Perma-Fix Environmental Services, Inc.
(NASDAQ:PESI) (the “Company”) today announced financial results for
the first quarter ended March 31, 2018.
Q1 2018 financial highlights:
- Gross profit increases to $3.3 million versus $2.7 million for
the first quarter of 2017
- Gross margin increases 480 basis points to 26.2%
- Reports net income attributable to common stockholders of
$136,000 or $0.01 per share versus net loss of $727,000 or ($0.06)
per share, for the same period in 2017
- Waste treatment backlog increases 34% versus the same period
last year
- Achieves Adjusted EBITDA (defined below) of $789,000
Mark Duff, President and CEO of the Company,
commented, “I am pleased to report we achieved profitability for
the first quarter of 2018, which reflects the success of our
efforts to streamline operations while broadening our market base
in both segments. Our revenue remained unchanged over Q1 2017 due
to stability in our Services Segment, and strong backlog at our
treatment facilities as we entered the first quarter. We
continue to see our backlog grow within the Treatment Segment,
which we believe provides us good visibility into the second
quarter and second half of the year. We are further
encouraged by the improved budget within the Department of Energy
as well as defense clients that are beginning to move more waste
while initiating remediation activities. As a result, we expect a
solid year in our Treatment Segment. Within the Services
Segment, this was an active quarter for project bids with several
new proposal submittals, which we believe will provide potential
for increased field projects this summer. Recent initiatives to
increase efficiency at our treatment facilities coupled with
reduced costs from closure of the M&EC facility, resulted in an
improvement in both gross profit, and an increase in gross margin
of more than 480 basis points. Accordingly, we generated
$789,000 of adjusted EBITDA and achieved positive net income
attributable to common shareholders.”
“Looking ahead, we continue to expand our
offering, and are actively pursuing new opportunities that we
believe will help drive growth and further diversify our revenues.
The expansion initiatives at each of our treatment facilities
should come on line in the third quarter, which we expect will help
to further enhance our offering to clients and increase the
addressable market.”
Financial Results
Revenue was $12.7 million for the first quarter
of 2017 and 2018. Revenue from the Services Segment increased $1.0
million to $3.7 million for the first quarter of 2018 from $2.7
million for the same period in 2017. Revenue for the Treatment
Segment decreased to $9.0 million for the first quarter of 2018
from $10.0 million for the same period in 2017 primarily from
decreased waste volume.
Gross profit for the first quarter of 2018 was
$3.3 million versus $2.7 million for the first quarter of 2017
primarily due to higher revenue in the Services Segment. Gross
margin increased to 26.2% from 21.4% for the same period last year
primarily due to higher revenue achieved within our Services
Segment and the reduction in our fixed costs in our Treatment
Segment.
Operating income for the first quarter of 2018
was $317,000 versus operating loss of $520,000 for the first
quarter of 2017. Net income attributable to common stockholders for
the first quarter of 2018 was $136,000 or $0.01 per share versus
net loss of $727,000 or ($0.06) per share, for the same period in
2017.
The Company reported Adjusted EBITDA of $789,000
from continuing operations at March 31, 2018, as compared to
Adjusted EBITDA of $835,000 from continuing operations during the
corresponding period of 2017. The Company defines EBITDA as
earnings before interest, taxes, depreciation and amortization.
Adjusted EBITDA is defined as EBITDA before research and
development costs related to the Medical Isotope project.
Both EBITDA and Adjusted EBITDA are not measures of performance
calculated in accordance with Generally Accepted Accounting
Principles in the United States of America (“GAAP”), and should not
be considered in isolation of, or as a substitute for, earnings as
an indicator of operating performance or cash flows from operating
activities as a measure of liquidity. The Company believes the
presentation of EBITDA and Adjusted EBITDA is relevant and useful
by enhancing the readers’ ability to understand the Company’s
operating performance. The Company’s management utilizes EBITDA and
Adjusted EBITDA as means to measure performance. The Company’s
measurements of EBITDA and Adjusted EBITDA may not be comparable to
similar titled measures reported by other companies. The table
below reconciles EBITDA and Adjusted EBITDA, both non-GAAP
measures, to GAAP numbers for income (loss) from continuing
operations for the three months ended March 31, 2018 and 2017.
|
|
Quarter Ended |
|
|
March 31, |
(In
thousands) |
|
|
2018 |
|
|
|
2017 |
|
Income (loss) from
continuing operations |
|
$ |
253 |
|
|
$ |
(675 |
) |
|
|
|
|
|
Adjustments: |
|
|
|
|
Depreciation & amortization |
|
|
372 |
|
|
|
1,155 |
|
Interest
income |
|
|
(49 |
) |
|
|
(35 |
) |
Interest
expense |
|
|
53 |
|
|
|
100 |
|
Interest
expense - financing fees |
|
|
9 |
|
|
|
9 |
|
Income
tax expense |
|
|
51 |
|
|
|
81 |
|
|
|
|
|
|
EBITDA |
|
$ |
689 |
|
|
$ |
635 |
|
|
|
|
|
|
Research and development costs related to |
|
|
|
Medical
Isotope project |
|
|
100 |
|
|
|
200 |
|
|
|
|
|
|
Adjusted EBITDA |
|
$ |
789 |
|
|
$ |
835 |
|
|
|
|
|
|
The tables below present certain unaudited financial information
for the business segments, which excludes allocation of corporate
expenses:
|
|
Quarter Ended |
|
Quarter Ended |
|
|
March 31, 2018 |
|
March 31, 2017 |
|
|
(Unaudited) |
|
(Unaudited) |
(In
thousands) |
|
Treatment |
|
Services |
|
|
Medical |
|
Treatment |
|
Services |
|
|
Medical |
Revenues |
|
$ |
8,959 |
|
$ |
3,699 |
|
|
$ |
— |
|
|
$ |
10,034 |
|
$ |
2,673 |
|
|
$ |
— |
|
Gross
profit |
|
2,780 |
|
|
541 |
|
|
|
— |
|
|
|
2,687 |
|
|
32 |
|
|
|
— |
|
Segment
profit (loss) |
|
1,693 |
|
|
(86 |
) |
|
|
(100 |
) |
|
|
1,522 |
|
|
(707 |
) |
|
|
(200 |
) |
Conference Call
Perma-Fix will host a conference call at 11:00
a.m. ET on Wednesday, May 9, 2018. The call will be available on
the Company’s website at www.perma-fix.com, or by calling
877-407-0778 for U.S. callers, or +1 201-689-8565 for international
callers. The conference call will be led by Mark J. Duff,
Chief Executive Officer, Dr. Louis F. Centofanti, Executive Vice
President of Strategic Initiatives, and Ben Naccarato, Vice
President and Chief Financial Officer of Perma-Fix Environmental
Services, Inc.
A webcast will also be archived on the Company’s
website and a telephone replay of the call will be available
approximately one hour following the call, through 11:00 p.m. May
15, 2018, and can be accessed by calling: 877-481-4010 (U.S.
callers) or +1 919-882-2331 (international callers) and entering
conference ID: 29065.
About Perma-Fix Environmental
Services
Perma-Fix Environmental Services, Inc. is a
nuclear services company and leading provider of nuclear and mixed
waste management services. The Company's nuclear waste
services include management and treatment of radioactive and mixed
waste for hospitals, research labs and institutions, federal
agencies, including the DOE, the Department of Defense ("DOD"), and
the commercial nuclear industry. The Company’s nuclear services
group provides project management, waste management, environmental
restoration, decontamination and decommissioning, new build
construction, and radiological protection, safety and industrial
hygiene capability to our clients. The Company operates three
nuclear waste treatment facilities and provides nuclear services at
DOE, DOD, and commercial facilities, nationwide.
Please visit us at http://www.perma-fix.com.
This press release contains “forward‑looking
statements” which are based largely on the Company's expectations
and are subject to various business risks and uncertainties,
certain of which are beyond the Company's control. Forward-looking
statements generally are identifiable by use of the words such as
“believe”, “expects”, “intends”, “anticipate”, “plan to”,
“estimates”, “projects”, and similar expressions.
Forward‑looking statements include, but are not limited to: good
visibility into the second quarter and second half of the year;
potential for increased field projects this summer; continue growth
of backlog at our treatment facilities; encouraged by the improved
budget within the Department of Energy as well as defense clients;
expect a solid year in our Treatment Segment; expand our offering
and pursuing new opportunities that will help drive growth and
further diversify our revenues; expansion initiatives at each our
treatment facilities should come on line in the third quarter; and
reduced overhead.These forward‑looking statements are intended to
qualify for the safe harbors from liability established by the
Private Securities Litigation Reform Act of 1995. While the Company
believes the expectations reflected in this news release are
reasonable, it can give no assurance such expectations will prove
to be correct. There are a variety of factors which could cause
future outcomes to differ materially from those described in this
release, including, without limitation, future economic conditions;
industry conditions; competitive pressures; our ability to apply,
commercialize, and market our new technologies; the government or
such other party to a contract granted to us fails to abide by or
comply with the contract or to deliver waste as anticipated under
the contract or terminates existing contracts; Our Medical Segment
obtains necessary financing or capital to complete its development;
regulatory approvals; that Congress provides continuing funding for
the DOD’s and DOE’s remediation projects; ability to obtain new
foreign and domestic remediation contracts; and the additional
factors referred to under “Risk Factors” and "Special Note
Regarding Forward-Looking Statements" of our 2017 Form 10-K and
Form 10-Q for quarter ended March 31, 2018. The Company makes no
commitment to disclose any revisions to forward‑looking statements,
or any facts, events or circumstances after the date hereof that
bear upon forward‑looking statements.
Please visit us on the World Wide Web at
http://www.perma-fix.com.
FINANCIAL TABLES FOLLOW
Contacts:David K. Waldman-US
Investor RelationsCrescendo Communications, LLC(212) 671-1021
Herbert Strauss-European Investor Relationsherbert@eu-ir.com+43
316 296 316
PERMA-FIX ENVIRONMENTAL SERVICES,
INC.CONSOLIDATED STATEMENTS OF
OPERATIONS(UNAUDITED)
|
|
Three Months EndedMarch 31, |
(Amounts
in Thousands, Except for Per Share Amounts) |
|
2018 |
|
|
|
2017 |
|
|
|
|
|
|
|
Revenues |
$ |
12,658 |
|
|
$ |
12,707 |
|
Cost of goods sold |
|
9,337 |
|
|
|
9,988 |
|
Gross
profit |
|
3,321 |
|
|
|
2,719 |
|
|
|
|
|
|
|
Selling, general and
administrative expenses |
|
2,780 |
|
|
|
2,850 |
|
Research and
development |
|
232 |
|
|
|
389 |
|
Gain on disposal of
property and equipment |
|
(8 |
) |
|
|
— |
|
Income
(loss) from operations |
|
317 |
|
|
|
(520 |
) |
|
|
|
|
|
|
Other income
(expense): |
|
|
|
|
|
Interest
income |
|
49 |
|
|
|
35 |
|
Interest
expense |
|
(53 |
) |
|
|
(100 |
) |
Interest
expense-financing fees |
|
(9 |
) |
|
|
(9 |
) |
Income
(loss) from continuing operations before taxes |
|
304 |
|
|
|
(594 |
) |
Income
tax expense |
|
(51 |
) |
|
|
(81 |
) |
Income
(loss) from continuing operations, net of taxes |
|
253 |
|
|
|
(675 |
) |
|
|
|
|
|
|
Loss from discontinued
operations, net of taxes of $0 |
|
(157 |
) |
|
|
(131 |
) |
Net
income (loss) |
|
96 |
|
|
|
(806 |
) |
|
|
|
|
|
|
Net loss attributable
to non-controlling interest |
|
(40 |
) |
|
|
(79 |
) |
|
|
|
|
|
|
Net Income
(loss) attributable to Perma-Fix Environmental Services, Inc. |
|
|
|
|
common
stockholders |
$ |
136 |
|
|
$ |
(727 |
) |
|
|
|
|
|
|
Net income (loss) per
common share attributable to Perma-Fix |
|
|
|
|
|
Environmental Services, Inc. stockholders - basic and diluted: |
|
|
|
|
|
|
|
|
|
|
|
Continuing operations |
$ |
.02 |
|
|
$ |
(.05 |
) |
Discontinued operations |
|
(.01 |
) |
|
|
(.01 |
) |
Net
income (loss) per common share |
$ |
.01 |
|
|
$ |
(.06 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Number of common shares used in computing net income (loss) per
share: |
|
|
|
|
Basic |
|
11,747 |
|
|
|
11,681 |
|
Diluted |
|
11,773 |
|
|
|
11,681 |
|
|
|
|
|
|
|
PERMA-FIX ENVIRONMENTAL SERVICES,
INC.CONSOLIDATED BALANCE SHEET
|
|
(Unaudited) |
|
(Audited) |
|
|
March 31, |
|
December 31, |
(Amounts
in Thousands, Except for Share and Per Share Amounts) |
|
|
2017 |
|
|
|
2017 |
|
|
|
|
|
|
ASSETS |
|
|
|
|
Current assets: |
|
|
|
|
Cash and
equivalents |
|
$ |
2,916 |
|
|
$ |
1,063 |
|
Account
receivable, net of allowance for doubtful |
|
|
|
|
accounts
of $725 and $720, respectively |
|
4,762 |
|
|
|
7,940 |
|
Unbilled
receivables |
|
|
4,574 |
|
|
|
4,547 |
|
Other
current assets |
|
|
3,621 |
|
|
|
3,674 |
|
Assets of
discontinued operations included in current assets, net of
allowance |
|
|
|
|
for
doubtful accounts of $0 for each period presented |
|
|
94 |
|
|
|
89 |
|
Total
current assets |
|
|
15,967 |
|
|
|
17,313 |
|
|
|
|
|
|
Net property and
equipment |
|
|
14,830 |
|
|
|
14,870 |
|
Property
and equipment of discontinued operations, net of accumulated |
|
|
|
|
depreciation of $10 for each period presented |
|
|
81 |
|
|
|
81 |
|
Intangibles and other
assets |
|
|
26,928 |
|
|
|
27,079 |
|
Other assets related to
discontinued operations |
|
|
176 |
|
|
|
195 |
|
Total
assets |
|
$ |
57,982 |
|
|
$ |
59,538 |
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
|
|
|
Current
liabilities |
|
$ |
17,547 |
|
|
$ |
18,676 |
|
Current liabilities
related to discontinued operations |
|
|
892 |
|
|
|
905 |
|
Total
current liabilities |
|
|
18,439 |
|
|
|
19,581 |
|
|
|
|
|
|
Long-term
liabilities |
|
|
10,869 |
|
|
|
11,152 |
|
Long-term liabilities
related to discontinued operations |
|
|
351 |
|
|
|
359 |
|
Total
liabilities |
|
|
29,659 |
|
|
|
31,092 |
|
Commitments and Contingencies |
|
|
|
|
Series B Preferred
Stock of subsidiary, $1.00 par value; 1,467,396 |
|
|
|
|
shares
authorized, 1,284,730 shares issued and outstanding, |
|
|
|
|
liquidation value $1.00 per share plus accrued and unpaid |
|
|
|
|
dividends
of $1,011 and $955, respectively |
|
|
1,285 |
|
|
|
1,285 |
|
Stockholders’
equity: |
|
|
|
|
Preferred
Stock, $.001 par value; 2,000,000 shares authorized, |
|
|
|
|
no shares
issued and outstanding |
|
|
— |
|
|
|
— |
|
Common
Stock, $.001 par value; 30,000,000 shares authorized, |
|
|
|
|
11,754,697 and 11,738,623 shares issued, respectively; |
|
|
|
|
11,747,055 and 11,730,981 shares outstanding, respectively |
|
|
12 |
|
|
|
12 |
|
Additional paid-in capital |
|
|
106,523 |
|
|
|
106,417 |
|
Accumulated deficit |
|
|
(78,074 |
) |
|
|
(77,893 |
) |
Accumulated other comprehensive loss |
|
|
(120 |
) |
|
|
(112 |
) |
Less
Common Stock held in treasury, at cost: 7,642 shares |
|
|
(88 |
) |
|
|
(88 |
) |
Total
Perma-Fix Environmental Services, Inc. stockholders' equity |
|
|
28,253 |
|
|
|
28,336 |
|
Non-controlling interest in subsidiary |
|
|
(1,215 |
) |
|
|
(1,175 |
) |
Total
stockholders' equity |
|
|
27,038 |
|
|
|
27,161 |
|
|
|
|
|
|
Total
liabilities and stockholders' equity |
|
$ |
57,982 |
|
|
$ |
59,538 |
|
|
|
|
|
|
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