Q3 2025 Perma-Fix Environmental Services Inc Earnings Call & Business Update

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Speaker #2: The company issued a press release this morning containing Q3 2025 financial results, which is also posted on the company's website. If you have any questions after the call, would like any additional information about the company, please contact Crescendo Communications at 212-671-1020.

I will now turn the conference over to your host David Waldman of Crescendo Communications, David the floor is yours.

Speaker #2: I'd also like to remind everyone that certain statements contained within this conference call may be deemed forward-looking statements. Within the meeting of the private securities litigation reform act of 1995, it includes certain non-GAAP financial measures.

Thank you Jenny good morning, everyone and welcome to Perma fix environmental services third quarter 2020 conference call on the call 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 third.

Speaker #2: All statements on this conference call, other than a statement of historical fact or forward-looking statements, that are subject to known and unknown risks and uncertainties and other factors which could cause actual results and performance of the company, to different materially from such statements.

<unk> 2025 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 prime.

Speaker #2: These risks and uncertainties are detailed in the company's filings of the US 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.

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.

Speaker #2: In addition, today's discussion will include references to non-GAAP measures. Perma-Fix believes that such information provides an additional measurement and consistent historical comparison of its performance.

Speaker #2: A reconciliation of the non-GAAP measures to the most directly comparable GAAP measures available in today's news release on our website. I'd now like to turn the call over to Mark Duff.

These risks and uncertainties are detailed in the company's filings with the Securities and Exchange Commission as well as this morning's press release company makes no commitment to disclose any revisions to forward looking statements or any facts events or circumstances. After the date hereof that bear upon forward looking statements. In addition, today's discussion will include references to non-GAAP measures.

Speaker #2: Please go ahead, Mark.

Speaker #3: All right. Thanks, David. Good morning, everyone, and thank you for joining us today. We're pleased to report another quarter of solid financial and operational progress for Perma-Fix.

Speaker #3: Our revenue increased to $17.5 million, compared to $16.8 million in the same period last year, while gross profit more than doubled to $2.6 million up from $1.3 million a year ago.

<unk> 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 Mark Duff. Please go ahead Marc.

Speaker #3: Gross margin expanded to $14.6% from $7.9%, driven primarily by a higher waste volumes and a more favorable mix within our treatment operations. Partially offset by increased fixed cost.

Alright, Thanks, David Good morning, everyone and thank you for joining US today, we're pleased to report another quarter of solid financial and operational progress for perfect. Our revenue increased to $17 5 million.

Speaker #3: Gross margin also increased by 38% from Q2, reflecting continued operational progress and a stronger overall mix. We also achieved a meaningful improvement in EBITDA versus the prior quarter, reflecting stronger throughput and continued execution discipline.

Compared to $16 8 million in the same period last year, while gross profit more than doubled to $2 6 million up from $1 3 million a year ago.

Speaker #3: Overall, these results demonstrate consistent progress in margin expansion, backlog growth, and positioning Perma-Fix for long-term sustainable growth across our treatment, PFAS, and nuclear services programs.

Gross margin expanded to 14, 6% from seven 9% driven primarily by a higher higher waste volumes and a more favorable mix within our treatment operations, partially offset by increased fixed cost.

Speaker #3: Our treatment segment continued to deliver strong performance. Segment revenue increased 45% year over year to $13.1 million, up from $9.1 million in Q3 of '24, while segment gross margin improved to 17.3% from 4.5%.

Gross margin also increased by 38% from Q2, reflecting continued operational progress in the <unk>.

<unk> overall mix, we also achieved a meaningful improvement in EBITDA versus the prior quarter, reflecting stronger throughput and continued execution disciplined overall. These results demonstrate consistent progress in margin expansion backlog growth and positioning <unk> for long term sustainable growth across our treatment.

Speaker #3: The improvement was driven by higher waste volumes, higher throughput at our plants, and solid execution across both commercial and daily projects. Waste sales totaled $14.6 million, up from $8.4 million in the same period last year, a 74% increase.

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Our treatment segment continued to deliver strong performance.

Speaker #3: Our treatment backlog ended the quarter at $15.4 million, up from $7.9 million a year ago, providing a strong visibility through year-end and into 2026.

Segment revenue increased 45% year over year to $13 1 million up from $9 1 million in Q3 of 'twenty four.

While segment gross margin improved to 17, 3% from four 5%.

Speaker #3: Automation, digital scheduling, and plant optimization initiatives are all improving productivity. And throughput while maintaining safety performance overall. We're now realizing the full benefit of these investments, contributing to higher throughput and sequential margin improvement.

The improvement was driven up by higher waste volumes higher throughput at our plants and solid execution across both commercial and DIY projects.

<unk> sales totaled $14 6 million up from $8 4 million in the same period last year, a 74% increase our treatment backlog ended the quarter.

Speaker #3: We also continue to support international waste shipments, which remain on schedule and are expected to continue into the first half of 2026, adding backlog stability and revenue diversity.

At $15 4 million up from $7 9 million a year ago, providing a strong visibility through year end and into 2026.

Speaker #3: We continue to process waste streams from Europe and North America, and are evaluating new shipment requests tied to upcoming 2026 European Union programs. During the Hanford, this is one of the most significant and long-term growth opportunities in our company's history.

Automation digital scheduling and playing opposite optimization initiatives are all improving productivity and throughput while maintaining safety performance overall.

Speaker #3: The Department of Energy's direct feed, low-activity waste facility, also known as DF Law, initiated hot commissioning in early October, ahead of the October 15 tripartite agreement milestone.

We're now realizing the full benefit of these investments contributing to higher throughput and sequential margin improvement.

<unk> also continued to support international waste shipments, which remain on schedule and are expected to continue into the first half of 2026, adding backlog stability and revenue diversity.

Speaker #3: Melta One is now converting tank waste into stable glass, marking a major milestone in the Department of Energy's (DOE) environmental cleanup mission. Under DOE's record decision for the Hanford DF Law program, Perma-Fix Northwest is the designated commercial treatment pathway for secondary waste streams generated during the vitrification operations.

We continue to process waste crews from Europe, and North America and are evaluating new shipment request tied to upcoming 2026 European Union programs.

Turning the Hanford. This is one of the most significant and long term growth opportunities in our company's history. The department of Energy's direct feed low activity waste facility also known as the law initiated hot commissioning in early October ahead of the October 15th Tri Party agreement milestone Melter, one is now converting tank waste into stable glass market.

Speaker #3: These include process liquids and solid residues that require offsite treatment at licensed facilities. This designation establishes the opportunity for multi-decade high-volume revenue stream for Perma-Fix as DF Law meets the objectives for the cleanup of Hanford over the next several decades.

Speaker #3: We expect to begin receiving effluent waste shipments from DF Law later in Q4 or early Q1 of 2026, following DOE's initial production phase and associated waste characterization.

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The designated commercial treatment pathway for secondary waste streams generated during the vitrification operations.

Speaker #3: Although DOE's tripartite agreement allows up to three years to reach design capacity, for throughput, internal DOE goals indicate an earlier ramp-up and Perma-Fix Northwest is fully prepared to meet that.

These include process liquids and solid residues that require offsite treatment at license facilities. This designation establishes the opportunity for multi decade high volume revenue stream for perma fix as Dia floor meets the objectives for the cleanup of Hanford over the next several decades.

Speaker #3: Earlier this year, we completed the union transition under our UA Local 598 agreement in the Tri-Cities region for our Perma-Fix Northwest plant. This has improved labor stability, increased hiring efficiency, and allows multi-shift operations to meet DOE throughput requirements, while maintaining excellent safety performance.

We expect to begin receiving effluent waste shipments from via flow later in Q4 or early Q1 of 2026 following viewers initial production phase.

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Speaker #3: Taken together, the record decision designation, DOE progress, facility upgrades, and a workforce stability position place Perma-Fix in a position as a critical commercial link in the DOE's waste treatment chain.

For throughput internal D&B goes indicate an earlier ramp up and perfects northwest is fully prepared to meet that.

Earlier this year, we completed the union transition under our UA.

Speaker #3: A role that provides long-term recurring revenue as DOE's cleanup mission advances. Our PFAS destruction initiative continues to advance both technically and commercially. At our Florida facility, the first-generation Perma-FAS system operated reliably throughout the quarter.

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Speaker #3: Achieving complete destruction of PFAS compounds at a 2010 to 20% cost advantage to incineration. And with zero air emissions. System performance improved month over month following Q3 upgrades and increased throughout throughput.

Taken together the record decision designation daily progress facility upgrades and a workforce stability position.

Puts perfect and our position as a critical commercial link.

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To advance both technically and commercially at our Florida facility. The first generation <unk> system, operator reliably through the quarter.

Achieving complete destruction of <unk> compounds at a 20% to 20% cost advantage to incineration and with zero air emissions.

System performance improved month over month, following Q3 upgrades and increased throughout throughput.

Please go ahead, Matt while we reconnect the speaker.

Apologies for the technical issue that we will reconnect shortly.

I appreciate your patience everybody with just reconnecting Mark.

Sure.

With regard.

With.