Intrepid Potash, Inc. ("Intrepid", the "Company", "we", "us",
"our") (NYSE:IPI) today reported its results for the first quarter
of 2023.
Key Highlights for First Quarter 2023
Financial & Operational
- Total sales of $86.9 million, which compares to $104.4 million
in the first quarter of 2022, as Potash and Trio® average net
realized sales prices(1) decreased to $485 and $344 per ton,
respectively.
- Net income of $4.5 million (or $0.35 per diluted share), which
compares to $31.4 million in the first quarter of 2022 (or $2.31
per diluted share).
- Gross margin of $16.4 million, which compares to $47.2 million
in the first quarter of 2022.
- Cash flow from operations of $8.4 million, which compares
to $34.1 million in the first quarter of 2022.
- Adjusted EBITDA(1) of $16.4 million, which compares to $50.2
million in the first quarter of 2022.
- Potash and Trio® sales volumes of 89 thousand and 65 thousand
tons, respectively, which compares to prior-year respective figures
of 69 thousand and 71 thousand, respectively.
Liquidity
- As of April 28, 2023, Intrepid had approximately $9.5 million
in cash and cash equivalents and $150 million available under its
revolving credit facility, for total liquidity of approximately
$159.5 million.
- Intrepid maintains an investment account of short-and-long-term
fixed income securities that had a balance of approximately $7.8
million as of April 28, 2023.
Capital Expenditures
- Incurred capital expenditures of $21.0 million in the first
quarter of 2023 and expect full-year 2023 capital expenditures to
be in the range of $60 to $75 million.
- We have two primary goals for our 2023 capital expenditures.
First, continue to invest in our potash and Trio® assets to improve
our production and unit economics. Second, invest in our sand
project at Intrepid South.
East Facility in Carlsbad, New Mexico
- The first of the two new continuous miners at our East plant
has been delivered and is expected to improve operating
efficiencies in the coming months. The second new miner is
scheduled for July delivery and should be operational by the middle
of the third quarter.
HB Facility in Carlsbad, New Mexico
- For Phase 1 - the new injection pipeline - installation
continues to make progress despite permitting delays. We expect the
pipeline to be in place by the end of the second quarter with
improved brine injection rates starting in the second half of 2023.
For Phase 2 - the in-line pigging system - which is designed to
clean the pipeline and prevent scaling, is still being permitted,
with construction likely beginning by the end of the year. The goal
of this system is to help ensure that we maintain consistent flow
rates in our injection pipeline.
- To target high-grade brine in the near-term, we are undertaking
a new, lower-cost capital project to extract a pool of
already-known, high-grade brine from the HB Eddy shaft. Permitting
and construction are both underway with operations expected to
commence in Q4/23.
- We still plan to drill a replacement extraction well designed
to have a long-term operational life to target brine from the HB
mine system, although this project may get pushed to 2024 due to
the HB Eddy shaft project.
Solar Solution Potash Mine in Moab, Utah
- Successfully drilled a new three-lateral potash cavern in
Potash Bed 9, which is expected to be online in the second quarter.
During the drilling process, we were able to stay in the target
interval for longer than any of our previously drilled horizontal
caverns, and initial measurements show good availability of
high-grade potash.
- After we completed the drilling of the new potash cavern, we
moved the rig to drill into the original mine workings in Potash
Bed 5 to target low spots ("sumps") that we believe contain
high-grade brine pools. This brine was previously accessed by a
vertical well, but by now using horizontal laterals, we can more
effectively target the resource. We have a goal for July 2023
completion, which will allow us to pump this brine into our solar
ponds for the latter part of the 2023 evaporation season.
Sand Resources at Intrepid South
- We continue to work through the permitting process for our sand
project and expect construction to begin by the end of 2023. We
have begun engaging with potential customers for commercial
agreements, and due to the strategic location of our sand resource
in the Delaware basin in New Mexico, we have seen notably strong
interest.
Consolidated Results, Management Commentary, &
OutlookIntrepid generated first quarter 2023 sales of
$86.9 million, a 17% decrease from first quarter 2022 sales of
$104.4 million. Consolidated gross margin in the first quarter of
2023 totaled $16.4 million, while net income totaled $4.5
million, or $0.35 per diluted share, which compares to first
quarter 2022 net income of $31.4 million, or $2.31 per diluted
share. The Company delivered adjusted EBITDA of $16.4 million in
the first quarter of 2023, down from $50.2 million in the same
prior year period, with the lower profitability driven by lower
pricing for our key products. Our net realized sales price for
potash and Trio® averaged $485 and $344 per ton, respectively, in
the first quarter of 2023, which compares to $703 and $469 per ton,
respectively, in the first quarter of 2022.
Bob Jornayvaz, Intrepid's Executive Chairman and CEO
commented:
"Intrepid's first quarter of 2023 saw a meaningful pickup in
demand for our key products, with potash and Trio® sales volumes
totaling 89 thousand and 65 thousand tons, respectively. While our
first quarter profitability was impacted by lower pricing compared
to last year, potash pricing still remains elevated compared to
recent historical levels, with U.S. corn belt potash trading at
approximately $490 per short ton for prompt tons in the ongoing
spring application. This price level still supports solid margins
for Intrepid, with farmers also viewing this price as attractive
given their strong economics in the backdrop of a supportive crop
futures market. Looking into the second quarter, we anticipate
steady demand for our products as farmers look to maximize their
yields. The recent settlement of a key international contract has
also helped establish a pricing floor for potash, and in the U.S.,
we've recently seen increases in pricing as in-season demand has
exceeded nearby supply. Moreover, the conflict in Eastern Europe
continues to be a key potash supply risk, adding further pricing
support for the industry.
For 2023, our key focus is successful execution of our capital
projects and we are encouraged by the progress so far. For our
potash projects, we feel that we have the right personnel in place
to help ensure we'll deliver improved brine quality and production.
Due to the solar evaporation process at our potash facilities, it
will take multiple evaporation seasons until we see the full
benefit from the HB pipeline and Moab potash cavern projects, but
we are confident in the long-term benefit these projects will have
on our production. Other projects, specifically the HB Eddy Shaft,
the horizontal drilling into sumps in Moab, and the replacement
extraction well at HB, are expected to have a more immediate
benefit to production by targeting areas of already-known,
high-grade brine that is ready for extraction. For the sand project
at Intrepid South, we look forward to working through the necessary
permitting, beginning construction later this year, and then
starting to add higher and more diversified revenue streams in our
Oilfield Solutions segment. We've seen notably strong interest from
customers given the project's strategic location and potential to
support decades of sand production. Overall, we're pleased by the
start to 2023 and have a constructive outlook for the remainder of
the year."
Segment Highlights
Potash
|
|
Three Months Ended March 31, |
|
|
|
2023 |
|
|
2022 |
|
|
(in thousands, except per ton data) |
Sales |
|
$ |
52,497 |
|
$ |
56,442 |
Gross margin |
|
$ |
14,428 |
|
$ |
29,064 |
|
|
|
|
|
Potash sales volumes (in
tons) |
|
|
89 |
|
|
69 |
Potash production volumes (in
tons) |
|
|
90 |
|
|
103 |
|
|
|
|
|
Average potash net realized
sales price per ton(1) |
|
$ |
485 |
|
$ |
703 |
Potash segment sales in the first quarter of 2023 decreased 7%
to $52.5 million when compared to the same period in 2022. The
lower revenue was driven by a 31% decrease in our average net
realized sales price per ton to $485, which compares to $703 per
ton in the prior year period. The lower average net realized sales
price per ton in the first quarter of 2023 was partially offset by
higher potash sales volumes, which totaled 89 thousand tons, a 29%
increase compared to the first quarter of 2022.
In the first quarter of 2022, potash prices were significantly
higher due to concerns around supply issues related to sanctions
imposed on Belarus and Russia's invasion of Ukraine, which resulted
in many global distributors increasing their potash purchases to
build inventory. Consequently, carryover inventory after the 2022
spring application season was higher than expected, leading to
comfortable inventory levels ahead of the fall application season.
With many buyers maintaining a cautious approach, the potash market
experienced demand deferral in the second half of 2022, with prices
declining through the end of 2022, and into the first quarter of
2023.
Potash segment gross margin totaled $14.4 million, which
compares to $29.1 million in the first quarter of 2022. The lower
gross margin was primarily driven by a 43% increase in segment cost
of goods sold compared to the first quarter of 2022, which was due
to a 29% increase in sales volumes and a higher weighted average
carrying cost per ton due to overall inflationary cost pressures
over the past twelve months.
Potash production totaled 90 thousand tons in the first quarter
of 2023, which compares to 103 thousand tons produced in the same
prior year period. The decrease in potash production was primarily
driven by lower production at our HB facility.
Trio®
|
|
Three Months Ended March 31, |
|
|
|
2023 |
|
|
2022 |
|
|
(in thousands, except per ton data) |
Sales |
|
$ |
30,274 |
|
$ |
41,052 |
Gross margin |
|
$ |
1,452 |
|
$ |
16,140 |
|
|
|
|
|
Trio® sales volume (in
tons) |
|
|
65 |
|
|
71 |
Trio® production volume (in
tons) |
|
|
49 |
|
|
65 |
|
|
|
|
|
Average Trio® net realized
sales price per ton(1) |
|
$ |
344 |
|
$ |
469 |
Trio® segment sales of $30.3 million for the first quarter of
2023 were 26% lower compared to the same prior year period, which
was primarily driven by a lower average net realized sales price
per ton of $344, a decrease of 27% compared to the first quarter of
2022. Similar to potash, Trio® pricing saw a significant increase
in the first quarter of 2022, but declined over the course of the
year into the first quarter of 2023, as customers ended the 2022
spring application season with higher levels of carryover inventory
than anticipated. Trio® sales volumes decreased by 8% to 65
thousand tons in the first quarter of 2023, as we had less domestic
sales - partially offset by higher international sales - and buyers
continued to favor a just-in-time approach. Moreover, our first
quarter 2022 Trio® sales were positively impacted by high potash
prices as customers purchased more Trio® due to its relative value
versus potash.
Trio® segment gross margin totaled $1.5 million for the first
quarter of 2023, which compares to $16.1 million in the same prior
year period. The decrease in profitability was primarily driven by
the lower net realized sales price per ton, as well as higher cost
of goods sold of $20.9 million, an increase of 20% compared to the
first quarter of 2022. Our cost of goods sold in the Trio® segment
increased from higher labor costs as we continued to operate an
additional underground shift at our East facility and due to
overall inflationary cost pressures over the past twelve
months.
First quarter 2023 Trio® production totaled 49 thousand tons, a
decrease of 16 thousand tons compared to the first quarter of 2022.
During the first quarter, our East plant experienced net unplanned
downtime of approximately eight days, which was the primary reason
for the lower production. We were able to push forward some planned
maintenance projects during the outage which will allow us to make
up some of the downtime in future quarters. For the second quarter
of 2023, we expect the first of the two continuous underground
miners we previously purchased to commence operations, with
delivery for the second miner expected in the third quarter of
2023. The two new miners are expected to drive improved
efficiencies and production.
Oilfield Solutions
|
|
Three Months Ended March 31, |
|
|
|
2023 |
|
|
2022 |
|
|
(in thousands) |
Sales |
|
$ |
4,250 |
|
$ |
7,000 |
Gross margin |
|
$ |
472 |
|
$ |
1,972 |
Our Oilfield Solutions segment sales decreased $2.8 million, or
39%, in the first quarter of 2023 compared to the first quarter of
2022, which was primarily driven by a $2.6 million decrease in
water sales. We sold less water in the first quarter of 2023
primarily due to timing of sales related to completion activity,
which has since seen an increase in the second quarter with the
start of a new frac job.
Our cost of goods sold decreased $1.3 million, or 25%, for the
first quarter of 2023 compared to the same period in 2022. However,
the lower segment sales more than offset the decrease in cost of
goods sold, and our Oilfield Solutions segment gross margin
experienced a decrease of $1.5 million in the first quarter of
2023.
LiquidityDuring the first quarter of 2023, cash
flow from operations was $8.4 million, while cash used in investing
activities was $20.4 million. As of April 28, 2023, we had
approximately $9.5 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
$159.5 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 Thursday, May 4, 2023, 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 May 11, 2023.
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;
- 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, 2022.
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, 2023 AND 2022 (In thousands, except per
share amounts)
|
|
Three Months Ended March 31, |
|
|
|
2023 |
|
|
|
2022 |
|
Sales |
|
$ |
86,920 |
|
|
$ |
104,399 |
|
Less: |
|
|
|
|
Freight costs |
|
|
11,590 |
|
|
|
10,237 |
|
Warehousing and handling costs |
|
|
2,733 |
|
|
|
2,476 |
|
Cost of goods sold |
|
|
56,245 |
|
|
|
44,510 |
|
Gross
Margin |
|
|
16,352 |
|
|
|
47,176 |
|
|
|
|
|
|
Selling and
administrative |
|
|
8,858 |
|
|
|
6,789 |
|
Accretion of asset retirement
obligation |
|
|
535 |
|
|
|
490 |
|
Loss on sale of assets |
|
|
200 |
|
|
|
100 |
|
Other operating expense
(income) |
|
|
1,385 |
|
|
|
(267 |
) |
Operating
Income |
|
|
5,374 |
|
|
|
40,064 |
|
|
|
|
|
|
Other Income
(Expense) |
|
|
|
|
Equity in earnings of
unconsolidated entities |
|
|
821 |
|
|
|
— |
|
Interest expense, net |
|
|
— |
|
|
|
(33 |
) |
Interest income |
|
|
85 |
|
|
|
— |
|
Other income |
|
|
13 |
|
|
|
530 |
|
Income Before Income
Taxes |
|
|
6,293 |
|
|
|
40,561 |
|
|
|
|
|
|
Income Tax
Expense |
|
|
(1,787 |
) |
|
|
(9,139 |
) |
Net
Income |
|
$ |
4,506 |
|
|
$ |
31,422 |
|
|
|
|
|
|
Weighted Average Shares
Outstanding: |
|
|
|
|
Basic |
|
|
12,694 |
|
|
|
13,160 |
|
Diluted |
|
|
12,875 |
|
|
|
13,595 |
|
Earnings Per Share: |
|
|
|
|
Basic |
|
$ |
0.35 |
|
|
$ |
2.39 |
|
Diluted |
|
$ |
0.35 |
|
|
$ |
2.31 |
|
INTREPID POTASH,
INC.CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)AS OF MARCH 31, 2023 AND DECEMBER 31,
2022(In thousands, except share and per share
amounts)
|
|
March 31, |
|
December 31, |
|
|
|
2023 |
|
|
|
2022 |
|
ASSETS |
|
|
|
|
Cash and cash equivalents |
|
$ |
10,451 |
|
|
$ |
18,514 |
|
Short-term investments |
|
|
4,960 |
|
|
|
5,959 |
|
Accounts receivable: |
|
|
|
|
Trade, net |
|
|
39,211 |
|
|
|
26,737 |
|
Other receivables, net |
|
|
854 |
|
|
|
790 |
|
Inventory, net |
|
|
107,174 |
|
|
|
114,816 |
|
Prepaid expenses and other
current assets |
|
|
4,432 |
|
|
|
4,863 |
|
Total current assets |
|
|
167,082 |
|
|
|
171,679 |
|
|
|
|
|
|
Property, plant, equipment,
and mineral properties, net |
|
|
387,851 |
|
|
|
375,630 |
|
Water rights |
|
|
19,184 |
|
|
|
19,184 |
|
Long-term parts inventory,
net |
|
|
24,820 |
|
|
|
24,823 |
|
Long-term investments |
|
|
10,824 |
|
|
|
9,841 |
|
Other assets, net |
|
|
7,138 |
|
|
|
7,294 |
|
Non-current deferred tax
asset, net |
|
|
184,091 |
|
|
|
185,752 |
|
Total
Assets |
|
$ |
800,990 |
|
|
$ |
794,203 |
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS'
EQUITY |
|
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
14,858 |
|
|
$ |
18,645 |
|
Accrued liabilities |
|
|
14,368 |
|
|
|
16,212 |
|
Accrued employee compensation
and benefits |
|
|
6,181 |
|
|
|
6,975 |
|
Other current liabilities |
|
|
8,843 |
|
|
|
7,044 |
|
Total current liabilities |
|
|
44,250 |
|
|
|
48,876 |
|
|
|
|
|
|
Advances on credit
facility |
|
|
5,000 |
|
|
|
— |
|
Asset retirement obligation,
net of current portion |
|
|
27,099 |
|
|
|
26,564 |
|
Operating lease
liabilities |
|
|
1,814 |
|
|
|
2,206 |
|
Finance lease liabilities |
|
|
1,219 |
|
|
|
— |
|
Other non-current
liabilities |
|
|
1,315 |
|
|
|
1,479 |
|
Total
Liabilities |
|
|
80,697 |
|
|
|
79,125 |
|
|
|
|
|
|
Commitments and
Contingencies |
|
|
|
|
Common stock, $0.001 par
value; 40,000,000 shares authorized; |
|
|
|
|
12,759,990 and 12,687,822 shares outstanding |
|
|
|
|
at March 31, 2023, and December 31, 2022, respectively |
|
|
13 |
|
|
|
13 |
|
Additional paid-in
capital |
|
|
661,323 |
|
|
|
660,614 |
|
Retained earnings |
|
|
80,969 |
|
|
|
76,463 |
|
Less treasury stock, at
cost |
|
|
(22,012 |
) |
|
|
(22,012 |
) |
Total Stockholders'
Equity |
|
|
720,293 |
|
|
|
715,078 |
|
Total Liabilities and
Stockholders' Equity |
|
$ |
800,990 |
|
|
$ |
794,203 |
|
INTREPID POTASH,
INC.CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS (UNAUDITED)FOR THE THREE MONTHS ENDED MARCH
31, 2023 AND 2022(In thousands)
|
|
Three Months Ended March 31, |
|
|
|
2023 |
|
|
|
2022 |
|
Cash Flows from
Operating Activities: |
|
|
|
|
Net income |
|
$ |
4,506 |
|
|
$ |
31,422 |
|
Adjustments to reconcile net
income to net cash provided by operating activities: |
|
|
|
|
Depreciation, depletion and amortization |
|
|
9,292 |
|
|
|
8,898 |
|
Accretion of asset retirement obligation |
|
|
535 |
|
|
|
490 |
|
Amortization of deferred financing costs |
|
|
75 |
|
|
|
60 |
|
Amortization of intangible assets |
|
|
80 |
|
|
|
80 |
|
Stock-based compensation |
|
|
1,746 |
|
|
|
1,167 |
|
Loss on disposal of assets |
|
|
200 |
|
|
|
100 |
|
Equity in earnings of unconsolidated entities |
|
|
(821 |
) |
|
|
— |
|
Distribution of earnings from unconsolidated entities |
|
|
320 |
|
|
|
— |
|
Changes in operating assets
and liabilities: |
|
|
|
|
Trade accounts receivable, net |
|
|
(12,474 |
) |
|
|
(16,199 |
) |
Other receivables, net |
|
|
(92 |
) |
|
|
(384 |
) |
Inventory, net |
|
|
7,645 |
|
|
|
847 |
|
Prepaid expenses and other current assets |
|
|
250 |
|
|
|
(76 |
) |
Deferred tax assets, net |
|
|
1,661 |
|
|
|
9,000 |
|
Accounts payable, accrued liabilities, and accrued employee
compensation and benefits |
|
|
(5,305 |
) |
|
|
(862 |
) |
Operating lease liabilities |
|
|
(401 |
) |
|
|
(795 |
) |
Other liabilities |
|
|
1,232 |
|
|
|
362 |
|
Net cash provided by operating activities |
|
|
8,449 |
|
|
|
34,110 |
|
|
|
|
|
|
Cash Flows from
Investing Activities: |
|
|
|
|
Additions to property, plant, equipment, mineral properties and
other assets |
|
|
(21,039 |
) |
|
|
(6,795 |
) |
Purchase of investments |
|
|
(956 |
) |
|
|
(903 |
) |
Proceeds from sale of assets |
|
|
65 |
|
|
|
24 |
|
Proceeds from redemptions/maturities of investments |
|
|
1,500 |
|
|
|
— |
|
Net cash used in investing activities |
|
|
(20,430 |
) |
|
|
(7,674 |
) |
|
|
|
|
|
Cash Flows from
Financing Activities: |
|
|
|
|
Payments of financing lease |
|
|
(43 |
) |
|
|
— |
|
Proceeds from short-term borrowings on credit facility |
|
|
5,000 |
|
|
|
— |
|
Employee tax withholding paid for restricted stock upon
vesting |
|
|
(1,037 |
) |
|
|
(2,814 |
) |
Proceeds from exercise of stock options |
|
|
— |
|
|
|
90 |
|
Net cash provided by (used in) financing activities |
|
|
3,920 |
|
|
|
(2,724 |
) |
|
|
|
|
|
Net Change in Cash,
Cash Equivalents and Restricted Cash |
|
|
(8,061 |
) |
|
|
23,712 |
|
Cash, Cash Equivalents
and Restricted Cash, beginning of period |
|
|
19,084 |
|
|
|
37,146 |
|
Cash, Cash Equivalents
and Restricted Cash, end of period |
|
$ |
11,023 |
|
|
$ |
60,858 |
|
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 March 31, |
|
|
2023 |
|
|
|
2022 |
|
|
(in thousands) |
Net Income |
$ |
4,506 |
|
|
$ |
31,422 |
|
Adjustments |
|
|
|
Loss on sale of assets |
|
200 |
|
|
|
100 |
|
Calculated income tax
effect(1) |
|
(52 |
) |
|
|
(26 |
) |
Total adjustments |
|
148 |
|
|
|
74 |
|
Adjusted Net Income |
$ |
4,654 |
|
|
$ |
31,496 |
|
Reconciliation of Net Income per Share to Adjusted Net Income
per Share:
|
Three Months Ended March 31, |
|
|
2023 |
|
|
2022 |
Net Income Per Diluted
Share |
$ |
0.35 |
|
$ |
2.31 |
Adjustments |
|
|
|
Loss on sale of assets |
|
0.02 |
|
|
0.01 |
Calculated income tax
effect(1) |
|
— |
|
|
— |
Total adjustments |
|
0.02 |
|
|
0.01 |
Adjusted Net Income Per
Diluted Share |
$ |
0.37 |
|
$ |
2.32 |
(1) Assumes an annual effective tax rate of 26%
for 2023 and 2022.
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 March 31, |
|
|
|
2023 |
|
|
2022 |
|
|
(in thousands) |
Net Income |
|
$ |
4,506 |
|
$ |
31,422 |
Loss on sale of assets |
|
|
200 |
|
|
100 |
Interest expense |
|
|
— |
|
|
33 |
Income tax expense |
|
|
1,787 |
|
|
9,139 |
Depreciation, depletion, and
amortization |
|
|
9,292 |
|
|
8,898 |
Amortization of intangible
assets |
|
|
80 |
|
|
80 |
Accretion of asset retirement
obligation |
|
|
535 |
|
|
490 |
Total adjustments |
|
|
11,894 |
|
|
18,740 |
Adjusted EBITDA |
|
$ |
16,400 |
|
$ |
50,162 |
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, |
|
|
|
2023 |
|
|
2022 |
(in thousands, except per ton
amounts) |
|
Potash |
|
Trio® |
|
Potash |
|
Trio® |
Total Segment Sales |
|
$ |
52,497 |
|
$ |
30,274 |
|
$ |
56,442 |
|
$ |
41,052 |
Less: Segment byproduct
sales |
|
|
5,342 |
|
|
1,221 |
|
|
4,820 |
|
|
1,436 |
Freight costs |
|
|
3,992 |
|
|
6,685 |
|
|
3,124 |
|
|
6,309 |
Subtotal |
|
$ |
43,163 |
|
$ |
22,368 |
|
$ |
48,498 |
|
$ |
33,307 |
|
|
|
|
|
|
|
|
|
Divided by: |
|
|
|
|
|
|
|
|
Tons sold |
|
|
89 |
|
|
65 |
|
|
69 |
|
|
71 |
Average net realized sales
price per ton |
|
$ |
485 |
|
$ |
344 |
|
$ |
703 |
|
$ |
469 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 Ended March 31, 2022 |
Product |
|
Potash Segment |
|
Trio®
Segment |
|
Oilfield Solutions Segment |
|
Intersegment Eliminations |
|
Total |
Potash |
|
$ |
51,622 |
|
$ |
— |
|
$ |
— |
|
$ |
(95 |
) |
|
$ |
51,527 |
Trio® |
|
|
— |
|
|
39,616 |
|
|
— |
|
|
— |
|
|
|
39,616 |
Water |
|
|
774 |
|
|
1,202 |
|
|
4,188 |
|
|
— |
|
|
|
6,164 |
Salt |
|
|
2,634 |
|
|
234 |
|
|
— |
|
|
— |
|
|
|
2,868 |
Magnesium Chloride |
|
|
815 |
|
|
— |
|
|
— |
|
|
— |
|
|
|
815 |
Brine Water |
|
|
597 |
|
|
— |
|
|
739 |
|
|
— |
|
|
|
1,336 |
Other |
|
|
— |
|
|
— |
|
|
2,073 |
|
|
— |
|
|
|
2,073 |
Total Revenue |
|
$ |
56,442 |
|
$ |
41,052 |
|
$ |
7,000 |
|
$ |
(95 |
) |
|
$ |
104,399 |
|
|
|
|
|
|
|
|
|
|
|
Three Months
EndedMarch 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 |
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended March 31, 2022 |
|
Potash |
|
Trio® |
|
Oilfield Solutions |
|
Other |
|
Consolidated |
Sales |
|
$ |
56,442 |
|
$ |
41,052 |
|
$ |
7,000 |
|
$ |
(95 |
) |
|
$ |
104,399 |
Less: Freight costs |
|
|
4,023 |
|
|
6,309 |
|
|
— |
|
|
(95 |
) |
|
|
10,237 |
Warehousing and handling
costs |
|
|
1,324 |
|
|
1,152 |
|
|
— |
|
|
— |
|
|
|
2,476 |
Cost of goods sold |
|
|
22,031 |
|
|
17,451 |
|
|
5,028 |
|
|
— |
|
|
|
44,510 |
Gross Margin |
|
$ |
29,064 |
|
$ |
16,140 |
|
$ |
1,972 |
|
$ |
— |
|
|
$ |
47,176 |
Depreciation, depletion, and
amortization incurred1 |
|
$ |
6,947 |
|
$ |
1,008 |
|
$ |
787 |
|
$ |
236 |
|
|
$ |
8,978 |
|
|
|
|
|
|
|
|
|
|
|
(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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