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TheStreet Open House

Compass Minerals Reports Second-Quarter 2012 Results

Compass Minerals (NYSE: CMP) reports the following results of its second-quarter 2012 operations:

  • Net earnings were $9.5 million, or $0.28 per diluted share, compared with $14.0 million, or $0.42 per diluted share, in the 2011 period.
  • Excluding special items from the current-period results, net earnings were $10.3 million, or $0.31 per diluted share. These special items include losses resulting from the tornado that struck the company’s salt operations in Goderich, ON, in August of 2011 and the cost to refinance the company’s term loans, partially offset by an income tax benefit.
  • Sales were essentially flat year over year at $178.5 million versus $179.9 million in the second quarter of 2011, as a 14 percent gain in specialty fertilizer sales was more than offset by a 6 percent decline in salt sales.
  • Operating earnings declined to $15.5 million from $22.1 million in the prior-year quarter driven by increased sulfate of potash unit production costs related to sourcing higher-cost potassium mineral feedstock as a result of unfavorable solar-evaporation weather at the Great Salt Lake in 2011 and the estimated impact of the 2011 tornado on salt costs.
  • For the six months ended June 30, 2012, cash flow from operations was $115.5 million, down from $194.1 million in the prior-year period.

“Our results this quarter continued to be pressured by the trailing effects of 2011 and early-2012 weather. However, we expect the sulfate of potash market to remain stable this year, and our highway deicing bid results to date suggest that a return to more-typical winter weather throughout our served markets would generate year-over-year salt earnings improvement in the fourth quarter and significant improvements by this time next year,” said Angelo Brisimitzakis, Compass Minerals president and CEO.

 
Compass Minerals Financial Results

(in millions, except for earnings per share)

   
Three months ended

June 30,

Six months ended

June 30,

2012   2011 2012   2011
Sales $ 178.5 $ 179.9 $ 493.8 $ 570.5
Sales less shipping and handling (product sales) 135.6 135.8 357.4 411.7
Operating earnings 15.5 22.1 76.9 106.7
Operating margin 8.7 % 12.3 % 15.6 % 18.7 %
Net earnings 9.5 14.0 49.4 70.5
Net earnings, excluding special items* 10.3 14.0 59.8 70.5
Diluted earnings per share 0.28 0.42 1.47 2.11
Diluted per-share earnings, excluding special items* 0.31 0.42 1.78 2.11
EBITDA* 28.2 38.9 103.7 139.3
Adjusted EBITDA*     31.3       38.5       108.4       139.5  

*These are non-GAAP financial measures. Reconciliations to GAAP measures of performance are provided in tables at the end of this release.

SALT SEGMENT

Salt sales were $119.9 million compared to $127.3 million in the second quarter of 2011, reflecting a 5 percent gain in average selling prices offset by a 10 percent decline in salt volumes. Highway deicing sales volumes declined 15 percent primarily due to low restocking demand in the U.K. compared with unusually robust demand the prior-year quarter and because of lower sales to North American chemical customers. The volume decline was partially offset by a 5 percent improvement in the average selling price of highway deicing products. Consumer and industrial demand improved 2 percent, in line with historical growth rates, and average prices declined 4 percent.

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