GlobeNewswire Inc | Nov 1, 2021 04:15PM EDT

November 01, 2021

Denver, CO, Nov. 01, 2021 (GLOBE NEWSWIRE) -- Intrepid Potash, Inc. (Intrepid) (NYSE:IPI) today reported its results for the third quarter of 2021.

Key Takeaways for Q3 2021

-- Potash and Trio average net realized sales price(1) of $381 and $336 per ton respectively in Q3 2021, a year-over-year increase of $143 and $147 per ton, respectively. We expect potash price of approximately $495/ton and Trio price of approximately $370/ton in Q4 2021. -- Net income of $4.0 million, or $0.30 per share -- Gross margin of $10.6 million, an increase of $10.9 million compared to the third quarter of 2020 -- Cash flow from operations of $8.0 million in Q3 2021, a $13 million improvement over the prior year -- Adjusted EBITDA(1) of $13.1 million in Q3 2021, contributing to year to date cash flow from operations of $59.4 million -- Added a production shift at our East mine in September to incrementally increase production by approximately 50k tons over the next 12 months, with the potential to add another 50k tons based on continuing market improvement -- As of October 31, 2021, Intrepid had approximately $26 million in cash on hand and no outstanding debt on its $75 million revolving credit facility

"Third quarter, which is historically our lowest cash flow quarter of the year, was highlighted by higher fertilizer pricing, increasing oilfield sales, and solid improvements in cash flow generation compared to the prior year." said Bob Jornayvaz, Intrepid's Executive Chairman and CEO. "We announced another round of price increases in August for both our potash and Trio products with good subscription from our historic customers, and expect to realize these higher price levels in the fourth quarter. Since that time, fertilizer pricing continued to move higher with spot pricing in the Midwest over $700/ton as supply remains tight after a strong first half. Unfortunately, the Carlsbad region had more than double its average rainfall during the HB evaporation season which led to higher potash production costs and an abnormal cost expense we recorded in the third quarter. The increased rainfall and reduced evaporation will decrease our potash production from that facility for the current harvest season. As we continue to monitor the effects of the impacted production, we may also incur higher potash cost of goods sold in the next few quarters. We plan to restart our HB operation in March 2022 and run for three months before returning to our normal summer shutdown in order to meet expected demand during this period of higher pricing and strong demand. On a positive note, we added a production shift at our East mine beginning in September to take advantage of strong demand for our Trio products. We expect to add approximately 50k tons of production over the next 12 months with the potential of another 50k tons based on continuing market improvement."

Jornayvaz continued, "Oilfield activity remains strong as rising oil prices support increases in rigs and frac crews in the Delaware Basin. We saw sequential quarter increases in water and other oilfield revenues in the third quarter and our South Ranch water remains fully committed for 2021 with a good outlook for next year."

Consolidated Results

We generated third quarter 2021 net income of$4.0 million, or $0.30. Consolidated gross margin increased to $10.6 million compared to the prior year's gross deficit of $0.3 million. Year-to-date 2021 net income increased to $26.0 million, or $1.95 per share when compared to prior year period and adjusted net income was $13.9 million or $1.04 per share. Gross margin for the first nine months of 2021 increased to $33.9 million compared to prior year gross margin of $4.7 million. Adjusted net income and gross margin in both periods increased as higher average net realized sales prices for potash and Trio, increased byproduct sales, and strong demand in agricultural markets drove improvements to overall results.

Third quarter 2021 gross margin was reduced by a $3.6 million abnormal production cost adjustment werecorded in the quarter in response to below average production at our HB solar solution mining facility. The Carlsbad, NM area received significant rainfall, well above historical averages, during the evaporation season, while humidity was higher and temperatures were cooler than normal during this period. This reduced our pond production and our ability to extract brine and led to fewer harvestable tons of potash in our HB solution ponds. We expect to produce approximately 70k tons at our HB facility during this harvest period, with our production season ending in mid-January. In response to the abnormal weather, we plan to restart production in mid-March and continue through May to meet historical potash demand during the spring season.

Segment Highlights

Potash

Three Months Ended September Nine Months Ended September 30, 30, 2021 2020 2021 2020 (in thousands, except per ton data)Sales $ 31,673 $ 22,187 $ 112,944 $ 80,504 Gross $ 4,525 $ 1,353 $ 23,329 $ 7,703 margin Potashsales 62 66 270 239 volumes(in tons)Potashproduction 37 61 201 202 volumes(in tons) Averagepotash netrealized $ 381 $ 238 $ 319 $ 251 salesprice perton^(1)

Potash segment gross margin increased $3.2 million and $15.6 million in the third quarter and first nine months of 2021, respectively, when compared to prior year periods, as continued rising prices drove improvements to the bottom line.

Potash revenue in the third quarter increased 43% compared to the same period in 2020, due to a 60% increase in our average net realized sales price per ton and a $1.5 million increase in byproduct sales, offset by a 6% decrease in potash tons sold. Average net realized sales price increased during the quarter as previously announced price increases took effect and spot pricing moved higher with limited supply pushing price up on a near weekly basis. Increased byproduct sales in the second quarter were driven by a $0.8 million increase in magnesium chloride sales as we had more product to sell in 2021 due to good evaporation during the summer of 2020. Byproduct salt and brine sales also improved compared to the prior year due to increased activity from oil and gas producers near our operations.

Third quarter potash production decreased compared to the prior year due to a later startup at our Wendover facility and reduced production at our HB facility due to lower ore grades as a result of the above average rainfall in recent months.

We recorded abnormal production costs of $3.6 million in the third quarter of 2021. The Carlsbad, New Mexico area where our HB solar solution mining facility is located, experienced unusually wet, humid weather, limiting the evaporation and extraction rates at our HB mine. The significant rainfall and reduced evaporation resulted in fewer harvestable tons of potash from our HB solution ponds.

Trio

Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 (in thousands, except per ton data)Sales $ 20,827 $ 12,890 $ 71,444 $ 54,722 Grossmargin $ 5,436 $ (1,348 ) $ 8,528 $ (8,129 ) (deficit) Trio^sales 46 40 191 180 volume (intons)Trio^production 56 55 175 155 volume (intons) AverageTrio^netrealized $ 336 $ 189 $ 271 $ 197 salesprice perton^(1)

Our Trio segment generated a gross margin of $5.4 million and $8.5 million in the third quarter and first nine months of 2021, respectively, as higher average net realized sales price drove strong bottom line improvements in both periods.

Total sales increased 62% for the third quarter of 2021 compared to the prior year, due to the higher prices and a 15% increase in sales volumes. We announced a $50 per ton increase in Trio price in August and expect to realize the majority of that increase in the fourth quarter of 2021.

Third quarter production volume was similar to the prior year as we continue to operate at reduced rates. Production for the first nine months of 2021 increased 13% compared to the prior year as we converted more tons of work-in-process inventory to premium Trio.

Oilfield Solutions

Three Months Ended September Nine Months Ended September 30, 30, 2021 2020 2021 2020 (in thousands)Sales $ 6,708 $ 3,050 $ 14,293 $ 13,539 Gross $ 647 $ (313 ) $ 2,058 $ 5,142 margin

Oilfield solutions sales increased $3.7 million in the third quarter of 2021, compared to the same period in 2020, due to a $2.4 million increase in water sales, a $0.5 million increase in caliche sales, a $0.4 million increase in produced water royalties, and a $0.2 million increase in surface use, right-of way and easement revenues. Year-to-date oilfield sales increased $0.8 million as improved produced water and surface use revenues were partially offset by a $1.2 million decrease in water sales.

Gross margin for the third quarter increased $1.0 million compared to the prior year as improved activity was partially offset by increased costs of goods sold. Costs of goods sold for both the three and nine months of 2021 increased as we were required to purchase more third-party water to augment our existing water rights to successfully meet the increasing and significant daily refresh rates of our customer's fracs on our South Ranch.

Liquidity

Cash provided by operations was $8.0 million during the third quarter of 2021 and $59.4 million for the first nine months of 2021. Cash used in investing activities was $6.4 million for the first nine months of 2021, as $12.4 million spent on capital investments during 2021 was partially offset by $6.0 million in proceeds from the sale of land in the second quarter.

As of October 31, 2021, we have approximately $26 million in cash and cash equivalents, no outstanding borrowings, and $74.0 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 November 2, 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 8017.

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 and legal proceedings related 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 NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020 (In thousands, except per share amounts)

Three Months Ended September Nine Months Ended September 30, 30, 2021 2020 2021 2020Sales $ 59,153 $ 38,078 $ 198,504 $ 148,512 Less: Freight costs 7,911 7,802 30,104 28,397 Warehousingand handling 2,066 2,315 7,076 7,284 costsCost of goods 34,974 27,045 123,815 104,100 soldLower of costor netrealizable ? 1,224 ? 4,015 valueinventoryadjustmentsCostsassociated 3,594 ? 3,594 ? with abnormalproductionGross Margin 10,608 (308 ) 33,915 4,716 (Deficit) Selling and 5,890 6,750 18,293 20,022 administrativeAccretion ofasset 441 434 1,323 1,303 retirementobligationLitigation ? ? ? 10,075 settlementLoss (gain) on 5 21 (2,560 ) (4,441 ) sale of assetsOtheroperating 192 237 (385 ) 495 income(expense)Operating 4,080 (7,750 ) 17,244 (22,738 ) Income (Loss) Other Income (Expense)Interest (82 ) (2,450 ) (1,426 ) (3,877 ) expense, netOther income 25 25 42 129 Gain onextinguishment ? ? 10,113 ? of debtIncome (Loss)Before Income 4,023 (10,175 ) 25,973 (26,486 ) Taxes Income Tax ? ? ? 42 BenefitNet Income $ 4,023 $ (10,175 ) $ 25,973 $ (26,444 ) (Loss) WeightedAverage Shares Outstanding:Basic 13,123 13,006 13,089 12,981 Diluted 13,367 13,006 13,352 12,981 Earnings Per Share:Basic $ 0.31 $ (0.78 ) $ 1.98 $ (2.04 ) Diluted $ 0.30 $ (0.78 ) $ 1.95 $ (2.04 )

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

September 30, December 31, 2021 2020ASSETS Cash and cash equivalents $ 25,637 $ 19,515 Accounts receivable: Trade, net 32,731 22,795 Other receivables, net 3,449 1,577 Inventory, net 76,828 88,673 Prepaid expenses and other current assets 4,539 3,228 Total current assets 143,184 135,788 Property, plant, equipment, and mineral 339,986 355,497 properties, netWater rights 19,184 19,184 Long-term parts inventory, net 29,067 28,900 Other assets, net 10,403 10,819 Total Assets $ 541,824 $ 550,188 LIABILITIES AND STOCKHOLDERS' EQUITY Accounts payable $ 9,593 $ 7,278 Accrued liabilities 22,202 12,701 Accrued employee compensation and benefits 8,466 4,422 Current portion of long-term debt, net ? 10,000 Other current liabilities 34,830 32,816 Total current liabilities 75,091 67,217 Advances on credit facility ? 29,817 Long-term debt, net ? 14,926 Asset retirement obligation 25,221 23,872 Operating lease liabilities 1,163 2,136 Other non-current liabilities 1,129 961 Total Liabilities 102,604 138,929 Commitments and Contingencies Common stock, $0.001 par value; 40,000,000 shares authorized;13,124,110 and 13,049,820 shares outstanding at September 30, 2021, and December 31, 2020, 13 13 respectivelyAdditional paid-in capital 658,825 656,837 Accumulated deficit (219,618 ) (245,591 ) Total Stockholders' Equity 439,220 411,259 Total Liabilities and Stockholders' Equity $ 541,824 $ 550,188

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

Three Months Ended Nine Months Ended September 30, September 30, 2021 2020 2021 2020Cash Flows fromOperating Activities:Net income $ 4,023 $ (10,175 ) $ 25,973 $ (26,444 ) (loss)Adjustments toreconcile netincome to net cash providedby operatingactivities:Allowance fordoubtful ? ? ? 275 accountsDepreciation,depletion and 8,430 8,748 26,509 26,377 amortizationAccretion ofasset 441 434 1,323 1,303 retirementobligationAmortization ofdeferred 60 196 254 357 financing costsAmortization ofintangible 80 80 241 241 assetsStock-based 634 986 2,289 2,981 compensationLower of costor netrealizable ? 1,224 ? 4,015 value inventoryadjustmentsLoss (gain) ondisposal of 5 21 (2,560 ) (4,441 ) assetsAllowance forparts inventory ? ? ? 492 obsolescenceOther ? ? ? (116 ) Gain onextinguishment ? ? (10,113 ) ? of debtChanges inoperating assets andliabilities:Trade accounts (9,701 ) (4,015 ) (9,936 ) 203 receivable, netOtherreceivables, (979 ) (593 ) (1,872 ) (1,328 ) netInventory, net (2,089 ) (5,761 ) 11,678 3,100 Prepaidexpenses and (1,643 ) (1,743 ) (1,148 ) (313 ) other currentassetsAccountspayable,accruedliabilities, 9,231 2,543 15,254 4,071 and accruedemployeecompensationand benefitsOperating lease (555 ) (645 ) (1,616 ) (1,695 ) liabilitiesOther 50 3,639 3,147 9,409 liabilitiesNet cashprovided by(used in) 7,987 (5,061 ) 59,423 18,487 operatingactivities Cash Flows fromInvesting Activities:Additions toproperty,plant,equipment, (5,811 ) (3,442 ) (12,437 ) (14,087 ) mineralproperties andother assetsLong-term ? ? ? (3,500 ) investmentProceeds from ? ? 6,042 4,786 sale of assetsNet cash usedin investing (5,811 ) (3,442 ) (6,395 ) (12,801 ) activities Cash Flows fromFinancing Activities:Debt prepayment ? (1,869 ) (505 ) (1,869 ) costsRepayments of ? (15,000 ) (15,000 ) (35,000 ) long-term debtPayments of ? ? (1,258 ) ? financing leaseProceeds fromshort-term ? ? ? 10,000 borrowings oncredit facilityRepayments ofshort-term (29,817 ) ? (29,817 ) ? borrowings oncredit facilityCapitalized ? ? ? (36 ) debt feesEmployee taxwithholdingpaid for (2 ) 78 (382 ) (96 ) restrictedstock uponvestingProceeds fromloan under ? ? ? 10,000 CARES ActProceeds fromexercise of 30 ? 81 ? stock optionsNet cash usedin financing (29,789 ) (16,791 ) (46,881 ) (17,001 ) activities Net Change inCash, Cash (27,613 ) (25,294 ) 6,147 (11,315 ) Equivalents andRestricted CashCash, CashEquivalents andRestricted 53,944 35,218 20,184 21,239 Cash, beginningof periodCash, CashEquivalents andRestricted $ 26,331 $ 9,924 $ 26,331 $ 9,924 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 Nine Months Ended September September 30, 30, 2021 2020 2021 2020 (in thousands)Net Income (Loss) $ 4,023 $ (10,175 ) $ 25,973 $ (26,444 ) Adjustments Litigation ? ? ? 10,075 SettlementLoss (gain) on sale 5 21 (2,560 ) (4,441 ) of assetsGain onextinguishment of ? ? (10,113 ) ? debtWrite-off ofdeferred financing ? ? 60 ? feesMake-whole payment ? ? 505 ? Total adjustments 5 21 (12,108 ) 5,634 Adjusted Net Income $ 4,028 $ (10,154 ) $ 13,865 $ (20,810 ) (Loss)

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

Three Months Ended Nine Months Ended September 30, September 30, 2021 2020 2021 2020Net Income (Loss) Per $ 0.30 $ (0.78 ) $ 1.95 $ (2.04 ) Diluted ShareAdjustments Litigation Settlement ? ? ? 0.78 Loss (gain) on sale of ? ? (0.19 ) (0.34 ) assetsGain on extinguishment of ? ? (0.76 ) ? debtWrite-off of deferred ? ? ? ? financing feesMake-whole payment ? ? 0.04 ? Total adjustments ? ? (0.91 ) 0.44 Adjusted Net Income (Loss) $ 0.30 $ (0.78 ) $ 1.04 $ (1.60 ) Per 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 Nine Months Ended September September 30, 30, 2021 2020 2021 2020 (in thousands)Net Income (Loss) $ 4,023 $ (10,175 ) $ 25,973 $ (26,444 ) Litigation ? ? ? 10,075 settlementLoss (gain) on 5 21 (2,560 ) (4,441 ) sale of assetsGain onextinguishment of ? ? (10,113 ) ? debtInterest expense 82 2,450 1,426 3,877 Income tax ? ? ? (42 ) benefitDepreciation,depletion, and 8,430 8,748 26,509 26,377 amortizationAmortization of 80 80 241 241 intangible assetsAccretion ofasset retirement 441 434 1,323 1,303 obligationTotal adjustments 9,038 11,733 16,826 37,390 Adjusted EBITDA $ 13,061 $ 1,558 $ 42,799 $ 10,946

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 September 30, 2021 2020(inthousands, Potash Trio^ Potash Trio^except perton amounts)TotalSegment $ 31,673 $ 20,827 $ 22,187 $ 12,890 SalesLess:Segment 5,100 1,332 3,612 1,449 byproductsalesFreight 2,879 4,038 2,891 3,878 costsSubtotal $ 23,694 $ 15,457 $ 15,684 $ 7,563 Divided by: Tons sold 62 46 66 40 Average netrealized $ 381 $ 336 $ 238 $ 189 sales priceper ton

Nine Months Ended September 30, 2021 2020(inthousands,except per Potash Trio^ Potash Trio^tonamounts)TotalSegment $ 112,944 $ 71,444 $ 80,504 $ 54,722 SalesLess:Segment 15,696 3,096 10,562 3,248 byproductsalesFreight 11,174 16,515 10,021 15,935 costsSubtotal $ 86,074 $ 51,833 $ 59,921 $ 35,539 Divided by:Tons sold 270 191 239 180 Averagenetrealized $ 319 $ 271 $ 251 $ 197 salesprice perton

Three Months Ended September 30, 2021 Potash Trio^ Oilfield IntersegmentProduct Segment Segment Solutions Eliminations Total SegmentPotash $ 26,573 $ ? $ ? $ (55 ) $ 26,518 Trio^ ? 19,495 ? ? 19,495 Water 263 1,310 4,382 ? 5,955 Salt 2,540 22 ? ? 2,562 Magnesium 1,921 ? ? ? 1,921 ChlorideBrine 376 ? 301 ? 677 WaterOther ? ? 2,025 ? 2,025 Total $ 31,673 $ 20,827 $ 6,708 $ (55 ) $ 59,153 Revenue Nine Months Ended September 30, 2021 Potash Trio^ Oilfield IntersegmentProduct Segment Segment Solutions Eliminations Total SegmentPotash $ 97,248 $ ? $ ? $ (177 ) $ 97,071 Trio^ ? 68,348 ? ? 68,348 Water 1,942 2,808 9,507 ? 14,257 Salt 6,587 288 ? ? 6,875 Magnesium 5,829 ? ? ? 5,829 ChlorideBrine 1,338 ? 735 ? 2,073 WaterOther ? ? 4,051 ? 4,051 Total $ 112,944 $ 71,444 $ 14,293 $ (177 ) $ 198,504 Revenue

Three Months Ended September 30, 2020 Potash Trio^ Oilfield IntersegmentProduct Segment Segment Solutions Eliminations Total SegmentPotash $ 18,575 $ ? $ ? $ (49 ) $ 18,526 Trio^ ? 11,441 ? ? 11,441 Water 262 1,312 2,037 ? 3,611 Salt 1,995 137 ? ? 2,132 Magnesium 1,127 ? ? ? 1,127 ChlorideBrine 228 ? 105 ? 333 WaterOther ? ? 908 ? 908 Total $ 22,187 $ 12,890 $ 3,050 $ (49 ) $ 38,078 Revenue Six Months Ended June 30, 2020 Potash Trio Oilfield IntersegmentProduct Segment Segment Solutions Eliminations Total SegmentPotash $ 69,942 $ ? $ ? $ (253 ) $ 69,689 Trio^ ? 51,474 ? ? 51,474 Water 957 2,963 10,727 ? 14,647 Salt 5,792 285 ? ? 6,077 Magnesium 2,838 ? ? ? 2,838 ChlorideBrine 975 ? 297 ? 1,272 WaterOther ? ? 2,515 ? 2,515 Total $ 80,504 $ 54,722 $ 13,539 $ (253 ) $ 148,512 Revenue

Three MonthsEnded Potash Trio^ Oilfield Other ConsolidatedSeptember 30, Solutions2021Sales $ 31,673 $ 20,827 $ 6,708 $ (55 ) $ 59,153 Less: Freight 3,928 4,038 ? (55 ) 7,911 costsWarehousingand handling 1,241 825 ? ? 2,066 costsCost of goods 18,385 10,528 6,061 ? 34,974 soldCostsassociatedwith 3,594 ? 0 ? 3,594 abnormalproductionGross Margin $ 4,525 $ 5,436 $ 647 $ ? $ 10,608 Depreciation,depletion,and $ 6,257 $ 1,321 $ 818 $ 114 $ 8,510 amortizationincurred^1 Nine MonthsEnded Potash Trio^ Oilfield Other ConsolidatedSeptember 30, Solutions2021Sales $ 112,944 $ 71,444 $ 14,293 $ (177 ) $ 198,504 Less: Freight 13,766 16,515 ? (177 ) 30,104 costsWarehousingand handling 4,004 3,072 ? ? 7,076 costsCost of goods 68,251 43,329 12,235 ? 123,815 soldCostsassociatedwith 3,594 ? ? ? 3,594 abnormalproductionGross Margin $ 23,329 $ 8,528 $ 2,058 $ ? $ 33,915 Depreciation,depletion,and $ 19,895 $ 4,204 $ 2,206 $ 445 $ 26,750 amortizationincurred^1 Three MonthsEnded Potash Trio^ Oilfield Other ConsolidatedSeptember 30, Solutions2020Sales $ 22,187 $ 12,890 $ 3,050 $ (49 ) $ 38,078 Less: Freight 3,973 3,878 ? (49 ) 7,802 costsWarehousingand handling 1,173 1,142 ? ? 2,315 costsCost of goods 14,928 8,754 3,363 ? 27,045 soldLower of costor netrealizable 760 464 ? ? 1,224 valueinventoryadjustmentsGross Margin $ 1,353 $ (1,348 ) $ (313 ) $ ? $ (308 ) (Deficit)Depreciation,depletion,and $ 6,430 $ 1,531 $ 657 $ 210 $ 8,828 amortizationincurred^1 Nine MonthsEnded Potash Trio^ Oilfield Other ConsolidatedSeptember 30, Solutions2020Sales $ 80,504 $ 54,722 $ 13,539 $ (253 ) $ 148,512 Less: Freight 12,700 15,950 ? (253 ) 28,397 costsWarehousingand handling 3,673 3,611 ? ? 7,284 costsCost of goods 55,298 40,405 8,397 ? 104,100 soldLower of costor netrealizable 1,130 2,885 ? ? 4,015 valueinventoryadjustmentsGross Margin $ 7,703 $ (8,129 ) $ 5,142 $ ? $ 4,716 (Deficit)Depreciation,depletion and $ 19,485 $ 4,556 $ 1,945 $ 632 $ 26,618 amortizationincurred^1

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