Intrepid Potash forecasts quarterly Trio production of 70,000–75,000 tons for 2026 as mining efficiencies advance

Earnings Call Insights: Intrepid Potash (IPI) Q3 2025

MANAGEMENT VIEW

* CEO Kevin Crutchfield shared that "Intrepid sustained its strong financial performance in the third quarter. This was highlighted by a net income of $3.7 million and adjusted EBITDA of $12 million, which compares to a net loss of $1.8 million and adjusted EBITDA of $10 million last year." Crutchfield emphasized that year-to-date adjusted EBITDA of $45 million represents the best start since 2015, outside 2022's record pricing.
* Higher pricing in Potash and Trio, along with improved production, drove results. "Our Potash cost of goods sold improved by 9% to $327 per ton, while in Trio, the same figure improved by 15% to $238 per ton," said Crutchfield. He pointed to consistently exceeding Trio production expectations and projected continued performance into 2026.
* Crutchfield highlighted market improvements, noting, "The U.S. agriculture landscape is certainly looking better, which is also evidenced by corn and soybean futures, both now being up by 15% since August lows." He expects balanced global potash supply and demand, with pricing support through at least mid-2027.
* On operations, Crutchfield reported ongoing permitting for the AMAX Cavern at the HB facility, expecting permitting efforts to wrap up in Q1 2026. For Trio, he announced the coming delivery of another continuous miner in January 2026 and forecasted, "our quarterly Trio production will be in the range of 70,000 to 75,000 tons for 2026."
* CFO Matt Preston stated, "Our Q3 average net realized sales price for potash totaled $381 per ton as we fully capture the approximately $60 per ton increase for sales into agriculture markets compared to the first quarter." Preston also highlighted a Q3 segment gross margin of $6.3 million for potash, $2.2 million higher year-over-year.

OUTLOOK

* Preston provided Q4 potash guidance: "we expect our sales volumes to be between 50,000 to 60,000 tons at an average net realized sales price in the range of $385 to $395 per ton."
* For Trio, Preston said, "we expect our fourth quarter sales volumes to be between 80,000 to 90,000 tons at an average net realized sales price in the range of $372 to $382 per ton."
* Crutchfield maintained that operational improvements and higher production are expected to drive another year of record Trio sales volumes, with pricing close to parity with potash.
* No comparison to analyst estimates was provided due to lack of explicit data.

FINANCIAL RESULTS

* Q3 potash sales volumes totaled 62,000 tons, with production at 41,000 tons. Trio sales volumes were 36,000 tons at an average realized sales price of $402 per ton. Trio COGS per ton was $257 in Q3, compared to $272 last year and $235 last quarter.
* Trio's Q3 gross margin was $4.4 million, up by $4 million year-over-year. Year-to-date, Trio gross margin reached approximately $23 million.
* Oilfield Solutions segment saw a decline in water sales and activity, impacting gross margin, which was noted as significantly lower due to last year's record frac job not repeating. A strategic land sale on South Ranch generated a gain of $2.2 million.
* The company reported a debt-free balance sheet and approximately $74 million in cash.
* Capital spend for 2025 is expected to be $30 million to $34 million, including $5 million related to the HB AMAX Cavern.

Q&A

* Justin Pellegrino, Morgan Stanley, asked about AMAX Cavern CapEx and capital allocation. Preston clarified, "the capital spend...will really just kind of like I said, I mean, be over a couple of years." Crutchfield added, "What we're really aimed at doing is continuing to reinvest in these core assets...to establish a position of resiliency, consistency, predictability."
* Lucas Beaumont, UBS, inquired about demand destruction and order books. Zachry Adams responded, "order book looks really strong on [Trio], and we're really fully committed for fourth quarter at this point...potash side, a similar story."
* Beaumont asked about potash cost absorption with lower volumes. Preston replied, "we'll start to see, all else equal, some higher cost per ton here in the first quarter...probably 5% to 7% increase for the full year cost per ton for potash compared to '25."
* Beaumont followed up on Oilfield Services outlook. Preston said, "we certainly expect it to be down a bit compared to what we saw in the first half of the year...we see still a slower water environment here in the fourth quarter and likely into the first part of '26."
* Jason Ursaner, Bumbershoot Holdings, questioned next steps for structural profitability and capital allocation. Crutchfield replied, "we're still not pleased with where we are. We think there's more work to be done, and we're going to continue that work...once we feel reasonably satisfied...then we can start to think about where we go from here."

SENTIMENT ANALYSIS

* Analysts posed probing questions around capital allocation, cost absorption, and segment outlooks, reflecting a neutral to slightly cautious tone regarding production and cash deployment.
* Management's prepared remarks were confident, focusing on operational improvements and market resilience. During Q&A, responses were measured, occasionally referencing ongoing challenges and the need for further progress, as seen in Crutchfield's statement, "we're still not pleased with where we are."
* Compared to last quarter, the tone remains constructive but acknowledges ongoing work, while analysts continue to press for clarity on long-term strategy and capital returns.

QUARTER-OVER-QUARTER COMPARISON

* Year-to-date adjusted EBITDA increased to $45 million from $16.4 million in the previous quarter, and net income shifted from a prior net loss to a positive result.
* Trio segment remains a bright spot, with improved production, pricing, and gross margins compared to Q2.
* Potash production decreased in Q3 due to delayed HB production, whereas Q2 showed higher volumes. Potash cost of goods sold per ton increased sequentially.
* Capital allocation questions intensified as cash accumulated and near-term CapEx plans were clarified. Analyst focus remained on structural profitability and cost absorption given lower potash production guidance.
* Management confidence is steady, but there is greater emphasis on the need for further operational improvements and careful capital deployment.

RISKS AND CONCERNS

* Ongoing permitting and evaluation for the HB AMAX Cavern introduces timeline uncertainty, with permitting expected to conclude in Q1 2026.
* Potash production in 2026 is guided lower due to above-average rain and AMAX cavern issues, leading to potential cost increases per ton.
* Oilfield Solutions segment faces lower water sales and margin pressure due to reduced oilfield activity.
* Management is focused on reinvesting in core assets and postponing capital returns until achieving consistent, predictable free cash flow.

FINAL TAKEAWAY

Intrepid Potash delivered solid financial results in Q3 2025, supported by higher realized pricing, improved production efficiency, and strong performance in the Trio segment. Management is maintaining a focus on operational execution and margin expansion, while the company navigates lower potash production guidance for 2026 and continues to invest in core assets. While capital returns remain a future consideration, the company emphasizes further work is needed to achieve structural reliability and predictable cash flows before shifting priorities.

Read the full Earnings Call Transcript [https://seekingalpha.com/symbol/ipi/earnings/transcripts]

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* Intrepid Potash, Inc. (IPI) Q3 2025 Earnings Call Transcript [https://seekingalpha.com/article/4839449-intrepid-potash-inc-ipi-q3-2025-earnings-call-transcript]
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