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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Compass Minerals International Inc | NYSE:CMP | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
-0.06 | -0.48% | 12.47 | 12.70 | 12.40 | 12.46 | 11,484 | 14:46:19 |
|
Delaware
|
36-3972986
|
(State or other jurisdiction of
incorporation or organization)
|
(I.R.S. Employer
Identification Number)
|
Large accelerated filer
þ
|
Accelerated filer
¨
|
Non-accelerated filer
¨
|
Smaller reporting company
¨
|
|
|
|
Page
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PART I. FINANCIAL INFORMATION
|
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Item 1.
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Item 2.
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Item 3.
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Item 4.
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PART II. OTHER INFORMATION
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Item 1.
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Item 1A.
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Item 2.
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Item 3.
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Item 4.
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Item 5.
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Item 6.
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(Unaudited)
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||||
|
March 31,
2016 |
|
December 31,
2015 |
||||
ASSETS
|
|||||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
85.2
|
|
|
$
|
58.4
|
|
Receivables, less allowance for doubtful accounts of $1.6
in 2016 and $1.3 in 2015
|
134.8
|
|
|
147.8
|
|
||
Inventories
|
211.1
|
|
|
275.3
|
|
||
Other
|
28.7
|
|
|
30.8
|
|
||
Total current assets
|
459.8
|
|
|
512.3
|
|
||
Property, plant and equipment, net
|
865.1
|
|
|
800.7
|
|
||
Intangible assets, net
|
88.3
|
|
|
85.3
|
|
||
Goodwill
|
61.8
|
|
|
58.1
|
|
||
Investment in equity investee
|
121.4
|
|
|
116.4
|
|
||
Other
|
55.5
|
|
|
52.0
|
|
||
Total assets
|
$
|
1,651.9
|
|
|
$
|
1,624.8
|
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|||||||
Current liabilities:
|
|
|
|
||||
Current portion of long-term debt
|
$
|
4.9
|
|
|
$
|
4.9
|
|
Accounts payable
|
48.7
|
|
|
80.7
|
|
||
Accrued expenses
|
54.2
|
|
|
48.9
|
|
||
Accrued salaries and wages
|
14.6
|
|
|
15.2
|
|
||
Income taxes payable
|
10.5
|
|
|
14.8
|
|
||
Accrued interest
|
3.2
|
|
|
6.3
|
|
||
Total current liabilities
|
136.1
|
|
|
170.8
|
|
||
Long-term debt, net of current portion
|
712.5
|
|
|
718.0
|
|
||
Deferred income taxes, net
|
73.7
|
|
|
71.3
|
|
||
Other noncurrent liabilities
|
27.4
|
|
|
25.0
|
|
||
Commitments and contingencies (Note 8)
|
|
|
|
|
|
||
Stockholders’ equity:
|
|
|
|
||||
Common stock: $0.01 par value, 200,000,000 authorized shares; 35,367,264 issued shares
|
0.4
|
|
|
0.4
|
|
||
Additional paid-in capital
|
93.2
|
|
|
91.7
|
|
||
Treasury stock, at cost — 1,584,884 shares at March 31, 2016, and 1,665,731 shares at December 31, 2015
|
(3.0
|
)
|
|
(3.2
|
)
|
||
Retained earnings
|
685.2
|
|
|
659.1
|
|
||
Accumulated other comprehensive loss
|
(73.6
|
)
|
|
(108.3
|
)
|
||
Total stockholders’ equity
|
702.2
|
|
|
639.7
|
|
||
Total liabilities and stockholders’ equity
|
$
|
1,651.9
|
|
|
$
|
1,624.8
|
|
|
Three Months Ended
March 31, |
||||||
|
2016
|
|
2015
|
||||
Sales
|
$
|
345.7
|
|
|
$
|
393.0
|
|
Shipping and handling cost
|
89.4
|
|
|
101.9
|
|
||
Product cost
|
153.7
|
|
|
177.9
|
|
||
Gross profit
|
102.6
|
|
|
113.2
|
|
||
Selling, general and administrative expenses
|
28.3
|
|
|
28.5
|
|
||
Operating earnings
|
74.3
|
|
|
84.7
|
|
||
|
|
|
|
||||
Other (income) expense:
|
|
|
|
||||
Interest expense
|
5.8
|
|
|
5.4
|
|
||
Earnings in equity investee
|
(0.4
|
)
|
|
—
|
|
||
Other, net
|
(0.8
|
)
|
|
(3.5
|
)
|
||
Earnings before income taxes
|
69.7
|
|
|
82.8
|
|
||
Income tax expense
|
20.0
|
|
|
22.2
|
|
||
Net earnings
|
$
|
49.7
|
|
|
$
|
60.6
|
|
|
|
|
|
||||
Basic net earnings per common share
|
$
|
1.47
|
|
|
$
|
1.79
|
|
Diluted net earnings per common share
|
$
|
1.46
|
|
|
$
|
1.79
|
|
|
|
|
|
||||
Weighted-average common shares outstanding (in thousands):
|
|
|
|
||||
Basic
|
33,746
|
|
|
33,626
|
|
||
Diluted
|
33,748
|
|
|
33,649
|
|
||
|
|
|
|
||||
Cash dividends per share
|
$
|
0.695
|
|
|
$
|
0.66
|
|
|
Three Months Ended
March 31, |
||||||
|
2016
|
|
2015
|
||||
Net earnings
|
$
|
49.7
|
|
|
$
|
60.6
|
|
Other comprehensive income (loss):
|
|
|
|
||||
Unrealized gain from change in pension obligations, net of tax of $(0.0) and $(0.1) in 2016 and 2015, respectively
|
0.1
|
|
|
0.3
|
|
||
Unrealized gain on cash flow hedges, net of tax of $(0.1) in both 2016 and 2015
|
0.2
|
|
|
—
|
|
||
Cumulative translation adjustment
|
34.4
|
|
|
(49.8
|
)
|
||
Comprehensive income
|
$
|
84.4
|
|
|
$
|
11.1
|
|
|
Common
Stock
|
|
Additional
Paid-In
Capital
|
|
Treasury
Stock
|
|
Retained
Earnings
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Total
|
||||||||||||
Balance, December 31, 2015
|
$
|
0.4
|
|
|
$
|
91.7
|
|
|
$
|
(3.2
|
)
|
|
$
|
659.1
|
|
|
$
|
(108.3
|
)
|
|
$
|
639.7
|
|
Comprehensive income
|
|
|
|
|
|
|
49.7
|
|
|
34.7
|
|
|
84.4
|
|
|||||||||
Dividends on common stock
|
|
|
0.1
|
|
|
|
|
(23.6
|
)
|
|
|
|
(23.5
|
)
|
|||||||||
Shares issued for stock units
|
|
|
(0.1
|
)
|
|
0.1
|
|
|
|
|
|
|
—
|
|
|||||||||
Income tax deficiency from equity awards
|
|
|
(0.1
|
)
|
|
|
|
|
|
|
|
(0.1
|
)
|
||||||||||
Stock options exercised
|
|
|
0.5
|
|
|
0.1
|
|
|
|
|
|
|
0.6
|
|
|||||||||
Stock-based compensation
|
|
|
1.1
|
|
|
|
|
|
|
|
|
1.1
|
|
||||||||||
Balance, March 31, 2016
|
$
|
0.4
|
|
|
$
|
93.2
|
|
|
$
|
(3.0
|
)
|
|
$
|
685.2
|
|
|
$
|
(73.6
|
)
|
|
$
|
702.2
|
|
|
Three Months Ended
March 31, |
||||||
|
2016
|
|
2015
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net earnings
|
$
|
49.7
|
|
|
$
|
60.6
|
|
Adjustments to reconcile net earnings to net cash flows provided by operating activities:
|
|
|
|
||||
Depreciation, depletion and amortization
|
19.9
|
|
|
19.1
|
|
||
Finance fee amortization
|
0.3
|
|
|
0.3
|
|
||
Stock-based compensation
|
1.1
|
|
|
1.6
|
|
||
Deferred income taxes
|
(1.1
|
)
|
|
4.5
|
|
||
Earnings in equity investee
|
(0.4
|
)
|
|
—
|
|
||
Other, net
|
(2.2
|
)
|
|
1.1
|
|
||
Changes in operating assets and liabilities, net of acquisition:
|
|
|
|
||||
Receivables
|
15.0
|
|
|
65.0
|
|
||
Inventories
|
66.7
|
|
|
42.4
|
|
||
Other assets
|
1.9
|
|
|
(3.1
|
)
|
||
Accounts payable and accrued expenses
|
(59.0
|
)
|
|
(70.0
|
)
|
||
Other liabilities
|
0.7
|
|
|
0.9
|
|
||
Net cash provided by operating activities
|
92.6
|
|
|
122.4
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Capital expenditures
|
(43.8
|
)
|
|
(41.7
|
)
|
||
Other, net
|
(0.7
|
)
|
|
—
|
|
||
Net cash used in investing activities
|
(44.5
|
)
|
|
(41.7
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Proceeds from revolving credit facility borrowings
|
31.0
|
|
|
—
|
|
||
Principal payments on revolving credit facility borrowings
|
(35.5
|
)
|
|
—
|
|
||
Principal payments on long-term debt
|
(1.2
|
)
|
|
(0.9
|
)
|
||
Dividends paid
|
(23.5
|
)
|
|
(22.4
|
)
|
||
Proceeds received from stock option exercises
|
0.6
|
|
|
2.1
|
|
||
Excess tax benefit (deficiency) from equity compensation awards
|
(0.1
|
)
|
|
0.1
|
|
||
Net cash used in financing activities
|
(28.7
|
)
|
|
(21.1
|
)
|
||
Effect of exchange rate changes on cash and cash equivalents
|
7.4
|
|
|
(12.6
|
)
|
||
Net change in cash and cash equivalents
|
26.8
|
|
|
47.0
|
|
||
Cash and cash equivalents, beginning of the year
|
58.4
|
|
|
266.8
|
|
||
Cash and cash equivalents, end of period
|
$
|
85.2
|
|
|
$
|
313.8
|
|
Supplemental cash flow information:
|
|
|
|
|
|
||
Interest paid, net of amounts capitalized
|
$
|
8.6
|
|
|
$
|
8.9
|
|
Income taxes paid, net of refunds
|
$
|
26.0
|
|
|
$
|
48.9
|
|
1.
|
Accounting Policies and Basis of Presentation:
|
2.
|
Equity Investment:
|
3.
|
Inventories:
|
|
March 31,
2016 |
|
December 31,
2015 |
||||
Finished goods
|
$
|
154.5
|
|
|
$
|
223.1
|
|
Raw materials and supplies
|
56.6
|
|
|
52.2
|
|
||
Total inventories
|
$
|
211.1
|
|
|
$
|
275.3
|
|
4.
|
Property, Plant and Equipment, Net:
|
|
March 31,
2016 |
|
December 31,
2015 |
||||
Land, buildings and structures and leasehold improvements
|
$
|
362.1
|
|
|
$
|
347.3
|
|
Machinery and equipment
|
730.3
|
|
|
701.5
|
|
||
Office furniture and equipment
|
26.2
|
|
|
25.4
|
|
||
Mineral interests
|
172.5
|
|
|
169.6
|
|
||
Construction in progress
|
234.1
|
|
|
191.5
|
|
||
|
1,525.2
|
|
|
1,435.3
|
|
||
Less accumulated depreciation and depletion
|
(660.1
|
)
|
|
(634.6
|
)
|
||
Property, plant and equipment, net
|
$
|
865.1
|
|
|
$
|
800.7
|
|
5.
|
Goodwill and Intangible Assets, Net:
|
Intangible asset
|
Estimated
Lives
|
Supply agreement
|
50 years
|
SOP production rights
|
25 years
|
Patents
|
10-20 years
|
Developed technology
|
5 years
|
Lease rights
|
25 years
|
Customer and distributor relationships
|
10 years
|
Trademarks
|
10 years
|
Noncompete agreements
|
5 years
|
Trade names
|
Indefinite
|
Water rights
|
Indefinite
|
6.
|
Income Taxes:
|
7.
|
Long-term Debt:
|
|
March 31,
2016 |
|
December 31,
2015 |
||||
Term Loan due May 2017
|
$
|
470.8
|
|
|
$
|
471.9
|
|
Revolving Credit Facility due August 2017
|
—
|
|
|
4.5
|
|
||
4.875% Senior Notes due July 2024
|
246.6
|
|
|
246.5
|
|
||
|
717.4
|
|
|
722.9
|
|
||
Less current portion
|
(4.9
|
)
|
|
(4.9
|
)
|
||
Long-term debt
|
$
|
712.5
|
|
|
$
|
718.0
|
|
8.
|
Commitments and Contingencies:
|
9.
|
Operating Segments:
|
|
Three Months Ended March 31, 2016
|
||||||||||||||
|
Salt
|
|
Plant
Nutrition
(a)
|
|
Corporate
and Other
(b)
|
|
Total
|
||||||||
Sales to external customers
|
$
|
292.1
|
|
|
$
|
51.1
|
|
|
$
|
2.5
|
|
|
$
|
345.7
|
|
Intersegment sales
|
—
|
|
|
0.2
|
|
|
(0.2
|
)
|
|
—
|
|
||||
Shipping and handling cost
|
83.0
|
|
|
6.4
|
|
|
—
|
|
|
89.4
|
|
||||
Operating earnings (loss)
|
82.7
|
|
|
5.3
|
|
|
(13.7
|
)
|
|
74.3
|
|
||||
Depreciation, depletion and amortization
|
10.7
|
|
|
7.9
|
|
|
1.3
|
|
|
19.9
|
|
||||
Total assets (as of end of period)
|
893.1
|
|
|
704.8
|
|
|
54.0
|
|
|
1,651.9
|
|
|
Three Months Ended March 31, 2015
|
||||||||||||||
|
Salt
|
|
Plant
Nutrition
|
|
Corporate
and Other
(b)
|
|
Total
|
||||||||
Sales to external customers
|
$
|
316.7
|
|
|
$
|
73.6
|
|
|
$
|
2.7
|
|
|
$
|
393.0
|
|
Intersegment sales
|
—
|
|
|
0.7
|
|
|
(0.7
|
)
|
|
—
|
|
||||
Shipping and handling cost
|
94.5
|
|
|
7.4
|
|
|
—
|
|
|
101.9
|
|
||||
Operating earnings (loss)
|
77.0
|
|
|
20.8
|
|
|
(13.1
|
)
|
|
84.7
|
|
||||
Depreciation, depletion and amortization
|
10.9
|
|
|
7.0
|
|
|
1.2
|
|
|
19.1
|
|
||||
Total assets (as of end of period)
|
949.6
|
|
|
543.3
|
|
|
53.8
|
|
|
1,546.7
|
|
(a)
|
Plant nutrition segment assets include the investment in Produquímica.
|
(b)
|
Corporate and Other includes corporate entities, records management operations and other incidental operations and eliminations. Operating earnings (loss) for corporate and other includes indirect corporate overhead including costs for general corporate governance and oversight, as well as costs for the human resources, information technology and finance functions.
|
10.
|
Stockholders’ Equity and Equity Instruments:
|
|
|
Stock Options
|
|
RSUs
|
|
PSUs
(a)
|
|||||||||||||||
|
|
Number
|
|
Weighted-average
exercise price
|
|
Number
|
|
Weighted-average
fair value
|
|
Number
|
|
Weighted-average
fair value
|
|||||||||
Outstanding at December 31, 2015
|
|
353,087
|
|
|
$
|
83.94
|
|
|
91,008
|
|
|
$
|
80.65
|
|
|
77,365
|
|
|
$
|
96.63
|
|
Granted
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Exercised
(b)
|
|
(9,382
|
)
|
|
60.31
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Released from restriction
(b)
|
|
—
|
|
|
—
|
|
|
(51,140
|
)
|
|
75.12
|
|
|
(9,922
|
)
|
|
77.75
|
|
|||
Cancelled/Expired
|
|
(9,204
|
)
|
|
87.40
|
|
|
(2,110
|
)
|
|
89.71
|
|
|
(8,949
|
)
|
|
88.03
|
|
|||
Outstanding at March 31, 2016
|
|
334,501
|
|
|
$
|
84.50
|
|
|
37,758
|
|
|
$
|
87.64
|
|
|
58,494
|
|
|
$
|
101.15
|
|
(a)
|
Until they vest, PSUs are included in the table at the target level at their grant date and at that level represent
one
share per unit. The final performance period for the 2013 PSU grant was completed in 2015. The Company issued
9,922
shares and cancelled
5,263
PSUs in the first quarter of 2016 related to the 2013 PSU grant.
|
(b)
|
Common stock issued for exercised options and RSUs and PSUs released from restriction was issued from treasury stock.
|
Three Months Ended March 31, 2016
(a)
|
Gains and
(Losses) on
Cash Flow
Hedges
|
|
Defined
Benefit
Pension
|
|
Foreign
Currency
|
|
Total
|
||||||||
Beginning balance
|
$
|
(1.6
|
)
|
|
$
|
(3.8
|
)
|
|
$
|
(102.9
|
)
|
|
$
|
(108.3
|
)
|
Other comprehensive income (loss) before reclassifications
(b)
|
(0.5
|
)
|
|
—
|
|
|
34.4
|
|
|
33.9
|
|
||||
Amounts reclassified from accumulated other comprehensive loss
|
0.7
|
|
|
0.1
|
|
|
—
|
|
|
0.8
|
|
||||
Net current period other comprehensive income (loss)
|
0.2
|
|
|
0.1
|
|
|
34.4
|
|
|
34.7
|
|
||||
Ending balance
|
$
|
(1.4
|
)
|
|
$
|
(3.7
|
)
|
|
$
|
(68.5
|
)
|
|
$
|
(73.6
|
)
|
Three Months Ended March 31, 2015
(a)
|
Gains and
(Losses) on
Cash Flow
Hedges
|
|
Defined
Benefit
Pension
|
|
Foreign
Currency
|
|
Total
|
||||||||
Beginning balance
|
$
|
(2.0
|
)
|
|
$
|
(9.0
|
)
|
|
$
|
(4.5
|
)
|
|
$
|
(15.5
|
)
|
Other comprehensive income (loss) before reclassifications
(b)
|
(0.7
|
)
|
|
—
|
|
|
(49.8
|
)
|
|
(50.5
|
)
|
||||
Amounts reclassified from accumulated other comprehensive loss
|
0.7
|
|
|
0.3
|
|
|
—
|
|
|
1.0
|
|
||||
Net current period other comprehensive income (loss)
|
—
|
|
|
0.3
|
|
|
(49.8
|
)
|
|
(49.5
|
)
|
||||
Ending balance
|
$
|
(2.0
|
)
|
|
$
|
(8.7
|
)
|
|
$
|
(54.3
|
)
|
|
$
|
(65.0
|
)
|
(a)
|
With the exception of the cumulative foreign currency translation adjustment, for which no tax effect is recorded, the changes in the components of accumulated other comprehensive gain (loss) presented in the table above are reflected net of applicable income taxes.
|
(b)
|
The Company recorded foreign exchange (gains) losses of
$(21.8) million
and
$17.3 million
in the three months ended
March 31, 2016
, and March 31, 2015, respectively, in accumulated other comprehensive income (loss) related to intercompany notes which were deemed to be of long-term investment nature.
|
|
Amount Reclassified from AOCI
|
|
|
||||||
|
Three Months Ended
March 31, 2016 |
|
Three Months Ended March 31, 2015
|
|
Line Item Impacted in the
Consolidated Statement of Operations
|
||||
Gains and (losses) on cash flow hedges:
|
|
|
|
|
|
||||
Natural gas instruments
|
$
|
1.1
|
|
|
$
|
1.1
|
|
|
Product cost
|
|
(0.4
|
)
|
|
(0.4
|
)
|
|
Income tax expense (benefit)
|
||
Reclassifications, net of income taxes
|
0.7
|
|
|
0.7
|
|
|
|
||
Amortization of defined benefit pension:
|
|
|
|
|
|
|
|||
Amortization of loss
|
$
|
0.1
|
|
|
$
|
0.4
|
|
|
Product cost
|
|
—
|
|
|
(0.1
|
)
|
|
Income tax expense (benefit)
|
||
Reclassifications, net of income taxes
|
0.1
|
|
|
0.3
|
|
|
|
||
Total reclassifications, net of income taxes
|
$
|
0.8
|
|
|
$
|
1.0
|
|
|
|
11.
|
Derivative Financial Instruments:
|
|
Asset Derivatives
|
|
Liability Derivatives
|
||||||||
Derivatives designated as hedging instruments
(a)
|
Balance Sheet
Location
|
|
March 31,
2016 |
|
Balance Sheet
Location
|
|
March 31,
2016 |
||||
Commodity contracts
|
Other current assets
|
|
$
|
0.1
|
|
|
Accrued expenses
|
|
$
|
2.2
|
|
Commodity contracts
|
Other assets
|
|
—
|
|
|
Other noncurrent liabilities
|
|
0.2
|
|
||
Total derivatives designated as hedging instruments
|
|
|
$
|
0.1
|
|
|
|
|
$
|
2.4
|
|
(a)
|
As of
March 31, 2016
, the Company had commodity hedge agreements with
two
counterparties. Amounts recorded as liabilities for the Company’s commodity contracts were payable to both counterparties. The Company has master netting agreements with its counterparties and accordingly has netted in its consolidated balance sheets
$0.1 million
that were in receivable positions against its contracts in payable positions.
|
|
Asset Derivatives
|
|
Liability Derivatives
|
||||||||
Derivatives designated as hedging instruments
(a)
|
Balance Sheet
Location
|
|
December 31,
2015 |
|
Balance Sheet
Location
|
|
December 31,
2015 |
||||
Commodity contracts
|
Other current assets
|
|
$
|
0.1
|
|
|
Accrued expenses
|
|
$
|
2.6
|
|
Commodity contracts
|
Other assets
|
|
—
|
|
|
Other noncurrent liabilities
|
|
0.1
|
|
||
Total derivatives designated as hedging instruments
|
|
|
$
|
0.1
|
|
|
|
|
$
|
2.7
|
|
(a)
|
As of December 31, 2015, the Company had commodity hedge agreements with
two
counterparties. Amounts recorded as liabilities for the Company’s commodity contracts were payable to both counterparties. The Company has master netting agreements with its counterparties and accordingly has netted in its consolidated balance sheets
$0.1 million
that were in receivable position against its contracts in payable positions.
|
12.
|
Fair Value Measurements:
|
|
March 31,
2016 |
|
Level One
|
|
Level Two
|
|
Level Three
|
||||||||
Asset Class:
|
|
|
|
|
|
|
|
||||||||
Mutual fund investments in a non-qualified retirement plan
(a)
|
$
|
1.6
|
|
|
$
|
1.6
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Total Assets
|
$
|
1.6
|
|
|
$
|
1.6
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Liability Class:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Liabilities related to non-qualified retirement plan
|
$
|
(1.6
|
)
|
|
$
|
(1.6
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Derivatives – natural gas instruments, net
|
(2.3
|
)
|
|
—
|
|
|
(2.3
|
)
|
|
—
|
|
||||
Total Liabilities
|
$
|
(3.9
|
)
|
|
$
|
(1.6
|
)
|
|
$
|
(2.3
|
)
|
|
$
|
—
|
|
(a)
|
Includes mutual fund investments of approximately
20%
in the common stock of large-cap U.S. companies, approximately
10%
in the common stock of small to mid-cap U.S. companies, approximately
5%
in international companies, approximately
10%
in bond funds, approximately
20%
in short-term investments and approximately
35%
in blended funds.
|
|
December 31,
2015 |
|
Level One
|
|
Level Two
|
|
Level Three
|
||||||||
Asset Class:
|
|
|
|
|
|
|
|
||||||||
Mutual fund investments in a non-qualified retirement plan
(a)
|
$
|
1.6
|
|
|
$
|
1.6
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Total Assets
|
$
|
1.6
|
|
|
$
|
1.6
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Liability Class:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Liabilities related to non-qualified retirement plan
|
$
|
(1.6
|
)
|
|
$
|
(1.6
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Derivatives – natural gas instruments, net
|
(2.6
|
)
|
|
—
|
|
|
(2.6
|
)
|
|
—
|
|
||||
Total Liabilities
|
$
|
(4.2
|
)
|
|
$
|
(1.6
|
)
|
|
$
|
(2.6
|
)
|
|
$
|
—
|
|
(a)
|
Includes mutual fund investments of approximately
20%
in the common stock of large-cap U.S. companies, approximately
5%
in the common stock of small to mid-cap U.S. companies, approximately
5%
in the common stock of international companies, approximately
5%
in bond funds, approximately
35%
in short-term investments and approximately
30%
in blended funds.
|
13.
|
Earnings per Share:
|
|
Three months ended
March 31, |
||||||
|
2016
|
|
2015
|
||||
Numerator:
|
|
|
|
||||
Net earnings
|
$
|
49.7
|
|
|
$
|
60.6
|
|
Less: net earnings allocated to participating securities
(a)
|
(0.2
|
)
|
|
(0.3
|
)
|
||
Net earnings available to common shareholders
|
$
|
49.5
|
|
|
$
|
60.3
|
|
|
|
|
|
||||
Denominator (in thousands):
|
|
|
|
|
|
||
Weighted-average common shares outstanding, shares for basic earnings per share
|
33,746
|
|
|
33,626
|
|
||
Weighted-average awards outstanding
(b)
|
2
|
|
|
23
|
|
||
Shares for diluted earnings per share
|
33,748
|
|
|
33,649
|
|
||
Net earnings per common share, basic
|
$
|
1.47
|
|
|
$
|
1.79
|
|
Net earnings per common share, diluted
|
$
|
1.46
|
|
|
$
|
1.79
|
|
(a)
|
Participating securities include options, PSUs and RSUs that receive non-forfeitable dividends. Weighted participating securities included
143,000
and
216,000
for the
three
months ended
March 31, 2016
, and
March 31, 2015
, respectively.
|
(b)
|
For the calculation of diluted earnings per share, the Company uses the more dilutive of either the treasury stock method or the two-class method to determine the weighted average number of outstanding common shares. In addition, the Company had
400,000
and
343,000
weighted-awards outstanding for the
three
months ended
March 31, 2016
, and
March 31, 2015
, respectively, which were anti-dilutive and therefore not included in the diluted earnings per-share calculation.
|
|
|
•
|
Sales decreased 12% to $345.7 million.
|
•
|
Operating earnings decreased 12% to $74.3 million.
|
•
|
Salt segment operating earnings increased 7%, partially offsetting a 75% decline in plant nutrition operating earnings.
|
•
|
Restructuring plan is underway to reduce costs and streamline structure.
|
•
|
Adjusted earnings before interest, income taxes, depreciation and amortization (“EBITDA”)* decreased 9% to $94.6 million.
|
•
|
Diluted earnings per share decreased 18% to $1.46.
|
•
|
Salt gross profit increased by approximately $5 million.
|
•
|
The increase in salt gross profit was due primarily to lower sales of purchased salt and lower logistics costs.
|
•
|
Salt gross profit in the first quarter of 2015 was unfavorably impacted by unplanned downtime at our North American mines and the cost of purchased salt to supplement production.
|
•
|
The increase in salt gross profit was partially offset by lower salt average selling price and lower salt sales volumes in the first quarter of 2016.
|
•
|
Lower gross profit for the plant nutrition segment contributed approximately $15 million to the decrease in gross profit.
|
•
|
The decrease in plant nutrition gross profit was primarily due to lower plant nutrition average sales prices and lower plant nutrition sales volumes.
|
•
|
In addition, an increase in per-unit production costs contributed to the decline in plant nutrition gross profit.
|
•
|
The decrease in plant nutrition segment gross profit was partially offset by a $1.9 million gain from the disposition of property at our Ogden, Utah facility.
|
•
|
The decrease in expense was due to a $1.2 million decrease in professional services expenses, primarily in corporate, and lower total corporate salaries expense.
|
•
|
The decrease was partially offset by $1.7 million of plant nutrition and corporate severance costs related to the restructuring of our business.
|
•
|
The increase was primarily due to the $100 million term loan used to fund the acquisition of our 35% equity interest in Produquímica Indústria e Comércio S.A., a Brazilian corporation (“Produquímica”), in December 2015.
|
•
|
We recognized earnings of $0.4 million related to our share of Produquimica’s net earnings from the date of acquisition through December 31, 2016.
|
•
|
The decrease was primarily the result of lower foreign exchange gains.
|
•
|
The decrease in income tax expense was primarily due to lower pre-tax income.
|
•
|
Our income tax provision in both periods differs from the U.S. statutory rate primarily due to U.S. statutory depletion, domestic manufacturing deductions, state income taxes, foreign income, mining and withholding taxes and interest expense recognition differences for tax and financial reporting purposes. Our effective tax rate increased from 27% in the first quarter of 2015 to 29% in the first quarter of 2016.
|
|
•
|
Because of mild winter weather in the first quarter or 2016, we expect that bid volumes for the upcoming highway deicing season will be reduced from 2015 levels. We expect full-year salt sales volumes to range from 11 million tons to 11.8 million tons.
|
•
|
We believe that the plant nutrition outlook continues to be negatively impacted by the overall weakness in the agriculture market, as well as increased imports of SOP driven largely by the current strength of the U.S. dollar.
|
•
|
We believe that our annual 2016 plant nutrition selling prices will be negatively impacted in some geographies as we look to drive SOP sales volumes up to more normal levels.
|
•
|
We expect annual 2016 plant nutrition sales volumes to surpass annual 2015 sales volumes.
|
•
|
We expect to benefit from improved plant nutrition production costs in the second half of 2016 after we sell through higher-cost, KCl-based inventory from 2015.
|
•
|
In February 2016, we announced steps to align our inventories with market demand and we are undergoing a thorough review of our cost structure. This effort resulted in a restructuring charge in the first quarter of 2016 of $3.2 million, or $0.06 per diluted share, related to a workforce reduction of approximately 150 positions. A significant portion of this total results from our investment in continuous mining at our Goderich, Ontario location. We expect the majority of the workforce reduction to be completed by the end of 2016. We expect ongoing annualized savings of approximately $15 million beginning in 2018.
|
|
•
|
Salt sales were $292.1 million, a decrease of 8%, primarily due to lower average salt selling prices and mild winter weather in the first quarter of 2016.
|
•
|
Salt average selling price decreased 5%.
|
•
|
Salt volumes were down 3%.
|
•
|
Salt sales volumes declined 148,000 tons, or 3%, due to lower highway and consumer deicing sales volumes as a result of milder winter weather experienced in the first quarter of 2016 in the U.K. when compared to the same period in the prior year.
|
•
|
Salt sales volumes in North America were favorably impacted by increased highway deicing commitment volumes resulting from the prior bid season.
|
•
|
A decrease of 5% in salt average selling prices contributed approximately $16 million to the decline in salt product sales, and included the unfavorable foreign currency exchange rates.
|
•
|
Favorable logistics costs partially offset the decline in salt product sales.
|
•
|
Plant nutrition sales were $51.1 million, a decrease of 31%.
|
•
|
Plant nutrition sales volumes decreased by 24%.
|
•
|
Plant nutrition average selling price decreased by 9%.
|
•
|
Plant nutrition sales volumes declined 23,000 tons, or 24%, and contributed approximately $15 million to the decrease in plant nutrition product sales due to weak demand in the agriculture market.
|
•
|
The 9% decrease in plant nutrition average selling price contributed approximately $7 million to the decrease in plant nutrition product sales.
|
|
Three Months Ended
March 31, |
||||||
|
2016
|
|
2015
|
||||
Net earnings
|
$
|
49.7
|
|
|
$
|
60.6
|
|
Interest expense
|
5.8
|
|
|
5.4
|
|
||
Income tax expense
|
20.0
|
|
|
22.2
|
|
||
Depreciation, depletion and amortization
|
19.9
|
|
|
19.1
|
|
||
EBITDA
|
95.4
|
|
|
107.3
|
|
||
Adjustments to EBITDA:
|
|
|
|
|
|
||
Other income, net
|
(0.8
|
)
|
|
(3.5
|
)
|
||
Adjusted EBITDA
|
$
|
94.6
|
|
|
$
|
103.8
|
|
|
Item 1.
|
Legal Proceedings
|
Item 1A.
|
Risk Factors
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
Item 3.
|
Defaults Upon Senior Securities
|
Item 4.
|
Mine Safety Disclosures
|
Item 5.
|
Other Information
|
Item 6.
|
Exhibits
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
|
|
|
|
|
Date: April 26, 2016
|
By:
|
/s/ MATTHEW J. FOULSTON
|
|
|
|
Matthew J. Foulston
|
|
|
|
Chief Financial Officer
|
|
|
|
(Principal Financial and Accounting Officer)
|
|
Exhibit
No.
|
|
Description of Exhibit
|
|
|
|
10.1
|
|
Separation Letter Agreement, dated February 4, 2016, and Final Waiver and Release Claims, dated February 17, 2016, between the Company and Keith Espelien (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed February 23, 2016).
|
31.1*
|
|
Section 302 Certifications of Francis J. Malecha, President and Chief Executive Officer.
|
31.2*
|
|
Section 302 Certifications of Matthew J. Foulston, Chief Financial Officer.
|
32**
|
|
Certification Pursuant to 18 U.S.C. §1350 of Francis J. Malecha, President and Chief Executive Officer, and Matthew J. Foulston, Chief Financial Officer.
|
95*
|
|
Mine Safety Disclosures.
|
101**
|
|
The following financial statements from the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2016, formatted in Extensive Business Reporting Language (XBRL): (i) consolidated balance sheets, (ii) consolidated statements of operations, (iii) consolidated statements of comprehensive income, (iv) consolidated statement of stockholders’ equity, (v) consolidated statements of cash flows, and (vi) the notes to the consolidated financial statements.
|
*
|
Filed herewith
|
**
|
Furnished herewith
|
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