Compass Minerals Intl Inc

Thank you for standing by. My name is Kate and I will be your conference operator today. At this time, I would like to welcome everyone to Compass Minerals first quarter fiscal 2026 earnings call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed with the number one on your telephone keypad. If you would like to withdraw your question, press star one again. Thank you. I would now like to turn the call over to Brent Collins, VP, Treasurer Investor Relations. Please go ahead.

Thank you, Operator. Good morning and welcome to the Compass Minerals Fiscal First Quarter 2026 Earnings Conference Call. Today we will discuss our most recent quarterly results. We will begin with prepared remarks from our President and CEO, Edward Dowling, and our CFO, Peter Feldman. Joining in for the question and answer portion of the call will be Ben Nichols, our Chief Commercial Officer, and our Chief Operations Officer, Pat Marin. Before we get started, I'll remind everyone that the remarks we make today reflect financial and operational outlooks as of today's date, February 5th, 2026. These outlooks entail assumptions and expectations that involve risks and uncertainties that could cause the company's actual results to differ materially. The discussion of these risks can be found in our SEC filings located online at investors.compassminerals.com. Our remarks today also include certain non-GAAP financial measures. You can find reconciliations of these items in our earnings release or in our presentation, both of which are available online. I'll now turn the call over to Ed.

Thank you, Brent. Compass Minerals had a strong start to the year. For the first time since 2023, were reporting positive quarterly net income. For the first quarter of 2026, reported net income of 43 cents compared with a net loss of 57 cents a year ago. Adjusted EBITDA doubled to 65 million. We took leverage down year on year by nearly two turns to 3.6 times, and we raised the midpoint of our full year adjusted EBITDA guidance range to 224 million based on solid results in the salt business and positive momentum in the plant nutrition partly offset by the planned sale of our vineyard SOP operation. A midpoint of our revised guidance would have been up about 4%. Let me get into where we are in the salt business. There's been steady winter weather this year across many of our North American markets we serve, excluding the western part of the U.S. Year over year, Compass Minerals saw sizable increases in sales volumes. We also benefited from price increases in both highway de-icing and CNI parts of the business. With a strong start to the winter, short-term market for the entire salt industry is really tight. Compass Minerals continues to focus on efficient and safe delivery of every ton of salt possible, understanding the critical role that we and others in the industry play in the communities we serve. In any given season, our ability to service excess market demand in season can be limited by the compressed timing of regional winter weather and any associated demand surge. We forward deploy SALT throughout the year across our depot network as there is meaningful lead time across our production and supply chain to reach many of the regions we serve, particularly mid-season. For reasons I'll discuss more in a moment, our ability to meet excessive demand if it materialized in this specific season was always going to be limited. We do not plan our business assuming that we will have above-average winters, and we've been very clear about our commitment to managing inventories, maintaining financial discipline, and focusing on value over volume. I'll make a few comments on the changes to our outlook in the SALT segment as we recognize that they may not be intuitive to the midst of a strong winter. What I want to make clear up front is that our guidance does not represent, quote, unquote, a new normal for this kind of winter. Our plans for the business are expected to allow for more flexible operations in the future, and we have more work to do to get there. I'd first reiterate why we put our back-to-basics strategy in place beginning in 24. The company's prior approach was to operate so that never missed a big winter. I won't bore you this morning with the details of how that ended, But suffice to say that it directly led to excess inventory over multiple years, a stress balance sheet with all the adverse impacts on market value expected to break. We're committed not to repeat the mistakes of the past, made the right decision to align the business more closely with anticipated market demand and have managed inventories accordingly. Over time, as the balance sheet continues to improve and market dynamics adjust to historical norms, The optionality within our inventory management strategy will evolve. We've been very open that our inventory management plan could preclude our ability to meet excessive demand in fiscal 2026. Our inventory production planning are informed by three factors. The first two I just discussed. First, the customer level commitments and a desire to keep inventory levels closely aligned to market demand. And second, effective placement of salt inventories, BIA, our salt supply chain. Third factor is production rates and capabilities at the mines, which I'll now comment to. Godrich Mine is in a period of high development. The mine is currently developing a number of new mining panels, which require the construction of new underground infrastructure and ground support. New development panels inherently have higher costs and lower production rates than panels that are in full production. This is not a new issue and was incorporated in our initial guidance for the year. The development sequence is important as it governs our ability to produce at the higher end of historic production levels. Advancing these development panels will improve the optionality and flexibility within the production plan at Godrich Mine, but in the near term, the mine's ability to produce at the higher end of historical rates will be limited. Within this context, the production ramp up at Godrich Mine in mid-fiscal 2025 would later than anticipated do to uncertainties around the applicability of the USMCA and subsequent hiring and qualifying of miners. Currently, Goudridge is producing a significantly higher rate year on year, and we're generally pleased with the direction of travel regarding our production level. That being said, we have some more work to mitigate greater than anticipated unplanned downtime, as well as to further improve operating efficiencies. These factors are somewhat limiting in our ability to service incremental in-season demand creating headwinds for production costs per ton, working our way through these issues, including improvements to preventive maintenance and overhaul programs, to name a few. Despite those challenges, we still have a solid quarter in salt. Moving over to plant nutrition business, we continue to see momentum in our story. Over the last year or so, we've talked a lot about improving the performance of the business, which is largely premised on restoring the health of the pond complex at Ogden. This is succeeding. As the pond complex continues to improve, the quality of the feedstock that goes into Ogden also improves, provides benefits on how the plant operates, drive costs down. We've continued to make progress on this initiative, and we've seen product costs trend down. On the pricing front, our team has done a good job for maintaining market value of our SOP portfolio. We're seeing a $20 improvement in price compared to our expectation. The decrease in anticipated sales volume relates to us prioritizing having SOP available to pursue additional domestic business over lower margin export opportunities. We announced in our press release yesterday that we have entered into an agreement to sell our Wynyard SOP operation in Canada for $30.8 million, subject to customary closing conditions. Considering the improvements we're seeing in our Ogden operation, coupled with our read on future market conditions, We believe now is an opportune time to pursue this transaction, allowing us to further focus our efforts on North American leading producer of SOP. Improvements that we're seeing at Ogden are allowing us to increase our adjusted EBITDA guidance for the plant nutrition business by 8% in a midpoint of $37 million, despite the sale of the vineyard operation. We've talked before about the importance of returning this business to a level where it consistently carries a $40 million EBITDA handle, absent a win-year sale, we would have grinded to this value in this quarter. We think that we have line of sight of getting there in the coming quarters without win-year. Next phase of improvement involves capital project to upgrade the dryer compaction plant in Ogden, which we expect to boost both operational efficiency and finance financial performance. As we look to the remainder of the year, we are focused on people, processes, and systems and focuses on executing our back to basics framework. This approach is anchored in five core priorities. Improving operational efficiencies and capabilities to enhance performance and reliability across the organization. Reducing capital intensive by deploying resources in a disciplined manner. Simplifying processes and eliminating unnecessary complexity to accelerate decision making and improve accountability. maximize cash flow generation to support long-term value creation, and reducing leavens to reinforce financial resiliency and provide capital allocation flexibility. The balance sheet and financial health of the company continue to improve. So I mentioned at the beginning of my remarks, our leverage ratio has improved significantly over the last year. We've grown confidence in continuing improvement in our leverage profile. We plan to begin conversations with the board but approaches around capital allocation. This is all consistent with the progression of our back-to-basics framework. As the first quarter results demonstrate, we are clearly making positive strides in improving our operational, commercial, and financial performance. Some of these improvements are visible now, such as the strong results we're seeing in plant nutrition business and the continuing improvement in our leverage program. Some, as fully optimized production in our salt mines, will take more time to fully manifest themselves. We're committed to becoming a top tier operator, grounded in financial strength and operational excellence. As a leadership team, we're focused on building a company with resiliency and flexibility to thrive over the long term. Our responsibility is to deliver consistency against our back to basics framework. Journey isn't finished, but progress is unmistakable. We're moving confidently towards the organization we know we can be. With that, I'll turn the call over to Peter for a review of our first quarter results.