Company on track to execute on bookings in excess of $1 billion over 18 months

Strong bookings and expansion of Athena^® platform drive momentum into 2022

Initiate full-year 2022 revenue guidance of $350-$425 million

Fourth Quarter and Full-Year 2021 Financial and Operating Highlights

Financial Highlights – Fourth Quarter 2021

• Record revenues of $52.8 million, up from $18.6 million (+184%) in Q4 2020
• GAAP Gross Margin of (3)% versus 5% in Q4 2020
• Non-GAAP Gross Margin of 6% versus 13% in Q4 2020
• Net Loss of $(34.1) million versus Net Loss of $(100.9) million in Q4 2020
• Adjusted EBITDA of $(12.4) million versus $(5.1) million in Q4 2020
• Ended the fourth quarter with $921 million in cash, cash equivalents and short-term investments

Financial Highlights – Full Year 2021

• Record revenues of $127.4 million, up from $36.3 million (+251%) in 2020
• GAAP Gross Margin of 1% versus (11)% in 2020
• Non-GAAP Gross Margin of 11% versus 10% in 2020
• Net Loss of $(101.2) million versus Net Loss of $(156.1) million in 2020
• Adjusted EBITDA of $(30.3) million versus $(25.4) million in 2020

Operating Highlights – Fourth Quarter 2021

• Record bookings of $216.9 million, up from $43.4 million (+400%) in Q4 2020
• Record contracted backlog of $449 million, up from $312 million (+44%) at the end of Q3 2021
• Record contracted assets under management (AUM) of 1.6 gigawatts hours (GWh) at the end of 2021, up from 1.4 GWh (+14%) at the end of Q3 2021

Operating Highlights – Full Year 2021

• Record 12-month pipeline of $4.0 billion at the end of 2021, up from $2.4 billion (+67%) at the end of Q3 2021, and up from $1.6 billion (+150%) in 2020
• Record bookings of $416.5 million, up from $137.7 million (+202%) in 2020
• Record contracted backlog of $449 million, up from $184 million (+144%) in 2020
• Record contracted AUM of 1.6 GWh at the end of 2021, up from 1.0 GWh (+60%) in 2020

SAN FRANCISCO--(BUSINESS WIRE)--Stem, Inc. ("Stem" or the "Company") (NYSE: STEM), a global leader in artificial intelligence (AI)-driven energy software and services, announced today its financial results for the three and 12 months ended December 31, 2021. All reported results included in this release do not reflect the acquisition of AlsoEnergy, which closed on February 1, 2022.

John Carrington, Chief Executive Officer of Stem, commented, “We reported another strong quarter with record revenues, backlog, pipeline and AUM, all driven by our market-leading Athena platform. Our contracted backlog grew sequentially by 44% during the quarter, driven by a record $217 million in bookings. For the full-year 2021, revenues grew 251% to $127 million, and bookings grew 202% to $417 million, bolstering our contracted backlog, which grew 144% year-over-year and provides strong momentum into 2022 and beyond.

“As part of our continued focus on our software platforms, Athena and AlsoEnergy’s PowerTrack, we plan to add a sixth key metric to our reporting stack with the addition of contracted annual recurring revenue or “CARR”. The metric will provide visibility to the growth in our software and services base as we continue to build existing markets and enter new ones. We believe CARR, estimated to be between $60M - $80M for 2022, when combined with our historically low churn, will provide a long-term view to our anticipated growth in services revenue.

“As previously announced, we completed the AlsoEnergy transaction earlier this month. The transaction is transformational, as it combines two of the leading renewable energy software platforms to provide best in class services to the fast-growing renewable energy industry. With our common mission critical software offerings, we provide high value solutions which enhances revenues and manage costs for renewable energy projects across the globe.

“Supply chain, permitting and interconnection delays negatively impacted our fourth quarter revenues, but demand remains robust, and we expect these issues to resolve over time. We are pleased to introduce our 2022 revenue guidance range, inclusive of AlsoEnergy, which at the midpoint implies we will more than triple our revenues again this year. In addition, we are on track to execute on bookings in excess of $1 billion between July 2021 and December 2022. Our differentiated software offering, customer-focused employees, and strong balance sheet provide visibility into our anticipated multi-year growth in recurring software revenues.”

Fourth Quarter and Full-Year 2021 Financial and Operating Results

Financial Results

Fourth quarter 2021 revenue increased 184% to a record $52.8 million, versus $18.6 million in the fourth quarter of 2020. Full-year 2021 revenue increased 251% to a record $127.4 million versus $36.3 million in full-year 2020. Higher hardware revenue from Front of the Meter (“FTM”) and Behind the Meter (“BTM”) partnership agreements drove most of the increase for the quarter and the year, in addition to higher services revenue driven by increased adoption of the Athena platform.

Fourth quarter 2021 GAAP Gross Margin was $(1.6) million, or (3)%, versus $0.9 million, or 5% in the fourth quarter of 2020, and $3.1 million, or 8%, in the third quarter of 2021. Full-year 2021 GAAP Gross Margin was $1.2 million, or 1%, versus full-year 2020 GAAP Gross Margin of $(3.9) million, or (11)%. The year-over-year decrease in GAAP Gross Margin for the fourth quarter resulted primarily from a higher level of non-cash impairments. The year-over-year increase in GAAP Gross Margin for the full year resulted from additional high margin services revenues.

Fourth quarter 2021 Non-GAAP Gross Margin was $3.3 million, or 6% versus $2.5 million, or 13% in the fourth quarter of 2020, and $5.8 million, or 15%, in the third quarter of 2021. Full-year 2021 Non-GAAP Gross Margin was $14.0 million, or 11%, versus full-year 2020 Non-GAAP Gross Margin of $3.5 million, or 10%.

The year-over-year increase in Non-GAAP Gross Margin for the fourth quarter and full year resulted from higher revenues. In percentage terms for the fourth quarter, the year-over-year decrease in Non-GAAP Gross Margins resulted from a higher mix of hardware deliveries. In percentage terms for the full year, the year-over-year increase resulted from higher services revenue.

Fourth quarter 2021 Net Loss was $(34.1) million versus fourth quarter 2020 Net Loss of $(100.9) million. Full-year 2021 Net Loss was $(101.2) million versus full-year 2020 Net Loss of $(156.1) million. For the quarter and the year, the differences were primarily driven by non-cash revaluation of warrants, tied to changes in the value of the underlying common stock.

Fourth quarter 2021 Adjusted EBITDA was $(12.4) million compared to $(5.1) million in the fourth quarter of 2020. Full-year 2021 Adjusted EBITDA was $(30.3) million compared to $(25.4) million in full-year 2020. The lower Adjusted EBITDA results were primarily driven by higher operating expenses due to increased personnel costs reflecting continued investment in our growth initiatives and costs associated with public reporting requirements.

The Company ended the fourth quarter 2021 with $921 million in cash, consisting of $748 million in cash and cash equivalents and $173 million in short-term investments. The sequential increase from $576 million in cash at the end of third quarter 2021 was primarily the result of the issuance of $460 million of our 0.50% Green Convertible Senior Notes due 2028, net of discounts, fees and the purchase of capped call options.

Operating Results

The Company’s 12-month forward pipeline was $4.0 billion at the end of the fourth quarter compared to $2.4 billion at the end of the third quarter, representing 67% sequential growth. The increase in the 12-month pipeline is a result of increased FTM project opportunities, including significant expansions into new markets, continued growth in Stem’s partner channel, and the seasonal nature of the pipeline.

Contracted Backlog was $449 million as of December 31, 2021 compared to $312 million as of September 30, 2021, representing a 44% sequential increase. The increase in Contracted Backlog resulted from record bookings in the quarter of $217 million, partially offset by revenue recognition, contract cancellations and amendments during the quarter. For the fourth quarter 2021, bookings grew 400% year-over-year from $43 million in fourth quarter 2020. Full year 2021 bookings of $416.5 million were more than three times higher than full-year 2020 bookings of $137.7 million.

Contracted AUM increased 60% year-over-year and 14% sequentially to 1.6 GWh, driven by new contracts.

The following table provides a summary of backlog at the end of the fourth quarter, compared to third quarter backlog ($ millions):

The Company expects to continue to diversify its supply chain, adopt alternative technologies, and deploy its balance sheet to meet the expected significant growth in customer demand. COVID-19 and general macroeconomic conditions continue to impact the supply chain and project timelines, and the Company has been affected by inflation in the costs of equipment. The Company is actively working to mitigate these impacts on its financial results.

Business Highlights

On February 24, 2022, the Company announced that it had been exclusively selected to provide storage solutions to Available Power, a developer of distributed energy resources. The strategic partnership will develop up to 100 FTM sites in Texas with potential to provide one gigawatt (GW), or two GWh, of energy storage systems and Athena software. The portfolio will be completed in phases, with deployment of the first 20 systems by early 2023.

On February 1, 2022, the Company completed its previously-announced acquisition of AlsoEnergy Holdings, Inc. (“AlsoEnergy”) for $695 million in a combination of cash and Stem common stock. AlsoEnergy is a global leader in solar asset management software, with 33 gigawatts (GW) of assets under management in more than 50 countries. In the fiscal year ended December 31, 2020, AlsoEnergy generated approximately $49 million in revenue and realized 60% gross margin across its software, grid edge monitoring, controls, and services businesses. AlsoEnergy will continue to operate under its own brand and provide the same services to its customers.

On January 5, 2022, the Company announced that it had entered into a co-marketing agreement with ENGIE North America to develop an offering to enable eMobility solutions. The offering will combine Stem’s Athena software and storage hardware with ENGIE’s charging, energy management, and onsite generation solutions.

On November 22, 2021, the Company sold $460 million aggregate principal amount of its 0.50% Green Convertible Senior Notes due 2028 (the “Notes”) in a private placement. In connection with the sale of the Notes, Stem entered into capped call transactions to reduce potential dilution to Stem’s common stock upon any conversion of the Notes, with a cap price of $49.66 per share. Stem’s net proceeds from this offering were approximately $445.7 million. Stem used approximately $67 million of the net proceeds to pay the cost of the capped call transactions.

Outlook

The Company is introducing full-year 2022 financial guidance as follows ($ millions unless otherwise noted):

The Company is introducing 2022 seasonality guidance indicating quarterly projected performance against the annual targets as follows:

Stem’s 2022 guidance includes the operations of AlsoEnergy effective February 1, 2022.

Use of Non-GAAP Financial Measures

In addition to financial results determined in accordance with U.S. generally accepted accounting principles (“GAAP”), this fourth-quarter and full-year 2021 earnings release contains the following non-GAAP financial measures: non-GAAP gross margin and Adjusted EBITDA. The foregoing non-GAAP financial measures should be considered in addition to, not as a substitute for, or superior to, other measures of financial performance prepared in accordance with GAAP. For reconciliation of non-GAAP gross margin and Adjusted EBITDA to their comparable GAAP measures, see the section below entitled “Reconciliations of non-GAAP Financial Measures.”

We use these non-GAAP financial measures for financial and operational decision making and to evaluate our operating performance and prospects, develop internal budgets and financial goals, and to facilitate period-to-period comparisons. Our management believes that these non-GAAP financial measures provide meaningful supplemental information regarding our performance and liquidity by excluding certain expenses and expenditures that may not be indicative of our operating performance, such as stock-based compensation and other non-cash charges, as well as discrete cash charges that are infrequent in nature. We believe that both management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when planning, forecasting, and analyzing future periods. These non-GAAP financial measures also facilitate management’s internal comparisons to our historical performance and liquidity as well as comparisons to our competitors’ operating results, to the extent that competitors define these metrics in the same manner that we do. We believe these non-GAAP financial measures are useful to investors both because they (1) allow for greater transparency with respect to key metrics used by management in its financial and operational decision making and (2) are used by our institutional investors and the analyst community to help them analyze the health of our business.

We define Adjusted EBITDA as net loss before depreciation and amortization, including amortization of internally developed software, net interest expense, further adjusted to exclude stock-based compensation and other income and expense items, including the change in fair value of warrants and embedded derivatives, loss on extinguishment of debt, and income taxes.

We define non-GAAP gross margin as gross margin excluding amortization of capitalized software, impairments related to decommissioning of end-of-life systems, and adjustments to reclassify data communication and cloud production expenses to operating expenses. See the definitions of non-GAAP metrics at the end of the press release.

About Stem, Inc.

Stem (NYSE: STEM) provides solutions that address the challenges of today’s dynamic energy market. By combining advanced energy storage solutions with Athena®, a world-class AI-powered analytics platform, Stem enables customers and partners to optimize energy use by automatically switching between battery power, onsite generation, and grid power. Stem’s solutions help enterprise customers benefit from a clean, adaptive energy infrastructure and achieve a wide variety of goals, including expense reduction, resilience, sustainability, environmental and corporate responsibility, and innovation. Stem also offers full support for solar partners interested in adding storage to standalone, community or commercial solar projects – both behind and in front of the meter. With the acquisition of AlsoEnergy, Stem is a leader in the solar asset management space, bringing project developers, asset owners and commercial customers an integrated solution for solar and energy storage management and optimization. For more information, visit www.stem.com.

Notes

Stem will hold a conference call to discuss this earnings press release and business outlook on Thursday, February 24, 2022 beginning at 5:00 p.m. Eastern Time. The conference call and accompanying slides may be accessed via a live webcast on a listen-only basis on the Events & Presentations page of the Investor Relations section of the Company’s website at https://investors.stem.com/events-and-presentations. The call can also be accessed live over the telephone by dialing (855) 327-6837, or for international callers, (631) 891-4304 and referencing Stem. A replay of the conference call will be available shortly after the call and can be accessed by dialing (844) 512-2921 or for international callers by dialing (412) 317-6671. The passcode for the replay is 10018011. An archive of the webcast will be available on the Company’s website at https://investors.stem.com/overview for 12 months after the call.

Forward-Looking Statements

This fourth-quarter and full-year 2021 earnings press release, as well as other statements we make, contain “forward-looking statements” within the meaning of the federal securities laws, which include any statements that are not historical facts. Such statements often contain words such as “expect,” “may,” “can,” “believe,” “predict,” “plan,” “potential,” “projected,” “projections,” “forecast,” “estimate,” “intend,” “anticipate,” “ambition,” “goal,” “target,” “think,” “should,” “could,” “would,” “will,” “hope,” “see,” “likely,” and other similar words. Forward-looking statements address matters that are, to varying degrees, uncertain, such as statements about our financial and performance targets and other forecasts or expectations regarding, or dependent on, our business outlook; the expected synergies of the combined Stem/AlsoEnergy company; our ability to successfully integrate the combined companies; our joint ventures, partnerships and other alliances; reduction of greenhouse gas (“GHG”) emissions; the integration and optimization of energy resources; our business strategies and those of our customers; the global commitment to decarbonization; our ability to retain or upgrade current customers, further penetrate existing markets or expand into new markets; our ability to manage our supply chains and distribution channels and the effects of natural disasters and other events beyond our control, such as the COVID-19 pandemic and variants thereof; our ability to meet contracted customer demand; and future results of operations, including revenue and Adjusted EBITDA. Such forward-looking statements are subject to risks, uncertainties, and other factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements, including but not limited to changing global economic conditions; our inability to achieve our financial and performance targets and other forecasts and expectations; our inability to help reduce GHG emissions; the results of operations and financial condition of our customers and suppliers; our inability to integrate and optimize energy resources; pricing pressure; inflation; weather and seasonal factors; unfavorable effects of health pandemics; challenges, disruptions and costs of integrating the combined companies and achieving anticipated synergies, or such synergies taking longer to realize than expected; risks that the integration disrupts current plans and operations that may harm the combined company’s business; uncertainty as to the effects of the transaction on the combined company’s financial performance; uncertainty as to the effects of the transaction on the long-term value of Stem’s common stock; the business, economic and political conditions in the markets in which Stem and AlsoEnergy operate; the effect of the COVID-19 pandemic on the workforce, operations, financial results and cash flows of the combined company; the combined company’s ability to continue to grow and to manage its growth effectively; the combined company’s ability to attract and retain qualified employees and key personnel; the combined company’s ability to comply with, and the effect on their businesses of, evolving legal standards and regulations, particularly concerning data protection and consumer privacy and evolving labor standards; our ability to grow and manage growth profitably; risks relating to the development and performance of our energy storage systems and software-enabled services; the risk that the global commitment to decarbonization may not materialize as we predict, or even if it does, that we might not be able to benefit therefrom; our inability to retain or upgrade current customers, further penetrate existing markets or expand into new markets; our inability to secure sufficient inventory from our suppliers to meet customer demand, and provide us with contracted quantities of equipment; supply chain interruptions and manufacturing or delivery delays; disruptions in sales, production, service or other business activities; the risk that our business, financial condition and results of operations may be adversely affected by other political, economic, business and competitive factors; and other risks and uncertainties set forth in this press release, the section entitled “Risk Factors” in the registration statement on Form S-1 filed with the SEC on July 19, 2021, and our most recent Forms 10-K, 10-Q and 8-K filed with or furnished to the SEC. If one or more of these or other risks or uncertainties materialize (or the consequences of any such development changes), or should our underlying assumptions prove incorrect, actual outcomes may vary materially from those reflected in our forward-looking statements. Forward-looking and other statements in this press release regarding our environmental, social, and other sustainability plans and goals are not an indication that these statements are necessarily material to investors or required to be disclosed in our SEC filings. In addition, historical, current and forward-looking environmental, social, and sustainability-related statements may be based on standards for measuring progress that are still developing, internal controls and processes that continue to evolve, and assumptions that are subject to change in the future. Statements in this press release are made as of the date of this release, and Stem disclaims any intention or obligation to update publicly or revise such statements, whether as a result of new information, future events or otherwise.

Source: Stem, Inc.

Stem Investor Contacts
Ted Durbin, Stem
Marc Silverberg, ICR
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(847) 905-4400

Stem Media Contacts
Cory Ziskind, ICR
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SAN FRANCISCO--(BUSINESS WIRE)--Stem, Inc. (“Stem” or “the Company”) (NYSE: STEM), a global leader in artificial intelligence (AI)-driven energy software and services, announced today that it will participate in the following upcoming investor conferences:

• Credit Suisse 27^th Annual Energy Summit – February 28, 2022
• Piper Sandler 22^nd Annual Energy Conference – March 22, 2022

The Company’s most recent investor materials can be accessed on its Investor Relations website at https://investors.stem.com/events-and-presentations/.

About Stem, Inc.

Stem (NYSE: STEM) provides solutions that address the challenges of today’s dynamic energy market. By combining advanced energy storage solutions with Athena®, a world-class AI-powered analytics platform, Stem enables customers and partners to optimize energy use by automatically switching between battery power, onsite generation, and grid power. Stem’s solutions help enterprise customers benefit from a clean, adaptive energy infrastructure and achieve a wide variety of goals, including expense reduction, resilience, sustainability, environmental and corporate responsibility, and innovation. Stem also offers full support for solar partners interested in adding storage to standalone, community or commercial solar projects – both behind and in front of the meter. With the acquisition of AlsoEnergy, Stem is a leader in the solar asset management space, bringing project developers, asset owners and commercial customers an integrated solution for solar and energy storage management and optimization. For more information, visit www.stem.com.

Stem Investor Contacts
Ted Durbin, Stem
Marc Silverberg, ICR
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Stem Media Contacts
Cory Ziskind, ICR
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First Gen2 Energy Warehouse Shipped to Customer Has Been Fully Accepted and is Operational

WILSONVILLE, Ore.--(BUSINESS WIRE)--ESS Tech, Inc. (“ESS,” “ESS, Inc.” or the “Company”) (NYSE:GWH), a U.S. manufacturer of long-duration batteries for utility-scale and commercial energy storage applications, today announced financial results for its fourth quarter and full year ended December 31, 2021.

“The world’s need for long-duration energy storage is undeniable and the value proposition of our iron flow battery continues to differentiate us in the market. We shipped our first commercial units to multiple customers in late 2021 and our solution now stands as a proven alternative to lithium-ion for grid storage. While we have been hampered by significant supply challenges, ESS continued to make progress securing new contracts, delivering to customer projects, and ramping up our operations. We have now achieved full customer acceptance at one of the projects where we have installed our Energy Warehouses. However, we were limited in our ability to recognize revenue in the quarter,” said Eric Dresselhuys, CEO of ESS. “Our team is working tirelessly to navigate the headwinds from the challenging shifting supply chain environment, but we now expect a shift of a little more than one quarter in our ramp plan for 2022. We remain confident in the long-term trajectory of the business as our pipeline and backlog remain robust, and we continue to focus on maximizing our production capabilities while effectively managing costs.”

Recent Operational Highlights

• Added 54,000 square feet to our Wilsonville facility in the fourth quarter, which helped us double our total footprint to 200,000 square feet in 2021
• 2022 shipment forecast is 100% booked

Recent Business Highlights

• ESS finalized the business combination with ACON S2 Acquisition Corp. on October 11, 2021, and its shares and warrants began trading on the New York Stock Exchange (“NYSE”) under the new ticker symbols “GWH” and “GWH.W”, respectively, on October 11, 2021. The closing of the business combination resulted in cash received of $251 million, including a private investment in public equity (PIPE). All prior ESS shareholders rolled 100% of their equity holdings into the new public company.
• On November 16, 2021, ESS announced that Frost & Sullivan recognized ESS with the 2021 North American Technology Innovation Leadership Award for pioneering environmentally friendly long-duration iron flow batteries.
• On November 23, 2021, ESS announced the publication of the Long-Duration Energy Storage (LDES) Council’s LDES report, with ESS as a contributing author and founding member. The LDES report documents that up to 140 TWh of long-duration energy storage are needed to enable grid net zero by 2040 at the lowest cost. The full LDES report can be downloaded from the Company’s web site.
• On December 20, 2021, ESS announced that San Diego Gas & Electric will utilize six ESS second-generation Energy Warehouse™ systems to provide up to 3 MWh of stored energy capacity. This utility-scale project in the town of Cameron Corners, California, pairs our ESS solution with a large on-site solar array to create a zero-emissions microgrid, ensuring multi-day continuity of services to first responders and critical customer loads in a remote location. The Cameron Corners Microgrid Project is scheduled to come online in the first quarter of 2022.
• On January 13, 2022, ESS announced that it entered into an agreement with Portland General Electric (PGE) in Oregon to test and demonstrate the ESS Energy Center^™ platform. The 3 MWh Energy Center is expected to come online in mid-2022, will be used to demonstrate multiple use cases and will help PGE work towards its renewable energy targets.
• On January 14, 2022, ESS announced that it was featured as number three in Energy Storage Report’s list of “Ten Energy Storage Companies To Watch in 2022.”
• On February 3, 2022, ESS announced that Reuters Events recognized ESS as one of the “Top 100 Energy Transition Innovators of 2022.”
• On February 17, 2022, ESS announced the appointment of Claudia Gast to its Board of Directors, replacing Shirley Speakman. Claudia Gast will serve on the audit committee and brings over 15 years of experience leading mergers and acquisitions and an extensive background in finance, strategy and operations both in private equity and with Fortune 100 companies.
• On February 23, 2022, ESS announced that it was featured in MIT Technology Review as one of 10 Breakthrough Technologies.

Conference Call Details

ESS will hold a conference call on Thursday, February 24, 2022 at 5:00 p.m. EST to discuss financial results for its fourth quarter and full year ended December 31, 2021.

Interested parties may join the conference call beginning at 5:00 p.m. EST on Thursday, February 24, 2022 via telephone by calling (844) 200-6205 in the U.S., or for international callers, by calling (646) 904-5544 and entering conference ID 994302. A telephone replay will be available until March 3, 2022, by dialing (866) 813-9403 in the U.S., or for international callers, (929) 458-6194 with conference ID 867508. A live webcast of the conference call will be available on ESS’ Investor Relations website at http://investors.essinc.com/.

A replay of the call will be available via the web at http://investors.essinc.com/.

About ESS, Inc.

ESS Inc. (NYSE: GWH) designs, builds and deploys environmentally sustainable, low-cost, iron flow batteries for long-duration commercial and utility-scale energy storage applications requiring from 4 to 12 hours of flexible energy capacity. The Energy Warehouse^™ and Energy Center^™ use earth-abundant iron, salt, and water for the electrolyte, resulting in an environmentally benign, long-life energy storage solution for the world’s renewable energy infrastructure. Established in 2011, ESS Inc. enables project developers, utilities, and commercial and industrial facility owners to make the transition to more flexible non-lithium-ion storage that is better suited for the grid and the environment. For more information, visit www.essinc.com.

Use of Non-GAAP Financial Measures

In this press release, the Company includes Adjusted EBITDA and Non-GAAP Operating Expenses, which are non-GAAP performance measures that the Company uses to supplement its results presented in accordance with U.S. GAAP. As required by the rules of the Securities and Exchange Commission (“SEC”), the Company has provided herein a reconciliation of the non-GAAP financial measures contained in this press release to the most directly comparable measures under GAAP. The Company’s management believes Adjusted EBITDA and Non-GAAP Operating Expenses are useful in evaluating its operating performance and are similar measures reported by publicly-listed U.S. companies, and regularly used by securities analysts, institutional investors, and other interested parties in analyzing operating performance and prospects. By providing these non-GAAP measures, the Company’s management intends to provide investors with a meaningful, consistent comparison of the Company’s profitability for the periods presented. Adjusted EBITDA is not intended to be a substitute for net income/loss or any U.S. GAAP financial measure and, as calculated, may not be comparable to other similarly titled measures of performance of other companies in other industries or within the same industry. Further, Non-GAAP Operating Expenses are not intended to be a substitute for GAAP Operating Expenses or any U.S. GAAP financial measure and, as calculated, may not be comparable to other similarly titled measures of performance of other companies in other industries or within the same industry.

The Company defines and calculates Adjusted EBITDA as net loss before interest, other non-operating expense or income, (benefit) provision for income taxes, and depreciation, and further adjusted for stock-based compensation and other special items determined by management, including, but not limited to, fair value adjustments for certain financial liabilities (including derivatives) associated with debt and equity transactions as they are not indicative of business operations. The Company defines and calculates Non-GAAP Operating Expenses as GAAP Operating Expenses adjusted for stock-based compensation, one-time transaction expenses and other special items determined by management as they are not indicative of business operations.

Forward-Looking Statements

This communication contains certain forward-looking statements, including statements regarding ESS and its management team’s expectations, hopes, beliefs, intentions or strategies regarding the future. The words “anticipate”, “believe”, “continue”, “could”, “estimate”, “expect”, “intends”, “may”, “might”, “plan”, “possible”, “potential”, “predict”, “project”, “should”, “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Examples of forward-looking statements include, among others, statements regarding the Company’s manufacturing plans, the Company’s order and sales pipeline, the Company’s ability to execute on orders and the Company’s ability to effectively manage costs. These forward-looking statements are based on ESS' current expectations and beliefs concerning future developments and their potential effects on ESS. Many factors could cause actual future events to differ materially from the forward-looking statements in this communication. There can be no assurance that the future developments affecting ESS will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond ESS control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements, which include, but are not limited to, continuing supply chain issues; delays, disruptions, or quality control problems in the Company’s manufacturing operations; the Company’s ability to hire, train and retain an adequate number of manufacturing employees; and the Company’s need to achieve significant business growth to achieve sustained, long-term profitability. Except as required by law, ESS is not undertaking any obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.

Investors:
Erik Bylin
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Media:
Gene Hunt
Trevi Communications, Inc.
978-750-0333 x.101
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Grows Offshore Portfolio & Solidifies Position as Industry Leader

BROOKLYN, N.Y.--(BUSINESS WIRE)--Atlantic Shores Offshore Wind Bight, LLC, a wholly owned subsidiary of Atlantic Shores Offshore Wind, LLC (Atlantic Shores), is the provisional winner of OCS-A-0541 in the New York Bight offshore wind auction.

The lease was awarded as part of an outer continental shelf renewable energy auction held by the Bureau of Ocean Energy Management (BOEM) that marked the first offshore wind energy auction in more than three years.

With the acquisition of the New York Bight lease, Atlantic Shores continues to grow its offshore wind portfolio and solidify its position as one of the nation's leading offshore wind developers.

In 2021, the New Jersey Board of Public Utilities (NJ BPU) awarded Atlantic Shores Offshore Wind Project 1 the right to receive Offshore Renewable Energy Certificates (ORECs) for its 1,510 MW offshore wind project, enough to power over 700,000 homes from within its existing 183,000-acre lease area off the coast of New Jersey.

This is the largest single offshore wind project in New Jersey and one of the three largest awards in the United States to date.

With more than 3 GW of capacity within Atlantic Shores’ existing New Jersey lease area, the addition of the newly awarded New York Bight lease ensures Atlantic Shores’ ability to support both New Jersey and New York’s offshore energy development goals by 2035 and makes them a leading contributor in achieving President Biden’s goal of 30 GW by 2030.

“We are very excited to have won a lease area in the New York Bight enabling us to provide more clean renewable power from offshore wind projects to East Coast residents,” said Joris Veldhoven, Commercial and Finance Director at Atlantic Shores Offshore Wind.

“This New York Bight lease in combination with our existing portfolio of offshore energy Projects solidifies Atlantic Shores’ position as a driving force to establish this new industry and deliver clean, renewable power while protecting our natural resources. It also provides significant momentum for the Atlantic Shores domestic supply chain strategy and qualified workforce we are investing in, in line with our target to create thousands of good-paying jobs for years to come.”

Atlantic Shores would like to congratulate BOEM on running a successful process and thank them for their ongoing efforts to support the growth of the offshore wind industry.

Atlantic Shores Offshore Wind, LLC is a 50:50 partnership between Shell New Energies US LLC and EDF Renewables North America.

For more info: www.atlanticshoreswind.com.

Media:
Phil Chinitz
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516-659-9369

• CFIUS clearance process moving forward
• Time for acceptance of the Offer has been extended to April 14, 2022

TORONTO--(BUSINESS WIRE)--Viston United Swiss AG (“Viston”), together with its indirect, wholly-owned subsidiary, 2869889 Ontario Inc. (the “Offeror”) is providing an update with respect to filings made with the Committee on Foreign Investment in the United States (“CFIUS”) in connection with its all-cash offer (the “Offer”) to acquire all of the issued and outstanding common shares (“Common Shares”) of Petroteq Energy Inc. (“Petroteq”) (TSX-V: PQE; OTC: PQEFF; FSE: PQCF), and is announcing that it will mail a notice of extension dated February 24, 2022 (the “Notice of Extension”) to the registered shareholders of Petroteq, extending the time for acceptance of the Offer to 5:00 p.m. (Toronto time) on April 14, 2022. The Notice of Extension will also be filed on Petroteq’s SEDAR profile at www.sedar.com and with U.S. Securities and Exchange Commission at www.sec.gov.

Regulatory Update

CFIUS is a group of Cabinet-level officials in the U.S. government who are authorized to review certain transactions involving foreign investment in the United States, in order to determine the effect of such transactions on the national security of the United States. On January 6, 2022, the Offeror made a voluntary declaration filing (the “Declaration”) with CFIUS. The Declaration was made for the purpose of securing a clearance by CFIUS that the Offeror’s acquisition of Common Shares pursuant to the Offer and the subsequent second-step acquisition by the Offeror of any Common Shares not acquired by it in the Offer (the “Transactions”) as reflected in (i) a written notice from CFIUS that the Transactions do not constitute a “covered transaction” under relevant government regulations, (ii) a written notice from CFIUS that it has completed its assessment, review, or investigation of the Transactions and has concluded all action under Section 721 of the U.S. Defense Production Act of 1950, as amended (the “DPA”), or (iii) an announcement by the President of the United States, made within the period required by the DPA, of a decision not to take any action to suspend or prohibit the Transactions (each of (i), (ii), or (iii) being a “Clearance”).

Despite the Offeror’s request that Petroteq jointly submit the Declaration to CFIUS with the Offeror, Petroteq declined to do so and the Offeror submitted the Declaration on the basis of information about Petroteq available to the Offeror. U.S. counsel to the Offeror was advised by CFIUS that January 13, 2022 would be the first day of the assessment period, which would conclude no later than February 11, 2022. During this period, the Offeror responded to requests to provide additional information to CFIUS. Petroteq provided limited cooperation in responding to the requests for additional information made by CFIUS during the assessment period.

Following the expiration of the assessment period, CFIUS notified the Offeror that it was unable to complete action under Section 721 of the DPA and grant a Clearance on the basis of the Declaration. Viston and the Offeror have determined to file a joint voluntary notice (the “Notice”) with CFIUS seeking a Clearance, in order to satisfy the conditions to the Offer. Viston and the Offeror have commenced the preparation of the Notice with an objective of preparing it on an expedited basis, submitting the Notice to CFIUS and commencing the 45-day notice review period as soon as practicable.

Notice of Extension

The Offeror will mail and file the Notice of Extension to the registered shareholders of Petroteq, extending the time for acceptance of the Offer to 5:00 p.m. (Toronto time) on April 14, 2022 in order to allow additional time for a Clearance to be granted, thereby satisfying one of the conditions to the Offer.

Common Shares Tendered to Offer

Kingsdale Advisors, the Depositary and Information Agent for the Offer, has advised the Offeror that, as of 5:00 p.m. (Toronto time) on February 23, 2022, approximately 282,363,977 Common Shares had been validly tendered to the Offer and had not been validly withdrawn. Based on Viston’s understanding of the share capitalization of Petroteq¹, the tendered Common Shares represent approximately 39.56% of the currently issued and outstanding Common Shares and approximately 35.53% of the Common Shares, measured on a fully diluted basis.¹

In addition, Viston has been advised by Kingsdale that Kingsdale is aware of pending tenders of approximately 109,207,626 Common Shares (“Pending Tenders”) in the form of broker instructions that, based on information supplied by market intermediaries, it expects to be submitted in bulk prior to expiry and in the form of registered share deposits that, based on information received from registered holders, it believes to be in process of completing documentation that Kingsdale currently expects to be completed and validly tendered before the expiry of the Offer. Such Pending Tenders, together with the Common Shares validly tendered to the Offer, and not validly withdrawn, represent approximately 391,571,603 Common Shares or approximately 54.86% of the currently issued and outstanding Common Shares, and approximately 49.27% of the Common Shares, measured on a fully-diluted basis.¹ Viston cautions that there can be no assurance that Common Shares validly tendered to the Offer, and not validly withdrawn, will not be validly withdrawn prior to the expiry of the Offer or that Pending Tenders will be completed in a manner that results in the Common Shares subject to Pending Tender being validly tendered to the Offer and not validly withdrawn prior to the expiry of the Offer.

Holders of Common Shares who have previously validly tendered and not withdrawn their shares do not need to re-tender their Common Shares or take any other action in response to the extension of the Offer.

Summary of Offer Details

Viston reminds Shareholders of the following key terms and conditions of the Offer:

• Shareholders will receive C$0.74 in cash for each Common Share. The Offer represents a significant premium of approximately 279% based on the closing price of C$0.195 per Common Share on the TSX-V on August 6, 2021, being the last trading day prior to the issuance of a cease trade order by the Ontario Securities Commission at which time the TSX-V halted trading in the Common Shares. The Offer also represents a premium of approximately 1,032% to the volume weighted average trading price of C$0.065 per Common Share on the TSX-V for the 52-weeks preceding the German voluntary public purchase offer in April 2021.
• The Offer is expressed in Canadian dollars but Shareholders may elect to receive their consideration in the U.S. dollar equivalent amount.
• The Offer is open for acceptance until 5:00 p.m. (Toronto time) on April 14, 2022, unless the Offer is extended, accelerated or withdrawn by the Offeror in accordance with its terms.
• Registered Shareholders may tender by sending their completed Letter of Transmittal, share certificates or DRS statements and any other required documents to Kingsdale, as Depositary and Information Agent. Registered Shareholders are encouraged to contact Kingsdale promptly to receive guidance on the requirements and assistance with tendering.
• Beneficial Shareholders should provide tender instructions and currency elections to their financial intermediary. Beneficial Shareholders may also contact Kingsdale for assistance.
• The Offer is subject to specified conditions being satisfied or waived by the Offeror. These conditions include, without limitation: the Canadian statutory minimum tender condition of at least 50% +1 of the outstanding Common Shares being validly deposited under the Offer and not withdrawn (this condition cannot be waived); at least 50% +1 of the outstanding Common Shares on a fully diluted basis being validly deposited under the Offer and not withdrawn; the Offeror having determined, in its reasonable judgment, that no Material Adverse Effect exists; and receipt of all necessary regulatory approvals. Assuming that the statutory minimum tender condition is met and all other conditions are met or waived, the Depositary will pay Shareholders promptly following the public announcement of take-up and pay.

For More Information and How to Tender Shares to the Offer

Shareholders who hold Common Shares through a broker or intermediary should promptly contact them directly and provide their instructions to tender to the Offer, including any U.S. dollar currency election. Taking no action and not accepting the Offer comes with significant risks of shareholder dilution and constrained share prices. The deadline for Shareholders to tender their shares is April 14, 2022.

For assistance or to ask any questions, Shareholders should visit www.petroteqoffer.com or contact Kingsdale Advisors, the Information Agent and Depositary in connection with the Offer, within North America toll-free at 1-866-581-1024, outside North America at 1-416-867-2272 or by e-mail at This email address is being protected from spambots. You need JavaScript enabled to view it..

Advisors

The Offeror has engaged Gowling WLG (Canada) LLP to advise on certain Canadian legal matters and Dorsey & Whitney LLP to advise on certain U.S. legal matters. Kingsdale Advisors is acting as Information Agent and Depositary.

About the Offeror

The Offeror is an indirect, wholly-owned subsidiary of Viston, a Swiss company limited by shares (AG) established in 2008 under the laws of Switzerland. The Offeror was established on September 28, 2021 under the laws of the Province of Ontario. The Offeror’s registered office is located at 100 King Street West, Suite 1600, 1 First Canadian Place, Toronto, Ontario, Canada M5X 1G5. The registered and head office of Viston is located at Haggenstreet 9, 9014 St. Gallen, Switzerland.

Viston was created to invest in renewable energies and clean technologies, as well as in the environmental protection industry. Viston aims to foster innovative technologies, environmentally-friendly and clean fossil fuels and to help shape the future of energy. Since October 2008, Viston has undertaken its research, development and transfer initiatives in Saint Gallen, Switzerland. Viston has been working to optimize and adapt these technologies to current market requirements to create well-engineered products. Viston’s work also includes the determination of technical and economic risks, as well as the search for financing opportunities.

Caution Regarding Forward-Looking Statements

Certain statements contained in this news release contain “forward-looking information” and are prospective in nature. Forward-looking information is not based on historical facts, but rather on current expectations and projections about future events, and are therefore subject to risks and uncertainties that could cause actual results to differ materially from the future results expressed or implied by the forward-looking information. Often, but not always, forward-looking information can be identified by the use of forward-looking words such as “plans”, “expects”, “intends”, “anticipates”, or variations of such words and phrases or statements that certain actions, events or results “may”, “could”, “should”, “would”, “might” or “will” be taken, occur or be achieved. Forward-looking information contained in this news release includes, but is not limited to, statements relating to the expectations regarding the process for, and timing of, obtaining regulatory approvals; expectations relating to the Offer; estimations regarding the issued and outstanding Common Shares, including as measured on a fully-diluted basis; and the satisfaction or waiver of the conditions to consummate the Offer.

Although the Offeror and Viston believe that the expectations reflected in such forward-looking information are reasonable, such statements involve risks and uncertainties, and undue reliance should not be placed on such statements. Certain material factors or assumptions are applied in making forward-looking information, and actual results may differ materially from those expressed or implied in such statements. Important factors that could cause actual results, performance or achievements of the Offeror or the completion of the Offer to differ materially from any future results, performance or achievements expressed or implied by such forward-looking information include, among other things, the ultimate outcome of any possible transaction between Viston and Petroteq, including the possibility that Petroteq will not accept a transaction with Viston or enter into discussions regarding a possible transaction, actions taken by Petroteq, actions taken by security holders of Petroteq in respect of the Offer, that the conditions of the Offer may not be satisfied or waived by Viston at the expiry of the Offer period, the ability of the Offeror to acquire 100% of the Common Shares through the Offer, the ability to obtain regulatory approvals and meet other closing conditions to any possible transaction, including any necessary shareholder approvals, potential adverse reactions or changes to business relationships resulting from the announcement, pendency or completion of the Offer transaction or any subsequent transaction, competitive responses to the announcement or completion of the Offer, unexpected costs, liabilities, charges or expenses resulting from the proposed transaction, exchange rate risk related to the financing arrangements, litigation relating to the proposed transaction, the inability to engage or retain key personnel, any changes in general economic and/or industry-specific conditions, industry risk, risks inherent in the running of the business of the Offeror or its affiliates, legislative or regulatory changes, Petroteq’s structure and its tax treatment, competition in the oil & gas industry, obtaining necessary approvals, financial leverage for additional funding requirements, capital requirements for growth, interest rates, dependence on skilled staff, labour disruptions, geographical concentration, credit risk, liquidity risk, changes in capital or securities markets and that there are no inaccuracies or material omissions in Petroteq’s publicly available information, and that Petroteq has not disclosed events which may have occurred or which may affect the significance or accuracy of such information. These are not necessarily all of the important factors that could cause actual results to differ materially from those expressed in any of the Offeror’s forward-looking information. Other unknown and unpredictable factors could also impact its results. Many of these risks and uncertainties relate to factors beyond the Offeror’s ability to control or estimate precisely. Consequently, there can be no assurance that the actual results or developments anticipated by the Offeror will be realized or, even if substantially realized, that they will have the expected consequences for, or effects on, the Offeror, its future results and performance.

Forward-looking information in this news release is based on the Offeror and Viston’s beliefs and opinions at the time the information is given, and there should be no expectation that this forward-looking information will be updated or supplemented as a result of new information, estimates or opinions, future events or results or otherwise, and each of the Offeror and Viston disavows and disclaims any obligation to do so except as required by applicable Law. Nothing contained herein shall be deemed to be a forecast, projection or estimate of the future financial performance of the Offeror or any of its affiliates or Petroteq.

Unless otherwise indicated, the information concerning Petroteq contained herein has been taken from or is based upon Petroteq’s and other publicly available documents and records on file with the Securities Regulatory Authorities and other public sources at the time of the Offer. Although the Offeror and Viston have no knowledge that would indicate that any statements contained herein relating to Petroteq, taken from or based on such documents and records are untrue or incomplete, neither the Offeror, Viston nor any of their respective officers or directors assumes any responsibility for the accuracy or completeness of such information, or for any failure by Petroteq to disclose events or facts that may have occurred or which may affect the significance or accuracy of any such information, but which are unknown to the Offeror and Viston.

Additional Information

This news release relates to a tender offer which Viston, through the Offeror, has made to Shareholders. The Offer is being made pursuant to a tender offer statement on Schedule TO (including the Offer to Purchase and Circular, the Notice of Variation and Extension dated February 1, 2022, the Notice of Extension, the letter of transmittal and other related offer documents) initially filed by Viston on October 25, 2021, as subsequently amended. These materials, as may be amended from time to time, contain important information, including the terms and conditions of the Offer. Subject to future developments, Viston (and, if applicable, Petroteq) may file additional documents with the Securities and Exchange Commission (the “SEC”). This press release is not a substitute for any tender offer statement, recommendation statement or other document Viston and/or Petroteq may file with the SEC in connection with the proposed transaction.

This communication does not constitute an offer to buy or solicitation of an offer to sell any securities. Investors and security holders of Petroteq are urged to read the tender offer statement (including the Offer to Purchase and Circular, the Notice of Variation and Extension dated February 1, 2022, the Notice of Extension, the letter of transmittal and other related offer documents) and any other documents filed with the SEC carefully in their entirety if and when they become available as they will contain important information about the proposed transaction. Any investors and security holders may obtain free copies of these documents (if and when available) and other documents filed with the SEC by Viston through the web site maintained by the SEC at www.sec.gov or by contacting Kingsdale Advisors, the Information Agent and Depositary in connection with the offer, within North America toll-free at 1-866-581-1024, outside North America at 1-416-867-2272 or by e-mail at This email address is being protected from spambots. You need JavaScript enabled to view it..

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¹ According to a list of registered shareholders provided by Petroteq’s Canadian legal counsel on February 17, 2022, Viston believes that there are 713,777,652 Common Shares currently issued and outstanding. Based on information provided by Kingsdale, Viston is currently estimating that there are 794,772,443 Common Shares, measured on a fully-diluted basis.

Media inquiries:
Hyunjoo Kim
Vice President, Strategic Communications and Marketing
Kingsdale Advisors,
Direct: 416-867-2357
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For assistance in depositing Petroteq Common Shares to the Offer, please contact:
Kingsdale Advisors
North American Toll Free: 1-866-581-1024
Outside North America: 1-416-867-2272
Email: This email address is being protected from spambots. You need JavaScript enabled to view it.
www.petroteqoffer.com

Expect 16% Adjusted EBITDA Growth in 2022 at Guidance Mid-Point

Full Year 2021 Results & Highlights

• Sales of $611.2 million, up 23% year-over-year;
• Net income of $1.8 million with diluted income per share of $0.01. Adjusted net income of $69.6 million with Adjusted diluted income per share of $0.51;
• Adjusted EBITDA of $227.6 million, up 18% year-over-year;
• Net cash from operations of $129.9 million, Adjusted Free Cash Flow of $93.2 million, and reduced net debt leverage ratio to 3.3x at year-end;
• Successful Transformation Complete – Launched Ecovyst as a High Growth, Pure-Play Catalysts and Services Company;
• Sales growth in catalyst used for renewable fuels nearly tripled from the prior year;

Fourth Quarter 2021 Results & Highlights

• Sales of $170.2 million, up 37% year-over-year;
• Net income of $7.8 million with diluted income per share of $0.06. Adjusted net income of $22.9 million with Adjusted diluted income per share of $0.17;
• Adjusted EBITDA of $63.2 million, up 38% year-over-year;
• Adjusted EBITDA margins of 30.6%, up 60 bps year-over-year (inclusive of 280 bps negative impact from sulfur cost pass through) as price more than offset higher costs, demonstrating resilient profitability;

2022 Financial Outlook

• Sales of $730 million to $750 million¹, up 21% from 2021 at the mid-point of the range;
• Sales of $150 million to $160 million for proportionate 50% share of Zeolyst Joint Venture, which is excluded from GAAP Sales;
• Adjusted EBITDA of $260 million to $270 million, up 16% from 2021 at the mid-point of the range;
• Adjusted Free Cash Flow of $115 million to $125 million;

¹Sales outlook for 2022 includes approximately $60 million of higher sales related to the pass through of higher sulfur costs, which negatively impact Adjusted EBITDA margin by over 200 basis points, but do not negatively impact Adjusted EBITDA.

Ecovyst results reflect continuing operations for the Ecoservices and Catalyst Technologies businesses, renamed from Refining Services and Catalysts, respectively. Financial results are on a continuing operations basis, which excludes the Performance Materials and Performance Chemicals businesses from all quarterly and yearly results presented, unless otherwise indicated.

Financial results and outlook include non-GAAP financial measures. These non-GAAP measures are more fully described and are reconciled from the respective measures determined under GAAP in “Presentation of Non-GAAP Financial Measures” and the attached appendix.

MALVERN, Pa.--(BUSINESS WIRE)--Ecovyst Inc. (NYSE:ECVT) (“Ecovyst” or the “Company”) today reported results for the fourth quarter and year ended December 31, 2021.

For the fourth quarter, sales of $170.2 million increased 37%, primarily by higher pricing to cover increased costs (inclusive of 14% from sulfur cost pass through) and stronger volumes, reflecting higher polyethylene catalyst and virgin acid demand as well as a broad-based rebound in demand across most other product categories. Net income was $7.8 million, a decrease of 83%, or $38 million, with $0.06 diluted income per share and Adjusted net income was $22.9 million with Adjusted diluted income per share of $0.17. Adjusted EBITDA totaled $63.2 million, an increase of 38%, or $17.3 million, driven by increased volumes, along with favorable earnings from the Zeolyst JV on higher demand for hydrocracking catalyst, and favorable product mix. Higher variable costs from inflationary items such as sulfur, natural gas, and logistics were offset by quarterly price adjustments with contracted customers. Adjusted EBITDA margins of 30.6% increased 60 bps versus the prior year period as stronger volume and price more than offset higher variable costs and the margin impact from the pass through of higher sulfur costs.

For the year, sales of $611.2 million increased 23%, a result of strong demand for polyethylene catalyst and higher regeneration services volume along with higher pricing (inclusive of 10% from sulfur cost pass through). The global macroeconomic recovery supported demand growth across both businesses. Net income was $1.8 million, a decrease of 97%, or $53 million, with $0.01 diluted income per share. Adjusted net income was $69.6 million with Adjusted diluted income per share of $0.51 per share. Adjusted EBITDA totaled $227.6 million, an increase of 18% year-over-year, or $35.0 million, driven by stronger volumes across the portfolio and favorable product mix. These factors more than offset headwinds from higher variable cost and elevated fixed costs driven by Winter Storm Uri in early 2021. Adjusted EBITDA margins of 30.7% are inclusive of 220 bps margin headwind from the pass through of higher sulfur costs.

“2021 was a highly successful and transformational year as the Ecovyst team achieved remarkable financial performance and delivered on our strategic vision to create a Simpler + Stronger enterprise,” said Belgacem Chariag, Ecovyst Chairman, President and Chief Executive Officer. “We are dedicated to the growth and success of our customers through operational excellence, customer centricity, and our innovation engine focused on sustainable solutions, which together enabled significant growth in 2021. Momentum built through the year and boosted profitability to pre-pandemic levels. Adjusted EBITDA in the second-half grew 40% compared to the first half, representative of the earnings potential of this high-quality portfolio, and demonstrating our resilience to inflating raw material and logistic costs. We enter 2022 with a compelling strategy, supportive secular trends, and confidence in our ability to achieve another year of strong earnings growth and cash generation.”

Review of Segment Results and Business Trends

The macroeconomic recovery gained momentum throughout 2021 and drove improved demand across most product categories, end-uses, and customers. Sequential quarterly sales continued to improve resulting in a strong second half of 2021. Inflationary factors increased through the year, namely from higher sulfur and energy costs, but customer contractual pass through mechanisms preserved earnings in Ecoservices, while targeted price increases addressed cost pressures in Catalyst Technologies.

Ecoservices

Our regeneration services support the production of alkylate, a high value gasoline component critical for meeting stringent gasoline standards and for producing premium grade gasoline. Tightening gasoline standards and growing demand for premium grade gasoline to power fuel efficient engines is supporting high alkylation utilization rates. Increased mining for metals and minerals to support low carbon technologies as well as strong demand for construction related materials is benefiting virgin sulfuric acid. Sustainability trends continue to favor the treatment services business because customers are seeking more sustainable waste solutions as offered by Ecoservices.

For the quarter ended December 31, 2021, sales of $142.0 million increased 38%. Sales increased on higher volumes of virgin sulfuric acid, favorable virgin sulfuric acid pricing, including pass-through of higher sulfur costs of approximately $17 million, as well as pass-through of higher labor and energy indexed costs in regeneration services. Adjusted EBITDA of $52.3 million increased 29% as a result of higher volume, favorable pricing and the benefit of the Chem32 acquisition that closed in March 2021 .

For the year, sales of $500.5 million increased 25%. With the onset of the global pandemic, demand for regeneration services was impacted by lower refinery utilization rates as fewer miles driven resulted in high gasoline inventories. Demand for regeneration services increased in 2021 as the recovery from the global pandemic resulted in higher demand for alkylate used to produce premium grade gasoline. Virgin sulfuric acid volumes improved slightly as the pandemic impact on industrial and automotive applications early in the year gave way to a recovery in the second half of the year. Adjusted EBITDA of $177.7 million increased 13.0% due to higher overall volumes, favorable pricing, improved cost efficiencies, and the benefit of the Chem32 acquisition.

Catalyst Technologies

Polyethylene demand remained resilient, driven by the growing consumer demand for films and packaging. Higher refinery utilization rates are expected to continue to increase catalyst demand for both traditional and renewable fuels as overall energy demand was strong during the beginning of 2022. Our catalyst sales into renewable diesel nearly tripled from the prior year. Emission control catalyst demand is expected to improve throughout 2022 as production of heavy duty diesel vehicles is anticipated to increase to satisfy pent up demand.

For the quarter ended December 31, 2021, Silica Catalysts sales of $28.2 million increased 35%. Polyethylene catalyst sales were strong in the fourth quarter with sales up over 20% driven by higher demand and share gains. Pricing was a favorable contributor as actions taken to offset inflationary pressure were realized in the quarter. Zeolyst JV sales of $36.3 million increased 26% driven largely by strong hydrocracking sales following improvements in refinery utilization. Catalyst Technologies Adjusted EBITDA of $23.4 million increased 58% driven primarily by volume growth and favorable mix.

For the year, Silica Catalysts sales of $110.7 million increased 18%, benefiting from higher sales volumes for polyethylene catalysts. Zeolyst JV sales of $131.3 million increased slightly on improved volumes. Strong demand for catalyst used in renewable fuels and emission control were partially offset by lower specialty and hydrocracking catalyst on timing of customer fixed bed change-outs. Adjusted EBITDA of $88.0 million increased 18% driven by the higher volumes and favorable mix.

Executing on our ESG Ambitions

We are focused on implementing and accelerating sustainability initiatives. We tailor our products for the specific needs of our customers and support them in addressing their technical and operational challenges. Through close collaboration with our global customers, we have been long standing suppliers of sustainability products and services, helping to address tightening global regulatory standards and changing consumer preferences.

For example, we continue to develop products that improve air quality through lower sulfur and NOx emissions in fuels. We are focused on the development of catalysts that help make plastics stronger and lighter enabling the recycling of mixed plastics to complete the plastics circularity curve. We also help enable higher alkylation for improved fuel economy and transform biomass into biofuels and synthetic rubber for green tires.

We also set clear and aggressive targets to address our own footprint related to GHG emissions, waste management, and product sustainability. With greater focus and resources, Ecovyst has expanded and accelerated the commercialization of its portfolio of sustainable products and solutions. Our innovation investment ratio, defined as the weighted average sustainability impact our projects will have on the environment, on new sustainable products is 85% in 2021, and we anticipate further advancement in the future. Fundamental to our future is the fact that approximately 75% of our end use sales for the year ended December 31, 2021 served consumer demand for more sustainable products and services.

Cash Flows and Balance Sheet

For the year ended December 31, 2021, consolidated cash flows from operating activities decreased $93.7 million to $129.9 million, compared to $223.6 million for the same period in 2020.

At December 31, 2021, the Company had cash and cash equivalents of $140.9 million and total debt outstanding of $895.5 million. The net debt to Adjusted EBITDA ratio was 3.3x as of December 31, 2021.

Conference Call and Webcast Details

On Friday, February 25, 2022, Ecovyst management will release its fourth quarter and full year 2021 results from continuing operations during a conference call and audio-only webcast scheduled for 11:00 a.m. Eastern Time.

Investors may listen to the conference call live via telephone by dialing 1 (866) 342-8591 (domestic) or 1 (203) 518-9713 (international) and use the participant code ECVTQ421.

An audio-only live webcast of the conference call and presentation materials can be accessed at https://investor.ecovyst.com. A replay of the conference call/webcast will be made available at https://investor.ecovyst.com/events-presentations.

Investor Contact:
Christopher M. Evans
(484) 617-1225
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General Investor Inquiries:
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About Ecovyst Inc.

Ecovyst Inc. and subsidiaries is a leading integrated and innovative global provider of specialty catalysts and services. We support customers globally through our strategically located network of manufacturing facilities. We believe that our products, which are predominantly inorganic, and services contribute to improving the sustainability of the environment.

We have two uniquely positioned specialty businesses: Ecoservices provides sulfuric acid recycling to the North American refining industry for the production of alkylate and provides on-purpose virgin sulfuric acid for water treatment, mining, and industrial applications; and; Catalyst Technologies provides finished silica catalysts and catalyst supports necessary to produce high strength and high stiffness plastics and, through its Zeolyst joint venture, supplies zeolites used for catalysts that remove nitric oxide from diesel engine emissions as well as sulfur from fuels during the refining process. For more information, see our website at https://www.ecovyst.com.

Presentation of Non-GAAP Financial Measures

In addition to the results provided in accordance with U.S. generally accepted accounting principles (“GAAP”) throughout this press release, the Company has provided non-GAAP financial measures — Adjusted EBITDA, Adjusted EBITDA margin, Adjusted free cash flow, Adjusted net income, Adjusted EPS, Adjusted diluted EPS, and net debt (collectively, “Non-GAAP Financial Measures”) — which present results on a basis adjusted for certain items. The Company uses these Non-GAAP Financial Measures for business planning purposes and in measuring its performance relative to that of its competitors. The Company believes that these Non-GAAP Financial Measures are useful financial metrics to assess its operating performance from period-to-period by excluding certain items that the Company believes are not representative of its core business. These Non-GAAP Financial Measures are not intended to replace, and should not be considered superior to, the presentation of the Company’s financial results in accordance with GAAP. The use of the Non-GAAP Financial Measures terms may differ from similar measures reported by other companies and may not be comparable to other similarly titled measures. These Non-GAAP Financial Measures are reconciled from the respective measures under GAAP in the appendix below.

The Company is not able to provide a reconciliation of the company’s non-GAAP financial guidance to the corresponding GAAP measures without unreasonable effort because of the inherent difficulty in forecasting and quantifying certain amounts necessary for such a reconciliation such as certain non-cash, nonrecurring or other items that are included in net income and EBITDA as well as the related tax impacts of these items and asset dispositions / acquisitions and changes in foreign currency exchange rates that are included in cash flow, due to the uncertainty and variability of the nature and amount of these future charges and costs.

Zeolyst Joint Venture

The company’s zeolite catalysts product group operates through its Zeolyst Joint Venture, which is accounted for as an equity method investment in accordance with GAAP. The presentation of the Zeolyst Joint Venture’s sales represents 50% of the sales of the Zeolyst Joint Venture. The Company does not record sales by the Zeolyst Joint Venture as revenue and such sales are not consolidated within the company’s results of operations. However, the company’s Adjusted EBITDA reflects the share of earnings of the Zeolyst Joint Venture that have been recorded as equity in net income from affiliated companies in the company’s consolidated statements of income for such periods and includes Zeolyst Joint Venture adjustments on a proportionate basis based on the company’s 50% ownership interest. Accordingly, the company’s Adjusted EBITDA margins are calculated including 50% of the sales of the Zeolyst Joint Venture for the relevant periods in the denominator.

Note on Forward-Looking Statements

Some of the information contained in this press release constitutes “forward-looking statements.” Forward-looking statements can be identified by words such as “anticipates,” “intends,” “plans,” “seeks,” “believes,” “estimates,” “expects,” “projects” and similar references to future periods. Forward-looking statements are based on our current expectations and assumptions regarding our business, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Examples of forward-looking statements include, but are not limited to, statements regarding our future results of operations, financial condition, liquidity, prospects, growth, strategies, capital allocation program, product and service offerings, including the impact of the COVID-19 pandemic on such items, expected demand trends and our 2022 financial outlook. Our actual results may differ materially from those contemplated by the forward-looking statements. We caution you, therefore, against relying on any of these forward-looking statements. They are neither statements of historical fact nor guarantees or assurances of future performance. Important factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to, regional, national or global political, economic, business, competitive, market and regulatory conditions, including the ongoing COVID-19 pandemic, tariffs and trade disputes, currency exchange rates and other factors, including those described in the sections titled “Risk Factors” and “Management Discussion & Analysis of Financial Condition and Results of Operations” in our filings with the SEC, which are available on the SEC’s website at www.sec.gov. These forward-looking statements speak only as of the date of this release. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by applicable law.

Investor Contact:
Christopher M. Evans
(484) 617-1225
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MIAMI--(BUSINESS WIRE)--World Fuel Services Corporation (NYSE: INT)

Fourth-Quarter 2021 Highlights

• Total gross profit of $215.2 million, up 30% year-over-year
• GAAP net income of $15.4 million, or $0.25 per diluted share
• Adjusted net income of $17.6 million, or $0.28 per diluted share
• Adjusted EBITDA of $56.2 million

Full Year 2021 Highlights

• Total gross profit of $788.2 million, down 7% year-over-year
• GAAP net income of $73.7 million, or $1.16 per diluted share
• Adjusted net income of $86.0 million, or $1.36 per diluted share
• Adjusted EBITDA of $241.3 million

“We delivered solid results in what remained a challenging operating environment in 2021, and we believe we are well-positioned to carry that momentum into 2022,” stated Michael J. Kasbar, chairman and chief executive officer. “With a broad global customer base in land, sea and air markets worldwide, we are uniquely positioned to support our customers with their ongoing energy requirements as well as an expanding suite of innovative and custom-tailored sustainability solutions.”

For the full year, our aviation segment generated gross profit of $386.9 million, an increase of 10% year-over-year, principally related to increased volumes driven by the continued recovery in demand for passenger air travel, partially offset by a reduction in our government-related activity in Afghanistan, which concluded in the third quarter. Our marine segment generated gross profit of $100.3 million, a decrease of 34% year-over-year, principally related to a decline in average margins in the core resale business when compared to the strong margins achieved in the prior year related to the supply imbalances arising from the implementation of the IMO 2020 regulations. Our land segment generated gross profit of $301.1 million, a decrease of 13% year-over-year, principally related to the sale of the MultiService payment solutions business in 2020.

“We generated $173 million of operating cash flow in 2021 and despite a significant increase in fuel prices, we returned nearly $80 million to shareholders through stock buybacks and our dividend during the year,” said Ira M. Birns, executive vice president and chief financial officer. “With the Flyers Energy acquisition complete, we begin 2022 poised for growth with a more ratable and leverageable business model when compared to prior years.”

Non-GAAP Financial Measures

This press release contains non-GAAP financial measures (collectively, the “Non-GAAP Measures”), including adjusted net income attributable to World Fuel Services, adjusted diluted earnings per common share, and adjusted earnings before interest, taxes, depreciation and amortization (“EBITDA”). The Non-GAAP Measures exclude acquisition and divestiture related expenses, restructuring costs, impairments, gains or losses on the extinguishment of debt and gains or losses on business dispositions primarily because we do not believe they are reflective of our core operating results.

We believe that the Non-GAAP Measures, when considered in conjunction with our financial information prepared in accordance with GAAP, are useful to investors to further aid in evaluating the ongoing financial performance of the Company and to provide greater transparency as supplemental information to our GAAP results.

Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. In addition, our presentation of the Non-GAAP Measures may not be comparable to the presentation of such metrics by other companies. Adjusted diluted earnings per common share is computed by dividing adjusted net income attributable to World Fuel Services and available to common shareholders by the sum of the weighted average number of shares of common stock, stock units, restricted stock entitled to dividends not subject to forfeiture and vested restricted stock units outstanding during the period and the number of additional shares of common stock that would have been outstanding if our outstanding potentially dilutive securities had been issued. Investors are encouraged to review the reconciliation of these Non-GAAP Measures to their most directly comparable GAAP financial measures in this press release and on our website.

Information Relating to Forward-Looking Statements

This release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding our beliefs and expectations about our performance in 2022, our ability to capitalize on our sustainability solutions and our unique position to meet our customers' energy requirements, as well as our view of our business model after the Flyers Energy acquisition. These forward-looking statements are qualified in their entirety by cautionary statements and risk factor disclosures contained in the Company’s Securities and Exchange Commission (“SEC”) filings, including the Company’s most recent Annual Report on Form 10-K filed with the SEC. Actual results may differ materially from any forward-looking statements due to risks and uncertainties, including, but not limited to: our ability to successfully implement our growth strategy and integrate acquired businesses and recognize the anticipated benefits, our ability to capitalize on new market opportunities, potential liabilities, limited indemnities and the extent of any insurance coverage, our ability to effectively manage the effects of the COVID-19 pandemic, the extent of the impact of the pandemic on ours and our customers' sales, profitability, operations and supply chains due to actions taken by governments and businesses to contain the virus, customer and counterparty creditworthiness and our ability to collect accounts receivable and settle derivative contracts, sudden changes in the market price of fuel or extremely high or low fuel prices that continue for an extended period of time, the availability of cash and sufficient liquidity to fund our working capital and strategic investment needs, any global economic impacts or other significant volatility that may arise from geopolitical events, wars and other civil unrest, adverse conditions in the markets or industries in which we or our customers and suppliers operate, such as the current global economic environment as a result of the coronavirus pandemic, our ability to manage the changes in supply and other market dynamics in the regions where we operate, our failure to comply with restrictions and covenants in our senior revolving credit facility and our senior term loans, including our financial covenants, our ability to successfully execute and achieve efficiencies, our ability to achieve the expected level of benefit from any restructuring activities and cost reduction initiatives, inflationary pressures and its impact on our customers or the global economy, unanticipated tax liabilities or adverse results of tax audits, assessments, or disputes, our ability to capitalize on new market opportunities, risks related to the complexity of the U.S. and foreign tax legislation and any subsequently issued regulations and our ability to accurately predict the impact on our effective tax rate and future earnings, our ability to effectively leverage technology and operating systems and realize the anticipated benefits, potential liabilities and the extent of any insurance coverage, actions that may be taken under the current administration in the U.S. that increase costs or otherwise negatively impact ours or our customers and suppliers businesses, the outcome of pending litigation and other proceedings, the impact of quarterly fluctuations in results, particularly as a result of seasonality, supply disruptions, border closures and other logistical difficulties that can arise when sourcing and delivering fuel in areas that are actively engaged in war or other military conflicts, our failure to effectively hedge certain financial risks associated with the use of derivatives, uninsured losses, the impact of climate change and natural disasters, adverse results in legal disputes, and other risks detailed from time to time in our SEC filings. In addition, other current or potential risks and uncertainties related to the coronavirus pandemic include, but are not limited to: notices from customers, suppliers and other third parties asserting force majeure or other bases for their non-performance, losses on hedging transactions with customers arising from the volatility in fuel prices, heightened risk of cybersecurity issues as digital technologies may become more vulnerable and experience a higher rate of cyber-attacks in a remote connectivity environment, reduction of our global workforce to adjust to market conditions, including increased costs associated with severance payments, retention issues, and an inability to hire employees when market conditions improve, the impact of asset impairments, including any impairment of the carrying value of our goodwill in our aviation and land segments, as well as other accounting charges if expected future demand for our products and services materially decreases, a structural shift in the global economy and its demand for fuel and related products and services as a result of changes in the way people work, travel and interact, or in connection with a global recession. New risks emerge from time to time and it is not possible for management to predict all such risk factors or to assess the impact of such risks on our business. Accordingly, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, changes in expectations, future events, or otherwise, except as required by law.

About World Fuel Services Corporation

Headquartered in Miami, Florida, World Fuel Services is a global energy management company involved in providing energy procurement advisory services, supply fulfillment and transaction and payment management solutions to commercial and industrial customers, principally in the aviation, marine and land transportation industries. World Fuel Services also offers natural gas and electricity, as well as energy advisory services, including programs for carbon offsets, sustainability solutions and renewable energy alternatives. World Fuel Services sells fuel and delivers services to its clients at more than 8,000 locations in more than 200 countries and territories worldwide.

For more information, visit www.wfscorp.com.

-- Some amounts in this press release may not add due to rounding. All percentages have been calculated using unrounded amounts --