Perma-Fix Environmental Services(US:PESI)2022-05-09 02:37Financial Data and Key Metrics Changes - Total revenue from continuing operations for Q1 2022 was $15.9 million, a decrease of $7.2 million or 31.2% compared to $23.1 million in Q1 2021 [21] - Gross profit for the quarter was $1.6 million, down from $2.4 million in 2021, reflecting a reduction of approximately $720,000 due to lower revenue in the Services Segment and higher costs in the Treatment Segment [23] - Net loss attributable to common shareholders for the quarter was $1.3 million, compared to a net loss of $1.1 million in the previous year [24] - Adjusted EBITDA from continuing operations was a loss of $1.4 million, compared to a loss of $522,000 in the prior year [24] Business Line Data and Key Metrics Changes - The Services Segment experienced a significant revenue drop due to delays in new projects, while the Treatment Segment maintained consistent revenue [21][22] - The backlog for services projects was approximately $58 million, indicating potential growth in the upcoming quarters [8] - The Treatment Segment is seeing strong demand for waste treatment capacity, with new shipments expected to provide sustainable revenue [12] Market Data and Key Metrics Changes - The federal government is expected to procure new projects in Q2 and Q3, which could further contribute to revenue growth [8] - The 2022 Federal Spending Bill allocates $900 million for the Department of Energy's Office of Environmental Management, supporting increased waste treatment projects [13] Company Strategy and Development Direction - The company is focusing on expanding its capabilities in waste treatment and bidding on larger service projects within the Department of Energy [10][12] - The Test Bed Initiative (TBI) is a key project, with expectations for significant revenue potential from the treatment of low-activity waste [14][16] - The company is optimistic about capitalizing on pent-up demand for waste treatment services due to delays caused by the pandemic [11][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in a significant improvement in performance for the remainder of 2022, driven by increased bidding activities and federal budget support [20] - The company is seeing a turnaround in Q2 and has better visibility for the balance of the year, aiming to exceed pre-pandemic performance levels [20] Other Important Information - The company has maintained a solid balance sheet and scalable infrastructure, positioning itself well for future growth [20] - The company is actively involved in international projects, including a framework contract in the UK for waste treatment services [83] Q&A Session Summary Question: Confirmation of agreement for grouting low-level waste - Management confirmed that both the State of Washington Department of Energy and regulators are supportive of the grouting initiative for low-level waste [32] Question: Status of the 300,000 to 500,000-gallon test - Management indicated ongoing progress with the tank-side cesium removal system and expressed hope for successful treatment and disposal of waste [38] Question: Backlog details - The $58 million backlog is entirely from services, with treatment backlog at approximately 6.1% [46] Question: Ability to pass on increased costs - Management stated that while some costs have increased, they have been able to pass on costs for certain waste streams without significantly impacting margins [48] Question: Update on the $220 million EPA contract - Management mentioned that they are awaiting task orders and expect to start receiving them by mid-May [39] Question: Revenue expectations for the year - Management aims to reach a quarterly revenue level of $25 million by the end of the year, targeting to exceed pre-COVID revenue levels [66] Question: Safety measures and incidents - Management reassured that safety remains a top priority, with a strong safety record and ongoing improvements in safety culture [86]