Advanced Emissions Solutions(ADES) - 2025 Q2 - Quarterly Report

PART I. - FINANCIAL INFORMATION This section presents the company's unaudited financial statements and management's analysis of financial condition and operations Item 1. Financial Statements (unaudited) This section presents the unaudited condensed consolidated financial statements, covering balance sheets, operations, equity, cash flows, and detailed notes Condensed Consolidated Balance Sheets This section presents the company's financial position, detailing assets, liabilities, and stockholders' equity at specific dates | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :----------------------------- | :----------------------------- | :------------------------------- | | Total Assets | $284,541 | $284,368 | | Cash | $6,957 | $13,516 | | Total Current Assets | $50,664 | $52,356 | | Total Liabilities | $67,773 | $67,092 | | Total Stockholders' Equity | $216,768 | $217,276 | Condensed Consolidated Statements of Operations This section outlines the company's financial performance over specific periods, detailing revenue, expenses, and net loss Three Months Ended June 30 | Metric | 2025 (in thousands) | 2024 (in thousands) | Change ($) | Change (%) | | :----------------------------------- | :------------------ | :------------------ | :--------- | :--------- | | Revenue | $28,584 | $25,405 | $3,179 | 13% | | Net loss | $(2,133) | $(1,968) | $(165) | 8% | | Basic Loss per common share | $(0.05) | $(0.06) | $0.01 | -17% | Six Months Ended June 30 | Metric | 2025 (in thousands) | 2024 (in thousands) | Change ($) | Change (%) | | :----------------------------------- | :------------------ | :------------------ | :--------- | :--------- | | Revenue | $55,831 | $47,145 | $8,686 | 18% | | Net loss | $(1,930) | $(5,387) | $3,457 | -64% | | Basic Loss per common share | $(0.05) | $(0.16) | $0.11 | -69% | Condensed Consolidated Statements of Changes in Stockholders' Equity This section details changes in stockholders' equity over specific periods, reflecting net loss and stock-based compensation Total Stockholders' Equity | Date | Amount (in thousands) | | :------------------- | :-------------------- | | Balances, January 1, 2025 | $217,276 | | Balances, June 30, 2025 | $216,768 | | Balances, January 1, 2024 | $178,400 | | Balances, June 30, 2024 | $189,600 | - Net loss for the three months ended June 30, 2025, was $(2,133) thousand, impacting stockholders' equity[17] - Stock-based compensation for the three months ended June 30, 2025, was $734 thousand, increasing stockholders' equity[17] Condensed Consolidated Statements of Cash Flows This section presents the company's cash inflows and outflows from operating, investing, and financing activities Six Months Ended June 30 | Cash Flow Activity | 2025 (in thousands) | 2024 (in thousands) | Change ($) | | :----------------------------------- | :------------------ | :------------------ | :--------- | | Operating activities | $(5,276) | $(2,424) | $(2,852) | | Investing activities | $(5,530) | $(28,851) | $23,321 | | Financing activities | $3,995 | $14,319 | $(10,324) | | Net change in cash and restricted cash | $(6,811) | $(16,956) | $10,145 | - Cash and Restricted Cash at the end of the period decreased to $15,424 thousand as of June 30, 2025, from $37,197 thousand as of June 30, 2024[20] Notes to Condensed Consolidated Financial Statements These notes provide detailed disclosures on accounting policies, financial components, debt, leases, commitments, equity, stock-based compensation, income taxes, and segment reporting Note 1 - Organization and Basis of Presentation This note describes the company's business, products, revenue seasonality, and the impact of new accounting standards - Arq, Inc. is an environmental technology company focused on selling consumable air, water, and soil treatment solutions primarily based on activated carbon (AC)[22][116] - The company's primary products include powdered activated carbon (PAC) and granular activated carbon (GAC)[23][117] - Revenue is generally higher in the first and third fiscal quarters due to weather-dependent power generation and increased demand for water treatment products during warmer/rainy months[35][37] - The company is currently evaluating the impact of new accounting standards: ASU 2023-09 (Income Taxes), ASU 2024-03 (Income Statement Expenses), and ASU 2025-05 (Credit Losses for Accounts Receivable and Contract Assets)[39][40][41] Note 2 - Inventories, net This note provides a breakdown of the company's inventory balances, distinguishing between product and raw material inventories Inventories, net | Inventory Type | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :------------------- | :----------------------------- | :------------------------------- | | Product inventory, net | $11,813 | $11,166 | | Raw material inventory | $8,965 | $8,148 | | Total inventories, net | $20,778 | $19,314 | Note 3 - Revenue This note details the company's revenue recognition policies and provides a breakdown of receivables Receivables, net | Receivable Type | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :-------------------- | :----------------------------- | :------------------------------- | | Trade receivables, net | $15,547 | $13,265 | | Other | — | $1,611 | | Receivables, net | $15,547 | $14,876 | - All material performance obligations related to revenue recognized were satisfied at a point in time[43] - The Company did not have material unbilled receivables (contract assets) or contract liabilities outstanding as of June 30, 2025, and December 31, 2024[45][48] Note 4 - Debt Obligations This note outlines the company's various debt instruments, including revolving credit facilities and long-term loans Debt Obligations | Debt Type | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :------------------------------------ | :----------------------------- | :------------------------------- | | Revolving credit agreement | $18,528 | $13,828 | | CTB Loan due January 2036 | $8,697 | $8,983 | | Finance lease obligations | $826 | $1,269 | | Other | $897 | $1,004 | | Total long-term debt obligations | $8,741 | $9,370 | - The Company entered into a five-year $30.0 million secured revolving credit facility on December 27, 2024, with $18.5 million net borrowings as of June 30, 2025[50][54] - The CTB Loan, assumed on February 1, 2023, has a principal amount of $10.0 million, matures on January 27, 2036, and bears interest at 6.0% per annum through January 2026[55][56] Note 5 - Leases