Compass Minerals International Inc (CMP) 2006 Q4 法說會逐字稿

Good morning. My name is Anessa, and I will be your conference operator today. At this time, I would like to welcome everyone to Compass Minerals' fourth-quarter conference call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. (OPERATOR INSTRUCTIONS)

Thank you. At this time, I will turn the conference over to Peggy Landon, Director of Investor Relations and Corporate Communications. Please go ahead, ma'am.

Thank you, Anessa. Good morning, everyone. Thank you for joining us this morning. In a moment, I will be turning the call over to Angelo Brisimitzakis, our President and CEO, and Rod Underdown, our Chief Financial Officer. But before I do that, I will read you the following Safe Harbor statement.

Today's discussion 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 current expectations and involve risks and uncertainties that could cause the Company's actual results to differ materially. The differences could be caused by a number of factors, including those identified in Compass Minerals' most recent Form 10-K. The Company will not 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 on the Investor Relations portion of our website at compassminerals.com.

Now I'll turn the call over to Angelo Brisimitzakis.

Thanks, Peggy. Good morning, everyone. Thanks for joining us today. My first winter here at Compass Minerals has certainly been interesting. I've been describing the past year as a tale of two winters. Neither 2005 nor 2006 had what we would call normal weather.

As you'll remember, in 2005, we had heavy snows, even record snows, in both the first and fourth quarters of the year. By contrast, 2006 had exceptionally mild weather, including record high temperatures in our served geography also in both the first and fourth quarters of the year.

Our sales and earnings reflect the effects of both unusual years. The balmy weather was particularly tough on our fourth-quarter 2006 deicing sales. We estimate that our fourth-quarter sales were $30 million to $40 million lower than they would have been in a normal-weather fourth quarter, and our operating earnings were approximately $8 million to $12 million lower than normal.

For the full year, our 2006 sales were approximately $70 million to $80 million lower than we would expect in a normal year, and operating earnings were approximately $20 million to $25 million low.

But this isn't the first time our Company has managed through a warm quarter, or even an unusually mild fiscal year. The culture at Compass Minerals is that we adapt our costs to the weather. I don't want to give you the impression that our cost structure is completely variable, because it isn't. Much of our cost is fixed. But we have the levers we can pull to moderate the effects of mild weather, and we know when and how to pull them.

In the fourth quarter, most of our winter weather typically comes in a relatively short time span during the month of December. So our response to weather may not always impact the fourth quarter, and that was the case this year. And because weather in January and February can't be predicted in December, we are also cautious about jeopardizing our ability to meet first-quarter demands.

So, we waited until year-end to take temporary staff reductions at both our North American rock salt mines and at our consumer deicing packaging plants. We have labor arrangements that allow for this flexibility on our singlemost significant mining costs. We have also slowed down discretionary spending until we have the results of the entire winter season. These actions will help more closely align our costs with our full winter season sales volume. And if demand becomes heavy in the last part of the season -- today's weather might be a good sign of that -- we can easily unwind these measures and resume more typical production volumes.

Though our 2006 full-year sales were down 11% year-over-year, our 2006 net earnings were up 6% when you exclude special items from our 2005 results. And our cash flow from operations improved 9%; I think that's pretty impressive. Better still, we feel confident that the improvements that benefited us in 2006 will continue to benefit us in the foreseeable future.

First, strong pricing across all our product lines significantly offset our reduced volumes. Then, there was the benefit of our refinancing of the 10% senior subordinated notes last December. That saved us more than $10 million in cash interest and helped us reduce our interest expense by roughly $8 million in 2006. Our 12.75% debt will be callable at the end of the year, and we expect that to give us another opportunity to strengthen our capital structure. And we had a significant reduction in our effective tax rate year-over-year as the result of beneficial tax planning that became effective in January of 2006.

The average price per ton of our North American highway deicing salt is about 10% higher in the '06/'07 winter than in the '05/'06 winter. The fourth-quarter average price increase for the entire product lines was 7% due to the higher percentage of chemical salt sales than was expected. For the full year, we saw an improvement of 8% in overall highway deicing product line pricing.

Mix effects also influenced the price of our consumer and industrial product lines. Lower sales in our consumer deicing products, especially our premium deicing products, skewed our consumer and industrial average price; yet we had an overall 7% year-over-year price improvement in our consumer and industrial minerals. Our non-deicing consumer and industrial sales volumes remained solid year-over-year. The overall year-over-year volumes declines of 17% in the fourth quarter and 9% for the year were due to depressed consumer deicing sales.

As a sidebar here, we've changed the name of our general trade product line to consumer and industrial. I wanted to make this change to better describe the products we sell, as well as the customers and applications we serve with that diverse group of products.

2006 specialty fertilizer prices improved 9%, or more that $25 a ton, which is principally the result of the $20-a-ton price increase that we good in February of 2006. Specialty fertilizer segment revenues were up, though volumes were down for the quarter and the year. We made the decision to maintain our pricing strength this year, which meant foregoing certain lower-margin sales opportunities. In addition, specialty fertilizer sales volumes were lower in the first two quarters of '06 due to the heavy rain in some of our most important California markets.

We had cost pressure in our specialty fertilizer segment due to increased costs for sourced potassium chloride. We use potassium chloride to produce some of our sulfate of potash as a way to stretch our pond harvest. This cost increase was the single largest contributor to the segment's fourth-quarter year-over-year decrease in operating margin. However, the operating margin for the specialty fertilizer segment was still up slightly for the full year.

Our most exciting fourth-quarter event was the acquisition of our joint venture partner share of DeepStore, our document storage business that utilizes mined-out areas of our rock salt mines in Northwest England. DeepStore sales for 2006 were $3.9 million, a 57% increase over 2005, as more and more new customers recognized the distinctive value that DeepStore can bring to them.

Then in early first quarter of 2007, we acquired Interactive Records Management, or IRM, which is a document storage and record management business with two locations in London. The acquisition of IRM was an important strategic move because it gave us a presence in the most important business center in the UK. We've found that London-based businesses are looking for total-solution storage services, which includes quick retrieval storage in the London area and secure long-term storage with one- to two-day retrieval service. We can now provide both, with our two new London locations for quick retrieval and DeepStore for long-term, uniquely secure storage.

This new document storage segment is not likely to meaningfully impact our earnings in the next few quarters, but we expect our IRM acquisition to be accretive in 2007, and we are excited about the opportunities this new segment presents.

Looking ahead to the first quarter and full year 2007, we have a number of opportunities and some challenges. Turning again to the weather, snow and ice in the first quarter of the year typically occurs from January through about mid-March and sometimes into April, so it is still too early to call the first quarter. The first two weeks of January were very mild, continuing the December pattern, and gave us a tough start. But winter recently arrived in our served markets and things have started to improve.

Currently, our first-quarter sales are still somewhat below normal winter levels. The recent snows are more like a normal winter pattern, but so far, they haven't been sufficient to offset the slow start to the quarter. But keep in mind that weather can change in an instant, and the rest of the quarter can be completely different from where we currently stand. Our job is to flexibly respond and to build value for our shareholders.

As we look at our first quarter comps, I want to remind you that March 2006 quarter was a mild quarter, and we estimated our sales were negatively impacted by about $45 million to $50 million compared to a normal winter period and suppressed fourth quarter '06 operating earnings by approximately $11 million to $14 million. We also had a $4.1 million business interruption insurance receipt that was recorded as a reduction of the cost of goods sold in the first quarter of 2006.

In the first quarter of 2007, we should see the initial effects of our announced $18 per ton average price increase of our consumer and industrial products that we discussed on our last call. The pricing impact should grow over the course of the year as contracts come up for renewal.

We also announced the price increase of our specialty fertilizer product last week. It is a $10-per-ton improvement that takes effect on March 1. And that will also be implemented as contracts come due throughout the year. This past fall, we had our first harvest from our expanded SOP pond, and we have implemented some strategies designed to strengthen our specialty fertilizer sales volume in 2007.

Returning again to 2006, it was an interesting year, as I first said. As we've discussed in the past, we evaluate the business on a weather-normalized basis in order to measure the performance of what is in our control. When we carry out that pro forma analysis on 2006, this is when we remove the benefit of the unusually severe winter from the '05 quarters and add back the sale loss to unusually mild weather in the 2006 quarters, we see that the underlying operating earnings of the business have grown.

This, along with the initiative to profitably grow the business, has influenced our confidence in the underlying normal weather strength of the Company. As a result, our Board of Directors has declared a first-quarter dividend of $0.32 per share, which is an increase from our prior quarterly dividend of $0.305 per share.

Now, I will turn the call over to Rod to discuss our financial results.

Thanks, Angelo. As discussed by Angelo, weather did play a significant role in our 2006 full-year and fourth-quarter sales. Maybe to help quantify the weather variance from normal, we did evaluate the winter precipitation data from 10 North American cities that span the geography we serve. The cities we used were Minneapolis, Milwaukee, Chicago, St. Louis, Detroit and Toronto, Cincinnati, Pittsburgh, Buffalo and Montreal.

From this information, we can tell you that the calendar year of 2006 had the least snowfall and the lowest number of snow days of the last 10 years. Only 1998 was similar, but not quite as mild, as 2006. This follows 2005, which had the highest number of snow days and the second-highest snowfall totals over that same period of time. We also looked at 10-year weather patterns for the fourth-quarter period of October to December and found similar results.

Our statistics also clearly illustrate that weather in one season doesn't foreshadow the weather the following year. Now, that is probably an obvious fact, but one that bears repeating in times of light winter precipitation like these.

As important is the pricing trend following these periods. The average price increase was similar in the winters following the years I just mentioned to years following severe weather. Remember that in North America, prices for highway deicing salt are determined by the lowest bid tendered for a community's winter business, regardless of the weather during the preceding year.

Now, I am not making a prediction or trying to provide guidance on the next bid season. Like every season, it will be influenced by a number of competitive factors. In addition to the weather impacts on sales, impacts of foreign exchange rates added just a little less than $2 million to our fourth-quarter 2006 sales.

Despite the substantial increase in barge rates that took effect at the beginning of 2006, our shipping and handling costs were modestly improved as a percent of gross sales in the fourth quarter of 2006 when compared to the 2005 period. And for the full 2006 year, shipping and handling costs were about even with the prior year on a percent of sales basis. This was due to the slight moderation of fuel costs late in 2006, leading to lower fuel surcharges year-over-year, and lower shipments of highway deicing salt, which tend to be a little more freight cost intensive.

Natural gas costs were up significantly in 2006. Higher natural gas prices impacted our costs by about $5 million when compared to 2005. We do expect flatter natural gas costs in 2007, and we enter the year with about two-thirds of our expected gas usage hedged at prices that approximate our 2006 commodity price.

As Angelo pointed out, another contributor to our modest gross margin compression in the fourth quarter was an increase in the cost of potassium chloride. Additionally, we sold less of our higher-margin highway deicing salt products, which impacts our average margin percent.

SG&A costs for the fourth quarter were down 9% from a year-ago period, and costs for the full year were down 5% compared to 2005. Interest expense was 14% lower in the fourth quarter of 2006 than the prior year, and 13% lower than the full year as a result of refinancing our 10% Senior Notes in December of last year.

In the fourth quarter of 2006, our Other income was $1.9 million, which primarily reflects foreign exchange gains, whereas in the fourth quarter of 2005, we had Other expense of $34.3 million, largely due to expenses associated with the tender for our Senior Subordinated Notes. For the full 2006 year, Other income of $4.1 million is largely due to foreign exchange gains and interest income.

Our tax expense for the quarter and the year was about $1 million below the comparable 2005 numbers, despite the higher pretax income in 2006. Our effective tax rate has continued to benefit from tax planning that was implemented very late in '05. And while our effective rate should be below U.S. statutory rates into the future, the rate will vary based on many factors, including the overall level of profitability of Compass and profits generated by our larger U.S. operations.

For 2007, we are expecting our effective tax rate to be several percentage points higher than our full-year rate in 2006. Conversely, we currently expect to pay several million dollars less in cash taxes in 2007 than we did in 2006.

Net earnings for the quarter were $23.6 million, or $0.80 per diluted share, compared with net earnings from continuing operations of $33.9 million or $1.05 per share, when you exclude the special items from the 2005 fourth quarter. For the year, net earnings were $55 million, or $1.69 per diluted share, compared with 2005 earnings excluding special items of $52 million, or $1.62 per share.

Our fourth-quarter EBITDA was $56 million compared to $43.1 million in the fourth quarter of '05, and fourth-quarter adjusted EBITDA was $54.8 million compared to the $77.4 million in the 2005 quarter, all reflecting the impact of mild winter weather. For the full year, our EBITDA was $164 million compared to $144.2 million in 2005, and adjusted EBITDA was $159.9 million compared to $182.9 million in 2005.

Depreciation, depletion and amortization was $40.5 million for 2006, and we expect about the same amount in 2007.

Capital spending for the year was $36.4 million, which is a little lower than we had planned earlier in the year. As we explained last quarter, we moved some capital expenditures from 2006 into 2007 to allow us to run the Goderich mine at higher production rates. We currently expect our capital spending to be about $40 million in 2007.

This level of spending reflects the completion of the underground mill at the Goderich mine, the near completion of the 750,000 ton expansion work at Goderich, a stepup in maintenance of business CapEx, and our focus on the document storage business as a new growth opportunity. The document storage business is projected to require capital spending of approximately $3 million in 2007 as we build out new rooms on our underground mine to accommodate planned growth.

We ended the year with substantially more inventory than in the prior year due to the contrasting winter weather effects. Our highway deicing salt inventories were almost 50% higher than a year ago. However, the year-ago level was much below normal due to severe winter weather in 2005.

Our year-end 2006 inventory levels resulted in the decision to scale back our deicing production in January 2007 that Angelo mentioned earlier. This is a way of balancing our inventory needs for the rest of the winter season. Following the winter season, we will reassess our inventory and our expected needs for the beginning of the next winter season. Since the producers in this industry hold the vast majority of the highway deicing salt inventories, we will adjust our production plans, if necessary, over the spring, summer and fall, to have the right amount of inventory on hand for next winter.

Our cash flows from operating activities improved 9% to $95.6 million in 2006 from $87.9 million in 2005. At December, 2006, we had $7.4 million in cash. We made $40 million of voluntary early principal payments on our term loan in 2006, including another $10 million during the December quarter.

Debt was $585.5 million at year-end 2006, compared to $615.9 million at year-end 2005. Our debt was comprised of $109.9 million of 12.75% senior discount notes, $152.6 million of 12% senior subordinated discount notes, $306.7 million on our term loan, and $16.3 million on our revolving credit facility.

Now I will turn the call back to Angelo for some additional remarks before we take your questions.

Thanks, Rod. There is no denying that we love snow and benefit greatly from the winter event in our served geographies. However, as you can see in the fourth quarter and in all of 2006, we have worked hard towards leveraging what we can control -- our cost structure, our selling price, our growth initiatives, and our investments. Our continued focus on these profitable growth drivers should make us even less seasonal, less winter-dependent in the future.

The fact that we showed a profit in the third quarter of 2006 for the first time since we became a public company encourages us that are strategy is working. We are excited about the opportunities we plan to pursue in 2007. We will focus on new, nonwinter applications such as pool salt, and new nonseasonal businesses such as document storage, while not taking our eyes off of our core businesses. We will also invest in these core businesses, most notably in the expansion of our Goderich, Ontario rock salt mine.

We will continue to consider accretive acquisitions, we will focus on operational excellence, and we expect to benefit from the pricing improvements we have already discussed. Now let's open the call up to questions. Operator?

(OPERATOR INSTRUCTIONS) Mike Judd from Greenwich Consultants.

Question about the tax rate. You said several percentage points higher year-over-year. If I look at what I this is your clean tax rate for '06, it looked like it was around 21.2%. First of all, hopefully that is correct. That's taking out the special charges and all that kind of stuff. So several percentage points, does that mean 23% or 25%?

Yes, it can -- Mike, it can vary with a number of factors. But I think we would be looking at more like mid to high 20s, rather than low to mid 20s.

Okay. And then secondly, I wonder if you could help me understand the impact of the higher inventories, both your inventories, as well as the customer inventories? I understand that you are going to reduce production levels. But how does -- what is the end result in terms of profitability? How does that flow through? How do you see that flushing out over the year? And really, I guess at this point I'm asking you to take a look, maybe, into the fourth quarter of this year, to try to -- to help us understand what you think the most likely scenario is there.

Well, you know, I think we don't know exactly where our inventory levels are going to end up at the end of the winter season. Let me say that first. The inventory at the end of year was definitely higher than last year, but last year was significantly below what we would normally expect to end the year with.

And just as a reminder, Mike, typically what happens is we adjust our production plans. And the channel isn't really stuffed with inventory because the producers are holding most of the inventory. That allows us to be more in control of how the inventory is placed, how many tons we want to bid on and be awarded.

And it's really a function of -- the bid season next year will really be a function of how many tons that we want to garner in the bid season. And we typically have not seen in this industry significant market shifts in terms of regional or total share in the market.

Now, certainly, what that means if we have normal winter the rest of the winter season, we would end up with higher inventories at the end of the winter season. That will mean that we adjust our production levels over the summer months, and take the higher production levels into account whenever we are coming up with our production for the rest of the year.

That will moderately pressure costs, but I would not call that a -- I would not say it is a significant pressure on our cost structure.

Okay, I think I understand where you're going with this. It is really more of a fixed cost issue. But also, I am trying to understand as to the impact of the warm weather in the calendar fourth quarter of '06, does that have repercussions in terms of profitability from a volume perspective in the fourth quarter of '07, just because the inventories are relatively high -- what is your thought about that?

Well, because our customers really hold on to very few -- very small amount of inventories, what the customers buy in the fourth quarter of 2007 will bear absolutely no relationship whatsoever to the fourth quarter buys in 2006. It will be a completely stand-alone period.

So our customers won't end March with any significantly different level of inventory at March this year that they ended March of '06. And it will be up to us to adjust our production levels to have the right amount of product in place at the beginning of next winter season. And the amount of sales in the fourth quarter of 2007 will be unaffected by the fourth quarter of 2006.

Okay, that's very helpful. Just one last quick question and I will get back in queue. With the document storage business, with the new London-based storage acquisition, is this something that you could repeat in other major capitals around the world, or is there something unique about what is going on in London?

Yes, this is Angelo. The geology of our mine in the UK is different than the mine in Louisiana or the mine up in Canada. We have been mining that Winsford mine for about 160 years. It has extremely stable geology. It is also, just based on the nature of the country, a smaller distance or a shorter distance between our mine and the financial center, in this case, London.

So I don't think the model is directly translatable, but we are going to ask those questions. We are very excited about creating the storefront now in London that can feed our Winsford mine. We will look at those opportunities in the U.S. and Canada, recognizing we are dealing with different mine assets and different locations of business centers.

And we will also look at the UK scenario, and see if we need other storefronts and how we can best leverage our Winsford asset that has just an unlimited amount of low-cost document storage capability in those mined-out sections.

Great. Thanks a lot for the help.

Mark Gulley with Soleil Securities.

Yes, good morning. How are you? I had a couple questions. One, with respect to the previous question, are there other cities in Europe, let's say maybe in the UK, or perhaps Amsterdam or something like that, where storefronts are going to be amenable to, again, the mine in Northwest England?

Yes, this is Angelo. We don't want to get ahead of ourselves on this. We are still figuring out exactly how to leverage the aboveground storefronts in London back to our mine. It gives us a nice, short- and medium-term storage option. So for the customer who wants documents the same day, we have London. And those who want it in a day or two, we have Winsford. There are probably other business centers or locations in the UK where that short- and medium-term model could work, and we will certainly think about those.

When you get beyond the Island of England, or the United Kingdom, it is hard to imagine giving short-term document storage and then have a one-or two-day retrieval. I think you are talking then about a longer model. And we haven't, frankly, explored that option yet. But it's certainly something we'll think about.

Back to the core business, I had a question regarding future expansions in Canada. You have already talked about the fact that you're expanding Goderich. I seem to recall that you're also considering what I might call greenfield sites as well for future expansion. Are you in a position to comment on that at this time, Angelo?

Well, I think what we said was we have a two-phased plan. Phase I was at our Goderich mine. It was a relatively easy, a relatively quick and a relatively lower-cost option. And we are in the middle of that and expect to have some of that for the upcoming season.

The second phase is a bigger bed for us. And in that phase, we are looking at broader options, still with an ability to serve the Great Lakes region with significant volumes at what we believe are advantageous costs. But we haven't yet concluded what option we are going to pursue.

So I would say not much has changed since the fourth quarter. Phase I is going ahead aggressively, will be somewhat in place for this coming season. And Phase II is we're actively evaluating several options, but not ready to announce any yet.

And a similar question with respect to the Great Salt Lake and SOP production there. You have expanded the production already, you announced price increases. Any further plans for expansion there with that high-profit, high-margin business?

Yes, I think it is a similar type of story to our rock salt business. I really like the SOP business. It gives us a business that is on a different cycle than our deicing business. It has a good market structure. It has some good pricing power available to us. It is an upsale of potash, meaning that we are selling value to customers who need it. And we have a terrific cost position with the Great Salt Lake.

So obviously, we are going to look at every opportunity to cost effectively stretch that asset in the Great Salt Lake. It is not an easy process; we are talking about vast geographies. We are talking about permits. We are talking about two- and three-year harvest cycles that can be disrupted by rain events during the evaporation periods. We also talked a little bit about utilizing potassium chloride as a way of extending our pond harvest, so that is another variable we play with.

But I believe that the SOP business is a growth business for us, although we did not show that in '06 for a variety of reasons. So we're going to push that business to develop strategies to properly grow the business. But our focus is not going to be just on volume; our focus is going to be on increasing operating earnings. So I am not disappointed with modest growth in volume, but strong pricing improvements.

Thanks a lot. That helps.

(OPERATOR INSTRUCTIONS) David Begleiter with Deutsche Bank.

Hi, this is James Sheehan sitting in for David today. Could you give us some color on why -- you commented that sales volumes for specialty fertilizer declined in the southeastern U.S. Could you just elaborate on that a little bit? What were the dynamics in that market?

Well, you know, the Southeast U.S. is a tobacco-focused area of the country in terms of the kind of crop that utilizes SOP. Tobacco crops tend to be a little chloride-sensitive. And while they can use the standard fertilizer, I think they flourish and benefit more from SOP. And the sales to that particular crop were down. So that would be the primary reason.

Okay. And then also, following up on potassium chloride, could you explain the structure for your contracts in potassium chloride? And where do you see the prices for this raw material heading in 2007, and what implications does that have for your specialty fertilizer margins, sequentially and through the year?

Yes, this is Angelo. That is a broad question. With the creation of Compass Minerals, there was a long-term strategic agreement that was established between Compass Minerals and former parts of IMC, now Mosaic, on the sourcing of potassium chloride. They are long-term agreements. They are advantageous to market price. They do move with the market, but they move somewhat with a lag.

And the potassium chloride is used to extend our natural harvest of SOP from the Great Salt Lake. So by utilizing potassium chloride in our manufacturing process, we can get more SOP out of the harvest.

So there are a number of factors that go into place. To give you kind of some color around potassium chloride, that is really the same product as potash, or muriate of potash or KCl. They all go under the same name. And I believe there was some recent settlements in the marketplace with China, who is one of the big buyers of MOP, at $5 higher for 2007 than 2006.

So there is good news and bad news in that. And the good news part of it is that the MOP or KCl or potassium chloride, whatever you want to call it, pricing, provides a foundation above which SOP operates. The pricing is not directly related. You can't plot one versus the other; they don't move in lockstep. But when MOP pricing goes up, it is a good platform for us to raise SOP pricing, and you can see we have raised our prices by $10 a ton.

On the flip side, our sourcing of KCl, or potassium chloride, will ultimately go up as the MOP or KCl market price goes up. So we are going to see increased costs in our KCl, as Rod described.

So we're going to watch that equation. If KCl or potassium chloride costs were to get too high and the incremental production of SOP is not profitable for us, we always have the option of cutting back on that sourcing and optimize the profitability of our SOP.

So there isn't a standard answer. We always prefer SOP that comes out of the pond. The second source, the second mechanism is for incremental production. It does give us growth, but that growth is at a lower margin, and that margin will get compressed as KCl costs go up. But also as KCl costs go up, we normally are able to increase the SOP price at least as much.

So it is a complicated equation, and I hope I didn't confuse everyone by that long answer.

Thank you very much. And also, could you also comment on the mix of non-deicing uses of salt and where do you see that heading?

Yes. Salt, someone told me once, has thousands of potential applications. We are only in a dozen or so applications for salt. The big one is our deicing businesses, which are approximately 50% of our revenues on a worldwide basis. So about 50% of our revenues are deicing; the other half are non-deicing applications.

So we love our deicing business, it is a very profitable piece of our business. But we focus strategically on trying to grow our nonwinter, non-deicing, nonseasonal segments.

So I think the activities that you have seen in our SOP expansion, the activities you have seen in our acquisition first of the DeepStore assets from our joint venture partner, the acquisition of our Interactive document storage business. I think we have announced or we are talking about expansion of sales into pool salts. Growing those nonseasonal, nonwinter applications products businesses gives us, I think, a very nice and profitable internal hedge to the deicing segment, which, as we have talked about on this call, is very dependent on winter weather.

So we love them both. We are going to grow them both. But again, accelerated growth in nonwinter, non-deicing I think is a good thing for our Company, and we are pursuing that aggressively.

James, if I could just add to that. You asked specifically about the non-deicing salt. And you'll notice that the change in our consumer and industrial product lines year-over-year declined about 140,000 tons. That was entirely due to deicing volume. Excluding deicing volume, our volumes in the nonwinter, non-deicing product lines within that group increased almost 3% year-over-year.

That's very helpful. Thank you very much.

Thank you so much for your questions today. And with that, I will turn the conference over to Mr. Brisimitzakis for any closing remarks.

Great. I don't have much to add. Thank you again for joining us today. I look forward to talking to everyone again after the first quarter. Have a good winter.

This concludes today's Compass Minerals fourth-quarter conference call. You may now disconnect.