Executive Summary

Q2 2025 delivered a broad-based beat: revenue $494.6M vs consensus ~$414.0M, and adjusted EPS $0.63 vs consensus ~$0.00; EBITDA modestly ahead on S&P’s definition; guidance was raised at the total-company level, led by Salt volumes and revenue strength *.
Inventory rationalization unlocked cash: ~$150M working capital release and ~$170M (18%) sequential net debt reduction; liquidity ended at $328.6M (cash $49.5M, revolver availability $279.1M) .
Salt volumes surged on stronger winter weather; margin per ton compressed temporarily due to 2024 curtailment effects and lower average highway pricing (-5% YoY), but management expects per-ton economics to improve as production normalizes .
Corporate cost actions and Fortress wind-down progressed; total FY25 adjusted EBITDA guidance raised to $173–$202M (midpoint +$15M vs Q1), with Corporate adjusted EBITDA improved to -$59 to -$52M and Salt revenue lifted to $975–$1,050M .
Near-term stock narrative catalysts: constructive 2025/2026 bid season setup (low system inventories, improving pricing psychology), deleveraging trajectory, and clearer tariff backdrop (USMCA exemption for Canadian production) .

What Went Well and What Went Wrong

What Went Well
- Working capital and deleveraging: “We realized a working capital release of nearly $150 million… reducing net total debt by approximately $170 million or 18% in the quarter.” — CEO Edward Dowling .
- Salt volume strength: Highway deicing volumes +51% YoY; total Salt revenue +39% YoY to $432.7M as winter weather strengthened .
- Guidance raised and tariff clarity: FY25 total adjusted EBITDA to $173–$202M; USMCA qualification exempts Canadian exports from tariffs currently .
What Went Wrong
- Margin compression: Adjusted EBITDA/ton -30% YoY to ~$16.75 due to prior production curtailment (higher cost inventory sell-through) and -5% highway pricing YoY .
- Fortress-related non-cash charges: $53.0M impairment in Q2; comparability impacted across periods; adjusted EBITDA also affected by contingent consideration remeasurement .
- Plant Nutrition profitability: Adjusted EBITDA declined to $5.6M (vs $7.3M prior year) on lower pricing (-8% YoY) and higher distribution costs per ton (+13% YoY) .

Financial Results

Metric	Q4 2024	Q1 2025	Q2 2025
Revenue ($USD Millions)	$208.8	$307.2	$494.6
Diluted EPS ($USD)	$(1.17)	$(0.57)	$(0.77)
Adjusted EPS ($USD)	$(0.77)	$(0.55)	$0.63
Operating (Loss) ($USD Millions)	$(29.8)	$0.5	$(3.1)
Adjusted Operating Margin %	(6.1)%	0.5%	11.1%
Adjusted EBITDA ($USD Millions)	$15.6	$32.1	$84.1

Segment breakdown

Metric	Q2 2024	Q1 2025	Q2 2025
Salt Sales ($USD Millions)	$310.4	$242.2	$432.7
Salt Operating Earnings ($USD Millions)	$65.8	$29.4	$66.9
Salt Adjusted EBITDA ($USD Millions)	$82.4	$47.8	$85.5
Plant Nutrition Sales ($USD Millions)	$50.1	$61.4	$58.3
Plant Nutrition Operating (Loss) ($USD Millions)	$(53.0)	$(3.1)	$(1.8)
Plant Nutrition Adjusted EBITDA ($USD Millions)	$7.3	$4.4	$5.6
Highway Deicing Volumes (000s tons)	3,045	1,987	4,583
Consumer & Industrial Volumes (000s tons)	421	506	522
Highway Avg Price ($/ton)	$74.72	$69.50	$70.86
C&I Avg Price ($/ton)	$196.93	$205.74	$206.71
Total Salt Avg Price ($/ton)	$89.55	$97.16	$84.76

KPIs and balance sheet

KPI	Q2 2025
Working capital release (approx.)	~$150M
Net debt reduction (sequential)	~$170M (18%)
Liquidity	$328.6M (Cash $49.5M; Revolver availability $279.1M)
Cash From Operations (YTD)	$182.8M
Inventories, net	$220.7M (vs $414.1M at 9/30/24)

Estimate comparison (S&P Global consensus vs actuals)

Metric	Q1 2025	Q2 2025	Q3 2025
Primary EPS Consensus Mean	-$0.05*	$0.00*	-$0.13*
Primary EPS Actual	-$0.55*	$0.63*	-$0.39*
Revenue Consensus Mean ($USD)	$293.9M*	$414.0M*	$208.6M*
Revenue Actual ($USD)	$307.2M*	$494.6M*	$214.6M*
EBITDA Consensus Mean ($USD)	$44.8M*	$70.2M*	$37.5M*
EBITDA Actual ($USD)	$27.3M*	$72.5M*	$40.1M*
Values retrieved from S&P Global. Company-reported Adjusted EBITDA differs from S&P’s EBITDA definition; company Q2 Adjusted EBITDA was $84.1M .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Salt: Highway Deicing Volumes (000s tons)	FY25	7,600–8,500	8,550–8,900	Raised
Salt: C&I Volumes (000s tons)	FY25	1,800–1,950	1,900–2,000	Raised
Salt: Total Volumes (000s tons)	FY25	9,400–10,450	10,450–10,900	Raised
Salt Revenue ($USD Millions)	FY25	$900–$1,000	$975–$1,050	Raised
Salt Adjusted EBITDA ($USD Millions)	FY25	$205–$230	$215–$230	Raised (midpoint)
Plant Nutrition Volumes (000s tons)	FY25	295–315	295–315	Maintained
Plant Nutrition Revenue ($USD Millions)	FY25	$180–$200	$180–$200	Maintained
Plant Nutrition Adjusted EBITDA ($USD Millions)	FY25	$17–$24	$17–$24	Maintained
Corporate Adjusted EBITDA ($USD Millions)	FY25	($70)–($61)	($59)–($52)	Raised (less negative)
Total Adjusted EBITDA ($USD Millions)	FY25	$152–$193	$173–$202	Raised
Capex ($USD Millions)	FY25	$75–$85 (down from $100–$110 in Dec)	$75–$85	Maintained
Effective Tax Rate (excl. VA)	FY25	0%–5%	13%–18%	Raised

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4’24, Q1’25)	Current Period (Q2’25)	Trend
Inventory rationalization & cash	Q4: planned reductions; Q1: volumes -10% YoY by Dec	~$150M WC release; depots depleted; volumes/values down 59%/47% YoY	Improving; enables deleveraging
Pricing/bid season dynamics	Q4: bid prices ~-2% for 24/25; Q1: disciplined pricing; mild start	Constructive setup; potential for stronger pricing and commitments	Improving sentiment
Tariffs/USMCA	Q1: guidance excludes potential tariff impacts	Canadian production qualified under USMCA; exempt from tariffs	Clarity/positive
Plant Nutrition cost & operations	Q1: pond restoration, process improvements	Continued restoration; dryer/compaction plant project engineering advanced	Execution progress
Corporate cost actions & Fortress	Q1: evaluation of alternatives	>10% corporate workforce eliminated; Fortress wind-down; $53M impairment	Leaner structure
Deleveraging	Q4: leverage elevated; plan to reduce debt	Net debt -$170M QoQ; liquidity $328.6M	Rapid improvement

Management Commentary

“Compass Minerals continues to make progress on its back-to-basics strategy... optimization... to become a more efficient and profitable organization.” — CEO Edward Dowling .
“We realized a working capital release of nearly $150 million... reducing net total debt by approximately $170 million or 18% in the quarter.” — Edward Dowling .
“From a pricing perspective, the setup is constructive as we enter North American bid season... not unreasonable to think the pendulum can sweep back in our favor.” — Edward Dowling .
“At the midpoint, we are now showing $188 million [FY25 adjusted EBITDA]... Even adjusting for [~$8M contingent consideration gain], we’re showing improvements in guidance for Salt and Corporate.” — CFO Peter Fjellman .
Plant Nutrition: “Engineering work [for the dryer/compaction plant] is well advanced... we believe that we will be able to materially reduce the cost of our SOP production.” — Edward Dowling .

Q&A Highlights

AR balances: CFO noted insurance settlement items gross up AR/AP; expects AR to trend down with sell-through normalization .
Bid season indicators: Early tender sizes range “slightly up to significantly up” in some regions; setup positive for volumes/pricing, varying by locale .
Plant Nutrition margin path: Multi-year effort — restore pond chemistry and execute dryer/compaction plant project; incremental operational improvements underway .

Estimates Context

Q2 2025 results substantially beat consensus on revenue and EPS; EBITDA slightly above S&P’s definition. Company-reported Adjusted EBITDA is higher due to adjustments (e.g., impairments), while S&P consensus/actual may use a different EBITDA basis *.
With stronger winter-driven volumes and a constructive bid environment, Street models likely need to reflect higher Salt volumes/revenue and less negative Corporate spend; Plant Nutrition maintained guidance, but execution improvements could support future estimate revisions . Values retrieved from S&P Global.

Key Takeaways for Investors

Salt demand normalizing with tight system inventories; expect improved pricing/commitments into 2025/2026 bid season — constructive for revenue trajectory .
Deleveraging is happening fast; WC release and capex discipline ($75–$85M) support ongoing net debt reduction and improved balance sheet flexibility .
Margin optics should improve as high-cost 2024 inventory rolls off and production ramps; watch adjusted EBITDA/ton recovery in Salt .
Corporate cost reset and Fortress wind-down reduce P&L drag; FY25 Corporate adjusted EBITDA less negative at -$59 to -$52M .
Tariff risk de-escalated via USMCA exemption for Canadian production; reduces macro uncertainty for U.S. imports .
Plant Nutrition execution (pond restoration, plant upgrades) is a medium-term margin lever; pricing remains pressured by global potash dynamics near term .
Near-term trading lens: emphasize the beat, raised guidance, and deleveraging narrative; monitor bid season outcomes and any pricing updates as catalysts .

Bolded estimate beats/misses:

Q2 Revenue: $494.6M vs ~$414.0M consensus — Beat *.
Q2 Primary EPS: $0.63 vs ~$0.00 consensus — Beat *.
Q2 EBITDA (S&P): ~$72.5M vs ~$70.2M consensus — Beat (modest) *.

Notes: Company Adjusted EBITDA in Q2 was $84.1M; comparability impacted by Fortress contingent consideration remeasurement (company provided a modified figure of $76.2M for clarity) . Values retrieved from S&P Global.

COMPASS MINERALS INTERNATIONAL INC (CMP)·Q2 2025 Earnings Summary