Perma-Fix Announces Results for the Second Quarter of Fiscal 2008

2008-08-07 06:30:00

Perma-Fix Announces Results for the Second Quarter of Fiscal 2008

    ATLANTA, Aug. 7 /EMWNews/ -- Perma-Fix Environmental

Services, Inc. (Nasdaq: PESI) today announced results for the second

quarter ended June 30, 2008.



    Dr. Louis F. Centofanti, Chairman and Chief Executive Officer, stated,

"Revenue within our Nuclear Segment increased by 15 percent over the second

quarter of last year. Our results included a full quarter of operation for

the Perma-Fix Northwest facility, which was acquired in June 2007. Overall,

we were pleased with our results in light of the temporary slowdown of

clean- up and remediation that we have seen throughout the Department of

Energy (DOE). Additionally, we look forward to benefitting from our

recently announced participation in the DOE Plateau Remediation Contract at

the Hanford site in Richland, Washington, which will commence in October

2008."



    Dr. Centofanti continued, "Regarding the Plateau Remediation Contract,

our M&EC subsidiary will provide its waste facility operations expertise to

support the clean up from decades of plutonium production from the U.S.

national defense program, while our Perma-Fix Northwest treatment facility,

located adjacent to the Hanford site, will also provide local support for

the contract. Although our share of the DOE estimated $4.5 billion ten-year

general contract cannot be fully determined at this time, we believe that

once we begin full operation under our subcontract, we will recognize

revenue of approximately $40 million to $50 million per year for on-site

and off-site work under this subcontract. Participating in the on-site work

should enable us to accelerate the flow of mixed waste to our multiple

off-site treatment facilities."



    "We have also taken an important step forward with the granting of a

draft permit from the U.S. Environmental Protection Agency (EPA) for the

treatment of radioactive polychlorinated biphenyls (PCBs). We cannot take

any action as to the treatment of radioactive PCBs until we receive the

final permit. However, there are enormous barriers to entry in this market

and once we obtain the long-awaited permit, it will be a milestone for us.

Once the final permit is issued, Perma-Fix would be the only commercial

entity authorized in the U.S. to treat radioactive PCBs. We believe that

the EPA will likely grant our permit during the second half of 2008, which

would open up a sizeable untapped government and commercial market to us."



    Dr. Centofanti concluded, "Another key initiative for Perma-Fix has

been the divestiture of our various industrial waste facilities. We made

progress on this front with the sale of our Tulsa Industrial facility in

June 2008 for approximately $1.5 million in cash, subject to certain

working capital adjustments (paid to the buyer in the third quarter of 2008

of $135,000) and the assumption of certain liabilities. This marks the

third industrial facility that we have sold, thus far. As previously

reported, the Industrial Segment of Perma-Fix has been re-classified as

discontinued operations."



    Financial Results



    Revenue for the second quarter of 2008 was $15.8 million, versus $13.5

million for the same period last year. Revenue for the Nuclear Segment

increased to $15.0 million versus $13.0 million for the same period last

year. The second quarter of 2008 included a full quarter of operation for

the Perma- Fix Northwest facility, which was acquired in June 2007. Revenue

from the Engineering Segment was $789,000 versus $532,000 for the same

period last year. Operating income from continuing operations for the

second quarter was $399,000 versus operating income of $752,000 for the

same period last year. The decrease in operating income primarily reflects

the lower volume of waste received and lower margin waste treated within

the Nuclear Segment. Loss from discontinued operations, net of taxes,

totaled $49,000 for the second quarter of 2008 compared to an income of

$470,000 for the same period last year. Net income applicable to common

stockholders for the second quarter of 2008 was $458,000, or $0.01 per

share, versus net income of $1.2 million or $0.02 per share, for the same

period last year. Net income applicable to common stockholders for the

second quarter of 2008 included a gain on disposal of discontinued

operations, net of taxes, of $108,000.



    The company had EBITDA of $1.9 million during the quarter ended June

30, 2008, as compared to EBITDA of approximately $1.9 million for the same

period of 2007. The company defines EBITDA as earnings before interest,

taxes, depreciation and amortization. EBITDA is not a measure of

performance calculated in accordance with accounting principles generally

accepted in the United States ("GAAP"), and should not be considered in

isolation of, or as a substitute for, earnings as an indicator of operating

performance or cash flows from operating activities as a measure of

liquidity. The company believes the presentation of EBITDA is relevant and

useful by enhancing the readers' ability to understand the company's

operating performance. The company's management utilizes EBITDA as a means

to measure performance. The company's measurements of EBITDA may not be

comparable to similar titled measures reported by other companies. The

table below reconciles EBITDA, a non-GAAP measure, to net income for the

three and six months ended June 30, 2008 and 2007.




Quarter Ended Six Months Ended June 30, June 30, (In thousands) 2008 2007 2008 2007 Net (loss) Income $399 $752 $71 $1,335 Adjustments: Depreciation & Amortization 1,117 857 2,238 1,628 Interest Income (49) (78) (117) (166) Interest Expense 325 272 678 473 Interest Expense - Financing Fees 57 48 110 96 Income Tax Expense 3 58 3 183 EBITDA $1,852 $1,909 $2,983 $3,549 The tables below present certain financial information for the business segments, excluding allocation of corporate expenses:
Quarter Ended Six Months Ended June 30, 2008 June 30, 2008 (In thousands) Nuclear Engineering Nuclear Engineering Net revenues $15,009 $789 $28,991 $1,691 Gross profit 4,557 328 8,112 584 Segment profit 1,763 134 2,739 262 Quarter Ended Six Months Ended June 30, 2007 June 30, 2007 (In thousands) Nuclear Engineering Nuclear Engineering Net revenues $13,005 $532 $25,349 $1,109 Gross profit 4,639 165 9,071 333 Segment profit 2,295 43 4,305 92

    About Perma-Fix Environmental Services



    Perma-Fix Environmental Services, Inc., a national environmental

services company, provides unique mixed waste and industrial waste

management services. The company's increased focus on nuclear services

includes radioactive and mixed waste treatment services for hospitals,

research labs and institutions, federal agencies, including DOE, DOD, and

nuclear utilities. The company's industrial services treat hazardous and

non-hazardous waste for a variety of customers including, Fortune 500

companies, federal, state and local agencies and thousands of other

clients. Nationwide, the company operates nine major waste treatment

facilities.



    This press release contains "forward-looking statements" which are

based largely on the company's expectations and are subject to various

business risks and uncertainties, certain of which are beyond the company's

control. Forward-looking statements include, but are not limited to,

benefitting from our participation in the DDE Plateau Remediation Contract

at the Hanford site; anticipated revenues to us of approximately $40 to $50

million a year under our subcontract relating to the Plateau Remediation

Contract once we are in full operation under our subcontract; believe we

will obtain the final radioactive PCB permit during the second half of

2008; once a final permit is issued to us, we will be the only commercial

entity authorized in the U.S. to treat radioactive PCBs; we expect EPA to

grant the final radioactive PCB permit to us during the second quarter

2008, which we believe will open up a sizeable untapped market for us.

These forward-looking statements are intended to qualify for the safe

harbors from liability established by the Private Securities Litigation

Reform Act of 1995. While the company believes the expectations reflected

in this news release are reasonable, it can give no assurance such

expectations will prove to be correct. There are a variety of factors which

could cause future outcomes to differ materially from those described in

this release, including, without limitation, future economic conditions;

industry conditions; competitive pressures; and our ability to apply and

market our technologies; that neither the federal government nor any other

party to a subcontract involving the federal government terminates or

renegotiates any material contract granted to us prior to expiration of the

term of the contract, as such contracts are generally terminable or

renegotiable on 30 day notice, at the government's option; or the

government or such other party to a contract granted to us fails to abide

by or comply with the contract or to deliver waste as anticipated under the

contract; that Congress provides funding for the new remediation projects;

receipt of a final permit from the EPA relative to treatment of radioactive

PCBs; and the additional factors referred to under "Special Note Regarding

Forward-Looking Statements" of our 2007 Form 10-K/A and the Forward-Looking

Statements discussed in our Form 10-Q for the quarter ending March 31,

2008.. 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.




Please visit us on the World Wide Web at http://www.perma-fix.com. FINANCIAL TABLES FOLLOW PERMA-FIX ENVIRONMENTAL SERVICES, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) Three Months Ended Six Months Ended (Amounts in Thousands, Except June 30, June 30, for Per Share Amounts) 2008 2007 2008 2007 Net revenues $15,798 $13,537 $30,682 $26,458 Cost of goods sold 10,913 8,733 21,986 17,054 Gross profit 4,885 4,804 8,696 9,404 Selling, general and administrative expenses 3,996 3,759 7,803 7,474 Loss on disposal of property and equipment 142 2 142 2 Income from operations 747 1,043 751 1,928 Other income (expense): Interest income 49 78 117 166 Interest expense (325) (272) (678) (473) Interest expense-financing fees (57) (48) (110) (96) Other (12) 9 (6) (7) Income from continuing operations before taxes 402 810 74 1,518 Income tax expense 3 58 3 183 Income from continuing operations 399 752 71 1,335 (Loss) income from discontinued operations, net of taxes (49) 470 (760) (1,197) Gain on disposal of discontinued operations, net of taxes 108 3/4 2,216 3/4 Net income 458 1,222 1,527 138 Preferred Stock dividends 3/4 3/4 3/4 3/4 Net income applicable to Common Stockholders $ 458 $ 1,222 $ 1,527 $ 138 Net income (loss) per common share - basic Continuing operations $ .01 $ .01 $ 3/4 $ .02 Discontinued operations 3/4 .01 (.01) (.02) Disposal of discontinued operations 3/4 3/4 .04 3/4 Net income per common share $ .01 $ .02 $ .03 $ 3/4 Net income (loss) per common share - diluted Continuing operations $ .01 $ .01 $ 3/4 $ .02 Discontinued operations 3/4 .01 (.01) (.02) Disposal of discontinued operations 3/4 3/4 .04 3/4 Net income per common share $ .01 $ .02 $ .03 $ 3/4 Number of common shares used in computing net income (loss) per share: Basic 53,729 52,131 53,717 52,097 Diluted 54,173 53,601 54,035 53,333 PERMA-FIX ENVIRONMENTAL SERVICES, INC. CONSOLIDATED BALANCE SHEET June 30, (Amounts in Thousands, Except for 2008 December 31, Share Amounts) (Unaudited) 2007 ASSETS Current assets: Cash & equivalents $76 $137 Account receivable, net of allowance for doubtful accounts of $126 and $138 9,086 13,536 Unbilled receivables 9,358 10,321 Other current assets 1,957 3,403 Assets of discontinued operations included in current assets, net of allowance for doubtful accounts of $29 and $269 1,998 5,197 Total current assets 22,475 32,594 Net property and equipment 45,494 47,309 Property and equipment of discontinued operations, net of accumulated depreciation of $3,521 and $12,408 3,521 6,775 Intangibles and other assets 41,000 36,984 Intangible and other assets of discontinued operations 1,190 2,369 Total assets $113,680 $126,031 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities 28,786 41,389 Current liabilities related to discontinued operations 3,553 8,359 Total current liabilities 32,339 49,748 Long-term liabilities 16,724 12,680 Long-term liabilities related to discontinued operations 2,745 3,590 Total liabilities 51,808 66,018 Commitments and Contingencies Preferred Stock of subsidiary, $1.00 par value; 1,467,396 shares authorized, 1,284,730 shares issued and outstanding, liquidation value $1.00 per share 1,285 1,285 Stockholders' equity: Preferred Stock, $.001 par value; 2,000,000 shares authorized, no shares issued and outstanding - - Common Stock, $.001 par value; 75,000,000 shares authorized, 53,762,850 and 53,704,516 shares issued and outstanding, respectively 54 54 Additional paid-in capital 96,716 96,409 Stock subscription receivable - (25) Accumulated deficit (36,183) (37,710) Total stockholders' equity 60,587 58,728 Total liabilities and stockholders' equity $113,680 $126,031

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