Compass Minerals, Overland Park, Kan., pointed to its Salt segment in reporting a loss from continuing operations of $10.7 million ($0.32 per diluted share) for the third quarter ending June 30, compared to a year-ago loss of $16.4 million ($0.49 per share). Adjusted EBITDA declined to $28.9 million from $33.3 million.
“We achieved third-quarter revenue growth of 8% year over year, enabled by targeted pricing actions across our product portfolio and higher Salt segment sales volumes,” said Kevin S. Crutchfield, Compass President and CEO. “While this represented an improvement in our top-line performance, profitability levels came in significantly below our earnings potential – particularly within our Salt segment – as we continued to be impacted by increased production and distribution unit costs.
“With the North America highway salt bid season well underway, we have successfully begun the process of restoring the Salt segment’s profitability through a value-based strategy aimed at optimizing geography and mix while passing through substantial inflationary costs incurred year to date. We also continue to advance our strategy to expand our essential minerals portfolio into new and attractive, adjacent markets – namely lithium and next-generation fire retardants,” Crutchfield added.
The company had a third-quarter net loss of $7.9 million ($0.23 per share) versus a year-ago net income of $57.1 million ($1.63 per share). Adjusted EBITDA was $32 million, down from $41.8 million. Third-quarter sales were $214.7 million, up from $199.4 million.
Plant Nutrition second-quarter operating earnings were $10.6 million on sales of $55.6 million, up from the year-ago $700,000 and $53.8 million, respectively. EBITDA was $19.4 million, up from $9.8 million. Average fertilizer prices were $827/st on sales volumes of 67,000 st, compared to the year-ago $610/st and 88,000 st, respectively.
Nine-month Plant Nutrition operating earnings were $24.5 million on sales of $164.5 million, up from the year-ago $9.3 million and $185.7 million, respectively. EBITDA was $50.9 million, up from $36.2 million. Average fertilizer prices were $735/st on sales volumes of 224,000 st compared to the year-ago $572/st and 325,000 st, respectively.
The company had a nine-month net loss from continuing operations of $31.8 million ($0.94 per share) on sales of $994.7 million, compared to the year-ago income of $40.2 million ($1.15 per share) and $934.1 million, respectively. Adjusted EBITDA was $152.1 million, down from $207.8 million.
The company reported a net loss of $17.6 million ($0.52 per share) compared to the year-ago loss of $129.2 million ($3.83 per share). Adjusted EBITDA was $171.1 million, down from $252.7 million.
Compass has narrowed its annual guidance for adjusted EBITDA to $175-$195 million from $170-$200 million. It said year-to-date margin compression due to higher costs is expected to continue through the balance of the year in the Salt segment, as the company continues efforts to restore profitability. Plant Nutrition results for the balance of the year are expected to continue to be primarily influenced by production performance and pricing dynamics.
In Plant Nutrition, full-year volumes are expected to be 270-280,000 st, while second-half revenue is projected at $98-$108 million and EBITDA at $37-$43 million.
Full-year Salt volumes are expected to be 12.3-12.6 million st, with second-half revenue at $320-$340 million and EBITDA at $55-$65 million.