Nuclear waste management provider Perma-Fix Environmental Services said Monday it recorded an operating loss of $11.2 million for the second quarter of 2016, a steep departure from the $613,000 in operating income earned for the same period in 2015.
The earnings report was delayed by about a week because the company failed to meet its quarterly fixed charge coverage ratio, resulting primarily from delays in receiving certain waste shipments for treatment, which the company has rescheduled for later this year. CEO Louis F. Centofanti described the “disappointing” results during the company’s earnings call Monday, explaining that Perma-Fix is revising its full-year projection for adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) by about 50 percent to between $3 million and $4 million. Centofanti in May said the company anticipated full-year adjusted EBITDA to exceed the $7 million recorded in 2015, adding that the company would turn a profit if it hit that mark.
“The numbers were weaker than we had hoped,” Centofanti said. “We still expect a strong second half of the year. Our only concern is our biggest challenge given the influx of shipments in the second half is how quickly we will be able to treat the waste and how much (revenue) we’ll be able to recognize in 2016.”
Perma-Fix, a nuclear services company and provider of nuclear and mixed-waste management services, deals in management and treatment of radioactive and mixed waste. The company focuses on activities with the Department of Energy, the Department of Defense, and the commercial nuclear industry.
Perma-Fix’s quarterly operating loss included non-cash tangible and intangible asset impairment charges of approximately $1.8 million and $8.3 million, respectively, due to the pending shutdown of the company’s M&EC facility in Oak Ridge, Tenn., which treats a variety of mixed low-level waste. Centofanti said the closure, scheduled for January 2018, will result in significant long-term savings, as it is the only Perma-Fix plant the company doesn’t own.
Quarterly revenue was recorded at $14.8 million, compared to $16.4 million for the second quarter of 2015. Revenue for the company’s treatment segment landed at $8 million in the three-month period, compared to $11.1 million in 2015. Quarterly revenue from the services segment was $6.8 million, compared to $5.3 million in 2015. Quarterly gross profit of $1.8 million, compared to $4 million for 2015, resulted primarily from lower revenue in the treatment segment due to lower waste volumes, according to Perma-Fix.
Centofanti said the disappointing results masked some positive developments, including the forthcoming indefinite delivery, indefinite quantity (IDIQ) contract with the Department of Energy. Centofanti called the deal — which is for up to $8.6 million for Perma-Fix to demonstrate the treatment of high-level waste by the end of 2016 — “the most transformative event in the company’s history.”
“I’m very excited to tell you that it’s on schedule,” Centofanti said, adding that he could not discuss specifics. “This project, being our first major forte into high-level waste to become a major priority for our customer, in fact, what we’re seeing is that we’re getting tremendous support at the highest levels of government on what we’re doing with this project.”
