COMPASS MINERALS INTERNATIONAL INC

Previous wording

Forward-looking statements relate to future events or our future financial performance, and involve known and unknown risks, uncertainties, and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Factors that could cause actual results to differ materially from those expressed or implied by the forward-looking statements include, but are not limited to, the following: our mining and industrial operations; geological conditions; weather conditions; our continued ability to access ambient lake brine in the Great Salt Lake; dependency on a limited number of key production and distribution facilities and critical equipment; the inability to fund necessary capital expenditures or successfully complete capital projects; uncertainties in estimating our economically recoverable reserves and resources; the useful life of our mine properties; conversion of mineral resources into mineral reserves; strikes, other forms of work stoppage or slowdown or other union activities; supply constraints or price increases for energy and raw materials used in our production processes; our indebtedness and inability to pay our indebtedness; restrictions in our debt agreements that may limit our ability to operate our business or require accelerated debt payments; tax liabilities; the inability of our customers to access credit or a default by our customers of trade credit extended by us; financial assurance requirements; our payment of any dividends; the seasonal demand for our products; the impact of anticipated changes in potash product prices and customer application rates; the impact of competition on the sales of our products; inflation risks; increasing costs or a lack of availability of transportation services; risks associated with our international operations and sales, including the impact of any tariffs and changes in currency exchange rates; conditions in the sectors where we sell products and supply and demand imbalances for competing products, including the impact of any tariffs; our rights and governmental authorizations to mine and operate our properties; risks related to unanticipated litigation or investigations or pending litigation or investigations or other contingencies; compliance with environmental, health and safety laws and regulations; environmental liabilities; compliance with foreign and United States (“U.S.”) laws and regulations related to import and export requirements and anti-corruption laws; changes in laws, industry standards and regulatory requirements, including any changes in tariffs imposed; product liability claims and product recalls; misappropriation or infringement claims relating to intellectual property; inability to obtain required product registrations or increased regulatory requirements; our ability to successfully implement o…

Excerpt shortened here; the source contains the full paragraph.

Current wording

Forward-looking statements relate to future events or our future financial performance, and involve known and unknown risks, uncertainties, and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Factors that could cause actual results to differ materially from those expressed or implied by the forward-looking statements include, but are not limited to, the following: our mining and industrial operations; geological conditions; weather conditions; our continued ability to access ambient lake brine in the Great Salt Lake; dependency on a limited number of key production and distribution facilities and critical equipment; the inability to fund necessary capital expenditures or successfully complete capital projects; uncertainties in estimating our economically recoverable reserves and resources; the useful life of our mine properties; conversion of mineral resources into mineral reserves; strikes, other forms of work stoppage or slowdown or other union activities; supply constraints or price increases for energy and raw materials used in our production processes; our indebtedness and inability to pay our indebtedness; restrictions in our debt agreements that may limit our ability to operate our business or require accelerated debt payments; tax liabilities; the inability of our customers to access credit or a default by our customers of trade credit extended by us; financial assurance requirements; our payment of any dividends; the seasonal demand for our products; variables impacting effective inventory management may adversely impact our performance; the impact of anticipated changes in potash product prices and customer application rates; the impact of competition on the sales of our products; inflation risks; increasing costs or a lack of availability of transportation services; risks associated with our international operations and sales, including the impact of any tariffs and changes in currency exchange rates; conditions in the sectors where we sell products and supply and demand imbalances for competing products, including the impact of any tariffs; our rights and governmental authorizations to mine and operate our properties; risks related to unanticipated litigation or investigations or pending litigation or investigations or other contingencies; compliance with environmental, health and safety laws and regulations; environmental liabilities; compliance with foreign and United States (“U.S.”) laws and regulations related to import and export requirements and anti-corruption laws; changes in laws, industry standards and regulatory requirements, including any changes in tariffs imposed; product liability claims and product recalls; misappropriation or infringement claims relating to intellectual property; inability to obtain required product re…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

otherwise noted, references to North America include only the continental U.S. and Canada, and references to the United Kingdom (“U.K.”) include only England, Scotland and Wales. Except where otherwise noted, all references to tons refer to “short tons” and all amounts are in U.S. dollars. One short ton equals 2,000 pounds and one metric ton equals 2,204.6 pounds. Compass Minerals and Protassium+ and combinations thereof, are trademarks of CMI or its subsidiaries in the U.S. and other countries.

Current wording

Unless the context requires otherwise, references to the “Company,” “Compass Minerals,” “our,” “us” and “we” refer to Compass Minerals International, Inc. (“CMI,” the parent holding company) and its consolidated subsidiaries. Except where otherwise noted, references to North America include only the continental U.S. and Canada, and references to the United Kingdom (“U.K.”) include only England, Scotland and Wales. Except where otherwise noted, all references to tons refer to “short tons” and all amounts are in U.S. dollars. One short ton equals 2,000 pounds and one metric ton equals 2,204.6 pounds. Compass Minerals and Protassium+ and combinations thereof, are trademarks of CMI or its subsidiaries in the U.S. and other countries.

Previous wording

A discussion of our critical accounting estimates used in preparation of our consolidated financial statements is presented under the heading "Management’s Discussion of Critical Accounting Policies and Estimates" in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our 2024 Form 10-K.

Current wording

For a discussion of our critical accounting estimates used in preparation of our consolidated financial statements is presented under the heading "Management’s Discussion of Critical Accounting Estimates" in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our 2025 Form 10-K.

Previous wording

We continue to monitor the effects of the recent tariffs imposed by the U.S. administration during the second quarter of 2025, the reciprocal tariffs and retaliatory tariffs imposed by other countries, and the impact on our business. Our salt and fertilizer production in Canada is qualified under the United States-Mexico-Canada (“USMCA”) trade agreement. Accordingly, our exports from Canada into the United States are exempt from tariffs at this time.

Current wording

We continue to monitor the current tariff landscape including the effects of the tariffs imposed by the U.S. administration beginning in the second quarter of 2025, the reciprocal tariffs and retaliatory tariffs imposed by other countries, the developments of the upcoming joint review of the United States-Mexico-Canada (“USMCA”), and the impact on our business. Our salt and fertilizer production in Canada is qualified under the USMCA trade agreement. Accordingly, our exports from Canada into the United States are exempt from tariffs at this time.

Previous wording

On July 4, 2025, the U.S. enacted a budget reconciliation package known as the “One Big Beautiful Bill Act of 2025” (“OBBBA”), which includes both tax and non-tax provisions. We are evaluating the effects of these changes and other provisions of this legislation on our consolidated financial statements; however, we do not expect the changes resulting from the tax provisions in OBBBA will have a material impact on the Company’s results of operations due to the timing of our fiscal year reporting.

Current wording

On July 4, 2025, the U.S. enacted a budget reconciliation package known as the “One Big Beautiful Bill Act of 2025” (“OBBBA”), which includes both tax and non-tax provisions. While the Company will realize some benefits from the relaxing of interest deduction limitations, the Company does not view the OBBBA to significantly impact its income tax profile.

Previous wording

The following is a summary of our consolidated results of continuing operations for the three and nine months ended June 30, 2025 and June 30, 2024, respectively. The following discussion should be read in conjunction with the information contained in our consolidated financial statements and the notes thereto included in this Quarterly Report on Form 10-Q.

Current wording

The following is a summary of our consolidated results of operations for the three months ended December 31, 2025 and December 31, 2024, respectively. The following discussion should be read in conjunction with the information contained in our condensed consolidated financial statements and the notes thereto included in this Quarterly Report on Form 10-Q.

Previous wording

•Total sales increased 6%, or $11.7 million, due to higher Salt and Plant Nutrition segment sales. The increase in sales for Salt reflected higher deicing and consumer and industrial sales volumes, which was partially offset by lower combined average sales prices. Plant Nutrition sales increased from the prior year due to an increase in sales volumes, partially offset by lower average sales prices.

Current wording

•Total sales increased 28.9%, or $88.9 million, due to higher Salt segment sales. The increase in sales for Salt was primarily due to higher deicing sales volumes of 43.5% and higher consumer and industrial sales volumes of 13.6%, with the combined average sales price remaining essentially flat between the two periods. Plant Nutrition sales decreased 1.0% from the prior year due to the decrease in sales volumes, partially offset by higher average sales prices.

Previous wording

•Operating income of $15.9 million improved $10.0 million from $5.9 million in the prior-year period, primarily reflecting higher Salt and Plant Nutrition operating earnings. Salt operating earnings increased $2.2 million as higher sales volumes and lower per-unit product costs were partially offset by lower average sales prices. Plant Nutrition operating income improved from a prior period operating loss primarily due to higher sales volumes and lower per-unit product costs, which were partially offset by lower average sales prices and higher per-unit distribution costs.

Current wording

•Operating income of $36.6 million improved $36.1 million from $0.5 million in the prior-year period, primarily reflecting higher Salt and Plant Nutrition operating income. Salt operating income increased $19.7 million primarily due to higher sales volumes and lower per-unit product costs. Plant Nutrition operating income was $5.4 million and improved from a prior period operating loss of $3.1 million, primarily due to higher average sales prices and lower per-unit product costs, partially offset by lower sales volumes and higher per-unit distribution costs.

Previous wording

•Diluted net loss per common share of $0.41 improved by $0.64 from $1.05 loss per common share in the prior-year period.

Current wording

•Diluted net income per common share of $0.43 improved by $1.00 from $0.57 net loss per common share in the prior-year period.

Previous wording

Gross Profit: Increased 26%, or $8.6 million; Gross Margin increased 3 percentage points to 19%

Current wording

Gross Profit: Increased 84.3%, or $28.9 million; Gross Margin increased 4.8 percentage points to 16.0%

Previous wording

•The gross profit of the Plant Nutrition segment increased $5.9 million due to higher sales volumes and lower per-unit product costs, which were partially offset by higher distribution costs and lower average sales prices (see Plant Nutrition operating results).

Current wording

•The gross profit of the Plant Nutrition segment increased $8.5 million due to higher average sales prices (see Plant Nutrition operating results) and lower per-unit product costs, which were partially offset by lower sales volumes and higher per-unit distribution costs.

Previous wording

SG&A: Decreased $3.5 million; Decreased 2.4 percentage points as a percentage of sales from 13.6% to 11.2%

Current wording

SG&A: Decreased $6.7 million; or 4.1 percentage points as a percentage of sales from 10.8% to 6.7%

Previous wording

Interest Income: Increased $0.1 million to $0.3 million

Current wording

Interest Income: Decreased $0.1 million to $0.3 million

Previous wording

•The increase in interest income during the current period is primarily due to the higher average cash balance in the current year.

Current wording

•The decrease in interest income during the current period is primarily due to the lower average cash balance in the current year.

Previous wording

Loss (Gain) on Foreign Exchange: Rose $8.9 million from a $0.5 million gain in the prior-year period to an $8.4 million loss

Current wording

Loss (Gain) on Foreign Exchange: Increased $7.3 million from a $5.2 million gain in the prior-year period to a $2.1 million loss

Previous wording

•We realized a loss on foreign exchange of $3.1 million in the nine months ended June 30, 2025, compared to a gain of $1.1 million in the same period of the prior fiscal year, due primarily reflecting the translation of our intercompany loans from Canadian dollars to U.S. dollars.

Current wording

•Foreign exchange loss was $2.1 million during the three months ended December 31, 2025, compared to a gain of $5.2 million in the same quarter of the prior-year period, primarily reflecting the translation of Canadian dollars to U.S. dollars.

Previous wording

•Our income tax provision for the three months ended June 30, 2025 and June 30, 2024 differs from the U.S. statutory rate primarily due to U.S. statutory depletion, state income taxes, nondeductible executive compensation, foreign income, mining and withholding taxes, valuation allowance expense and base erosion and anti-abuse tax.

Current wording

•Our income tax provision for the three months ended December 31, 2025 and December 31, 2024 differs from the U.S. statutory rate primarily due to U.S. statutory depletion, state income taxes, nondeductible executive compensation, foreign income, mining and withholding taxes, valuation allowance expense, and base erosion and anti-abuse tax, and discrete tax benefits related to a foreign provincial tax settlement.

Previous wording

The results of operations of the Fortress business include sales of $0 and $14.6 million for the three and nine months ended June 30, 2024, respectively, and no sales in fiscal 2025. The results of operations of the consolidated records management business and other incidental revenues include sales of $3.8 million and $3.5 million for the three months ended June 30, 2025 and June 30, 2024, respectively, and $11.0 million and $10.1 million for the nine months ended June 30, 2025 and June 30, 2024, respectively. These sales are not material to our consolidated financial results and are not included in the following operating segment financial data.

Current wording

The results of operations of the consolidated records management business and other incidental revenues include sales of $3.8 million and $3.6 million for the three months ended December 31, 2025 and December 31, 2024, respectively. These sales are not material to our consolidated financial results and are not included in the following operating segment financial data.

Previous wording

•Salt sales volumes increased 4% in total, or 61,000 tons, which increased sales by approximately $5.3 million. Highway deicing sales volumes increased 5%, reflecting an increase in sales volumes to highway and liquid magnesium chloride customers. Consumer and industrial sales volumes increased 2%, primarily due to higher non-deicing volumes.

Current wording

•Salt sales volumes increased 37.4% in total, or 933,000 tons. Highway deicing sales volumes increased 43.5%, reflecting an increase in sales volumes to highway and liquid magnesium chloride customers. Consumer and industrial sales volumes increased 13.6%.

Previous wording

•Highway deicing average sales price increased 1% reflecting product sales mix. Consumer and industrial average sales price decreased 1% reflecting non-deicing product sales.

Current wording

•Highway deicing average sales price increased 6.4% reflecting sales mix. Consumer and industrial average sales price increased 2.0%.

Previous wording

•Salt operating earnings increased $2.2 million, as higher sales volumes, lower per-unit production costs and lower per-unit distribution costs were offset by lower average sales prices.

Current wording

•Salt operating income increased $19.7 million, driven by higher sales volumes and lower per-unit production costs.

Previous wording

•Plant Nutrition operating earnings increased $6.6 million to $5.2 million from an operating loss in the prior-year period of $1.4 million. Plant Nutrition operating earnings were impacted by higher sales volumes and lower per-unit product cost, partially offset by lower average sales prices and higher per-unit distribution costs.

Current wording

•Plant Nutrition operating income increased $8.5 million to $5.4 million from an operating loss in the prior-year period of $3.1 million. Plant Nutrition operating income for the three months ended December 31, 2025, compared to the three months ended December 31, 2024, was impacted by higher average sales prices and lower per-unit product cost, partially offset by lower sales volumes attributable to the Company not pursuing lower margin export opportunities and higher-per unit distribution costs.

Previous wording

Management uses a variety of measures to evaluate our performance. While our consolidated financial statements, taken as a whole, provide an understanding of our overall results of operations, financial condition and cash flows, we analyze components of the consolidated financial statements to identify certain trends and evaluate specific performance areas. In addition to using U.S. GAAP financial measures, such as gross profit, net earnings and cash flows generated by operating activities, management uses earnings before interest, taxes, depreciation and amortization (“EBITDA”) adjusted for items management believes are not indicative of our ongoing operating performance (“Adjusted EBITDA”). Both EBITDA and Adjusted EBITDA are non-GAAP financial measures used to evaluate the operating performance of our core business operations because our resource allocation, financing methods, cost of capital and income tax positions are managed at a corporate level, apart from the activities of the operating segments, and our operating facilities are located in different taxing jurisdictions, which can cause considerable variation in net earnings. We also use EBITDA and Adjusted EBITDA to assess our 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 U.S. GAAP and should not be considered in isolation or as a substitute for net earnings, cash flows or other financial data prepared in accordance with U.S. GAAP or as a measure of our overall profitability or liquidity.

Current wording

Management uses a variety of measures to evaluate our performance. While our consolidated financial statements, taken as a whole, provide an understanding of our overall results of operations, financial condition and cash flows, we analyze components of the consolidated financial statements to identify certain trends and evaluate specific performance areas. In addition to using U.S. GAAP financial measures, such as gross profit, net income (loss) and cash flows generated by operating activities, management uses income before interest, taxes, depreciation and amortization (“EBITDA”) adjusted for items management believes are not indicative of our ongoing operating performance (“Adjusted EBITDA”). Both EBITDA and Adjusted EBITDA are non-GAAP financial measures used to evaluate the operating performance of our core business operations because our resource allocation, financing methods, cost of capital and income tax positions are managed at a corporate level, apart from the activities of the operating segments, and our operating facilities are located in different taxing jurisdictions, which can cause considerable variation in net income (loss). We also use EBITDA and Adjusted EBITDA to assess our 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 U.S. GAAP and should not be considered in isolation or as a substitute for net income (loss), cash flows or other financial data prepared in accordance with U.S. GAAP or as a measure of our overall profitability or liquidity.

Previous wording

EBITDA and Adjusted EBITDA exclude interest expense, income taxes and depreciation and amortization, each of which are an essential element of our cost structure and cannot be eliminated. Furthermore, Adjusted EBITDA excludes other cash and non-cash items, including stock-based compensation, interest income, (gain) loss on foreign exchange, other (income) expense, net and other significant items that management does not consider indicative of normal operations. Other significant items, such as executive transition costs, restructuring charges and impairment charges involve distinct initiatives that are not reflective of core operating activities and affect the comparability of our operational results across reporting periods. Our borrowings are a significant component of our capital structure and interest expense is a continuing cost of debt. We are also required to pay income taxes, a required and ongoing consequence of our operations. We have a significant investment in capital assets and depreciation and amortization reflect the utilization of those assets in order to generate revenues. Our employees are vital to our operations and we utilize various stock-based awards to compensate and incentivize our employees. 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.

Current wording

EBITDA and Adjusted EBITDA exclude interest expense, income taxes and depreciation and amortization, each of which are an essential element of our cost structure and cannot be eliminated. Furthermore, Adjusted EBITDA excludes other cash and non-cash items, including stock-based compensation, interest income, (gain) loss on foreign exchange, other (income) expense, net and other significant items that management does not consider indicative of normal operations. Other significant items, if any, such as restructuring charges and impairment charges involve distinct initiatives that are not reflective of core operating activities and affect the comparability of our operational results across reporting periods. Our borrowings are a significant component of our capital structure and interest expense is a continuing cost of debt. We are also required to pay income taxes, a required and ongoing consequence of our operations. We have a significant investment in capital assets and depreciation and amortization reflect the utilization of those assets in order to generate revenues. Our employees are vital to our operations and we utilize various stock-based awards to compensate and incentivize our employees. 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.

Previous wording

Adjusted EBITDA increased 25.0%, or $8.2 million for the three months ended June 30, 2025, compared to the three months ended June 30, 2024, primarily due to an increase in gross profit and a reduction in selling, general and administrative expenses. Adjusted EBITDA decreased by 18%, or $33.5 million for the nine months ended June 30, 2025, compared to the nine months ended June 30, 2024, primarily due to a reduction in gross profit and a reduction in gain related to the Fortress contingent consideration of $15.2 million, partially offset by a decrease in selling, general and administrative expenses.

Current wording

Net income increased $42.2 million for the three months ended December 31, 2025, compared to the three months ended December 31, 2024, primarily due to increases in operating income of $36.1 million and a decrease in income tax expense of $11.9 million, partially offset by an increase in total other expense of $5.8 million, primarily due to a loss on foreign exchange. Adjusted EBITDA increased $33.2 million for the three months ended December 31, 2025, compared to the three months ended December 31, 2024, primarily due to increases in sales and gross profit and a reduction in selling, general and administrative expenses.

Previous wording

(a)We recorded costs related to a recall of food-grade salt produced at our Goderich plant. Refer to Note 8. Commitments and Contingencies in the Notes to the Consolidated Financial Statements under Item 1 of Part I of this Form 10-Q for additional details.

Current wording

(a)Costs relate to a recall of food-grade salt produced at our Goderich plant. Refer to Note 7. Commitments and Contingencies in the Notes to the Consolidated Financial Statements under Item 1 of Part I of this Form 10-Q for additional details.

Previous wording

Historically, our cash flows from operating activities have generally been adequate to fund our basic operating requirements, ongoing debt service and sustaining investment in our property, plant and equipment. We have also used cash generated from operations to fund capital expenditures, pay dividends, fund smaller acquisitions and repay our debt. To a certain extent, our ability to meet our short- and long-term liquidity and capital needs is subject to general economic, financial, competitive and weather conditions, effects of climate change, geological variations in our mine deposits and other factors that are beyond our control. Historically, our working capital requirements have been the highest in the first fiscal quarter (ending December 31) and lowest in the third fiscal quarter (ending June 30). When needed, we may fund short-term working capital requirements by accessing our $325 million revolving credit facility and our revolving AR Securitization Facility with a capacity, which is subject to certain conditions, of up to $100.0 million. As of June 30, 2025, we had liquidity of approximately $388.7 million, comprised of $79.4 million of cash and cash equivalents and $309.3 million of availability under our $325 million revolving credit facility.

Current wording

Historically, our cash flows from operating activities have generally been adequate to fund our basic operating requirements, ongoing debt service and sustaining investment in our property, plant and equipment. We have also used cash generated from operations to fund capital expenditures, pay dividends, fund smaller acquisitions and repay our debt. To a certain extent, our ability to meet our short- and long-term liquidity and capital needs is subject to general economic, financial, competitive and weather conditions, effects of climate change, geological variations in our mine deposits and other factors that are beyond our control. Historically, our working capital requirements have been the highest in the first fiscal quarter (ending December 31) and lowest in the third fiscal quarter (ending June 30). When needed, we may fund short-term working capital requirements by accessing our $325 million revolving credit facility and our revolving AR Securitization Facility to March 2027 with a capacity, which is subject to certain conditions, of up to $100.0 million. As of December 31, 2025, we had liquidity of approximately $341.7 million, comprised of $46.7 million of cash and cash equivalents and $295.0 million of availability under our $325 million revolving credit facility.

Previous wording

We have been able to manage our cash flows generated and used across Compass Minerals to indefinitely reinvest earnings in our foreign jurisdictions or efficiently repatriate those funds to the U.S. As of June 30, 2025, we had $29.6 million of cash and cash equivalents that was either held directly or indirectly by foreign subsidiaries. In fiscal 2024, we did not repatriate any unremitted foreign earnings. During the second quarter of fiscal 2025, we revised our permanently reinvested assertion. We are expecting to repatriate approximately $11 million of unremitted foreign earnings from our U.K. operations on which there was no income tax impact as of June 30, 2025. It is our current intention to continue to reinvest the remaining undistributed earnings of our foreign subsidiaries indefinitely. We review our tax circumstances on a regular basis with the intent of optimizing cash accessibility and minimizing tax expense.

Current wording

We have been able to manage our cash flows generated and used across Compass Minerals to indefinitely reinvest earnings in our foreign jurisdictions or efficiently repatriate those funds to the U.S. As of December 31, 2025, we had $25.0 million of cash and cash equivalents that was either held directly or indirectly by foreign subsidiaries. In fiscal 2025, we did not repatriate any unremitted foreign earnings. During the second quarter of fiscal 2025, we revised our permanently reinvested assertion. We are expecting to repatriate approximately $11 million of unremitted foreign earnings from our U.K. operations on which there was no income tax impact as of December 31, 2025. It is our current intention to continue to reinvest the remaining undistributed earnings of our foreign subsidiaries indefinitely. We review our tax circumstances on a regular basis with the intent of optimizing cash accessibility and minimizing tax expense.

Previous wording

In addition, the amount of permanently reinvested earnings is influenced by, among other things, the profits generated by our foreign subsidiaries and the amount of investment in those same subsidiaries. The profits generated by our U.S. and foreign subsidiaries are impacted by the transfer price charged on the transfer of our products between them. Canadian provincial taxing

Current wording

In addition, the amount of permanently reinvested earnings is influenced by, among other things, the profits generated by our foreign subsidiaries and the amount of investment in those same subsidiaries. The profits generated by our U.S. and foreign subsidiaries are impacted by the transfer price charged on the transfer of our products between them. In November 2025, we reached a settlement with a Canadian provincial tax authority regarding a tax dispute. The settlement resolved the dispute for tax years 2002 through 2018 for a total cash outlay of $8.2 million, net of federal refunds and deductions associated with the agreed upon tax and interest, and was paid during the three months ended December 31, 2025. With the settlement, the performance bonds of $157.4 million posted as collateral for the 2002 through 2018 period were released. See Note 5. Income Taxes in the Notes to the Consolidated Financial Statements under Item 1 of Part I of this Form 10-Q, for a discussion regarding our Canadian tax reassessments.

Previous wording

Management assesses the available positive and negative evidence to estimate whether sufficient future taxable income will be generated to permit use of the existing deferred tax assets. A significant piece of objective negative evidence evaluated was the cumulative loss incurred in the U.S. over the three-year period ended June 30, 2025. Such objective evidence limits the ability to consider other subjective evidence, such as our projections for future income. On the basis of this evaluation, during the nine months ended June 30, 2025, an additional valuation allowance of $29.0 million has been recorded to recognize only the portion of the U.S. deferred tax assets that are more likely than not to be realized. The amount of the deferred tax assets considered realizable, however, could be adjusted if estimates of future taxable income during the carryforward period are increased or reduced or if objective negative evidence in the form of cumulative losses is no longer present and additional weight is given to subjective evidence such as our projections for income.

Current wording

Management assesses the available positive and negative evidence to estimate whether sufficient future taxable income will be generated to permit use of the existing deferred tax assets. A significant piece of objective negative evidence evaluated was the cumulative loss incurred in the U.S. over the three-year period ended December 31, 2025. Such objective evidence limits the ability to consider other subjective evidence, such as our projections for future income. On the basis of this evaluation, during the three months ended December 31, 2025, no change in additional valuation allowance has been recorded to recognize the portion of the U.S. deferred tax assets that are more likely than not to be realized. The amount of the deferred tax assets considered realizable, however, could be adjusted if estimates of future taxable income during the carryforward period are increased or reduced or if objective negative evidence in the form of cumulative losses is no longer present and additional weight is given to subjective evidence such as our projections for income.

Previous wording

As of June 30, 2025, we had $839.7 million of outstanding indebtedness, consisting of $650.0 million outstanding under our 8.00% Senior Notes due 2030, $150.0 million outstanding under our 6.75% Senior Notes due 2027, $0 of borrowings outstanding under our senior secured credit facilities under the Credit Agreement (term loans and our revolving credit facility), and $39.7 million of outstanding loans under the accounts receivable financing facility (“AR Securitization Facility”) (see Note 7. Long-Term Debt and Finance Lease Liabilities in the Notes to the Consolidated Financial Statements under Item 1 of Part I of this Form 10-Q for more detail regarding our debt). Outstanding letters of credit totaling $15.7 million as of June 30, 2025 further reduced available borrowing capacity under our revolving credit facility to $309.3 million.

Current wording

As of December 31, 2025, we had $896.5 million of outstanding indebtedness, consisting of $650.0 million outstanding under our 8.00% Senior Notes due 2030, $150.0 million outstanding under our 6.75% Senior Notes due 2027, $10.0 million of borrowings outstanding under our revolving credit facilities under the Credit Agreement, and $86.5 million of outstanding loans under the accounts receivable financing facility (“AR Securitization Facility”) (see Note 6. Long-Term Debt and Finance Lease Liabilities in the Notes to the Consolidated Financial Statements under Item 1 of Part I of this Form 10-Q for more detail regarding our debt). Outstanding letters of credit totaling $20.0 million as of December 31, 2025 further reduced available borrowing capacity under our revolving credit facility to $295.0 million.

Previous wording

Our debt service obligations could, under certain circumstances, materially affect our financial condition and prevent us from fulfilling our debt obligations. As a holding company, CMI’s investments in its operating subsidiaries constitute substantially all of its assets. Consequently, our subsidiaries conduct substantially all of our consolidated operating activities and own substantially all of our operating assets. The principal source of the cash needed to pay our obligations is the cash generated from our subsidiaries’ operations and their borrowings. Furthermore, we must remain in compliance with the terms of the 2023 Credit Agreement governing our credit facilities, including the consolidated total net leverage ratio and interest coverage ratio, in order to pay dividends to our stockholders. We must also comply with the terms of our indentures governing our 6.75% Senior Notes due December 2027 and our 8.00% Senior Notes due June 2030, which limit the amount of dividends we can pay to our stockholders.

Current wording

Our debt service obligations could, under certain circumstances, materially affect our financial condition and prevent us from fulfilling our debt obligations. As a holding company, CMI’s investments in its operating subsidiaries constitute substantially all of its assets. Consequently, our subsidiaries conduct substantially all of our consolidated operating activities and own substantially all of our operating assets. The principal source of the cash needed to pay our obligations is the cash generated from our subsidiaries’ operations and their borrowings. Furthermore, we must remain in compliance with the terms of the 2023 Credit Agreement governing our credit facilities, including the consolidated first lien net leverage ratio and consolidated interest coverage ratio, in order to pay dividends to our stockholders. We must also comply with the terms of our indentures governing our 6.75% Senior Notes due December 2027 and our 8.00% Senior Notes due July 2030, which limit the amount of dividends we can pay to our stockholders.

Previous wording

The table below provides a summary of our cash flows by category:

Current wording

The table below provides a summary of our sources and uses of cash (in millions):

Previous wording

As mentioned above, our Salt segment’s business is seasonal and our Salt segment results and working capital needs are heavily impacted by the severity and timing of the winter weather, which generally occurs from December through March of each year. Customers tend to replenish their inventory prior to the start of the winter season and following snow events; consequently, the number and timing of snow events during the winter season will impact the amount of our accounts receivable and inventory at the end of each quarter. Our operating cash flows for the nine months ended June 30, 2025, reflect the seasonal decrease in inventory due to the end of the winter season. During the nine months ended June 30, 2024, we paid liabilities accrued as of September 30, 2023, including the remaining $10 million settlement payment to the SEC, accrued incentive compensation and other liabilities. Additionally, at the end of Fortress’ contract term with the USFS, we recognized revenue previously deferred in accrued liabilities and decreased our contingent consideration liability.

Current wording

As mentioned above, our Salt segment’s business is seasonal and our Salt segment results and working capital needs are heavily impacted by the severity and timing of the winter weather, which generally occurs from December through March of each year. Customers tend to replenish their inventory prior to the start of the winter season and following snow events; consequently, the number and timing of snow events during the winter season will impact the amount of our accounts receivable and inventory at the end of each quarter. Our operating cash flows for both the three months ended December 31, 2025 and December 31, 2024, reflect the seasonal increase in accounts receivable and accounts payable and the decrease in inventories due to the beginning of the winter season. During the three months ended December 31, 2025, the decrease in the line item, Accounts payable and accrued expenses and other current liabilities, primarily relates to interest payments made in the period. In addition, changes in Other assets and Other liabilities during the three months ended December 31, 2025, primarily reflect the settlement of the tax dispute with the Canadian tax authorities, of which a previously recorded deposits were applied to the amount due at settlement. See Note 5. Income Taxes in the Notes to the Consolidated Financial Statements under Item 1 of Part I of this Form 10-Q, for further information.

Previous wording

On October 25, 2024, we issued a recall for specific production lots of food-grade salt produced at our Goderich Plant following a customer report of a non-organic, foreign material in its product. We subsequently expanded the voluntary recall to include food products from the Goderich Plant between September 18 and November 6, 2024. The products recalled included both products sold prior and subsequent to September 30, 2024. We followed recall protocol and notified our BRCGS Global

Current wording

On October 25, 2024, we issued a recall for specific production lots of food-grade salt produced at our Goderich Plant following a customer report of a non-organic, foreign material in our product. We subsequently expanded the voluntary recall to include food products from the Goderich Plant between September 18, 2024 and November 6, 2024. We followed recall protocol and notified the BRCGS Global Standard for Food Safety certifying body, the Canadian Food Inspection Agency (“CFIA”) and the U.S. Food and Drug Administration (“FDA”). We completed our investigation and continue to assess the scope and magnitude of customer claims related to the recall. At this time, based on currently available information and our applicable insurance coverage, we do not believe any incremental losses will have a material adverse effect on our results of operations or cash flows in future periods. The recall in the United States, supervised by the FDA, is complete, and the matter is closed with FDA. The CFIA has conducted a follow-up inspection of the Goderich Plant to verify compliance with regulatory requirements and identified no non-compliances. See Note 7. Commitments and Contingencies in the Notes to the Consolidated Financial Statements under Item 1 of Part I of this Form 10-Q for additional details.

Previous wording

We experience a substantial amount of seasonality in our sales, including our salt deicing product sales. Consequently, our Salt segment sales and operating income are generally higher in the first and second fiscal quarters (ending December 31 and March 31) and lower during the third and fourth fiscal quarters of each year (ending June 30 and September 30). In particular, sales of highway and consumer deicing salt and magnesium chloride products vary based on the severity of the winter conditions in areas where the product is used. Following industry practice in North America and the U.K., we seek to stockpile sufficient quantities of deicing salt throughout the first, third and fourth fiscal quarters (ending December 31, June 30 and September 30) to meet the estimated requirements for the winter season. Our plant Nutrition business is also seasonal. As a result, we and our customers generally build inventories during the plant Nutrition business’ low demand periods of the year (which are typically winter and summer, but can vary due to weather and other factors) to ensure timely product availability during the peak sales seasons (which are typically spring and autumn, but can also vary due to weather and other factors).

Current wording

We experience a substantial amount of seasonality in our sales, including our salt deicing product sales. Consequently, our Salt segment sales and operating income are generally higher in the first and second fiscal quarters (ending December 31 and March 31) and lower during the third and fourth fiscal quarters of each year (ending June 30 and September 30). In particular, sales of highway and consumer deicing salt and magnesium chloride products vary based on the severity of the winter conditions in areas where the products are used. Following industry practice in North America and the U.K., we seek to stockpile sufficient quantities of deicing salt throughout the first, third and fourth fiscal quarters (ending December 31, June 30 and September 30) to meet the estimated requirements for the winter season. Our plant Nutrition business is also seasonal. As a result, we and our customers generally build inventories during the plant Nutrition business’ low demand periods of the year (which are typically winter and summer, but can vary due to weather and other factors) to ensure timely product availability during the peak sales seasons (which are typically spring and autumn, but can also vary due to weather and other factors).

Previous wording

The potential impact of climate change on our operations, product demand and the needs of our customers remains uncertain. Significant changes to weather patterns, a reduction in average snowfall or regional drought within our served markets or at our Ogden facility could negatively impact customer demand for our products and our costs, as well as our ability to produce our products. For example, prolonged periods of mild winter weather could reduce the demand for our deicing products. Drought or excessive precipitation could similarly impact demand for our SOP products, as well as continue to impact the amount and quality of feedstock used to produce SOP at our Ogden facility due to changes in brine levels, mineral concentrations or other

Current wording

The potential impact of climate change on our operations, product demand and the needs of our customers remains uncertain. Significant changes to weather patterns, a reduction in average snowfall or regional drought within our served markets or at our Ogden facility could negatively impact customer demand for our products and our costs, as well as our ability to produce our products. For example, prolonged periods of mild winter weather could reduce the demand for our deicing products. Drought or excessive precipitation could similarly impact demand for our SOP products, as well as continue to impact the amount and quality of feedstock used to produce SOP at our Ogden facility due to changes in brine levels, mineral concentrations or other factors, which could have a material impact on our Plant Nutrition results of operations. Climate change could also lead to disruptions in the production or distribution of our products due to major storm events or prolonged adverse conditions, changing temperature levels, lake level fluctuations or flooding from sea level changes. Climate change or governmental initiatives to address climate change may affect our operations and necessitate capital expenditures in the future, although capital expenditures for climate-related projects are not expected to be material in fiscal 2026. For more information, see Part I, Item 1A, “Risk Factors” and Part I, Item 1 “Business—Environmental, Health and Safety and Other Regulatory Matters” in our 2025 Form 10-K.