INTREPID POTASH, INC. Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Intrepid Potash, Inc. (IPI) filed its quarterly report for the period ended March 31, 2025. The company reported a net loss of $1.4 million, or $0.10 per share, compared to a net loss of $2.1 million, or $0.16 per share, in the same period last year. Revenue decreased 12% to $34.1 million due to lower sales volumes and prices. The company’s cash and cash equivalents decreased to $14.3 million from $24.1 million at the end of the previous quarter. IPI’s total assets decreased to $143.1 million from $164.1 million at the end of the previous quarter, primarily due to the decrease in cash and cash equivalents. The company’s total liabilities increased to $74.1 million from $63.1 million at the end of the previous quarter, primarily due to an increase in accounts payable and accrued expenses.
Company Overview
Intrepid Potash, Inc. is a diversified mineral company that produces and sells potassium, magnesium, sulfur, salt, and water products essential for agriculture, animal feed, and the oil and gas industry. The company is the only U.S. producer of muriate of potash, a key nutrient for crop development. Intrepid also produces a specialty fertilizer called Trio® that delivers potassium, magnesium, and sulfate in a single particle. Additionally, the company provides water, magnesium chloride, brine, and various oilfield products and services.
Intrepid’s operations are located entirely in the continental U.S., with potash production from three solution mining facilities and Trio® production from a conventional underground mine. The company also has assets in southeast New Mexico that generate revenue from oilfield-related products and services.
Intrepid has three business segments: potash, Trio®, and oilfield solutions. Byproducts from the potash and Trio® operations are accounted for in their respective segments.
Financial Performance
For the three months ended March 31, 2025, Intrepid reported the following financial results:
| Metric | Q1 2025 | Q1 2024 |
|---|---|---|
| Total Sales | $97,760,000 | $79,287,000 |
| Cost of Goods Sold | $60,842,000 | $56,431,000 |
| Gross Margin | $14,602,000 | $6,434,000 |
| Net Income (Loss) | $4,606,000 | $(3,130,000) |
| Average Net Realized Sales Price per Ton - Potash | $312 | $395 |
| Average Net Realized Sales Price per Ton - Trio® | $345 | $300 |
Intrepid’s total sales increased 23% in Q1 2025 compared to Q1 2024, driven by a 37% increase in Trio® segment sales and a 16% increase in potash segment sales. The Trio® segment benefited from a 21% increase in sales volumes and a 15% increase in the average net realized sales price per ton. The potash segment saw a 39% increase in sales volumes, partially offset by a 21% decrease in the average net realized sales price per ton.
The company’s gross margin improved significantly in Q1 2025, increasing from $6.4 million to $14.6 million. This was due to the higher sales volumes and lower per-ton cost of goods sold for both potash and Trio®. Intrepid’s potash production costs per ton decreased throughout 2024, leading to a lower carrying cost per ton for finished goods inventory in 2025. The Trio® segment also benefited from improved production rates and lower labor and maintenance costs.
Intrepid generated net income of $4.6 million in Q1 2025, compared to a net loss of $3.1 million in the same period of 2024. The improvement was driven by the factors mentioned above, partially offset by $0.7 million in impairment charges related to Trio® segment assets.
Segment Performance
Potash Segment The potash segment’s sales increased 16% in Q1 2025 compared to Q1 2024, due to a 39% increase in sales volumes, partially offset by a 21% decrease in the average net realized sales price per ton. The higher sales volumes were a result of increased production in 2024, which provided more tons available for sale. However, potash prices declined at the start of 2025 due to improved global production and supply.
Potash segment cost of goods sold increased 25% in Q1 2025, in line with the 39% increase in sales volumes. The per-ton cost of goods sold decreased, however, due to the higher production volumes in 2024 and 2025, which lowered the weighted average carrying cost of inventory. Intrepid also recorded $1.3 million in lower-of-cost-or-net-realizable-value inventory adjustments in the potash segment during Q1 2025, compared to $0.5 million in the prior-year period.
The potash segment’s gross margin decreased from $5.6 million in Q1 2024 to $2.5 million in Q1 2025, primarily due to the lower average net realized sales price per ton.
Trio® Segment The Trio® segment’s sales increased 37% in Q1 2025 compared to Q1 2024, driven by a 21% increase in sales volumes and a 15% increase in the average net realized sales price per ton. The higher sales volumes were due to increased production in 2024 and early 2025, while the price increase was supported by stronger demand for sulfate and an acreage shift to corn in traditional Trio® markets.
Trio® segment cost of goods sold decreased 5% in Q1 2025, despite the 21% increase in sales volumes. This was due to improved production rates throughout 2024, which lowered the weighted average carrying cost per ton, as well as decreases in production labor and maintenance costs.
The Trio® segment generated a gross margin of $10.4 million in Q1 2025, compared to a gross deficit of $1.1 million in the same period of 2024. This significant improvement was driven by the higher sales and lower per-ton cost of goods sold.
Intrepid recorded $0.7 million in impairment charges related to Trio® segment assets in Q1 2025, as the company continues to evaluate the fair value of these assets following the impairment recorded in 2023.
Oilfield Solutions Segment The oilfield solutions segment’s sales decreased 17% in Q1 2025 compared to Q1 2024, due to a $0.7 million decrease in water sales and a $0.3 million decrease in surface use and easement revenues. The reduced water sales were attributed to lower oilfield activity on and around Intrepid’s Intrepid South property.
Oilfield solutions segment cost of goods sold decreased 18% in Q1 2025, primarily due to the lower water sales volumes.
The oilfield solutions segment’s gross margin decreased from $2.0 million in Q1 2024 to $1.7 million in Q1 2025, reflecting the lower sales.
Strengths and Weaknesses
Strengths:
- Diversified product portfolio: Intrepid’s ability to produce and sell potash, Trio®, water, and other oilfield products provides revenue diversification and helps mitigate risks associated with any single product line.
- Improved production and cost efficiencies: The company’s increased production volumes in 2024 and early 2025 have led to lower per-ton production costs, boosting profitability.
- Strong demand for Trio®: Increased demand for Trio® due to tightening sulfate markets and an acreage shift to corn has allowed Intrepid to realize higher prices and sales volumes for this specialty fertilizer.
Weaknesses:
- Potash pricing pressure: Intrepid has faced a 21% decrease in the average net realized sales price per ton for potash, driven by improved global production and supply.
- Reliance on oilfield activity: The company’s oilfield solutions segment is dependent on drilling activity in the Permian Basin, which can be volatile and subject to industry cycles.
- Impairment charges: Intrepid continues to record impairment charges related to its Trio® segment assets, reflecting the ongoing challenges in that business line.
Outlook and Future Prospects
Intrepid’s outlook for the remainder of 2025 appears cautiously optimistic, with several factors that could influence the company’s performance:
Potash Pricing and Demand
- Potash prices have trended upward since the winter-fill agricultural program in early 2025, supported by strong early spring demand, tariff uncertainty, tightening global supply, and favorable crop commodity prices.
- However, Intrepid’s potash pricing and sales volumes remain subject to factors such as weather, planting decisions, rail car availability, commodity price changes, and the availability of other potassium products.
Trio® Pricing and Demand
- Trio® demand has been strong, driven by a tightening sulfate market, supportive agricultural commodity prices, and an acreage shift to corn in traditional Trio® markets.
- Intrepid has been able to implement price increases for Trio® in early 2025, which it expects to realize in the second quarter.
- The company’s ability to maintain these higher Trio® prices may be affected by weather, planting decisions, rail car availability, commodity price changes, and the availability of other potassium products.
Water Sales and Oilfield Solutions
- Water sales and other oilfield-related revenues have declined due to reduced drilling activity in the Permian Basin, a trend that may continue to impact this segment.
- Intrepid is pursuing opportunities to supply or source water for additional fracking operations on its Intrepid South property, but the timing of these opportunities is uncertain.
Strategic Initiatives
- Intrepid is focused on expanding its solar solution mining facilities, including the planned drilling of a sample well into the AMAX Cavern at its HB mine, which is expected to become an expansion area for the original HB caverns.
- The company continues to evaluate the fair value of its Trio® segment assets and may need to record additional impairment charges if the carrying value exceeds the estimated fair value.
Overall, Intrepid’s diversified product portfolio, improved production efficiencies, and strong Trio® demand provide a solid foundation for the company’s performance. However, the company remains subject to risks related to potash pricing, oilfield activity, and the ongoing challenges in its Trio® business. Intrepid’s ability to navigate these factors and execute on its strategic initiatives will be crucial in determining its future prospects.
