Fuel Tech Reports 2024 Fourth Quarter and Full Year Financial Results

Rhea-AI Summary

Fuel Tech (NASDAQ: FTEK) reported its Q4 and full-year 2024 financial results, with annual revenues reaching $25.1 million, down from $27.1 million in 2023. The company ended Q4 2024 with a net loss of $(1.9) million, or $(0.06) per share, compared to a loss of $(539,000) in Q4 2023.

Q4 2024 consolidated revenues declined to $5.3 million from $6.3 million year-over-year, with gross margin falling to 42.3% from 51.1%. The Air Pollution Control (APC) segment backlog stood at $6.2 million, with additional $1.6 million in new contracts awarded in early 2025. The company maintains a strong financial position with $30 million in cash and investments and no long-term debt.

Management expects improved performance in 2025 for the FUEL CHEM segment, driven by normalized chemical program utilization and new commercial programs. The company is also pursuing growth in Dissolved Gas Infusion (DGI) technology, with demonstrations planned at aquaculture facilities.

Positive

• Strong financial position with $30M in cash/investments and zero debt
• New APC contracts worth $1.6M secured in early 2025
• Additional $4-5M in contracts expected by Q2 2025
• Expansion into data center market with SCR and ULTRA technologies

Negative

• Q4 2024 revenue declined 15.9% to $5.3M
• Q4 2024 net loss widened to $(1.9M) from $(539K)
• Full-year 2024 revenue dropped 7.4% to $25.1M
• Gross margin declined to 42.3% from 51.1% in Q4
• SG&A expenses increased to $13.8M from $12.8M

Insights

Financial Analyst

Fuel Tech's Q4 and full-year 2024 results reveal concerning financial deterioration. Revenue declined to $5.3 million for Q4 (down 15.9% year-over-year) and $25.1 million for the full year (a 7.4% decrease from 2023). More troubling is the widening quarterly net loss of $1.9 million ($0.06 per share), significantly deeper than the $539,000 loss in Q4 2023.

Gross margin compression is evident across both business segments, with consolidated margins falling to 42.3% from 51.1% in Q4 2023. This coincides with rising SG&A expenses, which increased to $3.9 million in Q4 and $13.8 million for the year (54.8% of revenues compared to 47.3% in 2023).

The APC segment shows particular weakness with revenue dropping to $1.8 million from $2.8 million and gross margins declining dramatically to 35.9% from 55.0%. The backlog continues to shrink, now at $6.2 million versus $7.5 million a year ago.

The company's financial position remains the primary strength, with $29.6 million in cash and investments (98% of market cap) and zero debt. This provides significant runway despite operational challenges and negative adjusted EBITDA of $1.8 million in Q4.

Management's outlook for 2025 hinges on improvement in FUEL CHEM utilization at existing accounts, new commercial programs, and potential revenue from their developing DGI technology. While they anticipate $4-5 million in new contracts by early Q2 2025, these projections need to materialize quickly to reverse the negative operational trajectory.

Industrial Technology Specialist

Fuel Tech's technology portfolio shows promise despite financial underperformance. Their FUEL CHEM business demonstrates stability at $3.5 million quarterly revenue with respectable 45.5% margins, indicating customer retention despite utilization challenges from plant outages.

The company's strategic targeting of emerging markets deserves attention. Their pursuit of data center opportunities for emissions control solutions (SCR and ULTRA technologies) aligns with the sector's explosive growth and increasing environmental scrutiny. Similarly, their engagement with municipal waste combustion operators facing stricter emission requirements creates a regulatory-driven market opportunity.

Their Dissolved Gas Infusion (DGI) technology represents their most interesting growth vector. The planned demonstration at a second aquaculture facility indicates traction in this vertical, with potential commercial revenue in 2025. This oxygen infusion technology addresses critical needs in wastewater management, environmental remediation, and aquaculture - all sectors with increasing environmental compliance requirements.

The technological foundation remains sound with 1,300+ installations of their NOx reduction systems globally, providing credibility for new market penetration. However, execution challenges are evident in their APC segment, where project delays and timing issues have impacted revenue.

While management expects to sign $4-5 million in new contracts by early Q2, their ability to convert their technology advantages into revenue growth remains unproven after a disappointing 2024. The extended demonstration cycle for DGI technology also suggests a longer commercialization timeline than investors might prefer.

WARRENVILLE, Ill., March 04, 2025 (GLOBE NEWSWIRE) -- Fuel Tech, Inc. (NASDAQ: FTEK), a technology company using advanced engineering processes to provide emissions control systems and water treatment technologies in utility and industrial applications, today reported financial results for the fourth quarter (Q4) and full year ended December 31, 2024.

“Revenues for full year 2024 came in at the lower end of our guidance range of $25 million to $26 million, due primarily to the impact of delayed project execution and to the timing of Air Pollution Control (APC) awards offset by a stronger performance at our FUEL CHEM^® business segment,” said Vincent J. Arnone, President and CEO. “We continued our stewardship of selling, general and administrative expenses and ended the year in a strong financial position, with approximately $30 million in cash and investments, and no long-term debt.

“We believe that performance for the FUEL CHEM segment will improve in 2025, driven by a return to normalized chemical program utilization at our base accounts following extended plant outages at certain sites during the year, and incremental year-on-year contributions from a new commercial program on a coal-fired unit that commenced in the fourth quarter of 2024. We are pursuing an additional new FUEL CHEM account opportunity, starting with a demonstration of our TIFI^® Targeted In-Furnace Injection™ technology that will likely commence in late third quarter of this year.”

Mr. Arnone continued, “While our overall results were negatively impacted by performance within the APC segment, we recently announced new awards of $1.6 million with an expectation to sign new contracts between now and early in the second quarter of 2025 with an aggregate value of between $4 million and $5 million. We are also pursuing separate opportunities with the operators of municipal waste combustion units who are being driven to meet lower emission requirements due to specific state regulatory requirements, as well as with entities associated with the development of data centers.

Data centers offer a promising opportunity for Fuel Tech’s emissions control solutions, including our SCR and ULTRA® technologies.”

Mr. Arnone concluded, “We are also continuing to pursue the growth and development of our Dissolved Gas Infusion (DGI^®) technology. We will commence an extended demonstration at a fish hatchery in the Western U.S, our second at an aquaculture facility, early in the second quarter of 2025. We continue to receive inquiries regarding DGI from potential customers in multiple end markets and we are hopeful that we can generate our first commercial revenues in 2025. We are looking forward to showcasing DGI at Aquaculture 2025 being held in New Orleans March 6-10, 2025.” 

Q4 2024 Consolidated Results Overview

Consolidated revenues for Q4 2024 declined to $5.3 million from $6.3 million in Q4 2023, primarily reflecting lower APC segment revenues.

Consolidated gross margin for Q4 2024 declined to 42.3% of revenues from 51.1% of revenues in Q4 2023, reflecting decreases in both APC and FUEL CHEM gross margins compared to Q4 2023.

SG&A expenses increased to $3.9 million from $3.7 million in Q4 2023, reflecting an increase in employee related costs and other expenses.

Interest income was flat at $0.3 million and related primarily to interest received on the held-to-maturity debt securities and money market funds.

Net loss in Q4 2024 was $(1.9) million, or $(0.06) per share, compared to net loss of $(539,000), or $(0.02) per share, in Q4 2023.

Consolidated APC segment backlog at December 31, 2024 was $6.2 million compared to $6.4 million at September 30, 2024 and $7.5 million at December 31, 2023. Consolidated backlog at December 31, 2024 did not include $1.6 million of new APC contracts awarded and announced in the first quarter of 2025.

APC segment revenue decreased to $1.8 million from $2.8 million in Q4 2024. APC gross margin declined to 35.9% from 55.0%, primarily due to product mix.

FUEL CHEM segment revenue remained steady at $3.5 million. Segment gross margin declined to 45.5% from 48.0% in Q4 2023.

Adjusted EBITDA loss was $(1.8) million in Q4 2024 compared to Adjusted EBITDA loss of $(0.6) million in Q4 2023.

2024 Full Year Overview

Consolidated revenues for 2024 declined to $25.1 million from $27.1 million in 2023, driven by lower APC revenues, partially offset by an increase in FUEL CHEM revenues.

Consolidated gross margin for 2024 was 42.3% compared to 43.0% in 2023, reflecting slight declines in both APC and FUEL CHEM gross margins.

SG&A expenses for 2024 increased to $13.8 million, or 54.8% of revenues, from $12.8 million, or 47.3% of revenues, in 2023, reflecting an increase in employee related costs and other expenses.

Interest income was roughly flat at $1.3 million.

Net loss for 2024 was $(1.9) million, or $(0.06) per share, compared to net loss of $(1.5) million, or $(0.05) per share, in 2023.

Adjusted EBITDA loss was $(2.2) million in 2024 compared to Adjusted EBITDA loss of $(2.0) million in 2023.

Financial Condition

At December 31, 2024, cash and cash equivalents were $8.5 million, short-term investments were $10.2 million, and long-term investments totaled $10.9 million. Stockholders’ equity at December 31, 2024 was $42.0 million, or $1.37 per share, and the Company had no debt.

Conference Call

Management will host a conference call on Wednesday, March 5, 2025 at 10:00 am ET / 9:00 am CT to discuss the results and business activities. Interested parties may participate in the call by dialing:

• (877) 423-9820 (Domestic) or
• (201) 493-6749 (International)

The conference call will also be accessible via the Upcoming Events section of the Company’s web site at www.ftek.com. Following management’s opening remarks, there will be a question-and-answer session. Questions may be asked during the live call, or alternatively, you may e-mail questions in advance to dsullivan@equityny.com. For those who cannot listen to the live broadcast, an online replay will be available at www.ftek.com.

About Fuel Tech

Fuel Tech develops and commercializes state-of-the-art proprietary technologies for air pollution control, process optimization, water treatment, and advanced engineering services. These technologies enable customers to operate in a cost-effective and environmentally sustainable manner. Fuel Tech is a leader in nitrogen oxide (NO_x) reduction and particulate control technologies and its solutions have been installed on over 1,300 utility, industrial and municipal units worldwide. The Company’s FUEL CHEM^® technology improves the efficiency, reliability, fuel flexibility, boiler heat rate, and environmental status of combustion units by controlling slagging, fouling, corrosion and opacity. Water treatment technologies include DGI^® Dissolved Gas Infusion Systems which utilize a patented saturator and a patent-pending channel injector to deliver supersaturated oxygen solutions and other gas-water combinations to target process applications or environmental issues. This infusion process has a variety of applications in the water and wastewater industries, including remediation, aeration, biological treatment and wastewater odor management. Many of Fuel Tech’s products and services rely heavily on the Company’s exceptional Computational Fluid Dynamics modeling capabilities, which are enhanced by internally developed, high-end visualization software. For more information, visit Fuel Tech’s web site at www.ftek.com.

NOTE REGARDING FORWARD-LOOKING STATEMENTS

This press release 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 and reflect Fuel Tech’s current expectations regarding future growth, results of operations, cash flows, performance and business prospects, and opportunities, as well as assumptions made by, and information currently available to, our management. Fuel Tech has tried to identify forward-looking statements by using words such as “anticipate,” “believe,” “plan,” “expect,” “estimate,” “intend,” “will,” and similar expressions, but these words are not the exclusive means of identifying forward-looking statements. These statements are based on information currently available to Fuel Tech and are subject to various risks, uncertainties, and other factors, including, but not limited to, contracts being awarded to competitors offering different or lower-priced technologies, projects being suspended, delayed or cancelled and other risks discussed in Fuel Tech’s Annual Report on Form 10-K in Item 1A under the caption “Risk Factors,” and subsequent filings under the Securities Exchange Act of 1934, as amended, which could cause Fuel Tech’s actual growth, results of operations, financial condition, cash flows, performance and business prospects and opportunities to differ materially from those expressed in, or implied by, these statements. Fuel Tech undertakes no obligation to update such factors or to publicly announce the results of any of the forward-looking statements contained herein to reflect future events, developments, or changed circumstances or for any other reason. Investors are cautioned that all forward-looking statements involve risks and uncertainties, including those detailed in Fuel Tech’s filings with the Securities and Exchange Commission.

FUEL TECH, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)
		December 31,
		2024				2023
ASSETS
Current assets:
Cash and cash equivalents		$	8,510			$	17,578
Short-term investments			10,184				12,136
Accounts receivable, less current expected credit loss of $106 and $111, respectively			9,368				6,729
Inventories, net			397				439
Prepaid expenses and other current assets			1,160				1,439
Total current assets			29,619				38,321
Property and equipment, net			5,084				4,539
Goodwill			2,116				2,116
Other intangible assets, net			327				358
Right-of-use operating lease assets			585				609
Long-term investments			10,875				3,664
Other assets			191				781
Total assets		$	48,797			$	50,388
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable		$	2,915			$	2,421
Accrued liabilities:
Operating lease liabilities – current			77				81
Employee compensation			1,248				1,252
Other accrued liabilities			1,615				1,934
Total current liabilities			5,855				5,688
Operating lease liabilities – non-current			548				533
Deferred income taxes			176				172
Other liabilities			263				281
Total liabilities			6,842				6,674
Commitments and contingencies (Note 9)
Stockholders’ equity:
Common stock, $.01 par value, 40,000,000 shares authorized, 31,767,329 and 31,361,303 shares issued, and 30,708,273 and 30,385,297 shares outstanding in 2024 and 2023, respectively			317				313
Additional paid-in capital			165,295				164,853
Accumulated deficit			(119,472	)			(117,529	)
Accumulated other comprehensive loss			(1,915	)			(1,748	)
Nil coupon perpetual loan notes			76				76
Treasury stock, at cost (Note 5)			(2,346	)			(2,251	)
Total stockholders’ equity			41,955				43,714
Total liabilities and stockholders’ equity		$	48,797			$	50,388
See notes to condensed consolidated financial statements.

FUEL TECH, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share data)
		Three Months Ended								Twelve Months Ended
		December 31,								December 31,
		2024				2023				2024				2023
Revenues		$	5,283			$	6,345			$	25,133			$	27,081
Costs and expenses:
Cost of sales			3,048				3,102				14,510				15,425
Selling, general and administrative			3,946				3,677				13,761				12,803
Research and development			405				367				1,564				1,511
			7,399				7,146				29,835				29,739
Operating loss			(2,116	)			(801	)			(4,702	)			(2,658	)
Interest expense			—				(6	)			—				(21	)
Interest income			283				332				1,251				1,300
Other income (expense), net			9				5				1,585				(90	)
Loss before income taxes			(1,824	)			(470	)			(1,866	)			(1,469	)
Income tax expense			(59	)			(69	)			(77	)			(69	)
Net loss		$	(1,883	)		$	(539	)		$	(1,943	)		$	(1,538	)
Net loss per common share:
Basic net loss per common share		$	(0.06	)		$	(0.02	)		$	(0.06	)		$	(0.05	)
Diluted net loss per common share		$	(0.06	)		$	(0.02	)		$	(0.06	)		$	(0.05	)
Weighted-average number of common shares outstanding:
Basic			30,708,000				30,385,000				30,572,000				30,348,000
Diluted			30,708,000				30,385,000				30,572,000				30,348,000
See notes to condensed consolidated financial statements.

FUEL TECH, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(in thousands)
		For the years ended December 31,
		2024				2023
Net loss		$	(1,943	)		$	(1,538	)
Other comprehensive loss:
Foreign currency translation adjustments			(167	)			(20	)
Total other comprehensive loss			(167	)			(20	)
Comprehensive loss		$	(2,110	)		$	(1,558	)
See notes to condensed consolidated financial statements.

FUEL TECH, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
		For the years ended December 31,
		2024				2023
OPERATING ACTIVITIES
Net loss		$	(1,943	)		$	(1,538	)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation			403				281
Amortization			57				61
Loss on sale of equipment			—				10
Non-cash interest income on held-to-maturity securities			(132	)			(433	)
Provision for credit losses, net of recoveries			(4	)			—
Deferred income taxes			4				(5	)
Stock-based compensation, net of forfeitures			446				389
Changes in operating assets and liabilities:
Accounts receivable			(1,127	)			1,039
Employee retention credit receivable			(1,677	)			—
Inventories			41				(46	)
Prepaid expenses, other current assets and other non-current assets			292				(6	)
Accounts payable			519				(295	)
Accrued liabilities and other non-current liabilities			(312	)			1,239
Net cash (used in) provided by operating activities			(3,433	)			696
INVESTING ACTIVITIES
Purchases of equipment and patents			(378	)			(418	)
Purchases of debt securities			(18,060	)			(14,026	)
Maturities of debt securities			12,995				8,000
Net cash used in investing activities			(5,443	)			(6,444	)
FINANCING ACTIVITIES
Proceeds from exercise of stock options			—				42
Taxes paid on behalf of equity award participants			(95	)			—
Net cash (used in) provided by financing activities			(95	)			42
Effect of exchange rate fluctuations on cash			(97	)			(44	)
Net decrease in cash and cash equivalents			(9,068	)			(5,750	)
Cash and cash equivalents at beginning of period			17,578				23,328
Cash and cash equivalents at end of period		$	8,510			$	17,578
Supplemental Cash Flow Information:
Cash income taxes paid, net			52				12
Non-cash transfer from other non-current assets to property and equipment		$	597			$	—
See notes to condensed consolidated financial statements.

Fuel Tech, Inc.
Segment Data- Reporting Segments
(in thousands)
Information about reporting segment net sales and gross margin from operations is provided below:
Three months ended December 31, 2024		Air Pollution Control Segment				FUEL CHEM Segment				Other				Total
Revenues from external customers		$	1,751			$	3,532			$	—			$	5,283
Cost of sales			(1,123	)			(1,925	)			—				(3,048	)
Gross margin			628				1,607				—				2,235
Selling, general and administrative			—				—				(3,946	)			(3,946	)
Research and development			—				—				(405	)			(405	)
Operating income (loss) from continuing operations		$	628			$	1,607			$	(4,351	)		$	(2,116	)

Three months ended December 31, 2023		Air Pollution Control Segment				FUEL CHEM Segment				Other				Total
Revenues from external customers		$	2,791			$	3,554			$	—			$	6,345
Cost of sales			(1,255	)			(1,847	)			—				(3,102	)
Gross margin			1,536				1,707				—				3,243
Selling, general and administrative			—				—				(3,677	)			(3,677	)
Research and development			—				—				(367	)			(367	)
Operating income (loss) from continuing operations		$	1,536			$	1,707			$	(4,044	)		$	(801	)

For the year ended December 31, 2024		Air Pollution Control Segment				FUEL CHEM Segment				Other				Total
Revenues from external customers		$	11,242			$	13,891			$	—			$	25,133
Cost of sales			(7,050	)			(7,460	)			—				(14,510	)
Gross margin			4,192				6,431				—				10,623
Selling, general and administrative			—				—				(13,761	)			(13,761	)
Research and development			—				—				(1,564	)			(1,564	)
Operating income (loss) from continuing operations		$	4,192			$	6,431			$	(15,325	)		$	(4,702	)

For the year ended December 31, 2023		Air Pollution Control Segment				FUEL CHEM Segment				Other				Total
Revenues from external customers		$	13,483			$	13,598			$	—			$	27,081
Cost of sales			(8,410	)			(7,015	)			—				(15,425	)
Gross margin			5,073				6,583				—				11,656
Selling, general and administrative			—				—				(12,803	)			(12,803	)
Research and development			—				—				(1,511	)			(1,511	)
Operating income (loss) from continuing operations		$	5,073			$	6,583			$	(14,314	)		$	(2,658	)

Fuel Tech, Inc.
Geographic Segment Financial Data
(in thousands)
Information concerning our operations by geographic area is provided below. Revenues are attributed to countries based on the location of the end-user. Assets are those directly associated with operations of the geographic area.
For the years ended December 31,		2024				2023
Revenues:
United States		$	17,802			$	21,397
Foreign			7,331				5,684
		$	25,133			$	27,081

As of December 31,		2024				2023
Assets:
United States		$	44,430			$	46,487
Foreign			4,367				3,901
		$	48,797			$	50,388

FUEL TECH, INC.
RECONCILIATION OF GAAP NET LOSS TO EBITDA AND ADJUSTED EBITDA
(in thousands)
		Three Months Ended								Twelve Months Ended
		December 31,								December 31,
		2023				2023				2024				2023
Net loss		$	(1,883	)		$	(539	)		$	(1,943	)		$	(1,538	)
Interest income, net			(283	)			(326	)			(1,251	)			(1,279	)
Income tax expense			59				69				77				69
Depreciation expense			155				34				403				281
Amortization expense			15				15				57				61
EBITDA			(1,937	)			(747	)			(2,657	)			(2,406	)
Stock compensation expense			109				101				446				389
Adjusted EBITDA		$	(1,828	)		$	(646	)		$	(2,211	)		$	(2,017	)

Adjusted EBITDA

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 EBITDA is defined as net income (loss) before interest expense, income tax expense (benefit), depreciation expense, amortization expense, stock compensation expense, and intangible assets abandonment and building impairment. The Company's reference to these non-GAAP measures should be considered in addition to results prepared in accordance with GAAP standards, but are not a substitute for, or superior to, GAAP results.

Adjusted EBITDA is provided to enhance investors' overall understanding of the Company's current financial performance and ability to generate cash flow, which we believe is a meaningful measure for our investor and analyst communities. In many cases non-GAAP financial measures are utilized by these individuals to evaluate Company performance and ultimately determine a reasonable valuation for our common stock. A reconciliation of Adjusted EBITDA to the nearest GAAP measure of net loss has been included in the above financial table.

CONTACT:	Vince Arnone	Devin Sullivan
	President and CEO	Managing Director
	(630) 845-4500	The Equity Group Inc.
		dsullivan@equityny.com

FAQ

What were Fuel Tech's (FTEK) Q4 2024 financial results?

FTEK reported Q4 2024 revenues of $5.3 million with a net loss of $(1.9) million, or $(0.06) per share, and gross margin of 42.3%.

How much cash and investments does FTEK have as of December 2024?

FTEK holds approximately $30 million in cash and investments, with no long-term debt.

What is FTEK's APC segment backlog as of December 31, 2024?

The APC segment backlog was $6.2 million, with additional $1.6 million in new contracts awarded in early 2025.

What are FTEK's growth initiatives for 2025?

FTEK plans to expand FUEL CHEM segment, pursue new APC contracts worth $4-5 million, and commercialize DGI technology in aquaculture markets.

How did FTEK's full-year 2024 performance compare to 2023?

2024 revenues declined to $25.1 million from $27.1 million in 2023, with net loss increasing to $(1.9) million from $(1.5) million.