Arq (ADES) Q4 2024 Earnings Call March 06, 2025 02:44 PM ET Company Participants Anthony Nathan - Investor Relations & Corporate RelationsRobert Rasmus - President and Chief Executive OfficerStacia Hansen - Chief Accounting Officer Conference Call Participants Gerard Sweeney - Managing Director & Senior Research AnalystGeorge Gianarikas - Managing Director and Senior AnalystPeter Gastreich - Managing Director - Energy and Sustainability AnalystTim Moore - Managing Director, Senior Research Analyst Operator ...

Revenue and Growth - Total revenue for the year ended December 31, 2024, was $108,959,000, representing a 10% increase from $99,183,000 in 2023[193]. - The increase in revenue was primarily driven by a favorable product mix contributing approximately $6.9 million and improved pricing adding about $4.9 million, partially offset by a $2.2 million decrease due to lower volumes sold[194]. Expenses and Costs - Operating expenses decreased by 8% from $45,195,000 in 2023 to $41,403,000 in 2024, with significant reductions in selling, general and administrative costs by 16%[199]. - Research and development expenses increased by 22% from $3,314,000 in 2023 to $4,050,000 in 2024, primarily due to increased payroll costs and product qualification testing[199]. - The gross margin for consumables, exclusive of depreciation and amortization, improved due to increased pricing, despite higher manufacturing costs[195]. Investments and Acquisitions - The company acquired 100% of the equity interests of Arq Limited subsidiaries in February 2023 to enhance access to U.S. bituminous coal feedstock and advanced GAC products[179]. - Earnings from equity method investments significantly decreased by 92% from $1,623,000 in 2023 to $127,000 in 2024[207]. - Earnings from equity method investments decreased by 92% from $1,623,000 in 2023 to $127,000 in 2024, primarily due to the wind-down of Tinuum Group and Tinuum Services[208]. Cash Flow and Liquidity - Cash and restricted cash decreased from $54.2 million in 2023 to $22.2 million in 2024, a decrease of $31.9 million[227]. - Cash flows from operating activities improved to $10.5 million in 2024 from a cash outflow of $16.7 million in 2023, driven by a decrease in net loss and a net increase in working capital[228]. - Cash flows used in investing activities increased significantly to $85.1 million in 2024 from $28.5 million in 2023, mainly due to capital expenditures for the Red River Plant expansion[229]. - Cash flows from financing activities increased by $19.8 million in 2024, primarily due to proceeds from a public offering totaling $26.7 million[230]. - The company expects sufficient liquidity to fund operations for the next 12 months based on current cash levels and borrowing availability[232]. Tax and Debt - The effective tax rate for 2024 was 3%, with a reported income tax benefit of $0.2 million[212]. - The loss on extinguishment of debt increased due to the write-off of deferred financing costs associated with the termination of the CFG Loan[210]. - As of December 31, 2024, the company had a valuation allowance of $101.6 million on deferred tax assets, up from $98.8 million in 2023[216]. Capital Expenditures and Projects - The company is targeting the completion of the Red River Plant expansion in Q1 2025, incurring substantial capital expenditures exceeding initial forecasts[233]. - Capital expenditures for 2025 will primarily focus on the Red River Project, contingent on environmental permit approvals and project progression[234]. Obligations and Liabilities - As of December 31, 2024, the company had outstanding surety bonds totaling $11.1 million, with restricted cash of $8.5 million held as collateral[235]. - Contractual obligations as of December 31, 2024, total $29.9 million, with $5.2 million due within one year[239]. - The company’s asset retirement obligation related to the Five Forks Mine is recorded at $4.5 million as of December 31, 2024[239]. - Outstanding borrowings under the Revolving Credit Facility were $13.8 million as of December 31, 2024[239]. Accounting and Financial Reporting - The company applies the acquisition method for business combinations, requiring significant estimates and assumptions regarding fair values[242]. - Reclamation costs related to asset retirement obligations are allocated to expense over the life of the related mine assets[247]. - The company recognizes deferred tax assets based on the likelihood of realization, considering future taxable income and tax-planning strategies[250]. - Recent accounting standards and their implications are discussed in the consolidated financial statements[251]. Company Changes - The company changed its name to Arq, Inc. in February 2024, with its common stock trading on the Nasdaq Global Market under the ticker symbol "ARQ"[180]. - The company anticipates using Arq Powder as a feedstock for high-quality GAC products by the end of Q1 2025, aiming for a lower carbon footprint compared to competitors[179].

Capital Expenditure and Project Updates - Arq, Inc. announced preliminary fiscal year 2024 capital expenditure results related to the granular activated carbon (GAC) expansion project at the Red River facility[4]. - The preliminary estimates are not audited and may be subject to material adjustments[5]. - The company is progressing on customer engagement and has commenced certain legal proceedings related to the GAC expansion project[6]. - Forward-looking statements include expectations regarding costs and timing for capital improvements and anticipated production capacities for GAC products[8]. - Risks associated with the GAC project include management's ability to maintain relationships with customers and suppliers, construction costs, and operational difficulties[8]. Company Name Change - The company changed its name from Advanced Emissions Solutions, Inc. to Arq, Inc. on February 1, 2024[10].

Financial Performance - For the three months ended September 30, 2024, the company reported revenue of $34.774 million, a 17% increase from $29.829 million in the same period of 2023[89]. - The cost of revenue for the three months ended September 30, 2024 was $21.339 million, up 3% from $20.707 million in the prior year[89]. - The company recognized a net income of $1.6 million for the three months ended September 30, 2024, compared to a net loss of $2.2 million for the same period in 2023[88]. - Total revenue for the nine months ended September 30, 2024, was $81,919,000, representing a 15% increase from $71,079,000 in the same period of 2023, with a change of $10,840,000[104]. - EBITDA for the nine months ended September 30, 2024, was $4,369,000, compared to a loss of $7,093,000 in the same period of 2023[122]. Cost and Expenses - Operating expenses for the three months ended September 30, 2024 were $11.407 million, a slight decrease from $11.647 million in the same period of 2023[92]. - Operating expenses decreased by 7% from $34,300,000 in 2023 to $32,012,000 in 2024, with significant reductions in selling, general, and administrative expenses by 18%[106]. - Research and development expenses increased by 23% to $787,000 for the three months ended September 30, 2024, primarily due to product qualification testing[97]. - Research and development expenses increased by 56% from $2,145,000 in 2023 to $3,341,000 in 2024, reflecting ongoing product qualification testing[111]. - Interest expense increased by 13% from $2,155,000 in 2023 to $2,426,000 in 2024, primarily due to higher interest related to the CFG Loan[116]. Cash Flow and Liquidity - Cash on hand as of September 30, 2024, was $48.7 million, excluding $8.7 million of restricted cash, with net proceeds from common stock issuance totaling $42.4 million[124]. - Cash flow from operating activities for the nine months ended September 30, 2024 was $5.3 million, a net increase of $26.4 million from cash used in operating activities of $21.1 million for the same period in 2023[126]. - The company anticipates that cash on hand and proceeds from additional debt financing will provide sufficient liquidity to fund operations for the next 12 months[129]. Market and Demand - The average selling price increase contributed approximately $2.7 million to revenue growth, while a favorable product mix added $1.2 million[90]. - The company experienced a decrease in demand from coal-fired power generation customers due to lower natural gas prices and mild temperatures, impacting sales negatively[87]. - The U.S. EPA's new PFAS regulations are anticipated to drive a material increase in GAC demand in the water purification market over the next five years[87]. - The increase in revenue was primarily driven by a favorable product mix and higher pricing, contributing approximately $5.4 million and $3.9 million, respectively, while lower volumes sold offset these gains by about $0.4 million[105]. Future Plans and Investments - The company expects to begin using Arq Powder as a feedstock for manufacturing high-quality GAC products in the first quarter of 2025[85]. - The company expects to spend between $60 and $70 million on construction and commissioning of its plants during 2024, with $20 to $25 million expected to be spent in the fourth quarter[130]. - The company is targeting the first quarter of 2025 for its first GAC deliveries, requiring substantial capital expenditure for additional equipment and project costs[130]. - The company plans to expand its overall AC business into additional adjacent markets to increase market share and gross margin[129]. Risks and Challenges - The company faces risks related to the integration of Legacy Arq's business and the commercialization of its products and technology[135].

Financial Performance - Revenue for Q3 2024 totaled $34.8 million, representing a 17% increase from $29.8 million in the prior year period[6] - Net income for Q3 2024 was $1.6 million, compared to a net loss of $2.2 million in the prior year period[6] - Adjusted EBITDA for Q3 2024 was $5.1 million, up from $0.9 million in the prior year[2] - Revenue for the three months ended September 30, 2024, was $34,774,000, representing a 16.5% increase from $29,829,000 for the same period in 2023[14] - Net income for the three months ended September 30, 2024, was $1,617,000, compared to a net loss of $(2,175,000) for the same period in 2023[14] - Operating income for the nine months ended September 30, 2024, improved to $(2,372,000) from $(16,439,000) in the same period of 2023[14] - Adjusted EBITDA for the three months ended September 30, 2024, was $5,134,000, compared to a loss of $(9,788,000) for the same period in 2023[18] Margins and Costs - Gross margin improved to 38.6% in Q3 2024, an increase of approximately 800 basis points from 30.6% in the prior year[2] - Average selling prices (ASP) increased by approximately 15% in Q3 2024, marking the sixth consecutive quarter of double-digit year-over-year growth in ASP[2] - Research and development expenses for the three months ended September 30, 2024, were $787,000, up from $639,000 in the same period of 2023[14] - The company incurred $2,185,000 in stock-based compensation expense for the nine months ended September 30, 2024, compared to $1,810,000 for the same period in 2023[15] Cash and Equity - Cash and restricted cash as of September 30, 2024, totaled $57.4 million, up from $37.2 million as of June 30, 2024[8] - Cash and restricted cash at the end of the period was $57,380,000, down from $61,321,000 at the end of September 2023[15] - Net cash provided by operating activities for the nine months ended September 30, 2024, was $5,268,000, compared to $(21,145,000) for the same period in 2023[15] - Total stockholders' equity increased to $218,116,000 as of September 30, 2024, up from $178,400,000 at the end of 2023[13] Capital Expenditures and Future Plans - Capital expenditures for the nine months ended September 30, 2024, totaled $42.2 million, compared to $17.0 million in the prior year[8] - The company raised approximately $27 million in net equity proceeds in September 2024, increasing year-to-date net equity raised to approximately $42 million[2] - The Red River facility is on track for first deliveries in Q1 2025, with a targeted nameplate capacity of 25 million pounds per year[4] - There is potential to increase the Red River's nameplate capacity by 10-20% without additional capital expenditures, expected to be achievable by Q3 2025[5] Liabilities - The company reported a decrease in total liabilities and stockholders' equity to $279,965,000 as of September 30, 2024, from $235,502,000 at the end of 2023[13]

Revenue and Growth - Revenue for Q2 2024 was $25.4 million, a 24% increase from $20.4 million in the prior year period, driven by higher average selling prices and favorable product mix [3]. - Total revenue for Q2 2024 was $25,405, a 24.5% increase from $20,445 in Q2 2023 [20]. - Average selling price (ASP) increased by approximately 16% in Q2 2024, marking the fifth consecutive quarter of double-digit year-over-year growth [3]. - Total contracted volume for granular activated carbon (GAC) reached 13 million pounds per year, representing 52% of Red River's expanded nameplate capacity of 25 million pounds [4]. Profitability and Loss - Net loss narrowed to $2.0 million in Q2 2024, compared to a net loss of $5.9 million in the prior year period [3]. - Net loss for Q2 2024 was $1,968, compared to a net loss of $5,856 in Q2 2023, representing a 66.4% improvement [20]. - Operating loss decreased to $1,420 in Q2 2024 from $6,087 in Q2 2023, indicating a significant reduction in operating expenses [20]. - The net loss for the six months ended June 30, 2024, was $5.387 million, significantly improved from a loss of $13.364 million in the same period of 2023 [24]. EBITDA and Adjusted Metrics - Adjusted EBITDA was $0.5 million in Q2 2024, a significant improvement from an adjusted EBITDA loss of $3.0 million in the prior year [3]. - Adjusted EBITDA for the six months ended June 30, 2024, was a loss of $691,000, compared to a loss of $10.675 million for the same period in 2023 [24]. - EBITDA for the three months ended June 30, 2024, was $453,000, a significant improvement from a loss of $2.993 million in the same period of 2023 [24]. Cash and Liquidity - Cash and restricted cash as of June 30, 2024, totaled $37.2 million, down from $44.0 million as of March 31, 2024 [12]. - Cash and restricted cash at the end of Q2 2024 was $37,197, down from $67,583 at the end of Q2 2023, reflecting a decrease of 45% [21]. - The company reported a decrease in cash used in operating activities to $2,424 in the first half of 2024, down from $21,159 in the first half of 2023 [21]. Capital Expenditures and Investments - Capital expenditures for the first half of 2024 totaled $28.8 million, with full-year guidance remaining at $60 - $70 million [12]. - The company signed a non-binding term sheet to refinance its existing Term Loan, which would expand the size of the facility and enhance liquidity [5]. Assets and Liabilities - Total assets increased to $248,582 as of June 30, 2024, up from $235,502 as of December 31, 2023, marking a growth of 5.1% [18]. - Total liabilities rose to $58,982 as of June 30, 2024, compared to $57,102 as of December 31, 2023, an increase of 3.3% [18]. Research and Development - Research and development expenses increased to $929 in Q2 2024 from $774 in Q2 2023, a rise of 20.1% [20]. Other Financial Metrics - Depreciation, amortization, depletion, and accretion for the three months ended June 30, 2024, was $1.658 million, down from $2.428 million in the prior year [24]. - Interest expense for the three months ended June 30, 2024, was $606,000, compared to $308,000 in the same period of 2023 [24]. - Cash distributions from equity method investees for the six months ended June 30, 2024, were $462,000, while there were no distributions in the same period of 2023 [24]. - The company incurred $0.6 million and $4.9 million in transaction and integration costs related to the legacy Arq acquisition for the three and six months ended June 30, 2023, respectively [24]. - Legacy Arq payroll and benefit costs included in net loss were $0.8 million and $1.7 million for the three and six months ended June 30, 2023, respectively [24]. - The weighted-average number of common shares outstanding increased to 34,356 in Q2 2024 from 27,360 in Q2 2023, reflecting a 25.5% increase [20]. - The company reported a total stockholders' equity of $189,600 as of June 30, 2024, up from $178,400 as of December 31, 2023, an increase of 6.6% [18]. - The Corbin facility commenced commissioning in early Q2 2024, with production expected to ramp up in Q4 2024 [5]. - The company reported a gain on the sale of Marshall Mine, LLC, of $2.695 million in the six months ended June 30, 2023 [24].

Financial Performance - For the three months ended June 30, 2024, revenue increased by 24% to $25.4 million compared to $20.4 million in the same period of 2023[96] - The company reported a net loss of $2.0 million for the three months ended June 30, 2024, an improvement from a net loss of $5.9 million in the same period of 2023[94] - For the six months ended June 30, 2024, revenue increased by 14% to $47.1 million compared to $41.3 million in the same period of 2023[106] - EBITDA loss for the six months ended June 30, 2024, was $691,000 compared to a loss of $7.98 million in 2023, indicating improved operational performance[125] Revenue Drivers - The average selling price of products increased, contributing approximately $1.2 million to revenue growth, while product volumes increased by $0.8 million, primarily from non-power generation and municipal water customers[97] - Revenue for the six months ended June 30, 2024, increased by approximately $2.8 million due to favorable product mix and higher pricing, despite a $1.0 million decrease from lower volumes sold[107] Expenses and Costs - Operating expenses decreased by 14% to $9.6 million for the three months ended June 30, 2024, compared to $11.2 million in the same period of 2023[99] - Operating expenses decreased by 9% from $22.7 million in 2023 to $20.6 million in 2024, with significant reductions in selling, general, and administrative expenses by 24%[108] - Cost of revenue for the six months ended June 30, 2024 decreased by 5% to $30.9 million compared to $32.5 million in the same period of 2023[106] Research and Development - Research and development expenses increased by 20% to $929,000 for the three months ended June 30, 2024, compared to $774,000 in the same period of 2023[99] - Research and development expenses rose by 70% from $1.5 million in 2023 to $2.6 million in 2024, primarily due to product qualification testing[108] Cash Flow and Liquidity - Cash and restricted cash decreased from $54.2 million at the end of 2023 to $37.2 million by June 30, 2024[128] - Cash used in operating activities improved significantly, decreasing from $21.2 million in 2023 to $2.4 million in 2024, reflecting a net loss reduction from $13.4 million to $5.4 million[130] - The company had cash on hand of $28.5 million as of June 30, 2024, excluding $8.7 million of restricted cash[128] - The company anticipates sufficient liquidity from cash on hand and additional debt financing to fund operations for the next 12 months[133] Capital Expenditures and Investments - Cash flows used in investing activities increased by $18.4 million for the six months ended June 30, 2024, primarily due to an increase in property, plant, and equipment additions from the Red River Plant expansion[131] - The company expects to spend between $55 million and $60 million on the Red River Plant expansion during 2024, depending on project pace[134] - The company plans to incur substantial capital expenditures for additional equipment and labor to meet the target for GAC deliveries in the first quarter of 2025[134] Market and Regulatory Environment - The company experienced a decrease in demand from coal-fired power generation customers due to lower natural gas prices, which are expected to remain consistent through 2024[93] - The U.S. EPA's new PFAS National Primary Drinking Water Regulation is expected to drive a material increase in GAC demand in the water purification market over the next five years[93] - The company expects to increase its market share for APT consumables and improve gross margins through better customer and product mix[133] - The company faces risks related to competition, regulatory changes, and macroeconomic conditions that could impact future performance[139] Debt and Financing - Interest expense increased by 18% from $1.4 million in 2023 to $1.6 million in 2024, mainly due to new loans related to the Arq Acquisition[120] - Cash flows provided by financing activities decreased by $8.5 million for the six months ended June 30, 2024, primarily due to the absence of proceeds from the CFG Loan received in the prior year[132] - The company received proceeds of $15.0 million from the issuance of common stock during the six months ended June 30, 2024, net of offering costs[132] Internal Controls - The company is in the process of documenting and testing internal controls over financial reporting for the acquired Legacy Arq, which will be included in the annual report for the year ending December 31, 2024[142] Future Outlook - The company expects to begin using Arq Powder as a feedstock for manufacturing high-quality GAC products by the end of 2024, which is anticipated to open new market opportunities[92]

Financial Performance - For the three months ended March 31, 2024, the company reported a net loss of $3.4 million, an improvement from a net loss of $7.5 million in the same period of 2023[96]. - Revenue for the three months ended March 31, 2024, increased to $21.74 million, a 4% increase from $20.81 million in the same period of 2023[98]. - EBITDA loss for the three months ended March 31, 2024 was $(1.1) million, compared to $(5.0) million for the same period in 2023, indicating a significant improvement in operational performance[118]. - Adjusted EBITDA loss for the three months ended March 31, 2024 was $(1.1) million, compared to $(7.7) million for the same period in 2023, reflecting a positive trend in financial results[118]. Cost Management - Cost of revenue decreased by 20% to $13.71 million for the three months ended March 31, 2024, compared to $17.18 million in the same period of 2023[98]. - Operating expenses decreased by 4% to $11.01 million for the three months ended March 31, 2024, compared to $11.46 million in the same period of 2023[102]. - Selling, general, and administrative expenses decreased by 32% to $7.67 million for the three months ended March 31, 2024, compared to $11.28 million in the same period of 2023[102]. Research and Development - Research and development expenses increased by 122% to $1.63 million for the three months ended March 31, 2024, compared to $0.73 million in the same period of 2023[102]. Liquidity and Cash Flow - Cash on hand as of March 31, 2024, was $35.2 million, excluding $8.8 million of restricted cash, indicating a solid liquidity position[120]. - Cash flows from operating activities improved by $18.2 million, moving from $(17.7) million in Q1 2023 to $0.5 million in Q1 2024[121]. - The company anticipates that cash on hand and additional debt financing will provide sufficient liquidity to fund operations for the next 12 months[126]. Capital Expenditures - Capital expenditures planned for 2024 are between $55 million and $60 million for the Red River Plant expansion, with an additional $5 million to $10 million for the commissioning of the Corbin Facility[127]. - The company expects to finance the Red River Plant expansion through cash on hand, cash generation, and potential customer prepayments for GAC contracts[127]. - The company is targeting the end of 2024 for the completion of the Red River Plant expansion, which is necessary to commence production of new GAC products[127]. Regulatory and Market Outlook - The company expects the implementation of new PFAS regulations by the EPA to drive a material increase in GAC demand in the water purification market over the next five years[95]. - The company anticipates beginning to use Arq Powder as a feedstock for manufacturing high-quality GAC products by the end of 2024[94]. Internal Controls - Legacy Arq was acquired on February 1, 2023, and is excluded from the internal control assessment as of December 31, 2023[136]. - The company is documenting and testing Legacy Arq's internal controls, which will be included in the annual report for the year ending December 31, 2024[136]. - No changes in internal control over financial reporting occurred during the fiscal quarter ended March 31, 2024, that materially affected internal controls[136]. Interest Expense - Interest expense increased by 48% to $0.79 million for the three months ended March 31, 2024, compared to $0.53 million in the same period of 2023[112].

Revenue Performance - Revenue for Q1 2024 totaled $21.7 million, a 4% increase from $20.8 million in the prior year period, despite a 6% reduction in volumes[3] - Total revenue for the three months ended March 31, 2024, was $21,740,000, representing an increase of 4.5% compared to $20,805,000 for the same period in 2023[17] Pricing and Margins - Average selling price (ASP) increased by approximately 16% year-over-year, marking the fourth consecutive quarter of double-digit growth in ASP[3] - Gross margin improved to 37% in Q1 2024, more than double the 17% reported in the prior year period, driven by higher ASP and operational cost management[3] Loss and Adjusted EBITDA - Net loss for Q1 2024 was $3.4 million, significantly improved from a net loss of $7.5 million in the prior year period[6] - Adjusted EBITDA loss narrowed to $1.1 million in Q1 2024, compared to a loss of $7.7 million in the prior year period[3] - Operating loss improved to $(2,980,000) for Q1 2024, compared to $(7,827,000) in Q1 2023, reflecting a reduction of 61.9%[17] - Net loss for the three months ended March 31, 2024, was $(3,419,000), a significant improvement from $(7,508,000) in the prior year, marking a 54.4% reduction[17] - Adjusted EBITDA loss for Q1 2024 was $(1,144,000), compared to $(7,683,000) in Q1 2023, indicating a significant improvement[20] Capital Expenditures and Forecast - Capital expenditures for Q1 2024 totaled $9.6 million, up from $3.5 million in the prior year, driven by ongoing facility expansions[8] - The company updated its full-year 2024 capex forecast to a range of $60-70 million, reflecting an increase due to higher steel and concrete costs for the Red River expansion[9] Expansion and Contracts - The first supply contract for Granular Activated Carbon (GAC) was executed, totaling a forecasted 5 million pounds/year, with delivery expected to commence in Q1 2025[4] - The Red River expansion remains on schedule for first production in Q4 2024, with an expected payback period of 3 years or less[5] Regulatory Impact - The EPA's new regulations on PFAS compounds are expected to drive stronger demand for the company's GAC products[4] Asset and Liability Management - Total current assets decreased to $72,038,000 as of March 31, 2024, down from $86,461,000 at the end of 2023, a decline of 16.7%[15] - Total liabilities decreased to $54,634,000 as of March 31, 2024, down from $57,102,000 at the end of 2023, a reduction of 4.1%[15] - Cash and restricted cash at the end of the period was $44,019,000, down from $79,090,000 at the end of March 2023, a decrease of 44.4%[18] Cash Flow - The company reported a net cash provided by operating activities of $526,000 for Q1 2024, contrasting with $(17,705,000) in the same period last year[18]

Revenue Performance - Q4 2023 revenues increased by 20% YoY to $28.1 million, driven by higher average selling prices and positive product mix changes[1] - Full year 2023 revenues totaled $99.2 million, down from $103.0 million in the prior year, primarily due to lower sales from power generation customers[7] - Total revenue for Q4 2023 was $28,104,000, an increase of 19.5% compared to $23,409,000 in Q4 2022[13] Profitability and Income - Gross margin improved to 50% in Q4 2023, up from 25.4% in the prior year period, reflecting a focus on profitability and cost management[3] - Adjusted EBITDA for Q4 2023 was $7.2 million, compared to a loss of $1.2 million in the prior year period, marking the second consecutive quarter of positive Adjusted EBITDA[4] - The company achieved positive net income of $3.3 million in Q4 2023, the first positive net income quarter since Q4 2021[1] - Operating income for Q4 2023 was $3,104,000, compared to a loss of $3,374,000 in Q4 2022, marking a significant turnaround[13] - Net income for the year ended December 31, 2023, was a loss of $12,249,000, compared to a loss of $8,917,000 in 2022, indicating ongoing challenges[14] Capital Expenditures and Forecast - Capital expenditures for full year 2023 were $27.5 million, significantly higher than $8.9 million in the prior year, driven by strategic growth projects[5] - Full year 2024 capital expenditures are forecasted to be $55-60 million, with Red River Phase 1 expected to account for $45-50 million of that total[6] - The company plans to fund 2024 capital expenditures through cash on hand, cash generation, and potential customer prepayments, with no plans to issue equity[6] Debt and Financial Health - Total debt as of December 31, 2023, was $20.9 million, up from $4.6 million in the prior year, primarily due to a $10.0 million term loan related to the acquisition[5] - Cash and restricted cash at the end of 2023 was $54,153,000, down from $76,432,000 at the end of 2022[15] - The company reported a decrease in total current liabilities to $23,048,000 in 2023 from $23,884,000 in 2022, indicating improved short-term financial health[12] - The company issued common stock, generating net proceeds of $15,220,000 in 2023, which supports liquidity and operational funding[15] Asset Growth - Total assets increased to $235,502,000 as of December 31, 2023, up from $181,164,000 in 2022, reflecting growth in the company's asset base[12] Strategic Initiatives - The company plans to continue focusing on market expansion and new product development as part of its strategic initiatives moving forward[16] - The Red River GAC facility expansion is on track for commissioning in Q4 2024, with ongoing strong demand for high-performance granular products[2] Shareholder Impact - The weighted-average number of common shares outstanding increased to 32,367,000 in 2023 from 18,506,000 in 2022, reflecting the impact of stock issuance[13]