Greetings, and welcome to the Fuel Tech Reports 2016 First Quarter Financial Results Conference Call. At this time, all participants are 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. I will now turn the conference over to Mr. Devin Sullivan of The Equity Group. Devin Sullivan, you may begin.

Thank you, Manny. Good morning, everyone, and thank you for joining us for Fuel Tech’s 2016 first quarter financial results conference call. Yesterday after the close, we issued a copy of the release, which is available on our 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 from our analysts and investors. 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 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 during the 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 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 Vince Arnone, President and Chief Executive Officer of Fuel Tech. Vince, please go ahead.

Thank you, Devin. Good morning and thank you everyone for joining us on the call today. It’s been about six weeks since our last conference call, so my remarks today will focus primarily on the most significant activities in our business segment since that date. Our financial results for the first quarter of 2016 came in as expected. First quarter APC revenues nearly doubled from last year’s first quarter and were modestly improved over revenues in the fourth quarter of 2015. We’re currently executing on project work related to the backlog of $22 million that we reported at the end of 2015. APC gross margin of 28% was lower when compared to the gross margin levels in both the first quarter of 2015 and the fourth quarter of 2015, due primarily to the current project mix. Our industry is continuing to evolve as it looks to address lingering domestic regulatory uncertainty and a changing global energy profile. As I noted on our prior calls, 2015 was a year in which we specifically addressed this fundamental structural shift in the power generation industry by modifying our approach towards business development activities, our cost structure, and our overall corporate strategy. It is also important to note that our delivery, geographic and product line expansion efforts for the APC segment over the last several years have allowed us to weather a still challenging environment for our solutions by ensuring that we would not be dependent on any one market or in any one product at any given time. Year-to-date here in 2016, we have announced $14 million in new APC project awards, including the orders that we announced in China just this morning. The $14 million in new awards are from customers in the U.S., China, and Europe for our ESP, SNCR, ASNCR,…

Thank you Vince and good morning everyone. Thank you for participation in today’s call. Consolidated revenues for the first quarter totaled $17.8 million an increase of $2.7 million or 18% from the prior year. Higher consolidated revenues were driven by 89% increase in APC technology segment revenue, which more than offset a 41% decline in our FUEL CHEM segment revenue. Consolidated gross margin percentage for the first quarter was 34%, down 10% from the prior year of 44%. This decline resulted from a decrease in our APC segment gross margin and lower FUEL CHEM segment revenue, which generally carries a higher gross margin percentage. We’ll talk more about our segment results in just a minute. As Vince noted, our first quarter SG&A expenses decreased to $7.5 million from $8.2 million in the prior year. This decrease resulted from cost reduction activities in all geographies with particular focus in U.S. domestic cost reductions. Although SG&A will be significantly lower in 2016 when compared to last year, we will continue to review our cost structure and make any additional adjustment as needed. Our research and development spending in the first quarter totaled $1.2 million, an increase of $286,000 over the prior year. This incremental spending is related to the Fuel Conversion business development efforts, which include product development and testing, equipment design and configuration, and market and customer development initiatives. New product development remains essential component of our future growth and we expect our R&D spending in 2016 to approximate 5% to 7% in consolidated revenues. We reported an income tax benefit in the first quarter of 205,000, as compared to a tax benefit of 871,000 in the prior year. During the fourth quarter of 2015, we established a full valuation allowance against our deferred tax assets, which will reduce our tax…

Thanks very much, Dave. Operator, let’s go ahead and open the line for questions. Thank you.

Thank you. Ladies and gentlemen, we’ll now be conducting a question-and-answer session [Operator Instructions] Our first question is from Chip Moore of Canaccord. Please go ahead.

Good morning. Thanks, guys.

Good morning, chip.

Good morning, chip.

Can you talk a little bit the cadence of that current backlog – project backlog, I expect that to roll off, and then margin mix on that business?

So, we’ll do. Right now I – we had stated that our pro forma backlog is approximately $22 million at this point in time. And at this point in time, we would say a great majority of that that $22 million is going to come into 2016 as revenue. Margins profile, Dave, would you like to comment on margin profile and mix?

Our blended margin is running about 25% for the APC between 25% and 30% for the APC segment.

Okay, that’s helpful. And then maybe talk a little bit more about your near-term what you’ve seen out there? Thanks, guys.

Okay, Chip, thank you. As I noted in my commentary, we’re seeing the mix of opportunities in all of our geographies at this point in time. Our pipeline – I’ll start with China. Our pipeline in China is active and robust as I’ve seen it in a long time. And there’s a great activity with regard to many of the power generation entities looking to comply with the new requirements for NOx reduction. And as I noted, the interest in our SNCR technology to help with that compliance requirement is very, very strong as we sit here today. And as I noted, we’re expecting to see a little bit of an uptick in revenue from timing here in 2016. In the United States, our pipeline looks strong as well. A lot of project activity, but predominantly focused more on the industrial side than on the utility side today. There’s not to say that there are some utility opportunities in the pipeline because of our but just national levels that we would have seen in prior years. So activity in the U.S. remain strong, but with a heavier focus on the industrial marketplace. And as I noted in Europe after the record year that we had in 2015 here in 2016, we’re seeing good interest in our advanced SNCR technology in Europe as well. And the pipeline is very active there also. So – but as we deal with our APC business relative to the revenue recognition, timing is always a great consideration to us, so we watch that very, very closely.

Okay, thanks. I appreciate it.

Thank you. [Operator Instructions] And the next question is from – we’ll see for a moment, if we have any questions, again one more call. At this time I would like to turn the conference back over to Mr. Arnone for any closing remarks.

Okay. Well, I would like to thank everyone for joining on the call today and we appreciate your interest in Fuel Tech. I would like to note that Dave and I will actually be presenting at the Drexel Conference in New York City tomorrow morning at 10:00 AM Eastern time, and hopefully, we’ll have a chance to meet some of you there. Have a good day, everybody, and we’ll be talking with you again soon. Thank you.

Thank you. Ladies and gentlemen, this does conclude today’s teleconference. You may disconnect your lines at this time, and thank you for your participation.