Toronto, Ontario--(Newsfile Corp. - August 7, 2024) - Argo Gold Inc. (CSE: ARQ) (OTC Pink: ARBTF) (XFRA: A2ASDS) (XSTU: A2ASDS) (XBER: A2ASDS) ("Argo" or the "Company") has entered into an agreement to acquire mineral claims in North Saskatchewan pursuant to which Argo Gold can acquire a 100% interest in certain mineral claims located 120 kilometres north of La Ronge, Saskatchewan in exchange for an aggregate of $7,000 cash and 1,000,000 common shares of the Company. The common shares issuable thereunder wi ...

GREENWOOD VILLAGE, Colo., July 30, 2024 (GLOBE NEWSWIRE) -- Arq, Inc. (NASDAQ: ARQ) (the "Company" or "Arq"), a producer of activated carbon and other environmentally efficient carbon products for use in purification and sustainable materials, today announced the Company expects to release its second quarter 2024 financial results and file its Quarterly Report on Form 10-Q for the period ended June 30, 2024 after market close on Monday, August 12, 2024. A conference call to discuss the Company's financial p ...

Core Viewpoint - Arq, Inc. has secured significant contracted volume for granular activated carbon (GAC) from its Red River facility, indicating strong market demand and confidence in its products [1][2][5]. Company Developments - The company has contracted over 50% of the Red River facility's nameplate capacity, which is 25 million pounds per annum, translating to 13 million pounds of annual contracted volume [8]. - Construction at the Red River facility is on schedule for first commercial production by the end of 2024, with capital requirements estimated at $60-70 million for the expansion project [5][8]. - Ongoing contract negotiations are progressing positively, with expectations to fully contract the facility's capacity before production begins [2][5]. Market Position - Arq is positioned as the only vertically integrated producer of activated carbon products in North America, providing a reliable domestic supply of high-demand products [6]. - The company emphasizes the limited supply of high-quality GAC in the market, which supports its growth strategy and pricing power [2][8]. Financial Implications - The pricing for GAC contracts remains attractive, significantly higher than the company's average powdered activated carbon (PAC) pricing, which is expected to enhance revenue and expand margins [8].

Reflects >50% of nameplate capacity under contract roughly six months ahead of first production Total contracted GAC demand now stands, when fully scaled up to ultimate run-rate requirements, at 13 million pounds per annum, representing 52% of Arq's expanded nameplate capacity of 25 million pounds per annum at its strategic Red River activated carbon manufacturing facility. Consistent with previous GAC contract awards, pricing remains attractive and represents a multiple of the Company's average powdered ac ...

Toronto, Ontario--(Newsfile Corp. - July 10, 2024) - Argo Gold Inc's. (CSE: ARQ) (OTC Pink: ARBTF) (XFRA: A2ASDS) (XSTU: A2ASDS) (XBER: A2ASDS) ("Argo" or the "Company") May 2024 oil production was a total of 3,375 barrels for the month, averaging 109 barrels per day. Oil prices averaged CDN$79.43 per barrel and Argo's May oil revenue was $268,111 and net operating cash flow was $175,732. About Argo Gold Argo Gold is a Canadian mineral exploration and development company, and an oil producer. Information on ...

Arq, Inc. (NASDAQ:ARQ) Q1 2024 Results Conference Call May 9, 2024 9:00 AM ET Company Participants Anthony Nathan - Head of Investor Relations Robert Rasmus - President and Chief Executive Officer Stacia Hansen - Treasurer and Chief Accounting Officer Conference Call Participants Gerry Sweeney - Roth Capital Mark Silverberg - ICR Operator Good day and welcome to the Arq First Quarter 2024 Earnings Call. At this time, all participants are in a listen-only mode. Later, there will be a question and answer ses ...

PART I - FINANCIAL INFORMATION [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) Arq, Inc improved its Q1 2024 net loss to $3.4 million and generated positive operating cash flow, though total assets slightly decreased due to capital expenditures [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2024, total assets decreased slightly to $229.8 million from year-end 2023, driven by a reduction in cash, while total liabilities also saw a minor decrease | (in thousands) | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | **Total current assets** | $72,038 | $86,461 | | Cash | $35,227 | $45,361 | | Property, plant and equipment, net | $103,645 | $94,649 | | **Total Assets** | **$229,798** | **$235,502** | | **Total current liabilities** | $21,967 | $23,048 | | **Total Liabilities** | **$54,634** | **$57,102** | | **Total Stockholders' Equity** | **$175,164** | **$178,400** | [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Revenue grew 4.5% to $21.7 million in Q1 2024, leading to a significantly reduced operating loss of $3.0 million and a net loss that was halved compared to the prior-year period | (in thousands, except per share data) | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--- | :--- | :--- | | **Revenue** | **$21,740** | **$20,805** | | Cost of revenue | $13,713 | $17,175 | | **Operating loss** | **$(2,980)** | **$(7,827)** | | **Net loss** | **$(3,419)** | **$(7,508)** | | **Loss per common share (Basic & Diluted)** | **$(0.09)** | **$(0.32)** | [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) The company achieved positive operating cash flow of $0.5 million in Q1 2024, a stark contrast to the prior year's cash use, while investing activities increased due to plant expansion | (in thousands) | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $526 | $(17,705) | | Net cash used in investing activities | $(9,647) | $(2,897) | | Net cash (used in) provided by financing activities | $(1,013) | $23,260 | | **(Decrease) increase in Cash and Restricted Cash** | **$(10,134)** | **$2,658** | [Notes to Condensed Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail the company's business, the 2023 Arq Acquisition, significant debt obligations, major capital commitments for its Red River Plant, and the extension of its Tax Asset Protection Plan - In February 2023, the company acquired Legacy Arq to secure feedstock and a manufacturing facility in Corbin, Kentucky, to produce Arq Powder, which will be used to create **GAC products starting by the end of 2024**[26](index=26&type=chunk)[45](index=45&type=chunk) - The company executed a contract in January 2024 for the construction of a GAC facility at its Red River Plant, with expected completion by the end of 2024 and estimated total costs of **$75.0 - $80.0 million**[91](index=91&type=chunk)[93](index=93&type=chunk) - The company's Tax Asset Protection Plan (TAPP), designed to protect its net operating losses, was amended in April 2024 to **extend its duration to December 31, 2025** (or December 31, 2024, if stockholder approval is not obtained)[107](index=107&type=chunk)[108](index=108&type=chunk) | (in thousands) | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | CFG Loan due February 2027 | $10,000 | $10,000 | | CTB Loan due January 2036 | $9,394 | $9,527 | | Finance lease obligations | $3,183 | $3,465 | | **Total Debt Obligations (net)** | **$20,662** | **$20,927** | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=22&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses improved Q1 2024 results driven by pricing, the impact of the Red River Plant expansion, and future capital expenditure plans funded by cash and potential financing [Results of Operations](index=23&type=section&id=Results%20of%20Operations) Q1 2024 revenue rose 4% due to higher pricing and product mix, while operating expenses declined significantly due to the absence of prior-year acquisition-related costs - Revenue increase in Q1 2024 was driven by **higher pricing and a better product mix**, which offset lower sales volumes to power generation customers who switched to cheaper natural gas[139](index=139&type=chunk) - SG&A expenses decreased by **$3.6 million**, largely because Q1 2023 included significant legal, consulting, and severance costs associated with the Arq Acquisition[145](index=145&type=chunk)[146](index=146&type=chunk)[147](index=147&type=chunk) - The EPA's new PFAS drinking water regulation, issued in April 2024, is expected to drive a **material increase in demand for GAC** in the water purification market[135](index=135&type=chunk) [Non-GAAP Financial Measures](index=26&type=section&id=Non-GAAP%20Financial%20Measures) The company's Adjusted EBITDA loss improved substantially to $1.1 million in Q1 2024 from $7.7 million in the prior-year period, which included significant one-time transaction costs | (in thousands) | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--- | :--- | :--- | | Net loss | $(3,419) | $(7,508) | | EBITDA loss | $(1,144) | $(4,988) | | **Adjusted EBITDA loss** | **$(1,144)** | **$(7,683)** | [Liquidity and Capital Resources](index=27&type=section&id=Liquidity%20and%20Capital%20Resources) With $35.2 million in cash, management believes liquidity is sufficient for the next year's operations and major capital projects, supported by planned debt refinancing - Principal sources of liquidity as of March 31, 2024, were **$35.2 million in cash on hand** and cash from operations[162](index=162&type=chunk)[165](index=165&type=chunk) - The company expects to spend between **$55 and $60 million** on the Red River Plant expansion and between **$5 and $10 million** to complete the commissioning of the Corbin Facility during 2024[169](index=169&type=chunk) - To fund the completion of the Red River Plant, the company anticipates using cash on hand, cash generation, customer prepayments, and a **planned refinancing and expansion of the CFG Loan**[168](index=168&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=30&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, Arq, Inc is not required to provide this information - The information under this item is **not required to be provided** by smaller reporting companies[177](index=177&type=chunk) [Item 4. Controls and Procedures](index=30&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls were effective as of the quarter-end and is currently integrating the internal controls of the recently acquired Legacy Arq business - The principal executive officer and principal financial officer concluded that **disclosure controls and procedures were effective** as of March 31, 2024[178](index=178&type=chunk) - The company is integrating Legacy Arq's internal controls and will incorporate them into the annual report on internal control for the **year ending December 31, 2024**[179](index=179&type=chunk) PART II - OTHER INFORMATION [Item 1. Legal Proceedings](index=31&type=section&id=Item%201.%20Legal%20Proceedings) The company reports no material pending legal proceedings as of March 31, 2024 - As of March 31, 2024, there were **no material pending legal proceedings** to which the Company is a party[96](index=96&type=chunk)[183](index=183&type=chunk) [Item 1A. Risk Factors](index=31&type=section&id=Item%201a.%20Risk%20Factors) The company's previously disclosed risk factors from its 2023 annual report remain materially unchanged - There have been **no material updates to risk factors** from those disclosed in the fiscal year 2023 annual report on Form 10-K[184](index=184&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=31&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company issued shares to its CEO to complete a prior subscription agreement and made no share repurchases during the quarter - On April 24, 2024, the company received **$0.8 million** and issued **422,221 shares** of common stock to CEO Robert Rasmus, fulfilling a subscription agreement[185](index=185&type=chunk) - **No shares were repurchased** during the three months ended March 31, 2024, and the company has **$7.0 million remaining** under its stock repurchase program[187](index=187&type=chunk) [Item 4. Mine Safety Disclosures](index=31&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Mine safety violation information and related regulatory matters are provided in an exhibit to this report - Mine safety disclosures required by Regulation S-K are included in **Exhibit 95.1** to this Quarterly Report[190](index=190&type=chunk) [Item 6. Exhibits](index=32&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the quarterly report, including corporate governance documents and material contracts

[Executive Summary & Company Overview](index=1&type=section&id=Executive%20Summary%20%26%20Company%20Overview) [Q1 2024 Performance Highlights](index=1&type=section&id=Q1%202024%20Performance%20Highlights) Arq Corporation achieved significant year-over-year performance improvement in Q1 2024, primarily driven by enhanced PAC gross margins, securing its first GAC contract, and progressing the Red River expansion project on schedule for Q4 2024 commissioning - Q1 2024 performance significantly improved year-over-year, primarily due to enhanced **PAC gross margins**[1](index=1&type=chunk) - Successfully signed the first GAC contract, securing **20% of capacity** with attractive pricing[1](index=1&type=chunk) - The Red River expansion project is on schedule for commissioning in **Q4 2024**, with an expected payback period of **three years or less**[1](index=1&type=chunk) [Financial Highlights](index=1&type=section&id=Financial%20Highlights) [Q1 2024 Key Financial Metrics](index=1&type=section&id=Q1%202024%20Key%20Financial%20Metrics) In Q1 2024, Arq's revenue grew 4% year-over-year to $21.7 million, driven by a 16% increase in average selling price (ASP) and optimized product mix, despite a 6% decline in volume, while gross margin doubled to 37%, with significant reductions in net loss and adjusted EBITDA loss, reflecting improved profitability Q1 2024 Key Financial Metrics | Metric | Q1 2024 (Million USD) | Q1 2023 (Million USD) | YoY Change | Notes | | :--- | :---: | :---: | :---: | :--- | | Revenue | 21.7 | 20.8 | +4% | ASP increased 16%, product mix optimized, offsetting 6% volume decline | | Gross Margin | 37% | 17% | +20 percentage points | Driven by ASP increase and operational cost management | | Net Loss | (3.4) | (7.5) | Improved 4.1 | Significant improvement | | Adjusted EBITDA Loss | (1.1) | (7.7) | Improved 6.6 | Significant improvement | | Cash and Restricted Cash (End of Period) | 44.0 | 54.2 | -10.2 | Primarily for Red River and Corbin facility investments | | FY 2024 Capex Forecast | 60-70 | 55-60 (Original Forecast) | +5-10 | Primarily due to increased steel and concrete costs for Red River expansion | - Average Selling Price (ASP) achieved double-digit year-over-year growth for the fourth consecutive quarter, increasing by approximately **16% in Q1 2024**[4](index=4&type=chunk) [Recent Business Highlights](index=1&type=section&id=Recent%20Business%20Highlights) [Strategic and Operational Achievements](index=1&type=section&id=Strategic%20and%20Operational%20Achievements) The company achieved several key strategic and operational advancements in Q1 2024, including signing its first GAC supply contract, initiating Corbin facility commissioning, progressing the Red River GAC facility expansion, and benefiting from new EPA PFAS drinking water regulations expected to drive market demand - Signed the first Granular Activated Carbon (GAC) supply contract with a customer, projecting **5 million pounds** of annual supply at pricing significantly above average PAC prices, with deliveries expected to commence in **Q1 2025**[4](index=4&type=chunk) - The Corbin facility began commissioning in **April 2024**, expected to complete in **May**, supporting asphalt waste feedstock for Red River GAC production[4](index=4&type=chunk) - Strategic expansion of the Red River GAC facility continues to progress, with construction on track for commissioning in **Q4 2024** as planned[4](index=4&type=chunk) - The U.S. Environmental Protection Agency (EPA) issued its first national primary drinking water regulation for six PFAS compounds, significantly lowering permissible PFAS levels and expected to drive strong demand for Arq solutions and GAC products[4](index=4&type=chunk) - Advisors have been appointed to plan the refinancing and expansion of the company's term loan[4](index=4&type=chunk) [CEO Commentary](index=2&type=section&id=CEO%20Commentary) [Business Momentum and Strategic Validation](index=2&type=section&id=Business%20Momentum%20and%20Strategic%20Validation) CEO Bob Rasmus highlighted significant Q1 progress, achieving revenue growth and margin expansion, with expectations for continued full-year financial improvement, while the first GAC contract validates the company's strategy, and new EPA regulations reinforce Arq's critical role in environmental solutions - CEO Bob Rasmus stated that Q1 results demonstrate clear business momentum and improvement, with revenue growth and margin expansion driven by **higher pricing and cost management**[5](index=5&type=chunk) - Full-year financial performance is expected to continue improving, with the foundational PAC business projected to be **cash flow positive for FY 2024**[5](index=5&type=chunk) - The signing of the first GAC supply contract is a significant strategic milestone, validating the company's strategy and expanded solutions while **de-risking the Red River plant expansion**[5](index=5&type=chunk) - New EPA drinking water regulations uniquely position the company to help businesses meet stricter requirements, with investments significantly improving the growth trajectory and making Arq a **key enabler of environmental integrity goals** in the U.S. and globally[5](index=5&type=chunk) [First Quarter 2024 Results](index=2&type=section&id=First%20Quarter%202024%20Results) [Revenue Performance](index=2&type=section&id=Revenue%20Performance) Q1 2024 revenue reached $21.7 million, a 4% year-over-year increase, primarily driven by a significant rise in average selling price (ASP) and a favorable product mix, despite a 6% decline in sales volume Revenue Performance | Metric | Q1 2024 (Million USD) | Q1 2023 (Million USD) | YoY Change | | :--- | :---: | :---: | :---: | | Revenue | 21.7 | 20.8 | +4% | | Average Selling Price (ASP) | Approx 16% increase | - | - | | Sales Volume | 6% decrease | - | - | [Cost of Revenue and Gross Margin](index=2&type=section&id=Cost%20of%20Revenue%20and%20Gross%20Margin) Q1 2024 cost of revenue decreased 20% year-over-year to $13.7 million, primarily due to ongoing operational cost management, with gross margin consequently doubling to 37%, up from 17% in the prior year period Cost of Revenue and Gross Margin | Metric | Q1 2024 (Million USD) | Q1 2023 (Million USD) | YoY Change | | :--- | :---: | :---: | :---: | | Cost of Revenue | 13.7 | 17.2 | -20% | | Gross Margin | 37% | 17% | +20 percentage points | [Operating Expenses](index=2&type=section&id=Operating%20Expenses) In Q1 2024, selling, general, and administrative (SG&A) expenses significantly decreased, while research and development (R&D) expenses increased due to product qualification testing Operating Expenses | Metric | Q1 2024 (Million USD) | Q1 2023 (Million USD) | YoY Change | | :--- | :---: | :---: | :---: | | Selling, General and Administrative Expenses | 7.7 | 11.3 | -3.6 | | Research and Development Expenses | 1.6 | 0.7 | +0.9 | - SG&A expenses decreased primarily due to reductions in salaries and benefits, and legal and professional service fees, partially offset by increased board compensation and rent expenses[8](index=8&type=chunk) - R&D expenses increased primarily due to product qualification testing with potential early adopters during the GAC contract signing process[9](index=9&type=chunk) [Operating Loss](index=2&type=section&id=Operating%20Loss) Q1 2024 operating loss narrowed to $3.0 million, a significant improvement from $7.8 million in the prior year, primarily driven by cost reductions and higher product sales pricing Operating Loss | Metric | Q1 2024 (Million USD) | Q1 2023 (Million USD) | YoY Change | | :--- | :---: | :---: | :---: | | Operating Loss | (3.0) | (7.8) | Improved 4.8 | [Interest Expense and Income Tax](index=2&type=section&id=Interest%20Expense%20and%20Income%20Tax) Q1 2024 interest expense increased to $0.8 million, primarily from a $10 million term loan related to the February 2023 Arq acquisition, with income tax expense being negligible in both quarters Interest Expense and Income Tax | Metric | Q1 2024 (Million USD) | Q1 2023 (Million USD) | YoY Change | | :--- | :---: | :---: | :---: | | Interest Expense | 0.8 | 0.5 | +0.3 | | Income Tax Expense | 0 | 0 | 0 | [Net Loss and EPS](index=2&type=section&id=Net%20Loss%20and%20EPS) Q1 2024 net loss was $3.4 million, with a diluted loss per share of $0.09, a significant improvement from the prior year's $7.5 million net loss and $0.32 diluted loss per share, driven by improved gross margin and reduced SG&A costs Net Loss and EPS | Metric | Q1 2024 (Million USD) | Q1 2023 (Million USD) | YoY Change | | :--- | :---: | :---: | :---: | | Net Loss | (3.4) | (7.5) | Improved 4.1 | | Diluted Loss Per Share | (0.09) | (0.32) | Improved 0.23 | [Adjusted EBITDA Loss](index=2&type=section&id=Adjusted%20EBITDA%20Loss) Q1 2024 adjusted EBITDA loss narrowed to $1.1 million, a substantial improvement from $7.7 million in the prior year, primarily due to reduced net loss and increased net interest expense Adjusted EBITDA Loss | Metric | Q1 2024 (Million USD) | Q1 2023 (Million USD) | YoY Change | | :--- | :---: | :---: | :---: | | Adjusted EBITDA Loss | (1.1) | (7.7) | Improved 6.6 | [Capex and Balance Sheet](index=3&type=section&id=Capex%20and%20Balance%20Sheet) [Capital Expenditures and Cash Position](index=3&type=section&id=Capital%20Expenditures%20and%20Cash%20Position) Q1 2024 capital expenditures increased to $9.6 million, primarily for the expansion of Red River and Corbin facilities, with total cash and restricted cash at period-end being $44.0 million, a decrease from year-end 2023, reflecting strategic capital outlays Capital Expenditures | Metric | Q1 2024 (Million USD) | Q1 2023 (Million USD) | YoY Change | | :--- | :---: | :---: | :---: | | Capital Expenditures | 9.6 | 3.5 | +6.1 | Cash and Debt Position | Metric | March 31, 2024 (Million USD) | December 31, 2023 (Million USD) | QoQ Change | | :--- | :---: | :---: | :---: | | Cash and Restricted Cash | 44.0 | 54.2 | -10.2 | | Total Debt (including finance leases) | 20.7 | 20.9 | -0.2 | - Increased capital expenditures were primarily for the ongoing expansion of the Red River and Corbin facilities[15](index=15&type=chunk) - Total debt slightly decreased, primarily due to principal payments made during the quarter[16](index=16&type=chunk) [Strategic Investments and Updated 2024 Capex Forecast](index=3&type=section&id=Strategic%20Investments%20and%202024%20Capex%20Forecast%20Updates) [Updated 2024 Capex Forecast](index=3&type=section&id=Updated%202024%20Capex%20Forecast) The company raised its full-year 2024 capital expenditure forecast to $60-70 million, an increase of $5-10 million from previous guidance, primarily due to higher-than-expected steel and concrete costs for the Red River Phase 1 expansion, while reaffirming the investment payback period is expected to be three years or less Updated 2024 Capex Forecast | Metric | Updated FY 2024 Forecast (Million USD) | Previous Forecast (Million USD) | Change (Million USD) | | :--- | :---: | :---: | :---: | | Total Capital Expenditures | 60-70 | 55-60 | +5-10 | | Red River Phase 1 Expansion Project | 55-60 | - | - | - The increase in capital expenditures is primarily driven by increased steel and concrete requirements and costs for the **Red River Phase 1 expansion project**[18](index=18&type=chunk) - The company expects to fund 2024 capital expenditures through existing cash, cash generation, cost reductions, potential customer prepayments, and the refinancing and expansion of its term loan[19](index=19&type=chunk) [Conference Call and Webcast Information](index=3&type=section&id=Conference%20Call%20and%20Webcast%20Information) [Q1 2024 Earnings Call Details](index=3&type=section&id=Q1%202024%20Earnings%20Call%20Details) Arq Corporation has scheduled a conference call for Thursday, May 9, 2024, at 9:00 AM ET to discuss Q1 2024 results, with investors able to register to participate via webcast on the company's website or through a designated link, or by phone - The conference call is scheduled for **Thursday, May 9, 2024, at 9:00 AM ET**[20](index=20&type=chunk) - Participation in the webcast is available via the investor relations section of Arq's website or through the registration link: **https://www.webcast-eqs.com/login/arq050924**[20](index=20&type=chunk) - Dial-in numbers are **(800) 867-4593** (domestic U.S.) or **(785) 424-1037** (international)[20](index=20&type=chunk) [About Arq](index=3&type=section&id=About%20Arq) [Company Profile](index=3&type=section&id=Company%20Profile) Arq (NASDAQ: ARQ) is a diversified environmental technology company dedicated to producing products that contribute to a cleaner and safer planet and actively reduce environmental impact, as North America's only vertically integrated producer of activated carbon products, offering innovative, hard-to-source, and high-demand products - Arq is a diversified environmental technology company whose products aim to enable a **cleaner, safer planet** and reduce environmental impact[21](index=21&type=chunk) - The company is North America's **only vertically integrated producer of activated carbon products**, providing reliable domestic supply and innovative offerings[21](index=21&type=chunk) - The company leverages its expertise to develop breakthrough solutions for removing harmful chemicals and pollutants from **water, land, and air**[21](index=21&type=chunk) [Caution on Forward-Looking Statements](index=3&type=section&id=Caution%20on%20Forward-Looking%20Statements) [Forward-Looking Statements Disclaimer](index=3&type=section&id=Forward-Looking%20Statements%20Disclaimer) This press release contains forward-looking statements as defined by Section 21E of the Securities Exchange Act of 1934, concerning the company's future activities, events, or developments, which are subject to various risks and uncertainties that could cause actual results to differ materially from expectations, and investors should consult the company's SEC filings for further risk discussions - This press release contains forward-looking statements intended to identify future activities, events, or developments[22](index=22&type=chunk) - Forward-looking statements involve various risks and uncertainties, including but not limited to regulatory changes, economic conditions, market demand, competition, technological difficulties, financing capabilities, and inflation impacts, which could cause actual results to differ materially from expectations[22](index=22&type=chunk)[23](index=23&type=chunk) - Investors should consult the company's SEC filings, particularly risk factor disclosures, for additional discussion of risks and uncertainties related to the company's business and securities ownership[23](index=23&type=chunk) [Financial Statements](index=5&type=section&id=Financial%20Statements) [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2024, the company's total assets were $229.8 million, total liabilities were $54.6 million, and total shareholders' equity was $175.2 million, with both total assets and total liabilities slightly decreasing compared to December 31, 2023 Condensed Consolidated Balance Sheets | Metric (Thousand USD) | March 31, 2024 | December 31, 2023 | | :--- | :---: | :---: | | **ASSETS** | | | | Cash | 35,227 | 45,361 | | Total current assets | 72,038 | 86,461 | | Property, plant and equipment, net | 103,645 | 94,649 | | Total assets | 229,798 | 235,502 | | **LIABILITIES AND STOCKHOLDERS’ EQUITY** | | | | Total current liabilities | 21,967 | 23,048 | | Long-term debt | 18,127 | 18,274 | | Total liabilities | 54,634 | 57,102 | | Total stockholders’ equity | 175,164 | 178,400 | [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) In Q1 2024, the company achieved $21.7 million in revenue, a 4% increase year-over-year, with cost control and improved gross margins leading to significant reductions in both operating loss and net loss, and diluted loss per share decreasing to $0.09 Condensed Consolidated Statements of Operations | Metric (Thousand USD) | Q1 2024 | Q1 2023 | | :--- | :---: | :---: | | Revenue | 21,740 | 20,805 | | Cost of revenue (exclusive of depreciation and amortization) | 13,713 | 17,175 | | Selling, general and administrative expenses | 7,666 | 11,283 | | Research and development expenses | 1,625 | 732 | | Operating loss | (2,980) | (7,827) | | Net loss | (3,419) | (7,508) | | Basic loss per share | (0.09) | (0.32) | | Diluted loss per share | (0.09) | (0.32) | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) In Q1 2024, operating activities generated $0.526 million in cash, investing activities had a net outflow of $9.6 million, and financing activities had a net outflow of $1.0 million, with total cash and restricted cash at period-end being $44.0 million, a $10.1 million decrease from the beginning of the period Condensed Consolidated Statements of Cash Flows | Metric (Thousand USD) | Q1 2024 | Q1 2023 | | :--- | :---: | :---: | | Net cash provided by (used in) operating activities | 526 | (17,705) | | Net cash used in investing activities | (9,647) | (2,897) | | Net cash provided by (used in) financing activities | (1,013) | 23,260 | | Cash and restricted cash (end of period) | 44,019 | 79,090 | - Operating cash flow turned positive, reflecting improved operational efficiency[31](index=31&type=chunk) - Increased cash outflow from investing activities was primarily for the acquisition of property, plant, and intangible assets, reflecting strategic capital expenditures in the Red River and Corbin facilities[31](index=31&type=chunk) [Non-GAAP Financial Measures Reconciliation](index=8&type=section&id=Non-GAAP%20Financial%20Measures%20Reconciliation) [EBITDA and Adjusted EBITDA Reconciliation](index=8&type=section&id=EBITDA%20and%20Adjusted%20EBITDA%20Reconciliation) The company provides EBITDA and Adjusted EBITDA as non-GAAP financial measures to supplement GAAP net loss, believing these metrics better reflect core operational performance, with Q1 2024 Adjusted EBITDA loss significantly narrowing to $1.1 million - EBITDA is defined as earnings before interest, taxes, depreciation, and amortization, with Adjusted EBITDA further adjusting for non-cash items like equity in earnings of unconsolidated affiliates and gain on sale of assets[32](index=32&type=chunk) - The company believes non-GAAP measures assist management in evaluating operational performance and facilitate comparisons of operating results across periods by excluding certain expenses, gains, and losses that may vary widely[33](index=33&type=chunk) EBITDA and Adjusted EBITDA Reconciliation | Metric (Thousand USD) | Q1 2024 | Q1 2023 | | :--- | :---: | :---: | | Net loss | (3,419) | (7,508) | | Depreciation, amortization, depletion and accretion | 1,716 | 2,137 | | Interest expense, net | 432 | 289 | | EBITDA loss | (1,144) | (4,988) | | Adjusted EBITDA loss | (1,144) | (7,683) |

Arq, Inc. (NASDAQ:ARQ) Q4 2023 Results Conference Call March 13, 2024 9:00 AM ET Company Participants Ryan Coleman - Investor Relations Bob Rasmus - Chief Executive Officer and President Kim Hansen - VP of Finance Conference Call Participants Gerry Sweeney - Roth Capital Operator Greetings. Welcome to Arq's Fourth Quarter and Full Year 2023 Earnings Call. At this time all participants will be in listen only mode. A question-and-answer session will follow the formal presentation [Operator Instructions]. Plea ...

[Executive Summary](index=1&type=section&id=Executive%20Summary) [Financial and Business Highlights](index=1&type=section&id=Financial%20and%20Business%20Highlights) Arq achieved its first positive net income since Q4 2021, with strong Q4 2023 financial performance and strategic GAC project advancement Q4 2023 Key Financial Metrics | Metric | Q4 2023 | Change vs. Q4 2022 | Key Drivers | | :--- | :--- | :--- | :--- | | **Revenue** | $28.1 million | +20% YoY | Higher selling prices, positive product mix, take-or-pay revenue | | **Gross Margin** | 50% | Nearly Doubled | Higher revenue, focus on profitability, cost management | | **Net Income** | $3.3 million | Positive (from loss) | First positive net income since Q4 2021 | | **Adjusted EBITDA** | $7.2 million | Positive (from loss) | Second consecutive quarter of positive Adjusted EBITDA | - **Corporate Rebranding**: Completed rebrand and began trading under the new Nasdaq ticker "**ARQ**" to reflect its evolution into an environmental technology company - **PAC Portfolio Optimization**: Prioritized profitability over volume, leading to **positive cash flow** from the PAC business in Q4 2023 - **GAC Growth Projects**: The Corbin facility optimization is on track for **Q2 2024**, and the Red River GAC facility expansion is targeted for commissioning in **Q4 2024** - **European Market Expansion**: Entered a framework for a definitive supply agreement with LSR Materials to serve the European water purification market, targeting PFAS [CEO Commentary](index=1&type=section&id=CEO%20Commentary) CEO highlighted strong Q4 2023 PAC momentum, confirmed GAC projects on schedule, and reaffirmed attractive Red River economics despite cost increases - The company's primary focus is on executing high-return strategic growth projects in the robust GAC market, with commissioning of the Red River facility expected in **Q4 2024**[4](index=4&type=chunk)[6](index=6&type=chunk) - The cost to complete the Red River Phase 1 expansion has increased due to higher construction and equipment costs, but the project's investment economics remain **attractive**[6](index=6&type=chunk) - The expansion will be funded through a combination of cash on hand, cash generation, cost reductions, potential customer prepayments, and debt refinancing, with **no plans to issue equity**[6](index=6&type=chunk) [Financial Performance](index=2&type=section&id=Financial%20Performance) [Fourth Quarter 2023 Results](index=2&type=section&id=Fourth%20Quarter%202023%20Results) Arq reported a significant Q4 2023 turnaround, with strong revenue growth and gross margin expansion, leading to positive operating and net income Q4 2023 vs. Q4 2022 Performance | Metric | Q4 2023 | Q4 2022 | Change | | :--- | :--- | :--- | :--- | | **Revenues** | $28.1 million | $23.4 million | +20.1% | | **Gross Margin** | 49.8% | 25.4% | +24.4 pts | | **Operating Income (Loss)** | $3.1 million | ($3.4 million) | Improved by $6.5 million | | **Net Income (Loss)** | $3.3 million | ($3.2 million) | Improved by $6.5 million | | **Diluted EPS** | $0.10 | ($0.17) | Improved by $0.27 | | **Adjusted EBITDA** | $7.2 million | ($1.2 million) | Improved by $8.4 million | - The increase in other operating expenses to **$10.9 million** was mainly driven by higher payroll and G&A expenses associated with the acquisition of Arq Limited subsidiaries[9](index=9&type=chunk) [Full Year 2023 Results](index=2&type=section&id=Full%20Year%202023%20Results) Full year 2023 revenues decreased **3.7%** to **$99.2 million**, and despite improved gross margin, higher operating expenses led to an increased net loss Full Year 2023 vs. Full Year 2022 Performance | Metric | FY 2023 | FY 2022 | Change | | :--- | :--- | :--- | :--- | | **Revenues** | $99.2 million | $103.0 million | -3.7% | | **Gross Margin** | 32.1% | 21.9% | +10.2 pts | | **Operating Loss** | ($13.3 million) | ($12.1 million) | Increased Loss | | **Net Loss** | ($12.2 million) | ($8.9 million) | Increased Loss | | **Diluted EPS** | ($0.42) | ($0.48) | Improved Loss per Share | | **Adjusted EBITDA (Loss)** | ($2.6 million) | $1.3 million | Declined | - The decline in Adjusted EBITDA was mainly driven by higher operating costs, which included **$4.9 million** in one-time transaction costs for the legacy Arq acquisition and **$1.7 million** in severance expenses[28](index=28&type=chunk) [Capital Expenditures and Strategic Projects](index=2&type=section&id=Capital%20Expenditures%20and%20Strategic%20Projects) [Capex & Balance Sheet](index=2&type=section&id=Capex%20%26%20Balance%20Sheet) Capital expenditures more than tripled to **$27.5 million** in 2023, reducing cash and increasing total debt due to strategic growth projects Key Financial Position Changes (as of Dec 31, 2023) | Metric | 2023 | 2022 | Change Driver | | :--- | :--- | :--- | :--- | | **Capital Expenditures** | $27.5 million | $8.9 million | Ongoing strategic growth projects (Red River, Corbin) | | **Cash & Restricted Cash** | $54.2 million | $76.4 million | Capital expenditures for facility expansions | | **Total Debt** | $20.9 million | $4.6 million | $10.0 million term loan for legacy Arq acquisition | [Red River Update & 2024 Capex Forecast](index=2&type=section&id=Red%20River%20Update%20%26%202024%20Capex%20Forecast) Arq forecasts **$55-60 million** in 2024 capex, primarily for the Red River GAC expansion, which saw a **36%** budget increase but remains on track for Q4 2024 commissioning - The 2024 capex forecast is **$55-60 million**, with **$45-50 million** for the Red River Phase 1 project[17](index=17&type=chunk) - The Red River capex forecast increased by **~36%** due to: - **~45%** from construction cost inflation and an accelerated workweek - **~45%** from increased equipment costs and design changes for greater efficiency - **~10%** from other items like engineering fees[18](index=18&type=chunk) - The project is expected to be funded via cash, cash generation, cost initiatives, potential customer prepayments, and debt refinancing, without issuing new equity[20](index=20&type=chunk) [Financial Statements](index=5&type=section&id=Financial%20Statements) [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) As of December 31, 2023, Arq's total assets increased to **$235.5 million**, driven by property, plant, and equipment, with liabilities growing to **$57.1 million** Selected Balance Sheet Data (in thousands) | Account | Dec 31, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | **Total current assets** | $86,461 | $105,662 | | Cash | $45,361 | $66,432 | | **Property, plant and equipment, net** | $94,649 | $34,855 | | **Total Assets** | **$235,502** | **$181,164** | | **Total current liabilities** | $23,048 | $23,884 | | **Long-term debt, net** | $18,274 | $3,450 | | **Total Liabilities** | **$57,102** | **$41,185** | | **Total stockholders' equity** | **$178,400** | **$139,979** | [Consolidated Statements of Operations](index=6&type=section&id=Consolidated%20Statements%20of%20Operations) Q4 2023 saw a net income of **$3.3 million**, a significant improvement, though the full year 2023 net loss widened to **$12.2 million** due to lower revenue and higher operating expenses Statement of Operations Highlights (in thousands) | Metric | Q4 2023 | Q4 2022 | FY 2023 | FY 2022 | | :--- | :--- | :--- | :--- | :--- | | **Total revenue** | $28,104 | $23,409 | $99,183 | $102,987 | | **Gross Profit** | $13,999 | $5,936 | $31,860 | $22,522 | | **Operating income (loss)** | $3,104 | ($3,374) | ($13,335) | ($12,068) | | **Net income (loss)** | $3,290 | ($3,167) | ($12,249) | ($8,917) | | **Diluted EPS** | $0.10 | ($0.17) | ($0.42) | ($0.48) | [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Full year 2023 saw **$16.7 million** net cash used in operations and **$28.5 million** in investing, partially offset by **$22.9 million** from financing, decreasing cash by **$22.3 million** Cash Flow Summary for Year Ended Dec 31 (in thousands) | Activity | 2023 | 2022 | | :--- | :--- | :--- | | **Net cash used in operating activities** | ($16,653) | ($6,061) | | **Net cash used in investing activities** | ($28,535) | ($4,608) | | **Net cash provided by (used in) financing activities** | $22,909 | ($1,679) | | **Decrease in Cash and Restricted Cash** | **($22,279)** | **($12,348)** | [Non-GAAP Reconciliation](index=9&type=section&id=Non-GAAP%20Reconciliation) The company reconciled Q4 2023 Net Income of **$3.3 million** to **$7.2 million** Adjusted EBITDA, and FY2023 Net Loss of **$12.2 million** to **$2.6 million** Adjusted EBITDA loss Reconciliation of Net (Loss) Income to Adjusted EBITDA (in thousands) | Metric | Q4 2023 | Q4 2022 | FY 2023 | FY 2022 | | :--- | :--- | :--- | :--- | :--- | | **Net (loss) income** | $3,290 | ($3,167) | ($12,249) | ($8,917) | | Depreciation, amortization, etc. | $3,267 | $1,651 | $10,543 | $6,416 | | Interest expense (income), net | $346 | ($66) | $1,168 | $97 | | Income tax expense | $186 | $209 | $153 | $209 | | **EBITDA (EBITDA Loss)** | $7,216 | ($1,246) | $123 | ($1,687) | | Other Adjustments | ($37) | ($1) | ($2,732) | $2,961 | | **Adjusted EBITDA (EBITDA loss)** | **$7,179** | **($1,245)** | **($2,609)** | **$1,274** |