Perma-Fix Environmental Services Inc
NASDAQ:PESI
US |
Fubotv Inc
NYSE:FUBO
|
Media
|
|
US |
Bank of America Corp
NYSE:BAC
|
Banking
|
|
US |
Palantir Technologies Inc
NYSE:PLTR
|
Technology
|
|
US |
C
|
C3.ai Inc
NYSE:AI
|
Technology
|
US |
Uber Technologies Inc
NYSE:UBER
|
Road & Rail
|
|
CN |
NIO Inc
NYSE:NIO
|
Automobiles
|
|
US |
Fluor Corp
NYSE:FLR
|
Construction
|
|
US |
Jacobs Engineering Group Inc
NYSE:J
|
Professional Services
|
|
US |
TopBuild Corp
NYSE:BLD
|
Consumer products
|
|
US |
Abbott Laboratories
NYSE:ABT
|
Health Care
|
|
US |
Chevron Corp
NYSE:CVX
|
Energy
|
|
US |
Occidental Petroleum Corp
NYSE:OXY
|
Energy
|
|
US |
Matrix Service Co
NASDAQ:MTRX
|
Construction
|
|
US |
Automatic Data Processing Inc
NASDAQ:ADP
|
Technology
|
|
US |
Qualcomm Inc
NASDAQ:QCOM
|
Semiconductors
|
|
US |
Ambarella Inc
NASDAQ:AMBA
|
Semiconductors
|
Utilize notes to systematically review your investment decisions. By reflecting on past outcomes, you can discern effective strategies and identify those that underperformed. This continuous feedback loop enables you to adapt and refine your approach, optimizing for future success.
Each note serves as a learning point, offering insights into your decision-making processes. Over time, you'll accumulate a personalized database of knowledge, enhancing your ability to make informed decisions quickly and effectively.
With a comprehensive record of your investment history at your fingertips, you can compare current opportunities against past experiences. This not only bolsters your confidence but also ensures that each decision is grounded in a well-documented rationale.
Do you really want to delete this note?
This action cannot be undone.
52 Week Range |
6.6
14.855
|
Price Target |
|
We'll email you a reminder when the closing price reaches USD.
Choose the stock you wish to monitor with a price alert.
Fubotv Inc
NYSE:FUBO
|
US | |
Bank of America Corp
NYSE:BAC
|
US | |
Palantir Technologies Inc
NYSE:PLTR
|
US | |
C
|
C3.ai Inc
NYSE:AI
|
US |
Uber Technologies Inc
NYSE:UBER
|
US | |
NIO Inc
NYSE:NIO
|
CN | |
Fluor Corp
NYSE:FLR
|
US | |
Jacobs Engineering Group Inc
NYSE:J
|
US | |
TopBuild Corp
NYSE:BLD
|
US | |
Abbott Laboratories
NYSE:ABT
|
US | |
Chevron Corp
NYSE:CVX
|
US | |
Occidental Petroleum Corp
NYSE:OXY
|
US | |
Matrix Service Co
NASDAQ:MTRX
|
US | |
Automatic Data Processing Inc
NASDAQ:ADP
|
US | |
Qualcomm Inc
NASDAQ:QCOM
|
US | |
Ambarella Inc
NASDAQ:AMBA
|
US |
This alert will be permanently deleted.
Good day, and welcome to the Perma-Fix Third Quarter 2023 Earnings Conference Call. At this time, all participants have been placed on a listen-only mode and the floor will be open for questions and comments after the presentation. It is now my pleasure to turn the floor over to your host from Investor Relations, David Waldman. The floor is yours.
Thank you, and good morning, everyone. Welcome to Perma-Fix Environmental Services Third Quarter 2023 Conference Call. On the call with us this morning are Mark Duff, President and CEO; Dr. Louis Centofanti, Executive Vice President of Strategic Initiatives; and Ben Naccarato, Chief Financial Officer. The company issued a press release this morning containing third quarter 2023 financial results which is also posted on the company's website. If you have any questions after the call or would like any additional information about the company, please contact Crescendo Communications at (212) 671-1020. I'd also like to remind everyone that certain statements contained within this conference call may be deemed forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and include certain non-GAAP financial measures. All statements on this conference call other than a statement of historical fact are forward-looking statements that are subject to known and unknown risks, uncertainties and other factors, which could cause actual results and performance of the company to differ materially from such statements. These risks and uncertainties are detailed in the company's filings with the U.S. Securities and Exchange Commission as well as this morning's press release. 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. In addition, today's discussion will include reference to non-GAAP measures. Pharma-Fix believes that such information provides an additional measurement and consistent historical comparison of its performance. A reconciliation of the non-GAAP measures to the most directly comparable GAAP measures is available in today's news release on our website. I'd now like to turn the call over to Mark Duff. Please go ahead, Mark.
All right. Thanks, David, and good morning. We achieved another solid quarter as evidenced by an 18.4% increase in revenue to $21.9 million versus $18.5 million for the same period last year. In addition to our revenue growth, gross profit increased by 48.2% and gross margin increased from 16.6% to 20.8%. Importantly, we achieved net income of $341,000 and EBITDA of approximately $1.2 million for the third quarter of 2023. The growth in revenue reflects the commencement of several new projects granted earlier this year to support the backlog in both segments. And provide growth opportunities into 2024. We also improved productivity on certain projects that had previously been delayed from the longer effects of COVID-19. Our services project continue to meet or exceed expected performance goals and margins due to strong leadership and good client relations. While we achieved solid year-over-year growth, we would have generated even stronger result had it not been for temporary customer delays in our treatment and services segments. Unfortunately, this is not unusual in our business and contributed to a slight decline in our sequential revenue versus the second quarter of 2023. However, these projects have since commenced, and we believe will contribute to improved results for the fourth quarter of '23 and heading into '24. These and other awards are expected to generate significant revenue that would offset projects, which will wind down in the fourth quarter. Within the Services segment, we realized several new awards, including a $40 million 5-year contract with our joint venture Enviro Fixed Solutions, LLC by the Buffalo District of the ArmaCorp of Engineers for environmental remediation at the Niaga Fall storage site. The awards leverage our core competencies, including characterization, remediation and disposition of houses material and waste management. Looking ahead, we're benefiting from increased bidding opportunities within our services segment overall, including both the government and commercial sectors. These opportunities have included teaming of large DOE projects and procurements in addition to several U.S. Armor engineer cleanup initiatives, U.S. Navy decommissioning projects and several international projects with sustainable revenue potential. These bids will further strengthen our backlog with awards anticipated throughout 2024. Within our Treatment segment, we've experienced a steady improvement in waste receipts during the third quarter, supporting our visibility and backlog for the next year. This included increased waste shipments from within the commercial sector, along with steady sales from our industrial waste programs. We expect to see ongoing improvement in waste receipts and an increase in project work from existing contracts, new contracts and bids submitted in both segments that are still waiting for award. We have continued to implement our growth strategy throughout the third quarter in 2023, including several new opportunities in our target list that have the potential to significantly enhance our revenues and our long-term backlog for the next year within both segments. In addition, we continue to await some very large potential strategic awards by the DOE, some of these projects are quite considerable in size. And are selected by DOE would represent significant increases in sustainable revenue to align with our core competencies. We're hopeful that one or more of these projects will be awarded this quarter. If we are successful, we will participate as a team member on these large requirements, which completely align with our strengths innovations and radiological protection and waste management. Despite delays in award announcements, these growth initiatives remain on track, including the $3 billion operations and site mission support contract referred to as OSM as well as the Joint Research Council or JRC project in Italy. We anticipate both of these projects will be announced any day. In addition, we -- several other smaller projects anticipated to be announced in the fourth quarter of 2023. The JSC project will support our expansion program in Europe, including existing IDIQ contracts held by Perma-Fix in the U.K. and the application of our treatment technologies in Germany, Croatia and other markets in Europe. These opportunities will generate sustained receipts beginning in the next several quarters, providing a combined annual revenue is estimated in the $10 million to $20 million range, which we expect will begin to be realized in late '24. At the same time, the testbed initiative, or TBI, also know as the low-level waste to offset disposition project continues to progress in support of the Hanford Tank mission, although at a slower pace than anticipated over the last few months. The TBI initiative, which is based on grounded technology, we'll continue to focus -- be a focus of Perma-Fix as a means of saving tens of billions of dollars of taxpayer dollars as well as eliminating several carbon emission and reducing schedules for Hanford cleanup actions. Grouting has been recognized as a preferred supplement to the current DOE strategy from vitrification through the direct feed low-activity waste treatment plan, what we refer to as the DF law for the 59 million gallons of tank waste currently stored at Hanford. The TBI program continues to move forward following the submittal of the RD&D permit from the DOE to the state of Washington regulators, which was done in the second quarter. We're continually -- we're currently awaiting the approval of the RDD permit from the Washington Department of Ecology, which is the regulator, which will allow DOE to begin to extract 2,000 gallons of waste from the tanks for the Phase II grounding demonstration. Given the ongoing delay by the state and review of the permit application, we expect an official reset of the schedule, which will include public comment on the permit, followed by approval, extraction of the waste and treatment of 2,000 gallons, which is expected to be in the second half of '24 now. Perma-Fix remain -- or maintains these grounding capabilities today at our Permian fix facility in Northwest or in Richmond, Washington, which is permitted and now fitted to safely and compliantly grew out up to 30,000 gallons a month with the ability to expand to well over 1 million gallons annually while dramatically reducing cost, risk and schedule compared to vitrication alone. It's important to note that our Perma-Fix Northwest facility offers the only local or regional option for grounding tank waste versus other options to ship untreated waste out of state for grading disposal, which is defined as a higher risk in the NEPA environmental assessment as well as the recent wear documents. Another critical component of the Perma-Fix growth strategy hinges on the start-up of the DFL facility I mentioned in Hanford, which will provide vitrification services for about 40% of the tank waste volume on site. In January 23, DOE signed a record decision to treat the effluent waste streams from the DFW facility at our local Perma-Fix Northwest facility for at least the first 10 years of the DFL operations. We remain optimistic about reports coming from DFL in regards to the start-up of the melters and supporting systems, which continues to progress. While several steps remain before start-up DOE has not announced further delays in commissioning, which is currently scheduled for the late 2024 time frame. The waste that would be produced at this facility is estimated by DOE to be about 9,000 cubic meters annually. We expect that would begin to be received at the Perma-Fix facility upon startup of the vitrification plant itself. As I've mentioned in the past, the volume of this waste would more than double the production of all our plants combined on an annual basis. In regards to our treatment facilities, our Florida and Washington plants have begun to realize the budget and performance goals we haven't seen since pre-COVID times as labor and pricing impacts are beginning to be in the rearview mirror at this point in time. At our DSSI facility in Eastern Tennessee, we have implemented several expansion and upgrade activities that have been underway for the past few months, which we expect will result in a broader offering of our treatment capabilities beginning in the second half of '24. Importantly, we continue to invest in our capabilities and our facilities. We've built a solid foundation of growth and a highly scalable infrastructure. As we continue to increase revenues, we expect to benefit from the predictable cash flows of our Services segment with high incremental margins within our Treatment segment. So to wrap up, we remain optimistic that the remainder of '23 and '24 will realize continued growth in both segments as we expand our market base and develop strategic teams to optimize win probabilities for ongoing procurements. We're heavily focused on increasing productivity and reducing cost to maximize our margins along the way. Overall, we remain confident in our ability to maintain the growth and stability we experienced prior to the pandemic and we're highly encouraged by the near-term market outlook for the business based on our growing backlog, our sales pipeline and a number of important contracts expected to be awarded over the next few quarters. So on that note, I'll turn the call over to Ben, who will discuss the financial results in more detail. Ben?
Thank you, Mark. Our total revenue from continuing operations for the third quarter was $21.9 million compared to last year's third quarter of $18.5 million. That's an increase of $3.4 million or 18.4%. The improvement came in revenue from both our segments as our Treatment segment revenue improved by $1.9 million, primarily on higher waste volumes, though at a lower average price. And our Services segment increased by $1.5 million based on the improved productivity at one of our current large projects and additional revenue from new projects that started in the quarter. Year-to-date through September 30, our revenues higher from prior year by $13.2 million or 24.5%. Again, this improvement has come from both segments. The Treatment segment revenue increased by $8.5 million, primarily on increased volume, while our Services segment revenue was up $4.7 million on increased project work. Our gross profit for the quarter was up $4.5 million compared to -- was $4.5 million compared to $3.1 million in 2022. The improvement in gross profit of approximately $1.4 million came from the Services segment where gross profit was up $2 million from both increased revenue as well as improved profitability on our projects. Offsetting this increase was a reduction in the Treatment segment gross profit of $473,000 due in part to revenue mix as well as increased fixed costs at our facilities. For the 9 months ended September 30, our gross profit was $12.1 million compared to $7.6 million in the prior year. Again, our gross profit improved in both segments as the Service segment increased by $3.4 million on higher revenue and improved productivity in its projects, while the Treatment segment increased by $1 million, primarily on higher volume. Our G&A costs for the quarter were $3.9 million, which is consistent with third quarter last year. Increased costs for labor and legal fees were offset by savings in audit and other third-party service providers. For the 9 months ended September 30, SG&A expenses were $11 million, again, in line with $11 million in the prior year. And as with the quarter, our lower audit and outside service costs were offset by higher payroll expense. Our net income for the quarter was $341,000 compared to last year's net income of $664,000. However, I want to remind you that last year's net income included an employee retention credit of $2.1 million, which improved those earnings. For the 9 months ended September 30, our net income was $404,000 compared to a loss of $2.1 billion in prior year. Our income per share basic income per share was $0.03 compared to income per share of $0.05 last year. Year-to-date basic income per share is at $0.03 compared to a loss per share of $0.16 last year. Adjusted EBITDA from continuing operations, as we defined in this morning's press release, is at $1.2 million compared to a loss of $374,000 last year. Adjusted EBITDA year-to-date was $2.9 million compared to a loss of $2.2 million in '22. Turning to the balance sheet. Our cash on the balance sheet sits at about $2 million, consistent with last -- with year-end of 1.9%. Our accounts receivable and unbilled receivables were up $9.3 million due to increased revenue, certain prepaid contracts and the general timing of our cash receipts. Accounts payable, accrued expenses and accrued disposal collectively were up approximately $2.1 million, reflecting increased costs associated with increased revenue and the timing of vendor payments. Our unearned revenue was up approximately $3 million compared to prior year due mostly to the certain prepaid contract. As of September 30, our waste backlog and unearned revenue was $12.1 million, significantly improved from the $9.2 million at year-end and $7.1 million in September of '22. Our total debt at the quarter end was $3.2 million, excluding debt issuance costs, which is owed primarily to PNC Bank. Finally, on cash flow activity for 2023. Our cash provided by continuing ops was $452,000, our cash used in discontinued ops is $478,000, Cash used for investing of continuing operations was $1.4 million for cap spending. Cash provided from financing was $1.9 million, and that represents the net of our monthly payments to determine capital loans of $450,000 payments related to finance lease and other debt of $310 million. Proceeds received in the reload of our term loan in July of $2.5 million and receipts from other options and expenses of $150,000. With that, operator, I'll turn the call over for questions.
Certainly. The floor is now open for questions. [Operator Instructions] Your first question is coming from Howard Brous with Wellington Shields.
I'm Mark Ben Lu, I hope you're all well and your family as well. First of all and most important. Thanks, Howard. I appreciate that. So what I'd like to get a sense of or a better sense of -- when you look at the contract, you talked about OSS, Croatia, Italy. What does it all mean to permitting initially and over time? And it includes what I believe is another contract coming from the EPA on uranium. So let's begin with that, please.
Yes, Howard. The way we look at it is, as the company is really in a position to maintain a pretty sustainable foundation of revenue in the $90 million a year, $100 million a year range. From generally from winning projects repeatedly, we may have some down quarters and some up quarters. But just generally, that's kind of our base load that we should be able to do with the waste generated out there each year along with winning a number of projects within our statistical average. Then we have procurements and opportunities that will pull us above that. And those opportunities, you mentioned a couple of them, OSS, which is in a procurement situation that we can't really talk too much about the numbers associated with it in the JSE, same situation in ITDC, all those are -- would provide a plus up or a bump up in revenue in a significant way. JSE's a little smaller in the $40 million to $50 million range, that opens up a couple of markets for us in a bigger way in Europe. And so as far as the dollar per share, it's very difficult to to address that because we can't get into the financial components of it, but they'll have significant impacts on overall revenue stability. And equally as important, put us in a position where we can bid on other larger contracts with a qualification that is very valuable. So we have a number of those we're waiting to hear on. as you know. Those 3 are the primary ones. We have several other smaller ones that we're waiting to hear on including bids at the core engineer, Bannuranium mines have all been extended the project that we have in Arizona. Was supposed to run out in August it got extended through the end of this month and into November in the middle of November. And it will shut down for the winter because of the altitude the mine is at, and it will start back up in the spring. The EPA has informed us that there'll be additional mines procured over the winter to start in the spring as well. So they are finally starting to get some traction on new procurements. But we add to that list -- a long list of bids that we're working on through the winter that will be likely awarded in the spring and summer of next year that are very large. We've mentioned some of these on here before. Those opportunities include the enterprise, which we expect out the aircraft carrier that we expect out here in Q4 and late Q4, early Q1, a large project West Valley DOE project, which is a $3 billion project, which we're getting on teams for several IDIQ task orders through DOE contracts and several large waste contracts that we're expecting to bid, be able to bid on to see the impacts, again, Q2 time frame. So lots of -- we're very optimistic that our growth opportunities continue to come in. We're not going to win everything, but we should win a statistical quantity that's good as the more they come in, the better. We have revamped our business development group. I brought in to new people. They're very high energy, very well respected in the industry and are turning over a lot more rocks for us in regards to opportunities in the radiological world, including expansion into the commercial sector in a bigger way. So overall, we do remain very optimistic about our future. While this quarter was not what we wanted it to be overall, we did take a step back. But we still have the same momentum and we expect to get back on that trajectory in the near term. So I hope that answers your question.
So the ticker, and I'm not sure how many gallons are in Cisco right now. My understanding is about 700,000 gallons. My understanding is from the DOE is that, that volume is noncompliant for the vitrification plant. Is that a correct statement?
That is a correct statement. Howard, there's been a couple of press releases about that just in the past 2 weeks, apparently, a Tisco worked exactly as planned. They pumped the waste out of the tank and pump it into another tank. And what appears to be the case is that the other tank contaminated the liquid after they pumped it in. So in sampling the tank, they've got the roughly 700,000 gallons stored in, it will not meet the waste acceptance criteria for DFL. So DOE has said that they're evaluating alternatives, one of those alternatives that they mentioned in the press release was that they would run it through Tisco again -- we are trying to -- which obviously would just tie it just grew up for a while and cost money to redo it. We're proposing they grout that waste and dispose of it. DOE has not made a decision on that yet. And we're hopeful we'll see the value in that in disposing of that waste while they're able to pump other tank waste out. But at any rate, the situation does not impact the DFL I understand it. There's plenty of time for them to pump another 700,000 gallons before DFL needs it. So there is an opportunity here, hopefully, for DOE to consider an alternative other than to rerun it at this point.
You mentioned the rod that basically is roughly a 10-year contract. Where else in the Department of Energy go if it's not just 10 years, but is this not a generationally long contract. You've got collectively 56 million gallons, high-level, low-level waste to be treated. And even if you did a treatment with TBI, you're still talking 1 million gallons for the Vit plant a year, which means 2 million, 2.5 million gallons that you treat, are they going to build another facility to mimic Perma-Fix? Or is this basically my belief is this and TDR are generationally long contracts?
They are generating on contracts. The bottom line is DOE has not developed does not planned on developing the treatment capabilities they need to handle the effluent that comes out of DFL. So they're positioning their plan has been for, I think, the last 10 or 15 years to commercially treat the effluent that comes out of the DFL as opposed to building on-site treatment capabilities. Fortunately, there is very limited -- in fact, there's really no other alternatives in the Richland area, the Hanford other than what Perma-Fix has capabilities to provide so that's why it was mentioned in the rod that DOE would use -- perfect Northwest to support that backlog, as I mentioned, which is about 8,000 cubic meters a year. So a pretty sizable amount of waste is all different types. It's not just routing. It's all different types of processing different materials that would come out of that plant. And we remain optimistic that are on track for late '24. You may have seen a press release, I think it was just yesterday that they did turn on their melters and they're the latest campaign, the melt -- yes, the meta got 2 different different tranches of liquid glass, so to 2,100 degrees and everything seems to be working as designed. So they are continuing to make progress. They haven't announced any slips in schedule. So again, we're still anticipating, hopefully, that they'll have radioactive waste going through there in the late '24 time frame.
Let me come back to DFL at a moment. Transuranic Waste is basically another step in terms of what I call a generationally long contract. Without specific numbers because I don't think you have them, but what could the total transuranic waste coming out of Hanford? Because basically, the other main, whether it's Savanna River or others, they're already -- they're very treating trades around the waste. So is there a sense -- a global sense over one time frame and potential dollar amount? Or is that not achieved yet?
Yes. I mean Hanford in minusing the transuranic program programmatically, hamper is pretty close to the tail end of the transuranic shipments to the waste isolation pilot plant in New Mexico. Right now, in Savannah River and [indiscernible] all shipping a lot. Hanford is scheduled to begin later this decade. And right now, Perma-Fix provides the primary means of packaging transuranic waste and processing it for WIP. So what we're doing right now, and it's one of our largest waste streams is supporting the Plateau contract or they ship us different types of transgenic waste. We have a very advanced system to repackage that waste, put it into standard waste boxes to minimize the volume. We segregate the little of waste out, so it's only a transuranic waste goes. It goes back to DOE at the Hanford and they store it until it's their turn to ship to WIP. That represents roughly about $1 million a month in revenue and maybe a little bit more than that, some months. That number is increasing. So it's a good sustainable backlog for us, but there is additional quantity of TRU waste at Hanford, there's a higher level of radio activity. In other words, there are higher grand quantities that's all to be done and there's a tri-party agreement milestone for that. I don't know the total value of that. It's somewhere between, I don't know, maybe $50 million range, the $100 million range that requires removal in a certain time period that is slipping a little bit here and there, I think due to priorities and funding. That will eventually come to us most likely. We don't have a contract for it yet, but we certainly had many meetings about it. We'd anticipate getting that. But the overall transuranic program nationwide is very strategic for Perma-Fix. There's transuranic waste at screw up in connected that we recently won a contract. We haven't talked a lot about it, DOE announced in the tenth award, but we're going through different technical approaches. And that's about a $10 million contract. I'll start with, it's not dramatic, but it's important. But the other big one that's TRU is West Valley. That's the one that's coming out right now. So our strengths and capabilities at Northwest will help our positioning to be on a good team and provide some value to that team for West Valley. So 2 program is a big deal for us in the future. We haven't talked a lot about it in the past.
Okay. Last but not least, what I'm looking at DFL, vitrification plant, TBI. I consider those, although we just talked about DFL. Basically, the 56 million gallons is it a fair statement that these are generationally long contracts after 10 years, they have no other place to go. They're not going to build a plant. And if DOE builds a plant, it costs $1 billion is government. We understand that. But as we get closer and closer day by day, is it a fair comment that notwithstanding any further delays, but we're still talking about fourth quarter 2025 for DFL, vitrification plant and possibly at the same time, grouting TBI and the maximum ability for DFL process is basically 1 million gallons of waste a year, which cents to be $2.5 million or waste to you. Is that a fair comment?
We believe that's a fair comment, Howard. I think the investments we made locally in the Hanford area, the capabilities we've built up, the quality of our team and the recent agreements with the local labor unions have all positioned us to be a very high value alternative for DOE to provide exactly what we just described, which is processing and DFL Waste, the grouting and other ways on site and put Perma-Fix Northwest in a position where it's the best value alternative for the overall hand for mission.
So last comment, Ben, there are a couple of people who have asked various questions about 2025. Is DFL of the VIP plan is operational for the full year. People have talked about basic earnings just from that project of roughly $3 a share, whether it's $250 or 3.25%. But do you still feel comfortable assuming that the DFL does start full stream in 2025 or sometime a little bit before. Is that still a fair comment?
Yes, Howard, and this has come up on a couple of calls. And I guess the best way to handle it is to kind of give you an overview of what we are considering because this is so substantial to our regular business and game changing when it occurs. What I can give you is that from the metrics we've seen in the rod we'd be looking at $60 million to $70 million of additional revenue a year. We'd be looking -- we believe our incremental range, which we openly advertise at about 25% variable costs or 75% margin is consistent for this waste stream. The big wildcard is the capital and fixed expenses that would go into growing the company to support this kind of number. And we've talked about 100 FTEs. We've talked about capital in the $5 million to $10 million range. We've talked about other expenses, which we typically consider fixed in nature, utilities insurance, maintenance, et cetera, that's probably another $10 million to $15 million of cost. So a lot of that, if you shovel all that together, you get some pretty significant dollars income probably in the $18 million to $25 million range, EBITDA in the $22 million to $30 million range. ROIs 200% payback real quick, a couple of years that might have that. So all that, I'll say that it's reasonable to think with all other things that could happen in between that $2 to $3 range is certainly very achievable.
Your next question is coming from Brian Russo with Sidoti.
Just real quickly on the quarter. You mentioned temporary customer project delays in the third quarter, which aren't uncommon that likely get pushed in the fourth quarter. Is there any way to quantify what revenue is being pushed, what amount of revenue is being pushed to the right?
It's difficult to define the quantity of -- basically, what happened was we had a couple of projects that were paused and REAs were negotiated. And we'll be able to make up for some of that, and we'll see some of that in the fourth quarter, but I guess I can't give you a total amount of revenue that we'll see push into it. I do expect to see a pretty similar quarter in Q4 that we've seen here, which typically takes a step backwards from Q3. But we do have a couple of other new projects that are starting up in Q4 as well that will assist in getting a little better. But we look at it to be pretty flat overall moving forward through Q4. Ben, is there any else you want to add to that?
No. I think that's fair. Q4 is always impacted by holidays and those things. So there's, again, a lot of moving parts but we do expect a lot of the what we missed in the third to move into forth and for -- and beyond.
Okay. Got it. Great. And then just on the segment margins, it seems fairly low relative to what normalized margins are? Is it just a function of the lower revenue and the higher fixed cost kind of dynamic?
Well, there was -- it's higher on the service side because of the improved productivity. It was lower on the treatment side, and that was -- that's a revenue or a waste mix issue, a little higher this time around than usual because we had a good size number of what we call direct ship waste streams that we don't even touch at the plants and they go -- and we just broke them, so to speak, and that brought the margin down. But we expect it to normalize going forward.
Okay. Great. And then just on the RD&D permit delays from the DoD permit delays from the Washington State of ecology. Any insight there? Is it just more procedural? Or are there any read-throughs are they taking an extended period of time to review, which I thought might have been more of a formality. I just wanted to get any insight there.
Yes. We have no idea, Brian. The bottom line is that this is not a big permit. They asked some questions several months ago of DOE, we answered it before I heard and they weren't big questions. So it's a really difficult to understand why this would take so long. But it certainly has taken a lot longer than everyone anticipated for the state to turn this thing around for 2,000 gallons. I certainly would not appear to be that big of an effort, but we have no insight whatsoever as to why.
Okay. And then just any update on the ITTC contract and the options that the DOE has either rebidding the procurement again or any other scenarios?
Yes. That's extremely complicated procurement, unprecedented in nature in regards to what has happened. There's not a lot more information than what's publicly available in regards to the status of it other than to say that the DOE did come out with a final proposal revision request. Each of the teams provided a response, the Atkins team did file a protest in regards to that final proposal revision request. That's at the -- I believe that's a GAO now, and Jio I believe that they're going to make a decision before February. What these options would be very difficult to speculate on other than to say that one could still assume that the options are to award to the Atkins team or to go for rebid. And I'm sure that with the submittal of that proposal now or this revision, there's probably an alternative to award again to BWXT, in other words, anyone could win. So nobody has lost anything yet. No one's want any, and it's really rate around the axle in protest space. So I wish I could give you some speculation, Brian, but we've got no idea on this one. And there's a lot that the public, including us, does not know about the legal situation and what the data is or what the evidence is. So it's just you sit back and wait. There's really not much else we can do at this point Brian.
Yes. No, that's helpful. And then just to clarify on the DFO hot start and ramp up. Hypothetically, if there's a hot start-up in late 2024, you won't be at full production or DFL, won't be at full production for all of 2025. There's -- it's more like full year 12 months of production would be more like 2026, correct?
That's probably a good thing. I don't know when both smelters are be operating, but one could assume your statement is correct that any plant that starts up like that, it's not going to be 100% productive initially. So one would assume your statement is correct that it will start off with 1 melter at least will melt at a time, and it will be a while before all 3 shifts are hit on all cylinders and they're maximizing their design basis for -- for 1 million gallons a year. So I would assume it would be 26% and 4%, you start to see that affluent come out at that rate.
Okay. Great. And one last question, if you don't mind. Just -- I'm sorry if I missed this, but what was the services backlog as of September?
It's in the $22 million range.
Next question is coming from Ross Taylor with ARS Investment Partners.
Yes. Gentlemen, I kind of want to dig into what I think is the real important issue here, which is we've spent a lot of time in minutia about contracts, but let's talk about revenues and where we're going. Just a bit ago, you indicated that you should be able to do $90 million to $100 million is kind of a base load. You did 21 or so this last quarter, you're talking about this next quarter being roughly the same. My math tells me that you're operating 80%, 90% of base load on those 2 numbers. Why don't we -- or what's going to take to get to like a fourth quarter get to that $23 million, $25 million you need to have to kind of keep a baseload where you want it to be?
Yes. I was really speaking more annually Ross on that. So we had a rough Q1 that pulled us down a good bit. But our goal is to try to hover at a minimum around the 23% to 25% range every quarter. And that's where our sweet spot is on profitability. Anything below that gets very difficult based on our fixed cost. So that's typically where we need to be to maximize our EBITDA is the $23 million to $25 million at minimum each quarter.
Okay. So -- and do you -- can you get there? Do you see -- you talked about stuff being pushed to the right and the like. Do you -- can you get there in this current quarter we're in? Or is that something we're going to wait?
No, I think we're looking at our forecast that the next quarter, as I said, we should be equally as good as this quarter, if not a little better. We do have several projects starting up, and it's difficult to predict what the revenues and margins will look like as you roll through the quarter on new projects. But right now, it looks pretty promising to see a quarter at least as good as this quarter and particularly in regards to revenue. So we're optimistic that we will continue to see that come back to the trajectory we had in the last couple of quarters as well and finished out in the $90 million or close to $90 million range for the year. But we really -- when I mentioned that goal of $90 million is really annualized on a quarterly basis. So we're getting to above 22% to 23% is what we got to be to really be healthy. And as you know, we dipped a little bit below that this quarter because of those delays.
Yes. Yes. Now in looking at it, it's been a while since we've seen you guys announce a win. You started the year early on talking about what we could be getting out of Hanford and the bit. And that obviously caused a lot of excitement in the name. And since then, we've kind of been stuck waiting for the Italy operation for some of the Hanford stuff for things happening. How -- you've talked about the ability to get -- do you think you can get some new wins or get some of these decided in this current quarter. How comfortable are you that your ability to kind of push next year with the extra business to be able to produce $20 million, $30 million or more kind of out of this noncore load that we just were talking about.
Yes, Ross, what you're really asking about is our growth strategy. And as I was mentioning, the list of opportunities that we're bidding on these next 2 quarters, this quarter, next quarter, are a significant chunk we haven't seen this many big opportunities that we're really well positioned for with high win probabilities that would -- that could be literally be awarded by next summer. So with that in mind, I feel very good about where we're heading, and we're very optimistic about it. The way we've retooled our ability to bid these things gives us additional confidence the JRC, we're very confident on. We're very confident that we'll know in the next week or 2, I've been saying it since last December, very aware of that. But it is -- it's got to move forward because it's got the remediation contractor has been selected, and it's ready and mobilized and are just waiting for us to be awarded, so we can get going. I was over there last week, actually, they're Monday, Tuesday this week. And everything is on track to make an announcement here in the next few weeks. So we're waiting for that to occur there. Once that happens, as I mentioned before, it opens up a lot of opportunity in Europe. And it kind of-- it begins the implementation of our overall European strategy. As far as OSS -- that one has very significant revenue implications for us because we have such a big piece of scope defined from the overall contract. Again, several bidders that it's got to be considered there. The competition is a lot bigger. And I just can't speculate on when that's going to be awarded other than to say the DOE asked for an 18-day it was extension into November from the end of October. So when it as for extension is basically asking you to maintain your costing without change for another 18 days. So I got to believe that that's going to come out in the next week or so. So we see these things coming. It's been very frustrating for us, not understanding how to plan for them. But in the meantime, the point is that we're pursuing very, very aggressively other bids and opportunities of the same magnitude and the same impact, and we're getting on good teams and providing innovation into the proposals that are needed to win. So I do feel like we're going to get a couple of these nail down in the next 6 months, and we'll see those revenues go in the direction that we're talking to our investors about. Does that answer your question Ross?
Honestly kind of because I'm really trying to wrestle with the idea of we've been kind of -- you've been stuck in and I understand you can't control this. So I'm trying to get understand like, if we get Italy, what does that open up? Because that opens up Europe, that probably opens up creation, some other opportunities you've talked about in the past. If Italy comes to pass before the end of the year, could we see $20 million out of Europe next year?
It's not necessarily contingent on the GRC. The GRC piece has a big impact in that we have some agreements for building a plant in England with Westinghouse. And because much time is going by, we'll need to revisit that. Right now, again, I met with them last week, that's all still in place. And what it does is provide the backlog for that plant and the ability to move forward with it, which would be able to service all of Europe. Now to answer your question, that's going to take several years to build that plant. However, we have worked several additional deals with clients in Europe to begin shipping to us irrespective of that plant being there in a dissipation of coming eventually. But the waste backlog in Germany, in Croatia, in the U.K. are all such that they have to start moving those waste in the near term and not -- and are not in a position to wait for that plant. So we anticipate seeing our backlog of international waste growth from where it is right now in the $2 million to $3 million a year range, closer to an annualized receipt in the $7 million to $10 million range by the end of '24. So again, cross a big piece -- or excuse me, GRC's a big piece of that, but it's not all contingent on that. And talking to the German clients we have, there's tens of thousands of drums and storage over there that have to be moved as facilities have reached their capacity and regulatory drivers force them to move those waste. And we are the only -- on the successful organization has been able to take those ways, treat them in the U.S. and return the residues back successfully. So we remain optimistic on that and really feel that by the end of '24, we annualized, we should be close to $10 million a year in revenues from Europe.
Europe. Okay. And then as we -- obviously, we just are kind of waiting for [indiscernible] on these other issues. -- when you -- with that kind of what do you think as a base load, that kind of -- you've talked about the profitability? Does Europe come in at company average profitability?
Correct. Yes, it does. So our treatment -- our costs that we provide for -- or our pricing we provide for the European market is pretty close to what we provide here. And then you tack on the transportation cost, but that's pretty much the only options available for most of those folks over there.
Okay. Okay. Well, I'll let someone come in and ask, obviously, the outside of your control, but obviously, I think you can tell from today's action investors are getting trusted and we'd love to see some tangible signs of victory between here and the end of the year to remind us because it strikes me as this is -- from what you're saying, this is a calendar , 2025 should be a pretty powerful year earnings-wise as you ramp up everything that's going and you have a chance to be hugely powerful if you pick up an enterprise win and some other factors. So, thank you very much.
You bet, Ross. And we're very sensitive to what you're saying, too. It's very frustrating to us. We -- the department and most of our government agencies typically make announcements on Thursdays, every 3 it goes by, we all look at each other and say, "Oh my gosh, another weeks don't buy. And these bids continue to be out there waiting for announcement. And -- but all we can do is keep our heads down and keep fighting for new opportunities, and I'm very proud of what we've come up with and the direction we're heading in with these new opportunities that keep those irons in the fire. So I appreciate your support.
Your next question is coming from William Miller.
Yes. My question really is, I think all of our stockholders understand that we'd be billionaires of writing RFPs and ending to them generated a bottom line, but they don't. So what I'd like to know is at the end of the last quarter, how many RFPs or bids did you have out of those who were out, how many were awarded? And of those awarded, how many did you win? You constantly talk about our statistical win percentage, but we, the stockholders just hear about stock. So how many bids you got outstanding. How many did you win last quarter? How many did you lose? Let us determine whether you've got a future or not.
Well, I don't have those numbers in front of me, but I can tell you that we have about $700 million in potential rev -- total contract values outstanding. And last quarter, Q3, we actually had a good quarter. We had -- we're pretty -- I don't have the statistics exactly, but we had wins for Nagra Falls, San a Susanna. A couple of commercial clients, vanadium mines and Ion Beam, [indiscernible] and this crew job, I would estimate that, that would be in the 30% to 40% range of the number of bids that we submitted. So there's 2 ways to provide an answer to you, one is what is the percentage of revenue potential that you want and what is the percentage of number of bids that you bid. And our goal is typically to get to a 40% win rate on the number of bids that we submit because sometimes you use submit a bunch of small ones and some time there's a couple of big ones. When you do it the other way, it's not necessarily a value statistic versus how many bids you submitted for some can win. So we view a 40% win rate as it's kind of an industry standard in this business. And we typically are close to that between 20% and 40%, sometimes it depends on which ones the government or wherever the client is have announced and which as they haven't. So it's difficult to show, to answer your question without a lot of caveats and data. So -- but we do track that, and we can try to provide a little bit more information on the next call in regards to your question.
And your next question is coming from Stephen Fein.
Can you hear me because I'm on a speaker? Can you hear me?
We can hear you -- we can hear you.
I got a question for -- on the -- I have a lot of questions. But on the depreciation and amortization, why was that so dramatically up? Mean I'm looking at here that for 23 depreciation and moration was 124 versus 1433. Why is that so significantly up?
Yes, Steve, that was a unique situation with our new facility in Oak Ridge. The depreciation we're talking about isn't your typical capital depreciation. It's the closure related and there's some closure costs. And the way closure cost work, it's called ARO in accounting lingo, and that goes in as an asset against the liability, and we just needed to ramp up, accelerate the closure number on the balance sheet, you would see an offsetting asset number yes.
So that's just -- it's average. It's just -- it's just a onetime deal.
Correct. Yes, it will slow down now.
All right. I do have a bunch of questions. I have not heard about this contaminated waste that's come out of the -- that's in the titer. So my question there is, Mark, the fact that it's contaminated, does that change the ossification of it?
No, it just has a little bit more contamination of a specific kind that it's not within the design basis of the DFL.
So can I ask what the contamination was? Is it something that's hard for DOE to handle? Or is something that they could put again through the tester?
They can put it again through the tester and try to reduce it. I believe it's a radioisotope it's high. I thought it was season, but I have to check the press release, but... I believe... the contaminant from within the tank that they put it in after they ran it through the tester.
But if they would redo it, would they not have tank problems.
But if they would redo it, would they not have tank problems. They have to put it in a different tank. So it was can enter again?
Yes. Okay. All right, fine. All right. When Howard was initially asking about how long -- and this is how long, let's say, Hanford would be if they did the vitrification and Perma-Fix got to secondary waste. Is it not true that they have to liquefy the waste. So the actual waste is not 59 million gallons, it's probably closer to hundreds of millions of gallons because of the liquefication and that's why it would take so long.
That's absolutely correct. It's believed to be about 1 to 3, 1 to 2.5 to 3. So for every gallon that you you have in the tank, you're having to add a couple of gallons of water to get it out because most of the takeaways itself is either dry or in the contingency that's going to require a slurry to get it out. So we have to add some to remove it. That's correct.
Going -- I'm going to move over to Europe. So you succeed in Europe is -- would the people be provided by Westinghouse if you created a plant?
Yes. It would be our technology Westinghouse's facility in license. So -- it's a joint venture of Westing.
And is that 50-50?
It's 55, 45.
Okay. All right. So that -- but the -- to me, the real main thing here is you're joining with somebody who's a big player and that's fabulous.
That's right.
All right. With regard to the comments, when we talked about, okay, the vitrification plant goes on and then there's the secondary waste. And then the secondary waste comes to you per the rod in -- per the rod in January, you mentioned and then in additionally, you're really only player. In that rod, it states that the way that you treat it would go back to Hanford. So my question is, as there have been work done that, that way -- that secondary waste could go back and be very hampered?
For the DFL that's the value that Perma-Fix one of the buyers that Perma-Fix brings to DOE is that waste will be disposed at the Hanford landfill as opposed to anywhere else, which makes non-regional treatment capabilities, a lot less attractive. They have to ship out of state, have it treated and ship it back into state for disposal. That adds the value of the -- of being local is that the EE has a disposal sell there for this waste...
So -- excuse me, my real question was -- can it be disposed in Hanford if you get the secondary waste.
The secondary waste has to be disposed of an answer as long as it meets the was the land.
Okay. All right. All right. I just wanted to -- okay, I think all my questions were answered. But I've been a tidily listened to you guys since somewhere, I think, in 2016. And I remember when you came on, Mark, there was a period, somewhere in '18 or '19 where you kept saying we're getting there, where we're going to move towards $100 million. And then you achieved it. And I remember the stock moved. And so when I look at history, when I look back at history and having been -- like I always say, I was a positive chemical manufacturer, so I do understand what you encounter. But I do take your statements so positively that -- because I've learned to listen to you when you've always been very transparent that when you say that there'll be -- that you do see the possibility that there will be this base and $90 million to $100 million. And that is so critical because that then covers your overhead and so forth and gives you breathing room. And then all these other things I look at, hey, the potential is just so great. And my strategy when I was in business was to have a base business that paid for my business and just keep pushing. And then what happens is something happens that you -- something happens that's just changed the status quo. And that's the reality. And so I guess what I'm trying to say is I look at this very positively. You're clearly diversifying. You're clearly bidding more. And at the same time, you're saying that you do see a vision that you could get to a solid base, which is the key that you're paying your bills. And then when some one of these other circumstances occur, then here we go. So again, I commend you guys and I think the -- it's hard. The world's hard, but you're taking big leaps, and that's all. So anyway, thank you.
All right. Thank you, Stephen for the share.
Unfortunately, that's all the questions we have time for today. I would now like to turn the floor over to Mark Duff for any closing remarks.
Okay. Thank you. I'd like to thank everyone for participating in our third quarter conference call. We remain extremely confident in the outlook of our business, and we appreciate the continued support of our shareholders and look forward to providing further updates as developments unfold. Thank you, everyone.
Thank you. This does conclude today's conference call. You may disconnect your phone lines at this time, and have a wonderful day. Thank you for your participation.