Q4 2021 Perma-Fix Environmental Services Inc Earnings Call
Yeah.
Good morning, ladies and gentlemen, and welcome to the Perma fix environmental services year end conference call. At this time, all participants have been placed on a listen only mode and we will open the floor for your questions and comments. After the presentation. It is now my pleasure to turn the floor over to your host Dave.
David Waldman Investor Relations, Sir the floor is yours.
Thank you and good morning, everyone and welcome to Perma fix environmental Services' fourth quarter and year end 2021 conference call on the call with US. This morning are Mark Duff, President and CEO , Dr. Lou Centofanti Executive Vice President of strategic initiatives, and Ben Naccarato, Chief Financial Officer. The company issued a press release this morning containing fourth quarter and 2020.
One financial results, which is also posted on the Companys website. If you have any questions. After the call would like any additional information about the company. Please contact Crescendo communications at 2126711020, I'd also like to remind everyone that certain statements contained within this conference call maybe deemed forward looking statements within the meaning of the private Securities Litigation Reform Act.
1095 and include certain non-GAAP financial measures all statements on this conference call other than a statement of historical fact are forward looking statements that are subject to known and unknown risks uncertainties and other factors, which could cause actual results and performance of the company to differ materially from such statements. These risks and uncertainties are detailed in the company's filings with the Securities and Exchange Commission.
As well as in this morning's press release 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. In addition, today's discussion will include references to non-GAAP measures Perma fix believes that such information provides an additional measurement and consistent historical comparison of its performance.
A reconciliation of the non-GAAP measures to the most directly comparable GAAP measures is available in today's news release and on our website I'd now like to turn the call over to Mark Duff. Please go ahead Marc.
All right, Thanks, David and good morning.
We were disappointed with our financial performance in 2021 with revenues down about 30% over 2020. However, we were able to secure a positive earnings per share of seven <unk>.
Despite these results 2021 was a very productive year operationally.
We believe we build a solid foundation for growth in 2022, and we're confident the momentum we developed prior to Covid.
Which resulted in strong growth in revenues in 2019 in 'twenty will be achieved again through the coming year. The weakness in revenue growth. We experienced in 2021 continued into January of this year as a result of the latest COVID-19 variance. However, despite these challenges the treatment segment revenues increased 9% for the year and approximately 50%.
7% for the fourth quarter of 2021 compared to the same period last year.
Based on the uptick in revenue, which is continued training up in 2022, we remain highly encouraged by the outlook of our treatment segment, which has seen increased wafer opportunities and evidence of pent up demand through March.
One.
Within the services segment revenue was $39 million in 2021, reflecting the significant impact of COVID-19, which resulted in delayed procurement actions and contract awards.
Unless we were added we were awarded several strategic and high profile projects that are currently.
<unk> performing very well overall as a result of our project backlog increased to approximately $66 million, which bodes well for performance in 2022.
Some of the new projects were delayed in Q4, they've been they've all been mobilized now to full operation towards the end of this quarter.
We've also been selected on several new IQ or multi award task order contracts that include large funding ceilings and open new markets for us with the approved federal budgets.
These contracts provide us the ability to bid on task orders among a select group of companies with limited competition in the scope of work that provides us a good sense of it.
Potential opportunities coming up.
We anticipate the government will begin awarding.
It related tasks.
Within these IV got queues in Q2 and Q3.
We've also been actively bidding on a number of new MMO type nuclear services projects within D O S.
As part of a larger teams that will likely be announced later this year. Some of these projects are quite considerable size in a selected by deal we will represent a substantial increase.
And sustainable revenue.
To rely on with our core competence for for many years.
Although the federal government has been much slower than the commercial sector to resume normal operations. That's important to note that these delays in new project starts have resulted.
Substantial backlog of both services and waste treatment projects to be procured in 'twenty two.
In addition, the recently approved 2022 federal budget spending bill allocates $900 million in it.
Incremental funding increase over last year within the department of Energy's office of Environmental management. We believe this additional funding will support increased waste treatment and other projects through 2022.
Just on passengers experience, we often see a significant portion of this incremental funding going towards waste treatment.
The government doesn't like to do big hiring campaigns with these surges and budgets.
In addition to the 2022 budget, we anticipate meaningful carryover from 2021 that was not utilized due to the pandemic.
Impact to the different sites.
As a result of these factors its clear to us that there is a solid federal budget a significant backlog of demand that we expect to capitalize on going forward and as a result of the good reason to believe that 2022 we'll see a significant improvement over 'twenty, one and as I mentioned earlier, we're already starting to see signs of this improvement.
In addition to our base business, we're very excited about opportunities related to the test bed initiative also known as the low level waste off site disposal project in support of the deal we Hanford tank disposition mission.
The second phase.
The demonstration will include extraction shipment and transportation of 2000 gallons of tank waste to our perfect northwest facility in Richland, Washington.
Officials I have stated.
I have stated this shipment of this waste to our facilities should occur.
By late summer 2022.
In public comments, the <unk> manager for the Hanford site recently stated and I quote I.
I would certainly like to execute the test bed initiative as early as we reasonably can unquote you went on to state that funds are now available for both installation and removal of the needed equipment.
And similar comments to nuclear waste management for the Washington State Department of ecology, that's the regulator up their stated again I quote we have tbi is a priority once the application is sent our way if we have to pull resources from the other program, we will in order to process that application and quote.
As you can see Tbi has certainly become a priority at both the federal and state levels.
Washington In addition, we recently.
In addition, the recently enacted federal spending bill.
Includes an additional $7 million specifically allocated for the test bed initiative in 2022, this underscores the visibility and support for our solutions.
And technology, both by the <unk>.
And by Congress.
We remain confident that the demonstration will underscore the effectiveness of grouting as a supplement.
Two.
Do you always current vitrification strategy, which is based on the new DF la facility at Hanford.
While our technology also provides substantial cost savings immediate capacity and a dramatic reduction in carbon emissions, which is the core are at the core of our current mission.
Also important to note that in 2021, despite the challenges we took a number of steps from a pair for the future by enhancing our capabilities and our personnel, especially proud of the fact.
But we were able to maintain our workforce despite industry wide labor shortages as a result, we have the ability to ramp up quickly to support large procurements.
And that we're bidding right now as well as supporting projects that are ongoing in the field.
We also completed a number of facility upgrades and technology departments to support our expanded revenue streams within our treatment segment. This technology deployment includes the addition of our new vacuum thermal desorption system, which is currently on.
Ongoing a hot start up phase.
And we'll begin to treat waste in April early April unlikely next week or so.
With a solid backlog of waste and inventory and a strong market potential both dealt with the federal government as well as the oil and gas industry.
So to wrap up we build a solid foundation and we're finally, starting to see a return to normalization. Following the pandemic. The federal government has begun announcing new projects that we've been a little.
Been on hold for quite a while and we expect to benefit from the approve budgets and carryover spending from last year given the steps. We took in 2021 with a great position to take advantage of the pent up demand.
And we continue to invest in our capabilities and facilities and have built a highly scalable infrastructure internally and we've maintained a solid balance sheet.
With a cash balance right now more than $4 million.
Or as of December 31, 2021.
And even though the 2021 was a challenging year, we are seeing improvement in our project backlog with increasingly used treatments through March and have much better visibility on the second and third quarters. As a result, we look forward to resuming the momentum we had before the pandemic and are very encouraged by the outlook for 2022 on that I'll turn the call over to Ben.
Who will discuss the financial results in more detail Ben.
Okay. Thank you Mark.
I'll start with revenue our total revenue from continuing operations in the fourth quarter was $17 1 million compared with last year's fourth quarter of $28 3 million decrease of $11 2 million or 39, 6%.
The decrease was entirely due to the drop in revenues in the service segment of $14 4 million.
<unk> from delays in the startup of three large projects for reasons related to COVID-19 government funding delays and customer scheduling decisions.
Offsetting this drop was an increase in our revenue in our treatment segment of $3 2 million as we did see increases over prior year, while we continued to feel the effects of delays in shipments compared to the pre pandemic levels.
For the year ended 2021 revenue was $72 2 million compared to $105 4 million in 2020 as with the fourth quarter. The service segment was the main driver for this decrease is revenue dropped by $36 1 million or 47, 9% This segment encountered delays.
And project awards in the early part of the year as well as the completion of a large contract in the latter part of the year as with the quarter delays in starting to three new projects awarded contributed to the drop in the revenue.
Again as with the quarter. The treatment segment revenue was up due to the modest increase in waste receipts.
The delays in getting back to work by our government employees kept the waste receipts below pre pandemic levels, we're used to.
Turning to our gross profit gross profit for the quarter was $1 3 million compared to $3 2 million in 2020.
The drop in gross profit of $1 9 million came from the services segment due to the low revenues as discussed the drop in gross profit did have a partial offset with an increase in gross profit from the treatment segment of $1 9 million.
Again related to improved revenue.
From the year end for the year end 2021, gross profit was $6 8 million compared to $15 9 million in 2020.
This drop was attributable to both segments with lower revenue accounting for most of the variance and lower margin work in the services segment, while the profitability in the treatment segment did improve over prior year.
Our SG&A costs for the quarter were $3 3 million compared to $2 8 million in the fourth quarter of last year.
While SG&A in the full year was $12 8 million compared to $11 8 million in 2020.
In the quarter, the increase resulting from higher marketing expenses related to trade shows general travel and consulting and legal fees related to the sale of our medical subsidiary.
For the year, there were higher bid and proposal expenses related to new projects as well as increases in general employee expenses legal fees and other general and administrative expenses.
Our net loss attributable to common shareholders for the quarter was $2 5 million compared to last year's net loss of 10000 for the year ended December 31, 2021, net income attributable to common shareholders was 835000 compared to income of $2 9 million in the prior year.
Here.
Our basic loss per share for the quarter was 19.
Paired to zero or breakeven in the prior year and our income per share.
For the year ended December 31, 2021 was <unk> <unk> a share compared to income last year of 24.
Adjusted EBITDA from continuing operations for the quarter as defined in this morning's press release was a loss of $1 7 million compared to income of 709000 and for the year. Our adjusted EBITDA was a loss of $4 8 million compared to income of five 4% in 2020.
A few balance sheet items.
For the year cash.
Balance was $4 4 million compared to $7 nine at the end of 2020.
Our current accounts receivable and Unbilled collectively were down $3, seven which reflected the drop in revenue primarily in the services segment.
Our current liabilities were down $7 million, reflecting decreased operations in the service segment timing of payments and the forgiveness of our current portion of our PPP loan, which was forgiven in 'twenty one.
Our waste backlog was $7 1 million in the treatment facilities compared to $7 6 million at year end in 2020.
Long term liabilities were down $2 7 million, primarily from the forgiveness of the long term portion of the PPP loan.
Total debt for the year was $1 1 million.
Excluding debt issuance costs with most of the $1 one due to our primary lender PNC bank.
And our working capital was $4 1 million compared to three seven at the end of 2020.
Finally, our cash from operations cash used from operating activity was $6 3 million.
Cash used by our discontinued operation was 525000.
Cash used by investing activities was $1 6 million primarily capital spending.
And cash provided by financing financing was $4 9 million.
<unk> of the equity raise of $5 8 million less our monthly term payments to the term loan.
427000, and other net financing payments of 402000.
With that I'll turn the call back to the operator for questions.
Thank you ladies and gentlemen, the floor is open for questions. If you have any questions or comments. Please indicate so by pressing star one on your Touchtone phone pressing star to removing from the Q should your question to be answered and lastly, while posing your question. Please pick up your handset if listening on speaker phone to provide optimal sound quality.
These hold while we poll for questions.
The first question is coming from Howard browse with Wellington Shields Howard Your line is live.
Mark Ben Lou Hope everybody is well you and your families.
Listening to your comments, Mark basically what you're telling us is.
With a budget in place and the bids out there you expect a very good second quarter and onwards is that a fair comment to sum up your comments.
It is Howard you know.
March was a good month for us.
I sort of see things get back to normal as I said.
But a couple of things I didn't say it was that.
The federal government employees themselves are making their way back to their offices.
Throughout the country in D C, particularly.
Which will likely increase efficiency in the procurement process, but to also make them little more accessible.
To discuss upcoming opportunities understand whats needed to win and sold some technical problems those kinds of things just normalcy really.
But the other part of it too.
Howard is if you look at our waste treatment.
Bidding that we do we maintain a lot of metrics on bidding, which is a direct reflection of sales and how our sales folks are performing.
Added a couple of new salespeople over the year. They are just now starting to really get some traction.
And where we.
We've seen our number of bids.
Go up from basically.
This waste treatment from about 15 in December of 'twenty, one to 28 and March which is a pretty pretty linear and gradual increase over the four months, but 20 bids in a month is pretty good.
Q1 is always our slowest month in waste receipts in sales. So I really look at that very encouraged by where things are going on there.
Treatment side of the house.
Some of that's attributable to our new technology, I mentioned <unk> technology.
There's a lot of other ones as well other things coming in one last point along that line too.
Is that <unk> gone through several major procurements in the last year, particularly the Hanford plateau in Idaho.
Our project as well as the big one here in Oak Ridge all of those have gone through transition.
Which had some form of impact in.
Q1, where they werent shipping waste because of changes in procedures over in new management in some cases.
Getting their contracts negotiated those are all over now and we're really starting to see a good backlog of.
Task orders for waste treatment, particularly.
In Q2 Q3, so it does look very promising at this point.
Let me and I'm sure everybody on this call wants to talk.
Talk about the if you will the elephant in the room, which is a tbi contract.
The main contract 15 years 45 billion was won by BWXT and they lost a contract.
My understanding.
And correct me if I'm not.
Correct.
We will finally see a.
Resolution.
Sometime in October of this calendar year is that a correct statement and can you expand upon that.
Yes.
Did pullback that award.
They took several years to completely redo the contract or the procurement.
To include.
The operation of VF law, which added a significant amount of scope to the to the procurement.
Yeah.
Dissipated funding is 45 billion over.
Over.
15 years.
And we.
We did participate in that procurement.
And that will include not only the tank operations again, but also startup.
And operations of DF law so.
Right now to answer your question they are anticipating award.
In what.
What is our Q4.
And they.
They seem to be on track for that they had oral <unk> last month or earlier this month, I should say and they're on their way. So hopefully they stick to that schedule that will be important to us and all the other bidders as well so it's an exciting procurement contract.
It's also my understanding that.
BWXT is re bidding on the contract and there was one other bit of witches whomever you Prime is that correct is that my correct.
Yes, I really can't talk about procurement or intelligence on the procurement because its a sense at this point Howard.
Yes.
So let's talk about the <unk> tank size cesium removal, they've done about 1 million gallons and they put them in <unk>.
Is that correct and is there an opportunity for perma fix to treat.
That waste.
Well, we'd like to think so.
He is very aware of our capability.
And.
I think you know I don't want to speak for D. O in regards to the strategy that my understanding is that they are going to be continuing to run the <unk>, which has been quite successful.
<unk> up there and continue to run it until they get a backlog. So they can make it and run that that a million gallons or so through the new <unk> facility. When it gets fired up which is currently scheduled for December of 'twenty three so another 18 months or so.
We're hopeful that they'll look at that waste and say, let's keep that just got rolling and treat treat it with the tbi technology, the drought with grabbing technology discussed.
But that.
Has not been.
Yes.
I positioned to deal with has addressed yet.
And hopefully they'll see the value in <unk>.
And getting that waste off site and demonstrating TPI at an operational level.
And allow them to continue to pump.
And treat that waste statistic or so they can.
Continue to reduce the risk of the tanks.
Last question on the Tbi.
For discussion purposes, you do the 2000 gallons its successful when do you have the opportunity of treating this three or four or 500000 gallons. So to say 2023 event.
Most likely Howard that's a difficult question because there's a lot of things that could happen between the 2000 gallons and going operational which is phase three which is viewed right now to be either 300 somewhere between 300 500000 gallons.
Do we have some flexibility in how they want to handle that depending on the comments, we're getting back from the regulatory documents right now.
Where this process is kind of as ongoing or.
We are at W. I R.
And in EMEA. So both of us have to be finished and I think it probably depends on the comments and.
What they see on their dependent and they'll make a determination on how fast or or the process that will happen between those two phases based on that so it's hard to say, but it worst case scenario. We would certainly think that that would come in early 'twenty three.
My last question the nuclear facility joint venture with Westinghouse.
Westinghouse in England can you give us a little bit more details has too.
When you'll be in operation, what kind of capacity volume margins.
Yes.
The reason I can't give you too much information because it is tied to a procurement.
We've been work.
Going on for quite some time.
And so there is a contingent component to that.
We are.
We're in with both feet and are currently in the planning stages, because it's tied to procurement I really can't talk about that too much but.
We are anticipating.
Irrespective of that procurement just based on the market in Europe .
That facility should be able to do between 10 and $20 million a year in revenue.
And it's totally speculative.
But what we're really deploying there Howard is a facility very much like.
We have at Richland.
And what we're doing is really opening up the market deploying.
Deploying technology, which we've used for 20 years and very very successful.
And a productive and efficient.
To support the markets in Europe , and Asia. So those markets are very very large as enormous quantities of waste and storage over there Thats basically got no place to go.
This technology has about a 90% reduction side or volume, which will allow us to treat that waste get it stable.
And put it back I'm going to hand, it back to them with much less footprint much less risk and safety risk environmental risk. So really high value. There we have a great relationship with Westinghouse.
And we're working on the design as we speak.
And hopefully if all goes well our seed procurements awarded or even if it's not I'm pretty confident within 18 months to two years, we will be able to treat waste in England.
That's all I have.
Good luck I hope everything works. Thank you I appreciate your support.
Thank you.
The next question is coming from Aaron Warrick with breakout investors Aaron Your line is live.
Hey, guys good morning.
As you noted disappointing results, which I think we all expected based on that situation, but really happy to hear about the future.
Your outlook only thing I wanted to talk about it or ask about in addition to what Howard asked was about other international opportunities you've mentioned some of those before and just wondering what the status is there.
Specifically, you mentioned, Germany, and Italy. In addition to the U K.
And a big influx of interest you noted on the last call what's the status of those right now.
It really is an exciting program for us over there right now we're getting our second shipment.
From Germany.
So thats going to continue.
That'll go to northwest as well.
And.
We have actually two other waste streams that we're getting from two other different countries in Europe , we're keenly talked about specifically where at this point, we're working through some of the permitting that has to happen with the NRC.
For important export those ways, but to answer your question.
A spreadsheet.
Probably got the 10 or 12 very specific waste streams that we're anticipating in the next 18 months.
Those waste streams range between 500 K in <unk>.
$20 million and B to B procure or secured and awarded.
Again over the next 18 months or so and we really see a lot of action with that.
Hurting us a little bit because of the transportation, which is one reason why we're moving this thing to England.
But that's not that much compared to that.
Cost of treatment and all and everything goes along with this.
Even though we're seeing a shipping cost double.
For a typical set of Sealand I would take you from 60000 to 100 100000, or so on a $1 billion shipment.
To answer your question that the market is going very well.
Based on the fact, just not a lot of treatment opportunities commercially available for any of that waste and in Europe as you probably know.
The ramping down on some of the reactors in Germany.
There are other places as well shipping or excuse me storage costs are extremely high and getting higher and now if you look at the cost benefit curve, it's starting to become much more feasible economically to treat that waste.
And then it simply keep it in storage and pay the high storage costs. So as long as that keeps trending we're pretty excited about it.
Westinghouse instead of the partner knows that market are there very well.
They fabricate fuel at the facility that we're going to be putting this facility in Springfield, England.
And so they know the nuclear market extremely well and have very strong contracts as well. So we're pretty excited about where things are going.
Okay, and I think I know the answer but just to clarify when you say the 500 K to 'twenty. One I think you were talking for a project right not in total.
Correct per project.
Hey.
Final question I guess.
Having to think about too is that the backlog what I think you said $66 million, but what do you define as backlog what in terms of that.
How long you think it'll take you to work through that I guess.
Backlog is defined for the services segment is.
Work, that's under contract and funded contracts.
So very high degree of confidence.
And they do range.
From.
Six months.
18 months from now.
Most of those were awarded in August September .
So the longest went out would be 18 months. The majority of that will be this year there may be.
Five or 10 million it would bump into the next year or a little bit more of that but it all depends on.
<unk> orders and how we can accelerate the projects I just toward the latter two biggest ones up in Princeton.
And the ship at the normal Naval shipyards, just the last two days.
With BARDA Who's our executive Vice President for services, both those projects are going extremely well.
One is way ahead of schedule once it right on.
Have great teams, there and our clients very happy so our margins are are looking really good and we're real happy with how those are proceeding and hope that we can accelerate those to get most of that revenue this year.
Hey, Thank you guys I appreciate it looking forward at the rest of the year. Thanks Aaron.
Right.
Okay. The next question is coming from Ross Taylor with <unk> investment partners. Your line is live.
Thank you could you give us a little bit more color you mentioned the shift down in Norfolk, but it looked like last call on a couple of calls you've talked about the substantial opportunity you are looking at coming out of the Navy.
$40 50 vessels being decommissioned over the next five years it looks like the navy wants to actually accelerate decommissioning.
Vessels this year above what they were projecting a year ago. So can you give us color on.
Both the opportunity and the potential flow of business out of that segment of the company.
That's a great question Ross.
While we're in Norfolk last three days.
The bottom line as you may have seen an article that recently came out.
<unk>.
The funding an acceleration of some of the work.
And.
But surprisingly enough.
The Navy was not real clear on what's next.
I think the number was nine ships to.
To be procured.
In the next 18 months.
One or two of those are nuclear.
But as far as what we could see in <unk>.
<unk> space, it's very difficult to understand when the consumer is going to come out.
The Navy is dealing with a lot of our.
Other priorities, obviously with the situation of the countries in increased costs are dramatic.
<unk>.
Between the fabrication as well as everything that goes along with ship maintenance.
So they're juggling that procurement strategy and they weren't able to provide a lot of detail. So I can't tell you exactly what's happening, but we can say that is.
<unk> chips that are coming.
One or two of those will be nuclear that will be participating on.
And there's also a couple of other <unk>.
Facilities.
At the shipyard as well that will likely be procured.
In 2022.
22 for the government.
That will be in a great position for we have such a good team on the ground. There the season people that know how to do this kind of work there's not a lot of other commercial contractors on the ground like that so we're pretty confident that with our subcontractors. We have we'll have a good shot at the following work, but it's going to be difficult to predict that in the next two quarters.
But certainly by the end of Q2, we'll have a better schedule, what's coming up.
And can you talk about what the potential value per ship is that not every ship has its own unique characteristics and the like so I don't I wouldn't think there's anything like a normal ship, but is there. If you think about it in that fashion, what kind of revenue opportunity are we looking at.
Yes, it's really difficult I'd be speculating Ross to answer that question, but I will tell you what I do know and that is the shift we're doing now which is a very large tender. We took care of a lot of subs I want to say its 600 feet or so 700 feet.
With an 80 foot beans is a big ship.
In the $40 million to $50 million range is probably one of the smallest jobs.
They have two aircraft carriers there the nimitz.
Enterprise.
And.
Those are both.
In the near future.
We'll likely be a well over 1 billion each.
I think there's a lot of shifts in between.
Between 50, and 200 million each.
It all depends on the level of contamination.
Which is all what we do is that decontamination and removal so that they can either go so they can disposition the ships themselves.
For whatever mission, they want to do with them.
And.
I think that's going to be generally where most of these things falls somewhere between.
$15 million to $300 million.
But they do represent substantial opportunity for you and they effectively have to get done.
They do.
<unk> been in Norfolk Naval Shipyard, which is a fascinating tour that drive this drive around you'll see all the dry docks all the docs, there that's where they maintain all of our fleets.
Navy and they're just running out of space. So they need to get moving ships out, especially the contaminated ones, which were taking up space.
There.
Make room for the new fleet in and focus our resources on <unk>.
<unk> and building new new vessels so.
It's a great business for us it ties very well into <unk>.
Decontamination and that type of work for us.
And our guys are really thrilled to be there.
And are really enjoying the work.
Okay, Great. That's it for me and thanks and good luck.
More backlog into the system by the next quarter right that would be great to hear thanks. Thanks Ross. Thank you.
Up next we have Ryan Hamilton with Morgan Dempsey Capital Management. Your line is live.
Yeah.
Good morning, and thank you for the time.
I guess, we'll jump in real quick.
You touched on trading activity in March can you give us some comments about what youre seeing as far as the size of those contracts and maybe what you're bidding on and maybe the number of people that are participating in that process. You know competitors that are getting a lot of exciting.
Yeah.
Yes, it's a difficult question Ryan in regards to the size that they vary from.
Small things like 50 to 100, K waste stream too.
Couple of million dollars.
There is some way streams, we're bidding with Boe, either that or even more than that.
So they really range.
I don't have the numbers on what the value of total values of this 28 bids I mentioned from March would be.
<unk>.
And that.
That would be difficult to describe this.
A lot of of surcharges and other things that go into those things that make that make it difficult to predict.
Where that might be.
I'm going to have to say I'm not going to really answer that at this point, but I can tell you.
We typically have two or three bidders.
Bidders that we compete against.
Unitek is one energy solutions WCS each each one of the and Veolia each one of those companies offer different treatment alternatives.
Direct disposal.
And.
We don't win everything.
They have some things that are definitely cheaper than us if you could direct disposable waste.
Very seldom been able to win that however, we usually don't bid those if you can direct disposal, because that's just going to be better value to our clients. What we bid are typically ones that need some type of technology to get them into.
Position, where they can dispose of them and.
And that's where we make our money so.
It's really more of an indicator of the activity that's out there in regards to.
Our clients are not only expanding our market and our relationships, but also.
Valuation how much our clients are our spending and focus on getting waste authors sites that they haven't been during a pandemic. So.
That's really it's really more of an indicator of that so next time, we have our next call Orion I'll be able to give you an answer on.
In regards to.
What those numbers look like.
Sure.
Historically looking back over the last couple of years, how does that bidding activity what does.
It look like is it out of norm is it something that youre expecting to see but maybe you could just touch on how it looks historically.
A general answer Ryan would be that for Q1.
Much higher than normal.
I'd say I'm going to speculate because I don't have those numbers in front of me.
I would say, it's probably double.
As far as the rest of the year goes we're typically doing.
Two or three.
Five bids are weak.
And so at 20 a month.
It would be it would be a reasonable month. So we had 28 in March.
That's a really good month for the month of March.
That's great.
Yes.
Youre talking about the new facility in England.
Are you planning to send overseas business there when it's completed.
Is that the plant or something else.
You're talking about the Westinghouse facilities that were talking about.
Brian .
Yes, Sir.
Yes, no Westinghouse the Westinghouse facility.
We're teaming with them on would just be for.
European and Asian clients.
So it's very specifically not competing with us so it's a good question.
It's an important comment.
As part of our arrangement with Westinghouse is U S markets will definitely be better served by here.
Ship over there.
Im sorry.
May have missed.
I'm asking if the overseas everything that you're doing overseas is going to go to to England, obviously keep everything here in the U S.
Okay.
But what we're building.
We're proposing to build in Springfield, and again it is contingent on a number of things.
But it is moving forward quite quickly.
Is.
Going to be very much if not exactly like our facility at current fixed northwest.
So there may be some waste that we don't.
We don't want don't run through that technology in England and that would come over here. We do have some other capabilities here that will not be included in that Westinghouse facility. So I would say that there may be some.
Come over here for some of the other technologies that we provide but most of it.
70, 580% of it would go to that.
That Westinghouse facility.
Okay got it.
I appreciate the time thank.
Thank you. Thank you.
Once again, if there are any remaining questions or comments. Please indicate so by pressing star one up next we have John Brown private Investor John Your line is live.
Yes, I have two questions first of all there is.
Public.
There is a public document.
Contract.
Worth about $95 million and it has your name on it.
I guess, you're one of the competitors, but it is a public document it is worth $95 million over a period of some years.
And it has your name on it can you clarify that can you talk about that is that something.
Is.
You are competing for scale.
Yes.
Just give us a little tolerance.
Sure John .
Im very hesitant to.
Spend a lot of time talking about what we call <unk> or May talk contracts May talks are multi award task order contracts is usually a number of awardees.
The there is a ceiling on those may talks.
They come out of the corps of engineers and as ceilings.
Reflect.
A limit that the contracting officers can can run through those contracts without having.
We're having to rebid them. So we were successful in winning five may talks.
In the last I think it was last quarter.
They have been the end of Q3.
But the bottom line as of <unk>, one for each region. So we're the only company that one one in every region.
I'm aware of.
So each region in the U S. It's really break them up into five for Pacific Coast and northeast Southeast.
Central and west.
So.
Each one was worth $95 million of ceiling.
So they can start running task orders through those may talks to the authorities. There is somewhere between three and 10 award is depending on the region.
And use those.
Basically a pre qualified group of vendors that they can just simply put a task order out.
We've got a task order it'll just be a scope of work on our project.
Turnaround a quick.
Fixed price bid sometimes.
Sometimes in a week or less or a week or two I should say.
And then make a quick award and you go quick so everyone's already been prequalified, they've got the capabilities they've got everything they need in place and ready to go. So we have those five with the corps of engineers It goes through the.
The Huntsville office.
For demolition services at military basis throughout the U S and the reason we're excited about those as particularly because there's demolition projects are needed for infrastructure upgrades at the military bases to put new facilities in.
New infrastructure so.
We're expecting a large backlog of this task orders we've done.
One we have supported two of those in the past for the northeast and the south.
And we typically on each one of those would do.
$3 million to $5 million a year.
<unk> performed very well have a great team of people that do that for us and they were very successful. So those are all <unk> diomede based on.
Covid and then based on.
The federal budget not being passed in other words, you can't users may talks Windows. A continue resolution you have to you have to.
Stop.
So both those things are fixed now or over and we're optimistic that they'll get rolling on those and hopefully by mid summer.
We will have a few of those task orders under our belt.
Okay. Thank you and the other question I had was.
Okay.
You compete in.
With a lot of different companies.
And you are rather small in size.
So you have a limited amount of leverage.
I'm thinking about lease leases, we recently saw merger with one of your competitors and Im just wondering what.
How much how much more effective or how much more.
Competitive.
B issue.
If you had if you had if you had if he were merged with some are taken over by someone.
And that could give you more resources more leverage and so forth how much more would that increase will help your business.
Well, that's a that's a pretty tough question John It depends on who you are merging with and what the terms are.
We have.
We really like to focus on our niche and that is the Rad market rheological market.
Along with waste management together.
We have.
Real strong capability that most of the big companies don't have.
We have six certified health physicists on her on our team.
Big companies.
Our earnings were close to that and those guys are really kind of the cornerstone of our of our services group not.
Not to mention that we have these assets each of our facilities.
Along with.
Senior waste engineers that know how to do this type of work and solve problems, having said all of that.
<unk>.
We obviously could benefit from being part of a larger company. We don't have a lot of small business set asides.
We have a little bit we have some small business work, but we don't rely on it. So we kind of view ourselves as a big company and competitive space.
And.
I'm sure we could benefit from that type of merger, but right now we're really focused on on getting healthy again back to where we were in 2020.
And as I've said on many of these calls our goal is to get the $200 million.
And the next three or four years, we really view that as a.
A sweet spot for us financially.
And.
That.
We'd be able to do very well for our shareholders at that level.
Yes.
If memory serves.
Couple of.
Within the last couple of years it seemed like you.
<unk> had a poison pill and then.
Got rid of that.
Okay can you clarify that a little bit.
We did we did not renew it.
The poison pill was put in place by our board because our board along with the management team felt very strongly that.
Our future.
It was much brighter than what our stock price was so we wanted to make sure we had that.
Legal position too.
Sooner that based on on a takeover type of situations that we saw.
The need to put that in place until we could get.
Two the level of revenue and profitability that we saw within our reach and provide that.
Certainty that we would be able to realize those revenues there is still a couple of years out.
Thank you can you don't have anything in place right now that would prevent somebody from making a bid for your company.
No Thats correct, we do not.
Okay. Thank you.
Next we have Howard Lantus private Investor Howard Your line is live.
Two questions there as referenced in the press release, two way material weakness.
Certain revenue contracts with non standard terms and conditions.
Noted that you are.
Building on buildings over 100 days of.
Revenues.
Is there a risk of.
Do you see a risk of write offs.
Mark.
They are coming up.
Additional reserves.
I will let our let Ben naccarato dress that Ben.
Howard No. We don't we look we as you know we look closely at all of our.
Receivables there is a couple of contracts one specific particularly that.
If there is we've had.
Slow.
It's been a slow process with the customer.
Change order related et cetera, and that's what gave rise to some of the outstanding receivables, but.
Now we're pretty comfortable with.
<unk> right now and don't don't believe anything material will be written off.
Okay.
The contracts.
That weren't important properly evaluated or are they mostly behind you or do you still have some that are that are out there to deal with.
Yeah.
Behind us.
It really is an expertise.
That.
Really this is an internal control issue.
And it was something that.
Just was put in place in June when we.
Hit a certain market cap, so our infrastructure and labor getting the labor intact and the expertise intact. It was a little slower than we had hoped it would be.
We were on it now.
It was an aggregate issue more than anything nothing material nothing changed the financials because of it.
Great.
It's behind Us and will remediate it this year.
Okay. Thank you.
Okay. The next question is coming from Steven sign private Investor Stephen Your line is live.
Hi, guys how are you.
They were good thank you.
Okay.
With regard to the $66 million backlog.
I didn't hear so how much of that is service and how much of that is.
His treatment.
That's 100% services team.
Okay Alright.
The.
Alright.
Okay. So times had been times have been tough.
And you guys have survived have you as you've always survived.
Mike one of my thoughts as how much of your competition, that's going out of business.
Okay.
That's a difficult question Steven.
We know that several of our competitors have taken a step back we know that several competitors have closed facilities.
And which is important to us.
I don't want to talk about our competitors too much at this point in regards to the specifics but.
Yeah.
I do have.
Lunches and conversations with our competitors are frequently.
And no that everyone has suffered.
Those projects ended.
You went in early 'twenty one.
We found ourselves without the ability to ramp.
To replace them I should say.
So the companies that do well are the ones that had the ones that were sustainable after that.
Period of time.
To answer your question, maybe specifically no one I don't know if anyone's gone out of business.
We compete with normally companies who've gotten weaker they've lost personnel key people we gained a couple.
From that period.
And.
They've lost position to a certain degree, but I think most of our competitors, particularly in the waste treatment space.
We're going to be pretty close to where they were two years ago with the exception of a couple of facilities that are closing.
Okay.
With regard to in the announcement today. It says you were out of the medical business. So.
Is that a right.
Wrote down $1 2 million or <unk>.
Is that.
Is that what I'm interpreting there.
Yeah, Ben do you want address that.
Im sorry can we ask again.
In the announcement today. It said it said you are out of the medical area. So is that the final number we're going to see.
In the in the.
Financial statements with regard to medical is that it was done yes, yes other than X.
Cereal a few immaterial dollars for cleanup.
Yes for the most part with the segment is off the books.
Alright, So why got you been also in the announcement there was some statement about some functional some functional problems that occurred in accounting or something like that I didn't understand that what was that about.
That's what an earlier caller I think it was Howard asked earlier about our material weakness.
So Steve as of.
June we had a new requirement that the auditors have to attest to our internal controls and what that means and <unk> heard socks Sarbanes Oxley rules in the past they did not have to this because of our market cap. They now have to a test.
Okay Alright.
Right.
Okay.
The Canada deal, which you had an announcement on sometime during the year, which stopped how's that coming along where you're collecting that or is it and is that is it.
Is that what's ballooning your your accounts receivable.
Yes, that's the one it's moving along.
Discussions with the customer to get it resolved.
Because the contract is effectively over comments. So it's just a lot of negotiation back and forth discussions reconciliations a lot of these big contracts end up the paperwork behind it all is usually the biggest log jam.
Work is usually done to everyone's.
Satisfaction, but it becomes documentation and that's where that is and yes. It is it.
It is what's behind the AAR.
Alright, thank you.
I guess I'm going back to Mark.
Let's talk about the Tbi.
Alright, so I've been sitting here five years listening this story.
And.
The last thing the last thing I.
The last thing was supposedly there had to be an environmental study before anything could happen how is that coming along.
Yes, the SaaS of it Stephen as these balls are in <unk> Court.
And to do it.
As the duct and environmental assessment under the NIPA policy that National governmental Policy Act.
Which include a public comment.
And then to get that completed they also had to do a report called waste incidental reprocessing report.
Which basically.
Covers them in regards to the fact that this is not high level waste or sending off site. So.
Both of those had to be done.
And they both had to get public comments.
<unk> currently is in the process of.
Addressing his comments incorporating them into the documents in their alternatives and <unk>.
Decision.
And.
Then when those are both completed they have to do a get a permit for this work from the state.
<unk>.
So right now thats kind of where it is there in the process of finishing up those documents public comment periods where months ago.
<unk>.
They should be applying for that permit in the next month or few months I don't know exactly what their schedule is I don't want to speak for them.
But thats the process and then as I said there was a recent article.
We're the management from both <unk> and <unk>.
Regulator were quoted.
Stating that they are on track, where they're working on that hopefully to have something this summer.
They are both making a priority out of it so.
That's pretty much where I know as far as the status at this point too.
Okay.
Alright, so I.
And reading.
Particularly national.
I think was it the northwestern energy Alliance they've had a lot of literature out over the last year.
You know their arguments are that the.
The vitrification plant is.
It's dysfunctional that debt.
Great twice the ways it will.
Potentially be clogged up with iodine and medium.
So you know.
I know this is a card maybe you can't answer me, but it just seems you know it's it's.
Half of what is being said.
So I guess Don Fathom how.
You know you are not being taken more seriously.
At least as a supporting things like that.
I guess that the states and I won't put you to answer that but.
As a technical person reading something where.
It just seems like the status quo continues when it's like we're building a boondoggle here, which may not work.
And they are off.
Yeah. So you know I will.
Dresser.
Our strategy has always been to be part of the Oes.
<unk> that's all that's all we're pushing for.
And to be.
And they have.
I was a federal employee with department of energy for a number of years and sort of I understand they have.
A much bigger picture than we do.
And challenges and political issues and all kinds of other things that are dealing with at the same time and we have a lot of respect for that so we've been trying to be patient as a company.
And sitting back and making sure their.
Comfortable with the data that we have as far as the performance of our technology.
We've made numerous briefings they know what we can do they know that.
Technology is is dramatically less expensive.
It doesn't generate the carbon footprint, there's a lot of other things that are advantages to it.
What we're excited about is being a part of that strategy as a supplement to their strategy.
Hopefully they'll see the value of how we fit together with the <unk> program and their overall site mission program.
So that we optimize taxpayer dollars and the environment. So.
Because we have to keep that approach.
Or will all go nuts here, because we feel the same as you do.
But the bottom line.
These guys are tough jobs and hopefully we.
We will see that by the end of this year, we'll get to that next phase.
And be able to demonstrate everything that we've been able to everything we've talked about as far as performance and value goes.
Mark maybe you should be running for political office that was granted.
Okay.
So my last two.
Two more questions. So presuming my statement on the <unk>.
Nine in tech medium I can never pronounce that is generated by the by the vitrification process. So yes.
So can you guys handle that.
Can you guys handle the way we.
We can treat the waste that comes off the <unk>.
<unk> was mentioned Howard Bras mentioned before so that's <unk>.
It has not.
Not to get too technical.
We'll separate.
And it cesium out of the.
Out of the.
Liquid it's coming out of the tank.
Does that through an ion exchange system. So as the resident there that that will capture that so we can take that waste.
From that extraction system, the <unk> without any issues at all.
And we do it all the time for other types of way so yes. It is.
Not a problem.
Alright last question is you are on that $45 billion.
Contract you are bidding on it as part of the consortium is that correct.
So let me just say we are participating in that procurement. So yes, we are.
Okay all right.
It's it's been it's a tough world.
Uh huh.
Many nights I listened to the news and just shake my head and it's just hard to fathom and Youre here.
And.
There you are providing a lot of hope.
<unk>.
<unk> you guys.
Better times to come thank you.
We appreciate your support Stephen and Covid has been has been a real hurdle along with all the other things are going on but I appreciate that.
Okay, I'd like to turn the floor back to management for closing remarks.
Alright, Thank John Alright, I'd like to thank everyone for participating on our fourth quarter and year end conference call. We said we remain we remain.
Extremely confident in our outlook for the business.
2022, and look forward to talking again next quarter. Thank you.
Thank you ladies and gentlemen, this does conclude today's conference call. You may disconnect. Your phone lines at this time and have a wonderful day. Thank you for your participation.
Yeah.