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 SECOND-QUARTER 2005 RESULTS
OVERLAND PARK, Kan. (August 1, 2005) - Compass Minerals International,
Inc. (NYSE: CMP), a leading producer and marketer of salt and specialty potash,
reported the following results today:
- - Second-quarter sales increased 14 percent over the prior year and
product sales, or sales less the cost of shipping and handling,
increased 11 percent as a result of gains in all product categories.
- - The company's net loss for the second quarter was $0.7 million or $0.03
per share, compared with a net loss of $5.9 million or $0.19 per share
in the second quarter of 2004. Compass Minerals routinely incurs losses
in the second and third quarters of its fiscal year when the company is
building rock salt inventories for the upcoming winter season.
- - This quarter, taxing authorities developed a framework to treat
cross-border transactions between the U.S. and Canada more consistently.
Accordingly, Compass released part of a previously recorded tax reserve.
The benefit of this release, net of other tax adjustments, was $4.8
million. Excluding this one-time tax benefit, the company's net loss was
$5.5 million, or $0.18 per share.
- - Compass has completed approximately 70 percent of its 2005-2006 highway
deicing bidding process. To date, the company has averaged a nine
percent increase in its bid price per ton, with no significant
year-over-year change in overall market share.
"This has been a quarter of successful execution and solid
accomplishments," said Michael E. Ducey, Compass Minerals International
president and CEO. "We've achieved gains across all product lines, and we
believe that our early highway deicing bid awards can provide real growth for
the coming winter season."
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Compass Minerals International
Second-Quarter 2005 Results
Page 2 of 9
================================================================================
FINANCIAL RESULTS
(IN MILLIONS EXCEPT FOR EPS)
================================================================================
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
----------------------------- -----------------------------
2005 2004 2005 2004
------------- ------------- ------------- -------------
Gross sales $ 110.4 $96.9 $ 377.8 $ 347.4
Gross sales less shipping and handling (product sales) 82.2 74.2 263.7 250.3
Net earnings (loss) (0.7) (5.9) 21.9 24.4
Net earnings (loss), excluding special items (5.5) (5.5) 22.5 24.8
Diluted earnings per share* (0.03) (0.19) 0.68 0.76
Diluted earnings per share, excluding special items* (0.18) (0.18) 0.70 0.77
EBITDA 17.9 16.7 86.2 84.3
Adjusted EBITDA 18.7 17.3 87.2 85.4
*Negative EPS is not diluted
</Table>
Compass's second-quarter salt segment sales increased 12 percent over
the prior year to $83.1 million. Salt product sales, or salt sales less the cost
of shipping and handling, increased seven percent to $58.9 million from $55.1
million in the second quarter of 2004.
Highway deicing salt sales grew by 117,000 tons, or 14 percent, due to a
slight increase in late-winter snowfall and due to earlier ordering for the
upcoming winter season. Strong industrial and water conditioning sales combined
with the price increases that the company announced in the first quarter helped
boost second-quarter revenues for Compass's general trade products. Gains in the
company's North American markets were partially offset by slightly lower sales
in the United Kingdom.
Sulfate of potash gross sales and product sales both grew by 21 percent
over the second quarter of 2004 as a result of continued pricing improvement and
modest volume gains. The company also introduced a $20 per ton price increase
effective July 1, 2005.
================================================================================
SELECTED SALES DATA
================================================================================
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
------------------------------- ------------------------------
2005 2004 2005 2004
-------------- --------------- -------------- --------------
SALES VOLUMES (IN THOUSANDS OF TONS):
Highway deicing............................ 963 846 5,824 5,525
General trade.............................. 660 630 1,425 1,415
Specialty potash........................... 104 99 208 200
AVERAGE SALES PRICE (PER TON):
Highway deicing............................ $ 23.30 $ 21.92 $ 32.47 $ 30.88
General trade.............................. 91.93 88.50 95.91 93.58
Specialty potash........................... 260.89 228.41 250.13 219.64
</Table>
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Compass Minerals International
Second-Quarter 2005 Results
Page 3 of 9
Shipping and handling costs increased 24 percent over the prior-year
quarter, partially offsetting the company's gross sales growth. The company is
working to stabilize transportation costs as a percent of gross sales.
Escalating natural gas costs similarly increased the company's production costs
this quarter. Compass continues to hedge its natural gas exposure in North
America with forward purchase contracts. That program benefited the company
approximately $0.5 million in the second quarter of 2005 compared to buying on
the spot market. Nevertheless, natural gas costs were approximately $0.7 million
higher in the second quarter of 2005 than in the same period of 2004.
Compass's selling, general and administrative expenses increased by $0.5
million, or four percent, chiefly due to the effect of foreign exchange rates on
costs in the U.K. and Canada.
Interest expense increased by $0.8 million, or five percent, due to
non-cash interest accretion on the company's discount notes. Of the company's
$15.9 million interest expense, $6.4 million was non-cash. Compass made another
$10 million voluntary prepayment on its term loan, reducing the loan balance to
$17.6 million. At June 30, the company's debt was $564.5 million compared to
$583.1 million at December 31, 2004, and its cash was $55.5 million at June 30
compared to $9.7 million at December 31.
Other expense of $0.8 million reflects non-cash foreign exchange losses,
which were partially offset by interest income on cash and cash equivalents.
Compass's tax benefit of $7.6 million includes a one-time benefit from
the partial release of a tax reserve for cross-border transactions between the
U.S. and Canada. The benefit was $4.8 million net of other tax adjustments.
Cash flow from operations for the first six months of the year was
$103.4 million compared to $108.4 million for the six months ended June 30,
2004. The decline was chiefly due to higher income tax payments and changes in
working capital.
Minosus, Compass's joint venture in the United Kingdom, signed its first
waste disposal contracts this quarter. The company continues to expect
break-even results from Minosus in 2005.
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Compass Minerals International
Second-Quarter 2005 Results
Page 4 of 9
EARNINGS CALL
- -------------
Compass Minerals International will discuss its second-quarter 2005
financial results on a conference call tomorrow, August 2, 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 8046140. Outside of the
U.S. and Canada, callers may 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 secondary offering costs in 2004 and
other income/expense) are non-GAAP measures. They are not recognized in
accordance with U.S. generally accepted accounting principles (GAAP) and should
not be viewed as an alternative to GAAP measures of performance. Furthermore,
these 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 - including the partial release of a tax
reserve, net of other adjustments; income tax expense for a repatriation of
funds; and secondary public offering costs, net of tax - is meaningful to
investors because it provides insight with respect to ongoing operating results
of the company.
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Compass Minerals International
Second-Quarter 2005 Results
Page 5 of 9
================================================================================
EBITDA AND ADJUSTED EBITDA RECONCILIATION
(in millions)
================================================================================
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
----------------------------------------------------------
2005 2004 2005 2004
----------------------------------------------------------
Net earnings (loss) $ (0.7) $ (5.9) $ 21.9 $ 24.4
Income tax expense (benefit) (7.6) (2.3) 11.2 9.1
Interest expense 15.9 15.1 31.6 30.5
Depreciation, depletion and amortization 10.3 9.8 21.5 20.3
----------------------------------------------------------
EBITDA $ 17.9 $ 16.7 $ 86.2 $ 84.3
Adjustments to income from operations:
Other charges (1) --- 0.4 --- 0.4
Other (income) expense, net (2) 0.8 0.2 1.0 0.7
----------------------------------------------------------
Adjusted EBITDA $ 18.7 $ 17.3 $ 87.2 $ 85.4
- --------------
(1) "Other charges" includes costs for a secondary offering of our common
stock that closed in July 2004. The shares sold in the offering were
previously held by stockholders and we did not receive any proceeds from
the sale.
(2) "Other (income) expense" primarily includes interest income and non-cash
foreign exchange gains and losses in all periods.
================================================================================
RECONCILIATION FOR NET EARNINGS, EXCLUDING SPECIAL ITEMS
(in millions)
================================================================================
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
---------------------------------------------------------
2005 2004 2005 2004
---------------------------------------------------------
Net earnings (loss) $ (0.7) $ (5.9) $ 21.9 $ 24.4
Plus (less) special items:
Release of tax reserve, net of other tax adjustments(1) (4.8) --- (4.8) ---
Charge to income tax expense for one-time repatriation of funds (2) --- --- 5.4 ---
Initial public offering costs, net of tax(3) --- 0.4 --- 0.4
---------------------------------------------------------
Net earnings, excluding special items $ (5.5) $ (5.5) $ 22.5 $ 24.8
---------------------------------------------------------
- ------------------
(1) When taxing authorities developed a framework to treat cross-border
transactions between the U.S. and Canada more consistently, we reversed
previously recorded income tax reserves of $4.8 million, net of other
income tax adjustments.
(2) We recorded a $5.4 million charge to income tax expense due to a
one-time repatriation of funds from the U.K.
(3) We incurred costs of $0.4 million for a secondary offering of our common
stock that closed in July 2004. The shares sold in the offering were
previously held by stockholders and we did not receive any proceeds from
the sale.
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Compass Minerals International
Second-Quarter 2005 Results
Page 6 of 9
COMPASS MINERALS INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(IN MILLIONS, EXCEPT SHARE DATA)
<Table>
<Caption>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
------------------------------------ -----------------------------------
2005 2004 2005 2004
---------------- -------------- --------------- ----------------
Sales........................................... $ 110.4 $ 96.9 $ 377.8 $ 347.4
Cost of sales - shipping and handling........... 28.2 22.7 114.1 97.1
Cost of sales - products........................ 60.7 54.1 168.9 158.2
---------------- -------------- --------------- ----------------
Gross profit............................... 21.5 20.1 94.8 92.1
Selling, general and administrative expenses.... 13.1 12.6 29.1 27.0
Other charges................................... --- 0.4 --- 0.4
---------------- -------------- --------------- ----------------
Operating earnings......................... 8.4 7.1 65.7 64.7
Other (income) expense:
Interest expense........................... 15.9 15.1 31.6 30.5
Other, net................................. 0.8 0.2 1.0 0.7
---------------- -------------- --------------- ----------------
Earnings (loss) before income taxes............. (8.3) (8.2) 33.1 33.5
Income tax expense (benefit).................... (7.6) (2.3) 11.2 9.1
---------------- -------------- --------------- ----------------
Net earnings (loss)............................. $ (0.7) $ (5.9) $ 21.9 $ 24.4
================ ============== =============== ================
Net earnings (loss) per share, basic............ $ (0.03) $ (0.19) $ 0.70 $ 0.80
Net earnings (loss) per share, diluted.......... (0.03) (0.19) 0.68 0.76
Cash dividends per share, common................ 0.275 0.25 0.55 0.4375
Basic weighted-average shares outstanding....... 31,430,900 30,516,370 31,285,807 30,379,016
Diluted weighted-average shares outstanding..... 31,430,900 30,516,370 31,966,910 32,200,707
</Table>
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Compass Minerals International
Second-Quarter 2005 Results
Page 7 of 9
COMPASS MINERALS INTERNATIONAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(IN MILLIONS)
<Table>
<Caption>
JUNE 30, DECEMBER 31,
2005 2004
-------------- --------------
ASSETS
Cash and cash equivalents....................................... $ 55.5 $ 9.7
Receivables, net................................................ 59.3 143.0
Inventories..................................................... 91.1 96.3
Other current assets............................................ 19.0 17.0
Property, plant and equipment, net.............................. 387.5 402.9
Intangible assets, net ......................................... 23.1 23.6
Other non-current assets........................................ 31.2 31.4
------------- -------------
Total assets................................................ $ 666.7 $ 723.9
============= =============
LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIT)
Current liabilities.............................................. $ 101.8 $ 134.9
Long-term debt, net of current portion ........................... 564.3 582.7
Deferred income taxes............................................. 40.7 55.1
Other noncurrent liabilities ..................................... 41.3 39.6
Total stockholders' deficit....................................... (81.4) (88.4)
------------- -------------
Total liabilities and stockholders' deficit................. $ 666.7 $ 723.9
============= =============
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Second-Quarter 2005 Results
Page 8 of 9
COMPASS MINERALS INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(IN MILLIONS)
<Table>
<Caption>
SIX MONTHS ENDED
JUNE 30,
----------------------------
2005 2004
------------ ------------
Net cash provided by operating activities................. $ 103.4 $ 108.4
------------ ------------
Cash flows from investing activities:
Capital expenditures.................................... (9.8) (8.6)
Other .................................................. (0.3) 0.2
------------ ------------
Net cash used in investing activities..................... (10.1) (8.4)
------------ ------------
Cash flows from financing activities:
Principal payments on long-term debt.................... (20.2) (20.4)
Revolver activity....................................... (11.0) (14.0)
Dividends paid ......................................... (17.2) (13.3)
Proceeds from stock option exercises ................... 0.9 0.8
Deferred financing costs ............................... --- (0.1)
------------ ------------
Net cash used in financing activities..................... (47.5) (47.0)
------------ ------------
Effect of exchange rate changes on cash and cash
equivalents............................................... --- (0.7)
------------ ------------
Net increase in cash and cash equivalents............. 45.8 52.3
Cash and cash equivalents, beginning of period ........... 9.7 2.6
------------ ------------
Cash and cash equivalents, end of period ................. $ 55.5 $ 54.9
============ ============
</Table>
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Compass Minerals International
Second-Quarter 2005 Results
Page 9 of 9
COMPASS MINERALS INTERNATIONAL, INC.
SEGMENT INFORMATION (UNAUDITED)
(IN MILLIONS)
SECOND-QUARTER RESULTS
- --------------------------------------------------------------------------------
THREE MONTHS ENDED JUNE 30, 2005 SALT POTASH OTHER (a) TOTAL
--------------------------------------------- ----------- ------------ ---------- -------------
Sales to external customers................. $ 83.1 $ 27.3 $ --- $ 110.4
Intersegment sales.......................... --- 2.8 (2.8) ---
Cost of sales - shipping and handling costs. 24.2 4.0 --- 28.2
Operating earnings (loss)................... 4.8 9.0 (5.4) 8.4
Depreciation, depletion and amortization.... 8.2 2.1 --- 10.3
Total assets................................ 496.6 133.6 36.5 666.7
THREE MONTHS ENDED JUNE 30, 2004 SALT POTASH OTHER (a) TOTAL
--------------------------------------------- ----------- ------------ ---------- -------------
Sales to external customers................. $ 74.3 $ 22.6 $ --- $ 96.9
Intersegment sales.......................... --- 2.5 (2.5) ---
Cost of sales - shipping and handling costs. 19.2 3.5 --- 22.7
Operating earnings (loss)................... 6.3 6.2 (5.4) 7.1
Depreciation, depletion and amortization.... 7.8 2.0 --- 9.8
Total assets................................ 492.8 133.0 20.9 646.7
YEAR-TO-DATE RESULTS
- --------------------------------------------------------------------------------
SIX MONTHS ENDED JUNE 30, 2005 SALT POTASH OTHER (a) TOTAL
--------------------------------------------- ----------- ------------ ---------- -------------
Sales to external customers................. $ 325.7 $ 52.1 $ --- $ 377.8
Intersegment sales.......................... --- 4.8 (4.8) ---
Cost of sales - shipping and handling costs. 106.1 8.0 --- 114.1
Operating earnings (loss)................... 63.3 14.1 (11.7) 65.7
Depreciation, depletion and amortization.... 17.2 4.3 --- 21.5
SIX MONTHS ENDED JUNE 30, 2004 SALT POTASH OTHER (a) TOTAL
--------------------------------------------- ----------- ------------ ---------- -------------
Sales to external customers................. $ 303.0 $ 44.4 $ --- $ 347.4
Intersegment sales.......................... --- 4.8 (4.8) ---
Cost of sales - shipping and handling costs. 89.9 7.2 --- 97.1
Operating earnings (loss)................... 66.5 9.2 (11.0) 64.7
Depreciation, depletion and amortization.... 16.3 4.0 --- 20.3
(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 annual report on form 10-k filed with the
Securities and Exchange Commission on March 16, 2005. The Company will not
update any forward-looking statements made in this press release to reflect
future events or developments.
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