Intrepid Potash(US:IPI)2023-11-09 18:07Sales Performance - Potash average net realized sales price per ton decreased to $433 and $474 for the three and nine months ended September 30, 2023, compared to $734 and $718 for the same periods in 2022[92]. - Trio average net realized sales price per ton decreased to $298 and $329 for the three and nine months ended September 30, 2023, compared to $488 and $482 for the same periods in 2022[94]. - Total sales for Q3 2023 decreased by $20.3 million, or 27%, compared to Q3 2022, with potash segment sales down 35% and oilfield solutions segment sales down 42%[102]. - Average net realized sales price per ton for potash decreased by 41% in Q3 2023, while tons sold remained unchanged[102]. - Trio sales decreased by $2.6 million, or 11%, in Q3 2023, despite a 33% increase in tons sold, as the average net realized sales price per ton decreased by 39%[103]. - Total sales for the nine months ended September 30, 2023, decreased by $48.5 million, or 18%, with potash segment sales down 14%[112]. - Potash sales for the first nine months of 2023 decreased by $21.5 million, with an average net realized sales price per ton down 34%[112]. - Total segment sales for potash in the nine months ended September 30, 2023, were $127.4 million, while Trio segment sales were $81.1 million, compared to $147.6 million and $100.6 million in 2022, respectively[174]. Production and Costs - Total cost of goods sold increased by $2.3 million, or 6%, in Q3 2023, with potash costs up 8% despite unchanged tons sold[105]. - Total cost of goods sold for the first nine months of 2023 increased by $27.8 million, or 23%, with potash costs up 35%[117]. - Gross margin for Q3 2023 was $0.5 million, a significant decrease from $26.8 million in Q3 2022, due to lower sales prices and increased costs[107]. - Gross margin for the first nine months of 2023 was $32.2 million, down from $115.8 million in the same period of 2022[120]. - Trio segment cost of goods sold increased by 44% in the third quarter of 2023, attributed to a 33% increase in tons sold and rising natural gas and electricity expenses[139]. - Cost of goods sold for the Trio segment increased by 29% in the first nine months of 2023, attributed to increased carrying costs and a 9% decrease in production volume[141]. Financial Results - Net loss for Q3 2023 was $7.2 million, compared to net income of $13.1 million in Q3 2022[111]. - Net income for the first nine months of 2023 was $1.6 million, a significant decrease from $68.2 million in the same period of 2022[123]. - Potash segment gross margin decreased by $43.1 million in the first nine months of 2023 compared to the same period in 2022[136]. Investments and Capital Expenditures - Capital investments for the first nine months of 2023 totaled $58.5 million, with expectations of $65 million to $75 million for the full year[160][161]. - Net cash used in investing activities increased by $6.2 million to $54.6 million in the first nine months of 2023, driven by a $21.4 million increase in capital investments[164]. Operational Developments - The company successfully commissioned the Eddy Shaft Brine Extraction Project in October 2023, targeting a brine pool estimated to contain approximately 270 million gallons of brine at over 9% potassium chloride[100]. - The new extraction well at the HB Solar Solution Mine is expected to be commissioned in the first half of 2024, targeting approximately 330 million gallons of high-grade brine[100]. - Phase Two of the HB Injection Pipeline Project is anticipated to begin construction in Q1 2024, aiming for the highest brine injection rates in company history[100]. - The company is targeting approximately one million tons per year of wet sand from the Intrepid South sand mine, contingent upon receiving necessary operating permits[98]. Market and Economic Factors - Inflationary pressures have led to increased labor costs and supply costs, impacting production margins[96]. - The effective tax rate for the nine months ended September 30, 2023, was 54.0%, significantly higher than the 24.5% rate for the same period in 2022[157]. - There have been no significant changes to market risk exposure since December 31, 2022[175]. Borrowings and Liquidity - As of September 30, 2023, cash and cash equivalents were $2.8 million, down from $18.5 million at the end of 2022, primarily due to capital expenditures[162]. - As of September 30, 2023, the company had $2.0 million in borrowings outstanding under the revolving credit facility, with $146.0 million of remaining availability[167]. - The company made $7.0 million in borrowings and $5.0 million in repayments under the revolving credit facility during the nine months ended September 30, 2023[166]. - The company was in compliance with all applicable covenants under the revolving credit facility as of September 30, 2023[167]. Byproduct Sales - Byproduct sales were $7.0 million during Q3 2023, slightly down from $7.1 million in Q3 2022; year-to-date byproduct sales increased to $21.3 million from $19.0 million in the prior year[96]. - Potash segment byproduct sales increased by $1.2 million, or 7%, in the first nine months of 2023, driven by strong demand for byproduct salt and brine water[132]. - Trio segment byproduct water sales increased due to a higher percentage sourced from byproduct water, contributing to overall revenue[141].