Compass Minerals Restates Financials Due to Accounting Errors

TL;DR

Compass Minerals is restating financials for FY23 and Q1/Q2 FY24 due to accounting errors. Expect revisions.

AI Summary

Compass Minerals International, Inc. announced on June 28, 2024, that it will not rely on previously issued financial statements for the fiscal year ended September 30, 2023, and the quarterly periods ended December 31, 2023, and March 31, 2024. This decision stems from an ongoing investigation into potential errors in accounting for certain inventory and related cost of goods sold. The company expects to restate its financial results for these periods.

Why It Matters

Investors should be aware that previously reported financial figures may be inaccurate, potentially impacting investment decisions and stock valuation.

Risk Assessment

Risk Level: medium — The need to restate financial statements indicates potential weaknesses in internal controls and accounting practices, which could lead to further issues or investor uncertainty.

Key Numbers

• FY23 — Fiscal Year (Financial statements for this period will be restated.)
• Q1 FY24 — Quarter (Financial statements for this period will be restated.)
• Q2 FY24 — Quarter (Financial statements for this period will be restated.)

Key Players & Entities

• Compass Minerals International, Inc. (company) — Registrant
• Delaware (jurisdiction) — State of incorporation
• 001-31921 (company_id) — Commission File Number
• 36-3972986 (tax_id) — I.R.S. Employer Identification No.
• 9900 West 109th Street Suite 100 Overland Park, KS 66210 (address) — Principal executive offices
• June 28, 2024 (date) — Date of earliest event reported
• September 30, 2023 (date) — Fiscal year end
• December 31, 2023 (date) — Quarterly period end
• March 31, 2024 (date) — Quarterly period end

FAQ

Key Financial Figures

• $0.01 — ange on which registered Common stock, $0.01 par value CMP The New York Stock Exchan
• $28 million — ingent consideration liability of up to $28 million to be paid in cash and/or common stock
• $32 — fixed price per share of approximately $32 upon the achievement of certain perform
• $1.1 million — idated Adjusted EBITDA by approximately $1.1 million in its Q1 2024 Form 10-Q and by approxi
• $9.0 million — Q1 2024 Form 10-Q and by approximately $9.0 million in its Q2 2024 Form 10-Q. At this tim

Filing Documents

• cmp-20240628.htm (8-K) — 61KB
• cmp-20240628_g1.jpg (GRAPHIC) — 98KB
• 0001227654-24-000148.txt ( ) — 427KB
• cmp-20240628.xsd (EX-101.SCH) — 2KB
• cmp-20240628_lab.xml (EX-101.LAB) — 23KB
• cmp-20240628_pre.xml (EX-101.PRE) — 13KB
• cmp-20240628_htm.xml (XML) — 3KB

02 Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review

Item 4.02 Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review. On June 28, 2024, the Audit Committee (the "Audit Committee") of the Board of Directors of Compass Minerals International, Inc. (the "Company") determined, based on the recommendation of management following its consultation with the Company's current (KPMG LLP, "KPMG") and former (Ernst & Young LLP, "EY") independent registered public accounting firms, that the Company's (i) unaudited financial statements included in its Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2023, filed with the U.S. Securities and Exchange Commission (the "SEC") on August 8, 2023 (the "Q3 2023 Form 10-Q"), (ii) audited financial statements included in its Annual Report on Form 10-K for the period ended September 30, 2023, filed with the SEC on November 29, 2023 (the "2023 Form 10-K"), (iii) unaudited financial statements included in its Quarterly Report on Form 10-Q for the quarterly period ended December 31, 2023, filed with the SEC on February 8, 2024 (the "Q1 2024 Form 10-Q") and (iv) unaudited financial statements included in its Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2024, filed with the SEC on May 15, 2024 (the "Q2 2024 Form 10-Q") (collectively, the "Affected Prior Period Financial Statements"), as well as the relevant portions of any communication that describe or are based on the Affected Prior Period Financial Statements, should no longer be relied upon because of certain misstatements contained in those financial statements. T he Company plans to restate, as soon as reasonably practical, the financial statements as of and for the periods ended June 30, 2023 and September 30, 2023 in an amendment to the 2023 Form 10-K and the unaudited interim financial statements as of and for the periods ended December 31, 2023 and March 31, 2024 in an amendment to the Q2 2024 Form 10-Q, both to be filed with the SEC.

Forward Looking Statements

Forward Looking Statements This report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are those that predict or describe future events or trends and that do not relate solely to historical matters, including statements about the estimated effect of the restatement and related adjustments on certain of the Company's previously issued financial statements and on the Company's internal control over financial reporting, and plans to restate the 2023 Form 10-K and Q2 2024 Form 10-Q. Words such as "may," "would," "could," "should," "will," "likely," "expect," "anticipate," "believe," "intend," "plan," "forecast," "outlook," "project," "estimate" and similar expressions suggesting future outcomes or events may identify forward-looking statements or forward-looking information. These statements are based on the Company's current expectations and involve risks and uncertainties that could cause actual results to differ materially. Factors that may cause future results to differ materially from the Company's current expectations include the risk that the preparation of the Company's restated financial statements or other subsequent events would require the Company to make additional financial statement adjustments, the risk that estimates are incorrect, the methodology applied to calculate the estimates of the adjustments and inherent limitations in internal control over financial reporting. For further information on risks and uncertainties that may affect the Company's business, see the "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections of the Company's 2023 10-K, Q1 2024 10-Q and Q2 2024 10-Q filed with the SEC, as well as the Company's other reports filed from time to time with the SEC. The Company undertakes no obligation to update any forward-looking statements made in this Current Report on Form 8-K to reflect

SIGNATURES

SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. COMPASS MINERALS INTERNATIONAL, INC. Date: July 3, 2024 By: /s/ Jeffrey Cathey Name: Jeffrey Cathey Title: Chief Financial Officer

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