ADA will commence work immediately on the ACI systems and will recognize project revenues in the current quarter. The ACI systems are scheduled for delivery between late summer of 2013 and the end of 2014. This agreement is expected to generate total revenues of approximately $20 million to ADA over the next 24 months if the customer elects to purchase all of the contracted systems.
The contract is the result of the recent EPA Mercury and Air Toxics Standard (MATS), which requires coal-fired power plants to reduce emissions of mercury and sulfuric, hydrochloric and other acid gases by April 2015. ADA believes that MATS and other emission control regulations will generate a total market in excess of $1 billion for ACI and Dry Sorbent Injection (DSI) systems, and the company expects to maintain a combined market share of at least 35%. Achieving this market position would generate over $300 million in revenues for ADA over the next three years. The enactment of MATS has recently created a significant increase in ACI and DSI procurement activities, and ADA has been active in its response to this market. ADA recently announced awards for DSI and ACI systems with a potential total value of $15 million. In addition to these awards, ADA has active bids on over $119 million for ACI systems and over $140 million for DSI systems.
Dr. Michael Durham, President and CEO of ADA, stated, “We are very pleased to announce this significant contract which puts us well ahead of our goal for a 35% market share. We expect that additional contracts for DSI and ACI systems will be awarded soon.”