Denver — Intrepid Potash Inc. reported net income of $19 million and earnings per diluted share of $0.25 for the second quarter ending June 30, 2012, compared with $30.7 million and $0.41, respectively, in the second quarter of 2011. For the first six months, net income was $39.6 million, compared with $58.9 million during last year’s first half. Adjusted EBITDA for the second quarter was $42.9 million, compared with $59.8 million in 2011. Sales of both potash and langbeinite, which the company markets as Trio®, were down for the quarter, and production of both products was down from the year-ago quarter as well. Potash sales were 184,000 tons and production was 170,000 tons for the second quarter, compared with 225,000 tons and 209,000 tons, respectively, in last year’s second quarter. The average net realized sales price for potash, which the company calculates as gross sales less freight costs, divided by the number of tons sold in the period, was $465/ton in the quarter, compared with $462/ton in the second quarter of 2011. “During the quarter, as expected, we saw lower potash demand from our customers compared with the first quarter of 2012,” Intrepid said. “We believe dealers sold product from their storage capacity and drew down their own inventory levels to meet farmer demand with a goal of ending the spring with empty potash bins.” Second-quarter sales of Trio® were 26,000 tons and production was 33,000 tons, compared with 39,000 tons and 44,000 tons, respectively, in the same period a year ago. The average net realized sales price for Trio® was $322/st in the second quarter, compared with $222/st in the second quarter of 2011. Intrepid said capital investments in the second quarter totaled $62.2 million, reflecting increased construction activity for its HB Solar Solution mine and North compaction project, both in Carlsbad, N.M. It said it is on track to invest approximately $225-$300 million in capital projects for the full year 2012. Looking ahead, Intrepid noted the increased severity of drought in the Midwest. “We believe the trend of stronger commodity prices into the fall provides a constructive scenario for farmer economics to remain solid heading into the fall application season,” Intrepid said. “The drought conditions have the potential to pressure stocks-to-use ratios, therefore providing a solid backdrop for farmer economics into 2013 and reinforcing our expectation that farmers will apply near normal volumes of potash during the fall application season.” Intrepid expects potash sales of 220,000-250,000 tons for the third quarter and 820,000-870,000 tons for the full year of 2012, with production estimates at 180,000-200,000 tons for the third quarter and 785,000-825,000 for the year. As for Trio®, Intrepid estimates production of 35,000-45,000 tons and sales of 30,000-40,000 tons for the third quarter, with full-year production and sales projected at 130,000-165,000 tons.
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