Q1 2022 Perma-Fix Environmental Services Inc Earnings Call
[music] actual result.
Yes.
Good afternoon, ladies and gentlemen, and welcome to the Perma fix environmental services first quarter 2022 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 David Waldman Investor Relations, Sir the floor is yours.
Thank you and good morning, everyone and welcome to Perma fix environmental services first quarter 2022 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 first quarter.
2022 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 two one to $6 70, 11020, 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 secured.
<unk> Litigation Reform Act of 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 U.
<unk> Securities and Exchange Commission as well as 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 to today's discussion will include references to non-GAAP measures perfect believes that such information provides an additional measurement and consist.
And 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 on our website I'd now like to turn the call over to Mark Duff. Please go ahead Marc.
Alright, Thanks, Dave and good morning results for the quarter.
While disappointing we are very much in line with our expectations as we discussed in our recent year end conference call. We continued to experience weakness in January and February related to the pandemic and the delays in both our services and treatment segments.
That said, we started to see things pick up in March and saw a significant increase in production, which has continued at the start of the second quarter, while services segment excuse me within the servicing segment.
We recently commenced several important projects that are mostly full.
Fully operational at this point in term, we expect these projects will contribute to improved revenues and profit.
Profitability in the second quarter.
As a result of these latest project awards, we anticipate growth in our services segment revenues of roughly 50% in the second quarter alone as we sit here today, our services project backlog is approximately $58 million, which bodes well for the balance of the year. In addition, we anticipate the federal government will be procuring.
New projects in the second and third quarters that we expect will further contribute to our revenue growth going forward.
As I mentioned on the last call.
We've been selected on several <unk> or multi award task order contracts that include large funding ceilings and <unk>.
Put up new markets with.
With the approved federal budget these contracts provide us the ability to bid on task orders among a select group of companies.
With the limited competition and the scope of work that they provide we have a good sense of the potential opportunities going forward. We anticipate the government will begin awarding these related task orders in Q2 and Q3.
We're also bidding on some much larger service projects within <unk> as part of larger teams.
That will begin to be announced later this year, if we're successful on one or more of these projects.
Contribute meaningful recurring revenues and cash flows on multiyear projects.
As I've stated in the past the federal government has been slow to procure new task orders due to the pandemic. However, these projects have not gone away. We've received information regarding numerous opportunities that we expect to be bidding over the next two quarters.
There is significant pent up demand and we look forward to capitalizing on this opportunity in a very meaningful way with our within our treatment segment. We're also seeing strong demand for waste treatment capacity is evident in the steady steady increases and recent request for quotes from our clients. In addition, we've expanded our treatment service.
As to the commercial utility sector, which has broadened our market base and has resulted in several new shipments in Q2 that will likely represent sustainable revenue for several years.
We've completed startup and testing of our new vacuum thermal desorption system.
And continue to see strong market demand for the system overall, which will be an important component of <unk> mission as well as waste generated by utilities and the oil and gas industry.
Overall, we've built a solid foundation for growth and we're confident the momentum of profitability. We've achieved prior to Covid will be realized again as a result of our increased bidding activities experience of our waste capabilities and treatment capabilities and improved federal budgets.
Also it's worth reiterating the importance of the new 2022, federal spending bill, which allocates $900 million of incremental funding within the <unk> office of environmental management. These increases over prior year funding typically support increased waste treatment and other products, which align with our core competencies.
We also remain highly encouraged by the outlook of the Testbed initiative or Tbi also known as the low level waste off site disposal project in support of the Hanford tank disposition mission. The second phase of the Tbi project to include the extraction shipment transportation of 2000 gallons a tank.
Waste to a perfect northwest facility.
Could it enriched in Washington is anticipated to occur in late Q3.
This project and perspective.
And the potential that it holds for perma fix that.
As directed by the National Defense Authorization Act or also known as the NDAA to enter into an agreement with the federal funded research and development Center <unk> DC to conduct an analysis to evaluate approaches for a supplemental treatment of below activity ways. In addition to the current view vitrification strategy.
<unk> strategy includes mitigate vitrification.
The low activity waste and our new plant.
We are currently constructing called the direct feed low activity waste plant or <unk> plant.
Under construction currently scheduled to begin operations at.
In December of 'twenty three.
Subsequent draft report by the <unk> D. C was developed by four National Laboratories, and concluded that the grouting technology appears to be the only alternative that is taken.
Technically viable affordable and flexible enough to implant under.
Assumed constraints budget constraints scenarios.
Significant impact to the waste treatment plant high level waste specification facility and its mission and scheduled for completion.
We'll report further states.
The deal we should expeditiously implement multiple pathways for Offsite grout solidification of mobilization and disposal of waste in parallel with the <unk> facility.
That's the Directv low activity vitrification process.
So according to this report and the implementation of Offsite grouting to address the 56 million gallons of tank waste at Hanford would potentially say the doa as much as 95 billion.
95 billion with a b.
Even if it's assumed just a modest percentage of the overall savings comes to perfect. As you can see what this project holds and rigs.
Parts to its revenue potential.
And perfect maintains the only capability to provide this treatment in the vicinity of the Hanford site.
So I would invite you to.
To look this report up on the Internet and you can see the.
A summary summarized it pretty well.
It seems that repair the support is led by <unk> Savannah River National Laboratory, along with the Pacific Northwest National Laboratories, Los Alamos National Laboratory, and Sandia National Laboratory or.
Multiple multi university a consortium along with the Institute for Defense analysis, and Parsons as I mentioned on our last call. The recently enacted federal spending Bill includes additional $7 million specifically allocated for the test bed initiative in 2022. This funding line item underscores the visibility and recognition within.
The U S Congress for commercial grouting approach to supplement the current <unk> program, while providing significant cost savings and schedule reductions to support the Hanford mission.
So to wrap up it's clear to us that there is a solid federal budget.
And significant backlog of demand that we expect to capitalize on going forward. As a result, we remain confident the balance of 2022, we'll see significant improvement over 'twenty, one as I mentioned earlier we.
We are already seeing signs of this improvement in our March performance.
We continue to invest in our capabilities and facilities, we have highly scalable infrastructure and we maintain a solid balance sheet as well.
We're currently excuse me, we're already seeing the turnaround in <unk>.
Q2, and have a much better visibility.
For the balance of the year as a result, we believe we are well positioned to resume ultimately.
Typically exceed the performance of profitability, we had maintained prior to the pandemic through.
Through our increased bidding activities waste treatment capability expansion in the federal budget support on that I will now turn it over to Ben who will discuss the financial results in more detail.
Thank you Mark.
I'll start with revenue our total revenue from continuing operations for the first quarter was $15 9 million compared to last year's first quarter of $23 1 million.
The decrease of $7 2 million or <unk> 31.
2%.
The decrease in the revenue was entirely due to a drop in our revenue from our services segments.
As new projects that were counted on to replace completed contracts were slow to start up and this is basically because of COVID-19 related to COVID-19 in the early months of the year.
Delays also occurred for government funding and consumer and customer administrative regions while.
While our waste treatment revenue was consistent with first quarter, we continued to see delays in waste shipments due to the impact of COVID-19 on our customers and our staff.
Turning to cost of goods sold.
Our total cost of sales was $14 3 million for the first quarter compared to $20 8 million in prior year, a decrease of $6 5 million or 31, 3% which is consistent.
The decline in revenue.
The reduction in cost of goods sold comes from reduced labor travel and subcontract expenses in the services segment.
That relates to the less the lower amount of project.
While we did see plan expenses increased due to higher labor materials and utilities.
Our gross profit for the quarter was $1 6 million.
Compared to $2 4 million in 2021, the reduction in gross profit of approximately 720000 was the result of the lower revenue in the services segment.
And the higher labor costs and plant cost in the treatment segment.
Our G&A costs for the quarter.
We're $3 4 million compared to $3 2 million in the first quarter of last year. This increase of 217000 relates to higher outside service costs.
Mark option expenses.
Offset by lower consulting expenses in the sales group related to lower bid proposals.
Our net loss attributable to common shareholders for the quarter was $1 3 million.
<unk> to last year's net loss of $1.1 million.
As with the gross profit delays in the startup of our large projects in the service segment had the biggest impact on our results.
Our basic loss per share for the quarter was <unk> 10, compared to a loss per share last year of nine.
Our adjusted EBITDA from continuing operations for the quarter as we defined in our in this morning's press release was a loss of $1 4 million compared to a loss of $5 22.
522000 last year.
Turning to the balance sheet, when comparing with year end.
Cash on the balance sheet was $3 9 million compared to $4 4 million.
Unbilled receivables were down $3 7 million.
Due to timing of billing, but also an indicator of lower project revenue in the quarter.
Our current liabilities were down $3 7 million again, as a result of timing of payments and reduce project work.
Our backlog at the end of March was $6 1 million.
Down from $7 1 million at the end of the year and also.
Down slightly from the $6 2 million in March of 2021.
Our total debt at quarter end.
994000 exclude and this excludes debt issuance costs of which 916000.
To PNC bank.
Finally, I'll summarize cash our cash provided by continuing operations was 148000.
Cash used by discontinued ops was about 142000 <unk>.
Cash used for investing.
Continuing operations was 321000.
Thats primarily capital spending.
And cash used for financing was 189000 representative of our 106000 of payments on our term loan and finance lease payments of about 83000.
With that operator, I'll now turn the call over to questions.
Thank you ladies and gentlemen, the floor is open for questions. If you have any questions or comments. Please press star one on your Touchtone phone pressing star to remove you from the queue should your question to be answered and lastly, while posing your question. Please pickup your handset up listing on speaker phone to provide optimum sound quality.
Please hold while we poll for questions.
Once again Thats Star one if you have a question or a comment in.
And the first question is coming from Howard browse with Wellington Shields. Your line is live.
Thank you.
Mark and Lew.
I hope.
You all are well and your families are well.
Thanks, Ara youre doing well as well.
Thank you currently.
So let's get to the margin.
Okay.
The question is given the appropriate permits can you confirm that the state of Washington Department of energy.
Finally, an agreement to do crowding for low level waste.
Yes, Howard I do believe both are supportive.
<unk>.
Recently commented numerous times that.
They will make the.
The resources necessary available to <unk> to review any permit or any request.
For shipping.
The waste for Tbi from the tanks.
And.
To support that initiative.
And.
It's interesting because theyre not in support of a lot of different things associated with alter.
Alternatives to the <unk> plant for example, they're not supportive of pretty much any.
Waste treatment to be disposed of on site, except for vitrification. So again, our plan is to go out this waste and ship it to.
Two offsite disposal commercial disposal outside of the state of Washington.
Specifically for the <unk> <unk>.
WCS and Texas.
And.
They are supportive of that approach as far as the deal is concerned it's also supportive.
As a supplement to the floor again, they're very sensitive to making sure D. A flaw.
As not to distract.
Distracted from Tbi Tbi.
But have been supportive of through the regulatory process getting the document and the NIPA.
Environmental assessment through the system to support moving forward with the treatment.
By late summer.
Secondly.
Beyond the 2000 gallon test.
When you're talking about some time in 2023.
A second.
Okay.
It's a 500000 gallons.
Or do we stand on that.
Well Howard Lot's changing along the way on this program in that regards the <unk>, which is the tank side cesium removal system has been removing waste from the tanks right now doing a pre treatment to it and putting the waste and storage.
And another double sell tank.
So far I think we've done two or 300000 gallons I'm not sure where they are exactly.
But that waste is perfect.
For us to conduct our grouting on.
Use it for the final phase or for long term production.
We're hopeful that deal we will.
I'll do 2000 gallons and see the value in and us treating and disposing of the waste that theyre continuing to pump.
And hopefully that will make it much simpler it is a low level waste.
By definition at.
At least that's our view.
And that would be a great candidate to continue the grouting operation.
Ship that Offsite, two demonstrated production level of value from the grouting approach.
So when we talk about off site with upside from Hansa.
So the U S side.
Please.
Understand that other people can do crowding.
Whats necessary for them to do it and how long would it take.
Yes, our facilities located about 11 miles from the actual tanks. So it's right at the edge of the Hanford reservation.
And what that makes it possible to do a very easy shipment to us.
We do all the time for Hanford waste now we do all different types of waste from the Hanford site.
We are the only ones that have the permits and facility established right now so it could take to get the permits that we need to do this type of thing commercially.
Off site would be somewhere between five and 10 years estimating depending on the resources the state would have.
And then capabilities themselves.
You have to be developed so we have those capabilities right now to do about 300000 gallons a year.
With some minor upgrades.
Minor permit mod, we could get to a million.
B at a production level very efficiently.
To do that.
Grouting.
<unk> reduced costs from the current program.
So as a result of.
The startup of the vitrification plant.
We'll be almost a one for 1 million gallons.
Million gallons of.
I think the words affluence.
And basically 2024.
Where do you stand in your ability to.
One get the contract in two classes.
Routing of course.
Yes, there is a number of different effluent streams that would come off the floor. Once it starts again as you said in December 'twenty three is a current startup plan.
We are in line for that to provide that support the deal. We don't have a contract with them we have spoken to them.
But we don't currently have a contract but that would be a perfect.
<unk> solution for that.
<unk> waste.
That would come off of that.
That plant for.
For grouting, and we're pretty confident that.
Perma fix will be in a position to treat that waste as soon as you start processing.
And Youre right its about one for one from a gallon that goes in and out of waste out of the tank they'll produce about a gallon of that effluent water from other affluence of other waste streams that come off as well.
That has some other distribution passed but we're looking at that water that they use in that process.
Thanks for taking one more question.
And I'll come back later.
What are the contracts on the EPA along with two others.
Telecom practice.
Uranium mines Navajo Nation territory.
Was it $220 million contract.
So as you correctly said.
So two questions one how much of that contract.
When you receive over what period of time and certainly when do you plan on study.
Sure.
Pretty long list of IDI cues Howard as I mentioned in the script.
<unk>.
Theyre all slow to get moving.
We're all waiting for the federal budget to be approved which was done in March.
Now they are wrapping up their past quarter rfps.
Which we've.
In total we should start receiving by mid May.
We have some big ones with the Army Corps of engineers as well as Los Alamos and the Navy. The one you mentioned the EPA.
Had informal.
Notification that there is.
Our first half is coming it will be three bidders on the hold that idea a cue for the blended uranium mine.
Q.
We're teamed with two other companies on that and but our role is significant it's basically manage the waste and the radiation protection program, which is a significant portion of the project.
Particularly waste disposition.
There's also a component of sorting.
But as we've talked on prior calls we have a technology, that's very advance on that so well.
Highly confident that we will be competitive on that.
All of these things goes but I don't know the value on that initial task order Howard, but I've been told is over 20.
Uranium mines that are on the near term list that they characterize and putting together task orders on.
Underneath that IBM Q. So it seems like there's going to be a good backlog that work out there that's been funded by Congress I know.
And it's a highly visible in the southwest so hopefully we'll start seeing that program gets some traction and getting this mine's cleaned up out of those areas in the Arizona, New Mexico region.
That's all I have.
Yes.
Best of luck on getting these things done much appreciate alright, thanks Howard.
Sure.
Once again, if there any remaining questions or comments. Please press star one on your Touchtone phone.
Once again Thats Star one if you have a question or comment.
And we have a question coming from Steven Fine private Investor Your line is live.
Can you hear me good morning.
Good morning, Steven.
First question is.
When you said you mentioned theres, a $58 million backlog.
Yes.
How much is service and how much is treatment.
So thats all services Steven treatment treatment treatment backlog about.
Between seven and eight in that right that.
Six one.
So I want to go at this point.
Okay Alright.
<unk>.
Obviously as the rest of the World you are being impacted by costs.
With new bidding are you able to pass on.
Your extra costs.
That's a good question Steven.
Our variable costs are not dramatic because most of their cost to run the facility, our obviously seen some costs and labor increases.
And.
Fuel and trucking.
And containers.
But to answer your question.
<unk> been able to pass on some way streams, it's been no problem at all and other waste streams that are highly competitive.
Been less.
But overall, we have not seen it.
And impact on our margins at this point overall, our gross profit.
Ben keeps very close, but our CFO keeps very close tabs on.
Supply chain issues and inflation issues to make sure that we're maintaining.
The gross profit.
We had planned for the things that we're treating specifically.
On the services side, it's much less because it's mostly labor.
And several clients have been very supportive of the impacts in London, letting us do mods.
And.
Apply fuel surcharges along the way.
But we haven't seen a real impact overall to the operations at this point Ben is there anything else you want to add to that.
Yes, yes.
The only thing that really stuck out in the quarter was natural gas costs in our plants.
And that was up a good chunk.
But otherwise trends.
Fuel surcharges in the trends.
Really our product line various sometimes we use a lot of trends in other times, we don't.
When disposal increases are.
And disposal.
Facilities, we're usually able to pass that on to the customers.
Yes.
Relative to increased cost.
That impact if you get the tbi.
You have a set price where that'll be your costs will be more expensive there now or is that not a factor.
Our prices, yes, I would say, yes, because theyre not theyre not set either at this point yet.
Okay.
That answered the question.
There is a big contract out for the.
The operation of the plant and the plant maintenance.
And.
I'm presuming, you're you're part of somebody with that.
If that's correct.
Do you have any.
Hearsay on when that's supposed to be awarded.
Yes, Stephen we are a part of that procurement, obviously can't talk about it because we are participating in it but all indications are that <unk> is on track for.
The October timeframe for an announcement.
There is no reason to believe that that's changed any recently.
So thats kind of what.
We're assuming at this point.
And in that contract, if you're able to say something.
Your participation is.
Yes.
As part of the group right.
Yes.
A critical subcontractor on a team.
Right.
What was the $6 73 this tax thing.
It was $6 73 that you had added in relative to <unk>.
Yes, yes, that's if you remember back in November in the third quarter Steve.
We we eliminated our valuation allowance and thats kind of like a reserve on your Nols.
And so now we book taxes, one way or the other and so because we had losses, that's effectively a negative tax.
Yes.
That wasn't there you would have a greater loss rate correct.
Okay, Alright final question is.
Keep reading I keep hearing that.
Industry is being impacted by the inability to find people are you having those problems to find people.
We are not yet Steve.
We are having some turnover, but we've been able to find people.
And.
Not a work from home company for the most part.
And that's hurt us a little bit.
Because we have such a team oriented oriented office and the work we do requires you to be at work.
So we've lost some folks there, but we've been able to replace them.
The <unk>.
Places locations that we're in.
Been supportive of that.
Labor market Hasnt been quite as bad as some other places in the country.
But to answer your question.
Impacted us.
Significantly we did we've lost some people probably the thing that has impacted us if anything is the Doe sites.
That were located near our hiring.
Enormously.
So we're fighting.
The pressure for people to join other contractors at the sites.
<unk> budgets go up.
But so far we've been able to replace our personnel and with a few exceptions out of Hanford.
<unk> seen limited impact.
So so I guess connected to that question is so if you progressed with the tbi that went to the larger amount.
Sure.
Is it reasonable to ask that you'll have you'll be able to get people to be able to scale up.
We believe we can.
Steve I think that.
That will not be where our risk lies I think that we will be able to move the folks around that we've got.
And we've been successful so far in recruiting that we've lost.
About a dozen people in Q1.
Early Q1.
And by the end of the quarter.
And that's not what we want to be spending our time and resources on.
We don't want to train people believe me.
But we've been able to recover and I think it's a little bit more stable now so to answer your question I don't see that as a significant risk to be able to meet tbi goals.
Okay.
Thank you very much and thank.
Thank you David.
Thanks, Steve I appreciate it.
Okay. The next question is coming from Aaron Ward with breakout investors. Your line is live.
Okay.
Hey, guys. Thanks for taking the call.
Sure Aaron.
Good morning.
You guided.
Sort of generically.
You expect the revenue this.
This year to return to or potentially exceed pre COVID-19 revenue.
Looking at the numbers then it looks like Youre pre COVID-19 would have been just over $100 million. So is that sort of the expectation that you would.
Over $100 million this year in revenue.
Well, we certainly want to be tracking to that level on a quarterly basis Q1 was not.
Supporting that that goal very well.
But we are looking at the next several quarters that are getting towards that $25 million a quarter level.
And hopefully exceeding it with just a few more wins.
Over the next two quarters, we should be able to exceed it by the end of the year. So that is our goal.
I don't want to speculate that that we'll be able to make up for Q1.
At this point, but we certainly are thinking that will be in the.
$25 million a quarter.
Position by the end of the year.
Sort of on a run rate level.
Okay.
And then you had mentioned on the last call about bidding activity in March and how it was it.
I think pretty much indicated the highest levels <unk> seen for that month.
Things look in April .
Is that kind of continue into April .
It has continued March was a pretty big months, but we've been I think I mentioned in the last call that we added 28 bids in March I don't have the number for April but it's in the mid Twenty's low to mid Twenty's overall, I would speculate again add up to <unk>.
Verify that.
It pretty well.
Our revenues or excuse me the values of those bids.
We're increasing pretty linearly along with the numbers of bids.
We're we're seeing a lot of activity in the commercial sector that are making up for some of the delays from the government work on the waste treatment side of the house.
So Rob we're very optimistic about that.
We will continue to see that number be in the mid to high <unk> on a.
Per month RFP basis.
Fantastic. Thank you guys appreciate it.
Thanks Aaron.
Okay.
Okay. The next question is coming from James Godfrey with Godfrey Consulting group Your line is live.
Good morning, gentlemen, thank you for taking my call.
Alright good.
Morning.
So I just wanted to follow up in greater detail to some of the prior discussion here.
One of the things of course, that's imperative, let's face at Hanford and treatment at Hanford, So huge and the test bed initiative and you suggested that hopefully by late Q3, we could actually see the next 2000 gallons come in as part of the test that initiatives second phase to that end this week.
Alright last week actually there was a Tri party.
Three day or two day, three day meeting I guess and from that weapons complex monitor indicated that.
The speakers certainly were hinting that.
A deal was clearly in the works with the state of Washington.
That's kind of validating what your representatives and I appreciate that and just put that out there for whatever it's worth now theres one final permit necessary from the state of Washington, and I wanted to know.
How encompassing is that permit going to be is that going to be kind of a huge event that gets us over the hurdle or we're going to have to continue to grapple with the state of Washington going forward.
For the next phase of the test bed initiative.
Well, that's a complicated question James but just in a nutshell the permit that you're referring to is the <unk> permit in the RTD permit.
What <unk> applies for with the state to ship.
The 2000 gallons.
And any additional waste that they'd want to ship to go underneath that ardine permit.
Permit comes in after the.
Sure.
Waste is incidental to reprocessing report is approved along with EMEA being approved then they apply for the <unk> permit.
And.
This.
States.
Stating that should be less than 90 days to grant that permits so to answer your question it's not.
Quickly over.
Over the onerous permit request.
Certainly.
Already written deal was already drafted.
<unk> application for the most part and ready to go with it.
So we expect that to go in any time now in the next few weeks.
Is my understanding.
And.
So the state turned it around to meet that Q3 <unk>.
We'll reschedule I should say.
So we don't expect it to be too bad Theres, a couple of things.
Change things along the way to bring on what waste they want to ship us in.
There's some debate out there as they shipped us the waste in the us.
That statistic or has generated they wouldn't even need that permit.
But.
We're leaving it up to <unk> to decide and work with the state on directly.
But at any rate.
It looks good for the end of Q3.
Fantastic.
Very encouraging it's been so long in coming in and of course, COVID-19 delayed everything, but that's exciting speaking of Covid delays at one point you had represented the government had been stockpiling a lot of a lot of waste in that you were hopeful that at some point you would see not only a return to normal levels, but it's serge.
That.
Also you were receiving in effect.
Some of this built up waste that hadn't been chip is that still your expectation and do you have any kind of just general guidance as far as how much stacked up waste is there out there that we might potentially see.
Yeah, James it's really hard for us to understand what they've got.
What their inventories are that they're going to ship, we know that from meeting with several of our larger generators at a conference in March.
And in Phoenix.
There is spreadsheets of.
Of waste.
They have accumulated.
Through clean up activities or other things over the last couple of years. So they haven't shipped.
The depth that waste will begin to be moving we have put into bids for several of the larger waste streams.
We're waiting for silver Oak Ridge here to get through their system.
The primes are negotiating with the <unk> on those now as far as what the priorities are our next and which would be funded with the current budget is approved.
Almost last week at their facility in new Mexico. They have got a big list as well and we're working with them on some specific ones. So that we do know that the law.
List out there are much longer than is typically seen in the year, what theyre funded to do what their priorities are.
What shows up in task orders that we can't speculate on because we don't know which ones.
We could address versus direct disposal versus something else.
So it's difficult to say, but we do know there is a pent up demand.
And we meet with the waste managers for each of these sites frequently.
And they convey to us they've got good backlogs.
To keep moving with their surplus in funding so we're optimistic.
Great.
Just kind of looking at the overall business. We have survived on the services side, but not only do we see revenue increasing but also high margin high margin treatment business is going to become a more important mix going forward and this is critical as we all know so that that's certainly encouraging and I appreciate your.
Answer thank you Marc as far as the $45 billion Hanford.
Andrew.
Integrated tank disposition contract embedded in that quarter and meaningful work must be done by small businesses and more in their bidding as a group.
Thats fine EBIT, if we don't win the bids though doesn't our facility on location opened the door for just a huge surge in potential business activity at Hanford is this $45 billion contract gets integrated, especially since we still fall under the small business umbrella.
You are correct, we do fall under that umbrella and the answer is absolutely we win or lose on that team. We do expect to be supporting Hanford in a big way on several.
Of the process waste streams that come off their plants.
The tank farms and <unk> facility as well so as that program is rolling we do see significant opportunity and we've been.
Involved heavily with the incumbent contractor who continue to meet milestones.
On the <unk> startup as well as other field activities.
Get a good understanding what those waste streams that looked like in the coming years. So to answer your question absolutely.
We're very confident that win or lose.
It'll be a big impact to our purpose northwest plant.
When those programs get rolling.
Fantastic Fantastic.
Just a couple of other questions in the past you've you've talked about you had multiple quote unquote transformative initiatives in various stages of incubation and I think you define those as like 20 or $25 million revenue streams, hopefully going forward. If you were successful give us an update on some of those initial.
<unk>, how much work that we've been able to accomplish kind of through this COVID-19 phase and are some of those incubated products.
Platforms, starting to show some some light at the end of the tunnel, where they they might actually kick in above and beyond our platform established business lines.
Yes, Jim it's a good question.
Just a couple of those.
Initiatives include our International program, our commercial program in our Navy program.
International.
Has moved very quickly we've been awarded a framework contract in UK to do waste treatment services over there.
As you may have seen in the March timeframe, we had an announcement that we have.
Put together an arrangement with Westinghouse.
Two two.
To consider building a new plant in the U K and support of <unk>.
A big project out of Italy.
Plant in U K U K.
Wood.
Support of the waste that would come out of that it'll be project, Italy project RFP came out.
Three weeks ago due in July likely be awarded by the end of the year.
That's a very large.
And the $40 million range.
And it's been going on for many years.
As anticipated would be two competitors us and another team so.
That program is making progress we continue to work with.
Different companies in Germany in Slovakia, and the UK for shipments to the U K.
National work as is going well, it's taken a little bit of a hold.
On all of the activity in the Ukraine.
But not significant things are still moving but.
The shortage of containers and some other things that have slowed things down a little bit in the international World What we see.
And to pick back up the commercial side as I mentioned is going very well two different fronts. There one is on the waste treatment side, which I mentioned our sales team.
It has been revised and we have a new leader who comes from from TVA very familiar with.
The commercial world.
He's done a great job in really launched that program in the last six months, that's going great. But in addition to that we have.
Been successful in getting involved in some of the commercial decommissioning work as well for the reactors that have recently been.
<unk> to be decommissioned.
Commercially.
So we're working with a couple of firms there and once moving ahead very quickly we're excited about where that can lead us.
And then the Navy as the other one is.
Our ship project is going very well at Norfolk Naval shipyard for assessing key action key they call it.
We've also just finished up.
<unk> of a building.
Excuse me the decommissioning of a building.
At the North Naval shipyard in that project ended in Q1, and got just an outstanding rating from our clients.
It will be very supportive in moving forward with similar type of work that those programs with the Navy are getting significant funding increases.
Very large backlog of decommissioning.
For vessels shifts and subs.
Port the ones they want to build.
Some of those the ones that have recently been announced several nuclear awards as well that will have a play in so.
We're seeing all of those move forward rapidly and.
Look forward to participating in that as a kind of a branch of our expansion.
And we have a number of other smaller initiatives.
We're also moving forward.
Our primary ones right now that we're seeing an impact on the summer hopefully.
Great Great and then one final kind of.
Difficult situation that we've encountered.
Faced with it and for.
There's folks that are promoting strictly everything get done under quote unquote, the gold standard vitrification and they have their own political interest in doing that we were attacked a while ago questioning our safety platform a little bit because of a couple of very minor.
Instances and issues. So just in terms of safety kind of reassures the management controls that are in place. If we learned anything from those experiences I am sure. We did what where do we stand in terms of safety. It seems to be the one thing out there that really.
We could do a better job of really emphasizing that were running one hell of a safe operation and and as far as Thats concerned going forward, we hold our head high. So that's my understanding and just kind of speak a little bit about where we stand on our safety platform to reassure fall.
Could.
These minor little situations happen with everyone and going forward, we have completely got our arms around those situations.
Yes.
James we're very sensitive to the fact that we will not be successful if we have safety issues.
Probably one of our biggest risks and when we look at on a daily basis.
Our management team, our two executive Vice Presidents one for <unk>.
For the treatment side or to grant an inland BARDA with services.
Been a significant amount of time with their teams revising and implementing and.
Addressing our safety culture. So far this year, just kind of give you a sense, we had one recordable the entire year and that's a really good record for the type of work. We're doing are way below national averages in a huge way.
<unk> had some.
A minor buyers in the past and put visit been taken care of.
And we've learned from those.
There's not been any releases thats the key part.
And.
We put it in a corrective actions to make sure they don't happen again.
And in both cases, there was a property damages either so those are important.
Learn from.
And we've trained constantly to make sure that we maintain our safety goals.
He is very strict safety standards.
When we bid things we have to be within the standards.
Our regulated with our regulators.
And our communities as well to make sure that we maintain safe operations, where we're located.
We're very proud of our safety program. We believe it can always be better it needs to be zero is our target for everything on an incidence rates and recordable.
And.
We've done very well over the last three years.
But we are improving all the time as well so.
Hopefully that answers your question James.
It does.
I think relative to.
The credit Suisse, you've had it was very lopsided and vary.
Yes.
It's coming from people that certainly have.
Different platforms that they're attempting to promote it isn't like it's coming from some independent evaluators as far as that's concerned.
I think it would be interesting to see a comparison.
Put up our safety record against other contractors have hanford, because I'm quite confident that incident numbers per man hour, we're probably are right, they're going toe to toe with not have an exemplary record. So any further work you can do to better illustrate really how safe and how seriously. We take this I think would pay.
Huge dividends going forward, especially with the <unk>.
Tens of billions of dollars of future opportunities at Hanford.
It seems to me to be one area, where we really need to continue to buckle down and differentiate ourselves positively with that I. Appreciate it I'm happy that we've seen the trough in revenues or looking forward.
Headed in the right direction and business mix is headed in the right direction in my assessment and I wish you all the best of luck and thank you alright. Thank you James.
I'd now like to turn the floor back to management for closing remarks.
Alright, I would like to thank everyone for participating on our first quarter conference call. We remain extremely confident in the outlook for our business and we appreciate the continued support of our shareholders and look forward to providing further updates.
As developments unfold. 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.
Okay.