~~top~~

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒

Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the Quarterly Period Ended

~~September 30, 2022~~March 31, 2023

☐

Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from ______ to ______

Commission File Number: 001-34025

INTREPID POTASH, INC.

(Exact Name of Registrant as Specified in its Charter)


Delaware		26-1501877
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
707 17th Street, Suite 4200
Denver,	Colorado	80202
(Address of principal executive offices)		(Zip Code)

(303) 296-3006

(Registrant’s telephone number, including area code)



(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act

Title of each class

Trading symbol

Name of each exchange on which registered

Common Stock, par value $0.001 per share

IPI

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files.) Yes ☒No☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☐

Accelerated filer

☒

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐


If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes

☐

☒

As of ~~October 31, 2022,~~April 30, 2023, the registrant had outstanding ~~13,488,946~~13,158,552 shares of common stock, par value $0.001 per share.

Table of Contents

INTREPID POTASH, INC.

TABLE OF CONTENTS


						Page
			PART I - FINANCIAL INFORMATION			1
			ITEM 1. Condensed Consolidated Financial Statements (Unaudited)			1
			Condensed Consolidated Balance Sheets			1
			Condensed Consolidated Statements of Operations			2
			Condensed Consolidated Statements of Stockholders' Equity			3
			Condensed Consolidated Statements of Cash Flows			4
			Notes to Condensed Consolidated Financial Statements			6
			ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations			2119
			ITEM 3. Quantitative and Qualitative Disclosures About Market Risk			4434
			ITEM 4. Controls and Procedures			4434
			PART II - OTHER INFORMATION			4535
			ITEM 1. Legal Proceedings			4535
			ITEM 1A. Risk Factors			4636
			ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds			4737
			ITEM 3. Defaults Upon Senior Securities			4737
			ITEM 4. Mine Safety Disclosures			4737
			ITEM 5. Other Information			4737
			ITEM 6. Exhibits			4838
			Signatures			4939

Table of Contents

PART I - FINANCIAL INFORMATION

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

INTREPID POTASH, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share amounts)


		September 30,		December 31,			March 31,		December 31,
		2022		2021			2023		2022
ASSETS	ASSETS					ASSETS
Cash and cash equivalents	Cash and cash equivalents	$	49,209	$	36,452	Cash and cash equivalents	$	10,451	$	18,514
Short-term investments	Short-term investments	4,970		—		Short-term investments	4,960		5,959
Accounts receivable:	Accounts receivable:					Accounts receivable:
Trade, net	Trade, net	38,229		35,409		Trade, net	39,211		26,737
Other receivables, net	Other receivables, net	2,124		989		Other receivables, net	854		790

Inventory, net	Inventory, net	96,913		78,856		Inventory, net	107,174		114,816
Prepaid expenses and other current assets	Prepaid expenses and other current assets	6,558		5,144		Prepaid expenses and other current assets	4,432		4,863
Total current assets	Total current assets	198,003		156,850		Total current assets	167,082		171,679

Property, plant, equipment, and mineral properties, net	Property, plant, equipment, and mineral properties, net	358,729		341,117		Property, plant, equipment, and mineral properties, net	387,851		375,630

Water rights	Water rights	19,184		19,184		Water rights	19,184		19,184
Long-term parts inventory, net	Long-term parts inventory, net	25,398		29,251		Long-term parts inventory, net	24,820		24,823
Long-term investments	Long-term investments	11,696		4,576		Long-term investments	10,824		9,841

Other assets, net	Other assets, net	7,377		6,842		Other assets, net	7,138		7,294
Non-current deferred tax asset, net	Non-current deferred tax asset, net	187,527		209,075		Non-current deferred tax asset, net	184,091		185,752
Total Assets	Total Assets	$	807,914	$	766,895	Total Assets	$	800,990	$	794,203
LIABILITIES AND STOCKHOLDERS' EQUITY	LIABILITIES AND STOCKHOLDERS' EQUITY					LIABILITIES AND STOCKHOLDERS' EQUITY

Accounts payable	Accounts payable	$	14,114	$	9,068	Accounts payable	$	14,858	$	18,645

Accrued liabilities	Accrued liabilities	22,996		22,938		Accrued liabilities	14,368		16,212
Accrued employee compensation and benefits	Accrued employee compensation and benefits	8,157		6,805		Accrued employee compensation and benefits	6,181		6,975

Other current liabilities	Other current liabilities	3,847		34,612		Other current liabilities	8,843		7,044
Total current liabilities	Total current liabilities	49,114		73,423		Total current liabilities	44,250		48,876

Advances on credit facility						Advances on credit facility	5,000		—

Asset retirement obligation, net of current portion	Asset retirement obligation, net of current portion	27,204		27,024		Asset retirement obligation, net of current portion	27,099		26,564
Operating lease liabilities	Operating lease liabilities	2,116		1,879		Operating lease liabilities	1,814		2,206
Finance lease liabilities						Finance lease liabilities	1,219		—
Other non-current liabilities	Other non-current liabilities	1,007		1,166		Other non-current liabilities	1,315		1,479
Total Liabilities	Total Liabilities	79,441		103,492		Total Liabilities	80,697		79,125
Commitments and Contingencies	Commitments and Contingencies					Commitments and Contingencies
Common stock, 0.001 par value; 40,000,000 shares authorized;	Common stock, 0.001 par value; 40,000,000 shares authorized;					Common stock, 0.001 par value; 40,000,000 shares authorized;
13,195,080 and 13,149,315 shares outstanding
at September 30, 2022, and December 31, 2021, respectively		13		13
12,759,990 and 12,687,822 shares outstanding						12,759,990 and 12,687,822 shares outstanding
at March 31, 2023, and December 31, 2022, respectively						at March 31, 2023, and December 31, 2022, respectively	13		13
Additional paid-in capital	Additional paid-in capital	658,860		659,147		Additional paid-in capital	661,323		660,614

Retained earnings	Retained earnings	72,481		4,243		Retained earnings	80,969		76,463
Less treasury stock, at cost	Less treasury stock, at cost	(2,881)		—		Less treasury stock, at cost	(22,012)		(22,012)
Total Stockholders' Equity	Total Stockholders' Equity	728,473		663,403		Total Stockholders' Equity	720,293		715,078
Total Liabilities and Stockholders' Equity	Total Liabilities and Stockholders' Equity	$	807,914	$	766,895	Total Liabilities and Stockholders' Equity	$	800,990	$	794,203

See accompanying notes to these condensed consolidated financial statements.

Table of Contents

INTREPID POTASH, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2022		2021		2022		2021			2023		2022
Sales	Sales	$	74,752	$	59,153	$	270,891	$	198,504	Sales	$	86,920	$	104,399
Less:	Less:									Less:
Freight costs	Freight costs	7,793		7,911		27,257		30,104		Freight costs	11,590		10,237
Warehousing and handling costs	Warehousing and handling costs	2,541		2,066		7,221		7,076		Warehousing and handling costs	2,733		2,476
Cost of goods sold	Cost of goods sold	37,648		34,974		120,656		123,815		Cost of goods sold	56,245		44,510

Costs associated with abnormal production		—		3,594		—		3,594

Gross Margin	Gross Margin	26,770		10,608		115,757		33,915		Gross Margin	16,352		47,176

Selling and administrative	Selling and administrative	8,551		5,890		22,558		18,293		Selling and administrative	8,858		6,789
Accretion of asset retirement obligation	Accretion of asset retirement obligation	491		441		1,471		1,323		Accretion of asset retirement obligation	535		490

Loss (gain) on sale of assets		10		5		1,176		(2,560)
Loss on sale of assets										Loss on sale of assets	200		100
Other operating expense (income)	Other operating expense (income)	264		192		1,239		(385)		Other operating expense (income)	1,385		(267)
Operating Income	Operating Income	17,454		4,080		89,313		17,244		Operating Income	5,374		40,064

Other Income (Expense)	Other Income (Expense)									Other Income (Expense)

Equity in earnings of unconsolidated entities	Equity in earnings of unconsolidated entities	766		—		766		—		Equity in earnings of unconsolidated entities	821		—
Interest expense, net	Interest expense, net	(28)		(82)		(85)		(1,426)		Interest expense, net	—		(33)
Interest income	Interest income	77		—		94		—		Interest income	85		—
Other income	Other income	(258)		25		281		42		Other income	13		530
Gain on extinguishment of debt		—		—		—		10,113

Income Before Income Taxes	Income Before Income Taxes	18,011		4,023		90,369		25,973		Income Before Income Taxes	6,293		40,561

Income Tax Expense	Income Tax Expense	(4,903)		—		(22,131)		—		Income Tax Expense	(1,787)		(9,139)
Net Income	Net Income	$	13,108	$	4,023	$	68,238	$	25,973	Net Income	$	4,506	$	31,422

Weighted Average Shares Outstanding:	Weighted Average Shares Outstanding:									Weighted Average Shares Outstanding:
Basic	Basic	13,256		13,123		13,221		13,089		Basic	12,694		13,160
Diluted	Diluted	13,489		13,367		13,567		13,352		Diluted	12,875		13,595
Earnings Per Share:	Earnings Per Share:									Earnings Per Share:
Basic	Basic	$	0.99	$	0.31	$	5.16	$	1.98	Basic	$	0.35	$	2.39
Diluted	Diluted	$	0.97	$	0.30	$	5.03	$	1.95	Diluted	$	0.35	$	2.31

See accompanying notes to these condensed consolidated financial statements.

Table of Contents

INTREPID POTASH, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(In thousands, except share amounts)


																	Three-Month Period Ended March 31, 2023
																	Common Stock						Treasury Stock			Additional Paid-in Capital						Retained Earnings				Total Stockholders' Equity
																	Shares		Amount												Retained Earnings
Balance, December 31, 2022															Balance, December 31, 2022		12,687,822		$	13			$	(22,012)		$	660,614					$	76,463			$	715,078

Net income															Net income		—		—				—			—						4,506				4,506
Stock-based compensation															Stock-based compensation		—		—				—			1,746						—				1,746

Vesting of restricted common stock, net of common stock used to fund employee income tax withholding due upon vesting															Vesting of restricted common stock, net of common stock used to fund employee income tax withholding due upon vesting		72,168		—				—			(1,037)						—				(1,037)
Balance, March 31, 2023															Balance, March 31, 2023		12,759,990		$	13			$	(22,012)		$	661,323					$	80,969			$	720,293

		Nine-Month Period Ended September 30, 2022												Three-Month Period Ended March 31, 2022
		Common Stock			Treasury Stock		Additional Paid-in Capital			Retained Earnings		Total Stockholders' Equity					Common Stock						Treasury Stock			Additional Paid-in Capital						Retained Earnings				Total Stockholders' Equity
		Shares	Amount						Retained Earnings							Shares		Amount							Additional Paid-in Capital					Retained Earnings
Balance, December 31, 2021	Balance, December 31, 2021	13,149,315	$	13	$	—	$	659,147		$	4,243	$	663,403		Balance, December 31, 2021		13,149,315				$	—	$	659,147				$	4,243					$	663,403

Net income	Net income	—	—		—		—			68,238		68,238			Net income		—				—				—			—						31,422				31,422
Stock-based compensation	Stock-based compensation	—	—		—		3,965			—		3,965			Stock-based compensation		—		—				—			1,167						—				1,167
Exercise of stock options	Exercise of stock options	10,718	—		—		110			—		110			Exercise of stock options		8,727		—				—			90						—				90
Purchase of treasury stock		(70,733)	—		(2,881)		—			—		(2,881)
Vesting of restricted common stock, net of common stock used to fund employee income tax withholding due upon vesting	Vesting of restricted common stock, net of common stock used to fund employee income tax withholding due upon vesting	105,780	—		—		(4,362)			—		(4,362)			Vesting of restricted common stock, net of common stock used to fund employee income tax withholding due upon vesting		60,833		—				—			(2,814)						—				(2,814)
Balance, September 30, 2022		13,195,080	$	13	$	(2,881)	$	658,860		$	72,481	$	728,473

		Three-Month Period Ended September 30, 2022
		Common Stock			Treasury Stock		Additional Paid-in Capital			Retained Earnings		Total Stockholders' Equity
		Shares	Amount						Retained Earnings
Balance, June 30, 2022		13,265,813	$	13	$	—	$	657,453		$	59,373	$	716,839

Net income		—	—		—		—			13,108		13,108
Stock-based compensation		—	—		—		1,407			—		1,407
Purchase of treasury stock		(70,733)	—		(2,881)		—			—		(2,881)
Exercise of stock options		—	—		—		—			—		—
Vesting of restricted common stock, net of common stock used to fund employee income tax withholding due upon vesting		—	—		—		—			—		—
Balance, September 30, 2022		13,195,080	$	13	$	(2,881)	$	658,860		$	72,481	$	728,473

		Nine-Month Period Ended September 30, 2021
		Common Stock			Treasury Stock		Additional Paid-in Capital			Accumulated Deficit		Total Stockholders' Equity
		Shares	Amount						Accumulated Deficit
Balance, December 31, 2020		13,049,820	$	13	$	—	$	656,837		$	(245,591)	$	411,259

Net income		—	—		—		—			25,973		25,973
Stock-based compensation		—	—		—		2,289			—		2,289
Exercise of stock options		7,826	—		—		81			—		81
Vesting of restricted common stock, net of common stock used to fund employee income tax withholding due upon vesting		66,464	—		—		(382)			—		(382)
Balance, September 30, 2021		13,124,110	$	13	$	—	$	658,825		$	(219,618)	$	439,220

		Three-Month Period Ended September 30, 2021
		Common Stock			Treasury Stock		Additional Paid-in Capital			Accumulated Deficit		Total Stockholders' Equity
		Shares	Amount						Accumulated Deficit
Balance, June 30, 2021		13,121,087	$	13	$	—	$	658,163		$	(223,641)	$	434,535

Net income		—	—		—		—			4,023		4,023
Stock-based compensation		—	—		—		634			—		634
Exercise of stock options		2,913	—		—		30			—		30
Vesting of restricted common stock, net of common stock used to fund employee income tax withholding due upon vesting		110	—		—		(2)			—		(2)
Balance, September 30, 2021		13,124,110	$	13	$	—	$	658,825		$	(219,618)	$	439,220
Balance, March 31, 2022															Balance, March 31, 2022		13,218,875		$	13			$	—		$	657,590					$	35,665			$	693,268

See accompanying notes to these condensed consolidated financial statements.

Table of Contents


INTREPID POTASH, INC.	INTREPID POTASH, INC.					INTREPID POTASH, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS	CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS					CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)	(In thousands)					(In thousands)
		Nine Months Ended September 30,					Three Months Ended March 31,
		2022		2021			2023		2022
Cash Flows from Operating Activities:	Cash Flows from Operating Activities:					Cash Flows from Operating Activities:
Net income	Net income	$	68,238	$	25,973	Net income	$	4,506	$	31,422
Adjustments to reconcile net income to net cash provided by operating activities:	Adjustments to reconcile net income to net cash provided by operating activities:					Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation, depletion and amortization	Depreciation, depletion and amortization	25,285		26,509		Depreciation, depletion and amortization	9,292		8,898
Accretion of asset retirement obligation	Accretion of asset retirement obligation	1,471		1,323		Accretion of asset retirement obligation	535		490
Amortization of deferred financing costs	Amortization of deferred financing costs	187		254		Amortization of deferred financing costs	75		60
Amortization of intangible assets	Amortization of intangible assets	241		241		Amortization of intangible assets	80		80
Stock-based compensation	Stock-based compensation	3,965		2,289		Stock-based compensation	1,746		1,167

Loss (gain) on disposal of assets		1,176		(2,560)
Loss on disposal of assets						Loss on disposal of assets	200		100

Gain on extinguishment of debt		—		(10,113)

Allowance for parts inventory obsolescence		1,750		—

Equity in earnings of unconsolidated entities	Equity in earnings of unconsolidated entities	(766)		—		Equity in earnings of unconsolidated entities	(821)		—

Distribution of earnings from unconsolidated entities						Distribution of earnings from unconsolidated entities	320		—
Changes in operating assets and liabilities:	Changes in operating assets and liabilities:					Changes in operating assets and liabilities:
Trade accounts receivable, net	Trade accounts receivable, net	(2,820)		(9,936)		Trade accounts receivable, net	(12,474)		(16,199)
Other receivables, net	Other receivables, net	(1,111)		(1,872)		Other receivables, net	(92)		(384)

Inventory, net	Inventory, net	(15,954)		11,678		Inventory, net	7,645		847
Prepaid expenses and other current assets	Prepaid expenses and other current assets	(1,504)		(1,148)		Prepaid expenses and other current assets	250		(76)
Deferred tax assets, net	Deferred tax assets, net	21,548		—		Deferred tax assets, net	1,661		9,000
Accounts payable, accrued liabilities, and accrued employee compensation and benefits	Accounts payable, accrued liabilities, and accrued employee compensation and benefits	999		15,254		Accounts payable, accrued liabilities, and accrued employee compensation and benefits	(5,305)		(862)

Operating lease liabilities	Operating lease liabilities	(1,619)		(1,616)		Operating lease liabilities	(401)		(795)
Other liabilities	Other liabilities	(31,974)		3,147		Other liabilities	1,232		362
Net cash provided by operating activities	Net cash provided by operating activities	69,112		59,423		Net cash provided by operating activities	8,449		34,110

Cash Flows from Investing Activities:	Cash Flows from Investing Activities:					Cash Flows from Investing Activities:
Additions to property, plant, equipment, mineral properties and other assets	Additions to property, plant, equipment, mineral properties and other assets	(37,100)		(12,437)		Additions to property, plant, equipment, mineral properties and other assets	(21,039)		(6,795)

Purchase of investments	Purchase of investments	(12,864)		—		Purchase of investments	(956)		(903)
Proceeds from sale of assets	Proceeds from sale of assets	46		6,042		Proceeds from sale of assets	65		24

Proceeds from redemptions/maturities of investments	Proceeds from redemptions/maturities of investments	1,504		—		Proceeds from redemptions/maturities of investments	1,500		—

Net cash used in investing activities	Net cash used in investing activities	(48,414)		(6,395)		Net cash used in investing activities	(20,430)		(7,674)

Table of Contents


INTREPID POTASH, INC.	INTREPID POTASH, INC.					INTREPID POTASH, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS	CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS					CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)	(In thousands)					(In thousands)
		Nine Months Ended September 30,					Three Months Ended March 31,
		2022		2021			2023		2022

Cash Flows from Financing Activities:	Cash Flows from Financing Activities:					Cash Flows from Financing Activities:
Debt prepayment costs		—		(505)
Repayments of long-term debt		—		(15,000)

Repayments of short-term borrowings on credit facility		—		(29,817)

Proceeds from short-term borrowings on credit facility						Proceeds from short-term borrowings on credit facility	5,000		—

Payments of financing lease	Payments of financing lease	—		(1,258)		Payments of financing lease	(43)		—
Capitalized debt fees		(933)		—

Employee tax withholding paid for restricted stock upon vesting	Employee tax withholding paid for restricted stock upon vesting	(4,362)		(382)		Employee tax withholding paid for restricted stock upon vesting	(1,037)		(2,814)

Repurchases of common stock		(2,881)		—

Proceeds from exercise of stock options	Proceeds from exercise of stock options	110		81		Proceeds from exercise of stock options	—		90
Net cash used in financing activities		(8,066)		(46,881)
Net cash provided by (used in) financing activities						Net cash provided by (used in) financing activities	3,920		(2,724)

Net Change in Cash, Cash Equivalents and Restricted Cash	Net Change in Cash, Cash Equivalents and Restricted Cash	12,632		6,147		Net Change in Cash, Cash Equivalents and Restricted Cash	(8,061)		23,712
Cash, Cash Equivalents and Restricted Cash, beginning of period	Cash, Cash Equivalents and Restricted Cash, beginning of period	37,146		20,184		Cash, Cash Equivalents and Restricted Cash, beginning of period	19,084		37,146
Cash, Cash Equivalents and Restricted Cash, end of period	Cash, Cash Equivalents and Restricted Cash, end of period	$	49,778	$	26,331	Cash, Cash Equivalents and Restricted Cash, end of period	$	11,023	$	60,858

Supplemental disclosure of cash flow information	Supplemental disclosure of cash flow information					Supplemental disclosure of cash flow information
Net cash paid during the period for:	Net cash paid during the period for:					Net cash paid during the period for:
Interest	Interest	$	66	$	851	Interest	$	59	$	22
Income taxes	Income taxes	$	679	$	131	Income taxes	$	9	$	13
Amounts included in the measurement of operating lease liabilities	Amounts included in the measurement of operating lease liabilities	$	1,419	$	1,769	Amounts included in the measurement of operating lease liabilities	$	460	$	542
Accrued purchases for property, plant, equipment, and mineral properties	Accrued purchases for property, plant, equipment, and mineral properties	$	7,373	$	1,842	Accrued purchases for property, plant, equipment, and mineral properties	$	7,410	$	1,505
Right-of-use assets exchanged for operating lease liabilities	Right-of-use assets exchanged for operating lease liabilities	$	1,588	$	546	Right-of-use assets exchanged for operating lease liabilities	$	—	$	546
Right-of-use assets exchanged for financing lease liabilities						Right-of-use assets exchanged for financing lease liabilities	$	1,677	$	—

See accompanying notes to these condensed consolidated financial statements.

Table of Contents

INTREPID POTASH, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note 1— COMPANY BACKGROUND

We are 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. We are the only U.S. producer of muriate of potash (sometimes referred to as potassium chloride or 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, we produce a specialty fertilizer, Trio®, which delivers three key nutrients, potassium, magnesium, and sulfate, in a single particle. We also provide water, magnesium chloride, brine and various oilfield products and services.

Our extraction and production operations are conducted entirely in the continental United States. We produce potash from three solution mining facilities: our HB solution mine in Carlsbad, New Mexico, our solution mine in Moab, Utah, and our brine recovery mine in Wendover, Utah. We also operate the North compaction facility in Carlsbad, New Mexico, which compacts and granulates product from the HB mine. We produce Trio® from our conventional underground East mine in Carlsbad, New Mexico.

We have permitted, licensed, declared and partially adjudicated water rights in New Mexico that support our mining and industrial operations. Water that is not used to support our mining and industrial operations is primarily sold to support oil and gas development in the Permian Basin in New Mexico near our Carlsbad facilities. We continue to work to expand our water business. ~~In May 2019, we acquired~~See Note 14—Commitments and Contingencies below for further information regarding our water rights.

We also operate certain land, water rights, state grazing leases for cattle, and other related assets ~~from Dinwiddie Cattle Company.~~in southeast New Mexico. We refer to these assets and operations as "Intrepid South." Due to the strategic location of Intrepid South, part of our long-term operating strategy is selling small parcels of land, including restricted use agreements of surface or subsurface rights, to customers where such sales provide a solution to such customer's operations in the oil and gas industry. ~~See Note 14—Commitments and Contingencies below for further information regarding our water rights.~~

We have three segments: potash, Trio®, and oilfield solutions. We account for sales of byproducts as revenue in the potash or Trio® segment based on which segment generates the byproduct. Intersegment sales prices are market based and are eliminated.

"Intrepid," "our," "we," or "us," means Intrepid Potash, Inc. and its consolidated subsidiaries.

Note 2— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Financial Statement Presentation—Our unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and note disclosures normally included in annual financial statements prepared in accordance with U.S. generally accepted accounting principles ("GAAP") have been condensed or omitted pursuant to those rules and regulations. In the opinion of management, all adjustments, consisting of normal recurring accruals considered necessary for a fair presentation of interim financial information, have been included. These unaudited condensed consolidated financial statements should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, ~~2021.~~2022.

~~Recently~~Pronouncements Issued But Not Yet Adopted ~~Accounting Standards~~—~~In December 2019,~~We believe that all recently issued accounting pronouncements from the ~~Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2019-12,~~ ~~Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which simplifies the accounting for income taxes by removing certain exceptions~~FASB either do not apply to ~~the general principles in Topic 740 and amends existing guidance to improve consistent application. Most amendments within this standard were required to be applied on~~us or will not have a prospective basis, while certain amendments must be applied on a retrospective or modified retrospective basis. We adopted this standard on January 1, 2021. The effect of the adoption of this standard had an immaterialmaterial impact on our ~~condensed consolidated financial statements.~~Condensed Consolidated Financial Statements.

Reclassifications of Prior Period Presentation —Certain prior period amounts have been reclassified in order to conform to the current period presentation. These reclassifications had no effect on the reported results of operations.

Table of Contents

Note 3— EARNINGS PER SHARE

Basic earnings per share is computed by dividing net income by the weighted-average number of shares of common stock outstanding during the period. For purposes of determining diluted earnings per share, basic weighted-average common shares outstanding is adjusted to include potentially dilutive securities, including restricted stock, stock options, and performance units. The treasury-stock method is used to measure the dilutive impact of potentially dilutive shares. Potentially dilutive shares are excluded from the diluted weighted-average shares outstanding computation in periods in which they have an anti-dilutive effect. The following table shows the calculation of basic and diluted earnings per share (in thousands, except per share amounts):


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2022		2021		2022		2021			2023		2022
Net income	Net income	$	13,108	$	4,023	$	68,238	$	25,973	Net income	$	4,506	$	31,422

Basic weighted-average common shares outstanding	Basic weighted-average common shares outstanding	13,256		13,123		13,221		13,089		Basic weighted-average common shares outstanding	12,694		13,160
Add: Dilutive effect of restricted stock	Add: Dilutive effect of restricted stock	143		177		223		197		Add: Dilutive effect of restricted stock	125		320
Add: Dilutive effect of stock options	Add: Dilutive effect of stock options	90		67		123		66		Add: Dilutive effect of stock options	56		115

Diluted weighted-average common shares outstanding	Diluted weighted-average common shares outstanding	13,489		13,367		13,567		13,352		Diluted weighted-average common shares outstanding	12,875		13,595

Basic	Basic	$	0.99	$	0.31	$	5.16	$	1.98	Basic	$	0.35	$	2.39
Diluted	Diluted	$	0.97	$	0.30	$	5.03	$	1.95	Diluted	$	0.35	$	2.31

The following table shows the shares that have an anti-dilutive effect and are excluded from the diluted weighted-average shares outstanding computations (in thousands):


		Three Months Ended September 30,		Nine Months Ended September 30,			Three Months Ended March 31,
		2022	2021	2022	2021		2023	2022
Anti-dilutive effect of restricted stock	Anti-dilutive effect of restricted stock	106	54	64	85	Anti-dilutive effect of restricted stock	187	125

Anti-dilutive effect of stock options outstanding	Anti-dilutive effect of stock options outstanding	—	224	—	180	Anti-dilutive effect of stock options outstanding	156	—

Note 4— CASH, CASH EQUIVALENTS AND RESTRICTED CASH

We consider financial instruments with original maturities of three months ofor less to be cash equivalents. Total cash, cash equivalents and restricted cash, as shown on the condensed consolidated statements of cash flows are included in the following accounts at ~~September 30,~~March 31, 2023, and 2022 ~~and 2021~~ (in thousands):


		September 30, 2022		September 30, 2021			March 31, 2023		March 31, 2022
Cash and cash equivalents	Cash and cash equivalents	$	49,209	$	25,637	Cash and cash equivalents	$	10,451	$	60,139
Restricted cash included in other current assets	Restricted cash included in other current assets	25		175		Restricted cash included in other current assets	25		175
Restricted cash included in other long-term assets	Restricted cash included in other long-term assets	544		519		Restricted cash included in other long-term assets	547		544
Total cash, cash equivalents, and restricted cash as shown in the statement of cash flows	Total cash, cash equivalents, and restricted cash as shown in the statement of cash flows	$	49,778	$	26,331	Total cash, cash equivalents, and restricted cash as shown in the statement of cash flows	$	11,023	$	60,858

Restricted cash included in other current and long-term assets on the condensed consolidated balance sheets represents amounts ~~whose~~for which use is restricted by contractual agreements with various entities, principally the Bureau of Land Management or the State of Utah, as security to fund future reclamation obligations at our sites.

Table of Contents

Note 5— INVENTORY AND LONG-TERM PARTS INVENTORY

The following summarizes our inventory, recorded at the lower of weighted-average cost or estimated net realizable value, as of ~~September 30, 2022,~~March 31, 2023, and December 31, ~~2021~~2022 (in thousands):


		September 30, 2022		December 31, 2021			March 31, 2023		December 31, 2022
Finished goods product inventory	Finished goods product inventory	$	49,310	$	42,492	Finished goods product inventory	$	71,826	$	74,777
In-process inventory	In-process inventory	34,359		27,211		In-process inventory	18,984		24,767
Total product inventory	Total product inventory	83,669		69,703		Total product inventory	90,810		99,544
Current parts inventory, net	Current parts inventory, net	13,244		9,153		Current parts inventory, net	16,364		15,272
Total current inventory, net	Total current inventory, net	96,913		78,856		Total current inventory, net	107,174		114,816
Long-term parts inventory, net	Long-term parts inventory, net	25,398		29,251		Long-term parts inventory, net	24,820		24,823
Total inventory, net	Total inventory, net	$	122,311	$	108,107	Total inventory, net	$	131,994	$	139,639

Parts inventory is shown net of estimated allowances for obsolescence of ~~$1.7~~$1.3 million as of ~~September 30, 2022,~~March 31, 2023, and ~~$3.2 million as of~~ December 31, ~~2021.~~2022.

Note 6 — PROPERTY, PLANT, EQUIPMENT, AND MINERAL PROPERTIES

Property, plant, equipment, and mineral properties were comprised of the following (in thousands):


		September 30, 2022		December 31, 2021			March 31, 2023		December 31, 2022
Land	Land	$	24,136	$	24,136	Land	$	24,136	$	24,136
Ponds and land improvements	Ponds and land improvements	72,205		69,261		Ponds and land improvements	74,138		73,501
Mineral properties and development costs	Mineral properties and development costs	144,279		144,255		Mineral properties and development costs	146,335		146,333
Buildings and plant	Buildings and plant	88,778		84,268		Buildings and plant	89,478		89,014
Machinery and equipment	Machinery and equipment	285,267		272,323		Machinery and equipment	292,986		288,345
Vehicles	Vehicles	7,449		6,855		Vehicles	7,709		7,399
Office equipment and improvements	Office equipment and improvements	10,102		8,956		Office equipment and improvements	10,625		10,436
Operating lease ROU assets	Operating lease ROU assets	5,190		7,763		Operating lease ROU assets	5,694		5,908
Breeding stock	Breeding stock	329		308		Breeding stock	322		329
Construction in progress	Construction in progress	29,530		11,469		Construction in progress	61,938		47,188
Total property, plant, equipment, and mineral properties, gross	Total property, plant, equipment, and mineral properties, gross	$	667,265	$	629,594	Total property, plant, equipment, and mineral properties, gross	$	713,361	$	692,589
Less: accumulated depreciation, depletion, and amortization	Less: accumulated depreciation, depletion, and amortization	(308,536)		(288,477)		Less: accumulated depreciation, depletion, and amortization	(325,510)		(316,959)
Total property, plant, equipment, and mineral properties, net	Total property, plant, equipment, and mineral properties, net	$	358,729	$	341,117	Total property, plant, equipment, and mineral properties, net	$	387,851	$	375,630

~~In May 2021, we sold approximately 330 acres of land we owned in Texas for $6.0 million and recorded a gain of $2.8 million.~~

We incurred the following expenses for depreciation, depletion, and amortization, including expenses capitalized into inventory, for the following periods (in thousands):


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2022		2021		2022		2021			2023		2022
Depreciation	Depreciation	$	7,519	$	7,294	$	22,051	$	22,145	Depreciation	$	7,727	$	7,188
Depletion	Depletion	459		600		1,889		2,796		Depletion	1,177		1,144
Amortization of right of use assets	Amortization of right of use assets	384		536		1,345		1,568		Amortization of right of use assets	388		566
Total incurred	Total incurred	$	8,362	$	8,430	$	25,285	$	26,509	Total incurred	$	9,292	$	8,898

Table of Contents

Note 7 — DEBT

Revolving Credit Facility—In August 2022, we and certain of our subsidiaries entered into the Second Amended and Restated Credit Agreement with a syndicate of lenders with the Bank of Montreal, as administrative agent, which provides for a revolving credit facility. The agreement amended our existing revolving credit facility to, among other things, increase the amount available under the facility from $75 million to $150 million, extend the maturity date to August 4, 2027, and transition from LIBOR to ~~SOFR (Secured~~Secured Overnight Financing ~~Rate)~~Rate ("SOFR") as a reference rate for borrowings under the credit agreement. Borrowings under the amended credit facility bear interest at SOFR plus an applicable margin of 1.50% to 2.25% per annum, based on our leverage ratio as calculated in accordance with the amended agreement governing the revolving credit facility. Borrowings under the revolving credit facility are secured by substantially all of our current and non-current assets, and the obligations under the credit facility are unconditionally guaranteed by several of our subsidiaries.

We occasionally borrow and repay amounts under the revolving credit facility for near-term working capital needs or other purposes and may do so in the future. During the three ~~and nine~~ months ended ~~September 30, 2022,~~March 31, 2023, we made no$5.0 million in borrowings, and we made no repayments under the revolving credit facility. During the three ~~and nine~~ months ended ~~September 30, 2021,~~March 31, 2022, we made no borrowings, and we ~~made $29.8 million of repayments~~made no repayments under the revolving credit facility. As of ~~September 30, 2022,~~March 31, 2023, we had $5.0 million in borrowings outstanding and no outstanding letters of credit under this facility. As of December 31, ~~2021,~~2022, we had no borrowings outstanding and $1$1.0 million in outstanding letters of credit under this facility.

As of ~~September 30, 2022,~~March 31, 2023, we were in compliance with all applicable covenants under the revolving credit facility.

~~PPP Loan~~—In April 2020, we received a $10 million loan under the Paycheck Protection Program (the "PPP") under the CARES Act. We submitted our application for forgiveness of the full amount of the loan in November 2020. In June 2021, we received notice that the Small Business Administration had remitted funds to our bank to fully repay our PPP loan and accrued interest. Accordingly, we recognized a gain of $10.1 million related to the forgiveness of the PPP loan and the associated accrued interest on the PPP loan.

~~Senior Notes~~—In June 2021 we repaid the remaining $15.0 million of principal outstanding on our Series B Senior Notes due April 14, 2023 (the "Series B Senior Notes") and satisfied all obligations under the Amended and Restated Note Purchase Agreement, dated as of October 31, 2016, by and among the Company and each of the purchasers named therein (as amended, the "Note Purchase Agreement"). As a result of the repayment, the Note Purchase Agreement was terminated.

Interest Expense—Interest expense is recorded net of any capitalized interest associated with investments in capital projects. We incurred gross interest expense of $0.2 million and $0.1 million for the three months ended ~~September 30,~~March 31, 2023 and March 31, 2022, ~~and September 30, 2021, and $0.3 million and $1.5 million for the nine months ended September 30, 2022, and September 30, 2021~~ respectively.

Amounts included in interest expense, net for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2023, and 2022 ~~and 2021,~~ were as follows (in thousands):


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2022		2021		2022		2021			2023		2022
Interest on debt borrowings		$	47	$	50	$	90	$	717
Make-whole payments		—		—		—		505
Interest expense on borrowings										Interest expense on borrowings	$	22	$	—
Commitment fee on unused credit facility										Commitment fee on unused credit facility	56		21
Amortization of deferred financing costs	Amortization of deferred financing costs	67		60		187		254		Amortization of deferred financing costs	75		60
Gross interest expense	Gross interest expense	114		110		277		1,476		Gross interest expense	153		81
Less capitalized interest	Less capitalized interest	(86)		(28)		(192)		(50)		Less capitalized interest	(153)		(48)
Interest expense, net	Interest expense, net	$	28	$	82	$	85	$	1,426	Interest expense, net	$	—	$	33

Table of Contents

Note 8 — INTANGIBLE ASSETS

We have water rights, recorded at $19.2 million at ~~September 30, 2022,~~March 31, 2023, and December 31, ~~2021.~~2022. Our water rights have indefinite lives and are not amortized. We evaluate our water rights at least annually on October 1 for impairment, or more frequently if circumstances require.

We account for other intangible assets as finite-lived intangible assets and amortize those intangible assets over the period of estimated benefit, using the straight-line method. The weighted average amortization period for the other intangible assets is approximately 1716.0 years. At ~~September 30, 2022,~~March 31, 2023, and December 31, ~~2021,~~2022, these intangible assets had a net book value of ~~$5.3~~$5.2 million and ~~$5.6~~$5.2 million, respectively, and are included in "Other assets, net" on the Condensed Consolidated Balance Sheets.

Note 9— FINANCIAL INFORMATION FOR SUBSIDIARY GUARANTORS OF POSSIBLE FUTURE

PUBLIC DEBT

Intrepid Potash, Inc., as the parent company, has no independent assets or operations, and operations are conducted solely through its subsidiaries. Cash generated from operations is held at the parent-company level as cash on hand and cash equivalents and totaled ~~$49.2~~$10.5 million and ~~$36.5~~$18.5 million at ~~September 30, 2022,~~March 31, 2023, and December 31, ~~2021,~~2022, respectively. If one or more of our wholly-owned operating subsidiaries guarantee public debt securities in the future, those guarantees will be full and unconditional and will constitute the joint and several obligations of the subsidiary guarantors. The assets and liabilities of our other subsidiaries are immaterial. There are no restrictions on our ability to obtain cash dividends or other distributions of funds from the subsidiary guarantors, except those imposed by applicable law.

Table of Contents

Note 10 — ASSET RETIREMENT OBLIGATION

We recognize an estimated liability for future costs associated with the abandonment and reclamation of our mining properties. A liability for the fair value of an asset retirement obligation and a corresponding increase to the carrying value of the related long-lived asset are recorded as the mining operations occur or the assets are acquired.

Our asset retirement obligation is based on the estimated cost to ~~abandon~~close and reclaim the mining operations, the economic life of the properties, and federal and state regulatory requirements. The liability is discounted using credit adjusted risk-free rate estimates at the time the liability is incurred or when there are upward revisions to estimated costs. The credit adjusted risk-free rates used to discount our ~~abandonment~~reclamation liabilities range from 6.9% to 9.7%. Revisions to the liability occur due to construction of new or expanded facilities, changes in estimated ~~abandonment~~closure costs or economic lives, or if federal or state regulators enact new requirements regarding the ~~abandonment~~closure or reclamation of mines.

Following is a table of the changes to our asset retirement obligation for the following periods (in thousands):


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2022		2021		2022		2021			2023		2022
Asset retirement obligation, at beginning of period	Asset retirement obligation, at beginning of period	$	28,004	$	24,780	$	27,024	$	23,872	Asset retirement obligation, at beginning of period	$	26,864	$	27,024
Liabilities settled		(511)		—		(511)		—
Liabilities incurred		250		—		250		—
Changes in estimated obligations		—		—		—		26

Accretion of discount	Accretion of discount	491		441		1,471		1,323		Accretion of discount	535		490
Total asset retirement obligation, at end of period	Total asset retirement obligation, at end of period	$	28,234	$	25,221	$	28,234	$	25,221	Total asset retirement obligation, at end of period	$	27,399	$	27,514
Less current portion of asset retirement obligation										Less current portion of asset retirement obligation	$	(300)	$	—
Long-term portion of asset retirement obligation										Long-term portion of asset retirement obligation	$	27,099	$	27,514

The current portion of the asset retirement obligation ~~of $1.0 million~~ is included in "Other current liabilities" on the ~~condensed consolidated balance sheet~~Condensed Consolidated Balance Sheet as of ~~September 30, 2022.~~March 31, 2023.

Table of Contents

Note 11 — REVENUE

Revenue Recognition—We account for revenue in accordance with ASC Topic 606 Revenue from Contracts with Customers ("ASC 606"). Under ASC 606, we recognize revenue when control of the promised goods or services is transferred to customers in an amount that reflects the consideration we expect ~~to be entitled~~ in exchange for those goods or services. The timing of revenue recognition, billings, and cash collection may result in contract assets or contract liabilities.

Contract Balances: As of ~~September 30, 2022,~~March 31, 2023, and December 31, ~~2021,~~2022, we had a total of ~~$1.5~~$2.3 million and ~~$33.8~~$2.4 million of contract liabilities, respectively, of which ~~$0.5~~$1.0 million and ~~$32.9~~$0.9 million were current as of ~~September 30, 2022,~~March 31, 2023, and December 31, ~~2021,~~2022, respectively, and included in "Other current liabilities" on the condensed consolidated balance sheets. Customer advances received before we have satisfied our performance obligations are accounted for as a contract liability (sometimes referred to in practice as deferred revenue).

As of ~~December~~March 31, ~~2021,~~2022, our contract liability balance primarily consisted of prepayments from a customer for future water deliveries under the terms of a water sales agreement. In August 2022, our customer notified us that they were terminating the water sales agreement and in September 2022 we refunded the customer's prepayment balance of $32.6 million. See Note 14—Commitments and Contingencies below for additional information regarding our water rights and repayment of ~~the~~this customer's prepayment balance.

Our deferred revenue activity for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2023, and 2022 ~~and 2021~~ is shown below (in thousands):


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2022		2021		2022		2021			2023		2022
Beginning balance	Beginning balance	$	34,110	$	33,631	$	33,788	$	30,418	Beginning balance	$	2,374	$	33,788
Additions	Additions	124		146		714		4,119		Additions	145		349
Refund of prepayments		(32,579)		—		(32,579)		—

Recognized as revenue during period	Recognized as revenue during period	(150)		(71)		(418)		(831)		Recognized as revenue during period	(245)		(114)
Ending Balance	Ending Balance	$	1,505	$	33,706	$	1,505	$	33,706	Ending Balance	$	2,274	$	34,023

Disaggregation of Revenue: The tables below show the disaggregation of revenue by product and reconciles disaggregated revenue to segment revenue for the three ~~and nine~~ months ended ~~September 30, 2022,~~March 31, 2023, and ~~2021.~~2022. We believe the disaggregation of revenue by products best depicts how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic conditions (in thousands):


	Three Months Ended March 31, 2023
Product	Potash Segment		Trio® Segment		Oilfield Solutions Segment		Intersegment Eliminations		Total
Potash	$	47,155	$	—	$	—	$	(101)	$	47,054
Trio®	—		29,053		—		—		29,053
Water	80		1,048		1,619		—		2,747
Salt	3,043		173		—		—		3,216
Magnesium Chloride	1,137		—		—		—		1,137
Brine Water	1,082		—		822		—		1,904
Other	—		—		1,809		—		1,809
Total Revenue	$	52,497	$	30,274	$	4,250	$	(101)	$	86,920

Table of Contents

Three Months Ended September 30, 2022
Product Potash Segment
Trio® Segment
Oilfield Solutions Segment Intersegment Eliminations Total
Potash $ 36,177 $ — $ — $ (68) $ 36,109
Trio®
— 23,158 — — 23,158
Water 427 796 5,380 — 6,603
Salt 2,845 89 — — 2,934
Magnesium Chloride 2,008 — — — 2,008
Brine Water 897 — 792 — 1,689
Other — — 2,251 — 2,251
Total Revenue $ 42,354 $ 24,043 $ 8,423 $ (68) $ 74,752
Nine Months Ended September 30, 2022
Product Potash Segment Trio® Segment Oilfield Solutions Segment Intersegment Eliminations Total
Potash $ 131,684 $ — $ — $ (228) $ 131,456
Trio®
— 97,461 — — 97,461
Water 1,564 2,722 13,260 — 17,546
Salt 8,137 378 — — 8,515
Magnesium Chloride 4,022 — — — 4,022
Brine Water 2,215 — 2,179 — 4,394
Other — — 7,497 — 7,497
Total Revenue $ 147,622 $ 100,561 $ 22,936 $ (228) $ 270,891

~~Table of Contents~~


		Three Months Ended September 30, 2021											Three Months Ended March 31, 2022
Product	Product	Potash Segment		Trio® Segment		Oilfield Solutions Segment		Intersegment Eliminations		Total		Product	Potash Segment		Trio® Segment		Oilfield Solutions Segment		Intersegment Eliminations		Total
Potash	Potash	$	26,573	$	—	$	—	$	(55)	$	26,518	Potash	$	51,622	$	—	$	—	$	(95)	$	51,527
Trio®	Trio®	—		19,495		—		—		19,495		Trio®	—		39,616		—		—		39,616
Water	Water	263		1,310		4,382		—		5,955		Water	774		1,202		4,188		—		6,164
Salt	Salt	2,540		22		—		—		2,562		Salt	2,634		234		—		—		2,868
Magnesium Chloride	Magnesium Chloride	1,921		—		—		—		1,921		Magnesium Chloride	815		—		—		—		815
Brine Water	Brine Water	376		—		301		—		677		Brine Water	597		—		739		—		1,336
Other	Other	—		—		2,025		—		2,025		Other	—		—		2,073		—		2,073
Total Revenue	Total Revenue	$	31,673	$	20,827	$	6,708	$	(55)	$	59,153	Total Revenue	$	56,442	$	41,052	$	7,000	$	(95)	$	104,399

		Nine Months Ended September 30, 2021
Product		Potash Segment		Trio® Segment		Oilfield Solutions Segment		Intersegment Eliminations		Total
Potash		$	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 Chloride		5,829		—		—		—		5,829
Brine Water		1,338		—		735		—		2,073
Other		—		—		4,051		—		4,051
Total Revenue		$	112,944	$	71,444	$	14,293	$	(177)	$	198,504

1413

Table of Contents

Note 12 — COMPENSATION PLANS

Equity Incentive Compensation Plan—Our Board of Directors and stockholders adopted a long-term incentive compensation plan called the Intrepid Potash, Inc. Amended and Restated Equity Incentive Plan (the "Plan"). The Plan was most recently amended and restated in May 2022. We have issued common stock, restricted stock, performance units, and non-qualified stock option awards under the Plan. At ~~September 30, 2022, approximately 1.1~~March 31, 2023, approximately 1.0 million ~~shares~~shares remained available for issuance under the Plan.

In March ~~2022,~~2023, the Compensation Committee granted ~~104,039~~225,117 shares of restricted stock to executive officers and other key employees. These awards vest over three years, and in some cases, contain a market condition. In ~~May~~March 2022, the Compensation Committee granted ~~6,635~~104,039 restricted shares to ~~members of our Board of Directors.~~executive officers and other key employees. These awards vest ~~after~~over ~~one~~three ~~year.~~years, and in some cases, contain a market condition. As of ~~September 30, 2022,~~March 31, 2023, the following awards were outstanding under the Plan (in thousands):



						Outstanding as of ~~September 30, 2022~~March 31, 2023
Restricted Shares						~~345~~399

Non-qualified Stock Options						273

Total share-based compensation expense was ~~$1.4~~$1.7 million and ~~$0.6~~$1.2 million for the three months ended ~~September 30,~~March 31, 2023, and 2022, ~~and 2021, respectively, and $4.0 million and $2.3 million for the nine months ended September 30, 2022, and 2021,~~ respectively. As of ~~September 30, 2022,~~March 31, 2023, we had ~~$8.3~~$10.3 million of total remaining unrecognized compensation expense related to awards that is expected to be recognized over a weighted-average period of ~~1.4~~1.6 years.

Note 13 — INCOME TAXES

Our anticipated annual tax rate is impacted primarily by the amount of taxable income associated with each jurisdiction in which our income is subject to income tax, permanent differences between the financial statement carrying amounts and tax bases of assets and liabilities, and the benefit associated with the estimated effect of the percentage depletion deduction.

A summary of our provision for income taxes is as follows (in thousands):


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2022		2021		2022		2021			2023		2022
Current portion of income tax expense	Current portion of income tax expense	$	296	$	—	$	583	$	—	Current portion of income tax expense	$	126	$	139
Deferred portion of income tax expense	Deferred portion of income tax expense	4,607		—		21,548		—		Deferred portion of income tax expense	1,661		9,000
Total income tax expense	Total income tax expense	$	4,903	$	—	$	22,131	$	—	Total income tax expense	$	1,787	$	9,139

Our effective tax rate for the three ~~and nine~~ months ended ~~September 30, 2022,~~March 31, 2023, was ~~27.2% and 24.5%, respectively.~~28.4%. Our effective tax rate differed from the statutory rate during this period primarily from the estimated permanent difference between book and tax income for the first quarter of 2023 for the officers' compensation deduction. Additionally, because small changes in projected income may produce significant variations in our estimated annual effective tax rate, we have determined that we are unable to reliably estimate an annual effective tax rate to apply to our income for the quarter ended March 31, 2023, as described in ASC 740.Therefore, we have elected to apply the actual effective tax rate for the quarter to our income since we believe that this is the best estimate of our annual effective tax rate. Our effective tax rate for the three months ended March 31, 2022, was 22.5% which differed from the statutory rate primarily from the estimated permanent difference between book and tax income for 2022, for the percentage depletion deduction as well as the effect of state income tax law changes enacted during the first ~~nine months~~quarter of 2022. Our effective tax rate for the three and nine months ended September 30, 2021, was zero percent which differed from the statutory rate primarily due to the valuation allowance that was established to offset our deferred tax assets.

Note 14 — COMMITMENTS AND CONTINGENCIES

Reclamation Deposits and Surety Bonds—As of ~~September 30, 2022,~~March 31, 2023, and December 31, ~~2021,~~2022, we had ~~$23.5~~$26.5 million and ~~$23.0~~$24.6 million, respectively, of security placed principally with the State of Utah and the Bureau of Land Management for

Table of Contents

eventual reclamation of our various facilities. As of ~~September 30, 2022,~~March 31, 2023, $0.5 million consisted of long-term restricted cash deposits and ~~$23.0~~$26.0 million was secured by surety bonds issued by an insurer. As of December 31, ~~2021,~~2022, $0.5 million consisted of long-term restricted cash deposits and ~~$22.5~~$24.1 million was secured by surety bonds issued by an insurer.

~~Table of Contents~~

The restricted cash deposits are included in "Other assets, net" on the condensed consolidated balance sheets and the surety bonds are held in place by an annual fee paid to the ~~issuer and a letter of credit.~~issuer.

We may be required to post additional security to fund future reclamation obligations as reclamation plans are updated or as governmental entities change requirements.

Legal—We are subject to claims and legal actions in the ordinary course of business. ~~Legal~~We expense legal costs as they are ~~expensed as~~ incurred. While there are uncertainties in predicting the outcome of any claim or legal action, except as noted below, we believe the ultimate resolution of these claims or actions is not reasonably likely to have a material adverse effect on our financial condition, results of operations, or cash flows.

Water Rights and Other Legal Contingencies

In February 2019, an expedited inter se proceeding commenced to determine the validity of our Pecos River water rights, representing approximately 20,000 acre feet per year. On December 17, 2021, the adjudication court entered its findings of fact and conclusions of law, which held that our predecessors in interest had forfeited all but approximately 5,800 acre feet of water per year, and that of the remaining 5,800 acre feet of water that had not been forfeited, all but 150 acre feet of water had been abandoned prior to 2017. On March 17, 2022, the adjudication court entered the subfile order and partial final judgment and decree, which adopted the court's December 17, 2021 findings of fact and conclusion of law and specifies our right to 150 acre feet per annum of water for industrial-salt processing use. On April 15, 2022, we filed a notice of appeal of the adjudication court's ruling on the validity of our water ~~rights as well as motion to stay the effect of the adjudication court's ruling on any repayment requirement~~rights. The appeal is currently before the New Mexico ~~Office~~Court of ~~State Engineer ("OSE") may seek to impose following entry of~~Appeals and the subfile order and partial final decree. We ultimately withdrew our motion to stay on June 10, 2022, after the OSE indicated it would not seek immediate repayment of any water used pursuant to the emergency or preliminary authorizations, described below.matter has been fully briefed.

In 2017 and 2018 the ~~OSE~~New Mexico Office of the State Engineer ("OSE") had granted us preliminary and emergency authorizations to sell approximately 5,700 acre-feet of water per year from our Pecos River Water rights. The preliminary and emergency authorizations allowed for water sales to begin immediately, subject to repayment if the underlying water rights were ultimately found to be invalid. ~~Since the adjudication court entered the subfile order and partial final decree based on its amended findings of fact and conclusion of law discussed above, if~~If our appeal of the ~~subfile order and partial final decree~~adjudication court's ruling is unsuccessful, we may have to repay for the water ~~pumped~~we sold under the preliminary authorizations. Repayment of this water ~~could~~can be up to two times the amount of water removed from the ~~Pecos River.~~river. Repayment is customarily made in-kind over a period of time but can take other forms including cash repayment. If we are not able to repay in-kind due to the lack of remaining water rights or logistical constraints, we may need to purchase water to meet this repayment or be subject to a cash repayment. We cannot reasonably estimate the potential volume, timing, or form of repayment, if any, and have not recorded a loss contingency in our ~~statement~~Condensed Consolidated Statement of ~~operations~~Operations related to this legal matter.

In March 2021, we received notice from a customer of a default under the terms of a long-term sales contract because we have been unable to deliver water to diversion points specified in the contract. We have relied primarily upon our Pecos River water rights to deliver water under this contract, the majority of which are currently unavailable due to the factors discussed above. Under this contract we had previously received quarterly installments of approximately $3.9 million for the future delivery of water to the customer. In April 2021, we agreed to suspend the second quarter 2021 and future quarterly installments due from the customer as we continued to work to resolve the issue. In December 2021, we amended our long-term sales agreement with the customer due to our inability to deliver water. Under the amendment, we agreed to suspend all rights and obligations of both parties under the agreement until July 1, 2022. During the suspension period, we had no obligation to deliver water and our customer had no obligation to take water, if available, or make quarterly payments to us. In August 2022, the customer notified us that they were terminating the long-term sales contract and in September 2022, we refunded the $32.6 million outstanding contract liability we had with this customer. See Note 11—Revenue above for additional information.

In August 2021, NGL Energy Partners (NGL), our partner in a Joint Marketing Agreement (“JMA”) filed suit against us alleging, amongst other items, we overcharged the JMA for various operating costs and that we used third party water to service certain fracs when JMA water should have been used in those fracs. On June 22, 2022, ~~the parties~~we entered into a settlement agreement with NGL in connection with this matter and the lawsuit was dismissed with prejudice on June 29, 2022. The settlement did not have a material impact on our results of operations and the JMA was terminated.

We have estimated contingent liabilities recorded in "Other current liabilities" on the condensed consolidated balance sheets of $5.2 million and $4.2 million as of March 31, 2023, and December 31, 2022, respectively, mainly related to a trespass issue at Intrepid South and the potential underpayment of royalties in 2012 to 2016.

Table of Contents

~~Table of Contents~~

Note 15 — FAIR VALUE

We measure our financial assets and liabilities in accordance with ASC Topic 820, Fair Value Measurements and Disclosures. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Assets and liabilities measured at fair value are classified using the following hierarchy, which is based upon the transparency of inputs to the valuation at the measurement date:

Level 1 - Quoted market prices in active markets for identical assets or liabilities.

Level 2 - Inputs, other than Level 1, that are either directly or indirectly observable.

Level 3 - Unobservable inputs developed using estimates and assumptions which reflect those that market participants would use.

The classification of fair value measurement within the hierarchy is based upon the lowest level of input that is significant to the measurement.

Other financial instruments consist primarily of cash equivalents, accounts receivable, refundable income taxes, investment securities, accounts payable, accrued liabilities, and, if any, advances under our credit facility. With the exception of investment securities, we believe cost approximates fair value for our financial instruments because of the short-term nature of these instruments.

Cash Equivalents—As of ~~September 30, 2022,~~March 31, 2023, and December 31, ~~2021,~~2022, we had cash equivalents of ~~$1.2~~$0.5 million and ~~zero,~~$1.7 million, respectively.

Held-to-Maturity Investments—As of ~~September 30, 2022,~~March 31, 2023, we owned debt investment securities classified as held-to-maturity because we have the intent and ability to hold these investments to maturity. Our held-to-maturity debt investment securities consist of investment grade corporate bonds and U.S. government issued bonds. These debt securities are carried at amortized cost and consist of the following (amounts in thousands):


		As of September 30, 2022									As of March 31, 2023
		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value			Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Short-term	Short-term									Short-term
Corporate bonds	Corporate bonds	$	3,002	$	—	$	(19)	$	2,983	Corporate bonds	$	2,994	$	—	$	(18)	$	2,976
Government bonds	Government bonds	1,968		—		(12)		1,956		Government bonds	1,966		—		(17)		1,949
Total	Total	$	4,970	$	—	$	(31)	$	4,939	Total	$	4,960	$	—	$	(35)	$	4,925
Long-term	Long-term									Long-term
Corporate bonds	Corporate bonds	$	1,988	$	—	$	(25)	$	1,963	Corporate bonds	$	983	$	—	$	(11)	$	972
Government bonds	Government bonds	1,904		—		(25)		1,879		Government bonds	1,934		—		(11)		1,923
Total	Total	$	3,892	$	—	$	(50)	$	3,842	Total	$	2,917	$	—	$	(22)	$	2,895

Our long-term held to maturity investments are recorded in "Long-term investments" on the Condensed Consolidated Balance Sheets. As of March 31, 2023 and December 31, ~~2021,~~2022, we had no$7.9 million and $8.4 million in held-to-maturity debt investment ~~securities.~~securities, respectively. Our long-term held-to-maturity investments mature in less than 2 years.

Equity Investments without a Readily Determinable Fair Value—~~As of September 30, 2022, and December 31, 2021,~~In May 2020, we ~~had~~acquired a ~~$3.5 million~~ non-controlling equity investment in W.D. Von Gonten Laboratories ("WDVGL")~~. This~~ for $3.5 million. We account for this investment isas an equity investment without a readily determinable fair value and ~~is recorded~~elected to measure our investment, as permitted by GAAP, at cost ~~with~~plus or minus any adjustments for observable changes in prices resulting from orderly transactions for the identical or a similar investment of the same issuer or ~~impairment (a Level 3 input),~~impairment. As of March 31, 2023, and ~~is included~~December 31, 2022, we had not recorded any adjustments to the carrying value of this investment since the purchase in May 2020. We include this investment in "Long-term investments" on the Condensed Consolidated Balance Sheets. ~~We did not record any adjustments to the carrying value of the investment during the nine months ended September 30, 2022, or the twelve months ended December 31, 2021.~~

1716

Table of Contents

In July 2022, WDVGL entered into a purchase agreement with another company (“Acquiror”), a foreign issuer whose shares are traded on the Nasdaq Capital Market (“Nasdaq”). Under the terms of the purchase agreement, WDVGL would be combined with the consulting business owned by W.D. Von Gonten (“Consulting”) to form a new entity, W.D. Von Gonten Engineering, LLC (“Engineering”), and Acquiror would then purchase Engineering in a majority stock transaction at an agreed upon selling price.

Acquiror delivered equity shares and a nominal amount of cash for purchase of Engineering in July 2022, with the number of shares equal to the selling price divided by an assumed $10 share price. Under the terms of the purchase agreement, if Acquiror was current in its SEC filing on June 30, 2023, the actual number of shares would be adjusted to equal the agreed upon purchase price divided by the average closing price of Acquiror’s stock for the ten trading days prior to June 30, 2023, and the stock received from the sale of Engineering would be distributed to the investors in WDVGL and Consulting.

In March 2022, Acquiror disclosed that it had discovered errors in its financial statements for the fiscal years ended December 31, 2018, 2019 and 2020, and was working to file restated financial statements with the SEC. On April 27, 2023, Acquiror disclosed it had not been able to file its Annual Report on Form 20-F for the fiscal year ended December 31, 2021 with the SEC by April 25, 2023, which was the deadline set by Nasdaq Hearings Panel in connection with a delisting proceeding, and Acquiror’s shares were subsequently delisted from Nasdaq. Acquiror also disclosed on April 27, 2023 that it has shifted its focus to filing audited financial statements with the SEC for the fiscal years ended December 31, 2020, 2021 and 2022 to regain compliance with Nasdaq listing standards before the end of 2023. Pursuant to the purchase agreement with Engineering, if the Acquiror does not file current financial statements with the SEC by June 30, 2023, Engineering has the option to terminate the purchase agreement, beginning on July 1, 2023.

While it is unlikely Acquiror will be able to file current financial statements by June 30, 2023, Engineering intends to proceed with the purchase agreement and allow Acquiror additional time to file updated financial statements. We have not impaired our investment in WDVGL because our share of the estimated selling price exceeds the carrying value of our investment in WDVGL. We will continue to monitor the investment for impairment. If Acquiror is unable to file restated financial statements by the end of 2023 and the purchase transaction is not finalized, we may need to impair our investment in WDVGL.

Equity Method Investments—We have committed to invest up to $4.0 million in cash as a limited partner for a 16% interest in PEP Ovation, LP ("Ovation"), of which we had invested ~~$3.5 million and $1.1~~$3.2 million of cash as of ~~September 30, 2022,~~March 31, 2023, and December 31, ~~2021, respectively.~~2022. This investment is accounted for under the equity method whereby we recognize our proportional share of the income or loss from our investment in Ovation on a one-quarter ~~lag and~~lag. This investment is included in "Long-term investments" on the Condensed Consolidated Balance Sheets. For the ~~nine~~three months ended ~~September 30, 2022,~~March 31, 2023, our proportional share of Ovation's net income was $0.8 million.

1817

Table of Contents

Note 16 — BUSINESS SEGMENTS

Our operations are organized into three segments: potash, Trio® and oilfield solutions. ~~The~~We determine reportable segments ~~are determined by management~~ based on several factors including the types of products and services sold, production processes, markets served and the financial information available for our chief operating decision maker. We evaluate performance based on the gross margins of the respective business segments and do not allocate corporate selling and administrative expenses, among others, to the respective segments. Intersegment sales prices are market-based and are eliminated in the "Other" column. Information for each segment is provided in the tables that follow (in thousands).

Three Months Ended
September 30, 2022 Potash
Trio®
Oilfield Solutions Other Consolidated
Sales $ 42,354 $ 24,043 $ 8,423 $ (68) $ 74,752
Less: Freight costs 3,726 4,135 — (68) 7,793
         Warehousing and handling
         costs 1,414 1,127 — — 2,541
         Cost of goods sold 17,342 12,278 8,028 — 37,648
Gross Margin $ 19,872 $ 6,503 $ 395 $ — $ 26,770
Depreciation, depletion, and amortization incurred1
$ 6,318 $ 1,072 $ 867 $ 185 $ 8,442
Nine Months Ended
September 30, 2022 Potash
Trio®
Oilfield Solutions Other Consolidated
Sales $ 147,622 $ 100,561 $ 22,936 $ (228) $ 270,891
Less: Freight costs 11,430 16,055 — (228) 27,257
         Warehousing and handling
         costs 3,947 3,274 — — 7,221
         Cost of goods sold 58,383 45,538 16,735 — 120,656
Gross Margin $ 73,862 $ 35,694 $ 6,201 $ — $ 115,757
Depreciation, depletion, and amortization incurred1
$ 19,350 $ 3,122 $ 2,458 $ 596 $ 25,526

~~Table of Contents~~


Three Months Ended September 30, 2021		Potash		Trio®		Oilfield Solutions		Other		Consolidated
Three Months Ended March 31, 2023												Three Months Ended March 31, 2023	Potash		Trio®		Oilfield Solutions		Other		Consolidated
Sales	Sales	$	31,673	$	20,827	$	6,708	$	(55)	$	59,153	Sales	$	52,497	$	30,274	$	4,250	$	(101)	$	86,920
Less: Freight costs	Less: Freight costs	3,928		4,038		—		(55)		7,911		Less: Freight costs	5,005		6,686		—		(101)		11,590
Warehousing and handling costs	Warehousing and handling costs	1,241		825		—		—		2,066		Warehousing and handling costs	1,480		1,253		—		—		2,733
Cost of goods sold	Cost of goods sold	18,385		10,528		6,061		—		34,974		Cost of goods sold	31,584		20,883		3,778		—		56,245

Costs associated with abnormal production		3,594		—		—		—		3,594

Gross Margin	Gross Margin	$	4,525	$	5,436	$	647	$	—	$	10,608	Gross Margin	$	14,428	$	1,452	$	472	$	—	$	16,352
Depreciation, depletion, and amortization incurred1	Depreciation, depletion, and amortization incurred1	$	6,257	$	1,321	$	818	$	114	$	8,510	Depreciation, depletion, and amortization incurred1	$	7,051	$	1,206	$	907	$	208	$	9,372

Nine Months Ended September 30, 2021		Potash		Trio®		Oilfield Solutions		Other		Consolidated

Three Months Ended March 31, 2022												Three Months Ended March 31, 2022	Potash		Trio®		Oilfield Solutions		Other		Consolidated
Sales	Sales	$	112,944	$	71,444	$	14,293	$	(177)	$	198,504	Sales	$	56,442	$	41,052	$	7,000	$	(95)	$	104,399
Less: Freight costs	Less: Freight costs	13,766		16,515		—		(177)		30,104		Less: Freight costs	4,023		6,309		—		(95)		10,237
Warehousing and handling costs	Warehousing and handling costs	4,004		3,072		—		—		7,076		Warehousing and handling costs	1,324		1,152		—		—		2,476
Cost of goods sold	Cost of goods sold	68,251		43,329		12,235		—		123,815		Cost of goods sold	22,031		17,451		5,028		—		44,510

Costs associated with abnormal production		3,594		—		—		—		3,594

Gross Margin	Gross Margin	$	23,329	$	8,528	$	2,058	$	—	$	33,915	Gross Margin	$	29,064	$	16,140	$	1,972	$	—	$	47,176
Depreciation, depletion and amortization incurred1		$	19,895	$	4,204	$	2,206	$	445	$	26,750
Depreciation, depletion, and amortization incurred1												Depreciation, depletion, and amortization incurred1	$	6,947	$	1,008	$	787	$	236	$	8,978

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

2018

Table of Contents

ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

This Quarterly Report on Form 10-Q (this "Quarterly Report") contains forward-looking statements within the meaning of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the Securities Act of 1933, as amended. These forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements in this Quarterly Report other than statements of historical fact are forward-looking statements. Forward-looking statements include statements about, among other things, our future results of operations and financial position, our business strategy and plans, our ESG (as defined below) initiatives and our objectives for future operations. In some cases, you can identify these statements by forward-looking words, such as "estimate," "expect," "anticipate," "project," "plan," "intend," "believe," "forecast," "foresee," "likely," "may," "should," "goal," "target," "might," "will," "could," "predict," and "continue." Forward-looking statements are only predictions based on our current knowledge, expectations, and projections about future events.

These forward-looking statements are subject to a number of risks, uncertainties, and assumptions, including the following:

•changes in the price, demand, or supply of our products and services;

•challenges and legal proceedings related to our water rights;

•our ability to successfully identify and implement any opportunities to grow our business whether through expanded sales of water, Trio®, byproducts, and other non-potassium related products or other revenue diversification activities;

•the costs of, and our 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;

•our ability to prevail in outstanding legal proceedings against us;

•our ability to comply with the terms of our revolving credit facility, including the underlying ~~covenants, to avoid a default under that agreement;~~covenants;

•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 our 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;

•our 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;

•our inability to fund necessary capital investments;

•global inflationary pressures and supply chain challenges;

•the impact of global health issues, such as the COVID-19 pandemic, and other global disruptions on our business, operations, liquidity, financial condition and results of operations; and

•the other risks, uncertainties, and assumptions described in Item 1A. Risk Factors of our Annual Report on Form 10-K for the year ended December 31, ~~2021, as updated by our subsequent Quarterly Reports on Form 10-Q.~~2022.

2119

Table of Contents

In addition, new risks emerge from time to time. It is not possible for our management to predict all risks that may cause actual results to differ materially from those contained in any forward-looking statements we may make.

In light of these risks, uncertainties, and assumptions, the future events and trends discussed in this Quarterly Report may not occur and actual results could differ materially and adversely from those anticipated or implied in these forward-looking statements. As a result, you should not place undue reliance on these forward-looking statements. We undertake no obligation to update or revise publicly any forward-looking statements to conform those statements to actual results or to reflect new information or future events.

Throughout this Quarterly Report, we refer to average net realized sales price per ton, which is a non-GAAP financial measure. More information about this measure, including a reconciliation of this measure to the most directly comparable GAAP financial measure, is below under the heading "Non-GAAP Financial Measure."

2220

Table of Contents

Company Overview

We are 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. We are the only U.S. producer of muriate of potash (sometimes referred to as potassium chloride, KCl or 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, we produce a specialty fertilizer, Trio®, which delivers three key nutrients, potassium, magnesium, and sulfate, in a single particle. We also provide water, magnesium chloride, brine and various oilfield products and services.

Our extraction and production operations are conducted entirely in the continental United States. We produce potash from three solution mining facilities: our HB solution mine in Carlsbad, New Mexico, our solution mine in Moab, Utah, and our brine recovery mine in Wendover, Utah. We also operate our North compaction facility in Carlsbad, New Mexico, which compacts and granulates product from the HB mine. We produce Trio® from our conventional underground East mine in Carlsbad, New Mexico. Until mid-2016, we also produced potash from our East and West mines in Carlsbad, New Mexico.

We have permitted, licensed, declared and partially adjudicated water rights in New Mexico under which we sell water primarily to support oil and gas development in the Permian Basin near our Carlsbad facilities. ~~We continue to work to expand our sales of water.~~ In May 2019, we acquired certain land, water rights, state grazing leases for cattle, and other related assets from Dinwiddie Cattle Company. We refer to these assets and operations as "Intrepid South." Due to the strategic location of Intrepid South, part of our long-term operating strategy is selling small parcels of land, including restricted use agreements of surface or subsurface rights to customers, where such sales provide a solution to a customer's operations in the oil and gas industry.

We have three segments: potash, Trio®, and oilfield solutions. We account for the sale of byproducts as revenue in the potash or Trio® segment based on which segment generated the byproduct. Intersegment sales prices are market based and are eliminated.

~~Table of Contents~~

~~Environmental, Social, and Governance~~

We are committed to a goal of providing consistent returns to our shareholders while maintaining a strong sense of good corporate citizenship that places a high value on the welfare of our employees, the communities in which we operate, the customers we serve, and the world as a whole. We believe that prioritizing, improving, and managing our Environmental, Social, and Governance (“ESG”) goals will allow us to better create long-term value for our investors. We have made our ESG program a key initiative for our management team and we are committed to develop a plan that will provide focused reporting on ESG issues that we believe are the most relevant to our business and that are the most important to our stakeholders. We understand that clearly disclosing the goals and metrics related to our ESG programs will allow our stakeholders to be informed about our progress and we look forward to expanding our ESG disclosures in future periods. A summary of our ESG goals under the United Nations Sustainable Development Goals framework is available on our website at intrepidpotash.com. The information found on, or that can be accessed through, our website is not part of this or any other report we file with, or furnish to, the SEC. An update on recent ESG highlights and initiatives is shown below.

~~Commitment to the Environment~~

We rely on the environments, resources and ecosystems surrounding our locations in all segments of our business. We work closely with our communities and make it a priority to protect the natural resources surrounding our operations.

–Full-Cycle Water Management - We are actively developing water treatment and recycling operations in the Delaware Basin. Recycled water will reduce the amount of produced water that is injected into produced water disposal wells.

–Solar solution mining potash - All of our potash is currently produced at solar solution mines, one of the most environmentally friendly and energy efficient mining techniques. We inject a naturally occurring, salt saturated brine solution into underground caverns or previously shuttered mine workings. This brine selectively dissolves the remaining potash, which is then pumped back to the surface and into evaporation ponds. During the spring and summer months, the brine naturally evaporates, leaving only the salt and potash solids in the ponds, which we then process into the products we sell. By using solar energy, we do not need to burn natural gas or coal to evaporate our brine ponds.

–Salt laydown at the Bonneville Salt Flats - We are committed to helping maintain the environments in which we operate, one of which is the Bonneville Salt Flats near our Wendover, Utah mine. Since 2005, we have donated free of cost to the Bureau of Land Management ("BLM") nearly 7 million tons of salt that has been deposited on the racetrack to help preserve this unique attraction in northwest Utah. We drilled an additional brackish well in 2021 to increase the brine available for the salt laydown project.

–~~We are the only OMRI-listed muriate of potash and langbeinite producer in the United States. We became OMRI-listed in 2007 for our langbeinite, or Trio~~® product, and in 2018 for our potash products at our Moab and Wendover operating facilities. We are also registered in the Organic Input Material Program through the California Department of Food and Agriculture, a program which registers fertilizers that can be used in organic crop and food production.

–We work closely with the BLM and other government and regulatory agencies to preserve historical sites near our operations such as the Maroon Cliffs in Carlsbad, New Mexico and petroglyphs near our Utah operations. We also work with and have supported agencies dedicated to studying and protecting endangered species near our operations such as the sand dune lizards in New Mexico.

~~Our Social Impact and Supporting our Communities~~

~~Our employees live and work in small, tight-knit communities and we are deeply involved in volunteering and being active community members.~~

Our New Mexico operations have partnered with the United Way of Carlsbad and South Eddy County since 2004, participating in a variety of community-focused events and activities such as United Way's annual Day of Caring event. We encourage all our employees to volunteer in their communities and we offer all our full-time employees three paid volunteer days each year to support either a charitable organization of their choosing or participate in an Intrepid sponsored volunteer project.

~~Our Commitment to a Diverse Workforce~~

We are committed to recruiting and hiring processes that encourage and embrace diversity. We believe a diverse workforce leads to greater collaboration, innovation, and improves shareholder returns. We celebrate the diversity and differences in our employees. We support a variety of organizations within our communities including the Women's Leadership Foundation, a Colorado based organization with the goal of opening more board of director positions to women leaders in Colorado and beyond.

~~Table of Contents~~

~~Our Commitment to Safety~~

Safety audits are conducted across all our locations to ensure a thoughtful approach can be taken that increases the safe execution of all tasks. Through our audits and dialogue, we educate ourselves and understand the potential hazards present, create best practices that can be shared, and address areas where improvements can be made. Prior to each task, employees are required to: assemble the proper personal protection equipment, tools, permits, etc., ensure the area is safe for employees and contractors, discuss the task with all stakeholders, and understand how the task is related to the overall business.

We conduct safety audits of our operations on a monthly basis. The data from these safety audits is collected to analyze where, what, and why gaps exist, and to provide meaningful information that results in safer work for our employees.

In August 2021, our East Mine in Carlsbad, New Mexico received the National 2020 Sentinels of Safety Award in the large underground nonmetal category. The Sentinels of Safety Award is presented by the National Mining Association each year to recognize the outstanding safety achievements of mining operations across a variety of categories. Our East Mine was also awarded the Rocky Mountain Mining Institute's 2022 Safety Award for Large Underground Mines, an award given for the outstanding safety performance at the mine during 2021.

In October 2022, our East Mine in Carlsbad, New Mexico was awarded the National 2021 Sentinels of Safety Award in the large underground nonmetal category, its second consecutive year receiving the award.

~~Business Ethics~~

Since inception, Intrepid has placed the highest emphasis on conducting its business with honesty and integrity. These standards are expected of management and employees alike, and we continuously strive to create a corporate culture of honesty, integrity, and trust.

~~The policies we have developed are intended to:~~

–~~Maintain and communicate our core value of integrity and disseminate our core values and the legal requirements applicable to good business conduct and ethical behavior.~~

–~~Provide annual refresher training on company policies, values, interpreting laws, and handling a variety of potential company-related issues and situations.~~

–~~Provide resources for employees to report any suspected violations of our company policies, including an anonymous employee hotline via phone and internet.~~

–~~Provide clear and well-defined procedures by which employees can easily obtain information, ask questions, and, if necessary, report any suspected violations of any of our Business Ethics policies.~~

–~~Maintain and communicate a Code of Business Conduct and Ethics which clearly articulates the company’s values, culture, and practices.~~

2521

Table of Contents

Significant Business Trends and Activities

Our financial results have been, or are expected to be, impacted by several significant trends and activities, which are described below. We expect that the trends described below may continue to impact our results of operations, cash flows, and financial position.

• Potash pricing and demand. Our potash average net realized sales price per ton ~~increased~~decreased to ~~$734~~$485 for the three months ended ~~September 30, 2022,~~March 31, 2023, compared to ~~$381~~$703 for the same period in ~~2021, as multiple price increases announced over~~2022. Although global potash production continues to trend below normal rates due to sanctions on Belarusian potash, demand deferral due to high prices led to greater than expected carryover inventory from the last year continued to improve our realized pricing. We expect current agricultural commodity prices and good farmer economics to continue to support application rates across our markets and we believe most customers see good value in2022 spring season, lessening concerns about potash ~~in today's market despite minimal restock after the spring season.~~

~~Compared to the prior year, we saw minimal buying in the latter part of~~availability through the second ~~quarter as buyers were reluctant to hold inventory for future application at current price levels.~~half of 2022. This ~~sentiment continued through the third quarter as limited~~deferred demand resulted in ~~good product availability~~comfortable inventory positions in most markets to start 2023 and ~~kept most buyers~~a reset of potash pricing in January 2023 to $480 per ton. During the first quarter of 2023, spot price decreased slightly from ~~purchasing tons that were not committed~~the posted Midwest warehouse price to ~~end users for immediate application. As a result, sales~~approximately $465 per ton, finding support at current levels with the spring season well underway. Sales volume ~~decreased 26%~~increased 29% in the ~~third~~first quarter of ~~2022, when compared to the same period in the prior year. Sales volumes for the nine months ended September 30, 2022, decreased 36% when~~2023 compared to the same period in the prior year, primarily due to the deferred demand from the fourth quarter of 2022. Despite the decreased price levels compared to last year, our customers continue to layer in orders as the spring season progresses and we expect most distributors are targeting minimal ~~restock~~carryover inventory after the spring season ~~combined with reduced inventory levels across our facilities to begin the year and less spring production~~ due to ~~a lower than average 2021 summer evaporation season.~~

Global potash production remains below normal levels as sanctions on Belarusian potash continue to limit exports. Canadian producers have responded to these production decreases with incremental production ramp-ups, but there are limited near-term supply increases available to replace the tons we believe are currently offline and we expect global supply will be significantly below normalan expectation of flat or decreased price levels in ~~2022, and likely longer.~~the second half of 2023.

As a small producer, domestic pricing of our potash is influenced principally by the price established by our competitors. The interaction of global potash supply and demand, ocean, land, and barge freight rates, currency fluctuations, and crop commodity values and outlook, also influence pricing. Our price expectations could be affected by, among other things, weather, planting decisions, rail car availability, commodity price decreases and the price and availability of other potassium products.

We experience seasonality in potash demand, with more purchases historically occurring in ~~March~~February through May and September through November when purchasers are looking to have product on hand for the spring and fall application seasons in the ~~United States.~~U.S. Various factors affect potash sales and shipments, thereby increasing volatility of sales volumes from quarter to quarter and season to season. The specific timing of when farmers apply potash remains highly weather dependent and varies across the numerous growing regions within the U.S. The timing of potash sales is also significantly influenced by the marketing programs of potash producers, as well as storage volumes closer to the farm gate. Our sales volumes into the industrial market correlate to drilling activity in the oil and gas market. While most COVID-19 related restrictions have been lifted, reinstatement of such restrictions may impact future fertilizer application seasons if such actions affect available labor, transportation logistics, or cause supply disruptions.

• Trio® pricing and demand. ~~Third quarter 2022~~Our Trio® ~~results benefited from the multiple price increases announced in recent quarters, resulting in third quarter 2022~~ average net realized ~~pricing of $488~~sales price per ton decreased to $344 for the three months ended March 31, 2023, compared to ~~$336 per ton in~~$469 for the same period ~~of 2021.~~in 2022. Similar to the potash market, buyers ended the 2022 spring season with more inventory than expected and were reluctant to purchase Trio® ~~sales volume~~during the second half of 2022 due to the expectation of declining prices. This led to a reset of pricing in the ~~third~~first quarter of ~~2022 decreased 15% compared~~2023 and sufficient inventory in many regions pressured spot pricing down during the first quarter. Supportive commodity prices and strong farmer balance sheets led to ~~the prior year period as buyers remain reluctant to refill storage for future application periods~~good subscriptions at current price ~~levels.~~levels, and we expect the sales will continue at a steady pace into the second quarter. In line with potash, we expect most distributors will be targeting minimal carryover inventory after the spring season.

We also experience seasonality in domestic Trio® demand, with more purchases coming in the first and second quarters in advance of the spring application season in the U.S. In turn, we generally have increased inventory levels in the third and fourth quarters in anticipation of expected demand for the following year. Further actions taken in response to the COVID-19 pandemic may also impact seasonal demand patterns if there is an effect on available labor, transportation logistics, or supply disruptions. We continue to operate extra underground shifts to increase our availability of Trio® ~~in response to continued good demand and a favorable outlook.~~

• Water sales. In the ~~third~~first quarter of ~~2022,~~2023, total water sales were ~~$6.6~~$2.7 million compared to ~~$6.0~~$6.2 million during the same period of ~~2021. Rig counts, oil pricing,~~2022. Water sales decreased compared to the prior year due to fewer fracs on our South ranch and ~~oilfield activity continue~~less water sold from our Caprock water rights. Water purchased to ~~support drilling and completion activity near~~supplement our ~~operations, although global economic uncertainty and~~sales at Intrepid South decreased approximately $1.0 million compared to the ~~conflict~~period year, resulting in ~~Ukraine makes forecasting future oilfield activities difficult.~~decreased sales compared to the first quarter of 2022.

See Note 14 of our unaudited condensed consolidated financial statements included in "Item 1. Condensed Consolidated Financial Statements (Unaudited)" of this Quarterly Report on Form 10-Q regarding legal proceedings related to our water rights.

~~Table of Contents~~

• Byproduct sales. We sell byproducts such as salt, magnesium chloride, brines, and water that are derived from our potash and Trio® operations. Byproduct sales were ~~$7.1~~$6.6 million during the ~~third~~first quarter of ~~2022,~~2023, compared to ~~$6.4~~$6.3 million for the same period of ~~2021.~~2022. Salt sales increased compared to the prior year period due to growth in the industrial salt market combined with higher realized pricing. Brine sales improved compared to the prior year as we capitalized on increased oilfield activity near our operations.

• Inflation. ~~Heightened levels~~Beginning in the summer of ~~inflation~~2022, we have ~~led to~~experienced increased labor ~~expense~~costs and ~~other production costs. We have experienced~~ increased costs for various supplies ~~as suppliers have raised prices in response~~due to inflationary pressures. ~~During~~While overall inflation rates have slowed down to begin 2023, we continue to experience year-over-year cost increases well-above those of the ~~first three quarters of 2022, increases in our selling price per ton of potash and Trio~~® ~~have outpaced our increased production costs. However, if~~past five years. If potash and Trio® prices remain flat or

Table of Contents

decline, inflation remains at current levels or increases for an extended period of time, and we are unable to mitigate the impact of inflation, our production costs could increase further or in excess of any price increases, which could result in lower margins and net income.

• ~~Weather impact.~~ Evaporation rates in 2021 were below average across our facilities which led to decreased potash production in the second half of 2021 and led to decreased potash production in the spring of 2022 when compared to the prior year. We received a significant amount of rainfall at our HB facility in Carlsbad, New Mexico late in the summer of 2021 which limited the amount of solids available in our ponds. As a result of the reduced potash production, we recorded abnormal production costs of $6.0 million in fiscal year 2021.

• Strategic Focus on our Solar Solution Mining Facilities. Improved financial position allows us to accelerate capital investment to enhance the production of our solar solution mines. Key current and future projects include:

–~~Drilling~~Substantially completed a ~~least one~~ new three-lateral horizontal potash cavern at Moab ~~beginning~~in April of 2023 and expect the cavern will be online in the ~~fourth~~second quarter of ~~2022~~2023. During the drilling process, we were able to stay in the target interval for longer than any of our other previous drilled horizontal caverns and initial brine measurements show good availability of high-grade KCl. With the addition of the new cavern, we expect to increase brine availability which should result in improved and more consistent production for the next several ~~years~~years.

–ACurrently drilling the first of a series of horizontal wells into the original Moab mine to drain ~~high grade~~high-grade potash brine from low spots (sumps) which we believe have collected significant quantities of ~~high grade brine is planned for 2023~~high-grade brine.

–Installation of an improved pipeline system to our HB Solar Solution Mine, which is designed to increase water volume and flow capacity through the pipeline to efficiently inject water into the HB Solar Solution Mine as part of our mining process. We expect installation will use various water rights to meet the water demands of HB Solar Solution Mine through the improved pipeline system that should allow us to efficiently produce additional solar tons and conduct the operations of our processing facilities at a lower cost. We expect to improve the injection rate capability of our pipeline system as early asbe complete in the first ~~quarter~~half of 2023 and expect greater flow rates within the improved pipeline system in second half of ~~2023~~2023.

–Successfully completed a deep brine well in Wendover in the fourth quarter of 2022 which has increased brine availability and should allow us to better manage variable weather and evaporation ~~rates~~

–~~At least one additional deep brine well and two brackish water wells are planned for our Wendover facility in 2023~~rates.

• Diversification of products and services. In addition to the products discussed above, Intrepid generates revenue from right-of-way agreements, surface damages and easements, caliche sales, a produced water royalty, and sales of cattle. We are also currently negotiating water transfer agreements with customers throughout the basin to utilize our existing infrastructure.

We announced in the first quarter of 2022 that Intrepid has initiated a joint feasibility study alongside the New Mexico Produced Water Research Consortium ("NMPWRC") and the New Mexico Environment Department ("NMED")continue to evaluate the potential of using treated produced water from oil and gas operations as injectate for our HB solar solution mine. Intrepid has produced a pilot project scoping document which has been accepted by the NMPWRC. We believe the earliest we would begin a pilot test is the second half of 2023. Further evaluation of produced water constituents and the treatment process necessary to use produced water at our HB solar solution mine may cause us to experience further delays to our schedule and we may decide to discontinue the project altogether.

~~We have begun the initial development planning for~~progress on a sand mine opportunity on our strategically located South Ranch. ~~This project has~~We are currently undergoing an archeological study in the ~~potential to produce over 600k~~area while progressing on necessary permits and sourcing of supplies and equipment. As previously discussed, we are targeting approximately one million tons per year of ~~sand for sale into~~wet sand. We expect to begin construction in the ~~Delaware Basin. Total capital investment is estimated at $16 million. We are targeting initial production late~~fourth quarter of 2023. However, delays in ~~Q1 2023, although~~obtaining necessary permits and ongoing supply chain issues ~~and timing around the receipt of necessary permits remains uncertain. This~~ could delay our ~~first production to the second half of 2023.~~construction and subsequent start-up date.

We continue to review opportunities to leverage our existing oil and gas midstream businesses in southeast New Mexico and expand into additional oil and gas midstream and upstream activities. This expansion may be through organic growth, other strategic investments, partnerships, or acquisitions of complementary businesses that expand our product and

~~Table of Contents~~

service offerings beyond our existing assets or products. Additionally, we may expand into oil and natural gas exploration and production or into new products or services in our current industry or other industries.

2823

Table of Contents

Consolidated Results


(in thousands, except per ton amounts)	(in thousands, except per ton amounts)	Three Months Ended September 30,				Nine Months Ended September 30,				(in thousands, except per ton amounts)	Three Months Ended March 31,
		2022		2021		2022		2021			2023		2022
Sales1	Sales1	$	74,752	$	59,153	$	270,891	$	198,504	Sales1	$	86,920	$	104,399

Cost of goods sold	Cost of goods sold	$	37,648	$	34,974	$	120,656	$	123,815	Cost of goods sold	$	56,245	$	44,510

Gross Margin	Gross Margin	$	26,770	$	10,608	$	115,757	$	33,915	Gross Margin	$	16,352	$	47,176

Selling and administrative	Selling and administrative	$	8,551	$	5,890	$	22,558	$	18,293	Selling and administrative	$	8,858	$	6,789

Net Income	Net Income	$	13,108	$	4,023	$	68,238	$	25,973	Net Income	$	4,506	$	31,422

Average net realized sales price per ton2	Average net realized sales price per ton2									Average net realized sales price per ton2
Potash	Potash	$	734	$	381	$	718	$	319	Potash	$	485	$	703
Trio®	Trio®	$	488	$	336	$	482	$	271	Trio®	$	344	$	469

1Sales include sales of byproducts which were ~~$7.1~~$6.6 million and ~~$6.4~~$6.3 million for the three months ended ~~September 30,~~March 31, 2023, and 2022, ~~and 2021, respectively, and $19.0 million and $18.8 million for the nine months ended September 30, 2022, and 2021,~~ respectively.

2Average net realized sales price per ton is a non-GAAP financial measure. More information about this non-GAAP financial measure is below under the heading "Non-GAAP Financial Measure."

Consolidated Results for the Three Months Ended ~~September 30,~~March 31, 2023, and 2022 ~~and 2021~~

Sales

Our total sales for the ~~third~~first quarter of ~~2022 increased $15.6~~2023 decreased $17.5 million, or ~~26%~~17%, as compared to the ~~third~~first quarter of ~~2021,~~2022, as potash sales ~~increased $9.6~~decreased $4.5 million, or ~~36%~~9%, Trio® sales ~~increased $3.7~~decreased $10.6 million, or ~~19%~~27%, oilfield solutions segment sales ~~increased $1.7~~decreased $2.8 million, ~~and~~or 39%, partially offset by a $0.3 million increase in byproduct ~~sales increased $0.6 million.~~sales.

Our potash sales ~~increased $9.6~~decreased $4.5 million for the ~~third~~first quarter of ~~2022,~~2023, as compared to the ~~third~~first quarter of ~~2021,~~2022, as our average net realized sales price per ton ~~increased 93%~~decreased 31%, partially offset by a ~~26% decrease~~29% increase in tons sold. ~~Potash pricing remained strong as the global supply~~We sold more tons of potash ~~remained tight due~~in the first quarter of 2023, compared to the ~~uncertainty of potash supply from Eastern Europe and due to supportive crop economics. Our potash sales volumes decreased in the third~~first quarter of 2022, as ~~compared~~we had fewer tons of potash available to sell to begin 2022. Additionally, regional drought conditions in the ~~third quarter of 2021, as distributors ended~~U.S. entering the 2022 spring application season negatively affected demand for our potash. Drought conditions in many of these regions improved entering the 2023 spring application season, which increased demand for our potash in the first quarter of 2023.

Potash prices increased significantly during the first quarter of 2022, as strong farm commodity prices coupled with concerns surrounding potash supplied from Eastern European potash producers drove increased purchases. Many distributors forward purchased more tons of potash than historically during the first half of 2022 in anticipation of potential potash shortages. Consequently, as growers deferred demand due to high prices, carryover inventory after the 2022 spring application season was higher than expected, leading to comfortable inventory levels to begin 2022 fall application season. Growers continued a cautious buying approach which led to eventual price declines during the second half of 2022 and in ~~2021, and remained reluctant to purchase tons that were not committed to end users for immediate application.~~the first quarter of 2023.

Our Trio® sales ~~increased $3.7~~decreased $10.6 million, or ~~19%~~27%, in the ~~third~~first quarter of ~~2022,~~2023, as compared to the ~~third~~first quarter of ~~2021,~~2022, as our average net realized sales price per ton ~~increased 45%~~decreased 27%, ~~partially offset by a 15%~~combined with an 8% decrease in tons sold. Our Trio® average net realized sales price per ton ~~increased~~decreased during the ~~third~~first quarter of ~~2022,~~2023, compared to the ~~third~~first quarter of ~~2021,~~2022, as the price of potash and other potassium fertilizers ~~has increased due to~~decreased as expected global potassium supply concerns ~~partially offset by an increase in~~during the first half of 2022 alleviated during the second half of 2022. Trio® ~~sales internationally, which generally have~~demand was also negatively impacted by higher-than-normal carryover inventory levels after the 2022 spring application season with buyers taking a ~~lower average net realized sales price due~~more cautious buying approach to ~~increased freight expense compared to domestic sales. Our tons~~begin 2023 and the relative value of Trio®~~sold declined as we sold fewer tons of Trio~~® ~~domestically during the third quarter of 2022,~~ compared to ~~the third quarter of 2021,as domestic customers have been reluctant~~potash declined due to ~~restock inventory for future application periods, partially offset by an increase in Trio~~® ~~tons sold internationally.~~ weakening potash prices.

Our oilfield solutions segment sales, which includes sales of water, brine water, and surface use and easements, ~~increased $1.7~~decreased $2.8 million, or ~~26%~~39%, in the ~~third~~first quarter of ~~2022,~~2023, as compared to the ~~third~~first quarter of ~~2021,~~2022, mainly driven by a ~~$1.0~~$2.6 million ~~increase~~decrease in water ~~sales, a $0.5 million increase in brine water sales, and a $0.2 million increase in our other oilfield solutions products and services. Our oilfield solutions sales increases were driven by increased~~sales. While oil and gas activities near our Intrepid South property remained strong during the first quarter of 2023, our water sales decreased because of the timing of fracs during the first quarter of 2023 compared to the first quarter of 2022.

Our total byproduct sales, which are recorded in either our potash segment or Trio® segment increased ~~$0.6~~$0.3 million or ~~10%~~5% in the ~~third~~first quarter of ~~2022,~~2023, as compared to the ~~third~~first quarter of ~~2021,~~2022, due to a $0.5 million increase in byproduct brine water

Table of Contents

sales, a ~~$0.4~~$0.3 million increase in byproduct salt sales, and a $0.3 million increase in magnesium chloride sales, partially offset by a ~~$0.4~~$0.8 million decrease in byproduct water sales. Our byproduct brine water sales increased due to ~~increased~~continued strong demand related to oil and gas activities in southeastern New Mexico, and our byproduct salt and magnesium chloride sales increased due to ~~an increase~~winter weather conditions in ~~sales to~~ the ~~industrial salt market.~~western U.S. during the first quarter of 2023. Our byproduct water sales decreased ~~as a higher percentage of~~due to our ~~total barrels of~~overall decrease in water sold ~~was from Intrepid South and those water sales were recorded~~ in ~~our oilfield solutions segment.~~

~~Table~~the first quarter of ~~Contents~~

2023, compared to the first quarter of 2022.

Cost of Goods Sold

Our total cost of goods sold increased ~~$2.7~~$11.7 million, or 8%26%, during the ~~third~~first quarter of ~~2022,~~2023, as compared to the ~~third~~first quarter of ~~2021.~~2022. Our ~~oilfield solutions~~potash cost of goods sold increased ~~$2.0~~$9.6 million, and our Trio® cost of goods sold increased ~~$1.8~~$3.4 million, partially offset by a $1.3 million decrease ~~of $1.0 million~~ in our ~~potash~~oilfield solutions cost of goods sold.

Our ~~oilfield solutions~~potash cost of goods sold increased ~~$2.0 million, or 32%, during~~43% as we sold 29% more tons of potash in the ~~third~~first quarter of ~~2022,~~2023, compared to the ~~third~~first quarter of ~~2021,~~2022. In addition, our potash weighted-average carrying cost per ton increased as ~~we incurred~~various production costs, such as labor and natural gas, increased ~~water transportation costs and we purchased additional third-party water~~due to ~~meet customers' water demand.~~continued inflation.

Our Trio® cost of goods sold increased ~~$1.8~~$3.4 million, or ~~17%~~20%, during the ~~third~~first quarter of ~~2022,~~2023, as compared to the ~~third~~first quarter of ~~2021.~~2022. While we sold ~~15%~~8% fewer tons of Trio® during the ~~third~~first quarter of ~~2022,~~2023, compared to the ~~third~~first quarter of ~~2021,~~2022, our Trio® ~~weighted average~~weighted-average cost per ton increased as we incurred increased ~~labor costs as we operated an additional underground shift at our East facility,~~maintenance expenses and various other production costs, ~~continued to increase~~such as labor and natural gas, increased due to continued ~~inflation, royalty expense increased due to increased revenues and~~inflation. In addition, we produced fewer tons in the first quarter of ~~Trio~~® ~~as we mined lower grade ore.~~ 2023 compared to the first quarter of 2022 which increase our weighted-average cost per ton. Most of our Trio® production costs are fixed and a decrease in Trio® tons produced increases our Trio® weighted average cost per ton.

Our ~~potash~~oilfield solutions cost of goods sold decreased ~~6% as we sold 26% fewer tons~~$1.3 million, or 25%, during the first quarter of ~~potash in~~2023, compared to the ~~third~~first quarter of 2022, ~~compared to the third quarter of 2021. However, our potash weighted average carrying cost per ton increased~~ as ~~certain production~~we incurred less water transportation costs ~~such as natural gas and electricity, continued to increase due to continued inflation~~ and we ~~incurred increased royalty expense as sales revenues increased.~~

~~Abnormal Production~~

During the third quarter of 2021, the Carlsbad, New Mexico area where our HB solar solution mining facility is located received significant rainfall, well above the historical rainfall average during this period. Additionally, humidity was higher than normal and temperatures were cooler than average during the third quarter of 2021, which reduced our pond production and our ability to extract brine. Because of the wet, humid weather and cooler temperatures, we had fewer harvestable tons of potash from our HB solution ponds. Accordingly, we recorded abnormal production costs of $3.6 million during the third quarter of 2021. We did not ~~incur~~purchase any ~~abnormal production costs during the third quarter of 2022.~~additional third-party water.

Gross Margin

During the ~~third~~first quarter of ~~2022,~~2023, we generated gross margin of ~~$26.8~~$16.4 million compared to gross margin of ~~$10.6~~$47.2 million during the ~~third~~first quarter of ~~2021,~~2022. As discussed above, our gross margin decreased mainly due to the ~~factors discussed above.~~lower average net realized sales price per ton for potash and Trio®.

Selling and Administrative Expense

During the ~~third~~first quarter of ~~2022,~~2023, selling and administrative expenses increased ~~45%~~30% compared to the ~~third~~first quarter of ~~2021.~~2022. Our corporate salary expense increased $0.8 million, and our stock compensation expense increased $0.5 million. Both increases were related to having more corporate employees in the first quarter of 2023, compared to the first quarter of 2022. Our other professional services expenses, which includes legal expenses, increased ~~$1.2~~$0.5 million ~~due~~related to various ongoing issues involving our water rights and other ongoing legal matters. Our stock compensation expense increased $1.1 million due to the timing of grant awards in 2022, compared to 2021. Finally, our labor and benefits expense increased $0.5 million as we have hired additional employees in 2022 and annual salary increases became effective in March 2022.issues.

Income Tax Expense

During the ~~third~~first quarter of ~~2022,~~2023, we incurred income tax expense of ~~$4.9~~$1.8 million, ~~and we incurred no~~compared to income tax expense of $9.1 million during the ~~third~~first quarter of 2021. As of September 30, 2021, we had a full valuation allowance against our deferred tax assets and any changes in our deferred tax assets were offset by a corresponding change in our valuation allowance. Since we released substantially all of our valuation allowance in the fourth quarter of 2021, changes in our deferred tax assets are no longer fully offset by a change in our valuation allowance.2022.

Net Income

We generated net income of ~~$13.1~~$4.5 million during the ~~third~~first quarter of ~~2022,~~2023, compared to net income of ~~$4.0 million for the third quarter of 2021, due to the factors discussed above.~~

~~Consolidated Results for the Nine Months Ended September 30, 2022, and 2021~~

Our total sales for the nine months ended September 30, 2022, increased $72.4 million, or 36%, compared to the nine months ended September 30, 2021. Our potash sales during the first nine months of 2022 increased $34.4 million, or 35%, compared to the first nine months of 2021, as our potash average net realized sales price per ton increased 125%, partially offset by a 36% decrease in tons sold. Our average net realized sales price per ton increased as strong commodity prices support robust application and global supply remained tight due to the uncertainty of potash supplied from Eastern Europe. Our potash sales volumes decreased in the first nine months of 2022, compared to the first nine months of 2021, as distributors have been reluctant to purchase potash to build inventories in anticipation of the fall application season. Also, we had fewer potash tons to

~~Table of Contents~~

~~sell during the first nine months of 2022, as we produced fewer tons of potash due to below average evaporation rates across our facilities in 2021.~~

~~Our Trio~~® ~~sales increased $29.1 million, or 43%, during the first nine months of 2022, compared to the first nine months of 2021. Our Trio~~® average net realized sales price per ton increased 78% during the first nine months of 2022, compared to the first nine months of 2021, due to tight global supplies of potassium fertilizers. We sold 12% fewer tons of Trio® ~~in the first nine months of 2022, compared to the first nine months of 2021. Our Trio~~® ~~product is primarily applied during the spring application season, and similar to potash customers, Trio~~® ~~customers have been reluctant to purchase Trio~~® ~~to build inventory for the spring 2023 application season.~~

Our oilfield solutions segment sales, which includes sales of water, brine water, and surface use and easements, increased $8.6 million, or 60%. during the first nine months of 2022, compared to the first nine months of 2021. Oilfield solutions segment water sales and brine water sales increased $3.8 million, and $1.4 million, respectively. Our sales of other oilfield solution segment offerings, including surface use and easement agreements, surface minerals, and produced water royalties increased $3.4 million, or 85%, in the first nine months of 2022, compared to the first nine months of 2021, driven by a $2.7 million increase in surface use and easement revenues, a $0.6 million increase in produced water royalties, and a $0.2 million increase in surface mineral sales. Our oilfield solutions segment sales increased due to increased oil and gas activities during the first nine months of 2022, compared to the same period in 2021, as oil prices were generally higher in the 2022 period compared to the 2021 period.

~~Our total byproduct sales, which are recorded in either our potash segment or Trio~~® segment, increased $0.2 million, or 1%, in the first nine months of 2022, compared to the first nine months of 2021, as our byproduct salt sales increased $1.6 million, our byproduct brine water sales increased $0.9 million, partially offset by a decrease of $1.8 million in byproduct magnesium chloride sales and a decrease of $0.5 million in byproduct water sales. Our byproduct brine water sales increased due to increased oil and gas activities during the first nine months of 2022, compared to the first nine months of 2021. Our byproduct salt sales increased due to increased sales in the industrial salt market and higher salt prices. Our byproduct magnesium chloride product is used primarily as a deicing agent during the winter months and as a dedusting agent during the spring and summer months. Our magnesium chloride sales declined as mild winter weather in various parts of the U.S. decreased demand for deicing products and wet weather in the early spring months in various parts of the U.S decreased demand for dedusting agents. Our byproduct water sales decreased as a higher percentage of our total barrels of water sold was from Intrepid South and recorded in our oilfield solutions segment. Water sales from Intrepid South are recorded in our oilfield solutions segment while water sold that was used in the production of potash and Trio® ~~is recorded as byproduct water sales in the potash or Trio~~® ~~segments.~~

~~Cost of Goods Sold~~

Our total cost of goods sold decreased $3.2 million, or 3%, during the first nine months of 2022, compared to the first nine months of 2021. Our potash cost of goods sold decreased $9.9 million, or 14%, during the nine months of 2022, compared to the first nine months of 2021, as we sold 36% fewer tons of potash, partially offset by an increase in our weighted average carrying cost per ton caused by increased production costs due to inflation. Additionally, we produced fewer tons of potash in 2022, due to below average evaporation across all of our potash facilities during 2021. Most of our potash production costs are fixed and a decrease in potash tons produced increases our per ton weighted average cost. Additionally, we incurred increased royalty expense as our potash sales revenue increased in 2022.

~~Our Trio~~® ~~cost of goods sold increased $2.2 million, or 5%, during the first nine months of 2022, compared to the first months of 2021. While we sold 12% fewer tons of Trio~~®~~, our weighted average carrying cost per ton increased as production costs increased due to inflation and we incurred increased royalty expense as our Trio~~® ~~sales revenue increased in 2022.~~

Our oilfield solutions cost of goods sold increased $4.5 million, or 37%, during the first nine months of 2022, compared to the first nine months of 2021, due mainly to increased royalties and increased water transportation costs as we sold more water in the 2022 period. Additionally, we purchased more water from third parties during the 2022 period to meet water demand from our customers.

~~Abnormal Production~~

As discussed above, we recorded abnormal production costs of $3.6 million during the third quarter of 2021. as wet weather and reduced evaporation rates decreased our production at our HB solar solution facility. We did not incur any abnormal production costs during the nine months ended September 30, 2022.

~~Table of Contents~~

~~Gross Margin~~

~~During the first nine months of 2022, we generated gross margin of $115.8 million compared to gross margin of $33.9~~$31.4 million for the first ~~nine months of 2021, driven by a 36% increase in total sales, partially offset by a 3% decrease in our total cost of goods sold, as discussed above.~~

~~Gain/(Loss) on Sale of Assets~~

In the first nine months of 2022, we disposed of various assets in the normal course of business and recorded a loss of $1.2 million. In the first nine months of 2021, we sold 326 acres of land in Texas for $6.0 million and recognized a gain on the sale of the land of $2.8 million. We purchased this land in May 2019 for the development of a produced water disposal facility and had permitted two disposal wells on the property. The gain recorded on the sale of the land was partially offset by losses of $0.2 million related to the disposal of various other assets in the normal course of business.

~~Gain on Extinguishment of Debt~~

~~In June 2021, we recognized a gain of $10.1 million related to the forgiveness of the $10 million Paycheck Protection Program loan and the associated accrued interest on the loan.~~

~~Selling and Administrative Expense~~

During the first nine months of 2022, selling and administrative expenses increased 23% as compared to the first nine months of 2021. The increase was driven by an increase of $1.6 million in labor and benefits expense during 2022, due to increasing wages and hiring more people, an increase of $1.6 million in stock compensation expenses due to the timing of awards granted in 2022 compared to 2021, partially offset by a decrease in consulting expenses.

~~Income Tax Expense~~

During the first nine months of 2022, we incurred income tax expense of $22.1 million, and we incurred no income tax expense during the first nine months of 2021. As of September 30, 2021, we had a full valuation allowance against our deferred tax assets and any changes in our deferred tax assets were offset by a corresponding change in our valuation allowance. Since we released substantially all of our valuation allowance in the fourth quarter of ~~2021, changes in our deferred tax assets are no longer fully offset by a change in our valuation allowance.~~

~~Net Income~~

~~We generated net income of $68.2 million for the nine months ended September 30,~~ 2022, ~~as compared to a net income of $26.0 million for the nine months ended September 30, 2021,~~ due to the factors discussed above.

Table of Contents

Potash Segment


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
(in thousands, except per ton amounts)	(in thousands, except per ton amounts)	2022		2021		2022		2021		(in thousands, except per ton amounts)	2023		2022
Sales1	Sales1	$	42,354	$	31,673	$	147,622	$	112,944	Sales1	$	52,497	$	56,442
Less: Freight costs	Less: Freight costs	3,726		3,928		11,430		13,766		Less: Freight costs	5,005		4,023
Warehousing and handling costs	Warehousing and handling costs	1,414		1,241		3,947		4,004		Warehousing and handling costs	1,480		1,324
Cost of goods sold	Cost of goods sold	17,342		18,385		58,383		68,251		Cost of goods sold	31,584		22,031

Costs associated with abnormal production		—		3,594		—		3,594

Gross Margin	Gross Margin	$	19,872	$	4,525	$	73,862	$	23,329	Gross Margin	$	14,428	$	29,064
Depreciation, depletion, and amortization incurred2	Depreciation, depletion, and amortization incurred2	$	6,318	$	6,257	$	19,350	$	19,895	Depreciation, depletion, and amortization incurred2	$	7,051	$	6,947

Potash sales volumes (in tons)	Potash sales volumes (in tons)	46		62		172		270		Potash sales volumes (in tons)	89		69
Potash production volumes (in tons)	Potash production volumes (in tons)	36		37		164		201		Potash production volumes (in tons)	90		103

Average potash net realized sales price per ton3	Average potash net realized sales price per ton3	$	734	$	381	$	718	$	319	Average potash net realized sales price per ton3	$	485	$	703

1 Sales include sales of byproducts which were ~~$6.2~~$5.3 million and ~~$5.1~~$4.8 million for the three months ended ~~September 30,~~March 31, 2023, and 2022, ~~and 2021, respectively, and $15.9 million and $15.7 million for the nine months ended September 30, 2022, and 2021,~~ respectively.

2 Depreciation, depletion, and amortization incurred excludes depreciation, depletion, and amortization amounts absorbed in or (relieved from) inventory.

3Average net realized ~~per ton~~ sales price per ton is a non-GAAP financial measure. More information about this measure is below under the heading "Non-GAAP Financial Measure."

~~Table of Contents~~

Three Months Ended ~~September 30,~~March 31, 2023, and 2022 ~~and 2021~~

~~Potash~~Our potash sales recorded in the potash segment ~~increased $9.6~~decreased $4.5 million, or ~~36%~~9%, in the ~~third~~first quarter of ~~2022,~~2023, compared to the ~~third~~first quarter of ~~2021,~~2022, as our average net realized sales price per ton ~~increased 93% as global supply remained tight due to the uncertainty~~decreased 31%, partially offset by a 29% increase in tons sold. Our tons of potash ~~supplied from Eastern Europe. Our potash sales volumes decreased in~~sold during the ~~third~~first quarter of 2022 ~~as compared~~was limited because we had less potash available to sell. Additionally, regional drought conditions in the ~~third quarter of 2021, as distributors ended~~western U.S. entering the 2022 spring application season ~~with~~negatively affected demand for our potash. After the wet winter in much of the western U.S., drought conditions improved entering the 2023 spring application season which increased demand for our potash.

Potash prices increased significantly during the first quarter of 2022, as supportive farm commodity prices drove strong global potash demand. In addition, many global distributors forward purchased more potash tons than historically to build inventory levels because of concerns about global supply shortages related to uncertainty around potash supplied from Eastern European producers. Consequently, as growers deferred demand due to high prices, carryover inventory after the 2022 spring application season was higher than expected, leading to comfortable inventory levels to begin the fall application season. With sufficient potash availability and growers continuing a cautious approach to purchasing potash, price declined during the second half of 2022 and in ~~2021, and remain reluctant to purchase tons that are not committed to end users for immediate application.~~the first quarter of 2023.

Our potash segment byproduct sales increased ~~$1.1~~$0.5 million, or ~~21%~~11%, in the ~~third~~first quarter of ~~2022,~~2023, compared to the ~~third~~first quarter of ~~2021.~~2022. The increase in potash segment byproduct sales was driven by a $0.5 million increase in ~~potash segment~~ byproduct brine water sales, a ~~$0.3~~$0.4 million increase in potash segment byproduct salt sales, and a ~~$0.2~~$0.3 million increase in byproduct magnesium chloride sales, partially offset by a $0.7 million decrease in potash segment byproduct water sales. ~~Increased~~Our potash segment byproduct brine water sales increased as oil and gas activity near our facilities in New Mexico remained robust. Our potash segment byproduct salt sales and our byproduct magnesium chloride sales increased due to significant snowfall in various parts of the western U.S. in the first quarter 2023. Our potash segment byproduct water sales ~~were~~decreased due to ~~increased oil and gas activities. Increased potash segment byproduct salt sales were due to increased sales~~our overall decrease in water sold in the ~~industrial salt market.~~first quarter of 2023, compared to the first quarter of 2022.

Potash segment freight expense ~~decreased 5%~~increased 24% in the ~~third~~first quarter of ~~2022,~~2023, compared to the ~~third~~first quarter of ~~2021,~~2022, as a result of a ~~26% decrease~~29% increase in potash tons ~~sold, partially offset by an inflationary increase in freight rates.~~sold. Our potash freight expense is also impacted by the geographic distribution of our potash and byproduct sales and by the proportion of customers arranging for and paying their own freight costs.

Our potash segment cost of goods sold ~~decreased 6%~~increased 43% in the ~~third~~first quarter of ~~2022,~~2023, compared to the same period in ~~2021. While we sold 26% fewer~~2022. Part of the increase is due to selling 29% more tons of potash in the ~~third~~first quarter of ~~2022,~~2023. Additionally, our ~~weighted average~~weighted-average carrying cost per ton was higher due to an increase in certain potash production costs, such as labor and natural gas, ~~and electricity, caused by~~due to continued inflation.

During the three months ended September 30, 2021, we recorded abnormal production costs of $3.6 million. The Carlsbad, New Mexico area where our HB solar solution mining facility is located, experienced unusually wet, humid weather during the evaporation season. Because of the wet, humid weather, our evaporation and extraction rates were well below normal, resulting in fewer harvestable tons of potash from our HB solution ponds. We did not record any abnormal production costs during the three months ended September 30, 2022.

Our potash segment gross margin ~~increased $15.3~~decreased $14.6 million in the ~~third~~first quarter of ~~2022,~~2023, compared to the same period in ~~2021,~~2022, due to the factors discussed above.

~~Nine Months Ended September 30, 2022, and 2021~~

Potash segment sales during the first nine months of 2022 increased $34.7 million compared to the same period in 2021, as potash sales increased $34.4 million, and potash segment byproduct sales increased $0.2 million. Our potash sales increased due to a 125% increase in our average net realized sales price per ton, partially offset by a 36% decrease in tons of potash sold. As discussed above, our potash sales volumes decreased in the first nine months of 2022, as compared to the first nine months of 2021, as we had fewer potash tons to sell during the first nine months of 2022. Below average evaporation rates across our facilities in 2021, led to decreased potash production during the first nine months of 2022. Additionally, as discussed above, potash customers have been reluctant to build inventory during the summer months for the fall application season. Average net realized sales price per ton was higher due to strong overall commodity pricing, favorable farm economics, and tight global supplies of potash due to the uncertainty of potash supplied from Eastern Europe. Increases in potash segment by product salt sales and by product brine water sales were mostly offset by a decrease in magnesium chloride sales. Potash byproduct salt sales increased due to increased sales in the industrial salt market and potash byproduct brine sales increased due to increased oil and gas activities in 2022. As mentioned above, our byproduct magnesium chloride product is used primarily as a deicing agent during the winter months and as a dedusting agent during the spring and summer months. Our magnesium chloride sales declined as mild winter weather in various parts of the U.S. decreased demand for deicing products and wet weather in the early spring months in various parts of the U.S decreased demand for dedusting agents.

Potash segment freight expense decreased $2.3 million, or 17%, in the first nine months of 2022, compared to the first nine months of 2021, as a result of a 36% decrease in sales volume, partially offset by an inflationary increase in freight rates. Our freight expense is also impacted by the geographic distribution of our potash and byproduct sales and by the proportion of customers arranging for and paying their own freight costs.

3426

Table of Contents

Our potash segment cost of goods sold decreased $9.9 million, or 14%, compared to the prior year. While our potash tons sold decreased 36%, our weighted average carrying cost per ton increased due to increased potash production costs caused by inflationary pressures and below average evaporation rates across our facilities in 2021, which led to an 18% decrease in potash tons produced during the first nine months of 2022. Most of our production costs are fixed and a decrease in tons produced increases our per ton weighted average cost.

As discussed above, during the nine months ended September 30, 2021, we recorded abnormal production costs of $3.6 million to due wet weather in the Carlsbad, New Mexico area during the 2021 evaporation season. We did not record any abnormal production costs during the nine months ended September 30, 2022.

~~Our potash segment gross margin increased $50.5 million in the first nine months of 2022, compared to the same period in 2021, due to the factors discussed above.~~

Additional Information Relating to Potash

The table below shows our potash sales mix for the three ~~and nine~~ months ended ~~September 30, 2022,~~March 31, 2023, and ~~2021:~~2022:


		Three Months Ended September 30,		Nine Months Ended September 30,			Three Months Ended March 31,
		2022	2021	2022	2021		2023	2022
Agricultural	Agricultural	61%	69%	69%	80%	Agricultural	82%	75%
Industrial	Industrial	11%	10%	8%	5%	Industrial	2%	6%
Feed	Feed	28%	21%	23%	15%	Feed	16%	19%

3527

Table of Contents

Trio® Segment


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
(in thousands, except per ton amounts)	(in thousands, except per ton amounts)	2022		2021		2022		2021		(in thousands, except per ton amounts)	2023		2022
Sales1	Sales1	$	24,043	$	20,827	$	100,561	$	71,444	Sales1	$	30,274	$	41,052
Less: Freight costs	Less: Freight costs	4,135		4,038		16,055		16,515		Less: Freight costs	6,686		6,309
Warehousing and handling costs	Warehousing and handling costs	1,127		825		3,274		3,072		Warehousing and handling costs	1,253		1,152
Cost of goods sold	Cost of goods sold	12,278		10,528		45,538		43,329		Cost of goods sold	20,883		17,451

Gross Margin	Gross Margin	$	6,503	$	5,436	$	35,694	$	8,528	Gross Margin	$	1,452	$	16,140
Depreciation, depletion, and amortization incurred2	Depreciation, depletion, and amortization incurred2	$	1,072	$	1,321	$	3,122	$	4,204	Depreciation, depletion, and amortization incurred2	$	1,206	$	1,008

Sales volumes (in tons)	Sales volumes (in tons)	39		46		169		191		Sales volumes (in tons)	65		71
Production volumes (in tons)	Production volumes (in tons)	52		56		175		175		Production volumes (in tons)	49		65

Average Trio® net realized sales price per ton3	Average Trio® net realized sales price per ton3	$	488	$	336	$	482	$	271	Average Trio® net realized sales price per ton3	$	344	$	469

1 Sales include sales of byproducts which were ~~$0.9~~$1.2 million and ~~$1.3~~$1.4 million for the three months ended ~~September 30,~~March 31, 2023, and 2022, ~~and 2021, respectively, and $3.1 million and $3.1 million for the nine months ended September 30, 2022, and 2021,~~ respectively.

2 Depreciation, depletion, and amortization incurred excludes depreciation, depletion, and amortization amounts absorbed in or (relieved from) inventory.

3Average net realized ~~per ton~~ sales price per ton is a non-GAAP financial measure. More information about this measure is below under the heading "Non-GAAP Financial Measure."

Three Months Ended ~~September 30,~~March 31, 2023, and 2022 ~~and 2021~~

Trio® segment sales ~~increased 15%~~decreased 26% during the ~~third~~first quarter of ~~2022,~~2023, compared to the ~~third~~first quarter of ~~2021.~~2022. Trio® sales ~~increased $3.7~~decreased $10.6 million, ~~partially offset by a decrease in~~and our Trio® segment byproduct sales ~~of $0.4~~decreased $0.2 million. Trio® sales ~~increased~~decreased primarily due to a ~~45% increase~~27% decrease in average net realized sales price per ton, ~~partially offset by a 15%~~combined with an 8% decrease in Trio® tons sold. Our Trio® sales volumes decreased during the first quarter of 2023 compared to the first quarter of 2022, as we sold less tons of Trio® to domestic customers, partially offset by a slight increase in Trio® tons sold internationally. Also, during 2022, our Trio® sales were positively impacted by high potash prices as customers purchased Trio® due to its relative value to potash.

During the first quarter of 2022, our Trio® average net realized sales price per ton increased due to supportive commodity prices and the tight global supply of potassium fertilizers caused by uncertainty of potassium fertilizers supplied from Eastern Europe. ~~Domestic~~Like potash, Trio® customers ended the 2022 spring application season with high levels of carryover inventory and our Trio® average net realized sales ~~volumes decreased~~price per ton declined in step with declining potash prices that began in the ~~third quarter~~second half of ~~2022, compared to the third quarter of 2021, partially offset by increased international Trio~~2022.

® ~~volumes. Similar to our potash customers, our domestic Trio~~® ~~customers have been reluctant to build inventory for upcoming application periods at current price levels.~~ Our Trio® segment byproduct sales decreased due to a decrease in Trio® segment byproduct water sales. Our Trio® segment byproduct water sales decreased ~~as a higher percentage of~~due to our ~~total barrels of~~overall decrease in water sold ~~was from Intrepid South. Water sales from Intrepid South are recorded in our oilfield solutions segment while water sold that was used in~~compared to the ~~production~~first quarter of ~~Trio~~® ~~is recorded as byproduct water sales in the Trio~~® ~~segment.~~2022.

Trio® freight costs increased 2%6% in the ~~third~~first quarter of ~~2022,~~2023, compared to the ~~third~~first quarter of ~~2021.~~2022. While we sold ~~15%~~8% fewer Trio® tons in the ~~third~~first quarter of 2023, compared to the first quarter of 2022, ~~compared to the third~~a larger proportion of our first quarter ~~of 2021, we saw an inflationary increase in freight rates and we sold more~~2023 total tons of Trio® sold were sold internationally. Our international Trio® sales generally incur more freight expense compared to our domestic Trio® sales. Our freight expense is impacted by the geographic distribution of our Trio® sales and by the proportion of customers arranging for and paying their own freight costs.

Our Trio® cost of goods sold increased ~~17%~~20% in the ~~third~~first quarter of ~~2022,~~2023, compared to the ~~third~~first quarter of ~~2021.~~2022. While our tons of Trio® sold decreased ~~15%~~8%, our weighted average carrying cost per ton increased as we incurred increased labor costs as we ~~operated~~continued to operate an additional underground shift at our East ~~facility,~~facility. Our other Trio® production costs ~~continued to increase~~also increased due to continued inflation, ~~royalty expense increased due to increased revenues~~ and we produced fewer tons of Trio®. We produced 7%25% fewer tons of Trio® in the ~~third~~first quarter of 2023, compared to the first quarter of 2022, ~~compared to the third quarter of 2021,~~ as we ~~mined lower grade ore.~~experienced an eight-day outage at our East plant. Most of our production costs are fixed and a decrease in tons produced increases our per ton weighted average cost.

Our Trio® segment gross margin ~~increased~~decreased to ~~$6.5~~$1.5 million in the ~~third~~first quarter of ~~2022,~~2023, compared to gross margin of ~~$5.4~~$16.1 million in the ~~third~~first quarter of ~~2021,~~2022, due mainly to the ~~increase in average net realized sales price per ton and the other factors discussed above.~~

~~Nine Months Ended September 30, 2022, and 2021~~

~~Trio~~® ~~segment sales increased 41% during the first nine months of 2022, compared to the first nine months of 2021 as Trio~~® ~~sales increased $29.1 million, while our Trio~~® ~~segment byproduct sales were flat. Our Trio~~® ~~sales increased due to a 78% increase in our average net realized sales price per ton, partially offset by a 12%~~ decrease ~~in Trio~~® ~~tons sold. Our Trio~~® average net realized sales price per ton increased due to supportive commodity prices and the tight global supply of potassium fertilizers caused by uncertainty of potassium fertilizers supplied from Eastern Europe. Domestic Trio® ~~sales volumes decreased, partially~~

~~Table of Contents~~

~~offset by increased international Trio~~® ~~volumes. Similar to our potash customers, our domestic Trio~~® ~~customers have been reluctant to build inventory for upcoming application periods at current price levels.~~

~~Trio~~® ~~freight costs decreased 3% in the first nine months of 2022, compared to the first nine months of 2021, due to a 12% decrease in Trio~~® ~~tons sold, partially offset by inflationary increase in freight rates and we sold more tons of Trio~~® ~~internationally. Our freight expense is impacted by the geographic distribution of our Trio~~® ~~sales and by the proportion of customers arranging for and paying their own freight costs.~~

~~Our Trio~~® ~~cost of goods sold increased 5% in the first nine months of 2022, compared to the first nine months of 2021. While our tons of Trio~~® sold decreased 12% our weighted average carrying cost per ton increased as we incurred increased labor costs as we operated an additional underground shift at our East facility, other production costs continued to increase due to continued inflation, and royalty expense increased due to increased revenues..

~~Our Trio~~® ~~segment generated gross margin increased to $35.7 million in the first nine months of 2022, compared to gross margin of $8.5 million in the first nine months of 2021, due mainly to the increase~~ in average net realized sales price per ton and the other factors discussed above.

Additional Information Relating to Trio®

Table of Contents

The table below shows the percentage of Trio® tons sold into the domestic and export markets during the three ~~and nine~~ months ended ~~September 30, 2022,~~March 31, 2023, and ~~2021.~~2022.

United States Export
For the Three Months Ended September 30, 2022 62% 38%
For the Nine Months Ended September 30, 2022 84% 16%
For the Three Months Ended September 30, 2021 90% 10%
For the Nine Months Ended September 30, 2021 93% 7%


	United States	Export
For the Three Months Ended March 31, 2023	90%	10%


For the Three Months Ended March 31, 2022	91%	9%

Oilfield Solutions Segment


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
(in thousands)	(in thousands)	2022		2021		2022		2021		(in thousands)	2023		2022
Sales	Sales	$	8,423	$	6,708	$	22,936	$	14,293	Sales	$	4,250	$	7,000

Cost of goods sold	Cost of goods sold	8,028		6,061		16,735		12,235		Cost of goods sold	3,778		5,028

Gross Margin	Gross Margin	$	395	$	647	$	6,201	$	2,058	Gross Margin	$	472	$	1,972
Depreciation, depletion, and amortization incurred	Depreciation, depletion, and amortization incurred	$	867	$	818	$	2,458	$	2,206	Depreciation, depletion, and amortization incurred	$	907	$	787

Three Months Ended ~~September 30,~~March 31, 2023, and 2022 ~~and 2021~~

Our oilfield solutions segment sales ~~increased $1.7~~decreased $2.8 million in the ~~third~~first quarter of ~~2022,~~2023, compared to the same period in ~~2021,~~2022, due to a ~~$1.0~~$2.6 million ~~increase~~decrease in water sales, a ~~$0.4~~$0.5 million ~~increase~~decrease in surface use, rights-of-way and easement revenues, ~~and~~partially offset by a ~~$0.5~~$0.1 million increase in brine water sales. The ~~increase~~decrease in water sales ofin our oilfield solutions ~~products~~segment was due to the ~~increased oil~~timing of frac jobs. Surface use, rights-of-way and ~~gas activities~~easement revenues decreased as ~~oil prices were generally higher in~~we entered into fewer agreements during the ~~third~~first quarter of ~~2022,~~2023, compared to the first quarter of 2022.

Our cost of goods sold decreased $1.3 million, or 25%, for the first quarter of 2023, compared to the same period in ~~2021.~~

2022, as our sales decreased 39%. Purchased water used to supplement our own water rights decreased $1.0 million compared to the first quarter of 2022, resulting in lower sales and costs of goods sold. Our oilfield solutions cost of goods sold was negatively impacted by increased $2.0 million, or 32%, for the third quarter of 2022, compared to the same period in 2021, as we purchased more third-party water to meet customer water demand, increased royalty expense due to increased water revenues and increased fuel and electricallabor costs ~~caused by inflationary pressures.~~

~~Gross margin for the third quarter of 2022, decreased $0.3 million compared to the third quarter of 2021, due to the factors discussed above.~~

~~Nine Months Ended September 30, 2022, and 2021~~

~~Our oilfield solutions segment sales increased $8.6 million, or 60%,~~ during the first ~~nine months~~quarter of 2022, compared to the same period in 2021, due to a $3.8 million increase in water sales, a $2.7 million increase in surface use, rights-of-way and easement revenues, a $1.4 million increase in brine water sales, a $0.6 million increase in produced water royalty revenues and

~~Table of Contents~~

a $0.2 million increase in surface minerals sales. The increase in sales of our oilfield solutions products was due to the increased oil and gas activities as oil prices were generally higher in the first nine months of 2022, compared to the same period in 2021.

~~Our cost of goods sold increased $4.5 million, or 37%, during the first nine months of 2022, compared to the same period in 2021. Our cost of goods sold increased during the first nine months of 2022,~~2023, compared to the first ~~nine months~~quarter of ~~2021, due to purchasing more third-party water to meet customer demand, increased water transfer costs~~2022, as we ~~sold more water, increased contract labor related to~~hired additional employees and the ~~development of a full-cycle water management operation, increased royalty expense as water revenues increased and increased fuel and electrical expenses due to continued inflation.~~company-wide 2022 salary increase took effect in March 2022.

Gross margin for the first ~~nine months~~quarter of ~~2022, increased $4.1~~2023 decreased $1.5 million compared to the ~~same period in the prior year,~~first quarter of 2022, due to the factors discussed above.

Specific Factors Affecting Our Results

Sales

Our gross sales are derived from the sales of potash, Trio®, water, salt, magnesium chloride, brine water and various other products and services offered to oil and gas producers. Total sales are determined by the quantities of product we sell and the sales prices we realize. For potash, Trio® and salt, we quote prices to customers both on a delivered basis and on the basis of pick-up at our plants and warehouses. We incur freight costs on most of our potash, Trio® and salt sales, but some customers arrange and pay for their own freight directly. When we arrange and pay for freight, our quotes and billings are based on expected freight costs to the points of delivery. When we calculate our potash and Trio® average net realized sales price per ton, we deduct any freight costs included in sales before dividing by the number of tons sold. We believe the deduction of freight costs provides a more representative measure of our performance in the market due to variations caused by ongoing changes in the proportion of customers paying for their own freight, the geographic distribution of our products, and freight rates. Freight rates have been increasing, and if we are unable to pass the increased freight costs on to the customer, our average net realized sales price per ton is negatively affected. We manage our sales and marketing operations centrally and we work to achieve the highest average net realized sales price per ton we can by evaluating the product needs of our customers and associated logistics and then determining which of our production facilities can best satisfy these needs.

The volume of product we sell is determined by demand for our products and by our production capabilities. We operate our potash and Trio® facilities at production levels that approximate expected demand and take into account current inventory levels and expect to continue to do so for the foreseeable future.

Table of Contents

Our water sales and other products and services offered through our oilfield solutions segment are driven by demand from oil and gas exploration companies drilling in the Permian Basin. As such, demand for our water is generally stronger during a cyclical expansion of oil and gas drilling. Likewise, a cyclical contraction of oil and gas drilling may decrease demand for our water and the other products and services offered through our oilfield solutions segment. Restrictions in place during the first nine months of 2021 to help contain the COVID-19 pandemic caused a decrease in the demand for oil, resulting in lower prices and decreased oil and gas activities. As most of those restrictions were lifted before the start of 2022, the demand for oil has recovered and prices have rebounded, which in turn has led to increased drilling activities. Further, Russia's invasion of Ukraine and the related sanctions imposed by several countries against Russia ~~has~~ reduced the global supply of oil in 2022, which is expected to continue for the foreseeable future.

Cost of Goods Sold

Our cost of goods sold reflects the costs to produce our products. Many of our production costs are largely fixed and, consequently, our cost of sales per ton on a facility-by-facility basis tends to move inversely with the number of tons we produce, within the context of normal production levels. Our principal production costs include labor and employee benefits, maintenance materials, contract labor, and materials for operating or maintenance projects, natural gas, electricity, operating supplies, chemicals, depreciation and depletion, royalties, and leasing costs. ~~Inflationary pressures during~~Continued rising inflation, albeit at a slower rate in the first ~~nine months~~quarter of 2023 compared to inflation rates experienced in 2022, ~~have~~has led to increases in certain of our production costs. Certain elements of our cost structure associated with contract labor, consumable operating supplies, reagents, and royalties are variable, but these variable elements make up a smaller component of our total cost structure. Our costs often vary from period to period based on the fluctuation of inventory, sales, and production levels at our facilities.

Our production costs per ton are also impacted when our production levels change, due to factors such as changes in the grade of ore delivered to the plant, levels of mine development, plant operating performance, and downtime. Because all of our potash is produced from solution mining, weather has a significant impact on our potash production. We expect that our labor and contract labor costs in Carlsbad, New Mexico, will continue to be influenced most directly by the demand for labor in the local region where we compete for labor with another fertilizer company, companies in the oil and gas industry, and a nuclear waste processing and storage facility.

~~Table of Contents~~

We pay royalties to federal, state, and private lessors under our mineral leases. These payments typically equal a percentage of sales (less freight) of minerals extracted and sold under the applicable lease. In some cases, federal royalties for potash are paid on a sliding scale that ~~vary~~varies with the grade of ore extracted. For the three ~~and nine~~ months ended ~~September 30,~~March 31, 2023 and 2022, our average royalty rate was ~~5.0%,~~4.9% and ~~4.9%~~4.8%, respectively. ~~For the three and nine months ended September 30, 2021, our average royalty rate was 4.8%.~~

Income Taxes

We are subject to federal and state income taxes on our taxable income. Our effective tax rate for the ~~nine~~three months ended ~~September 30, 2022,~~March 31, 2023, was ~~24.5%~~28.4%. Our effective tax rate differed from the statutory rate during this period primarily from the estimated permanent difference between book and tax income for the officers' compensation deduction. Our effective tax rate for the three months ended March 31, 2022, was 22.5% which differed from the statutory rate primarily from the estimated permanent difference between book and tax income for 2022, for the percentage depletion deduction as well as the effect of state income tax law changes enacted during the first ~~nine months~~quarter of 2022. Our effective tax rate for the nine months ended September 30, 2021, was zero percent which differed from the statutory rate primarily due to the valuation allowance that was established to offset our deferred tax assets.

Our federal and state income tax returns are subject to examination by federal and state tax authorities.

For the ~~nine~~three months ended ~~September 30, 2022,~~March 31, 2023, we incurred approximately ~~$21.5~~$1.7 million of deferred income tax expense and ~~$0.6~~$0.1 million of current income tax expense. Our current income tax expense is less than the total tax expense of ~~$22.1~~$1.8 million due to the utilization of net operating losses. For the ~~nine~~three months ended ~~September 30, 2021~~March 31, 2022, we incurred no income tax ~~expense.~~expense of $9.1 million.

We evaluate our deferred tax assets and liabilities each reporting period using the enacted tax rates expected to apply to taxable income in the periods in which the deferred tax liability or asset is expected to be settled or realized. The estimated statutory income tax rates that are applied to our current and deferred income tax calculations are impacted most significantly by the states in which we conduct business. Changing business conditions for normal business transactions and operations, as well as changes to state tax rates and apportionment laws, potentially alter our apportionment of income among the states for income tax purposes. These changes in apportionment laws result in changes in the calculation of our current and deferred income taxes, including the valuation of our deferred tax assets and liabilities. The effects of any such changes are recorded in the period of the adjustment. These adjustments can increase or decrease the net deferred tax asset on our condensed consolidated balance sheet, and thus increase or decrease the deferred tax benefit or deferred income tax expense on the income statement.

3930

Table of Contents

Capital Investments

During the ~~third~~first quarter of ~~2022, and the first nine months of 2022,~~2023, cash paid for property, plant, equipment, mineral properties, intangible and other assets was ~~$14.3 million and $37.1 million, respectively.~~$21.0 million.

We expect to make capital investments in ~~2022~~2023 of ~~$65~~$60 million to $75 million. We anticipate spending approximately $25 million to $35 million on sustaining capital ~~as we continue to pull projects forward~~ in response to supply chain and inflationary pressures. Given the significant amount of work occurring in the fourth quarter of 2022, we expect cash used for capital investments will be near the lower end of the total accrued capital investment range shown above. Planned opportunity capital includes an additional cavern at our Moab facility, the beginning of an improved pipeline system for our HB facility, and additional brackish and deep-brine wells at our Wendover facility.2023. We may adjust our investment plans as our expectations for ~~2022~~2023 change. We anticipate the remainder of our ~~2022~~2023 operating plans and capital programs will be funded out of operating cash flows and existing cash. We may also use our revolving credit facility, to the extent available, to fund capital investments.

Liquidity and Capital Resources

As of ~~September 30, 2022,~~March 31, 2023, we had cash and cash equivalents of ~~$49.2~~$10.5 million, compared ~~with cash on-hand of $36.5~~to $18.5 million at December 31, ~~2021.~~2022. The ~~increase~~decrease in our cash balance during the first ~~nine~~three months of ~~2022~~2023 was driven mainly by ~~increases~~cash expenditures related to the acquisition of capital investments and decreases in the average net realized sales price per ton for both ~~Potash~~potash and Trio®.

Our operations have primarily been funded from cash on hand, cash generated by operations, borrowings under our revolving credit facility, and proceeds from debt and equity offerings. We continue to monitor our future sources and uses of cash and anticipate that we will adjust our capital allocation strategies when, and if, determined by our Board of Directors. We may, at any time we deem conditions favorable, attempt to improve our liquidity position by accessing debt or equity markets in accordance with our existing debt agreements. We also may raise capital in the future through the issuance of additional equity or debt securities, subject to prevailing market conditions. However, there is no assurance that we will be able to successfully raise additional capital on acceptable terms or at all. With our current cash on hand, the remaining availability under our credit facility, and the expected cash generated from operations, we believe we have sufficient liquidity to meet our obligations for the next twelve months.

The following summarizes our cash flow activity for the three months ended ~~September 30,~~March 31, 2023, and 2022 ~~and 2021~~ (in thousands):


		Nine Months Ended September 30,					Three Months Ended March 31,
		2022		2021			2023		2022
Cash flows provided by operating activities	Cash flows provided by operating activities	$	69,112	$	59,423	Cash flows provided by operating activities	$	8,449	$	34,110
Cash flows used in investing activities	Cash flows used in investing activities	$	(48,414)	$	(6,395)	Cash flows used in investing activities	$	(20,430)	$	(7,674)
Cash flows used in financing activities		$	(8,066)	$	(46,881)
Cash flows provided by (used in) financing activities						Cash flows provided by (used in) financing activities	$	3,920	$	(2,724)

Operating Activities

Net cash provided by operating activities through ~~September 30, 2022,~~March 31, 2023, was ~~$69.1~~$8.4 million, ~~an increase~~a decrease of ~~$9.7~~$25.7 million compared with the first ~~nine~~three months of ~~2021,~~2022, due to ~~increased~~decreased potash and Trio® sales driven by the ~~increases~~decreases in our average net realized sales price per ton.

Investing Activities

Net cash used in investing activities increased by ~~$42.0~~$12.8 million in the first ~~nine~~three months of ~~2022,~~2023, compared with the same period in ~~2021~~2022 due to a ~~$24.7~~$14.2 million increase in capital investments ~~and~~offset by a net ~~$11.4~~$1.4 million ~~increase~~decrease in investment purchases. During the first nine months of 2022, we invested $8.9 million of our excess cash on-hand in investment grade, highly-liquid, shorter-term debt instruments. We also invested an additional $2.5 million in a limited partnership that owns oil and gas assets in the Permian Basin.

4031

Table of Contents

Financing Activities

Revolving Credit Facility—In August 2022, we and certain of our subsidiaries entered into the Second Amended and Restated Credit Agreement with a syndicate of lenders with the Bank of Montreal, as administrative agent, which provides for a revolving credit facility. The agreement amended our existing revolving credit facility to, among other things, increase the amount available under the facility from $75 million to $150 million, extend the maturity date to August 4, 2027, and transition from LIBOR to SOFR ~~(Secured Overnight Financing Rate)~~ as a reference rate for borrowings under the credit agreement. Borrowings under the amended credit facility bear interest at SOFR plus an applicable margin of 1.50% to 2.25% per annum, based on our leverage ratio as calculated in accordance with the amended agreement governing the revolving credit facility. Borrowings under the revolving credit facility are secured by substantially all of our current and non-current assets, and the obligations under the credit facility are unconditionally guaranteed by several of our subsidiaries.

We occasionally borrow and repay amounts under the revolving credit facility for near-term working capital needs or other purposes and may do so in the future. During the three ~~and nine~~ months ended ~~September 30,~~March 31, 2023, we made $5 million in borrowings, and we made no repayments under the revolving credit facility. During the three months ended March 31, 2022, we made no borrowings, and we made no repayments under the revolving credit facility. ~~During the three~~As of March 31, 2023, we had $5 million in borrowings outstanding and ~~nine months ended September 30, 2021, we made~~ no ~~borrowings and we made $29.8 million~~outstanding letters of ~~repayments~~credit under ~~the revolving credit~~this facility. As of ~~September 30, 2022, and~~ December 31, ~~2021,~~2022, we had no borrowings outstanding and $1$1.0 million in outstanding letters of credit under this facility.

As of ~~September 30, 2022,~~March 31, 2023, we were in compliance with all applicable covenants under the revolving credit facility.

As of ~~October 31, 2022,~~April 28, 2023, we had approximately ~~$46~~$9.5 million in cash and cash ~~equivalents.~~equivalents and no borrowings under the revolving credit facility.

Share Repurchase Program—In February 2022, our Board of Directors approved a $35 million share repurchase program. Under the share repurchase program, we may repurchase shares from time to time in the open market or in privately negotiated transactions. The timing, volume and nature of share repurchases, if any, will be at our sole discretion and will be dependent on market conditions, liquidity, applicable securities laws, and other factors. We may suspend or discontinue the share repurchase program at any time. We repurchased 608,657 shares totaling $22.0 million from August 2022 through December 2022. For the three ~~and nine~~ months ended ~~September 30,~~March 31, 2023, and March 31, 2022, we ~~repurchased 70,733~~did not repurchase any shares ~~at a weighted average price per share of $40.66~~ under the share repurchase program.

Critical Accounting Policies and Estimates

Our Annual Report on Form 10-K for the year ended December 31, ~~2021,~~2022, describes the critical accounting policies that affect our more significant judgments and estimates used in the preparation of our consolidated financial statements. We have not made any significant changes to our critical accounting policies since December 31, ~~2021.~~2022.

4132

Table of Contents

Non-GAAP Financial Measure

To supplement our consolidated financial statements, which are prepared and presented in accordance with GAAP, from time to time we use "average net realized sales price per ton," which is a non-GAAP financial measure. This non-GAAP financial measure 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 this non-GAAP financial measure varies among companies, our presentation of this non-GAAP financial measure may not be comparable to similarly titled measures used by other companies.

We believe average net realized sales price per ton, when used in conjunction with GAAP financial measures, provides useful information to investors for analysis of our business and operating results, enhances the overall understanding of past financial performance and future prospects, and allows for greater transparency with respect to the key metric we use in our financial and operational decision making. We use this non-GAAP financial measure as one of our tools in comparing period-over-period performance on a consistent basis and when planning, forecasting, and analyzing future periods. We believe this non-GAAP financial measure is 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.

~~Table of Contents~~

Average Net Realized Sales Price per Ton

We calculate average net realized sales price per ton for each of potash and Trio®. 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. We consider average net realized sales price per ton to be useful, and believe it to be useful for investors, because it shows our potash and Trio® average per-ton pricing without the effect of certain transportation and delivery costs. When we arrange transportation and delivery for a customer, we include in revenue and in freight costs the costs associated with transportation and delivery. However, some of our customers arrange for and pay their own transportation and delivery costs, in which case these costs are not included in our revenue and freight costs. We use average net realized sales price per ton as a key performance indicator to analyze potash and Trio® sales and price trends.

Below is a reconciliation of average net realized sales price per ton to segment sales, the most directly comparable GAAP financial measure for the three months ended March 31, 2023 and ~~nine months ended September 30, 2022, and 2021:~~2022:


		Three Months Ended September 30,															Three Months Ended March 31,
		2022						2021									2023						2022
(in thousands, except per ton amounts)	(in thousands, except per ton amounts)	Potash				Trio®		Potash				Trio®		(in thousands, except per ton amounts)			Potash				Trio®		Potash		Trio®
Total Segment Sales	Total Segment Sales	$	42,354			$	24,043	$	31,673			$	20,827	Total Segment Sales			$	52,497			$	30,274	$	56,442	$	41,052
Less: Segment byproduct sales	Less: Segment byproduct sales	6,177				885		5,100				1,332		Less: Segment byproduct sales			5,342				1,221		4,820		1,436
Freight costs	Freight costs	2,430				4,135		2,879				4,038		Freight costs			3,992				6,685		3,124		6,309
Subtotal	Subtotal	$	33,747			$	19,023	$	23,694			$	15,457	Subtotal			$	43,163			$	22,368	$	48,498	$	33,307

Divided by:	Divided by:													Divided by:
Tons sold	Tons sold	46				39		62				46		Tons sold			89				65		69		71
Average net realized sales price per ton	Average net realized sales price per ton	$	734			$	488	$	381			$	336	Average net realized sales price per ton			$	485			$	344	$	703	$	469

		Nine Months Ended September 30,
		2022						2021
(in thousands, except per ton amounts)		Potash				Trio®		Potash				Trio®

Total Segment Sales				$	147,622					$	100,561				$	112,944			$	71,444
Less: Segment byproduct sales		15,938				3,100		15,696				3,096
Freight costs		8,117				16,054		11,174				16,515
Subtotal		$	123,567			$	81,407	$	86,074			$	51,833

Divided by:
Tons sold		172				169		270				191
Average net realized sales price per ton		$	718			$	482	$	319			$	271

4333

Table of Contents

ITEM 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Part II, Item 7A., "Quantitative and Qualitative Disclosure About Market Risk," of our Annual Report on Form 10-K for the year ended December 31, ~~2021,~~2022, describes our exposure to market risk. There have been no significant changes to our market risk exposure since December 31, ~~2021.~~2022.

ITEM 4.CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We maintain ~~"disclosure~~disclosure controls and procedures as defined in Rule 13a-15(e) of the Exchange Act." Our disclosure controls and procedures are designed to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission's rules and forms. Our disclosure controls and procedures are also designed to ensure that this information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. Under the supervision and with the participation of management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures as of ~~September 30, 2022.~~March 31, 2023. Based on this evaluation, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures were effective as of ~~September 30, 2022,~~March 31, 2023, at the reasonable assurance level.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during the three months ended ~~September 30, 2022,~~March 31, 2023, that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations on Effectiveness of Controls

Our management, including our principal executive officer and principal financial officer, do not expect that our disclosure controls or our internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within Intrepid have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

4434

Table of Contents

PART II - OTHER INFORMATION

ITEM 1.LEGAL PROCEEDINGS

For information regarding litigation, other disputes and regulatory proceedings see Part I - Item1. Financial Statements, Note 14 - Commitments and Contingencies.

4535

Table of Contents

ITEM 1A.RISK FACTORS

Our future performance is subject to a variety of risks and uncertainties that could materially and adversely affect our business, financial condition, results of operations, and the trading price of our common stock. These risks and uncertainties are described in Part I, Item 1A. "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, ~~2021.~~2022. There have been no material changes to these risks and uncertainties described in our Annual Report on Form 10-K for the year ended December 31, ~~2021.~~2022.

4636

Table of Contents

ITEM 2.UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS


Issuer Purchases of Equity Securities	Issuer Purchases of Equity Securities							Issuer Purchases of Equity Securities
Period	Period	(a) Total Number of Shares Purchased1	(b) Average Price Paid Per Share		(c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	(d) Maximum Dollar Value of Shares that May Yet Be Purchased Under the Plan or Programs		Period	(a) Total Number of Shares Purchased1	(b) Average Price Paid Per Share		(c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	(d) Maximum Dollar Value of Shares that May Yet Be Purchased Under the Plan or Programs2
July 1, 2022 through July 31, 2022		—	—		—	$	35,000,000
August 1, 2022 through August 31, 2022		5,950	$	43.41	5,950	34,741,421
September 1, 2022 through September 30, 2022		64,783	$	40.40	64,783	32,124,191
January 1, 2023 through January 31, 2023								January 1, 2023 through January 31, 2023	—	—		—	$	12,987,860
February 1, 2023 through February 28, 2023								February 1, 2023 through February 28, 2023	—	$	—	—	12,987,860
March 1, 2023 through March 31, 2023								March 1, 2023 through March 31, 2023	37,480	$	27.67	—	12,987,860
Total	Total	70,733	$	40.66	70,733	$	32,124,191	Total	37,480	$	27.67	—	$	12,987,860

1 Represents shares of common stock ~~purchased~~we withheld as a payment of withholding taxes due upon vesting of restricted stock held by our employees.

2 Represents the remaining dollar amount available to repurchase shares of common stock under the $35 million share repurchase program approved by the Board of Directors in February 2022. Under the share repurchase program, we may repurchase shares from time to time in the open market or in privately negotiated transactions. The timing, volume and nature of share repurchases, if any, will be at our sole discretion and will be dependent on market conditions, liquidity, applicable securities laws, and other factors. We did not repurchase any shares during the first quarter of 2023, and we may suspend or discontinue the share repurchase program at any time.

ITEM 3.DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.MINE SAFETY DISCLOSURES

We are committed to providing a safe and healthy work environment. The objectives of our safety programs are to eliminate workplace accidents and incidents, preserve employee health, and comply with all safety- and health-based regulations. We seek to achieve these objectives by training employees in safe work practices; establishing, following, and improving safety standards; involving employees in safety processes; openly communicating with employees about safety matters; and recording, reporting, and investigating accidents, incidents, and losses to avoid recurrence. As part of our ongoing safety programs, we collaborate with the Mine Safety and Health Administration (“MSHA”) and the New Mexico Bureau of Mine Safety to identify and implement accident prevention techniques and practices.

Our East, West, and North facilities in New Mexico are subject to regulation by MSHA under the Federal Mine Safety and Health Act of 1977 and the New Mexico Bureau of Mine Safety. MSHA inspects these facilities on a regular basis and issues various citations and orders when it believes a violation has occurred under federal law. Exhibit 95.1 to this Quarterly Report on Form 10-Q provides the information concerning mine safety violations and other regulatory matters required by SEC rules. Our Utah and HB facilities are subject to regulation by the Occupational Health and Safety Administration and, therefore, are not required to be included in the information provided in Exhibit 95.1.

ITEM 5.OTHER INFORMATION

None.

4737

Table of Contents

ITEM 6.EXHIBITS


Exhibit No.						Description


10.1						~~Second Amendment to Amended~~Retirement and ~~Restated Credit~~Separation Agreement, dated ~~August 4, 2022, by and among~~February 8, 2023, between Intrepid Potash, Inc.~~, the subsidiaries party thereto, the lenders party thereto,~~ and ~~Bank of Montreal, as administrative agent~~Brian Stone (incorporated by reference to Exhibit 10.1 of the ~~Company’s~~Company's Current Report on Form 8-K, filed on ~~August 9, 2022)~~February 10, 2023).†
31.1						Certification of Principal Executive Officer pursuant to Rule 13a-14(a) and 15d-14(a), as amended.*

31.2						Certification of Principal Financial Officer pursuant to Rule 13a-14(a) and 15d-14(a), as amended.*

32.1						Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**

32.2						Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**

95.1						Mine Safety Disclosure Exhibit.*

101.INS						Inline XBRL Instance Document (Note that the instance document does not appear in the Interactive Date File because its XBRL tags are embedded within the Inline XBRL document).*

101.SCH						Inline XBRL Taxonomy Extension Schema Document.*

101.CAL						Inline XBRL Extension Calculation Linkbase Document.*

101.LAB						Inline XBRL Extension Label Linkbase Document.*

101.PRE						Inline XBRL Extension Presentation Linkbase Document.*

101.DEF						Inline XBRL Extension Definition Linkbase Document.*

104						Cover page Interactive Data File (formatted as Inline XBRL and contained in exhibit 101)

* Filed herewith.

** Furnished herewith.

† Management contract or compensatory plan or arrangement.

4838

Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


						INTREPID POTASH, INC. (Registrant)

Dated: ~~November 3, 2022~~May 4, 2023						/s/ Robert P. Jornayvaz III
						Robert P. Jornayvaz III - Executive Chairman of the Board and Chief Executive Officer (Principal Executive Officer)




Dated: ~~November 3, 2022~~May 4, 2023						/s/ Matthew D. Preston
						Matthew D. Preston - Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)

4939


	Three Months Ended September 30, 2022
Product	Potash Segment		Trio® Segment		Oilfield Solutions Segment		Intersegment Eliminations		Total
Potash	$	36,177	$	—	$	—	$	(68)	$	36,109
Trio®	—		23,158		—		—		23,158
Water	427		796		5,380		—		6,603
Salt	2,845		89		—		—		2,934
Magnesium Chloride	2,008		—		—		—		2,008
Brine Water	897		—		792		—		1,689
Other	—		—		2,251		—		2,251
Total Revenue	$	42,354	$	24,043	$	8,423	$	(68)	$	74,752

	Nine Months Ended September 30, 2022
Product	Potash Segment		Trio® Segment		Oilfield Solutions Segment		Intersegment Eliminations		Total
Potash	$	131,684	$	—	$	—	$	(228)	$	131,456
Trio®	—		97,461		—		—		97,461
Water	1,564		2,722		13,260		—		17,546
Salt	8,137		378		—		—		8,515
Magnesium Chloride	4,022		—		—		—		4,022
Brine Water	2,215		—		2,179		—		4,394
Other	—		—		7,497		—		7,497
Total Revenue	$	147,622	$	100,561	$	22,936	$	(228)	$	270,891


Three Months Ended September 30, 2022	Potash		Trio®		Oilfield Solutions		Other		Consolidated
Sales	$	42,354	$	24,043	$	8,423	$	(68)	$	74,752
Less: Freight costs	3,726		4,135		—		(68)		7,793
Warehousing and handling costs	1,414		1,127		—		—		2,541
Cost of goods sold	17,342		12,278		8,028		—		37,648


Gross Margin	$	19,872	$	6,503	$	395	$	—	$	26,770
Depreciation, depletion, and amortization incurred1	$	6,318	$	1,072	$	867	$	185	$	8,442

Nine Months Ended September 30, 2022	Potash		Trio®		Oilfield Solutions		Other		Consolidated
Sales	$	147,622	$	100,561	$	22,936	$	(228)	$	270,891
Less: Freight costs	11,430		16,055		—		(228)		27,257
Warehousing and handling costs	3,947		3,274		—		—		7,221
Cost of goods sold	58,383		45,538		16,735		—		120,656


Gross Margin	$	73,862	$	35,694	$	6,201	$	—	$	115,757
Depreciation, depletion, and amortization incurred1	$	19,350	$	3,122	$	2,458	$	596	$	25,526


	United States	Export
For the Three Months Ended September 30, 2022	62%	38%
For the Nine Months Ended September 30, 2022	84%	16%

For the Three Months Ended September 30, 2021	90%	10%
For the Nine Months Ended September 30, 2021	93%	7%