Intrepid Potash Announces Fourth Quarter and Full Year 2012 Financial Results; Provides Outlook for First Quarter and Full Year 2013; Affirms Progress on Capital Investment Program
13.02.2013 | Globenewswire Europe
DENVER; Feb. 13, 2013 - Intrepid Potash Inc. (Intrepid) (NYSE:IPI) announced2012 fourth quarter and full year results today and highlighted its progress on
capital projects.
Fourth Quarter and Full Year Financial Highlights:
* Fourth quarter average net realized sales price(1) of $434 per ton ($479 per
metric tonne) for potash, and $347 per ton ($383 per metric tonne) for
Trio(®)
* Adjusted EBITDA(2) for the quarter was $41.5 million, compared with $45.2
million for prior year's fourth quarter
* Quarterly net income was $14.5 million, or $0.19 per diluted share, compared
with fourth quarter 2011 net income of $24.9 million, or $0.33 per diluted
share
* Adjusted net income(3) for the fourth quarter was $19.7 million, or $0.26
per diluted share, compared with $21.0 million, or $0.28 per diluted share,
in the same period last year
* Capital investment totaled $85.8 million for the fourth quarter and $253.0
million for the full year 2012
* A special cash dividend of $0.75 per share, or $56.5 million total, was paid
in December
* Cash flows from operating activities totaled $55.5 million, up from $44.3
million for the fourth quarter of 2011; full year cash flows from operations
were $187.8 million, compared to $173.9 million for 2011
* At year end, cash, cash equivalents, and investments were $57.7 million;
there was no debt outstanding under the unsecured revolving credit facility,
with $250 million available; and the $150 million unsecured senior notes are
scheduled to fund in April 2013
(1) Average net realized sales price is an operating performance measure
calculated as gross sales less freight costs, divided by the number of tons sold
in the period.
(2) Adjusted earnings before interest, taxes, depreciation, and amortization
(adjusted EBITDA) is a financial measure not calculated in accordance with U.S.
Generally Accepted Accounting Principles (non-GAAP). See the non-GAAP
reconciliations set forth later in this press release for additional
information.
(3) Adjusted net income and adjusted net income per diluted share are financial
measures not calculated in accordance with U.S. Generally Accepted Accounting
Principles (non-GAAP). See the non-GAAP reconciliations set forth later in this
press release for additional information.
"Our ability to achieve healthy financial results concurrent with successfully
advancing multiple significant capital projects is a testament to the highly
skilled and dedicated team of people at Intrepid," said Bob Jornayvaz,
Intrepid's Executive Chairman of the Board. "We are unwavering in our
commitment to invest in our people and facilities in order to drive shareholder
value through the growth of production of lower cost tons while fully
participating in the North American potash market. We successfully achieved
significant milestones in 2012 on each and every one of our major projects. We
began pumping brine into the first evaporation pond at our HB Solar Solution
mine in the fourth quarter, and the North compaction plant will come on line
beginning in 2013, as expected, allowing us increased as well as more flexible
production capabilities that better align with our customers' needs. We paid a
special dividend in 2012 reflecting our confidence in the company, as well as in
our progress toward our capital investment program."
Commenting on the market, Mr. Jornayvaz continued, "We see favorable trends in
the coming year. Specifically, the high commodity prices and low stocks-to-use
ratios should have farmers looking to maximize yields through a balanced
fertilization approach, which remains a cornerstone to accomplish this
objective. Furthermore, our diverse product offerings, marketing flexibility,
geographic advantage, and strong customer relationships position us to prosper
even in the face of another potentially low moisture season."
Fourth Quarter Results
Income before income taxes for the fourth quarter of 2012 was $28.4 million
compared with $35.3 million in the fourth quarter of 2011. Adjusted net income
for the fourth quarter of 2012 was $19.7 million compared with $21.0 million in
the same period in the prior year. Although average net realized sales price
decreased in the fourth quarter of 2012, Intrepid sold 20,000 more tons of
potash in the fourth quarter of 2012 compared with the same period in 2011.
Cash flows from operating activities were $55.5 million for the fourth quarter
of 2012 compared with $44.3 million for the fourth quarter of 2011.
Potash
* Average net realized sales price in the fourth quarter of 2012 was $434 per
ton ($479 per metric tonne); fourth quarter 2011 average net realized sales
price was $497 per ton ($548 per metric tonne)
* Cash operating cost of goods sold, net of by-product credits(4), was $180
per ton, an improvement from $194 per ton in the fourth quarter of 2011
* Potash sales increased to 203,000 tons in the fourth quarter of 2012, from
183,000 tons in the fourth quarter of 2011
* Potash production in the fourth quarter of 2012 was 218,000 tons, compared
with 197,000 tons in the same period a year ago
(4) Cash operating cost of goods sold and cash operating cost of goods sold, net
of by-product credits, are operating performance measures defined as total cost
of goods sold excluding royalties, depreciation, depletion, and amortization
(and, if applicable, excluding by-product credits), divided by the number of
tons sold in the period.
The solid potash sales volume was driven by a robust fall application season and
the continued strength of customer relationships. The average net realized
sales price was down $10 per ton from the third quarter 2012.
The continued improvement in potash production was driven by the East facility,
where fourth quarter potash production was the highest since the first quarter
of 2011. This is a direct result of, and a solid return on, the multi-faceted
long-term improvement plan. Some operating inefficiencies will result at the
East facility as this work progresses, which may impact production levels and
cause variability in cash operating cost of goods sold.
Cash operating cost of goods sold, net of by-product credits for potash improved
to $180 per ton in the fourth quarter of 2012 from $194 per ton in the fourth
quarter of 2011. Cash operating cost of goods sold increased sequentially from
the third quarter of 2012, reflecting some of the normal quarter-to-quarter
fluctuations that exist due to the mix of production and sales from each of the
individual facilities. Each facility has a different per ton cost of goods sold
result with the Utah operations having the lowest as they benefit from the cost-
effective combination of solution mining and solar evaporation. This
underscores the expectation for producing lower cost tons from the HB Solar
Solution mine as it begins to contribute meaningfully to production levels in
2014.
Langbeinite - Trio(®)
* Average net realized sales price for langbeinite, which is marketed as
Trio(®), was $347 per ton ($383 per metric tonne), compared with $287 per
ton ($316 per metric tonne) in the fourth quarter of 2011
* Cash operating cost of goods sold was $211 per ton, compared with $187 per
ton in the same quarter of 2011
* Trio(® )sales increased to 43,000 tons in the fourth quarter of 2012 from
28,000 tons for the same period in the prior year
* Langbeinite production was 34,000 tons in the fourth quarter of 2012 and
31,000 tons in the fourth quarter of 2011
In the fourth quarter of 2012, the average net realized sales price for Trio(®
)of $347 per ton was a sequential increase of $11 per ton from the third quarter
of 2012. Compared with the prior year's fourth quarter the average net realized
sales price was up $60 per ton. This upward pricing trend highlights the value
of Trio(®), specifically, the value of the magnesium and sulfate components
contained in this specialty product.
Pricing and demand for Trio(®) remain strong as evidenced by the 43,000 tons
sold in the fourth quarter of 2012, an increase from the 28,000 tons sold in the
prior year's fourth quarter and the 27,000 tons sold in the third quarter of
2012. As demand remains in excess of current production levels, all of
Intrepid's Trio(®) inventory and anticipated 2013 production is expected to be
sold in the current year.
Langbeinite production increased slightly from the same period last year, and
came in line with expected results. Intrepid continues to focus on the
execution of the previously announced East facility long-term improvement plan.
Specific modifications to the langbeinite portion of the plant were installed
recently and continue to be commissioned together with the rest of the dense
media separation section of the plant.
Cash operating cost of goods sold for Trio(®) was $211 per ton in the fourth
quarter of 2012 and $187 per ton in the fourth quarter of 2011. Cash operating
cost of goods sold continues to be impacted by the production levels from the
facility. The long-term improvement plan and commissioning activities are
expected to increase operating efficiencies and are expected to result in
incremental production and an associated improvement in per ton cash operating
cost of goods sold.
Income Taxes
During the fourth quarter of 2012, Intrepid decreased the estimate of its future
state income tax rate resulting in a decrease in the value of the deferred
income tax asset and an increase in deferred income tax expense of approximately
$5.3 million, or $0.07 per diluted share. There was a state income tax
adjustment, for similar reasons, resulting in a tax benefit in the third quarter
of 2012 of $4.3 million, or $0.06 per diluted share, making the net result for
the full year an additional tax expense of $1.0 million, or $0.01 per diluted
share.
During the fourth quarter of 2011, Intrepid recorded a deferred tax benefit of
$3.7 million, or $0.05 per diluted share, also as a result of adjustments to the
aggregate state tax rate.
Dividends
In the fourth quarter, Intrepid declared and paid a special cash dividend of
$0.75 per share, or $56.5 million.
Market Conditions
The fall application season was in line with expectations and suggests good
overall potash demand across North America for the upcoming growing season.
Macro trends including below-average yields for the past crop year have
tightened stocks-to-use ratios. The result has been historically strong
commodity prices for corn, soybeans, and other crops. The belief is that, on
average, farmer cash flows from the 2012 growing season were above average due
to these higher commodity prices and the benefit of crop insurance. In the
upcoming growing season, Intrepid anticipates that farmers will seek to maximize
yields to take advantage of the strong profit potential in front of them.
Dealers continue to manage risk by timing fertilizer purchases to meet
downstream demand. They are utilizing just-in-time ordering as they seek
additional clarity on spring demand from the farm gate. As such, it is a
challenge to predict timing of sales and Intrepid's quarterly results may be
impacted by this volatility. Intrepid's focus is on the overall delivery of
product over the course of the full application seasons and less on the specific
monthly timing within the season.
The diversity of the markets served by Intrepid continues to provide a strategic
advantage with the feed and industrial markets remaining relatively steady
contributors to the overall sales mix.
Capital Investment
In the full year of 2012, capital investments totaled $253.0 million. The
strategic capital projects, which are designed to provide the opportunity to
increase profitability and cash flows from the production of incremental lower
cost tons, continued to progress within expectations.
HB Solar Solution Mine
Construction of the HB Solar Solution mine in Carlsbad, New Mexico, continues to
progress. In November 2012, Intrepid achieved a significant milestone when it
began pumping potash-enriched brine into the first new solar evaporation pond.
Also during the fourth quarter, the mill design was finalized and construction
began with concrete pours for the mill foundation. These are major events
keeping the original project timeline intact with the first production expected
to occur in the fourth quarter of 2013 at the conclusion of the evaporation
season and completion of mill construction. The total investment is now
anticipated to be in the range of $225 to $245 million, which accounts for
improvements made to the mill design as well as capital to add additional brine
water supply wells. Intrepid believes that these improvements will better
ensure the long-term reliability, operating efficiency and predictability of its
HB Solar Solution mine. As of December 31, 2012, total capital invested in this
project was $128.3 million.
North Compaction Project
Construction of the North compaction project in Carlsbad, New Mexico, began in
the second quarter of 2012. This project upgrades the granulation facility and
increases its capacity to handle the anticipated production from the HB Solar
Solution mine and the expansion of the West facility. Construction remains on
schedule with concrete and steel erection work substantially complete and most
major equipment in place including the compactors. Total capital investment for
the project is still expected to be approximately $95 to $100 million, of which
approximately $55.4 million was invested as of the end of 2012. The North
compaction facility is expected to have its first and second lines operational
in 2013 with the third line becoming operational early in 2014. The first and
second lines are designed to handle all of the expected production in 2013.
Moab Cavern System
The addition of new solution mining caverns at the Moab, Utah facility continued
during the fourth quarter. The second cavern system has been put into service
and development of the third cavern system began in early 2013. These
additional horizontal cavern systems are expected to benefit the Moab operations
beginning with the 2013 evaporation season. The capital investment associated
with the third cavern is expected to be in the range of $20 to $30 million, the
majority of which will be invested during 2013.
2013 Outlook
Intrepid's outlook for the first quarter and full year 2013 is presented below.
This information is the best estimate at the current time and will be impacted
by actual market conditions, results of operations, and production results.
Outlook information for capital investment is provided on a full year basis
only.
Three Months Ended Year Ended
March 31, 2013 December 31, 2013
------------------------ --------------------
Potash
Production (tons) 200,000 - 215,000 850,000 - 880,000
Sales (tons) 170,000 - 200,000 850,000 - 870,000
Cash COGS, net of by-product
credit ($/ton) $185 - $195 $170 - $190
Total COGS ($/ton) $245 - $255 $240 - $260
Trio(®)
Production (tons) 35,000 - 45,000 150,000 - 180,000
Sales (tons) 25,000 - 35,000 150,000 - 175,000
Cash COGS ($/ton) $175 - $190 $175 - $190
Total COGS ($/ton) $255 - $270 $240 - $280
Other
Selling and Administrative $8 - $10 million $37 - $39 million
Capital Investment Not Provided Quarterly $235 - $285 million
Dave Honeyfield, President and Chief Financial Officer commented on the outlook,
"We are committed to investing appropriate levels of capital to achieve our goal
of producing incremental tons at meaningfully lower cash costs. We take a
disciplined approach to investing capital and extensively manage and review all
of our projects underway and in our project pipeline." Mr. Honeyfield noted
that the capital investment plan for 2013 includes investments to complete the
construction of the HB Solar Solution mine; the North compaction facility; the
third mining cavern system in Moab; approximately $50 million in smaller
opportunity projects that are geared towards recovery and capacity enhancements;
and approximately $50 million of sustaining capital investments. The 2013
capital program is expected to be funded out of cash flow, existing cash and
investments, proceeds from the unsecured senior notes funding in April 2013, and
possible minimal utilization of the unsecured credit facility prior to the
funding of the senior notes.
Notes
Adjusted net income, adjusted net income per diluted share, and adjusted EBITDA
are non-GAAP financial measures. Reconciliations of these measures to the most
directly comparable U.S. GAAP measures are included in the tables at the end of
this release. Average net realized sales price, cash operating cost of goods
sold, and cash operating cost of goods sold net of by-product credits are
operating measures. Definitions of these measures are included in the footnotes
in this release.
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
The conference call to discuss fourth quarter and full year 2012 results is
scheduled for Thursday, February 14, 2013, at 8:00 a.m. MT (10:00 a.m. ET). The
call participation number is (800) 319-4610. A recording of the conference call
will be available two hours after the completion of the call at (800) 319-6413.
International participants can dial (631) 982-4565 to take part in the
conference call and can access a replay of the call at (412) 317-0088. The
replay of the call will require the input of the conference identification
number 763324. The call will also be streamed on the Intrepid website,
www.intrepidpotash.com. In addition, the press release announcing fourth
quarter and full year 2012 results will be available on the Intrepid website
before the call under "Investor Relations - Press Releases." An audio recording
of the conference call will be available at www.intrepidpotash.com through March
14, 2013.
About Intrepid
Intrepid (NYSE: IPI) is the largest producer of potash in the U.S. and is
dedicated to the production and marketing of potash and Trio(®), a product
produced from langbeinite ore. Intrepid owns five active potash production
facilities - three in New Mexico and two in Utah. The HB Solar Solution mine,
which is currently under construction, will increase the number of our active
potash production facilities to six.
We routinely post important information about our business, including
information about upcoming investor presentations, on our website under the
Investor Relations tab. We encourage our investors and other interested parties
to enroll on our website to receive automatic email alerts or Really Simple
Syndication (RSS) feeds regarding new postings. Our website address is
www.intrepidpotash.com.
Forward-looking Statements
This document contains forward-looking statements - that is, statements about
future, not past, events. The forward-looking statements in this document often
relate to our future performance and management's expectations for the future,
including statements about our financial outlook. These statements are based on
assumptions that we believe are reasonable. Forward-looking statements by their
nature address matters that are uncertain. For us, the particular uncertainties
that could cause our actual results to be materially different from our forward-
looking statements include the following:
* changes in the price, demand, or supply of potash or Trio(®)/langbeinite
* circumstances that disrupt or limit our production, including operational
difficulties or operational variances due to geological or geotechnical
variances
* interruptions in rail or truck transportation services, or fluctuations in
the costs of these services
* increased labor costs or difficulties in hiring and retaining qualified
employees and contractors, including workers with mining, mineral processing
or construction expertise
* the costs of, and our ability to successfully construct, commission and
execute, our strategic projects, including the development of our HB Solar
Solution mine, the further development of our langbeinite recovery and
granulation assets, our North granulation plant, and our Moab cavern
systems
* adverse weather events, including events affecting evaporation rates at our
solar solution mines
* changes in the prices of raw materials, including chemicals, natural gas,
and power
* the impact of federal, state, or local government regulations, including
environmental and mining regulations, the enforcement of those regulations,
and government policy changes
* our ability to obtain any necessary government permits relating to the
construction and operation of assets
* changes in our reserve estimates
* competition in the fertilizer industry
* declines in U.S. or world agricultural production
* declines in the use of potash products by oil and gas companies in their
drilling operations
* changes in economic conditions
* our ability to comply with covenants in our debt-related agreements to avoid
a default under those agreements
* disruption in the credit markets
* our ability to secure additional federal and state potash leases to expand
our existing mining operations
* the other risks and uncertainties described in our periodic filings with the
U.S. Securities and Exchange Commission
All information in this document speaks as of February 13, 2013. New
information or events after that date may cause our forward-looking statements
in this document to change. We have 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.
INTREPID POTASH, INC.
SELECTED OPERATIONS DATA (UNAUDITED)
FOR THE THREE AND TWELVE MONTHS ENDED DECEMBER 31, 2012 AND 2011
Three Months Ended
December 31, Year ended December 31,
-------------------------- --------------------------
2012 2011 2012 2011
------------- ------------ ------------- ------------
Production volume (in
thousands of tons):
Potash 218 197 796 813
------------- ------------ ------------- ------------
Langbeinite 34 31 131 141
------------- ------------ ------------- ------------
Sales volume (in
thousands of tons):
Potash 203 183 839 793
------------- ------------ ------------- ------------
Trio(®) 43 28 125 173
------------- ------------ ------------- ------------
Gross sales (in
thousands):
Potash $ 93,654 $ 94,706 $ 402,382 $ 392,331
Trio(®) 17,285 9,897 48,934 50,623
------------- ------------ ------------- ------------
Total 110,939 104,603 451,316 442,954
Freight costs (in
thousands):
Potash 5,529 4,124 21,396 18,470
Trio(®) 2,351 1,895 7,768 9,869
------------- ------------ ------------- ------------
Total 7,880 6,019 29,164 28,339
Net sales (in
thousands):
Potash 88,125 90,582 380,986 373,861
Trio(®) 14,934 8,002 41,166 40,754
------------- ------------ ------------- ------------
Total $ 103,059 $ 98,584 $ 422,152 $ 414,615
------------- ------------ ------------- ------------
Potash statistics (per
ton):
Average net realized
sales price $ 434 $ 497 $ 454 $ 472
Cash operating cost
of goods sold, net of
by-product
credits* (exclusive of
items
shown separately
below) 180 194 180 173
Depreciation,
depletion, and
amortization 43 39 43 33
Royalties 17 18 17 17
------------- ------------ ------------- ------------
Total potash cost
of goods sold $ 240 $ 251 $ 240 $ 223
------------- ------------ ------------- ------------
Warehousing and
handling costs 18 16 15 14
------------- ------------ ------------- ------------
Average potash
gross margin (exclusive
of costs
associated with
abnormal
production) $ 176 $ 230 $ 199 $ 235
------------- ------------ ------------- ------------
Trio(®) statistics (per
ton):
Average net
realized sales price $ 347 $ 287 $ 329 $ 236
Cash operating cost
of goods sold
(exclusive of
items shown separately
below) 211 187 209 176
Depreciation,
depletion, and
amortization 65 27 61 22
Royalties 17 14 16 12
------------- ------------ ------------- ------------
Total Trio(®)
cost of goods sold $ 293 $ 228 $ 286 $ 210
------------- ------------ ------------- ------------
Warehousing and
handling costs 17 17 16 15
------------- ------------ ------------- ------------
Average Trio(®)
gross margin (exclusive
of costs associated
with
abnormal production) $ 37 $ 42 $ 27 $ 11
------------- ------------ ------------- ------------
* On a per ton basis, by-product credits were $9 and $11 for the fourth quarter
of 2012, and 2011, respectively. By-product credits were $1.9 million and $2.0
million for the fourth quarter of 2012, and 2011, respectively. On a per ton
basis, by-product credits were $8 for both the year ended December 31, 2012, and
2011. By-product credits were $6.5 million and $6.0 million for the year ended
December 31, 2012, and 2011, respectively.
INTREPID POTASH, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
FOR THE THREE AND TWELVE MONTHS ENDED DECEMBER 31, 2012 AND 2011
(In thousands, except share and per share amounts)
Three Months Ended December
31, Year Ended December 31,
----------------------------- ----------------------------
2012 2011 2012 2011
-------------- -------------- -------------- -------------
Sales $ 110,939 $ 104,603 $ 451,316 $ 442,954
Less:
Freight costs 7,880 6,019 29,164 28,339
Warehousing and
handling costs 4,363 3,410 14,966 14,027
Cost of goods
sold 61,453 52,413 236,480 213,670
Other 60 3 568 698
-------------- -------------- -------------- -------------
Gross Margin 37,183 42,758 170,138 186,220
Selling and
administrative 8,744 7,673 33,750 31,807
Accretion of asset
retirement
obligation 181 184 724 750
Insurance
settlements income
from
property and
business losses - - - (12,500 )
Other expense
(income) 123 90 263 (7,714 )
-------------- -------------- -------------- -------------
Operating Income 28,135 34,811 135,401 173,877
Other Income
(Expense)
Interest expense,
including realized
and unrealized
derivative
gains and losses (216 ) (192 ) (905 ) (869 )
Interest income 317 499 1,843 1,730
Other income 175 183 588 523
-------------- -------------- -------------- -------------
Income Before
Income Taxes 28,411 35,301 136,927 175,261
Income Tax Expense (13,874 ) (10,384 ) (49,484 ) (65,850 )
-------------- -------------- -------------- -------------
Net Income $ 14,537 $ 24,917 $ 87,443 $ 109,411
-------------- -------------- -------------- -------------
Weighted Average
Shares
Outstanding:
Basic 75,300,628 75,203,865 75,276,609 75,180,714
-------------- -------------- -------------- -------------
Diluted 75,371,295 75,291,162 75,336,982 75,281,050
-------------- -------------- -------------- -------------
Earnings Per
Share:
Basic $ 0.19 $ 0.33 $ 1.16 $ 1.46
-------------- -------------- -------------- -------------
Diluted $ 0.19 $ 0.33 $ 1.16 $ 1.45
-------------- -------------- -------------- -------------
INTREPID POTASH, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
AS OF DECEMBER 31, 2012 AND 2011
(In thousands, except share and per share amounts)
December 31,
2012 2011
------------- ------------
ASSETS
Cash and cash equivalents $ 33,619 $ 73,372
Short-term investments 24,128 97,242
Accounts receivable:
Trade, net 31,508 29,304
Other receivables 9,122 6,898
Refundable income taxes 3,306 4,493
Inventory, net 53,275 55,390
Prepaid expenses and other current assets 5,393 5,015
Current deferred tax asset 2,005 4,931
------------- ------------
Total current assets 162,356 276,645
------------- ------------
Property, plant, and equipment, net of accumulated
depreciation
of $142,137 and $98,654, respectively 543,169 387,423
Mineral properties and development costs, net of
accumulated
depletion of $11,060 and $9,773, respectively 94,096 33,482
Long-term parts inventory, net 10,208 9,559
Long-term investments - 6,180
Other assets 4,246 3,949
Non-current deferred tax asset 180,548 215,632
------------- ------------
Total Assets $ 994,623 $ 932,870
------------- ------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable:
Trade $ 19,431 $ 20,900
Related parties 203 134
Accrued liabilities 32,496 14,795
Accrued employee compensation and benefits 11,680 12,370
Other current liabilities 3,578 1,476
------------- ------------
Total current liabilities 67,388 49,675
------------- ------------
Asset retirement obligation 19,344 9,708
Other non-current liabilities 2,155 2,354
------------- ------------
Total Liabilities 88,887 61,737
------------- ------------
Commitments and Contingencies
Common stock, $0.001 par value; 100,000,000 shares
authorized; and 75,312,805 and 75,207,533
shares
outstanding at December 31, 2012 and 2011,
respectively 75 75
Additional paid-in capital 568,375 564,285
Accumulated other comprehensive loss (1,729 ) (1,431 )
Retained earnings 339,015 308,204
------------- ------------
Total Stockholders' Equity 905,736 871,133
------------- ------------
Total Liabilities and Stockholders' Equity $ 994,623 $ 932,870
------------- ------------
INTREPID POTASH, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE THREE AND TWELVE MONTHS ENDED DECEMBER 31, 2012 AND 2011
(In thousands)
Three Months Ended
December 31, Year Ended December 31,
------------------------- -------------------------
2012 2011 2012 2011
------------ ------------ ------------ ------------
Cash Flows from Operating
Activities:
Reconciliation of net
income to net cash
provided
by operating
activities:
Net income $ 14,537 $ 24,917 $ 87,443 $ 109,411
Deferred income taxes 9,423 6,414 38,011 49,028
Insurance settlements
income from property
and business
losses - - - (12,500 )
Items not affecting cash:
Depreciation,
depletion, and accretion 12,872 9,744 47,599 35,787
Stock-based
compensation 1,438 1,208 5,116 4,984
Unrealized derivative
gain (280 ) (376 ) (1,049 ) (1,289 )
Other 888 955 3,827 2,520
Changes in operating
assets and liabilities:
Trade accounts
receivable 16,287 4,858 (2,204 ) (5,537 )
Other receivables 537 4,091 (2,223 ) (5,743 )
Refundable income
taxes (3,306 ) 2,603 1,187 2,051
Inventory 475 (2,738 ) 1,464 (9,734 )
Prepaid expenses and
other assets 1,303 1,924 (378 ) 1,383
Accounts payable,
accrued liabilities, and
accrued employee
compensation and benefits 608 (8,018 ) 7,324 5,225
Other liabilities 732 (1,325 ) 1,717 (1,717 )
------------ ------------ ------------ ------------
Net cash provided by
operating activities 55,514 44,257 187,834 173,869
------------ ------------ ------------ ------------
Cash Flows from Investing
Activities:
Additions to property,
plant, and equipment (69,895 ) (34,764 ) (192,949 ) (135,700 )
Additions to mineral
properties
and development
costs (16,479 ) (634 ) (53,457 ) (1,414 )
Proceeds from
insurance settlements
from property and
business losses - - - 806
Purchases of
investments (2,034 ) (23,671 ) (85,359 ) (102,031 )
Proceeds from
investments 68,084 20,758 161,580 63,537
Other - - 2 -
------------ ------------ ------------ ------------
Net cash used in
investing activities (20,324 ) (38,311 ) (170,183 ) (174,802 )
------------ ------------ ------------ ------------
Cash Flows from Financing
Activities:
Cash paid for common
stock dividend (56,474 ) - (56,474 ) -
Debt issuance costs (80 ) - (141 ) (1,454 )
Employee tax
withholding paid for
restricted stock
upon vesting (132 ) (40 ) (878 ) (1,117 )
Excess income tax
benefit from
stock-based
compensation - (21 ) 55 413
Proceeds from exercise
of stock options - - 34 330
------------ ------------ ------------ ------------
Net cash used in
financing activities (56,686 ) (61 ) (57,404 ) (1,828 )
------------ ------------ ------------ ------------
Net Change in Cash and
Cash Equivalents (21,496 ) 5,885 (39,753 ) (2,761 )
Cash and Cash
Equivalents, beginning of
period 55,115 67,487 73,372 76,133
------------ ------------ ------------ ------------
Cash and Cash
Equivalents, end of
period $ 33,619 $ 73,372 $ 33,619 $ 73,372
------------ ------------ ------------ ------------
Supplemental disclosure
of cash flow information
Net cash paid during the
period for:
Interest, including
settlements on
derivatives $ 484 $ 183 $ 1,840 $ 1,348
------------ ------------ ------------ ------------
Income taxes $ 7,217 $ 895 $ 8,379 $ 13,878
------------ ------------ ------------ ------------
Accrued purchases for
property, plant, and
equipment, and mineral
properties and
development costs $ 23,963 $ 17,350 $ 23,963 $ 17,350
------------ ------------ ------------ ------------
INTREPID POTASH, INC.
UNAUDITED NON-GAAP ADJUSTED NET INCOME AND
ADJUSTED NET INCOME PER DILUTED SHARE RECONCILIATIONS
FOR THE THREE AND TWELVE MONTHS ENDED DECEMBER 31, 2012 AND 2011
(In thousands)
Adjusted net income and adjusted net income per diluted share are non-GAAP
financial measures that are calculated as net income or earnings per diluted
share adjusted for certain items that impact comparability of results from
period to period including, among other items, insurance settlements from
property and business losses, a portion of the income associated with the
refundable employment-related credits from the State of New Mexico, non-cash
unrealized gains or losses associated with derivative adjustments, and the
effect of changes to Intrepid's state income tax rates on the value of its net
deferred tax asset. Management believes that the presentation of adjusted net
income and adjusted net income per diluted share provides useful additional
information to investors for analysis of Intrepid's fundamental business on a
recurring basis. In addition, management believes that the concept of adjusted
net income and adjusted net income per diluted share are 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.
Adjusted net income and adjusted net income per diluted share should not be
considered in isolation or as a substitute for net income or earnings per
diluted share, income from operations, cash provided by operating activities or
other income, profitability, cash flow, or liquidity measures prepared under
U.S. GAAP. Because adjusted net income and adjusted net income per diluted
share exclude some but not all items that affect net income and may vary among
companies, the adjusted net income and adjusted net income per diluted share
amounts presented may not be comparable to similarly titled measures of other
companies. The following are reconciliations of adjusted net income to net
income and adjusted net income per diluted share to earnings per diluted share,
respectively, which are the most directly comparable U.S. GAAP measures:
ADJUSTED NET INCOME:
Three Months Ended
December 31, Year Ended December 31,
------------------------- -------------------------
2012 2011 2012 2011
------------ ------------ ------------ ------------
Net Income $ 14,537 $ 24,917 $ 87,443 $ 109,411
Adjustments
Insurance settlements
income from
property and business
losses - - - (12,500 )
Income associated with
New Mexico refundable
employment related
credit** - - - (7,922 )
Unrealized derivative
gain (280 ) (376 ) (1,049 ) (1,289 )
Other 60 3 568 698
Calculated income tax
effect* 78 148 170 8,342
Change in blended
state tax rate
to value deferred
income tax asset 5,271 (3,699 ) 981 (3,699 )
------------ ------------ ------------ ------------
Total adjustments 5,129 (3,924 ) 670 (16,370 )
------------ ------------ ------------ ------------
Adjusted Net Income $ 19,666 $ 20,993 $ 88,113 $ 93,041
------------ ------------ ------------ ------------
* Estimated annual effective tax rate of 35.4% for 2012 and 39.7% for 2011.
** Included in "Other operating
(income) loss" line item.
ADJUSTED NET INCOME PER DILUTED SHARE:
Three Months Ended Year Ended December
December 31, 31,
--------------------- --------------------
2012 2011 2012 2011
---------- ---------- ---------- ---------
Earnings Per Diluted Share 0.19 0.33 1.16 1.45
Adjustments
Insurance settlements income
from
property and business losses - - - (0.17 )
Income associated with
New Mexico refundable
employment-related credit - - - (0.11 )
Unrealized derivative gain - - (0.01 ) (0.02 )
Other - - 0.01 0.01
Calculated income tax effect - - - 0.11
Change in blended state tax rate
to value deferred income tax
asset 0.07 (0.05 ) 0.01 (0.05 )
---------- ---------- ---------- ---------
Total adjustments 0.07 (0.05 ) 0.01 (0.23 )
---------- ---------- ---------- ---------
Adjusted Net Income Per Diluted
Share $ 0.26 $ 0.28 $ 1.17 $ 1.22
---------- ---------- ---------- ---------
INTREPID POTASH, INC.
UNAUDITED NON-GAAP ADJUSTED EBITDA RECONCILIATIONS
FOR THE THREE AND TWELVE MONTHS ENDED DECEMBER 31, 2012 AND 2011
(In thousands)
Adjusted earnings before interest, taxes, depreciation, and amortization (or
adjusted EBITDA) is a non-GAAP financial measure that is calculated as net
income adjusted for the add back of interest expense (including derivatives),
income tax expense, depreciation, depletion, and amortization, and asset
retirement obligation accretion. Management believes that the presentation of
adjusted EBITDA assists investors and analysts in comparing Intrepid's
performance across reporting periods on a consistent basis by excluding items
that management does not believe are indicative of the Company's core operating
performance. Intrepid uses adjusted EBITDA as one of the tools to evaluate the
effectiveness of its business strategies. In addition, adjusted 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.
Adjusted EBITDA should not be considered in isolation or as a substitute for
performance or liquidity measures calculated in accordance with U.S. GAAP.
Because adjusted EBITDA excludes some but not all items that affect net income
and net cash provided by operating activities and may vary among companies, the
adjusted EBITDA amounts presented may not be comparable to similarly titled
measures of other companies. The following is a reconciliation of adjusted
EBITDA to net income, which is the most directly comparable U.S. GAAP measure:
Three Months Ended
December 31, Year Ended December 31,
------------------------- --------------------------
2012 2011 2012 2011
------------ ------------ ------------- ------------
Net Income $ 14,537 $ 24,917 $ 87,443 $ 109,411
Interest expense,
including realized and
unrealized derivative
gains and losses 216 192 905 869
Income tax expense 13,874 10,384 49,484 65,850
Depreciation, depletion,
amortization, and
accretion 12,872 9,744 47,599 35,787
------------ ------------ ------------- ------------
Total adjustments 26,962 20,320 97,988 102,506
------------ ------------ ------------- ------------
Adjusted Earnings Before
Interest, Taxes,
Depreciation,
and Amortization $ 41,499 $ 45,237 $ 185,431 $ 211,917
------------ ------------ ------------- ------------
Contact:
Gary Kohn, Investor Relations
Phone: 303-996-3024
Email: gary.kohn@intrepidpotash.com
This announcement is distributed by Thomson Reuters on behalf of
Thomson Reuters clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: Intrepid Potash Inc via Thomson Reuters ONE
[HUG#1677267]
Unternehmen: Intrepid Potash Inc - ISIN: US46121Y1029
