Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - ADA-ES INC | d8k.htm |
 Creating a
Future with Creating a Future with
Cleaner Coal
Cleaner Coal
Annual Shareholders Meeting
June 7, 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
or
monetize
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- |
 Refined Coal
JV Equity Sale to a
Goldman Sachs Affiliate (“GS”)
Clean Coal Solutions JV sold 15% equity interest to GS for
$60 million cash
–
Implies a $400 million value for the JV
–
ADA received approx. $32 million cash from GS and NexGen
GS has rights to monetize next 12 million tons of RC
–
Monetization rates more economically favorable than lease
transactions on first two units
–
Increased pre-paid rent terms will bring in earlier and increased
cash flows for new systems
–
Eliminates ROFR from prior GS Lease Agreement
Cash infusion enhances our balance sheet and our ability
to meet our obligations and grow the business |
 -10-
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
-11-
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
-12-
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
-13- |
 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
-14- |
 Norit
Arbitration -15- |
 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
-16- |
 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.
-17- |
 Other Data
As of 05/31/11:
–
Market cap: $86 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:
-18-
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 |