Earnings call transcript Q1 2023

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Operator

Good morning, ladies and gentlemen. My name is Abby, and I'll be your conference operator today. At this time, I would like to welcome everyone to the Compass Minerals' Fiscal First Quarter 2023 Earnings Call. Today's call is being recorded and all lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session [Operator Instructions]. turn Investor over Relations. now Vice Brent will of President I the to call Collins, And

You begin. may

Brent Collins

Thank you, call. operator. our Compass discuss Minerals’ Good recent outlook morning. And XXXX our quarter welcome for first fiscal earnings and conference results Today, XXXX. will fiscal we update to the

and Crenshaw. will We President with and Crutchfield; remarks prepared Kevin begin our our from CEO, CFO, Lorin

Chris our our portion Commercial for the call Vice Officer; Schuller, the Chief George Standen, Jamie question-and-answer Senior of our Lithium; Chief in & of Officer; Joining be Operations Bartlett, Head and Yandell, Commercial will Technology. Ryan Lithium President,

Before located and found financial everyone at materially. that and our expectations risks and uncertainties that we These cause date, our reflect as will these can outlook be XXXX. today today's involve company's differ of risks make get online to started, could actual results operational February A filings, that I assumptions remarks the of entail remind discussion in XX, we outlooks SEC investors.compassminerals.com.

also today financial include non-GAAP remarks Our measures. certain

You items operations call other our the can presented The amounts issued this earnings and noted in are the which only consolidated our condensed our these business of available results otherwise. also yesterday in of both or of statements in earnings unless presentation, during or of release to release the flows reflect continuing reconciliations find than online. pertaining cash

over the turn call Kevin. to will I

Kevin Crutchfield

on us Thank call. And you, joining you today our Brent. Good everyone. morning, for thank

our portfolio next retardants. We the weather Minerals and for battery dependency generation our of by our value continue for accelerated and essental to lithium into make to create strides reduce minerals winter fire markets in expanding growth, efforts adjacent grade Compass sustainable reposition shareholders

our provide to strategic in focused turning we and status the over on comment last Lauren areas, I'll call detail. discuss a few goals. to update performance on our minutes achieving in six before financial the more As call, entered each on those to take just a of I'll communicated XXXX quarterly on quarter

employees. each area intend zero was operate our our or We the continued outstanding Our and for facilities. no continues our that year in. be to across Last year to reportable we harm wellbeing of fiscal across harm on build first towards be performance an strong ‘XX, that our performance entire will achieving our injuries focus acknowledge of operations. In safety and of environments a operating the in zero we that across drive platform complex challenge safety

for and in left. we've and they it's to families our strive home several every same the day to owe so employees the their sites, proven already that possible our to as we families of condition goal employees However, it in their go

have our The next of detail goal in we to we restore call business profitability demonstrated last to aim salt levels some on past. our the outlined in is our the

quarter markets season were year with inflationary strategy you geographically network, strategy challenges direct logistics over on evident expansive year focus on are of up us results disciplined to in a serve. X% ton. performance winter created advantageous pricing with salt $XX. segment those this a sales of headwind in and just efficient more commitments our our that mitigate the relatively financial a pressures In our winning this many bidding and EBITDA for salt in impact XXXX salt The per approach to segment that effort As over to significant XXXX an leverage we depot know, had effectively and a EBITDA

continued in the With to our production. sustainability expect the on of discuss and goal progress process to more we're of to direction honing that get enjoyed deep SOP goal executing and in is toward of historically. during EBITDA balance headwinds that made the back on that and the to ton continue front nutrition progress Our cost We've through per that the some to strides moment. the our make levels we've and make in reliability year despite a improve we'll segment, strategies facing the plant quarter

earnings be the SOP XXXX on flat evaporation favorable potassium production are call, ‘XX our our was less expected in as weather in fiscal to turn, volumes in As evaporation by deposited impacted last levels reducing ponds. conditions, the indicated than season solar

should towards throughout time. steps continue year. we're however, to We'll the site on our over provide believe, improved progress production We relevant that enable Ogden this the objective taking at levels updates now our

on nutrition in first lower production that a was decline touch the note for it's by challenges. quarter moment. to in sales I our volumes not I'll segment plant the important driven outlook But the think demand,

fact, when it to and customer average were if continue prepared and be improves. service demand we In to

the On Phase expect estimate, Ogden. A spin key tighten the milestone an March, In expected the of expect the to year engineering complete our Phase level or have increase commercial FEL-X FEL-X the related an this project year, a next stage end to X. to level and known on several study estimate. to milestone of shared goal along we calendar in as to our by a reach mid-year more is to cost mitigate of achieve milestones advance major risks. definitive completed Later Each FEL feasibility for of have lithium PFS. this FEL-X engineering, known study the also are September, for to front, capital gate project capital as prefeasibility we and is robust accuracy our lithium estimate operational X an or roadmap progressions engineering development The DFS. level the is of also this estimate by we

with make prior to commissioning XXXX. early unit. operations our commercial we scale expect and calendar Consistent our begin to DLE in on progress plans, continue we Finally,

and and this is is added result North US concentrate the dry QPL. a years liquid our US to in two team Service by the fire their interest This announcement as the we respect milestone ownership officially achievement With had company when Forest minority Fortress year as qualified our a growth powder initiative, or categories Fortress development been as listing, received a the other notice very aerial were within criteria December pleased of accomplish namely major it in rigorous America, XX testing comes order primary that retardants, Fortress, list first Forest Service extraordinary meet exceed an a in to and of a live fire the of the wildfire other such XXXX term such environmental new retardant effort product pumpability the six corrosion and momentum in to into heading and of over to storability, effects and operation variety species, awards results for efficacy is the next long air to upon occur We're this viscosity, field wildfire by evaluation. we've the metals, retardation an mammalian burn not tanker awarded US toxicity to form Fortress a step be the be aquatic our the of initial qualifiers completion the Service. season, outlook. acceptable that on finally, of such and financial Forest aircraft positive optimistic factored fire season an in year. of into ahead Building in award associated of will conservative, But order tranche such bases to

to share commercialization currently profit served major to not a hurdle their Fortress dominated market focus continue a listing product was up than on measurable within friendly clear $XXX in to a market, market efforts excess market this QPL path full to addressable for product environmentally the magnesium single a more a that supporting the ramp ready The is revenue participant. a decades. their providing existing diammonium with our approximately and greater by million on phosphate-based recent has efficacy chloride-based of $XX is the mention to million pool in products stand that gaining We of

investment a we recall we business forward You'll in coming bright of future months. and believe year Fortress look to increased that own the has in XX% and market our approximately last We Fortress company. gaining the traction strategic the currently

financial into our to strategic in this strategic $XXX and Minerals closed took credit ‘XX fiscal on investment past We when step Lastly, profile. & million our a equity objective gross by LLC. final meaningful direction overall we standing Koch that was a Trading, hitting October enhance

investment debt X years allowed Koch our sheet the lithium to development down our that during strengthen funding In two to the balance addition paying by also first some Phase quarter. by of us

through on EBITDA result rises. in momentum our deleveraging expect the profitability, to as salt which the additional of should build segment's restoration We this

plan term, we shorter term, So executing pleased are negative continue challenges quarterly continue made. the long for our with profitability. pressure on and to placing our the we in experience progress Unfortunately, being on

our point, first of results casing a in As business bag a mixed trends. terms quarter reflected

with $XXX with deicing revenue around events consolidated in Year-over-year, to XX% X% consolidated up season up historically that realized an year's higher in increasing a weak adjusted sales This of line the a price in salt historical EBITDA with which decent snow we in and start the volumes, financial we operating had consolidated increase in significantly We first and to X%. performance. $XX XX% earnings snow deicing million, saw averages highway last million, above select combined winter salt year-over-year stronger with measures events. supported improvement number resulted quarter

to held nutrition application deeply weather and at the seemingly historically during pricing beginning California period during discouraged largest US dry our in although demand in and in epic that plant conditions markets fiscal the overnight. relatively by quarter Ironically, the expectations, our shifted disappointing in fiscal the conditions of customers quarter January, our market in levels, deferring first Western firm the from below of fertilizer was softening. December Within drought high in anticipation purchases conditions second segment, abruptly well weather driven flooding the exceptionally ending

term speculative historical as visibility at clear related our result, a As to not currently it's is at will demand best, if apply growers levels. SOP near

in this variability degree to may global is and segment the there demand what plant perspective just elevated resulting outlook Aside the amplify from for year. fertilizer nutrition from our MOP need profitability dynamics macro pressure, pricing to uncertainty I described, recalibrate a both the also

through a business. Despite a the higher nothing its nutrition at in the run of we of the we power suggest earnings new see a as encountering level, our market phase enters the challenges change cycle plant long fertilizer cycle, are

delivering to improvement as our year company. are advancing growth within Our positively unlock embedded the work and year our over value initiatives salt business is we

I our and clear it's As to a both challenges. strategically start operationally we’ve lot navigate year, got to fiscal work do, this near these of term to consider

our take stakeholders our for goals, can strategic our what XXXX focus control toward remains we creating on so, long delivering As on to controlling over do term. and the value continuing steps we

of value by plan to combined and that nutrition, realize ability large the and across and remain cost reduce address value also the price structure confident is will Size pressures our opportunities on challenges intrinsic appropriate. the the our of caused where by businesses retardant next executing overtime. we lithium generation fire plant being business in salt, We by measured our to as our cost

now And with to that, I'll turn call over Lorin. the

Lorin Crenshaw

quarter we've $XXX first Chicago, by year sales volumes relatively Across took XX% deicing and heavy year ton experience representative salt levels. XX% weather and have past, pricing were the Milwaukee of last Kevin. to We part volume XX low we a operating salt reflects a but XX% higher Detroit, discussed EBITDA price higher than X% year-over-year. during relatively Beginning On year. over $XX.X strong up revenue in winter average our across our was % volume sales volumes. up weather, you, strategies $XXX XX for experienced positive sales result areas from consider $XX shy commitment The million, year-over-year, Thank $XX.X basis, and reported bidding million, just quality the driven during where on year fewer over volume the million segment, sales while to X% snow revenue you such certain was solid mild when our in operations the year. key and the of year deliberately totaled team as events average. with up business rose XX the the year-over-year. the of consolidated up Delivering sales for per quarter, development quarter, up growth XX highway over cities improved These XX% adjusted Consolidated lower year projected in commitments X% growth and in X% year with driver year. areas value million X% in as earnings A was activity continuing ratios experienced of that events over markets to key year over commitment relatively which our somewhat quarter. commercial line growth

last by deicing year year, Within X% $XXX timing care per year. expenses X% by highway our reflecting embedded goods weaker approximately of per to of declined approximately over $XX the consumer and business, salt earnings higher the C&I water to XX% higher price fuel for driven segment per sold X% year rose year of were costs out volumes million to our ton. sales and and while Higher primarily XXXX logistics to distribution of the higher Overall, unit into year inventory. being year environment XX% operating and compared Operating slightly costs demand, over drove cost translated XX% to sold rising salt million. earnings the operating this now $XX EBITDA EBITDA ton deicing inflationary $XX.X in rising over with

objective is our progress this As the higher occurs profitability in restore Kevin margin rest up this We a of than strategic our that segment quarter the it reflecting to normalized assuming path year see the in profitability half the back goal does a we've that on of ours of second continue of range EBITDA to and ton greater realized. that second $XX towards makes levels $XX earlier, fact discussed per a the per historically the percentage revenue in achieving business C&I to made than to the half with the of higher the winter quarter first. second the first, of salt ton,

our the sales on offsetting more revenue resulting impact higher volumes to weak price. had quarter, for plant an than sales nutrition Grower Turning purchasing adverse segment. behavior in

XX% Specifically, deflation dynamics drought significant across there volumes. believe driven play declined two in to XX% primary here, by revenue $XX.X million, and in served decline sales were markets. our We conditions

early In highs buyers the continue experience, fertilizer the Regarding the purchases during over deflation, that during expectation we time was during appear the would come past not quarter. deflationary dynamic have displaying year. defer quarter, long the our environments, down the uncommon as wait from seen real to recent season, possible or to as to to in more especially prices on application it's customers and less, characteristics, in buy, play believe for purchasing this we

during are drought volume, to this soil. efficiently quarter. the farmers as our product second apply they when Regarding major purchases moisture SOP defer speaking, to lower coast, markets there exceptionally is weather which the the driver of our west deliver We premium experienced believe for on the conditions, SOP into broadly to dry want typically sufficient caused available fertilizer

sales fleet EBITDA ton XX% primarily fewer higher operating a environment rates Distribution due and fuel to volumes costs year-over-year up rail year-over-year absorb Similarly, due to increased on costs basis costs. to at and up inflationary ton. XX% which per came year. were despite fixed $XX.X pricing, profitability perspective, From $XXX to lower a on year-over-year, last plant over the nutrition rose costs XX% strong volumes product million, roughly in higher X% sales per the

during of the the In Koch to terms event announced X earmarked first development. of the cash funding of million Trading most of by of the years proceeds quarter was flow, net $XXX million related net investment fees. the Phase towards approximately closing of We’ve & our spending previously lithium $XXX two notable Minerals

debt the profile by to debt $XXX net by declining cash Additionally, our million. this reflected of on reduce and of sheet, XX% meaningful allowed transaction leverage us both improve which amount to as a balance puts approximately

at with providing $XXX beginning high each from potential winter year, year. range On call, now for to we're of weather of our projected earnings EBITDA with low a that a the EBITDA scenarios consider million range earnings Instead, Turning approach our for the guidance normal various of from rest winter outlook profitability providing with $XXX that a outcomes in weather salt. modified of salt assuming ratios a remains million range the and experience segment beginning we in in the in last shown shared shifting core salt, event of to sales away to events between. mild unchanged. line The million $XXX a the our snow middle historical the in $XXX winter event range long range of we a levels to markets for winter, between strong trends. of and and commitment reflected in million the event With to

of commitment and markets, Milwaukee, levels. the shifting quarter perspective, sales drag midpoint were indicated translating four EBITDA in core have was But below We January, certain EBITDA. From a commitments, in earlier. we US average. relate we volume However, volume, core Detroit, below and in is to results which to as year, had XX into come our into for in below a sales XXXX first trend, profitability aggregate, revenue of now snow versus volume with more core where factors markets, in our decent I the XX to ratios and midpoint across range disproportionate the the book costs. north year Chicago an wise, normalized events our in likely the of The months markets weather are the line believe

with deicing salt period internally while generally Furthermore, storms the snow a period. the events time earlier are what Snow over pointing of Buffalo Furthermore, accumulations number average XX area this weather those out we impactful into quality the winter in longer by events, tracked considered that events. for of It's the been have as events snow lower actually worth as when however, spaced describe season the can as a quality application. weather. periods hit has example of of was not that high to series out, cold this compared are by would An discourage short warm that clustered surrounded year events snow surrounded season. are lower same events

by this far that weather. the relatively season, warmer events So we've snow have followed experienced been

XXXX the the somewhat relatively in As we we weather year's salt events, within wise, overall. outsized the to range. for trending US trends, power at But where year-to-date contributing have are markets season earnings lower to-date, this been normal. aggregate the look commitments, as midpoint snow have would characterize we deicing These snow quality of events particularly below

pipeline XXXX and below the due natural experienced slightly related of in We supply to year-to-date. Extremely to XXXX our gas the from regional demand weather the regional dynamics Ogden region. a gas levels. higher low cost higher trends have also surge stabilized We’ve range see Prices now drove in midpoint draining producers, demand serving already in impacting salt the cold energy costs facility. the inventory trending

While effective the gas costs, historically rendered the in dynamic ineffective. for hedges our natural highly program been Ogden play reducing has of volatility hedging temporarily in our

since to the a our have protect us similar presents the recalibrated itself in We in episode hedges event future.

outlook wider from lower perspective year Plant is Nutrition full and for guidance. an versus prior our EBITDA Our

prior outcomes as of view current to our million visibility heading should of of than lower range interpret to widening million Investors million EBITDA this we profitability the Our and from to reflecting higher uncertainty $XX year. compared into $XX ranges $XX million. had $XX

production we the business, several The Given The this pricing inform range. price and well gas experienced markets half we a second for a agility in cost the range this current the preparing of roughly where approaching MOP will scenarios quarters for midpoint uncertain Ogden for average scenario in balance developed Cost simultaneously five volume reflects second earlier. we half and SOP MOP year scenario where near this below year global year reality, higher to of described half in and on rising natural in XX these while per back for supply lines, fiscal the prospect second business. declines resulting wise, dynamics, than end the the range levels scenarios the reflects of year cost near fluid I then levels, can the what average in volumes backdrop, due each lower of part to average our are in reverse while controlling plant to of trends themselves this higher bounce to focus our tracking segment, pricing due we range The the this average at demand five the a nutrition Against the the unit increase the pricing of reflects be of and are end volumes for year. same of while maintaining western three expected control. bottoming SOP tracks XXXX. quickly, the pricing

produces profitability pond the there salt, mag impact salt and SOP chloride. both evaporation businesses. in and Utah plant production the Therefore, complex solar higher of nutrition Our costs

be spending our lowered the plans CapEx Lithium $XXX our from our line midpoint have by million million of outlook, on prior from range. million In to Notably, to to estimate overall the guidance. we our by recent is to million $XX $XXX with unchanged profitability lowered Turning Koch funded expected million proceeds to at $XXX $XX our transaction. spending the

new million. been $XX of a between lowered $XX $XXX has CapEx by to at million sustaining midpoint million the However, range and

the and far be As as quarter, XX% expect the cadence in very to already pattern one approximately we to status. of mix split thirds Fortress' QPL is the CapEx half. weighted half second of occurring products the of achieving second half Kevin second by sustaining spending while first regarding spending two half, outlined with show CapEx roughly lithium expected positive news third a two

with no we EBITDA result to receiving closely that However, recent but contribution to on base working wise, season. into want on a wildfire are their Fortress upon I this drag to baked We capitalize have assist from their outlook. which success Fortress our fully them year to could this reiterate positive be occur efforts our allocation, their is in prepared first assume Fortress profit

as releases, April, a as to our longer calls. in second we have whereas press as we one January issue year, issued perspective we part reports snow quarter continue no of we but will the reports past first snow today standalone in a will in and provide two one reminder, and earnings as Finally,

With I to it the for will lines Operator? that, Q&A. turn to the open operator back

Operator

CL King. [Operator question Instructions] first David And we from with Silver take will our

David Silver

release June been makeup seen questions commitments are provide hoping not volumes question guess that some couple make term volumes maybe up a heard and It's where sales periods volume I the was in missing and on March unusually to low. haven't there's salt a you I where -- commitment of Great there about regarding in the have has I the business have with the might ratios. the in contracts. to general the too a been bit Lake. But sure something. always and Salt then the press to the past, your like often I of want on quarter maximum little just And follow color I'd comment a I'm minimum But

So talk might to the entire out? play winter about could impacting sales is how of ratios you earlier about how tracking deicing your your season just commentary commitment the

Kevin Crutchfield

Jamie's to handle I maybe around to think suited your sales ratios. probably question best commitment

Jamie Standen

we ratio, to about go time, commitment expect certain out when bid weather history of we average of of over sales we're say to when those percentage talking a and our commitments. all we commitments David, So deliver the

So markets, some in it to tends be lower. our of of northern higher a some our sales southern to can In commitment be ratio. it markets,

So XX% southern and where XX%. have averages be northern less can so markets, snowfall, lower that some less average can it are you be in XX% can or in markets there's activity,

we when so toward how we're to more about. commit historical sales about we're ratio, tracking that's talking what our And talk

XX than this commitments been quality sales our while in winter of to weather the actual average historical so snow because far and on season, cities was events have and thus the of lower So the the right events of the average. some

upper this at Northern when eastern some help? when markets, thus than sales Superior the to and southern Does portions it's experienced lower look that seen Miss in western In So We've the been southern actually up in of seen of far strong a snow portions season. and it network. Michigan, varies you sales you the to the the also of at on across north They've Lake our eastern strong. commitments look upper and lot commitments Peninsula our Michigan, Ohio. Minnesota. of area, quite Illinois markets they've actually But historical

David Silver

Yes, I think so.

of how band and lower kind that and out… within -- lower there it volume where So, that plays and it's band, the band band upper commitments upper to and falls

Kevin Crutchfield

and just separate purely this how or But concept, basis. historical are really we about and the to below explain maximums minimums a above is from trying from talk

David Silver

other maybe business. And the question salt deicing this one versus contract But for then do spot pricing probably has with Jamie. for to

So event let's number during very the contract past say. pricing you in kind quality flexibility, type seasons, or snowfall some volumes given has heavy high the of call supplement or to the the ability snow

sales, cost might priced the typical contractual to if fair going volumes question the commitment With volatile above they a your price is spot fall to the below, -- the are that what fall could however or price are for you situation, spot delivered volumes be maybe your it like spot incremental expectations active contract is? -- the ask

Jamie Standen

Given them or because gotten contracts, under to delivering thus your robust, contracts, under prices we into our point. should expect deliver outsold the once been -- circumstances you because you fully our commitments come haven't that fully hasn't spot far, winter after

commitments So customers, see that improvement we is negotiations in winter well drive bidding have state annually. do negotiations, this the commitments to What or continues price you'll as our which in activity, in our haven't were summer, as XX% weather season the unfold our well and bid that we've as able bid we we as commercial which inflationary through actions, that. really both we process commercial to embedded to last achieve, seen as done includes municipality through both commercial pricing contractual though captured recaptured pressures

Kevin Crutchfield

that your perspective. a initial that or of from upper -- winter through a the mean, well. you would me of a committed having a comments be where imply And typically that is Jamie's I winter you're to in arrangement, could to tough a bit Let from contract season good XXX% spot you pretty fully of level, sold end which thus, add to as extent color little prices expect the price. of our the experienced excess you

I of, is it price. next to would would earn be absorption think margin that be it your on fixed under ton those, cost would market that, to And already it's the to what powerful ability exceed speculative. think, think, and than given say above that easy for would safe that more value just scenario. to stand much that it’s contract contract it I taken incrementals, care fair reason But I say or

David Silver

color. when color. the general you to for volatile it question Last question more it's you But this the the -- Salt strong. a I the that usually, cost cost thinking bit the was just snowfall a of is kind Great quite question. elements. for And of related Thank agree, be Lake. about kind Really thank time I all would of a little

involving in order So of into a Governor time an Great is tapping to I the high if management of you a the might seems just more parts Lake. maybe from a take limited could the Great things, maybe And Compass what sketch Salt is out am executive that? Salt issued perspective kind scenario of was there Lake? of best I the of Utah strokes your But case direct just what couple recently worst base if involving on national you to mind, here. but a be wondering headlines. priority be little and to the heights bit case, minutes I issue water broad of and and Governor know the case And But other wouldn't what the complicated berm for Minerals’

Kevin Crutchfield

We plan. use ultimately as any government Thanks relates we And order up. in Governor's it the executive become to come order. agencies and you what the to wouldn't would surprise with that Utah obviously the will berm along it the as probably executive for bringing worked that closely have management

berm as proactively and out an it both with and been have plan. relates DNR the this XX management the operator working there to active years DEQ for We

the berm So point until number gets kind yet questions put unanswered plan is again, it decided place. that's one, of in upon management

referenced over snow order rainfall the of height average. expect minimis operations that running function is of executive the right term experienced I that's of and in pack now, to And above is the XXXX, above in last a we’ve make on largely few the a there berm second out would based what the short we that have Governor kind temporary our we impact point a additionally, The on raising months. his know average de

very So spring expect efficient a we would runoff.

two. of happen our kind a to XXXX. certainly relates some company, up all interest third which interests in impact don't action, to legal that's as and out the regard that background. that in have authorities closely de to And have Thank of will certainly Utah Great of Lake, you work to management any that gives this I'd very our public the development with rights protect will valuable. we We We plan. as certainly point hope regulatory that you and berm for and Salt wouldn't So predict if in that question. stakeholders that happen. continue including is expect we we very then it the are minimis make point necessary. that rights water that the of doesn't in to reserve mineral expected out Hopefully we But But pursuit

Operator

take Begleiter will David our from with next Bank. We Deutsche question

David Begleiter

the full quarter, deicing on just in I up you Why it pricing below guess, Kevin, the the XX%. for year? XX% was highway in have, contracted

Kevin Crutchfield

function could Jamie I a little of part just maybe timing… think, color. that is But of I a think add

Jamie Standen

across outcome. in Yes, or There's I'll entire weaker that itself weather weather manifest the our a price analyze will we bid from jump in season, happens higher stronger or season portfolio. that average complete have a bid here, expected as customer region lower the always we we prices When Kevin. mix. pricing If prices our to get variance

David Begleiter

the below the end below forecast. to there a given bottom salt term the be EBITDA in long and Is you've of a potential the range winter to given below winter half, the and are we of midpoint the range, guidance EBITDA that for articulated? -- guess and on close where for I today just this but And mild

Kevin Crutchfield

terms bell the no winter and normal it reason date, January us. XXX. that commitment there's Jamie David, that due balance winter to dynamic based for would believe always today, the a sales The midpoint, be is for is referenced, winter like that of shared to February the we to on of And will in that March. curve, below we us say So the believe to be I before which say I is won't through

fall depends could to right than side page the so anything… that how well closer of winter transpires. just the It left. And on very we the Jamie,

Jamie Standen

That's season, that I'm it right. even it seems seems And a but of got like indication XX little that delayed, history into projecting going and seasons exactly April. the weeks strong events of sometimes as and We've a winter if is March are be it's remaining like, progress to any well left. part XX, not

would which winter will weeks that say XX, that fall XX I we of bell curve, got drive So we've David. on left, where

Operator

take Joel We’ll Jackson our next Instructions] with [Operator BMO. from question

Unidentified Analyst

for Joseph Joel. is on This

And to what what is fiscal in also, would've a still of this reasonable XXXX? terms low million to and negative be contribution going the would first, ends of range? for Just EBITDA happen Fortress, fiscal to contribution like high XXXX $X for look reach that a and range

Kevin Crutchfield

this the of which allocation. And its when to the timing of improves heading case in. on first a $X million base is receives is of the our that year function Fortress into As that order of magnitude base we've extent baked what got

see drag, wildfire we're to happens then of And the side so that extent and to say, diminish. able execute could you that would the I this that season

that As and go future, you to range. I overall think in pool back we here think is $XXX profit about $XX million the the million say,

as can it on a this our our so implications is and objective that do get XX%, is whether the to of much math market, And it’d which the very EBITDA, pretty portion be you substantial substantial. on XX%, of as -- XX%,

and of speculate success, won't significant. allocations about prize we so is our the And size base but pretty the

Unidentified Analyst

explain then you could year look for please just XXXX? tax rate what on also the a this and would tax rate what's And going normalized with like higher

Kevin Crutchfield

So in profitability our of being earnings terms is And our really tax taxes, rate mix. that's result higher despite a lower. of our

losses lot to guidance project very that a deduction. of the take occurs States our we're of those won't which States, down our in where we What If you rates. United we'll think lot of nutrition, salt United have we today or really profitability a plant tax taking And as taking is not in outlook be our in and a that higher as losses largely the where able result, happens we're that much. today, some profitability have about Canada down we a

and numerator And so that's is profitability down. the why going despite the there sticky

basis, I on is would from perspective range a perspective, flow use cash so And a XX% a normalized to tax in normalized a on cash a from basis. number good say something that

Unidentified Analyst

if more I one then And can.

in assets, to and lithium bit stakes payment current GM US and pay and equity pursue is its process MOUs company upfront proven that the out need reassess could DLE want the upfront does little or a of to be before to more capital? some pre terms seeing now Just willing does that Compass make

Lorin Crenshaw

missed question. that mind repeating Would of the it? you I first very part

Unidentified Analyst

US seeing prepayments for proven pay or want to that make just to GM equity MOUs upfront reassess current out So need now bit lithium does be a more? assets, to its just is in Compass stakes little the does willing that and DLE process

Lorin Crenshaw

news, I'll relates one to around how North willing brands mean, check write testament a that testament the size. open future. a that's want compelling to I certainly our, think But I as quite people in sourced of just think it American car a in take mean, the is And various iconic to the much the agreements. I lithium is I bottom that structures. line it's and investment we're to US of that it's

are I that's the continue car that profit the We the with But to room, in next they're would in Ryan? agreements Would bag working we're one in with they agreements resolved that add additional the another iconic think But hope we few we structured and could you that'll that LGES have already anything Ryan the for are with pleased and create want the we've way on, brand in and the future. in think the us that potential and talked have one to that, to color. I some pool Chris the here add weeks. our to prosecute and about, second US,

Ryan Bartlett

a Joseph. Yes, little I can add to bit, that just

we agreement as to Compass. isn't arrangement for before, So perhaps scale I as the -- investor think table believe project may potential technology of higher cost iterated us opposed in has DLE. DLE perceive offtake for due the capital necessarily But that giving do us a to attractive, commercial the to we it's when off gives this offtake more the important with which type say, unit, of Lauren out risk prepaid prove let's of think that upfront

any So engage But make prudent as hit in we feel to we're milestones form we open before it's offtake. said, for next Kevin the prepaid -- to the a arrangement. of would us

Operator

And our from we with Stifel. Anderson next Vincent take will question

Vincent Anderson

confidence XX% think level across other to of is like of your wanted very the we a get if wide reset So was for you on regardless to, I reagents just of confidence your if stage it design, modeling absorbent But the kind minus mandated to confidence relative those able able just parts to FEL-X we had FEL-X just or simply the look as and versus of kind Are like in maybe you're ready of I to just everything. speak the at what ranges, might have engineering The things to polymers. FEL-X. were bit range the values be? reality and or plus that if

Kevin Crutchfield

to ask address to going Chris I'm Vincent. that,

Chris Yandell

you are So the The kind to of of was XX% a middle And range. FEL-X a It wide correct. a plus you minus had $XXX was that million. if XX%. recall range

CapEx. the kind and process, what at the is question OpEx. answers if FEL-X projects XX%, is engineering with So from around Part $XXX of overall do at you as of look increase plus the you regards of that to see FEL-X. aspect to around just you the that well the an that's get an Typically, somewhere refining million and

looking FEL-X, X% you of engineering X%, the reagents. in are utilization are So around at and you

in unit in care more should things FEL-X, take get you defined, process to through progress to and to that As product of you do equipment an you to you find specifications that have you put that. and have

So more little expect that probably would overall same, the a stays reagent of inflationary expect we cost about the to ton also we per maybe FEL-X. aspects, to impact which due the bit

timeframe. FEL-X I think recall, done that early was XXXX if you the in

your the inflationary not which answer estimate, that And so of FEL-X. did manifest Does in hit year full in that cost we to expect question, aspects Vincent? the

Vincent Anderson

what maybe more utilization specifically is from bit a unit to costs. I on at getting the I when a was volume little guess comes it perspective,

CapEx like use, is down report? is sounds there to there engineering what the Speakers] and to from on that very wait -- something creep it just have a FEL-X But bit similar do is see FEL-X. or little of we’ll they find much reagent the it to mentioned around You for [Multiple the maybe you

Chris Yandell

probably not see is would different the we to to what wait is, field. utilization, different I But I what say better what expect announced than a materially think that we in it's report. for but

Vincent Anderson

they I over just there if influence? the between that area adoption And whole have in over talk product tankers one concerns that products about to product process, influence here revenues we could of bit time fire of thinking closer kind earnings. you suppression, you are was of other? amounts now Is a we're kind just they are or if change used getting or trace the consternations of Perimeter’s the to and then on hoping or relevance speak had Can with the the what in their mixing your about your product Fortress, could a of gray

Jamie Standen

testing. passed going comingling you with is one used to mention the from an base and around using issues. product, how to what are having when products Perimeter’s would perhaps you're tank, there rinse flying aircraft that's prevent another the any product have referring standard colors, how corrosion to to any So I after to have be our first like Fortress protocols

comingling, with So residue that's a a you up some end non-issue. some have When you tank. in

So process it's a and simply reload. rinse a

tankers very into bases competitor basis. Fortress So by very, it coming and competitor issue. into coming think manageable operations as tankers base view We an for we it's don't

very so And we've all and the should passed manageable. issue. we're on it tests, QPL not be the an So

Operator

Monness with [Operator Shaw Crespi. Chris take our Instructions] from And we will next question

Chris Shaw

I'm higher in costs production the gas just trying figure nat to out Ogden. the

it full into production made that the costs now, it I understand, maybe it for going continue higher misunderstood up is quarter, like I You’ve that's or impacted obviously to it just kind sound And -- the seemed that's -- in didn't of are those completely? but something over there the that is factored for know both like year spike that the or creeping of that year. kind I guidance but through production to it is was lower is going segments else

Jamie Standen

through the us because regarding that turns. commentary I episode, expect we of skewed products protection. you'll businesses. it it's that as natural both cost in for asset would as inventory plant nutrition dynamic, have as costs inventory XX% flow our our episode business sold. but us we was say of nutrition terms also provider is with that and business, is flow through to temporary produces And that as towards behind gas probably you'll good hedges but our now benefit both see C&I will relatively plant see No, well that a sort our Ogden our And

Chris Shaw

And January. thought then and in when like the that like the seems salt, Montreal heavy highway might salt. -- what -- was was Are looking some I in it was Or had longer those issue snows remember at I might -- record term there? they the particularly levels commitment and snow I had both like It of smaller data have think have markets deicing sales you for or Toronto that some areas a Montreal in nowadays, I in contracts. past,

we're So that have Canada's it think, that their be, pricing you seeing snow where want getting? from impact to the I would not an caught not maybe is why to up

Kevin Crutchfield

say, it's year a average, weather. has snow, has in below strong that's where area pretty actually little an would Quebec, been No, bit In typically to been I average. Ontario, date, been,

of in You've across for noted But the look There of mix that good. particularly of was were weather weeks at it. it entire January the sure. and portfolio to you couple all have good a

the said, going volatility. some that's So Like I always western Ohio, to particularly date the even southern generally, was cause to Mississippi it in River. the -- year along Tennessee strong the

normal. than weather have southern had So our markets more bit a

in sales with average And general, so those right kind bit is pretty sales Ontario commitments. commitments a close are little on average, below higher. of to Canada,

Chris Shaw

just to Fortress for a then sec And also. turning

to market's Is chloride, I You market profit selling could mag mag you XXX. know the selling chloride, from potential customers? be does another sell characterized will do the redirecting them. to profit from -- you're the include there, profits sort you whole what of that you'll be including -- there market you including get the or Is that chloride XX of that the or estimate mag selling or it not would more more just

Kevin Crutchfield

to it competitor's talking mag pool, I profit would read And et Ogden, a at too so don't that. want much No, into chloride incremental about to cetera. or the we supplemental margins, have you be capacity because you're

would the be So cost don't that competitors. structure our as imply our same

of pool margins of scope relative pretty just But look price expect when size to we structure we're gallons our well. provide the our cost be would sort is. of in revenues, healthy as So of what our the you profit and competitors, terms at profit to to trying think a the I

Chris Shaw

volumes Just to specifically you the is selling know of mag to that if of mean, now? about what don't a you half I market, relative sell you're the amount mag the chloride what get are. like sort I significant were though, chloride

Kevin Crutchfield

market at at currently half, less XX% of we share, chloride mean, that if to represents were were mag achieve Ogden. than the produced half it I

kind difficult not to for to incremental that it's able capacity. So us be handle

Operator

no at And questions there time. this are further

closing or will call Crutchfield the now I turn additional to So remarks. Kevin Mr. for back any

Kevin Crutchfield

questions. We in you so Minerals. Brent look updated, We in forward interest to please appreciate much and don't have out reach hesitate to everyone's attending the Compass Thank to you interim you keeping if for today.

Operator

conference and participation. and gentlemen, And you ladies today's we for call, this concludes your thank

now You may disconnect.

Compass Minerals International (CMP) 8 Feb 232023 Q1 Earnings call transcript