Intrepid Announces Second Quarter 2024 Results

Rhea-AI Summary

Intrepid Potash (NYSE:IPI) reported its Q2 2024 results with total sales of $62.1 million, down from $81.0 million in Q2 2023. The company posted a net loss of $0.8 million ($0.06 per diluted share) compared to net income of $4.3 million ($0.33 per diluted share) in Q2 2023. Adjusted EBITDA was $9.2 million, down from $15.8 million in the same period last year.

Key highlights include:

• Potash sales volumes of 55,000 tons at an average net realized price of $405 per ton
• Trio® sales volumes of 63,000 tons at an average net realized price of $314 per ton
• Cash flow from operations of $27.7 million
• Capital expenditures of $11.3 million in Q2, totaling $23.0 million for H1 2024

The company expects full-year 2024 capital expenditures of $40-50 million and anticipates a 15% increase in potash production compared to 2023.

Positive

• Cash flow from operations remained strong at $27.7 million
• Trio® segment gross margin improved to $2.2 million, up $3.3 million sequentially and $1 million year-over-year
• Potash production expected to increase by approximately 15% in 2024 compared to 2023
• Successful completion of IP30B project, enhancing brine extraction capabilities
• Improved Trio® production rates and cost structure, with cost of goods sold decreasing to $284 per ton from $320 per ton in the prior year

Negative

• Net loss of $0.8 million compared to net income of $4.3 million in Q2 2023
• Total sales decreased by 23% to $62.1 million from $81.0 million in Q2 2023
• Adjusted EBITDA declined to $9.2 million from $15.8 million in Q2 2023
• Potash average net realized sales price decreased by 15% to $405 per ton
• Potash sales volumes decreased by 30% compared to Q2 2023

Financial Analyst

Intrepid Potash's Q2 2024 results show a significant decline in financial performance compared to Q2 2023. Total sales decreased by 23% to $62.1 million and the company reported a net loss of $0.8 million compared to a net income of $4.3 million in Q2 2023. This decline is primarily attributed to lower pricing for key products.

The potash segment saw a 41% decrease in sales, with average net realized sales price per ton dropping 15% to $405. Trio® segment sales also decreased by 8%, with average net realized sales price per ton falling to $314. However, the Trio® segment showed improved production efficiency and cost structure.

Despite challenges, the company maintains a strong liquidity position with $51.1 million in cash and no outstanding borrowings on its $150 million credit facility. The focus on operational efficiencies and cost savings initiatives, particularly in the Trio® segment, is a positive sign for potential margin improvements.

Market Research Analyst

The Q2 2024 results reflect broader market trends in the potash industry. The company's statement that the potash market is finding its midcycle pricing floor suggests potential stabilization in pricing, which could benefit Intrepid in future quarters. However, the current lower prices are impacting profitability across segments.

Intrepid's focus on increasing potash production by approximately 15% in 2024 compared to 2023 is a strategic move to improve unit economics. This, coupled with operational efficiencies in the Trio® segment, could position the company well for when market conditions improve.

The pause in the Intrepid South Sand Project development due to softening conditions in the oilfield services market indicates a prudent approach to resource allocation. Meanwhile, the ongoing lithium project in Wendover presents a potential diversification opportunity, although its impact remains to be seen.

Operations Management Expert

Intrepid's operational updates show mixed results. The successful completion of the IP30B project at the HB Solar Solution Mine is a positive development, expected to serve as the primary extraction well for future evaporation seasons. This, along with the Phase Two HB Injection Pipeline Project, should help improve brine flow rates and consistency.

The completion of Primary Pond 7 at the Wendover facility is another positive step, potentially increasing brine evaporative area and improving production from fall 2025. In the Trio® segment, the implementation of two continuous miners and a fine langbeinite recovery system has led to significant improvements in production rates and cost structure, with cost of goods sold decreasing from $320 to $284 per ton year-over-year.

However, the company faces challenges in maintaining consistent production levels, particularly in potash. The focus on improving potash production and unit economics through higher volumes will be important for future performance.

DENVER--(BUSINESS WIRE)-- Intrepid Potash, Inc. ("Intrepid", the "Company", "we", "us", or "our") (NYSE:IPI) today reported its results for the second quarter of 2024.

Key Highlights for Second Quarter 2024

Financial & Operational

• Total sales of $62.1 million, which compares to $81.0 million in the second quarter of 2023.
• Net loss of $0.8 million (or $0.06 per diluted share), which compares to net income of $4.3 million (or $0.33 per diluted share) in the second quarter of 2023.
• Gross margin of $7.6 million, which compares to $15.4 million in the second quarter of 2023.
• Cash flow provided by operations of $27.7 million, which compares to $30.5 million in the second quarter of 2023.
• Adjusted EBITDA⁽¹⁾ of $9.2 million, which compares to $15.8 million in the second quarter of 2023.
• Potash and Trio^® sales volumes of 55 thousand and 63 thousand tons, respectively, which compares to 79 thousand and 63 thousand tons, respectively, in the second quarter of 2023.
• Potash and Trio^® average net realized sales prices⁽¹⁾ of $405 and $314 per ton, respectively, which compares to $479 and $333 per ton, respectively, in the second quarter of 2023.

Management & Board of Directors Update

• On July 10, 2024, we announced that the Board of Directors (“the Board”) of Intrepid elected Barth Whitham, formerly Lead Independent Director, as its Chair. On that date, the Board also announced that it initiated a search process to identify a successor for Intrepid’s CEO, Bob Jornayvaz, who is currently out on an extended medical leave of absence, as it is unlikely that Mr. Jornayvaz will return to his CEO role. During this process, Intrepid’s CFO, Matt Preston, will continue to serve as acting principal executive officer, working closely with the rest of the Company’s management team and the Board.

Capital Expenditures

• Capital expenditures were $11.3 million in the second quarter of 2024, bringing our total capital expenditures to $23.0 million for the first six months ended June 30, 2024. We continue to expect full-year 2024 capital expenditures of $40 million to $50 million.

Project & Operational Updates

• HB Solar Solution Mine in Carlsbad, New Mexico
  • Replacement Extraction Well ("IP30B"): We successfully completed the IP30B project in June 2024 and the new extraction well is now serving as our primary source of brine for the current evaporation season. We expect IP30B will be our primary extraction well for the Eddy Cavern for future evaporation seasons.
  • Phase Two of HB Injection Pipeline Project ("Phase Two"): Phase Two is the installation of an in-line pigging system to clean the HB injection pipeline and remove scaling to help ensure more consistent flow rates. All pipeline is now installed and tanks have been set, and we expect to commission the project in the third quarter of 2024.
• Brine Recovery Mine in Wendover, Utah
  • Primary Pond 7 ("PP7"): Construction of PP7 is complete and the new pond is being filled with brine. This new primary pond is expected to increase the brine evaporative area at Wendover and help us meet our goals of maximizing brine availability, increasing brine grade, and improving production. We expect to see the production benefits of the new primary pond in the fall of 2025.
  • Lithium Project: We continue to advance our lithium project in Wendover and are in the process of reviewing proposals from multiple partners. The lithium already present in our byproduct magnesium brine is estimated to support approximately two thousand tons of lithium carbonate production per year assuming the existence of a commercially feasible extraction technology.
• Intrepid South
  • Sand Project: We have all necessary permits in place to begin construction and operation on our sand project. While our sand project shows good potential, owing to softening conditions in the oilfield services market, we’re pausing development and will be dedicating our resources to other strategic priorities at this time.
• East Underground Trio^® Mine
  • Operational & Cost Efficiencies: Owing to efficiencies from the two continuous miners placed into service in 2023 and the operation of our fine langbeinite recovery system, we've seen significant improvement in our production rates and cost structure compared to the prior year. For the first six months of 2024, our cost of goods sold totaled approximately $284 per ton, which compares to the same prior-year figure of $320 per ton. Improving our margins in the Trio^® segment through operational efficiencies and cost savings initiatives remains a key focus for Intrepid.

Liquidity

• During the second quarter of 2024, cash flow provided by operations was $27.7 million, while cash used in investing activities was $9.8 million. As of July 31, 2024, Intrepid had approximately $51.1 million in cash and cash equivalents and had no outstanding borrowings on our $150 million revolving credit facility.
• Intrepid maintains an investment account of short-and-long-term fixed income securities that had a balance of approximately $2.5 million as of July 31, 2024.

Consolidated Results, Management Commentary, & Outlook

In the second quarter of 2024, Intrepid generated sales of $62.1 million, a 23% decrease from second quarter 2023 sales of $81.0 million. Consolidated gross margin totaled $7.6 million, while net loss totaled $0.8 million, or a net loss of $0.06 per diluted share, which compares to second quarter 2023 net income of $4.3 million, or $0.33 per diluted share. The Company delivered adjusted EBITDA⁽¹⁾ of $9.2 million, down from $15.8 million in the same prior year period, with the lower profitability primarily being driven by lower pricing for our key products. Our second quarter 2024 average net realized sales prices⁽¹⁾ for potash and Trio^® averaged $405 and $314 per ton, respectively, which compares to $479 and $333 per ton, respectively, in the second quarter of 2023.

Matt Preston, Intrepid's Chief Financial Officer and acting principal executive officer commented: "Our strategic focus continues to be improving our potash production, and I'm happy to share that we saw the first indications of this in our second quarter results. Improved brine grades at HB from the Eddy Cavern and good early-season evaporation rates, allowed us to extend our spring production season and we still expect our 2024 potash production to be approximately 15% higher than 2023.

As for our second quarter results, our operational and financial performance continues to be solid. In Trio^®, our sales volumes and production are well ahead of last year's pace through the first six months of the year as increased operating rates from our new continuous miners and our modified operating schedule have driven significant improvement in both our total and per ton production costs. Trio^® segment gross margin of $2.2 million in the second quarter was an increase of approximately $3.3 million sequentially and $1 million year-over-year. As the broader potash market looks to be finding its midcycle pricing floor, we remain focused on improving our unit economics by means of higher potash production.

Lastly, we want to again extend our best wishes to Bob as he continues his recovery. We will provide updates on our search for a new CEO as that process unfolds in the coming months."

Segment Highlights

Potash

		Three Months Ended June 30,						Six Months Ended June 30,
			2024			2023			2024			2023
		(in thousands, except per ton data)
Sales		$	30,034		$	47,264		$	67,610		$	99,761
Gross margin		$	3,312		$	12,876		$	8,886		$	27,304
Potash sales volumes (in tons)			55			79			129			167
Potash production volumes (in tons)			40			12			127			102
Average potash net realized sales price per ton(1)		$	405		$	479		$	399		$	485

Our total sales in the potash segment decreased $17.2 million in the second quarter of 2024, compared to the second quarter of 2023, as potash sales decreased $17.0 million, or 41%, and potash segment byproduct sales decreased $0.3 million. Our potash sales decreased in the second quarter of 2024, compared to the second quarter of 2023, as our average net realized sales price per ton decreased 15%, and we sold 30% fewer tons. We sold fewer tons of potash in the second quarter of 2024, compared to the second quarter of 2023, as we had fewer tons of potash to sell due to lower potash production from our HB and Wendover facilities.

Our potash segment cost of goods sold decreased by 25% in the second quarter of 2024, compared to the second quarter of 2023, as we sold 30% fewer tons of potash, although our production costs remained elevated due to decreased production volumes over the past year. A significant portion of our potash production costs are fixed and an increase in potash tons produced reduces our potash per ton cost.

During the second quarter of 2024, we recorded lower of cost or net realizable value inventory adjustments of $1.4 million as our weighted average carrying cost per ton for inventoried potash products at our HB and Wendover facilities was higher than our expected selling price per ton for those products.

Our potash segment gross margin decreased $9.6 million in the second quarter of 2024, compared to the second quarter of 2023, due to the factors discussed above.

Trio^®

		Three Months Ended June 30,						Six Months Ended June 30,
			2024			2023			2024			2023
		(in thousands, except per ton data)
Sales		$	26,522		$	28,748		$	63,010		$	59,022
Gross margin		$	2,182		$	1,222		$	1,043		$	2,674
Trio® sales volume (in tons)			63			63			154			128
Trio® production volume (in tons)			68			58			122			107
Average Trio® net realized sales price per ton(1)		$	314		$	333		$	306		$	339

Trio^® segment sales decreased 8% during the second quarter of 2024, compared to the second quarter of 2023. Trio^® sales decreased $0.8 million, and our Trio^® segment byproduct sales decreased $1.4 million. Trio^® sales volumes were flat year-over year, and similar to potash prices discussed above, our Trio^® average net realized sales price per ton has decreased since the peak prices realized during the second quarter of 2022, as potassium fertilizer supplies have improved.

Our Trio^® cost of goods sold decreased 18% in the second quarter of 2024 despite sales volumes matching the prior year quarter, as improved production rates and decreased total production costs led to an improvement in our per unit costs. In the second quarter of 2024, we produced 68 thousand tons of Trio^® which compares to 58 thousand tons in the same prior-year period. A significant portion of our production costs are fixed and an increase in tons produced decreases our per ton production costs.

Our Trio^® segment generated gross margin of $2.2 million in the second quarter of 2024, compared to gross margin of $1.2 million in the second quarter of 2023, due to the factors discussed above.

Oilfield Solutions

		Three Months Ended June 30,						Six Months Ended June 30,
			2024			2023			2024			2023
		(in thousands)
Sales		$	5,539		$	5,111		$	10,862		$	9,361
Gross margin		$	2,130		$	1,284		$	4,129		$	1,756

Our oilfield solutions segment sales increased $0.4 million in the second quarter of 2024, compared to the second quarter of 2023, primarily due to a $0.2 million increase in brine water sales and a $0.3 million increase in other oilfield solution products and services. Our water sales increased compared to the prior year period due to increased sales of water on our South ranch. Our brine water sales and sales of other oilfield solutions segments products and services increased due to continued strong demand from oil and gas operators in the Permian Basin near Intrepid South.

Our cost of goods sold decreased $0.4 million, or 11%, in the second quarter of 2024, compared to the second quarter of 2023, due to using less contract labor. In the second quarter of 2023, we used contract labor to complete various projects at Intrepid South.

Gross margin for the second quarter of 2024 increased $0.8 million compared to the second quarter of 2023, due to the factors discussed above.

Notes

¹ Adjusted net (loss) income, adjusted net (loss) income per diluted share, adjusted earnings before interest, taxes, depreciation, and amortization (or adjusted EBITDA) and average net realized sales price per ton are non-GAAP financial measures. See the non-GAAP reconciliations set forth later in this press release for additional information.

Unless expressly stated otherwise or the context otherwise requires, references to tons in this press release refer to short tons. One short ton equals 2,000 pounds. One metric tonne, which many international competitors use, equals 1,000 kilograms or 2,204.62 pounds.

Conference Call Information

Intrepid will host a conference call on Tuesday, August 6, 2024, at 12:00 p.m. Eastern Time to discuss the results and other operating and financial matters and answer investor questions.

Management invites you to listen to the conference call by using the toll-free dial-in number 1 (800) 715-9871 or International dial-in number 1 (646) 307-1963; please use conference ID 1179359. The call will also be streamed on the Intrepid website, intrepidpotash.com. A recording of the conference call will be available approximately two hours after the completion of the call by dialing 1 (800) 770-2030 for toll-free, 1 (609) 800-9909 for International, or at intrepidpotash.com. The replay of the call will require the input of the replay access code 1179359. The recording will be available through August 13, 2024.

About Intrepid

Intrepid is a diversified mineral company that delivers potassium, magnesium, sulfur, salt, and water products essential for customer success in agriculture, animal feed, and the oil and gas industry. Intrepid is the only U.S. producer of muriate of potash, which is applied as an essential nutrient for healthy crop development, utilized in several industrial applications, and used as an ingredient in animal feed. In addition, Intrepid produces a specialty fertilizer, Trio^®, which delivers three key nutrients, potassium, magnesium, and sulfate, in a single particle. Intrepid also provides water, magnesium chloride, brine, and various oilfield products and services. Intrepid serves diverse customers in markets where a logistical advantage exists and is a leader in the use of solar evaporation for potash production, resulting in lower cost and more environmentally friendly production. Intrepid's mineral production comes from three solar solution potash facilities and one conventional underground Trio^® mine.

Intrepid routinely posts important information, including information about upcoming investor presentations and press releases, on its website under the Investor Relations tab. Investors and other interested parties are encouraged to enroll at intrepidpotash.com, to receive automatic email alerts for new postings.

Forward-looking Statements

This document contains forward-looking statements - that is, statements about future, not past, events. The forward-looking statements in this document relate to, among other things, statements about Intrepid's future financial performance, cash flow from operations expectations, water sales, production costs, acquisition expectations and operating plans, its market outlook, and statements regarding management matters. These statements are based on assumptions that Intrepid believes are reasonable. Forward-looking statements by their nature address matters that are uncertain. The particular uncertainties that could cause Intrepid's actual results to be materially different from its forward-looking statements include the following:

• changes in the price, demand, or supply of our products and services;
• challenges and legal proceedings related to our water rights;
• our ability to successfully identify and implement any opportunities to grow our business whether through expanded sales of water, Trio^®, byproducts, and other non-potassium related products or other revenue diversification activities;
• the costs of, and our ability to successfully execute, any strategic projects;
• declines or changes in agricultural production or fertilizer application rates;
• declines in the use of potassium-related products or water by oil and gas companies in their drilling operations;
• our ability to prevail in outstanding legal proceedings against us;
• our ability to comply with the terms of our revolving credit facility, including the underlying covenants;
• further write-downs of the carrying value of assets, including inventories;
• circumstances that disrupt or limit production, including operational difficulties or variances, geological or geotechnical variances, equipment failures, environmental hazards, and other unexpected events or problems;
• changes in reserve estimates;
• currency fluctuations;
• adverse changes in economic conditions or credit markets;
• the impact of governmental regulations, including environmental and mining regulations, the enforcement of those regulations, and governmental policy changes;
• adverse weather events, including events affecting precipitation and evaporation rates at our solar solution mines;
• increased labor costs or difficulties in hiring and retaining qualified employees and contractors, including workers with mining, mineral processing, or construction expertise;
• changes in management and the board of directors, and our reliance on key personnel, including our ability to identify, recruit, and retain key personnel;
• changes in the prices of raw materials, including chemicals, natural gas, and power;
• our ability to obtain and maintain any necessary governmental permits or leases relating to current or future operations;
• interruptions in rail or truck transportation services, or fluctuations in the costs of these services;
• our inability to fund necessary capital investments;
• global inflationary pressures and supply chain challenges;
• the impact of global health issues, and other global disruptions on our business, operations, liquidity, financial condition and results of operations; and
• the other risks, uncertainties, and assumptions described in Item 1A. Risk Factors of our Annual Report on Form 10-K for the year ended December 31, 2023, and our other reports we file with the Securities and Exchange Commission.

In addition, new risks emerge from time to time. It is not possible for Intrepid to predict all risks that may cause actual results to differ materially from those contained in any forward-looking statements Intrepid may make. All information in this document speaks as of the date of this release. New information or events after that date may cause our forward-looking statements in this document to change. We undertake no obligation to update or revise publicly any forward-looking statements to conform the statements to actual results or to reflect new information or future events.

INTREPID POTASH, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2024 AND 2023 (In thousands, except per share amounts)
		Three Months Ended June 30,								Six Months Ended June 30,
			2024				2023				2024				2023
Sales		$	62,055			$	81,035			$	141,342			$	167,955
Less:
Freight costs			9,423				10,516				22,253				22,106
Warehousing and handling costs			2,586				2,801				5,675				5,534
Cost of goods sold			41,070				52,336				97,501				108,581
Lower of cost or net realizable value inventory adjustments			1,352				—				1,855				—
Gross Margin			7,624				15,382				14,058				31,734
Selling and administrative			7,937				7,948				16,294				16,806
Accretion of asset retirement obligation			622				535				1,244				1,070
Impairment of long-lived assets			831				—				2,208				—
Loss (gain) on sale of assets			241				(7	)			492				193
Other operating income			(1,266	)			(439	)			(2,659	)			(730	)
Other operating expense			887				77				2,413				1,753
Operating (Loss) Income			(1,628	)			7,268				(5,934	)			12,642
Other Income
Equity in (loss) earnings of unconsolidated entities			(116	)			(1,059	)			33				(238	)
Interest income			547				76				791				161
Other income			60				43				68				56
(Loss) Income Before Income Taxes			(1,137	)			6,328				(5,042	)			12,621
Income Tax Benefit (Expense)			304				(2,023	)			1,079				(3,810	)
Net (Loss) Income		$	(833	)		$	4,305			$	(3,963	)		$	8,811
Weighted Average Shares Outstanding:
Basic			12,886				12,766				12,852				12,730
Diluted			12,886				12,855				12,852				12,865
(Loss) Earnings Per Share:
Basic		$	(0.06	)		$	0.34			$	(0.31	)		$	0.69
Diluted		$	(0.06	)		$	0.33			$	(0.31	)		$	0.68

INTREPID POTASH, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) AS OF JUNE 30, 2024 AND DECEMBER 31, 2023 (In thousands, except share and per share amounts)
		June 30,				December 31,
			2024				2023
ASSETS
Cash and cash equivalents		$	51,663			$	4,071
Short-term investments			2,464				2,970
Accounts receivable:
Trade, net			21,617				22,077
Other receivables, net			1,679				1,470
Inventory, net			101,932				114,252
Prepaid expenses and other current assets			3,832				7,200
Total current assets			183,187				152,040
Property, plant, equipment, and mineral properties, net			354,294				358,249
Water rights			19,184				19,184
Long-term parts inventory, net			30,899				30,231
Long-term investments			5,090				6,627
Other assets, net			9,000				8,016
Non-current deferred tax asset, net			195,337				194,223
Total Assets		$	796,991			$	768,570
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable		$	7,173			$	12,848
Accrued liabilities			11,310				14,061
Accrued employee compensation and benefits			6,856				7,254
Other current liabilities			8,100				12,401
Total current liabilities			33,439				46,564
Advances on credit facility			—				4,000
Asset retirement obligation, net of current portion			31,321				30,077
Operating lease liabilities			345				741
Finance lease liabilities			1,428				1,451
Deferred other income, long-term			46,617				—
Other non-current liabilities			1,593				1,309
Total Liabilities			114,743				84,142
Commitments and Contingencies
Common stock, $0.001 par value; 40,000,000 shares authorized;
12,908,078 and 12,807,316 shares outstanding
at June 30, 2024, and December 31, 2023, respectively			14				13
Additional paid-in capital			667,419				665,637
Retained earnings			36,827				40,790
Less treasury stock, at cost			(22,012	)			(22,012	)
Total Stockholders' Equity			682,248				684,428
Total Liabilities and Stockholders' Equity		$	796,991			$	768,570

INTREPID POTASH, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2024 AND 2023 (In thousands)
		Three Months Ended June 30,								Six Months Ended June 30,
			2024				2023				2024				2023
Cash Flows from Operating Activities:
Net (loss) income		$	(833	)		$	4,305			$	(3,963	)		$	8,811
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation, depletion and amortization			8,594				8,892				17,898				18,183
Accretion of asset retirement obligation			622				535				1,244				1,070
Amortization of deferred financing costs			76				75				151				151
Amortization of intangible assets			84				80				164				161
Stock-based compensation			1,235				1,803				2,557				3,549
Lower of cost or net realizable value inventory adjustments			1,352				—				1,855				—
Impairment of long-lived assets			831				—				2,208				—
Loss (gain) on disposal of assets			241				(7	)			492				193
Allowance for parts inventory obsolescence			419				—				472				—
Equity in loss (earnings) of unconsolidated entities			116				1,059				(33	)			238
Distribution of earnings from unconsolidated entities			—				132				—				452
Changes in operating assets and liabilities:
Trade accounts receivable, net			20,208				15,391				459				2,917
Other receivables, net			(497	)			(867	)			(250	)			(959	)
Inventory, net			(1,509	)			3,117				9,326				10,763
Prepaid expenses and other current assets			1,353				656				2,275				906
Deferred tax assets, net			(325	)			2,016				(1,114	)			3,676
Accounts payable, accrued liabilities, and accrued employee compensation and benefits			(3,271	)			(2,827	)			(6,892	)			(8,132	)
Operating lease liabilities			(356	)			(408	)			(740	)			(809	)
Deferred other income			(562	)			—				43,872				—
Other liabilities			(32	)			(3,455	)			(703	)			(2,222	)
Net cash provided by operating activities			27,746				30,497				69,278				38,948
Cash Flows from Investing Activities:
Additions to property, plant, equipment, mineral properties and other assets			(11,301	)			(20,895	)			(22,974	)			(41,934	)
Purchase of investments			—				(459	)			—				(1,415	)
Proceeds from sale of assets			55				24				4,651				89
Proceeds from redemptions/maturities of investments			1,000				2,500				1,500				4,000
Other investing, net			416				508				416				508
Net cash used in investing activities			(9,830	)			(18,322	)			(16,407	)			(38,752	)
Cash Flows from Financing Activities:
Payments of financing lease			(176	)			(167	)			(500	)			(210	)
Proceeds from short-term borrowings on credit facility			—				—				—				5,000
Repayments of short-term borrowings on credit facility			—				(5,000	)			(4,000	)			(5,000	)
Employee tax withholding paid for restricted stock upon vesting			(142	)			(298	)			(775	)			(1,337	)
Net cash used in financing activities			(318	)			(5,465	)			(5,275	)			(1,547	)
Net Change in Cash, Cash Equivalents and Restricted Cash			17,598				6,710				47,596				(1,351	)
Cash, Cash Equivalents and Restricted Cash, beginning of period			34,649				11,023				4,651				19,084
Cash, Cash Equivalents and Restricted Cash, end of period		$	52,247			$	17,733			$	52,247			$	17,733

INTREPID POTASH, INC.
UNAUDITED NON-GAAP RECONCILIATIONS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2024 AND 2023
(In thousands)

To supplement Intrepid's consolidated financial statements, which are prepared and presented in accordance with GAAP, Intrepid uses several non-GAAP financial measures to monitor and evaluate its performance. These non-GAAP financial measures include adjusted net (loss) income, adjusted net (loss) income per diluted share, adjusted EBITDA, and average net realized sales price per ton. These non-GAAP financial measures should not be considered in isolation, or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. In addition, because the presentation of these non-GAAP financial measures varies among companies, these non-GAAP financial measures may not be comparable to similarly titled measures used by other companies.

Intrepid believes these non-GAAP financial measures provide useful information to investors for analysis of its business. Intrepid uses these non-GAAP financial measures as one of its tools in comparing period-over-period performance on a consistent basis and when planning, forecasting, and analyzing future periods. Intrepid believes these non-GAAP financial measures are used by professional research analysts and others in the valuation, comparison, and investment recommendations of companies in the potash mining industry. Many investors use the published research reports of these professional research analysts and others in making investment decisions.

Adjusted Net (Loss) Income and Adjusted Net (Loss) Income Per Diluted Share

Adjusted net (loss) income and adjusted net (loss) income per diluted share are calculated as net (loss) income or net (loss) income per diluted share adjusted for certain items that impact the comparability of results from period to period, as set forth in the reconciliation below. Intrepid considers these non-GAAP financial measures to be useful because they allow for period-to-period comparisons of its operating results excluding items that Intrepid believes are not indicative of its fundamental ongoing operations.

Reconciliation of Net (Loss) Income to Adjusted Net (Loss) Income:

	Three Months Ended June 30,								Six Months Ended June 30,
		2024				2023				2024				2023
	(in thousands)
Net (Loss) Income	$	(833	)		$	4,305			$	(3,963	)		$	8,811
Adjustments
Impairment of long-lived assets		831				—				2,208				—
Loss (gain) on sale of assets		241				(7	)			492				193
Calculated income tax effect(1)		(279	)			2				(702	)			(50	)
Total adjustments		793				(5	)			1,998				143
Adjusted Net (Loss) Income	$	(40	)		$	4,300			$	(1,965	)		$	8,954

Reconciliation of Net (Loss) Income per Share to Adjusted Net (Loss) Income per Share:

	Three Months Ended June 30,							Six Months Ended June 30,
		2024			2023				2024			2023
Net (Loss) Income Per Diluted Share	$	(0.06	)		$	0.33		$	(0.31	)		$	0.68
Adjustments
Impairment of long-lived assets		0.06				—			0.17				—
Loss on sale of assets		0.02				—			0.04				0.02
Calculated income tax effect(1)		(0.02	)			—			(0.05	)			—
Total adjustments		0.06				—			0.16				0.02
Adjusted Net (Loss) Income Per Diluted Share	$	—			$	0.33		$	(0.15	)		$	0.70

⁽¹⁾ Assumes an annual effective tax rate of 26% for 2024 and 2023.

Adjusted EBITDA

Adjusted earnings before interest, taxes, depreciation, and amortization (or adjusted EBITDA) is calculated as net (loss) income adjusted for certain items that impact the comparability of results from period to period, as set forth in the reconciliation below. Intrepid considers adjusted EBITDA to be useful, and believe it to be useful for investors, because the measure reflects Intrepid's operating performance before the effects of certain non-cash items and other items that Intrepid believes are not indicative of its core operations. Intrepid uses adjusted EBITDA to assess operating performance.

Reconciliation of Net (Loss) Income to Adjusted EBITDA:

		Three Months Ended June 30,								Six Months Ended June 30,
			2024				2023				2024				2023
		(in thousands)
Net (Loss) Income		$	(833	)		$	4,305			$	(3,963	)		$	8,811
Impairment of long-lived assets			831				—				2,208				—
Loss (gain) on sale of assets			241				(7	)			492				193
Interest expense			—				—				—				—
Income tax (benefit) expense			(304	)			2,023				(1,079	)			3,810
Depreciation, depletion, and amortization			8,594				8,892				17,898				18,183
Amortization of intangible assets			84				80				164				161
Accretion of asset retirement obligation			622				535				1,244				1,070
Total adjustments			10,068				11,523				20,927				23,417
Adjusted EBITDA		$	9,235			$	15,828			$	16,964			$	32,228

Average Potash and Trio^® Net Realized Sales Price per Ton

Average net realized sales price per ton for potash is calculated as potash segment sales less potash segment byproduct sales and potash freight costs and then dividing that difference by the number of tons of potash sold in the period. Likewise, average net realized sales price per ton for Trio^® is calculated as Trio^® segment sales less Trio^® segment byproduct sales and Trio^® freight costs and then dividing that difference by Trio^® tons sold. Intrepid considers average net realized sales price per ton to be useful, and believe it to be useful for investors, because it shows Intrepid's potash and Trio^® average per ton pricing without the effect of certain transportation and delivery costs. When Intrepid arranges transportation and delivery for a customer, it includes in revenue and in freight costs the costs associated with transportation and delivery. However, some of Intrepid's customers arrange for and pay their own transportation and delivery costs, in which case these costs are not included in Intrepid's revenue and freight costs. Intrepid uses average net realized sales price per ton as a key performance indicator to analyze potash and Trio^® sales and price trends.

Reconciliation of Sales to Average Net Realized Sales Price per Ton:

		Three Months Ended June 30,
		2024						2023
(in thousands, except per ton amounts)		Potash			Trio®			Potash			Trio®
Total Segment Sales		$	30,034		$	26,522		$	47,264		$	28,748
Less: Segment byproduct sales			5,896			109			6,158			1,520
Freight costs			1,871			6,660			3,272			6,266
Subtotal		$	22,267		$	19,753		$	37,834		$	20,962
Divided by:
Tons sold			55			63			79			63
Average net realized sales price per ton		$	405		$	314		$	479		$	333
		Six Months Ended June 30,
		2024						2023
(in thousands, except per ton amounts)		Potash			Trio®			Potash			Trio®
Total Segment Sales		$	67,610		$	63,010		$	99,761		$	59,022
Less: Segment byproduct sales			11,060			313			11,500			2,740
Freight costs			5,017			15,634			7,264			12,952
Subtotal		$	51,533		$	47,063		$	80,997		$	43,330
Divided by:
Tons sold			129			154			167			128
Average net realized sales price per ton		$	399		$	306		$	485		$	339

		Three Months Ended June 30, 2024
Product		Potash Segment			Trio® Segment			Oilfield Solutions Segment			Intersegment Eliminations				Total
Potash		$	24,138		$	—		$	—		$	(40	)		$	24,098
Trio®			—			26,413			—			—				26,413
Water			—			—			2,572			—				2,572
Salt			3,335			109			—			—				3,444
Magnesium Chloride			932			—			—			—				932
Brine Water			1,584			—			1,166			—				2,750
Other			45			—			1,801			—				1,846
Total Revenue		$	30,034		$	26,522		$	5,539		$	(40	)		$	62,055
		Six Months Ended June 30, 2024
Product		Potash Segment			Trio® Segment			Oilfield Solutions Segment			Intersegment Eliminations				Total
Potash		$	56,550		$	—		$	—		$	(140	)		$	56,410
Trio®			—			62,697			—			—				62,697
Water			—			—			4,741			—				4,741
Salt			6,479			313			—			—				6,792
Magnesium Chloride			1,351			—			—			—				1,351
Brine Water			3,167			—			2,293			—				5,460
Other			63			—			3,828			—				3,891
Total Revenue		$	67,610		$	63,010		$	10,862		$	(140	)		$	141,342

		Three Months Ended June 30, 2023
Product		Potash Segment			Trio® Segment			Oilfield Solutions Segment			Intersegment Eliminations				Total
Potash		$	41,106		$	—		$	—		$	(88	)		$	41,018
Trio®			—			27,228			—			—				27,228
Water			100			1,474			2,568			—				4,142
Salt			3,278			46			—			—				3,324
Magnesium Chloride			1,667			—			—			—				1,667
Brine Water			1,113			—			1,001			—				2,114
Other			—			—			1,542			—				1,542
Total Revenue		$	47,264		$	28,748		$	5,111		$	(88	)		$	81,035
		Six Months Ended June 30, 2023
Product		Potash Segment			Trio® Segment			Oilfield Solutions Segment			Intersegment Eliminations				Total
Potash		$	88,261		$	—		$	—		$	(189	)		$	88,072
Trio®			—			56,282			—			—				56,282
Water			180			2,522			4,187			—				6,889
Salt			6,321			218			—			—				6,539
Magnesium Chloride			2,804			—			—			—				2,804
Brine Water			2,195			—			1,823			—				4,018
Other			—			—			3,351			—				3,351
Total Revenue		$	99,761		$	59,022		$	9,361		$	(189	)		$	167,955

Three Months Ended June 30, 2024		Potash			Trio®			Oilfield Solutions			Other				Consolidated
Sales		$	30,034		$	26,522		$	5,539		$	(40	)		$	62,055
Less: Freight costs			2,803			6,660			—			(40	)			9,423
Warehousing and handling costs			1,343			1,243			—			—				2,586
Cost of goods sold			21,224			16,437			3,409			—				41,070
Lower of cost or net realizable value inventory adjustments			1,352			—			—			—				1,352
Gross Margin		$	3,312		$	2,182		$	2,130		$	—			$	7,624
Depreciation, depletion, and amortization incurred1		$	6,178		$	851		$	1,195		$	454			$	8,678
Six Months Ended June 30, 2024		Potash			Trio®			Oilfield Solution			Other				Consolidated
Sales		$	67,610		$	63,010		$	10,862		$	(140	)		$	141,342
Less: Freight costs			6,759			15,634			—			(140	)			22,253
Warehousing and handling costs			3,070			2,605			—			—				5,675
Cost of goods sold			47,040			43,728			6,733			—				97,501
Lower of cost or net realizable value inventory adjustments			1,855			—			—			—				1,855
Gross Margin		$	8,886		$	1,043		$	4,129		$	—			$	14,058
Depreciation, depletion, and amortization incurred1		$	13,149		$	1,735		$	2,266		$	912			$	18,062
Three Months Ended June 30, 2023		Potash			Trio®			Oilfield Solution			Other				Consolidated
Sales		$	47,264		$	28,748		$	5,111		$	(88	)		$	81,035
Less: Freight costs			4,338			6,266			—			(88	)			10,516
Warehousing and handling costs			1,609			1,192			—			—				2,801
Cost of goods sold			28,441			20,068			3,827			—				52,336
Gross Margin		$	12,876		$	1,222		$	1,284		$	—			$	15,382
Depreciation, depletion, and amortization incurred1		$	6,429		$	1,405		$	915		$	223			$	8,972
Six Months Ended June 30, 2023		Potash			Trio®			Oilfield Solution			Other				Consolidated
Sales		$	99,761		$	59,022		$	9,361		$	(189	)		$	167,955
Less: Freight costs			9,343			12,952			—			(189	)			22,106
Warehousing and handling costs			3,089			2,445			—			—				5,534
Cost of goods sold			60,025			40,951			7,605			—				108,581
Gross Margin		$	27,304		$	2,674		$	1,756		$	—			$	31,734
Depreciation, depletion and amortization incurred1		$	13,482		$	2,611		$	1,822		$	429			$	18,344

(1) Depreciation, depletion, and amortization incurred for potash and Trio^® excludes depreciation, depletion, and amortization amounts absorbed in or relieved from inventory.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240805586709/en/

Evan Mapes, CFA, Investor Relations Manager

Phone: 303-996-3042

Email: evan.mapes@intrepidpotash.com

Source: Intrepid Potash, Inc.

FAQ

What were Intrepid Potash's (IPI) Q2 2024 financial results?

Intrepid Potash reported total sales of $62.1 million, a net loss of $0.8 million ($0.06 per diluted share), and adjusted EBITDA of $9.2 million for Q2 2024.

How did Intrepid Potash's (IPI) Q2 2024 results compare to Q2 2023?

Compared to Q2 2023, total sales decreased from $81.0 million, net income fell from $4.3 million, and adjusted EBITDA declined from $15.8 million.

What were Intrepid Potash's (IPI) potash sales volumes and prices in Q2 2024?

Intrepid Potash sold 55,000 tons of potash at an average net realized price of $405 per ton in Q2 2024.

What is Intrepid Potash's (IPI) capital expenditure forecast for 2024?

Intrepid Potash expects full-year 2024 capital expenditures to be between $40 million and $50 million.

How much did Intrepid Potash's (IPI) Trio® segment contribute to gross margin in Q2 2024?

Intrepid Potash's Trio® segment generated a gross margin of $2.2 million in Q2 2024, an increase of $1 million year-over-year.