Good day ladies and gentlemen and welcome to the Q1 2014 Fuel Tech Incorporated Earnings conference call. My name is Steve and I’ll be your operator for today. At this time, all participants are in a listen-only mode. We will conduct a Q&A session towards the end of this conference. If at any time during the call you require assistance, please press star, zero and an operator will be happy to assist you. As a reminder, this call is being recorded for replay purposes. Now I would like to turn the call over to Mr. Devin Sullivan, Senior Vice President of The Equity Group. Please proceed, sir.

Thank you, Steve. Good morning everyone. Thank you for joining us for Fuel Tech’s 2014 First Quarter conference call. Yesterday after the close, we issued a copy of our press release, a copy of which is available 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 on the call is Bill Cahill, Fuel Tech’s Corporate Controller. Before turning things over to Doug and Dave, I’d like to remind everyone that matters discussed during 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 Fuel Tech’s filings with the Securities and Exchange Commission. The information contained in this call is accurate only as of the date discussed and investors should not assume that statements made during 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, the call is being broadcast over the internet and can be accessed at the company’s website, www.ftek.com. With that said, we’ll now begin the call, and I’d like to turn things over to Doug Bailey, Fuel Tech’s Chairman and Chief Executive Officer. Please go ahead, Doug.

Good morning everyone and thank you all for joining us today. Before I turn things over to Dave, I wish to spend just a few minutes discussing some significant and very likely impactful developments at Fuel Tech that occurred over the last few weeks. On the regulatory front, on April 29, 2014, just two weeks ago, the United States Supreme Court upheld the EPA’s cross-state air pollution rule, or CSAPR, which mandates that so-called upwind states reduce emissions from coal-fired power plants of sulfur dioxide and nitrogen oxide. By way of background, following the introduction of CSAPR on July 6, 2011, Fuel Tech experienced a surge in domestic orders for our SNCR technology as utility and industrial clients rushed to comply with the lower emissions standards set to take effect on January 1, 2012. For the third and fourth quarters of 2011, we recorded approximately $41 million of APC orders driven by CSAPR. SNCR was and still is an ideal low capital solution for these plants, reducing NOX emissions by 40 to 60% with minimal installation downtime and low energy consumption; however, this rule was short-lived and was stayed on December 30, 2011 by the U.S. Court of Appeals for the District of Columbia Circuit Court, causing a prompt disappearance in pressure to comply. Eventually, CSAPR was vacated by this same court on August 21, 2012, thus solidifying a more than two-year regulatory hiatus. Since that time, our domestic APC business has operated under other existing regulations and state consent decrees. Although U.S. bookings continued, the pace of new domestic awards slowed and backlog declined as utilities delayed their purchases while awaiting the regulatory clarity that was ultimately delivered just two weeks ago. This dynamic was apparent in our first quarter results. The revival of CSAPR could prove to be…

Thank you, Doug, and good morning everyone. Thank you for participating in today’s call. We started off 2014 slower than we would have liked, but we expect the acquisition of PECO-FGC to contribute significantly to our results in 2014, and we are watching for EPA rule making after the Supreme Court ruling and will update everyone on our quarterly call as soon as we have clarity to this opportunity. Each of these opportunities have the ability to immediately contribute to our results of operations and we think the combination creates a compelling story for Fuel Tech. I will provide some overview comments later in my script regarding our outlook for 2014. Our first quarter revenue was $18.6 million, which represents a decrease of $3.8 million or 17% from the prior year. This decrease was reflected in both segments and was geographically focused on our U.S. domestic business. We will discuss in a minute the segment results for the quarter. Our loss for the first quarter of 2014 totaled $1.1 million or $0.05 per diluted compared with a break-even quarter in the prior year. Our working capital decreased slightly by $394,000 and totaled $48.2 million at March 31. Our cash balance remains strong at $24.9 billion or $1.10 per diluted share. Consolidated gross margin dollars for the first quarter totaled $7.9 million, down from $9.4 million in prior year. As a percentage of revenue, our gross margin was consistent in both years at 42%. Our selling, general and administrative expenses totaled $8.7 million for the first quarter of 2014. They were up slightly from prior year. This increase reflects higher quarterly costs for professional and consulting costs associated with our strategic planning and acquisition-related costs, offset by reduced employee costs. Our research and development for the first quarter of 2014 was…

As Dave alluded to, our results for the first quarter reflect the lingering narrative of more than 2.5 years of regulatory gridlock here in the United States associated with defining our nation’s pollution control policies coupled with the changing generation mix and lower overall electricity consumption. Domestically, these factors produce lower revenues, fall bookings, and a diminished backlog. In response, we continued to expand our global markets and achieve greater geographic diversity particularly within our regulatory driven APC portfolio. As demonstrated over the last several years, this approach has produced significant increases in our international revenues, primarily in China. In the first quarter of 2014, international revenues represented 51% of total revenues compared to 43% in the same quarter last year. While acknowledging our results for the first quarter were disappointing, we do not view them as an indicator of our performance for the year. In fact, the revival of CSAPR and the PECO-FGC acquisitions have made the future for our APC business significantly more promising. The solutions offered by PECO-FGC will also assist us in strengthening our already established presence in China where APC market conditions remain strong and Fuel Tech’s presence and revenues continue to increase. China plans to spend some $277 billion over the next five years preventing and controlling air pollution. Among its greater challenges is controlling PM2.5 fine particulates. Investment in China to control particulate emissions is expected to be somewhat larger than NOX controls. Pollution levels in China are hitting record highs, resulting in as many as half a million premature deaths each year according to the President and Chinese Medical Association. The Deputy Minister of Environmental Protection has observed that NOX emissions have only dropped by about 2% over the last three years. China is the world’s largest emitter of greenhouse gases and…

[Operator instructions] Your first question is from the line of Dan Mannes from Avondale Partners. Please go ahead. Dan Mannes – Avondale Partners: Hey, good morning guys. A couple quick follow-up questions. I appreciate the color on CSAPR. What I’m wondering here is when you look at how the U.S. market has evolved since CSAPR was stayed, and CSAPR was actually stayed at the implementation date. I guess I’m wondering as you talk to your clients, how much is still out there versus how many of the plants that might have looked like they’d be subject to CSAPR have subsequently been or are planned to be shutting down? I guess I’m just trying to figure out what the market opportunity is left under the rule.

Good question, Dan, and not easy to answer. Certainly I think the focus has to be on the upwind states, states like Texas, Missouri, Nebraska, Kansas, Louisiana. These were the ones that were over their emission budgets back in 2011. In some situations, they may be able to achieve these new limits with few or no additional controls. We haven’t had the opportunity to review each and every state budget and know the current emissions limits to know which sources within those states are specifically in need of further controls. In order to quantify an answer to your question, particularly since we’ve been on stay here for 2.5 years and the old compliance schedules are obviously out of date, one of the things we’ll need to know is what kind of compliance deadlines will be renewed. That can then determine which technologies might be employed and whether or not they can be implemented in those time frames. If they were very short timeframes, which I don’t necessarily expect, like we saw when CSAPR was first enacted, technologies like SNCR will be favored. I think also you have to put into this mix the plant retirement strategies, the fuel switching strategies to determine which sources will continue to operate requiring controls and how much of those will require our technologies. So we await further clarification to really be able to quantify that, Dan. Dan Mannes – Avondale Partners: Okay. Can I ask in an alternative fashion, given your marketing group and you talk to your clients, what so far has been the reaction from your clients? And I don’t know if you had a chance to listen to maybe any of the utilities who reported after CSAPR, but at least among the major coal utilities, the tone was fairly muted in terms of their view of the risk. I’m wondering if maybe you’re getting a different feel as you talk to their environmental guys.

Well with it being such a short timeframe since this announcement came out, I don’t particularly have a lot of color on this date, Dan, as to what the utilities are saying. I think probably—we think they probably view the need to deal with cross-state migration of pollution as a very real thing. I don’t think people expected that we would go on in the future with no regulation like CSAPR. It might have been redefined, but here we have it and I think it’s going to take certainly several months before the actual implementation plan is more clear. I do not expect the announcement to make an immediate effect on us like it did in July 2011 over the course of two months where we saw a surge in orders, but I do expect it to be a favorable driver with winds at our back to grow our APC business domestically. Dan Mannes – Avondale Partners: Okay, and then if I could just switch gears real quick and just ask about PECO-FGC, can you just spend a few minutes talking about what their scope of work is typically on an ESP upgrade, what do they bring to the table in terms of proprietary, and then how would they participate in China because I don’t believe they’re there now, and how would you be able to port their capabilities here, there? So kind of a three-part question on PECO-FGC.

You’re correct that they don’t participate in China right now, Dan, and that was one of the drivers of the business combination. It was also an orderly plan for the principal owners of PECO to enter retirement and logically put the organization with a company he knew well and we already had a good cultural fit. They have proven experience. They are not a patent protected type of technology, but they have well established, proven proprietary designs, methods that have consistently met or exceeded their performance guarantees. They have a lot of experience in optimizing ESP operations, a lot of stuff around refill work, and the market for refills is where a lot of the opportunities lie. They have knowledge in rebuild sequencing, being able to remove existing components, design and install new hardware controls, and to get overall ESP performance improvements. They also have significant modeling capabilities akin to the category of expertise that Fuel Tech uses every day in our NOX control work, so the ability to model, predict, improve ESP performance is one of their strengths. We expect to be able to increase their revenues substantially. Part of that is because the market itself is larger than they’ve been able to penetrate. Some of that has been principally limited by their small size, being unable to necessarily bond larger projects in which the performance guarantees require such commitments. It’s something that Fuel Tech is quite able to do, so for example we’ve already bid on a couple of large projects that are of the scope and size in excess of their annual revenues to date and are waiting a determination of who will win those projects. As far as the U.S. market, Dan, we see that market size over the next several years to be in the…

And again, we’ve worked with these people for quite a number of years. The fit is still good. When I walked into that office for the first time, it just felt like I was in a Fuel Tech office – the way they do their business and their engineering is just so akin to what we do that it’s a nice marriage. So we have to grow—we hope to grow it substantially. Dan Mannes – Avondale Partners: Sounds good. Thanks Doug.

Your next question is from the line of Steven Charest from Divine Capital Markets. Please go ahead. Steven Charest – Divine Capital Markets: Hey gentlemen, how are you today?

We’re fine, thank you. Steven Charest – Divine Capital Markets: Excellent. Quick question on kind of the run rate of RFP, RFQ activity. We haven’t heard too much in that space with the expected Supreme Court gaming. Any color on that?

Good question. We’ve actually been incredibly busy in our proposals and sales groups, working on—and I’ve always said it, often these are lumpier, larger projects with the deadline for compliance still out there in time, so we haven’t had the pressure of regulatory driver in all cases to see a broad market of numerous commitments. We have met opportunities because there are consent decrees with certain operators with deadlines associated with that, and you’ve seen our ability to maintain a domestic business in light of no regulatory driver such as CSAPR being in place. That’s still going to be the case, so if you ask a salesperson, are you busy, they’ll say we’re extremely busy. But the win rate is a little less frequent and the opportunity for those wins can be a little larger. I think that will remain true but accelerate in the particulate control market where we’re seeing quotations in the $10 million to $20 million range for (indiscernible) work. So I think lumpy is still an appropriate adjective to describe the market. The pipeline is out there and we’re hopeful that clarity on CSAPR will solidify the customer base to make their commitments and put the dollars in their capital budgets to enable us to carry out those programs. We’ll turn it back to the operator for the next question, please.

There are no further questions at the moment, but if there are any questions from analysts and institutional investors, please press star, one. There are no further questions. I would now like to send the call back over to Doug Bailey for closing remarks.

Thank you, Operator. Well, we do continue to be optimistic that Fuel Tech is well positioned to expand its presence as a leader in the global pollution control market. The year 2014 may very well be a breakpoint year in our history, and I’m excited to continue working towards our long-term objectives. As always, I wish to thank Fuel Tech’s team of professionals around the world for their dedication, resourcefulness and support, and we thank our shareholders. To you on the call, thank you for your participation and your continued interest in Fuel Tech. Thanks very much. Bye everybody.

That concludes your conference call for today. Have a great day. Thank you.