Compass Minerals International, Inc. Announces Fourth Quarter and Yearend 2003 Results
OVERLAND PARK, Kan.--Feb. 1, 20042, 2004--Compass Minerals International, Inc. , a leading producer and marketer of salt and specialty potash, reported the following results:-- Fourth-quarter 2003 net income available for common stock was $15.9 million, or $0.50 per diluted share. Exclusive of non-recurring items, net income available for common stock was $18.2 million, or $0.57 per diluted share.
-- Full-year 2003 net income available for common stock was $34.2 million, or $1.01 per diluted share. Exclusive of non-recurring items, net income available for common stock was $28.3 million, or $0.83 per diluted share.
-- Sales for the quarter were $202.1 million. Sales include revenues from the sale of products, or "product sales," as well as pass-through shipping and handling fees charged to customers to reimburse us for shipping and handling costs incurred on their behalf. Fourth-quarter product sales were $146.1 million in 2003.
-- Full-year 2003 sales were $600.6 million and product sales were $435.3 million.
Results Comparisons
(in thousands except for EPS)
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4Q 2003 4Q 2002 FY 2003 FY 2002
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Net income available for common
stock $15.9 $15.9 $34.2 $8.3
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Net income available for common
stock excluding non-recurring
items 18.2 16.9 28.3 15.9
----------------------------------------------------------------------
Fully diluted EPS 0.50 0.44 1.01 0.23
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Fully diluted EPS, excluding
non-recurring items 0.57 0.47 0.83 0.45
----------------------------------------------------------------------
Adjusted EBITDA 53.5 51.4 140.1 122.4
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"Our strong fourth-quarter and full-year sales were driven by volume increases in both our highway deicing and general trade businesses," said Michael E. Ducey, president and CEO of Compass Minerals International. "Our general trade business benefited from increased demand for consumer deicing salt due to the above-average winter weather on the East Coast. The fourth-quarter increase in our highway deicing business was principally the result of a year-over-year increase in volume commitments secured by our sales force during the bid season. With brisk first-quarter demand for consumer and highway deicing salt, we are seeing a strong start to 2004 and have already posted above-average sales in January."
The Company's board of directors has declared a quarterly cash dividend of $0.1875 per share on its outstanding common stock, payable on March 15, 2004 to stockholders of record as of the close of business on March 1, 2004.
Earnings Call
Compass Minerals International, Inc. will discuss its fourth-quarter and 2003 year-end financial results on a conference call on February 12, 2004 at 10 a.m. EST. The call will be broadcast on the company's Web site at www.CompassMinerals.com and can be accessed by calling 877-228-7138. Outside of the U.S. and Canada, callers should dial 706-643-0377. Slides for the presentation will be available on the Compass Minerals Web site immediately before the call. Replays of the call will be available on the company's Web site for two weeks. The replay can also be accessed by phone for seven days at 800-642-1687, Conference ID 5081653. Outside of the U.S. and Canada, callers should dial 706-645-9291.
About Compass Minerals
Based in the Kansas City metropolitan area, Compass is the largest producer of highway deicing salt in North America and the United Kingdom and operates the largest rock salt mines in these regions. The company is also the third largest producer of general trade salt in North America and the second largest in the United Kingdom, serving major retailers, agricultural cooperatives and food producers. In addition, Compass is the largest producer of sulfate of potash in North America, which is used in the production of specialty fertilizers.
Non-GAAP Measures
The Company's calculation of net income available for common stock excluding non-recurring items, "EBITDA" (earnings before interest, taxes, depreciation and amortization) and "Adjusted EBITDA" (EBITDA adjusted for non-recurring items and other income/expense) are non-GAAP measures. Such measurements are not recognized in accordance with generally accepted accounting principles (GAAP) and should not be viewed as an alternative to GAAP measures of performance. Furthermore, such measures may not be comparable to the calculation of these measures by other companies.
Management believes that these non-GAAP measures can assist investors in understanding our cost structure, cash flows and financial position. Management further believes it would be helpful to provide an analysis that describes our ability to satisfy our debt service, capital expenditures and working capital requirements in terms of EBITDA and Adjusted EBITDA. The Company's financial covenants and ratios in our senior credit facilities and indentures are also tied to measures that are calculated by adjusting EBITDA as described below.
Excluding non-recurring items from net income available for common stock is meaningful to investors because it provides insight with respect to ongoing operating results of the Company.
Certain statements in this press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on the Company's current expectations and involve risks and uncertainties that could cause the Company's actual results to differ materially from those set forth in the statements. There can be no assurance that such expectations will prove to be correct. Factors that could cause the Company's results to differ materially from current expectations include: general economic and business conditions, industry trends, weather, raw material costs and availability, changes in demand for the Company's products, actions of the Company's competitors and the additional factors and risks contained in the Company's registration statement on Form S-1 filed with the Securities and Exchange Commission on December 11, 2003.
Adjusted EBITDA Reconciliation
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4Q 2003 4Q 2002 FY 2003 FY 2002
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Net income $15.9 $18.6 $27.2 $18.9
Income tax expense 7.4 12.1 8.4 11.4
Interest expense 15.8 10.6 56.3 42.4
Depreciation and amortization 10.9 8.4 42.1 37.1
--------------------------------
EBITDA 50.0 49.7 134.0 109.8
Adjustments to income from operations:
Restructuring and other charges 2.4 0.9 2.4 7.7
Other (income) expense (1) 1.1 0.8 3.7 4.9
--------------------------------
Adjusted EBITDA 53.5 51.4 140.1 122.4
================================
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(1) "Other (income) expense" primarily includes losses on early
retirements of debt ($5.3 million in FY2002), costs related to
amending our senior credit facilities ($1.4 million in FY2003),
gain related to early extinguishment of debt ($1.9 million in
FY2003), interest income, and non-cash foreign exchange gains and
losses in all periods.
Net Income Available for Common Stock,
Excluding Non-recurring Items Reconciliation
======================================================================
4Q 2003 4Q 2002 FY 2003 FY 2002
-----------------------------------
Net income available for
common stock $15.9 $15.9 $34.2 $8.3
Plus (less) non-recurring items:
Transition costs, net of tax (a) --- 1.0 --- 7.6
Initial public offering costs, net
of tax (b) 2.3 --- 2.3 ---
Gain on redemption of preferred
stock (c) --- --- (8.2) ---
-----------------------------------
Net income available for common
stock, excluding non-recurring
items 18.2 16.9 28.3 15.9
===================================
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(a) In 2002, restructuring and other charges represent transition
costs that are non-recurring in nature and relate to charges
required to establish us as a self-sustaining entity. We incurred
$1.0 million and $7.7 million (approximately $1.0 million and $7.6
million, net of tax) of transition costs in the fourth-quarter and
full-year 2002, respectively, consisting primarily of one-time
compensation costs, costs to develop stand-alone tax and inventory
strategies, and costs associated with determining the post-closing
purchase price adjustment. No such costs were incurred in 2003.
(b) In fourth-quarter 2003, we incurred $2.4 million ($2.3 million,
net of tax) of costs directly related to the completion of our
initial public offering. The shares of common stock sold were
shares previously held by stockholders and we did not receive any
proceeds from the sale of shares. Therefore, the costs related
to the initial public offering were recorded as other charges on
our statement of operations.
(c) We recorded an $8.2 million gain on redemption of preferred stock
resulting from the repurchase of 14,704 shares of mandatorily
redeemable preferred stock in June 2003. The gain was treated as
an increase to net income available for common stock. No such
redemptions occurred in 2002.
COMPASS MINERALS INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited - in millions, except share data)
4Q 2003 4Q 2002 FY 2003 FY 2002
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Sales $202.1 $165.7 $600.6 $502.6
Cost of sales -
shipping and handling 56.0 46.3 165.3 137.5
Cost of sales -
products 88.8 65.9 288.3 239.2
------------------------------------------------
Gross profit 57.3 53.5 147.0 125.9
Selling, general and
administrative expenses 14.7 10.5 49.0 40.6
Restructuring and
other charges 2.4 0.9 2.4 7.7
------------------------------------------------
Operating earnings 40.2 42.1 95.6 77.6
Other (income) expense:
Interest expense 15.8 10.6 56.3 42.4
Other, net 1.1 0.8 3.7 4.9
------------------------------------------------
Income before income taxes 23.3 30.7 35.6 30.3
Income tax expense 7.4 12.1 8.4 11.4
------------------------------------------------
Net income 15.9 18.6 27.2 18.9
Dividends on redeemable
preferred stock --- 2.7 1.2 10.6
Gain on redemption of
preferred stock --- --- (8.2) ---
------------------------------------------------
Net income available
for common stock 15.9 15.9 34.2 8.3
================================================
Net income per share, basic 0.53 0.45 1.05 0.24
Net income per share,
diluted 0.50 0.44 1.01 0.23
Basic weighted-average
shares outstanding 30,173,200 35,103,830 32,492,792 35,039,110
Diluted weighted-average
shares outstanding 32,074,416 36,064,684 33,983,983 35,474,539
Sales Volumes
(in thousands of tons)
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4Q 2003 4Q 2002 FY 2003 FY 2002
--------------------------------------
Highway Deicing 3,308 2,699 9,663 7,965
General Trade 885 860 2,927 2,786
Specialty potash fertilizers 68 61 251 242
COMPASS MINERALS INTERNATIONAL, INC.
CONSOLIDATED BALANCE SHEETS
December 31, 2003 and 2002
(condensed and unaudited - in millions)
2003 2002
-------------------
Cash and cash equivalents $2.6 $11.9
Receivables, net 117.4 94.5
Inventories 96.7 96.5
Other current assets 3.7 0.7
Property, plant and equipment, net 262.0 263.4
Intangible assets - mineral interests and other, net 172.7 149.8
Other non-current assets 31.4 27.3
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Total assets $686.5 $644.1
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Current liabilities 114.0 102.6
Long-term debt, net of current portion 602.5 503.3
Notes due to related parties, including accrued
interest --- 3.3
Deferred income taxes 95.7 99.2
Other noncurrent liabilities 18.4 25.3
Redeemable preferred stock --- 19.1
Total stockholders' equity (deficit) (144.1) (108.7)
-------------------
Total liabilities and stockholders' equity
(deficit) $686.5 $644.1
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