Arq(US:ARQ)2025-05-07 10:32Financial Performance - For the three months ended March 31, 2025, revenue increased by 25% to $27.247 million compared to $21.740 million in the same period of 2024, driven by higher volumes and pricing [119]. - Net income for the three months ended March 31, 2025, was $0.2 million, a significant improvement from a net loss of $3.4 million in the same period of 2024 [117]. - Earnings from equity method investments for the three months ended March 31, 2025, were $0.155 million, compared to no earnings in the same period of 2024 [131]. - For the three months ended March 31, 2025, the company reported a net income of $203,000, a significant improvement from a net loss of $3.4 million in the same period of 2024 [139]. - Adjusted EBITDA for the same period was a loss of $4.1 million, compared to a loss of $362,000 in the prior year, indicating a worsening operational performance despite the net income improvement [139]. Operating Expenses - Operating expenses decreased by 16% to $9.253 million for the three months ended March 31, 2025, compared to $11.007 million in the same period of 2024 [123]. - Research and development expenses decreased by 46% to $0.874 million for the three months ended March 31, 2025, compared to $1.625 million in the same period of 2024 [123]. - Interest expense decreased by 8% to $0.724 million for the three months ended March 31, 2025, compared to $0.791 million in the same period of 2024 [133]. Cash Flow and Liquidity - Cash and restricted cash decreased from $22.2 million as of December 31, 2024, to $14.8 million as of March 31, 2025, reflecting a challenging liquidity position [140]. - Cash flow used in operating activities was $5.8 million for the three months ended March 31, 2025, a decrease of $6.3 million from cash provided by operating activities of $0.5 million in the same period of 2024 [141]. - Cash flows used in investing activities decreased by $6.0 million, primarily due to a reduction in property, plant, and equipment additions related to the Red River Plant expansion [142]. - Cash flows provided by financing activities increased by $3.0 million, mainly due to net borrowings on the Revolving Credit Facility of $2.4 million [143]. - As of March 31, 2025, the company had cash on hand of $6.3 million and availability of $13.8 million under a $30.0 million secured revolving credit facility [146]. Future Outlook - The U.S. EPA's new PFAS National Primary Drinking Water Regulation is expected to drive a material increase in GAC demand in the water purification market over the next five years [116]. - The company anticipates that product price increases will help offset fluctuations in volumes due to competing power generation sources [122]. - The company expects to begin using Arq Powder as a feedstock for high-quality GAC products in the second half of 2025, potentially accessing new markets [113]. - The company expects to complete commissioning of the Red River Project by the end of Q2 or early Q3 2025, which is crucial for the production of new GAC products [147]. - The company plans to resume normal operations at the Corbin Facility after completing the commissioning of the Red River Project [149]. - The company anticipates that its ability to generate sufficient cash flow will depend on executing contracts and increasing market share for APT consumables [144].