PERMA FIX ENVIRONMENTAL SERVICES INC — Call Transcript 2025

Good morning, everyone, and welcome to the Perma-Fix Environmental Services Fiscal Third Quarter 2025 earnings conference call. At this time, all participants have been placed on a listen-only mode, and the floor will be open for questions following the presentation. If anyone should require operator assistance during the conference, please press star zero on your phone keypad. Please note this conference is being recorded. I will now turn the conference over to your host, David Waldman of Crescendo Communications. David, the floor is yours. Thank you, Jenny. Good morning, everyone, and welcome to Perma-Fix Environmental Services Third Quarter 2025 conference call. On the call with us this morning are Marc Duff, President and CEO; Dr. Louis Centofanti, Executive Vice President of Strategic Initiatives; and Ben Naccarato, Chief Financial Officer. The company issued a press release this morning containing Third Quarter 2025 financial results, which is also posted on the company's website. If you have any questions after the call or would like any additional information about the company, please contact Crescendo Communications at 212-671-1020. I'd also like to remind everyone that certain statements contained within this conference call may be deemed forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and include certain non-GAAP financial measures. All statements on this conference call, other than a statement of historical fact, are forward-looking statements that are subject to known and unknown risks, uncertainties, and other factors which could cause actual results and performance of the company to differ materially from such statements. These risks and uncertainties are detailed in the company's filings with the U.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 discussion will include references to non-GAAP measures. Perma-Fix believes that such information provides an additional measurement consistent with 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 Marc Duff. Please go ahead, Marc. 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. Revenue increased to $16.5 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. Gross margin expanded to 14.6% from 7.9%, driven primarily by higher waste volumes and a more favorable mix within our treatment operations, partially offset by increased fixed cost. 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. 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. 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 2024, while segment gross margin improved to 17.3% from 4.5%. The improvement was driven up by higher waste volumes, higher throughput at our plants, and solid execution across both commercial and DOE projects. Waste 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 at $15.4 million, up from $7.9 million a year ago, providing a strong visibility through year-end and into 2026. 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. 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. 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. The Department of Energy's Direct Feed Low-Activity Waste facility, also known as DFLAW, initiated hot commissioning in early October ahead of the October 15th triparty agreement milestone. Melter I is now converting tank waste into stable glass, marking a major milestone in DOE's environmental cleanup mission. Under DOE's record decision for the Hanford DFLAW program, Perma-Fix Northwest is the designated commercial treatment pathway for secondary waste streams generated during the vitrification operations. These include processed liquids and solid residues that require off-site treatment at licensed facilities. This designation establishes the opportunity for a multi-decade high-volume revenue for Perma-Fix as DFLAW meets the objectives for the cleanup of Hanford over the next several decades. We expect to begin receiving effluent waste shipments from DFLAW later in Q4 or early Q1 of 2026, following DOE's initial production phase and associated waste characterization. Although DOE's triparty 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. 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. Taken together, the record decision designation, DOE progress, facility upgrades, and a workforce stability position puts Perma-Fix in a position as a critical commercial link in the DOE's waste treatment chain, 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-Fast system operated reliably through the quarter, achieving complete destruction of PFAS compounds at a 10-20% cost advantage to incineration and with zero air emissions. System performance improved month over month following Q3 upgrades and increased throughput. Please wait a moment whilst we reconnect our speaker. Apologies for the technical issue there. We'll reconnect them very shortly. We appreciate your patience, everybody. We're just reconnecting.

Speaker 3: Good morning, everyone, and welcome to the Perma-Fix Environmental Services Fiscal Third Quarter 2025 earnings conference call. At this time, all participants have been placed on a listen-only mode, and the floor will be open for questions following the presentation. If anyone should require operator assistance during the conference, please press star zero on your phone keypad. Please note this conference is being recorded. I will now turn the conference over to your host, David Waldman of Crescendo Communications. David, the floor is yours. Good morning, everyone, and welcome to the Perma-Fix Environmental Services Fiscal Third Quarter 2025 earnings conference call. good morning everyone and welcome to the perma-fix environmental services fiscal third quarter 2025 earnings conference call At this time, all participants have been placed on a listen-only mode, and the floor will be open for questions following the presentation. at this time all participants have been placed on a listen-only mode and the floor will be open for questions following the presentation If anyone should require operator assistance during the conference, please press star zero on your phone keypad. if anyone should require operator assistance during the conference please press star zero on your phone keypad Please note this conference is being recorded. please note this conference is being recorded I will now turn the conference over to your host, David Waldman of Crescendo Communications. i will now turn the conference over to your host david waldman of crescendo communications David, the floor is yours. david the floor is yours

Speaker 1: Thank you, Jenny. Good morning, everyone, and welcome to Perma-Fix Environmental Services Third Quarter 2025 conference call. On the call with us this morning are Marc Duff, President and CEO; Dr. Louis Centofanti, Executive Vice President of Strategic Initiatives; and Ben Naccarato, Chief Financial Officer. The company issued a press release this morning containing Third Quarter 2025 financial results, which is also posted on the company's website. If you have any questions after the call or would like any additional information about the company, please contact Crescendo Communications at 212-671-1020. I'd also like to remind everyone that certain statements contained within this conference call may be deemed forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and include certain non-GAAP financial measures. Thank you, Jenny. thank you jenny Good morning, everyone, and welcome to Perma-Fix Environmental Services Third Quarter 2025 conference call. good morning everyone and welcome to perma-fix environmental services third quarter 2025 conference call On the call with us this morning are Marc Duff, President and CEO; Dr. Louis Centofanti, Executive Vice President of Strategic Initiatives; and Ben Naccarato, Chief Financial Officer. on the call with us this morning are marc duff president and ceo dr louis centofanti executive vice president of strategic initiatives and ben naccarato chief financial officer The company issued a press release this morning containing Third Quarter 2025 financial results, which is also posted on the company's website. the company issued a press release this morning containing third quarter 2025 financial results which is also posted on the company's website If you have any questions after the call or would like any additional information about the company, please contact Crescendo Communications at 212-671-1020. if you have any questions after the call or would like any additional information about the company please contact crescendo communications at 212-671-1020 I'd also like to remind everyone that certain statements contained within this conference call may be deemed forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and include certain non-GAAP financial measures. i'd also like to remind everyone that certain statements contained within this conference call may be deemed forward-looking statements within the meaning of the private securities litigation reform act of 1995 and include certain non-gaap financial measures All statements on this conference call, other than a statement of historical fact, are forward-looking statements that are subject to known and unknown risks, uncertainties, and other factors which could cause actual results and performance of the company to differ materially from such statements. These risks and uncertainties are detailed in the company's filings with the U.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 discussion will include references to non-GAAP measures. Perma-Fix believes that such information provides an additional measurement consistent with 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. 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. all statements on this conference call other than a statement of historical fact are forward-looking statements that are subject to known and unknown risks uncertainties and other factors which could cause actual results and performance of the company to differ materially from such statements These risks and uncertainties are detailed in the company's filings with the U.S. these risks and uncertainties are detailed in the company's filings with the u.s Securities and Exchange Commission, as well as this morning's press release. 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. the company makes no commitment to disclose any revisions to forward-looking statements or any facts events or circumstances after the date hereof that bear upon forward-looking statements In addition, today's discussion will include references to non-GAAP measures. in addition today's discussion will include references to non-gaap measures Perma-Fix believes that such information provides an additional measurement consistent with historical comparison of its performance. perma-fix believes that such information provides an additional measurement consistent with 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. 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 Marc Duff. Please go ahead, Marc. I'd now like to turn the call over to Marc Duff. i'd now like to turn the call over to marc duff Please go ahead, Marc. please go ahead marc

Speaker 2: 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. Revenue increased to $16.5 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. Gross margin expanded to 14.6% from 7.9%, driven primarily by higher waste volumes and a more favorable mix within our treatment operations, partially offset by increased fixed cost. 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. 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. All right. all right Thanks, David. thanks david Good morning, everyone, and thank you for joining us today. 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. we're pleased to report another quarter of solid financial and operational progress for perma-fix Revenue increased to $16.5 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. revenue increased to $16.5 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 Gross margin expanded to 14.6% from 7.9%, driven primarily by higher waste volumes and a more favorable mix within our treatment operations, partially offset by increased fixed cost. gross margin expanded to 14.6% from 7.9% driven primarily by higher waste volumes and a more favorable mix within our treatment operations partially offset by increased fixed cost Gross margin also increased by 38% from Q2, reflecting continued operational progress and a stronger overall mix. 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. we also achieved a meaningful improvement in ebitda versus the prior quarter reflecting stronger throughput and continued execution discipline 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. 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 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 2024, while segment gross margin improved to 17.3% from 4.5%. The improvement was driven up by higher waste volumes, higher throughput at our plants, and solid execution across both commercial and DOE projects. Waste 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 at $15.4 million, up from $7.9 million a year ago, providing a strong visibility through year-end and into 2026. 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. Our treatment segment continued to deliver strong performance. 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 2024, while segment gross margin improved to 17.3% from 4.5%. segment revenue increased 45% year over year to $13.1 million up from $9.1 million in q3 of 2024 while segment gross margin improved to 17.3% from 4.5% The improvement was driven up by higher waste volumes, higher throughput at our plants, and solid execution across both commercial and DOE projects. the improvement was driven up by higher waste volumes higher throughput at our plants and solid execution across both commercial and doe projects Waste sales totaled $14.6 million, up from $8.4 million in the same period last year, a 74% increase. waste 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 at $15.4 million, up from $7.9 million a year ago, providing a strong visibility through year-end and into 2026. 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 Automation, digital scheduling, and plant optimization initiatives are all improving productivity and throughput while maintaining safety performance overall. 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. we're now realizing the full benefit of these investments contributing to higher throughput and sequential margin improvement 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. 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. The Department of Energy's Direct Feed Low-Activity Waste facility, also known as DFLAW, initiated hot commissioning in early October ahead of the October 15th triparty agreement milestone. Melter I is now converting tank waste into stable glass, marking a major milestone in DOE's environmental cleanup mission. Under DOE's record decision for the Hanford DFLAW program, Perma-Fix Northwest is the designated commercial treatment pathway for secondary waste streams generated during the vitrification operations. 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. 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 We continue to process waste streams from Europe and North America and are evaluating new shipment requests tied to upcoming 2026 European Union programs. 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. during 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 DFLAW, initiated hot commissioning in early October ahead of the October 15th triparty agreement milestone. the department of energy's direct feed low-activity waste facility also known as dflaw initiated hot commissioning in early october ahead of the october 15th triparty agreement milestone Melter I is now converting tank waste into stable glass, marking a major milestone in DOE's environmental cleanup mission. melter i is now converting tank waste into stable glass marking a major milestone in doe's environmental cleanup mission Under DOE's record decision for the Hanford DFLAW program, Perma-Fix Northwest is the designated commercial treatment pathway for secondary waste streams generated during the vitrification operations. under doe's record decision for the hanford dflaw program perma-fix northwest is the designated commercial treatment pathway for secondary waste streams generated during the vitrification operations These include processed liquids and solid residues that require off-site treatment at licensed facilities. This designation establishes the opportunity for a multi-decade high-volume revenue for Perma-Fix as DFLAW meets the objectives for the cleanup of Hanford over the next several decades. We expect to begin receiving effluent waste shipments from DFLAW later in Q4 or early Q1 of 2026, following DOE's initial production phase and associated waste characterization. Although DOE's triparty 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. 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. These include processed liquids and solid residues that require off-site treatment at licensed facilities. these include processed liquids and solid residues that require off-site treatment at licensed facilities This designation establishes the opportunity for a multi-decade high-volume revenue for Perma-Fix as DFLAW meets the objectives for the cleanup of Hanford over the next several decades. this designation establishes the opportunity for a multi-decade high-volume revenue for perma-fix as dflaw meets the objectives for the cleanup of hanford over the next several decades We expect to begin receiving effluent waste shipments from DFLAW later in Q4 or early Q1 of 2026, following DOE's initial production phase and associated waste characterization. we expect to begin receiving effluent waste shipments from dflaw later in q4 or early q1 of 2026 following doe's initial production phase and associated waste characterization Although DOE's triparty 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. although doe's triparty 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 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. 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. this has improved labor stability increased hiring efficiency and allows multi-shift operations to meet doe throughput requirements while maintaining excellent safety performance Taken together, the record decision designation, DOE progress, facility upgrades, and a workforce stability position puts Perma-Fix in a position as a critical commercial link in the DOE's waste treatment chain, 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-Fast system operated reliably through the quarter, achieving complete destruction of PFAS compounds at a 10-20% cost advantage to incineration and with zero air emissions. System performance improved month over month following Q3 upgrades and increased throughput. Taken together, the record decision designation, DOE progress, facility upgrades, and a workforce stability position puts Perma-Fix in a position as a critical commercial link in the DOE's waste treatment chain, a role that provides long-term recurring revenue as DOE's cleanup mission advances. taken together the record decision designation doe progress facility upgrades and a workforce stability position puts perma-fix in a position as a critical commercial link in the doe's waste treatment chain 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. our pfas destruction initiative continues to advance both technically and commercially At our Florida facility, the first-generation Perma-Fast system operated reliably through the quarter, achieving complete destruction of PFAS compounds at a 10-20% cost advantage to incineration and with zero air emissions. at our florida facility the first-generation perma-fast system operated reliably through the quarter achieving complete destruction of pfas compounds at a 10-20% cost advantage to incineration and with zero air emissions System performance improved month over month following Q3 upgrades and increased throughput. system performance improved month over month following q3 upgrades and increased throughput

Speaker 3: Please wait a moment whilst we reconnect our speaker. Apologies for the technical issue there. We'll reconnect them very shortly. We appreciate your patience, everybody. We're just reconnecting. Please wait a moment whilst we reconnect our speaker. please wait a moment whilst we reconnect our speaker Apologies for the technical issue there. apologies for the technical issue there We'll reconnect them very shortly. we'll reconnect them very shortly We appreciate your patience, everybody. we appreciate your patience everybody We're just reconnecting. we're just reconnecting