By John Stang
Coming off a strong 2019, Perma-Fix Environmental Services anticipates taking a significant revenue hit in the second quarter of 2020 due to the COVID-19 pandemic.
The Atlanta-based radioactive waste management specialist expects the novel coronavirus 2019 to affect its customers, slowing their on-site work and shipments to Perma-Fix’s waste processing plants
In a press release Thursday on its fourth-quarter 2019 earnings, Perma-Fix said some field projects have already been suspended temporarily and some waste shipments pushed back into the second quarter of this year.
In a subsequent teleconference with financial analysts, Perma-Fix President and CEO Mark Duff said the company could recover in the second half of 2020, thanks to a healthy backlog of work. But he acknowledged management is working on backup plans if the expected drop in revenue continues after two months, after four months, and after six months.
As of Friday, there were more than 15,000 confirmed cases of the respiratory disease in the United States, and 201 deaths, according to the U.S. Centers for Disease Control and Prevention.
So far, no Perma-Fix employees have been diagnosed with the coronavirus, but the company is working on plans if a plant’s workers do contract the disease, he said. Some employees are currently working from their homes.
“To date, our plants have not been impacted by the COVID virus,” according to Duff.
Executives did not discuss the situation further in the earnings call, and Perma-Fix on Friday declined to answer questions from RadWaste Monitor.
Another potential boost to Perma-Fix’s finances is its expansion plans in Oak Ridge. Tenn. Last month, Perma-Fix received a state radioactive materials license for a new 17,360-square-foot Environmental Waste Operations Center that will take apart and treat large pieces of equipment classified as low-level radioactive wastes. The facility is awaiting authorization to operate from the U.S. Environmental Protection Agency. Perma-Fix plans to add the ability to handle mixed waste to the new facility. The company aims to have the site fully operational in the second quarter of 2020.
Also, Duff noted that Congress for the current 2020 federal fiscal year appropriated $10 million to enable Perma-Fix to continue the second phase of the 3-year-old program previously called the Test Bed Initiative — converting 2,000 gallons of low-activity radioactive waste from the Department of Energy’s Hanford Site in Washington state into a solid grout form. The first phase involved 3 gallons. In each case, the tank waste is pretreated, immobilized at Perma-Fix Northwest in nearby Richland, Wash., and shipped for disposal at the Waste Control Specialists facility in West Texas, he said.
If successful, the three-stage pilot program test could open the door for treating some percentage of Hanford’s low-activity waste via grouting rather than the Waste Treatment Plant being built to vitrify the majority of the 56 million gallons of waste held in underground tanks. About 90 percent of that waste, generated by decades of plutonium production for nuclear weapons, is believed to be low-activity.
Duff said he could not pin down a completion date for the second phase, but said it would occur sometime this year. The potential third phase would involve treatment of up to 500,000 gallons of waste. However, the DOE budget request for fiscal 2021 does not include any money for what the agency now calls Low-Level Waste Offsite Disposal. “The decrease reflects a pause in evaluation of supplemental Low-Activity Waste treatment and disposal methods,” the agency said in one budget document.
Perma-Fix currently operates three sites for treatment of radioactive and other waste types, in Florida, Washington, and Tennessee. Its field services cover radiological remediation and nuclear decommissioning support.
The company said it nearly doubled its revenue in the fourth quarter of 2019, to $22.1 million from $11.7 million for the corresponding period the year before.
The 88% spike was built on sales boosts in its two key businesses for the quarter ended Dec. 31: Revenue in the Services Segment rose a massive 341%, from $2.7 million to $11.8 million on a year-over-year basis; Revenue in the Treatment Segment grew by a more modest $13.5%, from $9 million to $10.3 million.
Quarterly net income came in at $939,000, or $0.08 per share. That compares to a $2.4 million loss, $0.20 per share, for the three-month stretch of 2018. In 2018, Perma-Fix struggled with a two-week work outage at its waste processing facility in Richland, Wash., along with costs for the closure of the former East Tennessee Materials and Energy Corp.
A major factor in this year’s boost was $65 million worth of contracts signed since the beginning of 2019, Duff said.
For the full year, Perma-Fix posted $2.3 million in net income on $73.5 million in revenue. That translated to $0.19 per share. By comparison, the company reported $1.7 million in net losses on $49.5 million in revenue for 2018. That translated to a loss of $0.12 per share for that year.
