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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549



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Form 10-Q



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(Mark One)

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

For the quarterly period ended June 30, 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



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AMERICAN ROCK SALT COMPANY LLC

(Exact Name of Registrant as Specified in its Charter)



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|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|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



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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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##### Table of Contents

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 91/2% Senior Secured Notes due 2014.

American Rock Salt Company LLC

INDEX



|           |  |                                                                                               |  |            
|---------- |  | --------------------------------------------------------------------------------------------- |  | -----------
|           |  |                                                                                               |  | Page Number
|Part I.    |  | Financial Information                                                                         |  |            
|           |  |                                                                                              
|Item 1.    |  | Financial Statements                                                                          |  |            
|           |  |                                                                                              
|           |  | Balance Sheets (Unaudited)June 30, 2007 and September 30, 2006                                |  | 2          
|           |  |                                                                                              
|           |  | Statements of Operations (Unaudited)Three and Nine Months Ended June 30, 2007 and 2006        |  | 3          
|           |  |                                                                                              
|           |  | Statement of Changes in Members Surplus (Deficit) (Unaudited)Nine Months Ended June 30, 2007 |  | 3          
|           |  |                                                                                              
|           |  | Statements of Cash Flows (Unaudited)Nine Months Ended June 30, 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                                    |  | 15         
|           |  |                                                                                              
|Item 4.    |  | Controls and Procedures                                                                       |  | 15         
|           |  |                                                                                              
|Part II.   |  | Other Information                                                                             |  |            
|           |  |                                                                                              
|Item 1.    |  | Legal Proceedings                                                                             |  | 16         
|           |  |                                                                                              
|Item 1A.   |  | Risk Factors                                                                                  |  | 16         
|           |  |                                                                                              
|Item 2.    |  | Unregistered Sales of Equity Securities and Use of Proceeds                                   |  | 16         
|           |  |                                                                                              
|Item 3.    |  | Defaults Upon Senior Securities                                                               |  | 16         
|           |  |                                                                                              
|Item 4.    |  | Submission of Matters to a Vote of Security Holders                                           |  | 16         
|           |  |                                                                                              
|Item 5.    |  | Other Information                                                                             |  | 16         
|           |  |                                                                                              
|Item 6.    |  | Exhibits                                                                                      |  | 17         
|           |  |                                                                                              
|Signatures |  |                                                                                               |  | 18         
|           |  |                                                                                              
|Exhibits   |  |                                                                                               |  | 19         



1



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##### Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1.

FINANCIAL STATEMENTS

American Rock Salt Company LLC

Balance Sheets

(Dollars in Thousands)

(Unaudited)



|                                                                                                                                             |  |               |         |                    |   |         |  
|-------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------- | ------- | ------------------ | - | ------- | -
|                                                                                                                                             |  | June 30, 2007 |         | September 30, 2006 |  
|Assets                                                                                                                                       |  |               |         |                    |   |         |  
|Current assets                                                                                                                               |  |               |         |                    |   |         |  
|Cash and equivalents                                                                                                                         |  | $             | 9,563   |                    | $ | 2,457   |  
|Accounts receivable, net of reserve for doubtful accounts of approximately $87 and $87 at June 30, 2007 and September 30, 2006,
respectively |  |               | 1,945   |                    |   | 6,338   |  
|Inventory, net                                                                                                                               |  |               | 26,840  |                    |   | 42,933  |  
|Prepaid expenses                                                                                                                             |  |               | 409     |                    |   | 1,039   |  
|                                                                                                                                             |  |               |         |                    |   |         |  
|Total current assets                                                                                                                         |  |               | 38,757  |                    |   | 52,767  |  
|Property and equipment, net                                                                                                                  |  |               | 81,011  |                    |   | 83,363  |  
|Other assets                                                                                                                                 |  |               |         |                    |   |         |  
|Salt deposits and mineral rights, net                                                                                                        |  |               | 2,551   |                    |   | 2,578   |  
|Mine acquisition costs, net                                                                                                                  |  |               | 378     |                    |   | 382     |  
|Financing costs, net of accumulated amortization                                                                                             |  |               | 4,851   |                    |   | 5,600   |  
|                                                                                                                                             |  |               |         |                    |   |         |  
|Total other assets                                                                                                                           |  |               | 7,780   |                    |   | 8,560   |  
|                                                                                                                                             |  |               |         |                    |   |         |  
|                                                                                                                                             |  | $             | 127,548 |                    | $ | 144,690 |  
|                                                                                                                                             |  |               |         |                    |   |         |  
|Liabilities and Members Equity                                                                                                              |  |               |         |                    |   |         |  
|Current liabilities                                                                                                                          |  |               |         |                    |   |         |  
|Revolving line of credit                                                                                                                     |  | $             |        |                    | $ | 21,050  |  
|Current portion of long-term debt                                                                                                            |  |               | 2,031   |                    |   | 1,959   |  
|Accounts payable                                                                                                                             |  |               | 2,620   |                    |   | 2,806   |  
|Accrued expenses                                                                                                                             |  |               | 4,271   |                    |   | 3,189   |  
|Related party payables                                                                                                                       |  |               | 272     |                    |   | 274     |  
|                                                                                                                                             |  |               |         |                    |   |         |  
|Total current liabilities                                                                                                                    |  |               | 9,194   |                    |   | 29,278  |  
|Long-term debt, net of current portion                                                                                                       |  |               | 114,177 |                    |   | 118,713 |  
|                                                                                                                                             |  |               |         |                    |   |         |  
|Total liabilities                                                                                                                            |  |               | 123,371 |                    |   | 147,991 |  
|                                                                                                                                             |  |              
|Members surplus (deficit)                                                                                                                   |  |               |         |                    |   |         |  
|Class A Units 6,250 units issued and outstanding at June 30, 2007 and September 30, 2006                                                     |  |               | 1,374   |                    |   | (1,086  | )
|Class F Units 12,750 units issued and outstanding at June 30, 2007 and September 30, 2006                                                    |  |               | 2,803   |                    |   | (2,215  | )
|                                                                                                                                             |  |               |         |                    |   |         |  
|                                                                                                                                             |  |               | 4,177   |                    |   | (3,301  | )
|                                                                                                                                             |  |               |         |                    |   |         |  
|                                                                                                                                             |  | $             | 127,548 |                    | $ | 144,690 |  
|                                                                                                                                             |  |               |         |                    |   |         |  

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



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American Rock Salt Company LLC

Statement of Operations

(Dollars in Thousands)

(Unaudited)



|                              |  |                            |        |   |                           |   |        |               |  |   |               |   |  |   |        |  
|----------------------------- |  | -------------------------- | ------ | - | ------------------------- | - | ------ | ------------- |  | - | ------------- | - |  | - | ------ | -
|                              |  | For the three months ended |        |   | For the nine months ended |  
|                              |  | June 30, 2007              |        |   | June 30, 2006             |   |        | June 30, 2007 |  |   | June 30, 2006 |  
|Sales                         |  |                            |        |   |                           |   |        |               |  |   |               |   |  |   |        |  
|Bulk                          |  | $                          | 7,479  |   |                           | $ | 2,659  |               |  | $ | 106,179       |   |  | $ | 85,163 |  
|Packaged                      |  |                            | 11     |   |                           |   |       |               |  |   | 2,170         |   |  |   | 1,813  |  
|                              |  |                            |        |   |                           |   |        |               |  |   |               |   |  |   |        |  
|Total sales                   |  |                            | 7,490  |   |                           |   | 2,659  |               |  |   | 108,349       |   |  |   | 86,976 |  
|                              |  |                            |        |   |                           |   |        |               |  |   |               |   |  |   |        |  
|Cost of sales                 |  |                            | 5,869  |   |                           |   | 2,050  |               |  |   | 80,711        |   |  |   | 59,009 |  
|                              |  |                            |        |   |                           |   |        |               |  |   |               |   |  |   |        |  
|Gross income                  |  |                            | 1,621  |   |                           |   | 609    |               |  |   | 27,638        |   |  |   | 27,967 |  
|Operating expenses            |  |                            | 2,168  |   |                           |   | 1,812  |               |  |   | 5,962         |   |  |   | 5,311  |  
|                              |  |                            |        |   |                           |   |        |               |  |   |               |   |  |   |        |  
|Income (loss) from operations |  |                            | (547   | ) |                           |   | (1,203 | )             |  |   | 21,676        |   |  |   | 22,656 |  
|                              |  |                            |        |   |                           |   |        |               |  |   |               |   |  |   |        |  
|Other income (expense)        |  |                            |        |   |                           |   |        |               |  |   |               |   |  |   |        |  
|Interest expense              |  |                            | (2,598 | ) |                           |   | (2,622 | )             |  |   | (8,544        | ) |  |   | (8,706 | )
|Interest income               |  |                            | 193    |   |                           |   | 61     |               |  |   | 339           |   |  |   | 97     |  
|Other financing charges       |  |                            | (1     | ) |                           |   | (5     | )             |  |   | (2            | ) |  |   | (70    | )
|Other, net                    |  |                            | (2     | ) |                           |   | 4      |               |  |   | 9             |   |  |   | 2,151  |  
|                              |  |                            |        |   |                           |   |        |               |  |   |               |   |  |   |        |  
|Total other expense, net      |  |                            | (2,408 | ) |                           |   | (2,562 | )             |  |   | (8,198        | ) |  |   | (6,528 | )
|                              |  |                            |        |   |                           |   |        |               |  |   |               |   |  |   |        |  
|Net income (loss)             |  | $                          | (2,955 | ) |                           | $ | (3,765 | )             |  | $ | 13,478        |   |  | $ | 16,128 |  
|                              |  |                            |        |   |                           |   |        |               |  |   |               |   |  |   |        |  

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

American Rock Salt Company LLC

Statement of Changes in Members Surplus (Deficit)

For the Nine Months Ended June 30, 2007

(Dollars in Thousands)

(Unaudited)



|                                      |  |               |        |   |               |   |        |       |  |   |        |  
|------------------------------------- |  | ------------- | ------ | - | ------------- | - | ------ | ----- |  | - | ------ | -
|                                      |  | Class A Units |        |   | Class F Units |   |        | Total | 
|Members deficit - September 30, 2006 |  | $             | (1,086 | ) |               | $ | (2,215 | )     |  | $ | (3,301 | )
|                                      |  |               |       
|Net income                            |  |               | 4,434  |   |               |   | 9,044  |       |  |   | 13,478 |  
|Distribution                          |  |               | (1,974 | ) |               |   | (4,026 | )     |  |   | (6,000 | )
|                                      |  |               |        |   |               |   |        |       |  |   |        |  
|Members surplus - June 30, 2007      |  | $             | 1,374  |   |               | $ | 2,803  |       |  | $ | 4,177  |  
|                                      |  |               |        |   |               |   |        |       |  |   |        |  

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

(Dollars in Thousands)

(Unaudited)



|                                                                                 |  |                           |         |   |               |   |         |  
|-------------------------------------------------------------------------------- |  | ------------------------- | ------- | - | ------------- | - | ------- | -
|                                                                                 |  | June 30, 2007             |         |   | June 30, 2006 |  
|Cash flows from operating activities                                             |  |                           |         |   |               |   |         |  
|Net income                                                                       |  | $                         | 13,478  |   |               | $ | 16,128  |  
|Adjustments to reconcile net income to net cash provided by operating activities |  |                           |         |   |               |   |         |  
|Depreciation                                                                     |  |                           | 3,552   |   |               |   | 3,525   |  
|Depletion                                                                        |  |                           | 31      |   |               |   | 23      |  
|Amortization of mine acquisition and financing costs                             |  |                           | 749     |   |               |   | 578     |  
|Changes in Accounts receivable                                                   |  |                           | 4,393   |   |               |   | 6,218   |  
|Inventory                                                                        |  |                           | 16,093  |   |               |   | (1,917  | )
|Prepaid expenses and other assets                                                |  |                           | 630     |   |               |   | 269     |  
|Accounts payable                                                                 |  |                           | (186    | ) |               |   | (887    | )
|Accrued expenses                                                                 |  |                           | 1,082   |   |               |   | (547    | )
|Related party payables                                                           |  |                           | (2      | ) |               |   | (152    | )
|                                                                                 |  |                           |         |   |               |   |         |  
|Net cash provided by operating activities                                        |  |                           | 39,820  |   |               |   | 23,238  |  
|                                                                                 |  |                           |         |   |               |   |         |  
|Cash flows from investing activities                                             |  |                           |         |   |               |   |         |  
|Purchase of property and equipment                                               |  |                           | (1,200  | ) |               |   | (3,315  | )
|                                                                                 |  |                           |         |   |               |   |         |  
|Net cash used in investing activities                                            |  |                           | (1,200  | ) |               |   | (3,315  | )
|                                                                                 |  |                           |         |   |               |   |         |  
|Cash flows from financing activities                                             |  |                           |         |   |               |   |         |  
|Repayments on long-term debt                                                     |  |                           | (1,464  | ) |               |   | (3,258  | )
|Repayments on revolving line of credit                                           |  |                           | (21,050 | ) |               |   | (13,700 | )
|Distribution to Members                                                          |  |                           | (6,000  | ) |               |   | (4,611  | )
|Increase in Bond Holding                                                         |  |                           | (3,000  | ) |               |   |        |  
|                                                                                 |  |                           |         |   |               |   |         |  
|Net cash used in financing activities                                            |  |                           | (31,514 | ) |               |   | (21,569 | )
|                                                                                 |  |                           |         |   |               |   |         |  
|Net increase in cash and equivalents                                             |  |                           | 7,106   |   |               |   | (1,646  | )
|Cash and equivalents - beginning of period                                       |  |                           | 2,457   |   |               |   | 2,234   |  
|                                                                                 |  |                           |         |   |               |   |         |  
|Cash and equivalents - end of period                                             |  | $                         | 9,563   |   |               | $ | 588     |  
|                                                                                 |  |                           |         |   |               |   |         |  
|                                                                                 |  |                          
|Supplemental Disclosure of Cash Flow Activities                                  |  |                           |         |   |               |   |         |  
|                                                                                 |  | For the nine months ended |        
|                                                                                 |  | June 30, 2007             |         |   | June 30, 2006 |  
|Cash paid for interest                                                           |  | $                         | 6,539   |   |               | $ | 5,940   |  
|                                                                                 |  |                           |         |   |               |   |         |  

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.

On June 12, 2007, the Company entered into an Agreement of Merger (the Merger Agreement) dated as of June 12, 2007, but effective as
of June 13, 2007, with ARS Mergeco LLC, a New York limited liability company (Mergeco) and a wholly-owned subsidiary of American Rock Salt Holdings LLC, a New York limited liability company (Holdings). Upon consummation
of the merger and pursuant to the terms of the Merger Agreement, each of the membership interests in the Company was converted into a corresponding membership interest in Holdings, Mergeco was merged with and into the Company, and the Company became
a wholly-owned subsidiary of Holdings. Holdings is a holding company and has no assets or operations other than its ownership of all of the equity interests of the Company.



|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, 2006 included in the Companys Annual Report on Form 10-K, filed with the Securities and Exchange Commission (the SEC) on December 28, 2006. 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 and nine month periods ended June 30, 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, 2006 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 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:



|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  |               |             |   |                    |   |             |  
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------- | ----------- | - | ------------------ | - | ----------- | -
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  | June 30, 2007 |             |   | September 30, 2006 |  
|Senior Secured Notes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  |               |             |   |                    |   |             |  
|Senior Secured Notes at June 30, 2007 of $93,955,000 currently requiring semi annual interest payments through the final maturity date of
March 15, 2014 at an annual rate of 9.50%. Prior to June 30, 2007, 35% of the aggregate principal amount of the notes at the established price plus accrued and unpaid interest may under certain circumstances be redeemed at 109.5%. 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 |  |               | 93,955,000  |   |                    |   | 96,955,000  |  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  |              
|Senior Term Loan                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  |               |             |   |                    |   |             |  
|Senior Term Loan at June 30, 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 3.5%, 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 5.875% as of June 30, 2007                                                                                                                                                                    |  |               | 22,147,253  |   |                    |   | 23,592,428  |  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  |              
|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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |  |               | 105,607     |   |                    |   | 124,895     |  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  |               |             |   |                    |   |             |  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  |               | 116,207,860 |   |                    |   | 120,672,323 |  
|Less: Current maturities of long-term debt                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |  |               | (2,031,092  | ) |                    |   | (1,959,015  | )
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  |               |             |   |                    |   |             |  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  | $             | 114,176,768 |   |                    | $ | 118,713,308 |  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  |               |             |   |                    |   |             |  

The Companys bank facility in the aggregate principal amount of $52.1 million consists of:
(a) a $22.1 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 June 30, 2007 a
balance of $22.1 million was outstanding under the term loan facility, bearing interest at a rate of 5.875%.

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
June 30, 2007, the Company had $0.0 million drawn and $2.0 million of standby letters of credit outstanding under the working capital facility, with approximately $28.0 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 5.875%.



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

Inventory consisted of the following at:



|                     |  |               |        |   |                    |   |        |  
|-------------------- |  | ------------- | ------ | - | ------------------ | - | ------ | -
|                     |  | June 30, 2007 |        |   | September 30, 2006 |  
|Supplies             |  | $             | 1,738  |   |                    | $ | 1,191  |  
|Finished Goods, Salt |  |               | 25,146 |   |                    |   | 41,779 |  
|                     |  |               |        |   |                    |   |        |  
|                     |  |               | 26,884 |   |                    |   | 42,970 |  
|Less:                |  |               |        |   |                    |   |        |  
|Reserve              |  |               | (44    | ) |                    |   | (37    | )
|                     |  |               |        |   |                    |   |        |  
|                     |  | $             | 26,840 |   |                    | $ | 42,933 |  
|                     |  |               |        |   |                    |   |        |  



|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 $0.2
million during the three months ended, and $0.2 million and $0.4 million for the nine months ended June 30, 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 $0.2 million and $0.1 million during the three months ended, and $0.4 million and $0.6 million for the nine months ended June 30, 2007 and 2006, respectively. These amounts are
included in operating expenses.

Additionally, expenses were incurred to certain affiliates for goods and services of approximately $0.4
million and $0.4 million during the three months ended, and $1.3 million and $1.4 million for the nine months ended June 30, 2007 and 2006, respectively. Of those amounts, the following amounts were included in cost of sales: for the three
months ended June 30, 2007, approximately $0.4 million; for the three months ended June 30, 2006, approximately $0.2 million; for the nine months ended June 30, 2007, approximately $1.0 million; and for the nine months ended
June 30, 2006, approximately $1.1 million. The remaining amounts not included in cost of sales are included 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 $0.2 million and $0.1 million during the three
months ended, and $2.6 million and $2.3 million for the nine months ended June 30, 2007 and 2006, respectively. These amounts are accrued in related party payables and included in cost of sales.



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

In connection with the holding
company reorganization described above, Holdings entered into a seven and one-half year $100.0 million aggregate principal amount senior unsecured term loan facility on July 3, 2007 with Morgan Stanley Senior Funding, Inc. as the initial lender
and administrative agent. In connection with that loan, the Company became a Restricted Subsidiary, as defined, of Holdings. Holdings is required to cause the Company to pay a cash dividend to Holdings annually, commencing with the fiscal year
ending September 30, 2007. The dividend must be paid on or before April 10 of each year, which will allow the timing of the dividend to be consistent with past practices of the Company. The amount of the dividend must be no less than 75.0%
of its available free cash flow, wherein available free cash flow includes a number of financial components in its determination but cannot exceed the amount the Company is permitted to pay as a cash distribution under its
existing credit facilities or the indenture governing its senior secured notes. As a Restricted Subsidiary, the Company is subject to financial and other restrictions that are comparable to existing restrictions under the Companys senior
secured 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, 2006, filed with the SEC on December 28, 2006, 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 52 years of remaining mineable reserves at the current 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 9.3 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 June 30, 2007, we generated revenues of $7.5 million, with a net loss of $3.0 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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##### Table of Contents

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. As such, 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 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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##### Table of Contents

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

(Dollars in
Thousands)



|                              |  |                            |        |   |                           |   |        |               |  |   |               |   |  |   |        |  
|----------------------------- |  | -------------------------- | ------ | - | ------------------------- | - | ------ | ------------- |  | - | ------------- | - |  | - | ------ | -
|                              |  | For the three months ended |        |   | For the nine months ended |  
|                              |  | June 30, 2007              |        |   | June 30, 2006             |   |        | June 30, 2007 |  |   | June 30, 2006 |  
|Sales                         |  |                            |        |   |                           |   |        |               |  |   |               |   |  |   |        |  
|Bulk                          |  | $                          | 7,479  |   |                           | $ | 2,659  |               |  | $ | 106,179       |   |  | $ | 85,163 |  
|Packaged                      |  |                            | 11     |   |                           |   |       |               |  |   | 2,170         |   |  |   | 1,813  |  
|                              |  |                            |        |   |                           |   |        |               |  |   |               |   |  |   |        |  
|Total sales                   |  |                            | 7,490  |   |                           |   | 2,659  |               |  |   | 108,349       |   |  |   | 86,976 |  
|                              |  |                            |        |   |                           |   |        |               |  |   |               |   |  |   |        |  
|Cost of sales                 |  |                            | 5,869  |   |                           |   | 2,050  |               |  |   | 80,711        |   |  |   | 59,009 |  
|                              |  |                            |        |   |                           |   |        |               |  |   |               |   |  |   |        |  
|Gross income                  |  |                            | 1,621  |   |                           |   | 609    |               |  |   | 27,638        |   |  |   | 27,967 |  
|Operating expenses            |  |                            | 2,168  |   |                           |   | 1,812  |               |  |   | 5,962         |   |  |   | 5,311  |  
|                              |  |                            |        |   |                           |   |        |               |  |   |               |   |  |   |        |  
|Income (loss) from operations |  |                            | (547   | ) |                           |   | (1,203 | )             |  |   | 21,676        |   |  |   | 22,656 |  
|                              |  |                            |        |   |                           |   |        |               |  |   |               |   |  |   |        |  
|Other income (expense)        |  |                            |        |   |                           |   |        |               |  |   |               |   |  |   |        |  
|Interest expense              |  |                            | (2,598 | ) |                           |   | (2,622 | )             |  |   | (8,544        | ) |  |   | (8,706 | )
|Interest income               |  |                            | 193    |   |                           |   | 61     |               |  |   | 339           |   |  |   | 97     |  
|Other financing charges       |  |                            | (1     | ) |                           |   | (5     | )             |  |   | (2            | ) |  |   | (70    | )
|Other, net                    |  |                            | (2     | ) |                           |   | 4      |               |  |   | 9             |   |  |   | 2,151  |  
|                              |  |                            |        |   |                           |   |        |               |  |   |               |   |  |   |        |  
|Total other expense, net      |  |                            | (2,408 | ) |                           |   | (2,562 | )             |  |   | (8,198        | ) |  |   | (6,528 | )
|                              |  |                            |        |   |                           |   |        |               |  |   |               |   |  |   |        |  
|Net income (loss)             |  | $                          | (2,955 | ) |                           | $ | (3,765 | )             |  | $ | 13,478        |   |  | $ | 16,128 |  
|                              |  |                            |        |   |                           |   |        |               |  |   |               |   |  |   |        |  

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. The quarter ended June 30 is historically the lowest volume quarter of our fiscal year, with average tons sold approximately 6% of the quarter ended March 31 volumes. As a result of the low volume base for the
quarter ended June 30, we can experience large percentage fluctuations in financial data for quarter-to-quarter comparisons, which often do not equate to significant swings on a whole dollar basis. Our results of operations for the fiscal year
ended September 30 and the nine months ended June 30 are more representative of trends in our results.

Due to the fact that weather conditions
in the Companys market areas had been much milder than normal during the first quarter of the current fiscal year, the Company accumulated a substantial amount of inventory of salt available for distribution to its customers. As a result, the
Company elected to temporarily cease production of salt commencing December 26, 2006 for approximately five weeks. By mid-January vigorous winter weather patterns returned producing snowfall nearly every day through mid-March within the market
areas served. This allowed for the return of the workforce in February and the resumption of mining operations which continued seven days a week to meet demand. Winter weather continued into the month of April, enhancing late season sales in much of
our market area.

The nine-month periods ended June 30, 2007 and June 30, 2006 overall presented unseasonably warm and dry winter weather
patterns, when compared to historical averages. Our market area in spite of this continued to provide sufficient winter weather conditions to require salting of roadways which in turn allowed us to experience satisfactory financial results. When
each of the past two winter seasons are viewed as compared to an average winter season, our financial results were very strong. For the first time in our history we exceeded $100.0 million in gross sales for nine months during the period ended
June 30, 2007. We believe our ability to produce favorable financial results despite milder than normal weather for a prolonged period is a product of our physical location in the market which includes consistent lake effect snow.



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##### Table of Contents

Three Months Ended June 30, 2007 Compared to Three Months Ended June 30, 2006

Sales

Total sales for the quarter ended June 30, 2007 of $7.5
million increased $4.8 million, or 177.8%, compared to $2.7 million during the same period in fiscal 2006. Sales primarily consist of bulk salt sales, as well as packaged salt sales. The $4.8 million increase is primarily attributed to a 186.9%
increase in tonnage sold in the third quarter of fiscal 2007, offset by a 1.8% decrease in average sales price per ton, as compared to the third quarter of fiscal 2006. The increase in sales volume is attributable to higher demand related to
stockpiling purchases by our customers as well as the continuation of winter weather into the quarter ended June 30, 2007 as compared to the same period in fiscal 2006.

Gross Income

Gross income for the third quarter of fiscal 2007 of $1.6 million increased by $1.0 million, or 166.7%
compared to $0.6 million for the same period in fiscal 2006. The increase in gross income was primarily attributable to the 186.9% increase in tonnage sold during the quarter ended June 30, 2007 as compared to the same period in fiscal 2006 as
described above. Gross profit per ton for the third fiscal quarter decreased by 7.2% as compared to the same period in fiscal 2006 as a result of the decrease in average sales price per ton related to the quarters sales mix between local and
remote stockpiles for the quarter ended June 30, 2007 as compared to the quarter ended June 30, 2006. Total cost of sales for the third quarter of fiscal 2007 increased by $3.8 million, or 186.3%, as compared to the same period in fiscal
2006; while on a percentage of sales basis, total cost of sales increased by 1.2%. The increase in cost of sales is primarily the result of the significant increase in sales volume as compared to the same period in fiscal 2006. Cost of sales on a
per ton basis for the quarter ended June 30, 2007 remained consistent as compared to the same period in fiscal 2006.

Operating Expenses

Operating expenses of $2.2 million for the third quarter of fiscal 2007 increased by $0.4 million or 22.2% compared to $1.8 million for the same period
in fiscal 2006. The increase in operating expenses was due to a $0.4 million increase in consulting and legal fees primarily related to the merger and consent solicitation transactions, described in Part II, Item 4.

Other Income (Expense)

Other expense of $2.4 million for the third quarter of fiscal 2007 decreased $0.2 million, or 6.0%, compared to $2.6 million for the same period in fiscal 2006. The decrease in other expense is primarily due to $0.1 million increase in
interest income related to a higher average cash balance in the daily credit sweep as well as a $0.1 million decrease in bond interest expense related to our repurchase of certain of our 91/2% Senior Secured Notes due 2014 during the first quarter of fiscal 2007.



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##### Table of Contents

Nine Months Ended June 30, 2007 Compared to Nine Months Ended June 30, 2006

Sales

Total sales for the nine months ended June 30, 2007 of
$108.3 million increased $21.4 million, or 24.6%, compared to $87.0 million during the same period in fiscal 2006. Sales primarily consist of bulk salt sales, as well as packaged salt sales. The $21.4 million increase is primarily attributed to a
16.2% increase in tonnage sold during the first nine months of fiscal 2007, in addition to a 7.2% increase in average sales price per ton, as compared to the same nine month period of fiscal 2006. The increase in sales volume is attributable to
higher demand related to the vigorous winter weather experienced during portions of the nine months ended June 30, 2007, compared to the milder winter weather conditions which persisted during the nine months ended June 30, 2006.

Gross Income

Gross income for the nine months ended
June 30, 2007 of $27.6 million decreased by $0.4 million, or 1.4%, compared to $28.0 million for the same period in fiscal 2006. The decrease in gross income was primarily attributable to a 17.7% increase in average cost of sales per ton,
partially offset by the 16.2% increase in tonnage sold over the same period in fiscal 2006. Total cost of sales for the first nine months of fiscal 2007 increased by $21.7 million or 36.8%, as compared to the same period in fiscal 2006; while on a
percentage of sales basis, total cost of sales increased by 6.6%. Gross profit per ton for the first nine months of fiscal 2007 decreased by 15.0% as a result of the increase in cost of sales price per ton, partially offset by the increase in the
average sales price per ton referred to above. The increase in cost of sales per ton is primarily due to the temporary cessation of salt production and inventory staging activities during the first and second quarters of fiscal 2007. All of these
factors were related to the milder than normal winter weather we experienced during those first two fiscal quarters which resulted in less efficient absorption of our production, freight and handling costs during the nine months ended June 30,
2007.

Operating Expenses

Operating expenses of $6.0
million for the nine months ended June 30, 2007 increased by $0.7 million, or 13.2%, as compared to $5.3 million for the same period in fiscal 2006. Operating expenses primarily consist of selling, general and administrative expenses,
miscellaneous overhead and non-production related depreciation and amortization expenses. The increase in operating expenses was primarily due to $0.4 million in idle rail car expense related to the milder than normal winter weather experienced in
the first and second quarters of fiscal 2007, combined with a $0.4 million increase in consulting and legal fees during the third quarter of the current fiscal year primarily related to the merger and consent solicitation transactions described in
Part II, Item 4. These increases were partially offset by a $0.1 million reduction in miscellaneous expenses.

Other Income (Expense)

Other expense of $8.2 million for the first nine months of fiscal 2007 increased by $1.7 million, or 26.2%, compared to $6.5 million for the same
period in fiscal 2006. The increase in other expense is primarily due to $2.1 million received during the third quarter of fiscal 2006 in connection with the settlement of litigation with the mine contractor, offset by a $0.2 million increase in
interest income related to a higher average cash balance in the daily credit sweep as well as a $0.2 million decrease in bond interest expense related to our repurchase of certain of our Senior Secured Notes due 2014 during the first quarter of
fiscal 2007.

Liquidity and Capital Resources

Historical Cash Flow

We have used the cash generated from operations, borrowings under revolving lines of credit, and borrowings under
construction and post-construction financing facilities to meet our working capital needs and to fund capital expenditures. Additional information regarding our cash flows for the nine month period ended June 30, 2007 is provided below.

Operating Activities - Net cash provided by operating activities was $39.8 million for the first nine months of fiscal 2007 compared to
$23.2 million during the same period in fiscal 2006. The $16.6 million increase is primarily related to the late arrival of vigorous winter weather and increased sales occurring during the second and third quarters of fiscal year 2007 which resulted
in an $18.0 million positive cash flow change related to inventory when compared with the first nine months of fiscal 2006, offset by a $2.7 million decrease in net income. The change in net income is primarily related to $2.1 million received
during the third quarter of fiscal 2006 in connection with the settlement of litigation with the mine contractor as well an increase in average cost of sales per ton discussed above.



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##### Table of Contents

For the nine month period ended June 30, 2007, the $39.8 million in net cash from operating activities was primarily
attributable to net income of $13.5 million, a decrease in inventory of $16.1 million and a decrease in accounts receivable of $4.4 million, each related to the late arrival of vigorous winter weather and increased sales occurring during the second
and third quarters of fiscal year 2007. Cash provided by operating activities during the nine months ended June 30, 2007, was also the result of depreciation and amortization of $4.3 million; a decrease in prepaid expenses and other assets of
$0.6 million, a result of timing of the amortization of our prepaid expenses; and an increase in accrued expenses of $1.1 million, a result of late timing of invoicing. This positive operating cash flow activity was offset by a $0.2 million decrease
in accounts payable related to the timing of regular payments.

Investing Activities - Net cash flow used in investing activities for the
first nine months of fiscal 2007 and 2006 was $1.2 million and $3.3 million respectively. The change is attributable to a decrease in the purchase of property and equipment in the first nine months of fiscal 2007 as compared to the same prior year
period.

Financing Activities -Net cash used in financing activities was $31.5 million for the first nine months of fiscal 2007 as compared
to $21.6 million used during the same period in fiscal 2006. During the nine months ended June 30, 2007, repayments, net of borrowing, on our revolving credit facility totaled $21.0 million, and we used an additional $3.0 million to repurchase
certain of our

9 1/2% Senior Secured Notes due 2014 and made a principal payment of $1.5 million under our term loan facility. We also paid a distribution
of $6.0 million to our then-current members during the nine months ended June 30, 2007, out of fiscal year end 2006 earnings. The increase in borrowings and subsequent repayments during the nine months ended June 30, 2007 was primarily due
to the milder than normal winter weather during the first quarter of fiscal 2007. Our repayment of amounts outstanding under our revolving credit facility by the end of the third quarter of fiscal 2007 is consistent with our practice in prior years.

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.



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##### Table of Contents

The following table reconciles EBITDA to net income for the periods indicated (dollars in thousands):

American Rock Salt Company LLC

EBITDA Reconciliation to Net Income



|                                                            |  |                             |        |   |                            |   |        |      |  |   |         |   |  |   |         |  
|----------------------------------------------------------- |  | --------------------------- | ------ | - | -------------------------- | - | ------ | ---- |  | - | ------- | - |  | - | ------- | -
|                                                            |  | Three Months Ended June 30, |        |   | Nine Months Ended June 30, |  
|                                                            |  | 2007                        |        |   | 2006                       |   |        | 2007 |  |   | 2006    |  
|Net Income to Member (s)                                    |  | $                           | (2,955 | ) |                            | $ | (3,765 | )    |  | $ | 13,478  |   |  | $ | 16,128  |  
|Interest Expense                                            |  |                             | 2,598  |   |                            |   | 2,622  |      |  |   | 8,544   |   |  |   | 8,706   |  
|Depletion, Depreciation and Amortization                    |  |                             | 1,426  |   |                            |   | 1,316  |      |  |   | 4,332   |   |  |   | 4,126   |  
|                                                            |  |                             |        |   |                            |   |        |      |  |   |         |   |  |   |         |  
|EBITDA                                                      |  | $                           | 1,069  |   |                            | $ | 173    |      |  | $ | 26,354  |   |  | $ | 28,960  |  
|                                                            |  |                             |        |   |                            |   |        |      |  |   |         |   |  |   |         |  
|Add/Subtract                                                |  |                             |        |   |                            |   |        |      |  |   |         |   |  |   |         |  
|Interest Expense                                            |  |                             | (2,598 | ) |                            |   | (2,622 | )    |  |   | (8,544  | ) |  |   | (8,706  | )
|Changes in working capital and other assets and liabilities |  |                             | 10,010 |   |                            |   | (3,160 | )    |  |   | 22,010  |   |  |   | 2,984   |  
|                                                            |  |                             |        |   |                            |   |        |      |  |   |         |   |  |   |         |  
|Net cash provided by operating activities                   |  | $                           | 8,481  |   |                            | $ | (5,609 | )    |  | $ | 39,820  |   |  | $ | 23,238  |  
|                                                            |  |                             |        |   |                            |   |        |      |  |   |         |   |  |   |         |  
|Net cash used in investing activities                       |  | $                           | (766   | ) |                            | $ | (365   | )    |  | $ | (1,200  | ) |  | $ | (3,315  | )
|                                                            |  |                             |        |   |                            |   |        |      |  |   |         |   |  |   |         |  
|Net cash used in financing activities                       |  | $                           | (6,495 | ) |                            | $ | (2,506 | )    |  | $ | (31,514 | ) |  | $ | (21,569 | )
|                                                            |  |                             |        |   |                            |   |        |      |  |   |         |   |  |   |         |  



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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, 2006, filed
with the SEC on December 28, 2006.

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 bear interest at a fixed rate of 9.5% per annum, borrowings under its bank facility are subject to variable interest rates keyed to LIBOR. As of June 30, 2007 the variable rate was 5.875%. As of June 30, 2007, we
had $94.0 million of debt outstanding under our senior secured notes, and $22.1 million outstanding under our bank facility. Our bank facility, in the aggregate principal amount of $52.1 million, consists of (a) a $22.1 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 $7.0 million sub-limit available for the issuance of letters of credit. As of
June 30, 2007, there was $0.0 million drawn and $2.0 million of standby letters of credit outstanding under the working capital facility with approximately $28.0 million of remaining availability thereunder.

Our earnings and cash flows are affected by changes in interest rates applicable to our bank facility. Given our current debt structure and assuming an average level of
borrowings under our revolving credit facility at variable rates and a one hundred basis point increase in the average interest rate applicable to these borrowings, it is estimated that our interest expense for the quarter ended June 30, 2007
would have increased by $0.1 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 June 30, 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 June 30, 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, 2006, filed with the SEC on December 28, 2006.

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

Special Meeting of Members

On June 11, 2007, the Company held a special meeting of members. Members holding in the aggregate 3,274 Class A Units and 12,251.475 Class F Units (together
totaling 81.7% of the outstanding membership interests in the Company) were in attendance in person or by proxy. The following proposals were considered and unanimously approved by those members attending the meeting (in person or by proxy):



|(a) | the creation of two new subsidiaries to be used to effectuate a merger transaction whereby the Company would become a wholly-owned subsidiary of American Rock Salt Holdings LLC
(Holdings), and the existing equity interests of the Company would effectively be converted into mirroring equity interests in Holdings (the Merger);
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(b) | the following transactions proposed to be effected in connection with the Merger:
|--- | ---------------------------------------------------------------------------------



| | (i) | the adoption of the amended and restated operating agreement of Holdings in the form provided to the members of the Company;
| | --- | ----------------------------------------------------------------------------------------------------------------------------



| | (ii) | the issuance by Holdings of between approximately $80,000,000 to $125,000,000 in unsecured PIK notes, the net proceeds of which would be used to pay the fees and expenses of the
offering and the balance to fund a distribution to holders of Holdings common units (i.e., the then-current common members of the Company); and
| | ---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (iii) | the solicitation by the Company of the consent of the holders of the Companys 91/2% Senior Secured Notes due 2014 (the Notes) to amend the indenture governing the Notes to delete the requirement to file periodic
and current reports with the Securities and Exchange Commission and instead require information to be provided the trustee and the holders of the Notes and made available via the Internet (the Consent Solicitation).
| | ----- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Consent Solicitation

On
June 13, 2007, the Company commenced the Consent Solicitation. The Consent Solicitation expired at 5:00 p.m., New York City time, on June 27, 2007 without the Company having received the requisite consent of a majority of the principal
amount of outstanding Notes. As a result, the indenture was not amended.

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                                                                                                                                                                                                                                                       
|2.1         |  | Agreement of Merger, dated as of June 12, 2007, but effective as of June 13, 2007, by and between the Company and ARS Mergeco LLC (filed as Exhibit 2.1 to the Companys Current Report on
Form 8-K filed with the SEC on June 13, 2007 and incorporated herein by reference)
|            | 
|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.

August 8, 2007



AMERICAN ROCK SALT COMPANY LLCBy:

/s/ Raymond R. MartelRaymond R. Martel,Chief Financial Officer(Principal Financial Officer)




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##### Table of Contents

EXHIBIT INDEX



|            |  |                                                                                                                                                                                                                                                                              
|----------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |  | Description of Exhibit                                                                                                                                                                                                                                                       
|2.1         |  | Agreement of Merger, dated as of June 12, 2007, but effective as of June 13, 2007, by and between the Company and ARS Mergeco LLC (filed as Exhibit 2.1 to the Companys Current Report on
Form 8-K filed with the SEC on June 13, 2007 and incorporated herein by reference)
|            | 
|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)                                                                                                                                      



19