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Jun 30, 2022
Compass Minerals Q3 2022 Earnings Report
Reported an 8% year-over-year revenue increase, driven by targeted pricing actions and higher Salt segment sales volumes, but profitability was significantly below potential due to increased production and distribution unit costs.
Key Takeaways
Compass Minerals reported an 8% increase in revenue for Q3 2022, reaching $215 million. This growth was driven by higher Salt segment average price and sales volumes. However, profitability was impacted by increased production and distribution costs, particularly within the Salt segment. The company is focusing on restoring Salt segment profitability through value-based pricing and expanding into new markets like lithium and fire retardants.
Achieved revenue of $215 million, an 8% year-over-year increase.
Increased Plant Nutrition pricing by 36% year over year, and 12% sequentially to $827 per ton.
Reduced Total Case Incident Rate by over half, to a rate of 0.95 for the nine months ended June 30, 2022.
Amended credit facility to provide financial flexibility and bridge the timing gap between the fiscal 2022 inflationary dynamic and the anticipated fiscal 2023 post-bidding season Salt EBITDA margin recovery.
Compass Minerals
Compass Minerals
Compass Minerals Revenue by Segment
Revenue by Segment
Salt Segment Revenue
CapyFin.com Forward Guidance
Compass Minerals narrowed its fiscal 2022 consolidated adjusted EBITDA estimate to a range of $175 million to $195 million. Year-to-date margin compression is expected to continue through the balance of the fiscal year. Plant Nutrition segment financial results for the balance of the fiscal year are expected to continue to be primarily influenced by production performance and pricing dynamics.
Positive Outlook
- Company expects its average contract price for the upcoming winter season to rise by approximately 14%.
- This adjustment results in maintaining guidance at the midpoint, while reflecting a narrower range of expected potential financial outcomes over the balance of the year, with three quarters of the fiscal year having transpired.
- The company continues its efforts to restore segment profitability as part of the ongoing North America highway deicing bidding season.
- Plant Nutrition segment financial results for the balance of the fiscal year are expected to continue to be primarily influenced by production performance
- Plant Nutrition segment financial results for the balance of the fiscal year are expected to continue to be primarily influenced by pricing dynamics.
Challenges Ahead
- Within the Salt segment, year-to-date margin compression due to higher costs compared to the prior-year period is expected to continue through the balance of the fiscal year.
- The company expects an approximate 13% decrease in total committed bid volumes compared to the prior season, depending on how the balance of this bidding season transpires.
- Profitability levels came in significantly below our earnings potential
- Profitability was impacted by increased production and distribution unit costs, particularly within our Salt segment
- Consolidated operating earnings declined $4.4 million