EXHIBIT 99.1
[COMPASS MINERALS INTERNATIONAL 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.
ANNOUNCES FOURTH-QUARTER AND FULL-YEAR 2004 RESULTS
OVERLAND PARK, Kan. (February 7, 2005) - Compass Minerals
International, Inc. (NYSE: CMP), a leading producer and marketer of salt and
specialty potash, reported the following fourth-quarter and year-end results:
- Fourth-quarter sales increased 17 percent over the prior
year.
- Full-year sales were $695.1 million, a 16 percent increase
over 2003.
- Fourth-quarter net income was $19.9 million or $0.62 per
diluted share. The company incurred a charge of $0.4 million
for a secondary offering of common stock by Apollo Management
LP and other stockholders. Upon completion of their ownership
exit strategy, Apollo terminated its management consulting
agreement with Compass for which the company incurred a
one-time pre-tax charge of $4.5 million.
- Excluding these special items, net income for the quarter was
$23.1 million or $0.72 per share.
- Full-year net income was $49.8 million, or $1.57 per diluted
share, including a partial release of the company's tax
valuation allowance in third quarter, secondary offering
costs in second and third quarters, and the special items
mentioned above. Excluding special items, full-year net
income was $42.9 million, or $1.35 per share.
"We set new sales and EBITDA records in 2004, and we've posted eleven
consecutive quarters of year-over-year revenue increases. I believe these
results are a testament to our organization-wide focus on increasing sales,
improving productivity and containing costs," commented Michael E. Ducey,
Compass Minerals president and CEO. "We're optimistic about the outlook for the
first quarter of 2005. We've had favorable winter weather in our service area
and, thus far, highway and consumer deicing salt sales are keeping pace with
the record sales we posted in the first quarter of 2004."
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Compass Minerals International
Fourth-Quarter and Full-Year 2004 Results
Page 2 of 9
FINANCIAL RESULTS
(IN MILLIONS EXCEPT FOR EPS)
THREE MONTHS ENDED TWELVE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
------------------------ ------------------------
2004 2003 2004 2003
------ ------ ------ ------
Gross sales $236.0 $202.1 $695.1 $600.6
Gross sales less shipping and handling (product sales) 170.7 146.1 504.9 435.3
Net income available for common stock 19.9 17.2 49.8 39.3
Net income available for common stock,
excluding special items 23.1 18.3 42.9 28.4
Diluted EPS 0.62 0.53 1.57 1.15
Diluted EPS, excluding special items 0.72 0.57 1.35 0.85
EBITDA 54.5 50.0 157.6 134.0
Adjusted EBITDA 63.2 53.5 171.3 140.1
For the quarter, salt sales increased 12 percent over the prior year
to $210.1 million. Sales of highway deicing salt benefited from stronger sales
in the U.K. and moderate sales volume increases in the company's northern
markets in North America. General Trade sales increased over the fourth quarter
of 2003 due to slightly higher water conditioning and consumer deicing sales,
organic market growth and modest shifts in product mix. Salt sales also reflect
a $5.3 million foreign exchange benefit.
Salt sales for the full year were $607.5 million, an 11 percent
increase over 2003. The growth was the result of an increase in highway deicing
commitments, strong consumer deicing sales in the first quarter, price
improvements and moderate base-business volume gains in both product lines.
Fourth-quarter sulfate of potash (SOP) sales were $25.9 million, a 69
percent increase over the prior year. The quarter-over-quarter sales
improvement was the result of a 62 percent increase in tons sold as well as
previously announced price improvements.
Full-year SOP sales of $87.6 million were 62 percent higher than in
2003 primarily due to the company's efforts to expand the SOP market and
Compass's December 2003 acquisition of an SOP marketing business.
SELECTED SALES DATA
THREE MONTHS ENDED TWELVE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
-------------------------- --------------------------
2004 2003 2004 2003
------- ------- ------- -------
SALES VOLUMES (IN THOUSANDS OF TONS):
Highway deicing ............................. 3,589 3,308 10,333 9,663
General trade ............................... 919 885 3,026 2,927
Specialty potash ............................ 110 68 386 251
AVERAGE SALES PRICE (PER TON):
Highway deicing ............................. $ 32.31 $ 30.45 $ 30.85 $ 29.25
General trade ............................... 102.37 97.38 95.49 89.50
Specialty potash ............................ 235.29 221.04 226.88 215.21
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Compass Minerals International
Fourth-Quarter and Full-Year 2004 Results
Page 3 of 9
Selling, general and administrative expenses increased by $3.9 million
to $18.6 million for the quarter reflecting increased variable compensation and
selling expenses, higher professional services for Sarbanes-Oxley compliance
and other accounting services, and the impact of foreign exchange rates on
Canadian and U.K. expenses.
Other expense reflects a foreign exchange loss of $2.9 million in the
quarter compared to a foreign exchange loss of $0.6 million in the fourth
quarter of 2003. Foreign exchange losses for the full year totaled $6.9 million
compared to a loss of $3.9 million for 2003. These losses are primarily the
result of intra-company transactions.
Interest expense for the quarter was $15.7 million of which $6.0
million is a non-cash accrual for payment-in-kind interest on the company's
senior subordinated discount notes and its senior discount notes. Interest
expense for the year was $61.6 million of which $23.6 million was a non-cash
accrual for payment-in-kind interest.
Compass recorded income tax expense of $8.0 million for the quarter
compared to tax expense of $6.1 million for the same quarter of 2003. For the
year, the company's income tax expense was $4.9 million compared to $3.3
million in 2003. In the third quarter of 2004, the company recorded a non-cash
benefit to earnings of $11.1 million as a result of the release of part of the
company's valuation allowance against deferred tax assets.
For the year, cash flow from operations was $99.7 million compared to
$69.1 million in 2003. Capital expenditures were $26.9 million for the year
compared to $20.6 million in 2003. Compass's debt, net of issuance premium, at
December 31, 2004 was $580.4 million compared to $600.4 million in 2003. Debt
net of cash was $570.7 million compared to $597.8 million at December 31, 2003.
EARNINGS CALL
Compass Minerals International will discuss its fourth-quarter and
year-end financial results on a conference call tomorrow, February 8, at 10:00
a.m. ET. To access the conference call, interested parties should visit the
company's Web site at www.CompassMinerals.com or dial (877) 228-7138. Outside
of the U.S. and Canada, callers may 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 by phone for seven days at (800) 642-1687, Conference ID 3650360.
Outside of the U.S. and Canada, callers may dial (706) 645-9291.
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Compass Minerals International
Fourth-Quarter and Full-Year 2004 Results
Page 4 of 9
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 special 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.
Excluding non-recurring items from net income available for common stock is
meaningful to investors because it provides insight with respect to ongoing
operating results of the company.
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Compass Minerals International
Fourth-Quarter and Full-Year 2004 Results
Page 5 of 9
EBITDA AND ADJUSTED EBITDA RECONCILIATION
(IN MILLIONS)
THREE MONTHS ENDED TWELVE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
---------------------- ------------------------
2004 2003 2004 2003
----- ----- ------ ------
Net income ......................................... $19.9 $17.2 $ 49.8 $ 32.3
Income tax expense ............................. 8.0 6.1 4.9 3.3
Interest expense ............................... 15.7 15.8 61.6 56.3
Depreciation, depletion and amortization ....... 10.9 10.9 41.3 42.1
----- ----- ------ ------
EBITDA ............................................. $54.5 $50.0 $157.6 $134.0
Adjustments to income from operations:
Other charges (1) ................................ 4.9 2.4 5.9 2.4
Other (income) expense (2) ....................... 3.8 1.1 7.8 3.7
----- ----- ------ ------
Adjusted EBITDA .................................... $63.2 $53.5 $171.3 $140.1
===== ===== ====== ======
- ---------
(1) "Other charges" includes costs for the company's initial public
offering in December 2003, a secondary offering of common stock in
July 2004, a Form S-1 filed with the Securities and Exchange
Commission (SEC) in September 2004, a Form S-3 filed with the SEC in
November 2004, and for Apollo Management LP's termination of a
management consulting agreement in December 2004. The shares sold in
each of the public offerings were previously held by stockholders and
the company did not receive any proceeds from the sales.
(2) "Other (income) expense" primarily includes $1.1 million of costs
related to amending the senior credit facility (second quarter of
2003), a $1.9 million gain on the early extinguishment of debt (second
quarter of 2003), interest income, and non-cash foreign exchange gains
and losses in all periods.
RECONCILIATION FOR NET INCOME AVAILABLE FOR COMMON STOCK,
EXCLUDING SPECIAL ITEMS
(IN MILLIONS)
THREE MONTHS ENDED TWELVE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
-------------------- ---------------------
2004 2003 2004 2003
----- ----- ----- -----
Net income available for common stock .............................. $19.9 $17.2 $49.8 $39.3
Plus (less) special items:
Release of deferred tax asset valuation
allowance(1) ................................................ -- (1.3) (11.1) (5.1)
Termination of management consulting
agreement, net of tax(2) .................................... 2.8 -- 2.8 --
Public offering costs(3) ....................................... 0.4 2.4 1.4 2.4
Gain on redemption of preferred
stock(4) .................................................... -- -- -- (8.2)
----- ----- ----- -----
Net income available for common stock, excluding special items ..... $23.1 $18.3 $42.9 $28.4
- ---------
(1) The company recorded a non-cash benefit to earnings of $11.1 million
in the third quarter of 2004 due to the release of part of the
company's valuation allowance for deferred tax assets. Amounts in 2003
represent non-cash changes to the valuation allowance for deferred tax
assets.
(2) Pretax costs of $4.5 million were incurred when Apollo Management LP
terminated its management consulting agreement with the company.
(3) The company incurred pretax costs of $2.4 million in December 2003 for
its initial public offering, and pretax costs of $0.4 million in the
fourth quarter and $1.4 million in the full year for secondary
offerings of common stock filed on Forms S-1 and S-3 with the SEC. The
shares sold in each public offering were previously held by
stockholders so the company did not receive any proceeds from the
sales.
(4) The company recorded an $8.2 million gain resulting from the
repurchase of 14,704 shares of mandatorily redeemable preferred stock
in June 2003. The gain was recorded as an increase to net income
available for common stock.
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Compass Minerals International
Fourth-Quarter and Full-Year 2004 Results
Page 6 of 9
COMPASS MINERALS INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(IN MILLIONS, EXCEPT SHARE DATA)
THREE MONTHS ENDED TWELVE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
-------------------------- --------------------------
2004 2003 2004 2003
----------- ----------- ----------- -----------
Sales ................................................ $ 236.0 $ 202.1 $ 695.1 $ 600.6
Cost of sales - shipping and handling ................ 65.3 56.0 190.2 165.3
Cost of sales - products ............................. 99.8 88.8 316.0 288.3
----------- ----------- ----------- -----------
Gross profit ....................................... 70.9 57.3 188.9 147.0
Selling, general and administrative expenses ......... 18.6 14.7 58.9 49.0
Other charges ........................................ 4.9 2.4 5.9 2.4
----------- ----------- ----------- -----------
Operating earnings ................................. 47.4 40.2 124.1 95.6
Other (income) expense:
Interest expense ................................... 15.7 15.8 61.6 56.3
Other, net ......................................... 3.8 1.1 7.8 3.7
----------- ----------- ----------- -----------
Income before income taxes ........................... 27.9 23.3 54.7 35.6
Income tax expense ................................... 8.0 6.1 4.9 3.3
----------- ----------- ----------- -----------
Net income ........................................... 19.9 17.2 49.8 32.3
Dividends on preferred stock ......................... -- -- -- 1.2
Gain on redemption of preferred stock ................ -- -- -- (8.2)
----------- ----------- ----------- -----------
Net income available for common stock ................ $ 19.9 $ 17.2 $ 49.8 $ 39.3
=========== =========== =========== ===========
Net income per share, basic .......................... $ 0.65 $ 0.57 $ 1.63 $ 1.21
Net income per share, diluted ........................ 0.62 0.53 1.57 1.15
Cash dividends per share, common ..................... 0.25 -- 0.94 2.85
Basic weighted-average shares outstanding ............ 30,875,070 30,173,200 30,604,597 32,492,792
Diluted weighted-average shares outstanding .......... 32,300,692 32,074,416 31,816,202 33,983,983
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Fourth-Quarter and Full-Year 2004 Results
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COMPASS MINERALS INTERNATIONAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(IN MILLIONS)
DECEMBER 31,
-------------------------
2004 2003
------ ------
ASSETS
Cash and cash equivalents .................................... $ 9.7 $ 2.6
Receivables, net ............................................. 143.0 117.4
Inventories .................................................. 96.3 96.7
Deferred income tax assets, net .............................. 13.7 8.6
Other current assets ......................................... 3.3 3.7
Property, plant and equipment, net ........................... 402.9 410.0
Intangible assets - mineral interests and other, net ......... 23.6 24.7
Other non-current assets ..................................... 31.4 31.4
------ ------
Total assets ........................................... $723.9 $695.1
====== ======
LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIT)
Current liabilities .......................................... $134.9 $114.0
Long-term debt, net of current portion ....................... 582.7 602.5
Deferred income taxes, net ................................... 55.1 70.3
Other noncurrent liabilities ................................. 39.6 36.4
Total stockholders' deficit .................................. (88.4) (128.1)
------ ------
Total liabilities and stockholders' deficit ............ $723.9 $695.1
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Compass Minerals International
Fourth-Quarter and Full-Year 2004 Results
Page 8 of 9
COMPASS MINERALS INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(IN MILLIONS)
TWELVE MONTHS ENDED
DECEMBER 31,
------------------------
2004 2003
----- ------
Net cash provided by operating activities ........................ $99.7 $ 69.1
----- ------
Cash flows from investing activities:
Capital expenditures ........................................... (26.9) (20.6)
Acquisition of intangible assets ............................... -- (24.8)
Other .......................................................... 0.9 (0.2)
----- ------
Net cash used in investing activities ............................ (26.0) (45.6)
----- ------
Cash flows from financing activities:
Issuance of long-term debt ..................................... -- 100.0
Principal payments on long-term debt ........................... (40.6) (31.1)
Revolver activity .............................................. (3.0) 14.0
Payments of notes due to related parties ....................... -- (1.5)
Dividends paid ................................................. (28.7) (103.7)
Repurchase of Preferred Stock .................................. -- (8.5)
Payments to acquire treasury stock ............................. -- (9.7)
Proceeds from stock option exercises ........................... 1.2 0.4
Deferred financing costs ....................................... (0.1) (5.0)
Capital Contributions .......................................... -- 8.8
----- ------
Net cash used in financing activities ............................ (71.2) (36.3)
----- ------
Effect of exchange rate changes on cash and cash equivalents ..... 4.6 3.5
----- ------
Net increase (decrease) in cash and cash equivalents ............. 7.1 (9.3)
Cash and cash equivalents, beginning of period ................... 2.6 11.9
----- ------
Cash and cash equivalents, end of period ......................... $ 9.7 $ 2.6
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Fourth-Quarter and Full-Year 2004 Results
Page 9 of 9
COMPASS MINERALS INTERNATIONAL, INC.
SEGMENT INFORMATION (UNAUDITED)
(IN MILLIONS)
FOURTH-QUARTER RESULTS
THREE MONTHS ENDED DECEMBER 31, 2004 SALT POTASH OTHER (A) TOTAL
------ ------ --------- ------
Sales to external customers ......................... $210.1 $ 25.9 $ -- $236.0
Intersegment sales .................................. -- 3.9 (3.9) --
Cost of sales - shipping and handling costs ......... 61.3 4.0 -- 65.3
Operating earnings (loss) ........................... 49.5 6.5 (8.6) 47.4
Depreciation, depletion and amortization ............ 8.8 2.1 -- 10.9
Total assets ........................................ 555.1 134.9 33.9 723.9
THREE MONTHS ENDED DECEMBER 31, 2003 SALT POTASH OTHER (A) TOTAL
------ ------ --------- ------
Sales to external customers ......................... $186.8 $ 15.3 $ -- $202.1
Intersegment sales .................................. -- 3.0 (3.0) --
Cost of sales - shipping and handling costs ......... 53.7 2.3 -- 56.0
Operating earnings (loss) ........................... 45.2 3.3 (8.3) 40.2
Depreciation, depletion and amortization ............ 9.0 1.9 -- 10.9
Total assets ........................................ 522.6 141.5 31.0 695.1
YEAR-TO-DATE RESULTS
YEAR ENDED DECEMBER 31, 2004 SALT POTASH OTHER (A) TOTAL
------ ------ --------- ------
Sales to external customers ......................... $607.5 $ 87.6 $ -- $695.1
Intersegment sales .................................. -- 11.3 (11.3) --
Cost of sales - shipping and handling costs ......... 176.4 13.8 -- 190.2
Operating earnings (loss) ........................... 128.8 20.7 (25.4) 124.1
Depreciation, depletion and amortization ............ 33.2 8.1 -- 41.3
YEAR ENDED DECEMBER 31, 2003 SALT POTASH OTHER (A) TOTAL
------ ------ --------- ------
Sales to external customers ......................... $546.6 $ 54.0 $ -- $600.6
Intersegment sales .................................. -- 9.4 (9.4) --
Cost of sales - shipping and handling costs ......... 156.6 8.7 -- 165.3
Operating earnings (loss) ........................... 108.8 7.5 (20.7) 95.6
Depreciation, depletion and amortization ............ 34.2 7.9 -- 42.1
(a) "Other" includes corporate entities and eliminations.
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 registration statement on form
S-3 filed with the Securities and Exchange Commission on November 16, 2004. The
Company will not update any forward-looking statements made in this press
release to reflect future events or developments.
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