Perma-Fix Reports Financial Results and Provides Business Update for the First Quarter of 2022

Rhea-AI Summary

On May 5, 2022, Perma-Fix Environmental Services (NASDAQ: PESI) reported a first-quarter revenue of $15.9 million, down from $23.1 million year-over-year. The decline was chiefly due to a $7.2 million drop in the Services Segment. Gross profit fell to $1.6 million versus $2.4 million in Q1 2021, leading to an operating loss of $1.9 million. Despite challenges from the pandemic impacting project timelines, the company anticipates recovery and increased demand in the second quarter of 2022. Management remains optimistic about growth opportunities in the Treatment Segment and upcoming federal task orders.

Positive

• Improvement in service projects expected to boost revenue in Q2 2022.
• Increased demand for waste treatment capacity indicates positive growth potential.

Negative

• Revenue decreased by $7.2 million in the Services Segment year-over-year.
• Operating loss widened to $1.9 million in Q1 2022.

ATLANTA, May 05, 2022 (GLOBE NEWSWIRE) -- 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, 2022.

Mark Duff, President and CEO of the Company, commented, “As previously disclosed, we continued to experience the impacts of the pandemic in the first couple months of the first quarter of 2022, which directly resulted in delays for both service and treatment projects. However, we started to realize improved results in March, which we believe will continue in the second quarter of 2022.  Specifically, we have completed the transition and startup of several service projects that are close to  full operations and contributing to meaningful revenue growth within our Service Segment in the second quarter of 2022.  In turn, we anticipate this trend will be reflected in improved financial performance in the second quarter. Moreover, while the federal government clients have been slow to procure new task orders in 2022, we anticipate a number of these opportunities will be awarded during the second and third quarters. Within our Treatment Segment, we are seeing increased demand for waste treatment capacity within both the government and commercial sectors, which we believe bodes well for the balance of 2022.  Perma-Fix remains well-positioned to resume and exceed the  performance levels attained prior to the pandemic through increased bidding activities, waste treatment capability expansion, and rising federal budgets that directly support our core competencies.”

COVID-19
The Company continues to proactively update its ongoing business operations and safety plans, which we believe will mitigate any potential impact of COVID-19. 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.

Financial Results

Revenue was $15.9 million for the first quarter of 2022 as compared to $23.1 million for the corresponding period of 2021. The decrease in revenue was primarily within our Services Segment where revenue decreased by approximately $7.2 million to $8.4 million for the first quarter of 2022 as compared to $15.6 million for the corresponding period of 2021. Work under certain of the new projects awarded to our Services Segment at the end of the second quarter of 2021 continued to be delayed/curtailed into the first quarter of 2022 due to COVID-19 impact and/or administrative delays experienced by certain customers. However, we have begun to see improvement in activities from certain of these new projects starting in the latter part of the first quarter of 2022. Treatment Segment revenue remained steady at approximately $7.5 million. Although we saw minimal change in revenue within our Treatment Segment, our Treatment Segment revenue has not returned to pre-pandemic levels as certain customers continue to delay waste shipments due, in part, to the impact of COVID-19.

Gross profit for the first quarter of 2022 was $1.6 million versus $2.4 million for the first quarter of 2021 primarily due to overall lower revenue and the impact of our fixed costs primarily at our Treatment Segment plants. Certain of our fixed costs have been impacted by inflation which contributed to lower gross profit.

Operating loss for the first quarter of 2022 was $1.9 million versus operating loss of $999,000 for the corresponding period of 2021. Net loss for the first quarter of 2022 was $1.3 million versus net loss of $1.2 million for the corresponding period of 2021. Net loss for the first quarter of 2022 included a tax benefit of $673,000. Net loss attributable to common stockholders (both basic and diluted) for the first quarter of 2022 was $1.3 million or ($0.10) per share versus net loss attributable to common stockholders (both basic and diluted) of $1.1 million or ($0.09) per share, for the same period in 2021. 

The Company reported Adjusted EBITDA of ($1.4) million from continuing operations at March 31, 2022, as compared to Adjusted EBITDA of ($522,000) from continuing operations during the corresponding period of 2021. The Company defines EBITDA as earnings before interest, taxes, depreciation and amortization. Adjusted EBITDA is defined as EBITDA before research and development (“R&D”) costs related to the Medical Isotope project.  As previously disclosed, in December 2021, the Company made the strategic decision to cease all R&D activities under the Medical Segment and sold 100% of its interest in Perma-Fix Medical S.A., which comprised of its Medical Segment. 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 loss from continuing operations for the three months ended March 31, 2022 and 2021. 

		Quarter Ended
		March 31,
		(Unaudited)				(Unaudited)
(In thousands)			2022			2021
Loss from continuing operations		$	(1,249	)		$	(1,038	)
Adjustments:
Depreciation & amortization			456				400
Interest income			(11	)			(18	)
Interest expense			35				67
Interest expense - financing fees			13				8
Income tax benefit			(673	)			(17	)
EBITDA			(1,429	)			(598	)
Research and development costs related to
Medical Isotope project			—				76
Adjusted EBITDA		$	(1,429	)		$	(522	)

The tables below present certain unaudited financial information for the business segments, which excludes allocation of corporate expenses. As noted above, in December 2021, the Company made the strategic decision to cease all R&D activities under the Medical Segment and sold 100% of its interest in Perma-Fix Medical S.A., which comprised of its Medical Segment.

		Quarter Ended							Quarter Ended
		March 31, 2022							March 31, 2021
		(Unaudited)							(Unaudited)
(In thousands)		Treatment			Services				Treatment				Services				Medical
Revenues		$	7,479		$	8,436			$	7,495			$	15,638		$	—
Gross profit			638			998				925				1,431			—
Segment Profit (loss)			78			399				(102	)			555			(76	)

Conference Call

Perma-Fix will host a conference call at 11:00 a.m. ET on Thursday, May 5, 2022. The conference call will be available via telephone by dialing toll free 877-545-0523 for U.S. callers, or +1 973-528-0016  for international callers and by entering access code: 403356.  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/2243/45480  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 12, 2022, and can be accessed by calling: 877-481-4010 for U.S. callers, or 919-882-2331 for international callers and entering conference ID: 45480.

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”, “plan to”, “estimates”, “projects”, and similar expressions.  Forward‑looking statements include, but are not limited to improve results in the second quarter of 2022; improved revenue growth and financial performance in the second quarter; award of new opportunities during the second and third quarters; balance of 2022; resume and exceed performance levels attained prior to pandemic; and impact of COVID-19. 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; inability to meet financial covenants; and the additional factors referred to under “Risk Factors” and "Special Note Regarding Forward-Looking Statements" of our 2021 Form 10-K and Form 10-Q for quarter ended March 31, 2022. 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 Relations
Crescendo Communications, LLC
 (212) 671-1021

Herbert Strauss-European Investor Relations
herbert@eu-ir.com
+43 316 296 316

FINANCIAL TABLES FOLLOW

PERMA-FIX ENVIRONMENTAL SERVICES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)

		Three Months Ended March 31,
(Amounts in Thousands, Except for Per Share Amounts)		2022				2021
Revenues	$	15,915			$	23,133
Cost of goods sold		14,279				20,777
Gross profit		1,636				2,356
Selling, general and administrative expenses		3,422				3,205
Research and development		96				150
Loss on disposal of property and equipment		1				—
Loss from operations		(1,883	)			(999	)
Other income (expense):
Interest income		11				18
Interest expense		(35	)			(67	)
Interest expense-financing fees		(13	)			(8	)
Other		(2	)			1
Loss from continuing operations before taxes		(1,922	)			(1,055	)
Income tax benefit		(673	)			(17	)
Loss from continuing operations, net of taxes		(1,249	)			(1,038	)
Loss from discontinued operations (net of taxes)		(94	)			(115	)
Net loss		(1,343	)			(1,153	)
Net loss attributable to non-controlling interest		—				(30	)
Net loss attributable to Perma-Fix Environmental Services, Inc.
common stockholders	$	(1,343	)		$	(1,123	)
Net loss per common share attributable to Perma-Fix
Environmental Services, Inc. stockholders - basic and diluted:
Continuing operations	$	(.09	)		$	(.08	)
Discontinued operations		(.01	)			(.01	)
Net loss per common share	$	(.10	)		$	(.09	)
Number of common shares used in computing net loss per share:
Basic		13,234				12,165
Diluted		13,234				12,165

		March 31,				December 31,
			2022				2021
(Amounts in Thousands, Except for Share and Per Share Amounts)		(Unaudited)				(Audited)
ASSETS
Current assets:
Cash		$	3,925			$	4,440
Account receivable, net of allowance for doubtful
accounts of $26 and $85, respectively			10,322				11,372
Unbilled receivables			5,275				8,995
Other current assets			5,030				5,152
Assets of discontinued operations included in current assets			27				15
Total current assets			24,579				29,974
Net property and equipment			18,643				18,609
Property and equipment of discontinued operations			81				81
Operating lease right-of-use assets			2,347				2,460
Intangibles and other assets			26,526				26,177
Total assets		$	72,176			$	77,301
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities		$	21,436			$	25,408
Current liabilities related to discontinued operations			802				506
Total current liabilities			22,238				25,914
Long-term liabilities			10,038				10,126
Long-term liabilities related to discontinued operations			408				677
Total liabilities			32,684				36,717
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,
13,242,072 and 13,222,552 shares issued, respectively;
13,234,430 and 13,214,910 shares outstanding, respectively			13				13
Additional paid-in capital			114,532				114,307
Accumulated deficit			(74,963	)			(73,620	)
Accumulated other comprehensive loss			(2	)			(28	)
Less Common Stock held in treasury, at cost: 7,642 shares			(88	)			(88	)
Total stockholders' equity			39,492				40,584
Total liabilities and stockholders' equity		$	72,176			$	77,301

 

 

 

 

FAQ

What were Perma-Fix Environmental Services' Q1 2022 revenue results?

Perma-Fix reported revenue of $15.9 million for Q1 2022, down from $23.1 million in Q1 2021.

How did the pandemic affect PESI's financial performance in Q1 2022?

The pandemic caused delays in service and treatment projects, leading to revenue declines in the Services Segment.

What is the outlook for Perma-Fix in the second quarter of 2022?

Management expects improved financial performance and increased project activity in Q2 2022.

What was the net loss for Perma-Fix in Q1 2022?

Perma-Fix reported a net loss of $1.3 million for the first quarter of 2022.