Q4 2019 Earnings Call
At this time, all participants are they listen only mode.
After Sasha 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 it is now my pleasure to introduce your host Mr. Devin Sullivan Senior Vice President of the equity group. Thank you Sir you may begin.
Thank you Jesse good morning, everyone and thank you for joining us today for fuel Tech's 2019 fourth quarter and full year financial results conference call yesterday. After the close we issued a copy of the release a copy of which is available at the company's website Www Dot F T.K. dot com.
The speakers on today's call will be Vince Arnone, President Chairman, President and Chief Executive Officer, and Jim pop the companies.
Principal financial Officer.
After prepared remarks, we will open the call for questions.
Investors.
Before turning things over to Vince I'd like to remind everyone that matters discussed in this call except for historical information all forward looking statements as defined in section 20, Onee of the Securities Act like team 34 as amended.
Made pursuant to the Safe Harbor provisions of the private Securities Litigation Reform Act would like to 95 and reflect the fuel Tech's current expectations regarding future growth.
Results about <unk> future growth and results of operations cash flows performance and business prospects and opportunities as well as assumptions made by an information currently available to our company's management.
Fuel tech as tried to identify forward looking statements by using words, such as anticipate believe plant expect estimate and so well and similar expressions, but these words or 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 fab.
There's including but not limited to those discussed in fuel Tech's annual report on form 10-K in item one eight under the caption 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 and business prospects.
<unk> and opportunities to differ materially from those expressed in four implied by these statements.
Fuel Tech undertakes no obligation to update such factors or two publicly announced the results of any forward looking statements contained herein.
What future events developments were changed circumstances or for any other reason.
There's a caution that all forward looking statements.
Involve risks and uncertainties, including those details in the company's filings with the FCC.
Having said that I'd now like to turn the call over to Vince Arnone Vince. Please go ahead.
Thank you Devin good morning, and I want to thank everyone for joining us on the call today.
2019, with a challenging year for our company.
Driven primarily by ongoing delays and closing new APC business Awards.
And these delays are continuing into the first quarter of 2020.
Our 2019 financial result.
Were direct reflection of these delays.
We recognize that we are fortunate that the effects of these delays have been mitigated by the cost savings generated via the domestic and international restructuring efforts that we implemented over these past four years.
In 2020 to address our immediate issues, we are engaging in the following activities.
For all near term business development opportunities for our APC or fuel Chem business segments.
We are engaging a multi disciplined team.
Ill sales engineering engineering contract administration illegal in finance when applicable.
To review and they act upon the identified customer driven criteria for success on a project by project basis.
This team is meeting on a weekly basis.
Well, we have engaged in these practices previously this new effort has an increase sense of urgency.
Greater depth the participation.
And involves the office of the CEO.
Operationally on a global basis.
We're going to make specific modifications to better address the needs of the customers that we are serving and the markets that we are competing in today.
But most importantly, our the steps that we will take to ensure product cost competitiveness and product feature diversity.
To that end, we will make the necessary investment and personnel and technology improvements to create best in class supply chain functionality in our company, which we deem critical to our future success.
And finally in terms of Orest DNA cost.
We have taken significant strides to better align our cost structure to meet the level of business generated by our markets today.
While maintaining the ability to deliver all of our products and technologies to the markets we serve.
This has allowed us to continue to invest in our future and the form of our water treatment initiative.
However.
We can and we must do more.
Fuel Tech senior leadership in board of directors are working collaboratively to this end.
And our recent board meeting our board of Directors accepted the leadership teams offer to voluntary voluntarily reduce the base salary officers of the company by 10% effective March 1st of this year.
Moreover, each nonemployee member of the board of directors reduce their base director fee.
By 10% effective as this as of the same day.
These reductions will be in effect until it becomes apparent that the companys financial condition has improved and is sustainable.
In the aggregate these initiatives are expected to produce annualized cost savings of approximately $300000.
Additionally, the fuel tech team will be reviewing all functional areas for further cost reduction in 2020.
We continue to monitor our liquidity liquidity needs with rigor and believe our current cash position.
And with a cash flow expected to be generated from operations are adequate to fund the planned operations of the company for the next 12 months, even in a worst case scenario.
We believe that the actions noted previously well also establish a basis for material improvement in our financial performance as we move through 2020 and beyond.
For APC business, specifically at present.
We are pursuing a global sales pipeline of $75 million to $100 million that is heavily weighted towards the U.S. in Europe.
The scope of this work is primarily for SCR.
I'll try.
That's NCR and FTC offerings.
Oh this sales pipeline amount.
Which includes all potential projects over a three to five your time horizon.
We are currently in various stages of negotiation with several clients for approximately 15 to 20 million a new work that we expect will be awarded before the end of the second quarter or shortly thereafter, and we expect to win some portion of this new work.
[noise] regarding the finalization of prior restructuring activities.
The wind down of our China operation is substantially completed and has resulted in the removal of approximately 2 million in.
On an annual operating losses, the full benefit of which we are realizing in 2020.
We're also in the process of repatriating the cash should we collected from our outstanding China receivables in 2019.
Our outstanding accounts receivable balance in China at December 30, Onest 2019 was $2.7 million.
Which wasn't reduction of $3 million from the prior year end.
Reflecting $3 million in cash collections during the year.
Since the close of 2019.
We have collected an additional $300000.
As of this data we are experiencing minimal impact.
From the Corona virus on our operations however.
We are watching this development very closely.
The actions being taken by governmental bodies on a global global basis, our fluid and we are assessing our position on this matter on a daily basis.
Well, we have closed our Beijing office and are no longer or originating project work from Beijing.
Our European office is located just outside of Milan, Italy, and we are watching the development of our project activity and the European market as a whole.
The health and safety of our employee team and our client base remain our primary concern.
Now, let's move onto a further overview of of the business as a whole.
Our fuel Chem business generated revenues of 3.2 million in the fourth quarter with the gross margin of 48%.
Fuel Chem was impacted by unplanned customer unit outages.
Warmer than normal weather and the continued trend towards the reduction in electricity demand from coal fire combustion units.
Even by the of the availability of low cost natural gas units and renewable energy sources and many regions of the country.
These same factors have impacted the first few months of this year. However, commencing in March we have returned to a more normalized run rate for our current customer base.
[noise] domestically, we are following Q opportunities that would expand our fuel chem customer base.
One with an existing customer on coal fired units.
And the other with a new customer that provides energy from renewable fuel.
The existing customer has to coal fired units in the east that are looking to convert their fuel source to a lower rank coal later in this year.
In 2009, HM we installed fuel chem onto coal fired units at a different site for the same customer as they have converted the fuel source for these units as well.
These pockets of opportunity are rising as the U.S. utility sector adjust their asset base to accommodate their desire to future makes a power generation in terms of fuel source and we expect that we may see additional such opportunities as we move through 2020 and beyond.
Additionally.
We are working with a renewable energy provider that has to wood burning bio mass units in the U.S. that are having severe slagging and fouling issues and we believe that these units will likely have fuel Chem systems installed in 2021 as soon as the end of second quarter.
Ill report further on these opportunities as we move through the year. However, we are pleased to see additional opportunities for our fuel Chem business.
<unk>.
We are continuing to pursue opportunities for additional fuel chem applications and geographies outside of the U.S.
This includes biomass, yeah municipal solid waste in Europe.
In southeast Asia via our partner Amazon virus, or the pulp and paper industry, where we are using our recovery weekend program and another southeast Asian countries, where coal is a primary source of fuel power demand in related pricing is high and were Slagging and fouling is an issue.
As we noted in last quarter's call in the fall of 2019, we met with our partner in Mexico to discuss how fuel Tech solutions.
Can help them to burn high sulfur fuel oil and a cleaner and more efficient manner.
The drivers for the potential business are twofold.
First the IMO.
Or the international Maritime organization.
Effective as of January 1st of 2020 began to enforce new emission standards design to significantly curb pollution produced by the world's shipping industry.
It is no longer allowing ships to use heavy sulfur fuel oil as a source of fuel.
[noise], Mexico had been selling the majority of there have you sell for fuel oil for use in maritime transport and is now going to have a glut of this fuel.
Second.
Mexico's current government.
Supporting the use of all indigenous resources to generate power.
As opposed to encouraging and increased reliance on foreign sources, such as natural gas from the U.S.
As of this date, we finalized our new agreement with our local partner, which will cover the implemented implementation of our technology throughout Mexico.
However development within the Mexican government to support the burning of the high sulfur fuel oil has been slow.
We still believe that this opportunity for our fuel Chem program can be used to mitigate pollutants generated from the burning of high sulfur fuel oil is potentially significant.
And we will continue to monitor very closely.
With respect to our global APC operations.
Despite our delay in order activity.
We firmly believe that our near term project lastly landscape of opportunity remains active and viable.
As I noted earlier, we're in discussions with several potential clients for near term awards.
Our primary focus is to establish a growing backlog throughout 2020.
And utilize the operating leverage we have created to trend towards profitability.
Fcr and I'll throw off for natural gas applications in industrial markets continue to provide our best business opportunity.
We continue to see a steady flow of new small to medium gas turbine.
Our combined cycle plant projects, such as the <unk> combined heat and power upgrades at universities, and large medical complexes and new opportunities in the oil and gas segment.
We will continue to sports and partner with small turban suppliers.
And suppliers of of internal combustion engines for stationary deployment and exploit the development of plug and play small engine SCR solutions for this distributed power generation market.
We're also continuing to pursue opportunities in the steel industry, which notwithstanding current market stock market gyrations is benefiting from favorable overall economic conditions.
As always we are monitoring activities at the state level, where new environmental guidelines are being considered and established that will require expedited implementation schedules to install best available retrofit control technology uncertain sources of emissions.
In Europe, we continue to see rising interest in both ultra and SCR technologies, along with requirements for SCR technology for certain applications as well.
We are confident and the opportunities that this market is offering stemming from from breath, which is the best available reference technology guidelines that were issued in August of 2017 that have compliance timelines to through 2020 and beyond.
While we are tracking APC opportunities in other geographies as we've noted in prior conference calls.
In particular in India, Southeast Asia, and South Africa. The opportunities, we are tracking and have a longer term time horizon to realization.
We will continue to monitor monitor progress in these markets via our business relationships.
And we will report on progress from time to time.
Today, the U.S. and European markets are providing us with the largest opportunity landscape and we will dedicate our resources towards winning this work.
Regarding our does dissolved gas infusion business.
Hi, I'm very pleased to share two significant developments since our last conference call.
First on the business development side.
We expect to commence an onsite demonstration of our water technology at a pulp and paper facility in the Midwest.
No later than early in the second quarter of this year.
We have targeted this industry is one that can benefit from this technology and our demonstration will focus on improving the plans to wastewater treatment efficiency and treatment capacity, while still maintaining permit requirements.
As our understanding of the market application for this technology has evolved so too has our approach to advancing its growth.
To that end in 2019, we engaged subject matter experts to assist us in identifying and diagnosing areas, where our dbi technology could be helpful.
That investment let us to this current opportunity and we believe that there will be more to follow here in the near term.
We're also on conversations.
With several other potential customers across a variety of industries other than pulp and paper, such as oil and gas chemical and bio gas generation.
And second.
During the first quarter of 2020, the company files, a provisional patent application to protect certain enhancements to the DG I technology that improve its performance as we look to the as we look to use dbi to displace competing technologies directly or provide cost effective augmentation.
To a range of environmental treatment processes with an eye toward greener solutions.
Before closing I'd like to comment on our S. DNA expenses as we look to enter 2020, our move through 2020.
Our annual SDMA in 2019 was 7.2 million.
Which was that would which was a decrease of $1.4 million <unk> from 2018.
Excluding China SDMA in 2019 was 15.5 million.
For 2020, we are targeting total SDN as seen a cost to range between 13 million and $13.5 million.
Reflecting the impact of total cost savings derived from the wind down of our China operations.
Our previous restructuring efforts.
Aforementioned salary reductions and lower director fees and other planned actions.
This further improvement in our cost structure will provide the additional resilience that we need to stabilize our financial performance in 2020.
And position ourselves for returned to profitability and growth.
In closing I want to thank you once again for your ongoing interest in fuel Tech.
Despite the challenges that impacted our business in 2019, there is cause for optimism as we move further into 2020.
We continue to have a strong financial foundation.
Total cash of 13.5 million and no debt.
We are engaging and actions to ensure that our infrastructure spending is aligned with business generation.
We eliminated the risk of loss that existed for the wind down of our China business and we look to repeat repatriate cash in 2020 and in the future.
We see expansion opportunities for our fuel Chem business and are confident that we will add new coal and biomass fired units to our customer base in 2020.
We firmly believe in the viability of our APC business.
The expectation of having near term awards be before the end of the second quarter or shortly thereafter.
Our DIY business is beginning to develop more rapidly from both business development and technical aspects.
And we look forward to commencing our first demonstrations shortly.
And finally.
I have an immense belief in the will and commitment of the fuel tech team.
We are disappointed with our past year performance.
And our motivated to ensure a financial sustainability and ultimately a growth platform for our stakeholders.
I'll now turn things over to Jim pack for a discussion of our financial results.
As many of you know last week, we disclosed that trial as Jim his last day here at fuel Tech as he is leaving to pursue an excellent career opportunity.
Jim has played an integral role and fuel tech over the last several years.
We thank him for his contributions and we wish him all the best in the future endeavors.
I also want to Ella and why I also want to welcome.
When Albrecht to her new role is acting treasure and controller and principal financial officer of the company.
Alan has been when fuel tech for almost 24 years, serving in various capacities. Most recently as vice President operations planning and control since may of 2012.
Alan as previously served as the company is acting Treasurer, and Chief Financial Officer, and corporate controller. Among other roles. She brings a welcome filial Emily equity to our business and culture, and we expect a seamless transition of responsibilities here in the near term.
With that I'll turn things over to Jim go ahead Jim.
Thank you Vince and good morning, everyone.
As Vince noted our Q4 results were impacted primarily by slower than expected New business awards in our APC business segment.
Revenue for the fourth quarter declined to 4.9 million from 15.8 million driven by nearly 9 million revenue decline at APC.
Or APC revenues were the result of a decline in backlog entering the fourth quarter and slower than expected new APC contract Awards.
We continue to pursue these awards invent and as Vince as mentioned previously expect to secure a new contracts before the end of the second quarter or shortly thereafter.
Cost of sales for Q4 2019 included a 2 million dollar charge associated with the accounting treatment of an insurance receivable related to a previously disclosed equipment warranty liability with the us customer.
Fuel tech have submitted a reimbursement request to its ensure for the $2 million expended in remediation and such amount is within coverage limits of our insurance policy fuel Tech in the insurance company continue to work amicable way to resolve this matter and upon settlement with an inch it's insurer all amounts received will be applied to reverse that.
Charge and a future quarter.
Consolidated gross margin for Q4, 2019 was less than 1% of revenues compared to 37.3% of revenues in Q4 2018.
Excluding the impact of the insurance receivable charge consolidated gross margin was 41.1% of revenues as compared to 37.3% of revenues in Q4 2018 due to the mixed in revenues between APC and fuel Chem.
[noise] APC gross margin, including the 2 million dollar charge was negative 1.5 million as compared to 3.2 million or 30.4% in Q4 2018, excluding the 2 million dollar charge APC gross margin was 0.5 million or 28 point.
1%.
As we see results for Q4 2019 included no revenues from Beijing fuel Tech and an operating loss so 0.2 million.
In Q4, 2018 revenues from Beijing fuel Tech for approximately zero point Sixmillion with an operating loss of about zero point Fourmillion.
[noise] fuel Chem segment revenues were 3.2 million as compared to 5.3 million in Q4, 2018, reflecting soft electric demand market and low natural gas prices, which leads to fuel switching an unscheduled outages.
This segment will likely continue to be affected by these factors going forward.
Segment gross margin was 47.8% in Q4, 2019, and 51.1% in Q4 2018.
As Vince had noted previously we have been quite successful in controlling our costs on our SGN a reflects that.
DNA for Q4, 2019 declined by 6.5% to 4.5 million from 4.8 million in Q4 of 2018.
SGN a also declined for the fourth consecutive year and we hit our full year are targeted SGN a range of 15 to 16 million, excluding China, China, SGN, a and restructuring cost that totaled approximately 15.5 million.
R&D expenses were just over zero point, Threemillion, which approximated cost in last year's fourth quarter, reflecting our continued focus on efforts on the development of the dissolve the gas infusion technology.
Net loss from continuing operations was 4.7 million or 18 cents per diluted share compared to net income from continuing operations of 0.9 million or four cents per share in last year's fourth quarter.
Excluding the impact of operating losses at Beijing fuel Tech and the previously mentioned 2 million dollar charge for the insurance.
Our receivable charge fuel Tech's net loss from continuing operations for Q4, 2019 was two and a half million or about 10 cents per diluted share.
Our balance sheet at December 31, 2019 remain debt free and we had cash and cash equivalents of 13, and a half million, which included restricted cash of 2.6 million.
Our working capital balance at December 31, 2019 was 16.7 million, which will continue to support our ongoing operating needs of the business.
With respect to valuation.
Our book value per share was a dollar eight our tangible book value per share was 96 cents and our working capital per share was 69 cents at December 31 2019.
Given our cumulative net operating losses of 35.8 million at December 31, 2019, which covers all of our geography is we expect that our income tax expense for 2020 will be at or near zero.
This figure does include China, Noel's, which we will maintain given we're preserving the legal entity in China.
As Vincent noted I have accepted a physician in another company and leaving fuel tech. After several years of service here I wanted to thank vinson the entire team at fuel Tech for this opportunity.
I also wanted to congratulate Allen and welcome her to our new role.
With that I would like that like to turn the call back over to Vince.
Thank you Jim Operator, I think we're now ready to open the line for questions.
Thank you, ladies and gentlemen, we will now be conducting the question and answer session. If he would like to ask a question. Please press star one on your telephone keypad confirmation indicate that your line is in the question Q you May press star to if he would like to remove your question from the Q for participants isn't speaker equipment and may be necessary to pick up your hands that before.
Pressing the star Keys, one moment, please let me pull for questions.
Thank you. Our first question comes from the line of Sameer Joshi with HC Wainwright. Please proceed with your question.
Good morning, Vince Good morning, Jim Thanks for taking good morning, Samir. Thank you Jim sorry to see you go up but good luck with your future.
To the Milan.
Offices up what portion of your revenue declined to 90 came from our originated from this office.
Just quickly off the top of my head I would say approximately 10% of revenues were coming out of our European office Samir.
Okay, and so the what impact do you see from the yesterday's announcement about travel restrictions.
Hello.
Right I again.
As we sit here right now us Amir.
It's difficult to assess the that the materiality of the impact will there be some impact there is no doubt and the impact would lie in the situation where whereby we're in bidding phases on on projects right now that would be plan for call. It execution in 2020.
It's difficult to understand what the impact is going to be on call. It our supply chain that is there for you for the European marketplace that is currently largely Italian base.
Everything that has had for every happening right now is very fluid.
For 2020, we are working off backlog that will come through our profit loss David.
And obviously that that should not be impacted because were largely through execution phase on that work, but there will likely be an impact on timing of projects in project execution as we move throughout 2020 and as I sit here right now it's just difficult for me to give you an approximation of what that.
Would be.
What I can tell you as we look at as we looked at.
Paul at our overall financial picture for 20 revenue contribution contribution from the European marketplace would be about that same percentage level.
Hi.
Thanks for the color.
My pleasure.
This is an.
Right.
More color on the APC related to award believe is that that customers are taking longer to decide or are there.
The macroeconomic headwinds facing or is it that we are losing.
The competition.
Right in the I would call center I would say since the last time, we were on a conference call Samir I would I would say my answer is more related to project timing and delays relative to you.
Funding of projects relative to permitting of of projects and basically having those pieces in place for projects to move forward for a customer I would attribute that to be the primary driver here in this past call. It three to four to five months.
As I had mentioned on prior conference call within 2019.
We did have some some some issues whereby project bosses where were driven.
In some cases by unexpected customer decisions and in some cases by competitiveness on a of our bidding processes.
But that that has not impacted this past few months and as I noted in my commentary. We're we're taking what I would call extraordinary measures to ensure that were not impacted by those types of behaviors prospectively.
Understood, yes, the so I think you did good job outlining.
Steps, you're taking floor mitigating this.
On the APC trends to.
What portion of the 2 million dollar.
The remediation charge do you expect to be.
Reimbursed by the insurance do you expect the whole amount to be most or all of that yet.
We would expect the full amount submitted a bit to be reimbursed. It just a timing issue from an accounting perspective, but now we as we sit here right now we expect the 2 million to come back to us.
Okay. Okay, yes.
To fuel tech.
Yes.
You mentioned the reason for the shortfall was unplanned customer outages.
Season.
MCV weather.
And another headwinds, but if the out business, where lots to be in place and and the weather was normal seasonal ignoring what level of revenues would you expect that.
With only the headwinds.
Understood a I'd say that we probably lost half a million to three quarters of $1 million in the fourth quarter of the year due to some of those headwinds as.
As an approximation.
For the combination of outages weather's and the like.
Got it okay.
And.
Yeah, I know I'm the Dgs front you did mention.
We're also looking at dialing gas another customers saw a bit should we expect any.
Oh, you demo units.
In the in the next few quarters.
Or really focused on the outflows to get both the paper.
Yes.
Execution and then more.
We would definitely expect more demo units here as we move throughout 2020, that's our expectation as we as we sit here today.
We're very pleased to to finally have our first demonstration in hand.
But simultaneously we are working with other customers for demonstration opportunities as well and we we are expecting additional demonstration activity that we that we hope to have convert to commercialize systems before the end of 2020.
Okay.
Toward.
Accounting questions.
Paul.
The.
In the Reimbursable.
Do you see with them from the insurance company is that included on the balance sheet does.
We ended with included in the balance sheet.
Thanks, Amir can you.
Pete that question one more time, if you don't mind, please yeah sorry.
It was the insurance receivable is that concluded on the balance sheet anywhere.
No. The receivable is not on the balance sheet currently its unrecorded.
Okay, you need that for me personally.
Yes from an accounting perspective.
The probability level that the accounting standard requires is like literally a check to be cut from the insurer to the company, which as of the balance sheet. They were not quite at that point.
Understood.
And the clarification on the SGN day.
So being to 13.5 billion seconds on a GAAP basis or.
Cash basis.
That's under GAAP basis.
Okay great.
Thanks, a lot Dan once again, Jim Good luck with your future.
Thank you so much thanks Amir.
Thank you. Our next question comes from the line of Pete Enderlin with MDC Partners. Please proceed with your question.
Thank you good morning, guys.
Hi, good morning, sometimes for you and for a lot of other people actually two <unk> first comment is.
I don't see the press release on your website.
Maybe is there maybe I just told what we're looking at all I see your 2019 press releases and earlier, so it's not a problem because it's available elsewhere, but.
Check that.
And then he said thanks, thanks for letting US know, we and we'll definitely look into it. Okay. Tamir asked most of your questions. More question. So I was going to ask actually but but a little more on that the delays in the <unk>.
APC contract.
Suits.
Recently, you are saying this was not a function of.
You know so much showed competitive.
Impacts or.
Changes in the industries.
Fundamental structure, but earlier the your was so can we go back to seeing more of those kinds of problems as you pursue.
Contracts throughout the rest of 20 to 20.
Right.
Pete I, obviously I can't tell you with certainty that we're going to win 90% of everything that we bid on.
And that our customer base is going to in all cases make what I would call rational or irrational decisions. So.
What I can say is that.
We are taking a very aggressive approach here internally.
With regard to how we're looking at every opportunity that we are bidding on for both business segments.
And I can I also can tell you that the the projects that we are bidding on today.
And over this past call. It three three to five on time horizon Phase. These are projects that that that have been in what I would call.
And ongoing communication mode with the various customers that were working with and as I mentioned previously when you Cross a yearend project budgets need to be approved before purchasing entities are allowed to go forward and officially then work and our Q process that we felt some of that.
As we moved from 2019 into 2020 and and a couple of other cases were looking at all it project approvals and permitting to see those projects go forward. So said a little bit different in terms, what we're looking at today and internally within fuel tech.
The team here is dedicated to do an aggressive approach towards every piece of business that we are looking at and we are keeping a flexible open mind to look to serve the customer and the best way, we can be equipment configuration and otherwise.
It's just a call today.
A heightened level of attention given where we are in the marketplace is today and given our financial position is something that we need to do as a company ended the and as I noted.
I'm intimately involved with all of these discussions as well.
Okay understood it.
Is it fair to say your senses that most of these projects.
Potential projects, whether you get them or somebody else have been.
Deferred and not eliminated in some sense.
In in this past call. It three three to five six months, yes right. Okay.
And then on the the warranty liability.
It was is that sort of a one off kind of unusual thing or could you have more problems like that coming along.
It is definitely one off and unusual.
Okay and there's no.
Big issue about.
Whether the.
The insurance Koby will reimburse the whole 2 billion I guess right. It's just a question as you said of the timing of doing that.
P., we unfortunately, we can't.
Sit here and say with 100% certainty that every dollar is coming back our way.
Fortunately that is just yeah, that's just not how the insurer engine industry works and that's part of the reason as Jim noted why we could not keep the the asset on the balance sheet, but what I can tell you is that the claim is being fully supported and we're working through the process, but the insurance company and we have a good expectation that that we will have recovery.
HM Okay. Thanks, a lot of good luck guys.
Thank you need.
Thank you. It appears we have no additional questions at this time, so I'd like to pass the floor back over to management for any additional concluding comments.
Thank you operator as I mentioned previously.
2019, I was a difficult year for our company hi, as a fuel tech team as a whole we recognize.
What we need to do to to recover from 2019 and reestablish our financial sustainability I want to thank all of our shareholders for their continued interest in fuel tech and.
I want to tell everyone to be safe and careful as we're dealing with corona virus on a global basis and specifically here in this country as well. Thanks for your time and have a good day.
Ladies and gentlemen, this does conclude today's teleconference. We thank you for your participation and you may disconnect your lines at this time.
[music].