Thank you for standing by. My name is Tina, and I will be your conference operator today. At this time, I would like to welcome everyone to the Compass Minerals' Third Quarter Fiscal 2025 Earnings Call. [Operator Instructions] It is now my pleasure to turn the call over to Brent Collins, Treasurer. You may begin. Brent Co

Thank you, operator. Good morning, and welcome to the Compass Minerals' Fiscal Third Quarter Earnings Conference Call. Today, we will discuss our most recent quarterly results and provide an update of our outlook for fiscal 2025. We will begin with prepared remarks from our President and CEO, Edward Dowling; and our CFO, Peter Fjellman. Joining in for the question-and-answer portion of the call will be Pat Merrin, our Chief Operations Officer; and Ben Nichols, our Chief Commercial Officer. Before we get started, I will remind everyone that the remarks we make today reflect financial and operational outlooks as of today's date, August 12, 2025. These outlooks entail assumptions and expectations that involve risks and uncertainties that could cause the company's actual results to differ materially. A discussion of these risks can be found in our SEC filings, located online at investors.compassminerals.com. Our remarks today also includes 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. And with that, I will now turn the call over to Ed.

Thank you, Brent. Good morning, everyone, and thank you for joining us today. I'm pleased to report that we had a solid third quarter. I'll begin by commenting on the Plant Nutrition business. We talked in the past about needing to improve the cost structure at Ogden and a plan to do so. We're making good progress on that front. An added benefit of the work we've been doing in Utah is we're seeing a more consistent and higher productivity at the plant, allowing us to confidently serve businesses beyond our core market in the Western U.S. These efforts have resulted in strong sales volumes, complemented by lower production costs this quarter that more than offset lower pricing and higher per unit distribution costs. The net result is we saw improvements in the per unit operating earnings and adjusted EBITDA for the quarter. In the Salt business, on a per ton basis, we saw distribution costs hold flat and production costs decreased by 2%. This allowed us to realize improvements in both segment operating earnings and adjusted EBITDA on a per ton basis. Bid season is a big focus for the Salt business in the third quarter. Presently, approximately 70% of the company's North American highway deicing bid process has been completed. We expect contracted selling price for the coming season to be up 2% to 4% year-over-year and committed bid volumes to be up 3% to 5%. As a reminder, bid volumes established service levels for certain customers and sales volumes will ultimately be driven by winter weather. Coming out of this year's deicing season, we expected to see increases in both price and commitments, so things are playing out generally and how we thought they would. An important step we completed in the third quarter was the refinancing that we've discussed over the last couple of quarters. That exercise improves our financial flexibility, enhances our liquidity, extends our maturity profile, all of which helps strengthen our ability to continue executing on our Back-to-Basic strategy. Our financial position was further augmented in the quarter with the sale of the majority of Fortress assets and intellectual property for net proceeds of approximately $20 million. It's worth reiterating what we're fundamentally working to achieve with our Back-to-Basic strategy. Our focus is to improve cash flow generating capability of the company by optimizing business practices and structures, lowering capital intensity of our assets and improving the efficiency of our operations. I'm pleased with the progress we are making. With disciplined execution, we will continue to unlock intrinsic value of the company. With that, I'll turn the call over to Peter for a review of our third quarter results.

Thanks, Ed. I'll make a few comments about the quarter, and then we'll turn the call over to Q&A. For the third quarter, consolidated revenue was $215 million, up approximately 6% year-over-year. Operating income for the quarter was $15.9 million, which is an improvement from operating income of $5.9 million last year. Consolidated net loss was $17 million compared to a net loss of $43.6 million in the prior year period. Adjusted EBITDA for the quarter increased by 25% to $41 million, which compares to $32.8 million a year ago. In the Salt business, revenue in the third quarter was $166 million compared to $160.6 million a year ago. Pricing was down 1% year- over-year to approximately $108 per ton with volumes up 4% compared to the prior year period. Net revenue per ton, which accounts for distribution costs, decreased 1% to $75. On a per ton basis, operating earnings came in 4% higher year-over-year at $18.20 per ton, while adjusted EBITDA per ton increased by 6% to $29.66. The increase in per ton margins reflects the decrease in production costs compared to last year as price and distribution costs were more or less flat year-over-year. In the Plant Nutrition business, revenue for the third quarter was $45 million, which is up 15% year-over-year from $39 million. Sales volume [Technical Difficulty] from prior year period, while pricing was down 5% for the same period. Distribution costs per ton increased 10% to around $98 per ton and all-in production cost per ton decreased approximately 23%. Turning to the balance sheet. I'll comment on inventory in our financial position briefly. North American highway deicing inventory value and volumes increased sequentially by 28% and 27%, respectively. This is a normal seasonal build as we prepare for the coming deicing season. We remain mindful of past challenges with excess inventory and are committed to avoiding similar issues. As of the end of June, North American highway deicing inventory levels are approximately 50% lower than last year. We are taking a disciplined approach to production planning and inventory management, and we'll continue to refine our strategy as we complete the bid season. Regarding our financial position. At quarter end, we had liquidity of $388 million, comprised of $79 million of cash and revolver capacity of around $309 million. These amounts reflect the cash from the Fortress asset sale and the refinancing activity that Ed referred to in his remarks. The amendment to our credit facility that occurred contemporaneously with the new note issuance had 2 important changes. First, it locked in the commitment level of the facility at $325 million through the life of the facility and eliminated the step-downs that were scheduled in the prior agreement. Second, it moved the leverage covenant from a total net debt calculation to a net first lien debt measure. These changes enhance our liquidity and provide additional financial flexibility. Total net debt as of June 30, 2025, was $746 million, which is down $116 million or 13% year-over-year. Reducing leverage is a key component to our Back-to-Basic strategy, and we're making solid progress towards that goal. It was a strong quarter for the company from a financial perspective. Despite increasing inventory levels, we were free cash flow positive, and that is before including the proceeds from the fortress Divestiture. From a guidance perspective, we've increased our adjusted EBITDA guidance slightly for the year. At the midpoint, we are now showing $193 million for the year, which is an increase from a midpoint of $188 million coming out of 2Q '25. The increase is being driven by Plant Nutrition business where the stronger sales and effective cost management, Ed referred to are translating to better financial performance. We also have a slight uptick in our projection for Salt EBITDA. Our guidance for capital expenditures remains unchanged at a range of $75 million to $85 million. I'll now open the floor for questions. Operator?

[Operator Instructions] Our first question comes from the line of Joel Jackson with BMO Capital Markets.

I'm going to ask a few questions, maybe one by one, if that's okay. Can you help us understand if you get 2% to 4%, so a few percentage points of higher highway deicing pricing, gross pricing and when you factor in inflation, does that suggest your netbacks for next winter or the upcoming winter are going to be the same, higher or lower on this results out of bid season?

Joel, this is Ed. Look, I appreciate the question. Our focus on the sales side for the upcoming season is really consistent with our Back- to-Basic strategy where it's value over volume. What you're really asking is, does the net margin of the plan result in better or worse financial results. And as you know, we're in the middle of our budgeting season working hard. You see that our costs are coming down. I think that's an important thing. But we're -- we do guidance once our budgets are done and through our Board and do that guidance generally on November call.

Okay. And then maybe following up on that. I think there were a lot of people out there that thought that this could be a very strong bid season, results came in 2% to 4%, which, as you probably appreciate, a pretty average historical results of those never an average bid season in winter, but pretty average 2% to 4%. Can you talk about as the bid season has played out, what happened versus maybe what you might have thought, might you have thought you'd get higher prices? Did you think you might win more share from cargo or American Rock Salt because the issues they have? It seems like there wasn't that much volume shift between the major players. Can you talk about how the markets are playing out in deicing pricing, how it played out?

Well, the volumes are up across the board. The pricing, as you know, is transparent and so all these bids are public documents. So you can take a look at that. Our Back-to-Basic strategy is value over volume, in competing where we can drive value into the business. You can take a look at what some of the competitors are doing, but that's really not our business. That's their business in terms of what they're setting out to accomplish. But generally, coming into a season like this, it generally takes -- if you go back and look at history, 2 years to really clear the market to really see sort of the full impact of a year like we had last year. Ben, do you want to add anything to that?

Sure. Joel, I think what Ed was alluding to as well is the last season, while stronger than the prior 2, which were quite light, was really just a return to more average weather. And so -- to the degree that, that impacted the overall supply and demand picture maybe wasn't as great as people had hoped moving into the bid season and that may have played out a bit in the dynamics with the competition. But again, we stayed focused to our strategy. I was proud of the way the team moved through a very dynamic situation. And I think we're delivering the type of value we committed to.

Okay. Final question. It looks like your Plant Nutrition costs on a per ton basis were very good. In Q3, you had some decent volumes, looks like maybe your best per quarter -- excuse me, per ton quarter -- per ton cost in years. When I look at your guidance, though, it looks like the costs go back to Q4 kind of where they've been, maybe even higher than the first half of the year. So were there some unique things -- and then volumes are similar in Q3 versus Q4. Were there some unique things going on in Q3 and/or Q4. How should we think about it for Plant Nutrition?

No, not really. The -- Joel, look Plant Nutrition, and we've been talking about this for a year or so. It's a multiyear recovery plan, starting with the ponds and ultimately working our way through improvements in the dry plant. I think the good news here is that our recovery on the ponds is ahead of where we thought it would be. There's a number of things that are contributing to that. One is management of the solutions; and two, really having hot and dry weather out in Utah, we've been able to deposit more. So achieving our production and really at the right grade, remember, we talked about the harvest production ratio has worked out really quite well for us, and we're trying to take advantage of that sort of going forward. We're doing some things in the wet plant to improve overall recovery. We'll talk about that at some point in the future. And ultimately, the capital project in the dry plant. I think the outlook is really just -- we had a good quarter. I think we would expect to see something similar in the fourth quarter. Now we're -- the plant is down right now. So the volume -- that's planned and scheduled. So what you're probably seeing a little bit of is compression on that. I'll turn -- maybe Pat would have some comments on that as well.

Joel, it's Pat. One other thing to keep in mind is KCl is a big input factor for us. And so our costs are driven by the cost of KCl in the open market. So that also can impact what our overall costs are going forward. So we're projecting into that as opposed to what we've seen in the past.

Could I be greedy and just sneak in a question on that. Does that mean that maybe in Q3, your mix was more straight harvest in Q4, the mix shifts a little more towards augmented with purchase KCl?

No, I wouldn't say that. As Ed spoke about the improvement in health of the ponds, which then improves the input into the plant over time allows us to use less KCL. So there's going to be some impact of that. But the long-term trend, some of the cost is just what we have to purchase KCl at. And so I think we see leading into next year higher KCl prices based on what the market is telling us they expect those prices to be.

[Operator Instructions] Your next question comes from the line of [ Patrick Goff ] with JPMorgan.

I missed part of the prepared remarks, and I had a question or a clarification question on your comment regarding North American highway deicing inventories down 50% relative to last year. I assume that's your inventory levels or that's industry inventory levels?

Yes. Patrick, this is Ed. I mean that's our inventory levels. You -- Peter, you want to add more to that?

No. Again, back to basics is just managing those through.

We'll be managing that our working capital very carefully going forward. It will flex up and down depending on what happens at any given year. We'll manage the business flexibly as we've talked about in the past, but we're not going to find ourselves in a circumstance like we did a year ago, where we're just way too much inventory coming into a season and just produce to make earnings look good, but basically putting cash in the inventory. We're not going to do that anymore.

That makes sense. Can I follow on a couple of quick ones. Do you have a sense -- I guess I'll put them both in there. Do you have a sense as to where broader industry inventory levels are? And then I guess the other question would be just when you think about your balance sheet, where are you trying to get to with regard to leverage on maybe a normalized EBITDA basis going forward?

Yes, Patrick. I'll have Ben address the first thing in terms of industry-wide inventories, and I'll address sort of balance sheet targets.

Patrick, this is Ben. It would be a bit of speculation. I think it's prudent to say that industry inventories would be down year-over-year being that going into last season, we were coming off with 2 very light winters, and I think it was widely known that inventories were pretty heavy to the degree that they're down with our competitors, I would be speculating. So I won't speak to that.

In terms of our balance sheet, Patrick, ultimately, we'd like to work ourselves to be investment grade, which implies a debt-to-equity ratio or EBITDA ratio of between 2 and 3, kind of roughly 2.5, I've talked about that in the past. How we manage cash and working our way down and pleased that our debt is coming down. That's the plan is make cash and retire debt. As we move our way through there, we'll start thinking more and more about the potential capital returns and things like that in the future. But no decision at this point. We need to get our debt down a bit more before we start thinking about that.

And then -- and sorry, one last one. So would the thought with the stub of the '27s be to pay that down with cash flow or to refi that?

100%, our -- we've announced our intention is to use cash flow to pay down the stub left over on the '27 bonds.

[Operator Instructions] And with no further questions in queue, I will now hand the call back over to Ed Dowling for closing remarks.

Okay. Thank you, operator. Really appreciate it, and thanks, everybody, for joining the call today. We've got some events coming up here over the next sort of 2 months and look forward to seeing you then.

Thank you again for joining us today. This does conclude today's conference call. You may now disconnect.