10-Q 1 doc1.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2003 or [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______ to ______ Commission file number: 000-21724 -------------- FUEL-TECH N.V. (Exact name of registrant as specified in its charter) Netherlands Antilles N.A. --------------------- ---- (State of Incorporation) (I.R.S. Employer Identification No.) Fuel-Tech N.V. Fuel Tech, Inc. (Registrant) (U.S. Operating Subsidiary) Castorweg 22-24 Suite 703, 300 Atlantic Street Curacao, Netherlands Antilles Stamford, CT 06901 (599) 9-461-3754 (203) 425-9830 (Address and telephone number of principal executive offices) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months and (2) has been subject to such filing requirements for the past 90 days. Yes X No__ -- -- Indicate by check mark whether the registrant is an accelerated filer (as defined in rule 12b-2 under the Securities Exchange Act of 1934). Yes X No__ -- -- As of July 25, 2003, there were outstanding 19,789,104 shares of Common Stock, par value $0.01 per share, of the registrant. =========================================================================== FUEL-TECH N.V. Form 10-Q for the three-month period ended June 30, 2003 INDEX Page ---- PART I. FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) Condensed Consolidated Balance Sheets as of 1 June 30, 2003 and December 31, 2002 Condensed Consolidated Statements of Operations for the 2 Three and Six Month Periods Ended June 30, 2003 and 2002 Condensed Consolidated Statements of Cash Flows for 3 the Six Month Periods Ended June 30, 2003 and 2002 Notes to the Condensed Consolidated Financial Statements 4 Item 2. Management's Discussion and Analysis of 9 Financial Condition and Results of Operations Item 3. Quantitative and Qualitative Disclosures about Market Risk 11 Item 4. Controls and Procedures 11 PART II. OTHER INFORMATION Item 1. Legal Proceedings 12 Item 2. Changes in Securities 12 Item 3. Defaults upon Senior Securities 12 Item 4. Submission of Matters to a Vote of Security Holders 12 Item 5. Other Information 12 Item 6. Exhibits and Reports on Form 8-K 12 SIGNATURES 13 PART I. FINANCIAL INFORMATION Item 1. Financial Statements FUEL-TECH N.V. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands of U.S. dollars, except share data)
June 30, December 31, 2003 2002 ------------- ---------- (Unaudited) ASSETS Current assets: Cash and cash equivalents $ 6,160 $ 10,939 Accounts receivable, net 8,994 8,849 Prepaid expenses and other current assets 1,407 1,164 --------- --------- Total current assets 16,561 20,952 Equipment, net of accumulated depreciation of 5,593 and $5,118, respectively 2,305 2,123 Goodwill, net of accumulated amortization of $924 2,119 2,119 Other 674 675 --------- --------- Total assets $ 21,659 $ 25,869 ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable 3,065 5,065 Accrued expenses 1,322 1,940 --------- --------- Total current liabilities 4,387 7,005 Long-term debt - 1,800 Other liabilities 270 259 --------- --------- Total liabilities 4,657 9,064 Stockholders' equity: Common stock, par value $0.01 per share, authorized 40,000,000 shares, 19,706,892 and 19,613,817 shares issued, respectively . . . . . . . 197 196 Additional paid-in capital . . . . . . . . . . . . . . . . 90,466 90,315 Accumulated deficit. . . . . . . . . . . . . . . . . . . . (73,068) (73,150) Accumulated other comprehensive income . . . . . . . . . . 8 10 Treasury stock . . . . . . . . . . . . . . . . . . . . . . (1,133) (1,098) Nil coupon perpetual loan notes 532 532 --------- -------- Total stockholders' equity 17,002 16,805 Total liabilities and stockholders' equity $ 21,659 $ 25,869 ========= ========= See notes to condensed consolidated financial statements.
1 FUEL-TECH N.V. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (in thousands of U.S. dollars, except share data)
Three Months Ended Six Months Ended June 30 June 30 2003 2002 2003 2002 --------- --------- --------- --------- Net sales. . . . . . . . . . . . . . . . . . . . . . . . . $ 9,968 $ 8,021 $ 18,004 $ 13,242 Costs and expenses: Cost of sales. . . . . . . . . . . . . . . . . . . . . . . 6,411 4,130 11,820 6,713 Selling, general and administrative. . . . . . . . . . . . 2,750 2,653 5,604 5,008 Research and development . . . . . . . . . . . . . . . . . 295 354 606 647 -------- -------- -------- -------- Operating income (loss). . . . . . . . . . . . . . . . . . 512 884 (26) 874 (Loss) income from equity interest in affiliates . . . . . - (15) - 223 Interest expense . . . . . . . . . . . . . . . . . . . . . (9) (34) (25) (77) Other income, net. . . . . . . . . . . . . . . . . . . . . 97 194 134 271 -------- -------- -------- -------- Income before taxes. . . . . . . . . . . . . . . . . . . . 600 1,029 83 1,291 Income taxes . . . . . . . . . . . . . . . . . . . . . . . - - - 50 -------- -------- -------- -------- Net income . . . . . . . . . . . . . . . . . . . . . . . . $ 600 $ 1,029 $ 83 $ 1,341 ======== ========== ========= ======== Net income per common share: Basic . . . . . . . . . . . . . . . . . . . . . . . . $ .03 $ .05 $ - $ .07 ======== ========== ========= ======== Diluted . . . . . . . . . . . . . . . . . . . . . . . $ .03 $ .05 $ - $ .06 ======== ========== ========= ======== Average number of common shares outstanding: Basic . . . . . . . . . . . . . . . . . . . . . . . 19,582,000 19,310,000 19,571,000 19,247,000 ========== ========== ========== ========== Diluted . . . . . . . . . . . . . . . . . . . . . . . 22,147,000 22,733,000 22,089,000 22,675,000 ========== ========== ========== ========== See notes to condensed consolidated financial statements.
2 FUEL-TECH N.V. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (in thousands of U.S. dollars)
Six Months Ended June 30 2003 2002 --------- -------- OPERATING ACTIVITIES Net cash (used in) provided by operating activities . . . . . . . . . . . . . . . . . $ (2,426) $ 2,654 --------- --------- INVESTING ACTIVITIES Repayment from affiliate. . . . . . . . . . . . . . . . . - 250 Proceeds from sale of equipment . . . . . . . . . . . . . - 17 Purchases of equipment and patents. . . . . . . . . . . . (668) (598) --------- ------- Net cash used in investing activities . . . . . . . . . . (668) (331) --------- ------- FINANCING ACTIVITIES Exercise of stock options . . . . . . . . . . . . . . . . 153 465 Purchase of treasury shares . . . . . . . . . . . . . . . (35) - Repayment of borrowings . . . . . . . . . . . . . . . . . (1,800) (450) --------- ------- Net cash (used in) provided by financing activities . . . . . . . . . . . . . . . . . (1,682) 15 --------- ------- Effect of exchange rate fluctuations on cash. . . . . . . (3) 38 --------- ------- NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS . . . . . . . . . . . . . . . . . . . (4,779) 2,376 Cash and cash equivalents at beginning of period. . . . . . . . . . . . . . . . . . . . . . . 10,939 9,338 --------- ------- CASH AND CASH EQUIVALENTS AT END OF PERIOD. . . . . . . . . . . . . . . . . . . . . $ 6,160 $ 11,714 ========== ========= See notes to condensed consolidated financial statements.
3 FUEL-TECH N.V. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS June 30, 2003 (Unaudited) NOTE A: BASIS OF PRESENTATION The accompanying unaudited, condensed, consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the results of operations for the periods covered have been included. Operating results for the six-month period ended June 30, 2003, are not necessarily indicative of the results that may be expected for the year ending December 31, 2003. The balance sheet at December 31, 2002, has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. For further information, refer to the consolidated financial statements and footnotes thereto included in Fuel-Tech N.V.'s annual report on Form 10-K for the year ended December 31, 2002. Fuel-Tech N.V. through its subsidiaries (the "Company"), is a technology company active in the business of air pollution control. The Company, incorporated in 1987 under the laws of the Netherlands Antilles, is registered at Castorweg 22--24 in Cura ao under No. 1334/N.V. 4 NOTE B: EARNINGS PER SHARE DATA Basic earnings per share excludes the dilutive effects of stock options and warrants and of the nil coupon non-redeemable convertible unsecured loan notes. Diluted earnings per share includes the dilutive effect of stock options and warrants and of the nil coupon non-redeemable convertible unsecured loan notes. The following table sets forth the weighted-average shares (in thousands) used in calculating the earnings per share for the three and six-month periods ended June 30, 2003 and 2002:
Three Six Months Ended Months Ended 2003 2002 2003 2002 ------- ------- ------- ------- Basic weighted-average shares. . . 19,582 19,310 19,571 19,247 Conversion of unsecured loan notes 85 85 85 85 Unexercised options and warrants . 2,480 3,338 2,433 3,343 ------- ------- ------- ------- Diluted weighted-average shares. . 22,147 22,733 22,089 22,675 ======= ======= ======= =======
NOTE C: TOTAL COMPREHENSIVE (LOSS) INCOME Total comprehensive income for the Company is comprised of net income, the impact of foreign currency translation, and the change in fair value of the interest rate swap for the three and six-month periods ended June 30, 2003 and 2002. Total comprehensive income was $592,000 and $1,077,000 for the three-month periods ended June 30, 2003 and 2002, respectively. Total comprehensive income was $81,000 and $1,405,000 for the six month periods ended June 30, 2003 and 2002, respectively.
For the three months For the six months ended June 30 ended June 30 -------------------------- -------------------- 2003 2002 2003 2002 --------- ---------- --------- --------- Comprehensive income: Net income . . . . . . . . . $ 600,000 $1,029,000 $ 83,000 $1,341,000 Foreign currency translation (8,000) 36,000 (2,000) 38,000 Change in fair value of interest rate swap . . . . - 12,000 - 26,000 --------- ---------- --------- ---------- $ 592,000 $1,077,000 $ 81,000 $1,405,000 ========= ========== ========= ========== 5
NOTE D: DERIVATIVE FINANCIAL INSTRUMENTS Interest Rate Risk Management: The Company is exposed to interest rate risk due to its long-term debt arrangement. The Company does not currently use any derivative instruments to manage exposure to interest rate changes. Foreign Currency Risk Management: The Company's earnings and cash flow are subject to fluctuations due to changes in foreign currency exchange rates. The Company does not enter into foreign currency forward contracts or into foreign currency option contracts to manage this risk due to the immaterial nature of the transactions involved. 6 NOTE E: STOCK-BASED COMPENSATION Fuel Tech accounts for stock option grants in accordance with Accounting Principles Board (APB) Opinion No. 25, "Accounting for Stock Issued to Employees." Under Fuel Tech's current plans, options may be granted at not less than the fair market value on the date of grant, and therefore, no compensation expense is recognized for the stock options granted. If compensation expense for Fuel Tech's plans had been determined based on the fair value at the grant dates for awards under its plans, consistent with the method described in SFAS No. 123, "Accounting for Stock-Based Compensation," Fuel Tech's net income (loss) and income (loss) per share would have been adjusted as follows for the three and six-month periods ended June 30, 2003 and 2002:
For the three months For the six months (in thousands) . . . . . ended June 30 ended June 30 2003 2002 2003 2002 ------- ------- ------ ------ Net income (loss) As reported. . . . . . $ 600 $ 1,029 $ 83 $ 1,341 As adjusted. . . . . . 334 596 (339) 760 Basic and diluted income (loss) per share: Basic - as reported. . $ .03 $ .05 $ .00 $ .07 Basic - as adjusted. . $ .02 $ .03 $ (.02) $ .04 Diluted - as reported. $ .03 $ .05 $ .00 $ .06 Diluted - as adjusted. $ .02 $ .03 $ (.02) $ .03 In accordance with the provisions of SFAS No. 123, the "As adjusted" disclosures include only the effect of stock options granted after 1994. The application of the "As adjusted" disclosures presented above are not representative of the effects SFAS No. 123 may have on such operating results in future years due to the timing of stock option grants and considering that options vest over a period of immediately to five years.
NOTE F: DEBT Fuel Tech, Inc. (FTI) has a $10.0 million revolving credit facility expiring July 31, 2004, which is collateralized by all personal property owned by FTI. FTI can use this facility for cash advances and standby letters of credit. Cash advances under this facility bear interest at the bank's prime rate, or at an optional rate that can be selected by FTI which is based on the bank's Interbank Offering Rate plus 2.25%. The borrowings under this facility are collateralized by all personal property owned by FTI. During the quarter ended June 30, 2003, FTI repaid all outstanding borrowings on the revolving credit facility. 7 NOTE G: BUSINESS SEGMENT AND GEOGRAPHIC DISCLOSURES The Company operates in one business segment providing air pollution control chemicals and equipment. Information concerning the Company's operations by geographic area is provided below. Operating income (loss) represents sales less cost of products sold and operating expenses. Foreign operating expenses include direct expenses incurred outside of the United States by foreign corporations controlled by the Company plus an allocation of selling and general expenses incurred in the United States that are directly related to the foreign operations. Assets are those directly associated with operations in the geographic area.
For the three For the six months ended months ended June 30 June 30 ------------------------------- -------------------------- 2003 2002 2003 2002 --------------- -------------- ------------ ------------ Revenues: United States. . . . . . $ 8,948,000 $ 7,375,000 $15,858,000 $11,978,000 Foreign. . . . . . . . . 1,020,000 646,000 2,146,000 1,264,000 -------------- ------------- ----------- ----------- $ 9,968,000 $ 8,021,000 $18,004,000 $13,242,000 ============== ============= =========== =========== Operating income (loss): United States. . . . . . $ 669,000 $ 1,037,000 $ 97,000 $ 1,041,000 Foreign. . . . . . . . . (157,000) (153,000) (123,000) (167,000) -------------- ------------- ----------- ----------- $ 512,000 $ 884,000 $ (26,000) $ 874,000 ============== ============= =========== =========== June 30, December 31, 2003 2002 Assets: United States. . . . . . $ 20,026,000 $ 24,393,000 Foreign. . . . . . . . . 1,633,000 1,476,000 -------------- ------------- $ 21,659,000 $ 25,869,000 ============== =============
8 FUEL-TECH N.V. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations RESULTS OF OPERATIONS Net sales for the three months ended June 30, 2003 and 2002 were $9,968,000 and $8,021,000, respectively, while net sales for the six months ended June 30, 2003 and 2002 were $18,004,000 and $13,242,000, respectively. The improvement is attributable to an increase in domestic NOx reduction utility project revenues as project bookings from 2002 and 2003 generated revenues from their various phases of completion. NOx reduction utility revenue in 2002 and 2003 is being favorably impacted by the Environmental Protection Agency's (EPA) SIP (State Implementation Plan) Call regulation (discussed further below) that requires utilities and large industrial facilities in 19 states to reduce NOx emissions by May 31, 2004, and the Company expects to be impacted favorably by this regulation throughout 2003 and beyond. Fuel treatment chemical revenue for the six-month period ended June 30, 2003 was impacted significantly by the favorable performance at Western Farmers' Hugo Station, a powder-river basin coal-fueled utility. The Company believes that utilities burning Western coals represent the largest market opportunity for its fuel treatment chemical business and that penetration into this market remains a priority. The Company is now beginning to see the results of a decision made in 2002 to address this market opportunity by investing in additional, experienced human resources to service the market place. In addition, during the quarter the Company announced that it had signed a strategic agreement with Peabody Energy to work together on a case-by-case basis to jointly market the Company's patented Targeted-In-Furnace Injection (TIFI) technology to units using high sodium coals. The Company's TIFI technology alleviates the slagging and fouling issues associated with burning coals that are high in low-melting- point ash constituents, such as sodium. This agreement lends further credibility to the capability of the TIFI process to control the formation of slag deposits in boilers burning western coals. The Company expects additional demonstrations of this technology to commence in the second half of the year. The "SIP Call" is the federal mandate that, when introduced in 1998, required 22 states to reduce NOx emissions by May 2003. This mandate was an extension of Phase II of Title I of the CAAA. In May 1999 a stay was imposed on this regulation. On March 3, 2000, an appellate court of the D.C. Circuit upheld the validity of the SIP Call for 19 of the 22 states and, on June 22, 2000, the same court made a final ruling upholding the EPA's SIP call regulation and denying the appeal of the states and utilities. Subsequent to this court ruling, the stay on the SIP Call was lifted. Although the NOx reduction requirement date was moved back one year to May 31, 2004, nineteen states were required to complete and issue their State Implementation Plans for NOx reduction by October of 2000. These plans, which the EPA had until October 2001 to approve, will potentially impact 700 to 800 utility boilers and 400 to 500 large industrial units. In February 2001, the United States Supreme Court, in a unanimous decision, upheld EPA's authority to revise the National Ambient Air Quality Standard for ozone to 0.080 parts per million averaged through an eight-hour period from the current 0.120 parts per million for a one-hour period. This more stringent standard provides clarity and impetus for air pollution control efforts well beyond the current ozone attainment requirement of 2007. In keeping with this trend, the Supreme Court, only days later, denied industry's attempt to again stay the SIP Call, effectively exhausting all means of appeal. Based on these regulatory developments, the Company has experienced an increase in project bookings, and related revenues, in 2002 and 2003. The Company expects revenues due to SIP Call NOx reduction requirements to continue into 2006, well past the May, 2004 deadline, as utilities continue to look for low-capital cost solutions to reduce NOx. Cost of sales as a percentage of net sales for the three-month period ended June 30, 2003 increased to 64% from 51% versus the same period of the prior year. For the six-month period ended June 30, 2003, the percentage increased to 66% from 51% versus the same period of the prior year. This increase reflects a change in product mix within the NOx reduction project business. A significantly larger percentage of the revenues for the second quarter and first six months of 2003 were generated by turnkey projects versus the comparable period in 2002. When the Company is responsible for the turnkey installation of the equipment as part of the project scope the overall project margin becomes diluted. Installation scope is not afforded the same margin in the market place as is the sale of the Company's patented technology. 9 Selling, general and administrative expenses were $2,750,000 and $2,653,000, respectively, for the three months ended June 30, 2003 and 2002, and were $5,604,000 and $5,008,000 respectively for the six months ended June 30, 2003 and 2002. The increase is due primarily to the addition of sales resources for the fuel treatment chemical business and, to a lesser degree, to the addition of resources in support of the marketing and development of the Company's ACUITIV advanced visualization software. Research and development expenses for the quarter and six months ended June 30, 2003 were slightly behind the levels of the prior year. The Company continues to pursue commercial applications for its technologies outside of its traditional markets, with a particular focus on its ACUITIV advanced visualization software. The ACUITIV software product was commercially introduced on June 6, 2002, and the Company recently received its second commercial order for the software. The software is currently being demonstrated at several sites. In addition, ACUITIV version 3.3 was recently released. This new release adds significant functionality which is expected to broaden market acceptance. Although the validity of the product has been confirmed, the Company does not expect revenues related to this product to be material for the remainder of the year. In the second quarter of 2002, the Company recognized a loss of $15,000 on its 49 percent ownership interest in Fuel Tech CS Gmbh. Through the first six months of 2002, the Company recognized income of $250,000 on its equity investment in Clean Diesel Technologies, Inc. (CDT), its 15 percent-owned affiliate, which was partially offset by a loss of $27,000 that was realized on its 49 percent ownership interest in Fuel Tech CS Gmbh. The income in 2002's first quarter from CDT resulted from CDT's repayment of loans made by the Company to CDT in 2000 and 2001. Because the Company's pro-rata share of CDT's losses reduced the carrying value of the loans to zero at December 31, 2001, the entire loan repayment was recorded as equity income in the first quarter of 2002. In the first six months of 2003, the Company did not realize any income or loss from its equity investments. The carrying value of these investments is zero at June 30, 2003. Interest expense for the three and six month periods ended June 30, 2003 was reduced from the comparable periods in 2002 due to a reduction in the Company's average outstanding debt balance, as well as to a reduction in short term interest rates. In the second quarter of the year, the Company paid off the entirety of its outstanding debt balance. The decline in other income and (expense) for the quarter and six months ended June 30, 2003 versus the prior year was due primarily to a reduction in interest income resulting from the decrease in short-term rates noted above. No provision for federal or state income taxes was recorded during the three and six month periods ended June 30, 2003 due to the existence of net operating loss carryforwards. In the first quarter of 2002, an income tax benefit of $50,000 was recorded which represented a reduction in the reserve for prior years' state income tax refunds receivable. LIQUIDITY AND SOURCES OF CAPITAL For the six months ended June 30, 2003, the Company used cash for operating activities in the amount of $2,426,000, while $2,654,000 was provided by operating activities for the same period in 2002. The use of cash for operating activities in 2003 stems largely from a reduction in accounts payable and accrued expenses. At June 30, 2003 and December 31, 2002, the Company had cash and cash equivalents of $6,160,000 and $10,939,000, respectively, while working capital for the same two periods of time was $12,174,000 and $13,947,000, respectively. The decline in cash from December 31, 2002 was driven by the repayment of $1,800,000 in debt and by the reduction in accounts payable and accrued expenses both of which were noted above. By repaying the debt, the Company's availability under its credit facility increased by $1,800,000. 10 FORWARD-LOOKING STATEMENTS Statements in this Form 10-Q that are not historical facts, so-called "forward-looking statements," are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that all forward-looking statements involve risks and uncertainties, including those detailed in the Company's filings with the Securities and Exchange Commission. See "Risk Factors of the Business" in Item 1, "Business," and also Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Company's Form 10-K for the year ended December 31, 2002. Item 3. Quantitative and Qualitative Disclosures about Market Risk Please refer to Note D. Item 4. Controls and Procedures Within 90 days prior to the filing date of this report, the Company's certifying officers performed an evaluation of the effectiveness of the Company's disclosure controls and procedures. The disclosure controls and procedures were determined to be sufficient to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to the certifying officers by others within those entities, particularly during the period in which this quarterly report is being prepared. There were no significant changes in the registrant's internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. 11 PART II. OTHER INFORMATION Item 1. Legal Proceedings None Item 2. Changes in Securities None Item 3. Defaults upon Senior Securities None Item 4. Submission of Matters to a Vote of Security Holders At the Fuel Tech Annual Meeting, held on May 28, 2003, 15,630,462 common shares, par value $0.01 per share, or 79.42% of Fuel Tech's issued and outstanding common shares as of May 27, 2003, were represented in person or by proxy, and: (i) the proposal to approve the Report of Management for the year ended December 31, 2002 was approved by a vote of 15,618,174 for, 3,031 against and 9,257 abstaining; (ii) the proposal to approve the Financial Statements for the year ended December 31, 2002 was approved by a vote of 15,616,774 for, 2,531 against and 11,157 abstaining; (iii) the proposal to elect seven nominees as Managing Directors and to fix their compensation was approved by a vote as to each individual nominee, as follows:
Shares Shares Name. . . . . . . . . . . For Withheld ------------------------- ---------- -------- Douglas C. Bailey . . . . 15,574,771 55,691 Ralph E. Bailey . . . . . 15,589,771 40,691 Miguel Espinosa . . . . . 15,453,904 176,558 Charles W. Grinnell . . . 15,587,671 42,791 Samer S. Khanachet. . . . 15,623,621 6,841 Thomas S. Shaw. . . . . . 15,621,621 8,841 Tarma Trust Management NV 15,426,489 203,973 (iv) the proposal to approve the appointment of Ernst & Young LLP as Independent Auditors for the year 2003 and to approve their compensation was approved by a vote of 15,607,632 for, 17,130 against and 5,700 abstaining.
Item 5. Other Information None Item 6. Exhibits and Reports on Form 8-K a. Exhibits Exhibit 31.1 and 31.2 are filed herewith Exhibit 32 is furnished herewith b. Reports on Form 8-K The Company filed form 8-K on May 6, 2003. This filing included the Company's first quarter 2003 earnings press release. 12 FUEL-TECH N.V. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Date: August 5, 2003 By: /s/ Ralph E. Bailey ---------------------- Ralph E. Bailey Chairman, Managing Director and Chief Executive Officer Date: August 5, 2003 By: /s/ Scott M. Schecter ------------------------ Scott M. Schecter Chief Financial Officer, Vice President and Treasurer 13