DENVER, Aug 06, 2009 (BUSINESS WIRE) -- Intrepid Potash, Inc. (NYSE: IPI), today announced second quarter 2009
financial results with net income of $14.4 million. Earnings before
interest, taxes, depreciation and amortization (EBITDA) for the second
quarter of 2009 were $31.5 million. Earnings for the second quarter of
2009 were $0.19 per diluted share, net of a downward accounting
adjustment of $0.04 per diluted share associated with operating at lower
production rates.
Highlights for the Second Quarter 2009:
-
As of June 30, 2009, we had $119 million of cash, no outstanding debt,
and $125 million of availability under our revolving credit facility.
-
The average net realized sales price for potash in the second quarter
2009 was $674 per short ton ($743 per metric ton) compared to $425 per
short ton ($468 per metric ton) in the same period of 2008.
-
Adjusted net income for the second quarter of 2009 was $17.4 million
compared to adjusted pro forma net income of $31.6 million in the same
period of 2008.
-
Potash "cash operating" cost of goods sold, net of by-product credits,
in the second quarter of 2009 was $251 per short ton, which includes
an adjustment for "abnormal production" associated with our reduced
operating rates, of approximately $63 per short ton.
-
Potash sales in the second quarter were 80,000 short tons compared to
213,000 short tons in the second quarter of 2008.
-
Potash production in the quarter was 131,000 short tons compared to
210,000 short tons produced in the second quarter of 2008, as we
continued to manage supply in response to decreased customer demand.
-
Average net realized sales price for langbeinite, which we market
under the name of Intrepid TrioTM, was $338 per short ton
($373 per metric ton) in the second quarter of 2009 compared to $188
per short ton ($207 per metric ton) in the second quarter of 2008. The
net realized price for Intrepid TrioTM was $330 per short
ton in the first quarter of 2009.
-
Sales of Intrepid TrioTM were 45,000 short tons in the
second quarter of 2009 compared to 47,000 short tons in the second
quarter of 2008.
-
Langbeinite production in the second quarter decreased to 45,000 short
tons compared to 58,000 short tons produced in the second quarter of
2008.
-
Gross margins in the second quarter of 2009 for potash were $363 per
short ton or 54 percent compared to 62 percent in the three months
ended June 30, 2008. Gross margins for Intrepid TrioTM were
$138 per short ton or 41 percent compared to 43 percent in the same
period of 2008.
-
Capital investments in the second quarter of 2009 totaled $25 million
bringing the year-to- date total to $49 million.
"Potash sales volumes continue to be at reduced levels as dealers showed
greater hesitancy to refill their inventories and to take on price risk
during the second quarter," said Bob Jornayvaz, Intrepid's CEO. "We are
working with our customers to move our products forward in the supply
chain in order to be in position to provide just-in-time delivery to the
end users of our product as soon as demand returns to more normal
levels. Due to the uncertainty around the price of potash, we believe
that the tons currently being sold in the market are being applied
directly onto the ground and are not being used to restock dealer
inventory bins. Despite the challenging market, we were able to generate
positive free cash flow during the quarter and we continue to invest in
our business to increase efficiencies in order to reduce our operating
costs per ton. Our balance sheet remains strong which allows us to
continue to work with our customers in mutually beneficial ways to
ensure that product is in place when more normal demand returns."
Market Conditions
Overall, we believe that dealers and distributors of potash have reduced
their inventories in the second quarter, albeit at a slower pace than
originally expected. The recent decreases in potash prices may continue
to cause hesitation by the purchasers of our products, and the third
quarter is typically a slower time of the year for shipments into the
agricultural segment of our business. While decreases in the posted
prices of potash may spur increased demand, we expect the current market
trends will remain for the majority of the third quarter. Dealer
hesitancy to absorb price risk has the potential to keep near-term sales
levels lower. Further, we believe that the application rates for potash
fertilizers will be lower in 2009 relative to 2008, but we also do not
expect this decline to be permanent as fertilizer plays a vital role in
ensuring that world agricultural production meets the needs of a growing
population.
As the current potash market develops, we will continue to manage
production volumes and our net cash position while at the same time
making the appropriate investments in our business.
Second Quarter Results
Operating income for the second quarter of 2009 was $26.9 million
compared to pro forma operating income of $51.6 million in the second
quarter 2008. Cash flows from operating activities were $34.8 million
for the second quarter of 2009, which compares to $51.8 million for the
second quarter of 2008.
Potash
During the second quarter of 2009, Intrepid produced 131,000 short tons
of potash and sold 80,000 short tons of potash. This compares to 210,000
short tons produced and 213,000 short tons sold in the second quarter of
2008. Production declined in the second quarter of 2009 relative to the
prior year period due primarily to our decision to reduce the number of
operating shifts at our East and West Mines from four to three beginning
in the first quarter of the year. This reduction in operating shifts
continued through the second quarter of 2009.
The 80,000 short tons of potash we sold in the second quarter of 2009
was at an average freight on board ("FOB") net sales price of $674 per
short ton as compared to an average FOB net sales price of $425 per
short ton during the second quarter of 2008.
The decrease in sales this quarter, as compared to 2008, resulted from
slower sales of granular potash as growers deferred potash applications
and dealers did not refill their inventories to historical levels, but
instead worked primarily to reduce inventory levels. Additionally, the
North American drilling rig count has stabilized at less than half of
peak levels from a year ago, and as a result, our industrial sales have
remained slow in response to continued low oil and gas prices. The feed
portion of our business has seen consistent demand.
Our potash "cash operating" cost of goods sold ("COGS"), which is net of
by-product credits of $20 per ton, and which we define as total cost of
goods sold excluding depreciation, depletion and amortization and
royalties, increased to $251 per short ton in the second quarter of 2009
from $133 per short ton in the second quarter of 2008. The cost per ton
amount is higher than previous comparable quarters primarily due to
fewer tons of production as a result of our lower operating rates in the
second quarter of 2009. This per ton amount also includes the direct
costs associated with several of our facilities operating at curtailed
production rates whereby we determined that, in accordance with FAS 151,
a certain portion of our costs should be recognized as period costs
rather than absorbed into inventory. This accounting adjustment resulted
in a $5.2 million increase in our COGS in the second quarter of 2009, or
$0.04 per diluted share for the quarter, which represents approximately
$63 per short ton for potash and $4 per short ton for Intrepid TrioTM.
It is important to understand this accounting impact because as
production rates remained at low levels in the second quarter and for
the first half of 2009, the product currently being held in inventory
has a higher relative per ton cost than our average COGS for 2008. The
Company expects it could take several quarters for this relatively
higher cost inventory to work through the system assuming sales and
production levels increase to more historical norms.
Langbeinite - Intrepid TrioTM
During the second quarter, Intrepid produced 45,000 short tons of
langbeinite. Our langbeinite production was 22 percent lower than the
58,000 short tons produced during the second quarter of 2008. The
decrease in langbeinite production was largely driven by our decision to
run the East mine with three operating shifts instead of four as part of
our inventory management efforts announced in January 2009.
Intrepid sold 45,000 short tons of Intrepid TrioTM in the
second quarter of 2009 at an average FOB or net sales price of $338 per
short ton as compared to 47,000 short tons at an average FOB price of
$188 per short ton in the prior year's second quarter.
Capital Investment
During the second quarter of 2009, Intrepid invested $25.4 million
related to the 2009 capital program. The investments in the second
quarter of 2009 were used to fund projects already in progress and for
sustaining capital. Total capital investment in 2009 is expected to be
between $120 and $135 million. Intrepid is committed to moving forward
its capital program, while at the same time maintaining a prudent net
cash position in order to increase production and lower per ton
operating costs in the long-term. During the current period of decreased
production rates we are working to complete a number of our planned
capital investments. We expect our increased capital investment in the
second half of the year, combined with the continuation of lower sales
volumes, will result in a net cash outflow from the Company in the third
quarter.
The Company routinely posts information about the Company on its website
under the Investor Relations tab. The Company's website address is www.intrepidpotash.com.
Since adjusted net income and EBITDA are non-GAAP financial measures
it is necessary to reference the respective reconciliations in the
accompanying non-GAAP reconciliation tables towards the end of this
release.
Conference Call Information
The conference call to discuss second quarter 2009 results is scheduled
for August 7, 2009, at 7:30 a.m. (Mountain Time). The call participation
number is 877-419-5396. A recording of the conference call will be
available two hours after the completion of the call at 800-642-1687.
International participants can dial 706-902-2295 to take part in the
conference call and can access a replay of the call at 706-645-9291. All
of the above calls will require the input of the conference
identification number 18145424. The call will also be streamed on the
Intrepid Potash, Inc.'s website, www.intrepidpotash.com.
An audio recording of the conference call will be available at www.intrepidpotash.com
through September 7, 2009.
* * * * * * * * * * *
Certain statements in this press release, and other written or oral
statements made by or on behalf of us, are "forward-looking statements"
within the meaning of the federal securities laws. Statements regarding
future events and developments and our future performance, as well as
management's expectations, beliefs, plans, estimates or projections
relating to the future, including statements regarding guidance, are
forward-looking statements within the meaning of these laws. Although we
believe that the expectations reflected in such forward-looking
statements are based upon reasonable assumptions, there can be no
assurance that the expectations will be realized. These forward-looking
statements are subject to a number of known and unknown risks and
uncertainties, many of which are beyond our control that could cause
actual results to differ materially and adversely from such statements.
These risks and uncertainties include: changes in the price of potash or
langbeinite; operational difficulties at our facilities; changes in
demand and/or supply for potash or langbeinite; changes in our reserve
estimates; our ability to achieve the initiatives of our business
strategy, including but not limited to the development of the HB Mine as
a solution mine; changes in the prices of our raw materials, including
but not limited to the price of natural gas and power; fluctuations in
the costs of transporting our products to customers; changes in labor
costs and availability of labor with mining expertise; the impact of
federal, state or local government regulations, including but not
limited to environmental and mining regulations; competition in the
fertilizer industry; declines in U.S. or world agricultural production;
declines in oil and gas drilling; changes in economic conditions;
adverse weather events at our facilities; our ability to comply with
covenants inherent in our current and future debt obligations to avoid
defaulting under those agreements; continued disruption in credit
markets; governmental policy changes that may adversely affect our
business and the risk factors detailed in our filings with the U.S.
Securities and Exchange Commission. Please refer to those filings for
more information on these risk factors. These forward-looking statements
speak only as of the date of this press release, and we undertake no
obligation to publicly update or revise any forward-looking statement,
whether as the result of future events, new information or otherwise.
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INTREPID POTASH, INC.
SELECTED OPERATIONS DATA
(UNAUDITED)
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Intrepid Potash, Inc.
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Intrepid Mining LLC
(Predecessor)
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Three Months Ended,
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April 25, 2008
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April 1, 2008
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Combined
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Through
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Through
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June 30, 2009
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June 30, 2008
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June 30, 2008
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April 24, 2008
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Production volume (in thousands of short tons):
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Potash
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131
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210
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155
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55
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Langbeinite
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45
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58
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40
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18
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Sales volume (in thousands of short tons):
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Potash
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80
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213
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157
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56
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Intrepid TrioTM |
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45
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47
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34
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13
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Potash statistics (per short ton):
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Net sales price
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$
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674
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$
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425
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$
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447
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$
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364
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Cost of goods sold, net of by-product credits*
(exclusive of
items shown
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separately below)
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188
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133
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131
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137
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Abnormal production cost adjustment
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63
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-
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-
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-
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Depreciation, depletion and amortization
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20
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9
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8
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11
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Royalties
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22
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14
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16
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11
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Total potash cost of goods sold
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$
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293
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$
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156
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$
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155
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$
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159
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Warehousing and handling costs
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18
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7
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6
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6
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Average potash gross margin
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$
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363
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$
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262
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$
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286
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$
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199
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Intrepid TrioTM statistics (per short ton):
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Net sales price
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$
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338
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$
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188
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$
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191
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$
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181
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Cost of goods sold (exclusive of items
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shown separately below)
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150
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79
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89
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78
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Abnormal production cost adjustment
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4
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-
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-
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-
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Depreciation, depletion and amortization
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14
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10
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11
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9
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Royalties
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17
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10
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7
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9
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Total Intrepid TrioTM cost of goods sold
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$
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185
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$
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99
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$
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107
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$
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96
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Warehousing and handling costs
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15
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8
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8
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8
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Average Intrepid TrioTM gross margin
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$
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138
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$
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81
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$
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76
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$
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77
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* On a per short ton basis, by-product credits were $20, $9, and
$9 for the three month period ended June 30, 2009,
the period
from April 25, 2008, through June 30, 2008, and the period from
April 1, 2008, through April 24, 2008,
respectively.
By-product credits were $1.6 million, $1.4 million, and $0.5
million for the three month period ended
June 30, 2009, the
period from April 25, 2008, through June 30, 2008, and the period
from April 1, 2008, through
April 24, 2008, respectively.
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INTREPID POTASH, INC.
SELECTED OPERATIONS DATA
(UNAUDITED)
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Intrepid Potash, Inc.
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Intrepid Mining LLC
(Predecessor)
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Six Months Ended,
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April 25, 2008
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January 1, 2008
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Combined
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Through
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Through
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June 30, 2009
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June 30, 2008
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June 30, 2008
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April 24, 2008
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Production volume (in thousands of short tons):
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Potash
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268
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435
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155
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280
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Langbeinite
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87
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114
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40
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74
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Sales volume (in thousands of short tons):
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Potash
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179
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426
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157
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269
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Intrepid TrioTM |
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83
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141
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34
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107
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Potash statistics (per short ton):
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Net sales price
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$
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703
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$
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360
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$
|
447
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$
|
309
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Cost of goods sold, net of by-product credits*
(exclusive of
items shown
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separately below)
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215
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|
|
127
|
|
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131
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|
|
125
|
|
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Abnormal production cost adjustment
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35
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|
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-
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-
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|
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-
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Depreciation, depletion and amortization
|
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19
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8
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8
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8
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Royalties
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24
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12
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16
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10
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Total potash cost of goods sold
|
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$
|
293
|
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$
|
147
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$
|
155
|
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$
|
143
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Warehousing and handling costs
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14
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6
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6
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|
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6
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|
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Average potash gross margin
|
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$
|
396
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$
|
207
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$
|
286
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$
|
160
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Intrepid TrioTM statistics (per short ton):
|
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Net sales price
|
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$
|
335
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$
|
145
|
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$
|
191
|
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$
|
130
|
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Cost of goods sold (exclusive of items
|
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|
|
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|
|
|
|
|
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shown separately below)
|
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147
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|
|
78
|
|
|
89
|
|
|
77
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|
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Abnormal production cost adjustment
|
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|
2
|
|
|
-
|
|
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-
|
|
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-
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|
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Depreciation, depletion and amortization
|
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|
15
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|
|
10
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|
|
11
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|
|
10
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|
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Royalties
|
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|
17
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|
|
7
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|
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7
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|
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7
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Total Intrepid TrioTM cost of goods sold
|
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$
|
181
|
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$
|
95
|
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$
|
107
|
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$
|
94
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Warehousing and handling costs
|
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|
14
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7
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|
|
8
|
|
|
6
|
|
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Average Intrepid TrioTM gross margin
|
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$
|
140
|
|
$
|
43
|
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$
|
76
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$
|
30
|
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* On a per short ton basis, by-product credits were $18, $9, and
$13 for the six month period ended June 30, 2009,
the period
from April 25, 2008, through June 30, 2008, and the period from
January 1, 2008, through April 24, 2008,
respectively.
By-product credits were $3.2 million, $1.4 million, and $3.6
million for the six month period ended
June 30, 2009, the
period from April 25, 2008, through June 30, 2008, and the period
from January 1, 2008, through
April 24, 2008, respectively.
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INTREPID POTASH, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(In thousands, except share and per share amount)
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Intrepid Mining LLC
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Intrepid Potash, Inc.
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(Predecessor)
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Three Months Ended,
|
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April 25, 2008
Through
June 30, 2008
|
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April 1, 2008
Through
April 24, 2008
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Pro Forma Adjusted
|
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|
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June 30, 2009
|
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June 30, 2008
|
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Sales
|
$
|
73,392
|
|
|
$
|
105,181
|
|
|
$
|
80,162
|
|
|
$
|
25,019
|
|
|
|
|
|
|
|
|
|
|
|
Less: Freight costs
|
|
4,122
|
|
|
|
5,724
|
|
|
|
3,537
|
|
|
|
2,187
|
|
|
Warehousing and handling costs
|
|
2,098
|
|
|
|
1,675
|
|
|
|
1,240
|
|
|
|
435
|
|
|
Cost of goods sold
|
|
31,775
|
|
|
|
38,257
|
|
|
|
27,951
|
|
|
|
10,186
|
|
|
|
|
|
|
|
|
|
|
|
Gross Margin
|
|
35,397
|
|
|
|
59,525
|
|
|
|
47,434
|
|
|
|
12,211
|
|
|
|
|
|
|
|
|
|
|
|
Selling and administrative
|
|
7,763
|
|
|
|
7,438
|
|
|
|
5,313
|
|
|
|
1,492
|
|
|
Accretion of asset retirement obligation
|
|
173
|
|
|
|
157
|
|
|
|
115
|
|
|
|
42
|
|
|
Other
|
|
589
|
|
|
|
289
|
|
|
|
298
|
|
|
|
(9
|
)
|
|
Operating Income
|
|
26,872
|
|
|
|
51,641
|
|
|
|
41,708
|
|
|
|
10,686
|
|
|
|
|
|
|
|
|
|
|
|
Other Income (Expense)
|
|
|
|
|
|
|
|
|
Interest expense, including realized and
|
|
|
|
|
|
|
|
|
unrealized derivative gains and losses
|
|
251
|
|
|
|
1,201
|
|
|
|
186
|
|
|
|
629
|
|
|
Interest income
|
|
15
|
|
|
|
268
|
|
|
|
268
|
|
|
|
-
|
|
|
Insurance settlements in excess of property losses
|
|
(2
|
)
|
|
|
(32
|
)
|
|
|
(32
|
)
|
|
|
-
|
|
|
Other income (expense)
|
|
323
|
|
|
|
(52
|
)
|
|
|
(175
|
)
|
|
|
123
|
|
|
|
|
|
|
|
|
|
|
|
Income Before Income Taxes
|
|
27,459
|
|
|
|
53,026
|
|
|
|
41,955
|
|
|
|
11,438
|
|
|
|
|
|
|
|
|
|
|
|
Income Tax Expense
|
|
(13,023
|
)
|
|
|
(20,580
|
)
|
|
|
(16,191
|
)
|
|
|
-
|
|
|
Net Income
|
$
|
14,436
|
|
|
$
|
32,446
|
|
|
$
|
25,764
|
|
|
$
|
11,438
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Shares Outstanding:
|
|
|
|
|
|
|
|
|
Basic
|
|
75,017,097
|
|
|
|
74,843,124
|
|
|
|
74,843,124
|
|
|
|
|
Diluted
|
|
75,030,347
|
|
|
|
74,989,524
|
|
|
|
74,977,793
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings Per Share:
|
|
|
|
|
|
|
|
|
Basic
|
$
|
0.19
|
|
|
$
|
0.43
|
|
|
$
|
0.34
|
|
|
|
|
Diluted
|
$
|
0.19
|
|
|
$
|
0.43
|
|
|
$
|
0.34
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INTREPID POTASH, INC.
CONSOLIDATED STATEMENTS OF
OPERATIONS (UNAUDITED)
(In thousands, except share and per
share amount)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intrepid Potash, Inc.
|
|
Intrepid Mining LLC
(Predecessor)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended,
|
|
April 25, 2008
|
|
January 1, 2008
|
|
|
|
|
|
Pro Forma Adjusted
|
|
Through
|
|
Through
|
|
|
|
June 30, 2009
|
|
June 30, 2008
|
|
June 30, 2008
|
|
April 24, 2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
|
$
|
162,293
|
|
|
$
|
189,582
|
|
|
$
|
80,162
|
|
|
$
|
109,420
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: Freight costs
|
|
|
8,829
|
|
|
|
15,896
|
|
|
|
3,537
|
|
|
|
12,359
|
|
|
Warehousing and handling costs
|
|
|
3,627
|
|
|
|
3,475
|
|
|
|
1,240
|
|
|
|
2,235
|
|
|
Cost of goods sold
|
|
|
67,283
|
|
|
|
77,144
|
|
|
|
27,951
|
|
|
|
48,647
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Margin
|
|
|
82,554
|
|
|
|
93,067
|
|
|
|
47,434
|
|
|
|
46,179
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling and administrative
|
|
|
14,546
|
|
|
|
14,320
|
|
|
|
5,313
|
|
|
|
6,034
|
|
|
Accretion of asset retirement obligation
|
|
|
341
|
|
|
|
313
|
|
|
|
115
|
|
|
|
198
|
|
|
Other
|
|
|
577
|
|
|
|
303
|
|
|
|
298
|
|
|
|
5
|
|
|
Operating Income
|
|
|
67,090
|
|
|
|
78,131
|
|
|
|
41,708
|
|
|
|
39,942
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Income (Expense)
|
|
|
|
|
|
|
|
|
|
Interest expense, including realized and
|
|
|
|
|
|
|
|
|
|
unrealized derivative gains and losses
|
|
|
48
|
|
|
|
(232
|
)
|
|
|
186
|
|
|
|
(2,456
|
)
|
|
Interest income
|
|
|
32
|
|
|
|
291
|
|
|
|
268
|
|
|
|
23
|
|
|
Insurance settlements in excess of property losses
|
|
|
(16
|
)
|
|
|
6,966
|
|
|
|
(32
|
)
|
|
|
6,998
|
|
|
Other income (expense)
|
|
|
182
|
|
|
|
(189
|
)
|
|
|
(175
|
)
|
|
|
(14
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Income Before Income Taxes
|
|
|
67,336
|
|
|
|
84,967
|
|
|
|
41,955
|
|
|
|
44,493
|
|
|
|
|
|
|
|
|
|
|
|
|
Income Tax (Expense) Benefit
|
|
|
(28,219
|
)
|
|
|
(33,237
|
)
|
|
|
(16,191
|
)
|
|
|
4
|
|
|
Net Income
|
|
$
|
39,117
|
|
|
$
|
51,730
|
|
|
$
|
25,764
|
|
|
$
|
44,497
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Shares Outstanding:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
74,996,419
|
|
|
|
74,843,124
|
|
|
|
74,843,124
|
|
|
|
|
Diluted
|
|
|
75,006,579
|
|
|
|
75,032,742
|
|
|
|
74,977,793
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings Per Share:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.52
|
|
|
$
|
0.69
|
|
|
$
|
0.34
|
|
|
|
|
Diluted
|
|
$
|
0.52
|
|
|
$
|
0.69
|
|
|
$
|
0.34
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INTREPID POTASH, INC.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(In thousands, except share and per share
amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2009
|
|
December 31, 2008
|
|
ASSETS
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
118,673
|
|
|
$
|
116,573
|
|
|
Short-term investments
|
|
|
751
|
|
|
|
-
|
|
|
Accounts receivable:
|
|
|
|
|
|
Trade, net
|
|
|
18,934
|
|
|
|
15,107
|
|
|
Other receivables
|
|
|
650
|
|
|
|
385
|
|
|
Related parties
|
|
|
14
|
|
|
|
-
|
|
|
Refundable income taxes
|
|
|
6,887
|
|
|
|
9,967
|
|
|
Inventory, net
|
|
|
63,223
|
|
|
|
49,318
|
|
|
Prepaid expenses and other current assets
|
|
|
2,042
|
|
|
|
5,804
|
|
|
Current deferred tax asset
|
|
|
719
|
|
|
|
1,222
|
|
|
Total current assets
|
|
|
211,893
|
|
|
|
198,376
|
|
|
|
|
|
|
|
|
Property, plant and equipment, net of accumulated depreciation
|
|
|
|
|
|
of $33,332 and $26,514, respectively
|
|
|
176,703
|
|
|
|
138,790
|
|
|
Mineral properties and development costs, net of accumulated
|
|
|
|
|
|
depletion of $6,771 and $6,367, respectively
|
|
|
33,575
|
|
|
|
30,244
|
|
|
Long-term parts inventory, net
|
|
|
4,237
|
|
|
|
3,973
|
|
|
Other assets
|
|
|
8,060
|
|
|
|
6,053
|
|
|
Non-current deferred tax asset
|
|
|
310,352
|
|
|
|
327,641
|
|
|
Total Assets
|
|
$
|
744,820
|
|
|
$
|
705,077
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
Accounts payable:
|
|
|
|
|
|
Trade
|
|
$
|
16,704
|
|
|
$
|
15,516
|
|
|
Related parties
|
|
|
184
|
|
|
|
26
|
|
|
Accrued liabilities
|
|
|
11,751
|
|
|
|
14,967
|
|
|
Accrued employee compensation and benefits
|
|
|
6,621
|
|
|
|
6,478
|
|
|
Other current liabilities
|
|
|
1,938
|
|
|
|
1,952
|
|
|
Total current liabilities
|
|
|
37,198
|
|
|
|
38,939
|
|
|
|
|
|
|
|
|
Asset retirement obligation
|
|
|
8,666
|
|
|
|
8,138
|
|
|
Other non-current liabilities
|
|
|
7,690
|
|
|
|
6,401
|
|
|
Total liabilities
|
|
|
53,554
|
|
|
|
53,478
|
|
|
|
|
|
|
|
|
Commitments and Contingencies
|
|
|
|
|
|
|
|
|
|
|
|
Common stock, $0.001 par value; 100,000,000 shares
|
|
|
|
|
|
authorized; and 75,032,086 and 74,846,874 shares
|
|
|
|
|
|
outstanding at June 30, 2009, and December 31, 2008,
|
|
|
|
|
|
respectively
|
|
|
75
|
|
|
|
75
|
|
|
Additional paid-in capital
|
|
|
554,747
|
|
|
|
554,743
|
|
|
Accumulated other comprehensive loss
|
|
|
(839
|
)
|
|
|
(1,385
|
)
|
|
Retained earnings
|
|
|
137,283
|
|
|
|
98,166
|
|
|
Total Stockholders' Equity
|
|
|
691,266
|
|
|
|
651,599
|
|
|
|
|
|
|
|
|
Total Liabilities and Stockholders' Equity
|
|
$
|
744,820
|
|
|
$
|
705,077
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INTREPID POTASH, INC.
CONSOLIDATED STATEMENTS OF
CASH FLOWS (UNAUDITED)
(In thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intrepid Potash, Inc.
|
|
|
|
Intrepid Mining LLC
|
|
|
|
|
|
|
|
(Predecessor)
|
|
|
|
Three Months
|
|
Six Months
|
|
April 25, 2008
|
|
April 1, 2008
|
|
January 1, 2008
|
|
|
|
Ended
|
|
Ended
|
|
Through
|
|
Through
|
|
Through
|
|
|
|
June 30, 2009
|
|
June 30, 2009
|
|
June 30, 2008
|
|
April 24, 2008
|
|
April 24, 2008
|
|
Cash Flows from Operating Activities:
|
|
|
|
|
|
|
|
|
Reconciliation of net income to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
14,436
|
|
|
|
$
|
39,117
|
|
|
|
$
|
25,764
|
|
|
|
|
$
|
11,438
|
|
|
|
$
|
44,497
|
|
|
Deferred income taxes
|
|
|
11,303
|
|
|
|
|
18,033
|
|
|
|
|
8,849
|
|
|
|
|
|
(4
|
)
|
|
|
|
(4
|
)
|
|
Insurance reimbursements
|
|
|
2
|
|
|
|
|
16
|
|
|
|
|
32
|
|
|
|
|
|
-
|
|
|
|
|
(6,998
|
)
|
|
Items not affecting cash:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation, depletion, amortization and accretion
|
|
|
4,256
|
|
|
|
|
7,747
|
|
|
|
|
2,029
|
|
|
|
|
|
753
|
|
|
|
|
3,543
|
|
|
Stock-based compensation
|
|
|
952
|
|
|
|
|
1,287
|
|
|
|
|
2,012
|
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
Unrealized derivative (gain) loss
|
|
|
(846
|
)
|
|
|
|
(1,215
|
)
|
|
|
|
(471
|
)
|
|
|
|
|
(1,028
|
)
|
|
|
|
439
|
|
|
Other
|
|
|
393
|
|
|
|
|
577
|
|
|
|
|
663
|
|
|
|
|
|
(75
|
)
|
|
|
|
170
|
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
Trade accounts receivable
|
|
|
18,668
|
|
|
|
|
(3,827
|
)
|
|
|
|
(4,994
|
)
|
|
|
|
|
(1,248
|
)
|
|
|
|
(11,886
|
)
|
|
Other receivables
|
|
|
(428
|
)
|
|
|
|
(279
|
)
|
|
|
|
(154
|
)
|
|
|
|
|
75
|
|
|
|
|
186
|
|
|
Refundable income taxes
|
|
|
(5,045
|
)
|
|
|
|
3,386
|
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
Inventory
|
|
|
(7,787
|
)
|
|
|
|
(14,169
|
)
|
|
|
|
(3,158
|
)
|
|
|
|
|
(1,665
|
)
|
|
|
|
(830
|
)
|
|
Prepaid expenses and other assets
|
|
|
1,541
|
|
|
|
|
1,728
|
|
|
|
|
4,546
|
|
|
|
|
|
(1,802
|
)
|
|
|
|
(4,349
|
)
|
|
Accounts payable, accrued liabilities and accrued
|
|
|
|
|
|
|
|
|
employee compensation and benefits
|
|
|
(804
|
)
|
|
|
|
(1,492
|
)
|
|
|
|
472
|
|
|
|
|
|
2,441
|
|
|
|
|
1,494
|
|
|
Income taxes payable
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
7,342
|
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
Other current liabilities
|
|
|
(1,809
|
)
|
|
|
|
465
|
|
|
|
|
-
|
|
|
|
|
|
1
|
|
|
|
|
(251
|
)
|
|
Total cash provided by operating activities
|
|
|
34,832
|
|
|
|
|
51,374
|
|
|
|
|
42,932
|
|
|
|
|
|
8,886
|
|
|
|
|
26,011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from Investing Activities:
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from insurance reimbursements
|
|
|
1,998
|
|
|
|
|
1,984
|
|
|
|
|
(32
|
)
|
|
|
|
|
-
|
|
|
|
|
6,998
|
|
|
Additions to property, plant, and equipment
|
|
|
(18,144
|
)
|
|
|
|
(44,461
|
)
|
|
|
|
(6,289
|
)
|
|
|
|
|
(4,971
|
)
|
|
|
|
(14,747
|
)
|
|
Additions to mineral properties and development costs
|
|
|
(1,318
|
)
|
|
|
|
(4,779
|
)
|
|
|
|
9
|
|
|
|
|
|
(12
|
)
|
|
|
|
(15
|
)
|
|
Purchases of investments
|
|
|
(751
|
)
|
|
|
|
(751
|
)
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
Cash received in exchange transaction with
|
|
|
|
|
|
|
|
|
Intrepid Mining LLC
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
428
|
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
Other
|
|
|
-
|
|
|
|
|
16
|
|
|
|
|
(11
|
)
|
|
|
|
|
3
|
|
|
|
|
(10
|
)
|
|
Total cash used in investing activities
|
|
|
(18,215
|
)
|
|
|
|
(47,991
|
)
|
|
|
|
(5,895
|
)
|
|
|
|
|
(4,980
|
)
|
|
|
|
(7,774
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from Financing Activities:
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of common stock, net of expenses
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
1,032,486
|
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
Proceeds from long-term debt
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
|
3,994
|
|
|
|
|
11,503
|
|
|
Repayments on long-term debt
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
(86,951
|
)
|
|
|
|
|
-
|
|
|
|
|
(7,009
|
)
|
|
Payments to fund employee tax withholding due upon vesting of
restricted common stock
|
|
|
(415
|
)
|
|
|
|
(1,283
|
)
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
Members' capital distributions
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
|
(15,000
|
)
|
|
Payments to Intrepid Mining LLC for exchange of
|
|
|
|
|
|
|
assets and liabilities and formation distribution
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
(892,755
|
)
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
Other
|
|
|
12
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
Total cash (used in) provided by financing activities
|
|
|
(403
|
)
|
|
|
|
(1,283
|
)
|
|
|
|
52,780
|
|
|
|
|
|
3,994
|
|
|
|
|
(10,506
|
)
|
|
Net Change in Cash and Cash Equivalents
|
|
|
16,214
|
|
|
|
|
2,100
|
|
|
|
|
89,817
|
|
|
|
|
|
7,900
|
|
|
|
|
7,731
|
|
|
Cash and Cash Equivalents, beginning of period
|
|
|
102,459
|
|
|
|
|
116,573
|
|
|
|
|
-
|
|
|
|
|
|
1,791
|
|
|
|
|
1,960
|
|
|
Cash and Cash Equivalents, end of period
|
|
$
|
118,673
|
|
|
|
$
|
118,673
|
|
|
|
$
|
89,817
|
|
|
|
|
$
|
9,691
|
|
|
|
$
|
9,691
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental disclosure of cash flow information
|
|
|
|
|
|
|
Cash paid during the period for:
|
|
|
|
|
|
|
|
|
|
|
|
Interest
|
|
$
|
446
|
|
|
|
$
|
793
|
|
|
|
$
|
326
|
|
|
|
|
$
|
633
|
|
|
|
$
|
2,274
|
|
|
Income taxes
|
|
$
|
6,765
|
|
|
|
$
|
6,800
|
|
|
|
$
|
-
|
|
|
|
|
$
|
-
|
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INTREPID POTASH, INC.
NON-GAAP ADJUSTED NET INCOME RECONCILIATIONS
(In thousands)
Adjusted net income is calculated as net income for 2009 or pro forma
net income for 2008 adjusted for significant non-cash and unusual items.
Examples of non-cash and unusual charges include insurance settlements
in excess of property losses, non-cash gains or losses associated with
unrealized derivative adjustments, our abnormal production adjustment,
and the write-off of costs associated with the delay in permitting for
the HB Mine associated with contractor mobilization and demobilization.
The non-GAAP measure of adjusted net income is presented because
management believes it provides useful additional information to
investors for analysis of Intrepid's fundamental business on a recurring
normal basis. In addition, management believes that the concept of
adjusted net income is widely used by professional research analysts and
others in the valuation, comparison, and investment recommendations of
companies in the potash mining industry, and many investors use the
published research of industry research analysts in making investment
decisions. The use of adjusted net income is intended to present this
measure on a comparable basis for the impact of the IPO transaction for
the periods presented1.
Adjusted net income should not be considered in isolation or as a
substitute for net income, income from operations, cash provided by
operating activities or other income, profitability, cash flow, or
liquidity measures prepared under GAAP. Since adjusted net income
excludes some, but not all items that affect net income and may vary
among companies, the adjusted net income amounts presented may not be
comparable to similarly titled measures of other companies.
|
|
|
|
|
|
|
|
|
|
Three Months
|
|
Three Months
|
|
|
|
|
Ended
|
|
Ended
|
|
|
|
|
June 30, 2009
|
|
June 30, 2008
|
|
|
|
|
|
|
|
|
|
Net Income
|
|
$
|
14,436
|
|
|
$
|
32,446
|
|
1
|
|
Adjustments
|
|
|
|
|
|
|
Insurance reimbursements
|
|
|
2
|
|
|
|
32
|
|
|
|
Unrealized derivative (gain) loss
|
|
|
(846
|
)
|
|
|
(1,499
|
)
|
|
|
FAS 151 adjustment
|
|
|
5,179
|
|
|
|
-
|
|
|
|
Write-off of mobilization costs associated
|
|
|
|
|
|
|
with the delay of the HB Mine
|
|
|
586
|
|
|
|
-
|
|
|
|
Calculated tax effect 2 |
|
|
(1,929
|
)
|
|
|
577
|
|
|
|
Total adjustments
|
|
|
2,992
|
|
|
|
(890
|
)
|
|
|
|
|
|
|
|
|
|
Adjusted Net Income
|
|
$
|
17,428
|
|
|
$
|
31,556
|
|
|
|
|
|
|
|
|
|
|
1. Net income for the three months ended June 30, 2008, is
presented on a pro forma basis as fully described
in Part I,
Item 1A to our Form 10-Q. Pro forma net income includes
adjustments to reduce net income for
the effect of stock
compensation, interest expense, and income taxes for the period
prior to our IPO.
|
|
|
|
2. Statutory rate of 39.2% for second quarter of 2009 and
statutory rate of 39.3% for 2008.
|
|
|
INTREPID POTASH, INC.
EARNINGS BEFORE INCOME TAXES, INTEREST, DEPRECIATION,
AND AMORTIZATION
(In thousands)
Earnings before income taxes, interest, depreciation and amortization
("EBITDA") is computed as net income or pro forma net income adjusted
for the add back of income tax expense, interest expense, depreciation,
depletion, amortization, asset retirement obligation liability
accretion, and impairment. This non-GAAP measure is presented since
management believes that it provides useful additional information to
investors for analysis of Intrepid's ability to internally generate
funds for capital investment. In addition, EBITDA is widely used by
professional research analysts and others in the valuation, comparison,
and investment recommendations of companies in the potash mining
industry, and many investors use the published research of industry
research analysts in making investment decisions. EBITDA should not be
considered in isolation or as a substitute for net income, income from
operations, net cash provided by operating activities or other income,
profitability, cash flow, or liquidity measures prepared under GAAP.
Since EBITDA excludes some, but not all items that affect net income and
net cash provided by operating activities and may vary among companies,
the EBITDA amounts presented may not be comparable to similarly titled
measures of other companies.
|
|
|
|
|
|
|
|
|
|
Three Months
|
|
Three Months
|
|
|
|
|
Ended
|
|
Ended
|
|
|
|
|
June 30, 2009
|
|
June 30, 2008
|
|
|
|
|
|
|
|
|
|
Net Income
|
|
$
|
14,436
|
|
|
$
|
32,446
|
|
1
|
|
|
|
|
|
|
|
|
Income tax expense
|
|
|
13,023
|
|
|
|
20,580
|
|
|
|
Interest expense, including derivatives
|
|
|
(251
|
)
|
|
|
(1,201
|
)
|
|
|
Depreciation, depletion, amortization and accretion
|
|
|
4,256
|
|
|
|
2,782
|
|
|
|
Write-off of term loan bank fee
|
|
|
-
|
|
|
|
456
|
|
|
|
Total adjustments
|
|
|
17,028
|
|
|
|
22,617
|
|
|
|
|
|
|
|
|
|
|
Earnings Before Income Taxes, Interest, Depreciation,
Depletion,
and Amortization
|
|
$
|
31,464
|
|
|
$
|
55,063
|
|
|
|
|
|
|
|
|
|
|
1. Net income for the three months ended June 30, 2008, is
presented on a pro forma basis as fully
described in Part I,
Item 1A to our Form 10-Q. Pro forma net income includes
adjustments to reduce
net income for the effect of stock
compensation, interest expense, and income taxes for the period
prior
to our IPO.
|
SOURCE: Intrepid Potash, Inc.
Intrepid Potash, Inc.
William Kent, 303-296-3006