Compass Minerals International, Inc. (CMP) Q1 2026 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call presents mixed signals. Positive aspects include improved leverage, positive net income, and increased revenue in the Salt segment. However, there are concerns about inventory management, production challenges, and increased logistics costs. The Q&A highlights uncertainties in salt supply and logistics costs, with management avoiding specifics on critical projects. The guidance suggests stable EBITDA despite volume declines, but market reactions may be muted due to these uncertainties. Without market cap data, a neutral stock price movement is predicted.
Key Financial Performance
Net Income Reported net income of $0.43 compared with a net loss of $0.57 a year ago. This marks the first positive quarterly net income since 2023.
Adjusted EBITDA Doubled to $65 million year-over-year. This increase is attributed to solid results in the Salt business and positive momentum in the Plant Nutrition segment, partially offset by the planned sale of the Wynyard SOP operation.
Salt Segment Revenue Revenue increased to $332 million compared to $242 million a year ago, driven by a 37% increase in total salt volumes and higher highway deicing and C&I sales prices of 6% and 2%, respectively.
Salt Segment Operating Earnings Improved year-over-year to $14.33 per ton, up $2.54 or 22%. Adjusted EBITDA per ton increased 2% to $19.61.
Salt Segment Product Cost per Ton Declined 7% to $50.20, while distribution cost per ton increased 6%.
Plant Nutrition Segment Operating Earnings Increased approximately $9 million year-over-year, while adjusted EBITDA improved by $8 million. This was driven by improvements in both pricing and cost structure, despite a decrease in sales tons year-over-year.
Average SOP Sales Price Increased 13% to $687 per ton year-over-year.
Plant Nutrition Product Cost per Ton Declined 2% to $520, while distribution cost per ton increased 2% to $93.
Corporate Overhead Decreased 24% year-over-year to $19 million for the quarter, reflecting momentum in cost control and process optimization initiatives.
Leverage Ratio Improved significantly to 3.6x from 5.3x in the comparable prior period, reflecting progress in deleveraging.
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Operating Highlights
Wynyard SOP operation sale: The company announced the sale of its Wynyard SOP operation in Canada for $30.8 million, allowing a focus on being a leading North American SOP producer.
Salt business: Steady winter weather in North America led to increased sales volumes and price hikes in highway deicing and C&I segments. However, the company is managing inventories cautiously to align with market demand.
Goderich mine development: The mine is undergoing high development with new mining panels being constructed, which temporarily increases costs and limits production rates. Improvements are expected in the long term.
Ogden pond complex: Restoration of the pond complex at Ogden has improved feedstock quality, reduced costs, and enhanced operational efficiency. A capital project to upgrade the dryer compaction plant is planned to further boost efficiency.
Back-to-basics framework: The company is focusing on operational efficiencies, disciplined resource deployment, simplifying processes, maximizing cash flow, and reducing leverage to improve financial resilience and flexibility.
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Risk or Challenges
Salt Business Inventory Management: The company has limited ability to meet excessive in-season demand due to its inventory management strategy, which aligns closely with anticipated market demand. This could preclude the ability to capitalize on above-average winters.
Goderich Mine Production Challenges: The mine is undergoing high development, including constructing new underground infrastructure, which results in higher costs and lower production rates. Additionally, unplanned downtime and inefficiencies are creating headwinds for production costs and limiting the ability to service incremental demand.
Salt Distribution Costs: Severe winters create suboptimal logistical conditions, leading to increased distribution costs.
Plant Nutrition Sales Volume: Anticipated decrease in sales volume due to prioritizing domestic business over lower-margin export opportunities.
Wynyard SOP Operation Sale: The planned sale of the Wynyard SOP operation could impact the company's ability to meet certain market demands, despite improvements in other areas.
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Guidance & Outlook
Full Year Adjusted EBITDA Guidance: Raised the midpoint of the full year adjusted EBITDA guidance range to $224 million, reflecting solid results in the Salt business and positive momentum in the Plant Nutrition segment, partially offset by the planned sale of the Wynyard SOP operation.
Salt Segment Adjusted EBITDA Guidance: Updated range for Salt segment adjusted EBITDA in 2026 is $230 million to $252 million. Guidance reflects an increase in expected sales tons, muted by headwinds in production costs and logistical challenges during severe winters. Adjusted EBITDA margin is expected to increase by approximately 200 basis points year-over-year.
Plant Nutrition Segment Adjusted EBITDA Guidance: Updated range for adjusted EBITDA in 2026 is $34 million to $39 million, reflecting stronger margins and an improved cost structure, partially offset by lower expected sales volume and the impact of the Wynyard sale. Adjusted EBITDA margin is expected to improve by more than 300 basis points year-over-year.
Capital Expenditures: The range for capital expenditures remains unchanged for 2026.
Salt Business Outlook: Plans to allow for more flexible operations in the future, with ongoing work to improve inventory management and production capabilities. Current production at Goderich mine is limited due to development of new mining panels, but improvements are expected to enhance operational flexibility over time.
Plant Nutrition Business Outlook: Momentum continues with improvements in the Ogden operation, leading to lower product costs and better operational efficiency. A capital project to upgrade the dryer compaction plant at Ogden is expected to further boost efficiency and financial performance.
Leverage and Financial Health: Leverage ratio improved to 3.6x from 5.3x year-over-year. Continued focus on deleveraging and improving financial resilience, with plans to discuss capital allocation approaches with the Board.
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Shareholder Return Plan
The selected topic was not discussed during the call.
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Key Q&A
Q:Is the salt market well supplied for the strong winter, and does Compass have any excess tons to sell?
A:The market is tight due to the strong winter. Imports and opportunistic supply mid-season are difficult due to lead times. If the winter continues as it has, the market will remain tight.
Q:How are the plans progressing for the new mill at Goderich, and has the strong winter influenced the decision to invest?
A:There are three projects: the East Mine Drive (ongoing for years), the 3B108 project (just starting), and the new mill (in engineering and value engineering stage). Updates will be provided in the coming quarters.
Q:What is driving up logistics costs in the Salt segment, and will this improve as the winter progresses?
A:Logistics costs increased due to inflationary pressures and shipping salt across a wider network to meet demand. This is expected to normalize as the production-to-development ratio improves.
Q:Did salt shortages in metropolitan areas impact margins or logistics?
A:Salt shortages led to shipping from further locations to meet commitments, impacting logistics costs. Deicing inventories are low, which is constructive for future planning.
Q:What is the outlook for tax rates and cash tax for the year, considering the Ontario mining tax settlement?
A:The Ontario mining tax settlement had an impact on the balance sheet and cash flow. Effective tax rates are influenced by income in Canada and losses in the U.S. The full-year outlook is still uncertain.
Q:Review of Unclear Management Responses
A:Management avoided providing specific timelines or financial details for the new mill at Goderich and the full-year tax outlook, citing early stages and uncertainty.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
Compass Minerals
Goderich mine
SOP operation
ability demand
ability end
approach
balance sheet
basic framework
capability
capital allocation
condition
demand inventory
demand season
development panel
factor
health
improvement leverage
income
industry
issue
leverage profile
market demand
market value
momentum
optionality
panel production
pond complex
production level
rate
resiliency
salt
start
supply chain
CMP Transcript
Compass Minerals International, Inc. (CMP) Q1 2026 Earnings Call Transcript
Unknown2-5
The earnings call presents mixed signals. Positive aspects include improved leverage, positive net income, and increased revenue in the Salt segment. However, there are concerns about inventory management, production challenges, and increased logistics costs. The Q&A highlights uncertainties in salt supply and logistics costs, with management avoiding specifics on critical projects. The guidance suggests stable EBITDA despite volume declines, but market reactions may be muted due to these uncertainties. Without market cap data, a neutral stock price movement is predicted.
Compass Minerals International, Inc. (CMP) Q4 2025 Earnings Call Transcript
Unknown12-9
The earnings call presents mixed signals. While there are positives like improved financial performance, net debt reduction, and increased revenues in some segments, there are also concerns like price declines in Plant Nutrition and potential volume declines in highway deicing. The Q&A reveals some uncertainty regarding volume forecasts and inventory management. Overall, the positive aspects are balanced by uncertainties and price declines, leading to a neutral sentiment.
Compass Minerals International, Inc. (CMP) Q3 2025 Earnings Call Transcript
Unknown8-12
The earnings call presents mixed signals: improved financial metrics (e.g., revenue, EBITDA, and reduced net loss) are positive, yet high leverage and dependency on winter conditions pose risks. The Back-to-Basic strategy and inventory management are promising, but management's vague responses in the Q&A raise concerns. Adjusted EBITDA guidance increase suggests optimism. Without market cap data, a 'Neutral' rating reflects balanced positive and negative factors, predicting a stock price movement between -2% to 2%.
Compass Minerals International, Inc. (CMP) Q2 2025 Earnings Call Transcript
Unknown5-8
The earnings call presents mixed signals: strong revenue growth and reduced debt are positives, but the company faces challenges with increased production costs and competitive pressures. The Q&A reveals uncertainties, particularly regarding accounts receivable and future cash flow. Despite increased EBITDA guidance, the lack of specific data on bidding season commitments tempers optimism. Given these factors, the stock price reaction is likely to be neutral, with potential for slight volatility due to these mixed indicators.
CMP Slides
CMP Report
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They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
