Intrepid Potash, Inc · NYSE:IPI
Intrepid Potash — Investor Presentation (February 2014)
28 slides from Intrepid Potash's investor presentation, Feb 25, 2014
Slide 1: Ingredients for Growth February 2014
Ingredients for Growth February 2014
Slide 2: Safe Harbor
This presentation contains forward-looking statements — that is, statements about future, not past, events. These forward-looking statements often relate to our future performance and management’s expectations for the future, including statements about our financial outlook. Our forward-looking stat
Slide 3: Intrepid Overview
Built to be pure-play potassium product company Creating value through modernization of assets and new facilities Applying innovative technology Leader in low cost solar solution mining Geographically advantaged serving local markets Returning to profitability and generating free cash flow in 2014 A
Slide 4: Intrepid's Unique Position
Intrepid’s Unique Position Participating in industry with strong fundamentals Strategically positioned production facilities Serving diverse customers and markets Leveraging solar solution mining expertise Benefitting from a prudent capital structure Highest average net realized sales price among No
Slide 5: Intrepid generates strong cash margins through its price advantage
Intrepid generates strong cash margins through its price advantage + 24% Note: Average net realized sales price per ton is a non-GAAP financial measure calculated as gross sales less freight costs, divided by the number of tons sold in the period. See the non-GAAP reconciliations set forth later in
Slide 6: Industry With Strong Fundamentals: Demand Remains Solid
Favorable farmer economics Annual U.S. potash consumption relatively consistent for decades Nutrients in the soil need to be replenished Balanced fertilization key to maximizing yields Demand in markets we serve is 5 times our production level Industry With Strong Fundamentals Demand Remains Solid 6
Slide 7: Strategically Positioned, Serving Diverse Customers and Markets
Strategically Positioned, Serving Diverse Customers and Markets Maximizing Sales and Margin Opportunities Deliberate marketing strategy Diverse end markets and customer base Trio® expands customer base End Market Product Size 2012 2013 Agricultural Granular 81% 71% Industrial Standard 12% 21% Animal
Slide 8: Leveraging Solar Solution Mining Expertise
Leveraging Solar Solution Mining Expertise Overview Inject brine into idled mine works Allow brine to circulate to dissolve the remaining potash Extract potash enriched brine and pump into solar evaporation pond Allow solar evaporation to occur; potash recrystallizes as water evaporates Harvest the
Slide 9: HB Drives Cash Margin Opportunity
Leveraging Solar Solution Mining Expertise HB Drives Cash Margin Opportunity Expected cash margin per ton from HB approximately double Potential to grow cash margin faster than production growth Trio® expected to add more than $130 of cash margin per ton Note: Calculation assumes cash operating cost
Slide 10: Balance Sheet Strength and Optimal Capital Structure
Cash and investments totaling $25 million at Dec. 31 As of Dec. 31, $222 million available under existing unsecured credit facility. Availability of facility adjusts based on financial covenant results $150 million in unsecured long-term debt outstanding, with average interest rate of less than 4% C
Slide 11: Deploying Capital to Achieve Greatest Returns
OBJECTIVE Respond to changing demand to pursue highest margin sales Ability to compact 100% of potash production PROJECTS North compaction Trio® pellet plant OBJECTIVE Increase production PROJECTS HB Solar Solution mine Moab solution mining caverns West plant improvements GROWTH OBJECTIVE Lower per
Slide 12: HB Solar – Production Growth at Significantly Lower Cash Operating Costs
Deploying Capital to Achieve Greatest Returns HB Solar – Production Growth at Significantly Lower Cash Operating Costs HB Solar Solution Mine Key Facts Capital investment of $240-$245 million Cash operating costs approximately $80-$100 per ton at full production, making HB one of the lowest cost pot
Slide 13: Expand Moab Solar Solution Mining
Deploying Capital to Achieve Greatest Returns Expand Moab Solar Solution Mining, Incremental Tons at Lower Cash Operating Costs Build on Successful Operations Expand solution mining footprint Cavern 1 began producing in 2002, expanded in 2012 Cavern 2 began producing in 2013 Cavern 3 complete and wi
Slide 14: North Compaction Key to Marketing and Production Flexibility
Deploying Capital to Achieve Greatest Returns North Compaction Key to Marketing and Production Flexibility Upgrade North Compaction Facility Creating high quality granulated potash Flexibility to produce and sell the highest margin product North will be able to compact 100% of Carlsbad production Ca
Slide 15: Why Intrepid?
Why Intrepid? Highest North American average net realized sales price over time and strong cash margin per ton Geographically advantaged assets serving diversified markets and customer base Focused on growth, flexibility, and margin expansion Producing incremental low cost solar solution tons Strong
Slide 16: Appendix
Appendix ® Supplying a Growing America® Appendix
Slide 17: 2014 Outlook
First-Half Second-Half Full-Year 2014 2014 2014 Potash Production (tons) 395,000 - 415,000 435,000 - 455,000 830,000 - 870,000 Sales (tons) 420,000 - 440,000 430,000 - 450,000 850,000 - 890,000 Cash operating costs ($/ton) $195 - $210 $180 - $195 $185 - $200 Total COGS ($/ton)* $270 - $285 $245 - $2
Slide 18: Financial Overview
Financial Overview Adjusted EBITDA* (in millions) Balance Sheet as of Dec. 31, 2013 Net Income (Loss) (in millions) Diluted Earnings (Loss) Per Share Cash and Investments $ 25 million Current Assets $ 179 million Total Assets $1,175 million Debt Outstanding $ 150 million Total Liabilities $ 241 mill
Slide 19: Non-GAAP Reconciliations
Non-GAAP Reconciliations To supplement our consolidated financial statements, which are prepared and presented in accordance with GAAP, we use several non-GAAP financial measures to monitor and evaluate our performance. These non-GAAP financial measures may include adjusted EBITDA, adjusted net inco
Slide 20: Non-GAAP Reconciliation: Calculation of Adjusted EBITDA
Non-GAAP Reconciliation Calculation of Adjusted EBITDA (in thousands) Adjusted earnings before interest, taxes, depreciation, and amortization (or adjusted EBITDA) is a non-GAAP financial measure that is calculated as net income adjusted for the add back of reductions in the estimated accounts recei
Slide 21: Non-GAAP Reconciliation: Net Sales and Average Net Realized Sales Price
Non-GAAP Reconciliation Net sales, average net realized sales price, and average net realized sales price advantage are non-GAAP financial measures. Net sales are calculated as sales less freight costs. Average net realized sales price is calculated as net sales, divided by the number of tons sold i
Slide 22: Non-GAAP Reconciliation: Cash Operating Costs
Non-GAAP Reconciliation Cash operating costs is a non-GAAP financial measure that is calculated as total of cost of goods sold divided by the number of tons sold in the period and then adjusted to exclude per-ton depreciation, depletion, and royalties. Total cost of goods sold is reported net of by-
Slide 23: Intrepid Will Have Invested Nearly $1 Billion Since Inception
Intrepid Will Have Invested Nearly $1 Billion Since Inception For Growth and to Lower Costs Major Capital Project Milestones Facility Completion West Recovery Carlsbad, NM – West 2014E HB Solar Solution Mine Carlsbad, NM – HB 2013/2014 North Compaction Project Carlsbad, NM – North 2013/2014E* Horizo
Slide 24: Historical Quarterly Production and Sales
Historical Quarterly Production and Sales 24 Mar. 31, Jun. 30, Sept. 30, Dec. 31, Mar. 31, Jun. 30, Sept. 30, Dec. 31, Potash 218 170 189 218 222 182 167 209 Trio® 30 33 35 34 46 50 40 42 Potash 203 184 249 203 185 184 156 167 Trio® 28 26 27 43 39 35 22 27 2013 Production Volume (In thousands of sho
Slide 25: U.S. Potash Consumption Remains Steady and Robust
U.S. Potash Consumption Remains Steady and Robust Sources : Fertecon, United States Department of Agriculture (USDA), NOAA National Climatic Data Center. Potash consumption is shown in fertilizer years (July – June). Grains stocks include barley, corn, oats, sorghum and wheat. Potash fertilizer cons
Slide 26: Global Industry Susceptible to Production Interruption and Supply Shocks
Global Industry Susceptible to Production Interruption and Supply “Shocks” Depleted Conventional Mines Mines Currently With Less than 15 Years Reserve Life Theodore, Amelie, Marie Louis mines- France Pasquasi and San Cataldo mines - Italy Salzdetfurth, Friedrichshall, Bergmannssegen-Hugo, Siegfried-
Slide 27: Increasing Population Continues to Drive Grain and Potash Demand
Fundamentals of Increasing Population Continue to Drive Grain and Ultimately Potash Demand Over the Long Term Note: Grains include corn, wheat, barley, oats and sorghum. Stocks-to-use ratio is ending inventory / consumption for that crop year; data updated monthly. Sources: United Nations Food and A
Slide 28: Investor Relations Contact
For more information visit our website at www.intrepidpotash.com Investor Relations Contact: Gary Kohn Phone 303.996.3024 Email: gary.kohn@intrepidpotash.com
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