New Vice President of Investor Relations Joins Management Team
Company Website:
http://www.adaes.com
HIGHLANDS RANCH, Colo. -- (Business Wire)
Fifth paragraph, last sentence of release should read: This provides
more time for the affiliate to pursue leases on additional RC facilities
owned by CCS for which they have indicated an interest in leasing up to
a total of 18 to 20 million tons of RC per year (sted ... leasing up to
a total of 18 to 20 metric tons of RC per year).
The corrected release reads:
ADA-ES PROVIDES YEAR-END UPDATE ON REFINED COAL BUSINESS
New Vice President of Investor Relations Joins Management Team
ADA-ES, Inc. (NASDAQ: ADES) (“ADA”) today provided a year-end update on
its Refined Coal (RC) business and announced that Graham Mattison has
joined the Company as Vice President of Investor Relations.
RC is sold through Clean Coal Solutions (CCS), ADA’s joint venture (JV)
with an affiliate of NexGen Resources Corporation and an affiliate of
The Goldman Sachs Group, Inc. CCS markets three different technologies,
CyClean™, M-45™, and M-45-PC™, all of which can reduce emissions of NOx
and mercury and can qualify for Internal Revenue Service (IRS) Section
45 tax credits for the next nine years (currently $6.47 per ton of RC).
The JV has 28 qualified facilities available to produce RC and generate
tax credits until 2019 for the first two facilities and 2021 for the
newer 26 facilities.
The JV is currently operating 8 facilities producing RC at power plants
around the country. Four of the facilities are leased to two different
RC investors, with the other four being operated by CCS and generating
tax credits for its owners’ use. CCS and a new RC investor have agreed
in principle to the material terms for the sale of one of the facilities
currently operating at a coal-fired plant that is in the process of
restructuring its debt. Finalizing the RC contracts has been delayed
until the debt restructuring is completed and associated lender consents
required for the RC sale transaction are obtained, which ADA now expects
to occur in February 2013. While being operated by CCS, this RC facility
is currently generating tax credits at a rate of approximately $25
million per year, while costing approximately $10 million a year for CCS
to operate. Under the terms of the proposed RC contracts, once the RC
sale transaction is completed, ADA expects that the RC facility will
immediately begin generating approximately $14 million a year in
revenue, thus creating an improvement in cash flow of about $24 million
per year. The RC sale contracts provide for an upfront cash payment of
greater than $20 million (including amounts that will be paid only upon
issuance by the IRS of a private letter ruling (PLR) relating to the
transaction). CCS will continue efforts to close this RC transaction as
promptly as possible notwithstanding that certain of the conditions to
closing are outside of its direct control.
CCS continues to work to monetize and initiate continuous operation of
additional RC facilities, some of which are being delayed as several
existing and potential RC investors are waiting for information from the
IRS on clarification of the process for issuance of PLRs and potential
recommended structures for tax-financing partnerships. ADA hoped that
the IRS would provide this information before year-end, but it is now
expected in early 2013.
Today ADA-ES filed a Current Report on 8-K with the Securities and
Exchange Commission (SEC) regarding amendments to the leases between CCS
and an affiliate of Goldman Sachs (“Goldman”) for the two longest
operating RC facilities. The original agreements signed in 2010 had an
initial term of two and a half years with automatic one year extensions
for the remaining seven years of Section 45 tax eligibility. Given the
delay in the expected IRS information, CCS and Goldman have agreed to
change the lease term to month-to-month. ADA expects that the amended
leases will benefit the JV’s short-term cash flow as a significant
portion of the lease payments will be made monthly rather than
quarterly. Revenues under these leases will have a greater cash
component as the $9 million in pre-paid rent paid in 2010 is now fully
amortized. The Form 8-K also describes a deferment of the return of $4.7
million in deposits to an affiliate of Goldman until April 30, 2013.
This provides more time for the affiliate to pursue leases on additional
RC facilities owned by CCS for which they have indicated an interest in
leasing up to a total of 18 to 20 million tons of RC per year.
ADA and CCS continue to make progress with ADA’s newest RC technology,
M-45-PC™. Following a technological breakthrough in the fourth quarter
of 2012, M-45-PC™ has achieved qualifying emissions for pulverized coal
(PC) boilers. This greatly expands the market for the remaining RC
facilities to include many larger power plants. Twelve RC facilities
that have not been committed for use on other power plants could
potentially now be converted for use of the M-45-PC™ technology. The use
of M-45 PC™ technology would allow these facilities to operate at their
full capacity and each produce 5 to 10 tons of RC per year. The Company
has received very favorable feedback from the initial marketing of this
product, and we expect that the initial facilities using M-45-PC™could
be operating as early as the end of the second quarter of 2013.
Finally, the Company is pleased to announce that Mr. Graham Mattison has
joined the ADA management team as Vice President of Investor Relations.
Mr. Mattison had previously followed ADA as a Senior Vice President and
equity research analyst at Lazard Capital Markets. Having actively
covered ADA for more than five years, Mr. Mattison brings an in-depth
understanding of ADA’s multiple businesses, technologies and
opportunities. We look forward to Mr. Mattison working to expand ADA’s
investor relations efforts and help communicate the significant
opportunities ahead for the Company.
Dr. Michael Durham, President and CEO of ADA, stated, “We are frustrated
with the externalities that have slowed our RC business for the past 6
months. However, these delays have created the potential for significant
upside for the RC business in that the final 12 uncommitted RC
facilities are now available for installation on larger power plants
utilizing our new M-45-PC™ technology for PC boilers.”
About ADA
ADA is a leader in clean coal technology and the associated specialty
chemicals, serving the coal-fueled power plant industry. Our proprietary
environmental technologies and specialty chemicals enable power plants
to enhance existing air pollution control equipment, minimize mercury, CO2
and other emissions, maximize capacity, and improve operating
efficiencies, to meet the challenges of existing and pending emission
control regulations.
With respect to mercury emissions:
-
Through our consolidated subsidiary, Clean Coal Solutions, LLC
(“CCS”), we provide our patented Refined Coal (“RC”) CyClean™
technology to enhance combustion of and reduce emissions of NOx and
mercury from coals in cyclone boilers and our patent pending M-45™ and
M-45-PC™ technologies for Circulating Fluidized Boilers and Pulverized
Coal boilers respectively.
-
We supply Activated Carbon Injection (“ACI”) and Dry Sorbent Injection
(“DSI”) systems, mercury measurement instrumentation, and related
services.
-
Under an exclusive development and licensing agreement with Arch Coal,
we are developing and commercializing an enhanced PRB coal with
reduced emissions of mercury and other metals.
In addition, we are developing CO2 emissions technologies
under projects funded by the U.S. Department of Energy (“DOE”) and
industry participants.
This press release contains forward-looking statements within the
meaning of Section 21E of the Securities Exchange Act of 1934, which
provides a "safe harbor" for such statements in certain circumstances.
The forward-looking statements include statements or expectations
regarding the amount and timing of revenues from and contracts for RC
facilities, impact of IRS guidance, , ability to obtain a PLR from the
IRS, future production of RC, size of the market for RC facilities,
ability to convert existing RC facilities to the new M-45-PC technology
and related matters. These statements are based on current expectations,
estimates, projections, beliefs and assumptions of our management. Such
statements involve significant risks and 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, changes in laws, regulations and IRS interpretations or
guidance, government funding, accounting rules, prices, economic
conditions and market demand; timing of laws, regulations and any legal
challenges to or repeal ofthem; failure of the RC facilities to
produce coal that qualifies for tax credits; termination of or
amendments to the contracts for RC facilities; decreases in the
production of RC; failure to lease or sell the remaining RC facilities
on a timely basis; failure of the new RC investor to close on its debt
restructuring or obtain the PLR from the IRS; inability to commercialize
the new M-45-PC technology on favorable terms; availability, cost of and
demand for alternative tax credit vehicles and other technologies;
technical, start-up and operational difficulties; availability of raw
materials and equipment; loss of key personnel; intellectual property
infringement claims from third parties; and other factors discussed in
greater detail in our filings with the Securities and Exchange
Commission (SEC). You are cautioned not to place undue reliance on such
statements and to consult our SEC filings for additional risks and
uncertainties that may apply to our business and the ownership of our
securities. Our forward-looking statements are presented as of the date
made, and we disclaim any duty to update such statements unless required
by law to do so.
Contacts:
ADA-ES, Inc.
Michael D. Durham, Ph.D., MBA, President
Mark H.
McKinnies, Senior VP & CFO
(303) 734-1727
Graham Mattison,
VP Investor Relations
(646) 319-1417
www.adaes.com
-or-
Investor
Relations Counsel
The Equity Group Inc.
Devin Sullivan, (212)
836-9608
DSullivan@equityny.com
Thomas
Mei, (212) 836-9614
TMei@equityny.com
www.theequitygroup.com
Source: ADA-ES, Inc.