Perma-Fix Environmental Services(PESI) - 2019 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Revenue for Q3 2019 increased by 88% to $22.5 million compared to the prior year [9] - Adjusted EBITDA for Q3 2019 was $2.4 million, up from $510,000 in the same period last year [10][24] - Net income attributable to common stockholders for Q3 2019 was $1.8 million or $0.15 per share, compared to $221,000 or $0.02 per share in the prior year [10][23] Business Line Data and Key Metrics Changes - Services segment revenue increased by 332% to $12.4 million, driven by increased project work [9][18] - Treatment segment revenue increased by 10.7% to $10.1 million, primarily due to higher average pricing [18] Market Data and Key Metrics Changes - The backlog at the end of the quarter was $10.6 million, down from $11.1 million at year-end but up from $9.4 million at September 2018 [27] - The company anticipates a strong financial outlook for the remainder of 2019 and into 2020 due to successful contract wins [10][11] Company Strategy and Development Direction - The company is focused on expanding its market base in the treatment segment through aggressive marketing initiatives [14] - New technologies are being developed to enhance service offerings, including a soil-sorting system and comprehensive equipment dismantlement capabilities [12][13] - The company aims to achieve an annualized revenue of $100 million by the end of 2020 [46] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's growth trajectory and operational efficiencies achieved over the past few years [16][17] - The company is well-positioned for future growth with a strong client reference base and numerous bidding opportunities [11][12] Other Important Information - The company closed its M&EC facility, resulting in $5 million in cash and a reduction in fixed costs [14][30] - Cash on the balance sheet increased to $2.4 million from $810,000 at year-end [25] Q&A Session Summary Question: Future revenue split between treatment and services - Management expects a 50-50 split for the current year, shifting to 40% treatment and 60% services in 2020, with potential for 70% services in subsequent years [38][39] Question: EBITDA to free cash flow conversion - Management indicated that capital spending will increase, impacting free cash flow, but expects strong EBITDA moving forward [41][42] Question: Unbilled receivables and revenue conversion - Most unbilled receivables are expected to convert to revenue within 15 days due to the nature of service contracts [44] Question: Industry trends and company positioning - Management noted that changes in large firms like AECOM and Fluor may not significantly impact the company, as it operates in a niche market [59][61] Question: Cost of rebuilding treatment plants - Estimated cost to rebuild the three plants is around $40 million to $50 million, excluding intangibles [66][67]