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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Advanced Emissions Solutions Inc | NASDAQ:ADES | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 3.36 | 3.30 | 3.61 | 0 | 01:00:00 |
x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
¨
|
TRANSITION REPORT PURSUANT TO 13 OR 15(d) OF THE EXCHANGE ACT OF 1934
|
Delaware
|
|
27-5472457
|
(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification No.)
|
9135 South Ridgeline Boulevard, Suite 200, Highlands Ranch CO,
|
|
000-54992
|
(Address of principal executive offices)
|
|
(Zip Code)
|
Large accelerated filer
|
|
o
|
|
Accelerated filer
|
|
x
|
|
|
|
|
|||
Non-accelerated filer
|
|
o
|
|
Smaller reporting company
|
|
¨
|
Class
|
|
Outstanding at April 14, 2016
|
Common stock, par value $0.001 per share
|
|
22,011,494
|
|
|
PAGE
|
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
|
|
|
|
|
As of
|
||||||
(in thousands, except share data)
|
|
September 30, 2015
|
|
December 31, 2014
|
||||
ASSETS
|
|
|
|
|
||||
Current assets:
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
8,585
|
|
|
$
|
25,181
|
|
Receivables, net
|
|
9,196
|
|
|
16,594
|
|
||
Receivables, related parties, net
|
|
2,191
|
|
|
1,439
|
|
||
Restricted cash
|
|
727
|
|
|
2,527
|
|
||
Costs in excess of billings on uncompleted contracts
|
|
2,402
|
|
|
6,153
|
|
||
Prepaid expenses and other assets
|
|
3,358
|
|
|
2,535
|
|
||
Total current assets
|
|
26,459
|
|
|
54,429
|
|
||
Restricted cash, long-term
|
|
10,980
|
|
|
8,771
|
|
||
Property and equipment, net of accumulated depreciation of $6,746 and $5,924, respectively
|
|
3,411
|
|
|
4,808
|
|
||
Investment securities, restricted, long-term
|
|
336
|
|
|
336
|
|
||
Cost method investment
|
|
2,776
|
|
|
2,776
|
|
||
Equity method investments
|
|
18,546
|
|
|
19,584
|
|
||
Other assets
|
|
2,797
|
|
|
2,995
|
|
||
Total Assets
|
|
$
|
65,305
|
|
|
$
|
93,699
|
|
LIABILITIES AND STOCKHOLDERS’ DEFICIT
|
|
|
|
|
||||
Current liabilities:
|
|
|
|
|
||||
Accounts payable
|
|
$
|
8,929
|
|
|
$
|
7,514
|
|
Accrued payroll and related liabilities
|
|
6,859
|
|
|
5,158
|
|
||
Current portion of notes payable, related parties
|
|
1,668
|
|
|
1,479
|
|
||
Billings in excess of costs on uncompleted contracts
|
|
16,130
|
|
|
22,518
|
|
||
Settlement and royalty indemnity obligation
|
|
5,275
|
|
|
3,749
|
|
||
Other current liabilities
|
|
8,814
|
|
|
6,739
|
|
||
Total current liabilities
|
|
47,675
|
|
|
47,157
|
|
||
Long-term portion of notes payable, related party
|
|
14,022
|
|
|
14,431
|
|
||
Settlement and royalty indemnification, long-term
|
|
16,218
|
|
|
20,273
|
|
||
Advance deposit, related party
|
|
3,938
|
|
|
6,524
|
|
||
Other long-term liabilities
|
|
6,098
|
|
|
6,011
|
|
||
Total Liabilities
|
|
87,951
|
|
|
94,396
|
|
||
Commitments and contingencies (Note 8)
|
|
|
|
|
||||
Stockholders’ deficit:
|
|
|
|
|
||||
Preferred stock: par value of $.001 and no par value per share, respectively, 50,000,000 shares authorized, none outstanding
|
|
—
|
|
|
—
|
|
||
Common stock: par value of $.001 per share, 100,000,000 shares authorized, 21,964,598 and 21,853,263 shares issued, and 21,801,016 and 21,643,342 shares outstanding at September 30, 2015 and December 31, 2014, respectively
|
|
22
|
|
|
22
|
|
||
Additional paid-in capital
|
|
115,453
|
|
|
110,169
|
|
||
Accumulated deficit
|
|
(138,121
|
)
|
|
(110,888
|
)
|
||
Total stockholders’ deficit
|
|
(22,646
|
)
|
|
(697
|
)
|
||
Total Liabilities and Stockholders’ Deficit
|
|
$
|
65,305
|
|
|
$
|
93,699
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
(
in thousands, except per share data and percentages
)
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Revenues:
|
|
|
|
|
|
|
|
|
||||||||
Equipment sales
|
|
$
|
12,088
|
|
|
$
|
7,496
|
|
|
$
|
47,439
|
|
|
$
|
9,495
|
|
Consulting services
|
|
665
|
|
|
1,499
|
|
|
1,349
|
|
|
3,521
|
|
||||
Chemicals and other
|
|
132
|
|
|
77
|
|
|
749
|
|
|
214
|
|
||||
Total revenues
|
|
12,885
|
|
|
9,072
|
|
|
49,537
|
|
|
13,230
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
|
||||||||
Equipment sales cost of revenue, exclusive of depreciation and amortization
|
|
9,914
|
|
|
5,737
|
|
|
38,662
|
|
|
6,940
|
|
||||
Consulting services cost of revenue, exclusive of depreciation and amortization
|
|
591
|
|
|
704
|
|
|
1,282
|
|
|
1,669
|
|
||||
Chemical and other cost of revenue, exclusive of depreciation and amortization
|
|
105
|
|
|
71
|
|
|
383
|
|
|
108
|
|
||||
Payroll and benefits
|
|
4,445
|
|
|
6,438
|
|
|
19,102
|
|
|
15,294
|
|
||||
Rent and occupancy
|
|
596
|
|
|
667
|
|
|
1,828
|
|
|
1,784
|
|
||||
Legal and professional fees
|
|
3,424
|
|
|
3,560
|
|
|
11,545
|
|
|
7,487
|
|
||||
General and administrative
|
|
1,249
|
|
|
1,428
|
|
|
4,635
|
|
|
3,981
|
|
||||
Research and development, net
|
|
2,022
|
|
|
277
|
|
|
5,133
|
|
|
871
|
|
||||
Depreciation and amortization
|
|
528
|
|
|
469
|
|
|
1,632
|
|
|
1,364
|
|
||||
Total operating expenses
|
|
22,874
|
|
|
19,351
|
|
|
84,202
|
|
|
39,498
|
|
||||
Operating loss
|
|
(9,989
|
)
|
|
(10,279
|
)
|
|
(34,665
|
)
|
|
(26,268
|
)
|
||||
Other income (expense):
|
|
|
|
|
|
|
|
|
||||||||
Earnings (loss) from equity method investments
|
|
(41
|
)
|
|
5,603
|
|
|
5,133
|
|
|
22,019
|
|
||||
Royalties, related party
|
|
3,273
|
|
|
2,275
|
|
|
7,767
|
|
|
4,255
|
|
||||
Interest income
|
|
2
|
|
|
14
|
|
|
20
|
|
|
61
|
|
||||
Interest expense
|
|
(1,778
|
)
|
|
(1,190
|
)
|
|
(5,347
|
)
|
|
(3,202
|
)
|
||||
Other
|
|
(77
|
)
|
|
(9
|
)
|
|
10
|
|
|
—
|
|
||||
Total other income (expense), net
|
|
1,379
|
|
|
6,693
|
|
|
7,583
|
|
|
23,133
|
|
||||
Loss before income tax expense
|
|
(8,610
|
)
|
|
(3,586
|
)
|
|
(27,082
|
)
|
|
(3,135
|
)
|
||||
Income tax expense
|
|
44
|
|
|
113
|
|
|
151
|
|
|
155
|
|
||||
Net loss
|
|
$
|
(8,654
|
)
|
|
$
|
(3,699
|
)
|
|
$
|
(27,233
|
)
|
|
$
|
(3,290
|
)
|
Loss per common share (Note 1):
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
$
|
(0.40
|
)
|
|
$
|
(0.17
|
)
|
|
$
|
(1.24
|
)
|
|
$
|
(0.15
|
)
|
Diluted
|
|
$
|
(0.40
|
)
|
|
$
|
(0.17
|
)
|
|
$
|
(1.24
|
)
|
|
$
|
(0.15
|
)
|
Weighted-average number of common shares outstanding:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
21,687
|
|
|
21,536
|
|
|
21,757
|
|
|
21,522
|
|
||||
Diluted
|
|
21,687
|
|
|
21,536
|
|
|
21,757
|
|
|
21,522
|
|
|
|
Nine Months Ended September 30,
|
||||||
(
in thousands)
|
|
2015
|
|
2014
|
||||
Cash flows from operating activities
|
|
|
|
|
||||
Net loss
|
|
$
|
(27,233
|
)
|
|
$
|
(3,290
|
)
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
|
||||
Depreciation and amortization
|
|
1,632
|
|
|
1,364
|
|
||
Amortization of debt issuance costs
|
|
75
|
|
|
75
|
|
||
Impairment of property and equipment and intangible assets
|
|
2,515
|
|
|
276
|
|
||
Provision for bad debt expense and note receivable
|
|
579
|
|
|
—
|
|
||
Interest costs added to principal balance of notes payable
|
|
946
|
|
|
1,132
|
|
||
Share-based compensation expense
|
|
6,096
|
|
|
3,731
|
|
||
Earnings from equity method investments
|
|
(5,133
|
)
|
|
(22,019
|
)
|
||
Other non-cash items, net
|
|
191
|
|
|
53
|
|
||
Changes in operating assets and liabilities, net of effects of acquired businesses:
|
|
|
|
|
|
|
||
Receivables
|
|
7,579
|
|
|
(2,712
|
)
|
||
Related party receivables
|
|
(752
|
)
|
|
(927
|
)
|
||
Prepaid expenses and other assets
|
|
(1,134
|
)
|
|
(812
|
)
|
||
Costs incurred on uncompleted contracts
|
|
4,719
|
|
|
(44,475
|
)
|
||
Restricted cash
|
|
—
|
|
|
—
|
|
||
Restricted cash, long-term
|
|
1,690
|
|
|
(1,212
|
)
|
||
Other long-term assets
|
|
144
|
|
|
(81
|
)
|
||
Accounts payable
|
|
1,414
|
|
|
3,002
|
|
||
Accrued payroll and related liabilities
|
|
1,161
|
|
|
166
|
|
||
Other current liabilities
|
|
1,624
|
|
|
(929
|
)
|
||
Billings on uncompleted contracts
|
|
(7,256
|
)
|
|
39,736
|
|
||
Advance deposit, related party
|
|
(2,586
|
)
|
|
(1,417
|
)
|
||
Other long-term liabilities
|
|
98
|
|
|
163
|
|
||
Settlement and royalty indemnification obligation
|
|
(2,528
|
)
|
|
(3,914
|
)
|
||
Distributions from equity method investees, return on investment
|
|
2,519
|
|
|
1,259
|
|
||
Net cash used in operating activities
|
|
(13,640
|
)
|
|
(30,831
|
)
|
|
|
Nine Months Ended September 30,
|
||||||
(
in thousands)
|
|
2015
|
|
2014
|
||||
Cash flows from investing activities
|
|
|
|
|
||||
Purchase of investment securities, restricted
|
|
—
|
|
|
105
|
|
||
Maturity of investment securities, restricted
|
|
—
|
|
|
404
|
|
||
Increase in restricted cash
|
|
(2,100
|
)
|
|
(1,243
|
)
|
||
Acquisition of property and equipment
|
|
(437
|
)
|
|
(1,218
|
)
|
||
Advance on note receivable
|
|
(500
|
)
|
|
—
|
|
||
Acquisition of business
|
|
(2,124
|
)
|
|
—
|
|
||
Purchase of and contributions to equity method investees
|
|
(1,083
|
)
|
|
(5,132
|
)
|
||
Distributions from equity method investees in excess of cumulative earnings
|
|
4,730
|
|
|
22,547
|
|
||
Net cash provided by (used in) investing activities
|
|
(1,514
|
)
|
|
15,463
|
|
||
Cash flows from financing activities
|
|
|
|
|
||||
Repayments on notes payable
|
|
(1,166
|
)
|
|
—
|
|
||
Proceeds received upon exercise of stock options
|
|
—
|
|
|
243
|
|
||
Repurchase of shares to satisfy minimum tax withholdings
|
|
(276
|
)
|
|
(1,298
|
)
|
||
Net cash used in financing activities
|
|
(1,442
|
)
|
|
(1,055
|
)
|
||
Increase (Decrease) in Cash and Cash Equivalents
|
|
(16,596
|
)
|
|
(16,423
|
)
|
||
Cash and Cash Equivalents, beginning of period
|
|
25,181
|
|
|
37,890
|
|
||
Cash and Cash Equivalents, end of period
|
|
$
|
8,585
|
|
|
$
|
21,467
|
|
Supplemental disclosures of cash information:
|
|
|
|
|
||||
Cash paid for interest
|
|
$
|
5,335
|
|
|
$
|
1,917
|
|
Cash paid for income taxes
|
|
186
|
|
|
106
|
|
||
Supplemental disclosure of non-cash investing and financing activities:
|
|
|
|
|
||||
Restricted stock award reclassification (equity to liability)
|
|
—
|
|
|
501
|
|
||
Issuance of common stock to settle liabilities
|
|
—
|
|
|
127
|
|
||
Acquisition of equity method investment through note payable
|
|
—
|
|
|
13,301
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
(in thousands, except per share amounts)
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Net loss
|
|
$
|
(8,654
|
)
|
|
$
|
(3,699
|
)
|
|
$
|
(27,233
|
)
|
|
$
|
(3,290
|
)
|
Less: Undistributed loss allocated to participating securities
|
|
(87
|
)
|
|
(52
|
)
|
|
(274
|
)
|
|
(46
|
)
|
||||
Loss attributable to common stockholders
|
|
$
|
(8,567
|
)
|
|
$
|
(3,647
|
)
|
|
$
|
(26,959
|
)
|
|
$
|
(3,244
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic weighted-average common shares outstanding (1)
|
|
21,687
|
|
|
21,536
|
|
|
21,757
|
|
|
21,522
|
|
||||
Add: dilutive effect of equity instruments
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Diluted weighted average shares outstanding
|
|
21,687
|
|
|
21,536
|
|
|
21,757
|
|
|
21,522
|
|
||||
Loss per common share - basic
|
|
$
|
(0.40
|
)
|
|
$
|
(0.17
|
)
|
|
$
|
(1.24
|
)
|
|
$
|
(0.15
|
)
|
Loss per common share - diluted
|
|
$
|
(0.40
|
)
|
|
$
|
(0.17
|
)
|
|
$
|
(1.24
|
)
|
|
$
|
(0.15
|
)
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||
(share data in thousands)
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||
Stock options
|
|
6
|
|
|
70
|
|
|
14
|
|
|
108
|
|
Restricted stock awards
|
|
165
|
|
|
231
|
|
|
171
|
|
|
276
|
|
Performance share units
|
|
169
|
|
|
177
|
|
|
186
|
|
|
188
|
|
Stock appreciation rights
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Total shares excluded from diluted shares outstanding
|
|
340
|
|
|
478
|
|
|
371
|
|
|
572
|
|
|
|
|
|
Pretax Charge
|
|||||||||||||||||||||||
(in thousands, except employee data)
|
|
Approximate Number of Employees
|
|
Refined Coal
|
|
Emission Control - ACI
|
|
Emissions Control - BCSI
|
|
Research & Development
|
|
All Other and Corporate
|
|
Total
|
|||||||||||||
Three Months Ended September 30, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Restructuring charges
|
|
109
|
|
|
$
|
—
|
|
|
$
|
316
|
|
|
$
|
364
|
|
|
$
|
1,937
|
|
|
$
|
116
|
|
|
$
|
2,733
|
|
Total pretax charge, net of reversals
|
|
|
|
$
|
—
|
|
|
$
|
316
|
|
|
$
|
364
|
|
|
$
|
1,937
|
|
|
$
|
116
|
|
|
$
|
2,733
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Nine Months Ended September 30, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Restructuring charges
|
|
154
|
|
|
$
|
—
|
|
|
$
|
2,030
|
|
|
$
|
364
|
|
|
$
|
2,023
|
|
|
$
|
4,358
|
|
|
$
|
8,775
|
|
Changes in estimates
|
|
|
|
—
|
|
|
(10
|
)
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
(12
|
)
|
|||||||
Total pretax charge, net of reversals
|
|
|
|
$
|
—
|
|
|
$
|
2,020
|
|
|
$
|
364
|
|
|
$
|
2,023
|
|
|
$
|
4,356
|
|
|
$
|
8,763
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Three Months Ended September 30, 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Restructuring charges
|
|
5
|
|
|
$
|
—
|
|
|
$
|
408
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,598
|
|
|
$
|
2,006
|
|
Total pretax charge, net of reversals
|
|
|
|
$
|
—
|
|
|
$
|
408
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,598
|
|
|
$
|
2,006
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Nine Months Ended September 30, 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Restructuring charges
|
|
23
|
|
|
$
|
—
|
|
|
$
|
760
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,612
|
|
|
$
|
2,372
|
|
Total pretax charge, net of reversals
|
|
|
|
$
|
—
|
|
|
$
|
760
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,612
|
|
|
$
|
2,372
|
|
(in thousands)
|
|
Employee Severance
|
|
Business Operations Closure
|
|
Total
|
||||||
Remaining accrual as of December 31, 2014
|
|
$
|
1,690
|
|
|
$
|
—
|
|
|
$
|
1,690
|
|
Expense provision (1)
|
|
6,902
|
|
|
1,873
|
|
|
8,775
|
|
|||
Cash payments and other (1)
|
|
(5,502
|
)
|
|
(1,873
|
)
|
|
(7,375
|
)
|
|||
Change in estimates
|
|
(12
|
)
|
|
—
|
|
|
(12
|
)
|
|||
Remaining accrual as of September 30, 2015
|
|
$
|
3,078
|
|
|
$
|
—
|
|
|
$
|
3,078
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
(in thousands)
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Gross profit
|
|
$
|
25,035
|
|
|
$
|
23,075
|
|
|
$
|
80,869
|
|
|
$
|
60,580
|
|
Operating expenses
|
|
5,369
|
|
|
4,856
|
|
|
17,872
|
|
|
14,275
|
|
||||
Income from operations
|
|
19,666
|
|
|
18,219
|
|
|
62,997
|
|
|
46,305
|
|
||||
Other expenses
|
|
(1,464
|
)
|
|
(483
|
)
|
|
(1,794
|
)
|
|
(1,224
|
)
|
||||
Class B preferred return
|
|
(1,463
|
)
|
|
(2,176
|
)
|
|
(4,825
|
)
|
|
(6,759
|
)
|
||||
Loss attributable to noncontrolling interest
|
|
3,698
|
|
|
4,163
|
|
|
6,811
|
|
|
7,164
|
|
||||
Net income available to Class A members
|
|
$
|
20,437
|
|
|
$
|
19,723
|
|
|
$
|
63,189
|
|
|
$
|
45,486
|
|
ADES equity earnings
|
|
$
|
—
|
|
|
$
|
6,226
|
|
|
$
|
4,730
|
|
|
$
|
22,547
|
|
Description
|
|
Date(s)
|
|
Investment balance
|
|
ADES equity earnings (loss)
|
|
Cash distributions
|
|
Cash distributions and equity loss in (excess) of investment balance
|
||||||||
Beginning balance
|
|
12/31/14
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(29,877
|
)
|
ADES proportionate share of income from CCS (1)
|
|
First Quarter
|
|
9,827
|
|
|
9,827
|
|
|
—
|
|
|
—
|
|
||||
Increase of equity loss in excess of investment balance (prior to cash distributions)
|
|
First Quarter
|
|
(9,827
|
)
|
|
(9,827
|
)
|
|
—
|
|
|
9,827
|
|
||||
Cash distributions from CCS
|
|
First Quarter
|
|
(100
|
)
|
|
—
|
|
|
100
|
|
|
—
|
|
||||
Adjustment for current year cash distributions in excess of investment balance
|
|
First Quarter
|
|
100
|
|
|
100
|
|
|
—
|
|
|
(100
|
)
|
||||
Total investment balance, equity earnings (loss) and cash distributions
|
|
3/31/2015
|
|
—
|
|
|
100
|
|
|
100
|
|
|
(20,150
|
)
|
||||
ADES proportionate share of income from CCS (1)
|
|
Second Quarter
|
|
7,825
|
|
|
7,825
|
|
|
—
|
|
|
—
|
|
||||
Increase of equity loss in excess of investment balance (prior to cash distributions)
|
|
Second Quarter
|
|
(7,825
|
)
|
|
(7,825
|
)
|
|
—
|
|
|
7,825
|
|
||||
Cash distributions from CCS
|
|
Second Quarter
|
|
(4,630
|
)
|
|
—
|
|
|
4,630
|
|
|
—
|
|
||||
Adjustment for current year cash distributions in excess of investment balance
|
|
Second Quarter
|
|
4,630
|
|
|
4,630
|
|
|
—
|
|
|
(4,630
|
)
|
||||
Total investment balance, equity earnings (loss) and cash distributions
|
|
6/30/2015
|
|
—
|
|
|
4,630
|
|
|
4,630
|
|
|
(16,955
|
)
|
||||
ADES proportionate share of income from CCS (1)
|
|
Third Quarter
|
|
8,127
|
|
|
8,127
|
|
|
—
|
|
|
—
|
|
||||
Increase of equity loss in excess of investment balance (prior to cash distributions)
|
|
Third Quarter
|
|
(8,127
|
)
|
|
(8,127
|
)
|
|
—
|
|
|
8,127
|
|
||||
Cash distributions from CCS
|
|
Third Quarter
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Adjustment for current year cash distributions in excess of investment balance
|
|
Third Quarter
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total investment balance, equity earnings (loss) and cash distributions
|
|
9/30/2015
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(8,828
|
)
|
Description
|
|
Date(s)
|
|
Investment balance
|
|
ADES equity earnings (loss)
|
|
Cash distributions
|
|
Cash distributions and equity loss in (excess) of investment balance
|
||||||||
Beginning balance
|
|
12/31/2013
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(12,906
|
)
|
ADES proportionate share of income from CCS (1)
|
|
First Quarter
|
|
4,644
|
|
|
4,644
|
|
|
—
|
|
|
—
|
|
||||
Recovery of cumulative distributions and equity losses in excess of investment balance
|
|
First Quarter
|
|
(4,644
|
)
|
|
(4,644
|
)
|
|
—
|
|
|
4,644
|
|
||||
Cash distributions from CCS
|
|
First Quarter
|
|
(6,588
|
)
|
|
—
|
|
|
6,588
|
|
|
—
|
|
||||
Recognition of earnings for cash distributions in excess of investment balance
|
|
First Quarter
|
|
6,588
|
|
|
6,588
|
|
|
—
|
|
|
(6,588
|
)
|
||||
Total investment balance, equity earnings (loss) and cash distributions
|
|
3/31/2014
|
|
—
|
|
|
6,588
|
|
|
6,588
|
|
|
(14,850
|
)
|
||||
ADES proportionate share of income from CCS (1)
|
|
Second Quarter
|
|
5,130
|
|
|
5,130
|
|
|
—
|
|
|
—
|
|
||||
Recovery of cumulative distributions and equity losses in excess of investment balance
|
|
Second Quarter
|
|
(5,130
|
)
|
|
(5,130
|
)
|
|
—
|
|
|
5,130
|
|
||||
Cash distributions from CCS
|
|
Second Quarter
|
|
(9,733
|
)
|
|
—
|
|
|
9,733
|
|
|
—
|
|
||||
Recognition of earnings for cash distributions in excess of investment balance
|
|
Second Quarter
|
|
9,733
|
|
|
9,733
|
|
|
—
|
|
|
(9,733
|
)
|
||||
Total investment balance, equity earnings (loss) and cash distributions
|
|
6/30/2014
|
|
—
|
|
|
9,733
|
|
|
9,733
|
|
|
(19,453
|
)
|
||||
ADES proportionate share of income from CCS (1)
|
|
Third Quarter
|
|
7,805
|
|
|
7,805
|
|
|
—
|
|
|
—
|
|
||||
Recovery of cumulative distributions and equity losses in excess of investment balance
|
|
Third Quarter
|
|
(7,805
|
)
|
|
(7,805
|
)
|
|
—
|
|
|
7,805
|
|
||||
Cash distributions from CCS
|
|
Third Quarter
|
|
(6,226
|
)
|
|
—
|
|
|
6,226
|
|
|
—
|
|
||||
Recognition of earnings for cash distributions in excess of investment balance
|
|
Third Quarter
|
|
6,226
|
|
|
6,226
|
|
|
—
|
|
|
(6,226
|
)
|
||||
Total investment balance, equity earnings (loss) and cash distributions
|
|
9/30/2014
|
|
$
|
—
|
|
|
$
|
6,226
|
|
|
$
|
6,226
|
|
|
$
|
(17,874
|
)
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
(in thousands)
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Gross loss
|
|
$
|
(11,616
|
)
|
|
$
|
(5,247
|
)
|
|
$
|
(31,511
|
)
|
|
$
|
(14,064
|
)
|
Operating expenses
|
|
41,322
|
|
|
25,082
|
|
|
120,269
|
|
|
68,463
|
|
||||
Loss from operations
|
|
(52,938
|
)
|
|
(30,329
|
)
|
|
(151,780
|
)
|
|
(82,527
|
)
|
||||
Other expenses
|
|
(7
|
)
|
|
(34
|
)
|
|
(86
|
)
|
|
(57
|
)
|
||||
Loss attributable to noncontrolling interest
|
|
55,661
|
|
|
32,147
|
|
|
158,926
|
|
|
87,642
|
|
||||
Net income
|
|
$
|
2,716
|
|
|
$
|
1,784
|
|
|
$
|
7,060
|
|
|
$
|
5,058
|
|
ADES equity earnings
|
|
$
|
1,358
|
|
|
$
|
892
|
|
|
$
|
3,530
|
|
|
$
|
2,529
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
(in thousands)
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Capital calls and variable payments
|
|
$
|
850
|
|
|
$
|
1,353
|
|
|
$
|
1,080
|
|
|
$
|
2,736
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
(in thousands)
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Gross loss
|
|
$
|
(2,896
|
)
|
|
$
|
(3,326
|
)
|
|
$
|
(4,876
|
)
|
|
$
|
(5,298
|
)
|
Operating expenses
|
|
590
|
|
|
581
|
|
|
1,567
|
|
|
1,447
|
|
||||
Loss from operations
|
|
(3,486
|
)
|
|
(3,907
|
)
|
|
(6,443
|
)
|
|
(6,745
|
)
|
||||
Other expenses
|
|
(220
|
)
|
|
(265
|
)
|
|
(382
|
)
|
|
(434
|
)
|
||||
Net loss
|
|
$
|
(3,706
|
)
|
|
$
|
(4,172
|
)
|
|
$
|
(6,825
|
)
|
|
$
|
(7,179
|
)
|
ADES equity losses
|
|
$
|
(1,399
|
)
|
|
$
|
(1,515
|
)
|
|
$
|
(3,127
|
)
|
|
$
|
(3,057
|
)
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
(in thousands)
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Earnings from CCS
|
|
$
|
—
|
|
|
$
|
6,226
|
|
|
$
|
4,730
|
|
|
$
|
22,547
|
|
Earnings from CCSS
|
|
1,358
|
|
|
892
|
|
|
3,530
|
|
|
2,529
|
|
||||
Loss from RCM6
|
|
(1,399
|
)
|
|
(1,515
|
)
|
|
(3,127
|
)
|
|
(3,057
|
)
|
||||
Earnings from equity method investments
|
|
$
|
(41
|
)
|
|
$
|
5,603
|
|
|
$
|
5,133
|
|
|
$
|
22,019
|
|
|
|
Nine Months Ended September 30,
|
||||||
(in thousands)
|
|
2015
|
|
2014
|
||||
Distributions from equity method investees, return on investment
|
|
|
|
|
||||
CCSS
|
|
$
|
2,519
|
|
|
$
|
1,259
|
|
|
|
$
|
2,519
|
|
|
$
|
1,259
|
|
Distributions from equity method investees in excess of investment basis
|
|
|
|
|
||||
CCS
|
|
$
|
4,730
|
|
|
$
|
22,547
|
|
|
|
$
|
4,730
|
|
|
$
|
22,547
|
|
|
|
As of
|
||||||
(in thousands)
|
|
September 30,
2015 |
|
December 31,
2014 |
||||
Current portion of long-term borrowings
|
|
|
|
|
||||
RCM6 note payable
|
|
$
|
1,045
|
|
|
$
|
874
|
|
DSI Business Owner note payable
|
|
623
|
|
|
605
|
|
||
Total current portion of long-term borrowings
|
|
1,668
|
|
|
1,479
|
|
||
Long-term borrowings
|
|
|
|
|
||||
RCM6 note payable
|
|
13,373
|
|
|
13,312
|
|
||
DSI Business Owner note payable
|
|
649
|
|
|
1,119
|
|
||
Total Long-term borrowings
|
|
14,022
|
|
|
14,431
|
|
||
Total Borrowings
|
|
$
|
15,690
|
|
|
$
|
15,910
|
|
|
|
As of September 30, 2015
|
|
As of December 31, 2014
|
||||||||||||
(in thousands)
|
|
Carrying Value
|
|
Fair Value
|
|
Carrying Value
|
|
Fair Value
|
||||||||
Financial Instruments:
|
|
|
|
|
|
|
|
|
||||||||
Investment securities:
|
|
|
|
|
|
|
|
|
||||||||
Investment securities, restricted, long-term
|
|
$
|
336
|
|
|
$
|
336
|
|
|
$
|
336
|
|
|
$
|
336
|
|
Cost method investment
|
|
$
|
2,776
|
|
|
$
|
2,776
|
|
|
$
|
2,776
|
|
|
$
|
2,776
|
|
Notes Payable:
|
|
|
|
|
|
|
|
|
||||||||
Current portion of notes payable, related party
|
|
$
|
1,668
|
|
|
$
|
1,514
|
|
|
$
|
1,479
|
|
|
$
|
1,439
|
|
Long-term portion of notes payable, related party
|
|
$
|
14,022
|
|
|
$
|
14,113
|
|
|
$
|
14,431
|
|
|
$
|
14,356
|
|
Highview technology license payable
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
155
|
|
|
$
|
155
|
|
Highview technology license payable, long-term
|
|
$
|
1,334
|
|
|
$
|
1,334
|
|
|
$
|
1,389
|
|
|
$
|
1,389
|
|
Stock appreciation rights, liability-classified equity award
|
|
$
|
536
|
|
|
$
|
536
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
As of September 30, 2015
|
||||||||||||||
|
|
Fair Value Measurement Using
|
||||||||||||||
(in thousands)
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Assets at Fair Value
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
||||||||
Investment securities, restricted, long-term
|
|
$
|
—
|
|
|
$
|
336
|
|
|
$
|
—
|
|
|
$
|
336
|
|
Total assets at fair value
|
|
$
|
—
|
|
|
$
|
336
|
|
|
$
|
—
|
|
|
$
|
336
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
||||||||
Stock appreciation rights, liability-classified equity award
|
|
$
|
—
|
|
|
$
|
536
|
|
|
$
|
—
|
|
|
$
|
536
|
|
Total liabilities at fair value
|
|
$
|
—
|
|
|
$
|
536
|
|
|
$
|
—
|
|
|
$
|
536
|
|
|
|
As of December 31, 2014
|
||||||||||||||
|
|
Fair Value Measurement Using
|
||||||||||||||
(in thousands)
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Assets at Fair Value
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
||||||||
Investment securities, restricted, long-term
|
|
$
|
—
|
|
|
$
|
336
|
|
|
$
|
—
|
|
|
$
|
336
|
|
Total assets at fair value
|
|
$
|
—
|
|
|
$
|
336
|
|
|
$
|
—
|
|
|
$
|
336
|
|
|
|
As of September 30, 2015
|
|
|
||||||||||||||||
|
|
Fair Value Measurement Using
|
|
|
||||||||||||||||
(in thousands)
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Fair Value
|
|
Total Losses
|
||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Impaired note receivable
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(1,000
|
)
|
Total assets at fair value
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(1,000
|
)
|
|
|
As of December 31, 2014
|
|
|
||||||||||||||||
|
|
Fair Value Measurement Using
|
|
|
||||||||||||||||
(in thousands)
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Fair Value
|
|
Total Losses
|
||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Property and equipment
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
424
|
|
|
$
|
424
|
|
|
$
|
(355
|
)
|
Impaired note receivable
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(500
|
)
|
|||||
Total assets at fair value
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
424
|
|
|
$
|
424
|
|
|
$
|
(855
|
)
|
|
|
As of
|
||||||
(in thousands)
|
|
September 30,
2015 |
|
December 31,
2014 |
||||
Settlement and royalty indemnity obligation, short-term
|
|
$
|
5,275
|
|
|
$
|
3,749
|
|
Litigation settlement and royalty indemnity expense, net
|
|
16,218
|
|
|
20,273
|
|
||
Total settlement and royalty indemnity
|
|
$
|
21,493
|
|
|
$
|
24,022
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
(in thousands)
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Consultant expense
|
|
$
|
(16
|
)
|
|
$
|
226
|
|
|
$
|
263
|
|
|
$
|
783
|
|
|
|
As of September 30, 2015
|
||||||||||||||
(in thousands)
|
|
LOC Outstanding
|
|
Restricted Cash
|
|
Restricted cash, long-term
|
|
Investment securities, restricted, long-term
|
||||||||
Contract performance - equipment systems
|
|
$
|
5,556
|
|
|
$
|
727
|
|
|
$
|
4,830
|
|
|
$
|
—
|
|
Royalty Award
|
|
6,150
|
|
|
—
|
|
|
6,150
|
|
|
—
|
|
||||
Other
|
|
328
|
|
|
—
|
|
|
—
|
|
|
336
|
|
||||
Total LOC outstanding
|
|
$
|
12,034
|
|
|
$
|
727
|
|
|
$
|
10,980
|
|
|
$
|
336
|
|
|
|
As of December 31, 2014
|
||||||||||||||
(in thousands)
|
|
LOC Outstanding
|
|
Restricted Cash
|
|
Restricted cash, long-term
|
|
Investment securities, restricted, long-term
|
||||||||
Contract performance - equipment systems
|
|
$
|
7,247
|
|
|
$
|
2,527
|
|
|
$
|
4,721
|
|
|
$
|
—
|
|
Royalty Award
|
|
4,050
|
|
|
—
|
|
|
4,050
|
|
|
—
|
|
||||
Other
|
|
328
|
|
|
—
|
|
|
—
|
|
|
336
|
|
||||
Total LOC outstanding
|
|
$
|
11,625
|
|
|
$
|
2,527
|
|
|
$
|
8,771
|
|
|
$
|
336
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
(in thousands)
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Restricted stock award expense
|
|
$
|
415
|
|
|
$
|
1,202
|
|
|
$
|
2,354
|
|
|
$
|
2,202
|
|
Stock option expense
|
|
46
|
|
|
41
|
|
|
616
|
|
|
72
|
|
||||
PSU expense
|
|
157
|
|
|
743
|
|
|
2,590
|
|
|
1,457
|
|
||||
SAR expense
|
|
19
|
|
|
—
|
|
|
536
|
|
|
—
|
|
||||
Total stock-based compensation expense
|
|
$
|
637
|
|
|
$
|
1,986
|
|
|
$
|
6,096
|
|
|
$
|
3,731
|
|
|
|
As of September 30, 2015
|
|||||
(
in thousands
)
|
|
Unrecognized Compensation Cost
|
|
Expected Weighted Average Period of Recognition (in years)
|
|||
Restricted stock award expense
|
|
$
|
1,510
|
|
|
0.9
|
|
Stock option expense
|
|
290
|
|
|
1.1
|
|
|
PSU expense
|
|
918
|
|
|
1.0
|
|
|
SAR expense
|
|
951
|
|
|
0.5
|
|
|
Total unrecognized stock-based compensation expense
|
|
$
|
3,669
|
|
|
0.9
|
|
Non-vested at (in thousands, except for per share amounts)
|
|
Shares
|
|
Weighted
Average Grant Date Fair Value |
|||
Non-vested at January 1, 2015
|
|
209,921
|
|
|
$
|
13.59
|
|
Granted
|
|
127,943
|
|
|
14.97
|
|
|
Vested
|
|
(157,623
|
)
|
|
17.78
|
|
|
Forfeited
|
|
(16,659
|
)
|
|
17.79
|
|
|
Non-vested at September 30, 2015
|
|
163,582
|
|
|
$
|
10.20
|
|
|
|
Nine Months Ended September 30, 2015
|
|
Stock options granted:
|
|
|
|
Risk-free interest rate
|
|
1.8
|
%
|
Dividend yield
|
|
—
|
%
|
Volatility
|
|
74.5
|
%
|
Expected term (in years)
|
|
5.0
|
|
(in thousands, except for per share amounts)
|
|
Number of
Options Outstanding and Exercisable |
|
Weighted
Average Exercise Price |
|
Aggregate Intrinsic Value
|
|
Weighted
Average Remaining Contractual Term (in years) |
|||||
Options outstanding, January 1, 2015
|
|
74,200
|
|
|
$
|
13.76
|
|
|
|
|
|
||
Options granted
|
|
56,250
|
|
|
$
|
13.87
|
|
|
|
|
|
||
Options exercised
|
|
—
|
|
|
$
|
—
|
|
|
|
|
|
||
Options expired / forfeited
|
|
(24,200
|
)
|
|
$
|
7.59
|
|
|
|
|
|
||
Options outstanding, September 30, 2015
|
|
106,250
|
|
|
$
|
15.22
|
|
|
$
|
—
|
|
|
4.0
|
Options exercisable as of September 30, 2015
|
|
79,581
|
|
|
$
|
14.22
|
|
|
$
|
—
|
|
|
4.2
|
|
|
Nine Months Ended September 30, 2015
|
|
SAR's granted:
|
|
|
|
Risk-free interest rate
|
|
1.8
|
%
|
Dividend yield
|
|
—
|
%
|
Volatility
|
|
74.5
|
%
|
Expected term (in years)
|
|
5.0
|
|
(in thousands, except for per share amounts)
|
|
Number of
Options Outstanding and Exercisable |
|
Weighted
Average Exercise Price |
|
Aggregate Intrinsic Value
|
|
Weighted
Average Remaining Contractual Term (in years) |
||||||
SAR's outstanding January 1, 2015
|
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|||
Granted
|
|
243,750
|
|
|
$
|
13.87
|
|
|
|
|
|
|||
Exercised
|
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|||
Expired / forfeited
|
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|||
SAR's outstanding June 30, 2015
|
|
243,750
|
|
|
$
|
13.87
|
|
|
$
|
—
|
|
|
4.8
|
|
SAR's exercisable as of June 30, 2015
|
|
43,750
|
|
|
$
|
13.87
|
|
|
$
|
—
|
|
|
—
|
|
|
|
Nine Months Ended September 30, 2015
|
|
PSUs granted:
|
|
|
|
Risk-free interest rate
|
|
1.0
|
%
|
Dividend yield
|
|
—
|
%
|
Volatility
|
|
64.3
|
%
|
Performance period (in years)
|
|
3.0
|
|
(in thousands except per share amounts)
|
|
Units
|
|
Weighted
Average Grant Date Fair Value |
|||
Non-vested at January 1, 2015
|
|
142,357
|
|
|
$
|
30.65
|
|
Granted (1)
|
|
69,218
|
|
|
20.10
|
|
|
Vested / Settled (1)
|
|
(13,763
|
)
|
|
30.52
|
|
|
Forfeited / Canceled (1)
|
|
(2,420
|
)
|
|
26.04
|
|
|
Non-vested at September 30, 2015
|
|
195,392
|
|
|
$
|
26.98
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
(in thousands, except for rate)
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Income tax expense
|
|
$
|
44
|
|
|
$
|
113
|
|
|
$
|
151
|
|
|
$
|
155
|
|
Effective tax rate
|
|
(1
|
)%
|
|
(3
|
)%
|
|
(1
|
)%
|
|
(5
|
)%
|
•
|
The accounting policies of the operating segments are the same as those described in the summary of significant accounting policies except as described below.
|
•
|
Segment revenue includes the Company's equity method earnings and losses from the Company's equity method investments. Segment revenue also includes the Company's royalty earnings from CCS.
|
•
|
Segment operating income (loss) includes the Company's equity method earnings and losses from the Company's equity method investments and royalty earnings from CCS (including depreciation and amortization expense). However, segment operating income (loss) excludes
Payroll and benefits
,
Rent and occupancy
,
Legal and professional fees
, and
General and administrative
("Corporate general and administrative expenses") unless otherwise specifically included as the Company does not allocate those amounts between segments.
|
•
|
Segment revenue includes Research and Development reimbursements.
|
•
|
All items not included in operating income are excluded from the segments reporting.
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
(in thousands)
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Revenues:
|
|
|
|
|
|
|
|
|
||||||||
Refined Coal:
|
|
|
|
|
|
|
|
|
||||||||
Earnings in equity method investments
|
|
$
|
(41
|
)
|
|
$
|
5,603
|
|
|
$
|
5,133
|
|
|
$
|
22,019
|
|
Consulting services
|
|
—
|
|
|
160
|
|
|
55
|
|
|
596
|
|
||||
Royalties
|
|
3,273
|
|
|
2,275
|
|
|
7,767
|
|
|
4,255
|
|
||||
|
|
3,232
|
|
|
8,038
|
|
|
12,955
|
|
|
26,870
|
|
||||
Emissions Control - Engineering Technology and Services:
|
|
|
|
|
|
|
|
|
||||||||
Equipment sales
|
|
8,787
|
|
|
7,139
|
|
|
44,046
|
|
|
8,893
|
|
||||
Consulting services
|
|
664
|
|
|
850
|
|
|
1,255
|
|
|
1,856
|
|
||||
Chemical and other
|
|
132
|
|
|
77
|
|
|
749
|
|
|
214
|
|
||||
|
|
9,583
|
|
|
8,066
|
|
|
46,050
|
|
|
10,963
|
|
||||
Emissions Control - Manufacturing:
|
|
|
|
|
|
|
|
|
||||||||
Equipment sales
|
|
3,302
|
|
|
356
|
|
|
3,394
|
|
|
601
|
|
||||
Consulting services
|
|
—
|
|
|
490
|
|
|
38
|
|
|
1,070
|
|
||||
Chemical and other
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
|
|
3,302
|
|
|
846
|
|
|
3,432
|
|
|
1,671
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Research and Development:
|
|
859
|
|
|
612
|
|
|
1,271
|
|
|
1,550
|
|
||||
|
|
859
|
|
|
612
|
|
|
1,271
|
|
|
1,550
|
|
||||
Total segment reporting revenues
|
|
$
|
16,976
|
|
|
$
|
17,562
|
|
|
$
|
63,708
|
|
|
$
|
41,054
|
|
|
|
|
|
|
|
|
|
|
||||||||
Adjustments to reconcile to reported revenues:
|
|
|
|
|
|
|
|
|
||||||||
Refined Coal:
|
|
|
|
|
|
|
|
|
||||||||
Earnings in equity method investments
|
|
$
|
41
|
|
|
$
|
(5,603
|
)
|
|
$
|
(5,133
|
)
|
|
$
|
(22,019
|
)
|
Royalties
|
|
(3,273
|
)
|
|
(2,275
|
)
|
|
(7,767
|
)
|
|
(4,255
|
)
|
||||
|
|
(3,232
|
)
|
|
(7,878
|
)
|
|
(12,900
|
)
|
|
(26,274
|
)
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Research and Development:
|
|
(859
|
)
|
|
(612
|
)
|
|
(1,271
|
)
|
|
(1,550
|
)
|
||||
Total reported revenues
|
|
$
|
12,885
|
|
|
$
|
9,072
|
|
|
$
|
49,537
|
|
|
$
|
13,230
|
|
Segment reporting operating income (loss)
|
|
|
|
|
|
|
|
|
||||||||
Refined Coal
|
|
$
|
1,458
|
|
|
$
|
6,491
|
|
|
$
|
7,294
|
|
|
$
|
22,406
|
|
Emissions Control - Engineering Technology Services
|
|
1,394
|
|
|
(72
|
)
|
|
5,839
|
|
|
(1,997
|
)
|
||||
Emissions Control - Manufacturing
|
|
(2,402
|
)
|
|
(1,539
|
)
|
|
(7,772
|
)
|
|
(3,535
|
)
|
||||
Research and Development
|
|
(2,416
|
)
|
|
(382
|
)
|
|
(6,400
|
)
|
|
(1,181
|
)
|
||||
Total segment operating income (loss)
|
|
$
|
(1,966
|
)
|
|
$
|
4,498
|
|
|
$
|
(1,039
|
)
|
|
$
|
15,693
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
(in thousands)
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Segment income (loss)
|
|
|
|
|
|
|
|
|
||||||||
Total reported segment income (loss)
|
|
$
|
(1,966
|
)
|
|
$
|
4,498
|
|
|
$
|
(1,039
|
)
|
|
$
|
15,693
|
|
Adjustments to reconcile to net loss attributable to Advanced Emissions Solutions, Inc.
|
|
|
|
|
|
|
|
|
||||||||
Corporate payroll and benefits
|
|
(2,341
|
)
|
|
(4,014
|
)
|
|
(11,852
|
)
|
|
(9,581
|
)
|
||||
Corporate rent and occupancy
|
|
(202
|
)
|
|
(185
|
)
|
|
(503
|
)
|
|
(512
|
)
|
||||
Corporate legal and professional fees
|
|
(3,150
|
)
|
|
(2,903
|
)
|
|
(10,514
|
)
|
|
(5,611
|
)
|
||||
Corporate general and administrative
|
|
(740
|
)
|
|
(899
|
)
|
|
(2,731
|
)
|
|
(2,926
|
)
|
||||
Depreciation and amortization
|
|
(143
|
)
|
|
(88
|
)
|
|
(448
|
)
|
|
(259
|
)
|
||||
Interest income
|
|
2
|
|
|
14
|
|
|
20
|
|
|
61
|
|
||||
Other expense
|
|
(70
|
)
|
|
(9
|
)
|
|
(15
|
)
|
|
—
|
|
||||
Income tax expense
|
|
(44
|
)
|
|
(113
|
)
|
|
(151
|
)
|
|
(155
|
)
|
||||
Net loss
|
|
$
|
(8,654
|
)
|
|
$
|
(3,699
|
)
|
|
$
|
(27,233
|
)
|
|
$
|
(3,290
|
)
|
|
|
As of
|
||||||
(in thousands)
|
|
September 30,
2015 |
|
December 31,
2014 |
||||
Refined Coal (1)
|
|
$
|
21,062
|
|
|
$
|
21,322
|
|
Emissions Control - Engineering Technology and Services:
|
|
20,233
|
|
|
34,175
|
|
||
Emissions Control - Manufacturing
|
|
8,291
|
|
|
11,285
|
|
||
Research and Development
|
|
5,225
|
|
|
6,431
|
|
||
All Other and Corporate
|
|
10,494
|
|
|
20,486
|
|
||
Consolidated
|
|
$
|
65,305
|
|
|
$
|
93,699
|
|
•
|
Development and sale of technology to reduce emissions and improve operations of coal-fired boilers used for power generation and industrial processes;
|
•
|
Development and sale of equipment, consulting services, specialty chemicals and other products designed to reduce emissions of mercury, acid gases, metals and other pollutants and the providing of technology services in support of our customers' emissions compliance strategies;
|
•
|
Research and development of technologies and other solutions to advance cleaner energy and to help our customers meet existing and future regulatory and business challenges, including Carbon Dioxide (“CO
2
”) emissions control technologies and technologies designed to reduce other emissions related to power generation or industrial processes;
|
•
|
Through CCS, an unconsolidated entity, reduction of mercury and nitrogen oxide ("NO
X
") emissions at select coal-fired power generators, via the production of Refined Coal. Additionally, benefit from the tax credits generated by the production of RC by retaining the credits or selling or leasing the pertinent RC facilities to tax equity investors. See the separately filed financial statements of CCS and the other related RC entities within the Company’s Annual Report on Form 10-K for the year ended
December 31, 2014
.
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
(in thousands)
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Revenues:
|
|
|
|
|
|
|
|
|
||||||||
Equipment sales
|
|
$
|
12,088
|
|
|
$
|
7,496
|
|
|
$
|
47,439
|
|
|
$
|
9,495
|
|
Consulting services
|
|
665
|
|
|
1,499
|
|
|
1,349
|
|
|
3,521
|
|
||||
Chemicals and other
|
|
132
|
|
|
77
|
|
|
749
|
|
|
214
|
|
||||
Total revenues
|
|
12,885
|
|
|
9,072
|
|
|
49,537
|
|
|
13,230
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
|
||||||||
Equipment sales cost of revenue, exclusive of depreciation and amortization
|
|
9,914
|
|
|
5,737
|
|
|
38,662
|
|
|
6,940
|
|
||||
Consulting services cost of revenue, exclusive of depreciation and amortization
|
|
591
|
|
|
704
|
|
|
1,282
|
|
|
1,669
|
|
||||
Chemical and other cost of revenue, exclusive of depreciation and amortization
|
|
105
|
|
|
71
|
|
|
383
|
|
|
108
|
|
||||
Payroll and benefits
|
|
4,445
|
|
|
6,438
|
|
|
19,102
|
|
|
15,294
|
|
||||
Rent and occupancy
|
|
596
|
|
|
667
|
|
|
1,828
|
|
|
1,784
|
|
||||
Legal and professional fees
|
|
3,424
|
|
|
3,560
|
|
|
11,545
|
|
|
7,487
|
|
||||
General and administrative
|
|
1,249
|
|
|
1,428
|
|
|
4,635
|
|
|
3,981
|
|
||||
Research and development, net
|
|
2,022
|
|
|
277
|
|
|
5,133
|
|
|
871
|
|
||||
Depreciation and amortization
|
|
528
|
|
|
469
|
|
|
1,632
|
|
|
1,364
|
|
||||
Total operating expenses
|
|
22,874
|
|
|
19,351
|
|
|
84,202
|
|
|
39,498
|
|
||||
Operating loss
|
|
(9,989
|
)
|
|
(10,279
|
)
|
|
(34,665
|
)
|
|
(26,268
|
)
|
||||
Other income (expense):
|
|
|
|
|
|
|
|
|
||||||||
Earnings (loss) from equity method investments
|
|
(41
|
)
|
|
5,603
|
|
|
5,133
|
|
|
22,019
|
|
||||
Royalties, related party
|
|
3,273
|
|
|
2,275
|
|
|
7,767
|
|
|
4,255
|
|
||||
Interest income
|
|
2
|
|
|
14
|
|
|
20
|
|
|
61
|
|
||||
Interest expense
|
|
(1,778
|
)
|
|
(1,190
|
)
|
|
(5,347
|
)
|
|
(3,202
|
)
|
||||
Settlement and royalty indemnity expense, net
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Other
|
|
(77
|
)
|
|
(9
|
)
|
|
10
|
|
|
—
|
|
||||
Total other income (expense), net
|
|
1,379
|
|
|
6,693
|
|
|
7,583
|
|
|
23,133
|
|
||||
Loss before income tax expense
|
|
(8,610
|
)
|
|
(3,586
|
)
|
|
(27,082
|
)
|
|
(3,135
|
)
|
||||
Income tax expense
|
|
44
|
|
|
113
|
|
|
151
|
|
|
155
|
|
||||
Net loss
|
|
$
|
(8,654
|
)
|
|
$
|
(3,699
|
)
|
|
$
|
(27,233
|
)
|
|
$
|
(3,290
|
)
|
|
|
Three Months Ended September 30,
|
|
Change
|
|||||||||||
(in thousands, except percentages)
|
|
2015
|
|
2014
|
|
($)
|
|
(%)
|
|||||||
Revenues:
|
|
|
|
|
|
|
|
|
|||||||
Equipment sales
|
|
$
|
12,088
|
|
|
$
|
7,496
|
|
|
$
|
4,592
|
|
|
61
|
%
|
Consulting services
|
|
665
|
|
|
1,499
|
|
|
(834
|
)
|
|
(56
|
)%
|
|||
Chemicals and other
|
|
132
|
|
|
77
|
|
|
55
|
|
|
71
|
%
|
|||
Total revenues
|
|
12,885
|
|
|
9,072
|
|
|
3,813
|
|
|
42
|
%
|
|||
Operating expenses:
|
|
|
|
|
|
|
|
|
|||||||
Equipment sales cost of revenue, exclusive of depreciation and amortization
|
|
9,914
|
|
|
5,737
|
|
|
4,177
|
|
|
73
|
%
|
|||
Consulting services cost of revenue, exclusive of depreciation and amortization
|
|
591
|
|
|
704
|
|
|
(113
|
)
|
|
(16
|
)%
|
|||
Chemical and other cost of revenue, exclusive of depreciation and amortization
|
|
105
|
|
|
71
|
|
|
34
|
|
|
48
|
%
|
|
|
Three Months Ended September 30,
|
|
Change
|
|||||||||||
(in thousands, except percentages)
|
|
2015
|
|
2014
|
|
($)
|
|
(%)
|
|||||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|||||||
Payroll and benefits
|
|
$
|
4,445
|
|
|
$
|
6,438
|
|
|
$
|
(1,993
|
)
|
|
(31
|
)%
|
Rent and occupancy
|
|
596
|
|
|
667
|
|
|
(71
|
)
|
|
(11
|
)%
|
|||
Legal and professional fees
|
|
3,424
|
|
|
3,560
|
|
|
(136
|
)
|
|
(4
|
)%
|
|||
General and administrative
|
|
1,249
|
|
|
1,428
|
|
|
(179
|
)
|
|
(13
|
)%
|
|||
Research and development, net
|
|
2,022
|
|
|
277
|
|
|
1,745
|
|
|
630
|
%
|
|||
Depreciation and amortization
|
|
528
|
|
|
469
|
|
|
59
|
|
|
13
|
%
|
|||
|
|
$
|
12,264
|
|
|
$
|
12,839
|
|
|
$
|
(575
|
)
|
|
(4
|
)%
|
|
|
Three Months Ended September 30,
|
|
Change
|
|||||||||||
(in thousands, except percentages)
|
|
2015
|
|
2014
|
|
($)
|
|
(%)
|
|||||||
Other income (expense):
|
|
|
|
|
|
|
|
|
|||||||
Earnings (loss) from equity method investments
|
|
$
|
(41
|
)
|
|
$
|
5,603
|
|
|
$
|
(5,644
|
)
|
|
(101
|
)%
|
Royalties, related party
|
|
3,273
|
|
|
2,275
|
|
|
998
|
|
|
44
|
%
|
|||
Interest income
|
|
2
|
|
|
14
|
|
|
(12
|
)
|
|
(86
|
)%
|
|||
Interest expense
|
|
(1,778
|
)
|
|
(1,190
|
)
|
|
(588
|
)
|
|
49
|
%
|
|||
Other
|
|
(77
|
)
|
|
(9
|
)
|
|
(68
|
)
|
|
756
|
%
|
|||
Total other income (expense), net
|
|
$
|
1,379
|
|
|
$
|
6,693
|
|
|
$
|
(5,314
|
)
|
|
(79
|
)%
|
|
|
Three Months Ended September 30,
|
||||||
(in thousands)
|
|
2015
|
|
2014
|
||||
Earnings from CCS
|
|
$
|
—
|
|
|
$
|
6,226
|
|
Earnings from CCSS
|
|
1,358
|
|
|
892
|
|
||
Loss from RCM6
|
|
(1,399
|
)
|
|
(1,515
|
)
|
||
Earnings from equity method investments
|
|
$
|
(41
|
)
|
|
$
|
5,603
|
|
|
|
Three Months Ended September 30,
|
||||||
(in thousands)
|
|
2015
|
|
2014
|
||||
Section 45 tax credits earned
|
|
$
|
12,113
|
|
|
$
|
7,595
|
|
|
|
Nine Months Ended September 30,
|
|
Change
|
|||||||||||
(
in thousands, except per share data and percentages
)
|
|
2015
|
|
2014
|
|
($)
|
|
(%)
|
|||||||
Revenues:
|
|
|
|
|
|
|
|
|
|||||||
Equipment sales
|
|
$
|
47,439
|
|
|
$
|
9,495
|
|
|
$
|
37,944
|
|
|
400
|
%
|
Consulting services
|
|
1,349
|
|
|
3,521
|
|
|
(2,172
|
)
|
|
(62
|
)%
|
|||
Chemicals and other
|
|
749
|
|
|
214
|
|
|
535
|
|
|
250
|
%
|
|||
Total revenues
|
|
49,537
|
|
|
13,230
|
|
|
36,307
|
|
|
274
|
%
|
|||
Operating expenses:
|
|
|
|
|
|
|
|
|
|||||||
Equipment sales cost of revenue, exclusive of depreciation and amortization
|
|
38,662
|
|
|
6,940
|
|
|
31,722
|
|
|
457
|
%
|
|||
Consulting services cost of revenue, exclusive of depreciation and amortization
|
|
1,282
|
|
|
1,669
|
|
|
(387
|
)
|
|
(23
|
)%
|
|||
Chemical and other cost of revenue, exclusive of depreciation and amortization
|
|
383
|
|
|
108
|
|
|
275
|
|
|
255
|
%
|
|
|
Nine Months Ended September 30,
|
|
Change
|
|||||||||||
(in thousands, except percentages)
|
|
2015
|
|
2014
|
|
($)
|
|
(%)
|
|||||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|||||||
Payroll and benefits
|
|
$
|
19,102
|
|
|
$
|
15,294
|
|
|
$
|
3,808
|
|
|
25
|
%
|
Rent and occupancy
|
|
1,828
|
|
|
1,784
|
|
|
44
|
|
|
2
|
%
|
|||
Legal and professional fees
|
|
11,545
|
|
|
7,487
|
|
|
4,058
|
|
|
54
|
%
|
|||
General and administrative
|
|
4,635
|
|
|
3,981
|
|
|
654
|
|
|
16
|
%
|
|||
Research and development, net
|
|
5,133
|
|
|
871
|
|
|
4,262
|
|
|
489
|
%
|
|||
Depreciation and amortization
|
|
1,632
|
|
|
1,364
|
|
|
268
|
|
|
20
|
%
|
|||
|
|
$
|
43,875
|
|
|
$
|
30,781
|
|
|
$
|
13,094
|
|
|
|
|
|
|
Nine Months Ended September 30,
|
|
Change
|
|||||||||||
(in thousands, except percentages)
|
|
2015
|
|
2014
|
|
($)
|
|
(%)
|
|||||||
Other income (expense):
|
|
|
|
|
|
|
|
|
|||||||
Earnings (loss) from equity method investments
|
|
$
|
5,133
|
|
|
$
|
22,019
|
|
|
$
|
(16,886
|
)
|
|
(77
|
)%
|
Royalties, related party
|
|
7,767
|
|
|
4,255
|
|
|
3,512
|
|
|
83
|
%
|
|||
Interest income
|
|
20
|
|
|
61
|
|
|
(41
|
)
|
|
(67
|
)%
|
|||
Interest expense
|
|
(5,347
|
)
|
|
(3,202
|
)
|
|
(2,145
|
)
|
|
67
|
%
|
|||
Other
|
|
10
|
|
|
—
|
|
|
10
|
|
|
*
|
|
|||
Total other income (expense), net
|
|
$
|
7,583
|
|
|
$
|
23,133
|
|
|
$
|
(15,550
|
)
|
|
|
|
|
Nine Months Ended September 30,
|
||||||
(in thousands)
|
|
2015
|
|
2014
|
||||
Earnings from CCS
|
|
$
|
4,730
|
|
|
$
|
22,547
|
|
Earnings from CCSS
|
|
3,530
|
|
|
2,529
|
|
||
Loss from RCM6
|
|
(3,127
|
)
|
|
(3,057
|
)
|
||
Earnings from equity method investments
|
|
$
|
5,133
|
|
|
$
|
22,019
|
|
|
|
Nine Months Ended September 30,
|
||||||
(in thousands)
|
|
2015
|
|
2014
|
||||
Section 45 tax credits earned
|
|
$
|
29,502
|
|
|
$
|
18,164
|
|
•
|
The accounting policies of the operating segments are the same as those described in the summary of significant accounting policies except as described below.
|
•
|
Segment revenue includes the Company's equity method earnings and losses from the Company's equity method investments. Segment revenue also includes the Company's royalty earnings from CCS.
|
•
|
Segment operating income (loss) includes the Company's equity method earnings and losses from the Company's equity method investments and royalty earnings from CCS. However, segment operating income (loss) excludes
Payroll and benefits
,
Rent and occupancy
,
Legal and professional fees
, and
General and administrative
("Corporate general and administrative expenses") unless otherwise specifically included as the Company does not allocate those amounts between segments.
|
•
|
Segment revenue includes Research and Development reimbursements.
|
•
|
Items not included in operating income are excluded from segment reporting except for 453A and RCM6 interest expense, which is directly attributable to our RC segment.
|
1.
|
RC - Our RC segment derives its earnings from equity method investments as well as royalty payment streams and other revenues related to enhanced combustion of and reduced emissions of both NO
X
and mercury from the burning of coals. The Company's equity method investments related to the RC segment include CCS, CCSS and RCM6. Segment revenues include the Company's equity method earnings and losses from the Company's equity method investments and royalty earnings from CCS. These earnings are included within the
Earnings (loss) from equity method investments
and
Royalties, related party
line items in the
Condensed Consolidated Statements of Operations
.
|
2.
|
EC - ETS - Our EC - ETS segment includes revenues and related expenses from the sale of ACI equipment systems, consulting services and chemical and other sales related to the reduction of emissions in the coal-fired electric generation process. The fabrication of ACI systems is largely dependent upon third party manufacturers. These amounts are included within the respective revenue and cost of sales line items in the
Condensed Consolidated Statements of Operations
.
|
3.
|
EC - Manufacturing - Our EC - Manufacturing segments includes revenues and related expenses from the sale of DSI equipment systems, consulting services and other sales related to the reduction of emissions in the electric utility industry. We fabricated DSI systems through our subsidiary BCSI through December 2015. These amounts are included within the respective revenue and cost of sales line items in the
Condensed Consolidated Statements of Operations
.
|
4.
|
R&D - Our R&D segment focuses on the research and development of technologies through internal funds, and contracts supported by the DOE and industry participants. The contracts with the DOE take the form of grants or cooperative agreements and are considered financial assistance awards. Segment revenues include the reimbursements received from the DOE and industry participants as well as any revenues from third parties that engage the Company for R&D consulting services. These reimbursements are included as contra expense within the
Research and development, net
line item in the
Condensed Consolidated Statements of Operations
.
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
(in thousands)
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Revenues:
|
|
|
|
|
|
|
|
|
||||||||
Refined Coal:
|
|
|
|
|
|
|
|
|
||||||||
Earnings in equity method investments
|
|
$
|
(41
|
)
|
|
$
|
5,603
|
|
|
$
|
5,133
|
|
|
$
|
22,019
|
|
Consulting services
|
|
—
|
|
|
160
|
|
|
55
|
|
|
596
|
|
||||
Royalties
|
|
3,273
|
|
|
2,275
|
|
|
7,767
|
|
|
4,255
|
|
||||
|
|
3,232
|
|
|
8,038
|
|
|
12,955
|
|
|
26,870
|
|
||||
Emissions Control - Engineering Technology and Services:
|
|
|
|
|
|
|
|
|
||||||||
Equipment sales
|
|
8,787
|
|
|
7,139
|
|
|
44,046
|
|
|
8,893
|
|
||||
Consulting services
|
|
664
|
|
|
850
|
|
|
1,255
|
|
|
1,856
|
|
||||
Chemical and other
|
|
132
|
|
|
77
|
|
|
749
|
|
|
214
|
|
||||
|
|
9,583
|
|
|
8,066
|
|
|
46,050
|
|
|
10,963
|
|
||||
Emissions Control - Manufacturing:
|
|
|
|
|
|
|
|
|
||||||||
Equipment sales
|
|
3,302
|
|
|
356
|
|
|
3,394
|
|
|
601
|
|
||||
Consulting services
|
|
—
|
|
|
490
|
|
|
38
|
|
|
1,070
|
|
||||
|
|
3,302
|
|
|
846
|
|
|
3,432
|
|
|
1,671
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Research and Development:
|
|
859
|
|
|
612
|
|
|
1,271
|
|
|
1,550
|
|
||||
|
|
859
|
|
|
612
|
|
|
1,271
|
|
|
1,550
|
|
||||
Total segment reporting revenues
|
|
$
|
16,976
|
|
|
$
|
17,562
|
|
|
$
|
63,708
|
|
|
$
|
41,054
|
|
Adjustments to reconcile to reported revenues:
|
|
|
|
|
|
|
|
|
||||||||
Refined Coal:
|
|
|
|
|
|
|
|
|
||||||||
Earnings in equity method investments
|
|
$
|
41
|
|
|
$
|
(5,603
|
)
|
|
$
|
(5,133
|
)
|
|
$
|
(22,019
|
)
|
Royalties
|
|
(3,273
|
)
|
|
(2,275
|
)
|
|
(7,767
|
)
|
|
(4,255
|
)
|
||||
|
|
(3,232
|
)
|
|
(7,878
|
)
|
|
(12,900
|
)
|
|
(26,274
|
)
|
||||
Research and Development:
|
|
(859
|
)
|
|
(612
|
)
|
|
(1,271
|
)
|
|
(1,550
|
)
|
||||
Total reported revenues
|
|
$
|
12,885
|
|
|
$
|
9,072
|
|
|
$
|
49,537
|
|
|
$
|
13,230
|
|
Segment reporting operating income (loss)
|
|
|
|
|
|
|
|
|
||||||||
Refined Coal
|
|
$
|
1,458
|
|
|
$
|
6,491
|
|
|
$
|
7,294
|
|
|
$
|
22,406
|
|
Emissions Control - Engineering Technology Services
|
|
1,394
|
|
|
(72
|
)
|
|
5,839
|
|
|
(1,997
|
)
|
||||
Emissions Control - Manufacturing
|
|
(2,402
|
)
|
|
(1,539
|
)
|
|
(7,772
|
)
|
|
(3,535
|
)
|
||||
Research and Development
|
|
(2,416
|
)
|
|
(382
|
)
|
|
(6,400
|
)
|
|
(1,181
|
)
|
||||
Total segment operating income (loss)
|
|
$
|
(1,966
|
)
|
|
$
|
4,498
|
|
|
$
|
(1,039
|
)
|
|
$
|
15,693
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
(in thousands)
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Earnings from CCS
|
|
$
|
—
|
|
|
$
|
6,226
|
|
|
$
|
4,730
|
|
|
$
|
22,547
|
|
Earnings from CCSS
|
|
1,358
|
|
|
892
|
|
|
3,530
|
|
|
2,529
|
|
||||
Loss from RCM6
|
|
(1,399
|
)
|
|
(1,515
|
)
|
|
(3,127
|
)
|
|
(3,057
|
)
|
||||
Earnings from equity method investments
|
|
$
|
(41
|
)
|
|
$
|
5,603
|
|
|
$
|
5,133
|
|
|
$
|
22,019
|
|
•
|
cash on hand;
|
•
|
distributions from CCS and CCSS;
|
•
|
royalty payments from CCS; and
|
•
|
proceeds from the securing of debt facilities, such as the $15 million term loan obtained in October 2015, as described below.
|
|
|
Nine Months Ended September 30,
|
|
|
||||||||
(
in thousands)
|
|
2015
|
|
2014
|
|
Change
|
||||||
Cash provided by (used in):
|
|
|
|
|
|
|
||||||
Operating activities
|
|
$
|
(13,640
|
)
|
|
$
|
(30,831
|
)
|
|
$
|
17,191
|
|
Investing activities
|
|
(1,514
|
)
|
|
15,463
|
|
|
(16,977
|
)
|
|||
Financing activities
|
|
(1,442
|
)
|
|
(1,055
|
)
|
|
(387
|
)
|
|||
Net change in cash and cash equivalents
|
|
$
|
(16,596
|
)
|
|
$
|
(16,423
|
)
|
|
$
|
(173
|
)
|
|
|
Nine Months Ended September 30,
|
||||||
(
in thousands)
|
|
2015
|
|
2014
|
||||
Restricted stock award reclassification (equity to liability)
|
|
$
|
—
|
|
|
$
|
501
|
|
Issuance of common stock to settle liabilities
|
|
—
|
|
|
127
|
|
||
Acquisition of equity method investment through note payable
|
|
—
|
|
|
13,301
|
|
(a)
|
the scope and impact of mercury and other regulations or pollution control requirements, including the impact of the final Mercury and Air Toxics Standards (“MATS”);
|
(b)
|
the production of RC will qualify for IRC Section 45 tax credits in conjunction with the production of RC;
|
(c)
|
expected growth in and potential size of our target markets;
|
(d)
|
expected supply and demand for our products and services;
|
(e)
|
increasing competition in the emission control market;
|
(f)
|
future levels of research and development activities;
|
(g)
|
the effectiveness of our technologies and the benefits they provide;
|
(h)
|
CCS’s ability to profitably sell and/or lease additional RC facilities or recognize the tax benefits from their operations;
|
(i)
|
probability of any loss occurring with respect to CCS Party Guarantees;
|
(j)
|
the timing of awards of, and work and related testing under, our contracts and agreements and their value;
|
(k)
|
timing and amounts of or changes in future revenues, backlog, funding for our business and projects, margins, expenses, earnings, tax rate, cash flow, royalty payments, working capital, liquidity and other financial and accounting measures;
|
(l)
|
ability to refinance the loan under the Credit Agreement or obtain alternative financing;
|
(m)
|
the outcome of current and pending legal proceedings;
|
(n)
|
awards of patents designed to protect our proprietary technologies both in the U.S. and abroad;
|
(o)
|
the materiality of any future adjustments to previously recorded reimbursements as a result of DOE audits and the amount of contributions from the DOE and others towards planned project construction and demonstrations; and
|
(p)
|
whether any legal challenges or Environmental Protection Agency actions will have a material impact on the implementation of the MATS or other regulations and on our ongoing business.
|
(a)
|
coal will continue to be a major source of fuel for electrical generation in the United States;
|
(b)
|
the IRS will allow the production of RC to qualify for IRC Section 45 tax credits;
|
(c)
|
contracts we have with the DOE will continue to be funded at expected levels and we will be chosen to participate in additional contracts of a similar nature;
|
(d)
|
we will continue as a key supplier of equipment, chemicals and services to the coal-fired power generation industry as it seeks to implement reduction of mercury emissions;
|
(e)
|
current environmental laws and regulations requiring reduction of mercury from coal-fired boiler flue gases will not be materially weakened or repealed by courts or legislation in the future;
|
(f)
|
we will be able to meet any performance guaranties we make and continue meet our other obligations under contracts;
|
(g)
|
we will be able to obtain adequate capital and personnel resources to meet our operating needs and to fund anticipated growth and our indemnity obligations;
|
(h)
|
we will be able to establish and retain key business relationships with other companies;
|
(i)
|
orders we anticipate receiving will in fact be received;
|
(j)
|
governmental audits of our costs incurred under DOE contracts will not result in material adjustments to amounts we have previously received under those contracts;
|
(k)
|
we will be able to formulate new chemicals and blends that will be useful to, and accepted by, the coal-fired boiler power generation business;
|
(l)
|
we will be able to effectively compete against others;
|
(m)
|
we will be able to meet any technical requirements of projects we undertake;
|
(n)
|
CCS will be able to sell or lease the remaining RC facilities to third party investors; and
|
(o)
|
we will be able to utilize our portion of the Section 45 tax credits generated by operation of RC facilities for the benefit of the members of CCS.
|
Exhibit No.
|
|
Description
|
|
Form
|
|
File No.
|
|
Incorporated by Reference
Exhibit |
|
Filing Date
|
10.77
|
|
Sixth Amendment and Seventh Waiver to 2013 Loan and Security Agreement by and among ADA-ES, Inc., Advanced Emissions Solutions, Inc., and CoBiz Bank d/b/a Colorado Business Bank in the State of Colorado dated as of September 30, 2015
|
|
10-K
|
|
000-54992
|
|
10.77
|
|
February 29, 2016
|
31.1
|
|
Certification of Chief Executive Officer of Advanced Emissions Solutions, Inc. Pursuant to 17 CFR 240.13a-14(a) or 17 CFR 240.15d-14(a)*
|
|
|
|
|
|
|
|
|
31.2
|
|
Certification of Chief Financial Officer of Advanced Emissions Solutions, Inc. Pursuant to 17 CFR 240.13a-14(a) or 17 CFR 240.15d-14(a)*
|
|
|
|
|
|
|
|
|
32.1
|
|
Certification of Chief Executive Officer and Chief Financial Officer of Advanced Emissions Solutions, Inc. Pursuant to 18 U.S.C Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*
|
|
|
|
|
|
|
|
|
101. INS
|
|
XBRL Instance Document
|
|
|
|
|
|
|
|
|
101.SCH
|
|
XBRL Schema Document
|
|
|
|
|
|
|
|
|
101.CAL
|
|
XBRL Calculation Linkbase Document
|
|
|
|
|
|
|
|
|
101.LAB
|
|
XBRL Label Linkbase Document
|
|
|
|
|
|
|
|
|
101.PRE
|
|
XBRL Presentation Linkbase Document
|
|
|
|
|
|
|
|
|
101.DEF
|
|
Taxonomy Extension Definition Linkbase Document
|
|
|
|
|
|
|
|
|
*
|
– Filed herewith.
|
|
Advanced Emissions Solutions, Inc.
|
|
|
(Registrant)
|
|
|
|
|
|
|
|
April 19, 2016
|
By:
|
/s/ L. Heath Sampson
|
|
|
L. Heath Sampson
|
|
|
President, Chief Executive Officer and Treasurer
|
|
|
(Principal Executive and Accounting Officer)
|
|
|
|
|
|
|
April 19, 2016
|
By:
|
/s/ A. Bradley Gabbard
|
|
|
A. Bradley Gabbard
|
|
|
Chief Financial Officer
|
|
|
(Principal Financial Officer)
|
1 Year Advanced Emissions Solut... Chart |
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