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Intrepid Potash, Inc. (IPI)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 sales were $55.8M, gross margin $7.3M, and adjusted EBITDA $8.6M; GAAP net loss ballooned to $207.0M due to a $199.0M non-cash valuation allowance against deferred tax assets and incremental impairments, masking an operationally stronger back half of the year .
  • Trio® delivered a notable turnaround: Q4 sales rose to $23.5M with positive gross margin of $2.8M, and FY 2024 set a company record at 254k tons sold; Trio pricing is now above potash for the first time since 2016, supporting margin improvement .
  • Potash production inflected higher: Q4 production of 117k tons (+48% YoY) drove unit cost improvements despite lower realized prices; management guided Q1 2025 potash sales volumes of 95–105k tons at $305–$315/ton and Trio volumes of 100–110k tons at $340–$350/ton .
  • Liquidity strengthened: year-end cash and equivalents were $41.3M with no revolver borrowings; capex is guided to $36–$42M for 2025, focused on sustaining capital and the ~$4.5M AMAX test well at HB (a potential production expansion lever) .
  • Stock narrative catalysts: new CEO Kevin Crutchfield installed (Dec 2024), operational execution in potash asset revitalization, potential pricing support from global supply balance and tariff headlines, and optionality from a prospective early $50M XTO copper payment that could reopen capital return discussions .

What Went Well and What Went Wrong

What Went Well

  • Trio® margin recovery and record sales volumes: “Strong demand for Trio led to company record sales volumes of 254,000 tons and price increases… with Trio pricing currently higher than potash for the first time since 2016” .
  • Potash production and unit economics improved: Q4 potash production rose to 117k tons (+48% YoY), underpinning lower per-ton costs and better gross margin despite price pressure .
  • Operational delivery on revitalization projects: Phase Two HB injection pipeline commissioned, injection rates averaging ~1,900 GPM with capability to ~2,000 GPM, supporting a ~2.0x injection-to-extraction ratio—a foundation for sustaining higher production .

What Went Wrong

  • Massive non-cash tax valuation allowance drove headline GAAP loss: $199.0M allowance plus impairments ($6.4M Intrepid South sand/oilfield equipment; $1.2M East facility) led to Q4 GAAP net loss of $207.0M, overshadowing operational gains .
  • Potash pricing headwind: average net realized price/ton fell 20% YoY in Q4 to $347, offsetting volume gains; FY potash price/ton was down 19% to $377 .
  • Oilfield solutions Q4 sales dropped on timing: segment sales fell to $3.5M in Q4 vs $7.0M in Q4 2023; management reiterated timing variability tied to completion activity at Intrepid South .

Financial Results

MetricQ4 2023Q3 2024Q4 2024
Revenue ($USD Millions)$56.663 $57.549 $55.803
Gross Margin ($USD Millions)$4.621 $7.732 $7.292
Net Loss ($USD Millions)$(37.288) $(1.833) $(207.049)
Diluted EPS ($)$(2.91) $(0.14) $(16.04)
Adjusted EBITDA ($USD Millions, Non-GAAP)$7.141 $9.956 $8.568

Segment revenue and margin detail

SegmentQ4 2023 Sales ($M)Q3 2024 Sales ($M)Q4 2024 Sales ($M)Q4 2023 Gross Margin ($M)Q3 2024 Gross Margin ($M)Q4 2024 Gross Margin ($M)
Potash$28.557 $28.356 $28.867 $4.333 $4.066 $4.468
Trio®$21.130 $18.928 $23.490 $(2.378) $0.604 $2.791
Oilfield Solutions$7.045 $10.324 $3.499 $2.666 $3.062 $0.033
Total$56.663 $57.549 $55.803 $4.621 $7.732 $7.292

KPIs (production, sales volumes, realized pricing)

KPIQ4 2023Q3 2024Q4 2024
Potash production (k tons)79 51 117
Potash sales volume (k tons)45 54 57
Potash avg net realized price ($/ton)$431 $356 $347
Trio® production (k tons)57 62 67
Trio® sales volume (k tons)49 45 54
Trio® avg net realized price ($/ton)$292 $312 $330

Non-GAAP adjustments (context)

  • Adjusted net loss in Q4 2024 improved to $(1.399)M vs $(5.230)M in Q4 2023; key add-backs include the $199.026M tax valuation allowance, impairments, and loss on asset sales .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Potash sales volume (k tons)Q1 2025None disclosed for Q1 2025 in prior quarter95–105 New
Potash avg net realized price ($/ton)Q1 2025None disclosed for Q1 2025 in prior quarter$305–$315 New
Trio® sales volume (k tons)Q1 2025None disclosed for Q1 2025 in prior quarter100–110 New
Trio® avg net realized price ($/ton)Q1 2025None disclosed for Q1 2025 in prior quarter$340–$350 New
Capex ($M)FY 2025None disclosed previously for FY 2025 range$36–$42 New
HB AMAX test well ($M)FY 2025None previously~$4.5 New
Potash production trajectoryFY 2025280–300k (relatively flat) Roughly flat vs FY 2024 (pull-forward of ~15k tons) Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 & Q3 2024)Current Period (Q4 2024)Trend
Potash asset revitalization and HB injection pipelineIP30B extraction completed; Phase Two pigging system commissioning planned; focus on brine grades, residence time, injection rate targets Phase Two commissioned; injection ~1,900 GPM, capability ~2,000 GPM; brine ratio ~2.0x Positive execution momentum
Potash pricing and demandMid-cycle pricing floor; global demand stable; summer fill response supportive Prices firming on balanced supply and strong spring demand; recent global price increases likely realized in Q2 volumes Improving price backdrop
Trio® operations and pricingCost reductions at East; strong spring volumes; net realized price ~$314/ton Q4 margin positive; Trio pricing above potash for first time since 2016 Structural margin improvement
Oilfield solutions timing variabilityQ2 and Q3 strength from large frac at South; run-rate guided to first-half baseline absent big fracs Q4 slowdown on timing; demand remained strong; margins up for FY Volatile, event-driven
Tariffs/macro headlinesBalanced global market; China/India settlements supportive Canadian tariffs discussed; impact uncertain; Q2 likely to reflect price moves Potential upside tailwind
Capital allocation and XTO copper paymentsClean balance sheet; cautious approach until production/FCF durable Early receipt of guaranteed $50M from XTO could catalyze capital return discussions Optionality
Leadership and strategic focusCEO search ongoing; CFO acting PE officer New CEO Kevin Crutchfield appointed (Dec 2024); focus on core assets, discipline Clarity and continuity
Lithium project (Wendover)Partner review ongoing; longer-term timeline Continued progress noted (longer-term project) Steady, long-dated

Management Commentary

  • “Our 2024 potash production increased by over 30% compared to 2023 and our Trio® sales volumes of 254 thousand tons was a company record… Even with the backdrop of lower potash prices, our focus on our core business helped drive better margins in the second half of the year” — CEO Kevin Crutchfield .
  • “In the fourth quarter, Intrepid generated adjusted EBITDA of $8.6 million… improvements were primarily driven by higher production and the corresponding benefit to our unit economics as well as from strong operational execution and cost discipline” — CEO Kevin Crutchfield .
  • “We expect to drill a sample well at our HB AMAX cavern in the first half of 2025… approximately $4.5 million related to the HB AMAX well” — CFO Matt Preston .
  • “We recorded a valuation allowance against the balance of our deferred tax assets at year-end” — CFO Matt Preston .

Q&A Highlights

  • Potash pricing outlook: management sees firm prices into spring on balanced supply and strong regional demand; Q1 mostly contracted via winter fill, with recent price increases expected to be realized more in Q2 .
  • Canadian tariff discussion: too early to size specific impact; any benefit would likely flow into Q2 given Q1 contracting status .
  • Unit cost trajectory: potash COGS/ton improved meaningfully in H2 2024; further step-down expected as Wendover benefits from new primary pond later in 2025 .
  • Oilfield solutions: run-rate should be thought of on first-half baseline absent large completion events; visibility limited on timing of big water sales .
  • Capital return: priority is sustaining higher production and consistency of free cash flow; early $50M XTO payment could catalyze future board discussions .

Estimates Context

  • Wall Street consensus (S&P Global) was unavailable at time of request due to provider limits; therefore, we cannot assess a beat/miss vs Q4 2024 consensus for revenue, EPS, or EBITDA at this time. Values from S&P Global were unavailable.

Key Takeaways for Investors

  • Trio® margin recovery and sustained pricing premium vs potash is a structural positive for mix and profitability into 2025 .
  • Potash production execution is the core driver: Phase Two HB injection and AMAX development underpin further unit cost improvements; watch for Q2 pricing realization and Wendover pond benefits in H2 2025 .
  • Headline GAAP loss was driven by non-cash tax valuation allowance and impairments; underlying adjusted EBITDA remained positive and improved YoY in H2—focus on cash generation and unit economics rather than GAAP optics .
  • Near-term set-up: Q1 2025 guidance implies strong volumes at lower potash pricing; monitor tariff developments and global supply dynamics that could support domestic pricing into Q2 .
  • Liquidity/capex discipline: $41.3M cash, no revolver draws; capex $36–$42M focused on sustaining assets and HB AMAX test—balanced approach supports production durability .
  • Optional catalysts: potential early $50M XTO payment, strategic interest in Intrepid South acreage, and longer-term lithium project partnering .
  • Leadership continuity with new CEO Kevin Crutchfield brings relevant minerals and brine operations experience; expect continued focus on core asset optimization and disciplined capital allocation .