On September 17, 2024, Compass Minerals International Inc (CMP, Financial) released its 8-K filing detailing preliminary fiscal 2024 third-quarter results. Compass Minerals, a leading global provider of essential minerals, produces salt and specialty potash fertilizer. The company operates rock salt mines in Ontario, Canada, Louisiana, and the United Kingdom, and produces fertilizer from a brine operation at the Great Salt Lake in Utah.
Performance and Challenges
Compass Minerals reported preliminary revenue of $202.9 million for the third quarter, surpassing the analyst estimate of $197.78 million. However, the company posted a net loss of $43.6 million, translating to a net loss per diluted share of $1.05, which is significantly higher than the estimated loss of $0.56 per share. The company attributed the delay in finalizing its results to ongoing financial restatements related to historical accounting matters.
Compass Minerals' core businesses produced strong results in the third quarter. We had solid results in the Salt segment that reflect the robust earnings potential of that business, while we continued to see sequential improvements in realized price, adjusted EBITDA per ton, and adjusted EBITDA margin in the Plant Nutrition segment," said Edward C. Dowling Jr., president and CEO.
Financial Achievements
Despite the challenges, Compass Minerals achieved a preliminary adjusted EBITDA of $32.8 million, which includes a non-cash gain of $0.9 million related to the decrease of the Fortress contingent liability. The Salt segment performed robustly with an adjusted EBITDA per ton of $28.05, and the Plant Nutrition segment saw an average sales price increase for sulfate of potash to $691.27 per ton.
Income Statement Highlights
| Metric | Q3 2024 |
|---|---|
| Revenue | $202.9 million |
| Operating Earnings | $5.9 million |
| Adjusted Operating Earnings | $7.4 million |
| Adjusted EBITDA | $32.8 million |
| Net Loss | $(43.6) million |
| Net Loss per Diluted Share | $(1.05) |
| Adjusted Net Loss | $(42.1) million |
| Adjusted Net Loss per Diluted Share | $(1.01) |
Analysis of Company Performance
The Salt segment reported preliminary operating earnings of $25.9 million and adjusted EBITDA of $41.6 million. The segment's revenue totaled $160.6 million, with highway deicing sales volumes at 1.09 million tons and consumer and industrial pricing at $194.35 per ton. The Plant Nutrition segment, however, faced challenges with an operating loss of $1.4 million, despite a sequential increase in average sales price.
Compass Minerals ended the quarter with $220.8 million in liquidity, including $12.8 million in cash and $208.0 million available under its revolving credit facility. The company's preliminary consolidated total net leverage ratio was 4.3 times, within the covenant limit of 6.5 times.
Updated 2024 Outlook
The company provided updated guidance for 2024, projecting total salt sales volumes between 9,200 and 9,400 thousand tons and adjusted EBITDA for the Salt segment between $215 million and $225 million. The Plant Nutrition segment is expected to generate revenue between $175 million and $185 million, with adjusted EBITDA ranging from $21 million to $26 million.
Compass Minerals continues to address its financial restatements and aims to improve cash generation and deleverage its balance sheet. The company remains focused on operational excellence and continuous improvement to enhance shareholder returns.
Explore the complete 8-K earnings release (here) from Compass Minerals International Inc for further details.
