Fuel-Tech N.V. Reports Profitable Fourth Quarter andYear.

STAMFORD, Conn.--(BUSINESS WIRE)--March 25, 1999--Fuel-Tech N.V. (NASDAQ:FTEK), a world leader in air pollution control technology, today reported a profitable fourth quarter and year ended Dec. 31, 1998, which includes eight months as an operating company, following Fuel Tech's May 1, 1998 acquisition

For the fourth quarter, Fuel Tech reported consolidated net income of $268,000, or two cents per basic share, or one cent per diluted share, compared with a consolidated net loss of $1,307,000 or 11 cents per basic and diluted share for the same quarter last year.

Fuel Tech's 1998 earnings, before a non-cash tax charge, were $1,902,000, compared with a net loss of $2,571,000 in 1997. Sales in 1998 totaled $25,864,000, reflecting the consolidation of its former joint venture with Nalco Chemical Company. Sales for the 1997 quarter and year represented only royalties from NFT. Earnings before the non-cash tax charge in 1998's fourth quarter were $721,000 on sales of $8,632,000 compared with a net loss of $1,307,000 on sales of $52,000 in 1997. Net income for 1998 was $539,000, or three cents per basic and diluted share, compared with a loss of $2,571,000 or 21 cents per basic and diluted share for the same quarter in 1997. Excluding the non-cash tax provision, basic earnings per share for the quarter and year end would be four cents and 12 cents, respectively.

The $1,363,000 non-cash tax charge recorded in 1998 results from an accounting requirement that the benefit realized in 1998 from tax loss carryforwards generated prior to the company's 1985 quasi-reorganization be recorded as an increase to additional paid-in capital rather than as an offset to tax expense in the statement of operations. In reporting its operating results for the first three quarters of 1998, the company had previously reflected this tax benefit in its statement of operations. Net income (loss) for each quarter, adjusted to reflect the tax benefit as an increase to additional paid-in capital, are as follows:

                             First           Second           Third
Net income (loss):
    As reported         $(199,000)         $933,000        $446,000
    As adjusted         $(260,000)         $452,000         $78,000


Earnings (loss) per share:
    As reported
       Basic               $(0.02)            $0.06           $0.03
       Diluted             $(0.02)            $0.05           $0.02

    As adjusted
       Basic               $(0.02)            $0.03            --
       Diluted             $(0.02)            $0.03            --

-0-

In 1998, Fuel Tech utilized almost $4.0 million of the approximately $6.0 million of tax loss carryforwards generated prior to the company's 1985 quasi-reorganization. The company therefore expects a significantly lower tax rate on this non-cash charge in 1999.

Full year results also include a minority interest of $112,000, representing Nalco Chemical Company's 50 percent share of NFT's earnings for the first four months of the year. Results for the quarter and year include non-cash charges of $219,000 and $500,000 respectively, related to Fuel Tech's equity interest in the operating results of Clean Diesel Technologies, Inc. (CDT), a Fuel Tech affiliate. As Fuel Tech's basis in CDT has been reduced to zero, there will not be any charges in future periods related to this investment.

Total assets as of Dec. 31, 1998 were $19,153,000, up from $5,947,000 on the same date a year ago, and shareholders' equity rose to $10,316,000 at Dec. 31, 1998 from $5,246,000 at Dec. 31, 1997.

The company noted that the increases it recorded for the fourth quarter and year in sales, cost of sales, operating expenses and assets included the effect of substantially improved operating performance in 1998 and the consolidation of NFT's operating results as a result of Fuel Tech's acquisition of the 50 percent of Nalco Fuel Tech it did not previously own. The increase in 1998 sales, assuming NFT had also been consolidated in 1997, would have been 50.3 percent and 28.9 percent for the quarter and year respectively.

Ralph E. Bailey, chairman and chief executive officer of Fuel Tech, said, "I am very pleased that Fuel Tech met performance expectations by achieving nearly $2 million in pretax profit in 1998, a turnaround of nearly $4.5 million. At the same time, Fuel Tech's balance sheet dramatically improved, due to Fuel Tech's operating performance, the transaction with Nalco and the investment by principals of American Bailey Corporation.

"Of the orders received so far in 1999 for NOx control, more than $3.7 million is for systems that will enable U. S. utilities to meet mandatory near-and medium-term deadlines for compliance with U. S. clean air regulations. We are also generating new and repeat orders from municipal waste and steel facilities, and are successfully pursuing diversification into markets that are not dependent on regulation.

"We have set ambitious growth plans for 1999, and expect to report significant increases in business in both our NOx control and FUEL CHEM(tm) product lines.

Fuel-Tech N.V. is engaged in the development and commercialization of proprietary air pollution control technologies. Its NOxOUT(R) Process is a proven technology that has established Fuel Tech as the leader in post-combustion nitrogen oxide (NOx) control systems. New technologies based on the NOxOUT(R) Process have also been developed to improve boiler efficiency. The company's technologies are currently installed at more than 250 combustion units worldwide.

FUEL-TECH N.V.
Consolidated Statements of Operations

                 For the Three Months Ended       For the Year Ended
                    12/31/98      12/31/97      12/31/98      12/31/97
                         (Unaudited)

Net sales        $ 8,632,000   $      --    $ 25,864,000   $      --
Royalty income
 from NFT               --          52,000          --         148,000
                 -----------   -----------   -----------   -----------
                   8,632,000        52,000    25,864,000       148,000

Costs and expenses:
 Cost of sales     5,182,000          --      14,334,000           --
 Selling,
  general, and
  administrative   2,220,000       751,000     7,897,000     2,064,000
 Research and
  development        240,000          --       1,030,000          --
                 -----------   -----------   -----------   -----------
                   7,642,000       751,000    23,261,000     2,064,000
                 -----------   -----------   -----------   -----------

Operating
 (loss) income       990,000     (699,000)     2,603,000   (1,916,000)
                 -----------   -----------   -----------   -----------

Loss from equity
 interest in
 affiliates        (219,000)     (658,000)     (500,000)     (853,000)
Interest expense    (76,000)       (1,000)     (206,000)          --
Other net
 (expense) income     26,000        51,000       117,000       198,000
                 -----------   -----------   -----------   -----------
Income (loss)
 before minority
 interest and taxes  721,000   (1,307,000)     2,014,000   (2,571,000)
Less: Minority
 interest in NFT        --            --       (112,000)          --
                 -----------   -----------   -----------   -----------
Income (loss)
 before taxes        721,000   (1,307,000)     1,902,000   (2,571,000)
Non-cash income
 tax charge        (453,000)          --     (1,363,000)          --
                 -----------   -----------   -----------   -----------
Net income (loss)  $ 268,000 $ (1,307,000)    $  539,000 $ (2,571,000)
                 ===========   ===========   ===========   ===========

Net income (loss) per share:
    Basic               $.02        ($.11)          $.03        ($.21)
    Diluted             $.01        ($.11)          $.03        ($.21)

Average number of
 shares outstanding:
    Basic         17,142,000    12,391,000    15,680,000    12,387,000
    Diluted       18,996,000    12,391,000    17,437,000    12,387,000


FUEL-TECH N.V.
CONSOLIDATED BALANCE SHEETS

                                 December 31,       December 31,
                                    1998               1997
                                    ----               ----

ASSETS

Cash and cash equivalents       $  5,792,000       $  1,947,000
Other current assets               9,851,000            520,000
                                ------------       ------------

Total current assets              15,643,000          2,467,000
                                ------------       ------------

Property, plant and equipment      1,406,000             16,000

Intangible assets and
other non-current assets           2,104,000          3,464,000
                                ------------       ------------

Total assets                    $ 19,153,000       $  5,947,000
                                ============       ============


LIABILITIES AND SHAREHOLDERS' EQUITY

Note payable                    $  1,000,000       $       --

Accounts payable and
 accrued expenses                  5,596,000            701,000
                                ------------       ------------

Total current liabilities          6,596,000            701,000

Note payable                       2,000,000               --

Other non-current liabilities        241,000               --
                                ------------       ------------

Total liabilities                  8,837,000            701,000

Shareholders' equity              10,316,000          5,246,000

Total liabilities and
 shareholders' equity           $ 19,153,000       $  5,947,000
                                ============       ============