Good day, everyone, and welcome to the Compass Minerals Fourth Quarter Earnings Conference. Today's conference is being recorded. At this time, I would like to turn the conference over to Ms. Theresa Womble, Director of Investor Relations. Please go ahead ma'am.

Thank you, Rebecca. Today our CEO, Fran Malecha; and our CFO, Matthew Foulston; will be reviewing our fourth quarter and full-year results. Before I turn the call over to them, let me remind you that today's discussions may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on the company's expectations as of today's date, February 10, 2015, and involve risks and uncertainties that could cause the company's actual results to differ materially. These differences could be caused by a number of factors, including those identified in the Company's most recent forms 10-K and 10-Q. The company undertakes no obligation to update any forward-looking statements made today to reflect future events or developments. You can find reconciliations of any non-GAAP financial information that we discuss today in our earnings release, which is available in the Investor Relations section of our website. Now I'll turn the call over to Fran.

Thank you, Theresa. Good morning, everyone. I'm glad to be with you today to discuss our 2014 fourth quarter and full-year results. I'm pleased to have our new CFO, Matthew Foulston, on the call today. He has been with us now for just over two months and has been immerse in getting to know our businesses. I'm looking forward to Matthew working with our team to execute our growth plan, while being a strong steward of the balance sheet. So turning to the task at hand today we are going to cover three topics. First, our strong 2014 results and our confidence in our 2015 outlook; second, material progress in executing our five-year vision; and third, our 12th consecutive dividend increase. I'll start with some of the high level financial results. We reported very strong results for the full-year in the fourth quarter. Total sales for 2014 were up 14% from 2013 due to strong pricing for our central mineral products in both segments. We expect this pricing strength to carry forward into the first half of 2015. Sales volumes were particularly robust for the plant nutrition business which sold 26% more tons of products this year as compared to 2013. The plant nutrition average selling price for the full-year climbed 8% above 2013 results, and moved 15% higher in the quarter. Part of the improvement is due to the inclusion of Wolf Trax higher priced micronutrients products, but we've also worked hard to drive home the message to growers regarding the value they can achieve from using our sulfate of potash. Part of this was branding the product as Protassium+ to create a platform for growth and differentiation. Our educational marketing program for SOP, as well as the tight supply in our key North American markets has resulted in…

Thanks, Fran. Before I get into the numbers, I'd like to stop by saying that I'm delighted to be here at Compass Minerals. When I did my research on the company a few months ago, three things became clear. Financials are extremely strong with a very healthy balance sheet, great margins, and consistently strong free cash flow. Secondly, the people. Fran has assembled a great team here to take the company to the next level. And finally, the chance to be part of the team that grows this business throughout stated objective of more than $500 million of EBITDA by 2018 is extremely exciting. So with that brief introduction, let me dive right into the results. Consolidated revenue increased 12% year-over-year for the quarter and 14% for the full-year. Adjusted EBITDA also increased year-over-year, up 34% for the quarter and 20% for the year. Our adjusted EBITDA margin percent expanded to 30% for the quarter and 24% for the year, driven by strong performance in both segments. For those of you looking at our Investor Presentation online, if we turn to Slide 8, our salt segment posted record earnings for the quarter. Year-over-year fourth quarter revenue for this segment increased 10%, driven largely by a 26% increase in the highway deicing sales price, and 6% price improvement on the consumer and industrial side. These price increases were a combination of three factors. First, we saw a real price improvement across all products in the marketplace. Second, overall consumer and industrial products represented a higher mix of total sales than in 2013. And lastly, there was a year-over-year mix shift to our higher value package deicing products within the consumer and industrial area. While highway deicing salt sales volumes for the quarter were down 13% from the prior year, sales volume…

Thank you. [Operator Instructions]. And your first question will come from Chris Parkinson with Credit Suisse.

Perfect, thank you. Just very quickly on Wolf Trax, it's been a little more than a year since you've had that under your wing. Can you just give a little kind of more color and some updates there on what you've seen thus far and then the potential you see going forward, particularly on a geographic basis? Thank you.

Well, Chris, this is Fran. We've actually owned the business little less than a year. So we've had it for about three quarters now. And the first year we -- after closing the transaction we've been implementing -- integrating that business into in the Compass and it's been performing well slightly accretive to earnings in the first year. We expected to grow as we anticipated when we acquired the company. So there's nothing out there that tells us that we won't continue to achieve kind of that 20%-ish growth a year on the top-line and see the results all the way to the bottom-line as well. And even though the farm economics for corn or soybeans may be lower today than they were a year or two ago, we still believe that the value of these products bring and the requirements that growers have to achieve their yields will continue to ensure strong demand going forward. So we're pleased with the business. We think it's certainly going to help us deliver profitable growth which is one of our key strategies.

Perfect. And just a quick follow-up -- you ran through a helpful overview of your 2018 plan. Can you just give a little more color on some of those additional initiatives you mentioned that may be a little more off investors' radar, particularly some of the things you mentioned that could have been incremental at Ogden and Goderich? Thank you.

Sure, at Goderich, and if you look at our salt business generally that growth from here forward will really come from cost reduction. So we're investing in things like continuous mining, more technology at our Goderich mine initially to take costs out and drive our per unit cost lower. And we think that we'll continue to be able to hold these price increases and stay on that trend line but hopefully, increase our market share slightly in salt, as time goes on and we've talked about that in the past. So that's really the growth we see in earnings coming from improving our performance there. At Ogden, we've made some recent investments in the plant to allow for greater capacity. But the significant investments in the plant, the compaction, and the crystallizer, which will allow us to take that volume, net annual production capacity, up to about 550 a year. We've proved those projects and will begin them here shortly. And that's 2015/2016 capital project with those benefits coming fully in 2017.

Okay. Thank you.

You're welcome.

And moving on we will hear from Chris Shaw with Monness Crespi & Hardt.

Yes, good morning, everyone. How are you doing?

We're doing well.

So the first question, just on the -- the salt margin, obviously, was very strong and it sort of exceeded what the guidance has in it. Is that -- is the extra margin there all just sort of due to the higher volumes and higher prices? Or was there anything else logistically that was helping the margin exceed the guidance for the quarter?

It was primarily the volume and the price. We saw the full impact of our price increases from the bid season this last summer take effect in the fourth quarter. So it's primarily price.

Then just a follow-up on margin -- is the drag from the imported salt -- is that -- will the impact be the same for 1Q as it was for 4Q? Or does that sort of lessen up a little bit to 1Q?

I think as we -- this is Matthew. I think as we go into 1Q, one of the things we've done to mitigate the impact of the downtime at Cote Blanche is to have a little more imported salt. So I think Q4 to Q1 that's probably a similar kind of impact with that diminishing as we move through the year.

Okay. And then just sticking to salt, there's been a lot of -- I guess it's been slightly below average in some of your areas. But I know that the East Coast is getting hammered, particularly in New England. Is there any opportunity -- and actually, I saw an article specifically saying somewhere in Vermont was short on salt. Is there any opportunity to move -- for you guys to move into that market on a temporary basis or -- if you have extra salt, say, in regions nearby?

It's difficult for us to reach too far out of our normal area this year, I would say, just mainly because we have those commitments and we've had recently strong weather across the north. I would definitely say there is -- it's been weaker on the south. So we have some bifurcation in our kind of delivery area. But it's difficult for us to reach the Northeast from coming out of our southern shipment area. So I don't see us taking a short-term opportunity there when we've shipped salt into the Northeast. But at the end of the day, any weather that uses salt in North America from our perspective is good for us as we head into the next year. And we suspect that the competitors in the markets that are delivering into their key markets are going to be fully tapped out into the coming year.

Great. Thanks guys.

Thank you.

From KeyBanc Capital Markets, we'll hear from Ivan Marcuse.

Hi. Thanks for taking my question. Real quick, on your pricing guidance of $74 to $78, why is there such a sequential decline. It seems like more than historically. It's may be down $2 to $3? Is that more of a mix function or is there something going on in terms of -- I don't know, why is there such a seasonal decline, I guess, is the question?

Ivan, I think it's probably more so from a 2Q impact than it would be from a first quarter impact. And I think it's probably -- some of that is probably in the mix that drives that. But that's really all that I would say comes to mind for us at this time.

Great. And then within your full-year assumptions, right, what are you assuming for price in the back half? In terms of for salt?

We're not -- right, we're not going to talk about salt pricing today on the call. I think, if you look at the winter being average, the balance of winter which we're hopeful about, and as I talked about earlier just mentioned briefly the -- we've been stronger in the north or weaker in the south and coming off a year where prices were up 25%. I think it's one, too early to talk about pricing and we'll wait till we get through winter to be updating on that going forward. But we still think that we have strong margins here and we will be able to maintain those strong margins with average winter into the back half of the year.

Right, and just a quick follow up on your operating costs -- with everything that you have, I know you have a lot of moving parts going on talking specifically to salt, but will you be able to have less imported salt this year, now that you have been running everything with an average winter? And what were your unit operating costs, I guess, going through the year? Will they slowly decline or will they ultimately stay flat on a year-over-year basis?

I think this is -- this is Matthew, again. I think we've got this phenomenon we talked about on the imported salt which will be in there initially at the start of the year and then it's going to gradually trail off as we go through 2015. So I think the impact of imported salt will decline as we go through the year and basically be gone once we get into the second half.

How much did the imported salt impact your operating cost on a year-over-year basis for 2014?

It's in the range of about I think $0.70 a ton on average, $0.70 a ton, $0.75 a ton.

Okay, great. Thanks.

And from JPMorgan, we'll hear from Jeff Zekauskas.

I think you have $267 million cash on your balance sheet. Why is that the right number? Are you holding too much cash or too little, or why is that's the number that Compass needs?

Yes, this is Fran. I think we raised additional capital debt last summer, took advantage of the market at that time. And I would say that a portion of that cash is earmarked towards the capital projects that we've initiated, as I mentioned earlier, as an example some of that cash is in Canada and is earmarked towards the Goderich project to realign the shaft one, but also the continuous mining equipment that we'll be buying there to lower our cost in the future. So I think as we look at our platform here to improve performance and deliver profitable growth, we think that we're going to use that cash in a responsible manner and continue to drive the returns that our investors require. We said that that return target is in the mid-2015 or mid-teens IRR on a risk adjusted basis and we'll continue to find opportunities to invest cash in those types of projects, and if we don't, then we'll return more cash to shareholders.

Just to put a bit more texture on that if I can, Fran, I think we declared back in Analyst Day that our CapEx for 2015 it would be about $250 million which is about double what we spent this year.

Yes. You talk about your targeted leverage ratio of up to 2.5 times adjusted EBITDA. Isn't your leverage ratio more like 1.2 times currently? And does this mean that you intend to lift it up, or are you using simply a debt to EBITDA?

I think the -- the slightly difference here, may be whether you're looking at it with the tornado proceeds in or the tornado proceeds out, that was about $80 million piece of income that came in, in 2014, and we prefer to look at it without that end.

I think, maybe just to add to that, I think on a gross debt basis we're at about 2 times on a net debt basis we're closer to 1, I think the 1.2 that you mentioned. And we've been looking at that at least to this point on a gross basis just because of where the cash has been sitting. And I think as we move forward we plan to continue to stay kind of in that 2.5 times or less knowing that it's going to go up and down a bit and knowing that our business is -- has the variability that it has, I think it's a prudent way to look at it.

Okay. And then lastly, leaving aside your first-half pricing, just focusing on salt pricing in the first quarter, shouldn't salt pricing in the first quarter be more or less what it was in the fourth quarter?

Yes, so I think those prices that we made the commitments on in the summer for the winter and will carry into the fourth quarter for salt.

Okay, great. Thank you so much.

Thank you.

[Operator Instructions]. Next we'll hear from Joel Jackson with BMO Capital Markets.

Hi, good morning. I just wanted to thank you for starting to give us 2015 outlook guidance. That's a very good incremental add for the investor community. So I had a couple questions. My first question is looking at your salt volume guidance. Your first-half volume guidance suggests -- and there was a bit of, of course, the strong presales in Q4. But if we extrapolate out your full-year number, it seems that you are suggesting that second-half your salt volumes will be about 10% above the last-decade average. Can you just elaborate on that?

Yes, this is Matthew. Let me start with the full-year and we've got our full-year setup around that 10-year average. So we feel very comfortable with where we are on a full-year basis. And I think what you've probably done is taken the midpoint of our guidance ranges for the first half and the full-year and then backed into the second half. To be honest that's why we gave you ranges instead of points, because I think there is some give and take between those two. The other fact is that we're dealing with is, we had a much stronger fourth quarter than we anticipated. And the wild card really is whether that was true restocking from the impacts of the very extreme winter the year before, or it was some premature buying with that very early snow in November that may have caused some buying that had a pull-ahead impact. So I think to be fair, we've been just a little bit cautious as we go into the first half not having complete knowledge around those two dynamics.

If I understand that, though, you decided for your 2015 number, full year, to take the average -- the last 10 -- just to bookend around the average of the last decade. So is it fair that if you get normal weather for now and normal weather in the second half of 2015, that full-year 2015 will come in at the lower half, lower end of the range?

I mean, it's just so very difficult to call this weather. I mean when you look back over the last 30 days, we've had extremely mild and extremely severe. So we're running with the 10-year average for the full-year and whatever much better handle on that one when we close out first quarter.

Okay, that was helpful. The second question is on the Canadian dollar FX. It's obviously been weak; the Canadian dollar is really weak. Can you talk about your sensitivity to the Canadian dollar and also -- for earnings -- and also what the tailwinds are, were in Q4 from the weaker Canadian dollar and may be what they would be in Q1? Thanks.

Yes, we've just recently looked at this obviously with the movement in the Canadian dollar and in the pound to be honest. And both are weaker by 10% or more versus the U.S. dollar. And essentially on a net income basis it's about a wash. So we're essentially in a position of a natural hedge net-net.

Okay, that's great. Thank you very much.

Thank you.

And next, we'll hear from Garrett Nelson with BB&T Capital Markets.

Hi, congrats on the strong results. I'm curious regarding the 2015 salt shipment guidance. 12 million tons to 13 million tons would be below the 13.3 million tons you've shipped each of the past two years. Obviously, salt demand has been very strong in recent quarters. But is there any reason you wouldn't be able to ship 13.3 million tons again if the weather is favorable and demand is strong? For example, does the Goderich project have a negative impact on your production capacity? Or is there anything else we should be keeping in mind?

We hope the weather is favorable. And I think that would lead to higher volumes for us. But in our assumption we're assuming kind of average weather. And if you're coming off the last winter with what happened in the last quarter of 2013, and the first quarter of 2014, that was driving significant amount of that volume increase. So we in our guidance were looking at average weather, which puts us in that 12 million ton to 13 million ton range. We would like to certainly, over time we talked about increasing our market shares slightly from about four points of share that we lost back in I'd say 2010, 2011, 2012. And we're just kind of have to see coming out of this winter how well that shakes out. It's going to be, I think an interesting bid season, and I think we're ready for that. We'll be ready for that as we come out of the winter and we'll update on that as we get into that season.

Okay, great. And then how many of them 5.5 million tons to 6 million tons of salt shipments for the first half of this year -- how many tons have been committed in price so far?

Basically, we lock in, in those commitments back in this summer. And the municipalities, which are the majority -- which is the majority of the volume will take a -- we'll look at that commitment based on a base amount with a minimum or a maximum that we have to deliver and they have to take depending on the winter. So and it really is driven by the extent that winter occurs throughout the year. So if winter comes early, winter comes late, we are there to deliver to our customers. And then we ground that out with commercial business, which is a small percentage of that and then some business that we call chemical business which goes to some large chemical manufactures that take that consistently throughout the year. So the majority of that guidance number will go to our highway customers, primarily in the first quarter.

Okay. And then on the $250 million CapEx guidance for this year, how much is maintenance versus growth? And what's the total CapEx breakdown between salt and plant nutrition?

I don't think we'll give you the breakdown between the two. But the maintenance CapEx kind of the -- what I would call the normal ongoing maintenance CapEx is about $70 million.

Okay.

And then the balance is split between kind of this one-time capital, mainly what we spend on the shaft realigning at Goderich and return capital split about evenly.

Okay. And then in the past you have implied that 2015 would represent a peak CapEx year and begin to drop off next year and then even more so in 2017. Is that still a reasonable assumption? And what kind of drop-off, roughly, should we expect over the next couple of years?

Yes, I think as we've said the two biggest spending years will be this year and next year. So it's hard to say exactly what next year will be, but it should be close may be slightly less to what we're going to what we plan to spend in 2015 and then we'll drop-off in 2017. And beyond that we should be really at our, I would say our core MLB which would be in that kind of $70 million to $80 million range going out from there.

Okay, great. Thank you very much.

From Deutsche Bank, we'll hear from David Begleiter.

Thank you. Fran, looking out to 2018, what are the unit production costs embedded for both salt and SOP for the $0.5 billion of EBITDA target guidance?

Yes, I'm not going to give you the exact numbers out there. I mean it's -- I don't have that in front of me. But when we announced kind of our plans at -- in the Investor Day and we're still continuing with that. We looked at taking real cost out of the business of about I think we said about $60 million in salt and about $20 million in the plant nutrition business. So total of $80 million against the portion of the investments that are going to deliver kind of the real cost savings. And I think the other thing that may be just worth mentioning, we know that in the year ahead our costs are going to be inflated at Ogden, due to the impact of harvest and we do have some variability there. But I believe that the work that we're doing on differentiating ourselves in the market and really receiving the value that that unique product delivers to growers and more normal conditions we're going to see the cost impact as we go down the road here and then I think assuming a normal harvest for us out there this summer. This should be real dollars falling at the bottom-line in 2016. So we're -- even though we have some short-term challenges, we're pretty bullish on the future there and that lead to the decisions that we made to expand our capacity and continue to do things to lower our cost in a real way going forward.

Understood. And just may be back on the oil issue, do you have a sensitivity to may be a $10 per barrel change in crude and its impact on your either shipping and handling costs or overall corporate cost?

This is Matthew. I think what I'd like to do is stay clear of the per barrel thing, because we have seen such a disconnect in the diesel that drives out cost and the price of a barrel of oil. Oil is down close to 50% and we've seen less than half of that drop in the diesel fuel. So I think I'd rather stay away from that kind of rule of a thumb. And I think in my presentation we talked a little bit like, if that relationship reestablishes itself as we go through 2015, it could be another $0.50 a ton pickup on the business.

And lastly, Fran, if you achieve your first-half salt volume guidance, where do you think customers will and year-end inventories at? Normal, below normal, above normal, in your view?

I think if we have a normal finish, kind of normal weather here, and average snowfall through the end of the season, I think given the situation at the beginning of the winter that inventories won't be fully restocked. So that should bode fairly well for pricing and demand as we look into the back half of the year and next winter. I just would caution though that -- the Northeast has been hit particularly hard and I'm sure most of you on the call are aware of that and our northern region has had better winter, stronger winter than the south. And so it's just going to be difficult to kind of paint a brush over this whole thing and say average or what our expectations are. We'll certainly have a strong view of that as we head into the pricing season, and I wouldn't be surprised if we have a bit of a compressed pricing season this year. I think the states that may be bid later in the year last year, may have felt they were out of this advantage. So I think that will be interesting as well. And so I would just stay tuned as we go forward here and start to talk about that pricing as we get into early spring and through the summer.

Thank you very much.

And our last question is a follow-up question from Chris Shaw with Monness Crespi & Hardt.

Just quickly on the UK situation, right, this winter, I know last year was mild. And I haven't in tracking exactly what it has been this winter. But from a few articles that pulled up it seems like it was a fairly decent snow-event winter so far. Have you guys been tracking the UK? And if so, is it above average or average?

We definitely track it, we have a mine there. So it's the kind of comeback to average, it was much below average last year, and we think that -- it's a combination of snowfall and temperatures probably equally or more important there that the temperatures have been such where they've had to apply salt to deal with moist roads that tend to ice up. So we're off to a much better start this year than we were last year and it's looking to be average at least at this point.

Okay, great. Thanks a lot.

You're welcome.

And at this time, I would like to turn the conference back over to Theresa Womble for any additional or concluding remarks.

Thank you, Rebecca. We appreciate your time today and your interest in Compass Minerals. Please feel free to contact the Investor Relations Department with any follow-up questions you may have. Have a great day.

Ladies and gentlemen, that does conclude today's presentation. We do thank everyone for your participation.