Intrepid Potash, Inc. Q3 FY2024 earnings call

• Acknowledged Bob Jornayvaz's leadership and ongoing CEO search.
• Macro outlook: U.S. agriculture market with crop futures at historical averages, farmers impacted by inflation; global potash market balanced with steady demand.
• Potash: Completed HB injection pipeline Phase 2, expect improved production rates. Harvest year 2024-2025 production up 16% midpoint.
• Trio: Operational improvements led to better unit economics, positive gross margin in Q3.
• Oilfield Solutions: Increased water sales.
• Lithium project at Wendover progressing; started permitting test well at AMAX cavern.
• No long-term debt, good liquidity; amendment to crop development agreement with XTO has guaranteed $50M payment and potential $100M more (timing uncertain).

Potash

• Adjusted EBITDA totaled $10 million in Q3, slight sequential increase but $7.8 million improvement y-o-y. Full-year 2024 potash production expected 280,000-290,000 tons. Harvest year 2024-2025 expected 280,000-300,000 tons (16% increase midpoint). Potash segment cost of goods sold per ton improved 14% y-o-y.

Trio

• Q3 sales volumes 45,000 tons at net realized sales price $312/ton. Cost of goods sold $272/ton vs $341/ton y-o-y. 2024 Trio cash production cost savings at higher end of $8M-$10M range.

Oilfield Solutions

• Q3 segment margin $3.1 million, more than double y-o-y and up ~$1M sequentially, due to increased water sales from Intrepid South. Expected to return to first half rates in Q4 2024

• Fourth quarter potash sales volumes 45,000-55,000 tons, avg net realized price $340-$350/ton.
• Trio sales volumes 40,000-50,000 tons, avg net realized price $315-$325/ton.
• Lithium project is longer-term with multi-year commissioning timeline once partner selected.
• Permitting test well at AMAX cavern underway.

• Market conditions affecting U.S. agriculture demand.
• Timing variability in Oilfield Solutions margins due to South ranch completion operations.
• Uncertainty around global potash market moves like Belarus-Russia production cut proposals and their impact on supply-demand balance.

Q: Concerns from growers about income levels and potential demand destruction, especially with global potash market dynamics A: Zachry Adams noted global demand normalized in 2024 and expected to continue, with potash seen as good value for growers. Matthew Preston mentioned balanced global market and Zachry Adams discussed U.S. distributor inventory focused on managing capital.

Q: Impact of Belarus-Russia production cut proposals on U.S. distributors and byproduct sales A: Matthew Preston noted the global market is balanced, and Zachry Adams discussed distributors focusing on managing capital and projecting good potash demand into spring 2025; byproduct sales steady with production increases not significantly changing outlook