Intrepid Potash, Inc. Q3 FY2025 earnings call

Management Statement and Operational Highlights

• Strong Financial Performance: Intrepid sustained strong financials in Q3 with net income of $3.7 million and adjusted EBITDA of $12 million, compared to net loss of $1.8 million and adjusted EBITDA of $10 million last year. Year-to-date adjusted EBITDA of $45 million is the best start since 2015.
• Drivers of Results: Higher pricing in Potash and Trio (fully capturing first half price increases in Q3) and higher production leading to better unit economics. Potash COGS improved 9% to $327 per ton, Trio COGS improved 15% to $238 per ton.
• Operational Highlights: Permitting for the AMAX Cavern at HB facility expected to wrap up in Q1 2026. Trio production exceeding expectations due to new continuous miners and restarted fine langbeinite recovery circuit. Expecting another continuous miner in Jan 2026 to boost Trio production.
• Market Commentary: U.S. ag markets showing green shoots with China trade deal; potash market supply/demand balanced with lack of significant new supply until mid-2027, providing pricing support.

Segment Performance

• Potash: Q3 average net realized sales price for potash was $381 per ton. Q3 production was 41,000 tons (delayed to maximize evaporation). Year-to-date, potash cost of goods sold improved by 9% to $327 per ton. Q4 sales volumes expected to be 50,000-60,000 tons at an average net realized sales price of $385-$395 per ton. Year-to-date segment gross margin was $13.6 million, $0.6 million higher than prior year.
• Trio: Q3 average net realized sales price was $402 per ton. Q3 production was 70,000 tons. Year-to-date, Trio gross margin was $23 million, vs. $1.6 million in the prior year. Q4 sales volumes expected to be 80,000-90,000 tons at an average net realized sales price of $372-$382 per ton. 2026 Trio production forecasted 285,000-295,000 tons.
• Oilfield Solutions: Lower water sales and oilfield activity reduced gross margin in Q3. Year-to-date revenues and profitability on the South Ranch were consistent with recent historical performance.

Guidance

• Q4 2025: Potash sales volumes expected 50,000-60,000 tons at $385-$395 per ton. Trio sales volumes expected 80,000-90,000 tons at $372-$382 per ton.
• 2026: Trio production forecasted 285,000-295,000 tons, expected to drive 5%-7% improvement in per unit costs. 2025 capital spend expected $30M-$34M, including ~$5M for AMAX Cavern.

Risks

• Weather Impact: Delaying potash production in Q3 to maximize evaporation, and potential weather effects on future production.
• Permitting Challenges: Uncertainties around permitting for the AMAX Cavern could delay capital allocation and project progress.

Question and Answer

• Q: Touch on the AMAX Cavern CapEx and capital allocation. A: CapEx for AMAX Cavern spread over years; focus on reinvesting in core assets before considering capital returns.
• Q: Order book for Potash and Trio. A: Trio order book strong due to fill program response; Potash order book good with diverse sales mix insulating from potential demand slowdown.
• Q: Pathway for AMAX Cavern permit. A: Permit expected Q1 2026, with details on timing and next steps dependent on permit outcome.
• Q: Farmer economics impact on demand. A: Order books strong for both Potash and Trio, diversity of potash mix helps insulate from potential demand slowdown.
• Q: Capital allocation post-structural profitability. A: Continued focus on core assets, more work needed to achieve resilient results before considering capital returns.