Advanced Emissions Solutions(US:ADES)2020-11-09 22:00Revenue Performance - For the three months ended September 30, 2020, total revenues increased by 2% to $19.471 million compared to $19.133 million for the same period in 2019[116]. - Consumables revenue for the same period rose by 7% to $15.844 million, driven by higher volumes, while license royalties decreased by 17% to $3.627 million[116]. - Total revenues for the nine months ended September 30, 2020, were $43,217,000, down 20% from $54,039,000 in the same period of 2019[131]. - Consumables revenue decreased by 19% to $33,231,000 for the nine months ended September 30, 2020, primarily due to lower volume and less favorable price and product mix[131]. - For the three months ended September 30, 2020, total reported revenues were $19,471,000, a slight increase from $19,133,000 in the same period of 2019[151]. Income and Expenses - The company recorded a net income of $5.0 million for the three months ended September 30, 2020, compared to a net income of $3.9 million for the same period in 2019[115]. - Operating expenses for the three months ended September 30, 2020, decreased by 24% to $7,283,000 from $9,585,000 in the same period of 2019[120]. - Payroll and benefits expenses decreased by 14% to $2,285,000 for the three months ended September 30, 2020, primarily due to a reduction in headcount[121]. - Legal and professional fees decreased by 55% to $1,321,000 for the three months ended September 30, 2020, mainly due to cost reductions in consulting and outsourced IT[122]. - Total other income for the three months ended September 30, 2020, was $8,654,000, a decrease of 33% from $12,909,000 in the same period of 2019[126]. - Total other income decreased by 55% to $23.1 million for the nine months ended September 30, 2020, compared to $51.6 million in the same period of 2019[140]. - Income tax expense significantly decreased to $1.3 million for the nine months ended September 30, 2020, compared to $14.9 million in the same period of 2019, driven by a pretax loss of $19.4 million[144]. Impairment and Asset Management - The impairment charge for long-lived assets was $26.1 million as of June 30, 2020, primarily due to a significant decline in revenues from the PGI segment[112]. - Impairment of long-lived assets for the nine months ended September 30, 2020, was $26,103,000, with no comparable expense in 2019[133]. - The company incurred an impairment charge of $23,232,000 in the PGI segment during the nine months ended September 30, 2020[163]. Operational Changes and Agreements - The company entered into a 15-year supply agreement with Cabot Norit Americas, expected to provide material incremental volume and lower operating costs[108]. - The acquisition of Marshall Mine was completed for a nominal purchase price, with associated reclamation costs estimated at approximately $19.7 million[110]. - The company has deferred payroll tax payments totaling $0.3 million under the CARES Act, with repayment scheduled for 2021 and 2022[114]. - The evolving impact and duration of the COVID-19 pandemic may affect the company's business operations and financial performance[181]. - The company expects future operating cost efficiencies and positive impacts on gross margins from operations tied to its Supply Agreement[181]. Segment Performance - The operating income for the Refined Coal segment was $12,817,000 for the three months ended September 30, 2020, down from $18,158,000 in 2019, reflecting a decrease of approximately 29.5%[155]. - The PGI segment reported an operating loss of $1,270,000 for the three months ended September 30, 2020, compared to a loss of $977,000 in the same period of 2019[157]. - For the nine months ended September 30, 2020, equity earnings from Tinuum Group were $20,462,000, down from $50,757,000 in the same period of 2019, indicating a decrease of approximately 59.7%[158]. - The total segment operating income for the nine months ended September 30, 2020 was $870,000, a significant drop from $59,836,000 in the same period of 2019[151]. - PGI Segment operating loss increased to $(33,584,000) for the nine months ended September 30, 2020, compared to $(8,301,000) in 2019, reflecting a significant deterioration in performance[163]. Cash Flow and Financing - Operating cash flow decreased to $34,918,000 for the nine months ended September 30, 2020, compared to $47,598,000 in 2019, a decline of 27.1%[172]. - The company received a PPP Loan of $3.3 million on April 21, 2020, which is unsecured and has a maturity date of April 21, 2022[167]. - As of September 30, 2020, the company had $5.0 million of borrowing availability under its Line of Credit with no outstanding borrowings[171]. - Cash flows from operating activities decreased by $12.7 million for the nine months ended September 30, 2020, compared to the same period in 2019, primarily due to a net income decrease of $47.2 million[173]. - Cash flows used in financing activities decreased by $20.7 million for the nine months ended September 30, 2020, primarily due to a decrease in dividends paid by $8.8 million and principal loan repayments of $6.0 million[175]. Future Outlook - The company anticipates improvements in gross margin starting in 2021 due to a Supply Agreement[132]. - The company expects future cash flows from Tinuum Group to range from $90 million to $110 million through 2021, contingent on maintaining existing contracts and market conditions[166]. - Total capital expenditures for 2020 are anticipated to be lower than in 2019, with an increase expected in 2021 due to planned maintenance[164].