Q2 2013 Earnings Call Transcript

Transcript Call Date 08/08/2013

Operator: Good day, ladies and gentlemen, and welcome to the Q2 2013 Fuel Tech, Inc. Earnings Conference Call. My name is Emilie and I will be your operator for today. At this time, all participants are in listen-only mode. We will conduct a question-and-answer session towards the end of this conference. As a reminder, this conference call is being recorded for replay purposes.

Now, I'd like to turn the call over to Devin Sullivan, Senior Vice President, The Equity Group. Please proceed.

Devin Sullivan - SVP, The Equity Group Inc.: Thank you Emilie. Good morning and thank you for joining us for Fuel Tech's 2013 second quarter conference call. Yesterday after the close we issued our press release, the copy of which is available on our website at www.ftek.com.

Our speakers for today's call will be Doug Bailey, Chairman, President and Chief Executive Officer; and Dave Collins, Senior Vice President and Chief Financial Officer; also joining us today is (Bill Cahill), Fuel Tech's Corporate Controller.

Before turning things over to Dave, I'd like to remind everyone that matters discussed in this call, except for historical information, are forward-looking statements that are subject to certain risks and uncertainties that could cause actual results to differ materially from those set forth in our forward-looking statements. The factors that could cause results to differ materially are included in our filings with the SEC. The information contained in this call is accurate only as of the date discussed and investors should not assume that statements made in this call remain operative at a later date. Fuel Tech undertakes no obligation to update any information discussed in this call and as a reminder, this call is being broadcast over the Internet and can be accessed at our website www.ftek.com.

With that said, I'd now like to turn the call over to Dave Collins, Fuel Tech's Chief Financial Officer. Dave, please go ahead.

David S. Collins - SVP, Treasurer and CFO: Thank you Devin and good morning everyone. Thank you for participating in today's call. Consolidated revenues for our second quarter increased $8.2 million to $29.1 million, a year-over-year increase of 39%.

For the first six months of 2013, our consolidated revenues increased $5.5 million to $51.6 million, a year-over-year increase of 1%. Our bookings in the first half of this year coupled with our substantial year-end backlog that provided us good visibility for revenue growth in 2013.

While our domestic revenue was flat in the quarter and down $10.8 million for the first six months of 2013, our foreign revenues have grown significantly through our contract in Chile and our continued growth in China.

Our U.S. domestic business is expected to pick up in the second half of 2013 as we work through our 2013 domestic bookings of $22 million. Our foreign revenues in the current quarter increased $8.9 million or 302% to $11.8 million, and for the first six months of 2013, our foreign revenues have grown $16.3 million to $21.5 million, a year-over-year increase of 302%.

Consolidated gross margin for the second quarter was 41%, down from 43% in the prior year. For the first six months of 2013, our consolidated gross margin was 41%, down from 46% in the prior year.

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