Arq, Inc. · NASDAQ:ARQ
Arq — Advanced Emissions Solutions — Q3 2023 Earnings Presentation
18 slides from Arq's earnings presentation, Nov 9, 2023
Slide 1: Q3 2023 Earnings Call
Advanced Emissions Solutions, Inc. Q3 2023 Earnings Call November 9, 2023 Nasdaq: ADES
Slide 2: Disclaimer
Disclaimer This presentation includes forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, which provides a “safe harbor” for such statements in certain circumstances. When used in this presentation, the words “can,” “will,” “intends,” “expects,” “beli
Slide 3: Third Quarter Highlights
Third Quarter Highlights Key Takeaways Strategic Projects Update Business Plan Initiatives ➢ Positive EBITDA in Q3 ➢ Continuing to review all aspects of strategic ➢ Ongoing focus on customer profitability plan with focus on optimizing and expediting ➢ Consumables revenue growth of +5% ➢ Continued fo
Slide 4: Customer Sales Price and Margin Improvements
Customer Sales Price and Margin Improvements YoY Average Sales Price (ASP) Performance 18% Core focus on profitability over volume 16% ➢ Average Selling Price (“ASP”) consistently improving 14% each year 12% ➢ In 2022, ~24% of total volume sold was at negative 10% margin 8% ➢ 2023 has seen material
Slide 5: Strategic Projects Construction Update: Red River & Corbin
Strategic Projects Construction Update: Red River & Corbin Red River Corbin • Air permit approved • Water clarification construction 70% completed • Engineering 70% completed • Process controls procurement and engineering • Procurement 85% completed completed Completed Work • Construction bids recei
Slide 6: Strategic Projects – Existing Expansion and Beyond
Strategic Projects – Existing Expansion and Beyond ➢ Five individual phases of development, each independent of the other and can be executed at the Company’s sole discretion ➢ No commitment other than Phase 1 which has commenced ➢ Each phase will be individually evaluated based on current and poten
Slide 7: Granular Activated Carbon – Market Update
Granular Activated Carbon – Market Update Strong macro tailwinds in our favor EPA expected to release its National Primary Drinking Water Regulation by end 2023 with a material focus on PFAS or “Forever Chemicals” Legislation is anticipated to: • Establish new materially higher standards for drinkin
Slide 8: Granular Activated Carbon – Our Opportunity
Granular Activated Carbon – Our Opportunity ADES’ unique products, process and supply chain are key differentiators ADES is uniquely positioned to benefit from this trend and This differential has led to very encouraging market engagement with will be the only GAC producer: strong interest from mult
Slide 9: Granular Activated Carbon – Sales Funnel
Granular Activated Carbon – Sales Funnel Initially targeting 100 Engaged with ~50% and Sales outreach process potential customers for identified more than 88 ongoing for remaining initial market engagement/ pre- million lbs. of annual demand potential customers qualification Process Targeted Timelin
Slide 10: Financial Highlights
Financial Highlights Consumables Revenue Net Income (Loss) Adjusted EBITDA(1) Cash & Equivalents $2.5 $79.6 $0.9 $71.1 ($2.2) ($2.4) $10.0 ($5.8) ($0.5) $8.8 $29.8 $28.4 $66.4 $52.5 ($15.5) ($9.8) September 30, December 31, 2022 Q3 Q3 YTD YTD Q3 Q3 YTD YTD Q3 Q3 YTD YTD 2023 2023 2022 2023 2022 2023
Slide 11: 2023 Outlook & Milestones
2023 Outlook & Milestones Optimize PAC portfolio and eliminate unfavorable margin contracts On going Execute strategic projects to enable granular activated carbon production In process Secure lead granular activated carbon customers and build out sales channels On going Ensure successful integratio
Slide 12: Appendix
ADES Appendix
Slide 13: Appendix A: 10-Q Balance Sheet
Appendix A: 10-Q Balance Sheet(1) 1) See complete, unaudited Condensed Consolidated Financial Statements and Notes related thereto within the Quarterly Report on Form 10-Q for the period ended September 30, 2023. 13
Slide 14: Appendix B: 10-Q Income Statement
Appendix B: 10-Q Income Statement(1) (1) See complete, unaudited Condensed Consolidated Financial Statements and Notes related thereto within the Quarterly Report on Form 10-Q for the period ended September 30, 2023. 14
Slide 15: Appendix C: 10-Q Cash Flow
Appendix C: 10-Q Cash Flow(1) (1) See complete, unaudited Condensed Consolidated Financial Statements and Notes related thereto within the Quarterly Report on Form 10-Q for the period ended September 30, 2023. 15
Slide 16: Appendix C: 10-Q Cash Flow (continued)
Appendix C: 10-Q Cash Flow (continued)(1) (1) See complete, unaudited Condensed Consolidated Financial Statements and Notes related thereto within the Quarterly Report on Form 10-Q for the period ended September 30, 2023. 16
Slide 17: Appendix D: Non-GAAP Financial Measure & Adjusted EBITDA Reconciliation to Net (Loss) Income
Appendix D: Non-GAAP Financial Measure & Adjusted EBITDA Reconciliation to Net (Loss) Income Note on Non-GAAP Financial Measures To supplement the Company's financial information presented in accordance with U.S. generally accepted accounting principles, or GAAP, this investor presentation includes
Slide 18: Appendix E: Adjusted EBITDA Reconciliation to Net (Loss) Income
Appendix E: Adjusted EBITDA Reconciliation to Net (Loss) Income (1) Included in Net loss for the three and nine months ended September 30, 2023 is zero and $4.9 million, respectively, of transaction and integration costs incurred related to the Arq Acquisition. Included in Net Loss for the three and
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