|
x
|
Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|
For the Quarterly Period Ended March 31, 2020
|
|
or
|
|
¨
|
Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|
For the transition period from ______ to ______
|
Delaware
|
26-1501877
|
(State or other jurisdiction of
incorporation or organization) |
(I.R.S. Employer
Identification No.) |
1001 17th Street, Suite 1050, Denver, Colorado
|
80202
|
(Address of principal executive offices)
|
(Zip Code)
|
N/A
|
(Former name, former address and former fiscal year, if changed since last report)
|
Title of each class
|
|
Trading symbol
|
|
Name of each exchange on which registered
|
Common Stock, par value $0.001 per share
|
|
IPI
|
|
New York Stock Exchange
|
Large accelerated filer ¨
|
Accelerated filer x
|
Non-accelerated filer ¨
|
Smaller reporting company ¨
|
Emerging growth company ¨
|
|
|
|
Page
|
|
|
March 31,
|
|
December 31,
|
||||
|
|
2020
|
|
2019
|
||||
ASSETS
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
44,371
|
|
|
$
|
20,603
|
|
Accounts receivable:
|
|
|
|
|
||||
Trade, net
|
|
31,862
|
|
|
23,749
|
|
||
Other receivables, net
|
|
1,554
|
|
|
1,247
|
|
||
Inventory, net
|
|
87,860
|
|
|
94,220
|
|
||
Prepaid expenses and other current assets
|
|
4,669
|
|
|
5,524
|
|
||
Total current assets
|
|
170,316
|
|
|
145,343
|
|
||
|
|
|
|
|
||||
Property, plant, equipment, and mineral properties, net
|
|
372,057
|
|
|
378,509
|
|
||
Water rights
|
|
19,184
|
|
|
19,184
|
|
||
Long-term parts inventory, net
|
|
28,403
|
|
|
27,569
|
|
||
Other assets, net
|
|
7,726
|
|
|
7,834
|
|
||
Total Assets
|
|
$
|
597,686
|
|
|
$
|
578,439
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
||||
Accounts payable
|
|
$
|
12,377
|
|
|
$
|
9,992
|
|
Income taxes payable
|
|
50
|
|
|
50
|
|
||
Accrued liabilities
|
|
27,461
|
|
|
13,740
|
|
||
Accrued employee compensation and benefits
|
|
3,994
|
|
|
4,464
|
|
||
Advances on credit facility
|
|
—
|
|
|
19,817
|
|
||
Current portion of long-term debt
|
|
20,000
|
|
|
20,000
|
|
||
Other current liabilities
|
|
19,393
|
|
|
19,382
|
|
||
Total current liabilities
|
|
83,275
|
|
|
87,445
|
|
||
|
|
|
|
|
||||
Advances on credit facility
|
|
29,817
|
|
|
—
|
|
||
Long-term debt, net
|
|
29,781
|
|
|
29,753
|
|
||
Asset retirement obligation
|
|
22,574
|
|
|
22,140
|
|
||
Operating lease liabilities
|
|
3,577
|
|
|
4,025
|
|
||
Other non-current liabilities
|
|
420
|
|
|
420
|
|
||
Total Liabilities
|
|
169,444
|
|
|
143,783
|
|
||
Commitments and Contingencies
|
|
|
|
|
||||
Common stock, $0.001 par value; 400,000,000 shares authorized;
|
|
|
|
|
||||
129,643,509 and 129,553,517 shares outstanding
|
|
|
|
|
||||
at March 31, 2020, and December 31, 2019, respectively
|
|
130
|
|
|
130
|
|
||
Additional paid-in capital
|
|
653,946
|
|
|
652,963
|
|
||
Retained deficit
|
|
(225,834
|
)
|
|
(218,437
|
)
|
||
Total Stockholders' Equity
|
|
428,242
|
|
|
434,656
|
|
||
Total Liabilities and Stockholders' Equity
|
|
$
|
597,686
|
|
|
$
|
578,439
|
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2020
|
|
2019
|
||||
Sales
|
|
$
|
63,984
|
|
|
$
|
57,554
|
|
Less:
|
|
|
|
|
||||
Freight costs
|
|
11,860
|
|
|
10,456
|
|
||
Warehousing and handling costs
|
|
2,904
|
|
|
2,236
|
|
||
Cost of goods sold
|
|
43,047
|
|
|
31,694
|
|
||
Lower of cost or net realizable value inventory adjustments
|
|
550
|
|
|
—
|
|
||
Gross Margin
|
|
5,623
|
|
|
13,168
|
|
||
|
|
|
|
|
||||
Selling and administrative
|
|
6,599
|
|
|
5,807
|
|
||
Accretion of asset retirement obligation
|
|
435
|
|
|
417
|
|
||
Litigation settlement
|
|
10,075
|
|
|
—
|
|
||
(Gain) loss on sale of asset
|
|
(4,696
|
)
|
|
19
|
|
||
Other operating (income) expense
|
|
(11
|
)
|
|
501
|
|
||
Operating (Loss) Income
|
|
(6,779
|
)
|
|
6,424
|
|
||
|
|
|
|
|
||||
Other Income (Expense)
|
|
|
|
|
||||
Interest expense, net
|
|
(792
|
)
|
|
(603
|
)
|
||
Interest income
|
|
116
|
|
|
—
|
|
||
Other (expense) income
|
|
16
|
|
|
334
|
|
||
(Loss) Income Before Income Taxes
|
|
(7,439
|
)
|
|
6,155
|
|
||
|
|
|
|
|
||||
Income Tax Benefit
|
|
42
|
|
|
—
|
|
||
Net (Loss) Income
|
|
$
|
(7,397
|
)
|
|
$
|
6,155
|
|
|
|
|
|
|
||||
Weighted Average Shares Outstanding:
|
|
|
|
|
||||
Basic
|
|
129,572
|
|
|
128,730
|
|
||
Diluted
|
|
129,572
|
|
|
130,880
|
|
||
Earnings Per Share:
|
|
|
|
|
||||
Basic
|
|
$
|
(0.06
|
)
|
|
$
|
0.05
|
|
Diluted
|
|
$
|
(0.06
|
)
|
|
$
|
0.05
|
|
|
|
Three-Month Period Ended March 31, 2019
|
|||||||||||||||||
|
|
Common Stock
|
|
Additional Paid-in Capital
|
|
Retained Deficit
|
|
Total Stockholders' Equity
|
|||||||||||
|
|
Shares
|
|
Amount
|
|||||||||||||||
Balance, December 31, 2018
|
|
128,716,595
|
|
|
$
|
129
|
|
|
$
|
649,202
|
|
|
$
|
(232,068
|
)
|
|
$
|
417,263
|
|
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,155
|
|
|
6,155
|
|
||||
Stock-based compensation
|
|
—
|
|
|
—
|
|
|
1,031
|
|
|
—
|
|
|
1,031
|
|
||||
Vesting of restricted common stock, net of common stock used to fund employee income tax withholding due upon vesting
|
|
55,249
|
|
|
—
|
|
|
(112
|
)
|
|
—
|
|
|
(112
|
)
|
||||
Exercise of stock options
|
|
9,187
|
|
|
—
|
|
|
9
|
|
|
—
|
|
|
9
|
|
||||
March 31, 2019
|
|
128,781,031
|
|
|
$
|
129
|
|
|
$
|
650,130
|
|
|
$
|
(225,913
|
)
|
|
$
|
424,346
|
|
|
|
Three-Month Period Ended March 31, 2020
|
|||||||||||||||||
|
|
Common Stock
|
|
Additional Paid-in Capital
|
|
Retained Deficit
|
|
Total Stockholders' Equity
|
|||||||||||
|
|
Shares
|
|
Amount
|
|||||||||||||||
Balance, December 31, 2019
|
|
129,553,517
|
|
|
$
|
130
|
|
|
$
|
652,963
|
|
|
$
|
(218,437
|
)
|
|
$
|
434,656
|
|
Net loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,397
|
)
|
|
(7,397
|
)
|
||||
Stock-based compensation
|
|
—
|
|
|
—
|
|
|
1,032
|
|
|
—
|
|
|
1,032
|
|
||||
Vesting of restricted common stock, net of common stock used to fund employee income tax withholding due upon vesting
|
|
89,992
|
|
|
—
|
|
|
(49
|
)
|
|
—
|
|
|
(49
|
)
|
||||
Exercise of stock options
|
|
|
|
—
|
|
|
|
|
—
|
|
|
—
|
|
||||||
Balance, March 31, 2020
|
|
129,643,509
|
|
|
$
|
130
|
|
|
$
|
653,946
|
|
|
$
|
(225,834
|
)
|
|
$
|
428,242
|
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2020
|
|
2019
|
||||
Cash Flows from Operating Activities:
|
|
|
|
|
||||
Net (loss) income
|
|
$
|
(7,397
|
)
|
|
$
|
6,155
|
|
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
|
|
|
|
|
||||
Depreciation, depletion and amortization
|
|
9,586
|
|
|
8,746
|
|
||
Accretion of asset retirement obligation
|
|
435
|
|
|
417
|
|
||
Amortization of deferred financing costs
|
|
86
|
|
|
68
|
|
||
Amortization of intangible assets
|
|
80
|
|
|
—
|
|
||
Stock-based compensation
|
|
1,032
|
|
|
1,031
|
|
||
Lower of cost or net realizable value inventory adjustments
|
|
550
|
|
|
—
|
|
||
Accrual for litigation settlement
|
|
10,075
|
|
|
—
|
|
||
(Gain) loss on disposal of assets
|
|
(4,696
|
)
|
|
19
|
|
||
Allowance for doubtful accounts
|
|
275
|
|
|
—
|
|
||
Other
|
|
—
|
|
|
4
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
|
||||
Trade accounts receivable, net
|
|
(8,388
|
)
|
|
(3,057
|
)
|
||
Other receivables, net
|
|
(308
|
)
|
|
(362
|
)
|
||
Inventory, net
|
|
4,976
|
|
|
(4,091
|
)
|
||
Prepaid expenses and other current assets
|
|
857
|
|
|
103
|
|
||
Accounts payable, accrued liabilities, and accrued employee
compensation and benefits |
|
8,119
|
|
|
2,455
|
|
||
Operating lease liabilities
|
|
(552
|
)
|
|
(479
|
)
|
||
Other liabilities
|
|
41
|
|
|
(2,888
|
)
|
||
Net cash provided by operating activities
|
|
14,771
|
|
|
8,121
|
|
||
|
|
|
|
|
||||
Cash Flows from Investing Activities:
|
|
|
|
|
||||
Additions to property, plant, equipment, mineral properties and other assets
|
|
(5,710
|
)
|
|
(3,958
|
)
|
||
Deposit on asset purchase
|
|
—
|
|
|
(3,250
|
)
|
||
Proceeds from sale of assets
|
|
4,786
|
|
|
—
|
|
||
Net cash used in investing activities
|
|
(924
|
)
|
|
(7,208
|
)
|
||
|
|
|
|
|
||||
Cash Flows from Financing Activities:
|
|
|
|
|
||||
Proceeds from short-term borrowings on credit facility
|
|
10,000
|
|
|
—
|
|
||
Employee tax withholding paid for restricted stock upon vesting
|
|
(49
|
)
|
|
(112
|
)
|
||
Proceeds from exercise of stock options
|
|
—
|
|
|
9
|
|
||
Net cash provided by (used in) financing activities
|
|
9,951
|
|
|
(103
|
)
|
||
|
|
|
|
|
||||
Net Change in Cash, Cash Equivalents and Restricted Cash
|
|
23,798
|
|
|
810
|
|
||
Cash, Cash Equivalents and Restricted Cash, beginning of period
|
|
21,239
|
|
|
33,704
|
|
||
Cash, Cash Equivalents and Restricted Cash, end of period
|
|
$
|
45,037
|
|
|
$
|
34,514
|
|
|
|
|
|
|
||||
Supplemental disclosure of cash flow information
|
|
|
|
|
||||
Net cash paid during the period for:
|
|
|
|
|
||||
Interest
|
|
$
|
227
|
|
|
$
|
49
|
|
Income taxes
|
|
$
|
—
|
|
|
$
|
—
|
|
Amounts included in the measurement of operating lease liabilities
|
|
$
|
637
|
|
|
$
|
565
|
|
Accrued purchases for property, plant, equipment, and mineral properties
|
|
$
|
2,557
|
|
|
$
|
1,435
|
|
Right-of-use assets exchanged for operating lease liabilities
|
|
$
|
104
|
|
|
$
|
5.916
|
|
Note 1
|
— COMPANY BACKGROUND
|
Note 2
|
— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|
Note 3
|
— EARNINGS PER SHARE
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2020
|
|
2019
|
||||
Net (loss) income
|
|
$
|
(7,397
|
)
|
|
$
|
6,155
|
|
|
|
|
|
|
||||
Basic weighted-average common shares outstanding
|
|
129,572
|
|
|
128,730
|
|
||
Add: Dilutive effect of restricted stock
|
|
—
|
|
|
2,033
|
|
||
Add: Dilutive effect of stock options
|
|
—
|
|
|
117
|
|
||
Diluted weighted-average common shares outstanding
|
|
129,572
|
|
|
130,880
|
|
||
|
|
|
|
|
||||
|
|
|
|
|
||||
Basic
|
|
$
|
(0.06
|
)
|
|
$
|
0.05
|
|
Diluted
|
|
$
|
(0.06
|
)
|
|
$
|
0.05
|
|
|
|
March 31, 2020
|
|
March 31, 2019
|
||||
Cash and cash equivalents
|
|
$
|
44,371
|
|
|
$
|
34,032
|
|
Restricted cash included in other current assets
|
|
150
|
|
|
—
|
|
||
Restricted cash included in other long-term assets
|
|
516
|
|
|
482
|
|
||
Total cash, cash equivalents, and restricted cash as shown in the statement of cash flows
|
|
$
|
45,037
|
|
|
$
|
34,514
|
|
|
|
March 31, 2020
|
|
December 31, 2019
|
||||
Finished goods product inventory
|
|
$
|
56,124
|
|
|
$
|
55,585
|
|
In-process mineral inventory
|
|
17,735
|
|
|
25,591
|
|
||
Total product inventory
|
|
73,859
|
|
|
81,176
|
|
||
Current parts inventory, net
|
|
14,001
|
|
|
13,044
|
|
||
Total current inventory, net
|
|
87,860
|
|
|
94,220
|
|
||
Long-term parts inventory, net
|
|
28,403
|
|
|
27,569
|
|
||
Total inventory, net
|
|
$
|
116,263
|
|
|
$
|
121,789
|
|
Note 6
|
— PROPERTY, PLANT, EQUIPMENT, AND MINERAL PROPERTIES
|
|
|
March 31, 2020
|
|
December 31, 2019
|
||||
Land
|
|
$
|
27,265
|
|
|
$
|
27,274
|
|
Ponds and land improvements
|
|
66,081
|
|
|
65,992
|
|
||
Mineral properties and development costs
|
|
143,938
|
|
|
143,988
|
|
||
Buildings and plant
|
|
81,593
|
|
|
81,468
|
|
||
Machinery and equipment
|
|
258,169
|
|
|
253,536
|
|
||
Vehicles
|
|
6,177
|
|
|
6,222
|
|
||
Office equipment and improvements
|
|
9,235
|
|
|
9,136
|
|
||
Operating lease ROU assets
|
|
8,194
|
|
|
8,123
|
|
||
Construction in progress
|
|
4,773
|
|
|
7,124
|
|
||
Total property, plant, equipment, and mineral properties, gross
|
|
$
|
605,425
|
|
|
$
|
602,863
|
|
Less: accumulated depreciation, depletion, and amortization
|
|
(233,368
|
)
|
|
(224,354
|
)
|
||
Total property, plant, equipment, and mineral properties, net
|
|
$
|
372,057
|
|
|
$
|
378,509
|
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2020
|
|
2019
|
||||
Depreciation
|
|
$
|
7,291
|
|
|
$
|
6,855
|
|
Depletion
|
|
1,752
|
|
|
1,418
|
|
||
Amortization of right of use assets
|
|
543
|
|
|
473
|
|
||
Total incurred
|
|
$
|
9,586
|
|
|
$
|
8,746
|
|
Note 7
|
— DEBT
|
•
|
$20 million of Senior Notes, Series A, due April 16, 2020*
|
•
|
$15 million of Senior Notes, Series B, due April 14, 2023
|
•
|
$15 million of Senior Notes, Series C, due April 16, 2025
|
•
|
We are required to maintain a minimum fixed charge coverage ratio of 1.3 to 1.0 as of the last day of each quarter, measured based on the previous four quarters. Our fixed charge coverage ratio as of March 31, 2020, was 7.2 to 1.0, therefore we were in compliance with this covenant.
|
•
|
We are allowed a maximum leverage ratio of 3.5 to 1.0 as of the last day of each quarter, measured based on the previous four quarters. Our leverage ratio as of March 31, 2020, was 1.6 to 1.0, therefore we were in compliance with this covenant.
|
|
March 31, 2020
|
|
December 31, 2019
|
||||
Notes
|
$
|
50,000
|
|
|
$
|
50,000
|
|
Less current portion of long-term debt
|
(20,000
|
)
|
|
(20,000
|
)
|
||
Less deferred financing costs
|
(219
|
)
|
|
(247
|
)
|
||
Long-term debt, net
|
$
|
29,781
|
|
|
$
|
29,753
|
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2020
|
|
2019
|
||||
Interest on Notes and credit facility
|
|
$
|
779
|
|
|
$
|
573
|
|
Amortization of deferred financing costs
|
|
86
|
|
|
68
|
|
||
Gross interest expense
|
|
865
|
|
|
641
|
|
||
Less capitalized interest
|
|
(73
|
)
|
|
(38
|
)
|
||
Interest expense, net
|
|
$
|
792
|
|
|
$
|
603
|
|
Note 8
|
— INTANGIBLE ASSETS
|
Note 9
|
— FINANCIAL INFORMATION FOR SUBSIDIARY GUARANTORS OF POSSIBLE FUTURE
|
Note 10
|
— ASSET RETIREMENT OBLIGATION
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2020
|
|
2019
|
||||
Asset retirement obligation, at beginning of period
|
|
$
|
22,250
|
|
|
$
|
23,125
|
|
Accretion of discount
|
|
435
|
|
|
417
|
|
||
Total asset retirement obligation, at end of period
|
|
$
|
22,685
|
|
|
$
|
23,542
|
|
Note 11
|
— REVENUE
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2020
|
|
2019
|
||||
Beginning balance
|
|
$
|
16,612
|
|
|
$
|
11,678
|
|
Additions
|
|
3,910
|
|
|
—
|
|
||
Recognized as revenue during period
|
|
(3,436
|
)
|
|
(3,161
|
)
|
||
Ending balance
|
|
$
|
17,086
|
|
|
$
|
8,517
|
|
|
|
Three Months Ended March 31, 2020
|
||||||||||||||||||
Product
|
|
Potash Segment
|
|
Trio® Segment
|
|
Oilfield Solutions Segment
|
|
Intersegment Eliminations
|
|
Total
|
||||||||||
Potash
|
|
$
|
29,818
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(129
|
)
|
|
$
|
29,689
|
|
Trio®
|
|
—
|
|
|
21,201
|
|
|
—
|
|
|
—
|
|
|
21,201
|
|
|||||
Water
|
|
583
|
|
|
1,247
|
|
|
6,661
|
|
|
—
|
|
|
8,491
|
|
|||||
Salt
|
|
2,096
|
|
|
133
|
|
|
—
|
|
|
—
|
|
|
2,229
|
|
|||||
Magnesium Chloride
|
|
759
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
759
|
|
|||||
Brines
|
|
535
|
|
|
—
|
|
|
31
|
|
|
—
|
|
|
566
|
|
|||||
Other
|
|
—
|
|
|
—
|
|
|
1,049
|
|
|
—
|
|
|
1,049
|
|
|||||
Total Revenue
|
|
$
|
33,791
|
|
|
$
|
22,581
|
|
|
$
|
7,741
|
|
|
$
|
(129
|
)
|
|
$
|
63,984
|
|
|
|
Three Months Ended March 31, 2019
|
||||||||||||||||||
Product
|
|
Potash Segment
|
|
Trio® Segment
|
|
Oilfield Solutions Segment
|
|
Intersegment Eliminations
|
|
Total
|
||||||||||
Potash
|
|
$
|
28,545
|
|
|
$
|
—
|
|
|
$
|
1,822
|
|
|
$
|
(1,208
|
)
|
|
$
|
29,159
|
|
Trio®
|
|
—
|
|
|
16,550
|
|
|
—
|
|
|
—
|
|
|
16,550
|
|
|||||
Water
|
|
340
|
|
|
942
|
|
|
4,104
|
|
|
—
|
|
|
5,386
|
|
|||||
Salt
|
|
3,001
|
|
|
317
|
|
|
—
|
|
|
—
|
|
|
3,318
|
|
|||||
Magnesium Chloride
|
|
1,740
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,740
|
|
|||||
Brines
|
|
704
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
704
|
|
|||||
Other
|
|
—
|
|
|
—
|
|
|
697
|
|
|
—
|
|
|
697
|
|
|||||
Total Revenue
|
|
$
|
34,330
|
|
|
$
|
17,809
|
|
|
$
|
6,623
|
|
|
$
|
(1,208
|
)
|
|
$
|
57,554
|
|
Note 12
|
— COMPENSATION PLANS
|
|
|
|
|
|
|
Outstanding as of
March 31, 2020 |
|
Restricted Shares
|
|
1,840,557
|
|
|
|
|
|
Non-qualified Stock Options
|
|
3,111,209
|
|
Note 13
|
— INCOME TAXES
|
Note 14
|
— COMMITMENTS AND CONTINGENCIES
|
Note 15
|
— FAIR VALUE
|
Note 16
|
— BUSINESS SEGMENTS
|
Three Months Ended March 31, 2020
|
|
Potash
|
|
Trio®
|
|
Oilfield Solutions
|
|
Other
|
|
Consolidated
|
||||||||||
Sales
|
|
$
|
33,791
|
|
|
$
|
22,581
|
|
|
$
|
7,741
|
|
|
$
|
(129
|
)
|
|
$
|
63,984
|
|
Less: Freight costs
|
|
5,441
|
|
|
6,548
|
|
|
—
|
|
|
(129
|
)
|
|
11,860
|
|
|||||
Warehousing and handling
costs |
|
1,296
|
|
|
1,608
|
|
|
—
|
|
|
—
|
|
|
2,904
|
|
|||||
Cost of goods sold
|
|
22,720
|
|
|
17,430
|
|
|
2,897
|
|
|
—
|
|
|
43,047
|
|
|||||
Lower of cost or net
realizable value inventory adjustments |
|
—
|
|
|
550
|
|
|
|
|
—
|
|
|
550
|
|
||||||
Gross Margin (Deficit)
|
|
$
|
4,334
|
|
|
$
|
(3,555
|
)
|
|
$
|
4,844
|
|
|
$
|
—
|
|
|
$
|
5,623
|
|
Depreciation, depletion, and amortization incurred1
|
|
$
|
7,312
|
|
|
$
|
1,508
|
|
|
$
|
632
|
|
|
$
|
214
|
|
|
$
|
9,666
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Three Months Ended March 31, 2019
|
|
Potash
|
|
Trio®
|
|
Oilfield Solutions
|
|
Other
|
|
Consolidated
|
||||||||||
Sales
|
|
$
|
34,330
|
|
|
$
|
17,809
|
|
|
$
|
6,623
|
|
|
$
|
(1,208
|
)
|
|
$
|
57,554
|
|
Less: Freight costs
|
|
4,640
|
|
|
5,035
|
|
|
781
|
|
|
—
|
|
|
10,456
|
|
|||||
Warehousing and handling
costs |
|
1,267
|
|
|
969
|
|
|
—
|
|
|
—
|
|
|
2,236
|
|
|||||
Cost of goods sold
|
|
19,059
|
|
|
11,074
|
|
|
2,769
|
|
|
(1,208
|
)
|
|
31,694
|
|
|||||
Gross Margin
|
|
$
|
9,364
|
|
|
$
|
731
|
|
|
$
|
3,073
|
|
|
$
|
—
|
|
|
$
|
13,168
|
|
Depreciation, depletion, and amortization incurred1
|
|
$
|
6,795
|
|
|
$
|
1,558
|
|
|
$
|
190
|
|
|
$
|
203
|
|
|
$
|
8,746
|
|
ITEM 2.
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
|
•
|
changes in the price, demand, or supply of our products and services;
|
•
|
challenges to our water rights;
|
•
|
our ability to successfully identify and implement any opportunities to grow our business whether through expanded sales of water, Trio®, byproducts, and other non-potassium related products or other revenue diversification activities;
|
•
|
our ability to integrate the Intrepid South assets into our existing business and achieve the expected benefits of the acquisition;
|
•
|
our ability to sell Trio® internationally and manage risks associated with international sales, including pricing pressure and freight costs;
|
•
|
the costs of, and our ability to successfully execute, any strategic projects;
|
•
|
declines or changes in agricultural production or fertilizer application rates;
|
•
|
declines in the use of potassium-related products or water by oil and gas companies in their drilling operations;
|
•
|
our ability to prevail in outstanding legal proceedings against us;
|
•
|
our ability to comply with the terms of our senior notes and our revolving credit facility, including the underlying covenants, to avoid a default under those agreements;
|
•
|
further write-downs of the carrying value of assets, including inventories;
|
•
|
circumstances that disrupt or limit production, including operational difficulties or variances, geological or geotechnical variances, equipment failures, environmental hazards, and other unexpected events or problems;
|
•
|
changes in reserve estimates;
|
•
|
currency fluctuations;
|
•
|
adverse changes in economic conditions or credit markets;
|
•
|
the impact of governmental regulations, including environmental and mining regulations, the enforcement of those regulations, and governmental policy changes;
|
•
|
adverse weather events, including events affecting precipitation and evaporation rates at our solar solution mines;
|
•
|
increased labor costs or difficulties in hiring and retaining qualified employees and contractors, including workers with mining, mineral processing, or construction expertise;
|
•
|
changes in the prices of raw materials, including chemicals, natural gas, and power;
|
•
|
our ability to obtain and maintain any necessary governmental permits or leases relating to current or future operations;
|
•
|
interruptions in rail or truck transportation services, or fluctuations in the costs of these services;
|
•
|
our inability to fund necessary capital investments;
|
•
|
the impact of the novel coronavirus (COVID-19) pandemic on our business, operations, liquidity, financial condition and results of operations;
|
•
|
our ability to regain compliance with the continued listing criteria of the New York Stock Exchange (“NYSE”); and
|
•
|
the other risks, uncertainties, and assumptions described in Item 1A. Risk Factors of our Annual Report on Form 10-K for the year ended December 31, 2019, as updated by our subsequent Quarterly Reports on Form 10-Q, including Item 1A. Risk Factors of the Quarterly Report.
|
(in thousands, except per ton amounts)
|
|
Three Months Ended March 31,
|
||||||
|
|
2020
|
|
2019
|
||||
Sales1
|
|
$
|
63,984
|
|
|
$
|
57,554
|
|
|
|
|
|
|
||||
Cost of goods sold
|
|
$
|
43,047
|
|
|
$
|
31,694
|
|
|
|
|
|
|
||||
Gross Margin
|
|
$
|
5,623
|
|
|
$
|
13,168
|
|
|
|
|
|
|
||||
Selling and administrative
|
|
$
|
6,599
|
|
|
$
|
5,807
|
|
|
|
|
|
|
||||
Net (Loss) Income
|
|
$
|
(7,397
|
)
|
|
$
|
6,155
|
|
|
|
|
|
|
||||
Average net realized sales price per ton2
|
|
|
|
|
||||
Potash
|
|
$
|
255
|
|
|
$
|
288
|
|
Trio®
|
|
$
|
193
|
|
|
$
|
206
|
|
|
|
Three Months Ended March 31,
|
||||||
(in thousands, except per ton amounts)
|
|
2020
|
|
2019
|
||||
Sales1
|
|
$
|
33,791
|
|
|
$
|
34,330
|
|
Less: Freight costs
|
|
5,441
|
|
|
4,640
|
|
||
Warehousing and handling
costs |
|
1,296
|
|
|
1,267
|
|
||
Cost of goods sold
|
|
22,720
|
|
|
19,059
|
|
||
Gross Margin
|
|
$
|
4,334
|
|
|
$
|
9,364
|
|
Depreciation, depletion, and amortization incurred2
|
|
$
|
7,312
|
|
|
$
|
6,795
|
|
|
|
|
|
|
||||
Potash sales volumes (in tons)
|
|
99
|
|
|
88
|
|
||
Potash production volumes (in tons)
|
|
137
|
|
|
110
|
|
||
|
|
|
|
|
||||
Average potash net realized sales price per ton3
|
|
$
|
255
|
|
|
$
|
288
|
|
|
|
Three Months Ended March 31,
|
||||||
(in thousands, except per ton amounts)
|
|
2020
|
|
2019
|
||||
Sales1
|
|
$
|
22,581
|
|
|
$
|
17,809
|
|
Less: Freight costs
|
|
6,548
|
|
|
5,035
|
|
||
Warehousing and handling
costs |
|
1,608
|
|
|
969
|
|
||
Cost of goods sold
|
|
17,430
|
|
|
11,074
|
|
||
Lower of cost or net realizable
value inventory adjustments |
|
550
|
|
|
—
|
|
||
Gross (Deficit) Margin
|
|
$
|
(3,555
|
)
|
|
$
|
731
|
|
Depreciation, depletion, and amortization incurred2
|
|
$
|
1,508
|
|
|
$
|
1,558
|
|
|
|
|
|
|
||||
Sales volumes (in tons)
|
|
76
|
|
|
56
|
|
||
Production volumes (in tons)
|
|
50
|
|
|
63
|
|
||
|
|
|
|
|
||||
Average Trio® net realized sales price per ton3
|
|
$
|
193
|
|
|
$
|
206
|
|
|
|
United States
|
|
Export
|
For the Three Months Ended March 31, 2020
|
|
70%
|
|
30%
|
|
|
|
|
|
For the Three Months Ended March 31, 2019
|
|
72%
|
|
28%
|
|
|
Three Months Ended March 31,
|
||||||
(in thousands)
|
|
2020
|
|
2019
|
||||
Sales
|
|
$
|
7,741
|
|
|
$
|
6,623
|
|
Less: Freight costs
|
|
—
|
|
|
781
|
|
||
Cost of goods sold
|
|
2,897
|
|
|
2,769
|
|
||
Gross Margin
|
|
$
|
4,844
|
|
|
$
|
3,073
|
|
Depreciation, depletion, and amortization incurred
|
|
$
|
632
|
|
|
$
|
190
|
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2020
|
|
2019
|
||||
Cash flows provided by operating activities
|
|
$
|
14,771
|
|
|
$
|
8,121
|
|
Cash flows used in investing activities
|
|
$
|
(924
|
)
|
|
$
|
(7,208
|
)
|
Cash flows provided by (used in) financing activities
|
|
$
|
9,951
|
|
|
$
|
(103
|
)
|
•
|
$20 million of Senior Notes, Series A, due April 16, 2020
|
•
|
$15 million of Senior Notes, Series B, due April 14, 2023
|
•
|
$15 million of Senior Notes, Series C, due April 16, 2025
|
•
|
We are required to maintain a minimum fixed charge coverage ratio of 1.3 to 1.0 as of the last day of each quarter, measured based on the previous four quarters. Our fixed charge coverage ratio as of March 31, 2020, was 7.2 to 1.0, therefore we were in compliance with this covenant.
|
•
|
We are allowed a maximum leverage ratio of 3.5 to 1.0 as of the last day of each quarter, measured based on the previous four quarters. Our leverage ratio as of March 31, 2020, was 1.6 to 1.0, therefore we were in compliance with this covenant.
|
|
March 31, 2020
|
|
December 31, 2019
|
||||
Notes
|
$
|
50,000
|
|
|
$
|
50,000
|
|
Less current portion of long-term debt
|
(20,000
|
)
|
|
(20,000
|
)
|
||
Less deferred financing costs
|
(219
|
)
|
|
(247
|
)
|
||
Long-term debt, net
|
$
|
29,781
|
|
|
$
|
29,753
|
|
|
|
Three Months Ended March 31,
|
||||||||||||||
|
|
2020
|
|
2019
|
||||||||||||
(in thousands, except per ton amounts)
|
|
Potash
|
|
Trio®
|
|
Potash
|
|
Trio®
|
||||||||
Total Segment Sales
|
|
$
|
33,791
|
|
|
$
|
22,581
|
|
|
$
|
34,330
|
|
|
$
|
17,809
|
|
Less: Segment byproduct sales
|
|
3,973
|
|
|
1,380
|
|
|
5,785
|
|
|
1,259
|
|
||||
Freight costs
|
|
4,540
|
|
|
6,534
|
|
|
3,242
|
|
|
5,035
|
|
||||
Subtotal
|
|
$
|
25,278
|
|
|
$
|
14,667
|
|
|
$
|
25,303
|
|
|
$
|
11,515
|
|
|
|
|
|
|
|
|
|
|
||||||||
Divided by:
|
|
|
|
|
|
|
|
|
||||||||
Tons sold
|
|
99
|
|
|
76
|
|
|
88
|
|
|
56
|
|
||||
Average net realized sales price per ton
|
|
$
|
255
|
|
|
$
|
193
|
|
|
$
|
288
|
|
|
$
|
206
|
|
ITEM 3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
ITEM 1.
|
LEGAL PROCEEDINGS
|
ITEM 1A.
|
RISK FACTORS
|
ITEM 2.
|
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
Issuer Purchases of Equity Securities
|
|||||||||||
Period
|
|
(a)
Total Number of Shares Purchased1 |
|
(b)
Average Price Paid Per Share |
|
(c)
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs |
|
(d)
Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plan or Programs |
|||
January 1, 2020, through January 31, 2020
|
|
—
|
|
|
—
|
|
|
—
|
|
N/A
|
|
February 1, 2020, through February 29, 2020
|
|
—
|
|
|
—
|
|
|
—
|
|
N/A
|
|
March 1, 2020, through March 31, 2020
|
|
47,361
|
|
|
$
|
1.04
|
|
|
—
|
|
N/A
|
Total
|
|
47,361
|
|
|
$
|
1.04
|
|
|
—
|
|
N/A
|
ITEM 3.
|
DEFAULTS UPON SENIOR SECURITIES
|
ITEM 5.
|
OTHER INFORMATION
|
ITEM 6.
|
EXHIBITS
|
Exhibit No.
|
|
Description
|
|
Certification of Principal Executive Officer pursuant to Rule 13a-14(a) and 15d-14(a), as amended.*
|
|
|
|
|
|
Certification of Principal Financial Officer pursuant to Rule 13a-14(a) and 15d-14(a), as amended.*
|
|
|
|
|
|
Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**
|
|
|
|
|
|
Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**
|
|
|
|
|
|
Mine Safety Disclosure Exhibit.*
|
|
|
|
|
101.INS
|
|
XBRL Instance Document.*
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema.*
|
|
|
|
101.CAL
|
|
XBRL Extension Calculation Linkbase.*
|
|
|
|
101.LAB
|
|
XBRL Extension Label Linkbase.*
|
|
|
|
101.PRE
|
|
XBRL Extension Presentation Linkbase.*
|
|
|
|
101.DEF
|
|
XBRL Extension Definition Linkbase.*
|
*
|
Filed herewith.
|
**
|
Furnished herewith.
|
|
|
INTREPID POTASH, INC.
(Registrant) |
|
|
|
Dated: May 7, 2020
|
|
/s/ Robert P. Jornayvaz III
|
|
|
Robert P. Jornayvaz III - Executive Chairman of the Board, President, and Chief Executive Officer
(Principal Executive Officer and Duly Authorized Officer) |
|
|
|
Dated: May 7, 2020
|
|
/s/ Matthew D. Preston
|
|
|
Matthew D. Preston - Vice President - Finance
(Principal Financial Officer and Principal Accounting Officer)
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Intrepid Potash, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's Board of Directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Dated: May 7, 2020
|
|
/s/ ROBERT P. JORNAYVAZ III
|
|
|
Robert P. Jornayvaz III
Executive Chairman of the Board, President, and Chief Executive Officer
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Intrepid Potash, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's Board of Directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Dated: May 7, 2020
|
|
/s/ MATTHEW D. PRESTON
|
|
|
Matthew D. Preston
Vice President - Finance
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"); and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.
|
Dated: May 7, 2020
|
|
/s/ ROBERT P. JORNAYVAZ III
|
|
|
Robert P. Jornayvaz III
Executive Chairman of the Board, President, and Chief Executive Officer
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"); and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.
|
Dated: May 7, 2020
|
|
/s/ MATTHEW D. PRESTON
|
|
|
Matthew D. Preston
Vice President - Finance
|
Mine Name and MSHA Identification Number
|
Section 104 S&S Citations
|
Section 104(b) Orders
|
Section 104(d) Citations and Orders
|
Section 110(b)(2) Violations
|
Section 107(a) Orders
|
Total Dollar Value of MSHA Assessments Proposed
|
Total Number of Mining-Related Fatalities
|
Received Notice of Pattern of Violations Under Section 104(e)
|
Received Notice of Potential to Have Pattern under Section 104(e)
|
Legal Actions Pending as of the End of the Period
|
Legal Actions Initiated During the Period
|
Legal Actions Resolved During the Period
|
Intrepid Potash East
(29-00170)
|
1
|
—
|
—
|
—
|
—
|
$322
|
—
|
—
|
—
|
—
|
—
|
—
|
Intrepid Potash West
(29-00175)
|
—
|
—
|
—
|
—
|
—
|
$123
|
—
|
—
|
—
|
—
|
—
|
—
|
Intrepid Potash North
(29-02028)
|
—
|
—
|
—
|
—
|
—
|
$123
|
—
|
—
|
—
|
—
|
—
|
—
|
•
|
General - In general, the number of citations and orders will vary depending on the size of the mine, the individual inspector assigned to the mine, and the specific mine characteristics. Citations and orders can be contested and appealed and, in that process, are often reduced in severity and amount and are sometimes vacated.
|
•
|
MSHA Identification Numbers - MSHA assigns an identification number to each mine and may or may not assign separate identification numbers to related facilities. We provide the information in the table by MSHA identification number.
|
•
|
Section 104 Significant and Substantial (“S&S”) Citations - These citations are issued for alleged violations of a mining safety standard or regulation where there exists a reasonable likelihood that the hazard contributed to or will result in an injury or illness of a reasonably serious nature.
|
•
|
Section 104(b) Orders - These orders are issued for alleged failure to totally abate the subject matter of a Section 104(a) citation within the period specified in the citation.
|
•
|
Section 104(d) Citations and Orders - These citations and orders are issued for an alleged unwarrantable failure (i.e., aggravated conduct constituting more than ordinary negligence) to comply with a mining safety standard or regulation.
|
•
|
Section 110(b)(2) Violations - These violations are issued, and penalties are assessed, for flagrant violations (i.e., a reckless or repeated failure to make reasonable efforts to eliminate a known violation that substantially and proximately caused, or reasonably could have been expected to cause, death or serious bodily injury).
|
•
|
Section 107(a) Orders - These orders are issued for an imminent danger to immediately remove miners.
|
•
|
Total Dollar Value of MSHA Assessments Proposed - Proposed assessments issued during the period do not necessarily relate to the citations or orders issued by MSHA during that period or to the pending legal actions reported in the table.
|
•
|
Notice of Pattern of Violations Under Section 104(e); Notice of Potential to Have Pattern under Section 104(e) - These notices are issued for a pattern of violation of mandatory health or safety standards or for the potential to have such a pattern.
|
•
|
Legal Actions Pending, Initiated, and Resolved - The Federal Mine Safety and Health Review Commission (the “Commission”) is an independent adjudicative agency that provides administrative trial and appellate review of legal disputes arising under the Mine Act. Each legal action is assigned a docket number by the Commission and may have as its subject matter one or more citations, orders, penalties, or complaints.
|
Mine Name and MSHA Identification Number
|
Contests of Citations and Orders
|
Contests of Proposed Penalties
|
Complaints for Compensation
|
Complaints of Discharge, Discrimination or Interference
|
Applications for Temporary Relief
|
Appeals of Judges’ Decisions or Orders
|
Total
|
Intrepid Potash East
(29-00170)
|
--
|
—
|
—
|
—
|
—
|
—
|
—
|
Intrepid Potash West
(29-00175)
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
Intrepid Potash North
(29-02028)
|
--
|
—
|
—
|
—
|
—
|
—
|
—
|
•
|
Contests of Citations and Orders relate to challenges by operators, miners or miners' representatives to the issuance of a citation or order issued by MSHA.
|
•
|
Contests of Proposed Penalties (Petitions for Assessment of Penalties) are administrative proceedings challenging a civil penalty that MSHA has proposed for the violation contained in a citation or order.
|
•
|
Complaints for Compensation are filed by miners entitled to compensation when a mine is closed by certain withdrawal orders issued by MSHA for the purpose of determining the amount of compensation, if any, due miners idled by the orders.
|
•
|
Complaints of Discharge, Discrimination or Interference involve a miner's allegation that he or she has suffered a wrong by the operator because he or she engaged in some type of activity protected under the Mine Act, such as making a safety complaint, or that he or she has suffered discrimination and lost his or her position.
|