{"id":458055,"date":"2021-03-15T16:23:17","date_gmt":"2021-03-15T20:23:17","guid":{"rendered":"http:\/\/www.marketnewsdesk.com\/?p=458055"},"modified":"2021-03-15T16:23:17","modified_gmt":"2021-03-15T20:23:17","slug":"fuel-tech-reports-2020-fourth-quarter-and-full-year-financial-results","status":"publish","type":"post","link":"https:\/\/www.marketnewsdesk.com\/index.php\/fuel-tech-reports-2020-fourth-quarter-and-full-year-financial-results\/","title":{"rendered":"Fuel Tech Reports 2020 Fourth Quarter and Full Year Financial Results"},"content":{"rendered":"

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Fuel Tech Reports 2020 Fourth Quarter and Full Year Financial Results<\/span><\/b><\/p>\n

WARRENVILLE, Ill.–(BUSINESS WIRE<\/a>)–Fuel Tech, Inc. (NASDAQ: FTEK)<\/b>, a technology company providing advanced engineering solutions for the optimization of combustion systems, emissions control and water treatment in utility and industrial applications, today reported financial results for the fourth quarter (\u201cQ4 2020\u201d) and full year ended December 31, 2020.\n<\/p>\n

\n\u201cI am proud of how our team addressed the challenges in 2020 brought about by the COVID-19 pandemic and am optimistic about Fuel Tech\u2019s prospects for 2021 and beyond,\u201d said Vincent J. Arnone, President and CEO. \u201cWith the closing of our financing in February 2021, we now have approximately $37 million in cash and no debt. We intend to prudently deploy this fresh capital as required to support the growth of our core businesses, accelerate our entry into the dissolved gas infusion \/ water treatment solutions market, and expand our solutions portfolio with products and technologies that we believe could provide our Company with additional growth potential. We believe that we are well-positioned to capitalize on the anticipated global demand for emissions control solutions and water purification technologies, with near-term demand driven by government policies, public advocacy and financial investment. For 2021, we intend to maintain the lean operating structure that we have created over the last several years and will be guided by a focus on operational excellence, client service, innovation and financial improvement.\u201d\n<\/p>\n

\nMr. Arnone continued, \u201cWe generated improved performance within our FUEL CHEM\u00ae<\/sup> business segment during Q4 2020. This reflects contributions from the installation of our TIFI\u00ae<\/sup> Targeted In-Furnace Injection technology on new domestic coal-fired unit accounts and a return to more normalized run rates across our fleet following a period of slower unit activity due to the impact of the COVID-19 pandemic. We are continuing to pursue FUEL CHEM application opportunities in the U.S. where owners of coal-fired power generation boilers seek to remain competitive in dispatch markets via the utilization of lower-cost, lower-quality fuels. Outside the U.S. we are focused on multiple sites, including those that burn high sulfur fuel oil in Mexico, biomass and municipal solid waste units in Europe, and coal at sites in Southeast Asia where power demand and related pricing is high, and slagging is an issue.\n<\/p>\n

\n\u201cWithin our Air Pollution Control (APC) business, we expect to capitalize on continuing opportunities for natural gas and industrial applications, with a focus on our SCR and ULTRA technologies on a global basis. The year 2020 was difficult for our APC business, due in large part to pandemic uncertainties and their impact on industrial purchasing activity. However, we remain intensely focused on providing support for bid requests for custom-engineered solutions that fulfill the unique needs of each of our clients and expect that our markets will improve in 2021 as global economic activity strengthens. Despite an overall slowdown in activity, we entered the new year with a global sales pipeline of $40-50 million.\u201d\n<\/p>\n

DGI\u2122 Dissolved Gas Infusion<\/span><\/b><\/p>\n

\n\u201cAfter some pandemic delays in 2020, we are beginning to regain momentum at our Dissolved Gas Infusion (DGITM<\/sup>) business,\u201d Mr. Arnone continued. \u201cWorking in support of our technology partner, Kadance Resources, we completed a six-week demonstration at a municipal wastewater treatment facility on the U.S. West Coast in early January. We anticipate supporting a second demonstration at an additional wastewater treatment facility on the West Coast in the second quarter of this year. In February, we completed a demonstration of our DGI technology at a new customer in the pulp and paper business located in the Pacific Northwest. Both demonstrations are currently undergoing stringent data analysis to understand the full and complete benefits of the advanced aeration technology at each site. We expect to complete the data review by early in the second quarter, after which we will assess next steps with respect to commercial development with these accounts.<\/b>As we continue through 2021, our objective is to advance the development and commercialization of this technology, which will include the design and fabrication of higher capacity DGI equipment delivery systems that we believe will be necessary to address the needs of the majority of our end markets.\u201d\n<\/p>\n

Q4 2020 Consolidated Results Overview<\/span><\/b><\/p>\n

\nConsolidated revenues increased 26.5% to $6.2 million from $4.9 million in Q4 2019, reflecting higher revenues in both the APC and FUEL CHEM business segments.\n<\/p>\n

\nGross margin for Q4 2020 was 41.9% of revenues compared to 0.1% of revenues in Q4 2019. Gross margin in Q4 2020 primarily reflected the mix between APC and FUEL CHEM revenues recognized during the quarter. Gross margin in Q4 2019 included a $2.0 million charge in cost of sales for the period related to an equipment warranty liability with a U.S. APC customer. Excluding the impact of the charge, gross margin in Q4 2019 was 41.1% of revenues. As previously announced, Fuel Tech reached a settlement with its insurance carrier and in Q3 2020 recorded a receivable for the proceeds that reduced cost of sales for the APC business. Collection of the receivable was recorded in Q4 2020.\n<\/p>\n

\nSG&A expenses declined by 15.3% to $3.8 million from $4.5 million in Q4 2019, reflecting lower administrative and professional services costs.\n<\/p>\n

\nNet loss from continuing operations narrowed to $(1.5) million, or $(0.07) per share, compared to a net loss from continuing operations of $(4.3) million, or $(0.18) per share, in Q4 2019. Excluding the impact of the insurance settlement, net loss from continuing operations in Q4 2019 was $(2.3) million, or $(0.10) per diluted share.\n<\/p>\n

\nConsolidated APC segment backlog at December 31, 2020 was $5.3 million, of which $4.9 million was domestic, as compared to backlog at December 31, 2019 of $9.7 million, of which $8.6 million was domestic.\n<\/p>\n

\nAPC segment revenues increased to $2.5 million in Q4 2020 from $1.7 million in Q4 2019, primarily the result of project timing. APC gross margin was $0.7 million, or 29% of revenue, in Q4 2020. In Q4 2019, APC gross margin, including the $2.0 million warranty charge, was $(1.5) million. Excluding the warranty charge, APC gross margin in Q4 2019 was $0.5 million, or 28% of revenue.\n<\/p>\n

\nFUEL CHEM segment revenues rose to $3.7 million from $3.2 million in Q4 2019, primarily reflecting installations on three new units during Q3 2020. Segment gross margin was 51% in Q4 2020 and 48% in Q4 2019.\n<\/p>\n

\nAdjusted EBITDA loss was $(1.1) million in Q4 2020 compared to an Adjusted EBITDA loss of $(3.9) million in Q4 2019.\n<\/p>\n

Twelve Month Overview<\/span><\/b><\/p>\n

\nConsolidated revenues for 2020 were $22.6 million as compared to $30.5 million, due to lower APC and FUEL CHEM revenues.\n<\/p>\n

\nConsolidated gross margin for full year 2020 and 2019 was 47.2% and 35.5%, respectively, reflecting the factors cited above. Excluding the impact of the $2.6 million insurance settlement and current year claim costs, gross margin in 2020 was 29.8%.\n<\/p>\n

\nSG&A expenses for 2020 declined by 20.9% to $13.6 million from $17.2 million in 2019, reflecting the Company\u2019s previously completed cost containment initiatives. SG&A attributable to the Company\u2019s China operations was $0.3 million in 2020 as compared to $1.8 million in 2019.\n<\/p>\n

\nNet loss from continuing operations was $(4.3) million, or $(0.17) per share, in 2020. Net loss from continuing operations in 2019, including the unreimbursed customer remediation costs, was $(7.9) million, or $(0.32) per share. Excluding the impact of the unreimbursed customer remediation costs, net loss from continuing operations in 2019 was $(5.9) million, or $(0.24) per share.\n<\/p>\n

\nAdjusted EBITDA loss was $(2.9) million in 2020 as compared to $(6.2) million in 2019.\n<\/p>\n

Financial Condition<\/span><\/b><\/p>\n

\nAt December 31, 2020 total cash was $12.6 million including restricted cash of $2.0 million, down from total cash of $13.5 million, including restricted cash of $2.6 million, at December 31, 2019. Stockholders\u2019 Equity was $22.3 million, or $0.88 per share.\n<\/p>\n

\nAs previously announced, on February 17, 2021 Fuel Tech closed a private placement that consisted of 5,000,000 shares of the Company\u2019s common stock and warrants to purchase up to an aggregate of 2,500,000 shares of common stock, at a purchase price of $5.1625 per share and associated warrant, that was priced at-the-market under Nasdaq rules. Total gross proceeds to the Company were approximately $25.8 million before fees and expenses.\n<\/p>\n

Conference Call<\/span><\/b><\/p>\n

\nManagement will host a conference call on Tuesday, March 16, 2021 at 10:00 am EDT \/ 9:00 am CDT to discuss the results and business activities.\n<\/p>\n

\nInterested parties may participate in the call by dialing:\n<\/p>\n