Fuel Tech, Inc. · NASDAQ:FTEK
Fuel Tech — Investor Presentation (September 2019)
24 slides from Fuel Tech's investor presentation, Sep 9, 2019
Slide 1: Investor Presentation September 2019
Investor Presentation Nasdaq: FTEK September 2019
Slide 2: Safe Harbor Note Regarding Forward-Looking Statements
SAFE HARBOR NOTE REGARDING FORWARD-LOOKING STATEMENTS This presentation contains “forward-looking statements” as defined in Section 21E of the Securities Exchange Act of 1934, as amended, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 an
Slide 3: Business Overview
BUSINESS OVERVIEW Emissions Control and Water Treatment Solutions AIR POLLUTION CONTROL 70% OF 2018 REVENUES ▪ Low cap-ex NOX and Particulate Control solutions that reduce emissions from 30% to 85% ▪ Capital project sale, typically fixed-price, with turn-key capabilities ▪ Typical customers: fossil
Slide 4: Investment Summary
INVESTMENT SUMMARY ▪ SG&A reduction of greater than 40% following a four-year program of focused restructuring activities ▪ Well-positioned with cost structure that can profitably leverage top line growth ▪ Returned to operating profitability in 2018 for the first time since 2013 ▪ Suspension of Chi
Slide 5: Financial Overview
FINANCIAL OVERVIEW Improved Cost Structure, Strong Balance Sheet ($ in MMS) Total Revenue SG&A Operating (Loss) Income (1) (1) From continuing operations $56.5 $20.9 $45.2 $18.6 $0.1 1H 2017 2019 $19.1 $8.9 2018 $(2.1) 2017 2018 1H 2019 2017 2018 1H 2019 $(7.1) $8.0 M $3.0 M $0.3 M $1.3 M $1.9 M $1.
Slide 6: Suspension of Beijing Fuel Tech Operations
SUSPENSION OF BEIJING FUEL TECH OPERATIONS ▪ Commenced January 2019; expected completion YE 2019 ▪ Competition-induced margin erosion and continued losses ▪ Focusing on cash collections; $2.4 M decline in trade receivables Q1 - Q2 2019 ▪ Suspension, once completed, will eliminate of $2.0 M in operat
Slide 7: Global Footprint
GLOBAL FOOTPRINT Solutions Installed in 26 Countries 1,200+ Installations Across Four Continents 30+ Year History of Service and Accountability 7
Slide 8: Products and Services
PRODUCTS AND SERVICES Diverse, Customizable Portfolio of Low Cap-ex Emissions Control Solutions Fuel Tech Technologies > ASCR ® : Advanced SCR: Combines LNB, OFA, > ULTRA ® : Safe Ammonia Generation System > TIFI® Targeted In-Furnace Injection™: SNCR, AIG, GSG™ + Catalyst > SCR: Selective Catalytic
Slide 9: Innovative Technology, Engineering and Design
INNOVATIVE TECHNOLOGY, ENGINEERING AND DESIGN 3-D Visualization Creates Custom Solutions ▪ Proprietary Software with Strong IP Protection; Patented Technology – Provides an intuitive interaction between the Models and Design Engineers ▪ Computational Fluid Dynamics (CFD) Model – Customized for each
Slide 10: Blue Chip Client Base
BLUE CHIP CLIENT BASE U T I L I T Y I N D U S T R Y G L O B A L 10
Slide 11: Geographies and End Markets
GEOGRAPHIES AND END MARKETS FTEK Solution Geography End Market Deployments/MW U.S. China ROW Utility Industrial SNCR 570+ / 51,300 57% 29% 14% 68% 32% FUEL CHEM® 110+ / 21,900 84% 16% 67% 33% ULTRA® 250+ / 27,700 77% 17% 6% 87% 13% Combustion Modifications 110+ / 16,400 89% 9% 2% 74% 26% SCR, ASCR,
Slide 12: Air Pollution Control Segment: Overview and U.S. Market Drivers
AIR POLLUTION CONTROL SEGMENT Overview and U.S. Market Drivers ▪ Award activity slower than expected in 2019; pursuing APC Revenues ($ in MMs) global sales pipeline of ~ $80-100 M ▪ Capitalizing on the flexibility of our solutions portfolio $38.4 as the fuel mix remains in favor of natural gas $27.8
Slide 13: Air Pollution Control Segment: Representative Solutions and Results
AIR POLLUTION CONTROL SEGMENT Representative Solutions and Results ULTRA ® Systems SCR Systems NOx 60-80% 60-80% Combustion Modifications/ ® Over-fire Air (OFA) NOx- OUT SNCR NOx NOx 75% 30-50% 25-40% Before After 13
Slide 14: The U.S. Is Moving Beyond Coal
THE U.S. IS MOVING BEYOND COAL… Primary Source of Electricity Generation 2001 2017 Coal: 32 states / Gas: 7 states Coal: 18 states / Gas: 16 states / Nuclear: 9 states June 2019 Update Gas 20 (add PA, OH, AZ, CT) / Coal 16 ( less OH, KS) / Hydro 6 Nuclear 6 / Oil 1 / Wind 1 (add KS) Sources: The New
Slide 15: ...And So Is Fuel Tech
…AND SO IS FUEL TECH Revenue by Fuel Source Our flexible, adaptable APC solutions reflect the changing domestic fuel source landscape 2016 2017 2018 12% 4% 10% 23% 29% 56% 84% 21% 60% Coal Natural Gas Other 15
Slide 16: Air Pollution Control Segment: International Market Drivers
AIR POLLUTION CONTROL SEGMENT International Market Drivers ▪ Europe – Opportunities driven by BREF (Best Available Reference Technology); guidelines issued in August 2017 with a compliance timeline through 2020 – Guidelines reduced target NOx emissions from current levels – Timeline to be extended b
Slide 17: FUEL CHEM Segment
FUEL CHEM® SEGMENT FUEL CHEM® Revenues ▪ In the US, this technology is used primarily to support the ($ in MMs) cost reduction efforts of coal-fired utility power plant owners looking to use lower cost fuel to remain competitive $18.1 ▪ New units installed Q3 2018 + Q2 2019 added $17.4 $8.5 incremen
Slide 18: TIFI Program Treatment Benefits
TIFI® PROGRAM TREATMENT BENEFITS Hard Slag Formation Controlled Before TIFI® After TIFI® • Tenacious • Lighter • Fewer pores • Softer • Hard, dense • Easier to • Amorphous crumble Benefitting a Biomass Boiler WITHOUT TIFI® WITH TIFI® Higher DP and flue No more outages for gas temperature slag remova
Slide 19: FUEL CHEM Segment: TIFI Programs Mitigate SO3
FUEL CHEM® SEGMENT TIFI® Targeted In-Furnace Injection™ Programs Mitigate SO3 Punta Prieta / La Paz, Mexico By targeting the problem areas of a furnace instead Before TIFI program 6 Hours Later of targeting the fuel, the performance and cost Before TIFI program effectiveness of TIFI® programs are si
Slide 20: DGI Dissolved Gas Infusion Technology
DGI TM DISSOLVED GAS INFUSION TECHNOLOGY ▪ Exclusive license for North America for use of NanO2’s micro-nanobubble dissolved gas technology for specified markets ▪ Applicable for the delivery of any treatment gas into a liquid via a carrier stream ▪ Proprietary nozzle technology (below) delivers sup
Slide 21: Highly Efficient Process for Wastewater Management
HIGHLY EFFICIENT PROCESS FOR WASTEWATER MANAGEMENT SYSTEM BENEFITS ▪ Operating costs up to 50% lower than conventional aeration ▪ Can deliver a solution with dissolved O2 content up to 40x that of conventional aeration ▪ Modular, compact, scalable systems for rapid deployment ▪ System can maximize a
Slide 22: Quarterly Operating Performance
QUARTERLY OPERATING PERFORMANCE Last 5 Quarters Q2 Q1 Q4 Q3 Q2 2019 2019 2018 2018 2018 (in MMs, except per share data) Total Revenues $8.9 $10.2 $15.8 $16.1 $11.8 Gross Profit $3.9 $4.0 $5.9 $5.4 $3.7 Gross Margin % 43.6% 39.5% 37.3% 33.7% 31.4% SG&A $4.5 $4.5 $4.8 $4.1 $4.7 Net (Loss) Income from
Slide 23: Summary
SUMMARY APC FUEL CHEM Improved cost Focus on global structure development for Performance should traditional end markets Eliminate China improve 2H 2019 losses by YE 2019 Increased focus on supplying SCR/ULTRA Focus on new $0 LTD profile solutions for natural gas market segments and turbines (indust
Slide 24: Thank You
THANK YOU Vince Arnone Devin Sullivan Chairman, President and CEO Senior Vice President (630) 845-4500 (212) 836-9608 varnone@ftek.com dsullivan@equityny.com 24