Compass Minerals Group, Inc. Announces Third-Quarter 2003 Results; $18.5 Million Adjusted EBITDA.Business Editors OVERLAND PARK Overland Park, city (1990 pop. 111,790), Johnson co., NE Kans., a residential suburb of Kansas City; inc. 1960. There is printing and publishing, and the manufacture of apparel, aircraft parts, cement, prepared foods, salt, chemicals, marine accessories, and signs. , Kan.--(BUSINESS WIRE)--Nov. 3, 2003 Compass Minerals Compass Minerals International (NYSE: CMP) is the second-leading salt producer in the United States and largest in the United Kingdom. Most of the salt produced is sold for highway de-icing. Group, Inc., a leading producer and marketer of salt and specialty potash potash: see potassium carbonate. potash Name used for various inorganic compounds of potassium, chiefly the carbonate (K2CO3), a white crystalline material formerly obtained from wood ashes. , today reported its financial results for the third quarter of 2003. For the three months ended September 30, 2003, operating earnings Operating Earnings Profits after subtracting expenses such as marketing, cost of goods sold, administration and general operating costs from revenue. Notes: Tax and interest expenses are not subtracted - operating earnings are synonymous with EBIT (earnings before were $6.7 million, and Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become was $18.5 million on sales of $97.1 million. Adjusted EBITDA increased $2.5 million compared to the same period in the prior year. For the prior-year period, operating earnings were $3.5 million and Adjusted EBITDA was $16.0 million on sales of $92.2 million. For the nine months ended September 30, 2003, operating earnings were $55.4 million, and Adjusted EBITDA was $86.6 million on sales of $398.5 million. Adjusted EBITDA increased $15.6 million compared to the same period in the prior year. For the prior-year period, operating earnings were $35.5 million and Adjusted EBITDA was $71.0 million on sales of $336.9 million. "Our improved results for the third quarter were primarily due to stronger pre-season deicing De-icing is the process of removing ice from a surface. Anti-icing is the process of preventing ice from forming on a surface. Deicing can be accomplished by mechanical methods (scraping), through the application of heat, by use of chemicals designed to lower sales," said Michael E. Ducey, President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. . "Our general trade business line results were also good despite higher natural gas prices. We have virtually completed our 2003-2004 North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. highway deicing bid season with an improvement in both volumes awarded and pricing. We continue to focus on operational excellence for improvements in top-line growth, cost controls and further strength from our cash flows," concluded Mr. Ducey. Compass Minerals Group will be hosting an investor conference call on Tuesday, November 4, at 10:00 a.m. ET. The public is cordially invited to listen and participate by dialing the following toll-free number: 877-228-7138. Outside the U.S., dial: 706-643-0377. If you are unable to listen to the call at that time, the replay will be available 24 hours per day from 11:30 a.m. ET, November 4, 2003, to 11:59 p.m. ET, November 11, 2003, by dialing the following toll-free number: 800-642-1687. Outside the U.S., dial: 706-645-9291. (Conference ID#: 3752088). Compass Minerals Group is the second-largest North American producer of salt, the largest producer of salt in the United Kingdom and the largest North American producer of sulfate sulfate, chemical compound containing the sulfate (SO4) radical. Sulfates are salts or esters of sulfuric acid, H2SO4, formed by replacing one or both of the hydrogens with a metal (e.g., sodium) or a radical (e.g., ammonium or ethyl). of potash, a specialty fertilizer. Compass Minerals Group is 94% owned by Apollo Management Apollo Management L.P. is a private equity L.P. firm, founded in 1990 by Leon Black (Apollo Advisors). Based in New York, it also has offices in Los Angeles and London. It has invested over $16 billion in companies inside and outside the of the United States. LP and Company management, with the remainder owned by IMC (Internet Mail Consortium, Santa Cruz, CA, www.imc.org) An industry trade association founded in 1996 by Paul Hoffman and Dave Crocker that promotes Internet e-mail standards and features. Global Inc. Certain statements in this press release may contain forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. These statements are based on the Company's current expectations and involve risks and uncertainties that could cause the Company's actual results to differ materially from those set forth in the statements. The Company can give no assurance that such expectations will prove to be correct. Factors that could cause the Company's results to differ materially from current expectations include: general economic and business conditions, industry trends, weather, raw material costs and availability, changes in demand for its products, actions of its competitors and the additional factors and risks contained in the Company's Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. Annual Report, filed with the Securities and Exchange Commission on March 31, 2003. The Company's performance, as measured by earnings before interest, taxes, depreciation and amortization Earnings before interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP metric that can be used to evaluate a company's profitability.
Compass Minerals Group, Inc. Consolidated and Combined Operating Results (U.S. Dollars, in Millions) Both prior to the Recapitalization Recapitalization Restructuring a company's debt and equity mixture often with the aim of making a company's capital structure more stable. Notes: Companies often want to diversify their debt-to-equity ratio to improve liquidity. and in connection with the Recapitalization, we have incurred significant non-recurring restructuring and other charges that impact our results of operations. As a result, our results of operations and cash flows are not indicative of what they would have been had we not incurred these non-recurring charges. We believe it would be helpful to provide a sensitivity analysis that describes our ability to satisfy our debt service, capital expenditures and working capital requirements Capital requirements Financing required for the operation of a business, composed of long-term and working capital plus fixed assets. in terms of earnings before interest, taxes, depreciation and amortization, or "EBITDA," and EBITDA adjusted for the restructuring and other charges described below, or "Adjusted EBITDA." Not only do we believe these non-GAAP measures can assist investors in understanding our cost structure, cash flows and financial position, but also financial covenants and ratios in our senior credit facilities credit facilities npl → facilidades fpl de crédito credit facilities npl → facilités fpl de paiement credit facilities and our indentures, such as restrictions on payments and indebtedness and ratios relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc leverage, interest coverage and fixed charge coverage, are also tied to measures that are calculated by adjusting EBITDA as described below. We believe it is necessary to adjust EBITDA to enable investors to see how we view our business given the significant non-recurring restructuring and other charges that have historically affected our results of operations. Neither EBITDA nor Adjusted EBITDA are calculated under GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). and neither should be considered in isolation or as a substitute for net income, cash flows or other income or cash flow data prepared in accordance with GAAP or as a measure of our profitability or liquidity. While EBITDA and Adjusted EBITDA and similar variations thereof are frequently used as a measure of operations and the ability to meet debt service requirements, these terms are not necessarily comparable to other similarly titled captions of other companies due to the potential inconsistencies in the method of calculation. The following table sets forth the components of net income, EBITDA and Adjusted EBITDA.
Three months ended Nine months ended
------------------ -----------------
September 30, September 30,
2003 2002 2003 2002
---- ---- ---- ----
Sales $97.1 $92.2 $398.5 $336.9
Cost of sales -- shipping and
handling 24.1 22.5 109.3 91.2
Cost of sales -- products 55.1 53.3 199.5 173.3
----- ----- ----- -----
Gross profit 17.9 16.4 89.7 72.4
Selling, general and
administrative expense 11.2 10.8 34.3 30.1
Restructuring and other charges --- 2.1 --- 6.8
----- ----- ----- -----
Operating earnings 6.7 3.5 55.4 35.5
Other (income) expense:
Interest expense 10.0 10.5 29.2 31.0
Other, net 1.6 (0.3) 4.5 4.1
----- ----- ----- -----
Income (loss) before income
taxes (4.9) (6.7) 21.7 0.4
Income tax expense (benefit) (1.1) (3.2) 4.3 (0.5)
----- ----- ----- -----
Net income (loss) $(3.8) $(3.5) $17.4 $0.9
===== ===== ===== =====
Net income (loss) $(3.8) $(3.5) $17.4 $0.9
Income tax expense (benefit) (1.1) (3.2) 4.3 (0.5)
Interest expense 10.0 10.5 29.2 31.0
Depreciation and amortization 11.8 10.4 31.2 28.7
----- ----- ----- -----
EBITDA 16.9 14.2 82.1 60.1
Adjustments to EBITDA:
Restructuring and other
charges --- 2.1 --- 6.8
Other expense (income),
net (1) 1.6 (0.3) 4.5 4.1
----- ----- ----- -----
Adjusted EBITDA $18.5 $16.0 $86.6 $71.0
===== ===== ===== =====
(1) For the three months ending September 30, 2003 and 2002, "Other expense (income)" primarily includes non-cash gains and losses. Additionally, for the nine months ending September 30, 2003, "Other expense (income)" includes $1.1 million of costs related to amending the senior credit facility and for the nine months ending September 30, 2002, "Other expense (income)" includes a $5.3 million loss related to the refinancing Refinancing An extension and/or increase in amount of existing debt. of the Company's term loan resulting from the issuance of the $75 million 10% Senior Subordinated Notes due 2011 in April 2002. |
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