Perma-Fix Environmental Services(US:PESI)2021-05-09 03:43Financial Data and Key Metrics Changes - Total revenue from continuing operations for Q1 2021 was $23.1 million, a decrease of $1.7 million or 6.9% compared to Q1 2020's $24.9 million [23] - The decrease in revenue was primarily due to a $2.1 million drop in the Treatment Segment, offset slightly by a $341,000 increase in the Services Segment [23][24] - Gross profit for the quarter was $2.4 million, down from $4.6 million in 2020, reflecting a significant drop in gross margin from 18.7% to 10.2% [25][27] Business Line Data and Key Metrics Changes - The Treatment Segment experienced a revenue decline of $2.1 million due to shipment delays attributed to the COVID-19 pandemic [23][24] - The Services Segment saw modest growth, with revenue increasing by $341,000, driven by ongoing projects in California, Washington State, and Canada [23][24] - The backlog at the end of March was $6.2 million, down from $7.6 million at year-end and $8.9 million in March 2020 [29] Market Data and Key Metrics Changes - The bidding pipeline is described as more robust than ever, with an unprecedented number of outstanding bids collectively valued in the hundreds of millions of dollars [10] - The company forecasts about $100 million in new procurements and task order values over the next six months based on existing contracts [11] - The company is optimistic about the return to normalization in the Services Segment, despite ongoing delays in bid evaluations and awards [9] Company Strategy and Development Direction - The company remains focused on waste management and radiological remediation, leveraging its technical and management talent to pursue opportunities [9][10] - The company is optimistic about the TBI program, which is seen as a potential solution for treating low-level waste from the Hanford reservation [14][17] - The company has invested heavily in its capabilities and facilities, maintaining four treatment facilities, including the newly established Environmental Waste Operations Center [19][20] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the long-term prospects of the company, despite the ongoing impacts of COVID-19 [7][18] - The company anticipates a return to strong organic growth by Q3 2021, as it begins to see improvements in its pipeline [18] - Management highlighted the importance of government funding and support for the TBI program, which remains funded in the FY 2020 federal budget [15][17] Other Important Information - The company welcomed Kerry Duggan to its Board of Directors, who brings significant experience in environmental policy [21][22] - The company is actively pursuing forgiveness for its PPP loan, with the application submitted in October and awaiting response [67] Q&A Session Summary Question: How is the company handling COVID-19? - Management confirmed that there are currently no COVID-19 cases within the company and that many employees are vaccinated [33] Question: Is the TBI program a potential solution for the leaking tanks at Hanford? - Management indicated that while the TBI program represents a safe option for waste treatment, they have not yet discussed specific plans with the DOE [34][35] Question: What is the current status of the company's backlog? - The Services backlog is approximately $15 million, while the Treatment backlog is closer to $7 million [45][46] Question: Are there any constraints to growth as business expands post-COVID? - Management noted that delays in bid awards have been a surprise, but they expect task orders to start coming in soon [50][51] Question: What is the outlook for international business? - Management expressed excitement about international opportunities, particularly shipments from Europe, Mexico, and Canada [56] Question: What is the intrinsic value of the company's treatment facilities? - Management stated that it would be nearly impossible to replicate their facilities, estimating a replacement cost of over $50 million for each plant [60][62] Question: What is the status of the PPP loan forgiveness? - The company is optimistic about receiving forgiveness for the PPP loan within the next 3 to 6 months [67]