Advanced Emissions Solutions, Inc. (NASDAQ: ADES) (the "Company" or
"ADES") today filed its Quarterly Report on Form 10-Q and reported
financial results for the third quarter ended September 30,
2019, including information about its equity investments in Tinuum
Group, LLC ("Tinuum Group") and Tinuum Services, LLC ("Tinuum
Services") (collectively "Tinuum"), of which ADES owns 42.5% and
50%, respectively.
Third Quarter Segment
Highlights
Tinuum & Refined Coal (“RC”)
Highlights
- Tinuum distributions to ADES were $18.7 million, a
year-over-year increase of 100%
- ADES earnings from Tinuum were $14.4 million, significantly
higher than the prior year, which was impacted by the adopted
change in lease and revenue accounting standards by Tinuum
effective January 1, 2019
- Royalty earnings from Tinuum were $4.4 million, a
year-over-year increase of 7%
- RC Segment operating income was $18.2 million, a year-over-year
increase of 42%
- Completed transactions for two additional RC facilities during
the third quarter, increasing the number of invested facilities to
23 as of September 30, 2019; new facilities are royalty
bearing to ADES
- Based on the 23 invested RC facilities as of September 30,
2019 and cash distributions received during the three months ended
September 30, 2019, expected future net RC cash flows to ADES
are projected to be between $150 million and $175 million through
year end 2021.
Power Generation and Industrials ("PGI")
Highlights
- Recognized segment revenue of $14.0 million, compared to $1.0
million during the third quarter of 2018, driven by
consumables
- Segment operating loss was $1.0 million compared to an
operating loss of $1.2 million in the third quarter of 2018
- Segment EBITDA was $1.0 million, compared to a segment EBITDA
loss of $1.1 million in the third quarter of 2018
ADES Consolidated
Highlights
- Recognized consolidated revenues of $19.1 million compared to
$5.1 million in the third quarter of 2018
- Consolidated net income was $3.9 million compared to $5.5
million in the prior year
- Fully diluted earnings per share in the third quarter was $0.21
compared to $0.28 in 2018
- Consolidated EBITDA was $14.2 million, an increase of $4.4
million over prior year
- Made quarterly principal payments of $8.0 million on the
Company's $70.0 million initial face value term loan, which
accounted for $1.4 million in interest expense during the third
quarter, and reduced the term loan principal balance to $46.0
million
- Ended the third quarter 2019 with a total cash balance of $20.2
million, a decrease of $3.6 million from December 31,
2018
- Paid quarterly dividend of $0.25 per share
- In November 2019, the Board authorized an update to the stock
repurchase program to increase the amount available to $10.0
million
L. Heath Sampson, President and CEO of ADES
commented, “During the third quarter Tinuum was able to identify
and secure tax-equity investors for two additional refined coal
facilities. The incremental tonnage contracted by these two
transactions brings our year-to-date total to roughly 15 million
tons, comfortably exceeding our previous guidance of 12 million.
We've been very pleased with this progress, however, coal-dispatch
pressure and utility closures have impacted our total expected RC
cash flows. We have updated these RC cash flows and they will
continue to support our capital allocation priorities and our
organic investment in our activated carbon growth channels.
Additionally, we are now more optimistic related to Tinuum’s
ability to obtain incremental cash flows through additional RC
facility closures."
Sampson continued, “In our RC and PGI segments,
we detailed last quarter many of the factors that suppressed
coal-dispatch, namely cheap alternative fuel sources such as
natural gas as well as abnormally mild weather which hampered
demand. We saw these headwinds persist into the third quarter,
albeit at a more modest level. In response, we have placed a
heightened emphasis within our PGI segment on pursuing customers
with an activated carbon need who are agnostic to coal dispatch
levels, such as broader industrial markets. We remain focused on
our key objectives of filling the Red River plant’s capacity,
winning share in the North American mercury control market for
coal-fired plants and identifying addressable opportunities in
other adjacent growth markets, such as industrial applications and
municipal water treatment. We continue to be encouraged by customer
discussions and the reception of the marketplace to our suite of
mercury control solutions.”
Third Quarter and YTD 2019
Results
Third quarter revenue and cost of revenue were
$19.1 million and $11.9 million, respectively, compared with $5.1
million and $1.0 million in the third quarter of 2018. Revenue and
cost of revenue during the first nine months of the year totaled
$54.0 million and $38.3 million, respectively, compared to $13.3
million and $2.2 million during the first half of 2018. The
increase in revenues during the third quarter and first nine months
of 2019 were primarily driven by the increase in consumables sales
resulting from the contribution of the Company's PGI segment which
contains the majority of the previously acquired activated carbon
assets. The Company's revenues and margins were negatively impacted
by low coal-fired power dispatch, driven by power generation from
sources other than coal and mild weather conditions, as well as by
the planned turnaround at the Company's carbon production facility.
The Company's experience is consistent with a recent U.S. Energy
Information Administration Outlook for 2019 in which its forecast
decreased 7% since its December 2018 estimate. Also negatively
impacting cost of revenue and margins during the nine months ended
September 30, 2019 was a $5.0 million adjustment to costs of
revenue due to the step-up in basis of inventory acquired related
to purchase accounting.
Revenue was positively impacted by royalty
earnings from Tinuum of $4.4 million, an increase of 7% compared to
$4.1 million in the third quarter of 2018, driven by the increased
number of RC facilities and earnings from the respective RC
facilities. Royalty earnings in the first nine months of 2019
totaled $12.8 million compared to $10.9 million in the comparable
period in 2018.
Third quarter other operating expenses were $9.6
million compared to $4.2 million year over year. Other operating
expenses for the first nine months of the year totaled $25.9
million compared to $14.3 million in the same period of 2018. The
increases for the quarter and year-to-date periods were driven by
higher general and administrative, legal and professional, and
depreciation, amortization, depletion and accretion expenses,
resulting in $5.3 million and $11.1 million of the increase,
respectively, related to the Carbon Solutions acquisition.
Third quarter earnings from equity method investments were $14.4
million, compared to $9.7 million for the third quarter of 2018.
Year-to-date earnings from equity method investments were $57.1
million compared to $37.9 million during the first nine months of
2018. The significant increases were driven by additional operating
RC facilities year over year but the impact of the adoption of new
lease and revenue accounting standards by Tinuum offset the
increases. The change leads to the point-in-time revenue
recognition of certain RC contracts by Tinuum Group and may affect
the timing of revenue recognition related to future closures of RC
facilities. However, this change does not impact the timing or
total expected future cash flows from Tinuum but may impact the
timing of equity earnings related to future RC deals.
Third quarter interest expense was $1.7 million,
compared to $0.4 million in the third quarter of 2018. Year-to-date
interest expense was $5.8 million compared to $1.1 million during
the comparable period of 2018. The increase was driven by the
interest expense related to the term loan used to fund the Carbon
Solutions acquisition.
Third quarter income tax expense was $6.6
million, compared to $3.9 million in the third quarter of 2018.
Income tax expense for the first nine months of 2019 was $14.9
million compared to $5.2 million during the same period of 2018,
primarily driven by an increase in the valuation allowance against
the Company's deferred tax assets during the current year periods
compared to a reduction in the valuation allowance during the 2018
periods.
Pre-tax income for the third quarter was $10.5
million, compared to pre-tax income of $9.4 million for the third
quarter of 2018. Net income for the third quarter was $3.9 million,
compared to net income of $5.5 million for the third quarter of
2018. Net income during the first nine months totaled $26.4
million, a 7% decrease from $28.5 million during the first nine
months of 2018.
PGI segment EBITDA (segment operating loss
adjusted for depreciation, amortization, depletion and accretion
and interest expense) for the third quarter was $1.0 million
compared to a segment EBITDA loss of $1.1 million in the third
quarter of 2018.
Consolidated EBITDA (earnings before interest
expense, income tax expense and depreciation, amortization,
depletion and accretion and interest expense) for the third quarter
was $14.2 million, an increase of $4.4 million over the third
quarter of 2018.
Segment EBITDA and Consolidated EBITDA are
non-GAAP measures of certain financial performance. See below for
reconciliation of such measures to their most directly comparable
GAAP financial measure.
As of September 30, 2019, the Company had
cash and cash equivalents and restricted cash of $20.2 million, a
decrease of $3.6 million compared to $23.8 million as of
December 31, 2018. This decrease is the result of dividends
paid, principal repayments on the term loan, as well as share
repurchase activity during the year-to-date period.
Long-Term Borrowings
In December 2018, the Company entered into a
$70.0 million, three-year senior term loan to finance the Carbon
Solutions acquisition. The senior term loan is subject to customary
covenants as well as quarterly principal payments of $6.0 million
that began on March 1, 2019. As of September 30, 2019, the
outstanding principal balance of the senior term loan was $46.0
million.
Dividend
Today, the Board of Directors declared a
quarterly cash dividend of $0.25 per share of common stock. The
dividend is payable on December 13, 2019 to stockholders of
record at the close of business on November 26, 2019.
Share Repurchase Program
As previously announced, in November 2018, the
Company's Board authorized the Company to purchase up to $20.0
million of its outstanding common stock. This stock repurchase
program was to remain in effect until December 31, 2019 unless
otherwise modified by the Board. As of September 30, 2019, the
Company had $2.9 million remaining under this program. In November
2019, the Board authorized an incremental $7.1 million to this
stock repurchase program and provided that the program will remain
in effect until all amounts are utilized or the program is
otherwise modified by the Board.
Conference Call and Webcast
Information
The Company has scheduled a conference call to
begin at 9:00 a.m. Eastern Time on Wednesday, November 13,
2019. The conference call will be webcast live via the Investor
section of ADES's website at www.advancedemissionssolutions.com.
Interested parties may also participate in the call by dialing
(833) 227-5845 (Domestic) or (647) 689-4072 (International)
conference ID 8775016. A supplemental investor presentation will be
available on the Company's investor relations website prior to the
start of the conference call.
About Advanced Emissions Solutions,
Inc.Advanced Emissions Solutions, Inc. serves as the
holding entity for a family of companies that provide emissions
solutions to customers in the power generation and other
industries.
ADA brings together ADA Carbon Solutions, LLC, a
leading provider of powder activated carbon ("PAC") and ADA-ES,
Inc., the providers of ADA® M-Prove™ Technology. We provide
products and services to control mercury and other contaminants at
coal-fired power generators and other industrial companies. Our
broad suite of complementary products control contaminants and help
our customers meet their compliance objectives consistently and
reliably.
CarbPure Technologies LLC, (“CarbPure”), formed
in 2015 provides high-quality PAC and granular
activated carbon ideally suited for treatment of potable water and
wastewater. Our affiliate company, ADA Carbon Solutions, LLC
manufactures the products for CarbPure.
Tinuum Group, LLC (“Tinuum Group”) is a 42.5%
owned joint venture by ADA that provides patented Refined Coal
(“RC”) technologies to enhance combustion of and reduce emissions
of NOx and mercury from coal-fired power plants.
Caution on Forward-Looking
StatementsThis press release contains 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 projection on future RC cash flows as well as expectation
of growth opportunities in the PGI segment. These forward-looking
statements involve risks and uncertainties. Actual events or
results could differ materially from those discussed in the
forward-looking statements as a result of various factors
including, but not limited to, timing of new and pending
regulations and any legal challenges to or extensions of compliance
dates of them; the US government’s failure to promulgate
regulations that benefit our business; changes in laws and
regulations, IRS interpretations or guidance, accounting rules, any
pending court decisions, prices, economic conditions and market
demand; impact of competition; availability, cost of and demand for
alternative energy sources and other technologies; technical, start
up and operational difficulties; failure of the RC facilities to
produce RC; inability to sell or lease additional RC facilities;
termination of or amendments to the contracts for sale or lease of
RC facilities; customer demand for mercury removal products;
competition within the industries in which we operate; availability
or opportunities to scale and further grow our PGI business;
decreases in the production of RC; loss of key personnel; as well
as other factors relating to our business, as described in our
filings with the SEC, with particular emphasis on the risk factor
disclosures contained in those filings. You are cautioned not to
place undue reliance on the forward-looking statements and to
consult filings we have made and will make with the SEC for
additional discussion concerning risks and uncertainties that may
apply to our business and the ownership of our securities. The
forward-looking statements speak only as to the date of this press
release.
Source: Advanced Emissions Solutions, Inc.
Investor Contact:
Alpha IR GroupChris Hodges or Ryan
Coleman312-445-2870ADES@alpha-ir.com
TABLE 1
Advanced Emissions Solutions, Inc. and
SubsidiariesCondensed Consolidated Balance
Sheets(Unaudited)
|
|
As of |
(in thousands, except share
data) |
|
September 30, 2019 |
|
December 31, 2018 |
ASSETS |
|
|
|
|
Current assets: |
|
|
|
|
Cash, cash equivalents and restricted cash |
|
$ |
15,155 |
|
|
$ |
18,577 |
|
Receivables, net |
|
6,771 |
|
|
9,554 |
|
Receivables, related parties |
|
4,382 |
|
|
4,284 |
|
Inventories, net |
|
16,917 |
|
|
21,791 |
|
Prepaid expenses and other assets |
|
6,070 |
|
|
5,570 |
|
Total current assets |
|
49,295 |
|
|
59,776 |
|
Restricted cash,
long-term |
|
5,000 |
|
|
5,195 |
|
Property, plant and equipment,
net of accumulated depreciation of $5,651 and $1,499,
respectively |
|
44,168 |
|
|
42,697 |
|
Intangible assets, net |
|
4,300 |
|
|
4,830 |
|
Equity method investments |
|
44,111 |
|
|
6,634 |
|
Deferred tax assets, net |
|
13,491 |
|
|
32,539 |
|
Other long-term assets,
net |
|
18,363 |
|
|
7,993 |
|
Total Assets |
|
$ |
178,728 |
|
|
$ |
159,664 |
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
|
|
|
Current liabilities: |
|
|
|
|
Accounts payable |
|
$ |
6,838 |
|
|
$ |
6,235 |
|
Accrued payroll and related liabilities |
|
3,893 |
|
|
8,279 |
|
Current portion of long-term debt |
|
24,072 |
|
|
24,067 |
|
Other current liabilities |
|
4,287 |
|
|
2,138 |
|
Total current liabilities |
|
39,090 |
|
|
40,719 |
|
Long-term debt |
|
26,276 |
|
|
50,058 |
|
Other long-term
liabilities |
|
6,062 |
|
|
940 |
|
Total Liabilities |
|
71,428 |
|
|
91,717 |
|
Commitments and
contingencies |
|
|
|
|
Stockholders’ equity: |
|
|
|
|
Preferred stock: par value of $.001 per share, 50,000,000 shares
authorized, none outstanding |
|
— |
|
|
— |
|
Common stock: par value of $.001 per share, 100,000,000 shares
authorized, 22,915,429 and 22,640,677 shares issued, and 18,594,498
and 18,576,489 shares outstanding at September 30, 2019 and
December 31, 2018, respectively |
|
23 |
|
|
23 |
|
Treasury stock, at cost: 4,320,931 and 4,064,188 shares as of
September 30, 2019 and December 31, 2018, respectively |
|
(44,666 |
) |
|
(41,740 |
) |
Additional paid-in capital |
|
97,706 |
|
|
96,750 |
|
Retained earnings |
|
54,237 |
|
|
12,914 |
|
Total stockholders’ equity |
|
107,300 |
|
|
67,947 |
|
Total Liabilities and Stockholders’ Equity |
|
$ |
178,728 |
|
|
$ |
159,664 |
|
|
|
|
|
|
|
|
|
|
TABLE 2
Advanced Emissions Solutions, Inc. and
SubsidiariesCondensed Consolidated Statements of
Operations(Unaudited)
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
(in
thousands, except per share data) |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
Revenues: |
|
|
|
|
|
|
|
|
Consumables |
|
$ |
14,748 |
|
|
$ |
1,043 |
|
|
$ |
41,243 |
|
|
$ |
2,390 |
|
License royalties, related party |
|
4,385 |
|
|
4,104 |
|
|
12,796 |
|
|
10,857 |
|
Other |
|
— |
|
|
— |
|
|
— |
|
|
72 |
|
Total revenues |
|
19,133 |
|
|
5,147 |
|
|
54,039 |
|
|
13,319 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
Consumables cost of revenue, exclusive of depreciation and
amortization |
|
11,939 |
|
|
954 |
|
|
38,339 |
|
|
2,567 |
|
Other sales cost of revenue, exclusive of depreciation and
amortization |
|
— |
|
|
— |
|
|
— |
|
|
(346 |
) |
Payroll and benefits |
|
2,651 |
|
|
2,555 |
|
|
8,005 |
|
|
7,528 |
|
Legal and professional fees |
|
1,755 |
|
|
698 |
|
|
5,300 |
|
|
3,459 |
|
General and administrative |
|
3,136 |
|
|
834 |
|
|
7,699 |
|
|
3,098 |
|
Depreciation, amortization, depletion and accretion |
|
2,043 |
|
|
74 |
|
|
4,902 |
|
|
262 |
|
Total operating expenses |
|
21,524 |
|
|
5,115 |
|
|
64,245 |
|
|
16,568 |
|
Operating (loss) income |
|
(2,391 |
) |
|
32 |
|
|
(10,206 |
) |
|
(3,249 |
) |
Other income (expense): |
|
|
|
|
|
|
|
|
Earnings from equity method investments |
|
14,426 |
|
|
9,715 |
|
|
57,051 |
|
|
37,857 |
|
Interest expense |
|
(1,729 |
) |
|
(399 |
) |
|
(5,820 |
) |
|
(1,147 |
) |
Other |
|
212 |
|
|
86 |
|
|
342 |
|
|
146 |
|
Total other income |
|
12,909 |
|
|
9,402 |
|
|
51,573 |
|
|
36,856 |
|
Income before income tax
expense |
|
10,518 |
|
|
9,434 |
|
|
41,367 |
|
|
33,607 |
|
Income tax expense |
|
6,595 |
|
|
3,931 |
|
|
14,928 |
|
|
5,151 |
|
Net income |
|
$ |
3,923 |
|
|
$ |
5,503 |
|
|
$ |
26,439 |
|
|
$ |
28,456 |
|
Earnings per common
share: |
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.22 |
|
|
$ |
0.28 |
|
|
$ |
1.45 |
|
|
$ |
1.41 |
|
Diluted |
|
$ |
0.21 |
|
|
$ |
0.28 |
|
|
$ |
1.44 |
|
|
$ |
1.40 |
|
Weighted-average number of
common shares outstanding: |
|
|
|
|
|
|
|
|
Basic |
|
18,112 |
|
|
19,726 |
|
|
18,184 |
|
|
20,090 |
|
Diluted |
|
18,339 |
|
|
19,876 |
|
|
18,394 |
|
|
20,228 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TABLE 3
Advanced Emissions Solutions, Inc. and
SubsidiariesCondensed Consolidated Statements of
Cash Flows(Unaudited)
|
|
Nine Months Ended September 30, |
(in
thousands) |
|
2019 |
|
2018 |
Cash flows from operating
activities |
|
|
|
|
Net income |
|
$ |
26,439 |
|
|
$ |
28,456 |
|
Adjustments to reconcile net
income to net cash provided by operating activities: |
|
|
|
|
Increase in valuation allowance on deferred tax assets |
|
3,822 |
|
|
2,731 |
|
Depreciation, amortization, depletion and accretion |
|
4,902 |
|
|
262 |
|
Operating lease expense |
|
2,371 |
|
|
— |
|
Amortization of debt discount and debt issuance costs |
|
1,324 |
|
|
— |
|
Stock-based compensation expense |
|
1,326 |
|
|
1,929 |
|
Earnings from equity method investments |
|
(57,051 |
) |
|
(37,857 |
) |
Other non-cash items, net |
|
697 |
|
|
190 |
|
Changes in operating assets and liabilities: |
|
|
|
|
Receivables and related party receivables |
|
2,685 |
|
|
(375 |
) |
Prepaid expenses and other assets |
|
(440 |
) |
|
(797 |
) |
Costs incurred on uncompleted contracts |
|
— |
|
|
15,945 |
|
Inventories |
|
4,566 |
|
|
— |
|
Deferred tax assets, net |
|
6,812 |
|
|
(966 |
) |
Other long-term assets |
|
(43 |
) |
|
— |
|
Accounts payable |
|
1,010 |
|
|
(340 |
) |
Accrued payroll and related liabilities |
|
(4,386 |
) |
|
587 |
|
Other current liabilities |
|
(278 |
) |
|
(1,974 |
) |
Billings on uncompleted contracts |
|
— |
|
|
(15,945 |
) |
Operating lease liabilities |
|
(2,435 |
) |
|
— |
|
Other long-term liabilities |
|
(529 |
) |
|
(157 |
) |
Distributions from equity method investees, return on
investment |
|
56,806 |
|
|
4,000 |
|
Net cash provided by (used in) operating activities |
|
47,598 |
|
|
(4,311 |
) |
Cash flows from investing
activities |
|
|
|
|
Distributions from equity method investees in excess of cumulative
earnings |
|
— |
|
|
33,575 |
|
Acquisition of business |
|
(661 |
) |
|
— |
|
Acquisition of property, plant, equipment, and intangible assets,
net |
|
(6,430 |
) |
|
(191 |
) |
Mine development costs |
|
(2,083 |
) |
|
— |
|
Contributions to equity method investees |
|
— |
|
|
(750 |
) |
Net cash (used in) provided by investing activities |
|
(9,174 |
) |
|
32,634 |
|
Cash flows from financing
activities |
|
|
|
|
Principal payments on term loan |
|
(24,000 |
) |
|
— |
|
Principal payments on finance lease obligations |
|
(1,016 |
) |
|
— |
|
Dividends paid |
|
(13,729 |
) |
|
(15,226 |
) |
Repurchase of common shares |
|
(2,926 |
) |
|
(11,169 |
) |
Repurchase of common shares to satisfy tax withholdings |
|
(370 |
) |
|
(707 |
) |
Net cash used in financing activities |
|
(42,041 |
) |
|
(27,102 |
) |
(Decrease) increase in Cash and Cash Equivalents and Restricted
Cash |
|
(3,617 |
) |
|
1,221 |
|
Cash and Cash Equivalents and
Restricted Cash, beginning of period |
|
23,772 |
|
|
30,693 |
|
Cash and Cash Equivalents and
Restricted Cash, end of period |
|
$ |
20,155 |
|
|
$ |
31,914 |
|
Supplemental disclosure of
non-cash investing and financing activities: |
|
|
|
|
Dividends declared, not paid |
|
$ |
204 |
|
|
$ |
85 |
|
|
|
|
|
|
|
|
|
|
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, the Press Release includes non-GAAP measures of certain
financial performance. These non-GAAP measures include Consolidated
EBITDA and Segment EBITDA. The Company included non-GAAP measures
because management believes that they help to facilitate comparison
of operating results between periods. The Company believes the
non-GAAP measures provide useful information to both management and
users of the financial statements by excluding certain expenses
that may not be indicative of core operating results and business
outlook. These non-GAAP measures are not in accordance with, or an
alternative to, measures prepared in accordance with GAAP and may
be different from non-GAAP measures used by other companies. In
addition, these non-GAAP measures are not based on any
comprehensive set of accounting rules or principles. These measures
should only be used to evaluate the Company's results of operations
in conjunction with the corresponding GAAP measures.
The Company has defined Consolidated EBITDA as net income,
adjusted for the impact of the following items that are either
non-cash or that the Company does not consider representative of
its ongoing operating performance: depreciation, amortization,
depletion and accretion, interest expense, net and income tax
expense. Because Consolidated EBITDA omits certain non-cash items,
the Company believes that the measure is less susceptible to
variances that affect the Company's operating performance.
Segment EBITDA is calculated as Segment operating income (loss)
adjusted for the impact of the following items that are either
non-cash or that the Company does not consider representative of
its ongoing operating performance: depreciation, amortization,
depletion and accretion and interest expense, net. When used in
conjunction with GAAP financial measures, Segment EBITDA is a
supplemental measure of operating performance that management
believes is a useful measure related the Company's PGI segment
performance relative to the performance of its competitors as well
as performance period over period. Additionally, the Company
believes the measure is less susceptible to variances that affect
its operating performance results.
The Company presents Consolidated EBITDA and Segment EBITDA
because the Company believes they are useful as supplemental
measures in evaluating the performance of the Company's operating
performance and provide greater transparency into the results of
operations. The Company's management uses Consolidated EBITDA and
Segment EBITDA as factors in evaluating the performance of its
business.
The adjustments to Consolidated EBITDA and Segment EBITDA in
future periods are generally expected to be similar. Consolidated
EBITDA and Segment EBITDA have limitations as analytical tools, and
you should not consider these measures in isolation or as a
substitute for analyzing the Company's results as reported under
GAAP.
TABLE 4
Advanced Emissions Solutions, Inc. and
SubsidiariesConsolidated EBITDA Reconciliation to
Net Income(Amounts in
thousands)(Unaudited)
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
(in
thousands) |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
Net income (1) |
|
$ |
3,923 |
|
|
$ |
5,503 |
|
|
$ |
26,439 |
|
|
$ |
28,456 |
|
Depreciation, amortization, depletion and accretion |
|
2,043 |
|
|
74 |
|
|
4,902 |
|
|
262 |
|
Interest expense, net |
|
1,663 |
|
|
317 |
|
|
5,619 |
|
|
1,003 |
|
Income tax expense |
|
6,595 |
|
|
3,931 |
|
|
14,928 |
|
|
5,151 |
|
Consolidated EBITDA |
|
$ |
14,224 |
|
|
$ |
9,825 |
|
|
$ |
51,888 |
|
|
$ |
34,872 |
|
(1) Net income for the nine months ended
September 30, 2019 was inclusive of a $5.0 million adjustment,
which increased cost of revenue due to a step-up in basis of
inventory acquired related to the Carbon Solutions Acquisition.
TABLE 5
Advanced Emissions Solutions, Inc. and
SubsidiariesPGI Segment EBITDA Reconciliation to
Segment Operating Loss(Amounts in
thousands)(Unaudited)
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
(in
thousands) |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
Segment operating loss (1) |
|
$ |
(977 |
) |
|
$ |
(1,168 |
) |
|
$ |
(8,301 |
) |
|
$ |
(3,493 |
) |
Depreciation, amortization, depletion and accretion |
|
1,853 |
|
|
42 |
|
|
4,498 |
|
|
113 |
|
Interest expense, net |
|
75 |
|
|
— |
|
|
263 |
|
|
— |
|
Segment EBITDA income
(loss) |
|
$ |
951 |
|
|
$ |
(1,126 |
) |
|
$ |
(3,540 |
) |
|
$ |
(3,380 |
) |
(1) Segment operating loss for the nine months
ended September 30, 2019 was inclusive of a $4.7 million
adjustment, which increased cost of revenue due to a step-up in
basis of inventory acquired related to the Carbon Solutions
Acquisition.
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