Intrepid Potash, Inc. Fourth Quarter 2025 Earnings Call - Trio Surge and Maiden Lithium Resource Put Growth Back on the Table

Conference Operator, Conference Operator: Thank you for standing by. This is the conference operator. Welcome to the Intrepid Potash, Inc. fourth quarter 2025 results conference call. As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star then one on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star and zero. I would now like to turn the conference over to Evan Mapes, Investor Relations. Please go ahead.

Evan Mapes, Investor Relations, Intrepid Potash, Inc.: Good morning, everyone. Thank you for joining us to discuss and review Intrepid’s fourth quarter 2025 results. With me today is Intrepid’s CEO, Kevin Crutchfield, and CFO, Matt Preston. During the Q&A session, our VP of Sales and Marketing, Zachry Adams, and VP of Operations, Rick Cain, will also be available. Please be advised that comments we will make today include forward-looking statements as defined by U.S. securities laws. These are based on information available to us today and are subject to risks and uncertainties, which are described in the reports we file with the SEC. These could cause our actual results to be different from those currently anticipated, and we assume no obligation to update them. During today’s call, we’ll also refer to certain non-GAAP financial and operational measures.

Reconciliations to the most directly comparable GAAP measures are included in yesterday’s press release and along with our SEC filings are available at intrepidpotash.com. I’ll now turn the call over to our CEO Kevin Crutchfield.

Kevin Crutchfield, Chief Executive Officer, Intrepid Potash, Inc.: Thanks, Evan. 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’re 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’d like to thank and congratulate our site leaders and all of our team members for their hard work and dedication and wanna 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 was 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%. Thirdly, 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 the first quarter of 2025. The solid sales volumes and pricing have continued into 2026 ahead of the spring application season. Agricultural markets have also shown signs of optimism. For corn, year-to-date domestic exports are up almost 50% versus last year. For soybeans, recent trade deals have improved the outlook with futures for both crops up by about 15% since the August lows. 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 remains 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’ll end my remarks with a couple key project and operational updates. In potash, we’ve deferred a decision on our AMAX Cavern into at least 2027 as we continue to evaluate the project.

Since we’ve never mined this cavern, which still requires additional investment, we wanna be very sure we completely understand the mineralogy and the geology and feel it’s 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 AMAX. 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 285,000-300,000 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’ve published quite a bit of detail in recent press releases, but I’ll 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’ve looked at various DLE options over the past several years. 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’ll 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’s still plenty of work to be done, but we have high confidence in our partners and we’re optimistic we can move quickly with a goal for a definitive feasibility study later this year.

Lastly, we’re now under exclusivity with a potential buyer for the South Ranch. Negotiations are ongoing and subject to confidentiality provisions, but we’re holding a $8 million deposit from the potential buyer, which demonstrates their very serious intent. Although we’re still negotiating definitive agreements, we believe the potential deal will likely close sometime in the first half of 2026, and we’ll update the market as appropriate. Overall, it’s an exciting time for Intrepid. We’re delivering strong results and remain constructive on the outlook. With very strong support for critical minerals in the United States, there’s probably been no better time to be a domestic producer of potash and Trio, while lithium provides significant potential upside.

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. With that, I’ll now turn the call over to Matt. Please go ahead.

Matt Preston, Chief Financial Officer, Intrepid Potash, Inc.: 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, increase our revenues, and improve our unit economics. It’s 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 startup 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 270,000-285,000 tons. We do expect a slight degradation in our unit economics this year.

Said, looking beyond 2026, we expect a recovery in our HB production and more tons out of our Wendover facility and project that our 2027 potash production will be in the range of 300,000-310,000 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 in 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 a $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.

For 2026, as Kevin mentioned, we expect to produce 285,000-300,000 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 95,000-105,000 tons at an average net realized sales price in the range of $345-$355 per ton.

For Trio, we expect our sales volumes to be between 105,000-115,000 tons at an average net realized sales price in the range of $380-$390 per ton. For our 2026 capital program, we expect our capital investment will be in the range of $40 million-$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, which we expect 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’re now ready for the Q&A portion of our call.

Conference Operator, Conference Operator: We will now begin the question-and-answer session. To join the question queue, you may press star then one 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 keys. To withdraw your question, please press star then one. We will pause for a moment as callers join the queue. The first question comes from Lucas Beaumont with UBS.

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

Matt Preston, Chief Financial Officer, Intrepid Potash, Inc.: Yes. Thank you for the question. This is Zachary. You know, we’re almost fully committed for first quarter right now in potash and we have not seen really any significant demand destruction at this time. Potash remains a very good value from 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, Analyst, UBS: Great. Thanks. 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, Chief Executive Officer, Intrepid Potash, Inc.: We’re not prepared to address that at this stage. We’ll continue to provide updates to the marketplace, as the engineering work progresses, we’ll start laying those metrics out in the future.

Nicole Greenberg, Analyst, UBS: Got it. Yep. Last one for me. Oil field sales were down pretty meaningfully in 2025. What’s your outlook there going forward compared to this year? Are you expecting growth or further declines from here?

Kevin Crutchfield, Chief Executive Officer, Intrepid Potash, Inc.: Well, I mean, given the nature of the asset and, you know, lots of inbounds and interest in oil field services business that we felt like testing the market for valuation of our asset was appropriate under the circumstances which we did, which is why we entered a letter of intent with the prospective buyer. I think any comment that I would have beyond that it would be speculation and almost irrelevant given that it’s our intent to transact on this asset.

Nicole Greenberg, Analyst, UBS: Great. Thank you.

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

Justin Pellegrino, Analyst, Morgan Stanley: Good morning, everybody. This is Justin Pellegrino on for Vincent. Congratulations on the results. My first question is kind of around sulfur prices. You know, given the conflict in the Middle East, we’ve seen a pretty significant increase in sulfur prices there. I know it’s fairly recent, but could you just discuss any sort of increased interest you’ve had in Trio over the last few days and any type of real-time update that you’ve seen there would be very helpful. Likewise, can you just discuss expectations for prices relative to the potash products, how that’ll trend throughout the year? Thank you.

Matt Preston, Chief Financial Officer, Intrepid Potash, Inc.: First, Justin, on the sulfur component and kind of what that’s led to on Trio interest, I mean, we’re right in the heat of our kinda main Trio application season, so we’re seeing really good response, I would say, just from the demand perspective for the rest of first quarter out into second quarter at this point. Haven’t seen those prices, I’d say roll through on sulfate values just yet, but I think to your point, that’s something we’re watching closely there as we move into the spring. Just as far as potash pricing throughout the rest of the year here, not prepared to kinda project what second half looks like, but I think globally, you know, we’re in a very balanced potash market.

Particularly here in the U.S., the U.S. potash prices are trading at a discount to almost all global benchmarks. We think that supports stable pricing here in the U.S. and certainly some room for upside to get in line with kind of where other global markets are currently trading at.

Justin Pellegrino, Analyst, Morgan Stanley: Great. Thank you. Just one more from me. You know, if the South Ranch deal does go through, can you just kinda give us an update on any capital allocation priorities? Do you have any idea what you would do with the proceeds? You know, any thoughts there would be helpful. Thank you.

Kevin Crutchfield, Chief Executive Officer, Intrepid Potash, Inc.: Yeah, sure. Thank you. Yeah, assuming the sale goes through, I mean, I think my answer would be the same whether the sale goes through or not that I’ve referenced on pretty much every call since I’ve took the mantle of the CEO here 15 months ago. Our first priority is an intense focus on our core operations. We’re sort of restoring those back to predictable, resilient state, making sure that they’re 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 sort of sustaining and growth capital requirements internally, but also to withstand any sort of body blow or shock that we take to the system on the pricing front. Once we’ve satisfied those criteria, I think it’s in a very appropriate discussion for the board to begin to think about capital allocations beyond that just entail the internal needs. To the extent that that sale does go through, that you can rest assured that that discussion is top of mind and top of the agenda with the board.

With that, I don’t wanna front run our board any further than those comments, but that’s our point of view on that.

Justin Pellegrino, Analyst, Morgan Stanley: Great. Thank you for all the commentary.

Kevin Crutchfield, Chief Executive Officer, Intrepid Potash, Inc.: Yep. Thank you.

Conference Operator, Conference 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, Chief Executive Officer, Intrepid Potash, Inc.: 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. We look forward to continuing to keep you updated in the coming quarters. Thanks for attending today.

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