A $323.8 million asset impairment charge and some $155.1 million in tax adjustments during the fourth-quarter 2015, significantly impacted Intrepid Potash Inc.’s earnings. Intrepid reported fourth quarter 2015 net loss of $518.3 million ($6.85 per share), compared with net income of $5.8 million ($0.08 per share), for the 2014 fourth quarter. Excluding the asset impairment charge related to conventional assets in Carlsbad and an increase in the valuation allowance related to deferred tax assets, Intrepid’s adjusted net loss was $20.1 million ($0.26 per share), and compares with adjusted net income of $5.1 million ($0.07 per share), in the 2014 fourth quarter.
Fourth-quarter sales were $42.8 million down from $98.3 million. Potash sales volumes dropped to 89,000 st from the year-ago 210,000 st.
For the full year 2015, the net loss of $524.8 million ($6.94 per share), compares with net income of $9.8 million ($0.13 a share), for 2014. Intrepid’s 2015 adjusted net loss of $22.9 million ($0.31 per share), compares with adjusted net income of $8.4 million ($0.11 per share), for 2014. Intrepid reported adjusted EBITDA of $45.5 million for 2015 compared with $95.3 million in 2014.
2015 sales were $287.2 million, down from $410.4 million. Potash volumes were 587,000 st, down from 2014’s 915,000 st.
“The recent series of potash price reductions has created a more dynamic market than we’ve experienced in some time,” said Intrepid’s Executive Chairman, President and CEO Bob Jornayvaz. “The pricing pressure is reflected in our fourth quarter performance and has the potential to cause a breach in our loan covenants. As a result, our auditors added going concern language to their audit opinion.”
“In response to the current conditions, we have taken actions for the short term as well as continuing to execute on our long-term strategy. We remain focused on improving EBITDA generation by selling more Trio® while also lowering our potash cash operating costs through our conversion of the East facility. The additional tests we ran in December and January support our confidence in completing the conversion in mid-2016. In early 2016, we took actions to decrease our selling and administrative expenses by 20 percent from 2015 levels, and to improve our operating costs, including a 5 percent workforce reduction. We are evaluating the viability of our West facility under a prolonged depressed pricing scenario. We have also been working with our lending group on an amendment that will provide us with the time and continued flexibility needed as we evaluate and execute on our options. We are grateful to have this banking group with whom we have been working with as partners and appreciate that they have been responsive, diligent and cooperative in this challenging time. With the Trio® conversion underway and our ongoing evaluation of West, which comprises more than half of our potash production, we have suspended our practice of providing a financial outlook.”