Financial Data and Key Metrics Changes - Consolidated revenues for 2024 were $25.1 million, at the lower end of the guidance range of $25 million to $26 million, reflecting a 17% decrease in total APC segment revenue, partially offset by a 2% increase in FUEL CHEM revenue [7][32] - Consolidated gross margin for 2024 marginally decreased to 42% from 43% in the previous year, with a decline in both APC and FUEL CHEM gross margins [33] - Net loss for 2024 was $1.9 million or $0.06 per diluted share, compared to a net loss of $1.5 million or $0.05 per diluted share in 2023 [35] Business Line Data and Key Metrics Changes - FUEL CHEM segment revenue was essentially unchanged at $3.5 million, while APC segment revenue declined to $1.8 million from $2.8 million due to project execution timing [27][32] - APC gross margin declined to 36% from 55%, primarily due to product mix and lower segment revenue, while FUEL CHEM gross margin declined to 45% from 48% [28] Market Data and Key Metrics Changes - Consolidated APC segment backlog at December 31, 2024, was $6.2 million compared to $7.5 million at the end of 2023, with expectations for backlog to improve steadily through the first half of 2025 [28][29] - The company is pursuing opportunities in the municipal solid waste market driven by state-specific regulatory requirements, with potential awards expected in the near term [14] Company Strategy and Development Direction - The company is optimistic about exceeding $30 million in total revenues for 2025, with expectations that both business segments will outperform their 2024 performance [24][25] - The company is focusing on the commercialization of its DGI technology and pursuing multiple end markets, including aquaculture, wastewater treatment, and others [22][24] Management's Comments on Operating Environment and Future Outlook - Management expressed renewed optimism for 2025, citing improved performance in the FUEL CHEM business segment and a strong portfolio of APC business opportunities [9][14] - The company does not expect specific regulatory tailwinds from new regulations but is monitoring the status of existing regulations that could impact future NOx regulations for clients [16][20] Other Important Information - The company ended 2024 with cash, cash equivalents, and investments of approximately $30 million and no long-term debt, maintaining a strong financial position [8][36] - SG&A expenses increased to $13.8 million in 2024, reflecting higher employee-related costs, with expectations for a modest increase in 2025 [33] Q&A Session Summary Question: Outlook for 2025 revenues - Management confirmed that the $30 million revenue outlook includes expected contributions from new APC orders and some contributions from FUEL CHEM accounts [43][44] Question: Gross margin expectations - Management expects a return to historical gross margin levels for FUEL CHEM in the range of 49% to 50% for 2025, while APC margins are expected to remain in the 35% to 38% range [53][55] Question: Data center opportunities - Management highlighted that data centers are increasingly requiring nitrogen oxide controls due to regulatory requirements, and the company is actively bidding on related projects [86][126] Question: Potential for M&A or stock buybacks - Management is exploring small acquisition opportunities and licensing technologies that could benefit the company, while stock buyback discussions are ongoing [114][116]
Fuel Tech(FTEK) - 2024 Q4 - Earnings Call Transcript