CMP

Operational Progress & Leadership Changes

• Plant Nutrition: Two years of operational improvements at the Ogden facility have exceeded the 40-50 million annual adjusted EBITDA target for the segment. A dryer project is underway, expected to complete by the end of FY2027, which will increase product yield, production volume, improve cost structure, and boost finished product quality, solidifying Compass' position as the leading North American producer of sulfate of potash.
• Salt: Production tonnage at the Goderich mine is up year-over-year, but production costs have not declined as much as originally guided due to three factors: lower-than-planned hoisting volumes from Goderich, increased preventive maintenance spending at U.S. mines to improve uptime and stability, and added headcount to maximize production output. Multiple accelerator teams are focused on operational improvements at Goderich (cut times, training, mine design, maintenance efficiency), plus enterprise-wide logistics, network optimization, procurement, and contract management improvements to deliver sustainable cost reductions. The 26-27 highway de-icing bid season has been constructive, with substantial double-digit price improvement in core U.S. markets, supported by structurally tight industry inventories after the 2025-26 winter.
• Leadership: Former Chief Operating Officer Patrick Merrin departed the company; Brandon Reisner, who led operational improvements in Plant Nutrition and the CNI product line, was promoted to COO.

Capital Projects & Strategic Updates

• The planned new mill construction at Goderich is being delayed for additional engineering, sequencing, timing, and governance evaluation, as the company cannot afford production disruptions while focused on increasing output and rebuilding inventory. A detailed timeline update will be provided early 2027.
• The non-binding MOU with EnergyX for a potential Utah lithium project only involves evaluating land and brine leasing; Compass has no plans to re-enter the lithium market, will make no capital or operational commitments, and no deal has been finalized.

Balance Sheet & Capital Allocation

• Net leverage has declined to 2.8x from 4.3x year-over-year, and total net debt is down 13% year-over-year. S&P issued a credit upgrade reflecting the company's debt reduction and business strengthening.
• Near-term capital allocation priorities are asset investment and continued debt reduction; as the balance sheet strengthens and operations stabilize, the board will evaluate additional capital uses, with an update expected at full-year results.

• Full year 2026 consolidated adjusted EBITDA guidance is raised to a range of $218 million to $242 million, with an increased midpoint of $230 million.
• Plant Nutrition segment adjusted EBITDA guidance is raised to $49 million to $57 million, up from the prior range of $43 million to $47 million, reflecting stronger-than-expected pricing and cost performance at Ogden.
• Salt segment adjusted EBITDA guidance range is narrowed to $225 million to $236 million, down from the prior range of $225 million to $240 million, reflecting mixed operational dynamics, inflationary pressures, and slower-than-expected operational improvements.
• Corporate and other costs and full year capital expenditure guidance remain unchanged, at $51 million to $56 million and $90 million to $110 million respectively.
• For fiscal 2027, management expects lower committed volumes compared to past seasons due to current low industry inventories and an assumption of normalized winter weather, with detailed guidance to be provided alongside fourth quarter 2026 results.

Consolidated: Total company adjusted EBITDA was $39.9 million in Q3 2026, compared to $41 million in the prior year quarter. The firm reported a net loss of $5.7 million, an improvement from the $17 million net loss in Q3 2025.

Salt Segment: Revenue increased 5% year-over-year to $173.9 million, contributing 82.2% of total Q3 revenue. Overall segment pricing was up 9% (highway pricing +8%, CNI pricing +6%), highway sales volumes declined 6% while CNI volumes increased 3%. Adjusted EBITDA was $38.9 million, down 15% year-over-year, and operating earnings decreased 25% to $21.2 million. The decline was driven by lower highway volumes and higher-than-expected production and distribution costs, partially offset by pricing gains.

Plant Nutrition Segment: Revenue was $37.6 million, down 16% year-over-year, contributing 17.8% of total Q3 revenue. The revenue decrease was primarily driven by the March 2026 sale of the Windward SOP asset, which resulted in a 19% overall sales volume decline, partially offset by a 4% increase in average sales prices; excluding the Windward sale, sales volumes increased 4% year-over-year. Operating earnings were $7.8 million, up 50% from $5.2 million in the prior year, and adjusted EBITDA improved 32% to $15 million from $11.4 million. Margin expansion was driven by lower per-unit product and distribution costs at the Ogden facility.

• Higher-than-expected production and logistics costs at the Goderich mine: Output is lower than planned, and incremental current spending on maintenance and labor for long-term operational stability has delayed expected efficiency gains. Global fuel costs and tightening truck capacity have also raised logistics expenses.
• Upcoming August 19 tariffs on Canadian goods shipped to the U.S. will primarily impact highway de-icing salt from the Goderich mine; while most exposure has been mitigated via contract pass-through provisions, the situation remains fluid.
• Volatility in global fuel prices creates uncertainty for 2027 costs, which management is currently focused on mitigating.
• The complex new mill construction project at the operating Goderich underground mine carries risk of production disruption if not properly planned, requiring additional evaluation time.

Q: With strong 2027 bid season pricing, is overall price growth around mid-to-high single digit or double digits? What is the volume outlook for 2027 and how are costs expected to trend? / A: Management confirmed overall price increases are around double digits, supported by low industry inventories and market discipline from the prior winter. The company is focused on prioritizing markets that maximize margins rather than chasing volume everywhere. Mine unit costs are trending down, though logistics costs face pressure from fuel and truck capacity; full 2027 guidance will be released with Q4 results. Lower volumes are expected for 2027 due to low starting inventories and a forecast of normalized winter weather after the above-average 2025-26 season.

Q: Can you speak to recent operational leadership changes, the delayed Goderich mill project, and whether these are tied to slower-than-expected cost improvements? / A: The leadership change was made to align the organization with its current needs; new COO Brandon Reisner has a proven track record of operational improvement at Plant Nutrition and the CNI segment, and prior mining experience, making him a strong fit for the role. The mill project delay is not tied to leadership churn; the project is unusually complex because it is being built within an operating underground mine, so the company is taking extra time for front-end engineering and planning to avoid disruptive production impacts, which is a necessary precaution.

Q: How has Plant Nutrition delivered its recent margin improvements, and will the segment rely on pond-based production or purchased potash supplementation going forward? Is the current progress just a return to past performance, or is there structural improvement? / A: Most of the progress reflects restoring operations to historical performance levels, but there are also qualitative improvements including better pond harvest management, reduced processing variability, and higher recovery rates that go beyond past results. The ongoing dryer project will capture additional yield that was previously lost, improve product quality, and deliver further cost improvements starting next year. The company is supplementing production with purchased potash this year, and plans to maintain roughly the same level of supplementation next year, with improved forecasting that allows better cost management of this practice.

Q: What is your bidding strategy for the remainder of the 26-27 bid season, and how are competitor behavior and production constraints shaping your approach to volume and pricing? / A: The company's core strategy is to prioritize margin maximization across all bids, leveraging its deep market knowledge to focus on the most profitable markets and customers, rather than pursuing maximum volume. Going into the season, the focus was on capturing full product value after the prior high-demand winter, and strengthening contract terms like minimum volume commitments to improve revenue visibility. Most large state contracts are already complete, and the company is now wrapping up commercial customer bids over the next few weeks.

Q: How is the latest round of upcoming U.S. tariffs on Canadian goods different from prior rounds, and what can be done to avoid impact to Goderich shipments? / A: Unlike the prior tariff round, which was resolved via USMCA exemptions for essential cross-border trade, this round has not yet received similar clarification. Over the past year, the company has proactively updated most key commercial contracts to include tariff cost pass-through provisions, which has meaningfully reduced exposure. Compass is also actively engaging with U.S. and Canadian governments to emphasize that the Goderich mine is an essential supplier of critical de-icing salt for U.S. public safety that cannot be easily replaced by domestic production.