Compass Minerals International Inc (CMP) Reports Fiscal 2023 Results and Provides 2024 Outlook
Compass Minerals International Inc (NYSE:CMP) reports a net income of $15.5 million for fiscal 2023, a significant improvement from the previous year's net loss.
Adjusted EBITDA increased by 7% year-over-year, despite lower sales volumes in Salt and Plant Nutrition businesses.
Compass Minerals International Inc (NYSE:CMP) provides a financial outlook for fiscal 2024, with expectations of increased Salt sales volumes and lower Plant Nutrition profitability.
On November 16, 2023, Compass Minerals International Inc (NYSE:CMP) released its 8-K filing, announcing its fiscal fourth-quarter and full-year 2023 results, along with a financial outlook for fiscal 2024. The company highlighted a return to profitability with a net income of $15.5 million for the fiscal year 2023, compared to a net loss of $37.3 million in the previous year. Adjusted EBITDA for the company rose by 7% year over year, reaching $200.8 million, despite lower sales volumes in both Salt and Plant Nutrition businesses.
Fiscal 2023 Performance Summary
Compass Minerals International Inc (NYSE:CMP) reported a 3% year-over-year decline in consolidated revenue, totaling $1.2 billion for fiscal 2023. The company faced a below-average 2022-2023 deicing season and adverse weather conditions in California, which negatively impacted the Plant Nutrition business. However, improved profitability in the Salt business, driven by an effective value-over-volume commercial strategy, led to gains in consolidated operating earnings, which increased by $36.2 million to $79.1 million. Adjusted EBITDA also saw a rise of $12.3 million year over year.
Salt and Plant Nutrition Business Highlights
The Salt segment's fiscal 2023 fourth-quarter revenue decreased slightly by 1% year over year, with a 9% increase in price offset by a 9% decrease in total sales volumes. Operating earnings for the segment increased by 91% to $28.8 million, and adjusted EBITDA improved by 29% to $44.4 million from the prior-year period. For the full fiscal year, the Salt segment maintained its revenue at $1.0 billion, with operating earnings and adjusted EBITDA up significantly by 47% and 26%, respectively.
Conversely, the Plant Nutrition segment experienced a 39% decrease in fourth-quarter revenue year over year, primarily due to a 26% decrease in price and an 18% decrease in sales volumes. The segment reported an operating loss of $1.6 million for the quarter, with adjusted EBITDA declining to $6.7 million. For the full fiscal year, revenue for the segment fell by 23%, with operating earnings and adjusted EBITDA also experiencing declines.
Fire Retardant Business and Lithium Project Updates
Compass Minerals International Inc (NYSE:CMP) completed the acquisition of the remaining 55% ownership of Fortress North America (Fortress) and realized its first commercial sales during the 2023 fire season. The company also provided an update on its lithium project, indicating an indefinite pause in new investment due to regulatory uncertainties in Utah.
Financial Position and Cash Flow
Net cash provided by operating activities amounted to $101.1 million for fiscal 2023, with net cash used in investing activities totaling $173.0 million. The company ended the fiscal year with $317.0 million of liquidity, including cash and cash equivalents and availability under its revolving credit facility.
Fiscal 2024 Outlook
Looking ahead to fiscal 2024, Compass Minerals International Inc (NYSE:CMP) expects Salt sales volumes to increase by 3% to 5%, assuming average winter weather. The company anticipates lower Plant Nutrition profitability due to lower sulfate of potash pricing, despite a projected rebound in sales volumes. Total capital expenditures for fiscal 2024 are projected to be within a range of $125 million to $140 million.
For more detailed financial tables and further discussion on Compass Minerals International Inc (NYSE:CMP)'s fiscal 2023 performance and outlook for fiscal 2024, readers are encouraged to view the full 8-K filing.
Explore the complete 8-K earnings release (here) from Compass Minerals International Inc for further details.
This article first appeared on GuruFocus.
