Intrepid joins chorus, reports drop in sales levels

Denver-Intrepid Potash Inc. said Dec. 18 that, consistent with announcements from other fertilizer producers, the company has seen the reduction and deferral of sales of potash and langbeinite, which normally would occur in the fourth quarter, into early 2009. Due to these reductions and deferrals, the company expects sales levels for the fourth quarter 2008 to be less than half of the levels seen in the third quarter of this year. In addition, the company anticipates producing potash and langbeinite volumes for the full year that are below the previous guidance range and anticipates that its corresponding annual cost of goods sold for both potash and langbeinite will be higher than previous guidance. The higher cost per ton numbers are a function of the company strengthening its workforce and continuing infrastructure improvements, while at the same time producing fewer tons. In order to manage some variable cost elements, the company has recently elected to reduce its contract labor in Carlsbad, N.M., through the end of 2008 and into 2009 as long as the current market conditions exist. As a result of entering 2009 with relatively higher than historical inventory levels, and in an effort to manage the supply demand balance, the company currently anticipates that 2009 potash production will be below 800,000 tons. Intrepid CEO Bob Jornayvaz stated, “We are evaluating the market in a real-time fashion and taking the appropriate actions to navigate the company through this period of general market uncertainty. We will continue to actively monitor sales and production rates to manage inventory levels against the near-term market demand profile while at the same time being thoughtful about long-term fundamentals. We firmly believe that the macro potash trends of world population growth, improved diets and farmers investing for yield remain unchanged. The strength of our debt-free balance sheet allows us to make these proactive, real-time, operating and marketing decisions that are in the best long-term interests of our stockholders.”