Fuel-Tech N.V. Reports Third-Quarter Results; FUEL CHEM Nine-Month Revenue Growth Exceeds 70%.STAMFORD, Conn. -- Fuel-Tech N.V. (Nasdaq: FTEK), a world leader in advanced engineering solutions for the optimization optimization Field of applied mathematics whose principles and methods are used to solve quantitative problems in disciplines including physics, biology, engineering, and economics. of combustion combustion, rapid chemical reaction of two or more substances with a characteristic liberation of heat and light; it is commonly called burning. The burning of a fuel (e.g., wood, coal, oil, or natural gas) in air is a familiar example of combustion. systems in utility and industrial applications, today reported results for the third quarter and nine months ended September 30, 2004. For the third quarter, net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight were $9.6 million versus $10.2 million in the comparable prior-year period. Net income for the quarter was $1.0 million, or $0.05 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, compared with net income of $1.3 million, or $0.06 per diluted share, in the same quarter a year ago. Net sales year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. were $23.1 million, down from $28.2 million in 2003. Net income year-to-date was $261,000, or $0.01 per diluted share, compared with net income of $1.4 million, or $0.06 per diluted share, in 2003. "The third-quarter results are in line with our expectations. Although down slightly from the comparable prior-year quarter, both the air pollution control and Fuel Chem businesses showed incremental Additional or increased growth, bulk, quantity, number, or value; enlarged. Incremental cost is additional or increased cost of an item or service apart from its actual cost. improvement from the second quarter of this year," commented Steven C. Argabright, President and Chief Operating Officer Chief Operating Officer (COO) The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. . "The air pollution control business has begun to show the improvement that we had expected in the second half of the year, and we have realized approximately $15 million in project bookings since June 1. Accelerated revenues are expected in this business in 2005 and 2006. The Fuel Chem business had a record quarter, with revenues in excess of $5 million. Revenue growth year-to-date has exceeded 70% with the improvement attributable to increased penetration of the Western coal-fired utility market and, to a lesser degree, revenues associated with the business acquired September 30, 2003 from Martin Marietta Martin Marietta Corporation was founded in 1961 through the merger of The Martin Company and American-Marietta Corporation. The combined company became a leader in aggregates, cement, chemicals, aerospace, and electronics. Magnesia Magnesia, ancient cities, Lydia Magnesia (măgnē`zhə), two ancient cities of Lydia, W Asia Minor (now W Turkey). They were colonies of the Magnetes, a tribe of E Thessaly. Specialties, LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control ." Mr. Argabright continued, "We are pleased with the recent orders that have been received for our air pollution control business and we expect additional orders as we move into 2005. Our sales focus in the air pollution control business remains the creation of alliances with major utilities. Further, we continue to be excited by the prospects for continued revenue growth in the Fuel Chem business. Our sales and marketing efforts are intensely focused on penetrating penetrating breaching the tissues of the body. the Western coal-fired marketplace, as this segment represents the largest opportunity for the fuel treatment chemical business. We are optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op that additional orders will be received from both new and existing customers in the near future." Conference Call As a reminder, Fuel-Tech N.V will be hosting a telephone conference call at 10:00 AM EST EST electroshock therapy. EST abbr. electroshock therapy on Tuesday, November 2, 2004, to discuss third-quarter results. This conference will simultaneously be broadcast over the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the at www.fueltechnv.com and can be accessed under the subheading sub·head·ing n. See subhead. subheading Noun the heading of a subdivision of a piece of writing Noun 1. of "Investors" on the home page. About Fuel-Tech N.V. Fuel-Tech N.V. is a leading technology company providing proprietary advanced engineering solutions for the optimization of combustion systems for utility and industrial customers. The Company's NOx reduction processes, which include the NOxOUT(R), NOxOUT CASCADE(R), NOxOUT ULTRA(R), Rich Reagent reagent /re·a·gent/ (re-a´jent) a substance used to produce a chemical reaction so as to detect, measure, produce, etc., other substances. re·a·gent n. Injection (RRI RRI Radio Romania International RRI Raman Research Institute RRI Resource Renewal Institute RRI Robarts Research Institute RRI Research Reactor Institute RRI Renal Research Institute (USA) RRI Rights and Resources Initiative ) and NOxOUT SCR (Sequence Control Register) See program counter. (R) technologies, have established Fuel-Tech N.V. as a leader in post-combustion NOx control systems, which are installed on over 300 units worldwide. New technologies that have grown out of the core NOx reduction business form the basis of the FUEL CHEM(R) and ACUITIV(TM) businesses. FUEL CHEM technology centers around the unique application of chemicals to improve the performance of combustion application of chemicals to improve the performance of combustion units while the Company's ACUITIV business includes high-end visualization Using the computer to convert data into picture form. The most basic visualization is that of turning transaction data and summary information into charts and graphs. Visualization is used in computer-aided design (CAD) to render screen images into 3D models that can be viewed from all software that was developed as part of Fuel Tech's sophisticated Computational Fluid Dynamics Computational fluid dynamics The numerical approximation to the solution of mathematical models of fluid flow and heat transfer. Computational fluid dynamics is one of the tools (in addition to experimental and theoretical methods) available to solve (CFD CFD - Computational Fluid Dynamics ) modeling techniques utilized to predict the behavior of industrial processes. The Company's FUEL CHEM products are being applied to over 80 combustion units burning a variety of fuels. For more information, visit Fuel-Tech N.V.'s web site at www.fueltechnv.com. This press release may contain statements of a forward-looking nature regarding future events. These statements are only predictions and actual events may differ materially. Please refer to documents that Fuel Tech files from time to time with the Securities and Exchange Commission for a discussion of certain factors that could cause actual results to differ materially from those contained in the forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. .
FUEL-TECH N.V.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands of U.S. dollars, except share data)
September December
30, 2004 31, 2003
(Unaudited)
----------- -----------
Assets
Current assets:
Cash and cash equivalents $ 5,281 $ 7,812
Accounts receivable, net 7,221 6,095
Prepaid expenses and other current assets 1,821 1,107
----------- -----------
Total current assets 14,323 15,014
Equipment, net of accumulated depreciation of
$6,847 and $6,165, respectively 3,077 2,127
Goodwill 2,119 2,119
Other intangible assets, net of accumulated
amortization of $97 and $24, respectively 1,201 1,274
Other 806 1,064
----------- -----------
Total assets $ 21,526 $ 21,598
=========== ===========
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $ 2,374 $ 2,244
Accrued expenses 1,304 1,744
----------- -----------
Total current liabilities 3,678 3,988
Other liabilities 277 299
----------- -----------
Total liabilities 3,955 4,287
Stockholders' equity:
Common stock, par value $0.01 per share,
authorized 40,000,000 shares, 19,520,812
and 19,621,503 shares issued, respectively 195 196
Additional paid-in capital 88,586 89,698
Accumulated deficit (71,769) (72,030)
Accumulated other comprehensive income 27 48
Treasury stock - (1,133)
Nil coupon perpetual loan notes 532 532
----------- -----------
Total stockholders' equity 17,571 17,311
----------- -----------
Total liabilities and stockholders' equity $ 21,526 $ 21,598
=========== ===========
FUEL-TECH N.V.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands of U.S. dollars, except share data)
Three Months Ended Nine Months Ended
September 30 September 30
2004 2003 2004 2003
------------------------- -------------------------
Net sales $ 9,577 $ 10,178 $ 23,081 $ 28,182
Costs and expenses:
Cost of sales 4,813 5,592 12,225 17,412
Selling, general
and administrative 3,398 2,961 9,664 8,565
Research and
development 322 314 895 920
------------ ------------ ------------ ------------
Operating income 1,044 1,311 297 1,285
Interest expense - - - (25)
Other (loss)
income, net (6) 6 (36) 140
------------ ------------ ------------ ------------
Income before taxes 1,038 1,317 261 1,400
Income taxes - - - -
------------ ------------ ------------ ------------
Net income $ 1,038 $ 1,317 $ 261 $ 1,400
============ ============ ============ ============
Net income per
common share:
Basic $ .05 $ .07 $ .01 $ .07
============ ============ ============ ============
Diluted $ .05 $ .06 $ .01 $ .06
============ ============ ============ ============
Average number of
common shares
outstanding:
Basic 19,519,000 19,744,000 19,512,000 19,629,000
============ ============ ============ ============
Diluted 22,149,000 22,748,000 22,127,000 22,325,000
============ ============ ============ ============
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