Release Date: November 07, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Fuel Tech Inc (FTEK, Financial) returned to profitability in Q3 2024, driven by strong performance in the Chemical Technologies segment.
- The company announced $2 million in new ATC orders and expects an additional $2 million to $4 million in orders by early 2025.
- Fuel Tech Inc (FTEK) ended the quarter with a strong financial position, holding over $31 million in cash, cash equivalents, and investments, with no debt.
- The FUEL CHEM segment saw an 8% revenue increase year-over-year, with contributions from returning customers and a new coal-fired unit.
- The Dissolved Gas Infusion (DGI) business initiative is progressing, with a demonstration agreement for an aquaculture application and discussions for further demonstrations in other markets.
Negative Points
- Revenues in the APC segment declined due to customer-driven delays and timing of new project awards.
- Consolidated revenues decreased slightly to $7.9 million from $8 million in the previous year's third quarter.
- Gross margin for the APC segment decreased to 35% from 40% due to changes in product and project mix.
- SG&A expenses increased to $3.2 million, reflecting higher employee-related expenditures.
- The company reported an operating loss of $179,000 compared to operating income of $133,000 in the previous year's third quarter.
Q & A Highlights
Q: Do you have any visibility on how long the circuit courts may take to review the EPA's Good Neighbor provision and for the EPA to formulate new regulations?
A: Vincent Arnone, CEO: It's difficult to predict a specific timeline due to the change of administration and ongoing reviews. We monitor regulatory boards for updates and will share information as it becomes available. Currently, we cannot provide a tentative timeframe.
Q: Does any of your existing revenue come from the enforcement of the Good Neighbor provision in those 12 states?
A: Vincent Arnone, CEO: The additional project opportunities from the updated Good Neighbor provision are all upside for us. It will not impact our standard ongoing project work or base level revenues.
Q: Regarding the FUEL CHEM business, is the $1.5 million to $2 million in annual revenue potential in addition to your existing installed base?
A: Vincent Arnone, CEO: Yes, it is an incremental coal-fired unit for us, representing additional revenue for the Chemical Technologies business. We are hopeful to add more units in the future, which are very profitable for us.
Q: In the press release, does the $2 million in orders include potential orders or just orders in hand?
A: Vincent Arnone, CEO: The $2 million announced are contracts in hand. We expect an additional $2 million to $4 million in contract awards by the end of this year or early 2025.
Q: Can you provide more details on the DGI demonstration planned for the state government agency?
A: Vincent Arnone, CEO: The demonstration at a fish hatchery in the Western US will commence around April 1, 2025, lasting four to six months. We aim to secure an order by late 2025, with other demonstrations potentially starting before the end of this year.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
