UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): November 9, 2004
Commission File Number 001-31921
Compass Minerals International, Inc.
(Exact name of registrant as specified in its charter)
Delaware 36-3972986
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
8300 College Blvd.
Overland Park, KS 66210
(913) 344-9200
(Address of principal executive offices and telephone number)
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
|_| Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240-13e-4(c))
Item 4.02 (a) Non-Reliance on Previously Issued Financial Statements or a
Related Audit Report or Completed Interim Review
As previously disclosed, Compass Minerals International, Inc. (the "Company")
had a valuation allowance of $40.8 million against certain U.S. deferred tax
assets at December 31, 2003. Statement of Financial Accounting Standards
("SFAS") No. 109 requires a valuation allowance against deferred tax assets if,
based on available evidence, it is more likely than not that some or all of the
deferred tax assets will not be realized. Since the Company believed it was more
likely than not that it would not recover any of these deferred tax assets, a
full valuation allowance in the amount of $40.8 million was also recorded at
December 31, 2003.
The Company regularly evaluates the critical estimates and assumptions that are
made in the preparation of its financial statements. During the third quarter of
2004, the Company determined that future reversals of existing taxable temporary
differences (deferred tax liabilities) should have been considered as a possible
source of taxable income when evaluating the need for a valuation allowance
against deferred tax assets. Upon consideration of the reversal of these
existing taxable temporary differences, the Company determined that it had
overstated its deferred tax asset valuation allowance and thereby understated
its deferred tax assets. As a result, the Company has recalculated the deferred
income tax accounts and related valuation allowance at the end of each year from
December 31, 1998 through December 31, 2003 and will be restating on Form 10-K/A
the combined and consolidated financial statements and the accompanying notes to
the combined and consolidated financial statements as applicable, for each of
the three years in the period ended December 31, 2003 to reflect the adjustments
in the deferred income tax accounts and related valuation allowance. These
adjustments during the previous reporting periods had no impact on cash flows,
operating earnings, income before income taxes or the Company's ability to
realize the benefits from its deferred tax assets.
On November 10, 2004, the Company issued a press release in which it announced
that it would file restated financial statements for the affected periods.
The Company is filing amendments to its 2003 Annual Report on Form 10-K to
restate the 2003, 2002 and 2001 combined and consolidated financial statements,
and its first and second quarter interim reports on Form 10-Q to restate the
March 31, 2004 and 2003 and June 30, 2004 and 2003 consolidated financial
statements, reflecting all necessary adjustments to its deferred income tax
accounts, provision for income taxes and net income. Additionally, the Company
will be restating its September 30, 2003 financial statements when it files its
interim report on Form 10-Q for the third quarter of 2004. Accordingly, the
previously issued financial statements and related auditors' reports should not
be relied upon.
The decision to restate prior financial statements based on these matters was
made by the Board of Directors of the Company, upon the recommendation of the
Company's audit committee after discussion with PricewaterhouseCoopers LLP, its
independent auditor for the years ended 2003 and 2002, and Ernst & Young LLP,
its independent auditor for the year ended 2001.
Item 9.01 Financial Statements and Exhibits
(a) Financial Statements of Businesses Acquired: Not applicable.
(b) Pro Forma Financial Information: Not applicable.
(c) Exhibits: Not applicable.
SIGNATURES
Pursuant to the requirements of Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
COMPASS MINERALS INTERNATIONAL, INC.
Date: November 12, 2004 /s/ Rodney L. Underdown
-------------------------------------
Rodney L. Underdown
Chief Financial Officer