UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
December 31, 1998
(Amounts In Thousands)
Perma-Fix Chem-Con
Environment Combined Pro
12/31/98 9/30/98 Adjustment Forma
___________ ________ _____________ ________
ASSETS
Current Assets:
Cash and cash equivalents $776 $334 ($1,000)(c) $110
Restricted Cash equivalents
and investment 111 494 605
Accounts Receivable, net of
allowance for doubtful
accounts 5,950 5,043 10,993
Inventories 145 145
Prepaid Expenses 471 28 499
Other Receivables 11 26 37
Assets of discontinued
operations 489 489
_____ _____ ______ ______
Total Current Assets 7,953 5,925 (1,000) 12,878
Property and equipment: 17,741 18,522 2,533(a),(b), 38,796
(c)
Less accumulated depreciation (5,836) (11,886) (17,722)
_____ _____ ______ ______
Net property and equipment 11,905 6,636 2,533 21,074
Intangibles and other assets:
Permits, net of accumulated
amortization 3,661 3,661
Note Receivable - Officer 1,065 (1,065)(b) 0
Goodwill, net of accumulated
amortization 4,698 35 9,204(a),(c) 13,937
Other assets 531 1 532
Total other assets 8,890 1,101 8,139 18,130
_____ _____ ______ ______
Total Assets $28,748 $13,662 $9,672 $52,082
====== ====== ====== ======
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
December 31, 1998
(Amounts In Thousands)
Perma-Fix Chem-Con
Environment Combined Pro
12/31/98 9/30/98 Adjustment Forma
___________ ________ _____________ ________
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
Accounts Payable $2,422 $1,573 $3,995
Accounts Payable-Intercompany 30 ($30)(c) 0
Accrued Expenses 3,369 1,113 433 (c) 4,915
Revolving loan and term note
facility 625 500 (d) 1,125
Current portion of settlements
payable 1,044 1,044
Current portion of long-term
debt 302 2,482 (1,298)(c),(d) 1,486
Current liabilities of discon-
tinued operations 863 863
______ ______ ______ ______
Total current liabilities 7,581 6,242 (395) 13,428
Long-term Liabilities:
Environmental accruals 520 4,430 4,950
Accrued closure costs 715 450 1,165
Long-term debt, less current
portion 2,087 1,554 7,789 (a),(b), 11,430
Long-term portion of settlements
payable 264 (c),(d) 264
Long-term liabilities of dis-
continued operations 1,892 1,892
______ ______ ______ ______
Total long-term liabilities 5,214 6,698 7,789 19,701
Stockholder's Equity
Preferred Stock
Common Stock 13 77 (76)(c) 14
Redeemable warrants 140 140
Additional paid-in capital 39,769 2,999 (c) 42,768
Accumulated Deficit (22,157) 645 (645)(c) (22,157)
______ ______ ______ ______
17,765 722 2,278 20,765
Less Common Stock in
treasury at cost; 943,000
shares issued and out-
standing (1,812) (1,812)
______ ______ ______ ______
Total stockholder's equity 15,953 722 2,278 18,953
______ ______ ______ ______
Total liabilities and stock-
holder's equity $28,748 $13,662 $9,672 $52,082
======= ====== ====== =======
UNAUDITED PRO FORMA CONDENSED COMBINED
STATEMENT OF OPERATIONS
For the year ended December 31, 1998
Perma-Fix Chem-Con
(Amounts in Thousands, Environmental Combined Pro
Except for Per Share Data) 12/31/98 9/30/98 Adjustment Forma
_____________________________________________________________________________
REVENUES $30,551 $21,801 $52,352
COST OF GOODS SOLD 21,064 14,134 35,198
_______ _______ _______
GROSS PROFIT 9,487 7,667 17,154
SELLING, GENERAL AND ADMINI-
STRATIVE 6,847 6,055 12,902
DEPRECIATION AND AMORTIZATION 2,109 799 $462(1) 3,370
_______ _______ ______ ______
INCOME (LOSS) FROM
OPERATIONS 531 813 (462) 882
OTHER INCOME (EXPENSE):
INTEREST INCOME 35 27 62
INTEREST EXPENSE (294) (360) (366)(2) (1,020)
OTHER INCOME (EXPENSE) 190 190
_______ ______ _______ ______
NET INCOME (LOSS) 462 480 (828) 114
PREFERRED STOCK DIVIDENDS (1,160) (1,160)
NET INCOME (LOSS) APPLIC-
ABLE TO COMMON STOCK ($698) $480 ($828) ($1,046)
======= ====== ======= =======
Basic and diluted loss per
common share: ($0.06) ($0.08)
======= ====== ======= =======
Weighted average number of
common shares outstanding 12,028 1,500 * 13,528
======= ====== ======= =======
<FN>
*Assumes $2.00 share price
(1) Adjusted for amortization of Goodwill for one year due to acquisition.
(2) Adjusted for Interest Expense on additional Note Payable for acquisition.
</FN>
See accompanying notes to unaudited
pro forma condensed combined financial statements.
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
March 31, 1999
(Amounts In Thousands)
Perma-Fix ChemCon
Environmental Combined Pro
03/31/99 03/31/99 Adjustment Forma
___________ ________ _____________ ________
ASSETS
Current Assets:
Cash and cash equivalents $84 $184 ($1,000)(c) ($732)
Restricted Cash equivalents
and investment 112 471 583
Accounts Receivable, net of
allowance for doubtful
accounts 6,047 4,937 10,984
Inventories 163 163
Prepaid Expenses 1,262 28 1,290
Other Receivables 26 20 46
Assets of discontinued
operations 456 456
______ ______ _______ ______
Total Current Assets 8,150 5,640 (1,000) 12,790
Property and equipment: 18,138 17,911 2,644 (a),(b), 38,693
(c)
Less accumulated depreci-
ation (6,180) (11,403) (17,583)
______ ______ _______ ______
Net property and equipment 11,958 6,508 2,644 21,110
Intangibles and other assets:
Permits, net of accumulated
amortization 3,611 3,611
Note Receivable - Officer 1,065 (1,065)(b) 0
Goodwill, net of accumulated
amortization 4,653 30 9,204 (a),(c) 13,887
Other assets 551 1 552
______ ______ _______ ______
Total other assets 8,815 1,096 8,139 18,050
______ ______ _______ ______
Total Assets $28,923 $13,244 $9,783 $51,950
======= ====== ======= =======
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
March 31, 1999
(Amounts In Thousands)
Perma-Fix ChemCon
Environmental Combined Pro
03/31/99 03/31/99 Adjustment Forma
___________ ________ _____________ ________
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
Accounts Payable $2,909 $1,515 $4,424
Accounts Payable-Intercompany 11 (11)(c) 0
Accrued Expenses 3,521 1,192 433(c) 5,146
Current portion of settle-
ments payable 1,044 1,044
Current portion of long-term
debt 931 2,355 (798)(c),(d) 2,488
Current liabilities of dis-
continued operations 496 496
______ ______ ______ ______
Total current liabilities 7,857 6,117 (376) 13,598
Long-term Liabilities:
Environmental accruals 484 4,430 4,914
Accrued closure costs 722 450 1,172
Long-term debt, less current
portion 1,839 1,425 7,789(a),(b), 11,053
Long-term portion of settle-
ments payable 192 (c),(d) 192
Long-term liabilities of dis-
continued operations 1,884 1,884
______ ______ ______ ______
Total long-term liabilities 4,929 6,497 7,789 19,215
Stockholder's Equity
Preferred Stock
Common Stock 14 77 (76)(c) 15
Redeemable warrants 140 140
Additional paid-in capital 39,938 2,999(c) 42,937
Accumulated Deficit (22,143) 553 (553)(c) (22,143)
______ ______ ______ ______
17,949 630 2,370 20,949
Less Common Stock in treasury
at cost; 943 shares issued
and outstanding (1,812) (1,812)
______ ______ ______ ______
Total stockholder's equity 16,137 630 2,370 19,137
______ ______ ______ ______
Total liabilities and stock-
holder's equity $28,923 $13,244 $9,783 $51,950
====== ====== ====== ======
UNAUDITED PRO FORMA CONDENSED COMBINED
STATEMENT OF OPERATIONS
For the quarter ended March 31, 1999
Perma-Fix ChemCon
(Amounts in Thousands, Environmental Combined Pro
Except for Per Share Data) 03/31/99 03/31/99 Adjustment Forma
_____________________________________________________________________________
REVENUES 7,812 5,079 12,891
COST OF GOODS SOLD 5,290 3,607 8,897
______ ______ ______ ______
GROSS PROFIT 2,522 1,472 0 3,994
SELLING, GENERAL AND ADMINI-
STRATIVE 1,838 1,756 3,594
DEPRECIATION AND AMORTIZATION 519 138 115(1) 772
______ ______ ______ ______
INCOME (LOSS) FROM
OPERATIONS 165 (422) (115) (372)
OTHER INCOME (EXPENSE):
INTEREST INCOME 7 50 57
INTEREST EXPENSE (27) (63) (92)(2) (182)
OTHER INCOME (EXPENSE) (14) (21) (35)
______ ______ ______ ______
NET INCOME (LOSS) 131 (456) (207) (532)
PREFERRED STOCK DIVIDENDS (117) (117)
______ ______ ______ ______
NET INCOME (LOSS) APPLICABLE
TO COMMON STOCK 14 (456) (207) (649)
===== ===== ====== =====
Basic and diluted loss per
common share: 0.00 (0.05)
Weighted average number of
common shares out 12,372 1,500 * 13,872
<FN>
*Assumes $2.00 share price
(1) Adjusted for amortization of Goodwill for one quarter due to acquisition.
(2) Adjusted for Interest Expense on additional Note Payable for acquisition.
</FN>
See accompanying notes to unaudited
pro forma condensed combined financial statements.
Notes to Unaudited Pro Forma Condensed Combined Financial
Statements
Note I - Basis of Presentation
The unaudited pro forma balance sheet combines the historical
consolidated balance sheet of Perma-Fix Environmental Services,
Inc. at March 31, 1999, with the historical combined balance sheet
of Chem-Con at March 31, 1999. The unaudited pro forma statements
of income combine the historical consolidated statements of
operations of Perma-Fix Environmental Services, Inc. for the
quarter ended March 31, 1999, with the historical combined
statements of income for Chem-Con for the quarter ended March 31,
1999. Certain amounts reflected in the historical financial
statement presentations of both companies have been reclassified to
conform to the unaudited pro forma condensed combined presentation.
The unaudited pro forma financial statements exclude the effect of
any operating income improvements which may be achieved upon
combining the resources of the companies and exclude costs
associated with the integration and consolidation of the companies
which are not presently estimable.
Note 2 - Significant Accounting Policies
Beginning January 1, 1999, Chem-Con's income, which had previously
been reported with a fiscal year end September 30, are now included
based on fiscal year end December 31. December 1998 results from
these operations are included in retained earnings.
The unaudited pro forma income statements for the quarter ended
March 31, 1999 does not reflect the three months ended December 31,
1998, for Chem-Con. For the quarter ended December 31, 1998,
Chem-Con reported unaudited revenues of $5,887,000 and unaudited
net income of $412,000.
Note 3 - Pro Forma Adjustments
Perma-Fix Environmental Services, Inc. anticipates the acquisition
of Chem-Con during the second quarter of 1999, in a transaction
accounted for as a purchase. The pro forma adjustments are
comprised of the following:
(a) Land located in Orlando, Florida with a fair market value
of $1,230,000 and related mortgages of $222,000 were
contributed by the Chem-Con stockholder in connection
with the acquisition.
(b) The officer note receivable was forgiven in exchange for
certain land and buildings of $700.000 and payoff of
certain debt related to the land of $365,000.
(c) This transaction is accounted for as a purchase
transaction and therefore, goodwill is recorded for the
difference between assets acquired and liabilities
assumed according to the terms and conditions of the
purchase contract.
* All prior goodwill was written off Chem-Con's
books
* Goodwill was recorded at $9,239,000 with a
life of 20 years
* Debt was recorded in the amount of $4,700,000
pursuant to the merger agreement, the
additional draw on the revolving line of
credit of $2,231,000 was recognized, and
unrecorded debt in the amount of $172,000 was
booked.
* All stockholder's equity accounts of Chem-Con
were eliminated
* Stockholder's equity was recorded for the
$3,000,000 of common stock to be issued in the
purchase at a guaranteed stock price of $2.00
per share
* Closing costs are estimated at $500,000
* Chem-Met land and building was wriiten up by
$1,505,000 to fair market value of $1,918,000.
(d) It is assumed that the current Charter National Bank
and the SBA debt of Chem-Con will be replaced by
Congress Financial and reclassified between current and
long-term.
Note 4 - Federal Income Tax Consequences of the Merger
The unaudited pro forma financial statements assume that the
merger qualifies as a taxable transaction for federal income tax
purposes.