Arq, Inc. · NASDAQ:ARQ
Arq — Advanced Emissions Solutions — Q2 2019 Earnings Presentation
19 slides from Arq's earnings presentation, Aug 6, 2019
Slide 1: Second Quarter 2019 Results Call
Advanced Emissions Solutions, Inc. Advancing Cleaner Energy Second Quarter 2019 Results Call August 6, 2019 © 2019 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 2019 Highlights
SECOND QUARTER 2019 HIGHLIGHTS RC invested facilities increased to 21 as of June 30, 2019; new facility is royalty bearing to ADES. Based on the 21 invested RC facilities as of June 30, 2019 and cash distributions received during the three months ended June 30, 2019, expected future net RC cash flow
Slide 4: Financials
FINANCIALS
Slide 5: Financial Highlights
FINANCIAL HIGHLIGHTS REVENUES NET INCOME EQUITY METHOD EARNINGS $43 $35 $23 $23 $28 $15 $21 $16 $16 $8 $8 $4 June 30, June 30, June 30, June 30, June 30, June 30, June 30, June 30, 2019 2018 2019 2018 June 30, 2019June 30, 2018 June 30, 2019June 30, 2018 2019 2018 2019 2018 Three Months Ended Six Mo
Slide 6: Refined Coal
REFINED COAL
Slide 7: Refined Coal Facilities Today and Tomorrow
REFINED COAL FACILITIES TODAY AND TOMORROW FULL-TIME OPERATIONS ROADMAP Not Operating and Not Invested 7 RC facilities – installed and waiting for investor or yet to be installed(1) (2) (3) Operating and Invested POTENTIAL 28 RC facilities (~100 MT/year) 21 RC facilities leased/sold (65-75 MT/year)
Slide 8: Future Cash Flows for ADES & 2019 Priorities
Future Cash Flows for ADES & 2019 Priorities
Slide 9: Expected Future RC Cash Flows
EXPECTED FUTURE RC CASH FLOWS EXPECTED FUTURE CASH FLOWS FROM RC BUSINESS (1) Based on 21 invested facilities as of June 30, 2019 (in millions) and includes all net RC cash flows of ADES (1) Results in expected future net RC cash flows of $175 $90 million to $200 million to ADES in total through 202
Slide 10: Growth Opportunities
GROWTH OPPORTUNITIES TODAY TOMORROW Continue to gain market share and margin Pursue higher margin and higher growth Mercury Removal Municipal Water Broader Water Market Adjacent Segments & International Expansion ▪ Positioned for continued ▪ Carbon Solutions can and ▪ Opportunity to leverage ▪ Regen
Slide 11: Capital Allocation
CAPITAL ALLOCATION Since the start of the Capital Allocation program (1), we have paid $45.0 million in dividends and utilized capital of $44.6 million to repurchase shares The Company entered a three-year, $70 million term loan in November 2018 to fund the acquisition of Carbon Solutions which requ
Slide 12: 2019 Priorities
2019 PRIORITIES INCREASE AND OPTIMIZE REFINED COAL NET CASH FLOWS: Add Investors: • Nurture current & add additional sales channels • Leverage improving refined coal tax equity market and investor clarity as a result of tax reform Optimization: • Maximize operational performance to produce RC and fu
Slide 13: Appendix
APPENDIX
Slide 14: Appendix A: Operating Tons: Royalty vs. Non-Royalty
911 20 Appendix A: OPERATING TONS: ROYALTY VS. NON-ROYALTY 18 16 9 14 13 14 Tonnage (MM) 12 10 10 11 11 12 10 7 7 8 8 7 7 6 7 7 7 6 7 7 7 7 7 4 6 7 7 2 - Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Three Month Ended Operating Tons Six Months Ended
Slide 15: Appendix B: 10-Q Balance Sheet
Appendix B: 10-Q Balance Sheet(1) As of (in thousands, except share data) June 30, 2019 December 31, 2018 ASSETS Current assets: Cash, cash equivalents and restricted cash $ 15,420 $ 18,577 Receivables, net 5,606 9,554 Receivables, related parties 4,189 4,284 Inventories, net 17,798 21,791 Prepaid e
Slide 16: 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) 2019 2018 2019 2018 Revenues: Consumables $ 11,386 $ 726 $ 26,495 $ 1,347 License royalties, related party 4,191 3,523 8,411 6,753 Other — 24 — 72 Total revenues 15,577 4,
Slide 17: Appendix D: 10-Q Cash Flow
Appendix D: 10-Q Cash Flow(1) Six Months Ended June 30, (in thousands) 2019 2018 Cash flows from operating activities Net income $ 22,516 $ 22,953 Adjustments to reconcile net income to net cash provided by operating activities: Increase (decrease) in valuation allowance on deferred tax assets 849 (
Slide 18: Appendix D: 10-Q Cash Flow (continued)
Appendix D: 10-Q Cash Flow (continued)(1) Six Months Ended June 30, (in thousands) 2019 2018 Cash flows from investing activities Distributions from equity method investees in excess of cumulative earnings $ — $ 25,500 Acquisition of business (661) — Acquisition of property, plant, equipment, and in
Slide 19: Appendix E: Non-GAAP Financial Measure & Consolidated EBITDA Reconciliation to Net Income
Appendix E: Non-GAAP Financial Measure & Consolidated EBITDA Reconciliation to Net Income Note on Non-GAAP Financial Measure To supplement the Company's financial information presented in accordance with U.S. generally accepted accounting principles, or GAAP, this investor presentation includes a no
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