Intrepid Potash, Inc. ("Intrepid", the "Company", "we", "us",
"our") (NYSE:IPI) today reported its results for the first quarter
of 2024.
Key Highlights for First Quarter 2024
Financial & Operational
- Total sales of $79.3 million, which compares to $86.9 million
in the first quarter of 2023.
- Net loss of $3.1 million (or $0.24 per diluted share), which
compares to net income of $4.5 million (or $0.35 per diluted share)
in the first quarter of 2023.
- Gross margin of $6.4 million, which compares to $16.4 million
in the first quarter of 2023.
- Cash flow provided by operations of $41.5 million, which
compares to $8.4 million of cash flow provided by operations
in the first quarter of 2023. First quarter 2024 cash flow from
operations includes $45 million received from XTO Holdings under
the amended Cooperative Development Agreement.
- Adjusted EBITDA(1) of $7.7 million, which compares to $16.4
million in the first quarter of 2023.
- Potash and Trio® sales volumes of 74 thousand and 91 thousand
tons, respectively, which compares to the first quarter of 2023 of
89 thousand and 65 thousand tons, respectively.
- Potash and Trio® average net realized sales prices(1) of $395
and $300 per ton, respectively, which compares to the first quarter
of 2023 of $485 and $344 per ton, respectively.
Management & Board of Director Updates
- On April 16, 2024, Intrepid's Executive Chairman and CEO, Bob
Jornayvaz, was granted a temporary medical leave of absence. In
connection with Mr. Jornayvaz’s leave of absence, the Board
appointed Matt Preston, Chief Financial Officer, as acting
principal executive officer and appointed Intrepid’s co-founder,
Hugh Harvey, as a Class III Director. The Board also temporarily
delegated all responsibilities of the Chairman of the Board to
Barth Whitham, Intrepid’s Lead Director.
Capital Expenditures
- Capital expenditures were $11.7 million in the first quarter of
2024. We still expect full-year 2024 capital expenditures of $40
million to $50 million.
- Our capital expenditures continue to be primarily focused on
our potash assets to help us meet our goals of maximizing brine
availability and underground brine residence time, which will help
drive higher and more consistent potash production and improve our
unit economics.
Project & Operational Updates
- HB Solar Solution Mine in Carlsbad, New Mexico
- Eddy Shaft Brine Extraction Project: After commissioning this
project in October 2023, we have extracted approximately 205
million gallons of brine, which corresponds to approximately 75
thousand potash product tons.
- Replacement Extraction Well ("IP30B"): We successfully drilled
IP30B and are completing installation of the surface infrastructure
and pumps. This project remains on schedule to be complete in the
second quarter of 2024.
- Phase Two of HB Injection Pipeline Project: Phase Two is the
installation of an in-line pigging system to clean the pipeline and
remove scaling to help ensure more consistent flow rates. We
received the final permits in April and we expect to commission the
project in the third quarter of 2024. Upon Phase Two commissioning,
we expect brine injection rates at HB to be the highest in company
history, which is key for maximizing brine availability and
residence time.
- Brine Recovery Mine in Wendover, Utah
- Primary Pond 7 ("PP7"): Construction of PP7 is nearing
completion and the pond has started to receive brine. This new
primary pond will increase the brine evaporative area at Wendover
and will help us meet our goals of maximizing brine availability,
increasing brine grade, and improving production. We expect this
project to be complete in the second quarter of 2024.
- Lithium Project: We are still in the process of reviewing deal
structures with potential partners. The lithium already present in
our byproduct magnesium brine is estimated to support approximately
two thousand tons of lithium carbonate production per year assuming
a commercially feasible extraction technology.
- Intrepid South
- Sand Project: We have the necessary permits and are currently
in the process of reviewing deal structures with potential partners
to develop the sand resource. This project is planned to have a
productive capacity of one million tons of wet sand per year and we
estimate that the underlying resource contains enough sand to
support decades of production.
- East Underground
Trio® Mine
- Revised operating schedule - lower direct costs and reduced
capital expenditures: Due to improved mining rates from the two new
continuous miners, in the first quarter of 2024, we moved to a
reduced operating schedule of four days underground and three days
of surface operations per week. In conjunction with the reduced
schedule and recent improvements in our pellet production rates, we
also restarted our fine langbeinite recovery system in March 2024.
The reduced schedule has the benefit of lowering our direct
production costs through reduced labor, fewer contract employees,
and reduced capital requirements in the near-term due to decreased
mine development work. Overall, we expect our 2024 cash production
costs at our East mine to decrease by approximately $8 million to
$10 million, or 12% to 15%, when compared to the prior year. We
expect our 2024 production volumes will be similar to the prior
year and we'll continue to evaluate options to improve margins at
our East facility.
Liquidity
- As of May 3, 2024, Intrepid had approximately $46.5 million in
cash and cash equivalents and $150 million available under its
revolving credit facility, for total liquidity of approximately
$196.5 million.
- Intrepid maintains an investment account of short-and-long-term
fixed income securities that had a balance of approximately $3.4
million as of May 3, 2024.
Consolidated Results, Management Commentary, &
Outlook
In the first quarter of 2024, Intrepid generated sales of $79.3
million, a 9% decrease from first quarter 2023 sales of $86.9
million. Consolidated gross margin totaled $6.4 million, while net
loss totaled $3.1 million, or a net loss of $0.24 per diluted
share, which compares to first quarter 2023 net income of $4.5
million, or $0.35 per diluted share. The Company delivered adjusted
EBITDA(1) of $7.7 million, down from $16.4 million in the same
prior year period, with the lower profitability primarily being
driven by lower pricing for our key products. Our first quarter
2024 net realized sales prices(1) for potash and Trio® averaged
$395 and $300 per ton, respectively, which compares to $485 and
$344 per ton, respectively, in the first quarter of 2023.
Matt Preston, Intrepid's Chief Financial Officer and acting
principal executive officer commented: "Intrepid started the year
with a solid first quarter that was highlighted by robust demand
and stable pricing in the potash market. Our quarterly Trio® sales
volumes of 91 thousand tons exceeded expectations as consistent
potash pricing and improving sulfate values drove strong in-season
demand. Improved mining rates due to the two new continuous miners
allowed us to adjust the production schedule at our East facility
while maintaining consistent production rates in the near-term as
we limit capital expenditures and mine development work. In potash,
reduced production during the 2023-2024 production year has
constrained our sales volumes and negatively impacted our unit
economics, but we still expect our production to inflect higher
starting in the second half of this year.
Getting our potash production back to the historical levels
remains the number one focus for Intrepid and we look forward to
seeing the improvement in our unit economics later this year. For a
final comment, we want to extend our heartfelt best wishes to Bob
for a swift recovery, and we appreciate the support and
understanding during this time."
Segment Highlights
Potash
| |
|
Three Months Ended March 31, |
| |
|
|
2024 |
|
|
2023 |
| |
|
(in thousands, except per ton data) |
| Sales |
|
$ |
37,576 |
|
$ |
52,497 |
| Gross margin |
|
$ |
5,574 |
|
$ |
14,428 |
| |
|
|
|
|
| Potash sales volumes (in
tons) |
|
|
74 |
|
|
89 |
| Potash production volumes (in
tons) |
|
|
87 |
|
|
90 |
| |
|
|
|
|
| Average potash net realized
sales price per ton(1) |
|
$ |
395 |
|
$ |
485 |
Potash segment sales in the first quarter of 2024 decreased 28%
to $37.6 million when compared to the first quarter of 2023. The
lower revenue was driven by a 19% decrease in our average net
realized sales price per ton to $395, as well as a 17% decrease in
our potash sales volumes to 74 thousand tons. Our potash sales
volumes decreased due to our lower potash production at our HB and
Wendover facilities in 2023.
Our potash segment cost of goods sold decreased 18% in the first
quarter of 2024, compared to the first quarter of 2023, as we sold
17% fewer tons of potash. In addition, we had a lower weighted
average carrying cost per ton to begin 2024 owing to the lower of
cost or net realizable value inventory charge that was recorded
during the fourth quarter of 2023. During the first quarter of
2024, we recorded total lower of cost or net realizable value
inventory adjustments of $0.5 million as our weighted average
carrying cost per ton for certain inventoried potash products was
higher than our expected selling price per ton for those
products.
Our potash segment gross margin decreased $8.9 million in the
first quarter of 2024, compared to the first quarter of 2023, due
to the factors discussed above.
Our potash production totaled 87 thousand tons in the first
quarter of 2024, which compares to 90 thousand tons produced in the
same prior year period. We continue to expect a positive inflection
in our potash production in the second half of 2024.
Trio®
| |
|
Three Months Ended March 31, |
| |
|
|
2024 |
|
|
|
2023 |
| |
|
(in thousands, except per ton data) |
| Sales |
|
$ |
36,487 |
|
|
$ |
30,274 |
| Gross (deficit) margin |
|
$ |
(1,140 |
) |
|
$ |
1,452 |
| |
|
|
|
|
| Trio® sales volume (in
tons) |
|
|
91 |
|
|
|
65 |
| Trio® production volume (in
tons) |
|
|
54 |
|
|
|
49 |
| |
|
|
|
|
| Average Trio® net realized
sales price per ton(1) |
|
$ |
300 |
|
|
$ |
344 |
Trio® segment sales increased 21% during the first quarter of
2024, compared to the first quarter of 2023. Trio® sales increased
primarily due to a 40% increase in Trio® tons sold, partially
offset by a 13% decrease in our average net realized sales price
per ton. Sales volumes increased during the first quarter of 2024,
compared to the first quarter of 2023, as customers found good
value for Trio® relative to crop prices.
Trio® cost of goods sold increased 31% in the first quarter of
2024, compared to the first quarter of 2023, primarily due to
higher sales volumes. However, our Trio® cost of goods in the first
quarter of 2024 did benefit from the lower of cost or net
realizable value inventory adjustment recorded in the fourth
quarter of 2023 which reduced our beginning 2024 Trio® average
carrying cost per ton. In addition, our weighted average carrying
cost per ton was positively impacted by decreases in certain
production costs incurred during the first quarter of 2024, such as
production labor and benefits expense, as we moved to a reduced
production schedule and restarted our fine langbeinite recovery
system in the first quarter of 2024. Lastly, we produced more tons
of Trio® in the first quarter of 2024, compared to the first
quarter of 2023, which also helped lower our per ton production
costs.
Our Trio® segment incurred a gross deficit of $1.1 million in
the first quarter of 2024, compared to gross margin of $1.5 million
in the first quarter of 2023, primarily due to the decrease in
average net realized sales price per ton.
Our Trio® production totaled 54 thousand tons in the first
quarter of 2024, which compares to 49 thousand tons in the prior
year period.
Oilfield Solutions
| |
|
Three Months Ended March 31, |
| |
|
|
2024 |
|
|
2023 |
| |
|
(in thousands) |
| Sales |
|
$ |
5,324 |
|
$ |
4,250 |
| Gross margin |
|
$ |
2,000 |
|
$ |
472 |
Our oilfield solutions segment sales increased $1.1 million in
the first quarter of 2024, compared to the first quarter of 2023,
due to a $0.6 million increase in water sales, a $0.3 million
increase in brine water sales, and a $0.2 million increase in other
oilfield solution products and services. Our water sales increased
compared to the prior year period due to increased sales of water
on our South ranch. Our brine water sales and sales of other
oilfield solutions products and services increased due to continued
strong demand from oil and gas operators in the Permian Basin near
Intrepid South.
Our cost of
goods sold decreased $0.5 million, or 12%, in the first quarter of
2024, compared to the first quarter of 2023, due to using less
contract labor. In the first quarter of 2023, we used contract
labor to complete various projects at Intrepid South.
Gross margin for the first quarter of 2024 increased $1.5
million compared to the first quarter of 2023, due to the factors
discussed above.
Liquidity
During the first quarter of 2024, cash flow provided by
operations was $41.5 million, while cash used in investing
activities was $6.6 million. As of May 3, 2024, we had
approximately $46.5 million in cash and cash equivalents, no
outstanding borrowings, and $150 million available to borrow under
our revolving credit facility, for total liquidity of approximately
$196.5 million.
Notes
1 Adjusted net (loss) income, adjusted net (loss) income per
diluted share, adjusted earnings before interest, taxes,
depreciation, and amortization (or adjusted EBITDA) and average net
realized sales price per ton are non-GAAP financial measures. See
the non-GAAP reconciliations set forth later in this press release
for additional information.
Unless expressly stated otherwise or the context otherwise
requires, references to tons in this press release refer to short
tons. One short ton equals 2,000 pounds. One metric tonne, which
many international competitors use, equals 1,000 kilograms or
2,204.62 pounds.
Conference Call Information
Intrepid will host a conference call on Thursday, May 9, 2024,
at 12:00 p.m. Eastern Time to discuss the results and other
operating and financial matters and answer investor questions.
Management invites you to listen to the conference call by using
the toll-free dial-in number 1 (800) 715-9871 or International
dial-in number 1 (646) 307-1963; please use conference ID 1179359.
The call will also be streamed on the Intrepid website,
intrepidpotash.com. A recording of the conference call will be
available approximately two hours after the completion of the call
by dialing 1 (800) 770-2030 for toll-free, 1 (609) 800-9909 for
International, or at intrepidpotash.com. The replay of the call
will require the input of the replay access code 1179359. The
recording will be available through May 16, 2024.
About Intrepid
Intrepid is a diversified mineral company that delivers
potassium, magnesium, sulfur, salt, and water products essential
for customer success in agriculture, animal feed, and the oil and
gas industry. Intrepid is the only U.S. producer of muriate of
potash, which is applied as an essential nutrient for healthy crop
development, utilized in several industrial applications, and used
as an ingredient in animal feed. In addition, Intrepid produces a
specialty fertilizer, Trio®, which delivers three key nutrients,
potassium, magnesium, and sulfate, in a single particle. Intrepid
also provides water, magnesium chloride, brine, and various
oilfield products and services. Intrepid serves diverse customers
in markets where a logistical advantage exists and is a leader in
the use of solar evaporation for potash production, resulting in
lower cost and more environmentally friendly production. Intrepid's
mineral production comes from three solar solution potash
facilities and one conventional underground Trio® mine.
Intrepid routinely posts important information, including
information about upcoming investor presentations and press
releases, on its website under the Investor Relations tab.
Investors and other interested parties are encouraged to enroll at
intrepidpotash.com, to receive automatic email alerts for new
postings.
Forward-looking Statements
This document contains forward-looking statements - that is,
statements about future, not past, events. The forward-looking
statements in this document relate to, among other things,
statements about Intrepid's future financial performance, cash flow
from operations expectations, water sales, production costs,
acquisition expectations and operating plans, and its market
outlook. These statements are based on assumptions that Intrepid
believes are reasonable. Forward-looking statements by their nature
address matters that are uncertain. The particular uncertainties
that could cause Intrepid's actual results to be materially
different from its forward-looking statements include the
following:
- changes in the price, demand, or
supply of our products and services;
- challenges and legal proceedings
related to our water rights;
- our ability to successfully identify
and implement any opportunities to grow our business whether
through expanded sales of water, Trio®, byproducts, and other
non-potassium related products or other revenue diversification
activities;
- the costs of, and our ability to
successfully execute, any strategic projects;
- declines or changes in agricultural
production or fertilizer application rates;
- declines in the use of
potassium-related products or water by oil and gas companies in
their drilling operations;
- our ability to prevail in
outstanding legal proceedings against us;
- our ability to comply with the terms
of our revolving credit facility, including the underlying
covenants;
- further write-downs of the carrying
value of assets, including inventories;
- circumstances that disrupt or limit
production, including operational difficulties or variances,
geological or geotechnical variances, equipment failures,
environmental hazards, and other unexpected events or
problems;
- changes in reserve estimates;
- currency fluctuations;
- adverse changes in economic
conditions or credit markets;
- the impact of governmental
regulations, including environmental and mining regulations, the
enforcement of those regulations, and governmental policy
changes;
- adverse weather events, including
events affecting precipitation and evaporation rates at our solar
solution mines;
- increased labor costs or
difficulties in hiring and retaining qualified employees and
contractors, including workers with mining, mineral processing, or
construction expertise;
- our reliance on key personnel,
including our ability to identify, recruit, and retain key
personnel;
- changes in the prices of raw
materials, including chemicals, natural gas, and power;
- our ability to obtain and maintain
any necessary governmental permits or leases relating to current or
future operations;
- interruptions in rail or truck
transportation services, or fluctuations in the costs of these
services;
- our inability to fund necessary
capital investments;
- global inflationary pressures and
supply chain challenges;
- the impact of global health issues,
such as the COVID-19 pandemic, and other global disruptions on our
business, operations, liquidity, financial condition and results of
operations; and
- the other risks, uncertainties, and
assumptions described in Item 1A. Risk Factors of our Annual Report
on Form 10-K for the year ended December 31, 2023.
In addition, new risks emerge from time to time. It is not
possible for Intrepid to predict all risks that may cause actual
results to differ materially from those contained in any
forward-looking statements Intrepid may make. All information in
this document speaks as of the date of this release. New
information or events after that date may cause our forward-looking
statements in this document to change. We undertake no obligation
to update or revise publicly any forward-looking statements to
conform the statements to actual results or to reflect new
information or future events.
Contact:Evan Mapes, CFA, Investor Relations
Manager Phone: 303-996-3042Email: evan.mapes@intrepidpotash.com
INTREPID POTASH,
INC.CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS (UNAUDITED)FOR THE THREE MONTHS ENDED
MARCH 31, 2024 AND 2023 (In thousands, except per
share amounts)
| |
|
Three Months Ended March 31, |
| |
|
|
2024 |
|
|
|
2023 |
|
| Sales |
|
$ |
79,287 |
|
|
$ |
86,920 |
|
| Less: |
|
|
|
|
|
Freight costs |
|
|
12,830 |
|
|
|
11,590 |
|
|
Warehousing and handling costs |
|
|
3,089 |
|
|
|
2,733 |
|
|
Cost of goods sold |
|
|
56,431 |
|
|
|
56,245 |
|
|
Lower of cost or net realizable value inventory adjustments |
|
|
503 |
|
|
|
— |
|
| Gross
Margin |
|
|
6,434 |
|
|
|
16,352 |
|
| |
|
|
|
|
| Selling and
administrative |
|
|
8,357 |
|
|
|
8,858 |
|
| Accretion of asset retirement
obligation |
|
|
622 |
|
|
|
535 |
|
| Impairment of long-lived
assets |
|
|
1,377 |
|
|
|
— |
|
| Loss on sale of assets |
|
|
251 |
|
|
|
200 |
|
| Other operating income |
|
|
(1,132 |
) |
|
|
— |
|
| Other operating expense |
|
|
1,265 |
|
|
|
1,385 |
|
| Operating (Loss)
Income |
|
|
(4,306 |
) |
|
|
5,374 |
|
| |
|
|
|
|
| Other
Income |
|
|
|
|
| Equity in earnings of
unconsolidated entities |
|
|
149 |
|
|
|
821 |
|
| Interest income |
|
|
244 |
|
|
|
85 |
|
| Other income |
|
|
8 |
|
|
|
13 |
|
| (Loss) Income Before
Income Taxes |
|
|
(3,905 |
) |
|
|
6,293 |
|
| |
|
|
|
|
| Income Tax Benefit
(Expense) |
|
|
775 |
|
|
|
(1,787 |
) |
| Net (Loss)
Income |
|
$ |
(3,130 |
) |
|
$ |
4,506 |
|
| |
|
|
|
|
| Weighted Average Shares
Outstanding: |
|
|
|
|
|
Basic |
|
|
12,817 |
|
|
|
12,694 |
|
|
Diluted |
|
|
12,817 |
|
|
|
12,875 |
|
| (Loss) Earnings Per
Share: |
|
|
|
|
|
Basic |
|
$ |
(0.24 |
) |
|
$ |
0.35 |
|
|
Diluted |
|
$ |
(0.24 |
) |
|
$ |
0.35 |
|
INTREPID POTASH,
INC.CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)AS OF MARCH 31, 2024 AND DECEMBER 31,
2023(In thousands, except share and per share
amounts)
| |
|
March 31, |
|
December 31, |
| |
|
|
2024 |
|
|
|
2023 |
|
|
ASSETS |
|
|
|
|
| Cash and cash equivalents |
|
$ |
34,067 |
|
|
$ |
4,071 |
|
| Short-term investments |
|
|
2,971 |
|
|
|
2,970 |
|
| Accounts receivable: |
|
|
|
|
|
Trade, net |
|
|
41,826 |
|
|
|
22,077 |
|
|
Other receivables, net |
|
|
1,201 |
|
|
|
1,470 |
|
| Inventory, net |
|
|
102,549 |
|
|
|
114,252 |
|
| Prepaid expenses and other
current assets |
|
|
5,530 |
|
|
|
7,200 |
|
|
Total current assets |
|
|
188,144 |
|
|
|
152,040 |
|
| |
|
|
|
|
| Property, plant, equipment,
and mineral properties, net |
|
|
354,809 |
|
|
|
358,249 |
|
| Water rights |
|
|
19,184 |
|
|
|
19,184 |
|
| Long-term parts inventory,
net |
|
|
30,543 |
|
|
|
30,231 |
|
| Long-term investments |
|
|
6,297 |
|
|
|
6,627 |
|
| Other assets, net |
|
|
8,609 |
|
|
|
8,016 |
|
| Non-current deferred tax
asset, net |
|
|
195,012 |
|
|
|
194,223 |
|
| Total
Assets |
|
$ |
802,598 |
|
|
$ |
768,570 |
|
| |
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
| |
|
|
|
|
| Accounts payable |
|
$ |
11,029 |
|
|
$ |
12,848 |
|
| Accrued liabilities |
|
|
13,374 |
|
|
|
14,061 |
|
| Accrued employee compensation
and benefits |
|
|
6,299 |
|
|
|
7,254 |
|
| Other current liabilities |
|
|
8,748 |
|
|
|
12,401 |
|
|
Total current liabilities |
|
|
39,450 |
|
|
|
46,564 |
|
| |
|
|
|
|
| Advances on credit
facility |
|
|
— |
|
|
|
4,000 |
|
| Asset retirement obligation,
net of current portion |
|
|
30,699 |
|
|
|
30,077 |
|
| Operating lease
liabilities |
|
|
518 |
|
|
|
741 |
|
| Finance lease liabilities |
|
|
1,608 |
|
|
|
1,451 |
|
| Deferred other income,
long-term |
|
|
47,170 |
|
|
|
— |
|
| Other non-current
liabilities |
|
|
1,166 |
|
|
|
1,309 |
|
| Total
Liabilities |
|
|
120,611 |
|
|
|
84,142 |
|
| |
|
|
|
|
| Commitments and
Contingencies |
|
|
|
|
| Common stock, $0.001 par
value; 40,000,000 shares authorized; |
|
|
|
|
|
12,875,520 and 12,807,316 shares outstanding |
|
|
|
|
|
at March 31, 2024, and December 31, 2023, respectively |
|
|
13 |
|
|
|
13 |
|
| Additional paid-in
capital |
|
|
666,326 |
|
|
|
665,637 |
|
| Retained earnings |
|
|
37,660 |
|
|
|
40,790 |
|
| Less treasury stock, at
cost |
|
|
(22,012 |
) |
|
|
(22,012 |
) |
| Total Stockholders'
Equity |
|
|
681,987 |
|
|
|
684,428 |
|
| Total Liabilities and
Stockholders' Equity |
|
$ |
802,598 |
|
|
$ |
768,570 |
|
INTREPID POTASH,
INC.CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS (UNAUDITED)FOR THE THREE MONTHS ENDED MARCH
31, 2024 AND 2023(In thousands)
| |
|
Three Months Ended March 31, |
| |
|
|
2024 |
|
|
|
2023 |
|
| Cash Flows from
Operating Activities: |
|
|
|
|
| Net (loss) income |
|
$ |
(3,130 |
) |
|
$ |
4,506 |
|
| Adjustments to reconcile net
(loss) income to net cash provided by operating activities: |
|
|
|
|
|
Depreciation, depletion and amortization |
|
|
9,304 |
|
|
|
9,292 |
|
|
Accretion of asset retirement obligation |
|
|
622 |
|
|
|
535 |
|
|
Amortization of deferred financing costs |
|
|
75 |
|
|
|
75 |
|
|
Amortization of intangible assets |
|
|
80 |
|
|
|
80 |
|
|
Stock-based compensation |
|
|
1,322 |
|
|
|
1,746 |
|
|
Lower of cost or net realizable value inventory adjustments |
|
|
503 |
|
|
|
— |
|
|
Impairment of long-lived assets |
|
|
1,377 |
|
|
|
— |
|
|
Loss on disposal of assets |
|
|
251 |
|
|
|
200 |
|
|
Allowance for parts inventory obsolescence |
|
|
53 |
|
|
|
— |
|
|
Equity in earnings of unconsolidated entities |
|
|
(149 |
) |
|
|
(821 |
) |
|
Distribution of earnings from unconsolidated entities |
|
|
— |
|
|
|
320 |
|
| Changes in operating assets
and liabilities: |
|
|
|
|
|
Trade accounts receivable, net |
|
|
(19,749 |
) |
|
|
(12,474 |
) |
|
Other receivables, net |
|
|
247 |
|
|
|
(92 |
) |
|
Inventory, net |
|
|
10,835 |
|
|
|
7,645 |
|
|
Prepaid expenses and other current assets |
|
|
922 |
|
|
|
250 |
|
|
Deferred tax assets, net |
|
|
(789 |
) |
|
|
1,661 |
|
|
Accounts payable, accrued liabilities, and accrued employee
compensation and benefits |
|
|
(3,621 |
) |
|
|
(5,305 |
) |
|
Operating lease liabilities |
|
|
(384 |
) |
|
|
(401 |
) |
|
Deferred other income |
|
|
44,434 |
|
|
|
— |
|
|
Other liabilities |
|
|
(671 |
) |
|
|
1,232 |
|
|
Net cash provided by operating activities |
|
|
41,532 |
|
|
|
8,449 |
|
| |
|
|
|
|
| Cash Flows from
Investing Activities: |
|
|
|
|
|
Additions to property, plant, equipment, mineral properties and
other assets |
|
|
(11,673 |
) |
|
|
(21,039 |
) |
|
Purchase of investments |
|
|
— |
|
|
|
(956 |
) |
|
Proceeds from sale of assets |
|
|
4,596 |
|
|
|
65 |
|
|
Proceeds from redemptions/maturities of investments |
|
|
500 |
|
|
|
1,500 |
|
|
Net cash used in investing activities |
|
|
(6,577 |
) |
|
|
(20,430 |
) |
| |
|
|
|
|
| Cash Flows from
Financing Activities: |
|
|
|
|
|
Payments of financing lease |
|
|
(324 |
) |
|
|
(43 |
) |
|
Proceeds from short-term borrowings on credit facility |
|
|
— |
|
|
|
5,000 |
|
|
Repayments of short-term borrowings on credit facility |
|
|
(4,000 |
) |
|
|
— |
|
|
Employee tax withholding paid for restricted stock upon
vesting |
|
|
(633 |
) |
|
|
(1,037 |
) |
|
Net cash (used in) provided by financing activities |
|
|
(4,957 |
) |
|
|
3,920 |
|
| |
|
|
|
|
| Net Change in Cash,
Cash Equivalents and Restricted Cash |
|
|
29,998 |
|
|
|
(8,061 |
) |
| Cash, Cash Equivalents
and Restricted Cash, beginning of period |
|
|
4,651 |
|
|
|
19,084 |
|
| Cash, Cash Equivalents
and Restricted Cash, end of period |
|
$ |
34,649 |
|
|
$ |
11,023 |
|
INTREPID POTASH,
INC.UNAUDITED NON-GAAP
RECONCILIATIONSFOR THE THREE MONTHS ENDED MARCH
31, 2024 AND 2023(In thousands)
To supplement Intrepid's consolidated financial statements,
which are prepared and presented in accordance with GAAP, Intrepid
uses several non-GAAP financial measures to monitor and evaluate
its performance. These non-GAAP financial measures include adjusted
net (loss) income, adjusted net (loss) income per diluted share,
adjusted EBITDA, and average net realized sales price per ton.
These non-GAAP financial measures should not be considered in
isolation, or as a substitute for, or superior to, the financial
information prepared and presented in accordance with GAAP. In
addition, because the presentation of these non-GAAP financial
measures varies among companies, these non-GAAP financial measures
may not be comparable to similarly titled measures used by other
companies.
Intrepid believes these non-GAAP financial measures provide
useful information to investors for analysis of its business.
Intrepid uses these non-GAAP financial measures as one of its tools
in comparing period-over-period performance on a consistent basis
and when planning, forecasting, and analyzing future periods.
Intrepid believes these non-GAAP financial measures are used by
professional research analysts and others in the valuation,
comparison, and investment recommendations of companies in the
potash mining industry. Many investors use the published research
reports of these professional research analysts and others in
making investment decisions.
Adjusted Net (Loss) Income and Adjusted Net (Loss)
Income Per Diluted Share
Adjusted net (loss) income and adjusted net (loss) income per
diluted share are calculated as net (loss) income or net (loss)
income per diluted share adjusted for certain items that impact the
comparability of results from period to period, as set forth in the
reconciliation below. Intrepid considers these non-GAAP financial
measures to be useful because they allow for period-to-period
comparisons of its operating results excluding items that Intrepid
believes are not indicative of its fundamental ongoing
operations.
Reconciliation of Net (Loss) Income to Adjusted Net (Loss)
Income:
| |
Three Months Ended March 31, |
| |
|
2024 |
|
|
|
2023 |
|
| |
(in thousands) |
| Net (Loss) Income |
$ |
(3,130 |
) |
|
$ |
4,506 |
|
| Adjustments |
|
|
|
| Impairment of long-lived
assets |
|
1,377 |
|
|
|
— |
|
| Loss on sale of assets |
|
251 |
|
|
|
200 |
|
| Calculated income tax
effect(1) |
|
(423 |
) |
|
|
(52 |
) |
| Total adjustments |
|
1,205 |
|
|
|
148 |
|
| Adjusted Net (Loss)
Income |
$ |
(1,925 |
) |
|
$ |
4,654 |
|
Reconciliation of Net (Loss) Income per Share to Adjusted Net
(Loss) Income per Share:
| |
Three Months Ended March 31, |
| |
|
2024 |
|
|
|
2023 |
| Net (Loss) Income Per Diluted
Share |
$ |
(0.24 |
) |
|
$ |
0.35 |
| Adjustments |
|
|
|
| Impairment of long-lived
assets |
|
0.11 |
|
|
|
— |
| Loss on sale of assets |
|
0.02 |
|
|
|
0.02 |
| Calculated income tax
effect(1) |
|
(0.03 |
) |
|
|
— |
| Total adjustments |
|
0.10 |
|
|
|
0.02 |
| Adjusted Net (Loss) Income Per
Diluted Share |
$ |
(0.14 |
) |
|
$ |
0.37 |
(1) Assumes an annual effective tax rate of 26%
for 2024 and 2023.
Adjusted EBITDA
Adjusted earnings before interest, taxes, depreciation, and
amortization (or adjusted EBITDA) is calculated as net (loss)
income adjusted for certain items that impact the comparability of
results from period to period, as set forth in the reconciliation
below. Intrepid considers adjusted EBITDA to be useful, and believe
it to be useful for investors, because the measure reflects
Intrepid's operating performance before the effects of certain
non-cash items and other items that Intrepid believes are not
indicative of its core operations. Intrepid uses adjusted EBITDA to
assess operating performance.
Reconciliation of Net (Loss) Income to Adjusted EBITDA:
| |
|
Three Months Ended March 31, |
| |
|
|
2024 |
|
|
|
2023 |
| |
|
(in thousands) |
| Net (Loss) Income |
|
$ |
(3,130 |
) |
|
$ |
4,506 |
| Impairment of long-lived
assets |
|
|
1,377 |
|
|
|
— |
| Loss on sale of assets |
|
|
251 |
|
|
|
200 |
| Interest expense |
|
|
— |
|
|
|
— |
| Income tax (benefit)
expense |
|
|
(775 |
) |
|
|
1,787 |
| Depreciation, depletion, and
amortization |
|
|
9,304 |
|
|
|
9,292 |
| Amortization of intangible
assets |
|
|
80 |
|
|
|
80 |
| Accretion of asset retirement
obligation |
|
|
622 |
|
|
|
535 |
| Total adjustments |
|
|
10,859 |
|
|
|
11,894 |
| Adjusted EBITDA |
|
$ |
7,729 |
|
|
$ |
16,400 |
Average Potash and Trio®
Net Realized Sales Price per Ton
Average net realized sales price per ton for potash is
calculated as potash segment sales less potash segment byproduct
sales and potash freight costs and then dividing that difference by
the number of tons of potash sold in the period. Likewise, average
net realized sales price per ton for Trio® is calculated as Trio®
segment sales less Trio® segment byproduct sales and Trio® freight
costs and then dividing that difference by Trio® tons sold.
Intrepid considers average net realized sales price per ton to be
useful, and believe it to be useful for investors, because it shows
Intrepid's potash and Trio® average per ton pricing without the
effect of certain transportation and delivery costs. When Intrepid
arranges transportation and delivery for a customer, it includes in
revenue and in freight costs the costs associated with
transportation and delivery. However, some of Intrepid's customers
arrange for and pay their own transportation and delivery costs, in
which case these costs are not included in Intrepid's revenue and
freight costs. Intrepid uses average net realized sales price per
ton as a key performance indicator to analyze potash and Trio®
sales and price trends.
Reconciliation of Sales to Average Net Realized Sales Price per
Ton:
| |
|
Three Months Ended March 31, |
| |
|
|
2024 |
|
|
2023 |
| (in thousands, except per ton
amounts) |
|
Potash |
|
Trio® |
|
Potash |
|
Trio® |
| Total Segment Sales |
|
$ |
37,576 |
|
$ |
36,487 |
|
$ |
52,497 |
|
$ |
30,274 |
| Less: Segment byproduct
sales |
|
|
5,164 |
|
|
203 |
|
|
5,342 |
|
|
1,221 |
| Freight costs |
|
|
3,146 |
|
|
8,974 |
|
|
3,992 |
|
|
6,685 |
| Subtotal |
|
$ |
29,266 |
|
$ |
27,310 |
|
$ |
43,163 |
|
$ |
22,368 |
| |
|
|
|
|
|
|
|
|
| Divided by: |
|
|
|
|
|
|
|
|
| Tons sold |
|
|
74 |
|
|
91 |
|
|
89 |
|
|
65 |
| Average net realized sales
price per ton |
|
$ |
395 |
|
$ |
300 |
|
$ |
485 |
|
$ |
344 |
INTREPID POTASH,
INC.DISAGGREGATION OF REVENUE AND SEGMENT DATA
(UNAUDITED)FOR THE THREE MONTHS ENDED MARCH 31,
2024 AND 2023(In thousands)
| |
|
Three Months Ended March 31, 2024 |
|
Product |
|
Potash Segment |
|
Trio®
Segment |
|
Oilfield Solutions Segment |
|
Intersegment Eliminations |
|
Total |
|
Potash |
|
$ |
32,412 |
|
$ |
— |
|
$ |
— |
|
$ |
(100 |
) |
|
$ |
32,312 |
| Trio® |
|
|
— |
|
|
36,284 |
|
|
— |
|
|
— |
|
|
|
36,284 |
| Water |
|
|
— |
|
|
— |
|
|
2,169 |
|
|
— |
|
|
|
2,169 |
| Salt |
|
|
3,144 |
|
|
203 |
|
|
— |
|
|
— |
|
|
|
3,347 |
| Magnesium Chloride |
|
|
419 |
|
|
— |
|
|
— |
|
|
— |
|
|
|
419 |
| Brine Water |
|
|
1,583 |
|
|
— |
|
|
1,127 |
|
|
— |
|
|
|
2,710 |
| Other |
|
|
18 |
|
|
— |
|
|
2,028 |
|
|
— |
|
|
|
2,046 |
| Total Revenue |
|
$ |
37,576 |
|
$ |
36,487 |
|
$ |
5,324 |
|
$ |
(100 |
) |
|
$ |
79,287 |
| |
|
Three Months Ended March 31, 2023 |
|
Product |
|
Potash Segment |
|
Trio®
Segment |
|
Oilfield Solutions Segment |
|
Intersegment Eliminations |
|
Total |
|
Potash |
|
$ |
47,155 |
|
$ |
— |
|
$ |
— |
|
$ |
(101 |
) |
|
$ |
47,054 |
| Trio® |
|
|
— |
|
|
29,053 |
|
|
— |
|
|
— |
|
|
|
29,053 |
| Water |
|
|
80 |
|
|
1,048 |
|
|
1,619 |
|
|
— |
|
|
|
2,747 |
| Salt |
|
|
3,043 |
|
|
173 |
|
|
— |
|
|
— |
|
|
|
3,216 |
| Magnesium Chloride |
|
|
1,137 |
|
|
— |
|
|
— |
|
|
— |
|
|
|
1,137 |
| Brine Water |
|
|
1,082 |
|
|
— |
|
|
822 |
|
|
— |
|
|
|
1,904 |
| Other |
|
|
— |
|
|
— |
|
|
1,809 |
|
|
— |
|
|
|
1,809 |
| Total Revenue |
|
$ |
52,497 |
|
$ |
30,274 |
|
$ |
4,250 |
|
$ |
(101 |
) |
|
$ |
86,920 |
| Three Months
EndedMarch 31, 2024 |
|
Potash |
|
Trio® |
|
Oilfield Solutions |
|
Other |
|
Consolidated |
| Sales |
|
$ |
37,576 |
|
$ |
36,487 |
|
|
$ |
5,324 |
|
$ |
(100 |
) |
|
$ |
79,287 |
| Less: Freight costs |
|
|
3,956 |
|
|
8,974 |
|
|
|
— |
|
|
(100 |
) |
|
|
12,830 |
| Warehousing and handling
costs |
|
|
1,727 |
|
|
1,362 |
|
|
|
— |
|
|
— |
|
|
|
3,089 |
| Cost of goods sold |
|
|
25,816 |
|
|
27,291 |
|
|
|
3,324 |
|
|
— |
|
|
|
56,431 |
| Lower of cost or net
realizable value inventory adjustments |
|
|
503 |
|
|
— |
|
|
|
— |
|
|
— |
|
|
|
503 |
| Gross Margin (Deficit) |
|
$ |
5,574 |
|
$ |
(1,140 |
) |
|
$ |
2,000 |
|
$ |
— |
|
|
$ |
6,434 |
| Depreciation, depletion, and
amortization incurred1 |
|
$ |
6,971 |
|
$ |
884 |
|
|
$ |
1,071 |
|
$ |
458 |
|
|
$ |
9,384 |
| |
|
|
|
|
|
|
|
|
|
|
| Three Months
Ended March 31, 2023 |
|
Potash |
|
Trio® |
|
Oilfield Solutions |
|
Other |
|
Consolidated |
| Sales |
|
$ |
52,497 |
|
$ |
30,274 |
|
|
$ |
4,250 |
|
$ |
(101 |
) |
|
$ |
86,920 |
| Less: Freight costs |
|
|
5,005 |
|
|
6,686 |
|
|
|
— |
|
|
(101 |
) |
|
|
11,590 |
| Warehousing and handling
costs |
|
|
1,480 |
|
|
1,253 |
|
|
|
— |
|
|
— |
|
|
|
2,733 |
| Cost of goods sold |
|
|
31,584 |
|
|
20,883 |
|
|
|
3,778 |
|
|
— |
|
|
|
56,245 |
| Gross Margin |
|
$ |
14,428 |
|
$ |
1,452 |
|
|
$ |
472 |
|
$ |
— |
|
|
$ |
16,352 |
| Depreciation, depletion, and
amortization incurred1 |
|
$ |
7,051 |
|
$ |
1,206 |
|
|
$ |
907 |
|
$ |
208 |
|
|
$ |
9,372 |
(1) Depreciation, depletion, and amortization incurred for
potash and Trio® excludes depreciation, depletion, and amortization
amounts absorbed in or relieved from inventory.
Intrepid Potash (NYSE:IPI)
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Intrepid Potash (NYSE:IPI)
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