Perma-Fix Environmental Services(US:PESI)2024-05-11 22:15Financial Data and Key Metrics Changes - Total revenue from continuing operations for Q1 2024 was $13.6 million, a decrease of $6.5 million or 32% compared to $20.1 million in Q1 2023 [45] - Gross profit for the quarter was a negative $620,000, down from a gross profit of $3 million in Q1 2023 [45] - Net loss for the quarter was $3.6 million compared to a net loss of $411,000 in the prior year, with a loss per share of $0.26 compared to $0.03 [45] - EBITDA from continuing operations was negative $4 million compared to EBITDA of $171,000 in the previous year [45] Business Line Data and Key Metrics Changes - In the Services segment, revenue decreased by $5.6 million primarily due to the completion of two large projects at the end of 2023, which were not replaced in time [45] - The Treatment segment saw a revenue decrease of $885,000 due to lower volumes of waste treated and lower average prices related to the waste mix [45] - The backlog for waste treatment has been growing, resulting in increasing revenues through the second quarter of 2024, with an estimated backlog generating approximately $10 million in incremental annual revenue beginning in Q4 [40][45] Market Data and Key Metrics Changes - The company anticipates starting to see a reasonable increase in German waste treatment revenues of about $5 million to $6 million a year in late 2024, potentially doubling with a new plant in the UK [6] - The market for PFAS treatment is estimated to exceed $100 billion over the next 10 years, with significant interest from potential customers and regulatory agencies [54] Company Strategy and Development Direction - The company is focused on expanding its waste treatment offerings within commercial and international markets, including Europe, Mexico, and Canada, with a significant contract awarded in Italy [42] - The company plans to increase its grouting capacity from 300,000 gallons per year to around 3 million gallons per year as the Hanford cleanup program progresses [53] - Investments are being made in new technology to treat PFAS contamination, with pilot plant testing exceeding regulatory requirements [50][54] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in regaining momentum with improving Q2 performance and a strong second half of 2024, despite challenges faced in Q1 [49] - The company is optimistic about the outlook for the business, with expectations for significant growth beginning in late 2024 and into 2025 [44][49] - Management highlighted the importance of the recent EPA announcements in setting the foundation for the market and the urgency for treatment solutions [10] Other Important Information - The company has filed several patents related to its PFAS treatment technology, with pending reviews expected to take one to two years [25] - The DFLAW affluent will be processed by Perma-Fix Northwest, with operations expected to start by 2025 and continue until 2060 [41][53] Q&A Session Summary Question: Is the Hanford settlement a legally binding agreement? - Yes, it is a legally binding document that has taken nearly five years to finalize, with commitments written in stone [47] Question: What is the expected timeline for the DFLAW operations? - The DFLAW hot commissioning program is expected to be completed no later than August 2025 [52] Question: What is the competition in the PFAS treatment market? - The company has not seen any competitors with a process that economically destroys PFAS as effectively as theirs, which relies on lower temperature processing and simplicity [9][10]