Hello, and thank you for standing by. My name is Regina and I will be your conference operator today. At this time, I would like to welcome everyone to the Compass Minerals Fiscal Fourth Quarter and Full-Year 2024 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. I would now like to turn the conference over to Brent Collins, Vice President, Treasurer, and Investor Relations. Please go ahead.

Thank you, operator. Good morning and welcome to the Compass Minerals fourth quarter and full-year 2024 earnings conference call. Today, we will discuss our recent results and provide our outlook for fiscal 2025. We will begin with prepared remarks from our President and CEO, Edward Dowling, and our CFO, Jeffrey Cathey. Joining in for the question-and-answer portion of the call will be Ben Nichols, our Chief Sales Officer, and Jenny Hood, Chief Supply Chain Officer. Before we get started, I will remind everyone that the remarks we make today reflect financial and operational outlooks as of today's date, December 17, 2024. These outlooks entail assumptions and expectations that involve risks and uncertainties that could cause the company's actual results to differ materially. The discussion of these risks can be found in our SEC filings located online at investors.compassminerals.com. Our remarks today also include certain non-GAAP financial measures. You can find reconciliations of these items in our earnings release or in our presentation, both of which are available online. I'll now turn the call over to Ed.

Thank you, Brent. Good morning, everyone, and thank you for joining us on our call today. It's good to be speaking to you again after we've had to take a pause as we went through our restatements. I want to begin my remarks today by providing a brief recap of the year. To say fiscal 2024 was an eventful and transitional year for the company would be a major understatement. The transition began on November 23 when we announced the suspension of our lithium project in Utah, which was formally terminated a few months later in February. This was a significant pivot for the company that aligned with the renewed strategic commitment to focus efforts on improving performance in our core salt and plant nutrition businesses. We all know that different jobs require different skill sets, and it's only amplified when it involves a shift in strategy. As the company reorganized towards the back-to-basic strategy, changes were made in our senior leadership team, including my appointment in January as President and CEO and across the organization to ensure we had the right team in place to execute effectively amid these changes in leadership direction. We experienced within our served markets one of the weakest North American highway deicing seasons in the last quarter century. There were very clearly financial and operational ramifications that arose from that, which led us to discontinue our dividend, curtail production at our Goderich mine and other mines, and take a hard look at and take actions to improve our cost structure. There was also a pause that we had to take in the development of Fortress, our fire retardant business, as well as the financial reporting restatement issue we had to work our way through in recent months. Clearly, we had our fair share of challenges in fiscal 2024, and it's a year we'll be happy to have behind us. However, I'm reminded of the saying, "it's darkest before the dawn," and I think it's applicable here at Compass Minerals. The fact remains unchanged that we have the privilege of operating high-quality, advantageous salt and plant nutrition assets with long-standing established markets. Certain of those assets are quite frankly irreplaceable and could not be replicated today. For example, in Goderich, Ontario, we operate the world's largest underground salt mine located 1,800 feet below Lake Huron. The geological attributes of this mine and the fact that it has access to a deep-water port position Goderich to be a low-cost producer for much of the Great Lakes region. In Ogden, Utah, we operate the largest sulfate of potash facility of its kind in the Western Hemisphere. When done correctly, our use of naturally occurring processes to extract essential minerals from the Great Salt Lake allows us to produce SOP at a lower cost and in a more environmentally friendly manner than other production processes. The location of our Ogden facility is also beneficial given its proximity to major producing areas on the West Coast of high-value, chloride-sensitive crops such as fruits and nuts. Our back-to-basic strategy is focused on maximizing the potential of these and our other assets. Through this renewed focus, I'm confident that we can do a better job managing these assets to improve operational efficiency and reduce capital intensity. These efforts are already underway. As an example, at the Goderich mine, the East Mains project, which is part of our mill relocation effort, will allow for a reconfiguration of the mine's operations, which we expect will provide a number of benefits over time. Those benefits will include improved access to development areas, improved ventilation, the abandonment of high-cost control areas of the mine, and added flexibility in the production of operations. All these have the potential to improve the profitability of the mine, all things being equal. These and similar efforts across the platform should ultimately lower the cost structure of the company and improve the profitability of our operations, resulting in higher levels of cash generation for the company that can be used to reduce the absolute levels of debt of the company. Despite the challenging year, there are also some positives we should not lose sight of. First, we continue to build on and reinforce our culture of zero harm across our operations. Safety is a top priority for us because it's the right thing to do for our people, and it's the right thing to do for our business. Safety is also a leading indicator of operational performance. The past three years have been the safest in Compass Minerals history. We've seen a significant reduction in high-potential incidents. We have a number of complex operating environments here at Compass Minerals, and I'm incredibly proud of our people for the focus and care they give to work every day. The fact that we've been able to drive our reportable and lost-time accidents to these levels demonstrates the commitment of our employees to safety. In early September, the company executed a binding voluntary agreement with the state of Utah that outlines water and conservation commitments we are making to benefit the sustainability of the Great Salt Lake. We worked collaboratively with the state to arrive at an agreement that meaningfully supports efforts by policymakers and other diverse stakeholders in Utah to ensure the long-term health of the lake. In that environment, this agreement is also an important step towards providing better predictability of our future water use allotment in Ogden and enables us to avoid an increased tax burden on mineral extraction enacted by the recent legislation in the state. Moving to our plans in fiscal 2025, I'll make a few comments on our priorities for the year. In the Salt business, consistent with prior comments, our goal will be to reduce inventory levels and harvest cash that has been tied up in working capital following the last year's weak winter. As I mentioned earlier, last year, we curtailed production at the Goderich mine to address this inventory overhang. We'll revisit production levels for the mine in the coming months after we've had a chance to engage in highway deicing activity. In the Plant Nutrition business, our effort will be focused on advancing restoration of the Pond Complex at Ogden. This has been discussed in the past. This multiyear process has been ongoing for a couple of years. The team at Ogden is working on developing and implementing processes to improve the consistent grade of SOP raw materials going into plant. This should allow for more efficient, less costly operations as we plan to supplement our produced tons with purchased potash or KCL. This year will provide a couple of benefits. First, it will ease the harvest demands on our ponds to provide them more time to recover and regenerate. Our early efforts in implementing this are going well. Second, it will improve the quality of the feedstock for the plant. We have several efficiency initiatives underway that we believe will allow us to see all-in product costs decline this year. At Fortress, our plan is to finalize discussions with the U.S. Forest Service regarding the potential for a 2025 contract for our non-magnesium chloride-based aerial fire retardant product. Regarding our capital allocation process, after environmental health and safety, dollars will be directed to the highest-ranked projects. We've organized the capital plan to flex up and down like our operations, depending on how the highway deicing season progresses. This process was implemented last year and has proven helpful. Other new improvement initiatives are underway, and we'll increasingly highlight them as they progress. With respect to the balance sheet, we expect to refinance our debt stack this year with the intention of structuring it in a way that better aligns with our current strategy. We believe that we will be able to move into a structure that provides more flexibility around covenants. Jeff will comment on this in more detail in a moment. Back at our second-quarter call, I shared my vision for the company over the coming years. My goal, which is shared by our Board and senior leadership team, is to gear the company such that it generates free cash flow even in mild winters, strong free cash flow in normal winters, and outstanding free cash flow in strong winters. That vision has not changed, and we are aggressively taking steps to achieve that goal. With that, I'll turn the call over to Jeff.

Thanks, Ed. I'll begin my remarks by discussing our quarter and year-end financial performance before providing perspective around our outlook for 2025. For the fourth quarter, consolidated revenue was $209 million, down 11% year-over-year. The weak winter we experienced in our served markets led to a decrease in pre-fill activity compared to what we would typically expect in the fourth quarter after average winter activity. Additionally, when making a comparison to our prior year results, it's important to remember that the fiscal 2023 fourth quarter included a contribution from Fortress from the U.S. Forest Service contract. As a result of these and other factors, we posted a consolidated operating loss of $30 million, which includes a noncash impairment of approximately $18 million related to the write-down of certain water rights in our Plant Nutrition segment. Consolidated net loss was $48 million, and adjusted EBITDA was approximately $16 million for the quarter. For the full fiscal year, consolidated revenue was $1.1 billion, which was down 7% year-over-year. Again, the extremely mild winter that we experienced this past year clearly had an impact on the top line. Reported operating loss of $117 million includes $191 million of noncash impairments in our Lithium, Fire Retardant, and Plant Nutrition businesses. We posted a net loss of $206 million, which included the impairments I just referred to as well as the noncash gain related to the Fortress contingent consideration liability, and adjusted EBITDA for the year was $206 million. Drilling down into the segment results. In the Salt business, revenue in the fourth quarter was $163 million, compared to $187 million a year ago. Pricing was up 10% year-over-year to $107.66 per ton. However, volumes were down 21% compared to the prior year period. Lower highway deicing volumes were directly related to the muted pre-fill program that I referred to earlier. Net revenue per ton, which accounts for distribution costs, increased 9% to a little over $78 per ton. On a per ton basis, operating earnings came in lower year-over-year at $13.90 per ton, down 7%, while adjusted EBITDA per ton increased 9% to $25.22. It's worth noting that because our company records depreciation on a straight-line basis without regard to sales volumes, the trends in low sales volume quarters for adjusted EBITDA can look a bit odd because of the significant DD&A per ton add-back that you get in those quarters. For the full fiscal year, revenue totaled $908 million, down 10% year-over-year. As Ed and I have both referenced this past fiscal year, we experienced one of the mildest winters that we've seen in our served markets over the last 25 years, which had a meaningful impact on the segment's results. Highway deicing volumes were down 20% year-over-year to 7.5 million tons, and C&I volumes, which includes consumer deicing products, were down 7% over the same period to 1.9 million tons. Total Salt segment volumes were down 18% year-over-year. We did achieve positive pricing dynamics year-over-year with highway deicing and C&I prices, both increasing by approximately 6% in 2024. Despite the significant volume declines that we navigated this past year, absolute operating earnings and adjusted EBITDA were only down 4% and 1%, respectively. Operating earnings for the year were $164 million, and adjusted EBITDA was $228 million. Both of those measures saw margin expansion in 2024, with operating margin increasing to 18% and adjusted EBITDA margin increasing to a little over 25%. Adjusted EBITDA per ton for the fiscal year increased 20% to $24.50. Moving on to our Plant Nutrition segment. As some of you may recall, calendar year 2023 saw very abnormal weather conditions that impacted sales throughout the year, creating noise in the comparisons to the prior year period. On a positive note, demand has continued to normalize compared to what we saw last year. I'll speak about quarterly results for this segment first. For the fourth quarter, volumes were up 33% from the prior year period. We had seen sequential quarterly price increases over the last year, but unfortunately that streak was broken this past quarter. The pricing dynamic for SOP continues to track with global trade of potassium-based fertilizer, leading to a 10% decrease in price per ton year-over-year to $623 per ton. The net effect of higher volumes and lower sales pricing resulted in an increase in plant nutrition revenue of 20% year-over-year. As a reminder, a significant portion of the plant nutrition business distribution costs are fixed. So the increase in sales volumes benefited distribution cost per ton in the quarter, which declined roughly 10% to $88 per ton year-over-year. As noted in our press release yesterday, we recognized a noncash impairment of certain water rights in the Plant Nutrition segment of approximately $18 million during the quarter. Excluding the impairment, all-in product cost per ton was up approximately 8% year-over-year. The net impact of these drivers is that fourth quarter adjusted EBITDA declined to a loss of roughly $4 million. For the full year, volumes within the segment were 273,000 tons, which is a 25% increase year-over-year. Average pricing for the year was down approximately 16% to $663 per ton. Echoing what I said earlier about distribution costs per ton, we saw these improve by approximately 7% year-over-year as there were more volumes to support the fixed costs. All-in product costs for the year include the water rights impairment mentioned earlier, as well as a $51 million impairment we recognized in the second quarter, reflecting a more tempered long-term financial outlook for our Plant Nutrition business while we continue the pond restoration process as mentioned in his remarks. Operating loss for the year was $86 million, and adjusted EBITDA was $17 million. Next, I'll quickly summarize our balance sheet. At quarter end, we had liquidity of $190 million, comprised of $20 million in cash and revolver capacity of around $170 million. Additionally, the consolidated total net leverage ratio was 4.9 times within the company's net leverage covenant of 6.5 times. As mentioned, our intention is to refinance our debt in calendar 2025. I'll provide some thoughts on how we're thinking about that. The structure that we have in place with an RCF and Term Loan A is a little unusual. It was put in place with the company pursuing the lithium program. The idea was that there would be a more comprehensive reordering of the capital stack as the Lithium project reached completion. Clearly, we're in a different position today post-Lithium. Where the company is today, we think we need a structure that provides more flexibility around covenants to accommodate our back-to-basic strategy, recognizing we operate a business that is highly seasonal with variability around weather. As we've spoken to credit investors and banks, we think there are a number of options that would allow us to move into a more covenant-light structure early in calendar 2025. Finally, moving to our outlook for fiscal 2025, starting with Salt. Despite a decrease in commitments, we are expecting an increase in sales volumes year-over-year based on trailing historical sales to commitment ratios. I should note that those ratios take into account the recent weak winters that we've experienced. At the midpoint of our guidance, we are expecting an increase in sales volumes of around 9%. As a result, we are forecasting adjusted EBITDA somewhere between $225 million and $250 million. As Ed mentioned during his comments, a key focus this year is rightsizing our inventory levels and realizing the positive working capital release associated with drawing down inventory. Currently, we will continue to closely monitor winter activity and adjust our production schedule accordingly as we progress through the deicing season. Shifting to Plant Nutrition, the outlook for Plant Nutrition adjusted EBITDA is in the range of $14 million to $20 million, stating the obvious declining prices are not conducive to improving profitability. And unfortunately, that is what we are seeing this year based on the current MLP market dynamics. There are, however, positive developments in the business. We are expecting sales volumes to increase by approximately 8% year-over-year, and we are expecting all-in product costs to be down roughly 9% in 2025. Ed mentioned our plans to utilize KCL to help restore the ponds out in Ogden, which is important for the long-term health of those assets. Moving on to corporate, our corporate expense includes everything not related to our Salt and Plant Nutrition segments, so it does include our corporate overhead, deep store, and Fortress, both cost and any expected revenue. We are continuing to work with the U.S. Forest Service on a contract for this coming fire season. As those discussions are ongoing, for guidance purposes, we have not included any revenue from Fortress in our fiscal 2025 outlook, although there is a small amount of G&A related to that business. We will update the market as appropriate when we have concluded those discussions. Total capital expenditures for the company in fiscal 2025 are expected to be within a range of $100 million to $110 million. This includes nonrecurring amounts of $10 million to $15 million for larger capital projects including preparation work for the mill relocation at Goderich mine and refurbishment of silos at Ogden. Preparing our capital program for this fiscal year, we scheduled that investment in a manner that would allow scaling back expenditures in the back half of the year as needed in the event of a mild winter. To echo Ed's comments, it was clearly a challenging year for our company, and we are focused on taking necessary actions to set ourselves up for improved performance moving forward. With that, I'll turn the call over for questions.

We'll take our first question from the line of Joel Jackson with BMO Capital Markets. Please go ahead.

Hi, good morning. So, did you say one question or one plus one? Sorry I missed the instructions.

One plus one Joel.

Okay, perfect. Okay, first question I want to ask is thanks for the 2025 outlook. Can you talk about so if I look at your guidance at 2025, you're suggesting that salt EBITDA margins will contract about 100 basis points in 2025. Can you roll through sort of when you compare 2024, 2025, some of the drag that's causing that, and then if we normalize in 2026 with things that you're doing, assuming the never happening in average winter, what could 2026 margins be like if we do get a normal winter and normal situation as your work propagates down to margins?

Yes, Joel, this is Jeff. I think the big driver when you're looking at 2025 EBITDA margins compared to 2024 is really being reflected by the curtailment of the Goderich mine resulting in higher-cost inventory as we move into fiscal year 2025. And with respect to 2026, obviously that will be impacted by decisions that we make around production based on what we see in terms of winter weather here as we progress throughout the balance of the year.

Thank you. A while back, there were some reports suggesting that Compass might be on the market or that there may be interest in a sale. I understand these are sensitive matters, but can you update us on your efforts to enhance the company? Do you believe you have made sufficient progress for a potential sale? How do you view your role as the steward of this company in the long term?

Well, Joel. Hey Joel, this is Ed. As a policy, we don't really comment on markets or speculation or rumors. And I'll just point out that our management and board are confident and regularly evaluate tactical and strategic matters as a public company. We're for sale every day if somebody wants to invest in the company. So what we're really doing is working hard to make this a better business that's expanding our margins and our profitability. There are a number of activities going on, some of which we've been transparent about in the past, others that are new and that we'll be speaking more about as we start bringing some of these benefits to bear over the course of this year.

And we'll take our next question from David Begleiter with Deutsche Bank. Please go ahead.

Thank you. Good morning. Ed, on highway de-icing, can you help us with the committed volumes that are down 9% before casting volumes to be sold being up 9%. And I know this is average sales to commitments, but can you help bridge that gap between down nine on the commitments but up nine on the actual sales?

Yes, we use what we call a sales-to-commitment calculation, and that number is sort of a moving average based on sort of past performance. And because we've really had two particularly weak winters, one particularly weak winter, that number is much lower. So when we look at what that means, that's really the answer that pops out, because it's basically using a different divisor in our calculation. So, that's really what it is. I will just say that we are very focused. The bidding season, of course, was competitive, but we're all about value over volume, and we think we've got great assets, and we're not going to be chasing tons at any price, okay.

And David, this is Ben. I would just also point to the fact that the 2023-2024 season was the lightest winter within the last 25 years. So, when you do a year-over-year comparison against what is kind of an artificially low number, that's where you're seeing the growth.

Got it. And concerning Fortress, has the team managed to create a new formulation that addresses the issues with the previous one? Has it been fully tested?

Hey there, David. So, we're not going to speak about our magnesium chloride-based products that's of course undergoing evaluation by the NTSB and other authorities. So, we're not going to speak to those products.

But we can gather that since negotiations are continuing, there has been some progress made on your part. Is that fair?

Yes. So, we do have an alternate product that's under development and under consideration, and that is what we're talking about in the script this morning.

Okay. Would you expect some resolution on these negotiations in the first half of 2025?

It's too soon for me to comment on the Forest Services process. We're following their process, and as we said in the script, we'll update everyone as that process continues to unfold.

Our next question will come from the line of David Silver with C.L. King. Please go ahead.

Yes, thank you. A couple of questions. I guess, just to start with the plant nutrition segment. I would like to maybe kind of pose this question from a longer-term perspective. But you harvest brine in year one, and it's a two-to-three-year production or evaporation and separation process. Keeping that in mind, I mean, when I look at the fourth quarter results and I strip out the pricing change and whatnot, it does look like there is a meaningful shift, I guess, in the overall production cost structure. And I'm just wondering about the path back from your perspective in plant nutrition. In other words, is it as simple as making sure the original brine that you pump out is appropriately, I don't know, saturated with the right minerals, or is there something more that needs to be done? In other words, maybe just a thought on the path back for the plant nutrition, I guess the cost structure or economics back to where it has been in the past.

Okay, I'll start out here. This is Ed, and then ask Ben to comment as well. We're working hard on the restoration efforts at Ogden. There's really sort of two fronts of that. The first of which you call the pond restoration, and that's occurring. We are adding potash to the mix, which helps with the improvement of the quality and the volumes, which should improve over time. And then there's some capital projects we need to do in the dry plant in terms of a dryer and dust collector, and we're working on the engineering on that. It's too early really to speak about that. But what I would say is that we're seeing good progress on this restoration plan. Our volumes are improving, and costs are improving, but remain too high. These are really critical to get back to our short profitability. Pricing is a little lower year-over-year. I'll ask Ben to speak about that, but we are moving along according to plan. Ben, do you want to comment on it?

Yes, I think the pricing dynamic is exactly what Ed said. It's moved back to more historical norms following the run-up with the Ukraine-Russia impact a couple of years ago. We really believe in this business. We have a very established customer base. I think you're seeing that in the volumes returning over the last couple of quarters. So, we're working hard to return the cost profile to where it should be. That's how we deliver the profitability we believe this business can generate year-over-year.

Okay, thank you. My next question relates to the 2025 guidance, I guess from an overall perspective, and I'm thinking ultimately about free cash flow. So, if we take the midpoint of the company's EBITDA, maybe $189 million and layer in $110 million for capex and $70 million for interest, there is some room there, and of course contingencies based on kind of winter de-icing volume. But that's kind of the starting point, and I'm kind of scratching my head and I'm thinking about interest, but I think maybe more on the tax line. So, can you remind me apart from the nominal rate, can you talk about what the cash tax liability might look like, if you were to hit the midpoints of your guidance ranges for 2025? I noticed in the fourth quarter there was a small credit, which I wasn't expecting. But is this the case where the valuation allowances and other things mean that there will be a cash tax liability?

Yes, so I would say how the cash taxes play out will ultimately depend on the mix. What I would say from the 2025 perspective is, you're right. Based on our base case guidance, we do anticipate delivering free cash flow this coming year. And then maybe I'll touch a little bit on the effective tax rate because it does look a little bit nonsensical, and I think you hit on it a little bit there. But to remind everyone, we have book losses on the U.S. side that are being offset by growing income in our foreign jurisdictions. As that spread narrows and the aggregate book loss becomes closer and closer to zero, any increase in income tax from those foreign jurisdictions throws off a pretty nonsensical answer in the effective tax rate.

So, I guess what you're saying is it depends, right, but okay, I know it's pretty complicated with multiple jurisdictions. Thank you; I'll get back in the queue.

We have a follow-up question from David Silver with C.L. King. Please go ahead.

I have one more question, and I apologize if I'm asking you to repeat yourself. I have noticed the strength in the salt margins over the past year, and I believe that the margin per ton in the fourth quarter was the highest since at least 2016, though I am not certain about that. Additionally, I'm aware that salt, particularly for de-icing, is a very volume-sensitive operation with high fixed costs and low variable costs. It's interesting that while the volumes are lower, the margins have improved. First, could you provide an update on the ongoing underground work at Goderich and how relocating some equipment and facilities underground might affect your cost position there? Secondly, what do you think the current team at Compass is doing right that may not have been done or was handled differently in the past three to five years? Specifically, what innovations have you implemented in your production and delivery system that have led to significantly better margin performance? Lastly, what do you perceive as the potential for a more normalized winter volume year in the next couple of years? Thank you.

Okay, that's kind of a three-part question here. The first is going to salt margins. Some of that is things are better, and other parts of it are related to timing. You want Jeff to talk about that a second, close through inventory.

We touched on this, this is Jeff, we touched on this a little bit in our prepared remarks. But the one thing that we wanted to point out and make sure that was understood is the impact that the DD&A add-back has in low volume quarters, which is what you're seeing really in the fourth quarter. The company records depreciation on a straight-line basis. What gets added back to EBITDA is current year depreciation inclusive of amounts that are capitalized to inventory on the balance sheet. What you get in a low volume quarter is a higher DD&A add-back per ton that is pushing that number up a little bit.

Okay, David, regarding the Goderich mill relocation, that project is currently in progress. We're in the phase of reinforcing the ground in the designated area to ensure its stability for the foreseeable future since it's a particularly stable section of the mine. Excavation work is beginning, and we have the necessary equipment on-site for that and for storage purposes. The engineering work is advancing as well, and we're exploring various strategies to ensure the project's success. There are several advantages to this relocation. It will enable quicker access to the working areas, eliminating the need for lengthy equipment movements across the mine. The mill will be situated between the working areas and the mine exit, which will enhance our ventilation management. This improvement will provide us with the flexibility to consider different mining methods, potentially combining continuous mining with drilling and blasting. Ultimately, we plan to abandon the entire southern side of the mine, which has incurred significant ground control costs that currently are around $2 per ton. This abandonment will simplify operations and reduce expenses. While I cannot provide exact figures for fiscal year 2024 yet, it is clear that the situation will improve. Regarding the changes within the company, we previously focused on lithium and other diversification strategies, which may have shifted our attention away from our core strategy. We have revamped the team at several levels and are diligently working to establish a new COO. The goal is to concentrate on what truly matters, as prior management may have been sidetracked by various initiatives. I hope this provides clarity, as we now have a focused direction in our objectives.

Yes, I know, I appreciate all you shared there. A lot of great color. Okay, thank you very much. That's it for me. Appreciate it.

Our next question will come from the line of Joel Jackson with BMO Capital Markets. Please go ahead.

Hi. Just trying to think about Compass sort of normalization over time. I think your guidance is a little over 8 million tons for highway de-icing salt volume this year. What is a normal, what should be normal volume? Is it kind of nine and a half million tons? I'm trying to look over different averages. And what do you guys think is sort of what's normal?

Hi Joel, are you asking on a demand basis?

Yes, yes, exactly. I'm not asking about Goderich's capacity. I'm asking when I look back sort of historically it seemed like maybe nine and a half million tons, highway de-icing is kind of a normal run rate in a normal winter. Again, those are very elusive goals. But a normal winter, if whatever happens. And this year you'll be about eight for readings, we know. I'm just trying to figure out when you guys plan, look at the mine, you're looking at working capital, looking at the union. I mean, what do you plan? What does a normal sales portfolio look like for highway deicing if winter weather was normal, inventories are normal?

Yes, I think we think about our served markets in that 7.5 million tons to 8.5 million tons, obviously pending prior seasons. But I hate to give you too big of a range, but 7.5 million, 8.5 million on a big year is probably appropriate.

Let me follow up on that. We are planning to operate this business with greater flexibility and a focus on costs to enhance our margins. Highway de-icing will vary depending on the season. We have a baseline, and over time, looking at averages will provide insight. In any given year, it will be what it is. Our focus is on controlling the aspects we can, particularly costs and flexible operations at the mines. We've shown our capability in doing this at Goderich and Cote Blanche, specifically targeting fixed costs as we scale down. This year, we've also adjusted our capital structure and can modify it based on how the season unfolds. It's essential to note that our emphasis will be on cost management and operational effectiveness, and we'll share more details as the year progresses. Building flexibility in our operations to meet market demands is crucial, and the market will be what it is.

And Joel, I should clarify, the number I gave you was for the North American highway de-icing business. We obviously also service our chemical business. You have to include kind of an average for our U.K. business. Just a quick clarification.

Okay, right. Because I'm looking at highway de-icing as a segment. So, if you said eight million to 8.5 million and then chemical salt, like what? Two and a half? Something like that.

So roughly a million for de-icing, roughly a million for chemical, and then U.K. is just below a million, about 600, 700.

Okay, so when I said nine and a half for the full business, you're guiding toward about ten, correct? That sounds about right? Ten for the whole hybrid icing business. Okay, which makes sense and makes my next follow-up question not necessary. But the other question I wanted to ask, it's kind of a nuanced question, but I was actually looking at this this morning. I was looking at what Compass used to sell for highway de-icing volumes two decades ago, a decade ago. I was looking at what you've sold in the last bunch of years. What I've noticed is that there's a very clear downward trend in average December quarter volumes. So, March quarter volumes look similar as 20 years ago. Is there something going on in the salt industry the last 10 years where December quarter sales just are lower? Is that we've had lower average winter weather, so you have a lower pre-buying or pre-buying season, or is there something going on where December quarters are weaker than historical versus March quarters? Do you get what I'm getting at?

Yes, Joel, I think it's a common question. As we look at the data and discuss forecasting with our customers, we see that same trend. We're not trying to overreact to that obviously, but there is a feeling that winter has shifted a little bit more towards calendar Q1 and Q2. I don't think we would make a definitive statement on that, but we monitor that data as well.

So, are you saying that winter has shifted, for instance, that December now feels more like April, or is there simply more snowfall in early April? Is that what you mean?

There’s some sense that that may have happened. I would tell you that there's not a definitive change in behavior or communication from the market around that type of shift. But if you just look at the trend on a monthly basis, you're seeing the same thing we are.

Okay, thanks for that.

Okay. Thank you very much, Regina. Thank you all for your interest in Compass Minerals. Please don't hesitate to reach out to Brent if you have any follow-up questions. We look forward to speaking to you all in the next quarter. Thanks very much.

And that concludes our call today. Thank you all for joining. You may now disconnect.