Compass Minerals International Inc (CMP) 2014 Q1 法說會逐字稿

Good day and welcome to the Compass Minerals first-quarter earnings conference call. Today's conference is being recorded. At this time I would like to turn the conference over to Mr. Peggy Landon. Please go ahead, ma'am.

Thank you, Jennifer. And thank you all for joining us this morning. I have with me here Fran Malecha, our President and CEO, and Rod Underdown, our CFO.

Before I turn the call over to them, let me remind you that 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 expectations as of today's date, April 29, 2014, 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' recent Forms 10-K and 10-Q. The Company undertakes no obligation to update any forward-looking statements made today to reflect future events or developments.

You can find reconciliations of any non-GAAP financial information that we discuss today in our earnings release, which is available in the investor relations section of our website at compassminerals.com.

Now I will turn the call over to Fran.

Thank you, Peggy. And good morning, everyone. I am happy to report that strong demand drove improvement for both of our businesses in the first quarter, and lifted total Company sales 10% above prior-year results, while net income rose 8%. Adjusted EBITDA increased slightly from the prior year to $85.4 million as our EBITDA margin fell to 20% from 22% due to lower highway deicing prices, which I will discuss shortly.

I'm sure many of you experienced the severe winter weather throughout our core North American service area this winter, as snow events were substantially above long-term averages. This fueled a 9% increase in highway deicing sales volumes and the highest salt sales volume since 2008. Mild weather in the UK, however, hampered our ability to equal or surpass that record for our entire salt business.

Highway deicing revenue increased 2% above the prior-year quarter as our average selling price for these products fell 6% due to the lower contract pricing that was established during last summer's bid season. We incurred some additional costs from serving our customers during this extreme frigid winter.

Winter weather also had a very positive impact on our consumer and industrial business. We sold 22% more tons of these products this quarter compared to last year. This is the second quarter we have reported 20%-plus year-over-year growth, and reflects the influence of winter weather on sales of our consumer and professional deicing products.

Just like in our highway deicing business, we believe packaged deicing inventories at the customer level have been cleared out and a return to more typical weather-driven sales patterns will occur later this year. So, our current expectation for this portion of the salt business includes solid volume growth of 10% for the second quarter. And we are optimistic that customers will place early orders for packaged deicing products later this year in preparation for next winter.

Looking forward for the highway deicing business, this past winter certainly appears to have cleared the inventory overhang from the two prior mild winters at both the customer and producer levels throughout the North American market. We expect that this will trigger a significant increase in the volumes requested by customers during the summer highway deicing bid season. At the very least we expect to return to levels we achieved three years ago, though it could even be higher. Very few bid requests have been issued thus far so we can't quantify the expected total market volume increase at this time, but our expectations are for at least a 10% improvement.

In addition, we won't talk specifically to projected pricing without having actual bids completed. If we step back and look at history, pricing for the industry is a long-term growth rate between 3% and 4%. The price change for any given year rarely falls on that trend line as the weather experience of one winter often has a directional influence on where price lands for the next winter.

So, while we are optimistic about the improved market dynamics for this coming bid season, we will not be able to make definitive comments on price until later in the summer. Thus, I will limit the discussion of our salt segment outlook to the second quarter. We expect salt volumes to increase 10% from last year's results, but our average selling price is expected to continue to trend about 4% lower, similar to the results we reported in the first quarter, as we experience the final effects of the prior bid season. As a result, we expect a segment operating margin of 9% to 10% in the second quarter.

In our speciality fertilizer business we have several positive developments to note. First, solid demand for our sulfate of potash continued in North America. Our sales volume total of 107,000 tons marked a first-quarter record for domestic sales volumes. And the segment revenues we generated were a first-quarter record, as well.

Our average selling price of $616 a ton was essentially unchanged from the prior year. And demonstrated again that we have been successfully marketing the value of our SOP that it provides in terms of improved yield and quality. With a strong start to the year, we have raised our full-year outlook for SOP sales volume by about 20,000 tons to range between 370,000 to 390,000 tons. An specifically in the second quarter we expect to sell 90,000 tons, and expect our second-quarter average selling price to increase sequentially to $635 per ton.

We expect per unit SOP costs to hold steady with first-quarter levels, which should yield an operating margin between 25% and 27%. We have continued to augment our production with supplemental KCl to improve selling volumes, and to continue our steady growth in the North American market. While those incremental sales are at attractive margins, this has and will suppress our near-term operating margin percentage.

We are producing more tons at our Ogden operations than we ever have from pond-based feedstock, but still have lower yields than designed which elevates costs beyond what we had expected. We continue to pursue a variety of process improvement to restore yield rates and ultimately lower costs. We will provide further updates on this as we progress.

We're also excited to have completed our acquisition of Wolf Trax on April 1. This addition to our Company allows us to expand and strengthen our portfolio of plant nutrition products.

Wolf Trax has been an innovator in the micronutrient market by offering technology-driven products with a strong value proposition to retailers and growers. Their unique dry dispersible power nutrients provide superior uptake by crops, and allows retailers and growers flexibility in marketing specialty prescription blends to match soil and crop needs. And the unique formulation of the nutrients allows the growers to use smaller amounts in their applications than competing products.

We look to build on the existing platform of Wolf Trax' products with several new products scheduled to launch later this year and next year. And there are others in the pipeline. We expect Wolf Trax to be accretive to earnings during the next 12 months.

Our acquisition of Wolf Trax and entry into the micronutrients market is the first step in our strategy to expand and balance our speciality fertilizer revenue stream. We continue to evaluate the proper scope and capital requirements for an expansion of our SOP production capability at the Great Salt Lake. We intend to develop an expansion strategy that matches the needs of the SOP market as we fine-tune our operations there. When we consider any potential expansion project we would pursue, we continue to believe that the scalability of our Ogden operation and our proven technological approaches are the best at preventing significant market disruption.

Now I will turn the call over to Rod for a closer look at our financial results.

Thank you, Fran. I will start this morning with a recap of our salt segment results where, again, we believe the winter provided a pivot towards better business dynamics for the remainder of 2014.

As Fran discussed, the strong winter weather demand pushed total sales up 8% to $353.2 million. This improvement resulted from higher deicing sales volumes of both highway and consumer uses for salt. These higher volumes also helped to lower our per unit operating costs from the prior year despite the impact of a negative mix on that metric.

Salt operating earnings for the quarter were modestly lower than in the first quarter of 2013. And, as Fran mentioned, by far the most significant factor in the limited earnings leverage from the higher sales volumes was the lower average selling price for our highway deicing salt.

The prices we achieved this quarter were established during the bid season last year and reflect the impact of two consecutive mild winters. Those bid results will continue to influence our average selling price through the second quarter. In addition, the first-quarter highway deicing price was negatively impacted about 1% by weakness in the Canadian dollar.

A few other factors also impacted our salt segment earnings. We incurred incremental costs due to extreme winter conditions, including about $2 million for some contractual service shortfalls. And the year-over-year increase in sales of consumer deicing products improved our operating earnings, but had a compressing impact on our reported operating margin percentage.

Now, these products have higher prices but also higher costs. Last year, consumer and industrial sales represented about 11% of salt sales volumes, while this quarter they represented 16%.

Every winter quarter, as most of you know, we report the estimated impact of deviations from normal winter weather on our sales and earnings. This quarter we estimate that above average winter weather conditions contributed about $40 million to $50 million to salt segment sales, and $8 million to $12 million to our operating earnings. Both of these estimated impacts are larger than last year's first-quarter impacts, and reflect many factors including the role of awarded volume and pricing from last year's bidding.

And, as always, I like to remind everyone that we use a consistent methodology from year to year for these calculations. We use long-term data to analyze highway deicing sales volumes deviations from contractual commitment volumes, as well as actual sales in comparison to average consumer and commercial deicing volumes.

Before turning to speciality fertilizer I'd like to give a few details around the salt segment guidance Fran spoke of moments ago. We do expect strong sales of consumer and industrial salt as the demand for packaged deicing products is likely to remain robust, and retailers look to restock inventories after such a severe winter. This will have a more significant impact on the second and third quarters than it will the fourth quarter, which is more driven by in-season winter weather demand.

We do expect to run salt operations at or near capacity, which should further improve our salt costs. We're expecting a higher relative portion of salt sales to consumer and industrial customers later this year. And this product mix change will increase both our salt segment average per unit cost and price in the second half of 2014.

So, our outlook for the second half of the year does remain positive, but we can't quantify the highway deicing expectations until we get further into the bid season. But to put our current thinking on expected volume increases into context, I'd like to take a moment to recap the recent history of bid season results.

The summer of 2011 was really our last normal deicing bid cycle, although for us it was somewhat curtailed at the end by the Goderich tornado that year. As the winter of 2011-12 unfolded, it proved to be one of the mildest on record in North America. And for the first time since I have been at Compass we were talking about significant and unusual carryover inventories at the customer level.

As a result, customer bid requests in the 2012 bid season fell dramatically, around 20%. Average pricing for these contracts declined 2%. When you factor in the combined bid volume reduction with higher than normal producer inventories that existed coming out of that 2011-12 winter, we were somewhat pleased with a 2% lower price result.

Then the winter of 2012-13 season got off to a very slow start, but it did end strong last year. Still, snow events for the full season remained below long-term averages. So, not all customers had worked through their salt inventories and the supply demand for deicing salt remained imbalanced entering the 2013 bid season.

While we did achieve a partial rebound in bid volumes, we did not return near the 2011-12 levels. And the average price, again uncharacteristically, fell another 3% for us due to, in our view, that continuing imbalance.

What makes us optimistic this year is that the severe winter has now depleted essentially all customer inventories. So, municipalities, counties and states should increase their bid volumes to be prepared for next winter. We expect that requested bid volumes will recover at least 10% to the 2011-2012 levels, at a minimum. But whether or not they move above that will only be known when a significant number of bid requests become available, well into the bid season.

We also experienced in the past a fully depleted inventory situation throughout our core North American markets, that it does put a strain on the existing capacity of salt mines to supply the market-wide bid season requests. In our view, that was the primary factor supporting healthy price gains we achieved in the bid seasons of 2008 and 2003, both of which followed severe winters.

Now turning to the speciality fertilizer segment, sales increased 22% to $69.5 million. Strong seasonal demand pushed sales volumes to 107,000 tons, up 22% from the first quarter of 2013, while our average selling price remained steady with the prior-year quarter at $616 per ton.

Unfortunately, higher per unit costs this quarter compared to last year pressured our operating margin. As a result, the speciality fertilizer segment earnings of $16.3 million, or about 6% above last year. The higher Q1 costs largely resulted from our decision to purchase KCl in order to increase our production at the Great Salt Lake through a process that is unique to this facility. We began converting potassium chloride into SOP last year in the third quarter of 2013.

And, as we've discussed in the past, this is a higher-cost production method. But at the current price difference between SOP and MOP it makes solid economic sense for us. In addition, it has allowed us to fully serve the growing demand in the domestic market that resulted from the customers' knowledge of the value of SOP.

It is important to note that we are producing record levels of SOP from our pond-based feedstock now in Ogden. And our solar pond-based unit costs were below prior-year costs in the first quarter. We expect to see further improvements in per unit costs as the year progresses, which should provide a lift in operating margin percentages later in the year. And we continue to expect that our full-year per unit operating costs, including increasing amounts of KCl conversion compared to prior year, will decline.

In addition, the Wolf Trax acquisition closed April 1. Due to the acquisition and purchase accounting allocations, we do not expect any accretion in the second quarter. We expect the Wolf Trax acquisition to make contributions to earnings in the second half of 2014.

Now, before closing I'll discuss some other items influencing our income statement. Interest expense for the quarter held steady at $4.4 million. We reported other income this quarter of just over $3 million as a result of foreign exchange gains, primarily due to the weakening of the Canadian dollar.

Our tax rate for the quarter was 24%. And for the full year we expect a rate of approximately 25%. Higher collections from seasonal deicing sales and other noncash working capital changes pushed cash flow from operations 25% above prior-year results.

We invested $25 million of capital expenditures to maintain our assets, and we expect around $75 million for the remainder of the year. This does exclude the investment in Wolf Trax which we funded with cash on hand.

Depreciation and amortization totaled $18.4 million, within the range of our guidance. We do expect a similar quarterly rate for the remainder of the year excluding any incremental amortization of Wolf Trax' assets.

And, lastly, our corporate and other expenses was $12.8 million in the first quarter compared to $13.3 million in the year-ago quarter. We continue to expect full-year corporate and other expenses of about $50 million.

With that, I'll turn the call back to the operator for our Q&A session. Jennifer?

(Operator Instructions)

Chris Parkinson from Credit Suisse.

Perfect, thank you. It's fairly clear that a lackluster winter in the UK held your volumes back on the salt front. Can you give us a little more color on the year-over-year comps in this business? And also how this fits into your intermediate- and longer-term outlook over the next year or so? Thank you.

Sure. Thanks, Chris. We've always described our UK business as about 10% of our highway sales, or about 1 million tons, roughly. And most of that in a typical year -- I should say most, but a large percentage of that would be sold in the first quarter. It was very mild in the UK and sales were very low there.

The good thing about the UK is that there is no really carry forward into the next winter. So, to the extent winter returns in the fourth quarter next year we would expect volumes consistent with a normal year there. So we don't expect any long-term effect. And the bidding market is a bit different there, so it shouldn't have any long-term repercussions.

Perfect. Thank you.

Chris Shaw from Monness Crespi.

Good morning. How are you doing? I was reading -- it was just an anecdotal example of one town was talking about their upcoming bid for the next season. And one thing they mentioned was that they were shrinking the range. So, instead of 80% to 120%, they were going to do 90% to 110%. I forget the exact reasoning. Is that something you think could happen more with customers this year? And have you seen that happen in past years following tough winters, 2008, 2003?

This is Fran. I think every state is a bit different on those percentages, and may have a different view on the risk/reward of maintaining those ranges. I don't think we'll see a material shift on that in the year ahead. And with the winter that happened and depletion of inventories, and what can happen in a real severe winter, I doubt that our customers would be looking to narrow those ranges at all.

This town was suggesting it's a benefit to them. I couldn't remember what their exact reasoning was. Do you see benefits for them? Do you think it actually works for them to do that?

I think it allows them the flexibility, given the variability that can happen with winter, to manage their requirements. And so I would expect it to, across the board, across our geography, to remain unchanged. It doesn't mean that you wouldn't have a community or municipality that might have a different view. Every municipality out there has different storage capabilities and things like that that may impact their specific needs or requirements.

Just curious if, for the narrower ranges, would that be something that you would typically, all other things being equal, something you would bid lower for? A tighter range, I would think, would be favorable for you guys, right?

I think a tighter range would be favorable for us if you just looked at that one component. I think you're right there. Obviously the risks that we have to produce to those maximums, there is a cost to that. There is a cost to carrying larger inventories through the system.

But that cost is offset by the benefit of having those stocks there, if and when needed. So, I think it all gets down to risk/reward. And I think we always are mindful of that and want to make sure that we are pricing the business commensurate with the risks that we are taking.

Great. Thank you.

Ivan Marcuse from KeyBanc Capital Markets.

Good morning. Thanks for taking questions. If you look at your mines, you talked about how you're going to be able to run your salt mines full out for 2014. If you look back at 2009, after the 2007, 2008, you were in this $29 per ton unit operating cost. Is that how to think about -- and I assume you are running it full out there -- is there anything different comparing 2009 to today? Or how would you expect unit operating costs to trend relative to that?

Sure, Ivan. I think a couple of things there. Of course, there has been some inflationary factors that you would want to factor in.

The other thing that I mentioned in my remarks, we've mentioned in our remarks, is that we expect, just in a normal winter, average winter situation for the rest of the year, that our consumer and industrial products are going to become a larger percentage of the mix. And that's because really highway sales are more driven by whatever the winter events result or require for our customers. The consumer deicing business becomes one more of an early restocking and retailers and others getting ready for winter.

And, so, the timing of sales for the winter and for preparation of the winter does vary between the consumer deicing customers and the highway customers. So, I mentioned in my remarks that we expect a positive impact on average price from that mix but there is also a higher average cost associated with that. Having said that, we do expect that if we were to break down costs by sub segment within the rock salt and the consumer salt we expect lower costs year over year.

Got you. But all in you would -- I will just follow up with you after the call in regards to that. And, then, as a follow up, if you look at your -- on the Wolf Trax acquisition you mentioned that this is your first step in further expanding your fertilizer business. Do you look at doing other type of Wolf Trax type of acquisitions that may be outside of SOP going forward? And also as a part two of that question, does your 25% to 27% margin in the fertilizer for the second quarter, does that include the impact of Wolf Trax?

Sure. This is Fran. When we look at Wolf Trax, it actually was an acquisition that is still a speciality fertilizer business with a margin profile that's equal to or better than our SOP business. But it gets us on more acres, gets us on different crops, expands our geography.

At the same time, we think there is opportunity to include that technology on SOP blends and create more value for our current customers, or allow us to extend our reach on these crops that we are currently meeting customers' needs on. So, it's a great fit from that standpoint.

We are just a month into this business but already hitting the ground running and working on some of those things that I just mentioned in terms of SOP blends and what-not. So, positive for us to expand this business. And if there's other acquisition opportunities out there we would consider them.

That micronutrient space is fragmented. And so the real driver, from my perspective, is the technology and the differentiation the technology brings to the customers. And Wolf Trax we felt was the best at that in the industry.

We can build on that organically, and we plan to, to continue to drive increased sales and do more business. If there is other acquisition opportunities that fit we'll consider them at the appropriate time.

And in terms of the -- Rod may want to answer the question on the margin percentage.

Yes, Ivan. And that guidance would be including both our historical SOP business as well as the Wolf Trax business combined.

And that includes the costs associated with the acquisition, the one-time acquisition costs?

Yes, that's right. The accounting effects that we must take into account, yes.

Great. And then the last quick question, on the EBITDA of Wolf Trax, I think you said it was around $8 million, or expected to be $8 million, in your presentation. How much of that is dock?

We are in the process of finalizing our accounting purchase allocation there, and, so, we aren't in a position to really talk about knowing that exact figure at this point.

Great. Thanks.

Mark Gulley from BGC Financial.

Fran, you may have already addressed in connection with the question regarding future acquisition in micronutrients. But I'm wondering, I know it is early days, there has been a bit of a windfall in terms of earnings from the prior three quarters affected by the winter and the upcoming one. Have you thought about maybe returning, in terms of return of capital to shareholders in the form of share buy back, perhaps turning some of that what I will call windfall over to shareholders?

Sure, Mark, thanks for the question. First off, I would say I don't necessarily consider it a windfall. We look at our business as being maybe suppressed in salt for the last couple years, and getting back to more normal, driven by this above-average winter. So, we expect that we'll continue to drive earnings and cash flow going forward appropriately.

Having said that, in terms of our approach on allocating capital and investments, as I am sure you know, we have increased our dividend every year over the last ten years. And just recently did that again this past year. And, so, that's the top of the pyramid as we look at uses of cash.

And then we look at internal investments, and after internal investments, acquisitions that are accretive. And all those investments have to meet or exceed our cost of capital. Then after that we would look at ways to return cash to shareholders through other means.

So, the hierarchy is in place. When we look at investments, we always are mindful and compare that to returning that cash to shareholders. So, I don't anticipate any change in our approach. We're going to be disciplined in our use of cash and make sure our analysis is sound. And then we're going to act decisively to deploy the cash.

Thanks. And then this is the most optimistic you have sounded about the Great Salt Lake operation in some time. Yields are getting better. You have increased your guidance for shipments. So, this is a fairly positive backdrop. Are you any closer to making a decision on expanding pond capacity?

We continue to feel real good about the business that we're building here. And as you mention, the demand increase, the volume increase for us is really driven by our approach with customers, and achieving more value for them and the value then that we achieve from our products. That continues to build over time, I think in a sustainable way.

And as we build those volumes, we certainly think there is an opportunity to convert those volumes from the interim step, from my perspective, of upgrading KCl to the more permanent through our SOP process. So, we're moving that forward and certainly getting, I think, closer to a decision on that.

I think, as we've talked in the past call or two, it doesn't have to be just a one-time large uptick. It can be staged, as well. And, so, we want to make sure that we get that right.

And then, as I said earlier, once we make the decision we'll move quickly to employ whatever decision we make. So we're confident in the way we're building this business. And think that we certainly have the best opportunity with our process at the Great Salt Lake to continue to match capacity with that demand growth.

Thank you.

David Begleiter from Deutsche Bank.

Thank you. Fran, in highway deicing, how do you think about market share and in terms of how it's been trending? And how are you looking at this upcoming year in terms of balancing, perhaps getting back to the share versus pushing price?

I think over the last probably three or four years now our share has been declining. And certainly over time we plan to [quall] that share back, and do that in a disciplined way. I think we have probably lost 1% or so share of the market over the last four years to five years, and our plans are to quall that back.

This year is going to be interesting because most likely the market's going to be challenged to produce and supply all the salt required. And, so, as we get into the bidding season obviously we're going to manage that closely. And just with the increase in volumes we may or may not see a change in our market share this year.

And we're always managing price and share and volume effectively, from my perspective. We want to make sure over the longer term that whatever pricing increases do transpire that we can keep that and then build share over time.

Given the attractive market in the US for deicing, do you expect to increase imports into the US? I know they mainly come onto the coast. Do you think they could impact your region?

There may be slight increases in imports into the US. Most of those are going to come into the eastern seaboard, which had a real strong winter, as well. There could be imports into other parts of the US, but I think it will be limited.

Thank you very much.

Joel Jackson from BMO Capital Markets.

Hi. Good morning. If we look out to the next year starting in the third quarter, what percent of your highway deicing sales would you guess are locked up on your chemical salt sales and your multi years? I am trying to get at what percent will be exposed to that highway deicing bid season.

Joel, we really haven't seen a big change in our chemical business. That runs roughly 2 million to 2.5 million tons per year, and it's roughly consistent quarter to quarter. There can be variations. So, that's the amount that we would expect to sell in the chemical.

I would say, I would guess, I don't have the number at my finger tips but I am just guessing based on, obviously, some knowledge of that, that the multi-year highway contracts probably represent a little less than 10% of total highway volumes. So, that wouldn't be much of the available potential winter sales that we expect.

Okay. So, basically if I do that with the UK -- the multi-years, the chemical salt -- it's something like 40% to 45% that's not exposed to bid season, correct?

In the UK there are some multi-year contracts there. There is fewer in North America. So, if you think about our chemical business being about 2 million to 2.5 million tons, and about 10% of the rest being multi-year, I don't think you would get to 45%.

Okay. And the second question I had was back on the SOP business. You've had great volume in Q1. The premium over MOP has basically done quite well. How do you look at this, in the performance how much of this comes from the fact that Tessenderlo has continued to have significant challenges in their production in Europe, and has hurt their exports or their imports to the US?

It's true that imports to the US are down. And it's hard to speak to any one competitor. But I'd suspect that we're enjoying the fact that there are other markets that some of the offshore production is securing.

I think we have continued to focus on North America because it's the best netbacks for us. And we have been fortunate to be able do that and really reduce the amount that we have exported over the past two or three years.

The production is shifting, I think, to meet that demand. It's just hard to say that the customer or the competitor that you mentioned, what that real impact is.

I am trying to get at -- and I now recall, of course, Cape [pluses] had production challenges, too, one of their operations -- if you're seeing stronger SOP demand in North America, or if you are being able to take share from some production problems by some offshore competitors?

I would say it's probably some of both currently.

Thank you.

(Operator Instructions)

Edward Yang from Oppenheimer.

Hi. Good morning. Fran, maybe just elaborating further on the SOP pricing. The price spread that you are getting for your speciality fertilizer verses commodity KCl, that continues to widen. Looking at it from a longer-term perspective, a year from now, two years from now, what do you think will be the driver of SOP prices? Do you think that it will recouple back to MOP and that spread that you normally get?

I think it's longer term more really a function of the economics of the crops that we're supplying, the customers' economics on those crops and the additional value that, if they're able to capture, that SOPs bring to the table. Sure, there's always going to be some substitutability. And I think on the production side some capacity for offshore producers to produce a bit more SOP than MOP and compare those economics.

But in North America we're really the only producer here. I think it's going to be more of a function of what I would call a basket of the economics of the crops, the basket of crops, that we're serving, more so than the absolute spread to MOP.

And on the supply side, are there any arbitrage opportunities, near to intermediate term, in terms of weather producers that take advantage of the margin in that business? Why aren't more producers upgrading KCl? Or what are some of the practical constraints there?

I think it's difficult to do that effectively. I think our process is the most effective certainly in this part of the world to do that. And so we're trying do as much of that as we can to meet that demand.

I know the Mannheim process that's probably the most prevalent out there comes out quite a higher cost than our production process. I suspect there is some shift going on, as well, as we have probably exited even some lower netback North American markets, and that move to higher netback markets more in the West where our plant's located that may have created some opportunity in the eastern side of the US for imports.

But, other than that, I don't think it's that easy to make this stuff. And I think even some of the projects that are out there, that have been talked about in various stages of trying to bring into the market, they come with unproven technology. And, so, we feel like we have the -- even though we have talked about some challenges with our yields -- the lowest-cost proven technology at the Great Salt Lake.

Thank you.

That concludes our Q&A session. I will turn the call back over to Ms. Peggy Landon.

Thank you, Jennifer. And thanks to everyone for joining us today. We'd also like to invite you to listen to our live webcast on June 4 when we'll be providing a more in-depth review of our strategy at our investor day. You will find details about this event on our website in a couple of weeks. Again, thanks for your time today, and have a great day.

That concludes today's call. Thank you for your participation.