Birchtech (BCHT) Q3 2024 earnings summary

Executive summary

• Birchtech Corp. specializes in mercury emissions removal for coal-fired power plants, focusing on its patented SEA® process and expanding into water treatment and PFAS/PFOS removal technologies.

• Revenues for the nine months ended September 30, 2024, were $12.2M, down from $13.9M year-over-year, primarily due to lower plant activity and decreased licensing revenue.

• The company completed a major debt restructuring, repaid all principal on secured and unsecured notes, and now only has a profit participation liability tied to litigation proceeds.

• A $57.1M patent infringement verdict was awarded in March 2024, with additional lawsuits ongoing and new licensing agreements signed.

• Birchtech rebranded from Midwest Energy Emissions Corp., began trading on the TSX, and opened new labs to support water treatment initiatives.

Financial highlights

• Revenue for Q3 2024 was $5.2M, down from $6.7M in Q3 2023; nine-month revenue was $12.2M, down from $13.9M year-over-year.

• Gross profit for Q3 2024 was $1.6M (vs. $2.3M in Q3 2023); nine-month gross profit was $4.1M (vs. $4.8M year-over-year).

• Net loss for Q3 2024 was $470K (vs. $828K in Q3 2023); nine-month net loss was $9.2M (vs. $3.0M year-over-year), mainly due to higher SG&A and non-cash profit share liability changes.

• Cash at September 30, 2024, was $4.4M, down from $20.9M at year-end 2023, reflecting debt repayments and operating losses.

• Working capital at September 30, 2024, was $3.6M (vs. $22.0M at year-end 2023); current ratio was 1.9 to 1.

Outlook and guidance

• Management expects continued growth from new supply and license agreements, with additional business anticipated in water treatment and environmental remediation.

• The company believes it has sufficient working capital to fund operations for at least the next twelve months.

• Management anticipates transitional corporate growth in 2025, driven by operational improvements and new market entries.

• Additional license agreements are expected from ongoing patent protection efforts.