Intrepid Potash(IPI) - 2024 Q1 - Quarterly Results

Key Highlights and Management Commentary Intrepid reported a Q1 2024 net loss of $3.1 million, a decline from $4.5 million net income in Q1 2023, despite strong operating cash flow of $41.5 million Q1 2024 Key Financial & Operational Metrics | Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Total Sales | $79.3M | $86.9M | | Net (Loss) Income | ($3.1M) | $4.5M | | Diluted (Loss) EPS | ($0.24) | $0.35 | | Gross Margin | $6.4M | $16.4M | | Adjusted EBITDA | $7.7M | $16.4M | | Cash Flow from Operations | $41.5M | $8.4M | | Potash Sales Volume | 74k tons | 89k tons | | Trio® Sales Volume | 91k tons | 65k tons | | Potash Avg. Net Realized Price | $395/ton | $485/ton | | Trio® Avg. Net Realized Price | $300/ton | $344/ton | - Executive Chairman and CEO, Bob Jornayvaz, was granted a temporary medical leave of absence, with CFO Matt Preston appointed acting principal executive officer[4] - Capital expenditures were $11.7 million in Q1 2024, with the full-year forecast remaining between $40 million and $50 million, primarily for potash assets to maximize brine availability and residence time[7] - Key operational projects, including Eddy Shaft Brine Extraction, a new replacement extraction well (IP30B), and the HB Injection Pipeline Project, are progressing to increase future potash production[12] - A revised operating schedule at the East Underground Trio® Mine is expected to decrease 2024 cash production costs by $8 million to $10 million (12-15%) compared to the prior year, while maintaining similar production volumes[13] Segment Performance Analysis Q1 2024 segment performance was mixed, with Potash sales and gross margin declining, Trio® sales increasing but with a gross deficit, and Oilfield Solutions showing strong growth Potash Segment Potash segment sales fell 28% to $37.6 million, with gross margin dropping to $5.6 million, due to a 19% price decrease and 17% volume reduction Potash Segment Performance (Q1 2024 vs Q1 2023) | Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Sales | $37.6M | $52.5M | | Gross Margin | $5.6M | $14.4M | | Sales Volumes | 74k tons | 89k tons | | Production Volumes | 87k tons | 90k tons | | Avg. Net Realized Sales Price | $395/ton | $485/ton | - The decrease in revenue was driven by both a 19% decrease in average net realized sales price and a 17% decrease in sales volumes[15] Trio® Segment Trio® segment sales increased 21% to $36.5 million due to a 40% volume surge, but a 13% price drop resulted in a $1.1 million gross deficit Trio® Segment Performance (Q1 2024 vs Q1 2023) | Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Sales | $36.5M | $30.3M | | Gross (Deficit) Margin | ($1.1M) | $1.5M | | Sales Volume | 91k tons | 65k tons | | Production Volume | 54k tons | 49k tons | | Avg. Net Realized Sales Price | $300/ton | $344/ton | - The sales increase was primarily due to a 40% increase in tons sold, as customers found good value for Trio® relative to crop prices, partially offset by a 13% decrease in the average net realized sales price[19] Oilfield Solutions Segment Oilfield Solutions sales increased $1.1 million to $5.3 million, with gross margin improving to $2.0 million, driven by higher water sales and reduced costs Oilfield Solutions Segment Performance (Q1 2024 vs Q1 2023) | Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Sales | $5.3M | $4.3M | | Gross Margin | $2.0M | $0.5M | - The sales increase was due to a $0.6 million increase in water sales, a $0.3 million increase in brine water sales, and a $0.2 million increase in other oilfield products, driven by strong demand in the Permian Basin[21] Financial Statements (Unaudited) Q1 2024 unaudited financial statements show a net loss of $3.1 million, increased total assets to $802.6 million, and strong operating cash flow of $41.5 million Condensed Consolidated Statements of Operations Q1 2024 statements of operations show total sales of $79.3 million, a gross margin of $6.4 million, an operating loss of $4.3 million, and a net loss of $3.1 million Q1 2024 Statement of Operations Highlights (in thousands) | Line Item | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Sales | $79,287 | $86,920 | | Gross Margin | $6,434 | $16,352 | | Operating (Loss) Income | ($4,306) | $5,374 | | Net (Loss) Income | ($3,130) | $4,506 | | Diluted (Loss) EPS | ($0.24) | $0.35 | Condensed Consolidated Balance Sheets As of March 31, 2024, total assets reached $802.6 million, driven by increased cash, while total liabilities rose to $120.6 million due to deferred income Balance Sheet Highlights (in thousands) | Account | March 31, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Cash and cash equivalents | $34,067 | $4,071 | | Total current assets | $188,144 | $152,040 | | Total Assets | $802,598 | $768,570 | | Total current liabilities | $39,450 | $46,564 | | Total Liabilities | $120,611 | $84,142 | | Total Stockholders' Equity | $681,987 | $684,428 | Condensed Consolidated Statements of Cash Flows Q1 2024 net cash from operations was $41.5 million, significantly up from Q1 2023, primarily due to deferred income, resulting in a $30.0 million cash increase Q1 2024 Cash Flow Highlights (in thousands) | Cash Flow Activity | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities | $41,532 | $8,449 | | Net cash used in investing activities | ($6,577) | ($20,430) | | Net cash (used in) provided by financing activities | ($4,957) | $3,920 | | Net Change in Cash | $29,998 | ($8,061) | Non-GAAP Reconciliations Non-GAAP reconciliations show Q1 2024 Adjusted Net Loss of $1.9 million and Adjusted EBITDA of $7.7 million, both down year-over-year, reflecting lower average net realized sales prices Reconciliation of Net (Loss) Income to Adjusted Net (Loss) Income (in thousands) | Line Item | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Net (Loss) Income | ($3,130) | $4,506 | | Adjustments | $1,205 | $148 | | Adjusted Net (Loss) Income | ($1,925) | $4,654 | Reconciliation of Net (Loss) Income to Adjusted EBITDA (in thousands) | Line Item | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Net (Loss) Income | ($3,130) | $4,506 | | Total adjustments | $10,859 | $11,894 | | Adjusted EBITDA | $7,729 | $16,400 | Average Net Realized Sales Price per Ton | Product | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Potash | $395 | $485 | | Trio® | $300 | $344 |