Intrepid Potash Inc
For the period ended Jun 30, 2024. Filed Aug 6, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 6, 2024
IPI$32.90+4.9%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-09.
0001421461-24-000022
ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-06.
0001421461-24-000027
ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 144 previous paragraphs and 180 current paragraphs.
81 unchanged; 53 reworded; 34 added; 10 removed; 0 previous and 12 current paragraphs rearranged.
Tables are not compared: 8 previous and 8 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (34)
Current report
•Trio® pricing and demand. Our Trio® average net realized sales price per ton(1) decreased to $314 and $306 for the three and six months ended June 30, 2024, respectively, compared to $333 and $339, respectively, for the same periods in 2023. Sales volumes in the six months ended June 30, 2024 increased 20% compared to the same period in 2023 on supportive sulfate values and better than expected late season demand into row crop markets. In response to recent price decreases in potash and sulfate products, in late July, we announced a Trio® summer-fill program which reduced the Carlsbad posted price by $25 per ton during a one week order window for delivery during the third quarter of 2024. After the order window closes, the Carlsbad posted price increased by $15 per ton for spot orders.
Current report
1 Sales include sales of byproducts which were $6.0 million and $7.7 million for the three months ended June 30, 2024, and 2023, respectively, and $11.4 million and $14.2 million for the six months ended June 30, 2024, and 2023, respectively.
Current report
Our total sales for the three months ended June 30, 2024 decreased $19.0 million, or 23%, compared to the same period in 2023, as potash segment sales decreased $17.2 million, or 36%, Trio® segment sales decreased by $2.2 million, or 8%, partially offset by a $0.4 million, or 8%, increase in oilfield solutions segment sales.
Current report
Our total potash segment sales decreased $17.2 million for the three months ended June 30, 2024 compared to the same period in 2023, as potash sales decreased $16.9 million and potash segment byproduct sales decreased $0.3 million. Our average net realized sales price per potash ton decreased 15%, and we sold 30% fewer tons. Potash prices declined during 2024, compared to 2023, as global production rates and available inventory have improved. Potash tons sold decreased compared to the prior year because we had fewer tons of potash available to sell due to reduced production rates at our HB and Wendover facilities.
Current report
Our Trio®segment sales decreased $2.2 million in the three months ended June 30, 2024, compared to the same period in 2023, as Trio®sales decreased $0.8 million, or 3%, and Trio®segment byproduct water sales decreased $1.5 million. Our Trio®average net realized sales price per ton decreased 6% in the three months ended June 30, 2024, compared to the same period in 2023, while Trio®tons sold were unchanged. Trio®prices fell as potash prices declined. We sold less Trio®segment byproduct water as we increased the volume of water used for injection at our HB plant and had fewer overall sales of water from our Caprock water rights.
Current report
Our total cost of goods sold decreased $11.3 million during the three months ended June 30, 2024, compared to the same period in 2023. Our potash cost of goods sold decreased $7.2 million combined with a $3.6 million decrease in Trio®cost of goods sold and a $0.4 million decrease in our oilfield solutions cost of goods sold.
Current report
Our potash segment cost of goods sold decreased $7.2 million, or 25%, mainly due to selling 30% fewer tons in the three months ended June 30, 2024, compared to the same period in 2023.
Current report
Our Trio® segment cost of goods sold decreased $3.6 million, or 18%, during the three months ended June 30, 2024, compared to the same period in 2023, although tons sold were flat. Our Trio®cost of goods sold was positively impacted by decreases in certain production costs, such as production labor and benefits expense, as we stopped operating an additional underground shift in early 2024 at our East facility and restarted our fine langbeinite recovery process in March 2024. In addition, we produced 17% more tons of Trio®in the three months ended June 30, 2024, compared to the same period in 2023, which lowered our per ton production costs. A significant portion of our Trio®production costs are fixed and an increase in tons produced decreases our per ton production costs.
Current report
Our oilfield solutions cost of goods sold decreased $0.4 million, or 11%, during the three months ended June 30, 2024, compared to the same period in 2023, due to a decrease in labor expenses, partially offset by an increase in royalty expense due to an increase in sales revenue.
Current report
Impairment Expense
Current report
During the year ended December 31, 2023, we recorded an impairment related to our Trio®segment assets because the net book value exceeded the estimated fair value of the assets. The fair value of the Trio®segment assets was primarily determined using the expected proceeds received in an orderly sale of the individual assets. For any Trio®segment capital spending during the three months ended June 30, 2024, we also estimated the fair value of those assets using the expected proceeds received in an orderly sale of those new assets and recorded an impairment of $0.8 million in the three months ended June 30, 2024.
Current report
Other Operating Income
Current report
Other operating income increased $0.8 million in the second quarter of 2024, compared to the second quarter of 2023, due to other operating income recorded related to the Third Amendment to the Cooperative Development Agreement (the "Amendment") we signed with XTO in December 2023, that became effective as of January 1, 2024. As discussed in further detail in Footnote 7 - Other Long-term Deferred Income to the Condensed Consolidated Financial Statements, we are recognizing as other operating income the estimated transaction price associated with the Amendment on a straight-line basis over the term of the Amendment.
Current report
We generated a net loss of $0.8 million during the three months ended June 30, 2024, compared to net income of $4.3 million in the same period 2023, due to the factors discussed above.
Current report
Our potash segment cost of goods sold decreased $13.0 million, or 22%, mainly due to selling 23% fewer tons in the first half of 2024, compared to the first half of 2023.
Current report
Gross Margin
Current report
During the six months ended June 30, 2024, we generated gross margin of $14.1 million compared to gross margin of $31.7 million during the same period in 2023. As discussed above, our gross margin decreased mainly due to the lower average net realized sales price per ton for potash and Trio®products and we sold fewer tons of potash in the six months June 30, 2024, compared to the same period in 2023. In addition, we recorded lower of cost or net realizable value inventory adjustments of $1.9 million during the six months ended June 30, 2024.
Current report
Impairment Expense
Current report
During the year ended December 31, 2023, we recorded an impairment related to our Trio®segment assets because the net book value exceeded the estimated fair value of the assets. The fair value of the Trio®segment assets was primarily determined using the expected proceeds received in an orderly sale of the individual assets. For any Trio®segment capital spending during the six months ended June 30, 2024, we also estimated the fair value of those assets using the expected proceeds received in an orderly sale of those new assets and recorded an impairment of $2.2 million.
Current report
Other Operating Income
Current report
Other operating income increased $1.9 million in the six months ended June 30, 2024, compared to the same period in 2023, due to other operating income recorded related to the Third Amendment to the Cooperative Development we signed with XTO in December 2023, that became effective as of January 1, 2024. As discussed in further detail in Footnote 7 - Other Long-term Deferred Income to the Condensed Consolidated Financial Statements, we are recognizing as other operating income the estimated transaction price associated with the Amendment on a straight-line basis over the term of the Amendment.
Current report
Income Tax Expense
Current report
Net Income
Current report
1 Sales include sales of byproducts which were $5.9 million and $6.2 million for the three months ended June 30, 2024, and 2023, respectively, and $11.1 million and $11.5 million for the six months ended June 30, 2024, and 2023, respectively.
Current report
Our potash segment cost of goods sold decreased 25% in the second quarter of 2024, compared to the second quarter of 2023, as we sold 30% fewer tons of potash.
Current report
During the second quarter of 2024, we recorded lower of cost or net realizable value inventory adjustments of $1.4 million as our weighted average carrying cost per ton for inventoried potash products at our HB and Wendover facilities was higher than our expected average net realizable sales price per ton for those products. Because potash production at our HB and Wendover facilities was below historical production levels in 2023, our weighted average production costs at those facilities increased which increased our weighted average carrying costs. A significant portion of our potash production costs are fixed and a decrease in potash tons produced increases our potash production costs per ton. We did not record any lower of cost or net realized value inventory adjustments in the second quarter of 2023.
Current report
Our potash segment cost of goods sold decreased 22% in the first half of 2024, compared to the first half of 2023, mainly due to selling 23% fewer tons of potash.
Current report
Our potash segment gross margin decreased $18.4 million in the first half of 2024, compared to the first half of 2023, due to the factors discussed above.
Current report
1 Sales include sales of byproducts which were $0.1 million and $1.5 million for the three months ended June 30, 2024, and 2023, respectively, and $0.3 million and $2.7 million for the six months ended June 30, 2024, and 2023, respectively.
Current report
Trio® segment sales decreased 8% during the three months ended June 30, 2024, compared to the same period in 2023. Trio® sales decreased $0.8 million, and our Trio® segment byproduct sales decreased $1.4 million. Trio® sales decreased primarily due to a 6% decrease in our average net realized sales price per ton while tons sold was unchanged. Similar to potash prices discussed above, our Trio®average net realized sales price per ton has decreased as potassium fertilizer supplies improved.
Current report
Trio®freight costs increased 6%, in the second quarter of 2024, compared to the second quarter of 2023, while sales volumes were unchanged. Our Trio®freight expense is impacted by the geographic distribution of our Trio® sales and by the proportion of customers arranging for and paying their own freight costs.
Current report
Our Trio®segment experienced a gross margin of $2.2 million in the three months ended June 30, 2024, compared to gross margin of $1.2 million in the three months ended June 30, 2023, mainly due to the decrease in our Trio® cost of goods sold.
Current report
Gross margin for the three months ended June 30, 2024, increased $2.4 million compared to the same period in 2023, due to the factors discussed above.
Removed paragraphs (10)
Previous report
•Trio® pricing and demand. Our Trio® average net realized sales price per ton(1) decreased to $300 for the three months ended March 31, 2024, compared to $344 in 2023. Sales volumes increased 40% in the first quarter of 2024 compared to the same period in 2023 as stable potash price levels and improving sulfate values led to strong demand from historical customers. In response to the strong demand during the first quarter, we increased our Trio® pricing $25 per ton and expect to capture the majority of that increase in the second quarter.
Previous report
We continue to progress on a sand mine opportunity at Intrepid South and have received all necessary permits to begin construction and full operation. We are currently evaluating the market and our options, including the potential to add a strategic partner.
Previous report
1 Sales include sales of byproducts which were $5.4 million and $6.6 million for the three months ended March 31, 2024, and 2023, respectively.
Previous report
Cost of Goods Sold
Previous report
Selling and Administrative Expense
Previous report
During the first quarter of 2024, selling and administrative expenses decreased 6% compared to the first quarter of 2023, mainly due to a decrease in share-based compensation expense.
Previous report
1 Sales include sales of byproducts which were $5.2 million and $5.3 million for the three months ended March 31, 2024, and 2023, respectively.
Previous report
Our potash segment cost of goods sold decreased 18% in the first quarter of 2024, compared to the first quarter of 2023, as we sold 17% fewer tons of potash. In addition, our beginning 2024 weighted average carrying cost per ton was reduced by the lower of cost or net realizable value inventory adjustment that was recorded during the fourth quarter of 2023.
Previous report
1 Sales include sales of byproducts which were $0.2 million and $1.2 million for the three months ended March 31, 2024, and 2023, respectively.
Previous report
Cost of Goods Sold
Reworded paragraphs (53)
Previous wording
•our reliance on key personnel, including our ability to identify, recruit, and retain key personnel;
Current wording
•changes in management and the board of directors, and our reliance on key personnel, including our ability to identify, recruit, and retain key personnel;
Previous wording
•the impact of global health issues, such as the COVID-19 pandemic, and other global disruptions on our business, operations, liquidity, financial condition and results of operations; and
Current wording
•the impact of global health issues, and other global disruptions on our business, operations, liquidity, financial condition and results of operations; and
Previous wording
•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, 2023.
Current wording
•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, 2023, this Quarterly Report and in other reports we file with the SEC.
Previous wording
Our extraction and production operations are conducted entirely in the continental U.S. We produce potash from three solution mining facilities: our HB solution mine in Carlsbad, New Mexico, our solution mine in Moab, Utah, and our brine recovery mine in Wendover, Utah. We also operate our North compaction facility in Carlsbad, New Mexico, which compacts and granulates product from the HB mine. We produce Trio® from our conventional underground East mine in Carlsbad, New Mexico. Until mid-2016, we also produced potash from our East and West mines in Carlsbad, New Mexico.
Current wording
Our extraction and production operations are conducted entirely in the continental U.S. We produce potash from three solution mining facilities: our HB solution mine in Carlsbad, New Mexico, our solution mine in Moab, Utah, and our brine recovery mine in Wendover, Utah. We also operate our North compaction facility in Carlsbad, New Mexico, which compacts and granulates product from the HB mine. We produce Trio® from our conventional underground East mine in Carlsbad, New Mexico.
Previous wording
•Potash pricing and demand. Our potash average net realized sales price per ton(1) decreased to $395 for the three months ended March 31, 2024, compared to $485 for the same period in 2023. Sales volume declined 17% in the first quarter of 2024 compared to the same period in 2023 as we had less inventory to sell because of lower production at our HB and Wendover facilities. In January 2024, a winter-fill agricultural potash program was announced decreasing the list price to $385 per ton in January 2024 during a ten-day order window, before the list price increased by $30 per ton. We saw a good response to the program and captured a portion of the price increase as customers placed additional orders towards the end of the first quarter.
Current wording
•Potash pricing and demand. Our potash average net realized sales price per ton(1) decreased to $405 and $399 for the three and six months ended June 30, 2024, respectively, compared to $479 and $485, respectively, for the same periods in 2023. Sales volume declined 30% and 23% in the three and six months ended June 30, 2024, respectively, compared to the same periods in 2023 as we had less inventory to sell because of lower production at our HB and Wendover facilities. In June 2024, a summer-fill agricultural potash program was announced decreasing the corn belt reference price to $335 per ton during a ten-day order window for delivery during the third quarter of 2024. After the ten-day order window closed, the list price increased by $20 per ton for spot orders.
Previous wording
We experience seasonality in potash demand, with more purchases historically occurring in February through May and September through November when purchasers are looking to have product on hand for the spring and fall application seasons in the U.S. Various factors affect potash sales and shipments, thereby increasing volatility of sales volumes from quarter to quarter and season to season. The specific timing of when farmers apply potash remains highly weather dependent and varies across the numerous growing regions within the U.S. The timing of potash sales is also significantly influenced by the marketing programs of potash producers, as well as storage volumes closer to the farm gate.
Current wording
Various factors affect potash sales and shipments, which increases the volatility of sales volumes from quarter to quarter and season to season. We experience seasonality in potash demand, with more purchases historically occurring in February through May and September through November when purchasers are looking to have product on hand for the spring and fall application seasons in the U.S. The specific timing of when farmers apply potash remains highly weather dependent and varies across the numerous growing regions within the U.S. The timing of potash sales is also significantly influenced by the marketing programs of potash producers, as well as storage volumes closer to the farm gate.
Previous wording
•Water sales. In the first quarter of 2024, total water sales were $2.2 million compared to $2.7 million during the same period of 2023. Water sales decreased compared to the prior year due to less water sold from our Caprock water rights.
Current wording
•Water sales. In the three and six months ended June 30, 2024, total water sales were $2.6 million and $4.7 million, respectively, compared to $4.1 million and $6.9 million during the same periods of 2023. Water sales decreased compared to the prior year due to less water sold from our Caprock water rights as we maximize injection rates at our HB mine and less water sold on our South ranch due to timing of fracs and increased demand for our brine water.
Previous wording
•Byproduct sales. We sell byproducts such as salt, magnesium chloride, brines, and water that are derived from our potash and Trio® operations. Byproduct sales were $5.4 million during the first quarter of 2024, compared to $6.6 million for the same period of 2023 as increased brine sales were offset by decreased sales of magnesium chloride and water.
Current wording
•Byproduct sales. We sell byproducts such as salt, magnesium chloride, brines, and water that are derived from our potash and Trio® operations. Byproduct sales were $6.0 million during the second quarter of 2024, compared to $7.7 million for the same period of 2023. Byproduct sales were $11.4 million during the first half of 2024, compared to $14.2 million for the same period of 2023 as increased brine sales were offset by decreased sales of magnesium chloride and water. We expect minimal, if any, byproduct sales of water in the second half of 2024 as we continue to maximize injection rates at our HB mine.
Previous wording
–We substantially completed the replacement extraction well at our HB Solar Solution Mine, IP30B, in April 2024 and expect the well will be commissioned in the second quarter of 2024. This new extraction well is designed to have a long-term operational life and will initially target approximately 330 million gallons of high-grade brine from the Eddy Cavern at HB, with this additional brine being at lower depths than the Eddy Shaft project can access.
Current wording
–We commissioned a new extraction well at our HB Solar Solution Mine, IP30B, in June 2024. This new extraction well is designed to have a long-term operational life and will initially target approximately 330 million gallons of high-grade brine from the Eddy Cavern at the HB mine, with this additional brine being at lower depths than the Eddy Shaft project can access.
Previous wording
–Phase Two of the HB Injection Pipeline Project is the installation of an in-line pigging system to clean the pipeline and remove scaling to help ensure more consistent flow rates. We have received all permits and started construction in April 2024 with commissioning expected in the third quarter of 2024. Upon Phase Two commissioning, we expect our brine injection rates to be the highest in company history, which is key for maximizing brine availability and residence time.
Current wording
–Phase Two of the HB Injection Pipeline Project is the installation of an in-line pigging system to clean the pipeline and remove scaling to help ensure more consistent flow rates. All pipeline was installed and tanks were set, and we expect to commission the project in the third quarter of 2023.
Previous wording
–We continue to progress on a new primary pond in Wendover to increase the brine evaporative area, which will result in two primary ponds when complete. Similar to our caverns at Moab and HB, the primary ponds at Wendover serve as the brine storage area, and adding another primary pond will help us meet our goals of maximizing brine availability, increasing brine grade, and improving production. We expect this project to be commissioned in the second quarter of 2024.
Current wording
–We completed the construction of a new primary pond in Wendover in June 2024 and are in the process of filling the pond with brine. Similar to our caverns at the Moab and HB mines, the primary ponds at Wendover serve as the brine storage area, and adding another primary pond will help us meet our goals of maximizing brine availability, increasing brine grade, and improving production. We expect to see the production benefits of the new primary pond beginning in the fall of 2025.
Previous wording
• Diversification of products and services. In addition to the products discussed above, Intrepid generates revenue from right-of-way agreements, surface damages and easements, caliche sales, a produced water royalty, and sales of cattle.
Current wording
• Diversification of products and services. In addition to the products discussed above, we generate revenue from right-of-way agreements, surface damages and easements, caliche sales, a produced water royalty, and sales of cattle.
Previous wording
Our total byproduct sales, which are recorded in either our potash segment or Trio® segment, decreased $1.2 million in the first quarter of 2024, compared to the first quarter of 2023, due to a decrease in byproduct water sales. We did not sell any byproduct water as we increased the volume of water used for injection at our HB plant and had fewer overall sales of water from our Caprock water rights.
Current wording
Our total byproduct sales, which are recorded in either our potash segment or Trio® segment, decreased $1.7 million in the three months ended June 30, 2024, compared to the same period in 2023, due to a decrease in byproduct water sales. We did not sell any byproduct water as we increased the volume of water used for injection at our HB plant and had fewer overall sales of water from our Caprock water rights.
Previous wording
During the first quarter of 2024, we generated gross margin of $6.4 million compared to gross margin of $16.4 million during the first quarter of 2023. As discussed above, our gross margin decreased due to the lower average net realized sales price per ton for potash and Trio®products. In addition, we sold fewer tons of potash in the first quarter of 2024, compared to the first quarter of 2023.
Current wording
During the three months ended June 30, 2024, we generated gross margin of $7.6 million compared to gross margin of $15.4 million during the same period in 2023. As discussed above, our gross margin decreased due to the lower average net realized sales price per ton for potash and Trio®products. In addition, we sold fewer tons of potash in the second quarter of 2024, compared to the second quarter of 2023. Also, we recorded $1.4 million of lower of cost or net realizable value inventory adjustments for potash during the three months ended June 30, 2024.
Previous wording
During the first quarter of 2024, we incurred income tax benefit of $0.8 million, compared to income tax expense of $1.8 million during the first quarter of 2023, as we incurred a net loss during the first quarter of 2024, compared to net income in the first quarter of 2023.
Current wording
During the three months ended June 30, 2024, we incurred income tax benefit of $0.3 million, compared to income tax expense of $2.0 million during the same period in 2023, as we incurred a net loss during the three months ended June 30, 2024, compared to net income in the same period in 2023.
Previous wording
Our total sales for the first quarter of 2024 decreased $7.6 million, or 9%, compared to the first quarter of 2023, as potash segment sales decreased $14.9 million, or 28%, partially offset by a $6.2 million, or 21%, increase in Trio® segment sales and a $1.1 million, or 25%, increase in oilfield solutions segment sales.
Current wording
Our total sales for the six months ended June 30, 2024 decreased $26.6 million, or 16%, compared to the same period in 2023, as potash segment sales decreased $32.2 million, or 32%, partially offset by a $4.0 million, or 7%, increase in Trio® segment sales and a $1.5 million, or 16%, increase in oilfield solutions segment sales.
Previous wording
Our total potash segment sales decreased $14.9 million for the first quarter of 2024 compared to the first quarter of 2023, as potash sales decreased $14.7 million and potash segment byproduct revenues decreased $0.2 million. Our average net realized sales price per potash ton decreased 19%, and we sold 17% fewer tons. We saw good potash demand during the first quarter of 2024 as farmers look to maximize crop yields to capitalize on continued supportive crop commodity prices. However, potash tons sold decreased compared to the prior year because we had fewer tons of potash available to sell due to decreased potash production from our HB and Wendover facilities.
Current wording
Our total potash segment sales decreased $32.2 million for the six months ended June 30, 2024, compared to the same period in 2023, as potash sales decreased $31.7 million and potash segment byproduct revenues decreased $0.4 million. Our average net realized sales price per potash ton decreased 18% and we sold 23% fewer tons. Potash sales prices have been pressured during 2024 by increased global potash inventory levels. Potash tons sold decreased compared to the prior year because we began 2024 with fewer tons of potash available to sell due to decreased potash production from our HB and Wendover facilities in the second half of 2023.
Previous wording
Our Trio®segment sales increased $6.2 million in the first quarter of 2024, compared to the first quarter of 2023, as Trio®sales increased $7.2 million, or 25%, partially offset by a $1.0 million decrease in Trio®segment byproduct water sales. We sold 40% more tons of Trio® in the first quarter of 2024, compared to the first quarter of 2023, partially offset by a 13% decrease in our Trio®average net realized sales price per ton. Our Trio®tons sold increased during the first quarter of 2024, compared to the first quarter of 2023, as we sold more Trio®tons domestically and internationally. We sold less Trio®segment byproduct water as we increased the volume of water used for injection at our HB plant and had fewer overall sales of water from our Caprock water rights.
Current wording
Our Trio®segment sales increased $4.0 million in the six months ended June 30, 2024, compared to the same period in 2023, as Trio®sales increased $6.4 million, or 11%, partially offset by a $2.5 million decrease in Trio®segment byproduct water sales. We sold 20% more tons of Trio® in the six months ended June 30, 2024, compared to the same period in 2023, partially offset by a 10% decrease in our Trio®average net realized sales price per ton. Our Trio®tons sold increased during the six months ended June 30, 2024, compared to the same period in 2023, as we sold more Trio®tons into row crop markets, particularly driven by the sulfate value of Trio®. During the first half of 2024, Trio®prices have declined as potash prices also declined. We sold less Trio®segment byproduct water as we increased the volume of water used for injection at our HB plant and had fewer overall sales of water from our Caprock water rights.
Previous wording
Our oilfield solutions segment sales, which includes sales of water, brine water, and surface use agreements and easements, increased $1.1 million, or 25%, in the first quarter of 2024, compared to the first quarter of 2023, mainly driven by a $0.6 million increase in water sales, a $0.3 million increase in brine water sales, and a $0.2 million increase in other products and services. Continued robust oil and gas activity near Intrepid South has driven strong demand for products and services offered through our oilfield solutions segment.
Current wording
Our oilfield solutions segment sales, which includes sales of water, brine water, and surface use agreements and easements, increased $1.5 million, or 16%, in the six months ended June 30, 2024, compared to the same period in 2023, driven by a $0.6 million increase in water sales, a $0.5 million increase in brine water sales, and a $0.5 million increase in other products and services. Continued robust oil and gas activity near Intrepid South has driven strong demand for products and services offered through our oilfield solutions segment.
Previous wording
Our total cost of goods sold increased $0.2 million during the first quarter of 2024, compared to the first quarter of 2023. Our Trio®cost of goods sold increased $6.4 million, partially offset by a decrease of $5.8 million in our potash cost of goods sold and a $0.5 million decrease in our oilfield solutions cost of goods sold.
Current wording
Our total cost of goods sold decreased $11.1 million during the first half of 2024, compared to the first half of 2023. Our potash cost of goods sold decreased $13.0 million, our oilfield solutions cost of goods sold decreased by $0.9 million, partially offset by a $2.8 million increase in our Trio®cost of goods sold.
Previous wording
Our Trio® segment cost of goods sold increased $6.4 million, or 31%, during the first quarter of 2024, compared to the first quarter of 2023, mainly due to selling 40% more tons of Trio®. Our cost of goods sold was positively impacted by decreases in certain production costs, such as production labor and benefits expense, as we stopped operating an additional underground shift in early 2024 at our East facility and restarted our fine langbeinite recovery process in March 2024. In addition, the beginning 2024 weighted average carrying cost per ton of our finished goods was reduced by the lower of cost or net realizable value inventory adjustment recorded in the fourth quarter of 2023. Finally, we produced more tons of Trio®in the first quarter of 2024, compared to the first quarter of 2023, which lowered our per ton production costs. A significant portion of our production costs are fixed and an increase in tons produced decreases our per ton production costs.
Current wording
Our Trio® segment cost of goods sold increased $2.8 million, or 7%, during the first half of 2024, compared to the first half of 2023, due to a 20% increase in sales volumes of Trio®. Our cost of goods sold was positively impacted by decreases in certain production costs, such as production labor and benefits expense, as we stopped operating an additional underground shift in early 2024 at our East facility and restarted our fine langbeinite recovery process in March 2024. In addition, the beginning 2024 weighted average carrying cost per ton of our finished goods was reduced by the lower of cost or net realizable value inventory adjustment recorded in the fourth quarter of 2023. Finally, we produced more tons of Trio®in the first half of 2024, compared to the first quarter of 2023, which lowered our per ton production costs. A significant portion of our production costs are fixed and an increase in tons produced decreases our per ton production costs.
Previous wording
Our oilfield solutions cost of goods sold decreased $0.5 million, or 12%, during the first quarter of 2024, compared to the first quarter of 2023, mainly due to a decrease in contract labor expenses.
Current wording
Our oilfield solutions cost of goods sold decreased $0.9 million, or 11%, during the first half of 2024, compared to the first half of 2023, mainly due to a decrease in contract labor expenses.
Previous wording
Our potash segment cost of goods sold decreased $5.8 million, or 18%, mainly due to selling 17% fewer tons in the first quarter of 2024, compared to the first quarter of 2023. In addition, our beginning 2024 weighted average carrying cost per ton was reduced by the lower of cost or net realizable value inventory adjustment that was recorded during the fourth quarter of 2023.
Current wording
Lower of Cost or Net Realizable Value Inventory Adjustments
Previous wording
In the first quarter of 2024, we incurred $0.5 million of lower of cost or net realizable value inventory adjustments in our potash segment, as our weighted average carrying costs for certain potash products exceeded our expected selling price for those products. We did not incur any lower of cost or net realizable value inventory adjustments in the first quarter of 2023.
Current wording
In the first half of 2024, we incurred $1.9 million of lower of cost or net realizable value inventory adjustments in our potash segment, as our weighted average carrying costs for certain potash products exceeded our expected average net realized sales price for those products. We did not incur any lower of cost or net realizable value inventory adjustments in the first half of 2023.
Previous wording
We generated a net loss of $3.1 million during the first quarter of 2024, compared to net income of $4.5 million for the first quarter of 2023, due to the factors discussed above.
Current wording
We generated a net loss of $4.0 million during the six months ended June 30, 2024, compared to net income of $8.8 million for the same period in 2023, due to the factors discussed above.
Previous wording
Our total sales in the potash segment decreased $14.9 million in the first quarter of 2024, compared to the first quarter of 2023, as potash sales recorded in the potash segment decreased $14.7 million, or 31%, and potash segment byproduct sales decreased $0.2 million. Our potash sales decreased in the first quarter of 2024, compared to the first quarter of 2023, as our average net realized sales price per ton decreased 19%, and we sold 17% fewer tons. We sold fewer tons of potash in the first quarter of 2024, compared to the first quarter of 2023, as we had fewer tons of potash to sell due to lower potash production from our HB and Wendover facilities. Byproduct sales were similar to the prior year period as a $0.7 million decrease in magnesium chloride sales was mostly offset by a $0.5 million increase in brine sales. Magnesium chloride sales declined due to mild winter weather which decreased demand for our de-icing product. Brine sales increased as we sold more barrels at a higher average price compared to the prior year due to continued oilfield activity near our mines.
Current wording
Our total sales in the potash segment decreased $17.2 million in the three months ended June 30, 2024, compared to the same period in 2023, as potash sales recorded in the potash segment decreased $16.9 million, or 41%, and potash segment byproduct sales decreased $0.3 million. Our potash sales decreased in the second quarter of 2024, compared to the second quarter of 2023, as our average net realized sales price per ton decreased 15%, and we sold 30% fewer tons. Potash prices have declined as available global inventory has increased compared to 2023. We sold fewer tons of potash in the three months ended June 30, 2024, compared to the same period in of 2023, as we had fewer tons of potash to sell due to decreased production volumes at our HB and Wendover facilities. Byproduct sales decreased $0.3 million in the second quarter of 2024, compared to the second quarter of 2023, due to a $0.7 million decrease in magnesium chloride sales, partially offset by a $0.5 million increase in brine sales. Magnesium chloride sales declined due to decreased demand from the dedust market. Brine sales increased as we sold more barrels at a higher average price compared to the prior year due to continued robust oilfield activity near our mines.
Previous wording
Potash segment freight expense decreased 21% in the first quarter of 2024, compared to the first quarter of 2023, as we sold 17% fewer tons of potash. Our potash freight expense is further impacted by the geographic distribution of our potash and byproduct sales and by the proportion of customers arranging for and paying their own freight costs.
Current wording
Potash segment freight expense decreased 35% in the second quarter of 2024, compared to the second quarter of 2023, as we sold 30% fewer tons of potash. Our potash freight expense is further impacted by the geographic distribution of our potash and byproduct sales and by the proportion of customers arranging for and paying their own freight costs.
Previous wording
Our potash segment gross margin decreased $8.9 million in the first quarter of 2024, compared to the first quarter of 2023, due to the factors discussed above.
Current wording
Our potash segment gross margin decreased $9.6 million in the second quarter of 2024, compared to the second quarter of 2023, due to the factors discussed above.
Previous wording
During the first quarter of 2024, we recorded lower of cost or net realizable value inventory adjustments of $0.5 million as our weighted average carrying cost per ton for certain inventoried potash products was higher than our expected selling price per ton for those products. We did not record any lower of cost or net realized value inventory adjustments in the first quarter of 2023.
Current wording
During the first half of 2024, we recorded lower of cost or net realizable value inventory adjustments of $1.9 million as our weighted average carrying cost per ton for certain inventoried potash products at our HB and Wendover facilities was higher than our expected average net realized sales price per ton for those products. Because potash production at our HB and Wendover facilities was below historical production levels during the second half of 2023, our weighted average production costs at those facilities increased. As mentioned, a significant portion of our potash production costs are fixed and a decrease in potash tons produced increases our potash production costs per ton. We did not record any lower of cost or net realized value inventory adjustments in the first half of 2023.
Previous wording
The table below shows our potash sales mix for the three months ended March 31, 2024, and 2023:
Current wording
The table below shows our potash sales mix for the three and six months ended June 30, 2024, and 2023:
Previous wording
Our Trio® segment byproduct sales decreased $1.0 million in the first quarter of 2024, compared to the first quarter of 2023, due to a decrease in Trio® segment byproduct water sales. We sold less byproduct water as we increased the volume of water used for injection at our HB plant and had fewer overall sales of water from our Caprock water rights. Generally, we source our water sales closer to the location where the customer needs the water to minimize water transfer costs.
Current wording
Our Trio® segment byproduct sales decreased $1.4 million in the three months ended June 30, 2024, compared to the same period in 2023, due to a decrease in Trio® segment byproduct water sales. We sold less byproduct water as we increased the volume of water used for injection at our HB plant and had fewer overall sales of water from our Caprock water rights. Generally, we source our water sales closer to the location where the customer needs the water to minimize water transfer costs.
Previous wording
During the year ended December 31, 2023, we recorded an impairment related to our Trio®segment assets because the estimated fair value of the assets exceeded the net book value of the assets. The fair value of the Trio®segment assets was primarily determined using the expected proceeds received in an orderly sale of the individual assets. For any new Trio®segment capital spending during the first quarter, we also estimated the fair value of those assets using the expected proceeds received in an orderly sale of those new assets and we recorded an additional impairment of $1.4 million in the first quarter of 2024. Although we have reduced capital spending at our East facility compared to prior years, we expect to incur additional capital expenditures in the future periods for our Trio®segment assets that we will likely have to impair.
Current wording
During the year ended December 31, 2023, we recorded an impairment related to our Trio®segment assets because the net book value exceeded the estimated fair value of the assets. The fair value of the Trio®segment assets was primarily determined using the expected proceeds received in an orderly sale of the individual assets. For any new Trio®segment capital spending during the three months ended June 30, 2024, we also estimated the fair value of those assets using the expected proceeds received in an orderly sale of those new assets, and we recorded an additional impairment of $0.8 million. Although we have reduced capital spending at our East facility compared to prior years, we expect to incur additional capital expenditures in the future periods for our Trio®segment assets that we will likely have to impair.
Previous wording
Trio® segment sales increased 21% during the first quarter of 2024, compared to the first quarter of 2023. Trio® sales increased $7.2 million, partially offset by a decrease of $1.0 million in our Trio® segment byproduct sales. Trio® sales increased primarily due to a 40% increase in Trio® tons sold, partially offset by a 13% decrease in our average net realized sales price per ton. Sales volumes increased during the first quarter of 2024, compared to the first quarter of 2023 as customers saw good value for Trio® relative to current crop prices. Similar to potash prices discussed above, our Trio®average net realized sales price per ton has decreased since the peak prices realized during the second quarter of 2022, as potassium fertilizer supplies improved.
Current wording
Trio® segment sales increased 7% during the six months ended June 30, 2024, compared to the same period in 2023. Trio® sales increased $6.4 million, partially offset by a decrease of $2.4 million in our Trio® segment byproduct sales. Trio® sales increased primarily due to a 20% increase in Trio® tons sold, partially offset by a 10% decrease in our average net realized sales price per ton. Sales volumes increased during the six months ended June 30, 2024, compared to the same period in 2023 as we sold more Trio®tons into row crop markets, particularly driven by the sulfate value of Trio®. Similar to potash prices discussed above, our Trio®average net realized sales price per ton has decreased as potassium fertilizer supplies improved.
Previous wording
Trio®freight costs increased 34%, as we sold 40% more Trio® tons in the first quarter of 2024, compared to the first quarter of 2023. Our Trio®freight expense is impacted by the geographic distribution of our Trio® sales and by the proportion of customers arranging for and paying their own freight costs.
Current wording
Trio®freight costs increased 21%, as we sold 20% more Trio® tons in the six months ended June 30,2024, compared to the same period in 2023. Our Trio®freight expense is impacted by the geographic distribution of our Trio® sales and by the proportion of customers arranging for and paying their own freight costs.
Previous wording
Our Trio®cost of goods sold increased 31% in the first quarter of 2024, compared to the first quarter of 2023, mainly due to selling 40% more tons of Trio®. Our cost of goods sold was positively impacted by decreases in certain production costs, such as production labor and benefits expense, as we moved to a reduced operating schedule at our East facility and restarted our fine langbeinite recovery process in March 2024. In addition, the beginning 2024 weighted average carrying cost per ton of our finished goods was reduced by the lower of cost or net realizable value inventory adjustment recorded in the fourth quarter of 2023. Finally, we produced more tons of Trio®in the first quarter of 2024, compared to the first quarter of 2023, which lowered our per ton production costs. A significant portion of our production costs is fixed and an increase in tons produced decreases our per ton production costs.
Current wording
Our Trio®cost of goods sold increased 7% in the six months ended June 30, 2024, compared to the same period in 2023, due to selling 20% more tons of Trio®, partially offset by decreases in certain production costs, such as production labor and benefits expense, as we moved to a reduced operating schedule at our East facility and restarted our fine langbeinite recovery process in March 2024. In addition, the beginning 2024 weighted average carrying cost per ton of our finished goods was reduced by the lower of cost or net realizable value inventory adjustment recorded in the fourth quarter of 2023. Finally, we produced more tons of Trio®in the six months ended June 30, 2024, compared to the same period in 2023, which lowered our per ton production costs. A significant portion of our production costs is fixed and an increase in tons produced decreases our per ton production costs.
Previous wording
Our Trio®segment experienced a gross deficit of $1.1 million in the first quarter of 2024, compared to gross margin of $1.5 million in the first quarter of 2023, mainly due to the decrease in average net realized sales price per Trio® ton.
Current wording
Our Trio®segment recorded gross margin of $1.0 million in the six months ended June 30, 2024, compared to gross margin of $2.7 million in the same period in 2023, mainly due to the decrease in average net realized sales price per Trio® ton and the decrease in Trio®segment byproduct sales.
Previous wording
The table below shows the percentage of Trio® tons sold into the domestic and export markets during the three months ended March 31, 2024, and 2023.
Current wording
The table below shows the percentage of Trio® tons sold into the domestic and export markets during the three and six months ended June 30, 2024, and 2023.
Previous wording
Our cost of goods sold decreased $0.5 million, or 12%, in the first quarter of 2024, compared to the first quarter of 2023, due to using less contract labor. In the first quarter of 2023, we used contract labor to complete various projects at Intrepid South.
Current wording
Our cost of goods sold decreased $0.4 million, or 11%, in the three months ended June 30, 2024, compared to the same period in 2023, due to using less contract labor. In the three months ended June 30, 2023, we used contract labor to complete various projects at Intrepid South.
Previous wording
Gross margin for the first quarter of 2024 increased $1.5 million compared to the first quarter of 2023, due to the factors discussed above.
Current wording
Gross margin for the three months ended June 30, 2024, increased $0.8 million compared to the same period in 2023, due to the factors discussed above.
Previous wording
Our oilfield solutions segment sales increased $1.1 million in the first quarter of 2024, compared to the first quarter of 2023, due to a $0.6 million increase in water sales, a $0.3 million increase in brine water sales, and a $0.2 million increase in other oilfield solution products and services. Our water sales increased compared to the prior year period due to increased sales of water on our South ranch. Our brine water sales and sales of other oilfield solutions segments products and services increased due to continued strong demand from oil and gas operators in the Permian Basin near Intrepid South.
Current wording
Our oilfield solutions segment sales increased $1.5 million in the six months ended June 30, 2024, compared to the same period in 2023, due to a $0.6 million increase in water sales, a $0.5 million increase in brine water sales, and a $0.5 million increase in other oilfield solution products and services. Our oilfield solutions segment water sales increased compared to the prior year as fewer sales of water were classified as byproduct sales in our potash and Trio® segments. Our brine water sales and sales of other oilfield solutions products and services increased due to continued strong demand from oil and gas operators in the Permian Basin near Intrepid South.
Showing the first 40 of 53 pairs. Open the source sections for the rest.
Rearranged current paragraphs (12)
Current report — wording carried from elsewhere
Our oilfield solutions segment sales, which includes sales of water, brine water, and surface use agreements and easements, increased $0.4 million, or 8%, in the three months ended June 30, 2024, compared to the same period in 2023, driven by a $0.3 million increase in other oilfield products and services and a $0.2 million increase in brine water sales. Continued robust oil and gas activity near Intrepid South has driven strong demand for products and services offered through our oilfield solutions segment.
Current report — wording carried from elsewhere
In the three months ended June 30, 2024, we incurred $1.4 million of lower of cost or net realizable value inventory adjustments in our potash segment, as our weighted average carrying costs for certain potash products exceeded our expected average net realized sales price for those products. We did not incur any lower of cost or net realizable value inventory adjustments in the three months ended June 30, 2023.
Current report — wording carried from elsewhere
Consolidated Results for the Six Months Ended June 30, 2024, and 2023
Current report — wording carried from elsewhere
Our total byproduct sales, which are recorded in either our potash segment or Trio® segment, decreased $2.9 million in the six months ended June 30, 2024, compared to the same period in 2023, due mainly to a decrease in byproduct water sales. We did not sell any byproduct water as we increased the volume of water used for injection at our HB plant and had fewer overall sales of water from our Caprock water rights.
Current report — wording carried from elsewhere
During the six months ended June 30, 2024, we incurred income tax benefit of $1.1 million, compared to income tax expense of $3.8 million during the same period in 2023, as we incurred a net loss during the six months ended June 30, 2024, compared to net income in the same period in 2023.
Current report — wording carried from elsewhere
Our total sales in the potash segment decreased $32.2 million in the six months ended June 30, 2024, compared to the same period in 2023, as potash sales recorded in the potash segment decreased $31.7 million, or 36%, and potash segment byproduct sales decreased $0.4 million. Our potash sales decreased in the six months ended June 30, 2024, compared to the same period in 2023, as our average net realized sales price per ton decreased 18%, and we sold 23% fewer tons. We sold fewer tons of potash in the six months ended June 30, 2024, compared to the same period in 2023, as we had fewer tons of potash to sell due to lower potash production from our HB and Wendover facilities during the second half of 2023. Our average net realized sales price per potash ton decreased during the six months ended June 30, 2024, compared to the same period in 2023, as the available supply of potash has increased. Byproduct sales recorded in our potash segment decreased $0.4 million as a $1.5 million decrease in magnesium chloride sales was partially offset by a $1.0 million increase in brine sales. Magnesium chloride sales declined due to mild winter weather which decreased demand for our deicing product in the first quarter of 2024, and a slow start to the dust control season in the second quarter of 2024. Brine sales increased as we sold more barrels at a higher average price compared to the prior year due to continued oilfield activity near our mines.
Current report — wording carried from elsewhere
Potash segment freight expense decreased 28% in the six months ended June 30, 2024, compared to the same period in 2023, as we sold 23% fewer tons of potash. Our potash freight expense is further impacted by the geographic distribution of our potash and byproduct sales and by the proportion of customers arranging for and paying their own freight costs.
Current report — wording carried from elsewhere
Our Trio®cost of goods sold decreased 18% in the three months ended June 30, 2024, compared to the same period in 2023, even though our sales tons were unchanged. Our cost of goods sold was positively impacted by decreases in certain production costs, such as production labor and benefits expense, as we moved to a reduced operating schedule at our East facility and restarted our fine langbeinite recovery process in March 2024. In addition, the beginning 2024 weighted average carrying cost per ton of our finished goods was reduced by the lower of cost or net realizable value inventory adjustment recorded in the fourth quarter of 2023. Finally, we produced more tons of Trio®in the three months ended June 30, 2024, compared to the same period in 2023, which lowered our per ton production costs. A significant portion of our production costs is fixed and an increase in tons produced decreases our per ton production costs.
Current report — wording carried from elsewhere
Our Trio® segment byproduct sales decreased $2.4 million in the three months ended June 30, 2024, compared to the same period in 2023, due mainly to a decrease in Trio® segment byproduct water sales. We sold less byproduct water as we increased the volume of water used for injection at our HB plant and had fewer overall sales of water from our Caprock water rights. Generally, we source our water sales closer to the location where the customer needs the water to minimize water transfer costs.
Current report — wording carried from elsewhere
During the year ended December 31, 2023, we recorded an impairment related to our Trio®segment assets because the net book value exceeded the estimated fair value of the assets. The fair value of the Trio®segment assets was primarily determined using the expected proceeds received in an orderly sale of the individual assets. For any new Trio®segment capital spending during the six months ended June 30, 2024, we also estimated the fair value of those assets using the expected proceeds received in an orderly sale of those new assets, and we recorded an additional impairment of $2.2 million. Although we have reduced capital spending at our East facility compared to prior years, we expect to incur additional capital expenditures in the future periods for our Trio®segment assets that we will likely have to impair.
Current report — wording carried from elsewhere
Our oilfield solutions segment sales increased $0.4 million in the three months ended June 30, 2024, compared to the same period in 2023, due to a $0.3 million increase in other oilfield solution products and services and a $0.2 million increase in brine water sales.
Current report — wording carried from elsewhere
Our cost of goods sold decreased $0.9 million, or 11%, in the six months ended June 30, 2024, compared to the same period in 2023, due to using less contract labor. In the six months ended June 30, 2023, we used contract labor to complete various projects at Intrepid South.