Fuel Tech, Inc.

Greetings, and welcome to the FuelTech, Inc. 2026 First Quarter Financial Results Conference Call and Webcast. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce Devin Sullivan, Managing Director of the Equity Group. Devin.

Thank you, Jill. Good morning, everyone, and thank you for joining us today for FuelTech's 2026 First Quarter Financial Results Conference Call. Yesterday, after the close, we issued a press release, a copy of which is available at the company's website, www.ftek.com. Our speakers for today will be Vince Arnone, Chairman, President, and Chief Executive Officer, and Ellen Albrecht, the company's Chief Financial Officer. After 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 FuelTech'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. FuelTech 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 FuelTech and are subject to various risks, uncertainties, and other factors. including but not limited to those discussed in FuelTech'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 FuelTech's actual growth, results of operations, financial condition, cash flows, performance, business prospects, and opportunities to differ materially from those expressed in or implied by these statements. FuelTech undertakes no obligation to update such factors or to publicly announce the results of any forward-looking statements contained herein to reflect future events, development, and circumstances or for any other reasons. 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. Vince, please go ahead.

Thank you, Devin. Good morning, and I'd like to thank everyone for joining us on the call today. Our first quarter results, although strong, fell slightly short of last year's Q1 results, with improved performance in our air pollution control business segment being offset by a decline in revenues for our fuel chem business segment. We continue to validate the efficacy and client return on investment for our dissolved gas infusion demonstrations and we maintained a strong financial position with cash, cash equivalents, and investments of nearly $31 million at quarter end and no long-term debt. Most importantly, our outlook for the year has changed significantly and for the better. The expanded opportunity landscape that we have been tracking for our APC business segment resulted in the largest set of awards in terms of contract value that we have received in recent history. Last week, we announced multiple air pollution control contracts valued at approximately $10 million with utility and industrial customers. The new awards were anchored by a contract for the integration of our selective catalytic reduction pollution control technology with two new natural gas fire turbines for a large publicly owned Midwest municipal utility. The installation of these new GE Vernova turbines will increase the plant's output by approximately 100 megawatts. The expansion and the generating station is expected to become operational in 2029. We are scheduled to commence engineering work this quarter with equipment deliveries scheduled to begin in the fourth quarter of 2027. The utility is undertaking this expansion to meet the region's rapidly growing electricity demand. We believe that this project reflects a growing focus on municipalities and states working together to plan infrastructure upgrades in response to and in anticipation of population expansion and commercial and data center growth. A strong, reliable power grid is one of the largest factors in determining where data centers are developed, and operators need abundant capacity reliability, and a path to fast interconnection, as well as emissions control solutions that address compliance, reporting, and air permitting requirements that reduce carbon footprints and meet sustainability goals. These contracts have more than doubled our pro forma APC backlog to approximately $17 million at this date, which is the largest backlog that we have had since 2018. With respect to the larger data center opportunity, our sales pipeline for these opportunities remains strong and approximates $75 to $100 million for projects integrating our SCR technology with power generation sources. Please note that the value of the pollution control scope of supply represents a very small fraction of the estimated total AI infrastructure spend. I want to again emphasize that in all instances, We are a subcontractor to the data center integrator or to the turbine or engine OEM. Our role remains the support and education of our direct customer regarding the design and delivery of a pollution control system that can best benefit the application. Beyond that, our knowledge regarding funding, approval, and timing is generally limited. As I noted on our year-end conference call in March, data center awards are likely to be the primary source of material near-term growth for our company. Our optimism remains high. As such, we have been and continue to devote substantial internal and external resources to position FuelTech with data center developers and turbine and engine providers to deliver NOx reduction technologies as part of a data center's power generation platform. At present, we are in various stages of participation and project opportunities for 8 to 10 different data center projects in conjunction with integrators and turbine and engine OEMs, including some of the largest companies in the industry. All of these inquiries are for pollution control systems, primarily SCR, in support of the development of on-site power generation. The size of these projects ranges from as few as two to five units to as many as 30 to 40 NOx reduction units, with pricing predominantly in the range of $1 million to $3 million per unit. Regarding timing, on our last call, I had mentioned that there were two opportunities that could come to fruition in the second quarter. One of them did not continue to develop, and the timing of the second one has been delayed. That said, there is a possibility that one of our eight to 10 inquiries can convert to a commercial award based on our conversations with the various parties involved before the end of Q2. However, the remainder of the inquiries will develop further as we move throughout the year. We believe that we are still very much in the running to capture our share of these opportunities, and we remain optimistic about our prospects for 2026. As one last comment, I did want to note that we did not consider the large contract that we were awarded for the Midwest utility to be a data center-specific application, as the two new units will be deployed in front of the meter as part of the municipality's generating infrastructure. However, this award is material and significant for FuelTech, as the SCR pollution control system that we are providing is for a model of GE renova turbine that is commonly being deployed for data center-specific opportunities. This win lends credibility to our company as we move to capture a portion of the larger market opportunity. Regarding our near-term APC sales pipeline, exclusive of data center opportunities, we are currently tracking $8 to $10 million in additional potential awards, of which we expect to close on at least 3 to 5 million of these awards before the end of the current second quarter or early in the third. Included in this near-term pipeline are opportunities emanating from our recent acquisition of the technology portfolio of Walco Inc., a well-established environmental equipment and services company with several hundred project installations worldwide. The pace and scope of inquiries from Walco customers remains encouraging. Now, let's discuss our fuel chem business segment. Following a strong 2025, our fuel chem segment produced another solid quarter of revenue. Across the country, the operating lives of coal-fired units are being extended to meet rising energy demand with many facilities dispatched at levels not seen in several years. Our fuel chem segment continues to benefit from this trend, particularly across our legacy units. On our last conference call, I noted that we received benefit in the fourth quarter of 2025 from a new U.S. customer that is currently operating with us under a six-month commercially priced demonstration program that commenced in early November. As we have discussed previously, the annual revenue potential from this commercial opportunity, should it convert from a demonstration, is expected to be approximately $2.5 to $3 million based on the customer running the program full-time and with the revenue expected to generate historic fuel chem gross margins. During the first quarter of this year, the demonstration experienced a temporary interruption driven by unrelated plant operations, which limited its contribution to revenue. As of today, the customer has not yet completed the demonstration program. However, they have noted a material reduction in downtime and maintenance costs largely attributed to decreased offline cleaning which bodes well for a successful demonstration. These results continue to support a positive outlook for the demonstration, and we remain optimistic that this account will convert to a commercial program later in the year. On the regulatory front, we have seen that the current administration is currently pursuing both the rollback of specific regulations that had been put in place previously, and the implementation of new regulations that are less restrictive than those currently in place. These proposed rollbacks do not loosen the nitrogen oxide emissions requirements for any sources and could potentially extend the life of some coal and natural gas fired units that may not have to reduce their emissions profile. We will take the opportunity, where applicable, to offer retrofits and maintenance solutions to accommodate the extension of useful life. Regarding the implementation of new rules, earlier this year, we reported that EPA had issued new source performance standards, also called NSPS, for new gas turbines, which were published in the Federal Register on January 15th of this year. A new category of gas turbines was created called temporary power turbines and is applicable to units below 85 megawatts and installed to run for 24 months or less. These units will be required to achieve NOx levels of 25 ppm, which may not require SCR for all turbines. Turbines greater than 5 megawatts with operating capacity will need to meet 15 ppm NOx likely requiring SCR. And finally, turbines greater than 85 megawatts will need to get to 5 ppm NOx, which will require SCR in almost all cases. With this rule in place, power generation developers will need to decide how best to proceed with their pollution control solutions for their new sources of power generation. Based on the discussions that we have had with our potential customer base, We are not aware of this new regulation having a significant negative impact on decision-making regarding the implementation of pollution controls. It is important to note that state-specific permitting requirements can vary from the new federal regulation. It is also important to note that outside of the NSPS requirements, the use of multiple small gas turbines working together could classify them as a major source for NOx emissions control. Major sources are governed by other regulations and are often required to meet more stringent NOx emissions, which would require STR. DGI continued its extended technology demo at a Western U.S. fish hatchery, which is on track to end this quarter and has been delivering strong performance with optimized oxygen delivery, program cost savings, and improved fish growth. A second trial at a Southeast U.S. wastewater facility is on schedule to end its extended six-month rental phase in the third quarter. With this trial, the client reports that odor-related complaints in the area surrounding the plant have been dramatically reduced, and we are working with the customer to assist them in assessing their oxygen delivery needs. In both instances, we are discussing the post-demonstration next steps with the client's and remain hopeful that DGI will become a commercial solution for them. We are also currently in discussions with multiple other end markets of interest for DGI, including pulp and paper, food and beverage, chemical petrochemical, and horticulture. As I noted earlier, we are optimistic about our outlook for 2026. Driven by an expanded project backlog and opportunity landscape at APC, anticipated strong results at FuelChem and our first commercial DGI contract. Taking all of this into account, we expect that revenues for 2026 will exceed the level of 2025, with FuelChem approximating 2025 revenues and APC exceeding 2025 performance. I want to emphasize that while our backlog has risen substantially, The majority of the revenue assigned to the new large APC contract award that I discussed earlier will be generated in 2027. Further, this 2026 APC outlook excludes the benefit of specific data center awards, which would be additive to this forecast. Before turning things over to Ellen, I want to thank the entire FuelTech team for their continued dedication in advancing our strategic objectives and our shareholders for their patience and support. We are very excited about what the future holds for our company. Now, I'd like to turn the call over to Ellen for her comments on our financial results. Ellen, please go ahead.