GlobeNewswire Inc | Aug 2, 2021 04:15PM EDT

August 02, 2021

Denver, CO, Aug. 02, 2021 (GLOBE NEWSWIRE) -- Intrepid Potash, Inc. (Intrepid) (NYSE:IPI) today reported its results for the second quarter of 2021.

Key Takeaways for Q2 2021

-- As of June 30, 2021, Intrepid had $53 million in cash on hand and only $30 million of remaining debt which is outstanding on its revolving credit facility. Intrepid paid down its remaining $15 million of Senior Notes and received full forgiveness of its $10 million Paycheck Protection Program loan to achieve this cash positive position. -- Net income of $19.5 million, or $1.46 per share and adjusted net income(1) of $7.4 million, or $0.55 per share -- Gross margin of $14.2 million, an increase of $14.8 million compared to the second quarter of 2020 -- Cash flow from operations of $32.3 million in Q2 2021, increasing first half 2021 cash flow from operations to $51.4 million -- Adjusted EBITDA(1) of $16.9 million

"Second quarter and first half results continued to benefit from strong commodity prices and rising potash and Trio pricing and demand, leading to significant improvements in net income, gross margin and EBITDA compared to the prior year." said Bob Jornayvaz, Intrepid's Executive Chairman and CEO. "Since announcing another potash and Trio price increase in June, the fertilizer market continued to move up with buyers eager to secure supply in a limited market. We began our HB production season this week and expect to start our Utah solar solution mining facilities in early September. We are well positioned to supply our customers when the fall season begins and have already received strong buyer interest in new orders for fourth quarter delivery. We have been thoughtful in waiting to accept orders as the market remains tight."

Jornayvaz continued, "Oilfield activity continues to improve in the Delaware Basin as growth in rig counts and frac crews led to increased produced water royalty and surface use agreement revenue in the second quarter. We opportunistically scheduled our water on our South Ranch in the second quarter in anticipation of higher margin jobs, which have materialized, in the second half of the year. We expect steady growth in our oilfield solutions segment over the next six months and into 2022."

Consolidated Results

We generated second quarter 2021 net income of$19.5 million, or $1.46 per share and adjusted net income of $7.4 million or $0.55 per share. Consolidated gross margin increased to $14.2 million compared to the prior year's gross deficit of $0.6 million. First half 2021 net income increased to $21.9 million, or $1.65 per share when compared to prior year period and adjusted net income was $9.8 million or $0.74 per share. Gross margin for the first half of 2021 increased to $23.3 million compared to prior year first half gross margin of $5.0 million. Adjusted net income and gross margin in both periods increased as improved fertilizer pricing, strong demand in agricultural markets, and increased byproduct sales drove improvements in the bottom line.

In May 2021, we sold 326 acres of land in Texas for $6.0 million and recognized a gain on the sale of the land of $2.8 million. We purchased this land in May 2019 for the development of a produced water disposal facility and had permitted two disposal wells on the property. In June 2021, we received notice that the Small Business Administration had remitted funds to our bank to fully repay our Paycheck Protection Program (PPP) loan and accrued interest. Accordingly, we recognized a gain of $10.1million related to the forgiveness of the PPP loan and the associated accrued interest on the loan.

Segment Highlights

Potash

Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 (in thousands, except per ton data)Sales $ 37,693 $ 24,526 $ 81,270 $ 58,317 Gross $ 10,131 $ 2,015 $ 18,803 $ 6,349 margin Potashsales 92 74 208 173 volumes (intons)Potashproduction 51 4 164 140 volumes (intons) Averagepotash netrealized $ 319 $ 256 $ 300 $ 256 sales priceper ton^(1)

Potash segment gross margin increased $8.1 million and $12.5 million in the second quarter and first half of 2021, respectively, when compared to prior year periods, as rising prices, increased demand, and more product available to sell after a good 2020 evaporation season all drove improvements to the bottom line.

Potash sales in the second quarter increased 54% compared to the same period in 2020, due to a 24% increase in sales volume, a 25% increase in our average net realized sales price per ton, and a $1.8 million increase in byproduct sales. Agricultural sales volumes continued to benefit from strong commodity prices and our industrial potash sales increased slightly in the second quarter due to the economic rebound from the COVID-19 pandemic. Average net realized sales price per ton improved compared to the same periods in 2020 due to several price increases announced since the fourth quarter of 2020 and will continue to increase in the third quarter of 2021 as second quarter price increases begin to take effect.

Increased byproduct sales in the second quarter were driven by a $0.9 million increased in magnesium chloride sales as we had more product to sell in 2021 due to good evaporation during the summer of 2020. Byproduct water sales increased $0.4 million compared to the second quarter of 2020 as a higher percentage of our total water sales were sales of byproduct water.

First half potash production increased significantly compared to the prior year as above average evaporation during the summer of 2020 increased the product available in our solar ponds and extended our production season. Second quarter production also increased compared to the prior year as we made up for the reduced operating days and production rates during the first quarter of 2021.

Trio

Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 (in thousands, except per ton data)Sales $ 26,924 $ 19,251 $ 50,619 $ 41,832 Grossmargin $ 3,162 $ (3,225 ) $ 3,093 $ (6,780 ) (deficit) Trio^sales 75 64 145 140 volume (intons)Trio^production 63 50 119 100 volume (intons) AverageTrio^netrealized $ 271 $ 208 $ 251 $ 200 salesprice perton^(1)

Our Trio segment generated a gross margin of $3.2 million and $3.1 million in the second quarter and first half of 2021, respectively, as recent price increases improved our average net realized sales price per ton nearly 30% in both periods.

Total sales increased 40% for the second quarter of 2021 compared to the prior year, due to the higher prices and a 17% increase in sales volumes. Tons sold increased as strong commodity prices and the economic rebound from the COVID-19 pandemic drove an increase in demand for Trio. We announced a $35 per ton increase in Trio price in June and expect to realize the majority of that increase in the third quarter of 2021.

Production volume increased 26% and 19% second quarter and first half of 2021, respectively, when compared to the prior year periods, as we converted more tons of work-in-process inventory to premium Trio.

Oilfield Solutions

Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 (in thousands)Sales $ 3,331 $ 2,747 $ 7,584 $ 10,488 Gross margin $ 906 $ 611 $ 1,411 $ 5,455

Oilfield solutions sales increased $0.6 million in the second quarter of 2021, compared to the same period in 2020, due to a $0.5 million increase in surface use, right-of way and easement revenues and a $0.3 increase in produced water royalties, partially offset by a $0.2 million decrease in water sales. First half sales decreased $2.9 million compared to the same period in 2020, due to a $3.6 million decrease in water sales, partially offset by a $0.6 million increase in produced water royalty revenues and a $0.2 million increase in surface use, right-of way and easement revenues. Water sales recorded in the oilfield solutions segment continued to lag prior year results due to the negative economic effects from the COVID-19 pandemic, although we continue to see growth in oilfield activity in the Delaware Basin and expect water sales will improve in the second half of 2021.

Gross margin for the second quarter increased $0.3 million compared to the prior year as improved activity in the oilfield led to increased revenues from our surface use agreements and produced water royalty. First half 2021 gross margin decreased compared to the prior year as first quarter 2020 water sales were not affected by the COVID-19 pandemic.

Paycheck Protection Program (PPP) Loan

In June 2021, we received notice that the Small Business Administration had remitted funds to our bank to fully repay our PPP loan and accrued interest. Accordingly, we recognized a gain of $10.1million related to the forgiveness of the PPP loan and the associated accrued interest on the loan.

Senior Notes

In June 2021, we repaid the remaining $15.0 million of principal outstanding on our Series B Senior Notes due April 14, 2023 (the "Series B Senior Notes") and satisfied all obligations under the Amended and Restated Note Purchase Agreement, dated as of October 31, 2016, by and among the Company and each of the purchasers named therein (as amended, the "Note Purchase Agreement"). In connection with this repayment, the Company paid in aggregate approximately $15.6 million, which consisted of (i) $15.0 million of remaining aggregate principal amount of Series B Senior Notes, (ii) approximately $0.1 million of accrued interest and (iii) a "make-whole" premium of $0.5 million. As a result of the repayment, the Note Purchase Agreement was terminated.

Liquidity

Cash provided by operations was $32.3 million during the second quarter of 2021 and $51.4 million for the first half of 2021. Cash used in investing activities decreased to $0.6 million for the first half of 2021, as $6.6 million spent on capital investments during 2021 was mostly offset by $6.0 million in proceeds from the sale of land discussed above.

As of August 2, 2021, we had approximately $36 million in cash and cash equivalents, $10 million outstanding under our revolving credit facility, and $64.0 million available to borrow under our revolving credit facility.

Notes

1 Adjusted net income (loss), 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

A teleconference to discuss the quarter is scheduled for August 3, 2021, at 12:00 p.m. ET. The dial-in number is 1-800-319-4610 for U.S. and Canada, and is +1-631-891-4304 for other countries. The call will also be streamed on the Intrepid website, intrepidpotash.com.

An audio recording of the conference call will be available at intrepidpotash.com and by dialing 1-800-319-6413 for U.S. and Canada, or +1-631-883-6842 for other countries. The replay will require the input of the conference identification number 7466.

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 the impact of the COVID-19 pandemic on the company. 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; -- 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 revolving credit facility, including the underlying covenants, to avoid a default under the agreement; -- 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, 2020, 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 - FinancePhone: 303-996-3048Email: matt.preston@intrepidpotash.com

INTREPID POTASH, INC.CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2021 AND 2020 (In thousands, except per share amounts)

Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020Sales $ 67,888 $ 46,450 $ 139,351 $ 110,434 Less: Freight costs 10,115 8,735 22,193 20,595 Warehousingand handling 2,378 2,065 5,010 4,969 costsCost of goods 41,196 34,008 88,841 77,055 soldLower of costor netrealizable ? 2,241 ? 2,791 valueinventoryadjustmentsGross Margin 14,199 (599 ) 23,307 5,024 (Deficit) Selling and 6,612 6,673 12,403 13,272 administrativeAccretion ofasset 441 434 882 869 retirementobligationLitigation ? ? ? 10,075 settlement(Gain) loss on (2,567 ) 234 (2,565 ) (4,462 ) sale of assetsOtheroperating (583 ) 269 (577 ) 258 (income)expenseOperating 10,296 (8,209 ) 13,164 (14,988 ) Income (Loss) Other Income (Expense)Interest (918 ) (635 ) (1,344 ) (1,427 ) expense, netInterest ? ? ? 116 incomeOther income 8 (28 ) 17 (12 ) Gain onextinguishment 10,113 ? 10,113 ? of debtIncome (Loss)Before Income 19,499 (8,872 ) 21,950 (16,311 ) Taxes Income Tax ? ? ? 42 BenefitNet Income $ 19,499 $ (8,872 ) $ 21,950 $ (16,269 ) (Loss) WeightedAverage Shares Outstanding:Basic 13,089 12,979 13,071 12,968 Diluted 13,338 12,979 13,335 12,968 Earnings Per Share:Basic $ 1.49 $ (0.68 ) $ 1.68 $ (1.25 ) Diluted $ 1.46 $ (0.68 ) $ 1.65 $ (1.25 )

INTREPID POTASH, INC.CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)AS OF JUNE 30, 2021 AND DECEMBER 31, 2020(In thousands, except share and per share amounts)

June 30, December 31, 2021 2020ASSETS Cash and cash equivalents $ 53,250 $ 19,515 Accounts receivable: Trade, net 23,029 22,795 Other receivables, net 2,470 1,577 Inventory, net 74,760 88,673 Prepaid expenses and other current assets 2,854 3,228 Total current assets 156,363 135,788 Property, plant, equipment, and mineral 341,984 355,497 properties, netWater rights 19,184 19,184 Long-term parts inventory, net 29,044 28,900 Other assets, net 10,545 10,819 Total Assets $ 557,120 $ 550,188 LIABILITIES AND STOCKHOLDERS' EQUITY Accounts payable $ 7,206 $ 7,278 Accrued liabilities 15,015 12,701 Accrued employee compensation and benefits 8,664 4,422 Current portion of long-term debt, net ? 10,000 Other current liabilities 34,812 32,816 Total current liabilities 65,697 67,217 Advances on credit facility 29,817 29,817 Long-term debt, net ? 14,926 Asset retirement obligation 24,780 23,872 Operating lease liabilities 1,413 2,136 Other non-current liabilities 878 961 Total Liabilities 122,585 138,929 Commitments and Contingencies Common stock, $0.001 par value; 40,000,000 shares authorized;13,121,087 and 13,049,820 shares outstanding at June 30, 2021, and December 31, 2020, 13 13 respectivelyAdditional paid-in capital 658,163 656,837 Accumulated deficit (223,641 ) (245,591 ) Total Stockholders' Equity 434,535 411,259 Total Liabilities and Stockholders' Equity $ 557,120 $ 550,188

INTREPID POTASH, INC.CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2021 AND 2020(In thousands)

Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020Cash Flows fromOperating Activities:Net income $ 19,499 $ (8,872 ) $ 21,950 $ (16,269 ) (loss)Adjustments toreconcile netincome to net cash providedby operatingactivities:Allowance fordoubtful ? ? ? 275 accountsDepreciation,depletion and 8,598 8,043 18,079 17,629 amortizationAccretion ofasset 441 434 882 869 retirementobligationAmortization ofdeferred 126 75 194 161 financing costsAmortization ofintangible 81 81 161 161 assetsStock-based 765 963 1,655 1,995 compensationLitigation ? (10,075 ) ? ? settlementLower of costor netrealizable ? 2,241 ? 2,791 value inventoryadjustments(Gain) loss ondisposal of (2,567 ) 234 (2,565 ) (4,462 ) assetsAllowance forparts inventory ? 492 ? 492 obsolescenceOther ? (116 ) ? (116 ) Gain onextinguishment (10,113 ) ? (10,113 ) ? of debtChanges inoperating assets andliabilities:Trade accounts 13,868 12,606 (235 ) 4,218 receivable, netOtherreceivables, (173 ) (427 ) (893 ) (735 ) netInventory, net 4,474 3,885 13,767 8,861 Prepaidexpenses and 137 573 495 1,430 other currentassetsAccountspayable,accruedliabilities, (1,955 ) (6,591 ) 6,023 1,528 and accruedemployeecompensationand benefitsOperating lease (536 ) (498 ) (1,061 ) (1,050 ) liabilitiesOther (318 ) 5,729 3,097 5,770 liabilitiesNet cashprovided by 32,327 8,777 51,436 23,548 operatingactivities Cash Flows fromInvesting Activities:Additions toproperty,plant,equipment, (4,266 ) (4,935 ) (6,626 ) (10,645 ) mineralproperties andother assetsLong-term ? (3,500 ) ? (3,500 ) investmentProceeds from 5,995 ? 6,042 4,786 sale of assetsNet cashprovided by(used in) 1,729 (8,435 ) (584 ) (9,359 ) investingactivities Cash Flows fromFinancing Activities:Debt prepayment (503 ) ? (505 ) ? costsRepayments of (14,978 ) (20,000 ) (15,000 ) (20,000 ) long-term debtPayments of (1,151 ) ? (1,258 ) ? financing leaseProceeds fromshort-term ? ? ? 10,000 borrowings oncredit facilityCapitalized ? (36 ) ? (36 ) debt feesEmployee taxwithholdingpaid for (176 ) (125 ) (380 ) (174 ) restrictedstock uponvestingProceeds fromloan under ? 10,000 ? 10,000 CARES ActProceeds fromexercise of 8 ? 51 ? stock optionsNet cash usedin financing (16,800 ) (10,161 ) (17,092 ) (210 ) activities Net Change inCash, Cash 17,256 (9,819 ) 33,760 13,979 Equivalents andRestricted CashCash, CashEquivalents andRestricted 36,688 45,037 20,184 21,239 Cash, beginningof periodCash, CashEquivalents andRestricted $ 53,944 $ 35,218 $ 53,944 $ 35,218 Cash, end ofperiod

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 (loss), adjusted net income (loss) 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 Income (Loss) and Adjusted Net Income (Loss) Per Diluted Share

Adjusted net income (loss) and adjusted net income (loss) per diluted share are calculated as net income (loss) or income (loss) 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 Income (Loss) to Adjusted Net Income (Loss):

Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 (in thousands)Net Income (Loss) $ 19,499 $ (8,872 ) $ 21,950 $ (16,269 ) Adjustments Litigation ? ? ? 10,075 Settlement(Gain) loss on (2,567 ) 234 (2,565 ) (4,462 ) sale of assetsGain onextinguishment of (10,113 ) ? (10,113 ) ? debtWrite-off ofdeferred financing 60 ? 60 ? feesMake-whole payment 503 ? 505 ? Total adjustments (12,117 ) 234 (12,113 ) 5,613 Adjusted Net $ 7,382 $ (8,638 ) $ 9,837 $ (10,656 ) Income (Loss)

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

Three Months Ended June Six Months Ended June 30, 30, 2021 2020 2021 2020Net Income (Loss) Per Diluted $ 1.46 $ (0.68 ) $ 1.65 $ (1.25 ) ShareAdjustments Litigation Settlement ? ? ? 0.78 (Gain) loss on sale of assets (0.19 ) 0.02 (0.19 ) (0.34 ) Gain on extinguishment of debt (0.76 ) ? (0.76 ) ? Write-off of deferred financing ? ? ? ? feesMake-whole payment 0.04 ? 0.04 ? Total adjustments (0.91 ) 0.02 (0.91 ) 0.44 Adjusted Net Income (Loss) Per $ 0.55 $ (0.66 ) $ 0.74 $ (0.81 ) Diluted Share

Adjusted EBITDA

Adjusted earnings before interest, taxes, depreciation, and amortization (or adjusted EBITDA) is calculated as net income (loss) 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 Income (Loss) to Adjusted EBITDA:

Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 (in thousands)Net Income $ 19,499 $ (8,872 ) $ 21,950 $ (16,269 ) (Loss) Litigation ? ? ? 10,075 settlement(Gain) loss on (2,567 ) 234 (2,565 ) (4,462 ) sale of assetsGain onextinguishment (10,113 ) ? (10,113 ) ? of debtInterest expense 918 635 1,344 1,427 Income tax ? ? ? (42 ) benefitDepreciation,depletion, and 8,598 8,043 18,079 17,629 amortizationAmortization ofintangible 81 81 161 161 assetsAccretion ofasset retirement 441 434 882 869 obligationTotal (2,642 ) 9,427 7,788 25,657 adjustmentsAdjusted EBITDA $ 16,857 $ 555 $ 29,738 $ 9,388

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, 2021 2020(inthousands, Potash Trio^ Potash Trio^except perton amounts)TotalSegment $ 37,693 $ 26,924 $ 24,526 $ 19,251 SalesLess:Segment 4,812 584 2,977 419 byproductsalesFreight 3,486 6,037 2,600 5,523 costsSubtotal $ 29,395 $ 20,303 $ 18,949 $ 13,309 Divided by: Tons sold 92 75 74 64 Average netrealized $ 319 $ 271 $ 256 $ 208 sales priceper ton

Six Months Ended June 30, 2021 2020(inthousands,except per Potash Trio^ Potash Trio^tonamounts)TotalSegment $ 81,270 $ 50,619 $ 58,317 $ 41,832 SalesLess:Segment 10,595 1,764 6,950 1,799 byproductsalesFreight 8,295 12,477 7,140 12,057 costsSubtotal $ 62,380 $ 36,378 $ 44,227 $ 27,976 Divided by: Tons sold 208 145 173 140 Average netrealized $ 300 $ 251 $ 256 $ 200 sales priceper ton

Three Months Ended June 30, 2021 Potash Trio^ Oilfield IntersegmentProduct Segment Segment Solutions Eliminations Total SegmentPotash $ 32,881 $ ? $ ? $ (60 ) $ 32,821 Trio^ ? 26,340 ? ? 26,340 Water 520 514 1,783 ? 2,817 Salt 2,008 70 ? ? 2,078 Magnesium 1,880 ? ? ? 1,880 ChlorideBrine 404 ? 229 ? 633 WaterOther ? ? 1,319 ? 1,319 Total $ 37,693 $ 26,924 $ 3,331 $ (60 ) $ 67,888 Revenue Six Months Ended June 30, 2021 Potash Trio^ Oilfield IntersegmentProduct Segment Segment Solutions Eliminations Total SegmentPotash $ 70,675 $ ? $ ? $ (122 ) $ 70,553 Trio^ ? 48,855 ? ? 48,855 Water 1,679 1,498 5,125 ? 8,302 Salt 4,047 266 ? ? 4,313 Magnesium 3,908 ? ? ? 3,908 ChlorideBrine 961 ? 434 ? 1,395 WaterOther ? ? 2,025 ? 2,025 Total $ 81,270 $ 50,619 $ 7,584 $ (122 ) $ 139,351 Revenue

Three Months Ended June 30, 2020 Potash Trio^ Oilfield IntersegmentProduct Segment Segment Solutions Eliminations Total SegmentPotash $ 21,549 $ ? $ ? $ (74 ) $ 21,475 Trio^ ? 18,832 ? ? 18,832 Water 112 404 2,029 ? 2,545 Salt 1,701 15 ? ? 1,716 Magnesium 952 ? ? ? 952 ChlorideBrine 212 ? 161 ? 373 WaterOther ? ? 557 ? 557 Total $ 24,526 $ 19,251 $ 2,747 $ (74 ) $ 46,450 Revenue Six Months Ended June 30, 2020 Potash Trio Oilfield IntersegmentProduct Segment Segment Solutions Eliminations Total SegmentPotash $ 51,367 $ ? $ ? $ (203 ) $ 51,164 Trio^ ? 40,033 ? ? 40,033 Water 695 1,651 8,690 ? 11,036 Salt 3,797 148 ? ? 3,945 Magnesium 1,711 ? ? ? 1,711 ChlorideBrine 747 ? 192 ? 939 WaterOther ? ? 1,606 ? 1,606 Total $ 58,317 $ 41,832 $ 10,488 $ (203 ) $ 110,434 Revenue

Three Months OilfieldEnded Potash Trio^ Solutions Other ConsolidatedJune 30, 2021Sales $ 37,693 $ 26,924 $ 3,331 $ (60 ) $ 67,888 Less: Freight 4,138 6,037 ? (60 ) 10,115 costsWarehousingand handling 1,306 1,072 ? ? 2,378 costsCost of goods 22,118 16,653 2,425 ? 41,196 soldGross Margin $ 10,131 $ 3,162 $ 906 $ ? $ 14,199 Depreciation,depletion,and $ 6,460 $ 1,376 $ 700 $ 143 $ 8,679 amortizationincurred^1 Six Months OilfieldEnded Potash Trio^ Solutions Other ConsolidatedJune 30, 2021Sales $ 81,270 $ 50,619 $ 7,584 $ (122 ) $ 139,351 Less: Freight 9,838 12,477 ? (122 ) 22,193 costsWarehousingand handling 2,762 2,248 ? ? 5,010 costsCost of goods 49,867 32,801 6,173 ? 88,841 soldGross Margin $ 18,803 $ 3,093 $ 1,411 $ ? $ 23,307 Depreciation,depletion,and $ 13,637 $ 2,883 $ 1,388 $ 332 $ 18,240 amortizationincurred^1 Three Months OilfieldEnded Potash Trio^ Solutions Other ConsolidatedJune 30, 2020Sales $ 24,526 $ 19,251 $ 2,747 $ (74 ) $ 46,450 Less: Freight 3,286 5,523 ? (74 ) 8,735 costsWarehousingand handling 1,204 861 ? ? 2,065 costsCost of goods 17,650 14,222 2,136 ? 34,008 soldLower of costor netrealizable 371 1,870 ? ? 2,241 valueinventoryadjustmentsGross Margin $ 2,015 $ (3,225 ) $ 611 $ ? $ (599 ) (Deficit)Depreciation,depletion,and $ 5,742 $ 1,516 $ 657 $ 209 $ 8,124 amortizationincurred^1 Six Months OilfieldEnded Potash Trio^ Solutions Other ConsolidatedJune 30, 2020Sales $ 58,317 $ 41,832 $ 10,488 $ (203 ) $ 110,434 Less: Freight 8,727 12,071 ? (203 ) 20,595 costsWarehousingand handling 2,500 2,469 ? ? 4,969 costsCost of goods 40,370 31,652 5,033 ? 77,055 soldLower of costor netrealizable 371 2,420 ? ? 2,791 valueinventoryadjustmentsGross Margin $ 6,349 $ (6,780 ) $ 5,455 $ ? $ 5,024 (Deficit)Depreciation,depletion and $ 13,054 $ 3,025 $ 1,289 $ 422 $ 17,790 amortizationincurred^1

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