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| 8-K - FORM 8-K - ADA-ES INC | d8k.htm |
 Creating a
Future with Creating a Future with
Cleaner Coal
Cleaner Coal
Stifel Nicolaus
Cleantech Conference
May 24, 2011
NASDAQ:ADES
Exhibit 99.1 |
 Please note
that this presentation 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, but will not
necessarily be limited to, statements or expectations regarding the growth in markets for our
products and services; amount and timing of future tax credits, revenues, operating income,
cash flows, legal expenses and other financial measures; timelines for our projects;
scope, timing and impact of current and anticipated regulations and legislation; future
supply and demand; resolution of the Norit arbitration and indemnity obligations and its effects; and related matters.
These statements are based on current expectations, estimates, projections, beliefs and
assumptions of our management. Such statements involve significant 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,
our
inability
to
satisfactorily
resolve
the
Norit arbitration and related indemnity obligations; adverse outcomes in future legal
proceedings; lack of working capital to timely fulfill our obligations; changes in laws
and regulations, government funding, prices, economic conditions and market demand;
timing of regulations and any legal challenges to them; impact of competition; availability,
cost of and demand for alternative energy sources and other technologies; technical,
start-up and operational difficulties; inability to commercialize our technologies
on favorable terms; additional risks related to ADA Carbon Solutions including lack of
continued funding and failure to raise additional financing, demand of payment on loans
and other obligations, inability to obtain permits, our lack of control and further
dilution of
our
interest,
changes
in
the
costs
and
timing
of
full
commercial
operations;
additional
risks
related
to
Clean
Coal
Solutions, LLC including failure of its leased facilities to continue to produce coal which
qualifies for IRS Section 45 tax credits, termination of the leases for such
facilities, decreases in the production of refined coal by the lessee, seasonality and failure to
build new facilities to meet the recently extended Section 45 tax credit
placed-in-service date; availability of raw materials and equipment for our
businesses; loss of key personnel; and other factors discussed in greater detail in our filings with the Securities
and Exchange Commission (SEC). You are cautioned not to place undue reliance on such
statements and to consult our SEC filings for additional risks and uncertainties that
may apply to our business and the ownership of our securities. Our forward-looking
statements are presented as of the date made, and we disclaim any duty to update such
statements unless required by law to do so.
Disclaimer
-2- |
 Leader in Clean
Coal Technology Investment Overview
Primary Market: 1,100+ coal-fired utility boilers in the U.S.
–
Coal provides 50% of electricity in the U.S.
On March 16, 2011 EPA’s Mercury and Air Toxics Standards draft was issued
requiring reduction of Hazardous Air Pollutants (“HAPs”) from new and
existing electricity generating units in the U.S.
–
Rule scheduled to become final November 2011
–
Compliance required in 36 months
Mercury: 80-90% reduction in mercury
–
Refined Coal through JV Clean Coal Solutions
–
Enhanced Coal, licensed for production to Arch Coal
–
Activated Carbon Injection (“ACI”) Equipment
Dry
Sorbent
Injection
(DSI)
systems
for
control
of
acid
gases,
HCl
and
SO
2
7.6 mm shares outstanding
-3- |
 ADA’s
Emissions Solutions for the Existing Fleet
Supply emission control technologies based upon
minimal capital cost for new equipment
–
Doesn’t require 10-20 years of extended plant life to justify large
equipment costs
Low CAPEX alternatives trade variable operating
expenses for fixed capital costs
–
Allows continued operation of the plants to take advantage of
additional economic life
–
Provides continuous revenues for ADA vs. one time equipment sales
Examples for a 250 MW Plant:
–
ACI: $1 mm capital
–
Refined Coal: Controls mercury at no cost to utility
–
Enhanced Coal: No capital equipment; $2-$4 mm per year in
increased fuel costs to the power producer
-4- |
 -5-
ACI System
for Mercury
ADA’s Low CAPEX Approach to Emissions
Control Technology
Emission Control Equipment
(NO
x
, SO
2
, Particulate) |
 Refined Coal
Reduces Mercury Clean Coal Solutions: ADA JV with NexGen Refined Coal LLC
CyClean
–
patented
technology
enhances
combustion
of
PRB
coals in cyclone boilers and reduces mercury and NOx
emissions
Two systems installed at two power plants June, 2010
producing 6+ mm tons of Refined Coal per year
–
Received $9 mm in prepaid rent from monetizer
–
Generated >$16 mm in revenues to ADA in first 3 Quarters of
Operation
–
Expected to produce ~$1.00/share in earnings per year for ADA for the
next nine years (based on 7.6 mm shares)
-6- |
 Refined Coal
Growth Opportunity In December 2010 Congress extended deadline to install new Refined
Coal facilities until the end of 2011.
–
New Air Toxics Rule creating additional demand for Refined Coal.
Currently fabricating 12 additional Refined Coal facilities
–
First 5 facilities scheduled for on-site tests in June through August treating a total of
15 mm tons per year
–
JV has $10 mm line of credit to finance new units
–
Advance payments for pre-paid rent are expected once the facilities are operational
-7- |
 Refined Coal
Growth Opportunity CURRENT PROJECTIONS
(based on 2 existing facilities @ 6 million tons)
POTENTIAL OPPORTUNITY
(based on 20 million tons)
$ in millions
Estimated revenues Estimated
operating income
-8-
$0
$2
$4
$6
$8
$10
$12
$14
$16
$18
$20
$0
$5
$10
$15
$20
$25
$30
$35
$40
$45
$50
$55 |
 -9-
Mercury Control:
License to Arch Coal
Designed to enable Arch’s PRB coals to burn
with lower emissions of mercury and other
metals
$2.00-4.00/ton in benefits to customer
Royalty agreement –
payments to ADA of up
to $1.00/ton based on premium of Enhanced
Coal sales
Air Toxics Rule could create a market for
>100 mm tons/yr of Enhanced PRB
Full-scale tests proving effectiveness |
 ADA Commercial
ACI Systems > 20 GW Sold for Mercury Control
Plant burns PRB coal or
lignite
Plant burns bituminous
coal
-10-
Installed/installing 47 ACI systems at coal-
fired power plants
–
Over 30% market share of 150 systems sold
for mercury control from power plants |
 Emission
Control: Growth Expected in ACI
Equipment
-11-
Expect contracts to begin once the Air Toxics Rule is
finalized in November 2011
E |
 Control of
Acid Gases HCl, SO
2
, SO
3
Air Toxics Rule identifies HCI
and SO
2
as surrogates for acid
gases
ADA provides dry sorbent
injection (DSI) systems as a low-
cost option to wet scrubbers
Equipment costs $2-3 mm for
average size plants
EPA predicts over 200 systems
will be needed by 2015
-12- |
 CO
2
Capture
Developing solid sorbent capture technology to capture
CO
2
from flue gas in conventional coal-fired boilers
DOE and industry funding:
–
Phase I -
$3.8 mm R&D program awarded in Nov. 2008 to
develop technology; successful field tests at 1 KW pilot plant
–
Phase II -
$19 mm, 51-month contract awarded Oct. 2010 to
scale-up technology to 1 MW; key step toward
commercialization
Advantages over competing technologies:
–
For customer: lower cost and less parasitic energy
–
For ADA: continuous revenues from sale of proprietary chemical
sorbents
-13- |
 Norit
Arbitration -14- |
 Summary of
Recent Financial Results Three Months
ended
03/31/11
(1)
Three Months
ended
03/31/10
Year Ended
12/31/10
(2)
Total Revenues
$8.5 mm
$3.9 mm
$22.3 mm
Gross Margin
85%
35%
61%
Operating Income
(Loss)
$1.9 mm
($3.6) mm
($21.0) mm
Net Loss
(per share)
($27.5) mm
($3.63)
($2.8) mm
($0.39)
($15.5) mm
($2.09)
Adjusted Net Income
per share
(3)
$1.0 mm
$0.14
N/A
$5.1 mm
$0.69
(1)
Adjusted
net
income
excludes
$39.5
mm
expense
related
to
interim
award
in
the
Norit
arbitration
as
well
as
associated
$1.9
mm
of
non-routine
legal
expenses,
and
a
non-cash
loss
of
$2.0
mm
from
ADA’s
equity
interest
in
ADA-CS,
and
$14.9
mm
for
the
tax
effect
of
such
items.
3
(2)
Adjusted
net
income
excludes
$24.0
mm
of
non-routine
legal
expenses,
and
a
non-cash
loss
of
$8.2
mm
from
ADA’s
equity
interest
in
ADA-CS,
net
of
tax
on
these
items
of
$11.6
mm.
3
(3) These non-GAAP financial measure should not be considered as a substitute
for any related financial measure under GAAP; however, we believe that
our
presentation
of
this
measure
provides
investors
with
greater
transparency
with
respect
to
our
results
of
operations
and
that
it
is
useful
for
period-to-period comparisons of results.
-15- |
 Balance Sheet
Highlights As of 3/31/11
(1)
As of 12/31/10
Cash & Cash Equivalents
$9.3 mm
$9.7 mm
Working Capital
$3.2 mm
$10.1 mm
Shareholders’
(Deficit)
Equity
($13.6) mm
$13.4 mm
Shares Outstanding
7.6 mm
7.6 mm
(1) As a result of the Interim Award to Norit, ADA accrued $33 mm in long-term
liabilities and $6.5 mm as a current liability.
-16- |
 Other Data
As of 05/20/11:
–
Market cap: $67 mm
–
7.6 mm shares outstanding
–
50%+ held by institutions
–
~11% held by insiders and employees
–
Analyst coverage: JMP Securities, Johnson Rice, Lazard Capital
Markets, Pritchard Capital Partners, Wedbush Securities
Investor Contact:
-17-
ADA-ES, Inc.
Investor Relations Counsel
Michael D. Durham, Ph.D., MBA, President & CEO
The Equity Group, Inc.
Mark H. McKinnies, CFO
Melissa Dixon
(303) 734-1727
(212) 836-9613
www.adaes.com
Mdixon@equityny.com |
 A Leader in
Clean Coal Technology ©
Copyright 2011 ADA-ES, Inc. All rights reserved.
NASDAQ:ADES |