Perma-Fix Environmental Services(PESI) - 2024 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Total revenue for Q4 2024 was $14.7 million, a decrease of $8 million or 35.2% compared to Q4 2023's $22.7 million [25] - For the full year 2024, revenue was $59.1 million, down $30.6 million or 34.1% from $89.7 million in 2023 [27] - Net loss for Q4 2024 was $3.5 million compared to a net income of $81,000 in Q4 2023, and for the full year, the net loss was $20 million compared to a net income of $485,000 in 2023 [31][32] - EBITDA for Q4 2024 was a loss of $3 million compared to income of $434,000 in Q4 2023, and for the year, EBITDA loss was $13.8 million compared to income of $3.3 million in 2023 [32] Business Segment Data and Key Metrics Changes - Treatment segment revenue decreased by $1.4 million in Q4 and $8.5 million for the year, impacted by lower volumes and pricing [26][27] - Services segment revenue dropped by $6.6 million in Q4 and $22.1 million for the year, primarily due to a lack of large projects [26][27] - Gross profit for Q4 was $594,000, down from $4.3 million in Q4 2023, with both segments experiencing declines due to lower revenue and higher costs [28] Market Data and Key Metrics Changes - Treatment backlog as of December 2024 was $7.9 million, down from $10.7 million at the end of 2023 [35] - Cash on the balance sheet increased to $29 million from $7.5 million at year-end 2023, primarily due to equity raises [33] Company Strategy and Development Direction - The company aims to return to growth and profitability in 2025, driven by a solid backlog and improving project execution [22] - Expansion in the industrial waste market and pursuit of government contracts are key strategic focuses [13][14] - The company is diversifying revenue by expanding into international markets and developing PFAS destruction technology [18][20] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges in 2024 due to project delays and federal budget issues but remains optimistic about long-term growth [8][9] - The DF Law program at Hanford is expected to begin operations in August 2025, which is seen as a significant growth driver [11][12] - Management expressed confidence in the company's positioning for upcoming projects despite ongoing federal budget uncertainties [16][17] Other Important Information - The company appointed Troy Echeman as Chief Operating Officer, effective January 23, 2025, to enhance operational efficiency [22] - The second-generation PermaFAST unit is expected to triple processing capacity and is scheduled for deployment in late Q3 2025 [20] Q&A Session Summary Question: Impact of federal budget delays - Management indicated that a government shutdown would have limited impact if it lasts less than two weeks due to a strong backlog [42][44] - They expect limited impact from continuing resolutions, with most projects still moving forward [45][46] Question: Update on DF Law program - The DF Law facility is undergoing an operational readiness review, and initial waste treatment operations are expected to start in mid-Q3 [55][56] Question: Costs associated with PFAS initiatives - The company spent approximately $3 million on PFAS initiatives in 2024, with projections of around $5 million for 2025 [67] Question: Core business profitability - Management acknowledged the need to return to a breakeven base business of $80 million annually and is focused on cost reduction and revenue growth [101][102]