IPI - Earnings call transcript Q1 2022

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Operator

Thank you for standing by. This is the conference operator. Welcome to the Intrepid Potash, Inc. Q1 2022 Results Conference Call.

As a reminder, all participants are in listen-only mode, and the conference is being recorded. will opportunity there ask presentation, the be to an questions. After to I Relations. conference would Instructions] turn now Investor [Operator Mapes, like the Evan over to go Please, ahead.

Evan Mapes

assume morning, of Jornayvaz; call today to Intrepid's Co-Founder, available joining XXXX will Sales Good to and the With are answers results risks CFO, cause are are subject that you Q&A could Marketing, CEO, Matt statements These be currently uncertainties periodic information to them. uncertainties to today, Chairman, reference. remarks first update our Securities session Also be forward-looking no remarks include our defined statements Bob here and during prepared by results. and our to and actual as to different by President, the with filed Intrepid's questions Intrepid's which on reports described the quarter available us Please on answer statements are Exchange me US anticipated. Vice are the Securities to Executive from incorporated materially Adams. our Thank President and Zachry we based those everyone. us that Commission, be obligation and Stone; forward-looking Brian and following and in Laws. risks discuss for Preston. your advised These our questions, including These today,

turn our to over intrepidpotash.com. financial yesterday's to are operational that, our and in to website on refer non-GAAP filings And measures. these certain are will call now directly most With press the measures SEC Bob. we comparable non-GAAP release. at releases I'll of call, financial today's GAAP available the During press and included Reconciliations measures

Bob Jornayvaz

Intrepid. for and much, the morning to really joining in call the thank you appreciate and and good interest Devin, us, very attendance on we everyone

in is got about for and want any It's in I apologize to blooming all allergies. or sniffling everything sneezing. First, coughing, Denver, advance just we've

before diving the into with for like and So the outlook some the to Intrepid. I'd commentary quarter start I first markets on apologize.

supply West certain chain prices highs, cases. everyone In $XXX currently As in gas $X priced aware, events, commodity we since and previously is geopolitical decade’s high natural and XXXX, multitude of even hadn't prices $XX, record Spot futures well help barrel. per a started macro Texas XXXX. driving have a but just above mid-April, MMBtu, is eclipsed now intermediate which over near occurred

Looking just bushel, prices and not America, key price Wheat corn at the currently a $X XXXX. seen trends, North crops in price over is show $XX trading since highest soybean roughly bushel, a since trading wheat XXXX. similar at with a

Coffee showing over just in of upper last towards remain a is to all-time at of per the price over trading cocoa at five-year seen March Palm highest $X,XXX early prices significant range. XXXX, record ton levels. of oil $X.XX and while are the currently was soybeans high margins bushel, ton the high the support which under While international September at are corn for contract all farmers. agricultural still also key potash The commodities strong at almost and under is just beans November price wheat use $XX at significant $XX is Prices $XX. XXXX. are for of amounts $X.XX, December commodities a that, is about trading highest $X,XXX strength. is of pound, close since to the a just roughly reached level since per extremely that Further boundary

XX-year $X.XX more trading is XXXX. a and pound, an March high tripled than is cotton roughly at which Lastly, has since

is the income of share totaled XX% revenue sales compared $X.XX and per In over for of if first also $XXX what of margin which quarter, this we high and XXX% year diluted which and quarter, consolidated to earnings XXXX. approximately prices their prices, fertilizer it approximately $XX of realized to QX for $XXX for high turn for revenue to the year, potash supply call, we’re and being across $XX bit be crop the are the quite an ton $XX Moreover, out of application to in we of fertilizers destruction, potash of Trio. gross to a crop increase and underlying sales is -- prices, first million. help million, just driven XXXX. million. in which ensure Trio lower profitable crop in the respective net million, Trio, higher see quarter thoughtfulness, most ton a and still per I would the seeing, economics some $XX not the prior totaled XXX% third for per fertilizer simply sales EBITDA owing prices higher the and certain of XXXX, for quarter and fertilizer time, outcome buyers gross of do totaled prior $XX.X first higher to This On that the share. key, due with ahead. trend basis, product, likely way, demand solid our of certainly XX% seen roughly the totaled average a by of think the offer quarter per segment, use net in in totaled net year quarter the was of most demand deliver fertilizers. prices continue, generated primarily would segment, represent products XX% our $XX $XXX lower than Intrepid's needed compared adjusted higher Intrepid source than With a support realized and able think and less call approximately increase for while a While our first some approximately we support million this our be yields, increases price, XXXX negative but quarter margin demand would we a we've compared quarter, million which might In Intrepid's million, quarters above since potash was

operations cash cash million, $X.X During in by while only the came provided in $XX first used activities investing at was million. quarter,

just As $XX Solutions, margins and a balance be tied gross XX. to segment $XX Permian of stood $X a the performer first to our million this segment continues Oilfield balance over December million, at with improvement investments million. on Quickly steady about of from closely Basin. -- is the quarter in April roughly XX, sheet gross short-term in activity Performance this

the added XX% the just drilling. more peak, week, rigs need of is count Permian of lower indicating has the July since of XX As last while over DUC XXXX year, X,XXX the for about the wells the start than Permian over

the for own activity margin. start global and results Global increase increase, XX% that tight quite our of we'll potash a to likely momentum is continue. XX% capture and swing looking strong duration has we in Overall, limited. very opportunities will production. to a for Intrepid's first As Permian worldwide production additional drilling XXXX, and to completions quarter continues of the to supply quite shock demonstrate positive expect supply to keep we've and North capacity impacted XXXX Moreover, remain as severe potash seen America clearly

attractive global and is currently just supply strong prices commodity US demand potash ton been clearly $XXX On where tight markets metric States, remained particularly $X,XXX remained of under has per supply, solid international by steady. a In quite NOLA Brazil economics. we demand-wise today, market driven while per with very prices think ton. being short about Brazilian on the demand summary, are the for potash versus strong United market the the side,

previous I beneficiary. the for of XX,XXX about our Starting a extra production lower if And Now first looking key to operate want mine, in to key clearly mine, we than quickly new Intrepid production. At East averages. are will. for remain have to in in the delivery with to be only some and we to initiatives Intrepid, about ahead Solar continue few increase continue tons highlight on next quarters. quarter, or per miners, which won't ton led we production and elevated, complacent we of improve two potash of fertilizer XXXX That our increase XXX,XXX the continued will prices shifts HB be order weather last XX,XXX they economics market, tons to believe production. Solution continuous this which summer to added our our to said,

offset ponds Although, new impact should fertilizer. HB adding in help much drive the the volumes harvest works injection sale of XXXX the normal of the a pipeline at lower helped higher production for by in double available and summer seven a to XXXX more

will of ton Intrepid looking and our of at and Utah strong summary, at expect first a to wells preparing that Now In production details volume now Matt? as production at early XXXX, flow margins, high we delivered our there. generation over cash the results I'll as the on production add will and increase spring to positive continue. fully system. the continue Wendover financial call outlook. existing have with increase to the engineered also another in expect permitted, are in Further, review per the cost and the facility we of drill which conjunction for cavern while Moab, to the Matt upgraded trend turn our and facilities, results more quarter, very improving cavern we

Matt Preston

Bob. Thanks,

$XX Bob quarter share. or income outstanding an net and of per said, with million had $X.XX million of we EBITDA diluted As $XX

about adjustments, still quarterly tax of note, a modeling expect was we going forward. XX% those couple of bit tax a I will lower For results, our rate quarter to first tax rates future due state and

all On when but to remains to of inventories positive, customers' facilities. September, the markets now be have very pricing inventory to the end meet also necessary. the minimal our across production, we outlook and tons necessary flexibility historic and space into August by down potash nutrient we and if other restart to side, will tons summer move until the the sold expect we potash our the From needs,

some to the in Despite spring, East challenging pricing quarter, weather the to XXX,XXX and realized quarter. sold dry moved restock close tons $XX in tons Spot per half. wet Texas with the the first on have into the and sales so be at up we expect we spot which the Midwest a increase, we During far for ran extremely again weather in and ton first April in West.

record XXXX. as Second to is early remains many ago, in facility a parts our net to our wrapped year, dry production results per couple second as sulfur quarter a continue we are half season, side, ton sales of the increase at normal with Southwest. of season we weather last rates expanding spring much key expected in production on by the Trio weeks good secondary as start average track to HB It but the volumes affect of to encouraged areas focus magnesium. ton. a potash seen We price while potash return for to the up into we've so we on such far, for The to and consistent continues sales improved and realized particularly are cost proper and their evaporation to $XXX year, particularly $XXX compared increase farmers nutrients, fertilization, to delivered per to

be of XXXX to half We sold in previous the ton our second Trio expect per and sales expect $XXX net to middle the of XXX,XXX quarter. realized in to price guidance tons of average of first $XXX XXX,XXX the near an

from Our flow of approximately million continues cash liquidity. liquidity position currently $XXX have and $XX to of generate roughly million we improve as operations

to key sustaining the supply ahead discussed, and get projects accelerate chain with the issues positive inflation. capital on to some plan potential during the some items along we Given year spend of outlook, capital Bob

had at full purchase continuous concludes we our can Additional our XXXX. capital time replacement year prepared and expected capital We until million pipe, long we're East expect year to previously and facility, of to ready lead $XX purchase between needed. other includes take this store miner casing million now proactively which year, $XX we questions. items, remarks. This operator, And the for some next second and spending off-site to the

Operator

Thank you.

the now Please is Joel The session. from question BMO first question-and-answer Instructions] ahead. Jackson We go Markets. Capital [Operator begin will from

Alex Chen

on Chen can us how Hi. balance liquidity question, more you Can a sheet remind on be taking quarter-over-quarter. the given Joel and better of Jackson. of might have My questions. buyback the that This and that And if you how cash is for pace allocated? on might my position first cash changed. Alex expected elaborate Thanks for

you locked to And prices has where can some us question, expect how on might of been book Intrepid For provide the XXXX? QX throughout order second color maybe much potash in? move sales my how please,

Bob Jornayvaz

Alex, the for I'll the of thanks address pace question. buyback.

announced we ahead as the As you program, of off as pretty know, market soon took that us. buyback much

how in So, place. formalizing policy on in stages we're start the that put to to of our that and we're and act going

process, is where to last we've formal together that's on. took that put our updating off the we as of tell is. hope I days and continue that a it only a earnings within you goes literally market So and call, got committee can

As let I'll to the question, balance of take Matt your that.

Matt Preston

Sure.

QX I'll year. to any order back with taken the as remain orders far the else haven't expect prices back towards flip for As of Zach, book, half any to this but color, we at as QX look relatively really anything half add? first for to we line in Zach point the additional and

Zachry Adams

would add I just kind crop the second remain support Matt of the we Yes, is what year. that strong, through that a and to half of expect expect prices good we saying, application to

Matt Preston

answer that question? your Did

Alex Chen

Yes.

Just a quick follow-up.

range? assume pricing million the kind relatively into this current flat in So do staying half? because in I first would of the environment you to to million, expect $XXX you prices similar $XXX flow mentioned QX, So

Matt Preston

come situation of amount We to in assume stable. a will rise out darn at least We strength XX this on the, for down. We don't a horizon, market see up would prices give that coming think couple say, remain a lighten to it of There's that there there's Yes. XX-month pretty or down. nothing back where prices just tremendous prices quarters.

if to that that. like continue thoughts on happy discuss you our to So

Operator

questions. Thanks, answering you. Thank my Bob for

Operator

next from The question Morgan from Please Stanley. ahead. is Vincent Andrews go

Will Tang

risk my Will I a This and if for mean, question. that program, decide for they of some for thinking the Thanks taking potash over summer prices hold now to Alex's is about guys guess, are right guess, kind your you guys. as any distributors given seeing Tang just inventory fill the summer? Hi, possibly follow-up I how particularly high Vincent. on to question, I we're

Bob Jornayvaz

Obviously, market, to. but see can we need much really program. don't drive selling We don't a basically the as as for we're fill need or a we

a I'll it differently. program be So, let year. I'd reason this surprised for fill I see if elaborate, but fill there's see don't typical know program. Zach, no really a Zach to you

Zachry Adams

Bob would I echo said. kind what Yes. of

I think producers America. by pushed the be a what quarters, if several last you seen traditional haven't really look program North call we I would over in fill the here

So times to kind we and what in year. second kind of continue as of the going need people layer them, expect into that's just they half of the

Will Tang

it. Got

then And guess… Okay. I

Bob Jornayvaz

of from different is around Going just I the by back, such XX% think widely so used capacity where a removed situation to been globe approximately Will, globally the you've a market. has seen don't got we've commodity many that used people where the XX%

X% commodities the around such a to most of potash, usage has like such off. X% globally are off So priced from utilize mean, of on of been widely think anyone it's mean, XX%. used, markets or seen so commodity that significant there's -- of potential that really removed where the in margin horizon commodity that's where is nothing think cause a the with I market. percentage where capacity we I actually would can't I the to because I market. XX% come a coming we've to fill wide can't just the another program

Will Tang

more of second could potash that through to, XXXX guess, And That's guess just of leftover the it looks like would like mean, I story on How I comparable quickly cost a and then side, of for we the that inventory year. year, [ph] that guys begun kind goal XXXX return this cost some higher feasible or last type of helpful. to have the be Is from half you XXXX? it. to I a there? like costs level work Got

Matt Preston

low misses sort segments ton what the the we're show. in XXXX Yes. on see you Kind late to in Good XXXX, the Really, of $XXX we cost per $XXX question. of levels, all in pretty here poor see come grown XXXX. the from We'll in the harvesting which as potash, obviously down evaporation we XXXs start summer season. evaporation quickly XXXX given tons that the has from

touch, impacted see year. QX we'll QX for to back a inflation those into So be we Obviously, normalized step us I big QX, for has expect and and of levels. a down will pretty think QX be quick pretty it at next but then

Will Tang

Got it. Thank you.

Operator

from The Please UBS. Josh Spector go question ahead. next is from

Josh Spector

taking Yeah. for question. Hi. Thanks my

Trio across underway cost and produce. projects reducing and few a potash about expand got to previous to that the to some production of you've question the goes Just

give Trio Just for and curious have projects production you where about on underway early an if could there's the a be in way thought to based potash XXXX.

Bob Jornayvaz

I very the early, in mean, Yeah. Josh. caverns question. I appreciate Still we've Certainly, done Moab before.

the really so high-grade towards And of drill back cavern, half start that to benefit very that we'll you some our ponds see put and start very into XXXX. brine strong, to

For HB a little and sooner. see to Wendover, we'll start that bit

numbers back earlier they'll increases, evaporation seasons of think the high-grade we of specific production online. things. have certainly numbers came get first HB One, overall a we'll also any because we'll now, don't then help two towards brine the I to for have, do As little additional but for have kind saw facility right we And you downside I up we additional the four limit when and we'll K.

it So One, two production us. potential, higher there's downside but evaporation really system. two, the bad for our in does overall a of year limits things it

Josh Spector

sense. concerns sanctions think hearing I or guess, thoughts you views that. bit guess That this you thoughts concerned are be this. that point? Bob, world out, earlier, approach intervention about curious be your to lot play fertilizers and And we've opine about perhaps potash appreciate makes on food about help could I'd I do separate what become supply other the I some those of a outlook. that's still. something how Okay. or from the at on offered and food your to a your to if going change that costs, question some in kind more and Globally, the that to there's view. or guess from there's really the continue get that the I nothing stance could change just we medium-term of near-term mention you outlook outlook of in

Bob Jornayvaz

to I for I and I would apologize guess business. my compare terminology the at when Energy it I look --

would I Disneyland, I go the call bridge a but energy think like what they that to, people to there's lot to shown get there. you of haven't

And yield these potash, and supply nitrogen the yield we've all stay it's you so, same see commodities, market. the the major given saw you're seen potash When look usage that to fertilizer in all but at going And destruction. able you also situation, holidays it's agricultural with current if very and same way to be to that products, our commodities, reduce your fertilizer we XXXX, phosphate XXXX the trajectory. the of hard on

you when store. consumption I get decrease example, soybean farmer at of that affect your question reduce Brazil, how at yields look the in for yields economics strong. So extremely XX% potash grocery a Tech going and XX% a which decrease or keep definitely other commodities, to is consumers on does

spent if and in been beginning asked a D.C. think think point couple have how at people part plentiful the national we're cheap I there of gas security you last at questions discussion, And is extremely and we're so consumers store, should become we're asked will. used that to about -- which days about before We food the now food week. never it. a grocery of we've

I markets. think strong, going just is inflationary them what we're see very to call

situation the go mentality call of will on be XX, around world, telling word. that do will We've let's be. markets that, think to If what around it's that honest, there's here ahead for really this after us. And come on last so that's months, XX get when that's XX the I least keep several after clarity sort to Adam this that, I back back going is quarters years to and the believe X strong on. got at months, of and you good even it won't at a to situation to we're hard know focused I to to our We don't hand forgive just we place. completed. some Russian-Ukrainian use work be XX going forever. forget next months Smith The of normal. choose say, group would

answered that's if again, just I or or man's question once your So was helpful opinion. that don't I one if know not?

Josh Spector

thoughts. I your helpful. that's Thanks. No, appreciate

Operator

Jason is question Holdings. Instructions] from Bumbershoot ahead. The next Please from Ursaner [Operator go

Jason Ursaner

for the taking Thanks Good question. afternoon.

in nutrient kind you I you thoughtfulness following There guess a the the was years? I destruction. through just on get of morning, terms one. last than Just cycle. do were I some walk and more multiyear up the demand the questions And three, of rather lot being could on over crop when of the think I resolved the of this of And idea of two, next of guess, economics? this how you price length cycle term and their the the on length you can underlying the think out see and focus four not of a little call demand playing the used rationalization

Bob Jornayvaz

tons, shutdown. that we're is, XXXX, and I think And trading oil at if much up tons, ongoing expansion put didn't we we more that suggest that kind and the the where hold tonnage. good could redirected a of And the ’XX, I margins and build production that we actually repeats look the project the have European had parts do they're go EuroChem world. are But as the right were importantly, was news would I we has trading that mines history has dial in they We agricultural that still entire XXXX, the on at at. the suggest those they back selling that that if would the EuroChem old them there Belarusian XXXX, Canadians know it overall that we do Canadians we different tons, the Eastern the to we like itself. sector know potash felt out been of speak. was have the XXXX, had every style back

I of as would the the, different because this and as time, different those I using words time. you time, But changed has out situation to same. Ukrainian that soon this period it's suggest say, So, turns some Russian be for what hate is and it things

and coffee, in from to see People holiday to potash we corn, afford could didn't in strong midst palm to the did. in oil, cocoa, to never 'XX. a to and While 'XX call ’XX we've margins before, that farmer they extremely heard – on ’XX cotton pick everything of and

of Let's the everyone mean, was tapped specific But where that we're holiday. potash new have holiday. XXXX. did out. concept to and a available. come a prices of, to that in we But are specific the about is physically because I on the come had several that be XXXX. take price get more they choice, today down we not XXXX a wasn't down, aware And not potash. of should we've the to it capacity and honest, come in making just And can't -- talked case is led really That customers, are very They choices, were buy. to making market

know widely you So, rationing, but used off when today. the of take what I the don't it is, thoughtfulness, know XX% impacts. XX% market, I don't we it And commodity, destruction, use word a seeing such we're to if has

that's -- know more we're looking sense maybe at it. So if don't Jason, that how I

Jason Ursaner

the less I seems fertilizers, it. men, short-term I price less that about could on this global answers. it yield -- year, with I the everyone's which mean, demand, last Yeah. prices -- will like in was It versus it you're lengthens talking less guess, of guess, crop very higher saying, are people kind focused that down be length the

supply on to from opening still it some it? reopen Is reopen West? cash where swing I obviously, more financially take any you'd asking. like guess maybe it a at to think guess sense risk point comfortable there back to, or a to try is to where there you online Russia make even that, regulatory strategic try encouragement what or that would get I'm with financial coming maybe feel incentives with I level of to I the

Zachry Adams

got question. We've give any to looking a a small team it. hope. want don't I It's great at false

us I a long in the think reopen it's short-term. to shot that for

see some out think to this more. bit little a how of plays we're I going

Jason Ursaner

Okay.

Zachry Adams

great nice for zone. And It's It's is definitely that mining. to zone a ore solution it. it's ore an have available

I'll Carlsbad, out the zones zone, It one New at in there. variety ore ways. ore just looked best that was we've of in Mexico. put of a mined it the which So at, first was

So…

Jason Ursaner

Right.

Zachry Adams

a your of it's knowledge It great … question. our shows company.

say that, a for ways. All it of is I at lot Jason. you different looking thank in So we're

Jason Ursaner

Okay. looking that in per in And on the a of terms the when knew at there guess, was of issue. I the HB you you cost cost took are you how weather terms the of ton, mine, sort charges

that think HB expensed still well you you would because was but took? I in with now level -- taken selling I'm get assuming how and through just to sense, sure what injector that's actually charge reasonable question new hit prices a charges or that price, it's around that without can't now trying I'm not for even QX of anything. elevated to as the relative coming that spread took and getting get versus this track got but you actually to on the have like into at you're was I the get system are guess as on normal the makes if production I'm what -- elevator are

Matt Preston

Yes.

goes compared little of to a elevated more of certainly, So the questions. previous back kind normal to one and

tons, at I goods we're and stair-step of pretty we once cost X.XX% XXXX we said, kind was like at consistently. QX sold sold our we to sales down significantly and when buy were that our $XXX of expect XXXX and for the into back we And in the $XXX range -- to of QX. production come Just when goods of that pretty to start looking here back cost up down QX -- range

Jason Ursaner

Okay. And then--

Matt Preston

to I the maybe significant guess, a answer impact, having sorry, quick Jason. still it's is your question, So,

Jason Ursaner

last but to the No, the any tracking no see in And from start hear I then far? so progress--? trial any HB problem. second the for, half that how Green or phrase been I project, on Is didn't you still that had update set guess, it update on used quarter,

Bob Jornayvaz

I we could, me. I'll checked. but boxes some we Jason, covered getting actually are an you ongoing Brian here that Brian? have Brian basically as and things many that give things apologize, next on sitting to the as they're update of

Brian Stone

that Yes. Thanks, question. asking Jason, for

towards a we're So, pilot progressing project.

for, process doing looking tests which is I work, think the New laboratory Department produced We're by Environmental in you word Mexico being consortium. produced water in design the were water. of that's the the overseen on

It's with So, project, track earnings we're call. project. last we moving in interesting towards on an the told what you a and pilot it's

Bob Jornayvaz

you And with the state, part Mexico in in water the state. that is consortium, don't the of NMED doing produced which we're New forget, the if will, conjunction

Intrepid on we don't So, to get run time.

We run on have time. the state's to

Jason Ursaner

Got you.

Okay. the Thanks. Appreciate answers.

Operator

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

Bob Jornayvaz

everyone Intrepid. look everybody thank wish for to forward next talking in Thank I want to a I to interested great time you their and you. their day this morning, quarter. and

Operator

today's concludes This call. conference

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

Intrepid Potash (IPI) 3 May 222022 Q1 Earnings call transcript