Exhibit 99.1
Date: March 3, 2005
Contact: Tracy H. Krumme, Director, Investor Relations, Fuel-Tech N.V.,
(203) 425-9830
Vincent J. Arnone, Chief Financial Officer; Fuel-Tech N.V.,
(630) 845-4500
FUEL-TECH N.V. REPORTS FOURTH QUARTER AND
YEAR-END RESULTS
--ANNUAL FUEL CHEM(R) REVENUES UP NEARLY 60%--
STAMFORD, CONN., MAR. 3, 2005 -- 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
fourth quarter and year ended December 31, 2004.
For the quarter, net sales were $7.8 million, up slightly from $7.6
million in the fourth quarter of 2003. Net income for the quarter was $1.4
million, or $0.06 per diluted share, versus a net loss of $280,000, or ($0.01)
per diluted share, in the comparable prior-year period.
Net sales for the year were $30.8 million, down from $35.7 million in
2003. Net income for the year was $1.7 million, or $0.08 per diluted share,
compared with $1.1 million, or $0.05 per diluted share, in 2003.
Net income for the fourth quarter and full year were favorably affected
by the recognition of a $1.5 million non-cash tax benefit related to the
anticipated utilization of net operating loss carryforwards. Based on a review
of historical taxable income and future projections, the Company believes that
the accounting for the net operating loss carryforwards is prudent. Excluding
this adjustment, net income for the quarter and full year ended December 31,
2004 was breakeven and $0.01 per diluted share, respectively.
Steven C. Argabright, President and Chief Operating Officer, commented,
"Revenues and operating income declined from 2003 levels as our air pollution
control (APC) business experienced an anticipated slowdown during the first half
of 2004. This was partially offset by a nearly 60% increase in FUEL CHEM(R)
revenues, marking another record year for this segment. FUEL CHEM's strong
performance was attributable to the increased penetration of our Targeted
In-Furnace Injection (TIFI) technology within the Western coal-fired utility
market, as well as in our more traditional oil-fired business. It is important
to note that these results were achieved despite an extended maintenance outage
at a key customer site and the delayed timing of certain start-ups on new
coal-fired accounts."
Mr. Argabright continued, "FUEL CHEM revenues in 2004 grew to a record
$16.2 million, up from $10.3 million in the prior year. We are very pleased with
these results and continue to be quite optimistic about future growth
opportunities. We made significant progress in our largest potential market,
increasing Western coal-fired boilers utilizing our TIFI technology from five to
11 by year-end. Thus far in 2005, we have announced three TIFI demonstrations
and a modeling order. These orders represent significant potential business from
three new domestic customers, including a major utility previously identified as
a high priority prospect, as well as a pilot-scale demonstration necessary to
enter the extensive, oil-fired market in Mexico. We expect additional orders for
demonstrations from both new and existing customers in the near future and look
forward to continued significant revenue growth from this business in 2005 and
beyond."
Mr. Argabright continued, "Although air pollution control revenues were
down from $25.4 million in 2003 to $14.6 million in 2004, we currently have a
backlog of approximately $17 million. As expected, we experienced a steady
pick-up in business in the second half of the year and, including the orders we
announced last week, have booked almost $22 million in new business during the
last nine months. Improving industry trends, including increased capital
spending by utilities as well as higher prices for NOx allowances, contributed
to this progress."
Mr. Argabright continued, "We are particularly excited by the
commercial relationships entered into with three of the nation's largest
electric utilities to supply our NOx reduction technologies. In May, an alliance
agreement was signed with Duke Power, covering as many as 24 units and expected
to provide significant revenue through 2007. At another major southeastern
utility, orders were received for five coal-fired boilers with additional orders
anticipated during 2005. Most recently, two full-scale, commercial NOxOUT(R)
Selective Non-Catalytic Reduction (SNCR) demonstration orders were received from
Tennessee Valley Authority (TVA), the country's largest public power provider.
These developments support our belief that the APC business will continue to
grow and see a steady stream of orders for years to come."
Mr. Argabright concluded, "Overall, 2004 was a breakthrough year for
the Company and will serve as a springboard for an extremely strong 2005. Our
TIFI technology is firmly positioned for further growth and our APC business is
poised to capitalize further on new commercial relationships. We are very
confident about our future prospects and look forward to significant revenue and
earnings growth."
CONFERENCE CALL
As a reminder, Fuel-Tech N.V will be hosting a telephone conference
call at 10:00 AM EST on Thursday, March 3rd, 2005, to discuss fourth quarter and
year-end results. This conference will simultaneously be 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 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. 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 325 units worldwide.
New technologies that have grown out of the core NOx reduction business
form the basis of the FUEL CHEM(R) business. FUEL CHEM technology centers around
the unique application of chemicals to improve the performance of combustion
units by controlling slagging, fouling, corrosion and opacity. The Company's
FUEL CHEM products are being applied to over 80 combustion units burning a wide
variety of fuels including coal, heavy oil, biomass, and municipal waste. Both
the NOx reduction and FUEL CHEM businesses rely heavily on the Company's
exceptional Computational Fluid Dynamics modeling skills, which are enhanced by
internally developed, high-end visualization software. 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 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 N.V.
CONSOLIDATED BALANCE SHEETS
(in thousands of U.S. dollars, except share data)
December 31
2004 2003
------------------------------------
ASSETS
Current assets:
Cash and cash equivalents $6,531 $7,812
Accounts receivable, net of allowances for doubtful
accounts of $74 and $311, respectively 7,358 6,095
Inventories 311 312
Deferred tax asset 500 -
Prepaid expenses and other current assets 1,096 795
------------------------------------
Total current assets 15,796 15,014
Equipment, net of accumulated depreciation of $7,209 and
$6,165, respectively 2,863 2,127
Goodwill, net of accumulated amortization of $924 2,119 2,119
Other intangible assets, net of accumulated amortization of
$24 1,177 1,274
Deferred tax asset 1,000 -
Other assets 799 1,064
------------------------------------
Total assets $23,754 $21,598
====================================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $2,705 $2,244
Accrued liabilities:
Employee compensation 706 797
Other accrued liabilities 937 947
------------------------------------
Total current liabilities 4,348 3,988
Other liabilities 328 299
------------------------------------
Total liabilities 4,676 4,287
Shareholders' equity:
Common Stock, par value $0.01 per share,
40,000,000 shares authorized, 19,529,952
and 19,621,503 shares issued, respectively 195 196
Additional paid-in capital 88,600 89,698
Accumulated deficit (70,335) (72,030)
Accumulated other comprehensive income 86 48
Treasury stock - (1,133)
Nil coupon perpetual loan notes 532 532
------------------------------------
Total shareholders' equity 19,078 17,311
------------------------------------
Total liabilities and shareholders' equity $23,754 $21,598
====================================
FUEL-TECH N.V.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands of U.S. dollars, except share data)
Three Months Ended Twelve Months Ended
December 31 December 31
2004 2003 2004 2003
-------------------- ---------------------
Net sales $ 7,751 $ 7,554 $ 30,832 $ 35,736
Costs and expenses:
Cost of sales 4,341 4,377 16,566 21,789
Selling, general and administrative 2,988 3,094 12,652 11,659
Research and development 347 367 1,242 1,287
-------- ------- ------- ---------
Operating income (loss) 75 (284) 372 1,001
Interest expense - - - (25)
Other (expense) income, net (47) 4 (83) 144
-------- --------- -------- --------
Income (loss) before taxes 28 (280) 289 1,120
Income tax benefit 1,406 - 1,406 -
-------- ---------- ------- --------
Net income (loss) $ 1,434 $ (280) $ 1,695 $1,120
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Net income (loss) per Common Share:
Basic $ .07 $ (.01) $ .09 $ .06
========== ========== ========= =========
Diluted $ .06 $ (.01) $ .08 $ .05
========== ========== ========= =========
Average number of Common Shares outstanding:
Basic 19,527,000 19,686,000 19,517,000 19,637,000
========== ========== ========== ==========
Diluted 22,239,000 19,686,000 22,155,000 22,412,000
========== ========== ========== ==========