Greetings. Welcome to the Fuel Tech Inc. Fourth Quarter and Full Year 2015 Financial Results Conference Call. At this time, all participants will be in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Devin Sullivan, Senior Vice President of The Equity Group. Please go ahead, sir.

Thank you, Kevin. Good morning everyone and thank you for joining us for Fuel Tech's 2015 fourth quarter and full year financial results conference call. Yesterday after the close, we issued a copy of the release and that is available on the company's website www.ftek.com. The speakers on today's call will be Vince Arnone, President and Chief Executive Officer; and Dave Collins, Senior Vice President and Chief Financial Officer. After prepared remarks, we will open the call for questions. Before turning things over to Vince, I would 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 the company's 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 during this call. And as a reminder, the call is being broadcast and can be accessed at our website www.ftek.com. With that said, I'd now like to turn the call over to Vince Arnone, President and CEO of Fuel Tech. Vince, please go ahead.

Thank you, Devin. Good morning, everyone and thanks for joining us on the call today. Dave will discuss our financial results in greater detail in just a few minutes, but I would like to take a few moments to provide some perspectives on our full year performance for 2015. I characterize 2015 as a year where we continued to operate in a very challenging environment in the domestic marketplace driven by primarily by regulatory uncertainty and the migration of fuel sourcing from coal to natural gas and it was a year in which we specifically addressed this fundamental structural shift in the power generation industry via modifications in our approach towards business development activities, cost structure and overall corporate strategy. These unprecedented changes in our country's energy profile contributed to Fuel Tech recording two non-cash charges in Q4 of 2015 which totaled $7.5 million. Dave will address this in greater detail shortly however I want to do stress that these are indeed non-cash charges and as such, they have no impact on Fuel Tech's liquidity, cash flow or compliance with debt covenants. Moreover, these charges do not impact our general outlook for 2016 and beyond. As you saw in our results for 2015, our APC revenue performance exceeded that of the prior year driven by approximately $40 million in new orders for customers in the US, China, Latin America and Europe for the ESP, SNCR, Advanced SNCR, SCR, Combustion and ULTRA technology solutions. As we have noted previously, it has been our specific intent over these past few years to withstand our geographical presence and our air pollution control product line to ensure that we would not be dependent on any one market or one product at any point in time. In our FUEL CHEM business we saw a decline…

Thank you Vince and good morning everyone. During 2015, we experienced an increase in our air pollution control segment revenue while our FUEL CHEM segment revenue declined. We’ll talk more about each segment in a bit. Our business continues to push from difficult market conditions and as a result we recognized non-cash charges in the fourth quarter with long-lived assets totaling $1.4 million and US deferred taxes totaling $6.1 million. These charges contributed to a net loss for the full year 2015 of $4.4 million and a fourth-quarter loss of $9 million. We would point out that the US deferred tax charge of $6.1 million in valuation allowance and we can reverse this charge in the future and re-establish our US deferred taxes when we have achieved profitable operations in most geographic market. Our adjusted EBITDA for the full year 2015 was negative $1.2 million, down from the prior positive amount of $4.4 million. Consolidated revenues for the full year $73.7 million, a decrease of $5.4 million or 7% from the prior year. This revenue decrease is associated with our FUEL CHEM segment and related to a specific customer relationship that has reduced its order flow due to changing business conditions. Consolidated gross margin percentage for the full year was 39%, down 5% from prior year. This decline resulted from a decrease in our APC segment gross margins and a decrease in our FUEL CHEM segment revenue which carried a higher gross margin percentage. We will talk more about our segments in just a minute. Our selling, general and administrative expenses for 2015 totaled $31.1 million, a decrease of $4.3 million from the prior year. This decrease resulted from cost reduction activities in all geographies with particular focus in US domestic cost reductions. We expect the full impact of these…

Thank you, Dave. Operator, I would now like to open the call for questions please.

[Operator Instructions] Our first question today is coming from Chip Moore from Canaccord Genuity. Please proceed with your question.

Good morning. Thanks. So Fuel Conversion, new segment that helps, obviously we get some more transparency, good to see. Can you talk a little bit more about market opportunity and how you see that playing out next several years, particularly in ‘17?

We’ll do. Thanks for the question, Chip. At this point in time, we haven’t spoken publicly about, call it, market sizing relative to Fuel Conversion and as we sit here today, what I can tell you was that we are continuing to invest obviously in the initiatives. We find very attractive end markets, both on the consumer and industrial side or what I would call the engineered carbon feedstock products. As we come to realize that there are more uses of carbon for a multitude of activities and we have even [ph] realized. So from our perspective, the investments that we’re making are obviously very worthwhile. We’re still in the development phase, but we are working with, at a minimum, three potential customers right now that do represent good opportunities for us for what I would call more near term business, okay. The market sizing is, I mean, right now, Chip, they are large market opportunities without quantifying them today. If we didn’t believe that, we would not be continuing to further invest in further development, look to commercialize. Now, relative to near term, as we look at how we’re looking to further develop fuel conversion, we have various steps that need to take place before we actually will generate revenues from Fuel Conversion and in all likelihood, we would not see that happening until at a minimum late this year, early 2017 as we look to invest in and build out a facility that can generate product. That is the next phase we’re going through at this point in time. But we’re excited about the opportunity.

Okay. That’s helpful. And to sort of frame that I guess, if you do [Technical Difficulty] is there a sense of capital cost or anything along those lines?

Yes. We’re looking at a variety of different options as to what I would call site selection and that the different options actually have very different capital investment requirements just because of the, what I would call the infrastructure that would be resident at those sites. So, it’s a pretty wide range. I’ll give you a, call it a high level target, it could be as low as call it $10 million to $15 million and as high as $30 million to $40 million, somewhere in that range. But at the same time, as we’re working through development and commercialization, we’re also looking at financing opportunities for the initiation as well. So all of this is happening in parallel as we sit here today.

Okay. That’s helpful. And just for a second with the diversification theme, I guess particularly for FUEL CHEM, you touched on standing -- more in paper and pulp and some other areas, I guess ‘16 is a little bit more of a feeding the market kind of year, just how do you see diversification playing out I guess over the next several years there.

Yeah. Obviously, coal assets are under pressure and that’s no surprise. It’s been that way for this past 2 to 3 years now. The rapid nature of that pressure is something that really has been extraordinary to watch develop, but from our perspective, what that means is that we do need to take the FUEL CHEM product line to other markets and other opportunities and we do see that there are other opportunities for the FUEL CHEM program. Pulp and paper is one, biomass is another. Many of those opportunities are going to be outside of the borders of the US and so right now, we’re looking at ways to capture those market opportunities. We still believe that coal has a viable future, it’s just not going to be going away in this next handful of years and so as the overall market environment stabilizes, as we look forward over the next decade, we still believe that there are going to be some coal opportunities for FUEL CHEM, but probably not as abundant as they were historically. Okay. That’s why we have to focus on quality, the non-core business development for FUEL CHEM, we have to right now.

Right. That makes sense. And then just lastly for me, on the APC backlog, $32 million or so with some more in the near term hopper, can you talk a little bit about cadence of at least over the next several quarters, if you have visibility on how that rolls off? Thanks guys.

Thanks, Chip. Dave, would you like to go ahead and talk to that?

Yeah. We would look to see the current backlog that we have carry through probably the first three quarters of 2016 and then any additional orders that we would book of course would schedule out. We think of a cycle of about a 9 month cycle on the APC side and depending on what type of order it is, if it’s a larger project, that can extend over 12 to 15 months, specifically we think of it as a 9 months turn.

Okay. Thanks very much.

Thank you, Chip.

Thank you. [Operator Instructions] We have reached the end of our question-and-answer session. I would like to turn the floor back over to management for any further or closing comments.

Thank you, operator. For all of our Fuel Tech investors, thanks for taking the time today and for your continued interest in Fuel Tech. I would characterize 2015 as a rebuilding year for Fuel Tech, a balancing of our cost structure and revenue base as we look to enter into profitability for our base businesses in 2016 and beyond. Additionally, investments for our future are absolutely critical for us right now. We see Fuel Conversion as a great opportunity to further grow and enhance Fuel Tech’s value proposition. And on top of that, we have instituted a reenergized new product development program, which today is focusing on a variety of different activities that we believe can provide future benefit to Fuel Tech. So thanks for your time and we’ll be talking again soon.

Thank you. It does conclude today’s teleconference. You may disconnect your lines at this time and have a wonderful day. We thank you for your participation today.