Intrepid Potash Inc. reported net income of $18.2 million ($.24 per diluted share) on sales of $96.1 million for the fourth quarter ending Dec. 31, 2010, up from the year-ago $6.7 million ($.09 per share) on sales of $73.1 million.
“During the fourth quarter of 2010, we saw a significant expansion in nutrient demand, which was more robust than we had expected and was further bolstered by a strengthening commodity market,” said Bob Jornayvaz, Intrepid’s executive chairman of the board. “A number of factors contributed to the overall strength in the potash market domestically during the fourth quarter. Mild fall weather and an early harvest in much of the United States allowed for an extended application period for potash and other nutrients well into December. Further, prices for virtually every agricultural commodity moved higher, as yield estimates were trimmed and global demand continued to grow, driving farmer economics to historically attractive levels.”
Intrepid also touted its ability to serve the just-in-time truck market. “The flexibility our locations afforded us, coupled with our decision to manage inventories and support the local truck market, was integral to our solid results for the quarter,” added Jornayvaz. “Not only were we able to service our traditional truck markets in the southern United States, but we were also able to meet customer demand for tons outside these locations as customers required timely delivery of product from suppliers to satisfy farmer demand.”
Fourth-quarter potash sales volumes were 216,000 st with an average net realized sales price of $386/st, compared to the year-ago 150,000 st and $408/st. The more telling measure, according to Intrepid, was that its 4Q average price was $43/st higher than it was in the third quarter of 2010. Potash net sales were $83.6 million, compared to the year-ago $61.2 million.
Fourth-quarter Trio sales volumes were 27,000 st ($222/st), versus the year-ago 25,000 st ($190/st). Net sales were $5.9 million versus the year-ago $4.8 million.
Intrepid also said that based on its calculations, its average net realized sale price for the fourth quarter continued to exceed that of its North American competitors, with an average net realized sales price advantage of $79/st. Intrepid claimed this same advantage for the year to the tune of $61/st.
Intrepid said that as the spring fill gets underway, it has seen a number of dealers place orders well in advance of anticipated spring demand as they appear confident in their ability to profitably sell the tons they have ordered. Intrepid expects sales during the spring to be normal or slightly above normal based on historical levels. It said it seems dealers may be more willing to exit spring with some level of inventory entering the summer.
Despite the 4Q uptick, full-year net income was down at $45.3 million ($.60 per share) on sales of $359.3 million, compared to the prior-year $55.3 million ($.74 per share) and $301.8 million. Full-year potash volumes were 810,000 st ($363/st), vs. the year-ago 440,000 st ($541/st). Net sales were $294.1 million vs. the year-ago $237.8 million. Trio volumes were 204,000 st ($174/st); the year-ago was 149,000 st ($286/st). Net sales were $35.5 million, versus the year-ago $42.5 million.