ADA-ES, Inc. (NASDAQ:ADES) (“ADA”) today announced financial results for the third quarter ended September 30, 2012.
OVERVIEW OF 2012 THIRD QUARTER RESULTS
- Total revenues increased to $74.4 million from $13.2 million in the third quarter of 2011, primarily due to the operations at seven Refined Coal (“RC”) facilities four of which were leased to third parties and RC sales from the portion of the seven facilities operational during the third quarter that were operated by Clean Coal Solutions, LLC (“Clean Coal”) for its own account.
- Gross margin was $4.0 million, or 5% of revenues, compared to $7.2 million, or 54% of revenues, for the same period in 2011, due to the impact of RC sales, raw coal purchases and operating costs related to the RC facilities operated by Clean Coal for its own account in the 2012 third quarter. Excluding the impact of RC coal sales, raw coal purchases and operating costs from these RC facilities, gross margin in the third quarter of 2012 was 80%.
- Operating loss was $3.3 million, compared to operating income of $3.5 million for the third quarter of 2011 due to approximately $8 million in operating costs related to the RC facilities operated for Clean Coal’s account.
- Pre-tax loss from continuing operations before non-controlling interest was $4.1 million from a loss of $1.6 million in the third quarter of 2011 due to ADA’s share of those same costs, interest expense and royalties.
- Net loss was $3.9 million compared to a restated net loss of $4.6 million in the same period last year.
- Clean Coal generated $16.1 million in tax credits from the operations of RC facilities for its own account, 42.5% of which is allocated to ADA.
- Cash and cash equivalents were $17.5 million at September 30, 2012.
OVERVIEW OF SEGMENTS & OUTLOOK
Dr. Michael D. Durham, President and CEO of ADA, stated, “We are slowly making progress with getting our RC facilities up and operating with an eighth RC facility commencing operations in October. At present, ADA’s Clean Coal joint venture has eight RC facilities in full-time operation, treating coal for 15 boilers that average more than 20 million tons of coal per year combined; four of those facilities are leased and generating rental revenues. We expect that Clean Coal will, by the end of the year, have fully monetized an RC facility it is presently operating for its own account. We are very excited about the opportunities at our Emissions Control (EC) business segment, where we recently announced contracts of activated carbon injection (ACI) and dry sorbent injection (DSI) systems valued at up to $15 million. Sales of ACI and DSI products are expected to generate over $300 million in revenues for ADA over the next three years.”
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