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Transcript Summary

Intrepid Potash reported a strong start to 2026, with adjusted EBITDA growing to $19 million from $14.6 million year-over-year. The company benefited from double-digit price increases in both potash and Trio, alongside its second-best sales volumes in a decade. A major strategic milestone was the $70 million sale of the South Ranch, which bolstered the cash balance to approximately $170 million. This liquidity allows the company to focus on fertilizer assets and potential shareholder returns, which will be discussed at an upcoming board meeting. Operational efficiencies were a key theme, with a new continuous miner in the Trio segment and improved mill recoveries at the HB and Moab facilities. Looking forward, the company is progressing toward an FEL-3 engineering milestone for its lithium project and expanding evaporative ponds at Wendover for long-term production growth. While management remains mindful of inflation and grower affordability, the overall outlook is bullish due to tight global sulfur markets and stable potash demand. The company expects annual potash production to hit the high end of its 270,000 to 285,000-ton guidance, supported by ongoing productivity initiatives and a disciplined capital allocation strategy.

5-year share-count history (top 10 holders by peak, incl. exited) + price

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Intrepid Potash, Inc.: Administrative shell filing lacks material financial data for forensic assessment

Full Earnings Call Transcript — Q1 • 2026-05-07

Operator: Thank you for standing by. This is the conference operator. Welcome to Intrepid Potash, Inc. first quarter 2026 Results Conference Call. As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. Should you need assistance during the conference call, you may signal an operator by pressing star. I would now like to turn the conference over to Ryan Schulz, interim investor relations manager. Please go ahead. Good morning, everyone.
Ryan Schulz: Thank you for joining us to discuss and review Intrepid Potash, Inc.’s first quarter 2026 results. With me today is Intrepid Potash, Inc.’s CEO, Kevin S. Crutchfield, our chief accounting officer, Chris Engold, our VP of sales and marketing, Zachry Adams, and our VP of operations, Rick Kim. Please be advised that comments we will make today include forward-looking statements as defined by U.S. securities laws. These are based upon information available to us today, are subject to risks that are described in the reports we file with the SEC, and could cause our actual results to be different from those currently anticipated. We assume no obligation to update them. During today's call, we will also refer to certain non-GAAP financial and operational measures. Reconciliations to the most directly comparable GAAP measures are included in today's press release and along with our SEC filings. SEC filings are available at intrepidpotash.com. I will now turn the call over to our CEO, Kevin S. Crutchfield.
Kevin S. Crutchfield: Thank you, Ryan, and good morning, everyone. We appreciate your interest in joining today’s earnings call. I am pleased to report that 2026 is off to a strong start, with solid first quarter results. Our adjusted net income from continuing operations for the first quarter of $8.2 million and adjusted EBITDA of $19 million is a significant improvement from last year's first quarter adjusted net income of $3.9 million and adjusted EBITDA of $14.6 million, and we are looking forward to capitalizing on this momentum for the rest of the year. Our performance is a reflection of the hard work of all of our employees, and I would like to thank our entire team for their commitment to safety and consistent execution across our core fertilizer business. Our first quarter performance was driven by several factors. First, supportive pricing and resilient demand across our fertilizer products. In the first quarter, our average potash net realized sales price was $353 per ton, and our average Trio net realized sales price was $387 per ton. This represents a 13% increase year over year for potash, up from $312 per ton, and a 12% increase for Trio, up from $345 per ton. Second, sales volumes remained strong with our second-highest quarterly sales total since idling the West Mine in 2016. Combined potash and Trio sales volumes were 211,000 tons in the first quarter, with potash sales volumes of 105,000 tons and Trio sales volumes of 106,000 tons. Finally, successful execution on key projects and operational efficiencies supported improved cost margins. Trio delivered its highest quarterly segment margin since 2022 and per-ton cost improved 5% compared to the fourth quarter. Before I pass the call to Zach, I want to highlight a few key developments and operational updates. On 04/01/2026, we sold the majority of the assets of the Intrepid South Ranch to HydraSource Logistics LLC for total consideration of $70 million, which included the $8 million deposit we received in December 2025. We were able to transact on the ranch at a favorable valuation, unlocking decades worth of cash flows in a single transaction that will allow us to refocus our efforts exclusively on our fertilizer assets. The sale will also allow us to utilize a portion of our sizable deferred tax assets to offset the tax impact of the one-time gain. On lithium, our partners continued to advance FEL-3 engineering and associated permitting. We remain confident in this project and look forward to sharing further details of the project economics as they develop. Overall, we are looking forward to a strong year. Continued steady support for our core business and a solid cash position will allow us to capitalize on our unique position in the market and capture additional upside from opportunities like lithium, among others. I will now pass the call to Zach to provide some commentary on the market. Go ahead, Zach.
Zachry Adams: Thanks, Kevin. Potash saw a good subscription during the winter fill program, with customers securing orders to meet most of their first quarter requirements. Following the closure of the order window, posted potash prices increased by $20 per ton, a change reflected in second quarter spot transactions. Trio demand remains resilient as customers value the individual components—particularly sulfate, due to ongoing disruptions in raw sulfur supply from the Middle East—along with the low-chloride potassium component. Trio pricing was increased by $15 per ton in late March, with this adjustment realized on spot second quarter sales. Globally, potash fundamentals have been supported by consistent production, broadly stable pricing, and solid demand. Brazil and China imported potash at record levels in the first quarter, contributing to a balanced market and reinforcing a constructive outlook for the second half of the year. Turning to agriculture markets, U.S. corn exports are on track to reach record levels for the 2025–2026 marketing year. Commodity prices for corn, soybeans, and cotton have strengthened in recent weeks driven by weather concerns, supportive demand, and geopolitical tensions affecting market stability. We do recognize the concerns regarding the financial health of growers within the U.S. market, particularly as affordability challenges have been intensified by volatility in input costs arising from the conflict in the Middle East. We anticipate growers will continue to make input decisions carefully. Potash, whose prices have stayed comparatively stable relative to other nutrients, remains a critical input as growers look to maximize yields. I will now turn the call over to Rick Kim for an operations update. Thanks, Zach.
Rick Kim: Our Trio segment, the commissioning of a new continuous miner has already increased our tons per operating hour and increased operational efficiency. Additional improvements in our mill have boosted recovery, and increased operating hours per shift continues to drive higher production of both granular and premium products. We benefited from these improvements in the first quarter, and we expect to continue realizing further improvements through the rest of the year. In our potash segment, we have seen promising returns this spring from the HB mine with higher mill recoveries and improved pond deposition, extending our expected run time before our summer shutdown. Moab also continues to see improvements in overall plant efficiency, driving higher throughput and recovery. Early-season evaporation looks promising, and we anticipate making up the tons lost due to last year's late-season rain events. At Wendover, we expect to commence construction on Primary Pond A this summer, which will expand our evaporative area, and we anticipate increased production in 2028 as a result. We also expect Primary Pond 7 to start contributing more production this year. Overall, our focus on operational improvements and execution has resulted in higher production and reduced unit cost year over year in both potash and Trio. I will now turn the call over to Chris.
Chris Engold: Thank you, Rick. Intrepid Potash, Inc. delivered a strong first quarter. Our continued focus on driving production to increase revenues and improve unit economics is visible in our first quarter results. Potash production was 104,000 tonnes in the first quarter, compared to 93,000 tonnes in 2025. As Kevin and Rick mentioned, this production is due to operational improvements across our mines. First quarter potash sales were $46.1 million, up $2.5 million from the prior quarter, driven primarily by higher realized pricing. Potash gross margin was $3.1 million versus $2.5 million last year as a result of higher realized pricing, partially offset by higher costs on a similar volume. We sold 105,000 tons at an average net realized sales price of $353 per ton, compared to $312 per ton in 2025. Higher production from higher-cost sites increased our average potash segment cost of goods sold to $334 per ton in 2026, compared to $313 per tonne in 2025, and $332 per ton in 2025. For 2026, we expect our annual potash production to be at the upper end of our guidance of 270,000 to 285,000 tons given recent improvements at HB. Turning to Trio, first quarter production was 69,000 tons, a 10% increase versus last year. This increase is largely attributed to a new continuous miner commissioned during the quarter and ongoing plant optimization projects. Sales were $52.5 million, up $2.7 million from the prior year, driven by a 12% increase in our average net realized sales price per ton. This offset a 4% decline in tons sold. Overall, Trio margin was $14.8 million for the quarter, up $4.4 million from last year. This was the highest quarterly segment margin since 2022, due to higher realized pricing and an improvement in COGS offsetting the slight decline in sales volume. COGS per ton saw an improvement year over year and quarter over quarter, with $229 per ton versus $235 per ton in Q1 last year and versus $242 per ton in 2025. For 2026 Trio production, we are expecting to reach 285,000 to 300,000 tonnes with COGS of around $230 per ton. This is the expected result from our improvements with the new miner, increased recoveries, and more operating hours per shift. In terms of second quarter guidance, we expect another solid quarter as spring application winds down and our potash facilities enter the summer evaporation season. For potash, we expect our sales volumes to be between 50,000 to 60,000 tonnes at an average net realized sales price in the range of $380 to $390 per ton. In Trio, we expect our sales volumes to be between 70,000 to 80,000 tons at an average net realized sales price in the range of $390 to $400 per ton. For our 2026 capital program, we expect to spend $40 million to $50 million, with most of our spend related to sustaining capital—specifically at our East Mine—and for the beginning of a new primary pond at Wendover, which we expect will begin contributing to Wendover's production in 2028. We continue to consider investment opportunities that will upgrade our assets and optimize future production and efficiency. We are currently evaluating a number of additional high-return growth and productivity investment initiatives over the next 18 to 24 months. In summary, 2026 is off to a strong start, and we are excited to see the results from the initiatives we put in place meaningfully pay off in the form of increased production and improving costs. Operator, we are now ready for the Q&A portion of our call.
Operator: Thank you. We will now open the call for questions. To join the question queue, you may press star then 1 on your telephone keypad. You will hear a tone acknowledging your request. If you are using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press star then 1. We will pause for a moment as callers join the queue.
Operator: Your first question comes from the line of Lucas Charles Beaumont from UBS. Please go ahead.
Lucas Charles Beaumont: Hi. Good morning. Thanks very much. I just wanted to start on the sale of the South Ranch. It sounded like you are indicating that potentially you get the full $70 million cash net of the DTA benefits. Is that correct? And then what are you intending to do with the proceeds? Are you going to sit on it to put towards projects going forward? Do you see repurchases as attractive at the current level, or where would you like to use that?
Kevin S. Crutchfield: I am sorry, Lucas. What was the last part of your question? What are we going to do with the cash? Look, it is a good question, and let me just give you some context on how we are thinking about that right now. As I have mentioned a bunch of times before since I joined, this is a regular conversation amongst our board, i.e., how to think about capital allocation, and frankly, it is becoming even more topical given the improved performance that we have seen over the last 18 months and the cash build that we are experiencing on the balance sheet at the moment. So let me just reiterate some priorities that I have discussed before so we are clear and you get a sense of how we think about this. As I laid out early in my tenure here, the first order of business was to reestablish an intense focus on the core assets. The goal was to make them more predictable, more reliable, more resilient. I think we can all agree that we have seen improvements on that front, but we are not done there, and I would address that momentarily. From there, we wanted some time to look at our sustaining capital needs for the business over a reasonable period of time, say, five years or so. We are pretty much through that process now and believe long-term core operations should require something on the order of $35 million to $40 million a year of sustaining capital, with an add-on every few years for larger sustaining items like making a new cavern or building a new pond like we are doing at Wendover right now. Notably, I will just give you a heads up that 2027 is expected to be one of those years. We can talk about that a little later. And then, also importantly, we are really focused across the company on ways we can increase volumes and reduce our cost. This effort is being ingrained into the culture of Intrepid Potash, Inc. It is simply the way we need to think about our business. To be frank, we do not see any silver bullets to increase production substantially in the short term, but we do see numerous opportunities to add incremental tons to the portfolio with effects on cost and efficiencies, and I think a good example of that is what is happening at Carlsbad now. You can see that result improved over the past several quarters. As I have also mentioned in the past, we wanted to review our portfolio to determine if there were assets that we held that might make sense in the hands of somebody else, and the South Ranch fit that bill. As you saw, we monetized that asset and brought forward decades of cash flows and, frankly, put that asset into a better set of hands than us given the dynamics of what is happening with water in the Permian Basin. So now that the core assets are performing better and we have taken a look out into the future and assessed our capital needs, we want to be thoughtful about maintaining an adequate amount of dry powder for organic projects or opportunities that exist across our portfolio, and through continued performance to, frankly, earn the right to consider adjacency opportunities that might make strategic sense for the company. And then last but not least, we want to retain adequate liquidity to buoy us through any rough times that might come our way. For those of you that have been around this sector for a while, you will know exactly what I am talking about. I know that was a lot, Lucas, but I thought it was important for you and others to hear how we think about capital allocation priorities. Suffice it to say, I think we have made great progress over the year and a half, and what I want to leave you with today is the following: there have been a lot of requests that we could return capital to shareholders. We hear you loud and clear. We always have. We simply had some work to do before this conversation could be had in earnest. Our board is convening later this month to discuss a variety of matters, and what I will leave you with is just know that this topic is chief among them. I will just leave it at that for now, and hopefully that gives you some nuggets on how we think about it and what might be on the near-term timeframe.
Lucas Charles Beaumont: Right. That is very helpful. And then on the markets as we look forward here, you are pointing to a $10 to $15 sequential improvement in pricing into 2Q. Sulfur markets have been impacted significantly globally from the Middle East disruption, raising production costs and the cost curve against synthetic production. How do you see that flowing into the Trio market and impacting pricing? Is there more of an impact to come as 2026 progresses, or is that incorporated in what you are expecting for the year now?
Zachry Adams: Thanks for the question. It is important to remember that customers typically lock in the majority of their spring requirements pretty early to start the year for Trio and potash, and most of those commitments were made ahead of the Iran conflict beginning and certainly before the full extent of it was realized. We expect to start seeing more and more of that realization in spot opportunities here in the second quarter. For the balance of the year, we expect Trio to benefit from a constructive outlook amid a tightening global supply environment in sulfur, which should keep sulfate values firm, and you should see that roll through our realized pricing as we move through the rest of the year.
Lucas Charles Beaumont: Right. Thanks. And then just on potash production, how do you see the trajectory beyond this year to push back above 300,000 tonnes over time?
Rick Kim: You want me to take that, Kevin? Yeah. This is Rick. We see a number of different incremental opportunities at the core assets. As Kevin mentioned, the past 12 to 18 months have really been focused on operational improvements—identifying those and executing on them. We continue to see opportunities at HB. We are starting to realize those already, as I mentioned earlier. We are seeing similar opportunities around Wendover and in Moab as well. The addition of a new primary pond at Wendover will start contributing in 2028. Primary Pond 7, which was commissioned a couple of years ago, will really start to see its full productive capacity come online throughout this year, with the intent of getting that operation back up in the 75,000 to 80,000 ton per year run rate that it has historically operated at.
Kevin S. Crutchfield: And in addition to what Rick said, as we talked about before, we have the Amax Cavern. It still needs more work. We want to be very thoughtful about how we approach that. To the extent that it proves out, that would represent a meaningful upside opportunity for us. But we still have work to do there, and we will keep you posted in the coming quarters on that project.
Lucas Charles Beaumont: Alright. Thanks. And then on the lithium project, could you share how you see the timeline on milestones as we move through this year and beyond, and when we might have a better view on unit cost economics?
Kevin S. Crutchfield: Good question. I do not want to front-run our partners. The key milestone coming early this summer will be FEL-3. That is when you have a pretty high degree of precision around your engineering of the build, the cost of the build, and where your operating costs are going to come out. We have a sense of what those are, but it would be premature for me to start talking about that. Given the concentrations that we have relative to a lot of these other brine projects, we kind of got a head start when it comes down to it. We feel good about the initial volumes coming out of the project—in a couple of years, 5,000 tons LCE. We continue to work very closely with our partners, assisting them with the footprint of their operations, assisting with permitting, getting through the regulatory hurdles, etc., all of which is going pretty well. The big milestone again is FEL-3, and once that is done, we will be prepared to talk to the market about more precision around timing, cost to build, and cash operating and full operating costs. Hopefully, that is incrementally helpful, Lucas.
Lucas Charles Beaumont: That is great, thanks. And then maybe one on the cost side. How are you seeing any cost pressures flowing through the business from the current inflation environment? Is that impacting either potash or Trio, and how would you see that evolving as the year progresses? Lastly, is there any small residual impact left after the South Ranch sale—any trailing costs we should think about?
Kevin S. Crutchfield: Maybe hitting the last part of your question first, to the extent I understood it properly. We had an oilfield services segment when we had South Ranch. We will still have some oilfield services activity, but that will get subsumed into the Other segment, and we will discontinue the oilfield services segment. In terms of clean-up post deal, I think it is pretty clean and you are not going to see any sort of tail effects permeating through the P&L or the balance sheet after the sale was concluded. Very minimal costs left behind that will be absorbed into the other parts of the business. On the cost question, yes, we are seeing pressures, but nothing I would characterize as material. Fuel is the biggest nemesis and it is highly volatile—it is bouncing all over the place. We have some natural gas exposure; over time that has actually been pretty well contained given the winter risk of a potential spike. Beyond that, we are not seeing anything material.
Rick Kim: I agree with Kevin. One thing that is important to call out is while we do see fluctuations in fuel, the nature of our mining processes means we are probably not as impacted or exposed to those fuel fluctuations as traditional surface or underground miners. Our solution mining process does insulate us a bit from that.
Operator: Your next question comes from the line of Justin Pellegrino from Morgan Stanley, on behalf of Vincent Andrews. Please go ahead.
Justin Pellegrino: Thanks. I just wanted to double click on a couple of items. First, on capital allocation, in the meantime, should we expect the cash to generate some interest income on your P&L?
Kevin S. Crutchfield: Yes, it will. Those cash balances are placed in very safe federal types of securities, so you will see some interest income start to leak through the P&L as we move ahead. We built up a pretty hefty balance as of the end of the first quarter. Clearly, the incremental $62 million from the ranch transaction came in after the end of the quarter, and we have built some additional cash too. I think current cash balance stands on the order of $170 million or so, so you will definitely start to see some interest flow through.
Justin Pellegrino: Perfect, thank you. And then one more on COGS for the rest of the year. Can you give us some cadence for COGS per ton in potash throughout the balance of the year? I know the press release mentioned some higher-cost mix in production toward higher-cost sites.
Chris Engold: Yes. Justin, typically, COGS will fluctuate throughout the year, especially in our solar sites, largely due to production volumes. We are finishing up our harvest season here within the next few weeks, and each of the sites will go into their summer shutdown. That does have an impact on the COGS that we will report for the next two quarters, or we anticipate seeing that. Once we get later in the year, we expect to see the operational efficiencies that we have talked about start to materialize, in both production and cost. Especially in the latter half of the year, we will start to see those materialize.
Justin Pellegrino: Great. Thank you. That is all the questions I had.
Operator: Your next question comes from the line of Jason M. Ursaner from Bumbershoot Holdings. Please go ahead.
Jason M. Ursaner: Good afternoon. Thanks for taking my questions. Congrats on the quarter and the sale. I have asked you about capital allocation pretty much every quarter since you joined. I appreciate the answers to Lucas. I am not going to hammer too much on it, but you said the cash balance as of April is around $170 million?
Kevin S. Crutchfield: Correct. Plus or minus.
Jason M. Ursaner: Any rationale why you did not include it in the press release for this quarter, given you have included that month-end cash balance in prior quarters?
Kevin S. Crutchfield: That is a fair question. The press release pertains to the first quarter, and the deal on the ranch did not close until the day after the first quarter. Technically, we took the view that we were going to discuss everything inside the first quarter. Perhaps it would have made sense to address cash on hand and liquidity more poignantly in the press release, but we were not trying to hide from it—we were just focused on the quarter.
Jason M. Ursaner: And just any update on the XTO/Exxon permitting process—where the BLM stands with that?
Kevin S. Crutchfield: I am sorry, we actually do not have any information that is useful. We see what is going on in that part of the world where we operate—it is super busy, lots of activity—but we do not have any insights as to Exxon's near-term plans. We continue to be bullish on their Big Eddy development process, and it is going to come; we just do not know exactly when.
Jason M. Ursaner: That is it for me. Appreciate all the color you gave on the capital allocation side.
Kevin S. Crutchfield: Thank you, Jason.
Operator: A reminder, if you would like to ask a question, please press star then 1 on your telephone keypad. At this time, there are no further questions. I would like to turn the conference back over to Kevin S. Crutchfield for any closing remarks.
Kevin S. Crutchfield: I would like to give one final thank you today before we conclude to our team here in Denver and our teams in Utah and New Mexico for their hard work and dedication over the last quarter and, frankly, the last couple of years. And to those of you who attended the call today, thank you for joining, and we look forward to keeping you posted in the future. Thank you, everybody. Have a great day.
Operator: This concludes today's conference call. Thank you for participating, and have a pleasant day. You may now disconnect your lines.