Attached files
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| 8-K - FORM 8-K - ADA-ES INC | d314492d8k.htm |
 Creating a
Future with Creating a Future with
Cleaner Coal
Cleaner Coal
Investor Presentation
March 2012
NASDAQ:ADES
www.adaes.com
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
revenues,
earnings,
operating
income,
cash
flows
and
other
financial
measures;
timelines
for
our
projects;
impact
of
regulations;
future
supply
and
demand;
the
amount
of
refined
coal
capable
of
being
produced
from
refined
coal
facilities;
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,
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;
our
inability
to
ramp
up
operations
to
effectively
address
expected
growth
in
our
target
markets;
additional
risks
related
to
Clean
Coal
Solutions,
LLC
(“Clean
Coal”)
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
monetize
new
CyClean
and
M45
facilities;
our
inability
to
negotiate,
execute
and
close
on
definitive
agreements
related
to
the
M45
TM
technology;
availability
of
raw
materials
and
equipment
for
our
businesses;
loss
of
key
personnel;
intellectual
property
infringement
claims
from
third
parties;
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- |
 ADA provides
low-CAPEX technologies to reduce emissions from coal-fired power plants
Significant revenue growth expected in 2012 from Refined Coal (RC)
–
In 2011, first two RC facilities generated $20 mm in revenue and
> $7 mm
in EBIT for ADA
–
26 new RC facilities placed in service in 2011.
–
Several
of
these
are
expected
to
come
on
line
throughout
2012
to
achieve
an EBIT run rate of approx. $50 mm by year-end
–
Additional RC units expected to be placed in service in 2013 with
opportunity to produce up to $100 million in EBIT annually for 2014
through 2021
In December EPA signed the Mercury and Air Toxics Standard (MATS)
–
Requires 1200 power plants to reduce emissions of mercury and acid gases
–
EPA predicts that this will create a >$9 billion per year market
for
emissions control
ADA is the market leader in mercury control technologies
10 million shares outstanding
Investment Highlights
-3- |
 ADA’s
Emissions Solutions for the Existing Fleet
-4- |
 -5-
ACI System
for Mercury
ADA’s Low CAPEX Approach to Emissions
Control Technology
Emission Control Equipment
(NO
x
, SO
2
, Particulate) |
 Two RC
technologies reduce mercury and NOx emissions and qualify for Section
45 Tax Credits
42.5% stake in Clean Coal Solutions JV
with NexGen & Goldman Sachs
–
2 CyClean facilities produced $20 MM in
revenue, $7 MM in operating income for
ADA in 2011
–
26 new RC systems placed in service in
2011
–
Total RC activities capable of producing
$50-100 MM in EBIT for ADA through
2021
ADA Segment Overview
-6-
Emissions Control
Systems
Technology
ACI systems addressing mercury emissions
for coal-fired power plants
ACI systems installed on 55 boilers to
date—
a ~ 35% market share
MATS also creating demand for DSI
systems for control of acid gases
MATS expected to create $500-600 mm
market for ACI and DSI
Option for 49.9% participation in
Activated Carbon Plant capacity additions
License agreement with Arch
Coal for enhanced coal
technology to reduce mercury
emissions
Developing solid sorbent
capture technology to capture
CO
2
from flue gas in coal-fired
boilers
Refined Coal |
 Refined Coal is
Provided through JV Clean Coal Solutions, LLC |
 Clean Coal
Solutions (CCS) Clean Coal Solutions (CCS) : ADA JV with NexGen Refined Coal
LLC –
Goldman Sachs affiliate bought 15% interest in May 2011 for $60 mm
CCS markets two coal pre-combustion technologies developed by ADA that
qualify
for
IRS
Section
45
RC
tax
credits
of
$6.33
per
ton
of
RC
for
ten
years
–
Reduces mercury emissions by >40% and NOx emissions by >20%
Third-parties lease RC facilities from CCS converting tax credits to revenues
In
2011,
first
two
RC
facilities
generated
$20mm
in
Revenues
and
$7mm
in
EBIT for ADA
-8- |
 CCS Project
Monetization Overview
-9- |
 In December
2010 Congress extended deadline to install new RC facilities until the end of
2011 CCS installed and operated 26 new RC facilities ahead of the year-end
deadline New facilities are expected to begin operating full-time in 2012 and 2013
after: –
Operating permits obtained from each relevant state
–
Contracts negotiated and signed between financial institutions and power
companies
–
Contracts approved by each relevant Public Utility Commission if
necessary
By the end of 2012, new and existing facilities are expected to:
–
Generate >$70 mm in prepaid rent for CCS in 2012
–
Create >$100 mm in revenue per year for ADA through 2021
–
Produce >$50 mm in EBIT per year for ADA through 2021
Some facilities will be operated by CCS to reduce tax burden from RC profits
Additional facilities expected to be put into operation in 2013 that will have
the potential to double RC generated revenues and cash flows
-10-
2011 Refined Coal Facilities |
 Emissions
Control Systems |
 ADA Commercial
ACI Systems > 20 GW Sold for Mercury Control
Plant burns PRB coal or
lignite
Plant burns bituminous coal
Installed/installing ACI systems on 55
boilers at coal-fired power plants
–
Over 35% market share of 159 boilers served
for mercury control from power plants
-12- |
 Emission
Control: Growth Expected in ACI Equipment
•
MATS is expected to create $500+ MM market for ACI
•
Procurement activities have commenced and ADA is
responding to several fleet bids
E
-13- |
 Control of Acid
Gases HCl, SO
2
, SO
3
New environmental regulations
creating demand for control of acid
gases such as HCI, SO
3
, and SO
2
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
ADA awarded first contract for DSI
in 2012
-14- |
 Technology |
 Mercury Control:
License to Arch Coal Designed to enable Arch’s PRB coals to
burn with lower emissions of mercury and other
metals
$1.00-4.00/ton in benefits to customer
Royalty agreement –
payments to ADA of up
to $1.00/ton based on a portion of the
premium paid on Enhanced Coal sales
Initial market will be in states with mercury
regulations already in place
Expanded market expected to develop by
2015 as a result of the MATS
-16- |
 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 at 1 KW pilot plant
–
Phase II -
$19 mm, 51-month contract to scale-up
technology to 1 MW
Advantages over competing technologies:
–
For customer: lower cost and less parasitic energy
–
For ADA: continuous revenues from sale of
proprietary chemical sorbents |
 Financial |
 Summary of
Recent Financial Results 4
th
Qtr. Ended
12/31/11
4
th
Qtr. Ended
12/31/10
Year Ended
12/31/11
Year Ended
12/31/10
Total Revenues
$24.6 MM
$9.0 MM
$53.3 MM
$22.3 MM
Gross Margin
19%
72%
46%
61%
Gross Margin
Excluding Coal
Sales and
Purchases
64%
72%
73%
61%
Operating Income
(Loss)
($69,000)
($5.4) MM
$3.0 MM
($21.0) MM
Net Income (Loss)
(per share)
$13.8 MM
$1.53
($3.1) MM
($0.42)
($19.9) MM
($2.48)
($15.5) MM
($2.09)
-19- |
 Balance Sheet
Highlights As of 12/31/11
As of 12/31/10
Cash & Cash Equivalents
$40.9 MM
$9.7 MM
Cash & Cash Equivalents
per Share
$4.09
$1.29
Stockholders’
Equity
$49.2 MM
$13.4 MM
Shares Outstanding
10.0 MM
7.5 MM
-20- |
 Summary
RC opportunities expected to provide significant growth in
revenues and cash flows in 2012 and 2013
$5 -
$10 per share in cash flows for 2014-2021
MATS compliance requirements are driving expected +$300
million total equipment revenues for ADA for next 3-4 years
Enhanced coal royalty opportunity expected to add additional
growth in 2013 to 2015 and beyond
Developing solid sorbent capture technology to capture CO
2
from flue gas in conventional coal-fired boilers
Available cash on balance sheet and expected cash flows from
RC provides us with the resources to execute on future
opportunities
-21- |
 A Leader in
Clean Coal Technology ©
Copyright 2012 ADA-ES, Inc. All rights reserved.
NASDAQ:ADES |