DENVER, October 30, 2018 -
Intrepid Potash, Inc. (Intrepid) (NYSE:IPI) today reported its
results for the third quarter of 2018.
Key Q3 Takeaways
· Net
income of $3.4 million, or $0.03 per share, a $5.3 million increase
compared to prior year third quarter net loss of $1.9 million, or
$0.02 per share.
· Cash flow from
operations of $14.8 million, a $12.2 million increase compared to
the prior year third quarter.
· Total sales of $36.5
million, a $2.5 million increase compared to the prior year third
quarter.
· Higher average net realized
sales prices per ton(1) and
increased by-product sales drove improvements in potash and
Trio® segment gross
margins of $2.1 million and $1.0 million, respectively, compared to
the prior year third quarter.
· Water business delivers
record quarter with $9.7 million in cash received.
"Higher realized prices for both potash and
Trio®, increased
by-product sales, and another quarter of solid demand for water
added meaningfully to the bottom line in the third quarter," said
Bob Jornayvaz, Intrepid's Executive Chairman, President and CEO.
"Pricing momentum in the domestic agricultural markets continues
with increases for potash and Trio® announced in
early October. These price increases followed a summer fill that
saw good subscription and a strong evaporation season at our potash
facilities. Water sales remained steady, with total deliveries of
$4.7 million. We received a record $9.7 million in cash during the
quarter relating to water, bringing our year-to-date total to $23.1
million, which includes $9.1 million in contract liabilities,
representing cash received for future water deliveries. As a
result, we are raising the low end of our previous guidance and now
expect $28 million to $35 million in cash from water this year. Led
by the price increases in our potash and Trio®
segments, we believe Intrepid is set up well for the fourth quarter
and early 2019."
Consolidated Results
Intrepid generated third quarter net income of
$3.4 million, or $0.03 per share, resulting in year-to-date net
income of $4.1 million, or $0.03 per share. Consolidated gross
margin increased to $9.0 million and $23.4 million in the third
quarter and first nine months of 2018, respectively, compared to
the prior year. Increased net income and gross margin were the
result of increased water and by-product sales, improvement in the
average net realized sales price per ton of potash, and reduced
lower-of-cost-or-market adjustments in the Trio®
segment.
Cash provided by operating activities increased
year over year to $14.8 million and $52.9 million for the third
quarter and first nine months of 2018, respectively. Increases were
driven by increased water sales, payments received under a
prearranged water commitment, and reduced interest expense.
Segment Highlights
Potash
|
|
Three Months
Ended September 30, |
|
Nine Months
Ended September 30, |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
|
(in thousands, except per ton
data) |
Potash
sales |
|
$ |
22,170 |
|
|
$ |
20,711 |
|
|
$ |
77,416 |
|
|
$ |
75,745 |
|
Potash
gross margin |
|
$ |
7,089 |
|
|
$ |
5,027 |
|
|
$ |
18,337 |
|
|
$ |
11,371 |
|
|
|
|
|
|
|
|
|
|
Potash
production volume (in tons) |
|
60 |
|
|
56 |
|
|
230 |
|
|
237 |
|
Potash
sales volume (in tons) |
|
74 |
|
|
77 |
|
|
269 |
|
|
281 |
|
|
|
|
|
|
|
|
|
|
Average potash net realized sales price per ton(1) |
|
$ |
258 |
|
|
$ |
232 |
|
|
$ |
251 |
|
|
$ |
236 |
|
Average net realized sales price per ton increased
11% and 6% for the third quarter and first nine months of 2018,
respectively, which combined with increases in by-product sales,
drove year-over-year improvements in gross margin. Sales decreased
slightly compared to the prior year due to normal variations in the
timing of sales to agricultural customers.
Potash production volumes during the quarter were
similar to prior year with the solar facilities beginning
production midway through the third quarter of 2018.
Trio®
|
|
Three Months
Ended September 30, |
|
Nine Months
Ended September 30, |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
|
(in thousands, except per ton
data) |
Trio® sales |
|
$ |
10,320 |
|
|
$ |
11,349 |
|
|
$ |
50,402 |
|
|
$ |
48,557 |
|
Trio® gross
deficit |
|
$ |
(178 |
) |
|
$ |
(1,235 |
) |
|
$ |
(4,487 |
) |
|
$ |
(6,738 |
) |
|
|
|
|
|
|
|
|
|
Trio® production
volume (in tons) |
|
60 |
|
|
51 |
|
|
162 |
|
|
192 |
|
Trio® sales volume
(in tons) |
|
36 |
|
|
43 |
|
|
182 |
|
|
178 |
|
|
|
|
|
|
|
|
|
|
Average Trio® net realized
sales price per ton(1) |
|
$ |
200 |
|
|
$ |
187 |
|
|
$ |
194 |
|
|
$ |
197 |
|
Production volumes increased 18% compared to the
third quarter of the prior year as improvements to the langbeinite
plant increased overall recovery rates. Year to date production
volumes remained lower than the previous year due to the reduced
operating schedule.
Sales volume decreased slightly during the third
quarter of 2018 as inclement weather delayed some shipments into
the fourth quarter of 2018 and Intrepid continued its
price-over-volume strategy in the international market.
Gross deficit improved to $0.2 million in the
third quarter of 2018 as previous price increases and a focus on
more profitable markets drove an increase in average net realized
sales price per ton compared to the prior year.
Liquidity
Cash provided by operations was $14.8 million
during the third quarter of 2018 and cash spent on capital
investments was $3.8 million. As of September 30, 2018, Intrepid
had $37.2 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 October 30, 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 November 30, 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 2649.
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 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 or RSS feeds
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,
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 grow its business whether through
expanded sales of Trio®, 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 sell Trio®
internationally and manage risks associated with international
sales, including pricing pressure and freight costs;
-
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 NINE MONTHS ENDED SEPTEMBER 30,
2018 AND 2017
(In thousands, except per share
amounts)
|
|
Three Months
Ended September 30, |
|
Nine Months
Ended September 30, |
|
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
Sales |
|
$ |
36,528 |
|
|
$ |
34,029 |
|
|
$ |
140,736 |
|
|
$ |
127,691 |
|
|
Less: |
|
|
|
|
|
|
|
|
|
Freight costs |
|
6,196 |
|
|
6,160 |
|
|
24,862 |
|
|
22,867 |
|
|
Warehousing and handling costs |
|
2,192 |
|
|
2,046 |
|
|
7,067 |
|
|
7,013 |
|
|
Cost
of goods sold |
|
19,180 |
|
|
19,555 |
|
|
84,580 |
|
|
85,249 |
|
|
Lower-of-cost-or-market inventory adjustments |
|
- |
|
|
667 |
|
|
781 |
|
|
4,808 |
|
|
Gross Margin |
|
8,960 |
|
|
5,601 |
|
|
23,446 |
|
|
7,754 |
|
|
|
|
|
|
|
|
|
|
|
|
Selling and administrative |
|
5,121 |
|
|
4,623 |
|
|
15,281 |
|
|
13,683 |
|
|
Accretion of asset retirement obligation |
|
417 |
|
|
390 |
|
|
1,251 |
|
|
1,168 |
|
|
Restructuring expense |
|
- |
|
|
- |
|
|
- |
|
|
266 |
|
|
Care
and maintenance expense |
|
119 |
|
|
293 |
|
|
366 |
|
|
1,404 |
|
|
Other
operating (income) expense |
|
(934 |
) |
|
467 |
|
|
(65 |
) |
|
2,758 |
|
|
Operating Income (Loss) |
|
4,237 |
|
|
(172 |
) |
|
6,613 |
|
|
(11,525 |
) |
|
|
|
|
|
|
|
|
|
|
|
Other Income (Expense) |
|
|
|
|
|
|
|
|
|
Interest expense, net |
|
(864 |
) |
|
(1,994 |
) |
|
(2,620 |
) |
|
(10,631 |
) |
|
Interest income |
|
- |
|
|
- |
|
|
99 |
|
|
5 |
|
|
Other
income |
|
23 |
|
|
128 |
|
|
103 |
|
|
514 |
|
|
Income (Loss) Before Income Taxes |
|
3,396 |
|
|
(2,038 |
) |
|
4,195 |
|
|
(21,637 |
) |
|
|
|
|
|
|
|
|
|
|
|
Income Tax (Expense) Benefit |
|
(46 |
) |
|
130 |
|
|
(46 |
) |
|
117 |
|
|
Net Income (Loss) |
|
$ |
3,350 |
|
|
$ |
(1,908 |
) |
|
$ |
4,149 |
|
|
$ |
(21,520 |
) |
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Shares Outstanding: |
|
|
|
|
|
|
|
|
|
Basic |
|
128,233 |
|
|
126,602 |
|
|
127,921 |
|
|
111,768 |
|
|
Diluted |
|
130,894 |
|
|
126,602 |
|
|
130,983 |
|
|
111,768 |
|
|
Earnings (Loss) Per Share: |
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.03 |
|
|
$ |
(0.02 |
) |
|
$ |
0.03 |
|
|
$ |
(0.19 |
) |
|
Diluted |
|
$ |
0.03 |
|
|
$ |
(0.02 |
) |
|
$ |
0.03 |
|
|
$ |
(0.19 |
) |
|
INTREPID POTASH,
INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
AS OF SEPTEMBER 30, 2018 AND DECEMBER 31,
2017
(In thousands, except share and per share
amounts)
|
|
September
30, |
|
December
31, |
|
|
2018 |
|
2017 |
ASSETS |
|
|
|
|
Cash
and cash equivalents |
|
$ |
37,214 |
|
|
$ |
1,068 |
|
Accounts receivable: |
|
|
|
|
Trade,
net |
|
18,289 |
|
|
17,777 |
|
Other
receivables, net |
|
3,801 |
|
|
762 |
|
Refundable income taxes |
|
- |
|
|
2,663 |
|
Inventory, net |
|
77,394 |
|
|
83,126 |
|
Prepaid expenses and other current assets |
|
5,443 |
|
|
6,088 |
|
Total
current assets |
|
142,141 |
|
|
111,484 |
|
|
|
|
|
|
Property, plant, equipment, and mineral properties, net |
|
350,211 |
|
|
364,542 |
|
Long-term parts inventory, net |
|
29,915 |
|
|
30,611 |
|
Other
assets, net |
|
3,502 |
|
|
3,955 |
|
Total Assets |
|
$ |
525,769 |
|
|
$ |
510,592 |
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS'
EQUITY |
|
|
|
|
Accounts payable: |
|
|
|
|
Trade |
|
$ |
7,794 |
|
|
$ |
11,103 |
|
Related parties |
|
28 |
|
|
28 |
|
Income
taxes payable |
|
210 |
|
|
- |
|
Accrued liabilities |
|
10,183 |
|
|
8,074 |
|
Accrued employee compensation and benefits |
|
5,543 |
|
|
4,317 |
|
Advances on credit facility |
|
- |
|
|
3,900 |
|
Current portion of long-term debt |
|
10,000 |
|
|
10,000 |
|
Other
current liabilities |
|
10,239 |
|
|
65 |
|
Total
current liabilities |
|
43,997 |
|
|
37,487 |
|
|
|
|
|
|
Long-term debt, net |
|
49,537 |
|
|
49,437 |
|
Asset
retirement obligation |
|
22,727 |
|
|
21,476 |
|
Other
non-current liabilities |
|
- |
|
|
102 |
|
Total Liabilities |
|
116,261 |
|
|
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
September 30, 2018, and December 31, 2017, respectively |
|
128 |
|
|
128 |
|
Additional paid-in capital |
|
649,082 |
|
|
645,813 |
|
Retained deficit |
|
(239,702 |
) |
|
(243,851 |
) |
Total Stockholders' Equity |
|
409,508 |
|
|
402,090 |
|
Total Liabilities and Stockholders'
Equity |
|
$ |
525,769 |
|
|
$ |
510,592 |
|
INTREPID POTASH,
INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30,
2018 AND 2017
(In thousands)
|
|
Three Months
Ended September 30, |
|
Nine Months
Ended September 30, |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Cash Flows from Operating Activities: |
|
|
|
|
|
|
|
|
Net
income (loss) |
|
$ |
3,350 |
|
|
$ |
(1,908 |
) |
|
$ |
4,149 |
|
|
$ |
(21,520 |
) |
Adjustments to reconcile net income (loss) to net cash provided by
operating activities: |
|
|
|
|
|
|
|
|
Allowance for doubtful accounts |
|
(279 |
) |
|
420 |
|
|
100 |
|
|
420 |
|
Depreciation, depletion, and accretion |
|
8,180 |
|
|
8,270 |
|
|
25,089 |
|
|
25,890 |
|
Amortization of deferred financing costs |
|
183 |
|
|
246 |
|
|
550 |
|
|
1,596 |
|
Stock-based compensation |
|
1,299 |
|
|
993 |
|
|
3,593 |
|
|
2,678 |
|
Lower-of-cost-or-market inventory adjustments |
|
- |
|
|
667 |
|
|
781 |
|
|
4,808 |
|
(Gain)
loss on disposal of assets |
|
- |
|
|
185 |
|
|
(84 |
) |
|
1,749 |
|
Allowance for parts inventory obsolescence |
|
- |
|
|
(20 |
) |
|
15 |
|
|
(20 |
) |
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
Trade
accounts receivable, net |
|
3,198 |
|
|
(6,810 |
) |
|
(612 |
) |
|
(7,944 |
) |
Other
receivables, net |
|
(1,706 |
) |
|
530 |
|
|
(3,039 |
) |
|
(360 |
) |
Refundable income taxes |
|
- |
|
|
1,376 |
|
|
2,663 |
|
|
1,379 |
|
Inventory, net |
|
(7,096 |
) |
|
(7,070 |
) |
|
5,631 |
|
|
(2,086 |
) |
Prepaid expenses and other current assets |
|
(779 |
) |
|
276 |
|
|
649 |
|
|
4,867 |
|
Accounts payable, accrued liabilities, and accrued
employee
compensation and benefits |
|
6,273 |
|
|
5,417 |
|
|
3,076 |
|
|
(143 |
) |
Income
tax payable |
|
38 |
|
|
- |
|
|
210 |
|
|
- |
|
Other
liabilities |
|
2,108 |
|
|
(23 |
) |
|
10,174 |
|
|
(781 |
) |
Net
cash provided by operating activities |
|
14,769 |
|
|
2,549 |
|
|
52,945 |
|
|
10,533 |
|
|
|
|
|
|
|
|
|
|
Cash Flows from Investing Activities: |
|
|
|
|
|
|
|
|
Additions to property, plant, equipment, and mineral
properties |
|
(3,790 |
) |
|
(2,667 |
) |
|
(12,668 |
) |
|
(6,226 |
) |
Proceeds from sale of property, plant, equipment, and mineral
properties |
|
- |
|
|
- |
|
|
92 |
|
|
5,554 |
|
Net
cash used in investing activities |
|
(3,790 |
) |
|
(2,667 |
) |
|
(12,576 |
) |
|
(672 |
) |
|
|
|
|
|
|
|
|
|
Cash Flows from Financing Activities: |
|
|
|
|
|
|
|
|
Issuance of common stock, net of transaction costs |
|
- |
|
|
1,651 |
|
|
- |
|
|
59,130 |
|
Repayments of long-term debt |
|
- |
|
|
(6,000 |
) |
|
- |
|
|
(75,000 |
) |
Proceeds from short-term borrowings on credit facility |
|
- |
|
|
1,500 |
|
|
13,500 |
|
|
9,000 |
|
Repayments of short-term borrowings on credit facility |
|
- |
|
|
(1,500 |
) |
|
(17,400 |
) |
|
(9,000 |
) |
Debt
issuance costs |
|
- |
|
|
(29 |
) |
|
- |
|
|
(128 |
) |
Employee tax withholding paid for restricted stock upon
vesting |
|
- |
|
|
- |
|
|
(371 |
) |
|
(158 |
) |
Proceeds from exercise of stock options |
|
- |
|
|
- |
|
|
47 |
|
|
- |
|
Net
cash used in financing activities |
|
- |
|
|
(4,378 |
) |
|
(4,224 |
) |
|
(16,156 |
) |
|
|
|
|
|
|
|
|
|
Net Change in Cash, Cash Equivalents and
Restricted Cash |
|
10,979 |
|
|
(4,496 |
) |
|
36,145 |
|
|
(6,295 |
) |
Cash, Cash Equivalents and Restricted Cash,
beginning of period |
|
26,715 |
|
|
6,671 |
|
|
1,549 |
|
|
8,470 |
|
Cash, Cash Equivalents and Restricted Cash, end of
period |
|
$ |
37,694 |
|
|
$ |
2,175 |
|
|
$ |
37,694 |
|
|
$ |
2,175 |
|
|
|
|
|
|
|
|
|
|
Supplemental disclosure of cash flow
information |
|
|
|
|
|
|
|
|
Net
cash paid (refunded) during the period for: |
|
|
|
|
|
|
|
|
Interest |
|
$ |
53 |
|
|
$ |
711 |
|
|
$ |
1,629 |
|
|
$ |
9,088 |
|
Income taxes |
|
$ |
7 |
|
|
$ |
(1,506 |
) |
|
$ |
(2,828 |
) |
|
$ |
(1,496 |
) |
Accrued purchases for property, plant, equipment, and mineral
properties |
|
$ |
915 |
|
|
$ |
242 |
|
|
$ |
915 |
|
|
$ |
242 |
|
INTREPID POTASH,
INC.
SELECTED OPERATING AND SEGMENT DATA
(UNAUDITED)
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30,
2018 AND 2017
|
|
Three Months
Ended September 30, |
|
Nine Months
Ended September 30, |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Production volume (in thousands of tons): |
|
|
|
|
|
|
|
|
Potash |
|
60 |
|
|
56 |
|
|
230 |
|
|
237 |
|
Langbeinite |
|
60 |
|
|
51 |
|
|
162 |
|
|
192 |
|
Sales
volume (in thousands of tons): |
|
|
|
|
|
|
|
|
Potash |
|
74 |
|
|
77 |
|
|
269 |
|
|
281 |
|
Trio® |
|
36 |
|
|
43 |
|
|
182 |
|
|
178 |
|
|
|
|
|
|
|
|
|
|
Average net realized sales price per ton (1) |
|
|
|
|
|
|
|
|
Potash |
|
$ |
258 |
|
|
$ |
232 |
|
|
$ |
251 |
|
|
$ |
236 |
|
Trio® |
|
$ |
200 |
|
|
$ |
187 |
|
|
$ |
194 |
|
|
$ |
197 |
|
Three Months Ended September 30, 2018
(in thousands): |
|
Potash |
|
Trio® |
|
Other |
|
Consolidated |
Sales |
|
$ |
22,170 |
|
|
$ |
10,320 |
|
|
$ |
4,038 |
|
|
$ |
36,528 |
|
Less:
Freight costs |
|
3,060 |
|
|
3,136 |
|
|
- |
|
|
6,196 |
|
Warehousing and handling costs |
|
1,207 |
|
|
984 |
|
|
1 |
|
|
2,192 |
|
Cost of goods sold |
|
10,814 |
|
|
6,378 |
|
|
1,988 |
|
|
19,180 |
|
Lower-of-cost-or-market inventory adjustments |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
Gross
Margin (Deficit) |
|
$ |
7,089 |
|
|
$ |
(178 |
) |
|
$ |
2,049 |
|
|
$ |
8,960 |
|
Depreciation, depletion and accretion incurred(2) |
|
$ |
6,288 |
|
|
$ |
1,668 |
|
|
$ |
224 |
|
|
$ |
8,180 |
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30, 2018
(in thousands): |
|
Potash |
|
Trio® |
|
Other |
|
Consolidated |
Sales |
|
$ |
77,416 |
|
|
$ |
50,402 |
|
|
$ |
12,918 |
|
|
$ |
140,736 |
|
Less:
Freight costs |
|
9,795 |
|
|
15,067 |
|
|
- |
|
|
24,862 |
|
Warehousing and handling costs |
|
3,773 |
|
|
3,285 |
|
|
9 |
|
|
7,067 |
|
Cost of goods sold |
|
45,511 |
|
|
35,756 |
|
|
3,313 |
|
|
84,580 |
|
Lower-of-cost-or-market inventory adjustments |
|
- |
|
|
781 |
|
|
- |
|
|
781 |
|
Gross
Margin (Deficit) |
|
$ |
18,337 |
|
|
$ |
(4,487 |
) |
|
$ |
9,596 |
|
|
$ |
23,446 |
|
Depreciation, depletion and accretion incurred(2) |
|
$ |
19,556 |
|
|
$ |
5,038 |
|
|
$ |
495 |
|
|
$ |
25,089 |
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, 2017
(in thousands): |
|
Potash |
|
Trio® |
|
Other |
|
Consolidated |
Sales |
|
$ |
20,711 |
|
|
$ |
11,349 |
|
|
$ |
1,969 |
|
|
$ |
34,029 |
|
Less:
Freight costs |
|
2,864 |
|
|
3,296 |
|
|
- |
|
|
6,160 |
|
Warehousing and handling costs |
|
1,173 |
|
|
873 |
|
|
- |
|
|
2,046 |
|
Cost of goods sold |
|
11,534 |
|
|
7,861 |
|
|
160 |
|
|
19,555 |
|
Lower-of-cost-or-market inventory adjustments |
|
113 |
|
|
554 |
|
|
- |
|
|
667 |
|
Gross
Margin (Deficit) |
|
$ |
5,027 |
|
|
$ |
(1,235 |
) |
|
$ |
1,809 |
|
|
$ |
5,601 |
|
Depreciation, depletion and accretion incurred(2) |
|
$ |
6,567 |
|
|
$ |
1,687 |
|
|
$ |
16 |
|
|
$ |
8,270 |
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30, 2017
(in thousands): |
|
Potash |
|
Trio® |
|
Other |
|
Consolidated |
Sales |
|
$ |
75,745 |
|
|
$ |
48,557 |
|
|
$ |
3,389 |
|
|
$ |
127,691 |
|
Less:
Freight costs |
|
9,401 |
|
|
13,466 |
|
|
- |
|
|
22,867 |
|
Warehousing and handling costs |
|
4,051 |
|
|
2,962 |
|
|
- |
|
|
7,013 |
|
Cost of goods sold |
|
50,776 |
|
|
34,205 |
|
|
268 |
|
|
85,249 |
|
Lower-of-cost-or-market inventory adjustments |
|
146 |
|
|
4,662 |
|
|
- |
|
|
4,808 |
|
Gross
Margin (Deficit) |
|
$ |
11,371 |
|
|
$ |
(6,738 |
) |
|
$ |
3,121 |
|
|
$ |
7,754 |
|
Depreciation, depletion and accretion incurred(2) |
|
$ |
20,685 |
|
|
$ |
5,091 |
|
|
$ |
114 |
|
|
$ |
25,890 |
|
(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.
(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 NINE MONTHS ENDED SEPTEMBER 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 September 30, |
|
Nine Months
Ended September 30, |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
(in thousands) |
Net
Income (Loss) |
$ |
3,350 |
|
|
$ |
(1,908 |
) |
|
$ |
4,149 |
|
|
$ |
(21,520 |
) |
Adjustments |
|
|
|
|
|
|
|
Restructuring expense(1) |
- |
|
|
- |
|
|
- |
|
|
266 |
|
Write-off of deferred financing fees(2) |
- |
|
|
60 |
|
|
- |
|
|
819 |
|
Make-whole payment(3) |
- |
|
|
448 |
|
|
- |
|
|
3,001 |
|
Total adjustments |
- |
|
|
508 |
|
|
- |
|
|
4,086 |
|
Adjusted Net Income (Loss) |
$ |
3,350 |
|
|
$ |
(1,400 |
) |
|
$ |
4,149 |
|
|
$ |
(17,434 |
) |
Reconciliation of Net Income
(Loss) per Share to Adjusted Net Income (Loss) per Share:
|
Three Months
Ended September 30, |
|
Nine Months
Ended September 30, |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Net
Income (Loss) Per Diluted Share |
$ |
0.03 |
|
|
$ |
(0.02 |
) |
|
$ |
0.03 |
|
|
$ |
(0.19 |
) |
Adjustments |
|
|
|
|
|
|
|
Restructuring expense(1) |
- |
|
|
- |
|
|
- |
|
|
- |
|
Write-off of deferred financing fees(2) |
- |
|
|
- |
|
|
- |
|
|
0.01 |
|
Make-whole payment(3) |
- |
|
|
- |
|
|
- |
|
|
0.03 |
|
Calculated income tax effect(4) |
- |
|
|
- |
|
|
- |
|
|
- |
|
Total adjustments |
- |
|
|
- |
|
|
- |
|
|
0.04 |
|
Adjusted Net Income (Loss) Per Diluted Share |
$ |
0.03 |
|
|
$ |
(0.02 |
) |
|
$ |
0.03 |
|
|
$ |
(0.15 |
) |
(1) Intrepid recorded restructuring expense of
$0.3 million during the first nine months of 2017, related to a
scheduling change at its East facility.
(2) During the third quarter of 2017, Intrepid
made an early repayment of $6.0 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 third quarter of 2017, Intrepid
made an early repayment of principal on its senior notes. The
payment totaled $6.4 million, of which $0.4 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 September 30, |
|
Nine Months
Ended September 30, |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
|
(in thousands) |
Net
Income (Loss) |
|
$ |
3,350 |
|
|
$ |
(1,908 |
) |
|
$ |
4,149 |
|
|
$ |
(21,520 |
) |
Restructuring expense(1) |
|
- |
|
|
- |
|
|
- |
|
|
266 |
|
Interest expense |
|
864 |
|
|
1,994 |
|
|
2,620 |
|
|
10,631 |
|
Income tax expense |
|
46 |
|
|
(130 |
) |
|
46 |
|
|
(117 |
) |
Depreciation, depletion, and accretion |
|
8,180 |
|
|
8,270 |
|
|
25,089 |
|
|
25,890 |
|
Total adjustments |
|
9,090 |
|
|
10,134 |
|
|
27,755 |
|
|
36,670 |
|
Adjusted EBITDA |
|
$ |
12,440 |
|
|
$ |
8,226 |
|
|
$ |
31,904 |
|
|
$ |
15,150 |
|
(1) Intrepid recorded restructuring expense of
$0.3 million during the first nine months 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 September 30, |
|
|
2018 |
|
2017 |
|
|
(in thousands, except per ton
data) |
|
|
Potash |
|
Trio® |
|
Total |
|
Potash |
|
Trio® |
|
Total |
Sales |
|
$ |
22,170 |
|
|
$ |
10,320 |
|
|
$ |
32,490 |
|
|
$ |
20,711 |
|
|
$ |
11,349 |
|
|
$ |
32,060 |
|
Freight costs |
|
3,060 |
|
|
3,136 |
|
|
6,196 |
|
|
2,864 |
|
|
3,296 |
|
|
6,160 |
|
Subtotal |
|
$ |
19,110 |
|
|
$ |
7,184 |
|
|
$ |
26,294 |
|
|
$ |
17,847 |
|
|
$ |
8,053 |
|
|
$ |
25,900 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Divided by: |
|
|
|
|
|
|
|
|
|
|
|
|
Tons
sold |
|
74 |
|
|
36 |
|
|
|
|
77 |
|
|
43 |
|
|
|
Average net realized sales price per ton |
|
$ |
258 |
|
|
$ |
200 |
|
|
|
|
$ |
232 |
|
|
$ |
187 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months
Ended September 30, |
|
|
2018 |
|
2017 |
|
|
(in thousands, except per ton
data) |
|
|
Potash |
|
Trio® |
|
Total |
|
Potash |
|
Trio® |
|
Total |
Sales |
|
$ |
77,416 |
|
|
$ |
50,402 |
|
|
$ |
127,818 |
|
|
$ |
75,745 |
|
|
$ |
48,557 |
|
|
$ |
124,302 |
|
Freight costs |
|
9,795 |
|
|
15,067 |
|
|
24,862 |
|
|
9,401 |
|
|
13,466 |
|
|
22,867 |
|
Subtotal |
|
$ |
67,621 |
|
|
$ |
35,335 |
|
|
$ |
102,956 |
|
|
$ |
66,344 |
|
|
$ |
35,091 |
|
|
$ |
101,435 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Divided by: |
|
|
|
|
|
|
|
|
|
|
|
|
Tons
sold |
|
269 |
|
|
182 |
|
|
|
|
281 |
|
|
178 |
|
|
|
Average net realized sales price per ton |
|
$ |
251 |
|
|
$ |
194 |
|
|
|
|
$ |
236 |
|
|
$ |
197 |
|
|
|
This
announcement is distributed by West Corporation on behalf of West
Corporation 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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