þ
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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36-3972986
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification Number)
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Large accelerated filer
R
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Accelerated filer
o
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Non-accelerated filer
o
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Smaller reporting company
o
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Page
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PART I. FINANCIAL INFORMATION
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Item 1.
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2
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3
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4
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5
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6
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7
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Item 2.
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17
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Item 3.
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25
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Item 4.
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25
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PART II. OTHER INFORMATION
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Item 1.
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25
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Item 1A.
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25
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Item 2.
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25
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Item 3.
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25
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Item 4.
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25
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Item 5.
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25
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Item 6.
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26
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27
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(Unaudited)
March 31,
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December 31,
|
|||||||
2013
|
2012
|
|||||||
ASSETS
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$ | 175.5 | $ | 100.1 | ||||
Receivables, less allowance for doubtful accounts of $1.5 in 2013 and $2.4 in 2012
|
149.3 | 143.7 | ||||||
Inventories
|
135.0 | 229.7 | ||||||
Deferred income taxes, net
|
7.5 | 7.4 | ||||||
Other
|
16.8 | 26.0 | ||||||
Total current assets
|
484.1 | 506.9 | ||||||
Property, plant and equipment, net
|
656.0 | 645.2 | ||||||
Intangible assets, net
|
73.5 | 74.7 | ||||||
Other
|
76.3 | 73.8 | ||||||
Total assets
|
$ | 1,289.9 | $ | 1,300.6 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
||||||||
Current liabilities:
|
||||||||
Current portion of long-term debt
|
$ | 3.9 | $ | 3.9 | ||||
Accounts payable
|
55.3 | 85.4 | ||||||
Accrued expenses
|
89.2 | 87.8 | ||||||
Accrued salaries and wages
|
17.0 | 20.1 | ||||||
Income taxes payable
|
3.1 | 1.0 | ||||||
Accrued interest
|
3.1 | 1.1 | ||||||
Total current liabilities
|
171.6 | 199.3 | ||||||
Long-term debt, net of current portion
|
477.4 | 478.4 | ||||||
Deferred income taxes, net
|
78.3 | 77.9 | ||||||
Other noncurrent liabilities
|
41.5 | 41.5 | ||||||
Commitments and contingencies (Note 9)
|
||||||||
Stockholders' equity:
|
||||||||
Common stock: $0.01 par value, 200,000,000 authorized shares; 35,367,264 issued shares
|
0.4 | 0.4 | ||||||
Additional paid-in capital
|
56.3 | 54.5 | ||||||
Treasury stock, at cost — 2,061,035 shares at March 31, 2013 and 2,094,774 shares at December 31, 2012
|
(3.9 | ) | (4.0 | ) | ||||
Retained earnings
|
423.1 | 395.0 | ||||||
Accumulated other comprehensive income
|
45.2 | 57.6 | ||||||
Total stockholders' equity
|
521.1 | 503.5 | ||||||
Total liabilities and stockholders' equity
|
$ | 1,289.9 | $ | 1,300.6 |
Three Months Ended
|
||||||||
March 31,
|
||||||||
2013
|
2012
|
|||||||
Sales
|
$ | 383.7 | $ | 315.3 | ||||
Shipping and handling cost
|
115.3 | 93.5 | ||||||
Product cost
|
177.1 | 139.0 | ||||||
Gross profit
|
91.3 | 82.8 | ||||||
Selling, general and administrative expenses
|
23.8 | 21.4 | ||||||
Operating earnings
|
67.5 | 61.4 | ||||||
Other (income) expense:
|
||||||||
Interest expense
|
4.4 | 5.0 | ||||||
Other, net
|
(0.4 | ) | 1.6 | |||||
Earnings before income taxes
|
63.5 | 54.8 | ||||||
Income tax expense
|
17.1 | 14.9 | ||||||
Net earnings
|
$ | 46.4 | $ | 39.9 | ||||
Basic net earnings per common share
|
$ | 1.38 | $ | 1.19 | ||||
Diluted net earnings per common share
|
$ | 1.38 | $ | 1.19 | ||||
Weighted-average common shares outstanding (in thousands):
|
||||||||
Basic
|
33,282 | 33,035 | ||||||
Diluted
|
33,309 | 33,058 | ||||||
Cash dividends per share
|
$ | 0.545 | $ | 0.495 |
Three Months Ended
|
||||||||
March 31,
|
||||||||
2013
|
2012
|
|||||||
Net earnings
|
$ | 46.4 | $ | 39.9 | ||||
Other comprehensive income:
|
||||||||
Unrealized gain (loss) from change in pension obligation, net of tax of $(0.1) and $(0.0) in 2013 and 2012
|
0.3 | 0.2 | ||||||
Unrealized gain (loss) on cash flow hedges, net of tax of $(0.4) and $0.1 in 2013 and 2012
|
0.7 | (0.1 | ) | |||||
Cumulative translation adjustment
|
(13.4 | ) | 17.5 | |||||
Comprehensive income
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$ | 34.0 | $ | 57.5 |
Accumulated
|
||||||||||||||||||||||||
Additional
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Other
|
|||||||||||||||||||||||
Common
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Paid-In
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Treasury
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Retained
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Comprehensive
|
||||||||||||||||||||
Stock
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Capital
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Stock
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Earnings
|
Income
|
Total
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|||||||||||||||||||
Balance, December 31, 2012
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$ | 0.4 | $ | 54.5 | $ | (4.0 | ) | $ | 395.0 | $ | 57.6 | $ | 503.5 | |||||||||||
Dividends on common stock
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(18.3 | ) | (18.3 | ) | ||||||||||||||||||||
Shares issued for stock units
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(0.1 | ) | 0.1 | - | ||||||||||||||||||||
Stock options exercised
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0.3 | 0.3 | ||||||||||||||||||||||
Income tax benefits from equity awards
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0.1 | 0.1 | ||||||||||||||||||||||
Stock-based compensation
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1.5 | 1.5 | ||||||||||||||||||||||
Comprehensive income (loss)
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46.4 | (12.4 | ) | 34.0 | ||||||||||||||||||||
Balance, March 31, 2013
|
$ | 0.4 | $ | 56.3 | $ | (3.9 | ) | $ | 423.1 | $ | 45.2 | $ | 521.1 |
Three Months Ended
|
||||||||
March 31,
|
||||||||
2013
|
2012
|
|||||||
Cash flows from operating activities:
|
||||||||
Net earnings
|
$ | 46.4 | $ | 39.9 | ||||
Adjustments to reconcile net earnings to net cash flows provided by operating activities:
|
||||||||
Depreciation, depletion and amortization
|
17.3 | 15.7 | ||||||
Finance fee amortization
|
0.3 | 0.4 | ||||||
Stock-based compensation
|
1.5 | 1.7 | ||||||
Deferred income taxes
|
0.6 | 0.3 | ||||||
Other, net
|
0.5 | 0.4 | ||||||
Insurance advances for operating purposes, Goderich tornado
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2.4 | 19.1 | ||||||
Changes in operating assets and liabilities:
|
||||||||
Receivables
|
(8.2 | ) | 43.1 | |||||
Inventories
|
93.0 | 22.1 | ||||||
Other assets
|
5.8 | (3.3 | ) | |||||
Accounts payable and accrued expenses
|
(31.3 | ) | (42.8 | ) | ||||
Other liabilities
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0.5 | 0.3 | ||||||
Net cash provided by operating activities
|
128.8 | 96.9 | ||||||
Cash flows from investing activities:
|
||||||||
Capital expenditures
|
(36.5 | ) | (30.0 | ) | ||||
Insurance advances for investment purposes, Goderich tornado
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4.3 | - | ||||||
Other, net
|
0.8 | (0.3 | ) | |||||
Net cash used in investing activities
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(31.4 | ) | (30.3 | ) | ||||
Cash flows from financing activities:
|
||||||||
Principal payments on long-term debt
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(1.0 | ) | (1.0 | ) | ||||
Dividends paid
|
(18.3 | ) | (16.6 | ) | ||||
Proceeds received from stock option exercises
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0.3 | 0.1 | ||||||
Excess tax benefits from equity compensation awards
|
0.1 | 0.3 | ||||||
Net cash used in financing activities
|
(18.9 | ) | (17.2 | ) | ||||
Effect of exchange rate changes on cash and cash equivalents
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(3.1 | ) | 3.9 | |||||
Net change in cash and cash equivalents
|
75.4 | 53.3 | ||||||
Cash and cash equivalents, beginning of the year
|
100.1 | 130.3 | ||||||
Cash and cash equivalents, end of period
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$ | 175.5 | $ | 183.6 | ||||
Supplemental cash flow information:
|
||||||||
Interest paid, net of amounts capitalized
|
$ | 2.3 | $ | 2.8 | ||||
Income taxes paid, net of refunds
|
$ | 6.7 | $ | 15.9 |
For the Three Months Ended
|
||||||||
March 31, 2013
|
March 31, 2012
|
|||||||
Product cost:
|
||||||||
Property, plant and equipment impairment charges
|
$ | 0.2 | $ | - | ||||
Site clean-up and restoration costs
|
0.6 | 5.9 | ||||||
Estimated insurance recoveries recognized
|
(0.8 | ) | (5.9 | ) | ||||
Net impact on product cost excluding business interruption
|
$ | - | $ | - |
March 31,
|
December 31,
|
|||||||
2013
|
2012
|
|||||||
Finished goods
|
$ | 91.9 | $ | 185.6 | ||||
Raw materials and supplies
|
43.1 | 44.1 | ||||||
Total inventories
|
$ | 135.0 | $ | 229.7 |
March 31,
|
December 31,
|
|||||||
2013
|
2012
|
|||||||
Land, buildings and structures and leasehold improvements
|
$ | 308.1 | $ | 309.0 | ||||
Machinery and equipment
|
588.2 | 596.5 | ||||||
Office furniture and equipment
|
20.7 | 20.8 | ||||||
Mineral interests
|
182.0 | 184.4 | ||||||
Construction in progress
|
131.4 | 103.0 | ||||||
1,230.4 | 1,213.7 | |||||||
Less accumulated depreciation and depletion
|
(574.4 | ) | (568.5 | ) | ||||
Property, plant and equipment, net
|
$ | 656.0 | $ | 645.2 |
March 31,
|
December 31,
|
|||||||
2013
|
2012
|
|||||||
Term Loan due May 2017
|
$ | 383.1 | $ | 384.1 | ||||
Revolving Credit Facility due October 2015
|
- | - | ||||||
8% Senior Notes due June 2019
|
98.2 | 98.2 | ||||||
481.3 | 482.3 | |||||||
Less current portion
|
(3.9 | ) | (3.9 | ) | ||||
Long-term debt
|
$ | 477.4 | $ | 478.4 |
Three Months Ended
|
||||||||
March 31,
|
||||||||
2013
|
2012
|
|||||||
Interest cost on projected benefit obligation
|
$ | 0.8 | $ | 0.7 | ||||
Expected return on plan assets
|
(0.7 | ) | (0.7 | ) | ||||
Net amortization
|
0.4 | 0.2 | ||||||
Net pension expense
|
$ | 0.5 | $ | 0.2 |
Three Months Ended March 31, 2013
|
||||||||||||||||
Specialty
|
Corporate
|
|||||||||||||||
Salt
|
Fertilizer
|
and Other
(a)
|
Total
|
|||||||||||||
Sales to external customers
|
$ | 327.5 | $ | 54.0 | $ | 2.2 | $ | 383.7 | ||||||||
Intersegment sales
|
0.2 | 0.2 | (0.4 | ) | - | |||||||||||
Shipping and handling cost
|
109.1 | 6.2 | - | 115.3 | ||||||||||||
Operating earnings (loss)
|
65.4 | 15.4 | (13.3 | ) | 67.5 | |||||||||||
Depreciation, depletion and amortization
|
10.4 | 5.9 | 1.0 | 17.3 | ||||||||||||
Total assets
|
823.9 | 394.7 | 71.3 | 1,289.9 |
Three Months Ended March 31, 2012
|
||||||||||||||||
Specialty
|
Corporate
|
|||||||||||||||
Salt
|
Fertilizer
|
and Other
(a)
|
Total
|
|||||||||||||
Sales to external customers
|
$ | 254.3 | $ | 58.5 | $ | 2.5 | $ | 315.3 | ||||||||
Intersegment sales
|
0.2 | 0.4 | (0.6 | ) | - | |||||||||||
Shipping and handling cost
|
86.0 | 7.5 | - | 93.5 | ||||||||||||
Operating earnings (loss)
|
52.4 | 20.7 | (11.7 | ) | 61.4 | |||||||||||
Depreciation, depletion and amortization
|
9.6 | 5.2 | 0.9 | 15.7 | ||||||||||||
Total assets
|
754.6 | 399.6 | 76.1 | 1,230.3 |
Range
|
||||
Fair value of options granted
|
$ | 13.10 - $23.25 | ||
Exercise price
|
$ | 76.99 | ||
Expected term (years)
|
4-6 | |||
Expected volatility
|
28.8% - 44.0 | % | ||
Dividend yield
|
3.0 | % | ||
Risk-free rate of return
|
0.7% - 1.0 | % |
Stock Options
|
RSUs
|
PSUs
(a)
|
||||||||||||||||||||||
Weighted-average
|
Weighted-average
|
Weighted-average
|
||||||||||||||||||||||
Number
|
exercise price
|
Number
|
fair value
|
Number
|
fair value
|
|||||||||||||||||||
Outstanding at December 31, 2012
|
435,721 | $ | 67.46 | 77,749 | $ | 78.46 | 49,932 | $ | 83.58 | |||||||||||||||
Granted
|
113,814 | 76.99 | 60,867 | 74.97 | 25,373 | 77.75 | ||||||||||||||||||
Exercised
(b)
|
(4,946 | ) | 54.74 | - | - | - | - | |||||||||||||||||
Released from restriction
(b)
|
- | - | (22,452 | ) | 78.51 | (6,341 | ) | 86.51 | ||||||||||||||||
Cancelled/Expired
|
(3,926 | ) | 70.18 | (1,765 | ) | 77.95 | (506 | ) | 83.22 | |||||||||||||||
Outstanding at March 31, 2013
|
540,663 | $ | 69.56 | 114,399 | $ | 76.60 | 68,458 | $ | 81.15 |
(a)
|
PSUs are initially included in the table at the 100% attainment level at their grant date and at that level represent one share per unit. The final performance period for the 2010 PSU grant was completed in 2012. The Company issued 6,341 shares and cancelled 25 PSUs in March 2013 related to the 2010 PSU grant.
|
(b)
|
Common stock issued for exercised options and RSUs and PSUs released from restriction were issued from treasury stock.
|
Gains and
|
||||||||||||||||
(Losses) on
|
Defined
|
|||||||||||||||
Cash Flow
|
Benefit
|
Foreign
|
||||||||||||||
Hedges
|
Pension
|
Currency
|
Total
|
|||||||||||||
Beginning balance
|
$ | (0.7 | ) | $ | (9.6 | ) | $ | 67.9 | $ | 57.6 | ||||||
Other comprehensive income (loss) before reclassifications
(a)
|
0.4 | - | (13.4 | ) | (13.0 | ) | ||||||||||
Amounts reclassified from accumulated other comprehensive income
|
0.3 | 0.3 | - | 0.6 | ||||||||||||
Net current period other comprehensive income
|
0.7 | 0.3 | (13.4 | ) | (12.4 | ) | ||||||||||
Ending balance
|
$ | - | $ | (9.3 | ) | $ | 54.5 | $ | 45.2 |
(a)
|
The Company recorded foreign exchange losses of approximately $(4.9) million in the first quarter of 2013 in accumulated other comprehensive income related to intercompany notes which were deemed to be of long-term investment nature.
|
Amount
|
||||||
Reclassified
|
Line Item Impacted in the | |||||
from AOCI
|
Consolidated Statement of Operations | |||||
Gains and (losses) on cash flow hedges:
|
||||||
Natural gas instruments
|
$ | 0.5 |
Product cost
|
|||
(0.2 | ) |
Income tax expense (benefit)
|
||||
0.3 | ||||||
Amortization of defined benefit pension:
|
||||||
Amortization of loss
|
$ | 0.4 |
Product cost
|
|||
(0.1 | ) |
Income tax expense (benefit)
|
||||
0.3 | ||||||
Total reclassifications, net of income taxes
|
$ | 0.6 |
Asset Derivatives
|
Liability Derivatives
|
|||||||||
Derivatives designated as
hedging instruments
(a)
:
|
Balance Sheet
Location
|
March 31,
2013
|
Balance Sheet
Location
|
March 31,
2013
|
||||||
Commodity contracts
(b)
|
Other current assets
|
$ | 0.6 |
Accrued expenses
|
$ | 0.6 | ||||
Commodity contracts
|
Other assets
|
- |
Other noncurrent liabilities
|
0.1 | ||||||
Total derivatives designated as hedging instruments
|
$ | 0.6 | $ | 0.7 |
(a)
|
As of March 31, 2013, the Company has commodity hedge agreements with three counterparties. The amounts recorded as liabilities are due primarily to one counterparty. The amount recorded as an asset is due primarily from one counterparty.
|
(b)
|
The Company has master netting agreements with its counterparties and accordingly has netted in its consolidated balance sheets approximately $0.2 million of its commodity contracts that are in a receivable position against its contracts in payable positions.
|
Asset Derivatives
|
Liability Derivatives
|
|||||||||
Derivatives designated as
hedging instruments
(a)
:
|
Balance Sheet
Location
|
December 31,
2012
|
Balance Sheet
Location
|
December 31,
2012
|
||||||
Commodity contracts
(b)
|
Other current assets
|
$ | 0.2 |
Accrued expenses
|
$ | 1.2 | ||||
Commodity contracts
|
Other assets
|
- |
Other noncurrent liabilities
|
0.2 | ||||||
Total derivatives designated as hedging instruments
|
$ | 0.2 | $ | 1.4 |
(a)
|
The Company has commodity hedge agreements with three counterparties. Amounts recorded as liabilities for the Company’s commodity contracts are primarily payable to one counterparty. The amount recorded as an asset is due from two counterparties.
|
(b)
|
The Company has master netting agreements with its counterparties and accordingly has netted in its consolidated balance sheets approximately $0.2 million of its commodity contracts that are in a receivable position against its contracts in payable positions.
|
Three Months Ended March 31, 2013
|
|||||||||
Derivatives in Cash
Flow Hedging
Relationships
|
Location of Gain
(Loss) Reclassified
from Accumulated
OCI Into Income
(Effective Portion)
|
Amount of (Gain)
Loss Recognized
in OCI on
Derivative
(Effective Portion)
|
Amount of Gain
(Loss) Reclassified
from Accumulated
OCI Into Income
(Effective Portion)
|
||||||
Commodity contracts
|
Product cost
|
$ | (0.4 | ) | $ | (0.3 | ) | ||
Total
|
$ | (0.4 | ) | $ | (0.3 | ) |
Three Months Ended March 31, 2012
|
|||||||||
Derivatives in Cash
Flow Hedging
Relationships
|
Location of Gain
(Loss) Reclassified
from Accumulated
OCI Into Income
(Effective Portion)
|
Amount of (Gain)
Loss Recognized
in OCI on
Derivative (
Effective Portion)
|
Amount of Gain
(Loss) Reclassified
from Accumulated
OCI Into Income
(Effective Portion)
|
||||||
Commodity contracts
|
Product cost
|
$ | 2.1 | $ | (2.0 | ) | |||
Total
|
$ | 2.1 | $ | (2.0 | ) |
March 31,
2013
|
Level One
|
Level Two
|
Level Three
|
|||||||||||||
Asset Class:
|
||||||||||||||||
Mutual fund investments in a non-qualified savings plan
(a)
|
$ | 6.5 | $ | 6.5 | $ | - | $ | - | ||||||||
Derivatives – natural gas instruments
|
0.4 | - | 0.4 | - | ||||||||||||
Total Assets
|
$ | 6.9 | $ | 6.5 | $ | 0.4 | $ | - | ||||||||
Liability Class:
|
||||||||||||||||
Liabilities related to non-qualified savings plan
|
$ | (6.5 | ) | $ | (6.5 | ) | $ | - | $ | - | ||||||
Derivatives – natural gas instruments
|
(0.5 | ) | - | (0.5 | ) | - | ||||||||||
Total Liabilities
|
$ | (7.0 | ) | $ | (6.5 | ) | $ | (0.5 | ) | $ | - |
(a)
|
Includes mutual fund investments of approximately 15% in the common stock of large-cap U.S. companies, approximately 5% in the common stock of small-cap U.S. companies, approximately 5% in the common stock of international companies, approximately 15% in debt securities of U.S. companies, approximately 20% in short-term investments and approximately 40% in blended funds.
|
December 31,
2012
|
Level One
|
Level Two
|
Level Three
|
|||||||||||||
Asset Class:
|
||||||||||||||||
Mutual fund investments in a non-qualified savings plan
(a)
|
$ | 6.0 | $ | 6.0 | $ | - | $ | - | ||||||||
Total Assets
|
$ | 6.0 | $ | 6.0 | $ | - | $ | - | ||||||||
Liability Class:
|
||||||||||||||||
Liabilities related to non-qualified savings plan
|
$ | (6.0 | ) | $ | (6.0 | ) | $ | - | $ | - | ||||||
Derivatives – natural gas instruments
|
(1.2 | ) | - | (1.2 | ) | - | ||||||||||
Total Liabilities
|
$ | (7.2 | ) | $ | (6.0 | ) | $ | (1.2 | ) | $ | - |
(a)
|
Includes mutual fund investments of approximately 15% in the common stock of large-cap U.S. companies, approximately 5% in the common stock of small-cap U.S. companies, approximately 5% in the common stock of international companies, approximately 20% in debt securities of U.S. companies, approximately 20% in short-term investments and approximately 35% in blended funds.
|
Three months ended
|
||||||||
March 31,
|
||||||||
2013
|
2012
|
|||||||
Numerator:
|
||||||||
Net earnings
|
$ | 46.4 | $ | 39.9 | ||||
Less: net earnings allocated to participating securities
(a)
|
(0.5 | ) | (0.5 | ) | ||||
Net earnings available to common shareholders
|
$ | 45.9 | $ | 39.4 | ||||
Denominator (in thousands):
|
||||||||
Weighted-average common shares outstanding, shares for basic earnings per share
|
33,282 | 33,035 | ||||||
Weighted-average awards outstanding
(b)
|
27 | 23 | ||||||
Shares for diluted earnings per share
|
33,309 | 33,058 | ||||||
Net earnings per common share, basic
|
$ | 1.38 | $ | 1.19 | ||||
Net earnings per common share, diluted
|
$ | 1.38 | $ | 1.19 |
(a)
|
Participating securities include options, PSUs and RSUs that receive non-forfeitable dividends. Net earnings were allocated to participating securities of 322,000 and 430,000 for the three months ended 2013 and 2012, respectively.
|
(b)
|
For the calculation of diluted earnings per share, the Company uses the more dilutive of either the treasury stock method or the two-class method, to determine the weighted average number of outstanding common shares. In addition, the Company had 597,000 and 743,000 weighted-awards outstanding for the three months ended 2013 and 2012, respectively, which were anti-dilutive and therefore not included in the diluted earnings per-share calculation.
|
Three Months Ended
|
||||||||
March 31,
|
||||||||
2013
|
2012
|
|||||||
Salt Sales (in millions)
|
||||||||
Salt sales
|
$ | 327.5 | $ | 254.3 | ||||
Less: salt shipping and handling
|
109.1 | 86.0 | ||||||
Salt product sales
|
$ | 218.4 | $ | 168.3 | ||||
Salt Sales Volumes (thousands of tons)
|
||||||||
Highway deicing
|
4,358 | 3,104 | ||||||
Consumer and industrial
|
535 | 506 | ||||||
Total tons sold
|
4,893 | 3,610 | ||||||
Average Salt Sales Price (per ton)
|
||||||||
Highway deicing
|
$ | 57.31 | $ | 58.32 | ||||
Consumer and industrial
|
145.37 | 144.82 | ||||||
Combined
|
66.93 | 70.44 | ||||||
Specialty Fertilizer ("SOP") Sales (in millions)
|
||||||||
SOP sales
|
$ | 54.0 | $ | 58.5 | ||||
Less: SOP shipping and handling
|
6.2 | 7.5 | ||||||
SOP product sales
|
$ | 47.8 | $ | 51.0 | ||||
SOP Sales Volumes (thousands of tons)
|
88 | 96 | ||||||
SOP Average Price (per ton)
|
$ | 615 | $ | 613 |
Three Months Ended March 31,
|
||||||||
2013
|
2012
|
|||||||
Net earnings
|
$ | 46.4 | $ | 39.9 | ||||
Interest expense
|
4.4 | 5.0 | ||||||
Income tax expense
|
17.1 | 14.9 | ||||||
Depreciation, depletion and amortization
|
17.3 | 15.7 | ||||||
EBITDA
|
85.2 | 75.5 | ||||||
Other non-operating expenses:
|
||||||||
Other (income) expense, net
|
(0.4 | ) | 1.6 | |||||
Adjusted EBITDA
|
$ | 84.8 | $ | 77.1 |
Item 4.
|
Item 1.
|
Item 1A.
|
Item 3.
|
Item 4.
|
Item 5.
|
Item 6.
|
Exhibit
No.
|
Description of Exhibit
|
10.1
|
Employment Agreement between Francis J. Malecha and Compass Minerals International, Inc. dated January 17, 2013 (incorporated herein by reference to Exhibit 10.1 to the Compass Minerals International, Inc. Current Report on Form 8-K dated January 5, 2013)
|
2013 Summary of Executive Cash Compensation and Award Targets Under the Annual Incentive Plan
|
|
Annual Incentive Compensation Plan Summary | |
10.4* | Current Form of Three-Year Performance Stock Unit Award Agreement |
10.5* | Current Form of Non-Qualified Stock Option Award Agreement |
Section 302 Certifications of Francis J. Malecha, President and Chief Executive Officer
|
|
Section 302 Certifications of Rodney L. Underdown, Vice President and Chief Financial Officer
|
|
Certification Pursuant to 18 U.S.C. §1350 of Francis J. Malecha, President and Chief Executive Officer and Rodney L. Underdown, Vice President and Chief Financial Officer
|
|
Mine Safety Disclosures
|
|
101**
|
The following financial statements from the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2013, formatted in Extensive Business Reporting Language (XBRL): (i) consolidated balance sheets, (ii) consolidated statements of operations, (iii) consolidated statements of comprehensive income, (iv) consolidated statement of stockholders’ equity, (v) consolidated statements of cash flows, and (vi) the notes to the consolidated financial statements
|
COMPASS MINERALS INTERNATIONAL, INC.
|
||
Date: April 29, 2013
|
/s/ FRANCIS J. MALECHA
|
|
Francis J. Malecha
|
||
President and Chief Executive Officer
|
||
(Principal Executive Officer)
|
||
Date: April 29, 2013
|
/s/ RODNEY L. UNDERDOWN
|
|
Rodney L. Underdown
|
||
Vice President and Chief Financial Officer
|
||
(Principal Financial and Accounting Officer)
|
Executive Officers
|
Current Salary
|
|
|
Francis Malecha
|
$725,000
|
Rodney Underdown
|
$412,000
|
Gerald Bucan
|
$318,711
|
Keith Clark
|
$364,827
|
David Goadby
|
£211,932*
|
Executive Officers
|
Target Percentage
|
|
|
Francis Malecha
|
100%
|
Rodney Underdown
|
55%
|
Gerald Bucan
|
55%
|
Keith Clark
|
55%
|
David Goadby
|
50%
|
|
·
|
Reward employees for achieving and exceeding individual and CMP objectives.
|
|
·
|
Promote teamwork across Business Units and Functions.
|
|
·
|
Reinforce and motivate participants to fully utilize CMP resources and continual efforts to maximize earnings, cash flow and growth.
|
|
·
|
Establish Safety results as a common, primary multiplier for all AIP awards.
|
|
·
|
AIP awards are dependent upon accomplishment of CMP Corporate and Business Unit goals and objectives. Payments will be based on performance targets established for an incentive period beginning January 1 through December 31 of a particular year.
|
|
·
|
The CEO and Vice President of Human Resources will develop recommendations for the Compensation Committee for the Target Percentage assigned to executive and key participants in the AIP Plan. Each participant's overall incentive award is capped and shall not exceed 200% of base salary.
|
|
·
|
Participants in the AIP are assigned an overall Target Percentage; this is a percent of base salary and the corresponding dollar amount is the participant’s Target Award.
|
|
o
|
Example
: A participant with a base salary of $50,000 and Target Percentage
of 10% would have a Target Award of $5,000
(= 100% of Target)
.
|
|
·
|
Participant’s base salary reported as of December 31 of the performance year, excluding bonuses, special pay and other forms of compensation, will be used to calculate AIP Awards.
|
|
·
|
Overall AIP payments (aggregate) made under this plan require approval of the Compensation Committee.
|
|
·
|
Business-unit Adjusted EBITDA (Adjusted EBITDA is Operating Income plus depreciation and amortization each as applicable to the Business-unit and on a combined basis.)
|
|
·
|
Business-unit Operating Cash Flow (Operating Cash Flow is Adjusted EBITDA less capital spending, with the addition or subtraction of changes in receivables, inventory, accounts payable, accrued expenses and accrued salaries and wages, each as applicable to the Business-unit and on a combined basis.)
|
|
·
|
Business-unit Net Sales Revenue (Net Sales Revenue is sales less shipping and handling cost, each as applicable to the Business-unit and on a combined basis.)
|
|
·
|
Personal Performance Objectives
|
|
·
|
Environmental, Health and Safety (“EHS”) Performance (Incidence rates)
|
CORPORATE PARTICIPANT
|
BUSINESS-UNIT PARTICIPANT
|
|||
50%
|
Combined Weighted Average Adjusted EBITDA
|
25%
25%
|
Combined Weighted Average Adjusted EBITDA
Business-Unit Adjusted EBITDA
|
|
20%
|
Combined Weighted Average Net Operating Cash Flow
|
10%
10%
|
Combined Weighted Average Operating Cash Flow
Business-Unit Operating Cash Flow
|
|
10%
|
Combined Weighted Average Net Sales Revenue
|
5%
5%
|
Combined Weighted Average
Net Sales Revenue
Business-Unit Net Sales Revenue
|
|
20%
|
Personal Performance Objectives
|
20%
|
Personal Performance Objectives
|
|
100%
|
100%
|
|||
+/-10%
|
EHS Multiplier
|
+/-10%
|
EHS Multiplier (Average of Business-unit and Consolidated)
|
PERCENT OF GOAL ACHIEVED
|
PERCENT OF AIP TARGET PAID
|
|
≤ 75%
|
0%
|
|
100%
|
100%
|
|
≥ 125%
|
200% (maximum)
|
Target
Adjusted
EBITDA
|
Target Adjusted
EBITDA /
Combined Business-
Unit
Total
(Weighting)
|
Actual
Adjusted
EBITDA
|
Actual/Target*
(Payout %)
|
(Payout % x
Weighting)
|
||||||||||||||||
Business Unit A
|
$ | 100.0 | 40 | % | $ | 91.4 | 65.6 | % | 26.2 | % | ||||||||||
Business Unit B
|
$ | 50.0 | 20 | % | $ | 46.8 | 74.4 | % | 14.9 | % | ||||||||||
Business Unit C
|
$ | 50.0 | 20 | % | $ | 58.0 | 164.0 | % | 32.8 | % | ||||||||||
Business Unit D
|
$ | 50.0 | 20 | % | $ | 77.0 | 200.0 | % | 40.0 | % | ||||||||||
CMP Total
|
$ | 250.0 | $ | 273.2 | 113.9 | % |
EHS RATING ACHIEVED
|
MULTIPLER APPLIED
|
|
125% of goal
|
0.9
|
|
100% of goal
|
1.0
|
|
75% of goal
|
1.1
|
|
Ø
|
AIP bonus payments are made in the year following the year with respect to which the bonus relates. The actual payment will be made as soon as practical after annual financial statements are available and upon final approval of the Compensation Committee.
|
|
Ø
|
To be eligible to receive an AIP bonus payment, a participant must have been actively employed at the time of any approved pay-out or, if earlier, February 28 of the year following the year with respect to which the payment relates.
|
|
Ø
|
Any participant who terminates employment, voluntarily or involuntarily, prior to the approved pay-out date (or February 28, if earlier) will not receive an AIP bonus payment, except as stipulated below:
|
|
o
|
In the event of normal retirement, disability or death prior to the end of an incentive period, an otherwise eligible participant may receive a pro-rated AIP payment amount, provided an AIP award was approved for the applicable incentive period.
|
|
o
|
In the event of a change in ownership or control resulting in termination of employment prior to end of the incentive period, an otherwise eligible participant may receive a pro-rated AIP payment amount, provided an AIP award was approved for the applicable incentive period.
|
|
Ø
|
An employee hired into a position approved for participation after the beginning of an incentive period may be considered for a pro-rated participation in this plan upon recommendation of the Vice President, Human Resources and CEO.
|
|
Ø
|
AIP bonus payments are paid-out on a one-time basis as a lump-sum, in cash, as such are considered compensation and reportable income for all tax reporting purposes.
|
|
Ø
|
AIP bonus payments are included in total annual earnings and must be counted for the purpose of calculating 401k contributions, profit sharing contributions and other applicable deductions.
|
|
Ø
|
A participant, who is not meeting business objectives or job performance expectations during an incentive period, may be removed from eligibility in the AIP Plan upon approval of the Vice President of Human Resources and the CEO.
|
|
Ø
|
A participant on a Performance Improvement Plan for job performance is not eligible to receive an AIP bonus payment.
|
Name of Grantee: |
Grant Date: |
Number of Shares of Performance Stock Units: |
Name of Optionee: |
Grant Date: |
Number of Option Shares: |
Option Price Per Share: $ |
COMPASS MINERALS INTERNATIONAL, INC.
|
|||
By: | |||
Name: | |||
Title: | |||
OPTIONEE
|
|||
Residence Address
|
|||
1.
|
I have reviewed this quarterly report on Form 10-Q of Compass Minerals International, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: April 29, 2013
|
/s/ FRANCIS J. MALECHA
|
|
Francis J. Malecha
|
||
President and Chief Executive Officer
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Compass Minerals International, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: April 29, 2013
|
/s/ RODNEY L. UNDERDOWN
|
|
Rodney L. Underdown
|
||
Vice President and Chief Financial Officer
|
COMPASS MINERALS INTERNATIONAL, INC.
|
||
April 29, 2013
|
/s/ FRANCIS J. MALECHA
|
|
Francis J. Malecha
|
||
President and Chief Executive Officer
|
||
/s/
RODNEY L. UNDERDOWN
|
||
Rodney L. Underdown
|
||
Vice President and Chief Financial Officer
|
For the Three Months Ended March 31, 2013
|
|||||||||||||||||||||||||||||||||||||||||||
Mine or Operating
Name (MSHA
Identification
Number)
|
Section 104
S&S
Citations
|
Section
104(b)
Orders
|
Section 104(d) Citations and
Orders
|
Section
110(b)(2)
Violations
|
Section
107(a)
Orders
|
Total Dollar
Value of
MSHA Assessments Proposed
|
Total
Number of
Mining
Related
Fatalities
|
Received
Notice of
Pattern of
Violations
Under
Section
104(e)
|
Received
Notice of
Potential
to Have
Pattern
Under
Section
104(e)
|
Legal
Actions
Pending
as of Last
Day of
Period
|
Legal
Actions
Initiated
During
Period
|
Legal
Actions
Resolved
During
Period
|
|||||||||||||||||||||||||||||||
Cote Blanche, LA (16-00358)
|
2 | 0 | 0 | 0 | 0 | $ | 2,168 | 0 |
No
|
No
|
10 | 2 | 7 |