Q4 2022 Perma-Fix Environmental Services Inc Earnings Call
Good day, everyone and welcome to the Perma fix fiscal 2022 year end earnings 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.
As yours.
Thank you, Matt Good morning, everyone and welcome to Perma fix environmental Services' fourth quarter and year end 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 fourth.
Quarter of 2022 financial results, which is also posted on the company's website do 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 price.
But Securities 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 companys.
Filings with U S 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, today's call 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 on our website I'd now like to turn the call over to marked up. Please go ahead Marc.
Alright, Thanks, David and good morning, everyone.
2022 was a transformative year as we build a solid foundation for growth in the upcoming year and we're finally seeing a return to normalization and the momentum we had prior to the pandemic the weakness in revenue we experienced in 2022 was due to the lingering effect of the COVID-19 pandemic on delaying some of the.
Projects and the services and the treatment segments. Nevertheless, we achieved improved 58% increase in gross profit in the fourth quarter, which was due to improved profitability in the services projects compared to last year. In addition.
Total gross profit margins increased from roughly 7% to 12%.
While 2022 was a challenging year, we believe we're back on the growth trajectory, primarily due to the recent improvement we've seen in our treatment segment within our treatment segment, we've experienced a steady improvement in waste receipts, specifically, our average receipts per quarter steadily returned to pre pandemic levels.
Over the last nine months of the year.
This is best reflected in our backlog, which was $9 2 million at year end was significantly higher than prior quarters. This was a result of increased waste shipments from D. A week as well as our efforts to broaden our client base into the commercial utility sector as well as the oil and gas.
And other industrial markets.
To note that the fourth quarter of 2022 was negatively impacted by child's associated with labor issues.
High attrition rates due to the department of energy hiring campaigns at several other sites, which are near our facilities.
Well as supply chain impacts.
From availability of waste processed materials, such as grout mix.
We also experienced severe weather impacts due to record low temperatures in the Tri cities area of Washington. However, these issues have begun to subside in the first quarter 2022 excuse me four score of 2023.
With the hiring I think location realizing stability.
Impaired to the last two quarters.
<unk>.
Because the growth of our base business, where we're rapidly advancing several initiatives that we believe have the potential to significantly enhance our revenues and our long term backlog for instance, we have realized two important steps forward with the department of energy in pursuit of our Hanford initiatives.
That holds significant potential growth for many years. These initiatives include the January 31st Amendment of the record of decision or Rod for the final tank closure and waste management I guess that was originally.
In 2013 as well as an announcement this past Friday for the notice of availability for the waste incidental to reprocessing, what we called a we're a report which is in support of the Testbed initiative, a demonstration won't call Tbi.
First I'll touch base on the first amendment the amendment to the Rod offer the direct feed low activity, which we will refer to as the ethanol facility.
Supports the secondary waste program also.
At the Hanford site.
In Washington represents a sizable opportunity over the next decade, and while we can't.
Provide too many specifics at this time suffice to say that perfect will provide the recommended treatment solutions for radar waste streams are produced by the default program once it gets operational.
This waste.
Estimated by D. We to be over 8000 cubic meters annually.
We will be begin to be received at perma fix facilities.
Hot startup of the plant currently projected to begin.
In the late 2024 time frame.
Put this in perspective, this volume of waste would more than double the production of all of our plants combined on an annual basis.
And given the fixed cost nature of our business that's.
This could result in very significant cash flows over the next 10 year period.
The second step forward as I mentioned is the final.
Waste incidental to reprocessing or weird document published this week by deal we would state that the program, but the proposed.
Tbi program would demonstrate a supplemental.
LOL treatment approach.
The weird went on to state that based on the final evaluation, we determined that the pretreated and solidified waste from the tanks is incidental to reprocessing of spent nuclear fuel.
Not high level waste.
And as to manage as low level waste.
This progress opens the door for <unk> to work with the Washington State Department of ecology, which is our regulator.
<unk> and approve the regulatory documents for shipment of the phase II program.
This includes our grouting disposal of 2000 gallon tank waste currently anticipated to be shipped before the end of the year.
These developments underscore the important role that permit.
FX will be playing in the long term mission for hand for closure in support of both the Dia floor Vitrification program.
As well as the supplemental take waste treatment program that will likely include commercial grouting.
As discussed last quarter. The Tbi initiative holds the potential to save tens of billions of dollars taxpayer dollars as well as eliminate significant carbon emissions and reduce schedules for hanford cleanup.
Perfect maintains these capabilities today at our perma fix northwest facility, which is permitted and outfitted to safely and completely graph up to 30000 gallons a month with the ability to expand well over 1 billion gallons annually, while dramatically reducing cost compared to vitrification.
Within our services segments, we've reached full operational status with several projects that have been delayed due to the impact of the pandemic.
We secured important new projects that we expect will begin in the second quarter of 2023.
As the impacts from the pandemic continue to fade. The federal government has begun to announce new projects that have been on hold these procurement cycles are moving forward to support the increased funding levels, which we anticipate will result in a number of additional opportunities to be awarded in the coming quarters as a result.
We have now over $200 million of defined procurement opportunity is targeted to be released in the next few quarters. In addition, we continue to await some very large potential strategic awards by the deal. We some of these projects are quite considerable size.
If selected Baidu, we would represent.
Substantial increases in sustainable revenue to align with our core competencies.
Some of these upcoming deal. We project announcements include a $45 billion of Hanford integrated tank disposition contract and the $3 billion of operation that was like mission support project.
Are both likely to be awarded in the second quarter.
If we are successful we would participate as a team member on these large deal we procurements, both of which completely align with our strengths and innovations and radiological protection in the waste management.
Also close to announcement.
Another project that we referred to in past calls.
Through the joint Research Council and Italy.
Which this project would support our expansion program in Europe and open the door for deployment of our treatment technologies.
And these are rapidly growing markets in Europe .
We've also received several.
Excuse me strategic awards.
Yeah.
Over the past few months.
Specifically associated with a sole source technology.
Including announcement last week that our team was awarded the first abandoned uranium mine closure task order.
In support of the new EPA being the main program.
While this initial task order represents only about $1 million revenue for 2023, we're anticipating rapid expansion of the program. Following the deployment of our technology into the first site, which is located in the northeast Arizona region.
Awards have also been realized several D relocations that will support backlog generation in 'twenty two 'twenty. Three in addition, our weapons for several upcoming procurement initiatives for the U S Department of engineered Korver engineers.
The us Navy and several other deal we cite projects are they're supposed to be procured in the next few quarters.
As a result of these factors its clear to us that there is significant pent up demand and that we expect the benefit from approve budgets and carryover spending from last year as a result.
We maintain an optimistic view that 2023 will see a significant improvement over 2022 as I mentioned earlier, we're already seeing signs of that improvement.
Turning back to our financials for a moment adjusted EBITDA.
For Q4, 2022 improved to a loss of <unk> one.
$1 billion.
Compared to a loss of $1 seven in the prior year.
Our Q4 2021 aside from our expectation of solid revenue growth, having a positive impact on our EBIT going forward. We continue to focus on reduction of non billable indirect operating costs as well as SG&A expenses as a result, we anticipate a meaningful improvement in profitability.
And cash flow going forward at.
At the same time, we continue to invest in our capabilities into our facilities. We built a solid foundation for growth and highly scalable infrastructure. As a result, we believe we're in a great position to take advantage of the pent up demand that we've mentioned.
We continue to increase revenues, we expect to benefit from the predictable cash flows within our services segment and high incremental margins from our treatment segment. Overall, we remain confident in our ability to achieve the growth and stability, we experienced prior to the pandemic, given our increasing backlog and solid pipeline of nuclear services projects in <unk>.
Several potentially transformative events, we mentioned that.
That could materialize in the next coming months and years.
On that note I'll now turn it over to Ben who will discuss our financial results in a little more detail Ben.
Thank you Mark.
Let's start with revenue our total revenue for the from continuing operations for the quarter was $16 $8 million.
Last year's fourth quarter was $17 one.
Decrease of 359000 or two 1%.
The decrease was primarily due to a drop in our treatment segment revenue of about $2 90.
Despite a good quarter on the waste receipt side processing as you mentioned was impacted by supply chain labor and inclement weather.
These delays volume did.
Have a positive impact on revenue.
But there was a offset from lower average pricing in that.
Not uncommon, it's just related to waste mix.
In the service segment revenue was down slightly by 69000, and Thats really just timing of on site projects.
For 2020 for the year ended 2022, our revenue was $70 6 million compared to $72 2 million.
Last year.
In the treatment segment revenue increased slightly by 366000 due to higher waste volume.
On the service segment revenue was down by $2 million, primarily from the slow start in the first quarter.
Two of our larger projects, but the.
Productivity ramped up production in Q2 through four.
On the gross profit side gross profit for the quarter was $2 million.
Compared to $1 3 million in 2021.
The increase in gross profit of approximately 741000 was from the services segment, which.
Was the result of improved profitability of our current projects.
Worked on which <unk>.
Included in our 19 eight reduction in project related variable costs. This improvement was offset by a reduction in gross profit from the treatment segment.
Due to the processing delays, we discussed previously as well as an increase in fixed expenses at the plants related to labor and utilities.
For the year ended 2022, the gross profit was $9 6 million compared to $6 $8 million in 'twenty. One this improvement in gross profit came from the services segment, where again the improved project profitability contributed $4 7 million and <unk>.
<unk> gross profit and that was offset by a small decrease in the gross profit.
From lower revenue.
This increase in gross profit in the service segment was offset by the decrease in treatment segment again from lower revenue and waste mix are lower margin mix of waste and the increased facility costs.
Our total G&A for the quarter was $3 6 million compared to $3 3 million in the fourth quarter last year.
SG&A for the full year was $14 7 million compared to $12 8 million.
2021.
SG&A expenses for the quarter were higher as marketing expenses were up from increased payroll tradeshow expenses and commissions earned.
Admin expenses for the quarter were higher.
Higher payroll benefits audit fees.
Right off of patents.
And stock option compensation as well as perma fix medical costs, which are no longer absorbed by our previous medical segment.
Similar to the quarter, our G&A costs were up for the year in marketing from payroll and trade show and travel.
Admin expenses were higher due to audit outside services.
And increased payroll costs.
Longer absorbed by the medical segment.
Our net loss attributable to common shareholders for the quarter was $1 7 million compared to last year's net loss of $2 5 million.
For the year ended 12 31.
2022, our net loss attributable to common shareholders was $3 8 million.
<unk> to net income of 835000 in prior year.
Our basic and diluted net loss per share for the quarter was 13 <unk> compared to.
Loss of 19% in the prior year loss per share for the year ended December 31 was <unk> 29 per share compared to income of <unk> seven in the prior year.
Adjusted EBITDA from continuing operations as we defined in this morning's press release was a loss of $1 million compared to a loss of $1 7 million last year.
For the year ended 2022, adjusted EBITDA was a loss of $3 3 million compared to a loss of $4 4 million in 'twenty one.
Turning to the balance sheets are cash on the balance sheet was $1 9 million compared to 4.4 million at year end, reflecting the losses for the year.
Our accounts receivable were down $2 million, reflecting improved collections, primarily in the service segment.
Our unbilled receivables were down $2 9 million, reflecting increased billing and a large project that was nearing completion.
Other assets were up $1 1 million.
Partially due to the employment retention credit of $2 million, which is still outstanding.
Our current liabilities were down $3 2 million from payment of outstanding payables and the reduction in unearned revenue of approximately 767.
As of December 30 as of December 2022, our treatment backlog sits at $9 2 million up from $7 1 million. Both at year end 2021 in September of 2022.
Our total debt for the.
Quarter end was $1 million.
Excluding debt issuance costs, which is mostly owe to PNC bank.
Finally on the cash flow side for 2022, our cash provided by continuing operations.
And at 164000 cash used by discontinued operations was 717000.
Cash used for investing.
Continuing operations was 997000, primarily capital related.
And cash used for financing was 921000.
Presenting payments.
And capital line of 502000 and.
And payments.
Related to finance lease liabilities and other debt.
Approximately 419000.
With that operator, I'll now turn the call over to questions.
Certainly at this time, we'll be conducting a question and answer session. If you have any questions or comments. Please press star one on your phone at this time we.
We do ask that while posing a question. Please pickup your handset if you're listening on speaker phone to provide optimum sound quality.
Once again, if you have any questions or comments. Please press star one on your phone.
Your first question is coming from Howard browse from Wellington Shields. Your line is live.
Thank you.
<unk> Hope you and your families are doing well.
Hey, good morning Howard.
So first things first.
For full disclosure.
I need to say that I was the investment in your equity raise.
Point 2 million September 2021.
In addition members of my immediate family owned shares.
Thanks.
So let me get to a couple of important questions.
The appointment of energy just published various comments relating to D.
T F law.
The record of decision specifically mentions and only mentioned takes.
Northwest.
Still led to treat which seems to be enormous quantities of secondary wins.
Can you talk about 8300 cubic meters is solid and liquid waste annually.
Which if I converted that to liquid which.
I have questions about its about $2 2 million gallons.
Oh, it's liquid waste.
18 cubic meters.
Mid level waste in Sweden.
Meters have been level waste.
Because it's a combination of liquids and solids could you give me a sense of what the.
Annual revenues the permits could be starting if your operational in 2025.
As an example.
Sure Howard, Yes, you really can't do a real conversion of those quantities because it's.
A lot of that 83 to 100.
Cubic meters as debris or other solid wastes like PPE or personal protective equipment.
Other things that get containment is kind of thing so that's difficult to do that.
We looked at the <unk>.
Various types of waste to be generated compared to what we do now and as I've mentioned.
Before in the script, it's about double our total input now for waste all of our plants combined.
And but we do have I do want to mention we do have a contract with the take contractor there will likely be no weighted.
It's like it's an MSA Master services agreement type of contract.
And it's got rates and we've talked to them about rates.
Applying our rates to the volumes of each individual waste stream.
It looks to be about an annual revenue.
<unk> $65 million to $75 million a year.
So it is a significant increase in revenue for that plan in the company overall.
That $65 million to $75 million could vary depending on how much of which waste stream changes along the way.
And it's also very dependent on the rate new glad content that was received.
The different charges for different types of levels of radar activity.
And those types of things, but generally.
That plant is running the <unk> plant is running at full capacity, which is right now understand the design capacity for the plan is to treat a million gallons a year when it gets to that level then.
I think we will be able to expect over 8000 cubic meters a year.
And basically this would be at your normalized treatment margins is that a correct statement.
Most generally yes.
Theres some inflation, obviously, it's going to have to occur along the way.
The natural gas prices and the Tri cities area have gone up dramatically compared to the rest of the country.
And things like that and labor issues, but but yes generally.
The margins will be what we make now on.
This treatment as a whole.
Well you need to hire any additional personnel. So this specific one yes, there will be this will be expected as I mentioned in the scrip.
<unk> right now.
Very casual or I should say informal about when the startup of the plant will occur.
Predicting at this point in time it'll be late 2024.
And then it will get rolling through 25, I would expect them to take a year year and a half to get to full capacity if everything went well.
And.
I'm sorry, what's the question.
No additional personnel.
First of all yeah, so at full capacity I would anticipate.
70 to 75, maybe 100 people.
Additionally.
Additionally, current staff correct.
What youre basically talking about if I do some numbers.
Thinking about earnings just in this contract is fully deployed.
It's a 2025 almost $3 in earnings.
Sounds about right.
Yep.
I'm not qualified at this point.
To do that math they qualify them.
Haven't done that math.
But it sounds like it might be about the right number generally.
Okay. Let me continue because the <unk> has published probably 1500 different pages items, let's talk about the tbi, what's interesting about the tbi.
Permits 2000 gallons, assuming that's done by the end of the year.
<unk> also mentioned that they have no desire and this is in.
The documents.
Final waste incidental to reprocessing evaluation for the test bed initiative demonstration.
And this came out.
March 16th.
And on.
Pages for Dash.
2021 and 'twenty two.
As Lisa said.
They have no desire.
To do what you and I would look at as the third phase and 300000 gallons and this does imply.
They are looking to go from the 2000 gallons of somebody is successful right to full capacity.
I like your comments about that.
Yes, we've had a number of means a deal in the last few weeks.
The overall TV program.
Asked before about that and we always responses generally been the same as it's been as I've described on prior phone calls and that is that they have.
Our road map.
That they referred to which integrates their strategy.
Sure.
Cleanup it includes.
Largely based on the <unk> facility.
$14 billion invested in.
And obviously decades of construction getting that plant up and running and that's kind of the center piece of it.
Tbi and grouting.
Certainly fits into that roadmap as I referred to it.
When it occurs.
Is it.
Going to be dependent on when do you flow gets rolling.
Funding how VF.
Facility works.
Other types of regulatory considerations.
And those types of things.
And in their.
Fonts to whether theyre going to go to 300000 gallons versus rate into a production level I don't think they always made that decision yet period, whether they call tbi.
Or a low level waste offsite disposition is which is what they referred to congressionally.
That remains to be seen but the supplemental program forward grouting.
Is certainly seems to be in it but I've been told is a part of that the overall roadmap. So to answer your question Howard whether it's 300000 gallons as phase three of Tbi or whether it's moving right into the operational phase Doa has laid the groundwork so far.
From a regulatory perspective from through the we're that you mentioned.
So through the environmental assessment to support their knievel requirements. Those have all been done they have another hurdle to address which is a smaller hurdle with the state of.
Washington for the <unk> permit which is required to pump the waste out of the tank the ship to us once that's done they can start going.
And as you know there is another method of the pumping out now to what they call the <unk> pumping ways to play.
Planned.
On pumping 800000 gallons this calendar year with that and putting it in storage for Dia floor.
And once that gets full I think it was on.
An opportunity to also go out some of that view has not agreed to that yet.
But.
It depends on when <unk> gets up and running it if its just around the corner or if it's a good ways off I'm sure there'll be opportunities to talk to deal with that potential as well so.
To answer.
Question, specifically I don't think Boe's.
Given a lot of consideration to whether its phase III of tbi or whether its right into an operational phase.
On the operational phase what kind of capacity could you.
Hugh.
Okay.
Work on in terms of say 2025.
We can do 30000 gallons a month.
Tomorrow.
Permits in our facilities to support that throughput.
And.
We can expand that through minor permit mod.
And some minor capital improvements up to a million dollars.
And with some additional mods.
Get that up to several million dollars.
But right now about 300000 gallons of years for our current capacity is.
And whenever you use ready to go.
And this is standard treatment margins again.
That's correct.
And would you need additional.
People processes.
Up to two to 300300.
<unk> thousand gallons would be about 25 people total to run that operation.
And.
A lot of that depends on how fast we are receiving the ways, whether we go to a second shift for a third shift or whether it's over a longer period of time, which we've done the one ship so that'll vary but.
15 to 25 people is probably good.
Estimate if we're running at full 30000 gallons a month.
30000 gallons a month if you just did that you're talking about.
75% this year give or take.
And of course.
Talking about.
Can verify those numbers our butt.
It sounds like potentially about right.
Alright.
Everybody is going to be wanting to talk to you Leslie about ITC.
We're expecting a decision momentarily is that a correct statement.
Yeah.
It has been very.
Difficult to pin down in regards to their schedule and the procurement right now <unk> has been consistently saying that ive been hearing that it'll be sometime in Q.
By the end of Q1, which obviously is only a week away. So I have to believe it sometime in Q2 for both.
D C and the <unk> as they have been more vocal about an award in the May timeframe.
<unk> I'm going to assume Howard is any day.
But likely in Q2.
At least.
In April timeframe.
Listen this is a disappointment is that the one.
That's yes, that's the <unk> six.
Right management contract and as well as Portsmouth Farooq infrastructure contracts.
Together.
I assume for the moment that you're witnessing ITD be contract.
We all hope you do.
What does that mean to you other than 15 years, and it's $45 billion doing $45 billion, but.
Could you be doing.
Part of it.
And that's really a question to that is if you lose your question with small business, we can still participate.
Yes, it's very difficult to answer the question. The first question. Howard. This is I've told many investors. This procurement was quite unusual.
So large and so complexity, we did not require a.
Baseline schedule or baseline cost estimate which means that.
It has very little cost and provided and very.
Less detail on what what each firm team members doing specifically.
It's like a closure contract and that you are.
Negotiate the winter will negotiate task orders for all of the components of scope during the transition period.
At that time, you will understand to which pieces of scopes, specifically youre going to be contractually required to do.
How many people are going to come with it.
And that type of thing so none of that will be defined by any of the winners until after transitions often running so I really can't answer what the overall financial impact is.
Small business as.
As I mentioned as well in the past there is a very significant.
All business set aside requirement for the winter.
It's a formula of overall revenue, but generally.
<unk>.
Small business set aside goals average about $200 million a year a year $200 million annually.
For small business goals.
<unk> that's.
That's a pretty significant amount.
And.
We still remain a small business are qualified to do that.
The second part of your question. If we were not selected we would certainly be a very viable I'll wait for the winning team to meet their small business goals as well as provide.
The value proposition, we provided to our team.
And we are.
Really optimistic that if we don't win we will be able to obtain a good portion of that.
That work.
<unk> already accounted for by another another team member.
I'll get back into queue, Mark best of luck.
Thank you.
Okay. Thank you Howard.
Thank you. Your next question is coming from Aaron Warwick from breakout investors. Your line is live.
Hey, guys. Thanks for taking the call I appreciate all the questions and your answers to those that give us more clarity.
I wanted to talk about a handful of little bit as well, but also wanted to look more near term and get some clarity. It sounds like the business has really turned the corner here after the pandemic and I'm just trying to get a sense of do you expect to be profitable.
This fiscal years.
Q1 looks a lot better than Q4 did Aaron I appreciate your question.
In Q2.
Has a lot of things are happening that are very exciting that are projected to be much better than Q1.
And so.
So we certainly expect to be profitable.
In Q2.
Q1 is still still a couple of things are we going to see come in Q2 is very exciting we have the work.
Facility here in Oak Ridge that we've been carrying for.
Lease for about three years now.
Its finally starting to.
Generate real revenue, we've got a big project, we're doing there and several others pending.
That gets rolling has gotten wrong here at Alaska.
10 days.
We will run full capacity just about.
Through Q2.
And in addition to that as I mentioned in the notes. We've won a number of projects that are all getting rolling in Q2 as well.
And that includes the ban in uranium mines.
As well as some commercial contracts.
Our project.
San Diego with the Navy.
And.
Two or three new projects with Doa at different sites. So it's almost a little more.
All are getting rolling in April so.
Q2, it looks really good and our backlog will be increasing.
And.
Some of the headwinds I described before which includes labor and supply chain issues are all are really behind us.
Replace a lot of people.
<unk> been onboard now for three or four months of their training the Roland.
<unk>.
We're pretty confident that Q2 will be well into profitable range.
Moving forward.
Fantastic sounds that sounds good.
So you mentioned, the EPA and I've noticed that they've been moving forward with a lot of different projects that have kind of been delayed because of COVID-19 and other reasons.
And.
The project that you mentioned, if I remember right, you said they'll need probably a $1 million this year, but if I remember right. That's like an $80 million. That's over three years is that accurate.
Yeah, you know Aaron.
I believe that IDI cues.
$225 million <unk> IQ so there's three three teams.
One of those teams, providing waste management and red logical services.
Which is obviously what we do.
And so it's really difficult to say the last time, we talked to EPA, which I've not talked to myself, but our folks out there it's been about a dozen sites.
Up.
The characterization contractor.
Two to bid out.
It just hasn't been through the procurement process I don't know the size of those or timing or funding.
But I know the ceiling is high.
Intent by EPA has to get rolling on these things this year.
And that's one reason why we're confident that that with ours.
Technology and the <unk>.
Full sorting stuff that it'll be up.
Very efficient.
And we will be able to once we get deployed in the field will be able to keep it going so.
Right now were only contractually.
Signed up for that first task, but we're pretty confident that this thing is going to grow.
Because.
The contamination and.
The mission of this thing is so large.
Okay, and then on the international front.
You Didnt mentioned anything about that but it sounded promising the last several conference calls, but whats the status of that.
And that I mentioned the JRC.
I guess some through that part of the script, there, but the JRC as the Italy contract that.
We're counting on both before yeah.
That's why I broke down or not but.
The bottom line is we're expecting to hear about the GSE bid any minute.
And as I mentioned before it's.
It's nearly $50 million job and.
It will be the kind of the sea for our overall European strategy.
But overall to answer your question, we continue to get shipments from Germany.
We're working with one right now to be shipped any day from Croatia and Slovenia as.
As well as the U K and Italy so.
The more we were shipping the better were getting at it a more efficient we're getting at it to deal with all the logistics and all the paperwork that goes with.
Shipping radioactive material cross.
The Atlantic So it is going very well the market is is really exploding.
And the marketing we've done has been very effective to the effect that we're getting the opportunity to bid on a lot of things.
And hopefully we'll see that.
<unk>.
Announcements soon.
And then we will start moving forward with the new plant in England, which will kind of be the centerpiece of of our European approach.
Right.
Okay. So a handful at a couple of things.
First of all I was pleasantly surprised to hear well at least if I understood. It correctly that even if you're bidding conglomerate.
Were to lose and it sounds like Theres only two.
But even if you were to lose that you still may get some business because of that small business.
Clause as part of the contract am I understand that correct yes.
I mean that is speculation I don't know that landscape. If we were to lose who the winner is going to have on their team necessarily so thats really to speculation, but yes, so there'll be opportunities for that.
Again, it's important to understand as I told investors. The ICD C is primarily <unk>.
Labor.
And.
The waste will be separate.
And the waste.
For example, the VF laws as part of that contract.
To operate the Dia flaw in our waste will come out separately as a separate subcontract.
And not through the PVC to us.
So.
There will be opportunity to do the waste that's defining the Wright amendment.
Which.
Is slated to come our way I wont say its operational and then there's other opportunities for other waste that will likely get as well and then there's other opportunities for labor.
And other small business opportunities along the way so yes to answer your question.
There will be opportunities.
As a small business most likely with the awardee.
Yeah, and you had mentioned up to 200 million that was about my estimate as well.
Like every year, but on an annualized basis and I'm just wondering.
It would go to small businesses.
Many small businesses.
It can't be that many small businesses, they're doing what you do so I just.
There is none of our competitor our day to day competitors, which are WCS in energy solutions and those types of firms or private companies.
None of those guys are small business. So youre absolutely right. It was a very limited small business competition with waste treatment capability, there's a few.
Couple here in Oak Ridge.
Really not any unnecessarily in the hand for areas to speak of at this point.
But.
It's also a very broad scopes as other things to do.
But as far as what we do.
There's very limited small business competition.
In this space.
Yeah.
Okay. Thank you speaking of the larger competitors.
Some of them were mentioned in the final weird that for the Tbi.
You had talked about earlier and that I think caught some people by surprise because you were the only one that was mentioned in the one for secondary waves.
But can you explain what.
The reasoning behind yes, Im glad you asked that Eric because I did get a couple of questions about that just this week.
And what it comes down to is the weir.
References the environmental assessment that was done for NEPA. So the environmental assessment the goal of that document as to evaluate alternatives for.
Treatment of that tank waste.
And treatment and disposal.
It looks at every alternative available.
Feasible and it looks at the competition.
Which includes WCS in energy solutions and us so.
So that what that we referred to as the who was evaluated in the EAA.
And if you look at EMEA, there's a number of different evaluations done.
Based on risk from transportation to safety environmental hazards and those kinds of things we were the lowest risk.
Approach because we are the only ones that are adjacent to the site.
The other solutions would have to require transportation of untreated radioactive liquid.
To at least 600 miles energy solutions, a father of WCS. So obviously.
VIX approach, having a facility permitted right next door is the preferred solution, but it did include.
What was defined in the evaluation for NIPA.
And that we are document that's why it's in there.
So how would they transport that waste.
To the premise fix northwest facility.
It'll be in totes.
And.
On the back of a large flatbed most likely.
And they'll bring over several totes.
A day when a full capacity.
Yeah, it seems like that would be rather dangerous.
Go all the way from <unk> that yeah, yeah exactly.
Okay.
And then I guess the final thing for me would be on the secondary waste that you had mentioned earlier.
Really impressive.
Where that revenue number it's about twice in my estimates. So also then.
Twice the earnings per share that Howard talked about it I guess just.
Make sure I understand that everyone else center cancer I guess.
This is because of the incrementals.
Margins that you would have given your fixed cost structure is that.
Is that accurate.
You have such higher margins because it's the incremental it's not just what your current margins are.
Yes, I think I think howard's back of the envelope number.
He has been here and I think just back of the envelope number is reasonable given.
Our incremental margins and then as Mark mentioned, there would be some additional fixed cost against that number but I think.
Just again back of the envelope, it's pretty reasonable given those volumes.
Well. Thank you guys have done a great job navigating through co, but it seems glad to hear a year that business is starting to turn the corner there going to be profitable and then obviously.
Potentially lucrative step yard Hanford. So congratulations guys. Thank you thanks, Eric I appreciate it.
Thank you. Your next question is coming from Anthony harmful your line is live.
Hi, guys. Good morning, Thanks for holding the call.
A number of questions many of which are a clarification related just given there's so many moving parts.
Maybe just start out with where the Tbi program.
Can you see.
These layer of Fi what price per gallon, you would realistically expect to get paid.
Well, we don't want to get too deep Anthony.
First of all good morning.
Into costing us thing, but generally.
Our established rates.
That we have in our Msas.
In the low $40 a gallon range for the actual treatment.
Actual grouting sofa.
<unk> shows up on our dock.
In other words, we're not paying for transportation and we just have to ground. It it's 40 to $45 and again that can change based on revenue glides and the different types of waste received but thats generally a good number.
In the <unk> space.
<unk>.
Uh huh.
Subcontracts to us too.
Waste to our dock.
They would likely subcontract us too.
<unk> and.
Dispose of the waste and if that's the case and we have to pay for transportation and disposal at.
And Offsite landfill.
The net price would be closer to $100 a gallon. So we've typically use $100 of gallons for the tbi as an alternative to include treatment.
And.
Disposal.
Out of Texas landfills WCS so.
<unk>.
Where those numbers come from.
So do those same rates apply to treating the supplemental low activity waste from Hanford tanks outside of the Tbi program I assume they're the same.
No. They don't it's a good question and there are different and the reason they are different as important to us and important to the exclusivity of our.
Our program and that is because because of the agreements with the state.
This waste the secondary waves coming off of Vitrification, which is.
What is defined as.
With the state as the.
Preferred treatment alternatives.
What that means is Africa secondary waste comes off of the floor, we can put that waste in the.
Local hanford landfill so it won't go down the highway.
The texture and energy solutions.
Most cases.
Some exceptions, it will likely mostly or largely go back onto the hanford site into their gigantic beautiful new.
Landfill.
Designed just for this type of way so.
It wont go very far away.
But to be clear I'm, referring to the primary waste the supplemental low activity waste youre doing in tbi, saying once the Tbi program is behind us and if this moves into the operational stage of treating the primary supplemental low activity waste.
With the rates that you would be getting paid the same rates per gallon that you would be getting paid and the tbi program.
For that primary waste.
I'm a little confused so there's two different waste streams as one the secondary was coming off the floor. That's the when it goes back on site and then Tbi, which is as you said supplemental that's.
That's the Tbi so that's all.
Supplemental and that would be the $100.
Okay. Okay. So can you.
They are a phy weather.
<unk> has officially made a decision.
Grout secondary weeks.
That are generated by vitrification of the tanks low activity waste.
Or whether this remains a proposal.
Rather than an official decision.
The <unk>.
The Rod Amendment.
Quite a formal document.
And.
It defines the oes decision on how to disposition the waste coming off the floor.
I know it goes through a lot of pain and suffering through the deal to get that those doctors rod amendments approved.
And supplemental analysis and that type of thing.
So it's.
<unk>.
A pretty formal decision in my mind.
No.
It will.
Yeah, So to answer your question yes.
My perspective.
As a REIT amendments very formal.
And it is their intent to send.
The secondary western via floor for commercial.
Treatment.
Off site Offsite treatment.
Okay can you please clarify whether the deal.
As awarded.
The tank.
Offsite secondary waste treatment business to you all to waste control specialist or to neither of you yet.
They have not made any awards yet.
And we would not expect them to do that.
Till the blankets.
Operating or very close to operating in the high capacity.
What they'll do on as Anthony most likely there's some speculation areas there is each.
Each of each of the entities we've mentioned.
Have contracts with.
The tank operating contracted which at this point in time is W. Rps Adobe Rps is there.
Notwithstanding who wins the ITC or whatever it was that easy obviously will we will get this contract we have MSA with them with the established rates.
That will likely be renegotiated along the way.
And when the time comes from the generate this waste.
From D a flaw.
They will put out a task order maybe competitive may not be I don't know.
But they'll put out a task or in the case of this one said, there's only one company named in the Rod.
It will likely just be a task order will put in a price.
Negotiate with US and then we'll go so we have a contract in place they will put task orders in.
In place as waste is generated.
And.
Contractual approach that has not occurred yet and like I say won't likely occur via flow of the operator.
And that is a late 2024 event.
Correct Okay.
Okay.
And so.
If you all were to treat the secondary waste et cetera that are generated by vitrification.
And for <unk>.
Slow activity waste.
I may have completely misunderstood your comments, but were you implying.
Based on the revenue numbers, you had mentioned earlier.
That you would realistically expect to get paid around seven to $800 a cubic meter.
Did I am I getting that math right or did I misunderstand.
Yes.
I mean, you'll have a calculator in front of me your antibody generally for 8300 yards 300 cubic meters.
We're estimating.
Roughly $70 million annually and.
In revenue.
Okay.
And regarding the DC. So are you seeing more that the scope of event as it relates to perma fix only includes services not treatment.
I really can't talk about the procurement at all because it's such a sensitive situation at this point in time.
And the scope.
The RFP is public information and includes.
Managing the facilities.
And waste management, which would.
Include disposition.
The tank waste to closed tanks.
So it would be.
<unk> of scope within that.
Overall contract.
And that's about all I can say about about the procurement.
So if I'm hearing you right then we're talking about a $45 billion contract over 10 years and it is a possibility.
Perma fix could generate services business from that contract as well as treatment business from that contract possible is that.
Is that a fair statement.
Yes.
Okay.
Paul It's Bob.
It is possible for both services and treatment.
Correct.
Okay.
Then last question can you please give us an update more.
On the status.
Of.
Yes.
Renewing your northwest facilities dangerous waste regulations permit.
Yes that permit has been in the renewal process.
For 12 years.
So and.
We continue to work with the state.
And provide updates to the permit.
<unk>.
Right now boy.
And I think we're still another year off before.
We can see.
Anything finalized.
But it doesn't keep us from operating what we're doing we're doing but it does keep us from doing until we get the final one renewed is new technologies like the GMO system that we've got in place.
We were able to run that through a treat ability study for a year or so.
But until we get the full renewal we can't.
Do something new like that.
So it is impacting us.
In that sense, but the state is going through the processes. They have half the last 12 years.
And we're hoping to have it have it completed.
About a year, if I remember correctly.
It doesn't preclude you from.
Treating the way that we've been discussing through any of these other initiatives.
<unk>, which is which is demonstrated by the tbi stuff that we've already done.
We do routing all the time now.
Similar processes.
And so we would not we would not expect that.
That permit renewal.
Issue or delay have any impact on everything we're talking about here.
Okay. Thank you appreciate it.
Alright, thank you.
Thank you. Your next question is coming from Ross Taylor from <unk> investment partners.
Your line is live.
Thank you.
We will shift off of Hanford for that and like to talk to you about a couple of things. One what you are looking at with things such as uranium mines and how long do you think that ends up working out what kind of opportunities that have generally what other kinds of opportunities are you seeing.
Of that sort around the country that are starting to be freed up and then I'd like to ask you to talk about what you see happening with regard to the Navy. The Navy has a lot of.
Ships more nuclear capable ships looks like they are going to be coming offline again. This year. They are building up what looks like a fairly interesting.
<unk> of mothballed nuclear vessels that they need to activate and where do we stand with the ability to kind of push those major contracts forward.
Sure Ross, Yes, the EPA program for being randomized it's been a while since I have looked at that information, but I want to say there is.
It was like 180 debating uranium mines.
Within this program.
It was.
It received a good slug of funding.
Five years ago. When these idea Q bids came out.
We were awarded that.
Ward or contract with our Prime who is a native American firm.
And in local to the area.
And the Navajo region there.
The northeast.
Arizona.
And.
This is the first one.
A contract with you hired Cros I believe its tetra tech.
Their job.
Highly funded.
Most of the funding has been I think.
Actually spend all of our funding.
Are there going around doing the characterization.
Surveying and developing the scope for each one of those mines.
As I mentioned before I believe we have 12 or 18 done.
And next step after Tetra Tech does that as they turn over the information to the EPA put together a procurement.
Between these three bidders these three awardees.
And they go so we won that first one of those.
<unk>.
They are very remote locations some more than others.
And they will be often running and hopefully start making awards subsequent to the first one.
Through the summer some are very large some are smaller this is a smaller one.
<unk>.
But we're hopeful that once we get going our systems will be in place and they can keep operating.
And once they are in the field because mobilization so expensive on these types of things. So it's very difficult to tell you.
What type of funding this year looks like because they've had funding for years and years and it's all been stifled because of procurement I don't know if procurement is going to get things rolling this year or not or if it's going be next year, but the projects remain the objectives remain there's a lot of politics behind them.
And they seem to be often running.
<unk> had our kickoff meeting for the first one.
As with EPA is actually next week so.
We will have more information on that.
Bye bye.
On the next.
Earnings call.
As far as the Navy goes.
The Navy is boy it really got stifle too.
We reported a couple of years ago on this call.
Geo.
And May put a report together, they're going to decommission 48 ships I think 12 of those are going to be nuclear and theyre all going to be done in four years.
That's happened in about 18 months or two years until about.
First we can second week in March that an industry day. The Navy did excuse me in the Navy headquarters in D C.
And went over.
The plans for the enterprise to be the next vessel theyre going to decommission.
We're expecting an RFP I believe it's the summer.
That'll be the next one coming so teams are forming on that we're working with with company several companies to define the right team.
Based on the fact, we've got some good project calls from the ship, we're doing now it's going very well.
And we're hopeful to get on the winning team for that.
Anticipate it to be quite a while for that it's awarded probably a year or so.
Then I think the Navy, we often running with that business model.
I know the Nimitz aircraft carriers.
So close behind the enterprise and as a few others Navy.
<unk> escape me at the moment that will be on the list as well so we're.
We are hoping with this enterprise initiative.
It'll be kind of the beginning of this this market getting rolling.
And hopefully we can get on the right team.
And right now these vessels are just sitting.
Idaho.
The enterprise my understanding of the enterprise is sitting at HII Huntington Ingalls in Norfolk.
And they are maintaining it.
You know it has eight reactors on it so it's a big job.
And a complex one.
Two to.
To make it go away so yes, it's sitting in the in the harbor, there or shipyard they're normal.
Nothing can go wrong with that.
Can you talk about the competitive environment.
Environment It looks like you're in a lot of places you are operating you have a very limited.
Number of competitors.
And it would seem to me that one of the risks the government run into in here is that it needs to make sure that it can king continues to have competitive options. So therefore, one would expect to see some spreading of business My words, not yours, how do you see that environment and.
Is that not incorrect read that given the limited number of people who can do what you do that basically over time, everyone needs to win some.
I'm sure they would like to think that Ross.
That.
Not only the government, but even the primes I have the same perspective, if one company gets all the work.
It's not going to be you want a competitive market.
And we certainly understand that I think.
They consider that I don't know how they consider it in these big proposal initiatives.
But I do believe that's the case and that everyone is sensitive to the comment you just made in and understands the importance of spring around as well. So yes, I think that's an objective.
Oh in areas, where perhaps the other side the other one there might be some on buyer or some potential tilt to the idea of keeping.
Consulting and your team and the game otherwise you risk, losing the capability entirely.
Yes.
That's it.
I, just don't understand how thats going to all play out with this award because it is so large.
And.
But.
We certainly.
We have a long term mission and the.
Richland area up there.
<unk>.
A very unique capability that other folks don't have.
So I would expect no matter what happens I would expect to be a player on the waste treatment side of the house.
For the long term with that contractor.
Yes.
And just a quick comment on obviously you mentioned some of the rail transport obviously, everyone knows about what went on in Ohio, but I thought it was interesting there was a.
Lawsuit by a native American Navy.
Nation against the Burlington, Northern Santa Fe Foreign oil train derailment.
A number of years ago, I think it was back in 2015.
<unk> that just after that trial started Burlington, Northern Santa Fe derailed another train on that nation's property our land. So I thought it does highlight the fact that anytime you put anything on a train and haul it someplace bad things can happen.
Which obviously increases.
Risk it.
And the cost of the project.
Otherwise I think it sounds like you are saying that a lot of this.
Attempts that you're using a lot of the tenses youre using.
Or not.
But my call helpful Tenses, but expected tenseness that you see this happening and you see this is really like the game.
It's not the game might change it's the game has changed and is changing.
And that those pieces are already moving the rocks are already sliding is that a correct read.
Well you know Ross, we got to be careful.
As public company to always speculate on these things but.
So there is risk obviously, we all know know that going into this but what perma fix has tried to do over the last seven years is particularly is.
Is to get as many big irons in the fire as we possibly can with the hope that a couple of them will will will win.
And.
The one thing I am.
Very confident about is the rod that came out.
Everyone has commented on.
As.
What could be viewed to a large degree as it come in by the shippers that waste there is risk that plant has to get up and running.
And operate.
That's a pretty.
The big commitment they made.
Two to commercialize through local capabilities that secondary waste from VF law. So.
We're.
We're more optimistic than usual, obviously ITD see in OSA mask, our procurements. They can go either way.
And we can be really lucky or not lucky, but we feel like we've got enough other things going on that we'll continue to see the growth we had before COVID-19.
Irrespective of those wins.
And hopefully those those wins truly transform us.
If we can get a couple.
Right Yeah. It sounds like they should be transformational and I would think you'd probably have reason to be more optimistic than you just sounded. Thank you very much. Thank you.
Thank you. Your next question is coming from Stephen Fine from Fine LLC. Your line is live.
Good afternoon, how are you guys.
Steven Good afternoon, I have a scripted comment but I've got two questions. Prior to it number one you mentioned there were.
Labor problems are they being rectified or rectified.
Yeah, well it comes out to Steve, particularly at Hanford, but also in Oak Ridge.
We have seen.
As every manufacturing entity really has seen a big gap in <unk>.
Labor.
And particularly.
With the Union folks.
And.
They've been hiring hundreds in some cases.
Are people.
And.
We've lost a number of folks at both Hanford facility in Oak Ridge facility.
To the large <unk>.
Facilities.
They have a little better benefits, we pay or pay is pretty similar but there are some advantages.
Disadvantages.
Between each each of the firms, but with the big pull from those.
Hiring initiatives, we did lose a lot of folks, particularly a lot of folks at Hanford and.
That all happened in Q4, and early Q4 and got worse in the first two weeks of December .
And.
It really impacted productivity and Hanford.
Between the holidays.
We've hired.
Since then we hired in December very quickly, we're able to find folks they did require a lot of training.
<unk> been in a sense.
General managers are all here in Oak Ridge. This week for an off site. They all reported that.
Labor has not been initiative has not been an issue for the month of March particularly.
And most of February .
And that we've got the labor part behind us labor issues behind us.
Okay.
My next question before I read what I wrote.
In the write up it says there was $1 $2 million written off from the medical.
Where does that all.
I understand what that was from but how does that.
How does how does that how does that impact.
The financials.
So what does that is that $1 2 million less or no.
Yes, Steve that was all last year 2021, and net net it was zero because it was within the it was within the entities.
Our medical segment. It was basically writing off money, we'd invested into the medical segment, So perma fix environmental.
Makes the loss, but medical gets a gain from the write off.
So, it's a wash and consolidation.
Okay. Thanks, all right I'm going to read a statement.
I lived and slept your company and.
Hopefully this will be informational.
I just wanted to applaud the progress and actions of perma fix in that vein I would like.
To express my thought on today's unique potential permitting and.
In 2006 that was introduced the permits decks and ask to do due diligence on the company. Among my three degrees I am an engineer and MBA.
Hazardous chemical manufacturer for many years was a government contractor, but also a business and science consultant, who throughout my career assimilated various technical businesses and opportunities in either commercialize are analyzed and reported.
Immediately surveying perma fix I realize there are four plants at the time in 2016 were essentially non duplicable, because if a plant people related.
Asian permits and unique ability to handle low mix radiation ways, the infrastructure and capabilities cannot be understated and that uniqueness and value.
Since 2016, I have watched how perma fix has moved to diversify in a multitude of areas beyond those at Hanford clearly permits are capable of being a 150.
Million dollar plus company without hampered with treatment and service segments. This lens to a wide range of possibilities.
Ideally when I started studying the Hanford reservation, and particularly the vitrification plant being built I frankly with the gas.
30 years, not one gallon had been treated from the 56 million gallons of mixed nuclear way sitting in the 170 tax in 2022, there was $1 5 billion spent on maintaining the waste in the tank and building the deep floor plan to treat low level waste I immediately understood that 90% of the waste.
And the tank was low radioactive ways are more suitable for treatment by a mobilizing and then solidifying with concrete. This has been done in Savannah for decades. Since 1992, Perma fix has treated millions of gallons of mix radioactive waste by mobilizing and solidifying within appropriate concrete.
Lee question Testbed initiative and its purpose suggests themes there could be a quicker path for treatment by permitting the weights in the tanks becomes even larger as the must be liquefied before treatment. So arguably there can be two to four times more ways to treat various sources <unk> NR.
Yes.
And then he adds.
It will take in any treatment way 60 to 70 years to treat the tank waste a study completed by <unk> last summer states are mobilizing and solidifying the concrete will say tens of billions of dollars. The National Academy of Science Weasley States are mobilizing and then solidified.
With concrete and Offsite facility and bearing off site.
Pushed treatment forward 10 years, thereby taking pressure from leaky tanks space and facilitating movement towards building a plant to treat the high level waste. It will also ensure preservation of groundwater.
For over a year.
In the tank farm system called the tank side.
Yeah.
The tester separates high and low way after three things as the filtering the product remaining is a watery mixed hazardous and low radiation product radiations now more than one would experience in medical test that is ready for treatment <unk> can do 7200 gallons per day and thus there was over 300 gallon sitting in a fee.
And today the nature of this product has been generally not vitrify last summer I was exposed to non cost studies, the vitrification versus grouting.
<unk> used for that and grabbing the named used for the concrete process, but they underscore a misnomer because it has confounded with just carpeting waste with concrete and non are mobilizing as permitted with them. These studies were completed in the summer of 2021 by Laura <unk>, who works for Washington River Protection systems.
Hanford tank.
Plant contractor and charge or maintaining the tank waste. This crew chose to use 1 million gallon samples for each mode of treatment for grouting I will use always was treated and there was no secondary waves no hidden heroes. There was no diesel copious amounts of water or has it.
Chemical the processes the environmentally clean.
The data in this credit used was supplied by survival, which as stated they had been grouting for years, who are having is 110th the cost submit your buying so they haven't had one reactor. So it has been argued that their hazardous waste is more homogeneous while at Hanford. There were a number of reactors and thats a multitude of pads.
The tree.
<unk> has stated that he can or high street. The hazard waste listed in the one 170 <unk> Dr. Jim Continental has a Phd in geochemistry and is well known nationally states there should be no issue in treating the multitude of hazardous waste for.
The vitrification.
1 million gallon model about 340000 gallons. So that's only one third was vitrify and the other two thirds with secondary ways that has to be treated in ways other than vitrification data with supply relative some hahn hampered contractors building the vitrification plant with vitrification.
India requires 2000 degrees Fahrenheit 3 million gallons of diesel fuel which drove.
Over to 20000 metric tons of <unk> 2 million gallons of water, which mainly is contaminated it becomes secondary weighs 151 truckloads of hazardous chemicals the amount of energy use with energized 15000 homes that there was a statement the pitcher came onstream could cause 36 <unk>.
High consequence hazard.
Model used assumes a 7% efficiency particular case from plants typically have efficiencies around 40% and this should take longer be more expensive and possibly worse than that.
The densification outlets harvest fix can treat now 300000 gallons per year, which is equivalent to 1 million gallons of inputted waste into the vitrification plant as maybe one third will be better by Carmike Perma fix has related they can scale up to $3 million.
Three gallons per year. This is equivalent to 9 million gallons of waste inputting into the vitrification plant and note the vitrification plant with create 6 million gallons of secondary weights.
Governor Inslee of Washington State was interviewed in August 22 by the New York Times, the Governor touted how this early.
Calling for climate change the legislature, a Washington state is that liquidity concern regarding C O two and environmental responsibility recently, our government has stated that any government contract youre doing over $7 million, a year must be responsible and its environmental profile relative to the above concerns for environmental stuff.
One can question, how the political acquisition.
Ecosystem of Washington State promotes the vitrification plant the political ecosystem of Canfor is vitrify in its focus that the tank waste needs to be that you buy there seems to be no issue that sank the secondary ways with each region by permanent Pik, which in my mind this oxymoronic to apogee.
<unk> to permit take some mobilizing solidifying waste with concrete directly as a problem solver I do not understand why <unk> cannot start treating the waste in the tests. We're now at the bedroom retention continues to be built then there would be two systems treating waste and help get the waste treatment faster provide.
Back.
The Hanford Reservation is then an earthquake zone and we know climate change is real there needs to be an urgency because at black spot with a black Swan event that will this will be no.
And of the ways in January 2023 deal published a new Rod rules of decision how the waste would be treated with better retention discipline at the Rod last published in 2013. It was quite a compliment department that's unique ability that proposed $2 2 million gallons of secondary waste with me.
Treated by permit Tech northwest and there is product that would go to.
Midwestern plant are permitted to the rod is frame so the treated secondary way so let's come back to Hanford and Barry. There. This is an important nuance implying the nearness of Perm. It takes plants and someone asked the question by the way in Nevada that simply says nothing will be shift other than by truck and two.
Implying the treatment prowess department talks.
Rod is also very interesting with this section on seasonal high tool. This is a potential hazard created in the vitrification plant, which under certain heated conditions can create cyanide gas. All these single Nitro would come direct to perma fix.
Hey, Stephen This is mark I think we're going to probably have to wrap up.
Can you conclude on that Steve before we move forward.
Excuse me.
We're going to need to move on I'm afraid are you close to the conclusion that you can wrap up I've got tumor progress.
Okay.
Finally, there has been a tank maintenance contracts in the tank farm sitting out there for award is for 10 years, and 45 billion permanently as part of the two consortium Steadying affirmative consortium win permissive without people on the ground at the tank farm irrespective of any treatment at their northwest plant the contract.
<unk> conference is maintaining the tanks ways to running a bit your potential plant in any case.
<unk> will treat ways that as they get it and of course, it will be a significant impact to the financials.
<unk> over the last year I have commented to deal with collagen EPA in Washington State had comments by Court order included in the files of the consent decree and my comments are publicly included in the National Academy study low level waste sitting effort in this thing I urge you to speak.
To your congressional representative in order to start trading ways at the Hanford tank farm. There was no reason the permitted should not be trading waste right now.
I'm done.
Alright, Thanks, Dan we appreciate your passion topics, Stephen and your support.
I do have to say that.
The statements that were made by Steven.
Stevens alone adult necessarily reflect all abusing opinions of PSC.
As a company.
But we appreciate your support Stephen.
Okay.
Thank you I'd like to thank everyone for participating in the fourth quarter and year end conference call.
We remain extremely confident in the outlook for the business. We appreciate the continued support of our shareholders and we look forward to providing further updates as developments unfold. This quarter. Thank you very much.
Thank you everyone. This concludes today's event you may disconnect at this time and have a wonderful day. Thank you for your participation.