Perma-Fix Environmental Services, Inc. (NASDAQ:
PESI) (the “Company”) today announced financial results
and provided a business update for the first quarter ended March
31, 2024.
Mark Duff, President and CEO of the Company,
commented, “As previously disclosed, our financial performance in
the first quarter of 2024 was impacted by a few temporary
headwinds. However, we have seen steady improvement heading into
the second quarter and anticipate a strong second half of 2024. The
weakness we experienced was due in part to delayed project starts
and waste shipments, as well as challenging weather conditions
during the first quarter of 2024. However, we used this period for
equipment replacement and repairs, program enhancements, and
testing to support permit expansion and broader market penetration.
Additionally, we accelerated investments in research and
development on our new technology to treat PFAS (Per- and
Polyfluorinated Substances) contamination, which resulted in the
completion of pilot plant testing with PFAS destruction levels
exceeding anticipated regulatory requirements. We are now in the
process of final designs and fabrication for the first operational
unit and plan to begin accepting commercial waste for destruction
before the end of the year.”
“We believe we are in a good position based on
new strategic wins, growing project opportunities, and increased
bidding activities. Importantly, we are pursuing several large
procurements within the U.S. government, as well as commercial and
international waste opportunities. Moreover, we have made further
progress in our strategy to provide critical services to the U.S.
Department of Energy’s (DOE) Hanford tank remediation mission,
including the treatment of effluent from the DFLAW (Direct-Feed
Low-Activity Waste) facility once it commences vitrification
operations, which is expected in 2025.”
"Lastly, I would like to commend the DOE, U.S.
Environmental Protection Agency (EPA), and the Washington State
Department of Ecology on their recent landmark agreement, widely
referred to as the “Settlement Agreement,” for treating a
significant portion of the Hanford site tank waste through
grouting, as a supplement to vitrification. Under the agreement,
DOE has committed to grout waste it empties from 22 of the tanks on
the west side of the site by 2040. We believe that our Perma-Fix
Northwest facility in Richland, Washington, adjacent to the Hanford
site, is ideally suited to treat a large portion of this waste
given its proximity, permits and our proven track record. Moreover,
we believe we can provide a highly cost-effective solution for
these wastes that could potentially save taxpayers billions of
dollars. At the same time, per the Settlement Agreement, DOE has
reaffirmed its timeline to complete “hot commissioning” and
commence vitrification at the DFLAW facility by August 1, 2025, and
we look forward to the opportunity to treat the effluent resulting
from this process. Overall, we look forward to working closely with
DOE to advance its mission of remediating this and other critical
sites around the country,” concluded Duff.
Financial Results
Revenue was $13.6 million for the first quarter
of 2024 as compared to $20.1 million for the corresponding period
of 2023. Services Segment revenue decreased by approximately $5.6
million to $4.9 million for the first quarter of 2024 as compared
to $10.5 million for the corresponding period of 2023. The decrease
in revenue in the Services Segment was due in part to the
completion of two large projects which were not replaced by new
project starts due to delays in mobilization activities until late
April 2024 resulting from Continuing Resolution impacts. The
Continuing Resolution impacts from the inability of Congress to
pass the federal budget until late March 2024 contributed to delays
in procurements, project starts and waste shipments by certain
government clients due to uncertain budget projections. Treatment
Segment revenue decreased by approximately $900,000 to $8.7 million
for the first quarter of 2024 as compared to approximately $9.6
million for the corresponding period of 2023. The decrease in
revenue in the Treatment Segment was primarily due to overall lower
waste volume and lower averaged price from waste mix. The overall
lower waste volume was attributed to Continuing Resolution impact
as discussed above in addition to poor weather conditions which
resulted in waste shipment delays from certain customers.
Additionally, our Treatment Segment waste volume was negatively
impacted by delays in waste treatment production and waste receipts
due to temporary outages at certain of our facilities resulting
from equipment replacements and repairs, program enhancements and
testing to support permit expansion and broader market
penetration.
Gross loss for the first quarter of 2024 was
$620,000 versus gross profit of $3.0 million for the first quarter
of 2023 primarily due to decreased revenue generated from both
segments as discussed above.
Operating loss for the first quarter of 2024 was
$4.5 million versus operating loss of $576,000 for the
corresponding period of 2023. Net loss for the first quarter of
2024 was $3.6 million versus net loss of $411,000 for the
corresponding period of 2023. Net loss per share (both basic and
diluted) for the first quarter of 2024 was $0.26 per share versus
net loss per share (both basic and diluted) of $0.03 for the same
period in 2023.
The Company reported EBITDA of ($4.0) million
from continuing operations at March 31, 2024, as compared to EBITDA
of $171,000 from continuing operations for the corresponding period
of 2023. The Company defines EBITDA as earnings before interest,
taxes, depreciation and amortization. EBITDA is not a measure 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 is relevant and useful by
enhancing the readers’ ability to understand the Company’s
operating performance. The Company’s management utilizes EBITDA as
a mean to measure performance. The Company’s measurement of EBITDA
may not be comparable to similar titled measures reported by other
companies. The table below reconciles EBITDA, a non-GAAP measure,
to GAAP numbers for loss from continuing operations for the three
months ended March 31, 2024, and 2023.
|
|
Quarter Ended |
|
|
March 31, |
|
|
(Unaudited) |
(Unaudited) |
(In thousands) |
|
|
2024 |
|
|
|
2023 |
|
Loss from continuing operations |
|
$ |
(3,458 |
) |
|
$ |
(318 |
) |
|
|
|
|
|
Adjustments: |
|
|
|
|
Depreciation & amortization |
|
|
431 |
|
|
|
747 |
|
Interest income |
|
|
(174 |
) |
|
|
(127 |
) |
Interest expense |
|
|
116 |
|
|
|
53 |
|
Interest expense - financing fees |
|
|
13 |
|
|
|
20 |
|
Income tax benefit |
|
|
(956 |
) |
|
|
(204 |
) |
|
|
|
|
|
EBITDA |
|
$ |
(4,028 |
) |
|
$ |
171 |
|
|
|
|
|
|
The tables below present certain unaudited
financial information for the business segments, which excludes
allocation of corporate expenses.
|
|
Quarter Ended |
|
Quarter Ended |
|
|
|
March 31, 2024 |
|
March 31, 2023 |
|
|
|
(Unaudited) |
|
(Unaudited) |
|
(In thousands) |
|
Treatment |
|
Services |
|
|
Treatment |
|
Services |
|
|
Revenues |
|
$ |
8,709 |
|
|
$ |
4,908 |
|
|
|
$ |
9,594 |
|
$ |
10,513 |
|
|
Gross (loss)
profit |
|
|
(52 |
) |
|
|
(568 |
) |
|
|
|
1,252 |
|
|
1,757 |
|
|
Segment
(loss) profit |
|
|
(846 |
) |
|
|
(957 |
) |
|
|
|
331 |
|
|
973 |
|
|
|
|
|
|
|
|
|
|
Conference Call
Perma-Fix will host a conference call at 11:00
a.m. EDT on Thursday, May 9, 2024. The conference call will be
available via telephone by dialing toll free 888-506-0062 for U.S.
callers, or +1 973-528-0011 for international callers and by
entering access code: 429091. 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 of the call may be accessed at
https://www.webcaster4.com/Webcast/Page/2243/50534 or on the
Company’s website at https://ir.perma-fix.com/conference-calls. 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 Thursday, May 16, 2024, and can be
accessed by dialing 877-481-4010 for U.S. callers or +1
919-882-2331 for international callers and entering access code:
50534.
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 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”, “plan to”,
“estimates”, “projects”, and similar expressions. Forward-looking
statements include, but are not limited to: accepting commercial
waste for destruction before the end of the year; well positioned;
treatment of effluent from DFLAW facility; and cost-effective
solution for Hanford site tank waste; . 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 or
terminates existing contracts; Congress fails to provides funding
for the DOD’s and DOE’s remediation projects; inability 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 2023 Form 10-K and
Form 10-Q for quarter ended March 31, 2024. 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.
Contacts:David K. Waldman-US
Investor RelationsCrescendo Communications, LLC (212) 671-1021
Herbert Strauss-European Investor Relationsherbert@eu-ir.com+43
316 296 316
FINANCIAL TABLES FOLLOW
PERMA-FIX ENVIRONMENTAL SERVICES,
INC.CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS(UNAUDITED) |
|
|
Three Months Ended March 31, |
(Amounts in Thousands, Except for Per Share Amounts) |
|
2024 |
|
|
|
2023 |
|
|
|
|
|
|
|
Revenues |
$ |
13,617 |
|
|
$ |
20,107 |
|
Cost of goods sold |
|
14,237 |
|
|
|
17,098 |
|
Gross (loss) profit |
|
(620 |
) |
|
|
3,009 |
|
|
|
|
|
|
|
Selling, general and administrative expenses |
|
3,544 |
|
|
|
3,486 |
|
Research and development |
|
296 |
|
|
|
99 |
|
Loss from operations |
|
(4,460 |
) |
|
|
(576 |
) |
|
|
|
|
|
|
Other income (expense): |
|
|
|
|
|
Interest income |
|
174 |
|
|
|
127 |
|
Interest expense |
|
(116 |
) |
|
|
(53 |
) |
Interest expense-financing fees |
|
(13 |
) |
|
|
(20 |
) |
Other |
|
1 |
|
|
|
— |
Loss from continuing operations before taxes |
|
(4,414 |
) |
|
|
(522 |
) |
Income tax benefit |
|
(956 |
) |
|
|
(204 |
) |
Loss from continuing operations, net of taxes |
|
(3,458 |
) |
|
|
(318 |
) |
|
|
|
|
|
|
Loss from discontinued operations (net of taxes) |
|
(102 |
) |
|
|
(93 |
) |
Net loss |
$ |
(3,560 |
) |
|
$ |
(411 |
) |
|
|
|
|
|
|
Net loss per common share - basic and diluted: |
|
|
|
|
|
|
|
|
|
|
|
Continuing operations |
$ |
(.25 |
) |
|
$ |
(.02 |
) |
Discontinued operations |
|
(.01 |
) |
|
|
(.01 |
) |
Net loss per common share |
$ |
(.26 |
) |
|
$ |
(.03 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Number of common shares used in computing net loss per share: |
|
|
|
|
Basic |
|
13,676 |
|
|
|
13,358 |
|
Diluted |
|
13,676 |
|
|
|
13,358 |
|
|
|
|
|
|
|
PERMA-FIX ENVIRONMENTAL SERVICES,
INC.CONDENSED CONSOLIDATED BALANCE
SHEET |
|
|
March 31, |
|
December 31, |
|
|
|
2024 |
|
|
|
2023 |
|
(Amounts in Thousands, Except for Share and Per Share Amounts) |
|
(Unaudited) |
|
|
|
|
|
|
|
ASSETS |
|
|
|
|
Current assets: |
|
|
|
|
Cash |
|
$ |
2,374 |
|
|
$ |
7,500 |
|
Account receivable, net of allowance for credit losses of $19
and |
|
|
|
|
$30, respectively |
|
|
8,701 |
|
|
|
9,722 |
|
Unbilled receivables |
|
|
8,797 |
|
|
|
8,432 |
|
Other current assets |
|
|
5,026 |
|
|
|
4,893 |
|
Assets of discontinued operations included in current assets |
|
|
13 |
|
|
|
13 |
|
Total current assets |
|
|
24,911 |
|
|
|
30,560 |
|
|
|
|
|
|
Net property and equipment |
|
|
18,890 |
|
|
|
19,009 |
|
Property and equipment of discontinued operations |
|
|
81 |
|
|
|
81 |
|
|
|
|
|
|
Operating lease right-of-use assets |
|
|
1,885 |
|
|
|
1,990 |
|
|
|
|
|
|
Intangibles and other assets |
|
|
28,272 |
|
|
|
27,109 |
|
Total assets |
|
$ |
74,039 |
|
|
$ |
78,749 |
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
Current liabilities |
|
$ |
24,418 |
|
|
$ |
25,678 |
|
Current liabilities related to discontinued operations |
|
|
238 |
|
|
|
269 |
|
Total current liabilities |
|
|
24,656 |
|
|
|
25,947 |
|
|
|
|
|
|
Long-term liabilities |
|
|
12,188 |
|
|
|
12,472 |
|
Long-term liabilities related to discontinued operations |
|
|
955 |
|
|
|
953 |
|
Total liabilities |
|
|
37,799 |
|
|
|
39,372 |
|
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, |
|
|
|
|
13,730,580 and 13,654,201 shares issued, respectively; |
|
|
|
|
13,722,938 and 13,646,559 shares outstanding, respectively |
|
|
14 |
|
|
|
14 |
|
Additional paid-in capital |
|
|
116,981 |
|
|
|
116,502 |
|
Accumulated deficit |
|
|
(80,511 |
) |
|
|
(76,951 |
) |
Accumulated other comprehensive loss |
|
|
(156 |
) |
|
|
(100 |
) |
Less Common Stock held in treasury, at cost: 7,642 shares |
|
|
(88 |
) |
|
|
(88 |
) |
Total stockholders' equity |
|
|
36,240 |
|
|
|
39,377 |
|
|
|
|
|
|
Total liabilities and stockholders' equity |
|
$ |
74,039 |
|
|
$ |
78,749 |
|
|
|
|
|
|
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