Compass Minerals International (CMP) risk factors, FY2024 10-K

Risks Related to our Restatement and Internal Controls

1. 01A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected in a timely basis

Operational Risks

1. 02Our mining and industrial operations can involve high-risk activities
2. 03Geological conditions could lead to a mine shutdown, increased costs, production delays and product quality issues, which could adversely affect results of our operations
3. 04COMPASS MINERALS INTERNATIONAL, INC
4. 05The results of our operations are dependent on and vary due to weather conditions. Additionally, adverse weather conditions or significant changes in weather patterns could adversely affect us
5. 06Operations at our Ogden, Utah, facility are dependent on ambient brine from the Great Salt Lake, and changes in lake brine levels or any limitations on our continued ability to access ambient lake brine in the Great Salt Lake could adversely affect us
6. 07Our operations are conducted primarily through a limited number of key production and distribution facilities, and we are also dependent on critical equipment
7. 08Our business is capital intensive, and the inability to fund necessary capital expenditures or successfully complete our capital projects could have an adverse effect on our growth and profitability
8. 09We face numerous uncertainties in estimating our economically recoverable reserves and resources, and inaccuracies in our estimates could result in lower than expected revenues, higher than expected costs and decreased profitability
9. 10Strikes, other forms of work stoppage or slowdown and other union activities could disrupt our business and negatively impact our financial results
10. 11Our production processes rely on the consumption of natural gas, electricity and certain other raw materials. A significant interruption in the supply or an increase in the price of any of these could adversely affect our business

Financial Risks

1. 12Our indebtedness and any inability to pay our indebtedness could adversely affect our business and financial condition
2. 13The agreements governing our indebtedness impose restrictions that may limit our ability to operate our business or require accelerated debt payments
3. 14We are subject to tax liabilities which could adversely impact our profitability, cash flow and liquidity
4. 15Canadian provincial tax authorities have challenged our tax positions and assessed additional taxes on us, which are described in Part II, Item 8, Note 10 to our Consolidated Financial Statements. These tax assessments and future tax assessments could be material if the disputes are not resolved in our favor
5. 16Some of our customers require access to credit in order to purchase our products. A lack of available credit to customers, due to global or local economic conditions or for other reasons, could adversely affect demand for our products and the sales of our products
6. 17We are subject to financial assurance requirements and failure to satisfy these requirements could materially affect our business, results of our operations and our financial condition
7. 18We ceased paying cash dividends in fiscal 2024; any future cash dividends will be at the discretion of our board of directors and other factors
8. 19The demand for our salt, plant nutrition and fire retardant products is seasonal, and the degree of seasonality can change significantly from year to year due to weather conditions, including the number of snow events, rainfall, drought and other factors
9. 20Anticipated changes in potash prices and customer application rates can have a significant effect on the demand and price for our plant nutrition products
10. 21Our products face strong competition and if we fail to successfully attract and retain customers and invest in capital improvements, productivity, quality improvements and product development, sales of our products could be adversely affected
11. 22Inflation could result in higher costs and decreased profitability
12. 23Increasing costs or a lack of availability of transportation services could have an adverse effect on our ability to deliver products at competitive prices
13. 24Risks associated with our international operations and sales and changes in economic and political environments could adversely affect our business and earnings
14. 25Conditions in the sectors where we sell products and supply and demand imbalances for competing products can impact the price and demand for our products

Legal, Regulatory and Compliance Risks

1. 26Our operations depend on our rights and governmental authorizations to mine and operate our properties
2. 27Unanticipated litigation or investigations, or negative developments in pending litigation or investigations or with respect to other contingencies, could adversely affect us
3. 28We are subject to EHS laws and regulations which could become more stringent and adversely affect our business
4. 29We could incur significant environmental liabilities with respect to our current, future or former facilities, adjacent or nearby third-party facilities or off-site disposal locations
5. 30Compliance with import and export requirements, the FCPA and other applicable anti-corruption laws may increase the cost of doing business
6. 31We are subject to costs and risk associated with a complex regulatory, compliance and legal environment, and we may be adversely affected by changes in laws, industry standards and regulatory requirements
7. 32We may face significant product liability claims and product recalls, which could harm our business and reputation
8. 33Our intellectual property may be misappropriated or subject to claims of infringement

Strategic and Other Business Risks

1. 34We may not successfully implement our strategies
2. 35Our business is dependent upon personnel, including highly skilled personnel. A labor shortage or the loss of key personnel may have a material adverse effect on our performance
3. 36If our computer systems, information technology or operations technology are disrupted or compromised, our ability to conduct our business will be adversely impacted
4. 37Climate change and related laws and regulations could adversely affect us
5. 38We may not be able to expand our business through acquisitions and investments, and acquisitions and investments may not perform as expected. We may not successfully integrate acquired businesses and anticipated benefits may not be realized
6. 39Acquisitions and investments involve significant risks and uncertainties, including diversion of management attention, greater than expected liabilities and expenses, inadequate return on capital and unidentified issues not discovered in our due diligence
7. 40Outbreaks of contagious disease or similar public health threats could materially and adversely affect our business, financial condition and results of operations