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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549





Form 10-Q





(Mark One)

| ̈ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ---------------------------------------------------------------------------------------

For the quarterly period ended December 31, 2007

OR



| ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ----------------------------------------------------------------------------------------

For the transition period from  to

Commission File Number: N/A





AMERICAN ROCK SALT COMPANY LLC

(Exact Name of Registrant as Specified in its
Charter)







|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|New York                                                       |  | 16-1516458                          
|(State or Other Jurisdiction of Incorporation or Organization) |  | (IRS Employer Identification Number)



|                                         |  |           
|---------------------------------------- |  | ----------
|3846 Retsof Road, Retsof, New York       |  | 14539     
|(Address of Principal Executive Offices) |  | (Zip Code)

Registrants Telephone Number, Including Area Code: (585) 243-9510 ext. 1164

(Former Name, Former Address, and Former Fiscal Year, if Changed Since Last Report): N/A





Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes   ̈    No   ̈    NA  x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of accelerated filer and large accelerated filer in
Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer   ̈    Accelerated filer   ̈    Non-accelerated filer  x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes     ̈  No    x









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EXPLANATORY NOTE

American Rock Salt Company LLC (the Company) is not required to file reports under the Securities
Exchange Act of 1934, as amended. This Form 10-Q is only being filed for informational purposes pursuant to the indenture governing the Companys 9 1/2% Senior Secured Notes due 2014.

American
Rock Salt Company LLC

INDEX



|           |  |                                                                                       |  |           
|---------- |  | ------------------------------------------------------------------------------------- |  | ----------
|           |  |                                                                                       |  | PageNumber
|Part I.    |  | Financial Information                                                                 |  |           
|           |  |                                                                                      
|Item 1.    |  | Financial Statements (Unaudited)                                                      |  |           
|           |  |                                                                                      
|           |  | Balance SheetsDecember 31, 2007 and September 30, 2007                                |  | 2         
|           |  |                                                                                      
|           |  | Statements of OperationsThree Months Ended December 31, 2007 and 2006                 |  | 3         
|           |  |                                                                                      
|           |  | Statements of Changes in Members EquityThree Months Ended December 31, 2007          |  | 3         
|           |  |                                                                                      
|           |  | Statements of Cash FlowsThree Months Ended December 31, 2007 and 2006                 |  | 4         
|           |  |                                                                                      
|           |  | Notes to Interim Financial Statements                                                 |  | 5         
|           |  |                                                                                      
|Item 2.    |  | Managements Discussion and Analysis of Financial Condition and Results of Operations |  | 8         
|           |  |                                                                                      
|Item 3.    |  | Quantitative and Qualitative Disclosures About Market Risk                            |  | 13        
|           |  |                                                                                      
|Item 4.    |  | Controls and Procedures                                                               |  | 13        
|           |  |                                                                                      
|Part II.   |  | Other Information                                                                     |  |           
|           |  |                                                                                      
|Item 1.    |  | Legal Proceedings                                                                     |  | 14        
|           |  |                                                                                      
|Item 1A.   |  | Risk Factors                                                                          |  | 14        
|           |  |                                                                                      
|Item 2.    |  | Unregistered Sales of Equity Securities and Use of Proceeds                           |  | 14        
|           |  |                                                                                      
|Item 3.    |  | Defaults Upon Senior Securities                                                       |  | 14        
|           |  |                                                                                      
|Item 4.    |  | Submission of Matters to a Vote of Security Holders                                   |  | 14        
|           |  |                                                                                      
|Item 5.    |  | Other Information                                                                     |  | 14        
|           |  |                                                                                      
|Item 6.    |  | Exhibits                                                                              |  | 15        
|           | 
|Signatures |  | 16                                                                                   
|           | 
|Exhibits   |  | 17                                                                                   



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PART I. FINANCIAL INFORMATION



|ITEM 1. | 
|------- | 

FINANCIAL STATEMENTS

American Rock Salt Company LLC

Balance Sheets

(Unaudited)



|                                                                                                                                                         |  |                  |             |                   |   |            
|-------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------- | ----------- | ----------------- | - | -----------
|                                                                                                                                                         |  | December 31,2007 |             | September 30,2007
|Assets                                                                                                                                                  
|Current assets                                                                                                                                           |  |                  |             |                   |   |            
|Cash and equivalents                                                                                                                                     |  | $                | 4,477,625   |                   | $ | 2,615,044  
|Accounts receivable, net of reserve for doubtful accounts of approximately $42,000 and $54,000 at December 31, 2007 and
September 30, 2007, respectively |  |                  | 43,628,724  |                   |   | 9,957,325  
|Inventory, net                                                                                                                                           |  |                  | 22,430,936  |                   |   | 35,388,490 
|Prepaid and other assets                                                                                                                                 |  |                  | 1,290,580   |                   |   | 607,982    
|                                                                                                                                                         |  |                  |             |                   |   |            
|Total current assets                                                                                                                                     |  |                  | 71,827,865  |                   |   | 48,568,841 
|Property and equipment, net                                                                                                                              |  |                  | 81,385,213  |                   |   | 81,803,234 
|Other assets                                                                                                                                             |  |                  |             |                   |   |            
|Salt deposits and mineral rights, net                                                                                                                    |  |                  | 2,526,448   |                   |   | 2,539,534  
|Mine acquisition costs, net                                                                                                                              |  |                  | 374,277     |                   |   | 376,256    
|Financing costs, net of accumulated amortization of approximately $3,362,000 and $3,188,000 at December 31, 2007 and September 30,
2007, respectively    |  |                  | 4,351,032   |                   |   | 4,525,073  
|                                                                                                                                                         |  |                  |             |                   |   |            
|Total other assets                                                                                                                                       |  |                  | 7,251,757   |                   |   | 7,440,863  
|                                                                                                                                                         |  |                  |             |                   |   |            
|                                                                                                                                                         |  | $                | 160,464,835 |                   | $ | 137,812,938
|                                                                                                                                                         |  |                  |             |                   |   |            
|Liabilities and Members Equity                                                                                                                         
|Current liabilities                                                                                                                                      |  |                  |             |                   |   |            
|Revolving line of credit                                                                                                                                 |  | $                | 9,500,000   |                   | $ | 16,000,000 
|Current portion of long-term debt                                                                                                                        |  |                  | 2,084,119   |                   |   | 2,057,604  
|Accounts payable                                                                                                                                         |  |                  | 9,756,726   |                   |   | 3,568,432  
|Accrued expenses                                                                                                                                         |  |                  | 7,615,496   |                   |   | 3,918,824  
|Related party payables                                                                                                                                   |  |                  | 1,765,947   |                   |   | 504,832    
|                                                                                                                                                         |  |                  |             |                   |   |            
|Total current liabilities                                                                                                                                |  |                  | 30,722,288  |                   |   | 26,049,692 
|Long-term debt, net of current portion                                                                                                                   |  |                  | 110,134,573 |                   |   | 110,655,704
|                                                                                                                                                         |  |                  |             |                   |   |            
|Total liabilities                                                                                                                                        |  |                  | 140,856,861 |                   |   | 136,705,396
|                                                                                                                                                         |  |                 
|Members Equity                                                                                                                                          |  |                  |             |                   |   |            
|Class A Units 6,250 units issued and outstanding at December 31, 2007 and September 30, 2007                                                             |  |                  | 6,449,118   |                   |   | 364,326    
|Class F Units 12,750 units issued and outstanding at December 31, 2007 and September 30, 2007                                                            |  |                  | 13,158,856  |                   |   | 743,216    
|                                                                                                                                                         |  |                  |             |                   |   |            
|                                                                                                                                                         |  |                  | 19,607,974  |                   |   | 1,107,542  
|                                                                                                                                                         |  |                  |             |                   |   |            
|                                                                                                                                                         |  | $                | 160,464,835 |                   | $ | 137,812,938
|                                                                                                                                                         |  |                  |             |                   |   |            

The accompanying notes are an integral part of these interim financial statements.



2



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American Rock Salt Company LLC

Statements of Operations

(Unaudited)



|                         |  |                            |            |   |                  |   |            |  
|------------------------ |  | -------------------------- | ---------- | - | ---------------- | - | ---------- | -
|                         |  | For the three months ended |           
|                         |  | December 31,2007           |            |   | December 31,2006 |  
|Sales                    |  |                            |            |   |                  |   |            |  
|Bulk                     |  | $                          | 65,451,166 |   |                  | $ | 17,989,579 |  
|Packaged                 |  |                            | 3,202,266  |   |                  |   | 996,178    |  
|                         |  |                            |            |   |                  |   |            |  
|Total sales              |  |                            | 68,653,432 |   |                  |   | 18,985,757 |  
|                         |  |                            |            |   |                  |   |            |  
|Cost of sales            |  |                            | 44,862,091 |   |                  |   | 13,184,279 |  
|                         |  |                            |            |   |                  |   |            |  
|Gross income             |  |                            | 23,791,341 |   |                  |   | 5,801,478  |  
|Operating expenses       |  |                            | 2,270,168  |   |                  |   | 1,966,949  |  
|                         |  |                            |            |   |                  |   |            |  
|Income from operations   |  |                            | 21,521,173 |   |                  |   | 3,834,529  |  
|                         |  |                            |            |   |                  |   |            |  
|Other income (expense)   |  |                            |            |   |                  |   |            |  
|Interest expense         |  |                            | (3,107,715 | ) |                  |   | (3,273,078 | )
|Interest income          |  |                            | 73,861     |   |                  |   | 45,334     |  
|Other financing charges  |  |                            | 8,067      |   |                  |   |           |  
|Other, net               |  |                            | 5,046      |   |                  |   | 6,864      |  
|                         |  |                            |            |   |                  |   |            |  
|Total other expense, net |  |                            | (3,020,741 | ) |                  |   | (3,220,880 | )
|                         |  |                            |            |   |                  |   |            |  
|Net income               |  | $                          | 18,500,432 |   |                  | $ | 613,649    |  
|                         |  |                            |            |   |                  |   |            |  

The accompanying notes are an integral part of these interim financial statements.

American Rock Salt Company LLC

Statement of Changes in Members Equity

For the Three Months Ended December 31, 2007

(Unaudited)



|                                     |  |              |           |              |   |            |  |   |           
|------------------------------------ |  | ------------ | --------- | ------------ | - | ---------- |  | - | ----------
|                                     |  | Class AUnits |           | Class FUnits |   | Total     
|Members equity - September 30, 2007 |  | $            | 364,326   |              | $ | 743,216    |  | $ | 1,107,542 
|Net income                           |  |              | 6,084,792 |              |   | 12,415,640 |  |   | 18,500,432
|                                     |  |              |           |              |   |            |  |   |           
|Members equity - December 31, 2007  |  | $            | 6,449,118 |              | $ | 13,158,856 |  | $ | 19,607,974
|                                     |  |              |           |              |   |            |  |   |           

The accompanying notes are an integral part of these interim financial statements.



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American Rock Salt Company LLC

Statements of Cash Flows

(Unaudited)



|                                                                                 |  |                            |             |   |                  |   |            |  
|-------------------------------------------------------------------------------- |  | -------------------------- | ----------- | - | ---------------- | - | ---------- | -
|                                                                                 |  | For the three months ended |            
|                                                                                 |  | December 31,2007           |             |   | December 31,2006 |  
|Cash flows from operating activities                                             |  |                            |             |   |                  |   |            |  
|Net income                                                                       |  | $                          | 18,500,432  |   |                  | $ | 613,649    |  
|Adjustments to reconcile net income to net cash provided by operating activities |  |                            |             |   |                  |   |            |  
|Depreciation                                                                     |  |                            | 1,331,164   |   |                  |   | 1,149,238  |  
|Depletion                                                                        |  |                            | 15,065      |   |                  |   | 8,679      |  
|Amortization of mine acquisition and financing costs                             |  |                            | 174,041     |   |                  |   | 362,768    |  
|Loss on sale or disposal of equipment                                            |  |                            | 4,271       |   |                  |   |           |  
|Changes in                                                                       |  |                            |             |   |                  |   |            |  
|Accounts receivable                                                              |  |                            | (33,671,399 | ) |                  |   | (1,559,346 | )
|Inventory                                                                        |  |                            | 12,957,554  |   |                  |   | (3,738,284 | )
|Prepaid expenses and other assets                                                |  |                            | (682,598    | ) |                  |   | 555,155    |  
|Accounts payable                                                                 |  |                            | 6,188,294   |   |                  |   | 179,048    |  
|Accrued expenses                                                                 |  |                            | 3,696,672   |   |                  |   | 1,598,932  |  
|Related party payables                                                           |  |                            | 1,261,115   |   |                  |   | 132,015    |  
|                                                                                 |  |                            |             |   |                  |   |            |  
|Net cash provided by (used in) operating activities                              |  |                            | 9,774,611   |   |                  |   | (698,146   | )
|                                                                                 |  |                            |             |   |                  |   |            |  
|Cash flows from investing activities                                             |  |                            |             |   |                  |   |            |  
|Purchase of property and equipment                                               |  |                            | (917,414    | ) |                  |   | (254,522   | )
|                                                                                 |  |                            |             |   |                  |   |            |  
|Net cash used in investing activities                                            |  |                            | (917,414    | ) |                  |   | (254,522   | )
|                                                                                 |  |                            |             |   |                  |   |            |  
|Cash flows from financing activities                                             |  |                            |             |   |                  |   |            |  
|Repayments on long-term debt                                                     |  |                            | (494,616    | ) |                  |   | (475,556   | )
|(Repayments)/Borrowings on revolving line of credit                              |  |                            | (6,500,000  | ) |                  |   | 4,000,000  |  
|Increase in Bond Holding                                                         |  |                            |            |   |                  |   | (3,000,000 | )
|                                                                                 |  |                            |             |   |                  |   |            |  
|Net cash (used in) provided by financing activities                              |  |                            | (6,994,616  | ) |                  |   | 524,444    |  
|Net increase (decrease) in cash and equivalents                                  |  |                            | 1,862,581   |   |                  |   | (428,224   | )
|Cash and equivalents - beginning of period                                       |  |                            | 2,615,044   |   |                  |   | 2,457,515  |  
|                                                                                 |  |                            |             |   |                  |   |            |  
|Cash and equivalents - end of period                                             |  | $                          | 4,477,625   |   |                  | $ | 2,029,291  |  
|                                                                                 |  |                            |             |   |                  |   |            |  

Supplemental Disclosure of Cash Flow Activities



|                       |  |                            |         |                  |   |        
|---------------------- |  | -------------------------- | ------- | ---------------- | - | -------
|                       |  | For the three months ended
|                       |  | December 31,2007           |         | December 31,2006
|Cash paid for interest |  | $                          | 354,083 |                  | $ | 852,054
|                       |  |                            |         |                  |   |        

The accompanying notes are an integral part of these interim financial statements.



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AMERICAN ROCK SALT COMPANY LLC

NOTES TO FINANCIAL STATEMENTS



|1. | The Company
|-- | -----------

American Rock Salt Company LLC (the
Company) primarily sells bulk rock salt for use in deicing roads. The Company bids on supply contracts for salt produced at the Hampton Corners Mine to be provided to state Departments of Transportation and local municipalities as well
as industrial consumers throughout the Northeastern United States. The Company was formed on January 30, 1997. Construction of the Hampton Corners Mine began in November 1998 and it was substantially completed in December 2001. The Company
steadily increased sales as production and distribution capacity came online during a ramp-up phase in fiscal 2001 and 2002. The Company attained full operating capacity during fiscal 2003.



|2. | Basis of Presentation
|-- | ---------------------

The accompanying unaudited
financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Article 10 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles for complete financial statements. These interim unaudited financial statements should be read in conjunction with the audited financial statements for the fiscal year
ended September 30, 2007 included in the Companys Annual Report on Form 10-K, filed with the Securities and Exchange Commission (the SEC) on December 28, 2007. In the opinion of management, all adjustments, consisting of
normal recurring accruals, considered necessary for a fair presentation, have been included. Operating results for the three-month period ended December 31, 2007 are not indicative of the results that may be expected for a full year due, in
part, to seasonal fluctuations, which are normal for the Companys business. Further, the Company has made a number of estimates and assumptions relating to the assets and liabilities, the disclosure of contingent assets and liabilities and the
reporting of revenues and expenses to prepare these financial statements in conformity with generally accepted accounting principles. Actual results could differ from those estimates.

The balance sheet at September 30, 2007 has been derived from the audited financial statements at that date, but does not include all the information
and footnotes required by accounting principles generally accepted in the United States for complete financial statements.

No provision is
made for income taxes in the accompanying financial statements as the Company is wholly-owned by another limited liability company, American Rock Salt Holdings LLC (Holdings), and is therefore treated as a disregarded entity for tax
purposes. The taxable income and loss and any available credits of the Company and Holdings are includable on the individual tax returns of the members of Holdings.



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|3. | Long-Term Debt
|-- | --------------

Long-term debt consisted of the
following at:



|                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |  |                  |             |   |                   |   |             |  
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------- | ----------- | - | ----------------- | - | ----------- | -
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |  | December 31,2007 |             |   | September 30,2007 |  
|Senior Secured Notes                                                                                                                                                                                                                                                                                                                                                                                                                                                      |  |                  |             |   |                   |   |             |  
|Senior Secured Notes at December 31, 2007 of $90,955,000, currently requiring semi annual interest payments through the final maturity
date of March 15, 2014 at an annual rate of 9.50%. Some or all of the notes may be redeemed at any time prior to March 15, 2009 at a make-whole redemption price. After March 15, 2009, the notes are redeemable at a redemption price of
104.75%, to be adjusted annually to 100% by March 15, 2012.                              |  |                  |             |   |                   |   |             |  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |  | $                | 90,955,000  |   |                   | $ | 90,955,000  |  
|Senior Term Loan                                                                                                                                                                                                                                                                                                                                                                                                                                                          |  |                  |             |   |                   |   |             |  
|Senior Term Loan at December 31, 2007, currently requiring quarterly principal and interest payments through the final maturity date of
March 16, 2012 at an annual rate equal to the LIBOR rate plus up to 1.375%, based on a pricing grid leverage ratio or a base rate (the higher of the Federal Funds Rate plus 0.5% or the prime rate plus the applicable margin for base rate loans),
at the Companys option. The interest rate is 5.75% as of December 31, 2007. |  |                  |             |   |                   |   |             |  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |  | $                | 21,171,269  |   |                   | $ | 21,659,261  |  
|Promissory note payable to the Empire State Development Corporation                                                                                                                                                                                                                                                                                                                                                                                                       |  |                  |             |   |                   |   |             |  
|Due April 1, 2011, interest at 4.0% per annum payable in 120 equal installments of principal and interest                                                                                                                                                                                                                                                                                                                                                                 |  | $                | 92,423      |   |                   | $ | 99,047      |  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |  |                  |             |   |                   |   |             |  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |  |                  | 112,218,692 |   |                   |   | 112,713,308 |  
|Less: Current maturities of long-term debt                                                                                                                                                                                                                                                                                                                                                                                                                                |  |                  | (2,084,119  | ) |                   |   | (2,057,604  | )
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |  |                  |             |   |                   |   |             |  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |  | $                | 110,134,573 |   |                   | $ | 110,655,704 |  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |  |                  |             |   |                   |   |             |  

The Companys bank facility in the aggregate principal amount of $51.2 million consists of:
(a) a $21.2 million term loan facility, and (b) a $30.0 million working capital facility. Both the term loan and the working capital facility bear interest at an annual rate equal to the LIBOR rate plus up to 3.5%, based on a pricing grid
leverage ratio or a base rate (the higher of the Federal Funds Rate plus 0.50% or the prime rate plus the applicable margin for base rate loans), at the Companys option. The term loan facility has a maturity of eight years commencing
March 17, 2004. The working capital facility has an initial term of five years commencing March 17, 2004.

At December 31,
2007 a balance of $21.2 million was outstanding under the term loan facility bearing interest at a rate of 5.75%.

The working capital
facility permits the Company to borrow up to $30.0 million in revolving loans with a $7.0 million sub-limit available for the issuance of letters of credit. Availability of the working capital facility is subject to a borrowing base formula. As of
December 31, 2007, the Company had $9.5 million drawn and $2.0 million of standby letters of credit outstanding under the working capital facility, with approximately $18.5 million of remaining availability thereunder. The aggregate outstanding
amount of revolving loans and letters of credit under the financing arrangement cannot exceed $30.0 million and when outstanding bears an interest rate of 5.75%.



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|4. | Inventory
|-- | ---------

Inventory consisted of the following at:



|                     |  |                  |            |   |                   |   |            |  
|-------------------- |  | ---------------- | ---------- | - | ----------------- | - | ---------- | -
|                     |  | December 31,2007 |            |   | September 30,2007 |  
|Supplies             |  | $                | 1,580,601  |   |                   | $ | 1,080,484  |  
|Finished Goods, Salt |  |                  | 20,940,898 |   |                   |   | 34,346,451 |  
|                     |  |                  |            |   |                   |   |            |  
|                     |  |                  | 22,521,499 |   |                   |   | 35,426,935 |  
|Less:                |  |                  |            |   |                   |   |            |  
|Reserve              |  |                  | (90,563    | ) |                   |   | (38,445    | )
|                     |  |                  |            |   |                   |   |            |  
|                     |  | $                | 22,430,936 |   |                   | $ | 35,388,490 |  
|                     |  |                  |            |   |                   |   |            |  



|5. | Related Party Transactions
|-- | --------------------------

Legal Services

Certain legal costs were incurred from an organization affiliated with several of our affiliates of approximately $0.1 million and $0.1
million during the three months ended December 31, 2007 and 2006 respectively. All such fees were included in operating expenses.

Goods and Services

Management and service fees were incurred from certain affiliates of approximately $0.1 million and $0.1
million during the three months ended December 31, 2007 and 2006 respectively. These amounts are included in operating expenses.

Additionally, expenses were incurred to certain affiliates for goods and services of approximately $1.3 million and $0.4 million during the three months ended December 31, 2007 and 2006, respectively. For the three months ended
December 31, 2007, approximately $1.2 million of the total $1.3 million is included in cost of sales with the remaining balance in operating expenses. For the three months ended December 31, 2006, approximately $0.3 million of the total
$0.4 million is included in cost of sales with the remaining balance in operating expenses.

Non-operating Mineral Interests
(NOMIs)

Certain affiliates receive payments in respect of NOMIs related to the acquisition of mineral rights equal to 2.5%
of the gross income from the mine as reported for purposes of computing percentage depletion for federal income tax purposes. NOMI expense was approximately $1.4 million and $0.2 million during the three months ended December 31, 2007 and 2006,
respectively. These amounts are accrued in related party payables and included in cost of sales.



|6. | Subsequent Events
|-- | -----------------

Between January 24 and January 31, 2008 the Company purchased $18,920,000 of its 91/2%
Senior Secured Notes due 2014 for an aggregate purchase price of $20,275,643. These amounts comprise principal and accrued interest for the Notes purchased. The Company intends to retire all such Notes.



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CAUTIONARY STATEMENT ON FORWARD-LOOKING STATEMENTS

This Form 10-Q contains forward looking statements. These statements relate to future events or our future financial performance, and involve known and unknown risks,
uncertainties and other factors that may cause our actual results, levels of activity, performance, or achievements to be materially different from any future results, levels of activity, performance, or achievements, expressed or implied by these
forward-looking statements. These risks and other factors include, among other things, those listed in the section entitled Risk Factors set forth in Item 1A below and elsewhere in our Annual Report on Form 10-K for the fiscal year
ended September 30, 2007, filed with the SEC on December 28, 2007, and in other documents we file with the SEC. In some cases, you can identify forward-looking statements by terminology such as may, should,
expects, intends, plans, anticipates, believes, estimates, predicts, potential, continue or the negative of these terms or other comparable
terminology. These statements are only predictions. Actual events or results may differ materially. In evaluating these statements, you should specifically consider various factors, including the risks outlined in Risk Factors. These
factors may cause our actual results to differ materially from any forward-looking statement. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of
activity, performance, or achievements. We are under no duty to update any of the forward-looking statements after the date of this Form 10-Q.



|ITEM 2. | 
|------- | 

MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

Company Overview

We are a producer of highway deicing rock salt in North America. We own and operate a rock salt mine located approximately 35 miles south of Rochester, New York. Our mine is located in the heart of the western and central New York and
Pennsylvania snow belt, with on-site access to truck and rail transportation.

Salt mines and mining operations are long-lived assets. Based solely on data
extrapolated from areas within a one-mile radius of our drill holes, we believe that our mine currently has over 51 years of remaining mineable reserves at the current average production rate of 3.0 million tons per year.

While winter weather conditions in individual markets can vary from year to year, our target markets in New York and Pennsylvania are the most impacted by harsh winter
snow and ice conditions and overall demand across the region is relatively stable. Our served markets in New York, Pennsylvania, Ohio and eight other states have an aggregate regional demand for over 11.1 million tons per year of rock salt, and
Pennsylvania and New England currently have no operating rock salt mines.

Most of our sales are based on annual supply contracts with set pricing and
reserved volume generally awarded on the basis of lowest price of bids tendered. This allows us to plan our production and staffing schedule and our inventory placement and sales distribution strategy for the upcoming season. We routinely adjust the
size of our workforce, as well as the number of hours and days worked, to reflect seasonal demand.

For the quarter ended December 31, 2007, we
generated revenues of $68.7 million, and net income of $18.5 million. We believe that our cash flows are not materially impacted by economic cycles due to the stable end use markets for rock salt and the lack of cost effective alternatives.



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Critical Accounting Policies

In preparing financial statements in conformity with accounting principles generally accepted in the United States of America, or GAAP, we are required to make estimates and assumptions that affect the reported amount of assets and
liabilities and the disclosure of contingent assets and liabilities at the date of our financial statements and revenues and expenses during the reporting period. Actual results could differ from those estimates. We have identified the following as
critical accounting policies that are most important to the portrayal of our financial condition and results of operation.

Salt Deposits, Mineral
Rights and Mine Development Costs

Salt deposits and mineral rights are underground reserves with respect to which the Company has extraction rights.
Mine development costs are primarily underground assets used in the production of salt with amortization lives linked to the quantity of available production reserves. Depletion of salt deposits and mineral rights and amortization of mine
development costs occur as the minerals are extracted based on units of production and engineering estimates of total reserves. As such, our mineral rights interests include estimates of probable mineral reserves. Accordingly, the carrying values,
depletion and amortization expense charges for these assets are dependent upon estimates of proven mineral reserves. The impact of revisions to our reserve estimates is recognized on a prospective basis.

Mine Reclamation Cost

We have calculated the estimated net future
cost of dismantling, restoring, and reclaiming our mine in its related mine site in accordance with federal, state and local regulatory requirements, and in accordance with Statement of Financial Accounting Standards (SFAS) No. 143,
Accounting for Obligations Associated with the Retirement of Long-Lived Assets. SFAS No. 143 requires that we recognize the legal obligation of our mine reclamation costs at fair value as a liability when incurred and capitalize such costs by
increasing the carrying amount of our mine assets.

Impairment of Long-Lived Assets

In the event that relevant facts and circumstances indicate that the carrying amounts of our long-lived assets may be impaired, an evaluation of recoverability is performed. If such an evaluation is required, the
estimated future undiscounted cash flows associated with the asset would be compared to the assets carrying amount to determine if a write-down is required. If our review indicates that the assets will not be recoverable, the carrying value of
the Companys assets would be reduced to their estimated fair value.

Other Significant Accounting Policies

Other significant accounting policies not involving the same level of estimates and assumptions as those discussed above are important to an understanding of our
financial statements. For example, our policies related to our inventory allowances, revenue recognition and legal contingencies require judgments and estimates.

Results of Operations

We record sales to customers upon delivery based upon total billings including shipping and handling costs necessary
to transport our products from the production or storage sites to the delivery point. In establishing our prices to our customers, we must take into account the estimated cost of transportation of our products, since we assume responsibility for
such costs. We manage the profitability and attractiveness of existing and prospective customers and product lines by analyzing, among other factors, the customer billings net of related shipping and handling costs. This allows for a more comparable
look at the relative profitability of our business as well as providing a more accurate analysis upon which to analyze trends in the business.



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The following table and discussion should be read in conjunction with the information contained in our financial
statements and the notes thereto included elsewhere in this Form 10-Q.

American Rock Salt Company LLC

Statement of Operations



|                         |  |                            |            |   |                  |   |            |  
|------------------------ |  | -------------------------- | ---------- | - | ---------------- | - | ---------- | -
|                         |  | For the three months ended |           
|                         |  | December 31,2007           |            |   | December 31,2006 |  
|Sales                    |  |                            |            |   |                  |   |            |  
|Bulk                     |  | $                          | 65,451,166 |   |                  | $ | 17,989,579 |  
|Packaged                 |  |                            | 3,202,266  |   |                  |   | 996,178    |  
|                         |  |                            |            |   |                  |   |            |  
|Total sales              |  |                            | 68,653,432 |   |                  |   | 18,985,757 |  
|                         |  |                            |            |   |                  |   |            |  
|Cost of sales            |  |                            | 44,862,091 |   |                  |   | 13,184,279 |  
|                         |  |                            |            |   |                  |   |            |  
|Gross income             |  |                            | 23,791,341 |   |                  |   | 5,801,478  |  
|Operating expenses       |  |                            | 2,270,168  |   |                  |   | 1,966,949  |  
|                         |  |                            |            |   |                  |   |            |  
|Income from operations   |  |                            | 21,521,173 |   |                  |   | 3,834,529  |  
|                         |  |                            |            |   |                  |   |            |  
|Other income (expense)   |  |                            |            |   |                  |   |            |  
|Interest expense         |  |                            | (3,107,715 | ) |                  |   | (3,273,078 | )
|Interest income          |  |                            | 73,861     |   |                  |   | 45,334     |  
|Other financing charges  |  |                            | 8,067      |   |                  |   |           |  
|Other, net               |  |                            | 5,046      |   |                  |   | 6,864      |  
|                         |  |                            |            |   |                  |   |            |  
|Total other expense, net |  |                            | (3,020,741 | ) |                  |   | (3,220,880 | )
|                         |  |                            |            |   |                  |   |            |  
|Net income               |  | $                          | 18,500,432 |   |                  | $ | 613,649    |  
|                         |  |                            |            |   |                  |   |            |  

The accompanying notes are an integral part of these interim financial statements.

Seasonality

We experience a substantial amount of seasonality in
salt sales. The result of this seasonality is that sales and operating income are generally higher in the first and fourth calendar quarters and lower during the second and third quarters of each calendar year. Sales of highway and consumer deicing
salt products are seasonal as they vary based on the severity of the winter conditions in areas where the product is used. Following industry practice, we and our customers stockpile significant quantities of deicing salt in the second, third and
fourth calendar quarters. Our results of operations for the fiscal year ended September 30 are more representative of trends in our results.

The
three months ended December 31, 2007 presented robust winter weather patterns, and due to the Companys preparedness our financial results were strong. For the quarter ended December 31, 2007 we exceeded $68.0 million in gross sales
and $18.5 million in net income for the first time in our history.

Three Months Ended December 31, 2007 Compared to Three Months Ended
December 31, 2006

Sales

Total sales for the
quarter ended December 31, 2007 of $68.7 million increased $49.7 million, or 261.6%, compared to $19.0 million during the same period in fiscal 2007. Sales primarily consist of bulk salt sales, in addition to packaged salt sales. The $49.7
million increase is primarily attributed to a 223.1% increase in tonnage sold and a 12.4% increase in sales price per ton related to successful bidding results as well as a favorable change in product mix as compared to the first quarter of fiscal
2007. The increase in sales volume is attributable to a higher demand over the same period in fiscal 2007 as a result of the successful bidding results mentioned above as well as a significant winter weather pattern experienced during the first
quarter of fiscal 2008 as compared to the significantly milder than normal weather experienced during same period in fiscal 2007 in our served market area.



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##### Table of Contents

Gross Income

Gross
income for the first quarter of fiscal 2008 of $23.8 million increased by $18.0 million, or 310.3%, compared to $5.8 million for the same period in fiscal 2007. The increase in gross income was primarily attributable to the 223.1% increase in
tonnage sold due to the robust winter weather experienced in our market area during the quarter ended December 31, 2007. Additionally, we experienced a 26.9% increase in average gross profit per ton. Total cost of sales for the first quarter of
fiscal 2007 increased by $31.7 million, or 240.3%, as compared to the same period in fiscal 2007. The increase is primarily related to a 223.1% increase in tonnage sold, in addition to a 5.3% increase in total cost of goods sold on a per ton basis.
The increase of cost of goods sold on a per ton basis is related to an increase in fuel surcharge expense as well as an increase in distance travelled to deliver product based on changes in market area covered as compared to the first quarter of
fiscal 2007. On a percentage of sales basis, total cost of sales decreased by 4.1%.

Operating Expenses

Operating expenses of $2.3 million for the first quarter of fiscal 2008 increased by $0.3 million or 15.0% when compared with the first quarter of fiscal 2007. Operating
expenses primarily consist of selling, general and administrative expenses, miscellaneous overhead and non-production related depreciation and amortization expenses. The increase is a result of stockpile maintenance expense incurred at several of
our stockpiles.

Other Income (Expense)

Other expense of $3.0 million for the first quarter of fiscal 2008 decreased $0.2 million, or 6.3%, compared to
$3.2 million for the same period in fiscal 2007. Other expense primarily consists of interest expense on our credit facilities and other related financing charges. Interest expense totaled $3.1 million for the first quarter of fiscal 2008, a
decrease of $0.2 million over the first quarter of fiscal 2007. The decrease is due to a $0.4 million reduction in bond interest expense related to our repurchase of certain of our 91/2% Senior Secured Notes due 2014 during the fiscal year ended September 30, 2007 in addition to a decrease of $0.1 million in interest expense related to a reduced
balance on our revolving line of credit in the first quarter of fiscal 2008 as compared to the same period in fiscal 2007, offset by an increase of $0.3 million in miscellaneous interest expense.

Liquidity and Capital Resources

Historical Cash Flow

We have used the cash generated from operations, borrowings under our bank facility to meet our working capital needs and to fund capital expenditures.
Additional information regarding our cash flows for the quarter ended December 31, 2007 is provided below.

Operating Activities 
Net cash provided by operating activities was $9.8 million during the first three months of fiscal 2008 compared to $0.7 million in net cash used in operating activities during the same period in fiscal 2007. The $10.5 million increase in operating
cash flows is primarily related to an increase in net income of $17.9 million as compared to the same period in fiscal 2007. The increase in net income is primarily related to the 223.1% increase in tonnage sold due to the robust winter weather
experienced in our market area during the quarter ended December 31, 2007, in addition to the 26.9% increase in average gross profit per ton discussed above. The positive cash flow was increased by a $16.7 million decrease in inventory, a $6.0
million increase in accounts payable, a $2.1 million increase in accrued expenses, as well as a $1.1 million increase in related party payables. Each of these increases was a result of the significantly higher sales during the first quarter of
fiscal 2008 as mentioned above. The positive cash flow was offset by a $32.1 million increase in accounts receivable related to the increase in sales in the first quarter of fiscal 2008 as compared to the same period in 2007, and a $1.2 million
increase in prepaid expenses, of which approximately $0.3 million was related to funds advanced under a salt sales arrangement during the first quarter of fiscal 2008 and $0.9 million related to the timing of freight and handling activities as we
moved product to our stockpile network during the month of December 2007.

Investing Activities  Net cash flows used in investing
activities for the first three months of fiscal 2008 and 2007 was $0.9 million and $0.3 million, respectively. The $0.6 million increase was primarily due to $0.3 million in Hampton Corners facility improvements as well as $0.3 million in purchases
of new heavy equipment.

Financing Activities  Net cash flows used in financing
activities was $7.0 million for the first three months of fiscal 2008 as compared to $0.5 million of net cash provided during the same period in fiscal 2007. The $7.5 million change was primarily related to net repayments on our revolving line of
credit of $6.5 million as compared to $4.0 million in net borrowings during the same period in fiscal 2007, a result of increased sales and therefore increased available cash in the first three months of fiscal 2008. The change was partially offset
by $3.0 million used to repurchase certain of our 91/2% Senior Secured Notes due 2014 during the first three months of fiscal
2007, whereas notes were not repurchased during the same period of fiscal 2008.



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##### Table of Contents

EBITDA

EBITDA
represents net income before interest expense, depreciation, depletion, and amortization (the Company does not incur income taxes). EBITDA does not represent and should not be considered as an alternative to net income or cash flow from operations,
as determined by GAAP, and our calculations of EBITDA may not be comparable to those reported by other companies. Investors should carefully consider the specific items included in our computation of EBITDA. EBITDA is included herein because it is a
basis upon which we assess our liquidity position and performance and because certain covenants in our borrowing arrangements are tied to similar measures. EBITDA is also included herein because we believe that it presents useful information to
investors regarding a companys ability to service and/or incur indebtedness. This belief is based on negotiations with lenders who have indicated that the amount of indebtedness we have been permitted to incur is based, in part, on measures
similar to our EBITDA. EBITDA does not take into account working capital requirements, capital expenditures, debt service requirements and other commitments, and accordingly, EBITDA is not necessarily indicative of amounts that may be available for
discretionary use.

The following table reconciles EBITDA to net income for the periods indicated:

American Rock Salt Company LLC

EBITDA Reconciliation to Net Income



|                                                            |  |                                |             |   |      |   |            |  
|----------------------------------------------------------- |  | ------------------------------ | ----------- | - | ---- | - | ---------- | -
|                                                            |  | Three Months EndedDecember 31, |            
|                                                            |  | 2007                           |             |   | 2006 |  
|Net Income to Member (s)                                    |  | $                              | 18,500,432  |   |      | $ | 613,649    |  
|Interest Expense                                            |  |                                | 3,107,715   |   |      |   | 3,273,078  |  
|Loss on sale or disposal of asset                           |  |                                | 4,271       |   |      |   |           |  
|Depletion, Depreciation and Amortization                    |  |                                | 1,520,270   |   |      |   | 1,520,685  |  
|                                                            |  |                                |             |   |      |   |            |  
|EBITDA                                                      |  | $                              | 23,132,688  |   |      | $ | 5,407,412  |  
|                                                            |  |                                |             |   |      |   |            |  
|Subtract                                                    |  |                                |             |   |      |   |            |  
|Interest Expense                                            |  |                                | (3,107,715  | ) |      |   | (3,273,078 | )
|Loss on sale or disposal of asset                           |  |                                | (4,271      | ) |      |   |           |  
|Changes in working capital and other assets and liabilities |  |                                | (10,246,091 | ) |      |   | (2,832,480 | )
|                                                            |  |                                |             |   |      |   |            |  
|Net cash provided by (used in) operating activities         |  | $                              | 9,774,611   |   |      | $ | (698,146   | )
|                                                            |  |                                |             |   |      |   |            |  
|Net cash used in investing activities                       |  | $                              | (917,414    | ) |      | $ | (254,522   | )
|                                                            |  |                                |             |   |      |   |            |  
|Net cash (used in) provided by financing activities         |  | $                              | (6,994,616  | ) |      | $ | 524,444    |  
|                                                            |  |                                |             |   |      |   |            |  

Contractual Cash Obligations

There have been no material changes outside the ordinary course of the Companys business to the Companys contractual cash obligations as reported in its Annual Report on Form 10-K for the fiscal year ended
September 30, 2007 filed with the SEC on December 28, 2007.



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##### Table of Contents

ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Companys business is subject to a variety of market risks, including but not limited to, interest rate risks and commodity pricing risks. Although the
Companys senior secured notes have a fixed interest rate, our bank facility is subject to variable interest rates keyed to LIBOR. As of December 31, 2007, we had $30.7 million outstanding under our bank facility and $91.0 million of debt
outstanding under our senior secured notes. Borrowings under our bank facility are subject to a variable rate. As of December 31, 2007 the variable rate was 5.75%. Our senior secured notes bear interest at a rate of 9 1/2% per annum. Our
bank facility, with an available aggregate amount of up to $51.2 million, currently consists of (a) a $21.2 million term loan facility, and (b) a $30.0 million working capital facility. The working capital facility permits us to borrow up
to $30.0 million in revolving loans with a sub-limit available for the issuance of letters of credit. As of December 31, 2007, there was $9.5 million drawn and $2.0 million of standby letters of credit outstanding under the working capital
facility.

Our earnings and cash flows are affected by changes in interest rates applicable to our bank facility. Assuming our current debt structure, a
$21.2 million term loan facility, and an average level of borrowings from our revolving credit facility at variable rates, and assuming a one hundred basis point increase in the average interest rate under these borrowings, we estimate that our
interest expense for the quarter ended December 31, 2007 would have increased by approximately $0.3 million.

ITEM 4.

CONTROLS AND PROCEDURES

The Companys management, with the participation of its Co-Principal Executive Officers and Principal Financial Officer, evaluated the effectiveness of the design and operation of the Companys disclosure
controls and procedures (as defined in Rule 15d-15(e) of the Securities Exchange Act of 1934, as amended (the Exchange Act)). Based on that evaluation, the Companys Co-Principal Executive Officers and its Principal Financial
Officer concluded that the Companys disclosure controls and procedures as of December 31, 2007 (the end of the period covered by this report) have been designed and are functioning effectively to provide reasonable assurance that the
information required to be disclosed by the Company in reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SECs rules and forms.

There were no changes to the Companys internal control over financial reporting that occurred during the fiscal quarter ended December 31, 2007 that
materially affected or are reasonably likely to materially affect the Companys internal control over financial reporting.



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##### Table of Contents

PART II. OTHER INFORMATION



|ITEM 1. | LEGAL PROCEEDINGS
|------- | -----------------

The Company is involved in various routine legal
proceedings from time to time. These typically involve commercial claims personal injury claims, and workers compensation claims. While the Company cannot predict the outcome of such proceedings, it does not believe that these proceedings will
have a material adverse effect on its business.



|ITEM 1A. | RISK FACTORS
|-------- | ------------

There have been no material changes to the risk
factors that the Company disclosed in its Annual Report on Form 10-K for the fiscal year ended September 30, 2007, filed with the SEC on December 28, 2007.



|ITEM 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|------- | -----------------------------------------------------------

Nothing to report.



|ITEM 3. | DEFAULTS UPON SENIOR SECURITIES
|------- | -------------------------------

Nothing to report.



|ITEM 4. | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
|------- | ---------------------------------------------------

At a special
meeting held on December 12, 2007, American Rock Salt Holdings, LLC, the sole member of the Company, voted to approve certain amendments to the operating agreement of the Company to eliminate the Class E Units from the Companys
capitalization.



|ITEM 5. | OTHER INFORMATION
|------- | -----------------

Nothing to report.



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##### Table of Contents

|ITEM 6. | EXHIBITS
|------- | --------

The following exhibits are filed as part of this report
on Form 10-Q:



|            |  |                                                                                                                                           
|----------- |  | ------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |  | Description of Exhibit                                                                                                                    
|31.1        |  | Certificate of the Co-Chief Executive Officer pursuant to 18 U.S.C. §1350 (Section 302 of the Sarbanes-Oxley Act of 2002) (filed herewith)
|            | 
|31.2        |  | Certificate of the Co-Chief Executive Officer pursuant to 18 U.S.C. §1350 (Section 302 of the Sarbanes-Oxley Act of 2002) (filed herewith)
|            | 
|31.3        |  | Certificate of the Co-Chief Executive Officer pursuant to 18 U.S.C. §1350 (Section 302 of the Sarbanes-Oxley Act of 2002) (filed herewith)
|            | 
|31.4        |  | Certificate of the Chief Financial Officer pursuant to 18 U.S.C. §1350 (Section 302 of the Sarbanes-Oxley Act of 2002) (filed herewith)   



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##### Table of Contents

SIGNATURES

The registrant has duly caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.



|                  |  |                                |  |                              
|----------------- |  | ------------------------------ |  | -----------------------------
|February 13, 2008 |  |                               
|                  | 
|                  |  | AMERICAN ROCK SALT COMPANY LLC
|                  |  |                               
|                  |  | By:                            |  | /s/ Raymond R. Martel        
|                  |  |                                |  | Raymond R. Martel,           
|                  |  |                                |  | Chief Financial Officer      
|                  |  |                                |  | (Principal Financial Officer)



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##### Table of Contents

EXHIBIT INDEX



|            |  |                                                                                                                                           
|----------- |  | ------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |  | Description of Exhibit                                                                                                                    
|31.1        |  | Certificate of the Co-Chief Executive Officer pursuant to 18 U.S.C. §1350 (Section 302 of the Sarbanes-Oxley Act of 2002) (filed herewith)
|            | 
|31.2        |  | Certificate of the Co-Chief Executive Officer pursuant to 18 U.S.C. §1350 (Section 302 of the Sarbanes-Oxley Act of 2002) (filed herewith)
|            | 
|31.3        |  | Certificate of the Co-Chief Executive Officer pursuant to 18 U.S.C. §1350 (Section 302 of the Sarbanes-Oxley Act of 2002) (filed herewith)
|            | 
|31.4        |  | Certificate of the Chief Financial Officer pursuant to 18 U.S.C. §1350 (Section 302 of the Sarbanes-Oxley Act of 2002) (filed herewith)   



17