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Investor Presentation FIRST QUARTER 2025 RESULTS MAY 9, 2025
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2 This presentation contains “forward-looking statements” within the meaning of U.S. federal securities laws. Such statements include those relating to estimated and projected financial condition, results of operations, costs and expenditures and objectives for future operations, growth, initiatives and strategies. They also include those related to the Montauk Ag project in North Carolina, the Second Apex RNG Facility, the Blue Granite RNG Facility, the Bowerman RNG Facility, the delivery of biogenic carbon dioxide volumes to European Energy, the Emvolon collaboration and pilot project, the Tulsa Facility project, the resolution of gas collection issues at the McCarty facility, the delays and cancellations of landfill host wellfield expansion projects, the mitigation of wellfield extraction environmental factors at the Rumpke and Apex facilities, how we may monetize RNG production, and weather-related anomalies. All forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those that we expect and, therefore, you should not unduly rely on such statements. The risks and uncertainties that could cause those actual results to differ materially from those expressed or implied by these forward-looking statements include but are not limited to: our ability to develop and operate new renewable energy projects, including with livestock farms, and related challenges associated with new projects, such as identifying suitable locations and potential delays in acquisition financing, construction, and development; reduction or elimination of government economic incentives to the renewable energy market, whether as a result of the new presidential administration or otherwise; the inability to complete strategic development opportunities; widespread manmade, natural and other disasters (including severe weather events), health emergencies, dislocations, geopolitical instabilities or events, terrorist activities, international hostilities, government shutdowns, political elections, security breaches, cyberattacks or other extraordinary events that impact general economic conditions, financial markets and/or our business and operating results; taxes, tariffs, duties or other assessments on equipment necessary to generate or deliver renewable energy or continued inflation could raise our operating costs or increase the construction costs of our existing or new projects; rising interest rates could increase the borrowing costs of future indebtedness; the failure to attract and retain qualified personnel or a possible increased reliance on third-party contractors as a result, and the potential unenforceability of non-compete clauses with our employees; the length of development and optimization cycles for new projects, including the design and construction processes for our renewable energy projects; dependence on third parties for the manufacture of products and services and our landfill operations; the quantity, quality and consistency of our feedstock volumes from both landfill and livestock farm operations; reliance on interconnections with and access to electric utility distribution and transmission facilities and gas transportation pipelines for our Renewable Natural Gas and Renewable Electricity Generation segments; our ability to renew pathway provider sharing arrangements at historical counterparty share percentages; our projects not producing expected levels of output; potential benefits associated with the combustion-based oxygen removal condensate neutralization technology; concentration of revenues from a small number of customers and projects; our outstanding indebtedness and restrictions under our credit facility; our ability to extend our fuel supply agreements prior to expiration; our ability to meet milestone requirements under our power purchase agreements; existing regulations and changes to regulations and policies that effect our operations, whether as a result of the new presidential administration or otherwise; expected impacts of the Production Tax Credit and other tax credit benefits under the Inflation Reduction Act of 2022; decline in public acceptance and support of renewable energy development and projects; our expectations regarding Environmental Attribute volume requirements and prices and commodity prices; our expectations regarding the period during which we qualify as an emerging growth company under the Jumpstart Our Business Startups Act (“JOBS Act”); our expectations regarding future capital expenditures, including for the maintenance of facilities; our expectations regarding the use of net operating losses before expiration; our expectations regarding more attractive carbon intensity scores by regulatory agencies for our livestock farm projects; market volatility and fluctuations in commodity prices and the market prices of Environmental Attributes and the impact of any related hedging activity; regulatory changes in federal, state and international environmental attribute programs and the need to obtain and maintain regulatory permits, approvals, and consents; profitability of our planned livestock farm projects; sustained demand for renewable energy; potential liabilities from contamination and environmental conditions; potential exposure to costs and liabilities due to extensive environmental, health and safety laws; impacts of climate change, extreme and changing weather patterns and conditions, and natural disasters; failure of our information technology and data security systems; increased competition in our markets; continuing to keep up with technology innovations; concentrated stock ownership by a few stockholders and related control over the outcome of all matters subject to a stockholder vote. We provide greater detail regarding risks and uncertainties that could potentially impact forward-looking statements in the sections entitled “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors” in our 2024 Form 10-K and our First Quarter 2025 Form 10-Q. You should evaluate all forward-looking statements made by us in the context of these risks and uncertainties. The forward-looking statements included in this presentation are made only as of the date hereof and we undertake no obligation to publicly update or revise any forward-looking statement except as required by law. This presentation contains non-GAAP financial measures such as EBITDA and Adjusted EBITDA. Reconciliations of non-GAAP financial measures to the most directly comparable GAAP financial measures may be found in this presentation (including the appendix) or our SEC filings. We present non-GAAP financial measures because we believe they assist investors in analyzing our performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance. In addition, EBITDA and Adjusted EBITDA are financial performance measurements that management and our board of directors use in their financial and operational decision-making and in the determination of certain compensation programs. Non-GAAP financial measures supplement our results as reported in accordance with GAAP and should not be considered in isolation from, as a substitute for, GAAP financial measures such as net (loss) income, cash flows from operating activities or as a measure of our liquidity or profitability. Cautionary Statement Regarding Forward-Looking and non-GAAP Financial Information
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3 Income Statement Financial Performance
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4 Operational Results – Quarter Ended March 31, 2025 (in thousands, unless otherwise indicated) All comparisons are between the first quarter ended March 31, 2025 and the first quarter ended March 31, 2024, unless otherwise indicated Renewable Natural Gas (“RNG”) Metrics – 22 MMBtu decreased production RIN Metrics – 1,996 increase in volumes sold – 1,482 increase in RINs generated but unseparated (new in 2025 related to EPA BRRR rules) – 565 increase in RINs generated but unsold – $0.79 decrease in averaged realized price per RIN – 6,714 increase in Prior period RINs carried into CY Renewable Electricity Generation (“REG”) Metrics – 8 MWh decreased production Operating and Maintenance Expenses – $1,949 increased RNG operating expenses – $1,059 increased REG operating expenses General and administrative expenses – $673 decrease
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5 Operating Metrics Operational Performance
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6 Balance Sheet Financial Performance
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7 Cash Flow (in thousands, unless otherwise indicated) Operating items affecting net income include: – $6,264 depreciation, depletion, and amortization – $333 benefit for deferred income taxes – $1,274 accounting for stock-based compensation – $2,047 accounting for impairment Investing activities highlights include: – $6,076 capital expenditures for Montauk Ag Renewables – $5,855 capital expenditures for Second Apex RNG Facility Financing activities include: – $3,000 repayment of term loan
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8 Business Development RIN Metric Highlights (in thousands, unless otherwise indicated) First Quarter 2025 Highlights – EPA BRRR rules requiring RIN separation deferred RIN generation by approximately one month – Approximately 1,482 RINs generated but unseparated related to 2025 RNG production – Approximately 3,916 RINs in inventory from 2025 RNG production – All RINs available for sale from our 2024 RNG production sold Please refer to the Cautionary Statement Regarding Forward-Looking and non-GAAP Financial Information.
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9 Business Development RINs Available but Unsold (in thousands, unless otherwise indicated) Select historical data related to RINs available, RINs sold, and RINs available but unsold: Our profitability is highly dependent on the market price of Environmental Attributes, including the market price for RINs. As we self-market a significant portion of our RINs, a decision not to commit to transfer available RINs during a period will impact our revenue and operating profit. Please refer to the Cautionary Statement Regarding Forward-Looking and non-GAAP Financial Information.
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10 Business Development Capital Development Summary (in thousands, unless otherwise indicated) The following summarizes our ongoing development growth plans expected capacity contribution, anticipated commencement of operations, and capital expenditure estimate, respectively, excluding the Montauk Ag Renewables Development project: Please refer to the Cautionary Statement Regarding Forward-Looking and non-GAAP Financial Information.
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11 Business Development RNG Facility Developments – First Quarter 2025 Highlights Second Apex RNG Facility: – Commissioning to be complete in second quarter of 2025 Blue Granite RNG Facility: – Utility provided notice it will no longer accept RNG into its distribution system – Utility previous provided letter of intent to accept RNG when we were awarded the gas rights – Impairment of RNG equipment related to RNG design capital expenditures Please refer to the Cautionary Statement Regarding Forward-Looking and non-GAAP Financial Information.
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12 Business Development RNG Facility Developments – First Quarter 2025 Highlights Tulsa REG Conversion to RNG: – Long lead capital expenditures expected to begin in the second quarter of 2025 – Expect commercial operations in 2027 Rumpke Relocation – Gas rights agreement obligation related to forecasted landfill filling pattern projected into the existing area of our now current RNG facility – Long lead capital expenditures expected to begin in the second quarter of 2025 – Expect commercial operations in 2028 Please refer to the Cautionary Statement Regarding Forward-Looking and non-GAAP Financial Information.
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13 Business Development Montauk Ag Renewables – First Quarter 2025 Highlights – Continue negotiations with other utility users to provide swine RECs from our first phase production of MWh – Continue negotiations with potential power purchase providers – Ongoing testing various methods of both collecting and transporting feedstock – Continue testing feedstock collection pelletization Please refer to the Cautionary Statement Regarding Forward-Looking and non-GAAP Financial Information.
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14 Business Development Alternative Fuel Source Development (in thousands, unless otherwise indicated) Biogenic Carbon Dioxide (“CO2”) Beneficial Use: – Signed contract to deliver 140 tons of CO2 from Texas facilities – 15-year contract with European Energy North America – 2027 commissioning expected – Long lead capital expenditures expected to begin in the second quarter of 2025 Waste-stream biogas recovery: – Collaboration with Emvolon to transform waste stream biogas into carbon negative fuel – Emvolon installed their patented containerized processing technology at our Atascocita facility in Houston, TX – Designed as proof of concept to produce green methanol at commercial scale Please refer to the Cautionary Statement Regarding Forward-Looking and non-GAAP Financial Information.
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Appendix
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16 EBITDA and Adjusted EBITDA Non-GAAP Reconciliation