Intrepid Announces Second Quarter 2021 Results

Denver, Colorado, UNITED STATES


Denver, CO, Aug. 02, 2021 (GLOBE NEWSWIRE) -- Intrepid Potash, Inc. (Intrepid) (NYSE:IPI) today reported its results for the second quarter of 2021.

Key Takeaways for Q2 2021

  • As of June 30, 2021, Intrepid had $53 million in cash on hand and only $30 million of remaining debt which is outstanding on its revolving credit facility. Intrepid paid down its remaining $15 million of Senior Notes and received full forgiveness of its $10 million Paycheck Protection Program loan to achieve this cash positive position.
  • Net income of $19.5 million, or $1.46 per share and adjusted net income(1) of $7.4 million, or $0.55 per share
  • Gross margin of $14.2 million, an increase of $14.8 million compared to the second quarter of 2020
  • Cash flow from operations of $32.3 million in Q2 2021, increasing first half 2021 cash flow from operations to $51.4 million
  • Adjusted EBITDA(1) of $16.9 million

"Second quarter and first half results continued to benefit from strong commodity prices and rising potash and Trio® pricing and demand, leading to significant improvements in net income, gross margin and EBITDA compared to the prior year." said Bob Jornayvaz, Intrepid's Executive Chairman and CEO. "Since announcing another potash and Trio® price increase in June, the fertilizer market continued to move up with buyers eager to secure supply in a limited market. We began our HB production season this week and expect to start our Utah solar solution mining facilities in early September. We are well positioned to supply our customers when the fall season begins and have already received strong buyer interest in new orders for fourth quarter delivery. We have been thoughtful in waiting to accept orders as the market remains tight."

Jornayvaz continued, "Oilfield activity continues to improve in the Delaware Basin as growth in rig counts and frac crews led to increased produced water royalty and surface use agreement revenue in the second quarter. We opportunistically scheduled our water on our South Ranch in the second quarter in anticipation of higher margin jobs, which have materialized, in the second half of the year. We expect steady growth in our oilfield solutions segment over the next six months and into 2022."

Consolidated Results

We generated second quarter 2021 net income of $19.5 million, or $1.46 per share and adjusted net income of $7.4 million or $0.55 per share. Consolidated gross margin increased to $14.2 million compared to the prior year's gross deficit of $0.6 million. First half 2021 net income increased to $21.9 million, or $1.65 per share when compared to prior year period and adjusted net income was $9.8 million or $0.74 per share. Gross margin for the first half of 2021 increased to $23.3 million compared to prior year first half gross margin of $5.0 million. Adjusted net income and gross margin in both periods increased as improved fertilizer pricing, strong demand in agricultural markets, and increased byproduct sales drove improvements in the bottom line.

In May 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. In June 2021, we received notice that the Small Business Administration had remitted funds to our bank to fully repay our Paycheck Protection Program (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 loan.

Segment Highlights

Potash

  Three Months Ended June 30, Six Months Ended June 30,
  2021 2020 2021 2020
  (in thousands, except per ton data)
Sales $37,693   $24,526   $81,270   $58,317  
Gross margin $10,131   $2,015   $18,803   $6,349  
         
Potash sales volumes (in tons) 92   74   208   173  
Potash production volumes (in tons) 51     164   140  
         
Average potash net realized sales price per ton(1) $319   $256   $300   $256  

Potash segment gross margin increased $8.1 million and $12.5 million in the second quarter and first half of 2021, respectively, when compared to prior year periods, as rising prices, increased demand, and more product available to sell after a good 2020 evaporation season all drove improvements to the bottom line.

Potash sales in the second quarter increased 54% compared to the same period in 2020, due to a 24% increase in sales volume, a 25% increase in our average net realized sales price per ton, and a $1.8 million increase in byproduct sales. Agricultural sales volumes continued to benefit from strong commodity prices and our industrial potash sales increased slightly in the second quarter due to the economic rebound from the COVID-19 pandemic. Average net realized sales price per ton improved compared to the same periods in 2020 due to several price increases announced since the fourth quarter of 2020 and will continue to increase in the third quarter of 2021 as second quarter price increases begin to take effect.

Increased byproduct sales in the second quarter were driven by a $0.9 million increased in magnesium chloride sales as we had more product to sell in 2021 due to good evaporation during the summer of 2020. Byproduct water sales increased $0.4 million compared to the second quarter of 2020 as a higher percentage of our total water sales were sales of byproduct water.

First half potash production increased significantly compared to the prior year as above average evaporation during the summer of 2020 increased the product available in our solar ponds and extended our production season. Second quarter production also increased compared to the prior year as we made up for the reduced operating days and production rates during the first quarter of 2021.

Trio®

  Three Months Ended June 30, Six Months Ended June 30,
  2021 2020 2021 2020
  (in thousands, except per ton data)
Sales $26,924   $19,251    $50,619   $41,832   
Gross margin (deficit) $3,162   $(3,225)  $3,093   $(6,780) 
         
Trio® sales volume (in tons) 75   64    145   140   
Trio® production volume (in tons) 63   50    119   100   
         
Average Trio® net realized sales price per ton(1) $271   $208    $251   $200   

Our Trio® segment generated a gross margin of $3.2 million and $3.1 million in the second quarter and first half of 2021, respectively, as recent price increases improved our average net realized sales price per ton nearly 30% in both periods.

Total sales increased 40% for the second quarter of 2021 compared to the prior year, due to the higher prices and a 17% increase in sales volumes. Tons sold increased as strong commodity prices and the economic rebound from the COVID-19 pandemic drove an increase in demand for Trio®. We announced a $35 per ton increase in Trio® price in June and expect to realize the majority of that increase in the third quarter of 2021.

Production volume increased 26% and 19% second quarter and first half of 2021, respectively, when compared to the prior year periods, as we converted more tons of work-in-process inventory to premium Trio®.

Oilfield Solutions

  Three Months Ended June 30, Six Months Ended June 30,
  2021 2020 2021 2020
  (in thousands)
Sales $3,331   $2,747   $7,584   $10,488  
Gross margin $906   $611   $1,411   $5,455  

Oilfield solutions sales increased $0.6 million in the second quarter of 2021, compared to the same period in 2020, due to a $0.5 million increase in surface use, right-of way and easement revenues and a $0.3 increase in produced water royalties, partially offset by a $0.2 million decrease in water sales. First half sales decreased $2.9 million compared to the same period in 2020, due to a $3.6 million decrease in water sales, partially offset by a $0.6 million increase in produced water royalty revenues and a $0.2 million increase in surface use, right-of way and easement revenues. Water sales recorded in the oilfield solutions segment continued to lag prior year results due to the negative economic effects from the COVID-19 pandemic, although we continue to see growth in oilfield activity in the Delaware Basin and expect water sales will improve in the second half of 2021.

Gross margin for the second quarter increased $0.3 million compared to the prior year as improved activity in the oilfield led to increased revenues from our surface use agreements and produced water royalty. First half 2021 gross margin decreased compared to the prior year as first quarter 2020 water sales were not affected by the COVID-19 pandemic.

Paycheck Protection Program (PPP) Loan

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 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"). In connection with this repayment, the Company paid in aggregate approximately $15.6 million, which consisted of (i) $15.0 million of remaining aggregate principal amount of Series B Senior Notes, (ii) approximately $0.1 million of accrued interest and (iii) a "make-whole" premium of $0.5 million. As a result of the repayment, the Note Purchase Agreement was terminated.

Liquidity

Cash provided by operations was $32.3 million during the second quarter of 2021 and $51.4 million for the first half of 2021. Cash used in investing activities decreased to $0.6 million for the first half of 2021, as $6.6 million spent on capital investments during 2021 was mostly offset by $6.0 million in proceeds from the sale of land discussed above.

As of August 2, 2021, we had approximately $36 million in cash and cash equivalents, $10 million outstanding under our revolving credit facility, and $64.0 million available to borrow under our revolving credit facility.

Notes

1 Adjusted net income (loss), adjusted earnings before interest, taxes, depreciation, and amortization (or adjusted EBITDA) and average net realized sales price per ton are non-GAAP financial measures. See the non-GAAP reconciliations set forth later in this press release for additional information.

Unless expressly stated otherwise or the context otherwise requires, references to tons in this press release refer to short tons. One short ton equals 2,000 pounds. One metric tonne, which many international competitors use, equals 1,000 kilograms or 2,204.62 pounds.

Conference Call Information

A teleconference to discuss the quarter is scheduled for August 3, 2021, at 12:00 p.m. ET. The dial-in number is 1-800-319-4610 for U.S. and Canada, and is +1-631-891-4304 for other countries. The call will also be streamed on the Intrepid website, intrepidpotash.com.

An audio recording of the conference call will be available at intrepidpotash.com and by dialing 1-800-319-6413 for U.S. and Canada, or +1-631-883-6842 for other countries. The replay will require the input of the conference identification number 7466.

About Intrepid

Intrepid is 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. Intrepid is the only U.S. producer of muriate of 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, Intrepid produces a specialty fertilizer, Trio®, which delivers three key nutrients, potassium, magnesium, and sulfate, in a single particle. Intrepid also provides water, magnesium chloride, brine, and various oilfield products and services.

Intrepid serves diverse customers in markets where a logistical advantage exists and is a leader in the use of solar evaporation for potash production, resulting in lower cost and more environmentally friendly production. Intrepid's mineral production comes from three solar solution potash facilities and one conventional underground Trio® mine.

Intrepid routinely posts important information, including information about upcoming investor presentations and press releases, on its website under the Investor Relations tab. Investors and other interested parties are encouraged to enroll at intrepidpotash.com, to receive automatic email alerts for new postings.

Forward-looking Statements

This document contains forward-looking statements - that is, statements about future, not past, events. The forward-looking statements in this document relate to, among other things, statements about Intrepid's future financial performance, cash flow from operations expectations, water sales, production costs, acquisition expectations and operating plans, its market outlook, and the impact of the COVID-19 pandemic on the company. These statements are based on assumptions that Intrepid believes are reasonable. Forward-looking statements by their nature address matters that are uncertain. The particular uncertainties that could cause Intrepid's actual results to be materially different from its forward-looking statements include the following:

  • changes in the price, demand, or supply of Intrepid's products and services;
  • challenges to Intrepid's water rights;
  • Intrepid's ability to successfully identify and implement any opportunities to grow its business whether through expanded sales of water, Trio®, byproducts, and other non-potassium related products or other revenue diversification activities;
  • the costs of, and Intrepid's 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;
  • Intrepid's ability to prevail in outstanding legal proceedings against it;
  • Intrepid's ability to comply with the terms of its revolving credit facility, including the underlying covenants, to avoid a default under the agreement;
  • 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 Intrepid's 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;
  • Intrepid's 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;
  • Intrepid's inability to fund necessary capital investments;
  • the impact of the COVID-19 pandemic on Intrepid's business, operations, liquidity, financial condition, and results of operations; and
  • the other risks, uncertainties, and assumptions described in Intrepid's periodic filings with the Securities and Exchange Commission, including in "Risk Factors" in Intrepid's Annual Report on Form 10-K for the year ended December 31, 2020, as updated by subsequent Quarterly Reports on Form 10-Q.

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

All information in this document speaks as of the date of this release. New information or events after that date may cause our forward-looking statements in this document to change. We undertake no duty to update or revise publicly any forward-looking statements to conform the statements to actual results or to reflect new information or future events.

Contact:
Matt Preston, Vice President - Finance
Phone: 303-996-3048
Email: matt.preston@intrepidpotash.com

INTREPID POTASH, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2021 AND 2020
(In thousands, except per share amounts)

  Three Months Ended June 30, Six Months Ended June 30,
  2021 2020 2021 2020
Sales $67,888    $46,450    $139,351    $110,434   
Less:        
Freight costs 10,115    8,735    22,193    20,595   
Warehousing and handling costs 2,378    2,065    5,010    4,969   
Cost of goods sold 41,196    34,008    88,841    77,055   
Lower of cost or net realizable value inventory adjustments —    2,241    —    2,791   
Gross Margin (Deficit) 14,199    (599)  23,307    5,024   
         
Selling and administrative 6,612    6,673    12,403    13,272   
Accretion of asset retirement obligation 441    434    882    869   
Litigation settlement —    —    —    10,075   
(Gain) loss on sale of assets (2,567)  234    (2,565)  (4,462) 
Other operating (income) expense (583)  269    (577)  258   
Operating Income (Loss) 10,296    (8,209)  13,164    (14,988) 
         
Other Income (Expense)        
Interest expense, net (918)  (635)  (1,344)  (1,427) 
Interest income —    —    —    116   
Other income    (28)  17    (12) 
Gain on extinguishment of debt 10,113    —    10,113    —   
Income (Loss) Before Income Taxes 19,499    (8,872)  21,950    (16,311) 
         
Income Tax Benefit —    —    —    42   
Net Income (Loss) $19,499    $(8,872)  $21,950    $(16,269) 
         
Weighted Average Shares Outstanding:        
Basic 13,089    12,979    13,071    12,968   
Diluted 13,338    12,979    13,335    12,968   
Earnings Per Share:        
Basic $1.49    $(0.68)  $1.68    $(1.25) 
Diluted $1.46    $(0.68)  $1.65    $(1.25) 

INTREPID POTASH, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
AS OF JUNE 30, 2021 AND DECEMBER 31, 2020
(In thousands, except share and per share amounts)

  June 30, December 31,
  2021 2020
ASSETS    
Cash and cash equivalents $53,250    $19,515   
Accounts receivable:    
Trade, net 23,029    22,795   
Other receivables, net 2,470    1,577   
Inventory, net 74,760    88,673   
Prepaid expenses and other current assets 2,854    3,228   
Total current assets 156,363    135,788   
     
Property, plant, equipment, and mineral properties, net 341,984    355,497   
Water rights 19,184    19,184   
Long-term parts inventory, net 29,044    28,900   
Other assets, net 10,545    10,819   
Total Assets $557,120    $550,188   
     
LIABILITIES AND STOCKHOLDERS' EQUITY    
Accounts payable $7,206    $7,278   
Accrued liabilities 15,015    12,701   
Accrued employee compensation and benefits 8,664    4,422   
Current portion of long-term debt, net —    10,000   
Other current liabilities 34,812    32,816   
Total current liabilities 65,697    67,217   
     
Advances on credit facility 29,817    29,817   
Long-term debt, net —    14,926   
Asset retirement obligation 24,780    23,872   
Operating lease liabilities 1,413    2,136   
Other non-current liabilities 878    961   
Total Liabilities 122,585    138,929   
     
Commitments and Contingencies    
Common stock, $0.001 par value; 40,000,000 shares authorized;    
13,121,087 and 13,049,820 shares outstanding    
at June 30, 2021, and December 31, 2020, respectively 13    13   
Additional paid-in capital 658,163    656,837   
Accumulated deficit (223,641)  (245,591) 
Total Stockholders' Equity 434,535    411,259   
Total Liabilities and Stockholders' Equity $557,120    $550,188   

INTREPID POTASH, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2021 AND 2020
(In thousands)

  Three Months Ended June 30, Six Months Ended June 30,
  2021 2020 2021 2020
Cash Flows from Operating Activities:        
Net income (loss) $19,499    $(8,872)  $21,950    $(16,269) 
Adjustments to reconcile net income to net cash provided by operating activities:        
Allowance for doubtful accounts —    —    —    275   
Depreciation, depletion and amortization 8,598    8,043    18,079    17,629   
Accretion of asset retirement obligation 441    434    882    869   
Amortization of deferred financing costs 126    75    194    161   
Amortization of intangible assets 81    81    161    161   
Stock-based compensation 765    963    1,655    1,995   
Litigation settlement —    (10,075)  —    —   
Lower of cost or net realizable value inventory adjustments —    2,241    —    2,791   
(Gain) loss on disposal of assets (2,567)  234    (2,565)  (4,462) 
Allowance for parts inventory obsolescence —    492    —    492   
Other —    (116)  —    (116) 
Gain on extinguishment of debt (10,113)  —    (10,113)  —   
Changes in operating assets and liabilities:        
Trade accounts receivable, net 13,868    12,606    (235)  4,218   
Other receivables, net (173)  (427)  (893)  (735) 
Inventory, net 4,474    3,885    13,767    8,861   
Prepaid expenses and other current assets 137    573    495    1,430   
Accounts payable, accrued liabilities, and accrued employee
compensation and benefits
 (1,955)  (6,591)  6,023    1,528   
Operating lease liabilities (536)  (498)  (1,061)  (1,050) 
Other liabilities (318)  5,729    3,097    5,770   
Net cash provided by operating activities 32,327    8,777    51,436    23,548   
         
Cash Flows from Investing Activities:        
Additions to property, plant, equipment, mineral properties and other assets (4,266)  (4,935)  (6,626)  (10,645) 
Long-term investment —    (3,500)  —    (3,500) 
Proceeds from sale of assets 5,995    —    6,042    4,786   
Net cash provided by (used in) investing activities 1,729    (8,435)  (584)  (9,359) 
         
Cash Flows from Financing Activities:        
Debt prepayment costs (503)  —    (505)  —   
Repayments of long-term debt (14,978)  (20,000)  (15,000)  (20,000) 
Payments of financing lease (1,151)  —    (1,258)  —   
Proceeds from short-term borrowings on credit facility —    —    —    10,000   
Capitalized debt fees —    (36)  —    (36) 
Employee tax withholding paid for restricted stock upon vesting (176)  (125)  (380)  (174) 
Proceeds from loan under CARES Act —    10,000    —    10,000   
Proceeds from exercise of stock options    —    51    —   
Net cash used in financing activities (16,800)  (10,161)  (17,092)  (210) 
         
Net Change in Cash, Cash Equivalents and Restricted Cash 17,256    (9,819)  33,760    13,979   
Cash, Cash Equivalents and Restricted Cash, beginning of period 36,688    45,037    20,184    21,239   
Cash, Cash Equivalents and Restricted Cash, end of period $53,944    $35,218    $53,944    $35,218   

To supplement Intrepid's consolidated financial statements, which are prepared and presented in accordance with GAAP, Intrepid uses several non-GAAP financial measures to monitor and evaluate its performance. These non-GAAP financial measures include adjusted net income (loss), adjusted net income (loss) per diluted share, adjusted EBITDA, and average net realized sales price per ton. These non-GAAP financial measures 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 these non-GAAP financial measures varies among companies, these non-GAAP financial measures may not be comparable to similarly titled measures used by other companies.

Intrepid believes these non-GAAP financial measures provide useful information to investors for analysis of its business. Intrepid uses these non-GAAP financial measures as one of its tools in comparing period-over-period performance on a consistent basis and when planning, forecasting, and analyzing future periods. Intrepid believes these non-GAAP financial measures are 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.

Adjusted Net Income (Loss) and Adjusted Net Income (Loss) Per Diluted Share

Adjusted net income (loss) and adjusted net income (loss) per diluted share are calculated as net income (loss) or income (loss) per diluted share adjusted for certain items that impact the comparability of results from period to period, as set forth in the reconciliation below. Intrepid considers these non-GAAP financial measures to be useful because they allow for period-to-period comparisons of its operating results excluding items that Intrepid believes are not indicative of its fundamental ongoing operations.

Reconciliation of Net Income (Loss) to Adjusted Net Income (Loss):

 Three Months Ended June 30, Six Months Ended June 30,
 2021 2020 2021 2020
 (in thousands)
Net Income (Loss)$19,499    $(8,872)  $21,950    $(16,269) 
Adjustments       
Litigation Settlement—    —    —    10,075   
(Gain) loss on sale of assets(2,567)  234    (2,565)  (4,462) 
Gain on extinguishment of debt(10,113)  —    (10,113)  —   
Write-off of deferred financing fees60    —    60    —   
Make-whole payment503    —    505    —   
Total adjustments(12,117)  234    (12,113)  5,613   
Adjusted Net Income (Loss)$7,382    $(8,638)  $9,837    $(10,656) 

Reconciliation of Net Income (Loss) per Share to Adjusted Net Income (Loss) per Share:

 Three Months Ended June 30, Six Months Ended June 30,
 2021 2020 2021 2020
Net Income (Loss) Per Diluted Share$1.46    $(0.68)  $1.65    $(1.25) 
Adjustments       
Litigation Settlement—    —    —    0.78   
(Gain) loss on sale of assets(0.19)  0.02    (0.19)  (0.34) 
Gain on extinguishment of debt(0.76)  —    (0.76)  —   
Write-off of deferred financing fees—    —    —    —   
Make-whole payment0.04    —    0.04    —   
Total adjustments(0.91)  0.02    (0.91)  0.44   
Adjusted Net Income (Loss) Per Diluted Share$0.55    $(0.66)  $0.74    $(0.81) 

Adjusted EBITDA

Adjusted earnings before interest, taxes, depreciation, and amortization (or adjusted EBITDA) is calculated as net income (loss) adjusted for certain items that impact the comparability of results from period to period, as set forth in the reconciliation below. Intrepid considers adjusted EBITDA to be useful, and believe it to be useful for investors, because the measure reflects Intrepid's operating performance before the effects of certain non-cash items and other items that Intrepid believes are not indicative of its core operations. Intrepid uses adjusted EBITDA to assess operating performance.
        

Reconciliation of Net Income (Loss) to Adjusted EBITDA:

  Three Months Ended June 30, Six Months Ended June 30,
  2021 2020 2021 2020
  (in thousands)
Net Income (Loss) $19,499    $(8,872)  $21,950    $(16,269) 
    Litigation settlement —    —    —    10,075   
(Gain) loss on sale of assets (2,567)  234    (2,565)  (4,462) 
Gain on extinguishment of debt (10,113)  —    (10,113)  —   
Interest expense 918    635    1,344    1,427   
Income tax benefit —    —    —    (42) 
Depreciation, depletion, and amortization 8,598    8,043    18,079    17,629   
Amortization of intangible assets 81    81    161    161   
Accretion of asset retirement obligation 441    434    882    869   
Total adjustments (2,642)  9,427    7,788    25,657   
Adjusted EBITDA $16,857    $555    $29,738    $9,388   

Average Potash and Trio® Net Realized Sales Price per Ton

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. Intrepid considers average net realized sales price per ton to be useful, and believe it to be useful for investors, because it shows Intrepid's potash and Trio® average per ton pricing without the effect of certain transportation and delivery costs. When Intrepid arranges transportation and delivery for a customer, it includes in revenue and in freight costs the costs associated with transportation and delivery. However, some of Intrepid's customers arrange for and pay their own transportation and delivery costs, in which case these costs are not included in Intrepid's revenue and freight costs. Intrepid uses average net realized sales price per ton as a key performance indicator to analyze potash and Trio® sales and price trends.

Reconciliation of Sales to Average Net Realized Sales Price per Ton:

  Three Months Ended June 30,
  2021 2020
(in thousands, except per ton amounts) Potash Trio® Potash Trio®
Total Segment Sales $37,693   $26,924   $24,526   $19,251  
Less: Segment byproduct sales 4,812   584   2,977   419  
Freight costs 3,486   6,037   2,600   5,523  
Subtotal $29,395   $20,303   $18,949   $13,309  
         
Divided by:        
Tons sold 92   75   74   64  
Average net realized sales price per ton $319   $271   $256   $208  


  Six Months Ended June 30,
  2021 2020
(in thousands, except per ton amounts) Potash Trio® Potash Trio®
Total Segment Sales $81,270   $50,619   $58,317   $41,832  
Less: Segment byproduct sales 10,595   1,764   6,950   1,799  
Freight costs 8,295   12,477   7,140   12,057  
Subtotal $62,380   $36,378   $44,227   $27,976  
         
Divided by:        
Tons sold 208   145   173   140  
Average net realized sales price per ton $300   $251   $256   $200  


  Three Months Ended June 30, 2021
Product Potash Segment Trio® Segment Oilfield Solutions Segment Intersegment Eliminations Total
Potash $32,881   $—   $—   $(60)  $32,821  
Trio® —   26,340   —   —    26,340  
Water 520   514   1,783   —    2,817  
Salt 2,008   70   —   —    2,078  
Magnesium Chloride 1,880   —   —   —    1,880  
Brine Water 404   —   229   —    633  
Other —   —   1,319   —    1,319  
Total Revenue $37,693   $26,924   $3,331   $(60)  $67,888  
           
  Six Months Ended June 30, 2021
Product Potash Segment Trio® Segment Oilfield Solutions Segment Intersegment Eliminations Total
Potash $70,675   $—   $—   $(122)  $70,553  
Trio® —   48,855   —   —    48,855  
Water 1,679   1,498   5,125   —    8,302  
Salt 4,047   266   —   —    4,313  
Magnesium Chloride 3,908   —   —   —    3,908  
Brine Water 961   —   434   —    1,395  
Other —   —   2,025   —    2,025  
Total Revenue $81,270   $50,619   $7,584   $(122)  $139,351  


  Three Months Ended June 30, 2020
Product Potash Segment Trio® Segment Oilfield Solutions Segment Intersegment Eliminations Total
Potash $21,549   $—   $—   $(74)  $21,475  
Trio® —   18,832   —   —    18,832  
Water 112   404   2,029   —    2,545  
Salt 1,701   15   —   —    1,716  
Magnesium Chloride 952   —   —   —    952  
Brine Water 212   —   161   —    373  
Other —   —   557   —    557  
Total Revenue $24,526   $19,251   $2,747   $(74)  $46,450  
           
  Six Months Ended June 30, 2020
Product Potash Segment Trio® Segment Oilfield Solutions Segment Intersegment Eliminations Total
Potash $51,367   $—   $—   $(203)  $51,164  
Trio® —   40,033   —   —    40,033  
Water 695   1,651   8,690   —    11,036  
Salt 3,797   148   —   —    3,945  
Magnesium Chloride 1,711   —   —   —    1,711  
Brine Water 747   —   192   —    939  
Other —   —   1,606   —    1,606  
Total Revenue $58,317   $41,832   $10,488   $(203)  $110,434  


Three Months Ended
June 30, 2021
 Potash Trio® Oilfield Solutions Other Consolidated
Sales $37,693   $26,924    $3,331   $(60)  $67,888   
Less: Freight costs 4,138   6,037    —   (60)  10,115   
Warehousing and handling
costs
 1,306   1,072    —   —    2,378   
Cost of goods sold 22,118   16,653    2,425   —    41,196   
Gross Margin $10,131   $3,162    $906   $—    $14,199   
Depreciation, depletion, and amortization incurred1 $6,460   $1,376    $700   $143    $8,679   
           
Six Months Ended
June 30, 2021
 Potash Trio® Oilfield Solutions Other Consolidated
Sales $81,270   $50,619    $7,584   $(122)  $139,351   
Less: Freight costs 9,838   12,477    —   (122)  22,193   
Warehousing and handling
costs
 2,762   2,248    —   —    5,010   
Cost of goods sold 49,867   32,801    6,173   —    88,841   
Gross Margin $18,803   $3,093    $1,411   $—    $23,307   
Depreciation, depletion, and amortization incurred1 $13,637   $2,883    $1,388   $332    $18,240   
           
Three Months Ended
June 30, 2020
 Potash Trio® Oilfield Solutions Other Consolidated
Sales $24,526   $19,251    $2,747   $(74)  $46,450   
Less: Freight costs 3,286   5,523    —   (74)  8,735   
Warehousing and handling
costs
 1,204   861    —   —    2,065   
Cost of goods sold 17,650   14,222    2,136   —    34,008   
Lower of cost or net
realizable value inventory
adjustments
 371   1,870    —   —    2,241   
Gross Margin (Deficit) $2,015   $(3,225)  $611   $—    $(599) 
Depreciation, depletion, and amortization incurred1 $5,742   $1,516    $657   $209    $8,124   
           
Six Months Ended
June 30, 2020
 Potash Trio® Oilfield Solutions Other Consolidated
Sales $58,317   $41,832    $10,488   $(203)  $110,434   
Less: Freight costs 8,727   12,071    —   (203)  20,595   
Warehousing and handling
costs
 2,500   2,469    —   —    4,969   
Cost of goods sold 40,370   31,652    5,033   —    77,055   
Lower of cost or net
realizable value inventory
adjustments
 371   2,420    —   —    2,791   
Gross Margin (Deficit) $6,349   $(6,780)  $5,455   $—    $5,024   
Depreciation, depletion and amortization incurred1 $13,054   $3,025    $1,289   $422    $17,790   

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