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Perma-Fix Environmental Services(PESI) - 2024 Q3 - Earnings Call Transcript
PESIPerma-Fix Environmental Services(PESI)2024-11-14 06:34
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Financial Data and Key Metrics Changes - The company reported revenue of 16.8millionforQ32024,adecreaseof16.8 million for Q3 2024, a decrease of 5.1 million or 23.2% compared to 21.9millioninQ32023[26][28]−Grossprofitforthequarterwas21.9 million in Q3 2023 [26][28] - Gross profit for the quarter was 1.3 million, down from 4.5millioninthesamequarterlastyear[28]−Thenetlossfromcontinuingoperationswas4.5 million in the same quarter last year [28] - The net loss from continuing operations was 8.8 million, compared to a net income of 246,000inthepreviousyear[30]−Totalbasiclosspersharewasapproximately246,000 in the previous year [30] - Total basic loss per share was approximately 0.57, compared to a basic income per share of 0.03lastyear[31]BusinessSegmentDataandKeyMetricsChanges−IntheTreatmentsegment,revenuedecreasedby0.03 last year [31] Business Segment Data and Key Metrics Changes - In the Treatment segment, revenue decreased by 1.7 million due to lower volume and average price, impacted by reduced waste receipts and operational disruptions [27] - The Services segment revenue fell by 3.4million,primarilyduetothecompletionoftwolargeprojectsreplacedbysmallerones[26][28]−GrossprofitintheTreatmentsegmentdroppedby3.4 million, primarily due to the completion of two large projects replaced by smaller ones [26][28] - Gross profit in the Treatment segment dropped by 1.1 million, while the Services segment saw a decrease of 2.1million[28]MarketDataandKeyMetricsChanges−Thecompanyanticipatesreceivingseverallargerwastestreamsfrominternationalsources,includingCanada,Mexico,andGermany,expectedtogeneratenearly2.1 million [28] Market Data and Key Metrics Changes - The company anticipates receiving several larger waste streams from international sources, including Canada, Mexico, and Germany, expected to generate nearly 7 million in revenue [16] - The company is progressing with a €50 million contract in Italy, with remediation activities expected to start in late 2025 or early 2026 [17] Company Strategy and Development Direction - The company is focused on penetrating the PFAS market, with significant investments in PFAS technology deployment totaling 930,000forthequarterand930,000 for the quarter and 1.6 million year-to-date [13] - The company aims to enhance operational capabilities through the acquisition of the Environmental Waste Operations Center, which will allow for higher productivity and larger waste volumes [15] - The company is pursuing new government and commercial opportunities, targeting several new procurements expected to bring in over 100millioninannualrevenuesby2025[23]Management′sCommentsonOperatingEnvironmentandFutureOutlook−Managementnotedthatwhilemarketsoftnesshasbeenexperienced,trendsarebeginningtoimprove,andtheyareoptimisticaboutrevenuegenerationandproductivityimprovements[25]−ThecompanyisconfidentinitsabilitytohandleincreasedcapacityastheHanfordfacilityrampsupoperationsin2025[59]−Managementexpressedoptimismregardingthenewadministration′sfocusoncommercializationofwastetreatment,whichalignswiththecompany′sofferings[68]OtherImportantInformation−Thecompanyhasatreatmentbacklogof100 million in annual revenues by 2025 [23] Management's Comments on Operating Environment and Future Outlook - Management noted that while market softness has been experienced, trends are beginning to improve, and they are optimistic about revenue generation and productivity improvements [25] - The company is confident in its ability to handle increased capacity as the Hanford facility ramps up operations in 2025 [59] - Management expressed optimism regarding the new administration's focus on commercialization of waste treatment, which aligns with the company's offerings [68] Other Important Information - The company has a treatment backlog of 7.8 million as of September 30, 2024, down from 8.7 million at the end of December 2023 [33] - The company is positioned to receive DFLAW affluent based on anticipated volumes, with expansion programs being designed to support full-scale operations [22] Q&A Session Summary Question: Can you discuss the transformative opportunities for 2025 and 2026? - Management projected revenues from PFAS in 2025 to be in the 3 million to $5 million range, assuming operational optimization and additional units [36] Question: How is the company preparing for the near-term challenges in Q4 and 2025? - Management indicated that Q4 is showing improvement in waste receipts and operational stability, with a good backlog at all plants [53] Question: What is the status of the partnerships related to PFAS treatment? - Management is exploring partnerships with firms that have developed concentrators for PFAS, aiming to treat high concentration PFAS waste [75] Question: What are the prospects for the Hanford facility and grouting opportunities? - Management noted that the DFLAW facility is designed to treat about 1 million gallons a year, and there are plans for a grouting program for the West area tank farms [90] Question: What is the reasoning behind the write-off of the deferred tax asset? - Management did not provide a detailed response to this question during the call [93]