Intrepid Potash (IPI) 30 Oct 182018 Q3 Earnings call transcript

Company Profile

Participants

Matthew Preston	IR
Robert Jornayvaz	Co-Founder, Executive Chairman, President and CEO
Joseph Montoya	VP, CAO
Mark McDonald	VP of Sales and Marketing
Alex Wagner	VP of Business Development, Oilfield Services
Mark Connelly	Stephens Inc.
Joel Jackson	BMO Capital Markets
Christopher Perrella	Bloomberg Intelligence
Josh Spector	UBS
Jason Ursaner	Bumbershoot Holdings
Deforest Hinman	Walthausen
John Evans	SG Capital

Call transcript

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Operator

Thank you for standing by. This is the conference operator. Welcome to the Intrepid Potash, Inc.

Third Quarter 2018 Earnings Conference Call. [Operator Instructions] I would now like to turn the conference over to Matt Preston, Investor Relations. ahead. go Please

Matthew Preston

a are morning, parts Good statements everyone. based them. remind based These believe assume I are of assumptions the defined future no Thank and we information our and discussion that statements laws. securities of available the forward-looking obligation performance are on guarantees which today These you of by you. U.S. update reasonable. welcome, and number are not today, to will statements as on we to include us

find more future can the reports information You uncertainties about to performance filed risks our SEC. periodic and in our with

included today's measures. this release. refer Reconciliations During to morning's to operational non-GAAP these financial are financial measures and comparable will in we of directly the press certain call, most non-GAAP measures GAAP

are CEO; and President our Vice Bob for to now remarks. Joseph questions are available our filings call as Development, the on and I'll is website Jornayvaz, President Presenting our Chief SEC today Services Officer. Vice call new press President the at and joins the after Chairman, on also of Oilfield Mark President intrepidpotash.com. call available Our of McDonald, Accounting Vice today and Montoya, Co-Founder, Executive Wagner, our prepared us Alex well. our Bob. on Marketing, turn over Sales and releases Business

Robert Jornayvaz

third operating a Thank higher Trio to healthy you, morning Matt, and quarter generation flow cash highlighted by solid across good We delivered everyone. and pricing the and potash business.

create to product Intrepid with strong meaningful strong diversified of thrive competitive and grow available as across performance byproducts The resources from assets also and increasingly all progress results helping to portfolio more and we diversifying is and strong by combined business and continue in work our to service long-term. We to utilize as a make evidenced the water. our

recent continue to average full XX% the to quarter During realized sales continued year. strengthen increase the will that anticipate quarter, into first price net the XXXX, XXXX per balance compared effect the potash year. of of pricing the ton We up to in quarter and $XX last next most price increase beginning through third third of with in

for In all summer enter which harvest in best included well left prospect. for after This turn season, production which as facilities mode current second our Trio ever X% compared of of undervalued key benefit selling the net from to season on are this prices. price components. fertilizers addition, carry the our higher more domestic ample we strong and nutrient there's tons now evaporation as sales still us evaporation markets in pricing ponds North Trio support view quarter for increases which a the a in it back seasoning spring we solar as up ahead makes are position to fall. other has expected our and typically from realized Prices believe third its year available of to we We focused American

which international our become markets choose to into. selective of We markets a focus a strategy price continue international as on and volume sell have increasingly in we to

record million. $XX.X quarter year-to-date water Our was received for a this water solid $X.X cash the cash again business total bringing to in received yielding million

received XXXX. for result, strong in a expect to we a and to million million look now As $XX this $XX cash forward water year

offsets total XX% sales. cost a of delivered third for of quarters by-product record also We quarter which sales

increasing magnesium success and healthy water was highlighted this of as as by chloride quarter well Our brine. sales, sales

total a businesses. entire install cost a more services positive for the our continue business. month the - rate momentum quarter delivered now initial generating brine We is at than We sales for a is record $XXX,XXX to to which brine's oilfield revenue capital see which entire of

jobs oilfield Vice production the in past few services completed particularly which technologies. positive and includes hope our to Alex's and experience have Alex the a services Alex continue systems Development, new this the by on of disposal Services. activities, higher and in in background completion formations also seen significantly frac as our fourth and months opportunities, through we initial of organic growth clay on accelerate saltwater multiple well leadership sales fracing, mixing dedicated experience and a Welcome well to structure and a market in grow trucking KCl quarter. to significant team leadership in earlier for enhancing focus as fracs, it high-speed in M&A handling with and potential bolt-on We as value its educate impacts especially Business Wagner, synergistic growth position to also turn more treatment in Alex, drilling Oilfield as brief with also and the I'll announced the we President We're invest centralized through brings month, continuing books midstream we that headed for usage production water him and and will lean introduction. over well both him to on acquisitions.

Alex Wagner

the other position Thank streams XX-years and these set services. my the to potential the with building which revenue Intrepid's producer forward products services upon with look and role. my industry. gas diverse team's oilfield experience am and oil have Southeast of differentiates about in provide Bob. of offers its I combined from you, touch the successes U.S. new as providers I seen of of Mexico, excited as as point in grow to Intrepid only in Utah and potash a locations and New a unique it

Robert Jornayvaz

you, again to Alex, once and Thank the welcome team.

by full technology as of production. We lithium progress and I of comments, Wendover. on remain received significantly method up iron exchange my Before the a commercially scale wrap update the a potential encouraged testing viable quick the bench report of our and

verify lithium including Our next to potential step is in a Wendover. of our our pilot for modest options the evaluate methodically further the reserve plant to potential

to and the us essential progress. sheet, the minerals. that outlook. positioned Joseph work continue balance I’ll updating and plan for head we In our our forward our we over the and diversify discuss we've upon XXXX, capitalize done turn fertilizers, to we business have As foundation look well line, on lower have results XXXX, our to you who into financial strengthen diversified and now to solid for on market costs build laid production to other to will product our our call strengthening

Joseph Montoya

Thank you, Bob, and good morning everyone.

During of quarter increased delivery per $X.X and the third we water Trio driven income on largely and and net million $X.XX by or potash of generated share solid diluted brine. by-products, pricing

years in gross the and during million $X.X by-products quarter generated potash to sales reported third compared Potash slight price the gross segment That's we sales. in two offsetting higher last potash margin when more since of volume than margin the quarter. segment highest gross became ago. increases a a margin year year-over-year drove a we Our decline

production these more back online look benefit the potash harvest the facilities us in enter September from August yield to and came than processing. to in Our setting Accordingly, early XXXX. up strong will solar evaporation the we potash capitalize and higher on prior-year in solar facilities tons improvements we anticipate in season, for pricing XXXX-XXXX and year to production as

the prices. in improvement million third volumes as sales in $X.X primarily of were quarter during QX yielded gross XXXX. of was were sales. geographies as $X.X higher increase on close deficit million a to the from result the year Trio Trio X,XXX Our from results second this lower realized quarter vast compared intentionally of with These this we due last focused segment gross sales pricing the net breakeven fuel the tons with quarter down year to quarter predominantly this breakeven third deficit near and of the segment international

increase announced order may international sales Looking improve Overall, our also we markets continued established X, broad extent will the pricing ahead, sell Trio be in we and expected to and we realized to domestically. net fluctuate early QX sales as domestic is to October price to prices we price. expect build improvement to effective The XXXX manage November for that relationships upon realized inventories. average continue in our it to

driven carriers potash increasing freight impacted full prices the higher results near capacity. at were fuel by both For segments, Trio by and rate our operating and

impacted trucking heavily shortages, operating had Although have but service not we disruptions. labor have others have by we any meaningful cost seen geographies similar increases been

delivered recorded million of sales our we from $XXX,XXX $XX.X quarter, in water $X.X in million additional sales deliveries to an third to by-product. water received year-to-date cash brings and the and This water as During $XX.X water million.

to As cash contract in million Bob year mentioned, $XX this Exiting cash million. future be deliveries. million we representing quarter the water for received $XX water to now expect water received for $X.X to had liabilities we relating

was expense as than quarter ago compared to SG&A higher year Third this year second quarter but of third the the expected. year down

nine-month timing we period. and reinstatement of last the of As quarter, for year-over-year equity discussed program increase bonus the the grants drove this the

$XX to continue approximately year SG&A We expect million. be million full expense $XX to our to

the remained rates Our and of on our liquidity this million to amended facility. cash maturity first our increased our months month, by balance hand, million Earlier quarter position outstanding position. the $XX year-end to questions. million. cash We the prepared and reduce facility, and remarks to notes the take prepayment $XX facility XXXX we're year, interest a its to and we October continued our increase to the that well-positioned year pay ending strong having to by nine capacity credit senior on the and with borrowing to in balance extend credit strong no liquidity million exiting scheduled available from using our $XX on concludes remain Operator, anticipate the $XX ready during

Operator

from Instructions] Our Please comes question first Mark go Connelly [Operator Stephens ahead. Inc. with

Mark Connelly

which substantially that inventory in levels questions. you've keeping about are you you two produced think Once happened of and you than again and last couple Trio what the more of do Couple a has need the where years. you How times inventory? actually sold

Robert Jornayvaz

with relationships foremost its seeing it buy they But factor willing and market it’s and satisfactory a solid more I guys. more foundation polyhalite and to you've and see right that historical last a look have. as at Key seen Trio is in moving competitive much to any of plenty the is competition more first two various from perspective. warehouse it recovering not we’re followed clearly definitely We're our upward clearly at the in we been arena. mine we've price announced seeing Well as market a keep sites of that the continue have increases and think to because we an room we got people

XX to last changes that told to buying the months buy decreases might months that So production while they're down, cause the significant previous the over being go because not occurred price habits. people the XX it price

increase changed orders. seeing the and October, opportunity, so generates that a price up seeing if the we’re in will And once last we you rapidly it in pretty we’re as just our announced sentiment followed was market

sentiment trending market versus trending a upward in changed So downward markets we’re just and the an very differently seeing move market.

very a So we we're market. the strength strength, by encouraged we as continue the to this opportunistic and see see

Mark Connelly

the for is it more there operation, looks we next One thinking if cost your were or side. that made look extremely we be like especially business the there this about estimate in but potash thinking cost that terms be question, results we obviously about of in some anything Is on potash strong might those by-product better should costs have should than was it quarter quarter? seasonally standalone

Joseph Montoya

This is think question. for don’t thanks I the Mark, necessarily. Joseph

as to continue as by-products, We our to core relative our production. produce good results well

so costs early fall what speed evaporation as generally in in And you higher while and into generally spring lower you season, expect. we that's and go the

I also bit guess shutdown should the at beginning QX of of cyclicality beginning at but there of the a the volumes little because of were call the close evaporation low in I QX. So

but So, more normal the cyclicality. than nothing

Operator

Capital comes Please Our Joel question go ahead. BMO Jackson Markets. with next from

Joel Jackson

where Don, season a trending year-over-year give production for for bit have little you and how better much next and expecting of idea probably more be? us evaporation so good you're quarters maybe an of it better could handicap help can maybe XXXX us couple with

Mark McDonald

going We get. reluctant New the you that good October a reluctant causing the have work decent little just production Mexico think had may evap have going believe in therefore our also in we’re to season more in QX ponds the terms to that season for than in early if the in of we put in have I shifted guess bit of on and number numbers monsoon will. strong I'm Joel, a still But because into usually facilities QX process to kind We’ve of uncertainty do weather. rain we it. but

Robert Jornayvaz

and have Joel day, end years. you've and a season the the a the spring. At strong us plenty you we of an and had been to for know strong tons ponds. evaporation quarters evaporation season very following strong into We that next puts of extremely several a look upcoming as you forward set When strong of

Joel Jackson

looks mean it next Don, water, around of X we And different in Bob. that think trending some I sort of of get all I all for quarter going charge million like different How couple see to are like. about thanks in mean - Don a And while the numbers we’re to at your quarters water trying gave? together. sales, with a you data next pieces a step-up point are the should we

Mark McDonald

Well that is you we I and to the going as schedules. the believe things the frac the accounting to would we’ve to say look it’s at said changing trajectory working be for various that difficult piece upward trend, upward continues it modeling But on. repeatedly, continue be reason to given if an going water overall and to have we’re every given

clearer at water of some you it's do clearer. that become when more own discussed, see gets sure segment that point. color to as an that turn attempt will its And not but good runway to has as for versus around can significant both, received happen we We're into numbers runway And area as clear XXXX. it may that a model reporting and water those so try our we that sales parts much strong us if so actual a runway and I water give lot for various cash in system we've believe but

Joseph Montoya

billions They the continue, to is billions schedules is the they’re Joel, to there. in billions we prior topic and volatility the also dollars that are we and of just billions quarters just discussed also and of dollars. because oil that investing of and operate, need I know agree put and reluctant going believe industry that volatility the to for in that of the numbers would the gas the of their investing I’ll water we but that so come relative out areas to with in which going we’re certainly add we've

Joel Jackson

quarters and the what in is here? pilot year of of What produce I pilot running looking the hydroxide to you purpose the would is at or lithium that coming build only you next said it you're next Now plant think going to carbonate, up. kind be plant scale

Robert Jornayvaz

knows think be resources. do I Joel - if you on about than more I Well anyone lithium lithium

is the part first results the good. test So bench really look

clearly lean different might We we to the we more carbonate if We know good to think we referred a - plant. is a a as I as just have pilot that modest, will. towards plant structure pretty you it's much you reserve of opportunities there. there how lot

the as So just we folks, update update continue we’re process. to going to continue on

companies commercially working good especially you the technologies, are know for of news evolving over America The continue that new the look South are As we technologies there out evolving you and if see on world at in opportunity here. the there's technology some is viable to that production. companies is all trying

just move we're So updating to we going as keep forward.

Joel Jackson

debt. got You’ve a build where got keeping you’ve the point on on mean - now lot hit you up, cash I the of

the of had difficulty ago years you I do… a couple over mean out some to be seem what turn the You of

Robert Jornayvaz

are. definitely We’re

Joel Jackson

you next? do to want do What

Robert Jornayvaz

pretty our we’re Well clear expand water and we’re I to going sales. think

to on our We’re reducing Trio and continue our going potash cost segment.

oil continue and to diversify opportunity that our mixing. high midstream going synergistic services base and We’re are clearly with to speed KCl field

I a laid segment part So out that think cover. that didn’t clearly I we've is pretty it there

Joel Jackson

some back doing the point to sort in to keep see as just trying I’m allocation you your something buy else stock, of you want where or that generating comfortable feel you if get cash? No, you cap

Robert Jornayvaz

And generate every by and evidenced board we That's our opportunities continue great result. continue great to with capital a we our structure to evaluate question meeting. as

in at looking a is there tools all mixture the toolbox. So the of

Operator

ahead. Intelligence. comes go Please Christopher question with Perrella Bloomberg from next Our

Christopher Perrella

you guys, you taking call. to Trio Thank are Question when way you sales the that the quarter? that on to return do profitability. in business can Is that the the with spring expect or for hit fourth going XXXX

Robert Jornayvaz

great a question. That's

going and the is that has Let’s reversed positives and stopped up. look is at price that now down and going the back

as continue as segment so on cost quarter-over-quarter increases, as by and and as well indicated reduction, leading that we market to cost that on market improve year-over-year to containment And continues the or work results. price

so continue same And to expect path. we the

in, So the but to an that's right occur exactly direction the with tell obviously upward quarter can't in I which going is you trajectory. trend

what so focused. And we're that's

Christopher Perrella

we sort water the should that XXXX some the cash collection on of the of for forward? base of generation cash, that or think takes water Question are going there as and share would move business around puts cash

Robert Jornayvaz

and feel we of grow a of on lot I will, if expect We As bringing that I you business. Alex have our - just runway connections given the working to a like earlier, that said clear agreements room we're we the segment on. strong

differentiating of understand and articulate those your sales, I the think time and terms I part guess question. last don't we're differences trying why reporting lot cash In a I between we've of of spent both. to

Christopher Perrella

question I any would to year risks is, guess cash from that the year? lower next - the this versus to that that generation is being business anything water there are there

Robert Jornayvaz

opportunity I got and totally the - There's mean always gas the could business have we risk. you've crater. oil

And so and an obviously crater could high could see prices if that to down back and gas into impact. then go $XXs, oil totally business have yes the were we the

neighborhood, in of oil the giving high the discussions industry if the oil, anyone our operators XXXX, $XXs, are we're talking in talking with about So the budgets capital in high commerciality various we that $XX wells our to don't $XXs, in gas our reduced see and stays neighborhoods.

if have world a question answering I've yet I'm doesn't but commodity your don't commodity to the I risks. find know in So that

Christopher Perrella

politics your base keep exposure in out business the the coming other over states? Colorado, initiative of New much Trying of each from ballot what's the and and is with that in how much that but of how water of then from to And Mexico on Colorado? is coming it

Robert Jornayvaz

we're any that selling the Mexico our don't Zero or where in water Colorado. water state Colorado. of in In New are. We exposure sales producing marketing, that's have

politically. that given question And so any we in the guess risk Mexico? New ballot your the don't elections initiatives see is I Colorado versus in

Christopher Perrella

Yes.

Mexico, some Colorado. New sales to potash then all in and have Mexico New water sales you oilfield customers in the

Robert Jornayvaz

more Colorado, Wyoming, Wyoming, a and Basin, Montana, Basin Utah, We've Uintah the Niobrara the do Powder correct. up that's minimal into in we Basin into Well, the in have the lot Piceance DJ got Colorado. so the sales River KCL Basin. going

very I But and So I on can't Colorado color ballot which you the a have more initiative. give lot exposure why. we think to basins little

Joseph Montoya

kind reminder, our right Chris, New back And basins now. Carlsbad question in is bigger just your is the in industry one part the of facility which of original Basin, Basin, a of most the Permian Southeast prolific of the Mexico, to part Delaware

our Bob around and facility. just our area So Colorado mentioned and in that to it minimal service continues exposure as where to Carlsbad

Christopher Perrella

just then. clarifying comment And one

So generation should sales? the commodity assuming swing from prices, oil major cash be much no pretty in water staying course

Robert Jornayvaz

Yes, and hopefully growing.

Operator

UBS. with go Our question ahead. Please from Spector comes next Josh

Josh Spector

another curios, I to XXs, apologize around margins here gross is related I quarter? you looking there about when for mid I segment XX%. else mean the something that I'm was quarter I the is in there were year. just should that water one that they or I believe remove at the just this on isn't in of at number first-half margins guys in I'm something the for the but was talked looking costs relative the we missing water other

Joseph Montoya

of couple things. Well, a it's

quarter frac in had prepared more we've period prior. remarks, mentioned than jobs we Bob in had As this any the

There we to kind it of related there's additional recur. that were water So of delivery expect some to to costs piece related don't onetime that. a

the basis you our continue ask QX, modeling pretty margin on would to and on high we business So similar water looking a that QX.

Josh Spector

expect fourth for higher make like would is just fourth any quarter, in up And quarter? that or normal you there

Joseph Montoya

fourth it to would return in the to we expect normal No, quarter.

Josh Spector

Trio. on one then And

the how onetime In with costs increase is much the in would terms items of for much the with base higher say transportation delays and of that case how you quarter, just pricing? related was XQ

Joseph Montoya

increased probably in QX specific I don't know one-offs just freight. speaking I pricing. it's generally regular tough a are relative that That’s one, there say would to any

Robert Jornayvaz

add - anything is color if to you that? any want Mark to mean I there there significant wasn't

Mark McDonald

was into area I Georgia up one some of the the rail. coast the of think east shipping goes area. that events saw our we mentioned that weather by related that piece was the Goodly on through and part

there's So related some related going expenses be the increase. to to freight

Robert Jornayvaz

two The hurricanes?

Mark McDonald

Correct.

Operator

from ahead. Jason Bumbershoot Our next go Please Ursaner comes question with Holdings.

Jason Ursaner

MLP got questions just you the on on some production. First the business on following-up of

of ever more a tons You Carlsbad mentioned Joseph, best forward. of year, reluctant because available estimate then at you and evaporation going to the weather season were next with kind production figure

if not grades you down ping on you've I'm the evaporation of So seen me to do weather if given that? ponds like order and yes guess overall something the type would guess to you on variance norm were XXX or rain, is within three number strong stay, the what it is so XXX,XXX get I larger far but substantially versus could a of variance asking historical tons the it from something get I be a the than what's downside

Robert Jornayvaz

we've I variability. tried cost to would with, offset the guess explain to always is through evaporation I start lower weather

give you know we've so build of be events. a concept the is in be good season feel run for should kind as right have as and better that it to so to first significant and given XX% ramp rate can lack much our high tried as XX% we how very continue the appears going into term And the evaporation ponds news now. very, you potash will the to when spring But of always is the and as very into is comfortable that we that variability if in what we strong actually quarter a you up be

Jason Ursaner

some I you're the fluids drill mixing of and answered the activity. doing one it you questions the of in got and that oilfield then Permian on related. previous the think brine water the that there's are just sense versus KCl fresh but both into in because the just with And initiatives services in selling pure gas confusion and I kind activity oil the

How that's Moab much activity Carlsbad that coming potash. of versus from in So lowering net Wendover. the is backs oil field the service

Powder River much cetera. pure the a oilfield the into basin you going do how piece and just Mallory et shell services overlap And see between mentioned the versus You piece? freshwater

Robert Jornayvaz

the good on build because Rockies the news freshwater built and equipment the to we use designed own ourselves we have high-speed as using the put our mixing is we’re piece the started Moab and a out facility then we the Rocky equipment our into relationships that Well pending really built in and in at Mountains. on patents with and

us able So our mixing geographic high-speed and our our of we’ve been on to help and staff Wendover truck the to execute and work synergies use facility the that the our fleet in Moab locations. the Rockies because with facility exist

questions the Moab equipment our of facility seeing We’re Carlsbad we’re and Wendover. grow the intend did additional that to out business as of out same we same that sales way so we coming and building in calls pieces at

So oil their our with in business growth touch many the ever we so water we or of and gas when the just teams. part points completion you see increasing it's and their and folks and will include whether teams, procurement the that in and more have drilling now teams touch-points, industry the exploration

sales that continue. you have the part So of an them touch-points contacts for the and you their and businesses more more become integral that offerings

don’t gives you or clarity. I any that if it more know So answers

Jason Ursaner

mean which either on cost deliver or continue type on No over guess years. side the opportunity I don't to of revenue the can order I is? you cost this think the down guys phenomenal cash I is about what looks And talk but on something the appreciate really were side pretty much next quarter couple to you details. the below it $XX of too it do that as like you a know I ton

Robert Jornayvaz

a everything grow - on product that just we’re opportunity where so has grow. to have think our I to and we’re revenues strong in the feel we visibility working we Well position

The revenues good clicking mag basis. very a of is now to and stronger we’re clearly quarter-over-quarter Our dedicated much stream. comprehensive Trio grow our have a opportunities strategy an for oilfield on water is a income humming and to additions you product we of have a services runway, to our growing opportunities. chloride make strong person, the to a salt ability Everyone and those lines our made line that much, are grow, set these visibility now has results various sales in quarter-over-quarter not showing diversified

Joseph Montoya

I the the all So execute efforts cost the the elements the would side business. to as core Bob from exercise continue to touched projects guess for we continue income. of we that I well on in on to add

you of sales reduction we’re a lot but that As also it continue do the do has their good part cost of to that to know curtailment our we has credits taking on. with work with projects cost by-product to

Jason Ursaner

guess there a E&P to you a to is bit to the opportunity for I next walls out major freshwater ask kind go guess in in of little got Northern And coming about drilling you been see And I that’s guess just year contract water. and a news test lot versus I very view growth. going into specifically kind that other year on long-term base in Delaware of your area. procurement do What of is

something for see agreement another you taking it to what customer. Just the you with have similar commit customer major to the first to

Joseph Montoya

we and very of strong it's to only not before got explained a well-financed multiple well-capitalized work the our water revenue set sources as diversifying diverse customer continue said base. from customer a water. clear and base on possibility I I runway we guess of we've

XXXX/XXXX covers Our miles. water footprint square about

drill area the thousands outstanding. growth. that to wells there's so that our for results be room to and in completion are oil neighborhood that just they're there’re there's continue and be or the feel docks permits just in mean the literally that and much we the of I we and gas continue significant So making Permian applications in very increasing to

in we’re the additional wells requiring we're the very that completing the that just services for that provide us. these we’re fortunate in. So The of Delaware that companies are significance they’re and part opportunities Basin

Robert Jornayvaz

give echo slight soon things of XXXX continue you any a with bit little very it's opportunities bolster will different XXXX. more to There would that that results more. on little that in a are several but for and terms for color I Jason of guidance too customers bit us kind we’re to work

Jason Ursaner

for providing guidance how to anticipate similar year? you this did next quarter Would you your

Joseph Montoya

it so hope helps everybody. I

Jason Ursaner

this And I guess you’ve meaningless because question optically the me year done XX base. cash I out they of just the last still talking a though? guess a that's profitability, quarter this view for to that investors lot sense you from of Do year-to-date XX% depreciation stress little as it's first emerging swung capitalized because was GAAP get that the but And almost generating been cash all you’ve which with you the company a analysts of still of people yield. and million are

Joseph Montoya

We've make we've success said the report - rather report promises. got of repeatedly strategy than as rather and our Absolutely. we'd results

so we've clearly more directions we've the as provide begun we're to the sustain do. we this headed, very, opportunities becomes the that. color We’ll explained color very we’ll given market results as and on And results execute evident to as clearly to strategy and that those very around themselves out be there to everything market and continue to intended now and

Operator

Walthausen. question comes next with Hinman ahead. Deforest go from Our Please

Deforest Hinman

higher us versus am or the on the over headlines side conditions letter maybe that your it? than Midwest ton geographies. potash thinking does in about fall outlook for fourth quarter some of an third some in quarter maybe the questions, I numbers give Couple more But

Robert Jornayvaz

In of sales? terms

Deforest Hinman

Yes, sales conditions? weather field volumes

Robert Jornayvaz

markets impact markets they’ve of our and at moisture. major Rain a having when our substantial given in if some that selling so see don’t we the always got and into. Texas all helps the backyard adequate us state we’re I look not on geographies that

spring. towards is a - planting season just the we strong very So everything pointing for

Deforest Hinman

October? for just disclose then if announced willing was increase the Trio clarity And for price what it you're to

Robert Jornayvaz

details Mark of you the through want that. to walk

Mark McDonald

price month announced a Trio by followed an take the price our increased they they to products Deforest that on Intrepid was So increase Trio of $XX here, price by October for November effect order Mark period X. - announced will

Deforest Hinman

does but And then this for that opportunities like you think and your hear long there roll for one going do on to I’d quickly been opportunities? forward can execute opinion you see a those not you he what in has the is are his how Alex time,

Alex Wagner

days. here have I correct absolutely very it’s a you're few in only Well fact been been long

me for probably question some comment to begin of these to So I it's early things. appreciate little the on a

all that So if from another reserve right perhaps to like it's time. I'd

Deforest Hinman

I the there's help fracing DUCs been the about occurring, on headlines of they're earlier sales those where factors a from us of two all of at revenue mean can then lot things in limiting like takeaway on drilling it but question the and aligning, lot Jason a whether capacity, seems you are the is And understand from geographies those outlook. water perspective? a an

Robert Jornayvaz

basin. I in some the located of of to clear that part the wells where Permian really the in it want are northern best the make we're Delaware

a Devon's If paged wells you X from they bone big to are XX,XXX day. white look barrels anywhere at

your what and So was question about oil activity limiting is. us gas the around

Deforest Hinman

see takeaway the I that business I people to really takeaway west The in the capacity capacity five to optics. and seeing but flow by great a cash you're limited of the So, The and revenues there's want been all about lot take revenue. that further way articles off takeaway water from into it four mean miles numerous obviously. once concerned is think or is these capacity they're - or DUCs, there's

Robert Jornayvaz

under capacity, pipelines at you there takeaway are Permian. of out the Yes, major coming if construction the two look

midstream thing of the that takeaway by And under see just very And I systems the the the great fact operate have employees, Permian you and evidenced drill and We I XXXs our we disposal XXXs clear arbitrage, of so we of around pipelines move basin and board two ability the have as participate the we of extremely part look to of pipelines miles areas as that, produced where opportunity about as terms things an in the our we of in and terms major water to construction speak. solid things. experience oil gas and have is now are as takeaway on think the complex the in at land, opportunities business salt in for capacity because Alex opportunity of already. need brine having

of team in into as our those ourselves, locale. geographic for So given midstream opportunities a our ability opportunities turn provide to be couldn't some just take and and We located better geographic services. as well our technical location

substantial still major the It constructed. of provide - see may you our of nature the good and the is nature bumpiness takeaway the for being when our issue being I'm quarter-over-quarter at don't play. So as takeaway long-term news assets but I long-term look capacity a

Deforest Hinman

level. very, investing something forward project? to or a project very And do you then were just high from willing project the with in perspective briefly feel the about last that partner question to that a to we if but to own you you Is talked that need that capital move be lithium you work would on go your

Robert Jornayvaz

has project that options. I Well, think numerous

there are partner there so like partners would with that to us. And out

the it We opportunity do to have ourselves.

in continue other opportunity we we industry, it look of the front as people the in So us. talk realized and to at to

to is great that optionality want the thing be. always that's ourselves So created we've where you and for

The it a yielded we So, bench is there, results. has there reserve testing modest. that categorized solid we've as know

so of just has think for a how we with again in proven nice up that of cash now And us once finance. amount with opportunity optionality I terms a minimal

So positive that those a things direction. moving all good are are in

Operator

from Evans comes ahead. Our next John Please question Capital. with go SG

John Evans

of curious, in us roughly? Trio. can going that go mean you the was is it's on price does if so of in on you'll QX and pricing trajectory just of that give then about that up kind two-thirds Trio I get and X, the same did on get you QX November realized it And all $XX to you

Robert Jornayvaz

that variance the remind components of give think in I you look I way at $XXX nutrient to to still just about at Mark color it. $XXX a but that's you the between Trio. want the fair additional any want to price if that of and to value we're

essential markets potassium, competing sulfur in evidenced Mark, that. that the that the at nutrients some we're Trio, don't by I we I that delivering if middle with as look color great think to in you're against add no of chlorides XXXX. other opportunity granule, want to I there's all the price you when know and think one in was of the of what the the and nutrients magnesium value So the because are that

Mark McDonald

opportunity at as some we growth. when Trio Certainly there's look for Bob price mentioned the value equation

As in taken quarter, were quarter. of some the shipped orders at we've the of remainder fourth we October look here through this the that

tons on marketplace. well positioned to - that said, the So there the that to the being advantage we're orders of full That affect take in $XX slight may price spot occur spot effect a muting of might be increase. some

and certainly I'm first the good quarter quarter. So in into the through shape fourth

John Evans

And then can you give us potash. the same for kind of outlook

when So in of, it increase do and QX of you you playing spoke into how kind and was effect out QX? see price much and how go does that of the it

Robert Jornayvaz

reading, been everything $XX and as $XX in public. increase out in Well, has markets. there $XX Mosaic announced spot a that took know the that from already that's achieved you up then pricing from to Nutrient price And our price up.

So in we especially international. Midwest Nova the international entire seeing the in seeing realize The markets the clearly and market market and $XX Brazilian expect we're strength the to the fully saying firm what up. we're

the So full fully $XX. we of anticipate that realization

John Evans

then X.X side, water was this it quarter And Last the the just receivable on was quarter. X.X.

Robert Jornayvaz

No, no.

that. missed You

a water X.X the That's we've not the deliveries. actually we That's cash the that is in So future talked receivable. liability. about received for bank contract

John Evans

your from But the customer, I'm that's big X.X? sorry. right,

Robert Jornayvaz

know we don't carry Right. our But sheet. as balance water on you

what our peace vast so confusing appears lot people. of no value there's and of a makes sheet for our on rights, water that to that's So the value little balance that

John Evans

said this last misspoke quarter, one it on was X.X. it how I I sorry X.X I'm it, was but

X.X, most they is taken so they've roughly all that what just is year the that looks math? so like difference your did big the it water So the in right customer QX; took far

Joseph Montoya

spot that In you're on. Yes.

Robert Jornayvaz

Yes. up. And ramping it's

more taking more they're schedule so kicks in. as frac and their And

John Evans

And or by million, supposed I'm something, about million right? you get but divide not basically is four a to it's that $X little $X.XX quarter under sure customer

Robert Jornayvaz

that's Yes, right.

Joseph Montoya

higher that. than That's

John Evans

you contract end accountants question, contract that I the just And for of if they to to to does is is. money that we mean know slow then it this year? away? for can some How So just relative it does you, wash just time it pick going build number liability your next give continue get to have reason to a going to but that to say have are whatever have the over and back liability continue down? let's I you grow, the And don't the year

Joseph Montoya

to calculate we the even yet if it we quarter-to-quarter realm into a getting notes. kind perspective underlying be recognition don't That nature liability were think point give of didn't just the the very liability take that being to There will contract close contract. revenue revenue by technical that on continue we they into of but from time accounting basis. converting we would and that the a you're So said, start you I'll in cliff the a will

term stop over, As this at you manage of to year doesn't period. and it's know the over just a that agreement a away end this or five-year will is wash use something so to start the continue and five-year

Robert Jornayvaz

a high-class I just want reiterate problem.

John Evans

Yes, understand. I no

if bit or then the because what and last And out through guys water. accrued little I over they ran quarter reserve question then Just customer have you et the last you cetera the you figured et thought you and was anything have a but for cetera P&L, it's it a weeds didn't a in that took resolution? water take

Joseph Montoya

too agreement give have resolved want and been customer with us but detail the it third into the much in Yes, don’t there the it's quarter. to I is all

John Evans

in of more then? have you'll it the detail And Q

Joseph Montoya

that the Q language speaks it yes. There in is some to

Operator

with Mark Inc. Our next Please Stephens comes question ahead. go from Connelly

Mark Connelly

questions Just two more on Trio.

Are talked were that still from for? you you overseas looking signs related You've the you saw to about scheduling that were getting you are overseas, the seeing as that about earlier. sales freight encouraging mentioned opportunity. thinking you being you benefits that for you an And and the that way changing are

Robert Jornayvaz

to absolutely. starting happen It's

are guidance we’re more you'll some in profitable. sales quarter not giving that the I fourth see think

market, is pricing instead the equally the really has international on raising in we've taking so in international important zeroed begun down. that And of in prices markets our competitor major it’s but the markets

in reversal to international make as And is the and storm seeing pudding. components strong now the that we we saying that Trio. felt we’re to just calls, in lot you proof and in done continue would clearly price the the that we’re remind up the I pricing of again on once the increases said our So out price decreases wait market. needed of we we've like to a

the and components. value nutrient still is between so differential significant its Trio And

shipments So attractive. specific certain and the internationally the to freight increases price benefits we’re customers towards we’re to much make seeing some reduce costs two working combined more seeing of markets larger those and of

Operator

allocated any question-and-answer remarks. time like to for for Bob I closing session. would conference the Jornayvaz, the now the turn back concludes over This to

Robert Jornayvaz

time just year. to I really everyone your We time. reporting and for early want thank next to our and appreciate in look results fourth Intrepid forward their quarter interest

again. you thank So

Operator

This call. today's concludes conference

You may Thank participating lines. day. your and disconnect pleasant a have for you

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