Perma-Fix Environmental Services, Inc. (NASDAQ:
PESI) (the “Company”) today announced financial results
and provided a business update for the second quarter ended June
30, 2021.
Mark Duff, President and CEO of the Company,
commented, “As anticipated, revenues in the second quarter were
primarily impacted by the ongoing effects of the COVID-19 pandemic,
however we have begun to see activity pick up in third quarter and
expect an improved second half of 2021. Despite the challenging
environment, we reported net income of $3.0 million and maintained
over $7 million of cash on the balance sheet. We experienced
weakness in our Services Segment due to delays throughout the
industry in evaluating bids and awarding procurements, also
primarily due to the pandemic. Nevertheless, as we look at our
bidding pipeline we are encouraged as these bids are collectively
valued in the hundreds of millions of dollars. In fact, as
previously disclosed last month, we were awarded a new service
contract for the Tritium Systems Demolition and Disposal project,
which is expected to be completed over the next 18 months. Revenue
for the Treatment Segment remained relatively flat, and we are
beginning to realize increases in waste treatment activity both in
bidding opportunities, receipts and plant production, which we
believe illustrates the improving nature of the market. We have
also been focusing on advancing our technology offering and were
pleased to announce that we have completed design and begun
fabrication and construction of our new Therma-Fix Gen3 , a third
generation vacuum thermal desorption system. The Therma-Fix Gen3
unit offers a treatment solution for problematic waste streams
while providing increased efficiency and productivity. With our
initial sales launch in June 2021, and even before the unit has
commenced operations, we have already secured an existing, on-site
waste treatment inventory and sales pipeline , which we believe
underscores the demand for this capability in both commercial and
government sectors. This is just another example how we continue to
develop new technologies to treat some of the world's most
challenging waste streams. Overall, while we are disappointed in
our Q2 performance, we believe Perma-Fix is well positioned for
growth and I am proud of the business development efforts our team
has initiated and completed, which highlights our ability to adapt
to the market.”
COVID-19Similar to most of the
US, Perma-Fix has relaxed the COVID-19-related precautions
associated with ongoing operations as more people have become
vaccinated, including the Company’s employees. However, as the
situations surrounding COVID-19 remain fluid, the full impact and
extent of the pandemic on the Company’s financial results cannot be
estimated with any degree of certainty. The Company is realizing
pent-up demand in both segments, which has been reflected in the
increases in proposal requests throughout the first half of 2021
and into Q3 2021.
Financial Results
Revenue for the second quarter of 2021 was
approximately $16.1 million versus approximately $22.0 million for
the same period last year. The decrease was primarily within the
Services Segment where revenue decreased to approximately $8.4
million for the three months ended June 30, 2021 from $14.2 million
for the corresponding period of 2020 resulting from delays in
procurement actions and contract awards primarily from the impact
of COVID-19. The completion of a certain large project within the
Services Segment in the second quarter of 2021 exacerbated the
revenue decrease in the second quarter of 2021. The Company’s
Services Segment revenues are project based; as such, the scope,
duration and completion of each project vary. As a result, the
Services Segment revenues are subject to differences relating to
timing and project value. Revenue for the Treatment Segment was
approximately $7.7 million and $7.8 million for the second quarter
of 2021 and 2020, respectively. The Company’s revenue within our
Treatment Segment for each of the second quarters of 2021 and 2020
was negatively impacted by waste shipment delays from certain key
customers due primarily to impact of COVID-19.
Gross profit for the second quarter of 2021 was
$966,000 versus $3.3 million for the second quarter of 2020
primarily due to lower revenue generated in the Services Segment
resulting primarily from the impact of COVID-19 and the completion
of a certain large project as discussed above.
Operating loss for the second quarter of 2021
was approximately $2.2 million versus operating income of $405,000
for the second quarter of 2020. Net income attributable to common
stockholders for the second quarter of 2021 was approximately $3.0
million or $0.25 per basic share versus $204,000 or $0.02 per basic
share for the second quarter of 2020. Net income attributable to
common stockholders for the second quarter of 2021 included a “Gain
on extinguishment of debt” recorded in the amount of approximately
$5.4 million resulting from the Paycheck Protection Program (“PPP”)
Loan that was forgiven by the U.S. Small Business Administration in
June 2021.
The Company reported Adjusted EBITDA of ($1.7)
million from continuing operations for the quarter ended June 30,
2021, as compared to Adjusted EBITDA of $847,000 from continuing
operations for the same period of 2020. 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 and gain
(loss) on extinguishment of debt. 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 a 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
from continuing operations for the three and six months ended June
30, 2021 and 2020.
|
|
(Unaudited) |
|
(Unaudited) |
|
|
Three Months
Ended |
|
Six Months
Ended |
|
|
June 30, |
|
June 30, |
(In thousands) |
|
|
2021 |
|
|
|
2020 |
|
|
|
2021 |
|
|
|
2020 |
|
Income from
continuing operations |
|
$ |
3,121 |
|
|
$ |
260 |
|
|
$ |
2,083 |
|
|
$ |
1,568 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments: |
|
|
|
|
|
|
|
|
Depreciation & amortization |
|
|
400 |
|
|
|
364 |
|
|
|
799 |
|
|
|
711 |
|
Interest income |
|
|
(2 |
) |
|
|
(28 |
) |
|
|
(21 |
) |
|
|
(84 |
) |
Interest expense |
|
|
65 |
|
|
|
99 |
|
|
|
132 |
|
|
|
219 |
|
Interest expense - financing fees |
|
|
9 |
|
|
|
60 |
|
|
|
17 |
|
|
|
129 |
|
Income tax expense (benefit) |
|
|
13 |
|
|
|
(9 |
) |
|
|
(4 |
) |
|
|
5 |
|
|
|
|
|
|
|
|
|
|
EBITDA |
|
|
3,606 |
|
|
|
746 |
|
|
|
3,006 |
|
|
|
2,548 |
|
|
|
|
|
|
|
|
|
|
Gain (loss)
on extinguishment of debt |
|
|
(5,381 |
) |
|
|
27 |
|
|
|
(5,381 |
) |
|
|
27 |
|
|
|
|
|
|
|
|
|
|
Research and development costs related to Medical Isotope
project |
|
|
72 |
|
|
|
74 |
|
|
|
149 |
|
|
|
140 |
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA |
|
$ |
(1,703 |
) |
|
$ |
847 |
|
|
$ |
(2,226 |
) |
|
$ |
2,715 |
|
|
|
|
|
|
|
|
|
|
The tables below present certain unaudited
financial information for the business segments, excluding
allocation of corporate expenses:
|
|
Three Months Ended |
|
Six Months Ended |
|
|
June 30, 2021 |
|
June 30, 2021 |
|
|
(Unaudited) |
|
(Unaudited) |
(In thousands) |
|
Treatment |
|
Services |
|
Medical |
|
Treatment |
|
Services |
|
|
Medical |
Net revenues |
|
$ |
7,706 |
|
$ |
8,439 |
|
|
$ |
— |
|
|
$ |
15,201 |
|
$ |
24,077 |
|
|
$ |
— |
|
Gross profit (negative gross profit) |
|
|
1,433 |
|
|
(467 |
) |
|
|
— |
|
|
|
2,358 |
|
|
964 |
|
|
|
— |
|
Segment profit (loss) |
|
|
468 |
|
|
(1,302 |
) |
|
|
(72 |
) |
|
|
366 |
|
|
(747 |
) |
|
|
(149 |
) |
|
|
Three Months Ended |
|
Six Months Ended |
|
|
June 30, 2020 |
|
June 30, 2020 |
|
|
|
|
(Unaudited) |
|
|
|
(Unaudited) |
(In thousands) |
|
Treatment |
|
Services |
|
Medical |
|
Treatment |
|
Services |
|
Medical |
Net revenues |
|
$ |
7,840 |
|
$ |
14,207 |
|
$ |
— |
|
|
$ |
17,403 |
|
$ |
29,504 |
|
$ |
— |
|
Gross profit |
|
|
1,695 |
|
|
1,615 |
|
|
— |
|
|
|
4,440 |
|
|
3,510 |
|
|
— |
|
Segment profit (loss) |
|
|
759 |
|
|
1,031 |
|
|
(74 |
) |
|
|
2,292 |
|
|
2,349 |
|
|
(140 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Conference Call
Perma-Fix will host a conference call at 11:00
a.m. ET on Wednesday, August 11, 2021. The call will be available
on the Company’s website at www.perma-fix.com, or by calling toll
free 844-369-8774 for U.S. callers, or +1 862-298-0844 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,
Executive 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 Wednesday,
August 18, 2021, and can be accessed by calling: 877-481-4010 for
U.S. callers, or +1 919-882-2331 for international callers and
entering conference ID: 42456.
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 U.S Department of Energy (“DOE”), the U.S 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 four 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”, “plans to”,
“estimates”, “projects”, and similar expressions. Forward-looking
statements include, but are not limited to: expectation of improved
second half of 2021; bidding pipeline; positioned for growth;
activity and growth of the new Therma-Fix Gen3 unit; proposal
requests; and completion of service contract over next 18 months.
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 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;
inability to win bid projects; failure of Congress to provides
continuing funding for the DOD’s and DOE’s remediation projects;
ability to obtain new foreign and domestic remediation contracts;
inability to meet financial covenants; impact of COVID-19; and the
“Risk Factors” discussed in, and the additional factors referred to
under "Special Note Regarding Forward-Looking Statements" of, our
2020 Form 10-K and Form 10-Q for quarters ended March 31, 2021 and
June 30, 2021. 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.
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 Ended |
|
Six Months Ended |
|
|
June 30, |
|
June 30, |
(Amounts in Thousands, Except for Per Share Amounts) |
|
2021 |
|
2020 |
|
2021 |
|
2020 |
|
|
|
|
|
|
|
|
|
Net revenues |
$ |
16,145 |
|
$ |
22,047 |
|
$ |
39,278 |
|
$ |
46,907 |
|
Cost of goods sold |
|
15,179 |
|
|
18,737 |
|
|
35,956 |
|
|
38,957 |
|
Gross profit |
|
966 |
|
|
3,310 |
|
|
3,322 |
|
|
7,950 |
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative expenses |
|
2,997 |
|
|
2,700 |
|
|
6,202 |
|
|
5,627 |
|
Research and development |
|
144 |
|
|
209 |
|
|
295 |
|
|
441 |
|
(Gain) loss on disposal of property and equipment |
|
— |
|
|
(4 |
) |
|
— |
|
|
27 |
|
(Loss) income from operations |
|
(2,175 |
) |
|
405 |
|
|
(3,175 |
) |
|
1,855 |
|
|
|
|
|
|
|
|
|
|
Other income (expense): |
|
|
|
|
|
|
|
|
Interest income |
|
2 |
|
|
28 |
|
|
21 |
|
|
84 |
|
Interest expense |
|
(65 |
) |
|
(99 |
) |
|
(132 |
) |
|
(219 |
) |
Interest expense-financing fees |
|
(9 |
) |
|
(60 |
) |
|
(17 |
) |
|
(129 |
) |
Other |
|
— |
|
|
4 |
|
|
1 |
|
|
9 |
|
Gain (loss) on extinguishment of debt |
|
5,381 |
|
|
(27 |
) |
|
5,381 |
|
|
(27 |
) |
Income from continuing operations before taxes |
|
3,134 |
|
|
251 |
|
|
2,079 |
|
|
1,573 |
|
Income tax expense (benefit) |
|
13 |
|
|
(9 |
) |
|
(4 |
) |
|
5 |
|
Income from continuing operations, net of taxes |
|
3,121 |
|
|
260 |
|
|
2,083 |
|
|
1,568 |
|
|
|
|
|
|
|
|
|
|
Loss from discontinued operations (net of taxes of $0) |
|
(127 |
) |
|
(85 |
) |
|
(242 |
) |
|
(199 |
) |
Net income |
|
2,994 |
|
|
175 |
|
|
1,841 |
|
|
1,369 |
|
|
|
|
|
|
|
|
|
|
Net loss attributable to non-controlling interest |
|
(29 |
) |
|
(29 |
) |
|
(59 |
) |
|
(55 |
) |
|
|
|
|
|
|
|
|
|
Net income attributable to
Perma-Fix Environmental Services, Inc. common stockholders |
$ |
3,023 |
|
$ |
204 |
|
$ |
1,900 |
|
$ |
1,424 |
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per common share attributable to
Perma-Fix Environmental Services, Inc. stockholders -
basic: |
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations |
$ |
.26 |
|
$ |
.02 |
|
$ |
.18 |
|
$ |
.13 |
|
Discontinued operations |
|
(.01 |
) |
|
— |
|
|
(.02 |
) |
|
(.01 |
) |
Net income per common share |
$ |
.25 |
|
$ |
.02 |
|
$ |
.16 |
|
$ |
.12 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per common
share attributable to Perma-Fix Environmental Services, Inc.
stockholders - diluted: |
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations |
$ |
.25 |
|
$ |
.02 |
|
$ |
.17 |
|
$ |
.13 |
|
Discontinued operations |
|
(.01 |
) |
|
— |
|
|
(.02 |
) |
|
(.01 |
) |
Net income per common share |
$ |
.24 |
|
$ |
.02 |
|
$ |
.15 |
|
$ |
.12 |
|
|
|
|
|
|
|
|
|
|
Number of common shares used
in computing net income per share: |
|
|
|
|
|
|
|
|
Basic |
|
12,180 |
|
|
12,135 |
|
|
12,173 |
|
|
12,129 |
|
Diluted |
|
12,440 |
|
|
12,286 |
|
|
12,420 |
|
|
12,320 |
|
|
|
|
|
|
|
|
|
|
PERMA-FIX ENVIRONMENTAL SERVICES,
INC.CONSOLIDATED BALANCE SHEETS
|
|
June 30, |
|
December 31, |
|
|
|
2021 |
|
|
|
2020 |
|
(Amounts in Thousands, Except for Share and Per Share Amounts) |
|
(Unaudited) |
|
(Audited) |
|
|
|
|
|
ASSETS |
|
|
|
|
Current assets: |
|
|
|
|
Cash |
|
$ |
7,312 |
|
|
$ |
7,924 |
|
Account receivable, net of allowance for doubtful accounts of $27
and $404, respectively |
|
|
9,244 |
|
|
|
9,659 |
|
Unbilled receivables |
|
|
7,332 |
|
|
|
14,453 |
|
Other current assets |
|
|
3,627 |
|
|
|
4,577 |
|
Assets of discontinued operations included in current assets |
|
|
17 |
|
|
|
22 |
|
Total current assets |
|
|
27,532 |
|
|
|
36,635 |
|
|
|
|
|
|
Net property and equipment |
|
|
17,810 |
|
|
|
17,783 |
|
Property and equipment of discontinued operations |
|
|
81 |
|
|
|
81 |
|
|
|
|
|
|
Operating lease right-of-use assets |
|
|
2,317 |
|
|
|
2,287 |
|
|
|
|
|
|
Intangibles and other assets |
|
|
22,319 |
|
|
|
22,133 |
|
Total assets |
|
$ |
70,059 |
|
|
$ |
78,919 |
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
Current liabilities |
|
$ |
23,321 |
|
|
$ |
32,065 |
|
Current liabilities related to discontinued operations |
|
|
817 |
|
|
|
898 |
|
Total current liabilities |
|
|
24,138 |
|
|
|
32,963 |
|
|
|
|
|
|
Long-term liabilities |
|
|
11,058 |
|
|
|
13,253 |
|
Long-term liabilities related to discontinued operations |
|
|
256 |
|
|
|
252 |
|
Total liabilities |
|
|
35,452 |
|
|
|
46,468 |
|
Commitments and Contingencies |
|
|
|
|
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,
12,188,256 and 12,161,539 shares issued, respectively; 12,180,614
and 12,153,897 shares outstanding, respectively |
|
|
12 |
|
|
|
12 |
|
Additional paid-in capital |
|
|
109,206 |
|
|
|
108,931 |
|
Accumulated deficit |
|
|
(72,555 |
) |
|
|
(74,455 |
) |
Accumulated other comprehensive loss |
|
|
(167 |
) |
|
|
(207 |
) |
Less Common Stock held in treasury, at cost: 7,642 shares |
|
|
(88 |
) |
|
|
(88 |
) |
Total Perma-Fix Environmental Services, Inc. stockholders'
equity |
|
|
36,408 |
|
|
|
34,193 |
|
Non-controlling interest in subsidiary |
|
|
(1,801 |
) |
|
|
(1,742 |
) |
Total stockholders' equity |
|
|
34,607 |
|
|
|
32,451 |
|
|
|
|
|
|
Total liabilities and stockholders' equity |
|
$ |
70,059 |
|
|
$ |
78,919 |
|
|
|
|
|
|
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