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Compass Minerals International's CEO Discusses Q1 2012 Results - Earnings Call Transcript

Now I'll turn the call over to Angelo.

Angelo Brisimitzakis

Thanks, Peggy. Good morning, everyone. Thanks for joining us today.

I’m sure it didn’t come as a surprise to anyone that weather was a challenge for us this quarter. It’s our most winter-dependent quarter with deicing typically making up approximately 2/3 of our company’s earnings. The first quarter snow data and highway deicing volumes that we published earlier this month gave you some idea of the mild weather conditions in the primary regions of North America we serve.

In reality, it wasn’t just our service area that seemed more like spring than winter. According to a report published by NOAA this month, this was the warmest first quarter in the US’s lower 48 states since they began keeping records in 1895. It was also mild in the UK and in southern Ontario.

In total, the North American cities we track and report on recorded the fewest snow days for a full winter season in at least 15 years. From time to time I’ve been asked to describe the worst case weather scenario for our deicing business. From now on, I’ll just point to the winter of 2011-2012.

But given this context, I think most people will also agree that the first quarter helped prove what we’ve said all along. Our salt business is remarkably resilient. Though salt segment sales volumes for $3.6 million tons was the lowest first quarter volume since we became a public company in 2003, our salt segment sales of $254.3 million were well ahead of any first quarter period prior to the heavy snowfall year of 2008, and removing the effects of the tornado, our pro forma salt segment operating margin percentage increased a 200 basis points over the first quarter of 2011 despite a less favorable product mix.

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