Intrepid Potash, Inc. (NYSE:IPI) announced today first quarter 2011 financial results, with net income for the first quarter of $28.3 million, resulting in $0.38 of earnings per diluted share, which included the recognition of $0.10 per diluted share of income, net of tax, associated with deferred insurance proceeds. Adjusted earnings before interest, taxes, depreciation, and amortization (Adjusted EBITDA 1) for the first quarter of 2011 were $55.8 million.
“During the first quarter of 2011, our solid performance was influenced by the strong domestic markets for a variety of crops and the start of the spring planting season,” said Bob Jornayvaz, Intrepid’s Executive Chairman of the Board. “In the first quarter of 2011, the potash market reflected a level of demand that was more consistent with historical demand trends prior to 2008. With fall harvest completed, producers had the ability to get caught up on outstanding orders and to produce product for the spring sales season. Further, tightening crop inventories and an encouraging prospective plantings report from the USDA support our estimates that nutrient demand will be at normal levels for this planting season and into the fall. Farmer economics in the United States remain robust by historical standards and we believe that farmers will make every effort to maximize yield and profitability during the 2011 growing season through balanced fertilization.”
First Quarter 2011 Highlights:
- Potash sales in the first quarter of 2011 were 196,000 tons as compared to 243,000 tons sold in the same period of 2010.
- Potash production increased 36 percent in the first quarter of 2011 to 234,000 tons compared to 172,000 tons produced in the first quarter of 2010.
- Average net realized sales price 2 for potash was $442 per ton ($487 per metric tonne) in the first quarter of 2011, compared to $354 per ton ($390 per metric tonne) in the first quarter of 2010 and $386 per ton ($425 per metric tonne) in the fourth quarter of 2010.
- Cash operating cost of goods sold, net of by-product credits 3, for potash was $166 per ton in the first quarter of 2011. This compares to $199 per ton in the first quarter of 2010 and $166 per ton in the fourth quarter of 2010.
- Sales of langbeinite, which we market as Trio ®, were 52,000 tons in the first quarter of 2011 compared to 70,000 tons in the first quarter of 2010.
- Langbeinite production in the first quarter of 2011 decreased to 31,000 tons from 57,000 tons produced in the first quarter of 2010.
- Average net realized sales price for Trio ® was $204 per ton ($225 per metric tonne) in the first quarter of 2011. This compares to $167 per ton ($184 per metric tonne) in the first quarter of 2010 and $222 per ton ($245 per metric tonne) in the fourth quarter of 2010.
- Average gross margin in the first quarter of 2011 for the sale of potash was $218 per ton or 49 percent, compared to $109 per ton or 31 percent in the first quarter of 2010. Average gross margin for the sale of Trio ® was a loss of $3 per ton or negative one percent compared to $14 per ton or eight percent in the same period of 2010.
- Capital investment in the first quarter of 2011 totaled approximately $26.9 million.
- As of March 31, 2011, we had $142.3 million of cash and investments, no outstanding debt, and $125.0 million of availability under our revolving credit facility.
Intrepid’s location advantage once again served to bolster its first quarter results. “While product demand was certainly good during the first quarter of 2011, the strength of our local truck market during the quarter helped us to once again achieve the best average net realized sales price among our North American peers. The flexibility we have added to our operations, through the initial steps of increasing compaction capacity, and our ability to market our products in a more strategic manner has helped us reach this position in the market,” said Mr. Jornayvaz. “Our strategic marketing and enhanced production flexibility support our planned capital investments to increase our granulation capability at both our Carlsbad and Wendover operations.”
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