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    CMP
    Earnings call· Jun 2026(Q3 FY26)

    COMPASS MINERALS INTERNATIONAL Q3 FY26 earnings call CMP

    Aug 6, 2026 Source

    Executive summary

    Compass Minerals Q3 FY26 — Plant Nutrition Outperforms, Strong Salt Pricing, Goderich Costs Remain a Focus

    Compass Minerals delivered a mixed Q3 FY26, with strong performance in Plant Nutrition driven by improved pricing and lower costs, leading to an upward revision of its full-year EBITDA guidance for the segment. The Salt business saw significant pricing gains in a tight market, but faced higher-than-anticipated production costs at the Goderich mine, impacting segment profitability. The company is actively addressing operational challenges and strengthening its balance sheet, while navigating potential tariff impacts and delaying a major capital project for careful planning.

    Highlights

    5

    • Plant Nutrition segment adjusted EBITDA of $15 million, up 32% year-over-year, exceeding the $40-50 million annual target.

    • Full-year Plant Nutrition segment adjusted EBITDA guidance raised to a range of $49 million to $57 million (from $43 million to $47 million previously).

    • Salt segment pricing increased 9% overall, with highway de-icing up 8% and C&I up 6%.

    • Net leverage declined to 2.8 times from 4.3 times a year ago, with total net debt reduced by $85.6 million year-over-year.

    • The 2026-2027 highway de-icing bid season has been "very constructive" with "double-digit" price improvement in core U.S. markets.

    Concerns

    4

    • Salt adjusted EBITDA decreased 15% to $38.9 million due to lower highway sales volumes and higher per-unit production and distribution costs.

    • Goderich mine production costs "have not come down the way we expected" due to lower hoisting, increased maintenance spending, and higher headcount.

    • The Goderich new mill project timeline is delayed to allow for additional evaluation of engineering, sequencing, and timing due to its complexity.

    • Tariffs on Canadian goods, primarily impacting Goderich salt shipments to the U.S., are set to take effect on August 19th.

    Guidance & targets

    6
    CategoryTargetConfidence
    Full-year Consolidated Adjusted EBITDA
    $218M-$242M
    high materiality
    High
    Plant Nutrition Segment Adjusted EBITDA
    $49M-$57M
    medium materiality
    High
    Salt Segment Adjusted EBITDA
    $225M-$236M
    medium materiality
    High
    Corporate and Other Costs
    $51M-$56M
    low materiality
    High
    Full-year Capital Expenditures
    $90M-$110M
    medium materiality
    High
    FY27 Highway De-icing Volume
    Reduced profile
    high materiality
    Medium

    Segment performance

    2
    SegmentRevenueYoYQoQMargin
    Salt
    Revenue increased 5% year-over-year. Adjusted EBITDA was down 15% and operating earnings decreased 25%. The decline reflects lower highway sales volumes and higher per-unit production and distribution costs, partially offset by pricing gains.
    Overall Pricing: 9% increaseHighway Pricing: 8% increaseC&I Pricing: 6% increaseHighway Sales Volumes: 6% declineC&I Sales Volumes: 3% increaseOperating Earnings: $21.2M (down 25%)
    		$173.9M5%—$38.9M Adjusted EBITDA
    Plant Nutrition
    Revenue decreased 16% year-over-year, primarily due to a 19% decrease in sales volumes attributable to the Windward SOP asset sale. Excluding the asset sale, volumes increased approximately 4%. Adjusted EBITDA improved 32% and operating earnings were up 50%, driven by declining product and distribution costs on a per-unit basis.
    Sales Volumes: 19% decrease (attributable to Windward SOP asset sale)Sales Volumes (excluding asset sale): ~4% increaseOperating Earnings: $7.8M (up 50% from $5.2M)
    		$37.6M-16%—$15M Adjusted EBITDA

    Operational metrics

    17
    Total Company Adjusted EBITDA
    $39.9Mdown from $41M
    Q3 FY26

    Compared with $41 million in the prior year quarter.

    Net Loss
    $5.7Mcompared to $7.7M
    Q3 FY26

    Compared to a net loss of $7.7 million in the prior year.

    Capital Expenditures
    $62.1Mcompared to $53.8M
    9 months FY26

    For nine months, compared to $53.8 million in the prior year, reflecting planned investments.

    Total Debt
    $716.6Mdown from $825.3M
    as of June 30, 2026

    As of June 30th, down from $825.3 million a year ago.

    Net Debt
    $660.3Mreduction of $85.6M
    as of June 30, 2026

    A reduction of $85.6 million year over year.

    Net Leverage Ratio
    2.8xdown from 4.3x
    as of June 30, 2026

    Improved from 4.3 times a year ago.

    Total Liquidity
    $328.1M
    as of June 30, 2026

    Consisting of $56.3 million in cash and $271.8 million of availability under revolving credit facility.

    Plant Nutrition Volume Growth (excluding asset sale)
    ~4%YoY
    Q3 FY26

    Excluding the impacts of the Windward sales volumes.

    Salt Segment Overall Pricing
    9%
    Q3 FY26

    Segment pricing was up 9% overall.

    Highway De-icing Pricing
    8%
    Q3 FY26

    Highway pricing was up 8%.

    C&I Pricing
    6%
    Q3 FY26

    C&I pricing was up 6%.

    Highway Sales Volumes
    -6%
    Q3 FY26

    Highway sales volumes declined 6%.

    C&I Sales Volumes
    3%
    Q3 FY26

    C&I volumes increased 3%.

    Plant Nutrition Per-Unit Costs
    DeclinedYoY
    Q3 FY26

    Both product costs and distribution costs declined on a per-unit basis year-over-year.

    Goderich Mine Production Tons
    UpYoY
    Q3 FY26

    Production tons on our mine are up year over year.

    Goderich Mine Production Costs
    Higher than anticipated
    Q3 FY26

    Costs, while lower than last year as original guidance had anticipated, have not come down the way we expected.

    Credit Rating
    —
    Q3 FY26

    A recent credit upgrade from S&P is a direct reflection of the work we've done to reduce debt and strengthen the business.

    Industry KPIs

    2
    MetricValueDetails
    Unit cash costDeclined per-unit
    Production sales volume by metal and by mineHighway -6%, C&I +3%%

    Deals & partnerships

    1
    EnergyXNon-binding MOU to evaluate leasing land and brine for lithium project

    A non-binding Memorandum of Understanding (MOU) with EnergyX to evaluate leasing them land and brine used in Utah operations. Compass Minerals has no plans to re-enter the lithium market and has no capital commitment or operational expenses related to this. Nothing in these negotiations has been finalized.

    Capital programs

    2
    Ogden Dryer Projectunderway

    Benefit: improve product yield, production volume, cost profile, finish good product quality

    Investment in Ogden to improve product yield, production volume, cost profile, and finish good product quality. Expected to complete by the end of next fiscal year.

    Goderich New Mill Projectdelayed

    Planning to construct a new mill at Goderich. Taking additional time to evaluate engineering, sequencing, timing, and establish appropriate project governance due to complexity within an operating underground mine. Detailed update on project timeline expected early next year.

    Risks & headwinds

    4
    Higher-than-anticipated production costs at Goderich mineCurrent period

    Costs have not come down the way we expected, despite being lower than last year. Driven by not hoisting enough tons at planned cost, increased maintenance spending at U.S. mines, and increased headcount.

    Mitigation: Accelerator teams working on operational improvements (cut times, rates, mine design), maintenance program delivering results, focus on sustainable cost improvement and risk mitigation.

    Logistics costs burdened by fuel and truck capacityCurrent period

    Total cost metric burdened by global fuel costs and increased rates due to tightening of truck capacity.

    Mitigation: Accelerator teams working on logistics and enterprise-wide improvements, including network optimization and procurement efficiency.

    Tariffs on Canadian goods (salt)Near-term (August 19th, 2026)

    Tariffs set to take effect on August 19th. A large majority of gross annualized exposure relates to highway de-icing salt shipped from Goderich mine into the United States.

    Mitigation: Proactive measures within commercial agreements, including pass-through provisions, are expected to meaningfully reduce exposure. The company is closely monitoring the situation and advocating to the government.

    Variability within the fuel marketMoving into next year (FY27)

    Incorporated into 2026 guidance.

    Mitigation: Current focus on mitigation efforts. Clear understanding of anticipated fuel impact and sensitivity to be provided with detailed 2027 guidance in Q4.

    What to watch in Q4 FY26

    5

    Goderich Mine Cost Efficiency

    Next quarter (Q4 FY26 results)
    CurrentCosts have not come down as expected, despite increased production.
    TargetEfficiency gains reflecting targeted improvements and lower per-unit costs.

    Why it matters

    Operational efficiency at the Goderich mine is crucial for the Salt segment's profitability and overall company performance.

    But costs, while lower than last year as original guidance had anticipated, have not come down the way we expected.

    Q&A highlights

    6

    What are the expectations for FY27 price growth, volumes given normalized weather, and cost trends, specifically regarding net back expansion?

    Management confirmed double-digit price increases for the bid season and expects reduced volumes for FY27 due to low inventories and normalized weather. They are actively working on mine costs and will provide detailed FY27 guidance in Q4.

    “it'd be safe to say overall, you know, we're kind of around double digits and price increase.”

    asked by Joel Jackson · answered by Edward Dowling

    3 min read8 chapters

    Detailed Narrative

    01

    Plant Nutrition Outperformance and Investment

    The Plant Nutrition segment delivered $15 million in adjusted EBITDA in Q3 FY26, marking a 32% year-over-year increase and exceeding the annual target range of $40-50 million. This strong performance is attributed to improved pricing and lower per-unit costs. The company is investing in a dryer project at Ogden, expected to be completed by the end of next fiscal year, which aims to further improve product yield, production volume, cost profile, and product quality for sulfate of potash.

    02

    Strong Salt Segment Pricing and Bid Season

    The Salt business realized meaningful price gains, with overall segment pricing up 9% year-over-year. Highway de-icing pricing increased 8%, and C&I pricing was up 6%. The 2026-2027 highway de-icing bid season has been described as "very constructive," showing "double-digit" price improvement in core U.S. markets. This is supported by structurally tight North American highway de-icing markets and historically low industry inventories following the past winter.

    03

    Goderich Mine Operational Challenges and Cost Management

    While production tons at the Goderich mine are up year-over-year, per-unit costs have not decreased as anticipated. This is primarily due to not hoisting enough tons at the planned cost, increased maintenance spending at U.S. mines to improve uptime, and higher headcount to maximize production. Management acknowledges a trade-off, spending incrementally on labor and maintenance for long-term operational stability, production volumes, and profitability, with efficiency gains yet to be fully realized.

    04

    Logistics and Enterprise-Wide Cost Initiatives

    Total logistics costs were burdened by global fuel costs and increased rates due to tightening truck capacity. The company has deployed accelerator teams focused on Goderich operational improvements, including cut times, rates, and mine design. Other teams are working on logistics, network optimization, procurement efficiency, and contract management to drive sustainable cost improvement and risk mitigation across the enterprise.

    05

    Leadership Change in Operations

    Patrick Marin is no longer with the company, and Brandon Reisner has been promoted to Chief Operating Officer. Mr. Reisner previously led operational improvements in the Plant Nutrition segment and the C&I product line, bringing a track record of positive outcomes and prior mining experience to his new role, which is expected to drive operational stability and efficiency.

    06

    Tariff Exposure and Mitigation Efforts

    Tariffs on Canadian goods, specifically impacting highway de-icing salt from the Goderich mine, are scheduled to take effect on August 19th. Compass Minerals has implemented proactive measures, including pass-through provisions in several key contracts, which are expected to "meaningfully reduce" its exposure to these risks. The company is also actively advocating to the government about the critical role of Goderich salt for U.S. public safety and interstate commerce.

    07

    Goderich New Mill Project Delay

    Plans to construct a new mill at Goderich are being re-evaluated, leading to a delay in the project timeline. This is due to the significant complexity of executing such a project within an operating underground mine, requiring additional time for engineering, sequencing, timing, and establishing appropriate project governance. A more detailed update on the project timeline is expected early next year.

    08

    Balance Sheet Strengthening and Capital Allocation Outlook

    The company has significantly strengthened its balance sheet, with net leverage declining to 2.8 times from 4.3 times a year ago, and total net debt down $85.6 million year-over-year. A recent credit upgrade from S&P reflects this improvement. Near-term capital allocation priorities include investment in assets and continued debt reduction. The Board is discussing other uses of capital, with more details expected to be shared with full-year results.

    AI-generated summary of the company’s earnings call. Not investment advice.