Fuel Tech (FTEK) Q3 2024 earnings summary

Executive summary

• Returned to profitability in Q3 2024, driven by FUEL CHEM segment growth, expense discipline, and increased demand from coal-fired utilities and fossil fuel operators, despite APC segment delays.

• Q3 2024 revenues were $7.9 million, down 2% year-over-year, with FUEL CHEM revenue up 8% and APC revenue down 13%.

• Ended Q3 2024 with over $31 million in cash, cash equivalents, and investments, and no debt.

• Progressed commercialization of DGI technology, with a demonstration agreement for aquaculture and ongoing discussions in other end markets.

• Announced $2 million in new APC orders, with expectations for an additional $2–$4 million in orders by year-end or early 2025.

Financial highlights

• Q3 2024 consolidated revenues were $7.9 million, down from $8 million in Q3 2023; nine-month revenues were $19.9 million, down 4%.

• Fuel Chem segment revenue increased to $4.6 million from $4.3 million year-over-year; APC segment revenue declined to $3.2 million from $3.7 million.

• Consolidated gross margin was 43%, down from 45% in Q3 2023, mainly due to lower APC segment margins.

• Net income was $80,000 ($0.00 per share), compared to $459,000 ($0.01 per share) in Q3 2023; nine-month net loss was $60,000.

• Adjusted EBITDA loss was $35,000, versus adjusted EBITDA of $352,000 in the prior year period.

Outlook and guidance

• Total 2024 revenues expected in the range of $25–$26 million.

• Q4 revenue expected to be lower year-over-year due to project execution delays, but backlog will be recognized in 2025.

• SG&A expenses for 2024 projected between $13 and $13.5 million.

• Interest income for 2024 expected to exceed $1.2 million, assuming stable rates.

• Management expects cost control efforts to maintain operating expenditures and anticipates new business opportunities will improve the market outlook.