Q2 2022 Perma-Fix Environmental Services Inc Earnings Call
waste incidental to reprocess report that's so basically the NRC approved of the weir document that was the next step of the program. This door opens the door for DIA, we'd submit the RD and D permit and ship the 2000 gallons hopefully before the end of this year, assuming they submit the report soon. Also we've seen continued support by Congress and local stakeholders associated with the grant technology.
as a low-cost and safe supplemental program to the ongoing BF law facility.
In fact, just last week,
the US GAO published a report in which they stated grouting of hand for tank waste could reduce certain risk by treating supplemental low activity waste to find what we could work to as law, which makes up over 90% of the overall tank inventory could be under 10% for a scope or context red.
Even with the operation of the new DF law facility, which is currently scheduled to begin in December of 23, this facility would only address about 60% of the entire law inventory.
when it's running at full capacity. That leaves nearly 20 million gallons remaining to be addressed within the tank farms at Hanford without a treatment alternative defined for it. As stated by the GAO in this report, the near-term reduction of the tank waste inventory through grouting could accelerate tank closures and save the government tens of billions of dollars while reducing the risk to the environment beginning today.
Permafix maintains these capabilities for grouting in our northwest facility, which is already permitted and outfitted to safely and componently grout up to 30,000 gallons per month with the ability to expand to well over a million gallons annually while dramatically reducing costs compared to the alternative vitrification process.
In terms of hiring and stability of our workforce, we've recently begun to realize impacts from the availability of trained technicians and labor that have been common during these unusual economic times. While we've been successful in minimizing these impacts the date, we do recognize the potential impacts to productivity in both our segments if the job market continues to tighten in the coming months. The job market continues to tighten in the coming months.
Turning back to our finances for a moment, despite the turnaround, I am obviously disappointed we didn't deliver a positive EBITDA for Q2. However, we believe that we're well positioned to continue our market expansion program. Adjusted EBITDA improved to a loss of $403,000 compared to a loss of $1.7 million in Q2 of 21 of 21 and a loss of 1.4 million in Q1 of 22.
As I stated in the past, the federal government has been much slower than commercial sector to resume normal operations. However these projects have not gone away, we believe we whether the worth of the storm for COVID-19 and we expect improved activity from federal government to procure new task orders in the future. So to wrap up, we witnessed solid year-to-year revenue growth in both our segments and saw a meaningful improvement in our gross margins. The federal government has begun announcing new projects.
that have been on hold and we've expected benefit from those improved budgets and carryover spending from the last year. We have projects ramping up and are bidding on increasing number of projects in our services segment. Within the treatment segment, both our waste receipts and backlog are improving all this votes well for a second half of the year in our performance goals. At the same time, we continue to invest in our capabilities and facilities. We've built a solid foundation for growth and a highly skilled infrastructure.
As a result, we believe we're in a great position to take advantage of the pen up demand that's out there. And as we continue to increase revenues, we expect the benefit from the predictable cash flows or a service to segment in high and marginal margins within our treatment segment.
On that, I'll now turn it over to Ben, who will discuss the financial results in more detail. Ben.
Thanks, Mark. I'll start with revenue. From our continuing operations in the second quarter, as you said, was 19.5 million compared to last year's second quarter of 16.1 million, an increase of 3.4 million or 20.5%. The revenue improvement team, both our operating segments as treatment was up at 687,000 primarily based on increased volume.
while the service segment increased by 2.6 million, primarily from increased project work on two large contracts that had not started at this time last year.
year to date through June 30th, our revenue is sitting lower than prior year by about 3.9 million or 9.9%. This drop in the revenue from the service, it comes from the service's segment as revenue was down 4.6 million from last year year to date. Lower revenue in the first quarter due to delays in the project startup of the contract is the main contributor for this short poll.
Our gross profit for the quarter was 2.9 million compared to 966,000 last year.
The improvement in the gross profit of approximately 1.9 million was primarily from increased revenue and project margin in the service of segment while the treatment segment increased modestly from higher revenue.
For six months ended June 30th, our gross profit is at 4.5 million compared to 3.3 million in last year.
Again, this increase entirely from the services segment where the improvement in the margins on the projects we're doing has more not set the impact of decreased revenue and the higher pig costs.
On the GNA side, S-GNA costs were 3.7 million compared to 3 million in the second quarter last year. The increase of 687,000 is primarily related to increased payroll, travel, audit fees and stock compensation.
For the six months ended June 30th, SGNA was 7.1 million compared to 6.2 million in the prior year and just like the quarter. SGNA was 7.2 million compared to 6.2 million in the prior year just like the quarter.
The biggest impact of this variance was higher payroll and travel, higher audit fees, higher stock option compensation and higher outside service compensation.
Our net loss attributed to common shareholders for the quarter was 1.4 million compared to last year's net income of 3 million.
However, note the second quarter of 2021 included the gain on the extinguishment of debt related to our to the company's PPP loan totaling 5.4 million, which was forgiven in June of 2021, excluding this gain the loss in the quarter compared to prior year was reduced or improved by 1 million.
Total basic loss per share for the quarter was 11 cents compared to income per share of 25 cents last year. And your today basic loss per share is at 21 cents compared to income per share of 16 cents per share of the 20-21 cents per share. 2021.
Our adjusted EBITDA from continuing operations for the quarter as defined in this morning's press release was a loss of 403,000 compared to a loss of 1.7 million last year. And on the year-to-date basis, adjusted EBITDA stands at 1.8 million compared to 2.2 million in 2021.
Cash on the balance sheet was 163,000 compared to 4.4 million at the end of 2021, reflecting the losses of the year, capital spending and debt maintenance.
Our current liabilities are down 3.4 million as a result of timing of vendor payments.
Our waste backlog at the end of 2022 was 7.2 million compared to 7.1 at year end and up from 6.7 last year.
And our total debt at the end of the quarter was 1.4 million excluding debt issuance costs which is primarily owed to our bank, PNC bank. This is a debt that is not only a debt that is not a debt that is not a debt that is primarily owed to our bank, PNC bank.
And finally, I'll discuss cash flow activity, cash used for the year. Cash used by continuing operations was 2.7 million. Cash used by our discontinued operations is 367,000.
cash use for investing in continuing operations, which is primarily capital spending is $733,000.
Cash used for financing was $444,000, and that's represented by monthly payments to our term loan of $222,000, and payments to finance related lease liabilities, and other debt cost $222,000.
With that, operator, I'll turn the call over to questions.
Ladies and Gentlemen, the floor is now open for questions. If you have any questions or comments, please press star 1 on your phone at this time.
We ask that while posing your question, you please pick up your handset if listening on speakerphone to provide optimum sound quality. We'll see it all while we pull for questions.
Thank you. Your first question is coming from Howard Brous of Wellington Shield. Sir, please pause your question.
Thank you. First of all, congratulations Mark, Lou, Ben. I want on a better quarter and on a significantly better visibility. Thank you. Thank you. Thank you.
on your announcement of earnings, and I'm quoting, quote, supported our ability to join teams in longer and to me larger strategic business. I'm quoting, quote, supported our ability to join teams in longer and to me larger strategic business.
That's one and secondly on page 15 of your deck.
You talk about participation in several teaming arrangements for large DOE procurement, including Integrated Tank Disposition Contract, which is the Hanford Contract.
Can you be a little bit more?
specific as to the opportunities that you see both in Hanford.
and other.
Well, thanks for the kind words, Howard. We appreciate your support. ITDC is a $45 billion contract for management of the tank farms.
at Hanford, as well as the start-up of DF Law a few years down the road. That procurement, you know, while it's in procurement space and we're waiting to hear on it, there's obviously a lot of sensitivities to it in regards to our team, which I can't disclose until after the announcement. But I can tell you this, is the department has been staying with their current schedule and they update it frequently.
that they'll be making announcement in late September early October . There were two bitters, we're one of two bitters. We're basically supporting core competencies on the contract and would like to think at least have a 50-50 chance based on the fact there's only two bitters that we know of. Obviously that's not an official statement. So that again is coming up quickly, hopefully.
by the call on Q3, we will have an announcement on that. The other big bid that we've been supporting is the OSMS DUFF6 contract that's for operations of the depleted uranium hexafluoride facilities at both Portsmouth, Kentucky and Fort Worth.
Portsmouth, Ohio and Paducah, Kentucky.
That's a $3 billion contract. Again, we're on a team for that, providing, again, similar services. And there's a little bit more competition on that. That won't be announced likely for a year. And those bids just went in a few days ago. Or we're bidding on a number of other ones that are not quite as large. There's no billions involved, but strategic that we're positioning for within DOE.
We are starting to see a nice little backlog of task orders come in, task order RFPs come in from the Corps of Engineers through our facility reduction contracts that I've talked about in the past. Those are finally starting moving. None of those bids have been submitted yet. They've been coming out for several weeks. The due dates keep getting pushed, which gets back to the earlier statements I made in regards to the procurement process has taken a long time. So...
We're optimistic, you know, on those big ones, that will hopefully get some information here about some wars in the next several quarters. We're going to talk about some wars in the next several quarters.
All right, let's talk about grouting. You would mention grouting in your comments, or in comments.
Obviously, the GAO report, they talk about grouting. The Senate comments talk about grouting. NRC talks about grouting. The scientists all talk about grouting.
So.
We know that grouting is acceptable. Grouting is a savings of anywhere, depending on which comment you read, of $20-40 billion over the life of it.
Talk with me about the opportunities in grouting besides the 2,000 gallons.
Fatesker and others.
Please.
Yeah, Howard.
It is very encouraging to see all those agencies you mentioned and a few others have also been met that made comments that have supported and encouraged DOE. In fact, I highly recommend it to DOE that they quote expeditiously pursue grouting. DOE has made DOE officials, both the headquarters and at Hanford, have all commented that they're very much in support of the TBI program that they believe that there's merit in this.
approach and will say repeatedly that they're moving forward with tbr
Having said that, they are in complete control. They control or the documents that have to be developed, which includes the final wear, the need for document, the EA and the RD&D report, more permit. And so these balls are all squarely in the DAW's court. If DAWY wants to move forward with grouting, they can't. And they have a strategy of...
pushing and working hard on the D.F. Law facility and getting it running without distraction. They've been vocal about that, but to answer your question specifically.
DOE has the ability to start shipping us for grouting. The waste that's generated from the TISCR system, which right now sits at approximately 300,000 gallons. That waste is in the tank, it's low-level waste. It's been declared low-level waste by several entities. We can receive that waste during tomorrow at 30,000 gallons a month. And DOE's position, which is just recently been published in one of the industry.
newsletters that their choice is to accumulate that fiscal waste on a continual basis until they have enough for operation of the...
the F law facility, which is about a million gallons. So that's the decision on that. They can start shipping to us as soon as they want to and obviously the 2000 gallons will come first as another, as the next level phase, but when Dewey decides they want to do that, they can't. So our position has been clear, and that is, we'll continue to.
Make sure to DOE and our congressional delegations that are involved here all understand the value of of grouting and what it means to the department and right now that decision is squarely in the departments.
purview to make that decision. And the cost savings that we've talked about a lot, which is about 10 times less, the reduced carbon footprint from emissions, and the schedule reduction and the risk to the environment, all considerations that we're hopeful the DOE will recognize the value in shipping some of that tisketer waste in the near term.
It's my understanding that they're going to accumulate the million gallons, but they also have money in this budget.
to treat.
Satisca Wases, how do you correct statement?
They have right now there's $10 million from the 2020 budget.
and seven million dollars from the twenty twenty two budget and might understand from the house or house or services committee this past year this more few months and few weeks ago ask the oe if they wanted more if they need more so this at least seventeen million allocated for for low level
waste offsite this physician program or TBI. That's available right now. So yes, one could certainly say, for $17 million available for support for treatment of this Tisca waste at this time.
And that's nothing to do with the 2023 EF fiscal budget. That's 20. Okay. That's already approved.
Let me go one more question. You talked about the EPA opening up, which is the Navajo Nation contract.
You were one of the winners. Have you started processing anything on that first contract? And secondly, have you heard anything about an additional potential contract availability? We've heard nothing about the next contract, but we have received the first task order, RFP, for the first mine.
You started processing anything on that first contract and secondly have you heard anything about an additional potential contract availability? I hope we've heard nothing about the next contract but we have received the first task or RFP for the first mine which... for the first mine which...
took a long time to get through the procurement cycle. There's lots of questions that went back and forth a bunch of times. That proposal has been submitted and it does include tool sorting, which is the technology we've been using for quite a while. And that will represent the first. And that will represent the first.
might be reclimated through that program and hopefully it will be the beginning of many. But we're still waiting to hear the announcement on that. We really had to dissipate on hearing on that before this call but we can safely say that we'll hear any day on that first task.
through that program and hopefully it will be the beginning of many. But we're still waiting to hear the announcement on that. We really had to dissipate on hearing on that before this call, but we can safely say that we'll hear any day on that first task or on the award of the first one. On the award of the first one.
All right, thank you. Again, congratulations on the better quarter and congratulations on the better visibility. That's all I have. Thank you. Thank you.
Thank you. Our next question is coming from David Wright of Henry Investment Trust. Sir, please pose your question.
Hi, good morning. Has work started on the USS McKee project?
Yes, David has. That project started in beginning of Q1 and it went through an extraordinarily long transition phase due to the fact that there was a lot of training required of the workforce that was brand new. This is the first time this type of work has been commercialized at the Norfolk Naval Shipyard. So the workforce had to go through a number of different.
training regiments to do the work. That's all been done. They've been through all the initial characterization and got to full operations in mid-July. So it's been running.
Through that through four month transition period and mobilization period, we've got the equivalent mobilized and a lot of kind of thing and they're often running and in general any good revenue now beginning in mid July .
Okay, so that's just very recent. Is it too soon to tell if your original cost estimate?
and the restultant profitability from that job.
are going to hold up given I guess that it's fixed price and given that the cost of everything is up.
It is too early to tell. We do have a number of changes that we're talking in the Navy about, so it's definitely too early to tell how it's performing. It started off really good and then a few changes occurred. We're just working with the Navy right now to look at those changes approved.
Okay, and then Mark, my other question is kind of a pretty high altitude one.
Historically, is the DOE contracting process
Always this long or does the length of it fluctuate as administrations change.
It does change the administration, but I will say David that David has been pretty well on the...
on several of the big contracts, particularly
Tank closed, for example. It was delayed three years because it was protested. Y-12 here in Oak Ridge. I was going through the same type of delays. But once the RFP gets submitted, they typically do pretty well. But there is a lot of longer delays based on this protest and those types of issues that we've seen in recent decades. Where the real bottleneck is coming is on the next level down from the Tier I. So the task work contracts.
And that's the reason why there's such a large carryover from each of the sites is because the primes are just not doing some contracts. And it's just directly related to slower procurement, less field work because a lot of people are working from home within the government in this slower procurement cycles across the board. Not just the UEDU as well as EPA, every government agency. And you don't hear much about it, that's what's so frustrating is.
covers like ours and we keep in touch with all of our competitors go all the same thing or wait for some contracts to come out you know and knowing that these budget is just piling up in progress in the field is not happening
So there's not much we can do besides wait.
Okay, well I appreciate the summary on that. Congratulations on your continued progress and thank you for taking my questions. Alright, thanks David.
Yep.
Thank you. Our next question is coming from Anthony Harpo who is a private investor. Sir, please pose your question. Sir, please pose your question. Sir, please pose your question. Sir, please pose your
Hey Mark, how are you? Oh we're good Anthony, how are you doing?
Good. So can you give us a sense of what capacity utilization rates have looked like on the treatment side of your business, where you expect them to go in the back half of the year?
Given what look like, we're given what looks like a market improvement in waste receipts. And if you are expecting higher fixed cost absorption in the second half, what should we expect in terms of gross margin flow through? Thanks.
Yeah, we are seeing, as we mentioned, in several different ways, a nice increase in backlog and receipts. We beat our goal this quarter by about 10%. Our goal is pretty high. And it's somewhat continuing. It was a little slow over the 4th of July week, but it's generally continuing on a similar trajectory for receipts. And –
as far as productivity goes, we've got a team of folks at each of our sites and they're working full time, we're chugging away, so it's difficult to address productivity because we have so many different types of waste streams. Some are real small, some are large, and I can't put a number on it to say we're at 60% of productivity, but we could add a lot more, work a lot more overtime, and increase that if the receipts came in.
So having said that, I'd probably say we're probably, it probably are, if I had to put a guess out there, 50 to 60 percent of our total capacity. And as I mentioned about the labor, we are certain to see some headwinds in the Northwest plant, specifically as the Hanford site, which is an enormous site, you know, 10,000 people who went on a prison with a hiring campaign.
We lost some folks, we had to replace them. We've been able to replace them, but they're a little bit less productive as far as throughput goes. And we're not sure what that impact's gonna be. We think we have a handle on it and we'll be okay. But there is a sensitivity there that I thought was worth mentioning. And we'll get through that as our employees get more productive and we add in addition to those.
We do see it increasing or getting better. And as I mentioned before, when the government starts to spend their backlog or their carryover, that almost certainly generates more waste.
from projects and provides more opportunity. We know about a lot of those opportunities, others we don't know about that will just show up. But the fact that we do know about a lot and we haven't targeted for the next several quarters, we do expect to see a kind of continued growth in the future.
Okay, Mark. Thank you. Thank you, Isaac.
Thank you. Our next question is coming from Talk Dickinson. It was a private vest.
Our next question is coming from Tuck Dickinson, who is a private investor. Sir, please pose your question.
Good morning. One point of just said.
Sort of ongoing frustration, I suppose, and I'm sure you feel it too, is we've been hearing about TBI Phase II and Navajo Nation, various questions on the conference call. It seems like for about three years now, and in this release this morning, there's the comment made that hopefully, hopefully, we see TBI Phase II start to track before the end of the year, whereas in the last conference call, you were saying the end of the third quarter.
what your debt capacity is and I also note that you know you burn through almost
or over 5 million of PPP money and 6 million, close to 6 million of an offering in October , cash is gone. And I know you funded receivables sequentially in the last quarter, but what is your debt capacity and what is the ongoing strategy for raising funds to pay for the market when it starts to pick up?
I'll let Ben answer the debt capacity in a second, but just we share your concern on the TBI. It's equally frustrating to…
to see the endorsements by the National Academy of Sciences and
the GAO and through the FFRDC we mentioned last quarter, and numerous other agencies, as Howard Brody had just mentioned.
We're just hopeful that DOE will revisit their strategy and see the value in moving forward with this. That's really where it lies. Yep.
significant support from our congressional delegations. We just don't know what else to do. We brief the OE numerous times. They're very aware of what the capability is. It's just all about their overall strategy for those tanks. And hopefully that'll begin to loosen up and we won't be using the word hopeful anymore. And we won't be using the word hopeful anymore.
But with that, I'll turn it over to Ben to address the rest of your questions.
Yes, and of course, Chuck Cash is always the most visible thing on the balance sheet and the indicator of our success. We, the recent past quarters have certainly had an impact, but our working capital remains positive. We, there is a point in time in our availability on our revolver remains healthy. And it did over four and a half, almost five million.
And our debt is low, as you mentioned. So if you look at the cash flow and you'll see it, when we file, a big chunk of that was paying down vendetta. And if you look at the cash flow and you'll see it,
and that's, you know, it's a timing issue. We've got certain receivables outstanding. So cash kind of fluctuates given this time. Of course, it has everybody's attention at all times and we're constantly forecasting out. And of course, with the low debt load, we have financing options available to us if we need them. And we're, you know, obviously,
and communicate those opportunities at all times to make sure we stay liquid. But very good observation.
As regards treatment revenues, I mean, there's something for everybody like in your commentary, I think today, in the positive side, the carryover spending, the backlogs up a little bit, waist receipts up a little bit, but it just feels like treatment revenues cannot get out from behind the eight ball. And my question is, is there any chance that the government has really, you know, has really,
sort of adopting a new strategy that would sort of leave a Steady run rate of treatment revenues say just either side of 10 million a quarter that it never really ramps up You know excluding hampered obviously which would be a big boost of echo sure I mean just the base revenues Seem to run now in that eight nine million Range you know sort of best case recently maybe you get up to ten million But it's just a feeling that that thing just doesn't move What's your sense on that I know?
You mentioned about, you know, there is some potential risk here in terms of when the government actually starts to spend money, even though it looks like they really need to spend the money. That doesn't necessarily translate into a projection of when they, when and if they start doing it, they may change strategy.
Yeah, we share your concern talking regards to that.
instability and quarterly revenue and just a projection that you could use that's sustainable. And we look at that for several years and we put together a strategy for waste sales to do everything we can to avoid that risk from, particularly from DOE. And that's been a direct result of our international expansion. We've expanded into commercial industry, we're getting our nice.
steady stream of commercial waste now. We've gotten well over a million dollars in international waste in the last 18 months, which was all new. It's very high margin. Everybody's happy with it. We've been able to treat it and send it back to their original countries for long-term storage. It's significantly, like 90% reduction in volume. And we're getting waste from other commercial industries, like the oil and gas industry and the pharmaceutical industries.
commercial clients over what they're originally doing. And it's been working. So COVID has had an impact on it. You know, and it's very difficult to say, hey, last two or three years, this is what's happened, because everything's been upended in regards to productivity across the board. But our goal is to do exactly what you just said, and that is to get the 10 million a quarter and then go up from there. And I think with all this new.
market expansion, particularly international and commercial, that we can get there and not arise so much on the lumpiness of the federal government.
And I'll just add to that that if we get 10 per quarter, we're going to do just fine. The problems of the past year and a half have been because it's been running more like half of that. And so this past quarter was the first quarter in probably two years that we saw a number up that high, I think was up about nine and a half million. And that's a real positive sign.
Thank you. Our next question is coming from Ross Taylor with ARS Investment Partners. Please pause your question.
Thank you and gentlemen many of my questions have actually already been answered and I would like to join the congratulations and thanks for the diversification efforts you're making. Can you give us an idea when you think and when you see yourself able to get to that kind of 10 million dollars a quarter on a one right?
Sustainability.
Well, thanks for the kind of words Ross. Yeah, the bottom line is, it's really difficult to project that. But, so it would be total speculation to say when we'll get to $10 million. It's certainly, as we said, at 9.5 million in sales. It's certainly, as we said, at 9.5 million in sales.
receipts last quarter, we're starting to see, as I mentioned, last several quarters, our RFPs that we're getting for waste treatment continue to keep the same trajectory and they're going up every quarter and we had a really good June overall in RFPs and receipts. With a little bit of slowdown in the first week of July and getting back on track here now for the latter part of July , we would hope that we'd be at that same level.
this quarter and the next, which are typically are two best quarters. So I think we're on a track, but I can't commit to when we're going to actually get to the 10 million overall. As long as we see these receipts coming in, we'll catch up on the productivity side, you know, shortly, that thereafter. Look at what they're in. Verantwort? How are they? I have them after. after.
So basically the pieces are in place to get there and it doesn't take a lot to push you over the top on that. You're pretty close so we shouldn't be surprised that you could achieve that as we roll into coming quarters. If everything, if the procurement cycle and DOE or the procurement cycle and the backlog spending would get back to normal, we should be confident that we should be able to get in there to get to that level in the next several quarters.
Okay, and what do you think the magic thinking is on the idea of waiting to get a million gallons?
Right now you're DOE.
As I've said before, they're trying to get this very, very complicated plant started. They're putting all the resources on this plant, this DF law plant. They're trying to keep, to make sure the regulators are on board with them and the regulators are supportive. It's an extremely complicated plant, one of the most complicated plants that DOE's had in many, many years. And so they're putting all their focus on that and making sure that it gets done..
I don't know when they're going to start to recognize.
know when they're going to start to recognize, hey, this can be done in parallel without a distraction.
I met with some people this week, I was at Hanford all week, just got back last night, and the Tisker, which is a hugely successful program, is pulling waste out of the tanks, providing initial treatment to strip out the cesium and iodine, and it's a very low level, low activity water. And once that million gallons gets reached, then DEEWI's going to be faced with a decision of do we shut the Tisker down or keep it going.
And that's a pivot point that one would think that you'd want to keep it operating and
begin to the shift the waste off site and i don't know when that's going to be because it it's going to be up and down all the time uh... i don't know what their plans are but you want to think that the opportunity to start treating waste off site and disposing of a and actually closing tanks uh... would be um... something that the leeward uh... view as it is a big accomplishment uh... in addition to getting the deflaw plan operation on we've always said that we've always viewed tbi as a supplement to the deflaw
because we know the investment that the government put into that plant, but they can certainly start moving some waste off site tomorrow if they wanted to.
So this is basically just a bureaucratic situation as opposed to there's no technical reasons why they need to hold off. It's just this is how they're thinking about it. Okay. Can you go into a little bit more depth in the opportunities and coming in the balance of the year with regard to SHIPD commissioning?
Yeah, the ship decommissioning is not as far as the other, you know, I mentioned before and there's a GAO report that came out that there's 48 ships to be decommissioned in the next 48 months or something like that. I think there's a number of those, about 25% of those were nuclear. Right now there's no movement, there's limited movement on what those ships are, which ones they are and how they're going to be procured. And
I can't tell you which one's next. I was told very informally that Sam Rayburn was next in line. We know that the Nimitz and the Enterprise aircraft carriers are in the 25 timeframe, 26 were gonna be procured in 24. But we really, we have very little clarity on which ships are coming when. And...
what's going to happen next. So I don't know if it's a matter of funding or just lack of an intel or lack of, or there's no planning or just not advertised, but I can't, I'm afraid I can't give you any details that I know of on specifics on what's coming next.
what's going to happen next. So I don't know if it's a matter of funding or just lack of an intel or lack of more, there's no planning or just not advertised, but I can't, I'm afraid I can't give you any details. I know of on specifics on what's coming next, but...
There's certainly stacked up within a navy that happened in the next four years.
Okay, now you've got a labor force now in Norfolk that you've trained up that, you know, are getting up to speed and the like. Does the Navy appreciate that in this kind of environment the most inefficient thing to do is to let you lose that labor force through lack of work? I sure hope so, Ross. We're trying to make sure they know that so that we can just move them on to the next shift. That is absolutely our goal.....
That's why performance on this ship is so important. It's a very complicated project to basically clean out about 140 rooms that are contaminated and some tanks while you're there in the hustle and bustle of Norfolk Naval Shipyard. And we're rolling. We're not behind schedule. And things are, at least by much that we know of, and it seems to be going pretty well relationship-wise. So as long as we continue operations.
without any any think any hiccups we're confident that the government understand hey here's a proven group of people that have been trained and demonstrated performance so hopefully that'll continue. we'll continue. we'll continue. we'll continue.
I do have to say that if I ever start to think government actually understands how to do things, I just have to listen to one of your calls. It reminds me that I shouldn't smoke opium at work or something. Okay. That's really bad. I think that you guys, you're executing as well as you can. I appreciate the fact you brought in the reach of the company more into commercial because in the end, you advocate ability. It makes sense to use it. And if it turns out that down the road somewhere, you've got enough commercial business that.
you know, the government business ends up being something that you pick up when you feel like it. That would be a wonderful situation.
So, thank you.
Thank you. Our next question is coming from Ryan Hamilton with Morgan Dempsey Capitol Management. Please pose your question.
Good morning everyone. Thanks for taking my call. I would also like to echo the congratulations on the diversification and the progress being made.
Most of my questions have been answered, but the one that I'm curious on, I think I answered this almost every quarter, is could you walk us through what you are seeing as far as bidding activity goes, number of your competitors that are bidding, the size of the projects, and just the overall number and how it compares to maybe the last couple of years? Yeah, that's a lot of data, Reagan, but let me take a stab at it. Both segments track separately.
on the treatment segment. Or as I mentioned earlier, our number of RFPs every month continues to go up from January , I think I addressed a specific number on last call, but it continues to go up in the value of those bits going up as well, and which is resulted in what I just mentioned at the 9.5 million receipts last quarter. So I have to direct result of that.
So we encourage by that as far as
it's very, very difficult to track and define RFPs that are coming up on the waste treatment side because they're typically very quick requests for quotes that you provide and you don't always know what's coming until they've already generated it. So we don't track that the same way we do on the services. On the services side, when you have projects and typically complex requests for proposals, RFPs that are coming out, you can track those. And we have right now literally about.
500 million in opportunities in the services side between task orders and projects that we know are coming out from all government agencies that were either provided initial responses to or their schedule come out. So very optimistic about those and um
That's by far at 500 and some million more than we've ever had on our hot list to come out, and again, that's about two quarters projections, so 500 million over the next two, maybe two to three quarters that we expect to come out. So really good backlog on opportunities on the services side. On the treatment side, it's difficult to define, but we do see that continued optimism due to just...
due to the fact that it's wrapped up in procurement, we're just not seeing the RFPs end up in our office as fast as we'd like.
No, that's great. And what are you seeing as far as...
A number of companies betting in addition with you on a lot of these contracts. You know it's it's uh it really varies depending on the complexity of the work on the Holly Complexerated Allogical Work is very few two to three.
which has been very encouraging. We like the super complicated.
complex type of work because we have the team of health physicists that are really the top of the industry and recognizes being so. So those guys are certified to health physicists that are new engineers that know how to put together approaches that reduce risk and it's not just low cost, not something down and take it away. So those are the ones that will have a higher wind probability on and then lower.
or competition. On some of the other ones we're doing for the core of engineers, which is removal of buildings, but not quite as complex, will have as many as six or eight competitors. That's been pretty stable, number overall. And on the waste treatments out of the house, we typically have one or two competitors that have a different offering or different solution, not necessarily treatment, either disposal or something else. And so it's a much less competition on the treatment of the house. OK, great. Enough.
a lot of this activity that you are bidding on, these projects, are you, are most of them
cost costs or they fixed as far as what you're what you're gonna recapture
You know, we have bid, if you look back at our history, most of our contracts in the last sort of up until this past year have been TNM cost reimbursable. Most of the ones on our hot list that I mentioned are 500 million, I'd probably say the majority are gonna be fixed price task or types of work. We do have, as I mentioned, those two large ones, Howard's question in the beginning for tank closure and so.
the operations of the DEF-6 plants. Those are certainly cost-reimbursable with some fixed unit rates, the cost-plast, in other words, with fixed unit rates on some...
some components of it. And so some of the larger ones will be cost plus NTNM and some of the small to mid-sized ones will be fixed priced. So it really ranges, but we're seeing pretty much a mixture of all of it.
Well, I appreciate the color and keep up the good work. Thanks a lot for your time.
well i appreciate the color keep up the good work thanks a lot for your time thanks very
Thank you. Our next question is coming from Michael Prouting of 10K Capital. Please pose your question.
Yeah, good morning. I appreciate the call and all the detail that you've been able to share with us. One question I had for indices who are less than really with government contracting. And I don't want to put you on the record here as being critical of people or an agency that you need to keep on your side. But for investors less than really with government contracting, I wonder if you could just sketch for a couple of things. One is.
I guess the level of decision makers within the DOE that need to be making decisions.
You know like is it Multiple levels or you know just try to characterize that better for us, and then secondly I'm just curious you know say if you put yourself in the shoes of those people at one or multiple levels Just you know from their perspective. What may be delaying Whatever decisions they need to make is it information that they were lacking? tracking Is it the fact that?
Engineers need to like dot all the highs and cross-alerties add in some niam. Is it career question? Is it that people are retiring and being replaced? Is it that they're just too busy with other projects? Or maybe if you can just characterize both of those issues thanks?
Yeah, it's really difficult to address.
the procurement cycles and why it's taking so long and these things. I think of the combination of everything you said, including working from home, including employees retiring, and hiring new people and those types of things. And just the fact that it's backed up, you know, COVID had a big impact the first year, particularly, and it just hasn't loosened up since then. So.
I can't really put my finger on one or two things. If you ask a government official, they'd probably tell you that, hey, it's the prime first-tier contractors that aren't putting out task orders either, on the DOE side particularly. On DOD, which is, they'll typically come out with task orders from the government. They're scattered around. I don't know, I really don't know what all the reasons are.
And you're right, I do have to be sensitive to being critical of our clients because there's never any value in that. So hopefully these comments will be taken out of context along the way here. But I don't think many folks would argue that across the industry that the procurement cycle has just been much slower than we're used to in the last several years as compared to prior years. And I do have to believe it's all a legacy impact from COVID to answer your question.
Okay, I appreciate the color, thanks. All right, thanks.
Sir, there appear to be no further questions in the queue. Do you have any closing comments you'd like to finish with?
I know I just would like to thank everyone for participating in our second quarter conference call. We remain extremely confident on the outlook of our business and we appreciate the continued support of our shareholders and look forward to providing further updates and developments as they unfold through the quarter. Thank you.
Thank you ladies and gentlemen. This does conclude today's conference call. You may disconnect your lines at this time and have a wonderful day. Thank you for your participation.
Please hold. An operator will be with you momentarily. Conference Center, may I have your conference code? I second. Just a moment please. Are you trying to get into Permafix? Yes, right. The code is loading and I can't see you. Okay, what's your first and last name? David Brown. Okay, Mr. Brown, what company do you work with? IERA. A-I-E-R-A. A-I-E-R-A. All right, getting you in there now. Thank you. Thank you.