Perma-Fix Environmental Services(US:PESI)2023-11-04 18:48Financial Data and Key Metrics Changes - Total revenue from continuing operations for Q3 2023 was $21.9 million, an increase of $3.4 million or 18.4% compared to $18.5 million in Q3 2022 [19][24] - Gross profit increased by 48.2%, with gross margin rising from 16.6% to 20.8% [24] - Net income for the quarter was $341,000, down from $664,000 in the previous year, which included employee retention credits [51] - Adjusted EBITDA from continuing operations was $1.2 million compared to a loss of $374,000 in the previous year [53] Business Segment Data and Key Metrics Changes - Treatment segment revenue improved by $1.9 million, while services segment revenue increased by $1.5 million due to improved productivity and new project starts [19][46] - Year-to-date revenue through September 30 was up $13.2 million or 24.5%, with treatment segment revenue increasing by $8.5 million and services segment revenue up $4.7 million [47] Market Data and Key Metrics Changes - Waste backlog and unearned revenue as of September 30 was $12.1 million, significantly improved from $9.2 million at year-end and $7.1 million in September 2022 [34] - The company anticipates sustained receipts from European expansion, estimating combined annual revenues in the $10 million to $20 million range starting in late 2024 [11] Company Strategy and Development Direction - The company continues to implement its growth strategy, focusing on new opportunities that could significantly enhance revenues and long-term backlog [8] - The startup of the DFLAW facility is critical, expected to provide vitrification services for about 40% of the tank waste volume on site [31] - The company is optimistic about the near-term market outlook based on a growing backlog and several important contracts expected to be awarded over the next few quarters [33] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for continued growth in both segments, despite temporary customer delays impacting Q3 results [18][26] - The company is focused on increasing productivity and reducing costs to maximize margins [18] - Management remains confident in maintaining a sustainable revenue foundation in the $90 million to $100 million range annually [66] Other Important Information - The company has several large potential strategic awards from the DOE, which could represent significant increases in sustainable revenue [9] - The TBI initiative is progressing, with expectations for waste extraction and treatment to begin in the second half of 2024 [15] Q&A Session Summary Question: What does the contract in Croatia and Italy mean for Perma-Fix? - Management indicated that these contracts could significantly increase revenue and position the company for larger contracts in the future [40] Question: What is the status of the DFLAW facility? - Management confirmed that the DFLAW facility is on track for a late 2024 startup, with no announced delays [43][72] Question: What is the expected revenue from transuranic waste? - Management estimated that the transuranic waste program could represent a sustainable backlog, with potential revenues in the $50 million to $200 million range [76] Question: What is the services backlog as of September? - The services backlog was reported to be in the $22 million range [105] Question: How does the company plan to achieve its revenue targets? - Management expressed confidence in upcoming projects and bids, indicating a strong pipeline for future revenue growth [111]