Compass Minerals International (NYSE:CMP) reported a stronger start to fiscal 2026, highlighted by its first positive quarterly net income since 2023 and a sharp year-over-year increase in profitability driven primarily by higher salt volumes and improved performance in Plant Nutrition.
On the company’s fiscal first quarter 2026 earnings call held February 5, CEO Edward Dowling said Compass posted reported net income of $0.43 for the quarter, compared with a net loss of $0.57 in the prior-year period. Adjusted EBITDA doubled to $65 million, and the company reduced leverage year over year by nearly two turns to 3.6x net debt to trailing 12-month adjusted EBITDA. Management also raised the midpoint of full-year adjusted EBITDA guidance to $224 million, citing solid results in salt and continued momentum in Plant Nutrition, partially offset by the planned sale of its Wynyard SOP operation.
Salt business benefits from steady winter demand, but operational limits remain
However, Dowling cautioned that the company’s updated outlook should not be interpreted as “a new normal for this kind of winter.” He reiterated that Compass does not plan its business assuming above-average winters and remains focused on inventory discipline and “value over volume” under its “Back-to-Basics” strategy, which was implemented in 2024. He said a prior strategy of ensuring the company never missed a big winter contributed to excess inventory over multiple years and a stressed balance sheet, and management is committed not to repeat that approach.
Dowling also outlined factors that may limit Compass’ ability to serve incremental in-season demand in fiscal 2026, including production capabilities and timing across its supply chain. He said the Goderich Mine is in a period of heavy development as it opens new mining panels, which typically have higher costs and lower production rates than panels in full production. While management is generally pleased with year-over-year improvements in Goderich’s production rate, Dowling said the mine is working to mitigate “greater than anticipated unplanned downtime” and improve operating efficiency through measures such as enhancements to preventive maintenance and overhaul programs.
In the Q&A portion of the call, Chief Commercial Officer Ben Nichols said mid-season imports and other opportunistic supply are difficult to bring to market because of transit lead times. He added that if winter weather continues as it has, the market is expected to remain tight.
Quarterly salt results: volumes surge, costs mixed
CFO Peter Fjellman said salt segment operating earnings improved to $14.33 per ton, up $2.54, or 22%, from the prior year. Adjusted EBITDA per ton increased 2% to $19.61. Total salt volumes rose 37% year over year, including a 43% increase in highway de-icing volumes and a 14% increase in C&I volumes.
Despite higher realized pricing—up 6% in highway de-icing and 2% in C&I—overall salt segment pricing was “relatively flat” because highway de-icing made up a higher proportion of the segment’s mix, Fjellman said. Salt segment revenue increased to $332 million from $242 million a year earlier.
On costs, product cost per ton declined 7% to $50.20, while distribution cost per ton rose 6%. During Q&A, Nichols attributed the distribution cost increase to inflationary pressure on freight rates and to the company shipping salt across a wider network to meet demand, including to farther destinations, which increased logistics costs. Fjellman also noted salt segment SG&A improved by $1 million.
Plant Nutrition shows improvement; Wynyard SOP sale announced
In Plant Nutrition, management emphasized progress tied to restoring the health of the pond complex at Ogden, which Dowling said is improving feedstock quality, supporting better plant operations and lowering costs. He said SOP product costs have been trending down and noted the company is seeing a $20 improvement in price versus its expectations. He also said the company is prioritizing SOP availability for additional domestic business rather than lower-margin export volumes, which contributed to lower anticipated sales volume.
Compass announced it entered into an agreement to sell its Wynyard SOP operation in Canada for $30.8 million, subject to customary closing conditions. Dowling said the company believes it is an opportune time for the transaction given improvements at Ogden and management’s view of future market conditions, allowing Compass to further focus on being a leading North American SOP producer.
Fjellman said Plant Nutrition operating earnings increased approximately $9 million year over year, while adjusted EBITDA improved by $8 million, driven by stronger pricing and improved cost structure despite lower sales tons. He said the average SOP sales price increased 13% to $687 per ton, product cost per ton declined 2% to $520, and distribution cost per ton increased 2% to $93.
Dowling said the company increased Plant Nutrition adjusted EBITDA guidance by 8% to a midpoint of $37 million despite the Wynyard sale. He also noted the next phase of improvement is a capital project to upgrade the dryer compaction plant at Ogden, which management expects will boost efficiency and financial performance.
Guidance raised; leverage improves and cost controls continue
For fiscal 2026, Fjellman said the updated adjusted EBITDA guidance is:
- Salt segment: $230 million to $252 million, reflecting higher expected sales tons, partially muted by production-cost headwinds and distribution pressure often associated with severe winters; adjusted EBITDA margin expected to increase by about 200 basis points year over year.
- Plant Nutrition segment: $34 million to $39 million, supported by stronger margins and improved cost structure, partially offset by lower expected volumes and the Wynyard sale; at the midpoint, adjusted EBITDA margin expected to improve by more than 300 basis points year over year.
- Total company adjusted EBITDA: $208 million to $240 million, a 2% increase at the midpoint.
On the balance sheet, Fjellman said Compass ended the quarter with liquidity of $342 million, including $47 million of cash and roughly $295 million of revolver capacity. He also noted the previously announced settlement related to an Ontario mining tax dispute affected balance sheet line items and working capital in the cash flow statement. In response to a question about taxes, Fjellman said effective tax rate swings depend on the mix of income in Canada and losses in the U.S. and that it remains early in the year to determine the full-year impact, including valuation allowance considerations.
Corporate overhead declined 24% year over year to $19 million for the quarter, which Fjellman attributed to multiyear cost control and continuous improvement initiatives aligned with the company’s Back-to-Basics focus on process optimization and system utilization.
Dowling said the company plans to begin board conversations about capital allocation as confidence in continued leverage improvement grows. He closed by reiterating that Compass is making progress under its Back-to-Basics framework, while acknowledging that some improvements—such as fully optimized production in the salt mines—will take more time to materialize.
About Compass Minerals International (NYSE:CMP)
Compass Minerals International, Inc is a global producer of essential mineral-based products, primarily known for its salt and plant nutrition portfolios. The company’s deicing salts are used by municipalities and commercial customers across North America to maintain safer roadways in winter months. In addition, its water conditioning salts serve both residential and industrial users, supporting water treatment systems that remove hard minerals to protect plumbing and equipment.
Beyond conventional salt products, Compass Minerals has developed a specialty plant nutrition business focused on sulfate of potash (SOP), a premium fertilizer that provides both potassium and sulfur to crops.
