UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2003
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ______ to ______
Commission file number: 000-21724
--------------
FUEL-TECH N.V.
(Exact name of registrant as specified in its charter)
Netherlands Antilles N.A.
--------------------- ----
(State of Incorporation) (I.R.S. Employer
Identification No.)
Fuel-Tech N.V. Fuel Tech, Inc.
(Registrant) (U.S. Operating Subsidiary)
Castorweg 22-24 Suite 703, 300 Atlantic Street
Curacao, Netherlands Antilles Stamford, CT 06901
(599) 9-461-3754 (203) 425-9830
(Address and telephone number of principal executive offices)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months and (2) has been subject to such filing requirements for
the past 90 days.
Yes X No__
-- --
Indicate by check mark whether the registrant is an accelerated filer (as
defined in rule 12b-2 under the Securities Exchange Act of 1934).
Yes X No__
-- --
As of July 25, 2003, there were outstanding 19,789,104 shares of Common Stock,
par value $0.01 per share, of the registrant.
===========================================================================
FUEL-TECH N.V.
Form 10-Q for the three-month period ended June 30, 2003
INDEX
Page
----
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Condensed Consolidated Balance Sheets as of 1
June 30, 2003 and December 31, 2002
Condensed Consolidated Statements of Operations for the 2
Three and Six Month Periods Ended June 30, 2003 and 2002
Condensed Consolidated Statements of Cash Flows for 3
the Six Month Periods Ended June 30, 2003 and 2002
Notes to the Condensed Consolidated Financial Statements 4
Item 2. Management's Discussion and Analysis of 9
Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures about Market Risk 11
Item 4. Controls and Procedures 11
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 12
Item 2. Changes in Securities 12
Item 3. Defaults upon Senior Securities 12
Item 4. Submission of Matters to a Vote of Security Holders 12
Item 5. Other Information 12
Item 6. Exhibits and Reports on Form 8-K 12
SIGNATURES 13
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
FUEL-TECH N.V.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands of U.S. dollars, except share data)
June 30, December 31,
2003 2002
------------- ----------
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 6,160 $ 10,939
Accounts receivable, net 8,994 8,849
Prepaid expenses and other current assets 1,407 1,164
--------- ---------
Total current assets 16,561 20,952
Equipment, net of accumulated depreciation of
5,593 and $5,118, respectively 2,305 2,123
Goodwill, net of accumulated amortization of
$924 2,119 2,119
Other 674 675
--------- ---------
Total assets $ 21,659 $ 25,869
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable 3,065 5,065
Accrued expenses 1,322 1,940
--------- ---------
Total current liabilities 4,387 7,005
Long-term debt - 1,800
Other liabilities 270 259
--------- ---------
Total liabilities 4,657 9,064
Stockholders' equity:
Common stock, par value $0.01 per share,
authorized 40,000,000 shares, 19,706,892
and 19,613,817 shares issued, respectively . . . . . . . 197 196
Additional paid-in capital . . . . . . . . . . . . . . . . 90,466 90,315
Accumulated deficit. . . . . . . . . . . . . . . . . . . . (73,068) (73,150)
Accumulated other comprehensive income . . . . . . . . . . 8 10
Treasury stock . . . . . . . . . . . . . . . . . . . . . . (1,133) (1,098)
Nil coupon perpetual loan notes 532 532
--------- --------
Total stockholders' equity 17,002 16,805
Total liabilities and stockholders' equity $ 21,659 $ 25,869
========= =========
See notes to condensed consolidated financial statements.
1
FUEL-TECH N.V.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands of U.S. dollars, except share data)
Three Months Ended Six Months Ended
June 30 June 30
2003 2002 2003 2002
--------- --------- --------- ---------
Net sales. . . . . . . . . . . . . . . . . . . . . . . . . $ 9,968 $ 8,021 $ 18,004 $ 13,242
Costs and expenses:
Cost of sales. . . . . . . . . . . . . . . . . . . . . . . 6,411 4,130 11,820 6,713
Selling, general and administrative. . . . . . . . . . . . 2,750 2,653 5,604 5,008
Research and development . . . . . . . . . . . . . . . . . 295 354 606 647
-------- -------- -------- --------
Operating income (loss). . . . . . . . . . . . . . . . . . 512 884 (26) 874
(Loss) income from equity interest in affiliates . . . . . - (15) - 223
Interest expense . . . . . . . . . . . . . . . . . . . . . (9) (34) (25) (77)
Other income, net. . . . . . . . . . . . . . . . . . . . . 97 194 134 271
-------- -------- -------- --------
Income before taxes. . . . . . . . . . . . . . . . . . . . 600 1,029 83 1,291
Income taxes . . . . . . . . . . . . . . . . . . . . . . . - - - 50
-------- -------- -------- --------
Net income . . . . . . . . . . . . . . . . . . . . . . . . $ 600 $ 1,029 $ 83 $ 1,341
======== ========== ========= ========
Net income per common share:
Basic . . . . . . . . . . . . . . . . . . . . . . . . $ .03 $ .05 $ - $ .07
======== ========== ========= ========
Diluted . . . . . . . . . . . . . . . . . . . . . . . $ .03 $ .05 $ - $ .06
======== ========== ========= ========
Average number of common shares outstanding:
Basic . . . . . . . . . . . . . . . . . . . . . . . 19,582,000 19,310,000 19,571,000 19,247,000
========== ========== ========== ==========
Diluted . . . . . . . . . . . . . . . . . . . . . . . 22,147,000 22,733,000 22,089,000 22,675,000
========== ========== ========== ==========
See notes to condensed consolidated financial statements.
2
FUEL-TECH N.V.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands of U.S. dollars)
Six Months Ended
June 30
2003 2002
--------- --------
OPERATING ACTIVITIES
Net cash (used in) provided by
operating activities . . . . . . . . . . . . . . . . . $ (2,426) $ 2,654
--------- ---------
INVESTING ACTIVITIES
Repayment from affiliate. . . . . . . . . . . . . . . . . - 250
Proceeds from sale of equipment . . . . . . . . . . . . . - 17
Purchases of equipment and patents. . . . . . . . . . . . (668) (598)
--------- -------
Net cash used in investing activities . . . . . . . . . . (668) (331)
--------- -------
FINANCING ACTIVITIES
Exercise of stock options . . . . . . . . . . . . . . . . 153 465
Purchase of treasury shares . . . . . . . . . . . . . . . (35) -
Repayment of borrowings . . . . . . . . . . . . . . . . . (1,800) (450)
--------- -------
Net cash (used in) provided by
financing activities . . . . . . . . . . . . . . . . . (1,682) 15
--------- -------
Effect of exchange rate fluctuations on cash. . . . . . . (3) 38
--------- -------
NET (DECREASE) INCREASE IN CASH AND
CASH EQUIVALENTS . . . . . . . . . . . . . . . . . . . (4,779) 2,376
Cash and cash equivalents at beginning
of period. . . . . . . . . . . . . . . . . . . . . . . 10,939 9,338
--------- -------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD. . . . . . . . . . . . . . . . . . . . . $ 6,160 $ 11,714
========== =========
See notes to condensed consolidated financial statements.
3
FUEL-TECH N.V.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2003
(Unaudited)
NOTE A: BASIS OF PRESENTATION
The accompanying unaudited, condensed, consolidated financial statements
have been prepared in accordance with generally accepted accounting principles
for interim financial information and with the instructions to Form 10-Q and
Article 10 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered necessary for a fair
presentation of the results of operations for the periods covered have been
included. Operating results for the six-month period ended June 30, 2003, are
not necessarily indicative of the results that may be expected for the year
ending December 31, 2003.
The balance sheet at December 31, 2002, has been derived from the audited
financial statements at that date but does not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements.
For further information, refer to the consolidated financial statements and
footnotes thereto included in Fuel-Tech N.V.'s annual report on Form 10-K for
the year ended December 31, 2002.
Fuel-Tech N.V. through its subsidiaries (the "Company"), is a technology
company active in the business of air pollution control. The Company,
incorporated in 1987 under the laws of the Netherlands Antilles, is registered
at Castorweg 22--24 in Cura ao under No. 1334/N.V.
4
NOTE B: EARNINGS PER SHARE DATA
Basic earnings per share excludes the dilutive effects of stock options and
warrants and of the nil coupon non-redeemable convertible unsecured loan notes.
Diluted earnings per share includes the dilutive effect of stock options and
warrants and of the nil coupon non-redeemable convertible unsecured loan notes.
The following table sets forth the weighted-average shares (in thousands) used
in calculating the earnings per share for the three and six-month periods ended
June 30, 2003 and 2002:
Three Six
Months Ended Months Ended
2003 2002 2003 2002
------- ------- ------- -------
Basic weighted-average shares. . . 19,582 19,310 19,571 19,247
Conversion of unsecured loan notes 85 85 85 85
Unexercised options and warrants . 2,480 3,338 2,433 3,343
------- ------- ------- -------
Diluted weighted-average shares. . 22,147 22,733 22,089 22,675
======= ======= ======= =======
NOTE C: TOTAL COMPREHENSIVE (LOSS) INCOME
Total comprehensive income for the Company is comprised of net income, the
impact of foreign currency translation, and the change in fair value of the
interest rate swap for the three and six-month periods ended June 30, 2003 and
2002. Total comprehensive income was $592,000 and $1,077,000 for the
three-month periods ended June 30, 2003 and 2002, respectively. Total
comprehensive income was $81,000 and $1,405,000 for the six month periods ended
June 30, 2003 and 2002, respectively.
For the three months For the six months
ended June 30 ended June 30
-------------------------- --------------------
2003 2002 2003 2002
--------- ---------- --------- ---------
Comprehensive income:
Net income . . . . . . . . . $ 600,000 $1,029,000 $ 83,000 $1,341,000
Foreign currency translation (8,000) 36,000 (2,000) 38,000
Change in fair value of
interest rate swap . . . . - 12,000 - 26,000
--------- ---------- --------- ----------
$ 592,000 $1,077,000 $ 81,000 $1,405,000
========= ========== ========= ==========
5
NOTE D: DERIVATIVE FINANCIAL INSTRUMENTS
Interest Rate Risk Management:
The Company is exposed to interest rate risk due to its long-term debt
arrangement. The Company does not currently use any derivative instruments to
manage exposure to interest rate changes.
Foreign Currency Risk Management:
The Company's earnings and cash flow are subject to fluctuations due to
changes in foreign currency exchange rates. The Company does not enter into
foreign currency forward contracts or into foreign currency option contracts to
manage this risk due to the immaterial nature of the transactions involved.
6
NOTE E: STOCK-BASED COMPENSATION
Fuel Tech accounts for stock option grants in accordance with Accounting
Principles Board (APB) Opinion No. 25, "Accounting for Stock Issued to
Employees." Under Fuel Tech's current plans, options may be granted at not less
than the fair market value on the date of grant, and therefore, no compensation
expense is recognized for the stock options granted.
If compensation expense for Fuel Tech's plans had been determined based on
the fair value at the grant dates for awards under its plans, consistent with
the method described in SFAS No. 123, "Accounting for Stock-Based Compensation,"
Fuel Tech's net income (loss) and income (loss) per share would have been
adjusted as follows for the three and six-month periods ended June 30, 2003 and
2002:
For the three months For the six months
(in thousands) . . . . . ended June 30 ended June 30
2003 2002 2003 2002
------- ------- ------ ------
Net income (loss)
As reported. . . . . . $ 600 $ 1,029 $ 83 $ 1,341
As adjusted. . . . . . 334 596 (339) 760
Basic and diluted
income (loss) per
share:
Basic - as reported. . $ .03 $ .05 $ .00 $ .07
Basic - as adjusted. . $ .02 $ .03 $ (.02) $ .04
Diluted - as reported. $ .03 $ .05 $ .00 $ .06
Diluted - as adjusted. $ .02 $ .03 $ (.02) $ .03
<FN>
In accordance with the provisions of SFAS No. 123, the "As adjusted"
disclosures include only the effect of stock options granted after 1994. The
application of the "As adjusted" disclosures presented above are not representative
of the effects SFAS No. 123 may have on such operating results in future years due
to the timing of stock option grants and considering that options vest over a period
of immediately to five years.
NOTE F: DEBT
Fuel Tech, Inc. (FTI) has a $10.0 million revolving credit facility
expiring July 31, 2004, which is collateralized by all personal property owned
by FTI. FTI can use this facility for cash advances and standby letters of
credit. Cash advances under this facility bear interest at the bank's prime
rate, or at an optional rate that can be selected by FTI which is based on the
bank's Interbank Offering Rate plus 2.25%. The borrowings under this facility
are collateralized by all personal property owned by FTI.
During the quarter ended June 30, 2003, FTI repaid all outstanding
borrowings on the revolving credit facility.
7
NOTE G: BUSINESS SEGMENT AND GEOGRAPHIC DISCLOSURES
The Company operates in one business segment providing air pollution
control chemicals and equipment.
Information concerning the Company's operations by geographic area is
provided below. Operating income (loss) represents sales less cost of products
sold and operating expenses. Foreign operating expenses include direct expenses
incurred outside of the United States by foreign corporations controlled by the
Company plus an allocation of selling and general expenses incurred in the
United States that are directly related to the foreign operations. Assets are
those directly associated with operations in the geographic area.
For the three For the six
months ended months ended
June 30 June 30
------------------------------- --------------------------
2003 2002 2003 2002
--------------- -------------- ------------ ------------
Revenues:
United States. . . . . . $ 8,948,000 $ 7,375,000 $15,858,000 $11,978,000
Foreign. . . . . . . . . 1,020,000 646,000 2,146,000 1,264,000
-------------- ------------- ----------- -----------
$ 9,968,000 $ 8,021,000 $18,004,000 $13,242,000
============== ============= =========== ===========
Operating income (loss):
United States. . . . . . $ 669,000 $ 1,037,000 $ 97,000 $ 1,041,000
Foreign. . . . . . . . . (157,000) (153,000) (123,000) (167,000)
-------------- ------------- ----------- -----------
$ 512,000 $ 884,000 $ (26,000) $ 874,000
============== ============= =========== ===========
June 30, December 31,
2003 2002
Assets:
United States. . . . . . $ 20,026,000 $ 24,393,000
Foreign. . . . . . . . . 1,633,000 1,476,000
-------------- -------------
$ 21,659,000 $ 25,869,000
============== =============
8
FUEL-TECH N.V.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
RESULTS OF OPERATIONS
Net sales for the three months ended June 30, 2003 and 2002 were $9,968,000
and $8,021,000, respectively, while net sales for the six months ended June 30,
2003 and 2002 were $18,004,000 and $13,242,000, respectively. The improvement
is attributable to an increase in domestic NOx reduction utility project
revenues as project bookings from 2002 and 2003 generated revenues from their
various phases of completion. NOx reduction utility revenue in 2002 and 2003 is
being favorably impacted by the Environmental Protection Agency's (EPA) SIP
(State Implementation Plan) Call regulation (discussed further below) that
requires utilities and large industrial facilities in 19 states to reduce NOx
emissions by May 31, 2004, and the Company expects to be impacted favorably by
this regulation throughout 2003 and beyond. Fuel treatment chemical revenue for
the six-month period ended June 30, 2003 was impacted significantly by the
favorable performance at Western Farmers' Hugo Station, a powder-river basin
coal-fueled utility. The Company believes that utilities burning Western coals
represent the largest market opportunity for its fuel treatment chemical
business and that penetration into this market remains a priority. The Company
is now beginning to see the results of a decision made in 2002 to address this
market opportunity by investing in additional, experienced human resources to
service the market place. In addition, during the quarter the Company announced
that it had signed a strategic agreement with Peabody Energy to work together on
a case-by-case basis to jointly market the Company's patented
Targeted-In-Furnace Injection (TIFI) technology to units using high sodium
coals. The Company's TIFI technology alleviates the slagging and fouling issues
associated with burning coals that are high in low-melting- point ash
constituents, such as sodium. This agreement lends further credibility to the
capability of the TIFI process to control the formation of slag deposits in
boilers burning western coals. The Company expects additional demonstrations of
this technology to commence in the second half of the year.
The "SIP Call" is the federal mandate that, when introduced in 1998,
required 22 states to reduce NOx emissions by May 2003. This mandate was an
extension of Phase II of Title I of the CAAA. In May 1999 a stay was imposed on
this regulation. On March 3, 2000, an appellate court of the D.C. Circuit
upheld the validity of the SIP Call for 19 of the 22 states and, on June 22,
2000, the same court made a final ruling upholding the EPA's SIP call regulation
and denying the appeal of the states and utilities. Subsequent to this court
ruling, the stay on the SIP Call was lifted. Although the NOx reduction
requirement date was moved back one year to May 31, 2004, nineteen states were
required to complete and issue their State Implementation Plans for NOx
reduction by October of 2000. These plans, which the EPA had until October 2001
to approve, will potentially impact 700 to 800 utility boilers and 400 to 500
large industrial units.
In February 2001, the United States Supreme Court, in a unanimous decision,
upheld EPA's authority to revise the National Ambient Air Quality Standard for
ozone to 0.080 parts per million averaged through an eight-hour period from the
current 0.120 parts per million for a one-hour period. This more stringent
standard provides clarity and impetus for air pollution control efforts well
beyond the current ozone attainment requirement of 2007. In keeping with this
trend, the Supreme Court, only days later, denied industry's attempt to again
stay the SIP Call, effectively exhausting all means of appeal.
Based on these regulatory developments, the Company has experienced an
increase in project bookings, and related revenues, in 2002 and 2003. The
Company expects revenues due to SIP Call NOx reduction requirements to continue
into 2006, well past the May, 2004 deadline, as utilities continue to look for
low-capital cost solutions to reduce NOx.
Cost of sales as a percentage of net sales for the three-month period ended
June 30, 2003 increased to 64% from 51% versus the same period of the prior
year. For the six-month period ended June 30, 2003, the percentage increased to
66% from 51% versus the same period of the prior year. This increase reflects a
change in product mix within the NOx reduction project business. A
significantly larger percentage of the revenues for the second quarter and first
six months of 2003 were generated by turnkey projects versus the comparable
period in 2002. When the Company is responsible for the turnkey installation of
the equipment as part of the project scope the overall project margin becomes
diluted. Installation scope is not afforded the same margin in the market place
as is the sale of the Company's patented technology.
9
Selling, general and administrative expenses were $2,750,000 and
$2,653,000, respectively, for the three months ended June 30, 2003 and 2002, and
were $5,604,000 and $5,008,000 respectively for the six months ended June 30,
2003 and 2002. The increase is due primarily to the addition of sales resources
for the fuel treatment chemical business and, to a lesser degree, to the
addition of resources in support of the marketing and development of the
Company's ACUITIV advanced visualization software.
Research and development expenses for the quarter and six months ended June
30, 2003 were slightly behind the levels of the prior year. The Company
continues to pursue commercial applications for its technologies outside of its
traditional markets, with a particular focus on its ACUITIV advanced
visualization software. The ACUITIV software product was commercially
introduced on June 6, 2002, and the Company recently received its second
commercial order for the software. The software is currently being demonstrated
at several sites. In addition, ACUITIV version 3.3 was recently released. This
new release adds significant functionality which is expected to broaden market
acceptance. Although the validity of the product has been confirmed, the
Company does not expect revenues related to this product to be material for the
remainder of the year.
In the second quarter of 2002, the Company recognized a loss of $15,000 on
its 49 percent ownership interest in Fuel Tech CS Gmbh. Through the first six
months of 2002, the Company recognized income of $250,000 on its equity
investment in Clean Diesel Technologies, Inc. (CDT), its 15 percent-owned
affiliate, which was partially offset by a loss of $27,000 that was realized on
its 49 percent ownership interest in Fuel Tech CS Gmbh. The income in 2002's
first quarter from CDT resulted from CDT's repayment of loans made by the
Company to CDT in 2000 and 2001. Because the Company's pro-rata share of CDT's
losses reduced the carrying value of the loans to zero at December 31, 2001, the
entire loan repayment was recorded as equity income in the first quarter of
2002. In the first six months of 2003, the Company did not realize any income
or loss from its equity investments. The carrying value of these investments is
zero at June 30, 2003.
Interest expense for the three and six month periods ended June 30, 2003
was reduced from the comparable periods in 2002 due to a reduction in the
Company's average outstanding debt balance, as well as to a reduction in short
term interest rates. In the second quarter of the year, the Company paid off
the entirety of its outstanding debt balance.
The decline in other income and (expense) for the quarter and six months
ended June 30, 2003 versus the prior year was due primarily to a reduction in
interest income resulting from the decrease in short-term rates noted above.
No provision for federal or state income taxes was recorded during the
three and six month periods ended June 30, 2003 due to the existence of net
operating loss carryforwards. In the first quarter of 2002, an income tax
benefit of $50,000 was recorded which represented a reduction in the reserve for
prior years' state income tax refunds receivable.
LIQUIDITY AND SOURCES OF CAPITAL
For the six months ended June 30, 2003, the Company used cash for operating
activities in the amount of $2,426,000, while $2,654,000 was provided by
operating activities for the same period in 2002. The use of cash for operating
activities in 2003 stems largely from a reduction in accounts payable and
accrued expenses.
At June 30, 2003 and December 31, 2002, the Company had cash and cash
equivalents of $6,160,000 and $10,939,000, respectively, while working capital
for the same two periods of time was $12,174,000 and $13,947,000, respectively.
The decline in cash from December 31, 2002 was driven by the repayment of
$1,800,000 in debt and by the reduction in accounts payable and accrued expenses
both of which were noted above. By repaying the debt, the Company's
availability under its credit facility increased by $1,800,000.
10
FORWARD-LOOKING STATEMENTS
Statements in this Form 10-Q that are not historical facts, so-called
"forward-looking statements," are made pursuant to the safe harbor provisions of
the Private Securities Litigation Reform Act of 1995. Investors are cautioned
that all forward-looking statements involve risks and uncertainties, including
those detailed in the Company's filings with the Securities and Exchange
Commission. See "Risk Factors of the Business" in Item 1, "Business," and also
Item 7, "Management's Discussion and Analysis of Financial Condition and Results
of Operations" in the Company's Form 10-K for the year ended December 31, 2002.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
Please refer to Note D.
Item 4. Controls and Procedures
Within 90 days prior to the filing date of this report, the Company's
certifying officers performed an evaluation of the effectiveness of the
Company's disclosure controls and procedures. The disclosure controls and
procedures were determined to be sufficient to ensure that material information
relating to the Company, including its consolidated subsidiaries, is made known
to the certifying officers by others within those entities, particularly during
the period in which this quarterly report is being prepared.
There were no significant changes in the registrant's internal controls or
in other factors that could significantly affect these controls subsequent to
the date of their evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.
11
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 2. Changes in Securities
None
Item 3. Defaults upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
At the Fuel Tech Annual Meeting, held on May 28, 2003, 15,630,462 common
shares, par value $0.01 per share, or 79.42% of Fuel Tech's issued and
outstanding common shares as of May 27, 2003, were represented in person or by
proxy, and:
(i) the proposal to approve the Report of Management for the year ended
December 31, 2002 was approved by a vote of 15,618,174 for, 3,031 against and
9,257 abstaining;
(ii) the proposal to approve the Financial Statements for the year ended
December 31, 2002 was approved by a vote of 15,616,774 for, 2,531 against and
11,157 abstaining;
(iii) the proposal to elect seven nominees as Managing Directors and to fix
their compensation was approved by a vote as to each individual nominee, as
follows:
Shares Shares
Name. . . . . . . . . . . For Withheld
- ------------------------- ---------- --------
Douglas C. Bailey . . . . 15,574,771 55,691
Ralph E. Bailey . . . . . 15,589,771 40,691
Miguel Espinosa . . . . . 15,453,904 176,558
Charles W. Grinnell . . . 15,587,671 42,791
Samer S. Khanachet. . . . 15,623,621 6,841
Thomas S. Shaw. . . . . . 15,621,621 8,841
Tarma Trust Management NV 15,426,489 203,973
<FN>
(iv) the proposal to approve the appointment of Ernst & Young LLP as
Independent Auditors for the year 2003 and to approve their compensation was
approved by a vote of 15,607,632 for, 17,130 against and 5,700 abstaining.
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
a. Exhibits
Exhibit 31.1 and 31.2 are filed herewith
Exhibit 32 is furnished herewith
b. Reports on Form 8-K
The Company filed form 8-K on May 6, 2003. This filing
included the Company's first quarter 2003 earnings press release.
12
FUEL-TECH N.V.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: August 5, 2003 By: /s/ Ralph E. Bailey
----------------------
Ralph E. Bailey
Chairman, Managing Director
and Chief Executive Officer
Date: August 5, 2003 By: /s/ Scott M. Schecter
------------------------
Scott M. Schecter
Chief Financial Officer,
Vice President and
Treasurer
13