"We operated profitably in the third quarter, expanded customer relationships for our Air Pollution Control (APC) and FUEL CHEM® business segments, and increased our APC backlog by more than 20% from June 30, 2025," said Vincent J. Arnone, President and CEO. "We ended the third quarter in a very strong financial position with $33.8 million in cash and investments and no debt. Subsequent to quarter end, we expanded our APC solutions portfolio via a small strategic acquisition of complementary APC intellectual property from Wahlco, Inc., a leading environmental equipment and services company that has completed several hundred project installations worldwide over the past three decades."
Business Segment Performance
Mr. Arnone continued, "We generated improved quarter-over-quarter performance in our FUEL CHEM® business segment during the third quarter of 2025. In October, we installed equipment at a coal-fired unit for a new FUEL CHEM customer in the U.S. for a commercially-priced demonstration program that recently commenced, and is expected to run for six months. The annual revenue potential from this commercial contract is projected to be approximately $2.5 to $3.0 million based on the customer running the program full-time, with the revenue expected to generate historic FUEL CHEM gross margins. We continue to believe that FUEL CHEM's full year 2025 segment revenues will reach their highest levels since 2022."
"Revenues generated by our APC business declined quarter-over-quarter, due primarily to customer-driven delays and project timing. In August, we announced $3.2 million of new awards from new and existing customers in the U.S., Europe and Southeast Asia. This activity supported an increase in consolidated APC segment backlog at September 30, 2025 to $9.5 million, up from $7.8 million at June 30, 2025 and $6.2 million at December 31, 2024.
"We are continuing to pursue significant prospects offered by the rising demand for power generation in support of data centers and traditional public utility entities. We remain actively engaged with multiple bids outstanding for our SCR (Selective Catalytic Reduction) technology to address the emissions control requirements of those opportunities that will develop and be implemented in the U.S. over the next several years."
Mr. Arnone continued, "Regarding the growth and development of our Dissolved Gas Infusion (DGI®) technology, we had a very successful exhibition of DGI at the Water Environment Federation Technical Exhibition and Conference, or WEFTEC, in Chicago last month, and generated significant interest in the technology. We are continuing an extended demonstration of DGI at a fish hatchery in the Western U.S., which we expect will last until the second quarter of 2026. Our DGI system is currently performing well and is meeting customer expectations for the precise delivery of concentrated dissolved oxygen."
IP Acquisition
As referenced earlier, subsequent to the end of the third quarter Fuel Tech acquired all of the intellectual property assets and customer-related activities of Wahlco, Inc. for total cash consideration of $350,000.
"This acquisition represents a smart, cost-effective expansion of our IP portfolio by identifying high-value assets at a modest price. The acquired technology aligns with our long-term vision to address customer APC needs on a global basis."
The acquired portfolio of assets includes technology applicable to flue gas conditioning systems; ammonia handling equipment for all size applications associated with utilities, independent power producers, oil and gas refineries, pulp and paper mills, cement plants, and steel mills; and urea to ammonia conversion technologies for nitrogen oxide reduction. Also included as part of the portfolio are customer installation and aftermarket market data, which we believe will drive accretive aftermarket revenues.
Third Quarter 2025 ("Q3 2025") Consolidated Results OverviewAll comparisons are to the third quarter ended September 30, 2024 unless otherwise stated.
Consolidated revenues for Q3 2025 declined to $7.5 million from $7.9 million, mainly due to lower APC revenues resulting from the timing of project execution on current contracts, partially offset by higher FUEL CHEM revenues.
Consolidated gross margin for Q3 2025 expanded to 48.9% of revenues from 43.4% of revenues, reflecting higher APC and FUEL CHEM segment gross margins.
SG&A expenses of $3.2 million were consistent with the prior year period.
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 income in Q3 2025 was $303,000, or $0.01 per share, compared to net income of $80,000, or $0.00 per share.
Adjusted EBITDA was $228,000 in Q3 2025 compared to an Adjusted EBITDA loss of $(35,000).
APC segment revenue decreased to $2.7 million from $3.2 million, primarily related to timing of project execution on existing contracts. Segment gross margin expanded to 47.2% from 35.0%, primarily due to product and project mix.
FUEL CHEM segment revenue rose to $4.8 million from $4.6 million, primarily due to increased operation dispatch at legacy accounts, as well as sustained business from a new customer account added midyear in 2024. Segment gross margin expanded to 49.8% from 49.2% due to an increased volume of sales activity combined with relatively flat segment administrative expenses.
Financial Condition
At September 30, 2025, cash and cash equivalents were $13.7 million, short-term investments were $12.2 million, and long-term investments totaled $8.0 million. Stockholders' equity at September 30, 2025 was $41.0 million, or $1.31 per share, and the Company had no debt.
Conference Call
Management will host a conference call on Wednesday, November 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.
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 (NOx) 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, those 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(Unaudited)(in thousands, except share and per share data)
September 30,
December 31,
2025
2024
ASSETS
Current assets:
Cash and cash equivalents
$
13,677
$
8,510
Short-term investments
12,183
10,184
Accounts receivable, less current expected credit loss of $108 and $106, respectively
4,828
9,368
Inventories, net
402
397
Prepaid expenses and other current assets
864
1,160
Total current assets
31,954
29,619
Property and equipment, net of accumulated depreciation of $19,312 and $18,958, respectively
4,820
5,084
Goodwill
2,116
2,116
Other intangible assets, net of accumulated amortization of $552 and $525, respectively
306
327
Right-of-use operating lease assets, net
558
585
Long-term investments
7,969
10,875
Other assets
190
191
Total assets
$
47,913
$
48,797
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable
$
2,402
$
2,915
Accrued liabilities:
Operating lease liabilities - current
87
77
Employee compensation
748
1,248
Other accrued liabilities
2,674
1,615
Total current liabilities
5,911
5,855
Operating lease liabilities - non-current
514
548
Deferred income taxes, net
176
176
Other liabilities
303
263
Total liabilities
6,904
6,842
Stockholders' equity:
Common stock, $.01 par value, 40,000,000 shares authorized, 32,281,179 and 31,767,329 shares issued, and 31,074,438 and 30,708,273 shares outstanding, respectively
322
317
Additional paid-in capital
165,559
165,295
Accumulated deficit
(120,597
)
(119,472
)
Accumulated other comprehensive loss
(1,783
)
(1,915
)
Nil coupon perpetual loan notes
76
76
Treasury stock, at cost
(2,568
)
(2,346
)
Total stockholders' equity
41,009
41,955
Total liabilities and stockholders' equity
$
47,913
$
48,797
See notes to condensed consolidated financial statements.
FUEL TECH, INC.CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(Unaudited)(in thousands, except share and per share data)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2025
2024
2025
2024
Revenues
$
7,490
$
7,851
$
19,430
$
19,850
Costs and expenses:
Cost of sales
3,829
4,444
10,281
11,462
Selling, general and administrative
3,207
3,225
9,895
9,815
Research and development
450
361
1,510
1,159
7,486
8,030
21,686
22,436
Operating income (loss)
