Perma-Fix Provides Business Update for
the First Quarter of 2019
ATLANTA – May 9, 2019 – 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, 2019.
Mark Duff, President
and CEO of the Company, commented, “Revenue within our Treatment Segment increased to $9.9 million for the first quarter
of 2019 compared to $9.0 million for the same period last year. We achieved these results despite weather and shipment delays
at our Northwest facility, as well as delayed permit approvals due to the government shutdown. In our Treatment Segment, our backlog
was approximately $9.9 million at March 31, 2019, as we head into the second quarter, where the spring and summer months
are historically our busiest. As previously reported, we have concluded the cleanup phase at M&EC and are currently performing
the final verification surveys, which we expect will be completed in the second quarter.”
“Within our
Services Segment, we experienced temporary weakness due to the timing of projects. Our recently implemented strategic plan is beginning
to show success, with its focus on expansion into both commercial and international markets to increase our revenues and shareholder
value. As previously announced, we have been awarded several substantial projects, including a major contract in Canada, all commencing
in the second quarter of 2019. Each of these contracts has been signed, transitions have been successful, and we are progressing
on schedule. We estimate the collective value of these contracts to be approximately $17 million through 2019 alone. We are bidding
on a number of additional such contracts and look forward to providing further updates.”
Financial Results
Revenue was $11.7 million for the first quarter
of 2019 as compared to $12.7 million for the corresponding period of 2018. Revenue for the Treatment Segment increased to $9.9
million for the first quarter of 2019 from $9.0 million for the same period in 2018 primarily from higher averaged price waste
from waste mix. Revenue from the Services Segment was approximately $1.8 million for the first quarter of 2019, compared to $3.7
million for the same period in 2018. The decrease was primarily related to the timing of projects, as the Services Segment completed
a number of projects by year end 2018. During the latter part of the first quarter of 2019, the Services Segment was awarded several
new contracts with project work for these contracts expected to commence during the second quarter of 2019.
Gross profit for the first quarter of 2019
was $2.5 million versus $3.3 million for the first quarter of 2018 primarily due to lower revenue in the Services Segment, partially
offset by increased revenue in the Treatment Segment. Gross profit for the first quarter of 2019 included additional closure costs
recorded in the amount of approximately $165,000 as the Company finalizes costs in connection with the closure of its M&EC
facility.
Operating loss for the first quarter of 2019
was $624,000 versus operating income of $317,000 for the first quarter of 2018. Net loss attributable to common stockholders for
the first quarter of 2019 was $672,000 or ($0.06) per share versus net income of $136,000 or $0.01 per share, for the same period
in 2018.
The Company reported Adjusted EBITDA of $67,000
from continuing operations at March 31, 2019, as compared to Adjusted EBITDA of $789,000 from continuing operations during the
corresponding period of 2018. 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 and closure costs accrued
for M&EC subsidiary. 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) income from continuing operations for the three months ended March 31, 2019 and 2018.
| | |
Quarter
Ended | |
| | |
March
31, | |
| (In
thousands) | |
2019 | | |
2018 | |
| (Loss)
income from continuing operations | |
$ | (550 | ) | |
$ | 253 | |
| | |
| | | |
| | |
| Adjustments: | |
| | | |
| | |
| Depreciation
& amortization | |
| 323 | | |
| 372 | |
| Interest
income | |
| (81 | ) | |
| (49 | ) |
| Interest
expense | |
| 87 | | |
| 53 | |
| Interest
expense - financing fees | |
| 10 | | |
| 9 | |
| Income
tax expense | |
| 39 | | |
| 51 | |
| | |
| | | |
| | |
| EBITDA | |
| (172 | ) | |
| 689 | |
| | |
| | | |
| | |
| Research
and development costs related to Medical
Isotope project | |
| 74 | | |
| 100 | |
| Closure
costs accrued for M&EC subsididary | |
| 165 | | |
| — | |
| | |
| | | |
| | |
| Adjusted
EBITDA | |
$ | 67 | | |
$ | 789 | |
The tables below present certain unaudited
financial information for the business segments, which excludes allocation of corporate expenses:
| | |
Quarter Ended | | |
Quarter Ended | |
| | |
March 31, 2019 | | |
March 31, 2018 | |
| | |
(Unaudited) | | |
(Unaudited) | |
| (In
thousands) | |
Treatment | | |
Services | | |
Medical | | |
Treatment | | |
Services | | |
Medical | |
| Revenues | |
$ | 9,905 | | |
$ | 1,803 | | |
$ | — | | |
$ | 8,959 | | |
$ | 3,699 | | |
$ | — | |
| (Negative)
gross profit | |
| 2,957 | | |
| (456 | ) | |
| — | | |
| 2,780 | | |
| 541 | | |
| — | |
| Segment
profit (loss) | |
| 1,836 | | |
| (1,012 | ) | |
| (74 | ) | |
| 1,693 | | |
| (86 | ) | |
| (100 | ) |
Conference Call
Perma-Fix will host a conference call at 11:00
a.m. ET on Thursday, May 9, 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 11:00 p.m. May
16, 2019, and can be accessed by calling: 877-481-4010 (U.S. callers) or +1 919-882-2331 (international callers) and entering conference
ID: 48805.
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: final verification
surveys at M&EC; estimate collective value of contracts to be approximately $17 million through 2019 alone; and implementation
of our strategic plan. 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; that Congress provides continuing funding for the DOD’s
and DOE’s remediation projects; ability to obtain new foreign and domestic remediation contracts; factors arising that causes
us to delay implementation of our strategic plan; and the additional factors referred to under “Risk Factors” and “Special
Note Regarding Forward-Looking Statements” of our 2018 Form 10-K and Form 10-Q for quarter ended March 31, 2019. 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) | |
2019 | | |
2018 | |
| | |
| | |
| |
| Revenues | |
$ | 11,708 | | |
$ | 12,658 | |
| Cost
of goods sold | |
| 9,207 | | |
| 9,337 | |
| Gross
profit | |
| 2,501 | | |
| 3,321 | |
| | |
| | | |
| | |
| Selling,
general and administrative expenses | |
| 2,898 | | |
| 2,780 | |
| Research
and development | |
| 227 | | |
| 232 | |
| Gain
on disposal of property and equipment | |
| — | | |
| (8 | ) |
| (Loss)
income from operations | |
| (624 | ) | |
| 317 | |
| | |
| | | |
| | |
| Other
income (expense): | |
| | | |
| | |
| Interest
income | |
| 81 | | |
| 49 | |
| Interest
expense | |
| (87 | ) | |
| (53 | ) |
| Interest
expense-financing fees | |
| (10 | ) | |
| (9 | ) |
| Other | |
| 129 | | |
| — | |
| (Loss)
income from continuing operations before taxes | |
| (511 | ) | |
| 304 | |
| Income
tax expense | |
| (39 | ) | |
| (51 | ) |
| (Loss)
income from continuing operations, net of taxes | |
| (550 | ) | |
| 253 | |
| | |
| | | |
| | |
| Loss
from discontinued operations (net of taxes of $0) | |
| (152 | ) | |
| (157 | ) |
| Net
(loss) income | |
| (702 | ) | |
| 96 | |
| | |
| | | |
| | |
| Net
loss attributable to non-controlling interest | |
| (30 | ) | |
| (40 | ) |
| | |
| | | |
| | |
| Net
(loss) income attributable to Perma-Fix Environmental Services, Inc. common stockholders |
|
$ |
(672 |
) |
|
$ |
136 |
|
| | |
| | | |
| | |
| Net
(loss) income per common share attributable to Perma-Fix Environmental Services, Inc. stockholders - basic and diluted: |
|
|
|
|
|
|
|
|
| | |
| | | |
| | |
| Continuing
operations | |
$ | (.05 | ) | |
$ | .02 | |
| Discontinued
operations | |
| (.01 | ) | |
| (.01 | ) |
| Net
(loss) income per common share | |
$ | (.06 | ) | |
$ | .01 | |
| | |
| | | |
| | |
| Number
of common shares used in computing net (loss) income per share: | |
| | | |
| | |
| | |
| | | |
| | |
| Basic | |
| 11,961 | | |
| 11,747 | |
| Diluted | |
| 11,961 | | |
| 11,773 | |
PERMA-FIX ENVIRONMENTAL SERVICES, INC.
CONSOLIDATED BALANCE SHEET
| | |
(Unaudited) | | |
(Audited) | |
| (Amounts
in Thousands, Except for Share and Per Share Amounts) | |
March
31, 2019 | | |
December
31, 2018 | |
| | |
| | |
| |
| ASSETS | |
| | | |
| | |
| Current
assets: | |
| | | |
| | |
| Cash
and equivalents | |
$ | 345 | | |
$ | 810 | |
| Account
receivable, net of allowance for doubtful accounts of $136 and $105, respectively |
|
|
7,341 |
|
|
|
7,735 |
|
| Unbilled
receivables | |
| 3,316 | | |
| 3,105 | |
| Other
current assets | |
| 3,127 | | |
| 3,001 | |
| Assets
of discontinued operations included in current assets, net of allowance for doubtful accounts of $0 for each period
presented |
|
|
99 |
|
|
|
107 |
|
| Total
current assets | |
| 14,228 | | |
| 14,758 | |
| | |
| | | |
| | |
| Net
property and equipment | |
| 15,716 | | |
| 15,739 | |
| Property
and equipment of discontinued operations, net of accumulated depreciation of $10 for each period presented |
|
|
81 |
|
|
|
81 |
|
| | |
| | | |
| | |
| Operating
lease right-of-use assets | |
| 2,550 | | |
| — | |
| | |
| | | |
| | |
| Intangibles
and other assets | |
| 27,061 | | |
| 26,746 | |
| Other
assets related to discontinued operations | |
| 98 | | |
| 118 | |
| Total
assets | |
$ | 59,734 | | |
$ | 57,442 | |
| | |
| | | |
| | |
| LIABILITIES
AND STOCKHOLDERS’ EQUITY | |
| | | |
| | |
| Current
liabilities | |
$ | 21,473 | | |
$ | 21,155 | |
| Current
liabilities related to discontinued operations | |
| 322 | | |
| 356 | |
| Total
current liabilities | |
| 21,795 | | |
| 21,511 | |
| | |
| | | |
| | |
| Long-term
liabilities | |
| 11,424 | | |
| 8,835 | |
| Long-term
liabilities related to discontinued operations | |
| 964 | | |
| 963 | |
| Total
liabilities | |
| 34,183 | | |
| 31,309 | |
| 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, 11,969,179 and 11,944,215 shares issued, respectively; 11,961,537 and
11,936,573 shares outstanding, respectively |
|
|
12 |
|
|
|
12 |
|
| Additional
paid-in capital | |
| 107,656 | | |
| 107,548 | |
| Accumulated
deficit | |
| (80,302 | ) | |
| (79,630 | ) |
| Accumulated
other comprehensive loss | |
| (202 | ) | |
| (214 | ) |
| Less
Common Stock held in treasury, at cost: 7,642 shares | |
| (88 | ) | |
| (88 | ) |
| Total
Perma-Fix Environmental Services, Inc. stockholders’ equity | |
| 27,076 | | |
| 27,628 | |
| Non-controlling
interest in subsidiary | |
| (1,525 | ) | |
| (1,495 | ) |
| Total
stockholders’ equity | |
| 25,551 | | |
| 26,133 | |
| | |
| | | |
| | |
| Total
liabilities and stockholders’ equity | |
$ | 59,734 | | |
$ | 57,442 | |