Arq Reports Fourth Quarter and Full Year 2024 Results
Arq (NASDAQ: ARQ) reported strong financial results for FY 2024, with revenue increasing 10% YoY to $109.0 million, driven by higher Average Sales Price (ASP) and improved product mix. The company achieved a 36.2% gross margin, up 410 basis points from 2023, marking its third consecutive quarter of positive Adjusted EBITDA.
Key financial metrics include a net loss of ($5.1 million) for FY 2024, significantly improved from ($12.2 million) in 2023, and Adjusted EBITDA of $7.7 million compared to ($2.6 million) loss in the previous year. The company secured a $30 million ABL facility, enhancing financial flexibility.
The company's GAC facility development is progressing, with first production expected by Q1 2025 end and ramp-up to 25 million pounds nameplate capacity targeted for H2 2025. Approximately 16 million pounds of capacity is already contracted, with negotiations ongoing for remaining capacity.
Arq (NASDAQ: ARQ) ha riportato risultati finanziari solidi per l'anno fiscale 2024, con un aumento del fatturato del 10% rispetto all'anno precedente, raggiungendo 109,0 milioni di dollari, grazie a un prezzo medio di vendita (ASP) più elevato e a un miglioramento del mix di prodotti. L'azienda ha raggiunto un margine lordo del 36,2%, in aumento di 410 punti base rispetto al 2023, segnando il terzo trimestre consecutivo di EBITDA rettificato positivo.
I principali indicatori finanziari includono una perdita netta di (5,1 milioni di dollari) per l'anno fiscale 2024, notevolmente migliorata rispetto ai (12,2 milioni di dollari) del 2023, e un EBITDA rettificato di 7,7 milioni di dollari rispetto a una perdita di (2,6 milioni di dollari) nell'anno precedente. L'azienda ha ottenuto una linea di credito ABL da 30 milioni di dollari, migliorando la flessibilità finanziaria.
Sono in corso i progressi nello sviluppo dell'impianto GAC dell'azienda, con la prima produzione prevista entro la fine del primo trimestre del 2025 e un aumento della capacità nominale a 25 milioni di libbre previsto per il secondo semestre del 2025. Circa 16 milioni di libbre di capacità sono già contrattati, con trattative in corso per la capacità rimanente.
Arq (NASDAQ: ARQ) reportó resultados financieros sólidos para el año fiscal 2024, con un aumento del 10% en los ingresos interanuales, alcanzando $109.0 millones, impulsado por un mayor Precio Medio de Venta (ASP) y una mejora en la mezcla de productos. La compañía logró un margen bruto del 36.2%, un aumento de 410 puntos básicos en comparación con 2023, marcando su tercer trimestre consecutivo de EBITDA ajustado positivo.
Los principales indicadores financieros incluyen una pérdida neta de (5.1 millones de dólares) para el año fiscal 2024, mejorando significativamente desde los (12.2 millones de dólares) en 2023, y un EBITDA ajustado de $7.7 millones en comparación con una pérdida de (2.6 millones de dólares) en el año anterior. La compañía aseguró una línea de crédito ABL de 30 millones de dólares, mejorando su flexibilidad financiera.
El desarrollo de la instalación GAC de la compañía está avanzando, con la primera producción esperada para finales del primer trimestre de 2025 y un aumento a una capacidad nominal de 25 millones de libras previsto para el segundo semestre de 2025. Aproximadamente 16 millones de libras de capacidad ya están contratadas, con negociaciones en curso para la capacidad restante.
Arq (NASDAQ: ARQ)는 2024 회계연도에 대한 강력한 재무 결과를 보고했으며, 수익은 전년 대비 10% 증가하여 1억 9백만 달러에 달했습니다. 이는 평균 판매 가격(ASP)의 증가와 개선된 제품 믹스에 의해 주도되었습니다. 회사는 36.2%의 총 마진을 달성했으며, 이는 2023년 대비 410 베이시스 포인트 증가한 수치로, 긍정적인 조정 EBITDA를 기록한 세 번째 연속 분기입니다.
주요 재무 지표로는 2024 회계연도에 (510만 달러)의 순손실이 있었으며, 이는 2023년의 (1,220만 달러)에서 크게 개선된 것입니다. 조정 EBITDA는 770만 달러로, 전년도 (260만 달러) 손실에 비해 개선되었습니다. 회사는 3천만 달러의 ABL 시설을 확보하여 재무 유연성을 강화했습니다.
회사의 GAC 시설 개발이 진행 중이며, 첫 생산은 2025년 1분기 말에 예상되며, 2500만 파운드의 명목 용량으로 2025년 하반기까지 증가할 예정입니다. 약 1600만 파운드의 용량이 이미 계약되었으며, 나머지 용량에 대한 협상이 진행 중입니다.
Arq (NASDAQ: ARQ) a annoncé de solides résultats financiers pour l'exercice 2024, avec un chiffre d'affaires en hausse de 10 % par rapport à l'année précédente, atteignant 109,0 millions de dollars, soutenu par un prix de vente moyen (ASP) plus élevé et une amélioration du mix produit. L'entreprise a réalisé une marge brute de 36,2 %, en hausse de 410 points de base par rapport à 2023, marquant son troisième trimestre consécutif de bénéfice avant intérêts, impôts, dépréciation et amortissement (EBITDA) ajusté positif.
Les principaux indicateurs financiers incluent une perte nette de (5,1 millions de dollars) pour l'exercice 2024, nettement améliorée par rapport à (12,2 millions de dollars) en 2023, et un EBITDA ajusté de 7,7 millions de dollars par rapport à une perte de (2,6 millions de dollars) l'année précédente. L'entreprise a sécurisé une ligne de crédit ABL de 30 millions de dollars, renforçant ainsi sa flexibilité financière.
Le développement de l'installation GAC de l'entreprise progresse, avec une première production attendue d'ici la fin du premier trimestre 2025 et un objectif de montée en puissance à une capacité nominale de 25 millions de livres pour le deuxième semestre 2025. Environ 16 millions de livres de capacité sont déjà contractées, avec des négociations en cours pour la capacité restante.
Arq (NASDAQ: ARQ) hat für das Geschäftsjahr 2024 starke finanzielle Ergebnisse gemeldet, mit einem Umsatzanstieg von 10% im Vergleich zum Vorjahr auf 109,0 Millionen Dollar, was durch einen höheren Durchschnittspreis (ASP) und eine verbesserte Produktmischung bedingt ist. Das Unternehmen erzielte eine Bruttomarge von 36,2%, was einem Anstieg von 410 Basispunkten im Vergleich zu 2023 entspricht und das dritte aufeinanderfolgende Quartal mit positivem bereinigtem EBITDA markiert.
Wichtige Finanzkennzahlen umfassen einen Nettoverlust von (5,1 Millionen Dollar) für das Geschäftsjahr 2024, was eine erhebliche Verbesserung gegenüber (12,2 Millionen Dollar) im Jahr 2023 darstellt, sowie ein bereinigtes EBITDA von 7,7 Millionen Dollar im Vergleich zu einem Verlust von (2,6 Millionen Dollar) im Vorjahr. Das Unternehmen sicherte sich eine ABL-Kreditlinie von 30 Millionen Dollar, was die finanzielle Flexibilität erhöht.
Die Entwicklung der GAC-Anlage des Unternehmens schreitet voran, wobei die erste Produktion bis Ende des ersten Quartals 2025 erwartet wird und eine Steigerung auf eine nennenswerte Kapazität von 25 Millionen Pfund für das zweite Halbjahr 2025 angestrebt wird. Etwa 16 Millionen Pfund Kapazität sind bereits vertraglich gebunden, während Verhandlungen über die verbleibende Kapazität im Gange sind.
- 10% YoY revenue growth to $109.0 million
- Gross margin improved 410 bps to 36.2%
- 7 consecutive quarters of double-digit YoY ASP growth
- Secured $30M ABL facility at lower financing costs
- 16M pounds of 25M capacity already contracted
- Net loss improved from ($12.2M) to ($5.1M)
- Positive Adjusted EBITDA of $7.7M vs ($2.6M) loss
- Q4 2024 net loss of ($1.3M) vs $3.3M profit in Q4 2023
- Capital expenditures exceeded guidance by $15-25M
- Two unplanned outages at Red River plant in Q4
- Cash position decreased from $54.2M to $22.2M
- Total debt increased from $20.9M to $24.8M
Insights
Arq's Q4/FY 2024 results demonstrate a meaningful business turnaround with 10% YoY revenue growth to
While still operating at a net loss of
The Q4 capex overrun is concerning, with expenditures totaling
The imminent GAC production launch represents a pivotal inflection point, with 16 million pounds of the 25 million pound nameplate capacity already contracted. The company expects to reach full capacity in H2 2025, with potential for 10-20% additional production upside. This expansion should drive significant revenue growth and leverage the now-profitable PAC business base.
The market appears to be undervaluing Arq's transformation, evidenced by strong margin improvements and the approaching commercialization of its growth initiatives.
Delivered
Grew FY 2024 gross margins by approximately 410 bps YoY to
Exited 2024 with a stronger financial position, successfully completing a
Development of transformational GAC facility continues; first production anticipated prior to quarter end in line with ramp up to 25 million pounds nameplate capacity in H2 2025
GREENWOOD VILLAGE, Colo., March 05, 2025 (GLOBE NEWSWIRE) -- Arq, Inc. (NASDAQ: ARQ) (the "Company" or "Arq"), a producer of activated carbon and other environmentally efficient carbon products for use in purification and sustainable materials, today announced its financial and operating results for the quarter and year ended December 31, 2024.
Financial Highlights
- Generated revenue of
$109.0 million in FY 2024 ($27.0 million in Q4 2024), up10% over the prior year, driven largely by higher Average Sales Price (“ASP”), and positive changes in product mix - Increased ASP in Q4 2024 by approximately
14% over the prior year period, reflecting the 7th consecutive quarter of double-digit YoY percentage growth in ASP - All powder activated carbon (“PAC”) contracts are now net cash producers following the successful resolution of all negative margin agreements as of December 31, 2024
- Improved FY 2024 gross margin to
36.2% in FY 2024, up approximately 410 basis points vs. FY 2023, driven by higher revenue, continued focus on profitability over volume, and ongoing operational cost management - Gross margin in Q4 2024 of
36.3% vs.49.8% in Q4 2023 – prior quarter included a$4.7 million take-or-pay benefit and other non-recurring items vs.$1.6 million in Q4 2024. Q4 2024 was otherwise largely in-line with last year’s performance despite two brief but unplanned outages at the Red River plant - Reported Net loss of (
$5.1) million in FY 2024, reflecting a significant improvement over the prior year period Net loss of ($12.2) million ; Q4 2024 Net loss of ($1.3) million vs. Net income of$3.3 million in Q4 2023 - Adjusted EBITDA of
$7.7 million in FY 2024 vs. Adjusted EBITDA loss of ($2.6) million in the prior year(1); Adjusted EBITDA of$3.3 million in Q4 2024 vs.$7.2 million in the prior year period(1) - Announced successful closing of a
$30 million asset backed lending (“ABL”) facility, enhancing financial flexibility and reducing our cost of capital - Exited 2024 with cash and restricted cash of
$22.2 million , including$8.7 million restricted cash - Capital expenditures for FY 2024 totaled
$85.2 million , including$80.0 million growth capital expenditures associated with Red River Phase I development
(1) Adjusted EBITDA is a non-GAAP financial measure. Please refer to the paragraph titled “Non-GAAP Measures” for the definitions of non-GAAP financial measures and reconciliations to GAAP measures included in this press release.
Recent Business Highlights
- Construction at Red River facility complete with commissioning ongoing and first production of granular activated carbon (“GAC”) at Red River expected by end of Q1 2025; on target to achieve first deliveries in Q1 2025
- Ramp up of Red River GAC production anticipated to run into H2 2025; expect to achieve full run rate capacity of 25 million pounds in H2 2025
- Approximately 16 million pounds of our 25 million pound per year nameplate capacity contracted
- In negotiations to contract remaining capacity at Red River. Multiple in-situ pilot tests are underway with customers, a required step before finalizing contracts, and in-line with the expected ramp-up schedule
- Potential to increase Red River’s 25 million pound per year nameplate capacity by 10
-20% still targeted; timing of upside production run-rate expected to be defined once nameplate capacity is achieved
Management Commentary
“These results reinforce the durability of our transformation within the foundational PAC business,” said Bob Rasmus, CEO of Arq. “Our 2024 results show a business which has been successfully turned around into a cash flow contributor. The annualized performance of the business has materially improved and is more profitable. With our third consecutive quarter of positive Adjusted EBITDA, the direction of travel is extremely positive. I also believe this is a business which can still be enhanced further.”
Mr. Rasmus continued, “The capex overrun we experienced in Q4 was extremely frustrating, and while we actively look for ways to mitigate this increase, we remain confident that its impact on our long-term profitability and returns profile should be negligible.”
“The imminent start of GAC production is of course a major milestone for us and will represent a huge achievement for the whole team,” added Mr. Rasmus. “While we want to remain cautious on the duration of our ramp-up to nameplate capacity, there should be no doubt we will be trying to get there as quickly as possible. By H2 2025 we believe we will have a solid, sustainably profitable PAC business being complimented by a high growth GAC business, representing our springboard to future growth.”
Full Year 2024 Results
Revenues totaled
Cost of revenues totaled
Gross margin was
Other operating expenses were
Operating loss totaled (
Interest expense was
Income tax benefit was
Net loss was (
Adjusted EBITDA was
Fourth Quarter 2024 Results
Revenue totaled
Costs of revenue totaled
Gross margin reduced to
Selling, general and administrative expenses totaled
Research and development costs totaled
Operating income was
Net loss was (
Adjusted EBITDA was
Capex and Balance Sheet
Capital expenditures totaled
The Company raised approximately
In December 2024, the Company closed a
Initial drawdown from the ABL Facility (
Cash as of December 31, 2024, including
Total debt, inclusive of financing leases, as of December 31, 2024, totaled
Conference Call and Webcast Information
Arq will host its Q4 2024 earnings conference call on March 6, 2025, at 8:30 a.m. ET. The live webcast can be accessed through the Investor Resources section of Arq’s website at www.arq.com. Interested parties may participate in the conference call by registering at https://www.webcast-eqs.com/arq20250306. Alternatively, the live conference call may be accessed by dialing (877) 407-0890 or (201) 389-0918 and referencing Arq. An investor presentation will also be available in the Investor Resources section before the call begins.
A replay of the event will be made available shortly after the event and accessible via the same webcast link referenced above. Alternatively, the replay may be accessed by dialing (877) 660-6853 or (201) 612-7415 and entering Access ID 13751420. The dial-in replay will expire after March 13, 2025.
About Arq
Arq (NASDAQ: ARQ) is a diversified, environmental technology company with products that enable a cleaner and safer planet while actively reducing our environmental impact. As the only vertically integrated producer of activated carbon products in North America, we deliver a reliable domestic supply of innovative, hard-to-source, high-demand products. We apply our extensive expertise to develop groundbreaking solutions to remove harmful chemicals and pollutants from water, land and air. Learn more at: www.arq.com.
Caution on Forward-Looking Statements
This 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. When used in this press release, the words “can,” “will,” "may," “intends,” “expects,” "continuing," “believes,” similar expressions and any other statements that are not historical facts are intended to identify those assertions as forward-looking statements. All statements that address activities, events or developments that the Company intends, expects or believes may occur in the future are forward-looking statements. These forward-looking statements include, but are not limited to, statements or expectations regarding: the anticipating timing of the completion of commissioning of the GAC Facility, ramp-up to full nameplate capacity at our Red River facility, and commercial production of our GAC products; the anticipated effects from fluctuations in the pricing of our AC products; expected supply and demand for our AC products and services, including our GAC products; the seasonal impact on our customers and their demand for our products; the ability to continue to successfully integrate Legacy Arq’s business and recognize the benefits and synergies from the Arq Acquisition; the ability to continue to develop and utilize Legacy Arq’s products and technology and the anticipated timing for bringing such products to market; our ability to access new markets for our GAC and other products; any future plant capacity expansions or site development projects and our ability to finance any such projects; the effectiveness of our technologies and the benefits they provide; the timing of awards of, and work and related testing under, our contracts and agreements and their value; probability of any loss occurring with respect to certain guarantees made by Tinuum Group; the timing and amounts of or changes in future revenue, funding for our business and projects, margins, expenses, earnings, tax rates, cash flows, royalty payment obligations, working capital, liquidity and other financial and accounting measures; the performance of obligations secured by our surety bonds; the amount and timing of future capital expenditures needed to fund our business plan; the impact of capital expenditure overruns on our business; awards of patents designed to protect our proprietary technologies both in the U.S. and other countries; the adoption and scope of regulations to control certain chemicals in drinking water and other environmental concerns and the impact of such regulations on our customers' and our businesses, including any increase or decrease in sales of our AC products resulting from such regulations; the impact of adverse global macroeconomic conditions, including rising interest rates, recession fears and inflationary pressures, and geopolitical events or conflicts; opportunities to effectively provide solutions to our current and future customers to comply with regulations, improve efficiency, lower costs and maintain reliability; and the impact of prices of competing power generation sources such as natural gas and renewable energy on demand for our products. These forward-looking statements included in this press release 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, the timing and scope of new and pending regulations and any legal challenges to or extensions of compliance dates of them; the U.S. government’s failure to promulgate new regulations or enforce existing regulations that benefit our business; changes in laws and regulations, accounting rules, prices, economic conditions and market demand; availability, cost of and demand for alternative energy sources and other technologies and their impact on coal-fired power generation in the U.S.; technical, start up and operational difficulties; competition within the industries in which the Company operates; risks associated with our debt financing; our inability to effectively and efficiently commercialize new products, including our GAC products; our inability to effectively manage commissioning and startup of the GAC facility at our Red River plant; disruptions at any of our facilities, including by natural disasters or extreme weather; risks related to our information technology systems, including the risk of cyberattacks on our networks; failure to protect our intellectual property from infringement or claims that we have infringed on the intellectual property of others; our inability to obtain future financing or financing on terms that are favorable to us; our inability to ramp up our operations to effectively address recent and expected growth in our business; loss of key personnel; ongoing effects of the inflation and macroeconomic uncertainty, including from the new U.S. presidential administration, increased domestic and international tariffs, lingering effects of the pandemic and armed conflicts around the world, and such uncertainty's effect on market demand and input costs; availability of materials and equipment for our business; intellectual property infringement claims from third parties; pending litigation; factors relating to our business strategy, goals and expectations concerning the Arq Acquisition; our ability to maintain relationships with customers, suppliers and others with whom the Company does business and meet supply requirements; our results of operations and business generally; risks related to diverting management's attention from our ongoing business operations; costs related to the ongoing manufacturing of our products, including our GAC products; opportunities for additional sales of our AC products and end-market diversification; the timing and scope of new and pending regulations, executive orders and any legal challenges to or extensions of compliance dates of them; the rate of coal-fired power generation in the U.S.; the timing and cost of any future capital expenditures and the resultant impact to our liquidity and cash flows; and the other risk factors described in our filings with the SEC, including our most recent Annual Report on Form 10-K. 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. In addition to causing our actual results to differ, the factors listed above may cause our intentions to change from those statements of intention set forth in this press release. Such changes in our intentions may also cause our results to differ. We may change our intentions, at any time and without notice, based upon changes in such factors, our assumptions, or otherwise. The forward-looking statements speak only as to the date of this press release, and we disclaim any duty to update such statements unless required by law.
Source: Arq, Inc.
Investor Contact:
Anthony Nathan, Arq
Marc Silverberg, ICR
investors@arq.com
| Arq, Inc. and Subsidiaries Consolidated Balance Sheets | ||||||||
| As of December 31, | ||||||||
| (in thousands, except share data) | 2024 | 2023 | ||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash | $ | 13,516 | $ | 45,361 | ||||
| Receivables, net | 14,876 | 16,192 | ||||||
| Inventories, net | 19,314 | 19,693 | ||||||
| Prepaid expenses and other current assets | 4,650 | 5,215 | ||||||
| Total current assets | 52,356 | 86,461 | ||||||
| Restricted cash, long-term | 8,719 | 8,792 | ||||||
| Property, plant and equipment, net of accumulated depreciation of | 178,564 | 94,649 | ||||||
| Other long-term assets, net | 44,729 | 45,600 | ||||||
| Total Assets | $ | 284,368 | $ | 235,502 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable and accrued expenses | $ | 21,017 | $ | 14,603 | ||||
| Revolving credit facility | 13,828 | — | ||||||
| Current portion of long-term debt obligations | 1,624 | 2,653 | ||||||
| Other current liabilities | 8,184 | 5,792 | ||||||
| Total current liabilities | 44,653 | 23,048 | ||||||
| Long-term debt obligations, net of current portion | 9,370 | 18,274 | ||||||
| Other long-term liabilities | 13,069 | 15,780 | ||||||
| Total Liabilities | 67,092 | 57,102 | ||||||
| Commitments and contingencies | ||||||||
| Stockholders’ equity: | ||||||||
| Preferred stock: par value of | — | — | ||||||
| Common stock: par value of | 47 | 38 | ||||||
| Treasury stock, at cost: 4,618,146 and 4,618,146 shares as of December 31, 2024 and 2023, respectively | (47,692 | ) | (47,692 | ) | ||||
| Additional paid-in capital | 198,487 | 154,511 | ||||||
| Retained earnings | 66,434 | 71,543 | ||||||
| Total Stockholders’ Equity | 217,276 | 178,400 | ||||||
| Total Liabilities and Stockholders’ Equity | $ | 284,368 | $ | 235,502 | ||||
| Arq, Inc. and Subsidiaries Consolidated Statements of Operations | ||||||||||||||||
| Three Months Ended December 31, | Years Ended December 31, | |||||||||||||||
| (in thousands, except per share data) | 2024 | 2023 | 2024 | 2023 | ||||||||||||
| (unaudited) | ||||||||||||||||
| Revenue | $ | 27,040 | $ | 28,104 | $ | 108,959 | $ | 99,183 | ||||||||
| Cost of revenue, exclusive of depreciation and amortization | 17,236 | 14,105 | 69,515 | 67,323 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Selling, general and administrative | 5,960 | 6,495 | 28,695 | 34,069 | ||||||||||||
| Research and development | 709 | 1,169 | 4,050 | 3,314 | ||||||||||||
| Depreciation, amortization, depletion and accretion | 2,504 | 3,267 | 8,594 | 10,543 | ||||||||||||
| Loss (gain) on sale of assets | 218 | (36 | ) | 64 | (2,731 | ) | ||||||||||
| Total operating expenses | 9,391 | 10,895 | 41,403 | 45,195 | ||||||||||||
| Operating income (loss) | 413 | 3,104 | (1,959 | ) | (13,335 | ) | ||||||||||
| Other (expense) income: | ||||||||||||||||
| Earnings from equity method investments | — | 111 | 127 | 1,623 | ||||||||||||
| Interest expense | (831 | ) | (859 | ) | (3,257 | ) | (3,014 | ) | ||||||||
| Loss on extinguishment of debt | (1,422 | ) | — | (1,422 | ) | — | ||||||||||
| Other | 307 | 1,120 | 1,238 | 2,630 | ||||||||||||
| Total other (expense) income | (1,946 | ) | 372 | (3,314 | ) | 1,239 | ||||||||||
| (Loss) income before income taxes | (1,533 | ) | 3,476 | (5,273 | ) | (12,096 | ) | |||||||||
| Income tax (benefit) expense | (194 | ) | 186 | (164 | ) | 153 | ||||||||||
| Net (loss) income | $ | (1,339 | ) | $ | 3,290 | $ | (5,109 | ) | $ | (12,249 | ) | |||||
| (Loss) income per common share: | ||||||||||||||||
| Basic | $ | (0.03 | ) | $ | 0.10 | $ | (0.14 | ) | $ | (0.42 | ) | |||||
| Diluted | $ | (0.03 | ) | $ | 0.10 | $ | (0.14 | ) | $ | (0.42 | ) | |||||
| Weighted-average number of common shares outstanding: | ||||||||||||||||
| Basic | 41,275 | 32,367 | 36,051 | 29,104 | ||||||||||||
| Diluted | 41,275 | 32,952 | 36,051 | 29,104 | ||||||||||||
| Arq, Inc. and Subsidiaries Consolidated Statements of Cash Flows | ||||||||
| Years Ended December 31, | ||||||||
| (in thousands) | 2024 | 2023 | ||||||
| Cash flows from operating activities | ||||||||
| Net loss | $ | (5,109 | ) | $ | (12,249 | ) | ||
| Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||||||||
| Depreciation, amortization, depletion and accretion | 8,594 | 10,543 | ||||||
| Stock-based compensation expense | 2,715 | 2,648 | ||||||
| Operating lease expense | 2,004 | 2,757 | ||||||
| Loss from extinguishment of debt | 1,422 | — | ||||||
| Amortization of debt discount and debt issuance costs | 601 | 546 | ||||||
| Loss (gain) on sale of assets | 64 | (2,731 | ) | |||||
| Earnings from equity method investments | (127 | ) | (1,623 | ) | ||||
| Other non-cash items, net | 37 | (75 | ) | |||||
| Changes in operating assets and liabilities: | ||||||||
| Receivables and related party receivables | 1,316 | (2,264 | ) | |||||
| Prepaid expenses and other assets | 1,166 | 4,777 | ||||||
| Inventories, net | 1,636 | (2,571 | ) | |||||
| Other long-term assets, net | (2,166 | ) | (4,762 | ) | ||||
| Accounts payable and accrued expenses | 216 | (12,061 | ) | |||||
| Other current liabilities | 1,144 | (184 | ) | |||||
| Operating lease liabilities | (1,272 | ) | (168 | ) | ||||
| Other long-term liabilities | (1,764 | ) | 764 | |||||
| Net cash provided by (used in) operating activities | 10,477 | (16,653 | ) | |||||
| Cash flows from investing activities | ||||||||
| Acquisition of property, plant, equipment and intangible assets, net | (85,170 | ) | (27,516 | ) | ||||
| Acquisition of mine development costs | (181 | ) | (2,690 | ) | ||||
| Proceeds from sale of property and equipment | 150 | — | ||||||
| Distributions from equity method investees in excess of cumulative earnings | 127 | 1,623 | ||||||
| Cash and restricted cash acquired in business acquisition | — | 2,225 | ||||||
| Payment for disposal of Marshall Mine, LLC | — | (2,177 | ) | |||||
| Net cash used in investing activities | $ | (85,074 | ) | $ | (28,535 | ) | ||
| Cash flows from financing activities | ||||||||
| Net proceeds from common stock issued in public offering | $ | 26,654 | $ | — | ||||
| Net proceeds from common stock issued in private placement transactions | 14,951 | 15,220 | ||||||
| Borrowings on revolving credit facility | 13,828 | — | ||||||
| Net proceeds from common stock issued to related party | 800 | 1,000 | ||||||
| Principal payments on notes payable | (10,544 | ) | (473 | ) | ||||
| Repurchase of common stock to satisfy tax withholdings | (1,135 | ) | (230 | ) | ||||
| Principal payments on finance lease obligations | (1,022 | ) | (1,130 | ) | ||||
| Payment of debt issuance costs | (633 | ) | — | |||||
| Payment of debt extinguishment costs | (220 | ) | — | |||||
| Net proceeds from CFG Loan, related party, net of discount and issuance costs | — | 8,522 | ||||||
| Net cash provided by financing activities | 42,679 | 22,909 | ||||||
| Decrease in Cash and Restricted Cash | (31,918 | ) | (22,279 | ) | ||||
| Cash and Restricted Cash, beginning of year | 54,153 | 76,432 | ||||||
| Cash and Restricted Cash, end of year | $ | 22,235 | $ | 54,153 | ||||
| Supplemental disclosure of cash flow information: | ||||||||
| Cash paid for interest | $ | 2,017 | $ | 1,727 | ||||
| Cash received for income taxes | $ | (452 | ) | $ | (1,697 | ) | ||
| Supplemental disclosure of non-cash investing and financing activities: | ||||||||
| Change in accrued purchases for property and equipment | $ | 6,198 | $ | 914 | ||||
| Purchase of property and equipment through note payable | $ | 1,004 | $ | — | ||||
| Equity issued as consideration for acquisition of business | $ | — | $ | 31,206 | ||||
| Paid-in-kind dividend on Series A Preferred Stock | $ | — | $ | 157 | ||||
Note on Non-GAAP Financial Measures
To supplement our financial information presented in accordance with U.S. Generally Accepted Accounting Principles ("U.S. GAAP"), we provide certain supplemental financial measures, including EBITDA and Adjusted EBITDA, which are measurements that are not calculated in accordance with U.S. GAAP. EBITDA is defined as earnings before interest, taxes, depreciation and amortization, and Adjusted EBITDA is defined as EBITDA reduced by the non-cash impact of equity earnings from equity method investments and other non-cash gains, increased by cash distributions from equity method investments, other non-cash losses and non-recurring costs and fees. EBITDA and Adjusted EBITDA should be considered in addition to, and not as a substitute for, net income (loss) in accordance with U.S. GAAP as a measure of performance. See below for a reconciliation from net income (loss), the nearest U.S. GAAP financial measure, to EBITDA and Adjusted EBITDA.
We believe that the EBITDA and Adjusted EBITDA measures are less susceptible to variances that affect our operating performance. We include these non-GAAP measures because management uses them in the evaluation of our operating performance, and believe they help to facilitate comparison of operating results between periods. We believe the non-GAAP measures provide useful information to both management and users of the financial statements by excluding certain expenses, gains, and losses which can vary widely across different industries or among companies within the same industry and may not be indicative of core operating results and business outlook.
EBITDA and Adjusted EBITDA:
The following table reconciles net income (loss), our most directly comparable as-reported financial measure calculated in accordance with U.S. GAAP, to EBITDA and Adjusted EBITDA (Adjusted EBITDA loss).
| Arq, Inc. and Subsidiaries Reconciliation of Net income (loss) to EBITDA and Adjusted EBITDA (Adjusted EBITDA loss) (Unaudited) | ||||||||||||||||||||
| Three Months Ended | Years Ended | |||||||||||||||||||
| September 30, | December 31, | December 31, | ||||||||||||||||||
| (in thousands) | 2024 | 2024 | 2023 | 2024 | 2023 | |||||||||||||||
| Net income (loss) | $ | 1,617 | $ | (1,339 | ) | $ | 3,290 | $ | (5,109 | ) | $ | (12,249 | ) | |||||||
| Depreciation, amortization, depletion and accretion | 2,716 | 2,504 | 3,267 | 8,594 | 10,543 | |||||||||||||||
| Amortization of Upfront Customer Consideration | 127 | 127 | 127 | 508 | 508 | |||||||||||||||
| Interest expense, net | 600 | 516 | 346 | 2,154 | 1,168 | |||||||||||||||
| Income tax (benefit) expense | — | (194 | ) | 186 | (164 | ) | 153 | |||||||||||||
| EBITDA | 5,060 | 1,614 | 7,216 | 5,983 | 123 | |||||||||||||||
| Cash distributions from equity method investees | 127 | — | 111 | 127 | 1,623 | |||||||||||||||
| Equity earnings | (127 | ) | — | (111 | ) | (127 | ) | (1,623 | ) | |||||||||||
| Loss on extinguishment of debt | — | 1,422 | — | 1,422 | — | |||||||||||||||
| (Gain) loss on sale of assets | (154 | ) | 218 | — | 64 | (2,695 | ) | |||||||||||||
| Gain on change in estimate, asset retirement obligation | — | — | (37 | ) | — | (37 | ) | |||||||||||||
| Financing costs | 228 | 47 | — | 275 | — | |||||||||||||||
| Adjusted EBITDA (Adjusted EBITDA loss) | $ | 5,134 | $ | 3,301 | $ | 7,179 | $ | 7,744 | $ | (2,609 | ) | |||||||||
FAQ
What was ARQ's revenue growth in FY 2024 and what drove it?
How much production capacity is contracted for ARQ's new GAC facility?
What was ARQ's gross margin improvement in FY 2024?
When will ARQ's new GAC facility begin production and reach full capacity?
How much debt financing did ARQ secure in 2024?
