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Compass Minerals' CEO Discusses Q4 2011 Results - Earnings Call Transcript

Now I'll turn the call over to Angelo.

Angelo C. Brisimitzakis

Thanks Peggy. Hello everyone. First, let me say that I hope it’s snowing where you are this morning. It’s no secret that winter got off to a very late and weak start this season and you probably weren’t surprised by how much the mild weather depressed our fourth quarter results. But despite a very low snow fall in the fourth quarter, a devastating tornado that temporarily shut down our Goderich operations, and much too cool rainy weather at the Great Salt Lake this past summer, which prevented us from reaching normal SOP solar evaporation production levels. Our 2011results were still the second best in our company’s history when the weather and the other external factors are considered.

Our 2011 sales were up 3% to $1.1 billion, just 5% below our banner 2008 year.

Our pro forma net earnings were up 10% to $160 million, just 4% below our record set in 2009. And we generated more than $250 million in cash flow from operations, up 5% which was just 1% below our record set in 2008.

These are commendable results considering the obstacles we had to overcome during 2011. So how did we do it? Well the strength of Compass Minerals comes from our foundation of the exceptional business fundamentals. We serve very attractive end markets. Our products are essential in their applications. Our primary asset has structural advantages, our production, logistics and business units are well integrated and we have creative and dedicated employees who found safe ways to overcome many of the challenges we faced.These are the strength that give Compass Minerals its exceptional resilience.

Our Salt segment faced some particularly difficult challenges in 2011. In the first quarter, our Salt operating margins were compressed by the higher cost inventory we carried over from to 2010. We had sold through that inventory and production costs were returning to the normal levels when a tornado struck Goderich, Ontario, causing, firstly, significant damage to our largest mine, then striking our mechanical evaporation plant located a couple of miles away.

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