Intrepid Potash (IPI) Q4 2025 Earnings Transcript

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DATE

Thursday, March 5, 2026 at 12 p.m. ET

CALL PARTICIPANTS

• Chief Executive Officer — Kevin Crutchfield
• Chief Financial Officer — Matt Preston
• Vice President, Sales and Marketing — Zachry Adams

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TAKEAWAYS

• Adjusted Net Income -- $6.5 million for the fourth quarter, a significant increase from the prior year.
• Adjusted EBITDA -- $18.1 million for the quarter and $63 million for the year, up nearly 80% year over year, representing one of the highest figures since 2016.
• Sales Volumes -- Combined potash and Trio sales volumes totaled over 590,000 tons in 2025, marking a 20% increase year over year.
• Trio Sales Records -- Trio sales reached 303,000 tons, a new company record for the product.
• Cost Improvements -- Potash cost of goods sold (COGS) per ton improved by approximately 5%, while Trio COGS per ton improved by over 10% relative to last year.
• Trio Pricing -- Fourth quarter average realized Trio price was $379 per ton, 20% higher than the prior year quarter.
• Potash Market Conditions -- Global potash shipments estimated at 75 million tons with projected growth of approximately 1.5 million tons in 2026.
• Safety Record -- Only one recordable incident in 2025, across more than 1.1 million hours worked.
• Amex Cavern Deferred -- Decision on mining the Amex cavern postponed to at least 2027, pending further evaluation.
• Trio Production Guidance -- 2026 Trio production expectations set at 285,000 to 300,000 tons, indicating a 7% midpoint increase year over year.
• Potash Production Guidance -- Annual potash production projected at 270,000 to 285,000 tons for 2026, with expectations for flat to slightly down results due to below-average HB evaporation.
• Lithium Project Update -- Joint development agreement with Aquatech and Adionics; measured and indicated resource at Wendover estimated at approximately 119,000 tons lithium carbonate equivalent, supporting a 25-year project life at 5,000 tons-per-year projected capacity.
• South Ranch Divestiture -- Company is under exclusivity with a potential buyer and holds an $8 million deposit toward this asset transaction.
• First Quarter 2026 Guidance -- Potash sales volumes guided to 95,000–105,000 tons at $345–$355/ton; Trio sales volumes guided to 105,000–115,000 tons at $380–$390/ton.
• 2026 Capital Expenditures -- Expected capital program of $40 million to $50 million, primarily for sustaining capital and new infrastructure at Wendover.

SUMMARY

The company disclosed 2025 as one of its most profitable operational years, emphasizing new volume records for both core and specialty fertilizers and substantial improvements in cost structure. Management confirmed ongoing discussions for the South Ranch sale, evidenced by an $8 million deposit and exclusivity agreement, with expectations to update the market upon closure. The call outlined further expansion into lithium extraction, including publicly stated resource estimates and progression toward a definitive feasibility study. Strategic capital discipline was underscored by the deferral of the Amex cavern decision and a focus on core asset reliability. The company provided detailed segment guidance for 2026, indicating a deliberate approach to balancing growth, maintenance, and portfolio evolution.

• Management stated, We are almost fully committed for first quarter right now on potash, and we have not seen any significant demand destruction at this time.
• Average net realized sales price for potash in the fourth quarter was $387 per ton, with full-year segment gross margin of $18.2 million despite a $25 per ton pricing decline, offset by higher volumes.
• Trio segment generated gross margin of $10.5 million for the quarter and $33.4 million for the year, the second-best annual result aside from 2022’s elevated pricing.
• Company placed a new continuous miner into Trio operations, aimed at supporting further production gains and reductions in cost per ton.
• Matt Preston reported, Production improvements in our Trio segment, going from 216,000 tons in 2023 to nearly 300,000 tons in 2026, are sustainable, and we see further upside as we continue to focus on improved mining and recovery rates.
• Operator confirmed the call’s conclusion with no new substantive content beyond previously disclosed information.

INDUSTRY GLOSSARY

• Trio: Proprietary specialty fertilizer comprised of potassium, sulfate, and magnesium blended in a single granule.
• COGS: Cost of goods sold, referring specifically to per ton direct costs of manufactured fertilizer or related segment outputs in this context.
• DLE (Direct Lithium Extraction): Technology to extract lithium efficiently from brine solutions, referenced as part of the Wendover lithium project.
• HB: Intrepid Potash’s solar solution potash facility located near Carlsbad, New Mexico, cited in operational updates regarding production and evaporation.

Full Conference Call Transcript

Kevin Crutchfield: Thanks, Evan, and good morning, everyone. We appreciate your interest and attendance for today's earnings call. Intrepid again delivered strong results in the fourth quarter, with adjusted net income and adjusted EBITDA of $6.5 million and $18.1 million, respectively, both of which were significant improvements compared to last year. For 2025 as a whole, our adjusted EBITDA of $63 million is one of the best prints since 2016, and represents an almost 80% improvement compared to 2024. We are very proud of these results, which we also accomplished with best-in-class safety performance with just one recordable incident in 2025 across over 1.1 million hours worked.

I would like to thank and congratulate our site and all of our team members for their hard work and dedication, and want to encourage them to continue to stay focused and continue to deliver good results in 2026. Our solid 2025 performance was driven by several factors. First, steady demand for our core fertilizer products drove strong sales volumes. In 2025, our combined potash and Trio sales volumes of just over 590,000 tons were 20% higher compared to 2024, with 303,000 tons of Trio sales being a company record.

Second, we again delivered solid unit economics from higher overall production, with our 2025 potash COGS per ton improving by approximately 5% versus last year, and our Trio COGS per ton improving by over 10%. And third, we benefited from increasing pricing. This was most pronounced in Trio, where fourth quarter average realized price of $379 per ton was 20% higher than 2025. The solid sales volumes and pricing have continued into 2026 ahead of the spring application season, and agricultural markets have also shown signs of optimism. For corn, year-to-date domestic exports are up almost 50% versus last year.

And for soybeans, recent trade deals have improved the outlook with futures for both crops up by about 15% since the August lows. Moreover, the $12 billion in government bridge payments to farmers are expected in the coming weeks, which should help further support solid fertilizer demand this spring. For the broader potash market, global supply and demand remain mostly balanced, where demand in key international markets has been resilient. In 2025, global potash shipments were estimated at roughly 75 million tons and 2026 is expected to see additional growth of about 1.5 million tons.

Moreover, by the end of the decade, third parties are forecasting global potash demand to be about 6 million tons higher than it was in 2025, which should help absorb additional supply coming from some of the larger-scale potash projects like Jansen. Before passing the call to Matt, I will end my remarks with a couple key project and operational updates. In potash, we have deferred a decision on our Amex cavern into at least 2027 as we continue to evaluate the project.

Since we have never mined this cavern, which still requires additional investment, we want to be very sure we completely understand the mineralogy and the geology and feel it is most prudent to continue to demonstrate strong capital discipline until this evaluation is complete. In addition, we feel confident we can sustain our HB production over the next several years even without Amex. For Trio, our operational performance continues to be very strong, and we recently placed another new continuous miner into service, which should further improve our mining rates and continue our trend of year-over-year production increases.

For 2026, we expect our Trio production to be in the range of 285,000 to 300,000 tons, which represents a year-over-year increase of about 7% at the midpoint. This will help offset what should be flat to slightly down potash production in 2026, which is primarily due to the below-average evaporation at HB over the summer. Moving on to our lithium project in Wendover. We have published quite a bit of detail in recent press releases, but I will provide a quick summary. For those new to the story, one of our key byproducts after producing potash at Wendover is magnesium chloride brine. This brine also contains lithium, but requires a highly technical direct lithium extraction process.

We have looked at various DLE options over the past several years, and just recently, new technologies have made significant strides which should now make the project viable at scale. As for project updates, in January, we announced that we have a joint development agreement in place with Aquatech and Adionics whereby our partners have already produced a sample of battery-grade lithium carbonate from our brine. As we noted in yesterday's press release, we will be providing an updated technical report summary for Wendover along with our 2025 10-K, which will include maiden resource estimates for lithium and will show a measured and indicated resource of approximately 119,000 tons of lithium carbonate equivalent.

At the current estimated production capacity of 5,000 tons per year, this would support a project life of roughly 25 years. There is still plenty of work to be done, but we have high confidence in our partners and we are optimistic we can move quickly, with a goal for a definitive feasibility study later this year. Lastly, we are now under exclusivity with a potential buyer for the South Ranch. Negotiations are ongoing and subject to confidentiality provisions, but we are holding an $8 million deposit from the potential buyer, which demonstrates their very serious intent.

Although we are still negotiating definitive agreements, we believe the potential deal will likely close sometime in 2026 and we will update the market as appropriate. Overall, it is an exciting time for Intrepid. We are delivering strong results and remain constructive on the outlook. With very strong support for critical minerals in the United States, there has probably been no better time to be a domestic producer of potash and Trio, while lithium provides significant potential upside. In addition, we want to highlight that our core products have long-term staying power, which is further enhanced by our multi-decade reserve lives, and we look forward to capitalizing on our unique positioning in 2026 and beyond.

So with that, I will now turn the call over to Matt. Please go ahead.

Matt Preston: Thank you, Kevin. To echo Kevin's remarks, 2025 was a great year for Intrepid, where our total fertilizer sales volumes of 592,000 tons were almost 100,000 tons higher than 2024 and reached a level not seen since 2018. Our number one focus is driving higher production to increase our revenues and improve our unit economics, and it is very encouraging to see our hard work pay off with strong results.

For segment highlights, in potash, our fourth quarter gross margin of $4.6 million was in line with the prior year as a higher average net realized sales price of $387 per ton was offset by a slight decrease in sales volumes due to a compressed fall application season and limited engagement on spring potash needs in the latter part of the quarter. Full-year 2025 segment gross margin of $18.2 million was modestly higher compared to last year as the higher production that started in 2024 allowed us to sell 289,000 tons, a 20% increase from 2024, which offset a pricing decline of about $25 per ton.

As we noted on our third quarter earnings call, our fourth quarter potash production was impacted by a delayed start-up at HB, which resulted in our full-year 2025 production coming in at 280,000 tons. For 2026, we expect our annual potash production to be in the range of 270,000 to 285,000 tons, and we do expect a slight degradation in our unit economics this year. That said, looking beyond 2026, we expect a recovery in our HB production and more tons out of our Wendover facility, and project our 2027 potash production will be in the range of 300,000 to 310,000 tons, which puts us back on track for our key potash production goal. Moving on to Trio.

The very strong performance continued as our fourth quarter and 2025 production, sales volumes, and pricing were all higher compared to the respective prior-year periods due to strong operational execution, modest market share gains, and supportive sulfate values. This led to $10.5 million in gross margin in the fourth quarter, and $33.4 million in gross margin for 2025. Outside of the significantly elevated pricing in 2022, this is the best Trio performance in our history. In 2026, as Kevin mentioned, we expect to produce 285,000 to 300,000 tons of Trio and anticipate our cost of goods sold per ton to show modest improvements from 2025 as consistent production increases continue to improve our overall unit economics.

Our forecasted Trio production, coupled with continued strong pricing due to both the expected solid nutrient demand for spring application and supportive Trio component valuations, should continue to result in strong Trio segment performance in 2026. Turning to first quarter guidance. In potash, we expect our sales volumes to be between 95,000 to 105,000 tons at an average net realized sales price in the range of $345 to $355 per ton. For Trio, we expect our sales volumes to be between 105,000 to 115,000 tons at an average net realized sales price in the range of $380 to $390 per ton.

For our 2026 capital program, we expect our capital investment will be in the range of $40 million to $50 million with most of our spend related to sustaining capital, specifically at our East Mine, and for the beginning of a new primary pond at Wendover. We expect this will begin contributing to Wendover's production in 2028. In summary, 2025 was a great year for Intrepid, and we look forward to carrying this momentum into 2026. Overall fertilizer production and sales volumes look to be on par or slightly ahead of 2025, and pricing continues to be supportive.

Production improvements in our Trio segment, going from 216,000 tons in 2023 to nearly 300,000 tons in 2026, are sustainable, and we see further upside as we continue to focus on improved mining and recovery rates. We will work through the recent weather and evaporation setbacks in potash during the 2026 spring season, and remain confident in eclipsing 300,000 tons of potash production in upcoming production years. Operator, we are now ready for the Q&A portion of our call.

Operator: We will now begin the question and answer session. To join the question queue, you may press star, then 1 on your telephone keypad. You will hear a tone acknowledging your request. If you are using a speakerphone, please pick up your handset before pressing any key. To withdraw your question, please press star, then 1. We will pause for a moment as callers join the queue. The first question comes from Lucas Beaumont with UBS.

Nicole Greenberg: Hi. This is Nicole Greenberg on for Lucas. Firstly, I was just wondering if you can walk us through current potash demand dynamics, how your order book is looking for 1Q. Have you seen any evidence of demand disruption due to affordability issues?

Zachry Adams: Yes. Thank you for the question. This is Zachry. We are almost fully committed for first quarter right now on potash, and we have not seen any significant demand destruction at this time. Potash remains a very good value for the grower at the current price point, and we expect stable demand for the spring season amid strong acres of corn expected to be planted.

Nicole Greenberg: Great. Thanks.

Nicole Greenberg: And then just on the lithium project, can you walk through the unit economics there? What cash cost of production would you expect on a per-ton basis?

Kevin Crutchfield: We are not prepared to address that at this stage. We will continue to provide updates to the marketplace as the engineering work progresses, and we will start laying those metrics out in the future.

Nicole Greenberg: Got it. Yep. And then last one for me. So oil and fuel sales were down meaningfully in 2025. What is your outlook there going forward compared to this year? Are you expecting growth or further declines from here?

Kevin Crutchfield: Given the nature of the asset and lots of inbounds and interest in the oilfield services business, we felt like testing the market for valuation of our asset was appropriate, which we did, which is why we entered a letter of intent with the prospective buyer. So I think any comment that I would have beyond that would be speculation and almost irrelevant, given that it is our intent to transact on this asset.

Nicole Greenberg: Great. Thank you.

Operator: Once again, if you have a question, please press star, then 1. Your next question comes from Vincent Andrews with Morgan Stanley.

Justin Pellegrino: Good morning, everybody. This is Justin Pellegrino on for Vincent. Congratulations on the results. My first question is kind of around sulfur prices. Given the conflicts in the Middle East, we have seen a significant increase in sulfur prices there. And I know it is fairly recent, but could you just discuss any sort of increased interest you have had in Trio over the last few days? Any type of real-time update that you have seen there would be very helpful. And then likewise, can you just discuss expectations for prices relative to the potash products, how that will trend throughout the year? Thank you.

Zachry Adams: Justin, on the sulfur component and what that has led to on Trio interest, we are right in the heat of our main Trio application season, so we are seeing a really good response. I would say, from the demand perspective for the rest of first quarter out into second quarter at this point, we have not seen those prices roll through on sulfate values just yet, but that is something we are watching closely as we move into the spring.

And then as far as potash pricing throughout the rest of the year, I am not prepared to project what the second half looks like, but I think globally we are in a very balanced potash market, and particularly here in the U.S. The U.S. potash prices are trading at a discount to almost all global benchmarks, so we think that supports stable pricing here in the U.S. and certainly some room for upside to get in line with where other global markets are currently trading.

Justin Pellegrino: Great. And then just one more from me. If the South Ranch deal does go through, can you give us an update on any capital allocation priorities? Any idea what you would do with the proceeds? Any thoughts there would be helpful. Thank you.

Kevin Crutchfield: Sure. Thank you. Assuming the sale goes through, I think my answer would be the same whether the sale goes through or not that I have referenced on pretty much every call since I took the mantle of the CEO here 15 months ago. Our first priority is an intense focus on our core operations. We are restoring those back to a predictable, resilient state, making sure that they are generating consistent free cash flow and that we can appropriately capitalize them to continue that predictability and reliability into the future and perhaps even grow production volumes modestly over the coming years.

From there, we obviously need to maintain sufficient liquidity to allocate capital internally to our operations and address any sustaining and growth capital requirements, and internally also to withstand any sort of body blow or shock that we take to the system on the pricing front. Then once we have satisfied those criteria, I think it is a very appropriate discussion for the board to begin to think about the capital allocations beyond that just entail the internal needs. So to the extent that the sale does go through, you can rest assured that discussion is top of mind and top of the agenda with the board.

I do not want to front-run our board any further than those comments, but that is our point of view on that.

Justin Pellegrino: Great. Thank you for all the commentary.

Operator: Thank you.

Operator: This concludes the question and answer session. I would like to turn the conference back over to Kevin Crutchfield for any closing remarks.

Kevin Crutchfield: Thanks to everybody again for attending today’s call, and I would like to again thank all of our employees across all of our sites for a really great year and especially thank them for just an outstanding safety performance, and we look forward to continuing to keep you updated in the coming quarters. Thanks for attending today.

Operator: This concludes today’s conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.

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