Perma-Fix Environmental Services yesterday reported a net loss of approximately $36 million for 2013, including an approximate $28 million loss in goodwill impairment charges, which measures a company’s intangible assets. “The reduction in our revenue has resulted in our inability to attain profitable operations and have generated negative operating cash flow from operations,” the company said in a filing with the Securities and Exchange Commission. “These factors raise substantial doubt about our ability to continue as a going concern. As a result, our independent registered public accounting firm has included an explanatory paragraph regarding our ability to continue as a going concern in their report on our consolidated financial statements for the year ended December 31, 2013.”
The filing went on to say that if Perma-Fix does not raise capital in the near future or increase revenue, it would not have enough money to sustain operations in the next year. “Our ability to continue our operations depends on our ability to generate profitable operations or complete equity or debt financings to increase our capital. There are no assurances that we will be able to increase our revenue and cash flow to a level which supports profitable operations and provides sufficient funds to pay our obligations,” the filing said. “As a result, the Company may be forced to further reduce or even curtail its operations. These factors raise substantial doubt about the Company’s ability to continue as a going concern,” it said.
While Perma-Fix’s SEC filing raised the alarm of its ability to continue operations, the company offered a more hopeful outlook during its 2013 earnings conference call that indicated a more stable government budgetary environment would help overcome the challenges of 2013. “Based on historical spending patterns and early indications, we are optimistic the new DOE budget will translate to increased spending on discretionary projects, including waste treatment,” Perma-Fix Chairman and CEO Lou Centofanti said in a statement. “With the Congressional budget now resolved, we also believe that the DOE will begin awarding service contracts that have been delayed, and we believe that we are very well positioned on a number of these projects.” In fact, Centofanti hinted at service contracts that the company has already received, but is still waiting to announce. “Our service pipeline is significant, and it’s just a matter of waiting for these projects to be issued,” Centofanti said during the earnings call. “We have better visibility on the price line than we’ve had in the past and believe some of these contracts are forthcoming. In fact, we have been notified that we have won several of these contracts and should be able to talk about these in the very near future.” He added later in the call in response to a question regarding the magnitude of these contracts that it would receive “approximately $20 million in revenue over the year, year and a half of the projects.”
