|
Delaware
|
36-3972986
|
(State or other jurisdiction of
incorporation or organization)
|
(I.R.S. Employer
Identification Number)
|
Title of each class
|
|
Trading Symbol
|
|
Name of each exchange on which registered
|
Common stock, $0.01 par value
|
|
CMP
|
|
The New York Stock Exchange
|
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such
|
||||
reports), and (2) has been subject to such filing requirements for the past 90 days.
|
Yes
|
☑
|
No
|
☐
|
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period
|
||||
that the registrant was required to submit and post such files)
|
Yes
|
☑
|
No
|
☐
|
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
|
Yes
|
☐
|
No
|
☑
|
|
|
|
Page
|
|
|
|
|
PART I. FINANCIAL INFORMATION
|
|
|
|
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||
|
|
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|
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||
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||
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PART II. OTHER INFORMATION
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Unaudited)
|
|
|
||||
|
March 31,
2020 |
|
December 31,
2019 |
||||
ASSETS
|
|||||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
109.8
|
|
|
$
|
34.7
|
|
Receivables, less allowance for doubtful accounts of $9.5 in 2020 and $10.7 in 2019
|
225.0
|
|
|
342.4
|
|
||
Inventories
|
254.2
|
|
|
311.5
|
|
||
Other
|
37.2
|
|
|
96.4
|
|
||
Total current assets
|
626.2
|
|
|
785.0
|
|
||
Property, plant and equipment, net
|
953.8
|
|
|
1,030.8
|
|
||
Intangible assets, net
|
88.6
|
|
|
103.0
|
|
||
Goodwill
|
274.7
|
|
|
343.0
|
|
||
Investment in equity investee
|
23.1
|
|
|
24.9
|
|
||
Other
|
144.4
|
|
|
156.5
|
|
||
Total assets
|
$
|
2,110.8
|
|
|
$
|
2,443.2
|
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|||||||
Current liabilities:
|
|
|
|
||||
Current portion of long-term debt
|
$
|
40.1
|
|
|
$
|
52.1
|
|
Accounts payable
|
112.8
|
|
|
126.2
|
|
||
Accrued salaries and wages
|
24.7
|
|
|
34.4
|
|
||
Income taxes payable
|
2.7
|
|
|
10.4
|
|
||
Accrued interest
|
16.9
|
|
|
11.3
|
|
||
Accrued expenses and other current liabilities
|
62.1
|
|
|
61.5
|
|
||
Total current liabilities
|
259.3
|
|
|
295.9
|
|
||
Long-term debt, net of current portion
|
1,253.7
|
|
|
1,363.9
|
|
||
Deferred income taxes, net
|
81.9
|
|
|
89.9
|
|
||
Other noncurrent liabilities
|
154.4
|
|
|
163.9
|
|
||
|
|
|
|
|
|||
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
|
119.6
|
|
|
117.1
|
|
||
Treasury stock, at cost — 1,475,196 shares at March 31, 2020 and 1,481,611 shares at December 31, 2019
|
(3.3
|
)
|
|
(3.2
|
)
|
||
Retained earnings
|
610.1
|
|
|
607.4
|
|
||
Accumulated other comprehensive loss
|
(365.3
|
)
|
|
(192.1
|
)
|
||
Total stockholders’ equity
|
361.5
|
|
|
529.6
|
|
||
Total liabilities and stockholders’ equity
|
$
|
2,110.8
|
|
|
$
|
2,443.2
|
|
|
Three Months Ended
March 31, |
||||||
|
2020
|
|
2019
|
||||
Sales
|
$
|
413.9
|
|
|
$
|
403.7
|
|
Shipping and handling cost
|
101.8
|
|
|
112.9
|
|
||
Product cost
|
224.8
|
|
|
218.2
|
|
||
Gross profit
|
87.3
|
|
|
72.6
|
|
||
Selling, general and administrative expenses
|
43.1
|
|
|
39.4
|
|
||
Operating earnings
|
44.2
|
|
|
33.2
|
|
||
|
|
|
|
||||
Other expense (income):
|
|
|
|
||||
Interest expense
|
19.0
|
|
|
16.2
|
|
||
Net loss in equity investee
|
0.1
|
|
|
0.1
|
|
||
(Gain) loss on foreign exchange
|
(14.3
|
)
|
|
5.0
|
|
||
Other, net
|
0.1
|
|
|
(0.6
|
)
|
||
Earnings before income taxes
|
39.3
|
|
|
12.5
|
|
||
Income tax expense
|
11.7
|
|
|
4.9
|
|
||
Net earnings
|
$
|
27.6
|
|
|
$
|
7.6
|
|
|
|
|
|
||||
Basic net earnings per common share
|
$
|
0.80
|
|
|
$
|
0.22
|
|
Diluted net earnings per common share
|
$
|
0.80
|
|
|
$
|
0.22
|
|
|
|
|
|
||||
Weighted-average common shares outstanding (in thousands):
|
|
|
|
||||
Basic
|
33,892
|
|
|
33,874
|
|
||
Diluted
|
33,892
|
|
|
33,874
|
|
|
Three Months Ended
March 31, |
||||||
|
2020
|
|
2019
|
||||
Net earnings
|
$
|
27.6
|
|
|
$
|
7.6
|
|
Other comprehensive income (loss):
|
|
|
|
||||
Unrealized gain from change in pension obligations, net of tax of $(0.0) in both 2020 and 2019
|
0.2
|
|
|
0.1
|
|
||
Unrealized gain on cash flow hedges, net of tax of $(0.0) in both 2020 and 2019
|
0.1
|
|
|
0.1
|
|
||
Cumulative translation adjustment
|
(173.5
|
)
|
|
14.5
|
|
||
Comprehensive (loss) income
|
$
|
(145.6
|
)
|
|
$
|
22.3
|
|
|
Common
Stock
|
|
Additional
Paid-In
Capital
|
|
Treasury
Stock
|
|
Retained
Earnings
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Total
|
||||||||||||
Balance, December 31, 2019
|
$
|
0.4
|
|
|
$
|
117.1
|
|
|
$
|
(3.2
|
)
|
|
$
|
607.4
|
|
|
$
|
(192.1
|
)
|
|
$
|
529.6
|
|
Comprehensive income (loss)
|
|
|
|
|
|
|
27.6
|
|
|
(173.2
|
)
|
|
(145.6
|
)
|
|||||||||
Dividends on common stock ($0.72 per share)
|
|
|
0.1
|
|
|
|
|
(24.9
|
)
|
|
|
|
(24.8
|
)
|
|||||||||
Shares issued for stock units, net of shares withheld for taxes
|
|
|
|
|
(0.1
|
)
|
|
|
|
|
|
(0.1
|
)
|
||||||||||
Stock-based compensation
|
|
|
2.4
|
|
|
|
|
|
|
|
|
2.4
|
|
||||||||||
Balance, March 31, 2020
|
$
|
0.4
|
|
|
$
|
119.6
|
|
|
$
|
(3.3
|
)
|
|
$
|
610.1
|
|
|
$
|
(365.3
|
)
|
|
$
|
361.5
|
|
|
Common
Stock
|
|
Additional
Paid-In
Capital
|
|
Treasury
Stock
|
|
Retained
Earnings
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Total
|
||||||||||||
Balance, December 31, 2018
|
$
|
0.4
|
|
|
$
|
110.1
|
|
|
$
|
(2.9
|
)
|
|
$
|
643.5
|
|
|
$
|
(210.9
|
)
|
|
$
|
540.2
|
|
Comprehensive income
|
|
|
|
|
|
|
7.6
|
|
|
14.7
|
|
|
22.3
|
|
|||||||||
Cumulative effect of change in accounting principle
|
|
|
|
|
|
|
(0.1
|
)
|
|
|
|
(0.1
|
)
|
||||||||||
Dividends on common stock ($0.72 per share)
|
|
|
0.1
|
|
|
|
|
(24.6
|
)
|
|
|
|
(24.5
|
)
|
|||||||||
Shares issued for stock units, net of shares withheld for taxes
|
|
|
|
|
(0.2
|
)
|
|
|
|
|
|
(0.2
|
)
|
||||||||||
Stock-based compensation
|
|
|
1.1
|
|
|
|
|
|
|
|
|
1.1
|
|
||||||||||
Balance, March 31, 2019
|
$
|
0.4
|
|
|
$
|
111.3
|
|
|
$
|
(3.1
|
)
|
|
$
|
626.4
|
|
|
$
|
(196.2
|
)
|
|
$
|
538.8
|
|
|
Three Months Ended
March 31, |
||||||
|
2020
|
|
2019
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net earnings
|
$
|
27.6
|
|
|
$
|
7.6
|
|
Adjustments to reconcile net earnings to net cash flows provided by operating activities:
|
|
|
|
||||
Depreciation, depletion and amortization
|
33.1
|
|
|
35.0
|
|
||
Finance fee amortization
|
0.8
|
|
|
0.7
|
|
||
Stock-based compensation
|
2.4
|
|
|
1.1
|
|
||
Deferred income taxes
|
7.5
|
|
|
(0.1
|
)
|
||
Net loss in equity investee
|
0.1
|
|
|
0.1
|
|
||
Unrealized foreign exchange (gain) loss
|
(18.0
|
)
|
|
5.1
|
|
||
Other, net
|
3.4
|
|
|
1.4
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||
Receivables
|
87.1
|
|
|
72.0
|
|
||
Inventories
|
36.6
|
|
|
41.0
|
|
||
Other assets
|
54.5
|
|
|
17.3
|
|
||
Accounts payable and accrued expenses and other current liabilities
|
(4.9
|
)
|
|
(46.7
|
)
|
||
Other liabilities
|
(1.6
|
)
|
|
(6.1
|
)
|
||
Net cash provided by operating activities
|
228.6
|
|
|
128.4
|
|
||
Cash flows from investing activities:
|
|
|
|
|
|
||
Capital expenditures
|
(25.3
|
)
|
|
(21.5
|
)
|
||
Other, net
|
(0.6
|
)
|
|
(0.3
|
)
|
||
Net cash used in investing activities
|
(25.9
|
)
|
|
(21.8
|
)
|
||
Cash flows from financing activities:
|
|
|
|
|
|
||
Proceeds from revolving credit facility borrowings
|
46.2
|
|
|
61.7
|
|
||
Principal payments on revolving credit facility borrowings
|
(147.2
|
)
|
|
(139.6
|
)
|
||
Proceeds from issuance of long-term debt
|
22.0
|
|
|
18.5
|
|
||
Principal payments on long-term debt
|
(18.7
|
)
|
|
(5.5
|
)
|
||
Dividends paid
|
(24.8
|
)
|
|
(24.6
|
)
|
||
Deferred financing costs
|
(0.1
|
)
|
|
—
|
|
||
Shares withheld to satisfy employee tax obligations
|
(0.1
|
)
|
|
(0.2
|
)
|
||
Other, net
|
(0.1
|
)
|
|
(0.3
|
)
|
||
Net cash used in financing activities
|
(122.8
|
)
|
|
(90.0
|
)
|
||
Effect of exchange rate changes on cash and cash equivalents
|
(4.8
|
)
|
|
0.2
|
|
||
Net change in cash and cash equivalents
|
75.1
|
|
|
16.8
|
|
||
Cash and cash equivalents, beginning of the year
|
34.7
|
|
|
27.0
|
|
||
Cash and cash equivalents, end of period
|
$
|
109.8
|
|
|
$
|
43.8
|
|
Supplemental cash flow information:
|
|
|
|
|
|
||
Interest paid, net of amounts capitalized
|
$
|
11.3
|
|
|
$
|
17.3
|
|
Income taxes paid, net of refunds
|
$
|
(37.7
|
)
|
|
$
|
10.2
|
|
1.
|
Accounting Policies and Basis of Presentation:
|
3.
|
Leases:
|
|
Consolidated Balance Sheets Location
|
March 31,
2020 |
December 31,
2019 |
||||
Assets
|
|
|
|
||||
Operating lease assets
|
Other assets
|
$
|
49.7
|
|
$
|
53.7
|
|
Finance lease assets
|
Property, plant and equipment, net
|
5.9
|
|
5.8
|
|
||
Total leased assets
|
|
$
|
55.6
|
|
$
|
59.5
|
|
Liabilities
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Operating
|
Accrued expenses and other current liabilities
|
$
|
9.5
|
|
$
|
12.8
|
|
Finance
|
Accrued expenses and other current liabilities
|
1.7
|
|
1.1
|
|
||
Noncurrent liabilities:
|
|
|
|
||||
Operating
|
Other noncurrent liabilities
|
40.4
|
|
41.0
|
|
||
Finance
|
Other noncurrent liabilities
|
5.3
|
|
6.2
|
|
||
Total lease liabilities
|
|
$
|
56.9
|
|
$
|
61.1
|
|
|
Three Months Ended March 31,
|
|||||
|
2020
|
2019
|
||||
Finance lease cost:
|
|
|
||||
Amortization of lease assets
|
$
|
0.5
|
|
$
|
0.3
|
|
Interest on lease liabilities
|
0.1
|
|
0.2
|
|
||
Operating lease cost
|
4.6
|
|
4.8
|
|
||
Variable lease cost(a)
|
5.1
|
|
6.1
|
|
||
Net lease cost
|
$
|
10.3
|
|
$
|
11.4
|
|
(a)
|
Short-term leases are immaterial and included in variable lease cost.
|
Topic 842
|
||||||||||
March 31, 2020
|
Operating Leases
|
Finance Leases
|
Total
|
|||||||
Remainder of 2020
|
$
|
8.7
|
|
$
|
1.6
|
|
$
|
10.3
|
|
|
2021
|
10.1
|
|
1.6
|
|
11.7
|
|
||||
2022
|
7.5
|
|
0.9
|
|
8.4
|
|
||||
2023
|
6.2
|
|
0.9
|
|
7.1
|
|
||||
2024
|
5.3
|
|
0.9
|
|
6.2
|
|
||||
After 2024
|
22.4
|
|
2.8
|
|
25.2
|
|
||||
Total lease payments
|
60.2
|
|
8.7
|
|
68.9
|
|
||||
Less: Interest
|
(10.3
|
)
|
(1.7
|
)
|
(12.0
|
)
|
||||
Present value of lease liabilities
|
$
|
49.9
|
|
$
|
7.0
|
|
$
|
56.9
|
|
Topic 842
|
||||||||||
December 31, 2019
|
Operating Leases
|
Finance Leases
|
Total
|
|||||||
2020
|
$
|
13.0
|
|
$
|
1.6
|
|
$
|
14.6
|
|
|
2021
|
10.0
|
|
1.3
|
|
11.3
|
|
||||
2022
|
7.5
|
|
1.1
|
|
8.6
|
|
||||
2023
|
6.3
|
|
1.1
|
|
7.4
|
|
||||
2024
|
5.3
|
|
1.1
|
|
6.4
|
|
||||
After 2024
|
22.8
|
|
3.3
|
|
26.1
|
|
||||
Total lease payments
|
64.9
|
|
9.5
|
|
74.4
|
|
||||
Less: Interest
|
(11.1
|
)
|
(2.2
|
)
|
(13.3
|
)
|
||||
Present value of lease liabilities
|
$
|
53.8
|
|
$
|
7.3
|
|
$
|
61.1
|
|
|
March 31, 2020
|
December 31, 2019
|
||
Weighted-average remaining lease term (years)
|
|
|
||
Operating leases
|
7.7
|
|
7.7
|
|
Finance leases
|
6.2
|
|
7.2
|
|
Weighted-average discount rate
|
|
|
||
Operating leases
|
4.3
|
%
|
4.3
|
%
|
Finance leases
|
7.1
|
%
|
7.6
|
%
|
|
Three Months Ended March 31,
|
|||||
|
2020
|
2019
|
||||
Cash paid for amounts included in the measurement of lease liabilities
|
|
|
||||
Operating cash flows from operating leases
|
$
|
4.5
|
|
$
|
4.9
|
|
Operating cash flows from finance leases
|
0.1
|
|
0.2
|
|
||
Financing cash flows from finance leases
|
0.5
|
|
0.3
|
|
||
Leased assets obtained in exchange for new operating lease liabilities
|
1.0
|
|
2.4
|
|
||
Leased assets obtained in exchange for new finance lease liabilities
|
1.2
|
|
—
|
|
4.
|
Inventories:
|
|
March 31,
2020 |
|
December 31,
2019 |
||||
Finished goods
|
$
|
185.6
|
|
|
$
|
235.3
|
|
Raw materials and supplies
|
68.6
|
|
|
76.2
|
|
||
Total inventories
|
$
|
254.2
|
|
|
$
|
311.5
|
|
5.
|
Property, Plant and Equipment, Net:
|
|
March 31,
2020 |
|
December 31,
2019 |
||||
Land, buildings and structures, and leasehold improvements
|
$
|
578.3
|
|
|
$
|
596.0
|
|
Machinery and equipment
|
974.8
|
|
|
1,001.9
|
|
||
Office furniture and equipment
|
62.4
|
|
|
60.7
|
|
||
Mineral interests
|
165.9
|
|
|
171.1
|
|
||
Construction in progress
|
136.2
|
|
|
141.3
|
|
||
|
1,917.6
|
|
|
1,971.0
|
|
||
Less accumulated depreciation and depletion
|
(963.8
|
)
|
|
(940.2
|
)
|
||
Property, plant and equipment, net
|
$
|
953.8
|
|
|
$
|
1,030.8
|
|
6.
|
Goodwill and Intangible Assets, Net:
|
|
|
Three Months Ended
March 31, |
||||||
|
|
2020
|
|
2019
|
||||
Aggregate amortization expense
|
|
$
|
3.2
|
|
|
$
|
3.6
|
|
|
March 31,
2020 |
|
December 31,
2019 |
||||
Goodwill - Plant Nutrition North America Segment
|
$
|
50.5
|
|
|
$
|
55.4
|
|
Goodwill - Plant Nutrition South America Segment
|
218.4
|
|
|
281.6
|
|
||
Other
|
5.8
|
|
|
6.0
|
|
||
Total
|
$
|
274.7
|
|
|
$
|
343.0
|
|
7.
|
Income Taxes:
|
8.
|
Long-Term Debt:
|
|
March 31,
2020 |
|
December 31,
2019 |
||||
4.875% Senior Notes due July 2024
|
$
|
250.0
|
|
|
$
|
250.0
|
|
Term Loan due January 2025
|
397.5
|
|
|
400.0
|
|
||
Revolving Credit Facility due January 2025
|
59.0
|
|
|
160.0
|
|
||
6.75% Senior Notes due December 2027
|
500.0
|
|
|
500.0
|
|
||
3.7% Banco Itaú loan due March 2020
|
—
|
|
|
15.4
|
|
||
Banco Santander loan due October 2020
|
12.5
|
|
|
16.2
|
|
||
Banco Itaú loan due February 2021
|
9.4
|
|
|
—
|
|
||
Banco Rabobank loan due July 2021
|
13.5
|
|
|
17.4
|
|
||
Banco Santander loan due September 2021
|
15.4
|
|
|
19.9
|
|
||
Banco do Brasil loan due September 2021
|
9.6
|
|
|
12.4
|
|
||
Banco Rabobank loan due November 2021
|
13.5
|
|
|
17.4
|
|
||
Banco Santander loan due December 2021
|
11.6
|
|
|
14.9
|
|
||
Banco Votorantim loan due February 2022
|
7.7
|
|
|
—
|
|
||
Banco Santander loan due March 2022
|
2.9
|
|
|
—
|
|
||
Financiadora de Estudos e Projetos loan due November 2023
|
5.2
|
|
|
7.2
|
|
||
|
1,307.8
|
|
|
1,430.8
|
|
||
Less unamortized debt issuance costs
|
(14.0
|
)
|
|
(14.8
|
)
|
||
Total debt
|
1,293.8
|
|
|
1,416.0
|
|
||
Less current portion
|
(40.1
|
)
|
|
(52.1
|
)
|
||
Long-term debt
|
$
|
1,253.7
|
|
|
$
|
1,363.9
|
|
9.
|
Commitments and Contingencies:
|
10.
|
Operating Segments:
|
Three Months Ended March 31, 2020
|
|
Salt
|
|
Plant
Nutrition North America |
|
Plant
Nutrition South America |
|
Corporate
& Other(a) |
|
Total
|
||||||||||
Sales to external customers
|
|
$
|
287.8
|
|
|
$
|
60.6
|
|
|
$
|
62.8
|
|
|
$
|
2.7
|
|
|
$
|
413.9
|
|
Intersegment sales
|
|
—
|
|
|
0.3
|
|
|
0.1
|
|
|
(0.4
|
)
|
|
—
|
|
|||||
Shipping and handling cost
|
|
89.8
|
|
|
9.0
|
|
|
3.0
|
|
|
—
|
|
|
101.8
|
|
|||||
Operating earnings (loss)
|
|
56.9
|
|
|
5.2
|
|
|
0.3
|
|
|
(18.2
|
)
|
|
44.2
|
|
|||||
Depreciation, depletion and amortization
|
|
14.6
|
|
|
10.5
|
|
|
5.0
|
|
|
3.0
|
|
|
33.1
|
|
|||||
Total assets (as of end of period)
|
|
956.5
|
|
|
552.3
|
|
|
561.0
|
|
|
41.0
|
|
|
2,110.8
|
|
Three Months Ended March 31, 2019
|
|
Salt
|
|
Plant
Nutrition North America |
|
Plant
Nutrition South America |
|
Corporate
& Other(a) |
|
Total
|
||||||||||
Sales to external customers
|
|
$
|
306.4
|
|
|
$
|
37.2
|
|
|
$
|
57.7
|
|
|
$
|
2.4
|
|
|
$
|
403.7
|
|
Intersegment sales
|
|
—
|
|
|
0.5
|
|
|
1.5
|
|
|
(2.0
|
)
|
|
—
|
|
|||||
Shipping and handling cost
|
|
103.7
|
|
|
6.0
|
|
|
3.2
|
|
|
—
|
|
|
112.9
|
|
|||||
Operating earnings (loss)
|
|
52.3
|
|
|
(1.6
|
)
|
|
(2.6
|
)
|
|
(14.9
|
)
|
|
33.2
|
|
|||||
Depreciation, depletion and amortization
|
|
15.3
|
|
|
11.6
|
|
|
5.6
|
|
|
2.5
|
|
|
35.0
|
|
|||||
Total assets (as of end of period)
|
|
889.7
|
|
|
594.1
|
|
|
710.6
|
|
|
114.2
|
|
|
2,308.6
|
|
Three Months Ended March 31, 2020
|
|
Salt
|
|
Plant
Nutrition North America |
|
Plant
Nutrition South America |
|
Corporate
& Other(a) |
|
Total
|
||||||||||
Highway Deicing Salt
|
|
$
|
215.1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
215.1
|
|
Consumer & Industrial Salt
|
|
72.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
72.7
|
|
|||||
SOP and Specialty Plant Nutrients
|
|
—
|
|
|
60.9
|
|
|
41.1
|
|
|
—
|
|
|
102.0
|
|
|||||
Industrial Chemicals
|
|
—
|
|
|
—
|
|
|
21.8
|
|
|
—
|
|
|
21.8
|
|
|||||
Eliminations & Other
|
|
—
|
|
|
(0.3
|
)
|
|
(0.1
|
)
|
|
2.7
|
|
|
2.3
|
|
|||||
Sales to external customers
|
|
$
|
287.8
|
|
|
$
|
60.6
|
|
|
$
|
62.8
|
|
|
$
|
2.7
|
|
|
$
|
413.9
|
|
Three Months Ended March 31, 2019
|
|
Salt
|
|
Plant
Nutrition North America
|
|
Plant
Nutrition South America |
|
Corporate
& Other(a)
|
|
Total
|
||||||||||
Highway Deicing Salt
|
|
$
|
218.7
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
218.7
|
|
Consumer & Industrial Salt
|
|
87.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
87.7
|
|
|||||
SOP and Specialty Plant Nutrients
|
|
—
|
|
|
37.7
|
|
|
36.6
|
|
|
—
|
|
|
74.3
|
|
|||||
Industrial Chemicals
|
|
—
|
|
|
—
|
|
|
22.6
|
|
|
—
|
|
|
22.6
|
|
|||||
Eliminations & Other
|
|
—
|
|
|
(0.5
|
)
|
|
(1.5
|
)
|
|
2.4
|
|
|
0.4
|
|
|||||
Sales to external customers
|
|
$
|
306.4
|
|
|
$
|
37.2
|
|
|
$
|
57.7
|
|
|
$
|
2.4
|
|
|
$
|
403.7
|
|
(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, legal and finance functions.
|
|
|
Three Months Ended March 31,
|
||||||
Revenue
|
|
2020
|
|
2019
|
||||
United States(a)
|
|
$
|
257.9
|
|
|
$
|
238.3
|
|
Canada
|
|
77.4
|
|
|
87.4
|
|
||
Brazil
|
|
62.1
|
|
|
55.7
|
|
||
United Kingdom
|
|
11.8
|
|
|
17.3
|
|
||
Other
|
|
4.7
|
|
|
5.0
|
|
||
Total revenue
|
|
$
|
413.9
|
|
|
$
|
403.7
|
|
(a)
|
United States sales exclude product sold to foreign customers at U.S. ports.
|
11.
|
Stockholders’ Equity and Equity Instruments:
|
|
|
Fair value of options granted
|
$10.91
|
Exercise price
|
$58.91
|
Expected term (years)
|
4.75
|
Expected volatility
|
29.3%
|
Dividend yield
|
3.5%
|
Risk-free rate of return
|
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, 2019
|
|
887,867
|
|
|
$
|
64.21
|
|
|
217,413
|
|
|
$
|
52.07
|
|
|
179,397
|
|
|
$
|
61.43
|
|
Granted
|
|
94,945
|
|
|
58.91
|
|
|
83,337
|
|
|
58.92
|
|
|
69,635
|
|
|
82.38
|
|
|||
Exercised(b)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Released from restriction(b)
|
|
—
|
|
|
—
|
|
|
(4,517
|
)
|
|
39.75
|
|
|
—
|
|
|
—
|
|
|||
Cancelled/expired
|
|
(64,666
|
)
|
|
72.67
|
|
|
(27,981
|
)
|
|
50.18
|
|
|
(26,899
|
)
|
|
67.55
|
|
|||
Outstanding at March 31, 2020
|
|
918,146
|
|
|
$
|
63.07
|
|
|
268,252
|
|
|
$
|
54.61
|
|
|
222,133
|
|
|
$
|
67.26
|
|
(a)
|
Until the performance period is completed, PSUs are included in the table at the target level at their grant date and at that level represent one share of common stock per PSU.
|
(b)
|
Common stock issued for exercised options and for vested and earned RSUs and PSUs was issued from treasury stock.
|
Three Months Ended March 31, 2020(a)
|
Gains and
(Losses) on
Cash Flow
Hedges
|
|
Defined
Benefit
Pension
|
|
Foreign
Currency
|
|
Total
|
||||||||
Beginning balance
|
$
|
(0.6
|
)
|
|
$
|
(6.9
|
)
|
|
$
|
(184.6
|
)
|
|
$
|
(192.1
|
)
|
Other comprehensive income (loss) before reclassifications(b)
|
2.7
|
|
|
—
|
|
|
(173.5
|
)
|
|
(170.8
|
)
|
||||
Amounts reclassified from accumulated other comprehensive loss
|
(2.6
|
)
|
|
0.2
|
|
|
—
|
|
|
(2.4
|
)
|
||||
Net current period other comprehensive income (loss)
|
0.1
|
|
|
0.2
|
|
|
(173.5
|
)
|
|
(173.2
|
)
|
||||
Ending balance
|
$
|
(0.5
|
)
|
|
$
|
(6.7
|
)
|
|
$
|
(358.1
|
)
|
|
$
|
(365.3
|
)
|
Three Months Ended March 31, 2019(a)
|
Gains and
(Losses) on
Cash Flow
Hedges
|
|
Defined
Benefit
Pension
|
|
Foreign
Currency
|
|
Total
|
||||||||
Beginning balance
|
$
|
(0.7
|
)
|
|
$
|
(4.5
|
)
|
|
$
|
(205.7
|
)
|
|
$
|
(210.9
|
)
|
Other comprehensive income before reclassifications(b)
|
0.2
|
|
|
—
|
|
|
14.5
|
|
|
14.7
|
|
||||
Amounts reclassified from accumulated other comprehensive loss
|
(0.1
|
)
|
|
0.1
|
|
|
—
|
|
|
—
|
|
||||
Net current period other comprehensive income
|
0.1
|
|
|
0.1
|
|
|
14.5
|
|
|
14.7
|
|
||||
Ending balance
|
$
|
(0.6
|
)
|
|
$
|
(4.4
|
)
|
|
$
|
(191.2
|
)
|
|
$
|
(196.2
|
)
|
(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 loss presented in the tables above are reflected net of applicable income taxes.
|
(b)
|
The Company recorded a foreign exchange gain (loss) of $(75.5) million and $2.3 million in the three months ended March 31, 2020 and 2019, respectively, in accumulated other comprehensive loss related to intercompany notes which were deemed to be of a long-term investment nature.
|
|
|
|
|
|
|
||||
|
Amount Reclassified from AOCL
|
|
|
||||||
|
Three Months Ended
March 31, 2020 |
|
Three Months Ended
March 31, 2019 |
|
Line Item Impacted in the
Consolidated Statements of Operations
|
||||
Gains (losses) on cash flow hedges:
|
|
|
|
|
|
||||
Natural gas instruments
|
$
|
(0.3
|
)
|
|
$
|
(0.1
|
)
|
|
Product cost
|
Foreign currency contracts
|
(3.6
|
)
|
|
(0.1
|
)
|
|
Interest expense
|
||
Income tax expense
|
1.3
|
|
|
0.1
|
|
|
|
||
Reclassifications, net of income taxes
|
(2.6
|
)
|
|
(0.1
|
)
|
|
|
||
Amortization of defined benefit pension:
|
|
|
|
|
|
|
|||
Amortization of loss
|
$
|
0.2
|
|
|
$
|
0.1
|
|
|
Product cost
|
Reclassifications, net of income taxes
|
0.2
|
|
|
0.1
|
|
|
|
||
Total reclassifications, net of income taxes
|
$
|
(2.4
|
)
|
|
$
|
—
|
|
|
|
12.
|
Derivative Financial Instruments:
|
|
|
Asset Derivatives
|
|
Liability Derivatives
|
||||||||
Derivatives designated as hedging instruments:
|
|
Consolidated Balance Sheets Location
|
|
March 31, 2020
|
|
Consolidated Balance Sheets Location
|
|
March 31, 2020
|
||||
Commodity contracts
|
|
Other current assets
|
|
$
|
0.3
|
|
|
Accrued expenses and other current liabilities
|
|
$
|
0.9
|
|
Commodity contracts
|
|
Other assets
|
|
—
|
|
|
Other noncurrent liabilities
|
|
0.1
|
|
||
Swap contracts
|
|
Other current assets
|
|
1.7
|
|
|
Accrued expenses and other current liabilities
|
|
—
|
|
||
Total derivatives designated as hedging instruments(a)(b)
|
|
|
|
$
|
2.0
|
|
|
|
|
$
|
1.0
|
|
(a)
|
The Company has master netting agreements with both of its commodity hedge counterparties and accordingly has netted in its Consolidated Balance Sheets $0.3 million of its commodity contracts that are in a receivable position against its contracts in payable positions.
|
(b)
|
The Company has commodity hedge agreements with two counterparties and a foreign currency swap agreement with one counterparty. Amounts recorded as liabilities for the Company’s commodity contracts are payable to both counterparties and amounts recorded as assets for the Company’s foreign currency swap agreements are receivable from one counterparty.
|
|
|
Asset Derivatives
|
|
Liability Derivatives
|
||||||||
Derivatives designated as hedging instruments:
|
|
Consolidated Balance Sheets Location
|
|
December 31, 2019
|
|
Consolidated Balance Sheets Location
|
|
December 31, 2019
|
||||
Commodity contracts
|
|
Other current assets
|
|
$
|
0.3
|
|
|
Accrued expenses and other current liabilities
|
|
$
|
0.8
|
|
Commodity contracts
|
|
Other assets
|
|
0.1
|
|
|
Other noncurrent liabilities
|
|
0.2
|
|
||
Swap contracts
|
|
Other current assets
|
|
2.8
|
|
|
Accrued expenses and other current liabilities
|
|
—
|
|
||
Total derivatives designated as hedging instruments(a)(b)
|
|
|
|
$
|
3.2
|
|
|
|
|
$
|
1.0
|
|
(a)
|
The Company has master netting agreements with its commodity hedge counterparties and accordingly has netted in its Consolidated Balance Sheets $0.4 million of its commodity contracts that are in a receivable position against its contracts in payable positions.
|
(b)
|
The Company has both commodity hedge and foreign currency swap agreements with two counterparties each. Amounts recorded as liabilities for the Company’s commodity contracts are payable to both counterparties, and amounts recorded as assets for the Company’s foreign currency swap agreements are receivable from both counterparties.
|
13.
|
Fair Value Measurements:
|
|
March 31,
2020 |
|
Level One
|
|
Level Two
|
|
Level Three
|
||||||||
Asset Class:
|
|
|
|
|
|
|
|
||||||||
Mutual fund investments in a non-qualified savings plan(a)
|
$
|
1.3
|
|
|
$
|
1.3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Derivatives – foreign currency contracts, net
|
1.7
|
|
|
—
|
|
|
1.7
|
|
|
—
|
|
||||
Total Assets
|
$
|
3.0
|
|
|
$
|
1.3
|
|
|
$
|
1.7
|
|
|
$
|
—
|
|
Liability Class:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Liabilities related to non-qualified savings plan
|
$
|
(1.3
|
)
|
|
$
|
(1.3
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Derivatives – natural gas instruments, net
|
(0.7
|
)
|
|
—
|
|
|
(0.7
|
)
|
|
—
|
|
||||
Total Liabilities
|
$
|
(2.0
|
)
|
|
$
|
(1.3
|
)
|
|
$
|
(0.7
|
)
|
|
$
|
—
|
|
(a)
|
Includes mutual fund investments of approximately 30% in common stock of large-cap U.S. companies, 10% in common stock of small to mid-cap U.S. companies, 5% in international companies, 20% in bond funds, 10% in short-term investments and 25% in blended funds.
|
|
December 31,
2019 |
|
Level One
|
|
Level Two
|
|
Level Three
|
||||||||
Asset Class:
|
|
|
|
|
|
|
|
||||||||
Mutual fund investments in a non-qualified savings plan(a)
|
$
|
1.4
|
|
|
$
|
1.4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Derivatives – foreign currency contracts, net
|
2.8
|
|
|
—
|
|
|
2.8
|
|
|
—
|
|
||||
Total Assets
|
$
|
4.2
|
|
|
$
|
1.4
|
|
|
$
|
2.8
|
|
|
$
|
—
|
|
Liability Class:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Liabilities related to non-qualified savings plan
|
$
|
(1.4
|
)
|
|
$
|
(1.4
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Derivatives – natural gas instruments, net
|
(0.6
|
)
|
|
—
|
|
|
(0.6
|
)
|
|
—
|
|
||||
Total Liabilities
|
$
|
(2.0
|
)
|
|
$
|
(1.4
|
)
|
|
$
|
(0.6
|
)
|
|
$
|
—
|
|
(a)
|
Includes mutual fund investments of approximately 30% in the common stock of large-cap U.S. companies, 15% in the common stock of small to mid-cap U.S. companies, 5% in the common stock of international companies, 10% in bond funds, 20% in short-term investments and 20% in blended funds.
|
14.
|
Earnings per Share:
|
|
Three Months Ended
March 31, |
||||||
|
2020
|
|
2019
|
||||
Numerator:
|
|
|
|
||||
Net earnings
|
$
|
27.6
|
|
|
$
|
7.6
|
|
Less: net earnings allocated to participating securities(a)
|
(0.5
|
)
|
|
(0.2
|
)
|
||
Net earnings available to common shareholders
|
$
|
27.1
|
|
|
$
|
7.4
|
|
|
|
|
|
||||
Denominator (in thousands):
|
|
|
|
|
|
||
Weighted-average common shares outstanding, shares for basic earnings per share
|
33,892
|
|
|
33,874
|
|
||
Weighted-average awards outstanding(b)
|
—
|
|
|
—
|
|
||
Shares for diluted earnings per share
|
33,892
|
|
|
33,874
|
|
||
Net earnings per common share, basic
|
$
|
0.80
|
|
|
$
|
0.22
|
|
Net earnings per common share, diluted
|
$
|
0.80
|
|
|
$
|
0.22
|
|
(a)
|
Weighted participating securities include RSUs and PSUs that receive non-forfeitable dividends and consist of 412,000 and 233,000 weighted participating securities for the three months ended March 31, 2020 and 2019, respectively.
|
(b)
|
For the calculation of diluted net 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 1,266,000 and 788,000 weighted-average equity awards outstanding for the three months ended March 31, 2020 and 2019, respectively.
|
•
|
Employee welfare: Our management team has taken multiple actions to limit the exposure of employees to the spread of COVID-19, including instituting remote working where possible, adjusting shift schedules and crew sizes, restricting visitation to operational sites, prohibiting all business-related commercial air travel, and increasing sanitation of offices and common areas within our facilities.
|
•
|
Operations: Our manufacturing facilities in North America and Brazil remained in operation throughout the first quarter. Operations at our U.K. salt mine were idled near the end of March due to the very mild winter weather experienced in that market, along with U.K. government guidance on COVID-19 preventative measures.
|
•
|
Supply chain and logistics: To date, we have experienced no material supply chain or logistics issues. We continue to evaluate potential supply chain and logistics impacts, proactively increase inventory levels of critical sourced inputs and identify secondary suppliers where possible. Both our operations and our logistics partners are deemed “essential” under current governmental guidance and we have worked to ensure we understand and comply with their safety precautions to limit potential disruptions.
|
•
|
A protracted North American economic shutdown could lower bid volumes due to budgetary limitations or reduced traffic on the roadways.
|
•
|
Customer access to retailers in our North American markets could impact consumer and industrial product demand.
|
•
|
Potential reduced demand in our specialty crop markets in North America. As a result, we have lowered our 2020 Plant Nutrition North America volume guidance to 340,000 to 365,000 tons.
|
•
|
A significant decline in global demand of crops that use our Plant Nutrition South America products could reduce demand in this segment.
|
•
|
The largest rock salt mine in the world in Goderich, Ontario, Canada;
|
•
|
The largest dedicated rock salt mine in the U.K. in Winsford, Cheshire;
|
•
|
A solar evaporation facility located in Ogden, Utah, which is both the largest SOP production site and the largest solar salt production site in the Western Hemisphere;
|
•
|
Several mechanical evaporation facilities producing consumer and industrial salt; and
|
•
|
Several facilities producing essential agricultural nutrients and specialty chemicals in Brazil.
|
•
|
Total sales increased 3%, or $10.2 million, due to increases in both plant nutrition businesses, which were partially offset by a decrease in Salt sales.
|
•
|
Operating earnings increased 33%, or $11.0 million, due to increases in all businesses.
|
•
|
Earnings before interest, taxes, depreciation and amortization (“EBITDA”)* adjusted for items management believes are not indicative of our ongoing operating performance (“Adjusted EBITDA”)* increased 15%, or $10.4 million.
|
•
|
Diluted net earnings per share increased 264%, or $0.58.
|
•
|
Salt segment gross profit increased $5.4 million primarily due to higher average sales prices, which were partially offset by higher per-unit product cost due to costs resulting from upgrades to our mining equipment and sales of higher cost purchased salt.
|
•
|
The gross profit of the plant nutrition business, on a combined basis, increased $9.2 million. Plant Nutrition North America segment gross profit increased $5.8 million primarily due to higher sales volumes, lower production costs and lower per-unit shipping and handling costs, which was partially offset by lower average sales prices. Plant Nutrition South America segment gross profit increased $3.4 million primarily due to higher sales volumes and lower per unit product costs, which were partially offset by lower average sales prices.
|
•
|
The increase in SG&A expense was primarily due to higher corporate salaries and wages and incentive compensation in the current year compared to the prior year due, in part, to severance expense incurred in the current period.
|
•
|
The increase was primarily due to an increase in interest rates due to the refinancing of our debt in the fourth quarter of 2019.
|
•
|
We realized foreign exchange gains of $14.3 million in the first quarter of 2020 compared to a loss of $5.0 million in the first quarter of 2019 due primarily to changes in translating our intercompany loans from Canadian dollars to U.S. dollars.
|
•
|
The decrease in other expense (income) is primarily due to losses incurred in the current period related to our non-qualified plan for certain executives.
|
•
|
The increase in income tax expense was primarily due to higher pretax income in the first quarter of 2020 versus the first quarter of 2019 offset by the discrete tax expense items in the first quarter of 2019.
|
•
|
Our income tax provision in both periods differs from the U.S. statutory rate primarily due to U.S. statutory depletion, state income taxes, global intangible low-taxed income, foreign income, mining and withholding taxes and interest expense recognition differences for tax and financial reporting purposes.
|
•
|
Our effective tax rate declined from 39% in the first quarter of 2019 to 30% in the first quarter of 2020 primarily due to the impact of discrete tax items in the first quarter of 2019.
|
|
1Q 2020
|
|
1Q 2019
|
||||
Salt Sales (in millions)
|
$
|
287.8
|
|
|
$
|
306.4
|
|
Salt Operating Earnings (in millions)
|
$
|
56.9
|
|
|
$
|
52.3
|
|
Salt Sales Volumes (thousands of tons)
|
|
|
|
||||
Highway deicing
|
3,104
|
|
|
3,543
|
|
||
Consumer and industrial
|
469
|
|
|
551
|
|
||
Total tons sold
|
3,573
|
|
|
4,094
|
|
||
Average Salt Sales Price (per ton)
|
|
|
|
||||
Highway deicing
|
$
|
69.30
|
|
|
$
|
61.73
|
|
Consumer and industrial
|
$
|
154.84
|
|
|
$
|
159.23
|
|
Combined
|
$
|
80.53
|
|
|
$
|
74.84
|
|
•
|
Salt sales decreased 6%, or $18.6 million, primarily due to lower Salt sales volumes, which were partially offset by higher highway deicing average sales prices.
|
•
|
Salt average sales prices increased 8% and contributed $21.4 million to sales due to higher highway deicing prices.
|
•
|
Highway deicing average sales prices increased 12% due to higher North American highway deicing contract prices for the 2019-2020 winter season. Consumer and industrial average sales prices decreased 3% due to sales mix.
|
•
|
Salt sales volumes decreased 13%, or 521,000 tons, and unfavorably impacted sales by $40.0 million. Highway deicing sales volumes decreased 12% primarily as result of milder winter weather in the first quarter of 2020 in North America and the U.K. Consumer and industrial sales volumes also decreased 15% due to lower sales of deicing products.
|
•
|
Salt operating earnings increased 9%, or $4.6 million, due to higher highway deicing prices, which were partially offset by higher per-unit cost primarily due to lower production volumes in the U.K., costs related to upgrading our mining equipment at our Goderich mine and increased sales of higher cost purchased salt.
|
|
1Q 2020
|
|
1Q 2019
|
||||
Plant Nutrition North America Sales (in millions)
|
$
|
60.6
|
|
|
$
|
37.2
|
|
Plant Nutrition North America Operating Earnings (Loss) (in millions)
|
$
|
5.2
|
|
|
$
|
(1.6
|
)
|
Plant Nutrition North America Sales Volumes (thousands of tons)
|
96
|
|
|
57
|
|
||
Plant Nutrition North America Average Sales Price (per ton)
|
$
|
632
|
|
|
$
|
656
|
|
•
|
Plant Nutrition North America sales increased 63%, or $23.4 million due to higher sales volumes, which was partially offset by lower average sales prices.
|
•
|
Plant Nutrition North America sales volumes increased 68%, or 39,000 tons, which resulted in a $25.6 million increase in sales. Sales volume in the first quarter of 2019 were lower due to the cold and wet weather experienced in our key markets.
|
•
|
Plant Nutrition North America average sales prices decreased 4%, providing a $2.2 million offset to the increase in sales.
|
•
|
Plant Nutrition North America operating earnings increased $6.8 million to $5.2 million due to higher sales volumes, lower per-unit product and shipping and handling costs and lower selling, general and administrative expenses, which were partially offset by lower average sales prices.
|
|
1Q 2020
|
|
1Q 2019
|
||||
Plant Nutrition South America Sales (in millions)
|
$
|
62.8
|
|
|
$
|
57.7
|
|
Plant Nutrition South America Operating Earnings (Loss) (in millions)
|
$
|
0.3
|
|
|
$
|
(2.6
|
)
|
Plant Nutrition South America Sales Volumes (thousands of tons)
|
|
|
|
||||
Agricultural productivity
|
68
|
|
|
52
|
|
||
Chemical solutions
|
90
|
|
|
82
|
|
||
Total tons sold
|
158
|
|
|
134
|
|
||
Average Plant Nutrition South America Sales Price (per ton)
|
|
|
|
||||
Agricultural productivity
|
$
|
602
|
|
|
$
|
681
|
|
Chemical solutions
|
$
|
242
|
|
|
$
|
275
|
|
Combined
|
$
|
397
|
|
|
$
|
431
|
|
•
|
Plant Nutrition South America sales increased 9%, or $5.1 million, due to higher sales volumes, which were partially offset by lower average sales prices due to a 14% unfavorable weighted average change in the Brazilian reais versus the U.S. dollar from the prior year.
|
•
|
Plant Nutrition South America sales volumes increased 18%, or 24,000 tons, which accounted for $13.4 million of the increase in Plant Nutrition South America sales. Agricultural productivity sales volumes increased 31% due primarily to improvements in farmer economics and affordability of fertilizer products due to foreign exchange and barter rates. Chemical solutions sales volumes increased 10% due to higher sales of water treatment products.
|
•
|
An 8% decrease in Plant Nutrition South America average sales price reduced sales by $8.3 million. The decrease in average sales price was due to a 12% decrease in both chemical solutions and agricultural productivity prices as a result of the weighted average change in the Brazilian reais versus the U.S. dollar. In local currency, a stronger mix of agricultural productivity sales resulted in a 5% increase in average sales prices.
|
•
|
Plant Nutrition South America operating earnings increased $2.9 million to $0.3 million due to higher sales volumes and improved margins, partially offset by a weaker reais.
|
•
|
As a result of the mild first quarter winter weather, we expect Salt sales volumes for 2020 to range from 10.7 million tons to 11.1 million tons.
|
•
|
Plant Nutrition North America sales volumes for 2020 are expected to range from 340,000 tons to 365,000 tons.
|
•
|
We expect 2020 Plant Nutrition South America, sales volumes to range from 800,000 tons to 900,000 tons.
|
•
|
In light of the COVID-19 pandemic and its impact on the global economy and capital markets, we have temporarily suspended our strategic review of our Plant Nutrition South America business. For more information about the impact of the COVID-19 pandemic on the Company, see “–COVID-19 Pandemic” and “Part II–Item 1A–Risk Factors.”
|
THREE MONTHS ENDED MARCH 31, 2020
|
THREE MONTHS ENDED MARCH 31, 2019
|
Operating Activities:
|
|
» Net earnings were $27.6 million.
|
» Net earnings were $7.6 million.
|
» Non-cash depreciation and amortization expense was $33.1 million.
|
» Non-cash depreciation and amortization expense was $35.0 million.
|
» Working capital items were a source of operating cash flows of $171.7 million.
|
» Working capital items were a source of operating cash flows of $77.5 million.
|
Investing Activities:
|
|
» Net cash flows used by investing activities included $25.3 million of capital expenditures.
|
» Net cash flows used by investing activities included $21.5 million of capital expenditures.
|
Financing Activities:
|
|
» Net cash flows used by financing activities included the payment of dividends of $24.8 million.
» In addition, we had net payments on our debt $97.7 million.
|
» Net cash flows used by financing activities included the payment of dividends of $24.6 million.
» In addition, we had net payments on our debt of $64.9 million.
|
|
Three Months Ended
March 31, |
||||||
|
2020
|
|
2019
|
||||
Net earnings
|
$
|
27.6
|
|
|
$
|
7.6
|
|
Interest expense
|
19.0
|
|
|
16.2
|
|
||
Income tax expense
|
11.7
|
|
|
4.9
|
|
||
Depreciation, depletion and amortization
|
33.1
|
|
|
35.0
|
|
||
EBITDA
|
91.4
|
|
|
63.7
|
|
||
Adjustments to EBITDA:
|
|
|
|
||||
Stock-based compensation - non cash
|
2.4
|
|
|
1.1
|
|
||
(Gain) loss on foreign exchange
|
(14.3
|
)
|
|
5.0
|
|
||
Other expense (income), net
|
0.1
|
|
|
(0.6
|
)
|
||
Adjusted EBITDA
|
$
|
79.6
|
|
|
$
|
69.2
|
|
|
•
|
Disruptions or restrictions on our employees’ ability to work effectively due to illness, travel bans, quarantines, shelter-in-place orders or other limitations could impact our business.
|
•
|
Temporary closures of our facilities or the facilities of our customers or suppliers could reduce demand for our products or affect our ability to timely meet our customer’s orders and negatively impact our supply chain. Compliance with new governmental regulations, such as social distancing regulations, could increase our operational costs. Our mining and manufacturing facilities in North America and Brazil remained in operation throughout the first quarter of 2020; however, operations at our U.K. salt mine were idled near the end of March 2020 due to the mild 2019-2020 winter weather experienced in that market, along with U.K. government guidance on COVID-19 preventative measures.
|
•
|
Our mining and manufacturing facilities rely on raw materials and components provided by our suppliers. If the ongoing quarantining or similar measures cause delays along our supply chain, we could experience a mining or manufacturing slow-down or seek to obtain alternate sources of supply, which may not be available or may be more expensive. Disruptions to our supply chain and business operations, or to our suppliers’ or customers’ supply chains and business operations, could include disruptions from the closure of supplier and manufacturer facilities, interruptions in the supply of raw materials and components, personnel absences, or restrictions on the shipment of our or our suppliers’ or customers’ products, any of which could have adverse ripple effects on our business.
|
•
|
Global health concerns, such as COVID-19, could result in social, economic, and labor instability in the countries and localities in which we or our suppliers and customers operate. Any of these uncertainties could have a material adverse effect on our business, financial condition or results of operations.
|
•
|
The failure of third parties on which we rely, including our suppliers, customers, contractors, commercial banks and external business partners, to meet their respective obligations to the Company, or significant disruptions in their ability to do so, which may be caused by their own financial or operational difficulties, could have an adverse impact on our business, financial condition or results of operations.
|
•
|
Remote work arrangements for our employees could strain our technology resources and introduce operational risks, including heightened cybersecurity risk. Remote working environments may be less secure and more susceptible to hacking attacks, including phishing and social engineering attempts that seek to exploit the COVID-19 pandemic. These risks could also impact the third parties on which we rely.
|
•
|
The COVID-19 pandemic has significantly increased economic and demand uncertainty and has led to disruption and volatility in the global credit and financial markets, which increases the cost of capital and adversely impacts access to capital for both the Company and our customers and suppliers. Disruption and volatility in the global and financial
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
|
|
|
|
|
Date: May 6, 2020
|
By:
|
/s/ James D. Standen
|
|
|
|
James D. Standen
|
|
|
|
Chief Financial Officer
|
|
|
|
(Principal Financial and Accounting Officer)
|
|
•
|
The Age Discrimination in Employment Act, The Older Workers Benefit Protection Act, Title VII of the Civil Rights Act of 1964, 42 U.S.C. §§ 1981-1988, the Civil Rights Act of 1991, the Equal Pay Act, the Pregnancy Discrimination Act, the Americans with Disabilities Act, the Rehabilitation Act, and the Genetic Information Nondiscrimination Act.
|
•
|
the Employee Retirement Income Security Act (except for any vested benefits under any tax qualified benefit plan).
|
•
|
the Family and Medical Leave Act.
|
•
|
the Fair Labor Standards Act.
|
•
|
the Sarbanes-Oxley Act.
|
•
|
the Occupational Safety and Health Act.
|
•
|
the Immigration Reform and Control Act.
|
•
|
the Worker Adjustment and Retraining Notification Act.
|
•
|
the Fair Credit Reporting Act.
|
•
|
the Consolidated Omnibus Budget Reconciliation Act (COBRA).
|
•
|
the National Labor Relations Act.
|
•
|
the Kansas Act Against Discrimination.
|
•
|
the Kansas Age Discrimination in Employment Act.
|
•
|
the Kansas Service Letter Statute.
|
•
|
the Kansas Workers’ Compensation Act.
|
•
|
Kansas state wage payment and work hour laws.
|
Date:
|
February 21, 2020
|
|
/s/ Angela Y. Jones
|
|
|
|
|
Angela Y. Jones
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
|
|
|
|
|
Date:
|
2/24/2020
|
By:
|
/s/ Kevin Crutchfield
|
|
|
|
Name:
|
Kevin Crutchfield
|
|
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Title:
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CEO
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If to Consultant:
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If to the Company:
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Angela Y. Jones
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Compass Minerals International, Inc.
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(last known personal address and email)
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9900 West 109th Street, Suite 100
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Overland Park, KS 66210
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Attention: Chief Legal Officer
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Email: legal@compassminerals.com
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8.
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Miscellaneous.
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Company:
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Consultant:
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COMPASS MINERALS INTERNATIONAL, INC.
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By:
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/s/ Kevin Crutchfield
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/s/ Angela Y. Jones
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Kevin Crutchfield
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By: Angela Y. Jones
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President and CEO
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1.
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I have reviewed this quarterly report on Form 10-Q of Compass Minerals International, Inc.;
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2.
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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;
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3.
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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;
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4.
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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:
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(a)
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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;
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(b)
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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;
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(c)
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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
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(d)
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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
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5.
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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):
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(a)
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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
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(b)
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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.
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Date: May 6, 2020
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By:
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/s/ Kevin S. Crutchfield
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Kevin S. Crutchfield
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President and Chief Executive Officer
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1.
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I have reviewed this quarterly report on Form 10-Q of Compass Minerals International, Inc.;
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2.
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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;
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3.
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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;
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4.
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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:
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(a)
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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;
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(b)
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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;
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(c)
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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
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(d)
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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
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5.
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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):
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(a)
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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
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(b)
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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.
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Date: May 6, 2020
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By:
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/s/ James D. Standen
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James D. Standen
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Chief Financial Officer
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Date: May 6, 2020
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By:
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/s/ Kevin S. Crutchfield
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Kevin S. Crutchfield
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President and Chief Executive Officer
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By:
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/s/ James D. Standen
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James D. Standen
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Chief Financial Officer
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1
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Represents the number of citations and orders issued under section 104 of the Mine Act for alleged violations of mandatory health or safety standards that could significantly and substantially contribute to a mine health and safety hazard. The number reported includes no orders alleging an S&S violation issued under Section 104(g) of the Mine Act.
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2
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Represents the number of orders issued under section 104(b) of the Mine Act for alleged failures to abate a citation issued under section 104(a) of the Mine Act within the time period specified in the citation.
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3
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Represents the number of citations and orders issued under section 104(d) of the Mine Act for alleged unwarrantable failures (aggravated conduct constituting more than ordinary negligence) to comply with mandatory safety or health standards.
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4
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Represents the number of violations issued under section 110(b)(2) of the Mine Act for alleged “flagrant” failures (reckless or repeated failures) to make reasonable efforts to eliminate a known violation of a mandatory safety or health standard that substantially proximately caused, or reasonably could have been expected to cause, death or serious bodily injury.
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5
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Represents the number of orders issued under section 107(a) of the Mine Act for alleged conditions or practices which could reasonably be expected to cause death or serious physical harm before the condition or practice can be abated.
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6
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Section 104(e) written notices are issued for an alleged pattern of violating mandatory health or safety standards that could significantly and substantially contribute to a mine safety or health hazard.
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