Compass Minerals Reports $23.6 Million Net Loss, Improved Performance Compared to Last Year

Compass Minerals International Inc. reported a net loss of $23.6 million for the three months ended December 31, 2024, a significant improvement compared to a net loss of $75.3 million in the same period last year. The company's total sales decreased by 10% to $307.2 million, down from $341.7 million in the prior year, primarily due to lower sales volumes in its Salt segment. The gross profit for the quarter was $34.3 million, reflecting a 52% decline from $71.1 million a year earlier, with gross margins dropping to 11% from 21%. The diluted net loss per share improved to $0.57 from $1.83 in the previous year.

The financial performance was impacted by a 12% decrease in Salt segment sales, which fell to $1.99 billion, primarily due to lower deicing sales volumes. This decline was partially offset by a slight increase in average sales prices for consumer and industrial salt products. The Plant Nutrition segment, however, saw a 24% increase in sales, driven by a substantial rise in sales volumes, although this was tempered by lower average selling prices. Overall, the company’s operating earnings improved to $0.5 million from an operating loss of $53.6 million in the prior year, largely due to the absence of a significant impairment charge related to lithium assets that had affected the previous year's results.

In terms of strategic developments, Compass Minerals completed the acquisition of Fortress North America, LLC in May 2023, which is focused on developing fire retardant products. The company is also facing challenges, including a product recall of food-grade salt due to contamination concerns, which has led to recognized costs of $0.9 million for the quarter. The company has recorded a liability of $35 million related to customer claims from this recall, with an expectation that these costs may be reimbursable by insurance.

Operationally, Compass Minerals reported a total of 41,504,100 shares outstanding as of February 5, 2025. The company’s cash and cash equivalents increased to $45.8 million from $20.2 million at the end of the previous quarter, while total assets rose to $1.72 billion from $1.64 billion. The company’s long-term debt stood at $965.7 million, up from $910 million, reflecting ongoing financing activities. The company has also amended its credit agreement to ease certain covenants, increasing the maximum allowed consolidated total net leverage ratio to 6.5x through September 2025.

Looking ahead, Compass Minerals anticipates a challenging fiscal year 2025, particularly in its Salt segment, where committed volumes for highway deicing products are down approximately 9% due to one of the weakest winters in recent history. However, the company expects Salt segment sales volumes to rebound by about 7% year-over-year, while Plant Nutrition sales volumes are projected to improve as well. The company plans to invest between $75 million and $85 million in capital expenditures during the fiscal year, focusing on sustaining its operations and enhancing efficiency.