Compass Minerals Reports Solid Fourth-Quarter and Full-Year Results

Fourth-Quarter Highlights:

• Solid demand drove year-over-year increases in revenue for Plant
  Nutrition business
• Salt results pressured by a late start to winter
• One-time tax charges reduced fourth-quarter 2017 results to a loss of
  $0.13 per diluted share; excluding the tax charges, earnings per
  diluted share were $1.66

Full-Year Highlights:

• Produquímica fully integrated, contributed approximately $375 million
  in revenue and $49 million in operating earnings
• Most major capital investment projects to drive long-term growth
  completed
• Achieved $12 million in on-going savings from cost reduction program

OVERLAND PARK, Kan.–(BUSINESS WIRE)–Compass Minerals (NYSE: CMP), a leading producer of essential minerals,
reported a year-over-year increase in fourth-quarter revenue and
operating earnings driven by improved Plant Nutrition South America
results, which more than offset weather-driven weakness in the company's
Salt business. The company also announced that its Board of Directors
has approved a dividend for the first quarter of 2018 of $0.72 per share.

“While this has been a challenging year for Compass Minerals, our
results are demonstrating the value of our strategy to balance our
winter weather exposure by growing our plant nutrition business with a
strong focus on innovative specialty products,” said Fran Malecha,
Compass Minerals’ president and CEO. “Further, we have completed key
capital investments critical to increasing our production capabilities
and efficiency, while still returning almost $100 million directly to
shareholders through our dividend. I believe our actions have positioned
the company for significant top and bottom line growth and improved free
cash flow over the next several years.”

Fourth-quarter 2017 net loss was $4.4 million, or $0.13 per diluted
share, which compares to net earnings of $97.6 million, or $2.87 per
diluted share in the prior year. Excluding the impact of special items
in both years, fourth quarter 2017 net earnings increased 22 percent
year over year to $56.2 million from $46.1 million. The special items in
the 2017 fourth quarter include the estimated impact of U.S. tax law
changes, in addition to a one-time tax expense stemming from a
settlement reached with U.S. and Canadian tax authorities. Specific
details regarding all special items, along with reconciliations of any
non-GAAP measures used in this press release, can be found in the tables
at the end of this press release.

Full-year net earnings declined to $42.7 million, or $1.25 per diluted
share, from $162.7 million, or $4.79 per diluted share in 2016.
Excluding special items for each year, 2017 full-year net earnings were
$93.3 million, or $2.75 per diluted share, compared to $111.2 million,
or $3.27 per diluted share in 2016.

Total revenue in the fourth quarter increased 3 percent to $457.9
million from the prior-year fourth quarter. For the full year, the
company reported total revenue of $1.36 billion compared to $1.14
billion in 2016. This 20 percent increase was primarily attributed to
the full-year inclusion of Plant Nutrition South America results,
partially offset by a year-over-year reduction in Salt segment revenue.
The Plant Nutrition South America segment was formed in October 2016
following the completion of the Produquímica acquisition.

Consolidated operating earnings in the fourth quarter of 2017 increased
23 percent from prior-year results of $65.3 million. The 2016 fourth
quarter results included a one-time asset impairment charge of $3.1
million in the Plant Nutrition North America segment and additional
acquisition-related expenses of $8.4 million in the Plant Nutrition
South America segment. Excluding these special items, consolidated
operating earnings improved 5 percent as increased earnings in the Plant
Nutrition South America segment offset a year-over-year decline in Salt
segment earnings.

Full-year 2017 consolidated operating earnings of $159.2 million were
negatively impacted by a 31 percent year-over-year decline in Salt
operating earnings, which was partially offset by the addition of the
Plant Nutrition South America segment and increased Plant Nutrition
North America operating earnings.

SALT SEGMENT

Salt segment fourth-quarter revenue declined 2 percent from prior year
as a modest increase in highway deicing revenue partially offset lower
consumer and industrial results. The increase in highway deicing revenue
was primarily driven by improved deicing sales in the U.K. compared to
last year. The late start to winter weather in North America, however,
limited sales of consumer and commercial deicing products and drove a 10
percent decline in consumer and industrial sales volumes.

For the full year, Salt segment revenue decreased $42.7 million as mild
winter weather reduced Salt sales volumes by 5 percent and total average
selling prices by 1 percent.

Salt segment operating earnings declined 8 percent in the fourth quarter
of 2017 from 2016 results. This decrease was driven by increased
shipping and handling costs resulting from an unfavorable geographic
sales mix, combined with increased freight rates and fuel costs.

For the full year, the Salt segment generated $138.0 million in
operating earnings compared to $200.6 million in 2016. Salt segment
operating margin for 2017 declined to 17.9 percent from 24.7 percent in
2016 due to increased product and logistics costs, as well as lower
average selling prices.

Winter Weather Effect

The company recorded 57 fourth-quarter 2017 winter weather events in the
11 cities the company tracks, which was above the 10-year average of
45.2. Much of the increased winter weather activity occurred in eastern
U.S. geographies where the company typically has fewer highway deicing
sales contracts. In addition many of the snow events occurred in the
last two weeks of December, thus having a limited impact on
fourth-quarter 2017 sales. As a result, the company estimates that
variations from average winter weather had a negative impact on
fourth-quarter 2017 Salt segment sales and earnings.

PLANT NUTRITION NORTH AMERICA

Revenue generated by the Plant Nutrition North America segment grew 12
percent from fourth quarter 2016 results primarily due to an 11 percent
increase in sales volumes. A modest year-over-year increase in the
average selling price for Plant Nutrition North America products was
driven by an increase in sales of higher value micronutrients.

For the full year, the segment generated $210 million in revenue, which
was 3 percent above prior-year results driven by increased sales volumes.

Fourth-quarter 2017 operating earnings for the segment were $10.2
million compared to $8.0 million in the prior-year quarter. The 2016
results included a $3.1 million charge related to an asset impairment.
As a percent of sales, Plant Nutrition North America generated an
operating margin of 14.6 percent compared to an adjusted operating
margin of 17.7 percent in the fourth quarter of 2016. The year-over-year
margin decline was primarily attributable to increased shipping and
handling cost related to freight rate pressures. In addition, increased
depreciation expense due to the final commissioning of new equipment at
the company's Ogden, Utah, manufacturing facility further pressures
operating margin.

Revenue growth and lower production costs lifted full-year 2017
operating earnings 31 percent above 2016 GAAP operating results and 19
percent when adjusting for special items. Operating and EBITDA margins
for full-year 2017 also expanded from prior-year results.

PLANT NUTRITION SOUTH AMERICA

Fourth-quarter 2017 revenue in the Plant Nutrition South America segment
grew 10 percent from prior-year results as sales volumes rose 6 percent
and average selling prices increased 3 percent. Strong demand for the
company's innovative specialty plant nutrients drove both the increased
sales volumes and improved average selling price.

The segment generated operating earnings of $25.1 million, compared to
$8.0 million in the fourth quarter of 2016. The prior-year results
included acquisition-related costs of approximately $8.4 million. When
compared to 2016 adjusted operating earnings, 2017 fourth-quarter
operating earnings rose 53 percent driven by increased sales of higher
value agriculture products. This improved sales mix also produced a
significant improvement in the segment's operating margin which expanded
to 20.2 percent.

For the full year, while sales volumes of our high-value, innovative
specialty plant nutrients sold directly to growers were stronger than
2016, agriculture sales volumes to distributors declined as did the
segment’s chemical solutions sales volumes. As a result, Plant Nutrition
South America sales volumes were below company expectations and
approximately 9 percent below 2016 results, which included periods
during which Compass Minerals did not have complete ownership.

The table below represents results only for the periods during which
Compass Minerals had full control of Produquímica.

OTHER FINANCIAL HIGHLIGHTS

Two significant tax developments materially impacted 2017 net earnings
and increased tax expense for the 2017 fourth-quarter to $67.7 million
compared to $10.5 million in fourth-quarter 2016. The largest impact
resulted from the U.S. Tax Cuts and Jobs Act, which requires a one-time
tax on un-remitted foreign earnings. Based on current company estimates,
this one-time tax totals approximately $55.2 million. The total reported
tax was partially offset by a remeasurement of the company's deferred
tax liabilities, which resulted in a tax benefit of approximately $8.4
million. Going forward, the company expects to have low-cost access to
all foreign earnings, which should provide greater financial flexibility.

In addition, the company recorded a net tax expense of $13.8 million in
the 2017 fourth quarter related to the company’s Canadian tax positions
for the years 2007 through 2016 as a result of a settlement with
Canadian and U.S. tax authorities. This agreement, in addition to the
previously disclosed favorable ruling regarding Canadian federal tax
reassessments for 2004 through 2006, significantly reduces the company’s
remaining potential tax liabilities from disputed reassessments.

Selling, general and administrative (SG&A) expenses for full-year 2017
rose $42.5 million from 2016 results primarily due to the full-year
inclusion of Produquímica which was acquired in October 2016. The
increase was partially offset by cost savings initiatives that were
introduced in July 2017.

OUTLOOK

The company expects that increased winter weather activity in late
December and January will benefit 2018 Salt segment results and
currently anticipates full-year 2018 Salt segment sales volumes to
exceed 2017 results and the company's 10-year average of 11.7 million
tons. Assuming average winter weather continues, revenue for the first
half of 2018 is expected to increase when compared to prior-year
results, which were negatively impacted by lower winter weather demand
for deicing products. A combination of high cost carry-over inventory
and increased shipping and handling costs are expected to pressure Salt
segment operating margins for the first half of 2018.

Steady growth in demand for the company's sulfate of potash and
innovative micronutrient products is expected to lift full-year Plant
Nutrition North America 2018 volumes above 2017 results. Given our view
of spring fertilizer demand, the company anticipates a modest
year-over-year increase in first-half 2018 revenue. The segment's
operating margin is expected to decline for the first half of the year
as a result of increased logistics costs and depreciation expense.

In our Plant Nutrition South America segment, we expect the positive
momentum we have experienced with our innovative, high-value specialty
plant nutrients to push full-year sales volumes and first-half revenue
ahead of 2017 results.

Given this outlook and current expectations regarding the company's
full-year effective tax rate and interest expense, the company has
established a full-year EPS guidance range of $2.75 to $3.25 per diluted
share.

DIVIDEND DECLARED

The Board of Directors of Compass Minerals has approved a dividend for
the first quarter of 2018 of $0.72 per share. This dividend is payable
March 15, 2018, to shareholders of record as of the close of business on
March 1, 2018.

“This dividend is a compelling indicator of the Board of Directors'
confidence in our strategy for growth and value creation, particularly
given the headwinds we've faced,” said Mr. Malecha. “By keeping the
dividend at its current rate, which represents an attractive yield of
more than 4 percent, we expect to have greater financial flexibility to
continue executing our strategic plan, while still demonstrating our
commitment to return value directly to shareholders.”

Conference Call

Compass Minerals will discuss its results on a conference call tomorrow
morning, Wednesday, February 14, at 9:00 a.m. ET. To access the
conference call, please visit the company’s website at www.CompassMinerals.com
or dial 877-614-0009. Callers must provide the conference ID number
6916779. Outside of the U.S. and Canada, callers may dial 913-643-4075.
Replays of the call will be available on the company’s website.

An updated summary of the company’s performance is included in a
presentation available on the company’s website at www.compassminerals.com/presentation.

About Compass Minerals

Compass Minerals is a leading provider of essential minerals that
provide solutions to nature’s challenges, including salt for winter
roadway safety and other consumer, industrial and agricultural uses, and
specialty plant nutrition minerals that improve the quality and yield of
crops. The company produces its minerals at locations throughout the
U.S., Canada, Brazil and the U.K. For more information about Compass
Minerals and its products, please visit www.compassminerals.com.

Non-GAAP Measures

Management uses a variety of measures to evaluate the company’s and its
operating segments’ performance. While the consolidated financial
statements provide an understanding of the company’s overall results of
operations, financial condition and cash flows, management analyzes
components of the consolidated financial statements to identify certain
trends and evaluate specific performance areas. In addition to using
U.S. generally accepted accounting principles (“GAAP”) financial
measures, management uses EBITDA and EBITDA adjusted for items which
management believes are not indicative of the company’s ongoing
operating performance (“Adjusted EBITDA”), both non-GAAP financial
measures, to evaluate the operating performance of the company’s core
business operations because its resource allocation, financing methods
and cost of capital, and income tax positions are managed at a corporate
level, apart from the activities of the operating segments, and the
operating facilities are located in different taxing jurisdictions,
which can cause considerable variation in net income. The company also
uses EBITDA and Adjusted EBITDA to assess its overall and operating
segment operating performance and return on capital against other
companies, and to evaluate potential acquisitions or other capital
projects. EBITDA and Adjusted EBITDA are not calculated under GAAP and
should not be considered in isolation or as a substitute for net income,
operating earnings, cash flows or other financial data prepared in
accordance with GAAP or as a measure of overall profitability or
liquidity. EBITDA and Adjusted EBITDA exclude interest expense, income
taxes and depreciation and amortization, each of which are an essential
element of the company’s cost structure and cannot be eliminated.
Consequently, any measure that excludes these elements has material
limitations. While EBITDA and Adjusted EBITDA are frequently used as
measures of operating performance, these terms are not necessarily
comparable to similarly titled measures of other companies due to the
potential inconsistencies in the method of calculation. The calculation
of EBITDA and Adjusted EBITDA as used by management is set forth in the
following tables.

This press release may contain forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995,
including without limitation statements about the company’s ability to
position itself for growth and improved free cash flow; low-cost access
to foreign earnings, financial flexibility; demand growth; growth and
value creation strategy; commitments to return value to shareholders;
and the company’s outlook for the first half of 2018 and the full year
of 2018, including its expectations regarding earnings per share
(“EPS”), revenue, volumes, operating earnings margin, corporate and
other expense, interest expense, depreciation, depletion and
amortization, capital expenditures and tax rates. We use words such as
“may,” “would,” “could,” “should,” “will,” “likely,”
“expect,”“anticipate,” “believe,” “intend,” “plan,” “forecast,”
“outlook,” “project,” “estimate” and similar expressions suggesting
future outcomes or events to identify forward-looking statements or
forward-looking information. 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 without limitation (i)
weather conditions, (ii) pressure on prices and impact from competitive
products, (iii) any inability by the company to fund necessary capital
expenditures or successfully implement any capital projects, (iv)
foreign exchange rates and the cost and availability of transportation
for the distribution of the company’s products, (v) the ability to
successfully integrate acquired businesses, and (vi) any inability by
the company to successfully implement its restructuring plans or
cost-saving initiatives.

Contacts

Compass Minerals
Investor
Contact
Theresa L. Womble, +1-913-344-9362
Director of
Investor Relations
[email protected]
or
Media
Contact
Tara Hefner, +1-913-344-9319
Manager of Corporate
Affairs
[email protected]

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