|
Fuel Tech Reports 2016 Second Quarter Financial Results
Q2 2016 Overview
-
Revenues of $15.2 million compared to $18.7 million in Q2 2015
-
Gross profit of $5.6 million, or 36.8% of revenue, compared to $7.1
million, or 38.2% of revenue, in Q2 2015
-
Net loss was $2.6 million, or $0.11 per diluted share, compared to net
loss of $1.4 million, or $0.06 per diluted share, in Q2 2015
-
At June 30, 2016 total cash and equivalents of $19.4 million, or $0.84
per diluted share
-
No long-term debt
Fuel Tech, Inc. (NASDAQ:FTEK), a world leader in advanced
engineering solutions for the optimization of combustion systems and
emissions control in utility and industrial applications, today reported
financial results for the second quarter ("Q2") ended June 30, 2016.
Q2 2016 Results Overview
Consolidated revenues for Q2 2016 were $15.2 million as compared to
$18.7 million in Q2 2015, reflecting slower business activity within our
Air Pollution Control ("APC") technology segment, as well as lower
revenues at FUEL CHEM®.
Operating loss for Q2 2016 was $2.3 million as compared to an operating
loss of $2.2 million in Q2 2015. Net loss for Q2 2016 was $2.6 million,
or $0.11 per diluted share, compared to net loss of $1.4 million, or
$0.06 per diluted share, in the same period last year.
APC segment revenues in Q2 2016 declined by 9.5% to $10.0 million from
$11.1 million in Q2 2015.
APC gross profit decreased to $2.9 million from $3.3 million in Q2 2016.
Gross margin for Q2 2016 declined to 28.7% of segment revenues from
29.9% in Q2 2015, primarily due to declines in margins on certain
projects in China and Italy.
FUEL CHEM segment revenues declined to $5.1 million during Q2 2016 from
$7.6 million during Q2 2015. This segment will likely continue to be
affected by a reduction in electricity demand from coal-fired combustion
units and low natural gas prices, which leads to fuel switching,
unscheduled outages, and combustion units operating at less than
capacity. Further, the mild weather conditions in the U.S. during Q2
2016 resulted in soft demand. Despite lower revenues, gross margin
during Q2 2016 rose to 52.5% from 50.3% in Q2 2015.
The Fuel Conversion segment generated an operating loss of $0.8 million
in Q2 2016, reflecting the Company's continuing investment in developing
this potential new business.
Capital projects backlog in the APC segment stood at $11.6 million at
June 30, 2016 compared to $22.2 million at December 31, 2015, reflecting
a slower pace of U.S. bookings in Q2 2016. During Q2 2016, Fuel Tech
announced new project awards covering multiple geographies and solutions
with an aggregate value of $4.8 million, as well as an exclusive
agreement under which Fuel Tech has licensed its Selective Non-Catalytic
Reduction (SNCR) technology to ISGEC Heavy Engineering Ltd. (ISGEC).
Subsequent to the end of Q2 2016, the Company announced new project
awards totaling $2.3 million, which included the first order generated
under the contract with ISGEC. The Company believes that APC revenues in
2016 will approximate the same level as 2015.
Selling, general and administrative (SG&A) expenses for Q2 2016 declined
20% to $6.8 million, or 44.5% of revenues, from $8.4 million, or 45.0%
of revenues, in Q2 2015, reflecting the favorable impact of previously
announced cost cutting initiatives on employee-related costs,
professional and consulting fees, and travel expenses. These reductions
were offset by higher administrative costs associated with our foreign
operations.
Fuel Tech's research and development expenses for Q2 2016 increased to
$1.1 million from $1.0 million in Q2 2015, with increased spending
primarily related to ongoing projects associated with the Fuel
Conversion development initiative.
Year-to-Date Results Overview
Consolidated year-to-date revenues for the six months ended June 30,
2016 were $33.0 million as compared to $33.8 million in 2015, due
primarily to the reasons cited above.
Operating loss for the six months ended June 30, 2016 was $4.9 million
as compared to an operating loss of $4.7 million in 2015. Net loss was
$5.3 million, or $0.23 per diluted share, compared to net loss of $3.0
million, or $0.13 per diluted share in the same period last year.
Year-to-date APC segment revenues increased to $23.0 million from $17.9
million in the comparable prior year period due to the timing of project
bookings.
APC gross profit increased to $6.6 million, or 28.5% of segment
revenues, in the six months ended June 30, 2016 from $5.9 million, or
32.6% of segment revenues in the same period last year.
FUEL CHEM generated revenues of $10.0 million during the six-month
period ending June 30, 2016, down from revenues of $15.8 million in the
same prior year period, primarily for the reasons cited above. The gross
margins during 2016 and 2015 were 50.9% and 50.2%, respectively.
SG&A expenses for the six months ended June 30, 2016 and 2015 were $14.2
million and $16.6 million, respectively. On a total dollar basis, SG&A
for the year-to-date period decreased by $2.4 million, or 14.2%, for the
same reasons as Q2 2016.
Fuel Tech's research and development expenses for the year-to-date
period increased to $2.3 million from the comparable prior year amount
of $1.9 million. The increased spending levels are primarily related to
ongoing projects associated with our Fuel Conversion business
development initiative.
Vincent J. Arnone, President and Chief Executive Officer of Fuel Tech,
commented, “We recognize that we must continue to evolve and refine Fuel
Tech’s operating strategy in response to still-challenging end markets
served by our APC and FUEL CHEM business segments. We are focusing on
developing new technologies and relationships that allow us to grow in
existing and adjacent markets, expand our solutions portfolio, diversify
our revenue streams, and elevate our profile among potential customers.
“In that regard, we were very pleased to announce our exclusive
licensing agreement with ISGEC, one of India’s leading engineering
companies, as well the first order generated as a result of this
partnership. Agreements like this are an ideal way to expand Fuel Tech’s
global reach in a cost-effective manner. We are also pursuing potential
in-licensing opportunities, where we can leverage Fuel Tech’s existing
global sales channels to bring relevant and exciting products to market.
We are pleased with the progress being made at our new Fuel Conversion
business segment. As we advance through 2016, our attention is on
commercial development and expansion. Product engineering and
enhancement continue as part of a collaborative effort with potential
end users. We are also evaluating various build-out strategies and
potential manufacturing scenarios, including pursuing ways to accelerate
market introduction while minimizing associated capital requirements.
This process remains quite fluid, however we are encouraged by our
progress to date.”
Mr. Arnone concluded, “We also continue to align our cost structure with
the current market environment, and are on plan to realize annual
corporate cost savings of approximately $5.0 million. Our financial
position is strong. At June 30, 2016, we reported total cash and cash
equivalents of $19.4 million, or $0.84 per diluted share, and no
long-term debt.”
Conference Call
Management will host a conference call on Wednesday, August 10, 2016 at
9:00 AM ET to discuss the results.
Interested parties may participate in the call by dialing:
· (877) 423-9820 (Domestic) or
· (201) 493-6749 (International)
The conference call will also be accessible via the Upcoming Events
section of the Company’s web site at www.ftek.com.
For those who cannot listen to the live broadcast, an online replay will
be available at www.ftek.com,
or a phone replay will be available through August 17, 2016 by dialing
(877) 660-6853 (domestic) or (201) 612-7415 (international) and entering
the passcode 13642095.
About Fuel Tech
Fuel Tech is a leading technology company engaged in the worldwide
development, commercialization and application of state-of-the-art
proprietary technologies for air pollution control, process
optimization, and advanced engineering services. These technologies
enable customers to produce both energy and processed materials in a
cost-effective and environmentally sustainable manner.
The Company’s nitrogen oxide (NOx) reduction technologies include
advanced combustion modification techniques and post-combustion NOx
control approaches, including NOxOUT®, HERT™, and Advanced SNCR systems,
ASCR™ Advanced Selective Catalytic Reduction systems, and I-NOx
Integrated NOx Reduction Systems, which utilize various combinations of
these systems, along with the ULTRA™ process for safe ammonia
generation. These technologies have established Fuel Tech as a leader in
NOx reduction, with installations on over 900 units worldwide.
Fuel Tech’s technologies for particulate control include Electrostatic
Precipitator (ESP) products and services including complete turnkey
capability for ESP retrofits, with experience on units up to 700 MW.
Flue gas conditioning (FGC) systems include treatment using sulfur
trioxide (SO3) and ammonia (NH3) based conditioning to improve the
performance of ESPs by modifying the properties of fly ash particles.
Fuel Tech’s particulate control technologies have been installed on more
than 125 units worldwide.
The Company’s FUEL CHEM®technology revolves around the unique
application of chemicals to improve the efficiency, reliability, fuel
flexibility, boiler heat rate, and environmental status of combustion
units by controlling slagging, fouling, corrosion, opacity and improving
boiler operations. The Company has experience with this technology, in
the form of a customizable FUEL CHEM program, on over 110 units.
Fuel Tech also provides a range of services, including boiler tuning and
selective catalytic reduction(SCR) optimization services. In addition,
flow corrective devices and physical and computational modeling services
are available to optimize flue gas distribution and mixing in both power
plant and industrial applications. Many of Fuel Tech’s products and
services rely heavily on the Company’s exceptional Computational Fluid
Dynamics modeling capabilities, which are enhanced by internally
developed, high-end visualization software. These capabilities, coupled
with the Company’s innovative technologies and multi-disciplined team
approach, enable Fuel Tech to provide practical solutions to some of our
customers’ most challenging problems. For more information, visit Fuel
Tech’s web site at www.ftek.com.
This press release may contain statements of a forward-looking nature
regarding future events. These statements are only predictions and
actual events may differ materially. Please refer to documents
that Fuel Tech files from time to time with the Securities and Exchange
Commission for a discussion of certain factors that could cause actual
results to differ materially from those contained in the forward-looking
statements.
|
|
|
FUEL TECH, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in
thousands, except share and per share data)
|
|
|
|
|
|
|
|
June 30,
2016
|
|
|
December 31,
2015
|
|
|
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
$
|
12,426
|
|
|
|
$
|
21,684
|
|
|
Restricted cash
|
|
|
|
7,020
|
|
|
|
—
|
|
|
Marketable securities
|
|
|
|
7
|
|
|
|
19
|
|
|
Accounts receivable, net of allowance for doubtful accounts of
$1,894 and $1,772, respectively
|
|
|
|
22,429
|
|
|
|
23,060
|
|
|
Inventories
|
|
|
|
1,498
|
|
|
|
1,653
|
|
|
Prepaid expenses and other current assets
|
|
|
|
2,390
|
|
|
|
3,889
|
|
|
Prepaid income taxes
|
|
|
|
659
|
|
|
|
1,857
|
|
|
Deferred income taxes
|
|
|
|
—
|
|
|
|
239
|
|
|
Total current assets
|
|
|
|
46,429
|
|
|
|
52,401
|
|
|
Property and equipment, net of accumulated depreciation of $24,268
and $23,414, respectively
|
|
|
|
11,247
|
|
|
|
12,001
|
|
|
Goodwill
|
|
|
|
2,116
|
|
|
|
2,116
|
|
|
Other intangible assets, net of accumulated amortization of $8,313
and $7,452, respectively
|
|
|
|
6,381
|
|
|
|
7,144
|
|
|
Deferred income taxes
|
|
|
|
1,205
|
|
|
|
992
|
|
|
Restricted cash
|
|
|
|
—
|
|
|
|
—
|
|
|
Other assets
|
|
|
|
1,320
|
|
|
|
1,357
|
|
|
Total assets
|
|
|
|
$
|
68,698
|
|
|
|
$
|
76,011
|
|
|
Liabilities and Shareholders’ Equity
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
|
|
$
|
7,267
|
|
|
|
$
|
8,942
|
|
|
Accrued liabilities:
|
|
|
|
|
|
|
|
|
Employee compensation
|
|
|
|
1,556
|
|
|
|
1,645
|
|
|
Other accrued liabilities
|
|
|
|
4,487
|
|
|
|
5,949
|
|
|
Total current liabilities
|
|
|
|
13,310
|
|
|
|
16,536
|
|
|
Other liabilities
|
|
|
|
503
|
|
|
|
501
|
|
|
Total liabilities
|
|
|
|
13,813
|
|
|
|
17,037
|
|
|
Commitments and contingencies
|
|
|
|
|
|
|
|
|
Shareholders’ equity:
|
|
|
|
|
|
|
|
|
Common stock, $.01 par value, 40,000,000 shares authorized,
23,800,924 and
23,419,008 shares issued, and 23,446,035, and
23,167,216 shares outstanding, respectively
|
|
|
|
238
|
|
|
|
234
|
|
|
Additional paid-in capital
|
|
|
|
136,429
|
|
|
|
135,394
|
|
|
Accumulated deficit
|
|
|
|
(79,398
|
)
|
|
|
(74,132
|
)
|
|
Accumulated other comprehensive loss
|
|
|
|
(1,246
|
)
|
|
|
(1,556
|
)
|
|
Nil coupon perpetual loan notes
|
|
|
|
76
|
|
|
|
76
|
|
|
Treasury stock, at cost
|
|
|
|
(1,214
|
)
|
|
|
(1,042
|
)
|
|
Total shareholders’ equity
|
|
|
|
54,885
|
|
|
|
58,974
|
|
|
Total liabilities and shareholders’ equity
|
|
|
|
$
|
68,698
|
|
|
|
$
|
76,011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FUEL TECH, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in
thousands, except share and per-share data)
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
|
Six Months Ended
June 30,
|
|
|
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
Revenues
|
|
|
|
$
|
15,175
|
|
|
|
$
|
18,683
|
|
|
|
$
|
32,997
|
|
|
|
$
|
33,786
|
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales
|
|
|
|
9,595
|
|
|
|
11,547
|
|
|
|
21,369
|
|
|
|
19,984
|
|
|
Selling, general and administrative
|
|
|
|
6,760
|
|
|
|
8,400
|
|
|
|
14,239
|
|
|
|
16,603
|
|
|
Research and development
|
|
|
|
1,122
|
|
|
|
982
|
|
|
|
2,280
|
|
|
|
1,854
|
|
|
|
|
|
|
17,477
|
|
|
|
20,929
|
|
|
|
37,888
|
|
|
|
38,441
|
|
|
Operating (loss)
|
|
|
|
(2,302
|
)
|
|
|
(2,246
|
)
|
|
|
(4,891
|
)
|
|
|
(4,655
|
)
|
|
Interest expense
|
|
|
|
—
|
|
|
|
(3
|
)
|
|
|
—
|
|
|
|
(30
|
)
|
|
Interest income
|
|
|
|
6
|
|
|
|
7
|
|
|
|
16
|
|
|
|
14
|
|
|
Other expense
|
|
|
|
(221
|
)
|
|
|
(65
|
)
|
|
|
(484
|
)
|
|
|
(161
|
)
|
|
(Loss) before income taxes
|
|
|
|
(2,517
|
)
|
|
|
(2,307
|
)
|
|
|
(5,359
|
)
|
|
|
(4,832
|
)
|
|
Income tax (expense) benefit
|
|
|
|
(111
|
)
|
|
|
936
|
|
|
|
94
|
|
|
|
1,807
|
|
|
Net (loss)
|
|
|
|
$
|
(2,628
|
)
|
|
|
$
|
(1,371
|
)
|
|
|
$
|
(5,265
|
)
|
|
|
$
|
(3,025
|
)
|
|
Net (loss) per common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
$
|
(0.11
|
)
|
|
|
$
|
(0.06
|
)
|
|
|
$
|
(0.23
|
)
|
|
|
$
|
(0.13
|
)
|
|
Diluted
|
|
|
|
$
|
(0.11
|
)
|
|
|
$
|
(0.06
|
)
|
|
|
$
|
(0.23
|
)
|
|
|
$
|
(0.13
|
)
|
|
Weighted-average number of common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
23,381,000
|
|
|
|
23,140,000
|
|
|
|
23,283,000
|
|
|
|
23,034,000
|
|
|
Diluted
|
|
|
|
23,381,000
|
|
|
|
23,140,000
|
|
|
|
23,283,000
|
|
|
|
23,034,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FUEL TECH, INC.
CONSOLIDATED STATEMENTS OF
COMPREHENSIVE INCOME (LOSS)
(Unaudited)
(in thousands)
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
|
Six Months Ended
June 30,
|
|
|
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
Net (loss)
|
|
|
|
$
|
(2,628
|
)
|
|
|
$
|
(1,371
|
)
|
|
|
$
|
(5,265
|
)
|
|
|
$
|
(3,025
|
)
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation adjustments
|
|
|
|
(111
|
)
|
|
|
97
|
|
|
|
318
|
|
|
|
(64
|
)
|
|
Unrealized (losses) from marketable securities, net of tax
|
|
|
|
(5
|
)
|
|
|
—
|
|
|
|
(8
|
)
|
|
|
—
|
|
|
Total other comprehensive income (loss)
|
|
|
|
(116
|
)
|
|
|
97
|
|
|
|
310
|
|
|
|
(64
|
)
|
|
Comprehensive (loss)
|
|
|
|
$
|
(2,744
|
)
|
|
|
$
|
(1,274
|
)
|
|
|
$
|
(4,955
|
)
|
|
|
$
|
(3,089
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FUEL TECH, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in
thousands)
|
|
|
|
|
|
|
|
Six Months Ended
June 30,
|
|
|
|
|
|
2016
|
|
|
2015
|
|
Operating Activities
|
|
|
|
|
|
|
|
|
Net loss
|
|
|
|
$
|
(5,265
|
)
|
|
|
$
|
(3,025
|
)
|
|
Adjustments to reconcile net loss to net cash (used in) provided by
operating activities:
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
|
926
|
|
|
|
1,049
|
|
|
Amortization
|
|
|
|
861
|
|
|
|
1,075
|
|
|
Loss (Gain) on disposal of equipment
|
|
|
|
26
|
|
|
|
(26
|
)
|
|
Provision for doubtful accounts
|
|
|
|
151
|
|
|
|
—
|
|
|
Deferred income taxes
|
|
|
|
(10
|
)
|
|
|
(167
|
)
|
|
Stock-based compensation
|
|
|
|
1,041
|
|
|
|
833
|
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
|
173
|
|
|
|
2,378
|
|
|
Inventories
|
|
|
|
149
|
|
|
|
(279
|
)
|
|
Prepaid expenses, other current assets and other non-current assets
|
|
|
|
2,861
|
|
|
|
183
|
|
|
Accounts payable
|
|
|
|
(1,630
|
)
|
|
|
1,674
|
|
|
Accrued liabilities and other non-current liabilities
|
|
|
|
(1,482
|
)
|
|
|
(5,002
|
)
|
|
Net cash (used in) operating activities
|
|
|
|
(2,199
|
)
|
|
|
(1,307
|
)
|
|
Investing Activities
|
|
|
|
|
|
|
|
|
Purchases of property, equipment and patents
|
|
|
|
(302
|
)
|
|
|
(383
|
)
|
|
Proceeds from the sale of equipment
|
|
|
|
1
|
|
|
|
26
|
|
|
Net cash (used in) investing activities
|
|
|
|
(301
|
)
|
|
|
(357
|
)
|
|
Financing Activities
|
|
|
|
|
|
|
|
|
Proceeds on short-term borrowings
|
|
|
|
—
|
|
|
|
—
|
|
|
Change in restricted cash
|
|
|
|
(7,020
|
)
|
|
|
—
|
|
|
Excess tax benefit from exercises of stock options
|
|
|
|
—
|
|
|
|
—
|
|
|
Treasury shares withheld
|
|
|
|
(172
|
)
|
|
|
(252
|
)
|
|
Net cash (used in) financing activities
|
|
|
|
(7,192
|
)
|
|
|
(1,888
|
)
|
|
Effect of exchange rate fluctuations on cash
|
|
|
|
434
|
|
|
|
(118
|
)
|
|
Net decrease in cash and cash equivalents
|
|
|
|
(9,258
|
)
|
|
|
(3,670
|
)
|
|
Cash and cash equivalents at beginning of period
|
|
|
|
21,684
|
|
|
|
18,637
|
|
|
Cash and cash equivalents at end of period
|
|
|
|
$
|
12,426
|
|
|
|
$
|
14,967
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FUEL TECH, INC.
|
|
BUSINESS SEGMENT FINANCIAL DATA
|
|
(Unaudited)
|
|
(in thousands)
|
|
|
Information concerning Fuel Tech’s reporting segment net sales and gross
margin are provided below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended June 30, 2016
|
|
|
|
Air Pollution
Control Segment
|
|
|
FUEL CHEM
Segment
|
|
|
Fuel Conversion
Segment
|
|
|
Other
|
|
|
Total
|
|
Revenues from external customers
|
|
|
|
$
|
10,031
|
|
|
|
$
|
5,144
|
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
|
$
|
15,175
|
|
|
Cost of sales
|
|
|
|
|
(7,152
|
)
|
|
|
|
(2,443
|
)
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
(9,595
|
)
|
|
Gross margin
|
|
|
|
|
2,879
|
|
|
|
|
2,701
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
5,580
|
|
|
Selling, general and administrative
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
(6,760
|
)
|
|
|
|
(6,760
|
)
|
|
Research and development
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
(827
|
)
|
|
|
|
(295
|
)
|
|
|
|
(1,122
|
)
|
|
Operating income (loss)
|
|
|
|
$
|
2,879
|
|
|
|
$
|
2,701
|
|
|
|
$
|
(827
|
)
|
|
|
$
|
(7,055
|
)
|
|
|
$
|
(2,302
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended June 30, 2015
|
|
|
|
Air Pollution
Control Segment
|
|
|
FUEL CHEM
Segment
|
|
|
Fuel Conversion
Segment
|
|
|
Other
|
|
|
Total
|
|
Revenues from external customers
|
|
|
|
$
|
11,087
|
|
|
|
$
|
7,596
|
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
|
$
|
18,683
|
|
|
Cost of sales
|
|
|
|
|
(7,769
|
)
|
|
|
|
(3,778
|
)
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
(11,547
|
)
|
|
Gross margin
|
|
|
|
|
3,318
|
|
|
|
|
3,818
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
7,136
|
|
|
Selling, general and administrative
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
(8,400
|
)
|
|
|
|
(8,400
|
)
|
|
Research and development
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
(629
|
)
|
|
|
|
(353
|
)
|
|
|
|
(982
|
)
|
|
Operating income (loss)
|
|
|
|
$
|
3,318
|
|
|
|
$
|
3,818
|
|
|
|
$
|
(629
|
)
|
|
|
$
|
(8,753
|
)
|
|
|
$
|
(2,246
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six months ended June 30, 2016
|
|
|
|
Air Pollution
Control Segment
|
|
|
FUEL CHEM
Segment
|
|
|
Fuel Conversion
Segment
|
|
|
Other
|
|
|
Total
|
|
Revenues from external customers
|
|
|
|
$
|
23,021
|
|
|
|
$
|
9,976
|
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
|
$
|
32,997
|
|
|
Cost of sales
|
|
|
|
|
(16,471
|
)
|
|
|
|
(4,898
|
)
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
(21,369
|
)
|
|
Gross margin
|
|
|
|
|
6,550
|
|
|
|
|
5,078
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
11,628
|
|
|
Selling, general and administrative
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
(14,239
|
)
|
|
|
|
(14,239
|
)
|
|
Research and development
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
(1,514
|
)
|
|
|
|
(766
|
)
|
|
|
|
(2,280
|
)
|
|
Operating income (loss)
|
|
|
|
$
|
6,550
|
|
|
|
$
|
5,078
|
|
|
|
$
|
(1,514
|
)
|
|
|
$
|
(15,005
|
)
|
|
|
$
|
(4,891
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six months ended June 30, 2015
|
|
|
|
Air Pollution
Control Segment
|
|
|
FUEL CHEM
Segment
|
|
|
Fuel Conversion
Segment
|
|
|
Other
|
|
|
Total
|
|
Revenues from external customers
|
|
|
|
$
|
17,944
|
|
|
|
$
|
15,842
|
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
|
$
|
33,786
|
|
|
Cost of sales
|
|
|
|
|
(12,090
|
)
|
|
|
|
(7,894
|
)
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
(19,984
|
)
|
|
Gross margin
|
|
|
|
|
5,854
|
|
|
|
|
7,948
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
13,802
|
|
|
Selling, general and administrative
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
(16,603
|
)
|
|
|
|
(16,603
|
)
|
|
Research and development
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
(1,101
|
)
|
|
|
|
(753
|
)
|
|
|
|
(1,854
|
)
|
|
Operating income (loss)
|
|
|
|
$
|
5,854
|
|
|
|
$
|
7,948
|
|
|
|
$
|
(1,101
|
)
|
|
|
$
|
(17,356
|
)
|
|
|
$
|
(4,655
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note: Fuel Tech is an integrated company that segregates its
financial results into three reportable segments. The Air Pollution
Control technology segment includes technologies to reduce NOx emissions
in flue gas from boilers, incinerators, furnaces and other stationary
combustion sources. The FUEL CHEM®technology segment, which uses
chemical processes in combination with advanced CFD and CKM boiler
modeling, for the control of slagging, fouling, corrosion, opacity and
other sulfur trioxide-related issues in furnaces and boilers through the
addition of chemicals into the furnace using TIFI®Targeted In-Furnace
Injection™ technology. The Fuel Conversion segment represents CARBONITE®
fuel conversion process and technology, which can convert coals of
various grades into value-added products that are high in energy
content, carbon-rich and less pollutive. The “Other” classification
includes those profit and loss items not allocated by Fuel Tech to each
reportable segment.
|
|
|
FUEL TECH, INC.
|
|
GEOGRAPHIC INFORMATION
|
|
(Unaudited)
|
|
(in thousands)
|
|
|
Information concerning Fuel Tech’s operations by geographic area is
provided below. Revenues are attributed to countries based on the
location of the customer. Assets are those directly associated with
operations of the geographic area.
|
|
|
|
|
Three Months Ended
June 30,
|
|
|
Six Months Ended
June 30,
|
|
|
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
United States
|
|
|
|
$
|
12,255
|
|
|
$
|
11,901
|
|
|
$
|
26,685
|
|
|
$
|
24,476
|
|
Foreign
|
|
|
|
|
2,920
|
|
|
|
6,782
|
|
|
|
6,312
|
|
|
|
9,310
|
|
|
|
|
|
$
|
15,175
|
|
|
$
|
18,683
|
|
|
$
|
32,997
|
|
|
$
|
33,786
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
2016
|
|
|
December 31,
2015
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
United States
|
|
|
|
|
|
|
$
|
46,093
|
|
|
$
|
47,437
|
|
Foreign
|
|
|
|
|
|
|
|
22,605
|
|
|
|
28,574
|
|
|
|
|
|
|
|
|
$
|
68,698
|
|
|
$
|
76,011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FUEL TECH, INC.
RECONCILIATION OF GAAP NET LOSS TO
EBITDA AND ADJUSTED EBITDA
(Unaudited)
(in thousands)
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
|
Six Months Ended
June 30,
|
|
|
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
Net loss
|
|
|
|
$
|
(2,628
|
)
|
|
|
$
|
(1,371
|
)
|
|
|
$
|
(5,265
|
)
|
|
|
$
|
(3,025
|
)
|
|
Interest expense
|
|
|
|
—
|
|
|
|
3
|
|
|
|
—
|
|
|
|
30
|
|
|
Income tax (expense) benefit
|
|
|
|
111
|
|
|
|
(936
|
)
|
|
|
(94
|
)
|
|
|
(1,807
|
)
|
|
Depreciation expense
|
|
|
|
440
|
|
|
|
529
|
|
|
|
926
|
|
|
|
1,049
|
|
|
Amortization expense
|
|
|
|
427
|
|
|
|
532
|
|
|
|
861
|
|
|
|
1,075
|
|
|
EBITDA
|
|
|
|
(1,650
|
)
|
|
|
(1,243
|
)
|
|
|
(3,572
|
)
|
|
|
(2,678
|
)
|
|
Stock compensation expense
|
|
|
|
580
|
|
|
|
561
|
|
|
|
1,041
|
|
|
|
833
|
|
|
ADJUSTED EBITDA
|
|
|
|
$
|
(1,070
|
)
|
|
|
$
|
(682
|
)
|
|
|
$
|
(2,531
|
)
|
|
|
$
|
(1,845
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
To supplement the Company's consolidated financial statements presented
in accordance with generally accepted accounting principles in the
United States (GAAP), the Company has provided an Adjusted EBITDA
disclosure as a measure of financial performance. Adjusted EBITDA is
defined as net income (loss) before interest expense, income tax expense
(benefit), depreciation expense, amortization expense and stock
compensation expense. The Company's reference to these non-GAAP measures
should be considered in addition to results prepared in accordance with
GAAP standards, but are not a substitute for, or superior to, GAAP
results.
Adjusted EBITDA is provided to enhance investors' overall understanding
of the Company's current financial performance and ability to generate
cash flow, which we believe is a meaningful measure for our investor and
analyst communities. In many cases non-GAAP financial measures are
utilized by these individuals to evaluate Company performance and
ultimately determine a reasonable valuation for our common stock. A
reconciliation of Adjusted EBITDA to the nearest GAAP measure of net
income (loss) has been included in the above financial table.
View source version on businesswire.com: http://www.businesswire.com/news/home/20160809006478/en/ Copyright Business Wire 2016
Source: Business Wire
(August 9, 2016 - 5:25 PM EDT)
News by QuoteMedia
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