Slides
Page 1
Fiscal 2024 Fourth-Quarter & Full-Year Business Update// December 16, 2024
Page 2
Forward-Looking Statements and Other DisclaimersThis presentation may contain forward-looking statements, including, without limitation, statementsabout cash generation capability; debt reduction; value creation; expectations for Fortress; thecompany's outlook for 2025, including its expectations regarding pricing, sales volumes, revenue,corporate and other expense, depreciation, depletion and amortization, interest expense, tax rates,capital expenditures, operating expenses, and Adjusted EBITDA. Forward-looking statements arethose that predict or describe future events or trends and that do not relate solely to historical matters.We use words such as “may,” “would,” “could,” “should,” “will,” “likely,” “expect,” “anticipate,” “believe,”“intend,” “plan,” “forecast,” “outlook,” “project,” “estimate” and similar expressions suggesting futureoutcomes or events to identify forward-looking statements or forward-looking information. Thesestatements are based on the company’s current expectations and involve risks and uncertainties thatcould cause the company’s actual results to differ materially. The differences could be caused by anumber of factors, including without limitation (i) weather conditions, (ii) inflation, the cost andavailability of transportation for the distribution of the company’s products and foreign exchange rates,(iii) pressure on prices and impact from competitive products, (iv) any inability by the company tosuccessfully implement its strategic priorities or its cost-saving or enterprise optimization initiatives,and (v) the risk that the company may not realize the intended financial or other benefits from, or that itmay incur unexpected costs in connection with, its ownership of Fortress North America. For furtherinformation on these and other risks and uncertainties that may affect the company’s business, see the“Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results ofOperations” sections of the company’s Annual Report on Form 10-K for the period ended Sept. 30,2024, its Amended Quarterly Reports on Form 10-Q/A for the quarters ended Dec. 31, 2023 and Mar.31, 2024, and its Quarterly Report on Form 10-Q for the quarter ended June 30, 2024 filed or to befiled with the SEC, as well as the company's other SEC filings. The company undertakes no obligationto update any forward-looking statements made in this press release to reflect future events ordevelopments, except as required by law. Because it is not possible to predict or identify all suchfactors, this list cannot be considered a complete set of all potential risks or uncertainties. 2
Page 3
Fiscal 2024 Fourth-Quarter & Full-Year Results
Page 4
4 Fiscal Fourth-Quarter and Full-Year 2024 Financial Overview 4 • Net loss for the fourth quarter of 2024 of $48.3 million, inclusive of a $17.6 million write down of certain intangible water rights in Utah• Total company adjusted EBITDA for the fourth quarter of 2024 of $15.6 million, down from $31.3 million in the prior year• Total company adjusted EBITDA up 4% year over year to $206.3 million for fiscal 2024• Improved annual adjusted EBITDA per ton for Salt business by 20% to approximately $24.50 despite 18% decline in Salt sales volumes• Plant Nutrition sales volumes increased 25% in 2024 to 273 thousand tons• Liquidity of $189.9 million at year-end 20241 Adjusted EBITDA is a non-GAAP financial measure. See appendix for reconciliation to net income (loss), the most directly comparable GAAP financial measure.
Page 5
Fourth-Quarter and Fiscal 2024 Consolidated Results 1 Adjusted EBITDA from continuing operations is a non-GAAP financial measure. See appendix for reconciliation to operating earnings, the most directly comparable GAAP financial measure. FY23 FY24FY24 Adjusted EBITDA1(in millions)$(26.9)$199.1$206.3$36.4$(2.3)Salt Plant NutritionCorp. & Other$241 $190 $199 $206 0.0%10.0%20.0%30.0%40.0%$0$50$100$150$200$250$300Sept. 30, 2021 Sept. 30, 2022 Sept. 30, 2023 Sept. 30, 2024Adjusted EBITDAAdjusted EBITDA MarginHistorical TTM Adjusted EBITDA1 and Margin(millions) 5 4Q23 4Q244Q24 Adjusted EBITDA1(in millions)$(8.7)$31.3$15.6$(0.9)$(6.1)Salt Plant NutritionCorp. & OtherFY244Q24Consolidated Results-7%-11%Revenue(y-o-y)+4%-50%Adjusted EBITDA1 (y-o-y)18.5%7.5%Adjusted EBITDA1 margin
Page 6
6 %ΔFY23FY24%Δ4Q234Q24($ in millions)-10.2%$1,010.8$907.8-13.0%$186.7$162.5Revenue-1.0%$230.5$228.2-13.8%$44.2$38.1Adj. EBITDA1 +2.3 pts22.8%25.1%-0.3 pts23.7%23.4%Adj. EBITDA1margin9.2%$89/ton$97/ton9.8%$98/ton$108/tonAverage price per tonFiscal 2024 Summary•Serviced markets experienced one of the mildest winters in nearly 25 years in 2024, resulting in a 20% decrease in highway deicing volumes year over year•Salt segment average selling price up 9% year over year, with pricing up 6% for both highway deicing and C&I•Despite lower volumes, adjusted EBITDA1declined only 1% in absolute terms and increased 20% on a per-ton basis year over year on higher average selling prices Fourth-Quarter and Fiscal 2024 Salt ResultsSales Volumes(in thousands of short tons)$248 $182 $231 $228 10%20%30%40%$0$50$100$150$200$250$300Sept. 30, 2021 Sept. 30, 2022 Sept. 30, 2023 Sept. 30, 2024EBITDAEBITDA MarginHistorical TTM Adj. EBITDA1 and Margin(millions) 1 Non-GAAP financial measure. See appendix for reconciliation to operating earnings, the most directly comparable GAAP financial measure. 7,4629,321Highway DeicingFY24FY231,8521,999Consumer &Industrial
Page 7
273219FY24 FY23$45 $73 $44 $17 0%10%20%30%40%50%$0$20$40$60$80Sept. 30, 2021 Sept. 30, 2022 Sept. 30, 2023 Sept. 30, 2024EBITDAEBITDA Margin%ΔFY23FY24%Δ4Q234Q24($ in millions)5.2%$172.1$181.020.1%$35.3$42.4Revenue-61.4%$43.8$16.9nm$5.0($3.7)Adj. EBITDA1 -16.2pts25.5%9.3%nm14.2%(8.7%)Adj. EBITDA1margin-16%$785/ton$663/ton-10%$691/ton$623/tonAverage price per ton 7 Fourth-Quarter and Fiscal 2024 Plant Nutrition Results (millions)1 Non-GAAP financial measure. See appendix for reconciliation to operating earnings, the most directly comparable GAAP financial measure. Sales Volumes(in thousands of short tons)Historical TTM Adj. EBITDA1 and MarginFiscal 2024 Summary•Sales volumes recovered in 2024, improving 25% year over year•Revenue improved 5% from the prior period, reflecting increase in sales volumes offset by decrease in average selling price of 16%oPricing pressure in global MOP market weighing on SOP prices•Plant Nutrition adjusted EBITDA1down to $16.9 million from $43.8 million year over year, revealing challenges within production cost structure
Page 8
Charting a Prudent Financial Path Forward •Strong liquidity & attractive debt maturity profileo$189.9 million in liquidity as of September 30, 2024 comprised of $20.2 million in cash and $169.7 million available under revolving credit •Expect to refinance debt stack in first half of 2025 to align structure with Back-to-Basics strategy1Represents Dec. 31 for 2020; Sept. 30 for 2021, 2022, 2023 and 2024.2As of Sept. 30, 2024. $8 $10 $49 $8562025 2026 2027 2028Fiscal year $227 $219 $181 $317 $190 $- $200 $400 $600 $800 $1,000 $1,200 $1,400 $1,600 $1,800$0$100$200$300$4002020 2021 2022 2023 2024LiquidityNet Debt(in millions)Liquidity 81 Debt Maturity Profile2 Net DebtLiquidity and Net Debt(in millions) 8
Page 9
Outlook & Guidance
Page 10
Long-Term Attributes• Largest producer of SOP in the Western Hemisphere• Unique solar evaporation asset in Ogden, Utah, provides competitive advantagesoWell positioned to serve specialty crops, particularly on the west coast of U.S. oStrategic forward-deploy warehouse network• Attractive marketsoHigh-value and chloride-sensitive crops in North AmericaoDiversified end markets insulated from the volatility of commodity row crops in North AmericaFiscal 2025 Plant Nutrition Guidance2025 Range305285FY25 Volumes (thousands of tons)$195$175FY25 Revenue (in millions)$20$14FY25 EBITDA (in millions)10 Salt and Plant Nutrition Outlook and GuidanceLong-Term Attributes• Resilient, recession-resistant demand profile• Difficult to replicate asset base with important logistical advantagesoNew mine development rarely economically feasibleoConvenient access to water transportationoExtensive depot network• Attractive marketsoHighway deicing in North America and the U.K. oConsumer and industrial in North AmericaFiscal 2025 Salt Guidance2025 Range8,7007,800Highway Deicing volumes (thousands of tons)2,0001,850Consumer and industrial volumes (thousands of tons)10,7009,650FY25 Total Volumes (thousands of tons)$1,040$940FY25 Revenue (in millions)$250$225FY25 Adj. EBITDA (in millions) SaltPlant Nutrition
Page 11
Consolidated Guidance Summary 2025Adj. EBITDA Range(in millions)$250$225Salt2014Plant Nutrition(61)(70)Corporate1 $209$169TOTAL2025 Capital Expenditure Range(in millions)$110$100TOTAL2Other Consolidated Modeling Information(in millions of dollars unless otherwise noted)2025 Range$72$67Interest expense, net of interest income$115$105Depreciation, depletion and amortization(290)%(295)%Effective tax rate (excl. valuation allowance and impairments)21Includes financial contribution of DeepStore as well as $3 to $5 million in cash expenses related to Fortress.2Includes $10 to $15 million for non-recurring larger capital projects, including prep work for mill relocation at Goderich Mine and refurbishment of silos at Ogden.3Guidance for the 2025 effective income tax rate reflects the income mix by country with income recognized in foreign jurisdictions offset by losses recognized in the U.S., for which a valuation allowance is expected to be recorded against the U.S. tax benefit carryforward.11
Page 12
Appendix
Page 13
131 There were no substantial income tax benefits related to these items given the U.S. valuation allowances on deferred tax assets2 Restructuring charges do not include certain reductions in stock-based compensation associated with forfeitures stemming from the restructuring activities. Special Items Special Items Impacting Three Months Ended Sept. 30, 2024(unaudited, in millions, except per share data)EPS ImpactAfter TaxTax Effect1AmountLine ItemSegmentItem Description$(0.04)$(1.4)$---$(1.4)Other operating expenseCorporate and OtherRestructuring charges(2) 0.4317.6---17.6Loss on impairmentsPlant NutritionImpairments0.010.6(0.2)0.8Other operating expenseSaltProvision for product recall cost$0.40$16.8$(0.2)$17.0TotalSpecial Items Impacting Three Months Ended Sept. 30, 2023(unaudited, in millions, except per share data)EPS ImpactAfter TaxTax Effect1AmountLine ItemSegmentItem Description$---$(0.2)$---$(0.2)Other operating expenseCorporate and OtherAccrued legal costs related to SEC investigation
Page 14
14 Special Items Special Items Impacting the Fiscal Year Ended Sept. 30, 2024(unaudited, in millions, except per share data)EPS ImpactAfter TaxTax Effect1AmountLine ItemSegmentItem Description$0.36$14.8$---$14.8Other operating expenseCorporate and OtherRestructuring charges(2) 0.010.4---0.4Other operating expenseSaltRestructuring charges(2) 0.010.6---0.6Other operating expensePlant NutritionRestructuring charges(2) 3.02124.8---124.8COGS and Loss on impairmentsCorporate and OtherImpairments1.6668.6---68.6Loss on impairmentsPlant NutritionImpairments0.010.6(0.2)0.8Other operating expenseSaltProvision for product recall cost$5.07$209.8$(0.2)$210.0TotalSpecial Items Impacting the Fiscal Year Ended Sept. 30, 2023(unaudited, in millions, except per share data)EPS ImpactAfter TaxTax Effect1AmountLine ItemSegmentItem Description$0.07$2.6$---$2.6Other operating expenseCorporate and OtherRestructuring charges(2) 0.041.4(0.1)1.5COGS and Loss on impairmentsSaltRestructuring charges(2) 0.031.4---1.4COGS and Loss on impairmentsPlant NutritionRestructuring charges(2) (0.01)(0.3)---(0.3)Other operating expenseCorporate and OtherAccrued legal costs related to SEC investigation$0.13$5.1$(0.1)$5.2Total1 There were no substantial income tax benefits related to these items given the U.S. valuation allowances on deferred tax assets2 Restructuring charges do not include certain reductions in stock-based compensation associated with forfeitures stemming from the restructuring activities.
Page 15
15 Reconciliation for Adjusted Operating (Loss) Earnings (unaudited, in millions)Twelve months ended Sept. 31,Three months ended Sept. 30,202320242023202477.4$(116.8)$2.2$(29.8)$Operating (loss) earnings5.515.8---(1.4)Restructuring charges1 ---193.4---17.6Loss on impairments2 ---0.8---0.8Provision for product recall costs3 (0.3)---(0.2)---Accrued loss and legal costs related to SEC investigation4 82.6$93.2$2.0$(12.8)$Adjusted operating (loss) earnings1,204.71,117.4233.6208.8Sales6.4%(10.5)%0.9%(14.3)%Operating margin6.9%8.3%0.9%(6.1)%Adjusted operating margin1 The company incurred severance and related charges for reductions in workforce and changes to executive leadership and additional restructuring costs related to the termination of the company’s lithium development project. 2 The company recognized impairments of long-lived assets related to the termination of the lithium development project; goodwill, long-lived assets and inventory related to Fortress; goodwill related to Plant Nutrition; and water rights for the fiscal year ended Sept. 30, 2024. Impairments of long-lived assets and goodwill are included in loss on impairments, while the impairment of inventory is included in product costs, both on the Consolidated Statements of Operations. 3 The recorded a provision for potential costs related to a recall for food-grade salt produced at its Goderich Plant.4 The company recognized reimbursements related to the settled SEC investigation. Reconciliation of Non-GAAP Information
Page 16
16 Reconciliation for Adjusted Net (Loss) Earnings(unaudited, in millions)Twelve months ended Sept. 30,Three months ended Sept. 30,202320242023202410.5$(206.1)$(4.0)$(48.3)$Net (loss) earnings5.515.8---(1.4)Restructuring charges1 ---193.4---17.6Loss on impairments2 ---0.8---0.8Provision for product recall costs(0.3)---(0.2)---Accrued loss and legal costs related to SEC investigation3 (0.1)(0.2)---(0.2)Income tax effect15.6$3.7$(4.2)$(31.5)$Adjusted net (loss) earnings0.25$(4.99)$(0.10)$(1.17)$Diluted net (loss) earnings per common share0.38$0.08$(0.10)$(0.77)$Adjusted net (loss) earnings per diluted shareWeighted-average common shares outstanding (in thousands):40,78641,30641,15241,369Diluted1 The company incurred severance and related charges for reductions in workforce, changes to executive leadership and additional restructuring costs related to the termination of the company’s lithium development project. Charges for the twelve months ended Sept. 30, 2023 were $5.5 million ($5.4 million net of tax).2 The company recognized impairments of water rights for the three months ended Sept. 30, 2024. The company also recognized the impairment of long-lived assets related to the termination of the lithium development project; goodwill, long-lived assets and inventory related to Fortress; and goodwill related to Plant Nutrition for the twelve months ended Sept. 30, 20243 The company recorded a provision for potential costs related to a recall for food-grade salt produced at its Goderich Plant.4 The company recognized reimbursements related to the settled SEC investigation. Reconciliation of Non-GAAP Information
Page 17
17 Reconciliation for EBITDA and Adjusted EBITDA(unaudited, in millions)Twelve months ended Sept. 30,Three months ended Sept. 30,202320242023202410.5$(206.1)$(4.0)$(48.3)$Net (loss) earnings55.569.513.119.1Interest expense17.117.9(7.1)(2.5)Income tax (benefit) expense98.6105.025.926.6Depreciation, depletion and amortization181.7$(13.7)$27.9$(5.1)$EBITDAAdjustments to EBITDA:20.68.13.41.8Stock-based compensation - non cash(5.3)(1.0)(0.6)(0.2)Interest income2.30.7(2.3)1.8Loss (gain) on foreign exchange(10.1)---2.5---Loss (gain) from remeasurement of equity method investment5.915.8---(1.4)Restructuring charges1 ---193.4---17.6Loss on impairments2 ---0.8---0.8Provision for product recall costs3 (0.3)---(0.2)---Accrued loss and legal costs related to SEC investigation4 4.32.20.60.3Other expense, net199.1$206.3$31.3$15.6$Adjusted EBITDA1 The company incurred severance and related charges related to a reduction in workforce, changes to executive leadership and additional restructuring costs related to the termination of the company’s lithium development project.2The company recognized impairments of water rights for the three months ended Sept. 30, 2024. The company also recognized impairments of long-lived assets related to the termination of the lithium development project; goodwill, long-lived assets and inventory related to Fortress; and goodwill related to Plant Nutrition for the twelve months ended Sept. 30, 2024. 3 The company recorded a provision for potential costs related to a recall for food-grade salt produced at its Goderich Plant.4 The company recognized reimbursements related to the settled SEC investigation. Reconciliation of Non-GAAP Information
Page 18
18 Salt Segment Performance(in millions, except for sales volumes and prices per short ton)Twelve months ended Sept. 30,Three months ended Sept. 30,20232024202320241,010.8 $907.8$186.7 $162.5 $Sales170.5$163.6$28.6$21.0$Operating earnings16.9%18.0%15.3%12.9%Operating margin172.0$164.8$28.6$21.8$Adjusted operating earnings1 17.0%18.2%15.3%13.4% Adjusted operating margin1 229.0$227.0$44.2$37.3$EBITDA1 22.7%25.0%23.7%23.0%EBITDA1margin230.5$228.2$44.2$38.1$Adjusted EBITDA1 22.8%25.1%23.7%23.4%Adjusted EBITDA margin1Sales volumes (in thousands of tons):9,3217,4621,4351,061Highway deicing1,9991,852470449Consumer and industrial11,3209,3141,9051,510Total SaltAverage sales price (per ton):68.85$73.23$68.78$70.98$Highway deicing184.67$195.14$187.44$194.41$Consumer and industrial89.29$97.47$98.03$107.66$Total Salt Salt Segment Performance 1 Non-GAAP financial measure. Reconciliations follow in these tables.
Page 19
19Reconciliation for Salt Segment EBITDA and Adjusted EBITDA(unaudited, in millions)Twelve months ended Sept. 30,Three months ended Sept. 30,2023202420232024170.5 $163.6 $28.6 $21.0 $Reported GAAP segment operating earnings58.563.415.616.3Depreciation, depletion and amortization229.0$227.0$44.2$37.3$Segment EBITDA1.50.4------Restructuring charges1 ---0.8---0.8Provision for product recall costs2 230.5$228.2$44.2$38.1$Segment adjusted EBITDA1,010.8907.8186.7162.5Segment sales22.8%25.1%23.7%23.4%Segment adjusted EBITDA margin Salt Reconciliation of Non-GAAP Information 1 The company incurred severance and related charges related to a reduction of its workforce.2 The company recorded a provision for potential costs related to a recall for food-grade salt produced at its Goderich Plant. Reconciliation for Salt Segment Adjusted Operating Earnings(unaudited, in millions)Twelve months ended Sept. 30,Three months ended Sept. 30,2023202420232024170.5 $163.6 $28.6 $21.0 $Reported GAAP segment operating earnings1.50.4------Restructuring charges1 ---0.8---0.8Provision for product recall costs2 172.0$164.8$28.6$21.8$Segment adjusted operating earnings1,010.8907.8186.7162.5Segment sales17.0%18.2%15.3%13.4%Segment adjusted operating margin
Page 20
20 Plant Nutrition Segment Performance(in millions, except for sales volumes and prices per short ton)Twelve months ended Sept. 30,Three months ended Sept. 30,2023202420232024172.1 $181.0$35.3 $42.4 $Sales9.5$(86.4)$(3.3)$(29.7)$Operating (loss) earnings5.5%(47.7)%(9.3)%(70.0)%Operating margin10.9$(17.2)$(3.3)$(12.1)$Adjusted operating (loss) earnings1 6.3%(9.5)%(9.3)%(28.5)%Adjusted operating margin1 42.4$(52.3)$5.0$(21.3)$EBITDA1 24.6%(28.9)%14.2%(50.2)%EBITDA1margin43.8$16.9$5.0$(3.7)$Adjusted EBITDA1 25.5%9.3%14.2%(8.7)%Adjusted EBITDA margin1 2192735168Sales volumes (in thousands of tons):785$663$691$623$Average sales price (per ton): Plant Nutrition Segment Performance 1 Non-GAAP financial measure. Reconciliations follow in these tables.
Page 21
21Reconciliation for Plant Nutrition Segment EBITDA and Adjusted EBITDA(unaudited, in millions)Twelve months ended Sept. 30,Three months ended Sept. 30,20232024202320249.5$(86.4) $(3.3) $(29.7) $Reported GAAP segment operating (loss) earnings32.934.18.38.4Depreciation, depletion and amortization42.4$(52.3)$5.0$(21.3)$Segment EBITDA1.40.6------Restructuring charges1 ---68.6---17.6Loss on impairment2 43.8$16.9$5.0$(3.7)$Segment adjusted EBITDA172.1181.035.342.4Segment sales25.5%9.3%14.2%(8.7)%Segment adjusted EBITDA margin Plant Nutrition Reconciliation of Non-GAAP Information 1 The company incurred severance and related charges related to a reduction of its workforce.2 The company recognized a water rights impairment during the three months ended Sept. 30, 2024 and goodwill impairment during the twelve months ended Sept. 30, 2024. Reconciliation for Plant Nutrition Segment Adjusted Operating Earnings(unaudited, in millions)Twelve months ended Sept 30,Three months ended Sept. 30,20232024202320249.5 $(86.4) $(3.3) $(29.7) $Reported GAAP segment operating (loss) earnings1.40.6------Restructuring charges1 ---68.6---17.6Loss on goodwill impairment2 10.9$(17.2)$(3.3)$(12.1)$Segment adjusted operating (loss) earnings172.1181.035.342.4Segment sales6.3%(9.5)%(9.3)%(28.5)%Segment adjusted operating margin