Fuel Tech, Inc. (NASDAQ:FTEK) Q1 2021 Earnings Conference Call May 13, 2021 10:00 AM ET Company Participants Devin Sullivan - Investor Relations Vince Arnone - President and Chief Executive Officer Ellen Albrecht - Principal Financial Officer Conference Call Participants Sameer Joshi - H.C. Wainwright Pete Enderlin - MAZ Partners George Gaspar - Private Investor Operator Greetings. Welcome to the Fuel Tech First Quarter 2021 Financial Results Conference Call. At this time, all participants are in a listen-o ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2021 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: 001-33059 FUEL TECH, INC. (Exact name of registrant as specified in its charter) Delaware 20-5657551 (State or other ...

Financial Data and Key Metrics Changes - Consolidated revenues for Q4 2020 increased by 26.5% to $6.2 million from $4.9 million in Q4 2019, reflecting higher revenue from both APC and FUEL CHEM segments [40] - Consolidated gross margin for Q4 2020 was 41.9%, compared to 0.1% in Q4 2019, which was impacted by a $2 million warranty charge [44] - Net loss from continuing operations for Q4 2020 was $1.5 million, or a loss of $0.07 per share, compared to a net loss of $2.3 million, or $0.10 per share, in Q4 2019 [47] Business Line Data and Key Metrics Changes - APC segment revenues increased to $2.5 million from $1.7 million, primarily due to project timing and completions [41] - FUEL CHEM segment revenues rose to $3.7 million from $3.2 million, driven by the installation of equipment on new coal-fired units and recovery of more normalized run rates [43] - APC backlog at the end of Q4 2020 was $5.3 million, with $4.9 million being domestic [41] Market Data and Key Metrics Changes - The global sales pipeline is estimated at approximately $40 million to $50 million, with about $25 million domestic and $15 million international, primarily in Europe [84] - The company is monitoring state-level activities related to new environmental guidelines that may create opportunities for retrofitting emissions control technology [20] Company Strategy and Development Direction - The company aims to return its base business segments to profitability while focusing on the commercial development of DGI Technology [15][36] - Plans include maintaining a lean operating structure and aligning SG&A closely with anticipated growth, with annual breakeven revenue estimated between $25 million and $30 million [38] - The company is exploring strategic solutions to expedite market discovery of DGI Technology and assess business landscapes for APC and FUEL CHEM segments [14][15] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism regarding the outlook for 2021, despite challenges related to contract awards and the lingering impact of COVID-19 [10][11] - The company expects an increase in APC project award activity and moderate revenue improvement compared to 2020 [22][36] - Management is closely watching the actions of the Biden administration but does not anticipate immediate material impacts on business activities [20] Other Important Information - The company raised gross proceeds of $25.8 million in February 2021, resulting in approximately $37 million in cash and no debt [12] - The company has a cumulative net operating loss of $25.5 million, which is expected to result in minimal income tax expense for 2021 [52] Q&A Session Summary Question: What are the particular areas of focus for 2021? - The company is focusing on the development and commercialization of DGI Technology and returning base business segments to profitability [59] Question: What is the visibility in terms of timeline for revenues from Mexico? - The company expects to see some revenues from Mexico in 2021, but the exact timeline is uncertain [65][70] Question: How does the sales pipeline compare to previous years? - The current sales pipeline is slightly smaller than historically, lacking larger contract value opportunities [74][76] Question: What is the current reserve for doubtful accounts related to China? - The reserve for doubtful accounts in China is approximately $1 million against a total possible collectability of about $2 million [100][101]

Table of Contents SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ______________________________ Form 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended: December 31, 2020 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 001-33059 ______________________________ Fuel Tech, Inc. (Exact name of registrant as specified in it ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2020 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: 001-33059 FUEL TECH, INC. (Exact name of registrant as specified in its charter) Delaware 20-5657551 (State or ot ...

Financial Performance - Revenues for the three and six month periods ending June 30, 2020 were $4,401 and $8,948, representing a decrease of $4,547 or 51% and $10,924 or 57% compared to the same periods in 2019[96] - The Air Pollution Control (APC) technology segment generated revenues of $1,937 and $3,133, reflecting a decrease of $2,866 or 60% and $7,459 or 70% from the prior year[97] - Consolidated gross margin percentage for the three and six month periods ended June 30, 2020 were 14% and 26%, significantly reduced from 44% and 41% in 2019[100] - Selling, general and administrative expenses (SG&A) were $2,755 and $6,641 for the three and six month periods ended June 30, 2020, with SG&A as a percentage of revenues increasing to 63% and 81% from 50% and 47% in 2019[101] - The company recorded losses from continuing operations totaling $5,111 for the six month period ended June 30, 2020, with cash used from continuing operations amounting to $3,414[106] Research and Development - Research and development expenses for the three and six month periods ended June 30, 2020 were $271 and $595, focused on new product development and technologies outside traditional markets[104] Cash and Financing - As of June 30, 2020, the company had a cash balance of $11,257, including restricted cash of $3,003, and working capital totaled $12,133[107] - The company received $1,556 in loan proceeds from the Paycheck Protection Program (PPP) on April 15, 2020, with a 1.0% interest rate and a two-year term[113] Backlog and Orders - Consolidated APC backlog at June 30, 2020 was $8,321, down from $9,671 at December 31, 2019, indicating a decline in project execution and new orders[98] Taxation - The company is projecting a consolidated effective tax rate of approximately 3% for 2020, significantly lower than the federal income tax rate of 21%[105]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Commission file number: 001-33059 FUEL TECH, INC. 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 March 31, 2020 or ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______ to______. (Exact name of registrant as specified in its charter) (State or other jurisdiction of inco ...

Financial Data and Key Metrics Changes - Revenue for Q4 2019 declined to $4.9 million from $15.8 million, primarily due to a nearly $9 million revenue decline at the APC segment [40] - Consolidated gross margin for Q4 2019 was less than 1% of revenues compared to 37.3% in Q4 2018; excluding a $2 million charge, gross margin was 41.1% [42] - Net loss from continuing operations was $4.7 million or $0.18 per diluted share compared to net income of $0.9 million or $0.04 per share in the same quarter last year [46] Business Line Data and Key Metrics Changes - APC segment revenues were significantly impacted, with a gross margin of negative $1.5 million compared to $3.2 million or 30.4% in Q4 2018 [43] - FUEL CHEM segment revenues were $3.2 million, down from $5.3 million in Q4 2018, with a gross margin of 47.8% compared to 51.1% in the prior year [44] - SG&A expenses for Q4 2019 declined by 6.5% to $4.5 million from $4.8 million in Q4 2018, marking the fourth consecutive year of decline [45] Market Data and Key Metrics Changes - The company is pursuing a global sales pipeline of $75 million to $100 million, primarily in the U.S. and Europe, with expectations of securing $15 million to $20 million in new work by the end of Q2 2020 [15] - The outstanding accounts receivable balance in China at December 31, 2019, was $2.7 million, reflecting a reduction of $3 million from the prior year-end [16] Company Strategy and Development Direction - The company is engaging a multidisciplinary team to address near-term business development opportunities with an increased sense of urgency [10] - Significant modifications will be made to better address customer needs and ensure product cost competitiveness [11] - The company is targeting total SG&A costs for 2020 to range between $13 million and $13.5 million, reflecting cost savings from restructuring efforts [33] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that 2019 was a challenging year due to delays in closing new APC business awards, which are expected to continue into Q1 2020 [8] - The company believes its current cash position and expected cash flow are adequate to fund operations for the next 12 months [14] - Management expressed optimism about the potential for improvement in financial performance as actions taken are expected to stabilize operations [34] Other Important Information - The company has eliminated the risk of loss from the wind-down of its China operations, which has resulted in approximately $2 million in annual operating losses being removed [16] - The company has filed a provisional patent application to protect enhancements to its DGI technology [32] Q&A Session Summary Question: What portion of your revenue during 2019 came from the Milan office? - Approximately 10% of revenues were coming from the European office [52] Question: What impact do you see from the travel restrictions to Europe? - There will likely be some impact, particularly on project timing and execution [54] Question: Can you provide more color on the APC-related award delays? - Delays are primarily due to project timing and funding issues rather than competitive impacts [55] Question: What level of revenues would you have expected without the outages and weather issues? - An estimated loss of $0.5 million to $0.75 million in Q4 due to those factors [58] Question: Should we expect any new demo units in the next few quarters? - More demo units are expected throughout 2020, with the first demonstration planned for a pulp and paper facility [59] Question: Is the $2 million in reimbursable receivable from the insurance company included on the balance sheet? - The receivable is currently unrecorded on the balance sheet [60] Question: Is the $13 million to $13.5 million SG&A target on a GAAP basis or cash basis? - It is on a GAAP basis [62]

Financial Performance - Revenues for 2019 were $30,467,000, a decrease of 46.1% from $56,535,000 in 2018[81] - Net loss for 2019 was $7,852,000, compared to a net loss of $28,000 in 2018, indicating a significant decline in financial performance[81] - The company reported an operating loss of $8,240,000 in 2019, compared to an operating income of $110,000 in 2018[81] - Consolidated cost of sales for 2019 was $19,637 million, down from $36,471 million in 2018, resulting in a gross margin percentage of 36% in 2019 compared to 35% in 2018[128] - Selling, general and administrative expenses decreased by $1,373 million or 7% to $17,191 million in 2019[130] - The company recorded a net loss of $7,852 million for the year ended December 31, 2019, compared to a net loss of $28 million in 2018[124] - Comprehensive loss for 2019 was $8,345,000, compared to a comprehensive loss of $545,000 in 2018[183] - The accumulated deficit increased to $(110,325,000) in 2019 from $(102,495,000) in 2018[180] Assets and Liabilities - Total assets decreased to $32,224,000 in 2019 from $51,719,000 in 2018, reflecting a 37.7% decline[81] - Working capital was $16,698,000 in 2019, down from $23,556,000 in 2018, representing a 29.2% decrease[81] - Total current assets decreased to $21,610,000 in 2019 from $40,717,000 in 2018, representing a decline of 47%[180] - Total liabilities decreased to $6,049,000 in 2019 from $17,667,000 in 2018, a reduction of 65.8%[180] - Cash and cash equivalents as of December 31, 2019 totaled $10,914, down from $12,039 at the end of 2018[152] - Cash, cash equivalents, and restricted cash at the end of 2019 totaled $13,501,000, down from $18,059,000 at the end of 2018[201] Revenue Breakdown - U.S. revenues decreased by $18,005 million or 41% from $43,887 million to $25,882 million, while international revenues decreased by $8,063 million or 64% from $12,648 million to $4,585 million[125] - The APC technology segment reported revenues of $14,082 million for 2019, a decrease of $24,335 million or 63% compared to 2018, primarily due to a decline in backlog[126] - The FUEL CHEM technology segment revenues were $16,385 million for 2019, a decrease of $1,733 million or 10% compared to 2018[127] - International revenues decreased to $4,585,000 in 2019, representing 15% of total revenues, down from 22% in 2018[192] Cash Flow and Activities - Operating activities used $3,387 of cash for the year ended December 31, 2019, compared to a cash inflow of $4,927 in 2018[153][155] - Investing activities used cash of $45 in 2019, a decrease from $569 in 2018, primarily due to equipment purchases[156] - Financing activities used $128 in cash for the year ended December 31, 2019, compared to $12 in 2018, related to the acquisition of common shares[157] Research and Development - Research and development expenses increased slightly to $1,127 million in 2019 from $1,073 million in 2018[131] - The company has invested in research and development for new technologies in air pollution control and fuel treatment[191] Impairments and Charges - The company recorded an impairment charge of $2,965 for the year ended December 31, 2017, related to the carrying value of its office building and land exceeding fair value[107] - An abandonment charge of $127 was recorded in 2019 associated with patent assets in China due to the planned suspension of the APC business operation[109] - The company recorded an abandonment charge of $317 in 2018 for certain international patent assets due to limited business opportunities[110] Tax and Deferred Assets - A valuation allowance on deferred tax assets was established at $15,394, $13,044, and $12,234 for the years ended December 31, 2019, 2018, and 2017 respectively[112] - The company assesses the realizability of deferred tax assets based on future taxable income projections and tax planning strategies[112] - Deferred tax assets increased to $15,443 million in 2019 from $13,293 million in 2018, an increase of 16.2%[279] Goodwill and Intangible Assets - The company performed its annual goodwill impairment analysis as of October 1, 2019, and determined that no impairment of goodwill existed within the FUEL CHEM technology segment[106] - Goodwill allocated to the FUEL CHEM technology segment was $2,116 million as of December 31, 2019, with no impairment recognized for the periods ended December 31, 2019, 2018, and 2017[218] - Amortization expense for intangible assets was $186 million in 2019, down from $193 million in 2018[225] Contracts and Performance Obligations - Contract assets were approximately $1,857 million at December 31, 2019, down from $5,540 million in 2018, a decrease of 66.5%[267] - Contract liabilities decreased to $712 million in 2019 from $1,234 million in 2018, a reduction of 42.3%[268] - The aggregate amount of remaining performance obligations was $9,671 million as of December 31, 2019, with expected revenue recognition of approximately $5,780 million over the next 12 months[270] Miscellaneous - The company has foreign offices in Beijing, China, and Gallarate, Italy, indicating a focus on international market expansion[192] - The company maintains deposits in federally insured financial institutions, minimizing significant credit risk exposure[248] - The provision for income taxes is determined using the asset and liability approach, considering future tax consequences and potential sources of taxable income[240]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) For the transition period from ______ to______. x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number: 001-33059 For the quarterly period ended September 30, 2019 FUEL TECH, INC. or (State or other jurisdiction of incorporation of organization) Delaware 20-5657551 (I.R.S. Employer Identification Number) ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF ...