Fuel-Tech N.V. reports first quarter results.

STAMFORD, Conn.--(BUSINESS WIRE)--May 8--Fuel-Tech N.V. (NASDAQ: FTEKF), a world leader in air pollution control technology, today reported a consolidated net loss of $476,000 or four cents per share for the first quarter ended March 31, 1997, versus a consolidated net loss of $477,000, or four cents per share for the same period last year.

The results included a net loss of $141,000 from Nalco Fuel Tech (NFT), a 50 percent-owned joint venture with Nalco Chemical Company. NFT's loss in the first quarter was $281,000, compared with a loss of $207,000 for the 1996 period. NFT's net sales for the three months were $3,722,000 compared to $5,864,000 for the same period last year.

Fuel Tech received no royalty income from the NFT joint venture for the 1997 period. Fuel Tech and Nalco agreed effective Jan. 1, 1997 that Fuel Tech would forego its 1.4 percent royalty on sales of Fuel Tech's patented NOxOUT(R) Process in exchange for Nalco's award to NFT of certain international marketing rights to NFT's FUEL CHEM business and the waiver by Nalco of sales and marketing fees on domestic FUEL CHEM business. FUEL CHEM is a proprietary process which is designed to improve boiler efficiency while reducing emissions and unsightly plumes on a wide range of industrial boilers worldwide. Sales are already taking place and the company believes that its share of additional profits resulting from these changes will exceed the royalties it waives in the future.

Fuel Tech's cash position, including short term investments, at March 31, 1997 was approximately $2,813,000, compared with $2,868,000 at Dec. 31, 1996. Working capital was $3,618,000 on March 31, 1997 compared with $3,951,000 at Dec. 31, 1996.

Kent D.S. Durr, chairman and chief executive officer of Fuel-Tech N.V., commented, "Nalco Fuel Tech enjoyed a productive first quarter despite the fact that we were in a period between two regulatory deadlines in the U.S. The company was awarded two contracts totaling approximately $1.5 million to install our patented NOxOUT(R) pollution control systems at industrial facilities in Germany and Slovakia, and a $1 million contract from China Steel Corporation in Taiwan to install the NOxOUT Process in two coal-fired boilers at a facility where a previously installed NOxOUT system has been used successfully since 1995.

"Also in the first quarter, NFT received releases to engineer and construct the first two commercial NOxOUT CASCADE(R) systems (for deeper NOx cuts) in the U.S. under contracts with a value of approximately $1.9 million from Pennsylvania Electric Company and Mitsubishi Heavy Industries of America. In addition, we saw the successful startup of our first NOxOUT SCR units on heavy duty diesel engines, in Taiwan.

"Since the close of the first quarter, we have announced that the first commercial installation of our SOxOUT(R) CASCADE Process has met its guarantees to simultaneously reduce emissions of sulfur dioxide, nitrogen oxide and particulates at a district heating plant in Legnica, Poland.

"We look forward to continued progress in 1997, and expect that in the last quarter NFT will begin to benefit from the approach of the May 1999 deadline for compliance with Phase II of Title I of the Clean Air Act Amendments of 1990. This will end the transitional period in our business between the two regulatory phases in the U.S. and accelerate our growth," Durr concluded.

Fuel-Tech N.V. is engaged in the development and commercialization of proprietary air pollution control technologies, and is the leader in the market for post-combustion nitrogen oxide control systems. Its NOxOUT Process is marketed through Nalco Fuel Tech. The company has developed additional technologies, based on its NOxOUT Process, designed to reduce pollutants other than nitrogen oxide, including SOxOUT, SOxOUT CASCADE, NOxOUT CASCADE and its Fuel Chem products.

This press release contains 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. -0-

FUEL-TECH N.V.
Consolidated Statements of Operations (Unaudited)

                                   For the Three Months Ended
                                     3/31/97        3/31/96

Royalty income from joint venture   $    0      $     38,000
Costs and expenses:
Loss from equity
 interest in joint venture          141,000           103,000
General and administrative expenses 378,000           470,000
Total costs and expenses            519,000           573,000
Loss from operations               (519,000)         (535,000)
Interest and other income, net       43,000            58,000
Net loss                       $   (476,000)     $   (477,000)
Net loss per common share             ($.04)            ($.04)
Weighted average number
 of shares outstanding           12,384,501        12,350,000
Number of shares reserved for
 issuance upon conversion
 of nil coupon loan notes         1,721,441         1,729,000

FUEL-TECH N.V
CONSOLIDATED BALANCE SHEETS

                                    March 31,       December 31,
                                       1997            1996
                                   (Unaudited)

ASSETS
Current assets:
Cash and cash equivalents        $  1,400,000      $  1,305,000
Short term investments              1,413,000         1,563,000
Receivable from joint venture         497,000           648,000
Demand note from affiliate            495,000           745,000
Other current assets                  227,000           171,000
Total current assets                4,032,000         4,432,000
Other                                  54,000            63,000
Investment in joint venture         3,722,000         3,977,000
                                 $  7,808,000      $  8,472,000
Liabilities and shareholders' equity
Current liabilities:
Accounts payable and
accrued expenses                 $    414,000      $    481,000
Shareholders' equity:
Common stock
  Par value $.01 per share
  20,000,000 shares authorized
  12,479,700, shares and 12,477,513
  shares issued and outstanding       125,000           125,000
Additional paid-in capital         67,441,000        67,415,000
Accumulated deficit               (76,441,000)      (75,965,000)
Cumulative translation adjustment      18,000           140,000
Treasury stock at
  cost (93,559 shares)             (1,058,000)       (1,058,000)
Nil coupon perpetual loan notes    17,309,000        17,334,000
Total shareholders' equity          7,394,000         7,991,000
                                 $  7,808,000      $  8,472,000

CONTACT: L.B. Stauffer Thomas D. Gibson, Media Consultant

Porter, Le Vay & Rose, Inc.

212/564-4700

or

Kent D.S. Durr Scott Schecter

Chief Executive Officer Chief Financial Officer

London, England Stamford, CT

(011 44) 171 581 2051 [phone]