For the fiscal year ended September 30, 2008

Cash paid for interest

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

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ¨ No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes x No ¨

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 if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. Not Applicable 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 ¨

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

Aggregate market value of voting and non-voting common equity held by non-affiliates of the registrant: Because the registrant is privately held and there is no public trading market for the registrant’s equity securities, the registrant is unable to calculate the aggregate market value so held.

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-K is only being filed for informational purposes pursuant to the indenture governing the Company’s 9 ¹/2% Senior Secured Notes due 2014.

This Form 10-K 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 this Form 10-K. 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-K.

We obtained the market and competitive position data used throughout this Form 10-K from our own research, surveys, or studies conducted by third parties and industry or general publications. Industry publications and surveys generally state that they have obtained information from sources believed to be reliable, but do not guarantee the accuracy and completeness of such information. While we believe that each of these studies and publications is reliable, we have not independently verified such data. Similarly, we believe our internal research is reliable, but it has not been verified by any independent sources.

American Rock Salt Company LLC (sometimes referred to herein as the “Company” or “we” or “us”) is 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.

Our principal customers are government agencies that purchase rock salt for ice control on public roadways. Our served market area encompasses New York, Pennsylvania, Massachusetts and six other states. Sales to customers in New York and Pennsylvania accounted for approximately 86.7% of our total sales for fiscal year 2008. No single customer accounted for more than 4.0% of our annual sales during fiscal year 2008.

We have mineral rights to over 10,000 underground acres, of which approximately 80% are located within a one-mile radius of our drill holes. Based solely on data extrapolated from areas within that one-mile radius, we believe that we have approximately 6,509 acres of proven salt reserves with approximately 50 years of remaining mineable reserves at current production rates. In addition, we operate 19 distribution centers in seven states for storage and distribution of rock salt and we operate a fleet exceeding 1,000 rail cars. 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 are located adjacent to Interstate 390, with an entrance approximately 3/10 of a mile from our front gate. We also have on-site rail loading capabilities and ready access to three Class I long-haul rail lines. The following maps show the location of, and access to road and rail transportation from, our mine:

Rock salt is the principal deicing agent used in the United States due to its effectiveness, low cost, and availability. It is easy to ship, handle, store, apply, and is non-toxic and relatively harmless to the environment when properly used. Demand for highway deicing salt continues to grow in the United States and in the Company’s markets. While annual demand for rock salt is subject to variations in snow and ice conditions, the lack of cost effective alternatives, steadily increasing highway infrastructure and the overriding concern for public safety insulates the demand for rock salt from economic cycles. The deicing rock salt market is a highly regional one with a limited number of producers. Transportation and handling costs constitute a significant portion of the overall delivered cost of rock salt. As a result, the proximity of a mine to end users can provide a significant cost advantage.

New York State and the surrounding regions are some of the hardest hit segments of the nation in terms of severe snow and ice conditions. Our primary markets in western and central New York and Pennsylvania are consistently impacted by lake-effect snow. Harsh winters and a very large, mobile population cause New York State and its local municipalities

consistently to be the largest consumers of rock salt in the nation. We estimate that annual purchases by New York State and its local municipalities over the last five winter seasons have averaged over 3.5 million tons. Pennsylvania is also a major consumer of rock salt, but no salt is mined within the state. We estimate that, over the same period, annual purchases by Pennsylvania and its local municipalities averaged approximately 1.9 million tons.

Our mine was first conceived by Akzo Nobel Salt, Inc. (including its predecessors) in the early 1960’s. Mineral rights were acquired over time and state and local planning decisions were made in anticipation of our mine’s eventual development including (a) proper zoning, (b) bounding the site by Interstate Route 390 (I-390) to the west, Route 408 to the south, and Route 63 to the east, and (c) leaving room for a railroad spur to pass under I-390.

In January 1997, American Rock Salt was formed and the Company’s founding members entered into a $4.2 million asset purchase agreement with Akzo to acquire the assets related to our mine. The assets consisted primarily of mining and environmental permits, surface acreage, mineral rights and mineral rights options, certain mining equipment and certain business information and records (consisting principally of all project related surveys, geological exploration studies, engineering reports, construction drawings, and design plans).

Our founding members negotiated a package of governmental grants, loans, tax credits, waivers, and abatements valued at over $25.0 million to help develop our mine. Included in the package were over $8.5 million in grants from New York State, a $9.8 million grant to the Genesee & Wyoming Railroad for construction of a railroad spur, a $0.6 million grant to the local water authority for the mine area, and a 30-year local property tax discount agreement.

Construction of our mine began in November 1998 and was substantially completed in December 2001. Through August 2002, our management made modifications to improve the mine, fine-tuned its processes, and ramped-up production. The Company attained full operating capacity during fiscal 2003.

On June 12, 2007, the Company entered into an Agreement of Merger (the “Merger Agreement”) dated as of June 12, 2007, but effective as of June 13, 2007, with ARS Mergeco LLC, a New York limited liability company (“Mergeco”) and a wholly-owned subsidiary of American Rock Salt Holdings LLC, a New York limited liability company (“Holdings”). Upon consummation of the merger and pursuant to the terms of the Merger Agreement, each of the membership interests in the Company was converted into a corresponding membership interest in Holdings, Mergeco was merged with and into the Company, and the Company became a wholly-owned subsidiary of Holdings. Holdings is a holding company and has no assets or operations other than its ownership of all of the equity interests of the Company.

We currently own or have the rights to approximately 10,000 acres, of which approximately 80% are located within a one-mile radius of our drill holes. Based solely on data extrapolated from areas located within that one-mile radius, we believe that we have approximately 149 million tons of proven mineral rights. We pay a royalty related to the acquisition of mineral rights of 2.5% of the gross income from the mine as reported for purposes of computing percentage depletion for federal income tax purposes. The consistency and quality of the underlying salt deposit has been verified by numerous geological surveys performed by Akzo and its predecessors. As part of the verification of the salt reserves and of the mining permit application process, the consulting firm of Alpha Geosciences, Inc. was retained by Akzo to conduct the geologic exploration program for the mine and to provide geologic logs of holes drilled to establish the thickness, depth, continuity, and quality of the salt reserves.

We are currently mining the B6 Salt Seam, which averages over 19 feet in thickness over the more than 8,000 acres of mineral rights owned by the Company within a one-mile radius of our drill holes and equates to approximately 249 million tons of salt reserves. This is the same seam that was mined continuously for over 110 years at the Retsof mine. To ensure mine working stability, an average of approximately six feet of salt in total is left in place in the mine’s roof and floor, and with a 60% extraction ratio in the production areas, the remaining 40% is retained as solid permanent pillars. The approximately 149 million remaining tons of salt equal the future mineable reserves. Based on tests conducted to date, exploratory results, and the quality control measures discussed below, and further based on mining history within the region of our mine, management believes that all of such reserves meet applicable industry standards, including standards requiring an average sodium chloride (NaCl) content of over 97%. A total of approximately 22.9 million tons have been extracted

through September 30, 2008. Depletion of salt deposits and mineral rights occurs as the minerals are extracted, based on units-of-production and engineering estimates of total reserves. The reserve estimates are primarily a function of the area and volume covered by the mining rights and estimates of extraction rates utilized by the Company with the reasonable expectation of reliably operating the mine on a long-term basis. The above estimates are based solely on data extrapolated from areas located within a one-mile radius of our drill holes. We also own approximately 2,000 additional acres of mineral rights beyond that one-mile radius. Established criteria for proven and probable reserves are primarily applicable to mining deposits of discontinuous metal, where both presence of ore and its variable grade need to be precisely identified. However, the massive continuous nature of evaporative deposits, such as salts, require proportionately less data for the same degree of confidence in mineral reserves, both in terms of quantity and quality. Reserve studies performed by Akzo, its predecessors, and a third-party engineering firm suggest that our salt reserves most closely resemble proven reserves and we have therefore classified our reserves as proven reserves.

We have established Quality Assurance/Quality Control (QA/QC) measures to ensure that our products meet the specifications of the customers we serve. Among other things, we conduct random sample testing on a daily basis to determine the physical properties, chemical properties, and moisture content of our salt. This testing is designed to ensure that our salt meets customer standards and the industry standards published by ASTM International, including standards related to sodium chloride (NaCl) content.

We use the drill and blast mining method at our mine. Rooms are mined in a planned pattern by undercutting, drilling, and blasting. An undercutter cuts a horizontal slot or kerf along the floor of the advancing room to provide a free face for blasting. A drilling rig drills a series of holes into the face and an ammonium nitrate-fuel oil mixture is pneumatically packed into the holes. The room is then blasted, creating a “muck” pile of salt ready to be transported to underground crushing and screening stations. Large mining vehicles move the blasted salt to conveyor belts, which transport the salt to an underground screening plant, where further crushing and screening, if necessary, takes place. After crushing and screening, salt is automatically hoisted to the surface where it is directly loaded into railcars or trucks, or added to an on-site stockpile for later truck shipment. We believe that we have one of the most automated systems in the industry. After salt is placed on the conveyor belt, the processing and loading functions are completely automated. We believe that the mine and the operating equipment are maintained in good working condition.

The “salting” season runs primarily from October to March with the highest demand typically in December, January, and February. Consumption of highway deicing rock salt is impacted by the severity of winter weather. While it is true that individual snow storms with large accumulations require a great deal of salt, numerous small snow and ice storms tend to require more salt. For example, we believe that a 2-inch snowstorm requires nearly as much salt as a 6-inch storm. It is the type of storm that dictates the frequency of application and the total amount of salt needed. In addition, freezing rain and ice storms also require substantial amounts of salt.

Our principal customers are states, counties, and municipalities that purchase bulk salt for ice control on public roadways. Annual supply contracts generally are awarded on the basis of lowest price of tendered bids once the purchaser is assured that the minimum requirements for purity, service, and delivery can be met. The bid market eliminates the need for us to invest significant time and effort in marketing and advertising or to have a large direct sales force or network of dealers or distributors.

Salt is contracted at a “delivered price,” wherein the mine is responsible for substantially all of the freight and handling costs incurred to deliver the salt to the customer. Generally, the delivered price increases as the distance between the customer and the mine increases. While in general each mine can best supply its local area more profitably than competitors, the competitive advantage is directly impacted by factors such as mode of freight, available inventory and fuel prices, thereby at times allowing us to supply distant customers as profitably as we supply our local customers.

In our industry, salt sold to customers within 100-150 miles of a mine is usually shipped by truck directly to the customer from the stockpile located at a mine. All other salt is typically first shipped by rail to various strategically located stockpiles, stored until needed, and then shipped by truck from the stockpiles to customers. Historically, salt sold locally is more profitable due to: (i) lower transportation costs, (ii) lower handling costs as salt is moved only once from a mine to the customers, and (iii) elimination of expenses for off-site stockpile storage facilities. Nonetheless, as a result of continuing improvements in our logistical capabilities, the gross profit per ton of salt sold from stockpiles has been steadily increasing.

We sell to our target markets by distributing approximately half of our salt by direct truck shipments from our mine to customers in western New York and western Pennsylvania, while distributing approximately half by railcar to our 19 stockpiles which serve the rest of New York and Pennsylvania and the seven other states where we have sales. The concentrated demand period for rock salt, limited customer storage facilities and delivery distance considerations necessitate off-site stockpiles in order to deliver rock salt within 3-5 days of an order. The Company currently operates 19 such off-site stockpiles and plans to add two or three additional stockpiles in the next 12 months. The Company currently operates a fleet exceeding 1,000 railcars on a year-round basis to transport the salt from our mine to our stockpiles. In addition, we are located adjacent to Interstate 390 and have on-site rail loading capabilities and ready access to three Class I long-haul rail lines.

New York State and the area east and southeast of Lake Ontario and Lake Erie in particular, is one of the hardest hit areas of the country in terms of winter severity. Bad winters coupled with a very large, mobile population result in New York State consistently being the largest consumer of rock salt in the United States. The harsh winter weather that western and central New York and Pennsylvania experience is in part attributable to a phenomenon known as lake-effect snow. Lake-effect snow is generated from the temperature contrast between cold arctic air moving west-to-east over the relatively warm waters of the Great Lakes. Generally, the greater the contrast between arctic air and water temperature, the greater the amount of snowfall. Lake-effect snows are common over the Great Lakes region because these large bodies of water can hold their summer heat well into the winter, rarely freeze over, and provide the long fetch (or the distance an air mass travels over water) which allows the air to gain the heat and moisture required to fuel the snow squalls. Furthermore, because winds accompanying arctic air masses generally originate from a southwest to northwest direction, lake-effect snow typically falls on the east or southeast sides of the lakes. Lake Ontario and Lake Erie stretch west-to-east lengthwise, which places western New York and Pennsylvania, located immediately east and southeast of the lakes, directly in the path of the largest west-to-east fetch in the United States.

Highway deicing salt is a highly regional market with a number of competitors that have significant cost advantages in the proximity of their production facilities. The geographic dispersion of rock salt mines allows some of our major competitors to prosper in their respective locales. United States rock salt mines are concentrated around the five major underground salt deposits in the United States and the primary means of competition among rock salt producers is price. There are three large integrated producers in the North American deicing market: Cargill, Inc., Compass Minerals Group, Inc., and Morton International. In addition to the three large nationally recognized companies, there are several smaller regional producers of highway deicing salt. There are also importers of salt into North America, and the imports are generally confined to the eastern seaboard of the United States.

The Company had 266 full-time salaried and hourly employees as of September 30, 2008. The Company’s hourly production employees are covered by a labor agreement with the United Steel Workers International Union, AFL-CIO-CLC, formerly the Paper, Allied-Industrial, Chemical & Energy Workers International Union, Local 1-0763, which expires in October 2012.

Salt mining is considerably less hazardous than other forms of underground mining. In fact, the Company enjoys a reduced workers’ compensation insurance rate for the mine’s underground workers as a result of a more favorable experience rating. In addition, there are no known long-term health problems associated with salt mining.

The production and distribution of deicing products are subject to various federal, state and local laws and regulations that regulate: (i) the conduct of our mining operations, including safety procedures followed by our employees; (ii) the use of our products by our customers; (iii) the handling of raw materials; (iv) the air and water quality impacts of our facility; (v) the disposal, storage and management of hazardous and solid wastes; (vi) the remediation of contamination at our facility and sites; and (vii) post-mining land reclamation. The regulations governing these activities are subject to change from time to time, so we cannot estimate with certainty the costs that we will incur to assure future compliance. We intend to comply with all applicable regulatory requirements associated with our business operations and will implement such modifications to our practices and to our facilities as is necessary.

We did not make any material capital expenditures in order to comply with applicable environmental, health and safety standards during fiscal 2008.

You should carefully consider the following risks and all of the information set forth in this annual report on Form 10-K. The risks facing our Company are not limited to those listed below. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also materially and adversely affect our business, financial condition, or results of operations.

The demand for our products changes seasonally and is dependent upon weather conditions.

Our business is highly seasonal, with operating results varying from quarter to quarter. The “salting” season runs primarily from October through March, with the highest demands typically in December, January, and February. During our history, we have generated approximately 75% of our sales during the months of December through March, when the need for highway deicing is at its peak. We need to produce and stockpile sufficient highway deicing salt during the remainder of the year to meet estimated demand for the winter season.

Consumption of highway deicing salt is impacted by the severity of winter weather, including the number of snow storms and the accumulations associated with those storms. Weather conditions which impact our highway deicing product line include levels of temperature, precipitation, snow days, and duration and timing of snowfall in our relevant geographic markets. Lower than expected sales during this period could have a material adverse effect on the timing of our cash flows and therefore our ability to service our obligations with respect to our indebtedness.

Highway deicing salt is a highly regional market with a number of competitors that have significant cost advantages associated with the proximity of their production facilities to their customers. Although the primary means of competition is price, there are a number of other considerations affecting competition including product performance, cost of transportation in the distribution of salt, brand reputation, quality of client service, and customer support. To remain competitive, we may need to invest in production, marketing, customer service and support, and our distribution networks. We may have to adjust the prices of some of our products to stay competitive. We cannot assure you that we will have sufficient resources to continue to make such investments or that we will maintain our competitive position. Some of our competitors have greater financial and other resources than we do.

Principal customers in our industry are states, counties, and municipalities that purchase bulk salt for ice control on public roadways. Annual supply contracts generally are awarded on the basis of the lowest price of tendered bids once the purchaser is assured that its minimum requirements for quality, service, and delivery can be met. While this bid process mitigates the need to make expenditures for marketing and reduces the need for a large sales force, it requires us to rely primarily on our ability to be price competitive to maintain our existing accounts and acquire new accounts. The loss of accounts as a result of the competitive bid process could have a material adverse effect on our business.

We may be subject to certain penalties if we fail to meet performance requirements in our sales contracts.

We are a party to various salt sales contracts which include specific performance provisions governing delivery and product specifications. If we fail to meet our performance requirements, we could be subject to penalties. The amount of such performance penalties, if any, is dependent upon our failure to meet such requirements, as well as other factors such as weather patterns and related product demand in our served markets. As a result, we cannot estimate the likelihood or amount of any such performance penalties.

Increasing costs or a lack of availability of transportation services could have an adverse effect on our ability to deliver products at competitive prices.

Because of salt’s relatively low production cost, transportation and handling costs tend to be a significant component of the total delivered cost of sales. The high relative cost of transportation tends to favor manufacturers located close to the customer. We contract shipping, trucking and rail services to move salt from our production facilities to our stockpiles and to our customers. In many instances, we have committed to deliver salt, under penalty of non-performance, up to nine months or more prior to having produced the salt for delivery to our customers. A reduction in the dependability or availability of transportation services or a significant increase in transportation service rates could impair our ability to deliver salt economically to our markets and impair our ability to expand our markets.

We may be adversely affected by the environmental regulations to which we are subject.

We are subject to numerous environmental, health and safety laws and regulations in the United States, including laws and regulations relating to land reclamation and remediation of hazardous substance releases, and discharges to air and water. For example, the U.S. Comprehensive Environmental Response, Compensation, and Liability Act, or “CERCLA,” imposes liability, without regard to fault or to the legality of a party’s conduct, on certain categories of persons (known as “potentially responsible parties”) who are considered to have contributed to the release of “hazardous substances” into the environment. Although we are not currently incurring material liabilities pursuant to CERCLA, we may in the future incur material liabilities, under CERCLA and other environmental cleanup laws, with regard to our mining facilities, adjacent or nearby third party facilities or offsite disposal locations. Under CERCLA, or its various state equivalents, one party may, under certain circumstances, be required to bear more than its proportional share of cleanup costs at a site where it has liability if payments cannot be obtained from other responsible parties. Liability under these laws involves inherent uncertainties. Violations of environmental, health and safety laws are subject to civil, and in some cases criminal, sanctions.

Continued government and public emphasis on environmental issues can be expected to result in increased future investments for environmental controls at ongoing operations, which will be charged against income from future operations. Present and future environmental laws and regulations applicable to our operations may require substantial capital expenditures and may have a material adverse effect on our business, financial condition, and results of operations.

Our operations are dependent on our having received the required permits and approvals from governmental authorities.

We hold numerous environmental, mining, and other permits and approvals issued by governmental authorities that are necessary to maintain operations at our facilities. A decision by a governmental agency to deny or delay issuing a new or renewed permit or approval, or to revoke or substantially modify an existing permit or approval, could have a material adverse effect on our ability to continue operations at the affected facility. Expansion of our existing operations also is predicated upon securing the necessary environmental or other permits or approvals.

Our business could suffer if we are unsuccessful in negotiating new collective bargaining agreements.

We have a collective bargaining agreement covering our hourly production employees with the United Steel Workers International Union, AFL-CIO-CLC, Local 763, which will expire in October 2012. Although we believe that our relations with our employees are good, we cannot assure you that we will be successful in negotiating new collective bargaining agreements, that such negotiations will not result in significant increases in the cost of labor or that a breakdown in such negotiations will not result in the disruption of our operations.

The success of our business is dependent on our senior management, as well as on our ability to attract and retain other qualified personnel. We cannot assure you that we will be able to attract and retain the personnel necessary for the development of our business. The loss of the services of key personnel or the failure to attract additional personnel as required could have a material adverse effect on our business, financial condition, and results of operations. We do not currently maintain “key person” life insurance on any of our key employees.

We face competition from both existing products and products under development.

There are numerous alternative deicing products, both in existence and under development. While these products are currently believed to be substantially more expensive and less effective than rock salt, there can be no assurances that certain of the current or developing alternative deicing products will not become as or more effective than salt. There can be no assurances that alternative deicers, or new deicing agents to be used with salt, will not gain widespread acceptance and result in diminished demand for rock salt which could have a material adverse effect on our business.

The Retsof mine, which was located approximately seven miles from our mine and had extensive workings below the Genesee River Valley, flooded in 1994. There can be no assurances that our mine, despite our use of more conservative mining methods and our direction of mining operations away from the valley, will not be exposed to the risk of flooding, which could have a material adverse effect on our business.

Mining activities are subject to a variety of governmental regulations, including the need to comply with laws relating to the reclamation of the land and other environmental legislation. Compliance with such regulation requires significant capital outlays. Existing, as well as future, legislation and regulation concerning mining operations could cause additional expense, operating restrictions, and delays in maintaining mining operations, the extent of which cannot be predicted.

Our mining permit will expire in October 2011. Permit renewal is an automatic action by the New York Department of Environmental Conservation (“DEC”) for mines wishing to continue in business, absent flagrant violation of permit terms or refusal of a permittee to correct violations of one or more permit conditions. In either of such cases, the DEC can revoke a permit or delay renewal until violations are corrected.

Pending legislation which affects environmental laws applicable to mining includes proposals which may substantially alter the Clean Water Act, Safe Drinking Water Act, and the Endangered Species Act. There can be no assurances that adverse regulatory developments and operating requirements will not impair our ability to operate our mine and will not have a material adverse effect on our business.

Our highway deicing customers principally consist of municipalities, counties, states and other governmental

entities in the Northeastern U.S. We are required to comply with numerous laws and regulations administered by federal, state, local and foreign governments relating to, but not limited to, the production, transporting and storing of our products as well as the commercial activities conducted by our employees and our agents. Failure to comply with applicable laws and regulations could preclude us from conducting business with governmental agencies and lead to penalties, injunctions, civil remedies or fines.

The business of mining is subject to a variety of risks and hazards, not all of which can be covered by insurance.

The business of salt mining is generally subject to a number of risks and hazards, including environmental hazards, industrial accidents, labor disputes, unusual or unexpected geological conditions, changes in the regulatory environment and natural phenomena such as earthquakes, earth movement, and floods. Such occurrences could result in damage or impairment to, or destruction of, mineral properties or production facilities, personal injury or death, property or environmental damage, delays in mining, business interruption, monetary losses, and legal liability. While insurance is not commonly available for all these risks, we do maintain insurance against risks that are typical and reasonably insurable in the salt mining industry and in amounts that we believe to be reasonable but which will contain limits, deductibles, exclusions, and endorsements. There can be no assurance that the coverage and amount of insurance will be sufficient for the needs of the Company.

We depend upon geological surveys and studies and there can be no assurance as to the accuracy of such studies.

Continued salt production is dependent upon the existence of an adequate quantity and quality of salt in our salt deposits. While numerous geological surveys and studies have been performed to determine the size and quality of our salt deposits, there can be no assurances that our salt deposits will not be subject to premature depletion or contain pockets where quality is below production grade. Inadequate quantity or quality of our salt deposits would have a materially adverse effect on the results of operations of our business.

We have certain agreements with our affiliates which may create conflicts of interest.

We have entered into agreements with or have had certain transactions with related parties, including the payment of mine acquisition costs to persons who are members of Holdings. We have also obtained legal services from a law firm with which several of our affiliates are partners, and certain of our affiliates have received management, advisory and service fees from us. These transactions may create conflicts of interest which may not be resolved in the manner most favorable to holders of notes.

We are controlled by Holdings, which in turn is controlled by its principal members, whose interests in our business may be different than those of the holders of our notes.

Joseph G. Bucci, Gunther K. Buerman, and Neil L. Cohen, our principal founding members, collectively hold over 90% of the Class F membership interests in Holdings, which is our sole member. Because of their ownership interests in Holdings, Messrs. Bucci, Buerman, and Cohen have the power to elect all three of the Class F managers on our Board of Managers. Under the terms of our operating agreement, each Class F manager has three votes on all matters submitted to a vote of the Board of Managers, and each Class A manager has one vote on all matters submitted to a vote of the Board of Managers. Therefore, Messrs. Bucci, Buerman, and Cohen collectively have voting control over all matters submitted to a vote of the Board of Managers other than matters in which one or more of such individuals has a financial interest. Additionally, Messrs. Bucci, Buerman, and Cohen comprise the Executive Committee of the Board of Managers, which generally exercises the authority of the Board of Managers except with respect to certain items required to be submitted to a vote of the entire Board of Managers in accordance with our operating agreement.

As a result of the majority ownership interest by Messrs. Bucci, Buerman and Cohen, their interests could conflict with those of the holders of our notes. For example, if we encounter financial difficulties or are unable to pay our debts as they mature, the interests of those individuals as equity holders in Holdings might conflict with the interests of a holder of our notes, as a debt holder. Messrs. Bucci, Buerman and Cohen or their affiliates might also have an interest in pursuing transactions that, in their judgment, could enhance their equity investments in Holdings, even though such transactions might involve risks to the holders of our notes.

Our substantial indebtedness could adversely affect our financial condition and prevent us from fulfilling our obligations under our indebtedness.

As of September 30, 2008, we had approximately $96.2 million of indebtedness, including $38.6 million of indebtedness under our bank facility, $57.5 million of indebtedness under our senior secured notes, and $0.1 million of indebtedness under our promissory note payable to the Empire State Development Corporation. As a result, we are a leveraged company. This level of leverage could have important consequences to our financial condition, including the following:

In addition, the indenture governing our senior secured notes and our bank facility contain financial and other restrictive covenants that may limit our ability to engage in activities that may be in our long-term best interests. Our failure to comply with those covenants could result in an event of default which, if not cured or waived, could result in the acceleration of all of our indebtedness.

Despite our substantial indebtedness we may still incur significantly more debt. This could exacerbate the risks described above.

The terms of the indenture governing our senior secured notes permit, and our bank facility, permits us to incur additional indebtedness in the future. We are able to borrow up to $30.0 million under our working capital facility, subject to certain conditions. The Company had outstanding borrowings in the amount of $19.0 million at September 30, 2008 under the working capital facility.

The proceeds from the collateral securing our indebtedness may not be sufficient to pay all amounts owed under such indebtedness.

If we default on our bank facility or our senior secured notes, the proceeds from the sale of the collateral may not be sufficient to satisfy in full our obligations under the bank facility and the notes. An intercreditor agreement sets forth the relative rights to the collateral of the lenders under the bank facility and the holders of the senior secured notes. Proceeds from the sale of the collateral will be used first to satisfy obligations under the bank facility and, thereafter, the senior secured notes. The lenders under the bank facility will have the sole ability to control foreclosure and sale of the collateral. The amount to be received upon such a sale would depend upon numerous factors, including, among others, the timing, manner, and ability to sell the collateral in an orderly sale, the condition of the collateral, the condition of the national and local economies, the availability of buyers and similar factors. The book value of the collateral should not be relied upon as a measure of realizable value for such assets. By their nature, portions of the collateral are illiquid and may have no readily ascertainable market value. Accordingly, there can be no assurance that the collateral could be sold in a short period of time or that the proceeds obtained from such a sale would be sufficient to pay all amounts owing under the bank facility and the senior secured notes. Additionally, the terms of the indenture governing our senior secured notes allow us to issue additional notes provided that we meet the Consolidated Fixed Charge Coverage Ratio (as defined in the indenture). Any additional

notes issued pursuant to the indenture will rank equal to the notes and will be entitled to the same rights and priority with respect to the collateral. Thus, the issuance of additional notes pursuant to the indenture may have the effect of significantly diluting the ability of a holder of our senior secured notes to recover payment in full from the then existing pool of collateral.

To the extent that holders of other secured indebtedness or third parties enjoy liens (including statutory liens), whether or not permitted by the indenture governing the senior secured notes, such holders or third parties may have rights and remedies with respect to the collateral securing the senior secured notes that, if exercised, could reduce the proceeds available to satisfy the obligations under the senior secured notes.

The ability of the trustee to foreclose on the collateral securing the senior secured notes may be limited.

The right of the trustee to repossess and dispose or otherwise exercise remedies in respect of the collateral securing the senior secured notes upon the occurrence of an event of default is likely to be significantly impaired by applicable bankruptcy law if a bankruptcy proceeding were to be commenced by or against us prior to the trustee having repossessed and disposed of the collateral or otherwise completed the exercise of its remedies with respect to the collateral. Under the United States Bankruptcy Code, a secured creditor such as the trustee is prohibited from repossessing its security from a debtor in a bankruptcy case, or from disposing of security repossessed from such debtor, without bankruptcy court approval. Moreover, the Bankruptcy Code permits the debtor to continue to retain and to use collateral even though the debtor is in default under the applicable debt instruments if the secured creditor is given “adequate protection.” The meaning of the term “adequate protection” may vary according to circumstances, but it is intended in general to protect the value of the secured creditor’s interest in the collateral securing the obligations owed to it and may include cash payments or the granting of additional security, if and at such times as the bankruptcy court in its discretion determines, for any diminution in the value of such collateral as a result of the stay of repossession or disposition or any use of the collateral by the debtor during the pendency of the bankruptcy case. In view of the lack of a precise definition of the term “adequate protection” and the broad discretionary powers of a bankruptcy court, it is impossible to predict how long payments under the senior secured notes could be delayed following commencement of a bankruptcy case, whether or when the trustee could repossess or dispose of the collateral or whether or to what extent holders of the senior secured notes would be compensated for any delay in payment or loss of value of the collateral through the requirement of “adequate protection.” Furthermore, if a bankruptcy court determines that the value of the collateral is not sufficient to repay all amounts due on the notes; holders of the senior secured notes would hold “under-secured claims.” Applicable federal bankruptcy laws do not permit the payment or accrual of interest, costs, and attorney’s fees for “under-secured claims” during a debtor’s bankruptcy case.

Moreover, the trustee may need to evaluate the impact of the potential liabilities before determining to foreclose on collateral consisting of real property because a secured creditor that holds a lien on real property may be held liable under environmental laws for the costs of remediating or preventing release or threatened releases of hazardous substances at such real property. Consequently, the trustee may decline to foreclose on such collateral or exercise remedies available if it does not receive indemnification to its satisfaction from the holders of the senior secured notes.

The trustee’s ability to foreclose on the collateral securing the notes may be subject to lack of perfection, the consent of third parties, prior liens, and practical problems associated with the realization of the trustee’s lien on the collateral.

The lien on the collateral securing the senior secured notes is junior in some respects to the lien securing our bank facility.

Although the senior secured notes are secured by substantially all of our assets, we maintain a $49.6 million bank facility, and the lien on the collateral securing that bank facility is senior to the lien on the collateral securing the notes in accordance with an intercreditor agreement. As a result, upon any distribution to our creditors in a bankruptcy, liquidation or reorganization or similar proceeding relating to us or our property, the lenders under the bank facility will be entitled to be paid in full from the proceeds of the collateral securing such debt before any payment may be made with respect to the senior secured notes.

Restrictive covenants in our bank facility and the indenture governing the senior secured notes may restrict our ability to operate our business.

Our bank facility and the indenture governing the senior secured notes contain covenants that limit our ability, among other things, to:

Our ability to comply with these covenants may be affected by events beyond our control. We cannot assure you that we will satisfy these covenants. A breach of any of these covenants could result in a default under the indenture governing the senior secured notes or our bank facility, which could allow all amounts outstanding thereunder to be declared immediately due and payable, in which case we may be required to adopt an alternative strategy that may include actions such as reducing or delaying acquisitions and capital expenditures, selling assets, restructuring or refinancing our indebtedness, seeking additional equity capital or filing for bankruptcy. If we default under our bank facility, we could be prohibited from making any payments on the senior secured notes. In addition, the lenders under our bank facility could require immediate repayment of the entire principal amount of their loans. If those lenders require immediate repayment, we may not be able to repay them and also repay the senior secured notes in full.

In addition, the indenture governing the senior secured notes and our bank facility require us to maintain financial ratios. We may not be able to maintain these ratios. Covenants in our bank facility may also impair our ability to finance future operations or capital needs or to enter into acquisitions or joint ventures or engage in other favorable business activities.

To service our indebtedness, including the senior secured notes, we will require a significant amount of cash. The ability to generate cash depends on many factors beyond our control.

Our ability to make payments on and to refinance our indebtedness, including our senior secured notes, and to fund planned capital expenditures will depend on our ability to generate cash in the future. This, to a certain extent, is subject to general economic, financial, competitive, legislative, regulatory, climate, and other factors that are beyond our control.

We cannot assure you that our business will generate sufficient cash flow from operations that our business plans will be implemented as scheduled, or that future borrowings will be available to us in an amount sufficient to enable us to pay our indebtedness, including our senior secured notes, or to fund our other liquidity needs. We may need to refinance all or a portion of our indebtedness, including the senior secured notes, on or before maturity. We cannot assure you that we will be able to refinance any of our indebtedness, including the bank facility and the senior secured notes, on commercially reasonable terms or at all.

We may not have the ability to raise the funds necessary to finance any change of control offer required by the indenture governing the senior secured notes.

If we undergo a change of control (as defined in the indenture governing our senior secured notes) we may need to refinance large amounts of our debt, including the senior secured notes and borrowings under our bank facility. If a change

of control occurs, we must offer to buy back the senior secured notes for a price equal to 101% of the principal amount of the senior secured notes, plus any accrued and unpaid interest. We cannot assure you that there will be sufficient funds available for us to make any required repurchases of the notes upon a change of control. The bank facility will provide that the occurrence of certain change of control events with respect to us will constitute a default under the bank facility. Therefore, if a change of control were to occur, we may be required to repay or refinance all borrowings under the bank facility. Any future debt which we incur may also contain restrictions on repayment upon a change of control. If any change of control occurs, we cannot assure you that we will have sufficient funds to satisfy all of our debt obligations.

Historically, the market for non-investment grade debt has been subject to disruptions that have caused substantial volatility in the prices of securities similar to the senior secured notes. The market for the senior secured notes, if any, may be subject to similar disruptions. Any such disruptions may adversely affect the value of our senior secured notes.

Information regarding our mine and properties, including a map showing the location of our principal mining facility, is included in Item 1, “Business,” of this report. In addition, we own and are a party to non-mining leases of property that permit us to perform activities ancillary to our mining operations, such as storage, depot, and warehouse leases. We believe that all of the leases were entered into on market terms.

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.

There were no matters brought to the holder of our membership interests for a vote during the fourth quarter of fiscal 2008.

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

The Company’s outstanding common equity consists of Class A Units and Class F Units. As of September 30, 2008, there were 6,250 Class A Units outstanding, all of which were held by Holdings, and 12,750 Class F Units outstanding, all of which were held by Holdings.

The Company may from time to time make distributions to its member subject to the restrictions of the Company’s bank facility and the indenture governing its senior secured notes, which contain certain covenants and financial ratios restricting the Company’s ability to make such distributions. Per the agreement governing Holdings’ credit facility, Holdings is required to cause the Company to pay an annual cash dividend to Holdings. The amount of the dividend must be no less than 75.0% of its “available free cash flow”, wherein “available free cash flow” includes a number of financial components in its determination but cannot exceed the amount the Company is permitted to pay as a cash distribution under its existing credit facilities or the indenture governing its senior secured notes. During fiscal 2008, the Company made a permitted cash distribution in the amount of $8.4 million from fiscal year end 2007 earnings. As a Restricted Subsidiary, as defined in the agreement governing Holdings’ credit facility, the Company is subject to financial and other restrictions that are comparable to existing restrictions under the Company’s senior secured notes.

The following table sets forth selected financial and operating data of the Company for each year in the five-year period ended September 30, 2008. The financial data and certain operating data have been derived from the Company’s audited financial statements. The financial and operating data should be read in conjunction with the financial statements and related notes included under Item 8 of this report and in conjunction with other financial information included elsewhere in this Form 10-K.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

The statements in this discussion regarding the industry outlook, our expectations regarding the future performance of our business, and the other non-historical statements in this discussion are forward-looking statements. These forward-looking statements are subject to numerous risks and uncertainties, including, but not limited to, the risks and uncertainties described in the section entitled “Risk Factors” included in Item 1A of this Form 10-K. You should read the following discussion with the section entitled “Risk Factors” and the financial statements and notes thereto included elsewhere in this annual report on Form 10-K.

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 the most impacted by harsh winter snow and ice conditions and overall demand across the region is relatively stable. Our served markets in New York, Pennsylvania, Massachusetts and six other states have an aggregate regional demand for over 11.2 million tons per year of rock salt, and Pennsylvania and New England currently have no operating rock salt mines.

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.

As a result of our strategic initiatives to increase profitability by optimizing pricing, bidding, and distribution while reducing freight costs, we have successfully increased revenues and EBITDA from $96.5 million and $26.9 million, respectively, in fiscal 2004 to $190.2 million and $57.7 million in fiscal 2008 (see “EBITDA” below for a reconciliation of EBITDA to net income, the most directly comparable financial measure prepared in accordance with GAAP). For the 2008-2009 season, our awarded contract tonnage has increased as compared to the prior two winter seasons.

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 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.

We have calculated the estimated net future cost of dismantling, restoring, and reclaiming our mine and 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.

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 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.

The following table sets forth certain historical financial information for the fiscal years ended September 30, 2008 2007, and 2006. 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 of the business trends.

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-K.

Fiscal Year Ended September 30, 2008 Compared to Fiscal Year Ended September 30, 2007

Total sales for the fiscal year ended September 30, 2008 of $190.2 million increased $68.9 million, or 56.8%, as compared to $121.3 million during fiscal 2007. Sales primarily consist of bulk salt sales, as well as packaged salt sales. The increase was primarily attributable to a 39.9% increase in tonnage sold combined with a 12.0% increase in average sales price per ton. The increase in sales volume and price per ton are directly related to strong winter weather conditions in our served market areas and our successful bidding results, as well as a favorable change in our customer mix between local and remote stockpiles over fiscal 2007.

Gross income for the fiscal year ended September 30, 2008 of $58.2 million increased by $28.9 million, or 98.6%, compared to $29.3 million for 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 fiscal year ended September 30, 2008 increased by 42.7% as compared to the same period in fiscal 2007, due to the fact that gross profit per ton for the fiscal year ended September 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 successful bidding results and favorable customer mix. Cost of goods sold for fiscal 2008 increased by $40.0 million, or 43.5%, 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 in addition to an increase in fuel expense as a result of higher prices of diesel as compared to the prior fiscal year. On a percentage of sales basis, cost of goods sold decreased by 6.5% due to the same factors that caused the increase in gross profit per ton as discussed above.

Operating expenses of $8.6 million for fiscal 2008 increased $1.0 million, or 13.2%, as compared to $7.6 million for 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 a $1.0 million increase in stockpile expenses, which include repairs, permitting and environmental fees, and general stockpile operating expenses. In addition, 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 $0.1 million decrease related to idle rail car expense.

Other expense of $11.5 million for fiscal 2008 increased by $0.2 million, or 1.8%, compared to $11.3 million in fiscal 2007. The increase is primarily due to a $2.6 million increase in interest expense related to the purchase of certain of our 9 ¹/2% Senior secured Notes due 2014 during fiscal 2008, which includes a $1.3 million increase related to the accelerated amortization of deferred financing costs and a $1.3 million increase in bond premium paid. The increase is also due to a $0.1 million decrease in interest income related to a lower average cash balance in the daily credit sweep. The $2.7 million increase in interest expense related to the bond purchase described above is partially offset by a net reduction of $1.8 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 $0.7 million related to a reduced balance outstanding under the Company’s credit facility and lower interest rates on that outstanding balance when compared to fiscal 2007.

Fiscal Year Ended September 30, 2007 Compared to Fiscal Year Ended September 30, 2006

Total sales for the fiscal year ended September 30, 2007 of $121.3 million increased $25.6 million, or 26.8%, as compared to $95.7 million during fiscal 2006. Sales primarily consist of bulk salt sales, as well as packaged salt sales. The increase was primarily attributable to a 17.9% increase in tonnage sold combined with a 7.6% increase in sales price per ton. The increase in tonnage sold was due to an increase in seasonal tonnage commitments as well as the late arriving but significantly colder and snowier winter weather conditions in fiscal 2007, as compared to fiscal 2006.

Gross income for fiscal 2007 of $29.3 million decreased by $2.5 million, or 8.0%, compared to $31.8 million for fiscal 2006. The decrease in gross income was primarily attributable to a 22.3% increase in average cost of sales per ton partially offset by a 7.6% increase in revenue per ton sold over fiscal 2006. Total cost of sales for the year increased by $28.2 million or 44.1% as compared to fiscal 2006, while on a percentage of sales basis, total cost of sales increased by 9.1%. Total cost of sales increased as a result of the combination of the 17.9% increase in volume and the 22.3% increase in cost of sales per ton. Gross profit per ton decreased by 22.0% as a result of the increase in cost of sales price per ton, partially offset by the increase in the average sales price per ton referred to above. The increase in cost of sales per ton is primarily due to the temporary cessation of salt production and inventory staging activities during the first and second quarters of fiscal 2007 and increased freight and handling due to higher fuel costs. Many of these factors were related to the milder than normal winter weather we experienced during those first two fiscal quarters, which resulted in less efficient absorption of our production, freight and handling costs during fiscal year 2007.

Operating expenses of $7.6 million for fiscal 2007 decreased $0.3 million, or 3.8%, as compared to $7.9 million for fiscal 2006. Operating expenses primarily consist of selling, general and administrative expenses, miscellaneous overhead and non-production related depreciation and amortization expenses. The decrease in operating expenses for fiscal 2007 is primarily attributable to a $0.2 million decrease in accounting expense related to the change in accounting principle we adopted during fiscal 2006, as discussed in Note 2 to our audited financial statements included elsewhere in this Form 10-K, as well as a $0.1 million decrease in other miscellaneous general and administrative expenses.

Other expense of $11.3 million for fiscal 2007 increased $1.5 million, or 15.3%, as compared to $9.8 million in fiscal 2006. This increase is related to the $2.1 million received in connection with the settlement of the litigation with the EPC Contractor in fiscal year 2006, as discussed in Note 8 to our financial statements included elsewhere in this Form 10-K, in addition to an increase of $0.1 million in interest expense related to our bank facility. The increase in other expense was partially offset by a $0.4 million decrease in bond interest expense related to our repurchase of certain of our 9 1/2% Senior Secured Notes due 2014 during the first and fourth quarters of fiscal 2007 and a $0.3 million increase in interest income related to a higher average cash balance in the daily credit sweep.

We have used the cash generated from operations, borrowings under revolving lines of credit, and borrowings under construction and post-construction financing facilities to meet our working capital needs and to fund capital expenditures. Our ongoing cash flows have served to significantly strengthen our working capital position, while funding debt service, capital expenditures and permitted distributions to our members. Additional information regarding our cash flows for fiscal 2008 is provided below. For any short or long term cash requirements we will continue to access funding through our revolving line of credit.

Fiscal Year Ended September 30, 2008 Compared to Fiscal Year Ended September 30, 2007

Operating Activities—Net cash provided by operating activities was $46.6 million as compared to $22.1 million during fiscal 2007. The $24.5 million increase is primarily related to the vigorous winter weather and improved contract awards which increased salt sales during the fiscal year, leading to increased gross income, as discussed above.

For the fiscal year ended September 30, 2008, the $46.6 million in net cash provided by operating activities was primarily attributable to net income of $38.1 million and a decrease in inventory of $2.4 million related to increased sales occurring in fiscal year 2008. Cash provided by operating activities during fiscal 2008 was also the result of depreciation and amortization of $7.8 million; and increases in accrued expenses and accounts payable of $3.8 million, a result of late timing of invoicing. This positive cash flow activity was offset by an increase in accounts receivable of $5.6 million, a result of an increase in sales late in the fourth quarter of fiscal 2008, payments for which were not yet due.

Investing Activities—Net cash flow used in investing activities for fiscal 2008 and 2007 was $6.7 million and $3.2 million respectively. The $3.5 million increase is attributable to the increased purchase of property and equipment in fiscal 2008 as compared to prior year, including purchases of heavy equipment, stockpile and mine facility improvements and miscellaneous ordinary course purchases.

Financing Activities—Net cash used in financing activities during fiscal 2008 was $40.8 million as compared to $18.8 million used during fiscal 2007. The $22.0 million increase is primarily attributable to a $27.5 million increase in cash used to purchase certain of our 9¹/2 % Senior Secured Notes due 2014 as well as a $2.4 million increase in distributions to Holdings, our sole member. These increases were partially offset by an increase of $8.1 million of net activity under the Company’s revolving line of credit during fiscal 2008 as compared to fiscal 2007.

Fiscal Year Ended September 30, 2007 Compared to Fiscal Year Ended September 30, 2006

Operating Activities – Net cash provided by operating activities was $22.1 million for fiscal 2007 compared to $8.4 million during fiscal 2006. The $13.7 million increase is primarily related to the late but vigorous winter weather and associated increased sales occurring in fiscal year 2007 which resulted in an $18.4 million positive cash flow change related to a decrease in inventory from increased sales across our market region when compared with fiscal 2006 and an increase in sales late in the season, offset by a $4.4 million decrease in cash flow related to an increase in accounts receivable due to the increased sales late in the fourth quarter of fiscal 2007.

For the fiscal year ended September 30, 2007, the $22.1 million in net cash from operating activities was primarily attributable to net income of $10.4 million and a decrease in inventory of $7.5 million related to the fiscal year 2006 build up of inventory and the subsequent late arriving but vigorous winter weather and increased sales occurring in fiscal year 2007. Cash provided by operating activities during fiscal 2007 was also the result of normal depreciation and amortization of $5.8 million; a decrease in prepaid expenses and other assets of $0.4 million, a result of timing of the amortization of our prepaid expenses; and increases in accrued expenses and accounts payable of $0.7 million and $0.8 million, respectively, a result of late timing of invoicing. This positive cash flow activity was offset by an increase in accounts receivable of $3.6 million, a result of an increase in sales late in the fourth quarter of fiscal 2007.

Investing Activities – Net cash flow used in investing activities for fiscal 2007 and 2006 was $3.2 million and $4.1 million respectively. The $0.9 million decrease is attributable to a decrease in the purchase of property and equipment in fiscal 2007 as compared to the prior fiscal year.

Financing Activities – Net cash used in financing activities during fiscal 2007 was $18.8 million as compared to $4.1 million used during fiscal 2006. During the fiscal year ended September 30, 2007, repayments, net of borrowing, on our revolving credit facility totaled $5.1 million, and we used an additional $6.0 million to repurchase certain of our 9 1/2% Senior Secured Notes due 2014 and made principal payments of $2.0 million under our term loan facility. We also paid a distribution of $6.0 million to our then-current members during fiscal 2007, out of fiscal year end 2006 earnings. The $14.7 million increase in cash used in financing activities was used to decrease our borrowing under our senior credit facility, repurchase certain of our 9 1/2% Senior Secured Notes due 2014 and pay a higher distribution to our then-current members.

The following table summarizes our contractual cash obligations as of September 30, 2008, and the effect such obligations are expected to have on our liquidity and cash flows in future periods.

We experience a substantial amount of seasonality in salt sales. The result of this seasonality is that sales and operating income are generally higher in the first and fourth quarters and lower during the second and third quarters of each calendar 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 stockpile significant quantities of deicing salt in the second, third and fourth calendar quarters.

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 (dollars in thousands):

In May 2008, the FASB issued SFAS No. 162, The Hierarchy of Generally Accepted Accounting Principles. SFAS No. 162 identifies the sources of accounting principles and the framework for selecting the principles used in the preparation of financial statements of nongovernmental entities that are presented in conformity with generally accepted accounting principles in the United States. SFAS No. 162 will be effective 60 days following the SEC’s approval of the Public Company Accounting Oversight Board amendments to AU Section 411, The Meaning of Present Fairly in Conformity with General Accepted Accounting Principles. We have not yet assessed the impact of adopting SFAS No. 162 on our financial statements.

In December 2007, the FASB issued SFAS No. 141R, Business Combinations, which replaces SFAS No. 141. SFAS No. 141R retains the purchase method of accounting for acquisitions, but requires a number of changes, including changes in the way assets and liabilities are recognized in the purchase accounting. It also changes the recognition of assets acquired and liabilities assumed arising from contingencies, requires the capitalization of in-process research and development at fair value, and requires the expensing of acquisition-related costs as incurred. SFAS No. 141R is effective for us beginning October 1, 2009 and will apply prospectively to business combinations completed on or after that date.

In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statements, an amendment of ARB No. 51, which changes the accounting and reporting for minority interests. Minority interests will be recharacterized as noncontrolling interests and will be reported as a component of equity separate from the parent’s equity, and purchases or sales of equity interests that do not result in a change in control will be accounted for as equity transactions. In addition, net income attributable to the noncontrolling interest will be included in consolidated net income on the face of the income statement and, upon a loss of control, the interest sold, as well as any interest retained, will be recorded at fair value with any gain or loss recognized in earnings. SFAS No. 160 is effective for us beginning October 1, 2009 and will apply prospectively, except for the presentation and disclosure requirements, which will apply retrospectively. We do not believe SFAS No. 160 will have a material impact on our financial statements.

In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements, which defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. This statement does not require any new fair value measurements, but provides guidance on how to measure fair value by providing a fair value hierarchy used to classify the source of the information. In February 2008, the FASB issued FASB Staff Position (“FSP”) 157-2, Effective Date of FASB Statement No. 157, which delays the effective date of SFAS No. 157 for all nonfinancial assets and nonfinancial liabilities, except for items that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually). SFAS No. 157 is effective for us beginning October 1, 2008; FSP 157-2 delays the effective date for certain items to October 1, 2009. We do not believe SFAS No. 157 will have a material impact on our financial statements.

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 have a fixed interest rate, its bank facility is subject to variable interest rates keyed to LIBOR. As of September 30, 2008, we had $38.6 million outstanding under our bank facility and $57.5 million outstanding under our senior secured notes. Borrowings under our bank facility are subject to a variable rate. As of September 30, 2008 the variable rate was 3.0%. Our senior secured notes bear interest at a rate of 9.5% per annum. Our bank facility, with an available aggregate amount of up to $49.6 million, currently consists of (a) a $19.6 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 sub-limit available for the issuance of letters of credit. As of September 30, 2008, there was $19.0 million drawn and $2.0 million of standby letters of credit outstanding under the working capital facility.

Our earnings and cash flows are affected by changes in interest rates applicable to our bank facility. Assuming our current debt structure, a $19.6 million term loan facility, and an average level of borrowings under our revolving credit facility at variable rates, and assuming a one hundred basis point increase in the average interest rate under these borrowings, we estimate that our interest expense for the fiscal year ended September 30, 2008 would have increased by approximately $0.2 million.

In our opinion, the accompanying balance sheets and the related statements of operations, changes in members’ equity (deficit) and of cash flows present fairly, in all material respects, the financial position of American Rock Salt Company LLC at September 30, 2008 and September 30, 2007 and the results of its operations and its cash flows for each of the three years in the period ended September 30, 2008 in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

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.

In connection with the holding company reorganization described above, Holdings entered into a seven and one-half year $100.0 million aggregate principal amount senior unsecured term loan facility on July 3, 2007 with Morgan Stanley Senior Funding, Inc. as the initial lender and administrative agent. In connection with that loan, the Company became a Restricted Subsidiary, as defined, of Holdings. Holdings is required to cause the Company to pay a cash dividend to Holdings annually, commencing April 2008, which will allow the timing of the dividend to be consistent with past practices of the Company. The amount of the dividend must be no less than 75.0% of its “available free cash flow”, wherein “available free cash flow” includes a number of financial components in its determination but cannot exceed the amount the Company is permitted to pay as a cash distribution under its existing credit facilities or the indenture governing its senior secured notes. As a Restricted Subsidiary, the Company is subject to financial and other restrictions that are comparable to existing restrictions under the Company’s senior secured notes.

The financial statements are prepared on the accrual basis of accounting, in accordance with US GAAP.

The Company considers all highly liquid debt instruments with a maturity at the date of purchase of three months or less to be cash equivalents. The Company maintains its cash in bank deposit accounts which, at times, may exceed federally insured limits. The Company has not experienced any losses in such accounts. The Company believes it is not exposed to any significant risk on cash and equivalents.

Inventory is stated at the lower of cost or market, on an average cost basis. The Company records reserves for unusable raw materials and supplies inventory. The amount of unusable raw materials is immaterial during the ordinary course of business.

The Company amortizes its mine development costs using the units-of-production method. Mine development costs, primarily underground assets used in the production of salt, totaled $69.8 million as of September 30, 2008 and are included on the Company’s balance sheet in property and equipment, net. Under the units-of-production method, the assets are amortized based on the tons of salt extracted compared to the total tons of proven salt reserves. This accounting method reflects the usage patterns of these assets, links their estimated useful lives to the life of the Company’s proven salt reserves, and is the industry predominant accounting practice for similar assets. Mine development costs consist of materials, labor, engineering, and consulting costs incurred to construct the mine. Also, costs related to the construction of the production and service shafts are included in mine development costs.

Property and equipment is stated at cost and is depreciated over its estimated useful life using the straight-line method. Major renewals and betterments are capitalized. Maintenance, repairs, and minor renewals are expensed as incurred. When properties are retired or otherwise disposed of, the related cost and accumulated depreciation are removed from the accounts.

Salt deposits and mineral rights are underground reserves on which the Company has extraction rights. Salt deposits and mineral rights are amortized as the minerals are extracted, based on units-of-production and engineering estimates of total reserves. The impact of revisions to reserve estimates is recognized on a prospective basis. Salt deposits and mineral rights are presented net of accumulated depletion of approximately $0.4 million, $0.3 million, and $0.2 million at September 30, 2008, 2007 and 2006, respectively.

In June 2001, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards (“SFAS)” No. 143, Accounting for Obligations Associated with the Retirement of Long-Lived Assets. The objective of SFAS No. 143 is to establish an accounting standard for the recognition and measurement of an obligation related to the retirement of certain long-lived assets. The retirement obligation must be one that results from the acquisition, construction, or normal operations of a long-lived asset. SFAS No. 143 requires the legal obligation associated with the retirement of a tangible long-lived asset to be recognized at fair value as a liability when incurred and the cost to be capitalized by increasing the carrying amount of the related long-lived asset.

Financing costs include legal, professional and other related fees incurred in connection with obtaining financing, and are being amortized over the terms of the related obligations.

The Company recognizes revenue upon transfer of title or in accordance with contracted terms which are primarily FOB destination. The Company sells mineral products, primarily salt and mixed salt products. Sales include customer billings excluding sales tax charged on the product and include shipping and handling costs. The shipping and handling costs are expensed when the product is sold.

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 Holdings are includable on the individual tax returns of the members of Holdings.

In the event that facts and circumstances indicate that the carrying amounts of long-lived assets may be impaired, an evaluation of recoverability would be performed. If 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 this 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.

The Company’s authorized, issued and outstanding membership interests consist of 6,250 Class A Units and 12,750 Class F Units. Holdings is currently the sole member of the Company and holds all issued and outstanding Class A and Class F units, as a consequence of which the Company is treated as a “disregarded entity” for tax purposes and all profits and losses of the Company are allocated to Holdings.

The carrying amounts of the Company’s financial instruments, including cash and cash equivalents approximate their fair values at September 30, 2008 and 2007.

The estimated fair value of the Company’s long-term debt is approximately $77,205,704 as of September 30, 2008. The estimated fair value was based on market yields for similar instruments.

The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Supplemental information regarding cash flow activities for the year ended September 30:

The Company has entered into several agreements for the storage and handling of its salt at several stockpiles; several of these agreements include land and building rent. In addition, the Company has various lease agreements for railcars. These stockpile and railcar lease obligations extend through 2016. Most leases contain renewal and purchase options. No leases contain restrictions on the Company’s activities concerning capital distributions, additional debt, or further leasing. Rental expenses for all operating leases amounted to approximately $5,310,000, $5,221,000, and $4,817,000 during fiscal 2008, 2007 and 2006, respectively.

Future minimum rental payments under operating leases with non-cancelable terms in excess of one year are as follows.

On March 7, 2006, the Company amended its bank facility primarily in order to reduce the pricing grid leverage ratio and to eliminate certain financial covenants, as previously reported in the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission (the “SEC”) on March 8, 2006. At September 30, 2008, the Company’s bank facility in the aggregate principal amount of $49,628,558 consisted of: (a) a $19,628,558 term loan, and (b) a $30,000,000 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 0.5% or the prime rate plus the applicable margin for base rate loans), at the Company’s option. The term loan has a maturity of eight years commencing March 7, 2006. The working capital facility has an initial term of five years commencing March 7, 2006.

At September 30, 2008, the term loan had a balance of approximately $19,628,558 bearing interest at a rate of 3.0%.

The working capital facility permits the Company to borrow up to $30,000,000 in revolving loans with a $7,000,000 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 September 30, 2008, the Company had $19,000,000 drawn and $2,000,000 of standby letters of credit outstanding under the working capital facility, with approximately $9,000,000 of remaining availability thereunder. Amounts under the working credit facility outstanding at September 30, 2008 bore an interest rate of 3.0%.

The aggregate maturities of long-term debt for each of the five fiscal years subsequent to September 30, 2008 and thereafter are as follows:

Certain legal costs were incurred by the Company and paid to an organization affiliated with several of our affiliates of approximately $296,000, $327,000, and $443,000 during fiscal 2008, 2007 and 2006, respectively. These amounts are included in operating expenses.

Certain affiliates received management and services fees of approximately $342,000, $294,000, and $294,000 during fiscal 2008, 2007, and 2006, respectively. These amounts are included in operating expenses.

Additionally, certain affiliates received payments for goods and services aggregating approximately $4,692,000, $2,086,000, and $1,646,000 during fiscal 2008, 2007, and 2006, respectively. In fiscal 2008, approximately $4,136,000 of the total $4,692,000 is included in cost of sales with the remaining balance in operating expenses. In fiscal 2007, approximately $1,686,000 of the total $2,086,000 is included in cost of sales with the remaining balance in operating expenses. In fiscal 2006, approximately $1,360,000 of the total $1,646,000 is included in cost of sales with the remaining balance in operating expenses.

Certain costs were incurred from an affiliate for financial advisory fees of approximately $113,000, $35,000, and $197,500 for fiscal 2008, 2007 and 2006, respectively. These amounts are included in operating expenses.

We pay a royalty (“NOMI”) 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. Certain affiliates receive a portion of such royalty payments. NOMI expense to such affiliates was approximately $4,014,000, $2,659,000, and $2,346,000 during fiscal 2008, 2007, and 2006, respectively. These amounts are included in cost of sales.

The Company was involved in litigation with Frontier-Kemper Constructors, Inc., Flatiron Constructors, Inc. (formerly known as Flatiron Constructors, LLC, and also known as Flatiron Structures LLC), Jointly and Severally with Frontier-Kemper Constructors, Inc. and d/b/a Frontier-Kemper/Flatiron Joint Venture (together, the “EPC Contractor” or “FKF”), whom the Company engaged to design and construct its mine facility, as well as the EPC Contractor’s bonding companies, Travelers Casualty and Surety Company of America and Liberty Mutual Insurance Company (the “Bonding Companies”), and Willis Corroon Corporation of Missouri, Willis Limited, Willis Faber and Dumas (collectively “Willis”) and Lloyd’s U/W at London, Sponsoring Syndicates (“Lloyd’s), the insurance brokers and underwriters, respectively, of certain liquidated damages insurance purchased to insure the timely completion of the mine facility. On June 30, 2005, the Company, the EPC Contractor and the Bonding Companies reached a settlement agreement with respect to the litigation, pursuant to which the parties agreed to dismiss all claims and counterclaims, subject to limited exceptions, with no findings or admissions of liability by any party. All of the settled claims were dismissed with prejudice. In July 2005, the Company paid a total of $10.0 million to the EPC Contractor, including $4.2 million of mine construction retention previously withheld and owed to the EPC Contractor and the last invoice dated December 2001 totaling $1.0 million, both of which had been previously recorded as accrued liabilities on the Company’s balance sheet. The remaining $4.8 million of the settlement payment was for additional mine construction expenditures and was also recorded on June 30, 2005 as capitalized mine development costs. The Company agreed to share with the EPC Contractor one-half of any payment received by the Company in connection with its claims against Willis Corroon Corporation of Missouri, Willis Limited, Willis Faber and Dumas and Lloyd’s U/W at London, Sponsoring Syndicates, third party defendants in the action (the “Willis Parties”). Other terms of the settlement are confidential by agreement of the parties. The settlement also freed the Company from any further obligation under a $32.1 million bond the Company posted as security to discharge a mechanic’s lien the EPC Contractor had filed against the Hampton Corners Salt Mine arising out of the dispute between the parties. The settlement did not include the settling parties’ claims against Willis and Lloyd’s, which claims remained pending.

On October 18, 2005, the court in which the remaining litigation against Willis and Lloyd’s was pending granted summary judgment to the Company on its claims against Willis for breach of its obligations to the Company as insurance brokers in connection with the above-mentioned liquidated damages insurance, and the Company and the EPC Contractor subsequently agreed to a settlement of their claims against Willis and Lloyd’s. The claims against the Willis Parties were settled on February 27, 2006 for $4.2 million, one-half of which was retained by the Company and one-half of which was paid over to the EPC Contractor, both net of litigation expenses, pursuant to the terms of the original settlement. The Company’s amount ($2.1 million) had been included as Other Income in the Statement of Operations for the fiscal year ended September 30, 2006.

On October 31, 2008, the Company entered into a four-year labor agreement with the United Steel Workers International Union, AFL-CIO-CLC, formerly the Paper, Allied-Industrial, Chemical & Energy Workers International Union, Local 1-0763. The labor agreement covers all hourly production and maintenance workers employed by the Company. The labor agreement expires on October 31, 2012.

On September 1, 1998, Livingston County Industrial Development Agency (“IDA”) approved the Payment-in-Lieu-of-Tax (“PILOT”) Agreement between the Company and the IDA. Under the terms of the Agreement, the Company receives abatements on a percentage of property taxes through 2031, exemption from mortgage taxes related to the financing of the mine and exemption from sales and use taxes otherwise payable on all purchases made to construct the mine. Under the agreement, the Company is required to maintain a staffing level of 124 full time or equivalent employees (“Full Time Employees”). If the Full Time Employees fall below 75 percent of 165 (124), the PILOT payments increase based on a pre-defined formula. The Company had 266 Full Time Employees as of September 30, 2008.

The Company has various salt sales contracts that include performance provisions governing delivery and product quality. These sales contracts either require the Company to maintain performance bonds for stipulated amounts or contain contractual penalty provisions in the event of nonperformance. The amount of such performance penalties, if any, would be dependent upon failure to perform and factors such as weather patterns and resultant product demand in the Company’s geographic markets and as a result cannot be estimated. For the three fiscal years ended September 30, 2008, the Company has not incurred any penalties related to these sales contracts. At September 30, 2008, the Company had approximately $14,000,000 of outstanding performance bonds.

The Company has agreements with rail carriers for the transportation of its rock salt. These agreements have minimum usage requirements that obligate the Company to pay, in the aggregate, a minimum of $1,900,000 per annum. In fiscal 2008, 2007 and 2006, the Company met its minimum usage requirements. The current agreements expire in 2011. Based on current projections, the Company expects to meet the minimum usage requirements for the remainder of the agreements.

The Company administers a 401(k) defined contribution plan covering substantially all employees. Total expense related to the employer matching contribution was approximately $343,000, $275,000, and $216,000 in fiscal 2008, 2007, and 2006, respectively.

In May 2008, the FASB issued SFAS No. 162, The Hierarchy of Generally Accepted Accounting Principles. SFAS No. 162 identifies the sources of accounting principles and the framework for selecting the principles used in the preparation of financial statements of nongovernmental entities that are presented in conformity with generally accepted accounting principles in the United States. SFAS No. 162 will be effective 60 days following the SEC’s approval of the Public Company Accounting Oversight Board amendments to AU Section 411, The Meaning of Present Fairly in Conformity with General Accepted Accounting Principles. The Company has not yet assessed the impact of adopting SFAS No. 162 on its financial statements.

In December 2007, the FASB issued SFAS No. 141R, Business Combinations, which replaces SFAS No. 141. SFAS No. 141R retains the purchase method of accounting for acquisitions, but requires a number of changes, including changes in the way assets and liabilities are recognized in the purchase accounting. It also changes the recognition of assets acquired and liabilities assumed arising from contingencies, requires the capitalization of in-process research and development at fair value, and requires the expensing of acquisition-related costs as incurred. SFAS No. 141R is effective for the Company beginning October 1, 2009 and will apply prospectively to business combinations completed on or after that date.

Company beginning October 1, 2009 and will apply prospectively, except for the presentation and disclosure requirements, which will apply retrospectively. The Company does not believe SFAS No. 160 will have a material impact on its financial statements.

In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements, which defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. This statement does not require any new fair value measurements, but provides guidance on how to measure fair value by providing a fair value hierarchy used to classify the source of the information. In February 2008, the FASB issued FASB Staff Position (“FSP”) 157-2, Effective Date of FASB Statement No. 157, which delays the effective date of SFAS No. 157 for all nonfinancial assets and nonfinancial liabilities, except for items that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually). SFAS No. 157 is effective for the Company beginning October 1, 2008; FSP 157-2 delays the effective date for certain items to October 1, 2009. The Company does not believe SFAS No. 157 will have a material impact on its financial statements.

On December 15, 2008 the Company purchased $1,000,000 of its 9¹/2% Senior Secured Notes due 2014 for an aggregate purchase price of $963,750. This amount comprises principal, premium and accrued interest for the Notes purchased. The Company intends to retire all such Notes.

Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

The Company’s management, with the participation of its 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 Principal Executive and Principal Financial Officers concluded that the Company’s disclosure controls and procedures as of September 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 Securities and Exchange Commission’s rules and forms.

The Company’s management, with the participation of its Principal Executive Officers and Principal Financial Officer, is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as amended, as a process designed by, or under the supervision of, the Company’s principal executive and principal financial officers and effected by the Company’s board, management and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States (“GAAP, US”) and includes those policies and procedures that:

Because of the inherent limitations of internal control over financial reporting, including the possibility of human error and the circumvention or overriding of controls, material misstatements may not be prevented or detected on a timely basis. Projections of any evaluation of effectiveness to future periods are subject to the risks that controls may become inadequate because of changes and conditions or that the degree of compliance with policies or procedures may deteriorate. Accordingly, even internal controls determined to be effective can provide only reasonable assurance that information required to be disclosed in and reports filed under the Exchange Act is recorded, processed, summarized and represented within the time periods required.

Management of the Company has assessed the effectiveness of its internal control over financial reporting at September 30, 2008. To make this assessment, the Company used the criteria for effective internal control over financial reporting described in Internal Control—Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). Based on this assessment, management of the Company believes that as of September 30, 2008, the Company’s internal control over financial reporting was effective.

This Form 10-K does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to temporary rules of the SEC that permit the Company to provide only management’s report in this Form 10-K.

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

The following table sets forth information with respect to our Managers, executive officers, and key employees of the Company as of December 5, 2008:

We have a nine-member Board of Managers and three-member Executive Committee. The members of the Executive Committee, taken together, own a majority of the membership interests in Holdings. The Executive Committee generally has the authority to exercise all the powers of the full Board of Managers, other than the power to take certain actions enumerated in the Company’s operating agreement. The members of the Executive Committee collectively fulfill the duties of chief executive officer. The Board of Managers consists of three Class F Managers, who serve ex officio by virtue of their election as Class F Managers of Holdings, and up to eight Class A Managers, who serve ex officio by virtue of their election as Class A Managers of Holdings. Each Class F Manager has three votes on all matters submitted to a vote of the Board of Managers, and each Class A Manager has one vote on all matters submitted to a vote of the Board of Managers. Managers hold office until their successors are duly elected and qualified as Managers of Holdings or their earlier removal or resignation.

Joseph G. Bucci became a Manager of the Company and Vice President, Real Estate and Mineral Rights in October 1997. In 2002, he became Vice Chairman, Operations. From June 1, 2003 to September 2005 Mr. Bucci also served as Plant Manager responsible for all production and the day to day operation of our mine. Mr. Bucci, founder and owner of Bucci Real Estate, has been involved in real estate since 1968. He has been responsible for the purchases of mineral rights on behalf of the former International Salt Company, Akzo Nobel Salt and the Company since 1974. Mr. Bucci serves on the board of directors of The Bank of Castile and the Livingston County Chamber of Commerce. He holds a B.S. in history and education from SUNY Geneseo as well as New York State certification as a Licensed Real Estate Broker.

Gunther K. Buerman became a Manager of the Company in January 1997 and Chairman of the Board of Managers of the Company in 2002. He is a member of Harris Beach PLLC where he has been an associate or equity member since 1968 in the area of corporate and commercial law. He serves on the board of directors of a number of private entities and non-profit organizations. Mr. Buerman holds a J.D. from Syracuse University College of Law and a B.A. from St. Lawrence University.

Neil L. Cohen became a Manager of the Company in January 1997 and Vice Chairman, Finance and Marketing in 2002. He is the Chairman of Emerald Development Managers, LP, the manager of Emerald Infrastructure Development Fund L.P., which commenced operations in September 2008. He also serves as President and managing member of Cohen & Company, LLC, a private equity firm he founded in 1994. Mr. Cohen is currently a board member of a number of private entities and non-profit organizations. Mr. Cohen holds an M.S. in Management with concentrations in corporate strategy, finance, and management of technological innovation from MIT and a B.E.S. in Mathematical Sciences from The Johns Hopkins University.

Messrs. Bucci, Buerman, and Cohen are parties to a voting agreement which limits the ability of any such person to vote on any changes to the Company’s operating agreement which would have the effect of removing any party to the voting agreement from the Executive Committee or amending the rules for voting for Class F Managers.

Charles T. Collins became a Manager of the Company in November 1998. Mr. Collins served as the Company’s Chief Financial Officer from January 1997 to November 1998. He is a Managing Director of Emerald Development Managers, LP, the manager of Emerald Infrastructure Development Fund L.P., which commenced operations in September 2008. He also serves as a managing director of Cohen & Company, LLC, a private equity firm he joined in 1996. Prior to joining Cohen & Company, Mr. Collins was a CPA and manager in the audit practice of Coopers & Lybrand, LLP, which he joined as an associate in 1988. He holds a B.S. in Accounting from New York University.

C. Wesley Gregory, III became a Manager of the Company in November 1998. Mr. Gregory is owner and manager of WeCare Holdings LLC and its affiliated entities, which provide goods and services to the water, wastewater and solid wastes industry. Prior to founding the WeCare family of companies in 1998, Mr. Gregory founded Waste Stream Environmental, Inc. in 1987 to provide goods and services to the municipal wastewater industry.

Gregory O’Connell became a Manager of the Company in November 1998. Mr. O’Connell has been the President and owner of O’Connell Construction Company Inc. for over 30 years.

John M. Odenbach, Jr. became a Manager of the Company in November 1998. Mr. Odenbach has served as Executive Vice President of Dolomite Products Company, Inc., a division of Oldcastle Materials, Inc., since 2007, and served as its President from 1990 to 2007.

E. Philip Saunders became a Manager of the Company in November 1998, and served as its Chief Executive Officer from May 2000 through September 2003. Mr. Saunders is Chief Executive Officer of Genesee Regional Bank and Swain Ski & Snowboard Center, and serves on the boards of directors of Roswell Hospital, Griffith Energy, Paul Smiths College, the American Red Cross, Lewis Tree Service, PCORE Electric Co., Inc., the National Association of Truckstop Operators Foundation, Genesee Valley Trust Company and Genesee Regional Bank. Mr. Saunders previously served on the boards of directors of Hahn Automotive, Fleet Bank of New York, Ryder Systems, Excellus, Inc. of Rochester, Rochester General Hospital and the Petroleum Marketing Education Foundation. Mr. Saunders previously served as Chief Executive Officer of Truckstops of America, Inc., Econo- Car International, Inc., Griffith Oil, Sugar Creek Corporation, Travel Ports of America, Inc. and Richardson Foods Corporation.

Thomas Terry, Jr. became a Manager of the Company in November 1998. Prior to 1998, Mr. Terry was the President and owner of Lewis Tree Service, Inc., a vegetation management company founded by the Terry family in the 1950s.

The Company’s operating management and key personnel have significant experience in the development and operation of various rock salt mines and have specific experience selling and distributing rock salt in the Northeastern market. The key operating personnel include the following:

Mark Assini was named the Company’s Bidding Manager in May 2007. He joined the Company in 2004 as Manager of Marketing Analysis. Prior to joining the Company, Mr. Assini served as a cost accountant at Pfaudler, Inc from 1995-2004. While at Eastman Kodak Company from 1981-1994, Mr. Assini maintained lead roles in Supply Chain Management as well as in Finance. Mr. Assini is certified in Material Requirements Planning by the American Production and Inventory Control Society and holds a B.S. in Production Management from Rochester Institute of Technology.

Ann M. Blake became the Company’s Chief Financial Officer in October 2008. Ms Blake has served as the Company’s Controller since May 2007. She joined the Company in 2006 as the Company’s Accounting Manager. Ms. Blake is a Certified Public Accountant and has over eight years of financial reporting and accounting experience. Prior to joining the Company, Ms. Blake was employed in the audit practice of Arthur Andersen, LLP, which she joined as an associate in 1999. Ms. Blake joined Xerox Corp in 2003 where she held positions as Senior Analyst, Consolidations and Reporting- North America; Senior Analyst, Accounting and Internal Control and Manager of Accounting, Xerox Information Management. She holds a B.S. in Accounting from St. John Fisher College.

Gregory J. Norris has been the Company’s Plant Manager since September 2005. Previously, he was the Company’s Engineering Manager. He joined the Company in June 2000. Mr. Norris has over 18 years of mine engineering experience, including five years working for Akzo Nobel Salt, Inc. at two different salt mines. He has worked in copper and silver mines for Copper Range Company, and has managed a 1.0 million tons-per-year limestone quarry for Southdown Inc.

Gary L. Perrin is the Company’s Human Resources Manager. He joined the Company in March 2001. Mr. Perrin has over 24 years of diversified management experience in Human Resources and Finance. Prior to joining the Company, Mr. Perrin was employed by Stroehmann Bakeries Inc. and the Quaker Oats Company. He has worked with organizations experiencing rapid growth and also has guided organizations through periods of downsizing, including layoffs and office/plant closings. Mr. Perrin has labor relations experience with the following unions: United Steel Workers of America (USWA), International Brotherhood of Teamsters (IBT), Bakery, Confectionary, Tobacco Workers International (BC&T), United Food and Commercial Workers (UFCW) and Paper, Allied-Industrial, Chemical and Energy Workers International Union (PACE).

The members of the Company’s Executive Committee, Gunther K. Buerman, Joseph G. Bucci and Neil L. Cohen, have served as the Audit Committee of the Board of Managers. The Board of Managers formally appointed the Executive Committee members as the Audit Committee in December 2004, recognizing that they had previously been serving in that capacity. The Company’s Board of Managers has not determined that any member of the Audit Committee is an “audit committee financial expert” as defined in applicable Securities and Exchange Commission regulations. The Board of Managers believes that the collective knowledge and experience of the Audit Committee members is sufficient to perform the functions of the Audit Committee without any one member being deemed to be an “audit committee financial expert”.

As of September 30, 2008, the Company had not adopted a “Code of Ethics” as defined in applicable Securities and Exchange Commission regulations. The Board of Managers believes that our current internal control procedures and business practices are adequate to promote honest and ethical conduct and to deter wrongdoing by its executives.

This section addresses certain aspects of the compensation paid to our Named Executive Officers, as defined below. Although this discussion may address our historical practices, the focus is on the practices used in our most recent fiscal year.

The Board of Managers does not have a separately designated Compensation Committee. Our entire Board of Managers performs the functions of the Compensation Committee with respect to our Co-Chief Executive Officers and in that capacity oversees the compensation paid to Messrs. Bucci, Buerman and Cohen, for their service in that role. The Board of Managers has taken no action with respect to the annual fee paid to our Co-Chief Executive Officers over past three fiscal years. The Executive Committee performs the function of the Compensation Committee with respect to our other executive officers and senior management and in that capacity oversees the compensation paid to those individuals. Among other things, the Executive Committee reviews the performance of our executive officers and makes determinations concerning the compensation levels of those officers. Mr. Bucci is not involved in determining his annual compensation for his role as an operational manager.

The objective of our executive compensation is to attract, motivate and retain highly talented individuals. The Executive Committee periodically reviews the competitiveness of our executive compensation in order to evaluate whether it is achieving the desired goals and objectives. Our executive compensation program is principally designed to give executives incentives to focus on and achieve our business objectives. Key elements of the executive compensation program are competitive base salaries and annual performance-based bonuses.

In determining the compensation levels of our executive officers, the Executive Committee takes into account competitive market data from the mining industry as a whole and focuses on institutions of a size similar to us. Although the Executive Committee has not historically established specific targets in relation to peer group compensation, it has taken into account the total compensation paid to executive officers by our competitors. Information regarding pay practices at other companies in the mining industry is useful because we recognize that our compensation must be competitive in the marketplace and this information also assists us in assessing the overall reasonableness of our compensation.

To date, our executive compensation has had three components: base salary, annual cash incentives and employee benefits. The Company previously maintained a plan under which it could grant awards of Units to certain employees and executive officers, but determined to discontinue this plan in fiscal 2008. No awards were ever granted under the plan.

Base salary is designed to provide competitive levels of compensation to our executive officers based upon the responsibilities assigned to them and taking into account their experience and qualifications. As was discussed above, we have established base salaries at levels we consider appropriate to recruit and retain executives and which are competitive with those paid by similar institutions. To ensure we remain competitive in base salaries, we use industry and region specific salary guidelines as a measure. The Executive Committee reviews base salaries on an annual basis to take into account reported cost of living adjustments as well as changes in responsibilities and the individual performance of our executives.

We have also made annual cash bonus payments, which are intended to recognize individual accomplishments, as well as the overall performance of the Company during the past year. Annual bonuses have not been awarded based upon the attainment of pre-established targets or other measurable criteria, but have been determined based on the Company’s performance and various factors determined relevant by the Executive Committee or the Board of Managers, as appropriate. On December 12, 2008, the Board of Managers approved a one-time cash bonus of $24,000 payable to each of Messrs. Buerman and Cohen to reflect the substantial amount of time they have invested in growing the Company. Messrs. Buerman and Cohen abstained from the Board of Managers vote on this matter.

We provide various benefits to all of our eligible employees, including executive officers, which include group life insurance, health insurance and a 401(k) plan. The 401(k) plan is a tax-qualified profit sharing plan under the Internal Revenue Code, and eligible employees meeting certain length of service requirements may make tax deferred contributions subject to certain limitations. We make discretionary matching contributions of up to 3% of employee compensation which vest to the employee over a five year period.

Perquisites and other personal benefits have not represented a significant part of total compensation for any of our executive officers.

Other than the 401(k) plan mentioned above, we do not offer any other pension or post-employment benefits. We do not maintain employment agreements with any of our executive officers entitling them to severance or other post-employment benefits.

The Board of Managers has the authority to make all final determinations with respect to the compensation paid to our Co-Chief Executive Officers for their service in that role. The Board of Managers has taken no action with respect to the annual fee paid to our Co-Chief Executive Officers during the past three fiscal years; however, as mentioned above, in December 2008 the Board of Managers approved a one-time cash bonus of $24,000 payable to each of Messrs. Buerman and Cohen. The Executive Committee makes all final determinations with respect to the compensation paid to our other executive officers. Because Messrs. Buerman, Bucci and Cohen, our Co-Chief Executive Officers, are members of the Board of Managers, they are entitled to participate in deliberations regarding executive compensation, including concerning the fees to be paid to them as compensation for their service as Co-Chief Executive Officers. Mr. Bucci is not involved in determining his annual compensation for his role as an operational manager.

The discussion above relates to our recent practices, and most particularly those used in the most recent fiscal year. The Executive Committee continues to evaluate our executive compensation programs, but does not anticipate making any material changes in our executive compensation practices in the foreseeable future.

It has been the Executive Committee’s intent that all incentive payments be deductible to the Company, unless such deductibility would undermine our ability to meet our objectives. Currently, we believe that all of the compensation paid to our executive officers qualifies for a federal tax deduction in computing our taxable income. We have not historically relied on deferred compensation arrangements or made equity awards, so Section 409A of the Internal Revenue Code has not had any impact on our compensation programs to date.

In summary, we believe that the compensation paid to our executive officers has been consistent with our overall objectives and has enabled us to retain and motivate our management team.

The following table sets forth information concerning the compensation paid by the Company for the fiscal years ended September 30, 2008 and 2007 to (i) the three individuals who collectively serve as the Company’s chief executive officer, and (ii) the individual who served as the Company’s chief financial officer during the fiscal year ended September 30, 2008, (collectively, the “Named Executive Officers”):

We do not maintain a qualified or non-qualified defined benefit pension plan covering any of our employees. Our Named Executive Officers are eligible to participate in our tax-qualified Profit Sharing and Savings Plan on the same basis as other employees under the plan. The Company makes a discretionary matching contribution of up to 3% of employee compensation. The Summary Compensation Table above reflects the actual dollar amounts contributed to our Profit Sharing and Savings Plan on each Named Executive Officer’s behalf.

As of September 30, 2008, the Company did not have a compensation committee. The Executive Committee (consisting of our three Co-Chief Executive Officers, Mssrs. Bucci, Buerman and Cohen) functions as the compensation committee with respect to all of our executive officers other than our Co-Chief Executive Officers, and the entire Board of Managers functions as the compensation committee with respect to our Co-Chief Executive Officers. No interlocking relationship existed during the last completed fiscal year between the Company’s Board of Managers or Executive Committee and the board of directors or compensation committee of any other company, nor has any interlocking relationship existed in the past.

The information contained in this Compensation Committee Report shall not be deemed to be “soliciting material” or to be “filed” with the SEC or subject to Regulation 14A or 14C promulgated by the SEC or the liabilities of Section 18 of the Exchange Act, except to the extent that the Company specifically requests that the information be treated as soliciting material or specifically incorporates it by reference into a document filed under the Securities Act or the Exchange Act. The information contained in this Compensation Committee Report shall not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent the Company specifically incorporates it by reference.

Each board member of the Executive Committee is entitled to compensation at a rate of $4,000 per month as a member of the Executive Committee. Additionally, each member of the Executive Committee is entitled to receive $50,000 annually as compensation for his role in fulfilling the duties of co-chief executive officer. All such fees paid to Executive Committee members are reported for each such individual in the Summary Compensation Table, above. These fees have remained level over past three fiscal years. As mentioned above, in December 2008 the Board of Managers approved a one-time $24,000 bonus payable to each Messrs. Buerman and Cohen. All Managers, including the Executive Committee members, are entitled to reimbursement for all reasonable out-of-pocket expenses incurred by them in connection with their performance of services in that capacity.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The Company’s issued and outstanding membership interests consist of 6,250 Class A Units and 12,750 Class F Units. As of December 5, 2008, all issued and outstanding Units of the Company were held by Holdings. Holdings’ business address is 3846 Retsof Road, Retsof, New York 14539.

From time to time, we enter into agreements with Managers of the Company or their affiliates. We believe that the terms of these relationships are at least as favorable as those we could have obtained as a result of arm’s-length negotiations with unaffiliated third parties. Set forth below are descriptions of the material agreements or arrangements we have entered into with our Managers or their affiliates.

Gunther K. Buerman, one of the founders of the Company who currently serves as Co-Chief Executive Officer and Chairman of the Executive Committee, is a member of Harris Beach PLLC, a law firm which serves as general outside counsel to the Company. In addition, certain current and former members of Harris Beach PLLC own in the aggregate 150.5 Class A Units of Holdings (not including the Units owned by Mr. Buerman). The Company incurred legal expenses to Harris Beach PLLC of approximately $296,000 during fiscal 2008. Mr. Buerman has less than a 1% equity interest in Harris Beach PLLC.

E. Philip Saunders, a Class A Member of Holdings and a Class A Manager of the Company, is the Chairman of the Board of Griffith Energy, Inc., which provides petroleum product to the Company on an as-needed basis. The Company incurred approximately $2,795,000 in fees payable to Griffith Energy, Inc. during fiscal 2008. Mr. Saunders owns a 30% equity interest in Griffith Energy, Inc.

Under the terms of the Company’s operating agreement, Joseph G. Bucci, Gunther K. Buerman, and Neil L. Cohen, in addition to certain other members of Holdings, hold certain Non-Operating Mineral Interests, or “NOMIs”, related to the Company’s initial acquisition of mineral rights. The NOMIs entitle the holders to receive payments equal to 2.5% of the gross income of our mine as reported for purposes of computing percentage depletion for federal income tax purposes. The Company paid approximately $3,958,000 to holders of NOMIs during fiscal 2008. The approximate dollar value of the interest of each of Messrs. Bucci, Buerman and Cohen in the NOMIs paid during fiscal 2008 is $1,265,000, $1,319,000 and $1,101,000, respectively.

Our Audit Committee reviews and discusses with management, the entire Board of Managers and our independent auditors any potential related party transactions. Our Board of Managers has the authority to approve all related party transactions.

The Company is a privately-held company, and is not subject to the listing standards of any national securities exchange or inter-dealer quotation system which has requirements that a majority of the board of directors be independent. For purposes of the following determinations on director independence, the Board of Managers has chosen to apply the independence criteria set forth in Nasdaq Rule 4200(a) (15). Under that standard, the Board of Managers believes that Messrs. O’Connell, Odenbach and Terry are “independent” for purposes of general board service.

The members of the Company’s Executive Committee, Gunther K. Buerman, Joseph G. Bucci and Neil L. Cohen, have served as the Audit Committee of the Board of Managers. The Board of Managers does not believe that Messrs. Buerman, Bucci and Cohen are “independent” for purposes of the heightened independence criteria for audit committees set forth in Nasdaq Rule 4350(d). The Board of Managers does not have a separately designated Compensation Committee or Nominating Committee, and the entire Board of Managers performs the functions of those committees, except that the Executive Committee performs the functions of the Compensation Committee with respect to our executive officers other than the Co-Chief Executive Officers. The Board of Managers believes that Messrs. O’Connell, Odenbach and Terry are “independent” for purposes of Nasdaq Compensation Committee and Nominating Committee standards. The Board of Managers does not believe that the Executive Committee members are “independent” for purposes of Nasdaq Compensation Committee standards.

PricewaterhouseCoopers LLP is the Company’s independent registered public accounting firm. A summary of the aggregate fees billed by PricewaterhouseCoopers LLP for services provided during the fiscal years ended September 30, 2008 and 2007 are as follows:

The Company’s Audit Committee has not adopted any policies or procedures for the pre-approval of non-audit services. The Audit Committee has considered the role of PricewaterhouseCoopers LLP in providing audit, tax, and non-audit services and has concluded that such services are compatible with PricewaterhouseCoopers LLP’s role as the Company’s independent registered public accounting firm.

Financial Statements and supplementary data required by this Item 15, set forth below, are included in Item 8 of this Form 10-K on the pages indicated.

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


AMERICAN ROCK SALT COMPANY LLC

By:		/s/ Ann M. Blake
		Ann M. Blake,
		Chief Financial Officer and Controller
		(Principal Financial Officer and Principal Accounting Officer)

KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Ann M. Blake as his true and lawful attorney-in-fact, with full power of substitution, for him and his name, place and stead, in any and all capacities, to sign any and all amendments to this Report on Form 10-K, and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent with full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact, or his substitute or substitutes, may lawfully do or cause to be done by virtue thereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.


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)


			PAGE NUMBER
Part I.
	Cautionary Note Regarding Forward-Looking Statements
	Market Share, Ranking and Industry Data
	Item 1.	Business	2
	Item 1A.	Risk Factors	9
	Item 1B.	Unresolved Staff Comments	16
	Item 2.	Properties	16
	Item 3.	Legal Proceedings	16
	Item 4.	Submission of Matters to a Vote of Security Holders	16
Part II
	Item 5.	Market For Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	16
	Item 6.	Selected Financial Data	17
	Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
	Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	26
	Item 8.	Financial Statements and Supplementary Data	27
		Report of Independent Registered Public Accounting Firm
		Balance Sheets
		Statements of Operations
		Statements of Changes in Members’ Equity (Deficit)
		Statements of Cash Flows
		Notes to Financial Statements
	Item 9.	Changes In and Disagreements with Accountants on Accounting and Financial Disclosure	43
	Item 9A (T).	Controls and Procedures	43
	Item 9B.	Other Information	44
Part III
	Item 10.	Directors, Executive Officers and Corporate Governance	45
	Item 11.	Executive Compensation	48
	Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	52
	Item 13.	Certain Relationships and Related Transactions, and Director Independence	52
.	Item 14.	Principal Accountant Fees and Services	53
Part IV	Item 15.	Exhibits and Financial Statement Schedules	54
	Signatures		57
	Exhibit Index		59


	Fiscal Years Ended September 30,
	2008			2007			2006			2005			2004
	(dollars in thousands)
Income Statement Data:
Total sales	$	190,188		$	121,288		$	95,653		$	104,613		$	96,502
Cost of sales		132,013			92,006			63,833			74,060			67,973
Gross income		58,175			29,281			31,820			30,553			28,529

Operating expenses		8,615			7,621			7,940			8,234			6,634

Other income (expense):
Interest expense		(11,843	)		(11,719	)		(12,007	)		(11,399	)		(8,021	)
Other Interest		—			—			—			—			(2,679	)
Interest income		332			407			124			95			124
Other financing charges		—			(22	)		(70	)		(12	)		(152	)
Other, net⁽¹⁾		56			83			2,182			12			12

Net income to members⁽²⁾		38,105			10,409			14,108			11,015			11,179

Balance Sheet Data:

Cash and equivalents	$	1,642		$	2,615		$	2,458		$	2,234		$	3,102
Property and equipment, net		82,891			81,803			83,363			84,263			81,011
Total assets		138,969			137,813			144,690			135,955			125,293
Long term debt, including current portion		77,206			112,713			120,672			127,417			100,173
Total debt		96,206			128,713			141,722			141,117			112,923
Members’ equity (deficit)		30,863			1,108			(3,301	)		(12,798	)		249

Statements of Cash Flows Data:
Cash flows provided by operating activities	$	46,550		$	22,138		$	8,384		$	6,475		$	14,100
Cash flows used in investing activities		(6,714	)		(3,202	)		(4,068	)		(12,725	)		(3,321	)
Cash flows provided by (used in) financing activities		(40,810	)		(18,778	)		(4,092	)		5,382			(16,774	)

Other Financial Data:
Capital expenditures	$	6,714		$	3,202		$	4,068		$	2,725		$	2,673
EBITDA		57,734			28,009			31,762			27,497			26,890
Ratio of earnings to Fixed Charges⁽³⁾		3.68			1.76			2.01			1.82			1.91


	2008			2007			2006
Sales
Bulk	$	184,672,825		$	118,921,281		$	93,755,596
Packaged		5,515,468			2,366,250			1,897,617

Total sales		190,188,293			121,287,531			95,653,213

Cost of sales		132,013,382			92,006,449			63,833,668

Gross income		58,174,911			29,281,082			31,819,545
Operating expenses		8,614,709			7,620,832			7,940,016

Income from operations		49,560,202			21,660,250			23,879,529

Other income (expense)
Interest expense		(11,842,796	)		(11,719,402	)		(12,006,524	)
Interest income		331,873			407,247			123,836
Other financing charges		—			(21,737	)		(70,422	)
Other, net		55,836			82,570			2,181,742

Total other expense		(11,455,087	)		(11,251,322	)		(9,771,368	)

Net income	$	38,105,115		$	10,408,928		$	14,108,161


	Payment due by period
Contractual Obligations	Total		Less than 1 year		1-3 years		3-5 years		More than 5 years
	(dollars in thousands)
Long-Term Debt Obligations	$	77,206	$	2,168	$	4,675	$	5,143	$	65,220
Operating Lease Obligations		28,629		4,924		8,354		6,573		8,778
Interest Payable on Long-Term Debt		35,169		6,011		11,914		11,712		5,532
Line of Credit		19,000		19,000		—		—		—

Total	$	160,004	$	32,103	$	24,943	$	23,428	$	79,530


	Twelve Months Ended September 30,
	2008			2007			2006
Net Income to Members	$	38,105,115		$	10,408,928		$	14,108,161
Interest Expense		11,842,796			11,719,402			12,006,524
Depletion, Depreciation and Amortization		7,785,742			5,880,819			5,647,676

EBITDA	$	57,733,653		$	28,009,149		$	31,762,361


Add/Subtract
Interest Expense		(11,842,796	)		(11,719,402	)		(12,006,524	)
Changes in working capital and other assets and liabilities		659,545			5,848,175			(11,371,608	)

Net cash provided by operating activities	$	46,550,402		$	22,137,922		$	8,384,229

Net cash (used in) investing activities	$	(6,713,646	)	$	(3,202,272	)	$	(4,068,209	)

Net cash (used in) financing activities	$	(40,810,114	)	$	(18,778,120	)	$	(4,092,372	)


Report of Independent Registered Public Accounting Firm		28
Balance Sheets as of September 30, 2008 and 2007		29
Statements of Operations for the three years ended September 30, 2008		30
Statements of Changes in Members’ Equity (Deficit) for the three years ended September 30, 2008		31
Statements of Cash Flows for the three years ended September 30, 2008		32
Notes to Financial Statements		33


	2008		2007
Assets
Current assets
Cash and equivalents	$	1,641,686	$	2,615,044
Accounts receivable, net of reserve for doubtful accounts of approximately $58,000 and $54,000 in 2008 and 2007 respectively		15,515,512		9,957,325
Inventory, net		32,992,606		35,388,490
Prepaid expenses		765,901		607,982

Total current assets		50,915,705		48,568,841
Property and equipment, net		82,891,028		81,803,234
Other assets
Salt deposits and mineral rights, net		2,480,224		2,539,534
Mine acquisition costs, net		380,447		376,256
Financing costs, net of accumulated amortization of approximately $5,412,000 and $3,188,000 in 2008 and 2007 respectively		2,301,316		4,525,073

Total other assets		5,161,987		7,440,863

	$	138,968,720	$	137,812,938

Liabilities and Member’s Equity
Current liabilities
Revolving line of credit	$	19,000,000	$	16,000,000
Current portion of long-term debt		2,167,915		2,057,604
Accounts payable		5,111,291		3,568,432
Accrued expenses		6,217,996		3,918,824
Related party payables		571,072		504,832

Total current liabilities		33,068,274		26,049,692
Long-term debt, net of current portion		75,037,789		110,655,704

Total liabilities		108,106,063		136,705,396
Member’s Equity
Class A Units, 6,250 units issued and outstanding at September 30, 2008 and 2007		10,150,783		364,326
Class F Units, 12,750 units issued and outstanding at September 30, 2008 and 2007		20,711,874		743,216

		30,862,657		1,107,542

	$	138,968,720	$	137,812,938


	Class A Units			Class F Units			Total
Members’ (deficit) - September 30, 2006	$	(1,085,988	)	$	(2,215,398	)	$	(3,301,386	)
Net income		3,424,017			6,984,911			10,408,928
Distribution to members		(1,973,703	)		(4,026,297	)		(6,000,000	)

Member’s equity - September 30, 2007	$	364,326		$	743,216		$	1,107,542

Net income		12,532,772			25,572,343			38,105,115
Distribution to members		(2,746,315	)		(5,603,685	)		(8,350,000	)

Member’s equity - September 30, 2008	$	10,150,783		$	20,711,874		$	30,862,657


Buildings		20 - 40 years

Mine development costs		176 Million Tons

Land improvements		15 years

Machinery and Equipment		3-10 years

Furniture and fixtures		5 - 7 years

Vehicles		3 - 5 years

Computers and peripheral equipment		3 - 5 years


	2008			2007
Supplies	$	1,945,201		$	1,080,484
Finished Goods, Salt		31,096,035			34,346,451

		33,041,236			35,426,935
Less:
Reserve		(48,630	)		(38,445	)

	$	32,992,606		$	35,388,490


	2008			2007
Land	$	683,882		$	683,882
Buildings		3,318,954			3,318,954
Land improvements		3,998,910			3,406,348
Machinery & Equipment		31,032,742			27,685,335
Furniture and fixtures		52,056			49,774
Vehicles		492,930			370,736
Computers and peripheral equipment		1,040,819			861,375
Mine development costs		69,812,948			69,812,948
Assets held for sale		371,052			—

		110,804,293			106,189,352
Less: Accumulated Depreciation		(30,841,458	)		(26,572,940	)

		79,962,835			79,616,412
Construction in progress		2,928,193			2,186,822

	$	82,891,028		$	81,803,234


	Property		Equipment		Total
2009	$	198,589	$	4,725,483	$	4,924,072
2010		99,630		4,707,347		4,806,977
2011		62,018		3,485,401		3,547,419
2012		32,709		3,274,531		3,307,240
2013		14,400		3,251,642		3,266,042
Thereafter		253,200		8,524,627		8,777,827

	$	660,546	$	27,969,031	$	28,629,577


	2008			2007
Senior Secured Notes
Senior Secured Notes at September 30, 2008 of $57,505,000, currently requiring semi annual interest payments 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 September 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 is 3.0% as of September 30, 2008.		19,628,558			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		72,146			99,047

		77,205,704			112,713,308
Less: Current maturities of long-term debt		(2,167,915	)		(2,057,604	)

	$	75,037,789		$	110,655,704


Name	Age	Position
Joseph G. Bucci	65	Vice Chairman, Operations; Vice President, Real Estate; Executive Committee Member; and Class F Manager
Gunther K. Buerman	65	Chairman; Executive Committee Member; and Class F Manager
Neil L. Cohen	47	Vice Chairman, Finance and Marketing; Executive Committee Member; and Class F Manager
Mark Assini	49	Bidding Manager
Ann M. Blake	37	Chief Financial Officer and Controller
Gregory J. Norris	45	Plant Manager
Gary L. Perrin	52	Human Resources Manager
Charles T. Collins	43	Class A Manager
C. Wesley Gregory III	52	Class A Manager
Gregory O’Connell	66	Class A Manager
John M. Odenbach, Jr.	58	Class A Manager
E. Philip Saunders	71	Class A Manager
Thomas Terry, Jr.	75	Class A Manager


Name and Principal Position	Fiscal Year	Salary		Bonus		All Other Compensation		Total
Joseph Bucci, Vice Chairman, Operations Vice President, Real Estate and Co-Chief	2008	$	109,992	$	100,000	$	98,000	$	307,992
Executive Officer⁽¹⁾	2007	$	109,993	$	75,000	$	98,000	$	282,993
Gunther Buerman, Chairman and Co-Chief	2008	$	—	$	—	$	98,000	$	98,000
Executive Officer⁽¹⁾	2007	$	—	$	—	$	98,000	$	98,000
Neil Cohen, Vice Chairman, Finance and	2008	$	—	$	—	$	98,000	$	98,000
Marketing and Co-Chief Executive Officer⁽¹⁾	2007	$	—	$	—	$	98,000	$	98,000
Raymond Martel, Chief Financial Officer⁽²⁾⁽³⁾	2008	$	128,390	$	40,000	$	6,182	$	174,572
	2007	$	120,595	$	27,500	$	4,443	$	152,538


Balance Sheets as of September 30, 2008 and 2007		29
Statement of Operations for the three years ended September 30, 2008		30
Statement of Members’ Equity (Deficit) for the three years ended September 30, 2008		31
Statement of Cash Flows for the three years ended September 30, 2008		32
Notes to Financial Statements		33


Exhibit No.		Description of Exhibit
2.1		Agreement of Merger, dated as of June 12, 2007, but effective as of June 13, 2007, by and between the Company and ARS Mergeco LLC (filed as Exhibit 2.1 to the Company’s Current Report on Form 8-K filed on June 13, 2007 and incorporated herein by reference)

3.1		Articles of Organization of the Company (filed as Exhibit 3.1 to the Company’s Registration Statement on Form S-4, SEC File No. 333-117215, and incorporated by reference herein)

3.2		Amended and Restated Operating Agreement of the Company (filed as Exhibit 3.2 to the Company’s Registration Statement on Form S-4, SEC File No. 333-117215, and incorporated by reference herein)

3.3		Certificate of Amendment to the Amended and Restated Operating Agreement of the Company (filed as Exhibit 3.3 to the Company’s Registration Statement on Form S-4, SEC File No. 333-117215, and incorporated by reference herein)

3.4		Second Amended and Restated Operating Agreement of the Company (filed herewith)

4.1		Indenture, dated as of March 17, 2004, by and between the Company and U.S. Bank National Association, as Trustee (filed as Exhibit 4.1 to the Company’s Registration Statement on Form S-4, SEC File No. 333- 117215, and incorporated by reference herein)



4.2		Form of Outstanding Note (included in Exhibit 4.1 to the Company’s Registration Statement on Form S-4, SEC File No. 333-117215, and incorporated by reference herein)

4.3		Form of Exchange Note (included in Exhibit 4.1 to the Company’s Registration Statement on Form S-4, SEC File No. 333-117215, and incorporated by reference herein)

4.4		Registration Rights Agreement, dated as of March 17, 2004, by and between the Company and Jefferies & Company, Inc. (filed as Exhibit 4.4 to the Company’s Registration Statement on Form S-4, SEC File No. 333-117215, and incorporated by reference herein)

10.1		Credit Agreement, dated as of March 17, 2004, by and among the Company, Manufacturers and Traders Trust Company, and the lenders party thereto (filed as Exhibit 10.1 to the Company’s Registration Statement on Form S-4, SEC File No. 333-117215, and incorporated by reference herein)

10.2		Form of Revolving Loan Note dated March 17, 2004, issued by the Company under the Credit Agreement (filed as Exhibit 10.2 to the Company’s Registration Statement on Form S-4, SEC File No. 333-117215, and incorporated by reference herein)

10.3		Security Agreement, dated as of March 17, 2004, by and between the Company and Manufacturers and Traders Trust Company, as collateral agent (filed as Exhibit 10.3 to the Company’s Registration Statement on Form S-4, SEC File No. 333-117215, and incorporated by reference herein)

10.4		Mortgage, Assignment of Production, Security Agreement, Assignment of Leases and Rents, and Fixture Filing, dated as of March 17, 2004, given by the Company and Livingston County Industrial Development Agency in favor of Manufacturers and Traders Trust Company, as collateral agent (filed as Exhibit 10.4 to the Company’s Registration Statement on Form S-4, SEC File No. 333-117215, and incorporated by reference herein)

10.5		Assignment of Agreements, Permits and Contracts, dated as of March 17, 2004, by the Company in favor of Manufacturers and Traders Trust Company, as administrative agent (filed as Exhibit 10.5 to the Company’s Registration Statement on Form S-4, SEC File No. 333-117215, and incorporated by reference herein)

10.6		Sinking Fund Collateral Account and Pledge Agreement, dated as of March 17, 2004, by the Company in favor of Manufacturers and Traders Trust Company, as collateral agent (filed as Exhibit 10.6 to the Company’s Registration Statement on Form S-4, SEC File No. 333-117215, and incorporated by reference herein)

10.7		Purchase Agreement, dated as of March 17, 2004, by and between the Company and Jefferies & Company, Inc. (filed as Exhibit 10.7 to the Company’s Registration Statement on Form S-4, SEC File No. 333-117215, and incorporated by reference herein)

10.8		Pledge and Security Agreement, dated as of March 17, 2004, by the Company in favor of U.S. Bank National Association, as collateral agent (filed as Exhibit 10.8 to the Company’s Registration Statement on Form S-4, SEC File No. 333-117215, and incorporated by reference herein)

10.9		Voting Agreement, dated as of October 28, 1998, by and among Joseph G. Bucci, Gunther K. Buerman and Neil L. Cohen (filed as Exhibit 10.9 to the Company’s Registration Statement on Form S-4, SEC File No. 333-117215, and incorporated by reference herein)

10.10*		Membership Unit Purchase Plan of the Company (included in Exhibit 3.2 to the Company’s Registration Statement on Form S-4, SEC File No. 333-117215, and incorporated by reference herein)



10.11		Amended and Restated Credit Agreement by and among the Company, the financial institutions from time to time party thereto, and Manufacturers and Traders Trust Company as arranger, as agent, as collateral agent and as issuer of certain letters of credit pursuant thereto (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on March 8, 2006 and incorporated by reference herein)

10.12*		Salary Arrangement between the Company and Ann M. Blake effective as of October 13, 2008 (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on October 17, 2008 and incorporated by reference herein)

12.1		Statement re Computation of Ratio of Earnings to Fixed Charges (filed herewith)

24.1		Powers of Attorney (included on the signature page of this report)

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)


Signature		Title	Date

By:	/s/ Joseph Bucci	Vice Chairman, Operations, Executive Committee Member and Manager (Co-Principal Executive Officer)	December 22, 2008
	Joseph G. Bucci


By:	/s/ Gunther K. Buerman	Chairman, Executive Committee Member and Manager (Co-Principal Executive Officer)	December 22, 2008
	Gunther K. Buerman


By:	/s/ Neil L. Cohen	Vice Chairman, Finance and Marketing, Executive Committee Member and Manager (Co-Principal Executive Officer)	December 22, 2008
	Neil L. Cohen


By:	/s/ Charles T. Collins	Manager	December 22, 2008
	Charles T. Collins

By:		Manager
	C. Wesley Gregory III