Fuel Tech Inc (FTEK) 2017 Q3 法說會逐字稿

Greetings, and welcome to the Fuel Tech, Inc. 2017 Third Quarter Financial Results Conference Call. (Operator Instructions) As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Mr. Devin Sullivan, Senior Vice President of Equity Group. Please go ahead.

Thank you, Michelle. Good morning, everyone, and thank you for joining us today for Fuel Tech's 2017 Third Quarter Financial Results Conference Call. Yesterday after the close, we issued a copy of the results, which is available at the company's website, www.ftek.com.

The speakers on today's call will be Vince Arnone, Chairman, President and Chief Executive Officer; and Jim Pach, the company's acting Principal Financial Officer and Controller -- Financial Officer, pardon me, and Controller. After the prepared remarks, we will open the call for questions from our analysts and investors.

Before turning things over to Vince, I'd like to remind everyone, that matters discussed on this call, except for historical information are 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 company's 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, those discussed in Fuel Tech's Annual Report on Form 10-K in Item 1A under the caption of 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 forward-looking statement 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 the company's filings with the SEC.

With that said, I'd now like to turn the call over to Vince Arnone, Chairman, President and CEO of Fuel Tech. Vince, please go ahead.

Thank you, Devin. Good morning, and thank you, everyone, for joining us on the call today. Before we begin, I would like to acknowledge, Jim Pach, our Controller, who was appointed last week to be Fuel Tech's acting Treasurer and Principal Financial Officer. Our Chief Financial Officer, Dave Collins, remains on a leave of absence for health reasons. Jim has been a vital and engaged member of Fuel Tech's finance and accounting team for almost 2 years now and I have every confidence that Jim will be successful as he transitions into his new role. Thank you, Jim.

Now let's review our results for the third quarter. Revenues rose almost 8% to $13.5 million. SG&A declined for the third consecutive quarter of 2017 and has decreased by $3.7 million or 18.6% for the first 9 months of the year. We approached breakeven operating performance, with an operating loss of just $134,000. We reported positive adjusted EBITDA for the first time since the fourth quarter of 2015. We have announced $29 million of new orders thus far in 2017, and we expect to announce between $8 million and $12 million in additional contracts before the end of this year. 2017 has been one of the more successful booking periods in the company's recent history.

Our backlog at September 30, rose to $23.4 million, a $15.4 million increase from the backlog of $8 million at December 31, 2016. Our results for the third quarter reflects the favorable impact of the two-year program of organizational restructuring and cost reductions, that we commenced early in 2016, and I'm very pleased with our progress thus far. Based on our results through the first 9 months of the year, we are confident that we will achieve our previously announced guidance for the second half of 2017.

To summarize, we expect the following: revenues to rise 50% from the $18.2 million reported in the first half of the year; SG&A will range between $10 million and $11 million as compared to $11.1 million in the first half of 2017; our operating performance will show significant improvement, when compared to an operating loss of $7.4 million in the first half of 2017; to achieve positive adjusted EBITDA as compared to an adjusted EBITDA loss of $4.1 million in the first half of 2017; and finally, cash balances will remain stable to slightly higher from the $12.6 million reported at June 30, 2017.

The higher revenues in Q3 2017 reflected the timing of project execution and the conversion of new orders announced during the first half of 2017. On a sequential basis, revenues have risen in each quarter of this year from $8.5 million in Q1 to $9.7 million in Q2 and to $13.5 million in the most recent quarter. I also want to point out that the third quarter of 2017 is the first 3-month reporting period to show a year-over-year quarterly revenue increase since the first quarter of 2016.

SG&A in the third quarter of 2017 declined by 14.1% to $5 million from $5.8 million in the third quarter of 2016. This improvement continues to reflect the impact of our previously announced cost-reduction initiatives. The operating loss in the third quarter of 2017 was $134,000 as compared to an operating loss of $2.3 million in last year's third quarter. And our net loss for the quarter was $417,000 or $0.02 per share as compared to a net loss of $3 million or $0.13 per share in last year's third quarter. Our balance sheet remains quite strong. At September 30, cash and cash equivalents were $12.2 million or $0.51 per share and included restricted cash of $6 million. The moderate decline in cash from June 30, 2017 was due primarily to the timing of collections of accounts receivable, as evidenced by the $2.5 million increase since December 31, 2016. Shareholders' equity was $35.3 million or $1.48 per share and the company had 0 long-term debt.

Now let's go ahead and review our business segment performance in more detail. In the Air Pollution Control segment, domestically, we continue to pursue opportunities focused on ULTRA and SCRs for industrial applications, and we expect incremental orders for these applications before the end of 2017. SNCR technology remains applicable for units requiring compliance with the latest round of Casper, Regional Haze and states' specific requirements for Reasonably Available Control Technology, also known as RACT. ESP upgrades are being driven by maintenance requirements and increased particulate loading from dry absorbing injection systems installed to help units meet MATS and Boiler MACT's requirements. While we do not expect significant impact from regulatory drivers for the remainder of this year, I would like to comment on a couple of items that will likely impact our future.

First, earlier this month, EPA issued area designations for the 2015 Ozone National Ambient Air Quality Standards, also known as NAAQS. NOx and VOC emissions are precursors to increases in ground-level ozone levels and the new standard of 70 parts per billion, down from the 2008 level of 75 parts per billion, is expected to impact utility and industrial sources. EPA had intended to delay designations of counties across the country until 2018, but already has provided designations for those counties that are expected to be in compliance. EPA will now work to issue the designations for the remaining counties across the U.S. in the next several months. This will require states and sources to work on compliance strategies starting in 2018. It is important to note that there are a number of states, who are not in compliance with the 2008 Ozone NAAQS and those areas may require additional NOx reduction.

On the Clean Power Plan, the Supreme Court of the United States stayed this regulation in February 2016, the D.C. Circuit Court heard arguments in September 2016 and was expected to rule this spring. However, the administration issued an Executive Order in March to repeal the Clean Power Plan and to send it to the EPA for review. 49 gigawatts of coal-fired generation was projected to retire based on the original Clean Power Plan. If the Clean Power Plan is not reestablished or comes back in a different form, many marginal coal units could avoid retirement. However, the pressure on coal units based on low natural gas prices is still expected to limit the recovery of coal unit capacity factors.

In June, the D.C. Circuit Court rejected a proposed stay by EPA of the rules for methane capture for oil and gas operations. Earlier this month, EPA proposed a 2-year delay in order to evaluate the cost and benefits of the new source performance standards for methane from oil and gas sources. At a high-level, these examples reveal that while there is still regulatory uncertainty in the near term, there have been some improvements over the past several months. We are pleased with the project bidding activity and contract awards over the past few months and industrial project activity domestically is encouraging. We will continue to capitalize on the increasing deployment of new natural gas-fired turbines being used where SCR technology is required as best available control technology, which creates opportunities for our SCR and ULTRA technologies in the industrial segment. We are also establishing strategic business relationships with multinational industrial end users and partnering with companies that require our technology portfolio to complete a broad bid package.

Now, in China, we have generated almost $7 million in new contract awards thus far in 2017, which is an improvement in activity when compared to 2016. Regarding the market in China, a decrease in power demand resulting from a slowdown in economic growth, is reducing the number of new build units and existing power plant utilization is less than 50% in some areas as a result. China established super low emissions targets for utilities last year, and most plants are currently in the process of implementing or planning to implement technologies to meet these targets by 2020.

For Fuel Tech, this presents an opportunity to couple our SNCR systems with existing SCR systems to meet these more ambitious reduction standards. Based on our current analysis, SNCR implementation on utility boilers will continue for at least the next 2 years. And while the market is competitive, we believe that we will win our share of the work. With compliance for utility units gradually coming to an end over this next couple-year time frame, we are closely watching 2 other developments in the China market that could provide opportunity for Fuel Tech.

First, we are following the timing of the emissions compliance for the industrial sector, which includes municipal solid waste, process industries and the petrochemical industry; and secondly, we are watching a trend towards the elimination of aqueous ammonia as the reagent for use with SCR system applications to reduce NOx. Currently, we estimate that approximately 80% of the 2,000-plus power generation units that have SCR installations for NOx reduction, use aqueous ammonia as the reagents for the SCR, as opposed to using a safe urea-to-ammonia conversion technology like our ULTRA process to avoid the hazardous transport and storage of ammonia on site. We currently have an installed base of greater than 225 ULTRA systems in China and if the elimination of the storage and transport of aqueous ammonia becomes accepted practice or a regulated requirement, we would expect to benefit from this market change.

In Europe, the European Union's Industrial Emissions Directive continues to drive compliance behavior, although BREFs, which is known as the best available reference technology guidelines, were issued in August of this year with a compliance timeline through 2020. These guidelines further reduced target NOx emissions from current levels and they also include the regulation of mercury for the first time. As a result, plants in EU countries with heavy reliance on coal-fired generation such as Poland and Czech Republic, will need to upgrade their current de-NOx systems. Neighboring countries in the Balkans and Turkey are also planning to follow the BREF guidelines.

Thus far in 2017, our European office has been awarded almost $6 million in contracts, covering our SCR and ULTRA technologies and also utilizing our expertise in ammonia reagent delivery systems. Additionally, through the use of strategic partners with local presence and project execution capability, we also continue to strengthen business ties with local entities in Turkey, Poland and the Czech Republic, to take advantage of project opportunities when they arise in these geographies.

We continue to pursue opportunities associated with our various licensing agreements. In India, we remain optimistic about the long-term prospects of our exclusive licensing agreement for our SNCR technology with ISGEC Heavy Engineering Ltd., one of India's leading engineering and construction companies, although required emissions compliance time frames are being delayed. The Indian government has backed off of the aggressive compliance targets originally set for the power generation industry due to the high cost of compliance. They are now operating under a phased approach, prioritizing particulate matter first, then SOx, and finally NOx control. We will push to demonstrate our low-cost -- I should say, our low capital cost through gas conditioning solution as a means to address particulate issues, as we believe that many units will seek to avoid costly electrostatic precipitator rebuilds to meet compliance targets. Also, we are closely watching the development of demand for urea to ammonia conversion systems, like our ULTRA system, in this market.

Now for our FUEL CHEM business segment. Revenues declined by $1.8 million in the third quarter and we reported gross margins of 51%. We continue to expect that revenue and gross margin for the second half of 2017, will approximate the revenue and gross margin reported for the first half of this year. Despite the modest signs of renewed life in the coal industry, demand for our products in our traditional power and industrial end markets, continues to decline due to lower energy prices and fuel switching from coal to less expensive natural gas.

In response, we continue to pursue a variety of avenues that leverage our FUEL CHEM technology solutions. In the U.S., we continue to introduce this technology to utilities to assist them in adapting to their new operating paradigm, marked by reduced low profiles that affect the manner in which boilers operate. We're also continuing to support operators that utilize coal blending as a cost reduction strategy. As in many cases, blending can cause unwanted slagging and fouling in the boiler and our program can assist in these cases.

Further, we are seeing opportunities for biomass-fired units in the industrial sector and we are currently applying our technology successfully on one application.

In Europe, we are offering FUEL CHEM to the operators of biomass-fired units and municipal solid waste units, both of which are known to have severe and costly slagging and fouling issues. We are currently providing our program a 1 biomass-fired unit and 1 municipal solid waste unit at this time, both in Italy, and the results from both clients are favorable. We are watching the results of these 2 accounts closely, and we look to use -- the favorable references to expand our application base.

On a worldwide basis, we have expanded our industrial reach into the pulp and paper industry, where FUEL CHEM, more specifically, our proprietary RECOVERY CHEM technology, can address the issue of slagging and fouling and black liquor recovery boilers. In the third quarter of 2016, we announced the signing of an exclusive agreement under which Fuel Tech has licensed its proprietary RECOVERY CHEM technology to Amazon Papyrus Chemicals group, a leading supplier of specialty chemicals to the pulp and paper industry in Asia. Amazon currently manufactures and sells a variety of industry-specific chemicals to greater than 350 pulp and paper units on that continent. We have solidified our source of chemical supply in the region and identified several target candidates for a demonstration. We currently have an agreement with one of these target customers to commence a demonstration in January and we look to utilize a successful technology demonstration as a springboard towards accelerating business activity thereafter.

With 2017 coming to a close, I am pleased with the steps that we have taken as a company to strengthen our financial position, but we also realize that we still have a long road ahead of us to return to the financial successes of our past. Growth and improved profitability remain our goals. As we prepare for 2018, we remain focused on capitalizing on all relevant opportunities for our base businesses and on expanding our product portfolio into growth markets. As mentioned on prior calls, we know that our base business cannot sustain Fuel Tech for the long term. And as a result, we have been aggressively targeting growth markets, like water treatment and renewables for product line expansion. I am very much looking forward to speaking about these efforts in more detail in the near future.

In closing, I want to thank the entire Fuel Tech team for their patience and their belief in our ability to stabilize our company and to position it once again for growth. Additionally, I want to thank our shareholder base for their continued interest in our company. We are expecting to end the year strong and we look forward to 2018 with a renewed confidence.

I'll now turn the conversation over to Jim for his financial comments. Thanks, Jim.

Thanks, Vince, and good morning, everyone. Revenues for the third quarter of 2017 totaled $13.5 million, reflecting a $2.8 million revenue increase for APC, offset by a $1.8 million revenue decline at FUEL CHEM. As Vince noted, revenues have risen on a sequential basis from the first quarter of 2017 and we expect backlog to revenue conversion to continue to accelerate in the current fourth quarter as a result of the $29 million of new APC orders announced to date.

Our FUEL CHEM revenue for the third quarter of 2017 declined to $4.7 million from the $6.6 million in the prior year. However, revenues rose by about $550,000 from the second quarter of 2017. This segment continues to be affected by the soft electric demand market and low natural gas prices, which leads to fuel switching, unscheduled outages and combustion units operating at less than capacity. Our gross margin percentage was 37.3% for the third quarter of 2017, down from 42.2% in last year's third quarter. The difference is primarily due to the revenue mix between APC and FUEL CHEM quarter-over-quarter.

APC gross margin was $2.6 million or 29.7% as compared to $1.8 million or 29.9% in Q3 2016. FUEL CHEM segment gross margin was 51.3% as compared to 53.5% for the same period last year. We continue to expect to report a blended gross margin between 35% and 40% in 2017. There were no charges or unusual items this quarter, whereas the third quarter of 2016 included restructuring charges of $1.1 million. For the third quarter of 2017, our selling, general and administrative expenses declined to just under $5 million from $5.8 million in the comparative prior year quarter. We remain on plan to remove more than $19 million of costs over the last 3 years by the end of 2017.

Our research and development costs for the third quarter totaled $216,000, down slightly from the $672,000 in the last year's third quarter. This decline was related to organizational workforce actions taken in both 2017 and 2016. As Vince mentioned, we are continuing to support new product developments, including water treatment applications, and exploring ways to diversify our products and markets through our R&D efforts. To that end, we expect R&D spending in 2018 will increase slightly from our 2017 spending levels as a result of these initiatives.

Our operating loss for the 3 months ended September 30, 2017, improved to $134,000 from the $2.2 million loss in the same period of the prior year. This operating improvement for the quarter is due to the impact of the 2-year-long organizational restructuring program that commenced in 2016. Net cash used in operations was $283,000 for Q3 2017 in comparison to $5.3 million of cash used for the 6 months ended June 30, 2017. The overall reduction in our cash used in operations is a result of the suspension of the Fuel Conversion business announced during Q2 as well as overall reductions in headcount and other cost-containment measures, as previously mentioned.

Adjusted EBITDA for the 3 months ended September 30, 2017 was slightly positive, which was our first positive EBITDA quarter since Q4 2015. Our balance sheet at September 30, 2017 remains debt-free and we have cash and cash equivalents, including restricted cash of $6 million totaling $12.2 million in comparison to the $12.6 million as of June 30, 2017. As Vince mentioned, this was primarily timing with respect to cash collections on accounts receivable at quarter end.

Our working capital balance at September 30 was $17.9 million, which will continue to support our ongoing operating needs of the business. Working capital does not include $5 million of restricted cash that was reclassified on the balance sheet to long term during the second quarter as a result of our 2-year renewal of our cash secured U.S. domestic credit facility. The company remains hopeful, through continued improved operating performance on a consistent basis, that we may be able to renegotiate our domestic credit facility to remove the cash securitization restriction on our operating cash availability.

With respect to valuation, our book value per share was $1.48, our tangible book value per share was $1.94 and our working capital per share was $0.75 at September 30, 2017. In addition, we have $0.69 per share in deferred tax assets, which have been fully reserved and are not included in any of the per share amounts quoted above.

With that, I would like to turn the call back over to Vince.

Okay. Thank you, Jim. Operator, let's go ahead and open the call for questions.

(Operator Instructions) Our first question comes from the line of Peter Enderlin with MAZ Partners.

First question. As you mentioned, there was an increase of about $2.5 million in accounts receivable. Did that indicate any sort of slowness on the part of some particular payers?

Actually, Pete, it definitely does not. It actually reflects what I would call timing on project execution and, call it, invoicing on similar of new project bookings that we have brought on board in this first 9 months of the year. There is no indication that the increase is due to any timeliness and in customer payment, whatsoever.

And you mentioned backlog conversion, which is a good thing, but then that also obviously means you have a need for ongoing new orders. Are there some potential large new orders that are up for a decision at this point?

As I noted in my commentary, we -- before the end of this year, we are expecting, given a range of $8 million to $12 million in new contract orders. That is currently our expectation, as we look at it today and that's pretty much all I can say about that at this point in time, Pete. Sometimes it takes longer for, call it, the order process to actually convert into actual hard contracts. Seems to be more and more so in our business environment these days, but we feel pretty good about the $8 million to $12 million range between now and the end of the year.

I was sort of trying to get a sense of how lumpy that is. In other words, is it a number of smaller contracts or are there a couple of big ones in there that are sort of critical decision points?

I'd say a combination of both.

Okay. Do FUEL CHEM customers have kind of a rule of thumb about what natural-gas prices allow them to justify using your technology?

Typically with FUEL CHEM, it ends up being related to, just call it, the dispatch level of that coal-fired unit. If the unit -- if there's a customer that has a need for our program, because they're burning a fuel that causes them difficulty as part of the combustion process, usually that, call it, that problem in that boiler occurs when they're actually pushing that boiler to higher capacity levels, right? So what we've seen in the marketplace is, yes, we do have a handful of key accounts and because of where they're situated geographically or because of the fuel they burn or a combination thereof, they continue to use our program on a recurring basis. But then there are also those units because their capacity factor has dropped so low 50%, 40%, that they just don't generate the same issue with inside their boiler that necessitates the use of our program. So natural gas pricing is obviously an issue. That pricing is what is causing a lot of the dispatch to coal to be reduced dramatically and so that's the issue we're facing in the marketplace today. There is a trigger price point there, if you will, relative to dispatch, but unfortunately, I don't have that information readily available for you, Pete.

I'm sure, as you said, it varies by geographical area.

It does.

Is there any progress you can talk about on the coal conversion assets, monetization or the IP thereof?

Yes. We did not mention that in comments, but it is still in process. At the end of the third quarter, we still have the intangible asset and the, call it, the tangible asset, which is the CHEM still on our balance sheet at the end of Q3. And basically what that means is that we are still in the process of investigating the sale and/or licensing of those assets to third parties and that is in process as we sit here today. And we still remain hopeful that we're going to be -- going to be able to recover some of our investment in the development of that technology over this past 2.5 to 3 years, but as of right now, it's in process and there isn't anything more substantive that I can say about it right now.

Our next question comes from the line of George Gaspar, who's a private investor.

Sorry, I got knocked off the call and got back in, so I might be repeating some questions here. First of all, could you divide out your business U.S. versus international at this point in time? If you look at total year period or what you anticipate on the basis of this year, what the percentages would be for each of them?

Yes, George, if you can hold on that question for a second, we will get that here in a moment for you. Can you move on to your second question?

All right. And then in the past quarter, not this -- excuse me, the second quarter. The asset write-downs that took place, there is a noncash charge that was $3 million to $4 million, you can correct me to the specific number. Is there a possibility that there is -- some of those are salable and they could come back into your financial statement as a positive?

The primary asset that was written down was actually our corporate headquarters building and so that was a fair value adjustment that was required, basically driven by our share price versus the book value of our equity. At this point in time, we're not looking at making any modifications relative to our corporate headquarters and the building we reside in today. So I would consider that to be a one-time write-down as we sit here right now.

Yes, unfortunately, George, you can't write up an asset once you've written it down. So accounting rules will tell you, you couldn't do that. And then your second question was on the revenue mix as for the 9 months. U.S. revenues were $21.5 million so it's about 68% roughly of revenue, yes, and the form was about $10.2 million, so that's 32%.

George, historically, we've been in the 70-30 range, sometimes 75-25. That's been about the range that we've been in, in the recent past.

Okay, I see. And then a question on -- I don't recall you mentioning anything about South America, and I know you've done some business down there. How does that market look to you?

Right. I mean, we obviously -- we were fortunate to win some excellent work down in Chile over the course of this past several years, down in South America. The unfortunate part is that, we don't see the same level of business outlook prospectively that we had in the past. We do still have our foot in that marketplace, working with sales representatives and agents and the like, and we're watching for developments on a country-by-country basis and as opportunities arise, we'll go ahead and look to capitalize, but we really don't see what I would call a robust market opportunity coming from South America here in the near term, in any event.

Okay. And a question I have on your expansion possibilities or broadening your business and you mentioned water treatment. Could you -- is there any chance you could discuss that a little bit further? What application you might be looking at? Would it be just general water? Would it be zeroed in on a specific kind of water treatment?

I think really the only thing that I can say at this point in time, George, is that we're looking at licensing technology and the technology we believe could have applications across different market segments, if you will, across different industries. And as a variety of markets and industries look to process water to achieve their own objectives. And so I have to keep it broad for right now, George, but, again, this is something we're working on diligently and, again, I'm very hopeful in the very near-term, we're going to be able to talk about it a little bit more publicly with everybody.

Just one comment on that, that's my background, in oil and gas. This area is really needing a lot of application and in international, there is an amazing opportunity developing in the Russian market on the oil side, where water treatment is becoming a very considerable situation. And of course, we face that down in the Southwestern part of the United States also, so it's very interesting to see your thoughts ongoing in that direction. I hope that works out. And just an overview comment, you really have -- you're getting this thing turned around very well, and we're all hopeful, obviously, that you can continue to push ahead into 2018 and really rebuild this company.

Our next question is a follow-up from Peter Enderlin with MAZ Partners.

Just one more and that is, Vince, do you have sort of a sense of what the sustainable gross margin on the APC business can be going out longer term?

Pete, actually it varies by product line mix and it also varies by geography. So at any point in time, it really depends on where the bulk of our revenue recognition is going to be coming from. High level, as we roll into 2018, some of the more recent projects that we've booked domestically are a little bit of a higher gross margin profile than maybe we've had in the recent past, so I'm pleased with that. But on the opposite side of that, we have been seeing, on a year-over-year basis, some increasing pressures in the Asia market. In China, just relative to more copycat types of companies looking to provide what I would call similar technology solutions in the marketplace, but also at significantly lower pricing in nature. So we have seen a little bit of a depression in some of the margins that we've been realizing now in Asia. So, Pete, it's a mix and as I said, at any given point in time, it really depends on where that revenue recognition is coming from and the mix of those technologies that we would sell as well. One other factor to keep in mind is on occasion, we will sell a project on a turnkey basis, which means that we don't only provide the equipment solution, call it the equipment and technology solution, but we also provide the -- a construction and installation as part of the job as well. In cases where we provide that full turnkey scope of work, our margins are going to be a little bit reduced as well.

And on the China situation, is that true in the ULTRA business there as well?

It is. Yes, there had been additional players that have come into the marketplace there with an ULTRA-like solution in, so we've seen some price pressure there too.

There are no further questions at this time. I would like to turn the call back over to Mr. Arnone for closing remarks.

Thank you very much, and as I mentioned previously, I'm very pleased that our company has been able to turn -- to return to a level of what I would call sustainability and -- stability financially on an overall basis. As I'd mentioned, we do have a long way to go to provide shareholder value to all of our shareholding base, and we are working diligently to attain that goal as well, but we've gone through a long path over this past 2.5 to 3 years and a lot of hard work and I'm pleased with where we are, but, believe me, there's more to come with Fuel Tech. Thanks, everyone, for your participation on the call today and have a good remainder of the day.

Thank you. This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation and have a wonderful day.