Intrepid Potash, Inc. (NYSE:IPI) today announced second quarter 2008 results with pro forma net income of $32.4 million up from $4.0 million for the second quarter 2007.

Highlights for the Second Quarter:

• Average net sales price for potash this quarter was $425 per short ton ($469 per metric tonne) compared to $182 per short ton ($201 per metric tonne) in the period a year ago.
• Average net sales price for langbeinite this quarter was $188 per short ton ($207 per metric tonne) compared to $109 per short ton ($120 per metric tonne) in the second quarter 2007.
• Potash production in the quarter was 210,000 short tons (190,000 metric tonnes), which was the same as the second quarter 2007.
• Langbeinite production in the second quarter of 2008 was 58,000 short tons (53,000 metric tonnes), a 41 percent increase over the 41,000 short tons (37,000 metric tonnes) produced in the second quarter last year.
• Gross margins in the second quarter for potash were $262 per short ton or 62 percent compared to 29 percent in the three months ended June 30, 2007. Gross margins for langbeinite were $81 per short ton or 43 percent up from 6 percent in the same period last year.
• Pro forma net income per diluted share was $0.43 per share in the second quarter and $0.69 per diluted share for the first half of 2008 compared to $0.05 and $0.10 for the same periods in 2007.
• Earning before interest, taxes, depreciation and amortization (EBITDA) was 572 percent higher in the second quarter of 2008 at $55.1 million compared to $8.2 million last year.
• Capital projects are on schedule with $13 million invested this quarter.

“We are facing the first demand-driven agriculture market in modern times. The most recent USDA report indicates that yields will come in better than initially expected, yet still leave us with low levels of stocks. The increase in crop yield demonstrates the positive returns on the fertilizer investments made by the farming community and that fertilizers are doing their jobs,” said Bob Jornayvaz, Intrepid Potash’s CEO. “It is widely believed that a tight global food supply is a long-term situation and the demand for potash will continue to increase. Intrepid is focused on the long-term by appropriately and aggressively investing capital in new capacity and efficiency projects to bring on additional lower cost tons to satisfy the needs of our customers.”

Pro forma operating income for the second quarter of 2008 was $51.9 million and $78.4 million for the first half the year. Pro forma operating income was $6.7 million in the second quarter 2007 and $13.1 million for the six-month period ended June 30, 2007. Cash from operating activities was $68.9 million for the first half of 2008 compared to $21.8 for the same period in 2007. Our adjusted pro forma net income for the quarter ended June 30, 2008 was $31.6 million compared to $4.3 million in 2007. Increases in each of theses metrics has been driven by the strong demand in the market and the associated increase in pricing of potash and langbeinite.

Operating income, adjusted net income, pro forma earning per diluted share and EBITDA are non-GAAP financial measures – please refer to the respective reconciliation in the accompanying Non-GAAP Reconciliation tables towards the end of this release.

Potash Results

During the second quarter, Intrepid produced 210,000 short tons of potash and sold 213,000 short tons of potash. First and fourth quarter production typically exceeds second and third quarter production as a result of the evaporation cycle at our solar facilities that occurs primarily in the spring and summer months. This year was no exception with Moab beginning the harvest cycle later in August.

The 213,000 short tons of potash sold in the second quarter was at an average FOB net sales price of $425 per short ton as compared to an average FOB price of $182 per short ton during the second quarter of 2007. The $243 per short ton increase in selling price was achieved despite having committed approximately 70 percent of our second quarter sales volumes at prices arranged prior to the start of the quarter. As of August 1, 2008, our posted price for red granular FOB Carlsbad potash has increased to $782 per short ton.

Our potash production cost of goods sold which excludes depreciation, depletion and amortization; royalties; and byproduct credits increased to $142 per short ton in the second quarter of 2008 from $120 per ton in the second quarter of 2007. Our efforts are focused on and growing production volumes in this price environment, with an ever-present eye to the future. Specifically, we have added a trainee program at our mining operations, added another operating panel in the East Mine, increased the contract maintenance labor, and added personnel to increase our maintenance staff. This increased personnel and higher natural gas prices have put upward pressure on production costs. The expanded work force is designed to minimize the impact of any turnover and increase the reliability and throughput of the mines. We are adding full-time employees to our maintenance and mining support roles throughout the remainder of the year as well, which will be partially offset by a decrease in contract maintenance expense.

Langbeinite Results

During the second quarter, Intrepid produced 58,000 short tons of langbeinite, a specialty fertilizer containing potassium, magnesium, and sulfur. We market our langbeinite under the registered name of Trio^®. Our langbeinite production was 41 percent higher than the 41,000 short tons produced during the second quarter of 2007.

Intrepid sold 47,000 short tons of langbeinite in the second quarter 2008 at an average FOB or net sales price of $188 per short ton as compared to 52,000 tons at an average FOB price of $109 per short ton in the prior year’s second quarter. Our increased production for langbeinite is primarily due to higher ore grade from our East Mine. The offset to the higher langbeinite ore grade is pressure on potash production due to an offsetting lower potash ore grade from the mixed ore body at the East Mine during the second quarter.

Capital Investment Update

Through the first half of 2008, Intrepid has invested $24 million related to the 2008 capital program. This investment includes an upgrade to the mining fleet with the addition of three new underground miners, two replacement miners at the West Mine and one miner to create an additional operating panel in our East Mine which allows us to increase our ore throughput. Our storage and hoisting upgrade project at the West Mine has moved forward with the installation of the new cable and the upgrade of the skips; the next phase will be the construction of the underground storage system which is expected to be completed in 2009. This project should increase productive capacity without any additional fixed costs.

We are continuing to move forward with the permitting process for the HB Mine, which is a solar evaporation solution mining project in Carlsbad, New Mexico. As various permits are received, we may begin applicable phases of construction for the HB Mine. We have had numerous meetings and briefings with the Bureau of Land Management (BLM) on aspects of the project, and we submitted the Mine Plan Modification at the end of May 2008. We expect to file the Environmental Assessment associated with the HB Mine in the third quarter. The timing of the capital expenditures for the development of this project is dependent upon the timing of approval of all necessary permitting and the project will take approximately two years from that date to reach completion and full capacity and full solar pond capacity.

The majority of our capital investment budget is planned for expenditure in the last quarter of this year. We are currently ahead of plan on our core sustainability and de-bottlenecking plans and expect that our total capital expenditures will remain in the $80 million to $95 million range for 2008. Our capital expenditures related to the HB Mine in 2008 is expected to be between $5 million to $15 million. The change in the timing of the investment in HB Mine is driven by the timing of permitting for this project. Inclusive in the total budget for 2008, we have been able to add projects and accelerate some projects at our Carlsbad facilities which we expect to improve the reliability of our facilities.

Guidance for 2008

Guidance for 2008 related to our production, our capital investment plan, and our production cost of goods sold per short ton which excludes depreciation, royalties and byproduct credit is unchanged and presented below. The timing of sales and production volumes vary within specific reporting periods and may not be equal to one another as a result of building or selling down inventory balances.

Production Forecast:
        Potash -                870,000 - 890,000 short tons
        Langbeinite -           210,000 - 230,000 short tons
Production Cost of Goods Sold:
        Potash -                $140 - $150 per short ton
        Langbeinite -           $75 - $85 per short ton

The Company routinely posts important information about the Company on its website under the Investor Relations tab. The Company’s website address is www.intrepidpotash.com.

Certain statements in this press release, and other written or oral statements made by or on behalf of us, are “forward-looking statements” within the meaning of the federal securities laws. Statements regarding future events and developments and our future performance, as well as management’s expectations, beliefs, plans, estimates or projections relating to the future, including statements regarding guidance, are forward-looking statements within the meaning of these laws. Although we believe that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, there can be no assurance that our expectations will be realized. These forward-looking statements are subject to a number of known and unknown risks and uncertainties, many of which are beyond our control that could cause actual results to differ materially and adversely from such statements. These risks and uncertainties include: changes in the price of potash or langbeinite; operational difficulties at our facilities; changes in demand and/or supply for potash or langbeinite; changes in our reserve estimates; our ability to achieve the initiatives of our business strategy, including but not limited to the development of the HB Mine as a solution mine; changes in the prices of our raw materials, including but not limited to the price of natural gas; fluctuations in the costs of transporting our products to customers; changes in labor costs and availability of labor with mining expertise; the impact of federal, state or local government regulations, including but not limited to environmental and mining regulations; competition in the fertilizer industry; declines in U.S. or world agricultural production; declines in oil and gas drilling; changes in economic conditions; adverse weather events at our facilities; our ability to comply with covenants inherent in our current and future debt obligations to avoid defaulting under those agreements and the risk factors detailed in our filings with the Securities and Exchange Commission. Please refer to those filings for more information on these risk factors. These forward-looking statements speak only as of the date of this press release, and we undertake no obligation to publicly update or revise any forward-looking statement, whether as the result of future events, new information or otherwise.