DENVER, August 2, 2018 -
Intrepid Potash, Inc. (Intrepid) (NYSE:IPI) today reported its
results for the second quarter of 2018.
Key Q2 Takeaways
· Cash
flow from operations of $24.3 million, a $14.6 million increase
compared to the prior year.
· Higher potash price drove
potash segment gross margin of $6.3 million, a $2.3 million
increase compared to Q2 2017.
· Strong domestic
Trio® volumes,
offset by a challenging international environment and reduced
production schedule, resulted in segment gross deficit of $2.2
million, compared to the gross deficit of $0.3 million in the prior
year.
· Net loss of $1.0 million, or
$0.01 per share, compares favorably to Q2 2017 net loss of $5.9
million, or $0.05 per share.
· Water demand remained solid
as drilling activity increases in the northern Delaware Basin
around our mines.
"Our second quarter results reflect a strong
finish to the spring season as we benefited from higher potash
pricing and increased demand for Trio®," said Bob
Jornayvaz, Intrepid's Executive Chairman, President and CEO. "This,
in turn, drove improved cash flow from operations, which more than
doubled year over year. Looking to the second half of the year, we
expect continued solid cash flow from operations. In the first half
of 2018, we received $13.4 million of cash for water and as of
June 30th we had $5.4 million in accounts receivable related to
water on our balance sheet. Moving forward, we are modifying our
water guidance calculation and language to focus on cash and
expect to receive $25 million to $35 million in cash relating to
water in 2018. This amount includes $15 million in cash that
we expect to receive under a long-term water commitment, but that
is accounted for as deferred revenue until the underlying water is
delivered. For our core nutrient business, we see positive pricing
momentum in the domestic agricultural markets and we expect this to
improve our bottom line in future periods."
Consolidated Results
Intrepid generated a second quarter net loss of
$1.0 million, or $0.01 per share, and first half 2018 net income of
$0.8 million, or $0.01 per share. Consolidated gross margin
increased to $7.3 million and $14.5 million in the second quarter
and first half of 2018, respectively, compared to the prior year.
Increased gross margin was the result of increased water sales,
improvement in the average net realized sales price of potash, and
reduced lower-of-cost-or-market adjustments in the Trio®
segment.
Cash provided by operating activities increased
year over year to $24.3 million and $38.2 million for the second
quarter and first half of 2018, respectively. Increases were driven
by increased water sales, reduced interest expense, and payments
received under a prearranged water commitment.
Segment Highlights
Potash
|
|
Three Months
Ended June 30, |
|
Six Months
Ended June 30, |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
|
(in thousands, except per ton
data) |
Potash
sales |
|
$ |
28,188 |
|
|
$ |
27,814 |
|
|
$ |
55,246 |
|
|
$ |
55,034 |
|
Potash
gross margin |
|
$ |
6,279 |
|
|
$ |
4,015 |
|
|
$ |
11,248 |
|
|
$ |
6,344 |
|
|
|
|
|
|
|
|
|
|
Potash
production volume (in tons) |
|
45 |
|
|
63 |
|
|
170 |
|
|
181 |
|
Potash
sales volume (in tons) |
|
98 |
|
|
103 |
|
|
195 |
|
|
204 |
|
|
|
|
|
|
|
|
|
|
Average potash net realized sales price per ton(1) |
|
$ |
254 |
|
|
$ |
235 |
|
|
$ |
249 |
|
|
$ |
238 |
|
Potash sales volume was relatively flat compared
to the prior year periods with robust demand in agricultural
markets offset by a decrease in industrial volume. The potash
facilities entered the summer evaporation season earlier than the
previous year, reducing second quarter production compared to the
prior year. The earlier summer shutdown was the result of
improvements in potash processing, which allowed the solar
facilities to operate at higher rates throughout the production
season. A longer summer shutdown increases the overall evaporation
capacity of the pond system and is expected to benefit production
volumes for the next harvest year assuming similar evaporation
rates.
Increases in gross margin when compared to
year-ago periods were driven primarily by higher average net
realized sales price, and increased by-product production and
sales.
Trio®
|
|
Three Months
Ended June 30, |
|
Six Months
Ended June 30, |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
|
(in thousands, except per ton
data) |
Trio® sales |
|
$ |
18,839 |
|
|
$ |
16,096 |
|
|
$ |
40,082 |
|
|
$ |
37,208 |
|
Trio® gross
deficit |
|
$ |
(2,237 |
) |
|
$ |
(318 |
) |
|
$ |
(4,307 |
) |
|
$ |
(5,503 |
) |
|
|
|
|
|
|
|
|
|
Trio® production
volume (in tons) |
|
55 |
|
|
70 |
|
|
102 |
|
|
141 |
|
Trio® sales volume
(in tons) |
|
69 |
|
|
59 |
|
|
146 |
|
|
135 |
|
|
|
|
|
|
|
|
|
|
Average Trio® net realized
sales price per ton(1) |
|
$ |
191 |
|
|
$ |
198 |
|
|
$ |
193 |
|
|
$ |
200 |
|
Sales volume increased 17% and 8%, respectively,
compared to the second quarter and first half of 2017, driven by a
strong domestic market, which offset lower sales into the
international market. Production decreased compared to the prior
year periods, as Intrepid began operating at a reduced rate in June
2017 to manage inventory levels and match production to expected
demand.
Gross deficit increased in the second quarter of
2018 compared to same period in the prior year due to lower pricing
on international shipments, increased freight rates and the reduced
production schedule, which, all together, offset higher domestic
prices. First half gross deficit decreased $1.2 million compared to
the prior year due to a decrease in lower-of-cost-or-market
adjustments related to international shipments.
Liquidity
Cash provided by operations was $24.3 million
during the second quarter and cash spent on capital investments was
$2.4 million. As of June 30, 2018, Intrepid had $26.2 million in
cash and cash equivalents and $25.7 million available to borrow
under its credit facility.
Notes
1 Average net
realized sales price per ton is a non-GAAP financial measure. 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
A teleconference to discuss the quarter is
scheduled for August 2, 2018, at 10:00 a.m. ET. The dial-in number
is 1-800-319-4610 for U.S. and Canada, and is +1-631-891-4304 for
other countries. The call will also be streamed on the Intrepid
website, intrepidpotash.com.
An audio recording of the conference call will be
available through September 2, 2018, at intrepidpotash.com and by
dialing 1-800-319-6413 for U.S. and Canada, or +1-631-883-6842 for
other countries. The replay will require the input of the
conference identification number 2500.
About Intrepid
Intrepid is the only U.S. producer of muriate of
potash. Potash is applied as an essential nutrient for healthy crop
development, utilized in several industrial applications and used
as an ingredient in animal feed. Intrepid also produces a specialty
fertilizer, Trio®, which
delivers three key nutrients, potassium, magnesium, and sulfate, in
a single particle. Intrepid also sells water and by-products such
as salt, magnesium chloride, and brine.
Intrepid serves diverse customers in markets where
a logistical advantage exists; and is a leader in the utilization
of solar evaporation production, one of the lowest cost,
environmentally friendly production methods for potash. Intrepid's
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 on
the Intrepid website, intrepidpotash.com to receive automatic email
alerts or Really Simple Syndication (RSS) feeds regarding 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,
water sales, production costs, 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
Intrepid's products;
-
Intrepid's ability to successfully identify and
implement any opportunities to expand sales of water, by-products,
and other non-potassium related products or other revenue
diversification activities;
-
challenges to Intrepid's water rights;
-
Intrepid's ability to comply with the terms of
its senior notes and its revolving credit facility, including the
underlying covenants, to avoid a default under those
agreements;
-
Intrepid's ability to expand Trio®
sales internationally and manage risks associated with
international sales, including pricing pressure and freight
costs;
-
Intrepid's ability to successfully identify and
consummate profitable growth opportunities;
-
the costs of, and Intrepid's 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;
-
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 Intrepid's 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;
-
Intrepid's 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;
-
Intrepid's inability to fund necessary capital
investments; and
-
the other risks, uncertainties, and assumptions
described in Intrepid's periodic filings with the Securities and
Exchange Commission, including in "Risk Factors" in Intrepid's
Annual Report on Form 10-K for the year ended December 31,
2017.
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 duty 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:
Matt Preston, Investor
Relations
Phone: 303-996-3048
Email: matt.preston@intrepidpotash.com
INTREPID POTASH,
INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2018
AND 2017
(In thousands, except share and per share
amounts)
|
|
Three Months
Ended June 30, |
|
Six Months
Ended June 30, |
|
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
Sales |
|
$ |
51,014 |
|
|
$ |
45,007 |
|
|
$ |
104,208 |
|
|
$ |
93,663 |
|
|
Less: |
|
|
|
|
|
|
|
|
|
Freight costs |
|
8,931 |
|
|
7,985 |
|
|
18,665 |
|
|
16,706 |
|
|
Warehousing and handling costs |
|
2,600 |
|
|
2,197 |
|
|
4,877 |
|
|
4,968 |
|
|
Cost
of goods sold |
|
32,121 |
|
|
29,821 |
|
|
65,399 |
|
|
65,694 |
|
|
Lower-of-cost-or-market inventory adjustments |
|
76 |
|
|
317 |
|
|
781 |
|
|
4,141 |
|
|
Gross Margin |
|
7,286 |
|
|
4,687 |
|
|
14,486 |
|
|
2,154 |
|
|
|
|
|
|
|
|
|
|
|
|
Selling and administrative |
|
6,190 |
|
|
4,656 |
|
|
10,160 |
|
|
9,060 |
|
|
Accretion of asset retirement obligation |
|
417 |
|
|
389 |
|
|
834 |
|
|
778 |
|
|
Restructuring expense |
|
- |
|
|
266 |
|
|
- |
|
|
266 |
|
|
Care
and maintenance expense |
|
118 |
|
|
419 |
|
|
247 |
|
|
1,111 |
|
|
Other
operating expense |
|
703 |
|
|
641 |
|
|
869 |
|
|
2,291 |
|
|
Operating (Loss) Income |
|
(142 |
) |
|
(1,684 |
) |
|
2,376 |
|
|
(11,352 |
) |
|
|
|
|
|
|
|
|
|
|
|
Other Income (Expense) |
|
|
|
|
|
|
|
|
|
Interest expense, net |
|
(878 |
) |
|
(4,217 |
) |
|
(1,756 |
) |
|
(8,637 |
) |
|
Interest income |
|
- |
|
|
- |
|
|
99 |
|
|
4 |
|
|
Other
income (expense) |
|
62 |
|
|
(27 |
) |
|
80 |
|
|
384 |
|
|
(Loss) Income Before Income Taxes |
|
(958 |
) |
|
(5,928 |
) |
|
799 |
|
|
(19,601 |
) |
|
|
|
|
|
|
|
|
|
|
|
Income Tax Expense |
|
- |
|
|
(7 |
) |
|
- |
|
|
(12 |
) |
|
Net (Loss) Income |
|
$ |
(958 |
) |
|
$ |
(5,935 |
) |
|
$ |
799 |
|
|
$ |
(19,613 |
) |
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Shares Outstanding: |
|
|
|
|
|
|
|
|
|
Basic |
|
127,861,112 |
|
|
126,221,142 |
|
|
127,761,837 |
|
|
104,228,787 |
|
|
Diluted |
|
127,861,112 |
|
|
126,221,142 |
|
|
130,966,054 |
|
|
104,228,787 |
|
|
(Loss)
Earnings Per Share: |
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
(0.01 |
) |
|
$ |
(0.05 |
) |
|
$ |
0.01 |
|
|
$ |
(0.19 |
) |
|
Diluted |
|
$ |
(0.01 |
) |
|
$ |
(0.05 |
) |
|
$ |
0.01 |
|
|
$ |
(0.19 |
) |
|
INTREPID POTASH,
INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
AS OF JUNE 30, 2018 AND DECEMBER 31,
2017
(In thousands, except share and per share
amounts)
|
|
June
30, |
|
December
31, |
|
|
2018 |
|
2017 |
ASSETS |
|
|
|
|
Cash
and cash equivalents |
|
$ |
26,234 |
|
|
$ |
1,068 |
|
Accounts receivable: |
|
|
|
|
Trade,
net |
|
21,208 |
|
|
17,777 |
|
Other
receivables, net |
|
2,095 |
|
|
762 |
|
Refundable income taxes |
|
- |
|
|
2,663 |
|
Inventory, net |
|
68,354 |
|
|
83,126 |
|
Prepaid expenses and other current assets |
|
4,662 |
|
|
6,088 |
|
Total
current assets |
|
122,553 |
|
|
111,484 |
|
|
|
|
|
|
Property, plant, equipment, and mineral properties, net |
|
353,920 |
|
|
364,542 |
|
Long-term parts inventory, net |
|
31,858 |
|
|
30,611 |
|
Other
assets, net |
|
3,653 |
|
|
3,955 |
|
Total Assets |
|
$ |
511,984 |
|
|
$ |
510,592 |
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS'
EQUITY |
|
|
|
|
Accounts payable: |
|
|
|
|
Trade |
|
$ |
5,068 |
|
|
$ |
11,103 |
|
Related parties |
|
28 |
|
|
28 |
|
Income
taxes payable |
|
172 |
|
|
- |
|
Accrued liabilities |
|
6,686 |
|
|
8,074 |
|
Accrued employee compensation and benefits |
|
5,227 |
|
|
4,317 |
|
Advances on credit facility |
|
- |
|
|
3,900 |
|
Current portion of long-term debt |
|
10,000 |
|
|
10,000 |
|
Other
current liabilities |
|
8,130 |
|
|
65 |
|
Total
current liabilities |
|
35,311 |
|
|
37,487 |
|
|
|
|
|
|
Long-term debt, net |
|
49,504 |
|
|
49,437 |
|
Asset
retirement obligation |
|
22,310 |
|
|
21,476 |
|
Other
non-current liabilities |
|
- |
|
|
102 |
|
Total Liabilities |
|
107,125 |
|
|
108,502 |
|
|
|
|
|
|
Commitments and Contingencies |
|
|
|
|
Common
stock, $0.001 par value; 400,000,000 shares authorized; |
|
|
|
|
128,232,942 and 127,646,530 shares outstanding |
|
|
|
|
at
June 30, 2018, and December 31, 2017, respectively |
|
128 |
|
|
128 |
|
Additional paid-in capital |
|
647,783 |
|
|
645,813 |
|
Retained deficit |
|
(243,052 |
) |
|
(243,851 |
) |
Total Stockholders' Equity |
|
404,859 |
|
|
402,090 |
|
Total Liabilities and Stockholders'
Equity |
|
$ |
511,984 |
|
|
$ |
510,592 |
|
INTREPID POTASH,
INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2018
AND 2017
(In thousands)
|
|
Three Months
Ended June 30, |
|
Six Months
Ended June 30, |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Cash Flows from Operating Activities: |
|
|
|
|
|
|
|
|
Net
(loss) income |
|
$ |
(958 |
) |
|
$ |
(5,935 |
) |
|
$ |
799 |
|
|
$ |
(19,613 |
) |
Adjustments to reconcile net (loss) income to net cash provided by
operating activities: |
|
|
|
|
|
|
|
|
Allowance for doubtful accounts |
|
379 |
|
|
- |
|
|
379 |
|
|
- |
|
Depreciation, depletion, and accretion |
|
7,977 |
|
|
8,297 |
|
|
16,909 |
|
|
17,620 |
|
Amortization of deferred financing costs |
|
184 |
|
|
529 |
|
|
367 |
|
|
1,350 |
|
Stock-based compensation |
|
1,347 |
|
|
696 |
|
|
2,294 |
|
|
1,685 |
|
Lower-of-cost-or-market inventory adjustments |
|
76 |
|
|
317 |
|
|
781 |
|
|
4,141 |
|
(Gain)
loss on disposal of assets |
|
(50 |
) |
|
5 |
|
|
(84 |
) |
|
1,564 |
|
Allowance for parts inventory obsolescence |
|
15 |
|
|
- |
|
|
15 |
|
|
- |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
Trade
accounts receivable, net |
|
8,018 |
|
|
7,642 |
|
|
(3,810 |
) |
|
(1,134 |
) |
Other
receivables, net |
|
(1,126 |
) |
|
(491 |
) |
|
(1,333 |
) |
|
(890 |
) |
Refundable income taxes |
|
(181 |
) |
|
7 |
|
|
2,663 |
|
|
3 |
|
Inventory, net |
|
6,718 |
|
|
3,341 |
|
|
12,727 |
|
|
4,984 |
|
Prepaid expenses and other current assets |
|
514 |
|
|
720 |
|
|
1,428 |
|
|
4,591 |
|
Accounts payable, accrued liabilities, and accrued
employee
compensation and benefits |
|
(3,198 |
) |
|
(5,496 |
) |
|
(3,197 |
) |
|
(5,560 |
) |
Income
tax payable |
|
172 |
|
|
- |
|
|
172 |
|
|
- |
|
Other
liabilities |
|
4,385 |
|
|
62 |
|
|
8,066 |
|
|
(757 |
) |
Net
cash provided by operating activities |
|
24,272 |
|
|
9,694 |
|
|
38,176 |
|
|
7,984 |
|
|
|
|
|
|
|
|
|
|
Cash Flows from Investing Activities: |
|
|
|
|
|
|
|
|
Additions to property, plant, equipment, and mineral
properties |
|
(2,408 |
) |
|
(1,136 |
) |
|
(8,878 |
) |
|
(3,559 |
) |
Proceeds from sale of property, plant, equipment, and mineral
properties |
|
58 |
|
|
- |
|
|
92 |
|
|
5,554 |
|
Net
cash (used in) provided by investing activities |
|
(2,350 |
) |
|
(1,136 |
) |
|
(8,786 |
) |
|
1,995 |
|
|
|
|
|
|
|
|
|
|
Cash Flows from Financing Activities: |
|
|
|
|
|
|
|
|
Issuance of common stock, net of transaction costs |
|
- |
|
|
11 |
|
|
- |
|
|
57,479 |
|
Repayments of long-term debt |
|
- |
|
|
(23,000 |
) |
|
- |
|
|
(69,000 |
) |
Proceeds from short-term borrowings on credit facility |
|
- |
|
|
- |
|
|
13,500 |
|
|
- |
|
Repayments of short-term borrowings on credit facility |
|
(1,500 |
) |
|
- |
|
|
(17,400 |
) |
|
- |
|
Debt
issuance costs |
|
- |
|
|
(99 |
) |
|
- |
|
|
(99 |
) |
Employee tax withholding paid for restricted stock upon
vesting |
|
(309 |
) |
|
(49 |
) |
|
(371 |
) |
|
(158 |
) |
Proceeds from exercise of stock options |
|
36 |
|
|
- |
|
|
47 |
|
|
- |
|
Net
cash used in financing activities |
|
(1,773 |
) |
|
(23,137 |
) |
|
(4,224 |
) |
|
(11,778 |
) |
|
|
|
|
|
|
|
|
|
Net Change in Cash, Cash Equivalents and
Restricted Cash |
|
20,149 |
|
|
(14,579 |
) |
|
25,166 |
|
|
(1,799 |
) |
Cash, Cash Equivalents and Restricted Cash,
beginning of period |
|
6,566 |
|
|
21,250 |
|
|
1,549 |
|
|
8,470 |
|
Cash, Cash Equivalents and Restricted Cash, end of
period |
|
$ |
26,715 |
|
|
$ |
6,671 |
|
|
$ |
26,715 |
|
|
$ |
6,671 |
|
|
|
|
|
|
|
|
|
|
Supplemental disclosure of cash flow
information |
|
|
|
|
|
|
|
|
Net
cash paid (refunded) during the period for: |
|
|
|
|
|
|
|
|
Interest |
|
$ |
1,481 |
|
|
$ |
5,910 |
|
|
$ |
1,576 |
|
|
$ |
8,377 |
|
Income taxes |
|
$ |
8 |
|
|
$ |
- |
|
|
$ |
(2,835 |
) |
|
$ |
10 |
|
Accrued purchases for property, plant, equipment, and mineral
properties |
|
$ |
651 |
|
|
$ |
242 |
|
|
$ |
651 |
|
|
$ |
242 |
|
INTREPID POTASH,
INC.
SELECTED OPERATING AND SEGMENT DATA
(UNAUDITED)
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2018
AND 2017
|
|
Three Months
Ended June 30, |
|
Six Months
Ended June 30, |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Production volume (in thousands of tons): |
|
|
|
|
|
|
|
|
Potash |
|
45 |
|
|
63 |
|
|
170 |
|
|
181 |
|
Langbeinite |
|
55 |
|
|
70 |
|
|
102 |
|
|
141 |
|
Sales
volume (in thousands of tons): |
|
|
|
|
|
|
|
|
Potash |
|
98 |
|
|
103 |
|
|
195 |
|
|
204 |
|
Trio® |
|
69 |
|
|
59 |
|
|
146 |
|
|
135 |
|
|
|
|
|
|
|
|
|
|
Average net realized sales price per ton (1) |
|
|
|
|
|
|
|
|
Potash |
|
$ |
254 |
|
|
$ |
235 |
|
|
$ |
249 |
|
|
$ |
238 |
|
Trio® |
|
$ |
191 |
|
|
$ |
198 |
|
|
$ |
193 |
|
|
$ |
200 |
|
Three Months Ended June 30, 2018 (in
thousands): |
|
Potash |
|
Trio® |
|
Other |
|
Consolidated |
Sales |
|
$ |
28,188 |
|
|
$ |
18,839 |
|
|
$ |
3,987 |
|
|
$ |
51,014 |
|
Less:
Freight costs |
|
3,276 |
|
|
5,655 |
|
|
- |
|
|
8,931 |
|
Warehousing and handling costs |
|
1,412 |
|
|
1,183 |
|
|
5 |
|
|
2,600 |
|
Cost of goods sold |
|
17,221 |
|
|
14,162 |
|
|
738 |
|
|
32,121 |
|
Lower-of-cost-or-market inventory adjustments |
|
- |
|
|
76 |
|
|
- |
|
|
76 |
|
Gross
Margin (Deficit) |
|
$ |
6,279 |
|
|
$ |
(2,237 |
) |
|
$ |
3,244 |
|
|
$ |
7,286 |
|
Depreciation, depletion and accretion incurred(2) |
|
$ |
6,129 |
|
|
$ |
1,680 |
|
|
$ |
168 |
|
|
$ |
7,977 |
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, 2018 (in
thousands): |
|
Potash |
|
Trio® |
|
Other |
|
Consolidated |
Sales |
|
$ |
55,246 |
|
|
$ |
40,082 |
|
|
$ |
8,880 |
|
|
$ |
104,208 |
|
Less:
Freight costs |
|
6,735 |
|
|
11,930 |
|
|
- |
|
|
18,665 |
|
Warehousing and handling costs |
|
2,566 |
|
|
2,302 |
|
|
9 |
|
|
4,877 |
|
Cost of goods sold |
|
34,697 |
|
|
29,376 |
|
|
1,326 |
|
|
65,399 |
|
Lower-of-cost-or-market inventory adjustments |
|
- |
|
|
781 |
|
|
- |
|
|
781 |
|
Gross
Margin (Deficit) |
|
$ |
11,248 |
|
|
$ |
(4,307 |
) |
|
$ |
7,545 |
|
|
$ |
14,486 |
|
Depreciation, depletion and accretion incurred(2) |
|
$ |
13,268 |
|
|
$ |
3,370 |
|
|
$ |
271 |
|
|
$ |
16,909 |
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, 2017 (in
thousands): |
|
Potash |
|
Trio® |
|
Other |
|
Consolidated |
Sales |
|
$ |
27,814 |
|
|
$ |
16,096 |
|
|
$ |
1,097 |
|
|
$ |
45,007 |
|
Less:
Freight costs |
|
3,578 |
|
|
4,407 |
|
|
- |
|
|
7,985 |
|
Warehousing and handling costs |
|
1,366 |
|
|
831 |
|
|
- |
|
|
2,197 |
|
Cost of goods sold |
|
18,822 |
|
|
10,892 |
|
|
107 |
|
|
29,821 |
|
Lower-of-cost-or-market inventory adjustments |
|
33 |
|
|
284 |
|
|
- |
|
|
317 |
|
Gross
Margin (Deficit) |
|
$ |
4,015 |
|
|
$ |
(318 |
) |
|
$ |
990 |
|
|
$ |
4,687 |
|
Depreciation, depletion and accretion incurred(2) |
|
$ |
6,555 |
|
|
$ |
1,705 |
|
|
$ |
37 |
|
|
$ |
8,297 |
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, 2017 (in
thousands): |
|
Potash |
|
Trio® |
|
Other |
|
Consolidated |
Sales |
|
$ |
55,034 |
|
|
$ |
37,208 |
|
|
$ |
1,421 |
|
|
$ |
93,663 |
|
Less:
Freight costs |
|
6,537 |
|
|
10,169 |
|
|
- |
|
|
16,706 |
|
Warehousing and handling costs |
|
2,878 |
|
|
2,090 |
|
|
- |
|
|
4,968 |
|
Cost of goods sold |
|
39,242 |
|
|
26,344 |
|
|
108 |
|
|
65,694 |
|
Lower-of-cost-or-market inventory adjustments |
|
33 |
|
|
4,108 |
|
|
- |
|
|
4,141 |
|
Gross
Margin (Deficit) |
|
$ |
6,344 |
|
|
$ |
(5,503 |
) |
|
$ |
1,313 |
|
|
$ |
2,154 |
|
Depreciation, depletion and accretion incurred(2) |
|
$ |
14,118 |
|
|
$ |
3,404 |
|
|
$ |
98 |
|
|
$ |
17,620 |
|
(1)
Average net realized sales price is a non-GAAP financial
measure. See the non-GAAP reconciliations set forth later in
this press release for additional information.
(2)
Depreciation, depletion and accretion incurred for potash and
Trio® excludes
depreciation, depletion and accretion amounts absorbed in or
(relieved from) inventory.
INTREPID POTASH,
INC.
UNAUDITED NON-GAAP RECONCILIATIONS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2018
AND 2017
(In thousands, except per share amounts)
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 (loss), adjusted net income (loss) 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 (Loss) and
Adjusted Net Income (Loss) Per Diluted Share
Adjusted net income (loss) and adjusted net income
(loss) per diluted share are calculated as net income (loss) or
income (loss) 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
(Loss) to Adjusted Net Income (Loss):
|
Three Months
Ended June 30, |
|
Six Months
Ended June 30, |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
(in thousands) |
Net
Income (Loss) |
$ |
(958 |
) |
|
$ |
(5,935 |
) |
|
$ |
799 |
|
|
$ |
(19,613 |
) |
Adjustments |
|
|
|
|
|
|
|
Restructuring expense(1) |
- |
|
|
266 |
|
|
- |
|
|
266 |
|
Write-off of deferred financing fees(2) |
- |
|
|
241 |
|
|
- |
|
|
759 |
|
Make-whole payment(3) |
- |
|
|
1,760 |
|
|
- |
|
|
2,554 |
|
Total adjustments |
- |
|
|
2,267 |
|
|
- |
|
|
3,579 |
|
Adjusted Net Income (Loss) |
$ |
(958 |
) |
|
$ |
(3,668 |
) |
|
$ |
799 |
|
|
$ |
(16,034 |
) |
Reconciliation of Net Income
(Loss) per Share to Adjusted Net Income (Loss) per Share:
|
Three Months
Ended June 30, |
|
Six Months
Ended June 30, |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Net
Income (Loss) Per Diluted Share |
$ |
(0.01 |
) |
|
$ |
(0.05 |
) |
|
$ |
0.01 |
|
|
$ |
(0.19 |
) |
Adjustments |
|
|
|
|
|
|
|
Restructuring expense(1) |
- |
|
|
- |
|
|
- |
|
|
- |
|
Write-off of deferred financing fees(2) |
- |
|
|
- |
|
|
- |
|
|
0.01 |
|
Make-whole payment(3) |
- |
|
|
0.02 |
|
|
- |
|
|
0.02 |
|
Calculated income tax effect(4) |
- |
|
|
- |
|
|
- |
|
|
- |
|
Total adjustments |
- |
|
|
0.02 |
|
|
- |
|
|
0.03 |
|
Adjusted Net Income (Loss) Per Diluted Share |
$ |
(0.01 |
) |
|
$ |
(0.03 |
) |
|
$ |
0.01 |
|
|
$ |
(0.16 |
) |
(1) Intrepid recorded restructuring expense of
$0.3 million in the second quarter of 2017, related to a scheduling
change at its East facility.
(2) During the second quarter of 2017, Intrepid
made an early repayment of $23.0 million of principal on its senior
notes. As a result, Intrepid wrote off a portion of the financing
fees that had previously been capitalized related to the senior
notes. The write-off of deferred financing fees is reflected in
Intrepid's financial statements as interest expense.
(3) During the second quarter of 2017, Intrepid
made an early repayment of principal on its senior notes. The
payment totaled $24.8 million, of which $1.8 million related to an
additional make-whole payment.
(4) Due to Intrepid's valuation allowance against
its deferred tax asset, this calculation assumes a 0% effective tax
rate.
Adjusted EBITDA
Adjusted earnings before interest, taxes,
depreciation, and amortization (or adjusted EBITDA) is calculated
as net income (loss) 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 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 (Loss) to Adjusted
EBITDA:
|
|
Three Months
Ended June 30, |
|
Six Months
Ended June 30, |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
|
(in thousands) |
Net
Income (Loss) |
|
$ |
(958 |
) |
|
$ |
(5,935 |
) |
|
$ |
799 |
|
|
$ |
(19,613 |
) |
Restructuring expense(1) |
|
- |
|
|
266 |
|
|
- |
|
|
266 |
|
Interest expense |
|
878 |
|
|
4,217 |
|
|
1,756 |
|
|
8,637 |
|
Income tax expense |
|
- |
|
|
7 |
|
|
- |
|
|
12 |
|
Depreciation, depletion, and accretion |
|
7,977 |
|
|
8,297 |
|
|
16,909 |
|
|
17,620 |
|
Total adjustments |
|
8,855 |
|
|
12,787 |
|
|
18,665 |
|
|
26,535 |
|
Adjusted EBITDA |
|
$ |
7,897 |
|
|
$ |
6,852 |
|
|
$ |
19,464 |
|
|
$ |
6,922 |
|
(1) Intrepid recorded restructuring expense of
$0.3 million in the second quarter of 2017, related to a scheduling
change at its East facility.
Average Net Realized Sales Price
per Ton
Average net realized sales price per ton is
calculated as sales, less freight costs, divided by the number of
tons sold in the period. Intrepid considers average net realized
sales price per ton to be useful because it shows 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, many of the
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 sales and pricing trends.
Reconciliation of Sales to
Average Net Realized Sales Price per Ton:
|
|
Three Months
Ended June 30, |
|
|
2018 |
|
2017 |
|
|
(in thousands, except per ton
data)
|
|
|
Potash |
|
Trio® |
|
Total |
|
Potash |
|
Trio® |
|
Total |
Sales |
|
$ |
28,188 |
|
|
$ |
18,839 |
|
|
$ |
47,027 |
|
|
$ |
27,814 |
|
|
$ |
16,096 |
|
|
$ |
43,910 |
|
Freight costs |
|
3,276 |
|
|
5,655 |
|
|
8,931 |
|
|
3,578 |
|
|
4,407 |
|
|
7,985 |
|
Subtotal |
|
$ |
24,912 |
|
|
$ |
13,184 |
|
|
$ |
38,096 |
|
|
$ |
24,236 |
|
|
$ |
11,689 |
|
|
$ |
35,925 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Divided by: |
|
|
|
|
|
|
|
|
|
|
|
|
Tons
sold |
|
98 |
|
|
69 |
|
|
|
|
103 |
|
|
59 |
|
|
|
Average net realized sales price per ton |
|
$ |
254 |
|
|
$ |
191 |
|
|
|
|
$ |
235 |
|
|
$ |
198 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months
Ended June 30, |
|
|
2018 |
|
2017 |
|
|
(in thousands, except per ton
data) |
|
|
Potash |
|
Trio® |
|
Total |
|
Potash |
|
Trio® |
|
Total |
Sales |
|
$ |
55,246 |
|
|
$ |
40,082 |
|
|
$ |
95,328 |
|
|
$ |
55,034 |
|
|
$ |
37,208 |
|
|
$ |
92,242 |
|
Freight costs |
|
6,735 |
|
|
11,930 |
|
|
18,665 |
|
|
6,537 |
|
|
10,169 |
|
|
16,706 |
|
Subtotal |
|
$ |
48,511 |
|
|
$ |
28,152 |
|
|
$ |
76,663 |
|
|
$ |
48,497 |
|
|
$ |
27,039 |
|
|
$ |
75,536 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Divided by: |
|
|
|
|
|
|
|
|
|
|
|
|
Tons
sold |
|
195 |
|
|
146 |
|
|
|
|
204 |
|
|
135 |
|
|
|
Average net realized sales price per ton |
|
$ |
249 |
|
|
$ |
193 |
|
|
|
|
$ |
238 |
|
|
$ |
200 |
|
|
|
This
announcement is distributed by Nasdaq Corporate Solutions on behalf
of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: Intrepid Potash Inc via Globenewswire
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