Intrepid Potash, Inc. ("Intrepid", the "Company", "we", "us",
"our") (NYSE:IPI) today reported its results for the second quarter
of 2022.
Key Highlights for Second Quarter 2022
- Total sales of $91.7 million, an increase of $23.8 million
compared to $67.9 million in the second quarter of 2021, as potash
and Trio® net realized sales prices(1) increased to $738 and $493
per ton, respectively.
- Net income of $23.7 million (or $1.74 per diluted share), a
$4.2 million improvement compared to the second quarter of 2021;
adjusted net income(1) totaled $24.8 million, which compares to
$7.4 million in the second quarter of 2021.
- Gross margin of $41.8 million, a $27.6 million improvement over
the prior year.
- Cash flow from operations of $49.1 million, a $16.8
million improvement over the prior year.
- Adjusted EBITDA(1) of $41.5 million, which was a $24.6 million
improvement over the prior year.
- As of July 31, 2022, Intrepid had approximately $85 million in
cash and cash equivalents and $74 million available under its
revolving credit facility, for total liquidity of approximately
$159 million.
- Incurred capital expenditures of $16.0 million in the second
quarter of 2022 and expect full year 2022 capital investment to be
in the range of $65 million to $75 million.
- Continued progress on production improvement projects designed
to capitalize on the strong commodity environment and improve our
production cost per ton:
- Replacing the injection pipeline at HB with an improved system
designed to maintain higher flow rates and increase brine storage
underground - expected in-service 1H 2023
- Preparing to drill an additional potash cavern in Moab which is
expected to increase production tons through higher overall
extraction brine grade - expected in-service Q4 2022
- Upgrading brackish and deep-brine wells in Wendover to increase
brine availability and better manage variability in weather and
evaporation rates - expected in-service Q4 2022
- Initial development planning of a frac sand opportunity on our
strategically located South ranch with the potential to produce
over 600k tons per year of frac sand for sale into the Delaware
Basin, starting in 2023.
Consolidated Results, Outlook, & Management
Commentary
Intrepid generated second quarter 2022 sales of $91.7 million,
which compares to second quarter 2021 sales of $67.9 million.
Consolidated gross margin in second quarter of 2022 totaled $41.8
million, while adjusted net income in second quarter 2022
totaled $24.8 million, or $1.82 per diluted share, which
compares to second quarter 2021 adjusted net income of $7.4
million, or $0.55 per diluted share. Net income for first half 2022
was $55.1 million compared to first half 2021 net income of $22.0
million. The Company delivered adjusted EBITDA of $41.5 million in
the second quarter, bringing first half 2022 adjusted EBITDA to
$91.6 million. The strong profitability continues to be primarily
driven by high prices for potash and Trio®, which averaged $738 per
ton and $493 per ton, respectively, in the second quarter.
Bob Jornayvaz, Intrepid's Executive Chairman and CEO commented:
"Intrepid's financial performance in the second quarter and first
half of 2022 has ranked among the best in nearly ten years. In the
first half of the year, Intrepid generated adjusted EBITDA of $91.6
million on total sales of $196.1 million, for adjusted EBITDA
margins of 47%. First half 2022 cash flow from operations totaled
$83.2 million and we ended July with $85 million of cash and cash
equivalents for total liquidity of $159 million.
Underpinned by strong cash flow generation, for 2022, we have
budgeted for approximately $65 million to $75 million of capital
spending, with a roughly 50-50 split between maintenance and
growth. In terms of growth projects, over the past couple quarters,
we've highlighted several initiatives at our Utah and New Mexico
facilities to help increase production and improve unit economics,
and today we're excited to announce a new sand project at our South
ranch. We've already made progress on permitting and leasing, and
are beginning equipment purchases. This project is still in its
early phases but we estimate the sand resource has over ten years
of potential, and is also strategically located in the heart of oil
and gas activity in the Permian basin.
Looking ahead, the outlook for both the industry and Intrepid
remains strong. The global fertilizer supply challenges -
particularly for potash - remains unabated. Even with the announced
potash supply additions, we believe the lack of supply versus
historical levels of demand will result in potash prices remaining
elevated. Moreover, despite recent pullback from multi-year highs,
forward crop prices still point to historically strong US farmer
economics. After nearly 18 months of strong demand in the potash
market, we expect buyers will approach second half with
significantly more restraint given inventory carryover following a
compressed spring and heightened concerns over the increased credit
and inventory exposure they face at current price levels. Despite
the minor headwinds and a slower start to the third quarter than
prior years, we expect agricultural demand will pick up as harvest
progresses and we are ready to meet our customer's needs in today's
dynamic market."
Segment Highlights
Potash
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
|
(in thousands, except per ton data) |
Sales |
|
$ |
48,827 |
|
$ |
37,693 |
|
$ |
105,269 |
|
$ |
81,270 |
Gross margin |
|
$ |
24,925 |
|
$ |
10,131 |
|
$ |
53,990 |
|
$ |
18,803 |
|
|
|
|
|
|
|
|
|
Potash sales volumes (in
tons) |
|
|
56 |
|
|
92 |
|
|
126 |
|
|
208 |
Potash production volumes (in
tons) |
|
|
25 |
|
|
51 |
|
|
128 |
|
|
164 |
|
|
|
|
|
|
|
|
|
Average potash net realized
sales price per ton(1) |
|
$ |
738 |
|
$ |
319 |
|
$ |
713 |
|
$ |
300 |
Potash segment sales in the second quarter of 2022 increased 30%
to $48.8 million when compared to the same period in 2021. The
higher revenue was primarily driven by a 131% increase in our
average net realized sales price per ton to $738, despite potash
sales volumes decreasing 39% year-over-year to 56k tons in the
quarter. We sold fewer tons of potash in the second quarter of 2022
compared to the second quarter of 2021, as we had less potash
available to sell. Below average evaporation rates across our
facilities in 2021 led to decreased potash production during the
second half of 2021 and the first half of 2022. Customers were also
reluctant to replenish potash inventory during the back half of the
second quarter of 2022, choosing instead to wait for summer
programs with the expectation of those being announced during the
third quarter of 2022. During the second quarter of 2021, a summer
program was announced in May 2021 which incentivized customers to
take delivery beginning in the back half of second quarter of
2021.
In the second quarter of 2022, potash production totaled 25k
tons, a 51% decrease from the prior year period. Segment gross
margin totaled $24.9 million, which was $14.8 million higher than
the $10.1 million generated in the second quarter of 2021. In the
first half of 2022, potash production totaled 128k tons, which
compares to 164k tons in the prior year period, while potash gross
margin totaled $54.0 million, a $35.2 million increase from the
first half of 2021.
Trio®
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
|
(in thousands, except per ton data) |
Sales |
|
$ |
35,467 |
|
$ |
26,924 |
|
$ |
76,519 |
|
$ |
50,619 |
Gross margin |
|
$ |
13,052 |
|
$ |
3,162 |
|
$ |
29,191 |
|
$ |
3,093 |
|
|
|
|
|
|
|
|
|
Trio® sales volume (in
tons) |
|
|
59 |
|
|
75 |
|
|
131 |
|
|
145 |
Trio® production volume (in
tons) |
|
|
58 |
|
|
63 |
|
|
123 |
|
|
119 |
|
|
|
|
|
|
|
|
|
Average Trio® net realized
sales price per ton(1) |
|
$ |
493 |
|
$ |
271 |
|
$ |
476 |
|
$ |
251 |
Trio® segment sales of $35.5 million for the second quarter of
2022 were $8.5 million higher compared to the prior year, which was
driven by a higher average net realized sales price per ton of $493
in the quarter, which was 82% higher than the prior year period.
The higher sales price helped offset lower Trio® sales volumes,
which totaled 59k tons, which compares to 75k tons in the prior
year period. Our Trio® product is primarily applied during the
spring application season, and similar to potash customers, Trio®
customers were reluctant to hold much inventory exiting the spring
season. Gross margin of $13.1 million was $9.9 million higher than
the second quarter of 2021. Trio® production in the second quarter
of 2022 totaled 58k tons, a modest decrease from the 63k tons
produced in the second quarter of 2021.
In the first half of 2022, Trio® segment sales totaled $76.5
million, an increase of $25.9 million compared to the prior year
period. The higher sales were primarily driven by a first half
average net realized sales price of $476 per ton, which was 90%
higher than the first half of 2021 average net realized sales price
of $251 per ton, which helped offset a 10% decrease in sales
volumes. Gross margin totaled $29.2 million, which was a $26.1
million improvement from the prior year period. Trio® production in
the first half of 2022 totaled 123k tons, which compares to 119k
tons in the first half of 2021.
Oilfield Solutions
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
|
(in thousands) |
Sales |
|
$ |
7,512 |
|
$ |
3,331 |
|
$ |
14,512 |
|
$ |
7,584 |
Gross margin |
|
$ |
3,834 |
|
$ |
906 |
|
$ |
5,806 |
|
$ |
1,411 |
In the second quarter of 2022, our oilfield solutions segment
sales totaled $7.5 million, an increase of $4.2 million compared to
the same period in 2021. The increase was driven by a $1.9 million
increase in water sales, a $1.4 million increase in surface
use/rights-of-way/easement revenues, a $0.4 million increase in
brine water sales, a $0.3 million increase in caliche sales, and a
$0.2 million increase in produced water royalties.
In the first half of 2022, our oilfield solutions segment sales
totaled $14.5 million, an increase of $6.9 million compared to the
same period in 2021. The increase was driven by a $2.8 million
increase in water sales, a $2.3 million increase in surface
use/rights-of-way/easement revenues, a $1.0 million increase in
brine water sales, a $0.5 million increase in produced water
royalty revenues, and a $0.4 million increase in caliche sales.
The second quarter and first half 2022 increase in our oilfield
solutions product sales was primarily driven by a higher level of
oil and gas activity in the Permian basin. In the first half of
2022 in the Permian, the average active rig count was 321 rigs and
ended the second quarter at 349 rigs, which compares to an average
of 216 rigs in the first half of 2021 and 236 rigs at the end of
the second quarter of 2021.
LiquidityDuring the second quarter of 2022,
cash provided by operations was approximately $49.1 million, while
cash used in investing activities was approximately $26.0 million.
As of July 31, 2022, we had approximately $85 million in cash and
cash equivalents, no outstanding borrowings, and $74 million
available to borrow under our revolving credit facility, for total
liquidity of $159 million.
Notes1 Adjusted net income, adjusted net 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 Friday, August 5, 2022, 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 (888) 210-4149 or toll-in dial-in 1
(646) 960-0145; please use conference ID 9158079. 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 (647) 362-9199 for toll-in, or at
intrepidpotash.com. The replay of the call will require the input
of the conference identification number 9158079. The recording will
be available through August 12, 2022.
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, its market outlook,
and the impact of the COVID-19 pandemic on the Company. 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, to avoid a default
under that agreement;
- 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;
- 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;
- the impact of the COVID-19 pandemic 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, 2021, as amended, as updated by our
subsequent Quarterly Reports on Form 10-Q.
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
AND SIX MONTHS ENDED JUNE 30, 2022 AND 2021 (In
thousands, except per share amounts)
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Sales |
|
$ |
91,740 |
|
|
$ |
67,888 |
|
|
$ |
196,139 |
|
|
$ |
139,351 |
|
Less: |
|
|
|
|
|
|
|
|
Freight costs |
|
|
9,227 |
|
|
|
10,115 |
|
|
|
19,464 |
|
|
|
22,193 |
|
Warehousing and handling costs |
|
|
2,204 |
|
|
|
2,378 |
|
|
|
4,680 |
|
|
|
5,010 |
|
Cost of goods sold |
|
|
38,498 |
|
|
|
41,196 |
|
|
|
83,008 |
|
|
|
88,841 |
|
Gross
Margin |
|
|
41,811 |
|
|
|
14,199 |
|
|
|
88,987 |
|
|
|
23,307 |
|
|
|
|
|
|
|
|
|
|
Selling and
administrative |
|
|
7,218 |
|
|
|
6,612 |
|
|
|
14,007 |
|
|
|
12,403 |
|
Accretion of asset retirement
obligation |
|
|
490 |
|
|
|
441 |
|
|
|
980 |
|
|
|
882 |
|
Loss (gain) on sale of
assets |
|
|
1,066 |
|
|
|
(2,567 |
) |
|
|
1,166 |
|
|
|
(2,565 |
) |
Other operating expense
(income) |
|
|
1,242 |
|
|
|
(583 |
) |
|
|
975 |
|
|
|
(577 |
) |
Operating
Income |
|
|
31,795 |
|
|
|
10,296 |
|
|
|
71,859 |
|
|
|
13,164 |
|
|
|
|
|
|
|
|
|
|
Other Income
(Expense) |
|
|
|
|
|
|
|
|
Interest expense, net |
|
|
(24 |
) |
|
|
(918 |
) |
|
|
(57 |
) |
|
|
(1,344 |
) |
Interest income |
|
|
15 |
|
|
|
— |
|
|
|
17 |
|
|
|
— |
|
Other income |
|
|
11 |
|
|
|
8 |
|
|
|
539 |
|
|
|
17 |
|
Gain on extinguishment of
debt |
|
|
— |
|
|
|
10,113 |
|
|
|
— |
|
|
|
10,113 |
|
Income Before Income
Taxes |
|
|
31,797 |
|
|
|
19,499 |
|
|
|
72,358 |
|
|
|
21,950 |
|
|
|
|
|
|
|
|
|
|
Income Tax
Expense |
|
|
(8,089 |
) |
|
|
— |
|
|
|
(17,228 |
) |
|
|
— |
|
Net
Income |
|
$ |
23,708 |
|
|
$ |
19,499 |
|
|
$ |
55,130 |
|
|
$ |
21,950 |
|
|
|
|
|
|
|
|
|
|
Weighted Average Shares
Outstanding: |
|
|
|
|
|
|
|
|
Basic |
|
|
13,246 |
|
|
|
13,089 |
|
|
|
13,203 |
|
|
|
13,071 |
|
Diluted |
|
|
13,620 |
|
|
|
13,338 |
|
|
|
13,690 |
|
|
|
13,335 |
|
Earnings Per Share: |
|
|
|
|
|
|
|
|
Basic |
|
$ |
1.79 |
|
|
$ |
1.49 |
|
|
$ |
4.18 |
|
|
$ |
1.68 |
|
Diluted |
|
$ |
1.74 |
|
|
$ |
1.46 |
|
|
$ |
4.03 |
|
|
$ |
1.65 |
|
INTREPID POTASH,
INC.CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)AS OF JUNE 30, 2022 AND DECEMBER 31,
2021(In thousands, except share
and per share amounts)
|
|
June 30, |
|
December 31, |
|
|
|
2022 |
|
|
2021 |
ASSETS |
|
|
|
|
Cash and cash equivalents |
|
$ |
81,927 |
|
$ |
36,452 |
Short-term investments |
|
|
5,980 |
|
|
— |
Accounts receivable: |
|
|
|
|
Trade, net |
|
|
32,639 |
|
|
35,409 |
Other receivables, net |
|
|
1,635 |
|
|
989 |
Refundable income taxes |
|
|
21 |
|
|
— |
Inventory, net |
|
|
82,644 |
|
|
78,856 |
Prepaid expenses and other
current assets |
|
|
4,379 |
|
|
5,144 |
Total current assets |
|
|
209,225 |
|
|
156,850 |
|
|
|
|
|
Property, plant, equipment,
and mineral properties, net |
|
|
347,834 |
|
|
341,117 |
Water rights |
|
|
19,184 |
|
|
19,184 |
Long-term parts inventory,
net |
|
|
26,622 |
|
|
29,251 |
Other assets, net |
|
|
16,025 |
|
|
11,418 |
Non-current deferred tax
asset, net |
|
|
192,134 |
|
|
209,075 |
Total
Assets |
|
$ |
811,024 |
|
$ |
766,895 |
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
9,869 |
|
$ |
9,068 |
Income taxes payable |
|
|
— |
|
|
41 |
Accrued liabilities |
|
|
12,775 |
|
|
22,938 |
Accrued employee compensation
and benefits |
|
|
6,038 |
|
|
6,805 |
Other current liabilities |
|
|
34,330 |
|
|
34,571 |
Total current liabilities |
|
|
63,012 |
|
|
73,423 |
|
|
|
|
|
Asset retirement
obligation |
|
|
28,004 |
|
|
27,024 |
Operating lease
liabilities |
|
|
1,859 |
|
|
1,879 |
Other non-current
liabilities |
|
|
1,310 |
|
|
1,166 |
Total
Liabilities |
|
|
94,185 |
|
|
103,492 |
|
|
|
|
|
Commitments and
Contingencies |
|
|
|
|
Common stock, $0.001 par
value; 40,000,000 shares authorized; |
|
|
|
|
13,265,813 and 13,149,315 shares outstanding |
|
|
|
|
at June 30, 2022, and December 31, 2021, respectively |
|
|
13 |
|
|
13 |
Additional paid-in
capital |
|
|
657,453 |
|
|
659,147 |
Retained earnings |
|
|
59,373 |
|
|
4,243 |
Total Stockholders'
Equity |
|
|
716,839 |
|
|
663,403 |
Total Liabilities and
Stockholders' Equity |
|
$ |
811,024 |
|
$ |
766,895 |
INTREPID POTASH,
INC.CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS (UNAUDITED)FOR THE THREE AND SIX MONTHS
ENDED JUNE 30, 2022 AND 2021(In
thousands)
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Cash Flows from
Operating Activities: |
|
|
|
|
|
|
|
|
Net income |
|
$ |
23,708 |
|
|
$ |
19,499 |
|
|
$ |
55,130 |
|
|
$ |
21,950 |
|
Adjustments to reconcile net
income to net cash provided by operating activities: |
|
|
|
|
|
|
|
|
Depreciation, depletion and amortization |
|
|
8,025 |
|
|
|
8,598 |
|
|
|
16,923 |
|
|
|
18,079 |
|
Accretion of asset retirement obligation |
|
|
490 |
|
|
|
441 |
|
|
|
980 |
|
|
|
882 |
|
Amortization of deferred financing costs |
|
|
60 |
|
|
|
126 |
|
|
|
120 |
|
|
|
194 |
|
Amortization of intangible assets |
|
|
81 |
|
|
|
81 |
|
|
|
161 |
|
|
|
161 |
|
Stock-based compensation |
|
|
1,391 |
|
|
|
765 |
|
|
|
2,558 |
|
|
|
1,655 |
|
Loss (gain) on disposal of assets |
|
|
1,066 |
|
|
|
(2,567 |
) |
|
|
1,166 |
|
|
|
(2,565 |
) |
Allowance for parts inventory obsolescence |
|
|
1,600 |
|
|
|
— |
|
|
|
1,600 |
|
|
|
— |
|
Gain on extinguishment of debt |
|
|
— |
|
|
|
(10,113 |
) |
|
|
— |
|
|
|
(10,113 |
) |
Changes in operating assets
and liabilities: |
|
|
|
|
|
|
|
|
Trade accounts receivable, net |
|
|
18,969 |
|
|
|
13,868 |
|
|
|
2,770 |
|
|
|
(235 |
) |
Other receivables, net |
|
|
(262 |
) |
|
|
(173 |
) |
|
|
(646 |
) |
|
|
(893 |
) |
Inventory, net |
|
|
(3,606 |
) |
|
|
4,474 |
|
|
|
(2,759 |
) |
|
|
13,767 |
|
Prepaid expenses and other current assets |
|
|
749 |
|
|
|
137 |
|
|
|
673 |
|
|
|
495 |
|
Deferred tax assets, net |
|
|
7,941 |
|
|
|
— |
|
|
|
16,941 |
|
|
|
— |
|
Accounts payable, accrued liabilities, and accrued employee
compensation and benefits |
|
|
(10,550 |
) |
|
|
(1,955 |
) |
|
|
(11,412 |
) |
|
|
6,023 |
|
Operating lease liabilities |
|
|
(438 |
) |
|
|
(536 |
) |
|
|
(1,233 |
) |
|
|
(1,061 |
) |
Other liabilities |
|
|
(105 |
) |
|
|
(318 |
) |
|
|
257 |
|
|
|
3,097 |
|
Net cash provided by operating activities |
|
|
49,119 |
|
|
|
32,327 |
|
|
|
83,229 |
|
|
|
51,436 |
|
|
|
|
|
|
|
|
|
|
Cash Flows from
Investing Activities: |
|
|
|
|
|
|
|
|
Additions to property, plant, equipment, mineral properties and
other assets |
|
|
(15,979 |
) |
|
|
(4,266 |
) |
|
|
(22,774 |
) |
|
|
(6,626 |
) |
Purchase of investments |
|
|
(9,996 |
) |
|
|
— |
|
|
|
(10,899 |
) |
|
|
— |
|
Proceeds from sale of assets |
|
|
22 |
|
|
|
5,995 |
|
|
|
46 |
|
|
|
6,042 |
|
Net cash (used in) provided by investing activities |
|
|
(25,953 |
) |
|
|
1,729 |
|
|
|
(33,627 |
) |
|
|
(584 |
) |
|
|
|
|
|
|
|
|
|
Cash Flows from
Financing Activities: |
|
|
|
|
|
|
|
|
Debt prepayment costs |
|
|
— |
|
|
|
(503 |
) |
|
|
— |
|
|
|
(505 |
) |
Repayments of long-term debt |
|
|
— |
|
|
|
(14,978 |
) |
|
|
— |
|
|
|
(15,000 |
) |
Payments of financing lease |
|
|
— |
|
|
|
(1,151 |
) |
|
|
— |
|
|
|
(1,258 |
) |
Employee tax withholding paid for restricted stock upon
vesting |
|
|
(1,548 |
) |
|
|
(176 |
) |
|
|
(4,362 |
) |
|
|
(380 |
) |
Proceeds from exercise of stock options |
|
|
20 |
|
|
|
8 |
|
|
|
110 |
|
|
|
51 |
|
Net cash used in financing activities |
|
|
(1,528 |
) |
|
|
(16,800 |
) |
|
|
(4,252 |
) |
|
|
(17,092 |
) |
|
|
|
|
|
|
|
|
|
Net Change in Cash,
Cash Equivalents and Restricted Cash |
|
|
21,638 |
|
|
|
17,256 |
|
|
|
45,350 |
|
|
|
33,760 |
|
Cash, Cash Equivalents
and Restricted Cash, beginning of period |
|
|
60,858 |
|
|
|
36,688 |
|
|
|
37,146 |
|
|
|
20,184 |
|
Cash, Cash Equivalents
and Restricted Cash, end of period |
|
$ |
82,496 |
|
|
$ |
53,944 |
|
|
$ |
82,496 |
|
|
$ |
53,944 |
|
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 income, adjusted net 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 Income and Adjusted Net Income Per
Diluted Share
Adjusted net income and adjusted net income per diluted share
are calculated as net income or 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 Income to Adjusted Net Income:
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
2022 |
|
|
2021 |
|
|
|
2022 |
|
|
2021 |
|
|
(in thousands) |
Net Income |
$ |
23,708 |
|
$ |
19,499 |
|
|
$ |
55,130 |
|
$ |
21,950 |
|
Adjustments |
|
|
|
|
|
|
|
Loss (gain) on sale of
assets |
|
1,066 |
|
|
(2,567 |
) |
|
|
1,166 |
|
|
(2,565 |
) |
Gain on extinguishment of
debt |
|
— |
|
|
(10,113 |
) |
|
|
— |
|
|
(10,113 |
) |
Write-off of deferred
financing fees |
|
— |
|
|
60 |
|
|
|
— |
|
|
60 |
|
Make-whole payment |
|
— |
|
|
503 |
|
|
|
— |
|
|
505 |
|
Total adjustments |
|
1,066 |
|
|
(12,117 |
) |
|
|
1,166 |
|
|
(12,113 |
) |
Adjusted Net Income |
$ |
24,774 |
|
$ |
7,382 |
|
|
$ |
56,296 |
|
$ |
9,837 |
|
Reconciliation of Net Income per Share to Adjusted Net Income
per Share:
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
2022 |
|
|
2021 |
|
|
|
2022 |
|
|
2021 |
|
Net Income Per Diluted
Share |
$ |
1.74 |
|
$ |
1.46 |
|
|
$ |
4.03 |
|
$ |
1.65 |
|
Adjustments |
|
|
|
|
|
|
|
Loss (gain) on sale of
assets |
|
0.08 |
|
|
(0.19 |
) |
|
|
0.09 |
|
|
(0.19 |
) |
Gain on extinguishment of
debt |
|
— |
|
|
(0.76 |
) |
|
|
— |
|
|
(0.76 |
) |
Write-off of deferred
financing fees |
|
— |
|
|
— |
|
|
|
— |
|
|
— |
|
Make-whole payment |
|
— |
|
|
0.04 |
|
|
|
— |
|
|
0.04 |
|
Total adjustments |
|
0.08 |
|
|
(0.91 |
) |
|
|
0.09 |
|
|
(0.91 |
) |
Adjusted Net Income Per
Diluted Share |
$ |
1.82 |
|
$ |
0.55 |
|
|
$ |
4.12 |
|
$ |
0.74 |
|
Adjusted EBITDA
Adjusted earnings before interest, taxes, depreciation, and
amortization (or adjusted EBITDA) is calculated as net 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 Income to Adjusted EBITDA:
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
|
2022 |
|
|
2021 |
|
|
|
2022 |
|
|
2021 |
|
|
|
(in thousands) |
Net Income |
|
$ |
23,708 |
|
$ |
19,499 |
|
|
$ |
55,130 |
|
$ |
21,950 |
|
Loss (gain) on sale of
assets |
|
|
1,066 |
|
|
(2,567 |
) |
|
|
1,166 |
|
|
(2,565 |
) |
Gain on extinguishment of
debt |
|
|
— |
|
|
(10,113 |
) |
|
|
— |
|
|
(10,113 |
) |
Interest
expense |
|
|
24 |
|
|
918 |
|
|
|
57 |
|
|
1,344 |
|
Income tax
expense |
|
|
8,089 |
|
|
— |
|
|
|
17,228 |
|
|
— |
|
Depreciation, depletion, and
amortization |
|
|
8,025 |
|
|
8,598 |
|
|
|
16,923 |
|
|
18,079 |
|
Amortization of
intangible assets |
|
|
81 |
|
|
81 |
|
|
|
161 |
|
|
161 |
|
Accretion of
asset retirement obligation |
|
|
490 |
|
|
441 |
|
|
|
980 |
|
|
882 |
|
Total adjustments |
|
|
17,775 |
|
|
(2,642 |
) |
|
|
36,515 |
|
|
7,788 |
|
Adjusted EBITDA |
|
$ |
41,483 |
|
$ |
16,857 |
|
|
$ |
91,645 |
|
$ |
29,738 |
|
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 June 30, |
|
|
|
2022 |
|
|
2021 |
(in thousands, except per ton
amounts) |
|
Potash |
|
Trio® |
|
Potash |
|
Trio® |
Total Segment Sales |
|
$ |
48,827 |
|
$ |
35,467 |
|
$ |
37,693 |
|
$ |
26,924 |
Less: Segment byproduct
sales |
|
|
4,942 |
|
|
780 |
|
|
4,812 |
|
|
584 |
Freight costs |
|
|
2,563 |
|
|
5,609 |
|
|
3,486 |
|
|
6,037 |
Subtotal |
|
$ |
41,322 |
|
$ |
29,078 |
|
$ |
29,395 |
|
$ |
20,303 |
|
|
|
|
|
|
|
|
|
Divided by: |
|
|
|
|
|
|
|
|
Tons sold |
|
|
56 |
|
|
59 |
|
|
92 |
|
|
75 |
Average net realized sales
price per ton |
|
$ |
738 |
|
$ |
493 |
|
$ |
319 |
|
$ |
271 |
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, |
|
|
|
2022 |
|
|
2021 |
(in thousands, except per ton
amounts) |
|
Potash |
|
Trio® |
|
Potash |
|
Trio® |
Total Segment Sales |
|
$ |
105,269 |
|
$ |
76,519 |
|
$ |
81,270 |
|
$ |
50,619 |
Less: Segment byproduct
sales |
|
|
9,762 |
|
|
2,216 |
|
|
10,595 |
|
|
1,764 |
Freight costs |
|
|
5,687 |
|
|
11,919 |
|
|
8,295 |
|
|
12,477 |
Subtotal |
|
$ |
89,820 |
|
$ |
62,384 |
|
$ |
62,380 |
|
$ |
36,378 |
|
|
|
|
|
|
|
|
|
Divided by: |
|
|
|
|
|
|
|
|
Tons sold |
|
|
126 |
|
|
131 |
|
|
208 |
|
|
145 |
Average net realized sales
price per ton |
|
$ |
713 |
|
$ |
476 |
|
$ |
300 |
|
$ |
251 |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, 2022 |
Product |
|
Potash Segment |
|
Trio®
Segment |
|
Oilfield Solutions Segment |
|
Intersegment Eliminations |
|
Total |
Potash |
|
$ |
43,885 |
|
$ |
— |
|
$ |
— |
|
$ |
(66 |
) |
|
$ |
43,819 |
Trio® |
|
|
— |
|
|
34,687 |
|
|
— |
|
|
— |
|
|
|
34,687 |
Water |
|
|
363 |
|
|
724 |
|
|
3,692 |
|
|
— |
|
|
|
4,779 |
Salt |
|
|
2,658 |
|
|
56 |
|
|
— |
|
|
— |
|
|
|
2,714 |
Magnesium Chloride |
|
|
1,199 |
|
|
— |
|
|
— |
|
|
— |
|
|
|
1,199 |
Brine Water |
|
|
722 |
|
|
— |
|
|
648 |
|
|
— |
|
|
|
1,370 |
Other |
|
|
— |
|
|
— |
|
|
3,172 |
|
|
— |
|
|
|
3,172 |
Total Revenue |
|
$ |
48,827 |
|
$ |
35,467 |
|
$ |
7,512 |
|
$ |
(66 |
) |
|
$ |
91,740 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, 2022 |
Product |
|
Potash Segment |
|
Trio®
Segment |
|
Oilfield Solutions Segment |
|
Intersegment Eliminations |
|
Total |
Potash |
|
$ |
95,507 |
|
$ |
— |
|
$ |
— |
|
$ |
(161 |
) |
|
$ |
95,346 |
Trio® |
|
|
— |
|
|
74,303 |
|
|
— |
|
|
— |
|
|
|
74,303 |
Water |
|
|
1,137 |
|
|
1,926 |
|
|
7,880 |
|
|
— |
|
|
|
10,943 |
Salt |
|
|
5,292 |
|
|
290 |
|
|
— |
|
|
— |
|
|
|
5,582 |
Magnesium Chloride |
|
|
2,014 |
|
|
— |
|
|
— |
|
|
— |
|
|
|
2,014 |
Brine Water |
|
|
1,319 |
|
|
— |
|
|
1,387 |
|
|
— |
|
|
|
2,706 |
Other |
|
|
— |
|
|
— |
|
|
5,245 |
|
|
— |
|
|
|
5,245 |
Total Revenue |
|
$ |
105,269 |
|
$ |
76,519 |
|
$ |
14,512 |
|
$ |
(161 |
) |
|
$ |
196,139 |
|
|
Three Months Ended June 30, 2021 |
Product |
|
Potash Segment |
|
Trio®
Segment |
|
Oilfield Solutions Segment |
|
Intersegment Eliminations |
|
Total |
Potash |
|
$ |
32,881 |
|
$ |
— |
|
$ |
— |
|
$ |
(60 |
) |
|
$ |
32,821 |
Trio® |
|
|
— |
|
|
26,340 |
|
|
— |
|
|
— |
|
|
|
26,340 |
Water |
|
|
520 |
|
|
514 |
|
|
1,783 |
|
|
— |
|
|
|
2,817 |
Salt |
|
|
2,008 |
|
|
70 |
|
|
— |
|
|
— |
|
|
|
2,078 |
Magnesium Chloride |
|
|
1,880 |
|
|
— |
|
|
— |
|
|
— |
|
|
|
1,880 |
Brine Water |
|
|
404 |
|
|
— |
|
|
229 |
|
|
— |
|
|
|
633 |
Other |
|
|
— |
|
|
— |
|
|
1,319 |
|
|
— |
|
|
|
1,319 |
Total Revenue |
|
$ |
37,693 |
|
$ |
26,924 |
|
$ |
3,331 |
|
$ |
(60 |
) |
|
$ |
67,888 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, 2021 |
Product |
|
Potash Segment |
|
Trio® Segment |
|
Oilfield Solutions Segment |
|
Intersegment Eliminations |
|
Total |
Potash |
|
$ |
70,675 |
|
$ |
— |
|
$ |
— |
|
$ |
(122 |
) |
|
$ |
70,553 |
Trio® |
|
|
— |
|
|
48,855 |
|
|
— |
|
|
— |
|
|
|
48,855 |
Water |
|
|
1,679 |
|
|
1,498 |
|
|
5,125 |
|
|
— |
|
|
|
8,302 |
Salt |
|
|
4,047 |
|
|
266 |
|
|
— |
|
|
— |
|
|
|
4,313 |
Magnesium Chloride |
|
|
3,908 |
|
|
— |
|
|
— |
|
|
— |
|
|
|
3,908 |
Brine Water |
|
|
961 |
|
|
— |
|
|
434 |
|
|
— |
|
|
|
1,395 |
Other |
|
|
— |
|
|
— |
|
|
2,025 |
|
|
— |
|
|
|
2,025 |
Total Revenue |
|
$ |
81,270 |
|
$ |
50,619 |
|
$ |
7,584 |
|
$ |
(122 |
) |
|
$ |
139,351 |
Three Months
EndedJune 30, 2022 |
|
Potash |
|
Trio® |
|
Oilfield Solutions |
|
Other |
|
Consolidated |
Sales |
|
$ |
48,827 |
|
$ |
35,467 |
|
$ |
7,512 |
|
$ |
(66 |
) |
|
$ |
91,740 |
Less: Freight costs |
|
|
3,682 |
|
|
5,611 |
|
|
— |
|
|
(66 |
) |
|
|
9,227 |
Warehousing and handling
costs |
|
|
1,209 |
|
|
995 |
|
|
— |
|
|
— |
|
|
|
2,204 |
Cost of goods sold |
|
|
19,011 |
|
|
15,809 |
|
|
3,678 |
|
|
— |
|
|
|
38,498 |
Gross Margin |
|
$ |
24,925 |
|
$ |
13,052 |
|
$ |
3,834 |
|
$ |
— |
|
|
$ |
41,811 |
Depreciation, depletion, and
amortization incurred1 |
|
$ |
6,085 |
|
$ |
1,042 |
|
$ |
803 |
|
$ |
176 |
|
|
$ |
8,106 |
|
|
|
|
|
|
|
|
|
|
|
Six Months
Ended June 30, 2022 |
|
Potash |
|
Trio® |
|
Oilfield Solutions |
|
Other |
|
Consolidated |
Sales |
|
$ |
105,269 |
|
$ |
76,519 |
|
$ |
14,512 |
|
$ |
(161 |
) |
|
$ |
196,139 |
Less: Freight costs |
|
|
7,705 |
|
|
11,920 |
|
|
— |
|
|
(161 |
) |
|
|
19,464 |
Warehousing and handling
costs |
|
|
2,533 |
|
|
2,147 |
|
|
— |
|
|
— |
|
|
|
4,680 |
Cost of goods sold |
|
|
41,041 |
|
|
33,261 |
|
|
8,706 |
|
|
— |
|
|
|
83,008 |
Gross Margin |
|
$ |
53,990 |
|
$ |
29,191 |
|
$ |
5,806 |
|
$ |
— |
|
|
$ |
88,987 |
Depreciation, depletion, and
amortization incurred1 |
|
$ |
13,033 |
|
$ |
2,050 |
|
$ |
1,590 |
|
$ |
411 |
|
|
$ |
17,084 |
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended June 30, 2021 |
|
Potash |
|
Trio® |
|
Oilfield Solutions |
|
Other |
|
Consolidated |
Sales |
|
$ |
37,693 |
|
$ |
26,924 |
|
$ |
3,331 |
|
$ |
(60 |
) |
|
$ |
67,888 |
Less: Freight costs |
|
|
4,138 |
|
|
6,037 |
|
|
— |
|
|
(60 |
) |
|
|
10,115 |
Warehousing and handling
costs |
|
|
1,306 |
|
|
1,072 |
|
|
— |
|
|
— |
|
|
|
2,378 |
Cost of goods sold |
|
|
22,118 |
|
|
16,653 |
|
|
2,425 |
|
|
— |
|
|
|
41,196 |
Gross Margin |
|
$ |
10,131 |
|
$ |
3,162 |
|
$ |
906 |
|
$ |
— |
|
|
$ |
14,199 |
Depreciation, depletion, and
amortization incurred1 |
|
$ |
6,460 |
|
$ |
1,376 |
|
$ |
700 |
|
$ |
143 |
|
|
$ |
8,679 |
|
|
|
|
|
|
|
|
|
|
|
Six Months
Ended June 30, 2021 |
|
Potash |
|
Trio® |
|
Oilfield Solutions |
|
Other |
|
Consolidated |
Sales |
|
$ |
81,270 |
|
$ |
50,619 |
|
$ |
7,584 |
|
$ |
(122 |
) |
|
$ |
139,351 |
Less: Freight costs |
|
|
9,838 |
|
|
12,477 |
|
|
— |
|
|
(122 |
) |
|
|
22,193 |
Warehousing and handling
costs |
|
|
2,762 |
|
|
2,248 |
|
|
— |
|
|
— |
|
|
|
5,010 |
Cost of goods sold |
|
|
49,867 |
|
|
32,801 |
|
|
6,173 |
|
|
— |
|
|
|
88,841 |
Gross Margin |
|
$ |
18,803 |
|
$ |
3,093 |
|
$ |
1,411 |
|
$ |
— |
|
|
$ |
23,307 |
Depreciation, depletion and
amortization incurred1 |
|
$ |
13,637 |
|
$ |
2,883 |
|
$ |
1,388 |
|
$ |
332 |
|
|
$ |
18,240 |
(1) Depreciation, depletion, and amortization incurred for
potash and Trio® excludes depreciation, depletion, and amortization
amounts absorbed in or relieved from inventory.
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