Perma-Fix Reports 28.7% Revenue Growth and Positive Net Income for the Second Quarter of 2020
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Perma-Fix Reports 28.7% Revenue Growth and Positive Net Income for the Second Quarter of 2020

Friday, August 7, 2020 7:30 AM
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Perma-Fix Environmental Services, Inc.

Services Segment Revenue Doubles to $14.2 Million

ATLANTA, GA / ACCESSWIRE / August 7, 2020 / Perma-Fix Environmental Services, Inc. (NASDAQ:PESI) (the "Company") today announced financial results and provided a business update for the second quarter ended June 30, 2020.

Second quarter 2020 financial highlights:

  • Revenue for the second quarter of 2020 increased by 28.7% to $22.0 million versus $17.1 million for the same period last year
  • Services Segment revenue for the second quarter of 2020 increased by 101.8% to $14.2 million versus $7.0 million for the same period last year
  • Treatment Segment revenue for the second quarter of 2020 was $7.8 million versus $10.1 million for the same period last year
  • Gross profit for the second quarter of 2020 was $3.3 million versus $3.3 million for the second quarter of 2019
  • Generated net income attributable to common stockholders of $204,000, or $0.02 per share (both basic and diluted) for the second quarter of 2020, compared to $289,000, or $0.02 per share (both basic and diluted) for the same period last year
  • Achieved Adjusted EBITDA (defined below) of $847,000 compared to $1.0 million for the same period last year (see reconciliation to GAAP below)

Mark Duff, President and CEO of the Company, commented, "I am pleased to report that we doubled our Services Segment revenue versus the same period last year, despite the temporary shutdown of certain projects related to the COVID-19 pandemic. Nevertheless, most, but not all, of the projects within our Services Segment are back to normal operation and our sales pipeline is quite robust. As previously announced on July 20, our team, led by Jacobs, was one of just nine teams selected by the U.S. Department of Energy (DOE) Office of Environmental Management (EM) that are now eligible to compete for up to $3 billion in task orders, under a 10-year, multiple-award Indefinite Delivery/Indefinite Quantity (IDIQ) contract to provide nationwide Deactivation, Decommissioning and Removal (DD&R) of facilities, waste management and program support. Within our Treatment Segment, we experienced delays in waste shipments as certain customers were restricted or in full shelter in place mode for much of the quarter, due to the pandemic. Most of these customers have reopened, and as a result, we have seen a modest increase in receipts through July, with the potential, subject to the impact due to COVID-19, for further improvement during the third quarter."

COVID-19
The Company continues to make adjustments and implement precautions necessary to limit the impact of the COVID-19 pandemic on its ongoing operations. Most projects within the Services Segment that were previously shutdown have recommenced in the latter part of the second quarter of 2020. The Company's Treatment Segment continues to see delays in waste shipments from certain customers due to the planning time that is required to restart waste shipments as they return to work on-site. As the situations surrounding COVID-19 remain fluid, the full impact and extent of the pandemic on the Company's financial results cannot be estimated with any degree of certainty.

Financial Results
Revenue for the second quarter of 2020 was approximately $22.0 million versus approximately $17.1 million for the same period last year. The increase was entirely within the Services Segment where revenue increased to $14.2 million for the three months ended June 30, 2020 from $7.0 million for the corresponding period of 2019 resulting from increased projects. The Services Segment experienced this increase in revenue despite shutdowns in certain projects that occurred in the latter part of the first quarter of 2020 due to the impact of COVID-19. Most of these projects did not recommence until the latter part of the second quarter of 2020. Revenue for the Treatment Segment was $7.8 million for the second quarter of 2020, as compared to $10.1 million for the same period in 2019. The decrease was primarily due to lower waste volume due to delays in waste shipments from certain customers resulting from the impact of COVID-19.

Gross profit for the second quarter of 2020 was $3.3 million versus $3.3 million for the second quarter of 2019. Gross profit for the second quarter of 2019 included additional closure costs recorded in the amount of approximately $165,000 as the Company finalized costs in connection with the closure of its East Tennessee Materials and Energy Corporation (M&EC) facility.

Operating income for the second quarter of 2020 was $405,000 versus operating income of $344,000 for the second quarter of 2019. Operating income for the second quarter of 2019 included the closure costs of $165,000 as discussed above. Net income attributable to common stockholders for the second quarter of 2020 (both basic and diluted) was $204,000 or $0.02 per share versus $289,000 or $0.02 per share (both basic and diluted) for the second quarter of 2019.

The Company reported Adjusted EBITDA of $847,000 from continuing operations for the quarter ended June 30, 2020, as compared to Adjusted EBITDA of $1.0 million from continuing operations for the same period of 2019. The Company defines EBITDA as earnings before interest, taxes, depreciation and amortization. Adjusted EBITDA is defined as EBITDA before research and development costs related to the Medical Isotope project and closure costs accrued for M&EC subsidiary. Both EBITDA and Adjusted EBITDA are not measures of performance calculated in accordance with Generally Accepted Accounting Principles in the United States of America (GAAP), and should not be considered in isolation of, or as a substitute for, earnings as an indicator of operating performance or cash flows from operating activities as a measure of liquidity. The Company believes the presentation of EBITDA and Adjusted EBITDA is relevant and useful by enhancing the readers' ability to understand the Company's operating performance. The Company's management utilizes EBITDA and Adjusted EBITDA as a means to measure performance. The Company's measurements of EBITDA and Adjusted EBITDA may not be comparable to similar titled measures reported by other companies. The table below reconciles EBITDA and Adjusted EBITDA, both non-GAAP measures, to GAAP numbers for income (loss) from continuing operations for the three and six months ended June 30, 2020 and 2019.

 
  (Unaudited)     (Unaudited)  
 
  Three Months Ended     Six Months Ended  
 
  June 30,     June 30,  
(In thousands)
  2020     2019     2020     2019  
Income (loss) from continuing operations
  $ 260     $ 373     $ 1,568     $ (177 )
 
                               
 
                               
Adjustments:
                               
Depreciation & amortization
    364       317       711       641  
Interest income
    (28 )     (107 )     (84 )     (188 )
Interest expense
    99       107       219       194  
Interest expense - financing fees
    60       60       129       70  
Income tax (benefit) expense
    (9 )     6       5       45  
Loss on extinguishment of debt
    27       -       27       -  
 
                               
EBITDA
    773       756       2,575       585  
 
                               
Research and development costs related to
                               
Medical Isotope project
    74       80       140       154  
Closure costs accrued for M&EC subsidiary
    -       165       -       330  
 
                               
Adjusted EBITDA
  $ 847     $ 1,001     $ 2,715     $ 1,069  
 
                               

The tables below present certain unaudited financial information for the business segments, excluding allocation of corporate expenses:

 
  Three Months Ended     Six Months Ended  
 
  June 30, 2020     June 30, 2020  
 
        (Unaudited)           (Unaudited)  
(In thousands)
  Treatment     Services     Medical     Treatment     Services     Medical  
Net revenues
  7,840     14,207     -     17,403     29,504     -  
Gross profit
    1,695       1,615       -       4,440       3,510       -  
Segment profit (loss)
    759       1,031       (74 )     2,292       2,349       (140 )
 
                                               
 
  Three Months Ended     Six Months Ended  
 
  June 30, 2019     June 30, 2019  
 
        (Unaudited)           (Unaudited)  
(In thousands)
  Treatment     Services     Medical     Treatment     Services     Medical  
Net revenues
  10,094     7,041     -     19,999     8,844     -  
Gross profit
    2,627       644       -       5,584       188       -  
Segment profit (loss)
    1,605       137       (80 )     3,442       (875 )     (154 )
 
                                               

Conference Call
Perma-Fix will host a conference call at 11:00 a.m. ET on Friday, August 7, 2020. The call will be available on the Company's website at www.perma-fix.com, or by calling 877-407-0778 for U.S. callers, or +1 201-689-8565 for international callers. The conference call will be led by Mark J. Duff, Chief Executive Officer, Dr. Louis F. Centofanti, Executive Vice President of Strategic Initiatives, and Ben Naccarato, Executive Vice President and Chief Financial Officer of Perma-Fix Environmental Services, Inc.

A webcast will also be archived on the Company's website and a telephone replay of the call will be available approximately one hour following the call, through 11:00 a.m. Eastern Time on August 14, 2020, and can be accessed by calling: 877-481-4010 for U.S. callers, or +1 919-882-2331 for international callers and entering conference ID: 36496.

About Perma-Fix Environmental Services
Perma-Fix Environmental Services, Inc. is a nuclear and waste management services company, and leading provider of nuclear and mixed waste management services. Its nuclear waste services include managing and treating radioactive and mixed waste for hospitals, research labs and institutions, federal agencies, including the DOE and Defense ("DOD"), and the commercial sector. The nuclear services group delivers project management and waste management, environmental restoration, decontamination and decommissioning, new build construction, and radiological protection, safety and industrial hygiene capability to clients. Perma-Fix operates four nuclear waste treatment facilities and provides nuclear services at DOE, DOD, and commercial facilities, nationwide.

Please visit us at http://www.perma-fix.com.

This press release contains "forward‑looking statements" which are based largely on the Company's expectations and are subject to various business risks and uncertainties, certain of which are beyond the Company's control. Forward-looking statements generally are identifiable by use of the words such as "believe", "expects", "intends", "anticipate", "plans to", "estimates", "projects", and similar expressions. Forward‑looking statements include, but are not limited to: further improvement in waste shipment receipts and potential improvement during third quarter. These forward‑looking statements are intended to qualify for the safe harbors from liability established by the Private Securities Litigation Reform Act of 1995. While the Company believes the expectations reflected in this news release are reasonable, it can give no assurance such expectations will prove to be correct. There are a variety of factors which could cause future outcomes to differ materially from those described in this release, including, without limitation, future economic conditions; industry conditions; competitive pressures; our ability to apply and market our new technologies; the government or such other party to a contract granted to us fails to abide by or comply with the contract or to deliver waste as anticipated under the contract; inability to win bid projects; failure of Congress to provides continuing funding for the DOD's and DOE's remediation projects; ability to obtain new foreign and domestic remediation contracts; inability to meet financial covenants; impact of COVID-19; and the "Risk Factors" discussed in, and the additional factors referred to under "Special Note Regarding Forward-Looking Statements" of, our 2019 Form 10-K and Form 10-Q for quarters ended March 31, 2020 and June 30, 2020. The Company makes no commitment to disclose any revisions to forward‑looking statements, or any facts, events or circumstances after the date hereof that bear upon forward‑looking statements.

FINANCIAL TABLES FOLLOW

Contacts:
David K. Waldman-US Investor Relations
Crescendo Communications, LLC
(212) 671-1021

Herbert Strauss-European Investor Relations
[email protected]
+43 316 296 316

PERMA-FIX ENVIRONMENTAL SERVICES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)

 
  Three Months Ended     Six Months Ended  
 
  June 30,     June 30,  
(Amounts in Thousands, Except for Per Share Amounts)
  2020     2019     2020     2019  
 
                       
Net revenues
  $ 22,047     $ 17,135     $ 46,907     $ 28,843  
Cost of goods sold
    18,737       13,864       38,957       23,071  
Gross profit
    3,310       3,271       7,950       5,772  
 
                               
Selling, general and administrative expenses
    2,700       2,705       5,627       5,603  
Research and development
    209       223       441       450  
(Gain) loss on disposal of property and equipment
    (4 )     (1 )     27       (1 )
Income (loss) from operations
    405       344       1,855       (280 )
 
                               
Other income (expense):
                               
Interest income
    28       107       84       188  
Interest expense
    (99 )     (107 )     (219 )     (194 )
Interest expense-financing fees
    (60 )     (60 )     (129 )     (70 )
Other
    4       95       9       224  
Loss on extinguishment of debt
    (27 )     -       (27 )     -  
Income (loss) from continuing operations before taxes
    251       379       1,573       (132 )
Income tax (benefit) expense
    (9 )     6       5       45  
Income (loss) from continuing operations, net of taxes
    260       373       1,568       (177 )
 
                               
Loss from discontinued operations (net of taxes of $0)
    (85 )     (115 )     (199 )     (267 )
Net income (loss)
    175       258       1,369       (444 )
 
                               
Net loss attributable to non-controlling interest
    (29 )     (31 )     (55 )     (61 )
 
                               
Net income (loss) attributable to Perma-Fix Environmental
                               
Services, Inc. common stockholders
  $ 204     $ 289     $ 1,424     $ (383 )
 
                               
Net income (loss) per common share attributable to Perma-Fix
                               
Environmental Services, Inc. stockholders - basic and diluted:
                               
Continuing operations
  $ .02     $ .03     $ .13     $ (.01 )
Discontinued operations
    -       (.01 )     (.01 )     (.02 )
Net income (loss) per common share
  $ .02     $ .02     $ .12     $ (.03 )
 
                               
Number of common shares used in computing
                               
net income (loss) per share:
                               
Basic
    12,135       12,054       12,129       12,008  
Diluted
    12,286       12,122       12,320       12,008  

 

 

PERMA-FIX ENVIRONMENTAL SERVICES, INC.
CONSOLIDATED BALANCE SHEETS

 
  June 30,     December 31,  
 
  2020     2019  
(Amounts in Thousands, Except for Share and Per Share Amounts)
  (Unaudited)     (Audited)  
 
           
ASSETS
           
Current assets:
           
Cash
  $ 5,630     $ 390  
Account receivable, net of allowance for doubtful
               
accounts of $426 and $487, respectively
    10,806       13,178  
Unbilled receivables
    11,069       7,984  
Other current assets
    3,309       3,470  
Assets of discontinued operations included in current assets
    124       104  
Total current assets
    30,938       25,126  
 
               
Net property and equipment
    17,442       16,576  
Property and equipment of discontinued operations
    81       81  
 
               
Operating lease right-of-use assets
    2,419       2,545  
 
               
Intangibles and other assets
    21,992       22,151  
Other assets related to discontinued operations
    -       36  
Total assets
  $ 72,872     $ 66,515  
 
               
LIABILITIES AND STOCKHOLDERS' EQUITY
               
Current liabilities
  $ 24,696     $ 24,106  
Current liabilities related to discontinued operations
    928       994  
Total current liabilities
    25,624       25,100  
 
               
Long-term liabilities
    16,244       11,935  
Long-term liabilities related to discontinued operations
    248       244  
Total liabilities
    42,116       37,279  
Commitments and Contingencies
               
Stockholders' equity:
               
Preferred Stock, $.001 par value; 2,000,000 shares authorized,
               
no shares issued and outstanding
    -       -  
Common Stock, $.001 par value; 30,000,000 shares authorized,
               
12,142,771 and 12,123,520 shares issued, respectively;
               
12,135,129 and 12,115,878 shares outstanding, respectively
    12       12  
Additional paid-in capital
    108,659       108,457  
Accumulated deficit
    (75,891 )     (77,315 )
Accumulated other comprehensive loss
    (262 )     (211 )
Less Common Stock held in treasury, at cost: 7,642 shares
    (88 )     (88 )
Total Perma-Fix Environmental Services, Inc. stockholders' equity
    32,430       30,855  
Non-controlling interest in subsidiary
    (1,674 )     (1,619 )
Total stockholders' equity
    30,756       29,236  
 
               
Total liabilities and stockholders' equity
  $ 72,872     $ 66,515  
 
               

SOURCE: Perma-Fix Environmental Services, Inc.

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