Fuel Tech, Inc. · NASDAQ:FTEK
Fuel Tech — Investor Presentation (March 2018)
23 slides from Fuel Tech's investor presentation, Mar 26, 2018
Slide 1: Investor Presentation March 2018
1 March 2018 Investor Presentation
Slide 2: Safe Harbor
2 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
Slide 3: Investment Overview
3 Investment Overview » Diverse, Customizable Portfolio of Low Cap-ex Emissions Control Solutions to Enable Clean Efficient Energy – APC: pace of bookings rising; pursuing global pipeline of ~$150 M – FUEL CHEM®: revenue level in 2018 to approximate 2017; gross margin should remain stable at 48% – 5
Slide 4: Delivering Against Corporate Financial Initiatives
4 Delivering Against Corporate Financial Initiatives Revenues $18.2 M SG&A $11.1 M Operating Loss $(7.4) M Adjusted EBITDA Loss $(4.1) M Cash $12.6 M ~50% Increase $10 - $11 M “Significantly narrowed” “Slightly positive” “Stable to slightly higher” Revenues $26.9 M / +48% SG&A $9.8 M Operating Incom
Slide 5: Investment Overview: Rising Revenue + Declining Costs = Return to Profitability
5 Investment Overview Operating (Loss) Income Q4 2017 was first operating profit since Q3 2014 Focusing on Business Development, Cost Control, and Cash Flow $30.9 $25.6 $8.5 $9.7 $13.5 SG&A ~41% decline (2014 – 2017) Revenue Sequential growth, reflects conversion of new orders $35.4 2014 2015 2016 2
Slide 6: Improving Financial Position
6 Improving Financial Position Investment Overview $12.2 2014 2015 2016 20176/30 2017 $14.4 $16.2 3/31 2017 9/30 2017 $12.6 12/31 2017 0$ Cash & Cash Equivalents Long-Term Debt $ in MMs, except per share $0.60 p/s $8.0 $22.5 12/31 2016 $23.4 $21.4 9/30 2017 3/31 2017 12/31 2017 $22.1 6/30 2017 Impro
Slide 7: Innovative Technology, Engineering and Design
7 Innovative Technology, Engineering and Design 3-D Visualization Creates Custom Solutions Technologies to enable clean efficient energy TM Cutting Edge Solutions 119 patents pending 93 patents worldwide 28 inventions commercialized » Proprietary Software with Strong IP Protection; Patented Technolo
Slide 8: Products and Services
8 Products and Services > ASCR ® : Advanced SCR: Combines LNB, OFA, SNCR, AIG, GSG™ + Catalyst > AIG: Ammonia Injection Grid > GSG™: Graduated Straightening Grid > HERT™: High Energy Reagent Technology™ > LNB: Low NOx Burners > NOxOUT ®: SNCR system using high momentum injectors > OFA: Over-Fire Air
Slide 9: Geographies and End Markets
9 Geographies and End Markets SNCR 570+ / 51,300 FUEL CHEM® 110+ / 21,900 ULTRA® 250+ / 27,700 Combustion Modifications 110+ / 16,400 SCR, ASCR, Catalyst Management Services 150+ / 63,200 U.S. China 57% 29% 14% 84% 16% 77% 89% 81% Utility IndustrialROW 68% 32% 67% 33% 87% 13% 74% 26% 68% 32% FTEK So
Slide 10: Solutions Installed in Countries on Four Continents
10 Solutions Installed in 26 Countries on Four Continents Global Footprint USA Belgium Canada Chile China Colombia Czech Republic Denmark Dominican Rep. Ecuador France Germany India Italy Jamaica Mexico Poland Portugal Puerto Rico Romania South Korea Spain Taiwan Turkey United Kingdom Venezuela 35%
Slide 11: Blue Chip Client Base
11 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
Slide 12: Air Pollution Control Segment
12 Air Pollution Control Segment » Despite challenging environment, pace of 2017 bookings are the highest in three years; trending towards higher revenues in 2018 » Lingering regulatory uncertainty despite “coal-friendly” posture of new administration » Focus on broadening end markets, solutions por
Slide 13: Air Pollution Control Segment: Representative Solutions and Results
13 Air Pollution Control Segment Representative Solutions and Results Before After ULTRA R Systems / Over-fire Air (OFA) NOx- OUT ® SNCR SCR Systems 60-80% 75% 75%25-40 NOx 60-80% NOx NOx 30-50%
Slide 14: Air Pollution Control Segment: International Market Drivers
14 Air Pollution Control Segment International Market Drivers » Europe – $5 M of new contracts in 2017 for SCR and ULTRA, and ammonia reagent delivery – EU Industrial Emissions Directive (effective Jan. 2016) • Covers 28 European Union member states • Installed Advanced SNCR systems on 7 units to da
Slide 15: FUEL CHEM Segment
15 FUEL CHEM® Segment » Declining revenues due to low-priced natural gas and coal-to-gas conversions; consistent gross margin » Similar outlook for 2018 » In U.S. market, technology to utilities as a means to: – Combat effects of reduced load profiles – Support coal blending as a cost reduction stra
Slide 16: TIFI Program Treatment Benefits
16 Before TIFI® • Tenacious • Fewer pores • Hard, dense • Amorphous TIFI® Program Treatment Benefits After TIFI® • Lighter • Softer • Easier to crumble WITHOUT TIFI® WITH TIFI® Higher DP and flue gas temperature Unscheduled, high- cost boiler outages in order to remove slag No more outages for slag
Slide 17: FUEL CHEM Segment: TIFI Targeted In-Furnace Injection Programs
17 FUEL CHEM® Segment TIFI® Targeted In-Furnace Injection™ Programs Mitigate SO3 6 Hours Later Punta Prieta / La Paz, Mexico Before TIFI program By targeting the problem areas of a furnace instead of targeting the fuel, the performance and cost effectiveness of TIFI® programs are significantly impro
Slide 18: Evolving Business Model and Strategy
18 Evolving Business Model and Strategy » Exclusive license for North America and other territories for the non-medical use of NanO2’s micro-nanobubble dissolved gas technology. » Applicable for the delivery of any treatment gas into a liquid via a carrier stream. » NanO2 utilizes proprietary nozzle
Slide 19: Highly Efficient Aeration Process for Wastewater Management
19 Highly Efficient Aeration Process for Wastewater Management Source: NanO2 LLC » A slipstream of water to be treated is passed into and through the Nan02 pressure vessel, where a concentrated gas is introduced. » The gas-liquid solution is then discharged from the pressure vessel into the larger b
Slide 20: Operating Performance
20 Operating Performance (in MMs, except per share data) Q4 2017 Q3 2017 Q2 2017 Q1 2017 Full Year 2017 Full Year 2016 Total Revenues $ 13.4 $ 13.5 $9.8 $8.5 $ 45.2 $55.2 Gross Profit $5.6 $5.1 $3.6 $3.7 $18.0 $18.8 Gross Margin % 42.0% 37.3% 37.2% 43.8% 39.9% 34.1% SG&A $4.9 $5.0 $5.8 $5.2 $20.9 $2
Slide 21: Adjusted EBITDA Reconciliation
21 Adjusted EBITDA Reconciliation To supplement the Company's consolidated financial statements presented in accordance with generally accepted accounting principles in the United States (GAAP), the Company has provided an Adjusted EBITDA disclosure as a measure of financial performance. Adjusted EB
Slide 22: Summary
22 Summary Continue to evolve business model to address changing energy environment and global trends Continue global APC business development for traditional end markets Increased focus on supplying SCR and ULTRA solutions for natural gas turbines in the industrial market Manage through challenges
Slide 23: Thank You
23 Devin Sullivan Senior Vice President (212) 836-9608 dsullivan@equityny.com Vince Arnone Chairman, President and CEO (630) 845-4500 varnone@ftek.com Thank You