Environmental Technology Stock News Bite - Arq, Inc. (NASDAQ: ARQ) Gains on Fourth Quarter & Full Year 2023 Results


March 13, 2024 (www.waternewswire.com) Investorideas.com (www.investorideas.com) Environmental Technology Stock News Bites - Arq, Inc. (NASDAQ: ARQ) , a producer of activated carbon and other environmentally efficient carbon products for use in purification and sustainable materials, announced its financial and operating results for the fourth quarter and full year ended December 31, 2023.

Financial Highlights

Achieved positive net income of $3.3 million in Q4 2023, reflecting the first positive net income quarter since Q4 2021.

Increased revenue to $28.1 million in Q4 2023, reflecting growth of 20% over the prior year period, driven by higher average selling prices, positive changes in product mix and $4.7 million of take-or-pay revenue, partially offset by natural gas pricing impacts to volume.

Improved gross margin to 50% in Q4 2023, due to higher revenue, as well as continued focus on profitability over volume, cost management, and take-or-pay revenue.

Achieved Q4 2023 Adjusted EBITDA of $7.2 million, reflecting the second consecutive quarter of positive Adjusted EBITDA (Q3 2023 Adjusted EBITDA of $0.9 million)(1).

Exited 2023 with cash and restricted cash of $54.2 million.

Capex for full year 2024 forecasted to be $55-60 million with Red River Phase 1 capex expected to be $45-50 million. Expected to be funded with cash on hand, cash generation, ongoing cost reduction initiatives, potential customer prepayments for GAC contracts, and a planned refinancing and potential expansion of our term loan.

(1) Adjusted EBITDA is a non-GAAP financial measure. Please refer to the paragraph titled “Non-GAAP Measures” for the definitions of non-GAAP financial measures.

Recent Business Highlights

Completed corporate rebrand and commenced trading under the new Nasdaq ticker "ARQ", reflecting strategic expansion and evolution to a leading North American environmental technology company.

Further optimized Powder Activated Carbon ("PAC") portfolio by prioritizing profitability over volume, managing costs, improving product mix, and eliminating unfavorable contracts. Achieved positive PAC portfolio cash flow in Q4 2023.

Continued development of the Corbin facility to optimize for GAC feedstock at Red River; remains on time and within budget, with commissioning activities beginning imminently and expected to conclude in Q2 2024

Continued strategic expansion of Red River Granular Activated Carbon ("GAC") facility; construction commenced in October 2023 and commissioning targeted for Q4 2024.

Entered into a framework for a definitive supply agreement with LSR Materials to serve the growing European water purification and filtration market, focusing on PFAS ("Forever Chemicals") and micropollutants in wastewater.

"We capped off 2023 with strong momentum and are very pleased with the steps we have taken and continue to take to further improve our foundational PAC business," said Robert Rasmus, CEO of Arq. "We delivered fourth quarter results that clearly evidence the improving profitability of our existing business. We grew revenue by 20%, nearly doubled our gross margins to 50%, generated positive cash flow from our PAC business, and achieved positive net income for the first time in 8 quarters. We recently marked the one-year anniversary of our Arq acquisition by completing a corporate rebrand that reflects our transformation to a leading environmental technology company."

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