OVERLAND PARK, Kan.--(BUSINESS WIRE)--
Compass Minerals (CMP) reports that above average first-quarter
snow events in the company’s core North American service area offset
mild weather in December. This activity resulted in average winter
weather for the full-season ending March 2015.
In the first quarter of 2015, a total of 126 snow events were reported
in 11 representative cities in the company’s primary North American
highway deicing service area. This compares to the 10-year average of
115.3 events. For the winter period ending in March 2015, snow events
totaled 161 compared to the 10-year average of 162.3 events.
“With the strong end to winter, we expect that our customers will
request average volumes in the upcoming highway deicing bid season,”
said Fran Malecha, Compass Minerals’ president and chief executive
officer. “We also expect that producer inventories will be at typical
season-ending levels in our served markets. Our results in the first
quarter, however, were pressured by higher-than-expected costs that are
short term in nature. For the full-year, we still expect to earn between
$5.10 per share and $5.60 per share.”
Regional variation in snow event activity, combined with mild winter in
early January, limited salt product sales to 4.4 million tons in the
first quarter. This compares to
5.4 million in the prior year period when snow events significantly
exceeded the 10-year average. Highway deicing sales volumes alone in the
first quarter totaled 3.8 million tons. This result includes all highway
maintenance products sold in the U.S., Canada and the U.K., as well as
rock salt sold to the chemical industry.
The company currently expects that first-quarter salt segment operating
earnings will be negatively impacted by higher-than-expected per-unit
production costs resulting from unplanned downtime at its North American
rock salt mines, some of which was weather related. The company now
expects its salt segment operating margin to approximate 24 percent for
the first quarter.
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Salt Segment Update
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1H15 Guidance
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FY15 Guidance
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Metric
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Current
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Prior
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Current
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Prior
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Sales volumes
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Unchanged
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5.5 million to 6 million tons
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Unchanged
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12 to 13 million tons
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Average selling price (per ton)
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Unchanged
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$74 to $78
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Operating margin
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22% to 23%
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23% to 24%
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The company has published its first-quarter 2015 highway deicing sales
volume and regional weather data at www.compassminerals.com/marketdata.
The number of snow events reported may not directly correlate to Compass
Minerals’ deicing results due to a variety of factors, including the
relative significance to the company of the cities represented and
differences in the amount of salt purchased by customers to establish
their pre-season stockpiles. The weather data should be used only as an
indicator of the year-to-year variations in winter weather conditions in
these cities. Compass Minerals draws its weather data from the U.S.
National Weather Service and National Climatic Data Center, and
Environment Canada without weighting or other adjustments.
About Compass Minerals
Compass
Minerals is a leading provider of essential minerals that provide
solutions to nature’s challenges, including salt for winter roadway
safety and other consumer, industrial and agricultural uses, and
specialty plant nutrition minerals that improve the quality and yield of
crops. The company produces its minerals at locations throughout the
U.S. and Canada and in the U.K. For more information about Compass
Minerals and its products, please visit www.compassminerals.com.