# Compass Minerals International Inc: Form 10-Q for the period ended Sep 30, 2020

- Company: [Compass Minerals International Inc](/companies/cmp.md) (CIK 1227654)
- Form: 10-Q
- Filed: 2020-11-05
- Accepted by EDGAR: Nov 5, 2020, 20:52 ET
- Period: 2020-09-30
- Accession: 0001227654-20-000199
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1227654/000122765420000199/cmp-20200930.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1227654/000122765420000199/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2020-09-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2020-07-01 to 2020-09-30 | $282.4m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Revenue | 9 months, 2020-01-01 to 2020-09-30 | $952.4m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Gross profit | 3 months, 2020-07-01 to 2020-09-30 | $58.7m | us-gaap:GrossProfit |
| Gross profit | 9 months, 2020-01-01 to 2020-09-30 | $212.3m | us-gaap:GrossProfit |
| Selling, general and administrative | 3 months, 2020-07-01 to 2020-09-30 | $41.3m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Selling, general and administrative | 9 months, 2020-01-01 to 2020-09-30 | $126.2m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Operating income | 3 months, 2020-07-01 to 2020-09-30 | $17.4m | us-gaap:OperatingIncomeLoss |
| Operating income | 9 months, 2020-01-01 to 2020-09-30 | $86.1m | us-gaap:OperatingIncomeLoss |
| Interest expense | 3 months, 2020-07-01 to 2020-09-30 | $17.1m | us-gaap:InterestExpense |
| Interest expense | 9 months, 2020-01-01 to 2020-09-30 | $53.3m | us-gaap:InterestExpense |
| Income tax | 3 months, 2020-07-01 to 2020-09-30 | −$1.3m | us-gaap:IncomeTaxExpenseBenefit |
| Income tax | 9 months, 2020-01-01 to 2020-09-30 | $11.6m | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2020-07-01 to 2020-09-30 | −$2.1m | us-gaap:NetIncomeLoss |
| Net income | 9 months, 2020-01-01 to 2020-09-30 | $27.2m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2020-07-01 to 2020-09-30 | −$0.07 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 9 months, 2020-01-01 to 2020-09-30 | $0.76 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2020-07-01 to 2020-09-30 | −$0.07 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 9 months, 2020-01-01 to 2020-09-30 | $0.78 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2020-07-01 to 2020-09-30 | 33,947,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 9 months, 2020-01-01 to 2020-09-30 | 33,918,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 9 months, 2020-01-01 to 2020-09-30 | $188.5m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 9 months, 2020-01-01 to 2020-09-30 | $62.9m | us-gaap:PaymentsToAcquireProductiveAssets |
| Dividends paid | 9 months, 2020-01-01 to 2020-09-30 | $74.2m | us-gaap:PaymentsOfDividendsCommonStock |
| Cash and equivalents | at 2020-09-30 | $34.1m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2020-09-30 | $685.4m | us-gaap:AssetsCurrent |
| Total assets | at 2020-09-30 | $2.16bn | us-gaap:Assets |
| Current liabilities | at 2020-09-30 | $301.8m | us-gaap:LiabilitiesCurrent |
| Long-term debt | at 2020-09-30 | $1.29bn | us-gaap:LongTermDebtNoncurrent |
| Current portion of debt | at 2020-09-30 | $56.4m | us-gaap:LongTermDebtCurrent |
| Shareholders' equity | at 2020-09-30 | $324.1m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 47,169 characters.

All statements, other than statements of historical fact, contained in this Quarterly Report on Form 10-Q constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995.

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: risks related to the coronavirus (“COVID-19”) pandemic; our mining and industrial operations; geological conditions; dependency on a limited number of key production and distribution facilities and critical equipment; weather conditions; strikes, other forms of work stoppage or slowdown or other union activities; the inability to fund necessary capital expenditures or successfully complete capital projects; 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; financial assurance requirements; the inability of our customers to access credit or a default by our customers of trade credit extended by us or financing we have guaranteed; our payment of any dividends; the impact of competition on the sales of our products; risks associated with our international operations and sales, including changes in currency exchange rates and inflation risks; the impact of anticipated changes in plant nutrition product prices and customer application rates; conditions in the agricultural sector and supply and demand imbalances for competing plant nutrition products; increasing costs or a lack of availability of transportation services; the seasonal demand for our products; our rights and governmental authorizations to mine and operate our properties; compliance with foreign and United States (“U.S.”) laws and regulations related to import and export requirements and anti-corruption laws; compliance with environmental, health and safety laws and regulations; environmental liabilities; misappropriation or infringement claims relating to intellectual property; product liability claims and product recalls; inability to obtain required product registrations or increased regulatory requirements; changes in industry standards and regulatory requirements; our ability to successfully implement our strategies, including the strategic review of our Plant Nutrition South America business; the loss of key personnel; a compromise of our computer systems, information technology or operations technology or the inability to protect confidential or proprietary data;

our ability to expand our business through acquisitions, integrate acquired businesses and realize anticipated benefits from acquisitions; climate change; domestic and international general business and economic conditions; and other risks referenced from time to time in this report and our other filings with the Securities and Exchange Commission (the “SEC”), including the “Risk Factors” sections of our Annual Report on Form 10-K for the year ended December 31, 2019, Quarterly Report on Form 10-Q for the quarters ended March 31, 2020 and June 30, 2020 and this Quarterly Report on Form 10-Q.

In some cases, you can identify forward-looking statements by terminology such as “may,” “might,” “will,” “should,” “could,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” “continue,” the negative of these terms or other comparable terminology. Forward-looking statements include without limitation statements about the impact of COVID-19 pandemic on us; our outlook, including expected sales volumes; working capital requirements; our reinvestment of foreign earnings outside the U.S.; our ability to optimize cash accessibility, minimize tax expense and meet debt service requirements; future tax payments and tax refunds; outcomes of matters with taxing authorities; the effects of currency fluctuations and inflation; and the seasonality of our business. These forward-looking statements are only predictions. Actual events or results may differ materially.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. We undertake no duty to update any of the forward-looking statements after the date hereof or to reflect the occurrence of unanticipated events.

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 (the “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. Compass Minerals, Protassium+ and Wolf Trax, and combinations thereof, are trademarks of CMI or its subsidiaries in the U.S. and other countries.

### COVID-19 Pandemic

The ongoing COVID-19 pandemic has negatively impacted the global economy, disrupted global supply chains and created significant volatility and disruption of financial markets. As an essential business, we have continued producing and delivering products that support critical industries such as transportation, agriculture, chemical, food, pharmaceutical and animal nutrition. However, we have instituted several measures in response to the COVID-19 pandemic and the COVID-19 pandemic has negatively affected our business in a number of ways.

- **Employee welfare**: Our management team has taken multiple actions to limit the exposure of employees to the spread of COVID-19, including instituting remote working where possible, adjusting shift schedules and crew sizes, restricting visitation to operational sites, curtailing all business-related commercial air travel, and increasing sanitation of offices and common areas within our facilities.
- **Operations and sales**: COVID-19 has not interrupted the operations of our mining and manufacturing facilities in North America and Brazil. Operations at our U.K. salt mine were idled near the end of March 2020 due to the very mild winter weather experienced in that market, along with U.K. government guidance on COVID-19 preventative measures. Mine operations resumed in mid-May 2020, utilizing a gradual ramp up. During the third quarter of 2020, we continued to experience an impact to some of our sales channels due to manufacturing outages and retail disruptions primarily for our non-deicing salt products. In total, we estimate that the combined impact of lost sales and incremental operating costs related to COVID-19 totaled approximately $4 million in the third quarter of 2020 and $7 million on a year-to-date basis.
- **Supply chain and logistics:** To date, we have experienced no material supply chain or logistics issues. We continue to evaluate potential supply chain and logistics impacts, proactively increase inventory levels of critical sourced inputs and identify secondary suppliers where possible. Both our operations and our logistics partners are deemed “essential” under current governmental guidance and we have worked to ensure we understand and comply with their safety precautions to limit potential disruptions.

The ultimate impact that COVID-19 will have on our future results is unknown at this time. For more information, see “Part II–Item 1A–Risk Factors.”

### Critical Accounting Estimates

Preparation of our consolidated financial statements in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. Management believes the most complex and sensitive judgments result primarily from the need to make estimates about matters that are inherently uncertain. Management’s Discussion and Analysis and Note 2 to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2019 describe the significant accounting estimates and policies used in preparation of our consolidated financial statements. For a further description of our critical accounting policies, see Note 1 to our Consolidated Financial Statements included in this Quarterly Report on Form 10-Q. Actual results in these areas could differ from management’s estimates.

### Company Overview

Compass Minerals is a leading producer of essential minerals, including salt, sulfate of potash (“SOP”) specialty fertilizer and magnesium chloride. As of September 30, 2020, we operated 21 production and packaging facilities, including:

- The largest rock salt mine in the world in Goderich, Ontario, Canada;
- The largest dedicated rock salt mine in the U.K. in Winsford, Cheshire;
- A solar evaporation facility located in Ogden, Utah, which is both the largest SOP production site and the largest solar salt production site in the Western Hemisphere;
- Several mechanical evaporation facilities producing consumer and industrial salt; and
- Several facilities producing essential agricultural nutrients and specialty chemicals in Brazil.

Our salt business provides highway deicing salt to customers in North America and the U.K. as well as consumer deicing and water conditioning products, ingredients used in consumer and commercial food preparation, and other salt-based products for consumer, agricultural and industrial applications in North America. In the U.K., we operate a records management business utilizing excavated areas of our Winsford salt mine with one other surface location in London, England.

Our plant nutrition business produces and markets specialty plant nutrition products worldwide to distributors and retailers of crop inputs, as well as growers. Our principal plant nutrition product in our Plant Nutrition North America segment is SOP, which we market under the trade name Protassium+. We also sell various secondary nutrients as well as premium micronutrient products under our Wolf Trax brand.

Our Plant Nutrition South America segment operates two primary businesses in Brazil—agricultural productivity, which manufactures and distributes a broad offering of specialty plant nutrition solution-based products; and chemical solutions, which manufactures and markets specialty chemicals, primarily for the water treatment industry and for use in other industrial processes.

### Consolidated Results of Operations

The following is a summary of our consolidated results of operations for the three and nine months ended September 30, 2019 and 2020, 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.

### THREE AND NINE MONTHS ENDED SEPTEMBER 30

\* Refer to “—Sensitivity Analysis Related to EBITDA and Adjusted EBITDA” for a reconciliation to the most directly comparable U.S. GAAP financial measure and the reasons we use this non-GAAP measure.

### COMMENTARY: THREE MONTHS ENDED SEPTEMBER 30, 2019 AND 2020

- Total sales decreased 17%, or $58.9 million, due to decreases in all of our segments.
- Operating earnings decreased 42%, or $12.7 million, due to a decrease in our plant nutrition business, which was partially offset by an increase in our Salt segment.
- Earnings before interest, taxes, depreciation and amortization (“EBITDA”)\* adjusted for items management believes are not indicative of our ongoing operating performance (“Adjusted EBITDA”)\* decreased 18%, or $11.9 million.
- Diluted net earnings per share decreased $0.38.

### COMMENTARY: NINE MONTHS ENDED SEPTEMBER 30, 2019 AND 2020

- Total sales decreased 4%, or $37.8 million, due to a decrease in our Salt and Plant Nutrition South America segments, which was partially offset by an increase in our Plant Nutrition North America segment.
- Operating earnings increased 28%, or $18.7 million, due to increases in our Salt and Plant Nutrition South America segments, which was partially offset by lower earnings in our Plant Nutrition North America segment.
- Adjusted EBITDA increased 10%, or $17.6 million.
- Diluted net earnings per share increased $0.59.

### THREE AND NINE MONTHS ENDED SEPTEMBER 30

### COMMENTARY: THREE MONTHS ENDED SEPTEMBER 30, 2019 AND 2020

### Gross Profit: Decreased 23%, or $17.7 million; Gross Margin decreased by one percentage point

- Salt segment gross profit increased $3.2 million primarily due to lower per-unit product costs and lower logistics costs.
- The gross profit of the plant nutrition business, on a combined basis, decreased $21.1 million due to an $11.9 million decrease in our Plant Nutrition North America segment gross profit and a $9.2 million decrease in our Plant Nutrition South America segment gross profit. Plant Nutrition South America segment gross profit decreased primarily due to the impact of translating the weaker Brazilian reais and lower sales volumes. Plant Nutrition North America segment gross profit decreased due a decrease in sales volumes and higher product costs due primarily to an inventory adjustment of $7.4 million related to an overstatement of bulk SOP stockpiles at our Ogden facility.

### COMMENTARY: NINE MONTHS ENDED SEPTEMBER 30, 2019 AND 2020

### Gross Profit: Increased 9%, or $17.5 million; Gross Margin increased by 2 percentage points

- Salt segment gross profit increased $23.6 million primarily due to higher average sales prices and lower logistics costs, which were partially offset by lower sales volumes and higher per-unit product costs at our North American facilities and lower production volumes at our U.K. mine.
- The gross profit of the plant nutrition business, on a combined basis, decreased $7.0 million. Plant Nutrition North America segment gross profit decreased $6.1 million primarily due to lower average sales prices and higher product costs due to an inventory adjustment of $7.4 million related to an overstatement of bulk SOP stockpiles at our Ogden facility, partially offset by higher sales volumes. Plant Nutrition South America segment gross profit decreased $0.9 million primarily due to the weaker Brazilian reais, which was partially offset by higher sales volumes.

### OTHER EXPENSES AND INCOME

### COMMENTARY: THREE MONTHS ENDED SEPTEMBER 30, 2019 AND 2020

### SG&A: Decreased $5.0 million; increased 1.0 percentage point as a percentage of sales from 13.6% to 14.6%

- The decrease in SG&A expense was primarily due to lower compensation in all segments, lower corporate professional service fees and reduced travel expenses due to COVID-19, partially offset by increased corporate depreciation expense.

### Interest Expense: Decreased $0.6 million to $17.1 million

- The decrease was primarily due to a decrease in debt outstanding, which was partially offset by an increase in interest rates due to the refinancing of our debt in the fourth quarter of 2019.

### Loss (Gain) on Foreign Exchange: Decreased $5.9 million from income of $1.8 million to an expense of $4.1 million

- We realized foreign exchange losses of $4.1 million in the third quarter of 2020 compared to gains of $1.8 million in the third quarter of 2019 due primarily to changes in foreign currency exchange rates on our non U.S. dollar denominated intercompany loans.

### Other, Net: Decreased $0.7 million from income of $0.8 million to income of $0.1 million

- The decrease in other income was primarily due to lower interest income.

### Income Tax (Benefit) Expense: Decreased $6.1 million from an expense of $4.8 million to a benefit of $1.3 million

- The decrease in income tax expense was primarily due to lower pretax income in the third quarter of 2020 versus the third quarter of 2019.
- Our income tax provision in both periods differs from the U.S. statutory rate primarily due to U.S. statutory depletion, state income taxes, global intangible low-taxed income, foreign income, mining and withholding taxes and interest expense recognition differences for tax and financial reporting purposes.
- Our effective tax rate increased from 31% in the third quarter of 2019 to 38% in the third quarter of 2020 primarily due to refinements made in each period related to our expected full-year pretax profit and effective tax rate.

### COMMENTARY: NINE MONTHS ENDED SEPTEMBER 30, 2019 AND 2020

### SG&A: Decreased $1.2 million; increased 0.4 percentage points as a percentage of sales from 12.9% to 13.3%

- The decrease in SG&A expense was primarily due to lower travel expenses due to COVID-19 in all segments, partially offset by higher incentive compensation and higher corporate depreciation expense.

### Interest Expense: Increased $2.6 million to $53.3 million

- The increase was primarily due to an increase in interest rates due to the refinancing of our debt in the fourth quarter of 2019, which was partially offset by lower debt levels.

### Loss (Gain) on Foreign Exchange: Improved $12.5 million from an expense of $7.3 million to income of $5.2 million

- We realized foreign exchange gains of $5.2 million in the first nine months of 2020 compared to a loss of $7.3 million in the first nine months of 2019 due primarily to changes in foreign currency exchange rates on our non U.S. dollar denominated intercompany loans between our U.S. and foreign subsidiaries.

### Other, Net: Decreased $1.5 million from income of $1.9 million to income of $0.4 million

- The decrease in other income is primarily due to fees related to our U.S. securitization facility and lower interest income in the current period.

### Income Tax Expense: Increased $6.3 million from $5.3 million to $11.6 million

- The increase in income tax expense was primarily due to higher pretax income in the third quarter of 2020 versus the third quarter of 2019, partially offset by the discrete tax expense items in the first quarter of 2019.
- Our income tax provision in both periods differs from the U.S. statutory rate primarily due to U.S. statutory depletion, state income taxes, global intangible low-taxed income, foreign income, mining and withholding taxes and interest expense recognition differences for tax and financial reporting purposes.
- Our effective tax rate decreased from 45% in 2019 to 30% in 2020 primarily due to the impact of discrete tax items in the first quarter of 2019.

### Operating Segment Performance

The following financial results represent consolidated financial information with respect to sales from our Salt, Plant Nutrition North America and Plant Nutrition South America segments. The results of operations of the consolidated records management business and other incidental revenues include sales of $2.6 million and $2.3 million for the third quarter of 2020 and 2019, respectively, and $7.6 million and $7.1 million for the first nine months of 2020 and 2019, respectively. These revenues are not material to our consolidated financial results and are not included in the following operating segment financial data.

### Salt

### THREE AND NINE MONTHS ENDED SEPTEMBER 30

|  | 3Q 2020 | 3Q 2019 | 2020 YTD | 2019 YTD |
| --- | ---: | ---: | ---: | ---: |
| **Salt Sales (in millions)** | $141.3 | $159.6 | $550.9 | $578.6 |
| **Salt Operating Earnings (in millions)** | $25.0 | $20.6 | $111.6 | $87.5 |
| **Salt Sales Volumes (thousands of tons)** |  |  |  |  |
| Highway deicing | 1,205 | 1,403 | 5,330 | 5,811 |
| Consumer and industrial | 458 | 500 | 1,327 | 1,489 |
| Total tons sold | 1,663 | 1,903 | 6,657 | 7,300 |
| **Average Salt Sales Price (per ton)** |  |  |  |  |
| Highway deicing | $55.28 | $60.01 | $64.41 | $60.19 |
| Consumer and industrial | $162.96 | $150.76 | $156.42 | $153.67 |
| Combined | $84.94 | $83.84 | $82.75 | $79.25 |

### COMMENTARY: THREE MONTHS ENDED SEPTEMBER 30, 2019 AND 2020

- Salt sales decreased 11%, or $18.3 million, primarily due to lower Salt sales volumes and highway deicing average sales prices, which were partially offset by higher consumer and industrial average sales prices.
- Average sales prices contributed $0.1 million to the Salt sales decline, although the sales mix resulted in a 1% increase in combined average Salt sales prices as higher-priced consumer and industrial sales volumes were a higher proportion of total sales in the current period.
- Highway deicing average sales prices decreased 8% due to lower North American highway deicing contract prices for the 2020-2021 winter season and increased sales to chemical customers, which have a lower average sales price. Consumer and industrial average sales prices increased 8% due to price increases implemented during the period.
- Salt sales volumes decreased 13%, or 240,000 tons, and contributed $18.2 million to the sales decline. Highway deicing sales volumes decreased 14% primarily as a result of lower early fill volumes due to the milder winter weather in the first quarter of 2020 in North America, which was partially offset by higher sales volumes in the U.K and higher sales to chemical customers. Consumer and industrial sales volumes decreased 8% due to the impact of COVID-19 on our non-deicing sales and reduced pre-season demand for our consumer and industrial deicing products.
- Salt operating earnings increased 21%, or $4.4 million, due to lower per-unit product cost that resulted from higher production volumes at our Goderich mine and lower per-unit logistics costs. Prior period product costs were negatively impacted by several items including unplanned downtime at our North America mines, labor dispute settlement expense at our Goderich mine and executive transition costs.

### COMMENTARY: NINE MONTHS ENDED SEPTEMBER 30, 2019 AND 2020

- Salt sales decreased 5%, or $27.7 million, primarily due to lower Salt sales volumes, which were partially offset by higher highway deicing average sales prices in the first half of 2020 and higher consumer and industrial average sales prices.
- Salt average sales prices increased 4% and contributed $26.1 million to sales due to higher highway deicing sales prices in the first half of 2020 and higher consumer and industrial average sales prices.
- Highway deicing average sales prices increased 7% due to the impact of higher North American highway deicing contract prices for the 2019-2020 winter season realized during the first half of 2020. Consumer and industrial average sales prices increased 2% primarily due to price increases taken during 2020 and sales mix.
- Salt sales volumes decreased 9%, or 643,000 tons, and unfavorably impacted sales by $53.8 million. Highway deicing sales volumes decreased 8% primarily as result of milder winter weather in the first quarter of 2020 in North America and the U.K. Consumer and industrial sales volumes also decreased 11% due to lower first quarter sales of deicing products and lower sales of non-deicing products primarily due to COVID-19.
- Salt operating earnings increased 28%, or $24.1 million, due to higher Salt sales prices and lower per-unit logistics costs, which were partially offset by higher per-unit product cost primarily due to lower production volumes in the U.K. and our consumer and industrial plants and increased professional service fees.

### Plant Nutrition North America

### THREE AND NINE MONTHS ENDED SEPTEMBER 30

|  | 3Q 2020 | 3Q 2019 | 2020 YTD | 2019 YTD |
| --- | ---: | ---: | ---: | ---: |
| **Plant Nutrition North America Sales (in millions)** | $35.2 | $44.4 | $150.9 | $129.7 |
| **Plant Nutrition North America Operating (Loss) Earnings (in millions)** | $(6.1) | $4.7 | $4.2 | $7.7 |
| **Plant Nutrition North America Sales Volumes (thousands of tons)** | 54 | 69 | 239 | 200 |
| **Plant Nutrition North America Average Sales Price (per ton)** | $651 | $641 | $631 | $648 |

### COMMENTARY: THREE MONTHS ENDED SEPTEMBER 30, 2019 AND 2020

- Plant Nutrition North America sales decreased 21%, or $9.2 million due to lower sales volumes, which was partially offset by higher average sales prices.
- Plant Nutrition North America sales volumes decreased 22%, or 15,000 tons due to delays in fall application of SOP as a result of drought and wildfires in the western U.S., which were partially offset by increased sales of micronutrient products and resulted in a $9.6 million decrease in sales.
- Plant Nutrition North America average sales prices increased 2% due to a higher proportion of sales from micronutrients, which have a higher sales price resulting in a $0.4 million offset to the decrease in sales. Compared to the prior year, both SOP and micronutrient prices declined.
- Plant Nutrition North America operating earnings decreased $10.8 million to a loss of $6.1 million due to lower sales volumes and higher per-unit product costs due to an inventory adjustment of $7.4 million related to an overstatement of bulk SOP stockpiles at our Ogden facility.

### COMMENTARY: NINE MONTHS ENDED SEPTEMBER 30, 2019 AND 2020

- Plant Nutrition North America sales increased 16%, or $21.2 million due to higher sales volumes, which was partially offset by lower average sales prices.
- Plant Nutrition North America sales volumes increased 20%, or 39,000 tons, which resulted in a $25.3 million increase in sales. Sales volumes in the first half of 2019 were lower due to the cold and wet weather experienced in our key markets
- Plant Nutrition North America average sales prices decreased 3%, providing a $4.1 million offset to the increase in sales.
- Plant Nutrition North America operating earnings decreased $3.5 million to $4.2 million due to lower average sales prices and higher per-unit product costs due to an inventory adjustment of $7.4 million related to an overstatement of bulk SOP stockpiles at our Ogden facility, which was partially offset higher sales volumes, lower per-unit shipping and handling costs, lower depreciation expense and lower SG&A expenses.

### Plant Nutrition South America

### THREE AND NINE MONTHS ENDED SEPTEMBER 30

|  | 3Q 2020 | 3Q 2019 | 2020 YTD | 2019 YTD |
| --- | ---: | ---: | ---: | ---: |
| **Plant Nutrition South America Sales (in millions)** | $103.3 | $135.0 | $243.0 | $274.8 |
| **Plant Nutrition South America Operating Earnings (in millions)** | $15.0 | $22.4 | $24.2 | $21.5 |
| **Plant Nutrition South America Sales Volumes (thousands of tons)** |  |  |  |  |
| Agricultural productivity | 148 | 166 | 343 | 327 |
| Chemical solutions | 82 | 84 | 257 | 246 |
| Total tons sold | 230 | 250 | 600 | 573 |
| **Average Plant Nutrition South America Sales Price (per ton)** |  |  |  |  |
| Agricultural productivity | $582 | $673 | $549 | $635 |
| Chemical solutions | $213 | $275 | $213 | $272 |
| Combined | $449 | $540 | $405 | $479 |

### COMMENTARY: THREE MONTHS ENDED SEPTEMBER 30, 2019 AND 2020

- Plant Nutrition South America sales decreased 23%, or $31.7 million, due to lower average sales prices resulting from a 38% unfavorable weighted average change in the Brazilian reais versus the U.S. dollar from the prior year and a decline in sales volumes. In local currency, sales increased by 5% due to improved sales prices in agricultural productivity and chemical solutions products.
- Plant Nutrition South America sales volumes decreased 8%, or 20,000 tons, contributing $13.0 million to the decrease in sales. Agricultural productivity sales volumes decreased 11% due to early purchasing of crop inputs in the second quarter as well as some delays in purchasing in the third quarter due to unfavorable weather conditions. Chemical solutions sales volumes decreased 2% due to lower water treatment sales.
- A 38% weakening of the Brazilian reais caused a 17% decrease in Plant Nutrition South America average sales prices, reducing sales by $18.6 million. In local currency, a stronger mix of agricultural productivity sales resulted in a 15% increase in average sales prices.
- Plant Nutrition South America operating earnings decreased $7.4 million to $15.0 million due to a weaker Brazilian reais, lower sales volumes and higher SG&A costs, primarily from incentive compensation and professional services.

### COMMENTARY: NINE MONTHS ENDED SEPTEMBER 30, 2019 AND 2020

- Plant Nutrition South America sales decreased $31.8 million, due to a 31% unfavorable weighted average change in the Brazilian reais versus the U.S. dollar from the prior year, which was offset by higher sales volumes.
- Plant Nutrition South America sales volumes increased 5%, or 27,000 tons, which contributed $13.2 million to sales. Agricultural productivity sales volumes increased 5% due primarily to improvements in farmer economics and affordability of fertilizer products due to foreign exchange and barter rates. Chemical solutions sales volumes increased 4% due primarily to higher sales of chlor-akali products.
- The 31% weakening of the Brazilian reais reduced sales by $44.7 million. In local currency, a stronger mix of agricultural productivity sales and price increases in most product lines resulted in a 11% increase in average sales prices.
- Plant Nutrition South America operating earnings increased $2.7 million from $21.5 million to earnings of $24.2 million due to higher sales volumes which was partially offset by a weaker Brazilian reais and increased SG&A costs due to incentive compensation and professional services.

### 2020 Full-Year Outlook

- After completion of the North American highway deicing bid season, we expect Salt sales volumes for 2020 to range from 10.5 million tons to 10.8 million tons.
- Plant Nutrition North America sales volumes for 2020 are expected to range from 340,000 tons to 365,000 tons.
- We expect 2020 Plant Nutrition South America sales volumes to range from 800,000 tons to 900,000 tons.
- For information about the impact of the COVID-19 pandemic on the Company, see “–COVID-19 Pandemic” and “Part II–Item 1A–Risk Factors.”

### Liquidity and Capital Resources

Historically, our cash flows from operating activities have generally been adequate to fund our basic operating requirements and ongoing debt service. We have also used cash generated from operations to fund capital expenditures which strengthen our operational position, 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, legislative, regulatory 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 fourth quarter and lowest in the second quarter. When needed, we may fund short-term working capital requirements by accessing our $300 million revolving credit facility.

We have been able to manage our cash flows generated and used across Compass Minerals to permanently reinvest earnings in our foreign jurisdictions or efficiently repatriate those funds to the U.S. As of September 30, 2020, we had $31.8 million of cash and cash equivalents (in our Consolidated Balance Sheets) that were either held directly or indirectly by foreign subsidiaries. During the fourth quarter of 2018, we revised our permanently reinvested assertion to indicate that we expect to repatriate approximately $150 million of unremitted foreign earnings on which we have recorded a $4.8 million deferred tax liability as of September 30, 2020 for foreign withholding tax and state income tax. Due to our ability to generate adequate levels of domestic cash flow on an annual basis, it is our current intention to continue to reinvest all 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. 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 domestic and foreign subsidiaries are impacted by the transfer price charged on the transfer of our products between them. As discussed in Note 7 to our Consolidated Financial Statements, our calculated transfer price on certain products between one of our foreign subsidiaries and a domestic subsidiary has been challenged by Canadian federal and provincial governments. In the fourth quarter of 2017, we reached a federal settlement agreement with Canadian and U.S. tax authorities related to our transfer pricing issues for our 2007-2012 tax years. The recording of this settlement resulted in increased sales for our Canadian subsidiary of $85.7 million and increased offsetting expenses for our U.S. subsidiary in 2017 causing a domestic loss and significant foreign income. During 2018, in accordance with the settlement agreement, our U.S. subsidiary made intercompany cash payments of $85.7 million to our Canadian subsidiary and tax payments to Canadian taxing authorities of $17.5 million. The remaining liability was satisfied in 2019 with tax payments of $5.3 million. Corresponding tax refunds of $21.4 million were received primarily in 2019 from U.S. taxing authorities, with the remaining refund of approximately $1.6 million expected in 2020 or early 2021. Additionally during the fourth quarter of 2018, we reached a federal settlement agreement with Canadian and U.S. tax authorities on transfer pricing and management fees as part of an advanced pricing agreement that covers tax years 2013-2021. The recording of this settlement in 2018 resulted in increased sales for our Canadian subsidiary of $106.1 million and offsetting expenses for our US subsidiary causing a domestic loss and significant foreign income in 2018. During the second quarter of 2019, in accordance with the settlement agreement, our U.S. subsidiary made intercompany cash payments of $106.1 million to our Canadian subsidiary and tax payments to Canadian taxing authorities of $29.9 million with the remaining $1.5 million of tax payments to be paid during 2020. Corresponding tax refunds of $59.7 million have been received as of September 30, 2020 from U.S. taxing authorities, of which $55 million was received during the first quarter of 2020, with the remaining $1.9 million expected in 2020 or early 2021. There are ongoing challenges by Canadian provincial taxing authorities regarding our transfer prices of certain products. The final resolution of these challenges may not occur for several years. We currently expect the outcome of these matters will not have a material impact on our results of operations. However, it is possible the resolution could materially impact the amount of earnings attributable to our domestic and foreign subsidiaries, which could impact the amount of permanently reinvested foreign earnings as well as future cash flows from our domestic operations. See Note 7 to our Consolidated Financial Statements for a discussion regarding our Canadian tax reassessments and settlement.

A portion of our loans in Brazil are denominated in euros. We have entered into foreign currency agreements whereby we agreed to swap interest and principal payments on the loans denominated in euros for principal and interest payments denominated in Brazilian reais, the functional currency of our Brazil subsidiary. See Note 12 to our Consolidated Financial Statements for a discussion of our foreign currency agreement.

Cash and cash equivalents as of September 30, 2020 of $34.1 million, decreased $0.6 million from December 31, 2019. We generated $188.5 million of operating cash flows in the first nine months of 2020. In the first nine months of 2020, we used cash on hand and cash flows from operations to pay $40.4 million of net long-term debt, to fund capital expenditures of $62.9 million and pay dividends on our common stock of $74.2 million.

As of September 30, 2020, we had $1.36 billion of indebtedness, consisting of $250.0 million outstanding under our 4.875% Senior Notes due 2024, $500.0 million outstanding under our 6.75% Senior Notes due 2027, $492.7 million of borrowings outstanding under our senior secured credit facilities (consisting of term loans and a revolving credit facility), including $100.2 million borrowed against our revolving credit facility, and $88.5 million of Brazilian debt (see Note 8 to our Consolidated Financial Statements for more detail regarding our debt). We had $12.1 million of outstanding letters of credit as of September 30, 2020, which reduced our revolving credit facility borrowing availability to $187.7 million.

On June 30, 2020, certain of our U.S. subsidiaries entered into a three-year committed revolving accounts receivable financing facility of up to $100 million with PNC Bank, National Association, as administrative agent and lender, and PNC Capital Markets, LLC, as structuring agent. As of September 30, 2020 we had $28.0 million of outstanding loans under this accounts receivable financing facility. See Note 8 to our Consolidated Financial Statements for more information.

Our debt service obligations could, under certain circumstances, materially affect our financial condition and impair our ability to operate our business or pursue our business strategies. 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. Our subsidiaries are not obligated to make funds available to CMI. Furthermore, we must remain in compliance with the terms of our credit agreement governing our term loans and revolving credit facility, including the total leverage ratio and interest coverage ratio, in order to make payments on our debt or pay dividends to our stockholders. We must also comply with the terms of our indenture governing our senior notes. Although we are in compliance with our debt covenants as of September 30, 2020, we can make no assurance that we will remain in compliance with these ratios nor can we make any assurance that the agreements governing the current and future indebtedness of our subsidiaries will permit our subsidiaries to provide us with sufficient dividends, distributions or loans to fund scheduled interest payments on our debt when due. If we consummate an additional acquisition, our debt service requirements could increase. Furthermore, we may need to refinance all or a portion of our indebtedness on or before maturity; however, we cannot provide assurance that we will be able to refinance any of our indebtedness on commercially reasonable terms or at all.

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

| NINE MONTHS ENDED SEPTEMBER 30, 2020 | NINE MONTHS ENDED SEPTEMBER 30, 2019 |
| --- | --- |
| **Operating Activities:** |  |
| » Net earnings were $27.2 million. | » Net earnings were $6.4 million. |
| » Non-cash depreciation and amortization expense was $103.6 million. | » Non-cash depreciation and amortization expense was $102.8 million. |
| » Working capital items were a source of operating cash flows of $46.3 million. | » Working capital items were a use of operating cash flows of $21.5 million. |
| **Investing Activities:** |  |
| » Net cash flows used by investing activities included $62.9 million of capital expenditures. | » Net cash flows used by investing activities included $71.6 million of capital expenditures. |
| **Financing Activities:** |  |
| » Net cash flows used by financing activities included the payment of dividends of $74.2 million. | » Net cash flows used by financing activities included the payment of dividends of $73.6 million. |
| » In addition, we had net payments on our debt $40.4 million. | » In addition, we had net payments on our debt of $49.3 million. |

### Other Matters

See Notes 7 and 9 to our Consolidated Financial Statements for a discussion regarding labor, environmental and litigation matters.

### Sensitivity Analysis Related to EBITDA and Adjusted EBITDA

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 EBITDA and 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 these measures to assess our operating performance and return on capital, and to evaluate potential acquisitions or other capital projects. These measures are not calculated under U.S. GAAP and should not be considered in isolation or as a substitute for net earnings, operating earnings, cash flows or other financial data prepared in accordance with U.S. GAAP or as a measure of our overall profitability or liquidity. 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, loss (gain) on foreign exchange and other expense (income). 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. 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.

The calculation of EBITDA and Adjusted EBITDA as used by management is set forth in the table below (in millions):

|  | Three Months Ended September 30, 2020 | 2019 | Nine Months Ended September 30, 2020 | 2019 |
| --- | ---: | ---: | ---: | ---: |
| Net (loss) earnings | $(2.1) | $10.6 | $27.2 | $6.4 |
| Interest expense | 17.1 | 17.7 | 53.3 | 50.7 |
| Income tax (benefit) expense | (1.3) | 4.8 | 11.6 | 5.3 |
| Depreciation, depletion and amortization | 35.6 | 33.9 | 103.6 | 102.8 |
| EBITDA | 49.3 | 67.0 | 195.7 | 165.2 |
| Adjustments to EBITDA: |  |  |  |  |
| Stock-based compensation - non cash | 2.1 | 0.6 | 7.2 | 4.0 |
| Loss (gain) on foreign exchange | 4.1 | (1.8) | (5.2) | 7.3 |
| Executive transition costs | — | 2.3 | — | 2.3 |
| Logistics impact from flooding | — | — | — | 2.8 |
| Other income, net | (0.1) | (0.8) | (0.4) | (1.9) |
| Adjusted EBITDA | $55.4 | $67.3 | $197.3 | $179.7 |

### Recent Accounting Pronouncements

See Note 1 to our Consolidated Financial Statements for a discussion of recent accounting pronouncements.

### Effects of Currency Fluctuations

Our operations outside of the U.S. are conducted primarily in Canada, Brazil and the U.K. Therefore, our results of operations are subject to both currency transaction risk and currency translation risk. We incur currency transaction risk whenever we or one of our subsidiaries enters into either a purchase or sales transaction using a currency other than the local currency of the transacting entity. With respect to currency translation risk, our financial condition and results of operations are measured and recorded in the relevant local currency and then translated into U.S. dollars for inclusion in our consolidated financial statements. Exchange rates between these currencies and the U.S. dollar have fluctuated significantly from time to time and may do so in the future. The majority of revenues and costs are denominated in U.S. dollars, with Canadian dollars, Brazilian reais and British pounds sterling also being significant. Significant changes in the value of the Canadian dollar, Brazilian reais or British pound sterling relative to the U.S. dollar could have a material effect on our financial condition.

Although inflation has not had a significant impact on our operations, our efforts to recover cost increases due to inflation may be hampered as a result of the competitive industries and countries in which we operate.

### Seasonality

We experience a substantial amount of seasonality in our sales. Our sales of our salt deicing products are seasonal. Consequently, our Salt sales and operating income are generally higher in the first and fourth quarters and lower during the second and third quarters of each year. 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, we seek to stockpile sufficient quantities of deicing salt in the second, third and fourth quarters to meet the estimated requirements for the winter season.

Our plant nutrition business is also seasonal. The strongest demand for our Plant Nutrition South America products in Brazil typically occurs during the spring planting season. As a result, we and our customers generally build inventories during the low demand periods of the year to ensure timely product availability during the peak sales season. The seasonality of this demand results in our sales volumes and net sales for our Plant Nutrition South America segment usually being the highest during the third and fourth quarters of each year (as the spring planting season begins in September in Brazil).

## Market risk

As filed, 884 characters.

Our business is subject to various types of market risks that include interest rate risk, foreign currency exchange rate risk and commodity pricing risk. Management has taken actions to mitigate our exposure to commodity pricing and foreign currency exchange rate risk by entering into natural gas derivative instruments and foreign currency contracts. We may take further actions to mitigate our exposure to interest rates, exchange rates and changes in the cost of transporting our products due to variations in our contracted carriers’ cost of fuel, which is typically diesel fuel. However, there can be no assurance that our hedging activities will eliminate or substantially reduce these risks. We do not enter into any financial instrument arrangements for speculative purposes. Our market risk exposure related to these items has not changed materially since December 31, 2019.

## Controls and procedures

As filed, 1,630 characters.

#### Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this Quarterly Report on Form 10-Q, an evaluation of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) was performed under the supervision and with the participation of the Company’s management, including the Chief Executive Officer and Chief Financial Officer. Based on that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of September 30, 2020, to ensure that information required to be disclosed in the reports it files and submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.

For this purpose, disclosure controls and procedures include controls and procedures designed to ensure that information that is required to be disclosed under the Exchange Act is accumulated and communicated to the Company’s management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

#### Changes in Internal Control Over Financial Reporting

There has been no change in the Company’s internal control over financial reporting during the most recently completed fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

## Risk factors

As filed, 6,257 characters.

For a discussion of the risk factors applicable to Compass Minerals, please refer to Part I, Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2019, as updated and supplemented by the discussion below related to the COVID-19 pandemic.

***The COVID-19 pandemic, or other outbreaks of infectious disease or similar public health threats, could materially and adversely affect our business, financial condition and results of operations.***

The ongoing COVID-19 pandemic, and any other outbreaks of contagious diseases or other adverse public health developments in the United States or worldwide, could have a material adverse effect on our business, financial condition and results of operations. As an essential business, we have continued producing and delivering products that support critical industries such as transportation, agriculture, chemical, food, pharmaceutical and animal nutrition. However, COVID-19 has significantly impacted economic activity and markets worldwide in 2020, and it has and may continue to negatively affect our business in a number of ways. These effects include, but are not limited to:

- Disruptions or restrictions on our employees’ ability to work effectively due to illness, travel bans, quarantines, shelter-in-place orders or other limitations could impact our business.
- Temporary closures or disruptions at our facilities or the facilities of our customers or suppliers could reduce demand for our products or affect our ability to timely meet our customer’s orders and negatively impact our supply chain. For example, we experienced lost sales in the second and third quarter of 2020 primarily for certain customers of our non-deicing salt products due to manufacturing outages and retail disruptions. Compliance with new governmental regulations, such as social distancing regulations, could increase our operational costs. COVID-19 has not interrupted the operations of our mining and manufacturing operations in North America and Brazil; however, operations at our U.K. salt mine were idled near the end of March 2020 due to the mild 2019-2020 winter weather experienced in that market, along with U.K. government guidance on COVID-19 preventative measures, with operations resuming in mid-May 2020 using a gradual ramp up. In addition, we have incurred increased costs related to health and safety precautions we have put in place at our facilities, such as increasing sanitation of offices and common areas within our facilities.
- Our mining and manufacturing facilities rely on raw materials and components provided by our suppliers. The impacts of COVID-19 could cause delays or disruptions in our supply chain and we could experience a mining or manufacturing slow-down or seek to obtain alternate sources of supply, which may not be available or may be more expensive. Disruptions to our supply chain and business operations, or to our suppliers’ or customers’ supply chains and business operations, could include disruptions from the closure of supplier and manufacturer facilities, interruptions in the supply of raw materials and components, personnel absences, or restrictions on the shipment of our or our suppliers’ or customers’ products, any of which could have adverse ripple effects on our business.
- Global health concerns, such as COVID-19, have resulted in and may continue to result in social, economic and labor instability in the countries and localities in which we or our suppliers and customers operate. Any of these uncertainties could have a material adverse effect on our business, financial condition or results of operations.
- The failure of third parties on which we rely, including our suppliers, customers, contractors, commercial banks and external business partners, to meet their respective obligations to the Company, or significant disruptions in their ability to do so, which may be caused by their own financial or operational difficulties, could have an adverse impact on our business, financial condition or results of operations.
- Remote work arrangements for our employees could strain our technology resources and introduce operational risks, including heightened cybersecurity risk. Remote working environments may be less secure and more

susceptible to hacking attacks, including phishing and other social engineering attempts that seek to exploit the COVID-19 pandemic. These risks could also impact the third parties on which we rely.

- The COVID-19 pandemic has significantly increased economic and demand uncertainty and has led to disruption and volatility in the global credit and financial markets, which increases the cost of capital and adversely impacts access to capital for both the Company and our customers and suppliers. Disruption and volatility in the global and financial markets or other factors may also cause adverse fluctuations in foreign currency exchange rates, particularly an increase in the value of the U.S. dollar against the Canadian dollar, the Brazilian reais or the U.K. pound sterling, which could negatively affect our business, financial condition and reported results of operations.

The impact of COVID-19 may also exacerbate other risks discussed in Part I, Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2019, any of which could have a material adverse effect on us. The extent to which the COVID-19 pandemic, or other outbreaks of disease or similar public health threats, materially and adversely impact our business, financial condition and results of operations is highly uncertain and will depend on future developments. Such developments may include the geographic spread and duration of the virus, the severity of the disease and the actions that may be taken by various governmental authorities and other third parties in response to the outbreak. In addition, how quickly, and to what extent, normal economic and operating conditions can resume cannot be predicted, and the resumption of normal business operations may be delayed or constrained by lingering effects on our suppliers, third-party service providers and customers. There is also no certainty about when the adverse impacts of the COVID-19 pandemic will end.

Filed Nov 5, 2020.
Source: SEC EDGAR, the filing index for accession 0001227654-20-000199. Last ingested by Listed: Oct 24, 2026, 15:10 ET. No prices; not investment advice.