COMPASS MINERALS INTERNATIONAL INCCMP
COMPASS MINERALS INTERNATIONAL INC Commitments Disclosure
COMMITMENTS AND CONTINGENCIES
Contingent Obligations
The Company is subject to legal and administrative proceedings and claims of various types from the ordinary course of the Company’s business. If management believes that a loss arising from these actions is probable and can reasonably be estimated, the Company records the amount of the loss or the minimum estimated liability when the loss is estimated using a range and no point is more probable than another. As additional information becomes available, any potential liability related to these actions is assessed and the estimates are revised, if necessary.
Management cannot predict the outcome of legal claims and proceedings with certainty. Nevertheless, management believes that the outcome of legal proceedings and claims, which are pending or known to be threatened, even if determined adversely, will not, individually or in the aggregate, have a material adverse effect on the Company’s results of operations, cash flows or financial position given current insurance coverage, except as otherwise described in Note 8. Income Taxes and this Note 11.
On October 21, 2022, a putative securities class action was filed in the United States District Court for the District of Kansas. The lawsuit alleges that the Company and certain former executives of the Company made misleading statements and that shareholders were damaged by these statements. Plaintiffs filed an Amended Complaint on March 13, 2023. On February 7, 2025, the parties reached an agreement in principle to resolve the matter. On March 27, 2025, the parties entered into a Joint Stipulation of Settlement. A motion for final approval of the settlement was filed with the court on June 25, 2025. On July 30, 2025, the court held a hearing at which it approved the settlement of $48.0 million, including fees and expenses awarded to lead counsel and plaintiffs. The Company’s insurers have consented to and funded the agreed upon settlement, and therefore, the Company does not have either a liability or corresponding insurance recoveries, included in Receivables, in its Consolidated Balance Sheets as of September 30, 2025.
On February 1, 2023, a shareholder derivative lawsuit was filed in the District of Kansas by an individual shareholder, purportedly on behalf of the Company. The lawsuit alleges that certain directors and executives breached their fiduciary duties to shareholders by failing to prevent the dissemination of misstatements and omissions from October 30, 2017 to November 18, 2018. On October 30, 2024, an additional shareholder derivative lawsuit was filed in the District of Kansas by an individual shareholder, purportedly on behalf of the Company. The lawsuit alleges that certain directors and executives breached their fiduciary duties to shareholders by willfully or recklessly causing the Company to make false and/or misleading statements and/or omissions of material fact from October 31, 2017 to October 21, 2022. On February 28, 2025, this matter was consolidated with the derivative matter filed on February 1, 2023. On May 27, 2025, the parties reached an agreement in principle to resolve the consolidated derivative lawsuit in exchange for the Company’s agreement to adopt certain corporate governance reforms. A motion for final approval of the settlement was filed with the court on September 2, 2025. On October 14, 2025, the court held a hearing at which it approved the settlement, including fees and expenses awarded to lead counsel and plaintiffs. Insurers for the defendant directors and executives thereafter made their respective payments for the full amount of the awarded fees and expenses pursuant to their commitments and in accordance with the court’s order and the settlement agreement.
On April 24, 2024, a putative securities class action was filed in the United States District Court for the District of Kansas. The complaint alleges that the Company and certain individuals made materially false and misleading statements regarding Fortress North America and that shareholders were damaged by these statements. On December 12, 2024, the court appointed lead plaintiff and counsel. Plaintiffs filed an Amended Complaint on February 10, 2025. The parties have executed a settlement agreement dated June 30, 2025, to resolve the matter, which settlement has been consented to by the Company’s insurers. The
court granted preliminary approval of the settlement on July 25, 2025 and a hearing is scheduled for January 7, 2026, for the court to consider any objections and to make a determination regarding final approval of the settlement.
On October 30, 2024, a shareholder derivative lawsuit was brought against certain current and former officers and directors of the Company, purportedly on behalf of the Company. The lawsuit alleges that from November 29, 2023 to March 22, 2024, certain current and former officers and directors willfully or recklessly caused the Company to make false and/or misleading statements and/or omissions of material fact regarding the Company’s fire-retardant business. On April 9, 2025, an additional derivative lawsuit was brought against certain current and former officers and directors of the Company, purportedly on behalf of the Company. The lawsuit alleges that certain current and former officers and directors caused Compass Minerals to make misleading statements regarding the Company’s fire-retardant business. In an order dated June 3, 2025, the court consolidated the two derivative actions for the discovery phase of the actions. On July 30, 2025, the plaintiffs in the consolidated derivative action filed a verified amended consolidated shareholder derivative complaint asserting claims that certain statements made between February 8, 2023 until March 25, 2024 about the Company’s fire retardant business were false and/or misleading. The parties have executed a settlement agreement dated October 24, 2025, to resolve the derivative actions, subject to obtaining court approval. Pursuant to the settlement agreement, the Company will implement certain corporate governance reforms as specified therein, and the Company’s insurers have agreed to pay legal fees and expenses to plaintiffs’ counsel. The court granted preliminary approval of the settlement on December 10, 2025, and scheduled a hearing for final approval for February 20, 2026.
On October 25, 2024, the Company issued a recall for specific production lots of food-grade salt produced at its Goderich Plant following a customer report of a non-organic, foreign material in its product. The Company subsequently expanded the voluntary recall to include food products from the Goderich Plant between September 18, 2024 and November 6, 2024. The Company followed recall protocol and notified its BRCGS Global Standard for Food Safety certifying body, the Canadian Food Inspection Agency (“CFIA”) and the U.S. Food and Drug Administration (“FDA”). The Company has completed its investigation and continues to assess the scope and magnitude of asserted and potential customer claims related to the recall. At this time, based on currently available information and its applicable insurance coverage, the Company does not believe any incremental losses will have a material adverse effect on its results of operations or cash flows in future periods. The recall in the United States, supervised by the FDA, is complete, and the matter is closed with FDA. The CFIA has conducted a follow-up inspection of the Goderich Plant to verify compliance with regulatory requirements and identified no non-compliances.
As of September 30, 2025 and September 30, 2024, the Company recorded a liability of $51.8 million and $6.7 million, respectively, included in Accrued expenses and other liabilities, and estimated insurance recoveries of $47.0 million and $6.7 million, respectively, included in Receivables in the Consolidated Balance Sheets associated with the recall matters described above, in addition to all other legal and administrative proceedings.
Nearly 50% of the Company’s workforce is represented by collective bargaining agreements. Of the Company’s 12 collective bargaining agreements in effect on September 30, 2025:
•Six expired in fiscal 2025 (including the Company’s Cote Blanche mine), four of which were renewed/renegotiated and two are still in the process of being negotiated;
•Four will expire in fiscal 2026 (including the Company’s Goderich mine, which have 393 positions represented by a CBA); and
•Two will expire in fiscal 2027.
Commitments
Royalties. The Company has various private, state and Canadian provincial leases associated with the salt and SOP businesses, most of which are renewable by the Company. Many of these leases provide for a royalty payment to the lessor based on a specific amount per ton of mineral extracted or as a percentage of revenue. Royalty expense related to these leases was $18.2 million, $16.2 million and $18.7 million for the fiscal years ended September 30, 2025, September 30, 2024, and September 30, 2023, respectively.
Performance Bonds. The Company has various salt and other deicing product sales contracts that include performance provisions governing delivery and product quality. These sales contracts either require the Company to maintain performance bonds for stipulated amounts or contain contractual penalty provisions in the event of non-performance. For the fiscal years ended September 30, 2025, September 30, 2024, and September 30, 2023, the Company has had no material penalties related to these sales contracts. At September 30, 2025, the Company had $211.5 million of outstanding performance bonds, which includes bonds related to Ontario mining tax reassessments. See Note 18. Subsequent Event for further information.
Purchase Commitments. In connection with the operations of the Company’s facilities, the Company purchases utilities, other raw materials and services from third parties under contracts extending, in some cases, for multiple years. Purchases under these contracts are generally based on prevailing market prices. The Company has minimum throughput contracts with some of its depots and warehouses. The purchase commitments for these contracts are estimated to be $33.6 million for 2026, $29.8 million in 2027, $11.7 million in 2028, $5.3 million in 2029, and $3.1 million in 2030.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Dec 12, 2025 | Showing above |
| 2024 | Dec 16, 2024 | |
| 2023 | Nov 29, 2023 | |
| 2022 | Dec 14, 2022 | |
| 2020 | Feb 26, 2021 | |
| 2019 | Feb 26, 2020 | |
| 2018 | Mar 1, 2019 | |
| 2017 | Feb 27, 2018 | |
| 2016 | Mar 1, 2017 | |
| 2015 | Feb 22, 2016 | |
About Commitments Disclosures
Commitments and contingencies disclosures catalog a company's off-balance-sheet obligations and legal exposures — purchase commitments, guarantee arrangements, pending litigation, and regulatory proceedings. These items represent potential future cash outflows that may not appear as liabilities on the balance sheet until they become probable and estimable.
Key signals: litigation reserves and disclosed loss ranges quantify management's estimate of legal exposure, but unquantified "reasonably possible" losses often represent the larger risk. Watch for changes in language around pending cases — shifts from "remote" to "reasonably possible" or increases in estimated loss ranges signal deteriorating outcomes. Unconditional purchase obligations and take-or-pay contracts create fixed cost structures that reduce operational flexibility. Guarantee arrangements for subsidiaries or joint ventures can create cascading obligations. Compare the total commitment schedule against projected free cash flow to assess whether the company can meet its obligations without additional financing.