- Earnings call transcript Q3 2022

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Operator

Greetings and welcome to the Fuel Tech Inc.

Third Quarter 2022 Financial Results Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. pleasure of your The my Senior Devin now President Vice Equity is to host introduce Sullivan, It Group. Thank you, sir.

You may begin.

Devin Sullivan

Good for company's quarter the release, Maria. joining website close, we call. www.ftek.com. you, morning is copy thank the and Thank of a you Yesterday us after today financial available Fuel XXXX third which issued Tech's results conference everyone for at the

Officer. Chief After today and will remarks, from company's be Executive and Officer; for President the questions and speakers open Our Chief investors. will Arnone, Financial prepared we for the Albrecht, Ellen Vince call analysts our

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

Vince Arnone

us today. Good morning the want and thank you, on joining Devin. for everyone Thank call to I

our Air performance Pollution business to results business and pleased the expected Control quarter than are strong in our We by FUEL report segment led for third better growth segment. CHEM

For year over year million. increased XXXX, the of $X by third quarter to revenues X.X%

can. as $XX.X further technology, DGI no long-term at and progress had We've equivalents we reflected Gas as we investment or sheet Infusion cash which of million made aiming are further we develop Dissolved than XXth balance and our expediently Our in September in and developing cash more $X.X commercialize securities, debt. to million, also

customers. to And of from last contract existing million were awards Our has a we recently and APC validated efficiency week the pleased announce as released new paper driver our we the effectiveness of DGI which of view white and X.X technology, business. new future

compared million Our XXXX revenue quarter the brings year million, APC business full third $X.X APC's exceeds year-to-date of to XX% to million. $X.X to of segment which revenue revenue this approximately year. $X.X quarter This last rose

of to we consisting to expecting of sales in continue variety million pursue million year. markets. and We of $X a global bookings projects are the pipeline to additional million contract $XX And $X this end a of of million before $XX

surpassed positively FUEL our in driven business our which increase we including have areas fired Our demand, CHEM segment by dispatch program factors, energy revenue several regional expectations, coal overall where in has an installed. impacted

million revenue guidance $XX As of result, $XX previous FUEL raising million. from are to a $XX and up million, to we XXXX estimate million CHEM's between our $XX

dispatch new utilities call, energy to develop facility program a and life overall to unit capacity structuring marketing by extending facility we work unit strategies flexibility, profitability, FUEL factor offering reintroduce and continue high on high we at to demand when improving key is active that owner on program only opportunities. fuel capitalize all the and last related the cost benefits, reach makers wants lowering CHEM of our including As to to decision our stated coal-fired domestic cam

fuel the investigate We also to and the expense at of of the Mexico, to remediation the surrounding necessary are emissions providing environmental high chemical technology in burning which our oil health sulfur by being is solution created address continuing of communities. undertaken the without

closely. We to watch development this continue the of very activity

new are with an at fired energy our power do of an regional favor has in and fired of dispatch of prices. increasing partner Control operating be the technology the Cross to the project Air recent generation in coal actually driving political in we implementation FUEL as APC, With by for States be to and into And APC on in of the update of to in finalized state-owned provide which currently demand CFE rule, facilities. NOx application known rule quarters facilities coal Clean certain Good of a that also of believe several program our in landscape Mexico. CSAPR EPA with additional QX in gas this consent reduction call and the this on entered both of which units. extension escalating natural Pollution the the pressure is And of European Air of the respect regarding lives year earlier the capitalize unavailability decree marketplace the discussions trends could noted State is Neighbor requirements. increase We're in well. United and certain sources renewable that as both proposed generation the favorable facility, the the expected last areas seeing CSAPR, is opportunities These a However, provisions CHEM power update building is us to driven Act, XXXX.

for Neighbor meeting to sources, revisions comply sites Act. So, early can sites. of specific control that XXXX XX ozone the XXXX Clean the utility CSAPR Air requirements impact the requiring NOx utility states Good with as for and and and could National These up as standards, sources industrial while starting XXXX industrial

In influenced services substantially of projects XXXX by state. be would we last its fact, one the expectation form in the proposed was that regulation this implemented for SNCR-related same that announced the engineering week in current as

SNCR we segment, the this provision few have first quarter months of had for awarded customers and contracts we these projects former And the to final from and required, Over been multiple our and regulation. that next into of technologies. ultra-product the activity opportunities APC for for move of several the continue the offerings, Again, past could inquiries regarding in current to pursue received requirements we year. closely the continue we months, as recent be follow will depending potentially on

and as industry pledged to the to footprint. the improve our invest many Gas an to opportunities and recent long precipitators Flue involved One contract our other in our global for international standing planning as solution both application Fuel others, combustion ability relationships oxides capitalize assist and point, improve awards Tech technology unit. industries have in closely emissions SNCR and they continue with continues international Conditioning last and users on they mind be performance to for end are we stationary will the their from applications, of to watching to top decarbonization domestic that of these has electrostatic develop. Additionally, nitrogen carbon control for reduce of steel to suppliers the technology sources of technologies

System aeration two the treatment our experienced structure the supplied DGI and during oxygen water avoidance water reservoir retention to in industrial results. process or for has this make we displaced municipal and the odor and dissolved and Business enhanced of validated of that rates to the the is increased delivered, which spending, application overall efficient are paper and to wastewater aeration humans specifically work capacity, and higher delivering measure Gas technologies, the or concentrations to technologies control, existing important capital preservation upsets, changing a fields the released October, continued from evaluate This than enhancing oxygen to and was oxygen the benefits aeration many of wastewater the treatment demonstrating dissolved test utilization, that In quality material treatment. residual improving Dissolved wildlife. have performance potential call technology, we we supplementary water short or underperforming derived validation our and with the and protocol increasing for focuses wastewater and compliance, capacity is of study efficacy the We to on white in dosing demand delivery for atmosphere. oxygen with water of streams chemical DGI technology minimization requirements, scenarios. experts progress The treatment of and and DGI can traditional be and no regulatory and for meeting include loss oxygen of at XX% the DGI an the by that operations, Initiative systems, immediately DGI than and Fusion to of providing greater traditional of

we us of the executive on search in and wastewater business. As to plans facilities, and we are and the dairy call, role that markets ultimate guiding for bodies applications, of is farms our This formulate food our of are DGI of utilities, to landfills, process and and water water hoping we shortly and the addressable this to an to water wastewater prior and thereafter. year our before complete municipal agricultural reservoirs. expansion consist conference of critical our searching beverage as I experienced software noted commercialization, And assist including natural treatment approach look the end or development, manufacturers, in

continued future have regarding taken the as Fuel the marketing of some necessary in which website more collateral, DGI, planned we and have we product steps we expand support initiatives include in modifications. And much Lastly, the pure to I dedication. application Tech's team for again their and Fuel and In planet. of the water Tech for and thank clean our technologies to reach benefit work closing, hard want air

are with excited ahead. discussion the turn and XXXX. over the our results positive our end we With please go are to performance begin Ellen. I'll XXXX and to of approach prospects now about enter pleased we third said, quarter We as that Ellen,

Ellen Albrecht

Thank you, Vince and morning, everyone. good

by project rose to The year X.X% $X revenues activity declined million $X.X For in million permanent APC primarily increase quarter, million, in consolidated the CHEM and one XX% $X.X quarter over the to the by plant third year's a $X.X due last last reflecting to $X.X a the of project timing and revenue driven third increased from from revenues $X.X customer was segment quarter. million from to third of XXXX, line loss million from rise prior quarter execution. of year's million product retirement. FUEL

Vince foreign segment than outlook compared APC third XXXX, of expectations million CHEM margin of project due included international million a perform for contribution segment. reflected as $X.X of XXst, project XX% margin also the margin backlog of XXXX. for in year shift of XX.X% million which flat to from at from gross $X.X remained XX.X% quarter was Backlog delivered third our to in at $X.X compared the last QX delivered segment As completion FUEL project year December product backlog margin XXXX. projects mentioned, a million the lower September XXst, higher Gross backlog at of million mix. the quarter's has gross project to CHEM backlog XX.X% for $X.X to FUEL XXth, reflecting domestic XXth builder December to better project domestically APC $X.X and project $X.X business in activity. of QX was segment the to and APC of of backlog improved. XX.X% delivered FUEL the revenues at and in of September Consolidated declined of compared and XX.X% compared CHEM Consolidated million XXXX, initial

an September was expect the not third We of recognized $X.X Last from as million was related primarily the XXth awards, of backlog. backlog the which $X.X The due XXth in months. project costs. the in announced to for million SG&A in quarter XX included quarter XXXX. million we September to expenses increase million of be will $X.X that of $X.X APC increased contract next million consolidated $X.X of employee week additional new

quarter was SG&A XX.X% the in of third percentage XX% XXXX compared of third revenue, to a in As quarter. XXXX

for year timing the investments We due $XXX,XXX grow the in initiatives. third business, the are of to expenses for exclusive third XXXX specifically SG&A to of full $XXX,XXX our current segments. be would last DGI targeting our year's quarter Development execution primarily project from additional of required to declined any Research quarter, that and

operating to Our and last margins reflecting SG&A income $XXX,XXX narrowed from and quarter year, $XXX,XXX increased third reduced expenses.

a for quarter in net third $X.XX net $XXX,XXX $XXX,XXX year. $X.XX was Our per to quarter. per adjusted income income Adjusted of the or in EBITDA EBITDA or share period same of last compared the $XXX,XXX, $XXX,XXX last share was compared year's to

to strong. happy our I'm Moving condition very report that to balance remains financial the sheet,

and of cash equivalents had we cash XXth, September million. of $XX.X As

approximately in and and backed Interest of $X.X $X.XX income capital $X.X XX,XXX. per million from a equity debt. $X.XX $XX U.S. million government-backed securities these and our share, Stockholders' also per securities debt balance the maturities We months approximately investments was respectively. Working $XX.X million to or as debt in X%. short-term XX have company million blended sheet ranged quarter and $XX.X for on million invested was no The reflected the yield for long-term three of has return share. was

possible. these we DGI and and Vince. focused excited with believe cost new now call our and as bolster balance the the remain to efforts our technology our success I'll sheet awards, turn Our to technology on future supply for initiatives. spending expedient prioritize of chain over contract challenges execution, best innovation, mitigate control strength back continue We're to

Vince Arnone

much, questions. open very Thanks Ellen. let's line the and for ahead Operator, go please

Operator

you. Thank

with now a Dayal conducting Amit question-and-answer with proceed Instructions will your Wainwright. We session. Please H.C. question. comes Our [Operator question from be first

Amit Dayal

morning you. everyone. Thank Good

Vince Arnone

Amit. Good morning

Amit Dayal

DGI you is you from offering? on year range coming DGI where look is when phase steady not early year everybody the yet know I very think like know you say familiar just or can see Congrats guidance the stages sort performance. we out do are XX months contribute an on just XX And product to a in be of, do still introductory next to and with commercialized. But will get the next growth

Vince Arnone

the that DGI introductory not in We'll contributions, are be going but more and material Tech would phase. to I still DGI at a know to we Right. look Fuel today. them I onboard as XXXX would we expect once about same here some we bit would XXXX. sit expect how little in staying move there we more of have here progress lead actually get into at our I

be we into Our DGI but certain an expectations to markets going need Ed now. be able right we here high, expediently as to unknown are with rolling sit how is are

So, that's comments today. why I'll temper the

contribution be So, it's material. but yes, to some we have of expectation not going expecting

today, improvement we XXXX. in look to of moving question an upon in have for business do of XXXX. book before I XXXX. future regulatory sizeable mentioned be the very expecting end nice to the drivers throughout at we from we from, into of looking remainder backlog levels is performance Based then the activity the what APC XXXX the terms there that for We the answer driver landscape, move year, to Now, your coming have where are in growth a could that in some as we're and business.

about out the that, QX. end As once We'll we XXXX we look know of towards to timeframe. more get

in to we little those year, Technology, at So, going going what here a we better are looked would opportunities XXXX. But growth for than a able be is as at least more we're planned in to given utilities were having look would are at there. maintain coal-fired to already. primary, If very driver be forecast I the growth year XX. pleased just APC, bit to call of I Chemical I difficult country. the next that landscape this likely

Amit Dayal

becomes APC around larger that expectations is year, can you a margins? the APC Understood. -- what becomes Thank -- APC And, next that. the you APC driver year? next if margins bigger And driver impact is for set does

Vince Arnone

don't APC to be margins, sell, driven on will relative that the lot -- traditional themselves, necessarily that that depend would mix of technologies driver than the not to any a would APC I expectations, going regulatory necessarily right. merging by Yes, different they I have is

we Tech business speaking generally Now, generates as the margin. Fuel level you APC gross as overall Chemical well obviously Technologies know, at higher a margin a gross by Chemical impacted look because when whole, our the and mix of a is Technologies

So, again, on segments. of business it'll depend revenue between mix two those

Amit Dayal

time. maybe this any closer some to know Understood. or being that the changes for I opportunity, there this to respect And new been Any with opportunity out captured? has Mexico bring developments

Vince Arnone

We, past in increase two month state inquiries we've via in from to months, in Mexico the partner. our this an utility had

fruition keep on I if yes, if I that I'll and for it earnings again, know conference past to majority XXXX? mentioning made because the whereby going this throughout had We us to move itself we when today. So it mentioned this is in statement it's more the here inquiries we months difficult to year. past have call. as But the we we into make it's that of as will material had, don't Are opportunity sit the decision the I've same extremely happens, that but we've yet. take in they forecast couple the come of indeed than this here

Amit Dayal

all Thank you. have questions I'll that's Vince. take offline. Yes, I Okay. my other

Amit Dayal

you Okay, Amit. very Thank much.

Operator

from question. [Operator Please Marc with Instructions] your question Silk Advisors. comes Investment next Silk Our proceed with

Marc Silk

taking Thank my question. you for

ago Water in Technology up for answered. door have a know of asked are but Flint, and in things, your happened does separate business? and any years them been what of the open these already that two Some few I also Mississippi

Vince Arnone

not think I say probably say but I mean would occurrence broad some Flint, to specific here relative of not. down that what I application, today, happened going I there. our in have I As would to sit technology is no, terms reach probably in to

Marc Silk

Okay. And just on to you're your turning business holding a comment cash as is, your I around. you're appreciate

to thanks up good continue taking questions. work the keep my and So, for

Vince Arnone

appreciate it. I Mark. you, Thank

Operator

no are comments. floor further to questions for the time. there appears would to Vince this It turn I back over closing Arnone at like now

Vince Arnone

wish remainder everyone for Operator, to like team Tech remainder everyone on you for a their thank XXXX. thank good a I would hard participating. good To and again, you. also call, thank day, Fuel work. the dedication of I of all of the the

to all our move business further to and going look are future. efforts of and much into XXXX continue we about are very We forward our our Thanks everyone. as developing excited we

Operator

This concludes today's teleconference.

You this time. at participation. may your disconnect your you Thank lines for

Fuel Tech (FTEK) 9 Nov 222022 Q3 Earnings call transcript