Delaware
|
36-3972986
|
|
(State or other jurisdiction of
|
(I.R.S. Employer
|
|
incorporation or organization) | Identification Number) |
Large accelerated filer
R
|
Accelerated filer
£
|
Non-accelerated filer
£
|
Smaller reporting company
£
|
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
|
Yes:
£
No:
R
|
|
Page
|
PART I. FINANCIAL INFORMATION
|
||
Item 1.
|
||
2
|
||
3
|
||
4
|
||
5
|
||
6
|
||
7
|
||
Item 2.
|
18
|
|
Item 3.
|
26
|
|
Item 4.
|
26
|
|
PART II. OTHER INFORMATION
|
||
Item 1.
|
27
|
|
Item 1A.
|
27
|
|
Item 2.
|
27
|
|
Item 3.
|
27
|
|
Item 4.
|
27
|
|
Item 5.
|
27
|
|
Item 6.
|
27
|
|
28
|
||
29
|
(Unaudited)
June 30,
2015
|
December 31,
2014
|
|||||||
ASSETS
|
||||||||
Current assets:
|
|
|
||||||
Cash and cash equivalents
|
$
|
233.7
|
$
|
266.8
|
||||
Receivables, less allowance for doubtful accounts of $1.5
in 2015 and $1.4 in 2014
|
90.5
|
213.0
|
||||||
Inventories
|
224.3
|
199.0
|
||||||
Deferred income taxes, net
|
6.9
|
9.7
|
||||||
Other
|
15.6
|
14.2
|
||||||
Total current assets
|
571.0
|
702.7
|
||||||
Property, plant and equipment, net
|
736.5
|
700.9
|
||||||
Intangible assets, net
|
98.9
|
106.2
|
||||||
Goodwill
|
64.1
|
68.5
|
||||||
Other
|
59.8
|
58.9
|
||||||
Total assets
|
$
|
1,530.3
|
$
|
1,637.2
|
||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
||||||||
Current liabilities:
|
||||||||
Current portion of long-term debt
|
$
|
3.9
|
$
|
3.9
|
||||
Accounts payable
|
63.6
|
97.6
|
||||||
Accrued expenses
|
46.6
|
60.6
|
||||||
Accrued salaries and wages
|
19.3
|
24.4
|
||||||
Income taxes payable
|
0.8
|
44.4
|
||||||
Accrued interest
|
5.9
|
6.8
|
||||||
Total current liabilities
|
140.1
|
237.7
|
||||||
Long-term debt, net of current portion
|
620.6
|
622.5
|
||||||
Deferred income taxes, net
|
85.5
|
88.9
|
||||||
Other noncurrent liabilities
|
33.3
|
34.5
|
||||||
Commitments and contingencies (Note 7)
|
||||||||
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
|
88.1
|
82.5
|
||||||
Treasury stock, at cost — 1,674,680 shares at June 30, 2015 and 1,757,997 shares at December 31, 2014
|
(3.2
|
)
|
(3.3
|
)
|
||||
Retained earnings
|
618.5
|
589.5
|
||||||
Accumulated other comprehensive loss
|
(53.0
|
)
|
(15.5
|
)
|
||||
Total stockholders' equity
|
650.8
|
653.6
|
||||||
Total liabilities and stockholders' equity
|
$
|
1,530.3
|
$
|
1,637.2
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
|||||||||||||||
2015
|
2014
|
2015
|
2014
|
|||||||||||||
|
|
|
|
|||||||||||||
Sales
|
$
|
183.7
|
$
|
186.6
|
$
|
576.7
|
$
|
608.6
|
||||||||
Shipping and handling cost
|
40.8
|
44.8
|
142.7
|
175.5
|
||||||||||||
Product cost
|
92.3
|
104.3
|
270.2
|
303.3
|
||||||||||||
Gross profit
|
50.6
|
37.5
|
163.8
|
129.8
|
||||||||||||
Selling, general and administrative expenses
|
26.6
|
24.1
|
55.1
|
49.4
|
||||||||||||
Operating earnings
|
24.0
|
13.4
|
108.7
|
80.4
|
||||||||||||
Other (income) expense:
|
||||||||||||||||
Interest expense
|
5.3
|
4.5
|
10.7
|
8.9
|
||||||||||||
Other, net
|
(1.2
|
)
|
7.1
|
(4.7
|
)
|
4.0
|
||||||||||
Earnings before income taxes
|
19.9
|
1.8
|
102.7
|
67.5
|
||||||||||||
Income tax expense
|
6.7
|
2.5
|
28.9
|
18.0
|
||||||||||||
Net earnings (loss)
|
$
|
13.2
|
$
|
(0.7
|
)
|
$
|
73.8
|
$
|
49.5
|
|||||||
Basic net earnings (loss) per common share
|
$
|
0.39
|
$
|
(0.02
|
)
|
$
|
2.18
|
$
|
1.47
|
|||||||
Diluted net earnings (loss) per common share
|
$
|
0.39
|
$
|
(0.02
|
)
|
$
|
2.18
|
$
|
1.47
|
|||||||
Weighted-average common shares outstanding (in thousands):
|
||||||||||||||||
Basic
|
33,682
|
33,549
|
33,654
|
33,526
|
||||||||||||
Diluted
|
33,701
|
33,549
|
33,675
|
33,546
|
||||||||||||
Cash dividends per share
|
$
|
0.66
|
$
|
0.60
|
$
|
1.32
|
$
|
1.20
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
|||||||||||||||
|
2015
|
2014
|
2015
|
2014
|
||||||||||||
Net earnings (loss)
|
$
|
13.2
|
$
|
(0.7
|
)
|
$
|
73.8
|
$
|
49.5
|
|||||||
Other comprehensive income (loss):
|
||||||||||||||||
Unrealized gain from change in pension obligations, net of tax of $(0.1) and $(0.2) in the three and six months ended June 30, 2015, respectively, and $(0.1) and $(0.2) in the three and six months ended June 30, 2014, respectively
|
0.3
|
0.3
|
0.6
|
0.6
|
||||||||||||
Unrealized gain (loss) on cash flow hedges, net of tax of $(0.3) and $(0.4) in the three and six months ended June 30, 2015, respectively, and $0.1 and $(0.1) in the three and six months ended June 30, 2014, respectively
|
0.5
|
(0.1
|
)
|
0.5
|
0.1
|
|||||||||||
Cumulative translation adjustment
|
11.2
|
18.9
|
(38.6
|
)
|
3.4
|
|||||||||||
Comprehensive income
|
$
|
25.2
|
$
|
18.4
|
$
|
36.3
|
$
|
53.6
|
Common
Stock
|
Additional
Paid-In
Capital
|
Treasury
Stock
|
Retained
Earnings
|
Accumulated
Other
Comprehensive
Loss
|
Total
|
|||||||||||||||||||
Balance, December 31, 2014
|
$
|
0.4
|
$
|
82.5
|
$
|
(3.3
|
)
|
$
|
589.5
|
$
|
(15.5
|
)
|
$
|
653.6
|
||||||||||
Dividends on common stock/equity awards
|
0.2
|
(44.8
|
)
|
(44.6
|
)
|
|||||||||||||||||||
Stock options exercised
|
2.0
|
0.1
|
2.1
|
|||||||||||||||||||||
Income tax benefit from equity awards
|
0.1
|
0.1
|
||||||||||||||||||||||
Stock-based compensation
|
3.3
|
3.3
|
||||||||||||||||||||||
Comprehensive income (loss)
|
73.8
|
(37.5
|
)
|
36.3
|
||||||||||||||||||||
Balance, June 30, 2015
|
$
|
0.4
|
$
|
88.1
|
$
|
(3.2
|
)
|
$
|
618.5
|
$
|
(53.0
|
)
|
$
|
650.8
|
|
Six Months Ended
June 30,
|
|||||||
|
2015
|
2014
|
||||||
Cash flows from operating activities:
|
|
|
||||||
Net earnings
|
$
|
73.8
|
$
|
49.5
|
||||
Adjustments to reconcile net earnings to net cash flows provided by operating activities:
|
||||||||
Depreciation, depletion and amortization
|
38.2
|
37.2
|
||||||
Finance fee amortization
|
0.6
|
0.6
|
||||||
Early extinguishment of debt
|
-
|
6.9
|
||||||
Stock-based compensation
|
3.3
|
2.7
|
||||||
Deferred income taxes
|
2.7
|
2.3
|
||||||
Other, net
|
2.0
|
(0.8
|
)
|
|||||
Insurance advances for operating purposes, Goderich tornado
|
-
|
5.0
|
||||||
Changes in operating assets and liabilities, net of acquisition:
|
||||||||
Receivables
|
118.8
|
107.9
|
||||||
Inventories
|
(29.3
|
)
|
22.8
|
|||||
Other assets
|
(5.9
|
)
|
(12.7
|
)
|
||||
Accounts payable and accrued expenses
|
(92.5
|
)
|
(60.4
|
)
|
||||
Other liabilities
|
0.5
|
0.8
|
||||||
Net cash provided by operating activities
|
112.2
|
161.8
|
||||||
Cash flows from investing activities:
|
||||||||
Capital expenditures
|
(89.8
|
)
|
(49.0
|
)
|
||||
Acquisition of business
|
-
|
(86.1
|
)
|
|||||
Insurance advances for investment purposes, Goderich tornado
|
-
|
8.7
|
||||||
Other, net
|
(0.5
|
)
|
3.1
|
|||||
Net cash used in investing activities
|
(90.3
|
)
|
(123.3
|
)
|
||||
Cash flows from financing activities:
|
||||||||
Proceeds from issuance of long-term debt
|
-
|
250.0
|
||||||
Principal payments on long-term debt
|
(1.9
|
)
|
(100.4
|
)
|
||||
Premium and other payments to refinance debt
|
-
|
(5.5
|
)
|
|||||
Deferred financing costs
|
-
|
(3.1
|
)
|
|||||
Dividends paid
|
(44.6
|
)
|
(40.4
|
)
|
||||
Proceeds received from stock option exercises
|
2.1
|
4.4
|
||||||
Excess tax benefit (deficiency) from equity compensation awards
|
0.1
|
(0.3
|
)
|
|||||
Net cash provided by (used in) financing activities
|
(44.3
|
)
|
104.7
|
|||||
Effect of exchange rate changes on cash and cash equivalents
|
(10.7
|
)
|
1.2
|
|||||
Net change in cash and cash equivalents
|
(33.1
|
)
|
144.4
|
|||||
Cash and cash equivalents, beginning of the year
|
266.8
|
159.6
|
||||||
Cash and cash equivalents, end of period
|
$
|
233.7
|
$
|
304.0
|
Supplemental cash flow information:
|
||||||||
Interest paid, net of amounts capitalized
|
$
|
10.9
|
$
|
8.6
|
||||
Income taxes paid, net of refunds
|
$
|
73.4
|
$
|
28.5
|
Fair value of assets acquired
|
$
|
98.7
|
||
Cash paid during the second quarter of 2014
|
(86.1
|
)
|
||
Liabilities assumed
|
$
|
12.6
|
1.
|
Accounting Policies and Basis of Presentation:
|
2.
|
Inventories:
|
June 30,
2015
|
December 31,
2014
|
|||||||
Finished goods
|
$
|
169.5
|
$
|
148.5
|
||||
Raw materials and supplies
|
54.8
|
50.5
|
||||||
Total inventories
|
$
|
224.3
|
$
|
199.0
|
3.
|
Property, Plant and Equipment, Net:
|
June 30,
2015
|
December 31,
2014
|
|||||||
Land, buildings and structures and leasehold improvements
|
$
|
351.9
|
$
|
352.2
|
||||
Machinery and equipment
|
690.5
|
669.1
|
||||||
Office furniture and equipment
|
19.4
|
17.5
|
||||||
Mineral interests
|
175.9
|
179.6
|
||||||
Construction in progress
|
141.0
|
108.9
|
||||||
1,378.7
|
1,327.3
|
|||||||
Less accumulated depreciation and depletion
|
(642.2
|
)
|
(626.4
|
)
|
||||
Property, plant and equipment, net
|
$
|
736.5
|
$
|
700.9
|
4.
|
Goodwill and Intangible Assets, Net:
|
Intangible asset
|
Estimated
Lives
|
|
Supply agreement
|
50 years
|
|
SOP production rights
|
25 years
|
|
Patents
|
10-20 years
|
|
Developed technology
|
5 years
|
|
Lease rights
|
25 years
|
|
Customer and distributor relationships
|
5-10 years
|
|
Trademarks
|
10 years
|
|
Noncompete agreements
|
5 years
|
|
Trade names
|
Indefinite
|
|
Water rights
|
Indefinite
|
5.
|
Income Taxes:
|
6. | Long-term Debt: |
|
June 30,
2015
|
December 31,
2014
|
||||||
Term Loan due May 2017
|
$
|
374.5
|
$
|
376.4
|
||||
Revolving Credit Facility due August 2017
|
-
|
-
|
||||||
4.875% Senior Notes due July 2024
|
250.0
|
250.0
|
||||||
624.5
|
626.4
|
|||||||
Less current portion
|
(3.9
|
)
|
(3.9
|
)
|
||||
Long-term debt
|
$
|
620.6
|
$
|
622.5
|
7. | Commitments and Contingencies: |
8. | Operating Segments: |
Three Months Ended June 30, 2015
|
||||||||||||||||
Salt
|
Plant
Nutrition
|
Corporate
and Other
(a)
|
Total
|
|||||||||||||
Sales to external customers
|
$
|
116.3
|
$
|
64.1
|
$
|
3.3
|
$
|
183.7
|
||||||||
Intersegment sales
|
0.1
|
2.8
|
(2.9
|
)
|
-
|
|||||||||||
Shipping and handling cost
|
35.1
|
5.7
|
-
|
40.8
|
||||||||||||
Operating earnings (loss)
|
21.1
|
16.8
|
(13.9
|
)
|
24.0
|
|||||||||||
Depreciation, depletion and amortization
|
10.9
|
7.1
|
1.1
|
19.1
|
||||||||||||
Total assets (as of end of period)
|
905.6
|
563.0
|
61.7
|
1,530.3
|
Three Months Ended June 30, 2014
|
||||||||||||||||
Salt
|
Plant
Nutrition
|
Corporate
and Other
(a)
|
Total
|
|||||||||||||
Sales to external customers
|
$
|
118.7
|
$
|
65.6
|
$
|
2.3
|
$
|
186.6
|
||||||||
Intersegment sales
|
0.2
|
2.7
|
(2.9
|
)
|
-
|
|||||||||||
Shipping and handling cost
|
37.0
|
7.8
|
-
|
44.8
|
||||||||||||
Operating earnings (loss)
|
6.8
|
17.9
|
(11.3
|
)
|
13.4
|
|||||||||||
Depreciation, depletion and amortization
|
10.7
|
6.9
|
1.2
|
18.8
|
||||||||||||
Total assets (as of end of period)
|
955.4
|
517.7
|
68.1
|
1,541.2
|
|
Six Months Ended June 30, 2015
|
|||||||||||||||
Salt
|
Plant
Nutrition
|
Corporate
and Other
(a)
|
Total
|
|||||||||||||
Sales to external customers
|
$
|
433.0
|
$
|
137.7
|
$
|
6.0
|
$
|
576.7
|
||||||||
Intersegment sales
|
0.1
|
3.5
|
(3.6
|
)
|
-
|
|||||||||||
Shipping and handling cost
|
129.6
|
13.1
|
-
|
142.7
|
||||||||||||
Operating earnings (loss)
|
98.1
|
37.6
|
(27.0
|
)
|
108.7
|
|||||||||||
Depreciation, depletion and amortization
|
21.8
|
14.1
|
2.3
|
38.2
|
Six Months Ended June 30, 2014
|
||||||||||||||||
Salt
|
Plant
Nutrition
|
Corporate
and Other
(a)
|
Total
|
|||||||||||||
Sales to external customers
|
$
|
471.9
|
$
|
131.7
|
$
|
5.0
|
$
|
608.6
|
||||||||
Intersegment sales
|
0.4
|
3.2
|
(3.6
|
)
|
-
|
|||||||||||
Shipping and handling cost
|
160.1
|
15.4
|
-
|
175.5
|
||||||||||||
Operating earnings (loss)
|
70.3
|
34.2
|
(24.1
|
)
|
80.4
|
|||||||||||
Depreciation, depletion and amortization
|
22.1
|
12.9
|
2.2
|
37.2
|
(a)
|
Corporate and Other includes corporate entities, records management operations and other incidental operations and eliminations. Operating earnings (loss) for corporate and other includes indirect corporate overhead including costs for general corporate governance and oversight, as well as costs for the human resources, information technology and finance functions.
|
9. | Stockholders’ Equity and Equity Instruments: |
|
Range
|
|||
Fair value of options granted
|
$ 14.22 - $15.09
|
|||
Exercise price
|
$ 91.75 - $93.26
|
|||
Expected term (years)
|
4.5-5
|
|||
Expected volatility
|
24.7% - 25. 0 %
|
|
||
Dividend yield
|
3.1 %
|
|
||
Risk-free rate of return
|
1.3% - 1.6 %
|
|
Stock Options
|
RSUs
|
PSUs
(a)
|
||||||||||||||||||||||
|
Number
|
Weighted-average
exercise price
|
Number
|
Weighted-average
fair value
|
Number
|
Weighted-average
fair value
|
||||||||||||||||||
Outstanding at December 31, 2014
|
278,429
|
$
|
79.23
|
88,532
|
$
|
76.58
|
59,627
|
$
|
88.69
|
|||||||||||||||
Granted
|
120,956
|
91.76
|
19,492
|
91.76
|
35,584
|
100.49
|
||||||||||||||||||
Exercised
(b)
|
(29,053
|
)
|
73.14
|
-
|
-
|
-
|
-
|
|||||||||||||||||
Released from restriction
(b)
|
-
|
-
|
(15,952
|
)
|
71.69
|
(10,454
|
)
|
74.49
|
||||||||||||||||
Cancelled/Expired
|
(4,848
|
)
|
83.45
|
(1,109
|
)
|
79.63
|
(5,375
|
)
|
77.90
|
|||||||||||||||
Outstanding at June 30, 2015
|
365,484
|
$
|
83.77
|
90,963
|
$
|
80.66
|
79,382
|
$
|
96.58
|
(a) | Until they vest, PSUs are 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 2012 PSU grant was completed in 2014. The Company issued 10,454 shares and cancelled 4,443 PSUs due to performance in the first quarter of 2015 related to the 2012 PSU grant. |
(b) | Common stock issued for exercised options and RSUs and PSUs released from restriction was issued from treasury stock. |
Three Months Ended June 30, 2015
(a)
|
Gains and
(Losses) on
Cash Flow
Hedges
|
Defined
Benefit
Pension
|
Foreign
Currency
|
Total
|
||||||||||||
Beginning balance
|
$
|
(2.0
|
)
|
$
|
(8.7
|
)
|
$
|
(54.3
|
)
|
$
|
(65.0
|
)
|
||||
Other comprehensive income before reclassifications
(b)
|
0.1
|
-
|
11.2
|
11.3
|
||||||||||||
Amounts reclassified from accumulated other comprehensive loss
|
0.4
|
0.3
|
-
|
0.7
|
||||||||||||
Net current period other comprehensive income
|
0.5
|
0.3
|
11.2
|
12.0
|
||||||||||||
Ending balance
|
$
|
(1.5
|
)
|
$
|
(8.4
|
)
|
$
|
(43.1
|
)
|
$
|
(53.0
|
)
|
Three Months Ended June 30, 2014
(a)
|
Gains and
(Losses) on
Cash Flow
Hedges
|
Defined
Benefit
Pension
|
Foreign
Currency
|
Total
|
||||||||||||
Beginning balance
|
$
|
0.5
|
$
|
(9.0
|
)
|
$
|
28.0
|
$
|
19.5
|
|||||||
Other comprehensive income before reclassifications
(b)
|
0.1
|
-
|
18.9
|
19.0
|
||||||||||||
Amounts reclassified from accumulated other comprehensive income
|
(0.2
|
)
|
0.3
|
-
|
0.1
|
|||||||||||
Net current period other comprehensive income (loss)
|
(0.1
|
)
|
0.3
|
18.9
|
19.1
|
|||||||||||
Ending balance
|
$
|
0.4
|
$
|
(8.7
|
)
|
$
|
46.9
|
$
|
38.6
|
Six Months Ended June 30, 2015
(a)
|
Gains and
(Losses) on
Cash Flow
Hedges
|
Defined
Benefit
Pension
|
Foreign
Currency
|
Total
|
||||||||||||
Beginning balance
|
$
|
(2.0
|
)
|
$
|
(9.0
|
)
|
$
|
(4.5
|
)
|
$
|
(15.5
|
)
|
||||
Other comprehensive loss before reclassifications
(b)
|
(0.6
|
)
|
-
|
(38.6
|
)
|
(39.2
|
)
|
|||||||||
Amounts reclassified from accumulated other comprehensive loss
|
1.1
|
0.6
|
-
|
1.7
|
||||||||||||
Net current period other comprehensive income (loss)
|
0.5
|
0.6
|
(38.6
|
)
|
(37.5
|
)
|
||||||||||
Ending balance
|
$
|
(1.5
|
)
|
$
|
(8.4
|
)
|
$
|
(43.1
|
)
|
$
|
(53.0
|
)
|
Six Months Ended June 30, 2014
(a)
|
Gains and
(Losses) on
Cash Flow
Hedges
|
Defined
Benefit
Pension
|
Foreign
Currency
|
Total
|
||||||||||||
Beginning balance
|
$
|
0.3
|
$
|
(9.3
|
)
|
$
|
43.5
|
$
|
34.5
|
|||||||
Other comprehensive income before reclassifications
(b)
|
0.7
|
-
|
3.4
|
4.1
|
||||||||||||
Amounts reclassified from accumulated other comprehensive income
|
(0.6
|
)
|
0.6
|
-
|
-
|
|||||||||||
Net current period other comprehensive income
|
0.1
|
0.6
|
3.4
|
4.1
|
||||||||||||
Ending balance
|
$
|
0.4
|
$
|
(8.7
|
)
|
$
|
46.9
|
$
|
38.6
|
(a) | With the exception of the cumulative foreign currency translation adjustment, for which no tax effect is recorded, the changes in the components of accumulated other comprehensive gain (loss) presented in the table above are reflected net of applicable income taxes. |
(b) | The Company recorded foreign exchange (gains) losses of approximately $(2.7) million and $14.6 million in the three months and six months ended June 30, 2015, respectively, and $0.4 million and $8.7 million in the three and six months ended June 30, 2014, respectively, in accumulated other comprehensive income (loss) related to intercompany notes which were deemed to be of long-term investment nature. |
Amount Reclassified from AOCI
|
|||||||||
Three Months Ended
June 30, 2014
|
Six Months Ended
June 30, 2014
|
Line Item Impacted in the
Consolidated Statement of Operations
|
|||||||
Gains and (losses) on cash flow hedges:
|
|||||||||
Natural gas instruments
|
$
|
(0.3
|
)
|
$
|
(0.9
|
)
|
Product cost
|
||
0.1
|
0.3
|
Income tax expense (benefit)
|
|||||||
Reclassifications, net of income taxes
|
(0.2
|
)
|
(0.6
|
)
|
|||||
Amortization of defined benefit pension:
|
|||||||||
Amortization of loss
|
$
|
0.4
|
$
|
0.8
|
Product cost
|
||||
(0.1
|
)
|
(0.2
|
)
|
Income tax expense (benefit)
|
|||||
Reclassifications, net of income taxes
|
0.3
|
0.6
|
|||||||
Total reclassifications, net of income taxes
|
$
|
0.1
|
$
|
-
|
10. | Derivative Financial Instruments: |
Asset Derivatives
|
Liability Derivatives
|
|||||||||
Derivatives designated as hedging instruments
(a) (b)
|
Balance Sheet
Location
|
June 30,
2015
|
Balance Sheet
Location
|
June 30,
2015
|
||||||
Commodity contracts
|
Other current assets
|
$
|
-
|
Accrued expenses
|
$
|
1.8
|
||||
Commodity contracts
|
Other assets
|
-
|
Other noncurrent liabilities
|
0.6
|
||||||
Total derivatives designated as hedging instruments
|
|
$
|
-
|
|
$
|
2.4
|
(a) | As of June 30, 2015, the Company has commodity hedge agreements with four counterparties. Three of the counterparties are in payable positions. |
(b) | The Company has master netting agreements with its counterparties and accordingly has netted in its consolidated balance sheets immaterial amounts that are in receivable and payable positions with larger amounts that are in payable and receivable positions, respectively. |
Asset Derivatives
|
Liability Derivatives
|
|||||||||
Derivatives designated as hedging instruments
(a) (b)
|
Balance Sheet
Location
|
December 31,
2014
|
Balance Sheet
Location
|
December 31,
2014
|
||||||
Commodity contracts
|
Other current assets
|
$
|
0.1
|
Accrued expenses
|
$
|
2.5
|
||||
Commodity contracts
|
Other assets
|
-
|
Other noncurrent liabilities
|
1.0
|
||||||
Total derivatives designated as hedging instruments
|
|
$
|
0.1
|
|
$
|
3.5
|
(a) | The Company has commodity hedge agreements with four counterparties. Amounts recorded as liabilities for the Company’s commodity contracts are payable to all counterparties. 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 $0.1 million of its commodity contracts that are in a receivable position against its contracts in payable positions. |
11. | Fair Value Measurements: |
June 30,
2015
|
Level One
|
Level Two
|
Level Three
|
|||||||||||||
Asset Class:
|
||||||||||||||||
Mutual fund investments in a non-qualified retirement plan
(a)
|
$
|
2.0
|
$
|
2.0
|
$
|
-
|
$
|
-
|
||||||||
Total Assets
|
$
|
2.0
|
$
|
2.0
|
$
|
-
|
$
|
-
|
||||||||
Liability Class:
|
||||||||||||||||
Liabilities related to non-qualified retirement plan
|
$
|
(2.0
|
)
|
$
|
(2.0
|
)
|
$
|
-
|
$
|
-
|
||||||
Derivatives – natural gas instruments
|
(2.4
|
)
|
-
|
(2.4
|
)
|
-
|
||||||||||
Total Liabilities
|
$
|
(4.4
|
)
|
$
|
(2.0
|
)
|
$
|
(2.4
|
)
|
$
|
-
|
(a) | Includes mutual fund investments of approximately 20% 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 international companies, approximately 5% in bond funds, approximately 25% in short-term investments and approximately 40% in blended funds. |
December 31,
2014
|
Level One
|
Level Two
|
Level Three
|
|||||||||||||
Asset Class:
|
||||||||||||||||
Mutual fund investments in a non-qualified savings plan
(a)
|
$
|
1.9
|
$
|
1.9
|
$
|
-
|
$
|
-
|
||||||||
Total Assets
|
$
|
1.9
|
$
|
1.9
|
$
|
-
|
$
|
-
|
||||||||
Liability Class:
|
||||||||||||||||
Liabilities related to non-qualified savings plan
|
$
|
(1.9
|
)
|
$
|
(1.9
|
)
|
$
|
-
|
$
|
-
|
||||||
Derivatives – natural gas instruments
|
(3.4
|
)
|
-
|
(3.4
|
)
|
-
|
||||||||||
Total Liabilities
|
$
|
(5.3
|
)
|
$
|
(1.9
|
)
|
$
|
(3.4
|
)
|
$
|
-
|
(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 international companies, approximately 5% in bond funds, approximately 35% in short-term investments and approximately 40% in blended funds. |
12. | Earnings per Share: |
Three months ended
June 30,
|
Six months ended
June 30,
|
|||||||||||||||
2015
|
2014
|
2015
|
2014
|
|||||||||||||
Numerator:
|
|
|
|
|
||||||||||||
Net earnings (loss)
|
$
|
13.2
|
$
|
(0.7
|
)
|
$
|
73.8
|
$
|
49.5
|
|||||||
Less: net earnings allocated to participating securities
(a)
|
(0.2
|
)
|
(0.0
|
)
|
(0.5
|
)
|
(0.3
|
)
|
||||||||
Net earnings (loss) available to common shareholders
|
$
|
13.0
|
$
|
(0.7
|
)
|
$
|
73.3
|
$
|
49.2
|
|||||||
Denominator (in thousands):
|
||||||||||||||||
Weighted-average common shares outstanding, shares for basic earnings per share
|
33,682
|
33,549
|
33,654
|
33,526
|
||||||||||||
Weighted-average awards outstanding
(b)
|
19
|
-
|
21
|
20
|
||||||||||||
Shares for diluted earnings per share
|
33,701
|
33,549
|
33,675
|
33,546
|
||||||||||||
Net earnings (loss) per common share, basic
|
$
|
0.39
|
$
|
(0.02
|
)
|
$
|
2.18
|
$
|
1.47
|
|||||||
Net earnings (loss) per common share, diluted
|
$
|
0.39
|
$
|
(0.02
|
)
|
$
|
2.18
|
$
|
1.47
|
(a)
|
Participating securities include options, PSUs and RSUs that receive non-forfeitable dividends. Weighted participating securities included 192,000 and 204,000 for the three and six months ended June 30, 2015, respectively, and 213,000 and 216,000 for the three and six months ended June 30, 2014, 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 463,000 and 413,000 weighted-awards outstanding for the three and six months ended June 30, 2015, respectively, and 523,000 and 402,000 for the three and six months ended June 30, 2014, respectively, which were anti-dilutive and therefore not included in the diluted earnings per-share calculation.
|
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
||||||||||||||
2015
|
2014
|
2015
|
2014
|
|||||||||||||
Salt Sales (in millions)
|
|
|
|
|
||||||||||||
Salt sales
|
$
|
116.3
|
$
|
118.7
|
$
|
433.0
|
$
|
471.9
|
||||||||
Less: salt shipping and handling
|
35.1
|
37.0
|
129.6
|
160.1
|
||||||||||||
Salt product sales
|
$
|
81.2
|
$
|
81.7
|
$
|
303.4
|
$
|
311.8
|
||||||||
Salt Sales Volumes (thousands of tons)
|
||||||||||||||||
Highway deicing
|
1,011
|
990
|
4,858
|
5,732
|
||||||||||||
Consumer and industrial
|
466
|
557
|
973
|
1,211
|
||||||||||||
Total tons sold
|
1,477
|
1,547
|
5,831
|
6,943
|
||||||||||||
Average Salt Sales Price (per ton)
|
||||||||||||||||
Highway deicing
|
$
|
51.28
|
$
|
44.93
|
$
|
60.55
|
$
|
52.23
|
||||||||
Consumer and industrial
|
138.19
|
133.27
|
142.66
|
142.46
|
||||||||||||
Combined
|
78.72
|
76.73
|
74.26
|
67.97
|
||||||||||||
Plant Nutrition Sales (in millions)
|
||||||||||||||||
Plant nutrition sales
|
$
|
64.1
|
$
|
65.6
|
$
|
137.7
|
$
|
131.7
|
||||||||
Less: Plant nutrition shipping and handling
|
5.7
|
7.8
|
13.1
|
15.4
|
||||||||||||
Plant Nutrition product sales
|
$
|
58.4
|
$
|
57.8
|
$
|
124.6
|
$
|
116.3
|
||||||||
Plant Nutrition Sales Volumes (thousands of tons)
|
85
|
98
|
182
|
205
|
||||||||||||
Plant Nutrition Average Price (per ton)
|
$
|
756
|
$
|
670
|
$
|
757
|
$
|
641
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
|||||||||||||||
|
2015
|
2014
|
2015
|
2014
|
||||||||||||
Net earnings (loss)
|
$
|
13.2
|
$
|
(0.7
|
)
|
$
|
73.8
|
$
|
49.5
|
|||||||
Interest expense
|
5.3
|
4.5
|
10.7
|
8.9
|
||||||||||||
Income tax expense
|
6.7
|
2.5
|
28.9
|
18.0
|
||||||||||||
Depreciation, depletion and amortization
|
19.1
|
18.8
|
38.2
|
37.2
|
||||||||||||
EBITDA
|
44.3
|
25.1
|
151.6
|
113.6
|
||||||||||||
Adjustments to EBITDA:
|
||||||||||||||||
Other (income) expense, net
|
(1.2
|
)
|
7.1
|
(4.7
|
)
|
4.0
|
||||||||||
Adjusted EBITDA
|
$
|
43.1
|
$
|
32.2
|
$
|
146.9
|
$
|
117.6
|
COMPASS MINERALS INTERNATIONAL, INC.
|
||
Date: July 28, 2015
|
/s/ FRANCIS J. MALECHA
|
|
Francis J. Malecha
|
||
President and Chief Executive Officer
|
||
(Principal Executive Officer)
|
||
Date: July 28, 2015
|
/s/ MATTHEW J. FOULSTON
|
|
Matthew J. Foulston
|
||
Chief Financial Officer
|
||
(Principal Financial and Accounting Officer)
|
*
|
Filed herewith
|
**
|
Furnished here
with
|
|
Exhibit 10.2
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
||
By:
|
|||
Name:
|
|||
|
|
|
|
|
Date:
|
||
|
|
|
|
|
DIRECTOR
|
||
|
Name:
|
|
|
Date:
|
Last Name
|
First Name
|
MI
|
Social Security Number
|
Mailing Address
|
City
|
State
|
Zip Code
|
Telephone
|
Email Address
|
A. | Cash Retainer |
B. | Stock Retainer |
A. |
Commencement of Distribution
|
B. | Form of Distribution |
C. | Change in Control |
|
Signature
|
|
Date
|
|
Exhibit 10.3
|
Foreign Director Form
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|||
By:
|
|||
Name:
|
|||
Date:
|
|||
DIRECTOR
|
|||
Name:
|
|||
Date:
|
Last Name
|
First Name
|
MI
|
Social Security Number
|
Mailing Address
|
City
|
State
|
Zip Code
|
Telephone
|
Email Address
|
A. | Cash Retainer |
B. | Stock Retainer |
A. | Commencement of Distribution |
B. | Form of Distribution |
C. | Change in Control |
Signature
|
Date
|
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: July 28, 2015
|
/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: July 28, 2015
|
/s/ MATTHEW J. FOULSTON
|
|
Matthew J. Foulston
|
||
Chief Financial Officer
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
July 28, 2015
|
/s/ FRANCIS J. MALECHA
|
Francis J. Malecha
|
|
President and Chief Executive Officer
|
|
/s/ MATTHEW J. FOULSTON
|
|
Matthew J. Foulston
|
|
Chief Financial Officer
|
For the Three Months Ended June 30, 2015
|
||||||||||||||||||||||||||||||||||||||||||
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)
|
3
|
0
|
0
|
0
|
0
|
$
|
3,119
|
0
|
No
|
No
|
2
|
1
|
0
|