Compass Minerals International, Inc. Q1 FY2026 earnings call

• Implemented back-to-basics strategy in 2024 to align with market demand, manage inventories, and focus on financial discipline.
• Salt business: Steady winter weather in North American markets, increased sales volumes and price increases in highway deicing/C&I; Goderich mine facing development challenges affecting production.
• Plant Nutrition business: Momentum with improved pond complex at Ogden, product costs trending down, price improvement, sale of Wynyard SOP operation, and adjusted EBITDA guidance increased for the segment.
• Core priorities: 5 core priorities including improving operational efficiencies, reducing capital intensity, simplifying processes, maximizing cash flow, and reducing leverage.
• Balance sheet: Leverage ratio improved to 3.6x, liquidity at $342 million, focus on continuing to improve leverage profile.

Salt Segment

• Operating earnings improved year-over-year to $14.33 per ton, up $2.54 or 22%; adjusted EBITDA per ton increased 2% to $19.61.
• Total salt volumes up 37% compared to prior year; highway deicing volumes +43%, C&I volumes +14%.
• Salt segment revenue in Q1: $332 million vs $242 million a year ago.
• Product cost per ton declined 7% to $50.20; distribution cost per ton increased 6%.

Plant Nutrition Segment

• Operating earnings increased approximately $9 million year-over-year; adjusted EBITDA improved by $8 million.
• Average SOP sales price up 13% to $687 per ton; product cost per ton declined 2% to $520; distribution cost per ton increased 2% to $93.

• Salt Segment: Adjusted EBITDA range for 2026 is $230 million to $252 million, reflecting increased sales tons but muted by production cost headwinds.
• Plant Nutrition Segment: Adjusted EBITDA range is $34 million to $39 million, up due to stronger margins and improved cost structure, partially offset by lower sales volume and Wynyard sale.
• Total Company: Adjusted EBITDA guidance range is $208 million to $240 million, a 2% increase at midpoint.

• Operational Challenges: Goderich mine development panels causing higher costs and lower production rates in the near term.
• Market Uncertainties: Severe winters putting pressure on distribution costs due to surges in network demand.
• Tax and Regulatory: Evolving tax situation with Ontario mining tax settlement and potential swings in effective tax rate.

Q: About the salt market and if it's well supplied for the strong winter, and if Compass has excess tons to sell into a larger spot market A: Ed said the market is very tight; Ben added the market has become tight due to ahead-of-calendar winter, imports and opportunistic supply difficult mid-season due to lead time, and Compass anticipates the market will remain tight if winter continues Q: Regarding salt segment cost and logistics, why were logistics costs higher despite higher volume A: Edward said production costs were down ~6%, distribution costs up ~6% due to inflation and wider network shipping to meet demand; Ben added inflationary pressures on rates and wider network shipping to further destinations Q: About tax rates and cash tax situation for full year 2026 A: Edward mentioned impact of Ontario mining tax settlement; Peter said effective tax rate swings due to income in Canada and losses in US, still early to determine full year cash tax