Perma-Fix
Reports Results for the Fourth Quarter and Fiscal 2018
Announces
$17 million in new contract awards for 2019
ATLANTA
– April 1, 2019 – Perma-Fix Environmental Services, Inc. (NASDAQ: PESI) (the “Company”) today announced
results for the fourth quarter and full year ended December 31, 2018.
Mark
Duff, Chief Executive Officer, stated, “We experienced some weakness in the fourth quarter of 2018 due, in part, to an unplanned
outage of approximately two weeks at our Perma-Fix Northwest (PFNW) facility, which had a resulting revenue impact of approximately
$800,000. In addition, we incurred continued expenses related to the planned closure of our M&EC facility. Despite the shutdown
at PFNW, our Treatment Segment revenue increased, and we generated strong waste receipts during the quarter. As a result, we entered
2019 with a strong backlog and sales pipeline.”
“As
recently reported, we have been awarded several new projects in March that we believe will further increase our funded backlog
and bolster our Services Segment beginning in the second quarter of 2019. We look forward to formally signing and announcing these
projects in the coming weeks, which include remediation work in Canada as well as several U.S. Department of Energy (DOE) locations
throughout the United States. We estimate the total contract value of these awards collectively to be approximately $17 million
through 2019 alone. These wins reflect the improvements we made last year within our business development organization, which
has also bolstered our sales pipeline going forward.”
“We
completed testing and demonstration of the GeoMelt™ unit in the fourth quarter of 2018, and formally commenced commercial
operations of the unit in the first quarter of 2019. We believe that this added capability should provide us with the capacity
to obtain a significant multi-year backlog from a new, incremental waste stream, and reflects our success in diversifying our
revenue streams.”
“We
are particularly encouraged by the new direction of the DOE as it relates to the procurement process within the DOE’s Office
of Environmental Management. The Department has adopted a new “End State” approach to cleanup, which provides increased
emphasis on acceleration of project schedules to include waste management metrics such as waste disposition. This change in procurement
strategy directly supports the commercialization of waste processing and treatment, which is a foundation of the Perma-Fix offering.”
“Regarding
the planned closure of the M&EC facility, I am pleased to report we have completed the cleanup phase associated with decontamination
to support releasing the building under the commitments of the closure plan. We are in the process of completing final verification
surveys while continuing to work with the landlord and State of Tennessee for final release of the permits. As a result, we believe
we are well positioned heading into 2019, in terms of both revenue and overall financial performance.”
Financial
Results
Revenue
for the fourth quarter of 2018 was $11.7 million versus $12.6 million for the same period last year. Revenue from the Services
Segment decreased by $1.2 million to $2.7 million from $3.9 million for the same period in 2017. Services Segment revenues are
project based; as such, the scope, duration and completion of each project vary. As a result, the Services Segment revenues are
subject to differences relating to timing and project value. Revenue for the Treatment Segment increased approximately $333,000
to $9.0 million in the fourth quarter of 2018 from $8.7 million for the corresponding period of 2017.
Gross
profit for the fourth quarter of 2018 was $1.3 million and $1.8 million for the fourth quarter of 2017. Gross profit for the fourth
quarter of 2018 and 2017 included additional closure costs recorded in the amount of approximately $1,015,000 and $850,000, respectively,
in connection with the closure of the Company’s M&EC facility.
Operating
loss for the fourth quarter of 2018 was $2.1 million versus an operating loss of $1.2 million for the fourth quarter of 2017.
Net loss from continuing operations for the fourth quarter of 2018 was approximately $2.4 million as compared to net income from
continuing operations of $340,000 for the corresponding period of 2017. Net income from continuing operations for the fourth quarter
of 2017 included a tax benefit recorded in the amount of approximately $1.7 million resulting from the Tax Cuts and Jobs Act of
2017 enacted into law on December 22, 2017. Net loss attributable to common stockholders for the fourth quarter of 2018 was $2.4
million or ($0.20) per share as compared to net income of $260,000 or $0.02 per share for the same period in 2017.
The
Company’s Adjusted EBITDA at December 31, 2018 was approximately $2.0 million from continuing operations as compared to
approximately $2.4 million for 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, impairment charges on tangible assets, closure costs accrued for M&EC subsidiary and net gain on exchange
offer of Series B Preferred Stock of M&EC. Both EBITDA and Adjusted EBITDA are not 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 (loss) income from continuing operations for the three and twelve months ended December
31, 2018 and 2017.
| | |
Quarter Ended
December 31,
(Unaudited) | | |
Twelve Months Ended
December 31,
(Audited) | |
| (In thousands) | |
2018 | | |
2017 | | |
2018 | | |
2017 | |
| (Loss) income from continuing operations | |
$ | (2,432 | ) | |
$ | 340 | | |
$ | (1,074 | ) | |
$ | (3,538 | ) |
| | |
| | | |
| | | |
| | | |
| | |
| Adjustments: | |
| | | |
| | | |
| | | |
| | |
| Depreciation & amortization | |
| 360 | | |
| 409 | | |
| 1,455 | | |
| 3,803 | |
| Interest income | |
| (83 | ) | |
| (35 | ) | |
| (295 | ) | |
| (140 | ) |
| Interest expense | |
| 74 | | |
| 66 | | |
| 251 | | |
| 315 | |
| Interest expense - financing fees | |
| 10 | | |
| 9 | | |
| 38 | | |
| 35 | |
| Income tax expense (benefit) | |
| 337 | | |
| (1,504 | ) | |
| (936 | ) | |
| (1,285 | ) |
| | |
| | | |
| | | |
| | | |
| | |
| EBITDA | |
| (1,734 | ) | |
| (715 | ) | |
| (561 | ) | |
| (810 | ) |
| | |
| | | |
| | | |
| | | |
| | |
| Research and development costs related to medical Isotope project | |
| 552 | | |
| 194 | | |
| 811 | | |
| 1,141 | |
| Impairment loss on tangible assets | |
| — | | |
| — | | |
| — | | |
| 672 | |
| Closure costs accrued for M&EC subsididary | |
| 1,015 | | |
| 850 | | |
| 3,323 | | |
| 1,400 | |
| Net gain on exchange offe of Series B Preferred Stock of M&EC | |
| — | | |
| — | | |
| (1,596 | ) | |
| — | |
| | |
| | | |
| | | |
| | | |
| | |
| Adjusted EBITDA | |
$ | (167 | ) | |
$ | 329 | | |
$ | 1,977 | | |
$ | 2,403 | |
The
tables below present certain financial information for the business segments, which exclude allocation of corporate expenses:
| | |
Three Months Ended
December 31, 2018
(Unaudited) | | |
Twelve Months Ended
December 31, 2018
(Audited) | |
| (In thousands) | |
Treatment | | |
Services | | |
Medical | | |
Treatment | | |
Services | | |
Medical | |
| Net revenues | |
$ | 9,063 | | |
$ | 2,675 | | |
$ | — | | |
$ | 36,271 | | |
$ | 13,268 | | |
$ | — | |
| Gross profit (loss) | |
| 1,331 | | |
| (58 | ) | |
| — | | |
| 7,197 | | |
| 1,264 | | |
| — | |
| Segment (loss) profit | |
| (62 | ) | |
| (563 | ) | |
| (552 | ) | |
| 5,493 | | |
| (756 | ) | |
| (811 | ) |
| | |
Three Months Ended
December 31, 2017
(Unaudited) | | |
Twelve Months Ended
December 31, 2017
(Audited) | |
| (In thousands) | |
Treatment | | |
Services | | |
Medical | | |
Treatment | | |
Services | | |
Medical | |
| Net revenues | |
$ | 8,730 | | |
$ | 3,859 | | |
$ | — | | |
$ | 37,750 | | |
$ | 12,019 | | |
$ | — | |
| Gross profit | |
| 1,441 | | |
| 361 | | |
| — | | |
| 7,916 | | |
| 704 | | |
| — | |
| Segment profit (loss) | |
| 2,202 | | |
| (549 | ) | |
| (194 | ) | |
| 4,867 | | |
| (2,286 | ) | |
| (1,141 | ) |
Conference
Call
Perma-Fix
will host a conference call at 12:00 p.m. ET on Monday, April 1, 2019. 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 midnight April 8, 2019, and can be accessed by calling: 877-481-4010 (U.S. callers) or +1
919-882-2331 (international callers) and entering conference ID: 45699.
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: execution of the contract relating to these new projects awarded in March; increase
our funded backlog and bolster our Services Segment beginning in the second quarter of 2019; the total contract value of these
new awards should collectively be approximately $17 million through 2019; the benefit of the added capability from GeoMelt; the
benefits as a result of DOE’s change in procurement strategy; revenue and financial performance for balance of 2019; and
obtaining waiver/consent from our lender and new loan. 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; completion of construction projects on a timely basis; regulatory approvals;
Congress provides continuing funding for the DOD’s and DOE’s remediation projects; ability to obtain new foreign and
domestic remediation contracts; our ability to fund the commercialization of our technology; and the additional factors referred
to under “Risk Factors” and “Special Note Regarding Forward-Looking Statements” of our 2017 Form 10-K
and subsequently filed Form 10-Qs during 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
| | |
Three Months Ended
December 31, | | |
Twelve Months Ended
December 31, | |
| | |
2018 | | |
2017 | | |
2018 | | |
2017 | |
| (Amounts in Thousands, Except for Per Share Amounts) | |
(Unaudited) | | |
(Audited) | |
| | |
| | |
| | |
| | |
| |
| Net revenues | |
$ | 11,738 | | |
$ | 12,589 | | |
$ | 49,539 | | |
$ | 49,769 | |
| Cost of goods sold | |
| 10,465 | | |
| 10,787 | | |
| 41,078 | | |
| 41,149 | |
| Gross profit | |
| 1,273 | | |
| 1,802 | | |
| 8,461 | | |
| 8,620 | |
| | |
| | | |
| | | |
| | | |
| | |
| Selling, general and administrative expenses | |
| 2,680 | | |
| 2,764 | | |
| 10,741 | | |
| 11,101 | |
| Research and development | |
| 690 | | |
| 294 | | |
| 1,370 | | |
| 1,595 | |
| Gain on disposal of property and equipment | |
| (12 | ) | |
| (11 | ) | |
| (46 | ) | |
| (12 | ) |
| Impairment loss on tangible assets | |
| — | | |
| — | | |
| — | | |
| 672 | |
| Loss from operations | |
| (2,085 | ) | |
| (1,245 | ) | |
| (3,604 | ) | |
| (4,736 | ) |
| | |
| | | |
| | | |
| | | |
| | |
| Other income (expense): | |
| | | |
| | | |
| | | |
| | |
| Interest income | |
| 83 | | |
| 35 | | |
| 295 | | |
| 140 | |
| Interest expense | |
| (74 | ) | |
| (66 | ) | |
| (251 | ) | |
| (315 | ) |
| Interest expense-financing fees | |
| (10 | ) | |
| (9 | ) | |
| (38 | ) | |
| (35 | ) |
| Other | |
| (9 | ) | |
| 121 | | |
| (8 | ) | |
| 123 | |
| Net gain on exchange offer of Series B Preferred Stock of subsidiary | |
| — | | |
| — | | |
| 1,596 | | |
| — | |
| Loss from continuing operations before taxes | |
| (2,095 | ) | |
| (1,164 | ) | |
| (2,010 | ) | |
| (4,823 | ) |
| Income tax expense (benefit) | |
| 337 | | |
| (1,504 | ) | |
| (936 | ) | |
| (1,285 | ) |
| (Loss) income from continuing operations, net of taxes | |
| (2,432 | ) | |
| 340 | | |
| (1,074 | ) | |
| (3,538 | ) |
| | |
| | | |
| | | |
| | | |
| | |
| Loss from discontinued operations, net of taxes | |
| (173 | ) | |
| (156 | ) | |
| (667 | ) | |
| (592 | ) |
| Net (loss) income | |
| (2,605 | ) | |
| 184 | | |
| (1,741 | ) | |
| (4,130 | ) |
| | |
| | | |
| | | |
| | | |
| | |
| Net loss attributable to non-controlling interest | |
| (218 | ) | |
| (76 | ) | |
| (320 | ) | |
| (450 | ) |
| | |
| | | |
| | | |
| | | |
| | |
| Net (loss) income attributable to Perma-Fix Environmental Services, Inc. common stockholders | |
$ | (2,387 | ) | |
$ | 260 | | |
$ | (1,421 | ) | |
$ | (3,680 | ) |
| | |
| | | |
| | | |
| | | |
| | |
| Net (loss) income per common share attributable to Perma-Fix Environmental Services, Inc. stockholders - basic and diluted: | |
| | | |
| | | |
| | | |
| | |
| Continuing operations | |
$ | (.19 | ) | |
$ | .03 | | |
$ | (.06 | ) | |
$ | (.26 | ) |
| Discontinued operations | |
| (.01 | ) | |
| (.01 | ) | |
| (.06 | ) | |
| (.05 | ) |
| Net (loss) income per common share | |
$ | (.20 | ) | |
$ | .02 | | |
$ | (.12 | ) | |
$ | (.31 | ) |
| | |
| | | |
| | | |
| | | |
| | |
| Number of common shares used in computing net (loss) income per share: | |
| | | |
| | | |
| | | |
| | |
| Basic | |
| 11,937 | | |
| 11,731 | | |
| 11,855 | | |
| 11,706 | |
| Diluted | |
| 11,937 | | |
| 11,752 | | |
| 11,855 | | |
| 11,706 | |
PERMA-FIX
ENVIRONMENTAL SERVICES, INC.
CONSOLIDATED
BALANCE SHEETS
(Audited)
| (Amounts in Thousands, Except for Share and Per Share Amounts) | |
December 31, 2018 | | |
December 31, 2017 | |
| | |
| | |
| |
| ASSETS | |
| | | |
| | |
| Current assets: | |
| | | |
| | |
| Cash | |
$ | 810 | | |
$ | 1,063 | |
| Account receivable, net of allowance for doubtful accounts of $105 and $720, respectively | |
| 7,735 | | |
| 7,940 | |
| Unbilled receivables | |
| 3,105 | | |
| 4,547 | |
| Other current assets | |
| 3,001 | | |
| 3,674 | |
| Assets of discontinued operations included in current assets, net of allowance for doubtful accounts of $0 for each period presented | |
| 107 | | |
| 89 | |
| Total current assets | |
| 14,758 | | |
| 17,313 | |
| | |
| | | |
| | |
| Net property and equipment | |
| 15,739 | | |
| 14,870 | |
| Property and equipment of discontinued operations, net of accumulated depreciation of $10 for
each period presented | |
| 81 | | |
| 81 | |
| Intangibles and other assets | |
| 26,746 | | |
| 27,079 | |
| Other assets related to discontinued operations | |
| 118 | | |
| 195 | |
| Total assets | |
$ | 57,442 | | |
$ | 59,538 | |
| | |
| | | |
| | |
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |
| | | |
| | |
| Current liabilities | |
$ | 21,155 | | |
$ | 18,676 | |
| Current liabilities related to discontinued operations | |
| 356 | | |
| 905 | |
| Total current liabilities | |
| 21,511 | | |
| 19,581 | |
| | |
| | | |
| | |
| Long-term liabilities | |
| 8,835 | | |
| 11,152 | |
| Long-term liabilities related to discontinued operations | |
| 963 | | |
| 359 | |
| Total liabilities | |
| 31,309 | | |
| 31,092 | |
| Commitments and Contingencies | |
| | | |
| | |
| Series B Preferred Stock of subsidiary, $0 par value; 1,467,396 shares authorized, 0 and 1,284,730 shares issued, respectively; 0 and 1,284,730 shares outstanding, respectively; liquidation value $1.00 per share plus accrued and unpaid dividends of $0 and $955, respectively | |
| — | | |
| 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, 11,944,215 and 11,738,623 shares issued, respectively; 11,936,573 and 11,730,981 shares outstanding, respectively | |
| 12 | | |
| 12 | |
| Additional paid-in capital | |
| 107,548 | | |
| 106,417 | |
| Accumulated deficit | |
| (79,630 | ) | |
| (77,893 | ) |
| Accumulated other comprehensive loss | |
| (214 | ) | |
| (112 | ) |
| Less Common Stock held in treasury, at cost: 7,642 shares | |
| (88 | ) | |
| (88 | ) |
| Total Perma-Fix Environmental Services, Inc. stockholders’ equity | |
| 27,628 | | |
| 28,336 | |
| Non-controlling interest in subsidiary | |
| (1,495 | ) | |
| (1,175 | ) |
| Total stockholders’ equity | |
| 26,133 | | |
| 27,161 | |
| | |
| | | |
| | |
| Total liabilities and stockholders’ equity | |
$ | 57,442 | | |
$ | 59,538 | |
