While there is much consolidation happening in the nuclear services and waste management industry these days, Perma-Fix Environmental Solutions is not looking to buy other businesses, President and CEO Louis Centofanti said last week.
Perma-Fix is always interested in what is developing with industry mergers and acquisitions, Centofanti said Aug. 9 during his company’s quarterly earnings conference call. “But this point, our focus is very much internal … on growing our base business.”
This includes overcoming a second-quarter dip in revenue that executives with the Atlanta-based nuclear remediation and waste services company said they don’t expect to last long.
Revenue for the second quarter of 2017 was $12.7 million versus $14.8 million for the same period last year. Within Perma-Fix’s business segments, year-over-year revenue in the services branch dropped from $6.8 million to $3.1 million, primarily because of delays in a large nuclear services project in May 2017 due to government funding uncertainties; treatment branch revenue rose from $8 million to $9.6 million on the back of higher waste volume.
While Perma-Fix officials did not identify the delayed services project, Executive Vice President and Chief Operating Officer Mark Duff suggested work should resume there within a week or two.
The decrease was also attributed to the completion of a large commercial project in December 2016.
The company reported a $1.1 million operating loss for the quarter, an improvement from the $11.2 million loss for the same period of 2016. The operating loss included various “asset impairment charges” connected with the pending shutdown of Perma-Fix’s Materials & Energy Corp. plant. An impairment charge is a financial term for writing off goodwill.
The M&EC mixed low-level waste treatment facility is located in Oak Ridge, Tenn. The company will also reap a tax benefit of about $3.2 million connected with the loss incurred for the M&EC facility.
Overall, Perma-Fix management said it anticipate a return to growth in the services sector shortly. Duff said that Perma-Fix made a number of bids for new business in the second quarter. “We won a few contracts” that should pay off in future quarters, Duff said.
“We won a nice contract in Kansas City,” Duff said, not providing any additional details on the agreement.
Addressing the consolidation question, Centofanti noted that the Justice Department this year successfully blocked Waste Control Specialists’ buyout by low-level radioactive waste disposal rival EnergySolutions. “So you have WCS today on the market” as a result, he said.
The Perma-Fix CEO also pointed to the 2016 acquisition of nuclear waste treatment technology developer Kurion by French waste and water management company Veolia.
