Intrepid Potash, Inc · NYSE:IPI
Intrepid Potash — Q2 2024 Earnings Presentation
28 slides from Intrepid Potash's earnings presentation, Aug 6, 2024
Slide 1: Intrepid Potash August 2024 Investor Presentation
Intrepid Potash August 2024 Investor Presentation August 2024 Investor Presentation | Published August 15th, 2024 NYSE: IPI | intrepidpotash.com
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation includes forward-looking statements within the meaning of the federal securities laws. Forward-looking statements include statements about our future results of operations and financial position, our business strategy and plans, and our objectives for fut
Slide 3: Company Overview & Driving Shareholder Value
Company Overview & Driving Shareholder Value August 2024 3
Slide 4: Key Assets & Corporate Profile
Key Assets & Corporate Profile Delivering On Key Strategic Priority: Reversing Declining Potash(1) Production Trend Key Assets Corporate Profile Wendover, UT Solar Brine Recovery Mine Key Highlights(2) • Acquired in 2004; potash is primarily produced from • Corporate HQ: Denver, CO • Market Cap: $28
Slide 5: Why Invest In IPI?
Why Invest In IPI? Capitalizing On Our Unique Positioning & Opportunity • Having existing facilities/infrastructure (e.g. rail) helps protect this positioning The Only Potash (1) Producer in the United States • Proximity to key markets drives logistics, transportation, and price advantages • Initial
Slide 6: Correcting the Valuation Gap Creates Clear Upside for IPI
Correcting the Valuation Gap Creates Clear Upside for IPI Tangible Book Value (“TBV”) per Share(1) Significantly Higher Than Current Share Price U.S. NOLA Potash Price vs. IPI Common Stock $1,000 $125 Key Takeaways in Addressing Shareholder Value From Jan.-’16 to May-’21 (i.e. before the late-’21 to
Slide 7: Outlook Significantly De-Risked Following December 2023 Agreement with XTO
Outlook Significantly De-Risked Following December 2023 Agreement with XTO $50mm Additional Guaranteed & Up To an Additional $100mm in Potential Payments Key Takeaways Cooperative Development Agreement Third Amendment Highlights – Announced 12/12/2023 Balance Sheet Cash Funds #1 Parties in the Agree
Slide 8: Financial Highlights & Potash Production
Financial Highlights & Potash Production August 2024 8
Slide 9: H1/24 Company Highlights & Updates
H1/24 Company Highlights & Updates Q2/24: Potash Production Inflecting Higher & Improving Performance in Trio® Corporate Potash Trio® Highlights: Highlights: Highlights: Key Metrics Q2/24 H1/24 Key Metrics Q2/24 H1/24 Key Metrics Q2/24 H1/24 Adjusted EBITDA(1) $9.2mm $17.0mm Sales Volumes (in short
Slide 10: Key Drivers of Higher Potash Production
Key Drivers of Higher Potash Production Maximizing Our Brine Availability Is the Foundation of Increasing Our Production Maximizing Our Brine Availability Recent Highlights HB Solar Solution Mine HB Solar Solution Mine • Injection/extraction ratio >1.0x is key to • Since Oct.-’23, have been extracti
Slide 11: Our Potash Production Is Inflecting Higher
Our Potash Production Is Inflecting Higher: First Indication Evident In Q2/24 Results Our Long-life Reserves & Resources Can Support Higher Production for Many Years Potash Production Outlook(1) 375k Q2 Potash Production: Est. Potash Product Tons in Reserves(2) 2024: 40k tons 2023: 12k tons Potash P
Slide 12: Lower Potash Production & Sales Volumes Currently Pressuring Our Profitability
Lower Potash Production & Sales Volumes Currently Pressuring Our Profitability… #1 Strategic Priority is Correcting This Trend – First Inflection Occurred in Q2/24(1) Improving Unit Economics by Means of Higher Production is the #1 Strategic Priority - Early Signs of Success Now Evident $60.0 $770 P
Slide 13: Higher Potash Production Will Significantly Improve Our Unit Economics
…But Higher Potash Production Will Significantly Improve Our Unit Economics We Estimate Our Potash Segment COGS per Ton Can Improve 20-30%(1) by 2026 Potash Segment COGS per Ton Has Inverse Relationship to Production & Sales Volumes $400 400k Potash Segment COGS per Ton Potash Volumes (short tons) $
Slide 14: 2024 Budget & Capital Allocation Priorities
2024 Budget & Capital Allocation Priorities Growth Capital Spending Expected to Moderate; DTAs(1) Minimize Cash Taxes 2024 Capital Budget: $40-$50mm Key Projects Balance Sheet & Liquidity Completion of Projects that Started in 2023 Recent Deal with XTO Boosts Liquidity HB • $50mm in “initial” paymen
Slide 15: Other Key Growth Opportunities & Competitive Advantages
Other Key Growth Opportunities & Competitive Advantages Lithium Offers Growth Upside; Continued Focus on Margin Improvement & Byproducts Other Key Growth Project Opportunities Key Competitive Advantages Lithium Resource in Mag Chloride Brine at Wendover ➢ The only U.S.-based potash producer • Engage
Slide 16: Market Outlook & Final Takeaways
Market Outlook & Final Takeaways August 2024 16
Slide 17: Constructive Outlook for Global Potash Market
Constructive Outlook for Global Potash Market Pricing Support from Global Demand Returning to Trendline Growth Long-Term Potash Demand Getting Back to Trendline Growth of ~2% CAGR Global Supply Still Faces Risks & Heavily Reliant on Eastern European Tons 100.0 Global potash market is susceptible 100
Slide 18: U.S. Farmer Financial Position & Outlook for 2024
U.S. Farmer Financial Position & Outlook for 2024 U.S. Farmers Well-Positioned Even with Moderating Profitability In Recent Period of Moderating U.S. Farm Incomes, MOP Demand Was Resilient $200 $186 10.0 $140 U.S. Farm Income ($bn) $170 $156 U.S. MOP Demand Net Farm Income ($bn) (mm metric tons) $16
Slide 19: Update on Futures Prices for Crops that Consume Higher Amounts of Potash
Update on Futures Prices for Crops that Consume Higher Amounts of Potash Strength in Key International Crop Futures, Corn/Soybeans at Historical Levels Palm Oil(1) & Rice Cocoa & Coffee Corn & Soybeans Source (for all six charts): Bloomberg Slide Notes: (1) Palm oil futures trade in Malaysian Ringgi
Slide 20: Final Takeaways
Final Takeaways Focused On Getting Appropriate Value Back in the Equity • Significantly improving our unit economics is in our control Increasing Potash Production is #1 Focus • Will help correct valuation gap between underlying asset values and share price • Key growth projects started two years ag
Slide 21: Appendix
Appendix August 2024 21
Slide 22: Non-GAAP Reconciliations: Adjusted Net Income (Loss) & Adjusted EBITDA
Non-GAAP Reconciliations: Adjusted Net Income (Loss) & Adjusted EBITDA (in thousands) Q1/21 Q2/21 Q3/21 Q4/21 Net Income $2,451 Net Income $19,499 Net Income $4,023 Net Income $223,860 Loss on sale of assets 2 (Gain) on sale of assets (2,567) Loss on sale of assets 5 Loss on sale of assets 18 Total
Slide 23: Non-GAAP Reconciliations: Adjusted Net Income (Loss) & Adjusted EBITDA
Non-GAAP Reconciliations: Adjusted Net Income (Loss) & Adjusted EBITDA (in thousands) Q1/22 Q2/22 Q3/22 Q4/22 Net Income $31,422 Net Income $23,708 Net Income $13,108 Net Income $3,982 Loss on sale of assets 100 Loss on sale of assets 1,066 Loss on sale of assets 10 Loss on sale of assets 6,294 Calc
Slide 24: Non-GAAP Reconciliations: Adjusted Net Income (Loss) & Adjusted EBITDA
Non-GAAP Reconciliations: Adjusted Net Income (Loss) & Adjusted EBITDA (in thousands) Q1/23 Q2/23 Q3/23 Q4/23 Net Income $4,506 Net Income $4,305 Net (Loss) ($7,196) Net (Loss) ($37,288) Loss on sale of assets 200 (Gain) on sale of assets (7) Impairment of long-lived assets 521 Impairment of long-li
Slide 25: Non-GAAP Reconciliations: Adjusted Net Income (Loss) & Adjusted EBITDA
Non-GAAP Reconciliations: Adjusted Net Income (Loss) & Adjusted EBITDA (in thousands) Q1/24 Q2/24 Net (Loss) ($3,130) Net (Loss) ($833) Impairment of long-lived assets 1,377 Impairment of long-lived assets 831 Loss on sale of assets 251 Loss on sale of assets 241 Calculated income tax effect (423) C
Slide 26: Non-GAAP Reconciliations: Potash Segment Average Net Realized Sales Price per Ton
Non-GAAP Reconciliations: Potash Segment Average Net Realized Sales Price per Ton (in thousands except per ton figures) Q1/21 Q2/21 Q3/21 Q4/21 Q1/22 Q2/22 Q3/22 Q4/22 Q1/23 Q2/23 Q3/23 Q4/23 Q1/24 Q2/24 Total Segment Sales $43,578 $37,693 $31,673 $38,807 $56,442 $48,827 $42,354 $43,756 $52,497 $47,
Slide 27: Non-GAAP Reconciliations: Potash Segment COGS per Ton
Non-GAAP Reconciliations: Potash Segment COGS per Ton (in thousands except per ton figures) Potash Segment COGS per Ton Table 2017 2018 2019 2020 2021 2022 2023 Potash Segment COGS $72,229 $72,322 $73,401 $73,496 $87,281 $76,524 $97,452 Potash Segment Byproduct Revenue $12,377 $16,586 $21,245 $15,56
Slide 28: Non-GAAP Reconciliations: Tangible Book Value per Share
Non-GAAP Reconciliations: Tangible Book Value per Share (in thousands except per share figures) 6/30/2024 Stockholder's Equity $682,248 Less: Deferred Tax Assets $195,337 Tangible Book Value $486,911 Divided by: Shares Outstanding 12,908 Tangible Book Value per Share $37.72 August 2024 28