Revenue Performance - Revenue for Q1 2024 totaled $21.7 million, a 4% increase from $20.8 million in the prior year period, despite a 6% reduction in volumes[3] - Total revenue for the three months ended March 31, 2024, was $21,740,000, representing an increase of 4.5% compared to $20,805,000 for the same period in 2023[17] Pricing and Margins - Average selling price (ASP) increased by approximately 16% year-over-year, marking the fourth consecutive quarter of double-digit growth in ASP[3] - Gross margin improved to 37% in Q1 2024, more than double the 17% reported in the prior year period, driven by higher ASP and operational cost management[3] Loss and Adjusted EBITDA - Net loss for Q1 2024 was $3.4 million, significantly improved from a net loss of $7.5 million in the prior year period[6] - Adjusted EBITDA loss narrowed to $1.1 million in Q1 2024, compared to a loss of $7.7 million in the prior year period[3] - Operating loss improved to $(2,980,000) for Q1 2024, compared to $(7,827,000) in Q1 2023, reflecting a reduction of 61.9%[17] - Net loss for the three months ended March 31, 2024, was $(3,419,000), a significant improvement from $(7,508,000) in the prior year, marking a 54.4% reduction[17] - Adjusted EBITDA loss for Q1 2024 was $(1,144,000), compared to $(7,683,000) in Q1 2023, indicating a significant improvement[20] Capital Expenditures and Forecast - Capital expenditures for Q1 2024 totaled $9.6 million, up from $3.5 million in the prior year, driven by ongoing facility expansions[8] - The company updated its full-year 2024 capex forecast to a range of $60-70 million, reflecting an increase due to higher steel and concrete costs for the Red River expansion[9] Expansion and Contracts - The first supply contract for Granular Activated Carbon (GAC) was executed, totaling a forecasted 5 million pounds/year, with delivery expected to commence in Q1 2025[4] - The Red River expansion remains on schedule for first production in Q4 2024, with an expected payback period of 3 years or less[5] Regulatory Impact - The EPA's new regulations on PFAS compounds are expected to drive stronger demand for the company's GAC products[4] Asset and Liability Management - Total current assets decreased to $72,038,000 as of March 31, 2024, down from $86,461,000 at the end of 2023, a decline of 16.7%[15] - Total liabilities decreased to $54,634,000 as of March 31, 2024, down from $57,102,000 at the end of 2023, a reduction of 4.1%[15] - Cash and restricted cash at the end of the period was $44,019,000, down from $79,090,000 at the end of March 2023, a decrease of 44.4%[18] Cash Flow - The company reported a net cash provided by operating activities of $526,000 for Q1 2024, contrasting with $(17,705,000) in the same period last year[18]

Revenue Performance - Q4 2023 revenues increased by 20% YoY to $28.1 million, driven by higher average selling prices and positive product mix changes[1] - Full year 2023 revenues totaled $99.2 million, down from $103.0 million in the prior year, primarily due to lower sales from power generation customers[7] - Total revenue for Q4 2023 was $28,104,000, an increase of 19.5% compared to $23,409,000 in Q4 2022[13] Profitability and Income - Gross margin improved to 50% in Q4 2023, up from 25.4% in the prior year period, reflecting a focus on profitability and cost management[3] - Adjusted EBITDA for Q4 2023 was $7.2 million, compared to a loss of $1.2 million in the prior year period, marking the second consecutive quarter of positive Adjusted EBITDA[4] - The company achieved positive net income of $3.3 million in Q4 2023, the first positive net income quarter since Q4 2021[1] - Operating income for Q4 2023 was $3,104,000, compared to a loss of $3,374,000 in Q4 2022, marking a significant turnaround[13] - Net income for the year ended December 31, 2023, was a loss of $12,249,000, compared to a loss of $8,917,000 in 2022, indicating ongoing challenges[14] Capital Expenditures and Forecast - Capital expenditures for full year 2023 were $27.5 million, significantly higher than $8.9 million in the prior year, driven by strategic growth projects[5] - Full year 2024 capital expenditures are forecasted to be $55-60 million, with Red River Phase 1 expected to account for $45-50 million of that total[6] - The company plans to fund 2024 capital expenditures through cash on hand, cash generation, and potential customer prepayments, with no plans to issue equity[6] Debt and Financial Health - Total debt as of December 31, 2023, was $20.9 million, up from $4.6 million in the prior year, primarily due to a $10.0 million term loan related to the acquisition[5] - Cash and restricted cash at the end of 2023 was $54,153,000, down from $76,432,000 at the end of 2022[15] - The company reported a decrease in total current liabilities to $23,048,000 in 2023 from $23,884,000 in 2022, indicating improved short-term financial health[12] - The company issued common stock, generating net proceeds of $15,220,000 in 2023, which supports liquidity and operational funding[15] Asset Growth - Total assets increased to $235,502,000 as of December 31, 2023, up from $181,164,000 in 2022, reflecting growth in the company's asset base[12] Strategic Initiatives - The company plans to continue focusing on market expansion and new product development as part of its strategic initiatives moving forward[16] - The Red River GAC facility expansion is on track for commissioning in Q4 2024, with ongoing strong demand for high-performance granular products[2] Shareholder Impact - The weighted-average number of common shares outstanding increased to 32,367,000 in 2023 from 18,506,000 in 2022, reflecting the impact of stock issuance[13]

Revenue and Sales Performance - Total revenue for the year ended December 31, 2023, was $99,183,000, a decrease of 4% compared to $102,987,000 in 2022[104] - Consumables revenue decreased by $20,000,000 primarily due to lower volumes sold, particularly among power generation customers[105] - Consumables gross margin increased due to improved pricing and decreased costs of feedstock and additives, despite a decrease in volumes sold[105] Expenses and Costs - Payroll and benefits expenses increased by 44% to $15,154,000, primarily due to the addition of Legacy Arq employees[106] - General and administrative expenses rose by 55% to $12,641,000, driven by costs associated with the Arq Acquisition[106] - Depreciation and amortization expenses increased by 64% to $10,543,000, largely due to new long-lived assets acquired in the Arq Acquisition[106] - Interest expense surged by 797% to $3,014,000, reflecting increased borrowing costs[109] - Interest expense increased to $2.0 million for the CFG Loan and $0.5 million for the CTB Loan in 2023, compared to the previous year[112] Income and Taxation - Earnings from equity method investments decreased by 54% to $1,623,000, primarily due to the winding down of operations at Tinuum Group and Tinuum Services[109] - Reported income tax expense for 2023 was $0.2 million with an effective rate of (1)%, while the valuation allowance on deferred tax assets increased to $98.8 million from $88.3 million in 2022[112] - Income tax expense is determined under the asset and liability method, requiring judgment in estimating future operating results and tax planning strategies[137] - Deferred tax assets are recognized only if they are more likely than not to be realized, with a valuation allowance established when necessary[137] Cash Flow and Liquidity - Cash and restricted cash decreased from $76.4 million in 2022 to $54.2 million in 2023, a decline of $22.3 million[122] - Cash flows used in operating activities increased to $(16.7) million in 2023 from $(6.1) million in 2022, primarily due to a net loss increase of $3.3 million[124] - Cash flows used in investing activities rose to $(28.5) million in 2023, largely due to acquisition costs related to the Arq Acquisition[125] - Cash flows from financing activities increased by $24.6 million in 2023, driven by proceeds from common stock issuance of $16.2 million and net proceeds from the CFG Loan of $8.5 million[126] - The company anticipates that cash on hand as of December 31, 2023 will provide sufficient liquidity to fund operations for the next 12 months[128] Assets and Liabilities - Total liabilities for asset retirement obligations (ARO) as of December 31, 2023, amount to $6.2 million[132] - Consolidated balance sheet reflects total loans of $47.837 million, with $12.199 million due in less than 1 year[132] - Operating lease obligations total $18.559 million, with $3.139 million due in less than 1 year[132] - Finance lease obligations amount to $3.666 million, with $2.274 million due in less than 1 year[132] Business Operations and Future Outlook - The company expects to begin using Arq Powder as a feedstock for GAC products by the end of 2024, which may open new market opportunities[93] - The company changed its name to Arq, Inc. and its common stock began trading under the ticker symbol "ARQ" on February 1, 2024[93] - The company expects to spend between $45 and $50 million on the Red River Plant expansion in 2024, depending on project pace[129] Accounting and Estimates - The company applies the acquisition method for business combinations, requiring significant estimates and assumptions regarding fair values[134] - Long-lived assets and intangibles are reviewed for impairment at least annually, with impairment losses measured based on excess carrying amounts over estimated fair values[135] - Reclamation costs related to AROs are allocated to expense over the life of the related mine assets and adjusted periodically[136] - The company evaluates critical accounting estimates regularly, which are essential for understanding historical and future performance[134] EBITDA Performance - EBITDA for the year ended December 31, 2023 was $123, compared to an EBITDA loss of $(1,687) in 2022[117]

Core Viewpoint - Arq, Inc. has completed its corporate rebranding from Advanced Emissions Solutions, Inc. and will begin trading on Nasdaq under the new ticker symbol "ARQ" on February 1, 2024, marking a strategic evolution towards becoming a leading North American environmental technology company [1][3]. Group 1: Corporate Rebranding and Trading - The company will celebrate its rebranding and first day of trading by ringing the Nasdaq opening bell on February 1, 2024, with CEO Bob Rasmus leading the ceremony [2]. - The rebranding reflects the company's commitment to its strategic expansion plan and transformation into a leading supplier of purification solutions, particularly focusing on granular activated carbon [3]. Group 2: Company Mission and Vision - Arq's new brand identity and logo are inspired by its focus on protecting natural resources and addressing pollution control needs [3]. - The company's core mission remains to be the safest, most cost-effective, and most profitable provider of activated carbon solutions, continuing to serve as an innovative and trusted partner for customers [3]. Group 3: Company Overview - Arq is a diversified environmental technology company that produces activated carbon products aimed at reducing environmental impact and enabling a cleaner planet [4]. - As the only vertically integrated producer of activated carbon products in North America, Arq provides a reliable domestic supply of high-demand products designed to remove harmful chemicals and pollutants from water, land, and air [4].

Core Viewpoint - Advanced Emissions Solutions, Inc. has signed a contract with Wieland Davco Corporation for the construction of a Granular Activated Carbon facility at its Red River plant in Coushatta, LA, with construction mobilization already underway and expected completion by Q4 2024 [1][2] Company Developments - The total construction and equipment costs for the Red River facility are estimated to be between $45-50 million, reflecting a 20% increase from previous estimates due to inflation and timing issues [2] - The company is confident that the increased costs will be managed through existing capital, anticipated cash flow in 2024, and cost reductions in other areas [2] - Major construction at the Corbin facility in Kentucky, which will supply feedstock for the Red River plant, is on track for timely completion and within budget, with commissioning activities set to begin in March 2024 [3] Market Outlook - The CEO of ADES expressed optimism about entering a materially undersupplied GAC market in North America, anticipating valuable sales contracts ahead of the facility's completion [3] - The company plans to produce 25 million pounds of GAC as part of its expansion efforts [3] Strategic Partnerships - The partnership with Wieland is highlighted as a key element in the successful execution of the construction project, with both companies committed to delivering the project safely, on time, and within budget [3]

Reflects strategic evolution to a leading North American environmental technology company Corporate rebrand and NASDAQ ticker change to "ARQ" effective February 1, 2024 GREENWOOD VILLAGE, Colo., Jan. 23, 2024 (GLOBE NEWSWIRE) --  Advanced Emissions Solutions, Inc. (NASDAQ:ADES) (the "Company" or "ADES"), a producer of activated carbon and other environmentally efficient carbon products for use in purification and sustainable materials, today announced a corporate rebrand to Arq, Inc. ("Arq"), expected to be ...

GREENWOOD VILLAGE, Colo., Jan. 15, 2024 (GLOBE NEWSWIRE) -- Advanced Emissions Solutions, Inc. (NASDAQ:ADES) (the "Company" or "ADES"), an environmental technology company producing activated carbon and other unique carbon solutions for use in water, air and soil purification, and other sustainable materials, today announced that it will attend the Virtual Sidoti Micro-Cap Conference on Wednesday, January 17, 2024 and Thursday, January 18, 2024. The Company's Chief Executive Officer, Bob Rasmus, VP of Finan ...

Financial Data and Key Metrics Changes - Third quarter revenue totaled $21.8 million, down from $28.4 million in Q3 2022, primarily due to lower sales volumes from power generation customers, partially offset by higher average selling prices for consumable products [22] - Year-to-date revenues were $71.1 million compared to $79.6 million in the prior year, reflecting a decline due to lower sales volumes [22] - Gross margin improved to 30.6% in Q3 2023 from 24.1% in Q3 2022, driven by higher average selling prices and better input cost management [8][23] - Positive EBITDA was achieved for the third quarter after four consecutive quarters of negative EBITDA [9] - Net loss for Q3 was $2.2 million or $0.06 per diluted share, an improvement from a net loss of $2.4 million or $0.13 per diluted share in the prior year [25] Business Line Data and Key Metrics Changes - The consumables product line saw a 5% revenue growth compared to the prior year, despite overall revenue decline [9] - Average selling price (ASP) increased by approximately 16% year-to-date compared to 2022 [8] Market Data and Key Metrics Changes - Demand from power generation customers remains volatile, but recent increases in natural gas prices are expected to support demand levels [10] - Stable demand is observed in industrial and water markets, although these markets are smaller compared to power generation [10] Company Strategy and Development Direction - The company is focused on transitioning to become a producer of granular activated carbon, with ongoing expansion plans at Red River and Corbin [7][11] - The first phase of expansion at Red River is expected to result in a nameplate capacity of about 25 million pounds of annual granular activated carbon production [11] - The company is evaluating the practicality and costs associated with accelerating certain aspects of the business plan, with potential for additional phases of expansion [16][17] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism regarding regulatory developments, particularly the anticipated EPA regulations on PFAS, which could expand demand for the company's products [18][19] - The company is confident in its ability to meet or beat the current timeline for expansion projects and is actively engaging with customers to secure contracts before production begins [29] Other Important Information - The company revised its capital expenditure expectations for 2023 to between $35 million and $40 million, down from previous estimates [12][27] - Cash balances as of September 30 totaled $61.3 million, a decrease from $76.4 million at the end of 2022, while total debt increased to $21.2 million [26] Q&A Session Summary Question: Can you break down the improvement in gross margins? - Management indicated that the improvement in gross margin was primarily due to the elimination of negative margin contracts and better cost management [34] Question: When will there be clarity on the potential to accelerate expansion plans at Red River? - Management hopes to have clarity by the next quarterly call, but expects it sooner, emphasizing the importance of customer receptivity in evaluating acceleration [36]

Financial Performance - For the three months ended September 30, 2023, the company recognized a net loss of $2.2 million, compared to a net loss of $2.4 million for the same period in 2022, reflecting a decrease in demand for its products due to lower natural gas prices [108]. - Total revenues for the three months ended September 30, 2023, were $29.8 million, a 5% increase from $28.4 million in the same period of 2022, driven by higher pricing and a favorable product mix [110]. - For the nine months ended September 30, 2023, total revenues decreased by 11% to $71.1 million from $79.6 million in the same period of 2022, primarily due to a decrease in volumes sold [124]. - The company reported a pretax loss of $15.6 million for the nine months ended September 30, 2023, compared to a pretax loss of $5.8 million in the same period of 2022 [137]. Operating Expenses - Operating expenses for the three months ended September 30, 2023, totaled $11.6 million, a 23% increase from $9.5 million in the same period of 2022, primarily due to higher payroll and benefits expenses related to the Arq Acquisition [118]. - Operating expenses increased by 36% to $34.3 million for the nine months ended September 30, 2023, compared to $25.3 million in the same period of 2022 [126]. - Payroll and benefits expenses rose by 67% to $12.5 million, largely due to the addition of Arq employees and severance costs [127]. - Legal and professional fees increased by 9% to $8.1 million, primarily due to costs associated with the Arq Acquisition [128]. - General and administrative expenses increased by 62% to $9.2 million, driven by expenses incurred by Arq and increases in research and development [129]. - Depreciation and amortization expenses increased by 53% to $7.3 million, mainly due to the addition of long-lived and intangible assets from the Arq Acquisition [130]. Cash Flow and Capital Expenditures - As of September 30, 2023, cash and restricted cash decreased from $76.4 million to $61.3 million, a decline of $15.1 million [144]. - Cash flows used in operating activities increased by $21.5 million, primarily due to a net loss of $15.5 million for the nine months ended September 30, 2023, compared to a net loss of $5.8 million in the prior year [145]. - Cash flows used in investing activities increased by $15.3 million, mainly due to a $10.8 million increase in property, plant, and equipment additions from the Arq Acquisition [146]. - Cash flows provided by financing activities increased by $24.7 million, driven by net borrowings of $8.5 million from the Term Loan and net proceeds of $15.2 million from the PIPE Investment [147]. - The company expects to incur between $35.0 million and $40.0 million in capital expenditures for 2023, with $17.0 million already incurred in the first nine months [149]. - The company anticipates significant capital expenditures due to the Arq Acquisition, including quarterly interest payments on the Term Loan and a balloon payment of approximately $12.2 million due on February 1, 2027 [148]. - The company expects to fund all capital expenditures for 2023 from cash on hand [149]. Acquisitions and Debt - The company completed the Arq Acquisition on February 1, 2023, issuing shares valued at $31.2 million as purchase consideration [103]. - The company entered into a Term Loan agreement for $10.0 million on February 1, 2023, with a maturity date of February 1, 2027, and an interest rate margin of 9.00% paid in cash [104]. - Interest expense for the three months ended September 30, 2023, increased primarily due to $0.5 million related to the Term Loan and $0.1 million related to the Arq Loan assumed in the acquisition [121]. - Interest expense surged by 732% to $2.2 million, primarily due to new debt related to the Arq Acquisition [135]. Market Conditions and Future Outlook - The average natural gas spot prices for the three months ended September 30, 2023, were $2.59 per MMBtu, significantly lower than $7.99 per MMBtu in the same quarter of 2022, impacting demand for coal-fired generation [111]. - Consumables revenues decreased by $16.7 million due to lower product volumes among power generation customers, attributed to low natural gas prices [125]. - The company expects that product price increases will help offset decreases in volumes due to competition from alternative energy sources impacting demand for its AC and chemical products [112]. - Forward-looking statements indicate potential risks including competition in the activated carbon market and the ability to successfully integrate Arq's business [154]. - The company is evaluating the impacts of the Arq Acquisition on its internal control over financial reporting [157].

Advanced Emissions Solutions, Inc. (NASDAQ:ADES) Q2 2023 Earnings Conference Call August 10, 2023 9:00 AM ET Company Participants Ryan Coleman - Alpha IR Group Robert Rasmus - President and Chief Executive Officer Morgan Fields - Chief Accounting Officer Conference Call Participants Gerard Sweeney - ROTH Capital Partners Operator Ladies and gentlemen, thank you for standing by. My name is Brent, and I will be your conference operator today. At this time, I would like to welcome everyone to the Advanced Emis ...