OVERLAND PARK, Kan. - Compass Minerals (NYSE: CMP), a significant player in the global essential minerals market, disclosed preliminary financial outcomes for its fiscal 2024 third quarter on Tuesday. The company highlighted robust performance in its Salt and Plant Nutrition segments, despite ongoing restatements of past financials due to accounting errors.
According to the preliminary data, Compass Minerals reported revenue of $202.9 million and adjusted EBITDA of $32.8 million for the quarter ending June 30, 2024. Despite a net loss of $43.6 million, or $1.05 per diluted share, the company noted improvements in its core business areas.
Edward C. Dowling Jr., Compass Minerals' President and CEO, acknowledged the delay in disclosing positive results due to historical accounting issues but emphasized the strong performance of the core businesses. Dowling Jr. expressed his commitment to operational excellence, cash generation, and balance sheet deleveraging, aiming for higher shareholder returns.
The financial restatement process, which began with the identification of misstatements in prior quarterly and annual reports, is ongoing. The company is working with auditors to correct these errors, which primarily relate to contingent consideration from the acquisition of Fortress North America, LLC. Although the restatements do not materially affect the company's adjusted EBITDA or the fundamentals of its core businesses, the completion date remains uncertain.
In the Salt segment, Compass Minerals saw a preliminary adjusted EBITDA per ton of $28.05 and increased its mid-point adjusted EBITDA guidance for 2024 by $15 million. The Plant Nutrition segment reported a sequential 2% increase in the average sales price for sulfate of potash to $691.27 per ton, with adjusted EBITDA per ton and margin reaching $128.57 and 18.6%, respectively.
The company also provided updates on the Fortress North America business, which is under review for its future direction, and its liquidity position, ending the quarter with $220.8 million in liquidity.
Looking ahead, Compass Minerals revised its 2024 guidance for both the Salt and Plant Nutrition segments, reflecting adjustments due to lower sales volumes, increased costs, and higher pricing. The company continues to focus on reducing salt inventory levels and converting excess inventory to cash.
This report is based on a press release statement and reflects the preliminary financial results for Compass Minerals' third quarter of fiscal 2024. The company's actual results may differ once the financial restatements are completed and the quarter-end closing procedures are finalized.
In other recent news, Compass Minerals is faced with a New York Stock Exchange compliance issue due to a delay in filing its quarterly financial report. The delay is attributed to necessary restatements of the company's financial statements for several previous quarters. Compass Minerals has received a noncompliance notice but remains committed to regaining compliance swiftly.
There have been significant changes in the leadership team at Compass Minerals. Ashley Ward has been appointed as Vice President, Corporate Controller, and Principal Accounting Officer, while the company announced the immediate resignation of its Chief Operations Officer, Gordon Dunn. Furthermore, Jeffrey Cathey has been named the new Chief Financial Officer.
On the financial front, Compass Minerals reported mixed second-quarter fiscal 2024 results, with decreased sales volumes in its Salt segment due to mild winter weather. However, there was a 9% increase in gross revenue per ton and an 11% increase in net revenue per ton year-over-year. The company has implemented measures such as suspending dividends and temporarily reducing production at its Goderich mine to improve cash flow and reduce debt. Compass Minerals is also exploring strategic alternatives for the Fortress business and has amended its credit facility for covenant relief. These are among the recent developments at Compass Minerals.
InvestingPro Insights
Compass Minerals (NYSE: CMP) has been navigating through a challenging period marked by accounting restatements and a fluctuating market. The InvestingPro platform provides a more granular look at the company's financial health and market performance, offering insights that could be crucial for investors considering Compass Minerals.
InvestingPro Data reveals a market capitalization of $380.68 million, indicating the size and scale of the company within the minerals market. Despite a negative P/E ratio of -4.39 reflecting recent losses, analysts have set a fair value at $17, suggesting potential upside from the previous close price of $9.21.
One of the notable InvestingPro Tips for Compass Minerals is the expectation of net income growth this year. This aligns with the company's preliminary report of improvements in its core business areas, despite a net loss in the most recent quarter. The tip that Compass Minerals has maintained dividend payments for 21 consecutive years is indicative of the company's commitment to providing shareholder returns, even though it's not currently profitable over the last twelve months.
Investors seeking additional insights can find more InvestingPro Tips for Compass Minerals. The platform lists a total of 13 tips that can provide a deeper understanding of the company's financial position and future prospects.
By considering these InvestingPro Insights, investors can gain a more comprehensive view of Compass Minerals' performance and potential, beyond the preliminary financial results and ongoing restatement process.
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