CMP

COMPASS MINERALS INTERNATIONAL INC

NYSE · MATERIALS · MINING & QUARRYING OF NONMETALLIC MINERALS (NO FUELS)

21.27

+0.27 +1.29%

USD · close Oct 23

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MKT CAP $892.9MP/E —DIV YIELD —FCF YIELD 8.72%REV TTM $1.3B +5.5%NET INCOME $18.4MNET DEBT $751.3M52W 16.54 – 33.51SEC XBRL · TTM TO Invalid Date

How CMP rewrote its risk factors

10-K ITEM 1A · FY2024 → FY2025

Text kept

63%

of sentences unchanged

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new sentences

Dropped

sentences removed

Length

−580

words, now 11,549

New in FY2025

RISK FACTORS We are subject to a number of risks that could have a material adverse effect on our business, financial condition, results of operations and the value of our securities.
You should carefully consider the following risks and all of the information set forth in this Form 10-K.
The description of the material weaknesses that were determined to exist as of September 30, 2024 and September 30, 2023 is included under Part II Item 9A of this Form 10-K.
These hazardous activities pose significant management challenges and could result in loss of life, a mine shutdown, damage to or destruction of our properties and surrounding properties, production facilities or equipment, production delays or business COMPASS MINERALS INTERNATIONAL, INC. interruption.
For example, unexpected geological conditions could lead to significant water inflows and flooding at any of our underground mines, which could result in a mine shutdown, serious injuries, loss of life, increased operational costs, production delays, damage to our mineral deposits and equipment damage.
The results of our operations are dependent on and vary due to weather conditions and lake level fluctuations.
Other factors such as state or federal actions to manage the salinity of the Great Salt Lake could also alter north arm lake levels and disrupt our evaporation production cycle, impact our access to ambient lake brine in the Great Salt Lake or increase our related capital expenditures and production costs.
Similarly, in recent years drought, decreased mountain snowfall and associated fresh water run-off have reduced brine intake levels, impacting subsequent harvests in 2024 and 2025.
Future occurrences of drought and/or reduced runoff could also impact mineral composition and our mineral harvesting process, amount and timing.
Similar factors could negatively impact the lake level and concentration of sulfates at the Big Quill Lake, impacting the operations at our Wynyard, Saskatchewan, Canada, facility, and potentially leading to decreased production levels, increased operating costs and significant additional capital expenditures.
Weather conditions can also lead to a reduction in farmable acres due to flooding, drought or wildfires, reducing the need for application of plant nutrition products for the next planting season, which could result in lower demand for our SOP products and impact sale prices.
For example, our two North American salt mines together constituted approximately 70% of our salt production capacity as of September 30, 2025, and supply most of the salt sold by our North American highway deicing business and significant portions of the salt sold by our consumer and industrial business.
These factors and assumptions include: • geologic and mining conditions, including our ability to access certain mineral deposits as a result of the nature of the geologic formations of our salt mines or other factors, which may not be fully identified by available exploration data and may differ from our experience in areas we currently mine; • demand for our minerals; • current and future market prices for our minerals, contractual arrangements, operating costs and capital expenditures; • taxes and development and reclamation costs; • mining technology and processing improvements; • the effects of legislation or interpretations thereof, or regulation by governmental agencies; • the ability to obtain, maintain and renew all required permits; • employee health and safety; • historical production from the area compared with production from other producing areas; • the indigenous interest and rights of the First Nation organization in the provinces of Saskatchewan, Ontario and Nova Scotia, and the related consultation requirements applicable to us in these provinces with First Nation, which may impact our ability to obtain permits, lease extensions, mine and conduct our business; and • our ability to convert all or any part of our resources to economically extractable mineral reserves.
Nearly 50% of our workforce in the U.S., Canada and the UK is represented by CBAs.
Of our 12 CBAs in effect on September 30, 2025: • Six expired in fiscal 2025 (including our Cote Blanche mine), four of which were renewed/renegotiated and two are still in the process of being negotiated; • Four will expire in fiscal 2026 (including our Goderich mine, which have 393 positions represented by a CBA); and • Two will expire in fiscal 2027.
Unsuccessful contract negotiations, strained labor relations at any of our locations or other labor-related factors have in the past, and could in the future, result in strikes, work stoppages, work slowdowns, or other forms of labor disruption.
These disruptions may lead to increased operational costs, delays in fulfilling customer commitments and reputational harm.
Ultimately, they could adversely affect our financial condition, operating results and long-term strategic objectives.
Our production processes rely on the consumption of natural gas, electricity, diesel, and certain other raw materials.
Energy costs, primarily natural gas, electricity, and diesel represent a substantial part of our total production costs.
Our profitability is impacted by the price and availability of natural gas, electricity, and diesel we purchase from third parties.
In certain cases, we also source raw materials from a sole COMPASS MINERALS INTERNATIONAL, INC. supplier and cannot guarantee that any supplier will be able to meet our requirements and any changes in their operations, including prolonged outages, could have a material adverse effect on our business.
The demand for our salt and plant nutrition products is seasonal, and the degree of seasonality can change significantly from year to year due to weather conditions, including the number of snow events, rainfall, drought and other factors.
If seasonal demand is greater than we expect, or we experience increased costs and product shortages, our customers may turn to our competitors for products that they would otherwise have purchased from us.
Low seasonal demand could also lead to increased unit costs if our production levels are curtailed.
Variables impacting effective inventory management may adversely impact our performance.
Efficient inventory management is essential to our performance.
We must maintain appropriate inventory levels and product mix to meet customer demand, while minimizing costs related to storing and holding excess inventory.
If our inventory management decisions do not accurately align to demand or otherwise result in excess inventory, as has happened in the past, our financial results may be adversely impacted by markdowns, impairment charges, or impact to subsequent period production rates.
Conversely, if we do not maintain enough inventory to satisfy the demand of our customers, we may lose business to our competitors.
Any such inefficiencies in inventory management could negatively affect our operations and results.
In addition, new production methods or sources for our products or the development of substitute or competing products could materially and adversely affect the demand and sales of our products.
Some of our competitors may have greater financial and other resources than we do or are more diversified, making them less vulnerable to industry downturns and better positioned to pursue new expansion and development opportunities.
Our ability to recover inflation-driven cost increases may be constrained by the terms of our contracts, the competitive nature of the bidding process, and the economic and industry conditions prevailing in the markets where we operate.
Significant inflation presents a risk of materially increasing our costs and adversely impacting our profitability and overall financial performance.
For example, when the Mississippi river floods significantly or if water levels are significantly reduced by severe drought conditions (as they were in 2023), barges may be unable to traverse the river system and we may be prevented from delivering our salt products to our depots and customers on a timely basis, which could increase costs to deliver our products and adversely impact our ability to fulfill our contracts, resulting in significant contractual penalties and loss of customers.
Significant transportation costs relative to the cost of certain of our products, including our salt products, may limit our ability to increase our market share or serve new markets.
We have significant operations in Canada and the UK.
Our fiscal 2025 sales outside the U.S. were 30% of our total fiscal 2025 sales.
Our international operations and sales are subject to numerous risks and uncertainties, including: • economic developments including changes in currency exchange rates, inflation risks, exchange controls, tariffs, economic sanctions, other trade protection measures and import or export licensing requirements; • difficulties and costs associated with complying with laws, treaties and regulations, including tax, labor and data privacy laws, treaties and regulations, and changes to laws, treaties and regulations; • restrictions on our ability to own or operate subsidiaries, make investments or acquire new businesses; • restrictions on our ability to repatriate earnings from our non-U.S. subsidiaries to the U.S. or the imposition of withholding taxes on remittances and other payments by our subsidiaries; • political developments, government deadlock, political instability, political activism, terrorist activities, civil unrest and international conflicts; • uncertain and varying enforcement of laws and regulations and weak protection of intellectual property rights; and • risks relating to epidemics and pandemics and effects therefrom.

and 43 more.

Gone since FY2024

RISK FACTORS We are subject to a number of risks which could have a material adverse effect on our business, financial condition, results of operations and the value of our securities.
You should carefully consider the following risks and all of the information set forth in this report.
The description of the material weaknesses that were determined to exist as of September 30, 2023 and 2024 is included under Part II Item 9A of this Form 10-K.
These hazardous activities pose significant management challenges and could result in loss of life, a mine shutdown, damage to or destruction of our properties and surrounding properties, production facilities or equipment, production delays or business interruption.
For example, unexpected geological conditions could lead to COMPASS MINERALS INTERNATIONAL, INC. significant water inflows and flooding at any of our underground mines, which could result in a mine shutdown, serious injuries, loss of life, increased operational costs, production delays, damage to our mineral deposits and equipment damage.
The results of our operations are dependent on and vary due to weather conditions.
Similarly, in recent years drought or decreased mountain snowfall and associated fresh water run-off have reduced brine levels, which could also impact mineral composition and our mineral harvesting process, amount and timing.
Lake level fluctuations and other factors could alter brine levels or mineral concentration levels, which may disrupt our typical two- to three-year evaporation production cycle.
Similar factors could negatively impact the lake level and concentration of sulfates at the Big Quill Lake, impacting the operations at our Wynyard, Saskatchewan, Canada, facility.
The occurrence of these events at the Great Salt Lake or Big Quill Lake (as a result of climate change or otherwise) could lead to decreased production levels, increased operating costs and significant additional capital expenditures.
Weather conditions can also lead to a reduction in farmable acres, flooding, drought or wildfires, which could also adversely impact the number of acres planted, growers’ crop yields and the uptake of plant nutrients, reducing the need for application of plant nutrition products for the next planting season, which could result in lower demand for our SOP products and impact sale prices.
Weather conditions also impact our fire retardant business, since hotter and drier summer weather is generally correlated with a higher prevalence of wildfires.
Operations at our Ogden, Utah, facility are dependent on ambient brine from the Great Salt Lake, and changes in lake brine levels or any limitations on our continued ability to access ambient lake brine in the Great Salt Lake could adversely affect us.
Our Ogden facility produces three mineral salts - specifically, SOP, sodium chloride and magnesium chloride products - from the high mineral concentrations within the ambient lake brine in the Great Salt Lake.
Our ability to produce SOP, sodium chloride and magnesium chloride at our Ogden facility is dependent upon, among other matters, sufficient lake elevations in the Great Salt Lake and our continued ability to maintain, renew or acquire the permits, licenses and approvals required to access ambient lake brine in the Great Salt Lake.
Sustained drought (as a result of climate change or otherwise), lower lake levels or increased mineral concentrations in the Great Salt Lake could impact mineral composition and our mineral harvesting process, amount and timing.
Lake level fluctuations and other factors, including state or federal actions to manage the salinity of the Great Salt Lake, could alter north arm lake levels and may disrupt our evaporation production cycle, impact our access to ambient lake brine in the Great Salt Lake or increase our related capital expenditures and production costs.
For example, our two North American salt mines together constituted approximately 70% of our salt production capacity as of September 30, 2024, and supply most of the salt sold by our North American highway deicing business and significant portions of the salt sold by our consumer and industrial business.
These factors and assumptions include: • geologic and mining conditions, including our ability to access certain mineral deposits as a result of the nature of the geologic formations of our salt mines or other factors, which may not be fully identified by available exploration data and may differ from our experience in areas we currently mine; COMPASS MINERALS INTERNATIONAL, INC. • demand for our minerals; • current and future market prices for our minerals, contractual arrangements, operating costs and capital expenditures; • taxes and development and reclamation costs; • mining technology and processing improvements; • the effects of legislation or interpretations thereof, or regulation by governmental agencies; • the ability to obtain, maintain and renew all required permits; • employee health and safety; • historical production from the area compared with production from other producing areas; and • our ability to convert all or any part of our resources to economically extractable mineral reserves.
Nearly 50% of our workforce in the U.S., Canada and the U.K. is represented by collective bargaining agreements.
Of our 12 collective bargaining agreements in effect on September 30, 2024, six will expire in fiscal 2025 (including our Cote Blanche mine), four will expire in fiscal 2026 (including our Goderich mine), and two will expire in fiscal 2027.
Unsuccessful contract negotiations, adverse labor relations at any of our locations or other factors have in the past, and could in the future, result in strikes, work stoppages, work slowdowns, dissatisfied employees or other actions, which could disrupt our business and operations.
These disruptions could negatively impact our business, our operations, our ability to produce or sell our products, our ability to service our customers and our ability to recruit and retain personnel and could result in significant additional costs as well as adversely affect our reputation, financial condition and operating results.
Our production processes rely on the consumption of natural gas, electricity and certain other raw materials.
Energy costs, primarily natural gas and electricity, represent a substantial part of our total production costs.
Our profitability is impacted by the price and availability of natural gas and electricity we purchase from third parties.
Our contractual arrangements for the supply of natural gas have terms of up to three years, do not specify quantities and are automatically renewed unless either party elects not to do so.
In certain cases, we also source raw materials from a sole supplier and cannot guarantee that any supplier will be able to meet our requirements and any changes in their operations, including prolonged outages, could have a material adverse effect on our business.
As of September 30, 2024, we had $922.8 million of outstanding indebtedness, including $383.9 million of borrowings under our senior secured credit facilities, which are further described in Part II, Item 8, Note 12 of our Consolidated Financial Statements.
We pay significant interest on our indebtedness, with variable interest on our borrowing under our senior secured credit facilities based on prevailing interest rates.
Our indebtedness could: • require us to agree to less favorable terms, including higher interest rates, in order to incur additional debt, and otherwise limit our ability to borrow additional money or sell our stock to fund our working capital, capital expenditures and debt service requirements; • impact our ability to implement our business strategy and limit our flexibility in planning for, or reacting to, changes in our business as well as changes to economic, regulatory or other competitive conditions; COMPASS MINERALS INTERNATIONAL, INC. • place us at a competitive disadvantage compared to our competitors with greater financial resources; • make us more vulnerable to a downturn in our business or the economy; • require us to dedicate a substantial portion of our cash flow from operations to the repayment of our indebtedness, thereby reducing the availability of our cash flow for other purposes; • restrict us from making strategic acquisitions or cause us to make non-strategic divestitures; and • materially and adversely affect our business and financial condition if we are unable to meet our debt service requirements or obtain additional financing.
The credit agreement governing our senior secured credit facilities also requires us to maintain financial ratios, including an interest coverage ratio and a total leverage ratio, which we may be unable to maintain.
As of September 30, 2024, our total net leverage ratio (as calculated under the terms of our credit agreement) was 4.89x.
We would be in default under our credit agreement if our net leverage ratio exceeds 6.5x as of the last day of any quarter through the fiscal quarter ended September 30, 2025, gradually stepping down to 4.5x for the fiscal quarter ended December 31, 2026 and thereafter.
We are subject to income tax primarily in the U.S., Canada and the U.K.
Our effective tax rate could be adversely affected by changes in the mix of earnings in countries with differing statutory tax rates, changes in the valuation of deferred tax assets and liabilities and the discovery of new information in the course of our tax return preparation process.
Our effective tax rate, tax expense and cash flows could also be adversely affected by changes in tax laws.
Canadian provincial tax authorities have challenged our tax positions and assessed additional taxes on us, which are described in Part II, Item 8, Note 10 to our Consolidated Financial Statements.
A lack of available credit to customers, due to global or local economic conditions or for other reasons, could adversely affect demand for our products and the sales of our products.
We extend trade credit to our customers in the U.S. and throughout the world, in some cases for extended periods of time.

and 57 more.

Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2024 ↗, FY2025 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

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