Arq, Inc. · NASDAQ:ARQ
Arq — Advanced Emissions Solutions — Q2 2020 Earnings Presentation
18 slides from Arq's earnings presentation, Aug 11, 2020
Slide 1: Second Quarter 2020 Earnings Results Call
Advanced Emissions Solutions, Inc. Advancing Cleaner Energy Second Quarter 2020 Earnings Results Call August 11, 2020 © 2020 Advanced Emissions Solutions, Inc. All rights reserved.
Slide 2: Safe Harbor
SAFE HARBOR 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. The forward-looking statements include statements or expectations regarding future
Slide 3: Second Quarter Business Summary
SECOND QUARTER BUSINESS SUMMARY Refined Coal Power Generation and Consolidated Results Outlook (“RC”) Industrials ("PGI") & Capital Allocation Q2 distributions of $15.4M down Q2 revenue of $7.1M compared to Net loss of $23.8M (inclusive of Cashflows from RC segment 17% compared to prior year $11.0M
Slide 4: Financial Highlights
FINANCIAL HIGHLIGHTS NET (LOSS)/INCOME EQUITY METHOD EARNINGS REVENUES $43 $35 $23 $8 $24 $21 $16 $16 $11 $8 $(24) $(26) June 30, 2020 June 30, 2019 June 30, 2020 June 30, 2019 June 30, 2020 June 30, 2019 June 30, 2020 June 30, 2019 June 30, 2020 June 30, 2019 June 30, 2020 June 30, 2019 Three Month
Slide 5: Expected Future Refined Coal (RC) Cash Flows
EXPECTED FUTURE REFINED COAL (“RC”) CASH FLOWS EXPECTED FUTURE CASH FLOWS FROM RC BUSINESS (1) Based on 20 invested facilities as of June 30, (in millions) 2020 and includes all net RC cash flows of ADES (1) $90 Expected future net RC cash flows of $100 $80 million to $125 million to ADES in total t
Slide 6: Activated Carbon Growth Opportunities
ACTIVATED CARBON GROWTH OPPORTUNITIES Mercury Removal Provider of choice for North American coal Adjacent Segments treatment market with significant traction in non- Evaluating strategic opportunities in coal Industrial markets bound by regulations a structurally imbalanced market to Potential for i
Slide 7: Diversification from Coal-Fired Power Generation
DIVERSIFICATION FROM COAL-FIRED POWER GENERATION Historical and Forecasted Coal-fired Power Generation Power Generation vs. Non-Power Generation Product Volume 1,800 1,600 Terrawatt-hour Power Generation Market Products 1,400 1,200 1,000 800 600 Non-Power Generation Market Products 2010 2011 2012 20
Slide 8: Capital Allocation
CAPITAL ALLOCATION $28 million balance on the senior term loan, which is subject to customary covenants as well as quarterly principal payments of $6.0 million Company has returned $106.4 million in dividends and share repurchases through the Capital Allocation program (1), since inception Near-term
Slide 9: 2020 Priorities
2020 PRIORITIES INCREASE AND OPTIMIZE REFINED COAL NET CASH FLOWS: • Nurture current & add additional RC investors • Maximize operational performance to produce RC and further develop customer relationships to ensure retention of RC customers • Optimize resources at ADES to support Tinuum and public
Slide 10: Appendix
APPENDIX
Slide 11: Appendix A: Operating Tons: Royalty vs. Non-royalty
911 25 Appendix A: Operating Tons: Royalty Vs. Non-royalty 20 9 16 16 Tonnage (MM) 15 13 16 16 12 14 10 11 11 16 10 8 10 7 7 7 5 7 7 7 7 7 7 4 4 4 - Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Three Month Ended Operating Tons Six Months Ended Opera
Slide 12: Appendix B: 10-Q Balance Sheet
Appendix B: 10-Q Balance Sheet(1) As of (in thousands, except share data) June 30, 2020 December 31, 2019 ASSETS Current assets: Cash and cash equivalents $ 16,733 $ 12,080 Receivables, net 5,319 7,430 Receivables, related parties 3,480 4,246 Inventories, net 16,084 15,460 Prepaid expenses and other
Slide 13: Appendix C: 10-Q Income Statement
Appendix C: 10-Q Income Statement(1) Three Months Ended June 30, Six Months Ended June 30, (in thousands, except per share data) 2020 2019 2020 2019 Revenues: Consumables $ 8,170 $ 11,386 $ 17,387 $ 26,495 License royalties, related party 3,313 4,191 6,359 8,411 Total revenues 11,483 15,577 23,746 3
Slide 14: Appendix D: 10-Q Cash Flow
Appendix D: 10-Q Cash Flow(1) Six Months Ended June 30, (in thousands) 2020 2019 Cash flows from operating activities Net (loss) income $ (25,707) $ 22,516 Adjustments to reconcile net (loss) income to net cash provided by operating activities: Deferred income tax expense 11,647 4,946 Depreciation,
Slide 15: Appendix E: 10-Q Cash Flow (continued)
Appendix E: 10-Q Cash Flow (continued)(1) Six Months Ended June 30, (in thousands) 2020 2019 Cash flows from investing activities Acquisition of business $ — $ (661) Acquisition of property, plant, equipment, and intangible assets, net (4,189) (3,797) Mine development costs (507) (521) Net cash used
Slide 16: Appendix F: Non-GAAP Measure & Consolidated Adjusted EBITDA Reconciliation
Appendix F: Non-GAAP Financial Measure & Consolidated Adjusted EBITDA Reconciliation to Net Note on Non-GAAP Financial Measures Income To supplement the Company's financial information presented in accordance with U.S. generally accepted accounting principles, or GAAP, this investor presentation inc
Slide 17: Appendix F: Consolidated Adjusted EBITDA Reconciliation (continued)
Appendix F: Non-GAAP Financial Measures & Consolidated Adjusted EBITDA Reconciliation to Net Income (continued) Three Months Ended June 30, Six Months Ended June 30, (in thousands) 2020 2019 2020 2019 Net (loss) income $ (23,814) $ 8,114 $ (25,707) $ 22,516 Depreciation, amortization, depletion and
Slide 18: Appendix G: RC Segment Adjusted EBITDA Reconciliation; Appendix H: PGI
Appendix G: RC Segment Adjusted EBITDA Reconciliation to Segment Operating Income Three Months Ended June 30, Six Months Ended June 30, (in thousands) 2020 2019 2020 2019 RC Segment operating income $ 10,777 $ 24,596 $ 21,637 $ 49,979 Depreciation, amortization, depletion and accretion 32 7 160 30 I
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