• Consolidated Revenue: $307 million, down 10% year over year.

• Net Loss: $24 million for the quarter.

• Adjusted EBITDA: Approximately $32 million for the quarter.

• Salt Business Revenue: $242 million, compared to $274 million a year ago.

• Salt Business Pricing: Up 1% year over year to approximately $97 per ton.

• Salt Business Volumes: Down 13% compared to the prior year period.

• Salt Business Operating Earnings per Ton: $11.79, down 34% year over year.

• Salt Business Adjusted EBITDA per Ton: $19.17, down 17% year over year.

• Plant Nutrition Revenue: $61 million, up 24% year over year.

• Plant Nutrition Sales Volumes: Up 36% from prior year periods.

• Plant Nutrition Pricing: Down 9% year over year.

• Liquidity at Quarter End: $126 million, with $46 million in cash and $80 million in revolver capacity.

• Net Leverage Ratio: 5.9 times, within the covenant of 6.5 times.

• Warning! GuruFocus has detected 9 Warning Signs with CMP.

Release Date: February 11, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Compass Minerals International Inc (NYSE:CMP) successfully reduced North American highway deicing inventory volumes by approximately 10% year over year, freeing up cash and improving supply-demand balance.

• The company reported stronger sales volumes and lower costs in the plant nutrition business, allowing them to exceed forecasts and increase guidance for this segment.

• CMP is making progress in restoring the pond complex at Ogden, which is beginning to show positive results and impact on cost structure.

• The company is implementing a disciplined approach to capital expenditure, allowing flexibility to adjust spending based on seasonal performance.

• CMP is focused on improving operational efficiency and reliability, which is expected to have a positive impact on capital expenditure over time.

Negative Points

• Consolidated revenue for the first quarter was down 10% year over year, primarily due to a lighter start in sales in the salt business attributed to mild weather in October and November.

• The company reported a consolidated net loss of $24 million for the quarter, with adjusted EBITDA at approximately $32 million.

• Salt business revenue decreased to $242 million from $274 million a year ago, with volumes down 13% compared to the prior year period.

• Pricing in the plant nutrition business was weaker than expected, despite stronger sales volumes.

• CMP lowered its full-year volume guidance due to a slow start to the winter season, despite recent strong snow activity.

Q & A Highlights

Q: Given the recent winter weather activity, can you frame the outlook for highway deicing volumes in both Q2 and the full year? A: Edward Dowling, CEO: January was strong, especially in southern markets, and February is looking promising. We’ll assess inventory and production plans based on how the season concludes in March.

Q: What does “conditionally qualified” mean for Fortress? A: Edward Dowling, CEO: It refers to the initial lab-based approval by the Forest Service. The next step is the operational field evaluation, which includes integration testing with existing retardants.

Q: Why did you lower your full-year volume guidance despite recent snow activity? A: Edward Dowling, CEO: We are cautious with guidance due to the slow start in October and November. If February and March perform well, we may adjust guidance upwards.

Q: Can you discuss the accounts receivable line and inventory targets? A: Edward Dowling, CEO: We aim to reduce inventories below historical norms to free up cash. Brent Collins, VP of Investor Relations, added that accounts receivable reflects sales timing and a $35 million insurance-related gross-up.

Q: Are you deferring or canceling $25 million in CapEx, and what projects are affected? A: Peter Fjellman, CFO: We are deferring lower-risk projects from the 2025 capital plan. These may reappear in 2026, depending on the year’s performance.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

This article first appeared on GuruFocus.