Delaware (State or other jurisdiction of incorporation) | 001-31921 (Commission File Number) | 36-3972986 (I.R.S. Employer Identification No.) |
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Title of each class | Trading Symbol | Name of each exchange on which registered | ||
Common stock, $0.01 par value | CMP | The New York Stock Exchange |
Exhibit No. | Exhibit Description | |
COMPASS MINERALS INTERNATIONAL, INC. | ||
Date: August 6, 2019 | By: | /s/ James D. Standen |
Name: James D. Standen | ||
Title: Chief Financial Officer |
Exhibit 99.1 |
• | Second-quarter 2019 consolidated revenue of $245.2 million, down 1% year-over-year |
• | Consolidated operating earnings of $4.1 million, up 46%; EBITDA* of $34.5 million was $3.0 million below the second-quarter 2018 results |
• | Net loss of $0.36 per diluted share, versus a net loss $0.23 per diluted share, in second quarter of 2018 |
• | When adjusted for unusual logistics costs associated with Mississippi River flooding, adjusted net loss* totaled $0.29 per diluted share and adjusted EBITDA totaled $40.9 million |
• | Strong North American highway deicing bid pricing achieved for upcoming winter season |
2019 OUTLOOK: FULL YEAR EBITDA: $310 million to $350 million | ||||
2H19 | FY19 | |||
Salt Segment | ||||
Volume | 10.8 million to 11.2 million tons | |||
Revenue | $475 million to $500 million | |||
EBITDA | $135 million to $155 million | |||
Plant Nutrition North America Segment | ||||
Volume | 340,000 to 360,000 tons | |||
Revenue | $135 million to $155 million | |||
EBITDA | $40 million to $50 million | |||
Plant Nutrition South America Segment | ||||
Volume | 800,000 to 900,000 tons | |||
Revenue | $275 million to $300 million | |||
EBITDA | $60 million to $75 million | |||
Corporate | ||||
Corporate and other expense | ~$60 million | |||
Interest expense | $68 million to $70 million | |||
Depreciation, depletion and amortization | $140 million to $145 million | |||
Capital expenditures | $95 million to $100 million | |||
Effective tax rate | ~28% |
Investor/Media Contact | |
Theresa L. Womble | |
Director of Investor Relations | |
+1.913.344.9362 | |
womblet@compassminerals.com |
Reconciliation for Net (Loss) Earnings, Excluding Special Item (unaudited, in millions) | |||||||||||||||
Three months ended June 30, | Six months ended June 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Net (loss) earnings | $ | (11.8 | ) | $ | (7.6 | ) | $ | (4.2 | ) | $ | 5.0 | ||||
Logistics impact due to flooding, net of tax(1) | 2.1 | — | 2.1 | — | |||||||||||
Net (loss) earnings, excluding special item | $ | (9.7 | ) | $ | (7.6 | ) | $ | (2.1 | ) | $ | 5.0 |
Reconciliation for Adjusted Operating Earnings (unaudited, in millions) | |||||||||||||||
Three months ended June 30, | Six months ended June 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Operating earnings | $ | 4.1 | $ | 2.8 | $ | 37.3 | $ | 29.4 | |||||||
Logistics impact from flooding(1) | 2.8 | — | 2.8 | — | |||||||||||
Adjusted operating earnings | $ | 6.9 | $ | 2.8 | $ | 40.1 | $ | 29.4 | |||||||
Sales | 245.2 | 246.7 | 648.9 | 684.6 | |||||||||||
Adjusted operating margin | 2.8 | % | 1.1 | % | 6.2 | % | 4.3 | % |
Reconciliation for EBITDA and Adjusted EBITDA (unaudited, in millions) | |||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Net (loss) earnings | $ | (11.8 | ) | $ | (7.6 | ) | $ | (4.2 | ) | $ | 5.0 | ||||
Interest expense | 16.8 | 14.9 | 33.0 | 28.6 | |||||||||||
Income tax (benefit) expense | (4.4 | ) | (5.1 | ) | 0.5 | (0.7 | ) | ||||||||
Depreciation, depletion and amortization | 33.9 | 35.3 | 68.9 | 69.6 | |||||||||||
EBITDA | $ | 34.5 | $ | 37.5 | $ | 98.2 | $ | 102.5 | |||||||
Adjustments to EBITDA: | |||||||||||||||
Logistics impact from flooding(1) | 2.8 | — | 2.8 | — | |||||||||||
Other expense (income), net(2) | 3.6 | 1.0 | 8.0 | (3.2 | ) | ||||||||||
Adjusted EBITDA | $ | 40.9 | $ | 38.5 | $ | 109.0 | $ | 99.3 |
(1) | The company incurred additional logistics costs related to flooding along the Mississippi River. |
(2) | Primarily includes interest income and foreign exchange gains and losses. |
Salt Segment Performance (unaudited, in millions, except for sales volumes and prices per short ton) | |||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Sales | $ | 112.6 | $ | 121.1 | $ | 419.0 | $ | 437.0 | |||||||
Operating earnings | $ | 14.6 | $ | 12.5 | $ | 66.9 | $ | 46.6 | |||||||
Operating margin | 13.0 | % | 10.3 | % | 16.0 | % | 10.7 | % | |||||||
Adjusted operating earnings(1) | $ | 17.4 | $ | 12.5 | $ | 69.7 | $ | 46.6 | |||||||
Adjusted operating margin(1) | 15.5 | % | 10.3 | % | 16.6 | % | 10.7 | % | |||||||
EBITDA(1) | $ | 29.4 | $ | 26.6 | $ | 97.0 | $ | 75.4 | |||||||
EBITDA(1) margin | 26.1 | % | 22.0 | % | 23.2 | % | 17.3 | % | |||||||
Adjusted EBITDA(1) | $ | 32.2 | $ | 26.6 | $ | 99.8 | $ | 75.4 | |||||||
Adjusted EBITDA(1) margin | 28.6 | % | 22.0 | % | 23.8 | % | 17.3 | % | |||||||
Sales volumes (in thousands of tons): | |||||||||||||||
Highway deicing | 865 | 1,201 | 4,408 | 5,463 | |||||||||||
Consumer and industrial | 438 | 403 | 989 | 905 | |||||||||||
Total salt | 1,303 | 1,604 | 5,397 | 6,368 | |||||||||||
Average sales prices (per ton): | |||||||||||||||
Highway deicing | $ | 54.17 | $ | 50.40 | $ | 60.25 | $ | 54.18 | |||||||
Consumer and industrial | $ | 150.02 | $ | 150.29 | $ | 155.15 | $ | 155.83 | |||||||
Total salt | $ | 86.41 | $ | 75.47 | $ | 77.63 | $ | 68.62 |
(1) | See reconciliations below. |
Reconciliation for Salt Segment Adjusted Operating Earnings (unaudited, in millions) | |||||||||||||||
Three months ended June 30, | Six months ended June 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Reported GAAP segment operating earnings | $ | 14.6 | $ | 12.5 | $ | 66.9 | $ | 46.6 | |||||||
Logistics impact due to flooding(1) | 2.8 | — | 2.8 | — | |||||||||||
Segment adjusted operating earnings | $ | 17.4 | $ | 12.5 | $ | 69.7 | $ | 46.6 | |||||||
Segment sales | 112.6 | 121.1 | 419.0 | 437.0 | |||||||||||
Segment adjusted operating margin | 15.5 | % | 10.3 | % | 16.6 | % | 10.7 | % |
Reconciliation for Salt Segment EBITDA and Adjusted EBITDA (unaudited, in millions) | |||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Reported GAAP segment operating earnings | $ | 14.6 | $ | 12.5 | $ | 66.9 | $ | 46.6 | |||||||
Depreciation, depletion and amortization | 14.8 | 14.1 | 30.1 | 28.8 | |||||||||||
Segment EBITDA | $ | 29.4 | $ | 26.6 | $ | 97.0 | $ | 75.4 | |||||||
Logistics impact due to flooding(1) | 2.8 | — | 2.8 | — | |||||||||||
Segment adjusted EBITDA | $ | 32.2 | $ | 26.6 | $ | 99.8 | $ | 75.4 | |||||||
Segment sales | 112.6 | 121.1 | 419.0 | 437.0 | |||||||||||
Segment EBITDA margin | 26.1 | % | 22.0 | % | 23.2 | % | 17.3 | % | |||||||
Segment Adjusted EBITDA margin | 28.6 | % | 22.0 | % | 23.8 | % | 17.3 | % |
Plant Nutrition North America Segment Performance (unaudited, dollars in millions, except for prices per short ton) | |||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Sales | $ | 48.1 | $ | 51.8 | $ | 85.3 | $ | 104.7 | |||||||
Operating earnings | $ | 4.6 | $ | 4.2 | $ | 3.0 | $ | 9.1 | |||||||
Operating margin | 9.6 | % | 8.1 | % | 3.5 | % | 8.7 | % | |||||||
EBITDA(1) | $ | 15.5 | $ | 17.2 | $ | 25.5 | $ | 33.4 | |||||||
EBITDA(1) margin | 32.2 | % | 33.2 | % | 29.9 | % | 31.9 | % | |||||||
Sales volumes (in thousands of tons) | 74 | 80 | 131 | 167 | |||||||||||
Average sales price (per ton) | $ | 649 | $ | 644 | $ | 652 | $ | 626 |
(1) | EBITDA is a non-GAAP financial measure. A reconciliation of GAAP operating earnings to EBITDA follows. |
Reconciliation for Plant Nutrition North America Segment EBITDA (unaudited, in millions) | |||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Reported GAAP segment operating earnings | $ | 4.6 | $ | 4.2 | $ | 3.0 | $ | 9.1 | |||||||
Depreciation, depletion and amortization | 10.9 | 13.0 | 22.5 | 24.3 | |||||||||||
Segment EBITDA | $ | 15.5 | $ | 17.2 | $ | 25.5 | $ | 33.4 | |||||||
Segment sales | 48.1 | 51.8 | 85.3 | 104.7 | |||||||||||
Segment EBITDA margin | 32.2 | % | 33.2 | % | 29.9 | % | 31.9 | % |
Plant Nutrition South America Segment Performance (unaudited, dollars in millions, except for prices per short ton) | |||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Sales | $ | 82.1 | $ | 71.1 | $ | 139.8 | $ | 137.4 | |||||||
Operating earnings (loss) | $ | 1.7 | $ | 0.7 | $ | (0.9 | ) | $ | 1.5 | ||||||
Operating margin | 2.1 | % | 1.0 | % | (0.6 | )% | 1.1 | % | |||||||
EBITDA(1) | $ | 7.2 | $ | 6.7 | $ | 10.1 | $ | 13.3 | |||||||
EBITDA(1) margin | 8.8 | % | 9.4 | % | 7.2 | % | 9.7 | % | |||||||
Sales volumes (in thousands of tons) | |||||||||||||||
Agriculture | 109 | 90 | 161 | 151 | |||||||||||
Chemical solutions | 80 | 69 | 162 | 148 | |||||||||||
Total sales volumes | 189 | 159 | 323 | 299 | |||||||||||
Average sales prices (per ton): | |||||||||||||||
Agriculture | $ | 556 | $ | 538 | $ | 596 | $ | 582 | |||||||
Chemical solutions | $ | 266 | $ | 331 | $ | 270 | $ | 336 | |||||||
Total Plant Nutrition South America | $ | 433 | $ | 448 | $ | 432 | $ | 460 |
(1) | EBITDA is a non-GAAP financial measure. A reconciliation of GAAP operating earnings to EBITDA follows. |
Reconciliation for Plant Nutrition South America Segment EBITDA (unaudited, in millions) | |||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Reported GAAP segment operating earnings (loss) | $ | 1.7 | $ | 0.7 | $ | (0.9 | ) | $ | 1.5 | ||||||
Depreciation, depletion and amortization | 5.4 | 5.6 | 11.0 | 11.5 | |||||||||||
Net earnings in equity method investee | 0.1 | 0.4 | — | 0.3 | |||||||||||
Segment EBITDA | $ | 7.2 | $ | 6.7 | $ | 10.1 | $ | 13.3 | |||||||
Segment sales | 82.1 | 71.1 | 139.8 | 137.4 | |||||||||||
Segment EBITDA margin | 8.8 | % | 9.4 | % | 7.2 | % | 9.7 | % |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Sales | $ | 245.2 | $ | 246.7 | $ | 648.9 | $ | 684.6 | |||||||
Shipping and handling cost | 48.0 | 49.8 | 160.9 | 169.9 | |||||||||||
Product cost | 151.4 | 154.4 | 369.6 | 406.8 | |||||||||||
Gross profit | 45.8 | 42.5 | 118.4 | 107.9 | |||||||||||
Selling, general and administrative expenses | 41.7 | 39.7 | 81.1 | 78.5 | |||||||||||
Operating earnings | 4.1 | 2.8 | 37.3 | 29.4 | |||||||||||
Other expense (income): | |||||||||||||||
Interest expense | 16.8 | 14.9 | 33.0 | 28.6 | |||||||||||
Net earnings in equity investee | (0.1 | ) | (0.4 | ) | — | (0.3 | ) | ||||||||
Other, net | 3.6 | 1.0 | 8.0 | (3.2 | ) | ||||||||||
(Loss) earnings before income taxes | (16.2 | ) | (12.7 | ) | (3.7 | ) | 4.3 | ||||||||
Income tax (benefit) expense | (4.4 | ) | (5.1 | ) | 0.5 | (0.7 | ) | ||||||||
Net (loss) earnings | $ | (11.8 | ) | $ | (7.6 | ) | $ | (4.2 | ) | $ | 5.0 | ||||
Basic net (loss) earnings per common share | $ | (0.36 | ) | $ | (0.23 | ) | $ | (0.14 | ) | $ | 0.14 | ||||
Diluted net (loss) earnings per common share | $ | (0.36 | ) | $ | (0.23 | ) | $ | (0.14 | ) | $ | 0.14 | ||||
Weighted-average common shares outstanding (in thousands):(1) | |||||||||||||||
Basic | 33,883 | 33,850 | 33,878 | 33,843 | |||||||||||
Diluted | 33,883 | 33,850 | 33,878 | 33,843 |
(1) | Excludes weighted participating securities such as RSUs and PSUs that receive non-forfeitable dividends, which consist of 319,000 and 276,000 weighted participating securities for the three and six months ended June 30, 2019, respectively, and 191,000 and 177,000 weighted participating securities for the three and six months ended June 30, 2018, respectively. |
(Unaudited) | |||||||
June 30, | December 31, | ||||||
2019 | 2018 | ||||||
ASSETS | |||||||
Cash and cash equivalents | $ | 20.4 | $ | 27.0 | |||
Receivables, net | 178.5 | 311.6 | |||||
Inventories | 309.0 | 266.6 | |||||
Other current assets | 117.3 | 116.0 | |||||
Property, plant and equipment, net | 1,051.5 | 1,052.0 | |||||
Intangible and other noncurrent assets | 644.2 | 594.7 | |||||
Total assets | $ | 2,320.9 | $ | 2,367.9 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
Current portion of long-term debt | $ | 72.8 | $ | 43.5 | |||
Other current liabilities | 203.6 | 239.8 | |||||
Long-term debt, net of current portion | 1,275.9 | 1,321.2 | |||||
Deferred income taxes and other noncurrent liabilities | 245.7 | 223.2 | |||||
Total stockholders' equity | 522.9 | 540.2 | |||||
Total liabilities and stockholders' equity | $ | 2,320.9 | $ | 2,367.9 |
COMPASS MINERALS INTERNATIONAL, INC. | |||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||
(unaudited, in millions) | |||||||
Six Months Ended June 30, | |||||||
2019 | 2018 | ||||||
Net cash provided by operating activities | $ | 103.2 | $ | 181.6 | |||
Cash flows from investing activities: | |||||||
Capital expenditures | (49.8 | ) | (52.1 | ) | |||
Other, net | (1.0 | ) | (1.5 | ) | |||
Net cash used in investing activities | (50.8 | ) | (53.6 | ) | |||
Cash flows from financing activities: | |||||||
Proceeds from revolving credit facility borrowings | 172.9 | 249.3 | |||||
Principal payments on revolving credit facility borrowings | (199.1 | ) | (322.2 | ) | |||
Proceeds from issuance of long-term debt | 20.1 | 16.8 | |||||
Principal payments on long-term debt | (11.8 | ) | (11.2 | ) | |||
Dividends paid | (49.2 | ) | (49.0 | ) | |||
Deferred financing costs | — | (0.3 | ) | ||||
Shares withheld to satisfy employee tax obligations | (0.3 | ) | — | ||||
Other, net | (0.6 | ) | (0.5 | ) | |||
Net cash used in financing activities | (68.0 | ) | (117.1 | ) | |||
Effect of exchange rate changes on cash and cash equivalents | 9.0 | (6.7 | ) | ||||
Net change in cash and cash equivalents | (6.6 | ) | 4.2 | ||||
Cash and cash equivalents, beginning of the year | 27.0 | 36.6 | |||||
Cash and cash equivalents, end of period | $ | 20.4 | $ | 40.8 |
Three Months Ended June 30, 2019 | Salt | Plant Nutrition North America | Plant Nutrition South America | Corporate & Other(1) | Total | |||||||||||||||
Sales to external customers | $ | 112.6 | $ | 48.1 | $ | 82.1 | $ | 2.4 | $ | 245.2 | ||||||||||
Intersegment sales | — | 2.6 | 1.1 | (3.7 | ) | — | ||||||||||||||
Shipping and handling cost | 37.6 | 6.5 | 3.9 | — | 48.0 | |||||||||||||||
Operating earnings (loss) | 14.6 | 4.6 | 1.7 | (16.8 | ) | 4.1 | ||||||||||||||
Depreciation, depletion and amortization | 14.8 | 10.9 | 5.4 | 2.8 | 33.9 | |||||||||||||||
Total assets (as of end of period) | 905.2 | 565.3 | 731.5 | 118.9 | 2,320.9 |
Three Months Ended June 30, 2018 | Salt | Plant Nutrition North America | Plant Nutrition South America | Corporate & Other(1) | Total | |||||||||||||||
Sales to external customers | $ | 121.1 | $ | 51.8 | $ | 71.1 | $ | 2.7 | $ | 246.7 | ||||||||||
Intersegment sales | — | 2.2 | 1.1 | (3.3 | ) | — | ||||||||||||||
Shipping and handling cost | 39.4 | 6.2 | 4.2 | — | 49.8 | |||||||||||||||
Operating earnings (loss) | 12.5 | 4.2 | 0.7 | (14.6 | ) | 2.8 | ||||||||||||||
Depreciation, depletion and amortization | 14.1 | 13.0 | 5.6 | 2.6 | 35.3 | |||||||||||||||
Total assets (as of end of period) | 830.7 | 584.2 | 726.2 | 133.2 | 2,274.3 |
Six Months Ended June 30, 2019 | Salt | Plant Nutrition North America | Plant Nutrition South America | Corporate & Other(1) | Total | |||||||||||||||
Sales to external customers | $ | 419.0 | $ | 85.3 | $ | 139.8 | $ | 4.8 | $ | 648.9 | ||||||||||
Intersegment sales | — | 3.1 | 2.6 | (5.7 | ) | — | ||||||||||||||
Shipping and handling cost | 141.3 | 12.5 | 7.1 | — | 160.9 | |||||||||||||||
Operating earnings (loss) | 66.9 | 3.0 | (0.9 | ) | (31.7 | ) | 37.3 | |||||||||||||
Depreciation, depletion and amortization | 30.1 | 22.5 | 11.0 | 5.3 | 68.9 |
Six Months Ended June 30, 2018 | Salt | Plant Nutrition North America | Plant Nutrition South America | Corporate & Other(1) | Total | |||||||||||||||
Sales to external customers | $ | 437.0 | $ | 104.7 | $ | 137.4 | $ | 5.5 | $ | 684.6 | ||||||||||
Intersegment sales | — | 2.4 | 1.5 | (3.9 | ) | — | ||||||||||||||
Shipping and handling cost | 148.9 | 12.6 | 8.4 | — | 169.9 | |||||||||||||||
Operating earnings (loss) | 46.6 | 9.1 | 1.5 | (27.8 | ) | 29.4 | ||||||||||||||
Depreciation, depletion and amortization | 28.8 | 24.3 | 11.5 | 5.0 | 69.6 |
(1) | Corporate and other includes corporate entities, records management operations and other incidental operations and eliminations. Operating earnings (loss) for corporate and other includes indirect corporate overhead including costs for general corporate governance and oversight, as well as costs for the human resources, information technology, legal and finance functions. |
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