Arq, Inc. · NASDAQ:ARQ
Arq — Advanced Emissions Solutions — Q1 2019 Earnings Presentation
20 slides from Arq's earnings presentation, May 7, 2019
Slide 1: First Quarter 2019 Results Call
Advanced Emissions Solutions, Inc. Advancing Cleaner Energy First Quarter 2019 Results Call May 7, 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: First Quarter 2019 Highlights
FIRST QUARTER 2019 HIGHLIGHTS Obtained separate third party tax equity investors for an RC facility in January 2019 that was previously in installation phase; the RC facility is royalty bearing; Based on 20 invested RC facilities as of March 31, 2019 and cash distributions occurring in the three mon
Slide 4: Financials
FINANCIALS
Slide 5: Financial Highlights
FINANCIAL HIGHLIGHTS REVENUES NET INCOME EQUITY METHOD EARNINGS $22 $14 $19 $8 $12 $4 March 31, 2019 March 31, 2018 March 31, 2019 March 31, 2018 March 31, 2019 March 31, 2018 Three Months Ended Three Months Ended Three Months Ended EBITDA(1) CASH, CASH EQUIVALENTS & RESTRICTED CURRENT & LONG TERM B
Slide 6: Refined Coal
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Slide 7: Refined Coal Environment
REFINED COAL ENVIRONMENT The refined coal business is proven and yields many benefits to utilities, investors and the environment, and while the outlook has improved, there remain hurdles to overcome A significant number of major public and private companies have invested in RC Tax Equity since its
Slide 8: Refined Coal Facilities Today and Tomorrow
REFINED COAL FACILITIES TODAY AND TOMORROW FULL-TIME OPERATIONS ROADMAP Not Operating and Not Invested 8 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) 20 RC facilities leased/sold (55-65 MT/year)
Slide 9: Future Cash Flows for ADES & 2019 Priorities
Future Cash Flows for ADES & 2019 Priorities
Slide 10: Expected Future RC Cash Flows
EXPECTED FUTURE RC CASH FLOWS EXPECTED FUTURE CASH FLOWS FROM RC BUSINESS (1) (in millions) Based on 20 invested facilities as of March 31, 2019 and includes all net RC cash flows $90 of ADES (1) $80 Results in expected future net RC cash flows $70 $60 of $200 million to $225 million to ADES in $50
Slide 11: 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 12: Return of Capital
RETURN OF CAPITAL Since the start of the Capital Allocation program (1), the Company has paid $40.4 million in dividends and utilized capital of $42.5 million to repurchase shares Since March 31, 2017, the Company has returned approximately $3.75 per share to its shareholders(2); the stock price for
Slide 13: 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 14: Appendix
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Slide 15: Appendix A: Operating Tons: Royalty vs. Non-Royalty
Appendix A: OPERATING TONS: ROYALTY VS. NON-ROYALTY 911 20 18 16 9 14 12 13 Tonnage (MM) 12 10 8 10 11 11 10 7 7 7 8 7 7 6 6 7 7 6 7 7 7 7 7 4 6 7 7 2 - Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Three Month Ended Operating Tons QTD - Total March
Slide 16: Appendix B: 10-Q Balance Sheet
Appendix B: 10-Q Balance Sheet(1) As of (in thousands, except share data) March 31, 2019 December 31, 2018 ASSETS Current assets: Cash, cash equivalents and restricted cash $ 20,670 $ 18,577 Receivables, net 7,772 9,554 Receivables, related parties 4,220 4,284 Inventories 18,053 21,791 Prepaid expen
Slide 17: Appendix C: 10-Q Income Statement
Appendix C: 10-Q Income Statement(1) Three Months Ended March 31, (in thousands, except per share data) 2019 2018 Revenues: Consumables $ 15,109 $ 621 License royalties, related party 4,220 3,230 Other — 48 Total revenues 19,329 3,899 Operating expenses: Consumables cost of revenue, exclusive of dep
Slide 18: Appendix D: 10-Q Cash Flow
Appendix D: 10-Q Cash Flow(1) Three Months Ended March 31, (in thousands) 2019 2018 Cash flows from operating activities Net income $ 14,402 $ 7,662 Adjustments to reconcile net income to net cash provided by operating activities: Decrease in valuation allowance on deferred tax assets (4,020) — Depr
Slide 19: Appendix D: 10-Q Cash Flow (continued)
Appendix D: 10-Q Cash Flow (continued)(1) Three Months Ended March 31, (in thousands) 2019 2018 Cash flows from investing activities Distributions from equity method investees in excess of cumulative earnings $ — $ 11,050 Acquisition of business (661) — Acquisition of property, plant, equipment, and
Slide 20: Appendix E: Non-GAAP Financial Measure & Consolidated EBITDA Reconciliation
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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