OPAL Fuels (US:OPAL)2025-05-12 22:14Part I. Financial Information Item 1. Financial Statements (Unaudited) The company's Q1 2025 revenue grew 31% to $85.4 million, but an operating loss was recorded due to higher costs Condensed Consolidated Statements of Operations (Q1 2025 vs Q1 2024) | Financial Metric | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Total Revenues | $85,407 | $64,952 | +31.5% | | RNG Fuel | $27,599 | $17,727 | +55.7% | | Fuel Station Services | $50,678 | $37,142 | +36.4% | | Renewable Power | $7,130 | $10,083 | -29.3% | | Operating (Loss) Income | ($1,942) | $3,570 | -154.4% | | Net Income | $1,284 | $677 | +89.6% | | Net Loss Attributable to Class A Stockholders | ($235) | ($316) | +25.6% | | Basic and Diluted EPS | ($0.01) | ($0.01) | 0.0% | Condensed Consolidated Balance Sheets | Balance Sheet Item | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :--- | :--- | :--- | | Total Current Assets | $116,387 | $117,188 | | Cash and cash equivalents | $40,082 | $24,310 | | Total Assets | $884,923 | $881,077 | | Total Current Liabilities | $101,602 | $103,596 | | Total Liabilities | $420,478 | $416,045 | | Total Stockholders' Equity (Deficit) | $57,726 | ($147,831) | Condensed Consolidated Statements of Cash Flows | Cash Flow Item | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | | :--- | :--- | :--- | | Net cash provided by operating activities | $29,679 | $13,718 | | Net cash used in investing activities | ($9,277) | ($21,626) | | Net cash used in financing activities | ($4,732) | ($6,638) | | Net increase (decrease) in cash | $15,670 | ($14,546) | Notes To Condensed Consolidated Financial Statements Notes detail accounting policies, the sale of tax credits, loan amendments, and significant customer concentration - The company is organized into three operating segments: RNG Fuel, Fuel Station Services, and Renewable Power36 - In Q1 2025, the company sold transferable Investment Tax Credits (ITCs) for net proceeds of $8.0 million, recorded as a credit to income tax expense6062 - On March 3, 2025, the company amended its OPAL Term Loan and Revolving Loan agreement, extending the availability period for delayed draw term loans through March 5, 20266769 - For Q1 2025, one customer accounted for 43% of total revenue, and at March 31, 2025, three customers accounted for 56% of accounts receivable57126 - Subsequent to the quarter end, the company entered a joint venture for a new RNG facility, holding a 70% ownership stake163 - The company is involved in a material legal proceeding regarding the construction of two RNG facilities, with disputed change orders of approximately $14 million per project151152 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Revenue growth was driven by new RNG facilities, while operating loss stemmed from a 675% surge in project costs Revenue by Segment (Q1 2025 vs Q1 2024) | Segment | Q1 2025 Revenue (in thousands) | Q1 2024 Revenue (in thousands) | Change (%) | | :--- | :--- | :--- | :--- | | RNG Fuel | $27,599 | $17,727 | +56% | | Fuel Station Services | $50,678 | $37,142 | +36% | | Renewable Power | $7,130 | $10,083 | -29% | | Total Revenues | $85,407 | $64,952 | +31% | - The 56% increase in RNG Fuel revenue was primarily driven by the new Prince William and Polk RNG facilities210 - The 29% decrease in Renewable Power revenue was mainly due to the loss of revenues from the sale of ISCC Carbon Credits212 - Project development and startup costs surged by $5.3 million (675%) YoY, primarily due to costs for new and developing facilities216 - As of March 31, 2025, the company's liquidity was $239.9 million, comprising credit facility capacity and cash227 - The company anticipates spending approximately $182.0 million in capital expenditures over the next 12 months252 Item 3. Quantitative and Qualitative Disclosures About Market Risk As a "smaller reporting company," the company is exempt from providing market risk disclosures - As a "smaller reporting company," OPAL Fuels Inc. is not required to provide quantitative and qualitative disclosures about market risk256 Item 4. Controls and Procedures Management concluded that disclosure controls and procedures were effective with no material changes to internal controls - Management concluded that the company's disclosure controls and procedures were effective as of March 31, 2025257 - No material changes in internal control over financial reporting occurred during the quarter258 Part II. Other Information Item 1. Legal Proceedings The company is in a significant legal dispute with a contractor over its Central Valley Project, now proceeding to arbitration - The company is in a legal dispute with contractor CEI Builders over the Central Valley RNG project, involving disputed change order requests of approximately $14 million per project262263 - The company terminated its contracts for default and has initiated arbitration proceedings, with a hearing scheduled for May 2026264265266 - A separate lawsuit was filed in March 2024 against a former development partner related to the Central Valley projects272 Item 1A. Risk Factors No material changes to risk factors were reported, though macroeconomic conditions remain a key concern - The company states there have been no material changes from the risk factors previously disclosed in its 2024 Annual Report on Form 10-K273 - A specific risk highlighted is the potential adverse impact of macroeconomic conditions such as inflation and rising interest rates274 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds The company reported no unregistered sales of equity securities or use of proceeds - The company reported no unregistered sales of equity securities or use of proceeds during the period278 Item 3. Defaults Upon Senior Securities The company reported no defaults upon senior securities during the period - The company reported no defaults upon senior securities during the period279 Item 4. Mine Safety Disclosures Mine safety disclosures are not applicable to the company's operations - Mine safety disclosures are not applicable to the company's operations281 Item 5. Other Information The company entered a new RNG joint venture and reported no new executive trading plans - On May 9, 2025, the company formed a new joint venture to develop and operate an RNG facility, holding a 70% ownership stake282 - No directors or executive officers adopted or terminated Rule 10b5-1 trading plans during the quarter282 Item 6. Exhibits This section lists all exhibits filed with the Form 10-Q, including corporate and legal documents