Intrepid Potash, Inc. (NYSE:IPI) announced 2011 fourth quarter and full year financial results today, with quarterly net income of $24.9 million and $0.33 of earnings per diluted share and annual net income of $109.4 million and $1.45 per diluted share. Adjusted earnings before interest, taxes, depreciation, and amortization (Adjusted EBITDA
) for the fourth quarter of 2011 were $45.2 million. For the year, adjusted EBITDA was $211.9 million with a year-over-year improvement in cash operating costs of good sold.
“The tangible steps we are taking to increase our production, to lower per ton costs and to grow the company are being realized with each successive quarter. We are succeeding as an organization through our project execution, delivering on capital projects and working diligently to exceed our project performance expectations. Our fourth quarter results were strong which helped to round out an extremely profitable year and are a product of our successful investments in the business and our people. As we prepare to enter the spring application season, we are optimistic, based on favorable crop economics and planting intentions, that domestic demand for potash should be quite healthy and that we will continue to build upon the accomplishments of this past year,” said Bob Jornayvaz, Intrepid's Executive Chairman of the Board.
Mr. Jornayvaz continued, “in the fourth quarter, we achieved several important milestones in our long-term capital investment plan. We completed construction and started commissioning of the Dense Media Separation (“DMS”) component of our new langbeinite plant in Carlsbad, New Mexico, a technically complex project that is already demonstrating that it will significantly increase our production of Trio
. We also moved forward our granulation plans with significant progress made on the new granulation component of the langbeinite production plant and the completion of construction of our new compactor at our Wendover facility. The execution of these two large projects exhibits the core technical ability and competency we have developed to design, build, and complete complex capital projects that increase the value of our Company. Our confidence in the long-term fundamentals of the domestic potassium nutrient market remains unwavering and we will continue to invest in and efficiently execute on capital projects designed to increase production of incrementally lower cost tons while increasing our marketing flexibility.”
Fourth Quarter 2011 Highlights:
- Capital investment in the fourth quarter of 2011 totaled approximately $38.1 million.
- As of December 31, 2011, Intrepid had $176.8 million of cash, cash equivalents, and investments; no outstanding debt; and $250.0 million available under the company's unsecured revolving credit facility.
- Average net realized sales price 2 for potash was $497 per ton ($548 per metric tonne) in the fourth quarter of 2011, compared to $386 per ton ($425 per metric tonne) in the fourth quarter of 2010 and $489 per ton ($539 per metric tonne) in the third quarter of 2011.
- Average net realized sales price for Trio ® was $287 per ton ($316 per metric tonne) in the fourth quarter of 2011. This compares to $222 per ton ($245 per metric tonne) in the fourth quarter of 2010 and $251 per ton ($277 per metric tonne) in the third quarter of 2011.
- Potash sales in the fourth quarter of 2011 were 183,000 tons as compared to 216,000 tons in the same period of 2010.
- Sales of langbeinite, which we market as Trio ®, were 28,000 tons in the fourth quarter of 2011 compared to 27,000 tons in the same period a year ago.
- Potash production in the fourth quarter of 2011 was 197,000 tons compared to 224,000 tons in the same period a year ago.
- Langbeinite production was 31,000 tons in both the fourth quarter of 2011 and 2010.
- Cash operating cost of goods sold, net of by-product credits 3, for potash was $194 per ton in the fourth quarter of 2011. This compares to $166 per ton in the fourth quarter of 2010.
- Average gross margin in the fourth quarter of 2011 for the sale of potash was $230 per ton or 46 percent, compared to $169 per ton or 44 percent in the fourth quarter of 2010. Average gross margin for the sale of Trio ® was $42 per ton or 15 percent compared to $38 per ton or 17 percent in the same period of 2010.
Mr. Jornayvaz stated further “despite the demand deferral that we saw in the fourth quarter, our sales team was able to capitalize on the available opportunities because of our strong customer relationships. Our capital investment plans remain ambitious and we are confident, based on our track record, that we will continue to efficiently execute on these projects and thereby enhance our capacity to grow our production and to serve our customers. We firmly believe that, as spring moves closer, the farmer will not be asking if he should apply potash but how much to maximize his yield and take advantage of strong commodity prices and low grain inventories.”