GlobeNewswire Inc | Mar 1, 2021 04:30PM EST

March 01, 2021

DENVER, CO, March 01, 2021 (GLOBE NEWSWIRE) -- Intrepid Potash, Inc. (NYSE:IPI) ("Intrepid", the "Company", "we", "us", "our") today reports its financial results for the fourth quarter and full year of 2020.

Key Fourth Quarter Takeaways

-- $9.5 million improvement in the bottom line compared to the third quarter of 2020 with positive momentum continuing into 2021 across all segments. Net loss of $0.7 million, or $(0.05) per share in Q4 2020, compared to net loss of $10.2 million, or $(0.78) per share in Q3 2020. -- Adjusted EBITDA(1) of $9.7 million for the fourth quarter of 2020. -- Cash flow from operations of $12.7 million for the fourth quarter of 2020. -- Strong domestic sales volume for potash and Trio in Q4 2020 as favorable weather, rising commodity prices, and compelling farm economics drove early season fertilizer demand that is steadily continuing into 2021. -- Total company water sales were $5.8 million in fourth quarter of 2020, an increase of $2.2 million compared to the third quarter of 2020 as oilfield activity continues its upward trajectory.

Management Comment

"We are excited to move into 2021 and put the impacts of the COVID-19 pandemic gradually behind us as strong farmer economics will allow us to fully take advantage of higher potash and Trio prices, which are currently $140 per ton and $60 per ton above summer-fill price levels, respectively." said Bob Jornayvaz, Intrepid's Executive Chairman, President, and CEO. "The fourth quarter was highlighted by solid cash flow and a significant increase in EBITDA compared to the prior two quarters as fertilizer markets and oilfield activity both rebounded sharply from this past summer. Under-application of potash from recent seasons, favorable weather, and very strong commodity pricing will continue to support our fertilizer markets through the spring season."

Jornayvaz continued, "We are expanding upon the existing and significant ES&G solar evaporation footprint of our environmentally friendly potash operations to further increase our commitment to provide creative ES&G solutions and services to oilfield operators as they focus their resources in the prolific Delaware Basin. We saw a significant increase in water sales during the fourth quarter as frac activity improved from prior months. We managed well through the worst part of the downturn and expect continued improvement in oilfield activity in 2021. We are committed to growing our oil and gas midstream business in the Delaware Basin. Intrepid is responding to political, regulatory, and ES&G emphasis on water conservation and re-use by providing full-cycle water management solutions to the numerous well-capitalized operators in the area. We are in the early stages of construction on a produced water disposal system near our South ranch and we are investing in recycling infrastructure and capabilities in the coming months as full-cycle water management becomes a central focus of our oilfield segment. Our expansion into full-cycle water management, including the transition of fresh water sales to brine water sales for oilfield drilling and fracing, will be key in achieving the environmental and sustainability goals of both oilfield operators and the New Mexico legislature."

Consolidated Results

Intrepid recorded net loss of $0.7 million, or $(0.05) per diluted share in the fourth quarter of 2020, contributing to full year 2020 net loss of $27.2 million, or $(2.09) per diluted share. Consolidated gross margin of $5.8 million and $10.5 million in the fourth quarter and full year 2020, respectively, was a decrease compared to the same year-ago periods due to reduced fertilizer pricing, and the COVID-19 pandemic which led to a reduction in water and other oilfield sales.

Segment Highlights

Potash

Three Months Ended December Year Ended December 31, 31, 2020 2019 2020 2019 (in thousands, except per ton data)Sales $ 27,556 $ 25,556 $ 108,060 $ 124,648 Gross $ 3,847 $ 5,746 $ 11,551 $ 27,787 margin Potashproduction 106 110 308 328 volume (intons)Potashsales 78 58 317 319 volume (intons) Averagepotash netrealized $ 248 $ 278 $ 250 $ 284 salesprice perton^(1)

Gross margin decreased $1.9 million and $16.2 million in the fourth quarter and full year of 2020, respectively, compared to the same periods in 2019. Decreases in both periods were primarily driven by lower average net realized sales prices for potash sales and decreased byproducts sales. Byproduct sales decreased due to improved availability of salt in certain regions which reduced our sales footprint and due to COVID-19 which reduced sales of water and brine into oil and gas markets.

Fourth quarter and full year average net realized sales price per ton decreased year-over-year due to price decreases announced in the 2020 winter and summer-fill programs and fewer industrial sales. We announced three price increases during the fourth quarter of 2020 and another in February 2021, increasing our posted price by $140 per ton compared to summer fill price levels.

Fourth quarter production was similar to the prior year with all sites operating at full rates to meet strong early season fertilizer demand. We expect above average evaporation during the 2020 evaporation season will allow us to operate longer than normal during the spring of 2021. Full year production decreased 6% compared to 2019, due to reduced evaporation during the 2019 evaporation season which limited our production during the spring of 2020.

Trio

Three Months Ended December 31, Year Ended December 31, 2020 2019 2020 2019 (in thousands, except per ton data)Sales $ 15,565 $ 15,669 $ 70,287 $ 69,551 Gross(deficit) $ (375 ) $ 23 $ (8,505 ) $ 1,100 margin Trio^production 58 45 213 228 volume (intons)Trio^sales 50 53 230 225 volume (intons) AverageTrio^netrealized $ 188 $ 170 $ 195 $ 195 salesprice perton^(1)

Fourth quarter 2020 gross margin decreased $0.4 million compared to 2019, as strong early season demand in domestic markets was offset by increased per ton costs of goods sold. Fourth quarter 2019 results benefited from lower costs of goods sold primarily due to lower of cost or net realizable value adjustments recorded in prior quarters. Byproduct water sales increased $0.1 million compared to the fourth quarter of 2019 as oil and gas activity continued to improve in the Delaware Basin from mid-year lows. Full year 2020 gross margin decreased as reduced operating rates led to an increased per ton cost of goods sold and the summer-fill price decrease resulted in additional lower of cost of net realizable value adjustments.

Fourth quarter and full year sales were similar to the same periods in 2019, as strong domestic volumes offset a decrease in international shipments. Average net realized sales price per ton increased 11% in the fourth quarter when compared to 2019 due to reduced international shipments. Full year 2020 average net realized sales price equaled 2019 as reduced international shipments were offset by lower domestic Trio pricing in the first nine months of 2020.

Production volumes decreased 7% for the full year of 2020 when compared to 2019, primarily due to reduced operating rates in order to manage inventory levels.

Oilfield Solutions

Three Months Ended December Year Ended December 31, 31, 2020 2019 2020 2019 (in thousands)Sales $ 5,390 $ 8,323 $ 18,929 $ 27,894 Gross $ 2,342 $ 4,421 $ 7,484 $ 14,591 margin

Sales decreased 35% and 32% for the fourth quarter and full year of 2020, respectively, when compared to the same periods in 2019, as the COVID-19 pandemic reduced activity in oil and gas markets which reduced our sales of water, brine, and other oilfield services. Water sales were most impacted during the summer of 2020 and rebounded considerably in the fourth quarter. Fourth quarter water sales in the oilfield solutions segment were $4.0 million, a significant increase compared to third quarter 2020 sales of $2.0 million.

Fourth quarter and full year 2020 gross margin decreased compared to 2019 primarily due to the reduced sales discussed above. Full-year cost of goods sold decreased $0.9 million in 2020, compared to 2019, as reduced expense related to our high-speed mixing service was offset by increased water transfer expenses and increased depreciation expense related to the Intrepid South assets. We also sold less water from our lower cost water rights and from our other revenue sources, such as caliche and a produced water royalty, in 2020 compared to 2019. These sales generally have very low cost of goods sold, which is why the decrease in sales did not result in a comparable decrease in cost of goods sold.

Liquidity

Cash provided by operations was $12.7 million during the fourth quarter of 2020 and cash used for investing activities was $2.4 million during the fourth quarter of 2020. As of December 31, 2020, Intrepid had $19.5 million in cash and cash equivalents and $20.4 million available to borrow under its credit facility.

Notes

1 Average net realized sales price per ton and Adjusted EBITDA 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, March 2, 2021 at 12:00 p.m. Eastern time (10:00 a.m. Mountain time) to discuss the results. A Q&A session will immediately follow the discussion of the results for the period.

Live event participation detailsDomestic dial-in number: 800-319-4610International dial-in number: +1-631-891-4304 Webcast: https://intrepidpotashinc.gcs-web.com/events-and-presentations/upcoming-events

Replay information available for 30 days following the live eventConference ID #: 6236Replay dial-in (Toll Free US & Canada): 800-319-6413Replay dial-in (International): +1-631-883-6842

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 and cash flows, water sales, production costs, and its market outlook. 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 Intrepid's products and services; -- challenges to Intrepid's water rights; -- Intrepid's ability to successfully identify and implement any opportunities to grow its business whether through expanded sales of water, Trio, byproducts, and other non-potassium related products or other revenue diversification activities; -- Intrepid's ability to sell Trio internationally and manage risks associated with international sales, including pricing pressure and freight costs; -- the costs of, and Intrepid's 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; -- Intrepid's ability to prevail in outstanding legal proceedings against it; -- Intrepid's ability to comply with the terms of its senior notes and its revolving credit facility, including the underlying covenants, to avoid a default under those agreements; -- 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 Intrepid's 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 the prices of raw materials, including chemicals, natural gas, and power; -- Intrepid's 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; -- Intrepid's inability to fund necessary capital investments; -- the impact of the COVID-19 pandemic on Intrepid's business, operations, liquidity, financial condition, and results of operations; and -- the other risks, uncertainties, and assumptions described in Intrepid's periodic filings with the Securities and Exchange Commission, including in "Risk Factors" in Intrepid's Annual Report on Form 10-K for the year ended December 31, 2019, as updated by subsequent Quarterly Reports on Form 10-Q.

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 duty to update or revise publicly any forward-looking statements to conform the statements to actual results or to reflect new information or future events.

Contact:Matt Preston, Vice President of Finance Phone: 303-996-3048Email: matt.preston@intrepidpotash.com

INTREPID POTASH, INC.CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)FOR THE THREE AND TWELVE MONTHS ENDED DECEMBER 31, 2020 AND 2019(In thousands, except share and per share amounts)

Three Months Ended December 31, Year Ended December 31, 2020 2019 2020 2019Sales $ 48,442 $ 48,849 $ 196,954 $ 220,075 Less: Freight costs 8,736 9,581 37,135 40,056 Warehousingand handling 2,149 1,995 9,431 8,621 costsCost of goods 31,743 26,735 135,843 126,110 soldLower of costor netrealizable ? 348 4,015 1,810 valueinventoryadjustmentsGross Margin 5,814 10,190 10,530 43,478 Selling and 5,454 5,846 25,476 23,556 administrativeAccretion ofasset 435 446 1,738 1,793 retirementobligationLitigation ? ? 10,075 ? settlementLoss (gain) on 191 362 (4,250 ) 345 sale of assetsOtheroperating 241 633 735 1,424 expenseOperating (507 ) 2,903 (23,244 ) 16,360 (Loss) Income Other Income (Expense)Interest (412 ) (773 ) (4,289 ) (3,031 ) expense, netOther income 255 13 384 355 Income Before (664 ) 2,143 (27,149 ) 13,684 Income Taxes Income Tax (47 ) (61 ) (5 ) (53 ) ExpenseNet (Loss) $ (711 ) $ 2,082 $ (27,154 ) $ 13,631 Income WeightedAverage Shares Outstanding:Basic 13,030,185 12,939,230 12,993,225 12,904,916 Diluted 13,030,185 13,091,291 12,993,225 13,105,089 Income Per Share:Basic $ (0.05 ) $ 0.16 $ (2.09 ) $ 1.06 Diluted $ (0.05 ) $ 0.16 $ (2.09 ) $ 1.04

INTREPID POTASH, INC.CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)AS OF DECEMBER 31, 2020 AND 2019(In thousands, except share and per share amounts)

December 31, 2020 2019ASSETS Cash and cash equivalents $ 19,515 $ 20,603 Accounts receivable: Trade, net 22,516 23,749 Other receivables, net 1,856 1,247 Inventory, net 88,673 94,220 Other current assets 3,228 5,524 Total current assets 135,788 145,343 Property, plant, equipment, and mineral 355,497 378,509 properties, netWater rights 19,184 19,184 Long-term parts inventory, net 28,900 27,569 Other assets, net 10,819 7,834 Total Assets $ 550,188 $ 578,439 LIABILITIES AND STOCKHOLDERS' EQUITY Accounts payable $ 7,278 $ 9,992 Income taxes payable ? 50 Accrued liabilities 12,701 13,740 Accrued employee compensation and benefits 4,422 4,464 Other current liabilities 32,816 19,382 Advances on credit facility ? 19,817 Current portion of long-term debt 10,000 20,000 Total current liabilities 67,217 87,445 Advances on credit facility 29,817 ? Long-term debt, net 14,926 29,753 Asset retirement obligation 23,872 22,140 Operating lease liabilities 2,136 4,025 Other non-current liabilities 961 420 Total Liabilities 138,929 143,783 Commitments and Contingencies Common stock, $0.001 par value; 40,000,000 shares authorized:and 13,049,820 and 12,955,351 shares outstandingat December 31, 2020, and 2019, respectively 13 13 Additional paid-in capital 656,837 653,080 Accumulated deficit (245,591 ) (218,437 ) Total Stockholders' Equity 411,259 434,656 Total Liabilities and Stockholders' Equity $ 550,188 $ 578,439

INTREPID POTASH, INC.CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)FOR THE THREE AND TWELVE MONTHS ENDED DECEMBER 31, 2020 AND 2019(In thousands)

Three Months Ended December Year Ended December 31, 31, 2020 2019 2020 2019Cash Flows fromOperating Activities:Net (loss) (711 ) 2,082 (27,154 ) 13,631 incomeAdjustments toreconcile netincome to net cash providedby operatingactivities:Depreciation,depletion, and 9,411 8,976 35,788 34,121 amortizationAmortization ofintangible 81 26 322 214 assetsAccretion ofasset 435 446 1,738 1,793 retirementobligationAmortization ofdeferred 68 86 425 303 financing costsStock-based 840 1,044 3,821 4,281 compensationReserve for ? ? 492 ? obsolescenceAllowance fordoubtful (200 ) 25 75 75 accounts(Gain) loss ondisposal of 191 362 (4,250 ) 345 assetsLower of costor netrealizable ? 348 4,015 1,810 value inventoryadjustmentsOther ? (38 ) (116 ) (34 ) Changes inoperating assets andliabilities:Trade accounts 955 7,363 1,158 1,337 receivable, netOtherreceivables, 719 729 (609 ) (650 ) netInventory, net (3,391 ) (8,298 ) (291 ) (11,525 ) Other current 2,618 (232 ) 2,305 (1,019 ) assetsAccountspayable,accruedliabilities,and accrued (1,740 ) (3,541 ) 2,331 2,280 employee

compensationand benefitsIncome tax ? 49 (50 ) (865 ) payableOperating lease (539 ) (616 ) (2,234 ) (2,090 ) liabilitiesOther 3,921 2,953 13,379 5,374 liabilitiesNet cashprovided by 12,658 11,764 31,145 49,381 operatingactivities Cash Flows fromInvesting Activities:Additions toproperty,plant,equipment, (2,356 ) (3,888 ) (16,443 ) (63,836 ) mineralproperties andother assetsProceeds fromsale ofproperty,plant, ? ? 4,786 68 equipment, andmineralpropertiesAdditions tointangible ? ? ? (16,873 ) assetsLong-term ? ? (3,500 ) ? investmentNet cash usedin investing (2,356 ) (3,888 ) (15,157 ) (80,641 ) activities Cash Flows fromFinancing Activities:Payments of (74 ) ? (74 ) ? financing leaseRepayment of ? ? (35,000 ) ? long-term debtDebt prepayment ? ? (1,869 ) ? costsProceeds fromloan under ? ? 10,000 ? CARES ActProceeds fromborrowings on ? ? 10,000 30,317 credit facilityRepayments ofborrowings on ? ? ? (10,500 ) credit facilityCapitalized ? (46 ) (36 ) (503 ) debt costsEmployee taxwithholdingpaid for (76 ) (262 ) (172 ) (540 ) restrictedshares uponvestingProceeds fromexercise of 108 12 108 21 stock optionsNet cash (usedin) provided by (42 ) (296 ) (17,043 ) 18,795 financingactivities Net Change inCash, CashEquivalents, 10,260 7,580 (1,055 ) (12,465 ) and RestrictedCashCash, CashEquivalents,and Restricted 9,924 13,659 21,239 33,704 Cash, beginningof periodCash, CashEquivalents,and Restricted $ 20,184 $ 21,239 $ 20,184 $ 21,239 Cash, end ofperiod

INTREPID POTASH, INC.DISAGGREGATION OF REVENUE AND SEGMENT DATA (UNAUDITED)FOR THE THREE AND TWELVE MONTHS ENDED DECEMBER 31, 2020 AND 2019(In thousands)

Three Months Ended December 31, 2020 Potash Trio^ Oilfield IntersegmentProduct Segment Segment Solutions Eliminations Total SegmentPotash $ 22,558 $ ? $ ? $ (69 ) $ 22,489 Trio^ ? 13,870 ? ? 13,870 Water 296 1,481 3,974 ? 5,751 Salt 2,311 214 ? ? 2,525 Magnesium 2,017 ? ? ? 2,017 ChlorideBrines 374 ? 141 ? 515 Other ? ? 1,275 1,275 Total $ 27,556 $ 15,565 $ 5,390 $ (69 ) $ 48,442 Revenue

Year Ended December 31, 2020 Potash Trio^ Oilfield IntersegmentProduct Segment Segment Solutions Eliminations Total SegmentPotash $ 92,500 $ ? $ ? $ (322 ) $ 92,178 Trio^ ? 65,344 ? ? 65,344 Water 1,253 4,444 14,701 ? 20,398 Salt 8,103 499 ? ? 8,602 Magnesium 4,855 ? ? ? 4,855 ChlorideBrines 1,349 ? 438 ? 1,787 Other ? ? 3,790 ? 3,790 Total $ 108,060 $ 70,287 $ 18,929 $ (322 ) $ 196,954 Revenue

Three Months Ended December 31, 2019 Potash Trio Oilfield IntersegmentProduct Segment Segment Solutions Eliminations Total SegmentPotash $ 18,594 $ ? $ 963 $ (590 ) $ 18,967 Trio^ ? 14,016 ? ? 14,016 Water 452 1,404 5,476 ? 7,332 Salt 3,917 249 ? ? 4,166 Magnesium 2,012 ? ? ? 2,012 ChlorideBrines 581 ? ? ? 581 Other ? ? 1,884 (109 ) 1,775 Total $ 25,556 $ 15,669 $ 8,323 $ (699 ) $ 48,849 Revenue

Year Ended December 31, 2019 Potash Trio Oilfield IntersegmentProduct Segment Segment Solutions Eliminations Total SegmentPotash $ 103,403 $ ? $ 2,973 $ (1,909 ) $ 104,467 Trio^ ? 64,299 ? ? 64,299 Water 1,823 4,495 19,339 ? 25,657 Salt 12,022 757 ? ? 12,779 Magnesium 4,907 ? ? ? 4,907 ChlorideBrines 2,493 ? ? ? 2,493 Other ? ? 5,582 (109 ) 5,473 Total $ 124,648 $ 69,551 $ 27,894 $ (2,018 ) $ 220,075 Revenue

Three MonthsEnded Potash Trio^ Oilfield Other ConsolidatedDecember 31, Solutions2020Sales^(1) $ 27,556 $ 15,565 $ 5,390 $ (69 ) $ 48,442 Less: Freight 4,324 4,481 ? (69 ) 8,736 costsWarehousingand handling 1,186 963 ? ? 2,149 costsCost of goods 18,199 10,496 3,048 ? 31,743 soldLower of costor netrealizable ? ? ? ? ? valueinventoryadjustmentsGross Margin $ 3,847 $ (375 ) $ 2,342 $ ? $ 5,814 (Deficit)Depreciation,depletion,and $ 7,051 $ 1,512 $ 718 $ 211 $ 9,492 amortizationincurred^(2) Year Ended OilfieldDecember 31, Potash Trio^ Solutions Other Consolidated2020Sales^(1) $ 108,060 $ 70,287 $ 18,929 $ (322 ) $ 196,954 Less: Freight 17,026 20,431 ? (322 ) 37,135 costsWarehousingand handling 4,857 4,574 ? ? 9,431 costsCost of goods 73,496 50,902 11,445 ? 135,843 soldLower of costor netrealizable 1,130 2,885 ? ? 4,015 valueinventoryadjustmentsGross Margin $ 11,551 $ (8,505 ) $ 7,484 $ ? $ 10,530 (Deficit)Depreciation,depletion,and $ 26,536 $ 6,068 $ 2,663 $ 843 $ 36,110 amortizationincurred^(2) Three MonthsEnded Potash Trio^ Oilfield Other ConsolidatedDecember 31, Solutions2019Sales^(1) $ 25,556 $ 15,669 $ 8,323 $ (699 ) $ 48,849 Less: Freight 4,461 5,011 218 (109 ) 9,581 costsWarehousingand handling 972 1,023 ? ? 1,995 costsCost of goods 14,377 9,264 3,684 (590 ) 26,735 soldLower of costor netrealizable ? 348 ? ? 348 valueinventoryadjustmentsGross Margin $ 5,746 $ 23 $ 4,421 $ ? $ 10,190 Depreciation,depletion,and $ 6,833 $ 1,567 $ 397 $ 205 $ 9,002 amortizationincurred^(2) Year Ended OilfieldDecember 31, Potash Trio^ Solutions Other Consolidated2019Sales^(1) $ 124,648 $ 69,551 $ 27,894 $ (2,018 ) $ 220,075 Less: Freight 18,715 20,514 936 (109 ) 40,056 costsWarehousingand handling 4,745 3,876 ? ? 8,621 costsCost of goods 73,401 42,251 12,367 (1,909 ) 126,110 soldLower of costor netrealizable ? 1,810 ? ? 1,810 valueinventoryadjustmentsGross Margin $ 27,787 $ 1,100 $ 14,591 $ ? $ 43,478 Depreciation,depletionand, $ 25,796 $ 6,163 $ 1,566 $ 810 $ 34,335 amortizationincurred^(2)

(1) Segment sales include the sales of byproducts generated during the production of potash and Trio.(2) Depreciation, depletion, and amortization incurred for potash and Trio excludes depreciation and depletion amounts absorbed in or (relieved from) inventory.

INTREPID POTASH, INC.UNAUDITED NON-GAAP RECONCILIATIONSFOR THE THREE AND TWELVE MONTHS ENDED DECEMBER 31, 2020 AND 2019(In thousands, except per share amounts)

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 income, adjusted net 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 Year Ended December 31, December 31, 2020 2019 2020 2019Net (Loss) Income $ (711 ) $ 2,082 $ (27,154 ) $ 13,631 Adjustments Litigation Settlement ? ? 10,075 ? Gain on land sale ? ? (4,722 ) ? Make-whole payment^(1) ? ? 1,868 ? Write-off of deferred ? ? 128 ? financing fees^(2) Total adjustments ? ? 7,349 ? Adjusted Net (Loss) Income $ (711 ) $ 2,082 $ (19,805 ) $ 13,631

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

Three Months Ended Year Ended December 31, December 31, 2020 2019 2020 2019Net (Loss) Income Per Diluted $ (0.05 ) $ 0.16 $ (2.09 ) $ 1.04 ShareAdjustments Litigation Settlement ? ? 0.78 ? Gain on land sale ? ? (0.36 ) ? Make-whole payment^(1) ? ? 0.14 ? Write-off of deferred financing ? ? 0.01 ? fees^(2) Total adjustments ? ? 0.57 ? Adjusted Net (Loss) Income Per $ (0.05 ) $ 0.16 $ (1.52 ) $ 1.04 Diluted Share

(1) As a result of early repayments of its senior notes, Intrepid incurred make whole-payments, which are reflected on the income statement as interest expense.

(2) As a result of early repayments of principal on its senior notes, Intrepid wrote off a portion of the financing fees that had previously been capitalized related to the senior notes. The write-offs of deferred financing fees are reflected in Intrepid's financial statements as interest expense.

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 Potash and Trio Net Realized Sales Price per Ton:

Potash Segment Three Months Ended December 31, 2020 2019Total Segment Sales $ 27,556 $ 25,556 Less: Segment byproduct sales 4,998 6,962 Potash freight costs 3,249 2,469 Subtotal $ 19,309 $ 16,125 Divided by: Potash tons sold (in thousands) 78 58 Average net realized sales price per ton $ 248 $ 278

Potash Segment 2020 2019Total Segment Sales $ 108,060 $ 124,648 Less: Segment byproduct sales 15,560 21,245 Potash freight costs 13,270 12,936 Subtotal $ 79,230 $ 90,467 Divided by: Potash tons sold (in thousands) 317 319 Average net realized sales price per $ 250 $ 284 ton

Trio^ Segment Three Months Ended December 31, 2020 2019Total Segment Sales $ 15,565 $ 15,669 Less: Segment byproduct sales 1,695 1,653 Trio^ freight costs 4,481 5,011 Subtotal $ 9,389 $ 9,005 Divided by: Trio^ tons sold (in thousands) 50 53 Average net realized sales price per ton $ 188 $ 170

Trio^ Segment 2020 2019Total Segment Sales $ 70,287 $ 69,551 Less: Segment byproduct sales 4,943 5,252 Trio^ freight costs 20,416 20,514 Subtotal $ 44,928 $ 43,785 Divided by: Trio^ tons sold (in thousands) 230 225 Average net realized sales price per ton $ 195 $ 195

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 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 Year Ended December 31, December 31, 2020 2019 2020 2019 Net (Loss) Income $ (711 ) $ 2,082 $ (27,154 ) $ 13,631 Adjustments Litigation ? ? 10,075 ? Settlement Gain on land ? ? (4,722 ) ? sale Interest 412 773 4,289 3,031 expense Income tax 47 61 5 53 expense Depreciation,depletion, and 9,411 8,976 35,788 34,121 amortization Amortization 81 26 322 214 of intangible assets Accretion ofasset retirement 435 446 1,738 1,793 obligation Total 10,386 10,282 47,495 39,212 adjustmentsAdjusted EarningsBefore Interest, Taxes, Depreciation, and Amortization $ 9,675 $ 12,364 $ 20,341 $ 52,843