Full Transcript: Compass Minerals Intl Q3 2026 Earnings Call

Compass Minerals Intl (NYSE: CMP ) reported third-quarter financial results on Thursday. The transcript from the company's third-quarter earnings call has been provided below. APIs provide real-time access to earnings call transcripts and financial data. Visit to learn more.

7 million from $17 million. The company raised full-year consolidated adjusted EBITDA guidance midpoint to $230 million, with notable strength in the Plant Nutrition segment leading to revised guidance of $49 million to $57 million. Operational improvements at the Ogden site drove a $15 million adjusted EBITDA for Plant Nutrition, and the company plans further investments in a dryer project to enhance product yield. Salt revenue increased by 5%, driven by a 9% pricing increase, although higher production and logistics costs impacted EBITDA, which decreased by 15%.

Management highlighted strategic efforts to improve operational efficiency at Goderich mine, including maintenance investments and workforce expansion. The company is proactive in mitigating potential tariff impacts on Canadian goods and is leveraging commercial agreements to minimize exposure. 3 times, supported by a 13% reduction in total net debt year over year. Leadership changes were announced, with Brandon Reisner promoted to Chief Operating Officer, emphasizing a focus on operational improvements.

Future salt pricing is expected to improve, with strong bid season results indicating double-digit price increases in some markets. Full Transcript OPERATOR Hello everyone. Thank you for joining us and welcome to Compass Minerals Intl fiscal third quarter 2026 earnings conference call. After today's prepared remarks, we will host a question and answer session.

If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. I will now hand the conference over to Trip Sullivan, Investor Relations. Please go ahead.

Trip Sullivan, Investor Relations Thank you, operator. Good morning and welcome to the Compass Minerals Intl fiscal third quarter 2026 earnings conference call. Today we will discuss our most recent quarterly results. We will begin with prepared remarks from our President and CEO, Edward Dowling, and our CFO, Peter Feldman.

Joining in for the question and answer portion of the call will be Ben Nichol, our Chief Commercial Officer. Before we get started, I will remind everyone that the remarks we make today reflect financial and operational outlooks as of today's date, August 6, 2026. These outlooks entail assumptions and expectations that involve risks and uncertainties that could cause the company's actual results to differ materially. com.

Our remarks today also include certain non-GAAP financial measures. You can find reconciliations of these items in our earnings release or in our presentation, both of which are also available online. And with that, I'll now turn the call over to Ed. Edward Dowling, President and CEO Thank you, Tripp.

Good morning, everyone. I'll start with the plant nutrition business because it's earned the lead. At Ogden we produced segment adjusted EBITDA of $15 million in the quarter on improved pricing and lower per unit costs. We've again raised our full year guidance for this business.

Operational improvements we put in place two years ago are compounding. The team was determined to restore the business to the $40 to $50 million adjusted EBITDA range per year and have now exceeded that level. We continue to invest in Ogden with the dryer project underway that we expect to complete by the end of next fiscal year. That investment will allow us to improve product yield, further improve production volume and cost profile of this operation, as well as finished good product quality.

We're excited about the continued momentum at our Ogden site and solidifying our position as the leading North American producer of sulfate of potash. In our salt business, the commercial story is strong. We realized meaningful price gains in highway de-icing during the quarter and are beginning to see a constructive pricing environment in our C&I product line as well. These are encouraging, and I want to put them into context.

When comparing the salt costs in our P&L between periods, there are a number of factors that must be considered, including production cost, logistics cost, regional and product mix. As the winter unfolds, where we sell our products, where they are produced, how they are shipped to the customer, and our production costs all have various levels of impact, particularly in a season like this past one where inventory levels became very tight. Production tons from our mines are up year over year. That's a positive.

But costs, while lower than last year as original guidance had anticipated, have not come down the way we expected, and I want to address that directly. There are three factors driving higher than anticipated production costs. First, despite the above, we're not hoisting enough tons out of Goderich at the cost we had planned. S.

mines to improve operational uptime and stability, which has been guided by the implementation of a preventative maintenance system. Lastly, we've increased headcount to maximize every opportunity to produce more tons out of the mines. In terms of logistics, our total cost metric was burdened by global fuel costs and increased rates due to tightening of truck capacity. We have three accelerator teams working at Goderich focused on specific operational improvements.

We're working on improving our cut times and rates and investing in training required to sustain those improvements, as well as overall mine design and sequencing. Our maintenance program is delivering results focused on quicker turnarounds and improved equipment availability. Let me be direct about the trade-off that we're making. We're spending incremental dollars on labor and maintenance in the current period, costs for longer-term operational stability, production volumes, and profitability.

This is the right decision for the business, but it also means that our cost metrics have not yet reflected the efficiency gains we're targeting. In addition, we have other accelerator teams working on logistics and enterprise-wide improvements, including network optimization, procurement efficiency, and contract management. All of these are focused on sustainable cost improvement and risk mitigation. As we think about the future of the company and the sustainable improvement, we have made an operational leadership change.

Patrick Marin is no longer with the company, and I'd like to thank Pat for his service and wish him the best. Brandon Reisner has been promoted to Chief Operating Officer. He's led impressive operational improvements in our plant nutrition segment and in the operational leadership of our C&I product line. The combination of prior mining experience and a track record of leading positive outcomes make him a natural fit to lead our operations.

S. markets. We're seeing substantial price improvement year over year, in some cases well into the double digits. With consistent growth in demand tenders, North American highway de-icing markets remain structurally tight.

Inventories across the industry are low following the past winter, and it is supporting both pricing and tender sizes as we look forward into fiscal 2027. Let me give a sense of what we are thinking about volume. The 2025—26 winter season trended ahead of seasonal averages, with snowfall events in our key markets higher than the recent past. Strong demand, coupled with our disciplined approach to working capital and the current production constraints at Goderich, has left us and the industry with historically low inventories across the system.

Given those realities, along with an assumption of more normalized winter weather, we expect to commit to a reduced volume profile for fiscal 2027 relative to the past seasons. We will provide tighter guidance when we report fourth quarter results. The pricing gains we have secured for the business, combined with continued focus on production increases and cost-per-ton improvement, should position us to improve our per-unit margins headed into next year. Let me address tariffs briefly.

As you are aware, tariffs on Canadian goods shipped into the United States are set to take effect on August 19. A large majority of the gross annualized exposure relates to the highway de-icing salt shipped from our Goderich mine into the United States. Through proactive measures within our commercial agreements, including pass-through provisions that are now standard in several of our key contracts, we believe we meaningfully reduce our exposure to those risks. The situation remains fluid, and we're closely monitoring it.

We believe that we're in a stronger position to manage this than a year ago given our proactive measures, constructive pricing environment, and our improved balance sheet. In addition to the potential impact of tariffs, we're closely monitoring the variability within the fuel market, which is incorporated into our 2026 guidance. We expect to provide a clearer understanding of the anticipated fuel impact and sensitivity within our detailed 2027 guidance when we report Q4, but we wanted to note our current focus on mitigation efforts moving into next year.

On capital projects, as part of our ongoing investment in the future of Goderich, we have been planning to construct a new mill. Given the complexity of executing a project of this scale within an operating underground mine, we're taking additional time to evaluate the engineering, sequencing, and timing, as well as establishing appropriate project governance. We cannot afford disruption to production during a period where we're focused on improving output and rebuilding inventory. We expect to provide a more detailed update on the project timeline early next year.

I'd like to take a quick moment to clarify some news that was issued earlier in the quarter about a potential Utah lithium project. To be clear, we have no plans to get back into the lithium market. This announcement with EnergyX was a non-binding MOU where we're evaluating leasing them land and brine used in our Utah operations. We would have no capital commitment or operational expenses.

Nothing in these negotiations has been finalized. 3 times a year ago. Total net debt is down 13% year over year. A recent credit upgrade from S&P is a direct reflection of the work we've done to reduce debt and strengthen the business.

I know there are questions about how we plan to allocate capital going forward, and I want to signal how we're thinking about it. Our near-term priorities are clear: investment in our assets and continued debt reduction where it makes sense. As our balance sheet strengthens and our operations stabilize, the opportunity to consider other uses of capital becomes more real. The Board is engaged in this discussion.

We expect to share more on this topic when we report full-year results. Before I hand it over to Peter, let me step back for a moment. Two years ago we laid out a back-to-basics framework on how we're going to improve this company. At Ogden, the process is delivering; the results speak for themselves.

In salt, commercial execution is strong. The market is constructive. The balance sheet is in a very different position than it was even a year ago. The work in our mining operations is taking longer than planned, and we are being direct about that.

But the process is the same. The team is engaged. The work will continue. We are really excited about the future of this business and the organic opportunities this work has created.

Peter Fjellman, Chief Financial Officer Thanks, Ed. Good morning, everyone. I'll walk through our third quarter results and the updated outlook. All comparisons are to the prior year quarter unless otherwise noted.

9 million compared with $41 million in the prior year. 7 million compared to a net loss of $17 million in the prior year. 9 million. Segment pricing was up 9% overall and highway pricing was up 8% and C&I pricing was up 6%.

Highway sales volumes declined 6% while C&I volumes increased 3%. 2 million. The decline reflects lower highway sales volumes and higher per-unit production and distribution costs within the segment, partially offset by the pricing gains. 6 million for the quarter, down 16% compared to the prior year period.

The decrease is primarily driven by a 19% decrease in sales volumes attributable to the Windward SOP asset sale in March 2026, partially offset by a 4% increase in average sales prices. Excluding the impacts of the Windward, sales volumes increased approximately 4% year over year. 2 million a year ago. 4 million.

Both product costs and distribution costs declined on a per-unit basis year over year, driving the margin expansion at Ogden that Ed described earlier. 6 million in the prior year period. 8 million in the prior year, reflecting planned investments across our operations. 3 million a year ago.

6 million year over year. 8 million of availability under our revolving credit facility. 3 times a year ago. Now let me walk you through our updated fiscal 2026 outlook.

We are raising our full-year consolidated adjusted EBITDA guidance midpoint to $230 million, with a range of $218 million to $242 million. In Plant Nutrition, we're raising segment adjusted EBITDA guidance to a range of $49 million to $57 million, up from $43 million to $47 million previously, primarily reflecting the continued strength in our pricing and cost performance at Ogden. In Salt, our current adjusted EBITDA guidance range is $225 million to $236 million, narrowed from $225 million to $240 million previously to reflect the mixed dynamics, inflationary pressures, and the pace of operational improvements that Ed previously discussed.

Our expectations for corporate and other costs remain unchanged in the range of $51 million to $56 million for the full year, along with full-year capital expenditures in the range of $90 million to $110 million. In closing, I'd like to note that we are in a stronger financial position and Plant Nutrition is outperforming our expectations. Salt pricing and demand remain very constructive, and we are laser-focused on converting operational work at Goderich into sustainable cost improvement across the platform. We are also continuing to deploy capital with discipline, including reducing leverage where it makes sense.

That concludes our prepared remarks. Operator, we're ready to take some questions. OPERATOR Thank you. We will now begin the question-and-answer session.

If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one. Again, we ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device.

Your first question comes from the line of Joel Jackson with BMO Capital Markets. Your line is open. Please go ahead. A gentle reminder to unmute locally.

Joel Jackson, Analyst at BMO Capital Markets Sorry, I was muted. Thanks for taking my question. Just thinking about your guidance around bid season early in '27 here, we think about how well this season is going. Rock salt bid season is going here.

Does that imply, when you think about your entire business, maybe high-single-digit price growth next year, maybe mid to high? It seems like you're saying that volumes might be a little bit lower if you get normalized weather—what you're actually going to sell. And then what are costs looking like in '27? Like, should we see costs up a little?

It's really speaking about more, you know, netback expansions here when you think about price versus cost things. Edward Dowling, President and CEO Good morning, Joel. Nice to hear your voice when you're unmuted. Appreciate the question.

You know, the bid season has been really great, really based on the previous winter and really the inventory management discipline that has been established in the market. Most of the bids, of course, are transparent, and we see a wide range of outcomes depending on where you are. Our focus has really been to dive in and try to serve those markets where we maximize our margin and not try to serve everything everywhere, albeit we do try to spread it out just because you never know exactly where winter is going to be.