Exhibit 99.1
[COMPASS MINERALS LOGO]
NEWS RELEASE
CONTACTS:
Rodney L. Underdown (913-344-9395) Peggy Landon (913-344-9315)
Vice President and Chief Financial Officer Director of Investor Relations
COMPASS MINERALS INTERNATIONAL, INC.
POSTS RECORD SALES AND EARNINGS IN FIRST QUARTER 2004
OVERLAND PARK, Kan. (May 4, 2004) - Compass Minerals International, Inc.
(NYSE: CMP), a leading producer and marketer of salt and specialty potash,
reported the following results today:
- - First-quarter 2004 net income available for common stock increased 22
percent over the prior year to $30.3 million, or $0.94 per diluted share.
- - First-quarter sales increased 18 percent over the prior year to $250.5
million. Sales include revenues from the sale of products, or "product
sales," as well as pass-through shipping and handling fees charged to
customers to reimburse the company for costs incurred on the customers'
behalf. First-quarter product sales also increased 18 percent to $176.1
million.
- - The company repaid the entire $14 million outstanding on its revolving
credit facility in the first quarter and made a $10 million voluntary
principal repayment on its term loan.
FINANCIAL RESULTS
(IN MILLIONS EXCEPT FOR EPS)
1Q 2004 1Q 2003
------- -------
Gross sales $ 250.5 $ 212.7
Gross sales less shipping and handling (product sales) 176.1 148.6
Net income available for common stock 30.3 24.9
Fully diluted EPS 0.94 0.68
EBITDA 67.6 51.6
Adjusted EBITDA 68.1 51.3
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Compass Minerals International
First-Quarter 2004 Earnings
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The company's 18 percent year-over-year sales increase for the first
quarter includes a $19.6 million increase in salt product sales that was driven
by more-normal winter weather in the United Kingdom when compared to the prior
year, sales resulting from the higher commitment volumes of North American
highway-deicing customers and brisk consumer deicing product sales on the East
Coast. Salt product sales also increased due to the strengthening of both the
Canadian dollar and the British pound against the U.S. dollar.
Specialty potash fertilizer product sales grew 77 percent, or $7.9
million, over the previous year as a result of market-share increases that were
propelled by the company's December 2003 acquisition of IMC Global, Inc.'s
sulfate of potash marketing business.
SALES VOLUMES
(IN THOUSANDS OF TONS)
1Q 2004 1Q 2003
------- -------
Highway Deicing ....................................................... 4,679 4,378
General Trade ......................................................... 785 732
Specialty potash fertilizers (SOP) .................................... 101 58
These sales increases, together with a reduction in production and
distribution costs, produced a 36 percent year-over-year improvement in gross
profit.
"I'm very pleased to report that we achieved the highest quarterly sales
and earnings in the company's history this quarter," said Michael E. Ducey,
president and CEO of Compass Minerals International. "Winter weather boosted our
consumer deicing sales, but weather was nearly typical in our North American and
U.K. highway deicing markets. The true growth came from the sustainable
expansion of our SOP and North American highway deicing businesses. I believe
that these results, along with our $87 million reduction in debt net of cash
this quarter, clearly demonstrate how Compass Minerals executes on its operating
principles to create wealth for its shareholders."
Selling, general and administrative expenses also increased by $2.8
million, or 24 percent, year-over-year in concert with the higher sales,
reflecting increased variable compensation and benefit costs, the impact of the
weakened U.S. dollar and other variable costs.
Interest expense was $3.5 million higher in 2004 than in the same 2003
period because the company's senior subordinated discount notes were issued in
May 2003. Of the $15.4 million first-quarter 2004 interest expense, $5.7 million
is a non-cash accrual for the payment-in-kind interest on the company's senior
subordinated discount notes and its senior discount notes.
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Compass Minerals International
First-Quarter 2004 Earnings
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Income taxes increased to $11.4 million compared to $4.4 million for the
same period in 2003 primarily due to increased foreign income. The company
currently estimates that its 2004 effective tax rate will be approximately 27
percent.
Cash flow from operations was $101.7 million, an increase of $29 million
over the first quarter of 2003. Capital expenditures were $3.9 million in first
quarter of 2004 compared to $2.7 million in 2003. The company also paid $5.7
million in dividends. As a result, in the three months ended March 31, 2004, the
company was able to increase cash by $68.7 million while reducing total debt by
$18.3 million.
RESULTS FOR THE TWELVE MONTHS ENDED MARCH 31
Compass Minerals' management also evaluates results on an
April-through-March basis due to the impact that winter weather has on the
company's sales and earnings. For the twelve months ended March 31, 2004, net
income available for common stock increased 63 percent to $39.6 million compared
to $24.3 million for the twelve months ended March 31, 2003.
FINANCIAL RESULTS
(IN MILLIONS)
TWELVE MONTHS ENDED TWELVE MONTHS ENDED
MARCH 31, 2004 MARCH 31, 2003
------------------- -------------------
Gross sales $638.4 $552.9
Gross sales less shipping and handling (product sales) 462.8 399.8
Net income available for common stock 39.6 24.3
EBITDA 150.0 124.8
Adjusted EBITDA 156.9 134.6
Highway deicing product sales for the twelve months ended March 31, 2004
equaled approximately 102 percent of the company's winter-season sales
commitments. When actual sales approximate sales commitments, management views
the deicing season as "typical" with no significant impact from unusual weather.
Cash flow from operations for the twelve months ended March 31, 2004 was
$98.1 million, and capital expenditures were $21.8 million for that same period.
"Our results over the last twelve months demonstrate that the company has
made sound improvement in its operating cash flow," Ducey continued. "And while
slightly above-average winter weather marginally contributed to the improvement,
our results represent true intrinsic growth. We will begin using these results -
adjusted to reflect typical weather - as a benchmark for measuring our
performance."
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Compass Minerals International
First-Quarter 2004 Earnings
Page 4 of 9
EARNINGS CALL
Compass Minerals International will discuss its first-quarter 2004
financial results on a conference call today, May 4, 2004, at 5:00 p.m. ET. The
call will be broadcast on the company's Web site at www.CompassMinerals.com and
can be accessed by calling (877) 228-7138. Outside of the U.S. and Canada,
callers should dial (706) 643-0377. Replays of the call will be available on the
company's Web site for two weeks. The replay can also be accessed for seven days
at (800) 642-1687, Conference 6683815. Outside the U.S. and Canada, callers
should dial (706) 645-9291.
ABOUT COMPASS MINERALS INTERNATIONAL
Based in the Kansas City metropolitan area, Compass is the second-leading
salt producer in North America and the largest in the United Kingdom. The
company operates nine production facilities, including the largest rock salt
mine in the world in Goderich, Ontario. The company's product lines include salt
for highway deicing, consumer deicing, water conditioning, consumer and
industrial food preparation, agriculture and industrial applications. In
addition, Compass is North America's leading producer of sulfate of potash,
which is used in the production of specialty fertilizers for high-value crops
and turf.
NON-GAAP MEASURES
EBITDA (earnings before interest, taxes, depreciation and amortization)
and adjusted EBITDA (EBITDA adjusted for non-recurring items and other
income/expense) are non-GAAP measures. They are not recognized in accordance
with generally accepted accounting principles (GAAP) and should not be viewed as
an alternative to GAAP measures of performance. Furthermore, such measures may
not be comparable to the calculation of these measures by other companies.
Management believes that these non-GAAP measures can assist investors in
understanding our cost structure, cash flows and financial position. Management
further believes that it is helpful to provide an analysis of our ability to
satisfy our debt service, capital expenditures and working capital requirements
in terms of EBITDA and adjusted EBITDA. The company's financial covenants and
ratios in our senior credit facilities and indentures are also tied to measures
that are calculated by adjusting EBITDA as described below.
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Compass Minerals International
First-Quarter 2004 Earnings
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ADJUSTED EBITDA RECONCILIATION
TWELVE TWELVE
MONTHS MONTHS
ENDED ENDED
MARCH 31, MARCH 31,
1Q 2004 1Q 2003 2004 2003
-------- -------- -------- --------
Net income ........................ $ 30.3 $ 25.5 $ 32.0 $ 32.9
Income tax expense .............. 11.4 4.4 15.4 10.3
Interest expense ................ 15.4 11.9 59.8 43.8
Depreciation and amortization ... 10.5 9.8 42.8 37.8
-------- -------- -------- --------
$ 67.6 $ 51.6 $ 150.0 $ 124.8
EBITDA
Adjustments to income from operations:
Restructuring and other charges . -- -- 2.4 5.2
Other (income) expense (1) ...... 0.5 (0.3) 4.5 4.6
-------- -------- -------- --------
Adjusted EBITDA ................... $ 68.1 $ 51.3 $ 156.9 $ 134.6
======== ======== ======== ========
- --------
(1) "Other (income) expense" primarily includes losses on early retirements of
debt ($5.3 million in the LTM March 31, 2003), costs related to amending
our senior credit facilities ($1.4 million in LTM March 31, 2004), gain
related to early extinguishment of debt ($1.9 million in LTM March 31,
2004), interest income, and non-cash foreign exchange gains and losses in
all periods.
This press release may contain forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. These statements are based
on the Company's current expectations and involve risks and uncertainties that
could cause the Company's actual results to differ materially. The differences
could be caused by a number of factors including those factors identified in
Compass Minerals International's annual report on Form 10-K for the year ended
December 31, 2003 on file with the Securities and Exchange Commission
(Commission file no. 1-31921). The Company will not update any forward-looking
statements made in this press release to reflect future events or developments.
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Compass Minerals International
First-Quarter 2004 Earnings
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COMPASS MINERALS INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(IN MILLIONS, EXCEPT SHARE DATA)
1Q 2004 1Q 2003
---------- ----------
Sales ...................................... $ 250.5 $ 212.7
Cost of sales - shipping and handling ...... 74.4 64.1
Cost of sales - products ................... 104.1 95.5
---------- ----------
Gross profit ............................. 72.0 53.1
Selling, general and administrative expenses 14.4 11.6
---------- ----------
Operating earnings ....................... 57.6 41.5
Other (income) expense:
Interest expense ......................... 15.4 11.9
Other, net ............................... 0.5 (0.3)
---------- ----------
Income before income taxes ................. 41.7 29.9
Income tax expense ......................... 11.4 4.4
---------- ----------
Net income ................................. 30.3 25.5
Dividends on preferred stock ............... -- 0.6
---------- ----------
Net income available for common stock ...... $ 30.3 $ 24.9
========== ==========
Net income per share, basic ................ $ 1.00 $ 0.71
Net income per share, diluted .............. 0.94 0.68
Cash dividends per share, common ........... 0.1875 --
Basic weighted-average shares outstanding .. 30,241,662 35,104,091
Diluted weighted-average shares outstanding 32,174,309 36,176,300
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First-Quarter 2004 Earnings
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COMPASS MINERALS INTERNATIONAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(IN MILLIONS)
MARCH 31, DECEMBER 31,
2004 2003
---------- ----------
ASSETS
Cash and cash equivalents ............................ $ 71.3 $ 2.6
Receivables, net ..................................... 86.0 117.4
Inventories .......................................... 56.8 96.7
Other current assets ................................. 2.5 3.7
Property, plant and equipment, net ................... 257.2 262.0
Intangible assets - mineral interests and other, net . 172.0 172.7
Other non-current assets ............................. 31.0 31.4
---------- ----------
Total assets ..................................... $ 676.8 $ 686.5
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities .................................... $ 95.9 $ 114.0
Long-term debt, net of current portion ................. 584.3 602.5
Deferred income taxes .................................. 77.1 77.7
Other noncurrent liabilities ........................... 36.6 36.4
Total stockholders' deficit ............................ (117.1) (144.1)
---------- ----------
Total liabilities and stockholders' deficit ..... $ 676.8 $ 686.5
========== ==========
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First-Quarter 2004 Earnings
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COMPASS MINERALS INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(IN MILLIONS)
1Q 2004 1Q 2003
-------- --------
Net cash provided by operating activities .................. $ 101.7 $ 72.7
Cash flows from investing activities:
Capital expenditures ..................................... (3.9) (2.7)
Other .................................................... 0.1 --
-------- --------
Net cash used in investing activities .................. (3.8) (2.7)
-------- --------
Cash flows from financing activities:
Principal payments on long-term debt ..................... (10.2) (30.5)
Revolver activity ........................................ (14.0) --
Dividends paid ........................................... (5.7) --
Proceeds from stock option exercises ..................... 0.2 --
Deferred financing costs ................................. (0.1) (0.1)
-------- --------
Net cash used in financing activities .................. (29.8) (30.6)
-------- --------
Effect of exchange rate changes on cash and cash equivalents 0.6 (1.2)
-------- --------
Net increase in cash and cash equivalents .............. 68.7 38.2
-------- --------
Cash and cash equivalents, beginning of period ............. 2.6 11.9
-------- --------
Cash and cash equivalents, end of period ................... $ 71.3 $ 50.1
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First-Quarter 2004 Earnings
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COMPASS MINERALS INTERNATIONAL, INC.
SEGMENT INFORMATION (UNAUDITED)
(IN MILLIONS)
THREE MONTHS ENDED MARCH 31, 2004 SALT POTASH OTHER (A) TOTAL
- --------------------------------- ---- ------ --------- -----
Sales to external customers ................ $ 228.7 $ 21.8 $ -- $ 250.5
Intersegment sales ......................... -- 2.3 (2.3) --
Cost of sales - shipping and handling costs 70.7 3.7 -- 74.4
Operating earnings (loss) .................. 60.2 3.0 (5.6) 57.6
Depreciation, depletion and amortization ... 8.5 2.0 -- 10.5
THREE MONTHS ENDED MARCH 31, 2003 SALT POTASH OTHER (A) TOTAL
- --------------------------------- ---- ------ --------- -----
Sales to external customers ................ $ 200.4 $ 12.3 $ -- $ 212.7
Intersegment sales ......................... -- 1.8 (1.8) --
Cost of sales - shipping and handling costs 62.0 2.1 -- 64.1
Operating earnings (loss) .................. 45.4 0.3 (4.2) 41.5
Depreciation, depletion and amortization ... 7.8 2.0 -- 9.8
(a) "Other" includes corporate entities and eliminations.
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