Vince Arnone: Thank you, Devin. Good morning, and I'd like to thank everyone for joining us on the call today. Given that we last spoke not that long ago in connection with our year-end results, I'll keep my commentary brief today. Although we've begun the year more slowly than anticipated in our APC and FUEL CHEM business segment, we expect that our performance for these businesses will show steady improvement as we move through 2024. In addition, we are very encouraged by the progress we are making at our Dissolved Gas Infusion or DGI business initiative, and we ended the quarter in a very strong financial position with cash, cash equivalents, and investments of over $32 million and no long-term debt. Now let's discuss our results for the first quarter in more detail.

As a general statement, our results reflected the impact of customer-driven delays in the execution of existing contracts in our APC business segment, while our performance in FUEL CHEM was impacted detrimentally by historic warm weather across the U.S. that affected unit dispatch and by unscheduled plant outages. For the APC segment, I remain pleased with our ongoing execution of existing projects and our team's current business development activities, which continue to reflect an increased focus on global emissions protocols across a variety of fuel sources. In 2023, we benefited from the continued adoption of our ULTRA SCR, SNCR, and FTC emissions control solutions at natural gas and coal-fired units in the U.S., Europe, South Africa, and the Pacific Rim, and I expect this to continue into 2024 and beyond.

Independence of the potential impact of favorable regulatory outcomes, which I will discuss shortly, we are well positioned to take advantage of current industrial market trends, which include plant capacity expansion across several industries, the incentivized use of small turbines to replace traditional less clean power generation, the development of the biocarbon industry, the continued emphasis on decarbonization on a global basis, and the focus on using our ULTRA systems as the safe source of ammonia for SCRs at hospitals and universities across the U.S. We are providing proposals to customers for both near and longer-term needs regardless of regulatory drivers, and we are currently watching the progress of $5 million to $10 million in APC contract opportunities that could close in our favor before the end of the second quarter or shortly thereafter.

Now on the regulatory front. We continue to monitor progress related to the adoption of the U.S. EPA's Cross-State Air Pollution control regulation to meet the good neighbor requirements of the Clean Air Act, which we believe can be a potential catalyst for APC growth in 2024 and for the remainder of this decade, as utility and industrial customers explore ways to further reduce NOx emissions. Over the past several months, we have received and responded to multiple requests for budgetary proposals as customers prepare to address the upcoming compliance requirements as part of their capital budget planning for this year and beyond. As discussed on previous calls, the rule currently obligates 23 states to reduce emissions of nitrogen oxides from power plants and certain industrial facilities to limit their impact on downwind states.

The ultimate timing of the effectiveness of the rule is uncertain because several upwind affected states and sources have challenged the efficacy of EPA's proposed regulation in multiple courts and stays of the effectiveness of the rule have been issued for many upwind states. In February of this year, oral arguments were presented to the Supreme Court by both sides, and we are closely monitoring the potential impact of the Supreme Court's ruling on whether to stay the rule for all states when it is issued later this year. In addition to the good neighbor rule, we are also watching the progress of EPA's rule for large municipal waste combustor units, which is independent of the good neighbor rule. This rule reduces the nitrogen oxide emissions requirements for large municipal waste combustor 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 them in their compliance planning. The municipal waste combustor rule is currently in a public comment period with compliance deadlines expected sometime in the next three years. Lastly, within the past two weeks, EPA has issued new stringent greenhouse gas emission standards that require 90% reductions for most new gas-fired plants and existing coal units by 2032. This same proposed rule tightens the mercury and air toxic standards requirements by 2028, wastewater discharge limits for coal-fired power plants by 2029, and ash handling and disposal from coal-fired power plants over the next several years.

This combined rule comes at a time when there are projections of potential shortfalls in power generation over the next five to seven years in certain geographic regions in this country due to data center power demands and increases in computing power requirements resulting from the adoption of artificial intelligence. And we are in the process of evaluating the potential impact of these rules across our technologies in the power generation market. Now for the FUEL CHEM segment. Revenues declined from the prior year first quarter due to a decrease in operational demand from our client base resulting from warm weather across the U.S. and, to a lesser extent, unscheduled plant outages and closures compared to the same period in 2023. As mentioned on our last conference call, we have been pursuing multiple additional FUEL CHEM development opportunities, which could provide incremental revenue contribution in the second half of 2024 for both coal and biomass fired boilers.

I'm very pleased to say that we have received an order for our FUEL CHEM demonstration at a new coal-fired power generation site in the Western U.S. The demonstration is expected to commence later this month. And if it becomes a commercial account, is expected to generate annualized revenue of approximately $1.5 million to $2 million at historic FUEL CHEM gross margins. And in addition to this domestic opportunity, we are in discussions with one additional coal-fired power generation facility regarding a demonstration later this year, also in the Western U.S. and we are also pursuing an opportunity to address the concerns of a biomass-fired boiler operator. 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.

We expect that the nation's upcoming presidential election in June will provide us with additional clarity on the likelihood of this opportunity as the favorite candidate is an environmental engineer by background and could take a favorable position on the implementation of environmental policy. We will provide more color on this opportunity on our next conference call. As we move into the second half of 2024, we expect FUEL CHEM revenue to improve due to the increased power demand and associated unit dispatch that comes during the summer months and the contributions from the new coal-fired unit demonstration that will commence later this month. With our DGI initiative, our momentum continues. Last month, we executed an agreement to commence and complete a demonstration of DGI at a municipal wastewater site.

In this instance, our DGI solution will be used to reduce hydrogen sulfide and the wastewater, the oxygenation to reduce corrosion inside the wastewater lines. This application will demonstrate DGI's capability to extend the life cycle of aging infrastructure and eliminate the need for costly maintenance activities. Following the successful demonstration of our technology at a U.S. shrimp farming facility last year, we are in discussions with the owners of that same facility to incorporate DGI into their commercial scale plant stacked raceway system. The client is expecting to have their aquaculture system functional by the end of the year, and we are in the process of providing a proposal for a DGI system that will meet the precise needs of this aquaculture environment.

Additionally, for aquaculture, we are in discussions with a potential new aquaculture client in the U.S. that is considering incorporating DGI into a greenfield fish hatchery site in the Western states. There are many other target markets of interest for DGI, including pulp and paper, food and beverage, petrochemical, and horticulture, and we look forward to addressing these markets prospectively. On the marketing front, we have been increasing our efforts to communicate the benefits of DGI to targeted end markets and customers, and we will be present at additional conferences later this year. Based on our effective backlog today, the business development activities we are pursuing and our previously noted expectations for FUEL CHEM, we expect that total revenues for 2024 will exceed the total revenues recognized in 2023 of $27.1 million, and we will provide further guidance as we move throughout 2024.

This base case outlook excludes any material contributions from DGI as we are still in the early stages of commercialization, any significant contributions to APC from the above-referenced EPA regulations and the impact of material business development activity for FUEL CHEM. In closing, I want to thank the Fuel Tech team for their continued contributions to our business. It is their hard work, passion, and dedication that drive our ability to be successful as a company. Additionally, I thank our shareholders for their continued support. We continue to expect that 2024 will be an important year in the growth and development and evolution of Fuel Tech, and we look forward to keeping you apprised of our progress. Now I'd like to turn the call over to Ellen.

Ellen Albrecht: Thank you, Vince, and good morning, everyone. For the quarter, consolidated revenues declined to $5 million from $7.3 million in last year's first quarter, reflecting declines in both the APC and FUEL CHEM segment from the prior year period. APC segment revenue decreased to $2.3 million from $3.6 million in the first quarter of 2023, primarily related to customer-related delays and project execution. FUEL CHEM segment revenue declined to $2.6 million from $3.7 million in the first quarter of 2023 due to a decline in electrical generation demand and unscheduled plant outages. Consolidated gross margins for the first quarter were 41% of revenues, an increase from 38% in the first quarter of 2023, reflecting an increase in APC segment gross margin to 38% of segment revenues from 27% in the prior year period due in large part to the mix of projects and services executed during the quarter.

FUEL CHEM segment gross margin declined to 43% from 49% in the first quarter of 2023 as a direct result of lower segment revenue. We expect FUEL CHEM segment margins to return to historical levels as we continue throughout the year. Consolidated APC segment backlog on March 31 was $6.2 million, down from a backlog of $7.5 million at December 31, 2023. Backlog at March 31, 2024, included $1.8 million of domestically delivered project backlog and $4.4 million of foreign delivered project backlog compared to $2.6 million of domestically delivered project backlog and $4.9 million of foreign delivered project backlog at December 31. We expect that $6 million of current consolidated backlog for the APC segment will be recognized in the next 12 months.

SG&A expenses increased slightly to $3.3 million from $3.2 million in Q1 of 2023, reflecting higher employee-related expenditures. Given the decline in revenue, SG&A as a percentage of revenue in the 2024 first quarter increased to 68% from 45% in the same prior year period. Research and development expenses for the first quarter rose to $376,000 from $218,000 in the same period a year ago, mainly reflecting our ongoing investment in the development of new technologies to expand our product offerings into the water and wastewater treatment market and more specifically, our DGI systems. Our operating loss was $1.7 million compared to a loss of $658,000 in last year's first quarter, reflecting a reduction in overall revenue, a shift in margin contribution from product mix and slightly higher operating expenses for the quarter.

We continue to take advantage of the favorable interest rate environment. And as of March 31, have invested more than $30 million in held-to-maturity debt securities and money market funds. This generated $311,000 of interest income in the first quarter compared to $339,000 in the prior year period. Our net income for the quarter was $281,000 or $0.01 per share compared to a net loss of $414,000 or a loss of $0.01 per share in the same period one year ago. Net income for the first quarter of 2024 included an extraordinary other income amount of $1.7 million related to the recording of income associated with the expected receipt of the employee retention credit during the quarter as compared to an other expense of $90,000 in last year's first quarter.

For those of you not familiar with the employee retention credit, the CARES Act established by the U.S. government was enacted to provide certain relief as a result of the COVID-19 pandemic. This tax relief, along with other stimulus measures, allowed for employers to claim a refundable tax credit against the employer share of social security tax for qualifying periods in 2020 and 2021, subject to certain criteria. Under the provision of the CARES Act, the company was eligible for refundable employee retention credit, which was claimed in Q1 of 2024. Adjusted EBITDA loss was $1.5 million compared to an adjusted EBITDA loss of $569,000 in the same period last year. Lastly, moving to the balance sheet. Our financial condition remains very strong.

As of March 31, we had cash and cash equivalents of $11.4 million and short and long-term investments totaling $20.7 million. Working capital was $27.7 million or $0.90 per share, stockholders' equity was $44 million or $1.43 per share, and the company continues to have no outstanding debt. To reiterate Vince's earlier comments, we remain confident in our ability to fuel our growth initiatives, pursue new product and market opportunities and maintain our strong financial position, which we view as an important competitive advantage, given ongoing macroeconomic uncertainties. We have a pipeline of significant growth opportunities across business segments that position us for positive growth in 2024. I'll now turn the call back over to Vince.

Vince Arnone: Thanks very much, Ellen. I would like now to turn the call back to operator for questions.

Operator: [Operator Instructions] Our first question is from Amit Dayal with H.C. Wainwright. Please proceed.

Amit Dayal: Thank you. Good morning, everyone.

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