Advanced Emissions Solutions Inc (ADES) Reports Marginal Reduction in Net Loss for Q3 2023
Advanced Emissions Solutions Inc (NASDAQ:ADES) sees consumables revenue increase to $29.8 million in Q3 2023 from $28.4 million in the same period last year.
Third quarter consumables gross margin improved to 30.6%, up from 24.1% year-over-year.
Net loss for Q3 2023 slightly decreased to $2.2 million compared to a net loss of $2.4 million in Q3 2022.
Consolidated Adjusted EBITDA turned positive at $0.9 million, a significant improvement from a loss of $0.5 million in the prior year period.
On November 8, 2023, Advanced Emissions Solutions Inc (NASDAQ:ADES), a company specializing in environmental technology for purification and energy transition applications, announced its financial results for the third quarter ended September 30, 2023. The company reported a slight reduction in net loss and an increase in consumables revenue, indicating progress in its strategic initiatives.
Financial Performance Overview
Advanced Emissions Solutions Inc (NASDAQ:ADES) reported a consumables revenue of $29.8 million in the third quarter of 2023, a 5% increase from $28.4 million in the prior year period. This growth was attributed to higher average selling prices and a positive shift in product mix. The company's consumables gross margin also saw a notable improvement, rising to 30.6% from 24.1% in the same period last year.
Despite these gains, the company experienced a net loss of $2.2 million, which is a marginal improvement from a net loss of $2.4 million in the third quarter of 2022. The reduced net loss was primarily due to a smaller operating loss compared to the prior year. Additionally, the third quarter Consolidated Adjusted EBITDA was positive at $0.9 million, a significant improvement from a loss of $0.5 million in the prior year period.
Balance Sheet and Capital Spending
As of September 30, 2023, Advanced Emissions Solutions Inc (NASDAQ:ADES) had cash balances, including restricted cash, totaling $61.3 million, a decrease from $76.4 million as of December 31, 2022. The total debt, inclusive of financing leases, was $21.2 million, up from $4.6 million at the end of the previous year. This increase was primarily due to a $10.0 million term loan associated with the Arq acquisition and the assumption of Arq's loan.
Year-to-date capital expenditures amounted to $17.0 million, compared to $6.2 million in the prior year, reflecting the initial costs of growth capital projects and higher spending associated with the annual turnaround. The company expects to incur between $35.0 to $40.0 million in capital expenditures in 2023, driven by plant expansion and the completion of certain planned projects.
Strategic Developments and Outlook
CEO Robert Rasmus highlighted the company's focus on improving unit economics by optimizing the PAC portfolio, which included eliminating contracts with unfavorable margins and improving product mix. Rasmus also expressed optimism about the demand for granular activated carbon products and the potential acceleration of the expansion plan.
Advanced Emissions Solutions Inc (NASDAQ:ADES) is actively pursuing its strategic plan, including the construction at Red River to produce granular activated carbon. The company's pre-qualification conversations with potential customers indicate strong demand, suggesting a path toward meeting expected capacity with pre-production contracts.
For further details on Advanced Emissions Solutions Inc (NASDAQ:ADES)'s financial performance, please visit the Investor Resources section of ADES's website at www.advancedemissionssolutions.com.
Investors are encouraged to review the full financial statements and accompanying notes, as well as the detailed reconciliation of non-GAAP financial measures to their most directly comparable GAAP measures, to gain a comprehensive understanding of the company's financial performance.
Note: The information provided in this summary is for informational purposes only and is not intended for trading purposes. The summary does not contain all the information necessary to make an informed investment decision, including risks and uncertainties that may affect Advanced Emissions Solutions Inc (NASDAQ:ADES)'s business and financial results. For more detailed information, please refer to the company's filings with the SEC.
Explore the complete 8-K earnings release (here) from Advanced Emissions Solutions Inc for further details.
This article first appeared on GuruFocus.
