Fuel Tech (NasdaqCM:FTEK) FY Conference Transcript

Summary of Fuel Tech (NasdaqCM:FTEK) FY Conference Call Company Overview - Fuel Tech has been in operation for nearly 40 years, focusing on air pollution control and specialty chemical technologies for fossil fuel combustion [2][3] - The company has developed a pre-revenue business called Dissolved Gas Infusion (DGI), which is an advanced aeration technology [2] Financial Performance - Revenue for 2025 is projected to be between $28 million and $29 million, showing a slight increase from 2024 [3] - The company has a strong balance sheet with $31 million in cash and no debt [3] - Effective backlog is approximately $10 million, the highest in three to four years [4][9] - Gross margins are stable at 46% across business segments [7] - The company has been cash flow break-even for four consecutive years and is poised to generate operating income [6] Market Dynamics - There is a significant increase in demand for power generation, particularly in the U.S., which is expected to drive Fuel Tech's business [12] - The company is experiencing the largest sales pipeline in over a decade, primarily related to new power generation developments for data centers [5][6] - The coal-fired marketplace has diminished, prompting a restructuring of the company to align with changing end markets [9][20] Technology and Solutions - Fuel Tech specializes in nitrogen oxide (NOx) reduction technologies, including Selective Catalytic Reduction (SCR) and Selective Non-Catalytic Reduction (SNCR) [17][18] - The company has sold approximately 200 ULTRA systems, which convert urea to ammonia on-site, reducing storage hazards [17] - The chemical technology segment, primarily focused on coal-fired units, is forecasted to generate $15 million to $16 million in revenue for the year [25] Regulatory Environment - Current administration is not expected to introduce new regulations that would impact Fuel Tech's business, particularly concerning nitrogen oxides [14] - The company is monitoring potential changes in the Clean Air Act amendments but does not anticipate significant impacts [14] Growth Opportunities - The data center market is projected to grow significantly, with demand expected to increase by 50% by 2027 and 165% by the end of the decade [20] - Fuel Tech is exploring opportunities in water and wastewater treatment, with ongoing demonstrations in aquaculture [27][28] - The company is looking to close additional capital project awards for air pollution control before the end of 2025 [15][16] Conclusion - Fuel Tech is well-positioned for growth with a strong financial foundation and a robust sales pipeline, particularly in air pollution control and data center opportunities [29]