Intrepid Potash, Inc.
Q3 2012 Earnings Call Transcript

Published: 1 Nov 2012

[Operator:]

Good morning, and welcome to the Intrepid Potash Third Quarter 2012 Earnings Conference Call. [Operator Instructions] I would like to remind everyone that this conference is being recorded today, Thursday, November 1, at 8

[Martin D. Litt:]

Good morning. Thank you all for joining us for our third quarter 2012 earnings conference call. Participants from the company include Bob Jornayvaz, Executive Chairman of the Board; David Honeyfield, President and Chief Financial Officer; and Kelvin Feist, Senior Vice President of Sales and Marketing. Also in the room with us today are Hugh Harvey, Executive Vice Chairman; John Mansanti, Senior Vice President of Operations; Brian Frantz, Vice President of Finance and Chief Accounting Officer; and Ken Taylor, Vice President of Business Development & Research. During today's call, Bob will recap third quarter results, provide highlights on capital projects and talk briefly about our corporate strategy. Kelvin will cover sales and marketing, and Dave will wrap things up with some additional capital investment details and an operations review. I would like to remind everyone that statements made on this call that are not historical fact or that express a belief, expectation or intention, including statements about our financial and operational outlook, are forward-looking statements within the meaning of the United States securities laws. These statements are not guarantees of future performance. A number of assumptions, which we believe are reasonable, were made in connection with the expectations reflected in such forward-looking statements. The forward-looking statements involve risks and uncertainties which could cause actual results to differ from our expectations. For more information with respect to the risks, uncertainties and other factors which could cause our actual results to differ from our forward-looking statements, we direct you to the news release we issued last night and the risk factors and management's discussion and analysis of financial condition and results of operation in our most recent annual report on Form 10-K and subsequent quarterly reports on Form 10-Q as filed with the SEC. All forward-looking statements are qualified in their entirety by such factors. Our earnings news release, which is posted on our website at intrepidpotash.com, includes a reconciliation of certain non-GAAP financial measures to the most directly comparable GAAP measures, including adjusted EBITDA, which will be used on this call. All references to tons are to short tons of 2,000 pounds. I will now turn the call over to Bob Jornayvaz.

[Robert P. Jornayvaz:]

Thanks, Martin, and thanks to those joining us today to learn more about Intrepid's third quarter 2012 results and current market trends. Before we start, I first want to say that our thoughts and prayers and sympathies are with the victims of Hurricane Sandy. It was a brutal storm, and we wish all of you that withstood it, all the best. This quarter, our sales volumes of 240,000 tons of potash sold in the third quarter demonstrate the benefits of our marketing strategy in maintaining strong relationships with a broad customer base and capitalizing on the diverse markets and crops we serve. During the quarter, we earned $0.44 per diluted share on net income of $33.3 million, and our adjusted EBITDA was $56.3 million. We once again achieved the highest average per ton cash margin of North American potash producers that have already reported results for the quarter. Our balance sheet remained debt-free, with $146 million of cash and investments as of September 30, and we remain on track to invest $225 million to $300 million of capital in 2012 to grow our business. As crops are harvested and farmers gain certainty around their crop insurance payments, we expect farmers to refocus their attention on the solid economic potential of next year's crop. The drought conditions across certain areas of the country have resulted in below average crop yields. The low grain yields have led to tight stocks-to-use ratios, which has caused the increase in commodity prices. These strong grain commodity prices should provide the farmer with a favorable profit outlook for 2013. This profit potential, together with robust acreage adjustments for 2013, supports our very positive outlook for potash consumption. We expect farmers will ensure there are adequate nutrients in the soil to grow a strong crop in 2013. More specific to Intrepid, let me emphasize a few items. We are making steady progress at our East Facility through our long-term improvement plan, with sequential improvements in potash production over each of the last 2 quarters. We remain committed to this plan and are dedicating the resources needed to continue to increase production at this facility. Our West Facility continued its steady, reliable production. And we've had very good performance from our Moab and Wendover facilities. During the quarter, we were also able to secure several new state and federal potash leases within and around our current lease holdings in New Mexico that have been pending for several years. Acquisition of these strategic leases is a fundamental step in our ongoing growth strategy and now allows us to move to the next stage of creating opportunities for additional low-cost solar solution mining in the area. Intrepid's ability to recognize and execute on organic growth is one of our core strengths, which will continue to create shareholder value. The construction of the HB Solar Solution Mine has progressed on all fronts. We have actually completed 2 of operation ponds and have made good progress on an additional 8 of the total 18 ponds. We have drilled almost all the injection, extraction and brine wells necessary for the project. We have built 72 miles of pipeline. We've constructed the brine makeup system, and the mill construction site has been prepared and mill construction will start any day now. We began injecting brine into the HB Mine workings in August and are planning to begin filling the evaporation ponds this month. Assuming everything stays on schedule and the weather cooperates, we expect first production from HB in the fourth quarter of 2013. The construction of our larger and more efficient state-of-the-art compaction plant at our North Facility is moving along quite well. We anticipate the plant being online in mid-2013, prior to the first tons from the HB Mine and the additional production expected from our West Mine. In Moab, we are making great progress on our new cavern project. Our team of geologists is using the latest drilling technology to intercept the potash ore within the bedded deposits, which will result in increased production going forward. We're extremely proud of the projects we have completed, those that are under construction, and even those that are still on the drafting table. This team is focused on actually building value. Kelvin Feist will take the call from here and provide you a brief market update.

[Kelvin G. Feist:]

Thanks, Bob. We sold 249,000 tons of potash during the third quarter at an average net realized sales price of $444 per ton. This compares to 190,000 tons of potash sold in the third quarter of 2011. As we discussed on the second quarter call, we would exit the spring with minimal potash inventories. As a result, we saw dealers actively purchasing potash through our summer-fill program in anticipation of the fall application season. Dealer and farmer attitude in North America is relatively positive and the fall season is unfolding as expected, suggesting that we will see normal demand in the 2013 crop year. It is important to keep in mind that we are advantaged by selling all of our potash domestically, rather than into the softer international markets. While the U.S. market remains strong, there's still some volatility, as much of the fourth quarter sales are heavily weather-dependent and based on the willingness of dealers to fill potash storage for spring. Like our competitors, we recognize the trend towards lower risk tolerance at the dealer level. As a result, we have been more proactive in securing warehousing and consignment arrangements with our customers. This strategy has helped enable us to move product closer to the market and will help us to capitalize on more just-in-time sales opportunities. The healthy diversity within our distribution channels enables us to consistently achieve a net realized sales price advantage over our competitors. Turning to Trio, demand remains strong and we are able to sell every ton we can produce. The market continues to recognize the value of the specialty product, as we have seen the net realized sales price of Trio increase to $336 per ton in the third quarter of 2012, up from $322 last quarter. I will now turn the call over to Dave Honeyfield for some final remarks.

[David W. Honeyfield:]

Thanks, Kelvin. On balance, things are going quite well at our facilities, and the execution of our capital project plan remains on track and on budget. As our results for the quarter show, our strategy of optimizing production and selling into our backyard markets remains sound, and allows us to leverage our business to deliver a higher per ton average cash margin than our North American competitors. We remain committed to delivering strong returns on invested capital by increasing our production and lowering our overall production costs. We were able to deliver a cash operating cost of goods sold, net of by-product credits of $167 per ton this quarter, having built a strong book of business and benefiting from sales from our lower-cost operations. We remain on track to deliver cash operating cost of goods sold between $175 and $185 per ton for the full year, highlighting the benefit of our low-cost solar evaporation production and our operations team's dedication to managing costs across all of our facilities. Bob touched on it earlier, but I want to put numbers around the improvements we have obtained at East. Our production levels of both potash and Trio at East during the third quarter of 2012 were sequentially higher than the first 2 quarters of the year. Most significantly, potash production from the East Facility increased 23% in the third quarter from the second quarter, even with the scheduled maintenance turnaround during this period. This was on the heels of the 20% improvement we saw from the first quarter to the second quarter this year. At the East Facility, we're taking the right steps, we have the right people in place, and we expect to see continued improvements in our results over time. The HB Solar Solution Mine is moving full speed ahead and on track with the key milestones within an aggressive schedule. The project remains on budget, with $99 million invested thus far of an expected total investment of $200 million to $230 million. The North compaction project is also moving along very well. This project is on budget and on schedule, with $32 million of an expected $95 million to $100 million investment invested as of the end of the third quarter. The foundation of the new compaction structure is substantially complete, steel erection is on schedule and both compactors have already been set in place. In closing, during the third quarter of 2012, we continued to make significant investments that will grow our production, lower our overall cash operating cost per ton and increase our marketing flexibility. Our very strong sales volumes reflect the success of our continued efforts to meet the needs of our customers in a dynamic, agricultural market. We remain confident in the direction of the business, and look forward to sharing with you our continued success. We'll now open the lines for any questions.

[Operator:]

[Operator Instructions] The first question is from Mark Connelly of CLSA. Mark W. Connelly - Credit Agricole Securities (USA) Inc., Research Division Just 2 things. First, you guys may be the only potash producer that doesn't have high inventory right now. I'm curious if you're worried that that's going to affect your spring fill. And then the second question is a broader one. When you look at your current mix of customers, how different is it before the Southwestern drought? I guess, what I'm trying to figure out is, if weather returns to normal in the Corn Belt and is, hopefully, returning to normal in the Southwest, are you going to see a big swing in the geographic mix of your own business?

[David W. Honeyfield:]

Do you want me to -- why don't I start on that, and Kelvin and Bob, if you guys can pop in as we need to. Mark, I think on the inventory comment, I think you hit on it that we sold about 49,000 tons more than we produced during the third quarter so we didn't have a lot of inventory. But I think, the -- with the plants producing at good levels right now and the demand from our customers being, we think to be fairly normal over the upcoming season, we really expect to be in good shape to deliver on the results that we put forward there. I think with regards to the drought in the Southwest that we had, really, what, 2.5 seasons, 2 seasons ago? We've seen good activity out of our Texas, Oklahoma markets. And certainly, that's helpful. Kelvin, I don't know if you want to add any more to that?

[Kelvin G. Feist:]

Sure. I think just on the inventory side, our belief is that a lot of the inventory that we're seeing on that 5-year average is standard inventory. I think the granular sales went up pretty well for most folks, both in North America and Latin America. And I guess, in terms of summer fill, we haven't started any of that yet -- or spring fill, excuse me. We're going to -- we expect to see some demand show up here in the next month or so, and we feel like we can cover off any of our customer needs based on what we have today. On the mix of customers, I guess we're hopeful that the Southwest continues to return to normal. We did see a nice uptick last year, and we're hoping that we get some continued moisture down there to allow us to ship closer to our facility in Carlsbad. Having said that, we've got a nice geographical footprint that we're playing in right today and we're pretty comfortable with it.

[Operator:]

The next question is from Edlain Rodriguez of Lazard Capital Markets.

[Edlain S. Rodriguez:]

Just one quick question, Bob. I mean, now with the dealers continuing to manage their inventories, I mean, what can you do, I guess, like to vary your production or maybe in terms of warehousing, in order to adjust to that new normal that we're seeing nowadays?

[Robert P. Jornayvaz:]

Well, I think the key thing is what Kelvin and Dave touched on earlier, is if you look at what we've already sold, we're managing our inventory through good diverse marketing and sales. So instead of building inventory, we've been able to go out and sell down our tonnage at favorable pricing because of our very diverse marketing and what we think is a pretty sound and solid marketing strategy as is reflected in our numbers. So we continue to have a very diverse strategy that includes warehousing, includes consignment, but it also includes a great backyard market that we're selling into and it's clearly reflected in our numbers.

[Edlain S. Rodriguez:]

Okay. I had another question on pricing. I mean, can you talk about what you're seeing the pricing trend into the fourth quarter compared to the third quarter?

[Robert P. Jornayvaz:]

I think if we see any weakness in the fourth quarter overall, it's going to be very minor when we look at it on a quarter-by-quarter basis.

[Edlain S. Rodriguez:]

And finally, just to remind us. I mean, what's your production capability? I mean, let's say, if I'm looking into 2013, like, how much potash can you produce if you were to -- yes, how much potash can you sell if you were to produce -- if you sell everything that you can produce?

[David W. Honeyfield:]

Edlain, this is Dave. I'd probably take you back to where we opened up 2012. And if you remember back, we had a higher estimate of what our production would be for the year. I think that, that -- you just have to go back and look at it. And that includes having the East Facility operated at good rates. And I think that the long-term improvement plan that we've been executing on is going to allow us to do that. So I expect that we'll see a nice uptick at the East Facility. We still anticipate seeing some additional tons come in from the HB project that will come in towards the very end of the year. And then we are continuing to invest in our West Mine as well. And with the North compaction project anticipated to come online in the mid-part of the year, it gives us the capability to compact the additional tonnage that we expect to come through the mills. So we're still going through that budgeting process right now. So I don't -- I'm not prepared to give spot on numbers. But I think the piece to take away is that, we've been doing a lot of that necessary work and I think that the capabilities are as strong as they've ever been for us as a company to deliver on an increased production base. And that's what we're committed to doing.

[Operator:]

The next question is from Vincent Andrews of Morgan Stanley.

[Vincent Andrews:]

I just want to reconcile, in the press release, you guys were talking about how the dealer wants to end the fall season empty. But then we were just also talking about spring fill. And so, just help me understand the difference between those 2, those 2 comments?

[Kelvin G. Feist:]

Okay. Maybe I'll start with investments. It's Kelvin here. I think what we're seeing is that continued volatility, if you will, and a risk-averse dealer. So whenever you got that caution, we're seeing the folks kind of making sure that the farmer is going to buy before they make any commitment. So I guess, as we look through, we're getting some decent demand in application here for fall. But then when that ends, the bins will be empty again and when will that recharge happen? So I guess, we're a little bit tentative on that. We're not sure exactly how that's going to go. If you look at it, the commodity prices are very strong. So that drives them to look towards maximizing their production. But on the flip side, you're seeing some supply/demand balance issues more so internationally that's got them scratching their heads. So they're being very cautious, I think, going into the next fill season and concerned that there might be some price pressure.

[Vincent Andrews:]

Okay. And could you also comment on sort of the level of non-North American producer competition that's entered the market, obviously China? And I know there's a difference in the inventory grades and so forth, but could you just comment on that?

[Kelvin G. Feist:]

I guess, maybe if you can rephrase the question.

[Vincent Andrews:]

Sure. Basically what I'm asking is how much product is coming into the Gulf from non-North American producers and what impact is that having or not having?

[Kelvin G. Feist:]

Okay. So based on imports, I guess, I don't have a number of exactly what's come of in here this year. I would suggest that ourselves and others are competing more vigorously for those tons. So there's probably, on the river, more competition than there was 1 year or 2 ago. But I guess, I don't see any -- I think it's a decrease in the imports versus an increase.

[Operator:]

The next question is from Michael Hoffman of Wunderlich.

[Michael E. Hoffman:]

Have you gotten any early indications from the soil testing that's been going on, where we've had early harvesting and sort of the moisture level indications, given we've had rain in the Corn Belt lately?

[Kelvin G. Feist:]

Mike, I'll take that one. It's Kelvin Feist here. I think there's lots of talk about that here recently, and to be honest, we haven't seen the impact yet or if there is going to be one. What we've seen over the past few years is declining K values in the soil. So what will a drought create? Will that just flatten the number? And I guess, that's still a question that remains unanswered to us. But the trend is that the rates that we're getting feedback on are similar to last year. So we haven't seen any significant drop in application rates to date. I think what's important is that the farmer needs to do the soil test, make sure that he's applying a balanced nutrition so that the fertilizer isn't the limiting factor on his yield for this next year. Because there's just so much potential for them to make some decent revenue breaker.

[Michael E. Hoffman:]

Okay. And then what message are you conveying to the end market about your level of Trio commitments that you can make as you're working through the LRIP program's ongoing production increases? What level of commitment are you telling the market about production on an annual basis?

[David W. Honeyfield:]

Michael, this is Dave. Really, at this point, we're telling people to expect a pretty flat year, I think. And we're continuing to progress through the program at the East mine. And I think it's important to recognize that we've gone through what I would call more of those fundamental steps on the potash portion of the production plant and beginning to direct additional attention to the Trio portion of the production facility. So we know that the demand is out there and that the price is very supportive. And it's all hands on deck to make sure that we're delivering more product and getting up to that capacity level.

[Michael E. Hoffman:]

Okay. And then tying that into a comment you made earlier, am I correct in this statement that you expect to produce more K, more pure potash, in '13 than you did in '12? And if I took the mid-point of your most recent guidance, say that's 7 95, so you expect to do more than 7 95 in '13 than you did in '12.

[David W. Honeyfield:]

That's my expectation at this point, for similar reasons I touched on earlier, Michael. And I think that the foundation is there for that. Like I said, we're still going through the final budgeting process here and we'll provide that update in conjunction with our first quarter call.

[Michael E. Hoffman:]

All right. And then, just one last one. Based on the revised data set that we got on the press release, if -- and I understand the variable here is the price of the commodity, but if the price stayed flat with what your data was in 3Q, should we expect earnings to be down sequentially in 4Q?

[David W. Honeyfield:]

I think you need to take a look at where we're expecting potash sales to be. And those numbers do project to be a little bit lower than where we came in at third quarter. But I think in terms of overall margin and such, I think all those pieces are pretty well laid out on that, Michael. So hopefully, we've given you all the tools to calculate it.

[Operator:]

The next question is from Andrew Dunn of KeyBanc Capital Markets.

[Andrew Dunn:]

If we can just go back to the LRIP for a second. Maybe you guys can give a little more color on kind of what surprised you or what's prevented the results from coming at that project as you expected? And maybe also you could give us an idea of the magnitude of the additional CapEx you're looking at there?

[David W. Honeyfield:]

I think the magnitude of the additional CapEx is pretty slight is our expectation at this time. Our overall project for the LRIP, including the pellet plant that we brought online in the third quarter, was right at $86 million. The construction work's essentially complete. We have a very small AFE that's out there right now for less than $1 million. But I think it is important to note that we told ourselves and we put the plan in place that has us continuing to do some work into early 2013. So our overall expectation is that it will be a pretty small number. But there will probably be a little bit of capital that goes along with that. So hopefully, that helps give you a little perspective around it.

[Robert P. Jornayvaz:]

I guess, I'd like to remind you to go back and look at the potash numbers that we've talked about, that the potash production at East was up 20% up from second quarter over first, and another 23% from third over second. And we're seeing gradual and significant improvement on the potash side of that plant. And our improvements are working and working quite well. And we've got the same kind of a plan in place on the langbeinite side. And we have every reason to believe that when we're done, that the langbeinite side is going to work as designed.

[Andrew Dunn:]

Okay. And then kind of touching on that East Facility. And obviously, yes, the results have improved there. Could you give us some idea of what the utilization rates are like there now? And kind of how much farther you have to go there?

[David W. Honeyfield:]

I think, overall, plant availability, utilization rate of the plant is good, throughput is good. The focus is really around achieving that recovery improvement. And...

[Robert P. Jornayvaz:]

And let me go back and just remind you that we're mining very complex mineralogy. And the technology that we're using to mine and capture both the potash and langbeinite is unique to this facility in terms of the world. This is the only plant like it in the world. And so when we look at availability, when we install, say, a new DMS facility or a new set of screens or something to invent the technologies that we're inventing, and then to put them in place requires a bit of trial and error, which means you take your plant down to install something new and then you turn it back on and you test it to see how well it worked. So that whenever you design a new plant that includes lots of new technology, that there's not only trial and error, but there's the need to actually turn it on and turn it back on again. And so we just want to keep everyone's perspective appropriate that when you have a brand-new plant that includes brand-new technology, mining 2 minerals from the same ore body and trying to capture and maximize both of those minerals, it does require a little bit of trial and error. So we -- it's working. It's coming along, not quite as quickly as we'd originally hoped, but it is working. And we would just ask for your continued patience on that.

[Andrew Dunn:]

All right. Just one last question, I'll hop back in line. You guys made a point of mentioning that there were kind of additional dealer and logistics relationships established. I'm just curious, was there something kind of unique in the quarter? Has there been more of that happening in this last quarter than usual?

[Kelvin G. Feist:]

I'll take that one, Andrew. I guess what we're seeing is there's been a trend towards over time. And I think that just takes us back to the level of risk that the retail side of the business is taking and they're saying, "Look, I'm not taking that amount of risk. You have to fall back somewhat to the producer." So I would say it's been a trend for a period of time. What we've been seeing is some of our competitors knocking on doors that we traditionally sell to. And so we've been reacting to that with some warehousing agreements.

[Operator:]

The next question is from Bill Carroll of UBS.

[Bill Carroll:]

Can you give some more color around your decision to tap the debt capital markets for funding? It seems you have ample liquidity with your cash on hand and borrowing capacity under your revolver. So I was just wondering is the decision mainly driven by the low interest rate environment and your desire to perhaps walk in longer-term funding as you look to complete additional phases of the HB Mine?

[Robert P. Jornayvaz:]

I think it was a lot of different factors that came together at once. Number one, we were at historically low interest rates. And so the capital markets provided the opportunity to borrow money at historically low rates. And we were ready, willing and able to participate in those markets. And so I think that's the nature of Intrepid, is when opportunity presents itself, you're there and ready. When you go through the long list of projects that we have identified, created, executed on, we still have a long list. We have a long list of organic projects, including additional solar solution mining projects that we want to be able to capitalize on and execute on in a very timely fashion as we continue to identify them, acquire the leases on them and turn them from thoughts and ideas into real opportunities. And I think so that when you look at the combination of the fact that the capital markets have provided the opportunities. We've been able to secure leases that we've been working on for several years. We've got lots of ideas that provide additional recovery opportunities, additional mining opportunities. Those 2 came together at the same time. And once again, being prepared, we're able to take advantage of that. So when we look at everything that we're looking at opportunistically and the interest rates that we were able to achieve, we just think it was the right decision for Intrepid to maintain a very strong balance sheet that has a very long list of very high [indiscernible] kind of projects.

[Bill Carroll:]

Great. And one more on CapEx. Your guidance range for 2012 is still the same. It's rather wide, given that we're 10 months into the year and your main projects remain on track. So is it still a question of just the function of timing of when the money may get spent rather than cost inflation, cost overruns and so forth?

[David W. Honeyfield:]

Yes, Bill. This is Dave. We're very confident that we're not seeing any of the cost overrun inflation bits and pieces. It's -- the breadth of that range -- it's probably a little wider than it needs to be. But I think that the fair point of it is that there is a lot -- there are a lot of pieces of equipment that is scheduled to be delivered here and in the next couple of months. If any of that can come forward, we'll work to have it come forward. And we're -- we've got guys out at manufacturer sites, trying to make sure they're staying on schedule. But bits and pieces of that could move by a few weeks. And it just has a pretty big effect, given the size of some of the activity over the next couple of months.

[Operator:]

The next question is from Joel Jackson of BMO Capital Markets.

[Joel Jackson:]

Let me ask a bit of a maybe a weird question. Is it conceivable, is it absurd that at some point in the not-too-distant future a ton of Trio could sell at or around the price of kind of potash on from what you see? Because we've certainly seen Trio price discounts move from about $200, $250 a ton versus potash down to about $100. What's the thinking on that? And what's a run rate here for what Trio can do?

[Robert P. Jornayvaz:]

I guess I'm -- Joel, this is Bob. I guess, if I'm hearing question properly, you're asking if Trio could achieve price parity with potash. Is that the question?

[Joel Jackson:]

Not price parity, but a lot closer to price parity because it seems to be doing that in the last couple of years.

[Robert P. Jornayvaz:]

Well, we can go back in history and there was a time when Trio or langbeinite actually traded it at premium to potash. So your question is not that weird or absurd. It's not one, though, that we see happening in the near term. We do see continued very, very strong demand for our langbeinite product. The market is bigger than what we're able to produce right now. And that's why we're working so diligently to increase our langbeinite production. But we do foresee continued strength in the price of langbeinite and Trio -- and/or Trio. So I don't know if that answers your question or not. I'll let Kelvin add a little color to that.

[Kelvin G. Feist:]

Yes, Joel, I think the other side of it is you're seeing the price of sulfates running strong here today. And obviously, there's a lot of sulfate in our material. There's mag deficiencies showing up in different places, so people are putting a value on that as well. So there's those pieces. And I think just developing those chloride-sensitive crops, which tend to be more high-value, allows us to sell and I guess see that step change year on year. But I guess I don't see price parity between the 2 in the near term. I think, we're pleased with where it's at today and I guess I don't believe that we can sell it at or above potash pricing.

[Joel Jackson:]

Okay. And also, I just want to reconcile a couple of comments you made earlier in the call. You indicated that imports on the River are more competitive this year. But I believe you also indicated there's been a decrease in imports. I mean, are you seeing -- I mean, I believe about a year ago, we saw a whole bunch of Russian product that was basically sitting out in the River. How does that compare to what we see now?

[Kelvin G. Feist:]

Yes, Joel, I think my comments about some more pressure on the River. I think there's more reaction from the competitors here in North America to reduce or try and block some of those imports that are going a long ways up the River. So that was the context that I was trying to indicate there. I guess it remains to be seen how much shows up here. We don't have, obviously, any schedule or any understanding of who might bring and how much. But I think the fact that everyone is being more competitive in that region is probably going to decrease the imports overall for the year.

[Martin D. Litt:]

Well, at this point, we don't see any other questions in the queue. We'd like to thank everyone for joining our call today and for making an effort and for taking the time to learn more about Intrepid. Thank you very much.