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ý
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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20-5657551
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(State of Incorporation)
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(I.R.S. ID)
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COMMON STOCK, $0.01 par value per share
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NASDAQ
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Large Accelerated Filer
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¨
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Accelerated Filer
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¨
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Non-accelerated Filer
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¨
(Do not check if a smaller reporting company)
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Smaller reporting company
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ý
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Page
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Item 1.
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Item 1A.
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Item 1B.
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Item 2.
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Item 3.
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Item 4.
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Item 5.
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Item 6.
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Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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Item 15.
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Term
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Definition
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AIG
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Ammonia Injection Grid
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ASCR™
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A trademark used to describe our Advanced Selective Catalytic Reduction process
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CAIR
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Clean Air Interstate Rule
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CAVR
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Clean Air Visibility Rule
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CSAPR
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Cross-State Air Pollution Rule
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CFD
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Computational Fluid Dynamics
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EPA
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The U.S. Environmental Protection Agency
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ESP
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Electrostatic Precipitator
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FGC
|
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Flue Gas Conditioning
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FUEL CHEM
®
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A trademark used to describe our fuel and flue gas treatment processes, including its TIFI
®
Targeted In-Furnace Injection™ technology to control slagging, fouling, corrosion and a variety of sulfur trioxide-related issues
|
|
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GSG™
|
|
Graduated Straightening Grid
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HERT™ High Energy Reagent Technology™
|
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A trademark used to describe one of our SNCR processes for the reduction of NOx
|
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I-NOx
®
|
|
Systems can include LNB, OFA, and SNCR components, along with SCR technology, Ammonia Injection Grid (AIG), and Graduated Straightening Grid (GSG™) system
|
|
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NO
x
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Oxides of nitrogen
|
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NO
x
OUT
®
|
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A trademark used to describe one of our SNCR processes for the reduction of NOx
|
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NO
x
OUT-SCR
®
|
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A trademark used to describe our direct injection of urea as a catalyst reagent
|
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NO
x
OUT-CASCADE
®
|
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A trademark used to describe our process for the combination of SNCR and SCR technologies
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SCR
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Selective Catalytic Reduction
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SNCR
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Selective Non-Catalytic Reduction
|
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TIFI
®
Targeted In-Furnace Injection™
|
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A trademark used to describe our proprietary technology that enables the precise injection of a chemical reagent into a boiler or furnace as part of a FUEL CHEM program
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UDI™
|
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Urea Direct Injection as the process to provide urea reagent directly into a duct for SCR applications
|
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ULTRA
®
|
|
A trademark used to describe our process for generating ammonia for use as a Selective Catalytic Reduction reagent
|
•
|
Our APC technologies include advanced combustion modification techniques including low NO
x
burners and over fire air systems, along with post-combustion nitrogen oxide (NO
x
) control approaches, including NO
x
OUT
®
and HERT™ Selective Non-Catalytic Reduction (SNCR) and Rich Reagent Injection (RRI) systems. Our Advanced Selective Catalytic Reduction (ASCR) system utilizes the combination of combustion systems and SNCR to provide a cost effective alternative to high capital cost, standalone conventional SCR systems while providing similar NO
x
reduction levels. The ULTRA
®
|
•
|
system generates ammonia on-site for SCR systems using safe urea reagent. Our SCR group provides process design optimization, performance testing and improvement, and catalyst selection services for SCR systems on coal-fired boilers. These technologies have established us as a leader in NO
x
reduction, with installations on over 1,000 units worldwide, where coal, fuel oil, natural gas, municipal waste, biomass, and other fuels are utilized.
|
•
|
Our FUEL CHEM technologies revolve around the unique application of chemical injection programs which improve the efficiency, reliability, fuel flexibility and environmental status of combustion units by controlling slagging, fouling, corrosion, opacity and acid plume, as well as the formation of sulfur trioxide, ammonium bisulfate, particulate matter (PM
2.5
), sulfur dioxide (SO
2
), and carbon dioxide (CO
2
). We use our patented TIFI
®
Targeted In-Furnace Injection™ processes to apply specialty chemical programs to units burning a wide variety of fuels including coal, heavy oil, biomass, and municipal waste. These TIFI programs incorporate design, modeling, equipment, reagent, and service to provide complete customized on-site programs designed to improve plant operations and provide a return on investment in addition to helping meet emission regulatory requirements.
|
•
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SNCR Systems: Our NO
x
OUT
®
and HERT™ SNCR processes use non-hazardous urea as the reagent rather than ammonia. Both the NO
x
OUT
®
and HERT™ processes on their own are capable of reducing NO
x
by up to 25% - 50% for utilities and by potentially significantly greater amounts for industrial units in many types of plants with capital costs ranging from $5 - $20/kW for utility boilers and with total annualized operating costs ranging from $1,000 - $2,000/ton of NO
x
removed.
|
•
|
I-NOx
®
Systems: Our I-NOx
®
systems can include LNB, OFA, and SNCR components, along with SCR technology, Ammonia Injection Grid (AIG), and Graduated Straightening Grid (GSG™) system. Together, these systems provide up to 90% NO
x
reduction at significantly lower capital and operating costs than conventional SCR systems while providing greater operational flexibility to plant operators. The capital costs for I-NOx
®
systems can range from $30 - $150/kW depending on boiler size and configuration, which is significantly less than that of conventional SCRs, which can cost $300/kW or more, while operating costs are competitive with those experienced by SCR systems. Our SCR systems utilize urea or ammonia as the SCR catalyst reagent to achieve NO
x
reductions of up to 85% from industrial combustion sources.
|
•
|
ULTRA Technology: Our
ULTRA
®
process is designed to convert urea to ammonia safely and economically for use as a reagent in the SCR process for NO
x
reduction. Recent local objections in the ammonia permitting process have raised concerns regarding the safety of ammonia shipment and storage in quantities sufficient to supply SCR. In addition, the Department of Homeland Security has characterized anhydrous ammonia as a Toxic Inhalation Hazard commodity. Our ULTRA
®
process is believed to be a market leader for the safe conversion of urea to ammonia just prior to injection into the flue gas duct, which is particularly important near densely populated cities, major waterways, harbors or islands, or where the transport of anhydrous or aqueous ammonia is a safety concern. Ammonia feed systems provide reagent flexibility for SCR reagent feed system, while our UDI™ Urea Direct Injection systems utilize direct injection of reagent without the need for an ammonia injection grid.
|
•
|
SCR Processes and Services: Our SCR group provides process design optimization, performance testing and improvement, and catalyst selection services for SCR systems on coal-fired boilers. In addition, other related services, including start-ups, maintenance support and general consulting services for SCR systems, Ammonia Injection Grid design and tuning to help optimize catalyst performance, and catalyst management services to help optimize catalyst life, are now offered to customers around the world. We also specialize in computational fluid dynamics models, which simulate fluid flow by generating a virtual replication of real-world geometry and operating inputs. We design flow corrective devices, such as turning vanes, ash screens, static mixers and our patented GSG
®
Graduated Straightening Grid. Our models help clients optimize performance in flow critical equipment, such as selective catalytic reactors in SCR systems, where the effectiveness and longevity of catalysts are of utmost concern. The Company’s modeling capabilities are also applied to other power plant systems where proper flow distribution and mixing are important for performance, such as flue gas desulfurization scrubbers, electrostatic precipitators, air heaters, exhaust stacks and carbon injection systems for mercury removal.
|
•
|
ESP Processes and Services: ESP technologies for particulate control include Electrostatic Precipitator (ESP) products and services including ESP Inspection Services, Performance Modeling, and Performance and Efficiency Upgrades, along with complete turnkey capability for ESP retrofits. Flue gas conditioning (FGC) systems include treatment using sulfur trioxide (SO
3
) and ammonia (NH
3
) based systems to improve the performance of ESPs by modifying the properties of the fly ash particle. Our ULTRA technology can provide the ammonia system feed requirements for FGC applications as a safe alternative to ammonia reagent based systems. FGC systems offer a lower capital cost approach to improving ash particulate capture versus the alternative of installing larger ESPs or utilizing fabric filter technology to meet targeted emissions and opacity limits. Fuel Tech’s particulate control technologies have been installed on more than 125 units worldwide.
|
•
|
Burner Systems: Low NO
x
Burners and Ultra Low NO
x
Burners (LNB and ULNB) are available for coal-, oil-, and gas-fired industrial and utility units. Each system application is specifically designed to maximize NO
x
reduction. Computational fluid dynamics combustion modeling is used to validate the design prior to fabrication of equipment. NO
x
reductions can range from 40%-60% depending on the fuel type. Over-Fire Air (OFA) systems stage combustion for enhanced NO
x
reduction. Additional NO
x
reductions, beyond Low NO
x
Burners, of 35% - 50% are possible on different boiler configurations on a range of fuel types. Combined overall reductions range from 50% - 70%, with overall capital costs ranging from $10 - $20/kW and total costs ranging from $300 - $1,500/ton of NO
x
removed, depending on the scope.
|
•
|
The Air Pollution Control technology segment includes technologies to reduce NO
x
emissions in flue gas from boilers, incinerators, furnaces and other stationary combustion sources. These include Low and Ultra Low NO
x
Burners (LNB and ULNB), Over-Fire Air (OFA) systems, NO
x
OUT
®
and HERT™ Selective Non-Catalytic Reduction (SNCR) systems, and Advanced Selective Catalytic Reduction (ASCR™) systems. The ASCR system includes ULNB, OFA, and SNCR components, along with a downsized SCR catalyst, Ammonia Injection Grid (AIG), and Graduated Straightening Grid (GSG™) systems to provide high NO
x
reductions at significantly lower capital and operating costs than conventional
|
•
|
The FUEL CHEM
®
technology segment which uses chemical processes in combination with advanced Computational Fluid Dynamics (CFD) and Chemical Kinetics Modeling (CKM) boiler modeling for the control of slagging, fouling, corrosion, opacity and other sulfur trioxide-related issues in furnaces and boilers through the addition of chemicals into the furnace using TIFI
®
Targeted In-Furnace Injection™ technology.
|
•
|
The Stamford, Connecticut building lease, for approximately
6,440
square feet, runs from February 1, 2010 to December 31, 2019. The facility houses certain administrative functions.
|
•
|
The Beijing, China building lease, for approximately
9,000
square feet, runs from June 1, 2017 to May 31, 2020. This facility serves as the operating headquarters for our Beijing Fuel Tech operation.
|
•
|
The Durham, North Carolina building lease, for approximately
2,590
square feet, runs from July 1, 2016 to July 31, 2019. This facility houses engineering operations.
|
•
|
The Gallarate, Italy building lease, for approximately
1,636
square feet, runs from May 1, 2013 to April 30, 2019. This facility serves as the operating headquarters for our European operations.
|
•
|
The Westlake, Ohio building lease, for approximately
3,000
square feet, runs from May 1, 2017 to April 30, 2020. This facility houses engineering operations.
|
•
|
The Aurora, IL warehouse lease, for approximately
11,000
square feet, runs from September 1, 2013 to December 31, 2020. This facility serves as an outside warehouse facility.
|
•
|
The Overland Park, KS lease, for approximately
600
square feet, runs from October 16, 2015 to October 15, 2018. This facility serves primarily as a sales office.
|
2017
|
|
High
|
|
Low
|
||||
Fourth Quarter
|
|
$
|
1.17
|
|
|
$
|
0.91
|
|
Third Quarter
|
|
1.14
|
|
|
0.79
|
|
||
Second Quarter
|
|
0.99
|
|
|
0.76
|
|
||
First Quarter
|
|
1.28
|
|
|
1.02
|
|
2016
|
|
High
|
|
Low
|
||||
Fourth Quarter
|
|
$
|
1.51
|
|
|
$
|
1.13
|
|
Third Quarter
|
|
1.80
|
|
|
1.31
|
|
||
Second Quarter
|
|
1.86
|
|
|
1.41
|
|
||
First Quarter
|
|
2.05
|
|
|
1.50
|
|
|
|
For the years ended December 31
|
||||||||||||||||||
CONSOLIDATED STATEMENT OF OPERATIONS DATA
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
(in thousands of dollars, except for share and per-share data)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues
|
|
$
|
45,166
|
|
|
$
|
55,161
|
|
|
$
|
73,664
|
|
|
$
|
79,017
|
|
|
$
|
109,338
|
|
Cost of sales
|
|
27,144
|
|
|
36,367
|
|
|
45,107
|
|
|
43,889
|
|
|
62,521
|
|
|||||
Selling, general and administrative
|
|
20,933
|
|
|
25,564
|
|
|
30,897
|
|
|
35,432
|
|
|
36,375
|
|
|||||
Restructuring charge
|
|
119
|
|
|
1,428
|
|
|
219
|
|
|
—
|
|
|
—
|
|
|||||
Research and development
|
|
1,070
|
|
|
1,752
|
|
|
1,447
|
|
|
1,459
|
|
|
2,442
|
|
|||||
Building, goodwill and intangible assets impairment
|
|
2,965
|
|
|
2,074
|
|
|
1,425
|
|
|
23,400
|
|
|
—
|
|
|||||
Operating (loss) income from continuing operations
|
|
(7,065
|
)
|
|
(12,024
|
)
|
|
(5,431
|
)
|
|
(25,163
|
)
|
|
8,000
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net (loss) income from continuing operations
|
|
(7,069
|
)
|
|
(14,588
|
)
|
|
(9,554
|
)
|
|
(17,448
|
)
|
|
5,101
|
|
|||||
Loss from discontinued operations
|
|
(3,914
|
)
|
|
(2,800
|
)
|
|
(2,826
|
)
|
|
(277
|
)
|
|
—
|
|
|||||
Net (loss) income
|
|
$
|
(10,983
|
)
|
|
$
|
(17,388
|
)
|
|
$
|
(12,380
|
)
|
|
$
|
(17,725
|
)
|
|
$
|
5,101
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net (loss) income per common share:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Continuing operations
|
|
$
|
(0.30
|
)
|
|
$
|
(0.62
|
)
|
|
$
|
(0.41
|
)
|
|
$
|
(0.77
|
)
|
|
$
|
0.23
|
|
Discontinued operations
|
|
(0.16
|
)
|
|
(0.12
|
)
|
|
(0.13
|
)
|
|
(0.01
|
)
|
|
—
|
|
|||||
Basic net (loss) income per common share
|
|
$
|
(0.46
|
)
|
|
$
|
(0.74
|
)
|
|
$
|
(0.54
|
)
|
|
$
|
(0.78
|
)
|
|
$
|
0.23
|
|
Diluted
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Continuing operations
|
|
$
|
(0.30
|
)
|
|
$
|
(0.62
|
)
|
|
$
|
(0.41
|
)
|
|
$
|
(0.77
|
)
|
|
$
|
0.23
|
|
Discontinued operations
|
|
(0.16
|
)
|
|
(0.12
|
)
|
|
(0.13
|
)
|
|
(0.01
|
)
|
|
—
|
|
|||||
Diluted net (loss) income per common share
|
|
$
|
(0.46
|
)
|
|
$
|
(0.74
|
)
|
|
$
|
(0.54
|
)
|
|
$
|
(0.78
|
)
|
|
$
|
0.23
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Weighted-average basic shares outstanding
|
|
23,872,000
|
|
|
23,365,000
|
|
|
23,101,000
|
|
|
22,782,000
|
|
|
22,286,000
|
|
|||||
Weighted-average diluted shares outstanding
|
|
23,872,000
|
|
|
23,365,000
|
|
|
23,101,000
|
|
|
22,782,000
|
|
|
22,579,000
|
|
|
|
December 31
|
||||||||||||||||||
CONSOLIDATED BALANCE SHEET DATA
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
(in thousands of dollars)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Working capital
|
|
$
|
18,025
|
|
|
$
|
26,585
|
|
|
$
|
35,865
|
|
|
$
|
39,688
|
|
|
$
|
48,619
|
|
Total assets
|
|
50,484
|
|
|
57,788
|
|
|
76,011
|
|
|
91,471
|
|
|
110,058
|
|
|||||
Long-term obligations
|
|
420
|
|
|
346
|
|
|
501
|
|
|
520
|
|
|
789
|
|
|||||
Total liabilities
|
|
16,143
|
|
|
14,396
|
|
|
17,037
|
|
|
19,170
|
|
|
21,435
|
|
|||||
Stockholders’ equity (1)
|
|
34,341
|
|
|
43,392
|
|
|
58,974
|
|
|
72,301
|
|
|
88,623
|
|
(1)
|
Stockholders’ equity includes the principal amount of nil coupon non-redeemable perpetual loan notes. See Note 7 to the consolidated financial statements.
|
•
|
A decrease in employee related costs, totaling $2,060, including an overall reduction in travel and entertainment costs of $437
|
•
|
A decrease in stock compensation expense of $602
|
•
|
A decrease in depreciation and amortization of $436
|
•
|
A decrease in professional fees and consulting services of $452
|
•
|
A decrease in office and administrative costs relating to our foreign subsidiaries of $377
|
•
|
A decrease in other administrative costs of $730
|
•
|
A decrease in employee related costs, totaling $3,506
|
•
|
An increase in stock compensation expense of $208
|
•
|
A decrease in depreciation and amortization of $194
|
•
|
A decrease in professional fees and consulting services of $917
|
•
|
A decrease in office and administrative costs relating to our foreign subsidiaries of $140
|
•
|
A decrease in other administrative costs of $784
|
Contractual Cash Obligations
|
|
Total
|
|
2018
|
|
2019-2020
|
|
2021-2022
|
|
Thereafter
|
||||||||||
Operating lease obligations
|
|
$
|
1,664
|
|
|
$
|
749
|
|
|
$
|
713
|
|
|
$
|
202
|
|
|
$
|
—
|
|
Total
|
|
$
|
1,664
|
|
|
$
|
749
|
|
|
$
|
713
|
|
|
$
|
202
|
|
|
$
|
—
|
|
•
|
in support of the warranty period defined in the contract; or
|
•
|
in support of the system performance criteria that are defined in the contract.
|
Commercial Commitments
|
|
Total
|
|
2018
|
|
2019
|
|
2020
|
|
Thereafter
|
||||||||||
Standby letters of credit and bank guarantees
|
|
$
|
3,250
|
|
|
$
|
2,970
|
|
|
$
|
216
|
|
|
$
|
64
|
|
|
$
|
—
|
|
Total
|
|
$
|
3,250
|
|
|
$
|
2,970
|
|
|
$
|
216
|
|
|
$
|
64
|
|
|
$
|
—
|
|
/s/ RSM US LLP
|
|
We have served as the Company's auditor since 2010.
|
|
Chicago, Illinois
|
March 12, 2018
|
|
|
December 31,
|
||||||
|
|
2017
|
|
2016
|
||||
ASSETS
|
|
|
|
|
||||
Current assets:
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
8,366
|
|
|
$
|
11,826
|
|
Restricted cash
|
|
1,020
|
|
|
6,020
|
|
||
Marketable securities
|
|
6
|
|
|
9
|
|
||
Accounts receivable, net
|
|
19,690
|
|
|
18,790
|
|
||
Inventories, net
|
|
945
|
|
|
1,012
|
|
||
Prepaid expenses and other current assets
|
|
3,592
|
|
|
2,891
|
|
||
Income taxes receivable
|
|
129
|
|
|
87
|
|
||
Total current assets
|
|
33,748
|
|
|
40,635
|
|
||
Property and equipment, net
|
|
6,272
|
|
|
10,517
|
|
||
Goodwill
|
|
2,116
|
|
|
2,116
|
|
||
Other intangible assets, net
|
|
1,671
|
|
|
1,796
|
|
||
Restricted cash
|
|
5,000
|
|
|
—
|
|
||
Assets held for sale
|
|
485
|
|
|
2,058
|
|
||
Other assets
|
|
1,192
|
|
|
666
|
|
||
Total assets
|
|
$
|
50,484
|
|
|
$
|
57,788
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
||||
Current liabilities:
|
|
|
|
|
||||
Accounts payable
|
|
$
|
9,065
|
|
|
$
|
6,303
|
|
Accrued liabilities:
|
|
|
|
|
||||
Employee compensation
|
|
1,487
|
|
|
1,390
|
|
||
Income taxes payable
|
|
73
|
|
|
—
|
|
||
Other accrued liabilities
|
|
5,098
|
|
|
6,357
|
|
||
Total current liabilities
|
|
15,723
|
|
|
14,050
|
|
||
Other liabilities
|
|
420
|
|
|
346
|
|
||
Total liabilities
|
|
16,143
|
|
|
14,396
|
|
||
COMMITMENTS AND CONTINGENCIES (Note 9)
|
|
|
|
|
||||
Stockholders’ equity:
|
|
|
|
|
||||
Common stock, $.01 par value, 40,000,000 shares authorized, 24,777,001 and 23,800,924 shares issued, and 24,132,910 and 23,446,035 outstanding in 2017 and 2016, respectively
|
|
248
|
|
|
238
|
|
||
Additional paid-in capital
|
|
138,760
|
|
|
137,380
|
|
||
Accumulated deficit
|
|
(102,503
|
)
|
|
(91,520
|
)
|
||
Accumulated other comprehensive loss
|
|
(768
|
)
|
|
(1,568
|
)
|
||
Nil coupon perpetual loan notes
|
|
76
|
|
|
76
|
|
||
Treasury stock, 644,091 and 354,889 shares in 2017 and 2016, respectively, at cost
|
|
(1,472
|
)
|
|
(1,214
|
)
|
||
Total stockholders’ equity
|
|
34,341
|
|
|
43,392
|
|
||
Total liabilities and stockholders’ equity
|
|
$
|
50,484
|
|
|
$
|
57,788
|
|
|
|
|
|
|
|
|
For the years ended December 31,
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
Revenues
|
|
$
|
45,166
|
|
|
$
|
55,161
|
|
|
$
|
73,664
|
|
Costs and expenses:
|
|
|
|
|
|
|
||||||
Cost of sales
|
|
27,144
|
|
|
36,367
|
|
|
45,107
|
|
|||
Selling, general and administrative
|
|
20,933
|
|
|
25,564
|
|
|
30,897
|
|
|||
Restructuring charge
|
|
119
|
|
|
1,428
|
|
|
219
|
|
|||
Research and development
|
|
1,070
|
|
|
1,752
|
|
|
1,447
|
|
|||
Building and intangible assets impairment
|
|
2,965
|
|
|
2,074
|
|
|
1,425
|
|
|||
Total Costs and Expenses
|
|
52,231
|
|
|
67,185
|
|
|
79,095
|
|
|||
Operating loss from continuing operations
|
|
(7,065
|
)
|
|
(12,024
|
)
|
|
(5,431
|
)
|
|||
Interest expense
|
|
—
|
|
|
—
|
|
|
(27
|
)
|
|||
Interest income
|
|
10
|
|
|
25
|
|
|
21
|
|
|||
Other expense
|
|
(60
|
)
|
|
(925
|
)
|
|
(360
|
)
|
|||
Loss from continuing operations before income taxes
|
|
(7,115
|
)
|
|
(12,924
|
)
|
|
(5,797
|
)
|
|||
Income tax benefit (expense)
|
|
46
|
|
|
(1,664
|
)
|
|
(3,757
|
)
|
|||
Net loss from continuing operations
|
|
(7,069
|
)
|
|
(14,588
|
)
|
|
(9,554
|
)
|
|||
Loss from discontinued operations (net of income tax benefit of $0 in 2017, 2016 and 2015)
|
|
(3,914
|
)
|
|
(2,800
|
)
|
|
(2,826
|
)
|
|||
Net loss
|
|
$
|
(10,983
|
)
|
|
$
|
(17,388
|
)
|
|
$
|
(12,380
|
)
|
Net loss per common share:
|
|
|
|
|
|
|
||||||
Basic
|
|
|
|
|
|
|
||||||
Continuing operations
|
|
$
|
(0.30
|
)
|
|
$
|
(0.62
|
)
|
|
$
|
(0.42
|
)
|
Discontinued operations
|
|
(0.16
|
)
|
|
(0.12
|
)
|
|
(0.12
|
)
|
|||
Basic net loss per common share
|
|
(0.46
|
)
|
|
(0.74
|
)
|
|
(0.54
|
)
|
|||
Diluted
|
|
|
|
|
|
|
||||||
Continuing operations
|
|
(0.30
|
)
|
|
(0.62
|
)
|
|
$
|
(0.42
|
)
|
||
Discontinued operations
|
|
(0.16
|
)
|
|
(0.12
|
)
|
|
(0.12
|
)
|
|||
Diluted net loss per common share
|
|
(0.46
|
)
|
|
(0.74
|
)
|
|
(0.54
|
)
|
|||
Weighted-average number of common shares outstanding:
|
|
|
|
|
|
|
||||||
Basic
|
|
23,872,000
|
|
|
23,365,000
|
|
|
23,101,000
|
|
|||
Diluted
|
|
23,872,000
|
|
|
23,365,000
|
|
|
23,101,000
|
|
|
|
For the years ended December 31,
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
Net (loss)
|
|
$
|
(10,983
|
)
|
|
$
|
(17,388
|
)
|
|
$
|
(12,380
|
)
|
Other comprehensive (loss):
|
|
|
|
|
|
|
||||||
Foreign currency translation adjustments
|
|
802
|
|
|
(6
|
)
|
|
(1,097
|
)
|
|||
Unrealized (losses)/gains from marketable securities, net of tax
|
|
(2
|
)
|
|
(6
|
)
|
|
(11
|
)
|
|||
Total other comprehensive income (loss)
|
|
800
|
|
|
(12
|
)
|
|
(1,108
|
)
|
|||
Comprehensive (loss)
|
|
$
|
(10,183
|
)
|
|
$
|
(17,400
|
)
|
|
$
|
(13,488
|
)
|
|
|
Common Stock
|
|
Additional
Paid-in Capital |
|
Accumulated Deficit
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
|
Nil
Coupon
Perpetual Loan Notes
|
|
Treasury Stock
|
|
Total
|
|||||||||||||||||
|
|
Shares
|
|
Amount
|
|
|
|
|
|
|
|||||||||||||||||||||
Balance at December 31, 2014
|
|
22,860
|
|
|
$
|
230
|
|
|
$
|
134,985
|
|
|
$
|
(61,752
|
)
|
|
$
|
(448
|
)
|
|
$
|
76
|
|
|
$
|
(790
|
)
|
|
$
|
72,301
|
|
Net loss
|
|
|
|
|
|
|
|
(12,380
|
)
|
|
|
|
|
|
|
|
(12,380
|
)
|
|||||||||||||
Foreign currency translation adjustments
|
|
|
|
|
|
|
|
|
|
(1,097
|
)
|
|
|
|
|
|
(1,097
|
)
|
|||||||||||||
Unrealized loss on marketable securities, net of tax
|
|
|
|
|
|
|
|
|
|
(11
|
)
|
|
|
|
|
|
(11
|
)
|
|||||||||||||
Stock compensation expense
|
|
|
|
|
|
1,809
|
|
|
|
|
|
|
|
|
|
|
1,809
|
|
|||||||||||||
Issuance of Deferred Director's shares
|
|
39
|
|
|
1
|
|
|
(71
|
)
|
|
|
|
|
|
|
|
|
|
(70
|
)
|
|||||||||||
Tax effect of expired vested options
|
|
|
|
|
|
(908
|
)
|
|
|
|
|
|
`
|
|
|
|
(908
|
)
|
|||||||||||||
Common shares issued upon vesting of restricted stock units
|
|
352
|
|
|
3
|
|
|
(421
|
)
|
|
|
|
|
|
|
|
|
|
(418
|
)
|
|||||||||||
Treasury shares withheld
|
|
(84
|
)
|
|
|
|
|
|
|
|
|
|
|
|
(252
|
)
|
|
(252
|
)
|
||||||||||||
Balance at December 31, 2015
|
|
23,167
|
|
|
$
|
234
|
|
|
$
|
135,394
|
|
|
$
|
(74,132
|
)
|
|
$
|
(1,556
|
)
|
|
$
|
76
|
|
|
$
|
(1,042
|
)
|
|
$
|
58,974
|
|
Net loss
|
|
|
|
|
|
|
|
(17,388
|
)
|
|
|
|
|
|
|
|
(17,388
|
)
|
|||||||||||||
Foreign currency translation adjustments
|
|
|
|
|
|
|
|
|
|
(6
|
)
|
|
|
|
|
|
(6
|
)
|
|||||||||||||
Unrealized loss on marketable securities, net of tax
|
|
|
|
|
|
|
|
|
|
(6
|
)
|
|
|
|
|
|
(6
|
)
|
|||||||||||||
Stock compensation expense
|
|
|
|
|
|
1,991
|
|
|
|
|
|
|
|
|
|
|
1,991
|
|
|||||||||||||
Common shares issued upon vesting of restricted stock units
|
|
382
|
|
|
4
|
|
|
(5
|
)
|
|
|
|
|
|
|
|
|
|
(1
|
)
|
|||||||||||
Treasury shares withheld
|
|
(103
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
(172
|
)
|
|
(172
|
)
|
|||||||||||
Balance at December 31, 2016
|
|
23,446
|
|
|
$
|
238
|
|
|
$
|
137,380
|
|
|
$
|
(91,520
|
)
|
|
$
|
(1,568
|
)
|
|
$
|
76
|
|
|
$
|
(1,214
|
)
|
|
$
|
43,392
|
|
Net loss
|
|
|
|
|
|
|
|
(10,983
|
)
|
|
|
|
|
|
|
|
(10,983
|
)
|
|||||||||||||
Foreign currency translation adjustments
|
|
|
|
|
|
|
|
|
|
802
|
|
|
|
|
|
|
802
|
|
|||||||||||||
Unrealized loss on marketable securities, net of tax
|
|
|
|
|
|
|
|
|
|
(2
|
)
|
|
|
|
|
|
(2
|
)
|
|||||||||||||
Stock compensation expense
|
|
|
|
|
|
1,389
|
|
|
|
|
|
|
|
|
|
|
1,389
|
|
|||||||||||||
Common shares issued upon vesting of restricted stock units
|
|
976
|
|
|
10
|
|
|
(9
|
)
|
|
|
|
|
|
|
|
|
|
1
|
|
|||||||||||
Treasury shares withheld
|
|
(289
|
)
|
|
|
|
|
|
|
|
|
|
|
|
(258
|
)
|
|
(258
|
)
|
||||||||||||
Balance at December 31, 2017
|
|
24,133
|
|
|
$
|
248
|
|
|
$
|
138,760
|
|
|
$
|
(102,503
|
)
|
|
$
|
(768
|
)
|
|
$
|
76
|
|
|
$
|
(1,472
|
)
|
|
$
|
34,341
|
|
|
|
For the years ended December 31,
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
OPERATING ACTIVITIES
|
|
|
|
|
|
|
||||||
Net loss
|
|
$
|
(10,983
|
)
|
|
$
|
(17,388
|
)
|
|
$
|
(12,380
|
)
|
Loss from discontinued operations
|
|
3,914
|
|
|
2,800
|
|
|
2,826
|
|
|||
Net loss from continuing operations
|
|
(7,069
|
)
|
|
(14,588
|
)
|
|
(9,554
|
)
|
|||
Adjustments to reconcile net loss to net cash used in (provided by) operating activities:
|
|
|
|
|
|
|
||||||
Depreciation
|
|
1,312
|
|
|
1,780
|
|
|
2,067
|
|
|||
Amortization
|
|
215
|
|
|
1,118
|
|
|
1,536
|
|
|||
Loss (gain) on disposal of equipment
|
|
304
|
|
|
60
|
|
|
(26
|
)
|
|||
Provision for doubtful accounts, net
|
|
—
|
|
|
(111
|
)
|
|
—
|
|
|||
Deferred income taxes
|
|
—
|
|
|
1,196
|
|
|
4,916
|
|
|||
Stock compensation expense, net of forfeitures
|
|
1,389
|
|
|
1,991
|
|
|
1,809
|
|
|||
Building and intangible assets impairment
|
|
2,965
|
|
|
2,074
|
|
|
1,425
|
|
|||
Excess and obsolete inventory provision
|
|
228
|
|
|
825
|
|
|
—
|
|
|||
Changes in operating assets and liabilities, net of acquisitions:
|
|
|
|
|
|
|
||||||
Accounts receivable
|
|
113
|
|
|
3,522
|
|
|
7,880
|
|
|||
Inventories
|
|
(134
|
)
|
|
446
|
|
|
(560
|
)
|
|||
Prepaid expenses, other current assets and other noncurrent assets
|
|
(1,084
|
)
|
|
2,893
|
|
|
(1,245
|
)
|
|||
Accounts payable
|
|
2,500
|
|
|
(2,445
|
)
|
|
1,817
|
|
|||
Accrued liabilities and other noncurrent liabilities
|
|
(2,439
|
)
|
|
699
|
|
|
(913
|
)
|
|||
Net cash (used in) provided by operating activities - continuing operations
|
|
(1,700
|
)
|
|
(540
|
)
|
|
9,152
|
|
|||
Net cash used in operating activities - discontinued operations
|
|
(1,868
|
)
|
|
(2,198
|
)
|
|
(2,224
|
)
|
|||
Net cash (used in) provided by operating activities
|
|
(3,568
|
)
|
|
(2,738
|
)
|
|
6,928
|
|
|||
|
|
|
|
|
|
|
||||||
INVESTING ACTIVITIES
|
|
|
|
|
|
|
||||||
Purchases of property, equipment and patents
|
|
(492
|
)
|
|
(940
|
)
|
|
(802
|
)
|
|||
Proceeds from the sale of equipment
|
|
2
|
|
|
2
|
|
|
26
|
|
|||
Net cash used in investing activities
|
|
(490
|
)
|
|
(938
|
)
|
|
(776
|
)
|
|||
|
|
|
|
|
|
|
||||||
FINANCING ACTIVITIES
|
|
|
|
|
|
|
||||||
Payments on short-term borrowings
|
|
—
|
|
|
—
|
|
|
(1,623
|
)
|
|||
Change in restricted cash
|
|
—
|
|
|
(6,020
|
)
|
|
—
|
|
|||
Treasury shares withheld
|
|
(258
|
)
|
|
(172
|
)
|
|
(252
|
)
|
|||
Net cash used in financing activities
|
|
(258
|
)
|
|
(6,192
|
)
|
|
(1,875
|
)
|
|||
Effect of exchange rate fluctuations on cash
|
|
856
|
|
|
10
|
|
|
(1,230
|
)
|
|||
Net (decrease) increase in cash and cash equivalents
|
|
(3,460
|
)
|
|
(9,858
|
)
|
|
3,047
|
|
|||
Cash and cash equivalents at beginning of year
|
|
11,826
|
|
|
21,684
|
|
|
18,637
|
|
|||
Cash and cash equivalents at end of year
|
|
$
|
8,366
|
|
|
$
|
11,826
|
|
|
$
|
21,684
|
|
|
|
|
|
|
|
|
||||||
Supplemental Cash Flow Information:
|
|
|
|
|
|
|
||||||
Cash paid for:
|
|
|
|
|
|
|
||||||
Interest
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
27
|
|
Income taxes paid
|
|
$
|
31
|
|
|
$
|
368
|
|
|
$
|
—
|
|
Year
|
|
Balance at
January 1
|
|
Provision charged
to expense
|
|
Write-offs /
Recoveries
|
|
Balance at
December 31
|
||||||||
2015
|
|
$
|
1,922
|
|
|
$
|
—
|
|
|
$
|
(150
|
)
|
|
$
|
1,772
|
|
2016
|
|
$
|
1,772
|
|
|
$
|
172
|
|
|
$
|
(375
|
)
|
|
$
|
1,569
|
|
2017
|
|
$
|
1,569
|
|
|
$
|
—
|
|
|
$
|
(24
|
)
|
|
$
|
1,545
|
|
Year
|
|
Balance at
January 1
|
|
Provision charged
to expense
|
|
Write-offs /
Recoveries
|
|
Balance at
December 31
|
||||||||
2016
|
|
$
|
—
|
|
|
$
|
825
|
|
|
$
|
—
|
|
|
$
|
825
|
|
2017
|
|
$
|
825
|
|
|
$
|
228
|
|
|
|
|
$
|
1,053
|
|
|
|
December 31,
|
||||||
|
|
2017
|
|
2016
|
||||
Foreign currency translation
|
|
|
|
|
||||
Balance at beginning of period
|
|
$
|
(1,574
|
)
|
|
$
|
(1,568
|
)
|
Other comprehensive (loss):
|
|
|
|
|
||||
Foreign currency translation adjustments (1)
|
|
802
|
|
|
(6
|
)
|
||
Balance at end of period
|
|
$
|
(772
|
)
|
|
$
|
(1,574
|
)
|
Available-for-sale marketable securities
|
|
|
|
|
||||
Balance at beginning of period
|
|
$
|
6
|
|
|
$
|
12
|
|
Other comprehensive (loss):
|
|
|
|
|
||||
Net unrealized holding (loss) (2)
|
|
(2
|
)
|
|
(6
|
)
|
||
Balance at end of period
|
|
$
|
4
|
|
|
$
|
6
|
|
Total accumulated other comprehensive (loss)
|
|
$
|
(768
|
)
|
|
$
|
(1,568
|
)
|
(1)
|
In all periods presented, there were no tax impacts related to rate changes and no amounts were reclassified to earnings.
|
(2)
|
In all periods presented, there were no realized holding gains or losses and therefore no amounts were reclassified to earnings.
|
|
|
|
|
2017
|
|
2016
|
||||||||||||||||||||
Description of Other Intangibles
|
|
Amortization
Period
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
Carrying
Amount
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
Carrying
Amount
|
||||||||||||
Customer relationships
|
|
11-15 years
|
|
$
|
1,198
|
|
|
$
|
(1,138
|
)
|
|
$
|
60
|
|
|
$
|
3,119
|
|
|
$
|
(2,979
|
)
|
|
$
|
140
|
|
Patent assets
|
|
1- 20 years
|
|
2,412
|
|
|
(801
|
)
|
|
1,611
|
|
|
3,100
|
|
|
(1,444
|
)
|
|
1,656
|
|
||||||
Total
|
|
|
|
$
|
3,610
|
|
|
$
|
(1,939
|
)
|
|
$
|
1,671
|
|
|
$
|
6,219
|
|
|
$
|
(4,423
|
)
|
|
$
|
1,796
|
|
Year
|
Estimated
Amortization
Expense
|
||
2018
|
$
|
198
|
|
2019
|
138
|
|
|
2020
|
138
|
|
|
2021
|
138
|
|
|
2022
|
138
|
|
|
Thereafter
|
921
|
|
|
Total
|
$
|
1,671
|
|
Description of Property and Equipment
|
|
Depreciable
Life
|
|
2017
|
|
2016
|
||||
Land
|
|
|
|
$
|
1,050
|
|
|
$
|
1,440
|
|
Building
|
|
39 years
|
|
3,950
|
|
|
4,535
|
|
||
Building and leasehold improvements
|
|
3-39 years
|
|
3,264
|
|
|
5,087
|
|
||
Field equipment
|
|
3-4 years
|
|
19,251
|
|
|
19,467
|
|
||
Computer equipment and software
|
|
2-3 years
|
|
3,124
|
|
|
2,973
|
|
||
Furniture and fixtures
|
|
3-10 years
|
|
1,539
|
|
|
1,521
|
|
||
Vehicles
|
|
5 years
|
|
32
|
|
|
36
|
|
||
Total cost
|
|
|
|
32,210
|
|
|
35,059
|
|
||
Less accumulated depreciation
|
|
|
|
(25,938
|
)
|
|
(24,542
|
)
|
||
Total net book value
|
|
|
|
$
|
6,272
|
|
|
$
|
10,517
|
|
|
|
2017
|
|
2016
|
|
2015
|
|||
Basic weighted-average shares
|
|
23,872,000
|
|
|
23,365,000
|
|
|
23,101,000
|
|
Conversion of unsecured loan notes
|
|
—
|
|
|
—
|
|
|
—
|
|
Unexercised options and unvested restricted stock units
|
|
—
|
|
|
—
|
|
|
—
|
|
Diluted weighted-average shares
|
|
23,872,000
|
|
|
23,365,000
|
|
|
23,101,000
|
|
|
|
2017
|
|
2016
|
||||
Costs incurred on uncompleted contracts
|
|
$
|
101,600
|
|
|
$
|
111,925
|
|
Estimated earnings
|
|
49,561
|
|
|
55,527
|
|
||
Earned revenue
|
|
151,161
|
|
|
167,452
|
|
||
Less billings to date
|
|
(145,670
|
)
|
|
(162,427
|
)
|
||
Total
|
|
$
|
5,491
|
|
|
$
|
5,025
|
|
Classified as follows:
|
|
|
|
|
||||
Costs and estimated earnings in excess of billings on uncompleted contracts
|
|
$
|
7,894
|
|
|
$
|
6,755
|
|
Billings in excess of costs and estimated earnings on uncompleted contracts
|
|
(2,403
|
)
|
|
(1,730
|
)
|
||
Total
|
|
$
|
5,491
|
|
|
$
|
5,025
|
|
Origin of income before taxes
|
|
2017
|
|
2016
|
|
2015
|
||||||
United States
|
|
$
|
(9,821
|
)
|
|
$
|
(13,016
|
)
|
|
$
|
(9,763
|
)
|
Foreign
|
|
(1,208
|
)
|
|
(2,708
|
)
|
|
1,140
|
|
|||
(Loss) before income taxes
|
|
$
|
(11,029
|
)
|
|
$
|
(15,724
|
)
|
|
$
|
(8,623
|
)
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
Current:
|
|
|
|
|
|
|
||||||
Federal
|
|
$
|
111
|
|
|
$
|
(357
|
)
|
|
$
|
1,155
|
|
State
|
|
—
|
|
|
—
|
|
|
(14
|
)
|
|||
Foreign
|
|
(65
|
)
|
|
(105
|
)
|
|
(120
|
)
|
|||
Total current
|
|
46
|
|
|
(462
|
)
|
|
1,021
|
|
|||
Deferred:
|
|
|
|
|
|
|
||||||
Federal
|
|
—
|
|
|
—
|
|
|
(4,143
|
)
|
|||
State
|
|
—
|
|
|
—
|
|
|
(548
|
)
|
|||
Foreign
|
|
—
|
|
|
(1,202
|
)
|
|
(87
|
)
|
|||
Total deferred
|
|
—
|
|
|
(1,202
|
)
|
|
(4,778
|
)
|
|||
Income tax benefit (expense)
|
|
$
|
46
|
|
|
$
|
(1,664
|
)
|
|
$
|
(3,757
|
)
|
|
|
2017
|
|
2016
|
|
2015
|
|||
Provision at the U.S. federal statutory rate
|
|
34.0
|
%
|
|
34.0
|
%
|
|
34.0
|
%
|
State taxes, net of federal benefit
|
|
—
|
%
|
|
2.4
|
%
|
|
5.2
|
%
|
Foreign tax rate differential
|
|
(0.2
|
)%
|
|
—
|
%
|
|
0.6
|
%
|
Valuation allowance
|
|
10.2
|
%
|
|
(42.7
|
)%
|
|
(72.3
|
)%
|
Federal tax rate change
|
|
(43.9
|
)%
|
|
—
|
%
|
|
—
|
%
|
Other true up
|
|
—
|
%
|
|
(0.6
|
)%
|
|
(7.8
|
)%
|
Intangible assets impairment and other non-deductibles
|
|
(1.8
|
)%
|
|
—
|
%
|
|
(2.2
|
)%
|
Other
|
|
2.1
|
%
|
|
(4.1
|
)%
|
|
(1.1
|
)%
|
Income tax benefit (expense) effective rate
|
|
0.4
|
%
|
|
(11.0
|
)%
|
|
(43.6
|
)%
|
|
|
2017
|
|
2016
|
||||
Deferred tax assets:
|
|
|
|
|
||||
Stock compensation expense
|
|
$
|
1,814
|
|
|
$
|
2,624
|
|
Goodwill
|
|
2,366
|
|
|
2,235
|
|
||
Royalty accruals
|
|
443
|
|
|
353
|
|
||
Intangible assets
|
|
—
|
|
|
967
|
|
||
Bad debt allowance
|
|
360
|
|
|
389
|
|
||
Inter-company interest expense accrual
|
|
496
|
|
|
629
|
|
||
Net operating loss carryforwards
|
|
5,253
|
|
|
5,485
|
|
||
Credit carry-forwards
|
|
694
|
|
|
584
|
|
||
Inventory reserve
|
|
254
|
|
|
318
|
|
||
Depreciation
|
|
555
|
|
|
—
|
|
||
Other
|
|
362
|
|
|
399
|
|
||
Total deferred tax assets
|
|
12,597
|
|
|
13,983
|
|
||
Deferred tax liabilities:
|
|
|
|
|
||||
Depreciation
|
|
—
|
|
|
(460
|
)
|
||
Intangible assets
|
|
(386
|
)
|
|
—
|
|
||
Other
|
|
(146
|
)
|
|
(344
|
)
|
||
Total deferred tax liabilities
|
|
(532
|
)
|
|
(804
|
)
|
||
Net deferred tax asset before valuation allowance
|
|
12,065
|
|
|
13,179
|
|
||
Valuation allowances for deferred tax assets
|
|
(12,065
|
)
|
|
(13,179
|
)
|
||
Net deferred tax asset
|
|
$
|
—
|
|
|
$
|
—
|
|
Year
|
|
Balance at
January 1
|
|
Charged to costs
and expenses
|
|
(Deductions)/Other
|
|
Balance at
December 31
|
||||||
2015
|
|
$
|
2,006
|
|
|
6,625
|
|
|
(799
|
)
|
|
$
|
7,832
|
|
2016
|
|
$
|
7,832
|
|
|
5,347
|
|
|
—
|
|
|
$
|
13,179
|
|
2017
|
|
$
|
13,179
|
|
|
(1,114
|
)
|
|
—
|
|
|
$
|
12,065
|
|
Description
|
|
2017
|
|
2016
|
|
2015
|
||||||
Balance at beginning of period
|
|
$
|
—
|
|
|
$
|
140
|
|
|
$
|
117
|
|
Increases in positions taken in a current period
|
|
—
|
|
|
—
|
|
|
38
|
|
|||
Decreases due to settlements
|
|
—
|
|
|
(140
|
)
|
|
(15
|
)
|
|||
Balance at end of period
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
140
|
|
|
|
For the Year Ended December 31,
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
Stock options
|
|
$
|
120
|
|
|
$
|
90
|
|
|
$
|
194
|
|
Restricted stock units
|
|
1,269
|
|
|
1,901
|
|
|
1,615
|
|
|||
Total stock-based compensation expense
|
|
1,389
|
|
|
1,991
|
|
|
1,809
|
|
|||
Tax benefit of stock-based compensation expense
|
|
—
|
|
|
—
|
|
|
(696
|
)
|
|||
After-tax effect of stock based compensation
|
|
$
|
1,389
|
|
|
$
|
1,991
|
|
|
$
|
1,113
|
|
|
|
2017
|
|
2016
|
|
2015
|
|||
Expected dividend yield
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
Risk-free interest rate
|
|
2.33
|
%
|
|
1.85
|
%
|
|
2.21
|
%
|
Expected volatility
|
|
61.2
|
%
|
|
62.3
|
%
|
|
51.6
|
%
|
Expected life of option
|
|
10.0 years
|
|
|
8.8 years
|
|
|
8.8 years
|
|
|
|
2017
|
|
2016
|
|
2015
|
|||||||||||||||
|
|
Number
of
Options
|
|
Weighted-
Average
Exercise Price
|
|
Number
of
Options
|
|
Weighted-
Average
Exercise Price
|
|
Number
of
Options
|
|
Weighted-
Average
Exercise Price
|
|||||||||
Outstanding at beginning of year
|
|
1,039,750
|
|
|
$
|
8.39
|
|
|
1,191,125
|
|
|
$
|
10.48
|
|
|
1,546,500
|
|
|
$
|
11.62
|
|
Granted
|
|
176,000
|
|
|
0.96
|
|
|
81,000
|
|
|
1.58
|
|
|
126,000
|
|
|
2.44
|
|
|||
Exercised
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Expired or forfeited
|
|
(99,000
|
)
|
|
18.32
|
|
|
(232,375
|
)
|
|
16.72
|
|
|
(481,375
|
)
|
|
12.04
|
|
|||
Outstanding at end of year
|
|
1,116,750
|
|
|
$
|
6.34
|
|
|
1,039,750
|
|
|
$
|
8.39
|
|
|
1,191,125
|
|
|
$
|
10.48
|
|
Exercisable at end of year
|
|
1,116,750
|
|
|
$
|
6.34
|
|
|
1,039,750
|
|
|
$
|
8.39
|
|
|
1,191,125
|
|
|
$
|
10.48
|
|
Weighted-average fair value of options granted during the year
|
|
|
|
$
|
0.68
|
|
|
|
|
$
|
1.11
|
|
|
|
|
$
|
1.54
|
|
|
|
Number
of
Options
|
|
Weighted-
Average
Exercise Price
|
|
Weighted-
Average
Remaining
Contractual
Life
|
|
Aggregate
Intrinsic Value
|
|||||
Outstanding on January 1, 2017
|
|
1,039,750
|
|
|
$
|
8.39
|
|
|
|
|
|
||
Granted
|
|
176,000
|
|
|
0.96
|
|
|
|
|
|
|||
Exercised
|
|
—
|
|
|
—
|
|
|
|
|
|
|||
Expired or forfeited
|
|
(99,000
|
)
|
|
18.32
|
|
|
|
|
|
|||
Outstanding on December 31, 2017
|
|
1,116,750
|
|
|
$
|
6.34
|
|
|
4.8 years
|
|
$
|
27,280
|
|
Exercisable on December 31, 2017
|
|
1,116,750
|
|
|
$
|
6.34
|
|
|
4.8 years
|
|
$
|
27,280
|
|
Options Outstanding
|
|
Options Exercisable
|
||||||||||||||
Range of
Exercise Prices
|
|
Number of
Options
|
|
Weighted-
Average
Remaining
Contractual Life
|
|
Weighted-
Average
Exercise Price
|
|
Number of
Options
|
|
Weighted-
Average
Exercise Price
|
||||||
$ 0.96 - $6.58
|
|
707,500
|
|
|
6.9 years
|
|
$
|
3.02
|
|
|
707,500
|
|
|
$
|
3.02
|
|
$ 6.59 - $11.59
|
|
319,250
|
|
|
1.6 years
|
|
9.68
|
|
|
319,250
|
|
|
9.68
|
|
||
$11.60 - $16.60
|
|
20,000
|
|
|
0.6 years
|
|
15.42
|
|
|
20,000
|
|
|
15.42
|
|
||
$16.61 - $21.70
|
|
15,000
|
|
|
0.2 years
|
|
17.82
|
|
|
15,000
|
|
|
17.82
|
|
||
$21.71 - $26.80
|
|
55,000
|
|
|
0.4 years
|
|
23.15
|
|
|
55,000
|
|
|
23.15
|
|
||
$ 0.96 - $26.80
|
|
1,116,750
|
|
|
4.8 years
|
|
$
|
6.34
|
|
|
1,116,750
|
|
|
$
|
6.34
|
|
|
|
Non-Vested Stock
Options
Outstanding
|
|
Weighted-Average
Grant Date
Fair Value
|
|||
Outstanding on January 1, 2017
|
|
—
|
|
|
$
|
—
|
|
Granted
|
|
176,000
|
|
|
0.68
|
|
|
Vested
|
|
(176,000
|
)
|
|
0.68
|
|
|
Forfeited
|
|
—
|
|
|
—
|
|
|
Outstanding on December 31, 2017
|
|
—
|
|
|
—
|
|
•
|
The first type of award is based on individual performance during the respective calendar year as determined by the Committee based on performance criteria specified in the Agreement. These awards will vest over a
three
-year period beginning on the Determination Date. We estimated the fair value of these performance-based RSU awards on the date of the Agreement using the trading price of the Company’s stock and our estimate of the probability that the specified performance criteria will be met. The fair value measurement and probability estimate will be re-measured each reporting date until the Determination Date, at which time the final award amount will be known. For these job performance-based awards, we amortize compensation costs over the requisite service period, adjusted for estimated forfeitures, for each separately vesting tranche of the award.
|
•
|
The second type of RSU award contains a targeted number of RSUs to be granted based on our revenue growth relative to a specified peer group during a period of
two
calendar years. These awards vest
67%
on the second anniversary of the Agreement date and
33%
on the third anniversary of the Agreement date. We estimated the fair value of these performance-based RSU awards on the Agreement date using the trading price of the Company’s stock and our estimate of the probability that the specified performance criteria will be met. For these revenue growth performance-based awards, we amortize compensation costs over the requisite service period, adjusted for estimated forfeitures, for each separately vesting tranche of the award.
|
•
|
The third type of RSU award contains a targeted number of RSUs to be granted based on the total shareholder return (TSR) of our Common Shares relative to a specified peer group during a period of
two
calendar years. These awards vest
67%
on the second anniversary of the Agreement date and
33%
on the third anniversary of the Agreement date. We estimated the fair value of these market-based RSU awards on the Agreement date using a Monte Carlo valuation methodology and amortize the fair value over the requisite service period for each separately vesting tranche of the award. The principal variable assumptions utilized in valuing these RSUs under this valuation methodology include the risk-free interest rate, stock volatility and correlations between our stock price and the stock prices of the peer group of companies.
|
|
|
Shares
|
|
Weighted Average
Grant Date
Fair Value
|
||
Unvested restricted units at January 1, 2015
|
|
977,069
|
|
|
5.36
|
|
Granted
|
|
789,500
|
|
|
3.33
|
|
Forfeited
|
|
(209,748
|
)
|
|
4.62
|
|
Vested
|
|
(351,938
|
)
|
|
5.17
|
|
Unvested restricted stock units at December 31, 2015
|
|
1,204,883
|
|
|
4.21
|
|
Granted
|
|
845,862
|
|
|
1.88
|
|
Forfeited
|
|
(205,033
|
)
|
|
4.25
|
|
Vested
|
|
(381,916
|
)
|
|
4.36
|
|
Unvested restricted stock units at December 31, 2016
|
|
1,463,796
|
|
|
2.82
|
|
Granted
|
|
1,090,000
|
|
|
0.97
|
|
Forfeited
|
|
(213,001
|
)
|
|
2.99
|
|
Vested (1)
|
|
(981,633
|
)
|
|
2.85
|
|
Unvested restricted stock units at December 31, 2017
|
|
1,359,162
|
|
|
1.28
|
|
Year of Payment
|
Amount
|
||
2018
|
$
|
749
|
|
2019
|
713
|
|
|
2020
|
202
|
|
|
Total
|
$
|
1,664
|
|
Year of Payment
|
Amount
|
||
2018
|
$
|
155
|
|
2019
|
155
|
|
|
Total
|
$
|
310
|
|
•
|
The Stamford, Connecticut building lease, for approximately
6,440
square feet, runs from February 1, 2010 to December 31, 2019. The facility houses certain administrative functions.
|
•
|
The Beijing, China building lease, for approximately
9,000
square feet, runs from June 1, 2017 to May 31, 2020. This facility serves as the operating headquarters for our Beijing Fuel Tech operation.
|
•
|
The Durham, North Carolina building lease, for approximately
2,590
square feet, runs from July 1, 2016 to July 31, 2019. This facility houses engineering operations.
|
•
|
The Gallarate, Italy building lease, for approximately
1,636
square feet, runs from May 1, 2013 to April 30, 2019. This facility serves as the operating headquarters for our European operations.
|
•
|
The Westlake, Ohio building lease, for approximately
3,000
square feet, runs from May 1, 2017 to April 30, 2020. This facility houses engineering operations.
|
•
|
The Aurora, IL warehouse lease, for approximately
11,000
square feet, runs from September 1, 2013 to December 31, 2020. This facility serves as an outside warehouse facility.
|
•
|
The Overland Park, KS lease, for approximately
600
square feet, runs from October 16, 2015 to October 15, 2018. This facility serves primarily as a sales office.
|
•
|
in support of the warranty period defined in the contract; or
|
•
|
in support of the system performance criteria that are defined in the contract.
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
Aggregate product warranty liability at beginning of year
|
|
$
|
159
|
|
|
$
|
268
|
|
|
$
|
268
|
|
Net aggregate expense (income) related to product warranties
|
|
—
|
|
|
(109
|
)
|
|
8
|
|
|||
Aggregate reductions for payments
|
|
—
|
|
|
—
|
|
|
(8
|
)
|
|||
Aggregate product warranty liability at end of year
|
|
$
|
159
|
|
|
$
|
159
|
|
|
$
|
268
|
|
•
|
The Air Pollution Control technology segment includes technologies to reduce NO
x
emissions in flue gas from boilers, incinerators, furnaces and other stationary combustion sources. These include Low and Ultra Low NO
x
Burners (LNB and ULNB), Over-Fire Air (OFA) systems, NO
x
OUT
®
and HERT™ Selective Non-Catalytic Reduction (SNCR) systems, and Advanced Selective Catalytic Reduction (ASCR
™
) systems. Our ASCR systems include ULNB, OFA, and SNCR components, along with a downsized SCR catalyst, Ammonia Injection Grid (AIG), and Graduated Straightening Grid GSG™ systems to provide high NO
x
reductions at significantly lower capital and operating costs than conventional SCR systems. The NO
x
OUT CASCADE
®
and NO
x
OUT-SCR
®
processes are more basic, using just SNCR and SCR catalyst components. ULTRA
®
technology creates ammonia at a plant site using safe urea for use with any SCR application. Flue Gas Conditioning systems are chemical injection systems offered in markets outside the U.S. and Canada to enhance electrostatic precipitator and fabric filter performance in controlling particulate emissions.
|
•
|
The FUEL CHEM
®
technology segment, which uses chemical processes in combination with advanced CFD and CKM boiler modeling, for the control of slagging, fouling, corrosion, opacity and other sulfur trioxide-related issues in furnaces and boilers through the addition of chemicals into the furnace using TIFI
®
Targeted In-Furnace Injection™ technology.
|
For the year ended December 31, 2017
|
|
Air Pollution
Control Segment
|
|
FUEL CHEM
Segment
|
|
Other
|
|
Total
|
||||||||
Revenues from external customers
|
|
$
|
27,808
|
|
|
$
|
17,358
|
|
|
$
|
—
|
|
|
$
|
45,166
|
|
Cost of sales
|
|
(18,478
|
)
|
|
(8,666
|
)
|
|
—
|
|
|
(27,144
|
)
|
||||
Gross margin
|
|
9,330
|
|
|
8,692
|
|
|
—
|
|
|
18,022
|
|
||||
Selling, general and administrative
|
|
—
|
|
|
—
|
|
|
(20,933
|
)
|
|
(20,933
|
)
|
||||
Restructuring charge
|
|
(58
|
)
|
|
(61
|
)
|
|
—
|
|
|
(119
|
)
|
||||
Research and development
|
|
—
|
|
|
—
|
|
|
(1,070
|
)
|
|
(1,070
|
)
|
||||
Building impairment
|
|
—
|
|
|
—
|
|
|
(2,965
|
)
|
|
(2,965
|
)
|
||||
Operating income (loss) from continuing operations
|
|
$
|
9,272
|
|
|
$
|
8,631
|
|
|
$
|
(24,968
|
)
|
|
$
|
(7,065
|
)
|
For the year ended December 31, 2016
|
|
Air Pollution
Control Segment
|
|
FUEL CHEM
Segment
|
|
Other
|
|
Total
|
||||||||
Revenues from external customers
|
|
$
|
34,052
|
|
|
$
|
21,109
|
|
|
$
|
—
|
|
|
$
|
55,161
|
|
Cost of sales
|
|
(25,370
|
)
|
|
(10,997
|
)
|
|
—
|
|
|
(36,367
|
)
|
||||
Gross margin
|
|
8,682
|
|
|
10,112
|
|
|
—
|
|
|
18,794
|
|
||||
Selling, general and administrative
|
|
—
|
|
|
—
|
|
|
(25,564
|
)
|
|
(25,564
|
)
|
||||
Restructuring charge
|
|
(537
|
)
|
|
(891
|
)
|
|
—
|
|
|
(1,428
|
)
|
||||
Research and development
|
|
—
|
|
|
—
|
|
|
(1,752
|
)
|
|
(1,752
|
)
|
||||
Intangible assets impairment
|
|
—
|
|
|
—
|
|
|
(2,074
|
)
|
|
(2,074
|
)
|
||||
Operating income (loss) from continuing operations
|
|
$
|
8,145
|
|
|
$
|
9,221
|
|
|
$
|
(29,390
|
)
|
|
$
|
(12,024
|
)
|
For the year ended December 31, 2015
|
|
Air Pollution
Control Segment
|
|
FUEL CHEM
Segment
|
|
Other
|
|
Total
|
||||||||
Revenues from external customers
|
|
$
|
43,485
|
|
|
$
|
30,179
|
|
|
$
|
—
|
|
|
$
|
73,664
|
|
Cost of sales
|
|
(30,612
|
)
|
|
(14,495
|
)
|
|
—
|
|
|
(45,107
|
)
|
||||
Gross margin
|
|
12,873
|
|
|
15,684
|
|
|
—
|
|
|
28,557
|
|
||||
Selling, general and administrative
|
|
—
|
|
|
—
|
|
|
(30,897
|
)
|
|
(30,897
|
)
|
||||
Restructuring charge
|
|
(149
|
)
|
|
(70
|
)
|
|
—
|
|
|
(219
|
)
|
||||
Research and development
|
|
—
|
|
|
—
|
|
|
(1,447
|
)
|
|
(1,447
|
)
|
||||
Intangible assets impairment
|
|
(1,425
|
)
|
|
—
|
|
|
—
|
|
|
(1,425
|
)
|
||||
Operating income (loss) from continuing operations
|
|
$
|
11,299
|
|
|
$
|
15,614
|
|
|
$
|
(32,344
|
)
|
|
$
|
(5,431
|
)
|
For the years ended December 31,
|
|
2017
|
|
2016
|
|
2015
|
||||||
Revenues:
|
|
|
|
|
|
|
||||||
United States
|
|
$
|
29,510
|
|
|
$
|
42,545
|
|
|
$
|
51,485
|
|
Foreign
|
|
15,656
|
|
|
12,616
|
|
|
22,179
|
|
|||
|
|
$
|
45,166
|
|
|
$
|
55,161
|
|
|
$
|
73,664
|
|
As of December 31,
|
|
2017
|
|
2016
|
||||
Assets:
|
|
|
|
|
||||
United States
|
|
$
|
29,945
|
|
|
$
|
37,684
|
|
Foreign
|
|
20,539
|
|
|
20,104
|
|
||
|
|
$
|
50,484
|
|
|
$
|
57,788
|
|
•
|
Level 1 – Observable inputs to the valuation methodology such as quoted prices in active markets for identical assets or liabilities
|
•
|
Level 2 – Inputs to the valuation methodology including quoted prices for similar assets or liabilities in active markets, quoted prices for identical assets or liabilities in inactive markets, inputs other than quoted prices that are observable for the asset or liability, and inputs that are derived principally from or corroborated by observable market data by correlation or other means
|
•
|
Level 3 – Significant unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own estimates and assumptions or those expected to be used by market participants. Generally, these fair value measures are model-based valuation techniques such as discounted cash flows, option pricing models, and other commonly used valuation techniques
|
|
Level 1
|
Level 2
|
Level 3
|
Impairment Losses
|
Fair Value at December 31, 2017
|
|||||
Building
|
—
|
|
—
|
|
7,965
|
|
(2,965
|
)
|
5,000
|
|
|
—
|
|
—
|
|
7,965
|
|
(2,965
|
)
|
5,000
|
|
|
Level 1
|
Level 2
|
Level 3
|
Impairment Losses
|
Fair Value at December 31, 2016
|
||||||||||
Other intangible assets, net
|
$
|
—
|
|
$
|
—
|
|
$
|
5,525
|
|
$
|
(2,074
|
)
|
$
|
3,451
|
|
|
$
|
—
|
|
$
|
—
|
|
$
|
5,525
|
|
$
|
(2,074
|
)
|
$
|
3,451
|
|
|
Level 1
|
Level 2
|
Level 3
|
Impairment Losses
|
Fair Value at December 31, 2015
|
||||||||||
Other intangible assets, net
|
$
|
—
|
|
$
|
—
|
|
$
|
8,569
|
|
$
|
(1,425
|
)
|
$
|
7,144
|
|
|
$
|
—
|
|
$
|
—
|
|
$
|
8,569
|
|
$
|
(1,425
|
)
|
$
|
7,144
|
|
|
Twelve Months Ended
|
|||||
|
2017
|
2016
|
||||
Restructuring liability at January 1,
|
$
|
309
|
|
$
|
—
|
|
Amounts expensed
|
125
|
|
1,428
|
|
||
Amounts expensed - discontinued operations
|
581
|
|
—
|
|
||
Amounts paid
|
(624
|
)
|
(1,119
|
)
|
||
Restructuring liability at December 31,
|
$
|
391
|
|
$
|
309
|
|
For the quarters ended
|
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
||||||||
2017
|
|
|
|
|
|
|
|
|
||||||||
Revenues
|
|
$
|
8,491
|
|
|
$
|
9,741
|
|
|
$
|
13,548
|
|
|
$
|
13,386
|
|
Cost of sales
|
|
4,769
|
|
|
6,116
|
|
|
8,498
|
|
|
7,761
|
|
||||
Net income (loss) from continuing operations
|
|
(1,776
|
)
|
|
(5,585
|
)
|
|
(178
|
)
|
|
470
|
|
||||
Loss from discontinued operations
|
|
(730
|
)
|
|
(1,269
|
)
|
|
(239
|
)
|
|
(1,676
|
)
|
||||
Net loss
|
|
(2,506
|
)
|
|
(6,854
|
)
|
|
(417
|
)
|
|
(1,206
|
)
|
||||
Basic net income (loss) per common share:
|
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
|
(0.07
|
)
|
|
(0.24
|
)
|
|
(0.01
|
)
|
|
0.02
|
|
||||
Discontinued operations
|
|
(0.03
|
)
|
|
(0.05
|
)
|
|
(0.01
|
)
|
|
(0.07
|
)
|
||||
Basic net income (loss) per common share:
|
|
$
|
(0.10
|
)
|
|
$
|
(0.29
|
)
|
|
$
|
(0.02
|
)
|
|
$
|
(0.05
|
)
|
Diluted net loss per common share:
|
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
|
(0.07
|
)
|
|
(0.24
|
)
|
|
(0.01
|
)
|
|
0.02
|
|
||||
Discontinued operations
|
|
(0.03
|
)
|
|
(0.05
|
)
|
|
(0.01
|
)
|
|
(0.07
|
)
|
||||
Diluted net loss per common share:
|
|
$
|
(0.10
|
)
|
|
$
|
(0.29
|
)
|
|
$
|
(0.02
|
)
|
|
$
|
(0.05
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
2016
|
|
|
|
|
|
|
|
|
||||||||
Revenues
|
|
$
|
17,822
|
|
|
$
|
15,175
|
|
|
$
|
12,596
|
|
|
$
|
9,568
|
|
Cost of sales
|
|
11,774
|
|
|
9,595
|
|
|
7,281
|
|
|
7,717
|
|
||||
Net loss from continuing operations
|
|
(1,950
|
)
|
|
(1,801
|
)
|
|
(2,389
|
)
|
|
(8,448
|
)
|
||||
Loss from discontinued operations
|
|
(687
|
)
|
|
(827
|
)
|
|
(630
|
)
|
|
(656
|
)
|
||||
Net loss
|
|
(2,637
|
)
|
|
(2,628
|
)
|
|
(3,019
|
)
|
|
(9,104
|
)
|
||||
Basic net loss per common share:
|
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
|
(0.08
|
)
|
|
(0.08
|
)
|
|
(0.10
|
)
|
|
(0.36
|
)
|
||||
Discontinued operations
|
|
(0.03
|
)
|
|
(0.03
|
)
|
|
(0.03
|
)
|
|
(0.03
|
)
|
||||
Basic net loss per common share:
|
|
$
|
(0.11
|
)
|
|
$
|
(0.11
|
)
|
|
$
|
(0.13
|
)
|
|
$
|
(0.39
|
)
|
Diluted net loss per common share:
|
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
|
(0.08
|
)
|
|
(0.08
|
)
|
|
(0.10
|
)
|
|
(0.36
|
)
|
||||
Discontinued operations
|
|
(0.03
|
)
|
|
(0.03
|
)
|
|
(0.03
|
)
|
|
(0.03
|
)
|
||||
Diluted net loss per common share:
|
|
$
|
(0.11
|
)
|
|
$
|
(0.11
|
)
|
|
$
|
(0.13
|
)
|
|
$
|
(0.39
|
)
|
•
|
2018 CIP payouts are based on Fuel Tech’s ability to realize Operating Income in fiscal 2018. For purposes of the 2018 CIP, “Operating Income” means Fuel Tech’s operating income before the impact of incentive pay (but including adjustments to reflect the payment of sales commissions). An “Incentive Pool” may be created dependent on Fuel Tech’s obtaining specified levels of Operating Income during the fiscal year. If the Incentive Pool is created, each participant will be awarded his or her designated portion of the Incentive Pool. The simplified focus on Operating Income alone is intended to provide an objective measurement of Fuel Tech’s financial performance, to directly tie any 2018 CIP payout to the overall financial performance of Fuel Tech across all business lines, and thus, align the interests of all 2018 CIP participants with the overall financial performance of Fuel Tech.
|
•
|
No amounts will be payable under the 2018 CIP unless Fuel Tech achieves a minimum of $1 million in Operating Income for fiscal 2018. Accordingly, if Fuel Tech’s financial performance for 2018 falls below $1 million, there will be no payout under the 2018 CIP.
|
•
|
If Fuel Tech generates $1 million of Operating Income in fiscal 2018, the percentage of Operating Income to be funded into the Incentive Pool will equal 50% of the first $2 million of Operating Income, 40% of any incremental Operating Income between $2 million and $3 million, and 20% of any incremental Operating Income over $3 million. For example, if Fuel Tech earned $4.0 million in Operating Income in fiscal 2018, the amount of Operating Income funded into the Incentive Pool would equal $1.6 million, consisting of: (a) 50.0% of the Operating Income up to $2.0 million ($1 million); (b) 40.0% of the next $1.0 million in incremental Operating Income in excess of $2.0 million up to $3.0 million ($400,000), plus (b) 20.0% of the $1.0 million in Operating Income over $3.0 million ($200,000). On the other hand, if Fuel Tech earned $700,000 in Operating Income in fiscal 2018, no amount would be funded into the Incentive Pool because the $1 million payout threshold would not have been met. The aggregate size of the potential Incentive Pool is restricted only by the level of Fuel Tech’s financial performance for fiscal 2018.
|
•
|
The 2018 CIP contemplates that incentive payments to individual employees will be based on the amount of the Incentive Pool; the employee’s 2018 base wages; the employee’s target bonus factor (a percentage assigned to each employee based on such employee’s job level and contribution) and, for all employees below the level of Senior Vice President, the employee’s achievement percentage (an overall job performance multiplier factor that can range from 0% to 100%, and represents the employee’s achievement of individual objectives in 2018).
|
•
|
The target bonus factor for Mr. Arnone under the 2018 CIP is 50%, for Mr. Grigonis 40% and for Mr. Pach, 30%. In addition, the 2018 CIP provides that the achievement percentage assigned to Fuel Tech’s Principal Executive Offer (Mr. Arnone), Principal Financial Officer (Mr. Pach), and any executive or senior vice president (Mr. Grigonis) will automatically equal 100%. Accordingly, for such officers, payments under the 2018 CIP are formulaic, and do not involve the exercise of any discretion by the Board or Committee regarding such officer’s achievement of objectives or any other subjective, qualitative assessments.
|
•
|
The actual amounts of fiscal 2018 cash bonuses earned, if any, for any 2018 Named Executive Officer who is a Participant in the 2018 EOIP will be reported in Fuel Tech’s proxy statement for its 2019 Annual Meeting of Stockholders.
|
•
|
Under the APC Plan, Fuel Tech will pay to its Senior Vice President, Sales a commission equal to a specified percentage of the as-sold contract value of all sales of products and services in Fuel Tech’s APC product line in the United States and Canada.
|
•
|
The FUEL CHEM Plan provides for sales commission payments to be made to Fuel Tech’s Senior Vice President, Sales. Under the FUEL CHEM Plan, Fuel Tech will pay to such officer a commission equal to a specified percentage of all net revenue realized for customer units located in the United States and Canada.
|
Plan Category
|
|
Number of Securities to be issued upon exercise of outstanding options and vesting of restricted stock units
|
|
Weighted-average
exercise price of
outstanding options
|
|
Number of securities remaining available for future issuance under equity compensation plan excluding securities listed in column (a)
|
||||
|
|
(a)
|
|
(b)
|
|
(c)
|
||||
Equity compensation plans approved by security holders (1)
|
|
2,475,912
|
|
|
$
|
6.34
|
|
|
404,941
|
|
(1)
|
Includes Common Shares of Fuel Tech, Inc. authorized for awards under Fuel Tech’s 2014 Long-Term Incentive Plan adopted in May of 2014.
|
(a)
|
(1) Financial Statements
|
|
|
|
|
|
|
Incorporated by Reference
|
|||||||
Exhibit
|
|
Description
|
|
Filed
Herewith
|
|
Form
|
|
Period
ending
|
|
Exhibit
|
|
Filing date
|
|
3.1
|
|
|
|
|
8-K
|
|
|
|
3.2
|
|
|
10/5/2006
|
|
3.2
|
|
|
|
|
8-K
|
|
|
|
3.1
|
|
|
10/5/2006
|
|
3.3
|
|
|
|
|
8-K
|
|
|
|
3.1
|
|
|
6/1/2015
|
|
4.1
|
|
|
|
|
10-Q
|
|
9/30/2009
|
|
4.1
|
|
|
11/4/2009
|
|
4.2
|
|
|
|
|
10-Q
|
|
9/30/2009
|
|
4.2
|
|
|
11/4/2009
|
|
4.3
|
|
|
|
|
10-Q
|
|
9/30/2009
|
|
4.3
|
|
|
11/4/2009
|
|
4.4*
|
|
|
|
|
S-8
|
|
|
|
4.1
|
|
|
10/2/2006
|
|
4.5*
|
|
|
|
|
S-8
|
|
|
|
4.1
|
|
|
3/31/2014
|
|
4.6*
|
|
|
|
|
10-K
|
|
12/31/2006
|
|
4.6
|
|
|
3/6/2007
|
|
4.7
|
|
|
|
|
10-Q
|
|
6/30/2014
|
|
4.2
|
|
|
8/11/2014
|
|
4.8*
|
|
|
|
|
10-K
|
|
12/31/2006
|
|
4.7
|
|
|
3/6/2007
|
|
4.9*
|
|
|
|
|
10-K
|
|
12/31/2006
|
|
4.8
|
|
|
3/6/2007
|
|
4.10*
|
|
|
|
|
10-K
|
|
12/31/2011
|
|
4.9
|
|
|
3/5/2012
|
|
4.11*
|
|
|
|
|
10-Q
|
|
6/30/2014
|
|
4.1
|
|
|
8/11/2014
|
|
4.12*
|
|
|
|
|
|
10-Q
|
|
3/31/2015
|
|
10.2
|
|
|
5/11/2015
|
4.13*
|
|
|
|
|
10-K
|
|
12/31/2015
|
|
4.17
|
|
|
3/24/2016
|
10.1**
|
|
License Agreement dated November 18, 1998 between The Gas Technology Institute and Fuel Tech, Inc. relating to the FLGR Process.
|
|
|
|
10-K
|
|
12/31/1999
|
|
3.3
|
|
|
3/30/2000
|
10.2**
|
|
Amendment No. 1, dated February 28, 2000, to License Agreement dated November 18, 1998 between The Gas Technology Institute and Fuel Tech, Inc. relating to the FLGR Process.
|
|
|
|
10-K
|
|
12/31/1999
|
|
3.3
|
|
|
3/30/2000
|
10.3
|
|
|
|
|
8-K
|
|
|
|
99.1
|
|
|
2/7/2007
|
|
10.4**
|
|
|
|
|
10-K
|
|
12/31/2008
|
|
10.7
|
|
|
3/5/2009
|
|
10.5
|
|
|
|
|
10-Q
|
|
9/30/2013
|
|
10.1
|
|
|
11/13/2013
|
|
10.6
|
|
|
|
|
10-Q
|
|
3/31/2014
|
|
10.1
|
|
|
5/12/2014
|
|
10.7
|
|
|
|
|
10-Q
|
|
9/30/2009
|
|
10.5
|
|
|
11/4/2009
|
|
10.8
|
|
|
|
|
10-Q
|
|
9/30/2009
|
|
10.6
|
|
|
11/4/2009
|
|
10.9
|
|
|
|
|
10-Q
|
|
9/30/2009
|
|
10.7
|
|
|
11/4/2009
|
|
10.10
|
|
|
|
|
10-Q
|
|
6/30/2011
|
|
4.1
|
|
|
8/8/2011
|
|
10.11
|
|
|
|
|
10-Q
|
|
6/30/2013
|
|
4.1
|
|
|
8/7/2013
|
|
10.12
|
|
|
|
|
10-K
|
|
12/31/2015
|
|
10.12
|
|
|
3/24/2015
|
|
10.13
|
|
|
|
|
10-Q
|
|
6/30/2015
|
|
10.2
|
|
|
8/10/2015
|
|
10.14
|
|
|
|
|
10-K
|
|
12/31/2015
|
|
10.14
|
|
|
3/24/2015
|
|
10.15
|
|
|
|
|
10-Q
|
|
3/31/2016
|
|
10.1
|
|
|
5/10/2016
|
|
10.16
|
|
|
|
|
10-Q
|
|
6/30/2017
|
|
10.1
|
|
|
8/14/2017
|
|
10.17
|
|
|
X
|
|
|
|
|
|
|
|
|
||
10.18
|
|
|
|
|
10-Q
|
|
6/30/2016
|
|
10.1
|
|
|
8/9/2016
|
|
10.19
|
|
|
|
|
10-K
|
|
12/31/2009
|
|
10.14
|
|
|
3/4/2010
|
|
10.20*
|
|
|
|
|
10-Q
|
|
3/31/2015
|
|
10.1
|
|
|
5/11/2015
|
|
10.22*
|
|
|
|
|
10-K
|
|
12/31/2016
|
|
10.18
|
|
|
3/24/2015
|
|
10.23*
|
|
|
X
|
|
|
|
|
|
|
|
|
||
10.24*
|
|
|
|
|
10-K
|
|
12/31/2016
|
|
10.19
|
|
|
3/24/2015
|
|
10.25*
|
|
|
X
|
|
|
|
|
|
|
|
|
10.26*
|
|
|
X
|
|
|
|
|
|
|
|
|
||
10.27*
|
|
|
X
|
|
|
|
|
|
|
|
|
||
10.28*
|
|
|
X
|
|
|
|
|
|
|
|
|
||
10.29*
|
|
|
X
|
|
|
|
|
|
|
|
|
||
10.30*
|
|
|
|
|
10-Q
|
|
6/30/2010
|
|
10.1
|
|
|
8/9/2010
|
|
10.32*
|
|
|
|
|
10-K
|
|
12/31/2009
|
|
10.10
|
|
|
3/14/2010
|
|
10.33*
|
|
|
|
|
10-K
|
|
12/31/2011
|
|
10.21
|
|
|
3/5/2012
|
|
10.34*
|
|
|
|
|
10-K
|
|
12/31/2013
|
|
10.21
|
|
|
3/10/2014
|
|
10.35*
|
|
|
X
|
|
|
|
|
|
|
|
|
23.1
|
|
|
X
|
|
|
|
|
|
|
|
|
|
31.1
|
|
|
X
|
|
|
|
|
|
|
|
|
|
31.2
|
|
|
X
|
|
|
|
|
|
|
|
|
|
32
|
|
|
X
|
|
|
|
|
|
|
|
|
101.1 INS
|
|
XBRL Instance Document.
|
|
|
|
101.2 SCH
|
|
XBRL Taxonomy Extension Schema Document.
|
|
|
|
101.3 CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
|
|
|
101.4 DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
|
|
|
101.5 LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document.
|
|
|
|
101.6 PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
**
|
Portions of this document have been omitted pursuant to a request for confidential treatment and the omitted information has been filed separately with the Securities and Exchange Commission.
|
|
FUEL TECH, INC.
|
|
|
|
|
Date: March 12, 2018
|
By:
|
/s/ Vincent J. Arnone
|
|
|
Vincent J. Arnone
|
|
|
President and Chief Executive Officer
|
|
|
(Principal Executive Officer)
|
|
|
|
Date: March 12, 2018
|
By:
|
/s/ James M. Pach
|
|
|
James M. Pach
|
|
|
Vice President, Treasurer and Controller
|
|
|
(Principal Financial Officer)
|
Signature
|
|
Title
|
|
|
|
/s/ Vincent J. Arnone
|
|
President and Chief Executive Officer
(Principal Executive Officer)
|
Vincent J. Arnone
|
|
|
|
|
|
/s/ James M. Pach
|
|
Vice President, Treasurer and Controller
(Principal Financial Officer)
|
James M. Pach
|
|
|
|
|
|
/s/ Douglas G. Bailey
|
|
Director
|
Douglas G. Bailey
|
|
|
|
|
|
/s/ Thomas S. Shaw, Jr.
|
|
Director
|
Thomas S. Shaw, Jr.
|
|
|
|
|
|
/s/ Dennis L. Zeitler
|
|
Director
|
Dennis L. Zeitler
|
|
|
|
|
|
/s/ James J. Markowsky, Ph.D.
|
|
Director
|
James J. Markowsky, Ph.D.
|
|
|
(a)
|
Lender, Borrower and Loan Parties shall have executed this Amendment;
|
(c)
|
Borrower shall pay all costs and fees incurred by Lender in connection with the preparation and performance of this Amendment;
|
(d)
|
There shall be no less than $5,520,000.00 in the Cash Collateral Account until the later of (i) all commitments and outstanding letter of credit obligations are reduced to $5,000,000 or less, or (ii) August 31, 2018; at which time the Cash Collateral Account shall be no less than $5,020,000; and
|
3.
|
EOIP Payouts
|
Executive Officer Incentive Plan Mechanics
|
||||||||||
|
Minimums
|
|
Funding
Percentage
|
|
Incremental
Value
|
Incremental
Percentage
|
|
Percentage Cap
|
|
|
Adjusted EBITDA, as defined
|
|
$4,000
|
|
1.25
|
%
|
200
|
0.100
|
%
|
2.25
|
%
|
Revenue
|
|
$57,500
|
|
0.625
|
%
|
450
|
0.050
|
%
|
1.125
|
%
|
APC Bookings
|
|
$38,000
|
|
0.625
|
%
|
900
|
0.050
|
%
|
1.125
|
%
|
|
|
3.00
|
%
|
|
|
7.00
|
%
|
|||
|
|
|
|
|
|
|||||
|
|
|
|
|
|
4.
|
DEFINITIONS
|
5.
|
OTHER CONDITIONS
|
Date: March 12, 2018
|
|
|
|
|
|
By:
|
/s/ Vincent J. Arnone
|
|
|
Vincent J. Arnone
|
|
|
Chief Executive Officer
|
|
Date: March 12, 2018
|
|
|
|
|
|
By:
|
/s/ James M. Pach
|
|
|
James M. Pach
|
|
|
Vice President, Treasurer and Controller
|
|
Date: March 12, 2018
|
|
|
|
|
|
By:
|
/s/ Vincent J. Arnone
|
|
|
Vincent J. Arnone
|
|
|
Chief Executive Officer
|
|
|
|
|
Date: March 12, 2018
|
|
|
|
|
|
By:
|
/s/ James M. Pach
|
|
|
James M. Pach
|
|
|
Vice President, Treasurer and Controller
|
|