Fuel Tech - Earnings Call - Q1 2025

Executive Summary

• Q1 2025 delivered a solid topline and margin recovery: revenue rose 29% year over year to $6.38M with gross margin expanding 550 bps to 46.4%; operating loss narrowed to $0.95M, and Adjusted EBITDA loss improved to $0.74M.
• Results were driven by a 92% surge in FUEL CHEM revenue to $5.08M and 50% segment gross margins; APC revenue declined to $1.30M on project timing, with gross margin at 32.6%.
• Backlog increased 66% sequentially to $10.3M, aided by $5.6M of APC orders YTD; balance sheet remained strong with $31.2M cash and investments, no debt.
• FY 2025 revenue guidance maintained around ~$30M; management highlighted rising datacenter-driven opportunities (per-unit content ~$1–2M, multi-unit sites) and a 9–12 month DGI aquaculture demonstration beginning late Q2, both potential catalysts.
• Versus S&P Global consensus, EPS met (-$0.02 vs -$0.02*), revenue modestly missed ($6.38M vs $6.64M*), and EBITDA was slightly below (-$0.78M vs -$0.74M*)—an overall in-line quarter with a small revenue shortfall (Values retrieved from S&P Global).

What Went Well and What Went Wrong

What Went Well

• FUEL CHEM delivered its best first-quarter performance in over a decade: revenue +92% y/y to $5.08M; segment gross margin expanded to 49.9%, reflecting account normalization and a new commercial program added in Q4 2024. Management: “best first quarter performance… in more than 10 years”.
• Gross margin expanded to 46.4% (from 40.9% y/y) and operating loss narrowed meaningfully; Adjusted EBITDA loss improved to $0.74M vs $1.50M y/y.
• APC orders cadence improved: $5.6M bookings YTD and backlog up 66% q/q to $10.3M; management expects an additional $3–5M of new awards by end of Q2.

What Went Wrong

• APC revenue fell 44% y/y to $1.30M on project timing; segment gross margin compressed to 32.6% (from 38.4% y/y) on mix and lower ancillary revenues.
• Net loss of $0.74M vs net income of $0.28M y/y; prior-year profit was boosted by a one-time $1.7M employee retention credit—excluding it, Q1 2024 would have been a $1.4M loss.
• Regulatory tailwinds unlikely near-term: Good Neighbor rule remains remanded; MWC final rule delayed to Dec-2025; APC opportunities today are not contingent on new regulation.

Transcript

Operator (participant)

Greetings and welcome to the Fuel Tech 2025 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 during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Devin Sullivan, Managing Director of the Equity Group. Please go ahead.

Devin Sullivan (Managing Director)

Thank you, Melissa, and good morning, everyone. Thank you for joining us today for Fuel Tech's 2025 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 Fuel Tech'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. Fuel Tech has tried to identify forward-looking statements by using words such as anticipate, believe, plan, expect, estimate, intend, will, and similar expressions, but those words are not the exclusive means of identifying forward-looking statements.

These statements are based on information currently available to Fuel Tech and are subject to various risks, uncertainties, and other factors, including but not limited to those discussed in Fuel Tech's annual report on Form 10-K and item 1A under the caption of risk factors and subsequent filings under the Securities Exchange Act of 1934, as amended, which could cause Fuel Tech'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. Fuel Tech undertakes no obligation to update such factors or to publicly announce the results of any forward-looking statements contained herein to reflect future events, developments, or changed circumstances, or for any other reason. 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, CEO of Fuel Tech. Vince, please go ahead.

Vince Arnone (Chairman, President and CEO)

Thank you, Devin. Good morning, and I'd like to thank everyone for joining us on the call today. On our March conference call, we expressed encouragement with our near-term outlook for business development opportunities. I'm pleased to report that our first quarter contract booking activity met our expectations with $5.6 million in bookings announced to date, and we had the best first quarter performance for our Fuel Chem business segment in more than 10 years. We believe that 2025 will be a year of growth for our company. Revenues for the first quarter of 2025 rose 29% from the prior year period, primarily driven by the aforementioned robust performance from our Fuel Chem business segment. For the quarter versus prior year, we expanded our gross margins, narrowed our operating loss, and significantly increased our APC project backlog to the highest level in three years.

Further, we maintained a strong financial position with cash, cash equivalents, and investments of approximately $31 million at quarter end and no long-term debt. On an overall basis, we are encouraged by the global landscape of business development activities that we are seeing, driven by continued expansion in manufacturing in many sectors, and by the growing demand for power generation as a whole, which is being driven by several reasons, most notably the advancement of artificial intelligence. Fuel Tech's portfolio of emissions control solutions has proven to be an integral part of infrastructure build-outs in the U.S. and around the world. Regardless of fuel source, our technologies are used to reduce harmful gases, including nitrogen oxides and sulfur trioxides, as well as particulate emissions from combustion sources, while enhancing operating efficiencies and allowing industrial and utility customers to remain compliant with state, federal, and country-specific regulations.

Investment in water quality and water infrastructure is also growing, and we believe that our dissolved gas infusion technology offers a compelling solution for municipal and industrial end markets. We have a product demonstration that will commence later this month and are in discussions with customers representing multiple end markets that can benefit from our water technology. Now, let's talk about our results for the quarter. Our Fuel Chem business segment began 2025 with the best first quarter performance that we have seen in 10 years, with revenues rising 92% compared to last year's first quarter. This was the result of the return to full operation of our base accounts and the incremental contribution from the new commercial account that we added in the second quarter of 2024.

We continue to pursue additional Fuel Chem opportunities, both domestically and internationally, and we currently expect that a new demonstration of our TIFFE Targeted In-Furnace Injection technology is likely to commence late in the third quarter of this year at a coal-fired unit in the Midwest. With respect to international Fuel Chem opportunities, we remain in discussions with our partner in Mexico to expand the provision of our chemical technology in that country. Based on conversations with our partners in Mexico, it is still our understanding that the newly elected government is targeting the implementation of environmental policy aimed at the reduction of pollutants that cause climate change.

As Mexico is planning to use the heavy fuel oil generated from their oil refining operations as fuel for power generation for the near-term future, we are hopeful that our Fuel Chem program will be an integral part of President Sheinbaum's plan. Now, let's turn to our APC business segment. APC revenues declined from last year's first quarter due primarily to the timing of project execution. However, we have been encouraged by the cadence of new contract awards and are currently addressing the best portfolio of APC business opportunities that we have seen in several years, both domestically and internationally. We generated $5.6 million in APC orders during the first quarter, which drove a 66% increase in our backlog at March 31st, 2025, from December 31st, 2024.

We are continuing to pursue additional new awards driven by industrial expansion globally and by state-specific regulatory requirements in the U.S., and we are also following incremental opportunities for the municipal solid waste, or MSW Market that have a good probability of coming our way later this year. As of today, we currently expect to close an additional $3 million-$5 million in new contract awards by the end of the current second quarter. As mentioned previously, the artificial intelligence boom has generated increasing demand for data centers. This growth will require a significant increase in energy over the next several years. To address the necessary emissions control requirements of these facilities, we are utilizing our SCR and Ultra Technologies to participate in larger domestic contract opportunities.

We are working with multiple parties involved in the development of data centers and have submitted budgetary bids in pursuit of opportunities in this market. Regarding the regulatory front, as we mentioned on our conference call in March, we are not expecting any specific tailwinds that would come from the implementation of new regulation, as the new administration is not likely to implement regulations that were working through the process of approval and finalization when the new term commenced. It is important to note that the opportunities that we are following today are not contingent on the implementation of any new regulations. We are continuing to monitor progress of the EPA's rule for the large municipal waste combustion units, which is independent of the good neighbor rule. This rule reduces the nitrogen oxide emissions requirements for large MWC units.

Fuel Tech has had a long history of assisting this industry in meeting its compliance requirements, and we have had discussions with customers in this segment to support their compliance planning. The final rule has been delayed by EPA until December of 2025, with compliance deadlines expected three years from the date of issue. That being said, there are some specific states that are currently requiring lower NOx emissions that are consistent with the proposed MWC rule, and we are actively pursuing those opportunities today. For DGI, we have deployed our equipment to the site of a fish hatchery in the western U.S., and our demonstration, which is expected to last 9-12 months, will commence before the end of this month.

This demonstration will have defined test protocols to evaluate the benefits of the DGI technology resulting from the supply of consistent and precise levels of dissolved oxygen and the raising of game fish in a controlled environment. In addition to this demonstration, discussions are progressing with the municipal wastewater treatment facility in the Southeastern United States, and we are pursuing other end markets of interest for DGI, including pulp and paper, food and beverage, chemical and petrochemical, and horticulture. We continue to receive inquiries regarding DGI from potential customers in multiple end markets and are hopeful that we can generate our first commercial revenues in 2025. Additionally, we have recently executed sales representative agreements with two companies that will focus their efforts on helping us to bring DGI into end markets, and we expect to add additional representatives imminently.

Based on our effective backlog, recent contract awards, the APC business development activities that we are pursuing, and our previously noted expectations for Fuel Chem, we are maintaining our revenue guidance for 2025. We continue to expect that total revenues for 2025 will approximate $30 million, with both business segments exceeding their performance in 2024. This base case outlook excludes any material revenue contributions from DGI, any significant contributions to APC from new regulations or from large data center contract awards, and any impact from new material business development activities for Fuel Chem. In closing, we are very encouraged by the recent developments at APC, the continued growth potential from our Fuel Chem segment, and the opportunities we are pursuing at DGI.

I want to express my thanks to the Fuel Tech team for their continued efforts in support of our strategic goals, and I want to thank our shareholders for their continuing interest in and support of our company. I also want to let everyone know that we will be presenting at the upcoming Sidoti Micro Cap Virtual Conference, which is being held on May 21st and 22nd. I invite everyone to listen to our presentation. We will notify everyone of our specific presentation day and time, via press release within these next couple of business days. Now, I'd like to turn the call over to Ellen for her comments on our financial results. Ellen, please go ahead.

Ellen Albrecht (CFO)

Thank you, Vince, and good morning, everyone. For the quarter, consolidated revenues rose 29% to $6.4 million from $5 million in last year's Q1, reflecting significant growth in our Fuel Chem segment revenue, partially offset by a decrease in APC segment revenue compared to the prior year period. Fuel Chem segment revenue increased by 92% to $5.1 million from $2.6 million in the prior year period and comprised nearly 80% of total revenues for the quarter. This was driven by customer accounts returning to service as a result of outage completions, increased dispatch, and sustained contributions from the new coal-fired account added in 2024. Conversely, APC segment revenue declined to $1.3 million from $2.3 million in last year's first quarter, primarily related to timing of project execution on existing contracts. Consolidated gross margin for the first quarter rose to 46% of revenues from 41% in last year's Q1.

This improvement reflected the higher proportion of Fuel Chem segment revenue during the quarter, which returned to historical margins of 50% from 43% in Q1 of 2024, partially offset by a decline in APC margins to 33% of segment revenues from 38% in the prior year period. The decline in APC gross margin was driven by changes in product and project mix. As a reminder, the APC segment contains revenues from capital projects and ancillary revenues for items such as post-contractual parts and services. Ancillary point and revenues maintain a higher margin profile and will offset fluctuating project revenue margins, which are recognized over time based on project completion. The duration of APC project completion typically ranges from 8 months-24 months, with engineering and production costs dependent on design approval and delivery schedules, which directly impact timing of revenue recognition.

As expected, APC backlog improved significantly in early 2025 due to the success of business development activities. Consolidated APC segment backlog on March 31st, 2025, was $10.3 million, up from a backlog of $6.2 million at December 31st, 2024. Backlog at March 31st, 2025, included $3.6 million of domestically delivered project backlog and $6.7 million of foreign delivered project backlog, compared to $1.9 million of domestic delivered project backlog and $4.3 million of foreign delivered project backlog at December 31st. We expect that approximately $6.9 million of current consolidated backlog will be recognized in the next 12 months. SG&A expenses were flat at $3.3 million for the Q1 of 2025 and 2024. As a percentage of revenue, SG&A expenses declined to 52% in Q1 of 2025 from 67% in Q1 of 2024, reflecting the increase in revenue. For 2025, we expect SG&A expenses to increase modestly from prior year.

Research and development expenses for the first quarter increased to $570,000 from $376,000 in last year's Q1 due in large part to our continuing investment in water and wastewater treatment technologies, specifically our DGI systems. Our investment in DGI will continue throughout 2025, along with expenditures to support our growth initiatives. Our operating loss was $952,000 compared to an operating loss of $1.7 million last year's first quarter, reflecting the increase in consolidated revenue and improved gross profit. We continue to take advantage of the favorable interest rate environment and, as of March 31st, 2025, had invested a large portion of our $30 million in held-to-maturity debt securities and money market funds. This generated $279,000 of interest income in Q1 of 2025.

Our net loss for the quarter was $739,000, or $0.02 per share, compared to net income of $281,000, or $0.01 per share in the same period one year ago. The difference in net income from prior year was mainly due to a one-time other income amount of $1.7 million in last year's first quarter associated with the receipt of the ERC, the Employee Retention Credit under the CARES Act. Excluding this one-time other item, net loss for Q1 2024 was $1.4 million, or $0.05 per share. Adjusted EBITDA loss narrowed to $735,000 compared to an adjusted EBITDA loss of $1.5 million in the same period a year ago. Lastly, moving to the balance sheet, our financial condition remains very strong. As of March 31st, 2025, we had cash and cash equivalents of $11.8 million and short and long-term investments of $19.3 million for a total of $31.2 million.

Shares outstanding at the quarter end were approximately $30.8 million, equating to cash per share of $1.01. Working capital was $24.9 million, or $0.81 per share. Stockholders' equity was $41.4 million, or $1.35 per share, and the company continues to have no outstanding debt. We remain greatly confident in our ability to maintain a strong financial position and to fund our short and long-term growth initiatives. I'll now turn the call back over to Vince.

Vince Arnone (Chairman, President and CEO)

Thanks very much, Ellen. Operator, let's please go ahead and open up the line for some questions.

Operator (participant)

Thank you. If you'd like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question comes from the line of Amit Dayal with HC Wainwright. Please proceed with your question.

Amit Dayal (Analyst)

Thank you. Good morning, everyone.

Vince Arnone (Chairman, President and CEO)

Good morning, Ellen.

Amit Dayal (Analyst)

It looks like the business is, yeah, it looks like the business overall is, you know, in a pretty strong position relative to last year. Any color on thinking about the current political environment, and it doesn't look like it's slowing down things for you too much. Just any update on how you're positioned to deal with, you know, some of these uncertainties in the market right now with respect to all sorts of these regulations that are potentially being implemented?

Vince Arnone (Chairman, President and CEO)

Yeah. At this point in time, Amit, I think I would say we're not completely sheltered, obviously, from what's going on in the marketplace today in general. I will say that what's happening with the new administration at this point in time is not deterring us from capturing opportunities that we would normally look to capture historically, right? We did not have any preconceived ideas that there were going to be new regulation put in place environmentally that would give us a boost. That would have been our expectation perhaps last year. That's not the case today. The just general business expansion and some of the needs that are driving the growth of power generation, they are definitely market drivers for our businesses. From that perspective, we find ourselves in a pretty good position as we hear today.

Now, one more comment I'll make is that we have been seeing over these past, you know, two to three years, because of the requirement for increased power generation, we've seen some extension of life of coal-fired units. That could continue to bode well for us because I think we're going to see more extensions of life of coal-fired units, given just a general demand of very reliable power that we have in this country and other parts of the world. On an overall basis, there are probably some puts and takes, but I'm pleased with where we sit today, and I'm not seeing any decrement in business activity with some of the uncertainties in the marketplace, at least as of today.

Amit Dayal (Analyst)

Understood. Thank you for that. With respect to the data center opportunity, any names you can share who you may be partnering with, you know, to, you know, make inroads with this developing market? The reason I'm asking is, you know, if there are, you know, names that the street is sort of aware of that are already active, you know, just trying to get a sense of if you get designed into any of these deployments, and does that help you scale the opportunity faster?

Vince Arnone (Chairman, President and CEO)

Yeah. To your first question, I really can't name a specific name, but what I'll tell you is that we're working with OEM suppliers of gas turbines and engines. We're also working in support of data centers that are being built out by some of the largest tech companies of the marketplace. Without saying specific names, we are working with that group of entities, if you will. Secondarily, what we have been doing is, as we've been watching this evolve, is looking to come up with specific designs for specific power-generating turbines or engines that we would indeed look to scale. Because in most cases, the sites that we're looking at are going to be multiples of units and not just one-off units for a gas turbine or engine. It may be five. It may be ten. It may be twenty. It may be more.

To the extent that we can get close to finalizing those designs and be ready to go once we have the opportunity, you know, coming our way, that just bodes well for Fuel Tech and enables us to work in a proactive way with our supply chain as well.

Amit Dayal (Analyst)

Understood. How big is that pipeline, Vince? Any color on is it still early to maybe give any numbers, but just curious, you know, how big that opportunity is for you right now?

Vince Arnone (Chairman, President and CEO)

Yeah. The numbers can get pretty large, Amit. I mean, if you're talking a multiple of 20 units and if you're, call it the one-unit cost can be in the $1 million-$2 million range, you can do the math from there. The opportunities can get to start to become pretty large in nature, which is why we are excited. Again, we're very, very hopeful that we'll see one or more of these contract awards hopefully look to come our way as we move towards the remainder of 2025. There's a lot of activity, and there's a lot of parties involved as well. We're trying to well-position ourselves with those folks that we think are going to be solid, reliable players in those markets.

Amit Dayal (Analyst)

Understood. Just last one for me with respect to the Mexico opportunity. Is there any particular catalyst or some kind of funding that needs to become available, you know, for that opportunity for you to potentially begin receiving orders, etc.?

Vince Arnone (Chairman, President and CEO)

Yeah. What really needs to happen, Amit, is the Mexican government needs to allow funds to be spent on systems like ours to go ahead and start remediation of some of their pollution issues. It's become really serious around some of their major cities. You see it in the news quite often down there. We're just hoping at some point in time, and again, given the platform that was run on by the president, we are hoping that their environmental needs will become a little more top of mind not too far into the future here.

Amit Dayal (Analyst)

Understood. Thank you, Vince. That's all I have.

Vince Arnone (Chairman, President and CEO)

You're welcome. Thank you.

Operator (participant)

Thank you. Ladies and gentlemen, as a reminder, if you'd like to join the question queue, please press star one on your telephone keypad. Our next question comes from the line of Marc Silk with Silk Investment Advisors. Please proceed with your question.

Marc Silk (CEO)

Hey, Vince. Thanks for taking my questions.

Devin Sullivan (Managing Director)

My pleasure, Marc. How are you?

Marc Silk (CEO)

I'm doing well, thanks. The data center opportunity, obviously, with this administration, there's no urgency for them to do things environmentally friendly, but the conversations you have, are they thinking beyond this administration? That's kind of why you feel that there's an opportunity?

Vince Arnone (Chairman, President and CEO)

Yeah. What we're seeing with some of the data center opportunities that we are looking to address is, in some cases, the power generation is primary power. In some cases, it's backup power. If it's primary power, under current environmental regulations, those units are going to require pollution control technology as base-loaded generation. If it's backup power, it gets to be a little bit more specific in nature in terms of the expectation for how long or how many hours a year those backup units will be asked to run. In some cases, backup power may not require pollution control technologies. In other cases, it will.

Again, as I said as part of my script, the opportunities that we're looking at today aren't necessarily driven by any new regulation, but it's also making the assumption that what's in place today, as EPA regulation, does stay in place, and it's not going to be removed completely.

Marc Silk (CEO)

Okay. Switching gears to the DGI. You're hiring other entities to help you sell this. Can you kind of give us a little color on that and what they've kind of laid out for you as far as their potential and promises?

Vince Arnone (Chairman, President and CEO)

Yeah. It was always our expectation when we looked to address additional market channels for DGI that we would need some expertise in order to obtain access to those channels. As Fuel Tech, historically, we have worked with manufacturing representatives both for our APC business and for our Fuel Chem business as well. For water, we are actually doing the same thing. We needed to come to a point whereby we were able to speak with confidence with some of these companies. They felt as though they were representing a technology and investing their time and effort in looking to put a good technology into end markets. It has taken us a while to get to that point. As I mentioned in my script, we have signed up two already. That just happened recently. They are for different end markets and/or geographies.

We'd probably look to put in place ultimately several more as well, again, to help us get product into end markets.

Marc Silk (CEO)

Last question. You recently went to a show for the DGI. Can you give us any kind of color on what people are looking at, what they're saying about your product that's in potential for, you know, growth in that area?

Vince Arnone (Chairman, President and CEO)

Yeah. So we went to the Aquaculture America show. It was extremely, DGI was extremely well received. We obtained multiple leads for opportunities in, again, in the aquaculture marketplace. There is one specific lead that we issued a proposal for here within this past week and a half. The technology was well received. We were perceived as being innovative for that particular end marketplace. We need to find those folks that are willing to take a chance at working with a new innovation for meeting that market application's need for oxygenation. The DGI was very well received.

Marc Silk (CEO)

Great. Good start to the new year and continued success.

Vince Arnone (Chairman, President and CEO)

Thank you very much, Marc. Appreciate it.

Operator (participant)

Thank you. Our next question comes from the line of William Bremer with Vanquish Capital Partners. Please proceed with your question.

Good morning, Vince.

Vince Arnone (Chairman, President and CEO)

Hey, good morning, Bill. How are you?

William Bremer (Founder and Chief Investment Officer)

Good, good. Thank you. Outside of coal, can you give us an update on your exposure to possibly NAT gas developments?

From what perspective when you say NAT gas developments?

Given the buildout and the supply of gas for electrical generation needs via data centers, etc., outside of the data center market and the facilities, where do we have content?

Vince Arnone (Chairman, President and CEO)

Yeah. Today, we would find opportunities for natural gas-based systems with manufacturing expansion projects that we've been doing with certain end markets and industries that end up using natural gas as their choice of fuel. That would be the primary other avenue that we'd be focusing on for utilization of natural gas.

William Bremer (Founder and Chief Investment Officer)

Right. No, I knew we had exposure there. I just looked for the update.

We do have just one more comment to make. We do have some exposure for natural gas applications for utility units as well, not necessarily for this country, but for other countries as well as it relates to some of our technologies.

Vince Arnone (Chairman, President and CEO)

Right. Right. Thank you for the refresher on that.

You're welcome.

William Bremer (Founder and Chief Investment Officer)

Given the data center opportunities, and I know this is a difficult question to answer, but can you provide a range that if we're successful, what's the low end? I mean, we're talking multiple millions here per data center content. Isn't that correct?

Vince Arnone (Chairman, President and CEO)

That is correct. As I just mentioned regarding one of the other questions, we're looking at on a per-unit basis, it could be $1 million-$2 million per unit. Again, we're talking multiples of units at a site. Yes, the numbers get very large.

William Bremer (Founder and Chief Investment Officer)

Okay. The fact that your fab lists, I'm assuming that's an advantage to you in terms of the production and the timing to get the systems there. I'm hoping that you're making that known to your potential entities when you're bidding for these.

Vince Arnone (Chairman, President and CEO)

Yes. As part of our discussions with the companies that we're working with, heavy focus on how we manage supply chain as part of the execution process, how we manage the risk for some of the, call it, other market forces that are in place today, whether it be tariff-oriented or otherwise, how do we control those risks as we look to work through a project execution cycle, particularly something that could be of a larger magnitude. Those are discussions that we are having and we're prepared to have with others.

William Bremer (Founder and Chief Investment Officer)

Okay. Now on to DGI. Looking forward to some consummation here for sure. This is just a comment. I would welcome hearing Bill Decker, who's heading this program alongside yourself, maybe on a future call, just to give us more of a granular update in what he's seeing and the technology. I think it would be a beneficial sharing of information to all the shareholders.

Vince Arnone (Chairman, President and CEO)

Okay. Point noted, Bill. Thank you very much.

William Bremer (Founder and Chief Investment Officer)

We're trading below cash per share. At what point, given your visibility and confidence, do you realize and the board seems to feel that a stock buyback at this level is probably the best return of capital for the shareholders as well as the company?

Vince Arnone (Chairman, President and CEO)

We actually just recently had a discussion at our most recent board meeting here earlier this month. It's something that we talk about on a recurring basis. As we sit here today, Bill, we believe we have enough potential positive momentum to be a driver for the stock price that that would be the better outcome than using our precious cash balance at this point in time to enable the same thing. That's our thought process today. Not necessarily saying that it would stay that way in the future, but that is our thought process today.

William Bremer (Founder and Chief Investment Officer)

Okay. Thank you very much.

Vince Arnone (Chairman, President and CEO)

Thank you, Bill.

Operator (participant)

Thank you. Ladies and gentlemen, there are no further questions at this time. I'll turn the floor back to Mr. Arnone for any final comments.

Vince Arnone (Chairman, President and CEO)

Thank you, operator. Thanks for everyone for joining today. Thanks for your patience with my speaking voice. I have a little bit of a cold this morning. If you have the opportunity to listen in to the Sidoti Micro Cap Virtual Conference, please join us for my presentation. You're welcome. I just want to thank, again, the Fuel Tech team for all of their support and all the hard work they do day in, day out in support of our company. Again, thanks to our shareholder base as well. We're doing everything that we can to look to deliver favorable shareholder value. Thanks, everyone, and have a good day.

Operator (participant)

Thank you. Ladies and gentlemen, this concludes today's conference call. You may disconnect your lines at this time. Thank you for your participation.