By John Stang
Complications in waste treatment operations and closure costs of a facility in Tennessee trimmed Perma-Fix Environmental Services’ revenue and produced an operating loss in the fourth quarter of 2017.
However, executives said the company’s outlook is strong in 2018 as it vies for new government and commercial contracts and looks toward a potential next test of technology that could be used to treat radioactive waste from the Department of Energy.
The Atlanta-based environmental services specialists said Wednesday in its latest earnings report it recorded $12.6 million in revenue for the fourth quarter of 2017, compared to $13.4 million in the same period of 2016. Perma-Fix reported an operating loss of $1.2 million for the quarter, a sharp downturn from income of $402,000 in the prior year.
While waste shipments rose in the quarter ended Dec. 31, revenue in the treatment business took a hit from the “timing and particular mix of waste we received,” Perma-Fix CEO Mark Duff said in a press release.
Perma-Fix retains three active facilities for treatment of radioactive and other waste types. Revenue in the business line dropped from $9.4 million in fourth-quarter 2016 to $8.7 million a year later.
The company’s other major business segment is services, which covers offerings ranging from consulting on management of NORM and TENORM radioactive materials, to radiological safety, to rental of radiological and industrial hygiene gear. Quarterly revenue in that business dropped by $171,000 on a year-over-year basis, to $3.9 million.
Quarterly gross profit landed at $1.8 million, compared to $3.4 million in the same quarter in 2016, largely on the back of closure costs for the company’s East Tennessee Materials & Energy Corp. waste treatment facility. Shuttering the plant will eventually save the company $4 million to $5 million annually, according to Duff.
Perma-Fix’s adjusted earnings before interest, taxes, depreciation, and amortization for 2017 was about $2.4 million, compare to roughly $575,000 in 2016. The adjustments included factoring in the corporation’s medical isotopes operations, plus losses of tangible and intangible assets.
In a telephone interview, Duff said the company will “continue to develop our revenue in the treatment segment.”
Perma-Fix recently finished a test at its Richland, Wash., treatment site that involved mixing 3 gallons of low-activity radioactive waste from DOE’s nearby Hanford Site with a concrete-like grout and shipping the processed material to Waste Control Specialists’ disposal complex in West Texas. Perma-Fix has submitted a draft report on the findings of the first phase of the test bed initiative (TBI), and is awaiting DOE’s comments, Duff said.
This was a first-of-its-kind test of Hanford tank waste, currently executive vice president for strategic initiatives, said during the quarterly conference call with financial analysts.
Perma-Fix has submitted a proposal to DOE to conduct the second phase of this three-part experiment. Duff did not know when the agency would respond to the proposal to treat and ship 2,000 gallons of Hanford tank waste to the Texas site. He said the rumored, and denied, potential departure of Energy Secretary Rick Perry to lead the U.S. Department of Veterans Affairs would have a limited impact on the test program, which is managed at lower levels at DOE.
Duff, though, did say the project could benefit from Senate confirmation of the new assistant energy secretary of environmental management. Anne Marie White has advanced to the full Senate for a vote, but Sen. John Barrasso (R-Wyo.) has placed a hold on the nomination.
The “EM-1” leads DOE’s Office of Environmental Management, which oversees nuclear cleanup sites including Hanford and its 56 million gallons of radioactive waste left from decades of plutonium production.
“They are close, apparently, to confirming an assistant secretary, and we think that once that happens, we’ll have a significantly increased focus on these types of initiatives,” Duff said. “I know there will be hundreds of things that the new nominee will have to address. This will be one of them, and we hope that we can get some time with the nominee to accelerate some things with this TBI.”
He said the 2,000-gallon test phase would likely take a year to complete. The Energy Department has allocated up to $15 million for the second phase. “The ball is in their court,” Duff said. The third phase is to be much bigger, but no figures have been nailed down yet, he added, declining to elaborate on the finances for the project.
Responding to a question during the earnings call regarding potential contracts at Hanford, Duff said Perma-Fix has a “hot list” of 30-40 bidding opportunities and DOE and beyond: “The other bids that we’re working on, I won’t get into too much detail for supporting the Corps of Engineers, we have a number of going out there, we have a number going out that are already out in Canada, and we have several with second-tier subcontracts with DOE sites as well.”
Perma-Fix has been a subcontractor for Hanford’s Plateau Remediation Contract, now held by CH2M. The Energy Department is gearing up for the next bidding process for that contract, along with four others at Hanford. “We have a lot to offer and it’s very strategic and timely, where we are with test bed initiative,” Duff said. “So we do anticipate having very strong positions on those bids with better speculation at this point.”
Meanwhile, Perma-Fix also recently entered into a contract with Veolia Nuclear Solutions to install its patented GeoMelt radioactive waste vitrification system in Perma-Fix’s Richland facility. The system would be used for vitrification of contaminated sodium wastes in small amounts, converting the wastes in barrels into glass by heat and electrodes. This type of waste comes from sodium coolants in reactors. The initial tests are supposed to be conducted on small volumes of contaminated sodium wastes from Hanford and the Idaho National Laboratory, Duff said.
“This type of partnership with Veolia will provide an attractive niche market for Perma-Fix to leverage our existing permitted facilities to deploy new technologies,” Duff said in the teleconference.
Hanford is the site of the closed-down Fast Flux Test Facility research reactor that was cooled by liquid sodium.
The Richland GeoMelt operation could eventually accept wastes from locations other than Hanford and Idaho, Duff said. The corporation is pursuing contracts in the United Kingdom, Canada, Mexico, and Italy to accept contaminated sodium wastes at Richland to treat and then ship back to the countries of origin. Duff hopes that Perma-Fix would begin accepting those waste in the second quarter of this year.
