Exhibit 99.1
Date: October 28, 2003
Contact: Scott M. Schecter, Chief Financial Officer; Fuel-Tech N.V.,
(203) 425-9830
FUEL-TECH N.V. REPORTS THIRD QUARTER RESULTS;
Y/Y REVENUE & NET INCOME INCREASES 27% AND 248%, RESPECTIVELY
Stamford, CT, October 28, 2003 -- Fuel-Tech N.V., (Nasdaq: FTEK), a
world leader in advanced engineering solutions for the optimization of
combustion systems for utility and industrial customers, today reported results
for the third quarter and nine months ended September 30, 2003.
For the quarter, net sales increased 27% to $10.2 million, compared to
$8.0 million in the third quarter of 2002. Net income in the third quarter
increased 248% to $1.3 million, or $0.06 per diluted share, compared to
$379,000, or $0.02 per diluted share, last year. For the nine month period ended
September 30, 2003, net sales increased 32% to $28.2 million, compared to $21.3
million in the same period last year. Net income for the nine months was $1.4
million, or $0.06 per diluted share, compared to net income of $1.7 million, or
$0.08 per diluted share, in the same period last year.
Steven C. Argabright, President and Chief Operating Officer, commented,
"We are pleased with our results for the third quarter. This was a record
quarter for our FUEL CHEM(R) business, with revenues up 90% over last year. This
growth is attributable to our increased penetration and strong performance in
the Western coal-fueled utility market as well as an increase in our more
traditional oil-fueled business. We continue to be extremely excited about the
growth opportunities in our FUEL CHEM business. Plant managers from two large
utilities and a regional co-op have visited our successful Targeted-In-Furnace-
Injection application at Western Farmers' HUGO Station, and we believe
that we will have commitments for demonstrations at these and other utilities
between now and the end of the first quarter next year. We look forward to
strong revenue growth from this business and expect year-over-year growth in the
range of 75-100% in 2004."
"During the quarter, we simultaneously announced two agreements with
Martin Marietta Magnesia Specialties (MMMS). The first was the acquisition of
MMMS' fuel treatment chemical business, and the second was the signing of a
long-term chemical supply agreement. These agreements will allow us to continue
to offer the highest quality fuel treatment chemicals to our customers, as well
as provide additional revenue, market intelligence and an oil-fired customer
base which we can leverage with our technology."
Mr. Argabright continued, "Third quarter air pollution control revenues
were up 8% from last year, which was less than we had internally projected, but
a result of the current environment we are operating in. As we said in our last
press release, two things have led to a slowing in this business. First, recent
rulings related to New Source Review have caused our utility customers to
reassess compliance plans to ensure that they will meet their overall NOx
reduction requirements in the most cost-effective manner. Although we expect
these recent rulings to benefit us in the future, the impact in the near-term is
a delay in orders. Second, as we have discussed many times in the past, many
utilities are experiencing significant capital constraints. This, coupled with
depressed NOx allowance prices, the result of mild weather and weak demand for
power, has caused some utilities to delay capital spending and meet their
requirements on a short-term basis through the purchase of allowances and other
temporary means. It is important to note that these revenues are not going away,
but merely being postponed. We are doing everything we can to work with our
customers as they finalize their compliance plans, and we expect this business
to pick up in the second half of 2004 and be strong in 2005 and 2006."
Conference Call
As a reminder, Fuel-Tech N.V will be hosting a conference call at 10:00
AM ET on Tuesday, October 28, 2003, to further discuss these results. The call
will be simultaneously broadcast over the Internet at www.fueltechnv.com and can
be accessed under the subheading of "Investors" on the homepage.
About Fuel-Tech N.V.
Fuel-Tech N.V. is a leading technology company providing proprietary
advanced engineering solutions for the optimization of combustion systems for
utility and industrial customers. The Company's NOx reduction processes, which
include the NOxOUT(R), NOxOUT CASCADE(R), NOxOUT ULTRA(R), Rich Reagent
Injection (RRI) and NOxOUT SCR(R) technologies, have established Fuel-Tech N.V.
as a leader in post combustion NOx control systems, which are installed on over
300 units worldwide.
New technologies that have grown out of the core NOx reduction business
form the basis of the FUEL CHEM(R) and ACUITIV(TM) businesses. FUEL CHEM
technology centers around the unique application of chemicals to improve the
performance of combustion units while the Company's ACUITIV business includes
high-end visualization software that was developed as part of Fuel Tech's
sophisticated Computational Fluid Dynamics (CFD) modeling techniques utilized to
predict the behavior of industrial processes. The Company's FUEL CHEM products
are being applied to over 80 combustion units burning a variety of fuels. For
more information, visit Fuel-Tech N.V.'s web site at www.fueltechnv.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 N.V. 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.
(Tables to Follow)
FUEL-TECH N.V.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands of U.S. dollars, except share data)
September 30, December 31,
2003 2002
--------------- ---------------
(Unaudited)
Assets
Current assets:
Cash and cash equivalents $ 5,791 $ 10,939
Accounts receivable, net 9,661 8,849
Prepaid expenses and other current assets 1,456 1,164
------------- ---------------
Total current assets 16,908 20,952
Equipment, net of accumulated depreciation of
$5,867 and $5,118, respectively 2,182 2,123
Goodwill, net of accumulated amortization of
$924 2,119 2,119
Other intangible asset 1,298 -
Other 673 675
--------------- ---------------
Total assets $ 23,180 $ 25,869
=============== ===============
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $ 2,684 $ 5,065
Accrued expenses 1,733 1,940
--------------- ---------------
Total current liabilities 4,417 7,005
Long-term debt - 1,800
Other liabilities 260 259
--------------- ---------------
Total liabilities 4,677 9,064
Stockholders' equity:
Common stock, par value $0.01 per share,
authorized 40,000,000 shares, 19,895,503
and 19,613,817 shares issued, respectively 199 196
Additional paid-in capital 90,636 90,315
Accumulated deficit (71,753) (73,150)
Accumulated other comprehensive income 22 10
Treasury stock (1,133) (1,098)
Nil coupon perpetual loan notes 532 532
--------------- ---------------
Total stockholders' equity 18,503 16,805
--------------- ---------------
Total liabilities and stockholders' equity $ 23,180 $ 25,869
=============== ===============
FUEL-TECH N.V.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands of U.S. dollars, except share data)
Three Months Ended Nine Months Ended
September 30 September 30
2003 2002 2003 2002
---------------------- ----------------------
Net sales $ 10,178 $ 8,033 $ 28,182 $ 21,275
Costs and expenses:
Cost of sales 5,592 4,462 17,412 11,175
Selling, general and administrative 2,961 2,717 8,565 7,725
Research and development 314 394 920 1,041
-------- ------- ------- ---------
Operating income 1,311 460 1,285 1,334
(Loss) income from equity interest in affiliates - (27) - 196
Interest expense - (37) (25) (114)
Other income, net 6 (17) 140 254
--------- --------- --------- -------
Income before taxes 1,317 379 1,400 1,670
Income taxes - - - 50
---------- -------- -------- -------
Net income $ 1,317 $ 379 $ 1,400 $ 1,720
========= ======== ========= =======
Net income per common share:
Basic $ .07 $ .02 $ .07 $ .09
========== ========= =========== =========
Diluted $ .06 $ .02 $ .06 $ .08
========== ========= =========== =========
Average number of common shares outstanding:
Basic 19,744,000 19,454,000 19,629,000 19,299,000
========== ========== ========== ==========
Diluted 22,748,000 22,422,000 22,325,000 22,565,000
========== ========== ========== ==========