Description of Intrepid Potash Inc's Business Segments
Our two primary products are potash and Trio®. Potash and Trio®
Potash
We sell potash into three primary markets: the agricultural market as a fertilizer
input, the industrial market as a component in drilling and fracturing fluids
for oil and gas wells and an input to other industrial processes, and the animal
feed market as a nutrient supplement. Potash is sold in different product sizes,
such as granular, standard, and fine standard. The agricultural market predominately
uses granular-sized potash, while the industrial and animal feed markets mostly
use standard- and fine standard-sized product. We have the flexibility to produce
all of our product in a granular form decreasing our dependence on sales of
any one particular size of potash.
We manage sales and marketing operations centrally. We evaluate our customers
potash needs to determine which of our production facilities is best suited,
typically based on geographic location, to fill sales orders with the objective
of realizing the highest average net realized sales price per ton.
Average net realized sales price per ton is a non-GAAP measure that we calculate
as sales less freight costs divided by sales tons.
Many of our potash sales are geographically concentrated in the central and
western United States. Fertilizer sales are affected by weather and planting
conditions in these regions, as well as farmer economics. A significant portion
of our industrial sales are derived from oil and gas customers and correlate
to drilling rig counts in specific regions in the United States.
Trio®
Trio® is our specialty fertilizer that delivers potassium, sulfate and magnesium
in a single particle and has the added benefit of being low in chloride. This
unique combination of nutrients makes Trio® an attractive fertilizer across
diverse crops and geographies. We produce Trio® in premium, granular, standard,
and fine standard sizes for sale both domestically and internationally.
By-products and Other Products
We produce salt, magnesium chloride, metal recovery salts and brine containing
salt and potassium from our mining processes. Our salt is used in a variety
of markets including animal feed, industrial applications, pool salt, and the
treatment of roads and walkways for ice melting or to manage road conditions.
It is also sold as a nutrient supplement in animal feed and for use in other
industrial processes. Magnesium chloride is typically used as a road treatment
agent for both deicing and dedusting. Our brines are used primarily by the oil
and gas industry to support well development and completion activities. The
sales of these by-products are accounted for as by-product credits to our cost
of sales.
We are in the process of implementing or considering a number of initiatives
designed to maximize the value of our assets and expand sales of our by-products
and water, particularly to service the oil and gas markets near our operating
plants. In addition, we may enter into new or complementary businesses that
expand our product offerings beyond our existing products. For example, we may
expand into oil, natural gas, or other commodities or into products or services
in our current or new industries.
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