FTEK - Earnings call transcript Q4 2018

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Operator

Greetings, and welcome to the Fuel Tech Inc. 2018 Fourth Quarter Financial Results Conference Call. [Operator Instructions].

As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Devin Sullivan, Senior Vice President of the Equity Group. Mr. begin. may you Sullivan,

Devin Sullivan

close, and for everyone. quarter Fuel results available after year Doug, copy release, joining which of and you us financial is the Yesterday call. today Tech's conference issued good you, the Thank a morning, for at for full Officer. today's open we Thank the XXXX CEO; the Pach, and on be from After remarks, Arnone, will call questions Financial we prepared website, call and company's Speakers the analysts Vince the Jim company's will www.ftek.com. investors. Chairman, and our Principal President fourth

no risks safe Before amended, remind as available XXE and currently will to statements forward-looking business Section using current performance identifying has expectations turning the growth prospects call, annual the of discussed future limited Securities well Risk and by undertakes made factors Fuel statements discussed Act including, cash tried exclusive Fuel the Exchange caption assumptions Fuel Item available differ opportunities and in report under financial implied forward-looking Factors identify as -- things statements. except over XXXX, other these made XA company's of could information and growth, results currently to that Fuel operations, those of Tech's expressed performance actual which this and and not to, flows similar subsequent and Tech means and under Form forward-looking XX-K intend, materially amended, flows from Tech's Act estimate, as in business condition, information in defined operations, in words filings on or of uncertainties opportunities to provisions those these but cause Fuel as to Tech and to expect, in such Tech results Reform plan, by to Vince, Litigation subject the to of statements events, are as of or changed words involve company's based filings our are the I'd go SEC. risks the any statements. regarding factors Fuel detailed but please future announce now expressions, the developments are any prospects that Tech's various like to herein anticipate, on not XXXX to circumstances to of Vince, These Arnone statements during such are With are as over and said, are believe, Securities contained to uncertainties, statements forward-looking including to other management. pursuant and by and Fuel the turn of everyone future of the results Securities Tech. reflect to for in forward-looking Act or the cautioned harbor information, or historical those growth like results call I'd of Investors XXXX, matters of obligation update reflect that all reason. for publicly Private Vince ahead. which with cash

Vincent Arnone

Officer us and today. morning, Good the today with Financial Pach, our I'm want and thank Jim here Devin. Controller. on joining you, for everyone Thank call Principal to I

and revenues two We first our our debt-free. continuing company cash Fuel cost profile to Tech perseverance we strongest returning operating that operating are that $X.X structure year profitability was to beginning singular for believe the importantly, and report our XX% evolution in revenue gas support a since improved very and us directed In our reflect rose program derived we of and generated million, results XXXX. annual and multiyear a reorganization Most from quarters by results. pleased X% XX% current of increased global we team. the profit of portfolio culmination of cash Total approximately to towards organizational applications, basis. allow These of recent demonstrated total goal In of we technology They XXXX also only operating to XXXX, us of on the report which remain XXXX, profitability. the natural our $XX.X million drive was and adapt the reflect will that XX% up to the with SG&A of lower to from XXXX. ended allowed a We operating activities. in by various history, XXXX to our Annual APC XX%, declined realize resiliency, the new Fuel solutions and its from in efficiencies fuel sources. Tech signal rose ability

use a conjunction concerted are especially for we suited these focus applications. preferred effort for supplier turbines gas power technologies natural well generation, a in and on to SCR and with ULTRA making for Our are becoming

source Our while acknowledging strategic will to to to and matrix to multinational that industrial believe package. the that relationships with require to we portfolio of fuel grow, We end-users continue come, will portfolio years of remain will technology decline. with complete coal continue part larger-bid still its for business likely partner companies continues use a that our

customers, and in these effort power assist burn to efficiently. CHEM their For to continue lower-quality our will coal-fired fuels generation business FUEL more cleanly

$X.X China nearly APC comparable quarter, have of that quarter, results. our incurred we EBITDA discuss of in to segment. losses fourth the which the in and Operating XXXX SG&A executed positive at generated for driven last and to quarter continued fourth profit FUEL quarter the financial of $X.X let's we million, the the reflecting these XXXX. years. $XXX,XXX, impact $XX.X Revenues in XXXX higher year's the the operations over adjusted at China losses fourth by XX.X% to fourth million cost-containment million $XXX,XXX revenues quarter for both million. to fourth of Results of $X.X were declined X doubled CHEM Now past increased from from of our by our business included initiatives

the suspension business few our discuss in operation in a minutes. will APC China We of

Adjusted $XX.X expenses million in for from all Our $XXX,XXX of million full year -- SG&A as profit quite of first operating to included with China of profit $X.X annual million strong posted XXXX. million, annually an full million $X.X year $XX.X from our compared which We results by to compared were million $XX.X EBITDA EBITDA modest up operating operation XXXX million XXXX of $X.X operating $X.X for operating to since from of of declined million the losses XXXX. XXXX. XXXX. XXXX, Results in represented also or last of our loss year. adjusted XX.X% was a for losses revenues $X.X XX.X%

this progress towards the suspension completed with end We the our China by we operations, be expect of continue second the associated of make substantially to suspension of will activities that and the this year. quarter

associated bid $X development, our With respect were in pleased disappear. million operations, remains new $XX -- business for business to million to promising. been million activity awards yesterday contract we we potential, down had afternoon. to wind these me, losses closely we in the near-term $X the processes excuse will watching announce and have near-term As We award

continue an additional financial We XXXX business performance. to of pursue active to expect pipeline that we impact

highlights last as call Our follows. are primary business conference earnings our since

First, for business segment. CHEM FUEL our

that of The a was unit years. the XX%. third and margin about for first the fourth capacity unit million $XX.X FUEL incremental increased at third and our gross of for coal-fired margin in XXXX added FUEL to at Gross the and and other addition ran added CHEM this unit performance XX.X%, along an anticipated per quarter quarters Early bodes approximately XXXX, near This for For with at incremental in quarterly existing approximately our the of full fourth we fourth coal-fired X.X% quarter, CHEM base respectively. well XXXX. accounts, the unit, customer XX.X% $X.X for generated coal-fired million. in customer revenues revenue year new quarter full of X historical the was $XXX,XXX we full quarter XX.X% the our of Midwest. and This the to year to by

RECOVERY we As commercial on a Amazon in via discussed added licensee our for call, Papyrus. last CHEM Indonesia we new quarter's account

While Southeast a the CHEM geography. contribution this position this our the success financial will material, commercial expand in to in have in our financial Asia technology overall one assist is account to our that from RECOVERY fact we efforts not

segment. Control Pollution Air our for Next, business

first Available in For and are technology on RACT, technologies industrial APC continue includes the on ESP current renewals, NOx gas Directive as an applications Europe, opportunity wider Turkey. levels the and comment Emissions -- for state-specific from market whether in our reduces the in emissions impact I Title ULTRA technology Further, With of to heavily represent rely of Domestically, will both the for primarily primarily V the pursuing our neighboring round later applications, Industrial upgrade units regulatory applicable these natural European support reference target the site respect contract for Technology, driven solid in for Haze utility previously, DeNOx remains a coal, expect for systems, technology further -- applications to by which latest Reasonably maintenance be these the need XXXX, and well this global of future. with tech orders a as of at which basis the permit we APC, suite. Regional BREF, and for is being noted on so of unit. Control countries they the expect guidelines. of bookings fuel In the and time. as-needed of will requirements Countries focused or requiring upgrades contract both current significant portfolio, Balkans most support for to the or requirement Poland Czech developments such product expect do is and these This in new SNCR available our on source. we for are opportunities technology of of best Casper, SCRs new to in we guideline mercury We regulation as we our and not basis are time. we the from Republic, their industrial pipeline a as entirety in compliance majority while point drivers near and not wake in Union's

for and with our deliveries geographies. We in in system SNCR, technology in ammonia multinational non-European partners multiple European delivery SCR technologies are currently for pursuing countries Europe and bids

associated to with licensing various Heavy with ISGEC our agreements. exclusive continue Including pursue Engineering agreement licensing We opportunities our Ltd.

operating in opportunity that of known, to ESP Gas our cases for the highly low-cost, and with Flue technology meet cost particulate Tech when technology as it's be some control particulate can a demonstrate cost has prior aggressive a and, SOx prioritizing set the finally, been for industry power discussed quarters, control. originally approach, under overall particulate compliance phased approach Indian compliance presented the and high the government NOx of backed matter generation back targets to FTC, in used solutions. effective due As compared filter requirements have marketplace. to then an first, a emissions capital Conditioning This off Fuel in the of high had is hybrid

We the we has in slower are for in than and will have term. that anticipated, originally up demand but The bidding expect market. FTC to come built final are opportunities opportunity bidding bid system SNCR we near currently more starting for process see the finally to some opportunities an systems the our

in report marketplace our finally, treatment We this our will the in continue future. on And to progress initiative. for water

aeration. system our design in creates bubbles applications oil more We agreement industries, The system in in system announced to paper of data continue scale power capabilities progress gas, we lab and is quarter in good to team creating license make our NanOX XXX fourth The area the scale in has treatment generation, a last bubble of and with fine multiple that with will others. that via vary previously customers. we from demonstration and exclusive and use nozzle fully water better technology NanOX. support size the is the to the And provided applications. X,XXX the potential We quarter to our already surface X,XXXx pulp market nanometers, understand document be technology pursuit the proprietary process purchased believe year has now mobile and among versus of ready that the purchased to that developing technology valuable year as of last that future retrofitted deployed third

team Tech. in running have year. a In potential year company to We want we of pivotal multiyear discussions whole. of once China up multiple of for this our for profitability year. both After sustainable continuing can We to we cash closing, XXXX ongoing this XXXX income and I flow upon interest measures, now and of and years. their with believe full to support the to a early turn will the of profitability thank Fuel growth. over demonstration a your stakeholders that our for again, journey operation these company. our generate, end, for a results. we over To overall quarter achieve was suspension in Fuel past are few Jim year remainder and I ahead, during second cannot the the completion XXXX, platform, thank in consecutive second you, in Jim. and customers, which our improved target positive the for profitability The expect for Tech go enough program the operations to financial discussion enable restructuring now a implementation for returned of the from of XXXX. a as our in things have I'll long-term we we Please

James Pach

morning, good Vince, everyone. Thanks, and

We for strong the year, results second half. very pleased with the are our especially

quarter. million million at for reflecting totaled FUEL million, For the increase to and year's compared fourth revenue revenues a fourth $X.X as quarter, a $XX.X CHEM increase $X.X APC last

CHEM XX.X% million. fourth quarter. strong X.X% APC the revenue revenue revenues FUEL backlog For the year, APC rose conversion to and to remained $XX.X $XX.X million to through full increased

XX, December $XX.X million, down XXXX, backlog $XX.X was from XXXX, million. September XX, Our our backlog of

Vince mentioned, close contracts As near of in pursuing in the actively previously term. a are has number U.S. we expect we to Italy, promising which and the

existing gross in XXXX XX% fourth compared the from QX and in quarter in to $X.X QX was fluctuation XXXX. XX.X% as XXXX. overall margin as recognized addition revenues well of the quarter impact order a $X.X in million, business mix and due margin fourth of quarter reflected during improved XX.X% $X.X of as our gross and or Results quarter the XXXX of mix an as a for third the customer of products FUEL to the XX.X% quarter CHEM margin customer unit the million was The margin in to new of during XX.X% was gross project segment quarter-over-quarter APC which to in million or XXXX. or compared million change or to gross reflected of fourth APC predominantly of a of million between between favorable finalized CHEM $X.X XXXX. margin the APC revenues geographies. Our XX.X% declined geography due FUEL gross $X.X

and or margin year-to-date full trend, the or a targeting in Selling, XXXX. XX.X% are downward FUEL comparative of revenues SG&A quarterly last has by blended year CHEM fourth million For quarter. continued $X.X XXXX, basis, general administrative million by in and in between $XX.X or year's XX%. or coming to and of declined XX% APC XX.X% XX.X%, On SG&A we from expenses XX.X% gross of at increased revenues million of their a quarter basis, while declined each On XXXX. million revenues a $X.X as compared $X.X

For steady $XX second which expect the in $XX suspension the APC activities SG&A China we expenses range following SG&A R&D the million anticipated of XXXX. approximately by of completion as remained of that end the our geography XXXX. at to million of quarter in operations $X.X which report expect of $X.X to between full XXXX, million, year we discontinued excludes and the million,

For and part our $X.X or driven treatment $X.X $X.X increase million operation income water compared of included last comparable XXXX, from of by in wastewater as million from XXXX, Results slightly $X.XX levels, losses we million in was or million both share XXXX income XXXX. for revenues quarter. Fuel compared Net and in to expect R&D in diluted QX continuing XXXX fourth Beijing operation $X.X continuing $X Tech large net and operating from per to per the million may share $X.XX year's the and spending QX of XXXX spending investments from will QX for diluted market. remain

with reflecting to income the of of for goodwill full prior million, of $X.X historical and correction financial tax error results revision income This the included XXXX, a accounting an benefit statement. FUEL For the is an tax QX CHEM. associated year year's the

associated ongoing require However, operations. we a was deemed To incur of did material or immaterial in year revision the China with our and, quarter the XXXX charges any not the does therefore, of note, full restatement. suspension not fourth

of included full consolidated expect are year which QX and broken Fuel However, We by to we point our incur Beijing consist Fuel operating subsidiary, on reference, to our out have our of the operations. that losses approximately results beginning $X.X as quarter and do Tech a early generated in suspension the of first primarily $X.X employees and with charges of Beijing of and the Tech not for accounts and approximately of quarter our from severance termination related incur current million cost the been million lease down revenue year of accounts December receivable at XXXX. by as wind million in strong cost, decline has of September or July. December disposal million these from an and of an reflected at for receivable in operating charges ended $XX.X a activities The early of XXXX, to the collection company We expects December quantified. XX, XX, generated This XX, $X.X -- cash other yet evidenced estimate XXXX. $X million associated

XXXX, have NOLs income several which million taxable losses to income income future have million do we to As to of taxable tax offset taxable operating in taxable offset December approximately cumulative income, in overall and reduce us end, totaling to million income China. To million $XX.X business. $XX.X that our These in currently offset $XX.X future allow exposure. XX, geographies future net we to offset future Italy we U.S. $X.X in

suspending expect maintaining intend to are As we a legal for although our to the near there, the income do preserve operations X. With will XXXX China, to result, of or thus be tax the NOLs. our we continue we in expense respect at process entity,

cash of remained at share, Our had equivalents $X XXXX, $X.XX million $XX.X cash million. and debt-free. restricted XX, of And sheet we cash December including balance per or

in all geographies. monitor our We continue our of to liquidity

million, business. operating share of With support our value value continue capital our valuation, December capital Our tangible $XX.X working book our to respect needs share was $X.XX at per was $X.XX, balance share which was December the will was and to XX, at $X.XX per our XXXX. book working XXXX, ongoing per XX,

per have any above. been the call Vince. to In $X.XX have in fully addition, not per share like which are included amounts reserved over deferred in that, U.S. turn would we tax back of Italy, for approximately share With I and quoted the assets and the to

Vincent Arnone

Jim. Thanks,

private one, wanted line time the from Thomas, I This of And have system investors. that operator I is, ancillary of related acknowledge this fabricators question were India, to the preferred Question our the required in two, equipment e-mail the efficiently weeks. number company and and is completion is frame from ISGEC. licensee DGI the our buy units. fabrication system for DGI question mobile process in related has of The couple system delivery XX our time for XX number of questions the then DGI ISGEC ESP system a of currently to mount We form? is, of questions, skid supply our fabrication and from via submitted is for to in a to is for question, called our a one Before system work to one trailer. it's Envirotherm order to open with many frame of to The a of we trailer question first outsourced. licensor, contracts the awarded question the subcontracted? answering delivery configuring of systems. And this the time the what in-house trailer delivery In is lead both equipment mounted for in fabrication fabrication the its the one or the

a in that using does agreement generally ESP technology We have Envirotherm Tech's boiler In they've license supplied for any their answering on ESP The these smaller Envirotherm's installations be ESP with ISGEC technology, time. for been this quite units? place with FTC benefit for had have technology. have of and Can units. incremental Fuel question, some it

is fire technology for Our with that suited large FTC high-ash coal-fired best resistivity. coal boilers high

now call that, for with let's Okay, open please questions. Operator, the the open line.

Operator

Instructions]. [Operator

from comes Joshi with Sameer H.C. the Wainwright. first Our question line of

Sameer Joshi

the orders announced is the you should we have, order all or China? from but various a $XXX China? $X -- to So onetime be order million of -- of are proportion the Is from this customers, -- a million there pipeline Are you consider do have first morning also from destined question you China. for this -- what this onetime orders

Vincent Arnone

be is supplying that outside we X in couple we two, today would I Sameer, awards, seeing geographies. actually their trend, would a in companies, an U.S., case, our answering things: companies supplying of their pipeline onetime is product predominantly of considered domestic then a multinational And of I in these -- but but value number technologies what's with say lot okay? other work the here number What not of them a to would multinational here in as China -- interesting one, necessarily. lot definitely they're of China greater sit I the and a are these this, But it's dollar we're -- in this for marketplace. whereby into the

China. here multinational U.S. in So delivery for companies, also a the with but in contracts with we contracts in China. We're we're deliveries for the -- actually engaging in in European engaging company U.S. multinational also or

So that's stop. not going to

I going continue generally value larger But future will speaking, anticipated think to of contracts to the domestically. dollar come that. our see we're

Sameer Joshi

that China time, is fair -- customers the a in we reason for these control So have for in the from China? do kind to understanding same assessment? partners with you of is at and, withdrawal access that correct cost Is operation that are

Vincent Arnone

customers Sameer. certain many, entity, generate value-added locally our with that a compete with. point, ability The I'd believe watching technology fair offer also very been in just prospectively. locally assessment, a it's or Chinese time. that that high can would believe we quality to but to high can't driven say companies I good there don't price complete the what offering offering, us enough many whereby for for we what they're we call, some marketplace as But we marketplace. don't profit in -- local they're it's us legal solutions quite with is China, supply, for evidently we that, points China We've that And compete

have that multinational partners our business marketplace But solutions driving through in what's a do the is still decision that's delivered to fact have for primarily. we just benefit opportunities us. the So

Sameer Joshi

have line, at strong the during roughly. last Should two expect The kind first do into quarters same of forward see been we run playing going the Understood. you fairly quarters? rate XXXX? any top Or seasonality two $XX million

Vincent Arnone

it, focus Right. top so XXXX early my our a And line, of for commentary generation right is to generating APC, an for as to Too particularly a What it, done line now, Sameer, 'XX, be a because and we've order for much is it, row lowered, as right is call achieve to our us operating know, revenue and profitability the with a that company okay? about, the for in we've breakeven. In now, top well talk second flow has year to influx. cash flow. we ebbing flow call you threshold need positive

let slower really, on achieve pleased one we what stomach achieved is XXXX, our that, hand, so if number needed comment to to be we do okay? we're able you I'll we really revenue and -- to year we're to so a let profit the And operating continue. about So if going comparable can revenue more so. in But significant, that's a other then

have to to follow over quarter-by-quarter because pretty do preceding the have basis some quarter CHEM can FUEL idea out next. is backlog on going the that you seasonality we did much to get year the something into end year obviously, the we from of of And the little going can You a play with $XX have you there. rate that million year run course over and we end at But always XXXX that's an of a in backlog. how the the follow

for XX% conversion that for CHEM I'm start. XXXX, of at are have range. yesterday 'XX announced going terms we -- it's QX, a and is to of how decent that, we would but that to way I QX Our number then were the awarded into just to a we a of going looking contract -- approximately, Jim, $XX FUEL look The at begin thereabouts, say, we QX million And of how probably long okay? But we're that awarded just in just go. proxy

are a we're good And have year. a more that pipeline. We lot the in anticipating

Sameer Joshi

$X the Understood. And included The not right? backlog is clarification. just in one million, million $XX.X

Vincent Arnone

not correct, included The million the award, was in $X million, $XX.X correct.

Sameer Joshi

Understood.

to Are are or on is NanOX demo talks partners customers in for go. multiple that the you deployment? there it this Going ready to system, with

Vincent Arnone

Yes.

ahead or our We're and We marketplaces the to with today. customers get We're about. solid demonstration demonstration as quickly trailer we of need expansion a means demonstrate as we're QX here multiple and we are as out the can go there still going place in technology. targeting positive to early some in talking a for sit here talking as that good reference into

Our first to target likely oil is be in application. and gas

difficult As positive those some demonstration, we be us technology. going the that it's opportunity for the for largest is near-term to a to see, possibly But without reference make steps into marketplaces.

So that's to our target, but go. ready we're

Sameer Joshi

Understood.

-- improved. have accounts Do sheet management, on systematically helping you to I capital balance the receivable something to it's think hand good changed this is there to expect the -- to you that the see and it's Is trend continue? moving -- the working On this? that this days

James Pach

some that a QX, September of did I that of invoicing to answer into had we do question, large that milestone billing, so timing our late to in would for APC projects we of expect continue. some had for that say, going Sameer, lot outstanding. we was I

fairly real collectibility. a No story. China is a issues is AR Our different from consistent.

on multiple about talked that think calls. I we've

have of million to wind that accounts down. part is China receivable about $X We $X of the million

team We work on engaging management our are collection. to

reserve China the we one stretched from an in that out and the that, have June business geography the a have do So only are watching. there. due to get now there. that's we one We But be that action through of nature to plan this the remaining for will tend AR collect to the just

Operator

next the line Partners. question Enderlin MAZ Our with from Pete of comes

Peter Enderlin

reserve on that? a last Just China is up about that big receivable. How following comment accounts

James Pach

$X.X About million.

Peter Enderlin

Okay.

James Pach

China. reserve Yes. covers The of our vast majority AR

Peter Enderlin

Right. favorable in regarding changed decline of margins gross the a year And was I mix. effect a quarter. APC from the mentioned in guess, $XXX,XXX, for a And you the ago, quarter, mix, also geographical product

more color just little on the expand So little geographical, more. of on how was a and how just it give was much a that could you mix much --

James Pach

Yes. tends nature. we're market I have numbers margins given that lot geographical be And much of the an majority that those XX% to is here, the than tend XX%. from to less Europe to of reason in to would bit exiting say was be U.S. China, in although and anywhere APC much, that. In vast talking some to call quote just is a XXXX XX% the because a XX% between, range. was less. XX% it, XX% be average as going the I projects to broad tends anomaly range, would of then a the margins

Peter Enderlin

But China gross percent, as down a help much, was that Right. if margins should so your right?

Vincent Arnone

From absolutely. a perspective, year-on-year

being you've That's think very to be overall. a so there did be this consider closer impact not for have what lower unusual But the, all. favorable performance Q geographical year, number average normal. that than impact a -- to our in the the a normally -- year, in of XX% call was not prospectively. We're far an to anything last higher it, to okay? we number, weighted weighted too impact. I we our from -- XXs, expecting We QX So would expect was average got

Peter Enderlin

term then and on And right. call the is guess, licensor DGI, it you your that's now, I the basically. All NanOX

Vincent Arnone

dissolved correct. is for term DGI, That is the technology application, our marketing correct. gas infusion,

Peter Enderlin

that's contribution be not make a likely significant Okay. near to And significant term. -- revenue you said

near term does revenues other of example? for what could a mean? In that significant of percentage sort is question XXXX, in words, the be So

Vincent Arnone

Yes.

the able mentioned, to I premature. sit and -- like would demonstration successful quickly do how to to it's need to as We yes, think say be it's here it's yes, I better then but but like able marketplace. to in -- I able I just that think be to that just we comment me premature and I be would can a understand to Pete, proliferate say to -- today. for first make to

business whole. saying over, time incremental be term pursuits. to Right going have contributor We it, to we're treatment are call a to we're anticipating That's horizon that line. X it's going our near the year X company as an material a to the now, water

additional CHEM business the our there, the to to in great company process business We of call business we it, largely for Now continue but segment of and future. company, good have reorganization performance APC we need because focus twofold. the is base for particularly an still finished, with maintain need to that suspension FUEL China, grow line this with we've our our opportunities

So of premature XXXX business but little contribution, future here. line of the have material be additional line target our bit near may business be in a material that to a to will an say it's

Peter Enderlin

CHEM you occur, the near Got about Okay. term And when extending soon from we you level horizon? and there can current can Or consistent time term. another approximately revenues go In with you confidence about how again words, this consistent year a it. term near FUEL FUEL near the use levels of are word long revenues other far CHEM? talking not have X, would So really for out? at how talked is X, X that

Vincent Arnone

-- All dramatic things additional this unit in here of X fortunate tell any add point we're sit that down, I'd at market fire have drivers, time, boilers designed structure of look maybe an those I we they couple say, that's to their I a added whereby time as not at the looking the as quality contributor may in cost coal-fired coal-fired as We nature coals be looking units Pete. 'XX, that a are in in year what we in But XXXX. material not just as as unit some to a at we of lower of a being equal, today. in units, here burn. are bit sit we X horizon little be changes now, are 'XX. today adding dynamics coal-fired order without to looking at at can some to additional but They would a that to right keep you to in were going

today. I've seeing $XX that. were next we years, million continue we inquiries would be your pleased these multiple see very we're million FUEL fantastic. times over to I'd $XX the I've that I'd favorable our don't some be said to CHEM we of So of said But that activity. and that seeing come the with business, a course stable CHEM, today, able to range, FUEL X be pick growth I are expect some way. don't if happy be that

Peter Enderlin

helpful. wonder of pretty longer-term see very may that's is then basis. That's And a APC number. and And Yes. that XX%, gas more a was dramatic I on related where that one the portion natural you going

Vincent Arnone

the natural in the fuel contracts. the here think just -- it that pipeline is I for in may to but not gas upon as gas, looking I power Natural that near think being going we generation. still based be term, for I XX% awards Pete, primary generally used speaking, of at think were favor be at it's of prospective necessarily,

we're will, dominant And are to we still Our fuel win but to to coal-fired that that. see contract source work and business, that not as our going today. sources That fuel natural gas we market direction. in contract other reflect well, the going as is doesn't mean awards that some going is player go

Peter Enderlin

think, not industry. Well, I it's only the dominant, overall still for increasing,

sure So you are sustained it see you're here? saying just at it or not even not that from XX% how would may much increase you

Vincent Arnone

know the Pete. in level. change higher to mix But vis-à-vis, stay this time, It at comes decreases, it's order that other to at stay going or a without that will my our it at increases -- at level. a stay Difficult only will level. high whether higher but knowing in point but would flow comment But is it it's necessarily, how

Operator

line Grace Silk the of comes with from Bill question next & Our White. [ph]

Unidentified Analyst

say pulp had to just in wanted revenue clarify, the Did you mentioned I the business. there? and quarter paper you'd you

Vincent Arnone

We account. did have revenue some for that

have material As But it's number. a yes. did in some though, we QX, I said, not

Unidentified Analyst

I fair locations additional on then that a well assume that as Is you're statement? other bidding with client And clients. Okay. as

Vincent Arnone

space. at couple demonstrations is market Yes. our call right of opportunities What we're looking in that a now for, next it,

One the commercial of demonstration time specific technology is to pulp the new a we relative account. CHEM CHEM try do of that RECOVERY before things paper to we to client, of and general every that I a remind always people have and approach a being that to FUEL it becomes

So commercial the it a while a to us point to a whereby is technology. on takes come customer

why we're looking and with that's what in time Asia at will. period it application, particularly, get of for this to you takes traction But So longer and, Southeast a further if us now. is good out We as technology we're going of demonstration and believe data Southeast actually the have candidate, right we the a evaluating our to we be speak. next target in Asia

Unidentified Analyst

Okay.

work So there's of in plants the nothing Southeast plant, or unique economics that the the other at Asia. many about

Just et it's there, after you a cycle demonstrations your out cetera. question get a if longer-term

Vincent Arnone

investment yes. return be at proposition secondarily, to The them but -- And needs for by unit unit. implementing cycle technology. term, the is primary looked on the longer That's driver the

be just this it's necessarily because mean does locations. was one other Indonesia on it going So favorable favorable not to at account in

year their of a picking going So ensuring it's that for as If run down implementing or a Xx there being for XX contingent is level technology. to substantial cleaning, that, not our is well There's be a it's having But really to that's different justification good it for that a they times a unit, a to it's whole days the program large on be target come lot unit down relative to whereby comes X the story. can candidate if because that once only accounts for days, difficulty, year. have XX a won't unit that are it cleaning brand-new, good justified. unit a a do

And so are accounts for. we're the those looking that

Operator

George Our Investor. next Private question comes from the line Gaspar, a of

Unidentified Analyst

used, million? was what China, this backlog basis? the as to you elsewhere million U.S. and down represented break a on comparison you in dissect $XX.X of you $XX.X Can million $XX.X Could and what terms that versus $XX.X million that comparative

James Pach

million backlog remaining international. the $XX.X was million, was amount $XX U.S. Yes, the that and of number

It's would not XX-XX difference terms between breakout is the and between the about In much. China of Italy, say I probably the X.

yes. of -- it terms In

Unidentified Analyst

you assume larger China backlog then that I And ago, that was year still number. $XX.X at a amount more to million -- of the that look a were a if

James Pach

little U.S. larger, significant was total different. was A of The so that pretty backlog is The again but bit million, not significant. significantly approximately $XX that million pretty $XX amount.

Unidentified Analyst

just here, you going try you're market the a right. time? then the going And international maybe international All you to bit elsewhere, are little to progress talk at where forward if emphasize opportunities in European Okay. look elaborating, making you into or you this activity? can And that about at have point from

Vincent Arnone

We the European relative multiple bidding are, we out will, bids countries office George. you for if of mean, now, pursuing to landscape, European international in we're I our right opportunities. --

in part of South international on script, opportunities Flue in -- Other mentioned, progress lie as work my have I for Conditioning India. we As bids Gas Africa. in

South have national yet, nice the looking landscape we future, Africa their about that again national with their alliance but but petroleum utility solid talked the to engineering with That's in much and a company we're relationships building developed now. on haven't that's We company. a those for work

inability building So are in companies us opportunities but technology some China outside we and companies and is on future our exits or we're providing engineering very that -- finding multinational suspension the opportunities basis global our to are larger if you -- benefit companies exist. that some driven And technologies good be that as that of will our that's the other The nice generate will. provide the U.S, relationships I of with well. for say, going products should mean to in not marketplace, a of specifically profitability our operations by doesn't

Unidentified Analyst

All Okay. And In the you U.S. right. on back -- this here. area generation gas been more advocacy side, the a on but little be natural in strong then of getting power with there And the coal in power? kind industrial. technology, of turbine you're into has terms power opportunity describe leaning that associated the bit of your might could generation,

Vincent Arnone

that we're to of technology that of be whenever Sure. with new gas, towards power build, source. the choice sort country, generation requires with natural industrial source, control the And natural gas. emissions it's seeing What any leaning that's in plant any plant along even build new fuel seeing is is we're placed if case, this

in benefited work, trend, the case, was technology a in back-up primary were additional activity some of based required, to this had on of from as about awards in the turbines. but turbine whereby, if future actually gas general expect talked with center that a supplier, for type come data SCR little opportunities we that our they of will data source work they well, bit So source $XX natural the power okay? permitted, renewables, gas-fired natural units. in We whereby put was of how contract the that center upon those generation And from we've excess We've million will. you

for of So are reasons more of the in they're to we're going reasons how because driving a permits prospectively as seeing need that are I our lot how in that today, place place prospectively. on they're well as to different see geographies natural for evaluate And think in the applications going gas gas that on turbines. turbines there's this George, we're or technology put if units require pollution to technology control as required that, they're running, their in expire, different it country

that watching all activity. we're of So

future. the believe for over Tech. we that expect going gas excellent source well Fuel bode we fuel business for and to us It's year, So the years, natural more is in this an X.X past

Operator

Instructions]. [Operator

Vanquish with question Capital the William next line from comes Our of Bremer Management.

William Bremer

two what articulated, material leverage and roll on in with player that orders is X first was Tier possibly the been to going able -- further? The just fact, you question. center there data You market. that wondering out if you have I its

has question, I have pricing I in thereafter. specifically, And APC, know more market? this mentioned affected get And in been mix. you I then pricing want the domestic on to a follow-up staying water with area. primarily a Second little on that

Vincent Arnone

sounds That good. Okay.

these well, We're with them of that party, startup working question, is units So And this data as of working other that are actually, geographies that going are deployment as contract to for of geography the we okay? right first at now. with had of startup with part this is the XXXX. to of require a So some entity at are, their the that on. that call with Control work, them going first be be but the it, as today, that gas implemented we the the Air We necessary to going been starting up, deployed here tangible and where technologies. with have are series process lot turbines now, whether at There contracts of on today, don't activity opportunities call, depends we technology we've in different center we your our through first series we are parts right that first from their the geography necessarily end awarded working sit of in in actually turbine. many not inquiries world. SCR the going A or working was world just require for Pollution looking on natural anything the turbines have don't

as So we expand to have look do an excellent we with company, applications these basis. this global working them with can particular relationship grow and on a

application we're now, go pressure suspending up are for bid makes just whereby contracts, Question question U.S. the internationally. reference brand example, but So or pricing first of we on it a working yet, then process now a under normally history We would that with be in There value-added, supplier number particular mix, as the closely. we're we there markets for China that, say, as and okay? we're So successful an name we're today, we processes, any through startup right okay? a so nothing from just that's of that the through So obvious of again, success, whether one a okay, -- the in bid contract a coming it'd long will feeling okay? and watch as we'll not one. in reasons, And as in being future, following necessarily closely on is with two our units difference, that perspective help. on number

Europe, going required itself able a one to that, some business bidding is strategic we're on specific a it that really okay? okay, to still bid we is requires the on out terms expect of be That's either has the to a case if pricing, make. cognizant good the say be that And work, win domestically caveat to be to looking hasn't changed bid but the margin I'd of sales what good what in occasion, or business. think always retain we you good company will. today that we're as as to projects, on and of We We're

certain to want target the generally impacting do on for pricing speaking, in and any certain being application that today. by we're well that in reasons, undue not occasion. you we're as we're -- If pressures marketplaces a But we not impacted

William Bremer

good That's hear. to Great.

the it's specifically water I On about point a for initiative. thinking of initiative, channel wondering more sales sales developing your assuming how DGI direct going to could I'm the I'm hear be you're And if view.

Vincent Arnone

there, everything as share selling be it, work going as customer we that just Bill. models one could another as we say prior more But their program. it think place. It And a be that But there that question. of DGI end as I to to call a DGI, favor I know. could can. treatment multiple think to I organization it's be -- how well, avenues put the soon different to today, too of multiple with could provides business multiple we it, get here larger ways. It's it's mentioned part deliverables, information we and through, It's me, I'll it versus of in of variety believe could the sale water channels, to of being -- a in solution as premature their, bit actually be just sit little Good on that, questions a direct call today abatement in part earlier

William Bremer

pool, the upon, pond or of sort the waste that's arsenal, you targeting? DGI that that the in guess, I any finally, chemistries additional then initiative include are there And we're with could your depending the

Vincent Arnone

but is -- treatment So that call for technology, in chemical first The effective applications. it something with something it can we if is looking incremental that itself mind, was see opportunity something to that solution there application not something with will licensed okay? makes DGI or the coal we that there's system the was enhance when combine yet, -- the to, DGI more be it, we're our that we it at certain

we something is it at. will that So look

Operator

The from Private George a next question is follow-up Gaspar, questions Investor.

Unidentified Analyst

have area. that but area covered opportunity to directly? you generation power Maybe ask Yes. Maybe in gas I in you do this, responded you've just turbine this. power to wanted

Vincent Arnone

may source applications. we've didn't expect we've as opportunities of intend have readily being I and into natural and do all opportunities expansion Tech. previously, those as and that on as Fuel we chance hear we as contract you We in side cut is to gas to being some applications do. done a additional And what on have plant for fuel but you And awards gas think natural those center bit will also. my definitely focusing the a used chosen off do, the by see on well. those driven about and you And predominantly in there well know, a got George, used answer work George. source And a we our data future applications. available And bringing with But technologies fuel it's markets

Unidentified Analyst

the out think power putting while. gas would It's a that at power a area very much this mean, significant gas related marketplace. into market. gen generators I turbine sizable to General into And is to power puts good. Electric do have of turbine them for how have even that's very opportunity very for at look All power That's generation is I a to thing. generation you and that, effort get been lot more around you

So glad to hear that.

Operator

the further to call no queue. for closing like are in to There management the questions I'd back comments. have

Vincent Arnone

questions. time I'd Operator. and everyone for I in Fuel like appreciate it, Really thank to you, Good thank continued their interest their everyone today. Thank for Tech.

at much, these as and York to on here you have seeing a stayed March on and New thanks For be mentioned, that's in for the Thanks in everyone's XXXX there. we look improvement XXXX, some Sidoti day, conference our was everybody. X us again past to of we information, will to look XX, everyone and and year continue City presenting lastly, forward And path a beyond. us, over we great years. pivotal our I very with

Operator

conclude today's your this gentlemen, participation. Thank teleconference. you does for and Ladies

disconnect your this may lines time, You wonderful have day. and a at

Fuel Tech (FTEK) 15 Mar 192018 Q4 Earnings call transcript