Perma-Fix
Achieves Profitability for the First Quarter of 2018
ATLANTA
– May 9, 2018 – Perma-Fix Environmental Services, Inc. (NASDAQ: PESI) (the “Company”) today announced
financial results for the first quarter ended March 31, 2018.
Q1
2018 financial highlights:
| ● | Gross
profit increases to $3.3 million versus $2.7 million for the first quarter of 2017 |
| ● | Gross
margin increases 480 basis points to 26.2% |
| ● | Reports
net income attributable to common stockholders of $136,000 or $0.01 per share versus
net loss of $727,000 or ($0.06) per share, for the same period in 2017 |
| ● | Waste
treatment backlog increases 34% versus the same period last year |
| ● | Achieves
Adjusted EBITDA (defined below) of $789,000 |
Mark
Duff, President and CEO of the Company, commented, “I am pleased to report we achieved profitability for the first quarter
of 2018, which reflects the success of our efforts to streamline operations while broadening our market base in both segments.
Our revenue remained unchanged over Q1 2017 due to stability in our Services Segment, and strong backlog at our treatment facilities
as we entered the first quarter. We continue to see our backlog grow within the Treatment Segment, which we believe provides us
good visibility into the second quarter and second half of the year. We are further encouraged by the improved budget within the
Department of Energy as well as defense clients that are beginning to move more waste while initiating remediation activities.
As a result, we expect a solid year in our Treatment Segment. Within the Services Segment, this was an active quarter for project
bids with several new proposal submittals, which we believe will provide potential for increased field projects this summer. Recent
initiatives to increase efficiency at our treatment facilities coupled with reduced costs from closure of the M&EC facility,
resulted in an improvement in both gross profit, and an increase in gross margin of more than 480 basis points. Accordingly, we
generated $789,000 of adjusted EBITDA and achieved positive net income attributable to common shareholders.”
“Looking
ahead, we continue to expand our offering, and are actively pursuing new opportunities that we believe will help drive growth
and further diversify our revenues. The expansion initiatives at each of our treatment facilities should come on line in the third
quarter, which we expect will help to further enhance our offering to clients and increase the addressable market.”
Financial
Results
Revenue
was $12.7 million for the first quarter of 2017 and 2018. Revenue from the Services Segment increased $1.0 million to $3.7 million
for the first quarter of 2018 from $2.7 million for the same period in 2017. Revenue for the Treatment Segment decreased to $9.0
million for the first quarter of 2018 from $10.0 million for the same period in 2017 primarily from decreased waste volume.
Gross
profit for the first quarter of 2018 was $3.3 million versus $2.7 million for the first quarter of 2017 primarily due to higher
revenue in the Services Segment. Gross margin increased to 26.2% from 21.4% for the same period last year primarily due to higher
revenue achieved within our Services Segment and the reduction in our fixed costs in our Treatment Segment.
Operating
income for the first quarter of 2018 was $317,000 versus operating loss of $520,000 for the first quarter of 2017. Net income
attributable to common stockholders for the first quarter of 2018 was $136,000 or $0.01 per share versus net loss of $727,000
or ($0.06) per share, for the same period in 2017.
The
Company reported Adjusted EBITDA of $789,000 from continuing operations at March 31, 2018, as compared to Adjusted EBITDA of $835,000
from continuing operations during the corresponding period of 2017. 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. 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 income (loss) from continuing operations for the three months ended March 31, 2018 and 2017.
| | |
Quarter
Ended | |
| | |
March
31, | |
| (In
thousands) | |
2018 | | |
2017 | |
| Income
(loss) from continuing operations | |
$ | 253 | | |
$ | (675 | ) |
| | |
| | | |
| | |
| Adjustments: | |
| | | |
| | |
| Depreciation
& amortization | |
| 372 | | |
| 1,155 | |
| Interest
income | |
| (49 | ) | |
| (35 | ) |
| Interest
expense | |
| 53 | | |
| 100 | |
| Interest
expense - financing fees | |
| 9 | | |
| 9 | |
| Income
tax expense | |
| 51 | | |
| 81 | |
| | |
| | | |
| | |
| EBITDA | |
$ | 689 | | |
$ | 635 | |
| | |
| | | |
| | |
| Research
and development costs related to Medical Isotope project | |
| 100 | | |
| 200 | |
| | |
| | | |
| | |
| Adjusted
EBITDA | |
$ | 789 | | |
$ | 835 | |
The
tables below present certain unaudited financial information for the business segments, which excludes allocation of corporate
expenses:
| | |
Quarter
Ended | | |
Quarter
Ended | |
| | |
March
31, 2018 | | |
March
31, 2017 | |
| | |
(Unaudited) | | |
(Unaudited) | |
| (In
thousands) | |
Treatment | | |
Services | | |
Medical | | |
Treatment | | |
Services | | |
Medical | |
| Revenues | |
$ | 8,959 | | |
$ | 3,699 | | |
$ | — | | |
$ | 10,034 | | |
$ | 2,673 | | |
$ | — | |
| Gross
profit | |
| 2,780 | | |
| 541 | | |
| — | | |
| 2,687 | | |
| 32 | | |
| — | |
| Segment
profit (loss) | |
| 1,693 | | |
| (86 | ) | |
| (100 | ) | |
| 1,522 | | |
| (707 | ) | |
| (200 | ) |
Conference
Call
Perma-Fix
will host a conference call at 11:00 a.m. ET on Wednesday, May 9, 2018. The call will be available on the Company’s website
at www.perma-fix.com, or by calling 877-407-0778 for U.S. callers, or +1 201-689-8565 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, 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 11:00 p.m. May 15, 2018, and can be accessed by calling: 877-481-4010 (U.S. callers) or +1
919-882-2331 (international callers) and entering conference ID: 29065.
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 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 three 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: good visibility into the second quarter and second half of the year; potential for
increased field projects this summer; continue growth of backlog at our treatment facilities; encouraged by the improved budget
within the Department of Energy as well as defense clients; expect a solid year in our Treatment Segment; expand our offering
and pursuing new opportunities that will help drive growth and further diversify our revenues; expansion initiatives at each our
treatment facilities should come on line in the third quarter; and reduced overhead.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, commercialize, 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;
Our Medical Segment obtains necessary financing or capital to complete its development; regulatory approvals; that Congress provides
continuing funding for the DOD’s and DOE’s remediation projects; ability 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 2017 Form 10-K and Form 10-Q for quarter ended March 31, 2018. 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.
Please
visit us on the World Wide Web at http://www.perma-fix.com.
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
(UNAUDITED)
| | |
Three
Months Ended
March
31, | |
| (Amounts
in Thousands, Except for Per Share Amounts) | |
2018 | | |
2017 | |
| | |
| | |
| |
| Revenues | |
$ | 12,658 | | |
$ | 12,707 | |
| Cost
of goods sold | |
| 9,337 | | |
| 9,988 | |
| Gross
profit | |
| 3,321 | | |
| 2,719 | |
| | |
| | | |
| | |
| Selling,
general and administrative expenses | |
| 2,780 | | |
| 2,850 | |
| Research
and development | |
| 232 | | |
| 389 | |
| Gain
on disposal of property and equipment | |
| (8 | ) | |
| — | |
| Income
(loss) from operations | |
| 317 | | |
| (520 | ) |
| | |
| | | |
| | |
| Other
income (expense): | |
| | | |
| | |
| Interest
income | |
| 49 | | |
| 35 | |
| Interest
expense | |
| (53 | ) | |
| (100 | ) |
| Interest
expense-financing fees | |
| (9 | ) | |
| (9 | ) |
| Income
(loss) from continuing operations before taxes | |
| 304 | | |
| (594 | ) |
| Income
tax expense | |
| (51 | ) | |
| (81 | ) |
| Income
(loss) from continuing operations, net of taxes | |
| 253 | | |
| (675 | ) |
| | |
| | | |
| | |
| Loss
from discontinued operations, net of taxes of $0 | |
| (157 | ) | |
| (131 | ) |
| Net
income (loss) | |
| 96 | | |
| (806 | ) |
| | |
| | | |
| | |
| Net
loss attributable to non-controlling interest | |
| (40 | ) | |
| (79 | ) |
| | |
| | | |
| | |
| Net
Income (loss) attributable to Perma-Fix Environmental Services, Inc. common stockholders | |
$ | 136 | | |
$ | (727 | ) |
| | |
| | | |
| | |
| Net
income (loss) per common share attributable to Perma-Fix Environmental Services, Inc. stockholders - basic and diluted: | |
| | | |
| | |
| | |
| | | |
| | |
| Continuing
operations | |
$ | .02 | | |
$ | (.05 | ) |
| Discontinued
operations | |
| (.01 | ) | |
| (.01 | ) |
| Net
income (loss) per common share | |
$ | .01 | | |
$ | (.06 | ) |
| | |
| | | |
| | |
| Number
of common shares used in computing net income (loss) per share: | |
| | | |
| | |
| Basic | |
| 11,747 | | |
| 11,681 | |
| Diluted | |
| 11,773 | | |
| 11,681 | |
PERMA-FIX
ENVIRONMENTAL SERVICES, INC.
CONSOLIDATED
BALANCE SHEET
| | |
(Unaudited) | | |
(Audited) | |
| (Amounts
in Thousands, Except for Share and Per Share Amounts) | |
March
31, 2017 | | |
December
31, 2017 | |
| | |
| | |
| |
| ASSETS | |
| | | |
| | |
| Current
assets: | |
| | | |
| | |
| Cash
and equivalents | |
$ | 2,916 | | |
$ | 1,063 | |
| Account
receivable, net of allowance for doubtful | |
| | | |
| | |
| accounts
of $725 and $720, respectively | |
| 4,762 | | |
| 7,940 | |
| Unbilled
receivables | |
| 4,574 | | |
| 4,547 | |
| Other
current assets | |
| 3,621 | | |
| 3,674 | |
| Assets
of discontinued operations included in current assets, net of allowance for doubtful accounts of $0 for each period presented | |
| 94 | | |
| 89 | |
| Total
current assets | |
| 15,967 | | |
| 17,313 | |
| | |
| | | |
| | |
| Net
property and equipment | |
| 14,830 | | |
| 14,870 | |
| Property
and equipment of discontinued operations, net of accumulated depreciation of $10 for each period presented | |
| 81 | | |
| 81 | |
| Intangibles
and other assets | |
| 26,928 | | |
| 27,079 | |
| Other
assets related to discontinued operations | |
| 176 | | |
| 195 | |
| Total
assets | |
$ | 57,982 | | |
$ | 59,538 | |
| | |
| | | |
| | |
| LIABILITIES
AND STOCKHOLDERS’ EQUITY | |
| | | |
| | |
| Current
liabilities | |
$ | 17,547 | | |
$ | 18,676 | |
| Current
liabilities related to discontinued operations | |
| 892 | | |
| 905 | |
| Total
current liabilities | |
| 18,439 | | |
| 19,581 | |
| | |
| | | |
| | |
| Long-term
liabilities | |
| 10,869 | | |
| 11,152 | |
| Long-term
liabilities related to discontinued operations | |
| 351 | | |
| 359 | |
| Total
liabilities | |
| 29,659 | | |
| 31,092 | |
| Commitments
and Contingencies | |
| | | |
| | |
| Series
B 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 plus accrued and unpaid dividends of $1,011 and $955, respectively | |
| 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; 30,000,000 shares authorized, 11,754,697 and 11,738,623 shares issued, respectively; 11,747,055 and
11,730,981 shares outstanding, respectively | |
| 12 | | |
| 12 | |
| Additional
paid-in capital | |
| 106,523 | | |
| 106,417 | |
| Accumulated
deficit | |
| (78,074 | ) | |
| (77,893 | ) |
| Accumulated
other comprehensive loss | |
| (120 | ) | |
| (112 | ) |
| Less
Common Stock held in treasury, at cost: 7,642 shares | |
| (88 | ) | |
| (88 | ) |
| Total
Perma-Fix Environmental Services, Inc. stockholders’ equity | |
| 28,253 | | |
| 28,336 | |
| Non-controlling
interest in subsidiary | |
| (1,215 | ) | |
| (1,175 | ) |
| Total
stockholders’ equity | |
| 27,038 | | |
| 27,161 | |
| | |
| | | |
| | |
| Total
liabilities and stockholders’ equity | |
$ | 57,982 | | |
$ | 59,538 | |
