Intrepid Potash(IPI)2020-05-10 04:40Financial Data and Key Metrics Changes - First quarter sales increased by 11%, driven by record water sales and strong volumes in the nutrients business [58] - Potash gross margins decreased by 54% due to lower pricing and higher cost of goods sold, with the average net realized sales price for potash at 14.8 million, with capital expenditures totaling 8.5 million [22] - The oilfield solutions business experienced double-digit revenue growth and margin expansion, with a 17% increase in sales attributed to record water sales [63] - Sales volumes for Trio increased significantly, with international sales growing by 48% in the first quarter [53] Market Data and Key Metrics Changes - The rig count in the Permian Basin dropped from 403 rigs on January 1, 2020, to 219 rigs by May 1, 2020, indicating a significant decrease in drilling activity [30] - The Delaware Basin is expected to be less affected by the downturn compared to other regions, with a steady count of drilled but uncompleted wells [31][32] Company Strategy and Development Direction - The company is focused on diversifying its revenue streams and strengthening its balance sheet to navigate the economic downturn caused by the COVID-19 pandemic [19][55] - Intrepid is positioned to take advantage of opportunities in the oil and gas midstream sector, particularly in the Delaware Basin [46][49] - The company plans to continue exploring monetization opportunities for its land assets, including additional sales of land [65] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges posed by the COVID-19 pandemic but expressed confidence in the company's ability to weather the storm due to its diversified revenue streams and strong balance sheet [19][20] - The company expects a significant decline in water demand as oil and gas companies pause their drilling plans, leading to the suspension of water sales guidance for 2020 [67] - Despite the uncertainty, management remains optimistic about the potential opportunities presented by the current market conditions [56] Other Important Information - The company settled outstanding litigation with Mosaic, incurring a one-time expense of 10 million loan under the CARES Act Paycheck Protection Program, which is anticipated to be mostly forgiven [69] Summary of Q&A Session - No Q&A session was held during this call due to stay-at-home restrictions, but a follow-up call is scheduled for May 11 to address investor questions [3][71]