Perma-Fix Environmental Services said this week its fourth-quarter revenue slid from $12.6 million in 2017 to $11.7 million in 2018, largely due to the unexpected temporary shutdown of a radioactive waste processing facility in Richland, Wash.
The roughly two-week outage at Perma-Fix Northwest in December generated an $800,000 hit to revenue, President and CEO Mark Duff said Monday during the Atlanta-based company’s quarterly earnings call. Management stopped work to address procedural concerns in processing of low-level radioactive waste at the plant.
“We had to make some adjustments in our processes out there to make sure that we had given the types of wastes that we were processing, making sure that we contain the contamination properly,” Duff said. “And it took about two weeks to make the adjustments we needed to make and make sure that everyone’s working safely. It’s largely a product of result of get a waste stream and to make sure that the right precautions being taken — the procedures are correct and then no one gets contaminated.”
Additional information about the issue is proprietary and not being made public, the company said Friday.
Perma-Fix is also still paying for closure of a waste treatment facility in Tennessee, Duff said. Decommissioning of the former East Tennessee Materials and Energy Corp. site was completed in the first quarter, and the company is about 80% finished with final site surveys ahead of permit release anticipated in the second quarter, according to Duff.
The final final closure paperwork is expected to be submitted in four to six weeks to the state of Tennessee and U.S. Environmental Protection Agency. The facilities will then be turned back over to the Department of Energy.
“[C]learly this has been a larger challenge and anticipated and has resulted in a negative impact to our performance overall for several years,” Duff said. ”This is due to the costs associated with closure cleanup activities as well as the distractions to our workers and our management team to complete determination of the permits.”
Perma-Fix continues to operate three facilities for treatment of radioactive and other waste types, in Florida, Tennessee, and Washington state. Perma-Fix Northwest processes low-level and mixed-low-level radioactive wastes for safe disposal.
Management reported a $2.1 million operating loss for the quarter, compared to a $1.2 million loss in the same period of 2017. The $2.4 million net loss from continuing operations was a steep drop from $340,000 in income in fourth-quarter 2017. The net loss attributable to common stockholders was similar: $2.4 million, or $0.20 per share, down from $260,000 in net income, $0.02 per share, in 2017.
In a Monday press release, Perma-Fix noted that fourth-quarter 2017 earnings were buoyed by a $1.7 million tax benefit from the federal 2017 Tax Cuts and Jobs Act.
For the full year, Perma-Fix reported a nearly $1.1 million loss from continuing operations in 2018. That improved significantly on a $3.5 million loss in 2017.
Quarterly revenue in Perma-Fix’s treatment business rose by $333,000 year over year, to $9 million. Twelve-month net revenue dropped from $37.8 million in 2017 to $36.3 million in 2018. But segment profit rose from $4.9 million to $5.5 million.
Quarterly revenue in the services segment dropped by $1.2 million, to $2.7 million, “due to lower project revenue, which is timing related and was impacted by the completion of certain phases of one of our ongoing contract,” Chief Financial Officer Ben Naccarato said during the call with financial analysts. For the year, net revenue rose from just over $12 million to nearly $13.3 million. The segment loss improved from $2.3 million to $756,000 on a year-over-year basis.
Perma-Fix’s medical segment continued to bring in no revenue, posting an $811,000 loss in 2018. But that bettered the over $1.1 million loss a year earlier.
“As recently reported, we have been awarded several new projects in March that we believe will further increase our funded backlog and bolster our Services Segment beginning in the second quarter of 2019,” Duff said in the press release. “We look forward to formally signing and announcing these projects in the coming weeks, which include remediation work in Canada as well as several U.S. Department of Energy (DOE) locations throughout the United States. We estimate the total contract value of these awards collectively to be approximately $17 million through 2019 alone.”
Commercial demonstration operations have begun at Perma-Fix Northwest’s GeoMelt unit, a Veolia Nuclear Solutions-trademarked technology that converts radioactive waste into a stable glass form for disposal. Perma-Fix already has a contract with the Department of Energy’s Idaho National Laboratory to process sodium-contaminated radioactive waste from the Enrico Fermi nuclear power plant in Michigan.
Duff characterized GeoMelt as a “robust system,” but also acknowledged its limitations. Only 30% to 40% of the 5-cubic-meter box in the unit can be filled with waste, with the remaining space left for sand for the glass melt.
For “sodium waste, it’s optimal and it is for other types of reactor waste as well, but it certainly doesn’t — it’s not the kind of thing you would run like tank waste or any other type of waste in large quantities,” he told financial analysts.
Perma-Fix is advancing a separate program it hopes will prove suitable for treating low-activity radioactive tank waste at the Hanford Site in Washington state, near its Richland facility. It hopes this fall to conduct the Phase 2 demonstration of its Test Bed Initiative, which would involve 2,000 gallons of material, under a $4.8 million contract the Energy Department issued in January to the Aerostar Perma-Fix TRU Services joint venture.
Ultimately, the grouting technology could be used for a significant portion of the 56 million gallons of radioactive waste left by Hanford’s former mission of plutonium production for the U.S. nuclear deterrent. Roughly 90% of that is believe to be low-activity waste.
