Fuel Tech(US:FTEK)2023-03-06 16:00Financial Performance - Revenues for the year ended December 31, 2022, were $26,941 million, an increase of $2,680 million or 11% compared to 2021[126]. - Revenues for the APC technology segment increased to $10,597 million, a rise of $3,701 million or 54% year-over-year, driven by project execution timing and new orders[128]. - Revenues for the FUEL CHEM technology segment decreased to $16,344 million, a decline of $1,021 million or 6% due to customer loss and unforeseen plant outages[129]. - Total revenues for the year ended December 31, 2022, were $26,941 million, an increase from $24,261 million in 2021, representing a growth of 11.0%[244]. - Air Pollution Control technology solutions revenue increased to $7,935 million in 2022 from $4,189 million in 2021, a growth of 89.5%[244]. - FUEL CHEM technology solutions revenue decreased to $16,344 million in 2022 from $17,365 million in 2021, a decline of 5.9%[244]. - Total foreign revenues increased to $6,630 million in 2022 from $4,746 million in 2021, a growth of 39.6%[245]. - Revenue from products and services transferred over time was $8,092 million in 2022, up from $4,189 million in 2021, a growth of 93.5%[246]. - The operating loss for 2022 was $(1,527,000), slightly higher than the operating loss of $(1,489,000) in 2021[165]. - Net loss for the year ended December 31, 2022, was $(1,442,000), compared to a net income of $54,000 in 2021[167]. - Basic and diluted net loss per common share for 2022 was $(0.05), compared to $0.00 in 2021[165]. Cash Flow and Liquidity - Cash and cash equivalents at December 31, 2022, were $23,328 million, a decrease from $35,893 million at the end of 2021[138]. - Operating activities used cash of $4,139 million in 2022, primarily due to an increase in accounts receivable balances[139]. - Investing activities used cash of $9,483 million in 2022, mainly for purchases of held-to-maturity debt securities and equipment[141]. - The company has sufficient cash and working capital to operate its base Air Pollution Control and FUEL CHEM businesses for the next 12 months[143]. - The company has taken measures to reduce expenses and restructure operations to maintain sufficient working capital and liquidity for the next 12 months[182]. - Net cash used in operating activities was $4,139,000 for 2022, a significant decrease from $761,000 provided in 2021[169]. - Total cash, cash equivalents, and restricted cash decreased to $23,328,000 at the end of 2022 from $37,054,000 at the end of 2021[188]. Investments and Expenditures - In 2022, the Company transferred $20 million to the investment account to manage excess capital and liquidity[1]. - Capital expenditures for 2023 are expected to be funded with cash from operations or cash on hand[144]. - The company invested $9,777,000 in debt securities during 2022, with an amortized cost of held-to-maturity debt securities at $9,341,000 as of December 31, 2022[191]. - The company entered into a securities purchase agreement to invest $10,000,000 in US Treasuries and government agency securities[145]. Assets and Liabilities - Total liabilities increased to $5,283,000 in 2022 from $3,774,000 in 2021, reflecting changes in current liabilities[164]. - The accumulated deficit as of December 31, 2022, was $(115,991,000), compared to $(114,549,000) in 2021[164]. - Accounts receivable increased to $7,729,000 in 2022 from $3,259,000 in 2021, indicating improved collection or higher sales[164]. - Unbilled receivables increased from approximately $1,277 million in 2021 to $3,082 million in 2022[194]. - The allowance for doubtful accounts decreased from $223 million in 2021 to $110 million in 2022, with write-offs totaling $94 million in 2022[196]. - Inventory included equipment constructed for resale valued at $207 million in 2022, down from $227 million in 2021, and spare parts net of reserves of $185 million in 2022 compared to $121 million in 2021[198]. Taxation and Deferred Taxes - The company recorded an income tax expense of $54 million on a pre-tax loss of $1,388 million for the year ended December 31, 2022[136]. - The income tax expense for 2022 was $54 million, compared to $14 million in 2021[259]. - The company has approximately $28,227 million of U.S. net operating loss carryforwards available to offset future U.S. taxable income as of December 31, 2022[267]. - Deferred tax assets totaled $15,550 million as of December 31, 2022, compared to $14,916 million in 2021[259]. - The valuation allowance for deferred tax assets increased to $15,627 million in 2022 from $14,950 million in 2021[261]. Operational Challenges and Market Conditions - The FUEL CHEM segment experienced a decline in revenues and operating profits compared to 2021 due to the loss of a customer and reduced demand[89]. - The Company continues to invest in new technologies for water and wastewater treatment markets amid ongoing geopolitical and pandemic challenges[1]. - Management expects cost control efforts to maintain existing operating expenditures and improve market outlook as pandemic effects diminish[1]. - The company monitors the impacts of COVID-19 and geopolitical events on sales, marketing channels, and supply chains, with uncertain future effects[88]. - The company has experienced reductions in demand for certain products due to the COVID-19 pandemic, leading to declines in revenue and net losses[143]. - Fuel Tech's nitrogen oxide reduction technologies are critical for compliance with air quality regulations, which are essential for the company's business[172]. - The company continues to monitor the impacts of COVID-19 and geopolitical events on its operations and supply chains, which may affect future performance[179]. Stock and Equity - The company issued 5,000 shares of common stock in connection with a private placement, raising $24,029,000[168]. - The company issued 5,000,000 shares of common stock and 2,500,000 warrants in a private placement, generating gross proceeds of $25,812[274]. - The calculated fair value allocated to the warrants is $7,337, recorded as Additional paid in capital - warrants[276]. - As of December 31, 2022, there were 384,500 stock options outstanding with a weighted-average exercise price of $2.98[284]. - The aggregate intrinsic value of stock options outstanding as of December 31, 2022, was $27 based on a closing stock price of $1.27[284]. - Stock-based compensation for the year ended December 31, 2022, was $224, compared to $82 for the year ended December 31, 2021[280]. - The company had 1,899,250 equity awards available for issuance under the Fuel Tech, Inc. 2014 Long-Term Incentive Plan as of December 31, 2022[278].