Arq, Inc. · NASDAQ:ARQ

Arq — Advanced Emissions Solutions — Q3 2016 Earnings Presentation

23 slides from Arq's earnings presentation, Nov 9, 2016

  1. Slide 1: Q3'16 Earnings Call

    Q3’16 Earnings Call EVENT TITLE November 9, 2016 © 2016 Advanced Emissions Solutions, Inc. All rights reserved. Confidential and Proprietary.

  2. 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

  3. Slide 3: Third Quarter & Recent Highlights

    Third Quarter & Recent Highlights ▪ Remain committed to previously announced strategic goals ▪ Distributions from the Refined Coal (“RC”) business in-line with expectations, increased substantially ▪ Completed the lease of a RC facility in late August, which replaced a previously announced investor

  4. Slide 4: Third Quarter Financial Review

    Third Quarter Financial Review Three Months Ended September 30, Nine Months Ended September 30, Financial data highlights: (in thousands) 2016 2015 2016 2015 Revenues $ 15,710 $ 12,885 $ 46,997 $ 49,537 Cost of revenues, exclusive of depreciation and amortization $ 13,259 $ 10,610 $ 36,339 $ 40,327

  5. Slide 5: Select Components of Net Income (Loss)

    Select Components of Net Income (Loss) ▪ Overview of components of the three and nine months ended September 30, 2016 and 2015 consolidated net income (loss) Select Components of Net Income (Loss) Three Months Ended September 30, Nine Months Ended September 30, (In millions) 2016 2015 2016 2015 Cons

  6. Slide 6: Refined Coal

    Refined Coal 2 PE

  7. Slide 7: RC Facilities Today and Tomorrow

    RC Facilities Today and Tomorrow Full-time Operations Roadmap Not Operating(2) 8 RC facilities - installed (30.9 MT/year) 3 RC facilities - identified (12.9 MT/year) POTENTIAL Operating (1) 4 RC facilities - unidentified 28 RC facilities (~100 MT/year) 13 RC facilities leased/sold (40.3 MT/year) RC

  8. Slide 8: Refined Coal: Components of Earnings

    Refined Coal: Components of Earnings Components of RC Segment Earnings Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2016 2015 2016 2015 RC Segment Revenue Tinuum Group $ 9,775 $ — $ 28,050 $ 4,730 Tinuum Services 960 1,358 2,573 3,530 RCM6 — (1,399) (557) (3,127) T

  9. Slide 9: Operating Tons: Invested vs. Retained Tonnage (MM)

    Operating Tons: Invested vs. Retained 16 14 5 12 3 5 7 10 5 5 Tonnage (MM) 6 0 8 3 12 4 12 6 11 12 13 13 13 10 12 9 9 4 2 0 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Three Months Nine Months Ended Invested Retained QTD - Total Ended Invested Retained YTD

  10. Slide 10: Operating Tons: Royalty vs. Non-Royalty Tonnage (MM)

    Operating Tons: Royalty vs. Non-Royalty 16 14 12 9 7 10 10 Tonnage (MM) 6 11 10 8 6 8 7 3 6 4 8 6 9 11 8 6 10 6 5 4 7 9 2 0 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Three Months Operating Tons Nine Months Operating Tons Ended QTD - Total Ended YTD - Tot

  11. Slide 11: Future Rent Payments – Tinuum Group Invested Facilities

    Future Rent Payments – Tinuum Group Invested Facilities ▪ As of September 30, 2016, remaining payments to all Tinuum Tinuum Group Expected Payments Group members from Tinuum Group’s current RC facilities leased as of September 30, 2016 or sold to tax equity investors are projected to be an aggregate

  12. Slide 12: Non-Operating Tons: Potential Future Tonnage

    Non-Operating Tons(5): Potential Future Tonnage 16 14 4 2 12 5 3 10 5 3 3 Tonnage (MM) 8 3 9 5 6 3 8 4 6 10 9 5 2 3 1 1 0 (1) (1) (1) (1) (1) (1) (2) Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Three Months Non-Operating Nine Months Non-Operating Ended September QTD - Total Ended Septemb

  13. Slide 13: Emissions Control

    Emissions Control

  14. Slide 14: Emissions Control: Components of Earnings

    Emissions Control: Components of Earnings Components of EC Segment Earnings Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2016 2015 2016 2015 EC Segment Revenues Equipment sales $ 14,869 $ 12,088 $ 44,788 $ 47,439 Chemicals 670 132 1,717 749 Consulting services 171

  15. Slide 15: Corporate and Other: Summary

    Corporate and Other: Summary Adjustments to reconcile to net loss attributable to Three Months Ended September 30, Nine Months Ended September 30, ADES (In thousands) 2016 2015 2016 2015 RC segment operating income $ 11,913 $ 1,390 $ 33,974 $ 7,350 EC segment operating income (loss) 2,956 (3,397) 9,

  16. Slide 16: Tinuum Group and ADES: Cash Flow Update

    Tinuum Group and ADES: Cash Flow Update Cash Flow Update Nine Months Ended September 30, (In thousands) 2016 2015 Tinuum Group Cash and cash equivalents, beginning of year $ 6,182 $ 3,870 Cash provided by (used in): Operating activities 52,447 27,101 Investing activities (2,473) (21,531) Financing a

  17. Slide 17: 2016 Strategic Priorities

    2016 Strategic Priorities ▪ We have made noticeable progress against many of the strategic priorities that we outlined on the 2015 10-K conference call ▪ Looking ahead, we continue to focus on obtaining new tax equity investors while further enhancing the profile of the business through execution on

  18. Slide 18: Appendix

    Appendix’ / 4

  19. Slide 19: Appendix A: Supplemental Disclosure

    Appendix A: Supplemental Disclosure ADES Select Cash and Non-cash Components of the three and nine months ended 2016 and 2015 Net Income (Loss) (in thousands) Three Months Ended September 30, Nine Months Ended September 30, Footnotes : Ref. 2016 Ref. 2015 Ref. 2016 Ref. 2015 (1) Agrees to ADES Conde

  20. Slide 20: Appendix B: 10-Q Balance Sheet

    Appendix B: 10-Q Balance Sheet(1) As of (in thousands, except share data) September 30, 2016 December 31, 2015 ASSETS Current assets: Cash and cash equivalents $ 7,603 $ 9,265 Receivables, net 12,008 8,361 Receivables, related parties, net 1,376 1,918 Restricted cash 4,019 728 Costs in excess of bil

  21. Slide 21: Appendix C: 10-Q Income Statement

    Appendix C: 10-Q Income Statement(1) Three Months Ended September 30, Nine Months Ended September 30, (in thousands, except per share data and percentages) 2016 2015 2016 2015 Revenues: Equipment sales 14,869 12,088 44,788 47,439 Chemicals 670 132 1,717 749 Consulting services and other 171 665 492

  22. Slide 22: Appendix D: 10-Q Cash Flow

    Appendix D: 10-Q Cash Flow(1) Nine Months Ended September 30, (in thousands) 2016 2015 Cash flows from operating activities Net income (loss) $ 21,848 $ (27,233) Adjustments to reconcile net income (loss) to net cash used in operating activities: Depreciation and amortization 593 1,632 Amortization

  23. Slide 23: Appendix D: 10-Q Cash Flow (continued)

    Appendix D: 10-Q Cash Flow (continued)(1) Nine Months Ended September 30, (in thousands) 2016 2015 Cash flows from investing activities Maturity of investment securities, restricted 336 — Increase in restricted cash (550) (2,100) Acquisition of property and equipment, net (147) (437) Advance on note

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