ATLANTA, March 13, 2024 (GLOBE NEWSWIRE) -- Perma-Fix Environmental Services, Inc. (NASDAQ: PESI) (the "Company") today announced financial results and provided a business update for the fourth quarter and full year ended December 31, 2023.
Mark Duff, President and CEO of the Company, commented, "I am pleased to report solid financial results for the fourth quarter and 2023. Specifically, we achieved a 35.6% and 27.1% increase in revenue, as well as a 112.7% and 70.4% increase in gross profit, for the fourth quarter and full year, respectively. Most notably, we have been preparing for several key initiatives that are progressing and we believe would be impactful to our business later in 2024 and throughout 2025. Despite related investments in both our internal bidding organization, as well as research and development (R&D), we achieved positive EBITDA (as defined and reconciled to GAAP below) and positive net income in 2023."
"Within our Treatment Segment, we benefitted from an improvement in waste volume receipts early in the quarter. Within the Services Segment, we realized several new awards from the Buffalo Corp of Engineers, U.S. Geological Survey (USGS), the U.S. Navy and several commercial clients. At the same time, we developed teaming relationships for several large procurements. In addition, a joint venture in which we have a 50% interest, received formal award of the Joint Research Council project through the European Union at the Ispra, Italy facility, which we believe could generate up to 50 million Euros over the next 7 years. Work under this JV is beginning in Q1 2024, and the scope of work for the Company is expected to ramp up in late 2025. Overall, we feel that we finished the year strong with several strategic wins and accomplishments that we believe will support our long-term growth."
"It is important to note, we are actively bidding on large future contracts within the U.S. Department of Energy (DOE) and U.S. Navy, as well as other mid-size procurement initiatives at DOE, the U.S. Department of Defense (DOD) and the U.S. Environmental Protection Agency (EPA) facilities. In addition, we have made important advances on a new technology to treat PFAS (Per-and Polyfluorinated Substances) contamination, which we look forward to unveiling in the near future. Moreover, we believe we are positioned to provide extensive waste treatment services in support of DOE's Hanford closure strategy, including the treatment of effluent from the DFLAW (Direct-Feed Low-Activity Waste) facility once it commences vitrification operations, which is expected in early 2025. Finally, we are expanding our waste treatment offering within the commercial and international markets, including central Europe, Mexico and Canada. Although there may be some lumpiness in performance resulting from delays in procurements, project starts and waste shipments due, in part, to the Continuing Resolution for the 2024 federal budget, we remain encouraged by the long-term outlook for the business based on what we expect are the growing project opportunities, sales pipeline, and potentially company-changing projects in 2025."
Financial Results
Fourth-Quarter 2023 Results
Revenue for the fourth quarter of 2023 was $22.7 million versus $16.8 million for the same period last year. Revenue from the Services Segment increased approximately $4.3 million to $12.5 million in the fourth quarter of 2023 from $8.2 million for the corresponding of 2022 primarily due to continuing operation and improved productivity on certain projects which had been delayed/curtailed in 2022 due, in part, from the lingering effect of the COVID-19 pandemic. Revenue from the Treatment Segment increased by approximately $1.6 million to $10.2 million in the fourth quarter of 2023 from $8.6 million for the corresponding period of 2022. The increase was primarily due to overall higher waste volume which was offset by lower averaged price from waste mix. As previously disclosed, starting in the latter part of the second quarter of 2022, our Treatment Segment began to see steady improvements in waste receipts from certain customers who had previously delayed waste shipments due, in part, from the lingering effects of COVID-19. Revenue from both Segments were also positively impacted by new contracts awarded to us in 2023 as procurement and planning on behalf of our government clients continued to progress as the lingering effect of the COVID-19 pandemic subsided.
Gross profit for the fourth quarter of 2023 was $4.3 million versus $2.0 million for the fourth quarter of 2022. The increase in gross profit in the Services Segment of approximately $1.7 million or 181.4% was primarily due to higher revenue. The improvement in gross margin to 21.3% in the fourth quarter of 2023 as compared to 11.6% for the corresponding period of 2022 was primarily due to improved margin projects. The increase in gross profit in the Treatment Segment of approximately $564,000 or 52.5% and the improvement in gross margin to approximately 16.0% in the fourth quarter of 2023 as compared to gross margin of approximately 12.5% in the corresponding period of 2022 was primarily due to overall higher revenue as discussed above and overall lower fixed costs.
Operating loss for the fourth quarter of 2023 was approximately $9,000 versus operating loss of $1.7 million for the fourth quarter of 2022. Income from continuing operations for the fourth quarter of 2023 was approximately $470,000 as compared to a loss from continuing operations of $1.5 million for the corresponding period of 2022.
Net income for the fourth quarter of 2023 was approximately $81,000 as compared to net loss of $1.7 million for the fourth quarter of 2022. Income per share (both basic and diluted) was $0.01 for the fourth quarter of 2023 as compared to a loss per share (both basic and diluted) of $0.13 for the corresponding period of 2022.
2023 Financial Results
Revenue in 2023 was $89.7 million versus $70.6 million in 2022. Revenue from the Services Segment increased by approximately $9.0 million to $46.2 million for the year ended December 31, 2023, from $37.2 million for the corresponding period of 2022. The increase was primarily due to achievement of full operational status and improved productivity on certain projects which had been delayed/curtailed in the early part of 2022 due, in part, from the lingering effects of the COVID-19 pandemic. Revenue from the Treatment Segment increased by approximately $10.1 million to $43.5 million in 2023 from $33.4 million in 2022. The increase was primarily due to overall higher waste volume which was offset by lower averaged price from waste mix. Similar to the fourth quarter of 2023 as discussed above, the increase in waste volume was primarily due to steady improvements in waste receipts from certain customers who had previously delayed waste shipments due, in part, from the lingering effects of COVID-19. Revenue from both Segments were also positively impacted by new contracts awarded to us in 2023 as procurement and planning on behalf of our government clients continued to progress as the lingering effect of COVID-19 pandemic subsided.
Gross profit in 2023 was $16.4 million as compared to $9.6 million in 2022. Gross profit increased in both Segments. The increase in gross profit in the Services Segment of approximately $5.1 million or 117.4% was primarily due to higher revenue and the increase in gross margin to approximately 20.5% from 11.7% was primarily due to improved margin projects. The increase in gross profit in the Treatment Segment of approximately $1.6 million or 31.1% was primarily due to higher revenue from overall higher waste volume which was offset by lower averaged price waste from waste mix. Treatment Segment gross margin increased slightly to 15.8% for the year ended 2023 as compared to approximately 15.7% in the prior year. Despite the slight increase in gross margin, Treatment Segment gross margin was negatively impacted by higher variable costs from waste mix and the impact of overall increase in fixed costs.
Operating income in 2023 was $756,000 versus operating loss of $5.4 million in 2022. Income from continuing operations in 2023 was approximately $918,000 as compared to a loss from continuing operations of $3.2 million in 2022. Loss from continuing operations for 2022 included an income recorded in the amount of approximately $2.0 million (within other income and current other receivables), representing a refundable tax credit against the Company's shares of certain payroll taxes as permitted by the Employee Retention Credit ("ERC") program under the Coronavirus Aid, Relief and Economic Securities Act ("CARES Act"), as amended. The ERC program was provided to qualifying businesses that kept employee on their payroll during the COVID-19 pandemic.
Net income in 2023 was approximately $485,000 compared to net loss of $3.8 million in 2022. Income per share (both basic and diluted) was $0.04 in 2023 as compared to loss per share (both basic and diluted) of $0.29 in 2022.
The Company achieved EBITDA of $3.3 million from continuing operations for the twelve-months ended December 31, 2023, and Adjusted EBITDA of approximately ($3.3) million for the same period of 2022. There was no adjustment to EBITDA for the twelve-months ended December 31, 2023. The Company defines EBITDA as earnings before interest, taxes, depreciation and amortization. Adjusted EBITDA is defined as EBITDA before income from ERC refund claim (net of costs incurred). Neither EBITDA nor Adjusted EBITDA are measures of performance calculated in accordance with Accounting Principles Generally Accepted 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 (loss) from continuing operations for the three and twelve-months ended December 31, 2023, and 2022.
| Quarter Ended | Twelve Months Ended | ||||||||||||||||
| December 31, | December 31, | ||||||||||||||||
| (Unaudited) | (Unaudited) | ||||||||||||||||
| (In thousands) | 2023 | 2022 | 2023 | 2022 | |||||||||||||
| Income (loss) from continuing operations | $ | 470 | $ | (1,529 | ) | $ | 918 | $ | (3,211 | ) | |||||||
| Adjustments: | |||||||||||||||||
| Depreciation & amortization | 443 | 676 | 2,568 | 2,109 | |||||||||||||
| Interest income | (161 | ) | (30 | ) | (606 | ) | (99 | ) | |||||||||
| Interest expense | 134 | 52 | 323 | 175 | |||||||||||||
| Interest expense - financing fees | 13 | 17 | 93 | 61 | |||||||||||||
| Income tax (benefit) expense | (465 | ) | (231 | ) | 17 | (378 | ) | ||||||||||
| EBITDA | 434 | (1,045 | ) | 3,313 | (1,343 | ) | |||||||||||
| Income from ERC refund claim, net (1) | - | - | - | (1,908 | ) | ||||||||||||
| Adjusted EBITDA | $ | 434 | $ | (1,045 | ) | $ | 3,313 | $ | (3,251 | ) | |||||||
| (1) net of costs incurred in connection with the ERC program in the amount of approximately $67. | |||||||||||||||||
The tables below present certain financial information for the business segments, which exclude allocation of corporate expenses.
* Any references to "Audited" in the headings as noted in the table below and within the financial statements as follows are derived from a previously filed Form 10-K.
| Three Months Ended | Twelve Months Ended | |||||||||||||
| December 31, 2023 | December 31, 2023 | |||||||||||||
| (Unaudited) | (Unaudited) | |||||||||||||
| (In thousands) | Treatment | Services | Treatment | Services | ||||||||||
| Net revenues | $ | 10,255 | $ | 12,464 | $ | 43,477 | $ | 46,258 | ||||||
| Gross profit | 1,639 | 2,656 | 6,876 | 9,493 | ||||||||||
| Segment (loss) profit | (390 | ) | 2,782 | 2,228 | 5,716 | |||||||||
| Three Months Ended | Twelve Months Ended | ||||||||||||
| December 31, 2022 | December 31, 2022 | ||||||||||||
| (Unaudited) | (Audited) | ||||||||||||
| (In thousands) | Treatment | Services | Treatment | Services | |||||||||
| Net revenues | $ | 8,609 | $ | 8,148 | $ | 33,358 | $ | 37,241 | |||||
| Gross profit | 1,075 | 944 | 5,243 | 4,366 | |||||||||
| Segment profit | 2 | 117 | 1,767 | 1,698 | |||||||||
Conference Call
Perma-Fix will host a conference call at 11:00 AM Eastern Time on Wednesday, March 13, 2024. The call will be available in the investors section of the Company's website at https://ir.perma-fix.com/conference-calls, or by calling 888-506-0062 for U.S. callers or +1 973-528-0011 for international callers, and by entering access code: 514355. 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, March 20, 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: 50109.
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 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: long-term growth; key initiatives impactful to our business in 2024 and throughout 2025; revenue up to 50 million Euros generated under JV over the next 7 years; scope of work for the Company to ramp up in later phases of JV contract; treatment of effluent from DFLAW facility in early 2025; and long-term outlook based on growing project opportunities, sales pipeline, and potentially company-changing projects in 2025. 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; Congress fails to provides continuing funding for the DOD's and DOE's remediation projects; inability to obtain new foreign and domestic remediation contracts; inability to meet financial covenants; full or partial government shutdown; and the "Risk Factors" discussed in, and the additional factors referred to under "Special Note Regarding Forward-Looking Statements" of, our 2023 Form 10-K. 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 Relations
Crescendo Communications, LLC
(212) 671-1021
Herbert Strauss-European Investor Relations
herbert@eu-ir.com
+43 316 296 316
| PERMA-FIX ENVIRONMENTAL SERVICES, INC. CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||
| Three Months Ended | Twelve Months Ended | |||||||||||
| December 31, | December 31, | |||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||
| (Amounts in Thousands, Except for Per Share Amounts) | (Unaudited) | (Unaudited) | (Audited) | |||||||||
| Net revenues | $ | 22,719 | $ | 16,757 | $ | 89,735 | $ | 70,599 | ||||
| Cost of goods sold | 18,424 | 14,738 | 73,366 | 60,990 | ||||||||
| Gross profit | 4,295 | 2,019 | 16,369 | 9,609 | ||||||||
| Selling, general and administrative expenses | 4,006 | 3,617 | 14,975 | 14,652 | ||||||||
| Research and development | 221 | 90 | 561 | 336 | ||||||||
| Loss on disposal of property and equipment | 77 | 17 | 77 | 18 | ||||||||
| Loss (income) from operations | (9 | ) | (1,705 | ) | 756 | (5,397 | ) | |||||
| Other income (expense): | ||||||||||||
| Interest income | 161 | 30 | 606 | 99 | ||||||||
| Interest expense | (134 | ) | (52 | ) | (323 | ) | (175 | ) | ||||
| Interest expense-financing fees | (13 | ) | (17 | ) | (93 | ) | (61 | ) | ||||
| Other | - | (16 | ) | (11 | ) | 1,945 | ||||||
| Income (loss) from continuing operations before taxes | 5 | (1,760 | ) | 935 | (3,589 | ) | ||||||
| Income tax benefit (expense) | (465 | ) | (231 | ) | 17 | (378 | ) | |||||
| Income (loss) income from continuing operations, net of taxes | 470 | (1,529 | ) | 918 | (3,211 | ) | ||||||
| Loss from discontinued operations, net of taxes | (389 | ) | (164 | ) | (433 | ) | (605 | ) | ||||
| Net income (loss) | 81 | (1,693 | ) | 485 | (3,816 | ) | ||||||
| Net income (loss) per common share attributable to | ||||||||||||
| Perma-Fix Environmental Services, Inc. stockholders - basic and diluted: | ||||||||||||
| Continuing operations | $ | .04 | $ | (.12) | $ | .07 | $ | (.24) | ||||
| Discontinued operations | (.03) | (.01) | (.03) | (.05) | ||||||||
| Net income (loss) per common share | $ | .01 | $ | (.13) | $ | .04 | $ | (.29) | ||||
| Number of common shares used in computing | ||||||||||||
| net income (loss) per share: | ||||||||||||
| Basic | 13,619 | 13,324 | 13,506 | 13,280 | ||||||||
| Diluted | 13,838 | 13,324 | 13,739 | 13,280 | ||||||||
| PERMA-FIX ENVIRONMENTAL SERVICES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
| December 31, | December 31, | |||||||
| 2023 | 2022 | |||||||
| (Amounts in Thousands, Except for Share and Per Share Amounts) | (Unaudited) | (Audited) | ||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash | $ | 7,500 | $ | 1,866 | ||||
| Account receivable, net of allowance for credit losses of $30 and 57, respectively | 9,722 | 9,364 | ||||||
| Unbilled receivables | 8,432 | 6,062 | ||||||
| Other current assets | 4,893 | 6,219 | ||||||
| Assets of discontinued operations included in current assets | 13 | 15 | ||||||
| Total current assets | 30,560 | 23,526 | ||||||
| Net property and equipment | 19,009 | 18,957 | ||||||
| Property and equipment of discontinued operations | 81 | 81 | ||||||
| Operating lease right-of-use assets | 1,990 | 1,971 | ||||||
| Intangibles and other assets | 27,109 | 26,363 | ||||||
| Total assets | $ | 78,749 | $ | 70,898 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Current liabilities | $ | 25,678 | $ | 22,346 | ||||
| Current liabilities related to discontinued operations | 269 | 362 | ||||||
| Total current liabilities | 25,947 | 22,708 | ||||||
| Long-term liabilities | 12,472 | 9,749 | ||||||
| Long-term liabilities related to discontinued operations | 953 | 908 | ||||||
| Total liabilities | 39,372 | 33,365 | ||||||
| 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, | ||||||||
| 13,654,201 and 13,332,398 shares issued, respectively; | ||||||||
| 13,646,559 and 13,324,756 shares outstanding, respectively | 14 | 13 | ||||||
| Additional paid-in capital | 116,502 | 115,209 | ||||||
| Accumulated deficit | (76,951 | ) | (77,436 | ) | ||||
| Accumulated other comprehensive loss | (100 | ) | (165 | ) | ||||
| Less Common Stock held in treasury, at cost: 7,642 shares | (88 | ) | (88 | ) | ||||
| Total stockholders' equity | 39,377 | 37,533 | ||||||
| Total liabilities and stockholders' equity | $ | 78,749 | $ | 70,898 | ||||
