 2007, respectively. Of those amounts, the following amounts were included in cost of sales: for the three months ended June 30, 2008, approximately $1.2 million; for the three months ended June 30, 2007, approximately $0.4 million; for the nine months ended June 30, 2008, approximately $3.2 million; and for the nine months ended June 30, 2007, approximately $1.0 million. The remaining amounts not included in cost of sales are included in operating expenses.

Non-operating Mineral Interests (“NOMIs”)

Certain affiliates receive payments in respect of NOMIs related to the acquisition of mineral rights equal to 2.5% of the gross income from the mine as reported for purposes of computing percentage depletion for federal income tax purposes. NOMI expense was approximately $0.1 million and $0.2 million during the three months ended, and $3.6 million and $2.6 million for the nine months ended June 30, 2008 and 2007, respectively. These amounts are accrued in related party payables and included in cost of sales.

7

CAUTIONARY STATEMENT ON FORWARD-LOOKING STATEMENTS

This Form 10-Q contains forward looking statements. These statements relate to future events or our future financial performance, and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance, or achievements to be materially different from any future results, levels of activity, performance, or achievements, expressed or implied by these forward-looking statements. These risks and other factors include, among other things, those listed in the section entitled “Risk Factors” set forth in Item 1A below and elsewhere in our Annual Report on Form 10-K for the fiscal year ended September 30, 2007, filed with the SEC on December 28, 2007, and in other documents we file with the SEC. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” “continue” or the negative of these terms or other comparable terminology. These statements are only predictions. Actual events or results may differ materially. In evaluating these statements, you should specifically consider various factors, including the risks outlined in “Risk Factors”. These factors may cause our actual results to differ materially from any forward-looking statement. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, or achievements. We are under no duty to update any of the forward-looking statements after the date of this Form 10-Q.

ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Company Overview

We are a producer of highway deicing rock salt in North America. We own and operate a rock salt mine located approximately 35 miles south of Rochester, New York. Our mine is located in the heart of the western and central New York and Pennsylvania snow belt, with on-site access to truck and rail transportation.

Salt mines and mining operations are long-lived assets. Based solely on data extrapolated from areas within a one-mile radius of our drill holes, we believe that our mine currently has approximately 50 years of remaining mineable reserves at current production rates.

While winter weather conditions in individual markets can vary from year to year, our target markets in New York and Pennsylvania are impacted by harsh winter snow and ice conditions and overall demand across the region is relatively stable. Our served markets in New York, Pennsylvania, Ohio and eight other states have an aggregate regional demand for over 11.1 million tons per year of rock salt, and Pennsylvania and New England currently have no operating rock salt mines.

Our sales primarily consist of bulk salt sales, as well as packaged salt sales. Most of our sales are based on annual supply contracts with set pricing and reserved volume generally awarded on the basis of lowest price of bids tendered. This allows us to plan our production and staffing schedule and our inventory placement and sales distribution strategy for the upcoming season. We routinely adjust the size of our workforce, as well as the number of hours and days worked, to reflect seasonal demand.

We believe that our cash flows are not materially impacted by economic cycles due to the stable end use markets for rock salt and the lack of cost effective alternatives.

We generated revenues of $5.7 million and $170.8 million for the three and nine months ended June 30, 2008, respectively. The results also included EBITDA of $1.4 million and $53.5 million for the three and nine months ended June 30, 2008; all of which were records for us. This was a result of strong winter weather, improved pricing and higher tonnage levels of municipal contract awards. See “EBITDA” below for a reconciliation of EBITDA, a non-GAAP financial measure, to net income.

8

Critical Accounting Policies

In preparing financial statements in conformity with accounting principles generally accepted in the United States of America, or GAAP, we are required to make estimates and assumptions that affect the reported amount of assets and liabilities and the disclosure of contingent assets and liabilities at the date of our financial statements and revenues and expenses during the reporting period. Actual results could differ from those estimates. We have identified the following as critical accounting policies that are most important to the portrayal of our financial condition and results of operation.

Salt Deposits, Mineral Rights and Mine Development Costs

Salt deposits and mineral rights are underground reserves with respect to which the Company has extraction rights. Mine development costs are primarily underground assets used in the production of salt with amortization lives linked to the quantity of available production reserves. Depletion of salt deposits and mineral rights and amortization of mine development costs occur as the minerals are extracted based on units of production and engineering estimates of total reserves. As such, our mineral rights interests include estimates of probable mineral reserves. As such, the carrying values, depletion and amortization expense charges for these assets are dependent upon estimates of proven mineral reserves. The impact of revisions to our reserve estimates is recognized on a prospective basis.

Mine Reclamation Cost

We have calculated the estimated net future cost of dismantling, restoring, and reclaiming our mine in its related mine site in accordance with federal, state and local regulatory requirements, and in accordance with Statement of Financial Accounting Standards (“SFAS”) No. 143, Accounting for Obligations Associated with the Retirement of Long-Lived Assets. SFAS No. 143 requires that we recognize the legal obligation of our mine reclamation costs at fair value as a liability when incurred and capitalize such costs by increasing the carrying amount of our mine assets.

Impairment of Long-Lived Assets

In the event that relevant facts and circumstances indicate that the carrying amounts of our long-lived assets may be impaired, an evaluation of recoverability is performed. If such an evaluation is required, the estimated future undiscounted cash flows associated with the asset would be compared to the asset’s carrying amount to determine if a write-down is required. If our review indicates that the assets will not be recoverable, the carrying value of the Company’s assets would be reduced to their estimated fair value.

Other Significant Accounting Policies

Other significant accounting policies not involving the same level of estimates and assumptions as those discussed above are important to an understanding of our financial statements. For example, our policies related to our inventory allowances, revenue recognition and legal contingencies require judgments and estimates.

Results of Operations

We record sales to customers based upon total billings including shipping and handling costs necessary to transport our products from the production or storage sites to the delivery point. In establishing our prices to our customers, we must take into account the estimated cost of transportation of our products, since we assume responsibility for such costs. We manage the profitability and attractiveness of existing and prospective customers and product lines by analyzing, among other factors, the customer billings net of related shipping and handling costs. This allows for a more comparable look at the relative profitability of our business as well as providing a more accurate analysis upon which to analyze trends in the business.

9

The following table and discussion should be read in conjunction with the information contained in our financial statements and the notes thereto included elsewhere in this Form 10-Q.

American Rock Salt Company LLC

Statement of Operations

	For the three months ended						For the nine months ended
	June 30, 2008			June 30, 2007			June 30, 2008			June 30, 2007
Sales
Bulk	$	5,670,833		$	7,479,625		$	166,027,749		$	106,179,074
Packaged		—			10,789			4,817,618			2,169,696
Total sales		5,670,833			7,490,414			170,845,367			108,348,770
Cost of sales		3,537,879			5,868,628			117,300,106			80,710,720
Gross income		2,132,954			1,621,786			53,545,261			27,638,050
Operating expenses		2,356,773			2,168,556			6,806,608			5,962,357
Income (loss) from operations		(223,819	)		(546,770	)		46,738,653			21,675,693
Other income (expense)
Interest expense		(3,355,883	)		(2,598,168	)		(10,210,307	)		(8,543,557	)
Interest income		151,096			193,848			313,928			337,481
Other, net		(12,666	)		(3,530	)		155,666			8,632
Total other expense, net		(3,217,453	)		(2,407,850	)		(9,740,713	)		(8,197,444	)
Net income (loss)	$	(3,441,272	)	$	(2,954,620	)	$	36,997,940		$	13,478,249

Seasonality

We experience a substantial amount of seasonality in salt sales. The result of this seasonality is that sales and operating income are normally higher in the first and fourth calendar quarters and lower during the second and third calendar quarters of each year. Sales of highway and consumer deicing salt products are seasonal as they vary based on the severity of the winter conditions in areas where the product is used. Following industry practice, we and our customers typically stockpile significant quantities of deicing salt in the second, third and fourth calendar quarters. Our results of operations for the fiscal year ended September 30 are more representative of trends in our results.

Three Months Ended June 30, 2008 Compared to Three Months Ended June 30, 2007

Sales

Total sales for the quarter ended June 30, 2008 of $5.7 million decreased $1.8 million, or 24.0%, compared to $7.5 million during the same period in fiscal 2007. The decrease is primarily attributable to a 36.7% decrease in tonnage sold in the third quarter of fiscal 2008 as compared to the same period in fiscal 2007, partially offset by a 14.2% increase in average sales price per ton. The decrease in sales volume is attributable to lower demand in the third quarter of fiscal 2008 as compared to the same period in fiscal 2007, related to milder weather. The quarter ended June 30, 2007 had experienced an unusual continuation of winter weather across the Company’s served market area. The increase in average sales price per ton is related to an increase in freight cost associated with the increase in diesel fuel price per gallon as compared to the third quarter of fiscal 2007.

Gross Income

Gross income for the third quarter of fiscal 2008 of $2.1 million increased by $0.5 million, or 31.3%, compared to $1.6 million for the same period in fiscal 2007. The increase in gross income was primarily attributable to the increase in sales price per ton referred to above as well as a 7.7% decrease in cost of goods sold on a per ton basis. The decrease in cost of goods sold is a result of favorability in the quarter’s sales mix between local and remote stockpiles. Cost of goods sold for the third quarter of fiscal 2008

10

decreased by $2.3 million, or 39.7%, as compared to the same period in fiscal 2007; while on a percentage of sales basis, cost of goods sold decreased by 15.9%. The decrease in cost of goods sold is primarily the result of the 36.7% decrease in sales volume as compared to the same period in fiscal 2007.

Operating Expenses

Operating expenses of $2.4 million for the third quarter of fiscal 2008 increased by $0.2 million, or 9.1%, compared to $2.2 million for the same period in fiscal 2007. The increase in operating expenses was due to a $0.2 million increase in bad debt expense. The Company increased its bad debt reserve during the three months ended June 30, 2008 as a result of aged receivables with certain customers.

Other Income (Expense)

Other expense of $3.2 million for the third quarter of fiscal 2008 increased $0.8 million, or 33.3%, compared to $2.4 million for the same period in fiscal 2007. The increase in other expense is primarily due to a $1.4 million increase in interest expense related to our purchase of certain of our 9  ¹/ 2% Senior Secured Notes due 2014 during the third quarter of fiscal 2008, which includes a $0.7 million increase related to the accelerated amortization of deferred financing costs and a $0.7 million increase in bond premiums paid. The $1.4 million increase in interest expense related to the purchase described above is partially offset by a net reduction of $0.3 million in annual interest expense related to our purchases of Senior Secured Notes during the current and prior fiscal years. The increase is also offset by a reduction in interest expense of $0.1 million related to the lower balance remaining on the Company’s credit facility in addition to lower interest rates on that outstanding balance when compared to the same period in fiscal 2007, and $0.2 million received from the settlement of litigation during the three months ended June 30, 2008.

Nine Months Ended June 30, 2008 Compared to Nine Months Ended June 30, 2007

Sales

Total sales for the nine months ended June 30, 2008 of $170.8 million increased $62.5 million, or 57.7%, compared to $108.3 million during the same period in fiscal 2007. The $62.5 million increase is primarily attributable to a 42.1% increase in tonnage sold during the first nine months of fiscal 2008, in addition to an 11.0% increase in average sales price per ton, as compared to the same nine month period of fiscal 2007. The increase in sales volume and price per ton are directly related to our successful bidding results and the strong winter weather conditions in our served market areas, as well as a favorable change in sales mix over the same period in fiscal 2007.

Gross Income

Gross income for the nine months ended June 30, 2008 of $53.5 million increased by $25.9 million, or 93.8%, compared to $27.6 million for the same period in fiscal 2007. The increase in gross income was primarily attributable to the increase in tonnage sold in addition to the increase in average sales price per ton referred to above. Gross profit per ton for the nine months ended June 30, 2008 increased by 36.9% as compared to the same period in fiscal 2007, due to the fact that gross profit per ton for the nine months ended June 30, 2007 was depressed as a result of our inventory staging activities and temporary cessation of production during that period, and also as a result of our bidding results and favorable sales mix during the nine months ended June 30, 2008. Cost of goods sold for the first nine months of fiscal 2008 increased by $36.6 million, or 45.3%, as compared to the same period in fiscal 2007. The increase in cost of goods sold is primarily related to the increase in volume sold. On a percentage of sales basis, cost of goods sold decreased by 5.8%.

Operating Expenses

Operating expenses of $6.8 million for the nine months ended June 30, 2008 increased by $0.8 million, or 13.3%, as compared to $6.0 million for the same period in fiscal 2007. Operating expenses primarily consist of selling, general and administrative expenses, miscellaneous overhead and non-production related depreciation and amortization expenses. The increase in operating expenses was primarily due to $0.7 million in stockpile expenses related to the maintenance of current stockpiles along with research and

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exploration of additional stockpiles, combined with a $0.2 million increase in bad debt expense recorded during the nine months ended June 30, 2008 as a result of aged receivables with certain customers. Additionally, there was a $0.1 million increase in accounting fees related to compliance with Section 404 of the Sarbanes Oxley Act of 2002. The above increases were partially offset by a $0.2 million decrease related to idle rail car expense during the nine months ended June 30, 2008 as compared to the same period in fiscal 2007.

Other Income (Expense)

Other expense of $9.7 million for the first nine months of fiscal 2008 increased by $1.5 million, or 18.3%, compared to $8.2 million for the same period in fiscal 2007. The increase is primarily due to a $2.6 million increase in interest expense related to our purchase of certain of our 9 ¹/2% Senior Secured Notes due 2014 during the nine months ended June 30, 2008, which includes a $1.4 million increase related to the accelerated amortization of deferred financing costs and a $1.2 million increase in bond premiums paid. The $2.6 million increase in interest expense related to the purchase described above is partially offset by a net reduction of $0.6 million in annual interest expense related to our purchases of Senior Secured Notes during the current and prior fiscal years. The increase is also offset by a reduction in interest expense of $0.6 million related to a reduced balance outstanding under the Company’s credit facility and lower interest rates on that outstanding balance when compared to the same period in fiscal 2007, and $0.2 million received from the settlement of litigation during the first nine months of fiscal 2008.

Liquidity and Capital Resources

Historical Cash Flow

We have used the cash generated from operations and borrowings under our bank facility to meet our working capital needs and to fund capital expenditures. The Company believes it has adequate liquidity through cash generated from operations and borrowings under our bank facility to fund all ongoing operating activity in the future. Additional information regarding our cash flows for the nine months ended June 30, 2008 is provided below.

Operating Activities – Net cash provided by operating activities for the nine months ended June 30, 2008 was $64.0 million, an increase of $24.2 million compared to $39.8 million during the same period in fiscal 2007. The $24.2 million increase is primarily related to the vigorous winter weather and increased sales occurring during the first nine months of fiscal 2008.

Investing Activities – Net cash used in investing activities for the first nine months of fiscal 2008 and 2007 was $4.7 million and $1.2 million respectively. The $3.5 million increase is attributable to an increase in the purchase of property and equipment in the first nine months of fiscal 2008 as compared to the same period in 2007, including purchases of heavy equipment, stockpile and mine facility improvements and miscellaneous ordinary course purchases.

Financing Activities – Net cash used in financing activities was $59.4 million for the first nine months of fiscal 2008 as compared to $31.5 million used during the same period in fiscal 2007. The $27.9 million increase is primarily attributable to a $30.5 million increase in cash used to purchase certain of our 9  ¹/2% Senior Secured Notes due 2014 as well as a $2.4 million increase in distributions to American Rock Salt Holdings LLC, our sole member, partially offset by a $5.1 million reduction in repayments on our working capital facility due to a reduced amount of borrowing under that facility during the nine months ended June 30, 2008 as compared to the same period in fiscal 2007.

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EBITDA

EBITDA represents net income before interest expense, depreciation, depletion, and amortization (the Company does not incur income taxes). EBITDA does not represent and should not be considered as an alternative to net income or cash flow from operations, as determined by GAAP, and our calculations of EBITDA may not be comparable to those reported by other companies. Investors should carefully consider the specific items included in our computation of EBITDA. EBITDA is included herein because it is a basis upon which we assess our liquidity position and performance and because certain covenants in our borrowing arrangements are tied to similar measures. EBITDA is also included herein because we believe that it presents useful information to investors regarding a company’s ability to service and/or incur indebtedness. This belief is based on negotiations with lenders who have indicated that the amount of indebtedness we have been permitted to incur is based, in part, on measures similar to our EBITDA. EBITDA does not take into account working capital requirements, capital expenditures, debt service requirements and other commitments, and accordingly, EBITDA is not necessarily indicative of amounts that may be available for discretionary use.

The following table reconciles EBITDA to net income for the periods indicated:

American Rock Salt Company LLC

EBITDA Reconciliation to Net Income

	Three Months Ended June 30,						Nine Months Ended June 30,
	2008			2007			2008			2007
Net Income to Member (s)	$	(3,441,272	)	$	(2,954,620	)	$	36,997,940		$	13,478,249
Interest Expense		3,355,883			2,598,168			10,210,307			8,543,557
Loss on sale or disposal of asset		27,687			—			31,957			—
Depletion, Depreciation and Amortization		1,469,800			1,425,468			6,296,695			4,331,903
EBITDA	$	1,412,098		$	1,069,016		$	53,536,899		$	26,353,709
Subtract
Interest Expense		(3,355,883	)		(2,598,168	)		(10,210,307	)		(8,543,557	)
Loss on sale or disposal of asset		(27,687	)		—			(31,957	)		—
Changes in working capital and other assets and liabilities		3,543,767			10,010,135			20,704,147			22,010,138
Net cash provided by operating activities	$	1,572,295		$	8,480,983		$	63,998,782		$	39,820,290
Net cash used in investing activities	$	(2,364,968	)	$	(766,622	)	$	(4,668,966	)	$	(1,200,806	)
Net cash used in financing activities	$	(23,400,996	)	$	(6,494,486	)	$	(59,355,290	)	$	(31,514,464	)

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Contractual Cash Obligations

There have been no material changes outside the ordinary course of the Company’s business to the Company’s contractual cash obligations as reported in its Annual Report on Form 10-K for the fiscal year ended September 30, 2007, filed with the SEC on December 28, 2007.

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ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company’s business is subject to a variety of market risks, including but not limited to, interest rate risks and commodity pricing risks. Although the Company’s senior secured notes bear interest at a fixed rate of 9.5% per annum, borrowings under its bank facility are subject to variable interest rates keyed to LIBOR. As of June 30, 2008 the variable rate was 3.0%. As of June 30, 2008, we had $57.5 million of debt outstanding under our senior secured notes, and $20.1 million outstanding under our bank facility. Our bank facility, in the aggregate principal amount of $50.1 million, consists of (a) a $20.1 million term loan facility, and (b) a $30.0 million working capital facility. The working capital facility permits us to borrow up to $30.0 million in revolving loans with a $7.0 million sub-limit available for the issuance of letters of credit. As of June 30, 2008, there was $0.0 million drawn and $2.0 million of standby letters of credit outstanding under the working capital facility with approximately $28.0 million of remaining availability thereunder.

Our earnings and cash flows are affected by changes in interest rates applicable to our bank facility. Given our current debt structure and assuming an average level of borrowings under our revolving credit facility at variable rates and a one hundred basis point increase in the average interest rate applicable to these borrowings, it is estimated that our interest expense for the quarter ended June 30, 2008 would have increased by $0.2 million.

ITEM 4T.

CONTROLS AND PROCEDURES

The Company’s management, with the participation of its Co-Principal Executive Officers and Principal Financial Officer, evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rule 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)). Based on that evaluation, the Company’s Co-Principal Executive Officers and its Principal Financial Officer concluded that the Company’s disclosure controls and procedures as of June 30, 2008 (the end of the period covered by this report) have been designed and are functioning effectively to provide reasonable assurance that the information required to be disclosed by the Company in reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.

There were no changes to the Company’s internal control over financial reporting that occurred during the fiscal quarter ended June 30, 2008 that materially affected or are reasonably likely to materially affect the Company’s internal control over financial reporting.

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PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The Company is involved in various routine legal proceedings from time to time. These typically involve commercial claims, personal injury claims, and workers’ compensation claims. While the Company cannot predict the outcome of such proceedings, it does not believe that these proceedings will have a material adverse effect on its business.

ITEM 1A. RISK FACTORS

There have been no material changes to the risk factors that the Company disclosed in its Annual Report on Form 10-K for the fiscal year ended September 30, 2007, filed with the SEC on December 28, 2007.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Nothing to report.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

Nothing to report.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

Nothing to report.

ITEM 5. OTHER INFORMATION

Nothing to report.

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ITEM 6. EXHIBITS

The following exhibits are filed as part of this report on Form 10-Q:

Exhibit No.	Description of Exhibit
31.1	Certificate of the Co-Chief Executive Officer pursuant to 18 U.S.C. §1350 (Section 302 of the Sarbanes-Oxley Act of 2002) (filed herewith)
31.2	Certificate of the Co-Chief Executive Officer pursuant to 18 U.S.C. §1350 (Section 302 of the Sarbanes-Oxley Act of 2002) (filed herewith)
31.3	Certificate of the Co-Chief Executive Officer pursuant to 18 U.S.C. §1350 (Section 302 of the Sarbanes-Oxley Act of 2002) (filed herewith)
31.4	Certificate of the Chief Financial Officer pursuant to 18 U.S.C. §1350 (Section 302 of the Sarbanes-Oxley Act of 2002) (filed herewith)

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SIGNATURES

The registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

August 13, 2008

AMERICAN ROCK SALT COMPANY LLC
By:	/s/ Raymond R. Martel
	Raymond R. Martel,
	Chief Financial Officer
	(Principal Financial Officer)

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EXHIBIT INDEX

Exhibit No.	Description of Exhibit
31.1	Certificate of the Co-Chief Executive Officer pursuant to 18 U.S.C. §1350 (Section 302 of the Sarbanes-Oxley Act of 2002) (filed herewith)
31.2	Certificate of the Co-Chief Executive Officer pursuant to 18 U.S.C. §1350 (Section 302 of the Sarbanes-Oxley Act of 2002) (filed herewith)
31.3	Certificate of the Co-Chief Executive Officer pursuant to 18 U.S.C. §1350 (Section 302 of the Sarbanes-Oxley Act of 2002) (filed herewith)
31.4	Certificate of the Chief Financial Officer pursuant to 18 U.S.C. §1350 (Section 302 of the Sarbanes-Oxley Act of 2002) (filed herewith)

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