Date: August 5, 2010
Source: Perma-Fix Environmental Services, Inc.
Perma-Fix Environmental Services, Inc. (PESI) today announced results for the second quarter ended June 30, 2010.
Dr. Louis F. Centofanti, Chairman and Chief Executive Officer, stated, "The 18.6% year-over-year growth in our second quarter revenue to $28.1 million was the result of additional on-site service work at Hanford and an increase in treatment of higher activity waste. Our Nuclear segment generated $25.2 million of revenue during the quarter, an increase of 21.5% over the prior year. The gross profit for the quarter was $6.7 million, which included an $844,000 charge related to an increase in the environmental reserve at one of our industrial facilities. Excluding this charge, gross profit would have increased 39.1% to $7.6 million, and our gross margin would have increased 398 basis points to 27.0%. This gross margin increase directly reflects the increase in high activity waste in our revenue mix. We achieved $2.9 million of operating income for the quarter and operating margin increased 376 basis points to 10.4%. We generated $4.1 million of EBITDA and earnings per share of $0.03 for the second quarter of 2010, as compared to $2.8 million of EBITDA and earnings per share of $0.01 for the second quarter of 2009. We achieved these strong results despite the aforementioned environmental reserve and $904,000 of non-cash income tax expense related to our net operating loss carryforwards that we recorded in the second quarter of 2010."
"We are also pleased to report that Perma-Fix was recently awarded its first direct Department of Energy (DOE) prime contract for Low-Level and Mixed Low-Level Radioactive and Hazardous waste treatment services, which will allow us to bid directly on low level and hazardous waste treatment services. We were one of only four companies recently awarded these Indefinite Delivery/Indefinite Quantity (ID/IQ) contracts, which are utilized by the DOE when exact quantities and timing of waste shipments are unknown. DOE's Office of Environmental Management determined that it needed an efficient mechanism to contract with companies capable of treating large volumes of diverse radioactive wastes generated at its facilities throughout the United States."
"Earlier this year, we completed the design, construction, and installation of a new proprietary process to treat Tritium contaminated waste. During the second quarter we completed an important and successful project which demonstrated our ability to treat these waste streams originating from the DOE's Savannah River Site located in Aiken, SC. We see the treatment of Tritium waste as an attractive new opportunity going forward."
Financial Results
Revenue for the second quarter of 2010 increased 18.6% to $28.1 million, versus $23.7 million for the same period last year. The increase in revenue is mainly attributable to increased on-site work at the Hanford facility in Richland, Washington and the Company's shift into higher activity wastes. Revenue for the Nuclear Segment increased to $25.2 million from $20.7 million for the same period last year. Revenue for the Industrial Segment increased to $2.2 million versus $2.0 million for the same period last year due primarily to higher waste volume and improved pricing. Revenue from the Engineering Segment decreased to $666,000 from $1.0 million for the same period last year.
Gross profit for the second quarter of 2010 increased 23.6% to $6.7 million versus $5.5 million for the second quarter of 2009 primarily due to higher priced wastes and the subcontract with the CH Plateau Remediation Company. The gross profit for the quarter included an $844,000 charge related to an increase in the environmental reserve for remediation at one of our Industrial Segment facilities.
Operating income for the second quarter increased 86% to $2.9 million versus $1.6 million for the second quarter of 2009. Net income for the second quarter of 2010 was $1.4 million, or $0.03 per share, versus net income of $751,000 or $0.01 per share, for the same period last year. Net income in the second quarter of 2010 included $1.1 million in income tax expense, compared to only $91,000 in 2009, as 2009 included a full valuation allowance of our available net operating losses carry forward. Net income in the second quarter of 2009 also included a loss from discontinued operations of approximately $242,000.
The Company had EBITDA of $4.1 million for continuing operations during the quarter ended June 30, 2010, as compared to EBITDA of approximately $2.8 million for the same period of 2009. The Company defines EBITDA as earnings before interest, taxes, depreciation and amortization. EBITDA is not a measure of performance calculated in accordance with accounting principles generally accepted in the United States ("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 means to measure performance. The Company's measurements of EBITDA may not be comparable to similar titled measures reported by other companies. The table below reconciles EBITDA, a non-GAAP measure, to net income for the three months and six months ended June 30, 2010 and 2009.
Quarter Ended Six Months Ended
June 30, June 30,
------------------ ------------------
(In thousands) 2010 2009 2010 2009
--------------------- -------- -------- -------- --------
Net Income $ 1,515 $ 993 $ 2,296 $ 1,242
Adjustments:
Depreciation &
Amortization 1,213 1,201 2,349 2,381
Interest Income (16) (41) (37) (93)
Interest Expense 208 468 427 1,015
Interest Expense -
Financing Fees 103 63 206 76
Income Tax Expense 1,101 91 1,537 100
-------- -------- -------- --------
EBITDA $ 4,124 $ 2,775 $ 6,778 $ 4,721
======== ======== ======== ========
The tables below present certain financial information for the business segments, excluding allocation of corporate expenses:
Quarter Ended June 30, 2010 Quarter Ended June 30, 2009
---------------------------------- ----------------------------------
(In thousands) Nuclear Engineering Industrial Nuclear Engineering Industrial
-------------------------- --------- ----------- ---------- --------- ----------- ----------
Net revenues $ 25,181 $ 666 $ 2,249 $ 20,732 $ 1,004 $ 1,962
Gross profit (negative
gross profit) 7,036 40 (336) 4,872 282 300
Segment profit (loss) 4,248 (49) (797) 2,718 159 (141)
Six Months Ended June 30, 2010 Six Months Ended June 30, 2009
---------------------------------- ----------------------------------
(In thousands) Nuclear Engineering Industrial Nuclear Engineering Industrial
------------------- --------- ----------- ---------- --------- ----------- ----------
Net revenues $ 48,073 $ 1,340 $ 4,542 $ 39,846 $ 1,783 $ 4,071
Gross profit 11,627 199 253 8,792 477 756
Segment profit
(loss) 6,655 (10) (607) 4,472 245 (87)
Conference Call
Perma-Fix will host a conference call at 9:00 a.m. ET on Thursday, August 5, 2010. The call will be available on the Company's website at www.perma-fix.com, or by calling (877) 407-8031 for U.S. callers, or (201) 689-8031 for international callers. 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 midnight August 12, 2010, and can be accessed by calling: (877) 660-6853 (U.S. callers) or (201) 612-7415 (international callers) and entering account # 286 and conference ID: 354705.
About Perma-Fix Environmental Services
Perma-Fix Environmental Services, Inc., a national environmental services company, provides unique mixed waste and industrial waste management services. The Company's increased focus on nuclear services includes radioactive and mixed waste treatment services for hospitals, research labs and institutions, federal agencies, including DOE, DOD, and nuclear utilities. The Company's industrial services treat hazardous and non-hazardous waste for a variety of customers including, Fortune 500 companies, federal, state and local agencies and thousands of other clients. Nationwide, the Company operates seven waste treatment facilities.
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: the treatment of Tritium waste as an attractive new opportunity going forward. 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 technologies; that neither the federal government nor any other party to a subcontract involving the federal government terminates or renegotiates any material contract granted to us prior to expiration of the term of the contract, as such contracts are generally terminable or renegotiable on 30 days notice, at the government's option; or 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; that Congress provides continuing funding for the Department of Defense's and Department of Energy's remediation projects; and the additional factors referred to under "Special Note Regarding Forward-Looking Statements" of our 2009 Form 10-K and From 10-Q for the quarter ended March 31, 2010. 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.
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) 2010 2009 2010 2009
-------------------------------- ------- ------- ------- --------
Net revenues 28,096 23,698 53,955 45,700
Cost of goods sold 21,356 18,244 41,876 35,675
------- ------- ------- --------
Gross profit 6,740 5,454 12,079 10,025
Selling, general and
administrative expenses 3,829 3,889 7,653 7,707
Loss (gain) on disposal of
property and equipment -- -- 2 (12)
------- ------- ------- --------
Income from operations 2,911 1,565 4,424 2,330
Other income (expense):
Interest income 16 41 37 93
Interest expense (208) (468) (427) (1,015)
Interest expense-financing fees (103) (63) (206) (76)
Other -- 9 5 10
------- ------- ------- --------
Income from continuing
operations before taxes 2,616 1,084 3,833 1,342
Income tax expense 1,101 91 1,537 100
------- ------- ------- --------
Income from continuing
operations 1,515 993 2,296 1,242
(Loss) income from discontinued
operations, net of taxes (69) (242) (213) 57
------- ------- ------- --------
Net income applicable to Common
Stockholders 1,446 751 2,083 1,299
======= ======= ======= ========
Net income (loss) per common
share -- basic
Continuing operations .03 .02 .04 .02
Discontinued operations -- (.01) -- --
------- ------- ------- --------
Net income per common share .03 .01 .04 .02
======= ======= ======= ========
Net income (loss) per common
share -- diluted
Continuing operations .03 .02 .04 .02
Discontinued operations -- (.01) -- --
------- ------- ------- --------
Net income per common share .03 .01 .04 .02
======= ======= ======= ========
Number of common shares used in
computing
net income (loss) per share:
Basic 54,991 54,124 54,843 54,053
Diluted 55,124 54,537 55,012 54,189
PERMA-FIX ENVIRONMENTAL SERVICES, INC.
CONSOLIDATED BALANCE SHEET
June 30, December
2010 31,
(Amounts in Thousands, Except for
Share Amounts) (Unaudited) 2009
---------------------------------- ----------- ----------
ASSETS
Current assets:
Cash & equivalents $ 123 $ 196
Account receivable, net of
allowance for doubtful
accounts of $304 and $296 10,078 13,141
Unbilled receivables 8,166 9,858
Other current assets 2,593 3,448
Deferred tax assets - current 707 1,856
Assets of discontinued operations
included in current assets 109 174
----------- ----------
Total current assets 21,776 28,673
Net property and equipment 44,881 45,727
Property and equipment of
discontinued operations, net of
accumulated
depreciation of $10 and $13,
respectively 637 651
Deferred tax asset, net of
liabilities 208 272
Intangibles and other assets 55,706 50,752
----------- ----------
Total assets $ 123,208 $ 126,075
=========== ==========
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities 21,699 26,190
Current liabilities related to
discontinued operations 740 993
----------- ----------
Total current liabilities 22,439 27,183
Long-term liabilities 21,752 22,655
Long-term liabilities related to
discontinued operations 1,336 1,433
----------- ----------
Total liabilities 45,527 51,271
Commitments and Contingencies
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 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;
75,000,000 shares authorized,
55,032,117 and
54,628,904 shares issued,
respectively; 54,993,907 and
54,628,904
outstanding, respectively 55 55
Additional paid-in capital 100,523 99,641
Accumulated deficit (24,094) (26,177)
----------- ----------
76,484 73,519
Less Common Stock in treasury at
cost: 38,210 shares (88) --
----------- ----------
76,396 73,519
----------- ----------
Total liabilities and
stockholders' equity $ 123,208 $ 126,075
=========== ==========
For more information, contact:
Perma-Fix Environmental Services, Inc.
Dr. Louis F. Centofanti, Chairman and CEO
(770) 587-5155
Crescendo Communications, LLC
David K. Waldman, US Investor Relations
(212) 671-1021
Herbert Strauss, European Investor Relations
+43 316 296 316
herbert@eu-ir.com.
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