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Compass Minerals Reports Fourth-Quarter 2012 Earnings

Compass Minerals (NYSE: CMP) reports the following results of its fourth-quarter 2012 operations:
  • Net earnings for the quarter were $30.1 million, or $0.90 per diluted share, compared to $43.9 million, or $1.31 per diluted share, in the fourth quarter of 2011.
  • Full-year net earnings were $88.9 million, or $2.65 per diluted share, compared to $149.0 million, or $4.45 per diluted share, in the prior year.
  • These results include estimated losses in both 2012 and 2011 related to the effects of a tornado that struck the company’s salt operations in Goderich, Ontario, in August 2011, as well as CEO transition expenses in the fourth quarter of 2012. Excluding these special items, net earnings were $34.3 million, or $1.02 per diluted share, in the 2012 fourth quarter versus $55.3 million, or $1.65 per diluted share, in the 2011 quarter. For the full year, net earnings excluding special items were $104.4 million, or $3.11 per diluted share, in 2012 and $160.4 million, or $4.79 per diluted share, in 2011.
  • Fourth-quarter sales decreased $39.0 million from the fourth quarter of 2011 to $267.1 million due to the effects of mild winter weather in North America that continued to limit deicing salt sales, partially offset by higher sales of specialty fertilizer products.
  • Operating income was $42.2 million, down from $60.0 million in the prior-year period, primarily resulting from lower salt sales volumes and higher specialty fertilizer per-unit product costs.
  • Cash flow from operations for 2012 was $151.7 million compared to $252.3 million in 2011.

“Strong and steady demand for Compass Minerals’ specialty fertilizer products has helped offset some of the short-term softness in the company’s salt business caused by the mild winter weather,” said Fran Malecha, Compass Minerals’ new president and CEO, who joined the company in mid-January. “I attribute this company’s strength and resilience to its great people and valuable assets. Those are the fundamentals for success in any business. I’m impressed by Compass Minerals’ potential and excited to be a part of its bright future.”
 
Financial Results

(in millions except per-share data)
  Three months ended

December 31,
  Twelve months ended

December 31,
2012   2011 2012   2011
Sales $ 267.1 $ 306.1 $ 941.9 $ 1,105.7
Sales less shipping and handling (product sales) 206.3 227.2 703.8 811.9
Operating earnings 42.2 60.0 133.2 215.3
Operating margin 16 % 20 % 14 % 19 %
Net earnings 30.1 43.9 88.9 149.0
Net earnings, excluding special items* 34.3 55.3 104.4 160.4
Diluted earnings per share 0.90 1.31 2.65 4.45
Diluted earnings per share, excluding special items* 1.02 1.65 3.11 4.79
EBITDA* 60.2 77.4 194.0 283.0
Adjusted EBITDA*     59.5       75.9       197.7       280.0  

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

SALT SEGMENT

Salt segment sales declined to $206.7 million from $250.1 million in the 2011 quarter as demand for highway, consumer and commercial deicing products was curtailed by a combination of mild winter weather throughout much of North America and higher-than-typical customer inventories carried over from last winter. Demand for all other types of salt was substantially the same as in the 2011 quarter. Highway deicing sales volume declined 17 percent from the 2011 quarter while the business unit’s average selling price remained consistent year over year. Lower demand for consumer and commercial deicing products drove a 13 percent decline in consumer and industrial sales volume and generated an unfavorable product mix shift that decreased the business unit’s average selling price by 4 percent year over year.

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