ADA-ES Reports Second Quarter Results; Revenues Increase 34%.LITTLETON Littleton, city (1990 pop. 33,685), seat of Arapahoe co., N central Colo.; platted 1812, inc. 1890. It is a suburb south of Denver in an irrigated farm area. , Colo. -- ADA-ES, Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :ADES (language) ADES - An early system on the IBM 704. Version: ADES II. [Listed in CACM 2(5):16 (May 1959)]. ) today announced financial results for the second quarter and six months ended June June: see month. 30, 2006. See attached tables. For the second quarter, total revenues increased 34% to $3.3 million. Gross profit was up 24% to $1.1 million, but as a result of higher general and administrative expenses related to the Company's M&A activities ($79,000), the implementation of stock option expensing per SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System 123R ($80,000), expenses resulting from additional employees (an $80,000 increase), and higher legal and director fees and expenses incurred to maintain compliance (a $50,000 increase), the Company reported an operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. of $140,000, compared to operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. of $62,000 in the second quarter of 2005. Net income was $44,000 or $0.01 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share compared to $107,000 or $0.02 per diluted share in the same period last year. Net earnings per diluted share were calculated on 19% more shares outstanding due to the successful completion of a 790,000-share private equity placement in October October: see month. 2005. For the six-month period, total revenues rose 50% to $7.0 million. Gross profit increased 38% to $2.5 million, but due to the expenses outlined above, the Company reported operating income of $24,000 compared to $117,000 in the first half of 2005. Net income increased to $282,000 or $0.05 per diluted share from $202,000 or $0.04 per diluted share. Net earnings per diluted share were calculated on 16% more shares outstanding due to the aforementioned a·fore·men·tioned adj. Mentioned previously. n. The one or ones mentioned previously. aforementioned Adjective mentioned before Adj. 1. private equity placement. Dr. Mike Durham Durham, town and district, England Durham, town (1991 pop. 38,105) and district, county seat of Durham, NE England, on the sides of a hill nearly encircled by the Wear River. The town's small factories produce organs and carpets. , President of ADA-ES, stated, "We are pleased with our revenue growth for the quarter, which stemmed stemmed adj. 1. Having the stems removed. 2. Provided with a stem or a specific type of stem. Often used in combination: stemmed goblets; long-stemmed roses. from consistently strong performance in our mercury Our Mercury is a Canadian Indie Rock band. It's members are singer/guitarist Ben Stevenson, drummer John Watson, bassist Joseph Lubinski-Mast, and keyboardist Eric Budd. History emission control The selective and controlled use of electromagnetic, acoustic, or other emitters to optimize command and control capabilities while minimizing, for operations security: a. detection by enemy sensors; b. mutual interference among friendly systems; and/or c. segment, as well as solid results from flue gas Flue gas is gas that exits to the atmosphere via a flue, which is a pipe or channel for conveying exhaust gases from a fireplace, oven, furnace, boiler or steam generator. Quite often, it refers to the combustion exhaust gas produced at power plants. conditioning and other business. Our bottom-line bot·tom-line adj. 1. Concerned exclusively with costs and profits: bottom-line issues. 2. Ruthlessly realistic; pragmatic: a bottom-line political strategy. performance for the quarter was impacted by our decision to invest resources into positioning the Company to maximize the opportunities that we have created in the mercury control market. As we will discuss on our conference call later this morning, we are making progress in exploring the vertical integration of our business to establish an invested role in the production and supply of activated activated a state of being more than usually active. In biological systems this is usually brought about by chemical or electrical means. Commonly said of pharmaceutical and chemical products. carbon (AC), the key chemical used in our mercury control technology. While we are not yet prepared to provide details, we are in the process of finalizing concrete plans for an approach that will help us maximize our future margin power and earnings potential in this rapidly advancing market. This will also allow us to take advantage of our intellectual property. In this regard, recently we were awarded a contract by the Department of Energy to develop an improved manufacturing process for AC. We expect our process, called ADESORB(TM), to be more cost effective and generate greater production volume than existing processes." Dr. Durham continued, "In the year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. , we have achieved significant growth in sales and installations of AC injection systems for mercury emission control. In the second quarter, we were awarded a contract to supply a mercury emission control system for a new power plant being built in Arkansas Arkansas, river, United States Arkansas (ärkăn`zəs, är`kənsô'), river, c.1,450 mi (2,330 km) long, rising in the Rocky Mts., central Colo. . This system, which we anticipate delivering during the fourth quarter of 2007, brings our total to seven awarded in 2006 to date. We are enthusiastic about the large number of requests for price quotations that we are receiving for mercury emission control and continue to expect additional contracts to be granted this year. "We have also made significant progress in our development of a Refined Coal product that we expect to meet the criteria for Section 45 Tax Credits. In the second quarter, we completed our second full-scale full-scale adj. 1. Of actual or full size; not reduced: a full-scale model. 2. Employing all resources; not limited or partial: test of the technology with promising results on both NOx and mercury. In addition, we signed a Letter of Intent with NexGen Resources Corporation to form a 50/50 Joint Venture. NexGen provides strategic expertise and resources for marketing and managing coal-based tax credits. The $5 million that we expect NexGen to pay ADA-ES over the next two and a half years for exclusive rights to participate in the JV is anticipated to contribute significantly to our revenues and earnings during that time. With expected additional successful demonstrations of the technology and favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. rulings from the IRS An abbreviation for the Internal Revenue Service, a federal agency charged with the responsibility of administering and enforcing internal revenue laws. , we aim to be in position to market the technology with a goal of capturing 30% of the potential application market for our technology during the 2009 - 2019 tax credit time-frame. This market share could potentially produce revenues to the JV of approximately $9 per ton on sales of up to 20 million tons per year. Dr. Durham concluded, "We now expect to achieve 30% revenue growth in 2006, slightly lower than our original forecast of 35%, due to a slight shift in the timing for equipment deliveries and for conducting certain projects. We remain optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op about the Company's market position and prospects, and look forward to reporting on ADA-ES' continued development." Conference Call Management will conduct a conference call on Monday, August 7, 2006 at 11:00 a.m. ET to discuss the financial results and recent developments. Interested parties may participate in the call by dialing 706-679-3200 please call in 10 minutes before the call is scheduled to begin, and ask for the ADES call (conference ID # 3544116). The conference call will also be broadcast live over the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the via the Investor Information section of ADA-ES' website at www.adaes.com. To listen to the live call please go to the website at least 15 minutes early to register, download To receive a file transmitted over a network. In any communications session, "download" means receive, and "upload" means send. The download/upload often implies a big/little scenario, in which data is being downloaded from the "big" server into the "little" user's computer. and install any necessary audio software. If you are unable to listen live, the conference call will be archived on the Company's web site. About ADA-ES Headquartered in Littleton, Colorado The City of Littleton is a home rule municipality located in the Denver Metropolitan Area of the State of Colorado. As of 2005, the city is estimated to have a total population of 40,396.[1] Littleton is the 17th most populous city in the State of Colorado. , ADA-ES, Inc. develops and implements proprietary environmental technology and specialty chemicals A Specialty chemical is a chemical produced for a specialized use. They are produced in lower volume than bulk chemicals, of which petrochemicals, made from oil feedstocks, are the most common. However, both are produced in a chemical plant. that mitigate mit·i·gate v. To moderate in force or intensity. mit  i·ga tion n. the environmental impact from electric power and
industrial companies while reducing operating costs operating costs npl → gastos mpl operacionales .
This press release and the referenced conference call contain forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, which provide a "safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. " for such statements in certain circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or . These statements include the Company's expectations regarding future revenues or other financial measures, anticipated projects and new contracts, anticipated growth in the market and similar items. Such statements involve significant 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 changing economic conditions and market demand for ADA-ES' products and services, changes in technology, failure to satisfy performance guarantees, federal funding, laws or regulations, results of demonstrations of the Company's and other licensed technologies, operational difficulties, availability of skilled personnel, and other factors discussed in the Company's filings with the U.S. Securities and Exchange Commission.
ADA-ES, Inc. and Subsidiary
Condensed Consolidated Statements of Operations
(unaudited)
(amounts in thousands, except shares and per share amounts)
Three Months Ended Six Months Ended
June 30, June 30,
-------------------- --------------------
2006 2005 2006 2005
--------- --------- --------- ---------
REVENUE:
Mercury emission control $ 2,635 $ 1,952 $ 5,755 $ 3,559
Flue gas conditioning
and other 671 522 1,200 1,087
--------- --------- --------- ---------
Total net revenues 3,306 2,474 6,955 4,646
COST OF REVENUES
Mercury emission control 1,734 1,334 3,753 2,346
Flue gas conditioning
and other 428 216 680 469
--------- --------- --------- ---------
Total cost of revenues 2,162 1,550 4,433 2,815
--------- --------- --------- ---------
GROSS MARGIN 1,144 924 2,522 1,831
OTHER COSTS AND EXPENSES:
General and administrative 910 634 1,762 1,186
Research and development 310 188 614 446
Depreciation and
amortization 64 40 122 82
--------- --------- --------- ---------
Total expenses 1,284 862 2,498 1,714
--------- --------- --------- ---------
OPERATING INCOME (LOSS) (140) 62 24 117
OTHER INCOME (EXPENSE):
Interest and other expense - (1) - (2)
Interest and other income 194 63 388 133
--------- --------- --------- ---------
Total other income 194 62 388 131
--------- --------- --------- ---------
INCOME BEFORE INCOME TAX
PROVISION 54 124 412 248
DEFERRED INCOME TAX
PROVISION (10) (17) (130) (46)
--------- --------- --------- ---------
NET INCOME 44 107 282 202
UNREALIZED GAINS AND
(LOSSES) ON CERTAIN
INVESTMENTS IN DEBT AND
EQUITY SECURITIES, net of
tax (31) 27 (14) 9
--------- --------- --------- ---------
COMPREHENSIVE INCOME $ 13 $ 134 $ 268 $ 211
========= ========= ========= =========
NET INCOME PER COMMON SHARE
- BASIC AND DILUTED $ .01 $ .02 $ .05 $ .04
========= ========= ========= =========
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING 5,624 4,822 5,620 4,820
========= ========= ========= =========
WEIGHTED AVERAGE DILUTED
COMMON SHARES OUTSTANDING 5,875 4,939 5,818 4,997
========= ========= ========= =========
See notes accompanying ADA-ES' consolidated financial statements in
its Form 10-Q for June 30, 2006.
ADA-ES, Inc. and Subsidiary
Condensed Consolidated Balance Sheets
(unaudited)
(amounts in thousands)
June 30, December
2006 31, 2005
---------- ----------
CURRENT ASSETS:
Cash and cash equivalents $ 15,066 $ 14,026
Trade receivables, net of allowance for
doubtful accounts of $4 2,906 3,014
Investments in securities 2,084 2,515
Prepaid expenses and other 931 283
---------- ----------
Total current assets 20,987 19,838
---------- ----------
PROPERTY AND EQUIPMENT, at cost 1,998 1,663
Less accumulated depreciation and amortization (1,128) (1,013)
---------- ----------
Net property and equipment 870 650
---------- ----------
GOODWILL, net of $1,556 in amortization 2,024 2,024
INTANGIBLE ASSETS, net of $50 and $44,
respectively, in amortization 180 156
INVESTMENTS IN SECURITIES 5,392 5,663
OTHER ASSETS 279 385
---------- ----------
TOTAL ASSETS $ 29,732 $ 28,716
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES:
Accounts payable $ 1,403 $ 1,706
Accrued payroll and related liabilities 477 516
Accrued expenses 601 138
Deferred revenue 659 460
---------- ----------
Total current liabilities 3,140 2,820
---------- ----------
LONG-TERM LIABILITIES:
Deferred warranty and other 82 40
---------- ----------
Total liabilities 3,222 2,860
---------- ----------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Preferred stock; 50,000,000 shares
authorized, none outstanding - -
Common stock; no par value, 50,000,000 shares
authorized, 5,626,893 and 5,610,267 shares
issued and outstanding, respectively 26,704 26,318
Accumulated other comprehensive income 19 33
Accumulated deficit (213) (495)
---------- ----------
Total stockholders' equity 26,510 25,856
---------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 29,732 $ 28,716
========== ==========
See notes accompanying ADA-ES' consolidated financial statements in
its Form 10-Q for June 30, 2006.
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