Compass Minerals Reports Fourth-Quarter and Full-Year 2006 Results.

Company Raises Dividend

OVERLAND PARK, Kan. -- Compass Minerals (NYSE: CMP) reports the following fourth-quarter and full-year results:

* Full-year 2006 earnings from continuing operations were $55.0 million, or $1.69 per diluted share, compared to 2005 earnings from continuing operations of $26.8 million, or $0.84 per diluted share. When special items are excluded, 2005 earnings were $52.0 million, or $1.62 per diluted share.

* The company improved full-year earnings despite unusually warm weather in both the first and fourth quarters of 2006 through pricing gains across all product lines, a lower effective tax rate and improvement in the company's capital structure.

* Fourth-quarter net earnings from continuing operations were $26.2 million, or $0.80 per diluted share, compared to $9.3 million, or $0.29 per diluted share, in the 2005 quarter. When special items are excluded from the 2005 results, net earnings from continuing operations were $33.9 million, or $1.05 per diluted share.

* Compass Minerals improved its cash flows from operating activities by $7.7 million year-over-year to $95.6 million in 2006.

* Compass Minerals' board of directors has voted to raise the company's quarterly dividend to 32 cents from 30.5 cents per share.

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"We had a solid year despite very mild weather which softened demand for our deicing products," commented Angelo Brisimitzakis, Compass Minerals president and chief executive officer. "Our businesses are continuing to post solid gains in profitability, particularly our consumer and industrial salt product line. We also made important strides toward building our non-seasonal business this year."

Salt Segment

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Fourth-quarter salt sales and operating earnings declined year-over-year primarily due to the effect of contrasting weather anomalies on deicing salt sales. The company estimates that unseasonably warm weather depressed sales in the 2006 quarter by approximately $30 million to $40 million and reduced operating earnings by approximately $8 million to $12 million. Conversely, during the 2005 quarter unusually severe winter weather boosted sales by approximately $35 million to $45 million and improved operating earnings by approximately $8 million to $12 million.

Full-year salt sales of $549.6 million and salt operating earnings of $114.4 million reflect the effects of unusually warm weather in both the first and fourth quarters of 2006 contrasted with 2005 full-year sales of $639.6 million and operating earnings of $138.0 million which included the benefit of uncommonly severe weather in both the first and fourth quarters of that year. The company estimates that mild weather depressed 2006 full-year sales by approximately $70 million to $80 million and operating earnings by approximately $20 million to $25 million while severe weather increased 2005 full-year sales by approximately $60 million to $70 million and operating earnings by $12 million to $18 million. These year-over-year weather effects were partially offset by pricing improvements across all product lines.

Dr. Brisimitzakis continued, "Compass Minerals is accustomed to operating through atypical weather fluctuations. We focus on flexibly managing our cost structure and profitably growing the business on a weather-normalized basis. I believe that our results demonstrate our ability to do that successfully."

Specialty Fertilizer Segment

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Fourth-quarter specialty fertilizer sales growth was driven by a 9 percent year-over-year price improvement, partially offset by lower sales volumes in the southeastern United States. Operating earnings in the 2006 quarter reflect a significant increase in the cost of sourced potassium chloride, which is used as a raw material to supplement the company's solar harvest.

For the full year, specialty fertilizer sales grew 7 percent over the prior year as a result of a 13 percent price improvement. Prolonged rains in the first and second quarters of the year reduced the application of sulfate of potash in important areas of California which, along with lower fourth-quarter sales volumes, contributed to a 5 percent decline in full-year sulfate of potash volumes.

The company has announced a $10 per ton price increase on all sulfate of potash specialty fertilizer products effective with March 1, 2007 shipments.

Document Storage

Compass Minerals acquired its joint venture partner's share of DeepStore Ltd. effective November 1, 2006, and the company began consolidating financial results for the document storage business in its financial statements as of that date. DeepStore's revenues for November 1 through December 31, 2006 totaled $0.8 million and full-year revenues were $3.9 million, the majority of which were not consolidated. The company also acquired U.K.-based Interactive Records Management (IRM) in an all-cash transaction effective January 12, 2007. IRM posted revenues of approximately $5.1 million in 2006.

Other Financial Highlights

Interest expense was $2.3 million lower in the fourth quarter and $7.9 million lower in the full year than in the corresponding 2005 periods, reflecting the benefit of refinancing the company's 10-percent senior subordinated notes in December 2005. The benefit of that refinancing was partially offset by an increase in non-cash accretion on the company's discount notes.

In the 2006 quarter and for the full year, other income and expense was primarily comprised of foreign exchange effects. In 2005, expense of $33.2 million related to the company's tender for its senior subordinated notes largely accounted for other expense of $34.3 million in the fourth quarter and $38.7 million for the full year.

The provision for income taxes was $6.4 million for the quarter, a decline of $1.2 million or 16 percent when compared to the 2005 quarter. For the full year, income taxes were $14.8 million compared to $15.8 million in 2005.

Receivables declined to $114.0 million at December 31, 2006 from $183.0 million at December 31, 2005 due to the effects of contrasting weather patterns on the two years. At December 31, 2005 receivables were higher than normal due to higher than average sales in the fourth quarter of 2005, whereas sales were lower than average in the fourth quarter of 2006 resulting in lower than normal receivables at year end.

Similarly, inventories were higher than normal at $146.1 million at December 31, 2006 following unusually light fourth-quarter sales. By contrast, inventories were lower than normal at December 31, 2005 at $81.5 million due to unusually heavy fourth-quarter sales. The value of inventoried tons was also higher in 2006 than in 2005 due to higher shipping and production costs.

Capital expenditures were $11.9 million in the quarter and $36.4 million for the year. The company suspended selected capital projects to ensure that its Goderich, Ontario mine could produce at peak efficiency through the last half of 2006. Those projects are scheduled for completion in 2007 and are expected to bring capital expenditures to more than $40 million in the upcoming year.

The company voluntarily made a $10 million early principal payment on its term loan this quarter. At December 31, 2006, Compass Minerals' debt totaled $585.5 million and debt net of cash was $578.1 million compared with $615.9 million and $568.8 million, respectively, at December 31, 2005.

Conference Call

Compass Minerals will discuss its fourth-quarter and full-year results on a conference call at 10:00 a.m. ET tomorrow, February 13. To access the conference call, interested parties should visit the company's website at www.CompassMinerals.com or dial 877-228-7138. Callers must provide the conference ID number 6424843. Outside of the U.S. and Canada, callers may dial 706-643-0377. Replays of the call will be available on the company's website for two weeks. The replay can also be accessed by phone for seven days at 800-642-1687, conference 6424843. Outside of the U.S. and Canada, callers may dial 706-645-9291.

About Compass Minerals

Based in the Kansas City metropolitan area, Compass Minerals is the second-leading salt producer in North America and the largest in the United Kingdom. The company operates ten production and packaging facilities, including the largest rock salt mine in the world in Goderich, Ontario. In addition, Compass Minerals is North America's leading producer of sulfate of potash, which is used in the production of specialty fertilizers for high-value crops and turf, and magnesium chloride, which is a premium deicing and dust control agent. The company produces products for highway and consumer deicing, water conditioning, food preparation, agriculture and other consumer and industrial applications. The company also provides records management services to businesses throughout the U.K.

This press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act 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. The differences could be caused by a number of factors including those factors identified in Compass Minerals International's Annual Report on Form 10-k filed with the Securities and Exchange Commission on February 24, 2006. The Company will not update any forward-looking statements made in this press release to reflect future events or developments.

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(a) Excludes the effects of discontinued operations 

(b) Includes $0.9 million of expense related to discontinued operations for 2005

(c) Includes $3.6 million of expense related to discontinued operations for 2005

(d) Includes DeepStore from November 1, 2006 through December 31, 2006 plus corporate entities and eliminations in all periods. Corporate assets include deferred tax assets, deferred financing fees, investments related to the non-qualified retirement plan and other assets not allocated to the operating segments.